Critical Minerals and Manufacturing Support Act

I 119TH CONGRESS 1ST SESSION H. R. 3200 To amend the Internal Revenue Code of 1986 to modify the advanced manufacturing credit with respect to the production of battery components. IN THE HOUSE OF REPRESENTATIVES MAY 5, 2025 Mr. RUIZ (for himself and Mr. E VANS of Colorado) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to modify the advanced manufacturing credit with respect to the production of battery components. Be it enacted by the Senate and House of Representa-1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Critical Minerals and 4 Manufacturing Support Act’’. 5 SEC. 2. MODIFICATION OF ADVANCED MANUFACTURING 6 PRODUCTION CREDIT RELATING TO BAT-7 TERY PRODUCTION. 8 (a) INCREASE IN CREDIT AMOUNT FOR ELECTRODE 9 ACTIVE MATERIALS.—Section 45X(b)(1)(J) of the Inter-10 VerDate Sep 11 2014 03:04 May 10, 2025 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200kjohnson on DSK7ZCZBW3PROD with $$_JOB 2 •HR 3200 IH nal Revenue Code of 1986 is amended by striking ‘‘10 per-1 cent’’ and inserting ‘‘25 percent’’. 2 (b) S PECIAL RULES RELATING TO PRODUCTION OF 3 ELECTRODE ACTIVE MATERIALS.—Section 45X(b) of 4 such Code is amended by adding at the end the following 5 new paragraph: 6 ‘‘(5) SPECIAL RULES RELATING TO ELECTRODE 7 ACTIVE MATERIALS .— 8 ‘‘(A) P RODUCTION COSTS .—The produc-9 tion of electrode active materials shall include 10 the cost of raw materials, including material ex-11 traction from geological sources or waste prod-12 ucts.’’. 13 (c) S OURCING REQUIREMENTS WITH RESPECT TO 14 QUALIFYING BATTERY COMPONENTS AND APPLICABLE 15 CRITICAL MINERALS.—Section 45X of such Code is 16 amended by adding at the end the following new sub-17 section: 18 ‘‘(e) CRITICAL MINERAL AND BATTERY COMPONENT 19 SOURCING REQUIREMENTS.— 20 ‘‘(1) APPLICABLE CRITICAL MINERALS .— 21 ‘‘(A) I N GENERAL .—No credit shall be al-22 lowed under this section with respect to a quali-23 fying battery component unless the percentage 24 VerDate Sep 11 2014 03:04 May 10, 2025 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200kjohnson on DSK7ZCZBW3PROD with $$_JOB 3 •HR 3200 IH of the value of the applicable critical minerals 1 contained therein that were— 2 ‘‘(i) extracted or processed— 3 ‘‘(I) in the United States, or 4 ‘‘(II) in any country with which 5 the United States has a free trade 6 agreement in effect, or 7 ‘‘(ii) recycled, and reintegrated into 8 the supply chain, in North America, 9 is at least equal to the applicable percentage (as 10 certified by the taxpayer in such form or man-11 ner as prescribed by the Secretary). 12 ‘‘(B) A PPLICABLE PERCENTAGE .—For 13 purposes of subparagraph (A), the applicable 14 percentage shall be— 15 ‘‘(i) in the case of any qualifying bat-16 tery component sold to an unrelated person 17 during calendar year 2026, 70 percent, 18 and 19 ‘‘(ii) in the case of any qualifying bat-20 tery component sold to an unrelated person 21 after December 31, 2026, 80 percent. 22 ‘‘(2) QUALIFYING BATTERY COMPONENTS .— 23 ‘‘(A) I N GENERAL .—No credit shall be al-24 lowed under this section with respect to a quali-25 VerDate Sep 11 2014 03:04 May 10, 2025 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200kjohnson on DSK7ZCZBW3PROD with $$_JOB 4 •HR 3200 IH fying battery component unless the percentage 1 of the value of the constituent elements, mate-2 rials, and subcomponents contained therein that 3 were produced, manufactured, or assembled in 4 North America is at least equal to the applica-5 ble percentage (as certified by the taxpayer, in 6 such form or manner as prescribed by the Sec-7 retary). 8 ‘‘(B) A PPLICABLE PERCENTAGE .—For 9 purposes of subparagraph (A), the applicable 10 percentage shall be— 11 ‘‘(i) in the case of qualifying battery 12 components sold to an unrelated person 13 during calendar year 2026, 70 percent, 14 ‘‘(ii) in the case of qualifying battery 15 components sold to an unrelated person 16 during calendar year 2027, 80 percent, 17 ‘‘(iii) in the case of qualifying battery 18 components sold to an unrelated person 19 during calendar year 2028, 90 percent, 20 and 21 ‘‘(iv) in the case of qualifying battery 22 components sold to an unrelated person 23 after December 31, 2028, 100 percent. 24 VerDate Sep 11 2014 03:04 May 10, 2025 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200kjohnson on DSK7ZCZBW3PROD with $$_JOB 5 •HR 3200 IH ‘‘(3) R EGULATIONS.—The Secretary shall, to 1 the extent practicable, prescribe regulations similar 2 to regulations prescribed under section 30D(e) to 3 carry out the purposes of this subsection.’’. 4 (d) E XCLUDED ENTITIES.—Section 45X(c)(1) of 5 such Code is amended by adding at the end the following 6 new subparagraph: 7 ‘‘(C) EXCLUDED ENTITIES .—The term ‘eli-8 gible component’ shall not include any quali-9 fying battery component with respect to 10 which— 11 ‘‘(i) any of the applicable critical min-12 erals contained therein were extracted, 13 processed, or recycled by a foreign entity 14 of concern (as defined in section 15 40207(a)(5) of the Infrastructure Invest-16 ment and Jobs Act (42 U.S.C. 17 18741(a)(5))), and 18 ‘‘(ii) any of the constituent elements, 19 materials, or subcomponents contained 20 therein were produced, manufactured, or 21 assembled by a foreign entity of concern 22 (as so defined). 23 The term ‘foreign entity of concern’ shall in-24 clude any entity that is directly or indirectly 25 VerDate Sep 11 2014 03:04 May 10, 2025 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200kjohnson on DSK7ZCZBW3PROD with $$_JOB 6 •HR 3200 IH owned by a foreign entity of concern described 1 in subparagraph (C) of section 40207(a)(5) of 2 such Act.’’. 3 (e) M ODIFICATION OF ELECTRODE ACTIVE MATE-4 RIAL DEFINITION.— 5 (1) I N GENERAL .—Section 45X(c)(5)(B)(i) of 6 such Code is amended— 7 (A) by inserting ‘‘electrode active precursor 8 materials used in the production of cathode and 9 anode materials,’’ after ‘‘anode materials,’’, 10 (B) by inserting ‘‘binders,’’ after ‘‘anode 11 foils,’’, and 12 (C) by inserting ‘‘solid state electrolytes,’’ 13 after ‘‘including’’. 14 (2) E LECTRODE ACTIVE PRECURSOR MATE -15 RIALS.—Section 45X(c)(5)(B)(i) of such Code is 16 amended— 17 (A) by striking ‘‘ MATERIAL.—The term’’ 18 and inserting the following: ‘‘ MATERIAL.— 19 ‘‘(I) I N GENERAL .—The term’’, 20 and 21 (B) by adding at the end the following new 22 subclause: 23 ‘‘(II) E LECTRODE ACTIVE PRE -24 CURSOR MATERIAL .—The term ‘elec-25 VerDate Sep 11 2014 03:04 May 10, 2025 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200kjohnson on DSK7ZCZBW3PROD with $$_JOB 7 •HR 3200 IH trode active precursor material’ means 1 any of the following materials which 2 are of a sufficient grade to meet the 3 purity specifications to supply the 4 electrode active materials market: Co-5 balt sulfate, manganese sulfate, iron 6 sulfate, lithium hydroxide, metallur-7 gical silicon, phosphoric acid, iron 8 phosphate, nickel manganese cobalt 9 oxide, graphene, sulfur, synthetic or 10 natural graphite pitch, or lithium car-11 bonate.’’. 12 (f) C ERTAIN SILICON TREATED AS APPLICABLE 13 CRITICAL MATERIAL.—Section 45X(c)(6) of such Code is 14 amended by redesignating subparagraphs (T) through (Z) 15 as subparagraphs (U) through (AA), respectively, and by 16 inserting after subparagraph (S) the following new sub-17 paragraph: 18 ‘‘(T) S ILICON.—Silicon which is silicon or 19 silicon composite used as an electrode active 20 material in battery anodes.’’. 21 (g) E FFECTIVE DATE.—The amendments made by 22 this section shall apply to components produced and sold 23 after December 31, 2025. 24 Æ VerDate Sep 11 2014 03:04 May 10, 2025 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H3200.IH H3200kjohnson on DSK7ZCZBW3PROD with $$_JOB