Transportation Freedom Act
- Bill Number
- H.R. 2814
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Environmental Protection
- Status
- Introduced
- Latest Action
- 2025-04-10: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- Last Updated
- 2026-02-24T23:51:15Z
AI-Generated Summary
Purpose of the Legislation
The "Transportation Freedom Act" (H.R. 2814) aims to bolster U.S. automobile manufacturing by offering tax incentives for domestic production and worker benefits, while easing federal emissions and fuel economy regulations. It seeks to prioritize economic feasibility, job stability, and market-driven technology over aggressive environmental mandates, effectively shifting policy toward supporting traditional internal combustion engine vehicles rather than electric ones.
Key Provisions
- Title I: Support for American Automobile Manufacturing
- Introduces a new tax deduction (Section 199B of the Internal Revenue Code) allowing qualifying companies a 200% deduction on eligible wages paid to U.S.-based auto manufacturing workers.
- To qualify, companies must meet strict criteria, including:
- Producing at least 75% of sold vehicles, engines, transmissions, and batteries in the U.S.
- Not offshoring production.
- Providing platinum-level health insurance (a high-coverage tier under the Affordable Care Act) to workers and retirees.
- Offering robust pension plans (e.g., defined benefit plans replacing at least 50% of wages after 30 years, or defined contribution plans with 10% employer match).
- Sharing profits (at least $2 per $1 of non-recurring dividends or stock redemptions) via profit-sharing plans.
- Remaining neutral in union organizing efforts under the National Labor Relations Act.
- Eligible wages are capped at $150,000 per worker annually and must meet or exceed the 75th percentile for their occupation and industry.
- Companies cannot deduct these wages as regular business expenses (under Section 162(a)) and must certify compliance to the IRS.
- Applies to tax years after enactment.
- Title II: Multipollutant Emissions Standards
- Repeals three recent federal rules:
- EPA's Multi-Pollutant Emissions Standards for Model Years 2027+ Light- and Medium-Duty Vehicles (April 2024).
- EPA's Phase 3 Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles (April 2024).
- NHTSA's Corporate Average Fuel Economy (CAFE) Standards for Model Years 2027+ and Heavy-Duty Fuel Efficiency Standards (June/July 2024).
- These rules are declared to have "no force or effect," nullifying stricter emissions and fuel economy requirements.
- Title III: Emissions Waivers
- Amends the Clean Air Act (Section 209(b)) to prohibit the EPA from granting new waivers allowing states (like California) to set stricter vehicle emissions standards than federal ones.
- Revokes all existing waivers, including those for zero-emission vehicle mandates.
- Repeals Section 177 of the Clean Air Act, which allowed other states to adopt California's standards, and makes conforming changes.
- Title IV: Federal Greenhouse Gas Emissions Standards and CAFE Standards
- Subtitle A: Passenger Automobiles
- Defines key terms (e.g., "greenhouse gas emissions" as CO2, methane, etc.).
- Requires the Secretary of Transportation (for CAFE standards) and EPA Administrator (for GHG standards) to set new standards for model years 2027–2035 within 180 days of enactment.
- Standards must be economically practical, based on achievable technology, market readiness, industry capacity, and job impacts; they cannot mandate electric vehicles or consider certain alternative fuels in baselines.
- Mandates consultations with stakeholders (manufacturers, energy producers, consumers) and biennial reports to Congress, allowing adjustments based on market and tech changes.
- If new standards aren't set on time, 2025 standards continue through 2035.
- Creates "deemed compliance": Meeting CAFE standards satisfies EPA GHG rules (and vice versa), including via credits or penalties.
- Authorizes necessary appropriations.
- Subtitle B: Heavy-Duty Vehicles
- Requires EPA to set new GHG standards for heavy-duty trucks starting model year 2027 within 180 days, using similar economic and feasibility criteria.
- Until finalized, reverts to 2024 standards from the 2016 Phase 2 rule.
- Requires stakeholder consultations.
Significant Changes to Existing Law
- Tax Code Amendments: Adds a new deduction (Section 199B) tied to domestic production and worker protections, adjusting financial statement income calculations to avoid double-counting. This is a major incentive not previously available, emphasizing U.S. manufacturing and benefits.
- Environmental Regulations: Completely repeals recent EPA and NHTSA rules that imposed tougher emissions and fuel economy targets, promoting electric and hybrid vehicles. Replaces them with flexible standards focused on gasoline-compatible tech, explicitly barring EV mandates.
- Clean Air Act Overhaul: Ends state waivers for stricter standards (a long-standing provision since 1970), revokes prior approvals, and eliminates interstate adoption of non-federal rules. Introduces cross-compliance between CAFE and GHG standards, simplifying but weakening enforcement.
- No Changes to Broader Laws: Does not alter core CAFE authority (49 U.S.C. §32902) or Clean Air Act emissions powers (42 U.S.C. §7521), but constrains their application.
Potential Impacts
- Government Agencies: EPA and NHTSA face reduced regulatory burden and authority over state-level standards, potentially leading to lighter enforcement and more industry consultations. IRS gains new certification oversight for tax deductions. Could strain resources for biennial reports and standard-setting.
- Citizens: Auto workers may benefit from higher wages, better health/pension coverage, and profit-sharing if employed by qualifying firms. Consumers could see more affordable gasoline vehicles but higher long-term fuel costs and environmental health risks from relaxed emissions. Retirees from qualifying companies gain enhanced health benefits.
- International Relations: May affect U.S. trade and climate commitments (e.g., Paris Agreement) by slowing EV transition and favoring domestic fossil-fuel tech, potentially straining ties with allies pushing green policies. Boosts U.S. auto competitiveness against foreign EV makers.
- Environment: Likely increases overall GHG emissions and air pollution by repealing stringent rules and barring EV requirements, delaying climate goals without mandating alternatives.
Main Stakeholders Affected
- Automobile Manufacturers: Major beneficiaries (e.g., traditional U.S. firms like GM, Ford) through tax breaks and relaxed standards, but only if they meet domestic production and worker criteria; foreign or EV-focused companies may face hurdles.
- Workers and Unions: Direct gains for U.S. manufacturing employees via wage deductions, benefits, and profit-sharing; neutrality clause limits union opposition but protects organizing rights.
- States and Regulators: States like California lose autonomy on emissions (e.g., zero-emission mandates), impacting air quality efforts; other states can no longer adopt stricter rules.
- Energy Producers: Fossil fuel companies (oil, gas) gain from gasoline-focused standards; renewable/electricity sectors lose from EV barriers.
- Consumers and Environmental Groups: Consumers get cheaper vehicles short-term but face pollution/fuel costs; advocacy groups may oppose rollbacks on climate grounds.
- Taxpayers: Potential revenue loss from enhanced deductions, offset by economic growth in auto sector.
Notable Legal, Constitutional, or Political Implications
- Legal: Repeals and revocations could invite lawsuits from states (e.g., California) challenging federal overreach under the Clean Air Act's cooperative federalism. "Deemed compliance" provisions may simplify enforcement but risk inconsistencies in judicial review. Tax deduction requires IRS rulemaking for certifications, potentially leading to compliance disputes.
- Constitutional: Impacts federalism by curtailing states' rights to set environmental standards (10th Amendment concerns), overriding decades of precedent on waivers. No direct free speech or due process issues, but neutrality clause could raise First Amendment questions if seen as restricting corporate speech on unions.
- Political: Signals a pro-industry, anti-regulatory shift, favoring job protection in Rust Belt states over national climate action. Could polarize debates on energy policy, with support from manufacturing lobbies and opposition from environmentalists; biennial reporting adds congressional oversight, potentially enabling future tweaks.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Balderson, Troy [R-OH-12]
Cosponsors (16)
Rep. Barr, Andy [R-KY-6], Rep. Cuellar, Henry [D-TX-28], Rep. Gooden, Lance [R-TX-5], Rep. Bacon, Don [R-NE-2], Rep. Franklin, Scott [R-FL-18], Rep. Weber, Randy K. Sr. [R-TX-14], Rep. Hill, J. French [R-AR-2], Rep. McGuire, John J. [R-VA-5], Rep. Bentz, Cliff [R-OR-2], Rep. Amodei, Mark E. [R-NV-2], Rep. Van Drew, Jefferson [R-NJ-2], Rep. Mann, Tracey [R-KS-1], Rep. Owens, Burgess [R-UT-4], Rep. Miller, Mary E. [R-IL-15], Rep. Cole, Tom [R-OK-4], Rep. Loudermilk, Barry [R-GA-11]
Recent Actions
- 2025-04-10: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-04-10: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-04-10: Introduced in House
- 2025-04-10: Introduced in House
Bill Versions
- Transportation Freedom Act — issued 2025-04-10 — PDF (19 pages)