American Energy Independence and Affordability Act
- Bill Number
- H.R. 5862
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-10-28: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-04-09T16:01:19Z
AI-Generated Summary
Purpose
The American Energy Independence and Affordability Act (H.R. 5862) aims to restore and extend various tax credits and incentives in the Internal Revenue Code of 1986 that support clean energy production, energy efficiency improvements, and clean vehicle adoption. These provisions were previously modified or terminated by Public Law 119-21 (likely referring to a recent reconciliation or budget act). The bill promotes "all-of-the-above" energy strategies to lower costs, enhance U.S. energy independence, and encourage domestic manufacturing and innovation in sustainable technologies.
Key Provisions
The bill is organized into three titles, each focusing on specific areas of energy policy. Amendments generally take effect as if included in Public Law 119-21, meaning they retroactively adjust prior changes.
Title I: Lowering Energy Costs through All-of-the-Above Energy Production
- Clean Energy Production Credit (Sec. 101): Restores the phase-out timeline for the credit (under Section 45Y), tying it to reduced U.S. greenhouse gas emissions from electricity (no earlier than 2032). Reinstates full credits for wind and solar facilities, including leasing arrangements, and removes restrictions based on prior studies.
- Clean Electricity Investment Credit (Sec. 102): Eliminates early termination for wind and solar facilities (under Section 48E). Restores credits for leasing arrangements and certain energy property (e.g., adjusts base rate to 2% for specific items).
- Advanced Manufacturing Production Credit (Sec. 103): Removes metallurgical coal from eligible critical minerals (under Section 45X) and repeals the termination date for wind energy components, allowing ongoing credits for manufacturing eligible products.
- Advance Energy Project Credit Extension (Sec. 104): Removes limits on expanding the program (under Section 48C), enabling further allocation of credits for advanced energy projects.
- Clean Hydrogen Production Credit (Sec. 105): Extends the construction start date from January 1, 2028, to January 1, 2033 (under Section 45V).
- Residential Clean Energy Credit (Sec. 106): Delays termination from December 31, 2025, to December 31, 2034 (under Section 25D), with a phased reduction in credit rates (30% through 2032, then 26% in 2033, and 22% in 2034).
- Sustainable Aviation Fuel Credit (Sec. 107): Reinstitutes a special higher rate for sustainable aviation fuel (under Section 45Z)—35 cents per gallon for certain facilities and $1.75 for others—defining it as fuel meeting specific ASTM standards (excluding palm-based or petroleum-derived sources).
Title II: Lowering Energy Costs through Energy Efficiency
- Energy Efficient Home Improvement Credit (Sec. 201): Reinstates a "product identification number" requirement (under Section 25C) for items placed in service after December 31, 2024. Manufacturers must assign unique IDs, label products, and report to the IRS to qualify for credits on energy-efficient appliances and improvements.
- New Energy Efficient Home Credit (Sec. 202): Extends eligibility for credits on zero-energy-ready homes from after June 30, 2026, to after December 31, 2032 (under Section 45L).
- New Energy Efficient Commercial Buildings Deduction (Sec. 203): Repeals the termination of the deduction (under Section 179D), allowing ongoing tax deductions for energy-efficient building designs.
- Cost Recovery for Energy Property (Sec. 204): Restores accelerated depreciation (5-year recovery period under Section 168) for energy property, including wind energy (expanding from solar-only).
Title III: Ensuring America Leads the Way in Our Automotive Future
- Previously-Owned Clean Vehicle Credit (Sec. 301): Extends the credit termination from after September 30, 2025, to after December 31, 2032 (under Section 25E).
- New Clean Vehicle Credit (Sec. 302): Pushes termination from after September 30, 2025, to after December 31, 2032 (under Section 30D). Includes phase-down adjustments for critical mineral and battery component requirements (reaching 100% domestic content after 2028).
- Qualified Commercial Clean Vehicles Credit (Sec. 303): Extends termination from September 30, 2025, to December 31, 2032 (under Section 45W).
- Alternative Fuel Vehicle Refueling Property Credit (Sec. 304): Delays termination from June 30, 2026, to December 31, 2032 (under Section 30C), covering charging stations and refueling infrastructure.
Significant Changes to Existing Law
This bill reverses key restrictions from Public Law 119-21 by:
- Extending termination dates for multiple credits (e.g., from 2025-2026 to 2032-2034), preventing their early phase-out.
- Removing exclusions (e.g., for metallurgical coal, wind components, and leasing arrangements) and reinstating full eligibility or higher rates (e.g., for sustainable aviation fuel).
- Restoring administrative requirements (e.g., product IDs) and depreciation benefits that were curtailed, effectively broadening access to incentives without introducing new taxes or penalties.
Potential Impacts
- On Government Agencies: The IRS will need to update forms, guidance, and reporting systems for extended credits, potentially increasing administrative workload but also extending revenue collection before phase-outs. The Department of Energy may see more applications for advanced project allocations.
- On Citizens: Homeowners, vehicle buyers, and builders gain extended access to tax credits (up to 30% on costs), reducing upfront expenses for solar panels, efficient appliances, electric vehicles, and home upgrades—potentially lowering energy bills and promoting affordability.
- On Businesses and Industry: Energy producers, manufacturers, and aviation firms benefit from restored incentives, encouraging investment in U.S.-based clean tech and infrastructure. This could boost job creation in renewables and manufacturing but reduce federal tax revenue through higher credit claims (estimated as tax expenditures).
- On International Relations: Enhances U.S. leadership in global clean energy markets by supporting domestic production of components (e.g., batteries, wind turbines), potentially reducing reliance on foreign imports and aligning with international climate goals without direct foreign policy changes.
Main Stakeholders Affected
- Energy Producers and Utilities: Wind, solar, hydrogen, and clean electricity developers gain from extended production and investment credits.
- Manufacturers: Advanced tech firms (e.g., for batteries, wind components) and appliance makers benefit from production credits and depreciation rules.
- Consumers and Homeowners: Individuals purchasing or installing clean energy systems, efficient homes, or electric vehicles (new, used, or commercial) receive prolonged tax relief.
- Automotive and Transportation Sectors: Electric vehicle makers, dealers, and infrastructure providers (e.g., charging stations) see sustained incentives; aviation fuel producers get higher rates for sustainable options.
- Builders and Commercial Entities: Architects, contractors, and building owners can claim deductions for energy-efficient designs longer-term.
- Taxpayers and Government: Broader credit availability may increase federal deficits but supports economic growth in green sectors.
Notable Legal, Constitutional, or Political Implications
- Legal: All changes fall under Congress's authority to amend the tax code (Article I, Section 8 of the U.S. Constitution). Terms like "qualified product identification number" (a unique ID for tracking eligible items) ensure anti-fraud measures without overly burdening claimants. No challenges to enforceability are evident, as amendments align with existing IRC structures.
- Constitutional: Reinforces federal taxing and spending powers to incentivize environmental and economic goals, without infringing on states' rights or due process.
- Political: Bipartisan sponsorship (over 100 House members, mostly Democrats) signals broad support for energy independence amid affordability concerns. It counters potential rollbacks in prior laws, promoting a balanced "all-of-the-above" approach (renewables plus efficiency) that could influence future climate and budget debates, though extended credits may face scrutiny over fiscal costs in a divided Congress.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (128)
Rep. Neal, Richard E. [D-MA-1], Rep. Doggett, Lloyd [D-TX-37], Rep. Larson, John B. [D-CT-1], Rep. Davis, Danny K. [D-IL-7], Rep. Sánchez, Linda T. [D-CA-38], Rep. Sewell, Terri A. [D-AL-7], Rep. DelBene, Suzan K. [D-WA-1], Rep. Chu, Judy [D-CA-28], Rep. Moore, Gwen [D-WI-4], Rep. Boyle, Brendan F. [D-PA-2], Rep. Beyer, Donald S. [D-VA-8], Rep. Evans, Dwight [D-PA-3], Rep. Schneider, Bradley Scott [D-IL-10], Rep. Panetta, Jimmy [D-CA-19], Rep. Gomez, Jimmy [D-CA-34], Rep. Horsford, Steven [D-NV-4], Del. Plaskett, Stacey E. [D-VI-At Large], Rep. Suozzi, Thomas R. [D-NY-3], Rep. Fields, Cleo [D-LA-6], Rep. Barragán, Nanette Diaz [D-CA-44], Rep. Ansari, Yassamin [D-AZ-3], Rep. Tonko, Paul [D-NY-20], Rep. Cleaver, Emanuel [D-MO-5], Rep. Carter, Troy A. [D-LA-2], Rep. Vargas, Juan [D-CA-52], Rep. Tran, Derek [D-CA-45], Rep. Matsui, Doris O. [D-CA-7], Rep. Salinas, Andrea [D-OR-6], Rep. McCollum, Betty [D-MN-4], Rep. Garcia, Robert [D-CA-42], Rep. Norcross, Donald [D-NJ-1], Rep. Castor, Kathy [D-FL-14], Rep. Garamendi, John [D-CA-8], Rep. Scott, Robert C. "Bobby" [D-VA-3], Rep. Lieu, Ted [D-CA-36], Rep. DeGette, Diana [D-CO-1], Rep. Lynch, Stephen F. [D-MA-8], Rep. Cherfilus-McCormick, Sheila [D-FL-20], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. McIver, LaMonica [D-NJ-10], Rep. Kelly, Robin L. [D-IL-2], Rep. Landsman, Greg [D-OH-1], Rep. Simon, Lateefah [D-CA-12], Rep. Casten, Sean [D-IL-6], Rep. Goldman, Daniel S. [D-NY-10], Rep. Tokuda, Jill N. [D-HI-2], Rep. Gonzalez, Vicente [D-TX-34], Rep. Kennedy, Timothy M. [D-NY-26], Rep. DeSaulnier, Mark [D-CA-10], Rep. Min, Dave [D-CA-47] and 78 more
Recent Actions
- 2025-10-28: Referred to the House Committee on Ways and Means.
- 2025-10-28: Introduced in House
- 2025-10-28: Introduced in House
Bill Versions
- American Energy Independence and Affordability Act — issued 2025-10-28 — PDF (15 pages)