PlainBillCongress, translated.Legislation. Context. Public interest.Referred to the House Committee on Ways and Means.
Congressional Research Service
No official summary is available in the imported record yet.
People & committees
Rep. Reschenthaler, Guy [R-PA-14] · R–PA
Legislative record
A procedural vote is different from passage. Passage in one chamber does not establish enactment. Explore the glossary.
Referred to the House Committee on Ways and Means.
Introduced in House
Introduced in House
Primary sources
Text links open the official source. We also preserved the text version used in the PlainBill explanation below.
Source last updated: Sep 19, 2026. Consult Congress.gov for the current record.
AI Conversation Starters
Choose a perspective, copy a prompt, and paste it into your preferred AI. Each prompt includes the bill version and available official source links, and asks for counterarguments as well as supporting evidence.
Analyze H.R.1496 as objectively as possible. Explain its main provisions, who would be affected, possible benefits and harms, implementation, exceptions, and uncertainties. Present the strongest arguments for and against it, and identify evidence needed to assess its public impact.
Examine H.R.1496 through a progressive lens, focusing on fairness, access, economic inequality, and effects on vulnerable communities. Explain potential benefits, costs, and unintended consequences. Consider the strongest counterarguments and distinguish stated goals from demonstrated outcomes.
Examine H.R.1496 through a conservative lens, focusing on fiscal responsibility, institutional stability, federalism, and the scope of government. Explain potential benefits, costs, and unintended consequences. Consider the strongest counterarguments and any provisions that challenge this perspective.
Examine H.R.1496 through a civil-liberties and limited-government lens. Consider individual rights, privacy, voluntary choice, accountability, and government power. Explain tradeoffs, possible safeguards, and the strongest counterarguments without assuming the proposal is beneficial or harmful.
PlainBill explanation
Based on the full Introduced in House · 2025-02-21 text. This explanation has not received human editorial review. This overview describes the proposal’s major provisions; it does not establish what its real-world effects would be.
The proposed Rare Earth Magnet Security Act of 2025 would create a temporary tax credit for businesses that manufacture qualifying permanent magnets in the United States and sell them. Manufacturers would receive a higher credit when at least 90% of the magnets’ component rare earth materials, by weight, are produced domestically. The proposal would restrict certain foreign-sourced materials and gradually reduce the credit to zero for magnets produced after 2037.
This Act may be cited as the Rare Earth Magnet Security Act of 2025.
(A) $20 per kilogram of rare earth magnets manufactured or produced in the United States by the taxpayer during the taxable year which are not described in subparagraph (B), and (B) $30 per kilogram of rare earth magnets manufactured or produced in the United States by the taxpayer during the taxable year if not less than 90 percent by weight of the component rare earth materials of such magnets are produced within the United States.
Except as provided in subparagraph (B), no credit shall be allowed under this section with respect to a rare earth magnet if any component rare earth material used to manufacture or produce such magnet is produced in a non-allied foreign nation.
in the case of any rare earth magnet manufactured or produced after December 31, 2037, 0 percent.
(A) manufactured or produced by the taxpayer, and (B) sold by such taxpayer to an unrelated person during the taxable year.
A business could claim the proposed credit for magnets it manufactures or produces and sells during the tax year, subject to the bill’s rules on related buyers. Production would have to occur in the ordinary course of the taxpayer’s business.
(A) manufactured or produced by the taxpayer, and (B) sold by such taxpayer to an unrelated person during the taxable year.
No credit shall be allowed under this section with respect to a rare earth magnet unless such magnet is manufactured or produced in the ordinary course of a trade or business of the taxpayer.
The credit would be $20 per kilogram of qualifying U.S.-produced magnets, or $30 per kilogram if at least 90% of their component rare earth materials by weight are produced in the United States.
(A) $20 per kilogram of rare earth magnets manufactured or produced in the United States by the taxpayer during the taxable year which are not described in subparagraph (B), and (B) $30 per kilogram of rare earth magnets manufactured or produced in the United States by the taxpayer during the taxable year if not less than 90 percent by weight of the component rare earth materials of such magnets are produced within the United States.
The credit would fall to 70% of its otherwise applicable amount for magnets produced in 2035 and 35% for those produced in 2036 or 2037. Magnets produced after December 31, 2037 would receive no credit. These reductions depend on the production date.
In the case of any rare earth magnet manufactured or produced after December 31, 2034, the amount determined under this section with respect to such rare earth magnet shall be equal to the product of— (i) the amount determined under paragraph (1) with respect to such rare earth magnet, as determined without regard to this subsection, multiplied by (ii) the phase-out percentage described in subparagraph (B).
(i) in the case of any rare earth magnet manufactured or produced in calendar year 2035, 70 percent, (ii) in the case of any rare earth magnet manufactured or produced in calendar year 2036 or 2037, 35 percent, or (iii) in the case of any rare earth magnet manufactured or produced after December 31, 2037, 0 percent.
Qualifying magnets generally would need a specified resistance to demagnetization, called intrinsic coercivity: at least 10 kOe at 68°F (20°C). They would also need to use either a neodymium–iron–boron alloy or a samarium–cobalt alloy, with the additional materials expressly allowed for each.
The term rare earth magnet means a permanent magnet— (A) with an intrinsic coercivity (HCj) of 10 kOe or higher at 68°F (20°C), and (B) comprised of— (i) an alloy of neodymium, iron, and boron, which may also include praseodymium, terbium, or dysprosium, or (ii) an alloy of samarium and cobalt, which may also include gadolinium or any associated host mineral of a component rare earth material.
The bill’s defined component materials are neodymium, praseodymium, dysprosium, terbium, samarium, gadolinium and cobalt. Its definition of manufacturing includes milling, pressing, sintering—bonding material through heat—and recycling these component materials as part of making a magnet.
The term component rare earth material means neodymium, praseodymium, dysprosium, terbium, samarium, gadolinium, and cobalt.
The term manufactured means the manufacturing of a rare earth magnet, including the milling, pressing, sintering, and recycling of component rare earth material.
Generally, a magnet would receive no credit if any of its defined component materials were produced in a “non-allied foreign nation.” The bill adopts that category from another statute rather than listing the countries.
Except as provided in subparagraph (B), no credit shall be allowed under this section with respect to a rare earth magnet if any component rare earth material used to manufacture or produce such magnet is produced in a non-allied foreign nation.
The term non-allied foreign nation has the meaning given to the term covered nation in section 4872(d) of title 10, United States Code.
The foreign-sourcing restriction would temporarily exclude dysprosium, terbium, samarium and gadolinium used in magnets produced before January 1, 2027. This exception would waive only that sourcing restriction for those materials.
In the case of the rare earth materials dysprosium, terbium, samarium, and gadolinium, the restriction under subparagraph (A) shall not apply to magnets manufactured or produced using such materials before January 1, 2027.
The Secretary could waive the magnet’s resistance-to-demagnetization threshold for certain manufacturers. A manufacturer would need both an Energy or Defense Department grant or contract to produce a magnet and a commitment to put a domestic magnet facility into service. The Secretary would have to determine that the facility’s magnets demonstrate technological, supply-chain or national-security merit.
The Secretary may elect to treat a magnet which does not meet the coercivity requirements of subsection (c)(1)(A) as a rare earth magnet if such magnet is manufactured by an eligible manufacturer.
the term eligible manufacturer means a manufacturer that— (i) receives a grant from, or is contracted by, the Department of Energy or the Department of Defense to produce a magnet, and (ii) commits to place in service a domestic manufacturing facility that produces magnets that the Secretary determines demonstrate technological, supply chain, or national security merit.
A sale to an unrelated buyer through a person related to the manufacturer would count toward the sales requirement.
a taxpayer shall be treated as selling rare earth magnets to an unrelated person if such magnet is sold to such person by a person related to the taxpayer.
A taxpayer could also elect to treat a sale to a related person as a sale to an unrelated person. Before allowing that election, the Secretary could require information or registration to prevent duplicate, fraudulent, improper or excessive credits.
At the election of the taxpayer (in such form and manner as the Secretary may prescribe), a sale of rare earth magnets by such taxpayer to a related person shall be deemed to have been made to an unrelated person.
As a condition of, and prior to, any election described in clause (i), the Secretary may require such information or registration as the Secretary deems necessary for purposes of preventing duplication, fraud, or any improper or excessive amount determined under paragraph (1).
A taxpayer could elect to have some or all of the allowed credit treated as a tax payment. The payment would count as made on the later of the tax return’s due date or its actual filing date. The Secretary would set the election’s timing and manner.
In the case of a taxpayer making an election (at such time and in such manner as the Secretary may provide) under this section with respect to any portion of the credit allowed under subsection (a), such taxpayer shall be treated as making a payment against the tax imposed by this subtitle for the taxable year equal to the amount of such portion.
The payment described in paragraph (1) shall be treated as made on the later of the due date of the return of tax for such taxable year or the date on which such return is filed.
The proposal would add the magnet credit to the tax code’s general business credit provisions and update the table of sections to include new section 45BB.
(b) Credit To be part of general business credit Section 38(b) of such Code is amended by striking plus at the end of paragraph (40), by striking the period at the end of paragraph (41) and inserting , plus, and by adding at the end the following new paragraph: (42) the credit for production of rare earth magnets determined under section 45BB(a).
The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 45AA the following new item: Sec. 45BB. Credit for production of rare earth magnets.
If enacted as written, the amendments would apply to tax years beginning after December 31, 2024.
The amendments made by this Act shall apply to taxable years beginning after December 31, 2024.
The supplied September 19, 2026 source snapshot records introduction in the House and referral to the House Committee on Ways and Means on February 21, 2025.
Source snapshot updated 2026-09-19T23:19:21Z. 2025-02-21: Referred to the House Committee on Ways and Means. 2025-02-21: Introduced in House
A closer look
Reviewed version: Introduced in House · 2025-02-21. These findings describe provisions and who may benefit; they are not judgments of waste, corruption, or motive.
This review covers the supplied bill text. “None identified” does not rule out provisions in later versions or accompanying reports and disclosures.
Provisions outside the bill’s main subject, or policy changes attached to appropriations.
None identified in the reviewed text
No unrelated provision or policy change attached to appropriations was identified in the complete supplied introduced text. This conclusion is limited to that version and does not establish what other versions or accompanying materials contain.
Spending directed to particular recipients or places outside ordinary competitive or formula-based allocation.
None identified in the reviewed text
No congressionally directed spending for particular recipients or places was identified in the complete supplied introduced text. This conclusion is limited to that version; accompanying materials needed to assess formal earmark status are not supplied.
Narrow exceptions, exemptions, or preferential treatment that warrant a closer look.
Findings to examine
Two narrow exceptions to the proposed credit’s eligibility restrictions warrant scrutiny. Both relate directly to the bill’s main policy; identifying them does not establish improper treatment or motive.
Manufacturers with an Energy or Defense Department magnet grant or contract and a qualifying domestic-facility commitment could receive a discretionary exemption from the usual resistance-to-demagnetization threshold. This gives that defined group access to the credit for magnets that otherwise fail the threshold.
The Secretary may elect to treat a magnet which does not meet the coercivity requirements of subsection (c)(1)(A) as a rare earth magnet if such magnet is manufactured by an eligible manufacturer.
the term eligible manufacturer means a manufacturer that— (i) receives a grant from, or is contracted by, the Department of Energy or the Department of Defense to produce a magnet, and (ii) commits to place in service a domestic manufacturing facility that produces magnets that the Secretary determines demonstrate technological, supply chain, or national security merit.
Manufacturers using dysprosium, terbium, samarium or gadolinium from a non-allied foreign nation would receive a temporary exception from the sourcing restriction for magnets produced before January 1, 2027. This material-specific exception preserves potential credit eligibility, subject to the other requirements.
Except as provided in subparagraph (B), no credit shall be allowed under this section with respect to a rare earth magnet if any component rare earth material used to manufacture or produce such magnet is produced in a non-allied foreign nation.
In the case of the rare earth materials dysprosium, terbium, samarium, and gadolinium, the restriction under subparagraph (A) shall not apply to magnets manufactured or produced using such materials before January 1, 2027.
Full text preserved for this analysis. Legislative record snapshot: Sep 19, 2026. How PlainBill uses AI