In the original sentence, the conditional tense in "would increase" is appropriate; the law isn't in effect yet, so the effect is expressed in the conditional tense. However, the verb tense in the phrase "have been allowed to build" isn't correct; it indicates, contrary to the intended meaning, that the law is changing what carmakers were allowed to do in the recent past.
Choice (B) has the same problem. Choices (C) and (E) fail to use "would." Could such the indicative (normal) verb tense be correct here? It could be a reasonable intended meaning of a sentence similar to this one that the bill will pass with certainty and the effect will take place. However, we can infer that the intended meaning of the sentence in this question is different, because it refers to a "proposed" law. The law, evidently, will not necessarily pass, so the intended meaning is conveyed by the conditional tense, not by the indicative tense. Furthermore, (C) uses the unidiomatic "tint amount," while (E) uses the unidiomatic "allowed for windows by carmakers."
The correct answer is (D).