H.R. 4714 — End Polluter Welfare Act of 2025

This section repeals royalty incentive authorities under sections 344 and 345 of the Energy Policy Act of 2005 (42 U.S.C. 15904, 15905), which required regulations granting royalty suspension volumes of at least 35 billion cubic feet for natural gas production from ultra-deep wells (perforated interval top at least 20,000 feet true vertical depth below mean sea level) and deep wells in specified shallow Gulf of Mexico waters. The section also strikes the royalty suspension subparagraph from section 8(a)(3) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)), makes conforming clerical amendments, and prohibits royalty relief under any lease issued under that Act.

This section increases minimum royalty rates for federal leases issued under the Mineral Leasing Act (MLA) as follows: (1) for coal leases, to 18¾ percent (from 12½ percent); (2) for leases on lands where oil or natural gas is discovered, to 18¾ percent (from 12½ percent); and (3) for competitive oil and gas leases, to 18¾ percent (from 16⅔ percent) in specified provisions, including certain minimum rates and communal oil and gas leasing terms. (The MLA authorizes leasing of federal lands for coal, oil, and natural gas extraction, with royalties paid to the U.S. Treasury.)

This section revises the minimum royalty rate for outer Continental Shelf oil and gas leases under three competitive sealed bidding systems—(A) cash bonus with fixed royalty, (C) cash bonus or work commitment with sliding royalty, and (F) cash bonus with fixed royalty—to not less than 18 3/4 percent fixed by the Secretary (from not less than 16 2/3 percent but not more than 18 3/4 percent during the 10-year period beginning August 16, 2022, and not less than 16 2/3 percent thereafter). (Thus, it eliminates the maximum rate cap of 18 3/4 percent and the time-limited structure.)

This section prohibits payment of interest on any overpayment of oil and gas royalties. (Thus, lessees receive refunds of overpaid royalties without accrued interest.)

This section removes liability limits under the Oil Pollution Act of 1990 (OPA) for (1) offshore facilities (except deepwater ports), replacing the $75 million cap with full liability for removal costs and damages under OPA section 1002 (33 U.S.C. 2702); and (2) onshore pipelines transporting diluted bitumen, bituminous mixtures, or oil manufactured from bitumen, subjecting them to full liability under section 1002 instead of the $350 million cap applicable to other onshore facilities and deepwater ports. (Thus, responsible parties for oil spills from these facilities and pipelines face OPA's strict liability for all removal costs and damages without fixed caps, absent exceptions such as gross negligence.)

This section defines "international financial institution" to include each institution described in section 1701(c) of the International Financial Institutions Act (i.e., multilateral development banks such as the World Bank and regional development banks) and the North American Development Bank. The section rescinds unobligated balances of U.S. contributions to such institutions equivalent to the amount of support the institution provides for any project supporting fossil fuel production or use, as determined by the Secretary of the Treasury. The section further prohibits providing any future appropriated U.S. contributions to such an institution unless it agrees not to use the funds for support of any project supporting fossil fuel production or use.

This section terminates the authority of the Secretary of Energy to carry out the Office of Fossil Energy and Carbon Management (FECM) at the Department of Energy. (As background, FECM conducts research, development, and demonstration activities for fossil fuel technologies, including carbon capture, utilization, storage, and other carbon management strategies.) It further rescinds all unobligated amounts made available for FECM as of enactment and prohibits expenditure of any amounts made available for FECM after enactment, except as necessary to terminate ongoing research as determined by the Secretary in consultation with other federal agencies.

This section prohibits the Loan Programs Office (LPO) of the Department of Energy from using funds for any project supporting fossil fuels, carbon capture, or hydrogen. (As background, the LPO provides loan guarantees for innovative energy projects, including advanced fossil energy, renewables, and hydrogen technologies.) The prohibition does not apply to hydrogen projects supporting qualified clean hydrogen (i.e., hydrogen produced with lifecycle greenhouse gas emissions not exceeding specified thresholds, as defined in section 45V(c) of the Internal Revenue Code).

This section strikes eligibility for carbon capture and storage systems from loan guarantees under the Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program. (As background, the program provides loan guarantees to eligible entities for the development, construction, and retrofitting of commercial-scale biorefineries using eligible technologies to produce advanced biofuels, renewable chemicals, or biobased products. Thus, assistance is now limited to renewable energy systems and other previously eligible biorefinery technologies.)

This section eliminates eligibility for Department of Energy (DOE) loan guarantees under the innovative clean energy technologies program by striking from the list of eligible project categories (1) advanced fossil energy technology (including coal gasification) and (2) refineries and by removing the gasification projects subsection. (As background, the program provides federal loan guarantees to reduce financial risk for private lenders financing deployment of new or improved technologies that avoid, reduce, utilize, or sequester greenhouse gas emissions.) It also makes conforming amendments to the program's funding provisions.

This section prohibits the Secretary of Agriculture from making a loan under title III of the Rural Electrification Act of 1936 (7 U.S.C. 931 et seq.) for any project that will use fossil fuel. (Thus, Rural Utilities Service loans cannot finance rural electric or telecommunications infrastructure involving fossil fuels such as coal, natural gas, or petroleum.)

This section prohibits the United States International Development Finance Corporation (DFC), the Export-Import Bank of the United States (EXIM Bank), the United States Trade and Development Agency (TDA), the United States Agency for International Development (USAID), and the Millennium Challenge Corporation (MCC) from obligating or expending appropriated or otherwise available funds—effective for funds available on or after enactment—to support any project, transaction, or other activity involving the production or use of fossil fuels. (Thus, these agencies, which provide financing, insurance, grants, and technical assistance for development projects abroad, are barred from supporting oil, natural gas, or coal-related activities.)

This section prohibits the Department of Transportation, including the Federal Railroad Administration, from using any appropriated funds to award grants, loans, loan guarantees, or provide other direct assistance to rail facilities or port projects that transport fossil fuel.

This section amends the definition of owner or operator under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) to render ineligible for the secured creditor exemptions certain large lenders: (1) investment companies registered under the Investment Company Act of 1940, investment advisers, or brokers or dealers with $250 billion or more in assets under management; and (2) bank holding companies with $10 billion or more in total consolidated assets. (As background, CERCLA holds owners and operators strictly liable for hazardous substance response costs but exempts holders of security interests—such as lenders that foreclose primarily to protect that interest—from owner or operator status.) (Thus, the specified large lenders may be held liable as owners or operators notwithstanding their status as secured creditors.)

This section adds a new IRC §7875 terminating multiple tax incentives and special rules related to fossil fuel production, pollution control, and related costs, generally effective after the date of enactment of this Act (with conforming amendments to IRC §613(d) and the table of sections for subchapter C of chapter 80). **(a) Taxable years beginning after enactment**, the following provisions cease to apply: (1) enhanced oil recovery credit (IRC §43); (2) credit for producing oil and natural gas from marginal wells (§45I); (3) special rule for spudding of oil or natural gas wells (§461(i)(2)); (4) active participation exception for working interests in oil and natural gas property (§469(c)(3)(A)); and (5) percentage depletion allowance for oil and natural gas wells (§613A). **(b) Property placed in service after enactment**, the following provisions cease to apply: (1) 5-year recovery period for certain oil and natural gas property (§168(e)(3)(C)(iii)); and (2) amortization of pollution control facilities (§169), with respect to atmospheric pollution control facilities. **(c) Costs or expenses paid or incurred after enactment**, the following provisions cease to apply: (1) deduction for capital costs to comply with EPA sulfur regulations (§179B); and (2) special rules for mining and solid waste reclamation and closing costs (§468). **(d)** No new credits may be certified under the qualifying advanced coal project credit (§48A) after enactment. **(e)** The safe harbor for prepaid natural gas (§148(b)(4)) ceases to apply to obligations issued after enactment.

This section excludes fossil fuel activities—defined as the exploration, development, mining or production, processing, refining, transportation (including pipelines), distribution, or marketing of coal, petroleum, natural gas, or any fuel derivative thereof—from specified tax benefits, effective generally after enactment of the End Polluter Welfare Act of 2025 (with an exception for certain motor vehicle service stations and convenience stores under bonus depreciation). Specifically, the section (1) denies bonus depreciation under IRC §168(k) for property primarily used in such activities and placed in service after enactment; (2) excludes fossil fuel-related gain or loss from the qualified business income deduction under §199A for taxable years beginning after enactment; (3) disqualifies research related to fossil fuel activities from the credit for increasing research activities under §41 for activities conducted after enactment; (4) excludes income derived from fossil fuel activities from the foreign-derived intangible income deduction under §250 for taxable years beginning after enactment; and (5) denies like-kind exchange treatment under §1031 for exchanges of real property used in fossil fuel activities occurring after enactment.

This section revises the amortization rules for geological and geophysical expenditures (i.e., costs for seismic surveys and other exploration activities primarily incurred by oil and gas companies) by (1) extending the amortization period to an 84-month period (from 24 months) in paragraphs (1) and (4) of IRC §167(h), (2) replacing paragraph (2) with a mid-month convention treating amounts paid or incurred in a month as occurring at the month's midpoint, and (3) striking paragraph (5). The changes apply to amounts paid or incurred after the date of enactment.

This section treats natural gas gathering lines the original use of which commences with the taxpayer after the date of enactment as 15-year property under the Modified Accelerated Cost Recovery System (MACRS) (from 20-year property) and as 22-year property under the alternative depreciation system. (Thus, such lines qualify for faster depreciation deductions.) The amendments apply to property placed in service after enactment, except for property subject to a binding construction contract or, for self-constructed property, construction started on or before the date of this Act's introduction.

This section terminates the last-in, first-out (LIFO) inventory accounting method under IRC §472(a) and §473 for taxpayers engaged in the production, refining, processing, transportation, or distribution of oil, natural gas, or coal for taxable years beginning after enactment of this Act. (Thus, affected taxpayers must change to an alternative inventory method such as first-in, first-out (FIFO), with any such change treated as taxpayer-initiated and made with Treasury Secretary consent.)

This section terminates the percentage depletion allowance under Section 613 of the Internal Revenue Code for coal, lignite, and oil shale (other than oil shale described in subsection (b)(5)) for taxable years beginning after enactment. (As background, percentage depletion allows extractors of certain minerals to deduct a specified percentage of gross income from mineral sales as an alternative to cost depletion; thus, affected taxpayers must use cost depletion instead.) It makes conforming amendments by striking coal and lignite from the list of minerals eligible for percentage depletion in subsection (b)(4) and revising subsection (b)(2) to limit the 15% rate to gold, silver, copper, and iron ore extracted from U.S. deposits.

This section terminates capital gains treatment for royalties from coal (including lignite) under section 631(c) of the Internal Revenue Code, limiting such treatment to iron ore only, and makes conforming amendments to the section heading and to section 1231(b)(2). (As background, section 631(c) allows taxpayers who own a coal or iron ore mineral interest to elect capital gains treatment—rather than ordinary income—for amounts received from dispositions of the interest to lessees or sublessees.) The amendments apply to dispositions after the date of enactment.

This section establishes special rules under new IRC §901(n) limiting the foreign tax credit for dual capacity taxpayers (i.e., persons subject to a foreign levy who receive a specific economic benefit from the foreign country or U.S. possession) engaged in the production, refining, processing, transportation, or distribution of fossil fuels (i.e., coal, petroleum, natural gas, or fuel derivatives thereof). Such payments are not considered taxes eligible for credit if the country or possession lacks a generally applicable income tax (i.e., one substantially applied to non-dual capacity taxpayers and locals engaged in trade or business there) or if payments exceed the amount due under that tax; the rules apply to taxable years beginning after enactment, notwithstanding any U.S. treaty obligations.

This section increases the Oil Spill Liability Trust Fund financing rate to 10 cents a barrel (from 9 cents) for crude oil received or petroleum products entered after December 31, 2025. The section further revises the application of the financing rate under IRC §4611(f) to require imposition on and after April 1, 2006, or if later, 30 days after the last day of any calendar quarter for which the Secretary estimates the unobligated balance in the fund to be less than $2 billion, with both amendments effective after December 31, 2025.

This section expands the definition of crude oil under Internal Revenue Code (IRC) section 4612(a)(1)—currently used to determine taxable substances under the IRC section 4611 oil spill liability tax (i.e., $0.09 per barrel, adjusted for inflation, received at U.S. refineries or entered for consumption, use, or warehousing, to fund the Oil Spill Liability Trust Fund)—to explicitly include crude oil condensates, natural gasoline, and synthetic crude oil (i.e., bitumen and bituminous mixtures; oil derived from them, including from tar sands; liquid fuel derived from coal; and oil derived from kerogen-bearing sources, including oil shale). (1) It adds regulatory authority under new IRC section 4612(a)(10) permitting the Treasury Secretary to classify additional fuel feedstocks or finished fuel products (transported by pipeline, vessel, railcar, or tanker truck) as crude oil or petroleum products subject to the section 4611 tax if consistent with the Oil Pollution Act of 1990 definition of oil and produced in commercial quantities posing a spill risk; (2) it makes a conforming amendment to IRC section 4612(a)(2) by striking the phrase "from a well located"; and (3) the changes apply to oil and petroleum products received or entered in calendar quarters beginning more than 60 days after enactment.

This section amends IRC §162(f) to deny tax deductions for any removal costs and damages for which a taxpayer is liable under §1002 of the Oil Pollution Act of 1990 (i.e., strict liability for costs incurred by the United States, states, tribes, or others, and specified damages—including to natural resources, property, subsistence uses, revenues, profits, and public services—from oil discharged or threatening discharge into navigable waters, adjoining shorelines, or the exclusive economic zone). (Thus, responsible parties for oil spills may no longer offset such liabilities against taxable income.) The denial applies to liabilities arising in taxable years ending after enactment.

This section establishes a new 13% severance tax on the removal price of crude oil or natural gas produced from federal submerged lands on the outer Continental Shelf in the Gulf of Mexico pursuant to U.S. leases, effective for crude oil or natural gas removed after December 31, 2025. The tax, paid by the producer (i.e., holder of the economic interest), allows a credit for federal royalties paid (limited to the tax liability); the removal price is generally the sales price or, in specified cases (e.g., related-party sales, removal before sale, or on-premises refining), the constructive sales price under IRC §613; and the tax is deductible under IRC §164(a). The Secretary of the Treasury must provide for quarterly withholding and deposits, records and returns (with calendar-year taxable periods), removal price adjustments to fair market value as needed, and implementing regulations.

This section repeals the exemption from corporate income taxation for publicly traded partnerships (PTPs) with qualifying income and gains from fossil fuel activities by amending the definition of qualifying income in IRC §7704(d)(1) to insert “or any coal, petroleum, natural gas, or any derivative of coal, petroleum, or natural gas that is used for fuel” after “section 613(b)(7).” (As background, PTPs are taxed as corporations unless 90% or more of gross income is qualifying income, which currently includes—under Treasury regulations—income from production, refining, transportation, or marketing of fossil fuels; thus, PTPs exceeding the 90% threshold solely due to such income will lose pass-through status.) The amendment applies to taxable years beginning after enactment.

This section revises the amortization deduction for qualified tertiary injectant expenses (i.e., costs of substances injected to enhance recovery of oil or natural gas) to ratably over 84 months (from 36 months) beginning on the mid-point of the month paid or incurred. It further specifies that no other depreciation or amortization deduction is allowed with respect to such expenses.

This section revises the rules for amortizing development expenditures for mines or other natural deposits (other than oil or gas wells)—previously an elective deduction ratably over 24 months beginning the month after payment—to instead require a ratable deduction over 84 months beginning on the date of payment, but only for expenditures paid or incurred after disclosure of ores or minerals in commercially marketable quantities. It establishes a mid-month convention (treating expenditures as paid on the month's midpoint); makes this amortization the exclusive recovery method (precluding other depreciation or amortization); and requires amortization to continue upon property abandonment or retirement (without a separate deduction). This section also makes conforming amendments to multiple Internal Revenue Code sections (e.g., §§56, 59, 263, 263A, 291, 312, 381, 1016, and 1254) by striking cross-references to prior §616(a). The amendments apply to expenditures paid or incurred in taxable years beginning after enactment.

This section revises the treatment of certain mining exploration expenditures (i.e., costs paid or incurred to ascertain the existence, location, extent, or quality of any ore or mineral deposit before the development stage of the mine) under IRC §617 to require deduction ratably over an 84-month period beginning on the date paid or incurred (from current allowance of immediate deduction, with option to capitalize), using a mid-month convention, as the exclusive amortization method, and continuing amortization upon property abandonment without additional deduction. It makes conforming amendments to multiple IRC sections, including (1) striking prior references to §617 in the alternative minimum tax (§56(a)), environmental tax (§59(e)), charitable contribution reductions (§170(e)), capitalization rules (§263A(c)(3)), integrated oil company reductions (§291(b)), earnings and profits adjustments (§312(n)), partnership treatment (§703(b)), unrealized receivables (§751(c)), gain recognition (§1254(a)), and S corporation rules (§1363(c)); and (2) revising §291(b) to apply solely to a 30% reduction in intangible drilling cost deductions for integrated oil companies and §312(n)(2) to require 60-month amortization of such costs (other than for nonproductive wells). The amendments apply to expenditures paid or incurred in taxable years beginning after enactment.

This section revises the treatment of intangible drilling and development costs (IDCs)—i.e., certain non-salvageable costs for drilling and development—for oil and gas wells by requiring amortization ratably over 84 months beginning on the mid-point of the month paid or incurred (instead of elective immediate deduction), for costs paid or incurred in taxable years beginning after enactment. It retains elective immediate expensing for IDCs paid or incurred in connection with geothermal wells (as defined in IRC §613(e)(2)). No separate depreciation or amortization deduction is allowed for such oil and gas costs, and if related property is retired or abandoned during the 84-month period, no loss deduction is permitted at that time (with amortization continuing). Conforming amendments (1) limit alternative minimum tax adjustments under IRC §57(a)(2), elective 10-year amortization under IRC §59(e), uniform capitalization exceptions under IRC §263A(c)(3), and earnings and profits adjustments under IRC §312(n) to geothermal IDCs only; and (2) strike the integrated oil company reduction under IRC §291(b) (previously limiting such companies to 70% immediate expensing).

This section increases the excise tax rates imposed on coal to fund the Black Lung Disability Trust Fund (i.e., provides benefits to coal miners totally disabled by black lung disease)—to $1.38 per ton for underground mined coal (from $1.10) and to $0.69 per ton for surface mined coal (from $0.55)—effective on the first day of the first calendar month beginning after enactment.

This section eliminates eligibility for refined coal under the renewable electricity production credit (i.e., Section 45, which provides an inflation-adjusted tax credit of up to 2.6 cents per kilowatt-hour for electricity produced from qualified renewable sources) for coal produced after December 31, 2025, by striking the relevant definitions and provisions in subsections (b), (c), (d), and (e); making conforming amendments to the general business credit limitations in Section 38(c) and the credit for producing fuel from a nonconventional source in Section 45K(g); and revising the coordination rule in Section 45(e)(9) to exclude facilities producing electricity from gas derived from the biodegradation of municipal solid waste if eligible for the Section 45K credit.

This section establishes foreign base company oil related income as a new category of subpart F income under Section 954(a)(4) of the Internal Revenue Code for controlled foreign corporations (CFCs). (Subpart F requires U.S. shareholders of CFCs to include specified income in U.S. taxable income on a current basis to limit tax deferral.) Foreign base company oil related income generally includes foreign oil related income (as defined in Section 907(c)(2)-(3), i.e., from oil and gas extraction, processing, transportation, and distribution) other than (1) income sourced in a foreign country from oil or gas extracted there or primary products sold, used, or loaded as fuel there, or (2) foreign personal holding company income; such income is limited to CFCs that are large oil producers (i.e., related group average daily production of foreign crude oil and natural gas equals or exceeds 1,000 barrels for the taxable year or prior year, determined under pre-1980 Section 613A rules). Conforming amendments to Sections 952(c) and 954(b) include this income in specified exceptions and reductions and ensure it is not treated as another type of foreign base company income. The amendments apply to taxable years of foreign corporations beginning after enactment and U.S. shareholders' taxable years ending with or within such years.

This section repeals the exclusion of foreign oil and gas extraction income from tested income in the global intangible low-taxed income (GILTI) rules applicable to U.S. shareholders of controlled foreign corporations (CFCs). (Thus, such income is now included in the GILTI calculation, which taxes CFC income above a 10% routine return on qualified business asset investment.) The repeal applies to taxable years of foreign corporations beginning after the date of enactment and to corresponding taxable years of U.S. shareholders.

This section terminates the carbon oxide sequestration tax credit under section 45Q of the Internal Revenue Code with respect to any qualified carbon oxide captured after the date of enactment. (Thus, taxpayers may no longer claim credits—up to $60 per metric ton for secure geological storage of direct air capture, $50 per metric ton for other secure geological storage, $35 per metric ton for enhanced oil recovery, or $36 per metric ton for direct air capture enhanced oil recovery—for post-enactment captures.) The section also requires the Secretary of the Treasury to submit a public report to Congress within six months of enactment identifying each taxpayer that claimed the credit since its enactment, the total credit amount allowed to each, and a breakdown of those amounts by (1) secure geological storage (not for enhanced oil recovery or other utilization), (2) use as a tertiary injectant in qualified enhanced oil or natural gas recovery with secure geological storage, or (3) other utilization under section 45Q(f)(5); and authorizes disclosure of taxpayer return information for this purpose notwithstanding section 6103 confidentiality rules.

This section prohibits any refund as substitution drawback (19 U.S.C. 1313(j)) of taxes imposed under section 4611 of the Internal Revenue Code (i.e., taxes on crude oil received at U.S. refineries and imported petroleum products to fund the Oil Spill Liability Trust Fund). The prohibition applies to articles entered, or withdrawn from warehouse for consumption, on or after January 1, 2026.

This section modifies the clean hydrogen production tax credit under IRC §45V for facilities placed in service after December 31, 2025, by (1) setting the credit amount at $0.60 per kilogram of qualified clean hydrogen (from up to $3.00 based on lifecycle greenhouse gas emissions rate), subject to annual inflation adjustment; (2) redefining qualified clean hydrogen as hydrogen produced through an electrolyzer powered by electricity generated from qualified renewable energy resources (i.e., wind, solar, geothermal as defined in IRC §45(c)(4), marine and hydrokinetic renewable energy as defined in IRC §45(c)(10), or hydropower) at a facility placed in service no more than 36 months before the hydrogen facility, located in the same region per DOE's National Transmission Needs Study (October 30, 2023), and produced at least one hour prior to electrolyzer use; (3) eliminating the prior lifecycle greenhouse gas emissions threshold of not more than 4 kilograms of CO2 equivalent per kilogram of hydrogen; and (4) striking regulatory authority for determining lifecycle greenhouse gas emissions. (As background, the §45V credit incentivizes domestic production of low-emission hydrogen for use in industry, transportation, and power to reduce emissions in sectors difficult to electrify.) The section makes conforming amendments to related provisions, including (1) increasing the energy percentage for the §48 clean hydrogen investment tax credit to 6 percent, (2) extending certain eligibility and elective payment (§6417) dates to December 31, 2025 (from December 31, 2022, or earlier), and (3) updating cross-references to the revised definitions.

This section revises the definition of "lead agency" in the Department of Commerce enhanced hiring and contracting authorities (15 U.S.C. 4659(c)(1)) to mean, with respect to a covered activity, the Federal agency that proposed the covered activity (from the meaning given the term in section 111 of NEPA (42 U.S.C. 4336e)).

This section repeals (1) section 50264 of the Inflation Reduction Act of 2022, which required oil and gas lease sales under the 2017-2022 Outer Continental Shelf leasing program; and (2) section 50265 of such Act (43 U.S.C. 3006), which for the 10-year period beginning August 16, 2022, prohibited issuance of rights-of-way for wind or solar energy development on federal lands or offshore wind leases unless specified onshore and offshore oil and gas lease sales were held (i.e., at least 2 million acres or 50% of expressed interest onshore, and 60 million acres offshore, within specified recent periods). (Thus, the Department of the Interior may issue such rights-of-way and leases without regard to oil and gas leasing activity.)

This section (1) modifies the advanced manufacturing production credit under IRC §45X by striking the special 2.5 percent rate for metallurgical coal, removing its exclusion from phaseout provisions, and making conforming changes; (2) repeals amendments made by section 70523 of Public Law 119-21 to intangible drilling and development costs (thus restoring prior law allowing immediate expensing of such costs by oil and gas producers); (3) amends IRC §7704(d)(1)(E) to limit qualifying income from hydrogen for publicly traded partnerships to qualified clean hydrogen (as defined in §45V(c)(1)(A)) and strikes clause (iii); (4) repeals oil and gas, mining, and energy provisions enacted by sections 50101 through 50105, 50201 through 50204, and 50403 of Public Law 119-21 (thus rescinding $850 million appropriated for FY2022 for EPA methane mitigation, monitoring, and emissions reduction grants and activities at applicable facilities, and $700 million for marginal conventional wells—both available until September 30, 2028); (5) accelerates the Clean Air Act waste emissions charge on excess methane emissions to calendar year 2024 (from 2034); and (6) repeals NEPA §112, which authorized project sponsor opt-in fees to expedite environmental reviews.

This section repeals Public Law 119-2, thereby reinstating the EPA rule establishing procedures for compliance with the waste emissions charge for petroleum and natural gas systems, including netting and exemptions (89 Fed. Reg. 91094 (Nov. 18, 2024)). (Thus, the rule takes effect as if never disapproved.)

This section defines a "subsidy for fossil-fuel production" to include direct funding, tax treatments or incentives, risk-reduction benefits, financing assistance or guarantees, royalty relief, or other financial benefits to fossil-fuel companies for producing fossil fuels. This section directs the Secretary of the Treasury, in coordination with the Secretary of Energy, to submit to Congress within one year of enactment a report identifying each federal law (excluding those amended by this Act) that provides such a subsidy. This section further directs the Secretary of the Treasury, in coordination with the Commissioner of Internal Revenue, to submit to Congress within one year of enactment a report assessing whether the recovery period under the Internal Revenue Code's accelerated cost recovery system (section 168, i.e., Modified Accelerated Cost Recovery System or MACRS) for fossil-fuel production property—including pipelines, power generation property, refineries, and drilling equipment—constitutes such a subsidy. If the Secretary determines that any such property receives a subsidy, this section eliminates MACRS for that property placed in service in taxable years beginning after the determination date, provided the determination is published before the first day of the taxable year. (Thus, affected property would be eligible only for straight-line depreciation over a longer period.)