Official Summaries

Restoring Fuel Market Freedom Act of 2025

This bill repeals multiple fuel-related federal tax credits and the credit or refund of federal fuel excise taxes paid on certain fuels used for nontaxable purposes.

Specifically, the bill repeals the

• business tax credit for clean fuel production (tax credit for the production of clean fuels produced after 2024 and sold before 2028);
• business tax credit for second-generation biofuel producers (tax credit for the production before 2025 of fuel derived from qualified feedstocks that meets certain other requirements);
• business tax credit for biodiesel fuels (tax credit for biodiesel fuel sold or used before 2025);
• business tax credit for sustainable aviation fuel (tax credit for sustainable aviation fuel sold or used before 2025); and
• tax credit for alcohol fuel, biodiesel, and alternative fuel mixtures (tax credit for alcohol fuel, biodiesel, and alternative fuel mixtures sold or used before 2025).

Finally, the bill repeals expired provisions that allow a credit or refund of excise taxes paid on alcohol, biodiesel, alternative fuel, or sustainable aviation fuel that is used for nontaxable purposes.

Current Full Text

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 311 Introduced in House (IH)]

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119th CONGRESS
  1st Session
                                H. R. 311

To amend the Internal Revenue Code of 1986 to repeal the alcohol fuels 
   credit, the biodiesels fuel credit, the sustainable aviation fuel 
credit, the clean fuel production credit, the alcohol fuel, biodiesel, 
  and alternative fuel mixtures credit, and other related provisions.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 9, 2025

  Mr. Perry (for himself, Mr. Ogles, and Mr. Burlison) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to repeal the alcohol fuels 
   credit, the biodiesels fuel credit, the sustainable aviation fuel 
credit, the clean fuel production credit, the alcohol fuel, biodiesel, 
  and alternative fuel mixtures credit, and other related provisions.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; REFERENCES.

    (a) Short Title.--This Act may be cited as the ``Restoring Fuel 
Market Freedom Act of 2025''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.

SEC. 2. REPEAL OF ALCOHOL FUELS CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of subtitle A is amended by repealing section 40 (and by striking the 
item relating to such section in the table of sections for such 
subpart).
    (b) Conforming Amendments.--
            (1) Section 25C(d)(3)(B) is amended by inserting ``, as in 
        effect on the day before the date of the enactment of the 
        Restoring Fuel Market Freedom Act of 2025'' after ``section 
        40''.
            (2) Section 38(b) is amended by striking paragraph (3).
            (3) Section 40A is amended--
                    (A) in subsection (d)(1),by striking ``40 or'' in 
                the matter following subparagraph (B), and
                    (B) in subsection (f)(3), by striking ``may be 
                determined under section 40'' and inserting ``was 
                allowable on the day before date of the enactment of 
                the Restoring Fuel Market Freedom Act of 2025 under 
                section 40''.
            (4) Section 87 is amended by striking paragraph (1).
            (5) Section 168(l)(2)(A) is amended by inserting ``as in 
        effect on the day before the date of the enactment of the 
        Restoring Fuel Market Freedom Act of 2025'' after ``section 
        40(b)(6)(E)''.
            (6) Section 196(c) is amended by striking paragraph (3).
            (7) Section 4101(a)(1) is amended by striking ``every 
        person producing or importing sustainable aviation fuel (as 
        defined in section 40B), and every person producing second 
        generation biofuel (as defined in section 40(b)(6)(E))'' and 
        inserting ``and every person producing or importing sustainable 
        aviation fuel (as defined in section 40B)''.
            (8) Section 4104(a)(1) is amended by striking ``, 40,''.
            (9) Section 6426 is amended--
                    (A) in subsection (b)(2)(C), by striking 
                ``described in section 40(h)(3)(B)'' and all that 
                follows through ``2007,'' and inserting ``, in 
                consultation with the Administrator of the 
                Environmental Protection Agency, that, with respect to 
                any taxable year, that an amount less than 
                7,500,000,000 gallons of ethanol (including cellulosic 
                ethanol) has been produced in or imported into the 
                United States in all preceding calendar years beginning 
                after 2007,'',
                    (B) in subsection (g), by inserting ``as in effect 
                on the day before the date of the enactment of the 
                Restoring Fuel Market Freedom Act of 2025'' after 
                ``section 40(c)'', and
                    (C) in subsection (h), by striking ``section 40, 
                40A,'' and inserting ``section 40A''.
    (c) Effective Date.--The amendments made by this section shall 
apply to fuels produced after the date of the enactment of this 
section.

SEC. 3. REPEAL OF BIODIESELS FUEL CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of subtitle A is amended by repealing section 40A (and by striking the 
item relating to such section in the table of sections for such 
subpart).
    (b) Conforming Amendments.--
            (1) Section 25C(d)(3)(A) is further amended by inserting 
        ``, as in effect on the day before the date of the enactment of 
        the Restoring Fuel Market Freedom Act of 2025'' after ``section 
        40A''.
            (2) Section 30C(C)(1)(B)(ii)(I) is amended by inserting 
        ``(as in effect on the day before the date of the enactment of 
        the Restoring Fuel Market Freedom Act of 2025)'' after 
        ``section 40A(d)(1)''.
            (3) Section 38(b) is further amended by striking paragraph 
        (17).
            (4) Section 87 (as amended by section 2) is amended to read 
        as follows:

``SEC. 87. ALCOHOL AND BIODIESEL FUELS CREDITS.

    ``Gross income includes the sustainable aviation fuel credit 
determined with respect to the taxpayer for the taxable year under 
section 40B(a).''.
            (5) Section 196(c) is further amended by striking paragraph 
        (11).
            (6) Section 4101(a)(1) is further amended by striking ``, 
        every person producing or importing biodiesel (as defined in 
        section 40A(d)(1))''.
            (7) Section 4104(a)(1) is further amended--
                    (A) by striking ``sections'' and inserting 
                ``section'', and
                    (B) by striking ``and 40A,''.
            (8) Section 6426 is further amended--
                    (A) in subsection (c)(5), by striking ``also used 
                in section 40A shall have the meaning given such term 
                by section 40A'' and inserting ``also used in section 
                40A (as in effect on the day before the date of the 
                enactment of the Restoring Fuel Market Freedom Act of 
                2025) shall have the meaning given such term by such 
                section (as in effect on such date)'', and
                    (B) in subsection (h), by striking ``40A or''.
            (9) Section 7704(d)(1)(E) is amended by inserting ``, as in 
        effect on the day before the date of the enactment of the 
        Restoring Fuel Market Freedom Act of 2025'' after 
        ``40A(d)(1)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to fuels sold or used after the date of the enactment of this 
section.

SEC. 4. REPEAL OF SUSTAINABLE AVIATION FUEL CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of subtitle A is amended by repealing section 40B (and by striking the 
item relating to such section in the table of sections for such 
subpart.
    (b) Conforming Amendments.--
            (1) Section 38(b) is further amended by striking paragraph 
        (35).
            (2) Part II of subchapter B of chapter 1 of subtitle A is 
        amended by repealing section 87 (and by striking the item 
        relating to such section in the table of sections for such 
        part).
            (3) Section 56(a) is amended by striking paragraph (7).
            (4) Section 4101(a)(1) is further amended by striking ``, 
        every person producing or importing sustainable aviation fuel 
        (as defined in section 40B)''.
            (5) Section 6426 is further amended--
                    (A) by striking subsection (h), and
                    (B) in subsection (k), by adding at the end the 
                following new paragraph:
            ``(4) References to section 40b.--Each reference in this 
        subsection to section 40B shall be treated as a reference to 
        such section as such section was in effect on the day before 
        the date of the enactment of the Restoring Fuel Market Freedom 
        Act of 2025.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to fuel sold or used after the date of the enactment of this 
section.

SEC. 5. REPEAL OF CLEAN FUEL PRODUCTION CREDIT.

    (a) In General.--Subpart Do f part IV of subchapter A of chapter 1 
of subtitle A is amended by repealing section 45Z (and by striking the 
item relating to such section in the table of sections for such 
subpart).
    (b) Conforming Amendments.--
            (1) Section 6417(b) is amended by striking paragraph (9).
            (2) Section 6418(f)(1)(A) is amended by striking clause 
        (viii).
            (3) Section 13704 of Public Law 117-169 is amended by 
        striking subsection (b).
    (c) Effective Date.--The amendments made by this section shall 
apply to transportation fuels produced after the date of the enactment 
of this section.

SEC. 6. REPEAL OF ALCOHOL FUEL, BIODIESEL, AND ALTERNATIVE FUEL 
              MIXTURES CREDIT.

    (a) In General.--Subchapter B of chapter 65 of subtitle F is 
amended by repealing section 6426 (and by striking the item relating to 
such section in the table of sections for such subchapter).
    (b) Conforming Amendments.--
            (1) Section 4101(a)(1) is further amended by striking ``or 
        alcohol (as defined in section 6426(b)(4)(A))''.
            (2) Section 4104(a)(2) is further amended by striking ``, 
        6426,''.
            (3) Section 6427 is further amended
            (4) Section 7704(d)(1)(E), as amended by section 4(b)(7), 
        is further amended by inserting ``such sections were'' after 
        ``, as''.
            (5) Section 9503(b)(1) is amended by striking ``credits 
        under section 6426''.
    (c) Clerical Amendment.--The table of sections for subchapter B of 
chapter 65 of subtitle F is amended by striking the item relating to 
section 6426.
    (d) Effective Date.--The amendments made by this section shall 
apply to fuel used or sold after the date of the enactment of this 
section.

SEC. 7. REPEAL OF EXPIRED PROVISIONS RELATING TO PAYMENTS FOR CERTAIN 
              FUELS NOT USED FOR TAXABLE PURPOSES.

    (a) In General.--Section 6427 is amended by striking subsection 
(e).
    (b) Conforming Amendments.--
            (1) Section 40A(c) is amended by striking ``or 6427(e)''.
            (2) Section 40B(g) is amended by striking ``or 6427(e)''.
            (3) Section 4104(a)(2) is further amended by striking 
        ``4041(b)(2), 6426, or 6427(e)'' and inserting ``4041(b)(2) or 
        6426''.
            (4) Section 6427(i) is amended by striking paragraph (3).
    (c) Effective Date.--The amendments made by this section shall 
apply to fuel sold or used after the date of the enactment of this 
section.
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