Bill Details
View committees (1)
AI Summary This summary was generated by AI from the bill text. AI can get information wrong.
This bill would let companies immediately deduct the full cost of certain equipment used to capture natural gas that would otherwise be burned off or released into the air. The goal is to reduce waste and lower emissions by encouraging the gas to be collected and turned into useful products instead of being flared or vented. The tax break would apply permanently, starting for property put into service after December 31, 2025, and it would not apply to equipment placed in service by a foreign entity of concern.
The bill changes the tax code to allow 100% upfront expensing for this type of equipment, instead of spreading the deduction over time.
The equipment must be a system that takes in natural gas and captures methane and other heavier hydrocarbons.
Covered uses include making fuel, sending gas to a processing plant, producing petrochemicals or fertilizer, making liquid fuels, generating electricity, supplying power to the grid, supporting computing power, digital asset mining, or powering other oilfield equipment.
The new tax rule would begin for property placed in service after December 31, 2025, and would not cover property from a foreign entity of concern.
Official Summaries
No summaries available
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1188 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 1188
To amend the Internal Revenue Code of 1986 to provide for permanent
full expensing for property used to capture gas that would otherwise be
flared or vented and to use such gas in value-added products.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 27, 2025
Mr. Cruz introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide for permanent
full expensing for property used to capture gas that would otherwise be
flared or vented and to use such gas in value-added products.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Facilitating Lower Atmospheric
Released Emissions Act'' or the ``FLARE Act''.
SEC. 2. PERMANENT FULL EXPENSING OF COSTS RELATED TO FLARING AND
VENTING MITIGATION SYSTEMS.
(a) In General.--Section 168(k) of the Internal Revenue Code of
1986 is amended by adding at the end the following new paragraph:
``(11) Permanent expensing of costs related to flaring and
venting mitigation systems.--
``(A) In general.--In the case of any applicable
energy property--
``(i) paragraph (8) shall not apply, and
``(ii) the applicable percentage shall be
100 percent.
``(B) Applicable energy property.--
``(i) In general.--For purposes of this
paragraph, the term `applicable energy
property' means any qualified property (as
determined as if clause (iii) of paragraph
(2)(A) did not apply with respect to such
property) which is a flaring and venting
mitigation system.
``(ii) Flaring and venting mitigation
system.--For purposes of this subparagraph, the
term `flaring and venting mitigation system'
means a system which--
``(I) intakes natural gas, and
``(II) separates, collects,
utilizes, or combusts methane and
heavier hydrocarbons by--
``(aa) compressing or
liquefying gas for use as fuel
or transport to a processing
facility,
``(bb) production of
petrochemicals or fertilizer,
``(cc) conversion to liquid
fuels,
``(dd) conversion to
electricity for electricity-
driven activities or supply to
the electrical grid,
``(ee) conversion to
computational power,
``(ff) mining for digital
assets, or
``(gg) powering other
oilfield equipment.
``(C) Foreign entity of concern.--
``(i) In general.--This paragraph shall not
apply to any property placed in service by any
foreign entity of concern.
``(ii) Definition.--In this paragraph, the
term `foreign entity of concern' has the
meaning given that term in section 10612(a) of
the Research and Development, Competition, and
Innovation Act (42 U.S.C. 19221(a)).''.
(b) Conforming Amendment.--Section 168(k)(6)(A) of the Internal
Revenue Code of 1986 is amended by inserting ``or paragraph (11)''
after ``this paragraph''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2025.
<all>