Aviation gasoline production credit

(a)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

45BB.

Aviation gasoline production credit

(a)

Amount of credit

(1)

In general

For purposes of section 38, the aviation gasoline production credit determined under this section for the taxable year is an amount equal to the product of—(A)the number of gallons of qualified aviation gasoline produced by the taxpayer and sold by the taxpayer in the manner described in paragraph (5) during the taxable year, multiplied by(B)the applicable amount with respect to such gasoline.(2)

Applicable amount

The applicable amount under this paragraph is equal to—(A)in the case of qualified aviation gasoline sold during calendar year 2026, $1.25,(B)in the case of qualified aviation gasoline sold during calendar year 2027, $1.20,(C)in the case of qualified aviation gasoline sold during calendar year 2028, $1.15,(D)in the case of qualified aviation gasoline sold during calendar year 2029, $1.10, and (E)in the case of qualified aviation gasoline sold during calendar year 2030, $1.05.(3)

Qualified aviation gasoline

For purposes of this section, the term qualified aviation gasoline means aviation gasoline—(A)which is—(i)defined in section 436.101 of title 10, Code of Federal Regulations, (ii)free from tetra-ethyl-lead, and(iii)produced by the taxpayer in the United States, (B)which meets the requirements of any aviation fuel standards promulgated pursuant to section 44714 of title 49, United States Code, and(C)the transfer of which to the fuel tank of an aircraft occurs in the United States.(4)

Sale

For purposes of paragraph (1), the qualified aviation gasoline is sold in a manner described in this paragraph if such gasoline is sold by the taxpayer to an unrelated person—(A)for use by such person in a trade or business, or (B)who sells such fuel at retail to another person and places such fuel in the fuel tank of such other person.(b)

Registration of qualified aviation gasoline producers

No credit shall be allowed under this section with respect to any aviation gasoline unless the producer of such fuel—(1)is registered with the Secretary under section 4101, and (2)provides certification (in such form or manner as the Secretary shall prescribe after consultation with the Secretary of Transportation) demonstrating that such gasoline is qualified aviation gasoline.(c)

Regulations and guidance

Not later than 180 days after the date of the enactment of this section, the Secretary shall, after consultation with the Secretary of Transportation, prescribe such regulations and guidance as are necessary to carry out the purposes of this section. (d)

Termination

This section shall not apply to any sale after December 31, 2030.

(b)

Credit made 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 inserting after paragraph (41) the following new paragraph:

(42)the aviation gasoline production credit determined under section 45BB.

(c)

Certification of producers

Section 4101(a)(1) of such Code is amended by striking and every person producing second generation biofuel (as defined in section 40(b)(6)(E)) and inserting every person producing second generation biofuel (as defined in section 40(b)(6)(E)), and every person producing qualified aviation gasoline (as defined in section 45BB(a)(4)).(d)

Qualified aviation gasoline taxed as aviation gasoline

Section 4081(a)(2)(A)(ii) of such Code is amended by inserting (including qualified aviation gasoline as defined in section 45BB(a)(4)) after aviation gasoline. (e)

Clerical amendment

The table of sections for subpart D 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. Aviation gasoline credit.

(f)

Effective date

The amendments made by this section shall apply to fuel sold or used after December 31, 2025.

GAO Study

(a)

Study

The Comptroller General of the United States shall carry out a study relating to the price of unleaded aviation gas, including—(1)the price differential of leaded aviation gas at the consumer point of sale as compared with unleaded aviation gas, including unleaded aviation gas at different octane levels,(2)the major drivers of the price differential between leaded and unleaded gas, including research and development, refining, transportation and delivery and storage,(3)whether the aviation gasoline credit under section 45BB of the Internal Revenue Code of 1986 (as added by section 1) results in cost savings that are passed along to the end-user consumer,(4)recommendations, if any, for changes to such credit to ensure the highest amount of cost savings is passed along to the end-user consumer, and(5)the amount and percentage of unleaded aviation gas in the overall aviation gas market and future market projections for such amount and percentage.(b)

Report

Not later than one year after the date of the enactment of this Act, the Comptroller General of the United States shall issue a report to Congress describing the findings and determinations made in carrying out the study required under subsection (a).