119 S2444 IS: End Polluter Welfare Act of 2025
U.S. Senate
2025-07-24
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
II
119th CONGRESS
1st Session
S. 2444
IN THE SENATE OF THE UNITED STATES
July 24, 2025
Mr. Sanders (for himself, Ms. Warren, Mr. Merkley, Mr. Welch, Mr. Van Hollen, Mr. Markey, and Mr. Booker) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To eliminate certain subsidies for fossil-fuel production.
1.

Short title
This Act may be cited as the “End Polluter Welfare Act of 2025”.
2.

Table of contents
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I—Elimination of fossil fuel subsidies
Sec. 101. Definition of fossil fuel.
Sec. 102. Royalty relief.
Sec. 103. Royalties under Mineral Leasing Act.
Sec. 104. Offshore oil and gas royalty rate.
Sec. 105. Elimination of interest payments for royalty overpayments.
Sec. 106. Removal of limits on liability for offshore facilities and pipeline operators.
Sec. 107. Restrictions on use of appropriated funds by international financial institutions for projects that support fossil fuel.
Sec. 108. Office of Fossil Energy and Carbon Management.
Sec. 109. Loan Programs Office of the Department of Energy.
Sec. 110. USDA assistance for carbon capture and storage systems.
Sec. 111. Advanced Research Projects Agency—Energy.
Sec. 112. Incentives for innovative technologies.
Sec. 113. Rural Utility Service loan guarantees.
Sec. 114. Prohibition on use of funds by the United States International Development Finance Corporation or the Export-Import Bank of the United States for financing projects, transactions, or other activities that support fossil fuel.
Sec. 115. Transportation funds for grants, loans, loan guarantees, and other direct assistance.
Sec. 116. Elimination of exclusion of certain lenders as owners or operators under CERCLA.
TITLE II—Amendments to Internal Revenue Code of 1986
Sec. 201. Termination of various tax expenditures relating to fossil fuels.
Sec. 202. Termination of certain deductions and credits related to fossil fuels.
Sec. 203. Uniform seven-year amortization for geological and geophysical expenditures.
Sec. 204. Natural gas gathering lines treated as 15-year property.
Sec. 205. Termination of last-in, first-out method of inventory for oil, natural gas, and coal companies.
Sec. 206. Repeal of percentage depletion for coal and hard mineral fossil fuels.
Sec. 207. Termination of capital gains treatment for royalties from coal.
Sec. 208. Modifications of foreign tax credit rules applicable to oil and gas industry taxpayers receiving specific economic benefits.
Sec. 209. Increase in oil spill liability trust fund financing rate.
Sec. 210. Application of certain environmental taxes to synthetic crude oil.
Sec. 211. Denial of deduction for removal costs and damages for certain oil spills.
Sec. 212. Tax on crude oil and natural gas produced from the outer Continental Shelf in the Gulf of Mexico.
Sec. 213. Repeal of corporate income tax exemption for publicly traded partnerships with qualifying income and gains from activities relating to fossil fuels.
Sec. 214. Amortization of qualified tertiary injectant expenses.
Sec. 215. Amortization of development expenditures.
Sec. 216. Amortization of certain mining exploration expenditures.
Sec. 217. Amortization of intangible drilling and development costs in the case of oil and gas wells.
Sec. 218. Increase in excise tax rate for funding of Black Lung Disability Trust Fund.
Sec. 219. Elimination of renewable electricity production credit eligibility for refined coal.
Sec. 220. Treatment of foreign oil related income as subpart F income.
Sec. 221. Repeal of exclusion of foreign oil and gas extraction income from the determination of tested income.
Sec. 222. Termination of credit for carbon oxide sequestration.
Sec. 223. Eliminate drawbacks on petroleum taxes.
Sec. 224. Modifying clean hydrogen production credit.
TITLE III—Repeal recent fossil fuel subsidy legislation
Sec. 301. BUILDER Act.
Sec. 302. Inflation Reduction Act.
Sec. 303. One Big Beautiful Bill Act.
Sec. 304. Waste emissions charge rule.
TITLE IV—Elimination of other fossil fuel subsidies
Sec. 401. Study and elimination of additional fossil fuel subsidies.
I

Elimination of fossil fuel subsidies
101.

Definition of fossil fuel
In this Act, the term fossil fuel means coal, petroleum, natural gas, or any derivative of coal, petroleum, or natural gas that is used for fuel.
102.

Royalty relief
(a)

In general
(1)

Outer Continental Shelf Lands Act
Section 8(a)(3) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)) is amended—
(A)
by striking subparagraph (B); and
(B)
by redesignating subparagraph (C) as subparagraph (B).
(2)

Energy Policy Act of 2005
(A)

Incentives for natural gas production from deep wells in the shallow waters of the Gulf of Mexico
Section 344 of the Energy Policy Act of 2005 (42 U.S.C. 15904) is repealed.
(B)

Deep water production
Section 345 of the Energy Policy Act of 2005 (42 U.S.C. 15905) is repealed.
(3)

Clerical amendment
The table of contents in section 1(b) of the Energy Policy Act of 2005 (Public Law 109–58; 119 Stat. 596) is amended by striking the items relating to sections 344 and 345.
(b)

Future provisions
Notwithstanding any other provision of law, royalty relief shall not be permitted under a lease issued under section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 1337).
103.

Royalties under Mineral Leasing Act
(a)

Coal leases
Section 7(a) of the Mineral Leasing Act (30 U.S.C. 207(a)) is amended in the fourth sentence by striking “121/2 per centum” and inserting “183/4 percent”.
(b)

Leases on land on which oil or natural gas is discovered
Section 14 of the Mineral Leasing Act (30 U.S.C. 223) is amended in the fourth sentence by striking “121/2 per centum” and inserting “183/4 percent”.
(c)

Leases on land known or believed To contain oil or natural gas
Section 17 of the Mineral Leasing Act (30 U.S.C. 226) is amended—
(1)
in subsection (b)—
(A)
in paragraph (1)(A), in the fifth sentence, by striking “162/3 percent” each place it appears and inserting “183/4 percent”; and
(B)
in paragraph (2)(A)(ii), by striking “162/3 per centum” and inserting “not less than 183/4 percent”;
(2)
in subsection (l), by striking “162/3 per centum” each place it appears and inserting “183/4 percent”; and
(3)
in subsection (n)(1)(C), by striking “162/3 per centum” and inserting “not less than 183/4 percent”.
104.

Offshore oil and gas royalty rate
Section 8(a)(1) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(1)) is amended by striking “162/3 percent, but not more than 183/4 percent, during the 10-year period beginning on the date of enactment of the Act titled “An Act to provide for reconciliation pursuant to title II of S. Con. Res. 14”, and not less than 162/3 percent thereafter,” each place it appears and inserting “183/4 percent,”.
105.

Elimination of interest payments for royalty overpayments
Section 111 of the Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1721) is amended by adding at the end the following:
“(k)

Payment of interest
Interest shall not be paid on any overpayment.”.
106.

Removal of limits on liability for offshore facilities and pipeline operators
Section 1004(a) of the Oil Pollution Act of 1990 (33 U.S.C. 2704(a)) is amended—
(1)
in paragraph (3), by striking “plus $75,000,000; and” and inserting “and the liability of the responsible party under section 1002;”;
(2)
in paragraph (4)—
(A)
by inserting “(except an onshore pipeline transporting diluted bitumen, bituminous mixtures, or any oil manufactured from bitumen)” after “for any onshore facility”; and
(B)
by striking the period at the end and inserting “; and”; and
(3)
by adding at the end the following:
“(5)
for any onshore facility transporting diluted bitumen, bituminous mixtures, or any oil manufactured from bitumen, the liability of the responsible party under section 1002.”.
107.

Restrictions on use of appropriated funds by international financial institutions for projects that support fossil fuel
(a)

Definition of international financial institution
In this section, the term international financial institution means—
(1)
each institution described in section 1701(c) of the International Financial Institutions Act (22 U.S.C. 262r(c)); and
(2)
the North American Development Bank.
(b)

Rescission of unobligated funds
(1)

In general
Of the unobligated balance of amounts appropriated or otherwise made available for a contribution of the United States to an international financial institution, an amount specified in paragraph (2) shall be rescinded if the institution provides support for a project that supports the production or use of fossil fuels.
(2)

Amount specified
The amount specified in this paragraph is an amount the Secretary of the Treasury determines to be equivalent to the amount of support provided by an international financial institution described in paragraph (1) for a project that supports the production or use of fossil fuels.
(c)

Prohibition on use of future funds
No amounts appropriated or otherwise made available for a contribution of the United States to an international financial institution may be provided to the institution unless the institution agrees to not use the amount to provide support for any project that supports the production or use of fossil fuels.
108.

Office of Fossil Energy and Carbon Management
(a)

Termination of authority
Notwithstanding any other provision of law, the authority of the Secretary of Energy to carry out the Office of Fossil Energy and Carbon Management of the Department of Energy is terminated.
(b)

Rescission
Notwithstanding any other provision of law—
(1)
all amounts made available for the Office of Fossil Energy and Carbon Management that remain unobligated as of the date of enactment of this Act are rescinded; and
(2)
no amounts made available after the date of enactment of this Act for the Office of Fossil Energy and Carbon Management shall be expended, other than such amounts as are necessary to cover costs incurred in terminating ongoing research of the Office of Fossil Energy and Carbon Management, as determined by the Secretary of Energy, in consultation with other appropriate Federal agencies.
109.

Loan Programs Office of the Department of Energy
(a)

Prohibition
Subject to subsection (b), none of the funds made available to the Loan Programs Office of the Department of Energy shall be used to carry out any project that supports fossil fuel, carbon capture, or hydrogen.
(b)

Exception
The prohibition on the use of funds for hydrogen projects under subsection (a) does not apply to projects that support qualified clean hydrogen (as defined in section 45V(c) of the Internal Revenue Code of 1986 (as amended by section 224(a)(3))).
110.

USDA assistance for carbon capture and storage systems
Section 9003(j)(1) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8103(j)(1)) is amended—
(1)
by inserting “and” after “renewable energy systems,”; and
(2)
by striking “and carbon capture and storage systems,”.
111.

Advanced Research Projects Agency—Energy
None of the funds made available to the Advanced Research Projects Agency—Energy shall be used to carry out any project that supports fossil fuel.
112.

Incentives for innovative technologies
(a)

In general
Section 1703 of the Energy Policy Act of 2005 (42 U.S.C. 16513) is amended—
(1)
in subsection (b)—
(A)
by striking paragraphs (2) and (10); and
(B)
by redesignating paragraphs (3), (4), (5), (6), (7), (8), (9), (11), (12), and (13) as paragraphs (2), (3), (4), (5), (6), (7), (8), (9), (10), and (11) respectively;
(2)
by striking subsection (c); and
(3)
by redesignating subsections (d) through (f) as subsections (c) through (e), respectively.
(b)

Conforming amendment
Section 1704 of the Energy Policy Act of 2005 (42 U.S.C. 16514) is amended—
(1)
by striking subsection (b); and
(2)
by redesignating subsection (c) as subsection (b).
113.

Rural Utility Service loan guarantees
Notwithstanding any other provision of law, the Secretary of Agriculture may not make a loan under title III of the Rural Electrification Act of 1936 (7 U.S.C. 931 et seq.) to an applicant for the purpose of carrying out any project that will use fossil fuel.
114.

Prohibition on use of funds by the United States International Development Finance Corporation or the Export-Import Bank of the United States for financing projects, transactions, or other activities that support fossil fuel
Notwithstanding any other provision of law, no amounts appropriated or otherwise made available for the United States International Development Finance Corporation, the Export-Import Bank of the United States, the United States Trade and Development Agency, the United States Agency for International Development, or the Millennium Challenge Corporation that are available for obligation on or after the date of enactment of this Act may be obligated or expended to support any project, transaction, or other activity that supports the production or use of fossil fuels.
115.

Transportation funds for grants, loans, loan guarantees, and other direct assistance
Notwithstanding any other provision of law, any amounts made available to the Department of Transportation (including the Federal Railroad Administration) may not be used to award any grant, loan, loan guarantee, or provide any other direct assistance to any rail facility or port project that transports fossil fuel.
116.

Elimination of exclusion of certain lenders as owners or operators under CERCLA
Section 101(20)(F) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601(20)(F)) is amended by adding at the end the following:
“(iii)

Ineligible lenders
The exclusions under clauses (i) and (ii) shall not apply to a person that is a lender that is—
(I)
an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.), an investment adviser (as defined in section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a))), or a broker or dealer (as those terms are defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))) with $250,000,000,000 or more in assets under management; or
(II)
a bank holding company (as defined in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841)) with $10,000,000,000 or more in total consolidated assets.”.
II

Amendments to Internal Revenue Code of 1986
201.

Termination of various tax expenditures relating to fossil fuels
(a)

In general
Subchapter C of chapter 80 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
“7875.

Termination of certain provisions relating to fossil-fuel incentives
(a)

In general
The following provisions shall not apply to taxable years beginning after the date of the enactment of the End Polluter Welfare Act of 2025:
(1)
Section 43 (relating to enhanced oil recovery credit).
(2)
Section 45I (relating to credit for producing oil and natural gas from marginal wells).
(3)
Section 461(i)(2) (relating to special rule for spudding of oil or natural gas wells).
(4)
Section 469(c)(3)(A) (relating to working interests in oil and natural gas property).
(5)
Section 613A (relating to limitations on percentage depletion in case of oil and natural gas wells).
(b)

Provisions relating to property
The following provisions shall not apply to property placed in service after the date of the enactment of the End Polluter Welfare Act of 2025:
(1)
Section 168(e)(3)(C)(iii) (relating to classification of certain property).
(2)
Section 169 (relating to amortization of pollution control facilities) with respect to any atmospheric pollution control facility.
(c)

Provisions relating to costs and expenses
The following provisions shall not apply to costs or expenses paid or incurred after the date of the enactment of the End Polluter Welfare Act of 2025:
(1)
Section 179B (relating to deduction for capital costs incurred in complying with Environmental Protection Agency sulfur regulations).
(2)
Section 468 (relating to special rules for mining and solid waste reclamation and closing costs).
(d)

Allocated credits
No new credits shall be certified under section 48A (relating to qualifying advanced coal project credit) after the date of the enactment of the End Polluter Welfare Act of 2025.
(e)

Arbitrage bonds
Section 148(b)(4) (relating to safe harbor for prepaid natural gas) shall not apply to obligations issued after the date of the enactment of the End Polluter Welfare Act of 2025.”.
(b)

Conforming amendments
(1)
Section 613(d) of the Internal Revenue Code of 1986 is amended by striking “Except as provided in section 613A, in the case” and inserting “In the case”.
(2)
The table of sections for subchapter C of chapter 90 of such Code is amended by adding at the end the following new item:
“Sec. 7875. Termination of certain provisions relating to fossil-fuel incentives.”.
202.

Termination of certain deductions and credits related to fossil fuels
(a)

Special allowance for certain property
Section 168(k) of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(11)

Fossil fuel property
(A)

In general
This subsection shall not apply with respect to any property which is primarily used for fossil fuel activities and is placed in service during any taxable year beginning after the date of the enactment of the End Polluter Welfare Act of 2025.
(B)

Fossil fuel activities
For purposes of this paragraph, the term fossil fuel activities means the exploration, development, mining or production, processing, refining, transportation (including pipelines transporting gas, oil, or products thereof), distribution, or marketing of coal, petroleum, natural gas, or any derivative of coal, petroleum, or natural gas that is used for fuel.
(C)

Exception
The property described in subparagraph (A) shall not include any motor vehicle service station or convenience store which does not qualify as a retail motor fuels outlet under subsection (e)(3)(E)(iii).”.
(b)

Qualified business income
Section 199A(c)(3)(B) of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(viii)
Any item of gain or loss derived from fossil fuel activities (as defined in section 168(k)(11)(B)) during any taxable year beginning after the date of the enactment of the End Polluter Welfare Act of 2025.”.
(c)

Credit for increasing research activities
Section 41(d)(4) of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(I)

Fossil fuel activities
Any research related to fossil fuel activities (as defined in section 168(k)(11)(B)) which is conducted after the date of the enactment of the End Polluter Welfare Act of 2025.”.
(d)

Foreign-Derived intangible income
Subclause (V) of section 250(b)(3)(A)(i) of the Internal Revenue Code of 1986 is amended to read as follows:
“(V)
any income derived from fossil fuel activities (as defined in section 168(k)(11)(B)) during any taxable year beginning after the date of the enactment of the End Polluter Welfare Act of 2025, and”.
(e)

Exchange of real property held for productive use or investment
Section 1031(a)(2) of the Internal Revenue Code of 1986 is amended to read as follows:
“(2)

Exceptions
This subsection shall not apply to—
(A)
any exchange of real property held primarily for sale, or
(B)
any exchange of real property which—
(i)
is used for fossil fuel activities (as defined in section 168(k)(11)(B)), and
(ii)
occurs after the date of the enactment of the End Polluter Welfare Act of 2025.”.
203.

Uniform seven-year amortization for geological and geophysical expenditures
(a)

In general
Section 167(h) of the Internal Revenue Code of 1986 is amended—
(1)
by striking “24-month period” each place it appears in paragraphs (1) and (4) and inserting “84-month period”,
(2)
by striking paragraph (2) and inserting the following:
“(2)

Mid-month convention
For purposes of paragraph (1), any payment paid or incurred during any month shall be treated as paid or incurred on the mid-point of such month.”, and
(3)
by striking paragraph (5).
(b)

Effective date
The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.
204.

Natural gas gathering lines treated as 15-year property
(a)

In general
Section 168(e)(3)(E) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of clause (vi), by striking the period at the end of clause (vii) and inserting “, and”, and by adding at the end the following new clause:
“(viii)
any natural gas gathering line the original use of which commences with the taxpayer after the date of the enactment of this clause.”.
(b)

Alternative system
The table contained in section 168(g)(3)(B) of the Internal Revenue Code of 1986 is amended by inserting after the item relating to subparagraph (E)(vii) the following new item:
“(E)(viii)
22”.
(c)

Conforming amendment
Clause (iv) of section 168(e)(3)(C) of the Internal Revenue Code of 1986 is amended by inserting “and on or before the date of the enactment of the End Polluter Welfare Act of 2025” after “April 11, 2005”.
(d)

Effective date
(1)

In general
The amendments made by this section shall apply to property placed in service on and after the date of the enactment of this Act.
(2)

Exception
The amendments made by this section shall not apply to any property with respect to which the taxpayer or a related party has entered into a binding contract for the construction thereof on or before the date of the introduction of this Act, or, in the case of self-constructed property, has started construction on or before such date.
205.

Termination of last-in, first-out method of inventory for oil, natural gas, and coal companies
(a)

In general
Section 472 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(h)

Termination for oil, natural gas, and coal companies
Subsection (a) shall not apply to any taxpayer that is in the trade or business of the production, refining, processing, transportation, or distribution of oil, natural gas, or coal for any taxable year beginning after the date of enactment of the End Polluter Welfare Act of 2025.”.
(b)

Additional termination
Section 473 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(h)

Termination for oil, natural gas, and coal companies
This section shall not apply to any taxpayer that is in the trade or business of the production, refining, processing, transportation, or distribution of oil, natural gas, or coal for any taxable year beginning after the date of enactment of the End Polluter Welfare Act of 2025.”.
(c)

Change in method of accounting
In the case of any taxpayer required by the amendments made by this section to change its method of accounting for its first taxable year beginning after the date of enactment of this Act—
(1)
such change shall be treated as initiated by the taxpayer, and
(2)
such change shall be treated as made with the consent of the Secretary of the Treasury.
(d)

Effective date
The amendments made by this section shall apply to taxable years beginning after the date of enactment of this Act.
206.

Repeal of percentage depletion for coal and hard mineral fossil fuels
(a)

In general
Section 613 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(f)

Termination with respect to coal and hard mineral fossil fuels
In the case of coal, lignite, and oil shale (other than oil shale described in subsection (b)(5)), the allowance for depletion shall be computed without reference to this section for any taxable year beginning after the date of the enactment of the End Polluter Welfare Act of 2025.”.
(b)

Conforming amendments
(1)

Coal and lignite
Section 613(b)(4) of the Internal Revenue Code of 1986 is amended by striking “coal, lignite,”.
(2)

Oil shale
Section 613(b)(2) of such Code is amended to read as follows:
“(2)

15 percent
If, from deposits in the United States, gold, silver, copper, and iron ore.”.
(c)

Effective date
The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
207.

Termination of capital gains treatment for royalties from coal
(a)

In general
Subsection (c) of section 631 of the Internal Revenue Code of 1986 is amended—
(1)
by striking “coal (including lignite), or iron ore” and inserting “iron ore”,
(2)
by striking “coal or iron ore” each place it appears and inserting “iron ore”,
(3)
by striking “iron ore or coal” each place it appears and inserting “iron ore”, and
(4)
by striking “coal or” in the heading.
(b)

Conforming amendments
(1)
The heading of section 631 of the Internal Revenue Code of 1986 is amended by striking “, coal,”.
(2)
Section 1231(b)(2) of such Code is amended by striking “, coal,”.
(c)

Effective date
The amendments made by this section shall apply to dispositions after the date of the enactment of this Act.
208.

Modifications of foreign tax credit rules applicable to oil and gas industry taxpayers receiving specific economic benefits
(a)

In general
Section 901 of the Internal Revenue Code of 1986 is amended by redesignating subsection (n) as subsection (o) and by inserting after subsection (m) the following new subsection:
“(n)

Special rules relating to dual capacity taxpayers
(1)

General rule
Notwithstanding any other provision of this chapter, any amount paid or accrued to a foreign country or possession of the United States for any period by a dual capacity taxpayer which is in the trade or business of the production, refining, processing, transportation, or distribution of fossil fuel shall not be considered a tax—
(A)
if, for such period, the foreign country or possession does not impose a generally applicable income tax, or
(B)
to the extent such amount exceeds the amount (determined in accordance with regulations) which—
(i)
is paid by such dual capacity taxpayer pursuant to the generally applicable income tax imposed by the country or possession, or
(ii)
would be paid if no amount other than the amount required to be paid by such taxpayer under the generally applicable income tax imposed by the country or possession were paid or accrued by such dual capacity taxpayer.
Nothing in this paragraph shall be construed to imply the proper treatment of any such amount not in excess of the amount determined under subparagraph (B).
(2)

Dual capacity taxpayer
For purposes of this subsection, the term dual capacity taxpayer means, with respect to any foreign country or possession of the United States, a person who—
(A)
is subject to a levy of such country or possession, and
(B)
receives (or will receive) directly or indirectly a specific economic benefit (as determined in accordance with regulations) from such country or possession.
(3)

Generally applicable income tax
For purposes of this subsection—
(A)

In general
The term generally applicable income tax means an income tax (or a series of income taxes) which is generally imposed under the laws of a foreign country or possession on income derived from the conduct of a trade or business within such country or possession.
(B)

Exceptions
Such term shall not include a tax unless it has substantial application, by its terms and in practice, to—
(i)
persons who are not dual capacity taxpayers, and
(ii)
persons who are—
(I)
citizens or residents of the foreign country or possession, or
(II)
organized or incorporated under the laws of the foreign country or possession.
(4)

Fossil fuel
For purposes of this subsection, the term fossil fuel means coal, petroleum, natural gas, or any derivative of coal, petroleum, or natural gas that is used for fuel.”.
(b)

Effective date
The amendments made by this section shall apply to taxes paid or accrued in taxable years beginning after the date of the enactment of this Act.
(c)

Special rule for treaties
Notwithstanding sections 894 or 7852(d) of the Internal Revenue Code of 1986, the amendments made by this section shall apply without regard to any treaty obligation of the United States.
209.

Increase in oil spill liability trust fund financing rate
(a)

In general
Section 4611 of the Internal Revenue Code of 1986 is amended—
(1)
in subsection (c)(2)(B)—
(A)
in clause (i), by striking “and” at the end,
(B)
in clause (ii), by striking the period at the end and inserting “, and”, and
(C)
by adding at the end the following:
“(iii)
in the case of crude oil received or petroleum products entered after December 31, 2025, 10 cents a barrel.”, and
(2)
by striking subsection (f) and inserting the following:
“(f)

Application of Oil Spill Liability Trust Fund financing rate
The Oil Spill Liability Trust Fund financing rate under subsection (c) shall apply on and after April 1, 2006, or if later, the date which is 30 days after the last day of any calendar quarter for which the Secretary estimates that, as of the close of that quarter, the unobligated balance in the Oil Spill Liability Trust Fund is less than $2,000,000,000.”.
(b)

Effective date
The amendments made by this section shall apply to crude oil received and petroleum products entered after December 31, 2025.
210.

Application of certain environmental taxes to synthetic crude oil
(a)

In general
Paragraph (1) of section 4612(a) of the Internal Revenue Code of 1986 is amended to read as follows:
“(1)

Crude oil
(A)

In general
The term crude oil includes crude oil condensates, natural gasoline, and synthetic crude oil.
(B)

Synthetic crude oil
For purposes of subparagraph (A), the term synthetic crude oil means—
(i)
any bitumen and bituminous mixtures,
(ii)
any oil derived from bitumen and bituminous mixtures (including oil derived from tar sands),
(iii)
any liquid fuel derived from coal, and
(iv)
any oil derived from kerogen-bearing sources (including oil derived from oil shale).”.
(b)

Regulatory authority To address other types of crude oil and petroleum products
Subsection (a) of section 4612 of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(10)

Regulatory authority to address other types of crude oil and petroleum products
Under such regulations as the Secretary may prescribe, the Secretary may include as crude oil or as a petroleum product subject to tax under section 4611, any fuel feedstock or finished fuel product customarily transported by pipeline, vessel, railcar, or tanker truck if the Secretary determines that—
(A)
the classification of such fuel feedstock or finished fuel product is consistent with the definition of oil under the Oil Pollution Act of 1990, and
(B)
such fuel feedstock or finished fuel product is produced in sufficient commercial quantities as to pose a significant risk of hazard in the event of a discharge.”.
(c)

Technical amendment
Paragraph (2) of section 4612(a) of the Internal Revenue Code of 1986 is amended by striking “from a well located”.
(d)

Effective date
The amendments made by this section shall apply to oil and petroleum products received or entered during calendar quarters beginning more than 60 days after the date of the enactment of this Act.
211.

Denial of deduction for removal costs and damages for certain oil spills
(a)

In general
Section 162(f) of the Internal Revenue Code of 1986 is amended—
(1)
by redesignating paragraph (5) as paragraph (6), and
(2)
by inserting after paragraph (4) the following:
“(5)

Expenses for removal costs and damages relating to certain oil spill liability
Notwithstanding paragraphs (2) and (3), no deduction shall be allowed under this chapter for any costs or damages for which the taxpayer is liable under section 1002 of the Oil Pollution Act of 1990 (33 U.S.C. 2702)”.
(b)

Effective date
The amendments made by this section shall apply with respect to any liability arising in taxable years ending after the date of the enactment of this Act.
212.

Tax on crude oil and natural gas produced from the outer Continental Shelf in the Gulf of Mexico
(a)

In general
Subtitle E of the Internal Revenue Code of 1986 is amended by adding at the end the following new chapter:
“56

Tax on severance of crude oil and natural gas from the outer Continental Shelf in the Gulf of Mexico
Sec. 5901. Imposition of tax.
Sec. 5902. Taxable crude oil or natural gas and removal price.
Sec. 5903. Special rules and definitions.
5901.

Imposition of tax
(a)

In general
In addition to any other tax imposed under this title, there is hereby imposed a tax equal to 13 percent of the removal price of any taxable crude oil or natural gas removed from the premises during any taxable period.
(b)

Credit for Federal royalties paid
(1)

In general
There shall be allowed as a credit against the tax imposed by subsection (a) with respect to the production of any taxable crude oil or natural gas an amount equal to the aggregate amount of royalties paid under Federal law with respect to such production.
(2)

Limitation
The aggregate amount of credits allowed under paragraph (1) to any taxpayer for any taxable period shall not exceed the amount of tax imposed by subsection (a) for such taxable period.
(c)

Tax paid by producer
The tax imposed by this section shall be paid by the producer of the taxable crude oil or natural gas.
5902.

Taxable crude oil or natural gas and removal price
(a)

Taxable crude oil or natural gas
For purposes of this chapter, the term taxable crude oil or natural gas means crude oil or natural gas which is produced from Federal submerged lands on the outer Continental Shelf in the Gulf of Mexico pursuant to a lease entered into with the United States which authorizes the production.
(b)

Removal price
For purposes of this chapter—
(1)

In general
Except as otherwise provided in this subsection, the term removal price means—
(A)
in the case of taxable crude oil, the amount for which a barrel of such crude oil is sold, and
(B)
in the case of taxable natural gas, the amount per 1,000 cubic feet for which such natural gas is sold.
(2)

Sales between related persons
In the case of a sale between related persons, the removal price shall not be less than the constructive sales price for purposes of determining gross income from the property under section 613.
(3)

Oil or natural gas removed from property before sale
If crude oil or natural gas is removed from the property before it is sold, the removal price shall be the constructive sales price for purposes of determining gross income from the property under section 613.
(4)

Refining begun on property
If the manufacture or conversion of crude oil into refined products begins before such oil is removed from the property—
(A)
such oil shall be treated as removed on the day such manufacture or conversion begins, and
(B)
the removal price shall be the constructive sales price for purposes of determining gross income from the property under section 613.
(5)

Property
The term property has the meaning given such term by section 614.
5903.

Special rules and definitions
(a)

Administrative requirements
(1)

Withholding and deposit of tax
The Secretary shall provide for the withholding and deposit of the tax imposed under section 5901 on a quarterly basis.
(2)

Records and information
Each taxpayer liable for tax under section 5901 shall keep such records, make such returns, and furnish such information (to the Secretary and to other persons having an interest in the taxable crude oil or natural gas) with respect to such oil as the Secretary may by regulations prescribe.
(3)

Taxable periods; return of tax
(A)

Taxable period
Except as provided by the Secretary, each calendar year shall constitute a taxable period.
(B)

Returns
The Secretary shall provide for the filing, and the time for filing, of the return of the tax imposed under section 5901.
(b)

Definitions
For purposes of this chapter—
(1)

Producer
The term producer means the holder of the economic interest with respect to the crude oil or natural gas.
(2)

Crude oil
The term crude oil includes crude oil condensates and natural gasoline.
(3)

Premises and crude oil product
The terms premises and crude oil product have the same meanings as when used for purposes of determining gross income from the property under section 613.
(c)

Adjustment of removal price
In determining the removal price of oil or natural gas from a property in the case of any transaction, the Secretary may adjust the removal price to reflect clearly the fair market value of oil or natural gas removed.
(d)

Regulations
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this chapter.”.
(b)

Deductibility of tax
The first sentence of section 164(a) of the Internal Revenue Code of 1986 is amended by inserting after paragraph (4) the following new paragraph:
“(5)
The tax imposed by section 5901(a) (after application of section 5901(b)) on the severance of crude oil or natural gas from the outer Continental Shelf in the Gulf of Mexico.”.
(c)

Clerical amendment
The table of chapters for subtitle E is amended by adding at the end the following new item:
“Chapter 56. Tax on severance of crude oil and natural gas from the outer Continental Shelf in the Gulf of Mexico.”.
(d)

Effective date
The amendments made by this section shall apply to crude oil or natural gas removed after December 31, 2025.
213.

Repeal of corporate income tax exemption for publicly traded partnerships with qualifying income and gains from activities relating to fossil fuels
(a)

In general
Section 7704(d)(1) of the Internal Revenue Code of 1986 is amended by inserting “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)”.
(b)

Effective date
The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
214.

Amortization of qualified tertiary injectant expenses
(a)

In general
Section 193 of the Internal Revenue Code of 1986 is amended—
(1)
by striking subsection (a) and inserting the following:
“(a)

Amortization of qualified tertiary injectant expenses
(1)

In general
Any qualified tertiary injectant expenses paid or incurred by the taxpayer shall be allowed as a deduction ratably over the 84-month period beginning on the date that such expense was paid or incurred.
(2)

Mid-month convention
For purposes of paragraph (1), any expenses paid or incurred during any month shall be treated as paid or incurred on the mid-point of such month.”, and
(2)
by striking subsection (c) and inserting the following:
“(c)

Exclusive method
Except as provided in this section, no depreciation or amortization deduction shall be allowed with respect to qualified tertiary injectant expenses.”.
(b)

Effective date
The amendments made by this section shall apply to expenses paid or incurred in taxable years beginning after the date of the enactment of this Act.
215.

Amortization of development expenditures
(a)

In general
Section 616 of the Internal Revenue Code of 1986 is amended to read as follows:
“616.

Amortization of development expenditures
(a)

In general
Any expenditures paid or incurred for the development of a mine or other natural deposit (other than an oil or gas well) if paid or incurred after the existence of ores or minerals in commercially marketable quantities has been disclosed shall be allowed as a deduction ratably over the 84-month period beginning on the date that such expenditure was paid or incurred.
(b)

Mid-Month convention
For purposes of subsection (a), any expenditures paid or incurred during any month shall be treated as paid or incurred on the mid-point of such month.
(c)

Exclusive method
Except as provided in this section, no depreciation or amortization deduction shall be allowed with respect to expenditures described in subsection (a).
(d)

Treatment upon abandonment
If any property with respect to which expenditures described in subsection (a) are paid or incurred is retired or abandoned during the 84-month period described in such subsection, no deduction shall be allowed on account of such retirement or abandonment and the amortization deduction under this section shall continue with respect to such payment.”.
(b)

Conforming amendments
(1)
The item relating to section 616 in the table of sections for part I of subchapter I of chapter 1 of the Internal Revenue Code of 1986 is amended to read as follows:
“Sec. 616. Amortization of development expenditures.”.
(2)
Section 56(a)(2)(A) of such Code is amended by striking “616(a) or”.
(3)
Section 59(e) of such Code is amended—
(A)
in paragraph (2)—
(i)
in subparagraph (C), by inserting “or” at the end,
(ii)
by striking subparagraph (D), and
(iii)
by redesignating subparagraph (E) as subparagraph (D), and
(B)
in paragraph (5)(A), by striking “, 616(a),”.
(4)
Section 263(a)(1) of such Code is amended by striking subparagraph (A).
(5)
Section 263A(c)(3) of such Code is amended by striking “616,”.
(6)
Section 291(b) of such Code is amended—
(A)
in paragraph (1)(B), by striking “616(a) or”,
(B)
in paragraph (2), by striking “, 616(a),”, and
(C)
in paragraph (3), by striking “, 616(a),”.
(7)
Section 312(n)(2)(B) of such Code is amended by striking “616(a) or”.
(8)
Section 381(c) of such Code is amended by striking paragraph (10).
(9)
Section 1016(a) of such Code is amended by striking paragraph (9).
(10)
Section 1254(a)(1)(A)(i) of such Code is amended by striking “, 616,”.
(c)

Effective date
The amendments made by this section shall apply to expenditures paid or incurred in taxable years beginning after the date of the enactment of this Act.
216.

Amortization of certain mining exploration expenditures
(a)

In general
Section 617 of the Internal Revenue Code of 1986 is amended to read as follows:
“617.

Amortization of certain mining exploration expenditures
(a)

In general
Any expenditures paid or incurred for the purpose of ascertaining the existence, location, extent, or quality of any deposit of ore or other mineral, and paid or incurred before the beginning of the development stage of the mine, shall be allowed as a deduction ratably over the 84-month period beginning on the date that such expense was paid or incurred.
(b)

Mid-Month convention
For purposes of subsection (a), any expenditures paid or incurred during any month shall be treated as paid or incurred on the mid-point of such month.
(c)

Exclusive method
Except as provided in this section, no depreciation or amortization deduction shall be allowed with respect to expenditures described in subsection (a).
(d)

Treatment upon abandonment
If any property with respect to which expenditures described in subsection (a) are paid or incurred is retired or abandoned during the 84-month period described in such subsection, no deduction shall be allowed on account of such retirement or abandonment and the amortization deduction under this section shall continue with respect to such payment.”.
(b)

Conforming amendments
(1)
The item relating to section 617 in the table of sections for part I of subchapter I of chapter 1 of the Internal Revenue Code of 1986 is amended to read as follows:
“Sec. 617. Amortization of certain mining exploration expenditures.”.
(2)
Section 56(a) of such Code, as amended by section 215(b)(2), is amended by striking paragraph (2).
(3)
Section 59(e) of such Code, as amended by section 215(b)(3), is amended—
(A)
in paragraph (2)—
(i)
in subparagraph (B), by inserting “or” at the end,
(ii)
in subparagraph (C), by striking the comma at the end and inserting a period, and
(iii)
by striking subparagraph (D), and
(B)
by striking paragraph (5) and inserting the following:
“(5)

Dispositions
In the case of any disposition of property to which section 1254 applies (determined without regard to this section), any deduction under paragraph (1) with respect to amounts which are allocable to such property shall, for purposes of section 1254, be treated as a deduction allowable under section 263(c).”.
(4)
Section 170(e) of such Code is amended—
(A)
in paragraph (1), by striking “617(d)(1),”, and
(B)
in paragraph (3)(D), by striking “617,”.
(5)
Section 263A(c)(3) of such Code, as amended by section 215(b)(5), is amended by striking “291(b)(2), or 617” and inserting “or 291(b)(2)”.
(6)
Section 291(b) of such Code, as amended by section 215(b)(6), is amended—
(A)
in the heading, by striking “and mineral exploration and development costs”,
(B)
by striking paragraph (1) and inserting the following:
“(1)

In general
In the case of an integrated oil company, the amount allowable as a deduction for any taxable year (determined without regard to this section) under section 263(c) shall be reduced by 30 percent.”,
(C)
in paragraph (2), by striking “or 617(a) (as the case may be)”, and
(D)
in paragraph (3), by striking “or 617(a) (whichever is appropriate)”.
(7)
Section 312(n), as amended by section 215(b)(7), is amended by striking paragraph (2) and inserting the following:
“(2)

Intangible drilling costs
Any amount allowable as a deduction under section 263(c) in determining taxable income (other than costs incurred in connection with a nonproductive well)—
(A)
shall be capitalized, and
(B)
shall be allowed as a deduction ratably over the 60-month period beginning with the month in which such amount was paid or incurred.”.
(8)
Section 703(b) of such Code is amended—
(A)
in paragraph (1), by adding “or” at the end,
(B)
by striking paragraph (2), and
(C)
by redesignating paragraph (3) as paragraph (2).
(9)
Section 751(c) of such Code is amended—
(A)
by inserting “, as in effect on the day before the date of the enactment of the End Polluter Welfare Act of 2025” after “section 617(f)(2)”, and
(B)
by striking “617(d)(1),”.
(10)
Section 1254(a)(1)(A)(i) of such Code, as amended by section 215(b)(10), is amended by striking “or 617”.
(11)
Paragraph (2) of section 1363(c) of such Code is amended to read as follows:
“(2)

Exception
In the case of an S corporation, elections under section 901 (relating to taxes of foreign countries and possessions of the United States) shall be made by each shareholder separately.”.
(c)

Effective date
The amendments made by this section shall apply to expenditures paid or incurred in taxable years beginning after the date of the enactment of this Act.
217.

Amortization of intangible drilling and development costs in the case of oil and gas wells
(a)

In general
Subsection (c) of section 263 of the Internal Revenue Code of 1986 is amended to read as follows:
“(c)

Intangible drilling and development costs in the case of oil and gas wells and geothermal wells
(1)

Geothermal wells
Notwithstanding subsection (a), and except as provided in subsection (i), a taxpayer may elect to deduct as expenses intangible drilling and development costs in the case of wells drilled for any geothermal deposit (as defined in section 613(e)(2)) in such manner as the Secretary provides. This subsection shall not apply with respect to any costs to which any deduction is allowed under section 59(e).
(2)

Oil and gas wells
Notwithstanding subsection (a), and except as provided in subsection (i), in the case of any expenses paid or incurred in taxable years beginning after the date of the enactment of End Polluter Welfare Act of 2025 in connection with intangible drilling and development costs related to oil and gas wells—
(A)
such expenses shall be allowed as a deduction ratably over the 84-month period beginning on the date that such expense was paid or incurred,
(B)
any such expenses paid or incurred during any month shall be treated as paid or incurred on the mid-point of such month,
(C)
except as provided in this paragraph, no depreciation or amortization deduction shall be allowed with respect to such expenses, and
(D)
if any property with respect to which such intangible drilling and development costs are paid or incurred is retired or abandoned during such 84-month period, no deduction shall be allowed on account of such retirement or abandonment and the amortization deduction under this paragraph shall continue with respect to such payment.”.
(b)

Conforming amendments
(1)
Paragraph (2) of section 57(a) of the Internal Revenue Code of 1986 is amended to read as follows:
“(2)

Intangible drilling costs
(A)

In general
With respect to all geothermal properties of the taxpayer, the amount (if any) by which the amount of the excess intangible drilling costs arising in the taxable year is greater than 65 percent of the net income of the taxpayer from geothermal properties for the taxable year.
(B)

Excess intangible drilling costs
For purposes of subparagraph (A), the amount of the excess intangible drilling costs arising in the taxable year is the excess of—
(i)
the intangible drilling and development costs paid or incurred in connection with geothermal wells (other than costs incurred in drilling a nonproductive well) allowable under section 263(c)(1) for the taxable year, over
(ii)
the amount which would have been allowable for the taxable year if such costs had been capitalized and straight line recovery of intangibles (as defined in subsection (b)) had been used with respect to such costs.
(C)

Net income from geothermal properties
For purposes of subparagraph (A), the amount of the net income of the taxpayer from geothermal properties for the taxable year is the excess of—
(i)
the aggregate amount of gross income (within the meaning of section 613(a)) from all geothermal properties of the taxpayer received or accrued by the taxpayer during the taxable year, over
(ii)
the amount of any deductions allocable to such properties reduced by the excess described in subparagraph (B) for such taxable year.”.
(2)
Section 59(e) of such Code, as amended by sections 215 and 216, is amended—
(A)
in paragraph (2)(C), by striking “section 263(c)” and inserting “section 263(c)(1)”, and
(B)
in paragraph (5), by striking “section 263(c)” and inserting “section 263(c)(1)”.
(3)
Section 263A(c)(3) of such Code, as amended by sections 215 and 216, is amended—
(A)
in the heading, by striking “oil and gas” and inserting “geothermal”, and
(B)
by striking “263(c),” and inserting “263(c)(1)”.
(4)
Section 291 of such Code, as amended by sections 215 and 216, is amended by striking subsection (b).
(5)
Section 312(n) of such Code, as amended by sections 215 and 216, is amended by striking “section 263(c),” and inserting “section 263(c)(1)”.
(c)

Effective date
The amendments made by this section shall apply to expenditures paid or incurred in taxable years beginning after the date of the enactment of this Act.
218.

Increase in excise tax rate for funding of Black Lung Disability Trust Fund
(a)

In general
Section 4121(b) of the Internal Revenue Code of 1986 is amended—
(1)
in paragraph (1), by striking “$1.10” and inserting “$1.38”, and
(2)
in paragraph (2), by striking “$.55” and inserting “$0.69”.
(b)

Effective date
The amendments made by this section shall apply on and after the first day of the first calendar month beginning after the date of the enactment of this Act.
219.

Elimination of renewable electricity production credit eligibility for refined coal
(a)

In general
Section 45 of the Internal Revenue Code of 1986 is amended—
(1)
in subsection (b)(2)—
(A)
in the first sentence, by striking “, the 8 cent amount” and all that follows through “in 2002” and inserting “and the 8 cent amount in paragraph (1)”, and
(B)
in the third sentence, by striking “In any other case, if an amount” and inserting “If the 8 cent amount”,
(2)
in subsection (c), by striking paragraph (7),
(3)
in subsection (d), by striking paragraph (8), and
(4)
in subsection (e)—
(A)
by striking paragraph (8), and
(B)
by striking paragraph (9) and inserting the following:
“(9)

Coordination with credit for producing fuel from a nonconventional source
The term “qualified facility” shall not include any facility which produces electricity from gas derived from the biodegradation of municipal solid waste if such biodegradation occurred in a facility (within the meaning of section 45K) the production from which is allowed as a credit under section 45K for the taxable year or any prior taxable year.”.
(b)

Conforming amendments
(1)
Section 38(c)(4)(B)(iv) of the Internal Revenue Code of 1986 is amended by striking “or refined coal”.
(2)
Section 45K(g)(2) of such Code is amended by striking subparagraph (E).
(c)

Effective date
The amendments made by this section shall apply to coal produced after December 31, 2025.
220.

Treatment of foreign oil related income as subpart F income
(a)

In general
Section 954(a) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting “, and”, and by adding at the end the following new paragraph:
“(4)
the foreign base company oil related income for the taxable year (determined under subsection (f) and reduced as provided in subsection (b)(5)).”.
(b)

Foreign base company oil related income
Section 954 of the Internal Revenue Code of 1986 is amended by inserting after subsection (e) the following new subsection:
“(f)

Foreign base company oil related income
For purposes of this section—
(1)

In general
Except as otherwise provided in this subsection, the term foreign base company oil related income means foreign oil related income (within the meaning of paragraphs (2) and (3) of section 907(c)) other than income derived from a source within a foreign country in connection with—
(A)
oil or gas which was extracted from an oil or gas well located in such foreign country, or
(B)
oil, gas, or a primary product of oil or gas which is sold by the foreign corporation or a related person for use or consumption within such country or is loaded in such country on a vessel or aircraft as fuel for such vessel or aircraft.
Such term shall not include any foreign personal holding company income (as defined in subsection (c)).
(2)

Paragraph (1) applies only where corporation has produced 1,000 barrels per day or more
(A)

In general
The term foreign base company oil related income shall not include any income of a foreign corporation if such corporation is not a large oil producer for the taxable year.
(B)

Large oil producer
For purposes of subparagraph (A), the term large oil producer means any corporation if, for the taxable year or for the preceding taxable year, the average daily production of foreign crude oil and natural gas of the related group which includes such corporation equaled or exceeded 1,000 barrels.
(C)

Related group
The term related group means a group consisting of the foreign corporation and any other person who is a related person with respect to such corporation.
(D)

Average daily production of foreign crude oil and natural gas
For purposes of this paragraph, the average daily production of foreign crude oil or natural gas of any related group for any taxable year (and the conversion of cubic feet of natural gas into barrels) shall be determined under rules similar to the rules of section 613A (as in effect on the day before the date of enactment of the End Polluter Welfare Act of 2025) except that only crude oil or natural gas from a well located outside the United States shall be taken into account.”.
(c)

Conforming amendments
(1)
Section 952(c)(1)(B)(iii) of the Internal Revenue Code of 1986 is amended by redesignating subclauses (I) through (IV) as subclauses (II) through (V), respectively, and by inserting before subclause (II) (as so redesignated) the following:
“(I)
foreign base company oil related income,”.
(2)
Section 954(b) of such Code is amended—
(A)
by inserting at the end of paragraph (4) the following: “The preceding sentence shall not apply to foreign base company oil-related income described in subsection (a)(4).”,
(B)
by striking “and the foreign base company services income” in paragraph (5) and inserting “the foreign base company services income, and the foreign base company oil related income”, and
(C)
by adding at the end the following new paragraph:
“(6)

Foreign base company oil related income not treated as another kind of base company income
Income of a corporation which is foreign base company oil related income shall not be considered foreign base company income of such corporation under paragraph (2) or (3) of subsection (a).”.
(d)

Effective date
The amendments made by this section shall apply to taxable years of foreign corporations beginning after the date of the enactment of this Act and to taxable years of United States shareholders ending with or within which such taxable years of foreign corporations end.
221.

Repeal of exclusion of foreign oil and gas extraction income from the determination of tested income
(a)

In general
Section 951A(c)(2)(A)(i) of the Internal Revenue Code of 1986 is amended—
(1)
by adding “and” at the end of subclause (III),
(2)
by striking “and” at the end of subclause (IV) and inserting “over”, and
(3)
by striking subclause (V).
(b)

Effective date
The amendments made by this section shall apply to taxable years of foreign corporations beginning after the date of enactment of this Act, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end.
222.

Termination of credit for carbon oxide sequestration
(a)

In general
Section 45Q of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(j)

Termination
This section shall not apply with respect to any qualified carbon oxide captured after the date of enactment of the End Polluter Welfare Act of 2025.”.
(b)

Report
(1)

In general
Not later than 6 months after the date of enactment of this Act, the Secretary of the Treasury, or the Secretary's delegate, shall submit a report to Congress, to be made available to the public, which provides the following information:
(A)
The taxpayer identity information of any taxpayer for which the carbon oxide sequestration credit under section 45Q of the Internal Revenue Code of 1986 was allowed for any taxable year following the enactment of such section.
(B)
The total amount of the credit allowed pursuant to such section to each taxpayer described in subparagraph (A).
(C)
With respect to the amount described in subparagraph (B), the amount of such credit allowed with respect to each of the following:
(i)
Qualified carbon oxide which was captured and disposed of by the taxpayer in secure geological storage and not used by the taxpayer as described in clause (ii) or (iii).
(ii)
Qualified carbon oxide which was captured and used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project and disposed of by the taxpayer in secure geological storage.
(iii)
Qualified carbon oxide which was captured and utilized by the taxpayer in a manner described in section 45Q(f)(5) of the Internal Revenue Code of 1986.
(2)

Exception from rules regarding confidentiality and disclosure of returns and return information
Section 6103(l) of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(23)

Disclosure of return information for public report on carbon oxide sequestration credit
The Secretary may disclose taxpayer identity information and return information to the extent the Secretary deems necessary for purposes of the report issued pursuant to section 222 of the End Polluter Welfare Act of 2025.”.
223.

Eliminate drawbacks on petroleum taxes
(a)

In general
Section 313(j) of the Tariff Act of 1930 (19 U.S.C. 1313(j)) is amended by adding at the end the following new paragraph:
“(7)
No amount of any tax imposed on any merchandise pursuant to section 4611 of the Internal Revenue Code of 1986 shall be eligible to be refunded as drawback under this subsection.”.
(b)

Effective date
The amendment made by this section shall apply with respect to articles entered, or withdrawn from warehouse for consumption, on or after January 1, 2026.
224.

Modifying clean hydrogen production credit
(a)

In general
Section 45V of the Internal Revenue Code of 1986, as amended by section 70511 of Public Law 119–21, is amended—
(1)
in subsection (a), by striking paragraph (2) and inserting the following:
“(2)
$0.60.”,
(2)
by striking subsection (b) and inserting the following:
“(b)

Inflation adjustment
The $0.60 amount in subsection (a)(2) shall be adjusted by multiplying such amount by the inflation adjustment factor (as determined under section 45(e)(2), determined by substituting “2024” for “1992” in subparagraph (B) thereof) for the calendar year in which the qualified clean hydrogen is produced. If any amount as increased under the preceding sentence is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent.”,
(3)
in subsection (c)—
(A)
by striking paragraph (1),
(B)
in paragraph (2)—
(i)
by striking subparagraph (A) and inserting the following:
“(A)

Definition
(i)

In general
The term qualified clean hydrogen means hydrogen produced using an electrolyzer for which the electricity used is—
(I)
produced at a facility which—
- (aa)
uses qualified renewable energy resources to produce such electricity,
- (bb)
was placed in service not greater than 36 months prior to the date on which the facility which produces such hydrogen was placed in service, and
- (cc)
is in the same region (as defined in the National Transmission Needs Study of the Department of Energy, dated October 30, 2023) as the facility which produces such hydrogen, and
(II)
produced at the facility described in subclause (I) not less than 1 hour prior to use by the electrolyzer.
(ii)

Qualified renewable energy resources
The term qualified renewable energy resources means—
(I)
wind,
(II)
solar energy,
(III)
geothermal energy (as defined in section 45(c)(4)),
(IV)
marine and hydrokinetic renewable energy (as defined in section 45(c)(10)), and
(V)
hydropower.”, and
(ii)
by striking subparagraph (C),
(C)
in paragraph (3)(C), by inserting “, and which is placed in service after December 31, 2025” after “January 1, 2028”, and
(D)
by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively,
(4)
in subsection (e)—
(A)
in paragraph (1), by striking “described in subsection (b)(2)” and inserting “produced by the taxpayer”, and
(B)
in paragraph (3)(A)(ii), by striking “subsection (a)(2)” and inserting “subsection (a)(1)”, and
(5)
in subsection (f), by striking “, including regulations or other guidance for determining lifecycle greenhouse gas emissions”.
(b)

Conforming amendments
(1)
Section 45(e)(13) of the Internal Revenue Code of 1986 is amended by striking “section 45V(c)(3)) to produce qualified clean hydrogen (as defined in section 45V(c)(2))” and inserting “section 45V(c)(2)) to produce qualified clean hydrogen (as defined in section 45V(c)(1))”.
(2)
Section 48(a)(15) of such Code is amended—
(A)
in subparagraph (A), by striking clause (ii) and inserting the following:
“(ii)
the energy percentage with respect to such property is 6 percent.”,
(B)
in subparagraph (C)—
(i)
by striking “section 45V(c)(3)” and inserting “section 45V(c)(2)”, and
(ii)
in clause (i), by striking “December 31, 2022” and inserting “December 31, 2025”, and
(C)
in subparagraph (D), by striking “section 45V(c)(2)” and inserting “section 45V(c)(1)”.
(3)
Section 6417 of such Code is amended—
(A)
in subsection (b)(5), by striking “December 31, 2012” and inserting “December 31, 2025”, and
(B)
in subsection (d)(1)(B), by striking “section 45V(c)(3)” and inserting “section 45V(c)(2)”.
(c)

Effective date
The amendments made by this section shall apply to facilities placed in service after December 31, 2025.
III

Repeal recent fossil fuel subsidy legislation
301.

BUILDER Act
(a)

General repeal
Sections 106, 107, 108, 109, 110, and 111 of the National Environmental Policy Act of 1969 (42 U.S.C. 4336, 4336a, 4336b, 4336c, 4336d, 4336e) are repealed.
(b)

Repeal of modifications
Section 102(2) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)) is amended—
(1)
in subparagraph (C)—
(A)
in the matter preceding clause (i), by striking “consistent with the provisions of this Act and except where compliance would be inconsistent with other statutory requirements,”;
(B)
by striking clauses (i) through (v) and inserting the following:
“(i)
the environmental impact of the proposed action;
(ii)
any adverse environmental effects that cannot be avoided if the proposed action is implemented;
(iii)
alternatives to the proposed action;
(iv)
the relationship between local short-term uses of the human environment and the maintenance and enhancement of long-term productivity; and
(v)
any irreversible and irretrievable commitments of resources that would be involved in the proposed action if the proposed action is implemented.”; and
(C)
in the undesignated matter following clause (v) (as so amended), in the first sentence, by striking “head of the lead agency” and inserting “responsible Federal official”;
(2)
by striking subparagraphs (D), (E), and (F);
(3)
by redesignating subparagraphs (G) through (L) as subparagraphs (D) through (I), respectively; and
(4)
in subparagraph (F) (as so redesignated), by striking “consistent with the provisions of this Act,”.
(c)

Conforming amendment
Section 9909(c)(1) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (15 U.S.C. 4659(c)(1)) is amended by striking “has the meaning given the term in section 111 of NEPA (42 U.S.C. 4336e)” and inserting “, with respect to a covered activity, means the Federal agency that proposed the covered activity”.
302.

Inflation Reduction Act
(a)

Lease sales under the 2017–2022 outer Continental Shelf leasing program
Section 50264 of Public Law 117–169 (commonly known as the “Inflation Reduction Act of 2022”) (136 Stat. 2059) is repealed.
(b)

Ensuring energy security
Section 50265 of Public Law 117–169 (commonly known as the “Inflation Reduction Act of 2022”) (43 U.S.C. 3006) is repealed.
303.

One Big Beautiful Bill Act
(a)

Internal Revenue Code
(1)

Exclusion of metallurgical coal under advanced manufacturing production credit
Section 45X of the Internal Revenue Code of 1986, as amended by section 70514 of Public Law 119–21 (commonly known as the “One Big Beautiful Bill Act”), is amended—
(A)
in subsection (b)(1)(M), by striking “(2.5 percent in the case of metallurgical coal)”,
(B)
in subsection (b)(3)—
(i)
in subparagraph (C)—
(I)
in the heading, by striking “other than metallurgical coal”,
(II)
in clause (i), by striking “(other than metallurgical coal)”, and
(III)
in the heading of clause (ii), by striking “other than metallurgical coal”, and
(ii)
by striking subparagraph (E), and
(C)
in subsection (c)(6), by striking subparagraph (R).
(2)

Intangible drilling and development costs
The amendments made by section 70523 of Public Law 119–21 are repealed and the Internal Revenue Code of 1986 shall be applied as if such amendments had not been enacted.
(3)

Income from carbon capture and hydrogen
Section 7704(d)(1)(E) of the Internal Revenue Code of 1986, as amended by section 70524 of Public Law 119–21, is amended—
(A)
in clause (ii)(II), by inserting “provided that such hydrogen is qualified clean hydrogen (as defined in section 45V(c)(1)(A)),” after “liquified hydrogen or compressed hydrogen,”, and
(B)
by striking clause (iii).
(b)

Oil and gas, mining, and energy repeals
The provisions of, and the amendments made by, sections 50101, 50102, 50103, 50104, 50105, 50201, 50202, 50203, 50204, and 50403 of Public Law 119–21 (commonly known as the “One Big Beautiful Bill Act”) (139 Stat. 72) are repealed, and any provision of law amended or repealed by those sections shall be applied as if such amendments or repeals had not been enacted.
(c)

Methane emissions and waste reduction incentive program
Section 136(g) of the Clean Air Act (42 U.S.C. 7436(g)) (as amended by section 60012(b) of Public Law 119–21 (commonly known as the “One Big Beautiful Bill Act”)) (139 Stat. 72) is amended by striking “calendar year 2034” and inserting “calendar year 2024”.
(d)

Repeal of project sponsor opt-In fees for environmental reviews
Section 112 of the National Environmental Policy Act of 1969 (as added by section 60026 of Public Law 119–21 (commonly known as the “One Big Beautiful Bill Act”)) (139 Stat. 72) is repealed.
304.

Waste emissions charge rule
(a)

Repeal
Public Law 119–2 (139 Stat. 7) is repealed.
(b)

Implementation
The Administrator of the Environmental Protection Agency shall implement the final rule of the Environmental Protection Agency entitled “Waste Emissions Charge for Petroleum and Natural Gas Systems: Procedures for Facilitating Compliance, Including Netting and Exemptions” (89 Fed. Reg. 91094 (November 18, 2024)) as if Public Law 119–2 (139 Stat. 7) had not been enacted into law.
IV

Elimination of other fossil fuel subsidies
401.

Study and elimination of additional fossil fuel subsidies
(a)

Definition of subsidy for fossil-Fuel production
In this section, the term subsidy for fossil-fuel production means any direct funding, tax treatment or incentive, risk-reduction benefit, financing assistance or guarantee, royalty relief, or other provision that provides a financial benefit to a fossil-fuel company for the production of fossil fuels.
(b)

Report to Congress
Not later than 1 year after the date of enactment of this Act, the Secretary of the Treasury or a delegate of the Secretary (referred to in this section as the Secretary), in coordination with the Secretary of Energy, shall submit to Congress a report detailing each Federal law (including regulations), other than those amended by this Act, as in effect on the date on which the report is submitted, that includes a subsidy for fossil-fuel production.
(c)

Report on modified recovery period
(1)

In general
Not later than 1 year after the date of enactment of this Act, the Secretary, in coordination with the Commissioner of Internal Revenue, shall submit to Congress a report on the applicable recovery period under the accelerated cost recovery system provided in section 168 of the Internal Revenue Code of 1986 for each type of property involved in fossil-fuel production, including pipelines, power generation property, refineries, and drilling equipment, to determine if any assets are receiving a subsidy for fossil-fuel production.
(2)

Elimination of subsidy
(A)

In general
In the case of any type of property that the Secretary determines is receiving a subsidy for fossil-fuel production under section 168 of the Internal Revenue Code of 1986, for property placed in service in taxable years beginning after the date of such determination, section 168 of the Internal Revenue Code of 1986 shall not apply.
(B)

Exception
Subparagraph (A) shall not apply to any property with respect to a taxable year unless such determination is published before the first day of such taxable year.