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Bill
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Restoring Fuel Market Freedom Act of 2025

H.R. 311 · 119th Congress · Jan 9, 2025 · Lineage

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.

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:

“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.