Sponsors (23)
Official title: To eliminate certain subsidies for fossil-fuel production.
Introduced July 23, 2025 by Ilhan Omar · Last progress July 23, 2025
The bill shifts fiscal and regulatory incentives away from fossil‑fuel production and toward greater environmental oversight and transparency—raising federal revenue and spill‑response capacity—while increasing costs, compliance burdens, and permitting timelines that may raise energy prices and stress fossil‑fuel‑dependent communities.
Taxpayers and the federal budget: the bill removes multiple fossil‑fuel tax preferences and accelerated tax benefits, reducing implicit subsidies that previously lowered the after‑tax cost of producing fossil fuels and leveling the tax treatment across industries.
Federal revenues and spill response funding: the bill creates new revenue streams (including a new tax on Gulf OCS crude/natural gas and a 10¢/barrel financing rate) that raise federal receipts and bolster the Oil Spill Liability Trust Fund for cleanup and readiness.
Environmental preparedness: the bill increases financing for the Oil Spill Liability Trust Fund, strengthening federal resources available for spill response and remediation.
Energy producers, workers, and consumers: removing tax preferences, eliminating accelerated depreciation, and imposing new producer taxes will raise after‑tax costs for fossil‑fuel companies, likely reducing investment, risking job losses in energy communities, and putting upward pressure on energy prices for consumers and businesses.
Taxpayers, firms, and agencies: the bill introduces retroactive or transitional deadlines, new reporting/disclosure rules, and complex definitional changes that increase compliance costs and administrative burden for taxpayers, Treasury, IRS, and financial institutions and may raise international/treaty tax compliance issues.
Project sponsors and communities: restoring stronger NEPA reviews and the EPA Waste Emissions Charge can slow permitting, increase project compliance costs, delay infrastructure and energy projects, and raise costs passed to consumers and local economies.
Based on analysis of 11 sections of legislative text.
Terminates many fossil‑fuel tax benefits and royalty relief, restricts carbon capture and petroleum drawback refunds, reverses recent permitting/subsidy expansions, and orders Treasury subsidy reviews.
Eliminates a wide range of federal subsidies, tax benefits, royalty relief, and permitting rollbacks for fossil‑fuel production and certain fossil‑related infrastructure. It removes or narrows oil, gas, and coal royalty relief and leasing incentives, terminates multiple fossil‑fuel tax credits and accelerated depreciation benefits, and restricts carbon‑sequestration and petroleum tax refund provisions. The bill also reverses recent statutory changes that expanded fossil‑fuel permitting and subsidized production, requires Treasury reports to identify remaining fossil‑fuel subsidies and affected asset recovery periods, and instructs disclosure and reporting of certain carbon capture tax credit recipients. Many changes take effect on enactment or for property/facilities placed in service or taxable years beginning after enactment (with specific dates for some provisions).