CLEAR Skies Act

Bill Number

H.R. 2932

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-04-17: Referred to the House Committee on Ways and Means.

Last Updated

2025-05-28T15:20:38Z

AI-Generated Summary

Purpose of the Legislation

The CLEAR Skies Act (H.R. 2932) aims to reduce lead exposure in aviation by incentivizing the production and use of unleaded aviation gasoline (avgas). It establishes a temporary tax credit to encourage U.S. producers to make and sell lead-free avgas that meets safety standards, supporting a shift away from traditional leaded fuel in general aviation.

Key Provisions

• Tax Credit for Production (Section 45BB of the Internal Revenue Code):
• Provides a credit for each gallon of qualified unleaded avgas produced and sold in the U.S., calculated as the number of gallons times a decreasing rate: $1.25 per gallon in 2026, dropping to $1.05 per gallon in 2030.
• Qualified avgas must be:
• Defined under federal regulations (10 CFR 436.101) as aviation fuel.
• Free of tetra-ethyl-lead (a toxic additive in traditional avgas).
• Produced in the U.S. and transferred to an aircraft's fuel tank in the U.S.
• Compliant with Federal Aviation Administration (FAA) safety standards (49 U.S.C. § 44714).
• Sales must be to an unrelated party for business use or retail fueling of aircraft.
• Producers must register with the IRS (under section 4101) and certify the fuel's qualifications, with guidance from the IRS and Department of Transportation (DOT).
• The credit is part of the general business credit (section 38) and applies to fuel sold after December 31, 2025, ending for sales after December 31, 2030.
• GAO Study and Report (Section 3):
• Requires the Government Accountability Office (GAO) to study unleaded avgas prices, including comparisons to leaded avgas, cost drivers (e.g., research, refining, transport), whether the tax credit lowers end-user prices, recommendations for credit improvements, and market share projections for unleaded fuel.
• GAO must report findings to Congress within one year of enactment.

Significant Changes to Existing Law

• Adds a new section (45BB) to the Internal Revenue Code for this specific production credit, integrating it into the general business credit framework.
• Expands IRS registration requirements (section 4101) to include unleaded avgas producers, similar to biofuel producers.
• Clarifies that qualified unleaded avgas is taxed like regular avgas (section 4081), ensuring consistent fuel excise tax treatment.
• These are the first targeted federal tax incentives for unleaded avgas production, building on existing FAA standards but adding economic support through the tax code.

Potential Impacts

• On Government Agencies: The IRS and DOT must issue regulations within 180 days of enactment to implement the credit and certifications, increasing administrative workload. The GAO study may inform future policy adjustments. No direct international relations impacts, as the credit is limited to U.S.-produced fuel.
• On Citizens: Promotes public health by reducing lead exposure from aircraft emissions, especially benefiting communities near airports. General aviation users (e.g., small plane pilots) may see lower fuel costs if savings are passed on, aiding the transition from leaded fuel.
• On Industry: Encourages faster development and adoption of unleaded avgas, potentially lowering production costs for compliant fuel and stimulating market growth, but the credit's phase-out by 2030 could pressure long-term innovation.

Main Stakeholders Affected

• Aviation Fuel Producers: Primary beneficiaries, gaining tax credits to offset costs of developing and refining unleaded avgas.
• Aircraft Owners and Operators: Especially in general aviation (non-commercial flights), who rely on avgas and may face fuel compatibility issues with leaded alternatives.
• Government Entities: IRS (tax administration), DOT/FAA (safety standards and consultations), and GAO (oversight study).
• Public and Environment: Communities exposed to lead pollution from leaded avgas, with indirect benefits from reduced environmental contamination.

Notable Legal, Constitutional, or Political Implications

• Legal: The bill uses the tax code to promote environmental and safety goals without new mandates, avoiding potential challenges under aviation regulations. It relies on existing FAA standards, ensuring compliance with federal fuel safety laws (e.g., 49 U.S.C. § 44714). The temporary nature (ending 2030) limits long-term fiscal commitments.
• Constitutional: Aligns with Congress's taxing and spending powers (Article I, Section 8), as it incentivizes private production rather than regulating it directly. No apparent free speech or due process issues.
• Political: Supports bipartisan environmental priorities (lead reduction) while aiding the aviation sector's economic needs. The GAO study provides accountability, potentially influencing future extensions or modifications based on effectiveness in passing savings to consumers.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Garcia, Robert [D-CA-42]

Cosponsors (1)

Rep. Obernolte, Jay [R-CA-23]

Recent Actions

• 2025-04-17: Referred to the House Committee on Ways and Means.
• 2025-04-17: Introduced in House
• 2025-04-17: Introduced in House

Bill Versions

• Cutting Lead Exposure and Aviation Relief Skies Act — issued 2025-04-17 — PDF (7 pages)