End Polluter Welfare Act of 2025

Bill Number

H.R. 4714

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-07-23: Referred to the Committee on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, Natural Resources, Science, Space, and Technology, Energy and Commerce, Agriculture, Appropriations, Financial Services, and Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Last Updated

2026-04-03T21:33:32Z

AI-Generated Summary

Summary of H.R. 4714: End Polluter Welfare Act of 2025

Purpose

This legislation aims to eliminate various federal subsidies, tax incentives, and financial supports for the production and use of fossil fuels, defined as coal, petroleum, natural gas, or their fuel derivatives. By doing so, it seeks to reduce government spending on fossil fuel industries, increase revenue through higher royalties and taxes, and redirect resources away from activities contributing to climate change.

Key Provisions

The bill is structured into four titles, targeting direct subsidies, tax benefits, recent laws, and additional hidden supports.

Title I: Elimination of Fossil Fuel Subsidies

• Definition: Establishes "fossil fuel" as coal, petroleum, natural gas, or derivatives used for fuel.
• Royalty and Leasing Changes: Ends royalty relief (reductions in payments to the government for extracting resources on federal lands); increases royalty rates under the Mineral Leasing Act from 12.5% or 16.67% to 18.75% for coal, oil, and gas leases; sets a fixed 18.75% offshore royalty rate.
• Liability and Payments: Eliminates interest payments on overpaid royalties; removes liability caps for offshore facilities and pipelines under the Oil Pollution Act (making companies fully responsible for spill damages, except for certain onshore facilities).
• Funding Restrictions: Prohibits U.S. funds to international financial institutions (e.g., World Bank) for fossil fuel projects; rescinds unobligated funds if used for such support. Terminates or restricts Department of Energy (DOE) offices and programs, including the Office of Fossil Energy and Carbon Management, Loan Programs Office (except for clean hydrogen), Advanced Research Projects Agency-Energy funding for fossil fuels, and incentives for innovative fossil fuel technologies. Bans USDA assistance for carbon capture systems and Rural Utility Service loans for fossil fuel projects.
• Other Bans: Prohibits transportation funds for fossil fuel transport projects; removes exemptions for large lenders under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), holding them accountable as owners/operators for cleanup costs.

Title II: Amendments to the Internal Revenue Code of 1986

• Termination of Tax Benefits: Ends numerous tax expenditures for fossil fuels after enactment, including credits for enhanced oil recovery, marginal wells, and renewable electricity from refined coal; deductions for pollution control, sulfur regulations, and mining reclamation; special rules for inventory (last-in, first-out method) and working interests in oil/gas properties.
• Amortization and Depreciation Changes: Requires 7-year (84-month) amortization for geological/geophysical expenses, development/mining exploration costs, intangible drilling costs for oil/gas wells, and tertiary injectant expenses (previously shorter periods or immediate deductions).
• Repeals and Increases: Repeals percentage depletion for coal and hard minerals; ends capital gains treatment for coal royalties; treats natural gas gathering lines as 15-year property for depreciation; increases excise taxes on coal for the Black Lung Disability Trust Fund (from $1.10 to $1.38 per ton) and oil spill liability funding (to 10 cents per barrel after 2025).
• New Taxes and Restrictions: Imposes a 13% severance tax on crude oil and natural gas from the outer Continental Shelf in the Gulf of Mexico (with credit for federal royalties); denies deductions for oil spill removal costs/damages; applies environmental taxes to synthetic crude oil (e.g., from tar sands); eliminates drawbacks (refunds) on petroleum taxes; treats foreign oil-related income as subpart F income (taxable to U.S. shareholders); repeals exclusions for foreign oil/gas extraction in global intangible low-taxed income calculations.
• Other Modifications: Limits qualified business income deductions, research credits, and like-kind exchanges for fossil fuel activities; modifies foreign tax credit rules for "dual capacity" taxpayers (companies receiving economic benefits from foreign governments); terminates carbon oxide sequestration credit; restricts clean hydrogen production credit to electricity from renewable sources (wind, solar, etc.) produced nearby and recently.

Title III: Repeal of Recent Fossil Fuel Subsidy Legislation

• BUILDER Act Repeal: Removes provisions streamlining environmental reviews for energy projects under the National Environmental Policy Act (NEPA), restoring original requirements for impact statements.
• Inflation Reduction Act Sections: Repeals mandates for offshore oil/gas lease sales and energy security measures favoring fossil fuels.
• One Big Beautiful Bill Act Repeals: Eliminates tax credits/exemptions for metallurgical coal, intangible drilling costs, and income from carbon capture/hydrogen; repeals provisions easing oil/gas leasing, mining, and energy permitting; shortens methane emissions incentives to 2024; removes opt-in fees for faster environmental reviews.
• EPA Rule: Repeals a law disapproving an EPA rule on waste emissions charges for petroleum/natural gas systems, reinstating the rule.

Title IV: Elimination of Other Fossil Fuel Subsidies

• Requires the Secretary of the Treasury (with DOE input) to report to Congress within one year on all remaining federal subsidies (e.g., funding, tax incentives, guarantees) for fossil fuel production not addressed by this act.
• Mandates a separate report on depreciation recovery periods under tax law for fossil fuel assets (e.g., pipelines, refineries); eliminates accelerated depreciation for any identified as subsidies, applying to property placed in service after determination.

Significant Changes to Existing Law

• Royalty Increases: Raises rates across federal leasing laws, potentially adding billions in government revenue but raising costs for extractors.
• Tax Code Overhaul: Terminates or modifies over 20 specific credits, deductions, and rules favoring fossil fuels, shifting from immediate expensing to longer amortization (e.g., 84 months vs. 24 months), and introducing new taxes like the 13% Gulf severance tax.
• Program Terminations: Shuts down or defunds DOE offices/programs supporting fossil fuels/carbon capture; reverses recent laws (e.g., parts of 2022 Inflation Reduction Act and 2025 acts) that expanded leasing or tax breaks.
• Liability Expansion: Removes caps under the Oil Pollution Act, making companies bear full spill costs; includes synthetic oils in environmental taxes.
• International and Funding Bans: First-time prohibitions on U.S. contributions to global institutions for fossil fuel projects; ends transportation funding for fossil fuel infrastructure.

Potential Impacts

• Government Agencies: DOE and USDA face program cuts and rescissions (e.g., unobligated funds clawed back), shifting focus to renewables; Treasury gains from higher royalties/taxes (estimated to reduce deficits); EPA regains authority on emissions rules. Increased administrative burden for tracking new taxes/amortizations.
• Citizens: May lead to higher energy prices due to reduced subsidies, affecting consumers and industries reliant on fossil fuels; potential environmental benefits like lower emissions from curbed production. Taxpayers could see indirect savings from subsidy elimination (fossil fuel subsidies cost ~$20 billion annually pre-bill).
• International Relations: Restricts U.S. funding to multilateral banks/development agencies for fossil fuel projects abroad, potentially straining ties with oil-producing nations or allies; aligns U.S. policy more with global climate goals but could limit influence in energy diplomacy.

Main Stakeholders Affected

• Fossil Fuel Companies (e.g., oil, gas, coal producers): Primary negative impact through lost tax breaks, higher royalties/taxes, and funding bans; increased costs could reduce profitability and investment.
• Environmental and Climate Advocacy Groups: Positive, as it curbs subsidies linked to pollution and emissions.
• Renewable Energy Sector: Indirect benefits from redirected funds (e.g., clean hydrogen exceptions) and policy shift away from fossils.
• U.S. Taxpayers and Low-Income Communities: Mixed; revenue gains could fund public programs, but energy cost hikes may disproportionately affect vulnerable groups near extraction sites.
• International Financial Institutions and Developing Countries: Loss of U.S. support for fossil fuel projects could slow energy access in some regions.
• Workers in Fossil Fuel Industries: Potential job losses from reduced production incentives.

Notable Legal, Constitutional, or Political Implications

• Legal: Could invite lawsuits over retroactive tax changes or contract impairments (e.g., existing leases with royalty relief), potentially raising Takings Clause claims under the Fifth Amendment (government cannot seize property without compensation). New taxes and reporting requirements may require IRS rulemaking to avoid administrative challenges.
• Constitutional: Aligns with Congress's taxing and spending powers (Article I), but international funding restrictions might test treaty obligations or foreign affairs authority.
• Political: Highly partisan; advances progressive climate agenda by targeting "polluter welfare" but opposes energy independence goals of fossil fuel supporters. Repeals of recent laws (e.g., Inflation Reduction Act provisions) signal reversal of bipartisan compromises, likely fueling debates on energy security vs. environmental protection. The required Treasury study ensures ongoing scrutiny, potentially leading to future amendments.

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

Sponsor

Rep. Omar, Ilhan [D-MN-5]

Cosponsors (20)

Rep. Barragán, Nanette Diaz [D-CA-44], Rep. Khanna, Ro [D-CA-17], Rep. Casar, Greg [D-TX-35], Rep. Cohen, Steve [D-TN-9], Rep. Espaillat, Adriano [D-NY-13], Rep. Foushee, Valerie P. [D-NC-4], Rep. Frost, Maxwell [D-FL-10], Rep. Garcia, Robert [D-CA-42], Rep. Jayapal, Pramila [D-WA-7], Rep. McCollum, Betty [D-MN-4], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Ocasio-Cortez, Alexandria [D-NY-14], Rep. Pingree, Chellie [D-ME-1], Rep. Ramirez, Delia C. [D-IL-3], Rep. Scanlon, Mary Gay [D-PA-5], Rep. Schakowsky, Janice D. [D-IL-9], Rep. Tlaib, Rashida [D-MI-12], Rep. Tokuda, Jill N. [D-HI-2], Rep. Torres, Ritchie [D-NY-15], Rep. Watson Coleman, Bonnie [D-NJ-12]

Recent Actions

• 2025-07-23: Referred to the Committee on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, Natural Resources, Science, Space, and Technology, Energy and Commerce, Agriculture, Appropriations, Financial Services, and Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-07-23: Referred to the Committee on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, Natural Resources, Science, Space, and Technology, Energy and Commerce, Agriculture, Appropriations, Financial Services, and Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-07-23: Referred to the Committee on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, Natural Resources, Science, Space, and Technology, Energy and Commerce, Agriculture, Appropriations, Financial Services, and Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-07-23: Referred to the Committee on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, Natural Resources, Science, Space, and Technology, Energy and Commerce, Agriculture, Appropriations, Financial Services, and Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-07-23: Referred to the Committee on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, Natural Resources, Science, Space, and Technology, Energy and Commerce, Agriculture, Appropriations, Financial Services, and Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-07-23: Referred to the Committee on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, Natural Resources, Science, Space, and Technology, Energy and Commerce, Agriculture, Appropriations, Financial Services, and Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-07-23: Referred to the Committee on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, Natural Resources, Science, Space, and Technology, Energy and Commerce, Agriculture, Appropriations, Financial Services, and Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-07-23: Referred to the Committee on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, Natural Resources, Science, Space, and Technology, Energy and Commerce, Agriculture, Appropriations, Financial Services, and Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-07-23: Referred to the Committee on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, Natural Resources, Science, Space, and Technology, Energy and Commerce, Agriculture, Appropriations, Financial Services, and Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-07-23: Introduced in House
• 2025-07-23: Introduced in House

Bill Versions

• End Polluter Welfare Act of 2025 — issued 2025-07-23 — PDF (71 pages)

Related Bills

• S. 2444 (119th Congress)