A bill to temporarily suspend the clean electricity production credit to support the Strategic Petroleum Reserve.

Bill Number

S. 4158

Origin Chamber

Senate

Congress

119th Congress, Session 2

Policy Area

Taxation

Status

Introduced

Latest Action

2026-03-20: Read twice and referred to the Committee on Finance.

Last Updated

2026-04-02T22:52:52Z

AI-Generated Summary

Purpose

This bill aims to temporarily suspend a tax credit for clean electricity production, redirecting the resulting increase in government revenue to fund the Strategic Petroleum Reserve (SPR), a national stockpile of emergency oil supplies maintained by the U.S. Department of Energy.

Key Provisions

• Suspension of Tax Credit: Amends Section 45Y of the Internal Revenue Code (a tax law providing incentives for producing electricity from zero-emission sources like solar, wind, or nuclear) to pause the credit for electricity generated between October 1, 2025, and September 30, 2027 (covering fiscal years 2026 and 2027).
• Revenue Redirect: Requires the Secretary of the Treasury to transfer any additional tax revenue gained from the suspension directly into the SPR Petroleum Account, which funds the acquisition, maintenance, and management of the oil reserve under the Energy Policy and Conservation Act.

Significant Changes to Existing Law

• Introduces a two-year moratorium on the clean electricity production credit, which was established under the Inflation Reduction Act of 2022 to promote renewable energy; this is the first such targeted suspension.
• Creates a direct fiscal link between foregone tax incentives for clean energy and funding for fossil fuel reserves, altering how revenues from environmental tax policies are allocated.

Potential Impacts

• On Government Agencies: Boosts funding for the Department of Energy's SPR operations, potentially allowing for faster replenishment or expansion of oil reserves amid global energy supply concerns; however, it reduces incentives for the Internal Revenue Service to process clean energy tax claims during the suspension period.
• On Citizens and Businesses: Clean energy producers (e.g., solar farms or wind turbine operators) lose a key financial incentive, which could slow investments in renewable projects and raise energy costs indirectly; consumers might see stabilized oil prices if SPR funding improves energy security.
• On International Relations: Strengthens U.S. energy independence by supporting oil reserves, which could influence negotiations with oil-producing nations or responses to global supply disruptions, but may draw criticism from allies focused on climate goals.

Main Stakeholders Affected

• Clean Energy Industry: Developers, utilities, and manufacturers of renewable technologies face reduced profitability and potential project delays.
• Oil and Energy Sector: Benefits from enhanced SPR funding, aiding refiners and importers by mitigating supply risks.
• Taxpayers and Government: U.S. Treasury gains short-term revenue, but long-term clean energy adoption may be hindered, affecting federal budget priorities.
• Environmental Groups: Likely oppose the suspension as it undermines efforts to reduce carbon emissions.

Notable Legal, Constitutional, or Political Implications

• Legal: Relies on Congress's authority under the Taxing and Spending Clause of the Constitution to modify tax credits; the amendment is straightforward but could face challenges if seen as retroactively affecting ongoing projects.
• Constitutional: No direct conflicts, as it involves fiscal policy rather than individual rights, though it raises questions about balancing environmental incentives with national security needs.
• Political: Highlights tensions between climate action and energy security; as a Senate-introduced bill referred to the Finance Committee, it may spark partisan debate, with Republicans potentially favoring SPR support and Democrats emphasizing clean energy transitions.

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

Sponsor

Sen. Cotton, Tom [R-AR]

Recent Actions

• 2026-03-20: Read twice and referred to the Committee on Finance.
• 2026-03-20: Introduced in Senate

Bill Versions

• To temporarily suspend the clean electricity production credit to support the Strategic Petroleum Reserve. — issued 2026-03-20 — PDF (2 pages)