[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 173 Introduced in Senate (IS)]
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119th CONGRESS
1st Session
S. 173
To amend the Internal Revenue Code of 1986 to increase excise taxes on
fuel used by private jets, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 21, 2025
Mr. Markey (for himself, Mr. Murphy, Mr. Merkley, Mr. Sanders, Ms.
Warren, and Mr. Whitehouse) introduced the following bill; which was
read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to increase excise taxes on
fuel used by private jets, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fueling Alternative Transportation
with a Carbon Aviation Tax Act of 2025''.
SEC. 2. INCREASE IN EXCISE TAX FOR FUEL USED BY PRIVATE JETS.
(a) In General.--
(1) Retail excise tax.--Section 4041(c) of the Internal
Revenue Code of 1986 is amended by striking paragraph (3) and
inserting the following:
``(3) Rate of tax.--The rate of tax imposed by this
subsection shall be--
``(A) with respect to any sale or use for
commercial aviation, 4.3 cents per gallon, and
``(B) with respect to any sale or use which is not
described in subparagraph (A), an amount equal to the
sum of--
``(i) 35.9 cents per gallon, plus
``(ii) $1.641 per gallon.
``(4) Inflation adjustment.--In the case of any calendar
year beginning after 2026, the dollar amount in paragraph
(3)(B)(ii) shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year, determined
by substituting `calendar year 2025' for `calendar year
2016' in subparagraph (A)(ii) thereof.''.
(2) Manufacturers excise tax.--Section 4081(a)(2) of such
Code is amended--
(A) in subparagraph (C), by striking clause (ii)
and inserting the following:
``(ii) in the case of use for aviation not
described in clause (i), an amount equal to the
sum of--
``(I) 35.9 cents per gallon, plus
``(II) $1.641 per gallon.'', and
(B) by adding at the end the following:
``(E) Inflation adjustment.--In the case of any
calendar year beginning after 2026, the dollar amount
in subparagraph (C)(ii)(II) shall be increased by an
amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year, determined by substituting
`calendar year 2025' for `calendar year 2016'
in subparagraph (A)(ii) thereof.''.
(3) Conforming amendments.--
(A) Section 4081(d)(2) of such Code is amended by
striking ``(a)(2)(C)(ii)'' and inserting
``(a)(2)(C)(ii)(I)''.
(B) Section 6427(l)(4)(B)(ii)(II) of such Code is
amended by striking ``section 4081(a)(2)(C)(ii)'' and
inserting ``section 4081(a)(2)(C)(ii)(I)''.
(C) Section 9503(c)(5)(B) of such Code is amended
by striking ``21.8 cents'' and inserting ``35.9
cents''.
(b) Refund or Credit in Cases of Reasonable Cause.--Section 6427 of
the Internal Revenue Code of 1986 is amended by inserting after
subsection (e) the following new subsection:
``(f) Exception From Increase in Rate of Tax for Certain Liquids
Used as Fuel in Non-Commercial Aviation.--
``(1) Retail excise tax.--Except as provided in subsection
(k), in the case of any fuel on the sale of which tax was
imposed under section 4041(c) for which the rate of tax was
determined under paragraph (3)(B) of such section, if the
Secretary determines (pursuant to such regulations as are
prescribed by the Secretary) that there is reasonable cause
that the increase in the rate of tax pursuant to clause (ii) of
such paragraph should not apply with respect to such fuel (such
as in cases where the fuel was used in an aircraft which was
engaged in scientific research, an evacuation from a natural
disaster, or assistance in a medical emergency), the Secretary
shall pay (without interest) to the ultimate purchaser of such
fuel an amount equal to the increase in the amount of the tax
imposed on such fuel pursuant to such clause.
``(2) Manufacturers excise tax.--Except as provided in
subsection (k), in the case of any kerosene on which tax was
imposed under section 4081 for which the rate of tax was
determined under subsection (a)(2)(C)(ii) of such section, if
the Secretary determines (pursuant to such regulations as are
prescribed by the Secretary) that there is reasonable cause
that the increase in the rate of tax pursuant to subclause (II)
of such subsection should not apply with respect to such
kerosene (such as in cases where the kerosene was used in an
aircraft which was engaged in scientific research, an
evacuation from a natural disaster, or assistance in a medical
emergency), the Secretary shall pay (without interest) to the
ultimate purchaser of such kerosene an amount equal to the
increase in the amount of the tax imposed on such kerosene
pursuant to such subclause.
``(3) Termination.--This subsection shall not apply to any
fuel sold or used after January 1, 2028.''.
(c) Elimination of Exemption From Air Transportation Excise Tax.--
Section 4261(f) of the Internal Revenue Code of 1986 is amended to read
as follows:
``(f) Exemption for Certain Uses.--
``(1) In general.--No tax shall be imposed under subsection
(a) or (b) on air transportation by helicopter or by fixed-wing
aircraft for the purpose of the planting, cultivation, cutting,
or transportation of, or caring for, trees.
``(2) Requirement.--Paragraph (1) shall apply only if the
helicopter or fixed-wing aircraft does not take off from, or
land at, a facility eligible for assistance under the Airport
and Airway Development Act of 1970, or otherwise use services
provided pursuant to section 44509 or 44913(b) or subchapter I
of chapter 471 of title 49, United States Code, during such
use.''.
(d) Effective Date.--The amendments made by this section shall take
effect on January 1, 2026.
SEC. 3. FUNDING TO SUPPORT CLEAN COMMUNITIES TRUST FUND.
(a) In General.--Subchapter A of chapter 98 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new section:
``SEC. 9512. FUNDING TO SUPPORT CLEAN COMMUNITIES TRUST FUND.
``(a) Establishment and Funding.--There is hereby established in
the Treasury of the United States a trust fund to be referred to as the
`Funding to Support Clean Communities Trust Fund', consisting of such
amounts as may be appropriated or credited to such trust fund as
provided for in this section and section 9602(b).
``(b) Transfers to Trust Fund.--There are hereby appropriated to
the Funding to Support Clean Communities Trust Fund amounts equivalent
to the taxes received in the Treasury under--
``(1) section 4041(c) to the extent attributable to the
rate specified in paragraph (3)(B)(ii) of such section, and
``(2) section 4081 with respect to kerosene to the extent
attributable to the rate specified in section
4081(a)(2)(C)(ii)(II).
``(c) Expenditures From Trust Fund.--
``(1) In general.--Subject to paragraph (2), amounts in the
Funding to Support Clean Communities Trust Fund shall be
available, as provided by appropriation Acts, for making
expenditures for grants and other activities--
``(A) authorized under subsections (a) through (c)
of section 103 and section 105 of the Clean Air Act (42
U.S.C. 7403(a)-(c), 7405), including grants and other
activities to--
``(i) deploy, integrate, support, and
maintain fenceline air monitoring, screening
air monitoring, national air toxics trend
stations, and other air toxics and community
monitoring,
``(ii) expand the national ambient air
quality monitoring network with new
multipollutant monitoring stations,
``(iii) replace, repair, operate, and
maintain existing monitors, and
``(iv) deploy, integrate, and operate air
quality sensors in low-income and disadvantaged
communities,
``(B) to expand, connect, replace, repair, operate,
and maintain public transit and passenger rail
infrastructure or systems that are located 20 miles or
less from an airport, and
``(C) to improve public transportation,
particularly in disadvantaged communities, including
costs associated with efforts to provide more safe,
frequent, and reliable bus service.
``(2) Set aside for disadvantaged communities.--
``(A) In general.--For any calendar year, not less
than 50 percent of the amounts made available under
paragraph (1) shall be designated for expenditures for
grants and other activities within disadvantaged
communities.
``(B) Prioritization of funds for communities
disproportionally impacted by air pollution.--With
respect to making expenditures for grants and other
activities described in paragraph (1) to disadvantaged
communities, priority shall be given to communities
that are disproportionately impacted by air pollution
(as determined by the Secretary in consultation with
the Administrator of the Environmental Protection
Agency).
``(d) Disadvantaged Community.--For purposes of this section--
``(1) In general.--The term `disadvantaged community' means
a community with significant representation of low-income
communities or socially disadvantaged groups (as defined in
section 2501(a) of the Food, Agriculture, Conservation, and
Trade Act of 1990 (7 U.S.C. 2279(a))) that experiences or is at
risk of experiencing higher or more adverse human health or
environmental effects.
``(2) Low-income community.--For purposes of paragraph (1),
the term `low-income community' means any census block group in
which 30 percent or more of the population are individuals with
an annual household income equal to, or less than, the greater
of--
``(A) an amount equal to 80 percent of the median
income of the area in which the household is located,
as reported by the Department of Housing and Urban
Development, and
``(B) 200 percent of the Federal poverty line.''.
(b) Conforming Amendments to Airport and Airway Trust Fund.--
Section 9502(b)(1) of the Internal Revenue Code of 1986 is amended--
(1) in subparagraph (A), by inserting ``to the extent
attributable to the rates specified in subparagraphs (A) and
(B)(i) of section 4041(c)(3),'' after ``(relating to aviation
fuels),'', and
(2) in subparagraph (D), by striking ``rate specified in''
and inserting ``rates specified in clauses (i) and (ii)(I)
of''.
(c) Clerical Amendment.--The table of sections for subchapter A of
chapter 98 of the Internal Revenue Code of 1986 is amended by adding at
the end the following new item:
``Sec. 9512. Funding to Support Clean Communities Trust Fund.''.
(d) Effective Date.--The amendments made by this section shall take
effect on January 1, 2026.
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