119-s173

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 173 Introduced in Senate

    (IS) ]

<DOC>

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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