Restoring Fuel Market Freedom Act of 2023

To amend the Internal Revenue Code of 1986 to repeal the alcohol fuels credit, the biodiesels fuel credit, the sustainable aviation fuel credit, the clean fuel production credit, the alcohol fuel, biodiesel, and alternative fuel mixtures credit, and other related provisions. 1. Short title This Act may be cited as the Restoring Fuel Market Freedom Act of 2023 2. Amendment of 1986 Code Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. 3. Repeal of Alcohol fuels credit (a) In general Section 40 (b) Conforming amendments (1) Section 25C(d)(3)(B) , as in effect on the day before the date of the enactment of the Restoring Fuel Market Freedom Act of 2023 section 40 (2) Section 38(b) (3) Section 168(l)(2)(A) as in effect on the day before the date of the enactment of the Restoring Fuel Market Freedom Act of 2023 section 40(b)(6)(E) (4) Section 196(c) (5) Section 4101(a)(1) , and every person producing second generation biofuel (as defined in section 40(b)(6)(E)) (6) Section 4014(a)(1) , 40, (c) Clerical Amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 of subtitle A is amended by striking the item relating to section 40. (d) Effective date The amendments made by this section shall apply to fuels produced after the date of the enactment of this section. 4. Repeal of biodiesels fuel credit (a) In general Section 40A (b) Conforming amendments (1) Section 25C(d)(3)(A) is further amended by inserting , as in effect on the day before the date of the enactment of the Restoring Fuel Market Freedom Act of 2023 section 40A (2) Section 30C(C)(1)(B)(ii)(I) (as in effect on the day before the date of the enactment of the Restoring Fuel Market Freedom Act of 2023 section 40A(d)(1) (3) Section 38(b) is further amended by striking paragraph (17). (4) Section 196(c) is further amended by striking paragraph (11). (5) Section 4101(a)(1) is further amended by striking , every person producing or importing biodiesel (as defined in section 40A(d)(1)) (6) Section 4104(a)(1) is further amended— (A) by striking sections section (B) by striking and 40A, (7) Section 7704(d)(1)(E) , as in effect on the day before the date of the enactment of the Restoring Fuel Market Freedom Act of 2023 40A(d)(1) (c) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 of subtitle A is amended by striking the item relating to section 40A. (d) Effective date The amendments made by this section shall apply to fuels sold or used after the date of the enactment of this section. 5. Repeal of sustainable aviation fuel credit (a) In general Section 40B (b) Conforming amendments (1) Section 38(b) is further amended by striking paragraph (35). (2) Section 4101(a)(1) is further amended by striking , every person producing or importing sustainable aviation fuel (as defined in section 40B) (c) Clerical Amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 of subtitle A is amended by striking the item relating to section 40. (d) Effective date The amendments made by this section shall apply to fuel sold or used after the date of the enactment of this section. 6. Repeal of specific inclusion of alcohol and biodiesel fuel credits in gross income (a) In general Section 87 (b) Conforming amendments Section 56(a) (c) Clerical amendment The table of sections for part II of subchapter B of chapter 1 of subtitle A is amended by striking the item relating to section 87. (d) Effective date The amendments made by this section shall apply to fuel sold or used after the date of the enactment of this section. 7. Repeal of clean fuel production credit (a) In general Section 45Z (b) Conforming amendments Section 13704 of Public Law 117–169 (c) Clerical Amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 (d) Effective date The amendments made by this section shall apply to transportation fuels produced after the date of the enactment of this section. 8. Repeal of alcohol fuel, biodiesel, and alternative fuel mixtures credit (a) In general Section 6426 (b) Conforming amendments (1) Section 4101(a)(1) is further amended by striking or alcohol (as defined in section 6426(b)(4)(A)) (2) Section 4104(a)(2) is further amended by striking , 6426, (3) Section 7704(d)(1)(E), as amended by section 4(b)(7), is further amended by inserting such sections were , as (4) Section 9503(b)(1) credits under section 6426 (c) Clerical Amendment The table of sections for subchapter B of chapter 65 of subtitle F is amended by striking the item relating to section 6426. (d) Effective date The amendments made by this section shall apply to fuel used or sold after the date of the enactment of this section. 9. Repeal of payments for certain fuels not used for taxable purposes (a) In general Section 6427 (b) Conforming amendments (1) Section 34 (A) in subsection (a), by inserting and , and (B) in subsection (b)— (i) by striking or 6427, (ii) by striking or 6427(k) (2) Section 4007(b) of the CARES Act ( 15 U.S.C. 9046(b) (b) Use of Kerosene in Commercial Aviation In the case of kerosene used in commercial aviation (as defined in section 4083 (1) section 4041(c) (2) section 4081 of such Code (other than at the rate provided in subsection (a)(2)(B) thereof). . (3) Section 4041 is further amended by adding at the end the following new subsection: (n) References to section 6427 Each reference to section 6427 in this section shall be applied as such section was in effect on the date of the enactment of the Restoring Fuel Market Freedom Act of 2023 . (4) Section 4081(c) (or with respect to which a credit or payment was allowed or made by reason of section 6427) (5) Section 4082(d)(2) (2) Wholesale distributors To the extent provided in regulations, subsection (a)(2) shall not apply to kerosene received by a wholesale distributor of kerosene if such distributor is registered under section 4101 with respect to the tax imposed by section 4081 on kerosene. . (6) Section 4084 (7) Section 4041(a)(2) is further amended by striking or 6427(e) (8) Section 6206 (A) by striking section 6420, 6421, or 6427 section 6420 or 6421 (B) by striking or 4081 (with respect to payments under section 6427) (C) by striking section 6416(a)(4), 6420, 6421, or 6427, section 6416(a)(4), 6420, or 6421, (9) Section 6416(a)(4)(C) (as such section was in effect on the date of the enactment of the Restoring Fuel Market Freedom Act of 2023 section 6427(i)(4) (10) Section 6421(d) (11) Section 6504(8) section 6420, 6421, or 6427 section 6420 or 6421 (12) Section 6675(b)(1) section 6416(a)(4), 6420, 6421, or 6427, section 6416(a)(4), 6420, or 6421, (13) Section 7210 6427(j)(2), (14) Section 7603 6427(j)(2), (15) Section 7604 6427(j)(2), (16) Section 7605 (A) by striking , 6427(j)(2) (B) by striking section 6420(e)(2), 6421(g)(2), or 6427(j)(2) section 6420(e)(2) or 6421(g)(2) (17) Section 7609 6427(j)(2), (18) Section 7610 6427(j)(2), (19) Section 9502(d) (A) in paragraph (2), by striking , 6421 (relating to amounts paid in respect of gasoline used for certain nonhighway purposes), or 6427 (relating to fuels not used for taxable purposes) (other than subsection (l)(4) thereof) or 6421 (relating to amounts paid in respect of gasoline used for certain nonhighway purposes) (B) in paragraph (3), by striking (other than payments made by reason of paragraph (4) of section 6427(l)) (20) Section 9503(c) (c) Effective date The amendments made by this section shall apply to fuel sold or used after the date of the enactment of this section.

Summary: Restoring Fuel Market Freedom Act of 2023 This bill repeals various alternative fuels tax credits, including the tax credits for (1) alcohol used as fuel; (2) biodiesel and renewable diesel used as fuel; (3) sustainable aviation fuel; (4) clean fuel production; and (5) alcohol fuel, biodiesel, and alternative fuel mixtures. It also repeals the inclusion in gross income of alcohol and biodiesel fuels and payments for certain fuels not used for taxable purposes.