Energy Freedom Act

This Act may be cited as the Energy Freedom Act.

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.

The table of contents of this Act is as follows:

Subpart A of part IV of subchapter A of chapter 1 is amended by striking section 25C (and by striking the item relating to such section in the table of sections for such subpart).

(1) Section 1016(a) is amended by striking paragraph (33).

(2) Section 6213(g)(2) is amended by striking subparagraphs (R) and (S).

The amendments made by this section shall apply to property placed in service in taxable years beginning after December 31, 2025.

Subpart A of part IV of subchapter A of chapter 1 is amended by striking section 25D (and by striking the item relating to such section in the table of sections for such subpart).

(1) Section 23(c)(1) is amended by striking and section 25D.

(2) Section 25(e)(1)(C) is amended by striking sections 23 and 25D and inserting section 23.

(3) Section 1016(a) is amended by striking paragraph (34).

The amendments made by this section shall apply to expenditures paid or incurred in taxable years beginning after December 31, 2025.

Subpart A of part IV of subchapter A of chapter 1 is amended by striking section 25E (and by striking the item relating to such section in the table of sections for such subpart).

Section 6213(g)(2) is amended by striking subparagraph (U).

The amendments made by this section shall apply to vehicles acquired after December 31, 2025.

Subpart B of part IV of subchapter A of chapter 1 is amended by striking section 30C (and by striking the item relating to such section in the table of sections for such subpart).

(1) Section 38(b) is amended by striking paragraph (25).

(2) Section 55(c)(3) is amended by striking sections 30C(d)(2) and and inserting section.

(3) Section 1016(a) is amended by striking paragraph (36).

(4) Section 6501(m) is amended by striking 30C(e)(4),.

(5) Section 244(b) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17052(b)) is amended by striking paragraph (6).

The amendments made by this section shall apply to property placed in service after December 31, 2025.

Subpart B of part IV of subchapter A of chapter 1 is amended by striking section 30D (and by striking the item relating to such section in the table of sections for such subpart).

(1) Section 166(b)(5)(A)(ii) of title 23, United States Code, is amended by inserting (as in effect on the day before the enactment of the Energy Freedom Act) after section 30D(d)(1) of the Internal Revenue Code of 1986.

(2) Section 30B(d)(3) is amended by striking subparagraph (D).

(3) Section 38(b) is amended by striking paragraph (30).

(4) Section 1016(a) is amended by striking paragraph (37).

(5) Section 6213(g)(2) is amended by striking subparagraph (T).

(6) Section 6501(m) is amended by striking 30D(f)(6),.

The amendments made by this section shall apply to vehicles placed in service after December 31, 2025.

Section 40 is amended—

(1) in subsection (a)—

(A) in paragraph (2), by adding plus at the end,

(B) in paragraph (3), by striking plus at the end, and

(C) by striking paragraph (4),

(2) in subsection (b)—

(A) in paragraph (4)(C), by striking (determined without regard to any qualified second generation biofuel production), and

(B) by striking paragraph (6),

(3) in subsection (d)—

(A) in paragraph (3)—

(i) by striking subparagraph (D), and

(ii) in subparagraph (E), by striking (C), or (D) and inserting or (C), and

(B) by striking paragraph (6), and

(4) in subsection (e), by striking paragraph (3).

(1) Section 168(l)(2)(A) is amended by inserting (as in effect on the day before the enactment of the Energy Freedom Act) after 40(b)(6)(E).

(2) Section 4101(a)(1) is amended by inserting (as in effect on the day before the enactment of the Energy Freedom Act) after 40(b)(6)(E).

Subpart D of part IV of subchapter A of chapter 1 is amended by striking section 40A (and by striking the item relating to such section in the table of sections for such subpart).

(A) Section 38(b) is amended by striking paragraph (17).

(B) Section 87 is amended—

(i) in paragraph (1), by adding and at the end,

(ii) by striking paragraph (2), and

(iii) by redesignating paragraph (3) as paragraph (2).

(C) Section 196(c) is amended by striking paragraph (11).

(D) Section 4101(a)(1) is amended by inserting (as in effect on the day before the enactment of the Energy Freedom Act) after section 40A(d)(1).

(E) Section 4104(a)(1) is amended by striking 34, 40, and 40A, and inserting 34 and 40.

(F) Section 7704(d)(1)(E) is amended by inserting (as in effect on the day before the enactment of the Energy Freedom Act) after section 40A(d)(1).

Subchapter B of chapter 65 is amended by striking section 6426 (and by striking the item relating to such section in the table of sections for such subpart).

(A) Section 40(c) is amended by striking, section 6426,.

(B) Section 4101(a)(1) is amended by inserting (as in effect on the day before the enactment of the Energy Freedom Act) after section 6426(b)(4)(A).

(C) Section 4104(a)(2) is amended by striking, 6426,.

(D) Section 7704(d)(1)(E) is amended by striking any fuel described in subsection (b), (c), (d), or (e) of section 6426, or any alcohol fuel defined in section 6426(b)(4)(A) and inserting any fuel described in subsection (b), (c), (d), or (e) of section 6426 (as in effect on the day before the enactment of the Energy Freedom Act), or any alcohol fuel defined in section 6426(b)(4)(A) (as in effect on the day before the enactment of the Energy Freedom Act).

(E) Section 9503(b)(1) is amended by striking taxes received under sections 4041 and 4081 shall be determined without reduction for credits under section 6426 and.

Section 6427 is amended—

(A) by striking subsection (e), and

(B) in subsection (i), by striking paragraph (3).

(A) Section 40(c), as amended by subsection (b), is amended by striking or section 6427(e).

(B) Section 4104(a)(2), as amended by subsection (b), is amended by striking or 6427(e).

Subpart D of part IV of subchapter A of chapter 1 is amended by striking section 40B (and by striking the item relating to such section in the table of sections for such subpart).

Section 38(b) is amended by striking paragraph (35).

(1) Section 87, as amended by section 8 of this Act, is amended to read as follows:

Gross income includes the amount of the alcohol fuel credit determined with respect to the taxpayer for the taxable year under section 40(a).

(2) Section 4101(a)(1) is amended by inserting (as in effect on the day before the enactment of the Energy Freedom Act) after section 40B.

The amendments made by this section shall apply to fuel sold or used after December 31, 2025.

Subpart D of part IV of subchapter A of chapter 1 is amended by striking section 45 (and by striking the item relating to such section in the table of sections for such subpart).

(1) Section 38 is amended—

(A) in subsection (b), by striking paragraph (8), and

(B) in subsection (c)(4)(B), by striking clauses (iv) and (v).

(2) Section 45J is amended—

(A) in subsection (c)(2)(A)(i), by inserting (as in effect on the day before the date of enactment of the Energy Freedom Act) after 45(e)(2)(C),

(B) in subsection (c)(2)(B), by inserting (as in effect on the day before the date of enactment of the Energy Freedom Act) after 45(e)(2)(B), and

(C) in subsection (f), by inserting (as in effect on the day before the date of enactment of the Energy Freedom Act) after section 45(e).

(3) Section 45K(g)(2) is amended by striking subparagraph (E).

(4) Section 55(c)(1) is amended by striking 45(e)(11)(C),.

(5) Section 59A(b)(4) is amended—

(A) in subparagraph (A), by adding and at the end,

(B) by striking subparagraph (B), and

(C) by redesignating subparagraph (C) as subparagraph (B).

The amendments made by this section shall apply to electricity produced in taxable years beginning after December 31, 2025.

Subpart D of part IV of subchapter A of chapter 1 is amended by striking section 45L (and by striking the item relating to such section in the table of sections for such subpart).

(1) Section 38(b) is amended by striking paragraph (23).

(2) Section 196(c) is amended by striking paragraph (13).

(3) Section 1016(a) is amended by striking paragraph (32).

The amendments made by this section shall apply to homes acquired after December 31, 2025.

Subpart D of part IV of subchapter A of chapter 1 is amended by striking section 45Q (and by striking the item relating to such section in the table of sections for such subpart).

(1) Section 38(b) is amended by striking paragraph (29).

(2) Section 142(o)(1)(B) is amended by inserting (as in effect on the day before the enactment of the Energy Freedom Act) after section 45Q(e)(3).

(3) Section 969D(e)(4)(B)(ii)(II)(cc) of the Energy Policy Act of 2005 (42 U.S.C. 16298d(e)(4)(B)(ii)(II)(cc)) is amended by inserting (as in effect on the day before the date of enactment of the Energy Freedom Act) after section 45Q(f)(5).

The amendments made by this section shall apply to facilities or equipment placed in service after December 31, 2025.

Subpart D of part IV of subchapter A of chapter 1 is amended by striking section 45U (and by striking the item relating to such section in the table of sections for such subpart).

Section 38(b) is amended by striking paragraph (34).

The amendments made by this section shall apply to electricity produced and sold after December 31, 2025, in taxable years beginning after such date.

Subpart D of part IV of subchapter A of chapter 1 is amended by striking section 45V (and by striking the item relating to such section in the table of sections for such subpart).

Section 38(b) is amended by striking paragraph (36).

The amendments made by this section shall apply to hydrogen produced after December 31, 2025.

Subpart D of part IV of subchapter A of chapter 1 is amended by striking section 45W (and by striking the item relating to such section in the table of sections for such subpart).

(1) Section 38(b) is amended by striking paragraph (37).

(2) Section 6213(g)(2) is amended by striking subparagraph (V).

The amendments made by this section shall apply to vehicles acquired after December 31, 2025.

Subpart D of part IV of subchapter A of chapter 1 is amended by striking section 45X (and by striking the item relating to such section in the table of sections for such subpart).

Section 38(b) is amended by striking paragraph (38).

The amendments made by this section shall apply to components produced and sold after December 31, 2025.

Subpart D of part IV of subchapter A of chapter 1 is amended by striking section 45Y (and by striking the item relating to such section in the table of sections for such subpart).

(1) Section 38(b), as amended by Public Law 117–169, is amended by striking paragraph (39).

(2) Section 168(e)(3)(B)(viii), as added by Public Law 117–169, is amended by striking any qualified facility (as defined in section 45Y(b)(1)(A)),.

The amendments made by this section shall apply to facilities placed in service after December 31, 2025.

Subpart D of part IV of subchapter A of chapter 1 is amended by striking section 45Z (and by striking the item relating to such section in the table of sections for such subpart).

(1) Section 38(b), as amended by Public Law 117–169, is amended by striking paragraph (40).

(2) Section 4101(a)(1), as amended by Public Law 117–169, is amended by striking every person producing a fuel eligible for the clean fuel production credit (pursuant to section 45Z),.

The amendments made by this section shall apply to transportation fuel produced after December 31, 2025.

Subpart E of part IV of subchapter A of chapter 1 is amended by striking section 48 (and by striking the item relating to such section in the table of sections for such subpart).

(1) Section 38(c)(4)(B) is amended by striking clause (x).

(2) Section 45K(b)(3)(A)(i)(III) is amended by inserting (as in effect on the day before the date of enactment of the Energy Freedom Act) after section 48(a)(4)(C).

(3) Section 46 is amended by striking paragraph (2).

(4) Section 48A(b)(2) is amended by inserting as in effect on the day before the enactment of the Energy Freedom Act and before without regard.

(5) Section 48B(b)(2) is amended by inserting as in effect on the day before the enactment of the Energy Freedom Act and before without regard.

(6) Section 50 is amended—

(A) in subsection (a)(2)(E), by striking 48(b), and

(B) in subsection (d)(2), by striking At the election and all that follows through the period.

(7) Section 59A(b)(4) is amended—

(A) in subparagraph (A), by adding and at the end,

(B) in subparagraph (B), by striking, and and inserting a period at the end, and

(C) by striking subparagraph (C).

(8) Section 168(e)(3)(B)(vi)(I) is amended by inserting (as in effect on the day before the enactment of the Energy Freedom Act) after section 48(a)(3).

(9) Section 7701(e) is amended—

(A) in paragraph (3)—

(i) in subparagraph (A)(i)—

(I) in subclause (II), by adding or at the end,

(II) in subclause (III), by striking or and inserting and, and

(III) by striking subclause (IV), and

(ii) by striking subparagraph (F), and

(B) by striking water treatment works facility, or storage facility and inserting or water treatment works facility.

The amendments made by this section shall apply to property placed in service in taxable years beginning after December 31, 2025.

Subpart E of part IV of subchapter A of chapter 1 is amended by striking section 48C (and by striking the item relating to such section in the table of sections for such subpart).

(1) Section 46 is amended by striking paragraph (5).

(2) Section 49(a)(1)(C) is amended by striking clause (v).

(3) Section 50(a)(2)(E) is amended by striking 48C(b)(2),.

The amendments made by this section shall take effect on January 1, 2026.

Subpart E of part IV of subchapter A of chapter 1 is amended by striking section 48E (and by striking the item relating to such section in the table of sections for such subpart).

(1) Section 46, as amended by Public Law 117–169 and section 20 of this Act, is amended—

(A) in paragraph (4), by adding and at the end,

(B) in paragraph (6), by striking, and and inserting a period, and

(C) by striking paragraph (7).

(2) Section 49(a)(1)(C), as amended by Public Law 117–169, is amended—

(A) by adding and at the end of clause (iv),

(B) by striking the comma at the end of clause (vi) and inserting a period, and

(C) by striking clauses (vii) and (viii).

(3) Section 50(a)(2)(E), as amended by Public Law 117–169, is amended by striking 48D(b)(5), or 48E(e) and inserting or 48D(b)(5).

(4) Section 50(c)(3), as amended by Public Law 117–169, is amended by striking or clean electricity investment credit.

(5) Section 168(e)(3)(B), as amended by Public Law 117–169 and section 17 of this Act, is amended by striking clause (viii).

The amendments made by this section shall apply to facilities and property placed in service after December 31, 2025.

Part VI of subchapter B of chapter 1 is amended by striking section 179D (and by striking the item relating to such section in the table of sections for such part).

(1) Section 263(a)(1) is amended by striking subparagraph (J).

(2) Section 312(k)(3)(B) is amended to read as follows:

For purposes of computing the earnings and profits of a corporation, any amount deductible under section 179, 179B, 179C, or 179E shall be allowed as a deduction ratably over the period of 5 taxable years (beginning with the taxable year for which such amount is deductible under section 179, 179B, 179C, or 179E, as the case may be).

(3) Section 1016(a) is amended by striking paragraph (31).

(4) Section 1245(a) is amended—

(A) in paragraph (2)(C), by striking 179D,, and

(B) in paragraph (3)(C), by striking 179D,.

The amendments made by this section shall apply to property placed in service after December 31, 2025.

Chapter 38 is amended by striking subchapter A (and by striking the item relating to such subchapter in the table of subchapters for such chapter).

(1) Section 4671(c) is amended to read as follows:

No tax shall be imposed by this section on the sale or use of any substance if tax is imposed on such sale or use under section 4661.

(2) Section 9507(b) is amended—

(A) in paragraph (1), by striking 4611, 4661, and inserting 4661, and

(B) by striking the flush matter at the end.

(3) Section 9509(b) is amended by striking paragraph (1).

(4) Section 198(d)(1)(C) is amended by inserting (as in effect on the day before the enactment of the Energy Freedom Act) after section 4612(a)(3).

(5) Section 4132(a)(3) is amended by inserting (as in effect on the day before the enactment of the Energy Freedom Act) after section 4612(a)(4).

(6) Section 4662(a)(2) is amended by inserting (as in effect on the day before the enactment of the Energy Freedom Act) after section 4612(a)(4).

(7) Section 4682(e)(2) is amended by inserting (as in effect on the day before the enactment of the Energy Freedom Act) after section 4612(a)(4).

(8) Section 5000D(e)(2) is amended by inserting (as in effect on the day before the enactment of the Energy Freedom Act) after section 4612(a)(4).

The amendments made by this section shall take effect on January 1, 2026.

Subchapter B of chapter 65 is amended by striking sections 6417 and 6418 (and by striking the items relating to such sections in the table of sections for such subchapter).

(1) Section 39(a) is amended by striking paragraph (4).

(2) Section 50(d) is amended by striking In the case of a real estate investment trust making an election under section 6418, paragraphs (1)(B) and (2)(B) of the section 46(e) referred to in paragraph (1) of this subsection shall not apply to any investment credit property of such real estate investment trust to which such election applies.

(3) Section 56A(c)(9) is amended by striking or 6417.

(4) Section 13801 of Public Law 117–169 is amended by striking subsection (f).

The amendments made by this section shall apply to taxable years beginning after December 31, 2025.