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119-s-1188119th CongressWALLET

FLARE Act

Sponsored By: Senator Cruz, Ted [R-TX]

Introduced

Summary

Would permanently let companies fully expense systems that capture or repurpose gas from flaring and venting. It would allow 100 percent expensing for eligible property placed in service after December 31, 2025.

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  • Oil and gas operators would face lower after-tax costs for installing mitigation systems, making projects to compress, liquefy, or convert gas to fuel, petrochemicals, or electricity more financially attractive.
  • Data centers and digital-asset miners would be able to use captured gas for on-site power or computation because the rule lists conversion to electricity and computational power as eligible uses.
  • Property placed in service by foreign entities of concern would not qualify for the expensing rule, blocking that tax benefit for those firms.

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Bill Overview

Analyzed Economic Effects

1 provisions identified: 1 benefits, 0 costs, 0 mixed.

100% expensing for flare systems

If enacted, businesses that install qualifying flaring and venting mitigation systems after December 31, 2025 would be able to deduct 100% of the system cost in the year placed in service. Qualifying systems must intake natural gas and separate, collect, use, or combust methane and heavier hydrocarbons by one or more listed uses: compressing or liquefying for fuel or transport; making petrochemicals or fertilizer; converting to liquid fuels; converting to electricity for equipment or the grid; converting to computational power; mining digital assets; or powering oilfield equipment. The bill would treat these systems as "applicable energy property" and set the expensing percentage at 100% (so the usual paragraph (8) limit would not apply). The break would not apply to property placed in service by a "foreign entity of concern" (see 42 U.S.C. 19221(a)). This would lower taxable income in the year of installation and cut that year's federal tax bill; to estimate savings, multiply the system cost by your marginal federal tax rate.

Sponsors & CoSponsors

Sponsor

Cruz, Ted [R-TX]

TX • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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