H.R. 313 repeals Section 136 of the Clean Air Act (42 U.S.C. 7436), the statutory authority that created a methane emissions and waste‑reduction incentive program targeted at petroleum and natural gas systems. The bill also rescinds any unobligated balance of funds made available under that provision as of the day before enactment.
This is a surgical statutory rollback: it eliminates the federal incentive mechanism Congress authorized under Section 136 and withdraws unspent funds tied to that authority. The change matters to the EPA’s program toolbox, operators in the oil and gas sector who either received or planned to seek payments under the program, states that coordinated with federal incentives, and anyone tracking federal budgetary controls and emissions‑reduction policy instruments.
At a Glance
What It Does
The bill repeals 42 U.S.C. 7436 (Clean Air Act Section 136), removing the statutory authority for a methane emissions and waste‑reduction incentive program for petroleum and natural gas systems. It also rescinds the unobligated balance of amounts that were made available under that section as of the day before enactment.
Who It Affects
Directly affected parties include the Environmental Protection Agency (as the implementing agency), petroleum and natural gas operators that participated in or planned to use the incentive program, states and localities that coordinated with federal funding, and vendors of emissions‑reduction equipment and services.
Why It Matters
Repealing the statutory authority prevents future incentive payments under Section 136 and withdraws unspent appropriations tied to it, altering federal levers for methane reduction without changing other Clean Air Act obligations. Practically, the bill changes the financial and regulatory landscape for methane mitigation projects and creates immediate questions about program wind‑down and grant obligations.
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What This Bill Actually Does
H.R. 313 is brief and narrowly focused. Its operative move is to excise Section 136 from the Clean Air Act—this section is the statutory hook that authorized a federal methane emissions and waste‑reduction incentive program aimed at petroleum and natural gas systems.
By removing that section, the bill strips the specific legal authority Congress previously provided for the federal government to run that incentive program.
The bill’s second operative piece is a budgetary action: it rescinds the unobligated balance of any amounts that had been made available under Section 136 as of the day before enactment. That means money that was appropriated or otherwise allocated for the program but not yet obligated would be taken back into the Treasury (subject to the legal operation of the rescission).
The text does not purport to disturb other Clean Air Act provisions or to change regulatory obligations that arise elsewhere in the statute.Because the bill targets a single statutory authority, its practical effects will flow from how EPA, grant recipients, and contracting partners interpret the repeal and rescission. EPA would lose the ability to authorize new incentive payments under Section 136; states and private parties expecting future awards under that authority would see the pathway closed.
At the same time, already‑obligated funds and existing contractual commitments are not expressly rescinded, so implementation questions about program wind‑down, grant performance obligations, and contractual claims will arise.The removal of a federal incentive tool is likely to shift how methane‑reduction activity is financed and deployed. Without Section 136 authority, EPA (or Congress) would need to rely on other statutory tools, separate appropriations, or state programs to incentivize or mandate methane mitigation.
That shift affects investment signals to equipment manufacturers and service providers who had anticipated demand driven by the federal program.
The Five Things You Need to Know
The bill repeals Section 136 of the Clean Air Act—codified at 42 U.S.C. 7436—which is the statutory provision for a methane emissions and waste‑reduction incentive program for petroleum and natural gas systems.
H.R. 313 rescinds the unobligated balance of any amounts made available under Section 136 as of the day before enactment, withdrawing unspent program funds.
The repeal is narrow in scope: it removes Section 136 authority but does not amend other provisions of the Clean Air Act or explicitly alter unrelated EPA regulatory powers.
By eliminating the statutory basis for the incentive program, the bill prevents the agency from making future payments under Section 136 unless Congress provides a different legal or appropriations authority.
The text does not explicitly rescind obligated funds or terminate existing contracts; it targets only unobligated balances, creating practical questions about ongoing grants and contractual commitments.
Section-by-Section Breakdown
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Short title
Provides the Act's name, the 'Natural Gas Tax Repeal Act.' The short title frames the bill politically but carries no operative legal effect; it does not itself change statutory language or authority.
Repeal of 42 U.S.C. 7436 (Clean Air Act Section 136)
Deletes Section 136 from the United States Code. Practically, this strips the specific statutory authorization for the methane emissions and waste‑reduction incentive program targeted at petroleum and natural gas systems. Once repealed, the agency cannot rely on Section 136 to establish, fund, or administer new incentive payments; any regulatory or administrative activity premised solely on that authority would need a different legal foundation.
Rescission of unobligated balances
Directs that the unobligated balance of amounts made available under the repealed Section 136 (as that provision existed the day before enactment) be rescinded. The provision is limited to unobligated funds—money allocated but not yet committed under the program—so budgetary recoveries will come from unspent balances rather than from funds already legally obligated to recipients. This creates an immediate fiscal effect but leaves open questions about how ongoing obligations, multi‑year grants, or pending awards will be handled in practice.
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Explore Environment in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Congressional budget hawks and opponents of federal incentive spending—They gain a statutory rescission of unobligated funds and removal of a program that authorized federal outlays for methane incentives.
- Entities preferring state‑level program control—With federal incentive authority removed, states that want to design their own approaches face fewer overlapping federal subsidy programs and greater discretion (absent other federal actions).
- Fiscal managers in the Treasury and appropriations committees—The rescission reclaims unspent balances and can be used in budgetary calculations or to offset other spending priorities.
- Stakeholders opposed to federal subsidy mechanisms in the oil and gas sector—They obtain the policy outcome of eliminating a federal incentive pathway that some viewed as market‑distorting.
Who Bears the Cost
- Petroleum and natural gas operators and midstream companies that planned to use or received incentives under Section 136—They lose a funding source for methane‑reduction projects and may see project economics change.
- Environmental technology and service providers—Vendors that expected demand driven by federal incentive dollars face a reduced market and potential cancelled projects.
- The Environmental Protection Agency—EPA must wind down any programmatic activity tied to the repealed authority, address grant and contract questions, and redirect enforcement or program strategy absent Section 136.
- States and local governments that coordinated deployment with federal incentives—Those governments may experience funding gaps for programs designed to pair with Section 136 payments.
- Climate‑focused NGOs and communities prioritizing methane reductions—They lose a federal incentive tool that supported voluntary or partnership approaches to cutting emissions.
Key Issues
The Core Tension
The central dilemma is between withdrawing a federal spending authority to constrain or eliminate a program (and recover unspent funds) and preserving a federal tool that lowered the financial barrier to methane‑reduction measures; cutting the program reduces federal outlays but also removes a voluntary instrument that encouraged private investment and partnership to achieve environmental goals.
The bill’s brevity masks several implementation and legal questions. First, rescinding only the 'unobligated balance' preserves funds already subject to obligation, but the statute does not define the treatment of multi‑year grants, pending awards, or contractor claims.
Agencies and grant recipients will face administrative complexity as they determine which commitments remain enforceable and which funds are taken back. That process could trigger disputes under contract and grant law and raise administrative burden for EPA and recipients.
Second, removing Section 136 eliminates one federal policy lever—an incentives‑based tool—without changing other Clean Air Act obligations or creating a replacement mechanism. That creates a policy trade‑off: Congress withdraws a voluntary subsidy that encouraged private investment in methane controls, but it does not alter and may complicate regulatory pathways if policymakers intend to maintain equivalent methane‑reduction outcomes.
Finally, the bill could produce uneven effects across jurisdictions: states relying on federal incentives may need to backfill funding or pivot to regulatory approaches, while private actors must reassess investment plans that had depended on federal cost‑sharing signals.
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