To amend the Internal Revenue Code of 1986 to establish a credit to incentivize the use of certain low-emission anesthetic gases by health care facilities, and for other purposes.
- Sponsor
- Rep. Foushee, Valerie P. [D-NC-4]
- Committees
- Ways and Means Committee (primary)
- Last action
- Oct 9, 2026
Bottom line
The bill incentivizes health care facilities to switch to lower global warming potential anesthetic gases through a tiered, refundable tax credit and support for equipment retrofitting.
What it actually does
This bill establishes a new tax credit under the Internal Revenue Code for health care facilities that reduce their use of high global warming potential (GWP) anesthetic gases like desflurane and nitrous oxide, in favor of lower-emission alternatives such as isoflurane and sevoflurane. The credit amount is tiered based on the percentage reduction in emissions relative to the facility's inpatient bed capacity in the preceding year. It also provides a separate credit for retrofitting mobile anesthetic machines to be compatible with these lower-emission gases, and makes the credit eligible for elective payment (direct refund).
Proponents argue
Proponents argue that this bill provides a crucial financial incentive for health care facilities to adopt more environmentally friendly practices, specifically targeting a significant source of greenhouse gas emissions within the medical sector. They contend that by reducing the use of high-GWP anesthetic gases, the healthcare industry can play a vital role in combating climate change without compromising patient care, especially given the availability of effective lower-emission alternatives. The refundable nature of the credit ensures that even non-profit hospitals can benefit, accelerating adoption.
Opponents contend
Opponents might argue that while the goal is laudable, a tax credit may not be the most efficient or effective mechanism to achieve this change, potentially leading to administrative burdens for facilities and the IRS. Some may also raise concerns about the potential for unintended consequences if facilities prioritize tax benefits over clinical considerations, or if the specified low-emission gases are not always the optimal choice for all patient populations or procedures. Additionally, critics might question the overall impact of anesthetic gas emissions compared to other sectors, suggesting resources could be better allocated elsewhere.
The bill is relatively short and clearly structured, making it accessible for an informed reader to understand its core provisions within the time given.
Section 1(a), new Section 45BB(a)
Establishment of Low-Emission Anesthetic Gas Credit
This provision creates a new general business tax credit for health care facilities. The credit is calculated as the sum of an 'applicable percentage' of qualified low-emission anesthetic gas expenditures and a fixed amount (up to $1,500 per machine) for qualified mobile anesthetic machine expenditures. This directly reduces the tax liability of eligible facilities.
Supporters argue
Supporters argue that establishing a direct financial incentive is the most effective way to encourage widespread adoption of lower-emission anesthetic gases across the healthcare sector, driving environmental benefits.
Critics contend
Critics might suggest that a tax credit could be an inefficient use of taxpayer money, as some facilities might have transitioned to lower-emission gases regardless, or that the administrative burden outweighs the environmental benefit.
Tradeoffs
The provision balances the environmental goal of reducing greenhouse gas emissions with the fiscal cost of providing tax incentives to private and public entities.
Section 1(a), new Section 45BB(b)(1) and (2)
Definitions of Qualified Expenditures and Applicable Percentage
This section defines 'qualified low-emission anesthetic gas expenditures' as amounts spent on isoflurane or sevoflurane. It also establishes a tiered 'applicable percentage' for the credit: 15% for a 10-25% emission reduction, 25% for 25-50% reduction, and 50% for a 50% or greater reduction. The reduction is measured against the previous year's aggregate global warming potential of desflurane and nitrous oxide, relative to inpatient bed capacity.
Section 1(a), new Section 45BB(b)(3) and (4)
Qualified Mobile Anesthetic Machine Expenditures and Health Care Facility Definition
This section defines 'qualified mobile anesthetic machine expenditures' as costs incurred for rehabilitating or retrofitting mobile anesthetic machines to be compatible with isoflurane or sevoflurane, with a cap of $1,500 per machine. It also defines 'health care facility' to include hospitals, ambulatory surgical centers, and other facilities designated by the Secretary, broadening the potential scope of eligible entities.
Section 1(d) and (e)
Credit Allowed as Part of General Business Credit and Elective Payment
This provision integrates the new low-emission anesthetic gas credit into the existing general business credit framework (Section 38(b) of the IRC). Crucially, it also amends Section 6417(b) to allow for 'elective payment' of the credit, meaning eligible entities can opt to receive the credit as a direct payment (a refund) rather than solely as a reduction in tax liability. The amendments apply to amounts paid or incurred after December 31, 2026.
Defines 'global warming potential' (GWP) as the ratio of time-integrated radiative forcing from the instantaneous release of one kilogram of a trace substance relative to that of one kilogram of carbon dioxide (CO2).
Section 1(a), new Section 45BB(b)(2)(B)(ii)
Why it matters:This is standard legislative practice for technical definitions that are crucial for the precise application of a formula but not the primary policy statement.
Case for: Supporters argue that a precise, scientifically-grounded definition of GWP is essential for ensuring the credit accurately measures and incentivizes real environmental benefits, preventing ambiguity or manipulation.
Case against: Critics might suggest that relying on such a specific and technical definition could make compliance and verification challenging for health care facilities without specialized environmental expertise, potentially increasing administrative burden.
Estimated impact: This definition underpins the entire calculation of emission reductions, directly determining eligibility and the magnitude of the credit for facilities.
The definition of 'health care facility' includes 'any hospital, ambulatory surgical center described in section 1833(i)(1)(A) of the Social Security Act, or other facility designated by the Secretary.'
Section 1(a), new Section 45BB(b)(4)
Why it matters:This is a common legislative technique to provide administrative flexibility and future-proofing without requiring new legislation for minor scope adjustments.
Case for: Proponents argue this flexibility allows the program to adapt to evolving healthcare models or to include other types of facilities that may also be significant emitters of anesthetic gases, ensuring the credit remains relevant and effective over time.
Case against: Opponents might express concern that this grants significant power to the Secretary (of the Treasury, in consultation with HHS and EPA) to expand the scope of the credit without further congressional approval, potentially leading to unforeseen budget implications or policy shifts.
Estimated impact: Could significantly broaden the reach and cost of the credit if the Secretary designates a large number of additional facility types.