H.R. 10778: 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.

This bill would create a new federal tax credit for certain health care facilities that use anesthetic gases with lower emissions and lower climate impact.

What the credit would apply to

The credit would be available to hospitals, ambulatory surgical centers, and other facilities that the Treasury Department designates. It would cover:

• Purchases of isoflurane or sevoflurane, which are anesthetic gases used in surgery and medical procedures.
• Costs to modify or retrofit a mobile anesthetic machine so it can use those gases, up to $1,500 per machine.

How the credit would be calculated

The amount of the credit would depend on how much a facility reduces certain higher-emission anesthetic gases compared with the previous year. The bill focuses on reductions in use of:

• Desflurane
• Nitrous oxide

Facilities would qualify for different credit percentages based on their measured emission reduction rate:

• 15% of eligible expenses if emissions are reduced by at least 10% but less than 25%
• 25% if reduced by at least 25% but less than 50%
• 50% if reduced by 50% or more

The reduction would be measured relative to the prior taxable year, using a formula tied to the global warming potential of the anesthetic gases acquired by the facility and its average inpatient bed capacity. The Treasury Secretary would set the certification rules for how these reductions are verified.

How the credit could be used

The bill would add this new credit to the federal general business credit, which means it could be used like other business tax credits. It would also be eligible for elective payment, meaning some tax-exempt or otherwise eligible facilities could potentially receive the credit as a direct payment rather than only using it to offset taxes.

Timing

The credit would apply to amounts paid or incurred after December 31, 2026. It would stop applying to amounts paid or incurred after December 31, 2029.

Regulatory authority

The Treasury Secretary, working with the Secretary of Health and Human Services and the EPA Administrator, would issue rules or guidance needed to carry out the credit.

Relevant Companies

None found