Congress quietly raises tax break for rare earth miners to 22 percent

What it does

This bill increases the tax deduction (percentage depletion allowance) that mining companies can claim when extracting rare earth elements and scandium from 15% to 22% of gross income. The higher deduction reduces taxable income and thus federal tax liability for rare earth miners, effective immediately upon enactment.

Why we flagged it

The bill's sole operative mechanism is a tax deduction increase for a specific extractive industry. It is a straightforward, narrowly-scoped tax carve-out with no broader policy justification stated in the text.

What the text implies

• The 22% depletion rate applies to gross income, not net profit, meaning miners receive the deduction even in loss years or low-margin operations, amplifying the subsidy effect.
• No sunset clause or performance requirement ties the deduction to domestic production, investment, or supply-chain resilience — the benefit flows regardless of whether mining activity increases or rare earth supply improves.
• The bill does not require disclosure of how the tax savings are deployed (reinvestment, dividends, executive compensation), so public cannot track whether the subsidy achieves any stated national-security or supply-chain goal.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The bill provides a targeted tax subsidy to rare earth mining companies by increasing their depletion allowance, reducing federal revenue without a corresponding public benefit or offsetting appropriation. Ordinary taxpayers bear the cost through either higher taxes elsewhere or reduced public services.

Who stands to gain

• rare earth mining companies
• scandium mining operations
• mineral extraction sector

Named in the bill

Internal Revenue Code Section 613(b)(1)(B), rare earth elements (lanthanides), scandium, tantalum, percentage depletion allowance

Where it stands

3 cosponsors: 2 Democrats, 1 Republicans.

• Jul 25, 2025 — Introduced · Congress.gov: “Introduced in House”
• Jul 25, 2025 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

2 lobbying clients named this bill on 2 disclosure filings across 2 quarters, Mar 2026 to Jun 2026. Those filings disclosed $70,000 in lobbying spend. A filing names 4 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 41% of bills with at least one filing.

Adrian Smith, the sponsor, reported $1,398,750 in PAC receipts in the 2026 cycle.

• Niocorp Developments Ltd — $50,000 on 1 filing
• Elk Creek Resources Corp. — $20,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.