113 HR 4754 IH: Managed Carbon Price Act of 2014
U.S. House of Representatives
2014-05-28
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.This Act may be cited as the Managed Carbon Price Act of 2014
.
2.Greenhouse Gas Emission Substances
(a)The Internal Revenue Code of 1986 is amended by adding at the end the following:
LGreenhouse Gas Emission Substances
Sec. 9901. Condition precedent to sale or use of greenhouse gas emission substance.
Sec. 9902. Federal emission permit.
Sec. 9903. Definitions.
Sec. 9904. Information reporting requirements.
Sec. 9905. Regulations.
9901.Condition precedent to sale or use of greenhouse gas emission substance
(a)No covered person may sell any greenhouse gas emission substance except pursuant to a Federal
emission permit for each carbon dioxide equivalent that the Administrator
of the Environmental Protection Agency determines would be emitted from
the combustion or other greenhouse gas emitting use of such substance.
(b)For purposes of this subtitle, the term covered person means—
(1)in the case of coal (including lignite and peat) produced from a mine in the United States, the
producer of such coal,
(2)in the case of crude oil or petroleum products received at a United States refinery, the operator
of the United States refinery,
(3)in the case of natural gas, the first seller of such natural gas,
(4)in the case of any greenhouse gas emission substance not described in paragraph (1), (2), or (3)
produced in the United States, the producer of such substance, and
(5)in the case of any greenhouse gas emission substance entered into the United States for
consumption, use, or warehousing, the person entering such substance for
consumption, use, or warehousing.
(c)
(1)If any person uses a greenhouse gas emission substance before the first retail sale of such
substance, then such person shall be liable for the purchase of a Federal
emission permit under section 9902 in the same manner as if such substance
were sold at retail on the date of such use by such person pursuant to a
Federal emission permit.
(2)Exemption for use in further manufactureParagraph (1) shall not apply to use of a greenhouse gas emission substance as material in the
manufacture or production of, or as a component part of, another article
to be manufactured or produced by such person.
(d)Subsection (a) shall not apply to—
(1)a greenhouse gas emission substance to be used for noncombustion agricultural purposes, or
(2)a greenhouse gas emission substance with respect to which a Federal emission permit has previously
been purchased.
(e)Importation of Carbon Intensive Goods
(1)Greenhouse gas emission permit equivalency feesThe Secretary shall impose a greenhouse gas emission permit equivalency fee on imports of carbon
intensive goods that shall be equivalent to the cost that domestic
producers of comparable carbon intensive goods incur as a result of—
(A)permit fees paid by covered persons for greenhouse gas emission substances under this section, and
(B)greenhouse gas emission permit equivalency fees paid by importers of carbon intensive goods used in
the production of the comparable carbon intensive goods in question.
(2)Paragraph (1) and section 6433(b) shall cease to have effect at such time as and to the extent
that—
(A)an international agreement requiring countries that emit greenhouse gases and produce carbon
intensive goods for international markets to adopt equivalent measures
comes into effect, and
(B)the country of export has implemented equivalent measures, and the actions provided for by
paragraph (1) and section 6433(b) are no longer appropriate.
9902.
(a)The Secretary shall, subject to subsection (d), issue Federal emission permits, as provided for in
this subtitle. A Federal emission permit may only be obtained upon making
payment to the Secretary.
(b)Rules relating to permitsFor purposes of this subtitle—
(1)Each Federal emission permit shall be denominated in one-quarter carbon dioxide equivalents.
(2)A Federal emission permit may only be purchased within fourteen calendar days before or after a
greenhouse gas emission substance is produced or entered into the United
States, as the case may be.
(3)Except as provided in subsection (a), a Federal emission permit may not be sold, exchanged, or
otherwise transferred.
(c)
(1)The Secretary, after consultation with the Administrator of the Environmental Protection Agency and
the Secretary of Energy, shall establish the price of obtaining a Federal
emission permit for a calendar year based on a determination of the dollar
amount necessary to meet the emissions reductions targets specified in
subsection (d).
(2)
(A)Not later than January 1, 2016, the Secretary shall publish a schedule of the prices determined
under paragraph (1) for obtaining a Federal emission permit during each of
the five years from 2017 to 2021. The Secretary shall publish the price
for obtaining a Federal emission permit in each year after 2020 no later
than five years before January 1 of the applicable year.
(B)Reduction in price if target reductions being exceededIf the Secretary determines—
(i)that greenhouse gas emissions are being reduced at a rate that exceeds the reduction expected in
national greenhouse gas emissions for the year, and
(ii)that the Federal permit price can be reduced while still attaining the national greenhouse gas
emission target reductions specified in subsection (d) for the year,the Secretary may, at any time before the beginning of the year, reduce the Federal permit price
for that year.(3)Increase in price if target reductions not being metIf the Secretary determines that the reduction of greenhouse gas emissions is failing to meet the
target reductions specified in subsection (d) for a year in such period,
the Secretary may increase the Federal permit price for permits no earlier
than 2 years after the year for which the determination is made.
(4)Maximum and Minimum Price
(A)Not later than January 1, 2023, and every 10 years thereafter, the Secretary, after consultation
with the Administrator of the Environmental Protection Agency and the
Secretary of Energy, shall publish a 10-year schedule of the minimum and
maximum prices for Federal emissions permits.
(B)The maximum and minimum price for a Federal emission permit issued by the Secretary in a year may
not be below the minimum price or the maximum price for the corresponding
year specified in the following table:
Year:Minimum Price is:Maximum Price is:
2015$6.25$18.75
2016$18.75$31.25
2017$31.25$43.75
2018$43.75$56.25
2019$56.25$68.75
2020$68.75$82.25
2021$81.25$93.75
2022$93.75$106.25
2023$106.25$118.75
2024$118.75$131.25.
(C)In the case of any calendar year beginning after 2015, each dollar amount contained in the table in
subparagraph (B) shall be increased by an amount equal to—
(i)such dollar amount, multiplied by
(ii)the cost of living adjustment determined under section 1(f)(3) for the calendar year, determined by
substituting calendar year 2014
for calendar year 1992
in subparagraph (B) thereof.
(d)
(1)For purposes of this section—
(A)The average emissions for the period 2015 through 2019 shall be no more than the carbon dioxide
equivalents emitted in the United States in 2005.
(B)The average emissions for the period 2025 through 2029 shall be no more than 70 percent of the
carbon dioxide equivalents emitted in the United States in 2005.
(C)The average emissions for the period 2035 through 2039 shall be no more than 50 percent of the
carbon dioxide equivalents emitted in the United States in 2005.
(D)The average emissions for the period 2045 through 2049 shall be no more than 30 percent of the
carbon dioxide equivalents emitted in the United States in 2005.
(E)The average emissions for the period 2055 through 2059 shall be no more than 20 percent of the
carbon dioxide equivalents emitted in the United States in 2005.
(2)Determination of 2005 levelsFor purposes of subparagraph (A), the number of metric tons of carbon dioxide equivalents emitted
in the United States in 2005 shall be the number determined under section
1605(a) of the Energy Policy Act of 1992 and published by the Energy
Information Administration.
(e)
(1)Not later than the second March 1 after the date of the enactment of the Managed Carbon Price Act of 2014, and annually thereafter, the Secretary shall publish a report describing—
(A)the extent to which the United States greenhouse gas emission limitations specified under
subsection (d) are being achieved,
(B)the United States greenhouse gas emission permits sold during the previous calendar year and the
impact of the number of such permits on greenhouse gas emissions in the
United States, and
(C)the total greenhouse gas emissions worldwide for the previous calendar year in relation to such
emissions for 2005.
(2)Such report shall include—
(A)an explanation of the methodology and assumptions the Secretary has used in establishing prices
under this section, and
(B)an estimation, or range of estimations, of the price of permits for the 10-year period following
the current prices published under subsection (c).
9903.
(a)For purposes of this subtitle—
(1)The term Administrator means the Administrator of the Environmental Protection Agency.
(2)Carbon dioxide equivalentThe term carbon dioxide equivalent means, for each greenhouse gas emission substance, the quantity of the greenhouse gas emission
substance that the Administrator determines makes the same contribution to
global warming as 1 metric ton of carbon dioxide.
(3)Greenhouse gas emission substanceThe term greenhouse gas emission substance means—
(A)coal (including lignite, peat, and derivatives of coal), to be used as a combustion fuel,
(B)petroleum and any petroleum product, to be used as a combustion fuel,
(C)natural gas (including the gasses released as a result of flaring or venting such natural gas),
(D)methane,
(E)nitrous oxide,
(F)sulfur hexafluoride,
(G)a perfluorocarbon,
(H)a hydrofluorocarbon, and
(I)any other substance that is determined by the Administrator to contribute to global warming to a
nonnegligible degree.
(4)The term Federal emission permit means a permit required under section 9901.
(5)The term carbon intensive good means—
(A)
(i)iron, steel, any steel mill product (including pipe and tube), aluminum, cement, glass (including
flat, container, and specialty glass and fiberglass), pulp, paper,
chemicals, and industrial ceramics, and
(ii)any other manufactured product that the Secretary determines—
(I)is sold for purposes of further manufacture, and
(II)generates, in the course of the manufacture of the product, direct and indirect greenhouse gas
emissions that are comparable (on an emissions per dollar of output basis)
to emissions generated in the manufacture or production of a good
identified in clause (i), and
(B)a manufactured item in which one or more goods identified under subparagraph (A) are inputs and the
cost of production of which in the United States the Secretary determines
is significantly increased by this subtitle.
(6)The term petroleum product has the meaning given such term in section 4612(a)(3).
(b)Identification of carbon intensive goodsThe determinations by the Secretary required by subsection (a)(5) shall be by rule.
(c)Not later than one year after the date of the enactment of the Managed Carbon Price Act of 2014, the Administrator, in consultation with the Secretary and the Secretary of Energy, shall publish
a schedule listing each greenhouse gas emission substance and the quantity
of each substance required to make 1 metric ton of carbon dioxide. The
Administrator, in consultation with the Secretary and the Secretary of
Energy, may update such schedule from time to time.
9904.Information reporting requirementsSecretary may solicit information from covered persons regarding estimated future use of greenhouse
gas emissions substances.
9905.The Secretary shall issue such regulations as may be necessary or appropriate to carry out this
subtitle, including regulations relating to the timely and efficient
issuance of permits and collection of payments for such permits..
(b)Refund of Federal emission permit feeSubchapter B of chapter 65 of such Code is amended by adding at the end the following new section:
6433.Refunds of Federal emission permit fee for certain uses
(a)If a Federal emission permit has been acquired with respect to a greenhouse gas emission substance
pursuant to section 9902 and the acquirer of such permit uses such
substance in a manner that will make a negligible or no contribution to
global warming, as determined by the Secretary in consultation with the
Administrator of the Environmental Protection Agency, the Secretary shall
pay (without interest) to the acquirer of such substance pursuant to such
permit an amount equal to the amount paid for the applicable Federal
emission permit.
(b)The Secretary shall pay (without interest) to the exporter of a carbon intensive good (as defined
in section 9903(5)) produced in the United States an amount equal to the
cost that domestic producers of such carbon intensive goods incur as a
result of—
(1)the dollar amount paid by covered persons for Federal emission permits for greenhouse gas emission
substances under this section 9902, and
(2)greenhouse gas emission permit equivalency fees paid under section 9901(e) by importers of carbon
intensive goods used in the production of the comparable carbon intensive
goods in question..
(c)Chapter 38 of the Internal Revenue Code of 1986 is amended by adding at the end the following new
subchapter:
EGreenhouse Gas Emission Substances
Sec. 4691. Greenhouse gas emission substances.
4691.Greenhouse gas emission substances
(a)There is hereby imposed on any covered person who fails to obtain a Federal emission permit
pursuant to subtitle L a tax equal to 100 percent of the dollar amount of
the fee that would have been charged for such permit but for such failure.
(b)The term covered person has the meaning given such term by section 9901(b).
(c)The term Federal emission permit means a permit required under section 9901.
(d)The tax imposed under this section is in addition to the fee imposed under subtitle L..
(d)Establishment of Energy and Economic Security Trust Fund
(1)The Congress finds that revenue generated from the sale of Federal emission permits must be
recycled into the American economy—
(A)to facilitate economic growth and clean energy production, and
(B)to protect the economic security of American families and communities.
(2)Establishment of trust fundSubchapter A of chapter 98 of such Code (relating to trust fund code) is amended by adding at the
end the following:
9512.Energy and Economic Security Trust Fund
(a)There is established in the Treasury of the United States a trust fund to be known as the Energy and Economic Security Trust Fund
(referred to in this section as the Trust Fund
), consisting of such amounts as may be appropriated or credited to the Trust Fund as provided in
this section or section 9602(b).
(b)There is hereby appropriated to the Trust Fund an amount equivalent to the amounts received in the
Treasury pursuant to subtitle L.
(c)Expenditures from Trust Fund
(1)The Secretary shall pay monthly from the Trust Fund the dividend amount to each taxpayer.
(2)For purposes of paragraph (1), the term dividend amount means the sum of—
(A)
(i)in the case of the taxpayer filing a joint return, the individual share for the husband and the
individual share for the wife, and
(ii)in the case of a taxpayer other than a taxpayer described in subparagraph (A), the individual
share, and
(B)in the case of an individual who is a dependent (as defined in section 152) of the taxpayer, ½ of the individual share.For purposes of subparagraph (B), not more than 2 dependents may be taken into account for each
taxpayer.(3)For purposes of this subsection, the term individual share means the amount determined by the Secretary by dividing the total amount deposited in the Trust
Fund for the month by the total number of individual shares payable at the
end of such month.
(4)For purposes of this subsection—
(A)No amount is payable under this subsection with respect to an individual unless the individual is a
qualified individual.
(B)The term qualified individual means an individual who is a lawful resident of the United States on the date of such payment. For
purposes of ensuring that payments are made under this subsection to all
qualified individuals, the Secretary shall consult with such other Federal
and State officials as the Secretary determines necessary or appropriate.
(C)For purposes of subparagraph (B), the United States includes the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and
the Commonwealth of the Northern Mariana Islands..
(e)Conforming and clerical amendments
(1)The table of subchapters for chapter 38 of such Code is amended by adding at the end the following
new item:
Subchapter E. Greenhouse Gas Emission Substances.
(2)The table of subtitles for the Internal Revenue Code of 1986 is amended by adding at the end the
following new item:
Subtitle L. Greenhouse Gas Emission Substances.
(3)The table of sections for subchapter B of chapter 65 of such Code is amended by adding at the end
the following new item:
Sec. 6433. Refunds of Federal emission permit fee for certain uses..
(4)The table of sections for subchapter A of chapter 98 of such Code is amended by adding at the end
the following:
Sec. 9512. Energy and Economic Security Trust Fund..
(f)The amendments made by this section shall apply with respect to the sale of any greenhouse gas
emission substance after December 31, 2014.