[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 594 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 594
To amend the Internal Revenue Code of 1986 to reduce emissions of
carbon dioxide by imposing a tax on primary fossil fuels based on their
carbon content.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 15, 2009
Mr. Stark (for himself and Mr. McDermott) introduced the following
bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to reduce emissions of
carbon dioxide by imposing a tax on primary fossil fuels based on their
carbon content.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Save Our Climate Act of 2009''.
SEC. 2. FINDINGS.
The Congress finds as follows:
(1) The Intergovernmental Panel on Climate Change (IPCC)
has concluded that human emissions of greenhouse gases,
particularly carbon dioxide are responsible for global climate
change.
(2) The IPCC has estimated that global temperatures will
rise between 3.2-7.2 degrees Farenheit in the next 100 years if
carbon dioxide emissions are not dramatically reduced.
(3) An increase of even a few degrees could have major
adverse impacts on both the human and man-made environments,
due to rising sea-levels, intensification of weather events,
mass extinction of species, and scarcity of water.
(4) The United States is responsible for nearly 24 percent
of the world's carbon dioxide emissions, equaling approximately
six billion metric tons of carbon dioxide per year.
(5) In order to stabilize the earth's climate and prevent
catastrophic global climate change, the level of worldwide
carbon dioxide emissions need to be reduced 80 percent by 2050.
(6) A tax on fossil fuels based on carbon content will
reduce the incentive to burn those fuels, thereby reducing
carbon dioxide emissions.
(7) Revenue collected from a tax on fossil fuels could be
used to decrease taxes on low and middle-income taxpayers, to
fund research and development of alternative green energy
sources, or to increase funding for other domestic social
priorities.
SEC. 3. IMPOSITION OF CARBON TAX ON PRIMARY FOSSIL FUELS.
(a) General Rule.--Chapter 38 of the Internal Revenue Code of 1986
(relating to environmental taxes) is amended by adding at the end
thereof the following new subchapter:
``Subchapter E--Carbon Tax on Primary Fossil Fuels
``Sec. 4691. Imposition of tax.
``SEC. 4691. IMPOSITION OF TAX.
``(a) General Rule.--There is hereby imposed a tax on any taxable
fuel sold by the manufacturer, producer, or importer thereof.
``(b) Amount of Tax.--
``(1) In general.--The amount of tax imposed by subsection
(a) on any taxable fuel shall be an equivalent amount to $10
per ton of carbon content in such fuel, as determined by the
Secretary in consultation with the Secretary of Energy.
``(2) Annual increase in amount of tax.--For each calendar
year beginning after 2009 and ending with the year after the
target attainment year, paragraph (1) shall be applied by
substituting for `$10' the following: `the amount in effect
under this paragraph for the preceding calendar year, increased
by $10,'.
``(3) Rate freeze after target attainment.--For the second
year after the target attainment year and each year thereafter,
the amount in effect under paragraph (1) shall be the amount in
effect under paragraph (1) for the first year after the target
attainment year.
``(4) Target attainment year.--For purposes of paragraph
(2), a calendar year is the target attainment year if the level
of carbon dioxide emissions in the United States for the
calendar year does not exceed 20 percent of the level of carbon
dioxide emissions in the United States for calendar year 1990,
as determined by the Energy Information Administration,
Department of Energy.
``(c) Taxable Fuel.--For purposes of this section, the term
`taxable fuel' means--
``(1) coal (including lignite and peat),
``(2) petroleum and any petroleum product (as defined in
section 4612(a)(3)), and
``(3) natural gas,
which is extracted, manufactured, or produced in the United States or
entered into the United States for consumption, use, or warehousing.
``(d) Other Definitions.--For purposes of this section--
``(1) United states.--The term `United States' has the
meaning given such term by section 4612(a)(4).
``(2) Importer.--The term `importer' means the person
entering the taxable fuel for consumption, use, or warehousing.
``(3) Ton.--The term `ton' means 2,000 pounds. In the case
of any taxable fuel which is a gas, the term `ton' means the
amount of such gas in cubic feet which is the equivalent of
2,000 pounds on a molecular weight basis.
``(e) Exception.--No tax shall be imposed by subsection (a) on the
sale or in-kind exchange of any taxable fuel for deposit in the
Strategic Petroleum Reserve established under part B of title I of the
Energy Policy and Conservation Act.
``(f) Special Rules.--
``(1) Only 1 tax imposed with respect to any product.--No
tax shall be imposed by subsection (a) with respect to a
taxable fuel if, with respect to such fuel, the person who
would be liable for such tax establishes that a prior tax
imposed by such subsection has been imposed and no refund or
credit with respect to such tax is allowed under subsection
(g).
``(2) Fractional part of ton.--In the case of a fraction of
a ton, the tax imposed by subsection (a) shall be the same
fraction of the amount of such tax imposed on a whole ton.
``(3) Use and certain exchanges by manufacturer, etc.--
``(A) Use treated as sale.--If any person
manufactures, produces, or imports any taxable fuel and
uses such fuel, then such person shall be liable for
tax under subsection (a) in the same manner as if such
fuel were sold by such person.
``(B) Special rules for inventory exchanges.--
``(i) In general.--Except as provided in
this subparagraph, in any case in which a
manufacturer, producer, or importer of a
taxable fuel exchanges such fuel as part of an
inventory exchange with another person--
``(I) such exchange shall not be
treated as a sale, and
``(II) such other person shall, for
purposes of subsection (a), be treated
as the manufacturer, producer, or
importer of such fuel.
``(ii) Registration requirement.--Clause
(i) shall not apply to any inventory exchange
unless--
``(I) both parties are registered
with the Secretary as manufacturers,
producers, or importers of taxable
fuels, and
``(II) the person receiving the
taxable fuel has, at such time as the
Secretary may prescribe, notified the
manufacturer, producer, or importer of
such person's registration number and
the internal revenue district in which
such person is registered.
``(iii) Inventory exchange.--For purposes
of this subparagraph, the term `inventory
exchange' means any exchange in which 2 persons
exchange property which is, in the hands of
each person, property described in section
1221(a)(1).
``(g) Refund or Credit for Certain Uses.--
``(1) Manufacture or production of another taxable fuel.--
Under regulations prescribed by the Secretary, if--
``(A) a tax under subsection (a) was paid with
respect to any taxable fuel, and
``(B) such fuel was used by any person in the
manufacture or production of any other substance which
is a taxable fuel,
then a credit or refund (without interest) shall be allowed, in
the same manner as if it were an overpayment of tax imposed by
subsection (a), to such person in an amount equal to the tax so
paid.
``(2) Embedded or sequestered carbon.--Under regulations
prescribed by the Secretary, if--
``(A) a tax under subsection (a) was paid with
respect to any taxable fuel,
``(B) a person uses such fuel in the manufacture or
production of any substance which is not a taxable
fuel, and
``(C) in the process of such manufacture or
production, carbon in such fuel is embedded or
sequestered,
then a credit or refund (without interest) shall be allowed to
such person in the same manner as if it were an overpayment of
tax imposed by subsection (a). The amount of such credit or
refund shall be an amount equal to the amount of tax in effect
under subsection (a) with respect to such fuel for the calendar
year in which such manufacture or production occurred,
determined on the basis of carbon so embedded or sequestered.
``(3) Limitation.--In any case to which paragraph (1) or
(2) applies, the amount of any such credit or refund shall not
exceed the amount of tax imposed by subsection (a) on the
taxable fuel used in such manufacture or production (or which
would have been imposed by such subsection on such other fuel
but for subsection (h)).
``(h) Exemption for Exports of Taxable Fuels.--
``(1) Tax-free sales.--
``(A) In general.--No tax shall be imposed by
subsection (a) on the sale by the manufacturer or
producer of any taxable fuel for export or for resale
by the purchaser to a second purchaser for export.
``(B) Proof of export required.--Rules similar to
the rules of section 4221(b) shall apply for purposes
of subparagraph (A).
``(2) Credit or refund where tax paid.--
``(A) In general.--Except as provided in
subparagraph (B), if--
``(i) tax under subsection (a) was paid
with respect to any taxable fuel, and
``(ii)(I) such fuel was exported by any
person, or
``(II) such fuel was used as a material in
the manufacture or production of a taxable fuel
which was exported by any person and which, at
the time of export, was a taxable fuel,
credit or refund (without interest) of such tax shall
be allowed or made to the person who paid such tax.
``(B) Condition to allowance.--No credit or refund
shall be allowed or made under subparagraph (A) unless
the person who paid the tax establishes that he--
``(i) has repaid or agreed to repay the
amount of the tax to the person who exported
the taxable fuel, or
``(ii) has obtained the written consent of
such exporter to the allowance of the credit or
the making of the refund.
``(C) Refunds directly to exporter.--The Secretary
shall provide, in regulations, the circumstances under
which a credit or refund (without interest) of the tax
under subsection (a) shall be allowed or made to the
person who exported the taxable fuel, where--
``(i) the person who paid the tax waives
his claim to the amount of such credit or
refund, and
``(ii) the person exporting the taxable
fuel provides such information as the Secretary
may require in such regulations.
``(3) Regulations.--The Secretary shall prescribe such
regulations as may be necessary to carry out the purposes of
this subsection.''.
(b) Study.--Not later than 5 years after the date of the enactment
of this Act, and every 5 years thereafter, the Secretary of the
Treasury, in consultation with the Secretary of Energy, shall conduct a
study on the environmental, economic, and revenue impacts regarding the
tax imposed by subchapter E of chapter 38 of the Internal Revenue Code
of 1986 (relating to carbon tax on primary fossil fuels). The Secretary
shall submit each study to the Committee on Ways and Means of the House
of Representatives and the Committee on Finance of the Senate.
(c) Clerical Amendment.--The table of subchapters for chapter 38 of
such Code is amended by adding at the end thereof the following new
item:
``subchapter e. carbon tax on primary fossil fuels''.
(d) Effective Date.--The amendments made by this section shall
apply to sales after the date of the enactment of this Act.
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