1.This Act may be cited as the
Save Our Climate Act of
2009
.
2.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.
3.Imposition of carbon
tax on primary fossil fuels
(a)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:
ECarbon Tax on
Primary Fossil Fuels
Sec. 4691. Imposition of tax.
4691.
(a)There is hereby imposed
a tax on any taxable fuel sold by the manufacturer, producer, or importer
thereof.
(b)
(1)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 taxFor 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 attainmentFor 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)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)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)For purposes of
this section—
(1)The term United States has the meaning given
such term by section 4612(a)(4).
(2)The
term importer means the person entering the taxable fuel for
consumption, use, or warehousing.
(3)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)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)
(1)Only 1 tax
imposed with respect to any productNo 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)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)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)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)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)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 fuelUnder 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 carbonUnder
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)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)
(A)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)Rules similar to the rules of section 4221(b) shall
apply for purposes of subparagraph (A).
(2)Credit or refund
where tax paid
(A)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)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 exporterThe 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)The
Secretary shall prescribe such regulations as may be necessary to carry out the
purposes of this
subsection.
.
(b)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)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)The amendments made by this section shall apply to sales
after the date of the enactment of this Act.