[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3242 Introduced in House (IH)]

112th CONGRESS
  1st Session
                                H. R. 3242

   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

                            October 24, 2011

   Mr. Stark (for himself, Mr. Grijalva, Mr. Moran, Mr. Filner, Mr. 
  Blumenauer, Mr. Honda, Mr. McDermott, Mr. Holt, and Mr. Hastings of 
   Florida) 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 2011''.

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 Fahrenheit 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 natural 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 18 percent 
        of the world's annual carbon dioxide emissions, equaling 
        approximately 5.5 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 needs to be reduced 80 percent below 
        1990 levels by 2050.
            (6) A tax on the carbon content of fossil fuels will create 
        incentives for investment and development of low and zero 
        carbon alternatives, thereby reducing carbon dioxide emissions 
        and while generating funds to reduce our deficits.
            (7) Revenue from a carbon tax can reduce the deficit. 
        Dedicating the revenue from a $10 per ton of carbon dioxide tax 
        could reduce the deficit by more than $480 billion over ten 
        years.
            (8) In order to protect consumers from higher energy 
        prices, all carbon tax revenue not targeted for deficit 
        reduction shall be returned to individuals through a dividend 
        distributed on an annual basis.

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 dioxide produced by combustion 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 2011 which is not the year after a 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 each 
        calendar year after a target attainment year, the amount in 
        effect under paragraph (1) shall be the amount in effect under 
        paragraph (1) for the preceding calendar year.
            ``(4) Target attainment year.--For purposes of paragraph 
        (2), a calendar year is a 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)),
            ``(3) natural gas, and
            ``(4) biomass, municipal solid waste, and any organic 
        material other than coal, petroleum, and natural gas that is 
        sold for the purpose of energy production, as determined by the 
        Secretary of Energy,
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.
    ``(i) Border Adjustments.--
            ``(1) In general.--The Secretary shall make harmonization 
        adjustments on the importation of any product.
            ``(2) Fee.--In the case that taxes paid by manufacturers 
        and producers under this section with respect to comparable 
        products exceeds the sum of any similar carbon content tax 
        imposed by a foreign country on the imported product, plus the 
        amount imposed under subsection (a), the adjustment under 
        subsection (a) shall be the imposition of a fee in the amount 
        the Secretary determines is equal to such excess. Such fee 
        shall be treated as a tax for purposes of subtitle F.
            ``(3) Credit or refund.--In the case that any similar 
        carbon content tax imposed by a foreign country on the imported 
        product exceeds the taxes paid by manufacturers and producers 
        under this section with respect to comparable products, the 
        adjustment under subsection (a) shall be a credit or refund 
        (without interest) in the amount the Secretary determines is 
        equal to such excess. Such credit or refund shall be allowed in 
        the same manner as if it were an overpayment of tax.
            ``(4) Regulations.--The Secretary shall issue such 
        regulations as may be necessary to carry out 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 and the 
Administrator of the Environmental Protection Agency, shall conduct a 
study on the environmental, economic, and revenue impacts, and the 
carbon dioxide emissions in the United States, 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 December 31, 2011.

SEC. 4. HEALTHY CLIMATE TRUST FUND.

    (a) Establishment of Trust Fund.--Subchapter A of chapter 98 of 
such Code (relating to trust fund code) is amended by adding at the end 
the following:

``SEC. 9512. HEALTHY CLIMATE TRUST FUND.

    ``(a) Establishment.--There is established in the Treasury of the 
United States a trust fund to be known as the `Healthy Climate Trust 
Fund', consisting of such amounts as may be appropriated to such trust 
fund as provided for in this section.
    ``(b) Transfers.--There are appropriated to the Healthy Climate 
Trust Fund--
            ``(1) for calendar year 2012, amounts equivalent to the 
        taxes received under section 6691, and
            ``(2) for any calendar year after 2012, amounts equivalent 
        to the taxes received under section 6691 that are attributable 
        to the excess of--
                    ``(A) the rate of tax in effect under such section 
                for the calendar year, over
                    ``(B) $10.
    ``(c) Expenditures.--
            ``(1) Administrative expenses.--Such amounts as may be 
        necessary from the Healthy Climate Trust Fund shall be 
        available to pay the administrative expenses necessary to carry 
        out this section for each year, but not exceeding 0.50 percent 
        of the amounts appropriated to such trust fund under subsection 
        (b) in such year.
            ``(2) Consumer dividend payments.--Amounts in the Healthy 
        Climate Trust Fund not used under paragraph (1) for any year 
        shall be available for making consumer dividend payments under 
        subsection (d) before February 15 of the following year.
    ``(d) Payment of Consumer Dividend.--
            ``(1) In general.--From amounts made available under 
        subsection (c)(2), the Secretary shall make annual consumer 
        dividend payments to each individual who is an eligible 
        individual for that year.
            ``(2) Consumer dividend payment.--The term `consumer 
        dividend payment' means the individual pro-rata share, as 
        determined by the Secretary, of amounts available for the year 
        in the Healthy Climate Trust Fund under subsection (c)(2).
            ``(3) Eligible individual.--The term `eligible individual' 
        means, with respect to any year, any individual with a TIN 
        (other than a nonresident alien individual) who is lawfully 
        present in the United States for such month, as determined and 
        verified by the Secretary in consultation with any other 
        Federal entity the Secretary determines appropriate.
            ``(4) Tax treatment of payments.--Amounts paid under this 
        subsection shall be includible in gross income.
    ``(e) Report to Congress.--Not later than June 1, 2013, and at 
least annually thereafter, the Secretary shall transmit to Congress a 
report accounting for the disposition of amounts in the Healthy Climate 
Trust Fund in the previous calendar year.
    ``(f) Healthy Climate Trust Fund Website.--Not later than 90 days 
after the date of the enactment of this section, the Secretary shall 
establish and maintain a website to provide the public with information 
on the disposition of any amounts in the Healthy Climate Trust Fund.
    ``(g) Regulations.--The Secretary shall prescribe such regulations 
and other guidance as may be necessary or appropriate to carry out this 
section.''.
    (b) Clerical Amendment.--The table of sections for subchapter A of 
chapter 98 of such Code is amended by adding at the end the following 
new item:

``Sec. 9512. Healthy Climate Trust Fund.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2011.

SEC. 5. DISCLOSURE OF INFORMATION.

    (a) Limited Disclosure of Identity.--Subsection (l) of section 6103 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new paragraph:
            ``(22) Limited disclosure of identity information relating 
        to consumer dividend payments.--
                    ``(A) Department of the treasury.--Individual 
                identity information shall, without written request, be 
                open to inspection by or disclosure to officers and 
                employees of the Department of the Treasury whose 
                official duties require such inspection or disclosure 
                for purposes of section 9512(d).
                    ``(B) Commissioner of social security.--The 
                Commissioner of Social Security shall, on written 
                request, disclose to officers and employees of the 
                Department of the Treasury individual identity 
                information which has been disclosed to the Social 
                Security Administration as provided by paragraph (1) or 
                (5).
                    ``(C) Restriction on disclosure.--Information 
                disclosed under this paragraph shall be disclosed only 
                for purposes of, and to the extent necessary in, 
                carrying out section 9512(d).''.
    (b) Conforming Amendments.--Section 6103(p)(3)(A) of the Internal 
Revenue Code of 1986 is amended by striking ``or (21)'' and inserting 
``, (21), or (22)''.

SEC. 6. EFFECTIVE DATE.

    The amendments made by this Act shall take effect on the date of 
the enactment of this Act.
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