1.This Act may be cited as the
Managed Carbon Price Act of
2012
.
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 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 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, 2014, 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 2015 to 2019. The Secretary shall publish the price
for obtaining a Federal emission permit in each year after 2018 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, 2021, 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
2012, 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 2012, 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 75 percent of the amounts received in the Treasury
pursuant to subtitle L. The remaining 25 percent of such amounts shall be
retained in the Treasury for deficit reduction.
(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, 2013.