[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5307 Introduced in House (IH)]
113th CONGRESS
2d Session
H. R. 5307
To amend the Internal Revenue Code of 1986 to reduce carbon pollution
in the United States, invest in the Nation's infrastructure, and cut
taxes for working Americans.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 31, 2014
Mr. Larson of Connecticut introduced the following bill; which was
referred to the Committee on Ways and Means, and in addition to the
Committee on Foreign Affairs, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to reduce carbon pollution
in the United States, invest in the Nation's infrastructure, and cut
taxes for working Americans.
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 ``America's Energy Security Trust Fund
Act of 2014''.
SEC. 2. TAX ON CARBON DIOXIDE CONTENT OF CERTAIN SUBSTANCES.
(a) In General.--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--Tax on Carbon Dioxide Content of Certain Substances
``Sec. 4691. Imposition of tax.
``Sec. 4692. Refunds or credits.
``Sec. 4693. Border adjustments.
``Sec. 4694. Definitions and special rules.
``SEC. 4691. IMPOSITION OF TAX.
``(a) In General.--There is hereby imposed a tax on any taxable
carbon substance 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 carbon substance shall be the applicable
amount per ton of carbon dioxide content of such substance, as
determined by the Secretary in consultation with the Secretary
of Energy.
``(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) Applicable amount.--For purposes of paragraph (1)--
``(A) Calendar year 2016.--The applicable amount
for calender year 2016 is $10.
``(B) Years after 2016.--For a calendar year after
2016, the applicable amount is the sum of--
``(i) the amount in effect under this
paragraph for the preceding calendar year, plus
``(ii) $10.
``(c) Substance Taxed Only Once.--No tax shall be imposed by
subsection (a) with respect to a taxable carbon substance if the person
who would be liable for such tax establishes that a prior tax imposed
by such section has been imposed with respect to such product.
``(d) Exemption for Exports.--
``(1) Tax-free sales.--
``(A) In general.--No tax shall be imposed under
subsection (a) on the sale by the manufacturer or
producer of any taxable carbon substance 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 carbon substance,
and
``(ii)(I) such substance was exported by
any person, or
``(II) such substance was used as a
material in the manufacture or production of a
taxable carbon substance which was exported by
any person and which, at the time of export,
was a taxable carbon substance,
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 carbon substance, 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 carbon substance,
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
carbon substance provides such information as
the Secretary may require in such regulations.
``SEC. 4692. REFUNDS OR CREDITS.
``(a) Sequestered Carbon.--Under regulations prescribed by the
Secretary, if--
``(1) a person uses a taxable carbon substance as a
feedstock so that the carbon associated with such substance
will not be emitted, or
``(2) a person captures and sequesters the carbon in a
taxable carbon substance,
then an amount equal to the amount of tax in effect under section
4691(b) with respect to such substance for the calendar year in which
such use begins shall be allowed as a credit or refund (without
interest) to such person in the same manner as if it were an
overpayment of tax imposed by section 4691.
``(b) Previously Taxed Carbon Substances Used To Make Another
Taxable Carbon Substance.--Under regulations prescribed by the
Secretary, if--
``(1) a tax under section 4691 was paid with respect to any
taxable carbon substance, and
``(2) such substance was used by any person in the
manufacture or production of any other substance which is a
taxable carbon substance,
then an amount equal to the tax so paid shall be allowed as a credit or
refund (without interest) to such person in the same manner as if it
were an overpayment of tax imposed by subsection (a). In any case to
which this paragraph applies, the amount of any such credit or refund
shall not exceed the amount of tax imposed by subsection (a) on the
other taxable fuel manufactured or produced (or which would have been
imposed by such subsection on such other fuel but for subsection (c)).
``SEC. 4693. BORDER ADJUSTMENTS.
``(a) Imports.--The Secretary shall impose a carbon 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--
``(1) taxes paid by manufacturers, producers, and importers
of taxable carbon substances under this section, and
``(2) carbon equivalency fees paid by importers of carbon
intensive goods used in the production of the comparable carbon
intensive goods in question.
``(b) Exports.--Notwithstanding the limitations of section 4692,
the Secretary shall allow as a credit or refund (without interest) to
the exporter of a carbon-intensive good produced in the United States
in the same manner as if it were an overpayment of tax imposed by
section 4691 an amount equivalent to the cost that domestic producers
of such carbon intensive goods incur as a result of--
``(1) taxes paid by manufacturers, producers, and importers
of taxable carbon substances under this section, and
``(2) carbon equivalency fees paid by importers of carbon
intensive goods used in the production of the comparable carbon
intensive goods in question.
``(c) Expiration.--This section shall cease to have effect at such
time as and to the extent that--
``(1)(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, or
``(B) the country of export has implemented equivalent
measures, and
``(2) the actions provided for by subsections (a) and (b)
are no longer appropriate.
``SEC. 4694. DEFINITIONS AND SPECIAL RULES.
``(a) Definitions.--For purposes of this subchapter--
``(1) Taxable carbon substance.--The term `taxable carbon
substance' means--
``(A) coal (including lignite and peat),
``(B) petroleum and any petroleum product (as
defined in section 4612(a)(3)), and
``(C) natural gas,
which is extracted, manufactured, or produced in the United
States or entered into the United States for consumption, use,
or warehousing.
``(2) United states.--The term `United States' has the
meaning given such term by section 4612(a)(4).
``(3) Importer.--The term `importer' means the person
entering the taxable carbon substance for consumption, use, or
warehousing.
``(4) Ton.--The term `ton' means metric tons. In the case
of any taxable carbon substance which is a gas, the term `ton'
means the amount of such gas in cubic feet which is the
equivalent of a metric ton on a molecular weight basis.
``(5) Carbon-intensive good.--The term `carbon-intensive
good' means a good that (as identified by the Secretary by
rule)--
``(A) is a primary product, or
``(B) is a manufactured item in which one or more
primary products are inputs and the cost of production
of which in the United States is significantly
increased by this subchapter.
``(6) Primary product.--The term `primary product' means--
``(A) iron, steel, steel mill products (including
pipe and tube), aluminum, cement, glass (including
flat, container, and specialty glass and fiberglass),
pulp, paper, chemicals, or industrial ceramics, and
``(B) 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 primary products identified in
subparagraph (A).
``(7) Equivalent measure.--The term `equivalent measure'
means a tax or other regulatory requirement that imposes a cost
on manufacturers of carbon intensive goods located outside the
United States approximately equal to the cost imposed by
section 4691 on manufacturers of comparable carbon intensive
goods located in the United States.
``(b) Use Treated as Sale.--If any person manufactures, produces,
or imports any taxable carbon substance and uses such substance, then
such person shall be liable for tax under section 4691 in the same
manner as if such substance were sold by such person.
``(c) Special Rules for Inventory Exchanges.--
``(1) In general.--Except as provided in this paragraph, in
any case in which a manufacturer, producer, or importer of a
taxable carbon substance exchanges such substance as part of an
inventory exchange with another person--
``(A) such exchange shall not be treated as a sale,
and
``(B) such other person shall, for purposes of
section 4691, be treated as the manufacturer, producer,
or importer of such substance.
``(2) Registration requirement.--Paragraph (1) shall not
apply to any inventory exchange unless--
``(A) both parties are registered with the
Secretary as manufacturers, producers, or importers of
taxable carbon substances, and
``(B) the person receiving the taxable carbon
substance 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.
``(3) Inventory exchange.--For purposes of this subsection,
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).
``(d) Regulations.--The Secretary shall prescribe such regulations
as may be necessary to carry out the purposes of this subchapter.''.
(b) Establishment of America's Energy Security 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. AMERICA'S ENERGY SECURITY TRUST FUND.
``(a) Creation of Trust Fund.--There is established in the Treasury
of the United States a trust fund to be known as `America's Energy
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) Transfers to Trust Fund.--There is hereby appropriated to the
Trust Fund an amount equivalent to the increase in revenues received in
the Treasury as the result of the tax imposed under section 4691.
``(c) Distribution of Amounts in Trust Fund.--Amounts in the Trust
Fund equivalent to the taxes received in the Treasury under section
4691 for a calendar year shall be available without further
appropriation, as follows:
``(1) First, the affected industry transition assistance
amount shall be available for transition assistance to workers
in industries negatively affected by the America's Energy
Security Trust Fund Act of 2014, as determined by the Secretary
of the Treasury in consultation with the Secretary of Labor.
``(2) Second, of the amount remaining after the application
of paragraph (1), the Highway Trust Fund shortfall amount shall
be available to be transferred to the Highway Trust Fund. For
purposes of this paragraph, the term `Highway Trust Fund
shortfall amount' means the amount determined by the Secretary
to be equal to the excess of--
``(A) the sum of the obligations of the United
States specified in section 9503(c)(1) plus the amounts
to be expended under section 9503(e)(3), over
``(B) the amounts available in the Highway Trust
Fund to meet those obligations and expenditures
(determined without regard to this paragraph or section
9503(f)(5)).
``(3) Third, the amount remaining after the application of
paragraph (1) shall be available for payroll tax relief under
the rebate paid under section 36C.
``(d) Affected Industry Transition Assistance Amount.--For purposes
of subsection (c)(1), the affected industry transition assistance
amount is the amount determined as follows:
``(1) For calendar year 2016, \1/10\ of the amount in the
Trust Fund equivalent to the taxes received in the Treasury
under section 4691 for calendar year 2016.
``(2) For calendar year 2017, \9/10\ of the amount made
available under paragraph (1) for calendar year 2016.
``(3) For calendar year 2018, \4/5\ of the amount made
available under paragraph (1) for calendar year 2016.
``(4) For calendar year 2019, \7/10\ of the amount made
available under paragraph (1) for calendar year 2016.
``(5) For calendar year 2020, \3/5\ of the amount made
available under paragraph (1) for calendar year 2016.
``(6) For calendar year 2021, \1/2\ of the amount made
available under paragraph (1) for calendar year 2016.
``(7) For calendar year 2022, \2/5\ of the amount made
available under paragraph (1) for calendar year 2016.
``(8) For calendar year 2023, \3/10\ of the amount made
available under paragraph (1) for calendar year 2016.
``(9) For calendar year 2024, \1/5\ of the amount made
available under paragraph (1) for calendar year 2016.
``(10) For calendar year 2025, \1/10\ of the amount made
available under paragraph (1) for calendar year 2016.
``(11) For calendar years after 2025, zero.''.
(c) Transfers to Highway Trust Fund.--Subsection (f) of section
9503 of the Internal Revenue Code of 1986 is amended by redesignating
paragraph (5) as paragraph (7) and by inserting after paragraph (4) the
following new paragraph:
``(5) Additional increase in fund balance.--There is hereby
transferred to the Highway Trust Fund amounts appropriated each
year from America's Energy Security Trust Fund under section
9512(c)(2). Such amounts shall be apportioned to the Highway
Account and the Mass Transit Account in accordance with
subsection (e)(5).''.
(d) Clerical Amendments.--
(1) The table of subchapters for chapter 38 of such Code is
amended by adding at the end thereof the following new item:
``subchapter e. tax on carbon dioxide content of certain substances''.
(2) The table of sections for subchapter A of chapter 98 of
such Code is amended by adding at the end the following:
``Sec. 9512. America's Energy Security Trust Fund.''.
(e) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 3. CARBON TAX REBATE OF PAYROLL TAX.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to refundable credits)
is amended by inserting after section 36B the following new section:
``SEC. 36C. CARBON TAX REBATE OF PAYROLL TAX.
``(a) In General.--In the case of an individual, there shall be
allowed as a credit against the tax imposed by this subtitle for the
taxable year an amount equal to the carbon tax rebate.
``(b) Carbon Tax Rebate.--
``(1) In general.--For purposes of this section, the term
`carbon tax rebate' means with respect to a taxable year the
individual's share of the amount determined by the Secretary on
a per capita basis to be the amount available under section
9512(c)(3) for the calendar year in which or with which the
taxable year begins.
``(2) Determination based on estimates.--The determination
under paragraph (1) shall be made on the basis of estimates by
the Secretary, and proper adjustments shall be made in amounts
available under section 9512(c)(3) for the succeeding taxable
year to the extent prior estimates were in excess of or less
than the amounts actually available under such section for the
prior taxable year.
``(c) Limitation Based on Payroll Taxes Paid and Social Security
Benefits.--
``(1) In general.--The amount allowed as a credit under
subsection (a) with respect to any individual for a taxable
year shall not exceed the greater of--
``(A) the total amount of taxes paid with respect
to such individual for such taxable year under section
1401 and chapters 21 and 22, determined after taking
into account any refund under section 31(b) and
6413(c), or
``(B) 10 percent of the aggregate amount of social
security benefits (within the meaning of section 86(d))
received by such individual for the taxable year.
``(2) Special rule for social security benefits received
for less than 12 months.--For purposes of paragraph (1)(B), if
Social Security benefits (as so defined) were not received for
each month in the taxable year, such benefits shall be
annualized by multiplying the Social Security benefits received
by 12 and dividing the result by the number of months in such
taxable year for which such benefits were received.
``(d) Denial of Credit to Dependents.--No credit shall be allowed
under subsection (a) to an individual for such individual's taxable
year if a deduction under section 151 with respect to such individual
is allowed to another taxpayer for a taxable year beginning in the
calendar year in which such individual's taxable year begins.''.
(b) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``36C,'' after ``36B,''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by inserting after the item relating to section 36C
the following new item:
``Sec. 36C. Carbon tax rebate of payroll tax.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2015.
SEC. 4. STUDY OF TAXATION OF NON-CARBON GREENHOUSE GASES.
(a) In General.--The Secretary of the Treasury, in consultation
with the Secretary of Energy shall conduct a study of the best methods
to assess and collect tax on non-carbon greenhouse gases similar to the
tax imposed by section 4691 of the Internal Revenue Code of 1986 (as
added by this Act).
(b) Report.--Not later than 6 months after the date of the
enactment of this Act, the Secretary of the Treasury shall submit to
the Congress the findings of the report required under subsection (a)
together with such legislative recommendations as the Secretary
determine appropriate for the assessment and collection of such tax.
SEC. 5. SENSE OF CONGRESS.
It is the sense of Congress that the United States should work
proactively under the United Nations Framework Convention on Climate
Change and in other appropriate fora to establish binding agreements
committing all major greenhouse gas emitting nations and countries with
globally competitive producers of carbon intensive goods to contribute
equitably to the reduction of global greenhouse gas emissions.
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