[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3977 Introduced in House (IH)]

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114th CONGRESS
  1st Session
                                H. R. 3977

 To amend the Internal Revenue Code of 1986 to impose a retail tax on 
                 carryout bags, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 5, 2015

 Mr. Lowenthal (for himself, Mr. Beyer, Mr. Blumenauer, Mr. Farr, Ms. 
  Lee, and Mr. Ted Lieu of California) introduced the following bill; 
which was referred to the Committee on Ways and Means, and in addition 
to the Committee on Natural Resources, 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 impose a retail tax on 
                 carryout bags, and for other purposes.

    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 ``Trash Reduction Act of 2015''.

SEC. 2. IMPOSITION OF TAX ON CARRYOUT BAGS.

    (a) General Rule.--Chapter 31 of the Internal Revenue Code of 1986 
(relating to retail excise taxes) is amended by inserting after 
subchapter C the following new subchapter:

                     ``Subchapter D--Carryout Bags

``Sec. 4056. Imposition of tax.

``SEC. 4056. IMPOSITION OF TAX.

    ``(a) General Rule.--There is hereby imposed on any retail sale a 
tax on each carryout bag.
    ``(b) Amount of Tax.--The amount of tax imposed by subsection (a) 
shall be $0.10 per carryout bag.
    ``(c) Liability for Tax.--The retailer shall be liable for the tax 
imposed by this section.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Carryout bag.--
                    ``(A) In general.--The term `carryout bag' means a 
                bag of any material, commonly plastic or kraft paper, 
                which is provided to a consumer at the point of sale to 
                carry or cover purchases, merchandise, or other items.
                    ``(B) Exceptions.--Such term does not include--
                            ``(i) any reusable bag that is distributed 
                        to a customer without charge during a limited 
                        duration promotional event,
                            ``(ii) any bag manufactured for use by a 
                        customer inside a store to package bulk items 
                        such as fruit, vegetables, nuts, grains, candy, 
                        or small hardware items, such as nails and 
                        bolts,
                            ``(iii) any bag that contains or wraps 
                        frozen foods, prepared foods, or baked goods 
                        when not prepackaged,
                            ``(iv) any bag manufactured for use by a 
                        pharmacist to contain prescription drugs, and
                            ``(v) any bag manufactured to be sold at 
                        retail in packages containing multiple bags 
                        intended for use as garbage, pet waste, or yard 
                        waste bags.
            ``(2) Reusable bag.--The term `reusable bag' means a bag 
        that is--
                    ``(A)(i) made of cloth or other machine washable 
                fabric, or
                    ``(ii) made of a durable plastic that is at least 
                2.25 millimeters thick, and
                    ``(B) is specifically designed and manufactured for 
                multiple use.
            ``(3) Limited duration promotional event.--A limited 
        duration promotional event shall not be treated as including 
        any day in a calendar year if limited duration promotional 
        events taken into account under paragraph (1)(B)(i) have 
        occurred on 7 or more preceding days during such calendar year.
    ``(e) Special Rules.--
            ``(1) Pass through of tax.--The tax imposed by subsection 
        (a) shall be passed through to the customer and shall be 
        separately stated on the receipt of sale provided to the 
        customer.
            ``(2) 1st retail sale; use treated as sale.--For purposes 
        of this section, rules similar to the rules of subsections (a) 
        and (b) of section 4002 shall apply.''.
    (b) Plastic Carryout Bag Recycling Program.--Subchapter B of 
chapter 65 of such Code is amended by adding at the end the following 
new section:

``SEC. 6433. QUALIFIED PLASTIC CARRYOUT BAG RECYCLING PROGRAM.

    ``(a) Allowance of Credit.--If--
            ``(1) tax has been imposed under section 4056 on any 
        carryout bag,
            ``(2) a retailer provides such bag to a customer in a point 
        of sale transaction,
            ``(3) in the case of a carryout bag made of paper, such 
        paper consists of not less than 40 percent post-consumer 
        recycled content,
            ``(4) such retailer has in effect at the time of such 
        transaction a qualified plastic carryout bag recycling program, 
        and
            ``(5) such retailer has kept and can produce records for 
        purposes of this section and section 4056 that include the 
        total number of carryout bags purchased and the amounts passed 
        through to the customer for such bags pursuant to section 
        4056(e),
the Secretary shall pay (without interest) to such retailer an amount 
equal to the applicable amount for each such bag used by the retailer 
in connection with a point of sale transaction.
    ``(b) Applicable Amount.--For purposes of subsection (a), the 
applicable amount is $0.04.
    ``(c) Qualified Plastic Carryout Bag Recycling Program.--For 
purposes of this section--
            ``(1) In general.--The term `qualified plastic carryout bag 
        recycling program' means a recycling program under which the 
        retailer--
                    ``(A) to the extent the retailer provides carryout 
                bags (as defined in section 4056) made of plastic to 
                customers--
                            ``(i) passes through the tax imposed by 
                        section 4056 and tracks the total number of 
                        bags purchased and amount of tax passed through 
                        pursuant to section 6433(a),
                            ``(ii) has printed or displayed on each 
                        such bag, in a manner clearly visible to a 
                        customer, the words `PLEASE RETURN TO A 
                        PARTICIPATING STORE FOR RECYCLING',
                            ``(iii) uses bags that are 100-percent 
                        recyclable, and
                            ``(iv) uses bags that are made of high-
                        density polyethylene film marked with the SPI 
                        resin identification code 2 or low-density 
                        polyethylene film marked with the SPI resin 
                        identification code 4,
                    ``(B) places at each place of business at which 
                retail operations are conducted one or more plastic 
                carryout bag collection bins which are visible, easily 
                accessible to the customer, and clearly marked as being 
                for the purpose of collecting and recycling plastic 
                carryout bags,
                    ``(C) recycles the plastic carryout bags collected 
                pursuant to subparagraph (B),
                    ``(D) maintains for not less than 3 years records 
                (which shall be available to the Secretary) describing 
                the collection, transport, and recycling of plastic 
                carryout bags collected,
                    ``(E) makes available to customers within the 
                retail establishment reusable bags (as defined in 
                section 4056(c)(2)) which may be purchased and used in 
                lieu of using a single-use carryout bag, and
                    ``(F) meets the definition of section 4056(d)(3).
            ``(2) Recycling program.--The term `recycling program' 
        means a program that processes used materials or waste 
        materials into new products to prevent waste of potentially 
        useful materials; reduce raw materials consumption; reduce 
        energy usage; reduce air, water, or other pollution; or reduce 
        the need for disposal.''.
    (c) 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. CARRYOUT BAG TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Carryout Bag 
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 amounts received in the Treasury 
pursuant to section 4056.
    ``(c) Expenditures From Trust Fund.--Amounts in the Trust Fund 
shall be available, as provided by appropriation Acts, for making 
payments under section 6433.
    ``(d) Transfer to Land and Water Conservation Fund.--
            ``(1) In general.--The Secretary shall pay from time to 
        time from the Trust Fund into the Land and Water Conservation 
        Fund provided for in title I of the Land and Water Conservation 
        Fund Act of 1965 amounts (as determined by the Secretary) 
        equivalent to the aggregate of the transactions on which tax is 
        imposed under section 4056 aggregate amounts determined on the 
        basis of $0.06.
            ``(2) Special rule regarding amounts transferred.--Amounts 
        transferred to the Land and Water Conservation Fund under 
        paragraph (1) shall not be taken into account for purposes of 
        determining amounts to be appropriated or credited to the fund 
        under section 2(c) of the Land and Water Conservation Fund Act 
        of 1965 (16 U.S.C. 460l-5(c)).''.
    (d) Study.--Not later than December 31, 2017, the Comptroller 
General of the United States shall conduct a study on the effectiveness 
of the provisions of this Act at reducing the use of carryout bags and 
encouraging recycling of such bags. The report shall address--
            (1) measures that the Comptroller General determines may 
        increase the effectiveness of such provisions, including the 
        amount of tax imposed on each carryout bag, and
            (2) any effects, both positive and negative, on any United 
        States businesses.
The Comptroller General shall submit a report of such study to the 
Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate.
    (e) Clerical Amendments.--
            (1) The table of subchapters for chapter 31 of such Code is 
        amended by inserting after the item relating to subchapter C 
        the following new item:

``Subchapter D. Carryout bags.''.
            (2) 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. Qualified plastic carryout bag recycling program.''.
            (3) 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. Carryout bag trust fund.''.
    (f) Effective Date.--The amendments made by this section shall take 
effect on July 1, 2016.
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