[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 763 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 763
To create a Carbon Dividend Trust Fund for the American people in order
to encourage market-driven innovation of clean energy technologies and
market efficiencies which will reduce harmful pollution and leave a
healthier, more stable, and more prosperous nation for future
generations.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 24, 2019
Mr. Deutch (for himself, Mr. Lipinski, Mr. Crist, Mr. Peters, Ms.
Eshoo, Ms. Judy Chu of California, and Mr. Rooney of Florida)
introduced the following bill; which was referred to the Committee on
Ways and Means, and in addition to the Committees on Energy and
Commerce, and 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 create a Carbon Dividend Trust Fund for the American people in order
to encourage market-driven innovation of clean energy technologies and
market efficiencies which will reduce harmful pollution and leave a
healthier, more stable, and more prosperous nation for future
generations.
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 ``Energy Innovation and Carbon
Dividend Act of 2019''.
SEC. 2. FINDINGS.
The Congress finds that--
(1) efficient markets strengthen our economy and benefit
our Nation by encouraging competition, innovation, and
technological progress;
(2) efficient markets should reflect all costs of goods to
ensure that they advance America's prosperity and national
interests;
(3) emissions of carbon pollution and other harmful
pollutants into our Nation's air impose substantial costs on
all Americans and on future generations; and
(4) creation of a Carbon Dividend Trust Fund, to be
distributed to the American people, will make markets more
efficient, create jobs, and stimulate competition, innovation,
and technological progress that benefit all Americans and
future generations.
SEC. 3. CARBON DIVIDENDS AND CARBON FEE.
(a) In General.--The Internal Revenue Code of 1986 is amended by
adding at the end the following new subtitle:
``Subtitle L--CARBON DIVIDENDS AND CARBON FEE
``Chapter 101. Carbon Fees.
``Chapter 102. Carbon Border Fee Adjustment.
``CHAPTER 101--CARBON FEES
``Sec. 9901. Definitions.
``Sec. 9902. Carbon fee.
``Sec. 9903. Emissions reduction schedule.
``Sec. 9904. Fee on fluorinated greenhouse gases.
``Sec. 9905. Decommissioning of Carbon Administration.
``Sec. 9906. Carbon Capture and Sequestration.
``Sec. 9907. Administrative authority.
``SEC. 9901. DEFINITIONS.
``For purposes of this subtitle:
``(a) Administrator.--The term `Administrator' means the
Administrator of the Environmental Protection Agency.
``(b) Carbon Dioxide Equivalent or CO<INF>2</INF>-e.--The term
`carbon dioxide equivalent' or `CO<INF>2</INF>-e' means the number of
metric tons of carbon dioxide emissions with the same global warming
potential as one metric ton of another greenhouse gas.
``(c) Carbon-Intensive Product.--The term `carbon-intensive
product' means, as identified by the Secretary by rule--
``(1) any manufactured or agricultural product which the
Secretary in consultation with the Administrator determines is
emissions-intensive and trade-exposed, except that no covered
fuel is a carbon-intensive product, and
``(2) until such time that the Secretary promulgates rules
identifying carbon-intensive products, the following shall be
considered carbon-intensive products: 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.
``(d) Carbon Leakage.--The term `carbon leakage' means an increase
of global greenhouse gas emissions which are substantially due to the
relocation of greenhouse gas sources from the United States to
jurisdictions which lack comparable controls upon greenhouse gas
emissions.
``(e) Cost of Carbon or Carbon Costs.--The term `cost of carbon' or
`carbon costs' means a national or sub-national government policy which
explicitly places a price on greenhouse gas pollution and shall be
limited to either a tax on greenhouse gases or a system of cap-and-
trade. The cost of carbon is expressed as the price per metric ton of
CO<INF>2</INF>-e.
``(f) Covered Entity.--The term `covered entity' means--
``(1) in the case of crude oil--
``(A) a refinery operating in the United States,
and
``(B) any importer of any petroleum or petroleum
product into the United States,
``(2) in the case of coal--
``(A) any coal mining operation in the United
States, and
``(B) any importer of coal into the United States,
``(3) in the case of natural gas--
``(A) any entity entering pipeline quality natural
gas into the natural gas transmission system, and
``(B) any importer of natural gas into the United
States,
``(4) in the case of fluorinated gases any entity required
to report the emission of a fluorinated gas under part 98 of
title 40, Code of Federal Regulations, and
``(5) any entity or class of entities which, as determined
by the Secretary, is transporting, selling, or otherwise using
a covered fuel in a manner which emits a greenhouse gas to the
atmosphere and which has not been covered by the carbon fee,
the fluorinated greenhouse gas fee, or the carbon border fee
adjustment.
``(g) Covered Fuel.--The term `covered fuel' means crude oil,
natural gas, coal, or any other product derived from crude oil, natural
gas, or coal which shall be used so as to emit greenhouse gases to the
atmosphere.
``(h) Crude Oil.--The term `crude oil' means unrefined petroleum.
``(i) Export.--The term `export' means to transport a product from
within the jurisdiction of the United States to persons outside the
United States.
``(j) Fluorinated Greenhouse Gas.--The term `fluorinated greenhouse
gas' means sulfur hexafluoride (SF<INF>6</INF>), nitrogen trifluoride
(NF<INF>3</INF>), and any fluorocarbon except for controlled substances
as defined in subpart A of part 82 of title 40, Code of Federal
Regulation, and substances with vapor pressures of less than 1 mm of Hg
absolute at 25 degrees. With these exceptions, `fluorinated greenhouse
gas' includes but is not limited to any hydrofluorocarbon, any
perfluorocarbon, any fully fluorinated linear, branched or cyclic
alkane, ether, tertiary amine or aminoether, any perfluoropolyether,
and any hydrofluoropolyether.
``(k) Fossil Fuel.--The term `fossil fuel' means coal, coal
products, petroleum, petroleum products, or natural gas.
``(l) Full Fuel Cycle Greenhouse Gas Emissions.--The term `full
fuel cycle greenhouse gas emissions' means the greenhouse gas content
of a covered fuel plus that covered fuel's upstream greenhouse gas
emissions.
``(m) Global Warming Potential.--The term `global warming
potential' means the ratio of the time-integrated radiative forcing
from the instantaneous release of one kilogram of a trace substance
relative to that of one kilogram of carbon dioxide.
``(n) Greenhouse Gas.--The term `greenhouse gas' means carbon
dioxide (CO<INF>2</INF>), methane (CH<INF>4</INF>), nitrous oxide
(N<INF>2</INF>O), sulfur hexafluoride (SF<INF>6</INF>),
hydrofluorocarbons (HFCs), perfluorocarbon (PFCs), and other gases as
defined by rule of the Administrator.
``(o) Greenhouse Gas Content.--The term `greenhouse gas content'
means the amount of greenhouse gases, expressed in metric tons of
CO<INF>2</INF>-e, which would be emitted to the atmosphere by the use
of a covered fuel and shall include, nonexclusively, emissions of
carbon dioxide (CO<INF>2</INF>), nitrous oxide (N<INF>2</INF>O),
methane (CH<INF>4</INF>), and other greenhouse gases as identified by
rule of the Administrator.
``(p) Greenhouse Gas Effect.--The term `greenhouse gas effect'
means the adverse effects of greenhouse gases on health or welfare
caused by the greenhouse gas's heat-trapping potential or its effect on
ocean acidification.
``(q) Import.--Irrespective of any other definition in law or
treaty, the term `import' means to land on, bring into, or introduce
into any place subject to the jurisdiction of the United States.
``(r) Petroleum.--The term `petroleum' means oil removed from the
earth or the oil derived from tar sands or shale.
``(s) Production Greenhouse Gas Emissions.--The term `production
greenhouse gas emissions' means the quantity of greenhouse gases,
expressed in metric tons of CO<INF>2</INF>-e, emitted to the atmosphere
resulting from, nonexclusively, the production, manufacture, assembly,
transportation, or financing of a product.
``(t) Upstream Greenhouse Gas Emissions.--The term `upstream
greenhouse gas emissions' means the quantity of greenhouse gases,
expressed in metric tons of CO<INF>2</INF>-e, emitted to the atmosphere
resulting from, nonexclusively, the extraction, processing,
transportation, financing, or other preparation of a covered fuel for
use.
``SEC. 9902. CARBON FEE.
``(a) Carbon Fee.--There is hereby imposed a carbon fee on any
covered entity's emitting use, or sale or transfer for an emitting use,
of any covered fuel.
``(b) Amount of the Carbon Fee.--The carbon fee imposed by this
section is an amount equal to--
``(1) the greenhouse gas content of the covered fuel,
multiplied by
``(2) the carbon fee rate.
``(c) Carbon Fee Rate.--For purposes of this section--
``(1) In general.--The carbon fee rate, with respect to any
use, sale, or transfer during a calendar year, shall be--
``(A) in the case of calendar year 2019, $15, and
``(B) except as provided in paragraph (2), in the
case of any calendar year thereafter--
``(i) the carbon fee rate in effect under
this subsection for the preceding calendar
year, plus
``(ii) $10.
``(2) Exceptions.--
``(A) Increased carbon fee rate after missed annual
emissions reduction target.--In the case of any year
immediately following a year for which the Secretary
determines under 9903(b) that the actual emissions of
greenhouse gases from covered fuels exceeded the
emissions reduction target for the previous year,
paragraph (1)(B)(ii) shall be applied by substituting
`$15' for the dollar amount otherwise in effect for the
calendar year under such paragraph.
``(B) Cessation of carbon fee rate increase after
certain emission reductions achieved.--In the case of
any year immediately following a year for which the
Secretary determines under 9903(b) that actual
emissions of greenhouse gases from covered fuels is not
more than 10 percent of the greenhouse gas emissions
from covered fuels during the year 2016, paragraph
(1)(B)(ii) shall be applied by substituting `$0' for
the dollar amount otherwise in effect for the calendar
year under such paragraph.
``(3) Inflation adjustment.--In the case of any calendar
year after 2019, each of the dollar amounts in paragraphs
(1)(A), (1)(B)(ii), and (2)(A) shall be increased by an amount
equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year, determined
by substituting `calendar year 2018' for `calendar year
2016' in subparagraph (A)(ii) thereof.
``(d) Exemption and Refund.--The Secretary shall prescribe such
rules as are necessary to ensure the fee imposed by this section is not
imposed with respect to any nonemitting use, or any sale or transfer
for a nonemitting use, including rules providing for the refund of any
carbon fee paid under this section with respect to any such use, sale,
or transfer.
``(e) Exemptions.--
``(1) Agriculture.--
``(A) Fuel.--If any covered fuel or its derivative
is used on a farm for a farming purpose, the Secretary
shall pay (without interest) to the ultimate purchaser
of such covered fuel or its derivative, the total
amount of carbon fees previously paid upon that covered
fuel or its derivative, as specified by rule of the
Secretary.
``(B) Farm, farming use, and farming purpose.--The
terms `farm', `farming use', and `farming purpose'
shall have the respective meanings given such terms
under section 6420(c).
``(C) Other greenhouse gases emissions from
agriculture.--The carbon fee shall not be levied upon
non-fossil fuel greenhouse gas emissions which occur on
a farm.
``(2) Armed forces of the united states.--If any covered
fuel or its derivative is used by the Armed Forces of the
United States as supplies for vessels of war, vehicles, or
electrical power generation equipment, the Secretary shall pay
(without interest) to the ultimate purchaser of such covered
fuel or its derivative, the total amount of carbon fees
previously paid upon that covered fuel or its derivative, as
specified by rule of the Secretary.
``SEC. 9903. EMISSIONS REDUCTION SCHEDULE.
``(a) In General.--An emissions reduction schedule for greenhouse
gas emissions from covered fuels is hereby established, as follows:
``(1) Reference year.--The greenhouse gas emissions from
covered fuels during the year 2016 shall be the reference
amount of emissions and shall be determined from the `Inventory
of U.S. Greenhouse Gas Emissions and Sinks: 1990-2016'
published by the Environmental Protection Agency in April of
2018.
``(2) Emissions reduction target.--The first emission
reduction target shall be for the year 2022. The emission
target for each year thereafter shall be the previous year's
target emissions minus a percentage of emissions during the
reference year determined in accordance with the following
table:
----------------------------------------------------------------------------------------------------------------
``Year Emissions Reduction Target
----------------------------------------------------------------------------------------------------------------
2016 Reference year
----------------------------------------------------------------------------------------------------------------
2020 to 2024 No emissions reduction target
----------------------------------------------------------------------------------------------------------------
2025 to 2034 5 percent of 2016 emissions per year
----------------------------------------------------------------------------------------------------------------
2035 to 2050 2.5 percent of 2016 emissions per year
----------------------------------------------------------------------------------------------------------------
``(b) Administrative Determination.--Not later than 60 days after
the beginning of each calendar year beginning after the enactment of
this section, the Secretary, in consultation with the Administrator,
shall determine whether actual emissions of greenhouse gases from
covered fuels exceeded the emissions reduction target for the preceding
calendar year. The Secretary shall make such determination using the
same greenhouse gas accounting method as was used to determine the
greenhouse gas emissions in the `Inventory of U.S. Greenhouse Gas
Emissions and Sinks: 1990-2016' published by the Environmental
Protection Agency in April of 2018.
``SEC. 9904. FEE ON FLUORINATED GREENHOUSE GASES.
``(a) Fluorinated Gas Fee.--A fee is hereby imposed upon any
fluorinated greenhouse gas which is required to be reported under part
98 of title 40, Code of Federal Regulations.
``(b) Amount.--The fee to be paid by the covered entity required to
so report shall be an amount equal to--
``(1) the total amount, in metric tons of CO<INF>2</INF>-e,
of emitted fluorinated greenhouse gases (or, in the case of a
supplier, emissions that would result determined under the
rules of such part), multiplied by
``(2) an amount equal to 10 percent of the carbon fee rate
in effect under section 9902(d)(1) for the calendar year of
such emission.
``SEC. 9905. DECOMMISSIONING OF CARBON FEE.
``(a) In General.--At such time that--
``(1) the Secretary determines under 9903(b) that actual
emissions of greenhouse gases from covered fuels is not more
than 10 percent of the greenhouse gas emissions from covered
fuels during the year 2016, and
``(2) the monthly carbon dividend payable to an adult
eligible individual has been less than $20 for 3 consecutive
years,
the Secretary shall decommission in an orderly manner all bureaus and
programs associated with administering the carbon fee, the carbon
border fee adjustment, and the Carbon Dividend Trust Fund.
``(b) Inflation Adjustment.--In the case of any calendar year after
2020, the $20 amount under subsection (a)(2) shall be increased by an
amount equal to--
``(1) such dollar amount, multiplied by
``(2) cost-of-living adjustment determined under section
1(f)(3) for the calendar year, determined by substituting
`calendar year 2017' for `calendar year 2016' in subparagraph
(A)(ii) thereof.
``SEC. 9906. CARBON CAPTURE AND SEQUESTRATION.
``(a) In General.--The Secretary, in consultation with the
Administrator and the Secretary of Energy, shall prescribe regulations
for making payments as provided in subsection (b) to qualified
facilities which capture and sequester qualified carbon dioxide.
``(b) Payment Amounts.--
``(1) In general.--The Secretary shall make payments to a
qualified facility in the same manner as if such payment was a
refund of an overpayment of the carbon fee imposed by section
9902, in cases in which such qualified facility--
``(A) uses any covered fuel--
``(i) with respect to which the carbon fee
has been paid, and
``(ii) which results in the emission of
qualified carbon dioxide,
``(B) captures such emitted qualified carbon
dioxide, and
``(C)(i) sequesters such qualified carbon dioxide
in a manner which is safe, permanent, and in compliance
with any applicable local, State, and Federal laws, or
``(ii) utilizes such qualified carbon dioxide in a
manner provided in paragraph (3)(C).
``(2) Amount of refund.--The payment determined under this
section shall be an amount equal to the lesser of--
``(A)(i) the adjusted metric tons of qualified
carbon dioxide captured and sequestered or utilized,
multiplied by
``(ii) the carbon fee rate during the year in which
the carbon fee was imposed by section 9902 upon the
covered fuel to which such carbon dioxide relates, or
``(B) the amount of the carbon fee imposed by
section 9902 with respect to such covered fuel.
``(3) Definitions and special rules.--For purposes of this
section--
``(A) Qualified carbon dioxide; qualified
facility.--
``(i) Qualified carbon dioxide.--The term
`qualified carbon dioxide' has the same meaning
given such term under section 45Q(b).
``(ii) Qualified facility.--The term
`qualified facility' means any industrial
facility at which carbon capture equipment is
placed in service.
``(B) Adjusted total metric tons.--The adjusted
total metric tons of qualified carbon dioxide captured
and sequestered or utilized shall be the total metric
tons of qualified carbon dioxide captured and
sequestered or utilized, reduced by the amount of any
carbon dioxide likely to escape and be emitted into the
atmosphere due to imperfect storage technology or
otherwise, as determined by the Secretary in
consultation with the Administrator.
``(C) Utilization.--The Secretary, in consultation
with the Administrator, shall establish regulations
providing for the methods and processes by which
qualified carbon dioxide may be utilized so as to
remove that qualified dioxide safely and permanently
from the atmosphere. Utilization may include the
production of substances such as but not limited to
plastics and chemicals. Such regulations shall minimize
the escape or further emission of the qualified carbon
dioxide into the atmosphere.
``(D) Sequestration.--Not later 540 days after the
date of the enactment of this section, the Secretary,
in consultation with the Administrator, shall prescribe
regulations identifying the conditions under which
carbon dioxide may be safely and permanently
sequestered.
``(4) Coordination with credit for carbon dioxide
sequestration.--At such time that the Secretary prescribes
regulations implementing this section, no payment under this
section shall be allowed to a taxpayer to whom a credit has
been allowed for any taxable year under section 45Q.
``SEC. 9907. ADMINISTRATIVE AUTHORITY.
``(a) In General.--The Secretary in consultation with the
Administrator shall prescribe such regulations, and other guidance, as
may be necessary to carry out the purposes of this subtitle and assess
and collect the carbon fee imposed by section 9902 and the fluorinated
greenhouse gas fee imposed by section 9904.
``(b) Specifically.--Such regulations and guidance shall include--
``(1) the identification of an effective point in the
production, distribution, or use of a covered fuel or
fluorinated greenhouse gas for collecting such carbon fee or
fluorinated greenhouse gas fee, in such a manner so as to
minimize administrative burden and maximize the extent to which
full fuel cycle greenhouse gas emissions from covered fuels or
fluorinated greenhouse gases have the carbon fee or fluorinated
greenhouse gas fee levied upon them,
``(2) the identification of covered entities which shall be
liable for the payment of the carbon fee or the fluorinated
greenhouse gas fee,
``(3) requirements for the monthly payment of such fees,
``(4) as may be necessary or convenient, rules for
distinguishing between different types of covered fuels,
``(5) as may be necessary or convenient, rules for
distinguishing between a covered fuel's greenhouse gas content
and its upstream greenhouse gas emissions,
``(6) rules to ensure that no covered fuel or fluorinated
greenhouse gas has the carbon fee, fluorinated greenhouse gas
fee, or carbon border fee adjustment imposed upon it more than
once, and
``(7) rules to ensure that the domestic implementation of
the carbon fee and the fluorinated greenhouse gas fee
coordinate with the implementation of the carbon border fee
adjustment of chapter 102.
``CHAPTER 102--CARBON BORDER FEE ADJUSTMENT
``Sec. 9908. Carbon border fee adjustment.
``Sec. 9909. Administration of the carbon border fee adjustment.
``Sec. 9910. Allocation of carbon border fee adjustment revenues.
``SEC. 9908. CARBON BORDER FEE ADJUSTMENT.
``(a) In General.--The fees imposed by, and refunds allowed under,
this section shall be referred to as `the carbon border fee
adjustment'.
``(b) Purpose.--The purpose of the carbon border fee adjustment is
to protect animal, plant, and human life and health, to conserve
exhaustible natural resources by preventing carbon leakage, and to
facilitate the creation of international agreements.
``(c) Imported Covered Fuels Fee.--In the case of any person that
imports into the United States any covered fuel, there shall be imposed
a fee equal to the excess (if any) of--
``(1) an amount equal to--
``(A) the amount of full fuel cycle greenhouse gas
emissions of such fuel, multiplied by
``(B) the carbon fee rate in effect for the year in
which such fuel is imported, over
``(2) the total foreign cost of carbon carried by such
fuel.
``(d) Imported Carbon-Intensive Products Fee.--In the case of any
person that imports into the United States any carbon-intensive
products, there shall be imposed a fee equal to the excess (if any)
of--
``(1) an amount equal to--
``(A) production greenhouse gas emissions of such
product, multiplied by
``(B) the carbon fee rate in effect for the year in
which the production greenhouse gas emissions of such
product were emitted into the atmosphere, over
``(2) the total foreign cost of carbon carried by such
product.
``(e) Refund on Exports From United States.--
``(1) Carbon-intensive products.--Under regulations
prescribed by the Secretary, there shall be allowed a credit or
refund (without interest) to exporters of carbon-intensive
products manufactured or produced in the United States an
amount equal to the excess (if any) of--
``(A) an amount equal to--
``(i) the production greenhouse gas
emissions of the exported carbon-intensive
product, multiplied by
``(ii) the carbon fee rate during the year
in which the carbon fee or fluorinated
greenhouse gas fee was paid upon the production
greenhouse gas emissions of the exported
carbon-intensive product, over
``(B) any total cost of carbon to be levied upon
the carbon-intensive product by any jurisdiction to
which the carbon-intensive product is to be imported.
Any such credit or refund shall be allowed in the same manner
as if it were an overpayment of the fee imposed by section 9902
or 9904. The Secretary shall establish fair, timely, impartial,
and as necessary confidential procedures by which any exporter
of any product from the United States may petition the
Secretary to include that exported product on the list of
carbon-intensive products.
``(2) Covered fuels.--Under regulations prescribed by the
Secretary, in the case of a covered fuel produced in the United
States with respect to which the fee under section 9902 was
paid, there shall be allowed as a credit or refund (without
interest) to any exporter of such covered fuels an amount equal
to the excess (if any) of--
``(A) an amount equal to--
``(i) the full fuel cycle greenhouse gas
emissions of the covered fuel, multiplied by
``(ii) the carbon fee rate at the time the
carbon fee was paid upon the full fuel cycle
greenhouse gas emissions of the exported
covered fuel, over
``(B) any total cost of carbon to be levied upon
the covered fuel by a jurisdiction to which the carbon-
intensive product is to be imported.
Any such credit or refund shall be allowed in the same manner
as if it were an overpayment of tax imposed by section 9902.
``(f) Definitions.--For purposes of this section--
``(1) Foreign cost of carbon; foreign carbon costs.--The
term `foreign cost of carbon' or `foreign carbon cost' means
the cost of any laws of a foreign jurisdiction which impose a
system of cap-and-trade with respect to, or a tax or fee on,
greenhouse gas. Such cost shall be determined and expressed as
a price per metric ton of CO<INF>2</INF>-e.
``(2) Total cost of carbon carried.--The term `total cost
of carbon carried' means an amount equal to--
``(A) the production greenhouse gas emissions of a
carbon-intensive product or the full fuel cycle
greenhouse gas emissions of a covered fuel, multiplied
by
``(B) the cost of carbon with respect to such
product or fuel, reduced by any amount refunded with
respect to such product or fuel by a foreign
jurisdiction.
The total cost of carbon carried shall be expressed as price in
United States dollars.
``(3) Total foreign cost of carbon carried.--The term
`total foreign cost of carbon carried' means an amount equal
to--
``(A) the production greenhouse gas emissions of a
carbon-intensive product, or the full fuel cycle
greenhouse gas emissions of a covered fuel, multiplied
by
``(B) the foreign cost of carbon with respect to
such product or fuel, reduced by the amount refunded
with respect to such product or fuel by a foreign
jurisdiction.
The total foreign cost of carbon carried shall be expressed as
price in United States dollars.
``SEC. 9909. ADMINISTRATION OF THE CARBON BORDER FEE ADJUSTMENT.
``(a) Generally.--The Secretary in consultation with the
Administrator shall prescribe regulations and guidance which implement
the carbon border fee adjustment under section 9908.
``(b) Collaboration.--In determining the production greenhouse gas
emissions of an imported carbon-intensive product, the upstream
greenhouse gas emissions of an imported covered fuel, the full fuel
cycle greenhouse gas emissions of an imported covered fuel, or the
foreign cost of carbon, or otherwise administering the carbon border
fee adjustment, it is the sense of Congress that the Secretary should
collaborate with authorized officers of any jurisdiction, including
sub-national governments, affected by the carbon border fee adjustment.
``(c) Methodology.--In determining the production greenhouse gas
emissions of an imported carbon-intensive product, the upstream
greenhouse gas emissions of an imported covered fuel, the full fuel
cycle greenhouse gas emissions of an imported covered fuel, or the
foreign cost of carbon, the Secretary shall use reliable methodologies,
which--
``(1) as may be necessary or convenient--
``(A) distinguish between different types of
covered fuels,
``(B) distinguish between a covered fuel's
greenhouse gas content and that covered fuel's upstream
greenhouse gas emissions,
``(C) distinguish between the different types of
greenhouse gas emissions which compose a covered fuel's
upstream greenhouse gas emissions or greenhouse gas
content, as well as the various processes which
produced those emissions, and
``(D) distinguish between the different types of
greenhouse gas emissions which compose a carbon-
intensive product's production greenhouse gas
emissions, as well as the various processes which
produced those emissions,
``(2) ensure that no covered fuel, covered fluorinated
greenhouse gas, or carbon-intensive product has the carbon fee,
the fluorinated greenhouse gas fee, or the border fee
adjustment imposed upon it more than once,
``(3) ensure that the implementation of the border carbon
adjustment aligns with the carbon fee and the fluorinated gas
fee,
``(4) in the case of incomplete data, rely upon the best
available methodologies for interpolating data gaps, and
``(5) are consistent with international treaties and
agreements.
``(d) Schedule.--The Secretary shall determine--
``(1) not later than 3 years after the date of the
enactment of this section, the production greenhouse gas
emissions of imported carbon-intensive products,
``(2) not later than 180 days after the date of the
enactment of this section, the full fuel cycle greenhouse gas
emissions and the upstream greenhouse gas emissions of every
imported covered fuel, and
``(3) not later than 3 years after the date of the
enactment of this section, the foreign cost of carbon in all
jurisdictions.
``(e) Procedure.--The Secretary shall establish fair, timely,
impartial, and as necessary confidential procedures by which the
importer of any carbon-intensive product or any covered fuel may
petition the Secretary to revise the Secretary's determination of the
production greenhouse gas emissions, full fuel cycle greenhouse gas
emissions, or upstream greenhouse gas emissions of that importer's
imported covered fuel or imported carbon-intensive product, or the
foreign cost of carbon carried by that importer's imported carbon-
intensive product.
``(f) Shipments From the United States to the Territories of the
United States.--Notwithstanding any other treaty, law, or policy,
shipments of covered fuels or carbon-intensive products from the United
States to Guam, the United States Virgin Islands, Samoa, Puerto Rico,
and the Northern Mariana Islands shall be eligible for a refund of the
carbon fee under section 9908(e).
``(g) Imports to the Territories of the United States.--
Notwithstanding any other treaty, law, or policy, imports of covered
fuels or carbon-intensive products to Guam, the United States Virgin
Islands, Samoa, Puerto Rico, and the Northern Mariana Islands shall not
be subject to Section 9908(c) or 9908(d).''
``SEC. 9910. ALLOCATION OF CARBON BORDER FEE ADJUSTMENT REVENUES.
``The revenues collected under this chapter may be used to
supplement appropriations made available in fiscal years 2020 and
thereafter--
``(1) to U.S. Customs and Border Protection, in such
amounts as are necessary to administer the carbon border fee
adjustment, then
``(2) to the Department of Treasury, in such amounts as are
necessary to allow refunds under section 9908(e) to exporters
of carbon-intensive products and exporters of covered fuels.''.
(b) Coordination With Carbon Oxide Sequestration Credit.--Section
45Q(f) is amended by adding at the end the following new paragraph:
``(8) Coordination with carbon capture and sequestration
payments.--No credit shall be allowed under this section to a
taxpayer which has received any payment under section 9906.''.
(c) Treaties and International Negotiations.--
(1) Conformance with international treaties.--In the case
that the Appellate Body of the World Trade Organization, or any
other authoritative international treaty interpreter, shall
find any portion of the carbon border fee adjustment under
chapter 102 of the Internal Revenue Code of 1986 to violate any
treaty to which the United States is a party, the Secretary of
the Treasury is authorized to alter any aspect of such carbon
border fee adjustment so as to bring the carbon border fee
adjustment into conformance with international law.
(2) International negotiations.--The Congress finds the
international mitigation of greenhouse gas emissions to be of
national importance. Therefore, the Congress encourages the
Secretary of State, or the Secretary's designee, to commence
and complete negotiations with other nations with the goal of
forming treaties, environmental agreements, accords,
partnerships or any other instrument that effectively reduces
global greenhouse gas emissions to 10 percent of 2016 levels by
2050 and which respect the principle of common but
differentiated responsibilities and respective capabilities.
(3) Suspension of the carbon border fee adjustment.--Any
part of the carbon border fee adjustment shall be suspended, in
whole or in part,--
(A) by treaty or other international agreement
which includes provisions for the suspension of the
carbon border fee adjustment, in whole or in part, with
any party signatory to the treaty or other
international agreement, or
(B) by a finding of the Secretary that a
jurisdiction of importation has implemented policies
which, in the case of high emitting countries, reduce
greenhouse gas emissions at a rate at least equivalent
to United States greenhouse gas emission reductions,
or, in the case of low emitting countries, prevent the
increase in greenhouse gas emissions.
Any such finding shall be reviewed at least every 3 years and
amended or revoked as required.
SEC. 4. ESTABLISHMENT OF THE CARBON DIVIDEND TRUST FUND.
(a) In General.--Subchapter A of chapter 98 of the Internal Revenue
Code of 1986 is amended by adding at the end the following:
``SEC. 9512. CARBON DIVIDEND TRUST FUND.
``(a) Establishment and Funding.--There is hereby established in
the Treasury of the United States a trust fund to be known as the
`Carbon Dividend Trust Fund', consisting of such amounts as may be
appropriated to such trust fund as provided for in this section.
``(b) Transfers to the Carbon Dividend Trust Fund.--There is hereby
appropriated to the Carbon Dividend Trust Fund amounts equal to the
fees received into the Treasury less any amounts refunded or paid under
section 9902(d) or 9906 of chapter 101 for each month.
``(c) Expenditures.--Amounts in the trust fund shall be available
for the following purposes:
``(1) Administrative expenses.--So much of the expenses
necessary to administer the Carbon Dividend Trust Fund for each
year, as does not exceed--
``(A) in the case of the first 5 calendar years
ending after the date of the enactment of this section,
the administrative expenses for any year may not exceed
8 percent of amounts appropriated to the Carbon
Dividend Trust Fund during such year, and
``(B) in the case of any calendar year thereafter,
2 percent of the 5-year rolling average of the amounts
appropriated to the Carbon Dividend Trust Fund, and
``(2) Other administrative expenses.--So much of the
expenses as are necessary to administer chapter 101 for any
year as does not to exceed 0.60 percent of the amounts
appropriated to the Carbon Dividend Trust Fund for the previous
year, and further limited as follows:
``(A) The Department of the Treasury.
``(B) The Social Security Administration.
``(C) The Environmental Protection Agency.
``(D) Department of State.
``(3) Carbon dividend payments.--
``(A) In general.--From the amounts in the Carbon
Dividend Trust Fund made available under paragraphs (1)
and (2) of this subsection for any year, the Secretary
shall for each month beginning more than 270 days after
the date of the enactment of the Energy Innovation and
Carbon Dividend Act of 2019, make carbon dividend
payments to each eligible individual.
``(B) Pro-rata share.--A carbon dividend payment is
one pro-rata share for each adult, and half a pro-rata
share for each child under 19 years old, of amounts
available for the month in the Carbon Dividend Trust
Fund.
``(C) Eligible individual.--The term `eligible
individual' means, with respect to any month, any
natural living person who has a valid Social Security
number or taxpayer identification number and is a
citizen or lawful resident of the United States (other
than any individual who is a citizen of any possession
of the United States and whose bona fide residence is
outside of the United States). The Secretary is
authorized to verify an individual's eligibility to
receive a carbon dividend payment.
``(D) Fee treatment of payments.--Amounts paid
under this subsection shall be includible in gross
income.
``(E) Federal programs and federal assisted
programs.--The carbon dividend amount received by any
individual shall not be taken into account as income
and shall not be taken into account as resources for
purposes of determining the eligibility of such
individual or any other individual for benefits or
assistance, or the amount or extent of benefits or
assistance, under any Federal program or under any
State or local program financed in whole or in part
with Federal funds.
``(F) Advance payment.--The Secretary shall
transfer to the Carbon Dividend Trust Fund such amounts
as are necessary for the disbursement of an advanced
carbon dividend to all eligible individuals as follows:
``(i) An advanced carbon dividend shall be
the same as the anticipated first carbon
dividend required to be distributed under
subparagraph (A) and shall be distributed the
month prior to the first collection of the
carbon fee.
``(ii) Total amounts disbursed as advanced
carbon dividends shall be deducted from the
carbon dividends on a pro-rata basis over the
first 3 years after the disbursement of the
first carbon dividends.
``(d) Administrative Authority.--The Secretary shall promulgate
rules, guidance, and regulations useful and necessary to implement the
Carbon Dividend Trust Fund.''.
(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. Carbon Dividend Trust Fund.''.
SEC. 5. LIMITED DISCLOSURE OF INFORMATION.
Section 6103(l) of the Internal Revenue Code of 1986 is amended by
adding at the end the following new paragraphs:
``(23) Limited disclosure of identity information relating
to carbon dividend payments.--
``(A) Department of 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
administering section 9512 (relating the Carbon
Dividend Trust Fund).
``(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 is necessary to administer
section 9512.
``(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.''.
SEC. 6. NATIONAL ACADEMY OF SCIENCES REVIEW OF CARBON FEE AND EMISSIONS
REDUCTION SCHEDULE.
(a) In General.--Not later than 10 years after the date of the
enactment of this Act, the Secretary of Energy shall enter into an
agreement with the National Academy of Sciences to prepare a report
relating to the carbon fee imposed by section 9902 of the Internal
Revenue Code of 1986 and the emissions reductions schedule established
under section 9903 of such Code.
(b) Report Requirements.--Such report shall--
(1) assess the efficiency and effectiveness of the carbon
fee in achieving the emissions reduction targets set forth in
section 9903 of such Code;
(2) describe and make recommendations on whether the carbon
fee rate and annual increases prescribed by section 9902(c) of
such Code should be adjusted in order to optimize the
efficiency and effectiveness of this Act in achieving the
emissions reduction targets set forth in section 9903 of such
Code;
(3) describe the potential of the carbon fee to achieve
future emissions targets set forth in section 9903(a) of such
Code through the year 2050;
(4) describe and evaluate the effectiveness of the carbon
fee in reducing emissions from key sectors of the economy,
including sectors of the economy that have decreased their
carbon emissions, sectors of the economy that have increased
their carbon emissions, and sectors of the economy in which
carbon emissions have not changed;
(5) make findings and recommendations to Federal
departments and agencies and to Congress on actions that could
be taken to reduce carbon emissions in the sectors of the
economy in which carbon emissions have not decreased;
(6) make findings and recommendations on adjusting
regulations enacted under the Clean Air Act and other Federal
laws that affect economic sectors achieving the emissions
reduction targets set forth in section 9903 of such Code; and
(7) provide an assessment of any other factors determined
to be material to the program's efficiency and effectiveness in
achieving the goals set forth in this act.
(c) Report Made Publicly Available.--Not later than 10 years after
the date of the enactment of this Act, the Secretary of Energy shall
submit to Congress the report required under subsection (a). Such
report shall be made electronically available to the public and open to
public comment for at least 60 days before the final submission to
Congress.
SEC. 7. IMPACT OF CARBON FEE ON BIOMASS USE AND CARBON SINKS.
(a) Study of Biomass.--The Secretary of Energy shall enter into an
agreement with the National Academy of Sciences and the Administrator
of the Environmental Protection Agency to conduct a study, make
recommendations, and submit a report regarding the impact of the carbon
fee on the use of biomass as an energy source and the resulting impacts
on carbon sinks and biodiversity.
(b) Study Requirements.--The study conducted under subsection (a)
by the National Academy of Sciences shall include analysis,
documentation, and determinations on--
(1) the carbon fee and its impact on the use of biomass as
an energy source and greenhouse gas emissions from the use of
biomass as an energy source;
(2) the impacts of the use of biomass as an energy source
on carbon sinks and biodiversity; and
(3) the various types of biomass that are being used as an
energy source.
(c) Recommendations.--Based on the findings and conclusions of the
study, the National Academy of Sciences shall make recommendations to
Federal departments and agencies and to Congress. The recommendations
shall include any actions that should be taken to mitigate impacts of
the carbon fee on--
(1) increasing greenhouse gas emissions from the use of
biomass as an energy source; and
(2) degradation of carbon sinks and biodiversity relating
to the use of biomass as an energy source.
(d) Report.--The National Academy of Sciences shall prepare a
report that includes any findings and recommendations made pursuant to
this section and, not later than 18 months after the date of the
enactment of this Act, make such report electronically available to the
public.
SEC. 8. AMENDMENTS TO THE CLEAN AIR ACT.
(a) In General.--Title III of the Clean Air Act (42 U.S.C. 7601) is
amended by adding at the end the following:
``SEC. 330. SUSPENSION OF REGULATION OF FUELS AND EMISSIONS BASED ON
GREENHOUSE GAS EFFECTS.
``(a) Fuels.--Unless specifically authorized in section 202, 211,
213, or 231 or this section, if a carbon fee is imposed by section 9902
or 9908 of the Internal Revenue Code of 1986 with respect to a covered
fuel, the Administrator shall not enforce any rule limiting the
emission of greenhouse gases from the combustion of that fuel under
this Act (or impose any requirement on any State to limit such
emission) on the basis of the emission's greenhouse gas effects.
``(b) Emissions.--Unless specifically authorized in section 202,
211, 213, or 231 or this section, if a fee is imposed by section 9904
of the Internal Revenue Code of 1986 with respect to a fluorinated
greenhouse gas, the Administrator shall not enforce any rule limiting
such gas under this Act (or impose any requirement on any State to
limit such gas) on the basis of the greenhouse gas effects of such gas.
``(c) Authorized Regulation.--Notwithstanding subsections (a) and
(b), nothing in this section limits the Administrator's authority
pursuant to any other provision of this Act--
``(1) to limit the emission of any greenhouse gas because
of any adverse impact on health or welfare other than its
greenhouse gas effects;
``(2) in limiting emissions as described in paragraph (1),
to consider the collateral benefits of limiting the emissions
because of greenhouse gas effects;
``(3) to limit the emission of black carbon or any other
pollutant that is not a greenhouse gas that the Administrator
determines by rule has heat-trapping properties; or
``(4) to take any action with respect to any greenhouse gas
other than limiting its emission, including--
``(A) monitoring, reporting, and record-keeping
requirements;
``(B) conducting or supporting investigations; and
``(C) information collection.
``(d) Exception for Certain Greenhouse Gas Emissions.--
Notwithstanding subsections (a) and (b), nothing in this section limits
the Administrator's authority to regulate greenhouse gas emissions
from--
``(1) sources that--
``(A) are subject to subpart OOOO or OOOOa of part
60 of title 40, Code of Federal Regulations, as in
effect or January 1, 2020; or
``(B) would be subject to such subpart OOOO or
subpart OOOOa if such subpart applied regardless of the
date on which construction, modification, or
reconstruction of the source involved commenced; or
``(2) POTW Treatment Plants (as defined in section 403.3(r)
of title 40, Code of Federal Regulations).
``(e) Suspension Expiration.--
``(1) Determination.--The Administrator shall make a
determination by March 30, 2030, and no less than once every
five years thereafter, based on the determination required by
section 9903(b) of the Internal Revenue Code of 1986, as to
whether cumulative greenhouse gas emissions from covered fuels
subject to taxation under section 9902 of such Code during the
period from calendar year 2022 through the calendar year
preceding the determination exceed the cumulative emissions for
that period that would have occurred if the emission reduction
targets in section 9903(a)(2) of such Code were met.
``(2) Consequence of cumulative emissions exceedance.--If
the Administrator determines under paragraph (1) that
cumulative greenhouse gas emissions from covered fuels subject
to tax under section 9902 of the Internal Revenue Code of 1986
exceed the cumulative emissions for the period covered by the
determination that would have occurred if the emission
reduction targets in section 9903(a)(2) of such Code were met,
then the prohibitions in subsection (a) of this section, and in
section 211(c)(5) of this Act, shall cease to apply.
``(f) Assuring Environmental Integrity.--
``(1) Authority.--If the Administrator determines pursuant
to subsection (e)(1) of this section that the emission
reduction targets in section 9903 (a)(2) of the Internal
Revenue Code of 1986 are not met--
``(A) subsections (a) and (b) shall cease to apply;
and
``(B) the Administrator shall--
``(i) issue such regulations as the
Administrator deems necessary to bring
greenhouse gas emissions from covered fuels
subject to taxation under section 9902 of the
Internal Revenue Code of 1986 to levels that
are at or below the emission reductions targets
in section 9903(a)(2) of such Code; and
``(ii) require in such regulations that
additional reductions in greenhouse gas
emissions are achieved to fully compensate for
any amount by which greenhouse gas emissions
from covered fuels subject to taxation under
section 9902 of such Code have exceeded the
targets in section 9903(a)(2) of such Code.
``(2) Deadline for finalizing regulations.--The
Administrator shall finalize any regulations required by
paragraph (1) not later than two years after the Administrator
makes the relevant determination pursuant to such paragraph.
``(3) Achievement of additional reductions.--Regulations
issued pursuant to paragraph (1) shall ensure that any
additional reductions required by paragraph (1)(B)(ii) are
fully achieved by no later than eight years after the
Administrator makes the determination pursuant to subsection
(e)(1) described in paragraph (1).
``(g) Definitions.--In this section, the terms `greenhouse gas' and
`greenhouse gas effects' have the meanings given to those terms in
section 9901 of the Internal Revenue Code of 1986.''.
(b) New Motor Vehicles and New Motor Vehicle Engines.--Section
202(b) of the Clean Air Act (42 U.S.C. 7521(b)) is amended--
(1) by redesignating the second paragraph (3) (as
redesignated by section 230(4)(C) of Public Law 101-549 (104
Stat. 2529)) as paragraph (4); and
(2) by adding at the end the following:
``(5) Notwithstanding subsections (a) and (b) of section
330, the Administrator may--
``(A) limit the emission of any greenhouse gas (as
defined in section 9901 of the Internal Revenue Code of
1986) on the basis of the emission's greenhouse gas
effects (as defined in section 9901 of the Internal
Revenue Code of 1986) from any class or classes of new
motor vehicles or new motor vehicle engines subject to
regulation under subsection (a)(1); and
``(B) grant a waiver under section 209(b)(1) for
standards for the control of greenhouse gas
emissions.''.
(c) Fuels.--Section 211(c) of the Clean Air Act (42 U.S.C. 7545(c))
is amended by adding at the end the following new paragraph:
``(5) The Administrator shall not, pursuant to this subsection,
impose on any manufacturer or processor of fuel any requirement for the
purpose of reducing the emission of any greenhouse gas (as defined in
section 9901 of the Internal Revenue Code of 1986) produced by
combustion of the fuel on the basis of the emission's greenhouse gas
effects (as defined in section 9901 of the Internal Revenue Code of
1986).''.
(d) Nonroad Engines and Vehicles Emissions Standards.--Section 213
of the Clean Air Act (42 U.S.C. 7547) is amended by adding at the end
the following:
``(e) Greenhouse Gas Emissions.--Notwithstanding section 330(a),
the Administrator may limit the emission of any greenhouse gas (as
defined in section 9901 of the Internal Revenue Code of 1986) on the
basis of the emission's greenhouse gas effects (as defined in section
9901 of the Internal Revenue Code of 1986) from any nonroad engines and
nonroad vehicles subject to regulation under this section.''.
(e) Aircraft Emission Standards.--Section 231 of the Clean Air Act
(42 U.S.C. 7571) is amended by adding at the end the following new
subsection:
``(d) Notwithstanding subsections (a) and (b) of section 330, the
Administrator may limit the emission of any greenhouse gas (as defined
in section 9901 of the Internal Revenue Code of 1986) on the basis of
the emission's greenhouse gas effects (as defined in section 9901 of
the Internal Revenue Code of 1986) from any class or classes of
aircraft engines, so long as any such limitation is not more stringent
than the standards adopted by the International Civil Aviation
Organization.''.
SEC. 9. EFFECTIVE DATE.
The amendments made by this Act shall take effect on the date of
the enactment of this Act, except the carbon fee under section 9902 of
the Internal Revenue Code of 1986 shall apply to uses, sales, or
transfers more than 270 days after the date of the enactment of this
Act.
SEC. 10. PRINCIPLE OF INTERPRETATION.
In the case of ambiguity, the texts of this statute and its
amending texts shall be interpreted so as to allow for the most
effective abatement of greenhouse gas emissions.
SEC. 11. NO PREEMPTION OF STATE LAW.
Nothing in this legislation shall preempt or supersede, or be
interpreted to preempt or supersede, any State law or regulation.
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