[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2645 Introduced in Senate (IS)]

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117th CONGRESS
  1st Session
                                S. 2645

 To amend the Internal Revenue Code of 1986 to establish an excise tax 
                              on plastics.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 5, 2021

Mr. Whitehouse introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to establish an excise tax 
                              on plastics.

    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 ``Rewarding Efforts to Decrease 
Unrecycled Contaminants in Ecosystems Act of 2021'' or the ``REDUCE Act 
of 2021''.

SEC. 2. EXCISE TAX ON PLASTICS.

    (a) In General.--Chapter 38 of the Internal Revenue Code of 1986 is 
amended by adding at the end thereof the following new subchapter:

                    ``Subchapter E--Tax on Plastics

``Sec. 4691. Imposition of tax.
``Sec. 4692. Definitions and special rules.

``SEC. 4691. IMPOSITION OF TAX.

    ``(a) General Rule.--There is hereby imposed--
            ``(1) a tax on any taxable virgin plastic resin sold by an 
        applicable entity, and
            ``(2) a tax on any imported covered item sold or used by 
        the importer thereof.
    ``(b) Amount of Tax.--
            ``(1) Taxable virgin plastic resin.--
                    ``(A) In general.--The amount of the tax imposed 
                under subsection (a)(1) shall be determined in 
                accordance with the following table:


------------------------------------------------------------------------
                                                         The tax is the
                                                        following amount
         ``For any sale during calendar year:             per pound of
                                                         taxable virgin
                                                         plastic resin:
------------------------------------------------------------------------
2022.................................................           10 cents
2023.................................................           15 cents
2024.................................................           20 cents
2025 or thereafter...................................   Adjusted amount.
------------------------------------------------------------------------

                    ``(B) Adjusted amount.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), the adjusted amount for any 
                        sale during any calendar year beginning after 
                        December 31, 2024, shall be equal to the sum 
                        of--
                                    ``(I) 20 cents, plus
                                    ``(II) an amount equal to--
                                            ``(aa) 20 cents, multiplied 
                                        by
                                            ``(bb) the cost-of-living 
                                        adjustment determined under 
                                        section 1(f)(3) for the 
                                        calendar year, determined by 
                                        substituting `calendar year 
                                        2023' for `calendar year 2016' 
                                        in subparagraph (A)(ii) 
                                        thereof.
                            ``(ii) Rounding.--If any amount determined 
                        under clause (i) is not a multiple of 1 cent, 
                        such amount shall be rounded to the nearest 
                        multiple of 1 cent.
            ``(2) Imported covered items.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the amount of the tax imposed under 
                paragraph (2) of subsection (a) on any imported covered 
                item shall be the amount of tax which would have been 
                imposed by paragraph (1) of such subsection with 
                respect to the amount of any taxable virgin plastic 
                resin contained in such item if such resin had been 
                sold in the United States by an applicable entity on 
                the date of the sale of such item.
                    ``(B) Rate where importer does not furnish 
                information to secretary.--If the importer does not 
                furnish to the Secretary (at such time and in such 
                manner as the Secretary shall prescribe) sufficient 
                information to determine under subparagraph (A) the 
                amount of the tax imposed by subsection (a)(2) on any 
                imported covered item, the amount of the tax imposed on 
                such item shall be 10 percent of the appraised value of 
                such item as of the time such item was entered into the 
                United States for consumption, use, or warehousing.
                    ``(C) Authority to prescribe alternate rate.--The 
                Secretary may prescribe for each imported covered item 
                a tax which, if prescribed, shall apply in lieu of the 
                tax specified in subparagraph (B) with respect to such 
                item. The tax prescribed by the Secretary shall be 
                equal to the amount of tax which would be imposed by 
                subsection (a) with respect to the imported covered 
                item if such item were produced using the predominant 
                method of production of such item.
    ``(c) Applicable Entity.--
            ``(1) In general.--For purposes of this section, the term 
        `applicable entity' means any manufacturer, producer, or 
        importer of taxable virgin plastic resin which, during the 
        calendar year in which the sale of such resin occurs, 
        manufactures, produces, or imports more than 10 tons of taxable 
        virgin plastic resin.
            ``(2) Aggregation rule.--For purposes of this subsection, 
        all persons treated as a single employer under subsection (a) 
        or (b) of section 52, or subsection (m) or (o) of section 414, 
        shall be treated as a single manufacturer, producer, or 
        importer.
    ``(d) Exportation.--Pursuant to regulations prescribed by the 
Secretary, no tax shall be imposed under this section upon the sale of 
any taxable virgin plastic resin for export, and in due course so 
exported.

``SEC. 4692. DEFINITIONS AND SPECIAL RULES.

    ``(a) Definitions.--For purposes of this subchapter--
            ``(1) Covered item.--
                    ``(A) In general.--The term `covered item' means a 
                single-use product which contains taxable virgin 
                plastic resin, including packaging, food service 
                products, beverage containers, and bags.
                    ``(B) Exclusion.--The term `covered item' shall not 
                include--
                            ``(i) a medical product that the Secretary 
                        of Health and Human Services determines needs 
                        to be made of virgin plastic for public health 
                        or the health of the user,
                            ``(ii) a container for--
                                    ``(I) a drug regulated under the 
                                Federal Food, Drug, and Cosmetic Act,
                                    ``(II) infant formula, or
                                    ``(III) a meal replacement liquid,
                            ``(iii) a personal or feminine hygiene 
                        product that could be unsafe or unsanitary to 
                        recycle,
                            ``(iv) a sexual health product, or
                            ``(v) packaging--
                                    ``(I) for a product described in 
                                clauses (i) through (iv), or
                                    ``(II) used for the shipment of 
                                hazardous materials that is prohibited 
                                from being composed of used materials 
                                under section 178.509 or 178.522 of 
                                title 49, Code of Federal Regulations 
                                (as in effect on the date of enactment 
                                of this subchapter).
                    ``(C) Other terms.--
                            ``(i) Bag.--The term `bag' means a 
                        container made of flexible material with an 
                        opening at the top, used for carrying items.
                            ``(ii) Beverage container.--The term 
                        `beverage container' means a prepackaged 
                        beverage container the volume of which is not 
                        greater than 3 liters.
                            ``(iii) Food service product.--The term 
                        `food service product' means an item intended 
                        to deliver a food product, including a utensil, 
                        straw, drink cup, drink lid, food package, food 
                        container, plate, bowl, meat tray, or food 
                        wrap.
                            ``(iv) Packaging.--The term `packaging' 
                        means a package, container, packing materials, 
                        or other material used for the containment, 
                        protection, handling, delivery, and 
                        presentation of goods.
                            ``(v) Single-use product.--The term 
                        `single-use product' means a product which is--
                                    ``(I) routinely disposed of after a 
                                single use or after its contents have 
                                been used or unpackaged, and typically 
                                not refilled, and
                                    ``(II) not durable, washable, or 
                                routinely used for its original purpose 
                                multiple times before disposal.
            ``(2) Imported covered item.--The term `imported covered 
        item' means any covered item entered into the United States for 
        consumption, use, or warehousing.
            ``(3) Taxable virgin plastic resin.--
                    ``(A) In general.--The term `taxable virgin plastic 
                resin' means any resin--
                            ``(i) which is derived from petroleum or 
                        gas (including ethylene, propylene, 
                        polyethylene, polypropylene, polystyrene, and 
                        polyvinyl chloride), and
                            ``(ii) which is manufactured or produced in 
                        the United States or entered into the United 
                        States for consumption, use, or warehousing.
                    ``(B) Exclusion of post-consumer recycled resin.--
                The term `taxable virgin plastic resin' shall not 
                include any resin which has been reprocessed from 
                recovered material so it can be used for its original 
                purpose or for other purposes in place of resin 
                described in clause (i) of subparagraph (A).
            ``(4) United states.--The term `United States' has the 
        meaning given such term by section 4612(a)(4).
            ``(5) Importer.--The term `importer' means the person 
        entering the taxable virgin plastic resin or covered item for 
        consumption, use, or warehousing.
    ``(b) Fraction of a Pound.--In the case of a fraction of a pound, 
the tax imposed by section 4691 shall be the same fraction of the 
amount of such tax imposed on a whole pound.
    ``(c) Use Treated as Sale.--If any applicable entity manufactures, 
produces, or imports any taxable virgin plastic resin and uses such 
resin, then such person shall be liable for tax under section 4691 in 
the same manner as if such resin were sold by such entity.
    ``(d) Refund or Credit for Certain Uses.--Under regulations 
prescribed by the Secretary, if--
            ``(1) a tax under section 4691(a)(1) was paid with respect 
        to any taxable virgin plastic resin, and
            ``(2) such resin was used by any person in the manufacture 
        or production within the United States of any product which is 
        not a covered item,
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 such section.
    ``(e) Disposition of Revenues From Puerto Rico and the Virgin 
Islands.--The provisions of subsections (a)(3) and (b)(3) of section 
7652 shall not apply to any tax imposed by section 4691.
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the provisions of this subchapter.''.
    (b) Plastic Waste Reduction Fund.--Subchapter A of chapter 98 of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new section:

``SEC. 9512. PLASTIC WASTE REDUCTION FUND.

    ``(a) Establishment and Funding.--There is hereby established in 
the Treasury of the United States a trust fund to be referred to as the 
`Plastic Waste Reduction Fund', consisting of such amounts as may be 
appropriated or credited to such trust fund as provided for in this 
section and section 9602(b).
    ``(b) Transfers to the Plastic Waste Reduction Fund.--There are 
hereby appropriated to the Plastic Waste Reduction Fund amounts 
equivalent to the taxes received in the Treasury under section 4691 
(minus any refunds or credits pursuant to section 4692(d)).
    ``(c) Expenditures From the Plastic Waste Reduction Fund.--Amounts 
in the Plastic Waste Reduction Fund shall be available, as provided by 
appropriation Acts, for making expenditures--
            ``(1) to carry out reduction and recycling activities, 
        including making improvements to recycling infrastructure,
            ``(2) to carry out plastic waste and marine debris 
        reduction, detection, monitoring, and cleanup activities of--
                    ``(A) the grant programs established under section 
                302 of the Save Our Seas 2.0 Act (33 U.S.C. 4282),
                    ``(B) the Marine Debris Program established by 
                section 3 of the Marine Debris Act (33 U.S.C. 1952),
                    ``(C) the Marine Debris Foundation established by 
                section 111 of the Save Our Seas 2.0 Act (33 U.S.C. 
                4211), and
                    ``(D) other Federal programs carrying out such 
                activities, and
            ``(3) to address environmental justice and pollution 
        impacts from plastic production.''.
    (c) Clerical Amendments.--
            (1) The table of subchapters for chapter 38 of the Internal 
        Revenue Code of 1986 is amended by adding at the end the 
        following new item:

                   ``subchapter e--tax on plastics''.

            (2) 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. Plastic Waste Reduction Fund.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2022.
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