American Opportunity Carbon Fee Act of 2019

II 116TH CONGRESS 1ST SESSION S. 1128 To amend the Internal Revenue Code of 1986 to provide for carbon dioxide and other greenhouse gas emission fees, provide tax credits to workers, deliver additional benefits to retired and disabled Americans, and for other purposes. IN THE SENATE OF THE UNITED STATES APRIL 10, 2019 Mr. WHITEHOUSE (for himself, Mr. SCHATZ, Mr. HEINRICH, and Mrs. GILLI- BRAND) 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 provide for carbon dioxide and other greenhouse gas emission fees, provide tax credits to workers, deliver additional benefits to retired and disabled Americans, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘American Opportunity 4 Carbon Fee Act of 2019’’. 5 VerDate Sep 11 2014 00:32 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1128.IS S1128 pamtmann on DSKBFK8HB2PROD with BILLS 2 •S 1128 IS TITLE I—CARBON DIOXIDE AND 1 OTHER GREENHOUSE GAS 2 EMISSION FEES 3 SEC. 101. CARBON DIOXIDE AND OTHER GREENHOUSE GAS 4 EMISSION FEES. 5 (a) IN GENERAL.—Chapter 38 of the Internal Rev- 6 enue Code of 1986 is amended by adding at the end there- 7 of the following new subchapter: 8 ‘‘Subchapter E—Carbon Dioxide and Other 9 Greenhouse Gas Emission Fees 10 ‘‘Sec. 4691. Fee for carbon dioxide emissions. ‘‘Sec. 4692. Fee on fluorinated greenhouse gases. ‘‘Sec. 4693. Fee on facilities that emit greenhouse gases. ‘‘Sec. 4694. Associated emissions. ‘‘Sec. 4695. Border adjustments for energy-intensive manufactured goods. ‘‘Sec. 4696. Definitions and other rules. ‘‘SEC. 4691. FEE FOR CARBON DIOXIDE EMISSIONS. 11 ‘‘(a) IN GENERAL.— 12 ‘‘(1) FOSSIL FUEL PRODUCTS PRODUCING CAR- 13 BON EMISSIONS.—There is hereby imposed a fee in 14 an amount equal to the applicable amount at the 15 rate specified in paragraph (2) on— 16 ‘‘(A) coal— 17 ‘‘(i) removed from any mine in the 18 United States, or 19 ‘‘(ii) entered into the United States 20 for consumption, use, or warehousing, 21 ‘‘(B) petroleum products— 22 VerDate Sep 11 2014 00:32 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1128.IS S1128 pamtmann on DSKBFK8HB2PROD with BILLS 3 •S 1128 IS ‘‘(i) removed from any refinery, 1 ‘‘(ii) removed from any terminal, or 2 ‘‘(iii) entered into the United States 3 for consumption, use, or warehousing, and 4 ‘‘(C) natural gas— 5 ‘‘(i) entered into any processor, or 6 ‘‘(ii) entered into the United States 7 for consumption, use, or warehousing. 8 ‘‘(2) RATE.—The rate specified in this para- 9 graph with respect to any product described in para- 10 graph (1) is an amount equal to the applicable 11 amount per ton of carbon dioxide that would be 12 emitted through the combustion of such product (as 13 determined by the Secretary, in consultation with 14 the Secretary of Energy and the Administrator of 15 the Environmental Protection Agency). 16 ‘‘(b) APPLICABLE AMOUNT.— 17 ‘‘(1) IN GENERAL.—For purposes of this part, 18 the applicable amount is— 19 ‘‘(A) for calendar year 2020, $52, 20 ‘‘(B) for any calendar year following a year 21 which is not a national emissions target attain- 22 ment year, the sum of— 23 VerDate Sep 11 2014 00:32 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1128.IS S1128 pamtmann on DSKBFK8HB2PROD with BILLS 4 •S 1128 IS ‘‘(i) the product of the amount in ef- 1 fect under this subparagraph for the pre- 2 ceding calendar year and 106 percent, and 3 ‘‘(ii) the inflation adjustment amount 4 determined under paragraph (2), and 5 ‘‘(C) for any calendar year following a year 6 which is a national emissions target attainment 7 year, the sum of— 8 ‘‘(i) the amount in effect under this 9 subparagraph for the preceding calendar 10 year, and 11 ‘‘(ii) the inflation adjustment amount 12 determined under paragraph (2). 13 ‘‘(2) INFLATION ADJUSTMENT AMOUNT.— 14 ‘‘(A) IN GENERAL.—The inflation adjust- 15 ment amount for any calendar year shall be an 16 amount (not less than zero) equal to the prod- 17 uct of— 18 ‘‘(i) the amount determined under 19 paragraph (1)(B)(i) or (1)(C)(i), as appli- 20 cable, for such year, and 21 ‘‘(ii) the percentage by which the CPI 22 for the preceding calendar year exceeds the 23 CPI for the second preceding calendar 24 year. 25 VerDate Sep 11 2014 00:32 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1128.IS S1128 pamtmann on DSKBFK8HB2PROD with BILLS 5 •S 1128 IS ‘‘(B) CPI.—Rules similar to the rules of 1 paragraphs (4) and (5) of section 1(f) shall 2 apply for purposes of this paragraph. 3 ‘‘(3) ROUNDING.—The applicable amount under 4 this subsection shall be rounded up to the next whole 5 dollar amount. 6 ‘‘(4) NATIONAL EMISSIONS TARGET ATTAIN- 7 MENT YEAR.—For purposes of paragraph (1), a cal- 8 endar year is a national emissions target attainment 9 year if the level of greenhouse gas emissions in the 10 United States for the calendar year does not exceed 11 20 percent of the level of greenhouse gas emissions 12 in the United States for calendar year 2005 as de- 13 termined by the Secretary in consultation with the 14 Administrator of the Environmental Protection 15 Agency. 16 ‘‘(c) REFUNDS FOR CAPTURING CARBON DIOXIDE 17 AND PRODUCTION OF CERTAIN GOODS.— 18 ‘‘(1) CARBON DIOXIDE CAPTURE, UTILIZATION, 19 AND STORAGE.— 20 ‘‘(A) IN GENERAL.—In the case of a per- 21 son who— 22 ‘‘(i) uses any coal, petroleum product, 23 or natural gas for which a fee has been im- 24 posed under subsection (a)(1) in a manner 25 VerDate Sep 11 2014 00:32 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1128.IS S1128 pamtmann on DSKBFK8HB2PROD with BILLS 6 •S 1128 IS which results in the emission of qualified 1 carbon dioxide, 2 ‘‘(ii) captures the resulting emitted 3 qualified carbon dioxide at a qualified facil- 4 ity, and 5 ‘‘(iii)(I) disposes of such qualified car- 6 bon dioxide in secure storage, or 7 ‘‘(II) utilizes such qualified carbon di- 8 oxide in a manner provided in subpara- 9 graph (D), 10 there shall be allowed a refund, in the same 11 manner as if it were an overpayment of the fee 12 imposed by such subsection, to such person in 13 the amount determined under subparagraph 14 (B). 15 ‘‘(B) AMOUNT OF REFUND.—The amount 16 of the refund under this subparagraph is an 17 amount equal to the product of— 18 ‘‘(i) the applicable amount under sub- 19 section (b) for the calendar year in which 20 such qualified carbon dioxide was captured 21 and disposed or utilized, and 22 ‘‘(ii) the adjusted tons of qualified 23 carbon dioxide captured and disposed or 24 utilized. 25 VerDate Sep 11 2014 00:32 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1128.IS S1128 pamtmann on DSKBFK8HB2PROD with BILLS 7 •S 1128 IS ‘‘(C) ADJUSTED TOTAL TONS.—For pur- 1 poses of subparagraph (B), the adjusted tons of 2 qualified carbon dioxide captured and disposed 3 or utilized shall be the total tons of qualified 4 carbon dioxide captured and disposed or utilized 5 reduced by the amount of any anticipated leak- 6 age of carbon dioxide into the atmosphere due 7 to imperfect storage technology or otherwise, as 8 determined by the Secretary in consultation 9 with the Administrator of the Environmental 10 Protection Agency. 11 ‘‘(D) REQUIREMENTS.— 12 ‘‘(i) IN GENERAL.—Any refund under 13 subparagraph (A) shall apply only with re- 14 spect to qualified carbon dioxide that has 15 been captured and disposed or utilized 16 within the United States. 17 ‘‘(ii) DISPOSAL AND SECURE STOR- 18 AGE.— 19 ‘‘(I) SECURE STORAGE.—The 20 Secretary, in consultation with the 21 Administrator of the Environmental 22 Protection Agency and the Secretary 23 of Energy, shall establish regulations 24 similar to the regulations under sec- 25 VerDate Sep 11 2014 00:32 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1128.IS S1128 pamtmann on DSKBFK8HB2PROD with BILLS 8 •S 1128 IS tion 45Q(f)(2) for determining ade- 1 quate security measures for the secure 2 storage of qualified carbon dioxide for 3 purposes of subparagraph (A)(iii)(I) 4 such that the carbon dioxide does not 5 escape into the atmosphere. Such reg- 6 ulations shall ensure the stored car- 7 bon dioxide may not be sold, trans- 8 ferred, or exported for any purpose 9 that results in the emission of carbon 10 dioxide. 11 ‘‘(II) RECAPTURE.—The Sec- 12 retary shall, by regulations, provide 13 for recapturing the benefit of any re- 14 fund made under subparagraph (A) 15 with respect to any qualified carbon 16 dioxide which is disposed in secure 17 storage and ceases to be stored in a 18 manner consistent with the require- 19 ments of this section. 20 ‘‘(iii) UTILIZATION.—The Secretary, 21 in consultation with the Secretary of En- 22 ergy and the Administrator of the Environ- 23 mental Protection Agency, shall establish 24 regulations providing for the appropriate 25 VerDate Sep 11 2014 00:32 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1128.IS S1128 pamtmann on DSKBFK8HB2PROD with BILLS 9 •S 1128 IS methods and manners for the utilization of 1 qualified carbon dioxide under subpara- 2 graph (A)(iii)(II), including the utilization 3 of captured carbon dioxide for enhanced oil 4 or gas recovery and the production of sub- 5 stances such as plastics, biofuels, algae, 6 and chemicals. Such regulations shall pro- 7 vide for the minimization of the escape or 8 further emission of the qualified carbon di- 9 oxide into the atmosphere. 10 ‘‘(E) QUALIFIED CARBON DIOXIDE; QUALI- 11 FIED FACILITY.—For purposes of this para- 12 graph— 13 ‘‘(i) QUALIFIED CARBON DIOXIDE.— 14 ‘‘(I) IN GENERAL.—The term 15 ‘qualified carbon dioxide’ means car- 16 bon dioxide captured from an indus- 17 trial source which— 18 ‘‘(aa) would otherwise be re- 19 leased into the atmosphere as in- 20 dustrial emission of greenhouse 21 gas, and 22 ‘‘(bb) is measured at the 23 source of capture and verified at 24 VerDate Sep 11 2014 00:32 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1128.IS S1128 pamtmann on DSKBFK8HB2PROD with BILLS 10 •S 1128 IS the point of disposal, injection, or 1 utilization. 2 ‘‘(II) RECYCLED CARBON DIOX- 3 IDE.—The term ‘qualified carbon di- 4 oxide’ includes the initial deposit of 5 captured carbon dioxide used as a ter- 6 tiary injectant. Such term does not in- 7 clude carbon dioxide that is recap- 8 tured, recycled, and re-injected as 9 part of the enhanced oil and natural 10 gas recovery process. 11 ‘‘(ii) QUALIFIED FACILITY.—The term 12 ‘qualified facility’ means any industrial fa- 13 cility— 14 ‘‘(I) which is owned by the tax- 15 payer, and 16 ‘‘(II) at which carbon capture 17 equipment is placed in service. 18 ‘‘(2) MANUFACTURE OF CERTAIN GOODS.—In 19 the case of a person who uses any coal, petroleum 20 product, or natural gas for which a fee has been im- 21 posed under subsection (a)(1) as an input for a 22 manufactured good that encapsulates carbon dioxide 23 in a manner such that it does not result in the direct 24 emission of carbon dioxide in the manufacturing or 25 VerDate Sep 11 2014 00:32 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1128.IS S1128 pamtmann on DSKBFK8HB2PROD with BILLS 11 •S 1128 IS subsequent use of such good, a refund shall be al- 1 lowed to such person in the same manner as if it 2 were an overpayment of the fee imposed by such sec- 3 tion in an amount that is equal to the product of— 4 ‘‘(A) an amount equal to the applicable 5 amount under subsection (b) for the calendar 6 year in which such product was used, and 7 ‘‘(B) the total tons of carbon dioxide that 8 would have otherwise been emitted through the 9 combustion of such product. 10 ‘‘(3) EXPORTS.—In the case of a person who 11 exports any coal, petroleum product, or natural gas 12 from the United States for which a fee has been im- 13 posed under subsection (a)(1), a refund shall be al- 14 lowed to such person in the same manner as if it 15 were an overpayment of the fee imposed by such sec- 16 tion in an amount that is equal to the fee previously 17 imposed under such subsection with respect to such 18 product (determined without regard to any increase 19 under section 4694). 20 ‘‘SEC. 4692. FEE ON FLUORINATED GREENHOUSE GASES. 21 ‘‘(a) IN GENERAL.—There is hereby imposed a fee 22 in an amount determined under subsection (b) on 23 fluorinated greenhouse gases— 24 VerDate Sep 11 2014 00:32 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1128.IS S1128 pamtmann on DSKBFK8HB2PROD with BILLS 12 •S 1128 IS ‘‘(1) produced at a fluorinated greenhouse gas 1 production facility, or 2 ‘‘(2) imported into the United States by a 3 fluorinated greenhouse gas importer. 4 ‘‘(b) AMOUNT OF FEE.—The amount of fee imposed 5 by subsection (a) shall be equal to the applicable percent- 6 age (as defined in subsection (c)(4)) of the applicable 7 amount determined under section 4691(b) per ton of car- 8 bon dioxide equivalent produced or imported. 9 ‘‘(c) DEFINITIONS.—For purposes of this section— 10 ‘‘(1) FLUORINATED GREENHOUSE GASES.—The 11 term ‘fluorinated greenhouse gases’ means sulfur 12 hexafluoride (SF6), nitrogen trifluoride (NF3), any 13 hydrofluorocarbon, any perfluorocarbon, any fully 14 fluorinated linear, branched or cyclic alkane, ether, 15 tertiary amine or aminoether, any perfluoropoly- 16 ether, any hydrofluoropolyether, and any other fluo- 17 rocarbon except for substances with vapor pressures 18 of less than 1 mm of Hg absolute at 25 degrees Cel- 19 sius. 20 ‘‘(2) FLUORINATED GREENHOUSE GAS PRODUC- 21 TION FACILITY.—The term ‘fluorinated greenhouse 22 gas production facility’ means any facility which is 23 included under the industrial gas supplier source 24 category under subpart OO of part 98 of title 40, 25 VerDate Sep 11 2014 00:32 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1128.IS S1128 pamtmann on DSKBFK8HB2PROD with BILLS 13 •S 1128 IS Code of Federal Regulations, as in effect on the date 1 of the enactment of the American Opportunity Car- 2 bon Fee Act of 2019. 3 ‘‘(3) FLUORINATED GREENHOUSE GAS IM- 4 PORTER.—The term ‘fluorinated greenhouse gas im- 5 porter’ means any importer who is included under— 6 ‘‘(A) the industrial gas supplier source cat- 7 egory under subpart OO of part 98 of title 40, 8 Code of Regulations, as in effect on the date of 9 the enactment of the American Opportunity 10 Carbon Fee Act of 2019, or 11 ‘‘(B) the source category under subpart 12 QQ of such part (as so in effect). 13 ‘‘(4) APP [Text truncated for display. Full text available on Congress.gov.]