II 116TH CONGRESS 1ST SESSION S. 2284 To create a Climate Action Rebate Fund in order to efficiently reduce green- house gas emissions, provide a monthly rebate to the American people, encourage innovation of clean energy technologies and create new eco- nomic opportunities, ensure the resiliency of our infrastructure, assist with the transition to a clean energy economy, and leave a healthier, more stable, and more prosperous nation for future generations. IN THE SENATE OF THE UNITED STATES JULY 25, 2019 Mr. COONS (for himself and Mrs. FEINSTEIN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To create a Climate Action Rebate Fund in order to effi- ciently reduce greenhouse gas emissions, provide a monthly rebate to the American people, encourage inno- vation of clean energy technologies and create new eco- nomic opportunities, ensure the resiliency of our infra- structure, assist with the transition to a clean energy economy, and leave a healthier, more stable, and more prosperous nation for future generations. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 22:34 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2284.IS S2284 kjohnson on DSK79L0C42 with BILLS 2 •S 2284 IS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Climate Action Rebate 2 Act of 2019’’. 3 SEC. 2. FINDINGS. 4 The Congress finds that— 5 (1) climate change is costing the United States 6 billions of dollars of economic losses and poses an 7 existential threat to our safety and security; 8 (2) markets should reflect all costs of goods, in- 9 cluding external factors such as pollution; and 10 (3) creation of a Climate Action Rebate Fund 11 can make markets more efficient, create jobs, stimu- 12 late innovation, invest in infrastructure, put money 13 back in the pockets of Americans, and provide for 14 the transition to a cleaner energy future. 15 SEC. 3. CARBON FEE. 16 (a) IN GENERAL.—Chapter 38 of subtitle D of the 17 Internal Revenue Code of 1986 is amended by adding at 18 the end the following new subchapter: 19 ‘‘Subchapter E—Carbon Fee 20 ‘‘Sec. 4691. Definitions. ‘‘Sec. 4692. Carbon fee. ‘‘Sec. 4693. Emissions reduction schedule. ‘‘Sec. 4694. Fee on fluorinated greenhouse gases. ‘‘Sec. 4695. Carbon capture refunds. ‘‘Sec. 4696. Carbon border fee adjustment. ‘‘Sec. 4697. Administration of the carbon border fee adjustment. ‘‘Sec. 4698. Allocation of carbon border fee adjustment revenues. VerDate Sep 11 2014 22:34 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6211 E:\BILLS\S2284.IS S2284 kjohnson on DSK79L0C42 with BILLS 3 •S 2284 IS ‘‘SEC. 4691. DEFINITIONS. 1 ‘‘For purposes of this subchapter— 2 ‘‘(a) ADMINISTRATOR.—The term ‘Administrator’ 3 means the Administrator of the Environmental Protection 4 Agency. 5 ‘‘(b) CARBON DIOXIDE EQUIVALENT OR CO2-E.— 6 The term ‘carbon dioxide equivalent’ or ‘CO2-e’ means the 7 number of metric tons of carbon dioxide emissions with 8 the same global warming potential as one metric ton of 9 another greenhouse gas. 10 ‘‘(c) CARBON-INTENSIVE PRODUCT.—The term ‘car- 11 bon-intensive product’ means— 12 ‘‘(1) iron, steel, steel mill products (including 13 pipe and tube), aluminum, cement, glass (including 14 flat, container, and specialty glass and fiberglass), 15 pulp, paper, chemicals, or industrial ceramics, and 16 ‘‘(2) any manufactured product which the Sec- 17 retary, in consultation with the Administrator, deter- 18 mines is energy-intensive and trade-exposed (with 19 the exception of any covered fuel). 20 ‘‘(d) COVERED ENTITY.—The term ‘covered entity’ 21 means— 22 ‘‘(1) in the case of crude oil— 23 ‘‘(A) any operator of a United States refin- 24 ery (as described in subsection (d)(1) of section 25 4611), and 26 VerDate Sep 11 2014 22:34 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2284.IS S2284 kjohnson on DSK79L0C42 with BILLS 4 •S 2284 IS ‘‘(B) any person entering such product 1 into the United States for consumption, use, or 2 warehousing (as described in subsection (d)(2) 3 of such section), 4 ‘‘(2) in the case of coal— 5 ‘‘(A) any producer subject to the tax under 6 section 4121, and 7 ‘‘(B) any importer of coal into the United 8 States, 9 ‘‘(3) in the case of natural gas— 10 ‘‘(A) any entity which produces natural 11 gas (as defined in section 613A(e)(2)) from a 12 well located in the United States, and 13 ‘‘(B) any importer of natural gas into the 14 United States, 15 ‘‘(4) in the case of fluorinated gases, any entity 16 required to report the emission of a fluorinated gas 17 under part 98 of title 40, Code of Federal Regula- 18 tions, 19 ‘‘(5) in the case of solid biomass, any entity 20 which operates a facility that combusts such solid 21 biomass in a manner which emits a greenhouse gas 22 into the atmosphere, and 23 ‘‘(6) any entity or class of entities which, as de- 24 termined by the Secretary, is transporting, selling, 25 VerDate Sep 11 2014 22:34 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2284.IS S2284 kjohnson on DSK79L0C42 with BILLS 5 •S 2284 IS or otherwise using a covered fuel in a manner which 1 emits a greenhouse gas into the atmosphere and 2 which has not been covered by the carbon fee, the 3 fluorinated greenhouse gas fee, or the carbon border 4 fee adjustment. 5 ‘‘(e) COVERED FUEL.—The term ‘covered fuel’ 6 means crude oil, natural gas, coal, solid biomass, or any 7 other product derived from crude oil, natural gas, or coal 8 which shall be used so as to emit greenhouse gases to the 9 atmosphere. 10 ‘‘(f) FULL FUEL CYCLE GREENHOUSE GAS EMIS- 11 SIONS.—The term ‘full fuel cycle greenhouse gas emis- 12 sions’ means the greenhouse gas content of a covered fuel 13 (excluding solid biomass) plus that covered fuel’s up- 14 stream greenhouse gas emissions. 15 ‘‘(g) GREENHOUSE GAS.—The term ‘greenhouse gas’ 16 has the same meaning given such term under paragraph 17 (3) of section 901 of the Energy Independence and Secu- 18 rity Act of 2007 (42 U.S.C. 17321), and shall include any 19 other gases as identified by rule of the Administrator. 20 ‘‘(h) GREENHOUSE GAS CONTENT.—The term 21 ‘greenhouse gas content’ means the amount of greenhouse 22 gases, expressed in metric tons of CO2-e, which would be 23 emitted to the atmosphere by the use of a covered fuel. 24 VerDate Sep 11 2014 22:34 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2284.IS S2284 kjohnson on DSK79L0C42 with BILLS 6 •S 2284 IS ‘‘(i) SOLID BIOMASS.—The term ‘solid biomass’ 1 means nonfossilized and biodegradable organic material 2 originating from plants, animals or microorganisms, in- 3 cluding products, byproducts, residues and waste from ag- 4 riculture, forestry and related industries as well as the 5 nonfossilized and biodegradable organic fractions of indus- 6 trial and municipal wastes, but does not include gases and 7 liquids recovered from the decomposition of nonfossilized 8 and biodegradable organic material. 9 ‘‘(j) UNITED STATES.—The term ‘United States’ 10 shall be treated as including each possession of the United 11 States (including the Commonwealth of Puerto Rico and 12 the Commonwealth of the Northern Mariana Islands). 13 ‘‘SEC. 4692. CARBON FEE. 14 ‘‘(a) CARBON FEE.—There is hereby imposed a car- 15 bon fee on any covered entity’s use, sale, or transfer of 16 any covered fuel. 17 ‘‘(b) AMOUNT OF THE CARBON FEE.—The carbon 18 fee imposed by this section is an amount equal to— 19 ‘‘(1) the greenhouse gas content of the covered 20 fuel, multiplied by 21 ‘‘(2) the carbon fee rate. 22 ‘‘(c) CARBON FEE RATE.—For purposes of this sec- 23 tion— 24 VerDate Sep 11 2014 22:34 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2284.IS S2284 kjohnson on DSK79L0C42 with BILLS 7 •S 2284 IS ‘‘(1) IN GENERAL.—The carbon fee rate, with 1 respect to any use, sale, or transfer during a cal- 2 endar year, shall be— 3 ‘‘(A) in the case of calendar year 2020, 4 $15, and 5 ‘‘(B) except as provided in paragraph (2), 6 in the case of any calendar year thereafter, the 7 carbon fee rate in effect under this subsection 8 for the preceding calendar year, plus $15. 9 ‘‘(2) EXCEPTIONS.— 10 ‘‘(A) INCREASED CARBON FEE RATE 11 AFTER MISSED ANNUAL EMISSIONS REDUCTION 12 TARGET.—In the case of any year immediately 13 following a year for which the Secretary deter- 14 mines under 4693(b) that the emissions of 15 greenhouse gases from covered fuels exceeded 16 the emissions reduction target for the previous 17 year, paragraph (1)(B) shall be applied by sub- 18 stituting ‘$30’ for ‘$15’. 19 ‘‘(B) CESSATION OF CARBON FEE RATE IN- 20 CREASE AFTER CERTAIN EMISSION REDUCTIONS 21 ACHIEVED.—In the case of any year imme- 22 diately following a year for which the Secretary 23 determines under 4693(b) that emissions of 24 greenhouse gases from covered fuels are not 25 VerDate Sep 11 2014 22:34 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2284.IS S2284 kjohnson on DSK79L0C42 with BILLS 8 •S 2284 IS more than 10 percent of the greenhouse gas 1 emissions from covered fuels during the year 2 2017, paragraph (1)(B) shall be applied by sub- 3 stituting ‘$0’ for ‘$15’. 4 ‘‘(d) SOLID BIOMASS.—For purposes of subsection 5 (b), in the case of a covered fuel which consists of solid 6 biomass, the greenhouse gas content of such covered fuel 7 shall be determined by the Administrator based on the 8 lifecycle greenhouse gas emissions of such fuel, as defined 9 in section 211(o)(1)(H) of the Clean Air Act (42 U.S.C. 10 7545(o)(1)(H)). 11 ‘‘(e) EXEMPTION AND REFUND.—The Secretary shall 12 prescribe such rules as are necessary to ensure the carbon 13 fee imposed by this section is not imposed with respect 14 to any nonemitting use, or any sale or transfer for a non- 15 emitting use, including rules providing for the refund of 16 any carbon fee paid under this section with respect to any 17 such use, sale, or transfer. 18 ‘‘(f) ADMINISTRATIVE AUTHORITY.—The Secretary, 19 in consultation with the Administrator, shall prescribe 20 such regulations, and other guidance, to assess and collect 21 the carbon fee imposed by this section, including— 22 ‘‘(1) requirements for the quarterly payment of 23 such fees, and 24 VerDate Sep 11 2014 22:34 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2284.IS S2284 kjohnson on DSK79L0C42 with BILLS 9 •S 2284 IS ‘‘(2) rules to ensure that no covered fuel has 1 the carbon fee or the carbon border fee adjustment 2 imposed upon it more than once. 3 ‘‘SEC. 4693. EMISSIONS REDUCTION SCHEDULE. 4 ‘‘(a) IN GENERAL.—An emissions reduction schedule 5 for greenhouse gas emissions from covered fuels is hereby 6 established, as follows: 7 ‘‘(1) REFERENCE YEAR.— 8 ‘‘(A) IN GENERAL.—Subject to subpara- 9 graph (B), the greenhouse gas emissions from 10 covered fuels during the year 2017 shall be the 11 reference amount of emissions and shall be de- 12 termined from the ‘Inventory of U.S. Green- 13 house Gas Emissions and Sinks: 1990–2017’ 14 published by the Environmental Protection 15 Agency in April of 2019. 16 ‘‘(B) UPDATES.—If the greenhouse gas 17 emissions from covered fuels during the year 18 2017 is revised by the Administrator in a sub- 19 sequent report, the amount of such emissions 20 contained in such report shall apply for pur- 21 poses of this section. 22 ‘‘(2) EMISSIONS REDUCTION TARGETS.— 23 ‘‘(A) 2020 THROUGH 2030.—The emissions 24 reduction target for each calendar year during 25 VerDate Sep 11 2014 22:34 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2284.IS S2284 kjohnson on DSK79L0C42 with BILLS 10 •S 2284 IS the period of calendar years 2020 through 2030 1 shall be determined as follows: 2 ‘‘Year Emissions Reduction Target 2017 Reference year 2020 90 percent of 2017 emissions 2021 81 percent of 2017 emissions 2022 74 percent of 2017 emissions 2023 68 percent of 2017 emissions 2024 63 percent of 2017 emissions 2025 59 percent of 2017 emissions 2026 56 percent of 2017 emissions 2027 52 percent of 2017 emissions 2028 50 percent of 2017 emissions 2029 47 percent of 2017 emissions 2030 45 percent of 2017 emissions ‘‘(B) 2031 THROUGH 2050.—The emissions 3 reduction target for each calendar year during 4 the period of calendar years 2031 through 2050 5 shall be equal to the emissions reduction target 6 for the preceding year reduced by an amount 7 equal to 2.25 percent of 2017 emissions. 8 ‘‘(b) ADMINISTRATIVE DETERMINATION.—Not later 9 than 90 days after the beginning of each calendar year 10 beginning after the date of the enactment of this section, 11 the Secretary, in consultation with the Administrator, 12 shall determine whether emissions of greenhouse gases 13 VerDate Sep 11 2014 22:34 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2284.IS S2284 kjohnson on DSK79L0C42 with BILLS 11 •S 2284 IS from covered fuels exceeded the emissions reduction target 1 for the preceding calendar year. The Secretary shall make 2 such determination using the same greenhouse gas ac- 3 counting method as was used to determine the greenhouse 4 gas emissions in the ‘Inventory of U.S. Greenhouse Gas 5 Emissions and Sinks: 1990–2017’ published by the Envi- 6 ronmental Protection Agency in April of 2019. 7 ‘‘SEC. 4694. FEE ON FLUORINATED GREENHOUSE GASES. 8 ‘‘(a) FLUORINATED GAS FEE.—A fee is hereby im- 9 posed upon any fluorinated greenhouse gas which is re- 10 quired to be reported under part 98 of title 40, Code of 11 Federal Regulations. 12 ‘‘(b) AMOUNT.—The fee to be paid by the covered 13 entity required to so report shall be an amount equal to— 14 ‘‘(1) the total amount, in metric tons of CO2- 15 e, of emitted fluorinated greenhouse gases (or, in the 16 case of a supplier, emissions that would result deter- 17 mined under the rules of such part), multiplied by 18 ‘‘(2) an amount equal to 20 percent of the car- 19 bon fee rate in effect under section 4692(c)(1) for 20 the calendar year of such emission. 21 ‘‘(c) ADMINISTRATIVE AUTHORITY.—The Secretary, 22 in consultation with the Administrator, shall prescribe 23 such regulations, and other guidance, to assess and collect 24 the carbon fee imposed by this section, including— 25 VerDate Sep 11 2014 22:34 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2284.IS S2284 kjohnson on DSK79L0C42 with BILLS 12 •S 2284 IS ‘‘(1) requirements for the quarterly payment of 1 such fees, and 2 ‘‘(2) rules to ensure that no covered fuel has 3 the carbon fee or the carbon border fee adjustment 4 imposed upon it more than once. 5 ‘‘SEC. 4695. CARBON [Text truncated for display. Full text available on Congress.gov.]