Carbon Reduction and Tax Credit Act

I 116TH CONGRESS 1ST SESSION H. R. 5457 To amend the Internal Revenue Code of 1986 to impose an excise tax on fuel based on the carbon content of such fuel, and for other purposes. IN THE HOUSE OF REPRESENTATIVES DECEMBER 17, 2019 Mr. SEAN PATRICK MALONEY of New York introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to impose an excise tax on fuel based on the carbon content of such fuel, 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 ‘‘Carbon Reduction and 4 Tax Credit Act’’. 5 SEC. 2. EXCISE TAX ON CARBON CONTENT OF FUELS. 6 (a) IN GENERAL.—Chapter 38 of the Internal Rev- 7 enue Code of 1986 is amended by adding at the end there- 8 of the following new subchapter: 9 VerDate Sep 11 2014 00:01 Dec 27, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5457.IH H5457 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 5457 IH ‘‘Subchapter E—Carbon Content Fee 1 ‘‘Sec. 4691. Carbon content. ‘‘SEC. 4691. CARBON CONTENT. 2 ‘‘(a) IN GENERAL.—In the case of a coal mine or an 3 oil or gas well, there is hereby imposed a tax equal to $40 4 per ton of carbon contained in fuel produced— 5 ‘‘(1) at such mine or well located in the United 6 States, or 7 ‘‘(2) entered into the United States for con- 8 sumption, use, or warehousing. 9 ‘‘(b) ADJUSTMENT FOR YEARS AFTER 2020.— 10 ‘‘(1) IN GENERAL.—In the case of any calendar 11 year after 2020, the amount under subsection (a) 12 shall be increased by an amount equal to— 13 ‘‘(A) such amount, multiplied by 14 ‘‘(B) the cost-of-living adjustment deter- 15 mined under section 1(f)(3) for such calendar 16 year, determined— 17 ‘‘(i) by substituting ‘calendar year 18 2019’ for ‘calendar year 2016’ in subpara- 19 graph (A)(ii) thereof, and 20 ‘‘(ii) by substituting for the C–CPI–U 21 referred to in section 1(f)(3)(A) the 22 amount that such CPI would have been if 23 the annual percentage increase in CPI with 24 VerDate Sep 11 2014 00:01 Dec 27, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5457.IH H5457 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 5457 IH respect to each year after 2019 had been 1 one percentage point greater. 2 ‘‘(2) TERMS RELATED TO CPI.— 3 ‘‘(A) ANNUAL PERCENTAGE INCREASE.— 4 For purposes of subparagraph (B)(ii)(II), the 5 term ‘annual percentage increase’ means the 6 percentage (if any) by which C–CPI–U for any 7 year exceeds the C–CPI–U for the prior year. 8 ‘‘(B) OTHER TERMS.—Terms used in this 9 paragraph which are also used in section 10 1(f)(3) shall have the same meanings as when 11 used in such section. 12 ‘‘(3) ROUNDING.—Any increase determined 13 under subparagraph (B) shall be rounded to the 14 nearest multiple of $50.’’. 15 (b) CLERICAL AMENDMENT.—The table of sub- 16 chapters for chapter 38 of the Internal Revenue Code of 17 1986 is amended by adding at the end the following new 18 item: 19 ‘‘SUBCHAPTER E—CARBON CONTENT FEE’’. (c) EFFECTIVE DATE.—The amendments made by 20 this section shall apply to fuel produced after December 21 31, 2019. 22 SEC. 3. CREDIT. 23 (a) IN GENERAL.—Subpart C of part IV of sub- 24 chapter A of chapter 1 of the Internal Revenue Code of 25 VerDate Sep 11 2014 00:01 Dec 27, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5457.IH H5457 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 5457 IH 1986 (relating to refundable credits) is amended by insert- 1 ing after section 36B the following new section: 2 ‘‘SEC. 36C. CREDIT FOR TAXPAYERS. 3 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al- 4 lowed as a credit against the tax imposed by this chapter 5 for the taxable year with respect to each taxpayer who is 6 an individual and each dependent of the taxpayer an 7 amount equal to $1,000. 8 ‘‘(b) LIMITATION BASED ON ADJUSTED GROSS IN- 9 COME.—The amount of the credit allowable under sub- 10 section (a) shall be reduced (but not below zero) by $100 11 for each $1,000 (or fraction thereof) by which the tax- 12 payer’s adjusted gross income exceeds $314,000 13 ($157,000 in the case of a return other than a joint re- 14 turn). 15 ‘‘(c) INFLATION ADJUSTMENT.—In the case of a tax- 16 able year beginning after 2020, the dollar amounts in sub- 17 sections (a) and (b) shall be increased by an amount equal 18 to— 19 ‘‘(1) such dollar amount, multiplied by 20 ‘‘(2) the cost-of-living adjustment determined 21 under section 1(f)(3) for the calendar year in which 22 the taxable year begins, determined by substituting 23 ‘2019’ for ‘2016’ in subparagraph (A)(ii) thereof. 24 VerDate Sep 11 2014 00:01 Dec 27, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5457.IH H5457 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 5457 IH If any increase under this clause is not a multiple of $50, 1 such increase shall be rounded to the next lowest multiple 2 of $50. 3 ‘‘(d) NONRESIDENT ALIEN INELIGIBLE FOR CRED- 4 IT.—No credit shall be allowed under this section to any 5 nonresident alien.’’. 6 (b) CONFORMING AMENDMENTS.— 7 (1) Section 6211(b)(4)(A) of such Code is 8 amended by inserting ‘‘36C,’’ after ‘‘36B,’’. 9 (2) Paragraph (2) of section 1324(b) of title 10 31, United States Code, is amended by inserting 11 ‘‘36C,’’ after ‘‘36B,’’. 12 (3) The table of sections for subpart C of part 13 IV of subchapter A of chapter 1 of the Internal Rev- 14 enue Code of 1986 is amended by inserting after the 15 item relating to section 36C the following new item: 16 ‘‘Sec. 36C. Credit for taxpayers.’’. (c) EFFECTIVE DATE.—The amendments made by 17 this section shall apply to taxable years beginning after 18 December 31, 2019. 19 Æ VerDate Sep 11 2014 00:01 Dec 27, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H5457.IH H5457 pamtmann on DSKBC07HB2PROD with BILLS