Consumers REBATE Act

I 116TH CONGRESS 2D SESSION H. R. 8175 To amend the Internal Revenue Code of 1986 to impose a tax on fossil fuels and to use the revenues for economic benefit. IN THE HOUSE OF REPRESENTATIVES SEPTEMBER 4, 2020 Mr. MCNERNEY introduced the following bill; which was referred to the Com- mittee on Ways and Means, and in addition to the Committees on Edu- cation and Labor, Science, Space, and Technology, Energy and Com- merce, and Transportation and Infrastructure, for a period to be subse- quently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Internal Revenue Code of 1986 to impose a tax on fossil fuels and to use the revenues for economic benefit. 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 ‘‘Consumers Rebate to 4 ban Emissions and Boost AlTernative Energy Act’’ or the 5 ‘‘Consumers REBATE Act’’. 6 VerDate Sep 11 2014 04:28 Sep 07, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8175.IH H8175 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 8175 IH SEC. 2. EXCISE TAX ON CARBON DIOXIDE CONTENT OF 1 COAL, OIL, AND NATURAL GAS. 2 (a) IN GENERAL.—The Internal Revenue Code of 3 1986 is amended by adding at the end the following: 4 ‘‘Subtitle L—Carbon Dioxide Con- 5 tent of Coal, Oil, and Natural 6 Gas 7 ‘‘Sec. 9901. Imposition of tax. ‘‘Sec. 9902. Carbon equivalency fee. ‘‘Sec. 9903. Definitions. ‘‘Sec. 9904. Special rules. ‘‘SEC. 9901. IMPOSITION OF TAX. 8 ‘‘(a) IN GENERAL.—There is hereby imposed a tax 9 on producing at the wellhead or mine in the United States, 10 or importing, a taxable carbon substance. 11 ‘‘(b) RATE OF TAX.— 12 ‘‘(1) IN GENERAL.—The tax imposed under 13 subsection (a) shall be the applicable amount per 14 metric ton of carbon dioxide content of the life-cycle 15 emissions from the taxable carbon substance. 16 ‘‘(2) APPLICABLE AMOUNT.—For purposes of 17 paragraph (1)— 18 ‘‘(A) IN GENERAL.—For calendar year 19 2021, the term ‘applicable amount’ means $25. 20 ‘‘(B) ANNUAL ADJUSTMENTS GEN- 21 ERALLY.—In the case of any taxable year be- 22 ginning in a calendar year after 2021, the dol- 23 VerDate Sep 11 2014 04:28 Sep 07, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8175.IH H8175 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 8175 IH lar amount in effect under subparagraph (A) 1 for the preceding calendar shall be increased by 2 $10. 3 ‘‘(3) ZERO RATE IF EMISSION REDUCTION 4 BENCHMARK ATTAINED.— 5 ‘‘(A) IN GENERAL.—If the Administrator 6 determines and specifies in a report issued 7 under subsection (c)(3)(A) in the year imme- 8 diately preceding a year specified in subsection 9 (c)(1)(A) that the emissions reduction bench- 10 mark for that specified year will be met or ex- 11 ceeded, then for that specified year and the suc- 12 ceeding 4 calendar years— 13 ‘‘(i) paragraph (2) shall not apply, 14 and 15 ‘‘(ii) the applicable amount shall be 16 zero. 17 ‘‘(B) REINSTATEMENT.— 18 ‘‘(i) IN GENERAL.—Except as pro- 19 vided in clause (ii), for any calendar year 20 after a period referred to in subparagraph 21 (A), paragraph (2) shall be applied and the 22 applicable amount for the first such cal- 23 endar year shall be the dollar amount in 24 VerDate Sep 11 2014 04:28 Sep 07, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8175.IH H8175 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 8175 IH effect for the calendar year preceding the 1 beginning of such period. 2 ‘‘(ii) EXCEPTION.—Clause (i) shall 3 not apply to a calendar year if, with re- 4 spect to that calendar year, a determina- 5 tion described in subparagraph (A) applies 6 to that calendar year. 7 ‘‘(c) EMISSIONS REDUCTIONS BENCHMARKS.—For 8 purposes of this section— 9 ‘‘(1) IN GENERAL.—The emissions reduction 10 benchmarks are as follows: 11 ‘‘(A) 30 percent below the emissions 12 benchmark by 2025. 13 ‘‘(B) 40 percent below the emissions 14 benchmark by 2030. 15 ‘‘(C) 50 percent below the emissions 16 benchmark by 2035. 17 ‘‘(D) 70 percent below the emissions 18 benchmark by 2045. 19 ‘‘(E) 80 percent below the emissions 20 benchmark by 2050. 21 ‘‘(2) EMISSIONS BENCHMARK.—The emissions 22 benchmark is the 2005 level of life-cycle emissions 23 from the taxable carbon substances, as determined 24 by the Administrator. 25 VerDate Sep 11 2014 04:28 Sep 07, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8175.IH H8175 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 8175 IH ‘‘(3) REPORTS.— 1 ‘‘(A) EMISSIONS REDUCTIONS TARGET RE- 2 PORT.—Not later than 2 years after the date of 3 enactment of the Consumers Rebate to ban 4 Emissions and Boost AlTernative Energy Act, 5 and every 2 years thereafter, the Administrator 6 shall issue an emissions reduction benchmarks 7 report. The report shall include, in detail, the 8 emission reductions resulting from the imposi- 9 tion of tax under this section and the expected 10 trajectory of emissions reductions. 11 ‘‘(B) 5-YEAR REPORT.—The Administrator 12 shall, after consultation with other appropriate 13 Federal and State agencies and non-Federal 14 stakeholders, issue a report every 5 years on 15 the effects of the carbon tax established under 16 this subtitle, including energy market condi- 17 tions, impacts to consumers, impacts to the en- 18 vironment, actual emission reductions, and reli- 19 ability and resiliency of the electric grid. 20 ‘‘(d) BY WHOM PAID.—The tax imposed by sub- 21 section (a) shall be paid by the producer, miner, or im- 22 porter of the taxable carbon substance. 23 ‘‘(e) REGULATIONS.—Not later than 2 years after the 24 date of enactment of the Consumers Rebate to ban Emis- 25 VerDate Sep 11 2014 04:28 Sep 07, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8175.IH H8175 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 8175 IH sions and Boost AlTernative Energy Act, the Secretary 1 shall issue such regulations as may be necessary or appro- 2 priate to carry out this subtitle. 3 ‘‘SEC. 9902. CARBON EQUIVALENCY FEE. 4 ‘‘(a) PURPOSE.—The purpose of this section is to en- 5 sure the environmental effectiveness of this subtitle. 6 ‘‘(b) IMPORTS.—The Secretary, in consultation with 7 the Secretary of Energy, the Administrator, and the Com- 8 missioner of the U.S. Customs and Border Protection, 9 shall impose carbon equivalency fees on imports of goods 10 containing or produced using a taxable carbon substance. 11 The amount of the carbon equivalency fee with respect to 12 the import of any good shall be equal to the cost that do- 13 mestic producers of a comparable good incur as a result 14 of— 15 ‘‘(1) the tax imposed under section 9901, and 16 ‘‘(2) carbon equivalency fees imposed under this 17 section on any goods used in the production of such 18 good. 19 ‘‘(c) COLLECTION.—The fees imposed under this sec- 20 tion shall be collected by the Commissioner of the U.S. 21 Customs and Border Protection. 22 ‘‘(d) EXPIRATION.—This section shall cease to have 23 effect at such time as and to the extent that— 24 VerDate Sep 11 2014 04:28 Sep 07, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H8175.IH H8175 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 8175 IH ‘‘(1) an international agreement requiring coun- 1 tries that emit carbon dioxide or produce goods con- 2 taining or using taxable carbon substances to adopt 3 equivalent measures comes into effect, or 4 ‘‘(2) the country of export has implemented 5 equivalent measures, as determined by the Sec- 6 retary, in consultation with the Secretary of State. 7 ‘‘SEC. 9903. DEFINITIONS. 8 ‘‘For purposes of this subtitle— 9 ‘‘(1) TAXABLE CARBON SUBSTANCE.—The term 10 ‘taxable carbon substance’ means— 11 ‘‘(A) coal, 12 ‘‘(B) oil, and 13 ‘‘(C) natural gas. 14 ‘‘(2) COAL.—The term ‘coal’ includes lignite, 15 anthracite, bituminous, subbituminous, peat or other 16 forms of what is commonly referred to as coal pro- 17 duced from a mine. 18 ‘‘(3) OIL.—The term ‘oil’ includes crude oil 19 condensates, natural gasoline, shale oil, any bitumen 20 or bituminous mixture, any oil derived from a bitu- 21 men or bituminous mixture, and any oil derived 22 from kerogen-bearing sources. 23 VerDate Sep 11 2014 04:28 Sep 07, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H8175.IH H8175 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 8175 IH ‘‘(4) NATURAL GAS.—The term ‘natural gas’ 1 means either natural gas unmixed, or any mixture of 2 natural and artificial gas. 3 ‘‘(5) LIFE-CYCLE EMISSIONS.—The term ‘life- 4 cycle emissions’ means total life-cycle emissions of 5 carbon dioxide from a taxable carbon substance 6 which shall be determined by the Administrator. 7 ‘‘(6) ADMINISTRATOR.—The term ‘Adminis- 8 trator’ means the Administrator of the Environ- 9 mental Protection Agency. 10 ‘‘(7) UNITED STATES.—The term ‘United 11 States’ means the States, and territory or possession 12 of the United States, and the District of Columbia. 13 ‘‘SEC. 9904. SPECIAL RULES. 14 ‘‘(a) EXPORT.—For purposes of this subtitle— 15 ‘‘(1) IN GENERAL.—No tax shall be imposed 16 under section 9901 on the production or mining of 17 a taxable carbon substance which is intended for ex- 18 port, including the sale or resale by a purchaser to 19 a second purchaser for export. 20 ‘‘(2) PROOF OF EXPORT REQUIRED.—Rules 21 similar to the rules of section 4221(b) shall apply for 22 purposes of paragraph (1). 23 ‘‘(3) CREDIT OR REFUND WHERE TAX PAID.— 24 VerDate Sep 11 2014 04:28 Sep 07, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H8175.IH H8175 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 8175 IH ‘‘(A) IN GENERAL.—Except as provided in 1 subparagraph (B), if— 2 ‘‘(i) tax under section 9901 was paid 3 with respect to any taxable carbon sub- 4 stance, and 5 ‘‘(ii)(I) such substance was exported 6 by any person, or 7 ‘‘(II) such substance was used as a 8 material in the manufacture or production 9 of a substance which was exported by any 10 person and which, at the time of export, 11 was a taxable carbon substance (as defined 12 in section 9902(1)), 13 credit or refund (without interest) of such tax 14 shall be allowed or made to the person who paid 15 such tax. 16 ‘‘(B) CONDITION TO ALLOWANCE.—No 17 credit or refund shall be allowed or made under 18 subparagraph (A) unless the person who paid 19 the tax establishes that he— 20 ‘‘(i) has repaid or agreed to repay the 21 amount of the tax to the person who ex- 22 ported the taxable chemical or taxable sub- 23 stance (as so defined), or 24 VerDate Sep 11 2014 04:28 Sep 07, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H8175.IH H8175 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 8175 IH ‘‘(ii) has obtained the written consent 1 of such exporter to the allowance of the 2 credit or the making of the refund. 3 ‘‘(4) REFUNDS DIRECTLY TO EXPORTER.—The 4 Secretary shall provide, in regulations, the cir- 5 cumstances under which a credit or refund (without 6 interest) of the tax under section 9901 shall be al- 7 lowed or made to the person who exported the tax- 8 able carbon substance, where— 9 ‘‘(A) the person who paid the tax waives 10 his claim to the amount of such credit or re- 11 fund, and 12 ‘‘(B) the person exporting the taxable car- 13 bon substance provides such information as the 14 Secretary may require in such regulations. 15 ‘‘(5) REGULATIONS.—The Secretary shall pre- 16 scribe such regulations as may be necessary to carry 17 out the purposes of this subsection.’’. 18 (b) ESTABLISHMENT OF TRUST FUND.— 19 (1) IN GENERAL.—Subchapter A of chapter 98 20 of such Code (relating to trust fund code) is amend- 21 ed by adding at the end the following: 22 ‘‘SEC. 9512. CARBON TRUST FUND. 23 ‘‘(a) CREATION OF TRUST FUND.—There is estab- 24 lished in the Treasury of the United States a trust fund 25 VerDate Sep 11 2014 04:28 Sep 07, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H8175.IH H8175 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 8175 IH to be known as the ‘Carbon Trust Fund’ (referred to in 1 this section as the ‘Trust Fund’), consisting of such 2 amounts as may be appropriated or credited to the Trust 3 Fund as provided in this section or section 9602(b). 4 ‘‘(b) TRANSFERS TO TRUST FUND.—There is hereby 5 appropriated to the Trust Fund an amount equivalent to 6 the amounts received in the Treasury pursuant to section 7 9901. 8 ‘‘(c) EXPENDITURES FROM TRUST FUND.— 9 ‘‘(1) IN GENERAL.—From amounts in the 10 Trust Fund at the beginning of a fiscal year, the fol- 11 lowing amounts shall be made available as follows: 12 ‘‘(A) The amount necessary shall be paid 13 into general receipts in the Treasury to offset 14 a reduction in the rate of individual income tax 15 by reason of the amendments made by section 16 2(c) of the Consumers Rebate to ban Emissions 17 and Boost AlTernative Energy Act. 18 ‘‘(B) Of the amounts remaining available 19 after the application of subparagraph (A), 20 20 percent shall be available for the following: 21 ‘‘(i) Worker transition assistance, with 22 an emphasis on coal workers and coal com- 23 munities, and workforce development. 24 VerDate Sep 11 2014 04:28 Sep 07, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H8175.IH H8175 pbinns on DSKJLVW7X2PROD with BILLS 12 •HR 8175 IH ‘‘(ii) Rural energy assistance and effi- 1 ciency improvements. 2 ‘‘(iii) Technology neutral, energy-re- 3 lated research and development. 4 ‘‘(iv) Air, rail, and marine transpor- 5 tation emissions reduction and efficiency 6 programs. 7 ‘‘(v) Electric grid and pipeline innova- 8 tions and improvements. 9 ‘‘(vi) Increasing resiliency of water, 10 transportation, energy, and other infra- 11 structure that are vulnerable to extreme 12 weather and other effects of a changing cli- 13 mate. 14 ‘‘(vii) Energy efficiency and conserva- 15 tion. 16 ‘‘(C) The amounts remaining after the ap- 17 plication of subparagraphs (A) and (B) shall be 18 made available for quarterly citizen rebates. 19 ‘‘(2) CONSULTATION.—In determining the 20 amount provided toward each category referred to in 21 paragraph (1)(B), the Secretary shall consult with 22 the Secretary of Energy, the Secretary of Labor, 23 and any other relevant Federal agency prior to dis- 24 tributing money from the Trust Fund.’’. 25 VerDate Sep 11 2014 04:28 Sep 07, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H8175.IH H8175 pbinns on DSKJLVW7X2PROD with BILLS 13 •HR 8175 IH (2) CLERICAL AMENDMENT.—The table of sec- 1 tions for subchapter A of chapter 98 of such Code 2 is amended by adding at the end the following new 3 item: 4 ‘‘Sec. 9512. Carbon trust fund.’’. (c) REDUCTION IN INDIVI [Text truncated for display. Full text available on Congress.gov.]