H.R. 1683 (111th): Clean Environment and Stable Energy Market Act of 2009
111th Congress, 2009–2010. Text as of Mar 24, 2009 (Introduced).
Status & Summary | PDF | Source: GPO
HR 1683 IH
111th CONGRESS
1st Session
H. R. 1683
To amend the Internal Revenue Code of 1986 to reduce greenhouse gas emissions by requiring a Federal emission permit for the sale or use of greenhouse gas emission substances, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
March 24, 2009
March 24, 2009
Mr. MCDERMOTT (for himself, Mr. BLUMENAUER, Mr. LARSON of Connecticut, and Mr. STARK) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently 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 reduce greenhouse gas emissions by requiring a Federal emission permit for the sale or use of greenhouse gas emission substances, and for other purposes.
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 ‘Clean Environment and Stable Energy Market Act of 2009’.
SEC. 2. GREENHOUSE GAS EMISSION SUBSTANCES.
(a) In General- The Internal Revenue Code of 1986 is amended by adding at the end the following:
‘Subtitle L--Greenhouse Gas Emission Substances
‘Sec. 9901. Condition precedent to sale or use of greenhouse gas emission substance.
‘Sec. 9902. Federal emission permit.
‘Sec. 9903. Definitions.
‘Sec. 9904. Regulations.
‘SEC. 9901. CONDITION PRECEDENT TO SALE OR USE OF GREENHOUSE GAS EMISSION SUBSTANCE.
‘(a) In General- No covered person may sell any greenhouse gas emission substance except pursuant to a Federal emission permit for each carbon dioxide equivalent that the Administrator of the Environmental Protection Agency determines would be emitted from the combustion or other greenhouse gas emitting use of such substance.
‘(b) Covered Person- For purposes of this subtitle, the term ‘covered person’ means--
‘(1) in the case of coal (including lignite and peat) produced from a mine in the United States, the producer of such coal,
‘(2) in the case of crude oil or petroleum products received at a United States refinery, the operator of the United States refinery,
‘(3) in the case of any greenhouse gas emission substance not described in paragraph (1) or (2) produced in the United States, the producer of such substance, and
‘(4) in the case of any greenhouse gas emission substance entered into the United States for consumption, use, or warehousing, the person entering such substance for consumption, use, or warehousing.
‘(c) Use Treated as Sale-
‘(1) IN GENERAL- If any person uses a greenhouse gas emission substance before the first retail sale of such substance, then such person shall be liable for the purchase of a Federal emission permit under section 9902 in the same manner as if such substance were sold at retail on the date of such use by such person pursuant to a Federal emission permit.
‘(2) EXEMPTION FOR USE IN FURTHER MANUFACTURE- Paragraph (1) shall not apply to use of a greenhouse gas emission substance as material in the manufacture or production of, or as a component part of, another article to be manufactured or produced by such person.
‘(d) Exceptions- Subsection (a) shall not apply to--
‘(1) a greenhouse gas emission substance to be used for noncombustion agricultural purposes, or
‘(2) a greenhouse gas emission substance with respect to which a Federal emission permit has previously been purchased.
‘(e) Importation of Carbon-Intensive Goods-
‘(1) GREENHOUSE GAS EMISSION PERMIT EQUIVALENCY FEES- The Secretary shall impose a greenhouse gas emission permit equivalency fee on imports of carbon intensive goods that shall be equivalent to the cost that domestic producers of comparable carbon intensive goods incur as a result of--
‘(A) permit fees paid by covered persons for greenhouse gas emission substances under this section, and
‘(B) greenhouse gas emission permit equivalency fees paid by importers of carbon intensive goods used in the production of the comparable carbon intensive goods in question.
‘(2) EXPIRATION- Paragraph (1) and 6633(b) shall cease to have effect at such time as and to the extent that--
‘(A) an international agreement requiring countries that emit greenhouse gases and produce carbon-intensive goods for international markets to adopt equivalent measures comes into effect, and
‘(B) the country of export has implemented equivalent measures, and the actions provided for by paragraph (1) and 6633(b) are no longer appropriate.
‘SEC. 9902. FEDERAL EMISSION PERMIT.
‘(a) In General- The Secretary shall, subject to subsection (d), issue Federal emission permits, as provided for in this subtitle. A Federal emission permit may only be obtained upon making payment to the Secretary.
‘(b) Rules Relating to Permits- For purposes of this subtitle--
‘(1) Each Federal emission permit shall be denominated in carbon dioxide equivalents.
‘(2) A Federal emission permit may only be purchased at the time a greenhouse gas emission substance is produced or entered into the United States, as the case may be.
‘(3) A Federal emission permit may not be sold, exchanged, or otherwise transferred.
‘(c) Permit Price-
‘(1) IN GENERAL- The Secretary, after consultation with the Administrator of the Environmental Protection Agency and the Secretary of Energy, shall establish the price of obtaining a Federal emission permit for a calendar year based on a determination of the dollar amount necessary to ensure that the demand for permits does not exceed the greenhouse gas emission allocations for such calendar year.
‘(2) 5-year PRICE SCHEDULE-
‘(A) IN GENERAL- Not later than January 1, 2010, and once every 5 years thereafter, the Secretary shall publish a schedule of the prices determined under paragraph (1) for obtaining a Federal emission permit during any calendar year in the 5-calendar-year period beginning 1 year after any such date.
‘(B) MODIFICATIONS- If in a given 5-year period--
‘(i) the Secretary reasonably expects to issue Federal emission permits that (in the aggregate) significantly exceed or fall short of the national limitation because of the price set by the Secretary (and not because of temporary fluctuations in the energy markets or the weather), and
‘(ii) sufficient time remains in such period,
the Secretary shall establish a new schedule of prices for the remaining years in such 5-year period. Such schedule may not take effect until after 12 months after the establishment of such schedule.
‘(C) NUMBER OF MODIFICATIONS PERMITTED- In the first 5-year period, the Secretary may change the schedule of prices under subparagraph (B) a maximum to two times. In any ensuing 5-year period, the Secretary may change the schedule of prices under subparagraph (B) a maximum of once.
‘(d) National Limitation-
‘(1) IN GENERAL- There is a national greenhouse gas emission allocation limitation for any calendar year. Such limitation for a calendar year shall be the sum of--
‘(A) the greenhouse gas emission allocations specified in the table in paragraph (3) for such calendar year reduced pursuant to paragraph (2) for such calendar year, plus
‘(B) the additional allocation of Federal emission permits issued by the Secretary for such calendar year to the extent that applications for Federal emission permits exceed the greenhouse gas emission allocations specified in the table in paragraph (3) for such calendar year.
‘(2) REDUCTION REQUIRED OVER REMAINING YEARS- After issuing additional allocations under paragraph (1)(B) during any 5-calendar-year period, the number of the greenhouse gas emission allocations specified in the table in paragraph (3) shall be reduced ratably the aggregate number of such additional allocations over the years specified in such table remaining after such period.
‘(3) ANNUAL ECONOMY-WIDE GREENHOUSE GAS EMISSION ALLOCATIONS- The greenhouse gas emission allocations for a calendar year are those specified in the following table:
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‘Calendar Year United States Economy-Wide Greenhouse Gas Emission Allocations (in Millions of Carbon Dioxide Equivalents)
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2011 6835.29
2012 6670.58
2013 6505.87
2014 6341.16
2015 6176.45
2016 6011.74
2017 5847.03
2018 5682.32
2019 5517.61
2020 5352.9
2021 5110.99
2022 4880
2023 4659.5
2024 4448.93
2025 4247.89
2026 4055.93
2027 3872.64
2028 3697.63
2029 3530.54
2030 3370.99
2031 3218.66
2032 3073.2
2033 2934.33
2034 2801.72
2035 2675.11
2036 2554.23
2037 2438.8
2038 2328.59
2039 2223.36
2040 2122.89
2041 2026.95
2042 1935.36
2043 1847.9
2044 1764.39
2045 1684.66
2046 1608.53
2047 1535.84
2048 1466.43
2049 1400.16
2050 1336.89.
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‘(e) Report- Not later than January 1, 2012, and annually thereafter, the Secretary shall publish a report describing the extent to which the United States greenhouse gas emission allocations specified under subsection (d) are being achieved. Such report shall include--
‘(1) an explanation of the methodology and assumptions the Secretary has used in establishing prices under this section, and
‘(2) an estimation, or range of estimations, of the price of permits for the 10-year period following the current 5-year period.
‘SEC. 9903. DEFINITIONS.
‘(a) In General- For purposes of this subtitle--
‘(1) ADMINISTRATOR- The term ‘Administrator’ means the Administrator of the Environmental Protection Agency.
‘(2) CARBON DIOXIDE EQUIVALENT- The term ‘carbon dioxide equivalent’ means, for each greenhouse gas emission substance, the quantity of the greenhouse gas emission substance that the Administrator determines makes the same contribution to global warming as 1 metric ton of carbon dioxide.
‘(3) GREENHOUSE GAS EMISSION SUBSTANCE- The term ‘greenhouse gas emission substance’ means--
‘(A) coal (including lignite, peat, and derivatives of coal), to be used as a combustion fuel,
‘(B) petroleum and any petroleum product, to be used as a combustion fuel,
‘(C) natural gas,
‘(D) methane,
‘(E) nitrous oxide,
‘(F) sulfur hexafluoride,
‘(G) a perfluorocarbon,
‘(H) a hydrofluorocarbon, and
‘(I) any other substance that is determined by the Administrator to contribute to global warming to a nonnegligible degree.
‘(4) FEDERAL EMISSION PERMIT- The term ‘Federal emission permit’ means a permit required under section 9901.
‘(5) CARBON-INTENSIVE GOOD- The term ‘carbon-intensive good’ means--
‘(A)(i) iron, steel, any steel mill product (including pipe and tube), aluminum, cement, glass (including flat, container, and specialty glass and fiberglass), pulp, paper, chemicals, and industrial ceramics, and
‘(ii) any other manufactured product that the Secretary determines--
‘(I) is sold for purposes of further manufacture, and
‘(II) generates, in the course of the manufacture of the product, direct and indirect greenhouse gas emissions that are comparable (on an emissions per dollar of output basis) to emissions generated in the manufacture or production of a good identified in clause (i), and
‘(B) a manufactured item in which one or more goods identified under subparagraph (A) are inputs and the cost of production of which in the United States the Secretary determines is significantly increased by this subtitle.
‘(6) PETROLEUM PRODUCT- The term ‘petroleum product’ has the meaning given such term in section 4612(a)(3).
‘(b) Identification of Carbon-Intensive Goods- The determinations by the Secretary required by subsection (a)(5) shall be by rule.
‘SEC. 9904. REGULATIONS.
‘The Secretary shall issue such regulations as may be necessary or appropriate to carry out this subtitle, including regulations relating to the timely and efficient issuance of permits and collection of payments for such permits.’.
(b) Refund of Federal Emission Permit Fee- Subchapter B of chapter 65 of such Code is amended by adding at the end the following new section:
‘SEC. 6633. REFUNDS OF FEDERAL EMISSION PERMIT FEE FOR CERTAIN USES.
‘(a) In General- If a Federal emission permit has been acquired with respect to a greenhouse gas emission substance pursuant to section 9902 and the acquirer of such permit uses such substance in a manner that will make a negligible or no contribution to global warming, as determined by the Secretary in consultation with the Administrator of the Environmental Protection Agency, the Secretary shall pay (without interest) to the acquirer of such substance pursuant to such permit an amount equal to the amount paid for the applicable Federal emission permit.
‘(b) Payments to Exporters- The Secretary shall pay (without interest) to the exporter of a carbon-intensive good (as defined in section 9903(5)) produced in the United States an amount equal to the cost that domestic producers of such carbon-intensive goods incur as a result of--
‘(1) the dollar amount paid by covered persons for Federal emission permits for greenhouse gas emission substances under this section 9902, and
‘(2) greenhouse gas emission permit equivalency fees paid under section 9901(e) by importers of carbon-intensive goods used in the production of the comparable carbon-intensive goods in question.’.
(c) Failure To Obtain Permit- Subtitle D of the Internal Revenue Code of 1986 is amended by adding at the end the following new chapter:
‘CHAPTER 48--GREENHOUSE GAS EMISSION SUBSTANCES
‘Sec. 5000A. Greenhouse gas emission substances.
‘SEC. 5000A. GREENHOUSE GAS EMISSION SUBSTANCES.
‘(a) Imposition of Tax- There is hereby imposed on any covered person who fails to obtain a Federal emission permit pursuant to subtitle L a tax equal to 300 percent of the dollar amount of the fee that would have been charged for such permit but for such failure.
‘(b) Covered Person- The term ‘covered person’ has the meaning given such term by section 9901(b).
‘(c) Federal Emission Permit- The term ‘Federal emission permit’ means a permit required under section 9901.’.
(d) Establishment of Climate Protection and Economic Security Trust Fund-
(1) FINDING- The Congress finds that revenue generated from the sale of Federal emission permits must be recycled into the American economy--
(A) to facilitate economic growth and clean energy production, and
(B) to protect the economic security of vulnerable families and communities.
(2) ESTABLISHMENT OF TRUST FUND- Subchapter A of chapter 98 of such Code (relating to trust fund code) is amended by adding at the end the following:
‘SEC. 9511. CLIMATE PROTECTION AND ECONOMIC SECURITY TRUST FUND.
‘(a) Creation of Trust Fund- There is established in the Treasury of the United States a trust fund to be known as the ‘Climate Protection and Economic Security Trust Fund’ (referred to in this section as the ‘Trust Fund’), consisting of such amounts as may be appropriated or credited to the Trust Fund as provided in this section or section 9602(b).
‘(b) Transfers to Trust Fund- There is hereby appropriated to the Trust Fund an amount equivalent to the amounts received in the Treasury pursuant to subtitle L.’.
(e) Conforming and Clerical Amendments-
(1) The table of chapters for subtitle D of such Code is amended by adding at the end the following new item:
‘Chapter 48--Greenhouse Gas Emission Substances.’.
(2) The table of subtitles for the Internal Revenue Code of 1986 is amended by adding at the end the following new item:
‘Subtitle L--Greenhouse Gas Emission Substances.’.
(3) The table of sections for subchapter A of chapter 98 of such Code is amended by adding at the end the following:
‘Sec. 9511. Climate Protection and Economic Security Trust Fund.’.
(f) Effective Date- The amendments made by this section shall apply with respect to the sale of any greenhouse gas emission substance after December 31, 2010.