H. R. 3242
IN THE HOUSE OF REPRESENTATIVES
October 24, 2011
Mr. Stark (for himself, Mr. Grijalva, Mr. Moran, Mr. Filner, Mr. Blumenauer, Mr. Honda, Mr. McDermott, Mr. Holt, and Mr. Hastings of Florida) introduced the following bill; which was referred to the Committee on Ways and Means
To amend the Internal Revenue Code of 1986 to reduce emissions of carbon dioxide by imposing a tax on primary fossil fuels based on their carbon content.
This Act may be cited as the
Save Our Climate Act of
The Congress finds as follows:
The Intergovernmental Panel on Climate Change (IPCC) has concluded that human emissions of greenhouse gases, particularly carbon dioxide are responsible for global climate change.
The IPCC has estimated that global temperatures will rise between 3.2–7.2 degrees Fahrenheit in the next 100 years if carbon dioxide emissions are not dramatically reduced.
An increase of even a few degrees could have major adverse impacts on both the natural and man-made environments, due to rising sea-levels, intensification of weather events, mass extinction of species, and scarcity of water.
The United States is responsible for nearly 18 percent of the world’s annual carbon dioxide emissions, equaling approximately 5.5 billion metric tons of carbon dioxide per year.
In order to stabilize the earth’s climate and prevent catastrophic global climate change, the level of worldwide carbon dioxide emissions needs to be reduced 80 percent below 1990 levels by 2050.
A tax on the carbon content of fossil fuels will create incentives for investment and development of low and zero carbon alternatives, thereby reducing carbon dioxide emissions and while generating funds to reduce our deficits.
Revenue from a carbon tax can reduce the deficit. Dedicating the revenue from a $10 per ton of carbon dioxide tax could reduce the deficit by more than $480 billion over ten years.
In order to protect consumers from higher energy prices, all carbon tax revenue not targeted for deficit reduction shall be returned to individuals through a dividend distributed on an annual basis.
Imposition of carbon tax on primary fossil fuels
Chapter 38 of the Internal Revenue Code of 1986 (relating to environmental taxes) is amended by adding at the end thereof the following new subchapter:
Carbon Tax on Primary Fossil Fuels
Sec. 4691. Imposition of tax.
Imposition of tax
There is hereby imposed a tax on any taxable fuel sold by the manufacturer, producer, or importer thereof.
Amount of tax
The amount of tax imposed by subsection (a) on any taxable fuel shall be an equivalent amount to $10 per ton of carbon dioxide produced by combustion in such fuel, as determined by the Secretary in consultation with the Secretary of Energy.
Annual increase in amount of tax
For each calendar year beginning after 2011
which is not the year after a target attainment year, paragraph (1) shall be
applied by substituting for
$10 the following:
in effect under this paragraph for the preceding calendar year, increased by
Rate freeze after target attainment
For each calendar year after a target attainment year, the amount in effect under paragraph (1) shall be the amount in effect under paragraph (1) for the preceding calendar year.
Target attainment year
For purposes of paragraph (2), a calendar year is a target attainment year if the level of carbon dioxide emissions in the United States for the calendar year does not exceed 20 percent of the level of carbon dioxide emissions in the United States for calendar year 1990, as determined by the Energy Information Administration, Department of Energy.
For purposes of this section, the term taxable fuel means—
coal (including lignite and peat),
petroleum and any petroleum product (as defined in section 4612(a)(3)),
natural gas, and
biomass, municipal solid waste, and any organic material other than coal, petroleum, and natural gas that is sold for the purpose of energy production, as determined by the Secretary of Energy,
For purposes of this section—
The term United States has the meaning given such term by section 4612(a)(4).
The term importer means the person entering the taxable fuel for consumption, use, or warehousing.
The term ton means 2,000 pounds. In the case of any taxable fuel which is a gas, the term ton means the amount of such gas in cubic feet which is the equivalent of 2,000 pounds on a molecular weight basis.
No tax shall be imposed by subsection (a) on the sale or in-kind exchange of any taxable fuel for deposit in the Strategic Petroleum Reserve established under part B of title I of the Energy Policy and Conservation Act.
Only 1 tax imposed with respect to any product
No tax shall be imposed by subsection (a) with respect to a taxable fuel if, with respect to such fuel, the person who would be liable for such tax establishes that a prior tax imposed by such subsection has been imposed and no refund or credit with respect to such tax is allowed under subsection (g).
Fractional part of ton
In the case of a fraction of a ton, the tax imposed by subsection (a) shall be the same fraction of the amount of such tax imposed on a whole ton.
Use and certain exchanges by manufacturer, etc
Use treated as sale
If any person manufactures, produces, or imports any taxable fuel and uses such fuel, then such person shall be liable for tax under subsection (a) in the same manner as if such fuel were sold by such person.
Special rules for inventory exchanges
Except as provided in this subparagraph, in any case in which a manufacturer, producer, or importer of a taxable fuel exchanges such fuel as part of an inventory exchange with another person—
such exchange shall not be treated as a sale, and
such other person shall, for purposes of subsection (a), be treated as the manufacturer, producer, or importer of such fuel.
Clause (i) shall not apply to any inventory exchange unless—
both parties are registered with the Secretary as manufacturers, producers, or importers of taxable fuels, and
the person receiving the taxable fuel has, at such time as the Secretary may prescribe, notified the manufacturer, producer, or importer of such person’s registration number and the internal revenue district in which such person is registered.
For purposes of this subparagraph, the term inventory exchange means any exchange in which 2 persons exchange property which is, in the hands of each person, property described in section 1221(a)(1).
Refund or credit for certain uses
Manufacture or production of another taxable fuel
Under regulations prescribed by the Secretary, if—
a tax under subsection (a) was paid with respect to any taxable fuel, and
such fuel was used by any person in the manufacture or production of any other substance which is a taxable fuel,
Embedded or sequestered carbon
Under regulations prescribed by the Secretary, if—
a tax under subsection (a) was paid with respect to any taxable fuel,
a person uses such fuel in the manufacture or production of any substance which is not a taxable fuel, and
in the process of such manufacture or production, carbon in such fuel is embedded or sequestered,
In any case to which paragraph (1) or (2) applies, the amount of any such credit or refund shall not exceed the amount of tax imposed by subsection (a) on the taxable fuel used in such manufacture or production (or which would have been imposed by such subsection on such other fuel but for subsection (h)).
Exemption for exports of taxable fuels
No tax shall be imposed by subsection (a) on the sale by the manufacturer or producer of any taxable fuel for export or for resale by the purchaser to a second purchaser for export.
Proof of export required
Rules similar to the rules of section 4221(b) shall apply for purposes of subparagraph (A).
Credit or refund where tax paid
Except as provided in subparagraph (B), if—
tax under subsection (a) was paid with respect to any taxable fuel, and
such fuel was exported by any person, or
such fuel was used as a material in the manufacture or production of a taxable fuel which was exported by any person and which, at the time of export, was a taxable fuel,
Condition to allowance
No credit or refund shall be allowed or made under subparagraph (A) unless the person who paid the tax establishes that he—
has repaid or agreed to repay the amount of the tax to the person who exported the taxable fuel, or
has obtained the written consent of such exporter to the allowance of the credit or the making of the refund.
Refunds directly to exporter
The Secretary shall provide, in regulations, the circumstances under which a credit or refund (without interest) of the tax under subsection (a) shall be allowed or made to the person who exported the taxable fuel, where—
the person who paid the tax waives his claim to the amount of such credit or refund, and
the person exporting the taxable fuel provides such information as the Secretary may require in such regulations.
The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection.
The Secretary shall make harmonization adjustments on the importation of any product.
In the case that taxes paid by manufacturers and producers under this section with respect to comparable products exceeds the sum of any similar carbon content tax imposed by a foreign country on the imported product, plus the amount imposed under subsection (a), the adjustment under subsection (a) shall be the imposition of a fee in the amount the Secretary determines is equal to such excess. Such fee shall be treated as a tax for purposes of subtitle F.
Credit or refund
In the case that any similar carbon content tax imposed by a foreign country on the imported product exceeds the taxes paid by manufacturers and producers under this section with respect to comparable products, the adjustment under subsection (a) shall be a credit or refund (without interest) in the amount the Secretary determines is equal to such excess. Such credit or refund shall be allowed in the same manner as if it were an overpayment of tax.
The Secretary shall issue such regulations as may be necessary to carry out this subsection.
Not later than 5 years after the date of the enactment of this Act, and every 5 years thereafter, the Secretary of the Treasury, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, shall conduct a study on the environmental, economic, and revenue impacts, and the carbon dioxide emissions in the United States, regarding the tax imposed by subchapter E of chapter 38 of the Internal Revenue Code of 1986 (relating to carbon tax on primary fossil fuels). The Secretary shall submit each study to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate.
The table of subchapters for chapter 38 of such Code is amended by adding at the end thereof the following new item:
Subchapter E. Carbon tax on primary fossil fuels.
The amendments made by this section shall apply to sales after December 31, 2011.
Healthy Climate Trust Fund
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:
Healthy Climate Trust Fund
There is established in the Treasury of the
United States a trust fund to be known as the
Healthy Climate Trust
Fund, consisting of such amounts as may be appropriated to such trust
fund as provided for in this section.
There are appropriated to the Healthy Climate Trust Fund—
for calendar year 2012, amounts equivalent to the taxes received under section 6691, and
for any calendar year after 2012, amounts equivalent to the taxes received under section 6691 that are attributable to the excess of—
the rate of tax in effect under such section for the calendar year, over
Such amounts as may be necessary from the Healthy Climate Trust Fund shall be available to pay the administrative expenses necessary to carry out this section for each year, but not exceeding 0.50 percent of the amounts appropriated to such trust fund under subsection (b) in such year.
Consumer Dividend Payments
Amounts in the Healthy Climate Trust Fund not used under paragraph (1) for any year shall be available for making consumer dividend payments under subsection (d) before February 15 of the following year.
Payment of Consumer Dividend
From amounts made available under subsection (c)(2), the Secretary shall make annual consumer dividend payments to each individual who is an eligible individual for that year.
Consumer dividend payment
The term consumer dividend payment means the individual pro-rata share, as determined by the Secretary, of amounts available for the year in the Healthy Climate Trust Fund under subsection (c)(2).
The term eligible individual means, with respect to any year, any individual with a TIN (other than a nonresident alien individual) who is lawfully present in the United States for such month, as determined and verified by the Secretary in consultation with any other Federal entity the Secretary determines appropriate.
Tax treatment of payments
Amounts paid under this subsection shall be includible in gross income.
Report to Congress
Not later than June 1, 2013, and at least annually thereafter, the Secretary shall transmit to Congress a report accounting for the disposition of amounts in the Healthy Climate Trust Fund in the previous calendar year.
Healthy Climate Trust Fund Website
Not later than 90 days after the date of the enactment of this section, the Secretary shall establish and maintain a website to provide the public with information on the disposition of any amounts in the Healthy Climate Trust Fund.
The Secretary shall prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section.
The table of sections for subchapter A of chapter 98 of such Code is amended by adding at the end the following new item:
Sec. 9512. Healthy Climate Trust Fund.
The amendments made by this section shall take effect on January 1, 2011.
Disclosure of information
Limited disclosure of identity
Subsection (l) of section 6103 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
Limited disclosure of identity information relating to consumer dividend payments
Department of the Treasury
Individual identity information shall, without written request, be open to inspection by or disclosure to officers and employees of the Department of the Treasury whose official duties require such inspection or disclosure for purposes of section 9512(d).
Commissioner of Social Security
The Commissioner of Social Security shall, on written request, disclose to officers and employees of the Department of the Treasury individual identity information which has been disclosed to the Social Security Administration as provided by paragraph (1) or (5).
Restriction on disclosure
Information disclosed under this paragraph shall be disclosed only for purposes of, and to the extent necessary in, carrying out section 9512(d).
6103(p)(3)(A) of the Internal Revenue Code of 1986 is amended by striking
or (21) and inserting
, (21), or (22).
The amendments made by this Act shall take effect on the date of the enactment of this Act.