H. R. 2014
IN THE HOUSE OF REPRESENTATIVES
April 6, 2017
Mr. Delaney (for himself, Mr. Cartwright, and Mr. Polis) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, 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
To amend the Internal Revenue Code of 1986 to impose an excise tax on greenhouse gas emissions.
This Act may be cited as the
Tax Pollution, Not Profits Act.
Greenhouse gas emissions
Chapter 38 of the Internal Revenue Code of 1986 is amended by adding at the end thereof the following new subchapter:
Greenhouse Gas Emissions
Sec. 4691. Tax imposed on greenhouse gas emissions.
Sec. 4692. Border adjustments.
Sec. 4693. Definitions and other rules.
Tax imposed on greenhouse gas emissions
There is hereby imposed a tax on greenhouse gas emissions from fossil fuel products and on greenhouse gas emissions from any person who is required to report emissions, or to which emissions are attributed, under subpart A of part 98 of title 40, Code of Federal Regulations, as in effect on the date of the enactment of the Tax Pollution, Not Profits Act, and emitted not less than 25,000 tons of carbon dioxide emissions or carbon dioxide equivalent emissions during the preceding calendar year.
Application of tax
The Secretary shall apply to the person responsible for reporting under part 98 of title 40, Code of Federal Regulations, unless, in consultation with the Administrator of the Environmental Protection Agency, the Secretary determines that applying the tax to a different person would be less burdensome and would not have the effect of increasing carbon dioxide equivalent emissions.
Amount of tax
In 2018, the amount of the tax will equal $30 per metric ton of carbon dioxide or carbon dioxide equivalent. The amount in the preceding sentence shall be increased each subsequent year by 4 percent above inflation, as measured by the Consumer Price Index for all urban consumers (all items; United States city average), rounded up to the next whole dollar amount.
The Secretary shall provide a refund equal to the tax per metric ton of carbon dioxide or carbon dioxide equivalent for the capture and permanent sequestration of greenhouse gas emissions or from the use of a fossil fuel in manufacturing which does not result in the emission of a greenhouse gas in a manner that can be reasonably assumed to permanently sequester the greenhouse gas content of the fossil fuel.
In the case of any good exported from the United States, the Secretary may provide an equivalency refund to the person exporting such good equal to the cost associated with the tax imposed in section 4691.
In the case of any good imported into the United States that would have had an increased cost imposed by section 4691 had that good been produced in the United States, the Secretary may impose an equivalency fee on the person importing such good equivalent to the tax that would have been imposed under section 4691 at any point in the supply chain of that good, had that good been produced in the United States.
The Secretary shall consult with the Administrator of the Environmental Protection Agency, the United States Trade Representative, and the Secretary of Energy in establishing rules and regulations implementing the purposes of this section.
Definitions and other rules
For purposes of this subchapter—
Carbon dioxide equivalent
The term carbon dioxide equivalent means, for each greenhouse gas, the quantity of greenhouse gas that the Administrator of the Environmental Protection Agency determines makes the same contribution to global warming as 1 metric ton of carbon dioxide.
The term greenhouse gas means any of the following:
The Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this subchapter, including, in consultation with the Administrator of the Environmental Protection Agency, defining
permanent sequestration of greenhouse gas emissions and specifying under what conditions
the use of a fossil fuel in manufacturing which does not result in the emission of a greenhouse gas in a manner that can be reasonably assumed to permanently sequester the greenhouse gas content of the fossil fuel for purposes of this section.
The table of subchapters for chapter 38 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:
Subchapter E. Greenhouse Gas Emissions
The amendments made by this section shall apply to taxable years beginning after December 31, 2017.
Assistance to low income families
The Social Security Act (42 U.S.C. 301 et seq.) is amended by adding at the end the following:
Low-Income Energy Cost Mitigation Program
Low-Income Energy Cost Mitigation Program
The Secretary, in consultation with the Commissioner of Social Security and the Secretary of Agriculture, shall formulate and administer the program provided for in this section, which shall be known as the
Low-Income Energy Cost Mitigation Program, and under which eligible households are provided an energy refund.
Eligibility of households To receive energy refund
Each eligible household shall be entitled to receive monthly cash payments under this section in an amount equal to the monthly energy refund amount determined under subsection (d).
A household shall be considered to be an eligible household for purposes of this section if—
except as provided in subsection (d)(4), the gross income of the household does not exceed 200 percent of the poverty line;
the State agency for the State in which the household is located determines that the household is participating in—
the Supplemental Nutrition Assistance Program authorized by the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.);
the Food Distribution Program on Indian Reservations authorized by section 4(b) of such Act (7 U.S.C. 2013(b)); or
the program for nutrition assistance in Puerto Rico or American Samoa under section 19 of such Act (7 U.S.C. 2028);
the household consists of a single individual or a married couple, and—
receives the subsidy described in section 1860D–14 of this Act (42 U.S.C. 1395w–114); or
participates in the program under title XVIII of this Act; and
meets the income requirements described in section 1860D–14(a)(1) or (a)(2) of this Act (42 U.S.C. 1395w–114(a)(1) or (a)(2)); or
the household consists of a single individual or a married couple, and receives benefits under the supplemental security income program under title XVI of this Act (42 U.S.C. 1381–1383f).
Notwithstanding any other provision of law, the Secretary shall provide refunds to United States citizens, United States nationals, and individuals lawfully residing in the United States who qualify for a refund under paragraph (1)(A), and shall establish procedures to ensure that other individuals do not receive refunds.
The Secretary shall consult with the Secretary of Agriculture and establish uniform national standards of eligibility ensuring that States may co-administer the energy refund program with the Supplemental Nutrition Assistance Program in accordance with the provisions of this section. No State agency shall impose any other standard or requirement as a condition of eligibility or refund receipt under the program. Assistance in the Energy Refund Program shall be furnished promptly to all eligible households who make application for such participation or are already enrolled in any program referred to in paragraph (1).
Monthly energy refund amount
Estimated annual refund
Not later than 30 days after the date of the enactment of the Tax Pollution, Not Profits Act, and each November 30 thereafter, the Energy Information Administration shall estimate, pursuant to a method that is appropriate for such purposes, the annual total loss in purchasing power that will result from subchapter E of chapter 38 of the Internal Revenue Code of 1986 (relating to excise tax on carbon dioxide and other greenhouse gas emissions) in the next calendar year for households of each size with gross income equal to 150 percent of the poverty line, based on the projected total market value of all compliance costs, excluding the amount of the increase in households’ energy consumption that is financed by higher cost of living adjustments to Federal benefits that result from increased carbon costs.
Monthly energy refund
Subject to paragraph (3), the amount of the monthly energy refund for an eligible household under this section shall be—
if the household has 1, 2, 3, or 4 members, 1/12 of the amount estimated under paragraph (1) for such calendar year for a household of the same size, rounded to the nearest whole dollar amount; or
if the household has 5 or more members, 1/12 of the arithmetic mean value of the amounts estimated under paragraph (1) for such calendar year for households with 5 or more members, rounded to the nearest whole dollar amount.
In any case in which the gross income of an eligible household exceeds 150 percent of the poverty line applicable to such household, the refund determined under paragraph (2) shall be reduced ratably (but not below zero) by 2 percentage points for each percentage point that the gross income exceeds 150 percent of such poverty line.
Extension of phaseout into middle class
Not later than 30 days after the date of the enactment of the Tax Pollution, Not Profits Act, and each November 30 thereafter, the Secretary shall estimate for the next calendar year the amount of revenues to be received in the general fund of the Treasury by reason of subchapter E of chapter 38 (relating to carbon dioxide and other greenhouse gas emissions) and the expenditures during such calendar year to carry out the Tax Pollution, Not Profits Act and the amendments made by such Act.
If such revenues exceed such expenditures, then—
for such calendar year the phaseout in paragraph (3) shall be applied by substituting for
2 percentage points the percentage determined by the Secretary to extend the phaseout under paragraph (3) in such a manner as to reduce such excess to zero, and
in the case of households the gross income of which exceeds 200 percent of the poverty line, Secretary may under regulations allow a credit under subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 for the aggregate of the monthly energy refunds.
Subject to standards and an implementation schedule set by the Secretary, the energy refund shall be provided in monthly installments via—
direct deposit into the eligible household’s designated bank account;
the State’s electronic benefit transfer system; or
another Federal or State mechanism, if such a mechanism is approved by the Secretary.
The standards described under paragraph (1) shall—
protect the privacy of energy refund applicants and recipients;
provide energy refund recipients with choices, as appropriate, for delivery and receipt of refunds;
ensure ease of use and access to refunds, including a prohibition on any fees charged for withdrawals or other related services;
protect, in a cost-effective manner, against improper access to energy refunds;
ensure interoperability of the Energy Refund Program between States and permit monitoring and investigations by authorized law enforcement agencies; and
include such standards, as determined appropriate by the Secretary, to protect applicant and recipient households from fraud and abuse and promote effective and efficient administration of Energy Refund Program.
The State agency of each participating State shall assume responsibility for the certification of applicant households and for the issuance of refunds and the control and accountability thereof.
Subject to such standards as determined appropriate by the Secretary, the Secretary shall reimburse each State agency for 100 percent of administrative costs.
Under standards established by the Secretary, the State agency shall establish procedures governing the administration of the Energy Refund Program that the State agency determines best serve households in the State, including households with special needs, such as households with elderly or disabled members, households in rural areas, homeless individuals, and households residing on reservations as defined in the Indian Child Welfare Act of 1978 and the Indian Financing Act of 1974. In carrying out this paragraph, a State agency—
shall provide timely, accurate, and fair service to applicants for, and participants in, the Energy Refund Program;
shall permit an applicant household to apply to participate in the program at the time that the household first contacts the State agency, and shall consider an application that contains the name, address, and signature of the applicant to be sufficient to constitute an application for participation;
shall screen any applicant household for the Supplemental Nutrition Assistance Program, the State’s medical assistance program under section XIX of this Act, the Children's Health Insurance Program under section XXI of this Act, and a State program that provides basic assistance under a State program funded under title IV of this Act or with qualified State expenditures as defined in section 409(a)(7) of this Act for eligibility for the Energy Refund Program and, if eligible, shall enroll such applicant household in the Energy Refund Program;
shall complete certification of and provide a refund to any eligible household not later than 30 days following its filing of an application;
shall use appropriate bilingual personnel and materials in the administration of the program in those portions of the State in which a substantial number of members of low-income households speak a language other than English; and
shall utilize State agency personnel who are employed in accordance with the current standards for a Merit System of Personnel Administration or any standards later prescribed by the Office of Personnel Management pursuant to section 208 of the Intergovernmental Personnel Act of 1970 (42 U.S.C. 4728) modifying or superseding such standards relating to the establishment and maintenance of personnel standards on a merit basis to make all tentative and final determinations of eligibility and ineligibility.
Streamlined eligibility for certain beneficiaries of Federal programs
The Secretary, the Commissioner of Social Security, the Railroad Retirement Board, or the Secretary of Veterans Affairs shall develop procedures to directly provide energy refunds to individuals that are beneficiaries under the benefit programs administered by such entities and are eligible to receive such refunds under the Energy Refund Program, if the Secretary determines, in consultation with the Commissioner of Social Security, the Railroad Retirement Board, and the Secretary of Veterans Affairs, that—
one or more of such entities are able to determine the gross income of such beneficiaries for purposes of determining eligibility for the energy refund;
such entities are able to coordinate to ensure that such beneficiaries do not receive multiple energy refunds; and
Federal provision of energy refunds would be more efficient and result in receipt of energy refunds by a greater number of eligible beneficiaries than delivery of such refunds by the States.
Receipt of refunds
Any low-income beneficiary who receives an energy refund pursuant to the procedures developed under this paragraph shall not be eligible for an energy refund otherwise provided by a State agency under this section.
Except as provided in subparagraph (B), the Secretary shall issue such regulations consistent with this section as the Secretary deems necessary or appropriate for the effective and efficient administration of the Energy Refund Program, and shall promulgate all such regulations in accordance with the procedures set forth in section 553 of title 5, United States Code.
Without regard to section 553 of title 5 of such Code, the Secretary may by rule promulgate as final, to be effective until not later than 2 years after the date of the enactment of the Tax Pollution, Not Profits Act, any procedures that are substantially the same as the procedures governing the Supplemental Nutrition Assistance Program in section 273.2, 273.12, or 273.15 of title 7, Code of Federal Regulations.
Notwithstanding paragraphs (2) and (3) of subsection (i), the Secretary shall promulgate regulations requiring streamlined eligibility determinations for some or all households which include individuals receiving medical assistance under a State plan approved under title XIX or XXI of this Act or individuals receiving premium credits for the purchase of qualified health insurance coverage pursuant to section 36B of the Internal Revenue Code of 1986. The regulations shall institute procedures whereby the gross income and family size information used for determining eligibility under such provisions serve as the basis for determining eligibility for the Energy Refund Program.
Notwithstanding any other provision of this section, the Secretary may authorize States to provide benefits under this section on a quarterly basis if the Secretary determines that the amount of the benefits that would be provided on a monthly basis to households is insufficient to be efficiently paid on a monthly basis in light of the administrative expenses of the Energy Refund Program.
For purposes of any administrative or judicial action or proceeding initiated by a household to a provision arising under this section, including any procedures established by a State agency under paragraph (3) or any regulations issued by the Secretary under paragraph (4), such action or proceeding shall be subject to the following conditions:
Limitation on recovery for wrongful or erroneous withholding of refunds
Any energy refunds that are determined to have been wrongfully or erroneously withheld from a household shall be restored for a period of not greater than 1 year prior to the date that the underlying action or proceeding was filed, or in the case of an action seeking review of a final State agency determination, not more than 1 year prior to the date of the filing of a request with the State for the restoration of such allotments or, in either case, not more than 1 year prior to the date the State agency is notified or otherwise discovers the possible loss to a household.
Any records maintained by a State agency under this section for the purpose of certification of applicant households, the issuance of energy refunds, or compliance with any requirements established by the Secretary shall be made available to a household to the extent necessary to carry out such action or proceeding and consistent with the privacy standards established under subsection (e)(2)(A).
For purposes of any such administrative or judicial action, all parties shall be required to comply with any substantive and procedural regulations established by the Secretary for the operation of the Energy Refund Program unless such regulations are not in accordance with law.
The value of the refund provided under this section shall not be considered income or resources for any purpose under any Federal, State, or local laws, including, but not limited to, laws relating to an income tax, or public assistance programs (including, but not limited to, health care, cash aid, child care, nutrition programs, and housing assistance) and no participating State or political subdivision thereof shall decrease any assistance otherwise provided an individual or individuals because of the receipt of a refund under this section.
For purposes of ensuring program integrity and complying with the requirements of the Improper Payment Information Act of 2002, the Secretary shall, to the maximum extent possible, rely on and coordinate with the quality control sample and review procedures of paragraphs (2), (3), (4), and (5) of section 16(c) of the Food and Nutrition Act of 2008 (7 U.S.C. 2025(c)).
Electronic benefit transfer system
The term electronic benefit transfer system means a system by which household benefits or refunds defined under subsection (e) are issued from and stored in a central databank via electronic benefit transfer cards.
The term gross income means the gross income of a household that is determined in accordance with standards and procedures established under section 5 of the Food and Nutrition Act of 2008 (7 U.S.C. 2014) and its implementing regulations.
The term household means—
in subparagraphs (A) and (B) of subsection (c)(1) of this section, except as provided in subparagraph (C) of this paragraph, an individual or a group of individuals who are a household under section 3(n) of the Food and Nutrition Act of 2008 (7 U.S.C. 2012(n));
in subsection (c)(1)(C) of this section, a single individual or married couple that receives benefits under section 1860D–14 of this Act (42 U.S.C. 1395w–114) and is not an institutionalized individual or couple (as defined in section 1902(q)(1)(B)); and
in subsection (c)(1)(D) of this section, a single individual or married couple that receives benefits under the supplemental security income program under title XVI of this Act (42 U.S.C. 1381–1383f) and is not an institutionalized individual or couple.
The Secretary shall establish rules for providing the energy refund in an equitable and administratively simple manner to households where the group of individuals who live together includes members not all of whom are described in a single clause of subparagraph (A), or includes additional members not described in any such clause.
The Secretary shall establish rules regarding the eligibility and delivery of the energy refund to groups of individuals described in section 3(n)(4) or (5) of the Food and Nutrition Act of 2008 (7 U.S.C. 2012(n)).
The term poverty line has the meaning given the term in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)), including any revision required by that section.
The term State means the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, American Samoa, the United States Virgin Islands, Guam, and the Commonwealth of the Northern Mariana Islands.
The term State agency means an agency of State government, including the local offices thereof, that has responsibility for administration of the 1 or more federally aided public assistance programs within the State, and in those States where such assistance programs are operated on a decentralized basis, the term shall include the counterpart local agencies administering such programs.
Other terms not defined in this title shall have the same meaning applied in the Supplemental Nutrition Assistance Program authorized by the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.) unless the Secretary finds for good cause that application of a particular definition would be detrimental to the purposes of the Energy Refund Program.
State Opt In
The Secretary shall carry out the requirements specified by this section for a State or State agency unless the State or State agency elects to carry out such requirements.
Section 1324(b)(2) of title 31, United States Code, is amended by inserting the following before the period at the end:
, or under section 2201(d)(4)(B)(ii) of the Social Security Act.
Assistance to displaced workers in the coal industry
For a period of 10 years after the enactment of the Tax Pollution, Not Profit Act, up to 2 percent of the revenues generated under this Act may be used by the Secretary of Labor to implement a program to assist workers in the coal industry that may be displaced as a result of the enactment of this Act. This assistance can take the form of the following:
Relocation expenses for those who move to find new employment.
Other assistance that the Secretary determines appropriate.
Reduction in corporate tax rate
Section 11(b)(1) of the Internal Revenue Code of 1986 is amended—
by striking subparagraphs (C) and (D), by inserting
and at the end of subparagraph (B), and by inserting after subparagraph (B) the following:
applicable percentage of so much of the taxable income as exceeds $75,000.
$11,750 and inserting
applicable dollar amount, and
by striking the last sentence.
Applicable percentage; applicable dollar amount
Section 11 of such Code is amended by adding at the end the following:
For purposes of this section—
The term applicable percentage means—
32 percent in the case of taxable years beginning in 2018,
31 percent in the case of taxable years beginning in 2019,
30 percent in the case of taxable years beginning in 2020,
29 percent in the case of taxable years beginning in 2021, and
28 percent in the case of taxable years beginning after 2021.
Applicable dollar amount
The term applicable dollar amount means—
$6,750 in the case of taxable years beginning in 2018,
$5,500 in the case of taxable years beginning in 2019,
$5,000 in the case of taxable years beginning in 2020,
$4,500 in the case of taxable years beginning in 2021, and
$4,000 in the case of taxable years beginning after 2021.
Section 11(b)(2) of such Code is amended by striking
35 percent and inserting
the applicable percentage.
Section 1201(a) of such Code is amended—
35 percent both places it appears and inserting
the applicable percentage, and
2 sentences and inserting
Section 1445(e) of such Code is amended by striking
35 percent each places it occurs and inserting
the applicable percentage.
Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years beginning after December 31, 2017.
The amendments made by subsection (b)(4) shall apply to distributions made after December 31, 2017.
Public disclosure of revenues and expenditures
Establishment of website
The Secretary of the Treasury, or the Secretary's designee, shall establish a website for purposes of making the disclosures described in subsection (b).
The Secretary shall make publicly available, on an ongoing basis and as frequently as possible, information regarding the amount and sources of revenue attributable to this Act and the amendments made by this Act.