Sec. 2. Tax on carbon dioxide content of certain substances

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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: Sec. 4691. Imposition of tax. Sec. 4692. Refunds or credits. Sec. 4693. Border adjustments. Sec. 4694. Definitions and special rules. There is hereby imposed a tax on any taxable carbon substance sold by the manufacturer, producer, or importer thereof. The amount of tax imposed by subsection

(a)on any taxable carbon substance shall be the applicable amount per ton of carbon dioxide content of such substance, as determined by the Secretary in consultation with the Secretary of Energy. 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. For purposes of paragraph (1), the term applicable amount means $52. In the case of any taxable year beginning in a calendar year after 2020, the dollar amount in subparagraph

(A)shall be increased by an amount equal to— such dollar amount, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined— by substituting calendar year 2019 for calendar year 2016 in subparagraph (A)(ii) thereof, and by substituting for the C–CPI–U referred to section 1(f)(3)(A)(i) the amount that such C–CPI–U would have been if the annual percentage increase in C–CPI–U with respect to each year after 2020 had been 6 percentage points greater. No tax shall be imposed by subsection

(a)with respect to a taxable carbon substance if the person who would be liable for such tax establishes that a prior tax imposed by such section has been imposed with respect to such product. No tax shall be imposed under subsection

(a)on the sale by the manufacturer or producer of any taxable carbon substance for export or for resale by the purchaser to a second purchaser for export. Rules similar to the rules of section 4221(b) shall apply for purposes of subparagraph (A). Except as provided in subparagraph (B), if— tax under subsection

(a)was paid with respect to any taxable carbon substance, and such substance was exported by any person, or such substance was used as a material in the manufacture or production of a taxable carbon substance which was exported by any person and which, at the time of export, was a taxable carbon substance, credit or refund (without interest) of such tax shall be allowed or made to the person who paid such tax. 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 carbon substance, or has obtained the written consent of such exporter to the allowance of the credit or the making of the refund. 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 carbon substance, where— the person who paid the tax waives his claim to the amount of such credit or refund, and the person exporting the taxable carbon substance provides such information as the Secretary may require in such regulations. Under regulations prescribed by the Secretary, if— a person uses a taxable carbon substance as a feedstock so that the carbon associated with such substance will not be emitted, or a person captures and sequesters the carbon in a taxable carbon substance, then an amount equal to the amount of tax in effect under section 4691(b) with respect to such substance for the calendar year in which such use begins shall be allowed as a credit or refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by section 4691. Under regulations prescribed by the Secretary, if— a tax under section 4691 was paid with respect to any taxable carbon substance, and such substance was used by any person in the manufacture or production of any other substance which is a taxable carbon substance, then an amount equal to the tax so paid shall be allowed as a credit or refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by section 4691(a). In any case to which this paragraph applies, the amount of any such credit or refund shall not exceed the amount of tax imposed by section 4691(a) on the other taxable fuel manufactured or produced (or which would have been imposed by such subsection on such other fuel but for section 4691(c)). The Secretary shall impose a carbon 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— taxes paid by manufacturers, producers, and importers of taxable carbon substances under this section, and carbon equivalency fees paid by importers of carbon intensive goods used in the production of the comparable carbon intensive goods in question. Notwithstanding the limitations of section 4692, the Secretary shall allow as a credit or refund (without interest) to the exporter of a carbon-intensive good produced in the United States in the same manner as if it were an overpayment of tax imposed by section 4691 an amount equivalent to the cost that domestic producers of such carbon intensive goods incur as a result of— taxes paid by manufacturers, producers, and importers of taxable carbon substances under this section, and carbon equivalency fees paid by importers of carbon intensive goods used in the production of the comparable carbon intensive goods in question. This section shall cease to have effect at such time as and to the extent that— an international agreement requiring countries that emit greenhouse gases and produce carbon intensive goods for international markets to adopt equivalent measures comes into effect, or the country of export has implemented equivalent measures, and the actions provided for by subsections

(a)and

(b)are no longer appropriate. For purposes of this subchapter— The term taxable carbon substance means— coal (including lignite and peat), petroleum and any petroleum product (as defined in section 4612(a)(3)), and natural gas, which is extracted, manufactured, or produced in the United States or entered into the United States for consumption, use, or warehousing. The term United States has the meaning given such term by section 4612(a)(4). The term importer means the person entering the taxable carbon substance for consumption, use, or warehousing. The term ton means metric tons. In the case of any taxable carbon substance which is a gas, the term ton means the amount of such gas in cubic feet which is the equivalent of a metric ton on a molecular weight basis. The term carbon-intensive good means a good that (as identified by the Secretary by rule)— is a primary product, or is a manufactured item in which one or more primary products are inputs and the cost of production of which in the United States is significantly increased by this subchapter. The term primary product means— iron, steel, steel mill products (including pipe and tube), aluminum, cement, glass (including flat, container, and specialty glass and fiberglass), pulp, paper, chemicals, or industrial ceramics, and any other manufactured product that the Secretary determines— is sold for purposes of further manufacture, and generates, in the course of the manufacture of the product, direct and indirect carbon-dioxide emissions that are comparable (on an emissions-per-dollar of output basis) to emissions generated in the manufacture or production of primary products identified in subparagraph (A). The term equivalent measure means a tax or other regulatory requirement that imposes a cost on manufacturers of carbon intensive goods located outside the United States approximately equal to the cost imposed by section 4691 on manufacturers of comparable carbon intensive goods located in the United States. If any person manufactures, produces, or imports any taxable carbon substance and uses such substance, then such person shall be liable for tax under section 4691 in the same manner as if such substance were sold by such person. Except as provided in this paragraph, in any case in which a manufacturer, producer, or importer of a taxable carbon substance exchanges such substance 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 section 4691, be treated as the manufacturer, producer, or importer of such substance. Paragraph

(1)shall not apply to any inventory exchange unless— both parties are registered with the Secretary as manufacturers, producers, or importers of taxable carbon substances, and the person receiving the taxable carbon substance 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 subsection, 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). The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subchapter. . Subchapter A of chapter 98 of such Code (relating to trust fund code) is amended by adding at the end the following: There is established in the Treasury of the United States a trust fund to be known as the Build America 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). There is hereby appropriated to the Trust Fund an amount equivalent to the increase in revenues received in the Treasury as the result of the tax imposed under section 4691. Amounts in the Trust Fund equivalent to the taxes received in the Treasury under section 4691 for a calendar year shall be available without further appropriation, as follows: First, the following amounts for each of fiscal years 2020 through 2029, to be allocated as follows: the sum of $61,000,000,000 plus the highway and transit shortfall amount, which shall be transferred to the Highway Trust Fund with 80 percent allocated to the Highway Account (as defined in section 9503(e)(5)(B)) and 20 percent allocated to the Mass Transit Account. $6,400,000,000 shall be available to the Secretary of Transportation for providing assistance under the National Infrastructure Investment program, as described under the heading Department of Transportation—Office of the Secretary—National Infrastructure Investments in title I of division L of Public Law 114–113 (129 Stat. 2835). $4,000,000,000 shall be available to be transferred to the Airport and Airway Trust Fund, of which— $2,160,000,000 shall be available to the Secretary of Transportation for making grants for airport planning and airport development under section 47104 of title 49, United States Code, and $1,840,000,000 shall be available to the Administrator of the Federal Aviation Administration for acquiring, establishing, and improving air navigation facilities under section 44502(a)(1)(A) of title 49, United States Code. $2,600,000,000 shall be available to the Secretary of Transportation for deposit in the Northeast Corridor account described in section 24317 of title 49, United States Code, for the uses described in subsection (d)(1) (B), (C), (E), and

(F)of such section. $2,000,000,000 shall be available to the Secretary of Transportation for making grants for rail infrastructure and safety improvements under section 24407 of title 49, United States Code. $700,000,000 shall be available to the Secretary of Transportation for making grants for state of good repair under section 24911 of title 49, United States Code. $1,300,000,000 shall be available to the Secretary of Transportation for deposit in the National Network account described in section 24317 of title 49, United States Code, for the uses described in subsection (d)(2)(B). $4,000,000,000 shall be available to the Secretary of the Army for expenses necessary for the construction of river and harbor, flood and storm damage reduction, shore protection, aquatic ecosystem restoration, and related projects authorized by law or for conducting detailed studies, and plans and specifications, of such projects (including those involving participation by States, local governments, or private groups) authorized or made eligible for selection by law (but such detailed studies, and plans and specifications, shall not constitute a commitment of the Federal Government to construction) to remain available until expended. 4,000,000,000 shall be available to the Secretary of the Army for expenses necessary for the operation, maintenance, and care of existing river and harbor, flood and storm damage reduction, aquatic ecosystem restoration, and related projects authorized by law; providing security for infrastructure owned or operated by the Corps, including administrative buildings and laboratories; maintaining harbor channels provided by a State, municipality, or other public agency that serve essential navigation needs of general commerce, where authorized by law; surveying and charting northern and northwestern lakes and connecting waters; clearing and straightening channels; and removing obstructions to navigation, to remain available until expended. $3,000,000,000 shall be available to the Administrator of the Environmental Protection Agency for making capitalization grants for the Clean Water State Revolving Funds under title VI of the Federal Water Pollution Control Act ( 33 U.S.C. 1381 et seq.). $3,000,000,000 shall be available to the Administrator of the Environmental Protection Agency for making capitalization grants for the Drinking Water State Revolving Funds under section 1452 of the Safe Drinking Water Act ( 42 U.S.C. 300j–12 ). $1,000,000,000 shall be available to the Secretary of the Army and the Administrator of the Environmental Protection Agency for providing assistance under section 5023 of the Water Infrastructure Finance and Innovation Act of 2014 ( 33 U.S.C. 3902 ). $150,000,000 shall be available to the Secretary of Agriculture for direct loans for water or waste disposal facilities under section 306(a)(1) of the Consolidated Farm and Rural Development Act. $700,000 shall be available to the Secretary of Agriculture for guaranteed loans for water or waste disposal facilities under section 306(a)(24) of the Consolidated Farm and Rural Development Act. $1,200,000,000 shall be available to the Secretary of Agriculture to carry out section 306(a)(2) of the Consolidated Farm and Rural Development Act. $4,000,000,000 shall be available to the Assistant Secretary of Commerce for Communications and Information to carry out a program to expand access to broadband to communities throughout the United States, with an emphasis on communities unserved by broadband. $3,000,000,000 shall be available to the Assistant Secretary for Elementary and Secondary Education to carry out a program to support elementary and secondary educational infrastructure throughout the United States with an emphasis on communities in most need and communities impacted by climate change. $750,000,000 shall be available to the National Institutes of Health for research related to the health consequences of climate change. $750,000,000 shall be available to the Secretary of Health and Human Services to carry out activities to support the resiliency of the nation’s healthcare infrastructure against the impacts of climate change. $2,000,000,000 shall be available to the Public Housing Capital Fund. ) $1,700,000,000 shall be available for the EERE Renewable Power and Sustainable Transportation Offices. $1,500,000,000 shall be available for EERE Energy Efficiency. $700,000,000 shall be available to Fossil Energy Research and Development Coal CCS and Power Systems only for activities that decrease the amount of carbon pollutants released into the atmosphere. $500,000,000 for the ARPA–E office. $1,500,000,000 shall be available to the Department of Agriculture for climate change research and mitigation, and related activities. Second, $7,000,000,000 for each fiscal year 2020 through 2029 shall be available for assistance to workers and communities reliant on industries that primarily produce taxable carbon substances or carbon-intensive goods, individuals and communities disproportionally impacted by climate change and greenhouse gas pollutants as well as groups underrepresented in the energy sector, including religious and ethnic minorities, women, veterans, individuals with disabilities and socioeconomically disadvantaged individuals, as determined by the Secretary in consultation with the Secretary of Labor, including for— workforce development (with a special focus on energy-related industries, including manufacturing, engineering, construction, and retrofitting jobs in energy-related industries), pension benefits, and health benefits, abandoned mine reclamation, and other assistance the Secretary determines appropriate. Third, for calendar year 2020 and each calendar year thereafter, 12.5 percent of the amount in the Trust Fund equivalent to the taxes received in the Treasury under section 4691 shall be available for the Energy Refund Program. Fourth, the amount remaining after the application of paragraphs (1), (2), and

(3)shall be available for paying the consumer tax rebate. For purposes of this section— The term highway and transit shortfall amount means the amount determined by the Secretary to be equal to the excess of— the sum of the obligations of the United States specified in section 9503(c)(1) plus the amounts to be expended under section 9503(e)(3), over the amounts available in the Highway Trust Fund to meet those obligations and expenditures (determined without regard to this paragraph or section 9503(f)(5)). The terms taxable carbon substance and carbon-intensive goods have the meanings given such terms by section 4694. Subject to paragraph (2), as a condition on the receipt of funds pursuant to this section of an amount greater than $1,000,000, a non-Federal sponsor that receives the funds shall require that each contract and subcontract for program management, construction management, planning studies, feasibility studies, architectural services, preliminary engineering, design, engineering, surveying, mapping, and related services entered into using any of such funds be awarded in the same manner as a contract for architectural and engineering services is awarded under— chapter 11 of title 40, United States Code, or an equivalent qualifications-based requirement prescribed by the relevant State. A contract awarded in accordance with paragraph

(1)shall not be considered to confer a proprietary interest upon the United States. Funds made available under this section shall be used after giving due consideration to the health, climate, land usage (including use of eminent domain and land which is significant to native communities), and economic impacts of such use and to any disproportionately harmful impacts on former carbon intensive communities, indigenous peoples, communities of color, migrant communities, deindustrialized communities, depopulated rural communities, the poor, low-income workers, women, the elderly, the unhoused, people with disabilities, and youth. Amounts distributed from the Trust Fund for a program or activity under subsection

(c)shall— be in addition to other amounts appropriated for the program or activity, and remain available until expended. . The table of subchapters for chapter 38 of such Code is amended by adding at the end thereof the following new item: Subchapter E. Tax on Carbon Dioxide Content of Certain Substances . The table of sections for subchapter A of chapter 98 of such Code is amended by adding at the end the following: Sec. 9512. Build America Trust Fund. . The amendments made by this section shall apply to taxable years beginning after December 31, 2019.

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