Sec. 3. Carbon fee
3,622 words·~16 min read·
/bill/116/s/2284/is/section-3A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Chapter 38 of subtitle D of the Internal Revenue Code of 1986 is amended by adding at the end the following new subchapter: Sec. 4691. Definitions. Sec. 4692. Carbon fee. Sec. 4693. Emissions reduction schedule. Sec. 4694. Fee on fluorinated greenhouse gases. Sec. 4695. Carbon capture refunds. Sec. 4696. Carbon border fee adjustment. Sec. 4697. Administration of the carbon border fee adjustment. Sec. 4698. Allocation of carbon border fee adjustment revenues. For purposes of this subchapter— The term Administrator means the Administrator of the Environmental Protection Agency. 2 -e The term carbon dioxide equivalent or CO means the number of metric tons of carbon dioxide emissions with the same global warming potential as one metric ton of another greenhouse gas. 2 -e The term carbon-intensive 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 manufactured product which the Secretary, in consultation with the Administrator, determines is energy-intensive and trade-exposed (with the exception of any covered fuel).
The term covered entity means— in the case of crude oil— any operator of a United States refinery (as described in subsection (d)(1) of section 4611), and any person entering such product into the United States for consumption, use, or warehousing (as described in subsection (d)(2) of such section), in the case of coal— any producer subject to the tax under section 4121, and any importer of coal into the United States, in the case of natural gas— any entity which produces natural gas (as defined in section 613A(e)(2)) from a well located in the United States, and any importer of natural gas into the United States, in the case of fluorinated gases, any entity required to report the emission of a fluorinated gas under part 98 of title 40, Code of Federal Regulations, in the case of solid biomass, any entity which operates a facility that combusts such solid biomass in a manner which emits a greenhouse gas into the atmosphere, and any entity or class of entities which, as determined by the Secretary, is transporting, selling, or otherwise using a covered fuel in a manner which emits a greenhouse gas into the atmosphere and which has not been covered by the carbon fee, the fluorinated greenhouse gas fee, or the carbon border fee adjustment.
The term covered fuel means crude oil, natural gas, coal, solid biomass, or any other product derived from crude oil, natural gas, or coal which shall be used so as to emit greenhouse gases to the atmosphere. The term full fuel cycle greenhouse gas emissions means the greenhouse gas content of a covered fuel (excluding solid biomass) plus that covered fuel’s upstream greenhouse gas emissions. The term greenhouse gas has the same meaning given such term under paragraph
(3)of section 901 of the Energy Independence and Security Act of 2007 ( 42 U.S.C. 17321 ), and shall include any other gases as identified by rule of the Administrator. The term greenhouse gas content means the amount of greenhouse gases, expressed in metric tons of CO 2 -e, which would be emitted to the atmosphere by the use of a covered fuel. The term solid biomass means nonfossilized and biodegradable organic material originating from plants, animals or microorganisms, including products, byproducts, residues and waste from agriculture, forestry and related industries as well as the nonfossilized and biodegradable organic fractions of industrial and municipal wastes, but does not include gases and liquids recovered from the decomposition of nonfossilized and biodegradable organic material. The term United States shall be treated as including each possession of the United States (including the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands). There is hereby imposed a carbon fee on any covered entity’s use, sale, or transfer of any covered fuel. The carbon fee imposed by this section is an amount equal to— the greenhouse gas content of the covered fuel, multiplied by the carbon fee rate. For purposes of this section— The carbon fee rate, with respect to any use, sale, or transfer during a calendar year, shall be— in the case of calendar year 2020, $15, and except as provided in paragraph (2), in the case of any calendar year thereafter, the carbon fee rate in effect under this subsection for the preceding calendar year, plus $15. In the case of any year immediately following a year for which the Secretary determines under 4693(b) that the emissions of greenhouse gases from covered fuels exceeded the emissions reduction target for the previous year, paragraph (1)(B) shall be applied by substituting $30 for $15 . In the case of any year immediately following a year for which the Secretary determines under 4693(b) that emissions of greenhouse gases from covered fuels are not more than 10 percent of the greenhouse gas emissions from covered fuels during the year 2017, paragraph (1)(B) shall be applied by substituting $0 for $15 . For purposes of subsection (b), in the case of a covered fuel which consists of solid biomass, the greenhouse gas content of such covered fuel shall be determined by the Administrator based on the lifecycle greenhouse gas emissions of such fuel, as defined in section 211(o)(1)(H) of the Clean Air Act ( 42 U.S.C. 7545(o)(1)(H) ). The Secretary shall prescribe such rules as are necessary to ensure the carbon fee imposed by this section is not imposed with respect to any nonemitting use, or any sale or transfer for a nonemitting use, including rules providing for the refund of any carbon fee paid under this section with respect to any such use, sale, or transfer. The Secretary, in consultation with the Administrator, shall prescribe such regulations, and other guidance, to assess and collect the carbon fee imposed by this section, including— requirements for the quarterly payment of such fees, and rules to ensure that no covered fuel has the carbon fee or the carbon border fee adjustment imposed upon it more than once. An emissions reduction schedule for greenhouse gas emissions from covered fuels is hereby established, as follows: Subject to subparagraph (B), the greenhouse gas emissions from covered fuels during the year 2017 shall be the reference amount of emissions and shall be determined from the Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2017 published by the Environmental Protection Agency in April of 2019. If the greenhouse gas emissions from covered fuels during the year 2017 is revised by the Administrator in a subsequent report, the amount of such emissions contained in such report shall apply for purposes of this section. The emissions reduction target for each calendar year during the period of calendar years 2020 through 2030 shall be determined as follows: Year Emissions Reduction Target 2017 Reference year 2020 90 percent of 2017 emissions 2021 81 percent of 2017 emissions 2022 74 percent of 2017 emissions 2023 68 percent of 2017 emissions 2024 63 percent of 2017 emissions 2025 59 percent of 2017 emissions 2026 56 percent of 2017 emissions 2027 52 percent of 2017 emissions 2028 50 percent of 2017 emissions 2029 47 percent of 2017 emissions 2030 45 percent of 2017 emissions The emissions reduction target for each calendar year during the period of calendar years 2031 through 2050 shall be equal to the emissions reduction target for the preceding year reduced by an amount equal to 2.25 percent of 2017 emissions. Not later than 90 days after the beginning of each calendar year beginning after the date of the enactment of this section, the Secretary, in consultation with the Administrator, shall determine whether emissions of greenhouse gases from covered fuels exceeded the emissions reduction target for the preceding calendar year. The Secretary shall make such determination using the same greenhouse gas accounting method as was used to determine the greenhouse gas emissions in the Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2017 published by the Environmental Protection Agency in April of 2019. A fee is hereby imposed upon any fluorinated greenhouse gas which is required to be reported under part 98 of title 40, Code of Federal Regulations. The fee to be paid by the covered entity required to so report shall be an amount equal to— the total amount, in metric tons of CO 2 -e, of emitted fluorinated greenhouse gases (or, in the case of a supplier, emissions that would result determined under the rules of such part), multiplied by an amount equal to 20 percent of the carbon fee rate in effect under section 4692(c)(1) for the calendar year of such emission. The Secretary, in consultation with the Administrator, shall prescribe such regulations, and other guidance, to assess and collect the carbon fee imposed by this section, including— requirements for the quarterly payment of such fees, and rules to ensure that no covered fuel has the carbon fee or the carbon border fee adjustment imposed upon it more than once. The Secretary, in consultation with the Administrator and the heads of other relevant Federal agencies, shall prescribe regulations for providing payments to any person which captures qualified carbon oxide (as defined in subsection
(c)of section 45Q) which is— disposed of by such person in secure geological storage, as described in subsection (f)(2) of such section, used by such person as a tertiary injectant in a qualified enhanced oil or natural gas recovery project (as defined in subsection (e)(2) of such section) and disposed of by such person in secure geological storage, or utilized by such person in a manner described in subsection (f)(5) of such section. In the case of any industrial facility for which carbon capture equipment has been placed in service, the Secretary shall make payments to the owner of such facility in the same manner as if such payment was a refund of an overpayment of the carbon fee imposed by section 4692. The payment determined under this subsection shall be an amount equal to— the metric tons of qualified carbon oxide captured and disposed of, used, or utilized in a manner consistent with subsection (a), multiplied by the carbon fee rate during the year in which the carbon fee was imposed by section 4692 upon the covered fuel to which such carbon oxide relates. At such time that the Secretary prescribes regulations implementing this section, no payment under this section shall be allowed to any person for any unit of carbon oxide for which a credit has been allowed with respect to such unit under section 45Q. In the case of any industrial facility which is owned by an entity that is determined to be in violation of any applicable air quality regulations, such facility shall not be eligible for any payment under this section during the period of such violation. The fees imposed by, and refunds allowed under, this section shall be referred to as the carbon border fee adjustment . In the case of any person that imports into the United States any covered fuel, there shall be imposed a fee equal to the excess (if any) of— an amount equal to— the amount of full fuel cycle greenhouse gas emissions of such fuel, multiplied by the carbon fee rate in effect for the year in which such fuel is imported, over the total foreign cost of carbon carried by such fuel. In the case of any person that imports into the United States any carbon-intensive products, there shall be imposed a fee equal to the excess (if any) of— an amount equal to— production greenhouse gas emissions of such product, multiplied by the carbon fee rate in effect for the year in which the production greenhouse gas emissions of such product were emitted into the atmosphere, over the total foreign cost of carbon carried by such product. Under regulations prescribed by the Secretary, there shall be allowed a credit or refund (without interest) to exporters of carbon-intensive products manufactured or produced in the United States an amount equal to the excess (if any) of— an amount equal to— the production greenhouse gas emissions of the exported carbon-intensive product, multiplied by the carbon fee rate during the year in which the carbon fee or fluorinated greenhouse gas fee was paid upon the production greenhouse gas emissions of the exported carbon-intensive product, over any total cost of carbon to be levied upon the carbon-intensive product by any jurisdiction to which the carbon-intensive product is to be imported. Any such credit or refund shall be allowed in the same manner as if it were an overpayment of the fee imposed by section 4692 or 4694. The Secretary shall establish fair, timely, impartial, and as necessary confidential procedures by which any exporter of any product from the United States may petition the Secretary to include that exported product on the list of carbon-intensive products. Under regulations prescribed by the Secretary, in the case of a covered fuel produced in the United States with respect to which the fee under section 4692 was paid, there shall be allowed as a credit or refund (without interest) to any exporter of such covered fuels an amount equal to the excess (if any) of— an amount equal to— the full fuel cycle greenhouse gas emissions of the covered fuel, multiplied by the carbon fee rate at the time the carbon fee was paid upon the full fuel cycle greenhouse gas emissions of the exported covered fuel, over any total cost of carbon to be levied upon the covered fuel by a jurisdiction to which the carbon-intensive product is to be imported. Any such credit or refund shall be allowed in the same manner as if it were an overpayment of tax imposed by section 4692. For purposes of this section and section 4697— The term foreign cost of carbon or foreign carbon cost means the cost of any laws of a foreign jurisdiction which impose a system of cap-and-trade with respect to, or a tax or fee on, greenhouse gas. Such cost shall be determined and expressed as a price per ton of CO 2 -e. The term production greenhouse gas emissions means the quantity of greenhouse gases, expressed in metric tons of CO 2 -e, emitted to the atmosphere resulting from, nonexclusively, the production, manufacture, assembly, transportation, or financing of a product. The term total cost of carbon carried means an amount equal to— the production greenhouse gas emissions of a carbon-intensive product or the full fuel cycle greenhouse gas emissions of a covered fuel, multiplied by the cost of carbon with respect to such product or fuel, reduced by any amount refunded with respect to such product or fuel by a foreign jurisdiction. The total cost of carbon carried shall be expressed as price in United States dollars. The term total foreign cost of carbon carried means an amount equal to— the production greenhouse gas emissions of a carbon-intensive product, or the full fuel cycle greenhouse gas emissions of a covered fuel, multiplied by the foreign cost of carbon with respect to such product or fuel, reduced by the amount refunded with respect to such product or fuel by a foreign jurisdiction. The total foreign cost of carbon carried shall be expressed as price in United States dollars. The term upstream greenhouse gas emissions means the quantity of greenhouse gases, expressed in metric tons of CO 2 -e, emitted to the atmosphere resulting from, nonexclusively, the extraction, processing, transportation, financing, or other preparation of a covered fuel for use. The Secretary, in consultation with the Administrator, shall prescribe regulations and guidance which implement the carbon border fee adjustment under section 4696. In determining the production greenhouse gas emissions of an imported carbon-intensive product, the upstream greenhouse gas emissions of an imported covered fuel, the full fuel cycle greenhouse gas emissions of an imported covered fuel, or the foreign cost of carbon, or otherwise administering the carbon border fee adjustment, it is the sense of Congress that the Secretary should collaborate with authorized officers of any jurisdiction, including sub-national governments, affected by the carbon border fee adjustment. In determining the production greenhouse gas emissions of an imported carbon-intensive product, the upstream greenhouse gas emissions of an imported covered fuel, the full fuel cycle greenhouse gas emissions of an imported covered fuel, or the foreign cost of carbon, the Secretary shall use reliable methodologies, which— as may be necessary or convenient— distinguish between different types of covered fuels, distinguish between a covered fuel’s greenhouse gas content and that covered fuel’s upstream greenhouse gas emissions, distinguish between the different types of greenhouse gas emissions which compose a covered fuel’s upstream greenhouse gas emissions or greenhouse gas content, as well as the various processes which produced those emissions, and distinguish between the different types of greenhouse gas emissions which compose a carbon-intensive product’s production greenhouse gas emissions, as well as the various processes which produced those emissions, ensure that no covered fuel, covered fluorinated greenhouse gas, or carbon-intensive product has the carbon fee, the fluorinated greenhouse gas fee, or the border fee adjustment imposed upon it more than once, ensure that the implementation of the border carbon adjustment aligns with the carbon fee and the fluorinated gas fee, in the case of incomplete data, rely upon the best available methodologies for interpolating data gaps, and are consistent with international treaties and agreements. The Secretary shall establish fair, timely, impartial, and as necessary confidential procedures by which the importer of any carbon-intensive product or any covered fuel may petition the Secretary to revise the Secretary’s determination of the production greenhouse gas emissions, full fuel cycle greenhouse gas emissions, or upstream greenhouse gas emissions of that importer’s imported covered fuel or imported carbon-intensive product, or the foreign cost of carbon carried by that importer’s imported carbon-intensive product. The revenues collected under section 4696 may be used to supplement appropriations made available in fiscal years 2020 and thereafter— to U.S. Customs and Border Protection, in such amounts as are necessary to administer the carbon border fee adjustment, from the amounts remaining following payment of the expenses described in paragraph (1), to the Department of Treasury, in such amounts as are necessary to allow refunds under section 4696(e) to exporters of carbon-intensive products and exporters of covered fuels, and from the amounts remaining following payment of the expenses described in paragraphs
(1)and (2)— to the Department of State and the United States Agency for International Development for programs to address climate mitigation and adaptation in developing countries, including contributions to the Green Climate Fund, and to the Export-Import Bank of the United States to facilitate exportation of clean energy technologies . The Secretary of Agriculture, in consultation with the Administrator of the Environmental Protection Agency, shall provide payments to farmers and landowners within the United States to implement carbon sequestration projects with measurable greenhouse gas reduction benefits or other nature-based projects that reduce greenhouse gas emissions, including projects for— ecologically-appropriate reforestation, restoration of wetlands, agricultural practices such as the usage of cover crops, no till, and practices that can reduce emissions from livestock, fertilizers, and rice cultivation, and other appropriate practices as determined by the Secretary of Agriculture. Not later than 180 days after the date of enactment of this Act, the Secretary of Agriculture, in consultation with the Administrator of the Environmental Protection Agency, shall issue regulations to determine the amount of a payment under paragraph (1), taking into account the use of certified third-party registries for verification of emissions reductions and provisions for addressing the potential impermanence of carbon sequestration in biomass and soils. Subject to paragraph (3), the Secretary of Energy, in consultation with the Administrator of the Environmental Protection Agency and the heads of any other relevant agencies, shall make payments to any direct air capture facility (as defined in section 45Q(e)(1) of the Internal Revenue Code of 1986) within the United States that uses carbon capture equipment to capture carbon dioxide directly from the ambient air and disposes of such carbon dioxide in secure geological storage (as described in section 45Q(f)(2) of such Code). A payment under paragraph
(1)shall be in an amount equal to the product obtained by multiplying— the metric tons of carbon dioxide captured and disposed of by the facility; and the carbon fee rate in effect during the calendar year preceding the year in which the capture of such carbon dioxide occurs. In the case of any direct air capture facility which is owned by an entity that is determined to be in violation of any applicable air quality regulations, such facility shall not be eligible for any payment under this section during the period of such violation. The Secretary of Energy shall not make a payment under this subsection with respect to any facility for any unit of carbon dioxide for which a credit has been allowed with respect to such unit under section 45Q of the Internal Revenue Code of 1986. Section 45Q(f) is amended by adding at the end the following new paragraph: No credit shall be allowed under this section with respect to any unit of carbon oxide which has received any refund or payment with respect to such unit under section 3(c) of the Climate Action Rebate Act of 2019 or section 4695. . The Congress finds the international mitigation of greenhouse gas emissions to be of national importance. Therefore, the Congress encourages the Secretary of State, or the Secretary’s designee, to commence and complete negotiations with other nations with the goal of forming treaties, environmental agreements, accords, partnerships, or any other instrument that effectively reduces global greenhouse gas emissions to 10 percent of 2017 levels by 2050 and which respect the principle of common but differentiated responsibilities and respective capabilities.
Connectionstraces to 2
Traces to 2 documents
Citation graph
cites case law
Cites 2Cited by 0 across 0 sources