Managed Carbon Price Act of 2015
Amends the Internal Revenue Code to require U.S. coal producers, oil refinery operators, first sellers of natural gas, and producers of other greenhouse gas [GHG] emission substances and importers of any GHG emission substance (covered persons) to purchase a federal emission permit from the Department of the Treasury for the sale, combustion, or other use of a GHG emission substance. Exempts from such requirement a GHG emission substance to be used for noncombustion agricultural purposes or for which a permit has been previously purchased.
Requires Treasury to impose a GHG emission permit equivalency fee on imports of carbon intensive goods.
Requires federal emission permits to be: (1) denominated in one-quarter carbon dioxide equivalents, and (2) purchased within 14 calendar days before or after a GHG emission substance is produced or entered into the United States.
Requires Treasury to: (1) establish a price for obtaining a permit for a year based on a determination of the dollar amount necessary to meet specified emissions reductions targets; (2) publish a five-year price schedule for permits by January 1, 2016, for each of the five years from 2017 to 2021; and (3) publish a 10-year schedule of the minimum and maximum prices for permits by January 1, 2023, and every 10 years thereafter. Establishes minimum and maximum permit prices. Authorizes Treasury to reduce permit prices if target reductions are being exceeded and to increase such prices if target reductions are not being met.
Establishes emission reduction targets for 2016 through 2060 decreasing from 90% to 20% of the carbon dioxide equivalents emitted in the United States in 2005.
Requires Treasury to report annually on: (1) the extent to which such limitations are being achieved, (2) GHG emission permits sold and their impact on GHG emissions, and (3) worldwide GHG emissions in relation to 2005 emissions.
Defines a "carbon dioxide equivalent" as the quantity of a GHG emission substance that makes the same contribution to global warming as one metric ton of carbon dioxide. Requires the Environmental Protection Agency to publish and update a schedule listing such quantity for each GHG emission substance.
Requires: (1) repayment of permit fees to specified permittees that use GHG emission substances in a manner that will make a negligible or no contribution to global warming, and (2) payment of the permit equivalency fees to exporters of carbon-intensive goods.
Imposes a tax on covered persons who fail to obtain a federal emission permit.
Establishes the Energy and Economic Security Trust Fund to pay monthly dividends to taxpayers from permit sales revenues.
[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 972 Introduced in House (IH)]
114th CONGRESS
1st Session
H. R. 972
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
covered substances and to return funds to the American people.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 13, 2015
Mr. McDermott 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
covered substances and to return funds to the American people.
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 ``Managed Carbon Price Act of 2015''.
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. Information reporting requirements.
``Sec. 9905. 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 natural gas, the first seller of such
natural gas,
``(4) in the case of any greenhouse gas emission substance
not described in paragraph (1), (2), or (3) produced in the
United States, the producer of such substance, and
``(5) 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 section 6433(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 section 6433(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
one-quarter carbon dioxide equivalents.
``(2) A Federal emission permit may only be purchased
within fourteen calendar days before or after a greenhouse gas
emission substance is produced or entered into the United
States, as the case may be.
``(3) Except as provided in subsection (a), a Federal
emission permit may not be sold, exchanged, or otherwise
transferred.
``(c) Permit Price.--
``(1) Initial price.--The price for obtaining a Federal
emission permit for emissions in 2016 is $12.50.
``(2) Subsequent prices.--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 meet the
emissions reductions targets specified in subsection (d).
``(3) 5-year price schedule.--
``(A) In general.--Not later than January 1, 2016,
the Secretary shall publish a schedule of the prices
determined under paragraph (2) for obtaining a Federal
emission permit during each of the five years from 2017
to 2021. The Secretary shall publish the price for
obtaining a Federal emission permit in each year after
2020 no later than five years before January 1 of the
applicable year.
``(B) Reduction in price if target reductions being
exceeded.--If the Secretary determines--
``(i) that greenhouse gas emissions are
being reduced at a rate that exceeds the
reduction expected in national greenhouse gas
emissions for the year, and
``(ii) that the Federal permit price can be
reduced while still attaining the national
greenhouse gas emission target reductions
specified in subsection (d) for the year,
the Secretary may, at any time before the beginning of
the year, reduce the Federal permit price for that
year.
``(4) Increase in price if target reductions not being
met.--If the Secretary determines that the reduction of
greenhouse gas emissions is failing to meet the target
reductions specified in subsection (d) for a year in such
period, the Secretary may increase the Federal permit price for
permits no earlier than 2 years after the year for which the
determination is made.
``(5) Maximum and minimum price.--
``(A) In general.--Not later than January 1, 2023,
and every 10 years thereafter, the Secretary, after
consultation with the Administrator of the
Environmental Protection Agency and the Secretary of
Energy, shall publish a 10-year schedule of the minimum
and maximum prices for Federal emissions permits.
``(B) Prices specified.--For years prior to 2026,
the maximum and minimum price for a Federal emission
permit issued by the Secretary in a year may not be
below the minimum price or the maximum price for the
corresponding year specified in the following table:
----------------------------------------------------------------------------------------------------------------
``Year: Minimum Price is: Maximum Price is:
----------------------------------------------------------------------------------------------------------------
2017............................................................... $18.75 $31.25
2018............................................................... $31.25 $43.75
2019............................................................... $43.75 $56.25
2020............................................................... $56.25 $68.75
2021............................................................... $68.75 $82.25
2022............................................................... $81.25 $93.75
2023............................................................... $93.75 $106.25
2024............................................................... $106.25 $118.75
2025............................................................... $118.75 $131.25.
----------------------------------------------------------------------------------------------------------------
``(C) Adjustment for inflation.--In the case of any
calendar year beginning after 2016, each dollar amount
contained in the table in subparagraph (B) shall be
increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost of living adjustment
determined under section 1(f)(3) for the
calendar year, determined by substituting
`calendar year 2015' for `calendar year 1992'
in subparagraph (B) thereof.
``(d) National Limitation.--
``(1) Targets.--For purposes of this section--
``(A) 2016 through 2020.--The average emissions for
the period 2016 through 2020 shall be no more than 90
percent of the carbon dioxide equivalents emitted in
the United States in 2005.
``(B) 2026 through 2030.--The average emissions for
the period 2026 through 2030 shall be no more than 70
percent of the carbon dioxide equivalents emitted in
the United States in 2005.
``(C) 2036 through 2040.--The average emissions for
the period 2036 through 2040 shall be no more than 50
percent of the carbon dioxide equivalents emitted in
the United States in 2005.
``(D) 2046 through 2050.--The average emissions for
the period 2046 through 2050 shall be no more than 30
percent of the carbon dioxide equivalents emitted in
the United States in 2005.
``(E) 2056 through 2060.--The average emissions for
the period 2056 through 2060 shall be no more than 20
percent of the carbon dioxide equivalents emitted in
the United States in 2005.
``(2) Determination of 2005 levels.--For purposes of
subparagraph (A), the number of metric tons of carbon dioxide
equivalents emitted in the United States in 2005 shall be the
number determined under section 1605(a) of the Energy Policy
Act of 1992 and published by the Energy Information
Administration.
``(e) Report.--
``(1) In general.--Not later than the second March 1 after
the date of the enactment of the Managed Carbon Price Act of
2015, and annually thereafter, the Secretary shall publish a
report describing--
``(A) the extent to which the United States
greenhouse gas emission limitations specified under
subsection (d) are being achieved,
``(B) the United States greenhouse gas emission
permits sold during the previous calendar year and the
impact of the number of such permits on greenhouse gas
emissions in the United States, and
``(C) the total greenhouse gas emissions worldwide
for the previous calendar year in relation to such
emissions for 2005.
``(2) Report details.--Such report shall include--
``(A) an explanation of the methodology and
assumptions the Secretary has used in establishing
prices under this section, and
``(B) an estimation, or range of estimations, of
the price of permits for the 10-year period following
the current prices published under subsection (c).
``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 (including the gasses released as
a result of flaring or venting such 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.
``(c) Publication of Schedule.--Not later than one year after the
date of the enactment of the Managed Carbon Price Act of 2015, the
Administrator, in consultation with the Secretary and the Secretary of
Energy, shall publish a schedule listing each greenhouse gas emission
substance and the quantity of each substance required to make 1 metric
ton of carbon dioxide. The Administrator, in consultation with the
Secretary and the Secretary of Energy, may update such schedule from
time to time.
``SEC. 9904. INFORMATION REPORTING REQUIREMENTS.
``Secretary may solicit information from covered persons regarding
estimated future use of greenhouse gas emissions substances.
``SEC. 9905. 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. 6433. 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.--Chapter 38 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
subchapter:
``Subchapter E--Greenhouse Gas Emission Substances
``Sec. 4691. Greenhouse gas emission substances.
``SEC. 4691. 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 100 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) Coordination.--The tax imposed under this section is in
addition to the fee imposed under subtitle L.''.
(d) Establishment of Energy 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 American
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. 9512. ENERGY 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 `Energy 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.
``(c) Expenditures From Trust Fund.--
``(1) In general.--The Secretary shall pay monthly from the
Trust Fund the dividend amount to each taxpayer.
``(2) Dividend amount.--For purposes of paragraph (1), the
term `dividend amount' means the sum of--
``(A)(i) in the case of the taxpayer filing a joint
return, the individual share for the husband and the
individual share for the wife, and
``(ii) in the case of a taxpayer other than a
taxpayer described in subparagraph (A), the individual
share, and
``(B) in the case of an individual who is a
dependent (as defined in section 152) of the taxpayer,
\1/2\ of the individual share.
For purposes of subparagraph (B), not more than 2 dependents
may be taken into account for each taxpayer.
``(3) Individual share.--For purposes of this subsection,
the term `individual share' means the amount determined by the
Secretary by dividing the total amount deposited in the Trust
Fund for the month by the total number of individual shares
payable at the end of such month.
``(4) Limitation.--For purposes of this subsection--
``(A) In general.--No amount is payable under this
subsection with respect to an individual unless the
individual is a qualified individual.
``(B) Qualified individual.--The term `qualified
individual' means an individual who is a lawful
resident of the United States on the date of such
payment. For purposes of ensuring that payments are
made under this subsection to all qualified
individuals, the Secretary shall consult with such
other Federal and State officials as the Secretary
determines necessary or appropriate.
``(C) United states.--For purposes of subparagraph
(B), the United States includes the District of
Columbia, the Commonwealth of Puerto Rico, the Virgin
Islands, Guam, American Samoa, and the Commonwealth of
the Northern Mariana Islands.''.
(e) Conforming and Clerical Amendments.--
(1) The table of subchapters for chapter 38 of such Code is
amended by adding at the end the following new item:
``subchapter e. 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 B of chapter 65 of
such Code is amended by adding at the end the following new
item:
``Sec. 6433. Refunds of Federal emission permit fee for certain
uses.''.
(4) The table of sections for subchapter A of chapter 98 of
such Code is amended by adding at the end the following:
``Sec. 9512. Energy 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, 2014.
<all>
Introduced in House
Introduced in House
Sponsor introductory remarks on measure. (CR E211)
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.
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.
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.
Referred to the Subcommittee on Energy and Power.
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