Gas Tax Replacement Act of 2014

Summary: Gas Tax Replacement Act of 2014 - Amends the Internal Revenue Code to: (1) repeal the excise taxes on gasoline and diesel fuels; (2) add a carbon dioxide equivalent rate to the tax on crude oil and petroleum products; and (3) impose an new excise tax on the carbon content of methanol, ethanol, and biodiesel produced in the United States and entered into the United States for consumption, use, or warehousing.  Requires the Administrator of the Environmental Protection Agency (EPA) to send to the Internal Revenue Service (IRS) and make public a report on the total life-cycle emissions of carbon dioxide for gasoline, diesel fuel, biofuel, and other regulated fuels.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Gas Tax Replacement Act of 2014''.

SEC. 2. REPEAL OF EXCISE TAX ON GASOLINE AND DIESEL FUEL.

    (a) Manufacturers Tax.--Section 4081(a)(2)(A) of the Internal 
Revenue Code of 1986 is amended--
            (1) in clause (i) by striking ``18.3 cents per gallon'' and 
        inserting ``0 cents per gallon'', and
            (2) in clause (ii) by striking ``24.3 cents per gallon'' 
        and inserting ``0 cents per gallon''.
    (b) Retail Tax.--Section 4041(a) of the Internal Revenue Code of 
1986 is amended by striking paragraph (1).
    (c) Conforming Amendments.--
            (1) Section 4081 of the Internal Revenue Code of 1986 is 
        amended--
                    (A) in subsection (a)(2) by striking subparagraph 
                (D),
                    (B) by striking subsection (c), and
                    (C) in subsection (d) by striking paragraph (1).
            (2) Section 4041 of the Internal Revenue Code of 1986 is 
        amended--
                    (A) by amending the heading of subsection (a) to 
                read as follows: ``Special Motor Fuels'', and
                    (B) in subsection (a)(2)(B)(i) by striking ``the 
                rate of tax specified in section 4081(a)(2)(A)(i) which 
                is in effect at the time of such sale or use,'' and 
                inserting ``18.3 cents per gallon''.
    (d) Effective Date.--The amendments made by this section shall 
apply to fuel sold or used after December 31, 2015.

SEC. 3. CARBON TAX ON HIGHWAY FUELS.

    (a) In General.--Paragraph (1) of section 4611(c) of the Internal 
Revenue Code of 1986 is amended by striking ``and'' at the end of 
subparagraph (A), by striking the period at the end of subparagraph (B) 
and inserting ``, and'', and by inserting after subparagraph (B) the 
following new subparagraph:
                    ``(C) the carbon dioxide equivalent rate.''.
    (b) Rates.--
            (1) In general.--Paragraph (2) of section 4611(c) of the 
        Internal Revenue Code of 1986 is amended by striking ``and'' at 
        the end of subparagraph (A), by striking the period at the end 
        of subparagraph (B) and inserting ``, and'', and by inserting 
        after subparagraph (B) the following new subparagraph:
                    ``(C) the carbon dioxide equivalent rate is--
                            ``(i) $50 per metric ton (or portion 
                        thereof) of total life-cycle emissions of 
                        carbon dioxide, and
                            ``(ii) an equivalent amount per metric ton 
                        (or portion thereof) of total life-cycle 
                        emissions of any other greenhouse gas 
                        determined on a ratio of the amount such other 
                        greenhouse gas per metric ton as the amount of 
                        carbon dioxide per metric ton,
                in the crude oil or petroleum product (as the case may 
                be) subject to tax under subsection (a) which is to be 
                refined into gasoline or diesel fuel.
        For purposes of subparagraph (C), total life-cycle emissions of 
        carbon dioxide and other greenhouse gases shall be determined 
        by the Administrator of the Environmental Protection Agency 
        pursuant to section 4 of the Gas Tax Replacement Act of 
        2014.''.
            (2) Adjustment for inflation.--Section 4611(c) of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following:
            ``(3) Carbon dioxide equivalent rate inflation 
        adjustment.--
                    ``(A) In general.--In the case of any calendar year 
                after 2014, the dollar amount in paragraph (2)(C) 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 2013'' for ``calendar year 
                        1992'' in subparagraph (B) thereof.
                    ``(B) Rounding.--If any amount as increased under 
                subparagraph (A) is not a multiple of $1, such amount 
                shall be rounded to the nearest multiple of $1.''.
    (c) Alternative Fuels Producer Excise Tax.--
            (1) In general.--Subchapter A of chapter 38 of the Internal 
        Revenue Code of 1986 is amended by inserting after section 4611 
        the following:

``SEC. 4611A. CERTAIN ALTERNATIVE FUELS.

    ``(a) General Rule.--There is hereby imposed a tax at the rate 
specified in subsection (b) on--
            ``(1) methanol, ethanol, and biodiesel produced in the 
        United States by the producer thereof, and
            ``(2) methanol, ethanol, and biodiesel, and any blended 
        product thereof, entered into the United States for 
        consumption, use, or warehousing.
    ``(b) Rate of Tax.--The rate of the tax imposed by this section 
is--
            ``(1) $50 per metric ton (or portion thereof) of total 
        life-cycle emissions of carbon dioxide, and
            ``(2) an equivalent amount per metric ton (or portion 
        thereof) of total life-cycle emissions of any other greenhouse 
        gas determined on a ratio of the amount such other greenhouse 
        gas per metric ton as the amount of carbon dioxide per metric 
        ton,
in methanol, ethanol, and biodiesel, and any blended product thereof, 
produced or entered into in the United States. For purposes of the 
preceding sentence, total life-cycle emissions of carbon dioxide and 
other greenhouse gases shall be determined by the Administrator of the 
Environmental Protection Agency pursuant to section 4 of the Gas Tax 
Replacement Act of 2014.
    ``(c) Persons Liable for Tax.--
            ``(1) United states production.--The tax imposed by 
        subsection (a)(1) shall be paid by the producer of the product 
        on which such tax is imposed.
            ``(2) Imported products.--The tax imposed by subsection 
        (a)(2) shall be paid by the person entering the product for 
        consumption, use, or warehousing.''.
            (2) Clerical amendment.--The table of sections for 
        subchapter A of chapter 38 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 4611 
        the following new item:

``Sec. 4611A. Certain alternative fuels.''.
    (d) Credits and Payments for Nontaxable Uses.--
            (1) Gasoline used on farms.--Section 6420 of the Internal 
        Revenue Code of 1986 is amended by inserting after subsection 
        (g) the following:
    ``(h) Special Rule for Carbon Dioxide Equivalent Rate of Tax.--For 
purposes of this section, a gallon of gasoline refined from a barrel of 
crude oil or petroleum product on which tax was imposed under section 
4611 at the carbon dioxide equivalent rate under subsection (c)(1)(C) 
thereof and used for a purpose described in subsection (a)--
            ``(1) shall be treated as a gallon of gasoline to which 
        this section applies, and
            ``(2) the rate at which tax was imposed under section 4611 
        with respect to such gallon shall be the same fraction of so 
        much of the tax imposed under section 4611 as is attributable 
        to subsection (c)(1)(C) thereof on such barrel as the fraction 
        of such gallon of gas is of the whole barrel.''.
            (2) Gasoline used for certain nonhighway purposes, etc.--
        Section 6421 of the Internal Revenue Code of 1986 is amended by 
        redesignating subsection (j) as subsection (k) and by inserting 
        after subsection (i) the following:
    ``(j) Special Rule for Carbon Dioxide Equivalent Rate of Tax.--For 
purposes of this section, in the case of a gallon of gasoline refined 
from a barrel of crude oil or petroleum product on which tax was 
imposed under section 4611 at the carbon dioxide equivalent rate under 
subsection (c)(1)(C) thereof--
            ``(1) if such gallon is used for a purpose described in 
        subsection (a) or (b) or is sold for a purpose described in 
        subsection (c), such gallon shall be treated as a gallon of 
        gasoline to which this section applies, and
            ``(2) the rate at which tax was imposed under section 4611 
        with respect to such gallon shall be the same fraction of so 
        much of the tax imposed under section 4611 as is attributable 
        to subsection (c)(1)(C) thereof on such barrel as the fraction 
        of such gallon of gas is of the whole barrel.''.
            (3) Credit for alcohol fuel, biodiesel, and alternative 
        fuel mixtures.--Section 6426(a) of the Internal Revenue Code of 
        1986 is amended by striking ``and'' at the end of paragraph 
        (1), by striking the period at the end of paragraph (2) and 
        inserting a comma, and by inserting after paragraph (2) the 
        following:
            ``(3) against so much of the tax imposed by section 4611 as 
        is attributable to the carbon dioxide equivalent rate of tax 
        under subsection (c)(1)(C) an amount equal to the credit 
        described in subsection (c), determined on the same fraction of 
        the amount of such tax as the number of gallons of diesel used 
        by the taxpayer in producing any biodiesel mixture for sale or 
        use in a trade or business of the taxpayer, and
            ``(4) against the tax imposed by section 4611A an amount 
        equal to the sum of the credits described in subsections (b), 
        (c), and (e), determined on the same fraction of the amount of 
        such tax as the number of gallons of alcohol, biodiesel, or 
        alternative fuel used by the taxpayer in producing any fuel 
        mixture of taxable fuel.''.
            (4) Fuels not used for taxable purposes.--Section 6427 of 
        the Internal Revenue Code of 1986 is amended by redesignating 
        subsection (p) as subsection (q) and by inserting after 
        subsection (o) the following:
    ``(p) Special Rule for Carbon Dioxide Equivalent Rate.--For 
purposes of this section, in the case of a gallon of fuel refined from 
a barrel of crude oil or petroleum product on which tax was imposed 
under section 4611 at the carbon dioxide equivalent rate of tax under 
subsection (c)(1)(C) thereof, or produced from methanol, ethanol, or 
biodiesel on which tax was imposed under section 4611A, if the sale or 
use of such fuel would give rise to a payment under this section but 
for the fact that such fuel was taxed under section 4611 or 4611A and 
not section 4041 or 4081--
            ``(1) this section shall be applied as if such fuel had 
        been taxed under section 4041 or 4081, and
            ``(2) the rate at which tax was imposed under section 4611 
        or 4611A with respect to such fuel shall be--
                    ``(A) in the case of tax imposed under section 
                4611(c)(1)(C), the same fraction of such tax on such 
                barrel as the fraction of a gallon of such fuel is of 
                the whole barrel, and
                    ``(B) in the case of tax imposed under section 
                4611A, the same fraction of the amount of such tax as 
                the amount of fuel giving rise to a payment under this 
                section.''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2016.

SEC. 4. LIFE-CYCLE EMISSIONS.

    (a) Carbon Dioxide Emissions Report.--Not later than the first ____ 
occurring at least 1 year after the date of enactment of this Act, the 
Administrator shall transmit to the Internal Revenue Service and make 
public a report on the total life-cycle emissions of carbon dioxide for 
each covered transportation fuel, expressed in tons of carbon dioxide 
emissions per barrel of fuel or an appropriate alternate measure. Such 
report shall take into account the differences in carbon dioxide 
emissions per barrel of fuel across different regions and countries due 
to means of resource extraction and production, transportation, and 
other factors, with each covered transportation fuel being as 
regionally specific as determined by the Administrator.
    (b) Addition of Covered Transportation Fuel.--The Administrator 
shall--
            (1) from time to time determine which transportation fuels 
        have achieved a sufficient share of the on-road transportation 
        fuel market to warrant being considered a covered 
        transportation fuel, and
            (2) update the report transmitted under subsection (a), and 
        transmit such updated report to Congress, with the 
        specifications on the total life-cycle emissions of carbon 
        dioxide and other greenhouse gases for each fuel newly 
        determined under paragraph (1) to be considered a covered 
        transportation fuel.
    (c) Definitions.--In this section:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Biofuel.--The term ``biofuel'' means the biofuel 
        component of a transportation fuel.
            (3) Covered transportation fuel.--The term ``covered 
        transportation fuel'' means gasoline, diesel fuel, biofuel, and 
        any other fuel the Administrator determines has achieved a 
        sufficient share of the on-road transportation fuel market to 
        warrant regulation under this section.
            (4) Greenhouse gas.--The term ``greenhouse gas'' has the 
        same meaning given the term in section 211(o)(1) of the Clean 
        Air Act (42 U.S.C. 7545(o)(1)).
            (5) Life-cycle emissions.--The term ``life-cycle 
        emissions'' means emissions from all activities included in the 
        production, transport, storage, and use of a fuel, including 
        land use changes, means of resource extraction and production, 
        transportation systems, and leakages.