I 

116TH CONGRESS 

1ST SESSION H. R. 763 

To create a Carbon Dividend Trust Fund for the American people in order 

to encourage market-driven innovation of clean energy technologies and 

market efficiencies which will reduce harmful pollution and leave a 

healthier, more stable, and more prosperous nation for future generations. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 24, 2019 

Mr. DEUTCH (for himself, Mr. LIPINSKI, Mr. CRIST, Mr. PETERS, Ms. 

ESHOO, Ms. JUDY CHU of California, and Mr. ROONEY of Florida) introduced the following bill; which was referred to the Committee on Ways 

and Means, and in addition to the Committees on Energy and Commerce, 

and Foreign Affairs, 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 create a Carbon Dividend Trust Fund for the American 

people in order to encourage market-driven innovation 

of clean energy technologies and market efficiencies 

which will reduce harmful pollution and leave a healthier, 

more stable, and more prosperous nation for future generations. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Energy Innovation and 

3 Carbon Dividend Act of 2019’’. 

4 SEC. 2. FINDINGS. 

5 The Congress finds that— 

6 (1) efficient markets strengthen our economy 

7 and benefit our Nation by encouraging competition, 

8 innovation, and technological progress; 

9 (2) efficient markets should reflect all costs of 

10 goods to ensure that they advance America’s pros11 perity and national interests; 

12 (3) emissions of carbon pollution and other 

13 harmful pollutants into our Nation’s air impose sub14 stantial costs on all Americans and on future gen15 erations; and 

16 (4) creation of a Carbon Dividend Trust Fund, 

17 to be distributed to the American people, will make 

18 markets more efficient, create jobs, and stimulate 

19 competition, innovation, and technological progress 

20 that benefit all Americans and future generations. 

21 SEC. 3. CARBON DIVIDENDS AND CARBON FEE. 

22 (a) IN GENERAL.—The Internal Revenue Code of 

23 1986 is amended by adding at the end the following new 

24 subtitle: 


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1 ‘‘Subtitle L—CARBON DIVIDENDS 

2 AND CARBON FEE 

‘‘CHAPTER 101. CARBON FEES. 

‘‘CHAPTER 102. CARBON BORDER FEE ADJUSTMENT. 

3 ‘‘CHAPTER 101—CARBON FEES 

‘‘Sec. 9901. Definitions. 

‘‘Sec. 9902. Carbon fee. 

‘‘Sec. 9903. Emissions reduction schedule. 

‘‘Sec. 9904. Fee on fluorinated greenhouse gases. 

‘‘Sec. 9905. Decommissioning of Carbon Administration. 

‘‘Sec. 9906. Carbon Capture and Sequestration. 

‘‘Sec. 9907. Administrative authority. 

4 ‘‘SEC. 9901. DEFINITIONS. 

5 ‘‘For purposes of this subtitle: 

6 ‘‘(a) ADMINISTRATOR.—The term ‘Administrator’ 

7 means the Administrator of the Environmental Protection 

8 Agency. 

9 ‘‘(b) CARBON DIOXIDE EQUIVALENT OR CO2-E.— 

10 The term ‘carbon dioxide equivalent’ or ‘CO2-e’ means the 

11 number of metric tons of carbon dioxide emissions with 

12 the same global warming potential as one metric ton of 

13 another greenhouse gas. 

14 ‘‘(c) CARBON-INTENSIVE PRODUCT.—The term ‘car15 bon-intensive product’ means, as identified by the Sec16 retary by rule— 

17 ‘‘(1) any manufactured or agricultural product 

18 which the Secretary in consultation with the Admin19 istrator determines is emissions-intensive and tradeVerDate Sep 11 2014 22:19 Feb 05, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H763.IH H763

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1 exposed, except that no covered fuel is a carbon-in2 tensive product, and 

3 ‘‘(2) until such time that the Secretary promul4 gates rules identifying carbon-intensive products, the 

5 following shall be considered carbon-intensive prod6 ucts: iron, steel, steel mill products (including pipe 

7 and tube), aluminum, cement, glass (including flat, 

8 container, and specialty glass and fiberglass), pulp, 

9 paper, chemicals, or industrial ceramics. 

10 ‘‘(d) CARBON LEAKAGE.—The term ‘carbon leakage’ 

11 means an increase of global greenhouse gas emissions 

12 which are substantially due to the relocation of greenhouse 

13 gas sources from the United States to jurisdictions which 

14 lack comparable controls upon greenhouse gas emissions. 

15 ‘‘(e) COST OF CARBON OR CARBON COSTS.—The 

16 term ‘cost of carbon’ or ‘carbon costs’ means a national 

17 or sub-national government policy which explicitly places 

18 a price on greenhouse gas pollution and shall be limited 

19 to either a tax on greenhouse gases or a system of cap20 and-trade. The cost of carbon is expressed as the price 

21 per metric ton of CO2-e. 

22 ‘‘(f) COVERED ENTITY.—The term ‘covered entity’ 

23 means— 

24 ‘‘(1) in the case of crude oil— 


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1 ‘‘(A) a refinery operating in the United 

2 States, and 

3 ‘‘(B) any importer of any petroleum or pe4 troleum product into the United States, 

5 ‘‘(2) in the case of coal— 

6 ‘‘(A) any coal mining operation in the 

7 United States, and 

8 ‘‘(B) any importer of coal into the United 

9 States, 

10 ‘‘(3) in the case of natural gas— 

11 ‘‘(A) any entity entering pipeline quality 

12 natural gas into the natural gas transmission 

13 system, and 

14 ‘‘(B) any importer of natural gas into the 

15 United States, 

16 ‘‘(4) in the case of fluorinated gases any entity 

17 required to report the emission of a fluorinated gas 

18 under part 98 of title 40, Code of Federal Regula19 tions, and 

20 ‘‘(5) any entity or class of entities which, as de21 termined by the Secretary, is transporting, selling, 

22 or otherwise using a covered fuel in a manner which 

23 emits a greenhouse gas to the atmosphere and which 

24 has not been covered by the carbon fee, the 


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1 fluorinated greenhouse gas fee, or the carbon border 

2 fee adjustment. 

3 ‘‘(g) COVERED FUEL.—The term ‘covered fuel’ 

4 means crude oil, natural gas, coal, or any other product 

5 derived from crude oil, natural gas, or coal which shall 

6 be used so as to emit greenhouse gases to the atmosphere. 

7 ‘‘(h) CRUDE OIL.—The term ‘crude oil’ means 

8 unrefined petroleum. 

9 ‘‘(i) EXPORT.—The term ‘export’ means to transport 

10 a product from within the jurisdiction of the United States 

11 to persons outside the United States. 

12 ‘‘(j) FLUORINATED GREENHOUSE GAS.—The term 

13 ‘fluorinated greenhouse gas’ means sulfur hexafluoride 

14 (SF6), nitrogen trifluoride (NF3), and any fluorocarbon 

15 except for controlled substances as defined in subpart A 

16 of part 82 of title 40, Code of Federal Regulation, and 

17 substances with vapor pressures of less than 1 mm of Hg 

18 absolute at 25 degrees. With these exceptions, ‘fluorinated 

19 greenhouse gas’ includes but is not limited to any 

20 hydrofluorocarbon, any perfluorocarbon, any fully 

21 fluorinated linear, branched or cyclic alkane, ether, ter22 tiary amine or aminoether, any perfluoropolyether, and 

23 any hydrofluoropolyether. 


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1 ‘‘(k) FOSSIL FUEL.—The term ‘fossil fuel’ means 

2 coal, coal products, petroleum, petroleum products, or nat3 ural gas. 

4 ‘‘(l) FULL FUEL CYCLE GREENHOUSE GAS EMIS5 SIONS.—The term ‘full fuel cycle greenhouse gas emis6 sions’ means the greenhouse gas content of a covered fuel 

7 plus that covered fuel’s upstream greenhouse gas emis8 sions. 

9 ‘‘(m) GLOBAL WARMING POTENTIAL.—The term 

10 ‘global warming potential’ means the ratio of the time11 integrated radiative forcing from the instantaneous release 

12 of one kilogram of a trace substance relative to that of 

13 one kilogram of carbon dioxide. 

14 ‘‘(n) GREENHOUSE GAS.—The term ‘greenhouse gas’ 

15 means carbon dioxide (CO2), methane (CH4), nitrous 

16 oxide (N2O), sulfur hexafluoride (SF6), 

17 hydrofluorocarbons (HFCs), perfluorocarbon (PFCs), and 

18 other gases as defined by rule of the Administrator. 

19 ‘‘(o) GREENHOUSE GAS CONTENT.—The term 

20 ‘greenhouse gas content’ means the amount of greenhouse 

21 gases, expressed in metric tons of CO2-e, which would be 

22 emitted to the atmosphere by the use of a covered fuel 

23 and shall include, nonexclusively, emissions of carbon diox24 ide (CO2), nitrous oxide (N2O), methane (CH4), and other 


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1 greenhouse gases as identified by rule of the Adminis2 trator. 

3 ‘‘(p) GREENHOUSE GAS EFFECT.—The term ‘green4 house gas effect’ means the adverse effects of greenhouse 

5 gases on health or welfare caused by the greenhouse gas’s 

6 heat-trapping potential or its effect on ocean acidification. 

7 ‘‘(q) IMPORT.—Irrespective of any other definition in 

8 law or treaty, the term ‘import’ means to land on, bring 

9 into, or introduce into any place subject to the jurisdiction 

10 of the United States. 

11 ‘‘(r) PETROLEUM.—The term ‘petroleum’ means oil 

12 removed from the earth or the oil derived from tar sands 

13 or shale. 

14 ‘‘(s) PRODUCTION GREENHOUSE GAS EMISSIONS.— 

15 The term ‘production greenhouse gas emissions’ means 

16 the quantity of greenhouse gases, expressed in metric tons 

17 of CO2-e, emitted to the atmosphere resulting from, non18 exclusively, the production, manufacture, assembly, trans19 portation, or financing of a product. 

20 ‘‘(t) UPSTREAM GREENHOUSE GAS EMISSIONS.— 

21 The term ‘upstream greenhouse gas emissions’ means the 

22 quantity of greenhouse gases, expressed in metric tons of 

23 CO2-e, emitted to the atmosphere resulting from, non24 exclusively, the extraction, processing, transportation, fi25 nancing, or other preparation of a covered fuel for use. 


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1 ‘‘SEC. 9902. CARBON FEE. 

2 ‘‘(a) CARBON FEE.—There is hereby imposed a car3 bon fee on any covered entity’s emitting use, or sale or 

4 transfer for an emitting use, of any covered fuel. 

5 ‘‘(b) AMOUNT OF THE CARBON FEE.—The carbon 

6 fee imposed by this section is an amount equal to— 

7 ‘‘(1) the greenhouse gas content of the covered 

8 fuel, multiplied by 

9 ‘‘(2) the carbon fee rate. 

10 ‘‘(c) CARBON FEE RATE.—For purposes of this sec11 tion— 

12 ‘‘(1) IN GENERAL.—The carbon fee rate, with 

13 respect to any use, sale, or transfer during a cal14 endar year, shall be— 

15 ‘‘(A) in the case of calendar year 2019, 

16 $15, and 

17 ‘‘(B) except as provided in paragraph (2), 

18 in the case of any calendar year thereafter— 

19 ‘‘(i) the carbon fee rate in effect 

20 under this subsection for the preceding cal21 endar year, plus 

22 ‘‘(ii) $10. 

23 ‘‘(2) EXCEPTIONS.— 

24 ‘‘(A) INCREASED CARBON FEE RATE

25 AFTER MISSED ANNUAL EMISSIONS REDUCTION

26 TARGET.—In the case of any year immediately 


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1 following a year for which the Secretary deter2 mines under 9903(b) that the actual emissions 

3 of greenhouse gases from covered fuels exceeded 

4 the emissions reduction target for the previous 

5 year, paragraph (1)(B)(ii) shall be applied by 

6 substituting ‘$15’ for the dollar amount other7 wise in effect for the calendar year under such 

8 paragraph. 

9 ‘‘(B) CESSATION OF CARBON FEE RATE IN10 CREASE AFTER CERTAIN EMISSION REDUCTIONS

11 ACHIEVED.—In the case of any year imme12 diately following a year for which the Secretary 

13 determines under 9903(b) that actual emissions 

14 of greenhouse gases from covered fuels is not 

15 more than 10 percent of the greenhouse gas 

16 emissions from covered fuels during the year 

17 2016, paragraph (1)(B)(ii) shall be applied by 

18 substituting ‘$0’ for the dollar amount other19 wise in effect for the calendar year under such 

20 paragraph. 

21 ‘‘(3) INFLATION ADJUSTMENT.—In the case of 

22 any calendar year after 2019, each of the dollar 

23 amounts in paragraphs (1)(A), (1)(B)(ii), and 

24 (2)(A) shall be increased by an amount equal to— 

25 ‘‘(A) such dollar amount, multiplied by 


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1 ‘‘(B) the cost-of-living adjustment deter2 mined under section 1(f)(3) for the calendar 

3 year, determined by substituting ‘calendar year 

4 2018’ for ‘calendar year 2016’ in subparagraph 

5 (A)(ii) thereof. 

6 ‘‘(d) EXEMPTION AND REFUND.—The Secretary 

7 shall prescribe such rules as are necessary to ensure the 

8 fee imposed by this section is not imposed with respect 

9 to any nonemitting use, or any sale or transfer for a non10 emitting use, including rules providing for the refund of 

11 any carbon fee paid under this section with respect to any 

12 such use, sale, or transfer. 

13 ‘‘(e) EXEMPTIONS.— 

14 ‘‘(1) AGRICULTURE.— 

15 ‘‘(A) FUEL.—If any covered fuel or its de16 rivative is used on a farm for a farming pur17 pose, the Secretary shall pay (without interest) 

18 to the ultimate purchaser of such covered fuel 

19 or its derivative, the total amount of carbon 

20 fees previously paid upon that covered fuel or 

21 its derivative, as specified by rule of the Sec22 retary. 

23 ‘‘(B) FARM, FARMING USE, AND FARMING

24 PURPOSE.—The terms ‘farm’, ‘farming use’, 

25 and ‘farming purpose’ shall have the respective 


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1 meanings given such terms under section 

2 6420(c). 

3 ‘‘(C) OTHER GREENHOUSE GASES EMIS4 SIONS FROM AGRICULTURE.—The carbon fee 

5 shall not be levied upon non-fossil fuel green6 house gas emissions which occur on a farm. 

7 ‘‘(2) ARMED FORCES OF THE UNITED

8 STATES.—If any covered fuel or its derivative is 

9 used by the Armed Forces of the United States as 

10 supplies for vessels of war, vehicles, or electrical 

11 power generation equipment, the Secretary shall pay 

12 (without interest) to the ultimate purchaser of such 

13 covered fuel or its derivative, the total amount of 

14 carbon fees previously paid upon that covered fuel or 

15 its derivative, as specified by rule of the Secretary. 

16 ‘‘SEC. 9903. EMISSIONS REDUCTION SCHEDULE. 

17 ‘‘(a) IN GENERAL.—An emissions reduction schedule 

18 for greenhouse gas emissions from covered fuels is hereby 

19 established, as follows: 

20 ‘‘(1) REFERENCE YEAR.—The greenhouse gas 

21 emissions from covered fuels during the year 2016 

22 shall be the reference amount of emissions and shall 

23 be determined from the ‘Inventory of U.S. Green24 house Gas Emissions and Sinks: 1990–2016’ pubVerDate Sep 11 2014 22:19 Feb 05, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H763.IH H763

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1 lished by the Environmental Protection Agency in 

2 April of 2018. 

3 ‘‘(2) EMISSIONS REDUCTION TARGET.—The 

4 first emission reduction target shall be for the year 

5 2022. The emission target for each year thereafter 

6 shall be the previous year’s target emissions minus 

7 a percentage of emissions during the reference year 

8 determined in accordance with the following table: 

‘‘Year Emissions Reduction Target 

2016 Reference year 

2020 to 2024 No emissions reduction target 

2025 to 2034 5 percent of 2016 emissions per year 

2035 to 2050 2.5 percent of 2016 emissions per year 

9 ‘‘(b) ADMINISTRATIVE DETERMINATION.—Not later 

10 than 60 days after the beginning of each calendar year 

11 beginning after the enactment of this section, the Sec12 retary, in consultation with the Administrator, shall deter13 mine whether actual emissions of greenhouse gases from 

14 covered fuels exceeded the emissions reduction target for 

15 the preceding calendar year. The Secretary shall make 

16 such determination using the same greenhouse gas ac17 counting method as was used to determine the greenhouse 

18 gas emissions in the ‘Inventory of U.S. Greenhouse Gas 

19 Emissions and Sinks: 1990–2016’ published by the Envi20 ronmental Protection Agency in April of 2018. 


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1 ‘‘SEC. 9904. FEE ON FLUORINATED GREENHOUSE GASES. 

2 ‘‘(a) FLUORINATED GAS FEE.—A fee is hereby im3 posed upon any fluorinated greenhouse gas which is re4 quired to be reported under part 98 of title 40, Code of 

5 Federal Regulations. 

6 ‘‘(b) AMOUNT.—The fee to be paid by the covered 

7 entity required to so report shall be an amount equal to— 

8 ‘‘(1) the total amount, in metric tons of CO2- 

9 e, of emitted fluorinated greenhouse gases (or, in the 

10 case of a supplier, emissions that would result deter11 mined under the rules of such part), multiplied by 

12 ‘‘(2) an amount equal to 10 percent of the car13 bon fee rate in effect under section 9902(d)(1) for 

14 the calendar year of such emission. 

15 ‘‘SEC. 9905. DECOMMISSIONING OF CARBON FEE. 

16 ‘‘(a) IN GENERAL.—At such time that— 

17 ‘‘(1) the Secretary determines under 9903(b) 

18 that actual emissions of greenhouse gases from cov19 ered fuels is not more than 10 percent of the green20 house gas emissions from covered fuels during the 

21 year 2016, and 

22 ‘‘(2) the monthly carbon dividend payable to an 

23 adult eligible individual has been less than $20 for 

24 3 consecutive years, 

25 the Secretary shall decommission in an orderly manner all 

26 bureaus and programs associated with administering the 


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1 carbon fee, the carbon border fee adjustment, and the Car2 bon Dividend Trust Fund. 

3 ‘‘(b) INFLATION ADJUSTMENT.—In the case of any 

4 calendar year after 2020, the $20 amount under sub5 section (a)(2) shall be increased by an amount equal to— 

6 ‘‘(1) such dollar amount, multiplied by 

7 ‘‘(2) cost-of-living adjustment determined under 

8 section 1(f)(3) for the calendar year, determined by 

9 substituting ‘calendar year 2017’ for ‘calendar year 

10 2016’ in subparagraph (A)(ii) thereof. 

11 ‘‘SEC. 9906. CARBON CAPTURE AND SEQUESTRATION. 

12 ‘‘(a) IN GENERAL.—The Secretary, in consultation 

13 with the Administrator and the Secretary of Energy, shall 

14 prescribe regulations for making payments as provided in 

15 subsection (b) to qualified facilities which capture and se16 quester qualified carbon dioxide. 

17 ‘‘(b) PAYMENT AMOUNTS.— 

18 ‘‘(1) IN GENERAL.—The Secretary shall make 

19 payments to a qualified facility in the same manner 

20 as if such payment was a refund of an overpayment 

21 of the carbon fee imposed by section 9902, in cases 

22 in which such qualified facility— 

23 ‘‘(A) uses any covered fuel— 

24 ‘‘(i) with respect to which the carbon 

25 fee has been paid, and 


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1 ‘‘(ii) which results in the emission of 

2 qualified carbon dioxide, 

3 ‘‘(B) captures such emitted qualified car4 bon dioxide, and 

5 ‘‘(C)(i) sequesters such qualified carbon di6 oxide in a manner which is safe, permanent, 

7 and in compliance with any applicable local, 

8 State, and Federal laws, or 

9 ‘‘(ii) utilizes such qualified carbon dioxide 

10 in a manner provided in paragraph (3)(C). 

11 ‘‘(2) AMOUNT OF REFUND.—The payment de12 termined under this section shall be an amount 

13 equal to the lesser of— 

14 ‘‘(A)(i) the adjusted metric tons of quali15 fied carbon dioxide captured and sequestered or 

16 utilized, multiplied by 

17 ‘‘(ii) the carbon fee rate during the year in 

18 which the carbon fee was imposed by section 

19 9902 upon the covered fuel to which such car20 bon dioxide relates, or 

21 ‘‘(B) the amount of the carbon fee imposed 

22 by section 9902 with respect to such covered 

23 fuel. 

24 ‘‘(3) DEFINITIONS AND SPECIAL RULES.—For 

25 purposes of this section— 


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1 ‘‘(A) QUALIFIED CARBON DIOXIDE; QUALI2 FIED FACILITY.— 

3 ‘‘(i) QUALIFIED CARBON DIOXIDE.— 

4 The term ‘qualified carbon dioxide’ has the 

5 same meaning given such term under sec6 tion 45Q(b). 

7 ‘‘(ii) QUALIFIED FACILITY.—The term 

8 ‘qualified facility’ means any industrial fa9 cility at which carbon capture equipment is 

10 placed in service. 

11 ‘‘(B) ADJUSTED TOTAL METRIC TONS.— 

12 The adjusted total metric tons of qualified car13 bon dioxide captured and sequestered or utilized 

14 shall be the total metric tons of qualified carbon 

15 dioxide captured and sequestered or utilized, re16 duced by the amount of any carbon dioxide like17 ly to escape and be emitted into the atmosphere 

18 due to imperfect storage technology or other19 wise, as determined by the Secretary in con20 sultation with the Administrator. 

21 ‘‘(C) UTILIZATION.—The Secretary, in 

22 consultation with the Administrator, shall es23 tablish regulations providing for the methods 

24 and processes by which qualified carbon dioxide 

25 may be utilized so as to remove that qualified 


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1 dioxide safely and permanently from the atmos2 phere. Utilization may include the production of 

3 substances such as but not limited to plastics 

4 and chemicals. Such regulations shall minimize 

5 the escape or further emission of the qualified 

6 carbon dioxide into the atmosphere. 

7 ‘‘(D) SEQUESTRATION.—Not later 540 

8 days after the date of the enactment of this sec9 tion, the Secretary, in consultation with the Ad10 ministrator, shall prescribe regulations identi11 fying the conditions under which carbon dioxide 

12 may be safely and permanently sequestered. 

13 ‘‘(4) COORDINATION WITH CREDIT FOR CARBON

14 DIOXIDE SEQUESTRATION.—At such time that the 

15 Secretary prescribes regulations implementing this 

16 section, no payment under this section shall be al17 lowed to a taxpayer to whom a credit has been al18 lowed for any taxable year under section 45Q. 

19 ‘‘SEC. 9907. ADMINISTRATIVE AUTHORITY. 

20 ‘‘(a) IN GENERAL.—The Secretary in consultation 

21 with the Administrator shall prescribe such regulations, 

22 and other guidance, as may be necessary to carry out the 

23 purposes of this subtitle and assess and collect the carbon 

24 fee imposed by section 9902 and the fluorinated green25 house gas fee imposed by section 9904. 


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1 ‘‘(b) SPECIFICALLY.—Such regulations and guidance 

2 shall include— 

3 ‘‘(1) the identification of an effective point in 

4 the production, distribution, or use of a covered fuel 

5 or fluorinated greenhouse gas for collecting such car6 bon fee or fluorinated greenhouse gas fee, in such a 

7 manner so as to minimize administrative burden and 

8 maximize the extent to which full fuel cycle green9 house gas emissions from covered fuels or 

10 fluorinated greenhouse gases have the carbon fee or 

11 fluorinated greenhouse gas fee levied upon them, 

12 ‘‘(2) the identification of covered entities which 

13 shall be liable for the payment of the carbon fee or 

14 the fluorinated greenhouse gas fee, 

15 ‘‘(3) requirements for the monthly payment of 

16 such fees, 

17 ‘‘(4) as may be necessary or convenient, rules 

18 for distinguishing between different types of covered 

19 fuels, 

20 ‘‘(5) as may be necessary or convenient, rules 

21 for distinguishing between a covered fuel’s green22 house gas content and its upstream greenhouse gas 

23 emissions, 

24 ‘‘(6) rules to ensure that no covered fuel or 

25 fluorinated greenhouse gas has the carbon fee, 


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1 fluorinated greenhouse gas fee, or carbon border fee 

2 adjustment imposed upon it more than once, and 

3 ‘‘(7) rules to ensure that the domestic imple4 mentation of the carbon fee and the fluorinated 

5 greenhouse gas fee coordinate with the implementa6 tion of the carbon border fee adjustment of chapter 

7 102. 

8 ‘‘CHAPTER 102—CARBON BORDER FEE 

9 ADJUSTMENT 

‘‘Sec. 9908. Carbon border fee adjustment. 

‘‘Sec. 9909. Administration of the carbon border fee adjustment. 

‘‘Sec. 9910. Allocation of carbon border fee adjustment revenues. 

10 ‘‘SEC. 9908. CARBON BORDER FEE ADJUSTMENT. 

11 ‘‘(a) IN GENERAL.—The fees imposed by, and re12 funds allowed under, this section shall be referred to as 

13 ‘the carbon border fee adjustment’. 

14 ‘‘(b) PURPOSE.—The purpose of the carbon border 

15 fee adjustment is to protect animal, plant, and human life 

16 and health, to conserve exhaustible natural resources by 

17 preventing carbon leakage, and to facilitate the creation 

18 of international agreements. 

19 ‘‘(c) IMPORTED COVERED FUELS FEE.—In the case 

20 of any person that imports into the United States any cov21 ered fuel, there shall be imposed a fee equal to the excess 

22 (if any) of— 

23 ‘‘(1) an amount equal to— 


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1 ‘‘(A) the amount of full fuel cycle green2 house gas emissions of such fuel, multiplied by 

3 ‘‘(B) the carbon fee rate in effect for the 

4 year in which such fuel is imported, over 

5 ‘‘(2) the total foreign cost of carbon carried by 

6 such fuel. 

7 ‘‘(d) IMPORTED CARBON-INTENSIVE PRODUCTS

8 FEE.—In the case of any person that imports into the 

9 United States any carbon-intensive products, there shall 

10 be imposed a fee equal to the excess (if any) of— 

11 ‘‘(1) an amount equal to— 

12 ‘‘(A) production greenhouse gas emissions 

13 of such product, multiplied by 

14 ‘‘(B) the carbon fee rate in effect for the 

15 year in which the production greenhouse gas 

16 emissions of such product were emitted into the 

17 atmosphere, over 

18 ‘‘(2) the total foreign cost of carbon carried by 

19 such product. 

20 ‘‘(e) REFUND ON EXPORTS FROM UNITED

21 STATES.— 

22 ‘‘(1) CARBON-INTENSIVE PRODUCTS.—Under 

23 regulations prescribed by the Secretary, there shall 

24 be allowed a credit or refund (without interest) to 

25 exporters of carbon-intensive products manufactured 


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1 or produced in the United States an amount equal 

2 to the excess (if any) of— 

3 ‘‘(A) an amount equal to— 

4 ‘‘(i) the production greenhouse gas 

5 emissions of the exported carbon-intensive 

6 product, multiplied by 

7 ‘‘(ii) the carbon fee rate during the 

8 year in which the carbon fee or fluorinated 

9 greenhouse gas fee was paid upon the pro10 duction greenhouse gas emissions of the 

11 exported carbon-intensive product, over 

12 ‘‘(B) any total cost of carbon to be levied 

13 upon the carbon-intensive product by any juris14 diction to which the carbon-intensive product is 

15 to be imported. 

16 Any such credit or refund shall be allowed in the 

17 same manner as if it were an overpayment of the fee 

18 imposed by section 9902 or 9904. The Secretary 

19 shall establish fair, timely, impartial, and as nec20 essary confidential procedures by which any exporter 

21 of any product from the United States may petition 

22 the Secretary to include that exported product on 

23 the list of carbon-intensive products. 

24 ‘‘(2) COVERED FUELS.—Under regulations pre25 scribed by the Secretary, in the case of a covered 


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1 fuel produced in the United States with respect to 

2 which the fee under section 9902 was paid, there 

3 shall be allowed as a credit or refund (without inter4 est) to any exporter of such covered fuels an amount 

5 equal to the excess (if any) of— 

6 ‘‘(A) an amount equal to— 

7 ‘‘(i) the full fuel cycle greenhouse gas 

8 emissions of the covered fuel, multiplied by 

9 ‘‘(ii) the carbon fee rate at the time 

10 the carbon fee was paid upon the full fuel 

11 cycle greenhouse gas emissions of the ex12 ported covered fuel, over 

13 ‘‘(B) any total cost of carbon to be levied 

14 upon the covered fuel by a jurisdiction to which 

15 the carbon-intensive product is to be imported. 

16 Any such credit or refund shall be allowed in the 

17 same manner as if it were an overpayment of tax 

18 imposed by section 9902. 

19 ‘‘(f) DEFINITIONS.—For purposes of this section— 

20 ‘‘(1) FOREIGN COST OF CARBON; FOREIGN CAR21 BON COSTS.—The term ‘foreign cost of carbon’ or 

22 ‘foreign carbon cost’ means the cost of any laws of 

23 a foreign jurisdiction which impose a system of cap24 and-trade with respect to, or a tax or fee on, greenVerDate Sep 11 2014 22:19 Feb 05, 2019 Jkt 089200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 E:\BILLS\H763.IH H763

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1 house gas. Such cost shall be determined and ex2 pressed as a price per metric ton of CO2-e. 

3 ‘‘(2) TOTAL COST OF CARBON CARRIED.—The 

4 term ‘total cost of carbon carried’ means an amount 

5 equal to— 

6 ‘‘(A) the production greenhouse gas emis7 sions of a carbon-intensive product or the full 

8 fuel cycle greenhouse gas emissions of a covered 

9 fuel, multiplied by 

10 ‘‘(B) the cost of carbon with respect to 

11 such product or fuel, reduced by any amount 

12 refunded with respect to such product or fuel 

13 by a foreign jurisdiction. 

14 The total cost of carbon carried shall be expressed 

15 as price in United States dollars. 

16 ‘‘(3) TOTAL FOREIGN COST OF CARBON CAR17 RIED.—The term ‘total foreign cost of carbon car18 ried’ means an amount equal to— 

19 ‘‘(A) the production greenhouse gas emis20 sions of a carbon-intensive product, or the full 

21 fuel cycle greenhouse gas emissions of a covered 

22 fuel, multiplied by 

23 ‘‘(B) the foreign cost of carbon with re24 spect to such product or fuel, reduced by the 


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1 amount refunded with respect to such product 

2 or fuel by a foreign jurisdiction. 

3 The total foreign cost of carbon carried shall be ex4 pressed as price in United States dollars. 

5 ‘‘SEC. 9909. ADMINISTRATION OF THE CARBON BORDER 

6 FEE ADJUSTMENT. 

7 ‘‘(a) GENERALLY.—The Secretary in consultation 

8 with the Administrator shall prescribe regulations and 

9 guidance which implement the carbon border fee adjust10 ment under section 9908. 

11 ‘‘(b) COLLABORATION.—In determining the produc12 tion greenhouse gas emissions of an imported carbon-in13 tensive product, the upstream greenhouse gas emissions 

14 of an imported covered fuel, the full fuel cycle greenhouse 

15 gas emissions of an imported covered fuel, or the foreign 

16 cost of carbon, or otherwise administering the carbon bor17 der fee adjustment, it is the sense of Congress that the 

18 Secretary should collaborate with authorized officers of 

19 any jurisdiction, including sub-national governments, af20 fected by the carbon border fee adjustment. 

21 ‘‘(c) METHODOLOGY.—In determining the production 

22 greenhouse gas emissions of an imported carbon-intensive 

23 product, the upstream greenhouse gas emissions of an im24 ported covered fuel, the full fuel cycle greenhouse gas 

25 emissions of an imported covered fuel, or the foreign cost 


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1 of carbon, the Secretary shall use reliable methodologies, 

2 which— 

3 ‘‘(1) as may be necessary or convenient— 

4 ‘‘(A) distinguish between different types of 

5 covered fuels, 

6 ‘‘(B) distinguish between a covered fuel’s 

7 greenhouse gas content and that covered fuel’s 

8 upstream greenhouse gas emissions, 

9 ‘‘(C) distinguish between the different 

10 types of greenhouse gas emissions which com11 pose a covered fuel’s upstream greenhouse gas 

12 emissions or greenhouse gas content, as well as 

13 the various processes which produced those 

14 emissions, and 

15 ‘‘(D) distinguish between the different 

16 types of greenhouse gas emissions which com17 pose a carbon-intensive product’s production 

18 greenhouse gas emissions, as well as the various 

19 processes which produced those emissions, 

20 ‘‘(2) ensure that no covered fuel, covered 

21 fluorinated greenhouse gas, or carbon-intensive prod22 uct has the carbon fee, the fluorinated greenhouse 

23 gas fee, or the border fee adjustment imposed upon 

24 it more than once, 


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1 ‘‘(3) ensure that the implementation of the bor2 der carbon adjustment aligns with the carbon fee 

3 and the fluorinated gas fee, 

4 ‘‘(4) in the case of incomplete data, rely upon 

5 the best available methodologies for interpolating 

6 data gaps, and 

7 ‘‘(5) are consistent with international treaties 

8 and agreements. 

9 ‘‘(d) SCHEDULE.—The Secretary shall determine— 

10 ‘‘(1) not later than 3 years after the date of the 

11 enactment of this section, the production greenhouse 

12 gas emissions of imported carbon-intensive products, 

13 ‘‘(2) not later than 180 days after the date of 

14 the enactment of this section, the full fuel cycle 

15 greenhouse gas emissions and the upstream green16 house gas emissions of every imported covered fuel, 

17 and 

18 ‘‘(3) not later than 3 years after the date of the 

19 enactment of this section, the foreign cost of carbon 

20 in all jurisdictions. 

21 ‘‘(e) PROCEDURE.—The Secretary shall establish 

22 fair, timely, impartial, and as necessary confidential proce23 dures by which the importer of any carbon-intensive prod24 uct or any covered fuel may petition the Secretary to re25 vise the Secretary’s determination of the production greenVerDate Sep 11 2014 22:19 Feb 05, 2019 Jkt 089200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\H763.IH H763

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1 house gas emissions, full fuel cycle greenhouse gas emis2 sions, or upstream greenhouse gas emissions of that im3 porter’s imported covered fuel or imported carbon-inten4 sive product, or the foreign cost of carbon carried by that 

5 importer’s imported carbon-intensive product. 

6 ‘‘(f) SHIPMENTS FROM THE UNITED STATES TO THE

7 TERRITORIES OF THE UNITED STATES.—Notwith8 standing any other treaty, law, or policy, shipments of cov9 ered fuels or carbon-intensive products from the United 

10 States to Guam, the United States Virgin Islands, Samoa, 

11 Puerto Rico, and the Northern Mariana Islands shall be 

12 eligible for a refund of the carbon fee under section 

13 9908(e). 

14 ‘‘(g) IMPORTS TO THE TERRITORIES OF THE UNITED

15 STATES.—Notwithstanding any other treaty, law, or pol16 icy, imports of covered fuels or carbon-intensive products 

17 to Guam, the United States Virgin Islands, Samoa, Puerto 

18 Rico, and the Northern Mariana Islands shall not be sub19 ject to Section 9908(c) or 9908(d).’’ 

20 ‘‘SEC. 9910. ALLOCATION OF CARBON BORDER FEE ADJUST21 MENT REVENUES. 

22 ‘‘The revenues collected under this chapter may be 

23 used to supplement appropriations made available in fiscal 

24 years 2020 and thereafter— 


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1 ‘‘(1) to U.S. Customs and Border Protection, in 

2 such amounts as are necessary to administer the 

3 carbon border fee adjustment, then 

4 ‘‘(2) to the Department of Treasury, in such 

5 amounts as are necessary to allow refunds under 

6 section 9908(e) to exporters of carbon-intensive 

7 products and exporters of covered fuels.’’. 

8 (b) COORDINATION WITH CARBON OXIDE SEQUES9 TRATION CREDIT.—Section 45Q(f) is amended by adding 

10 at the end the following new paragraph: 

11 ‘‘(8) COORDINATION WITH CARBON CAPTURE

12 AND SEQUESTRATION PAYMENTS.—No credit shall 

13 be allowed under this section to a taxpayer which 

14 has received any payment under section 9906.’’. 

15 (c) TREATIES AND INTERNATIONAL NEGOTIA16 TIONS.— 

17 (1) CONFORMANCE WITH INTERNATIONAL

18 TREATIES.—In the case that the Appellate Body of 

19 the World Trade Organization, or any other authori20 tative international treaty interpreter, shall find any 

21 portion of the carbon border fee adjustment under 

22 chapter 102 of the Internal Revenue Code of 1986 

23 to violate any treaty to which the United States is 

24 a party, the Secretary of the Treasury is authorized 

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1 ment so as to bring the carbon border fee adjust2 ment into conformance with international law. 

3 (2) INTERNATIONAL NEGOTIATIONS.—The Con4 gress finds the international mitigation of green5 house gas emissions to be of national importance. 

6 Therefore, the Congress encourages the Secretary of 

7 State, or the Secretary’s designee, to commence and 

8 complete negotiations with other nations with the 

9 goal of forming treaties, environmental agreements, 

10 accords, partnerships or any other instrument that 

11 effectively reduces global greenhouse gas emissions 

12 to 10 percent of 2016 levels by 2050 and which re13 spect the principle of common but differentiated re14 sponsibilities and respective capabilities. 

15 (3) SUSPENSION OF THE CARBON BORDER FEE

16 ADJUSTMENT.—Any part of the carbon border fee 

17 adjustment shall be suspended, in whole or in 

18 part,— 

19 (A) by treaty or other international agree20 ment which includes provisions for the suspen21 sion of the carbon border fee adjustment, in 

22 whole or in part, with any party signatory to 

23 the treaty or other international agreement, or 

24 (B) by a finding of the Secretary that a ju25 risdiction of importation has implemented poliVerDate Sep 11 2014 22:19 Feb 05, 2019 Jkt 089200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\H763.IH H763

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1 cies which, in the case of high emitting coun2 tries, reduce greenhouse gas emissions at a rate 

3 at least equivalent to United States greenhouse 

4 gas emission reductions, or, in the case of low 

5 emitting countries, prevent the increase in 

6 greenhouse gas emissions. 

7 Any such finding shall be reviewed at least every 3 

8 years and amended or revoked as required. 

9 SEC. 4. ESTABLISHMENT OF THE CARBON DIVIDEND TRUST 

10 FUND. 

11 (a) IN GENERAL.—Subchapter A of chapter 98 of the 

12 Internal Revenue Code of 1986 is amended by adding at 

13 the end the following: 

14 ‘‘SEC. 9512. CARBON DIVIDEND TRUST FUND. 

15 ‘‘(a) ESTABLISHMENT AND FUNDING.—There is 

16 hereby established in the Treasury of the United States 

17 a trust fund to be known as the ‘Carbon Dividend Trust 

18 Fund’, consisting of such amounts as may be appropriated 

19 to such trust fund as provided for in this section. 

20 ‘‘(b) TRANSFERS TO THE CARBON DIVIDEND TRUST

21 FUND.—There is hereby appropriated to the Carbon Divi22 dend Trust Fund amounts equal to the fees received into 

23 the Treasury less any amounts refunded or paid under 

24 section 9902(d) or 9906 of chapter 101 for each month. 


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1 ‘‘(c) EXPENDITURES.—Amounts in the trust fund 

2 shall be available for the following purposes: 

3 ‘‘(1) ADMINISTRATIVE EXPENSES.—So much of 

4 the expenses necessary to administer the Carbon 

5 Dividend Trust Fund for each year, as does not ex6 ceed— 

7 ‘‘(A) in the case of the first 5 calendar 

8 years ending after the date of the enactment of 

9 this section, the administrative expenses for any 

10 year may not exceed 8 percent of amounts ap11 propriated to the Carbon Dividend Trust Fund 

12 during such year, and 

13 ‘‘(B) in the case of any calendar year 

14 thereafter, 2 percent of the 5-year rolling aver15 age of the amounts appropriated to the Carbon 

16 Dividend Trust Fund, and 

17 ‘‘(2) OTHER ADMINISTRATIVE EXPENSES.—So 

18 much of the expenses as are necessary to administer 

19 chapter 101 for any year as does not to exceed 0.60 

20 percent of the amounts appropriated to the Carbon 

21 Dividend Trust Fund for the previous year, and fur22 ther limited as follows: 

23 ‘‘(A) The Department of the Treasury. 

24 ‘‘(B) The Social Security Administration. 


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1 ‘‘(C) The Environmental Protection Agen2 cy. 

3 ‘‘(D) Department of State. 

4 ‘‘(3) CARBON DIVIDEND PAYMENTS.— 

5 ‘‘(A) IN GENERAL.—From the amounts in 

6 the Carbon Dividend Trust Fund made avail7 able under paragraphs (1) and (2) of this sub8 section for any year, the Secretary shall for 

9 each month beginning more than 270 days after 

10 the date of the enactment of the Energy Inno11 vation and Carbon Dividend Act of 2019, make 

12 carbon dividend payments to each eligible indi13 vidual. 

14 ‘‘(B) PRO-RATA SHARE.—A carbon divi15 dend payment is one pro-rata share for each 

16 adult, and half a pro-rata share for each child 

17 under 19 years old, of amounts available for the 

18 month in the Carbon Dividend Trust Fund. 

19 ‘‘(C) ELIGIBLE INDIVIDUAL.—The term 

20 ‘eligible individual’ means, with respect to any 

21 month, any natural living person who has a 

22 valid Social Security number or taxpayer identi23 fication number and is a citizen or lawful resi24 dent of the United States (other than any indi25 vidual who is a citizen of any possession of the 


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1 United States and whose bona fide residence is 

2 outside of the United States). The Secretary is 

3 authorized to verify an individual’s eligibility to 

4 receive a carbon dividend payment. 

5 ‘‘(D) FEE TREATMENT OF PAYMENTS.— 

6 Amounts paid under this subsection shall be in7 cludible in gross income. 

8 ‘‘(E) FEDERAL PROGRAMS AND FEDERAL

9 ASSISTED PROGRAMS.—The carbon dividend 

10 amount received by any individual shall not be 

11 taken into account as income and shall not be 

12 taken into account as resources for purposes of 

13 determining the eligibility of such individual or 

14 any other individual for benefits or assistance, 

15 or the amount or extent of benefits or assist16 ance, under any Federal program or under any 

17 State or local program financed in whole or in 

18 part with Federal funds. 

19 ‘‘(F) ADVANCE PAYMENT.—The Secretary 

20 shall transfer to the Carbon Dividend Trust 

21 Fund such amounts as are necessary for the 

22 disbursement of an advanced carbon dividend to 

23 all eligible individuals as follows: 

24 ‘‘(i) An advanced carbon dividend 

25 shall be the same as the anticipated first 


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1 carbon dividend required to be distributed 

2 under subparagraph (A) and shall be dis3 tributed the month prior to the first collec4 tion of the carbon fee. 

5 ‘‘(ii) Total amounts disbursed as ad6 vanced carbon dividends shall be deducted 

7 from the carbon dividends on a pro-rata 

8 basis over the first 3 years after the dis9 bursement of the first carbon dividends. 

10 ‘‘(d) ADMINISTRATIVE AUTHORITY.—The Secretary 

11 shall promulgate rules, guidance, and regulations useful 

12 and necessary to implement the Carbon Dividend Trust 

13 Fund.’’. 

14 (b) CLERICAL AMENDMENT.—The table of sections 

15 for subchapter A of chapter 98 of such Code is amended 

16 by adding at the end the following new item: 

‘‘Sec. 9512. Carbon Dividend Trust Fund.’’. 

17 SEC. 5. LIMITED DISCLOSURE OF INFORMATION. 

18 Section 6103(l) of the Internal Revenue Code of 1986 

19 is amended by adding at the end the following new para20 graphs: 

21 ‘‘(23) LIMITED DISCLOSURE OF IDENTITY IN22 FORMATION RELATING TO CARBON DIVIDEND PAY23 MENTS.— 

24 ‘‘(A) DEPARTMENT OF TREASURY.—Indi25 vidual identity information shall, without writVerDate Sep 11 2014 22:19 Feb 05, 2019 Jkt 089200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\H763.IH H763

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1 ten request, be open to inspection by or disclo2 sure to officers and employees of the Depart3 ment of the Treasury whose official duties re4 quire such inspection or disclosure for purposes 

5 of administering section 9512 (relating the Car6 bon Dividend Trust Fund). 

7 ‘‘(B) COMMISSIONER OF SOCIAL SECU8 RITY.—The Commissioner of Social Security 

9 shall, on written request, disclose to officers 

10 and employees of the Department of the Treas11 ury individual identity information which has 

12 been disclosed to the Social Security Adminis13 tration as is necessary to administer section 

14 9512. 

15 ‘‘(C) RESTRICTION ON DISCLOSURE.—In16 formation disclosed under this paragraph shall 

17 be disclosed only for purposes of, and to the ex18 tent necessary in, carrying out section 9512.’’. 

19 SEC. 6. NATIONAL ACADEMY OF SCIENCES REVIEW OF CAR20 BON FEE AND EMISSIONS REDUCTION 

21 SCHEDULE. 

22 (a) IN GENERAL.—Not later than 10 years after the 

23 date of the enactment of this Act, the Secretary of Energy 

24 shall enter into an agreement with the National Academy 

25 of Sciences to prepare a report relating to the carbon fee 


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1 imposed by section 9902 of the Internal Revenue Code of 

2 1986 and the emissions reductions schedule established 

3 under section 9903 of such Code. 

4 (b) REPORT REQUIREMENTS.—Such report shall— 

5 (1) assess the efficiency and effectiveness of the 

6 carbon fee in achieving the emissions reduction tar7 gets set forth in section 9903 of such Code; 

8 (2) describe and make recommendations on 

9 whether the carbon fee rate and annual increases 

10 prescribed by section 9902(c) of such Code should 

11 be adjusted in order to optimize the efficiency and 

12 effectiveness of this Act in achieving the emissions 

13 reduction targets set forth in section 9903 of such 

14 Code; 

15 (3) describe the potential of the carbon fee to 

16 achieve future emissions targets set forth in section 

17 9903(a) of such Code through the year 2050; 

18 (4) describe and evaluate the effectiveness of 

19 the carbon fee in reducing emissions from key sec20 tors of the economy, including sectors of the econ21 omy that have decreased their carbon emissions, sec22 tors of the economy that have increased their carbon 

23 emissions, and sectors of the economy in which car24 bon emissions have not changed; 


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1 (5) make findings and recommendations to 

2 Federal departments and agencies and to Congress 

3 on actions that could be taken to reduce carbon 

4 emissions in the sectors of the economy in which 

5 carbon emissions have not decreased; 

6 (6) make findings and recommendations on ad7 justing regulations enacted under the Clean Air Act 

8 and other Federal laws that affect economic sectors 

9 achieving the emissions reduction targets set forth in 

10 section 9903 of such Code; and 

11 (7) provide an assessment of any other factors 

12 determined to be material to the program’s effi13 ciency and effectiveness in achieving the goals set 

14 forth in this act. 

15 (c) REPORT MADE PUBLICLY AVAILABLE.—Not later 

16 than 10 years after the date of the enactment of this Act, 

17 the Secretary of Energy shall submit to Congress the re18 port required under subsection (a). Such report shall be 

19 made electronically available to the public and open to 

20 public comment for at least 60 days before the final sub21 mission to Congress. 

22 SEC. 7. IMPACT OF CARBON FEE ON BIOMASS USE AND 

23 CARBON SINKS. 

24 (a) STUDY OF BIOMASS.—The Secretary of Energy 

25 shall enter into an agreement with the National Academy 


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1 of Sciences and the Administrator of the Environmental 

2 Protection Agency to conduct a study, make recommenda3 tions, and submit a report regarding the impact of the 

4 carbon fee on the use of biomass as an energy source and 

5 the resulting impacts on carbon sinks and biodiversity. 

6 (b) STUDY REQUIREMENTS.—The study conducted 

7 under subsection (a) by the National Academy of Sciences 

8 shall include analysis, documentation, and determinations 

9 on— 

10 (1) the carbon fee and its impact on the use of 

11 biomass as an energy source and greenhouse gas 

12 emissions from the use of biomass as an energy 

13 source; 

14 (2) the impacts of the use of biomass as an en15 ergy source on carbon sinks and biodiversity; and 

16 (3) the various types of biomass that are being 

17 used as an energy source. 

18 (c) RECOMMENDATIONS.—Based on the findings and 

19 conclusions of the study, the National Academy of 

20 Sciences shall make recommendations to Federal depart21 ments and agencies and to Congress. The recommenda22 tions shall include any actions that should be taken to 

23 mitigate impacts of the carbon fee on— 

24 (1) increasing greenhouse gas emissions from 

25 the use of biomass as an energy source; and 


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1 (2) degradation of carbon sinks and biodiversity 

2 relating to the use of biomass as an energy source. 

3 (d) REPORT.—The National Academy of Sciences 

4 shall prepare a report that includes any findings and rec5 ommendations made pursuant to this section and, not 

6 later than 18 months after the date of the enactment of 

7 this Act, make such report electronically available to the 

8 public. 

9 SEC. 8. AMENDMENTS TO THE CLEAN AIR ACT. 

10 (a) IN GENERAL.—Title III of the Clean Air Act (42 

11 U.S.C. 7601) is amended by adding at the end the fol12 lowing: 

13 ‘‘SEC. 330. SUSPENSION OF REGULATION OF FUELS AND 

14 EMISSIONS BASED ON GREENHOUSE GAS EF15 FECTS. 

16 ‘‘(a) FUELS.—Unless specifically authorized in sec17 tion 202, 211, 213, or 231 or this section, if a carbon 

18 fee is imposed by section 9902 or 9908 of the Internal 

19 Revenue Code of 1986 with respect to a covered fuel, the 

20 Administrator shall not enforce any rule limiting the emis21 sion of greenhouse gases from the combustion of that fuel 

22 under this Act (or impose any requirement on any State 

23 to limit such emission) on the basis of the emission’s 

24 greenhouse gas effects. 


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1 ‘‘(b) EMISSIONS.—Unless specifically authorized in 

2 section 202, 211, 213, or 231 or this section, if a fee is 

3 imposed by section 9904 of the Internal Revenue Code of 

4 1986 with respect to a fluorinated greenhouse gas, the Ad5 ministrator shall not enforce any rule limiting such gas 

6 under this Act (or impose any requirement on any State 

7 to limit such gas) on the basis of the greenhouse gas ef8 fects of such gas. 

9 ‘‘(c) AUTHORIZED REGULATION.—Notwithstanding 

10 subsections (a) and (b), nothing in this section limits the 

11 Administrator’s authority pursuant to any other provision 

12 of this Act— 

13 ‘‘(1) to limit the emission of any greenhouse 

14 gas because of any adverse impact on health or wel15 fare other than its greenhouse gas effects; 

16 ‘‘(2) in limiting emissions as described in para17 graph (1), to consider the collateral benefits of lim18 iting the emissions because of greenhouse gas ef19 fects; 

20 ‘‘(3) to limit the emission of black carbon or 

21 any other pollutant that is not a greenhouse gas 

22 that the Administrator determines by rule has heat23 trapping properties; or 


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1 ‘‘(4) to take any action with respect to any 

2 greenhouse gas other than limiting its emission, in3 cluding— 

4 ‘‘(A) monitoring, reporting, and record5 keeping requirements; 

6 ‘‘(B) conducting or supporting investiga7 tions; and 

8 ‘‘(C) information collection. 

9 ‘‘(d) EXCEPTION FOR CERTAIN GREENHOUSE GAS

10 EMISSIONS.—Notwithstanding subsections (a) and (b), 

11 nothing in this section limits the Administrator’s authority 

12 to regulate greenhouse gas emissions from— 

13 ‘‘(1) sources that— 

14 ‘‘(A) are subject to subpart OOOO or 

15 OOOOa of part 60 of title 40, Code of Federal 

16 Regulations, as in effect or January 1, 2020; or 

17 ‘‘(B) would be subject to such subpart 

18 OOOO or subpart OOOOa if such subpart ap19 plied regardless of the date on which construc20 tion, modification, or reconstruction of the 

21 source involved commenced; or 

22 ‘‘(2) POTW Treatment Plants (as defined in 

23 section 403.3(r) of title 40, Code of Federal Regula24 tions). 

25 ‘‘(e) SUSPENSION EXPIRATION.— 


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1 ‘‘(1) DETERMINATION.—The Administrator 

2 shall make a determination by March 30, 2030, and 

3 no less than once every five years thereafter, based 

4 on the determination required by section 9903(b) of 

5 the Internal Revenue Code of 1986, as to whether 

6 cumulative greenhouse gas emissions from covered 

7 fuels subject to taxation under section 9902 of such 

8 Code during the period from calendar year 2022 

9 through the calendar year preceding the determina10 tion exceed the cumulative emissions for that period 

11 that would have occurred if the emission reduction 

12 targets in section 9903(a)(2) of such Code were met. 

13 ‘‘(2) CONSEQUENCE OF CUMULATIVE EMIS14 SIONS EXCEEDANCE.—If the Administrator deter15 mines under paragraph (1) that cumulative green16 house gas emissions from covered fuels subject to 

17 tax under section 9902 of the Internal Revenue 

18 Code of 1986 exceed the cumulative emissions for 

19 the period covered by the determination that would 

20 have occurred if the emission reduction targets in 

21 section 9903(a)(2) of such Code were met, then the 

22 prohibitions in subsection (a) of this section, and in 

23 section 211(c)(5) of this Act, shall cease to apply. 

24 ‘‘(f) ASSURING ENVIRONMENTAL INTEGRITY.— 


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1 ‘‘(1) AUTHORITY.—If the Administrator deter2 mines pursuant to subsection (e)(1) of this section 

3 that the emission reduction targets in section 9903 

4 (a)(2) of the Internal Revenue Code of 1986 are not 

5 met— 

6 ‘‘(A) subsections (a) and (b) shall cease to 

7 apply; and 

8 ‘‘(B) the Administrator shall— 

9 ‘‘(i) issue such regulations as the Ad10 ministrator deems necessary to bring 

11 greenhouse gas emissions from covered 

12 fuels subject to taxation under section 

13 9902 of the Internal Revenue Code of 

14 1986 to levels that are at or below the 

15 emission reductions targets in section 

16 9903(a)(2) of such Code; and 

17 ‘‘(ii) require in such regulations that 

18 additional reductions in greenhouse gas 

19 emissions are achieved to fully compensate 

20 for any amount by which greenhouse gas 

21 emissions from covered fuels subject to 

22 taxation under section 9902 of such Code 

23 have exceeded the targets in section 

24 9903(a)(2) of such Code. 


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1 ‘‘(2) DEADLINE FOR FINALIZING REGULA2 TIONS.—The Administrator shall finalize any regula3 tions required by paragraph (1) not later than two 

4 years after the Administrator makes the relevant de5 termination pursuant to such paragraph. 

6 ‘‘(3) ACHIEVEMENT OF ADDITIONAL REDUC7 TIONS.—Regulations issued pursuant to paragraph 

8 (1) shall ensure that any additional reductions re9 quired by paragraph (1)(B)(ii) are fully achieved by 

10 no later than eight years after the Administrator 

11 makes the determination pursuant to subsection 

12 (e)(1) described in paragraph (1). 

13 ‘‘(g) DEFINITIONS.—In this section, the terms 

14 ‘greenhouse gas’ and ‘greenhouse gas effects’ have the 

15 meanings given to those terms in section 9901 of the In16 ternal Revenue Code of 1986.’’. 

17 (b) NEW MOTOR VEHICLES AND NEW MOTOR VEHI18 CLE ENGINES.—Section 202(b) of the Clean Air Act (42 

19 U.S.C. 7521(b)) is amended— 

20 (1) by redesignating the second paragraph (3) 

21 (as redesignated by section 230(4)(C) of Public Law 

22 101–549 (104 Stat. 2529)) as paragraph (4); and 

23 (2) by adding at the end the following: 

24 ‘‘(5) Notwithstanding subsections (a) and (b) of 

25 section 330, the Administrator may— 


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1 ‘‘(A) limit the emission of any greenhouse 

2 gas (as defined in section 9901 of the Internal 

3 Revenue Code of 1986) on the basis of the 

4 emission’s greenhouse gas effects (as defined in 

5 section 9901 of the Internal Revenue Code of 

6 1986) from any class or classes of new motor 

7 vehicles or new motor vehicle engines subject to 

8 regulation under subsection (a)(1); and 

9 ‘‘(B) grant a waiver under section 

10 209(b)(1) for standards for the control of 

11 greenhouse gas emissions.’’. 

12 (c) FUELS.—Section 211(c) of the Clean Air Act (42 

13 U.S.C. 7545(c)) is amended by adding at the end the fol14 lowing new paragraph: 

15 ‘‘(5) The Administrator shall not, pursuant to this 

16 subsection, impose on any manufacturer or processor of 

17 fuel any requirement for the purpose of reducing the emis18 sion of any greenhouse gas (as defined in section 9901 

19 of the Internal Revenue Code of 1986) produced by com20 bustion of the fuel on the basis of the emission’s green21 house gas effects (as defined in section 9901 of the Inter22 nal Revenue Code of 1986).’’. 

23 (d) NONROAD ENGINES AND VEHICLES EMISSIONS

24 STANDARDS.—Section 213 of the Clean Air Act (42 


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1 U.S.C. 7547) is amended by adding at the end the fol2 lowing: 

3 ‘‘(e) GREENHOUSE GAS EMISSIONS.—Notwith4 standing section 330(a), the Administrator may limit the 

5 emission of any greenhouse gas (as defined in section 

6 9901 of the Internal Revenue Code of 1986) on the basis 

7 of the emission’s greenhouse gas effects (as defined in sec8 tion 9901 of the Internal Revenue Code of 1986) from 

9 any nonroad engines and nonroad vehicles subject to regu10 lation under this section.’’. 

11 (e) AIRCRAFT EMISSION STANDARDS.—Section 231 

12 of the Clean Air Act (42 U.S.C. 7571) is amended by add13 ing at the end the following new subsection: 

14 ‘‘(d) Notwithstanding subsections (a) and (b) of sec15 tion 330, the Administrator may limit the emission of any 

16 greenhouse gas (as defined in section 9901 of the Internal 

17 Revenue Code of 1986) on the basis of the emission’s 

18 greenhouse gas effects (as defined in section 9901 of the 

19 Internal Revenue Code of 1986) from any class or classes 

20 of aircraft engines, so long as any such limitation is not 

21 more stringent than the standards adopted by the Inter22 national Civil Aviation Organization.’’. 

23 SEC. 9. EFFECTIVE DATE. 

24 The amendments made by this Act shall take effect 

25 on the date of the enactment of this Act, except the carbon 


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1 fee under section 9902 of the Internal Revenue Code of 

2 1986 shall apply to uses, sales, or transfers more than 

3 270 days after the date of the enactment of this Act. 

4 SEC. 10. PRINCIPLE OF INTERPRETATION. 

5 In the case of ambiguity, the texts of this statute and 

6 its amending texts shall be interpreted so as to allow for 

7 the most effective abatement of greenhouse gas emissions. 

8 SEC. 11. NO PREEMPTION OF STATE LAW. 

9 Nothing in this legislation shall preempt or super10 sede, or be interpreted to preempt or supersede, any State 

11 law or regulation. 

Æ 


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