I 

116TH CONGRESS 

2D SESSION H. R. 8175 

To amend the Internal Revenue Code of 1986 to impose a tax on fossil 

fuels and to use the revenues for economic benefit. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 4, 2020 

Mr. MCNERNEY introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Education and Labor, Science, Space, and Technology, Energy and Commerce, and Transportation and Infrastructure, 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 impose 

a tax on fossil fuels and to use the revenues for economic 

benefit. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Consumers Rebate to 

5 ban Emissions and Boost AlTernative Energy Act’’ or the 

6 ‘‘Consumers REBATE Act’’. 


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1 SEC. 2. EXCISE TAX ON CARBON DIOXIDE CONTENT OF 

2 COAL, OIL, AND NATURAL GAS. 

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

4 1986 is amended by adding at the end the following: 

5 ‘‘Subtitle L—Carbon Dioxide Con6 tent of Coal, Oil, and Natural 

7 Gas 

‘‘Sec. 9901. Imposition of tax. 

‘‘Sec. 9902. Carbon equivalency fee. 

‘‘Sec. 9903. Definitions. 

‘‘Sec. 9904. Special rules. 

8 ‘‘SEC. 9901. IMPOSITION OF TAX. 

9 ‘‘(a) IN GENERAL.—There is hereby imposed a tax 

10 on producing at the wellhead or mine in the United States, 

11 or importing, a taxable carbon substance. 

12 ‘‘(b) RATE OF TAX.— 

13 ‘‘(1) IN GENERAL.—The tax imposed under 

14 subsection (a) shall be the applicable amount per 

15 metric ton of carbon dioxide content of the life-cycle 

16 emissions from the taxable carbon substance. 

17 ‘‘(2) APPLICABLE AMOUNT.—For purposes of 

18 paragraph (1)— 

19 ‘‘(A) IN GENERAL.—For calendar year 

20 2021, the term ‘applicable amount’ means $25. 

21 ‘‘(B) ANNUAL ADJUSTMENTS GEN22 ERALLY.—In the case of any taxable year be23 ginning in a calendar year after 2021, the dolVerDate Sep 11 2014 04:28 Sep 07, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8175.IH H8175

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1 lar amount in effect under subparagraph (A) 

2 for the preceding calendar shall be increased by 

3 $10. 

4 ‘‘(3) ZERO RATE IF EMISSION REDUCTION

5 BENCHMARK ATTAINED.— 

6 ‘‘(A) IN GENERAL.—If the Administrator 

7 determines and specifies in a report issued 

8 under subsection (c)(3)(A) in the year imme9 diately preceding a year specified in subsection 

10 (c)(1)(A) that the emissions reduction bench11 mark for that specified year will be met or ex12 ceeded, then for that specified year and the suc13 ceeding 4 calendar years— 

14 ‘‘(i) paragraph (2) shall not apply, 

15 and 

16 ‘‘(ii) the applicable amount shall be 

17 zero. 

18 ‘‘(B) REINSTATEMENT.— 

19 ‘‘(i) IN GENERAL.—Except as pro20 vided in clause (ii), for any calendar year 

21 after a period referred to in subparagraph 

22 (A), paragraph (2) shall be applied and the 

23 applicable amount for the first such cal24 endar year shall be the dollar amount in 


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1 effect for the calendar year preceding the 

2 beginning of such period. 

3 ‘‘(ii) EXCEPTION.—Clause (i) shall 

4 not apply to a calendar year if, with re5 spect to that calendar year, a determina6 tion described in subparagraph (A) applies 

7 to that calendar year. 

8 ‘‘(c) EMISSIONS REDUCTIONS BENCHMARKS.—For 

9 purposes of this section— 

10 ‘‘(1) IN GENERAL.—The emissions reduction 

11 benchmarks are as follows: 

12 ‘‘(A) 30 percent below the emissions 

13 benchmark by 2025. 

14 ‘‘(B) 40 percent below the emissions 

15 benchmark by 2030. 

16 ‘‘(C) 50 percent below the emissions 

17 benchmark by 2035. 

18 ‘‘(D) 70 percent below the emissions 

19 benchmark by 2045. 

20 ‘‘(E) 80 percent below the emissions 

21 benchmark by 2050. 

22 ‘‘(2) EMISSIONS BENCHMARK.—The emissions 

23 benchmark is the 2005 level of life-cycle emissions 

24 from the taxable carbon substances, as determined 

25 by the Administrator. 


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1 ‘‘(3) REPORTS.— 

2 ‘‘(A) EMISSIONS REDUCTIONS TARGET RE3 PORT.—Not later than 2 years after the date of 

4 enactment of the Consumers Rebate to ban 

5 Emissions and Boost AlTernative Energy Act, 

6 and every 2 years thereafter, the Administrator 

7 shall issue an emissions reduction benchmarks 

8 report. The report shall include, in detail, the 

9 emission reductions resulting from the imposi10 tion of tax under this section and the expected 

11 trajectory of emissions reductions. 

12 ‘‘(B) 5-YEAR REPORT.—The Administrator 

13 shall, after consultation with other appropriate 

14 Federal and State agencies and non-Federal 

15 stakeholders, issue a report every 5 years on 

16 the effects of the carbon tax established under 

17 this subtitle, including energy market condi18 tions, impacts to consumers, impacts to the en19 vironment, actual emission reductions, and reli20 ability and resiliency of the electric grid. 

21 ‘‘(d) BY WHOM PAID.—The tax imposed by sub22 section (a) shall be paid by the producer, miner, or im23 porter of the taxable carbon substance. 

24 ‘‘(e) REGULATIONS.—Not later than 2 years after the 

25 date of enactment of the Consumers Rebate to ban EmisVerDate Sep 11 2014 04:28 Sep 07, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8175.IH H8175

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1 sions and Boost AlTernative Energy Act, the Secretary 

2 shall issue such regulations as may be necessary or appro3 priate to carry out this subtitle. 

4 ‘‘SEC. 9902. CARBON EQUIVALENCY FEE. 

5 ‘‘(a) PURPOSE.—The purpose of this section is to en6 sure the environmental effectiveness of this subtitle. 

7 ‘‘(b) IMPORTS.—The Secretary, in consultation with 

8 the Secretary of Energy, the Administrator, and the Com9 missioner of the U.S. Customs and Border Protection, 

10 shall impose carbon equivalency fees on imports of goods 

11 containing or produced using a taxable carbon substance. 

12 The amount of the carbon equivalency fee with respect to 

13 the import of any good shall be equal to the cost that do14 mestic producers of a comparable good incur as a result 

15 of— 

16 ‘‘(1) the tax imposed under section 9901, and 

17 ‘‘(2) carbon equivalency fees imposed under this 

18 section on any goods used in the production of such 

19 good. 

20 ‘‘(c) COLLECTION.—The fees imposed under this sec21 tion shall be collected by the Commissioner of the U.S. 

22 Customs and Border Protection. 

23 ‘‘(d) EXPIRATION.—This section shall cease to have 

24 effect at such time as and to the extent that— 


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1 ‘‘(1) an international agreement requiring coun2 tries that emit carbon dioxide or produce goods con3 taining or using taxable carbon substances to adopt 

4 equivalent measures comes into effect, or 

5 ‘‘(2) the country of export has implemented 

6 equivalent measures, as determined by the Sec7 retary, in consultation with the Secretary of State. 

8 ‘‘SEC. 9903. DEFINITIONS. 

9 ‘‘For purposes of this subtitle— 

10 ‘‘(1) TAXABLE CARBON SUBSTANCE.—The term 

11 ‘taxable carbon substance’ means— 

12 ‘‘(A) coal, 

13 ‘‘(B) oil, and 

14 ‘‘(C) natural gas. 

15 ‘‘(2) COAL.—The term ‘coal’ includes lignite, 

16 anthracite, bituminous, subbituminous, peat or other 

17 forms of what is commonly referred to as coal pro18 duced from a mine. 

19 ‘‘(3) OIL.—The term ‘oil’ includes crude oil 

20 condensates, natural gasoline, shale oil, any bitumen 

21 or bituminous mixture, any oil derived from a bitu22 men or bituminous mixture, and any oil derived 

23 from kerogen-bearing sources. 


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1 ‘‘(4) NATURAL GAS.—The term ‘natural gas’ 

2 means either natural gas unmixed, or any mixture of 

3 natural and artificial gas. 

4 ‘‘(5) LIFE-CYCLE EMISSIONS.—The term ‘life5 cycle emissions’ means total life-cycle emissions of 

6 carbon dioxide from a taxable carbon substance 

7 which shall be determined by the Administrator. 

8 ‘‘(6) ADMINISTRATOR.—The term ‘Adminis9 trator’ means the Administrator of the Environ10 mental Protection Agency. 

11 ‘‘(7) UNITED STATES.—The term ‘United 

12 States’ means the States, and territory or possession 

13 of the United States, and the District of Columbia. 

14 ‘‘SEC. 9904. SPECIAL RULES. 

15 ‘‘(a) EXPORT.—For purposes of this subtitle— 

16 ‘‘(1) IN GENERAL.—No tax shall be imposed 

17 under section 9901 on the production or mining of 

18 a taxable carbon substance which is intended for ex19 port, including the sale or resale by a purchaser to 

20 a second purchaser for export. 

21 ‘‘(2) PROOF OF EXPORT REQUIRED.—Rules 

22 similar to the rules of section 4221(b) shall apply for 

23 purposes of paragraph (1). 

24 ‘‘(3) CREDIT OR REFUND WHERE TAX PAID.— 


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1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (B), if— 

3 ‘‘(i) tax under section 9901 was paid 

4 with respect to any taxable carbon sub5 stance, and 

6 ‘‘(ii)(I) such substance was exported 

7 by any person, or 

8 ‘‘(II) such substance was used as a 

9 material in the manufacture or production 

10 of a substance which was exported by any 

11 person and which, at the time of export, 

12 was a taxable carbon substance (as defined 

13 in section 9902(1)), 

14 credit or refund (without interest) of such tax 

15 shall be allowed or made to the person who paid 

16 such tax. 

17 ‘‘(B) CONDITION TO ALLOWANCE.—No 

18 credit or refund shall be allowed or made under 

19 subparagraph (A) unless the person who paid 

20 the tax establishes that he— 

21 ‘‘(i) has repaid or agreed to repay the 

22 amount of the tax to the person who ex23 ported the taxable chemical or taxable sub24 stance (as so defined), or 


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1 ‘‘(ii) has obtained the written consent 

2 of such exporter to the allowance of the 

3 credit or the making of the refund. 

4 ‘‘(4) REFUNDS DIRECTLY TO EXPORTER.—The 

5 Secretary shall provide, in regulations, the cir6 cumstances under which a credit or refund (without 

7 interest) of the tax under section 9901 shall be al8 lowed or made to the person who exported the tax9 able carbon substance, where— 

10 ‘‘(A) the person who paid the tax waives 

11 his claim to the amount of such credit or re12 fund, and 

13 ‘‘(B) the person exporting the taxable car14 bon substance provides such information as the 

15 Secretary may require in such regulations. 

16 ‘‘(5) REGULATIONS.—The Secretary shall pre17 scribe such regulations as may be necessary to carry 

18 out the purposes of this subsection.’’. 

19 (b) ESTABLISHMENT OF TRUST FUND.— 

20 (1) IN GENERAL.—Subchapter A of chapter 98 

21 of such Code (relating to trust fund code) is amend22 ed by adding at the end the following: 

23 ‘‘SEC. 9512. CARBON TRUST FUND. 

24 ‘‘(a) CREATION OF TRUST FUND.—There is estab25 lished in the Treasury of the United States a trust fund 


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1 to be known as the ‘Carbon Trust Fund’ (referred to in 

2 this section as the ‘Trust Fund’), consisting of such 

3 amounts as may be appropriated or credited to the Trust 

4 Fund as provided in this section or section 9602(b). 

5 ‘‘(b) TRANSFERS TO TRUST FUND.—There is hereby 

6 appropriated to the Trust Fund an amount equivalent to 

7 the amounts received in the Treasury pursuant to section 

8 9901. 

9 ‘‘(c) EXPENDITURES FROM TRUST FUND.— 

10 ‘‘(1) IN GENERAL.—From amounts in the 

11 Trust Fund at the beginning of a fiscal year, the fol12 lowing amounts shall be made available as follows: 

13 ‘‘(A) The amount necessary shall be paid 

14 into general receipts in the Treasury to offset 

15 a reduction in the rate of individual income tax 

16 by reason of the amendments made by section 

17 2(c) of the Consumers Rebate to ban Emissions 

18 and Boost AlTernative Energy Act. 

19 ‘‘(B) Of the amounts remaining available 

20 after the application of subparagraph (A), 20 

21 percent shall be available for the following: 

22 ‘‘(i) Worker transition assistance, with 

23 an emphasis on coal workers and coal com24 munities, and workforce development. 


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1 ‘‘(ii) Rural energy assistance and effi2 ciency improvements. 

3 ‘‘(iii) Technology neutral, energy-re4 lated research and development. 

5 ‘‘(iv) Air, rail, and marine transpor6 tation emissions reduction and efficiency 

7 programs. 

8 ‘‘(v) Electric grid and pipeline innova9 tions and improvements. 

10 ‘‘(vi) Increasing resiliency of water, 

11 transportation, energy, and other infra12 structure that are vulnerable to extreme 

13 weather and other effects of a changing cli14 mate. 

15 ‘‘(vii) Energy efficiency and conserva16 tion. 

17 ‘‘(C) The amounts remaining after the ap18 plication of subparagraphs (A) and (B) shall be 

19 made available for quarterly citizen rebates. 

20 ‘‘(2) CONSULTATION.—In determining the 

21 amount provided toward each category referred to in 

22 paragraph (1)(B), the Secretary shall consult with 

23 the Secretary of Energy, the Secretary of Labor, 

24 and any other relevant Federal agency prior to dis25 tributing money from the Trust Fund.’’. 


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1 (2) CLERICAL AMENDMENT.—The table of sec2 tions for subchapter A of chapter 98 of such Code 

3 is amended by adding at the end the following new 

4 item: 

‘‘Sec. 9512. Carbon trust fund.’’. 

5 (c) REDUCTION IN INDIVIDUAL INCOME TAX

6 RATES.— 

7 (1) IN GENERAL.—Section 1(j) of such Code is 

8 amended by redesignating paragraph (6) as para9 graph (7) and by inserting after paragraph (5) the 

10 following: 

11 ‘‘(6) REDUCTION IN INDIVIDUAL INCOME TAX

12 RATES.—In the case of taxable years beginning after 

13 December 31, 2021, the tables under paragraph (2) 

14 shall be applied— 

15 ‘‘(A) by substituting ‘9%’ for ‘10%’ each 

16 place it appears, 

17 ‘‘(B) by substituting ‘11%’ for ‘12%’ each 

18 place it appears, 

19 ‘‘(C) by substituting ‘21%’ for ‘22%’ each 

20 place it appears, and 

21 ‘‘(D) by substituting ‘23.5%’ for ‘24%’ 

22 each place it appears.’’. 

23 (2) COORDINATION AMONG PROVISIONS RELAT24 ING TO CHILDREN WITH UNEARNED INCOME.— 

25 Clauses (i)(II) and (III) of section 1(j)(4)(B) of 


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1 such Code are amended by striking ‘‘paragraph (3)’’ 

2 and inserting ‘‘paragraphs (3) and (6)’’. 

3 (d) QUARTERLY CITIZEN REBATES.— 

4 (1) QUARTERLY PAYMENTS TO ELIGIBLE DIVI5 DEND RECIPIENTS.— 

6 (A) IN GENERAL.—From amounts made 

7 available pursuant to section 9512(c)(1)(C) of 

8 the Internal Revenue Code of 1986, the Sec9 retary shall make payment each calendar quar10 ter to each eligible dividend recipient. 

11 (B) AMOUNT OF PAYMENT.—For purposes 

12 of subparagraph (A), the amount of each pay13 ment with respect to an eligible dividend recipi14 ent shall be the amount determined by the Sec15 retary by dividing— 

16 (i) for the years 2022 through 2030— 

17 (I) the total amount available 

18 under section 9512(c)(1)(C) of the In19 ternal Revenue Code of 1986 for the 

20 preceding calendar quarter, by 

21 (II) the total number of eligible 

22 dividend recipients for such preceding 

23 calendar quarter, and 

24 (ii) for year 2031 and subsequent 

25 years— 


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1 (I) the smaller of— 

2 (aa) the quarterly average of 

3 the total amount available under 

4 section 9512(c)(1)(C) of the In5 ternal Revenue Code of 1986 for 

6 the four quarters of 2030, and 

7 (bb) the total amount avail8 able under section 9512(c)(1)(C) 

9 of the Internal Revenue Code of 

10 1986 for the preceding calendar 

11 quarter, by 

12 (II) the total number of eligible 

13 dividend recipients for such preceding 

14 calendar quarter. 

15 (C) ELIGIBLE DIVIDEND RECIPIENT.—For 

16 purposes of this subsection, the term ‘‘eligible 

17 dividend recipient’’ means, with respect to any 

18 quarter, any individual with a valid social secu19 rity number (other than a nonresident undocu20 mented individual) who is lawfully present in 

21 the United States for such quarter, as deter22 mined and verified by the Secretary in consulta23 tion with any other Federal entity the Secretary 

24 determines appropriate. 


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1 (D) FUND.—The term ‘‘Fund’’ means the 

2 Carbon Trust Fund established by section 9512 

3 of the Internal Revenue Code of 1986 (as added 

4 by subsection (e)). 

5 (2) REGULATIONS.—The Secretary of the 

6 Treasury shall promulgate regulations governing the 

7 payment of funds under paragraph (1), including— 

8 (A) procedures for the identification and 

9 maintenance of an accurate list of eligible divi10 dend recipients, and 

11 (B) the use of electronic means for trans12 fers of funds, to the maximum extent prac13 ticable. 

14 (e) CLERICAL AMENDMENT.—The table of subtitles 

15 for the Internal Revenue Code of 1986 is amended by add16 ing at the end the following new item: 

‘‘Subtitle L. Carbon Dioxide Content of Coal, Oil, and Natural Gas.’’. 

17 (f) EFFECTIVE DATE.— 

18 (1) Except as provided by paragraph (2), the 

19 amendments made by this section shall take effect 

20 on January 1, 2022. 

21 (2) The amendments made by subsection (c) 

22 shall apply to taxable years beginning after Decem23 ber 31, 2021. 

Æ 


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