II 

115TH CONGRESS 

2D SESSION S. 2352 

To cap the emissions of greenhouse gases through a requirement to purchase 

carbon permits, to distribute the proceeds of such purchases to eligible 

individuals, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 29, 2018 

Mr. VAN HOLLEN introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To cap the emissions of greenhouse gases through a requirement to purchase carbon permits, to distribute the proceeds of such purchases to eligible individuals, and for 

other purposes. 

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 ‘‘Healthy Climate and 

5 Family Security Act of 2018’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 


dlhill on DSK3GLQ082PROD with BILLS
2 

•S 2352 IS

1 (1) Carbon dioxide and other greenhouse gas 

2 emissions continue to rise. In 2013, CO2 levels in 

3 the atmosphere reached 400 parts per million for the 

4 first time in human history. Ten of the world’s 

5 warmest years on record have occurred since 2000, 

6 and 2016 was the warmest year ever recorded. 

7 (2) The warming of our planet has led to more 

8 frequent, dangerous and expensive extreme weather 

9 events, including heat waves, storms, fires, droughts, 

10 floods and tornadoes. 

11 (3) More than 97 percent of climate scientists 

12 agree that our planet is warming, primarily because 

13 of the extraction and burning of fossil fuels. 

14 (4) The atmosphere is a common resource that 

15 belongs equally to all. 

16 (5) Stabilizing the climate can and must be 

17 done in a way that supports vibrant economic 

18 growth and a thriving middle class. 

19 (6) Legislation to address climate change and 

20 accelerate the transition to a clean energy economy 

21 must be fair, transparent and built to last. 


dlhill on DSK3GLQ082PROD with BILLS
3 

•S 2352 IS

1 SEC. 3. AUCTION OF CARBON PERMITS AND DISTRIBUTION 

2 OF HEALTHY CLIMATE DIVIDENDS. 

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

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

5 subtitle: 

6 ‘‘Subtitle L—Auction of Carbon 

7 Permits and Distribution of 

8 Healthy Climate Dividends 

‘‘Chapter 101. Cap and Dividend Program Rules. 

‘‘Chapter 102. Healthy Climate Dividends. 

‘‘Chapter 103. Border Adjustments. 

9 ‘‘CHAPTER 101—CAP AND DIVIDEND 

10 PROGRAM RULES 

‘‘Sec. 9901. Definitions. 

‘‘Sec. 9902. Carbon permits. 

‘‘Sec. 9903. Auctions. 

‘‘Sec. 9904. Compliance obligation. 

‘‘Sec. 9905. Penalty for noncompliance. 

‘‘Sec. 9906. Carbon capture and sequestration. 

‘‘Sec. 9907. Trading. 

‘‘Sec. 9908. Banking and borrowing. 

11 ‘‘SEC. 9901. DEFINITIONS. 

12 ‘‘For purposes of this subtitle: 

13 ‘‘(1) ADMINISTRATOR.—The term ‘Adminis14 trator’ means the Administrator of the Environ15 mental Protection Agency. 

16 ‘‘(2) CARBON PERMIT.—The term ‘carbon per17 mit’ means a carbon permit established by the Sec18 retary under section 9902(a). 


dlhill on DSK3GLQ082PROD with BILLS
4 

•S 2352 IS

1 ‘‘(3) COVERED ENTITY.—The term ‘covered en2 tity’ means— 

3 ‘‘(A) in the case of crude oil— 

4 ‘‘(i) a refinery operating in the United 

5 States which is designed to serve the pri6 mary purpose of processing liquid fuel 

7 from crude oil, and 

8 ‘‘(ii) any importer of any petroleum or 

9 petroleum product (not including crude oil) 

10 into the United States, 

11 ‘‘(B) in the case of coal— 

12 ‘‘(i) any coal mine operating in the 

13 United States, and 

14 ‘‘(ii) any importer of coal into the 

15 United States, and 

16 ‘‘(C) in the case of natural gas— 

17 ‘‘(i) any person required to submit a 

18 report to the Energy Information Agency 

19 on Form 176 by reason of delivering nat20 ural gas to an end user, and 

21 ‘‘(ii) any natural gas processor not de22 scribed in clause (i) with respect to sales of 

23 natural gas in the United States. 

24 ‘‘(4) COVERED FUEL.—The term ‘covered fuel’ 

25 means crude oil, natural gas, coal, or any other 


dlhill on DSK3GLQ082PROD with BILLS
5 

•S 2352 IS

1 product derived therefrom for use as a combustible 

2 fuel offered for sale in United States markets. 

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

4 crude oil condensates, natural gasoline, shale oil, any 

5 bitumen or bituminous mixture, any oil derived from 

6 a bitumen or bituminous mixture, and any oil de7 rived from kerogen-bearing sources. 

8 ‘‘(6) FAIR MARKET VALUE.—The term ‘fair 

9 market value’ means the average auction price for 

10 carbon permits during the 4 quarters immediately 

11 preceding a failure to surrender, when required 

12 under section 9904, the required number of carbon 

13 permits under such section. 

14 ‘‘(7) STATE.—The term ‘State’ means the sev15 eral States, the District of Columbia, the Common16 wealth of Puerto Rico, the United States Virgin Is17 lands, Guam, American Samoa, the Commonwealth 

18 of the Northern Mariana Islands, and any other 

19 commonwealth, territory, or possession of the United 

20 States. 

21 ‘‘(8) VINTAGE YEAR.—The term ‘vintage year’ 

22 means the calendar year for which a carbon permit 

23 is established under section 9902. 


dlhill on DSK3GLQ082PROD with BILLS
6 

•S 2352 IS

1 ‘‘SEC. 9902. CARBON PERMITS. 

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

3 with the Administrator, shall establish a separate quantity 

4 of carbon permits for calendar year 2019 and each cal5 endar year thereafter, as set forth under subsection (b). 

6 ‘‘(b) EMISSIONS REDUCTION SCHEDULE.— 

7 ‘‘(1) IN GENERAL.—The quantity of carbon 

8 permits established by the Secretary, in consultation 

9 with the Administrator, under subsection (a) for any 

10 calendar year before 2050 that is between the near11 est target years specified in paragraph (2) preceding 

12 and succeeding such calendar year shall be the quan13 tity of such permits that represents an equal, pro 

14 rata reduction from the preceding year to the suc15 ceeding year. 

16 ‘‘(2) TARGETS.— 

17 ‘‘(A) INITIAL TARGET.—The quantity of 

18 carbon permits established for 2019 shall be 

19 equal to 12.5 percent less than the number of 

20 metric tons of carbon dioxide emitted in the 

21 United States in 2005. 

22 ‘‘(B) DECADAL TARGETS.—The quantity 

23 of carbon permits established for— 

24 ‘‘(i) 2020 shall be equal to 20 percent 

25 less than the number of metric tons of carVerDate Sep 11 2014 00:11 Jan 30, 2018 Jkt 079200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2352.IS S2352

dlhill on DSK3GLQ082PROD with BILLS
7 

•S 2352 IS

1 bon dioxide emitted in the United States in 

2 2005, 

3 ‘‘(ii) 2025 shall be equal to 30 percent 

4 less than the number of metric tons of car5 bon dioxide emitted in the United States in 

6 2005, 

7 ‘‘(iii) 2030 shall be equal to 40 per8 cent less than the number of metric tons 

9 of carbon dioxide emitted in the United 

10 States in 2005, 

11 ‘‘(iv) 2035 shall be equal to 50 per12 cent less than the number of metric tons 

13 of carbon dioxide emitted in the United 

14 States in 2005, 

15 ‘‘(v) 2040 shall be equal to 60 percent 

16 less than the number of metric tons of car17 bon dioxide emitted in the United States in 

18 2005, 

19 ‘‘(vi) 2045 shall be equal to 70 per20 cent less than the number of metric tons 

21 of carbon dioxide emitted in the United 

22 States in 2005, and 

23 ‘‘(vii) 2050 shall be equal to 80 per24 cent less than the number of metric tons 


dlhill on DSK3GLQ082PROD with BILLS
8 

•S 2352 IS

1 of carbon dioxide emitted in the United 

2 States in 2005. 

3 ‘‘(3) REPORTS.— 

4 ‘‘(A) CALENDAR YEAR 2048.—In 2048 the 

5 Secretary, after consultation with the Adminis6 trator, will submit a report to Congress making 

7 recommendations concerning the program es8 tablished under this subtitle for years after 

9 2050, including the quantity of carbon permits 

10 to be established and any reductions that may 

11 be necessary to ensure a healthy climate. 

12 ‘‘(B) AVERTING CATASTROPHIC CLIMATIC

13 IMPACT.—The Secretary shall report to Con14 gress if the Secretary, after consultation with 

15 the Administrator, determines the emissions re16 ductions targets under this subsection should be 

17 revised in order to avert catastrophic climate 

18 impacts. Such report shall include rec19 ommended revisions to the existing emissions 

20 reduction schedule and the basis for those rec21 ommendations. 

22 ‘‘(c) IDENTIFICATION NUMBERS.—The Secretary 

23 shall assign to each carbon permit established under sub24 section (a) a unique identification number that includes 

25 the vintage year for that carbon permit. 


dlhill on DSK3GLQ082PROD with BILLS
9 

•S 2352 IS

1 ‘‘(d) LEGAL STATUS OF CARBON PERMITS.— 

2 ‘‘(1) IN GENERAL.—A carbon permit does not 

3 constitute a property right. 

4 ‘‘(2) TERMINATION OR LIMITATION.—Nothing 

5 in this subtitle or any other provision of law shall be 

6 construed to limit or alter the authority of the 

7 United States, including the Secretary acting pursu8 ant to statutory authority, to terminate or limit a 

9 carbon permit. 

10 ‘‘(3) OTHER PROVISIONS UNAFFECTED.—Noth11 ing in this subtitle relating to carbon permits issued 

12 under this section shall affect the application of any 

13 other provision of law to a covered entity (including 

14 the Clean Air Act), or the responsibility for a cov15 ered entity to comply with any such provision of law. 

16 Regional and State greenhouse gas initiatives are 

17 not preempted by this subtitle. 

18 ‘‘(e) REGULATIONS.—Not later than December 31, 

19 2018, the Secretary shall promulgate regulations to carry 

20 out the provisions of this subtitle. 

21 ‘‘SEC. 9903. AUCTIONS. 

22 ‘‘(a) PERIODIC AUCTIONS.—The Secretary shall con23 duct periodic public auctions of carbon permits established 

24 under section 9902(a). The Secretary shall conduct at 


dlhill on DSK3GLQ082PROD with BILLS
10 

•S 2352 IS

1 least 4 such auctions in each year for which carbon per2 mits are established. 

3 ‘‘(b) AUCTION RULES.—The Secretary shall— 

4 ‘‘(1) limit auction participation only to covered 

5 entities, 

6 ‘‘(2) establish a limit on the amount of carbon 

7 permits that can be purchased by a single entity at 

8 each auction and an aggregate limit on the total 

9 amount of permits that can be held by a single enti10 ty at any one time that— 

11 ‘‘(A) reflects anticipated sector and partici12 pant demand, 

13 ‘‘(B) prevents speculation, manipulation, 

14 or hoarding of permits, and 

15 ‘‘(C) does not interfere with normal mar16 ket competition, and 

17 ‘‘(3) have the authority to set a minimum per18 mit price at auction. 

19 ‘‘(c) UNSOLD PERMITS.—Any carbon permit unsold 

20 at auction may be offered at the next quarterly auction 

21 in the calendar year. Any carbon permit unsold after the 

22 last auction for a calendar year shall be transferred to the 

23 reserve established under section 9908. 


dlhill on DSK3GLQ082PROD with BILLS
11 

•S 2352 IS

1 ‘‘SEC. 9904. COMPLIANCE OBLIGATION. 

2 ‘‘(a) IN GENERAL.—Not later than April 1, 2019, 

3 and April 1 of each year thereafter, a covered entity shall 

4 surrender to the Secretary a quantity of carbon permits 

5 at least as great as the number of metric tons of carbon 

6 dioxide that the Secretary, in consultation with the Ad7 ministrator, determines would be emitted by the combus8 tion of covered fuels with respect to which the covered en9 tity made the first sale in United States markets during 

10 the previous calendar year. 

11 ‘‘(b) USE TREATED AS SALE.—For purposes of sub12 section (a), consumption for an emitting use by the cov13 ered entity of covered fuels produced by the covered entity 

14 shall be treated as a first sale. 

15 ‘‘(c) EXEMPTION.—A covered entity shall not have to 

16 surrender a carbon permit for the sale of a covered fuel 

17 consumed for a non-emitting use, as defined and verified 

18 by the Secretary in consultation with the Administrator, 

19 unless such covered fuel is sold to a person issued carbon 

20 permits under section 9906. 

21 ‘‘SEC. 9905. PENALTY FOR NONCOMPLIANCE. 

22 ‘‘(a) IN GENERAL.—Any covered entity that fails for 

23 any year to surrender, by the deadline described in section 

24 9904, one or more of the carbon permits due pursuant 

25 to such section shall be liable for payment to the Secretary 

26 of a penalty in the amount described in subsection (b). 


dlhill on DSK3GLQ082PROD with BILLS
12 

•S 2352 IS

1 ‘‘(b) AMOUNT.—The amount of a penalty required to 

2 be paid under subsection (a) shall be equal to the product 

3 obtained by multiplying— 

4 ‘‘(1) the number of carbon permits that the cov5 ered entity failed to surrender by the deadline, by 

6 ‘‘(2) 3 times the fair market value of carbon 

7 permits issued for emissions occurring in the cal8 endar year for which the carbon permits were due. 

9 ‘‘(c) TIMING.—A penalty required under this section 

10 shall be immediately due and payable to the Secretary, 

11 without demand, in accordance with regulations promul12 gated by the Secretary, which shall be issued not later 

13 than 1 year after the date of enactment of this subtitle. 

14 ‘‘(d) NO EFFECT ON LIABILITY.—A penalty due and 

15 payable by the covered entity under this section shall not 

16 diminish the liability of the covered entity for any fine, 

17 penalty, or assessment against the covered entity for the 

18 same violation under any other provision of law. 

19 ‘‘(e) PENALTY NOT DEDUCTIBLE.—No deduction 

20 shall be allowed under subtitle A for a penalty paid under 

21 this section. 

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

23 ‘‘(a) IN GENERAL.—The Secretary shall issue a car24 bon permit to any person who the Secretary, in consulta25 tion with the Administrator, determines has safely and 


dlhill on DSK3GLQ082PROD with BILLS
13 

•S 2352 IS

1 verifiably captured and sequestered carbon dioxide from 

2 the combustion of covered fuels in the United States. 

3 ‘‘(b) QUANTITY.—The quantity of each permit issued 

4 under subsection (a) shall be in the amount equivalent to 

5 the number of metric tons of carbon dioxide so captured 

6 and sequestered. 

7 ‘‘(c) COORDINATION.—The quantity of permits 

8 issued under this section shall be in addition to the quan9 tity of permits established under section 9902(a). 

10 ‘‘SEC. 9907. TRADING. 

11 ‘‘(a) PERMITTED TRANSACTIONS.—The lawful holder 

12 of a carbon permit may— 

13 ‘‘(1) hold the carbon permit, subject to the lim14 its established by the Secretary under section 

15 9903(b)(2), or 

16 ‘‘(2) sell, exchange, or transfer the carbon per17 mit to a covered entity consistent with the limits es18 tablished by the Secretary under section 9903(b)(2). 

19 ‘‘(b) EFFECTIVENESS OF CARBON PERMIT TRANS20 FERS.—No transfer of a carbon permit shall be effective 

21 until a written certification of the transfer, signed by a 

22 responsible official of the transferor, is received and re23 corded by the Secretary in accordance with regulations 

24 promulgated under section 9902(e). 


dlhill on DSK3GLQ082PROD with BILLS
14 

•S 2352 IS

1 ‘‘(c) CARBON PERMIT TRACKING SYSTEM.—The reg2 ulations promulgated under section 9902(e) shall include 

3 a system for issuing, recording, holding, and tracking car4 bon permits that shall specify all necessary procedures and 

5 requirements for an orderly and competitive functioning 

6 of the carbon permit system. Such regulations shall pro7 vide for appropriate publication of the information in the 

8 system on the Internet. 

9 ‘‘SEC. 9908. BANKING AND BORROWING. 

10 ‘‘(a) BANKING.—A carbon permit may be used to 

11 meet the compliance obligation requirements of section 

12 9904 for emissions in— 

13 ‘‘(1) the vintage year for the carbon permit, or 

14 ‘‘(2) any calendar year subsequent to the vin15 tage year for the carbon permit in accordance with 

16 subsection (b). 

17 ‘‘(b) RESERVE.—The Secretary shall establish a re18 serve for carbon permits. Carbon permits transferred into 

19 the reserve shall be available in the manner determined 

20 by the Secretary when the Secretary determines that price 

21 point for carbon permits determined under subsection (d) 

22 is met and additional carbon permit supply is needed to 

23 stabilize the auction price. Permits in the reserve shall be 

24 used on a first in, first out basis. 


dlhill on DSK3GLQ082PROD with BILLS
15 

•S 2352 IS

1 ‘‘(c) EXPIRATION.—A carbon permit shall not expire 

2 unless— 

3 ‘‘(1) it is surrendered to the Secretary under 

4 section 9904 or section 9907(a)(3), 

5 ‘‘(2) it has remained in the reserve for 5 years 

6 after being transferred into the reserve, or 

7 ‘‘(3) the Secretary determines by regulation 

8 that expiration is necessary to ensure the authen9 ticity and integrity of carbon permits or the carbon 

10 permit tracking system. 

11 ‘‘(d) BORROWING FUTURE VINTAGE YEAR CARBON

12 PERMITS.— 

13 ‘‘(1) IN GENERAL.—If the auction price for car14 bon permits increases by more than 50 percent 

15 above the average auction price for carbon permits 

16 during the preceding two years (or, if before the 

17 third year for which auctions are conducted, the av18 erage auction price for carbon permits during the 

19 preceding auctions), the Secretary shall auction as 

20 many additional carbon permits as are necessary to 

21 stabilize the auction price. 

22 ‘‘(2) SPECIAL RULES.— 

23 ‘‘(A) COORDINATION WITH RESERVE.—Ad24 ditional permits may not be auctioned under 

25 paragraph (1) until after all available permits 


dlhill on DSK3GLQ082PROD with BILLS
16 

•S 2352 IS

1 in the reserve for carbon permits established 

2 under subsection (b) have been used. 

3 ‘‘(B) REDUCTION IN VINTAGE YEAR PER4 MITS.—Any carbon permits made available 

5 under this subsection shall result in an equiva6 lent reduction in the aggregate amount of car7 bon permits made available in vintage years 

8 2030 through 2050 as set forth in section 

9 9902, and the Secretary shall reduce the num10 ber of carbon permits by an equal percentage in 

11 each of those vintage years. 

12 ‘‘CHAPTER 102—HEALTHY CLIMATE 

13 DIVIDENDS 

‘‘Sec. 9911. Healthy Climate Trust Fund. 

‘‘Sec. 9912. Healthy Climate Dividend Payments. 

‘‘Sec. 9913. Transparency. 

14 ‘‘SEC. 9911. HEALTHY CLIMATE TRUST FUND. 

15 ‘‘(a) ESTABLISHMENT.—There is established in the 

16 Treasury of the United States a trust fund to be known 

17 as the ‘Healthy Climate Trust Fund’, consisting of such 

18 amounts as may be appropriated to such trust fund as 

19 provided for in this section. 

20 ‘‘(b) TRANSFERS.— 

21 ‘‘(1) PROCEED AMOUNTS.—There are appro22 priated to the Healthy Climate Trust Fund amounts 

23 equivalent to funds received as proceeds under sec24 tion 9903. 


dlhill on DSK3GLQ082PROD with BILLS
17 

•S 2352 IS

1 ‘‘(2) PENALTY AMOUNTS.—There are appro2 priated to the Healthy Climate Trust Fund amounts 

3 equivalent to funds received as penalties under sec4 tion 9905. 

5 ‘‘(c) EXPENDITURES.— 

6 ‘‘(1) ADMINISTRATIVE EXPENSES.—Such 

7 amounts as may be necessary from the Healthy Cli8 mate Trust Fund shall be available to pay the ad9 ministrative expenses necessary to carry out this sec10 tion for each month, but not exceeding the amount 

11 of interest credited to the trust fund under section 

12 9602. 

13 ‘‘(2) HEALTHY CLIMATE DIVIDEND PAY14 MENTS.—Amounts in the Healthy Climate Trust 

15 Fund not used under paragraph (1) for any month 

16 shall be available for making Healthy Climate Divi17 dend Payments under section 9912. 

18 ‘‘SEC. 9912. HEALTHY CLIMATE DIVIDEND PAYMENTS. 

19 ‘‘(a) IN GENERAL.—For purposes of this section: 

20 ‘‘(1) HEALTHY CLIMATE DIVIDEND PAY21 MENT.—The term ‘Healthy Climate Dividend Pay22 ment’ means the individual pro-rata share, as deter23 mined by the Secretary, of amounts available for any 

24 quarter in the Healthy Climate Trust Fund under 

25 section 9911(c)(2). For purposes of the preceding 


dlhill on DSK3GLQ082PROD with BILLS
18 

•S 2352 IS

1 sentence, the amounts available for any quarter shall 

2 be the fraction of the total amount made available 

3 from an auction conducted under section 9903— 

4 ‘‘(A) the numerator of which is 1, and 

5 ‘‘(B) the denominator of which is the num6 ber of quarters in the period beginning with the 

7 quarter in which such auction is conducted and 

8 ending with the quarter before the quarter in 

9 which the next such auction is scheduled to be 

10 conducted. 

11 ‘‘(2) ELIGIBLE INDIVIDUAL.— 

12 ‘‘(A) IN GENERAL.—The term ‘eligible in13 dividual’ means, with respect to any quarter, 

14 any individual with a valid social security num15 ber (other than a nonresident alien individual) 

16 who is lawfully present in the United States for 

17 such quarter, as determined and verified by the 

18 Secretary in consultation with any other Fed19 eral entity the Secretary determines appro20 priate. 

21 ‘‘(B) OPT OUT.—An individual may elect 

22 not to be treated as an eligible individual. 

23 ‘‘(b) PAYMENT OF HEALTHY CLIMATE DIVIDEND.— 

24 From amounts made available under section 9911(c)(2), 

25 the Secretary shall make a Healthy Climate Dividend PayVerDate Sep 11 2014 00:11 Jan 30, 2018 Jkt 079200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\S2352.IS S2352

dlhill on DSK3GLQ082PROD with BILLS
19 

•S 2352 IS

1 ment not later than the end of the calendar quarter fol2 lowing the calendar quarter in which such amounts are 

3 appropriated to the Healthy Climate Trust Fund under 

4 section 9911 to each individual who is an eligible indi5 vidual for that quarter. Such payments shall be made by 

6 electronic means to the maximum extent practicable. 

7 ‘‘(c) EXCLUSION FROM GROSS INCOME.—Gross in8 come shall not include any Healthy Climate Dividend paid 

9 under this section. 

10 ‘‘(d) REGULATIONS.—The Secretary shall prescribe 

11 such regulations and other guidance as may be necessary 

12 or appropriate to carry out this section. 

13 ‘‘SEC. 9913. TRANSPARENCY. 

14 ‘‘(a) REPORT TO CONGRESS.—Not later than June 

15 30, 2019, and at least annually thereafter, the Secretary 

16 shall transmit to Congress a report accounting for the dis17 position of amounts in the Healthy Climate Trust Fund 

18 in the previous calendar year. 

19 ‘‘(b) HEALTHY CLIMATE TRUST FUND WEBSITE.— 

20 Not later than 90 days after the date of the enactment 

21 of this subtitle, the Secretary shall establish and maintain 

22 a website to provide the public with information on the 

23 disposition of any amounts in the Healthy Climate Trust 

24 Fund. 


dlhill on DSK3GLQ082PROD with BILLS
20 

•S 2352 IS

1 ‘‘CHAPTER 103—BORDER ADJUSTMENTS 

‘‘Sec. 9921. Carbon equivalency fee. 

‘‘Sec. 9922. Definitions. 

‘‘Sec. 9923. Sense of Congress. 

2 ‘‘SEC. 9921. CARBON EQUIVALENCY FEE. 

3 ‘‘(a) IMPORTS.—The Secretary shall impose carbon 

4 equivalency fees to be collected by the Commissioner re5 sponsible for U.S. Customs and Border Control on imports 

6 of carbon-intensive goods. The amount of the carbon 

7 equivalency fee shall be equal to the cost that domestic 

8 producers of a comparable carbon-intensive good incur as 

9 a result of— 

10 ‘‘(1) prices paid in the acquisition of carbon 

11 permits by covered entities under this subtitle, and 

12 ‘‘(2) carbon equivalency fees paid by importers 

13 of carbon-intensive goods used in the production of 

14 the comparable carbon-intensive good. 

15 ‘‘(b) PAYMENTS TO EXPORTERS.—The Secretary 

16 shall pay without interest to persons exporting from the 

17 United States carbon-intensive goods produced in the 

18 United States. The amount of the payment shall be equal 

19 to the cost that domestic producers of the carbon-intensive 

20 good incur as a result of— 

21 ‘‘(1) prices paid in the acquisition of carbon 

22 permits by covered entities under this subtitle, and 


dlhill on DSK3GLQ082PROD with BILLS
21 

•S 2352 IS

1 ‘‘(2) carbon equivalency fees paid by importers 

2 of carbon-intensive goods used in the production of 

3 the comparable carbon-intensive good. 

4 ‘‘(c) EXPIRATION.—This section shall cease to have 

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

6 ‘‘(1) an international agreement requiring coun7 tries that emit greenhouse gases and produce car8 bon-intensive goods for export markets to adopt 

9 equivalent measures comes into effect, or 

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

11 equivalent measures, as determined by the Sec12 retary, in consultation with the Secretary of State. 

13 ‘‘SEC. 9922. DEFINITIONS. 

14 ‘‘In this chapter: 

15 ‘‘(1) CARBON-INTENSIVE GOOD.—The term 

16 ‘carbon-intensive good’ means a good that, as identi17 fied by the Secretary, in consultation with the Ad18 ministrator, by rule— 

19 ‘‘(A) is a primary product, or 

20 ‘‘(B) is a manufactured item in which one 

21 or more primary products are inputs and the 

22 cost of production of which in the United States 

23 is significantly increased by reason of the re24 quirements under this subtitle. 


dlhill on DSK3GLQ082PROD with BILLS
22 

•S 2352 IS

1 ‘‘(2) PRIMARY PRODUCT.—The term ‘primary 

2 product’ means— 

3 ‘‘(A) iron, steel, steel mill products (includ4 ing pipe and tube), aluminum, cement, glass 

5 (including flat, container, and specialty glass 

6 and fiberglass), pulp, paper, chemicals, or in7 dustrial ceramics, and 

8 ‘‘(B) any other manufactured product that 

9 the Secretary, in consultation with the Adminis10 trator, determines— 

11 ‘‘(i) is sold for purposes of further 

12 manufacture, and 

13 ‘‘(ii) generates, in the course of the 

14 manufacture of the product, direct and in15 direct greenhouse gas emissions that are 

16 comparable (on an emissions-per-dollar of 

17 output basis) to emissions generated in the 

18 manufacture or production of a primary 

19 product identified in subparagraph (A). 

20 ‘‘(3) EQUIVALENT MEASURE.—The term ‘equiv21 alent measure’ means a tax, or other regulatory re22 quirement that imposes a cost, on manufacturers of 

23 carbon-intensive goods located outside the United 

24 States, by reason of greenhouse gas emissions in the 

25 production of such goods by such manufacturers, apVerDate Sep 11 2014 00:11 Jan 30, 2018 Jkt 079200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\S2352.IS S2352

dlhill on DSK3GLQ082PROD with BILLS
23 

•S 2352 IS

1 proximately equal to the cost imposed by this sub2 title on manufacturers of comparable carbon-inten3 sive goods located in the United States. 

4 ‘‘SEC. 9923. SENSE OF CONGRESS. 

5 ‘‘It is the sense of Congress that the United States 

6 should work proactively under the United Nations Frame7 work Convention on Climate Change and in other appro8 priate fora, to establish binding agreements committing all 

9 major greenhouse gas emitting countries and countries 

10 with globally competitive producers of carbon-intensive 

11 goods to contribute equitably to the reduction of global 

12 greenhouse gas emissions on a schedule and order of mag13 nitude necessary to stabilize the climate.’’. 

14 (b) 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. Auction of Carbon Permits and Distribution of Healthy Climate 

Dividends’’. 

17 SEC. 4. NON-AUCTION GREENHOUSE GASES. 

18 (a) DEFINITIONS.—In this section: 

19 (1) The term ‘‘Administrator’’ means the Ad20 ministrator of the Environmental Protection Agency. 

21 (2) The term ‘‘non-auction greenhouse gas’’ re22 fers to the gases included on the list in effect under 

23 subsection (b). 

24 (b) LIST OF NON-AUCTION GREENHOUSE GASES.— 


dlhill on DSK3GLQ082PROD with BILLS
24 

•S 2352 IS

1 (1) INITIAL LIST.—Not later than 2 years after 

2 the date of the enactment of this Act, the Adminis3 trator, by rule, shall finalize and publish a list 

4 that— 

5 (A) consists of the anthropogenically emit6 ted gases that are determined by the Adminis7 trator to contribute to global warming; and 

8 (B) excludes gases to the extent they are— 

9 (i) carbon dioxide emitted by the com10 bustion of a covered fuel (as such term is 

11 defined in section 9901 of the Internal 

12 Revenue Code of 1986, as added by section 

13 3(a) of this Act); or 

14 (ii) directly attributable to the produc15 tion of animals for food or food products. 

16 (2) UPDATES.—The Administrator shall peri17 odically review and, as appropriate, update the list 

18 under paragraph (1). 

19 (c) REGULATIONS.— 

20 (1) IN GENERAL.—Under the authorities vested 

21 in the Administrator by the Clean Air Act (42 

22 U.S.C. 7401 et seq.) and any other applicable law 

23 (other than this section), the Administrator shall 

24 promulgate regulations addressing the contribution 

25 of non-auction greenhouse gases to global warming. 


dlhill on DSK3GLQ082PROD with BILLS
25 

•S 2352 IS

1 (2) INTERNATIONAL COMPETITIVENESS.—In 

2 promulgating regulations under this subsection, the 

3 Administrator shall take into consideration the effect 

4 of such regulations on the international competitive5 ness of businesses and industries of the United 

6 States. 

7 (d) SCHEDULE.— 

8 (1) IN GENERAL.—The regulations under sub9 section (c) shall ensure that— 

10 (A) not later than 4 years after the date 

11 of enactment of this Act, requirements take ef12 fect to regulate sources which, collectively, emit 

13 not less than 25 percent of non-auction green14 house gases emitted in the United States; 

15 (B) not later than 6 years after the date 

16 of enactment of this Act, requirements take ef17 fect to regulate sources which, collectively, emit 

18 not less than 50 percent of non-auction green19 house gases emitted in the United States; 

20 (C) not later than 8 years after the date 

21 of enactment of this Act, requirements take ef22 fect to regulate sources which, collectively, emit 

23 not less than 75 percent of non-auction green24 house gases emitted in the United States; and 


dlhill on DSK3GLQ082PROD with BILLS
26 

•S 2352 IS

1 (D) not later than 10 years after the date 

2 of enactment of this Act, requirements take ef3 fect to regulate sources which, collectively, emit 

4 100 percent of non-auction greenhouse gases 

5 emitted in the United States. 

6 (2) BASELINE.—The percentages specified in 

7 paragraph (1) shall be applied relative to the aggre8 gate quantity of non-auction greenhouse gases emit9 ted in the United States during the calendar year in 

10 which the initial list under subsection (b)(1) is re11 quired to be finalized by such subsection. 

12 (e) PRIORITIES.—In determining priorities for regu13 lating the emissions of non-auction greenhouse gases 

14 under subsection (c), the Administrator shall consider— 

15 (1) the degree to which the gases involved con16 tribute to global warming; and 

17 (2) the speed with which a given reduction 

18 would contribute to stabilizing the climate. 

19 (f) CITIZEN SUITS.—The provisions of section 304 

20 of the Clean Air Act (42 U.S.C. 7604) shall apply with 

21 respect to a violation of a requirement under this section, 

22 or the failure of the Administrator to perform a non-dis23 cretionary act or duty under this section, to the same ex24 tent and in the same manner as such provisions apply with 

25 respect to a violation described in subsection (a) of such 


dlhill on DSK3GLQ082PROD with BILLS
27 

•S 2352 IS

1 section 304 or a failure to perform a non-discretionary act 

2 or duty described in such subsection. 

3 (g) REPORT TO CONGRESS.—Not later than 2 years 

4 after the date of the enactment of this Act, the Adminis5 trator shall submit a report to the Congress identifying 

6 any additions or modifications to statutory provisions 

7 which are needed for the Administrator to effectively ad8 dress the contribution of non-auction greenhouse gases to 

9 global warming. 

10 SEC. 5. DISCLOSURE OF INFORMATION. 

11 (a) LIMITED DISCLOSURE OF IDENTITY.—Subsection 

12 (l) of section 6103 of the Internal Revenue Code of 1986 

13 is amended by adding at the end the following new para14 graph: 

15 ‘‘(23) LIMITED DISCLOSURE OF IDENTITY IN16 FORMATION RELATING TO HEALTHY CLIMATE DIVI17 DEND PAYMENTS.— 

18 ‘‘(A) DEPARTMENT OF THE TREASURY.— 

19 Individual identity information shall, without 

20 written request, be open to inspection by or dis21 closure to officers and employees of the Depart22 ment of the Treasury whose official duties re23 quire such inspection or disclosure for purposes 

24 of section 9912. 


dlhill on DSK3GLQ082PROD with BILLS
28 

•S 2352 IS

1 ‘‘(B) COMMISSIONER OF SOCIAL SECU2 RITY.—The Commissioner of Social Security 

3 shall, on written request, disclose to officers 

4 and employees of the Department of the Treas5 ury individual identity information which has 

6 been disclosed to the Social Security Adminis7 tration as provided by paragraph (1) or (5). 

8 ‘‘(C) RESTRICTION ON DISCLOSURE.—In9 formation disclosed under this paragraph shall 

10 be disclosed only for purposes of, and to the ex11 tent necessary in, carrying out section 9912.’’. 

12 (b) CONFORMING AMENDMENTS.—Section 

13 6103(p)(3)(A) of the Internal Revenue Code of 1986 is 

14 amended by striking ‘‘or (18)’’ and inserting ‘‘, (23), or 

15 (21)’’. 

16 SEC. 6. EFFECTIVE DATE. 

17 The amendments made by this Act shall take effect 

18 on the date of the enactment of this Act. 

Æ 


dlhill on DSK3GLQ082PROD with BILLS