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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3104 Introduced in House (IH)]

114th CONGRESS
  1st Session
                                H. R. 3104

 To amend the Internal Revenue Code of 1986 to reduce carbon pollution 
 in the United States, invest in the Nation's infrastructure, and cut 
                      taxes for working Americans.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             July 16, 2015

  Mr. Larson of Connecticut introduced the following bill; which was 
  referred to the Committee on Ways and Means, and in addition to the 
     Committee on 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 amend the Internal Revenue Code of 1986 to reduce carbon pollution 
 in the United States, invest in the Nation's infrastructure, and cut 
                      taxes for working Americans.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``America's Energy Security Trust Fund 
Act of 2015''.

SEC. 2. TAX ON CARBON DIOXIDE CONTENT OF CERTAIN SUBSTANCES.

    (a) In General.--Chapter 38 of the Internal Revenue Code of 1986 
(relating to environmental taxes) is amended by adding at the end 
thereof the following new subchapter:

  ``Subchapter E--Tax on Carbon Dioxide Content of Certain Substances

``Sec. 4691. Imposition of tax.
``Sec. 4692. Refunds or credits.
``Sec. 4693. Border adjustments.
``Sec. 4694. Definitions and special rules.

``SEC. 4691. IMPOSITION OF TAX.

    ``(a) In General.--There is hereby imposed a tax on any taxable 
carbon substance sold by the manufacturer, producer, or importer 
thereof.
    ``(b) Amount of Tax.--
            ``(1) In general.--The amount of tax imposed by subsection 
        (a) on any taxable carbon substance shall be the applicable 
        amount per ton of carbon dioxide content of such substance, as 
        determined by the Secretary in consultation with the Secretary 
        of Energy.
            ``(2) Fractional part of ton.--In the case of a fraction of 
        a ton, the tax imposed by subsection (a) shall be the same 
        fraction of the amount of such tax imposed on a whole ton.
            ``(3) Applicable amount.--For purposes of paragraph (1)--
                    ``(A) Calendar year 2016.--The applicable amount 
                for calender year 2016 is $10.
                    ``(B) Years after 2016.--For a calendar year after 
                2016, the applicable amount is the sum of--
                            ``(i) the amount in effect under this 
                        paragraph for the preceding calendar year, plus
                            ``(ii) $10.
    ``(c) Substance Taxed Only Once.--No tax shall be imposed by 
subsection (a) with respect to a taxable carbon substance if the person 
who would be liable for such tax establishes that a prior tax imposed 
by such section has been imposed with respect to such product.
    ``(d) Exemption for Exports.--
            ``(1) Tax-free sales.--
                    ``(A) In general.--No tax shall be imposed under 
                subsection (a) on the sale by the manufacturer or 
                producer of any taxable carbon substance for export or 
                for resale by the purchaser to a second purchaser for 
                export.
                    ``(B) Proof of export required.--Rules similar to 
                the rules of section 4221(b) shall apply for purposes 
                of subparagraph (A).
            ``(2) Credit or refund where tax paid.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), if--
                            ``(i) tax under subsection (a) was paid 
                        with respect to any taxable carbon substance, 
                        and
                            ``(ii)(I) such substance was exported by 
                        any person, or
                            ``(II) such substance was used as a 
                        material in the manufacture or production of a 
                        taxable carbon substance which was exported by 
                        any person and which, at the time of export, 
                        was a taxable carbon substance,
                credit or refund (without interest) of such tax shall 
                be allowed or made to the person who paid such tax.
                    ``(B) Condition to allowance.--No credit or refund 
                shall be allowed or made under subparagraph (A) unless 
                the person who paid the tax establishes that he--
                            ``(i) has repaid or agreed to repay the 
                        amount of the tax to the person who exported 
                        the taxable carbon substance, or
                            ``(ii) has obtained the written consent of 
                        such exporter to the allowance of the credit or 
                        the making of the refund.
                    ``(C) Refunds directly to exporter.--The Secretary 
                shall provide, in regulations, the circumstances under 
                which a credit or refund (without interest) of the tax 
                under subsection (a) shall be allowed or made to the 
                person who exported the taxable carbon substance, 
                where--
                            ``(i) the person who paid the tax waives 
                        his claim to the amount of such credit or 
                        refund, and
                            ``(ii) the person exporting the taxable 
                        carbon substance provides such information as 
                        the Secretary may require in such regulations.

``SEC. 4692. REFUNDS OR CREDITS.

    ``(a) Sequestered Carbon.--Under regulations prescribed by the 
Secretary, if--
            ``(1) a person uses a taxable carbon substance as a 
        feedstock so that the carbon associated with such substance 
        will not be emitted, or
            ``(2) a person captures and sequesters the carbon in a 
        taxable carbon substance,
then an amount equal to the amount of tax in effect under section 
4691(b) with respect to such substance for the calendar year in which 
such use begins shall be allowed as a credit or refund (without 
interest) to such person in the same manner as if it were an 
overpayment of tax imposed by section 4691.
    ``(b) Previously Taxed Carbon Substances Used To Make Another 
Taxable Carbon Substance.--Under regulations prescribed by the 
Secretary, if--
            ``(1) a tax under section 4691 was paid with respect to any 
        taxable carbon substance, and
            ``(2) such substance was used by any person in the 
        manufacture or production of any other substance which is a 
        taxable carbon substance,
then an amount equal to the tax so paid shall be allowed as a credit or 
refund (without interest) to such person in the same manner as if it 
were an overpayment of tax imposed by subsection (a). In any case to 
which this paragraph applies, the amount of any such credit or refund 
shall not exceed the amount of tax imposed by subsection (a) on the 
other taxable fuel manufactured or produced (or which would have been 
imposed by such subsection on such other fuel but for subsection (c)).

``SEC. 4693. BORDER ADJUSTMENTS.

    ``(a) Imports.--The Secretary shall impose a carbon equivalency fee 
on imports of carbon-intensive goods that shall be equivalent to the 
cost that domestic producers of comparable carbon-intensive goods incur 
as a result of--
            ``(1) taxes paid by manufacturers, producers, and importers 
        of taxable carbon substances under this section, and
            ``(2) carbon equivalency fees paid by importers of carbon 
        intensive goods used in the production of the comparable carbon 
        intensive goods in question.
    ``(b) Exports.--Notwithstanding the limitations of section 4692, 
the Secretary shall allow as a credit or refund (without interest) to 
the exporter of a carbon-intensive good produced in the United States 
in the same manner as if it were an overpayment of tax imposed by 
section 4691 an amount equivalent to the cost that domestic producers 
of such carbon intensive goods incur as a result of--
            ``(1) taxes paid by manufacturers, producers, and importers 
        of taxable carbon substances under this section, and
            ``(2) carbon equivalency fees paid by importers of carbon 
        intensive goods used in the production of the comparable carbon 
        intensive goods in question.
    ``(c) Expiration.--This section shall cease to have effect at such 
time as and to the extent that--
            ``(1)(A) an international agreement requiring countries 
        that emit greenhouse gases and produce carbon intensive goods 
        for international markets to adopt equivalent measures comes 
        into effect, or
            ``(B) the country of export has implemented equivalent 
        measures, and
            ``(2) the actions provided for by subsections (a) and (b) 
        are no longer appropriate.

``SEC. 4694. DEFINITIONS AND SPECIAL RULES.

    ``(a) Definitions.--For purposes of this subchapter--
            ``(1) Taxable carbon substance.--The term `taxable carbon 
        substance' means--
                    ``(A) coal (including lignite and peat),
                    ``(B) petroleum and any petroleum product (as 
                defined in section 4612(a)(3)), and
                    ``(C) natural gas,
        which is extracted, manufactured, or produced in the United 
        States or entered into the United States for consumption, use, 
        or warehousing.
            ``(2) United states.--The term `United States' has the 
        meaning given such term by section 4612(a)(4).
            ``(3) Importer.--The term `importer' means the person 
        entering the taxable carbon substance for consumption, use, or 
        warehousing.
            ``(4) Ton.--The term `ton' means metric tons. In the case 
        of any taxable carbon substance which is a gas, the term `ton' 
        means the amount of such gas in cubic feet which is the 
        equivalent of a metric ton on a molecular weight basis.
            ``(5) Carbon-intensive good.--The term `carbon-intensive 
        good' means a good that (as identified by the Secretary by 
        rule)--
                    ``(A) is a primary product, or
                    ``(B) is a manufactured item in which one or more 
                primary products are inputs and the cost of production 
                of which in the United States is significantly 
                increased by this subchapter.
            ``(6) Primary product.--The term `primary product' means--
                    ``(A) iron, steel, steel mill products (including 
                pipe and tube), aluminum, cement, glass (including 
                flat, container, and specialty glass and fiberglass), 
                pulp, paper, chemicals, or industrial ceramics, and
                    ``(B) any other manufactured product that the 
                Secretary determines--
                            ``(i) is sold for purposes of further 
                        manufacture, and
                            ``(ii) generates, in the course of the 
                        manufacture of the product, direct and indirect 
                        greenhouse gas emissions that are comparable 
                        (on an emissions-per-dollar of output basis) to 
                        emissions generated in the manufacture or 
                        production of primary products identified in 
                        subparagraph (A).
            ``(7) Equivalent measure.--The term `equivalent measure' 
        means a tax or other regulatory requirement that imposes a cost 
        on manufacturers of carbon intensive goods located outside the 
        United States approximately equal to the cost imposed by 
        section 4691 on manufacturers of comparable carbon intensive 
        goods located in the United States.
    ``(b) Use Treated as Sale.--If any person manufactures, produces, 
or imports any taxable carbon substance and uses such substance, then 
such person shall be liable for tax under section 4691 in the same 
manner as if such substance were sold by such person.
    ``(c) Special Rules for Inventory Exchanges.--
            ``(1) In general.--Except as provided in this paragraph, in 
        any case in which a manufacturer, producer, or importer of a 
        taxable carbon substance exchanges such substance as part of an 
        inventory exchange with another person--
                    ``(A) such exchange shall not be treated as a sale, 
                and
                    ``(B) such other person shall, for purposes of 
                section 4691, be treated as the manufacturer, producer, 
                or importer of such substance.
            ``(2) Registration requirement.--Paragraph (1) shall not 
        apply to any inventory exchange unless--
                    ``(A) both parties are registered with the 
                Secretary as manufacturers, producers, or importers of 
                taxable carbon substances, and
                    ``(B) the person receiving the taxable carbon 
                substance has, at such time as the Secretary may 
                prescribe, notified the manufacturer, producer, or 
                importer of such person's registration number and the 
                internal revenue district in which such person is 
                registered.
            ``(3) Inventory exchange.--For purposes of this subsection, 
        the term `inventory exchange' means any exchange in which 2 
        persons exchange property which is, in the hands of each 
        person, property described in section 1221(a)(1).
    ``(d) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the purposes of this subchapter.''.
    (b) Establishment of America's Energy Security Trust Fund.--
Subchapter A of chapter 98 of such Code (relating to trust fund code) 
is amended by adding at the end the following:

``SEC. 9512. AMERICA'S ENERGY SECURITY TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as `America's Energy 
Security Trust Fund' (referred to in this section as the `Trust Fund'), 
consisting of such amounts as may be appropriated or credited to the 
Trust Fund as provided in this section or section 9602(b).
    ``(b) Transfers to Trust Fund.--There is hereby appropriated to the 
Trust Fund an amount equivalent to the increase in revenues received in 
the Treasury as the result of the tax imposed under section 4691.
    ``(c) Distribution of Amounts in Trust Fund.--Amounts in the Trust 
Fund equivalent to the taxes received in the Treasury under section 
4691 for a calendar year shall be available without further 
appropriation, as follows:
            ``(1) First, the affected industry transition assistance 
        amount shall be available for transition assistance to workers 
        in industries negatively affected by the America's Energy 
        Security Trust Fund Act of 2015, as determined by the Secretary 
        of the Treasury in consultation with the Secretary of Labor.
            ``(2) Second, of the amount remaining after the application 
        of paragraph (1), the Highway Trust Fund shortfall amount shall 
        be available to be transferred to the Highway Trust Fund. For 
        purposes of this paragraph, the term `Highway Trust Fund 
        shortfall amount' means the amount determined by the Secretary 
        to be equal to the excess of--
                    ``(A) the sum of the obligations of the United 
                States specified in section 9503(c)(1) plus the amounts 
                to be expended under section 9503(e)(3), over
                    ``(B) the amounts available in the Highway Trust 
                Fund to meet those obligations and expenditures 
                (determined without regard to this paragraph or section 
                9503(f)(5)).
            ``(3) Third, the amount remaining after the application of 
        paragraph (1) shall be available for payroll tax relief under 
        the rebate paid under section 36C.
    ``(d) Affected Industry Transition Assistance Amount.--For purposes 
of subsection (c)(1), the affected industry transition assistance 
amount is the amount determined as follows:
            ``(1) For calendar year 2016, \1/10\ of the amount in the 
        Trust Fund equivalent to the taxes received in the Treasury 
        under section 4691 for calendar year 2016.
            ``(2) For calendar year 2017, \9/10\ of the amount made 
        available under paragraph (1) for calendar year 2016.
            ``(3) For calendar year 2018, \4/5\ of the amount made 
        available under paragraph (1) for calendar year 2016.
            ``(4) For calendar year 2019, \7/10\ of the amount made 
        available under paragraph (1) for calendar year 2016.
            ``(5) For calendar year 2020, \3/5\ of the amount made 
        available under paragraph (1) for calendar year 2016.
            ``(6) For calendar year 2021, \1/2\ of the amount made 
        available under paragraph (1) for calendar year 2016.
            ``(7) For calendar year 2022, \2/5\ of the amount made 
        available under paragraph (1) for calendar year 2016.
            ``(8) For calendar year 2023, \3/10\ of the amount made 
        available under paragraph (1) for calendar year 2016.
            ``(9) For calendar year 2024, \1/5\ of the amount made 
        available under paragraph (1) for calendar year 2016.
            ``(10) For calendar year 2025, \1/10\ of the amount made 
        available under paragraph (1) for calendar year 2016.
            ``(11) For calendar years after 2025, zero.''.
    (c) Transfers to Highway Trust Fund.--Subsection (f) of section 
9503 of the Internal Revenue Code of 1986 is amended by redesignating 
paragraph (7) as paragraph (8) and by inserting after paragraph (6) the 
following new paragraph:
            ``(7) Additional increase in fund balance.--There is hereby 
        transferred to the Highway Trust Fund amounts appropriated each 
        year from America's Energy Security Trust Fund under section 
        9512(c)(2). Such amounts shall be apportioned to the Highway 
        Account and the Mass Transit Account in accordance with 
        subsection (e)(5).''.
    (d) Clerical Amendments.--
            (1) The table of subchapters for chapter 38 of such Code is 
        amended by adding at the end thereof the following new item:

 ``subchapter e. tax on carbon dioxide content of certain substances''.

            (2) The table of sections for subchapter A of chapter 98 of 
        such Code is amended by adding at the end the following:

``Sec. 9512. America's Energy Security Trust Fund.''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 3. CARBON TAX REBATE OF PAYROLL TAX.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by inserting after section 36B the following new section:

``SEC. 36C. CARBON TAX REBATE OF PAYROLL TAX.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this subtitle for the 
taxable year an amount equal to the carbon tax rebate.
    ``(b) Carbon Tax Rebate.--
            ``(1) In general.--For purposes of this section, the term 
        `carbon tax rebate' means with respect to a taxable year the 
        individual's share of the amount determined by the Secretary on 
        a per capita basis to be the amount available under section 
        9512(c)(3) for the calendar year in which or with which the 
        taxable year begins.
            ``(2) Determination based on estimates.--The determination 
        under paragraph (1) shall be made on the basis of estimates by 
        the Secretary, and proper adjustments shall be made in amounts 
        available under section 9512(c)(3) for the succeeding taxable 
        year to the extent prior estimates were in excess of or less 
        than the amounts actually available under such section for the 
        prior taxable year.
    ``(c) Limitation Based on Payroll Taxes Paid and Social Security 
Benefits.--
            ``(1) In general.--The amount allowed as a credit under 
        subsection (a) with respect to any individual for a taxable 
        year shall not exceed the greater of--
                    ``(A) the total amount of taxes paid with respect 
                to such individual for such taxable year under section 
                1401 and chapters 21 and 22, determined after taking 
                into account any refund under sections 31(b) and 
                6413(c), or
                    ``(B) 10 percent of the aggregate amount of Social 
                Security benefits (within the meaning of section 86(d)) 
                received by such individual for the taxable year.
            ``(2) Special rule for social security benefits received 
        for less than 12 months.--For purposes of paragraph (1)(B), if 
        Social Security benefits (as so defined) were not received for 
        each month in the taxable year, such benefits shall be 
        annualized by multiplying the Social Security benefits received 
        by 12 and dividing the result by the number of months in such 
        taxable year for which such benefits were received.
    ``(d) Denial of Credit to Dependents.--No credit shall be allowed 
under subsection (a) to an individual for such individual's taxable 
year if a deduction under section 151 with respect to such individual 
is allowed to another taxpayer for a taxable year beginning in the 
calendar year in which such individual's taxable year begins.''.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``36C,'' after ``36B,''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 36B 
        the following new item:

``Sec. 36C. Carbon tax rebate of payroll tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.

SEC. 4. STUDY OF TAXATION OF NON-CARBON GREENHOUSE GASES.

    (a) In General.--The Secretary of the Treasury, in consultation 
with the Secretary of Energy shall conduct a study of the best methods 
to assess and collect tax on non-carbon greenhouse gases similar to the 
tax imposed by section 4691 of the Internal Revenue Code of 1986 (as 
added by this Act).
    (b) Report.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary of the Treasury shall submit to 
the Congress the findings of the report required under subsection (a) 
together with such legislative recommendations as the Secretary 
determines appropriate for the assessment and collection of such tax.

SEC. 5. SENSE OF CONGRESS.

    It is the sense of Congress that the United States should work 
proactively under the United Nations Framework Convention on Climate 
Change and in other appropriate fora to establish binding agreements 
committing all major greenhouse gas emitting nations and countries with 
globally competitive producers of carbon intensive goods to contribute 
equitably to the reduction of global greenhouse gas emissions.
                                 <all>
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