I 

116TH CONGRESS 

1ST SESSION H. R. 4058 

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

gas emissions, accordingly reduce tax rates on payroll, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 25, 2019 

Mr. ROONEY of Florida (for himself and Mr. LIPINSKI) 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 

Science, Space, and Technology, 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 greenhouse gas emissions, accordingly reduce 

tax rates on payroll, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Stemming Warming and Augmenting Pay Act of 2019’’ 

6 or the ‘‘SWAP Act’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 


kjohnson on DSK79L0C42 with BILLS
2 

•HR 4058 IH

Sec. 1. Short title; table of contents. 

Sec. 2. Findings. 

TITLE I—GREENHOUSE GAS EMISSIONS 

Sec. 101. Treatment of greenhouse gas emissions. 

TITLE II—CARBON REDUCED PAYROLL TAX 

Sec. 201. Carbon reduced payroll tax. 

TITLE III—DISTRIBUTION OF REVENUES FROM TAXATION OF 

GREENHOUSE GAS EMISSIONS 

Sec. 301. Establishment of the Carbon Trust Fund. 

Sec. 302. Appropriations from the Carbon Trust Fund. 

TITLE IV—AMENDMENTS TO FEDERAL ENVIRONMENTAL 

STATUTES 

Sec. 401. Amendments to the Clean Air Act. 

1 SEC. 2. FINDINGS. 

2 The Congress finds the following: 

3 (1) Climate change threatens global stability 

4 and our national economy. 

5 (2) Carbon emissions are a significant contrib6 utor to these threats and must be addressed. 

7 (3) The United States private sector can face 

8 these challenges and be a global leader in tech9 nology, innovation, and efficiency. 

10 (4) A price on carbon levels the economic play11 ing field and spurs adoption of less carbon-intensive 

12 practices and technologies. 

13 (5) Recycling revenues back to employers and 

14 employees will neutralize the potential impacts of a 

15 tax. 


kjohnson on DSK79L0C42 with BILLS
3 

•HR 4058 IH

1 TITLE I—GREENHOUSE GAS 

2 EMISSIONS 

3 SEC. 101. TREATMENT OF GREENHOUSE GAS EMISSIONS. 

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

5 1986 is amended by adding at the end the following: 

6 ‘‘Subtitle L—Greenhouse Gas 

7 Emissions 

‘‘PART 1. TAXATION OF GREENHOUSE GAS EMISSIONS

‘‘PART 2. TAX ADJUSTMENTS FOR IMPORTS AND EXPORTS OF GREENHOUSE

GAS INTENSIVE PRODUCTS

8 ‘‘PART 1—TAXATION OF GREENHOUSE GAS 

9 EMISSIONS 

‘‘Sec. 9901. Imposition of tax on combusted fossil fuel greenhouse gas emissions. 

‘‘Sec. 9902. Imposition of tax on greenhouse gas emissions from certain industrial processes. 

‘‘Sec. 9903. Imposition of tax on greenhouse gas emissions from certain product uses. 

‘‘Sec. 9904. Calculation of taxable emissions. 

‘‘Sec. 9905. Credit for State payments. 

‘‘Sec. 9906. Penalties for nonpayment. 

‘‘Sec. 9907. Definitions. 

10 ‘‘SEC. 9901. IMPOSITION OF TAX ON COMBUSTED FOSSIL 

11 FUEL GREENHOUSE GAS EMISSIONS. 

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

13 on fossil fuels produced within, or imported into, the 

14 United States. 

15 ‘‘(b) RATE OF TAX.— 

16 ‘‘(1) GREENHOUSE GASES THAT WOULD BE RE17 LEASED IF THE FOSSIL FUEL WERE COMBUSTED.— 

18 The tax imposed by subsection (a) shall be the appliVerDate Sep 11 2014 21:23 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4058.IH H4058

kjohnson on DSK79L0C42 with BILLS
4 

•HR 4058 IH

1 cable amount per ton of carbon dioxide equivalent of 

2 all greenhouse gases that would be released if the 

3 fossil fuel were combusted. 

4 ‘‘(2) APPLICABLE AMOUNT OF CARBON DIOXIDE

5 EQUIVALENT EMISSIONS.—For purposes of para6 graph (1)— 

7 ‘‘(A) For calendar year 2021, the term 

8 ‘applicable amount’ means $30 per metric ton 

9 of carbon dioxide equivalent emissions. 

10 ‘‘(B) For each calendar year after 2021, 

11 the term ‘applicable amount’ means the sum 

12 of— 

13 ‘‘(i) the applicable amount for the pre14 vious calendar, 

15 ‘‘(ii) the sum of— 

16 ‘‘(I) 5 percentage points, plus 

17 ‘‘(II) a percentage increase in the 

18 previous year’s tax rate equal to the 

19 increase in the Consumer Price Index 

20 for the previous calendar year, plus 

21 ‘‘(iii) the increase, if any, required by 

22 paragraph (3). 

23 ‘‘(C) CONSUMER PRICE INDEX FOR ANY

24 CALENDAR YEAR.—For purposes of subpara25 graph (B), the Consumer Price Index for the 


kjohnson on DSK79L0C42 with BILLS
5 

•HR 4058 IH

1 previous calendar year is the average of the 

2 Consumer Price Index for all-urban consumers 

3 published by the Department of Labor as of the 

4 close of the 12-month period ending on August 

5 31 of such calendar year. For purposes of the 

6 preceding sentence, the revision of the Con7 sumer Price Index which is most consistent 

8 with the Consumer Price Index for calendar 

9 year 1986 shall be used. 

10 ‘‘(3) ADJUSTMENT BASED ON EMISSION LEV11 ELS.— 

12 ‘‘(A) IN GENERAL.—If, for calendar year 

13 2023 and every second calendar year thereafter 

14 through calendar year 2031, the cumulative 

15 amount of emissions with respect to the cal16 endar year reported under subparagraph (B) 

17 exceeds the cumulative amount of emissions 

18 specified for such calendar year in subpara19 graph (C), then the increase required by this 

20 paragraph for the calendar year beginning on 

21 the next January 1 following the determination 

22 in subparagraph (B) shall be $3 per metric ton. 

23 ‘‘(B) ANNUAL REPORT.—Not later than 

24 March 30, 2021, and annually thereafter, the 

25 Secretary and the Administrator shall jointly 


kjohnson on DSK79L0C42 with BILLS
6 

•HR 4058 IH

1 determine and report the emissions during the 

2 calendar year ending on the preceding Decem3 ber 31 from sources subject to taxation under 

4 this part. The report shall specify whether the 

5 cumulative amount of annual emissions re6 ported for the period beginning in calendar year 

7 2021 and ending at the end of the preceding 

8 calendar year exceeds the emission levels speci9 fied in subparagraph (C). 

10 ‘‘(C) EMISSION SCHEDULE.—The emission 

11 schedule specified in this subparagraph is as 

12 follows: 

13 ‘‘(i) The total emissions through cal14 endar year 2021 are 5,000 million metric 

15 tons of carbon dioxide equivalent. 

16 ‘‘(ii) The total emissions through cal17 endar year 2022 are 9,800 million metric 

18 tons of carbon dioxide equivalent. 

19 ‘‘(iii) The total emissions through cal20 endar year 2023 are 14,600 million metric 

21 tons of carbon dioxide equivalent. 

22 ‘‘(iv) The total emissions through cal23 endar year 2024 are 19,200 million metric 

24 tons of carbon dioxide equivalent. 


kjohnson on DSK79L0C42 with BILLS
7 

•HR 4058 IH

1 ‘‘(v) The total emissions through cal2 endar year 2025 are 23,800 million metric 

3 tons of carbon dioxide equivalent. 

4 ‘‘(vi) The total emissions through cal5 endar year 2026 are 28,300 million metric 

6 tons of carbon dioxide equivalent. 

7 ‘‘(vii) The total emissions through cal8 endar year 2027 are 32,700 million metric 

9 tons of carbon dioxide equivalent. 

10 ‘‘(viii) The total emissions through 

11 calendar year 2028 are 37,000 million 

12 metric tons of carbon dioxide equivalent. 

13 ‘‘(ix) The total emissions through cal14 endar year 2029 are 41,300 million metric 

15 tons of carbon dioxide equivalent. 

16 ‘‘(x) The total emissions through cal17 endar year 2030 are 45,500 million metric 

18 tons of carbon dioxide equivalent. 

19 ‘‘(xi) The total emissions through cal20 endar year 2031 are 49,700 million metric 

21 tons of carbon dioxide equivalent. 

22 ‘‘(c) BY WHOM PAID.—The tax imposed by sub23 section (a) shall be paid by the owner of the fossil fuel 

24 at the point of taxation. 

25 ‘‘(d) POINT OF TAXATION.— 


kjohnson on DSK79L0C42 with BILLS
8 

•HR 4058 IH

1 ‘‘(1) For fossil fuels produced within the United 

2 States, the point of taxation shall be— 

3 ‘‘(A) for coal, the mine mouth or, for 

4 washed coal, the exit from the coal preparation 

5 and processing plant, 

6 ‘‘(B) for petroleum products, the exit point 

7 from the refinery, and 

8 ‘‘(C) for natural gas, the exit from the gas 

9 processing plant or, for natural gas that is not 

10 treated at a gas processing plant, the point of 

11 sale to the person who combusts the gas or in12 corporates it into a product that is not intended 

13 for combustion. 

14 ‘‘(2) For any fossil fuel imported into the 

15 United States, the point of taxation shall be the 

16 point at which it first enters the United States. 

17 ‘‘(e) EXEMPTIONS.— 

18 ‘‘(1) EXEMPTION FOR NONCOMBUSTIVE

19 USES.— 

20 ‘‘(A) REFUND FOR REDUCTION OR ELIMI21 NATION OF EMISSIONS.—Any manufacturer of a 

22 product that incorporates a fossil fuel that has 

23 been taxed under this section who can dem24 onstrate to the Secretary that the fossil fuel has 

25 been transformed via the manufacture of the 


kjohnson on DSK79L0C42 with BILLS
9 

•HR 4058 IH

1 product so that the fossil fuel’s emissions will 

2 be reduced or eliminated over the product’s life3 time shall be entitled to a refund of the tax 

4 paid under this section on the proportion of the 

5 emissions reduced thereby, as determined by 

6 the Secretary. 

7 ‘‘(B) RULE.—The Secretary, in consulta8 tion with the Administrator, shall establish by 

9 rule the criteria and process by which product 

10 manufacturers can demonstrate that the condi11 tions in subparagraph (A) have been satisfied. 

12 ‘‘(C) PUBLICATION OF REGULATIONS.— 

13 The Secretary shall publish the regulations re14 quired by this subsection no later than one year 

15 prior to the start of the calendar year referred 

16 to in section 9901(b)(2)(A). The Secretary may 

17 not collect the tax imposed by this section for 

18 any calendar year that begins less than one 

19 year after the regulations are published. 

20 ‘‘(2) EXEMPTION FOR CARBON CAPTURE AND

21 STORAGE.— 

22 ‘‘(A) REFUND FOR SEQUESTERS.—Any 

23 person who sequesters greenhouse gas emissions 

24 resulting from the combustion of fossil fuel that 

25 has passed through a point of taxation shall be 


kjohnson on DSK79L0C42 with BILLS
10 

•HR 4058 IH

1 entitled to a refund of the tax imposed by this 

2 section. Emissions that are used for enhanced 

3 oil recovery shall be entitled for such refund 

4 provided that these emissions meet all of the 

5 criteria applicable to other emissions that qual6 ify for such refund. No refund shall be recog7 nized for any amount of greenhouse gas which 

8 has been credited under section 45Q. 

9 ‘‘(B) RULE.—The Secretary shall establish 

10 by rule the procedures by which to apply for 

11 such refunds and such refunds shall be paid 

12 within six months of the Secretary receiving an 

13 approvable application. 

14 ‘‘(C) TIME OF REFUND.—The Secretary 

15 may not refund any amounts under this para16 graph until such time as the Secretary has pub17 lished the regulations described in section 

18 45Q(d)(2). 

19 ‘‘(3) REPORT TO CONGRESS.—The Secretary 

20 shall, by January 1st of each calendar year, report 

21 the total amount of refunds awarded in the previous 

22 fiscal year under this subsection and shall include, 

23 as appropriate, the amounts refunded under para24 graphs (1) and (2). 


kjohnson on DSK79L0C42 with BILLS
11 

•HR 4058 IH

1 ‘‘SEC. 9902. IMPOSITION OF TAX ON GREENHOUSE GAS 

2 EMISSIONS FROM CERTAIN INDUSTRIAL 

3 PROCESSES. 

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

5 on industrial process greenhouse gas emissions by certain 

6 source categories. 

7 ‘‘(b) LIST OF SOURCE CATEGORIES.— 

8 ‘‘(1) INITIAL LIST.—The Congress establishes 

9 for purposes of this section a list of source cat10 egories subject to this section as follows: 

11 ‘‘(A) Iron and steel production and met12 allurgical coke production. 

13 ‘‘(B) Underground coal mining. 

14 ‘‘(C) Coal preparation and processing 

15 plants. 

16 ‘‘(D) Refineries. 

17 ‘‘(E) Cement production. 

18 ‘‘(F) Petrochemical production. 

19 ‘‘(G) Lime production. 

20 ‘‘(H) Ammonia production. 

21 ‘‘(I) Aluminum production. 

22 ‘‘(J) Soda ash production. 

23 ‘‘(K) Ferroalloy production. 

24 ‘‘(L) Phosphoric acid production. 

25 ‘‘(M) Glass production. 

26 ‘‘(N) Zinc production. 


kjohnson on DSK79L0C42 with BILLS
12 

•HR 4058 IH

1 ‘‘(O) Lead production. 

2 ‘‘(P) Magnesium production and proc3 essing. 

4 ‘‘(Q) Nitric acid production. 

5 ‘‘(R) Adipic acid production. 

6 ‘‘(S) Semiconductor manufacture. 

7 ‘‘(T) Electrical transmission and distribu8 tion. 

9 ‘‘(2) REVISION OF THE LIST.—The Adminis10 trator shall review the list of source categories estab11 lished by this subsection not less than once every 

12 five years to determine if they should continue to be 

13 listed and publish the results of that review. The Ad14 ministrator may, if appropriate, add any source cat15 egories to this list by rule. 

16 ‘‘(3) REMOVAL OF A SOURCE CATEGORY FROM

17 THE LIST.—The Administrator may remove a source 

18 category from this list only if— 

19 ‘‘(A) the total emissions from the entire 

20 source category which are taxable under this 

21 section have been less than 250,000 metric tons 

22 of carbon dioxide equivalent per year for each 

23 of three consecutive years, 

24 ‘‘(B) the average emissions from facilities 

25 in the source category which are taxable under 


kjohnson on DSK79L0C42 with BILLS
13 

•HR 4058 IH

1 this section have been less than 25,000 metric 

2 tons of carbon dioxide equivalent per year for 

3 each of the years referred in subparagraph (A), 

4 and 

5 ‘‘(C) the Administrator determines that 

6 there is no reasonable possibility that the total 

7 emissions from the entire source category which 

8 are taxable under this section will exceed 

9 250,000 metric tons per year of carbon dioxide 

10 equivalent within any of the five years following 

11 such determination. 

12 ‘‘(4) ADDITION OF A SOURCE CATEGORY TO

13 THE LIST.—The Administrator may add a source 

14 category to this list only if the Administrator deter15 mines that— 

16 ‘‘(A) the total emissions from the entire 

17 source category which are taxable under this 

18 section have been greater than 250,000 metric 

19 tons per year of carbon dioxide equivalent in 

20 any two years out of the preceding five years, 

21 ‘‘(B) the average emissions from facilities 

22 in the source category which are taxable under 

23 this section have been greater than 25,000 met24 ric tons per year of carbon dioxide equivalent in 

25 the years in which emissions from the entire 


kjohnson on DSK79L0C42 with BILLS
14 

•HR 4058 IH

1 source category have been greater than 250,000 

2 tons per year, and 

3 ‘‘(C) there is a reasonable possibility that 

4 the total emissions from the entire source cat5 egory which are taxable under this section will 

6 be greater than 250,000 metric tons per year of 

7 carbon dioxide equivalent in any year within the 

8 next five years following such determination. 

9 ‘‘(5) The Administrator may add a source cat10 egory to the list that has previously been removed 

11 pursuant to paragraph (3) if the addition of the 

12 source category otherwise meets the requirements 

13 per paragraph (4). 

14 ‘‘(c) RATE OF TAX.—The rate of tax shall be the 

15 same as the rate given in section 9901(b)(2). 

16 ‘‘(d) BY WHOM PAID.—The tax imposed by sub17 section (a) shall be paid by the owner or operator of the 

18 point of taxation. 

19 ‘‘(e) POINT OF TAXATION.—The point of taxation 

20 shall be any facility in a source category which emits more 

21 than 25,000 metric tons of carbon dioxide equivalent sub22 ject to taxation under this section in any calendar year. 


kjohnson on DSK79L0C42 with BILLS
15 

•HR 4058 IH

1 ‘‘SEC. 9903. IMPOSITION OF TAX ON GREENHOUSE GAS 

2 EMISSIONS FROM CERTAIN PRODUCT USES. 

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

4 on non-fossil-fuel-greenhouse-gas emissions by certain 

5 manufactured products when used for their intended pur6 poses that are manufactured within or imported into, the 

7 United States. 

8 ‘‘(b) LIST OF PRODUCTS.— 

9 ‘‘(1) INITIAL LIST.—The Congress establishes 

10 for purposes of this section a list of products subject 

11 to this section as follows: 

12 ‘‘(A) Fuel ethanol. 

13 ‘‘(B) Industrial carbonates. 

14 ‘‘(C) Carbon dioxide urea. 

15 ‘‘(D) Soda ash. 

16 ‘‘(E) Nitrous oxide. 

17 ‘‘(F) Ozone depleting substances, but not 

18 if the United States has ratified the Kigali 

19 Amendment to the Montreal Protocol and is 

20 subject to Article 2J, paragraph 1 of the 

21 Amended Montreal Protocol. 

22 ‘‘(G) Biodiesel. 

23 ‘‘(H) Solid biomass fuels. 

24 ‘‘(2) REVISION OF THE LIST.—The Adminis25 trator shall review the list of products established by 

26 this subsection not less than once every five years to 


kjohnson on DSK79L0C42 with BILLS
16 

•HR 4058 IH

1 determine if they should continue to be listed and 

2 publish the results of that review. The Administrator 

3 may, if appropriate, add any product to this list by 

4 rule. 

5 ‘‘(3) REMOVAL OF A PRODUCT FROM THE

6 LIST.—The Administrator may remove a product 

7 from this list only if— 

8 ‘‘(A) the total emissions from all of the 

9 product used within the United States has been 

10 less than 250,000 metric tons per year of car11 bon dioxide equivalent for each of three con12 secutive years, and 

13 ‘‘(B) the Administrator determines that 

14 there is no reasonable possibility that the total 

15 emissions from all of the product used in the 

16 United States will exceed 250,000 metric tons 

17 per year of carbon dioxide equivalent within any 

18 of the five years following such determination. 

19 ‘‘(4) ADDITION OF A PRODUCT TO THE LIST.— 

20 The Administrator may add a product to this list 

21 only if the Administrator determines that— 

22 ‘‘(A) the total emissions from all of the 

23 product used within the United States has been 

24 greater than 250,000 metric tons per year of 


kjohnson on DSK79L0C42 with BILLS
17 

•HR 4058 IH

1 carbon dioxide equivalent in any two years out 

2 of the preceding five years, and 

3 ‘‘(B) there is a reasonable possibility that 

4 the total emissions from all of the product used 

5 within the United States will be greater than 

6 250,000 metric tons per year of carbon dioxide 

7 equivalent in any year within the next five years 

8 following such determination. 

9 ‘‘(5) The Secretary may add a product to the 

10 list that has previously been removed pursuant to 

11 paragraph (3) if the addition of the product other12 wise meets the requirements of paragraph (4). 

13 ‘‘(c) RATE OF TAX.—The rate of tax shall be the 

14 same as the rate given in section 9901(b)(2). 

15 ‘‘(d) BY WHOM PAID.—The tax imposed by sub16 section (a) shall be paid— 

17 ‘‘(1) for products manufactured in the United 

18 States, by the owner or operator of the point of tax19 ation, and 

20 ‘‘(2) for products imported into the United 

21 States, by the owner of the product when it enters 

22 the United States. 

23 ‘‘(e) POINT OF TAXATION.—The point of taxation 

24 shall be— 


kjohnson on DSK79L0C42 with BILLS
18 

•HR 4058 IH

1 ‘‘(1) for products manufactured in the United 

2 States, the manufacturing facility, 

3 ‘‘(2) for products imported into the United 

4 States, the point at which it first enters the United 

5 States, and 

6 ‘‘(3) for domestically produced biomass fuel, 

7 any facility that emits from combusted biomass fuel 

8 more than 25,000 metric tons of carbon dioxide 

9 equivalent greenhouse gases in a year. 

10 ‘‘SEC. 9904. CALCULATION OF TAXABLE EMISSIONS. 

11 ‘‘(a) HOW TO CALCULATE TAXABLE EMISSIONS.— 

12 In consultation with the Department of Energy, the Ad13 ministrator shall establish by rule (and may, from time 

14 to time, revise) the method by which taxable emissions 

15 under this part shall be calculated. 

16 ‘‘(b) CATEGORIES AND SUBCATEGORIES CONSID17 ERED.—For purposes of calculating emissions taxable 

18 under— 

19 ‘‘(1) section 9901, the Administrator shall de20 termine by rule the amount of carbon dioxide equiv21 alent that would be emitted if each fossil fuel were 

22 combusted, and the Administrator may establish by 

23 rule such subcategories of each fuel and the means 

24 by which it is combusted as the Administrator deems 

25 appropriate, 


kjohnson on DSK79L0C42 with BILLS
19 

•HR 4058 IH

1 ‘‘(2) section 9902, the Administrator may de2 termine by rule such subcategories of any industrial 

3 process category listed in subsection 9902(b) as the 

4 Administrator deems appropriate, and 

5 ‘‘(3) section 9903, for fuel ethanol, biodiesel, 

6 and solid biomass fuels the Administrator shall de7 termine by rule the amount of carbon dioxide equiv8 alent that would be emitted based on the lifecycle 

9 greenhouse gas emissions of the product, and the 

10 Administrator may determine by rule such subcat11 egories of manufactured products listed in sub12 section 9903(b) as the Administrator deems appro13 priate. 

14 ‘‘(c) METHODS.—Where greenhouse gas emissions 

15 subject to taxation under any section of this part are com16 bined with greenhouse gas emissions subject to taxation 

17 under any other section of this part, the Administrator 

18 shall ensure, to the greatest degree possible, that the 

19 methods required to determine the emissions taxable 

20 under any section of this part do not include any emissions 

21 taxable under any other section of this part. 

22 ‘‘(d) METHOD COST DIFFERENCES.—The Adminis23 trator shall not require the use of any method to calculate 

24 taxable emissions whereby the difference in cost of the 

25 method compared to the next cheapest alternative method 


kjohnson on DSK79L0C42 with BILLS
20 

•HR 4058 IH

1 is greater than the amount of the tax that would be paid 

2 on the additional emissions determined by the more expen3 sive method. 

4 ‘‘(e) PUBLICATION OF REGULATIONS.—The Adminis5 trator shall publish the regulations required by this section 

6 no later than January 1, 2020. The Secretary may not 

7 collect the tax imposed by any section in this part for any 

8 calendar year that begins less than one year after the reg9 ulations applicable to each such section are published. 

10 ‘‘SEC. 9905. CREDIT FOR STATE PAYMENTS. 

11 ‘‘(a) CREDIT FOR PAYMENTS.—The Secretary shall 

12 allow any person who is required to make payment for 

13 greenhouse gas emissions under this part a credit for pay14 ments made on those emissions required under any State 

15 law in the following manner: 

16 ‘‘(1) For the year given in section 

17 9901(b)(2)(A), a credit equal to 100 percent of the 

18 amount paid pursuant to requirements of State law. 

19 ‘‘(2) For the first year following the year used 

20 in paragraph (1), a credit equal to 80 percent of the 

21 amount paid pursuant to requirements of State law. 

22 ‘‘(3) For the second year following the year 

23 used in paragraph (1), a credit equal to 60 percent 

24 of the amount paid pursuant to requirements of 

25 State law. 


kjohnson on DSK79L0C42 with BILLS
21 

•HR 4058 IH

1 ‘‘(4) For the third year following the year used 

2 in paragraph (1), a credit equal to 40 percent of the 

3 amount paid pursuant to requirements of State law. 

4 ‘‘(5) For the fourth year following the year 

5 used in paragraph (1), a credit equal to 20 percent 

6 of the amount paid pursuant to requirements of 

7 State law. 

8 ‘‘(b) NO CREDIT.—For all years following the year 

9 used in paragraph (5), no credit shall be allowed. 

10 ‘‘SEC. 9906. PENALTIES FOR NONPAYMENT. 

11 ‘‘Any person who fails to comply with the require12 ments of section 9901, 9902, or 9903 shall be liable for 

13 payment to the Secretary, without demand, of a penalty 

14 in the amount equal to 3 times the applicable amount 

15 specified by those sections for the same tax year as the 

16 year in which the person failed to comply with such re17 quirements. 

18 ‘‘SEC. 9907. DEFINITIONS. 

19 ‘‘Unless otherwise provided, the definitions provided 

20 herein are applicable to all provisions of this subtitle. 

21 ‘‘(1) ADMINISTRATOR.—The term ‘Adminis22 trator’ means the Administrator of the Environ23 mental Protection Agency. 

24 ‘‘(2) CARBON DIOXIDE EQUIVALENT.—The 

25 term ‘carbon dioxide equivalent’ means the number 


kjohnson on DSK79L0C42 with BILLS
22 

•HR 4058 IH

1 of metric tons of CO2 emissions with the same glob2 al warming potential over a 100-year period as one 

3 metric ton of another greenhouse gas. 

4 ‘‘(3) COAL.—The term ‘coal’ means any of the 

5 recognized classifications and ranks of coal, includ6 ing anthracite, bituminous, semibituminous, subbitu7 minous, lignite, and peat. 

8 ‘‘(4) COAL PREPARATION AND PROCESSING

9 PLANT.—The term ‘coal preparation and processing 

10 plant’ means any facility (excluding underground 

11 mining operations) which prepares coal by one or 

12 more of the following processes: breaking, crushing, 

13 screening, wet or dry cleaning, and thermal drying. 

14 ‘‘(5) ENHANCED OIL RECOVERY.—The term 

15 ‘enhanced oil recovery’ has the meaning defined at 

16 section 1.193–1(b)(2) of title 26, Code of Federal 

17 Regulations, as of the date of enactment of this Act. 

18 ‘‘(6) FACILITY.—The term ‘facility’ means any 

19 physical property, plant, building, structure, source, 

20 or stationary equipment located on one or more con21 tiguous or adjacent properties in actual physical con22 tact or separated solely by a public roadway or other 

23 public right-of-way and under common ownership or 

24 common control, that emits or may emit any green25 house gas. 


kjohnson on DSK79L0C42 with BILLS
23 

•HR 4058 IH

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

2 means coal, petroleum products, or natural gas. 

3 ‘‘(8) GREENHOUSE GAS.—The term ‘greenhouse 

4 gas’ means carbon dioxide, nitrous oxide, methane, 

5 hydrofluorocarbons, perfluorocarbons, and sulfur 

6 hexafluoride. 

7 ‘‘(9) GREENHOUSE GAS EFFECTS.—The term 

8 ‘greenhouse gas effects’ means the adverse effects of 

9 greenhouse gases on health or welfare caused by the 

10 greenhouse gas’s heat-trapping potential or its effect 

11 on ocean acidification. 

12 ‘‘(10) LIFECYCLE GREENHOUSE GAS EMIS13 SIONS.—The term ‘lifecycle greenhouse gas emis14 sions’ has the meaning given that term in section 

15 211 of the Clear Air Act (42 U.S.C. 7545(o)(1)(H)). 

16 ‘‘(11) NATURAL GAS.—The term ‘natural gas’ 

17 means any fuel consisting in whole or in part of nat18 ural gas, including components of natural gas such 

19 as methane and ethane; liquid petroleum gas; syn20 thetic gas derived from coal, petroleum, or natural 

21 gas liquids; or any mixture of natural gas and syn22 thetic gas. 

23 ‘‘(12) PETROLEUM PRODUCTS.—The term ‘pe24 troleum products’ means unfinished oils, liquefied 

25 petroleum gases, pentanes plus, aviation gasoline, 


kjohnson on DSK79L0C42 with BILLS
24 

•HR 4058 IH

1 motor gasoline, naphtha-type jet fuel, kerosene-type 

2 jet fuel, kerosene, distillate fuel oil, residual fuel oil, 

3 petrochemical feedstocks, special naphthas, lubri4 cants, waxes, petroleum coke, asphalt, road oil, still 

5 gas, and miscellaneous products obtained from the 

6 processing of crude oil (including lease condensate), 

7 natural gas, and other hydrocarbon compounds. The 

8 term does not include natural gas, liquefied natural 

9 gas, biofuels, methanol, and other nonpetroleum 

10 fuels. 

11 ‘‘(13) PUBLISH.—The term ‘publish’ means 

12 publication in the Federal Register. 

13 ‘‘(14) REFINERY.—The term ‘refinery’ means 

14 any facility engaged in producing gasoline, kerosene, 

15 distillate fuel oils, residual fuel oils, lubricants, or 

16 other products through distillation of petroleum or 

17 through redistillation, cracking or reforming of un18 finished petroleum derivatives. 

19 ‘‘(15) OWNER.—The term ‘owner’ with respect 

20 to any fossil fuel means any person who has legal 

21 title to the fossil fuel. 

22 ‘‘(16) OWNER OR OPERATOR.—The term ‘owner 

23 or operator’ with respect to any fossil fuel means 

24 any person who has legal title to the fossil fuel. 


kjohnson on DSK79L0C42 with BILLS
25 

•HR 4058 IH

1 ‘‘(17) SEQUESTERS.—The term ‘sequesters’ 

2 means the permanent storage of carbon dioxide or 

3 other greenhouse gas such that it does not escape 

4 into the atmosphere, and is in compliance with the 

5 regulations issued pursuant to section 45Q(d)(2). 

6 ‘‘(18) SOLID BIOMASS.—The term ‘solid bio7 mass’ means nonfossilized and biodegradable organic 

8 material originating from plants, animals, or micro9 organisms, including products, byproducts, residues 

10 and waste from agriculture, forestry and related in11 dustries as well as the nonfossilized and biodegrad12 able organic fractions of industrial and municipal 

13 wastes, but does not include gases and liquids recov14 ered from the decomposition of nonfossilized and 

15 biodegradable organic material. 

16 ‘‘(19) SOURCE CATEGORY.—The term ‘source 

17 category’ means any category or subcategory regu18 lated under part 60 of title 40, Code of Federal Reg19 ulations, or part 90 of title 40, Code of Federal Reg20 ulations. 

21 ‘‘PART 2—TAX ADJUSTMENTS FOR IMPORTS AND 

22 EXPORTS OF GREENHOUSE GAS INTENSIVE 

23 PRODUCTS 

‘‘Sec. 9911. Purposes. 

‘‘Sec. 9912. Definitions. 

‘‘Sec. 9913. Notification of foreign countries. 

‘‘Sec. 9914. Border tax adjustment rate. 


kjohnson on DSK79L0C42 with BILLS
26 

•HR 4058 IH

1 ‘‘SEC. 9911. PURPOSES. 

2 ‘‘(a) PURPOSES OF PART.—The purposes of this part 

3 are— 

4 ‘‘(1) to promote a strong global effort to signifi5 cantly reduce greenhouse gas emissions, and 

6 ‘‘(2) to prevent carbon leakage. 

7 ‘‘(b) ADDITIONAL PURPOSES OF PART.—The pur8 poses of this part are additionally— 

9 ‘‘(1) to provide a rebate to exporters in domes10 tic eligible industrial sectors for the greenhouse gas 

11 emission costs of the owners and operators incurred 

12 under this title, but not for costs associated with 

13 other related or unrelated market dynamics, 

14 ‘‘(2) to ensure that imports from other coun15 tries, and, in particular, fast-growing developing 

16 countries, do not enjoy competitive advantages be17 cause of the carbon tax liability of domestic manu18 facturers, and therefore increase their emissions, 

19 ‘‘(3) to encourage foreign countries to take sub20 stantial action with respect to their greenhouse gas 

21 emissions, and 

22 ‘‘(4) to ensure that the measures described in 

23 this subpart are designed and implemented in a 

24 manner consistent with applicable international 

25 agreements to which the United States is a party. 


kjohnson on DSK79L0C42 with BILLS
27 

•HR 4058 IH

1 ‘‘SEC. 9912. DEFINITIONS. 

2 ‘‘In this part: 

3 ‘‘(1) CARBON LEAKAGE.—The term ‘carbon 

4 leakage’ means any substantial increase (as deter5 mined by the Secretary) in greenhouse gas emissions 

6 by entities located in other countries caused by a 

7 cost of production increase in the United States re8 sulting from implementation of this title. 

9 ‘‘(2) BORDER TAX ADJUSTMENT.—The term 

10 ‘border tax adjustment’ means the levying of a tax 

11 on imported covered goods equivalent to the amount 

12 of tax paid pursuant to part 1 of this subtitle in the 

13 manufacture of comparable domestic manufactured 

14 goods, and the rebating of the tax paid pursuant to 

15 part 1 of this subtitle that has been paid on covered 

16 goods exported from the United States. 

17 ‘‘(3) BORDER TAX ADJUSTMENT RATE.—The 

18 term ‘border tax adjustment rate’ means the amount 

19 of tax that would be paid on a covered good pro20 duced in the United States in the current year. 

21 ‘‘(4) COMMISSIONER.—The term ‘Commis22 sioner’ means the Commissioner of United States 

23 Customs and Border Protection. 

24 ‘‘(5) COVERED GOOD.—The term ‘covered good’ 

25 means a good that is— 


kjohnson on DSK79L0C42 with BILLS
28 

•HR 4058 IH

1 ‘‘(A) entered under a heading or sub2 heading of the Harmonized Tariff Schedule of 

3 the United States that corresponds to the 

4 NAICS code for an eligible industrial sector, as 

5 established in the concordance between NAICS 

6 codes and the Harmonized Tariff Schedule of 

7 the United States prepared by the United 

8 States Census Bureau, or 

9 ‘‘(B) a manufactured item for consump10 tion. 

11 ‘‘(6) ELIGIBLE INDUSTRIAL SECTOR.—The 

12 term ‘eligible industrial sector’ means an industrial 

13 sector determined by the Secretary under section 

14 9913. 

15 ‘‘(7) INDUSTRIAL SECTOR.—The term ‘indus16 trial sector’ means any sector that— 

17 ‘‘(A) is in the manufacturing sector (as de18 fined in NAICS codes 31, 32, and 33), or 

19 ‘‘(B) is part of, or an entire sector that 

20 beneficiates or otherwise processes (including 

21 agglomeration) metal ores, including iron and 

22 copper ores, soda ash, and phosphate. The term 

23 ‘industrial sector’ does not include any part of 

24 a sector that extracts fossil fuels, metal ores, 

25 soda ash, or phosphate. 


kjohnson on DSK79L0C42 with BILLS
29 

•HR 4058 IH

1 ‘‘(8) MANUFACTURED ITEM FOR CONSUMP2 TION.—The term ‘manufactured item for consump3 tion’ means any good— 

4 ‘‘(A) that includes in substantial quantities 

5 one or more goods like the goods produced by 

6 an eligible industrial sector, and 

7 ‘‘(B) for which the Secretary has deter8 mined, with the concurrence of the Commis9 sioner, that the application of the border tax 

10 adjustment program pursuant to this part is 

11 technically and administratively feasible and ap12 propriate to achieve the purposes of this part, 

13 taking into account the greenhouse gas inten14 sity, and where appropriate the trade intensity, 

15 of the industrial sector that produces the good, 

16 as measured consistent with section 9913 and 

17 the ability of the producers to recover cost in18 creases in the marketplace and other appro19 priate factors. 

20 ‘‘(9) NAICS.—The term ‘NAICS’ means the 

21 North American Industrial Classification System of 

22 2002. 

23 ‘‘(10) OUTPUT.—The term ‘output’ means the 

24 total tonnage or other standard unit of production 


kjohnson on DSK79L0C42 with BILLS
30 

•HR 4058 IH

1 (as determined by the Secretary) produced by an en2 tity in an industrial sector. 

3 ‘‘SEC. 9913. NOTIFICATION OF FOREIGN COUNTRIES. 

4 ‘‘(a) IN GENERAL.—As soon as practicable after the 

5 date of the enactment of the Stemming Warming and 

6 Augmenting Pay Act of 2019, the President shall notify 

7 each foreign country— 

8 ‘‘(1) requesting the foreign country to take ap9 propriate measures to limit the greenhouse gas emis10 sions of the foreign country, and 

11 ‘‘(2) indicating that a border tax adjustment 

12 may apply to covered goods imported into and ex13 ported from the United States. 

14 ‘‘(b) LISTS.— 

15 ‘‘(1) IN GENERAL.—Not later than 1 year after 

16 the date of the enactment of the Stemming Warm17 ing and Augmenting Pay Act of 2019, the Secretary 

18 shall promulgate a rule designating, based on the 

19 criteria under subsection (c)(2), industrial sectors 

20 where covered products are liable for the border tax 

21 adjustment. 

22 ‘‘(2) CONTENT.—The list shall include the 

23 amount of the border tax adjustment rate for each 

24 covered good in the following calendar year pursuant 

25 to section 9914. 


kjohnson on DSK79L0C42 with BILLS
31 

•HR 4058 IH

1 ‘‘(3) SUBSEQUENT LISTS.—Not later than Jan2 uary 31 of each calendar year after the calendar 

3 year in which the Stemming Warming and Aug4 menting Pay Act of 2019 is enacted, the Secretary 

5 shall publish in the Federal Register an updated 

6 version of the list published under paragraph (1). 

7 ‘‘(c) ELIGIBLE INDUSTRIAL SECTORS.— 

8 ‘‘(1) PRESUMPTIVELY ELIGIBLE INDUSTRIAL

9 SECTORS.— 

10 ‘‘(A) ELIGIBILITY CRITERIA.— 

11 ‘‘(i) IN GENERAL.— 

12 ‘‘(I) Imported covered goods are 

13 liable under this part if they are pro14 duced in the United States in an in15 dustrial sector that is included in a 6- 

16 digit classification of the NAICS that 

17 meets the criteria in both clauses (ii) 

18 and (iii). 

19 ‘‘(II) Exported covered goods are 

20 eligible under this part if they are 

21 produced in the United States in an 

22 industrial sector that is included in a 

23 6-digit classification of the NAICS 

24 that meets the criteria in clause (ii). 


kjohnson on DSK79L0C42 with BILLS
32 

•HR 4058 IH

1 ‘‘(ii) GREENHOUSE GAS INTENSITY.— 

2 As determined by the Secretary, an indus3 trial sector meets the criteria of this clause 

4 if the United States industrial sector has a 

5 greenhouse gas intensity of at least 5 per6 cent, calculated by dividing— 

7 ‘‘(I) the number of metric tons of 

8 carbon dioxide equivalent greenhouse 

9 gas emissions (including direct emis10 sions from fuel combustion, process 

11 emissions, and indirect emissions from 

12 the generation of electricity used to 

13 produce the output of the sector) of 

14 the sector based on data described in 

15 subparagraph (C), multiplied by the 

16 applicable rate in section 9901(b)(2), 

17 by 

18 ‘‘(II) the value of the shipments 

19 of the sector, based on data described 

20 in subparagraph (C). 

21 ‘‘(iii) TRADE INTENSITY.—As deter22 mined by the Secretary, an industrial sec23 tor meets the criteria of this clause if the 

24 industrial sector has a trade intensity of at 

25 least 15 percent, calculated by dividing— 


kjohnson on DSK79L0C42 with BILLS
33 

•HR 4058 IH

1 ‘‘(I) the value of the total im2 ports and exports of the sector, by 

3 ‘‘(II) the value of the shipments 

4 plus the value of imports of the sec5 tor, based on data described in sub6 paragraph (C). 

7 ‘‘(B) METAL AND PHOSPHATE PRODUC8 TION CLASSIFIED UNDER MORE THAN ONE

9 NAICS CODE.—For purposes of this section, the 

10 Secretary shall— 

11 ‘‘(i) aggregate data for the 

12 beneficiation or other processing (including 

13 agglomeration) of metal ores, including 

14 iron and copper ores, soda ash, or phos15 phate with subsequent steps in the process 

16 of metal and phosphate manufacturing, re17 gardless of the NAICS code under which 

18 the activity is classified, and 

19 ‘‘(ii) aggregate data for the manufac20 turing of steel with the manufacturing of 

21 steel pipe and tube made from purchased 

22 steel in a nonintegrated process. 

23 ‘‘(C) DATA SOURCES.— 

24 ‘‘(i) VALUE OF SHIPMENTS.— 


kjohnson on DSK79L0C42 with BILLS
34 

•HR 4058 IH

1 ‘‘(I) IN GENERAL.—The Sec2 retary shall determine the value of 

3 shipments under this subsection from 

4 data from the United States Census 

5 Annual Survey of Manufacturers. 

6 ‘‘(II) AVERAGE DATA AVAIL7 ABLE.—The Secretary shall use the 

8 average of data from the most recent 

9 3 years for which the data are avail10 able. 

11 ‘‘(III) AVERAGE DATA NOT

12 AVAILABLE.—If data described in sub13 clause (II) are unavailable, the Sec14 retary shall make a determination 

15 based on— 

16 ‘‘(aa) data from the most 

17 detailed industrial classification 

18 level of the Manufacturing En19 ergy Consumption Survey of the 

20 Energy Information Administra21 tion, and 

22 ‘‘(bb) data from the most re23 cent Economic Census of the 

24 United States. 


kjohnson on DSK79L0C42 with BILLS
35 

•HR 4058 IH

1 ‘‘(IV) DATA NOT AVAILABLE FOR

2 SECTOR.—If data from the Manufac3 turing Energy Consumption Survey or 

4 Economic Census are unavailable for 

5 any sector at the 6-digit classification 

6 level in the NAICS, the Secretary may 

7 use available Manufacturing Energy 

8 Consumption Survey or Economic 

9 Census data pertaining to a broader 

10 industrial category classified in the 

11 NAICS. 

12 ‘‘(V) DATA NOT AVAILABLE FOR

13 PROCESSING.—If data relating to the 

14 beneficiation or other processing (in15 cluding agglomeration) of metal ores 

16 (including iron and copper ores, soda 

17 ash, or phosphate) are not available 

18 from the specified data sources, the 

19 Secretary— 

20 ‘‘(aa) shall use the best 

21 available Federal or State gov22 ernment data, and 

23 ‘‘(bb) may use, to the extent 

24 necessary, representative data 

25 submitted by entities that perVerDate Sep 11 2014 06:18 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\H4058.IH H4058

kjohnson on DSK79L0C42 with BILLS
36 

•HR 4058 IH

1 form the beneficiation or other 

2 processing (including agglomer3 ation), in making a determina4 tion. 

5 ‘‘(ii) IMPORTS AND EXPORTS.— 

6 ‘‘(I) IN GENERAL.—The Sec7 retary shall base the value of imports 

8 and exports under this subsection on 

9 United States International Trade 

10 Commission data. 

11 ‘‘(II) AVERAGE DATA AVAIL12 ABLE.—The Secretary shall use the 

13 average of data from the three most 

14 recent years for which the data are 

15 available. 

16 ‘‘(III) AVERAGE DATA NOT

17 AVAILABLE.—If data from the United 

18 States International Trade Commis19 sion are unavailable for any sector at 

20 the 6-digit classification level in the 

21 NAICS, the Secretary may use United 

22 States International Trade Commis23 sion data pertaining to a broader in24 dustrial category classified in the 

25 NAICS. 


kjohnson on DSK79L0C42 with BILLS
37 

•HR 4058 IH

1 ‘‘(iii) PERCENTAGES.—The Secretary 

2 shall round the greenhouse gas intensity 

3 and trade intensity percentages under sub4 paragraph (A) to the nearest whole num5 ber. 

6 ‘‘(iv) GREENHOUSE GAS EMISSION

7 CALCULATIONS.—When calculating the 

8 metric tons of carbon dioxide equivalent 

9 greenhouse gas emissions for each sector 

10 under subparagraph (A)(ii)(I), the Sec11 retary— 

12 ‘‘(I) shall use the best available 

13 data from the three most recent years 

14 for which the data are available, and 

15 ‘‘(II) may, to the extent nec16 essary with respect to a sector, use 

17 economic and engineering models and 

18 the best available information on tech19 nology performance levels for the sec20 tor. 

21 ‘‘(2) ADMINISTRATIVE DETERMINATION OF AD22 DITIONAL ELIGIBLE INDUSTRIAL SECTORS.— 

23 ‘‘(A) UPDATED TRADE INTENSITY DATA.— 

24 The Secretary shall designate as liable for borVerDate Sep 11 2014 06:18 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\H4058.IH H4058

kjohnson on DSK79L0C42 with BILLS
38 

•HR 4058 IH

1 der tax adjustment rate on imported products 

2 under this part an industrial sector that— 

3 ‘‘(i) met the greenhouse gas intensity 

4 criteria in paragraph (1)(A)(ii) as of the 

5 date of promulgation of the rule under 

6 paragraph (1), and 

7 ‘‘(ii) meets the trade intensity criteria 

8 established under paragraph (1)(A)(iii), 

9 using data sources described in paragraph 

10 (1)(C) from any year after the passage of 

11 this Act. 

12 ‘‘(B) INDIVIDUAL SHOWING PETITION.— 

13 ‘‘(i) PETITION.—In addition to des14 ignation under subparagraph (A), the 

15 owner or operator of an entity or a group 

16 of entities that collectively produce not less 

17 than 80 percent of the average annual 

18 value of shipments from within the sector 

19 of the group consistent with subclause (I), 

20 that manufacture similar products in an 

21 industrial sector may petition the Sec22 retary to designate as eligible industrial 

23 sectors under this part an entity or a 

24 group of entities that— 


kjohnson on DSK79L0C42 with BILLS
39 

•HR 4058 IH

1 ‘‘(I) represent a sector using a 

2 standard product classification, and 

3 ‘‘(II) meet the respective import 

4 and/or export eligibility criteria in 

5 paragraph (1)(A)(i). 

6 ‘‘(ii) DATA.—In making a determina7 tion under this subparagraph, the Sec8 retary shall consider— 

9 ‘‘(I) data submitted by the peti10 tioner, 

11 ‘‘(II) data solicited by the Sec12 retary from other entities in the sec13 tor, and 

14 ‘‘(III) data specified in para15 graph (1)(C). 

16 ‘‘(iii) BASIS OF SUBSECTOR DETER17 MINATION.— 

18 ‘‘(I) IN GENERAL.—Except as 

19 provided in subclause (II), the Sec20 retary shall determine an entity or 

21 group of entities to be a subsector of 

22 a 6-digit section of the NAICS code 

23 based only on the products manufac24 tured and not the industrial process 


kjohnson on DSK79L0C42 with BILLS
40 

•HR 4058 IH

1 by which the products are manufac2 tured. 

3 ‘‘(II) TYPE OF MATERIAL.—The 

4 Secretary may determine an entity or 

5 group of entities that manufacture a 

6 product from primarily virgin material 

7 to be a separate subsector from an8 other entity or group of entities that 

9 manufacture the same product pri10 marily from recycled material. 

11 ‘‘(iv) USE OF MOST RECENT DATA.— 

12 In determining whether to designate a sec13 tor or subsector as an eligible industrial 

14 sector under this subparagraph, the Sec15 retary shall use the most recent data avail16 able from the sources described in para17 graph (1)(C), rather than the data from 

18 the years specified in paragraph (1)(C), to 

19 determine the trade intensity of the sector 

20 or subsector, but only for determining the 

21 trade intensity. 

22 ‘‘(v) FINAL ACTION.—The Secretary 

23 shall take final action on a petition de24 scribed in this subparagraph not later than 


kjohnson on DSK79L0C42 with BILLS
41 

•HR 4058 IH

1 180 days after the date the completed peti2 tion is received by the Secretary. 

3 ‘‘(3) CESSATION OF QUALIFYING ACTIVITIES.— 

4 If, as determined by the Secretary, an industrial sec5 tor or a covered good within the sector is no longer 

6 liable to be designated under this section, the Com7 missioner shall cease to apply the border tax adjust8 ment on the relevant covered goods with effect from 

9 January 1 of the following year. 

10 ‘‘SEC. 9914. BORDER TAX ADJUSTMENT RATE. 

11 ‘‘(a) ESTABLISHMENT.—Not later than January 1, 

12 2020, the Secretary, with the concurrence of the Commis13 sioner, shall promulgate regulations— 

14 ‘‘(1) establishing the products which are liable 

15 for, and requiring payment of, the border tax adjust16 ment rate, 

17 ‘‘(2) establishing a general methodology for cal18 culating the level of the border tax adjustment rate 

19 that a domestic importer of any covered good must 

20 submit and the rebate that an exporter will receive, 

21 ‘‘(3) establishing an administrative process 

22 whereby any determination by the Secretary under 

23 this subsection may be appealed, 

24 ‘‘(4) exempting from this section products that 

25 originate from— 


kjohnson on DSK79L0C42 with BILLS
42 

•HR 4058 IH

1 ‘‘(A) any country that the United Nations 

2 has identified as among the least developed of 

3 developing countries, or 

4 ‘‘(B) any country that the President has 

5 determined to be responsible for less than 0.5 

6 percent of total global greenhouse gas emissions 

7 and less than 5 percent of global production in 

8 the eligible industrial sector, 

9 ‘‘(5) specifying the procedures that the Com10 missioner will apply for the declaration and entry of 

11 covered goods with respect to the eligible industrial 

12 sector into the customs territory of the United 

13 States, and 

14 ‘‘(6) establishing procedures that prevent cir15 cumvention of the carbon tax liability for covered 

16 goods that are manufactured or processed in more 

17 than one foreign country. 

18 ‘‘(b) PRESIDENTIAL DISCRETION.—The President 

19 may elect not to levy the border tax adjustment for an 

20 eligible industrial sector or for specific products within 

21 that sector if the President determines and certifies to 

22 Congress that the program would not be in the national 

23 interest, economic interest or environmental interest of the 

24 United States. 


kjohnson on DSK79L0C42 with BILLS
43 

•HR 4058 IH

1 ‘‘(c) LIMITATION ON IMPOSITION OF TAX.—A border 

2 tax adjustment pursuant to this subpart may not be im3 posed with respect to any calendar year that begins less 

4 than one year after regulations are published under sub5 section (a).’’. 

6 (b) CLERICAL AMENDMENT.—The table of subtitles 

7 for the Internal Revenue Code of 1986 is amended by add8 ing at the end the following new item: 

‘‘Subtitle L. Greenhouse Gas Emissions’’. 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to emissions after December 31, 

11 2019. 

12 TITLE II—CARBON REDUCED 

13 PAYROLL TAX 

14 SEC. 201. CARBON REDUCED PAYROLL TAX. 

15 (a) IN GENERAL.—Notwithstanding any other provi16 sion of law— 

17 (1) with respect to any taxable year which be18 gins after December 31, 2020, the rate of tax under 

19 section 1401(a) of the Internal Revenue Code of 

20 1986 shall be 12.4 percent minus the reduced car21 bon rate, and 

22 (2) with respect to remuneration received after 

23 December 31, 2020— 

24 (A) the rate of tax under 3101(a) of such 

25 Code shall be 6.2 percent minus one-half of the 


kjohnson on DSK79L0C42 with BILLS
44 

•HR 4058 IH

1 reduced carbon rate (including for purposes of 

2 determining the applicable percentage under 

3 sections 3201(a) and 3211(a)(1) of such Code), 

4 and 

5 (B) the rate of tax under subsection (a) of 

6 section 3111 of such Code shall be 6.2 percent 

7 minus one-half of the reduced carbon rate (in8 cluding for purposes of subsections (e) and (f) 

9 of such section and determining the applicable 

10 percentage under section 3221(a) of such 

11 Code). 

12 (b) COORDINATION WITH DEDUCTIONS FOR EM13 PLOYMENT TAXES.— 

14 (1) DEDUCTION IN COMPUTING NET EARNINGS

15 FROM SELF-EMPLOYMENT.—For purposes of apply16 ing section 1402(a)(12) of the Internal Revenue 

17 Code of 1986, the rate of tax imposed by subsection 

18 1401(a) of such Code shall be determined without 

19 regard to the reduction in such rate under this sec20 tion. 

21 (2) INDIVIDUAL DEDUCTION.—In the case of 

22 the taxes imposed by section 1401 of such Code for 

23 any taxable year which begins in the payroll tax car24 bon period, the deduction under section 164(f) with 

25 respect to such taxes shall be equal to the sum of— 


kjohnson on DSK79L0C42 with BILLS
45 

•HR 4058 IH

1 (A) one-half of the portion of such taxes 

2 attributable to the tax imposed by section 

3 1401(a) (determined after the application of 

4 this section), plus 

5 (B) one-half of the portion of such taxes 

6 attributable to the tax imposed by section 

7 1401(b). 

8 (c) REDUCED CARBON RATE.—For purposes of this 

9 section— 

10 (1) IN GENERAL.—The term ‘‘reduced carbon 

11 rate’’ means the number of percentage points deter12 mined by the Secretary to be— 

13 (A) 1 percentage point in the case of any 

14 taxable year which begins during calendar year 

15 2021, and 

16 (B) in the case of any taxable year begin17 ning in a calendar year beginning after calendar 

18 year 2021, the number of percentage points de19 termined by the Secretary to be, for the cal20 endar year the product of— 

21 (i) 12.4, and 

22 (ii) 52.5 percent of amounts of esti23 mated taxes received in the Treasury 

24 under subtitle L of the Internal Revenue 

25 Code of 1986 (relating to greenhouse gas 


kjohnson on DSK79L0C42 with BILLS
46 

•HR 4058 IH

1 emissions), divided by estimated taxes that 

2 would have been received in the Treasury 

3 with respect to a calendar year under sec4 tions 1401(a), 3101(a), 3111(a), and the 

5 applicable percentage of such taxes under 

6 3201(a), 3211(a)(1), and 3221(a), were 

7 this section not in effect. 

8 (2) ESTIMATES.—For purposes of paragraph 

9 (1), the determination of amounts received in the 

10 Treasury shall be made on the basis of estimates by 

11 the Secretary of the Treasury (or the Secretary’s 

12 delegate), and proper adjustments shall be made in 

13 the amounts subsequently estimated to the extent 

14 prior estimates were in excess of or less than actual 

15 receipts. 

16 (3) PUBLICATION OF REDUCED CARBON

17 RATE.—Not later than October 31 of each calendar 

18 year, the Secretary shall publish the reduced carbon 

19 rate determined under this subsection for the suc20 ceeding calendar year. 

21 (d) EMPLOYER NOTIFICATION.—The Secretary of 

22 the Treasury shall notify employers of the payroll tax holi23 day period in any manner the Secretary deems appro24 priate. 

25 (e) TRANSFERS OF FUNDS.— 


kjohnson on DSK79L0C42 with BILLS
47 

•HR 4058 IH

1 (1) TRANSFERS TO FEDERAL OLD-AGE AND

2 SURVIVORS INSURANCE TRUST FUND.—There are 

3 hereby appropriated to the Federal Old-Age and 

4 Survivors Trust Fund and the Federal Disability In5 surance Trust Fund established under section 201 

6 of the Social Security Act (42 U.S.C. 401) amounts 

7 equal to the reduction in revenues to the Treasury 

8 by reason of the application of subsection (a). 

9 Amounts appropriated by the preceding sentence 

10 shall be transferred from the general fund at such 

11 times and in such manner as to replicate to the ex12 tent possible the transfers which would have oc13 curred to such Trust Fund had such amendments 

14 not been enacted. 

15 (2) TRANSFERS TO SOCIAL SECURITY EQUIVA16 LENT BENEFIT ACCOUNT.—There are hereby appro17 priated to the Social Security Equivalent Benefit Ac18 count established under section 15A(a) of the Rail19 road Retirement Act of 1974 (45 U.S.C. 231n–1(a)) 

20 amounts equal to the reduction in revenues to the 

21 Treasury by reason of the application of subsection 

22 (a)(2). Amounts appropriated by the preceding sen23 tence shall be transferred from the general fund at 

24 such times and in such manner as to replicate to the 

25 extent possible the transfers which would have ocVerDate Sep 11 2014 06:18 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 E:\BILLS\H4058.IH H4058

kjohnson on DSK79L0C42 with BILLS
48 

•HR 4058 IH

1 curred to such Account had such amendments not 

2 been enacted. 

3 (3) COORDINATION WITH OTHER FEDERAL

4 LAWS.—For purposes of applying any provision of 

5 Federal law other than the provisions of the Internal 

6 Revenue Code of 1986, the rate of tax in effect 

7 under section 3101(a) of such Code shall be deter8 mined without regard to the reduction in such rate 

9 under this section. 

10 (f) SPECIAL RULE.—Not later than October 1 of 

11 each fiscal year beginning after fiscal year 2021 (January 

12 1, 2021 in the case of fiscal year 2021), from amounts 

13 in the general fund of the Treasury not otherwise appro14 priated, the Commissioner of Social Security shall pay an 

15 amount, equal to 7.5 percent of amounts of taxes received 

16 in the Treasury under subtitle L of the Internal Revenue 

17 Code of 1986 (relating greenhouse gas emissions), to be 

18 distributed equally among each individual entitled to 

19 monthly insurance benefits under title II of the Social Se20 curity Act, or to an annuity under section 2 of the Rail21 road Retirement Act of 1974 for the first month of each 

22 year. 


kjohnson on DSK79L0C42 with BILLS
49 

•HR 4058 IH

1 TITLE III—DISTRIBUTION OF 

2 REVENUES FROM TAXATION 

3 OF GREENHOUSE GAS EMIS4 SIONS 

5 SEC. 301. ESTABLISHMENT OF THE CARBON TRUST FUND. 

6 (a) CREATION OF TRUST FUND.—There is hereby 

7 created in the Treasury of the United States a trust fund 

8 to be known as the ‘‘CARBON Trust Fund’’. 

9 (b) TRANSFERS TO TRUST FUND.—There are hereby 

10 appropriated to the CARBON Trust Fund amounts equiv11 alent to 15 percent of the taxes received in the Treasury 

12 under subtitle L of the Internal Revenue Code of 1986 

13 (as added by title I of this Act). 

14 SEC. 302. APPROPRIATIONS FROM THE CARBON TRUST 

15 FUND. 

16 Amounts in the CARBON Trust Fund for a fiscal 

17 year shall be available, as provided by appropriation Acts, 

18 as follows: 

19 (1) Fifty percent of such amounts shall be 

20 available for State block grants to be used to offset 

21 higher energy costs for low-income households. 

22 (2) Fifty percent of such amounts shall be 

23 available for climate adaptation, carbon sequestra24 tion, energy efficiency, and advanced R&D pro25 grams. 


kjohnson on DSK79L0C42 with BILLS
50 

•HR 4058 IH

1 TITLE IV—AMENDMENTS TO 

2 FEDERAL ENVIRONMENTAL 

3 STATUTES 

4 SEC. 401. AMENDMENTS TO THE CLEAN AIR ACT. 

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

6 U.S.C. 7601) is amended by adding at the end the fol7 lowing: 

8 ‘‘SEC. 330. MORATORIUM AGAINST CERTAIN REGULATIONS 

9 BASED ON GREENHOUSE GAS EFFECTS. 

10 ‘‘(a) FUELS.—Unless specifically authorized in sec11 tion 202, 211, 213, 231, or this section, after a fossil fuel 

12 has passed through a point of taxation as provided in sec13 tion 9901(d) of the Internal Revenue Code of 1986, sub14 ject to subsection (g), the Administrator shall not publish 

15 or enforce any rule limiting the emission of greenhouse 

16 gases from the combustion of that fuel under this Act (or 

17 impose any requirement on any State to limit such emis18 sion) on the basis of the emission’s greenhouse gas effects. 

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

20 section 202, 211, 213, 231, or this section, if emission 

21 of any greenhouse gas is subject to taxation pursuant to 

22 any of sections 9902 through 9903 of the Internal Rev23 enue Code of 1986, the Administrator shall not publish 

24 or enforce any rule limiting such emission under this Act 

25 (or impose any requirement on any State to limit such 


kjohnson on DSK79L0C42 with BILLS
51 

•HR 4058 IH

1 emission) on the basis of the emission’s greenhouse gas 

2 effects. 

3 ‘‘(c) AUTHORIZED REGULATION.—Notwithstanding 

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

5 Administrator’s authority pursuant to any other provision 

6 of this Act— 

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

8 gas because of any adverse impact on health or wel9 fare other than its greenhouse gas effects; 

10 ‘‘(2) in limiting emissions as described in para11 graph (1), to consider the collateral benefits of lim12 iting the emissions because of greenhouse gas ef13 fects; 

14 ‘‘(3) to limit the emission of any other pollutant 

15 that is not a greenhouse gas that the Administrator 

16 determines by rule has heat-trapping properties; or 

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

18 greenhouse gas other than limiting its emission, in19 cluding— 

20 ‘‘(A) monitoring, reporting, and record21 keeping requirements; 

22 ‘‘(B) conducting or supporting investiga23 tions; and 

24 ‘‘(C) information collection. 


kjohnson on DSK79L0C42 with BILLS
52 

•HR 4058 IH

1 ‘‘(d) EXCEPTION FOR CERTAIN GREENHOUSE GAS

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

3 nothing in this section limits the Administrator’s authority 

4 to regulate greenhouse gas emissions from— 

5 ‘‘(1) facilities that are subject to— 

6 ‘‘(A) subparts OOOO or OOOOa of part 

7 60 of title 40, Code of Federal Regulations, as 

8 in effect on January 1, 2018, or 

9 ‘‘(B) would be subject to either subpart 

10 OOOO or subpart OOOOa if those subparts ap11 plied to such facilities regardless of the date on 

12 which construction, modification, or reconstruc13 tion commenced, and 

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

15 section 403.3(r) of title 40, Code of Federal Regula16 tions). 

17 ‘‘(e) DEFINITIONS.—In this section, the terms 

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

19 meanings given to those terms in section 9907 of the In20 ternal Revenue Code of 1986. 

21 ‘‘(f) MORATORIUM EXPIRATION.—The moratoria on 

22 the Administrator publishing or enforcing rules limiting 

23 the emission of greenhouse gases in subsections (a) and 

24 (b) and section 211(c)(5) of this Act shall expire on Janu25 ary 1, 2034. 


kjohnson on DSK79L0C42 with BILLS
53 

•HR 4058 IH

1 ‘‘(g) EXCEPTIONS.— 

2 ‘‘(1) 2024.—Notwithstanding subsections (a) 

3 and (b) and section 211(c)(5) of this Act, if the Ad4 ministrator determines by March 30, 2026, pursuant 

5 to the report required by section 9901(b)(3)(B) of 

6 the Internal Revenue Code of 1986, that total green7 house gas emissions subject to taxation under sec8 tions 9901 through 9903 of such Code during the 

9 period 2021 through 2025 exceed the emission level 

10 specified in section 9901(b)(3)(C) of such Code for 

11 calendar year 2025, then beginning on October 1, 

12 2026, the prohibition in subsections (a) and (b) and 

13 section 211(c)(5) of this Act on publishing or enforc14 ing rules limiting the emission of greenhouse gases 

15 (and imposing any requirement on any State to limit 

16 such emission) shall not apply. 

17 ‘‘(2) 2028.—Notwithstanding subsections (a) 

18 and (b) and section 211(c)(5) of this Act, if the Ad19 ministrator determines by March 30, 2030, pursuant 

20 to the report required by section 9901(b)(3)(B) of 

21 the Internal Revenue Code of 1986, that total green22 house gas emissions subject to taxation under sec23 tions 9901 through 9903 of such Code during the 

24 period 2021 through 2029 exceed the emission level 

25 specified in section 9901(b)(3)(C) of such Code for 


kjohnson on DSK79L0C42 with BILLS
54 

•HR 4058 IH

1 calendar year 2029, then beginning on October 1, 

2 2030, the prohibition in subsections (a) and (b) and 

3 section 211(c)(5) of this Act on publishing or enforc4 ing rules limiting the emission of greenhouse gases 

5 (and imposing any requirement on any State to limit 

6 such emission) shall not apply.’’. 

7 (b) NEW MOTOR VEHICLES AND NEW MOTOR VEHI8 CLE ENGINES.—Section 202(b) of the Clean Air Act (42 

9 U.S.C. 7521(b)) is amended— 

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

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

12 101–549 (104 Stat. 2529)) as paragraph (4); and 

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

14 ‘‘(5) Notwithstanding section 330(a), the Ad15 ministrator may— 

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

17 gas (as defined in section 9907 of the Internal 

18 Revenue Code of 1986) on the basis of the 

19 emission’s greenhouse gas effects (as defined in 

20 section 9907 of the Internal Revenue Code of 

21 1986) from any class or classes of new motor 

22 vehicles or new motor vehicle engines subject to 

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


kjohnson on DSK79L0C42 with BILLS
55 

•HR 4058 IH

1 ‘‘(B) grant a waiver under section 

2 209(b)(1) for standards for the control of 

3 greenhouse gas emissions.’’. 

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

5 U.S.C. 7545(c)) is amended by adding at the end the fol6 lowing new paragraph: 

7 ‘‘(5) Except as required in section 211(o), the Admin8 istrator shall not, pursuant to this subsection, impose on 

9 any manufacturer, processor, or distributor of fuel any re10 quirement for the purpose of reducing the emission of any 

11 greenhouse gas (as defined in section 9907 of the Internal 

12 Revenue Code of 1986) produced by combustion of the 

13 fuel on the basis of the emission’s greenhouse gas effects 

14 (as defined in section 9907 of the Internal Revenue Code 

15 of 1986).’’. 

16 (d) NONROAD ENGINES AND VEHICLES EMISSIONS

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

18 U.S.C. 7547) is amended by adding at the end the fol19 lowing: 

20 ‘‘(e) GREENHOUSE GAS EMISSIONS.—Notwith21 standing subsections (a) and (b) of section 330, the Ad22 ministrator may limit the emission of any greenhouse gas 

23 (as defined in section 9907 of the Internal Revenue Code 

24 of 1986) on the basis of the emission’s greenhouse gas 

25 effects (as defined in section 9907 of the Internal Revenue 


kjohnson on DSK79L0C42 with BILLS
56 

•HR 4058 IH

1 Code of 1986) from any nonroad engines and nonroad ve2 hicles subject to regulation under this section.’’. 

3 (e) AIRCRAFT EMISSION STANDARDS.—Section 231 

4 of the Clean Air Act (42 U.S.C. 757) is amended by add5 ing at the end the following new subsection: 

6 ‘‘(d) Notwithstanding subsections (a) and (b) of sec7 tion 330, the Administrator may limit the emission of any 

8 greenhouse gas (as defined in section 9907 of the Internal 

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

10 greenhouse gas effects (as defined in section 9907 of the 

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

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

13 more stringent than the standards adopted by the Inter14 national Civil Aviation Organization.’’. 

Æ 


kjohnson on DSK79L0C42 with BILLS