I 

113TH CONGRESS 

2D SESSION H. R. 5271 

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 HOUSE OF REPRESENTATIVES 

JULY 30, 2014 

Mr. VAN HOLLEN (for himself, Mr. CARTWRIGHT, Mr. LOWENTHAL, Mr. 

CONNOLLY, Mr. BLUMENAUER, Mr. HOLT, Ms. NORTON, Mr. GRIJALVA, 

Mr. WELCH, and Mr. THOMPSON of California) introduced the following 

bill; which was referred to the Committee on Energy and Commerce, and 

in addition to the Committee on Ways and Means, 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 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 2014’’. 


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1 SEC. 2. FINDINGS. 

2 The Congress finds the following: 

3 (1) Carbon dioxide and other greenhouse gas 

4 emissions continue to rise, with CO2 in the atmos5 phere reaching 400 parts per million in 2013 for the 

6 first time in human history. 

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. 

22 SEC. 3. AUCTION OF CARBON PERMITS AND DISTRIBUTION 

23 OF HEALTHY CLIMATE DIVIDENDS. 

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

25 1986 is amended by adding at the end the following new 

26 subtitle: 


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1 ‘‘Subtitle L—Auction of Carbon 

2 Permits and Distribution of 

3 Healthy Climate Dividends 

‘‘Chapter 101. Cap and Dividend Program Rules. 

‘‘Chapter 102. Healthy Climate Dividends. 

‘‘Chapter 103. Border Adjustments. 

4 ‘‘CHAPTER 101—CAP AND DIVIDEND 

5 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. 

6 ‘‘SEC. 9901. DEFINITIONS. 

7 ‘‘For purposes of this subtitle: 

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

11 ‘‘(2) CARBON PERMIT.—The term ‘carbon per12 mit’ means a carbon permit established by the Sec13 retary under section 9902(a). 

14 ‘‘(3) COVERED ENTITY.—The term ‘covered en15 tity’ means— 

16 ‘‘(A) in the case of crude oil— 

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

18 States which is designed to serve the priVerDate Mar 15 2010 02:34 Aug 05, 2014 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271

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1 mary purpose of processing liquid fuel 

2 from crude oil, and 

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

4 petroleum product (not including crude oil) 

5 into the United States, 

6 ‘‘(B) in the case of coal— 

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

8 United States, and 

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

10 United States, and 

11 ‘‘(C) in the case of natural gas— 

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

13 report to the Energy Information Agency 

14 on Form 176 by reason of delivering nat15 ural gas to an end user, and 

16 ‘‘(ii) any natural gas processor not de17 scribed in clause (i) with respect to sales of 

18 natural gas in the United States. 

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

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

21 product derived therefrom for use as a combustible 

22 fuel offered for sale in United States markets. 

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

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

25 bitumen or bituminous mixture, any oil derived from 


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1 a bitumen or bituminous mixture, and any oil de2 rived from kerogen-bearing sources. 

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

4 market value’ means the average auction price for 

5 carbon permits during the 4 quarters immediately 

6 preceding a failure to surrender, when required 

7 under section 9904, the required number of carbon 

8 permits under such section. 

9 ‘‘(7) STATE.—The term ‘State’ means the sev10 eral States, the District of Columbia, the Common11 wealth of Puerto Rico, the United States Virgin Is12 lands, Guam, American Samoa, the Commonwealth 

13 of the Northern Mariana Islands, and any other 

14 commonwealth, territory, or possession of the United 

15 States. 

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

17 means the calendar year for which a carbon permit 

18 is established under section 9902. 

19 ‘‘SEC. 9902. CARBON PERMITS. 

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

21 with the Administrator, shall establish a separate quantity 

22 of carbon permits for calendar year 2015 and each cal23 endar year thereafter, as set forth under subsection (b). 

24 ‘‘(b) EMISSIONS REDUCTION SCHEDULE.— 


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

2 permits established by the Secretary, in consultation 

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

4 calendar year before 2050 that is between the near5 est target years specified in paragraph (2) preceding 

6 and succeeding such calendar year shall be the quan7 tity of such permits that represents an equal, pro 

8 rata reduction from the preceding year to the suc9 ceeding year. 

10 ‘‘(2) TARGETS.— 

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

12 carbon permits established for 2016 shall be 

13 equal to 10 percent less than the number of 

14 metric tons of carbon dioxide emitted in the 

15 United States in 2005. 

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

17 of carbon permits established for— 

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

19 less than the number of metric tons of car20 bon dioxide emitted in the United States in 

21 2005; 

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

23 less than the number of metric tons of car24 bon dioxide emitted in the United States in 

25 2005; 


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1 ‘‘(iii) 2030 shall be equal to 40 per2 cent less than the number of metric tons 

3 of carbon dioxide emitted in the United 

4 States in 2005; 

5 ‘‘(iv) 2035 shall be equal to 50 per6 cent less than the number of metric tons 

7 of carbon dioxide emitted in the United 

8 States in 2005; 

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

10 less than the number of metric tons of car11 bon dioxide emitted in the United States in 

12 2005; 

13 ‘‘(vi) 2045 shall be equal to 70 per14 cent less than the number of metric tons 

15 of carbon dioxide emitted in the United 

16 States in 2005; and 

17 ‘‘(vii) 2050 shall be equal to 80 per18 cent less than the number of metric tons 

19 of carbon dioxide emitted in the United 

20 States in 2005. 

21 ‘‘(3) REPORTS.— 

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

23 Secretary, after consultation with the Adminis24 trator, will submit a report to Congress making 

25 recommendations concerning the program esVerDate Mar 15 2010 02:34 Aug 05, 2014 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271

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1 tablished under this subtitle for years after 

2 2050, including the quantity of carbon permits 

3 to be established and any reductions that may 

4 be necessary to ensure a healthy climate. 

5 ‘‘(B) AVERTING CATASTROPHIC CLIMATIC

6 IMPACT.—The Secretary shall report to Con7 gress if the Secretary, after consultation with 

8 the Administrator, determines the emissions re9 ductions targets under this subsection should be 

10 revised in order to avert catastrophic climate 

11 impacts. Such report shall include rec12 ommended revisions to the existing emissions 

13 reduction schedule and the basis for those rec14 ommendations. 

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

16 shall assign to each carbon permit established under sub17 section (a) a unique identification number that includes 

18 the vintage year for that carbon permit. 

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

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

21 constitute a property right. 

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

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

24 construed to limit or alter the authority of the 

25 United States, including the Secretary acting pursuVerDate Mar 15 2010 02:34 Aug 05, 2014 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271

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1 ant to statutory authority, to terminate or limit a 

2 carbon permit. 

3 ‘‘(3) OTHER PROVISIONS UNAFFECTED.—Noth4 ing in this subtitle relating to carbon permits issued 

5 under this section shall affect the application of any 

6 other provision of law to a covered entity (including 

7 the Clean Air Act), or the responsibility for a cov8 ered entity to comply with any such provision of law. 

9 Regional and State greenhouse gas initiatives are 

10 not preempted by this subtitle. 

11 ‘‘(e) REGULATIONS.—Not later than June 30, 2015, 

12 the Secretary shall promulgate regulations to carry out the 

13 provisions of this subtitle. 

14 ‘‘SEC. 9903. AUCTIONS. 

15 ‘‘(a) PERIODIC AUCTIONS.—The Secretary shall con16 duct periodic public auctions of carbon permits established 

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

18 least 4 such auctions in each year for which carbon per19 mits are established. 

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

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

22 entities; 

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

24 permits that can be purchased by a single entity at 

25 each auction and an aggregate limit on the total 


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1 amount of permits that can be held by a single enti2 ty at any one time that— 

3 ‘‘(A) reflects anticipated sector and partici4 pant demand; 

5 ‘‘(B) prevents speculation, manipulation, 

6 or hoarding of permits; and 

7 ‘‘(C) does not interfere with normal mar8 ket competition; and 

9 ‘‘(3) have the authority to set a minimum per10 mit price at auction. 

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

12 at auction may be offered at the next quarterly auction 

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

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

15 reserve established under section 9908. 

16 ‘‘SEC. 9904. COMPLIANCE OBLIGATION. 

17 ‘‘(a) IN GENERAL.—Not later than April 1, 2017, 

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

19 surrender to the Secretary a quantity of carbon permits 

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

21 dioxide that the Secretary, in consultation with the Ad22 ministrator, determines would be emitted by the combus23 tion of covered fuels with respect to which the covered en24 tity made the first sale in United States markets during 

25 the previous calendar year. 


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1 ‘‘(b) USE TREATED AS SALE.—For purposes of sub2 section (a), consumption for an emitting use by the cov3 ered entity of covered fuels produced by the covered entity 

4 shall be treated as a first sale. 

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

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

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

8 by the Secretary in consultation with the Administrator, 

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

10 permits under section 9906. 

11 ‘‘SEC. 9905. PENALTY FOR NONCOMPLIANCE. 

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

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

14 9904, one or more of the carbon permits due pursuant 

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

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

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

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

19 obtained by multiplying— 

20 ‘‘(1) the number of carbon permits that the cov21 ered entity failed to surrender by the deadline; by 

22 ‘‘(2) 3 times the fair market value of carbon 

23 permits issued for emissions occurring in the cal24 endar year for which the carbon permits were due. 


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

2 shall be immediately due and payable to the Secretary, 

3 without demand, in accordance with regulations promul4 gated by the Secretary, which shall be issued not later 

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

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

7 payable by the covered entity under this section shall not 

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

9 penalty, or assessment against the covered entity for the 

10 same violation under any other provision of law. 

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

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

13 this section. 

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

15 ‘‘(a) IN GENERAL.—The Secretary shall issue a car16 bon permit to any person who the Secretary, in consulta17 tion with the Administrator, determines has safely and 

18 verifiably captured and sequestered carbon dioxide from 

19 the combustion of covered fuels in the United States. 

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

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

22 the number of metric tons of carbon dioxide so captured 

23 and sequestered. 


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

2 issued under this section shall be in addition to the quan3 tity of permits established under section 9902(a). 

4 ‘‘SEC. 9907. TRADING. 

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

6 of a carbon permit may— 

7 ‘‘(1) hold the carbon permit, subject to the lim8 its established by the Secretary under section 

9 9903(b)(2); or 

10 ‘‘(2) sell, exchange, or transfer the carbon per11 mit to a covered entity consistent with the limits es12 tablished by the Secretary under section 9903(b)(2). 

13 ‘‘(b) EFFECTIVENESS OF CARBON PERMIT TRANS14 FERS.—No transfer of a carbon permit shall be effective 

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

16 responsible official of the transferor, is received and re17 corded by the Secretary in accordance with regulations 

18 promulgated under section 9902(e). 

19 ‘‘(c) CARBON PERMIT TRACKING SYSTEM.—The reg20 ulations promulgated under section 9902(e) shall include 

21 a system for issuing, recording, holding, and tracking car22 bon permits that shall specify all necessary procedures and 

23 requirements for an orderly and competitive functioning 

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1 vide for appropriate publication of the information in the 

2 system on the Internet. 

3 ‘‘SEC. 9908. BANKING AND BORROWING. 

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

5 meet the compliance obligation requirements of section 

6 9904 for emissions in— 

7 ‘‘(1) the vintage year for the carbon permit; or 

8 ‘‘(2) any calendar year subsequent to the vin9 tage year for the carbon permit in accordance with 

10 subsection (b). 

11 ‘‘(b) RESERVE.—The Secretary shall establish a re12 serve for carbon permits. Carbon permits transferred into 

13 the reserve shall be available in the manner determined 

14 by the Secretary when the Secretary determines that price 

15 point for carbon permits determined under subsection (d) 

16 is met and additional carbon permit supply is needed to 

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

18 used on a first in, first out basis. 

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

20 unless— 

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

22 section 9904 or section 9907(a)(3); 

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

24 after being transferred into the reserve; or 


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1 ‘‘(3) the Secretary determines by regulation 

2 that expiration is necessary to ensure the authen3 ticity and integrity of carbon permits or the carbon 

4 permit tracking system. 

5 ‘‘(d) BORROWING FUTURE VINTAGE YEAR CARBON

6 PERMITS.— 

7 ‘‘(1) IN GENERAL.—If the auction price for car8 bon permits increases by more than 50 percent 

9 above the average auction price for carbon permits 

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

11 third year for which auctions are conducted, the av12 erage auction price for carbon permits during the 

13 preceding auctions), the Secretary shall auction as 

14 many additional carbon permits as are necessary to 

15 stabilize the auction price. 

16 ‘‘(2) SPECIAL RULES.— 

17 ‘‘(A) COORDINATION WITH RESERVE.—Ad18 ditional permits may not be auctioned under 

19 paragraph (1) until after all available permits 

20 in the reserve for carbon permits established 

21 under subsection (b) have been used. 

22 ‘‘(B) REDUCTION IN VINTAGE YEAR PER23 MITS.—Any carbon permits made available 

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1 bon permits made available in vintage years 

2 2030 through 2050 as set forth in section 

3 9902, and the Secretary shall reduce the num4 ber of carbon permits by an equal percentage in 

5 each of those vintage years. 

6 ‘‘CHAPTER 102—HEALTHY CLIMATE 

7 DIVIDENDS 

‘‘Sec. 9911. Healthy Climate Trust Fund. 

‘‘Sec. 9912. Healthy Climate Dividend Payments. 

‘‘Sec. 9913. Transparency. 

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

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

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

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

12 amounts as may be appropriated to such trust fund as 

13 provided for in this section. 

14 ‘‘(b) TRANSFERS.— 

15 ‘‘(1) PROCEED AMOUNTS.—There are appro16 priated to the Healthy Climate Trust Fund amounts 

17 equivalent to funds received as proceeds under sec18 tion 9903. 

19 ‘‘(2) PENALTY AMOUNTS.—There are appro20 priated to the Healthy Climate Trust Fund amounts 

21 equivalent to funds received as penalties under sec22 tion 9905. 

23 ‘‘(c) EXPENDITURES.— 


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1 ‘‘(1) ADMINISTRATIVE EXPENSES.—Such 

2 amounts as may be necessary from the Healthy Cli3 mate Trust Fund shall be available to pay the ad4 ministrative expenses necessary to carry out this sec5 tion for each month, but not exceeding the amount 

6 of interest credited to the trust fund under section 

7 9602. 

8 ‘‘(2) HEALTHY CLIMATE DIVIDEND PAY9 MENTS.—Amounts in the Healthy Climate Trust 

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

11 shall be available for making Healthy Climate Divi12 dend Payments under section 9912. 

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

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

15 ‘‘(1) HEALTHY CLIMATE DIVIDEND PAY16 MENT.—The term ‘Healthy Climate Dividend Pay17 ment’ means the individual pro-rata share, as deter18 mined by the Secretary, of amounts available for any 

19 quarter in the Healthy Climate Trust Fund under 

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

21 sentence, the amounts available for any quarter shall 

22 be the fraction of the total amount made available 

23 from an auction conducted under section 9903— 

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


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1 ‘‘(B) the denominator of which is the num2 ber of quarters in the period beginning with the 

3 quarter in which such auction is conducted and 

4 ending with the quarter before the quarter in 

5 which the next such auction is scheduled to be 

6 conducted. 

7 ‘‘(2) ELIGIBLE INDIVIDUAL.— 

8 ‘‘(A) IN GENERAL.—The term ‘eligible in9 dividual’ means, with respect to any quarter, 

10 any individual with a valid social security num11 ber (other than a nonresident alien individual) 

12 who is lawfully present in the United States for 

13 such quarter, as determined and verified by the 

14 Secretary in consultation with any other Fed15 eral entity the Secretary determines appro16 priate. 

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

18 not to be treated as an eligible individual. 

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

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

21 the Secretary shall make a Healthy Climate Dividend Pay22 ment not later than the end of the calendar quarter fol23 lowing the calendar quarter in which such amounts are 

24 appropriated to the Healthy Climate Trust Fund under 

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1 vidual for that quarter. Such payments shall be made by 

2 electronic means to the maximum extent practicable. 

3 ‘‘(c) EXCLUSION FROM GROSS INCOME.—Gross in4 come shall not include any Healthy Climate Dividend paid 

5 under this section. 

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

7 such regulations and other guidance as may be necessary 

8 or appropriate to carry out this section. 

9 ‘‘SEC. 9913. TRANSPARENCY. 

10 ‘‘(a) REPORT TO CONGRESS.—Not later than Feb11 ruary 1, 2017, and at least annually thereafter, the Sec12 retary shall transmit to Congress a report accounting for 

13 the disposition of amounts in the Healthy Climate Trust 

14 Fund in the previous calendar year. 

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

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

17 of this subtitle, the Secretary shall establish and maintain 

18 a website to provide the public with information on the 

19 disposition of any amounts in the Healthy Climate Trust 

20 Fund. 

21 ‘‘CHAPTER 103—BORDER ADJUSTMENTS 

‘‘Sec. 9921. Carbon equivalency fee. 

‘‘Sec. 9922. Definitions. 

‘‘Sec. 9923. Sense of Congress. 

22 ‘‘SEC. 9921. CARBON EQUIVALENCY FEE. 

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

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1 sponsible for U.S. Customs and Border Control on imports 

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

3 equivalency fee shall be equal to the cost that domestic 

4 producers of a comparable carbon-intensive good incur as 

5 a result of— 

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

7 permits by covered entities under this subtitle; and 

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

9 of carbon-intensive goods used in the production of 

10 the comparable carbon-intensive good. 

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

12 shall pay without interest to persons exporting from the 

13 United States carbon-intensive goods produced in the 

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

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

16 good incur as a result of— 

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

18 permits by covered entities under this subtitle; and 

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

20 of carbon-intensive goods used in the production of 

21 the comparable carbon-intensive good. 

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

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

24 ‘‘(1) an international agreement requiring coun25 tries that emit greenhouse gases and produce carVerDate Mar 15 2010 02:34 Aug 05, 2014 Jkt 039200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271

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1 bon-intensive goods for export markets to adopt 

2 equivalent measures comes into effect; or 

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

4 equivalent measures, as determined by the Sec5 retary, in consultation with the Secretary of State. 

6 ‘‘SEC. 9922. DEFINITIONS. 

7 ‘‘In this chapter: 

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

9 ‘carbon-intensive good’ means a good that, as identi10 fied by the Secretary, in consultation with the Ad11 ministrator, by rule— 

12 ‘‘(A) is a primary product; or 

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

14 or more primary products are inputs and the 

15 cost of production of which in the United States 

16 is significantly increased by reason of the re17 quirements under this subtitle. 

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

19 product’ means— 

20 ‘‘(A) iron, steel, steel mill products (includ21 ing pipe and tube), aluminum, cement, glass 

22 (including flat, container, and specialty glass 

23 and fiberglass), pulp, paper, chemicals, or in24 dustrial ceramics; and 


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1 ‘‘(B) any other manufactured product that 

2 the Secretary, in consultation with the Adminis3 trator, determines— 

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

5 manufacture; and 

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

7 manufacture of the product, direct and in8 direct greenhouse gas emissions that are 

9 comparable (on an emissions-per-dollar of 

10 output basis) to emissions generated in the 

11 manufacture or production of a primary 

12 product identified in subparagraph (A). 

13 ‘‘(3) EQUIVALENT MEASURE.—The term ‘equiv14 alent measure’ means a tax, or other regulatory re15 quirement that imposes a cost, on manufacturers of 

16 carbon-intensive goods located outside the United 

17 States, by reason of greenhouse gas emissions in the 

18 production of such goods by such manufacturers, ap19 proximately equal to the cost imposed by this sub20 title on manufacturers of comparable carbon-inten21 sive goods located in the United States. 

22 ‘‘SEC. 9923. SENSE OF CONGRESS. 

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

24 should work proactively under the United Nations Frame25 work Convention on Climate Change and in other approVerDate Mar 15 2010 02:34 Aug 05, 2014 Jkt 039200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271

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1 priate fora, to establish binding agreements committing all 

2 major greenhouse gas emitting countries and countries 

3 with globally competitive producers of carbon-intensive 

4 goods to contribute equitably to the reduction of global 

5 greenhouse gas emissions on a schedule and order of mag6 nitude necessary to stabilize the climate.’’. 

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

8 for the Internal Revenue Code of 1986 is amended by add9 ing at the end the following new item: 

‘‘Subtitle L. Auction of Carbon Permits and Distribution of Healthy Climate 

Dividends.’’. 

10 SEC. 4. NON-AUCTION GREENHOUSE GASES. 

11 (a) DEFINITIONS.—In this section: 

12 (1) The term ‘‘Administrator’’ means the Ad13 ministrator of the Environmental Protection Agency. 

14 (2) The term ‘‘non-auction greenhouse gas’’ re15 fers to the gases included on the list in effect under 

16 subsection (b). 

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

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

19 the date of the enactment of this Act, the Adminis20 trator, by rule, shall finalize and publish a list 

21 that— 

22 (A) consists of the anthropogenically emit23 ted gases that are determined by the Adminis24 trator to contribute to global warming; and 


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

2 (i) carbon dioxide emitted by the com3 bustion of a covered fuel (as such term is 

4 defined in section 9901 of the Internal 

5 Revenue Code of 1986, as added by section 

6 3(a) of this Act); or 

7 (ii) directly attributable to the produc8 tion of animals for food or food products. 

9 (2) UPDATES.—The Administrator shall peri10 odically review and, as appropriate, update the list 

11 under paragraph (1). 

12 (c) REGULATIONS.— 

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

14 in the Administrator by the Clean Air Act (42 

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

16 (other than this section), the Administrator shall 

17 promulgate regulations addressing the contribution 

18 of non-auction greenhouse gases to global warming. 

19 (2) INTERNATIONAL COMPETITIVENESS.—In 

20 promulgating regulations under this subsection, the 

21 Administrator shall take into consideration the effect 

22 of such regulations on the international competitive23 ness of businesses and industries of the United 

24 States. 

25 (d) SCHEDULE.— 


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1 (1) IN GENERAL.—The regulations under sub2 section (c) shall ensure that— 

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

4 of enactment of this Act, requirements take ef5 fect to regulate sources which, collectively, emit 

6 not less than 25 percent of non-auction green7 house gases emitted in the United States; 

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

9 of enactment of this Act, requirements take ef10 fect to regulate sources which, collectively, emit 

11 not less than 50 percent of non-auction green12 house gases emitted in the United States; 

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

14 of enactment of this Act, requirements take ef15 fect to regulate sources which, collectively, emit 

16 not less than 75 percent of non-auction green17 house gases emitted in the United States; and 

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

19 of enactment of this Act, requirements take ef20 fect to regulate sources which, collectively, emit 

21 100 percent of non-auction greenhouse gases 

22 emitted in the United States. 

23 (2) BASELINE.—The percentages specified in 

24 paragraph (1) shall be applied relative to the aggre25 gate quantity of non-auction greenhouse gases emitVerDate Mar 15 2010 02:34 Aug 05, 2014 Jkt 039200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271

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1 ted in the United States during the calendar year in 

2 which the initial list under subsection (b)(1) is re3 quired to be finalized by such subsection. 

4 (e) PRIORITIES.—In determining priorities for regu5 lating the emissions of non-auction greenhouse gases 

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

7 (1) the degree to which the gases involved con8 tribute to global warming; and 

9 (2) the speed with which a given reduction 

10 would contribute to stabilizing the climate. 

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

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

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

14 or the failure of the Administrator to perform a non-dis15 cretionary act or duty under this section, to the same ex16 tent and in the same manner as such provisions apply with 

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

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

19 or duty described in such subsection. 

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

21 after the date of the enactment of this Act, the Adminis22 trator shall submit a report to the Congress identifying 

23 any additions or modifications to statutory provisions 

24 which are needed for the Administrator to effectively adVerDate Mar 15 2010 02:34 Aug 05, 2014 Jkt 039200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271

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1 dress the contribution of non-auction greenhouse gases to 

2 global warming. 

3 SEC. 5. DISCLOSURE OF INFORMATION. 

4 (a) LIMITED DISCLOSURE OF IDENTITY.—Subsection 

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

6 is amended by adding at the end the following new para7 graph: 

8 ‘‘(23) LIMITED DISCLOSURE OF IDENTITY IN9 FORMATION RELATING TO HEALTHY CLIMATE DIVI10 DEND PAYMENTS.— 

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

12 Individual identity information shall, without 

13 written request, be open to inspection by or dis14 closure to officers and employees of the Depart15 ment of the Treasury whose official duties re16 quire such inspection or disclosure for purposes 

17 of section 9912. 

18 ‘‘(B) COMMISSIONER OF SOCIAL SECU19 RITY.—The Commissioner of Social Security 

20 shall, on written request, disclose to officers 

21 and employees of the Department of the Treas22 ury individual identity information which has 

23 been disclosed to the Social Security Adminis24 tration as provided by paragraph (1) or (5). 


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1 ‘‘(C) RESTRICTION ON DISCLOSURE.—In2 formation disclosed under this paragraph shall 

3 be disclosed only for purposes of, and to the ex4 tent necessary in, carrying out section 9912.’’. 

5 (b) CONFORMING AMENDMENTS.—Section 

6 6103(p)(3)(A) of the Internal Revenue Code of 1986 is 

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

8 (21)’’. 

9 SEC. 6. EFFECTIVE DATE. 

10 The amendments made by this Act shall take effect 

11 on the date of the enactment of this Act. 

Æ 


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