I 

118TH CONGRESS 

1ST SESSION H. R. 5744 

To create a Carbon Dividend Trust Fund for the American people in order 

to encourage market-driven innovation of clean energy technologies and 

market efficiencies which will reduce harmful pollution and leave a 

healthier, more stable, and more prosperous Nation for future generations. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 27, 2023 

Mr. CARBAJAL (for himself and Mr. PETERS) 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 Foreign Affairs, 

for a period to be subsequently determined by the Speaker, in each case 

for consideration of such provisions as fall within the jurisdiction of the 

committee concerned 

A BILL 

To create a Carbon Dividend Trust Fund for the American 

people in order to encourage market-driven innovation 

of clean energy technologies and market efficiencies 

which will reduce harmful pollution and leave a healthier, 

more stable, and more prosperous Nation for future generations. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Energy Innovation and 

3 Carbon Dividend Act of 2023’’. 

4 SEC. 2. FINDINGS. 

5 The Congress finds that— 

6 (1) efficient markets strengthen our economy 

7 and benefit our Nation by encouraging competition, 

8 innovation, and technological progress; 

9 (2) efficient markets should reflect all costs of 

10 goods to ensure that they advance America’s pros11 perity and national interests; 

12 (3) emissions of carbon pollution and other 

13 harmful pollutants into our Nation’s air impose sub14 stantial costs on all Americans and on future gen15 erations; and 

16 (4) creation of a Carbon Dividend Trust Fund, 

17 to be distributed to the American people, will make 

18 markets more efficient, create jobs, and stimulate 

19 competition, innovation, and technological progress 

20 that benefit all Americans and future generations. 

21 SEC. 3. CARBON DIVIDENDS AND CARBON FEE. 

22 The Internal Revenue Code of 1986 is amended by 

23 adding at the end the following new subtitle: 


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1 ‘‘Subtitle L—CARBON DIVIDENDS 

2 AND CARBON FEE 

‘‘CHAPTER 101. CARBON FEES. 

‘‘CHAPTER 102. CARBON BORDER FEE ADJUSTMENT. 

3 ‘‘CHAPTER 101—CARBON FEES 

‘‘Sec. 9901. Definitions. 

‘‘Sec. 9902. Carbon fee. 

‘‘Sec. 9903. Emissions reduction schedule. 

‘‘Sec. 9904. Decommissioning of carbon fee. 

‘‘Sec. 9905. Carbon capture and sequestration. 

‘‘Sec. 9906. Administrative authority. 

4 ‘‘SEC. 9901. DEFINITIONS. 

5 ‘‘For purposes of this subtitle: 

6 ‘‘(a) ADMINISTRATOR.—The term ‘Administrator’ 

7 means the Administrator of the Environmental Protection 

8 Agency. 

9 ‘‘(b) CARBON DIOXIDE EQUIVALENT OR CO2-e.—The 

10 term ‘carbon dioxide equivalent’ or ‘CO2-e’ means the 

11 number of metric tons of carbon dioxide emissions with 

12 the same global warming potential as one metric ton of 

13 another greenhouse gas. 

14 ‘‘(c) CARBON-INTENSIVE PRODUCT.—The term ‘car15 bon-intensive product’ means, as identified by the Sec16 retary by rule— 

17 ‘‘(1) for purposes of this chapter— 

18 ‘‘(A) any manufactured or agricultural 

19 product which the Secretary in consultation 

20 with the Administrator determines is emissionsVerDate Sep 11 2014 23:09 Sep 30, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5744.IH H5744

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1 intensive and trade-exposed, except that no cov2 ered fuel is a carbon-intensive product, and 

3 ‘‘(B) until such time that the Secretary 

4 promulgates rules identifying carbon-intensive 

5 products, the following shall be considered car6 bon-intensive products: iron, steel, steel mill 

7 products (including pipe and tube), aluminum, 

8 cement, glass (including flat, container, and 

9 specialty glass and fiberglass), pulp, paper, 

10 chemicals, or industrial ceramics, and 

11 ‘‘(2) for purposes of chapter 102, any economic 

12 sector, or product from that sector, which the Sec13 retary in consultation with the Administrator deter14 mines is prone to carbon leakage because it is emis15 sions-intensive and trade-exposed, along with other 

16 pertinent criteria, except that no covered fuel is a 

17 carbon-intensive product. 

18 ‘‘(d) CARBON LEAKAGE.—The term ‘carbon leakage’ 

19 means an increase of global greenhouse gas emissions 

20 which are substantially due to the relocation of greenhouse 

21 gas sources from the United States to jurisdictions which 

22 lack comparable controls upon greenhouse gas emissions. 

23 ‘‘(e) COST OF CARBON OR CARBON COSTS.—The 

24 term ‘cost of carbon’ or ‘carbon costs’ means a national 

25 or sub-national government policy which explicitly places 


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1 a price on greenhouse gas pollution and shall be limited 

2 to either a tax on greenhouse gases or a system of cap3 and-trade. The cost of carbon is expressed as the price 

4 per metric ton of CO2-e. 

5 ‘‘(f) COVERED ENTITY.—The term ‘covered entity’ 

6 means— 

7 ‘‘(1) in the case of crude oil— 

8 ‘‘(A) a refinery operating in the United 

9 States, and 

10 ‘‘(B) any importer of any petroleum or pe11 troleum product into the United States, 

12 ‘‘(2) in the case of coal— 

13 ‘‘(A) any coal mining operation in the 

14 United States, and 

15 ‘‘(B) any importer of coal into the United 

16 States, 

17 ‘‘(3) in the case of natural gas— 

18 ‘‘(A) any entity entering pipeline quality 

19 natural gas into the natural gas transmission 

20 system, and 

21 ‘‘(B) any importer of natural gas into the 

22 United States, and 

23 ‘‘(4) any entity or class of entities which, as de24 termined by the Secretary, is transporting, selling, 

25 or otherwise using a covered fuel in a manner which 


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1 emits a greenhouse gas to the atmosphere and which 

2 has not been covered by the carbon fee or the carbon 

3 border fee adjustment. 

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

5 means crude oil, natural gas, coal, or any other product 

6 derived from crude oil, natural gas, or coal which shall 

7 be used so as to emit greenhouse gases to the atmosphere. 

8 ‘‘(h) CRUDE OIL.—The term ‘crude oil’ means 

9 unrefined petroleum. 

10 ‘‘(i) EXPORT.—The term ‘export’ means to transport 

11 a product from within the jurisdiction of the United States 

12 to persons outside the United States. 

13 ‘‘(j) FOSSIL FUEL.—The term ‘fossil fuel’ means 

14 coal, coal products, petroleum, petroleum products, or nat15 ural gas. 

16 ‘‘(k) FULL FUEL CYCLE GREENHOUSE GAS EMIS17 SIONS.—The term ‘full fuel cycle greenhouse gas emis18 sions’ means the greenhouse gas content of a covered fuel 

19 plus that covered fuel’s upstream greenhouse gas emis20 sions. 

21 ‘‘(l) GLOBAL WARMING POTENTIAL.—The term 

22 ‘global warming potential’ means the ratio of the time23 integrated radiative forcing from the instantaneous release 

24 of one kilogram of a trace substance relative to that of 

25 one kilogram of carbon dioxide. 


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1 ‘‘(m) GREENHOUSE GAS.—The term ‘greenhouse 

2 gas’ means carbon dioxide (CO2), methane (CH4), nitrous 

3 oxide (N2O), and other gases as defined by rule of the 

4 Administrator. 

5 ‘‘(n) GREENHOUSE GAS CONTENT.—The term 

6 ‘greenhouse gas content’ means the amount of greenhouse 

7 gases of a product or a fuel, expressed in metric tons of 

8 CO2-e, which would be emitted to the atmosphere by the 

9 use of a covered fuel and shall include, nonexclusively, 

10 emissions of carbon dioxide (CO2), nitrous oxide (N2O), 

11 methane (CH4), and other greenhouse gases as identified 

12 by rule of the Administrator. 

13 ‘‘(o) GREENHOUSE GAS EFFECT.—The term ‘green14 house gas effect’ means the adverse effects of greenhouse 

15 gases on health or welfare caused by the greenhouse gas’s 

16 heat-trapping potential or its effect on ocean acidification. 

17 ‘‘(p) IMPORT.—Irrespective of any other definition in 

18 law or treaty, the term ‘import’ means to land on, bring 

19 into, or introduce into any place subject to the jurisdiction 

20 of the United States. 

21 ‘‘(q) PETROLEUM.—The term ‘petroleum’ means oil 

22 removed from the earth or the oil derived from tar sands 

23 or shale. 

24 ‘‘(r) PRODUCTION GREENHOUSE GAS EMISSIONS.— 

25 The term ‘production greenhouse gas emissions’ means 


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1 the quantity of greenhouse gases, expressed in metric tons 

2 of CO2-e, emitted to the atmosphere resulting from, non3 exclusively, the production, manufacture, assembly, trans4 portation, or financing of a product. 

5 ‘‘(s) UPSTREAM GREENHOUSE GAS EMISSIONS.— 

6 The term ‘upstream greenhouse gas emissions’ means the 

7 quantity of greenhouse gases, expressed in metric tons of 

8 CO2-e, emitted to the atmosphere resulting from, non9 exclusively, the extraction, processing, transportation, fi10 nancing, or other preparation of a covered fuel for use. 

11 ‘‘SEC. 9902. CARBON FEE. 

12 ‘‘(a) CARBON FEE.—There is hereby imposed a car13 bon fee on any covered entity’s emitting use, or sale or 

14 transfer for an emitting use, of any covered fuel. 

15 ‘‘(b) AMOUNT OF THE CARBON FEE.—The carbon 

16 fee imposed by this section is an amount equal to— 

17 ‘‘(1) the greenhouse gas content of the covered 

18 fuel, multiplied by 

19 ‘‘(2) the carbon fee rate. 

20 ‘‘(c) CARBON FEE RATE.—For purposes of this sec21 tion— 

22 ‘‘(1) IN GENERAL.—The carbon fee rate, with 

23 respect to any use, sale, or transfer during a cal24 endar year, shall be— 


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1 ‘‘(A) in the case of calendar year 2023, 

2 $15 per metric ton of CO2-e, and 

3 ‘‘(B) except as provided in paragraph (2), 

4 in the case of any calendar year thereafter— 

5 ‘‘(i) the carbon fee rate in effect 

6 under this subsection for the preceding cal7 endar year, plus 

8 ‘‘(ii) $10 per metric ton of CO2-e. 

9 ‘‘(2) EXCEPTIONS.— 

10 ‘‘(A) INCREASED CARBON FEE RATE

11 AFTER MISSED ANNUAL EMISSIONS REDUCTION

12 TARGET.—In the case of any year immediately 

13 following a year for which the Secretary deter14 mines under section 9903(b) that the actual 

15 emissions of greenhouse gases from covered 

16 fuels exceeded the emissions reduction target 

17 for the previous year, paragraph (1)(B)(ii) shall 

18 be applied by substituting ‘$15’ for the dollar 

19 amount otherwise in effect for the calendar year 

20 under such paragraph. 

21 ‘‘(B) CESSATION OF CARBON FEE RATE IN22 CREASE AFTER CERTAIN EMISSION REDUCTIONS

23 ACHIEVED.—In the case of any year imme24 diately following a year for which the Secretary 

25 determines under 9903(b) that actual emissions 


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1 of greenhouse gases from covered fuels is not 

2 more than 10 percent of the greenhouse gas 

3 emissions from covered fuels during the year 

4 2005, paragraph (1)(B)(ii) shall be applied by 

5 substituting ‘$0’ for the dollar amount other6 wise in effect for the calendar year under such 

7 paragraph. 

8 ‘‘(3) INFLATION ADJUSTMENT.—In the case of 

9 any calendar year after 2023, each of the dollar 

10 amounts in paragraphs (1)(B) and (2)(A) shall be 

11 increased by an amount equal to— 

12 ‘‘(A) such dollar amount, multiplied by 

13 ‘‘(B) the cost-of-living adjustment deter14 mined under section 1(f)(3) for the calendar 

15 year, determined by substituting ‘calendar year 

16 2022’ for ‘calendar year 2016’ in subparagraph 

17 (A)(ii) thereof. 

18 ‘‘(d) EXEMPTION AND REFUND.—The Secretary 

19 shall prescribe such rules as are necessary to ensure the 

20 fee imposed by this section is not imposed with respect 

21 to any nonemitting use, or any sale or transfer for a non22 emitting use, including rules providing for the refund of 

23 any carbon fee paid under this section with respect to any 

24 such use, sale, or transfer. 

25 ‘‘(e) EXEMPTIONS.— 


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1 ‘‘(1) AGRICULTURE.— 

2 ‘‘(A) FUEL.—If any covered fuel or its de3 rivative is used on a farm for a farming pur4 pose, the Secretary shall pay (without interest) 

5 to the ultimate purchaser of such covered fuel 

6 or its derivative, the total amount of carbon 

7 fees previously paid upon that covered fuel or 

8 its derivative, as specified by rule of the Sec9 retary. 

10 ‘‘(B) FARM, FARMING USE, AND FARMING

11 PURPOSE.—The terms ‘farm’, ‘farming use’, 

12 and ‘farming purpose’ shall have the respective 

13 meanings given such terms under section 

14 6420(c). 

15 ‘‘(C) OTHER GREENHOUSE GASES EMIS16 SIONS FROM AGRICULTURE.—The carbon fee 

17 shall not be levied upon non-fossil fuel green18 house gas emissions which occur on a farm. 

19 ‘‘(2) ARMED FORCES OF THE UNITED

20 STATES.—If any covered fuel or its derivative is 

21 used by the Armed Forces of the United States as 

22 supplies for vessels of war, vehicles, or electrical 

23 power generation equipment, the Secretary shall pay 

24 (without interest) to the ultimate purchaser of such 

25 covered fuel or its derivative, the total amount of 


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1 carbon fees previously paid upon that covered fuel or 

2 its derivative, as specified by rule of the Secretary. 

3 ‘‘SEC. 9903. EMISSIONS REDUCTION SCHEDULE. 

4 ‘‘(a) IN GENERAL.—An emissions reduction schedule 

5 for greenhouse gas emissions from covered fuels is hereby 

6 established, as follows: 

7 ‘‘(1) REFERENCE YEAR.—The net greenhouse 

8 gas emissions during the year 2005 shall be the ref9 erence amount of emissions and shall be determined 

10 from the ‘Inventory of U.S. Greenhouse Gas Emis11 sions and Sinks: 1990–2021’ published by the Envi12 ronmental Protection Agency in April of 2023. 

13 ‘‘(2) EMISSIONS REDUCTION TARGET.—The 

14 first emission reduction target shall be for the year 

15 2025. The emission target for each year thereafter 

16 shall be the previous year’s target emissions minus 

17 a percentage of emissions during the reference year 

18 determined in accordance with the following table: 

‘‘Year Emissions Reduction Target 

2005 Reference year 

2023 to 2024 No emissions reduction target 

2025 to 2030 8 percent of 2005 emissions per year 

2031 to 2050 2.5 percent of 2005 emissions per year. 

19 ‘‘(b) ADMINISTRATIVE DETERMINATION.—Not later 

20 than 60 days after the beginning of each calendar year 


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1 beginning after the enactment of this section, the Sec2 retary, in consultation with the Administrator, shall deter3 mine whether actual emissions of greenhouse gases from 

4 covered fuels exceeded the emissions reduction target for 

5 the preceding calendar year. The Secretary shall make 

6 such determination using the same, or appropriately up7 dated, greenhouse gas accounting method as was used to 

8 determine the net greenhouse gas emissions in the ‘Inven9 tory of U.S. Greenhouse Gas Emissions and Sinks: 1990– 

10 2021’ published by the Environmental Protection Agency 

11 in April of 2023. 

12 ‘‘SEC. 9904. DECOMMISSIONING OF CARBON FEE. 

13 ‘‘(a) IN GENERAL.—At such time that— 

14 ‘‘(1) the Secretary determines under 9903(b) 

15 that actual emissions of greenhouse gases from cov16 ered fuels is not more than 10 percent of the green17 house gas emissions during the year 2005, and 

18 ‘‘(2) the monthly carbon dividend payable to an 

19 adult eligible individual has been less than $20 for 

20 3 consecutive years, 

21 the Secretary shall decommission in an orderly manner 

22 programs administering the carbon fee, the carbon border 

23 fee adjustment, and the Carbon Dividend Trust Fund. 


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1 ‘‘(b) INFLATION ADJUSTMENT.—In the case of any 

2 calendar year after 2023, the $20 amount under sub3 section (a)(2) shall be increased by an amount equal to— 

4 ‘‘(1) such dollar amount, multiplied by 

5 ‘‘(2) cost-of-living adjustment determined under 

6 section 1(f)(3) for the calendar year, determined by 

7 substituting ‘calendar year 2022’ for ‘calendar year 

8 2016’ in subparagraph (A)(ii) thereof. 

9 ‘‘SEC. 9905. CARBON CAPTURE AND SEQUESTRATION. 

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

11 with the Administrator and the Secretary of Energy, shall 

12 prescribe regulations for making payments as provided in 

13 subsection (b) to qualified facilities which capture and se14 quester qualified carbon dioxide or sequester qualified car15 bon dioxide obtained from one or more qualified facilities. 

16 ‘‘(b) PAYMENT AMOUNTS.— 

17 ‘‘(1) IN GENERAL.—The Secretary shall make 

18 payments to a qualified facility in the same manner 

19 as if such payment was a refund of an overpayment 

20 of the carbon fee imposed by section 9902, in cases 

21 in which such qualified facility— 

22 ‘‘(A) uses any covered fuel— 

23 ‘‘(i) with respect to which the carbon 

24 fee has been paid, and 


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1 ‘‘(ii) which results in the emission of 

2 qualified carbon dioxide, 

3 ‘‘(B) captures such emitted, or an equiva4 lent amount of, qualified carbon dioxide, and 

5 ‘‘(C)(i) sequesters such qualified carbon di6 oxide in a manner which is safe, permanent, 

7 and in compliance with any applicable local, 

8 State, and Federal laws, or 

9 ‘‘(ii) utilizes such qualified carbon dioxide 

10 or an equivalent amount of carbon dioxide in a 

11 manner provided in paragraph (3)(C). 

12 ‘‘(2) AMOUNT OF REFUND.—The payment de13 termined under this section shall be an amount 

14 equal to the lesser of— 

15 ‘‘(A)(i) the adjusted metric tons of quali16 fied carbon dioxide captured and sequestered or 

17 utilized, multiplied by 

18 ‘‘(ii) the carbon fee rate during the year in 

19 which the carbon fee was imposed by section 

20 9902 upon the covered fuel to which such car21 bon dioxide relates, or 

22 ‘‘(B) the amount of the carbon fee imposed 

23 by section 9902 with respect to such covered 

24 fuel. 


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1 ‘‘(3) DEFINITIONS AND SPECIAL RULES.—For 

2 purposes of this section— 

3 ‘‘(A) QUALIFIED CARBON DIOXIDE; QUALI4 FIED FACILITY.— 

5 ‘‘(i) QUALIFIED CARBON DIOXIDE.— 

6 The term ‘qualified carbon dioxide’ has the 

7 same meaning given such term under sec8 tion 45Q(c). 

9 ‘‘(ii) QUALIFIED FACILITY.—The term 

10 ‘qualified facility’ means any industrial fa11 cility at which carbon capture equipment is 

12 placed in service. 

13 ‘‘(B) ADJUSTED TOTAL METRIC TONS.— 

14 The adjusted total metric tons of qualified car15 bon dioxide captured and sequestered or utilized 

16 shall be the total metric tons of qualified carbon 

17 dioxide captured and sequestered or utilized, re18 duced by the amount of any carbon dioxide like19 ly to escape and be emitted into the atmosphere 

20 due to imperfect storage technology or other21 wise, as determined by the Secretary in con22 sultation with the Administrator. 

23 ‘‘(C) UTILIZATION.—The Secretary, in 

24 consultation with the Administrator, shall es25 tablish regulations providing for the methods 


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1 and processes by which qualified carbon dioxide 

2 may be utilized so as to exclude that qualified 

3 carbon dioxide safely and permanently from the 

4 atmosphere. Utilization may include the produc5 tion of substances such as but not limited to 

6 plastics and chemicals. Such regulations shall 

7 minimize the escape or further emission of the 

8 qualified carbon dioxide into the atmosphere. 

9 ‘‘(D) SEQUESTRATION.—Not later than 

10 540 days after the date of the enactment of this 

11 section, the Secretary, in consultation with the 

12 Administrator, shall prescribe regulations iden13 tifying the conditions under which carbon diox14 ide may be safely and permanently sequestered. 

15 ‘‘(4) COORDINATION WITH CREDIT FOR CARBON

16 DIOXIDE SEQUESTRATION.—At such time that the 

17 Secretary prescribes regulations implementing this 

18 section, no payment under this section shall be al19 lowed to a taxpayer to whom a credit has been al20 lowed in the same taxable year under section 45Q. 

21 ‘‘SEC. 9906. ADMINISTRATIVE AUTHORITY. 

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

23 with the Administrator shall prescribe such regulations, 

24 and other guidance, as may be necessary to carry out the 


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1 purposes of this subtitle and assess and collect the carbon 

2 fee imposed by section 9902. 

3 ‘‘(b) SPECIFICALLY.—Such regulations and guidance 

4 shall include— 

5 ‘‘(1) the identification of an effective point in 

6 the production, distribution, or use of a covered fuel 

7 for collecting such carbon fee, in such a manner so 

8 as to minimize administrative burden and maximize 

9 the extent to which full fuel cycle greenhouse gas 

10 emissions from covered fuels have the carbon fee lev11 ied upon them, 

12 ‘‘(2) the identification of covered entities which 

13 shall be liable for the payment of the carbon fee, 

14 ‘‘(3) requirements for the monthly payment of 

15 such fees, 

16 ‘‘(4) as may be necessary or convenient, rules 

17 for distinguishing between different types of covered 

18 fuels, 

19 ‘‘(5) as may be necessary or convenient, rules 

20 for distinguishing between a covered fuel’s green21 house gas content and its upstream greenhouse gas 

22 emissions, 

23 ‘‘(6) rules to ensure that no covered fuel has 

24 the carbon fee or carbon border fee adjustment im25 posed upon it more than once, and 


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1 ‘‘(7) rules to ensure that the domestic imple2 mentation of the carbon fee coordinate with the im3 plementation of the carbon border fee adjustment of 

4 chapter 102. 

5 ‘‘CHAPTER 102—CARBON BORDER FEE 

6 ADJUSTMENT 

‘‘Sec. 9908. Carbon border fee adjustment. 

‘‘Sec. 9909. Administration of the carbon border fee adjustment. 

‘‘Sec. 9910. Allocation of carbon border fee adjustment revenues. 

‘‘Sec. 9911. Treaties and international negotiations. 

7 ‘‘SEC. 9908. CARBON BORDER FEE ADJUSTMENT. 

8 ‘‘(a) IN GENERAL.—The fees imposed by, and re9 funds allowed under, this section shall be referred to as 

10 the ‘carbon border fee adjustment’. 

11 ‘‘(b) PURPOSE.—The purpose of the carbon border 

12 fee adjustment is to protect animal, plant, and human life 

13 and health, to conserve exhaustible natural resources by 

14 preventing carbon leakage, and to facilitate the creation 

15 of international agreements. 

16 ‘‘(c) IMPORTS TO THE UNITED STATES.— 

17 ‘‘(1) IMPORTED COVERED FUELS FEE.—In the 

18 case of any person that imports into the United 

19 States any covered fuel, there shall be imposed a fee 

20 equal to the total carbon fee that would be imposed 

21 on the fuel’s greenhouse gas content under the do22 mestic carbon fee, including processing emissions. 


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1 ‘‘(2) IMPORTED CARBON-INTENSIVE PRODUCTS

2 FEE.—In the case of any person that imports into 

3 the United States any carbon-intensive product, 

4 there shall be imposed a fee equal to the total car5 bon fee which would have accumulated upon the 

6 greenhouse gas content of the imported carbon-in7 tensive product had the imported carbon-intensive 

8 product been produced domestically and subject to 

9 the domestic carbon fee. 

10 ‘‘(3) MODIFICATIONS.—The Secretary shall 

11 make an administrative determination of whether 

12 any class of imported covered fuels or class of im13 ported carbon-intensive product is carrying any total 

14 foreign carbon cost. The Secretary shall make a de15 termination of whether international law or the en16 hancement of global greenhouse gas mitigation ef17 forts require that those foreign costs of carbon be 

18 deducted from the border carbon fee adjustment de19 termined in subsection (c)(1) or subsection (d)(1). 

20 ‘‘(4) FOREIGN COST OF CARBON; FOREIGN CAR21 BON COSTS.—For purposes of this subsection, the 

22 term ‘foreign cost of carbon’ or ‘foreign carbon cost’ 

23 means the explicit price a foreign jurisdiction places 

24 upon the emission of greenhouse gas pollution to the 

25 atmosphere through law or regulation. Such price 


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1 shall be expressed as the price per metric ton of 

2 CO2-e. 

3 ‘‘(d) REFUND ON EXPORTS FROM UNITED

4 STATES.— 

5 ‘‘(1) COVERED FUELS.—Under regulations pre6 scribed by the Secretary, in the case of a covered 

7 fuel produced in the United States with respect to 

8 which the fee under section 9902 was paid, there 

9 shall be allowed as a credit or refund (without inter10 est) to any exporter of such covered fuels an amount 

11 equal to the total carbon fee levied upon the ex12 ported covered fuel up to the time of its exportation, 

13 including processing emissions. Any such credit or 

14 refund shall be allowed in the same manner as if it 

15 were an overpayment of tax imposed by section 

16 9902. 

17 ‘‘(2) CARBON-INTENSIVE PRODUCTS.—Under 

18 regulations prescribed by the Secretary, there shall 

19 be allowed a credit or refund (without interest) to 

20 exporters of carbon-intensive products manufactured 

21 or produced in the United States an amount equal 

22 to the total carbon fees accumulated upon the green23 house gas content of the exported carbon-intensive 

24 product up to the time of exportation. Any such 

25 credit or refund shall be allowed in the same manner 


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1 as if it were an overpayment of the fee imposed by 

2 section 9902 or 9904. 

3 ‘‘SEC. 9909. ADMINISTRATION OF THE CARBON BORDER 

4 FEE ADJUSTMENT. 

5 ‘‘(a) GENERALLY.—The Secretary in consultation 

6 with the Administrator shall prescribe regulations and 

7 guidance which implement the carbon border fee adjust8 ment under section 9908. 

9 ‘‘(b) COLLABORATION.—In administering any aspect 

10 of the border carbon fee adjustment it is the sense of Con11 gress that the Secretary should collaborate with author12 ized officers of any jurisdiction, including sub-national 

13 governments, affected by the carbon border fee adjust14 ment. 

15 ‘‘(c) METHODOLOGY.—In administering the border 

16 carbon fee adjustment, the Secretary shall use methodolo17 gies, procedures, and data which as may be necessary or 

18 convenient— 

19 ‘‘(1) disaggregate a product’s greenhouse gas 

20 content; 

21 ‘‘(2) are consistent with international law and 

22 facilitate international cooperation; 

23 ‘‘(3) in the case of incomplete data, use cus24 tomary methods of interpolation that favor enhanced 

25 mitigation and facilitate international cooperation; 


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1 ‘‘(4) avoid the double pricing of greenhouse gas 

2 emissions; and 

3 ‘‘(5) harmonize the border carbon fee adjust4 ment with the domestic carbon fee so as to ensure 

5 all covered fuels used in the United States are sub6 ject to the carbon fee. 

7 ‘‘(d) SCHEDULE.—The Secretary shall— 

8 ‘‘(1) begin implementation the border carbon 

9 fee adjustment for covered fuels at the same time as 

10 the implementation of the carbon fee; and 

11 ‘‘(2) begin implementation of the border carbon 

12 fee adjustment for carbon-intensive products within 

13 two years of the date of the enactment of the En14 ergy Innovation and Carbon Dividend Act of 2023. 

15 ‘‘(e) PROCEDURE.—The Secretary shall— 

16 ‘‘(1) establish fair, timely, impartial, and as 

17 necessary confidential procedures by which the im18 porter of any carbon-intensive product or any cov19 ered fuel may petition the Secretary to revise the 

20 Secretary’s determination of its border carbon fee 

21 adjustment liability calculated under section 

22 9908(c)(1); 

23 ‘‘(2) establish fair, timely, impartial, and as 

24 necessary confidential procedures by which any ex25 porter of any product from the United States may 


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1 petition the Secretary to include that exported prod2 uct on the list of carbon-intensive products; and 

3 ‘‘(3) establish fair, timely, impartial, and as 

4 necessary confidential procedures by which the ex5 porter of any carbon-intensive product or any cov6 ered fuel may petition the Secretary to revise the 

7 Secretary’s determination of its border carbon fee 

8 adjustment refund calculated under section 9908(d). 

9 ‘‘(f) SHIPMENTS FROM THE UNITED STATES TO THE

10 TERRITORIES OF THE UNITED STATES.—Notwith11 standing any other treaty, law, or policy, shipments of cov12 ered fuels or carbon-intensive products from the United 

13 States to Guam, the United States Virgin Islands, Amer14 ican Samoa, Puerto Rico, and the Northern Mariana Is15 lands shall be eligible for a refund of the carbon fee under 

16 section 9908(d). 

17 ‘‘(g) IMPORTS TO THE TERRITORIES OF THE UNITED

18 STATES.—Notwithstanding any other treaty, law, or pol19 icy, imports of covered fuels or carbon-intensive products 

20 to Guam, the United States Virgin Islands, American 

21 Samoa, Puerto Rico, and the Northern Mariana Islands 

22 shall not be subject to section 9908(c). 


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1 ‘‘SEC. 9910. ALLOCATION OF CARBON BORDER FEE ADJUST2 MENT REVENUES. 

3 ‘‘The revenues collected under this chapter may be 

4 used to supplement appropriations made available in fiscal 

5 years 2024 and thereafter— 

6 ‘‘(1) to U.S. Customs and Border Protection, in 

7 such amounts as are necessary to administer the 

8 carbon border fee adjustment, then 

9 ‘‘(2) to the Green Climate Fund, created by de10 cision 3/CP.17 adopted at the 17th Conference of 

11 the Parties to the United Nation Framework Con12 vention on Climate Change held in Durban, Novem13 ber 28 to December 11, 2011. 

14 ‘‘SEC. 9911. TREATIES AND INTERNATIONAL NEGOTIA15 TIONS. 

16 ‘‘(a) CONFORMANCE WITH INTERNATIONAL TREA17 TIES.—In the case that the Appellate Body of the World 

18 Trade Organization, or any other authoritative inter19 national treaty interpreter, shall find any portion of the 

20 carbon border fee adjustment under this chapter to violate 

21 any treaty to which the United States is a party, the Sec22 retary of State is authorized to alter that aspect of such 

23 carbon border fee adjustment found to violate a treaty ob24 ligation so as to bring the carbon border fee adjustment 

25 into conformance with international law. 


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1 ‘‘(b) INTERNATIONAL NEGOTIATIONS.—The Con2 gress finds the international mitigation of greenhouse gas 

3 emissions to be of national importance. Therefore, the 

4 Congress encourages the Secretary of State, or the Sec5 retary’s designee, to commence and complete negotiations 

6 with other nations with the goal of forming treaties, envi7 ronmental agreements, accords, partnerships or any other 

8 instrument that effectively reduces global greenhouse gas 

9 emissions to zero percent of 2010 levels by 2050 and 

10 which respect the principle of common but differentiated 

11 responsibilities and respective capabilities. 

12 ‘‘(c) SUSPENSION OF THE CARBON BORDER FEE AD13 JUSTMENT.—The Secretary may suspend the border car14 bon fee adjustment, in whole or in part— 

15 ‘‘(1) when, in the determination of the Sec16 retary, a country has implemented greenhouse gas 

17 mitigation policies sufficient to contribute to a global 

18 net reduction of greenhouse gas emissions to zero by 

19 2050. In making such determination, the Secretary 

20 may partially suspend particular provisions of the 

21 carbon border fee adjustment. In making the deter22 mination, the Secretary shall consult with the im23 porting country. In making the determination, the 

24 Secretary shall follow all existing treaty obligations. 


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1 The Secretary shall review any carbon border fee ad2 justment suspension at least every 5 years, or 

3 ‘‘(2) by treaty or other international agreement 

4 that meets the criteria of section 9911(c)(1) and in5 cludes provisions for the suspension of the border 

6 carbon fee adjustment.’’. 

7 SEC. 4. ESTABLISHMENT OF THE CARBON DIVIDEND TRUST 

8 FUND. 

9 (a) IN GENERAL.—Subchapter A of chapter 98 of the 

10 Internal Revenue Code of 1986 is amended by adding at 

11 the end the following: 

12 ‘‘SEC. 9512. CARBON DIVIDEND TRUST FUND. 

13 ‘‘(a) ESTABLISHMENT AND FUNDING.—There is 

14 hereby established in the Treasury of the United States 

15 a trust fund to be known as the ‘Carbon Dividend Trust 

16 Fund’, consisting of such amounts as may be appropriated 

17 to such trust fund as provided for in this section. 

18 ‘‘(b) TRANSFERS TO THE CARBON DIVIDEND TRUST

19 FUND.—There is hereby appropriated to the Carbon Divi20 dend Trust Fund amounts equal to the fees received into 

21 the Treasury less any amounts refunded or paid under 

22 section 9902(d) or 9905 of chapter 101 for each month. 

23 ‘‘(c) EXPENDITURES.—Amounts in the trust fund 

24 shall be available for the following purposes: 


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1 ‘‘(1) ADMINISTRATIVE EXPENSES.—So much of 

2 the expenses necessary to administer the Carbon 

3 Dividend Trust Fund for each year, as does not ex4 ceed— 

5 ‘‘(A) in the case of the first 5 calendar 

6 years ending after the date of the enactment of 

7 this section, the administrative expenses for any 

8 year may not exceed 8 percent of amounts ap9 propriated to the Carbon Dividend Trust Fund 

10 during such year, and 

11 ‘‘(B) in the case of any calendar year 

12 thereafter, 2 percent of the 5-year rolling aver13 age of the amounts appropriated to the Carbon 

14 Dividend Trust Fund. 

15 ‘‘(2) OTHER ADMINISTRATIVE EXPENSES.—So 

16 much of the expenses as are necessary to administer 

17 chapter 101 for any year as does not to exceed 0.60 

18 percent of the amounts appropriated to the Carbon 

19 Dividend Trust Fund for the previous year, and fur20 ther limited as follows: 

21 ‘‘(A) The Department of the Treasury. 

22 ‘‘(B) The Social Security Administration. 

23 ‘‘(C) The Environmental Protection Agen24 cy. 

25 ‘‘(D) Department of State. 


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1 ‘‘(3) CARBON DIVIDEND PAYMENTS.— 

2 ‘‘(A) IN GENERAL.—From the amounts in 

3 the Carbon Dividend Trust Fund made avail4 able under paragraphs (1) and (2) of this sub5 section for any year, the Secretary shall for 

6 each month beginning no more than 270 days 

7 after the date of the enactment of the Energy 

8 Innovation and Carbon Dividend Act of 2023, 

9 make carbon dividend payments to each eligible 

10 individual. 

11 ‘‘(B) PRO-RATA SHARE.—A carbon divi12 dend payment is one pro-rata share for each 

13 adult, and half a pro-rata share for each child 

14 under 19 years old, of amounts available for the 

15 month in the Carbon Dividend Trust Fund. 

16 ‘‘(C) ELIGIBLE INDIVIDUAL.—The term 

17 ‘eligible individual’ means, with respect to any 

18 month, any natural living person who has a 

19 valid Social Security number or taxpayer identi20 fication number and is a citizen or lawful resi21 dent of the United States (other than any indi22 vidual who is a citizen of any possession of the 

23 United States and whose bona fide residence is 

24 outside of the United States). The Secretary is 


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1 authorized to verify an individual’s eligibility to 

2 receive a carbon dividend payment. 

3 ‘‘(D) FEE TREATMENT OF PAYMENTS.— 

4 Amounts paid under this subsection shall be in5 cludible in gross income. 

6 ‘‘(E) FEDERAL PROGRAMS AND FEDERAL

7 ASSISTED PROGRAMS.—The carbon dividend 

8 amount received by any individual shall not be 

9 taken into account as income and shall not be 

10 taken into account as resources for purposes of 

11 determining the eligibility of such individual or 

12 any other individual for benefits or assistance, 

13 or the amount or extent of benefits or assist14 ance, under any Federal program or under any 

15 State or local program financed in whole or in 

16 part with Federal funds. 

17 ‘‘(F) ADVANCE PAYMENT.—The Secretary 

18 shall transfer to the Carbon Dividend Trust 

19 Fund such amounts as are necessary for the 

20 disbursement of an advanced carbon dividend to 

21 all eligible individuals as follows: 

22 ‘‘(i) An advanced carbon dividend 

23 shall be the same as the anticipated first 

24 carbon dividend required to be distributed 

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1 tributed the month prior to the first collec2 tion of the carbon fee. 

3 ‘‘(ii) Total amounts disbursed as ad4 vanced carbon dividends shall be deducted 

5 from the carbon dividends on a pro-rata 

6 basis over the first 3 years after the dis7 bursement of the first carbon dividends. 

8 ‘‘(d) ADMINISTRATIVE AUTHORITY.—The Secretary 

9 shall promulgate rules, guidance, and regulations useful 

10 and necessary to implement the Carbon Dividend Trust 

11 Fund. 

12 ‘‘(e) ASSIGNMENT OF BENEFITS.—The right of any 

13 person to any future payment under this chapter shall not 

14 be transferable or assignable, at law or in equity, and none 

15 of the moneys paid or payable or rights existing under 

16 subsection (c)(3) shall be subject to execution, levy, at17 tachment, garnishment, or other legal process, or to the 

18 operation of any bankruptcy or insolvency law.’’. 

19 (b) CLERICAL AMENDMENT.—The table of sections 

20 for subchapter A of chapter 98 of such Code is amended 

21 by adding at the end the following new item: 

‘‘Sec. 9512. Carbon Dividend Trust Fund.’’. 

22 SEC. 5. LIMITED DISCLOSURE OF INFORMATION. 

23 Section 6103(l) of the Internal Revenue Code of 1986 

24 is amended by adding at the end the following new para25 graphs: 


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1 ‘‘(23) LIMITED DISCLOSURE OF IDENTITY IN2 FORMATION RELATING TO CARBON DIVIDEND PAY3 MENTS.— 

4 ‘‘(A) DEPARTMENT OF TREASURY.—Indi5 vidual identity information shall, without writ6 ten request, be open to inspection by or disclo7 sure to officers and employees of the Depart8 ment of the Treasury whose official duties re9 quire such inspection or disclosure for purposes 

10 of administering section 9512 (relating to the 

11 Carbon Dividend Trust Fund). 

12 ‘‘(B) COMMISSIONER OF SOCIAL SECU13 RITY.—The Commissioner of Social Security 

14 shall, on written request, disclose to officers 

15 and employees of the Department of the Treas16 ury individual identity information which has 

17 been disclosed to the Social Security Adminis18 tration as is necessary to administer section 

19 9512. 

20 ‘‘(C) RESTRICTION ON DISCLOSURE.—In21 formation disclosed under this paragraph shall 

22 be disclosed only for purposes of, and to the ex23 tent necessary in, carrying out section 9512.’’. 


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1 SEC. 6. NATIONAL ACADEMY OF SCIENCES REVIEW OF CAR2 BON FEE AND EMISSIONS REDUCTION 

3 SCHEDULE. 

4 (a) IN GENERAL.—Not later than 5 years after the 

5 date of the enactment of this Act, the Secretary of Energy 

6 shall enter into an agreement with the National Academy 

7 of Sciences to prepare a report relating to the carbon fee 

8 imposed by section 9902 of the Internal Revenue Code of 

9 1986 and the emissions reductions schedule established 

10 under section 9903 of such Code. 

11 (b) REPORT REQUIREMENTS.—Such report shall— 

12 (1) assess the efficiency and effectiveness of the 

13 carbon fee in achieving the emissions reduction tar14 gets set forth in section 9903 of such Code; 

15 (2) describe and make recommendations on 

16 whether the carbon fee rate and annual increases 

17 prescribed by section 9902(c) of such Code should 

18 be adjusted in order to optimize the efficiency and 

19 effectiveness of this Act in achieving the emissions 

20 reduction targets set forth in section 9903 of such 

21 Code; 

22 (3) describe the potential of the carbon fee to 

23 achieve future emissions targets set forth in section 

24 9903(a) of such Code through the year 2050; 

25 (4) describe and evaluate the effectiveness of 

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1 tors of the economy, including sectors of the econ2 omy that have decreased their carbon emissions, sec3 tors of the economy that have increased their carbon 

4 emissions, and sectors of the economy in which car5 bon emissions have not changed; 

6 (5) make findings and recommendations to 

7 Federal departments and agencies and to Congress 

8 on actions that could be taken to reduce carbon 

9 emissions in the sectors of the economy in which 

10 carbon emissions have not decreased; 

11 (6) make findings and recommendations on ad12 justing regulations enacted under the Clean Air Act 

13 and other Federal laws that affect economic sectors 

14 achieving the emissions reduction targets set forth in 

15 section 9903 of such Code; and 

16 (7) provide an assessment of any other factors 

17 determined to be material to the program’s effi18 ciency and effectiveness in achieving the goals set 

19 forth in this Act. 

20 (c) REPORT MADE PUBLICLY AVAILABLE.—Not later 

21 than one year after the review in subsection (a) has com22 menced, the Secretary of Energy shall submit to Congress 

23 the report required under subsection (a). Such report shall 

24 be made electronically available to the public and open to 


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1 public comment for at least 60 days before the final sub2 mission to Congress. 

3 SEC. 7. IMPACT OF CARBON FEE ON BIOMASS USE AND 

4 CARBON SINKS. 

5 (a) STUDY OF BIOMASS.—The Secretary of Energy 

6 shall enter into an agreement with the National Academy 

7 of Sciences and the Administrator of the Environmental 

8 Protection Agency to conduct a study, make recommenda9 tions, and submit a report regarding the impact of the 

10 carbon fee on the use of biomass as an energy source and 

11 the resulting impacts on carbon sinks and biodiversity. 

12 (b) STUDY REQUIREMENTS.—The study conducted 

13 under subsection (a) by the National Academy of Sciences 

14 shall include analysis, documentation, and determinations 

15 on— 

16 (1) the carbon fee and its impact on the use of 

17 biomass as an energy source and greenhouse gas 

18 emissions from the use of biomass as an energy 

19 source; 

20 (2) the impacts of the use of biomass as an en21 ergy source on carbon sinks and biodiversity; and 

22 (3) the various types of biomass that are being 

23 used as an energy source. 

24 (c) RECOMMENDATIONS.—Based on the findings and 

25 conclusions of the study, the National Academy of 


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1 Sciences shall make recommendations to Federal depart2 ments and agencies and to Congress. The recommenda3 tions shall include any actions that should be taken to 

4 mitigate impacts of the carbon fee on— 

5 (1) increasing greenhouse gas emissions from 

6 the use of biomass as an energy source; and 

7 (2) degradation of carbon sinks and biodiversity 

8 relating to the use of biomass as an energy source. 

9 (d) REPORT.—The National Academy of Sciences 

10 shall prepare a report that includes any findings and rec11 ommendations made pursuant to this section and, not 

12 later than 18 months after the date of the enactment of 

13 this Act, make such report electronically available to the 

14 public. 

15 SEC. 8. EFFECTIVE DATE. 

16 The amendments made by this Act shall take effect 

17 on the date of the enactment of this Act, except the carbon 

18 fee under section 9902 of the Internal Revenue Code of 

19 1986 shall apply to uses, sales, or transfers no more than 

20 270 days after the date of the enactment of this Act. 

21 SEC. 9. PRINCIPLE OF INTERPRETATION. 

22 In the case of ambiguity, the texts of this statute and 

23 its amending texts shall be interpreted so as to allow for 

24 the most effective abatement of greenhouse gas emissions. 


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1 SEC. 10. NO PREEMPTION OF STATE LAW. 

2 (a) IN GENERAL.—Nothing in this Act shall preempt 

3 or supersede, or be interpreted to preempt or supersede, 

4 any State law or regulation. 

5 (b) NO PREEMPTION OF STATE COMMON LAW OR

6 STATUTORY CAUSES OF ACTION.—Noting in this Act, nor 

7 any standard, rule, requirement, risk evaluation, or assess8 ment created or implemented pursuant to this Act, shall 

9 be construed to preempt any State common law or State 

10 statutory law creating a remedy for civil relief. 

Æ 


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