I 

115TH CONGRESS 

2D SESSION H. R. 7173 

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 

NOVEMBER 27, 2018 

Mr. DEUTCH (for himself, Mr. FITZPATRICK, Mr. DELANEY, Mr. FRANCIS

ROONEY of Florida, and Mr. CRIST) 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, 


pamtmann on DSKBFK8HB2PROD with BILLS
2 

•HR 7173 IH

1 SECTION 1. SHORT TITLE. 

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

3 Carbon Dividend Act of 2018’’. 

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

23 1986 is amended by adding at the end the following new 

24 subtitle: 


pamtmann on DSKBFK8HB2PROD with BILLS
3 

•HR 7173 IH

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. Fee on fluorinated greenhouse gases. 

‘‘Sec. 9905. Decommissioning of Carbon Administration. 

‘‘Sec. 9906. Carbon Capture and Sequestration. 

‘‘Sec. 9907. 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.— 

10 The 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) any manufactured or agricultural product 

18 which the Secretary in consultation with the Admin19 istrator determines is emissions-intensive and tradeVerDate Sep 11 2014 21:30 Nov 28, 2018 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7173.IH H7173

pamtmann on DSKBFK8HB2PROD with BILLS
4 

•HR 7173 IH

1 exposed, except that no covered fuel is a carbon-in2 tensive product, and 

3 ‘‘(2) until such time that the Secretary promul4 gates rules identifying carbon-intensive products, the 

5 following shall be considered carbon-intensive prod6 ucts: iron, steel, steel mill products (including pipe 

7 and tube), aluminum, cement, glass (including flat, 

8 container, and specialty glass and fiberglass), pulp, 

9 paper, chemicals, or industrial ceramics. 

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

11 means an increase of global greenhouse gas emissions 

12 which are substantially due to the relocation of greenhouse 

13 gas sources from the United States to jurisdictions which 

14 lack comparable controls upon greenhouse gas emissions. 

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

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

17 or sub-national government policy which explicitly places 

18 a price on greenhouse gas pollution and shall be limited 

19 to either a tax on greenhouse gases or a system of cap20 and-trade. The cost of carbon is expressed as the price 

21 per ton of CO2-e. 

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

23 means— 

24 ‘‘(1) in the case of crude oil— 


pamtmann on DSKBFK8HB2PROD with BILLS
5 

•HR 7173 IH

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

2 States, and 

3 ‘‘(B) any importer of any petroleum or pe4 troleum product into the United States, 

5 ‘‘(2) in the case of coal— 

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

7 United States, and 

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

9 States, 

10 ‘‘(3) in the case of natural gas— 

11 ‘‘(A) any entity entering pipeline quality 

12 natural gas into the natural gas transmission 

13 system, and 

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

15 United States, 

16 ‘‘(4) in the case of fluorinated gases any entity 

17 required to report the emission of a fluorinated gas 

18 under part 98 of title 40, Code of Federal Regula19 tions, and 

20 ‘‘(5) any entity or class of entities which, as de21 termined by the Secretary, is transporting, selling, 

22 or otherwise using a covered fuel in a manner which 

23 emits a greenhouse gas to the atmosphere and which 

24 has not been covered by the carbon fee, the 


pamtmann on DSKBFK8HB2PROD with BILLS
6 

•HR 7173 IH

1 fluorinated greenhouse gas fee, or the carbon border 

2 fee adjustment. 

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

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

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

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

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

8 unrefined petroleum. 

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

10 a product from within the jurisdiction of the United States 

11 to persons outside the United States. 

12 ‘‘(j) FLUORINATED GREENHOUSE GAS.—The term 

13 ‘fluorinated greenhouse gas’ means sulfur hexafluoride 

14 (SF6), nitrogen trifluoride (NF3), and any fluorocarbon 

15 except for controlled substances as defined in subpart A 

16 of part 82 of title 40, Code of Federal Regulation, and 

17 substances with vapor pressures of less than 1 mm of Hg 

18 absolute at 25 degrees. With these exceptions, ‘fluorinated 

19 greenhouse gas’ includes but is not limited to any 

20 hydrofluorocarbon, any perfluorocarbon, any fully 

21 fluorinated linear, branched or cyclic alkane, ether, ter22 tiary amine or aminoether, any perfluoropolyether, and 

23 any hydrofluoropolyether. 


pamtmann on DSKBFK8HB2PROD with BILLS
7 

•HR 7173 IH

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

2 coal, coal products, petroleum, petroleum products, or nat3 ural gas. 

4 ‘‘(l) FULL FUEL CYCLE GREENHOUSE GAS EMIS5 SIONS.—The term ‘full fuel cycle greenhouse gas emis6 sions’ means the greenhouse gas content of a covered fuel 

7 plus that covered fuel’s upstream greenhouse gas emis8 sions. 

9 ‘‘(m) GLOBAL WARMING POTENTIAL.—The term 

10 ‘global warming potential’ means the ratio of the time11 integrated radiative forcing from the instantaneous release 

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

13 one kilogram of carbon dioxide. 

14 ‘‘(n) GREENHOUSE GAS.—The term ‘greenhouse gas’ 

15 means carbon dioxide (CO2), methane (CH4), nitrous 

16 oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocar17 bons (HFCs), perfluorocarbon (PFCs), and other gases as 

18 defined by rule of the Administrator. 

19 ‘‘(o) GREENHOUSE GAS CONTENT.—The term 

20 ‘greenhouse gas content’ means the amount of greenhouse 

21 gases, expressed in metric tons of CO2-e, which would be 

22 emitted to the atmosphere by the use of a covered fuel 

23 and shall include, nonexclusively, emissions of carbon diox24 ide (CO2), nitrous oxide (N2O), methane (CH4), and other 


pamtmann on DSKBFK8HB2PROD with BILLS
8 

•HR 7173 IH

1 greenhouse gases as identified by rule of the Adminis2 trator. 

3 ‘‘(p) GREENHOUSE GAS EFFECT.—The term ‘green4 house gas effect’ means the adverse effects of greenhouse 

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

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

7 ‘‘(q) IMPORT.—Irrespective of any other definition in 

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

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

10 of the United States. 

11 ‘‘(r) PETROLEUM.—The term ‘petroleum’ means oil 

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

13 or shale. 

14 ‘‘(s) PRODUCTION GREENHOUSE GAS EMISSIONS.— 

15 The term ‘production greenhouse gas emissions’ means 

16 the quantity of greenhouse gases, expressed in metric tons 

17 of CO2-e, emitted to the atmosphere resulting from, non18 exclusively, the production, manufacture, assembly, trans19 portation, or financing of a product. 

20 ‘‘(t) UPSTREAM GREENHOUSE GAS EMISSIONS.— 

21 The term ‘upstream greenhouse gas emissions’ means the 

22 quantity of greenhouse gases, expressed in metric tons of 

23 CO2-e, emitted to the atmosphere resulting from, non24 exclusively, the extraction, processing, transportation, fi25 nancing, or other preparation of a covered fuel for use. 


pamtmann on DSKBFK8HB2PROD with BILLS
9 

•HR 7173 IH

1 ‘‘SEC. 9902. CARBON FEE. 

2 ‘‘(a) CARBON FEE.—There is hereby imposed a car3 bon fee on any covered entity’s emitting use, or sale or 

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

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

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

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

8 fuel, multiplied by 

9 ‘‘(2) the carbon fee rate. 

10 ‘‘(c) CARBON FEE RATE.—For purposes of this sec11 tion— 

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

13 respect to any use, sale, or transfer during a cal14 endar year, shall be— 

15 ‘‘(A) in the case of calendar year 2019, 

16 $15, and 

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

18 in the case of any calendar year thereafter, the 

19 carbon fee rate in effect under this subsection 

20 for the preceding calendar year, plus $10. 

21 ‘‘(2) EXCEPTIONS.— 

22 ‘‘(A) INCREASED CARBON FEE RATE

23 AFTER MISSED ANNUAL EMISSIONS REDUCTION

24 TARGET.—In the case of any year immediately 

25 following a year for which the Secretary deter26 mines under 9903(b) that the actual emissions 


pamtmann on DSKBFK8HB2PROD with BILLS
10 

•HR 7173 IH

1 of greenhouse gases from covered fuels exceeded 

2 the emissions reduction target for the previous 

3 year, paragraph (1)(B) shall be applied by sub4 stituting ‘$15’ for ‘$10’. 

5 ‘‘(B) CESSATION OF CARBON FEE RATE IN6 CREASE AFTER CERTAIN EMISSION REDUCTIONS

7 ACHIEVED.—In the case of any year imme8 diately following a year for which the Secretary 

9 determines under 9903(b) that actual emissions 

10 of greenhouse gases from covered fuels is not 

11 more than 10 percent of the greenhouse gas 

12 emissions from covered fuels during the year 

13 2015, paragraph (1)(B) shall be applied by sub14 stituting ‘$0’ for ‘$10’. 

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

16 shall prescribe such rules as are necessary to ensure the 

17 fee imposed by this section is not imposed with respect 

18 to any nonemitting use, or any sale or transfer for a non19 emitting use, including rules providing for the refund of 

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

21 such use, sale, or transfer. 

22 ‘‘(e) AGRICULTURE EXEMPTIONS.— 

23 ‘‘(1) FUEL.—If any covered fuel or its deriva24 tive is used on a farm for a farming purpose, the 

25 Secretary shall pay (without interest) to the ultimate 


pamtmann on DSKBFK8HB2PROD with BILLS
11 

•HR 7173 IH

1 purchaser of such covered fuel or its derivative, the 

2 total amount of carbon fees previously paid upon 

3 that covered fuel, as specified by rule of the Sec4 retary. 

5 ‘‘(2) FARM, FARMING USE, AND FARMING PUR6 POSE.—The terms ‘farm’, ‘farming use’, and ‘farm7 ing purpose’ shall have the respective meanings 

8 given such terms under section 6420(c). 

9 ‘‘(3) OTHER GREENHOUSE GASES EMISSIONS

10 FROM AGRICULTURE.—The carbon fee shall not be 

11 levied upon non-fossil fuel greenhouse gas emissions 

12 which occur on a farm. 

13 ‘‘SEC. 9903. EMISSIONS REDUCTION SCHEDULE. 

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

15 for greenhouse gas emissions from covered fuels is hereby 

16 established, as follows: 

17 ‘‘(1) REFERENCE YEAR.—The greenhouse gas 

18 emissions from covered fuels during the year 2015 

19 shall be the reference amount of emissions and shall 

20 be determined from the ‘Inventory of U.S. Green21 house Gas Emissions and Sinks: 1990–2015’ pub22 lished by the Environmental Protection Agency in 

23 April of 2017. 

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

25 first emission reduction target shall be for the year 


pamtmann on DSKBFK8HB2PROD with BILLS
12 

•HR 7173 IH

1 2022. The emission target for each year thereafter 

2 shall be the previous year’s target emissions minus 

3 a percentage of emissions during the reference year 

4 determined in accordance with the following table: 

‘‘Year Emissions Reduction Target 

2015 Reference year 

2018 to 2021 No emissions reduction target 

2022 to 2030 5 percent of 2015 emissions per year 

2030 to 2040 2.5 percent of 2015 emissions per year 

2040 to 2050 1.5 percent of 2015 emissions per year 

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

6 than 60 days after the beginning of each calendar year 

7 beginning after the enactment of this section, the Sec8 retary, in consultation with the Administrator, shall deter9 mine whether actual emissions of greenhouse gases from 

10 covered fuels exceeded the emissions reduction target for 

11 the preceding calendar year. The Secretary shall make 

12 such determination using the same greenhouse gas ac13 counting method as was used to determine the greenhouse 

14 gas emissions in the ‘Inventory of U.S. Greenhouse Gas 

15 Emissions and Sinks: 1990–2015’ published by the Envi16 ronmental Protection Agency in April of 2017. 

17 ‘‘SEC. 9904. FEE ON FLUORINATED GREENHOUSE GASES. 

18 ‘‘(a) FLUORINATED GAS FEE.—A fee is hereby im19 posed upon any fluorinated greenhouse gas which is reVerDate Sep 11 2014 21:30 Nov 28, 2018 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H7173.IH H7173

pamtmann on DSKBFK8HB2PROD with BILLS
13 

•HR 7173 IH

1 quired to be reported under part 98 of title 40, Code of 

2 Federal Regulations. 

3 ‘‘(b) AMOUNT.—The fee to be paid by the covered 

4 entity required to so report shall be an amount equal to— 

5 ‘‘(1) the total amount, in metric tons of CO2- 

6 e, of emitted fluorinated greenhouse gases (or, in the 

7 case of a supplier, emissions that would result deter8 mined under the rules of such part), multiplied by 

9 ‘‘(2) an amount equal to 10 percent of the car10 bon fee rate in effect under section 9902(d)(1) for 

11 the calendar year of such emission. 

12 ‘‘SEC. 9905. 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 from covered fuels during the 

18 year 2015, and 

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

20 adult eligible individual has been less than $20 for 

21 3 consecutive years, 

22 the Secretary shall decommission in an orderly manner all 

23 bureaus and programs associated with administering the 

24 carbon fee, the carbon border fee adjustment, and the Car25 bon Dividend Trust Fund. 


pamtmann on DSKBFK8HB2PROD with BILLS
14 

•HR 7173 IH

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

2 calendar year after 2018, 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 2017’ for ‘calendar year 

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

9 ‘‘SEC. 9906. 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. 

15 ‘‘(b) PAYMENT AMOUNTS.— 

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

17 payments to a qualified facility in the same manner 

18 as if such payment was a refund of an overpayment 

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

20 in which such qualified facility— 

21 ‘‘(A) uses any covered fuel— 

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

23 fee has been paid, and 

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

25 qualified carbon dioxide, 


pamtmann on DSKBFK8HB2PROD with BILLS
15 

•HR 7173 IH

1 ‘‘(B) captures such emitted qualified car2 bon dioxide, and 

3 ‘‘(C)(i) sequesters such qualified carbon di4 oxide in a manner which is safe, permanent, 

5 and in compliance with any applicable local, 

6 State, and Federal laws, or 

7 ‘‘(ii) utilizes such qualified carbon dioxide 

8 in a manner provided in paragraph (3)(C). 

9 ‘‘(2) AMOUNT OF REFUND.—The payment de10 termined under this section shall be an amount 

11 equal to the lesser of— 

12 ‘‘(A)(i) the adjusted metric tons of quali13 fied carbon dioxide captured and sequestered or 

14 utilized, multiplied by 

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

16 which the carbon fee was imposed by section 

17 9902 upon the covered fuel to which such car18 bon dioxide relates, or 

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

20 by section 9902 with respect to such covered 

21 fuel. 

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

23 purposes of this section— 

24 ‘‘(A) QUALIFIED CARBON DIOXIDE; QUALI25 FIED FACILITY.— 


pamtmann on DSKBFK8HB2PROD with BILLS
16 

•HR 7173 IH

1 ‘‘(i) QUALIFIED CARBON DIOXIDE.— 

2 The term ‘qualified carbon dioxide’ has the 

3 same meaning given such term under sec4 tion 45Q(b). 

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

6 ‘qualified facility’ means any industrial fa7 cility at which carbon capture equipment is 

8 placed in service. 

9 ‘‘(B) ADJUSTED TOTAL METRIC TONS.— 

10 The adjusted total metric tons of qualified car11 bon dioxide captured and sequestered or utilized 

12 shall be the total tons of qualified carbon diox13 ide captured and sequestered or utilized, re14 duced by the amount of any carbon dioxide like15 ly to escape and be emitted into the atmosphere 

16 due to imperfect storage technology or other17 wise, as determined by the Secretary in con18 sultation with the Administrator. 

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

20 consultation with the Administrator, shall es21 tablish regulations providing for the methods 

22 and processes by which qualified carbon dioxide 

23 may be utilized so as to remove that qualified 

24 dioxide safely and permanently from the atmos25 phere. Utilization may include the production of 


pamtmann on DSKBFK8HB2PROD with BILLS
17 

•HR 7173 IH

1 substances such as but not limited to plastics 

2 and chemicals. Such regulations shall minimize 

3 the escape or further emission of the qualified 

4 carbon dioxide into the atmosphere. 

5 ‘‘(D) SEQUESTRATION.—Not later 540 

6 days after the date of the enactment of this sec7 tion, the Secretary, in consultation with the Ad8 ministrator, shall prescribe regulations identi9 fying the conditions under which carbon dioxide 

10 may be safely and permanently sequestered. 

11 ‘‘(4) COORDINATION WITH CREDIT FOR CARBON

12 DIOXIDE SEQUESTRATION.—At such time that the 

13 Secretary prescribes regulations implementing this 

14 section, no payment under this section shall be al15 lowed to a taxpayer to whom a credit has been al16 lowed for any taxable year under section 45Q. 

17 ‘‘SEC. 9907. ADMINISTRATIVE AUTHORITY. 

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

19 with the Administrator shall prescribe such regulations, 

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

21 purposes of this subtitle and assess and collect the carbon 

22 fee imposed by section 9902 and the fluorinated green23 house gas fee imposed by section 9904. 

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

25 shall include— 


pamtmann on DSKBFK8HB2PROD with BILLS
18 

•HR 7173 IH

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

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

3 or fluorinated greenhouse gas for collecting such car4 bon fee or fluorinated greenhouse gas fee, in such a 

5 manner so as to minimize administrative burden and 

6 maximize the extent to which full fuel cycle green7 house gas emissions from covered fuels or fluorinat8 ed greenhouse gases have the carbon fee or fluori9 nated greenhouse gas fee levied upon them, 

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

11 shall be liable for the payment of the carbon fee or 

12 the fluorinated greenhouse gas fee, 

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

14 such fees, 

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

16 for distinguishing between different types of covered 

17 fuels, 

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

19 for distinguishing between a covered fuel’s green20 house gas content and its upstream greenhouse gas 

21 emissions, 

22 ‘‘(6) rules to ensure that no covered fuel or 

23 fluorinated greenhouse gas has the carbon fee, 

24 fluorinated greenhouse gas fee, or carbon border fee 

25 adjustment imposed upon it more than once, and 


pamtmann on DSKBFK8HB2PROD with BILLS
19 

•HR 7173 IH

1 ‘‘(7) rules to ensure that the domestic imple2 mentation of the carbon fee and the fluorinated 

3 greenhouse gas fee coordinate with the implementa4 tion of the carbon border fee adjustment of chapter 

5 102. 

6 ‘‘CHAPTER 102—CARBON BORDER FEE 

7 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. 

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

9 ‘‘(a) IN GENERAL.—The fees imposed by, and re10 funds allowed under, this section shall be referred to as 

11 ‘the carbon border fee adjustment’. 

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

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

14 and health, to conserve exhaustible natural resources by 

15 preventing carbon leakage, and to facilitate the creation 

16 of international agreements. 

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

18 of any person that imports into the United States any cov19 ered fuel, there shall be imposed a fee equal to the excess 

20 (if any) of— 

21 ‘‘(1) an amount equal to— 

22 ‘‘(A) the amount of full fuel cycle green23 house gas emissions of such fuel, multiplied by 


pamtmann on DSKBFK8HB2PROD with BILLS
20 

•HR 7173 IH

1 ‘‘(B) the carbon fee rate in effect for the 

2 year in which such fuel is imported, over 

3 ‘‘(2) the total foreign cost of carbon carried by 

4 such fuel. 

5 ‘‘(d) IMPORTED CARBON-INTENSIVE PRODUCTS

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

7 United States any carbon-intensive products, there shall 

8 be imposed a fee equal to the excess (if any) of— 

9 ‘‘(1) an amount equal to— 

10 ‘‘(A) production greenhouse gas emissions 

11 of such product, multiplied by 

12 ‘‘(B) the carbon fee rate in effect for the 

13 year in which the production greenhouse gas 

14 emissions of such product were emitted into the 

15 atmosphere, over 

16 ‘‘(2) the total foreign cost of carbon carried by 

17 such product. 

18 ‘‘(e) REFUND ON EXPORTS FROM UNITED

19 STATES.— 

20 ‘‘(1) CARBON-INTENSIVE PRODUCTS.—Under 

21 regulations prescribed by the Secretary, there shall 

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

23 exporters of carbon-intensive products manufactured 

24 or produced in the United States an amount equal 

25 to the excess (if any) of— 


pamtmann on DSKBFK8HB2PROD with BILLS
21 

•HR 7173 IH

1 ‘‘(A) an amount equal to— 

2 ‘‘(i) the production greenhouse gas 

3 emissions of the exported carbon-intensive 

4 product, multiplied by 

5 ‘‘(ii) the carbon fee rate during the 

6 year in which the carbon fee or fluorinated 

7 greenhouse gas fee was paid upon the pro8 duction greenhouse gas emissions of the 

9 exported carbon-intensive product, over 

10 ‘‘(B) any total cost of carbon to be levied 

11 upon the carbon-intensive product by any juris12 diction to which the carbon-intensive product is 

13 to be imported. 

14 Any such credit or refund shall be allowed in the 

15 same manner as if it were an overpayment of the fee 

16 imposed by section 9902 or 9904. The Secretary 

17 shall establish fair, timely, impartial, and as nec18 essary confidential procedures by which any exporter 

19 of any product from the United States may petition 

20 the Secretary to include that exported product on 

21 the list of carbon-intensive products. 

22 ‘‘(2) COVERED FUELS.—Under regulations pre23 scribed by the Secretary, in the case of a covered 

24 fuel produced in the United States with respect to 

25 which the fee under section 9902 was paid, there 


pamtmann on DSKBFK8HB2PROD with BILLS
22 

•HR 7173 IH

1 shall be allowed as a credit or refund (without inter2 est) to any exporter of such covered fuels an amount 

3 equal to the excess (if any) of— 

4 ‘‘(A) an amount equal to— 

5 ‘‘(i) the full fuel cycle greenhouse gas 

6 emissions of the covered fuel, multiplied by 

7 ‘‘(ii) the carbon fee rate at the time 

8 the carbon fee was paid upon the full fuel 

9 cycle greenhouse gas emissions of the ex10 ported covered fuel, over 

11 ‘‘(B) any total cost of carbon to be levied 

12 upon the covered fuel by a jurisdiction to which 

13 the carbon-intensive product is to be imported. 

14 Any such credit or refund shall be allowed in the 

15 same manner as if it were an overpayment of tax 

16 imposed by section 9902. 

17 ‘‘(f) DEFINITIONS.—For purposes of this section— 

18 ‘‘(1) FOREIGN COST OF CARBON; FOREIGN CAR19 BON COSTS.—The term ‘foreign cost of carbon’ or 

20 ‘foreign carbon cost’ means the cost of any laws of 

21 a foreign jurisdiction which impose a system of cap22 and-trade with respect to, or a tax or fee on, green23 house gas. Such cost shall be determined and ex24 pressed as a price per ton of CO2-e. 


pamtmann on DSKBFK8HB2PROD with BILLS
23 

•HR 7173 IH

1 ‘‘(2) TOTAL COST OF CARBON CARRIED.—The 

2 term ‘total cost of carbon carried’ means an amount 

3 equal to— 

4 ‘‘(A) the production greenhouse gas emis5 sions of a carbon-intensive product or the full 

6 fuel cycle greenhouse gas emissions of a covered 

7 fuel, multiplied by 

8 ‘‘(B) the cost of carbon with respect to 

9 such product or fuel, reduced by any amount 

10 refunded with respect to such product or fuel 

11 by a foreign jurisdiction. 

12 The total cost of carbon carried shall be expressed 

13 as price in United States dollars. 

14 ‘‘(3) TOTAL FOREIGN COST OF CARBON CAR15 RIED.—The term ‘total foreign cost of carbon car16 ried’ means an amount equal to— 

17 ‘‘(A) the production greenhouse gas emis18 sions of a carbon-intensive product, or the full 

19 fuel cycle greenhouse gas emissions of a covered 

20 fuel, multiplied by 

21 ‘‘(B) the foreign cost of carbon with re22 spect to such product or fuel, reduced by the 

23 amount refunded with respect to such product 

24 or fuel by a foreign jurisdiction. 


pamtmann on DSKBFK8HB2PROD with BILLS
24 

•HR 7173 IH

1 The total foreign cost of carbon carried shall be ex2 pressed as price in United States dollars. 

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 determining the produc10 tion greenhouse gas emissions of an imported carbon-in11 tensive product, the upstream greenhouse gas emissions 

12 of an imported covered fuel, the full fuel cycle greenhouse 

13 gas emissions of an imported covered fuel, or the foreign 

14 cost of carbon, or otherwise administering the carbon bor15 der fee adjustment, it is the sense of Congress that the 

16 Secretary should collaborate with authorized officers of 

17 any jurisdiction, including sub-national governments, af18 fected by the carbon border fee adjustment. 

19 ‘‘(c) METHODOLOGY.—In determining the production 

20 greenhouse gas emissions of an imported carbon-intensive 

21 product, the upstream greenhouse gas emissions of an im22 ported covered fuel, the full fuel cycle greenhouse gas 

23 emissions of an imported covered fuel, or the foreign cost 

24 of carbon, the Secretary shall use reliable methodologies, 

25 which— 


pamtmann on DSKBFK8HB2PROD with BILLS
25 

•HR 7173 IH

1 ‘‘(1) as may be necessary or convenient— 

2 ‘‘(A) distinguish between different types of 

3 covered fuels, 

4 ‘‘(B) distinguish between a covered fuel’s 

5 greenhouse gas content and that covered fuel’s 

6 upstream greenhouse gas emissions, 

7 ‘‘(C) distinguish between the different 

8 types of greenhouse gas emissions which com9 pose a covered fuel’s upstream greenhouse gas 

10 emissions or greenhouse gas content, as well as 

11 the various processes which produced those 

12 emissions, and 

13 ‘‘(D) distinguish between the different 

14 types of greenhouse gas emissions which com15 pose a carbon-intensive product’s production 

16 greenhouse gas emissions, as well as the various 

17 processes which produced those emissions, 

18 ‘‘(2) ensure that no covered fuel, covered 

19 fluorinated greenhouse gas, or carbon-intensive prod20 uct has the carbon fee, the fluorinated greenhouse 

21 gas fee, or the border fee adjustment imposed upon 

22 it more than once, 

23 ‘‘(3) ensure that the implementation of the bor24 der carbon adjustment aligns with the carbon fee 

25 and the fluorinated gas fee, 


pamtmann on DSKBFK8HB2PROD with BILLS
26 

•HR 7173 IH

1 ‘‘(4) in the case of incomplete data, rely upon 

2 the best available methodologies for interpolating 

3 data gaps, and 

4 ‘‘(5) are consistent with international treaties 

5 and agreements. 

6 ‘‘(d) SCHEDULE.—The Secretary shall determine— 

7 ‘‘(1) not later than 3 years after the date of the 

8 enactment of this section, the production greenhouse 

9 gas emissions of imported carbon-intensive products, 

10 ‘‘(2) not later than 180 days after the date of 

11 the enactment of this section, the full fuel cycle 

12 greenhouse gas emissions and the upstream green13 house gas emissions of every imported covered fuel, 

14 and 

15 ‘‘(3) not later than 3 years after the date of the 

16 enactment of this section, the foreign cost of carbon 

17 in all jurisdictions. 

18 ‘‘(e) PROCEDURE.—The Secretary shall establish 

19 fair, timely, impartial, and as necessary confidential proce20 dures by which the importer of any carbon-intensive prod21 uct or any covered fuel may petition the Secretary to re22 vise the Secretary’s determination of the production green23 house gas emissions, full fuel cycle greenhouse gas emis24 sions, or upstream greenhouse gas emissions of that im25 porter’s imported covered fuel or imported carbon-intenVerDate Sep 11 2014 21:30 Nov 28, 2018 Jkt 089200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\H7173.IH H7173

pamtmann on DSKBFK8HB2PROD with BILLS
27 

•HR 7173 IH

1 sive product, or the foreign cost of carbon carried by that 

2 importer’s imported carbon-intensive product. 

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

4 TERRITORIES OF THE UNITED STATES.—Notwith5 standing any other treaty, law, or policy, shipments of cov6 ered fuels or carbon-intensive products from the United 

7 States to Guam, the United States Virgin Islands, Samoa, 

8 Puerto Rico, and the Northern Mariana Islands shall be 

9 eligible for a refund of the carbon fee under section 

10 9908(e). 

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

12 STATES.—Notwithstanding any other treaty, law, or pol13 icy, imports of covered fuels or carbon-intensive products 

14 to Guam, the United States Virgin Islands, Samoa, Puerto 

15 Rico, and the Northern Mariana Islands shall not be sub16 ject to Section 9908(c) or 9908(d).’’ 

17 ‘‘SEC. 9910. ALLOCATION OF CARBON BORDER FEE ADJUST18 MENT REVENUES. 

19 ‘‘The revenues collected under this chapter may be 

20 used to supplement appropriations made available in fiscal 

21 years 2018 and thereafter— 

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

23 such amounts as are necessary to administer the 

24 carbon border fee adjustment, then 


pamtmann on DSKBFK8HB2PROD with BILLS
28 

•HR 7173 IH

1 ‘‘(2) to the Department of Treasury, in such 

2 amounts as are necessary to allow refunds under 

3 section 9908(e) to exporters of carbon-intensive 

4 products and exporters of covered fuels.’’. 

5 (b) COORDINATION WITH CARBON OXIDE SEQUES6 TRATION CREDIT.—Section 45Q(f) is amended by adding 

7 at the end the following new paragraph: 

8 ‘‘(8) COORDINATION WITH CARBON CAPTURE

9 AND SEQUESTRATION PAYMENTS.—No credit shall 

10 be allowed under this section to a taxpayer which 

11 has received any payment under section 9906.’’. 

12 (c) TREATIES AND INTERNATIONAL NEGOTIA13 TIONS.— 

14 (1) CONFORMANCE WITH INTERNATIONAL

15 TREATIES.—In the case that the Appellate Body of 

16 the World Trade Organization, or any other authori17 tative international treaty interpreter, shall find any 

18 portion of the carbon border fee adjustment under 

19 chapter 102 of the Internal Revenue Code of 1986 

20 to violate any treaty to which the United States is 

21 a party, the Secretary of the Treasury is authorized 

22 to alter any aspect of such carbon border fee adjust23 ment so as to bring the carbon border fee adjust24 ment into conformance with international law. 


pamtmann on DSKBFK8HB2PROD with BILLS
29 

•HR 7173 IH

1 (2) INTERNATIONAL NEGOTIATIONS.—The Con2 gress finds the international mitigation of green3 house gas emissions to be of national importance. 

4 Therefore, the Congress encourages the Secretary of 

5 State, or the Secretary’s designee, to commence and 

6 complete negotiations with other nations with the 

7 goal of forming treaties, environmental agreements, 

8 accords, partnerships or any other instrument that 

9 effectively reduces global greenhouse gas emissions 

10 to 10 percent of 2015 levels by 2050 and which re11 spect the principle of common but differentiated re12 sponsibilities and respective capabilities. 

13 (3) SUSPENSION OF THE CARBON BORDER FEE

14 ADJUSTMENT.—Any part of the carbon border fee 

15 adjustment shall be suspended, in whole or in part— 

16 (A) by treaty or other international agree17 ment which includes provisions for the suspen18 sion of the carbon border fee adjustment, in 

19 whole or in part, with any party signatory to 

20 the treaty or other international agreement, or 

21 (B) by a finding of the Secretary that a ju22 risdiction of importation has implemented poli23 cies which, in the case of high emitting coun24 tries, reduce greenhouse gas emissions at a rate 

25 at least equivalent to United States greenhouse 


pamtmann on DSKBFK8HB2PROD with BILLS
30 

•HR 7173 IH

1 gas emission reductions, or, in the case of low 

2 emitting countries, prevent the increase in 

3 greenhouse gas emissions. 

4 Any such finding shall be reviewed at least every 3 

5 years and amended or revoked as required. 

6 SEC. 4. ESTABLISHMENT OF THE CARBON DIVIDEND TRUST 

7 FUND. 

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

9 Internal Revenue Code of 1986 is amended by adding at 

10 the end the following: 

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

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

13 hereby established in the Treasury of the United States 

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

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

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

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

18 FUND.—There is hereby appropriated to the Carbon Divi19 dend Trust Fund amounts equal to the fees received into 

20 the Treasury less any amounts refunded or paid under 

21 section 9902(d) or 9906 of chapter 101 for each month. 

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

23 shall be available for the following purposes: 

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

25 the expenses necessary to administer the Carbon 


pamtmann on DSKBFK8HB2PROD with BILLS
31 

•HR 7173 IH

1 Dividend Trust Fund for each year, as does not ex2 ceed— 

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

4 years ending after the date of the enactment of 

5 this section, the administrative expenses for any 

6 year may not exceed 8 percent of amounts ap7 propriated to the Carbon Dividend Trust Fund 

8 during such year, and 

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

10 thereafter, 2 percent of the 5-year rolling aver11 age of the amounts appropriated to the Carbon 

12 Dividend Trust Fund. 

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

14 much of the expenses as are necessary to administer 

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

16 percent of the amounts appropriated to the Carbon 

17 Dividend Trust Fund for the previous year, and fur18 ther limited as follows: 

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

20 ‘‘(B) The Social Security Administration. 

21 ‘‘(C) The Environmental Protection Agen22 cy. 

23 ‘‘(D) Department of State. 

24 ‘‘(3) CARBON DIVIDEND PAYMENTS.— 


pamtmann on DSKBFK8HB2PROD with BILLS
32 

•HR 7173 IH

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

2 the Carbon Dividend Trust Fund made avail3 able under paragraphs (1) and (2) of this sub4 section for any year, the Secretary shall for 

5 each month beginning more than 270 days after 

6 the date of the enactment of the Energy Inno7 vation and Carbon Dividend Act of 2018, make 

8 carbon dividend payments to each eligible indi9 vidual. 

10 ‘‘(B) PRO-RATA SHARE.—A carbon divi11 dend payment is one pro-rata share for each 

12 adult and half a pro-rata share for each child 

13 under 19 years old of amounts available for the 

14 month in the Carbon Dividend Trust Fund. 

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

16 ‘eligible individual’ means, with respect to any 

17 month, any natural living person who has a 

18 valid Social Security number or taxpayer identi19 fication number and is a citizen or lawful resi20 dent of the United States (other than any indi21 vidual who is a citizen of any possession of the 

22 United States and whose bona fide residence is 

23 outside of the United States). The Secretary is 

24 authorized to verify an individual’s eligibility to 

25 receive a carbon dividend payment. 


pamtmann on DSKBFK8HB2PROD with BILLS
33 

•HR 7173 IH

1 ‘‘(D) FEE TREATMENT OF PAYMENTS.— 

2 Amounts paid under this subsection shall be in3 cludible in gross income. 

4 ‘‘(E) FEDERAL PROGRAMS AND FEDERAL

5 ASSISTED PROGRAMS.—The carbon dividend 

6 amount received by any individual shall not be 

7 taken into account as income and shall not be 

8 taken into account as resources for purposes of 

9 determining the eligibility of such individual or 

10 any other individual for benefits or assistance, 

11 or the amount or extent of benefits or assist12 ance, under any Federal program or under any 

13 State or local program financed in whole or in 

14 part with Federal funds. 

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

16 shall transfer to the Carbon Dividend Trust 

17 Fund such amounts as are necessary for the 

18 disbursement of an advanced carbon dividend to 

19 all eligible individuals as follows: 

20 ‘‘(i) An advanced carbon dividend 

21 shall be the same as the anticipated first 

22 carbon dividend required to be distributed 

23 under subparagraph (A) and shall be dis24 tributed the month prior to the first collec25 tion of the carbon fee. 


pamtmann on DSKBFK8HB2PROD with BILLS
34 

•HR 7173 IH

1 ‘‘(ii) Total amounts disbursed as ad2 vanced carbon dividends shall be deducted 

3 from the carbon dividends on a pro-rata 

4 basis over the first 3 years after the dis5 bursement of the first carbon dividends. 

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

7 shall promulgate rules, guidance, and regulations useful 

8 and necessary to implement the Carbon Dividend Trust 

9 Fund.’’. 

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

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

12 by adding at the end the following new item: 

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

13 SEC. 5. LIMITED DISCLOSURE OF INFORMATION. 

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

15 is amended by adding at the end the following new para16 graphs: 

17 ‘‘(23) LIMITED DISCLOSURE OF IDENTITY IN18 FORMATION RELATING TO CARBON DIVIDEND PAY19 MENTS.— 

20 ‘‘(A) DEPARTMENT OF TREASURY.—Indi21 vidual identity information shall, without writ22 ten request, be open to inspection by or disclo23 sure to officers and employees of the Depart24 ment of the Treasury whose official duties re25 quire such inspection or disclosure for purposes 


pamtmann on DSKBFK8HB2PROD with BILLS
35 

•HR 7173 IH

1 of administering section 9512 (relating the Car2 bon Dividend Trust Fund). 

3 ‘‘(B) COMMISSIONER OF SOCIAL SECU4 RITY.—The Commissioner of Social Security 

5 shall, on written request, disclose to officers 

6 and employees of the Department of the Treas7 ury individual identity information which has 

8 been disclosed to the Social Security Adminis9 tration as is necessary to administer section 

10 9512. 

11 ‘‘(C) RESTRICTION ON DISCLOSURE.—In12 formation disclosed under this paragraph shall 

13 be disclosed only for purposes of, and to the ex14 tent necessary in, carrying out section 9512.’’. 

15 SEC. 6. NATIONAL ACADEMY OF SCIENCES REVIEW OF CAR16 BON FEE AND EMISSIONS REDUCTION 

17 SCHEDULE. 

18 (a) IN GENERAL.—Not later than 10 years after the 

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

20 shall enter into an agreement with the National Academy 

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

22 imposed by section 9902 of the Internal Revenue Code of 

23 1986 and the emissions reductions schedule established 

24 under section 9903 of such Code. 

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


pamtmann on DSKBFK8HB2PROD with BILLS
36 

•HR 7173 IH

1 (1) assess the efficiency and effectiveness of the 

2 carbon fee in achieving the emissions reduction tar3 gets set forth in section 9903 of such Code; 

4 (2) describe and make recommendations on 

5 whether the carbon fee rate and annual increases 

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

7 be adjusted in order to optimize the efficiency and 

8 effectiveness of this Act in achieving the emissions 

9 reduction targets set forth in section 9903 of such 

10 Code; 

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

12 achieve future emissions targets set forth in section 

13 9903(a) of such Code through the year 2050; 

14 (4) describe and evaluate the effectiveness of 

15 the carbon fee in reducing emissions from key sec16 tors of the economy, including sectors of the econ17 omy that have decreased their carbon emissions, sec18 tors of the economy that have increased their carbon 

19 emissions, and sectors of the economy in which car20 bon emissions have not changed; 

21 (5) make findings and recommendations to 

22 Federal departments and agencies and to Congress 

23 on actions that could be taken to reduce carbon 

24 emissions in the sectors of the economy in which 

25 carbon emissions have not decreased; 


pamtmann on DSKBFK8HB2PROD with BILLS
37 

•HR 7173 IH

1 (6) make findings and recommendations on ad2 justing regulations enacted under the Clean Air Act 

3 and other Federal laws that affect economic sectors 

4 achieving the emissions reduction targets set forth in 

5 section 9903 of such Code; and 

6 (7) provide an assessment of any other factors 

7 determined to be material to the program’s effi8 ciency and effectiveness in achieving the goals set 

9 forth in this act. 

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

11 than 10 years after the date of the enactment of this Act, 

12 the Secretary of Energy shall submit to Congress the re13 port required under subsection (a). Such report shall be 

14 made electronically available to the public and open to 

15 public comment for at least 60 days before the final sub16 mission to Congress. 

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

18 CARBON SINKS. 

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

20 shall enter into an agreement with the National Academy 

21 of Sciences to conduct a study, make recommendations, 

22 and submit a report regarding the impact of the carbon 

23 fee on the use of biomass as an energy source and the 

24 resulting impacts on carbon sinks. 


pamtmann on DSKBFK8HB2PROD with BILLS
38 

•HR 7173 IH

1 (b) STUDY REQUIREMENTS.—The study conducted 

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

3 shall include analysis, documentation, and determinations 

4 on— 

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

6 biomass as an energy source and greenhouse gas 

7 emissions from the use of biomass as an energy 

8 source; 

9 (2) the impacts of the use of biomass as an en10 ergy source on carbon sinks; and 

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

12 used as an energy source. 

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

14 conclusions of the study, the National Academy of 

15 Sciences shall make recommendations to Federal depart16 ments and agencies and to Congress. The recommenda17 tions shall include any actions that should be taken to 

18 mitigate impacts of the carbon fee on— 

19 (1) increasing greenhouse gas emissions from 

20 the use of biomass as an energy source; and 

21 (2) degradation of carbon sinks relating to the 

22 use of biomass as an energy source. 

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

24 shall prepare a report that includes any findings and rec25 ommendations made pursuant to this section and, not 


pamtmann on DSKBFK8HB2PROD with BILLS
39 

•HR 7173 IH

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

2 this Act, make such report electronically available to the 

3 public. 

4 SEC. 8. 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. SUSPENSION OF REGULATION OF FUELS AND 

9 EMISSIONS BASED ON GREENHOUSE GAS EF10 FECTS. 

11 ‘‘(a) FUELS.—Unless specifically authorized in sec12 tion 202, 211, 213, or 231 or this section, if a carbon 

13 fee is imposed by section 9902 or 9908 of the Internal 

14 Revenue Code of 1986 with respect to a covered fuel, the 

15 Administrator shall not enforce any rule limiting the emis16 sion of greenhouse gases from the combustion of that fuel 

17 under this Act (or impose any requirement on any State 

18 to limit such emission) on the basis of the emission’s 

19 greenhouse gas effects. 

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

21 section 202, 211, 213, or 231 or this section, if a fee is 

22 imposed by section 9904 of the Internal Revenue Code of 

23 1986 with respect to a fluorinated greenhouse gas, the Ad24 ministrator shall not enforce any rule limiting such gas 

25 under this Act (or impose any requirement on any State 


pamtmann on DSKBFK8HB2PROD with BILLS
40 

•HR 7173 IH

1 to limit such gas) on the basis of the greenhouse gas ef2 fects of such gas. 

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 black carbon or 

15 any other pollutant that is not a greenhouse gas 

16 that the Administrator determines by rule has heat17 trapping properties; or 

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

19 greenhouse gas other than limiting its emission, in20 cluding— 

21 ‘‘(A) monitoring, reporting, and record22 keeping requirements; 

23 ‘‘(B) conducting or supporting investiga24 tions; and 

25 ‘‘(C) information collection. 


pamtmann on DSKBFK8HB2PROD with BILLS
41 

•HR 7173 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) sources that— 

6 ‘‘(A) are subject to subpart OOOO or 

7 OOOOa of part 60 of title 40, Code of Federal 

8 Regulations, as in effect or January 1, 2018; or 

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

10 OOOO or subpart OOOOa if such subpart ap11 plied regardless of the date on which construc12 tion, modification, or reconstruction of the 

13 source involved commenced; or 

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

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

17 ‘‘(e) SUSPENSION EXPIRATION.— 

18 ‘‘(1) DETERMINATION.—The Administrator 

19 shall make a determination by March 30, 2030, and 

20 no less than once every five years thereafter, based 

21 on the determination required by section 9903(b) of 

22 the Internal Revenue Code of 1986, as to whether 

23 cumulative greenhouse gas emissions from covered 

24 fuels subject to taxation under section 9902 of such 

25 Code during the period from calendar year 2022 


pamtmann on DSKBFK8HB2PROD with BILLS
42 

•HR 7173 IH

1 through the calendar year preceding the determina2 tion exceed the cumulative emissions for that period 

3 that would have occurred if the emission reduction 

4 targets in section 9903(a)(2) of such Code were met. 

5 ‘‘(2) CONSEQUENCE OF CUMULATIVE EMIS6 SIONS EXCEEDANCE.—If the Administrator deter7 mines under paragraph (1) that cumulative green8 house gas emissions from covered fuels subject to 

9 tax under section 9902 of the Internal Revenue 

10 Code of 1986 exceed the cumulative emissions for 

11 the period covered by the determination that would 

12 have occurred if the emission reduction targets in 

13 section 9903(a)(2) of such Code were met, then the 

14 prohibitions in subsection (a) of this section, and in 

15 section 211(c)(5) of this Act, shall cease to apply. 

16 ‘‘(f) ASSURING ENVIRONMENTAL INTEGRITY.— 

17 ‘‘(1) AUTHORITY.—If the Administrator deter18 mines pursuant to subsection (e)(1) of this section 

19 that the emission reduction targets in section 9903 

20 (a)(2) of the Internal Revenue Code of 1986 are not 

21 met— 

22 ‘‘(A) subsections (a) and (b) shall cease to 

23 apply; and 

24 ‘‘(B) the Administrator shall— 


pamtmann on DSKBFK8HB2PROD with BILLS
43 

•HR 7173 IH

1 ‘‘(i) issue such regulations as the Ad2 ministrator deems necessary to bring 

3 greenhouse gas emissions from covered 

4 fuels subject to taxation under section 

5 9902 of the Internal Revenue Code of 

6 1986 to levels that are at or below the 

7 emission reductions targets in section 

8 9903(a)(2) of such Code; and 

9 ‘‘(ii) require in such regulations that 

10 additional reductions in greenhouse gas 

11 emissions are achieved to fully compensate 

12 for any amount by which greenhouse gas 

13 emissions from covered fuels subject to 

14 taxation under section 9902 of such Code 

15 have exceeded the targets in section 

16 9903(a)(2) of such Code. 

17 ‘‘(2) DEADLINE FOR FINALIZING REGULA18 TIONS.—The Administrator shall finalize any regula19 tions required by paragraph (1) not later than two 

20 years after the Administrator makes the relevant de21 termination pursuant to such paragraph. 

22 ‘‘(3) ACHIEVEMENT OF ADDITIONAL REDUC23 TIONS.—Regulations issued pursuant to paragraph 

24 (1) shall ensure that any additional reductions re25 quired by paragraph (1)(B)(ii) are fully achieved by 


pamtmann on DSKBFK8HB2PROD with BILLS
44 

•HR 7173 IH

1 no later than eight years after the Administrator 

2 makes the determination pursuant to subsection 

3 (e)(1) described in paragraph (1). 

4 ‘‘(g) DEFINITIONS.—In this section, the terms 

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

6 meanings given to those terms in section 9901 of the In7 ternal Revenue Code of 1986.’’. 

8 (b) NEW MOTOR VEHICLES AND NEW MOTOR VEHI9 CLE ENGINES.—Section 202(b) of the Clean Air Act (42 

10 U.S.C. 7521(b)) is amended— 

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

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

13 101–549 (104 Stat. 2529)) as paragraph (4); and 

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

15 ‘‘(5) Notwithstanding subsections (a) and (b) of 

16 section 330, the Administrator may— 

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

18 gas (as defined in section 9901 of the Internal 

19 Revenue Code of 1986) on the basis of the 

20 emission’s greenhouse gas effects (as defined in 

21 section 9901 of the Internal Revenue Code of 

22 1986) from any class or classes of new motor 

23 vehicles or new motor vehicle engines subject to 

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


pamtmann on DSKBFK8HB2PROD with BILLS
45 

•HR 7173 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) The Administrator shall not, pursuant to this 

8 subsection, impose on any manufacturer or processor of 

9 fuel any requirement for the purpose of reducing the emis10 sion of any greenhouse gas (as defined in section 9901 

11 of the Internal Revenue Code of 1986) produced by com12 bustion of the fuel on the basis of the emission’s green13 house gas effects (as defined in section 9901 of the Inter14 nal Revenue Code of 1986).’’. 

15 (d) NONROAD ENGINES AND VEHICLES EMISSIONS

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

17 U.S.C. 7547) is amended by adding at the end the fol18 lowing: 

19 ‘‘(e) GREENHOUSE GAS EMISSIONS.—Notwith20 standing section 330(a), the Administrator may limit the 

21 emission of any greenhouse gas (as defined in section 

22 9901 of the Internal Revenue Code of 1986) on the basis 

23 of the emission’s greenhouse gas effects (as defined in sec24 tion 9901 of the Internal Revenue Code of 1986) from 


pamtmann on DSKBFK8HB2PROD with BILLS
46 

•HR 7173 IH

1 any nonroad engines and nonroad vehicles subject to regu2 lation under this section.’’. 

3 (e) AIRCRAFT EMISSION STANDARDS.—Section 231 

4 of the Clean Air Act (42 U.S.C. 7571) 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 9901 of the Internal 

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

10 greenhouse gas effects (as defined in section 9901 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.’’. 

15 SEC. 9. 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 more than 

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

21 SEC. 10. 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. 


pamtmann on DSKBFK8HB2PROD with BILLS
47 

•HR 7173 IH

1 SEC. 11. NO PREEMPTION OF STATE LAW. 

2 Nothing in this legislation shall preempt or super3 sede, or be interpreted to preempt or supersede, any State 

4 law or regulation. 

Æ 


pamtmann on DSKBFK8HB2PROD with BILLS