Managed Carbon Price Act of 2015

To amend the Internal Revenue Code of 1986 to reduce greenhouse gas emissions by requiring a Federal emission permit for the sale or use of covered substances and to return funds to the American people. 1. Short title This Act may be cited as the Managed Carbon Price Act of 2015 2. Greenhouse Gas Emission Substances (a) In general The Internal Revenue Code of 1986 is amended by adding at the end the following: L Greenhouse Gas Emission Substances Sec. 9901. Condition precedent to sale or use of greenhouse gas emission substance. Sec. 9902. Federal emission permit. Sec. 9903. Definitions. Sec. 9904. Information reporting requirements. Sec. 9905. Regulations. 9901. Condition precedent to sale or use of greenhouse gas emission substance (a) In general No covered person may sell any greenhouse gas emission substance except pursuant to a Federal emission permit for each carbon dioxide equivalent that the Administrator of the Environmental Protection Agency determines would be emitted from the combustion or other greenhouse gas emitting use of such substance. (b) Covered person For purposes of this subtitle, the term covered person (1) in the case of coal (including lignite and peat) produced from a mine in the United States, the producer of such coal, (2) in the case of crude oil or petroleum products received at a United States refinery, the operator of the United States refinery, (3) in the case of natural gas, the first seller of such natural gas, (4) in the case of any greenhouse gas emission substance not described in paragraph (1), (2), or (3) produced in the United States, the producer of such substance, and (5) in the case of any greenhouse gas emission substance entered into the United States for consumption, use, or warehousing, the person entering such substance for consumption, use, or warehous­ing. (c) Use treated as sale (1) In general If any person uses a greenhouse gas emission substance before the first retail sale of such substance, then such person shall be liable for the purchase of a Federal emission permit under section 9902 in the same manner as if such substance were sold at retail on the date of such use by such person pursuant to a Federal emission permit. (2) Exemption for use in further manufacture Paragraph (1) shall not apply to use of a greenhouse gas emission substance as material in the manufacture or production of, or as a component part of, another article to be manufactured or produced by such person. (d) Exceptions Subsection (a) shall not apply to— (1) a greenhouse gas emission substance to be used for noncombustion agricultural purposes, or (2) a greenhouse gas emission substance with respect to which a Federal emission permit has previously been purchased. (e) Importation of Carbon Intensive Goods (1) Greenhouse gas emission permit equivalency fees The Secretary shall impose a greenhouse gas emission permit equivalency fee on imports of carbon intensive goods that shall be equivalent to the cost that domestic producers of comparable carbon intensive goods incur as a result of— (A) permit fees paid by covered persons for greenhouse gas emission substances under this section, and (B) greenhouse gas emission permit equivalency fees paid by importers of carbon intensive goods used in the production of the comparable carbon intensive goods in question. (2) Expiration Paragraph (1) and section 6433(b) shall cease to have effect at such time as and to the extent that— (A) an international agreement requiring countries that emit greenhouse gases and produce carbon intensive goods for international markets to adopt equivalent measures comes into effect, and (B) the country of export has implemented equivalent measures, and the actions provided for by paragraph (1) and section 6433(b) are no longer appropriate. 9902. Federal emission permit (a) In general The Secretary shall, subject to subsection (d), issue Federal emission permits, as provided for in this subtitle. A Federal emission permit may only be obtained upon making payment to the Secretary. (b) Rules relating to permits For purposes of this subtitle— (1) Each Federal emission permit shall be denominated in one-quarter carbon dioxide equivalents. (2) A Federal emission permit may only be purchased within fourteen calendar days before or after a greenhouse gas emission substance is produced or entered into the United States, as the case may be. (3) Except as provided in subsection (a), a Federal emission permit may not be sold, exchanged, or otherwise transferred. (c) Permit Price (1) Initial price The price for obtaining a Federal emission permit for emissions in 2016 is $12.50. (2) Subsequent prices The Secretary, after consultation with the Administrator of the Environmental Protection Agency and the Secretary of Energy, shall establish the price of obtaining a Federal emission permit for a calendar year based on a determination of the dollar amount necessary to meet the emissions reductions targets specified in subsection (d). (3) 5-year price schedule (A) In general Not later than January 1, 2016, the Secretary shall publish a schedule of the prices determined under paragraph (2) for obtaining a Federal emission permit during each of the five years from 2017 to 2021. The Secretary shall publish the price for obtaining a Federal emission permit in each year after 2020 no later than five years before January 1 of the applicable year. (B) Reduction in price if target reductions being exceeded If the Secretary determines— (i) that greenhouse gas emissions are being reduced at a rate that exceeds the reduction expected in national greenhouse gas emissions for the year, and (ii) that the Federal permit price can be reduced while still attaining the national greenhouse gas emission target reductions specified in subsection (d) for the year, the Secretary may, at any time before the beginning of the year, reduce the Federal permit price for that year. (4) Increase in price if target reductions not being met If the Secretary determines that the reduction of greenhouse gas emissions is failing to meet the target reductions specified in subsection (d) for a year in such period, the Secretary may increase the Federal permit price for permits no earlier than 2 years after the year for which the determination is made. (5) Maximum and Minimum Price (A) In general Not later than January 1, 2023, and every 10 years thereafter, the Secretary, after consultation with the Administrator of the Environmental Protection Agency and the Secretary of Energy, shall publish a 10-year schedule of the minimum and maximum prices for Federal emissions permits. (B) Prices specified For years prior to 2026, the maximum and minimum price for a Federal emission permit issued by the Secretary in a year may not be below the minimum price or the maximum price for the corresponding year specified in the following table: Year: Minimum Price is: Maximum Price is: 2017 $18.75 $31.25 2018 $31.25 $43.75 2019 $43.75 $56.25 2020 $56.25 $68.75 2021 $68.75 $82.25 2022 $81.25 $93.75 2023 $93.75 $106.25 2024 $106.25 $118.75 2025 $118.75 $131.25. (C) Adjustment for inflation In the case of any calendar year beginning after 2016, each dollar amount contained in the table in subparagraph (B) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost of living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting calendar year 2015 calendar year 1992 (d) National Limitation (1) Targets For purposes of this section— (A) 2016 through 2020 The average emissions for the period 2016 through 2020 shall be no more than 90 percent of the carbon dioxide equivalents emitted in the United States in 2005. (B) 2026 through 2030 The average emissions for the period 2026 through 2030 shall be no more than 70 percent of the carbon dioxide equivalents emitted in the United States in 2005. (C) 2036 through 2040 The average emissions for the period 2036 through 2040 shall be no more than 50 percent of the carbon dioxide equivalents emitted in the United States in 2005. (D) 2046 through 2050 The average emissions for the period 2046 through 2050 shall be no more than 30 percent of the carbon dioxide equivalents emitted in the United States in 2005. (E) 2056 through 2060 The average emissions for the period 2056 through 2060 shall be no more than 20 percent of the carbon dioxide equivalents emitted in the United States in 2005. (2) Determination of 2005 levels For purposes of subparagraph (A), the number of metric tons of carbon dioxide equivalents emitted in the United States in 2005 shall be the number determined under section 1605(a) of the Energy Policy Act of 1992 and published by the Energy Information Administration. (e) Report (1) In general Not later than the second March 1 after the date of the enactment of the Managed Carbon Price Act of 2015 (A) the extent to which the United States greenhouse gas emission limitations specified under subsection (d) are being achieved, (B) the United States greenhouse gas emission permits sold during the previous calendar year and the impact of the number of such permits on greenhouse gas emissions in the United States, and (C) the total greenhouse gas emissions worldwide for the previous calendar year in relation to such emissions for 2005. (2) Report details Such report shall include— (A) an explanation of the methodology and assumptions the Secretary has used in establishing prices under this section, and (B) an estimation, or range of estimations, of the price of permits for the 10-year period following the current prices published under subsection (c). 9903. Definitions (a) In general For purposes of this subtitle— (1) Administrator The term Administrator (2) Carbon dioxide equivalent The term carbon dioxide equivalent (3) Greenhouse gas emission substance The term greenhouse gas emission substance (A) coal (including lignite, peat, and derivatives of coal), to be used as a combustion fuel, (B) petroleum and any petroleum product, to be used as a combustion fuel, (C) natural gas (including the gasses released as a result of flaring or venting such natural gas), (D) methane, (E) nitrous oxide, (F) sulfur hexafluoride, (G) a perfluorocarbon, (H) a hydrofluorocarbon, and (I) any other substance that is determined by the Administrator to contribute to global warming to a nonnegligible degree. (4) Federal emission permit The term Federal emission permit (5) Carbon intensive good The term carbon intensive good (A) (i) iron, steel, any steel mill product (including pipe and tube), aluminum, cement, glass (including flat, container, and specialty glass and fiberglass), pulp, paper, chemicals, and industrial ceramics, and (ii) any other manufactured product that the Secretary determines— (I) is sold for purposes of further manufacture, and (II) generates, in the course of the manufacture of the product, direct and indirect greenhouse gas emissions that are comparable (on an emissions per dollar of output basis) to emissions generated in the manufacture or production of a good identified in clause (i), and (B) a manufactured item in which one or more goods identified under subparagraph (A) are inputs and the cost of production of which in the United States the Secretary determines is significantly increased by this subtitle. (6) Petroleum product The term petroleum product (b) Identification of carbon intensive goods The determinations by the Secretary required by subsection (a)(5) shall be by rule. (c) Publication of schedule Not later than one year after the date of the enactment of the Managed Carbon Price Act of 2015 9904. Information reporting requirements Secretary may solicit information from covered persons regarding estimated future use of greenhouse gas emissions substances. 9905. Regulations The Secretary shall issue such regulations as may be necessary or appropriate to carry out this subtitle, including regulations relating to the timely and efficient issuance of permits and collection of payments for such permits. . (b) Refund of Federal emission permit fee Subchapter B of chapter 65 of such Code is amended by adding at the end the following new section: 6433. Refunds of Federal emission permit fee for certain uses (a) In general If a Federal emission permit has been acquired with respect to a greenhouse gas emission substance pursuant to section 9902 and the acquirer of such permit uses such substance in a manner that will make a negligible or no contribution to global warming, as determined by the Secretary in consultation with the Administrator of the Environmental Protection Agency, the Secretary shall pay (without interest) to the acquirer of such substance pursuant to such permit an amount equal to the amount paid for the applicable Federal emission permit. (b) Payments to exporters The Secretary shall pay (without interest) to the exporter of a carbon intensive good (as defined in section 9903(5)) produced in the United States an amount equal to the cost that domestic producers of such carbon intensive goods incur as a result of— (1) the dollar amount paid by covered persons for Federal emission permits for greenhouse gas emission substances under this section 9902, and (2) greenhouse gas emission permit equivalency fees paid under section 9901(e) by importers of carbon intensive goods used in the production of the comparable carbon intensive goods in question. . (c) Failure To obtain permit Chapter 38 E Greenhouse Gas Emission Substances Sec. 4691. Greenhouse gas emission substances. 4691. Greenhouse gas emission substances (a) Imposition of tax There is hereby imposed on any covered person who fails to obtain a Federal emission permit pursuant to subtitle L a tax equal to 100 percent of the dollar amount of the fee that would have been charged for such permit but for such failure. (b) Covered person The term covered person (c) Federal emission permit The term Federal emission permit (d) Coordination The tax imposed under this section is in addition to the fee imposed under subtitle L. . (d) Establishment of Energy and Economic Security Trust Fund (1) Finding The Congress finds that revenue generated from the sale of Federal emission permits must be recycled into the American economy— (A) to facilitate economic growth and clean energy production, and (B) to protect the economic security of American families and communities. (2) Establishment of trust fund Subchapter A of chapter 98 of such Code (relating to trust fund code) is amended by adding at the end the following: 9512. Energy and Economic Security Trust Fund (a) Creation of Trust Fund There is established in the Treasury of the United States a trust fund to be known as the Energy and Economic Security Trust Fund Trust Fund (b) Transfers to Trust Fund There is hereby appropriated to the Trust Fund an amount equivalent to the amounts received in the Treasury pursuant to subtitle L. (c) Expenditures from Trust Fund (1) In general The Secretary shall pay monthly from the Trust Fund the dividend amount to each taxpayer. (2) Dividend amount For purposes of paragraph (1), the term dividend amount (A) (i) in the case of the taxpayer filing a joint return, the individual share for the husband and the individual share for the wife, and (ii) in the case of a taxpayer other than a taxpayer described in subparagraph (A), the individual share, and (B) in the case of an individual who is a dependent (as defined in section 152) of the taxpayer, ½ For purposes of subparagraph (B), not more than 2 dependents may be taken into account for each taxpayer. (3) Individual share For purposes of this subsection, the term individual share (4) Limitation For purposes of this subsection— (A) In general No amount is payable under this subsection with respect to an individual unless the individual is a qualified individual. (B) Qualified individual The term qualified individual (C) United States For purposes of subparagraph (B), the United States includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. . (e) Conforming and clerical amendments (1) The table of subchapters for chapter 38 of such Code is amended by adding at the end the following new item: Subchapter E. Greenhouse Gas Emission Substances . (2) The table of subtitles for the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Subtitle L. Greenhouse Gas Emission Substances . (3) The table of sections for subchapter B of chapter 65 of such Code is amended by adding at the end the following new item: Sec. 6433. Refunds of Federal emission permit fee for certain uses. . (4) The table of sections for subchapter A of chapter 98 of such Code is amended by adding at the end the following: Sec. 9512. Energy and Economic Security Trust Fund. . (f) Effective date The amendments made by this section shall apply with respect to the sale of any greenhouse gas emission substance after December 31, 2014.

Summary: Managed Carbon Price Act of 2015 Amends the Internal Revenue Code to require U.S. coal producers, oil refinery operators, first sellers of natural gas, and producers of other greenhouse gas [GHG] emission substances and importers of any GHG emission substance (covered persons) to purchase a federal emission permit from the Department of the Treasury for the sale, combustion, or other use of a GHG emission substance. Exempts from such requirement a GHG emission substance to be used for noncombustion agricultural purposes or for which a permit has been previously purchased. Requires Treasury to impose a GHG emission permit equivalency fee on imports of carbon intensive goods. Requires federal emission permits to be: (1) denominated in one-quarter carbon dioxide equivalents, and (2) purchased within 14 calendar days before or after a GHG emission substance is produced or entered into the United States. Requires Treasury to: (1) establish a price for obtaining a permit for a year based on a determination of the dollar amount necessary to meet specified emissions reductions targets; (2) publish a five-year price schedule for permits by January 1, 2016, for each of the five years from 2017 to 2021; and (3) publish a 10-year schedule of the minimum and maximum prices for permits by January 1, 2023, and every 10 years thereafter. Establishes minimum and maximum permit prices. Authorizes Treasury to reduce permit prices if target reductions are being exceeded and to increase such prices if target reductions are not being met. Establishes emission reduction targets for 2016 through 2060 decreasing from 90% to 20% of the carbon dioxide equivalents emitted in the United States in 2005. Requires Treasury to report annually on: (1) the extent to which such limitations are being achieved, (2) GHG emission permits sold and their impact on GHG emissions, and (3) worldwide GHG emissions in relation to 2005 emissions. Defines a &quot;carbon dioxide equivalent&quot; as the quantity of a GHG emission substance that makes the same contribution to global warming as one metric ton of carbon dioxide. Requires the Environmental Protection Agency to publish and update a schedule listing such quantity for each GHG emission substance. Requires: (1) repayment of permit fees to specified permittees that use GHG emission substances in a manner that will make a negligible or no contribution to global warming, and (2) payment of the permit equivalency fees to exporters of carbon-intensive goods. Imposes a tax on covered persons who fail to obtain a federal emission permit. Establishes the Energy and Economic Security Trust Fund to pay monthly dividends to taxpayers from permit sales revenues.