Raise Wages, Cut Carbon Act of 2019

To amend the Internal Revenue Code of 1986 to reduce social security payroll taxes and to reduce the reliance of the United States economy on carbon-based energy sources, and for other purposes. 1. Short title This Act may be cited as the Raise Wages, Cut Carbon Act of 2019 2. Increase in the low-income housing energy assistance program and the weatherization assistance program (a) LIHEAP On October 1, 2020, and each October 1 thereafter, there shall be made available, without further appropriation or fiscal year limitation, to carry out the Low-Income Home Energy Assistance Act of 1981 42 U.S.C. 8621 chapter 38 (b) Weatherization assistance program On October 1, 2020, and each October 1 thereafter, there shall be made available, without further appropriation or fiscal year limitation, to carry out the weatherization assistance program established under part A of title IV of the Energy Conservation and Production Act ( 42 U.S.C. 6861 chapter 38 (c) Addition to other amounts Amounts made available pursuant to this section shall be in addition to other amounts made available to carry out the Low-Income Home Energy Assistance Act of 1981 3. Distribution of certain estimated revenues to social security beneficiaries Not later than October 1 of each fiscal year beginning with fiscal year 2020, the Commissioner of Social Security shall pay an amount out of the general fund of the Treasury, equal to 10 percent of the net revenues received in the Treasury during the previous fiscal year from the taxes imposed under parts II, III, and IV of subchapter E of chapter 38 42 U.S.C. 401 4. Reduction of certain social security taxes; tax on combustible fossil fuels (a) In general Chapter 38 E Reduction of certain social security taxes; tax on combustible fossil fuels Part I—Reduction of certain social security taxes Part II—Tax on combustible fossil fuels Part III—Tax on certain additional imported products Part IV—Tax on fluorinated greenhouse gases Part V—Supermajority required To change revenue neutrality I Reduction of certain social security taxes Sec. 4691. Social Security taxes and benefits. 4691. Social Security taxes and benefits (a) Amounts appropriated to social security trust funds (1) In general There are hereby appropriated to the social security trust funds an amount equal to the excess (if any) of— (A) net revenues received in the Treasury from the taxes imposed by parts II, III, and IV, over (B) the net expenditures from the Treasury under sections 2 and 3 of the Raise Wages, Cut Carbon Act of 2019 (2) Allocation among funds Amounts appropriated under paragraph (1) shall be allocated among such funds as determined appropriate by the Managing Trustee of the Board of Trustees of the Trust Funds (within the meaning of title II of the Social Security Act), in cooperation with the Railroad Retirement Board. (b) Reduction in certain social security taxes (1) In general The rate of each specified social security tax for each calendar year (determined without regard to this section) shall be reduced by the number of percentage points equal to— (A) such rate, multiplied by (B) the reduction percentage determined by the Secretary for such calendar year. (2) Reduction percentage The reduction percentage determined by the Secretary under paragraph (1) for any calendar year shall be the percentage which the Secretary estimates will result in aggregate appropriations into each trust fund equal to the amount which would (without regard to this section) be appropriated to each trust fund for such calendar year. (c) Definitions For purposes of this subchapter— (1) Specified social security tax The term specified social security tax (A) the tax imposed by section 3101(a) (and so much of the tax imposed by section 3201(a) or section 3211(a) as is determined by reference to the tax imposed by section 3101(a)), and (B) 1/2 (2) Social security trust fund The term social security trust fund (A) the Federal Old-Age and Survivors Insurance Trust Fund established by section 201(a) of the Social Security Act, (B) the Federal Disability Insurance Trust Fund established by section 201(b) of the Social Security Act, and (C) the Social Security Equivalent Benefit Account established under section 15A of the Railroad Retirement Act of 1974. (d) Determination based on estimates Determinations under this section and sections 2 and 3 of the Raise Wages, Cut Carbon Act of 2019 (e) Publication of rate reductions Any adjustment under this section of social security tax rates for any calendar year shall be published in the Federal Register not later than 2 months before the beginning of such calendar year. II Tax on combustible fossil fuels Sec. 4692. Imposition of tax. Sec. 4693. Refunds or credits. Sec. 4694. Other definitions and special rules. 4692. Imposition of tax (a) In general There is hereby imposed a tax on any taxable carbon substance sold by the manufacturer, producer, or importer thereof. (b) Amount of tax (1) In general The amount of tax imposed by subsection (a) on any taxable carbon substance shall be the applicable amount per ton of the carbon dioxide emissions potential of such substance, as determined by the Secretary in consultation with the Secretary of Energy. (2) Fractional part of ton In the case of a fraction of a ton, the tax imposed by subsection (a) shall be the same fraction of the amount of such tax imposed on a whole ton. (3) Applicable amount (A) In general For purposes of this part, the applicable amount is— (i) for calendar year 2020, $40, (ii) for any calendar year following a year which is not a national emissions target attainment year, the sum of— (I) the product of the amount in effect under this subparagraph for the preceding calendar year and 102.5 percent, and (II) the inflation adjustment amount determined under subparagraph (B), and (iii) for any calendar year following a year which is a national emissions target attainment year, the sum of— (I) the amount in effect under this subparagraph for the preceding calendar year, and (II) the inflation adjustment amount determined under subparagraph (B). (B) Inflation adjustment amount (i) In general The inflation adjustment amount for any calendar year shall be an amount (not less than zero) equal to the product of— (I) the amount determined under subparagraph (A)(ii)(I) or (A)(iii)(I), as applicable, for such year, and (II) the percentage by which the CPI for the preceding calendar year exceeds the CPI for the second preceding calendar year. (ii) CPI Rules similar to the rules of paragraphs (4) and (5) of section 1(f) shall apply for purposes of this paragraph. (C) Rounding The applicable amount under this subsection shall be rounded up to the next whole dollar amount. (D) National emissions target attainment year For purposes of subparagraph (A), a calendar year is a national emissions target attainment year if the level of greenhouse gas emissions in the United States for the calendar year does not exceed 20 percent of the level of greenhouse gas emissions in the United States for calendar year 2005 as determined by the Secretary in consultation with the Administrator of the Environmental Protection Agency. (c) Taxable carbon substance For purposes of this subchapter, the term taxable carbon substance (1) coal (including lignite and peat), (2) petroleum and any petroleum product (as defined in section 4612(a)(3)), and (3) natural gas, which is extracted, manufactured, or produced in the United States or entered into the United States for consumption, use, or warehousing. (d) Substance taxed only once No tax shall be imposed by subsection (a) with respect to a taxable carbon substance if the person who would be liable for such tax establishes that a prior tax imposed by such section has been imposed with respect to such substance. 4693. Refunds or credits (a) Sequestered carbon Under regulations prescribed by the Secretary, if a person uses a taxable carbon substance so that the carbon associated with such substance will not be emitted, then an amount equal to the amount of tax in effect under section 4692(b) with respect to such substance for the calendar year in which such use begins shall be allowed as a credit or refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by section 4692. (b) Previously taxed carbon substances used To make another taxable carbon substance Under regulations prescribed by the Secretary, if— (1) a tax under section 4692 was paid with respect to any taxable carbon substance, and (2) such substance was used by any person in the manufacture or production of any other substance which is a taxable carbon substance, then an amount equal to the tax so paid shall be allowed as a credit or refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by section 4692. In any case to which this subsection applies, the amount of any such credit or refund shall not exceed the amount of tax imposed by section 4692 on the other taxable fuel manufactured or produced (or which would have been imposed by such subsection on such other fuel but for section 4692(d)). (c) Exemption for exports (1) Tax-free sales (A) In general No tax shall be imposed under subsection (a) on the sale by the manufacturer or producer of any taxable carbon substance for export or for resale by the purchaser to a second purchaser for export. (B) Proof of export required Rules similar to the rules of section 4221(b) shall apply for purposes of subparagraph (A). (2) Credit or refund If— (A) any person exports— (i) a taxable carbon substance, or (ii) any other product any portion of the cost of which is attributable to the use of any taxable carbon substance as an energy source for the manufacture or production of such product, and (B) such person establishes to the satisfaction of the Secretary the portion of such cost which is attributable to the tax under section 4692, credit or refund (without interest) of such tax shall be allowed or made to such person. (3) Regulations The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection. 4694. Other definitions and special rules (a) Definitions For purposes of this subchapter— (1) United States The term United States (2) Importer The term importer (3) Ton The term ton ton (b) Use treated as sale If any person manufactures, produces, or imports any taxable carbon substance and uses such substance, then such person shall be liable for tax under section 4692 in the same manner as if such substance were sold by such person. (c) Special rules for inventory exchanges (1) In general Except as provided in paragraph (2), in any case in which a manufacturer, producer, or importer of a taxable carbon substance exchanges such substance as part of an inventory exchange with another person— (A) such exchange shall not be treated as a sale, and (B) such other person shall, for purposes of section 4692, be treated as the manufacturer, producer, or importer of such substance. (2) Registration requirement Paragraph (1) shall not apply to any inventory exchange unless— (A) both parties are registered with the Secretary as manufacturers, producers, or importers of taxable carbon substances, and (B) the person receiving the taxable carbon substance has, at such time as the Secretary may prescribe, notified the manufacturer, producer, or importer of such person’s registration number and the internal revenue district in which such person is registered. (3) Inventory exchange For purposes of this subsection, the term inventory exchange III Tax on certain additional imported products Sec. 4695. Imposition of tax. Sec. 4696. Imported taxable product. 4695. Imposition of tax (a) In general There is hereby imposed a tax on any imported taxable product sold or used by the importer thereof. (b) Amount of tax The amount of the tax imposed by subsection (a) with respect to any imported taxable product shall be the applicable amount under section 4692 per ton on the lesser of— (1) the taxable carbon substances used in the manufacture or production of such product, or (2) the carbon dioxide emissions attributable to the manufacture or production of such product. (c) Procedure To challenge information provided by importer The Secretary shall establish a procedure under which interested persons may examine the information provided by an importer for purposes of this section, and bring to the attention of the Secretary any suspected errors in such information. 4696. Imported taxable product (a) In general For purposes of this part, the term imported taxable product (b) Listed industry For purposes of this section— (1) In general Except as provided in paragraph (2), the term listed industry (2) Special rule for 2020 through 2022 (A) 2020 During 2020, the term listed industry (B) 2021 and 2022 During 2021 and 2022, the term listed industry (i) the industries described in subparagraph (A), and (ii) (I) in the case of 2021, the 1/3 (II) in the case of 2022, the 2/3 (c) Other definitions For purposes of this part, the terms importer taxable carbon substance United States IV Tax on fluorinated greenhouse gases 4697. Imposition of tax (a) Fluorinated gas fee There is hereby imposed a tax on any fluorinated greenhouse gas which is required to be reported under part 98 of title 40, Code of Federal Regulations. (b) Amount The tax imposed under subsection (a) shall be paid by the person required to so report in an amount equal to— (1) the total amount, in metric tons of CO 2 (2) an amount equal to 10 percent of the applicable amount in effect under section 4692 for the calendar year of such emission. V Supermajority required to change revenue neutrality 4698. Supermajority required A bill, joint resolution, amendment to a bill or joint resolution, or conference report that increases aggregate revenues under parts II, III, and IV greater than the aggregate of— (1) the reduction in revenues under part I, and (2) the aggregate expenditures under sections 2 and 3 of the Raise Wages, Cut Carbon Act of 2019 may not be considered as passed or agreed to by the House of Representatives or the Senate unless so determined by a vote of not less than two-thirds of the Members of the House of Representatives or the Senate (as the case may be) voting, a quorum being present. . (b) Clerical amendment The table of subchapters for chapter 38 of such Code is amended by adding at the end the following new item: Subchapter F. Reduction of social security taxes; tax on combustible fossil fuels (c) Effective date The amendments made by this section shall take effect on January 1, 2020. 5. Amendments to the Clean Air Act (a) In general Title III of the Clean Air Act ( 42 U.S.C. 7601 330. Suspension of regulation of fuels and emissions based on greenhouse gas effects (a) Fuels Unless specifically authorized in section 202, 211, 213, or 231 or this section, if a tax is imposed by part II or III of subchapter E of chapter 38 (b) Emissions Unless specifically authorized in section 202, 211, 213, or 231 or this section, if a tax is imposed by part IV of subchapter E of chapter 38 (c) Authorized regulation Notwithstanding subsections (a) and (b), nothing in this section limits the Administrator’s authority pursuant to any other provision of this Act— (1) to limit the emission of any greenhouse gas because of any adverse impact on health or welfare other than its greenhouse gas effects; (2) in limiting emissions as described in paragraph (1), to consider the collateral benefits of limiting the emissions because of greenhouse gas effects; (3) to limit the emission of black carbon or any other pollutant that is not a greenhouse gas that the Administrator determines by rule has heat-trapping properties; or (4) to take any action with respect to any greenhouse gas other than limiting its emission, including— (A) monitoring, reporting, and record-keeping requirements; (B) conducting or supporting investigations; and (C) information collection. (d) Exception for certain greenhouse gas emissions Notwithstanding subsections (a) and (b), nothing in this section limits the Administrator’s authority to regulate greenhouse gas emissions from— (1) sources that— (A) are subject to subpart OOOO or OOOOa of part 60 of title 40, Code of Federal Regulations, as in effect or January 1, 2018; or (B) would be subject to such subpart OOOO or subpart OOOOa if such subpart applied regardless of the date on which construction, modification, or reconstruction of the source involved commenced; or (2) POTW Treatment Plants (as defined in section 403.3(r) of title 40, Code of Federal Regulations). (e) Suspension expiration (1) Determination The Administrator shall make a determination by March 30, 2030, and no less than once every five years thereafter, as to whether cumulative greenhouse gas emissions from covered fuels subject to tax under part II or III of subchapter E of chapter 38 (2) Consequence of cumulative emissions exceedance If the Administrator determines under paragraph (1) that cumulative greenhouse gas emissions from covered fuels subject to tax under part II or III of subchapter E of chapter 38 (f) Assuring environmental integrity (1) Authority If the Administrator makes the determination described in subsection (e)(2), the Administrator shall— (A) issue such regulations as the Administrator deems necessary to bring greenhouse gas emissions from covered fuels subject to tax under part II or III of subchapter E of chapter 38 (B) require in such regulations that additional reductions in greenhouse gas emissions are achieved to fully compensate for any amount by which greenhouse gas emissions from such fuels during the period referred to in subsection (e)(2) exceeded the levels at which such emissions would have been if subsection (a) had never applied. (2) Deadline for finalizing regulations The Administrator shall finalize any regulations required by paragraph (1) not later than two years after the Administrator makes the relevant determination pursuant to such paragraph. (3) Achievement of additional reductions Regulations issued pursuant to paragraph (1) shall ensure that any additional reductions required by paragraph (1)(B) are fully achieved by no later than eight years after the Administrator makes the determination described in subsection (e)(1). (g) Definitions In this section— (1) Greenhouse Gas The term greenhouse gas (2) Greenhouse Gas Effect The term greenhouse gas effect . (b) New motor vehicles and new motor vehicle engines Section 202(b) of the Clean Air Act ( 42 U.S.C. 7521(b) (1) by redesignating the second paragraph (3) (as redesignated by section 230(4)(C) of Public Law 101–549 (2) by adding at the end the following: (5) Notwithstanding subsections (a) and (b) of section 330, the Administrator may— (A) limit the emission of any greenhouse gas (as defined in section 330(g)) on the basis of the emission’s greenhouse gas effects (as defined in such section) from any class or classes of new motor vehicles or new motor vehicle engines subject to regulation under subsection (a)(1); and (B) grant a waiver under section 209(b)(1) for standards for the control of greenhouse gas emissions. . (c) Fuels Section 211(c) of the Clean Air Act ( 42 U.S.C. 7545(c) (5) The Administrator shall not, pursuant to this subsection, impose on any manufacturer or processor of fuel any requirement for the purpose of reducing the emission of any greenhouse gas (as defined in section 330(g)) produced by combustion of the fuel on the basis of the emission’s greenhouse gas effects (as defined in such section). . (d) Nonroad engines and vehicles emissions standards Section 213 of the Clean Air Act ( 42 U.S.C. 7547 (e) Greenhouse gas emissions Notwithstanding section 330(a), the Administrator may limit the emission of any greenhouse gas (as defined in section 330(g)) on the basis of the emission’s greenhouse gas effects (as defined in such section) from any nonroad engines and nonroad vehicles subject to regulation under this section. . (e) Aircraft emission standards Section 231 of the Clean Air Act ( 42 U.S.C. 7571 (d) Notwithstanding subsections (a) and (b) of section 330, the Administrator may limit the emission of any greenhouse gas (as defined in section 330(g)) on the basis of the emission’s greenhouse gas effects (as defined in such section) from any class or classes of aircraft engines, so long as any such limitation is not more stringent than the standards adopted by the International Civil Aviation Organization. .

Summary: Raise Wages, Cut Carbon Act of 2019 This bill imposes excise taxes on fossil fuels and fluorinated greenhouse gases and uses revenues from such taxes to reduce social security taxes. The bill annually increases funding beginning in FY2020 for the low-income home energy assistance program and the weatherization assistance program for low-income persons. It also directs the Social Security Administration to distribute to Social Security retirement beneficiaries 10% of environmental tax revenues beginning in FY2020. The bill imposes taxes on (1) the manufacturer, producer, or importer of coal (including lignite and peat), petroleum and petroleum products, and natural gas ($40 per ton in 2020 with a 2.5% increase each year emission reduction targets are not met); (2) any imported taxable product sold or used by its importer; and (3) fluorinated greenhouse gases. The bill requires a supermajority of either the House of Representatives or the Senate to change the revenue neutrality established by this bill. The bill also amends the Clean Air Act to suspend certain regulations that limit greenhouse gas emissions. The suspensions expire if  emissions targets are not reached after a specified time period.