I 
111TH CONGRESS 
1ST SESSION 
H. R. 594 
To amend the Internal Revenue Code of 1986 to reduce emissions of carbon 
dioxide by imposing a tax on primary fossil fuels based on their carbon 
content. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 15, 2009 
Mr. STARK (for himself and Mr. MCDERMOTT) introduced the following bill; 
which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to reduce 
emissions of carbon dioxide by imposing a tax on primary 
fossil fuels based on their carbon content. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Save Our Climate Act 
of 2009’’. 
SEC. 2. FINDINGS. 
The Congress finds as follows: 
(1) The Intergovernmental Panel on Climate 
Change (IPCC) has concluded that human emissions 
VerDate Nov 24 2008 
00:05 Jan 21, 2009
Jkt 079200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H594.IH
H594
wwoods2 on PRODPC68 with BILLS
of greenhouse gases, particularly carbon dioxide are 
responsible for global climate change. 
(2) The IPCC has estimated that global tem-
peratures 
will 
rise 
between 
3.2–7.2 
degrees 
Farenheit in the next 100 years if carbon dioxide 
emissions are not dramatically reduced. 
(3) An increase of even a few degrees could 
have major adverse impacts on both the human and 
man-made environments, due to rising sea-levels, in-
tensification of weather events, mass extinction of 
species, and scarcity of water. 
(4) The United States is responsible for nearly 
24 percent of the world’s carbon dioxide emissions, 
equaling approximately six billion metric tons of car-
bon dioxide per year. 
(5) In order to stabilize the earth’s climate and 
prevent catastrophic global climate change, the level 
of worldwide carbon dioxide emissions need to be re-
duced 80 percent by 2050. 
(6) A tax on fossil fuels based on carbon con-
tent will reduce the incentive to burn those fuels, 
thereby reducing carbon dioxide emissions. 
(7) Revenue collected from a tax on fossil fuels 
could be used to decrease taxes on low and middle- 
income taxpayers, to fund research and development 
VerDate Nov 24 2008 
00:05 Jan 21, 2009
Jkt 079200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H594.IH
H594
wwoods2 on PRODPC68 with BILLS
of alternative green energy sources, or to increase 
funding for other domestic social priorities. 
SEC. 3. IMPOSITION OF CARBON TAX ON PRIMARY FOSSIL 
FUELS. 
(a) GENERAL RULE.—Chapter 38 of the Internal 
Revenue Code of 1986 (relating to environmental taxes) 
is amended by adding at the end thereof the following new 
subchapter: 
‘‘Subchapter E—Carbon Tax on Primary 
Fossil Fuels 
‘‘Sec. 4691. Imposition of tax. 
‘‘SEC. 4691. IMPOSITION OF TAX. 
‘‘(a) GENERAL RULE.—There is hereby imposed a 
tax on any taxable fuel sold by the manufacturer, pro-
ducer, or importer thereof. 
‘‘(b) AMOUNT OF TAX.— 
‘‘(1) IN GENERAL.—The amount of tax imposed 
by subsection (a) on any taxable fuel shall be an 
equivalent amount to $10 per ton of carbon content 
in such fuel, as determined by the Secretary in con-
sultation with the Secretary of Energy. 
‘‘(2) ANNUAL INCREASE IN AMOUNT OF TAX.— 
For each calendar year beginning after 2009 and 
ending with the year after the target attainment 
year, paragraph (1) shall be applied by substituting 
VerDate Nov 24 2008 
00:05 Jan 21, 2009
Jkt 079200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H594.IH
H594
wwoods2 on PRODPC68 with BILLS
for ‘$10’ the following: ‘the amount in effect under 
this paragraph for the preceding calendar year, in-
creased by $10,’. 
‘‘(3) RATE
FREEZE
AFTER
TARGET
ATTAIN-
MENT.—For the second year after the target attain-
ment year and each year thereafter, the amount in 
effect under paragraph (1) shall be the amount in 
effect under paragraph (1) for the first year after 
the target attainment year. 
‘‘(4) TARGET
ATTAINMENT
YEAR.—For pur-
poses of paragraph (2), a calendar year is the target 
attainment year if the level of carbon dioxide emis-
sions in the United States for the calendar year does 
not exceed 20 percent of the level of carbon dioxide 
emissions in the United States for calendar year 
1990, as determined by the Energy Information Ad-
ministration, Department of Energy. 
‘‘(c) TAXABLE FUEL.—For purposes of this section, 
the term ‘taxable fuel’ means— 
‘‘(1) coal (including lignite and peat), 
‘‘(2) petroleum and any petroleum product (as 
defined in section 4612(a)(3)), and 
‘‘(3) natural gas, 
VerDate Nov 24 2008 
00:05 Jan 21, 2009
Jkt 079200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H594.IH
H594
wwoods2 on PRODPC68 with BILLS
which is extracted, manufactured, or produced in the 
United States or entered into the United States for con-
sumption, use, or warehousing. 
‘‘(d) OTHER DEFINITIONS.—For purposes of this 
section— 
‘‘(1) UNITED
STATES.—The term ‘United 
States’ has the meaning given such term by section 
4612(a)(4). 
‘‘(2) IMPORTER.—The term ‘importer’ means 
the person entering the taxable fuel for consumption, 
use, or warehousing. 
‘‘(3) TON.—The term ‘ton’ means 2,000 
pounds. In the case of any taxable fuel which is a 
gas, the term ‘ton’ means the amount of such gas 
in cubic feet which is the equivalent of 2,000 pounds 
on a molecular weight basis. 
‘‘(e) EXCEPTION.—No tax shall be imposed by sub-
section (a) on the sale or in-kind exchange of any taxable 
fuel for deposit in the Strategic Petroleum Reserve estab-
lished under part B of title I of the Energy Policy and 
Conservation Act. 
‘‘(f) SPECIAL RULES.— 
‘‘(1) ONLY 1 TAX IMPOSED WITH RESPECT TO 
ANY PRODUCT.—No tax shall be imposed by sub-
section (a) with respect to a taxable fuel if, with re-
VerDate Nov 24 2008 
00:05 Jan 21, 2009
Jkt 079200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H594.IH
H594
wwoods2 on PRODPC68 with BILLS
spect to such fuel, the person who would be liable 
for such tax establishes that a prior tax imposed by 
such subsection has been imposed and no refund or 
credit with respect to such tax is allowed under sub-
section (g). 
‘‘(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) USE AND CERTAIN EXCHANGES BY MANU-
FACTURER, ETC.— 
‘‘(A) USE TREATED AS SALE.—If any per-
son manufactures, produces, or imports any 
taxable fuel and uses such fuel, then such per-
son shall be liable for tax under subsection (a) 
in the same manner as if such fuel were sold 
by such person. 
‘‘(B) SPECIAL RULES FOR INVENTORY EX-
CHANGES.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in this subparagraph, in any case in 
which a manufacturer, producer, or im-
porter of a taxable fuel exchanges such 
fuel as part of an inventory exchange with 
another person— 
VerDate Nov 24 2008 
00:05 Jan 21, 2009
Jkt 079200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H594.IH
H594
wwoods2 on PRODPC68 with BILLS
‘‘(I) such exchange shall not be 
treated as a sale, and 
‘‘(II) such other person shall, for 
purposes of subsection (a), be treated 
as the manufacturer, producer, or im-
porter of such fuel. 
‘‘(ii) REGISTRATION REQUIREMENT.— 
Clause (i) shall not apply to any inventory 
exchange unless— 
‘‘(I) both parties are registered 
with the Secretary as manufacturers, 
producers, or importers of taxable 
fuels, and 
‘‘(II) the person receiving the 
taxable fuel 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. 
‘‘(iii) INVENTORY
EXCHANGE.—For 
purposes of this subparagraph, the term 
‘inventory exchange’ means any exchange 
in which 2 persons exchange property 
VerDate Nov 24 2008 
00:05 Jan 21, 2009
Jkt 079200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H594.IH
H594
wwoods2 on PRODPC68 with BILLS
which is, in the hands of each person, 
property described in section 1221(a)(1). 
‘‘(g) REFUND OR CREDIT FOR CERTAIN USES.— 
‘‘(1) MANUFACTURE OR PRODUCTION OF AN-
OTHER
TAXABLE
FUEL.—Under regulations pre-
scribed by the Secretary, if— 
‘‘(A) a tax under subsection (a) was paid 
with respect to any taxable fuel, and 
‘‘(B) such fuel was used by any person in 
the manufacture or production of any other 
substance which is a taxable fuel, 
then a credit or refund (without interest) shall be al-
lowed, in the same manner as if it were an overpay-
ment of tax imposed by subsection (a), to such per-
son in an amount equal to the tax so paid. 
‘‘(2) EMBEDDED OR SEQUESTERED CARBON.— 
Under regulations prescribed by the Secretary, if— 
‘‘(A) a tax under subsection (a) was paid 
with respect to any taxable fuel, 
‘‘(B) a person uses such fuel in the manu-
facture or production of any substance which is 
not a taxable fuel, and 
‘‘(C) in the process of such manufacture or 
production, carbon in such fuel is embedded or 
sequestered, 
VerDate Nov 24 2008 
00:05 Jan 21, 2009
Jkt 079200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H594.IH
H594
wwoods2 on PRODPC68 with BILLS
then a credit or refund (without interest) shall be al-
lowed to such person in the same manner as if it 
were an overpayment of tax imposed by subsection 
(a). The amount of such credit or refund shall be an 
amount equal to the amount of tax in effect under 
subsection (a) with respect to such fuel for the cal-
endar year in which such manufacture or production 
occurred, determined on the basis of carbon so em-
bedded or sequestered. 
‘‘(3) LIMITATION.—In any case to which para-
graph (1) or (2) applies, the amount of any such 
credit or refund shall not exceed the amount of tax 
imposed by subsection (a) on the taxable fuel used 
in such manufacture or production (or which would 
have been imposed by such subsection on such other 
fuel but for subsection (h)). 
‘‘(h) EXEMPTION
FOR
EXPORTS
OF
TAXABLE 
FUELS.— 
‘‘(1) TAX-FREE SALES.— 
‘‘(A) IN GENERAL.—No tax shall be im-
posed by subsection (a) on the sale by the man-
ufacturer or producer of any taxable fuel for ex-
port or for resale by the purchaser to a second 
purchaser for export. 
VerDate Nov 24 2008 
00:05 Jan 21, 2009
Jkt 079200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H594.IH
H594
wwoods2 on PRODPC68 with BILLS
‘‘(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 WHERE TAX PAID.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), if— 
‘‘(i) tax under subsection (a) was paid 
with respect to any taxable fuel, and 
‘‘(ii)(I) such fuel was exported by any 
person, or 
‘‘(II) such fuel was used as a material 
in the manufacture or production of a tax-
able fuel which was exported by any person 
and which, at the time of export, was a 
taxable fuel, 
credit or refund (without interest) of such tax 
shall be allowed or made to the person who paid 
such tax. 
‘‘(B) CONDITION
TO
ALLOWANCE.—No 
credit or refund shall be allowed or made under 
subparagraph (A) unless the person who paid 
the tax establishes that he— 
‘‘(i) has repaid or agreed to repay the 
amount of the tax to the person who ex-
ported the taxable fuel, or 
VerDate Nov 24 2008 
00:05 Jan 21, 2009
Jkt 079200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H594.IH
H594
wwoods2 on PRODPC68 with BILLS
‘‘(ii) has obtained the written consent 
of such exporter to the allowance of the 
credit or the making of the refund. 
‘‘(C) 
REFUNDS
DIRECTLY
TO
EX-
PORTER.—The Secretary shall provide, in regu-
lations, the circumstances under which a credit 
or refund (without interest) of the tax under 
subsection (a) shall be allowed or made to the 
person who exported the taxable fuel, where— 
‘‘(i) the person who paid the tax 
waives his claim to the amount of such 
credit or refund, and 
‘‘(ii) the person exporting the taxable 
fuel provides such information as the Sec-
retary may require in such regulations. 
‘‘(3) REGULATIONS.—The Secretary shall pre-
scribe such regulations as may be necessary to carry 
out the purposes of this subsection.’’. 
(b) STUDY.—Not later than 5 years after the date 
of the enactment of this Act, and every 5 years thereafter, 
the Secretary of the Treasury, in consultation with the 
Secretary of Energy, shall conduct a study on the environ-
mental, economic, and revenue impacts regarding the tax 
imposed by subchapter E of chapter 38 of the Internal 
Revenue Code of 1986 (relating to carbon tax on primary 
VerDate Nov 24 2008 
00:05 Jan 21, 2009
Jkt 079200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H594.IH
H594
wwoods2 on PRODPC68 with BILLS
fossil fuels). The Secretary shall submit each study to the 
Committee on Ways and Means of the House of Rep-
resentatives and the Committee on Finance of the Senate. 
(c) CLERICAL AMENDMENT.—The table of sub-
chapters for chapter 38 of such Code is amended by add-
ing at the end thereof the following new item: 
‘‘SUBCHAPTER E. CARBON TAX ON PRIMARY FOSSIL FUELS’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to sales after the date of the enact-
ment of this Act. 
Æ 
VerDate Nov 24 2008 
00:05 Jan 21, 2009
Jkt 079200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6301
E:\BILLS\H594.IH
H594
wwoods2 on PRODPC68 with BILLS