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 genera-
tions. 
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 pe-
riod to be subsequently determined by the Speaker, in each case for con-
sideration of such provisions as fall within the jurisdiction of the com-
mittee 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 gen-
erations. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Energy Innovation and 
Carbon Dividend Act of 2018’’. 
SEC. 2. FINDINGS. 
The Congress finds that— 
(1) efficient markets strengthen our economy 
and benefit our Nation by encouraging competition, 
innovation, and technological progress; 
(2) efficient markets should reflect all costs of 
goods to ensure that they advance America’s pros-
perity and national interests; 
(3) emissions of carbon pollution and other 
harmful pollutants into our Nation’s air impose sub-
stantial costs on all Americans and on future gen-
erations; and 
(4) creation of a Carbon Dividend Trust Fund, 
to be distributed to the American people, will make 
markets more efficient, create jobs, and stimulate 
competition, innovation, and technological progress 
that benefit all Americans and future generations. 
SEC. 3. CARBON DIVIDENDS AND CARBON FEE. 
(a) IN GENERAL.—The Internal Revenue Code of 
1986 is amended by adding at the end the following new 
subtitle: 
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exposed, except that no covered fuel is a carbon-in-
tensive product, and 
‘‘(2) until such time that the Secretary promul-
gates rules identifying carbon-intensive products, the 
following shall be considered carbon-intensive prod-
ucts: iron, steel, steel mill products (including pipe 
and tube), aluminum, cement, glass (including flat, 
container, and specialty glass and fiberglass), pulp, 
paper, chemicals, or industrial ceramics. 
‘‘(d) CARBON LEAKAGE.—The term ‘carbon leakage’ 
means an increase of global greenhouse gas emissions 
which are substantially due to the relocation of greenhouse 
gas sources from the United States to jurisdictions which 
lack comparable controls upon greenhouse gas emissions. 
‘‘(e) COST OF CARBON OR CARBON COSTS.—The 
term ‘cost of carbon’ or ‘carbon costs’ means a national 
or sub-national government policy which explicitly places 
a price on greenhouse gas pollution and shall be limited 
to either a tax on greenhouse gases or a system of cap- 
and-trade. The cost of carbon is expressed as the price 
per ton of CO2-e. 
‘‘(f) COVERED ENTITY.—The term ‘covered entity’ 
means— 
‘‘(1) in the case of crude oil— 
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‘‘(A) a refinery operating in the United 
States, and 
‘‘(B) any importer of any petroleum or pe-
troleum product into the United States, 
‘‘(2) in the case of coal— 
‘‘(A) any coal mining operation in the 
United States, and 
‘‘(B) any importer of coal into the United 
States, 
‘‘(3) in the case of natural gas— 
‘‘(A) any entity entering pipeline quality 
natural gas into the natural gas transmission 
system, and 
‘‘(B) any importer of natural gas into the 
United States, 
‘‘(4) in the case of fluorinated gases any entity 
required to report the emission of a fluorinated gas 
under part 98 of title 40, Code of Federal Regula-
tions, and 
‘‘(5) any entity or class of entities which, as de-
termined by the Secretary, is transporting, selling, 
or otherwise using a covered fuel in a manner which 
emits a greenhouse gas to the atmosphere and which 
has not been covered by the carbon fee, the 
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fluorinated greenhouse gas fee, or the carbon border 
fee adjustment. 
‘‘(g) COVERED
FUEL.—The term ‘covered fuel’ 
means crude oil, natural gas, coal, or any other product 
derived from crude oil, natural gas, or coal which shall 
be used so as to emit greenhouse gases to the atmosphere. 
‘‘(h) CRUDE OIL.—The term ‘crude oil’ means 
unrefined petroleum. 
‘‘(i) EXPORT.—The term ‘export’ means to transport 
a product from within the jurisdiction of the United States 
to persons outside the United States. 
‘‘(j) FLUORINATED GREENHOUSE GAS.—The term 
‘fluorinated greenhouse gas’ means sulfur hexafluoride 
(SF6), nitrogen trifluoride (NF3), and any fluorocarbon 
except for controlled substances as defined in subpart A 
of part 82 of title 40, Code of Federal Regulation, and 
substances with vapor pressures of less than 1 mm of Hg 
absolute at 25 degrees. With these exceptions, ‘fluorinated 
greenhouse gas’ includes but is not limited to any 
hydrofluorocarbon, 
any 
perfluorocarbon, 
any 
fully 
fluorinated linear, branched or cyclic alkane, ether, ter-
tiary amine or aminoether, any perfluoropolyether, and 
any hydrofluoropolyether. 
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‘‘(k) FOSSIL FUEL.—The term ‘fossil fuel’ means 
coal, coal products, petroleum, petroleum products, or nat-
ural gas. 
‘‘(l) FULL FUEL CYCLE GREENHOUSE GAS EMIS-
SIONS.—The term ‘full fuel cycle greenhouse gas emis-
sions’ means the greenhouse gas content of a covered fuel 
plus that covered fuel’s upstream greenhouse gas emis-
sions. 
‘‘(m) GLOBAL WARMING POTENTIAL.—The term 
‘global warming potential’ means the ratio of the time- 
integrated radiative forcing from the instantaneous release 
of one kilogram of a trace substance relative to that of 
one kilogram of carbon dioxide. 
‘‘(n) GREENHOUSE GAS.—The term ‘greenhouse gas’ 
means carbon dioxide (CO2), methane (CH4), nitrous 
oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocar-
bons (HFCs), perfluorocarbon (PFCs), and other gases as 
defined by rule of the Administrator. 
‘‘(o) GREENHOUSE
GAS
CONTENT.—The term 
‘greenhouse gas content’ means the amount of greenhouse 
gases, expressed in metric tons of CO2-e, which would be 
emitted to the atmosphere by the use of a covered fuel 
and shall include, nonexclusively, emissions of carbon diox-
ide (CO2), nitrous oxide (N2O), methane (CH4), and other 
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greenhouse gases as identified by rule of the Adminis-
trator. 
‘‘(p) GREENHOUSE GAS EFFECT.—The term ‘green-
house gas effect’ means the adverse effects of greenhouse 
gases on health or welfare caused by the greenhouse gas’s 
heat-trapping potential or its effect on ocean acidification. 
‘‘(q) IMPORT.—Irrespective of any other definition in 
law or treaty, the term ‘import’ means to land on, bring 
into, or introduce into any place subject to the jurisdiction 
of the United States. 
‘‘(r) PETROLEUM.—The term ‘petroleum’ means oil 
removed from the earth or the oil derived from tar sands 
or shale. 
‘‘(s) PRODUCTION GREENHOUSE GAS EMISSIONS.— 
The term ‘production greenhouse gas emissions’ means 
the quantity of greenhouse gases, expressed in metric tons 
of CO2-e, emitted to the atmosphere resulting from, non-
exclusively, the production, manufacture, assembly, trans-
portation, or financing of a product. 
‘‘(t) UPSTREAM GREENHOUSE GAS EMISSIONS.— 
The term ‘upstream greenhouse gas emissions’ means the 
quantity of greenhouse gases, expressed in metric tons of 
CO2-e, emitted to the atmosphere resulting from, non-
exclusively, the extraction, processing, transportation, fi-
nancing, or other preparation of a covered fuel for use. 
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‘‘SEC. 9902. CARBON FEE. 
‘‘(a) CARBON FEE.—There is hereby imposed a car-
bon fee on any covered entity’s emitting use, or sale or 
transfer for an emitting use, of any covered fuel. 
‘‘(b) AMOUNT OF THE CARBON FEE.—The carbon 
fee imposed by this section is an amount equal to— 
‘‘(1) the greenhouse gas content of the covered 
fuel, multiplied by 
‘‘(2) the carbon fee rate. 
‘‘(c) CARBON FEE RATE.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The carbon fee rate, with 
respect to any use, sale, or transfer during a cal-
endar year, shall be— 
‘‘(A) in the case of calendar year 2019, 
$15, and 
‘‘(B) except as provided in paragraph (2), 
in the case of any calendar year thereafter, the 
carbon fee rate in effect under this subsection 
for the preceding calendar year, plus $10. 
‘‘(2) EXCEPTIONS.— 
‘‘(A) 
INCREASED
CARBON
FEE
RATE 
AFTER MISSED ANNUAL EMISSIONS REDUCTION 
TARGET.—In the case of any year immediately 
following a year for which the Secretary deter-
mines under 9903(b) that the actual emissions 
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of greenhouse gases from covered fuels exceeded 
the emissions reduction target for the previous 
year, paragraph (1)(B) shall be applied by sub-
stituting ‘$15’ for ‘$10’. 
‘‘(B) CESSATION OF CARBON FEE RATE IN-
CREASE AFTER CERTAIN EMISSION REDUCTIONS 
ACHIEVED.—In the case of any year imme-
diately following a year for which the Secretary 
determines under 9903(b) that actual emissions 
of greenhouse gases from covered fuels is not 
more than 10 percent of the greenhouse gas 
emissions from covered fuels during the year 
2015, paragraph (1)(B) shall be applied by sub-
stituting ‘$0’ for ‘$10’. 
‘‘(d) EXEMPTION
AND
REFUND.—The Secretary 
shall prescribe such rules as are necessary to ensure the 
fee imposed by this section is not imposed with respect 
to any nonemitting use, or any sale or transfer for a non-
emitting use, including rules providing for the refund of 
any carbon fee paid under this section with respect to any 
such use, sale, or transfer. 
‘‘(e) AGRICULTURE EXEMPTIONS.— 
‘‘(1) FUEL.—If any covered fuel or its deriva-
tive is used on a farm for a farming purpose, the 
Secretary shall pay (without interest) to the ultimate 
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purchaser of such covered fuel or its derivative, the 
total amount of carbon fees previously paid upon 
that covered fuel, as specified by rule of the Sec-
retary. 
‘‘(2) FARM, FARMING USE, AND FARMING PUR-
POSE.—The terms ‘farm’, ‘farming use’, and ‘farm-
ing purpose’ shall have the respective meanings 
given such terms under section 6420(c). 
‘‘(3) OTHER
GREENHOUSE
GASES
EMISSIONS 
FROM AGRICULTURE.—The carbon fee shall not be 
levied upon non-fossil fuel greenhouse gas emissions 
which occur on a farm. 
‘‘SEC. 9903. EMISSIONS REDUCTION SCHEDULE. 
‘‘(a) IN GENERAL.—An emissions reduction schedule 
for greenhouse gas emissions from covered fuels is hereby 
established, as follows: 
‘‘(1) REFERENCE YEAR.—The greenhouse gas 
emissions from covered fuels during the year 2015 
shall be the reference amount of emissions and shall 
be determined from the ‘Inventory of U.S. Green-
house Gas Emissions and Sinks: 1990–2015’ pub-
lished by the Environmental Protection Agency in 
April of 2017. 
‘‘(2) EMISSIONS
REDUCTION
TARGET.—The 
first emission reduction target shall be for the year 
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2022. The emission target for each year thereafter 
shall be the previous year’s target emissions minus 
a percentage of emissions during the reference year 
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 
‘‘(b) ADMINISTRATIVE DETERMINATION.—Not later 
than 60 days after the beginning of each calendar year 
beginning after the enactment of this section, the Sec-
retary, in consultation with the Administrator, shall deter-
mine whether actual emissions of greenhouse gases from 
covered fuels exceeded the emissions reduction target for 
the preceding calendar year. The Secretary shall make 
such determination using the same greenhouse gas ac-
counting method as was used to determine the greenhouse 
gas emissions in the ‘Inventory of U.S. Greenhouse Gas 
Emissions and Sinks: 1990–2015’ published by the Envi-
ronmental Protection Agency in April of 2017. 
‘‘SEC. 9904. FEE ON FLUORINATED GREENHOUSE GASES. 
‘‘(a) FLUORINATED GAS FEE.—A fee is hereby im-
posed upon any fluorinated greenhouse gas which is re-
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quired to be reported under part 98 of title 40, Code of 
Federal Regulations. 
‘‘(b) AMOUNT.—The fee to be paid by the covered 
entity required to so report shall be an amount equal to— 
‘‘(1) the total amount, in metric tons of CO2- 
e, of emitted fluorinated greenhouse gases (or, in the 
case of a supplier, emissions that would result deter-
mined under the rules of such part), multiplied by 
‘‘(2) an amount equal to 10 percent of the car-
bon fee rate in effect under section 9902(d)(1) for 
the calendar year of such emission. 
‘‘SEC. 9905. DECOMMISSIONING OF CARBON FEE. 
‘‘(a) IN GENERAL.—At such time that— 
‘‘(1) the Secretary determines under 9903(b) 
that actual emissions of greenhouse gases from cov-
ered fuels is not more than 10 percent of the green-
house gas emissions from covered fuels during the 
year 2015, and 
‘‘(2) the monthly carbon dividend payable to an 
adult eligible individual has been less than $20 for 
3 consecutive years, 
the Secretary shall decommission in an orderly manner all 
bureaus and programs associated with administering the 
carbon fee, the carbon border fee adjustment, and the Car-
bon Dividend Trust Fund. 
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‘‘(b) INFLATION ADJUSTMENT.—In the case of any 
calendar year after 2018, the $20 amount under sub-
section (a)(2) shall be increased by an amount equal to— 
‘‘(1) such dollar amount, multiplied by 
‘‘(2) cost-of-living adjustment determined under 
section 1(f)(3) for the calendar year, determined by 
substituting ‘calendar year 2017’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof. 
‘‘SEC. 9906. CARBON CAPTURE AND SEQUESTRATION. 
‘‘(a) IN GENERAL.—The Secretary, in consultation 
with the Administrator and the Secretary of Energy, shall 
prescribe regulations for making payments as provided in 
subsection (b) to qualified facilities which capture and se-
quester qualified carbon dioxide. 
‘‘(b) PAYMENT AMOUNTS.— 
‘‘(1) IN GENERAL.—The Secretary shall make 
payments to a qualified facility in the same manner 
as if such payment was a refund of an overpayment 
of the carbon fee imposed by section 9902, in cases 
in which such qualified facility— 
‘‘(A) uses any covered fuel— 
‘‘(i) with respect to which the carbon 
fee has been paid, and 
‘‘(ii) which results in the emission of 
qualified carbon dioxide, 
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‘‘(B) captures such emitted qualified car-
bon dioxide, and 
‘‘(C)(i) sequesters such qualified carbon di-
oxide in a manner which is safe, permanent, 
and in compliance with any applicable local, 
State, and Federal laws, or 
‘‘(ii) utilizes such qualified carbon dioxide 
in a manner provided in paragraph (3)(C). 
‘‘(2) AMOUNT OF REFUND.—The payment de-
termined under this section shall be an amount 
equal to the lesser of— 
‘‘(A)(i) the adjusted metric tons of quali-
fied carbon dioxide captured and sequestered or 
utilized, multiplied by 
‘‘(ii) the carbon fee rate during the year in 
which the carbon fee was imposed by section 
9902 upon the covered fuel to which such car-
bon dioxide relates, or 
‘‘(B) the amount of the carbon fee imposed 
by section 9902 with respect to such covered 
fuel. 
‘‘(3) DEFINITIONS AND SPECIAL RULES.—For 
purposes of this section— 
‘‘(A) QUALIFIED CARBON DIOXIDE; QUALI-
FIED FACILITY.— 
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‘‘(i) QUALIFIED CARBON DIOXIDE.— 
The term ‘qualified carbon dioxide’ has the 
same meaning given such term under sec-
tion 45Q(b). 
‘‘(ii) QUALIFIED FACILITY.—The term 
‘qualified facility’ means any industrial fa-
cility at which carbon capture equipment is 
placed in service. 
‘‘(B) ADJUSTED TOTAL METRIC TONS.— 
The adjusted total metric tons of qualified car-
bon dioxide captured and sequestered or utilized 
shall be the total tons of qualified carbon diox-
ide captured and sequestered or utilized, re-
duced by the amount of any carbon dioxide like-
ly to escape and be emitted into the atmosphere 
due to imperfect storage technology or other-
wise, as determined by the Secretary in con-
sultation with the Administrator. 
‘‘(C) UTILIZATION.—The Secretary, in 
consultation with the Administrator, shall es-
tablish regulations providing for the methods 
and processes by which qualified carbon dioxide 
may be utilized so as to remove that qualified 
dioxide safely and permanently from the atmos-
phere. Utilization may include the production of 
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substances such as but not limited to plastics 
and chemicals. Such regulations shall minimize 
the escape or further emission of the qualified 
carbon dioxide into the atmosphere. 
‘‘(D) SEQUESTRATION.—Not later 540 
days after the date of the enactment of this sec-
tion, the Secretary, in consultation with the Ad-
ministrator, shall prescribe regulations identi-
fying the conditions under which carbon dioxide 
may be safely and permanently sequestered. 
‘‘(4) COORDINATION WITH CREDIT FOR CARBON 
DIOXIDE SEQUESTRATION.—At such time that the 
Secretary prescribes regulations implementing this 
section, no payment under this section shall be al-
lowed to a taxpayer to whom a credit has been al-
lowed for any taxable year under section 45Q. 
‘‘SEC. 9907. ADMINISTRATIVE AUTHORITY. 
‘‘(a) IN GENERAL.—The Secretary in consultation 
with the Administrator shall prescribe such regulations, 
and other guidance, as may be necessary to carry out the 
purposes of this subtitle and assess and collect the carbon 
fee imposed by section 9902 and the fluorinated green-
house gas fee imposed by section 9904. 
‘‘(b) SPECIFICALLY.—Such regulations and guidance 
shall include— 
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‘‘(1) the identification of an effective point in 
the production, distribution, or use of a covered fuel 
or fluorinated greenhouse gas for collecting such car-
bon fee or fluorinated greenhouse gas fee, in such a 
manner so as to minimize administrative burden and 
maximize the extent to which full fuel cycle green-
house gas emissions from covered fuels or fluorinat-
ed greenhouse gases have the carbon fee or fluori-
nated greenhouse gas fee levied upon them, 
‘‘(2) the identification of covered entities which 
shall be liable for the payment of the carbon fee or 
the fluorinated greenhouse gas fee, 
‘‘(3) requirements for the monthly payment of 
such fees, 
‘‘(4) as may be necessary or convenient, rules 
for distinguishing between different types of covered 
fuels, 
‘‘(5) as may be necessary or convenient, rules 
for distinguishing between a covered fuel’s green-
house gas content and its upstream greenhouse gas 
emissions, 
‘‘(6) rules to ensure that no covered fuel or 
fluorinated greenhouse gas has the carbon fee, 
fluorinated greenhouse gas fee, or carbon border fee 
adjustment imposed upon it more than once, and 
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‘‘(7) rules to ensure that the domestic imple-
mentation of the carbon fee and the fluorinated 
greenhouse gas fee coordinate with the implementa-
tion of the carbon border fee adjustment of chapter 
102. 
‘‘CHAPTER 102—CARBON BORDER FEE 
ADJUSTMENT 
‘‘Sec. 9908. Carbon border fee adjustment. 
‘‘Sec. 9909. Administration of the carbon border fee adjustment. 
‘‘Sec. 9910. Allocation of carbon border fee adjustment revenues. 
‘‘SEC. 9908. CARBON BORDER FEE ADJUSTMENT. 
‘‘(a) IN GENERAL.—The fees imposed by, and re-
funds allowed under, this section shall be referred to as 
‘the carbon border fee adjustment’. 
‘‘(b) PURPOSE.—The purpose of the carbon border 
fee adjustment is to protect animal, plant, and human life 
and health, to conserve exhaustible natural resources by 
preventing carbon leakage, and to facilitate the creation 
of international agreements. 
‘‘(c) IMPORTED COVERED FUELS FEE.—In the case 
of any person that imports into the United States any cov-
ered fuel, there shall be imposed a fee equal to the excess 
(if any) of— 
‘‘(1) an amount equal to— 
‘‘(A) the amount of full fuel cycle green-
house gas emissions of such fuel, multiplied by 
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‘‘(B) the carbon fee rate in effect for the 
year in which such fuel is imported, over 
‘‘(2) the total foreign cost of carbon carried by 
such fuel. 
‘‘(d) 
IMPORTED
CARBON-INTENSIVE
PRODUCTS 
FEE.—In the case of any person that imports into the 
United States any carbon-intensive products, there shall 
be imposed a fee equal to the excess (if any) of— 
‘‘(1) an amount equal to— 
‘‘(A) production greenhouse gas emissions 
of such product, multiplied by 
‘‘(B) the carbon fee rate in effect for the 
year in which the production greenhouse gas 
emissions of such product were emitted into the 
atmosphere, over 
‘‘(2) the total foreign cost of carbon carried by 
such product. 
‘‘(e) 
REFUND
ON
EXPORTS
FROM
UNITED 
STATES.— 
‘‘(1) CARBON-INTENSIVE
PRODUCTS.—Under 
regulations prescribed by the Secretary, there shall 
be allowed a credit or refund (without interest) to 
exporters of carbon-intensive products manufactured 
or produced in the United States an amount equal 
to the excess (if any) of— 
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‘‘(A) an amount equal to— 
‘‘(i) the production greenhouse gas 
emissions of the exported carbon-intensive 
product, multiplied by 
‘‘(ii) the carbon fee rate during the 
year in which the carbon fee or fluorinated 
greenhouse gas fee was paid upon the pro-
duction greenhouse gas emissions of the 
exported carbon-intensive product, over 
‘‘(B) any total cost of carbon to be levied 
upon the carbon-intensive product by any juris-
diction to which the carbon-intensive product is 
to be imported. 
Any such credit or refund shall be allowed in the 
same manner as if it were an overpayment of the fee 
imposed by section 9902 or 9904. The Secretary 
shall establish fair, timely, impartial, and as nec-
essary confidential procedures by which any exporter 
of any product from the United States may petition 
the Secretary to include that exported product on 
the list of carbon-intensive products. 
‘‘(2) COVERED FUELS.—Under regulations pre-
scribed by the Secretary, in the case of a covered 
fuel produced in the United States with respect to 
which the fee under section 9902 was paid, there 
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shall be allowed as a credit or refund (without inter-
est) to any exporter of such covered fuels an amount 
equal to the excess (if any) of— 
‘‘(A) an amount equal to— 
‘‘(i) the full fuel cycle greenhouse gas 
emissions of the covered fuel, multiplied by 
‘‘(ii) the carbon fee rate at the time 
the carbon fee was paid upon the full fuel 
cycle greenhouse gas emissions of the ex-
ported covered fuel, over 
‘‘(B) any total cost of carbon to be levied 
upon the covered fuel by a jurisdiction to which 
the carbon-intensive product is to be imported. 
Any such credit or refund shall be allowed in the 
same manner as if it were an overpayment of tax 
imposed by section 9902. 
‘‘(f) DEFINITIONS.—For purposes of this section— 
‘‘(1) FOREIGN COST OF CARBON; FOREIGN CAR-
BON COSTS.—The term ‘foreign cost of carbon’ or 
‘foreign carbon cost’ means the cost of any laws of 
a foreign jurisdiction which impose a system of cap- 
and-trade with respect to, or a tax or fee on, green-
house gas. Such cost shall be determined and ex-
pressed as a price per ton of CO2-e. 
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‘‘(2) TOTAL COST OF CARBON CARRIED.—The 
term ‘total cost of carbon carried’ means an amount 
equal to— 
‘‘(A) the production greenhouse gas emis-
sions of a carbon-intensive product or the full 
fuel cycle greenhouse gas emissions of a covered 
fuel, multiplied by 
‘‘(B) the cost of carbon with respect to 
such product or fuel, reduced by any amount 
refunded with respect to such product or fuel 
by a foreign jurisdiction. 
The total cost of carbon carried shall be expressed 
as price in United States dollars. 
‘‘(3) TOTAL FOREIGN COST OF CARBON CAR-
RIED.—The term ‘total foreign cost of carbon car-
ried’ means an amount equal to— 
‘‘(A) the production greenhouse gas emis-
sions of a carbon-intensive product, or the full 
fuel cycle greenhouse gas emissions of a covered 
fuel, multiplied by 
‘‘(B) the foreign cost of carbon with re-
spect to such product or fuel, reduced by the 
amount refunded with respect to such product 
or fuel by a foreign jurisdiction. 
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The total foreign cost of carbon carried shall be ex-
pressed as price in United States dollars. 
‘‘SEC. 9909. ADMINISTRATION OF THE CARBON BORDER 
FEE ADJUSTMENT. 
‘‘(a) GENERALLY.—The Secretary in consultation 
with the Administrator shall prescribe regulations and 
guidance which implement the carbon border fee adjust-
ment under section 9908. 
‘‘(b) COLLABORATION.—In determining the produc-
tion greenhouse gas emissions of an imported carbon-in-
tensive product, the upstream greenhouse gas emissions 
of an imported covered fuel, the full fuel cycle greenhouse 
gas emissions of an imported covered fuel, or the foreign 
cost of carbon, or otherwise administering the carbon bor-
der fee adjustment, it is the sense of Congress that the 
Secretary should collaborate with authorized officers of 
any jurisdiction, including sub-national governments, af-
fected by the carbon border fee adjustment. 
‘‘(c) METHODOLOGY.—In determining the production 
greenhouse gas emissions of an imported carbon-intensive 
product, the upstream greenhouse gas emissions of an im-
ported covered fuel, the full fuel cycle greenhouse gas 
emissions of an imported covered fuel, or the foreign cost 
of carbon, the Secretary shall use reliable methodologies, 
which— 
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‘‘(1) as may be necessary or convenient— 
‘‘(A) distinguish between different types of 
covered fuels, 
‘‘(B) distinguish between a covered fuel’s 
greenhouse gas content and that covered fuel’s 
upstream greenhouse gas emissions, 
‘‘(C) distinguish between the different 
types of greenhouse gas emissions which com-
pose a covered fuel’s upstream greenhouse gas 
emissions or greenhouse gas content, as well as 
the various processes which produced those 
emissions, and 
‘‘(D) distinguish between the different 
types of greenhouse gas emissions which com-
pose a carbon-intensive product’s production 
greenhouse gas emissions, as well as the various 
processes which produced those emissions, 
‘‘(2) ensure that no covered fuel, covered 
fluorinated greenhouse gas, or carbon-intensive prod-
uct has the carbon fee, the fluorinated greenhouse 
gas fee, or the border fee adjustment imposed upon 
it more than once, 
‘‘(3) ensure that the implementation of the bor-
der carbon adjustment aligns with the carbon fee 
and the fluorinated gas fee, 
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‘‘(4) in the case of incomplete data, rely upon 
the best available methodologies for interpolating 
data gaps, and 
‘‘(5) are consistent with international treaties 
and agreements. 
‘‘(d) SCHEDULE.—The Secretary shall determine— 
‘‘(1) not later than 3 years after the date of the 
enactment of this section, the production greenhouse 
gas emissions of imported carbon-intensive products, 
‘‘(2) not later than 180 days after the date of 
the enactment of this section, the full fuel cycle 
greenhouse gas emissions and the upstream green-
house gas emissions of every imported covered fuel, 
and 
‘‘(3) not later than 3 years after the date of the 
enactment of this section, the foreign cost of carbon 
in all jurisdictions. 
‘‘(e) PROCEDURE.—The Secretary shall establish 
fair, timely, impartial, and as necessary confidential proce-
dures by which the importer of any carbon-intensive prod-
uct or any covered fuel may petition the Secretary to re-
vise the Secretary’s determination of the production green-
house gas emissions, full fuel cycle greenhouse gas emis-
sions, or upstream greenhouse gas emissions of that im-
porter’s imported covered fuel or imported carbon-inten-
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sive product, or the foreign cost of carbon carried by that 
importer’s imported carbon-intensive product. 
‘‘(f) SHIPMENTS FROM THE UNITED STATES TO THE 
TERRITORIES
OF
THE
UNITED
STATES.—Notwith-
standing any other treaty, law, or policy, shipments of cov-
ered fuels or carbon-intensive products from the United 
States to Guam, the United States Virgin Islands, Samoa, 
Puerto Rico, and the Northern Mariana Islands shall be 
eligible for a refund of the carbon fee under section 
9908(e). 
‘‘(g) IMPORTS TO THE TERRITORIES OF THE UNITED 
STATES.—Notwithstanding any other treaty, law, or pol-
icy, imports of covered fuels or carbon-intensive products 
to Guam, the United States Virgin Islands, Samoa, Puerto 
Rico, and the Northern Mariana Islands shall not be sub-
ject to Section 9908(c) or 9908(d).’’ 
‘‘SEC. 9910. ALLOCATION OF CARBON BORDER FEE ADJUST-
MENT REVENUES. 
‘‘The revenues collected under this chapter may be 
used to supplement appropriations made available in fiscal 
years 2018 and thereafter— 
‘‘(1) to U.S. Customs and Border Protection, in 
such amounts as are necessary to administer the 
carbon border fee adjustment, then 
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‘‘(2) to the Department of Treasury, in such 
amounts as are necessary to allow refunds under 
section 9908(e) to exporters of carbon-intensive 
products and exporters of covered fuels.’’. 
(b) COORDINATION WITH CARBON OXIDE SEQUES-
TRATION CREDIT.—Section 45Q(f) is amended by adding 
at the end the following new paragraph: 
‘‘(8) COORDINATION
WITH
CARBON
CAPTURE 
AND SEQUESTRATION PAYMENTS.—No credit shall 
be allowed under this section to a taxpayer which 
has received any payment under section 9906.’’. 
(c) TREATIES
AND
INTERNATIONAL
NEGOTIA-
TIONS.— 
(1) 
CONFORMANCE
WITH
INTERNATIONAL 
TREATIES.—In the case that the Appellate Body of 
the World Trade Organization, or any other authori-
tative international treaty interpreter, shall find any 
portion of the carbon border fee adjustment under 
chapter 102 of the Internal Revenue Code of 1986 
to violate any treaty to which the United States is 
a party, the Secretary of the Treasury is authorized 
to alter any aspect of such carbon border fee adjust-
ment so as to bring the carbon border fee adjust-
ment into conformance with international law. 
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(2) INTERNATIONAL NEGOTIATIONS.—The Con-
gress finds the international mitigation of green-
house gas emissions to be of national importance. 
Therefore, the Congress encourages the Secretary of 
State, or the Secretary’s designee, to commence and 
complete negotiations with other nations with the 
goal of forming treaties, environmental agreements, 
accords, partnerships or any other instrument that 
effectively reduces global greenhouse gas emissions 
to 10 percent of 2015 levels by 2050 and which re-
spect the principle of common but differentiated re-
sponsibilities and respective capabilities. 
(3) SUSPENSION OF THE CARBON BORDER FEE 
ADJUSTMENT.—Any part of the carbon border fee 
adjustment shall be suspended, in whole or in part— 
(A) by treaty or other international agree-
ment which includes provisions for the suspen-
sion of the carbon border fee adjustment, in 
whole or in part, with any party signatory to 
the treaty or other international agreement, or 
(B) by a finding of the Secretary that a ju-
risdiction of importation has implemented poli-
cies which, in the case of high emitting coun-
tries, reduce greenhouse gas emissions at a rate 
at least equivalent to United States greenhouse 
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gas emission reductions, or, in the case of low 
emitting countries, prevent the increase in 
greenhouse gas emissions. 
Any such finding shall be reviewed at least every 3 
years and amended or revoked as required. 
SEC. 4. ESTABLISHMENT OF THE CARBON DIVIDEND TRUST 
FUND. 
(a) IN GENERAL.—Subchapter A of chapter 98 of the 
Internal Revenue Code of 1986 is amended by adding at 
the end the following: 
‘‘SEC. 9512. CARBON DIVIDEND TRUST FUND. 
‘‘(a) ESTABLISHMENT
AND
FUNDING.—There is 
hereby established in the Treasury of the United States 
a trust fund to be known as the ‘Carbon Dividend Trust 
Fund’, consisting of such amounts as may be appropriated 
to such trust fund as provided for in this section. 
‘‘(b) TRANSFERS TO THE CARBON DIVIDEND TRUST 
FUND.—There is hereby appropriated to the Carbon Divi-
dend Trust Fund amounts equal to the fees received into 
the Treasury less any amounts refunded or paid under 
section 9902(d) or 9906 of chapter 101 for each month. 
‘‘(c) EXPENDITURES.—Amounts in the trust fund 
shall be available for the following purposes: 
‘‘(1) ADMINISTRATIVE EXPENSES.—So much of 
the expenses necessary to administer the Carbon 
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Dividend Trust Fund for each year, as does not ex-
ceed— 
‘‘(A) in the case of the first 5 calendar 
years ending after the date of the enactment of 
this section, the administrative expenses for any 
year may not exceed 8 percent of amounts ap-
propriated to the Carbon Dividend Trust Fund 
during such year, and 
‘‘(B) in the case of any calendar year 
thereafter, 2 percent of the 5-year rolling aver-
age of the amounts appropriated to the Carbon 
Dividend Trust Fund. 
‘‘(2) OTHER ADMINISTRATIVE EXPENSES.—So 
much of the expenses as are necessary to administer 
chapter 101 for any year as does not to exceed 0.60 
percent of the amounts appropriated to the Carbon 
Dividend Trust Fund for the previous year, and fur-
ther limited as follows: 
‘‘(A) The Department of the Treasury. 
‘‘(B) The Social Security Administration. 
‘‘(C) The Environmental Protection Agen-
cy. 
‘‘(D) Department of State. 
‘‘(3) CARBON DIVIDEND PAYMENTS.— 
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‘‘(A) IN GENERAL.—From the amounts in 
the Carbon Dividend Trust Fund made avail-
able under paragraphs (1) and (2) of this sub-
section for any year, the Secretary shall for 
each month beginning more than 270 days after 
the date of the enactment of the Energy Inno-
vation and Carbon Dividend Act of 2018, make 
carbon dividend payments to each eligible indi-
vidual. 
‘‘(B) PRO-RATA
SHARE.—A carbon divi-
dend payment is one pro-rata share for each 
adult and half a pro-rata share for each child 
under 19 years old of amounts available for the 
month in the Carbon Dividend Trust Fund. 
‘‘(C) ELIGIBLE
INDIVIDUAL.—The term 
‘eligible individual’ means, with respect to any 
month, any natural living person who has a 
valid Social Security number or taxpayer identi-
fication number and is a citizen or lawful resi-
dent of the United States (other than any indi-
vidual who is a citizen of any possession of the 
United States and whose bona fide residence is 
outside of the United States). The Secretary is 
authorized to verify an individual’s eligibility to 
receive a carbon dividend payment. 
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‘‘(D) FEE TREATMENT OF PAYMENTS.— 
Amounts paid under this subsection shall be in-
cludible in gross income. 
‘‘(E) FEDERAL PROGRAMS AND FEDERAL 
ASSISTED
PROGRAMS.—The carbon dividend 
amount received by any individual shall not be 
taken into account as income and shall not be 
taken into account as resources for purposes of 
determining the eligibility of such individual or 
any other individual for benefits or assistance, 
or the amount or extent of benefits or assist-
ance, under any Federal program or under any 
State or local program financed in whole or in 
part with Federal funds. 
‘‘(F) ADVANCE PAYMENT.—The Secretary 
shall transfer to the Carbon Dividend Trust 
Fund such amounts as are necessary for the 
disbursement of an advanced carbon dividend to 
all eligible individuals as follows: 
‘‘(i) An advanced carbon dividend 
shall be the same as the anticipated first 
carbon dividend required to be distributed 
under subparagraph (A) and shall be dis-
tributed the month prior to the first collec-
tion of the carbon fee. 
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‘‘(ii) Total amounts disbursed as ad-
vanced carbon dividends shall be deducted 
from the carbon dividends on a pro-rata 
basis over the first 3 years after the dis-
bursement of the first carbon dividends. 
‘‘(d) ADMINISTRATIVE AUTHORITY.—The Secretary 
shall promulgate rules, guidance, and regulations useful 
and necessary to implement the Carbon Dividend Trust 
Fund.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subchapter A of chapter 98 of such Code is amended 
by adding at the end the following new item: 
‘‘Sec. 9512. Carbon Dividend Trust Fund.’’. 
SEC. 5. LIMITED DISCLOSURE OF INFORMATION. 
Section 6103(l) of the Internal Revenue Code of 1986 
is amended by adding at the end the following new para-
graphs: 
‘‘(23) LIMITED DISCLOSURE OF IDENTITY IN-
FORMATION RELATING TO CARBON DIVIDEND PAY-
MENTS.— 
‘‘(A) DEPARTMENT OF TREASURY.—Indi-
vidual identity information shall, without writ-
ten request, be open to inspection by or disclo-
sure to officers and employees of the Depart-
ment of the Treasury whose official duties re-
quire such inspection or disclosure for purposes 
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of administering section 9512 (relating the Car-
bon Dividend Trust Fund). 
‘‘(B) COMMISSIONER
OF
SOCIAL
SECU-
RITY.—The Commissioner of Social Security 
shall, on written request, disclose to officers 
and employees of the Department of the Treas-
ury individual identity information which has 
been disclosed to the Social Security Adminis-
tration as is necessary to administer section 
9512. 
‘‘(C) RESTRICTION ON DISCLOSURE.—In-
formation disclosed under this paragraph shall 
be disclosed only for purposes of, and to the ex-
tent necessary in, carrying out section 9512.’’. 
SEC. 6. NATIONAL ACADEMY OF SCIENCES REVIEW OF CAR-
BON 
FEE 
AND 
EMISSIONS 
REDUCTION 
SCHEDULE. 
(a) IN GENERAL.—Not later than 10 years after the 
date of the enactment of this Act, the Secretary of Energy 
shall enter into an agreement with the National Academy 
of Sciences to prepare a report relating to the carbon fee 
imposed by section 9902 of the Internal Revenue Code of 
1986 and the emissions reductions schedule established 
under section 9903 of such Code. 
(b) REPORT REQUIREMENTS.—Such report shall— 
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(1) assess the efficiency and effectiveness of the 
carbon fee in achieving the emissions reduction tar-
gets set forth in section 9903 of such Code; 
(2) describe and make recommendations on 
whether the carbon fee rate and annual increases 
prescribed by section 9902(c) of such Code should 
be adjusted in order to optimize the efficiency and 
effectiveness of this Act in achieving the emissions 
reduction targets set forth in section 9903 of such 
Code; 
(3) describe the potential of the carbon fee to 
achieve future emissions targets set forth in section 
9903(a) of such Code through the year 2050; 
(4) describe and evaluate the effectiveness of 
the carbon fee in reducing emissions from key sec-
tors of the economy, including sectors of the econ-
omy that have decreased their carbon emissions, sec-
tors of the economy that have increased their carbon 
emissions, and sectors of the economy in which car-
bon emissions have not changed; 
(5) make findings and recommendations to 
Federal departments and agencies and to Congress 
on actions that could be taken to reduce carbon 
emissions in the sectors of the economy in which 
carbon emissions have not decreased; 
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‘‘(i) issue such regulations as the Ad-
ministrator deems necessary to bring 
greenhouse gas emissions from covered 
fuels subject to taxation under section 
9902 of the Internal Revenue Code of 
1986 to levels that are at or below the 
emission reductions targets in section 
9903(a)(2) of such Code; and 
‘‘(ii) 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 covered fuels subject to 
taxation under section 9902 of such Code 
have exceeded the targets in section 
9903(a)(2) of such Code. 
‘‘(2) DEADLINE
FOR
FINALIZING
REGULA-
TIONS.—The Administrator shall finalize any regula-
tions required by paragraph (1) not later than two 
years after the Administrator makes the relevant de-
termination pursuant to such paragraph. 
‘‘(3) ACHIEVEMENT
OF
ADDITIONAL
REDUC-
TIONS.—Regulations issued pursuant to paragraph 
(1) shall ensure that any additional reductions re-
quired by paragraph (1)(B)(ii) are fully achieved by 
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