I 
112TH CONGRESS 
1ST SESSION H. R. 3242 
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 
OCTOBER 24, 2011 
Mr. STARK (for himself, Mr. GRIJALVA, Mr. MORAN, Mr. FILNER, Mr. BLU-
MENAUER, Mr. HONDA, Mr. MCDERMOTT, Mr. HOLT, and Mr. HASTINGS 
of Florida) introduced the following bill; which was referred to the Com-
mittee 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 2011’’. 
SEC. 2. FINDINGS. 
The Congress finds as follows: 
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(1) The Intergovernmental Panel on Climate 
Change (IPCC) has concluded that human emissions 
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 Fahr-
enheit in the next 100 years if carbon dioxide emis-
sions are not dramatically reduced. 
(3) An increase of even a few degrees could 
have major adverse impacts on both the natural 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 
18 percent of the world’s annual carbon dioxide 
emissions, equaling approximately 5.5 billion metric 
tons of carbon 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 needs to be 
reduced 80 percent below 1990 levels by 2050. 
(6) A tax on the carbon content of fossil fuels 
will create incentives for investment and develop-
ment of low and zero carbon alternatives, thereby re-
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ducing carbon dioxide emissions and while gener-
ating funds to reduce our deficits. 
(7) Revenue from a carbon tax can reduce the 
deficit. Dedicating the revenue from a $10 per ton 
of carbon dioxide tax could reduce the deficit by 
more than $480 billion over ten years. 
(8) In order to protect consumers from higher 
energy prices, all carbon tax revenue not targeted 
for deficit reduction shall be returned to individuals 
through a dividend distributed on an annual basis. 
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.— 
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‘‘(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 dioxide 
produced by combustion in such fuel, as determined 
by the Secretary in consultation with the Secretary 
of Energy. 
‘‘(2) ANNUAL INCREASE IN AMOUNT OF TAX.— 
For each calendar year beginning after 2011 which 
is not the year after a target attainment year, para-
graph (1) shall be applied by substituting for ‘$10’ 
the following: ‘the amount in effect under this para-
graph for the preceding calendar year, increased by 
$10’. 
‘‘(3) RATE
FREEZE
AFTER
TARGET
ATTAIN-
MENT.—For each calendar year after a target at-
tainment year, the amount in effect under para-
graph (1) shall be the amount in effect under para-
graph (1) for the preceding calendar year. 
‘‘(4) TARGET
ATTAINMENT
YEAR.—For pur-
poses of paragraph (2), a calendar year is a 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 
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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)), 
‘‘(3) natural gas, and 
‘‘(4) biomass, municipal solid waste, and any 
organic material other than coal, petroleum, and 
natural gas that is sold for the purpose of energy 
production, as determined by the Secretary of En-
ergy, 
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. 
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‘‘(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-
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.— 
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‘‘(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— 
‘‘(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, 
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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 
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, 
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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, 
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 
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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. 
‘‘(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-
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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 
‘‘(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 
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‘‘(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. 
‘‘(i) BORDER ADJUSTMENTS.— 
‘‘(1) IN GENERAL.—The Secretary shall make 
harmonization adjustments on the importation of 
any product. 
‘‘(2) FEE.—In the case that taxes paid by man-
ufacturers and producers under this section with re-
spect to comparable products exceeds the sum of any 
similar carbon content tax imposed by a foreign 
country on the imported product, plus the amount 
imposed under subsection (a), the adjustment under 
subsection (a) shall be the imposition of a fee in the 
amount the Secretary determines is equal to such 
excess. Such fee shall be treated as a tax for pur-
poses of subtitle F. 
‘‘(3) CREDIT OR REFUND.—In the case that 
any similar carbon content tax imposed by a foreign 
country on the imported product exceeds the taxes 
paid by manufacturers and producers under this sec-
tion with respect to comparable products, the adjust-
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ment under subsection (a) shall be a credit or refund 
(without interest) in the amount the Secretary deter-
mines is equal to such excess. Such credit or refund 
shall be allowed in the same manner as if it were an 
overpayment of tax. 
‘‘(4) REGULATIONS.—The Secretary shall issue 
such regulations as may be necessary to carry out 
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 and the Administrator of the Envi-
ronmental Protection Agency, shall conduct a study on the 
environmental, economic, and revenue impacts, and the 
carbon dioxide emissions in the United States, regarding 
the tax imposed by subchapter E of chapter 38 of the In-
ternal Revenue Code of 1986 (relating to carbon tax on 
primary fossil fuels). The Secretary shall submit each 
study to the Committee on Ways and Means of the House 
of Representatives 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.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to sales after December 31, 2011. 
SEC. 4. HEALTHY CLIMATE TRUST FUND. 
(a) 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: 
‘‘SEC. 9512. HEALTHY CLIMATE TRUST FUND. 
‘‘(a) ESTABLISHMENT.—There is established in the 
Treasury of the United States a trust fund to be known 
as the ‘Healthy Climate Trust Fund’, consisting of such 
amounts as may be appropriated to such trust fund as 
provided for in this section. 
‘‘(b) TRANSFERS.—There are appropriated to the 
Healthy Climate Trust Fund— 
‘‘(1) for calendar year 2012, amounts equiva-
lent to the taxes received under section 6691, and 
‘‘(2) for any calendar year after 2012, amounts 
equivalent to the taxes received under section 6691 
that are attributable to the excess of— 
‘‘(A) the rate of tax in effect under such 
section for the calendar year, over 
‘‘(B) $10. 
‘‘(c) EXPENDITURES.— 
‘‘(1) 
ADMINISTRATIVE
EXPENSES.—Such 
amounts as may be necessary from the Healthy Cli-
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mate Trust Fund shall be available to pay the ad-
ministrative expenses necessary to carry out this sec-
tion for each year, but not exceeding 0.50 percent of 
the amounts appropriated to such trust fund under 
subsection (b) in such year. 
‘‘(2) 
CONSUMER
DIVIDEND
PAYMENTS.— 
Amounts in the Healthy Climate Trust Fund not 
used under paragraph (1) for any year shall be 
available for making consumer dividend payments 
under subsection (d) before February 15 of the fol-
lowing year. 
‘‘(d) PAYMENT OF CONSUMER DIVIDEND.— 
‘‘(1) IN GENERAL.—From amounts made avail-
able under subsection (c)(2), the Secretary shall 
make annual consumer dividend payments to each 
individual who is an eligible individual for that year. 
‘‘(2) CONSUMER
DIVIDEND
PAYMENT.—The 
term ‘consumer dividend payment’ means the indi-
vidual pro-rata share, as determined by the Sec-
retary, of amounts available for the year in the 
Healthy Climate Trust Fund under subsection 
(c)(2). 
‘‘(3) ELIGIBLE INDIVIDUAL.—The term ‘eligible 
individual’ means, with respect to any year, any in-
dividual with a TIN (other than a nonresident alien 
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individual) who is lawfully present in the United 
States for such month, as determined and verified 
by the Secretary in consultation with any other Fed-
eral entity the Secretary determines appropriate. 
‘‘(4) 
TAX
TREATMENT
OF
PAYMENTS.— 
Amounts paid under this subsection shall be includ-
ible in gross income. 
‘‘(e) REPORT TO CONGRESS.—Not later than June 
1, 2013, and at least annually thereafter, the Secretary 
shall transmit to Congress a report accounting for the dis-
position of amounts in the Healthy Climate Trust Fund 
in the previous calendar year. 
‘‘(f) HEALTHY CLIMATE TRUST FUND WEBSITE.— 
Not later than 90 days after the date of the enactment 
of this section, the Secretary shall establish and maintain 
a website to provide the public with information on the 
disposition of any amounts in the Healthy Climate Trust 
Fund. 
‘‘(g) REGULATIONS.—The Secretary shall prescribe 
such regulations and other guidance as may be necessary 
or appropriate to carry out this section.’’. 
(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. Healthy Climate Trust Fund.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1, 2011. 
SEC. 5. DISCLOSURE OF INFORMATION. 
(a) LIMITED DISCLOSURE OF IDENTITY.—Subsection 
(l) of section 6103 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new para-
graph: 
‘‘(22) LIMITED DISCLOSURE OF IDENTITY IN-
FORMATION
RELATING
TO
CONSUMER
DIVIDEND 
PAYMENTS.— 
‘‘(A) DEPARTMENT OF THE TREASURY.— 
Individual identity information shall, without 
written request, be open to inspection by or dis-
closure to officers and employees of the Depart-
ment of the Treasury whose official duties re-
quire such inspection or disclosure for purposes 
of section 9512(d). 
‘‘(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 provided by paragraph (1) or (5). 
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‘‘(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(d).’’. 
(b) 
CONFORMING
AMENDMENTS.—Section 
6103(p)(3)(A) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘or (21)’’ and inserting ‘‘, (21), or 
(22)’’. 
SEC. 6. EFFECTIVE DATE. 
The amendments made by this Act shall take effect 
on the date of the enactment of this Act. 
Æ 
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