I 
116TH CONGRESS 
1ST SESSION H. R. 5457 
To amend the Internal Revenue Code of 1986 to impose an excise tax 
on fuel based on the carbon content of such fuel, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 17, 2019 
Mr. SEAN PATRICK MALONEY of New York 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 impose 
an excise tax on fuel based on the carbon content of 
such fuel, and for other purposes. 
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 ‘‘Carbon Reduction and 
Tax Credit Act’’. 
SEC. 2. EXCISE TAX ON CARBON CONTENT OF FUELS. 
(a) IN GENERAL.—Chapter 38 of the Internal Rev-
enue Code of 1986 is amended by adding at the end there-
of the following new subchapter: 
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‘‘Subchapter E—Carbon Content Fee 
‘‘Sec. 4691. Carbon content. 
‘‘SEC. 4691. CARBON CONTENT. 
‘‘(a) IN GENERAL.—In the case of a coal mine or an 
oil or gas well, there is hereby imposed a tax equal to $40 
per ton of carbon contained in fuel produced— 
‘‘(1) at such mine or well located in the United 
States, or 
‘‘(2) entered into the United States for con-
sumption, use, or warehousing. 
‘‘(b) ADJUSTMENT FOR YEARS AFTER 2020.— 
‘‘(1) IN GENERAL.—In the case of any calendar 
year after 2020, the amount under subsection (a) 
shall be increased by an amount equal to— 
‘‘(A) such amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for such calendar 
year, determined— 
‘‘(i) by substituting ‘calendar year 
2019’ for ‘calendar year 2016’ in subpara-
graph (A)(ii) thereof, and 
‘‘(ii) by substituting for the C–CPI–U 
referred to in section 1(f)(3)(A) the 
amount that such CPI would have been if 
the annual percentage increase in CPI with 
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respect to each year after 2019 had been 
one percentage point greater. 
‘‘(2) TERMS RELATED TO CPI.— 
‘‘(A) ANNUAL PERCENTAGE INCREASE.— 
For purposes of subparagraph (B)(ii)(II), the 
term ‘annual percentage increase’ means the 
percentage (if any) by which C–CPI–U for any 
year exceeds the C–CPI–U for the prior year. 
‘‘(B) OTHER TERMS.—Terms used in this 
paragraph which are also used in section 
1(f)(3) shall have the same meanings as when 
used in such section. 
‘‘(3) ROUNDING.—Any increase determined 
under subparagraph (B) shall be rounded to the 
nearest multiple of $50.’’. 
(b) CLERICAL AMENDMENT.—The table of sub-
chapters for chapter 38 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
item: 
‘‘SUBCHAPTER E—CARBON CONTENT FEE’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to fuel produced after December 
31, 2019. 
SEC. 3. CREDIT. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
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1986 (relating to refundable credits) is amended by insert-
ing after section 36B the following new section: 
‘‘SEC. 36C. CREDIT FOR TAXPAYERS. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year with respect to each taxpayer who is 
an individual and each dependent of the taxpayer an 
amount equal to $1,000. 
‘‘(b) LIMITATION BASED ON ADJUSTED GROSS IN-
COME.—The amount of the credit allowable under sub-
section (a) shall be reduced (but not below zero) by $100 
for each $1,000 (or fraction thereof) by which the tax-
payer’s 
adjusted 
gross 
income 
exceeds 
$314,000 
($157,000 in the case of a return other than a joint re-
turn). 
‘‘(c) INFLATION ADJUSTMENT.—In the case of a tax-
able year beginning after 2020, the dollar amounts in sub-
sections (a) and (b) shall be increased by an amount equal 
to— 
‘‘(1) such dollar amount, multiplied by 
‘‘(2) the cost-of-living adjustment determined 
under section 1(f)(3) for the calendar year in which 
the taxable year begins, determined by substituting 
‘2019’ for ‘2016’ in subparagraph (A)(ii) thereof. 
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If any increase under this clause is not a multiple of $50, 
such increase shall be rounded to the next lowest multiple 
of $50. 
‘‘(d) NONRESIDENT ALIEN INELIGIBLE FOR CRED-
IT.—No credit shall be allowed under this section to any 
nonresident alien.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 6211(b)(4)(A) of such Code is 
amended by inserting ‘‘36C,’’ after ‘‘36B,’’. 
(2) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting 
‘‘36C,’’ after ‘‘36B,’’. 
(3) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by inserting after the 
item relating to section 36C the following new item: 
‘‘Sec. 36C. Credit for taxpayers.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2019. 
Æ 
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