I 
116TH CONGRESS 
1ST SESSION H. R. 4058 
To amend the Internal Revenue Code of 1986 to impose a tax on greenhouse 
gas emissions, accordingly reduce tax rates on payroll, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 25, 2019 
Mr. ROONEY of Florida (for himself and Mr. LIPINSKI) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means, 
and in addition to the Committees on Energy and Commerce, and 
Science, Space, and Technology, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to impose 
a tax on greenhouse gas emissions, accordingly reduce 
tax rates on payroll, 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; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Stemming Warming and Augmenting Pay Act of 2019’’ 
or the ‘‘SWAP Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
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Sec. 1. Short title; table of contents. 
Sec. 2. Findings. 
TITLE I—GREENHOUSE GAS EMISSIONS 
Sec. 101. Treatment of greenhouse gas emissions. 
TITLE II—CARBON REDUCED PAYROLL TAX 
Sec. 201. Carbon reduced payroll tax. 
TITLE III—DISTRIBUTION OF REVENUES FROM TAXATION OF 
GREENHOUSE GAS EMISSIONS 
Sec. 301. Establishment of the Carbon Trust Fund. 
Sec. 302. Appropriations from the Carbon Trust Fund. 
TITLE IV—AMENDMENTS TO FEDERAL ENVIRONMENTAL 
STATUTES 
Sec. 401. Amendments to the Clean Air Act. 
SEC. 2. FINDINGS. 
The Congress finds the following: 
(1) Climate change threatens global stability 
and our national economy. 
(2) Carbon emissions are a significant contrib-
utor to these threats and must be addressed. 
(3) The United States private sector can face 
these challenges and be a global leader in tech-
nology, innovation, and efficiency. 
(4) A price on carbon levels the economic play-
ing field and spurs adoption of less carbon-intensive 
practices and technologies. 
(5) Recycling revenues back to employers and 
employees will neutralize the potential impacts of a 
tax. 
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TITLE I—GREENHOUSE GAS 
EMISSIONS 
SEC. 101. TREATMENT OF GREENHOUSE GAS EMISSIONS. 
(a) IN GENERAL.—The Internal Revenue Code of 
1986 is amended by adding at the end the following: 
‘‘Subtitle L—Greenhouse Gas 
Emissions 
‘‘PART 1. TAXATION OF GREENHOUSE GAS EMISSIONS 
‘‘PART 2. TAX ADJUSTMENTS FOR IMPORTS AND EXPORTS OF GREENHOUSE 
GAS INTENSIVE PRODUCTS 
‘‘PART 1—TAXATION OF GREENHOUSE GAS 
EMISSIONS 
‘‘Sec. 9901. Imposition of tax on combusted fossil fuel greenhouse gas emis-
sions. 
‘‘Sec. 9902. Imposition of tax on greenhouse gas emissions from certain indus-
trial processes. 
‘‘Sec. 9903. Imposition of tax on greenhouse gas emissions from certain prod-
uct uses. 
‘‘Sec. 9904. Calculation of taxable emissions. 
‘‘Sec. 9905. Credit for State payments. 
‘‘Sec. 9906. Penalties for nonpayment. 
‘‘Sec. 9907. Definitions. 
‘‘SEC. 9901. IMPOSITION OF TAX ON COMBUSTED FOSSIL 
FUEL GREENHOUSE GAS EMISSIONS. 
‘‘(a) IN GENERAL.—There is hereby imposed a tax 
on fossil fuels produced within, or imported into, the 
United States. 
‘‘(b) RATE OF TAX.— 
‘‘(1) GREENHOUSE GASES THAT WOULD BE RE-
LEASED IF THE FOSSIL FUEL WERE COMBUSTED.— 
The tax imposed by subsection (a) shall be the appli-
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previous calendar year is the average of the 
Consumer Price Index for all-urban consumers 
published by the Department of Labor as of the 
close of the 12-month period ending on August 
31 of such calendar year. For purposes of the 
preceding sentence, the revision of the Con-
sumer Price Index which is most consistent 
with the Consumer Price Index for calendar 
year 1986 shall be used. 
‘‘(3) ADJUSTMENT BASED ON EMISSION LEV-
ELS.— 
‘‘(A) IN GENERAL.—If, for calendar year 
2023 and every second calendar year thereafter 
through calendar year 2031, the cumulative 
amount of emissions with respect to the cal-
endar year reported under subparagraph (B) 
exceeds the cumulative amount of emissions 
specified for such calendar year in subpara-
graph (C), then the increase required by this 
paragraph for the calendar year beginning on 
the next January 1 following the determination 
in subparagraph (B) shall be $3 per metric ton. 
‘‘(B) ANNUAL
REPORT.—Not later than 
March 30, 2021, and annually thereafter, the 
Secretary and the Administrator shall jointly 
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determine and report the emissions during the 
calendar year ending on the preceding Decem-
ber 31 from sources subject to taxation under 
this part. The report shall specify whether the 
cumulative amount of annual emissions re-
ported for the period beginning in calendar year 
2021 and ending at the end of the preceding 
calendar year exceeds the emission levels speci-
fied in subparagraph (C). 
‘‘(C) EMISSION SCHEDULE.—The emission 
schedule specified in this subparagraph is as 
follows: 
‘‘(i) The total emissions through cal-
endar year 2021 are 5,000 million metric 
tons of carbon dioxide equivalent. 
‘‘(ii) The total emissions through cal-
endar year 2022 are 9,800 million metric 
tons of carbon dioxide equivalent. 
‘‘(iii) The total emissions through cal-
endar year 2023 are 14,600 million metric 
tons of carbon dioxide equivalent. 
‘‘(iv) The total emissions through cal-
endar year 2024 are 19,200 million metric 
tons of carbon dioxide equivalent. 
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‘‘(v) The total emissions through cal-
endar year 2025 are 23,800 million metric 
tons of carbon dioxide equivalent. 
‘‘(vi) The total emissions through cal-
endar year 2026 are 28,300 million metric 
tons of carbon dioxide equivalent. 
‘‘(vii) The total emissions through cal-
endar year 2027 are 32,700 million metric 
tons of carbon dioxide equivalent. 
‘‘(viii) The total emissions through 
calendar year 2028 are 37,000 million 
metric tons of carbon dioxide equivalent. 
‘‘(ix) The total emissions through cal-
endar year 2029 are 41,300 million metric 
tons of carbon dioxide equivalent. 
‘‘(x) The total emissions through cal-
endar year 2030 are 45,500 million metric 
tons of carbon dioxide equivalent. 
‘‘(xi) The total emissions through cal-
endar year 2031 are 49,700 million metric 
tons of carbon dioxide equivalent. 
‘‘(c) BY WHOM PAID.—The tax imposed by sub-
section (a) shall be paid by the owner of the fossil fuel 
at the point of taxation. 
‘‘(d) POINT OF TAXATION.— 
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‘‘(1) For fossil fuels produced within the United 
States, the point of taxation shall be— 
‘‘(A) for coal, the mine mouth or, for 
washed coal, the exit from the coal preparation 
and processing plant, 
‘‘(B) for petroleum products, the exit point 
from the refinery, and 
‘‘(C) for natural gas, the exit from the gas 
processing plant or, for natural gas that is not 
treated at a gas processing plant, the point of 
sale to the person who combusts the gas or in-
corporates it into a product that is not intended 
for combustion. 
‘‘(2) For any fossil fuel imported into the 
United States, the point of taxation shall be the 
point at which it first enters the United States. 
‘‘(e) EXEMPTIONS.— 
‘‘(1) 
EXEMPTION
FOR
NONCOMBUSTIVE 
USES.— 
‘‘(A) REFUND FOR REDUCTION OR ELIMI-
NATION OF EMISSIONS.—Any manufacturer of a 
product that incorporates a fossil fuel that has 
been taxed under this section who can dem-
onstrate to the Secretary that the fossil fuel has 
been transformed via the manufacture of the 
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product so that the fossil fuel’s emissions will 
be reduced or eliminated over the product’s life-
time shall be entitled to a refund of the tax 
paid under this section on the proportion of the 
emissions reduced thereby, as determined by 
the Secretary. 
‘‘(B) RULE.—The Secretary, in consulta-
tion with the Administrator, shall establish by 
rule the criteria and process by which product 
manufacturers can demonstrate that the condi-
tions in subparagraph (A) have been satisfied. 
‘‘(C) PUBLICATION
OF
REGULATIONS.— 
The Secretary shall publish the regulations re-
quired by this subsection no later than one year 
prior to the start of the calendar year referred 
to in section 9901(b)(2)(A). The Secretary may 
not collect the tax imposed by this section for 
any calendar year that begins less than one 
year after the regulations are published. 
‘‘(2) EXEMPTION FOR CARBON CAPTURE AND 
STORAGE.— 
‘‘(A) REFUND
FOR
SEQUESTERS.—Any 
person who sequesters greenhouse gas emissions 
resulting from the combustion of fossil fuel that 
has passed through a point of taxation shall be 
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entitled to a refund of the tax imposed by this 
section. Emissions that are used for enhanced 
oil recovery shall be entitled for such refund 
provided that these emissions meet all of the 
criteria applicable to other emissions that qual-
ify for such refund. No refund shall be recog-
nized for any amount of greenhouse gas which 
has been credited under section 45Q. 
‘‘(B) RULE.—The Secretary shall establish 
by rule the procedures by which to apply for 
such refunds and such refunds shall be paid 
within six months of the Secretary receiving an 
approvable application. 
‘‘(C) TIME
OF
REFUND.—The Secretary 
may not refund any amounts under this para-
graph until such time as the Secretary has pub-
lished the regulations described in section 
45Q(d)(2). 
‘‘(3) REPORT
TO
CONGRESS.—The Secretary 
shall, by January 1st of each calendar year, report 
the total amount of refunds awarded in the previous 
fiscal year under this subsection and shall include, 
as appropriate, the amounts refunded under para-
graphs (1) and (2). 
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‘‘SEC. 9902. IMPOSITION OF TAX ON GREENHOUSE GAS 
EMISSIONS 
FROM 
CERTAIN 
INDUSTRIAL 
PROCESSES. 
‘‘(a) IN GENERAL.—There is hereby imposed a tax 
on industrial process greenhouse gas emissions by certain 
source categories. 
‘‘(b) LIST OF SOURCE CATEGORIES.— 
‘‘(1) INITIAL LIST.—The Congress establishes 
for purposes of this section a list of source cat-
egories subject to this section as follows: 
‘‘(A) Iron and steel production and met-
allurgical coke production. 
‘‘(B) Underground coal mining. 
‘‘(C) Coal preparation and processing 
plants. 
‘‘(D) Refineries. 
‘‘(E) Cement production. 
‘‘(F) Petrochemical production. 
‘‘(G) Lime production. 
‘‘(H) Ammonia production. 
‘‘(I) Aluminum production. 
‘‘(J) Soda ash production. 
‘‘(K) Ferroalloy production. 
‘‘(L) Phosphoric acid production. 
‘‘(M) Glass production. 
‘‘(N) Zinc production. 
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‘‘(O) Lead production. 
‘‘(P) Magnesium production and proc-
essing. 
‘‘(Q) Nitric acid production. 
‘‘(R) Adipic acid production. 
‘‘(S) Semiconductor manufacture. 
‘‘(T) Electrical transmission and distribu-
tion. 
‘‘(2) REVISION OF THE LIST.—The Adminis-
trator shall review the list of source categories estab-
lished by this subsection not less than once every 
five years to determine if they should continue to be 
listed and publish the results of that review. The Ad-
ministrator may, if appropriate, add any source cat-
egories to this list by rule. 
‘‘(3) REMOVAL OF A SOURCE CATEGORY FROM 
THE LIST.—The Administrator may remove a source 
category from this list only if— 
‘‘(A) the total emissions from the entire 
source category which are taxable under this 
section have been less than 250,000 metric tons 
of carbon dioxide equivalent per year for each 
of three consecutive years, 
‘‘(B) the average emissions from facilities 
in the source category which are taxable under 
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this section have been less than 25,000 metric 
tons of carbon dioxide equivalent per year for 
each of the years referred in subparagraph (A), 
and 
‘‘(C) the Administrator determines that 
there is no reasonable possibility that the total 
emissions from the entire source category which 
are taxable under this section will exceed 
250,000 metric tons per year of carbon dioxide 
equivalent within any of the five years following 
such determination. 
‘‘(4) ADDITION
OF
A
SOURCE
CATEGORY
TO 
THE LIST.—The Administrator may add a source 
category to this list only if the Administrator deter-
mines that— 
‘‘(A) the total emissions from the entire 
source category which are taxable under this 
section have been greater than 250,000 metric 
tons per year of carbon dioxide equivalent in 
any two years out of the preceding five years, 
‘‘(B) the average emissions from facilities 
in the source category which are taxable under 
this section have been greater than 25,000 met-
ric tons per year of carbon dioxide equivalent in 
the years in which emissions from the entire 
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source category have been greater than 250,000 
tons per year, and 
‘‘(C) there is a reasonable possibility that 
the total emissions from the entire source cat-
egory which are taxable under this section will 
be greater than 250,000 metric tons per year of 
carbon dioxide equivalent in any year within the 
next five years following such determination. 
‘‘(5) The Administrator may add a source cat-
egory to the list that has previously been removed 
pursuant to paragraph (3) if the addition of the 
source category otherwise meets the requirements 
per paragraph (4). 
‘‘(c) RATE OF TAX.—The rate of tax shall be the 
same as the rate given in section 9901(b)(2). 
‘‘(d) BY WHOM PAID.—The tax imposed by sub-
section (a) shall be paid by the owner or operator of the 
point of taxation. 
‘‘(e) POINT OF TAXATION.—The point of taxation 
shall be any facility in a source category which emits more 
than 25,000 metric tons of carbon dioxide equivalent sub-
ject to taxation under this section in any calendar year. 
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‘‘SEC. 9903. IMPOSITION OF TAX ON GREENHOUSE GAS 
EMISSIONS FROM CERTAIN PRODUCT USES. 
‘‘(a) IN GENERAL.—There is hereby imposed a tax 
on non-fossil-fuel-greenhouse-gas emissions by certain 
manufactured products when used for their intended pur-
poses that are manufactured within or imported into, the 
United States. 
‘‘(b) LIST OF PRODUCTS.— 
‘‘(1) INITIAL LIST.—The Congress establishes 
for purposes of this section a list of products subject 
to this section as follows: 
‘‘(A) Fuel ethanol. 
‘‘(B) Industrial carbonates. 
‘‘(C) Carbon dioxide urea. 
‘‘(D) Soda ash. 
‘‘(E) Nitrous oxide. 
‘‘(F) Ozone depleting substances, but not 
if the United States has ratified the Kigali 
Amendment to the Montreal Protocol and is 
subject to Article 2J, paragraph 1 of the 
Amended Montreal Protocol. 
‘‘(G) Biodiesel. 
‘‘(H) Solid biomass fuels. 
‘‘(2) REVISION OF THE LIST.—The Adminis-
trator shall review the list of products established by 
this subsection not less than once every five years to 
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determine if they should continue to be listed and 
publish the results of that review. The Administrator 
may, if appropriate, add any product to this list by 
rule. 
‘‘(3) REMOVAL
OF
A
PRODUCT
FROM
THE 
LIST.—The Administrator may remove a product 
from this list only if— 
‘‘(A) the total emissions from all of the 
product used within the United States has been 
less than 250,000 metric tons per year of car-
bon dioxide equivalent for each of three con-
secutive years, and 
‘‘(B) the Administrator determines that 
there is no reasonable possibility that the total 
emissions from all of the product used in the 
United States will exceed 250,000 metric tons 
per year of carbon dioxide equivalent within any 
of the five years following such determination. 
‘‘(4) ADDITION OF A PRODUCT TO THE LIST.— 
The Administrator may add a product to this list 
only if the Administrator determines that— 
‘‘(A) the total emissions from all of the 
product used within the United States has been 
greater than 250,000 metric tons per year of 
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carbon dioxide equivalent in any two years out 
of the preceding five years, and 
‘‘(B) there is a reasonable possibility that 
the total emissions from all of the product used 
within the United States will be greater than 
250,000 metric tons per year of carbon dioxide 
equivalent in any year within the next five years 
following such determination. 
‘‘(5) The Secretary may add a product to the 
list that has previously been removed pursuant to 
paragraph (3) if the addition of the product other-
wise meets the requirements of paragraph (4). 
‘‘(c) RATE OF TAX.—The rate of tax shall be the 
same as the rate given in section 9901(b)(2). 
‘‘(d) BY WHOM PAID.—The tax imposed by sub-
section (a) shall be paid— 
‘‘(1) for products manufactured in the United 
States, by the owner or operator of the point of tax-
ation, and 
‘‘(2) for products imported into the United 
States, by the owner of the product when it enters 
the United States. 
‘‘(e) POINT OF TAXATION.—The point of taxation 
shall be— 
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‘‘(1) for products manufactured in the United 
States, the manufacturing facility, 
‘‘(2) for products imported into the United 
States, the point at which it first enters the United 
States, and 
‘‘(3) for domestically produced biomass fuel, 
any facility that emits from combusted biomass fuel 
more than 25,000 metric tons of carbon dioxide 
equivalent greenhouse gases in a year. 
‘‘SEC. 9904. CALCULATION OF TAXABLE EMISSIONS. 
‘‘(a) HOW TO CALCULATE TAXABLE EMISSIONS.— 
In consultation with the Department of Energy, the Ad-
ministrator shall establish by rule (and may, from time 
to time, revise) the method by which taxable emissions 
under this part shall be calculated. 
‘‘(b) CATEGORIES
AND SUBCATEGORIES CONSID-
ERED.—For purposes of calculating emissions taxable 
under— 
‘‘(1) section 9901, the Administrator shall de-
termine by rule the amount of carbon dioxide equiv-
alent that would be emitted if each fossil fuel were 
combusted, and the Administrator may establish by 
rule such subcategories of each fuel and the means 
by which it is combusted as the Administrator deems 
appropriate, 
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‘‘(2) section 9902, the Administrator may de-
termine by rule such subcategories of any industrial 
process category listed in subsection 9902(b) as the 
Administrator deems appropriate, and 
‘‘(3) section 9903, for fuel ethanol, biodiesel, 
and solid biomass fuels the Administrator shall de-
termine by rule the amount of carbon dioxide equiv-
alent that would be emitted based on the lifecycle 
greenhouse gas emissions of the product, and the 
Administrator may determine by rule such subcat-
egories of manufactured products listed in sub-
section 9903(b) as the Administrator deems appro-
priate. 
‘‘(c) METHODS.—Where greenhouse gas emissions 
subject to taxation under any section of this part are com-
bined with greenhouse gas emissions subject to taxation 
under any other section of this part, the Administrator 
shall ensure, to the greatest degree possible, that the 
methods required to determine the emissions taxable 
under any section of this part do not include any emissions 
taxable under any other section of this part. 
‘‘(d) METHOD COST DIFFERENCES.—The Adminis-
trator shall not require the use of any method to calculate 
taxable emissions whereby the difference in cost of the 
method compared to the next cheapest alternative method 
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is greater than the amount of the tax that would be paid 
on the additional emissions determined by the more expen-
sive method. 
‘‘(e) PUBLICATION OF REGULATIONS.—The Adminis-
trator shall publish the regulations required by this section 
no later than January 1, 2020. The Secretary may not 
collect the tax imposed by any section in this part for any 
calendar year that begins less than one year after the reg-
ulations applicable to each such section are published. 
‘‘SEC. 9905. CREDIT FOR STATE PAYMENTS. 
‘‘(a) CREDIT FOR PAYMENTS.—The Secretary shall 
allow any person who is required to make payment for 
greenhouse gas emissions under this part a credit for pay-
ments made on those emissions required under any State 
law in the following manner: 
‘‘(1) 
For 
the 
year 
given 
in 
section 
9901(b)(2)(A), a credit equal to 100 percent of the 
amount paid pursuant to requirements of State law. 
‘‘(2) For the first year following the year used 
in paragraph (1), a credit equal to 80 percent of the 
amount paid pursuant to requirements of State law. 
‘‘(3) For the second year following the year 
used in paragraph (1), a credit equal to 60 percent 
of the amount paid pursuant to requirements of 
State law. 
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‘‘(4) For the third year following the year used 
in paragraph (1), a credit equal to 40 percent of the 
amount paid pursuant to requirements of State law. 
‘‘(5) For the fourth year following the year 
used in paragraph (1), a credit equal to 20 percent 
of the amount paid pursuant to requirements of 
State law. 
‘‘(b) NO CREDIT.—For all years following the year 
used in paragraph (5), no credit shall be allowed. 
‘‘SEC. 9906. PENALTIES FOR NONPAYMENT. 
‘‘Any person who fails to comply with the require-
ments of section 9901, 9902, or 9903 shall be liable for 
payment to the Secretary, without demand, of a penalty 
in the amount equal to 3 times the applicable amount 
specified by those sections for the same tax year as the 
year in which the person failed to comply with such re-
quirements. 
‘‘SEC. 9907. DEFINITIONS. 
‘‘Unless otherwise provided, the definitions provided 
herein are applicable to all provisions of this subtitle. 
‘‘(1) ADMINISTRATOR.—The term ‘Adminis-
trator’ means the Administrator of the Environ-
mental Protection Agency. 
‘‘(2) 
CARBON
DIOXIDE
EQUIVALENT.—The 
term ‘carbon dioxide equivalent’ means the number 
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of metric tons of CO2 emissions with the same glob-
al warming potential over a 100-year period as one 
metric ton of another greenhouse gas. 
‘‘(3) COAL.—The term ‘coal’ means any of the 
recognized classifications and ranks of coal, includ-
ing anthracite, bituminous, semibituminous, subbitu-
minous, lignite, and peat. 
‘‘(4) COAL
PREPARATION
AND
PROCESSING 
PLANT.—The term ‘coal preparation and processing 
plant’ means any facility (excluding underground 
mining operations) which prepares coal by one or 
more of the following processes: breaking, crushing, 
screening, wet or dry cleaning, and thermal drying. 
‘‘(5) ENHANCED
OIL
RECOVERY.—The term 
‘enhanced oil recovery’ has the meaning defined at 
section 1.193–1(b)(2) of title 26, Code of Federal 
Regulations, as of the date of enactment of this Act. 
‘‘(6) FACILITY.—The term ‘facility’ means any 
physical property, plant, building, structure, source, 
or stationary equipment located on one or more con-
tiguous or adjacent properties in actual physical con-
tact or separated solely by a public roadway or other 
public right-of-way and under common ownership or 
common control, that emits or may emit any green-
house gas. 
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‘‘(7) FOSSIL
FUEL.—The term ‘fossil fuel’ 
means coal, petroleum products, or natural gas. 
‘‘(8) GREENHOUSE GAS.—The term ‘greenhouse 
gas’ means carbon dioxide, nitrous oxide, methane, 
hydrofluorocarbons, perfluorocarbons, and sulfur 
hexafluoride. 
‘‘(9) GREENHOUSE GAS EFFECTS.—The term 
‘greenhouse gas effects’ 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. 
‘‘(10) LIFECYCLE
GREENHOUSE
GAS
EMIS-
SIONS.—The term ‘lifecycle greenhouse gas emis-
sions’ has the meaning given that term in section 
211 of the Clear Air Act (42 U.S.C. 7545(o)(1)(H)). 
‘‘(11) NATURAL GAS.—The term ‘natural gas’ 
means any fuel consisting in whole or in part of nat-
ural gas, including components of natural gas such 
as methane and ethane; liquid petroleum gas; syn-
thetic gas derived from coal, petroleum, or natural 
gas liquids; or any mixture of natural gas and syn-
thetic gas. 
‘‘(12) PETROLEUM PRODUCTS.—The term ‘pe-
troleum products’ means unfinished oils, liquefied 
petroleum gases, pentanes plus, aviation gasoline, 
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motor gasoline, naphtha-type jet fuel, kerosene-type 
jet fuel, kerosene, distillate fuel oil, residual fuel oil, 
petrochemical feedstocks, special naphthas, lubri-
cants, waxes, petroleum coke, asphalt, road oil, still 
gas, and miscellaneous products obtained from the 
processing of crude oil (including lease condensate), 
natural gas, and other hydrocarbon compounds. The 
term does not include natural gas, liquefied natural 
gas, biofuels, methanol, and other nonpetroleum 
fuels. 
‘‘(13) PUBLISH.—The term ‘publish’ means 
publication in the Federal Register. 
‘‘(14) REFINERY.—The term ‘refinery’ means 
any facility engaged in producing gasoline, kerosene, 
distillate fuel oils, residual fuel oils, lubricants, or 
other products through distillation of petroleum or 
through redistillation, cracking or reforming of un-
finished petroleum derivatives. 
‘‘(15) OWNER.—The term ‘owner’ with respect 
to any fossil fuel means any person who has legal 
title to the fossil fuel. 
‘‘(16) OWNER OR OPERATOR.—The term ‘owner 
or operator’ with respect to any fossil fuel means 
any person who has legal title to the fossil fuel. 
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‘‘(17) SEQUESTERS.—The term ‘sequesters’ 
means the permanent storage of carbon dioxide or 
other greenhouse gas such that it does not escape 
into the atmosphere, and is in compliance with the 
regulations issued pursuant to section 45Q(d)(2). 
‘‘(18) SOLID
BIOMASS.—The term ‘solid bio-
mass’ means nonfossilized and biodegradable organic 
material originating from plants, animals, or micro-
organisms, including products, byproducts, residues 
and waste from agriculture, forestry and related in-
dustries as well as the nonfossilized and biodegrad-
able organic fractions of industrial and municipal 
wastes, but does not include gases and liquids recov-
ered from the decomposition of nonfossilized and 
biodegradable organic material. 
‘‘(19) SOURCE CATEGORY.—The term ‘source 
category’ means any category or subcategory regu-
lated under part 60 of title 40, Code of Federal Reg-
ulations, or part 90 of title 40, Code of Federal Reg-
ulations. 
‘‘PART 2—TAX ADJUSTMENTS FOR IMPORTS AND 
EXPORTS OF GREENHOUSE GAS INTENSIVE 
PRODUCTS 
‘‘Sec. 9911. Purposes. 
‘‘Sec. 9912. Definitions. 
‘‘Sec. 9913. Notification of foreign countries. 
‘‘Sec. 9914. Border tax adjustment rate. 
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‘‘SEC. 9911. PURPOSES. 
‘‘(a) PURPOSES OF PART.—The purposes of this part 
are— 
‘‘(1) to promote a strong global effort to signifi-
cantly reduce greenhouse gas emissions, and 
‘‘(2) to prevent carbon leakage. 
‘‘(b) ADDITIONAL PURPOSES OF PART.—The pur-
poses of this part are additionally— 
‘‘(1) to provide a rebate to exporters in domes-
tic eligible industrial sectors for the greenhouse gas 
emission costs of the owners and operators incurred 
under this title, but not for costs associated with 
other related or unrelated market dynamics, 
‘‘(2) to ensure that imports from other coun-
tries, and, in particular, fast-growing developing 
countries, do not enjoy competitive advantages be-
cause of the carbon tax liability of domestic manu-
facturers, and therefore increase their emissions, 
‘‘(3) to encourage foreign countries to take sub-
stantial action with respect to their greenhouse gas 
emissions, and 
‘‘(4) to ensure that the measures described in 
this subpart are designed and implemented in a 
manner consistent with applicable international 
agreements to which the United States is a party. 
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‘‘SEC. 9912. DEFINITIONS. 
‘‘In this part: 
‘‘(1) CARBON
LEAKAGE.—The term ‘carbon 
leakage’ means any substantial increase (as deter-
mined by the Secretary) in greenhouse gas emissions 
by entities located in other countries caused by a 
cost of production increase in the United States re-
sulting from implementation of this title. 
‘‘(2) BORDER
TAX
ADJUSTMENT.—The term 
‘border tax adjustment’ means the levying of a tax 
on imported covered goods equivalent to the amount 
of tax paid pursuant to part 1 of this subtitle in the 
manufacture of comparable domestic manufactured 
goods, and the rebating of the tax paid pursuant to 
part 1 of this subtitle that has been paid on covered 
goods exported from the United States. 
‘‘(3) BORDER
TAX
ADJUSTMENT
RATE.—The 
term ‘border tax adjustment rate’ means the amount 
of tax that would be paid on a covered good pro-
duced in the United States in the current year. 
‘‘(4) 
COMMISSIONER.—The 
term 
‘Commis-
sioner’ means the Commissioner of United States 
Customs and Border Protection. 
‘‘(5) COVERED GOOD.—The term ‘covered good’ 
means a good that is— 
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‘‘(A) entered under a heading or sub-
heading of the Harmonized Tariff Schedule of 
the United States that corresponds to the 
NAICS code for an eligible industrial sector, as 
established in the concordance between NAICS 
codes and the Harmonized Tariff Schedule of 
the United States prepared by the United 
States Census Bureau, or 
‘‘(B) a manufactured item for consump-
tion. 
‘‘(6) ELIGIBLE
INDUSTRIAL
SECTOR.—The 
term ‘eligible industrial sector’ means an industrial 
sector determined by the Secretary under section 
9913. 
‘‘(7) INDUSTRIAL SECTOR.—The term ‘indus-
trial sector’ means any sector that— 
‘‘(A) is in the manufacturing sector (as de-
fined in NAICS codes 31, 32, and 33), or 
‘‘(B) is part of, or an entire sector that 
beneficiates or otherwise processes (including 
agglomeration) metal ores, including iron and 
copper ores, soda ash, and phosphate. The term 
‘industrial sector’ does not include any part of 
a sector that extracts fossil fuels, metal ores, 
soda ash, or phosphate. 
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‘‘(8) MANUFACTURED
ITEM
FOR
CONSUMP-
TION.—The term ‘manufactured item for consump-
tion’ means any good— 
‘‘(A) that includes in substantial quantities 
one or more goods like the goods produced by 
an eligible industrial sector, and 
‘‘(B) for which the Secretary has deter-
mined, with the concurrence of the Commis-
sioner, that the application of the border tax 
adjustment program pursuant to this part is 
technically and administratively feasible and ap-
propriate to achieve the purposes of this part, 
taking into account the greenhouse gas inten-
sity, and where appropriate the trade intensity, 
of the industrial sector that produces the good, 
as measured consistent with section 9913 and 
the ability of the producers to recover cost in-
creases in the marketplace and other appro-
priate factors. 
‘‘(9) NAICS.—The term ‘NAICS’ means the 
North American Industrial Classification System of 
2002. 
‘‘(10) OUTPUT.—The term ‘output’ means the 
total tonnage or other standard unit of production 
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(as determined by the Secretary) produced by an en-
tity in an industrial sector. 
‘‘SEC. 9913. NOTIFICATION OF FOREIGN COUNTRIES. 
‘‘(a) IN GENERAL.—As soon as practicable after the 
date of the enactment of the Stemming Warming and 
Augmenting Pay Act of 2019, the President shall notify 
each foreign country— 
‘‘(1) requesting the foreign country to take ap-
propriate measures to limit the greenhouse gas emis-
sions of the foreign country, and 
‘‘(2) indicating that a border tax adjustment 
may apply to covered goods imported into and ex-
ported from the United States. 
‘‘(b) LISTS.— 
‘‘(1) IN GENERAL.—Not later than 1 year after 
the date of the enactment of the Stemming Warm-
ing and Augmenting Pay Act of 2019, the Secretary 
shall promulgate a rule designating, based on the 
criteria under subsection (c)(2), industrial sectors 
where covered products are liable for the border tax 
adjustment. 
‘‘(2) CONTENT.—The list shall include the 
amount of the border tax adjustment rate for each 
covered good in the following calendar year pursuant 
to section 9914. 
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‘‘(3) SUBSEQUENT LISTS.—Not later than Jan-
uary 31 of each calendar year after the calendar 
year in which the Stemming Warming and Aug-
menting Pay Act of 2019 is enacted, the Secretary 
shall publish in the Federal Register an updated 
version of the list published under paragraph (1). 
‘‘(c) ELIGIBLE INDUSTRIAL SECTORS.— 
‘‘(1) PRESUMPTIVELY
ELIGIBLE
INDUSTRIAL 
SECTORS.— 
‘‘(A) ELIGIBILITY CRITERIA.— 
‘‘(i) IN GENERAL.— 
‘‘(I) Imported covered goods are 
liable under this part if they are pro-
duced in the United States in an in-
dustrial sector that is included in a 6- 
digit classification of the NAICS that 
meets the criteria in both clauses (ii) 
and (iii). 
‘‘(II) Exported covered goods are 
eligible under this part if they are 
produced in the United States in an 
industrial sector that is included in a 
6-digit classification of the NAICS 
that meets the criteria in clause (ii). 
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‘‘(ii) GREENHOUSE GAS INTENSITY.— 
As determined by the Secretary, an indus-
trial sector meets the criteria of this clause 
if the United States industrial sector has a 
greenhouse gas intensity of at least 5 per-
cent, calculated by dividing— 
‘‘(I) the number of metric tons of 
carbon dioxide equivalent greenhouse 
gas emissions (including direct emis-
sions from fuel combustion, process 
emissions, and indirect emissions from 
the generation of electricity used to 
produce the output of the sector) of 
the sector based on data described in 
subparagraph (C), multiplied by the 
applicable rate in section 9901(b)(2), 
by 
‘‘(II) the value of the shipments 
of the sector, based on data described 
in subparagraph (C). 
‘‘(iii) TRADE
INTENSITY.—As deter-
mined by the Secretary, an industrial sec-
tor meets the criteria of this clause if the 
industrial sector has a trade intensity of at 
least 15 percent, calculated by dividing— 
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‘‘(I) the value of the total im-
ports and exports of the sector, by 
‘‘(II) the value of the shipments 
plus the value of imports of the sec-
tor, based on data described in sub-
paragraph (C). 
‘‘(B) METAL
AND
PHOSPHATE
PRODUC-
TION
CLASSIFIED
UNDER
MORE
THAN
ONE 
NAICS CODE.—For purposes of this section, the 
Secretary shall— 
‘‘(i) 
aggregate 
data 
for 
the 
beneficiation or other processing (including 
agglomeration) of metal ores, including 
iron and copper ores, soda ash, or phos-
phate with subsequent steps in the process 
of metal and phosphate manufacturing, re-
gardless of the NAICS code under which 
the activity is classified, and 
‘‘(ii) aggregate data for the manufac-
turing of steel with the manufacturing of 
steel pipe and tube made from purchased 
steel in a nonintegrated process. 
‘‘(C) DATA SOURCES.— 
‘‘(i) VALUE OF SHIPMENTS.— 
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‘‘(I) IN
GENERAL.—The Sec-
retary shall determine the value of 
shipments under this subsection from 
data from the United States Census 
Annual Survey of Manufacturers. 
‘‘(II) 
AVERAGE
DATA
AVAIL-
ABLE.—The Secretary shall use the 
average of data from the most recent 
3 years for which the data are avail-
able. 
‘‘(III) 
AVERAGE
DATA
NOT 
AVAILABLE.—If data described in sub-
clause (II) are unavailable, the Sec-
retary shall make a determination 
based on— 
‘‘(aa) data from the most 
detailed industrial classification 
level of the Manufacturing En-
ergy Consumption Survey of the 
Energy Information Administra-
tion, and 
‘‘(bb) data from the most re-
cent Economic Census of the 
United States. 
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‘‘(IV) DATA NOT AVAILABLE FOR 
SECTOR.—If data from the Manufac-
turing Energy Consumption Survey or 
Economic Census are unavailable for 
any sector at the 6-digit classification 
level in the NAICS, the Secretary may 
use available Manufacturing Energy 
Consumption Survey or Economic 
Census data pertaining to a broader 
industrial category classified in the 
NAICS. 
‘‘(V) DATA NOT AVAILABLE FOR 
PROCESSING.—If data relating to the 
beneficiation or other processing (in-
cluding agglomeration) of metal ores 
(including iron and copper ores, soda 
ash, or phosphate) are not available 
from the specified data sources, the 
Secretary— 
‘‘(aa) shall use the best 
available Federal or State gov-
ernment data, and 
‘‘(bb) may use, to the extent 
necessary, 
representative 
data 
submitted by entities that per-
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form the beneficiation or other 
processing (including agglomer-
ation), in making a determina-
tion. 
‘‘(ii) IMPORTS AND EXPORTS.— 
‘‘(I) IN
GENERAL.—The Sec-
retary shall base the value of imports 
and exports under this subsection on 
United States International Trade 
Commission data. 
‘‘(II) 
AVERAGE
DATA
AVAIL-
ABLE.—The Secretary shall use the 
average of data from the three most 
recent years for which the data are 
available. 
‘‘(III) 
AVERAGE
DATA
NOT 
AVAILABLE.—If data from the United 
States International Trade Commis-
sion are unavailable for any sector at 
the 6-digit classification level in the 
NAICS, the Secretary may use United 
States International Trade Commis-
sion data pertaining to a broader in-
dustrial category classified in the 
NAICS. 
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‘‘(iii) PERCENTAGES.—The Secretary 
shall round the greenhouse gas intensity 
and trade intensity percentages under sub-
paragraph (A) to the nearest whole num-
ber. 
‘‘(iv) GREENHOUSE
GAS
EMISSION 
CALCULATIONS.—When 
calculating 
the 
metric tons of carbon dioxide equivalent 
greenhouse gas emissions for each sector 
under subparagraph (A)(ii)(I), the Sec-
retary— 
‘‘(I) shall use the best available 
data from the three most recent years 
for which the data are available, and 
‘‘(II) may, to the extent nec-
essary with respect to a sector, use 
economic and engineering models and 
the best available information on tech-
nology performance levels for the sec-
tor. 
‘‘(2) ADMINISTRATIVE DETERMINATION OF AD-
DITIONAL ELIGIBLE INDUSTRIAL SECTORS.— 
‘‘(A) UPDATED TRADE INTENSITY DATA.— 
The Secretary shall designate as liable for bor-
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der tax adjustment rate on imported products 
under this part an industrial sector that— 
‘‘(i) met the greenhouse gas intensity 
criteria in paragraph (1)(A)(ii) as of the 
date of promulgation of the rule under 
paragraph (1), and 
‘‘(ii) meets the trade intensity criteria 
established under paragraph (1)(A)(iii), 
using data sources described in paragraph 
(1)(C) from any year after the passage of 
this Act. 
‘‘(B) INDIVIDUAL SHOWING PETITION.— 
‘‘(i) PETITION.—In addition to des-
ignation under subparagraph (A), the 
owner or operator of an entity or a group 
of entities that collectively produce not less 
than 80 percent of the average annual 
value of shipments from within the sector 
of the group consistent with subclause (I), 
that manufacture similar products in an 
industrial sector may petition the Sec-
retary to designate as eligible industrial 
sectors under this part an entity or a 
group of entities that— 
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‘‘(I) represent a sector using a 
standard product classification, and 
‘‘(II) meet the respective import 
and/or export eligibility criteria in 
paragraph (1)(A)(i). 
‘‘(ii) DATA.—In making a determina-
tion under this subparagraph, the Sec-
retary shall consider— 
‘‘(I) data submitted by the peti-
tioner, 
‘‘(II) data solicited by the Sec-
retary from other entities in the sec-
tor, and 
‘‘(III) data specified in para-
graph (1)(C). 
‘‘(iii) BASIS
OF
SUBSECTOR
DETER-
MINATION.— 
‘‘(I) IN
GENERAL.—Except as 
provided in subclause (II), the Sec-
retary shall determine an entity or 
group of entities to be a subsector of 
a 6-digit section of the NAICS code 
based only on the products manufac-
tured and not the industrial process 
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by which the products are manufac-
tured. 
‘‘(II) TYPE OF MATERIAL.—The 
Secretary may determine an entity or 
group of entities that manufacture a 
product from primarily virgin material 
to be a separate subsector from an-
other entity or group of entities that 
manufacture the same product pri-
marily from recycled material. 
‘‘(iv) USE OF MOST RECENT DATA.— 
In determining whether to designate a sec-
tor or subsector as an eligible industrial 
sector under this subparagraph, the Sec-
retary shall use the most recent data avail-
able from the sources described in para-
graph (1)(C), rather than the data from 
the years specified in paragraph (1)(C), to 
determine the trade intensity of the sector 
or subsector, but only for determining the 
trade intensity. 
‘‘(v) FINAL
ACTION.—The Secretary 
shall take final action on a petition de-
scribed in this subparagraph not later than 
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180 days after the date the completed peti-
tion is received by the Secretary. 
‘‘(3) CESSATION OF QUALIFYING ACTIVITIES.— 
If, as determined by the Secretary, an industrial sec-
tor or a covered good within the sector is no longer 
liable to be designated under this section, the Com-
missioner shall cease to apply the border tax adjust-
ment on the relevant covered goods with effect from 
January 1 of the following year. 
‘‘SEC. 9914. BORDER TAX ADJUSTMENT RATE. 
‘‘(a) ESTABLISHMENT.—Not later than January 1, 
2020, the Secretary, with the concurrence of the Commis-
sioner, shall promulgate regulations— 
‘‘(1) establishing the products which are liable 
for, and requiring payment of, the border tax adjust-
ment rate, 
‘‘(2) establishing a general methodology for cal-
culating the level of the border tax adjustment rate 
that a domestic importer of any covered good must 
submit and the rebate that an exporter will receive, 
‘‘(3) establishing an administrative process 
whereby any determination by the Secretary under 
this subsection may be appealed, 
‘‘(4) exempting from this section products that 
originate from— 
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‘‘(A) any country that the United Nations 
has identified as among the least developed of 
developing countries, or 
‘‘(B) any country that the President has 
determined to be responsible for less than 0.5 
percent of total global greenhouse gas emissions 
and less than 5 percent of global production in 
the eligible industrial sector, 
‘‘(5) specifying the procedures that the Com-
missioner will apply for the declaration and entry of 
covered goods with respect to the eligible industrial 
sector into the customs territory of the United 
States, and 
‘‘(6) establishing procedures that prevent cir-
cumvention of the carbon tax liability for covered 
goods that are manufactured or processed in more 
than one foreign country. 
‘‘(b) PRESIDENTIAL DISCRETION.—The President 
may elect not to levy the border tax adjustment for an 
eligible industrial sector or for specific products within 
that sector if the President determines and certifies to 
Congress that the program would not be in the national 
interest, economic interest or environmental interest of the 
United States. 
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‘‘(c) LIMITATION ON IMPOSITION OF TAX.—A border 
tax adjustment pursuant to this subpart may not be im-
posed with respect to any calendar year that begins less 
than one year after regulations are published under sub-
section (a).’’. 
(b) CLERICAL AMENDMENT.—The table of subtitles 
for the Internal Revenue Code of 1986 is amended by add-
ing at the end the following new item: 
‘‘Subtitle L. Greenhouse Gas Emissions’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to emissions after December 31, 
2019. 
TITLE II—CARBON REDUCED 
PAYROLL TAX 
SEC. 201. CARBON REDUCED PAYROLL TAX. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law— 
(1) with respect to any taxable year which be-
gins after December 31, 2020, the rate of tax under 
section 1401(a) of the Internal Revenue Code of 
1986 shall be 12.4 percent minus the reduced car-
bon rate, and 
(2) with respect to remuneration received after 
December 31, 2020— 
(A) the rate of tax under 3101(a) of such 
Code shall be 6.2 percent minus one-half of the 
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reduced carbon rate (including for purposes of 
determining the applicable percentage under 
sections 3201(a) and 3211(a)(1) of such Code), 
and 
(B) the rate of tax under subsection (a) of 
section 3111 of such Code shall be 6.2 percent 
minus one-half of the reduced carbon rate (in-
cluding for purposes of subsections (e) and (f) 
of such section and determining the applicable 
percentage under section 3221(a) of such 
Code). 
(b) COORDINATION WITH DEDUCTIONS
FOR EM-
PLOYMENT TAXES.— 
(1) DEDUCTION IN COMPUTING NET EARNINGS 
FROM SELF-EMPLOYMENT.—For purposes of apply-
ing section 1402(a)(12) of the Internal Revenue 
Code of 1986, the rate of tax imposed by subsection 
1401(a) of such Code shall be determined without 
regard to the reduction in such rate under this sec-
tion. 
(2) INDIVIDUAL DEDUCTION.—In the case of 
the taxes imposed by section 1401 of such Code for 
any taxable year which begins in the payroll tax car-
bon period, the deduction under section 164(f) with 
respect to such taxes shall be equal to the sum of— 
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(A) one-half of the portion of such taxes 
attributable to the tax imposed by section 
1401(a) (determined after the application of 
this section), plus 
(B) one-half of the portion of such taxes 
attributable to the tax imposed by section 
1401(b). 
(c) REDUCED CARBON RATE.—For purposes of this 
section— 
(1) IN GENERAL.—The term ‘‘reduced carbon 
rate’’ means the number of percentage points deter-
mined by the Secretary to be— 
(A) 1 percentage point in the case of any 
taxable year which begins during calendar year 
2021, and 
(B) in the case of any taxable year begin-
ning in a calendar year beginning after calendar 
year 2021, the number of percentage points de-
termined by the Secretary to be, for the cal-
endar year the product of— 
(i) 12.4, and 
(ii) 52.5 percent of amounts of esti-
mated taxes received in the Treasury 
under subtitle L of the Internal Revenue 
Code of 1986 (relating to greenhouse gas 
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emissions), divided by estimated taxes that 
would have been received in the Treasury 
with respect to a calendar year under sec-
tions 1401(a), 3101(a), 3111(a), and the 
applicable percentage of such taxes under 
3201(a), 3211(a)(1), and 3221(a), were 
this section not in effect. 
(2) ESTIMATES.—For purposes of paragraph 
(1), the determination of amounts received in the 
Treasury shall be made on the basis of estimates by 
the Secretary of the Treasury (or the Secretary’s 
delegate), and proper adjustments shall be made in 
the amounts subsequently estimated to the extent 
prior estimates were in excess of or less than actual 
receipts. 
(3) 
PUBLICATION
OF
REDUCED
CARBON 
RATE.—Not later than October 31 of each calendar 
year, the Secretary shall publish the reduced carbon 
rate determined under this subsection for the suc-
ceeding calendar year. 
(d) EMPLOYER NOTIFICATION.—The Secretary of 
the Treasury shall notify employers of the payroll tax holi-
day period in any manner the Secretary deems appro-
priate. 
(e) TRANSFERS OF FUNDS.— 
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(1) TRANSFERS
TO
FEDERAL
OLD-AGE
AND 
SURVIVORS
INSURANCE
TRUST
FUND.—There are 
hereby appropriated to the Federal Old-Age and 
Survivors Trust Fund and the Federal Disability In-
surance Trust Fund established under section 201 
of the Social Security Act (42 U.S.C. 401) amounts 
equal to the reduction in revenues to the Treasury 
by reason of the application of subsection (a). 
Amounts appropriated by the preceding sentence 
shall be transferred from the general fund at such 
times and in such manner as to replicate to the ex-
tent possible the transfers which would have oc-
curred to such Trust Fund had such amendments 
not been enacted. 
(2) TRANSFERS TO SOCIAL SECURITY EQUIVA-
LENT BENEFIT ACCOUNT.—There are hereby appro-
priated to the Social Security Equivalent Benefit Ac-
count established under section 15A(a) of the Rail-
road Retirement Act of 1974 (45 U.S.C. 231n–1(a)) 
amounts equal to the reduction in revenues to the 
Treasury by reason of the application of subsection 
(a)(2). Amounts appropriated by the preceding sen-
tence shall be transferred from the general fund at 
such times and in such manner as to replicate to the 
extent possible the transfers which would have oc-
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curred to such Account had such amendments not 
been enacted. 
(3) COORDINATION
WITH
OTHER
FEDERAL 
LAWS.—For purposes of applying any provision of 
Federal law other than the provisions of the Internal 
Revenue Code of 1986, the rate of tax in effect 
under section 3101(a) of such Code shall be deter-
mined without regard to the reduction in such rate 
under this section. 
(f) SPECIAL RULE.—Not later than October 1 of 
each fiscal year beginning after fiscal year 2021 (January 
1, 2021 in the case of fiscal year 2021), from amounts 
in the general fund of the Treasury not otherwise appro-
priated, the Commissioner of Social Security shall pay an 
amount, equal to 7.5 percent of amounts of taxes received 
in the Treasury under subtitle L of the Internal Revenue 
Code of 1986 (relating greenhouse gas emissions), to be 
distributed equally among each individual entitled to 
monthly insurance benefits under title II of the Social Se-
curity Act, or to an annuity under section 2 of the Rail-
road Retirement Act of 1974 for the first month of each 
year. 
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TITLE 
III—DISTRIBUTION 
OF 
REVENUES FROM TAXATION 
OF GREENHOUSE GAS EMIS-
SIONS 
SEC. 301. ESTABLISHMENT OF THE CARBON TRUST FUND. 
(a) CREATION OF TRUST FUND.—There is hereby 
created in the Treasury of the United States a trust fund 
to be known as the ‘‘CARBON Trust Fund’’. 
(b) TRANSFERS TO TRUST FUND.—There are hereby 
appropriated to the CARBON Trust Fund amounts equiv-
alent to 15 percent of the taxes received in the Treasury 
under subtitle L of the Internal Revenue Code of 1986 
(as added by title I of this Act). 
SEC. 302. APPROPRIATIONS FROM THE CARBON TRUST 
FUND. 
Amounts in the CARBON Trust Fund for a fiscal 
year shall be available, as provided by appropriation Acts, 
as follows: 
(1) Fifty percent of such amounts shall be 
available for State block grants to be used to offset 
higher energy costs for low-income households. 
(2) Fifty percent of such amounts shall be 
available for climate adaptation, carbon sequestra-
tion, energy efficiency, and advanced R&D pro-
grams. 
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TITLE 
IV—AMENDMENTS 
TO 
FEDERAL 
ENVIRONMENTAL 
STATUTES 
SEC. 401. AMENDMENTS TO THE CLEAN AIR ACT. 
(a) IN GENERAL.—Title III of the Clean Air Act (42 
U.S.C. 7601) is amended by adding at the end the fol-
lowing: 
‘‘SEC. 330. MORATORIUM AGAINST CERTAIN REGULATIONS 
BASED ON GREENHOUSE GAS EFFECTS. 
‘‘(a) FUELS.—Unless specifically authorized in sec-
tion 202, 211, 213, 231, or this section, after a fossil fuel 
has passed through a point of taxation as provided in sec-
tion 9901(d) of the Internal Revenue Code of 1986, sub-
ject to subsection (g), the Administrator shall not publish 
or enforce any rule limiting the emission of greenhouse 
gases from the combustion of that fuel under this Act (or 
impose any requirement on any State to limit such emis-
sion) on the basis of the emission’s greenhouse gas effects. 
‘‘(b) EMISSIONS.—Unless specifically authorized in 
section 202, 211, 213, 231, or this section, if emission 
of any greenhouse gas is subject to taxation pursuant to 
any of sections 9902 through 9903 of the Internal Rev-
enue Code of 1986, the Administrator shall not publish 
or enforce any rule limiting such emission under this Act 
(or impose any requirement on any State to limit such 
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emission) on the basis of the emission’s greenhouse gas 
effects. 
‘‘(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 wel-
fare other than its greenhouse gas effects; 
‘‘(2) in limiting emissions as described in para-
graph (1), to consider the collateral benefits of lim-
iting the emissions because of greenhouse gas ef-
fects; 
‘‘(3) to limit the emission of 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, in-
cluding— 
‘‘(A) monitoring, reporting, and record- 
keeping requirements; 
‘‘(B) conducting or supporting investiga-
tions; and 
‘‘(C) information collection. 
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‘‘(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) facilities that are subject to— 
‘‘(A) subparts OOOO or OOOOa of part 
60 of title 40, Code of Federal Regulations, as 
in effect on January 1, 2018, or 
‘‘(B) would be subject to either subpart 
OOOO or subpart OOOOa if those subparts ap-
plied to such facilities regardless of the date on 
which construction, modification, or reconstruc-
tion commenced, and 
‘‘(2) POTW Treatment Plants (as defined in 
section 403.3(r) of title 40, Code of Federal Regula-
tions). 
‘‘(e) DEFINITIONS.—In this section, the terms 
‘greenhouse gas’ and ‘greenhouse gas effects’ have the 
meanings given to those terms in section 9907 of the In-
ternal Revenue Code of 1986. 
‘‘(f) MORATORIUM EXPIRATION.—The moratoria on 
the Administrator publishing or enforcing rules limiting 
the emission of greenhouse gases in subsections (a) and 
(b) and section 211(c)(5) of this Act shall expire on Janu-
ary 1, 2034. 
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‘‘(g) EXCEPTIONS.— 
‘‘(1) 2024.—Notwithstanding subsections (a) 
and (b) and section 211(c)(5) of this Act, if the Ad-
ministrator determines by March 30, 2026, pursuant 
to the report required by section 9901(b)(3)(B) of 
the Internal Revenue Code of 1986, that total green-
house gas emissions subject to taxation under sec-
tions 9901 through 9903 of such Code during the 
period 2021 through 2025 exceed the emission level 
specified in section 9901(b)(3)(C) of such Code for 
calendar year 2025, then beginning on October 1, 
2026, the prohibition in subsections (a) and (b) and 
section 211(c)(5) of this Act on publishing or enforc-
ing rules limiting the emission of greenhouse gases 
(and imposing any requirement on any State to limit 
such emission) shall not apply. 
‘‘(2) 2028.—Notwithstanding subsections (a) 
and (b) and section 211(c)(5) of this Act, if the Ad-
ministrator determines by March 30, 2030, pursuant 
to the report required by section 9901(b)(3)(B) of 
the Internal Revenue Code of 1986, that total green-
house gas emissions subject to taxation under sec-
tions 9901 through 9903 of such Code during the 
period 2021 through 2029 exceed the emission level 
specified in section 9901(b)(3)(C) of such Code for 
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calendar year 2029, then beginning on October 1, 
2030, the prohibition in subsections (a) and (b) and 
section 211(c)(5) of this Act on publishing or enforc-
ing rules limiting the emission of greenhouse gases 
(and imposing any requirement on any State to limit 
such emission) shall not apply.’’. 
(b) NEW MOTOR VEHICLES AND NEW MOTOR VEHI-
CLE ENGINES.—Section 202(b) of the Clean Air Act (42 
U.S.C. 7521(b)) is amended— 
(1) by redesignating the second paragraph (3) 
(as redesignated by section 230(4)(C) of Public Law 
101–549 (104 Stat. 2529)) as paragraph (4); and 
(2) by adding at the end the following: 
‘‘(5) Notwithstanding section 330(a), the Ad-
ministrator may— 
‘‘(A) limit the emission of any greenhouse 
gas (as defined in section 9907 of the Internal 
Revenue Code of 1986) on the basis of the 
emission’s greenhouse gas effects (as defined in 
section 9907 of the Internal Revenue Code of 
1986) from any class or classes of new motor 
vehicles or new motor vehicle engines subject to 
regulation under subsection (a)(1); and 
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‘‘(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)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(5) Except as required in section 211(o), the Admin-
istrator shall not, pursuant to this subsection, impose on 
any manufacturer, processor, or distributor of fuel any re-
quirement for the purpose of reducing the emission of any 
greenhouse gas (as defined in section 9907 of the Internal 
Revenue Code of 1986) produced by combustion of the 
fuel on the basis of the emission’s greenhouse gas effects 
(as defined in section 9907 of the Internal Revenue Code 
of 1986).’’. 
(d) NONROAD ENGINES AND VEHICLES EMISSIONS 
STANDARDS.—Section 213 of the Clean Air Act (42 
U.S.C. 7547) is amended by adding at the end the fol-
lowing: 
‘‘(e) 
GREENHOUSE
GAS
EMISSIONS.—Notwith-
standing subsections (a) and (b) of section 330, the Ad-
ministrator may limit the emission of any greenhouse gas 
(as defined in section 9907 of the Internal Revenue Code 
of 1986) on the basis of the emission’s greenhouse gas 
effects (as defined in section 9907 of the Internal Revenue 
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Code of 1986) from any nonroad engines and nonroad ve-
hicles subject to regulation under this section.’’. 
(e) AIRCRAFT EMISSION STANDARDS.—Section 231 
of the Clean Air Act (42 U.S.C. 757) is amended by add-
ing at the end the following new subsection: 
‘‘(d) Notwithstanding subsections (a) and (b) of sec-
tion 330, the Administrator may limit the emission of any 
greenhouse gas (as defined in section 9907 of the Internal 
Revenue Code of 1986) on the basis of the emission’s 
greenhouse gas effects (as defined in section 9907 of the 
Internal Revenue Code of 1986) from any class or classes 
of aircraft engines, so long as any such limitation is not 
more stringent than the standards adopted by the Inter-
national Civil Aviation Organization.’’. 
Æ 
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