I 
111TH CONGRESS 
1ST SESSION H. R. 1337 
To amend the Internal Revenue Code of 1986 to reduce carbon dioxide 
emissions in the United States domestic energy supply. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 5, 2009 
Mr. LARSON of Connecticut (for himself, Mr. GEORGE MILLER of California, 
Mr. MCDERMOTT, Mr. BLUMENAUER, Mr. HOLT, Mr. WU, and Mr. 
MORAN of Virginia) introduced the following bill; which was referred to 
the Committee on Ways and Means, and in addition to the Committee 
on Foreign Affairs, for a period to be subsequently determined 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 reduce 
carbon dioxide emissions in the United States domestic 
energy supply. 
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 ‘‘America’s Energy Se-
curity Trust Fund Act of 2009’’. 
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SEC. 2. TAX ON CARBON DIOXIDE CONTENT OF CERTAIN 
SUBSTANCES. 
(a) IN GENERAL.—Chapter 38 of the Internal Rev-
enue Code of 1986 (relating to environmental taxes) is 
amended by adding at the end thereof the following new 
subchapter: 
‘‘Subchapter E—Tax on Carbon Dioxide 
Content of Certain Substances 
‘‘Sec. 4691. Imposition of tax. 
‘‘Sec. 4692. Refunds or credits. 
‘‘Sec. 4693. Border adjustments. 
‘‘Sec. 4694. Definitions and special rules. 
‘‘SEC. 4691. IMPOSITION OF TAX. 
‘‘(a) IN GENERAL.—There is hereby imposed a tax 
on any taxable carbon substance sold by the manufacturer, 
producer, or importer thereof. 
‘‘(b) AMOUNT OF TAX.— 
‘‘(1) IN GENERAL.—The amount of tax imposed 
by subsection (a) on any taxable carbon substance 
shall be the applicable amount per ton of carbon di-
oxide content of such substance, as determined by 
the Secretary in consultation with the Secretary of 
Energy. 
‘‘(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. 
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‘‘(3) APPLICABLE AMOUNT.—For purposes of 
paragraph (1)— 
‘‘(A) CALENDAR YEAR 2009.—The applica-
ble amount for calender year 2009 is $15. 
‘‘(B) YEARS AFTER 2009.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), for a calendar year 
after 2009, the applicable amount is the 
sum of— 
‘‘(I) the amount in effect under 
this paragraph for the preceding cal-
endar year, plus 
‘‘(II) $10. 
‘‘(ii) EXCEPT FOR CARBON EMISSIONS 
TARGET
NONATTAINMENT
YEAR.—Effec-
tive for any carbon emissions target non-
attainment year with respect to which 
there is in effect pursuant to subparagraph 
(C) a carbon emissions target for the sec-
ond preceding calender year— 
‘‘(I) IN
GENERAL.—If any cal-
endar year is a carbon emissions tar-
get nonattainment year, the applicable 
amount for such year shall be deter-
mined under clause (i) by substituting 
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‘$15’ for ‘$10’ in subclause (II) there-
of. 
‘‘(II) CARBON EMISSION TARGET 
NONATTAINMENT
YEAR.—For 
pur-
poses of subclause (I), a calendar year 
is a carbon emissions target non-
attainment year if the total carbon 
emissions in the United States for the 
second preceding calendar year exceed 
the targets established under subpara-
graph (C) for such second preceding 
calendar year. 
‘‘(C) EMISSIONS TARGETS.— 
‘‘(i) IN GENERAL.—Not later than 30 
days after the date of the enactment of 
this section, the Administrator of the Envi-
ronmental Protection Agency shall submit 
to the Secretary and the Congress emis-
sions targets for carbon dioxide. Such tar-
gets shall— 
‘‘(I) be designed to achieve a car-
bon emissions level in the United 
States at the end of calendar year 
2050 of 20 percent of the level of car-
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bon emissions in the United States in 
calendar year 2005, and 
‘‘(II) shall take effect beginning 
with the first calendar year beginning 
after 5 years after the date of enact-
ment of this section. 
‘‘(ii) 
EMISSIONS
REPORTING.—Not 
later than January 31 of any calendar 
year, the Administrator of the Environ-
mental Protection Agency shall submit a 
report to the Secretary and Congress of 
the total carbon emissions for the pre-
ceding calendar year. 
‘‘(c) SUBSTANCE TAXED ONLY ONCE.—No tax shall 
be imposed by subsection (a) with respect to a taxable car-
bon substance if the person who would be liable for such 
tax establishes that a prior tax imposed by such section 
has been imposed with respect to such product. 
‘‘SEC. 4692. REFUNDS OR CREDITS. 
‘‘(a) SEQUESTERED CARBON.—Under regulations 
prescribed by the Secretary, if a person uses a taxable car-
bon substance as a feedstock so that the carbon associated 
with such substance will not be emitted, then an amount 
equal to the amount of tax in effect under section 4691(b) 
with respect to such substance for the calendar year in 
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which such use begins shall be allowed as a credit or re-
fund (without interest) to such person in the same manner 
as if it were an overpayment of tax imposed by section 
4691. 
‘‘(b) OFFSET PROJECTS.— 
‘‘(1) IN GENERAL.—Not later than 1 year after 
the date of the enactment of this Act, the Secretary, 
in consultation with the Secretary of Energy, shall 
conduct a study and submit a report to the Congress 
of qualified offset projects. 
‘‘(2) QUALIFIED OFFSET PROJECT.—For pur-
poses of paragraph (1), the term ‘qualified offset 
project’ means a project carried out in the United 
States that— 
‘‘(A) reduces greenhouse gas emissions, 
‘‘(B) sequesters a greenhouse gas, or 
‘‘(C) destroys hydrofluorocarbons. 
‘‘(3) EXCEPTION.—Such term does not include 
a project that involves enhanced oil recovery. 
‘‘(c) PREVIOUSLY
TAXED
CARBON
SUBSTANCES 
USED TO MAKE ANOTHER TAXABLE CARBON SUB-
STANCE.—Under regulations prescribed by the Secretary, 
if— 
‘‘(1) a tax under section 4691 was paid with re-
spect to any taxable carbon substance, and 
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‘‘(2) such substance was used by any person in 
the manufacture or production of any other sub-
stance which is a taxable carbon substance, 
then an amount equal to the tax so paid shall be allowed 
as a credit or refund (without interest) to such person in 
the same manner as if it were an overpayment of tax im-
posed by subsection (a). In any case to which this para-
graph applies, the amount of any such credit or refund 
shall not exceed the amount of tax imposed by subsection 
(a) on the other taxable fuel manufactured or produced 
(or which would have been imposed by such subsection on 
such other fuel but for subsection (c)). 
‘‘(d) EXEMPTION FOR EXPORTS.— 
‘‘(1) TAX-FREE SALES.— 
‘‘(A) IN GENERAL.—No tax shall be im-
posed under subsection (a) on the sale by the 
manufacturer or producer of any taxable carbon 
substance for export or for resale by the pur-
chaser 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— 
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‘‘(i) tax under subsection (a) was paid 
with respect to any taxable carbon sub-
stance, and 
‘‘(ii)(I) such substance was exported 
by any person, or 
‘‘(II) such substance was used as a 
material in the manufacture or production 
of a taxable carbon substance which was 
exported by any person and which, at the 
time of export, was a taxable carbon sub-
stance, 
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 carbon substance, or 
‘‘(ii) has obtained the written consent 
of such exporter to the allowance of the 
credit or the making of the refund. 
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‘‘(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 carbon sub-
stance, where— 
‘‘(i) the person who paid the tax 
waives his claim to the amount of such 
credit or refund, and 
‘‘(ii) the person exporting the taxable 
carbon substance provides such informa-
tion as the Secretary 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. 
‘‘SEC. 4693. BORDER ADJUSTMENTS. 
‘‘(a) IMPORTS.—The Secretary shall impose a carbon 
equivalency fee on imports of carbon-intensive goods that 
shall be equivalent to the cost that domestic producers of 
comparable carbon-intensive goods incur as a result of— 
‘‘(1) taxes paid by manufacturers, producers, 
and importers of taxable carbon substances under 
this Act, and 
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‘‘(2) carbon equivalency fees paid by importers 
of carbon intensive goods used in the production of 
the comparable carbon intensive goods in question. 
‘‘(b) EXPORTS.—Notwithstanding the limitations of 
section 4692(d), the Secretary shall allow as a credit or 
refund (without interest) to the exporter of a carbon-inten-
sive good produced in the United States in the same man-
ner as if it were an overpayment of tax imposed by section 
4691 an amount equivalent to the cost that domestic pro-
ducers of such carbon intensive goods incur as a result 
of— 
‘‘(1) taxes paid by manufacturers, producers, 
and importers of taxable carbon substances under 
this Act, and 
‘‘(2) carbon equivalency fees paid by importers 
of carbon intensive goods used in the production of 
the comparable carbon intensive goods in question. 
‘‘(c) EXPIRATION.—This section shall cease to have 
effect at such time as and to the extent that— 
‘‘(1)(A) an international agreement requiring 
countries that emit greenhouse gases and produce 
carbon intensive goods for international markets to 
adopt equivalent measures comes into effect, or 
‘‘(B) the country of export has implemented 
equivalent measures, and 
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‘‘(2) the actions provided for by subsections (a) 
and (b) are no longer appropriate. 
‘‘SEC. 4694. DEFINITIONS AND SPECIAL RULES. 
‘‘(a) DEFINITIONS.—For purposes of this sub-
chapter— 
‘‘(1) TAXABLE CARBON SUBSTANCE.—The term 
‘taxable carbon substance’ means— 
‘‘(A) coal (including lignite and peat), 
‘‘(B) petroleum and any petroleum product 
(as defined in section 4612(a)(3)), and 
‘‘(C) natural gas, 
which is extracted, manufactured, or produced in the 
United States or entered into the United States for 
consumption, use, or warehousing. 
‘‘(2) UNITED
STATES.—The term ‘United 
States’ has the meaning given such term by section 
4612(a)(4). 
‘‘(3) IMPORTER.—The term ‘importer’ means 
the person entering the taxable carbon substance for 
consumption, use, or warehousing. 
‘‘(4) TON.—The term ‘ton’ means 2,000 
pounds. In the case of any taxable carbon substance 
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. 
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