I 
116TH CONGRESS 
1ST SESSION 
H. R. 763 
To create a Carbon Dividend Trust Fund for the American people in order 
to encourage market-driven innovation of clean energy technologies and 
market efficiencies which will reduce harmful pollution and leave a 
healthier, more stable, and more prosperous nation for future genera-
tions. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 24, 2019 
Mr. DEUTCH (for himself, Mr. LIPINSKI, Mr. CRIST, Mr. PETERS, Ms. 
ESHOO, Ms. JUDY CHU of California, and Mr. ROONEY of Florida) intro-
duced the following bill; which was referred to the Committee on Ways 
and Means, and in addition to the Committees on Energy and Commerce, 
and Foreign Affairs, for a 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 create a Carbon Dividend Trust Fund for the American 
people in order to encourage market-driven innovation 
of clean energy technologies and market efficiencies 
which will reduce harmful pollution and leave a healthier, 
more stable, and more prosperous nation for future gen-
erations. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Energy Innovation and 
Carbon Dividend Act of 2019’’. 
SEC. 2. FINDINGS. 
The Congress finds that— 
(1) efficient markets strengthen our economy 
and benefit our Nation by encouraging competition, 
innovation, and technological progress; 
(2) efficient markets should reflect all costs of 
goods to ensure that they advance America’s pros-
perity and national interests; 
(3) emissions of carbon pollution and other 
harmful pollutants into our Nation’s air impose sub-
stantial costs on all Americans and on future gen-
erations; and 
(4) creation of a Carbon Dividend Trust Fund, 
to be distributed to the American people, will make 
markets more efficient, create jobs, and stimulate 
competition, innovation, and technological progress 
that benefit all Americans and future generations. 
SEC. 3. CARBON DIVIDENDS AND CARBON FEE. 
(a) IN GENERAL.—The Internal Revenue Code of 
1986 is amended by adding at the end the following new 
subtitle: 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
‘‘Subtitle L—CARBON DIVIDENDS 
AND CARBON FEE 
‘‘CHAPTER 101. CARBON FEES. 
‘‘CHAPTER 102. CARBON BORDER FEE ADJUSTMENT. 
‘‘CHAPTER 101—CARBON FEES 
‘‘Sec. 9901. Definitions. 
‘‘Sec. 9902. Carbon fee. 
‘‘Sec. 9903. Emissions reduction schedule. 
‘‘Sec. 9904. Fee on fluorinated greenhouse gases. 
‘‘Sec. 9905. Decommissioning of Carbon Administration. 
‘‘Sec. 9906. Carbon Capture and Sequestration. 
‘‘Sec. 9907. Administrative authority. 
‘‘SEC. 9901. DEFINITIONS. 
‘‘For purposes of this subtitle: 
‘‘(a) ADMINISTRATOR.—The term ‘Administrator’ 
means the Administrator of the Environmental Protection 
Agency. 
‘‘(b) CARBON DIOXIDE EQUIVALENT OR CO2-E.— 
The term ‘carbon dioxide equivalent’ or ‘CO2-e’ means the 
number of metric tons of carbon dioxide emissions with 
the same global warming potential as one metric ton of 
another greenhouse gas. 
‘‘(c) CARBON-INTENSIVE PRODUCT.—The term ‘car-
bon-intensive product’ means, as identified by the Sec-
retary by rule— 
‘‘(1) any manufactured or agricultural product 
which the Secretary in consultation with the Admin-
istrator determines is emissions-intensive and trade- 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
exposed, except that no covered fuel is a carbon-in-
tensive product, and 
‘‘(2) until such time that the Secretary promul-
gates rules identifying carbon-intensive products, the 
following shall be considered carbon-intensive prod-
ucts: iron, steel, steel mill products (including pipe 
and tube), aluminum, cement, glass (including flat, 
container, and specialty glass and fiberglass), pulp, 
paper, chemicals, or industrial ceramics. 
‘‘(d) CARBON LEAKAGE.—The term ‘carbon leakage’ 
means an increase of global greenhouse gas emissions 
which are substantially due to the relocation of greenhouse 
gas sources from the United States to jurisdictions which 
lack comparable controls upon greenhouse gas emissions. 
‘‘(e) COST OF CARBON OR CARBON COSTS.—The 
term ‘cost of carbon’ or ‘carbon costs’ means a national 
or sub-national government policy which explicitly places 
a price on greenhouse gas pollution and shall be limited 
to either a tax on greenhouse gases or a system of cap- 
and-trade. The cost of carbon is expressed as the price 
per metric ton of CO2-e. 
‘‘(f) COVERED ENTITY.—The term ‘covered entity’ 
means— 
‘‘(1) in the case of crude oil— 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
‘‘(A) a refinery operating in the United 
States, and 
‘‘(B) any importer of any petroleum or pe-
troleum product into the United States, 
‘‘(2) in the case of coal— 
‘‘(A) any coal mining operation in the 
United States, and 
‘‘(B) any importer of coal into the United 
States, 
‘‘(3) in the case of natural gas— 
‘‘(A) any entity entering pipeline quality 
natural gas into the natural gas transmission 
system, and 
‘‘(B) any importer of natural gas into the 
United States, 
‘‘(4) in the case of fluorinated gases any entity 
required to report the emission of a fluorinated gas 
under part 98 of title 40, Code of Federal Regula-
tions, and 
‘‘(5) any entity or class of entities which, as de-
termined by the Secretary, is transporting, selling, 
or otherwise using a covered fuel in a manner which 
emits a greenhouse gas to the atmosphere and which 
has not been covered by the carbon fee, the 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
fluorinated greenhouse gas fee, or the carbon border 
fee adjustment. 
‘‘(g) COVERED
FUEL.—The term ‘covered fuel’ 
means crude oil, natural gas, coal, or any other product 
derived from crude oil, natural gas, or coal which shall 
be used so as to emit greenhouse gases to the atmosphere. 
‘‘(h) CRUDE OIL.—The term ‘crude oil’ means 
unrefined petroleum. 
‘‘(i) EXPORT.—The term ‘export’ means to transport 
a product from within the jurisdiction of the United States 
to persons outside the United States. 
‘‘(j) FLUORINATED GREENHOUSE GAS.—The term 
‘fluorinated greenhouse gas’ means sulfur hexafluoride 
(SF6), nitrogen trifluoride (NF3), and any fluorocarbon 
except for controlled substances as defined in subpart A 
of part 82 of title 40, Code of Federal Regulation, and 
substances with vapor pressures of less than 1 mm of Hg 
absolute at 25 degrees. With these exceptions, ‘fluorinated 
greenhouse gas’ includes but is not limited to any 
hydrofluorocarbon, 
any 
perfluorocarbon, 
any 
fully 
fluorinated linear, branched or cyclic alkane, ether, ter-
tiary amine or aminoether, any perfluoropolyether, and 
any hydrofluoropolyether. 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
‘‘(k) FOSSIL FUEL.—The term ‘fossil fuel’ means 
coal, coal products, petroleum, petroleum products, or nat-
ural gas. 
‘‘(l) FULL FUEL CYCLE GREENHOUSE GAS EMIS-
SIONS.—The term ‘full fuel cycle greenhouse gas emis-
sions’ means the greenhouse gas content of a covered fuel 
plus that covered fuel’s upstream greenhouse gas emis-
sions. 
‘‘(m) GLOBAL WARMING POTENTIAL.—The term 
‘global warming potential’ means the ratio of the time- 
integrated radiative forcing from the instantaneous release 
of one kilogram of a trace substance relative to that of 
one kilogram of carbon dioxide. 
‘‘(n) GREENHOUSE GAS.—The term ‘greenhouse gas’ 
means carbon dioxide (CO2), methane (CH4), nitrous 
oxide 
(N2O), 
sulfur 
hexafluoride 
(SF6), 
hydrofluorocarbons (HFCs), perfluorocarbon (PFCs), and 
other gases as defined by rule of the Administrator. 
‘‘(o) GREENHOUSE
GAS
CONTENT.—The term 
‘greenhouse gas content’ means the amount of greenhouse 
gases, expressed in metric tons of CO2-e, which would be 
emitted to the atmosphere by the use of a covered fuel 
and shall include, nonexclusively, emissions of carbon diox-
ide (CO2), nitrous oxide (N2O), methane (CH4), and other 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
greenhouse gases as identified by rule of the Adminis-
trator. 
‘‘(p) GREENHOUSE GAS EFFECT.—The term ‘green-
house gas effect’ means the adverse effects of greenhouse 
gases on health or welfare caused by the greenhouse gas’s 
heat-trapping potential or its effect on ocean acidification. 
‘‘(q) IMPORT.—Irrespective of any other definition in 
law or treaty, the term ‘import’ means to land on, bring 
into, or introduce into any place subject to the jurisdiction 
of the United States. 
‘‘(r) PETROLEUM.—The term ‘petroleum’ means oil 
removed from the earth or the oil derived from tar sands 
or shale. 
‘‘(s) PRODUCTION GREENHOUSE GAS EMISSIONS.— 
The term ‘production greenhouse gas emissions’ means 
the quantity of greenhouse gases, expressed in metric tons 
of CO2-e, emitted to the atmosphere resulting from, non-
exclusively, the production, manufacture, assembly, trans-
portation, or financing of a product. 
‘‘(t) UPSTREAM GREENHOUSE GAS EMISSIONS.— 
The term ‘upstream greenhouse gas emissions’ means the 
quantity of greenhouse gases, expressed in metric tons of 
CO2-e, emitted to the atmosphere resulting from, non-
exclusively, the extraction, processing, transportation, fi-
nancing, or other preparation of a covered fuel for use. 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
‘‘SEC. 9902. CARBON FEE. 
‘‘(a) CARBON FEE.—There is hereby imposed a car-
bon fee on any covered entity’s emitting use, or sale or 
transfer for an emitting use, of any covered fuel. 
‘‘(b) AMOUNT OF THE CARBON FEE.—The carbon 
fee imposed by this section is an amount equal to— 
‘‘(1) the greenhouse gas content of the covered 
fuel, multiplied by 
‘‘(2) the carbon fee rate. 
‘‘(c) CARBON FEE RATE.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The carbon fee rate, with 
respect to any use, sale, or transfer during a cal-
endar year, shall be— 
‘‘(A) in the case of calendar year 2019, 
$15, and 
‘‘(B) except as provided in paragraph (2), 
in the case of any calendar year thereafter— 
‘‘(i) the carbon fee rate in effect 
under this subsection for the preceding cal-
endar year, plus 
‘‘(ii) $10. 
‘‘(2) EXCEPTIONS.— 
‘‘(A) 
INCREASED
CARBON
FEE
RATE 
AFTER MISSED ANNUAL EMISSIONS REDUCTION 
TARGET.—In the case of any year immediately 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
meanings given such terms under section 
6420(c). 
‘‘(C) OTHER
GREENHOUSE
GASES
EMIS-
SIONS
FROM
AGRICULTURE.—The carbon fee 
shall not be levied upon non-fossil fuel green-
house gas emissions which occur on a farm. 
‘‘(2) 
ARMED
FORCES
OF
THE
UNITED 
STATES.—If any covered fuel or its derivative is 
used by the Armed Forces of the United States as 
supplies for vessels of war, vehicles, or electrical 
power generation equipment, the Secretary shall pay 
(without interest) to the ultimate purchaser of such 
covered fuel or its derivative, the total amount of 
carbon fees previously paid upon that covered fuel or 
its derivative, as specified by rule of the Secretary. 
‘‘SEC. 9903. EMISSIONS REDUCTION SCHEDULE. 
‘‘(a) IN GENERAL.—An emissions reduction schedule 
for greenhouse gas emissions from covered fuels is hereby 
established, as follows: 
‘‘(1) REFERENCE YEAR.—The greenhouse gas 
emissions from covered fuels during the year 2016 
shall be the reference amount of emissions and shall 
be determined from the ‘Inventory of U.S. Green-
house Gas Emissions and Sinks: 1990–2016’ pub-
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
lished by the Environmental Protection Agency in 
April of 2018. 
‘‘(2) EMISSIONS
REDUCTION
TARGET.—The 
first emission reduction target shall be for the year 
2022. The emission target for each year thereafter 
shall be the previous year’s target emissions minus 
a percentage of emissions during the reference year 
determined in accordance with the following table: 
‘‘Year 
Emissions Reduction Target 
2016 
Reference year 
2020 to 2024 
No emissions reduction target 
2025 to 2034 
5 percent of 2016 emissions per year 
2035 to 2050 
2.5 percent of 2016 emissions per year 
‘‘(b) ADMINISTRATIVE DETERMINATION.—Not later 
than 60 days after the beginning of each calendar year 
beginning after the enactment of this section, the Sec-
retary, in consultation with the Administrator, shall deter-
mine whether actual emissions of greenhouse gases from 
covered fuels exceeded the emissions reduction target for 
the preceding calendar year. The Secretary shall make 
such determination using the same greenhouse gas ac-
counting method as was used to determine the greenhouse 
gas emissions in the ‘Inventory of U.S. Greenhouse Gas 
Emissions and Sinks: 1990–2016’ published by the Envi-
ronmental Protection Agency in April of 2018. 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
‘‘SEC. 9904. FEE ON FLUORINATED GREENHOUSE GASES. 
‘‘(a) FLUORINATED GAS FEE.—A fee is hereby im-
posed upon any fluorinated greenhouse gas which is re-
quired to be reported under part 98 of title 40, Code of 
Federal Regulations. 
‘‘(b) AMOUNT.—The fee to be paid by the covered 
entity required to so report shall be an amount equal to— 
‘‘(1) the total amount, in metric tons of CO2- 
e, of emitted fluorinated greenhouse gases (or, in the 
case of a supplier, emissions that would result deter-
mined under the rules of such part), multiplied by 
‘‘(2) an amount equal to 10 percent of the car-
bon fee rate in effect under section 9902(d)(1) for 
the calendar year of such emission. 
‘‘SEC. 9905. DECOMMISSIONING OF CARBON FEE. 
‘‘(a) IN GENERAL.—At such time that— 
‘‘(1) the Secretary determines under 9903(b) 
that actual emissions of greenhouse gases from cov-
ered fuels is not more than 10 percent of the green-
house gas emissions from covered fuels during the 
year 2016, and 
‘‘(2) the monthly carbon dividend payable to an 
adult eligible individual has been less than $20 for 
3 consecutive years, 
the Secretary shall decommission in an orderly manner all 
bureaus and programs associated with administering the 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
carbon fee, the carbon border fee adjustment, and the Car-
bon Dividend Trust Fund. 
‘‘(b) INFLATION ADJUSTMENT.—In the case of any 
calendar year after 2020, the $20 amount under sub-
section (a)(2) shall be increased by an amount equal to— 
‘‘(1) such dollar amount, multiplied by 
‘‘(2) cost-of-living adjustment determined under 
section 1(f)(3) for the calendar year, determined by 
substituting ‘calendar year 2017’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof. 
‘‘SEC. 9906. CARBON CAPTURE AND SEQUESTRATION. 
‘‘(a) IN GENERAL.—The Secretary, in consultation 
with the Administrator and the Secretary of Energy, shall 
prescribe regulations for making payments as provided in 
subsection (b) to qualified facilities which capture and se-
quester qualified carbon dioxide. 
‘‘(b) PAYMENT AMOUNTS.— 
‘‘(1) IN GENERAL.—The Secretary shall make 
payments to a qualified facility in the same manner 
as if such payment was a refund of an overpayment 
of the carbon fee imposed by section 9902, in cases 
in which such qualified facility— 
‘‘(A) uses any covered fuel— 
‘‘(i) with respect to which the carbon 
fee has been paid, and 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
‘‘(ii) which results in the emission of 
qualified carbon dioxide, 
‘‘(B) captures such emitted qualified car-
bon dioxide, and 
‘‘(C)(i) sequesters such qualified carbon di-
oxide in a manner which is safe, permanent, 
and in compliance with any applicable local, 
State, and Federal laws, or 
‘‘(ii) utilizes such qualified carbon dioxide 
in a manner provided in paragraph (3)(C). 
‘‘(2) AMOUNT OF REFUND.—The payment de-
termined under this section shall be an amount 
equal to the lesser of— 
‘‘(A)(i) the adjusted metric tons of quali-
fied carbon dioxide captured and sequestered or 
utilized, multiplied by 
‘‘(ii) the carbon fee rate during the year in 
which the carbon fee was imposed by section 
9902 upon the covered fuel to which such car-
bon dioxide relates, or 
‘‘(B) the amount of the carbon fee imposed 
by section 9902 with respect to such covered 
fuel. 
‘‘(3) DEFINITIONS AND SPECIAL RULES.—For 
purposes of this section— 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
‘‘(A) QUALIFIED CARBON DIOXIDE; QUALI-
FIED FACILITY.— 
‘‘(i) QUALIFIED CARBON DIOXIDE.— 
The term ‘qualified carbon dioxide’ has the 
same meaning given such term under sec-
tion 45Q(b). 
‘‘(ii) QUALIFIED FACILITY.—The term 
‘qualified facility’ means any industrial fa-
cility at which carbon capture equipment is 
placed in service. 
‘‘(B) ADJUSTED TOTAL METRIC TONS.— 
The adjusted total metric tons of qualified car-
bon dioxide captured and sequestered or utilized 
shall be the total metric tons of qualified carbon 
dioxide captured and sequestered or utilized, re-
duced by the amount of any carbon dioxide like-
ly to escape and be emitted into the atmosphere 
due to imperfect storage technology or other-
wise, as determined by the Secretary in con-
sultation with the Administrator. 
‘‘(C) UTILIZATION.—The Secretary, in 
consultation with the Administrator, shall es-
tablish regulations providing for the methods 
and processes by which qualified carbon dioxide 
may be utilized so as to remove that qualified 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
dioxide safely and permanently from the atmos-
phere. Utilization may include the production of 
substances such as but not limited to plastics 
and chemicals. Such regulations shall minimize 
the escape or further emission of the qualified 
carbon dioxide into the atmosphere. 
‘‘(D) SEQUESTRATION.—Not later 540 
days after the date of the enactment of this sec-
tion, the Secretary, in consultation with the Ad-
ministrator, shall prescribe regulations identi-
fying the conditions under which carbon dioxide 
may be safely and permanently sequestered. 
‘‘(4) COORDINATION WITH CREDIT FOR CARBON 
DIOXIDE SEQUESTRATION.—At such time that the 
Secretary prescribes regulations implementing this 
section, no payment under this section shall be al-
lowed to a taxpayer to whom a credit has been al-
lowed for any taxable year under section 45Q. 
‘‘SEC. 9907. ADMINISTRATIVE AUTHORITY. 
‘‘(a) IN GENERAL.—The Secretary in consultation 
with the Administrator shall prescribe such regulations, 
and other guidance, as may be necessary to carry out the 
purposes of this subtitle and assess and collect the carbon 
fee imposed by section 9902 and the fluorinated green-
house gas fee imposed by section 9904. 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
‘‘(b) SPECIFICALLY.—Such regulations and guidance 
shall include— 
‘‘(1) the identification of an effective point in 
the production, distribution, or use of a covered fuel 
or fluorinated greenhouse gas for collecting such car-
bon fee or fluorinated greenhouse gas fee, in such a 
manner so as to minimize administrative burden and 
maximize the extent to which full fuel cycle green-
house 
gas 
emissions 
from 
covered 
fuels 
or 
fluorinated greenhouse gases have the carbon fee or 
fluorinated greenhouse gas fee levied upon them, 
‘‘(2) the identification of covered entities which 
shall be liable for the payment of the carbon fee or 
the fluorinated greenhouse gas fee, 
‘‘(3) requirements for the monthly payment of 
such fees, 
‘‘(4) as may be necessary or convenient, rules 
for distinguishing between different types of covered 
fuels, 
‘‘(5) as may be necessary or convenient, rules 
for distinguishing between a covered fuel’s green-
house gas content and its upstream greenhouse gas 
emissions, 
‘‘(6) rules to ensure that no covered fuel or 
fluorinated greenhouse gas has the carbon fee, 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
fluorinated greenhouse gas fee, or carbon border fee 
adjustment imposed upon it more than once, and 
‘‘(7) rules to ensure that the domestic imple-
mentation of the carbon fee and the fluorinated 
greenhouse gas fee coordinate with the implementa-
tion of the carbon border fee adjustment of chapter 
102. 
‘‘CHAPTER 102—CARBON BORDER FEE 
ADJUSTMENT 
‘‘Sec. 9908. Carbon border fee adjustment. 
‘‘Sec. 9909. Administration of the carbon border fee adjustment. 
‘‘Sec. 9910. Allocation of carbon border fee adjustment revenues. 
‘‘SEC. 9908. CARBON BORDER FEE ADJUSTMENT. 
‘‘(a) IN GENERAL.—The fees imposed by, and re-
funds allowed under, this section shall be referred to as 
‘the carbon border fee adjustment’. 
‘‘(b) PURPOSE.—The purpose of the carbon border 
fee adjustment is to protect animal, plant, and human life 
and health, to conserve exhaustible natural resources by 
preventing carbon leakage, and to facilitate the creation 
of international agreements. 
‘‘(c) IMPORTED COVERED FUELS FEE.—In the case 
of any person that imports into the United States any cov-
ered fuel, there shall be imposed a fee equal to the excess 
(if any) of— 
‘‘(1) an amount equal to— 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
‘‘(A) the amount of full fuel cycle green-
house gas emissions of such fuel, multiplied by 
‘‘(B) the carbon fee rate in effect for the 
year in which such fuel is imported, over 
‘‘(2) the total foreign cost of carbon carried by 
such fuel. 
‘‘(d) 
IMPORTED
CARBON-INTENSIVE
PRODUCTS 
FEE.—In the case of any person that imports into the 
United States any carbon-intensive products, there shall 
be imposed a fee equal to the excess (if any) of— 
‘‘(1) an amount equal to— 
‘‘(A) production greenhouse gas emissions 
of such product, multiplied by 
‘‘(B) the carbon fee rate in effect for the 
year in which the production greenhouse gas 
emissions of such product were emitted into the 
atmosphere, over 
‘‘(2) the total foreign cost of carbon carried by 
such product. 
‘‘(e) 
REFUND
ON
EXPORTS
FROM
UNITED 
STATES.— 
‘‘(1) CARBON-INTENSIVE
PRODUCTS.—Under 
regulations prescribed by the Secretary, there shall 
be allowed a credit or refund (without interest) to 
exporters of carbon-intensive products manufactured 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
or produced in the United States an amount equal 
to the excess (if any) of— 
‘‘(A) an amount equal to— 
‘‘(i) the production greenhouse gas 
emissions of the exported carbon-intensive 
product, multiplied by 
‘‘(ii) the carbon fee rate during the 
year in which the carbon fee or fluorinated 
greenhouse gas fee was paid upon the pro-
duction greenhouse gas emissions of the 
exported carbon-intensive product, over 
‘‘(B) any total cost of carbon to be levied 
upon the carbon-intensive product by any juris-
diction to which the carbon-intensive product is 
to be imported. 
Any such credit or refund shall be allowed in the 
same manner as if it were an overpayment of the fee 
imposed by section 9902 or 9904. The Secretary 
shall establish fair, timely, impartial, and as nec-
essary confidential procedures by which any exporter 
of any product from the United States may petition 
the Secretary to include that exported product on 
the list of carbon-intensive products. 
‘‘(2) COVERED FUELS.—Under regulations pre-
scribed by the Secretary, in the case of a covered 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
fuel produced in the United States with respect to 
which the fee under section 9902 was paid, there 
shall be allowed as a credit or refund (without inter-
est) to any exporter of such covered fuels an amount 
equal to the excess (if any) of— 
‘‘(A) an amount equal to— 
‘‘(i) the full fuel cycle greenhouse gas 
emissions of the covered fuel, multiplied by 
‘‘(ii) the carbon fee rate at the time 
the carbon fee was paid upon the full fuel 
cycle greenhouse gas emissions of the ex-
ported covered fuel, over 
‘‘(B) any total cost of carbon to be levied 
upon the covered fuel by a jurisdiction to which 
the carbon-intensive product is to be imported. 
Any such credit or refund shall be allowed in the 
same manner as if it were an overpayment of tax 
imposed by section 9902. 
‘‘(f) DEFINITIONS.—For purposes of this section— 
‘‘(1) FOREIGN COST OF CARBON; FOREIGN CAR-
BON COSTS.—The term ‘foreign cost of carbon’ or 
‘foreign carbon cost’ means the cost of any laws of 
a foreign jurisdiction which impose a system of cap- 
and-trade with respect to, or a tax or fee on, green-
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
house gas. Such cost shall be determined and ex-
pressed as a price per metric ton of CO2-e. 
‘‘(2) TOTAL COST OF CARBON CARRIED.—The 
term ‘total cost of carbon carried’ means an amount 
equal to— 
‘‘(A) the production greenhouse gas emis-
sions of a carbon-intensive product or the full 
fuel cycle greenhouse gas emissions of a covered 
fuel, multiplied by 
‘‘(B) the cost of carbon with respect to 
such product or fuel, reduced by any amount 
refunded with respect to such product or fuel 
by a foreign jurisdiction. 
The total cost of carbon carried shall be expressed 
as price in United States dollars. 
‘‘(3) TOTAL FOREIGN COST OF CARBON CAR-
RIED.—The term ‘total foreign cost of carbon car-
ried’ means an amount equal to— 
‘‘(A) the production greenhouse gas emis-
sions of a carbon-intensive product, or the full 
fuel cycle greenhouse gas emissions of a covered 
fuel, multiplied by 
‘‘(B) the foreign cost of carbon with re-
spect to such product or fuel, reduced by the 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
amount refunded with respect to such product 
or fuel by a foreign jurisdiction. 
The total foreign cost of carbon carried shall be ex-
pressed as price in United States dollars. 
‘‘SEC. 9909. ADMINISTRATION OF THE CARBON BORDER 
FEE ADJUSTMENT. 
‘‘(a) GENERALLY.—The Secretary in consultation 
with the Administrator shall prescribe regulations and 
guidance which implement the carbon border fee adjust-
ment under section 9908. 
‘‘(b) COLLABORATION.—In determining the produc-
tion greenhouse gas emissions of an imported carbon-in-
tensive product, the upstream greenhouse gas emissions 
of an imported covered fuel, the full fuel cycle greenhouse 
gas emissions of an imported covered fuel, or the foreign 
cost of carbon, or otherwise administering the carbon bor-
der fee adjustment, it is the sense of Congress that the 
Secretary should collaborate with authorized officers of 
any jurisdiction, including sub-national governments, af-
fected by the carbon border fee adjustment. 
‘‘(c) METHODOLOGY.—In determining the production 
greenhouse gas emissions of an imported carbon-intensive 
product, the upstream greenhouse gas emissions of an im-
ported covered fuel, the full fuel cycle greenhouse gas 
emissions of an imported covered fuel, or the foreign cost 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
of carbon, the Secretary shall use reliable methodologies, 
which— 
‘‘(1) as may be necessary or convenient— 
‘‘(A) distinguish between different types of 
covered fuels, 
‘‘(B) distinguish between a covered fuel’s 
greenhouse gas content and that covered fuel’s 
upstream greenhouse gas emissions, 
‘‘(C) distinguish between the different 
types of greenhouse gas emissions which com-
pose a covered fuel’s upstream greenhouse gas 
emissions or greenhouse gas content, as well as 
the various processes which produced those 
emissions, and 
‘‘(D) distinguish between the different 
types of greenhouse gas emissions which com-
pose a carbon-intensive product’s production 
greenhouse gas emissions, as well as the various 
processes which produced those emissions, 
‘‘(2) ensure that no covered fuel, covered 
fluorinated greenhouse gas, or carbon-intensive prod-
uct has the carbon fee, the fluorinated greenhouse 
gas fee, or the border fee adjustment imposed upon 
it more than once, 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
‘‘(3) ensure that the implementation of the bor-
der carbon adjustment aligns with the carbon fee 
and the fluorinated gas fee, 
‘‘(4) in the case of incomplete data, rely upon 
the best available methodologies for interpolating 
data gaps, and 
‘‘(5) are consistent with international treaties 
and agreements. 
‘‘(d) SCHEDULE.—The Secretary shall determine— 
‘‘(1) not later than 3 years after the date of the 
enactment of this section, the production greenhouse 
gas emissions of imported carbon-intensive products, 
‘‘(2) not later than 180 days after the date of 
the enactment of this section, the full fuel cycle 
greenhouse gas emissions and the upstream green-
house gas emissions of every imported covered fuel, 
and 
‘‘(3) not later than 3 years after the date of the 
enactment of this section, the foreign cost of carbon 
in all jurisdictions. 
‘‘(e) PROCEDURE.—The Secretary shall establish 
fair, timely, impartial, and as necessary confidential proce-
dures by which the importer of any carbon-intensive prod-
uct or any covered fuel may petition the Secretary to re-
vise the Secretary’s determination of the production green-
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
house gas emissions, full fuel cycle greenhouse gas emis-
sions, or upstream greenhouse gas emissions of that im-
porter’s imported covered fuel or imported carbon-inten-
sive product, or the foreign cost of carbon carried by that 
importer’s imported carbon-intensive product. 
‘‘(f) SHIPMENTS FROM THE UNITED STATES TO THE 
TERRITORIES
OF
THE
UNITED
STATES.—Notwith-
standing any other treaty, law, or policy, shipments of cov-
ered fuels or carbon-intensive products from the United 
States to Guam, the United States Virgin Islands, Samoa, 
Puerto Rico, and the Northern Mariana Islands shall be 
eligible for a refund of the carbon fee under section 
9908(e). 
‘‘(g) IMPORTS TO THE TERRITORIES OF THE UNITED 
STATES.—Notwithstanding any other treaty, law, or pol-
icy, imports of covered fuels or carbon-intensive products 
to Guam, the United States Virgin Islands, Samoa, Puerto 
Rico, and the Northern Mariana Islands shall not be sub-
ject to Section 9908(c) or 9908(d).’’ 
‘‘SEC. 9910. ALLOCATION OF CARBON BORDER FEE ADJUST-
MENT REVENUES. 
‘‘The revenues collected under this chapter may be 
used to supplement appropriations made available in fiscal 
years 2020 and thereafter— 
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
‘‘(1) to U.S. Customs and Border Protection, in 
such amounts as are necessary to administer the 
carbon border fee adjustment, then 
‘‘(2) to the Department of Treasury, in such 
amounts as are necessary to allow refunds under 
section 9908(e) to exporters of carbon-intensive 
products and exporters of covered fuels.’’. 
(b) COORDINATION WITH CARBON OXIDE SEQUES-
TRATION CREDIT.—Section 45Q(f) is amended by adding 
at the end the following new paragraph: 
‘‘(8) COORDINATION
WITH
CARBON
CAPTURE 
AND SEQUESTRATION PAYMENTS.—No credit shall 
be allowed under this section to a taxpayer which 
has received any payment under section 9906.’’. 
(c) TREATIES
AND
INTERNATIONAL
NEGOTIA-
TIONS.— 
(1) 
CONFORMANCE
WITH
INTERNATIONAL 
TREATIES.—In the case that the Appellate Body of 
the World Trade Organization, or any other authori-
tative international treaty interpreter, shall find any 
portion of the carbon border fee adjustment under 
chapter 102 of the Internal Revenue Code of 1986 
to violate any treaty to which the United States is 
a party, the Secretary of the Treasury is authorized 
to alter any aspect of such carbon border fee adjust-
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00029
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS
ment so as to bring the carbon border fee adjust-
ment into conformance with international law. 
(2) INTERNATIONAL NEGOTIATIONS.—The Con-
gress finds the international mitigation of green-
house gas emissions to be of national importance. 
Therefore, the Congress encourages the Secretary of 
State, or the Secretary’s designee, to commence and 
complete negotiations with other nations with the 
goal of forming treaties, environmental agreements, 
accords, partnerships or any other instrument that 
effectively reduces global greenhouse gas emissions 
to 10 percent of 2016 levels by 2050 and which re-
spect the principle of common but differentiated re-
sponsibilities and respective capabilities. 
(3) SUSPENSION OF THE CARBON BORDER FEE 
ADJUSTMENT.—Any part of the carbon border fee 
adjustment shall be suspended, in whole or in 
part,— 
(A) by treaty or other international agree-
ment which includes provisions for the suspen-
sion of the carbon border fee adjustment, in 
whole or in part, with any party signatory to 
the treaty or other international agreement, or 
(B) by a finding of the Secretary that a ju-
risdiction of importation has implemented poli-
VerDate Sep 11 2014 
22:19 Feb 05, 2019
Jkt 089200
PO 00000
Frm 00030
Fmt 6652
Sfmt 6201
E:\BILLS\H763.IH
H763
pbinns on DSK79D2C42PROD with BILLS