Title: Consumers REBATE Act
Policy area: Taxation

Summary:
Consumers Rebate to ban Emissions and Boost AlTernative Energy Act or the Consumers REBATE Act
This bill imposes an excise tax on the carbon dioxide content of coal, oil, and natural gas. The tax must be paid by the producer, miner, or importer of the taxable carbon substance and does not apply to exports of the substances.
Beginning in 2021, the tax rate is $25 per ton of carbon dioxide content of the life-cycle emissions from the taxable carbon substance. After 2021, the tax increases by $10 each year and does not apply if specified emissions reduction benchmarks have been attained.
The bill also includes provisions that require certain fees or refunds for taxable carbon substances that are exported or imported.
Funds equivalent to the revenues received from the tax must be transferred to a Carbon Trust Fund established by this bill. The funds must be used, as provided by appropriations Acts, to offset reductions in individual income tax rates, pay quarterly dividends to certain individuals with valid Social Security numbers; and for specified worker transition assistance, energy, research, and infrastructure priorities.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8175 Introduced in House (IH)]

<DOC>






116th CONGRESS
  2d Session
                                H. R. 8175

 To amend the Internal Revenue Code of 1986 to impose a tax on fossil 
          fuels and to use the revenues for economic benefit.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 4, 2020

 Mr. McNerney introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committees on 
    Education and Labor, Science, Space, and Technology, Energy and 
  Commerce, and Transportation and Infrastructure, 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 impose a tax on fossil 
          fuels and to use the revenues for economic benefit.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumers Rebate to ban Emissions 
and Boost AlTernative Energy Act'' or the ``Consumers REBATE Act''.

SEC. 2. EXCISE TAX ON CARBON DIOXIDE CONTENT OF COAL, OIL, AND NATURAL 
              GAS.

    (a) In General.--The Internal Revenue Code of 1986 is amended by 
adding at the end the following:

   ``Subtitle L--Carbon Dioxide Content of Coal, Oil, and Natural Gas

``Sec. 9901. Imposition of tax.
``Sec. 9902. Carbon equivalency fee.
``Sec. 9903. Definitions.
``Sec. 9904. Special rules.

``SEC. 9901. IMPOSITION OF TAX.

    ``(a) In General.--There is hereby imposed a tax on producing at 
the wellhead or mine in the United States, or importing, a taxable 
carbon substance.
    ``(b) Rate of Tax.--
            ``(1) In general.--The tax imposed under subsection (a) 
        shall be the applicable amount per metric ton of carbon dioxide 
        content of the life-cycle emissions from the taxable carbon 
        substance.
            ``(2) Applicable amount.--For purposes of paragraph (1)--
                    ``(A) In general.--For calendar year 2021, the term 
                `applicable amount' means $25.
                    ``(B) Annual adjustments generally.--In the case of 
                any taxable year beginning in a calendar year after 
                2021, the dollar amount in effect under subparagraph 
                (A) for the preceding calendar shall be increased by 
                $10.
            ``(3) Zero rate if emission reduction benchmark attained.--
                    ``(A) In general.--If the Administrator determines 
                and specifies in a report issued under subsection 
                (c)(3)(A) in the year immediately preceding a year 
                specified in subsection (c)(1)(A) that the emissions 
                reduction benchmark for that specified year will be met 
                or exceeded, then for that specified year and the 
                succeeding 4 calendar years--
                            ``(i) paragraph (2) shall not apply, and
                            ``(ii) the applicable amount shall be zero.
                    ``(B) Reinstatement.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), for any calendar year after a 
                        period referred to in subparagraph (A), 
                        paragraph (2) shall be applied and the 
                        applicable amount for the first such calendar 
                        year shall be the dollar amount in effect for 
                        the calendar year preceding the beginning of 
                        such period.
                            ``(ii) Exception.--Clause (i) shall not 
                        apply to a calendar year if, with respect to 
                        that calendar year, a determination described 
                        in subparagraph (A) applies to that calendar 
                        year.
    ``(c) Emissions Reductions Benchmarks.--For purposes of this 
section--
            ``(1) In general.--The emissions reduction benchmarks are 
        as follows:
                    ``(A) 30 percent below the emissions benchmark by 
                2025.
                    ``(B) 40 percent below the emissions benchmark by 
                2030.
                    ``(C) 50 percent below the emissions benchmark by 
                2035.
                    ``(D) 70 percent below the emissions benchmark by 
                2045.
                    ``(E) 80 percent below the emissions benchmark by 
                2050.
            ``(2) Emissions benchmark.--The emissions benchmark is the 
        2005 level of life-cycle emissions from the taxable carbon 
        substances, as determined by the Administrator.
            ``(3) Reports.--
                    ``(A) Emissions reductions target report.--Not 
                later than 2 years after the date of enactment of the 
                Consumers Rebate to ban Emissions and Boost AlTernative 
                Energy Act, and every 2 years thereafter, the 
                Administrator shall issue an emissions reduction 
                benchmarks report. The report shall include, in detail, 
                the emission reductions resulting from the imposition 
                of tax under this section and the expected trajectory 
                of emissions reductions.
                    ``(B) 5-year report.--The Administrator shall, 
                after consultation with other appropriate Federal and 
                State agencies and non-Federal stakeholders, issue a 
                report every 5 years on the effects of the carbon tax 
                established under this subtitle, including energy 
                market conditions, impacts to consumers, impacts to the 
                environment, actual emission reductions, and 
                reliability and resiliency of the electric grid.
    ``(d) By Whom Paid.--The tax imposed by subsection (a) shall be 
paid by the producer, miner, or importer of the taxable carbon 
substance.
    ``(e) Regulations.--Not later than 2 years after the date of 
enactment of the Consumers Rebate to ban Emissions and Boost 
AlTernative Energy Act, the Secretary shall issue such regulations as 
may be necessary or appropriate to carry out this subtitle.

``SEC. 9902. CARBON EQUIVALENCY FEE.

    ``(a) Purpose.--The purpose of this section is to ensure the 
environmental effectiveness of this subtitle.
    ``(b) Imports.--The Secretary, in consultation with the Secretary 
of Energy, the Administrator, and the Commissioner of the U.S. Customs 
and Border Protection, shall impose carbon equivalency fees on imports 
of goods containing or produced using a taxable carbon substance. The 
amount of the carbon equivalency fee with respect to the import of any 
good shall be equal to the cost that domestic producers of a comparable 
good incur as a result of--
            ``(1) the tax imposed under section 9901, and
            ``(2) carbon equivalency fees imposed under this section on 
        any goods used in the production of such good.
    ``(c) Collection.--The fees imposed under this section shall be 
collected by the Commissioner of the U.S. Customs and Border 
Protection.
    ``(d) Expiration.--This section shall cease to have effect at such 
time as and to the extent that--
            ``(1) an international agreement requiring countries that 
        emit carbon dioxide or produce goods containing or using 
        taxable carbon substances to adopt equivalent measures comes 
        into effect, or
            ``(2) the country of export has implemented equivalent 
        measures, as determined by the Secretary, in consultation with 
        the Secretary of State.

``SEC. 9903. DEFINITIONS.

    ``For purposes of this subtitle--
            ``(1) Taxable carbon substance.--The term `taxable carbon 
        substance' means--
                    ``(A) coal,
                    ``(B) oil, and
                    ``(C) natural gas.
            ``(2) Coal.--The term `coal' includes lignite, anthracite, 
        bituminous, subbituminous, peat or other forms of what is 
        commonly referred to as coal produced from a mine.
            ``(3) Oil.--The term `oil' includes crude oil condensates, 
        natural gasoline, shale oil, any bitumen or bituminous mixture, 
        any oil derived from a bitumen or bituminous mixture, and any 
        oil derived from kerogen-bearing sources.
            ``(4) Natural gas.--The term `natural gas' means either 
        natural gas unmixed, or any mixture of natural and artificial 
        gas.
            ``(5) Life-cycle emissions.--The term `life-cycle 
        emissions' means total life-cycle emissions of carbon dioxide 
        from a taxable carbon substance which shall be determined by 
        the Administrator.
            ``(6) Administrator.--The term `Administrator' means the 
        Administrator of the Environmental Protection Agency.
            ``(7) United states.--The term `United States' means the 
        States, and territory or possession of the United States, and 
        the District of Columbia.

``SEC. 9904. SPECIAL RULES.

    ``(a) Export.--For purposes of this subtitle--
            ``(1) In general.--No tax shall be imposed under section 
        9901 on the production or mining of a taxable carbon substance 
        which is intended for export, including the sale or resale by a 
        purchaser to a second purchaser for export.
            ``(2) Proof of export required.--Rules similar to the rules 
        of section 4221(b) shall apply for purposes of paragraph (1).
            ``(3) Credit or refund where tax paid.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), if--
                            ``(i) tax under section 9901 was paid with 
                        respect to any taxable carbon substance, 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 
                        substance which was exported by any person and 
                        which, at the time of export, was a taxable 
                        carbon substance (as defined in section 
                        9902(1)),
                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 exported 
                        the taxable chemical or taxable substance (as 
                        so defined), or
                            ``(ii) has obtained the written consent of 
                        such exporter to the allowance of the credit or 
                        the making of the refund.
            ``(4) Refunds directly to exporter.--The Secretary shall 
        provide, in regulations, the circumstances under which a credit 
        or refund (without interest) of the tax under section 9901 
        shall be allowed or made to the person who exported the taxable 
        carbon substance, where--
                    ``(A) the person who paid the tax waives his claim 
                to the amount of such credit or refund, and
                    ``(B) the person exporting the taxable carbon 
                substance provides such information as the Secretary 
                may require in such regulations.
            ``(5) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary to carry out the purposes of 
        this subsection.''.
    (b) Establishment of Trust Fund.--
            (1) In general.--Subchapter A of chapter 98 of such Code 
        (relating to trust fund code) is amended by adding at the end 
        the following:

``SEC. 9512. CARBON TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Carbon Trust 
Fund' (referred to in this section as the `Trust Fund'), consisting of 
such amounts as may be appropriated or credited to the Trust Fund as 
provided in this section or section 9602(b).
    ``(b) Transfers to Trust Fund.--There is hereby appropriated to the 
Trust Fund an amount equivalent to the amounts received in the Treasury 
pursuant to section 9901.
    ``(c) Expenditures From Trust Fund.--
            ``(1) In general.--From amounts in the Trust Fund at the 
        beginning of a fiscal year, the following amounts shall be made 
        available as follows:
                    ``(A) The amount necessary shall be paid into 
                general receipts in the Treasury to offset a reduction 
                in the rate of individual income tax by reason of the 
                amendments made by section 2(c) of the Consumers Rebate 
                to ban Emissions and Boost AlTernative Energy Act.
                    ``(B) Of the amounts remaining available after the 
                application of subparagraph (A), 20 percent shall be 
                available for the following:
                            ``(i) Worker transition assistance, with an 
                        emphasis on coal workers and coal communities, 
                        and workforce development.
                            ``(ii) Rural energy assistance and 
                        efficiency improvements.
                            ``(iii) Technology neutral, energy-related 
                        research and development.
                            ``(iv) Air, rail, and marine transportation 
                        emissions reduction and efficiency programs.
                            ``(v) Electric grid and pipeline 
                        innovations and improvements.
                            ``(vi) Increasing resiliency of water, 
                        transportation, energy, and other 
                        infrastructure that are vulnerable to extreme 
                        weather and other effects of a changing 
                        climate.
                            ``(vii) Energy efficiency and conservation.
                    ``(C) The amounts remaining after the application 
                of subparagraphs (A) and (B) shall be made available 
                for quarterly citizen rebates.
            ``(2) Consultation.--In determining the amount provided 
        toward each category referred to in paragraph (1)(B), the 
        Secretary shall consult with the Secretary of Energy, the 
        Secretary of Labor, and any other relevant Federal agency prior 
        to distributing money from the Trust Fund.''.
            (2) Clerical amendment.--The table of sections for 
        subchapter A of chapter 98 of such Code is amended by adding at 
        the end the following new item:

``Sec. 9512. Carbon trust fund.''.
    (c) Reduction in Individual Income Tax Rates.--
            (1) In general.--Section 1(j) of such Code is amended by 
        redesignating paragraph (6) as paragraph (7) and by inserting 
        after paragraph (5) the following:
            ``(6) Reduction in individual income tax rates.--In the 
        case of taxable years beginning after December 31, 2021, the 
        tables under paragraph (2) shall be applied--
                    ``(A) by substituting `9%' for `10%' each place it 
                appears,
                    ``(B) by substituting `11%' for `12%' each place it 
                appears,
                    ``(C) by substituting `21%' for `22%' each place it 
                appears, and
                    ``(D) by substituting `23.5%' for `24%' each place 
                it appears.''.
            (2) Coordination among provisions relating to children with 
        unearned income.--Clauses (i)(II) and (III) of section 
        1(j)(4)(B) of such Code are amended by striking ``paragraph 
        (3)'' and inserting ``paragraphs (3) and (6)''.
    (d) Quarterly Citizen Rebates.--
            (1) Quarterly payments to eligible dividend recipients.--
                    (A) In general.--From amounts made available 
                pursuant to section 9512(c)(1)(C) of the Internal 
                Revenue Code of 1986, the Secretary shall make payment 
                each calendar quarter to each eligible dividend 
                recipient.
                    (B) Amount of payment.--For purposes of 
                subparagraph (A), the amount of each payment with 
                respect to an eligible dividend recipient shall be the 
                amount determined by the Secretary by dividing--
                            (i) for the years 2022 through 2030--
                                    (I) the total amount available 
                                under section 9512(c)(1)(C) of the 
                                Internal Revenue Code of 1986 for the 
                                preceding calendar quarter, by
                                    (II) the total number of eligible 
                                dividend recipients for such preceding 
                                calendar quarter, and
                            (ii) for year 2031 and subsequent years--
                                    (I) the smaller of--
                                            (aa) the quarterly average 
                                        of the total amount available 
                                        under section 9512(c)(1)(C) of 
                                        the Internal Revenue Code of 
                                        1986 for the four quarters of 
                                        2030, and
                                            (bb) the total amount 
                                        available under section 
                                        9512(c)(1)(C) of the Internal 
                                        Revenue Code of 1986 for the 
                                        preceding calendar quarter, by
                                    (II) the total number of eligible 
                                dividend recipients for such preceding 
                                calendar quarter.
                    (C) Eligible dividend recipient.--For purposes of 
                this subsection, the term ``eligible dividend 
                recipient'' means, with respect to any quarter, any 
                individual with a valid social security number (other 
                than a nonresident undocumented individual) who is 
                lawfully present in the United States for such quarter, 
                as determined and verified by the Secretary in 
                consultation with any other Federal entity the 
                Secretary determines appropriate.
                    (D) Fund.--The term ``Fund'' means the Carbon Trust 
                Fund established by section 9512 of the Internal 
                Revenue Code of 1986 (as added by subsection (e)).
            (2) Regulations.--The Secretary of the Treasury shall 
        promulgate regulations governing the payment of funds under 
        paragraph (1), including--
                    (A) procedures for the identification and 
                maintenance of an accurate list of eligible dividend 
                recipients, and
                    (B) the use of electronic means for transfers of 
                funds, to the maximum extent practicable.
    (e) Clerical Amendment.--The table of subtitles for the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
item:

 ``Subtitle L. Carbon Dioxide Content of Coal, Oil, and Natural Gas.''.

    (f) Effective Date.--
            (1) Except as provided by paragraph (2), the amendments 
        made by this section shall take effect on January 1, 2022.
            (2) The amendments made by subsection (c) shall apply to 
        taxable years beginning after December 31, 2021.
                                 <all>