HomeMy WebLinkAboutStaff Report 4.D 05/06/2019LU`�^
aw '�
xs�$
DATE: 5/6/19
M
FROM:
SUBJECT
Honorable Mayor and Members of the City Council
Peggy Flynn, City Manager'' __
Eric Danly, City Attorney
Agenda Item #4.D
Consideration and Possible Adoption of Resolution Urging Enactment of H.R.
763, the Energy Innovation and Carbon Dividend Act of 2019
RECOMMENDATION
It is recommended that the City Council consider and possibly adopt the attached Resolution
urging enactment of H.R. 763, the Energy Innovation and Carbon Dividend Act of 2019.
BACKGROUND
The issue of climate change and related issues such as sustainable practices regarding air quality,
development, energy use, transit and transportation, waste management, etc., continues to figure
prominently in policy discussions of the Petaluma City Council. At the April 15, 2019 City
Council meeting, community members Bruce Hagen and Bob Fabian urged the City Council to
promote greenhouse gas emission reduction in the form of endorsing H.R. 763, the Energy
Innovation and Carbon Dividend Act of 2019. Also on April 15, Councilmember Dave King
requested that this item be agendized for Council consideration. The purpose of this agenda
item is to provide the Council the opportunity to consider a resolution to support the adoption of
FIR, 763.
DISCUSSION
Previously, on November 20, 2017, the City Council unanimously voted to adopt Resolution
2017-171 N.C.S. urging the U. S. Congress to enact a revenue -neutral carbon fee and dividend
program. A copy of Resolution 2017-171 N.C.S and the accompanying staff report are attached.
The staff report for Resolution 2017-171 N.C.S. noted that in 2005, the City of Petaluma joined
the other nine Sonoma County local governments in setting a mutual greenhouse gas target to
reduce emissions to 25% below 1990 levels by 2016, one of the most aggressive greenhouse gas
reduction goals in the country, and that since that time, the City has adopted and implemented
numerous policies and programs aimed at reducing greenhouse gas emissions.
The staff report for Resolution 2017-171 N.C.S. listed the following features of the proposed
Carbon Fee and Dividend Program:
• A fee of $15 per ton of CO2 initially, increasing at least $10 per year on fossil fuels and
other green house gases at the point they first enter the economy
• Fee collection by the U.S. Treasury Department for placement in a Carbon Fees Trust
Fund for rebate to U.S. households
• Import tariffs on products imported from countries without carbon fees
• Monthly dividend payments to U.S. households of 100% of the carbon fees collected, less
administrative costs, to offset increased energy costs
The staff report for Resolution 2017-171 N.C.S. also noted that according to a 2013 study by
Regional Economic Models, Inc., the proposed Carbon Fee and Dividend Program would reduce
CO2 emissions 52% below 1990 levels in 20 years while providing an economic stimulus that
adds 2.8 million jobs and prevents over 230,00 premature deaths by improving air quality.
H.R. 763, the Energy Innovation and Carbon Dividend Act of 2019 includes similar provisions
to those proposed as part of the Carbon Fee and Dividend Program supported by Resolution
2017-171 N.C.S. If adopted, H.R. 763 would:
• Impose a fee on the carbon content of fuels, including crude oil, natural gas, coal or any
other product derived from them that will cause greenhouse gases to be emitted into the
atmosphere
• Impose the carbon fee on producers or importers of the fuels and equal the greenhouse
gas content of the fuel multiplied by the carbon fee rate
• Set the initial carbon fee at $15 in 2019 and increase the fee by $10 each year subject to
further adjustments based on the progress in meeting specified emissions reduction target.
• Impose a fee on fluorinated greenhouse gases
• Include exemptions for fuels used for agricultural or non -emitting purposes, and fuels
used by the armed forces
• Provide rebates for facilities that capture and sequester carbon dioxide
• Establish fees or refunds for carbon -intensive products that are exported or imported
• Require deposit of fee proceeds into a Carbon Dividend Trust Fund for payment of
administrative expenses and dividend payments to U.S. citizens and lawful residents
• Require decommissioning of fees when emission levels and monthly dividend payments
fall below specified levels
• Suspend certain regulations that limit greenhouse gas emissions, and also provide that the
suspensions expire if emissions targets are not reached after a specified time period
A summary of H.R. 763 and the text of the bill are attached, as is Frequently Asked Question
information posted at: littt-ss:/levict-�;,viiiiiov,,itiorl,,ic:t,or,-,/Il w -it -works/, which is a website
maintained by Citizens Climate Lobby, a not-for-profit organization that advocates for bipartisan
climate solutions in Congress. Included in the Citizens climate lobby FAQ information is the
following regarding the impact H.R. 763 would have on retail energy costs:
There are sorne forms of
a rule of thumb, each $ 10 per inetri c ton carbon fee would add about I 10 to
of coal -generated electricity. Energy costs are also embedded in most products
and services we consume, so those would increase in price depending on carbon
footprint, ranging from 0.2 percent for a TV to 1.1 percent for an airplane ticket
(for each $1 0/metric ton increase).
FINANCIAL IMPACTS
The only financial impacts of Council action urging passage of H. R. 763 are staff time involved
in preparing the action.
ATTACHMENTS
1. Resolution urging passage of H.R. 763
2. Resolution 2017-171 N.C.S. and accompanying staff report
3. Summary and text of H.R. 763
4. FAQ re H.R. 763 from the Citizens Climate Lobby
Attachment 1
RESOLUTION NO. 2019- N.C.S. OF THE CITY COUNCIL OF THE CITY OF
PETALUMA URGING PASSAGE OF H.R. 763, THE ENERGY INNOVATION AND
CARBON DIVIDEND ACT OF 2019
WHEREAS, U.S. Representative Theodore Deutch of Florida has introduced on January
1, 2014 H.R. 763, the Energy Innovation and Carbon Dividend Act of 2019 ("the Act"); and
WHEREAS, the Act would:
• Impose a fee on the carbon content of fuels, including crude oil, natural gas, coal or any
other product derived from them that will be used so as to emit greenhouse gases into the
atmosphere
• Impose the carbon fee on producers or importers of the fuels and equal the greenhouse
gas content of the fuel multiplied by the carbon fee rate
• Set the initial carbon fee at $15 in 2019 and increase the fee by $10 each year subject to
further adjustments based on the progress in meeting specified emissions reduction
targets
• Impose a fee on fluorinated greenhouse gases
• Include exemptions for fuels used for agricultural or non -emitting purposes, and fuels
used by the armed forces
• Provide rebates for facilities that capture and sequester carbon dioxide
• Establish fees or refunds for carbon -intensive products that are exported or imported
• Require deposit of fee proceeds into a Carbon Dividend Trust Fund for payment of
administrative expenses and dividend payments to U.S. citizens and lawful residents
• Require decommissioning of fees when emission levels and monthly dividend payments
fall below specified levels
• Suspend certain regulations that limit greenhouse gas emissions, and also provide that the
suspensions expire if emissions targets are not reached after a specified time period; and
WHEREAS, on November 20, 2017, the City Council by a unanimous vote adopted
Resolution 2017-171 N.C.S. urging the United States Congress to enact a revenue -neutral carbon
fee and dividend program; and
WHEREAS, H.R. 763, the Energy Innovation and Carbon Dividend Act of 2019
includes provisions similar to those proposed as part of the Carbon Fee and Dividend Program
supported by Resolution 2017-171 N.C.S.; and
WHEREAS, the City of Petaluma has joined the other 9 Sonoma County local
governments in setting a mutual greenhouse gas target to reduce emissions to 25% below 1990
levels by 2016, one of the most aggressive greenhouse gas reduction goals in the country, and
since that time, the City has adopted and implemented numerous policies and programs aimed at
reducing greenhouse gas emissions; and
WHEREAS, enactment of H.R. 763 would encourage market-driven innovation of clean
energy technologies and market efficiencies that would reduce harmful pollution and leave a
healthier, more stable, and prosperous nation for future generations; and
WHEREAS, in urging passage of H.R. 763 the City Council is acting consistently with
its commitment along with the other 9 Sonoma County local governments to reduce greenhouse
gas emissions;
NOW, THEREFORE, the City Council of the City of Petaluma does hereby urge
Senator Diane Feinstein and Representative Jared Huffman, whose districts include Petaluma, to
support and to urge their colleagues in the Senate and the House to support passage of H.R. 763.
DATP: November 20, 2017
TO: Honorable Mayor and.Merrhers of the City Council tbrot.igh City l"4!I-atic3 ca
FROM Scott Duiven, Senior Plamier
Resolution Urging the Unlltd States Congress to Eracta Revenue-Ne-Litral Carbon
Fee a n -d Diiidond Program
RECOMMENDATION
It is recoini-nended that the City Council actopt the attached Resolution Urging the United States
Congress to Enact a Revenue -Neutral Carbon Fee and Dividend Prograin,
-H&CKGROUND
I I fins been well doc-arnented that cliniato ch-ange caused by global Warming-rolated grecii1iouse
gas emissions, 0-icluding CO2, is already leading to large-scale problems incl-ndiTip occan,
acidification and rising sea levels, niore frequent, extrerno and damaging weather event 4'
LD - s such as
heat waves, storms., heavy rainfall and flooding, and droughts; niore frequent and intense
Wildfires; dislupted, ecosystems afl.'ecting biodiversity and Food production; and all increase in
beat-rclated deaths, In 2005, the City of -Petajujjj�j jom'ed the other 9 local governments-�vitlihi
Sonorna, County and set a mutuall grCUIII0uSe gas tai -get to reduce en'lissions to 25 percent below
1990 levels by 2015, one of the most ag ressive in the country. Since then, Petaluma has adopted
and impleinelited 11-unicro-us policies and pi:ograrrLs aiined at reducing gretribouse gas cmissions,
Tbe Citizen's Cliniatc Lobby is a non-profit, non-partisa-ii, grassroots advocacy group focused on
national policies to addressolimate change with over 400 local cbal)lersincluding Santa Rosa.
The Climate Lobby is advocating I -or as Revenue -Neutral Carbon Fee and Dividend
Piogfaiu. Ancy Fergason:, aPetaluma resident, presen ted this proposal to the City Cotuicil during
public conurient on October 16, 2017 and Ibe Cmincil asked that this item be brought forward on
a fature agenda.
DISCUSSION
The Carbon Fee 'ind Diviciciad Pfograni proposes a steadily rising fee sari f()ssil heels, initially at
$15/ton or CO2 equivalent emissions of fossil fuels and escalating $10/ton/year, The fee would
be imposed on all fossil fluels and ollIeW P,-Ocliliousc gases 'at the Poi it Where they first enter the
ccotiomy. The tlee, Nvoiild be collected by the 'I" reasury Departiricirtt, plaecd ,in a Carb- on Fees Trust
Ftmd, and rebated to American liouseiiolds. Import Fees on products iinportod fi,om countries
without a. carbon fee would discourage husinesser, ti°om rclocatiiig where they can enii-t, nacre
CO2 and motivatv, other countries b) adopt sitnilar carboll pricing policies.
Monthly dividend payments would be inade to all Arnericati'lio-uscholds to help offset the,
increased energy costs during the transition, Ihe -total i,alue of all monthly dividend payments
would represent 100'No of the carbon fees collected liei- niondi, minus adi-ninistration Cost&
Estimated monthly dividends R)r a flarnily (.)I' four begin around $50/month and rise to
approximately S400hrionth over a 20 year pet.iad.
A 2013 study by R-cl.rional Econninic Models, Inc. (�REM), connnissioned by the Citizens'
Cliniate Education Cor
porution (C`(.,1, shows that. such an approach will red -Lice CO2 emissions
52% below 1990 levels in 20 _ycars while prow dingan econoniic sritnulus that adds 2.8 rnillion
jobs and prevents o -ver 230,000 premature deaths by improving air quality,
Passage ol'the resohalon (see Attaclui-ient 1) wo-tild owifmil the City of Petalumas s-upport for
[he Citizen Climatc Lobby's National ReVWILle--:` eUtMI Carl -_)on Fee and Dividend Pro rare. For
more infoniiation, a sun -marry.- of the legislative proposal ffir the C'arbo-n Iaee and Dividend
program has boon attached (see Attaclunent, 2),
12RIM"ILIM WIMMIUMMIR
Tlicrc we no Rmtriulal Impacts other than [he staff time and costs associated with preparing this
t2
staff-rclnort.
ATTACHMENTS
1. Resolution
2. Leuislative Proposal
b I-
ATTACHMENT 1
RESOIATTION ULNG TIM I_ TT; STATIfS CONGRES8 TO FI NACT A
REVE NUE-N"UAYFRA]", CARBON VE11-11 AND DIVIDEIND PROGRAM
NVIIEREAS, the Intergovenimental Panel on Climate Cliange has slated in its reccritly
released 5th Assessment Repoil, Clin.-tate Change 2013: The Physical Science Basis, that
"[w'Janning of the cIL'Illate system is unequivocal" and "[ijt is exti,emely IRely that 1111mall
ja0tience has boon the donuilailL cause oll, tile observed Warming since the -mid-20fli cc-atury"; and
W1.111,R-EAS, in May of 201-31, the global atmospheric co.nce.n1rati.on of carbon dioxide
reached 400 palls per inillion, the h I
do ics[ level in flit last 800,000,vears- and
NN AS, iii flay 2014, tkvc) sqxarate scientifle papers were published in the journals
and Geop'llysical Research Leder documenting drainatic. i:ctreais of Antarctic glaciers
and predicting that large-scale desti-Lictiori of the West Antarctic ice sheets -is likely iloiv
inevitable and will lead to sea levc1rises of 10 feet or rriore, and
W-H.111REAS, conscii-ativc estimates by chinate scientists throe hoot the world state that.
to act -leve climatc stabili/ation and avoid cataclysmic Climate c'nange, emissions of greenhouse
gases must he brought to 90 percent bclo,,,v, 1990 levels by 2050; aud
VVIIERFAS, the Califfirnia. Global Warniin_g Solutiojis Act of 2006 (Dixtsion 25.5
(con-u-nenoing with Section 3 9500) of the. Hcailth and Safety Code) oommits the state, to reduce
p-eenhouse boas emissions to 1990 levels by 21020, and the Govemors Fxeculive'Order S-3-05
further calls on (lie Statc to establish a policy to redLict greeiihmse, gas cniissioi)s to 80 percent
below 1990 levels by 2050: and
WHEREAS, the City of Petaluma SUPP011S P0IVCFfUl TICW POIiCieS to 111,elet g,�q-CCJA-
j0USC
gar; ernssion reduction goals in accordance, ovith the 2015- Raris Clfinate Agrocnieni despite the
United S[Wes'loin-nal witlidrawal fi-ointliat accord - and
WREREAS. the Cily of I'etaluma recopii7eq fae tIveal that iincoirtrolled sea lc.vci j-11se
moreover recogni7,es the need for' poscs to out local well-heing, economic activity, all -d
sunvivability as a conitnutiry. and coatinued tirocrit action on a broad scale, to counter the
degradatioti of [lie natoral and economic enviromiacnt tbat results from, warming tots puratures
and ocean. acidification; and
WHEREAS, the United States Conogess can evaci a national, cqrbon tax oii fossil fuels,
based o3i the araouat of carbon dioxide the. Ric] will einit AN,11011 burned; and
WHEREAS, For efficient admirdstration, fossil fucls can be taxed once, as far upstream
in the econorny as practical, oratthe. port of entry into the United States; and
Wff-F,R'F,A8, a national, rcvenue-neutral carbon tax starting, at a relatively low rate and
steadily over future years I I s a market-based solution that would mi-Iiiinally disrupt the
economy while sending as clean and predictable price signal to businesses to develop -,uld use
nonearbon-based energy resources, and
W11FREAS, the Citizons" Climate Education Coq)oratioi-, Conuiiissioned Reglunal
Economic Models, Inc. ( " I RP,M'I ro do a nation-wide macroeconomic study on Uie impact ol'.a
rc�lonue-neiltral carbon. iax: and
WHEREAS., REMUs study predicted that after 10 years, a revenue -neutral carbon tax
would lead to as decrca5c in carbon dioxi& emissions by 33 percent, na increase in national
employment by 2.1 rnflliorijobs, and an average montlaly dividend For. as family of Four of $288;
and
WHEREAS, border adjustnienis such as carbon-content-basod taiffl's on products,
imported n-o.m (;uuntries v61hoW coniparabic carbon pricing and refunds to our c'xpoitcTs of
ca-rbon taxes paid can maitAULiTA 01c compefitiveness of United States businesses in global
aaafkcts; and
NVHEREAS, as national carbon tax cat he iniplenaented quickly and ef
.Roiently; and
WSPolld to [Ile W�Verley Of flne climate crisis, because the 'federal government al, eady has in place
mechanisms, such as the Internal Reventic Scrvice,.iieeded to implement and enforce the tax and
atroady collects taxes from fossil fucl producers and impoi-tees= 9nd
WBERE, AS, a national carbon tax would make the United States as leader in mitigating
clirriate cfiange and tlac advancing clean or
-,cr,py teclinolopies of the )1st Century, and evould
incentivize other couritries to cimet sitiidar carbon taxes, thereby reducing global carbort, dioxide
cmissions ,,vit'hout the need 60r COITIPleX niternatioiial agreernents,
NOW, THFR:FC RFf , 13E IT RESOLVED that the City of Petaluma Along with otlier
cities, busi-nesses, and organizations urge the United States Congress to enact, �vitbont delay, a
tax on carbon -based fossil ftiels with the stipulations that:
the tax should be codecttd once, as far upstream, iii the CC0110111Y LLS PFWIi-Cal, Or A t4e,
port of entry into the lin ted. Statcs;
(he tax, natc should start, low and merease steadily and predictably to achieve the goat of
reducing carbon dioxide ci-nissiow, iii the I'Inittd States to 80 percent. below 1990 level,,.-,
Ley 2050;
all tax revenue should be re-ftirned to ii-iiddle- and low—incomc Anicri cans to protect them
from the irripact of rising Prices due to the tax;
that the international compotifiveness of Uifted States businesses should be protected by
usitig carbon-comen.t.-based tatiffs and tax refunds; and
BEC ITFUR.T,l'IE'R RESOINED that the, City Mariagcr of Pctaluuia transn-it cop* s of
City le
this resolution to the President and Vice Prusident of the United Sta:tcg, to the Speaker or the
Nouse of Representativcs.. to Ibe Mjjority Leader of the Senate, to each Senator from California
in the C',ongress of the United Mates. to the inember re-presciAing Petalunia in the House of
Represcmutives ill Cu
oness and to the author of this Icgislation for appr-opriate distribution.
Eviv-11-4 TH qqIIT6WI
Legislative proposal: Carbon Fee and Dividend
Findings:
1. Causation: Whereas the weight ol'scientific evidence indic-,ites that grcenhULISC gMs eTniSS1011S frOM
human activities including the burning of fassil Riels and other sources wire causing rising globil
I Mitifzation (Remm to 350 plana or helow); Whereas the weight of SCIellLiFIC evidence also Indicaics
that a return from the current comentration of more than 400 parts per million ("liptn") of carbaii
dioxide ("COj") in the atmoqphcre to 350 ppm CO,, or less is necessary to slow or stop the rise. ill
global tcmperatires,
3, Endanqtrment: '%9iereas flirthcr inercases in global temperaWres pose imminent and substantial
dangm To human health, the natural environment, the econoniy, national security, and an
unacceptable risk of catastrophic impacts to buman civilizatioti
4, Co-Benqfits: Whereas the measures proposed in thi,., legislation will benefit the ecoriomy, human
heakh, the ciivinonment, and national security, even without considleration of,global temperatures, as
a result of correctin�, 0 market distortions, rcchictiom in non-greenhouse-gar;non-greenhouse-gar;pollutants, reducing the
outflow of dollars to oil-prodLIC[l1,Q comitries, mid improvements in the ener security of the United
States,
Benefits of Carbon Fecs: Whereas phased -in carbon fites on gr eeiihor_ise gas emissions (T) are the
most ellicient, i.ranspareni, and enforceMile meclianism to drive an effeetive and fair transition to as
domestic -energy ecDoomy, (2) will stimulate invostrnent in alternative -energy technologies, and (3)
give all businesses powerful incentive.-, to increase their energy -efficiency and reduce; their carbon
fooLprims in order to remain competitive,
6. E(I,Ual Monthlv Per-I'mon Dividends: Whereas equal monthly dividends (or "rebates") from carbon
lees paid to every American hottsehold can help ensure That families and individuals can afford the
energy they need cluring thc trallSitiffl-I tea sL �I
,rCGI`IhOUSe gas-Erce economy and the dividends will
stimulate the ecollonly,
Therefore the following legislation is hereby ertacted.
I , Collection of Carbon Feeq/Carbon Fee TrList Fund: IJI)on enaamclit, impose a carbon fee oil al I
fossil fuels and other greenhouse gasses at ffic paint where tlioy first enter the ecm,iomy. . The fee shall
be collected by the Treasury Dr-paytment. The fee on that date shall be �SI 5 per ton of Mip, equi-walcill
erni,Rsinns mid result in equ,91 charges fair{ each tnn of CO-_ equivalent emissions potential in each type
of fuel or greenhome gas, The Department of Eiiergy shall propose and promulgate regulallows
setting fordi CO2 eqLIiVUICIIt f=ees (or other greenhouse gases iiiel-tiding at i nlinimun-�_ metham,
nifi-mis oxide, sulftir hexafluoride, hydroflnorm-irbom(.ffFCs), perfluorocarbons, and nitrogen
trifluoride. The Treasury shall also collect Clic fees imlioscd mDon the other grterimuse gases. All
fees are to be placed in the Carbon Fees 'Frust Fund and rebated to Arnerican homeholds as outfincd
iii rl13 below.
Emissions R.ednction'laraP�t.s: To align US emissions with the phy�ical constraints itlentified by the
Intergovernmental Panel [iii Climate Change (t PC to avoid Irreversible olimate change, the ye-,Irly
increase in carbon I`ees, inchidinc, other grembome ga.,ses, sliall boat ic', st $10 per ton f CO
equivalent eacli year. -Annually, the Deparbflent ofFnergy shall determine whetlier an inerease larger
than $10 per ton pea year is needed to achieve program goa Is. Yearlyprice increases of at I east $10
per year shall confinuc until total US, ('02 -equivalent emissions have been reduced to 10% of U,S,
CO2 -equivalent, emissions in 1990,
3, Equal Per -Person Monthly Dividend Paynjjents: Equal monthly per -person dividend payments shall
be made to all American houscliolds- ('/� pay-nient per child under 19 years old, with a limit or, 2
children per family) cath motith. The total valUe of all monthly dividend paynierits shall represent
100% of (fie net carbon recs collected per niontli,
4. Border Ad'jusiments: Irt order to enAlre there is no domestic or international hicciativo to relocate
Production of goods mscrviceq tri re.gini.es more permissive of greenhouse gas cniissions, and [hus
encourage lower global emissions, Carbors-Fee-Equivalent Tariffs shall be charged for
L, goods
entering the US. from countries-wif.hout. comparable Carbon Fees/Carbon, Prichig, Carboll-Fec-
Equivalent Rebates shall be Lised to reduce th.e price of exports to SUCII countries, Thc State
Department will determine rotate arnounts and exeniptions Til`aiiy.
H.R.763 - Energy Innovation and Carbon Dividend Act of 2019
1 16th Congress (2019-2020) 1 Get alerts
Sponsor: ReQ. Deutch, Theodore E. FD -FL -221 (introduced OV2412019)
Committees: House - Ways and Means; Energy and Commerce; Foreign Affairs
Latest Action: House - 02/12/2019 Referred to the Subcommittee on Energy. (All Actions)
Tracker: Introduced Passed House Passed Senate To President Became Law
Summary(l) Text(l) Actions(5) Titles(2) Amendments(0) Cosponsors(31) Committees(3) RelatedBi||n(0)
There is one summary for H. R.761 Bill summaries are authored by �IRS.
Shown Here:
Energy Innovation and Carbon Dividend Act of2018
This bill imposes mfee onthe carbon content offuelo.indudimQonudeci|.notum[gan.00m|.oxanyotherpmductdohvedhom
those fuels that will be used so as to emit greenhouse gases into the atmosphere.
The fee is imposed on the producers or importers of the fuels and is equal to the greenhouse gas content of the fuel multiplied
bythe carbon fee rate. The rate begins et $15in201Q.increases by$10each year, and iasubject tofurther adjustments
based on the progress in meeting specified emissions reduction targets. The bill also imposes a specified fee on fluorinated
greenhouse gases,
~
exemptions for fuels used for agricultural ornonmmittingpurposes,
~
exemptions for fuels used bythe Armed Forces,
^
rebates for facilities that capture and sequester carbon dioxide, and
^
border adjustment provisions that require certain fees or refunds for carbon -intensive products that are exported or
imported.
The fees must be deposited into a Carbon Dividend Trust Fund and used for administrative expensesand dividend payments
to U.S. citizens or lawful residents. The fees must be decommissioned when emissions levels and monthly dividend payments
fall below specified levels.
The bill also suspends certain regulations that limit greenhouse gas emissions. The suspensions expire if the emissions
targets established by this bill are not reached after ospecified time period.
https://vvvv,A,.congress.gov/bill/I 16th-congress/housc-bill/763 4/25/2019
Text -1-3.8.7&3 - 116th Congress (2019-2020). Energy Innovation and Carbon Dividend
H.R.763 - Energy Innovation and Carbon Dividend Act of 2019
11 6th Congress (2019-2020) 1 Get alerts,
Sponsor: Rei). Deatch, Theodore E. ID -FL -221 (introduced 01/24/2019)
Committees: House - Ways and Means; Energy and Commerce-, Foreign Affairs
Latest Action: House - 02/12/2019 Referred to the Subcommittee on Energy. (All Actions)
Tracker: Introduced Passed House Passed Senate To President Became Law
Summary(l) Text(l) Actions(5) Titles(2) Amendments(0) Cosponsors(31) Committees(3) Related Bills(0)
There is one version of the bill.
Text available as: XMLIHTML XMUHTML (new window) TXT PDF (PDF provides a complete and accurate display of
this text,) ?
Shown Here:
I I 6TH C 0-NGFX S S
ISTSESSION He Re 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 niore prosperous nation for future generations.
JANUARY 24, 2019
Mr. DELJTCH (For himself, Mr. LimSKI, Mr. CRIST, Mr. PFTERS., Ms. ESHOO, Ms. JUDY CHIT of California, and
Mr. ROONEY of Florida) introduced 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
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 Nvluch will reduce harmful
pollution and leave a healthier, more stable, and more prosperous nation for future generations.
https://www. congress.gov/bill/116th-congress/house-bill/763/text 4/25/2019
Text - I-I.R.763 - 116th Congress (2019-2020): Energy Innovation and Carbon Dividend ... Page 2 of 20
Be it enacted by the Senate and House ofkey)resenlalives of the United Slales ofAmerica in
Congress assenibled,
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
prosperity and national interests,
(3) emissions of carbon pollution and other harmful pollutants into our Nation's air impose
substantial costs on all Americans and on future generations, 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.
(a)IN GENERAL .—The Internal Revenue Code of 1986 is amended by adding at the end the
following new subtitle:
"Subtitle L—CARBON DIVIDENDS AND CARBON
FEE
"CHAPTER 101. CARBON FEES,
"CHAPTER 102, CARBON BORDER FEE ADJUSTMENT.
"See, 9901. Deffifl-tions-.
"Sec. 9902, Carbnn fee.
"Sec. 9903. Emissions reduction schedule.
"Sm 9904Fee oo nuoiijiiled P-reenhouse oases.
"Sec. 9905. Decomniissionis12 of Carbon Adniiiiistratim.
"Sec. 9906, Carbon Caoture and Sequestration.
"See. 9907. Administrative authority.
"SEC. 9901. DEFINITIONS.
"For purposes of this subtitle:
"(a) ADMINISTRATOR.—Tire term 'Administrator' means the Administrator of the
Environmental Protection Agency.
"(b)CARBON DIOXIDE EQLJIVALENT C.R. CO,-E.—The term 'carbon dioxide equivalent'
or 'CO, -e' means the number of metric tons of carbon dioxide emissions with the same global warming
potential as one metric ton of another greenlio-use gas.
https://www. congress. gov/bill/ I l6th-congres s/house-bill/763 /text 4/25/2019
Text - HA.763 - 116th Congress (2019-2020): Energy Innovation and Carbon Dividend... Page 3of20
"(C)CARBON—INTENSIVE PRODUCT.—The term'carbon-intensive product' means, as
identified by the Secretary by rule --
"M any manufactured or agricultural product whicli the Secretary in consultation with the
Administrator determines is emissions -intensive and trade -exposed, except that no covered fuel is a
carbon -intensive product, and
"(2) until such time that the Secretary promulgates rules identifying carbon -intensive, products..
the following shall be considered carbon -intensive products: iron, steel, steel mill products
(including pipe and tube), aluminurn. cement, glass (including flat, container, and specialty glass
and fiberglass), pulp, paper, chemicals, or industrial ceramics.
*"(d)CARBON LEA K A G F.—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 t0jUrisdictions 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 govenin-tent policy which explicitly places a price on greenhouse gas
pollution and, shall be limited to either a tax on greenhouse gases or a systern, of cap -and -trade. The cost
of carbon is expressed as the price per metric ton of CO, -e.
"(f) COVERED ENTI'FY.—The term 'covered entity' means
—
"(1) in the case of crude oil—
"(A) a refinery operating in the United States. and
``(13.) any importer of any petroleum or petroleum product into the United States,
"(2) in the case of coal—
"(A) any coal mining operation in the United States, and
Z,
"(13) 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
"(13) any importer or natural gas into the United States,
L,
"(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 Regulations, and
"(5) any entity or class of entities -which, as determined by the Secretary, is transporting.
selling, or otheiwise 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 fluorinated greenhouse gas fee,
or the carbon border fee adjustment.
"(g) COVERED FUEL.—The term 'covered fuel' mean,,, 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 0 1 1 --The term `crude oil' means unrefined petroleum.
https://www.congress.gov/bill/I 16th-congress/house-bill/763/text 4/25/2019
Text - H.R.763 - 116th Congress ('2019-2020): Energy Innovation and Carbon Dividend ... Page 4 of 20
-(i) ExPORT.—The term 'cxpoft' means to transport a product from within the jurisdiction of the
United States to persons outside the United States.
'(l) FLUORINATED GREENHOUSE GAS.—The terra 'fluorinated greenhouse gas` means sulfur'
hexafluoride (SF6), nitrogen trifluoride (NF,,), and any -fluorocarbon except for controlled substances as
defined in subpart A of part 821 of title 40. Code of Federal Regulation, and substances with vapor
pressures of less than I 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, tertian- amine or aminoether, any
perfluoropolyether, and any hydrofluoropolyether.
"(k) FOSSIL F t T EL.—The term 'fossil fuel' means coal, coal products, petroleum, petrole-urn
products. or natural gas,
"(1)FULL FUEL CYCLE GREENHOUSE GAS Emissjo-Ns,—The term 'full fuel cycle
greenhouse gas emissions' means the greenhouse gas content of a covered fuel plus that covered fuel's
upstream greel-11-10LISC gas emissions.
ZD
"(rn)GLOBAL WARMtNG POTENTIAL.—The term 'global warining potential' means the ratio
L_
of the time -integrated radiative forcing froni the instantaneous release of one kilogram of a trace
substance relative to that of one kilogram of carbon dioxide.
"(n) GREEN HOUSE GAS. --The term `greenhouse gas" means carbon dioxide (CO,,), methane
(CH4), nitrous oxide (1 20). sulfur hexafluoride (SFE},
hydrolluorocarbons (HFCs,), perfluorocarbon
(PFCs),, and other gases as defined by rule of the .administrator.
"(0)GREENHOUSE GAS CCON TEN'i'.—The term 'greenhouse gas content' means the amount of
greenhouse gases, expressed in metric tons of CO, -e, which would be emitted to the atmosphere by the
use of a covered fuel and shall include. nonexclusively, emissions of carbon dioxide (CO,,), nitrous
oxide (N20), metharie (C114). and other greenhouse gases as identified by rule of the administrator.
"(p)GREENHOUSE GAS EFFECT.—The term `greenhouse gas effect" means the adverse effects
of9 reenhouse gases on health or welfare caused by the greenhouse gas's heat -trapping potential or its
effect on ocean acidification.
"(q)1 M PORT.—Irrespective of any other definition in law or treaty, the term `Jmpoif means to
land on, bring into, or introduce into any place SU�jeet to the_ urisdiction 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)PROD UCTIONi GRE13NHOUSL GAS EMISSIONS.—The term `production greenhouse gas
Z__
emissions' means the quantity of greenhouse gases, expressed in metric tons of CO? -e, emitted to the
atmosphere resulting fi-om, nonexclusively, the production, manufacture, assembly, transportation, or
finaricing of a product.
"(t) UPSTREAM GR E. EN I I OUSE GAS EMISSIONS.—The term `upstream greenhouse gas
emissions' means the quantity of greenhouse gases, expressed in metric tons of CO, -c, emitted to the
atmosphere resulting from, nonexclusively, the extraction, processing. transportation, financing, or other
preparation of a covered fuel for use.
https://www.congress.gov/bill/ll6th-congresslhouse-bi11/763/text 4/25/2019
Text - 1-I.R.763 - 116th Congress (2019-2020): Energy Innovation and Carbon Dividend ... Page 5 of 20
"SEC. 9902. C'ARBON FEE.
"(a)CARBON FEE.—There is hereby imposed a carbon fee on any covered entify's emitting use...
or sale or transfer for an emitting use, of any covered fuel.
"(b)AMOUNT OF THE CARBON FFF_.—The carbon fee imposed by this section isanamount
equal to—
`°(1)
o—
"(1) the greenhouse gas content of the covered fuel, multiplied by
"(2) the carbon fee rate.
"(C)CARBoN FEE RATL.-, -For purposes of this section—
(1) IN GENERAL.—The carbon, fee rate. with respect to any use, sale. or transfer during a
calendar year, shall be—
"(A) in the case of calendar year 2019, $15, and
"(13) 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 calendar
year.. plus
-(ii) $10.
',(2) EXCEPTIONS.
-(A) INCREASED CARBON FEE RATE AFTER MISSED ANTINUAL E',yTISSIONS
REDUCTION TAR GI` T.—In the case of any year inirnediately following a year for which the
Secretary determines under 9903(b) that the actual emissions of greenhouse gases Crorn
covered fuels exceeded the emissions reduction target for the previous year.. paragraph (1)(13)
(ii) shall be applied by substituting '$15' for the dollar amount ottierwise in effect for the
calendar year under such paragraph.
-(B) CESSATION OF CARBON FEE RATE INCREASE AFTER CERTAIN
EMISSION REDUCTIONS ACHIEVED.—In the case of any year immediately following a
year for which the S'ecrctary deterinhies under 9903)(b) that actual emissions of greenhouse
gases from covered fuels is not more than 10 percent of the greenhouse gas emissions from
covered fuels during the year 21-0 16. paragraph (1)(13)(ii) shall be applied by substituting '$0,
for the dollar amount otherwise in effect for the calendar year under such paragraph.
"(3) INFLATION ADJUSTMENT.- An the case ofany calendar year after 201.9, each of the
dollar amounts in paragraphs (1)(A), (1)(13)(ii). and (2)(A) shall be increased by an amount equal
to—,
"(A.) such dollar amount, multiplied by
"(13) the cost -of -living adjJastment determined under section 1(1:)(3) for the calendar year.
determined by substituting `calendar year 2018' for 'calendar year 2016' in subparagraph (A)
(ii) thereof.
1,(d)ExEN1PT1oN AND RE 1: Ll ND.—The Secretary shall prescribe such rifles as are necessary to
ensure the fee imposed by this section is not imposed with respect to any= nonernitting use, or anv sale or
https://www.coiigi-ess-gov/bill/I ]6th-congress/liouse-bill/76' 3/text 4L?5/2019
Text - H.R. 763 - 116th Congress (2019-2020): Energy Innovation and Carbon Dividend ... Page 6 of 20
transfer for a noneinitting use, including rules providing for the refund of any carbon fee paid under this
z:1
section with respect to any such use, sale, or transfer.
"(e) EXEMPTIONS.
"(1) AGRICULTURE.
"(A) FUEL.—If any covered fuel or its derivative is used on a faun for a farming
purpose, 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.
"(13) FARM. FARMING USE, AND FARMING PURPOSE.—The terms `farm',
`farming use'. and 'farming purpose' shall have the respective meanings given such terms
Linder section 6420(c).
"(C) OTHER GREENHOUSE GASES EMISSIONS FROM AGRICULTURE.—Thc
carbon fee shall not be levied upon non-fossil fuel greenhouse gas emissions vv-hich occur on a
farm.
"(2) ARMED FORCES OF THE UNITED STATHIS.—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:
"(I) REFERENCE YEAR.—The greenhouse gas emissions from covered fuels during the
�1_
year 2016 shall be the reference amount of emissions and shall be determined from the 'Inventory
of U.S. Greenhouse Gas Emissions and Sinks: 1990-2016' published by the Environmental
Protection Agency in April ol'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 min -Lis 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 or20I 6 emissions per year
2035 to 2050 2.5 percent of 2016 emissions per year
https://wwNv.coi-igress.gov/bill/l l 6th-congress/ho use- bill/763/tcx.t 4/25/2019
Text - H.R.763 ) - 116th Congress (2(119-2020): Energy Innovation and Carbon Dividend ... Page 7 of 20
"(b) ADMINISTRATIVE DETER MINATION.—Not later than 60 days after the beginning of each
calendar year beginning after the enactment of this section, the Secretary, in consultation with the
Administrator, shall determine 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 accounting method as was used to determine the
greenhouse gas emissions in the `Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2016'
1
published by the Enviroru-nental Protection Agency in April of 2018.
"SE C. 9904. FEE ON FLUORINATED GREENHOUSE GASES.
"(a)FLUORI-NATED GAS FEE.—A fee, is hereby imposed upon any fluorinated greenhouse gas
which is required. to be reported under part 98 of title 40, Code of Federal Regulations.
"(b) AmoUNT.—Thefee to be paid by the covered entity required to so report shall be an amount
equal to—
"(I) the total amount, in metric tons of CO, -e, of emitted fluorinated cyreeffliouse gases (or, in
the case of a supplier. emissions that would result determined under the rules of such part),
multiplied by
"(2) an amount equal to 10 percent of the carbon fee rate in effect under section 9902(d)(1) for
the calendar year of such emission.
I I 1'11 1 1111' 1,1111 1� ii I � I � 132 � 1112: ii� 11,
"(a)IN GENERAL .—At such tine lliat—
"(1) the Secretary determines under 9903(h) that actual emissions of greenhouse gases from
covered fuels is not more than 10 percent of the greenhouse 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 deconirnission in an orderly manner at] bureaus and programs associated with
ZI-7
administerincy the carbon fee, the carbon border fee a4justirient, and the Carbon Dividend Trust Fund.
"(b)INFLATION ADJUSTMENT. In the case of any calendar year after 2020, the $20 amount
under subsection (a)(2) shall be increased by an amount equal to
"(1) such dollar amount. multiplied by
"(2) cost -of -living adjustment determined under section l(f)(3) for the calendar year,
deternained by substituting -calendar year 2017' for 'calendar year 2016" in subparagraph (A)(ii)
thereof.
CI � 1111 IF 111111
"(a) IN GENERAL.—The Secretary. in consultation Witty the Administrator and the Secretary of
Energy, shall prescribe regulations for making payments as provided in subsection (b) to qualified.
facilities which capture and sequester qualified carbon dioxide.
"(b)PAYMENT AMOUNTS.—
https://www.coi-igress.gov/bill/I 15th-congress/house-bill/763/text 4/25/2019
Text - H.R.763 - 116th Congress (2019-2020): Energy Innovation and Carbon Dividend ... Page 8 of 20
"(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
"(ii) which results in the emission of qualified carbon dioxide,
"(B) captures such emitted qualified carbon dioxide. and
"(C) -(l) sequesters such qualified carbon dioxide in a manner which is safe, permanent.,
and in compliance with any applicable local. State, and Federal laws, or
"(1i) utilizes such qualified carbon dioxide in a manner provided in paragraph (3)(C),
"Q) AIR UNYOF REFLTND.—The payment determined under this section shall be all
amount equal to the lesser o[
``(A) -(i) the adjusted metric toils of qualified 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 carbon dioxide relates. or
"(13) the amount of the carbon fee imposed by section 99021 with respect to such covered
fuel.
-(3) DEFINITIONS AND SPECIAL RULES.—For purposes ofthis section�
.,(A) QUALIFIED CARBON DIOXIDE; QUALIFIED FACILITY.—
(i) QUALIFIED CARBON DIOXIDE.—The term 'qualified carbon dioxide' has
the same meaning given such term under section 45Q(b).
"(ii) QUALIFIED FACILITY. The term 'qualified facility" means any industrial
facility at which carbon capture equipment is placed in service.
"(13) ADJUSTED TOTAL METRIC TONS.—The adjusted total metric tons of qualified
carbon dioxide captured and sequestered or utilized shall be the total metric toils of qualified
carbon dioxide captured and sequestered or utilized, reduced by the amount of any carbon
dioxide likely to escape and be emitted into the atmosphere due to imperfect storage
technology or otherwise, as determined by the Secretary in consultation with the
Administrator,
"(C) UTILIZATION .—The Secretary, in consultation with the Administrator, shall
establish regulations providing for the methods and processes by which qualified carbon
dioxide may be utilized so as to remove that qualified dioxide safely and permanently from the
atmosphere. 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,
1-iltps://www. congress.gov/biH/I 16th-congress/house-bil U76 3 /text 4/25/2019
Text - H.R.763 - 116th Congress (2019-2020): Energy Innovation and Carbon Dividend ... Page 9 of 20
"(D) SEQUESTPLAT ION.—,Not later 540 cla,,ys after the date of the enactment of this
section, the Secretary, in consultation with the Administrator. shall prescribe regulations
identifying the conditions under which carbon dioxide may be safely and permanently
sequestered.
"(4) COO RD[NiATIONTWIT11 CREDIT F'OR CARBON DIOXIDE SEQUESTRATION.
—At such time that the Secretmy prescribes regulations implementing this section. no payment
under this section shall be allowed to a taxpayer to whorn a credit has been allowed for any taxable
year under section 45.
64SEC. 9907. ADMINISTRATIVF AUTHORITY.
"(a)17\, GENE RM..—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
=1 - p
and collect the carbon fee imposed by section 9902 and the fluorinated greenhouse gas fee imposed by
section 9904.
"(b) S PECI H CA i.t-Y.—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 (as for collecting such carbon fee or fluorinated areerthouse gas.fec.
in such a manner so as to minfinire administrative burden and maximize the extent to which full
fuel cycle greenhouse gas emissions from covered fuels or fluorinated greenhouse gases have the
carbon fee or fluorinated greenhouse gas fee levied upon them,
t-- -
-(2) the identification of covered entities which shall be liable flor the payment of the carbon
fee or the fluorinated greenhouse gas fee,
-(3) requirements for the n-torably 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
greenhouse gas content and its upstrearti greenhouse gas emissions,
"(6) rules to ensure that no covered fuel Or fluorinated greenhcnise gas has the carbon fee,
OLiorinated greenhouse gas fee, or carbon border fee adjustment imposed. UP01-1 it More than once.
and
"(7) rUICS to ensure that the domestic implementation of the carbon fee and the fluorinated
greenhouse -,as fee coordinate with the implementation of the carbon border fee adjustment of
chapter 1021 .
"CHAPTER 102 -CARBON BORDER FEE AW-USTIMENT
Sec, 9908. Carbon good fit. adiusimc'n't.
"Sec. 9909, Administration oftfic carbon border ree adiul:mont.
-sec, 9910. jI l ocatim of carbon border fee I di LIS! inen t reven t Los.
bftps://www.coiigress.gov/bill/I l6th- congress/hou se-bill/763 /text 4/25/2019
Text - H.R.763 - 116th Congress (2019-2020): Energy Innovation and Carbon Dividen... Page 10 of 20
"(a)IN G EN ERA L.—The fees u -reposed by, and refunds allowed under. this section shall be
referred to as `the carbon border fee adjustment'.
"(b) PURPOSE.—The purpose of the carbon border lee adjIustment is to protect animal, plant.. and
human tie and health. to conserve exhaustible natural resources by preventing carbon leakage, and to
facilitite the creation of international agreements.
"(C)IMPORTED COVERED F u E L s IFFE.—In the case of any person that imports into the
United States any covered fuel, there shall be unposed a fee equal to the excess (if any) of—
"(1)an amount equal to—
"(A) the amount of 11,T]l fuel cycle greenhouse gas emissions of such, fuel, multiplied by
"(13) 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-INTENSIV17, PRODUCTS HHE.—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) ananlount equal to -,.-
"(A) production gas -as ernissions of suers product, multiplied by
r_1
the carbon -fee rate in effect for the year ill 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) RFFUND ON Expowrs FROM IJNITED STATES. ---
"(1) CARBOlei-INTENSIVE PROD UCTS.--Under regulations prescribed by the Secretary,
there shall be allowed aCTedn. or refund (vitliout interest) to exporters of carbon -intensive products
manufactured or produced in the United States an amount equal to the excess (if any) of—
``(til ari Eu-nount 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 Nvblcli (lie carbon fee or fluorinated,
greenhouse gas fee ,vas paid upon the production greenhouse gas emissions of the
exported carbon -intensive product, over
"(13) any total cost of carbon to be levied upon the carbon -intensive product by any
_jurisdiction to which the carbon -intensive product is to be imported.
Any such credit or refund shat I be allowed in the same manner as if it were an overpayment of the
fee imposed by section 9902 or 9904.] -he Secretary shall establish fair, timely, impartial. and as
necessary confidential procedures by which any exporter of any product from the United States
nlay petition the Secrctwy to include that exported product on the list of carboli-intensive products.
"(2) COVIRED FUELS,—Under regulations prescribed by the Secretary, in the case of a
T
covered fuel produced in the I.)ni ted States with respect to Nvblch the fee under section 9902 was
https:Hwvww.congress.gov/bill/116th-congress/house-bi11/7 63 /text 4/25/2019
Text - H.R.763 - 116th Congress (2019-22020): Energy Innovation and Carbon Dividen... Page I I of 20
paid, there shall be allowed as a credit or refund (without interest) to any exporter of such covered
fuels an amount equal to the excess (if any) of—
"(A) an arnount equal to—
"(1) 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 exported covered fuel, over
"(B) any total cost of carbon to be levied upon the covered fuel by ajurisdiction to which
the carbon -intensive product is to be imported.
Any such credit or refund shall be allowed in the same mariner as if it were an overpayment of tax
imposed by section 9902.
"(f) DEFINITIONS. Forpurposes of this section—
"(1) FOREIGN COST OF CARBON; FOREIGN CARBON COSTS.—The term 'foreign cost
of carbon' or 'foreign carbon. cost' incans 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. greenhouse gas. Such cost
shall be determined and expressed as a price per metric ton of CO—e.
"(2) TOTAL COSTOF CARBON CARRTED,—The term 'total cost of carbon carried" means
an amount equal to—
"(A) the production greerd-iouse gas emissions of a carbon -Intensive product or the full
Cue] 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 CA CARRIED.—The term `total foreign cost of
carbon carried' means an amount equal to
"(A) the production greenhouse gas emissions of a carbon -intensive product, or the full
fuel cycle greenhouse gas emissions of a covered fuel,, multiplied by
Cl
"(13) the foreign cost of carbon with respect to such product or fuel., reduced by the
amount refunded with respect to such product or fuel by a foreign jurisdiction.
The total foreign cost of carbon carried shall be expressed as price in United States dollars.
"SEC. 9909. ADMINISTRATION OF THE CARBON BORDER FEE ADJUSTMENT.
-(a) GEN LRA L L Y.—The Secretary in consultation with the Administrator shall prescribe
regulations and guidance which implement the carbon border fee adjustment Linder section 9908.
"(b) COLLABORATION.—In determining the production greenhouse gas emissions of an
imported carbon -intensive 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.
Z__
or otherwise administering the carbon border fee adjustment, it is the sense of Congress that the
Secretary should collaborate with authorized officers of any jurisdiction, including sub -national
governments, affected by the carbon border fee adjustment.
1-ittps:Hwww. congress.gov/bill/1 I 6th-congres s/house-bil 1/763 /text 4/25/2019
Text - H. .763 - 116th Congress (2019-20-20): Energy Innovation and Carbon Dividen... Page 12 of 20
-(c) ME, TH ODOLOG Y.—In determining the production greenhouse gas emissions of an imported
carbon -intensive product. the UpStreain greenhouse gas emissions of an imported covered fael, the full
fuel cycle greenhouse gas emissions of an imported covered fuel, or the foreign cost of carbon.. the
Secretary shall use reliable methodologies, which—
Z--
"(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
Z:�
upstream greenhouse gas emissions,
"(C) distinguish between the different types of greenhouse gas emissions which compose
a covered fuel's upstream greenhouse gas emissions or greenhouse gas content, as well as the
Z-1
various processes which produced those emissions, and
"(D) distinguish between the different types of greenhouse gas emissions which compose
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
product has the carbon fee,, the fluorinated greenhouse gas fee, or the border fee adjustment
imposed upon it more than once,
"(3) ensure that the implementation of the border carbon adiustriient 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 a(,reements.
"(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 carboti-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 greenhouse gas emissions of every imported covered
fuel, and
"(3) not later than ' ) 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 procedures by kvInch the importer of any carbon -intensive product or any covered fuel may
petition the Secretary to revise the Secretary's deterni.ination of the production greenhouse gas
zn
emissions, full fuel cycle greenhouse gas emissions. or upstream greenhouse gas emissions of that
imorter's imported covered fuel or imported carbon -intensive product, or the foreign cost of carbon
P
carried by that importer's imported carbon -intensive product.
"(f)SHIPMENTs FROm Tim UNITED STATEs To THE TERRITORIES OF THE
[JNITED STATES.—Notwithstanding any othertreaty, law, or policy, shipments of covered fuels or
carbon -intensive products from the United States to Guam, the United States Virgin Islands, Samoa,
littps://v,-ww. congress gov/bi I I/ I 16th-congfess/housc-bill/763 /text 4/25/2019
Text - H.R.763 - 116th Congress (2019-2020): Energy Innovation and Carbon Dividen... Page 13 of 20
Puerto Rico, and the Northern Mariana Islands shall be eligible for a refund of the carbon fee under
section 9908(c),
"(g)IMPORTS To THE TERRITORIES OF TIRE UNITED STATES.—Not-",,itlistandiiigaily
other treaty, law. or policy, imports of covered fuels or carbon -intensive products to Guam., the United
States Virgin Islands, Samoa, Puerto Rico, and the Nor -them Mariana Islands shall not be subject to
Section 9908(c) or 9908(d),-'
"SEC. 9910. ALLOCATION OF CARBON BORDER FEE ADJUSTMENT REVENUES.
"The revenues collected under this chapter may be used to supplement appropriations made available in
fiscal years 2020 and thereafter --
"(I) 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 WIT11 CARBON OXIDE SEQUESTRATION CREDIT.—Section SIS
Q
(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 NEGOTIATIONS.—
(1) CONFORMANCE WITH INTERNATIONAL TREATIES.—In the case that the
Appellate Body of the World Trade Organization, or any other authoritative international treaty
interpreter, shall find any portion of the carbon border fee adjustment Wider 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 adjustment so
as to bring the carbon border fee adjustment into conformance with international law.
(2) INTERNATIONAL NEGOTIATIONS. The Congress finds the international mitigation
of greenhouse 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 20116
levels by 2050 and which respect the principle of common but differentiated responsibilities and
respective capabilities.
(3) SUSPENSION OF THE CARBON BORDER FEE ADJUSTMENT.—Any pail of the
carbon border fee adjustment shall be suspended, in whole or in part,—
(A) by treaty or other international agreement which includes provisions for the
suspension 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 ajurisdiction of importation has implemented
policies which, in the case of high emitting countries, reduce greenhouse gas ernissions at a
https://ww.congress.gov/bill/116th-congress/house-bill/73/text 4/25/2019
Text -14.8.763 - 116th Congress (2019-2020): Energy Innovation and Carbon Divider... Page 14 of 20
rate at least equivalent to United States greenhouse gas emission reductions, or, in the case of
low emitting countries, prevent the Increase in greeDlIOUSC gas emissions.
L_
Any such finding shall be reviewed at least every 3 years and amended or revoked as required.
C. 4. ESTABLISHMENT OF THE CARBON DIVIDEND TRUST FUND.
(a) Its GEIS ERAL.—SubchapterA ofeliapter 98 of the Internal Revenue Code of 1986 is amended
by adding at the end the following:
"SEC. 9512. CARBON DIVIDEND TRUST FUND.
"(a)ESTABLISHMEN'r AND FUNWNG.—There is hereby established in the Treasury of the
United States a trust fund to be kiiown as the 'Carbon Dividend Trust Fund'. consisting of such amounts
as may be appropriated to such trust fund as provided for in this section.
"(b)TRANSFERs To THE CARBON DIVIDEND TRUST FUND.—There is hereby
appropriated to the Carbon Dividend Trust Fund amounts equal to the fees received into the Treasury
less any arnounts refunded or paid under section 9902(d) or 9906 of.chapter 101 for each month.
',(c) Ex PEN D I TU R ES.—zkmounts in the trust fund shall be available for the following purposes:
"(I) ADMINISTRATIVE EXPENSES.—So much of the expenses necessary to administer the
Carbon Dividend Trust Fund for each year, as does not exceed—
"(A) in the case of the first 5 calendar years ending after the date of the enactment of this
section, the administrative expenses for any year may not exceed 8 percent of amounts
appropriated to the Carbon Dividend Trust Fund during such year, and
"(B) in the case of any calendar year thereafter, 2 percent of the 5 -year rolling average of
the an-intu-its appropriated to the Carbon Dividend Trust Fund, and
"(2) OTHER AD-MLEMSTRATIVE EXPENSES.—So much of the expenses as are necessary
to administer chapter 101 for any year as does not to exceed 0.60 percent of the amounts
appropriated to the Carbon Dividend Trust Fund for the previous year, and further limited as
follows:
,4 (A) `I'he Department of the Treasury.
"(13) The Social Security Administration.
"(C) The Eiivironi-iiental Protection Agency.
-(D) Department of State.
"(3) CARBON DIVIDEND PAYMENTS.—
(A) IN GENERAL.—From the amounts in the Carbon Dividend Trust Fund made
available tinder paragraphs (1) and (2) of this subsection for any year. the Secretary shall for-
each
oreach month beginning more than 270 days after the date of the enactment of the Energy
Innovation and Carbon Dividend Act of 2019. make carbon dividend payments to each
eligible individual.
"(B) PRO -RATA SHARE.—A carbon dividend payment is one pro -rata share for each
adult, and half a pro -rata share for each child tinder 19 years old, of amounts available for the
month in the Carbon Dividend Trust Fund.
https://ww-w.congress.gov/bill/I 16tb-congress/liou,se-bill/763/text 4/25/2019
Text- H.R.763 - 116th Congress (2019-2020): Energy Innovation and Carbon Dividen... Page l5of20
-(C) ELIGIBLE INDIVIDUAL.- -The (erre `eligible individual' means, with respect to
any month, any natural living person who has a valid Social Sec-taity number or taxpayer
identification number and is a citizen or IwAfnlresldent of the United States (other than any
individual who is a citizen of any possession of the United States and whose bona fide
residence is outside ofthe 'United States). The Secretary is authorized to verify- M. individual's
eligibility to receive a carbon dividend payment.
"(D) FEI-" TRLATMENT01; 1't . ENTS.—Anio tints paid under this subsection shall
be includible in gross income.
;'(E') FEDERAL. PROGRAMS A -'ND FEDER/kL ASSISTED PROGRAMS.—The carbon
dividend amount received by any individual shall not be tal�en into account as income and
shall not be taken into account as resources for purposes of detern-rining the eligibility Of Stich
L,
individual or any other individual for bene Fits or assistance, or the arnount or extent of benefits
or assistance, under any Federal prograrn or under any State or local program financed in
whole or in part with Federal:funds.
6-(F) ADVANCE PAYM1,,N.T.—The Secretary shall transfer to the Carbon Dividend
Trust Fund such amounts as are necessary for the disbursement of an advanced carbon
dividend to all eligible individuals as follows:
"(i) An. advanced carbon dividend shall be the same as the anticipated first carbon
dividend required to be distributed under subparagraph (A) and shall be distributed the
month prior to the first collection of the carbon fee.
"(ii) Total ainounts disbursed as advanced carbon dividends shall be deducted from
the carbon dividends on a pro -rata basis over the first 3 years after the disbursement of
the -first carbon dividends.
11(d)ArmuNISTRATIVE AUT110RITY.—The Secretatv shall promulgate rules, guidance, and
regulations useful and necessary to implement the Carbon Dividend Trust Fund.".
(b)CLERICAL AM EN DMEN T. —The table o ['sections for subchapter A. of chapter 98 of such.
Code is amended by adding at the end the following new itern:
"Sec. 9512. Ombon Dividend1hist Fund.-.
SEC. 5. LIMITED DISCLOSLRE OF INFORMATION.
Section 61 03(l) of the Internal Revenue Code or 1986 is an-iended by adding at the end the
following new paragraphs. -
"(23)) LIMITED DISCLOSURL�-� OF tD-r3NTI,rY INFORMATION REL ATING ,ro CARBON
rlyiqffj#375���
"(A) DEPARTMENT OF TREASURY.—Individual identity information shall, -without
written request, be open to inspection by or disclosure to officers and employees of the
Department of the Treasury whose official duties require such inspection or disclosure for
purposes of administering section 9512 (relatingo, the Carbon Dividend Trust Fund).
https://,Aw,,v.congi,ess.go\,/bill/I 16tli-congress/liottse-bill/763,/text 4/25/2019
Text - H.R.763 - 116th Congress (2019-2020): Energy Innovation and Carbon Dividen... Page 16 of 20
"(11) COMMISSIONER OF SOCIA1, SECUEJTY. —The Commissioner of Social
Security shall, Oil written request, disclose to officers and employees of the Department of the
Treasury individual identity infon-nation which has been disclosed to the Social Security
Administration as is necessary to administer section 9512.
"(C) IUSTRJCI'ION 01\1 DTSCLOSURE.--Informatioii disclosed under this paragraph
shall be disclosed only for purposes of, and to the extent necessary in, carryiag out section
9512." ".
SEC. 6. NATIONAL ACADEN1Y OF SCIENCES REVIEW OF CARBON FEE AND
EMISSIONS REDUCTION SCHEDULE.
(a), I N G FNERA L.— Not later than I () ye -ars after the date of the enactincril of this Act, the
Secretary ofEnergy shall enter into an agreement with the National Academy of Sciences to prepare a
report, relating to the carbon fee imposed by section 9,902 of the Internal Revenue Code of 1986 and the
emissions reductions schedule established under section 9903 of such Code.
(b)REPOu' REQUIREMENTS. --Such report shall—
(1) assess the efficiency and effectiveness of the carbon fee in achieving the emissions
reduction targets set forthin section 9903 of such Code-,
(2) describe and make recoinmendations on whether tlic carbon fee rate and annual increases
prescribed by section 9902(c) of such Code should be ad - iusted in order to optimize the efficiency
and effectiveness of'this Act in achieving the emissions reduction targets set forth in section 9903
of such Code,
(3 )) describe the potential of the carbon fee to achieve future emissions targets set forth in
section 990' )(a) of such Code through the year 2050;
(4) describe and evaluate the effectiveness oftbe carbon fee in reducing emissions from key
sectors of the economy, including sectors of the economy that have decreased their carbon
emissions, sectors of the economy that have increased their carbon emissions, and sectors of the
economy in which carbon emissions have not changed:
(5) make findings and recon-flnendations to Federal departments and agencies and to Congress
on actions that could be taken to reduce carbon emissions in the sectors 0fthC CC0110111Y In Which
carbon emissions have not decreased;
(6) make findings and recommendations on adjusting regulations enacted under the Clean Air
Act and other Federal laws that affect economic sectors achieving the emissions reduction targets
set forth -1
hi section 990' of such Code; and
(7) provide an assessment of any other flactors determined to be material to the prograrn"s
efficiency and effectiveness in achieving the goals set forth in this act.
t_
(c)RtEporu NIADE PUDUcLy AVAILABLE.— Not later than 10 years after the date of the,
enactinent of this Act. the Secretary of Energy shall submit to Congress the report required under
subsection (a). SUCII report shall be made electronically available to the public and open to public
comment for at least 60 days before thefinal sabinission to Congress.
SEC. 7. IMPACT OF CARBON FEE ON BIOMASS USE AND CARBON SINKS.
littps-://www.coi-igress.gov/bill/I 16tli-congress/1-iouse-bill/763/text 4/25/2019
Text - H.R.763 - 116th Congress (2019-21020): Energy Innovation and Carbon Dividen... Page 17 of 20
(a) TUI OF BIOMASS.—The Secretary of Energy shall enter into anagreci-iientwitli the
National Academy of Sciences and the Administrator of the Environmental Protection Agency to
conduct a study, make recommendations. and submit a report regarding the impact of the carbon fee on
the use of biomass as an energy source and the resulting impacts on carbon sinks and biodiversity.
(b)STUDY RE QU IRE MEN TS.—The study conducted under subsection (a) by the National
Academy of Sciences shall include analysis, docuii.ientation, and determinations on—
(1) the carbon fee and its irripaef on the use of biomass as an energy source and greenhouse
gas emissions froin the use of biomass as an energy source,
no]
(2) the in-ipacts of the use of biomass as an energy source on carbon sinks and biodiversity:
(3) the various types of biomass that are being used as an energy source.
(c) R E C O M M FN DATION S.—Based on the findings and conclusions of the study, the National
Academy of Sciences shall make recommendations to Federal departments and agencies and to
Congress. The recommendations shall include any actions that should be taken to mitigate impacts of the
carbon fee on—
(1) increasing greenhouse gas emissions from the use of biomass as an energy source; and
(2) degradation of carbon sinks and biodiversity relating to the use of biomass as an energy
source.
(d) REPORT.—The National Academy Of Sciences shall prepare a report that includes any findings
and recommendations made pursuant to this section and. not later than 18 months after the date of the
enactment of this Act, make such report electronically available to the public.
SEC. 8. AMENDMENTS TO THE CLEAN AIR ACT.
(a) IES CTENE.RAL.--Title [1] of the Clean Air Act (42 U.S.C" 7601) is amended by adding at the
end the following:
"SEC. 330. SUSPENSION OF REGULATION OF FUELS AND EMISSIONS BASED ON
GRE EN USE GAS EFFECTS.
-(a) FUELS .—Unless specifically authorized in section 202, 211. 213, or 231 or this section, if a
carbon fee is' imposed by section 9902 or 9908 of the Internal Revenue Code of 1986 with respect to a
covered fuel. the Administrator shall not enforce any rule uses
limiting the emission of greenhouse
Z-- -
ti-oin the combustion of that fuel under this Act (or impose any requirement on any State to limit such
emission) on the basis of the emission's greenhouse gas effects.
-(b) E m issioN s. Unless specifically authorized in section 202, 211, 213, or 23 1. or this section,
if a fee is imposed by section 9904 of the Internal Revenue Code of 1986 with respect to a a uorinated
greenhouse gas, the Administrator shall not enforce any rule limiting such gas, under this Act (or impose
any requirement on any State to Iii -nit such gas) on the basis of the greenhouse gas effects of such gas.
"(c)AUTHORIZED REGULATION.—Notwithstanding subsections (a) and (b), nothing in this
t--
section limits the Administrator's authority pursuant to any other provision of this Act—
"(1) to limit the emission of any grcel-a-iouse gas because of any adverse impact on health or
welfare other than its greenhouse gas effects,
https:HNvww.congress.gov/bill/I I 6tl-i-congress/liouse-bill/763 /text 4/25/2019
Text - H.R.763 - 116th Congress (2019-2020): Energy Innovation and Carbon Dividen... Page 18 of 20
"(22) in limiting emissions as described in paragraph (1), to consider the collateral benefits of
limiting the emissions because ol'greenhouse gas effects;
"(3 :)) to limit the emission of black carbon or 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,
including,—
"(A) monitoring, reporting, and record-keeping requirements;
t'D I
"(B) conducting or supporting investigations-, and
-(C) information collection.
"(d)EXCEPTION FoR CERTAIN GREENflOUSE MSAs Emissio-NS.—NotNN�ithstai-idincy
subsections (a) and (b), nothing in this section limits the Administrator's authority to regulate
greenhouse gas emissions from
—
"(1) sources that—
(A) are Subject to subpart 0000 or 0000a ofpart 60 of title 40, Code of Federal
Regulations, as in effect Or January 1, 2020; or
_(B) would be subject to such subpart 0000 or subpart 0000a if such subpart applied
, ed
regardless of the date on which construction. modification, or reconstruction of the source
involved corrimenced; or
"(2) Pig` W Treatment Plants (as defined in section 403.3(r) .3(r) of title 40, Code of Federal
Regulations).
"(e)SUSPFNSION ExpiRATION.
"(1) DETERMINATION.—The Administrator- shall make a determination by March 30,
2030, and no less than once every five years thereafter, based on the deterinination required by
section 9903 )(b a of the Internal Revenue Code of 1986, as to whether cumulative greenhouse gas
emissions from covered fuels Subject to taxation under section 9902 Of Such Code during the period
from calendar year 2022 through the calendar year preceding the determination exceed the
cumulative emissions for that period that would have occurred if the emission reduction targets in
section 903(a)(2) (a)(2) of such Code were met,
"(2) CONSEQUENCE OF CUMULATIVE EMISSIONS EXCEEDANCE.--If the
Administrator determines under paragraph (1) that cumulative greenhouse -as emissions from
covered fuels subject to tax under section 9902 of the Internal Revenue Code of 1986 exceed the
cumulative emissions for the period covered by the determination that would ha\,c occurred if the
emission reduction targets in section 9903(a)(2) of such Code were met. then the prohibitions in
subsection (a.) of this section., and in section 211 (c)(5) of this Act, shall cease to apply.
"MAssURING ENVIRONMENTAL INTEGRITY.
"(1) AUTHOPUTY.—If the Administrator determines pursuant to subsection (e)(1) of this
section that the emission reduction targets in section 9903 (a)(2) of the Internal Revenue Code of
1986 are not met—
https://www.congress.gov/bill/116th-congress/ho use-bill/763/text 4/25/2019
Text - H,R.763 - 116th Congress (2019-2020): Energy Irmovation. and Carbon Divider"... Page l9of2O
'-(A') subsections (a) and (b) shall cease to apply-, and
-(B) the Administrator shall-
-(i) issue such regulations as the Administrator deems necessary to bring greenhouse
gas emissions from covered fuels subject to taxation Linder section 9902 of the Internal
Revenue Code of 1986 to levels that are at or below the emission reductions targets in
section 990' )(a)(21) of such Code; and
-(ii) require in such regulations that additional reductions in greenhouse gas
emissions are achieved to fully compensate for any amount by which greenhouse gas
emissions from covered fuels subject to taxation under section 9902 of such Code have
exceeded the targets in section 990' :(0)(2) of such Code.
"(2) DEADLINE FOR FINALIZING REGULATIONS.—The Administrator shall finalize
any regulations required by paragraph (1) not later than two years after the Administrator makes the
relevant determination. pursuant to such paragraph.
"(3) ACHIEVEMENT OF ADDITIONAL REDUCTIONS.—Regulations issued pursuant to
paragraph (1) shall ensure that any additional reductions required by paragraph (1)(B)(il) are fully
Z=
achieved by no later than eight years after the Administrator makes the determination pursuant to
subsection (e)(1) described in paragraph (1).
"(g) DEFINITIONS, In this section., the terms 'greenhouse gas' and 'greenhouse gas effects' have
the meanings given to those terms in section 9901 of the Internal Revenue Code of 1986,".
(b)NEw MOTOR VEHICLES AND NEW MOTOR VEH[CLE ENGINES.—Section202(b)
of the Clean Air Act (42 U,S.C. 75 211 (b,)) is amended—
(1) paragraph byredesignating the second 3) (as redesignated by section 2' ) 0(4)(C) of Public
z,
Law 101-549 (104 Stat. 2529)) as paragraph (4), and
(2) by adding at the end the following:
"(5) Notwithstanding subsections (a) and (b) of section 330, the Administrator may ---
`-(A) limit the emission of any greenhouse gas (as defined in section 9901 of the Internal
ReITYRIC Code of 1986) on the basis of the emission's greenhouse gas effects (as defined in
I t-- -
section 9901 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)(] );, and
-(B) grant a waiver Linder section 209(b)(1) for standards for the control of greenhouse
gas emissions.".
(c) Fu ELS.—Section 211(c) of the Clean Air Act (42 IJ.S.C. 7545(c)) is amended by adding at the
end the following new paragraph:
z-
"(5) The Administrator shall not, pursuant to this subsection, impose on any manufacturer or
processor of fuel any requirement for the purpose of reducing the emission of any greenhouse gas (as
defined in sectilon 9901 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 9901 of the Internal Revenue
Code of 1986).".
littps://www.congress.gov/bill/I 16th-congress/house-bill/763/text 4/25/2019
text - H.R.763 - 116th Congress (2019-2020): Energy Innovation and Carbon Dividen... Page 20 of 20
(d)NONROAD ENGINES AND VLHICLEs Emrssioxs STANDARDS.—�ectiot1213oft,'-ic
Clean Ai r .pct I S, C, 7`x.4 T) is amended by adding at the end the [o I I owi ng:
"(e)GREENHOUSE GAs E'miss[ONS.— Nlotwitlistanding section 330(a),, the Administrator
may limit the emission of any greenhouse gas (as defined in section 9901 of the Internal Revenue Code
of 1986) on the basis ofthe emission's greeffliouse gas effects (as defined in section 9901. of the Internal
Revenue Code of` 1986) from any nonroad crigines and nonroad vehicles subject to regulation Linder this
,section.".
(c) A I RCRA FT EMISSION STAN D A R D S .—Section 231 of the Clean Air Act (42 U.S.C, 7571. )
is amended by adding at the end the following new subsectiOn:
"(d) "(d) Notwithstanding subsections (a) and (b) of" section 3 )3 W. the Administrator may limit the
emission of any greenhouse gas (as defined in section 9901 of the Internal Revenue Code of 1986) on
the basis of the emission's greenhouse gas effects (as defined in section 9901 of the Internal Revenue
Code of 1986) from any class or classes oCaircraft engines. so long as any such limitation is not more:
stringent than the standards adopted by the International Civil Aviation Organization.".
Z�11 C,
SEC. 9. EFFECTIVE DATE.
The amendments made by this Act shall take effect on the date of the enactment of this Actexcept
the carbon 1ee under sectioi,l 99021 of the Internal Revenue Code of 1986 shall apply to uses, sales. or
transfers more than 270 days alter the date of the enactment of this Act.
SEC. 10. PRINCtPLE OF INTERPRETATION.
Int the case of ambiguity, the texts of this statute and its amending texts shall be interpreted so as to
allow f.*or the most effective abatement or greenhouse gas emissions.
SEC. 11. NO PRE, EM PTION OFSTATE LAW.
Nothing in this legislation shall preempt or supersede, or be interpreted to pre -Inapt or supersede,
any State law or regulation.
littps://vavw.c()ng;ress.gov/bill/11 th-congress/ho use-bill/7 6 3 /text 4/25/2019
Frequently Asked Questions
rloysTivomy,DT-JlTI# =1
SuDDort
1wi
This policy puts a fee on fossil fuels like coal,
oil, and gas. It starts low, and grows over
time. This will drive down carbon pollution
because energy companies, leading
industries, and American consumers will
move toward cleaner, cheaper options.
The money collected from the carbon fee is
allocated in equal shares every month to the
American people to spend as they see fit.
Program administrative costs are paid from
the fees collected. The government does not
keep any of the money from the carbon fee.
To protect U.S. manufacturers and jobs,
imported goods will pay a border carbon
adjustment, and goods exported from the
United States will receive a refund under this
policy.
This policy preserves effective current
ue jxd e -z,", 41,2-4—s,4ul
pauses the EPA authority to regulate the CO2
and equivalent emissions covered by the fee,
for the first 10 years after the policy is
enacted. If emission targets are not being
met after 10 years, Congress gives clear
direction to the EPA to regulate those
. •a . 23=0
quality, air quality, health or other issues.
This policy's price on pollution will lower
carbon emissions far more than existing and
pending EPA regulations.
See the full text of the Enerzv Innovation and
Carbon Dividend Act
How It Works [Infographic]
M
Yes. While some people and industries are already cleaning up their carbon emissions, others
will not move forward until there is a plan in place to incentivize them. When the program has
reached its goal of cutting U.S. greenhouse gas emissions 90 percent below the 2015 level, it will
automatically end.
The overwhelming majority of scientists have concluded that climate change is an urgent
problem. A majority of Americans have come to agree, and are worried about the impact
climate change will have on their livelihoods. Polls indicate Democrats, Independents, and
Republicans are becoming more united in their support for action to curb carbon dioxide
It is a gradually rising fee on the carbon content of fossil fuels, to be assessed at the first point of
sale. The fee starts at $15 per metric ton of CO2 equivalent emissions, and increases $10 per
year. It encourages people and businesses to substitute cleaner energy sources, or find more
efficient ways to use energy.
In the first year, the carbon dividend will be about $16-24 per month, per adult. As the carbc
fee rises annually, your monthly carbon dividend will also increase. i
Equal shares are allocated to every adult with a SS N or ITIN (individual taxpayer identification
number), with half shares allocated for each child under 19 years old. The dividend is
administered by the Treasury Department, with costs over time not to exceed 2% of revenues.
The first monthly payment will be made in the month prior to the program starting. The carbon
dividend will be included in gross income for income tax purposes, but will not be included in
means testing for Federal assistance. Nobody will lose Federal support as a result of carbon
dividend.
If you file taxes, your carbon dividend will be distributed automatically each month. Similar to
how your tax refund is mailed or direct deposited by the IRS every spring, your carbon dividend
will come to you every month. If you do not file taxes, you will need to fill out a simple form
indicating your number of dependent children and providing information on where to send
No. A tax has the primary purpose of raising revenue. By contrast, the government doesn't keep
the carbon fee revenue; instead, it is recycled to households as a carbon dividend. This doesn't
MINE
this the same as cap and trade?
No. Cap and trade works by setting a "cap," (maximum for total emissions) and then selling and
trading permits for the right to pollute up to that cap. It requires bureaucracy to implement and
run, and it creates price volatility that is difficult for businesses. A carbon fee is far simpler, with
less bureaucracy, lower costs, and more predictability.
Currently the U.S. does not have greenhouse gas regulations in effect that can achieve the
reduction in emissions needed to address the climate crisis. This policy puts a price on
pollution, which will lower carbon emissions far more than existing and pending EPA
regulations.
The Energy Innovation Act pauses EPA regulations of the CO2 and equivalent emissions which
are covered by the bill for 10 years. If emission targets are not being met after 10 years,
Congress gives clear direction to the EPA to regulate emissions to meet those targets.
The Energy Innovation Act explicitly leaves in place the limits on emissions from vehicles that are
part of the Corporate Average Fuel Economy (CAFE) Standards, including California's waiver to
apply more stringent emission standards.
The Energy Innovation Act also does not impact EPA regulations related to water quality, air
quality, health or other issues.
There are some forms of energy we buy directly, like gasoline and electricity. As a rule of thumb,
each $10 per metric ton carbon fee would add about 11 C to a gallon of gasoline, about 6C to a
therm of natural gas, and 0.9C to a kilowatt-hour of coal -generated electricity. Energy costs are
also embedded in most products and services we consume, so those would increase in price
depending on carbon footprint, ranging from 0,2 percent for a TV to 1.1 percent for an airplane
ticket (for each $1 0/metric ton increase).
FM�M Mill Eliffil! 11 1 a . . rlfl��
American economy. This policy provides an exemption for any diesel or gasoline used for
agricultural purposes. Emissions from biological agricultural processes are not covered by this
bill, as it applies only to fossil fuel emissions.
How will manufacturers be affected?
The Energy Innovation and Carbon Dividend Act includes a border carbon adjustment, which
will apply to carbon -intensive trade -exposed imports from countries that do not price carbon
similarly. This kills any incentive for U.S. companies to move production to a country that allows
them to pollute more at lower cost. U.S. manufacturers will lose no ground economically for
producing products with a lower carbon footprint.
How will other industries be affected?
This policy will generate 2.1 million additional jobs in the first 10 years. According to a 2014 study
by Regional Economic Models, Inc., the biggest job gains would be in health care, retail and
other service industries. This is because people have more money in their pockets to spend, and
these labor-intensive industries respond to increased consumer spending by creating more jobs.
The Energy Innovation and Carbon Dividend Act provides a refund of carbon fee costs in
covered fuels used by the military, including gasoline, diesel, or other fuels used for ships,
planes, and ground transport, plus coal, oil, or natural gas used to generate electricity on
military bases and in field operations.
The U.S. military has been actively pursuing alternative sources of energy for strategic an'-'
environmental reasons, and so will benefit from new developments in renewable and lo
carbon energy technologies that will allow further emissions reductions. I
I #FIX I NMI W
Under this policy, the U.S. will not shoulder any burden or costs on behalf of other countries. On
the contrary, 12 of the world's largest economies already have carbon pricing policies planned or
in place. For example, in December 2017, China launched a nationwide carbon market targeted
at their power sector, and they already regulate emissions from the electricity sector. India is
rapidly deploying renewable energy and has imposed a tax on coal that has doubled in recent
years. Both are imposing costs on pollution as a means to curb emissions, but like all nations,
they still look to the U.S. for leadership and innovation.