[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3198 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
1st Session
S. 3198
To amend the Internal Revenue Code of 1986 to impose a fee on certain
products imported into the United States based on the pollution
intensity associated with the production of such products, and for
other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 2, 2023
Mr. Cassidy (for himself and Mr. Graham) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to impose a fee on certain
products imported into the United States based on the pollution
intensity associated with the production of such products, and for
other purposes.
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 ``Foreign Pollution Fee Act of 2023''.
SEC. 2. SENSE OF CONGRESS; PURPOSE.
(a) Sense of Congress.--It is the sense of Congress that--
(1) it is in the interests of the United States to strive
for environmental protection in order to protect human health;
(2) the nature of environmental challenges are
transnational in nature, but international cooperative efforts,
including those led by the United States, have not resulted in
many trading partners adopting measures to address those
challenges;
(3) the transnational issues related to environmental
protection and pollution impact the environment and public
health in the United States and in turn present national
security risks because of the environmental and public health
risks;
(4) the United States--
(A) has adopted many environmental protections,
including the Clean Air Act (42 U.S.C. 7401 et seq.),
the Federal Water Pollution Control Act (33 U.S.C. 1251
et seq.), the Toxic Substances Control Act (15 U.S.C.
2601 et seq.), and more than 15 other major
environmental protection laws that--
(i) add costs to the production of goods in
order to secure the benefits of environmental
protection and conservation efforts; and
(ii) serve to meaningfully decrease
greenhouse gasses such as carbon dioxide
(CO<INF>2</INF>), methane (CH<INF>4</INF>),
nitrous oxide (N<INF>2</INF>O), sulfur
hexafluoride (SF<INF>6</INF>),
hydrofluorocarbons (HFCs), perfluorocarbons
(PFCs), and other fluorinated greenhouse gases;
(B) is the world's largest consumer market and its
economy is highly integrated into the world; and
(C) bears responsibility to ensure that the United
States market does not incentivize forum shopping for
the production of goods to jurisdictions with low
environmental standards to obtain a competitive cost
advantage while undermining efforts to address
transnational environmental and resource challenges as
well as global public health;
(5) it is necessary to apply measures to ensure the
environmental conservation efforts of the United States are not
frustrated through such forum shopping; and
(6) the development needs of low-income and lower-middle-
income countries must be reasonably taken into consideration
while strengthening environmental protection.
(b) Purpose.--It is the purpose of this Act to raise global
environmental performance to ensure a healthy environment and secure
global public health benefits.
SEC. 3. RULES OF CONSTRUCTION.
(a) Domestic Production.--Nothing in this Act, or any amendments
made by this Act, shall be construed to authorize the creation of any
carbon tax, fee, pricing, or other mechanism that imposes additional
costs to any covered product (as defined in section 4695(a) of the
Internal Revenue Code of 1986, as added by this Act) which is produced
domestically and sold, used, further refined, or distributed within
United States or exported to another country for sale or use.
(b) Application to Other Laws.--Nothing in this Act, or any
amendments made by this Act, shall be construed to authorize new
environmental standards of performance or impact calculations of
compliance to standards under the Clean Air Act (42 U.S.C. 7401 et
seq.) or any other Act which examines the environmental impact of
domestic production or proposed production.
(c) Data Collection.--Except as expressly authorized under this
Act, nothing in this Act, or any amendments made by this Act, shall be
construed to authorize additional authority for any agency to collect
additional pollution data from a domestic producer.
TITLE I--FOREIGN POLLUTION FEE
SEC. 101. FOREIGN POLLUTION FEE.
(a) In General.--Chapter 38 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subchapter:
``Subchapter E--Foreign Pollution Fee
``Sec. 4691. Imposition of foreign pollution fee.
``Sec. 4692. Determination of variable charge.
``Sec. 4693. Calculation of pollution intensity.
``Sec. 4694. Treatment of international partnerships.
``Sec. 4695. Covered products.
``Sec. 4696. National Laboratory Advisory Board on Global Pollution
Challenges.
``Sec. 4697. Definitions.
``Sec. 4698. Establishment process and reassessments.
``SEC. 4691. IMPOSITION OF FOREIGN POLLUTION FEE.
``(a) In General.--
``(1) Imposition of fee.--In the case of any covered
product which is imported by a covered entity into the United
States after the applicable date, there is hereby imposed a fee
upon entry or importation of such covered product in an amount
equal to the product of--
``(A) the amount of such covered product which is
imported into the United States, and
``(B) the variable charge (as determined under
section 4692).
``(2) Applicable date.--
``(A) In general.--For purposes of paragraph (1),
the applicable date shall be the date which is 36
months after the date of enactment of this subchapter.
``(B) Postponement.--With respect to any covered
product produced in a low-income country or lower-
middle-income country, the Secretary may extend the
applicable date under such clause for a period of not
greater than 12 months if the United States Trade
Representative issues a certification to the
appropriate congressional committees that such country
is making progress towards an international partnership
agreement.
``(b) Fee Due.--
``(1) In general.--The fee imposed under this section with
respect to any covered product shall be paid by the covered
entity which imported such product at the same time, and
through the same electronic portal, that any payment of custom
duties are made.
``(2) Security for fees.--The Secretary may issue such
regulations or other guidance to require, or may direct
officers of U.S. Customs and Border Protection to require, a
covered entity to file with the Secretary a bond or other
security in such amount and with such conditions as the
Secretary determines necessary to ensure payment of the fees
imposed under this section.
``(c) Measurement of Imported Products.--The amount of any covered
product which is imported into the United States shall be determined by
the measure ordinarily used in the course of trade of such covered
product (as determined pursuant to the 6-digit HTS subheading number
with respect to such product).
``(d) Amounts and Fees.--The Commissioner of U.S. Customs and
Border Protection shall allow payment of the fee imposed under this
section for such product to be paid by the covered entity in the same
manner in which payment of custom duties are made.
``SEC. 4692. DETERMINATION OF VARIABLE CHARGE.
``(a) In General.--The variable charge is an ad valorem fee which
is specific to a covered product and determined pursuant to the tier to
which such covered product is assigned.
``(b) Tiers.--
``(1) In general.--Tiers for covered products shall be
established as follows:
``(A) For covered products for which the pollution
intensity difference is greater than 10 percent and not
greater than 50 percent, tiers shall be established at
each 5-percentage-point increment.
``(B) For covered products for which the pollution
intensity difference is greater than 50 percent and not
greater than 200 percent, tiers shall be established at
each 10-percentage-point increment.
``(C) For covered products for which the pollution
intensity difference is greater than 200 percent, tiers
shall be established at each 20-percentage-point
increment.
``(2) Application of tiers.--
``(A) In general.--The purposes of the tiers under
this section are as follows:
``(i) To provide for a standardized
organization model for each covered product to
allow for proper implementation and application
of the fee imposed under section 4691, with
such tiers to be based on the different
pollution intensities for a given covered
product based on the country of origin of such
covered product (or, subject to section 204 of
the Foreign Pollution Fee Act of 2023, the
manufacturer of such covered product).
``(ii) To allow for determinations of the
variable charge under this section in relation
to the tiers in a manner which is specific to
the covered product.
``(B) Use of tiers in determining variable
charge.--
``(i) In general.--In accordance with
paragraph (1), tiers shall be established for
each covered product, with the variable charge
assigned to each tier in a manner which is
consistent with achieving the goals described
in subsection (c)(2) with respect to such
covered product.
``(ii) Prohibition.--The variable charge
assigned to a particular tier for a covered
product shall not be used to determine the
variable charge assigned to the same tier for a
different covered product.
``(3) Assignment.--Each covered product shall be assigned
to the applicable tier which corresponds to the pollution
intensity difference with respect to such covered product.
``(c) Variable Charge.--
``(1) In general.--The variable charge assigned to each
tier for a covered product shall be specific to the achievement
of the goals in paragraph (2).
``(2) Goals.--
``(A) Phase one goals.--During the 6-year period
beginning after the applicable date described in
section 4691(a)(2) (or, in the case of any covered
product added pursuant to subsection (d) or (e) of
section 4695, the 6-year period subsequent to the date
described in subsection (f) of such section), the goal
utilized for establishment of the variable charge with
respect to any covered product shall be--
``(i) in the case of any covered product
for which the average pollution intensity
difference is greater than 50 percent, to alter
trade flows such that the average pollution
intensity difference associated with such
covered product is not greater than 50 percent,
``(ii) in the case of any covered product
for which the average pollution intensity
difference is greater than 25 percent and not
greater than 50 percent, to alter trade flows
such that the average pollution intensity
difference associated with such covered product
is not greater than 25 percent, and
``(iii) in the case of any covered product
for which the average pollution intensity
difference is not greater than 25 percent, to
alter trade flows such that the average
pollution intensity difference associated with
such covered product is not greater than 10
percent.
``(B) Phase two goals.--During the 6-year period
subsequent to the initial 6-year period described in
subparagraph (A), the goal for establishment of the
variable charge with respect to any covered product
shall be--
``(i) in the case of any covered product
which, for the initial 6-year period described
in such subparagraph, was described in clause
(i) of such subparagraph, to alter trade flows
such that the average pollution intensity
difference associated with such covered product
is not greater than 25 percent,
``(ii) in the case of any covered product
which, for the initial 6-year period described
in such subparagraph, was described in clause
(ii) of such subparagraph, to alter trade flows
such that the average pollution intensity
difference associated with such covered product
is not greater than 10 percent, and
``(iii) in the case of any covered product
which, for the initial 6-year period described
in such subparagraph, was described in clause
(iii) of such subparagraph, to maintain
achievement of the goal described in such
clause.
``(C) Phase three goals.--For any year subsequent
to the period described in subparagraph (B), the goal
for establishment of the variable charge with respect
to any covered product shall be to alter trade flows
such that the average pollution intensity difference
associated with such covered product is not greater
than 10 percent.
``(3) Progression of variable charge.--
``(A) In general.--To the maximum extent
practicable, the variable charges assigned to each tier
of a covered product to achieve the goals described in
paragraph (2) shall progress through each tier in a
manner consistent with an increasing linear
interpolation of the variable charge.
``(B) Exception.--With respect to any tier for a
covered product and the variable charge assigned to
such tier, the Board may recommend and the Secretary
may finalize a variable charge that deviates from a
linear interpolation of the variable charge as
described in subparagraph (A), provided that such
alteration allows for a higher likelihood that the
goals described in paragraph (2) will be attained.
``(4) Minimization of domestic cost increases.--For
purposes of this subsection, any variable charge shall be
established in a manner which ensures that the goals described
under paragraph (2) are attained while minimizing any potential
increase in domestic costs.
``(d) Exceptions.--
``(1) Comparable to baseline pollution intensity.--In the
case of any covered product for which the pollution intensity
difference is not greater than 10 percent, the variable charge
shall be zero.
``(2) Insufficient domestic production.--
``(A) In general.--In the case of any covered
product for which the Secretary determines there is not
sufficient domestic production with respect to such
product, the variable charge shall be zero.
``(B) Definition.--
``(i) In general.--For purposes of this
paragraph, the term `sufficient domestic
production' means any covered product for which
an equivalent product which is produced by
domestic producers within the United States
constitutes greater than the applicable
percentage of domestic consumption of such
product.
``(ii) Applicable percentage.--
``(I) In general.--For purposes of
clause (i), the applicable percentage
shall be equal to--
``(aa) 5 percent, or
``(bb) in the case of any
covered product described in
subclause (II), such percentage
below 5 percent as is
determined appropriate by the
Secretary.
``(II) Specified product.--A
covered product described in this
subclause is a product--
``(aa) which the Secretary,
in consultation with the United
States Trade Representative,
has determined requires an
applicable percentage below 5
percent for purposes of
supporting--
``(AA) national
security,
``(BB) prevention
of dumping from foreign
countries, or
``(CC) development
of a domestic industry,
or
``(bb) for which, as a
result of an international
partnership agreement, a
country which is a party to
such agreement produces not
less than 5 percent of United
States domestic consumption of
such covered product.
``(C) Adjustment.--In the case of any covered
product for which no variable charge is imposed under
this section pursuant to a determination under
subparagraph (A), the Secretary shall--
``(i) review such determination not less
than annually, and
``(ii) if the Secretary's review determines
that sufficient domestic production has been
attained with respect to such product,
terminate application of subparagraph (A) for
such product.
``(D) Exception.--This paragraph shall not apply
with respect to any product which is included as a
covered product pursuant to section 4695(d).
``(3) National security.--
``(A) Product waiver.--
``(i) In general.--The Secretary, in
coordination with the Secretary of Defense and
the Commissioner of U.S. Customs and Border
Protection, may reduce the variable charge to
zero for any covered product if the Secretary
determines that such product is imported for
purposes of fulfilling a contract with--
``(I) the Department of Defense, or
``(II) any contractor of the
Department of Defense.
``(ii) Form.--
``(I) In general.--Any reduction
under this subparagraph shall only
apply to a covered product--
``(aa) for the period that
the contract described in
clause (i) is in effect, and
``(bb) with respect to the
quantity of such covered
product which is required to
fulfill the contract described
in such clause.
``(iii) Publication.--The Secretary shall
make public any reduction under this
subparagraph with respect to a covered product
unless the publication of such information
would negatively affect national security.
``(B) International partnership agreements.--In the
case of--
``(i) any upper-middle-income country, or
``(ii) any country which has entered into a
mutual defense treaty or security partnership
with the United States,
the United States Trade Representative (in consultation
with the Secretary of Defense and the Secretary of
State) may permit such country to be subject to the
requirements applicable to a low-income country or a
lower-middle-income country under section 203 of the
Foreign Pollution Fee Act of 2023 if completion of an
international partnership agreement with such country
is determined to assist in the national security or
geopolitical positioning of the United States.
``(4) Free trade agreement.--In the case of any covered
product--
``(A) which is produced in a country with which the
United States has a free trade agreement,
``(B) for which all of the transforming parts or
components parts necessary to produce such covered
product are produced within--
``(i) any country with which the United
States has a free trade agreement, or
``(ii) the United States, and
``(C) for which the pollution intensity difference
is not greater than 50 percent,
the variable charge shall be zero.
``(e) Limitation.--Subsection (d) shall not apply to any covered
product which is produced in a country which is classified as a
nonmarket economy country unless such country--
``(1) is a low-income country or a lower-middle-income
country, and
``(2) is a party to an international partnership agreement.
``(f) Circumvention.--
``(1) In general.--If the Secretary (in consultation with
the United States Trade Representative, the appropriate
congressional committees, and any relevant Federal agency)
determines that any country is attempting to circumvent
application of the fee imposed under section 4691, the
Secretary shall adjust the variable charge in such manner is as
deemed necessary to offset such circumvention.
``(2) Inclusion.--For purposes of this subsection,
circumvention of the fee imposed under section 4691 shall
include--
``(A) artificially decreasing the price for which a
covered product is sold, and
``(B) subsidization to producers within the country
of origin to offset such fee.
``(3) Determination.--If the Secretary determines that a
country is attempting to circumvent application of the fee
imposed under section 4691, the Secretary shall publish in the
Federal Register--
``(A) a justification for such determination,
``(B) the adjusted variable charge applicable to
any covered product produced in such country, and
``(C) the date (not later than 6 months after the
date of publication) on which the adjusted variable
charge will begin application.
``SEC. 4693. CALCULATION OF POLLUTION INTENSITY.
``(a) In General.--For purposes of determining the applicable tiers
for covered products under section 4692(b), the Secretary and the Board
shall develop consistent methods for calculating the pollution
intensity of any covered product which are specific to the country of
origin.
``(b) Form.--
``(1) In general.--With respect to any covered product, the
pollution intensity of such product shall be expressed based on
the average pollution intensity associated with the
manufacturing of such product (including point source pollution
and upstream pollution) in the country of origin.
``(2) Specificity.--
``(A) In general.--To the maximum extent
practicable, the pollution intensity of a covered
product shall be specific to the applicable 6-digit HTS
subheading number.
``(B) Crude oil.--In the case of a covered product
described in section 4695(a)(4), the pollution
intensity of the covered product shall be specific to
the applicable 8-digit HTS subheading number.
``(3) Exception.--In the case of a covered product (with
the exception of a covered product described in section
4695(a)(4)) for which data is not available to determine
pollution intensity in a manner specific to the 6-digit HTS
subheading number, the Secretary and the Board may determine
the pollution intensity based on the applicable 4-digit HTS
heading.
``(c) Data.--
``(1) In general.--To the extent necessary for any
determination with respect to any covered product, the
Secretary and the Board may use--
``(A) economic, statistical, and engineering models
and analysis,
``(B) pollution monitoring data from facilities,
satellites, and other pollution monitoring tools,
provided that such data--
``(i) is publicly available, or
``(ii) is not publicly available but is
able to be accessed and verified on a
consistent basis by the Secretary or the head
of any relevant Federal agency,
``(C) voluntarily reported data, provided that such
data is--
``(i) a product of monitored emissions, and
``(ii) able to be verified by the Secretary
or the Board,
``(D) the best available information on technology
performance levels for the industrial sector that
produces such product, and
``(E) manufacturing and pollution data which is
specific to a covered product, including relevant data
with respect to the point source pollution and upstream
pollution, the industrial sector which is associated
with such product, and the country of origin.
``(2) Data preference.--
``(A) In general.--To the greatest extent possible,
in determining baseline pollution intensity, the
Secretary and the Board shall give preference to data
collected through regulatory reporting methods by the
Environmental Protection Agency.
``(B) Data collection.--To the extent necessary to
carry out the purposes of this subchapter, the
Administrator may alter the Greenhouse Gas Reporting
Program (as established under part 98 of title 40, Code
of Federal Regulations) to include the reporting of
production from stationary sources regarding--
``(i) the quantity of any product produced,
and
``(ii) the heading, subheading, and
statistical reporting number of the HTS under
which the product would be classified if the
product were imported.
``(3) Access to information.--
``(A) In general.--The head of every relevant
Federal agency shall provide the Secretary and the
Board with any information held by or otherwise
available to the head of such Federal agency which is
relevant to the calculation of pollution intensity.
``(B) Confidentiality.--With respect to any
information or data relating to operational practices
or manufacturing processes of any producer of a covered
product which is provided to the Secretary and the
Board pursuant to subparagraph (A), unless such
information or data is otherwise publicly available,
the head of any relevant Federal agency shall take such
measures as are necessary to ensure that such
information and data is aggregated and anonymized.
``(d) Methodology.--
``(1) In general.--For purposes of creating a process for
calculating the pollution intensity of any covered product
under subsection (a), the Secretary and the Board shall--
``(A) use the best, and most granular, data
available in the United States to establish the
baseline pollution intensity with respect to such
product, and
``(B) in the case of a covered product produced
outside of the United States, base the calculation of
the pollution intensity of such product on the process
used to establish the baseline pollution intensity for
such product.
``(2) Treatment of different manufacturing methods and
locations.--For purposes of calculating the baseline pollution
intensity of a covered product, such calculations shall seek to
account for differences in pollution intensity due to--
``(A) varied manufacturing methods,
``(B) differences in geographic location associated
with upstream pollution intensity, and
``(C) the proportion of manufacturing of such
product which is associated with the methods and
differences described in subparagraphs (A) and (B)
relative to total domestic production of such product.
``(3) Treatment of recycled materials.--Any recycled
material (as defined in section 246.101(w) of title 40, Code of
Federal Regulations) shall be deemed to have a pollution
intensity of zero if recycled (as defined in section 246.101(x)
of such title) into--
``(A) a contributing part,
``(B) a component part, or
``(C) a covered product.
``(4) Treatment of carbon oxides.--
``(A) In general.--Any carbon oxide captured from
manufacturing processes or from ambient air by the
producer of a covered product, or verifiably purchased
by the producer of a covered product as an offset from
an entity operating carbon capture infrastructure,
shall have the effect of reducing the pollution
associated with the production of a covered product if
such carbon oxide is--
``(i) utilized in the creation of a
contributing part, component part, transforming
part, or covered product,
``(ii) utilized to help access a
contributing part, component part, transforming
part, or covered product that is extracted from
a geologic formation, or
``(iii) verifiably sequestered in the
country of origin of such product in a manner
which provides an accurate accounting of the
storage of such carbon oxide.
``(B) Accounting.--Any carbon oxide utilized or
sequestered as described in subparagraph (A) shall be--
``(i) treated as a reduction in pollution
associated with the production of a covered
product based on the total tons of carbon oxide
utilized or sequestered, and
``(ii) eligible to offset all forms of
pollution based on the relevant carbon dioxide
equivalent value.
``(5) Treatment of covered products with multiple parts.--
``(A) In general.--In the case of a covered product
described in subparagraph (B) which contains any
covered component part or covered transforming part, to
the maximum extent practicable, the pollution intensity
of such covered component part or covered transforming
part shall be calculated based on--
``(i) the amount of such covered component
part or covered transforming part originating
in each country of origin (including the United
States) which supply such covered component
part or covered transforming part for the
covered product, and
``(ii) the pollution intensity associated
with production of such covered component part
or covered transforming part within the country
of origin.
``(B) De minimis rule.--For purposes of
subparagraph (A), a covered component part or covered
transforming part shall not be included if such covered
component part or covered transforming part accounts
for less than 5 percent of--
``(i) the total weight of the covered
product,
``(ii) the total monetary value of the
covered component parts or covered transforming
parts contained in the covered product, and
``(iii) the pollution intensity of the
covered product (as otherwise determined under
such subparagraph).
``(C) Additional measurements.--In the case of a
petition to include a product which contains any other
covered component part or covered transforming part as
a covered product under section 4695(d), such
petition--
``(i) shall provide such information as is
deemed necessary to make any calculation under
subparagraph (A), and
``(ii) may include, at the election of the
petitioner, additional calculations to achieve
an accurate determination of the pollution
intensity of such product which are not tied
solely to the pollution intensity of the
covered component part or covered transforming
part.
``(6) Treatment of facility-specific agreements.--For the
purpose of determining the pollution intensity of any covered
product which is produced in a foreign country, if--
``(A) such product is produced in a facility which
is--
``(i) located in such country, and
``(ii) covered by an agreement established
under section 204 of the Foreign Pollution Fee
Act of 2023, and
``(B) the pollution intensity of the product
produced in such facility would otherwise lower the
average pollution intensity associated with the
production of such product in such country,
the pollution intensity of the product produced in such
facility shall not be included for purposes of calculating the
pollution intensity associated with production of such product
in the country of origin.
``(e) Alterations for Foreign Data.--For purposes of determining
the pollution intensity values with respect to any country of origin
for a covered product, if--
``(1) the baseline pollution intensity for such covered
product was determined utilizing a methodology based on data
described in subsection (c) which was provided at a more
localized level, or in more granular detail, than the data
available with respect to the country of origin, or
``(2) due to unavailable or unverifiable data with respect
to the country of origin, such determination required
estimation through modeling which was not performed for
purposes of the calculation of the baseline pollution
intensity,
the pollution intensity otherwise determined under this section with
respect to production of such covered product in such country of origin
shall be increased by 20 percent.
``(f) Foreign Illustration of Pollution Intensity.--
``(1) In general.--Any country may provide the Secretary
with access to any data necessary to establish an alternative
pollution intensity with respect to any covered product.
``(2) Alternative pollution intensity.--
``(A) In general.--In the case of a country which
provides data described in paragraph (1), the Secretary
may adjust the pollution intensity with respect to any
covered product, provided that the country providing
such data--
``(i) ensures the accuracy of all relevant
data for all covered products,
``(ii) provides data at a level of
granularity which satisfies the methods
established by the Board, and
``(iii) provides the data consistently and
in a manner that is verifiable by the
Secretary.
``(B) Role of the board.--For purposes of this
paragraph, the Board shall assist the Secretary by
verifying relevant data and calculating adjustments to
pollution intensities.
``(3) Publication of alternative pollution intensity
values.--In the case of any pollution intensity with respect to
any covered product which is adjusted pursuant to paragraph
(2)--
``(A) the Secretary shall publish such adjustment
in the Federal Register, and
``(B) such adjustment shall take effect in the
following calendar year.
``(g) Treatment of Potential Circumvention and Outliers.--
``(1) In general.--On or after the date of the first
reassessment required under section 4698, the Secretary, in
consultation with the United States Trade Representative, may
assign a product which is produced by a foreign producer to a
tier which is different from the tier determined under section
4692 with respect to the country of origin in which such
producer is located if--
``(A) subsequent to the applicable date (as
described in section 4691(a)(2)), such foreign producer
has increased production of such product by not less
than 5 percent through the establishment of a new
production facility or the expansion of an existing
production facility, and
``(B) the increase in production described in
subparagraph (A) results in an increase in pollution
intensity associated with production of such product by
such foreign producer which is at least 5 percent
greater than the pollution intensity associated with
production of such product in such country (as
determined under paragraph (2)).
``(2) Comparison of pollution intensity.--For purposes of
paragraph (1)(B), the pollution intensity associated with
production of a covered product in a foreign country shall be
equal to the lowest pollution intensity determination with
respect to production of such product in such country for any
period beginning after the applicable date under section
4691(a)(2).
``(3) Treatment of foreign ownership.--For purposes of
paragraph (1), if the Secretary determines that--
``(A) a foreign producer is owned, operated, or
majority financed by--
``(i) a country (referred to in this
paragraph as the `base country') other than the
country in which the production facility is
located, or
``(ii) an entity which is headquartered in
the base country, and
``(B) the pollution intensity associated with
production of the covered product in the base country
is greater than the pollution intensity associated with
production of such product by the foreign producer,
the Secretary shall assign the covered product which is
produced by such foreign producer to the same tier determined
under section 4692 with respect to production of such covered
product in the base country.
``(4) Foreign producer.--For purposes of this subsection,
the term `foreign producer' means any producer which is not a
domestic producer.
``SEC. 4694. TREATMENT OF INTERNATIONAL PARTNERSHIPS.
``(a) Adjustment of Fee for Partner Countries.--In the case of a
covered product which is produced in a country which is a party to an
international partnership agreement which satisfies the conditions
under sections 201 and 202 of the Foreign Pollution Fee Act of 2023
(referred to in this section as a `partner country'), no fee under
section 4691 shall apply.
``(b) Elimination of Treatment of Foreign Data.--Section 4693(e)
shall not apply to any partner country.
``SEC. 4695. COVERED PRODUCTS.
``(a) In General.--The term `covered product' means articles
classifiable under the same 6-digit subheading number of the HTS within
one of the following categories:
``(1) Aluminum classifiable under any of headings 7601
through 7616 of the HTS.
``(2) Biofuels classifiable under subheading 2207.10 or
2207.20, or heading 3826, of the HTS.
``(3) Cement classifiable under heading 2523, 6810, or
6811, or subheading 3824.50, of the HTS.
``(4) Crude oil classifiable under heading 2709 of the HTS.
``(5) Glass classifiable under any of headings 7001 through
7020 of the HTS.
``(6) Hydrogen, methanol, or ammonia classifiable under
heading 2814 or any of subheadings 2804.10, 2905.11, 3102.10,
3102.30, or 3102.80 the HTS.
``(7) Iron and steel classifiable under any of headings
7201 through 7326 of the HTS.
``(8) Lithium-ion batteries classifiable under subheading
8507.60 of the HTS.
``(9) Minerals classifiable under any of the following
headings or subheadings of the HTS:
``2504................................ 2825.50...................... 3801.10
2612.10............................... 2827.41...................... 7401 through 7404
2804.69............................... 2833.24...................... 7406
2820.10............................... 2836.91...................... 7501 through 7504
2822.00............................... 2844.10...................... 8105.20
2825.20............................... 2844.20...................... 8105.30
2825.40............................... 2844.30...................... 8111.
``(10) Natural gas classifiable under subheading 2711.11 or
2711.21 of the HTS.
``(11) Petrochemicals classifiable under heading 2901 or
subheading 2711.14 of the HTS.
``(12) Plastics classifiable under any of headings 3901
through 3926 of the HTS.
``(13) Pulp and paper classifiable under any of headings
4701 through 4707 or 4801 through 4813 of the HTS.
``(14) Refined petroleum products classifiable under any of
headings 2710, 2712 through 2715, or 2803 or subheadings
2902.20, 2902.30, or 2902.44, of the HTS.
``(15) Solar cells and panels classifiable under any of
subheadings 8541.42 through 8541.43 or 8501.71 through 8501.80
of the HTS.
``(16) Wind turbines classifiable under subheading 8502.31
of the HTS.
``(b) Determination of Relevant HTS Numbers.--
``(1) In general.--The Secretary shall include, in the
final rule required by section 4698, a list of covered products
that includes the appropriate heading or subheading of the HTS
for each such product.
``(2) Scope.--Inclusion of a HTS code under paragraph (1)
shall only apply with respect to a covered product if such
product is--
``(A) described in subsection (a) and not subject
to an exception under section 4692(d)(2), or
``(B) added pursuant to subsection (d) or (e).
``(c) Naturally Occurring Covered Products.--
``(1) Pollution intensity calculations.--In the case of a
naturally occurring covered product which is refined in a
manner whereby such product becomes a transforming part for
multiple other products (referred to in this paragraph as a
`resulting product'), the pollution intensity associated with
the refining of the naturally occurring covered product shall
be divided between the resulting products in a manner
consistent with the proportion of the naturally occurring
product which is utilized in each resulting product and the
quantity of each resulting product.
``(2) Definition.--For purposes of this subsection, the
term `naturally occurring covered product' means crude oil or
minerals.
``(d) Additional Covered Products.--
``(1) In general.--An eligible entity may submit a petition
(or, in the case of more than one eligible entity, may jointly
submit a petition) to the Secretary for any product (based on
the 6-digit subheading number of the product under the HTS) to
be included as a covered product for purposes of this
subchapter.
``(2) Eligible entity.--For purposes of this subsection,
the term `eligible entity' means, with respect to any product--
``(A) a domestic producer of such product,
``(B) trade organizations consisting of producers
of such product,
``(C) labor unions representing individuals
employed in the production of such product, and
``(D) individuals employed in the production of
such product.
``(3) Threshold.--The Secretary may not approve a petition
described in paragraph (1) with respect to any product unless
not less than 50 percent of the total annual domestic
production with respect to such product is attributable to
domestic producers which are represented in such petition.
``(4) Measurement.--
``(A) In general.--For purposes of determining
whether the total annual domestic production
requirement under paragraph (3) has been satisfied, the
petitioners may elect whether such determination shall
be made on the basis of--
``(i) net tons of production during the
preceding year, or
``(ii) net monetary value of sales of the
product during the preceding year.
``(B) Treatment of trade organizations.--For
purposes of subparagraph (A), in the case of a trade
organization described in paragraph (2)(B), the total
annual domestic production attributable to any domestic
producer which is part of such organization shall be
included for purposes of determining whether the
requirement under such subparagraph has been satisfied.
``(C) Treatment of labor unions and individuals.--
For purposes of subparagraph (A), in the case of a
labor union described in paragraph (2)(C) or
individuals described in paragraph (2)(D) (referred to
in this subparagraph as `petitioning employees'), the
total annual domestic production attributable to such
labor union or the petitioning employees shall be
determined based on--
``(i) the total production of the product
during the preceding year by any producer that
employs members of such labor union or
petitioning employees, and
``(ii) the percentage of the total number
of employees of such producers during the
preceding year who are members of such labor
union or petitioning employees.
``(D) Exclusion of double counting.--In the case of
more than 1 eligible entity which is included in a
petition, the Secretary shall ensure that any
production attributable to each such eligible entity is
not included in the determination under paragraph (3)
more than once.
``(5) Petition.--With respect to any product, the petition
described in paragraph (1) shall include--
``(A) the applicable HTS code with respect to such
product,
``(B) the eligible entities and the percentage of
domestic production represented by such eligible
entities, and
``(C) proposed methods for determination of the
pollution intensity with respect to such product.
``(6) Pollution intensity.--For purposes of paragraph
(5)(C), the proposed methods shall--
``(A) satisfy the applicable requirements under
section 4693,
``(B) utilize existing pollution intensity values
for any covered component part, covered contributing
part, or covered transforming part contained in the
product, and
``(C) at the election of the petitioner, for
purposes of achieving an accurate calculation of
pollution intensity, include additional methods to
determine the pollution intensity of any component part
or transforming part which is not included under
subparagraph (B).
``(7) Implementation.--
``(A) In general.--Not later than 30 days after the
date on which the petition described in paragraph (1)
was received by the Secretary, the Secretary shall
determine whether the domestic production requirement
under such paragraph is satisfied with respect to the
product to be included as a covered product.
``(B) Inclusion as covered product.--For purposes
of subparagraph (A), if the Secretary determines that
the domestic production requirement under paragraph (3)
is satisfied with respect to the product--
``(i) such product shall be included as a
covered product for purposes of this
subchapter,
``(ii) the inclusion of such product as a
covered product shall be published in the
Federal Register, and
``(iii) such product shall be subject to
the rulemaking process under section 4698(d).
``(C) Determination of pollution intensity.--
Subsequent to any determination under subparagraph (B)
to include a product as a covered product for purposes
of this subchapter, the Board shall--
``(i) review the proposed methods for
determination of the pollution intensity with
respect to such product (as described in
paragraph (5)(C)), and
``(ii) make any adjustments necessary to--
``(I) ensure compliance with the
requirements under section 4693, and
``(II) account for availability of
necessary data and information for such
determination.
``(e) Critical Minerals.--
``(1) In general.--In the case of any mineral which--
``(A) is not described in subsection (a)(9), and
``(B) is included on the list of critical minerals
published by the United States Geological Survey,
the Secretary, in consultation with the United States Trade
Representative, may elect to include such mineral as a covered
product for purposes of this subchapter.
``(2) Publication and rulemaking.--In the case of any
mineral which is included as a covered product by the Secretary
pursuant to paragraph (1)--
``(A) the inclusion of such product as a covered
product shall be published in the Federal Register, and
``(B) such product shall be subject to the
rulemaking process under section 4698(d).
``(f) Application for Additional Covered Products.--With respect to
any product included as a covered product under subsection (d) or (e),
imposition of the fee under section 4691 shall take effect in the first
calendar year beginning after the issuance of the final rule described
in section 4698(d)(1)(B).
``SEC. 4696. NATIONAL LABORATORY ADVISORY BOARD ON GLOBAL POLLUTION
CHALLENGES.
``(a) In General.--
``(1) Establishment.--There is hereby established the
National Laboratory Advisory Board on Global Pollution
Challenges (referred to in this subchapter as the `Board').
``(2) Duties.--The Board shall--
``(A) in accordance with section 4693, establish
methods of calculating--
``(i) the baseline pollution intensity, as
determined based on production of the covered
product in the United States, and
``(ii) the respective pollution intensity
for production of such covered product in any
foreign country,
``(B) provide recommendations for rulemaking and
reassessments in accordance with section 4698, and
``(C) provide assistance with regard to subsections
(f) and (g) of section 4693, as well as any other
requests from the Secretary.
``(3) Chair.--The chair of the Board (referred to in this
section as the `Chair') shall be the Director of the National
Energy Technology Laboratory.
``(4) Deputy chairs.--The deputy chairs of the Board
(referred to in this section as the `Deputy Chairs') shall be--
``(A) the Director of Idaho National Laboratory,
``(B) the Director of the National Renewable Energy
Laboratory,
``(C) the Director of the Pacific Northwest
National Laboratory, and
``(D) the Chair of the Council of Environmental
Quality.
``(5) Other board members.--
``(A) In general.--In addition to the Chair and
Deputy Chairs, the Board shall consist of--
``(i) 2 representatives from each of the
industrial sectors described in paragraphs (1)
through (16) of section 4695(a), and
``(ii) 1 representative from each relevant
Federal agency, as designated by such agency.
``(B) Appointment.--
``(i) Initial appointment.--For purposes of
subparagraph (A)(i), each industrial sector
described in paragraphs (1) through (16) of
section 4695(a) shall (pursuant to clause (ii))
designate the representatives to serve for the
36-month period subsequent to the date of
enactment of this subchapter.
``(ii) Appointment process.--The Secretary
shall establish a process by which--
``(I) an individual who would
satisfy the requirements described in
subparagraph (C) can be nominated
(including by self-nomination) to serve
as a representative on the Board,
``(II) allows each domestic
producer of the relevant industrial
sector the opportunity to elect
individuals nominated under subclause
(I) to serve on the Board,
``(III) any representative elected
to serve on the Board is designated in
a timely manner with respect to
relevant rulemakings under section
4698, and
``(IV) a new round of nominations
and elections occurs for each
reassessment under section 4698(c).
``(C) Representatives.--For purposes of
subparagraph (A)(i), each elected representative shall
be the highest ranking officer (or their designee) of a
domestic producer which--
``(i) manufactures a product which is
included under paragraphs (1) through (16) of
section 4695(a), and
``(ii) has annual revenues of greater than
$40,000,000.
``(6) Approval of recommendations.--For purposes of any
recommendations required to be submitted to the Secretary under
subsection (b), not less than two-thirds of the representatives
described in paragraph (5)(A)(i) shall be required to approve
such recommendation.
``(7) Staff.--
``(A) In general.--With respect to carrying out any
duties described in paragraph (2), any laboratory
described in paragraph (3) or (4) may designate staff
to assist with such duties.
``(B) Detailees.--Upon the Board's request, the
Administrator, the Secretary of Energy, and the
Director of the Office of Science and Technology Policy
shall detail, without reimbursement, employees from
each agency to assist the Board in carrying out its
duties under this section.
``(b) Failure To Submit Recommendations.--In any case in which the
Board fails to timely transmit a recommendation under section 4698, the
Secretary may establish rules, or alter reassessments, required under
this section or section 4698 without consultation of the Board.
``(c) No Cause of Action.--Any recommendation, verification, or
report issued by the Board under this section shall not create or give
rise to any claim or cause of action.
``SEC. 4697. DEFINITIONS.
``(a) In General.--For purposes of this subchapter--
``(1) Administrator.--The term `Administrator' means the
Administrator of the Environmental Protection Agency.
``(2) Appropriate congressional committees.--The term
`appropriate congressional committees' means the Committee on
Finance of the Senate and the Committee on Ways and Means of
the House of Representatives.
``(3) Baseline pollution intensity.--The term `baseline
pollution intensity' means the pollution intensity associated
with production of a covered product in the United States.
``(4) Carbon dioxide equivalent.--The term `carbon dioxide
equivalent' means, with respect to a greenhouse gas, the
quantity of such gas that has a global warming potential
equivalent, determined over a 100-year period, to 1 metric ton
of carbon dioxide, as determined pursuant to table A-1 of
subpart A of part 98 of title 40, Code of Federal Regulations,
as in effect on January 1, 2023.
``(5) Component part.--The term `component part' means,
with respect to a covered product, any component which is
contained as an independent product utilized in the completed
covered product.
``(6) Contributing part.--The term `contributing part'
means, with respect to a covered product, any product which was
used in the creation of such covered product in a manner which
is consistent with--
``(A) combustion of such product to provide energy
to produce the covered product, or
``(B) utilization of such product to provide
electricity necessary to operate machinery used to
create the covered product.
``(7) Country of origin.--The term `country of origin'
means--
``(A) the country in which a covered product was
produced, or
``(B) the last country in which a covered product
was substantially transformed,
as determined in a manner consistent with U.S. Customs and
Border Protection procedures, directly prior to importation
into the United States.
``(8) Covered component part.--The term `covered component
part' means any component part which is itself a covered
product.
``(9) Covered contributing part.--The term `covered
contributing part' means any contributing part which is itself
a covered product.
``(10) Covered entity.--The term `covered entity' means
importer of record of a covered product at the time of the
importation of such product.
``(11) Covered transforming part.--The term `covered
transforming part' means any transforming part which is itself
a covered product.
``(12) Domestic producer.--The term `domestic producer'
means a producer which--
``(A) has filed their articles of incorporation in
the United States, and
``(B) is not a subsidiary of an entity which is
incorporated in a nonmarket economy country.
``(13) Export or development financing.--The term `export
or development financing' means financing--
``(A) for the purposes of--
``(i) developing international production
capacity, or
``(ii) securing the exportation of goods or
technology manufactured in the United States
(including technologies used to manufacture
covered products), and
``(B) which is provided by--
``(i) the Department of Energy,
``(ii) the Department of Commerce,
``(iii) the Department of State,
``(iv) the Export-Import Bank of the United
States,
``(v) the United States International
Development Finance Corporation,
``(vi) the Trade and Development Agency,
``(vii) the United States Agency for
International Development, or
``(viii) the Office of the United States
Trade Representative.
``(14) Free trade agreement.--The term `free trade
agreement' means an agreement with 1 or more countries which--
``(A) reduces or eliminates tariffs and non-tariff
barriers between the countries party to such agreement,
and
``(B) is approved by Congress.
``(15) Greenhouse gas.--The term `greenhouse gas' has the
meaning given such term in section 98.6 of title 40, Code of
Federal Regulations (as in effect on the date of enactment of
this subchapter).
``(16) HTS.--The term `HTS' means the Harmonized Tariff
Schedule of the United States.
``(17) International partnership agreement.--The term
`international partnership agreement' means an international
partnership agreement established pursuant to title II of the
Foreign Pollution Fee Act of 2023.
``(18) Nonmarket economy country.--The term `nonmarket
economy country' has the meaning given such term in section
771(18) of the Tariff Act of 1930 (19 U.S.C. 1677(18)).
``(19) Point source pollution.--The term `point source
pollution' means pollution emitted into the ambient air at the
site of the manufacturing of a product.
``(20) Pollution.--The term `pollution' means greenhouse
gas emissions.
``(21) Pollution intensity.--The term `pollution intensity'
means the amount of greenhouse gases (as determined under
section 4693), expressed in metric tons of carbon dioxide
equivalent, which are emitted into the atmosphere in the
production of a single unit of a covered product (as determined
pursuant to section 4691(c)).
``(22) Pollution intensity difference.--The term `pollution
intensity difference' means, with respect to any covered
product, the difference (expressed as a percentage) between--
``(A) the pollution intensity associated with
production of such product in the country of origin,
and
``(B) the baseline pollution intensity with respect
to such product.
``(23) Producer.--The term `producer' means the entity
responsible for the creation of a product through--
``(A) a manufacturing process, or
``(B) in the case of a geologic resource,
extraction.
``(24) Product.--The term `product' means any article,
regardless of whether such article is--
``(A) exported from the country of origin, or
``(B) produced and sold only within the country of
origin.
``(25) Relevant federal agency.--The term `relevant Federal
agency' means--
``(A) the Department of the Treasury,
``(B) the Department of Energy,
``(C) the Office of the United States Trade
Representative,
``(D) the Department of Commerce,
``(E) the Department of State,
``(F) the Environmental Protection Agency,
``(G) the Council on Environmental Quality,
``(H) the Office of Science and Technology Policy,
and
``(I) the Department of Homeland Security.
``(26) Transforming part.--The term `transforming part'
means a product which is substantially transformed or refined
into another product.
``(27) Upstream pollution.--The term `upstream pollution'
means, with respect to any covered product--
``(A) the pollution associated with all covered
component parts, covered contributing parts, and
covered transforming parts, and
``(B) any fugitive pollution which occurs during
extraction, refining, and transport of any part
described in subparagraph (A).
``(b) World Bank Classifications.--For purposes of this
subchapter--
``(1) In general.--Subject to paragraph (2), the terms
`high-income country', `upper-middle-income country', `lower-
middle-income country', and `low-income country' shall be
defined based on the classification of the economy of a country
by the World Bank.
``(2) High-income and upper-middle-income countries.--In
the case of any country which, as of January 1, 2023, is
classified by the World Bank as a high-income country or an
upper-middle-income country, such country shall not be eligible
to be reclassified as a lower-middle-income country or a low-
income country.
``SEC. 4698. ESTABLISHMENT PROCESS AND REASSESSMENTS.
``(a) In General.--The processes established under this section
shall be utilized to--
``(1) provide the initial rules for application of the fee
imposed under section 4691, and
``(2) perform any required reassessment.
``(b) Initial Rulemaking.--
``(1) Classification of covered products.--Not later than
12 months after the date of enactment of this subchapter, the
Secretary shall issue a final rule for purposes of--
``(A) determining the appropriate heading or
subheading number of the HTS for each covered product
(as required under section 4695(b)); and
``(B) determining the appropriate measurement of
any covered product (as described in section 4691(c)).
``(2) Pollution intensity calculations.--
``(A) In general.--Not later than 18 months after
the date of enactment of this subchapter, the Secretary
shall publish a final rule establishing--
``(i) in a manner consistent with section
4693, the pollution intensity with respect to
each covered product and country of origin, and
``(ii) methods for any foreign country to
establish an alternative pollution intensity
with respect to any covered product pursuant to
subsection (f) of such section.
``(B) Circumvention.--Not later than 36 months
after the date of enactment of this subchapter, the
Secretary shall publish a final rule to address
producers described in section 4693(g).
``(3) Establishment of variable charges.--Not later than 24
months after the date of enactment of this subchapter, the
Secretary (in consultation with the United States Trade
Representative) shall issue a final rule establishing the
variable charge for covered products for purposes of section
4692.
``(4) Additional rulemaking.--In addition to the rules
described in paragraphs (1) through (3), any rules which are
necessary in order to properly apply the fee under section 4691
shall be issued not later than the date which 24 months after
the date of enactment of this subchapter.
``(c) Reassessment.--
``(1) In general.--Not later than 3 years after the date of
the issuance of any final rule described in subsection (b), and
every 3 years thereafter, the Secretary shall reassess and, as
necessary, issue a final rule to adjust, the existing final
rule.
``(2) Revision.--The United States International Trade
Commission, in consultation with the Secretary, shall annually
publish a notice reflecting headings, subheadings, and
statistical reporting numbers of the HTS contained in any rule
issued under this section which need to be amended due to
revisions to the HTS.
``(3) Newly available data.--With respect to any
reassessment described in paragraph (1), the Secretary may
utilize any data which is available as a result of enhancements
in the ability to assess domestic or foreign pollution pursuant
to legislation enacted or developments in technology subsequent
to the issuance of the most recent final rule.
``(4) International partnerships.--In the case of an
international partnership agreement, the Secretary may, at the
time of the establishment of such agreement and in a manner
consistent with such agreement, issue a final rule to adjust
the pollution intensity for any covered product (as determined
pursuant to subsection (b)(2)) produced in a country which is a
party to such agreement.
``(5) Timing.--In the case of any final rule issued with
respect to any reassessment under paragraph (1), the
application of such rule shall take effect on January 1 of the
first calendar year beginning subsequent to the issuance of
such final rule.
``(d) Additional Covered Products.--
``(1) In general.--With respect to any product which is
included as a covered product pursuant to subsection (d) or (e)
of section 4695 following the publication in the Federal
Register (as described in subsection (d)(7)(B)(ii) or
subsection (e)(2)(A) of such section, as applicable)--
``(A) not later than 12 months after the date of
such publication, the Secretary shall issue a final
rule with respect to the pollution intensity of such
covered product and any country of origin consistent
with the requirements under section 4693, and
``(B) not later than 6 months after the issuance of
the final rule described in subparagraph (A), the
Secretary shall issue a final rule establishing the
variable charge for such covered product consistent
with the requirements under section 4692.
``(2) Reassessments.--
``(A) In general.--Except as provided in
subparagraph (B), any classification or rule
established pursuant to paragraph (1) with respect to
any covered product shall remain in effect under the
next reassessment under subsection (c).
``(B) Exception.--With respect to any product
included as a covered product under subsection (d) or
(e) of section 4695, if the date for imposition of the
fee under section 4691 (as determined pursuant to
section 4695(f)) is less than 1 year from the date of
the next reassessment under subsection (c), such
product shall not be subject to such reassessment.
``(e) Process.--
``(1) Board recommendations.--Not later than 6 months prior
to--
``(A) the date on which any final rule is required
to be issued under paragraph (1), (2), or (3) of
subsection (b), and
``(B) the date on which any reassessment is
required to be made under subsection (c)(1),
the Board shall provide recommendations to the Secretary with
respect to such final rule or reassessment.
``(2) Notice.--Not later than 30 days after receiving the
recommendations of the Board provided under paragraph (1), the
Secretary shall--
``(A) publish a notice of proposed rulemaking based
on such recommendations with respect to the final rule
or reassessment, and
``(B) brief the appropriate congressional
committees and consult with such committees regarding
such final rule or reassessment.
``(3) Comment.--Following the notice under paragraph
(2)(A), the Secretary shall provide a public comment period of
not less than 60 days.
``(4) Consultation.--Prior to the issuance of any final
rule or reassessment under this section regarding the
appropriate classification of covered products, the Secretary
shall consult with--
``(A) the United States Trade Representative,
``(B) the United States International Trade
Commission,
``(C) the Commissioner of U.S. Customs and Border
Protection, and
``(D) all other relevant Federal agencies.
``(5) Publication.--The publication of any final rule
required under this section shall include a statement from the
Secretary explaining any deviation from the recommendations
submitted by the Board pursuant to paragraph (1).
``(f) Judicial Review.--
``(1) In general.--The United States Court of Appeals for
the District of Columbia Circuit shall have original and
exclusive jurisdiction over any claim with respect to any final
rule issued under this section.
``(2) Limitation.--No final rule issued under this section
shall be subject to judicial review unless--
``(A) the claim is filed not later than 30 days
after the issuance of such rule, and
``(B) the person filing such claim--
``(i) is a citizen of the United States or
a domestic producer, and
``(ii)(I) demonstrates that--
``(aa) application of such rule
will result in the infliction of a
direct and tangible harm to such
person, and
``(bb) the rulemaking process was
conducted in a manner that was intended
to directly harm such person, or
``(II) demonstrates that such final rule--
``(aa) altered the recommendations
made by the Board, and
``(bb) would limit the ability to
attain the goals established under
section 4692(c)(2).
``(3) Acceptable action.--Notwithstanding any claim or
cause of action filed with respect to any provision of this
subchapter--
``(A) the applicable date described in section
4691(a)(2),
``(B) the application of reassessment pursuant to
subsection (c), and
``(C) with respect to covered products included
pursuant to subsection (d) or (e) of section 4695, the
date for imposition of the fee under section 4691 to
take effect (as determined under section 4695(f)),
shall not be subject to judicial review and shall not be
subject to delay or suspension.''.
TITLE II--INTERNATIONAL PARTNERSHIP AGREEMENTS RELATING TO POLLUTION
FEES
SEC. 201. INTERNATIONAL PARTNERSHIP AGREEMENTS.
(a) In General.--The United States Trade Representative, at the
direction of the President, may--
(1) engage in negotiations with countries to encourage the
establishment and expansion of international partnership
agreements, as provided in this title;
(2) establish agreements with foreign countries with
respect to proposals to enter into international partnership
agreements;
(3)(A) implement such an agreement in accordance with
subsection (e); or
(B) submit a proposal to Congress under subsection (f) with
respect to such an agreement and implement the agreement
following the approval of Congress in a manner consistent with
that subsection; and
(4) perform the oversight and enforcement role necessary to
uphold any such agreement.
(b) Consultation During Negotiation for International Partnership
Agreements.--
(1) In general.--With respect to negotiations for an
international partnership agreement under this title, the Trade
Representative shall--
(A) consult closely and on a timely basis with the
appropriate congressional committees, keeping those
committees fully apprised of the negotiations; and
(B) provide to those committees, including staff
with appropriate security clearances, access to the
text of any negotiating proposal or any other document
presented by the United States or another party to the
negotiations that presents concepts or considerations
for the negotiations not later than 5 business days
before the proposal or other document is formally
brought up for consideration in the negotiations.
(2) Designation of advisors.--The chairperson and ranking
member of each of the appropriate congressional committees may
each designate not more than 5 Members of Congress on their
committee and not more than 4 individuals on the staff of that
committee as official advisors to negotiations.
(3) Briefing.--
(A) In general.--The Trade Representative shall
brief the appropriate congressional committees before
and after every negotiation session in relation to an
international partnership agreement.
(B) Timing.--A briefing required by subparagraph
(A) following a negotiating session shall take place
not later than 5 business days following the session.
(c) Requirements for International Partnership Agreements.--
(1) In general.--An international partnership agreement may
be entered into under this title on the basis of one covered
product, multiple covered products, or all covered products.
(2) Participation.--
(A) In general.--Subject to the requirements under
paragraph (3), the United States may enter into an
international partnership agreement under this title
with--
(i) one country;
(ii) multiple countries; or
(iii) a group of countries participating in
an international forum such as the Organisation
for Economic Co-operation and Development or
the Group of Seven (G7).
(B) Expansions of ex post congressional-executive
international partnership agreements.--In the case of
an international partnership agreement previously
approved by Congress under subsection (f), additional
countries may be added to the agreement without
requiring further approval by Congress if the only
changes to the agreement--
(i) are the addition of a new country to
the agreement; and
(ii) do not require alterations to
subchapter E of the Internal Revenue Code of
1986, as added by title I.
(3) Requirements.--An international partnership agreement
entered into under this title is required to provide for--
(A) creation of compatible methods to promote
pollution reduction through trade mechanisms by
assessing pollution intensity differences between
countries;
(B) maintenance of the ability of a country that is
a party to the agreement to determine methods of
pollution reduction within that country;
(C) elimination of any fee or charge between
countries that are parties to the agreement in a manner
compatible to the process described in section 202;
(D) elimination or reduction of other duties,
import fees, and trade barriers maintained by the
country related to covered products;
(E) compatible pollution monitoring, reporting, and
verification methods that--
(i) allow for similar methods to be used to
calculate the pollution intensity of covered
products and countries that are parties to the
agreement, on the basis of the available
information within each such country;
(ii) allow for similar methods to be used
to calculate the pollution intensity of covered
products imported from countries that are not
parties to the agreement; and
(iii) allow for each country that is a
party to the agreement to consistently validate
the monitoring and reporting information of the
other countries that are parties to the
agreement with respect to products covered by
the agreement;
(F) design characteristics compatible with
subchapter E of the Internal Revenue Code, as added by
title I;
(G) design characteristics compatible with the
provisions of this title; and
(H) processes for how to add--
(i) additional countries to the agreement;
and
(ii) additional covered products to the
agreement.
(4) Consideration of third-party participation.--
(A) In general.--An international partnership
agreement entered into under this title may include
direction for an entity that is not from a country that
is a party to the agreement to--
(i) serve as a repository of relevant
pollution data from countries that are parties
to the agreement;
(ii) provide validation of pollution
intensity calculations and other requirements
under paragraph (3); and
(iii) adjudicate discrepancies with respect
to such data and requirements between countries
that are parties to the agreement.
(B) Limitations.--
(i) Access to information.--An
international partnership agreement entered
into under this title is required to provide
for each country that is a party to the
agreement to maintain the ability to access and
validate any pollution information related to
other countries that are parties to the
agreement.
(ii) Scope of adjudication.--
(I) In general.--An entity
described in subparagraph (A) may
adjudicate discrepancies between
countries that are parties to an
international partnership agreement
entered into under this title only to
the extent that such discrepancies
relate to requirements under the
agreement.
(II) Impact on domestic laws.--An
entity described in subparagraph (A)
may not alter the domestic law of a
country that is a party to an
international partnership agreement
entered into under this title,
including subchapter E of the Internal
Revenue Code of 1986, as added by title
I.
(d) Timeline.--
(1) In general.--The requirements described in subsection
(c) with respect to an international partnership agreement are
required to be achieved--
(A) for high-income countries and upper-middle
income countries, not later than 3 years after entering
into the agreement; and
(B) for low-income countries and lower-middle-
income countries, not later than 5 years after entering
into the agreement.
(2) Applicability of benefits.--
(A) In general.--Countries described in paragraph
(1)(A) shall not receive the treatment described in
section 4694 of the Internal Revenue Code of 1986, as
added by title I, until the requirements under
subsection (c) are met.
(B) Termination.--The United States shall maintain
the right to terminate an international partnership
agreement if the requirements under subsection (c) are
not met in the time described in paragraph (1).
(e) Ex Ante Congressional-Executive International Partnership
Agreements.--
(1) In general.--The United States Trade Representative
may, at the direction of the President, enter into and carry
out an international partnership agreement entered into under
this title without the approval of Congress if the agreement--
(A) complies with the requirements under subsection
(c); and
(B) does not require any alteration of subchapter E
of the Internal Revenue Code of 1986, as added by title
I.
(2) Effect.--An agreement described in paragraph (1) that
complies with the requirements under subsection (c) shall
qualify as an international partnership agreement for purposes
of section 4694 of the Internal Revenue Code of 1986, as added
by title I.
(3) Publication; congressional review.--An agreement
entered into under this subsection shall be--
(A) published in the Federal Register; and
(B) treated as a final rule prepared by an agency,
including with respect to review by Congress under
chapter 8 of title 5, United States Code (commonly
referred to as the ``Congressional Review Act'').
(f) Ex Post Congressional-Executive International Partnership
Agreements.--
(1) In general.--An agreement shall be treated as a
congressional-executive agreement and enter into force only if
a joint resolution of approval is enacted in accordance to this
subsection if any alteration of subchapter E of the Internal
Revenue Code of 1986, as added by title I, is required to
implement the agreement.
(2) Submission to congress and publication of agreement.--
The President shall--
(A) post the text of an agreement described in
paragraph (1) on a publicly available website of the
Office of the United States Trade Representative for
not less than 5 business days; and
(B) submit to Congress on a day on which both
Houses of Congress are in session a copy of the final
legal text of the agreement, together with--
(i) an identification of any United States
laws that may be inconsistent with the text;
and
(ii) a statement of any administrative
action proposed to implement the agreement.
(3) Joint resolutions of approval.--
(A) Definition.--In this paragraph, the term
``joint resolution of approval'' means only a joint
resolution the matter after the resolving clause of
which is as follows: ``That Congress approves ____,
submitted to Congress on _____'', with the first blank
space being filled with the name of the applicable
international partnership agreement entered into under
this title and the second blank space being filled with
the appropriate date.
(B) Introduction.--A joint resolution approving an
agreement described in paragraph (1) may be introduced
in either House of Congress by the chairperson or
ranking member of one of the appropriate congressional
committees.
(C) Procedures in house and senate.--Except as
provided in this paragraph, the provisions of
subsections (d), (e), and (f) of section 152 of the
Trade Act of 1974 (19 U.S.C. 2192) shall apply with
respect to a joint resolution of approval under this
paragraph to the same extent and in the same manner as
such provisions apply with respect to a joint
resolution described in subsection (a) of that section.
(D) Referral.--A joint resolution of approval shall
be referred exclusively to the appropriate
congressional committees.
(E) Discharge.--If the committee of either House to
which a joint resolution of approval has been referred
has not reported it by the close of the 40th day after
its introduction (excluding any day described in
section 154(b) of the Trade Act of 1974 (19 U.S.C.
2194(b))), that committee shall be automatically
discharged from further consideration of the joint
resolution and the joint resolution shall be placed on
the appropriate calendar.
(F) Consideration.--
(i) In general.--It is not in order for--
(I) the Senate to consider any
joint resolution of approval unless the
joint resolution has been reported by
the Committee on Finance or the
committee has been discharged from
consideration of the joint resolution
under subparagraph (E); or
(II) the House of Representatives
to consider any joint resolution of
approval unless it has been reported by
the Committee on Ways and Means or the
committee has been discharged from
consideration of the joint resolution
under subparagraph (E).
(ii) Motion to proceed in house of
representatives.--A motion in the House of
Representatives to proceed to the consideration
of a joint resolution of approval may be made
only on the second legislative day after the
calendar day on which the Member making the
motion announces to the House the intention of
the Member to do so.
(4) Rules of senate and house of representatives.--This
subsection is enacted by Congress--
(A) as an exercise of the rulemaking power of the
Senate and the House of Representatives, respectively,
and as such is deemed a part of the rules of each
House, respectively, and supersedes other rules only to
the extent that it is inconsistent with such other
rules; and
(B) with the full recognition of the constitutional
right of either House to change the rules (so far as
relating to the procedures of that House) at any time,
in the same manner, and to the same extent as any other
rule of that House.
(g) Inclusion in Other International Agreements.--
(1) In general.--The United States Trade Representative, at
the direction of the President, may seek to include an
expansion of an international partnership agreement in any
other international agreement entered into or renegotiated on
or after the date of the enactment of this Act, such as--
(A) a free trade agreement;
(B) an international agreement relating to
environmental protections, sustainable development, or
climate; or
(C) a trade agreement involving international
organizations such as the Organisation for Economic Co-
operation and Development, the Group of Seven (G7), or
any similar organization.
(h) Restrictions on Negotiations.--
(1) Nonmarket economy countries.--The authority provided by
this section does not include the authority to negotiate or
enter into an agreement with a nonmarket economy country if the
country is--
(A) an upper middle-income country; or
(B) a high-income country.
(2) Domestic policies.--The authority provided by this
section does not include the authority to negotiate or enter
into an agreement that would establish carbon taxes, fees,
pricing, or other mechanisms that impose additional costs on
products produced by a domestic producer by the United States.
SEC. 202. APPLICATION OF FOREIGN POLLUTION FEE IN PARTNERSHIPS.
(a) In General.--In accordance with section 4694 of the Internal
Revenue Code of 1986, as added by title I, no fee shall be applied
under section 4691 of such Code with respect to a covered product
imported from a country that is a party to an international partnership
agreement entered into under this title if production of the covered
product has a pollution intensity difference that is less than or equal
to 50 percent.
(b) Failure To Meet Requirements.--If a covered product is produced
in a country that is a party to an international partnership agreement
entered into under this title but does not meet the requirement
described in subsection (a), the fee applied under section 4691 of the
Internal Revenue Code of 1986, as added by title I, with respect to the
covered product shall be determined based on the applicable tier (as
described in paragraph (2) of section 4692(e) of the Internal Revenue
Code of 1986, as added by title I) associated with--
(1) the pollution intensity difference; reduced by
(2) 50 percentage points.
(c) Treatment of Low-Income and Lower-Middle Income Countries.--
(1) In general.--During the 5-year period following the
entry into force of an international partnership agreement
under this title between the United States and a low-income
country or lower-middle-income country--
(A) the pollution intensity requirement described
in subsection (a) shall be considered to be met with
respect to covered products produced in the country;
and
(B) no fee shall be applied to covered products
imported from that country.
(2) Modifications to requirements.--
(A) In general.--During the 10-year period
beginning after the completion of the 5-year period
described in paragraph (1), the pollution intensity
requirement described in subsection (a) shall be
considered to be met with respect to a covered product
produced in a country described in paragraph (1) if new
capacity in that country for the production of the
covered product developed during the 10-year period
described in paragraph (1) is not more than 50 percent
more pollution intense than the baseline pollution
intensity at the time of the entry into force of the
international partnership agreement.
(B) Future development.--For the 10-year period
beginning after the completion of the 10-year period
described in subparagraph (A), and each 10-year period
thereafter, the pollution intensity requirement
described in subsection (a) shall be considered to be
met with respect to a covered product produced in a
country described in paragraph (1) if new capacity in
that country for the production of the covered product
developed during the preceding 10-year period is not
more than 25 percent more pollution intense than the
baseline pollution intensity at the beginning of such
preceding 10-year period.
(3) Application of fee.--If the requirements described in
paragraph (1) or (2), as applicable, are not met with respect
to a covered product, the fee specified in subsection (b) shall
apply.
(d) Treatment of Circumvention.--Nothing in this section shall
supersede section 4693(g) of the Internal Revenue Code of 1986, as
added by title I, with respect to potential circumvention of the fee
assessed under section 4691 of such Code if--
(1) a determination is made under such section 4693(g) with
respect to a producer; and
(2) the producer is owned, operated, or financed in or by a
country that is not a party to an international partnership
agreement entered into under this title.
SEC. 203. SUPPORT FOR PARTICIPATION OF LOW-INCOME AND LOWER-MIDDLE-
INCOME COUNTRIES IN INTERNATIONAL PARTNERSHIP AGREEMENTS.
(a) In General.--The United States Trade Representative, at the
direction of the President, may include, in an international
partnership agreement entered into under this title with a low-income
country or a lower-middle-income country, provisions providing for--
(1) the provision of treatment described in section 202(c)
to that country;
(2) the extension of untied or tied aid through a United
States export, development, or trade agency for energy or
manufacturing technologies and projects;
(3) lower initial requirements relating to pollution data
monitoring and alternative methods to more accurately project
and model pollution under the agreement;
(4) support for expansion of monitoring and reporting of
pollution; and
(5) technical assistance to ensure full compliance with the
terms of the agreement.
(b) Benchmarks and Requirements.--
(1) In general.--The United States Trade Representative
shall establish benchmarks or requirements to assess the
progress of a country described in subsection (a) in fully
implementing the terms of the international partnership
agreement entered into under this title.
(2) Benchmarks.--The benchmarks and requirements
established under paragraph (1) with respect to a country shall
include--
(A) improving methods of monitoring, reporting, and
verifying pollution levels;
(B) if, after the entry into force of the
international partnership agreement, new manufacturing
or production capacity for a covered product is built
in the country but that capacity is owned or operated,
or the majority of the financing for that capacity is
provided, by an entity associated with a country that
is not a party to an international partnership
agreement, treating the new capacity--
(i) at the pollution intensity of the
country that is not a party to an international
partnership agreement if the pollution
intensity for the covered product produced in
that country is greater than the pollution
intensity of the covered product produced in
the country that is a party to the
international partnership agreement;
(ii) as not eligible for the treatment of a
country that is a party to an international
partnership agreement described in section 202;
and
(iii) in accordance to the requirements of
section 4694 of the Internal Revenue Code of
1986, as added by title I;
(C) if, after the entry into force of the
international partnership agreement, the ownership, a
stake of ownership, or operation of manufacturing or
production capacity for a covered product that is in
operation on the date of entry into force is
transferred to an entity in a country that is not a
party to an international partnership agreement,
treating such capacity--
(i) at the pollution intensity of the
country that is not a party to an international
partnership agreement if the pollution
intensity for the covered product produced in
that country is greater than the pollution
intensity of the covered product produced in
the country that is a party to the
international partnership agreement;
(ii) as not eligible for the treatment of a
country that is a party to an international
partnership agreement described in section 202;
and
(iii) in accordance to the requirements of
section 4694 of the Internal Revenue Code of
1986, as added by title I; and
(D) in the case of an international partnership
agreement with a nonmarket economy country that is a
low-income country or a lower-middle-income country,
making progress in developing a market economy.
(c) Termination.--The United States shall maintain the authority to
terminate the application of the provisions described in subsection (a)
to a country if the country does not meet the benchmarks and
requirements under subsection (b).
(d) Inclusion of Other International Partners.--To the maximum
extent practicable, the United States shall seek to include additional
high-income countries and upper-middle-income countries in
international partnership agreements entered into under this title with
low-income countries or lower-middle-income countries.
SEC. 204. FACILITY-SPECIFIC AGREEMENTS RELATING TO POLLUTION FEES.
(a) Authority To Negotiate Facility-Specific Agreements.--The
United States Trade Representative may negotiate, in coordination with
the Secretary of the Treasury and the Administrator of the
Environmental Protection Agency, an agreement with a facility located
in a foreign country that allows products produced at the facility to
be treated at a pollution intensity specific to the facility.
(b) Requirements.--To be eligible for an agreement under subsection
(a), a facility is required to--
(1) consistently operate according to the standards a
United States facility is statutorily required to abide by, for
existing operations and any future expansion of operations,
including such standards set forth under--
(A) the Clean Air Act (42 U.S.C. 7401 et seq.);
(B) the Federal Water Pollution Control Act (33
U.S.C. 1251 et seq.) (commonly known as the ``Clean
Water Act'');
(C) the Safe Drinking Water Act (42 U.S.C. 300f et
seq.); and
(D) the National Environmental Policy Act of 1969
(42 U.S.C. 4321 et seq.);
(2) deploy pollution monitoring equipment able to report in
real time the levels of pollution emitted by the facility;
(3) provide real-time access to physical pollution
monitoring by United States officials or their designees;
(4) allow for spot inspections by United States officials
or their designees to ensure compliance with the requirements
of the agreement;
(5) if the pollution intensity of the facility is higher
than the pollution intensity of the United States or the least
pollution intense foreign country that is a party to an
international partnership agreement entered into under this
title with the United States--
(A) provide actionable benchmarks to decrease the
pollution intensity of the facility so that pollution
intensity is equal to or less than the pollution
intensity of the United States or such other country
not later than 10 years after entering into an
agreement under subsection (a);
(B) achieve the benchmarks described in
subparagraph (A) during the 10-year period described in
that subparagraph;
(C) provide actionable benchmarks to decrease, by
not later than 20 years after entering into an
agreement under subsection (a), the pollution intensity
of the facility to an intensity not less than 50
percent lower than the pollution intensity of the
United States at the time of entry into the agreement;
(D) achieve the benchmarks described in
subparagraph (C) during the 20-year period described in
that subparagraph; and
(E) ensure that any pollution reduction technology
used in achieving the benchmarks described in
subparagraph (A) or (C) contains not less than 50
percent of components of United States origin;
(6) account for any upstream pollution--
(A) at the level associated with the pollution
intensity of the country in which the contributing part
or transforming part is produced, unless the part is
covered by an agreement entered into under subsection
(a); or
(B) if determined appropriate by the United States
Trade Representative and provided for in the agreement,
based on an applicable standard of the International
Organization for Standardization;
(7) identify the covered entity with respect to covered
products produced at the facility if the covered entity is not
the owner of the facility; and
(8) ensure the agreement may be terminated at the sole
discretion of the United States if the facility is not in
compliance with any requirement under this subsection.
(c) Consultation With Congress.--The Trade Representative may not
conclude an agreement under subsection (a) with a facility unless--
(1) the Trade Representative--
(A) informs the appropriate congressional
committees of the intention of the Trade Representative
to pursue negotiations with the facility not less than
2 business days after commencing negotiations;
(B) shares the text of the proposed agreement with
the appropriate congressional committees for not less
than the lesser of--
(i) 12 days on which both Houses of
Congress are in session; or
(ii) 60 calendar days; and
(C) responds to all inquiries regarding the terms
of the agreement from the chairperson or ranking member
of one of the appropriate congressional committees
before concluding the agreement; and
(2) a resolution of disapproval is not enacted during the
period described in paragraph (1)(B).
(d) Treatment of the Agreement.--
(1) In general.--Any agreement entered into under this
section with a facility shall allow a product produced by the
facility and imported into the United States to be assigned to
the tier (as established under section 4692(b) of the Internal
Revenue Code of 1986, as added by title I) aligned with the
pollution intensity difference of a product produced by the
facility and the baseline pollution intensity.
(2) Restrictions.--Under no circumstances may an agreement
entered into under this section require the United States to
alter the implementation of this Act.
(e) Ineligibility of State-Owned Facilities in Nonmarket Economy
Countries.--A facility in a nonmarket economy country is not eligible
for an agreement under this section if the facility--
(1) is owned, partially owned, or operated by the
government of the country or an entity owned or controlled by
that government; or
(2) has received financing, including in the form of a tax
credit or a limit on tax liability, to operate the facility by
the government of the country or an entity owned or controlled
by that government.
(f) Transparency.--The Trade Representative shall promptly publish
a description of the proposed agreement under this section in the
Federal Register.
SEC. 205. DEFINITIONS.
In this title, the definitions set forth in section 4697 of the
Internal Revenue Code of 1986, as added by title I, apply.
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