[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2712 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 2712
To amend the Internal Revenue Code of 1986 to establish a carbon fee to
reduce greenhouse gas emissions, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 4, 2025
Mr. Durbin 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 establish a carbon fee to
reduce greenhouse gas emissions, 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 ``America's Clean Future Fund Act''.
SEC. 2. CLIMATE CHANGE FINANCE CORPORATION.
(a) Establishment.--
(1) In general.--There is established in the executive
branch an independent agency, to be known as the ``Climate
Change Finance Corporation'' (referred to in this section as
the ``C2FC''), which shall finance clean energy and climate
change resiliency activities in accordance with this section.
(2) Mission.--The mission of the C2FC is to combat climate
change by reducing the dependency of the United States on
fossil fuels, reducing greenhouse gas emissions, and building
resilience to the harmful impacts of climate change.
(3) Activities.--
(A) In general.--The C2FC shall reduce the reliance
of the United States on fossil fuels and mitigate the
impacts of climate change by financing--
(i) the deployment of low- and zero-
emissions energy technologies and fuels;
(ii) the construction of climate-resilient
infrastructure;
(iii) research, development, and
commercialization of new climate-smart
technologies and tools to facilitate industrial
decarbonization;
(iv) clean energy and climate projects
identified as too high-risk for private capital
investment; and
(v) projects that encourage the infusion of
private capital and the creation of new
workforce opportunities in clean
transportation, energy, and climate resiliency.
(B) Priority.--In carrying out activities under
subparagraph (A), the C2FC shall give priority to
projects that benefit--
(i) communities disproportionately facing
the harmful impacts of climate change;
(ii) communities that have been
historically overburdened by industrial
pollution from carbon-intensive industries; and
(iii) communities that have historically
relied on carbon-intensive industries for
economic support.
(C) Emissions reduction goals.--In carrying out
activities under subparagraph (A), the goals of the
C2FC shall be to achieve--
(i) by 2030, a net reduction of greenhouse
gas emissions by 45 percent, based on 2018
levels; and
(ii) by 2050, a net reduction of greenhouse
gas emissions by 100 percent, based on 2018
levels.
(4) Exercise of powers.--Except as otherwise provided
expressly by law, all Federal laws dealing with public or
Federal contracts, property, works, officers, employees,
budgets, or funds, including the provisions of chapters 5 and 7
of title 5, United States Code, shall apply to the exercise of
the powers of the C2FC.
(b) Board of Directors.--
(1) In general.--The management of the C2FC shall be vested
in a Board of Directors (referred to in this section as the
``Board'') consisting of 7 members, who shall be appointed by
the President, by and with the advice and consent of the
Senate.
(2) Chairperson and vice chairperson.--
(A) In general.--A Chairperson and Vice Chairperson
of the Board shall be appointed by the President, by
and with the advice and consent of the Senate, from
among the individuals appointed to the Board under
paragraph (1).
(B) Term.--An individual--
(i) shall serve as Chairperson or Vice
Chairperson of the Board for a 3-year term; and
(ii) may be renominated for the position
until the term of that individual on the Board
under paragraph (3)(C) expires.
(3) Board members.--
(A) Citizenship required.--Each member of the Board
shall be an individual who is a citizen of the United
States.
(B) Representation.--The members of the Board shall
represent agricultural, educational, research,
industrial, nongovernmental, labor, environmental
justice, and commercial interests throughout the United
States.
(C) Term.--
(i) In general.--Except as otherwise
provided in this section, each member of the
Board--
(I) shall be appointed for a term
of 6 years; and
(II) may be reappointed for 1
additional term.
(ii) Initial staggered terms.--Of the
members first appointed to the Board--
(I) 2 shall each be appointed for a
term of 2 years;
(II) 3 shall each be appointed for
a term of 4 years; and
(III) 2 shall each be appointed for
a term of 6 years.
(4) Initial meeting.--Not later than 30 days after the date
on which all members of the Board are appointed under paragraph
(1), the Board shall hold an initial meeting.
(c) Working Groups.--
(1) In general.--The Board shall create, oversee, and
incorporate feedback from the following working groups (each
referred to in this section as a ``working group''):
(A) An environmental justice working group.
(B) A worker and community transition assistance
working group.
(C) A research and innovation working group.
(2) Working group members.--
(A) In general.--Each working group shall--
(i) be chaired by a Board member; and
(ii) comprise not less than 10 and not more
than 20 individuals, who shall be experts,
members of directly impacted communities
relating to the subject matter of the working
group, and other relevant stakeholders.
(B) Diversity.--Individuals on a working group
shall, to the maximum extent practicable, represent--
(i) a diverse array of interests related to
the subject matter of the working group; and
(ii) diverse geographical, racial,
religious, gender, educational, age,
disability, and socioeconomic backgrounds.
(3) Meetings.--Each working group shall meet not less than
2 times per year.
(4) Community and stakeholder engagement.--
(A) In general.--Each working group shall create
and engage in meaningful community and stakeholder
involvement opportunities, including through regular
public community engagement activities, for purposes
of--
(i) maintaining up-to-date situational
awareness about the needs of relevant
communities and stakeholders;
(ii) using the feedback obtained through
those opportunities to inform the advice of the
working group to the Board; and
(iii) providing a mechanism for direct and
substantial community feedback relating to the
investment plan and the funding decisions of
the C2FC.
(B) Public awareness.--Each working group shall
inform the public about C2FC investment by engaging in
public awareness campaigns, which shall target relevant
communities through comprehensive and accessible
outreach methods suited for the relevant community.
(C) Broad participation.--In carrying out
subparagraph (A), each working group shall, to the
maximum extent practicable, maximize participation from
a broad group of stakeholders, including by holding
multiple meetings with significant advance notice,
providing access to remote participation in those
meetings, and holding meetings in multiple languages
and at different times and locations.
(5) Tasks.--Each working group shall, as it relates to the
subject matter of the working group--
(A) advise and provide general input to the Board
regarding loans and grants provided by the C2FC; and
(B) consult with, and based on the activities
described in paragraph (4), provide recommendations to,
the Board in the development of and updates to the
investment plan of the C2FC.
(d) Investment Plan.--
(1) In general.--The Board, in consultation with each
working group described in subsection (c)(1), shall develop an
investment plan (referred to in this subsection as the
``investment plan'') for the C2FC in accordance with this
subsection.
(2) Purposes.--The purposes of the investment plan are--
(A) to ensure that investments made by the C2FC--
(i) are equitable and reach the prioritized
communities described in subsection (e)(2);
(ii) are effective at progressing towards
the goals described in subsection (a)(3)(C);
(iii) support the advancement of research
in clean technologies and resilience; and
(iv) are transparent to the prioritized
communities described in subsection (e)(2); and
(B) to provide methods and standards by which the
Board and the working groups described in subsection
(c)(1) shall choose projects in which to invest.
(3) Distribution of grant funds.--The initial investment
plan shall require that, of the total amount of grant funds
provided under subsection (e)(3)(A) each year, not less than 40
percent shall be used to invest in and benefit communities
described in subsection (e)(2)(A).
(4) Investment plan updates.--
(A) In general.--The Board, in consultation with
each working group described in subsection (c)(1),
shall update the investment plan not later than 1 year
after the date of enactment of this Act, and every 4
years thereafter, including by taking into account--
(i) the current needs of the prioritized
communities described in subsection (e)(2);
(ii) the effectiveness of the previous
investment plan in addressing the needs of
those communities;
(iii) the current state of relevant
research and technology;
(iv) the resiliency needs of local
communities;
(v) the goals described in subsection
(a)(3)(C); and
(vi) the 2 most recent program reviews
conducted under subsection (f).
(B) Effectiveness.--An investment plan shall remain
in effect until the date on which the Board approves an
updated investment plan.
(C) Public input.--In updating the investment plan,
the Board and the working groups described in
subsection (c)(1) shall--
(i) engage stakeholders and the public in a
public comment and feedback process; and
(ii) ensure that the prioritized
communities described in subsection (e)(2) have
access to participate in that process.
(5) Public updates.--The Board shall make publicly
available on a quarterly basis information relating to the
expenditure of funds under the investment plan.
(e) Investment Tools.--
(1) Definitions.--In this subsection:
(A) Community of color.--The term ``community of
color'' means a geographically distinct area in which
the population of any of the following categories of
individuals is higher than the average population of
that category for the State in which the community is
located:
(i) Black.
(ii) African American.
(iii) Asian.
(iv) Pacific Islander.
(v) Other non-White race.
(vi) Hispanic.
(vii) Latino.
(viii) Linguistically isolated.
(B) Eligible borrower.--The term ``eligible
borrower'' means any person, including a business owner
or project developer, that seeks a loan to carry out
approved practices or projects described in
subparagraph (A)(i) of paragraph (3) from an eligible
lender that may receive a loan guarantee under that
paragraph for that loan, according to criteria
determined by the C2FC.
(C) Eligible entity.--The term ``eligible entity''
means--
(i) a State;
(ii) an Indian Tribe;
(iii) a unit of local government; and
(iv) a research and development institution
(including a National Laboratory).
(D) Eligible lender.--The term ``eligible lender''
means--
(i) a Federal- or State-chartered bank;
(ii) a Federal- or State-chartered credit
union;
(iii) an agricultural credit corporation;
(iv) a United States Green Bank
Institution;
(v) a community development financial
institution (as defined in section 103 of the
Community Development Banking and Financial
Institutions Act of 1994 (12 U.S.C. 4702));
(vi) a minority depository institution (as
defined in section 308(b) of the Financial
Institutions Reform, Recovery, and Enforcement
Act of 1989 (12 U.S.C. 1463 note; Public Law
101-73)); and
(vii) any other lender that the Board
determines has a demonstrated ability to
underwrite and service loans for the intended
approved practice for which the loan will be
used.
(E) Environmental justice community.--The term
``environmental justice community'' means a community
with significant representation of communities of
color, low-income communities, or Tribal and indigenous
communities that experiences, or is at risk of
experiencing, higher or more adverse human health or
environmental effects.
(F) Indian tribe.--The term ``Indian Tribe'' has
the meaning given the term in section 4 of the Indian
Self-Determination and Education Assistance Act (25
U.S.C. 5304).
(G) Low-income community.--The term ``low-income
community'' means any census block group in which 30
percent or more of the population are individuals with
an annual household income equal to, or less than, the
greater of--
(i) an amount equal to 80 percent of the
median income of the area in which the
household is located, as reported by the
Department of Housing and Urban Development;
and
(ii) 200 percent of the Federal poverty
line.
(H) State.--The term ``State'' means--
(i) a State;
(ii) the District of Columbia;
(iii) the Commonwealth of Puerto Rico; and
(iv) any other territory or possession of
the United States.
(2) Community prioritization.--In providing financial
investment and other assistance under paragraph (3), the C2FC
shall give priority to, as determined by the C2FC--
(A) environmental justice communities, communities
of color, indigenous communities, rural communities,
and low-income communities that--
(i) experience a disproportionate burden of
the negative human health and environmental
impacts of pollution or other environmental
hazards, such as natural disasters; or
(ii) may not have access to public
information and opportunities for meaningful
public participation relating to human health
and environmental planning, regulations, and
enforcement;
(B) deindustrialized communities or communities
with significant local economic reliance on carbon-
intensive industries;
(C) low-income communities at risk of impacts of
natural disasters or sea level rise exacerbated by
climate change;
(D) public or nonprofit entities that serve
dislocated workers, veterans, or individuals with a
barrier to employment; and
(E) communities that have minimal or no investment
in the approved practices and projects described in
paragraph (3)(A)(i).
(3) Grants, loan guarantees, and other investment tools.--
(A) In general.--The C2FC--
(i) shall provide grants to eligible
entities and loan guarantees to eligible
lenders issuing loans to eligible borrowers for
approved practices and projects relating to
climate change mitigation and resilience
measures, including--
(I) energy efficiency upgrades to
infrastructure;
(II) electric, hydrogen, and clean
transportation programs and deployment,
including programs--
(aa) to purchase personal
vehicles, commercial vehicles,
and public transportation
fleets and school bus fleets;
(bb) to deploy electric
vehicle charging and hydrogen
fueling infrastructure; and
(cc) to develop and deploy
sustainable aviation fuels;
(III) clean energy and clean
vehicle manufacturing research,
demonstrations, and deployment, with a
particular focus on projects relating
to the commercialization of new
technologies;
(IV) battery storage research,
demonstrations, and deployment;
(V) development or purchase of
equipment for practices described in
section 6;
(VI) development and deployment of
clean energy and clean technologies,
with a focus on--
(aa) carbon capture,
utilization, and sequestration,
bioenergy with carbon capture
and sequestration, and direct
air capture;
(bb) energy storage and
grid modernization;
(cc) geothermal energy;
(dd) commercial and
residential solar;
(ee) wind energy; and
(ff) any other clean
technology use or development,
as determined by the Board;
(VII) measures that anticipate and
prepare for climate change impacts, and
reduce risks and enhance resilience to
sea level rise, extreme weather events,
heat island impacts, and other climate
change impacts, as determined by the
Board, including by--
(aa) building resilient
energy, water, and
transportation infrastructure;
(bb) providing
weatherization assistance for
low-income households; and
(cc) increasing the
physical and economic
resilience of the agriculture
sector; and
(VIII) natural infrastructure
research, demonstrations, and
deployment; and
(ii) may implement other investment tools
and products approved by the Board, pursuant to
subparagraph (C), to achieve the mission of the
C2FC described in subsection (a)(2).
(B) Loan guarantees.--
(i) In general.--In providing loan
guarantees under subparagraph (A), the C2FC
shall cooperate with eligible lenders through
agreements to participate on a deferred
(guaranteed) basis.
(ii) Level of participation in guaranteed
loans.--In providing a loan guarantee under
subparagraph (A), the C2FC shall guarantee 75
percent of the balance of the financing
outstanding at the time of disbursement of the
loan.
(iii) Interest rates.--Notwithstanding the
provisions of the constitution of any State or
the laws of any State limiting the rate or
amount of interest that may be charged, taken,
received, or reserved, the maximum legal rate
of interest on any financing made on a deferred
basis under this subsection shall not exceed a
rate prescribed by the C2FC.
(iv) Guarantee fees.--
(I) In general.--With respect to
each loan guaranteed under this
subsection (other than a loan that is
repayable in 1 year or less), the C2FC
shall collect a guarantee fee, which
shall be payable by the eligible
lender, and may be charged to the
eligible borrower in accordance with
subclause (II).
(II) Borrower charges.--A guarantee
fee described in subclause (I) charged
to an eligible borrower shall not--
(aa) exceed 2 percent of
the deferred participation
share of a total loan amount
that is equal to or less than
$150,000;
(bb) exceed 3 percent of
the deferred participation
share of a total loan amount
that is greater than $150,000
but less than $700,000; or
(cc) exceed 3.5 percent of
the deferred participation
share of a total loan amount
that is equal to or greater
than $700,000.
(C) Other investment tools and products.--
(i) In general.--The Board may, based on
market needs, develop and implement any other
investment tool or product necessary to achieve
the mission of the C2FC described in subsection
(a)(2) and the deployment of projects described
in subparagraph (A)(i), including offering--
(I) warehousing and aggregation
credit facilities;
(II) zero interest loans;
(III) credit enhancements; and
(IV) construction finance.
(ii) State and local green banks.--The
Board shall provide--
(I) funds to United States Green
Bank Institutions as necessary to
finance projects that are best served
by those entities; and
(II) technical assistance as
necessary to States and localities
seeking to establish green banks.
(D) Prohibited investments.--The Board shall not
issue loans, grants, or otherwise invest in any
activities that directly or indirectly contradict the
mission of the C2FC described in subsection (a)(2).
(4) Wage rate requirements.--
(A) In general.--All laborers and mechanics
employed by eligible entities and eligible borrowers on
projects funded directly by or assisted in whole or in
part by the activities of the C2FC under this section
shall be paid at wages at rates not less than those
prevailing on projects of a similar character in the
locality as determined by the Secretary of Labor in
accordance with subchapter IV of chapter 31 of title
40, United States Code (commonly known as the ``Davis-
Bacon Act'').
(B) Authority.--With respect to the labor standards
specified in subparagraph (A), the Secretary of Labor
shall have the authority and functions set forth in
Reorganization Plan No. 14 of 1950 (64 Stat. 1267; 5
U.S.C. App.) and section 3145 of title 40, United
States Code.
(5) Buy america requirements.--
(A) In general.--All iron, steel, and manufactured
goods used for projects under this section shall be
produced in the United States.
(B) Waiver.--The Board may waive the requirement in
subparagraph (A) if the Board finds that--
(i) enforcing the requirement would be
inconsistent with the public interest;
(ii) the iron, steel, and manufactured
goods produced in the United States are not
produced in a sufficient and reasonably
available amount or are not of a satisfactory
quality; or
(iii) enforcing the requirement will
increase the overall cost of the project by
more than 25 percent.
(f) Program Review and Report.--Not later than 2 years after the
date of enactment of this Act, and every 2 years thereafter, the Board
shall--
(1) conduct a review of the activities of the C2FC and
identify projects and funding opportunities that were a part of
the current investment plan; and
(2) submit to Congress and make publicly available a report
that--
(A) describes the projects and funding
opportunities that have been most successful in
progressing towards the mission described in subsection
(a)(2) during the time period covered by the report;
(B) includes recommendations on the clean energy
and resiliency projects that should be prioritized in
forthcoming years to achieve that mission;
(C) quantifies the total amount and percentage of
funding given to prioritized communities described in
subsection (e)(2); and
(D) identifies barriers for disadvantaged groups to
receive C2FC funding and provides recommendations to
address those barriers.
(g) Initial Capitalization.--There is appropriated to carry out
this section (including for administrative costs of the C2FC), out of
any funds in the Treasury not otherwise appropriated, $7,500,000,000
for each of fiscal years 2026 and 2027, to remain available until
expended.
SEC. 3. CARBON FEE.
(a) In General.--Chapter 38 of subtitle D of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
subchapter:
``Subchapter E--Carbon Fee
``Sec. 4691. Definitions.
``Sec. 4692. Carbon fee.
``Sec. 4693. Fee on noncovered fuel emissions.
``Sec. 4694. Refunds for carbon capture, sequestration, and
utilization.
``Sec. 4695. Border adjustments.
``SEC. 4691. DEFINITIONS.
``For purposes of this subchapter--
``(1) Administrator.--The term `Administrator' means the
Administrator of the Environmental Protection Agency.
``(2) Carbon dioxide equivalent or co<INF>2</INF>-e.--The
term `carbon dioxide equivalent' or `CO<INF>2</INF>-e' means
the number of metric tons of carbon dioxide emissions with the
same global warming potential over a 100-year period as one
metric ton of another greenhouse gas.
``(3) Carbon-intensive product.--The term `carbon-intensive
product' means--
``(A) iron, steel, steel mill products (including
pipe and tube), aluminum, cement, glass (including
flat, container, and specialty glass and fiberglass),
pulp, paper, chemicals, or industrial ceramics, and
``(B) any manufactured product which the Secretary,
in consultation with the Administrator, the Secretary
of Commerce, and the Secretary of Energy, determines is
energy-intensive and trade-exposed (with the exception
of any covered fuel).
``(4) Covered entity.--The term `covered entity' means--
``(A) in the case of crude oil--
``(i) any operator of a United States
refinery (as described in subsection (d)(1) of
section 4611), and
``(ii) any person entering such product
into the United States for consumption, use, or
warehousing (as described in subsection (d)(2)
of such section),
``(B) in the case of coal--
``(i) any producer subject to the tax under
section 4121, and
``(ii) any importer of coal into the United
States,
``(C) in the case of natural gas--
``(i) any entity which produces natural gas
(as defined in section 613A(e)(2)) from a well
located in the United States, and
``(ii) any importer of natural gas into the
United States,
``(D) in the case of any noncovered fuel emissions,
the entity which is the source of such emissions,
provided that the total amount of carbon dioxide or
methane emitted by such entity for the preceding year
(as determined using the methodology required under
section 4692(e)(4)) was not less than 25,000 metric
tons, and
``(E) any entity or class of entities which, as
determined by the Secretary, is transporting, selling,
or otherwise using a covered fuel in a manner which
emits a greenhouse gas into the atmosphere and which
has not been covered by the carbon fee, the fee on
noncovered fuel emissions, or the carbon border fee
adjustment.
``(5) Covered fuel.--The term `covered fuel' means crude
oil, natural gas, coal, or any other product derived from crude
oil, natural gas, or coal which shall be used so as to emit
greenhouse gases to the atmosphere.
``(6) Greenhouse gas.--The term `greenhouse gas'--
``(A) has the meaning given such term in section
901 of the Energy Independence and Security Act of 2007
(42 U.S.C. 17321), as in effect on the date of the
enactment of the America's Clean Future Fund Act, and
``(B) includes any other gases identified by rule
of the Administrator.
``(7) Greenhouse gas content.--The term `greenhouse gas
content' means the amount of greenhouse gases, expressed in
metric tons of CO<INF>2</INF>-e, which would be emitted to the
atmosphere by the use of a covered fuel.
``(8) Noncovered fuel emission.--The term `noncovered fuel
emission' means any carbon dioxide or methane emitted as a
result of the production, processing, transport, or use of any
product or material within the energy or industrial sectors--
``(A) including any fugitive or process emissions
associated with the production, processing, or
transport of a covered fuel, and
``(B) excluding any emissions from the combustion
or use of a covered fuel.
``(9) Qualified carbon oxide.--The term `qualified carbon
oxide' has the meaning given the term in section 45Q(c).
``(10) United states.--The term `United States' shall be
treated as including each possession of the United States
(including the Commonwealth of Puerto Rico and the Commonwealth
of the Northern Mariana Islands).
``SEC. 4692. CARBON FEE.
``(a) Definitions.--In this section:
``(1) Applicable period.--The term `applicable period'
means, with respect to any determination made by the Secretary
under subsection (e)(3) for any calendar year, the period--
``(A) beginning on January 1, 2027, and
``(B) ending on December 31 of the preceding
calendar year.
``(2) Cumulative emissions.--The term `cumulative
emissions' means an amount equal to the sum of any greenhouse
gas emissions resulting from the use of covered fuels and any
noncovered fuel emissions for all years during the applicable
period.
``(3) Cumulative emissions target.--The term `cumulative
emissions target' means an amount equal to the sum of the
emissions targets for all years during the applicable period.
``(4) Emissions target.--The term `emissions target' means
the target for greenhouse gas emissions during a calendar year
as determined under subsection (e)(1).
``(b) Carbon Fee.--During any calendar year that begins after
December 31, 2026, there is imposed a carbon fee on any covered
entity's use, sale, or transfer of any covered fuel.
``(c) Amount of the Carbon Fee.--The carbon fee imposed by this
section is an amount equal to--
``(1) the greenhouse gas content of the covered fuel,
multiplied by
``(2) the carbon fee rate, as determined under subsection
(d).
``(d) Carbon Fee Rate.--The carbon fee rate shall be determined in
accordance with the following:
``(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 2027, $75, and
``(B) except as provided in paragraphs (2) and (3),
in the case of any calendar year after 2027, the amount
equal to the sum of--
``(i) the amount under subparagraph (A),
plus--
``(ii)(I) in the case of calendar year
2028, $10, and
``(II) in the case of any calendar year
after 2028, the amount in effect under this
clause for the preceding calendar year, plus
$10.
``(2) Inflation adjustment.--
``(A) In general.--In the case of any calendar year
after 2027, the amount determined under paragraph
(1)(B) shall be increased by an amount equal to--
``(i) that dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for that
calendar year, determined by substituting
`2026' for `2016' in subparagraph (A)(ii)
thereof.
``(B) Rounding.--If any increase determined under
subparagraph (A) is not a multiple of $1, such increase
shall be rounded up to the next whole dollar amount.
``(3) Adjustment of carbon fee rate.--
``(A) Increase in rate following missed cumulative
emissions target.--In the case of any calendar year
following a determination by the Secretary pursuant to
subsection (e)(3) that the cumulative emissions for the
preceding calendar year exceeded the cumulative
emissions target for such year, paragraph
(1)(B)(ii)(II) shall be applied--
``(i) in the case of calendar years 2029
through 2030, by substituting `$15' for `$10',
``(ii) in the case of calendar years 2031
through 2040, by substituting `$20' for `$10',
and
``(iii) in the case of any calendar year
beginning after 2040, by substituting `$25' for
`$10'.
``(B) Cessation of rate increase following
achievement of cumulative emissions target.--In the
case of any year following a determination by the
Secretary pursuant to subsection (e)(3) that--
``(i) the average annual emissions of
greenhouse gases from covered entities over the
preceding 3-year period are not more than 10
percent of the greenhouse gas emissions during
the year 2018, and
``(ii) the cumulative emissions did not
exceed the cumulative emissions target,
paragraph (1)(B)(ii)(II) shall be applied by
substituting `$0' for `$10'.
``(C) Methodology.--With respect to any year, the
annual greenhouse gas emissions and cumulative
emissions described in subparagraph (A) or (B) shall be
determined using the methodology required under
subsection (e)(4).
``(e) Emissions Targets.--
``(1) In general.--
``(A) Reference year.--For purposes of subsection
(d), the emissions target for any year shall be the
amount of greenhouse gas emissions that is equal to--
``(i) for calendar years 2027 and 2028, the
applicable percentage of the total amount of
greenhouse gas emissions from the use of any
covered fuel during calendar year 2018, and
``(ii) for calendar year 2029 and each
calendar year thereafter, the applicable
percentage of the total amount of greenhouse
gas emissions from the use of any covered fuel
and noncovered fuel emissions during calendar
year 2018.
``(B) Methodology.--For purposes of subparagraph
(A), with respect to determining the total amount of
greenhouse gas emissions from the use of any covered
fuel and noncovered fuel emissions during calendar year
2018, the Administrator shall use such methods as are
determined appropriate, provided that such methods are,
to the greatest extent practicable, comparable to the
methods established under paragraph (4).
``(2) Applicable percentage.--
``(A) 2027 through 2035.--In the case of calendar
years 2027 through 2035, the applicable percentage
shall be determined as follows:
``Year Applicable percentage
2027............................................... 63 percent
2028............................................... 60 percent
2029............................................... 57 percent
2030............................................... 55 percent
2031............................................... 52 percent
2032............................................... 49 percent
2033............................................... 46 percent
2034............................................... 43 percent
2035............................................... 40 percent
``(B) 2036 through 2050.--In the case of calendar
years 2036 through 2050, the applicable percentage
shall be equal to--
``(i) the applicable percentage for the
preceding year, minus
``(ii) 2 percentage points.
``(C) After 2050.--In the case of any calendar year
beginning after 2050, the applicable percentage shall
be equal to 10 percent.
``(3) Emissions reporting and determinations.--
``(A) Reporting.--Not later than September 30,
2027, and annually thereafter, the Administrator, in
consultation with the Secretary, shall make available
to the public a report on--
``(i) the cumulative emissions with respect
to the preceding calendar year, and
``(ii) any other relevant information, as
determined appropriate by the Administrator.
``(B) Determinations.--Not later than September 30,
2029, and annually thereafter, the Administrator, in
consultation with the Secretary and as part of the
report described in subparagraph (A), shall determine
whether cumulative emissions with respect to the
preceding calendar year exceeded the cumulative
emissions target with respect to such year.
``(4) Emissions accounting methodology.--
``(A) In general.--Not later than January 1, 2027,
the Administrator shall prescribe rules for greenhouse
gas accounting for covered entities for purposes of
this subchapter, which shall--
``(i) to the greatest extent practicable,
employ existing data collection methodologies
and greenhouse gas accounting practices,
including such methodologies and practices
developed by the National Laboratories (as
defined in section 2 of the Energy Policy Act
of 2005 (42 U.S.C. 15801)),
``(ii) ensure that the method of
accounting--
``(I) applies to--
``(aa) all greenhouse gas
emissions from covered fuels
and all noncovered fuel
emissions, and
``(bb) all covered
entities,
``(II) excludes--
``(aa) any greenhouse gas
emissions which are not
described item (aa) of
subclause (I), and
``(bb) any entities which
are not described in item (bb)
of such subclause, and
``(III) appropriately accounts
for--
``(aa) qualified carbon
oxide which is captured and
disposed or used in a manner
described in section 4694, and
``(bb) nonemitting uses of
covered fuels, as described in
subsection (f),
``(iii) subject to such penalties as are
determined appropriate by the Administrator,
require any covered entity to report, not later
than April 1 of each calendar year--
``(I) the total greenhouse gas
content of any covered fuels used,
sold, or transferred by such covered
entity during the preceding calendar
year, and
``(II) the total noncovered fuel
emissions of the covered entity during
the preceding calendar year, and
``(iv) require any information reported
pursuant to clause (iii) to be verified by a
third-party entity that, subject to such
process as is determined appropriate by the
Administrator, has been certified by the
Administrator with respect to the
qualifications, independence, and reliability
of such entity.
``(B) Greenhouse gas reporting program.--For
purposes of establishing the rules described in
subparagraph (A), the Administrator may elect to modify
the activities of the Greenhouse Gas Reporting Program
established under part 98 of title 40, Code of Federal
Regulations, as in effect on January 1, 2025, to
satisfy the requirements described in clauses (i)
through (iv) of such subparagraph.
``(5) Revisions.--With respect to any determination made by
the Administrator as to the amount of greenhouse gas emissions
for any calendar year (including calendar year 2018), any
subsequent revision by the Administrator with respect to such
amount shall apply for purposes of the fee imposed under
subsection (b) for any calendar years beginning after such
revision.
``(f) Exemption and Refund.--The Secretary shall prescribe such
rules as are necessary to ensure the carbon fee imposed by this section
is not imposed with respect to any nonemitting use, or any sale or
transfer for a nonemitting use, including rules providing for the
refund of any carbon fee paid under this section with respect to any
such use, sale, or transfer.
``(g) Administrative Authority.--The Secretary, in consultation
with the Administrator, shall prescribe such regulations, and other
guidance, to assess and collect the carbon fee imposed by this section,
including--
``(1) the identification of covered entities that are
liable for payment of a fee under this section or section 4693,
``(2) as may be necessary or convenient, rules for
distinguishing between different types of covered entities,
``(3) as may be necessary or convenient, rules for
distinguishing between the greenhouse gas emissions of a
covered entity and the greenhouse gas emissions that are
attributed to the covered entity but not directly emitted by
the covered entity,
``(4) requirements for the quarterly payment of such fees,
and
``(5) rules to ensure that the carbon fee under this
section, the fee on noncovered fuel emissions under section
4693, or the carbon border fee adjustment is not imposed on an
emission from covered fuel or noncovered fuel emission more
than once.
``SEC. 4693. FEE ON NONCOVERED FUEL EMISSIONS.
``(a) In General.--During any calendar year that begins after
December 31, 2028, there is imposed a fee on a covered entity for any
noncovered fuel emissions which occur during the calendar year.
``(b) Amount.--The fee to be paid under subsection (a) by the
covered entity which is the source of the emissions described in that
subsection shall be an amount equal to--
``(1) the total amount, in metric tons of CO<INF>2</INF>-e,
of emitted greenhouse gases, multiplied by
``(2) an amount equal to the carbon fee rate in effect
under section 4692(d) for the calendar year of such emission.
``(c) Administrative Authority.--The Secretary, in consultation
with the Administrator, shall prescribe such regulations, and other
guidance, to assess and collect the carbon fee imposed by this section,
including regulations describing the requirements for the quarterly
payment of such fees.
``SEC. 4694. REFUNDS FOR CARBON CAPTURE, SEQUESTRATION, AND
UTILIZATION.
``(a) In General.--
``(1) Capture, sequestration, and use.--The Secretary, in
consultation with the Administrator and the Secretary of
Energy, shall prescribe regulations for providing payments to
any person which captures qualified carbon oxide which is--
``(A) disposed of by such person in secure
geological storage, as described in section 45Q(f)(2),
or
``(B) used in a manner which has been approved by
the Secretary pursuant to subsection (c).
``(2) Election.--If the person described in paragraph (1)
makes an election under this paragraph in such time and manner
as the Secretary may prescribe by regulations, the credit under
this section--
``(A) shall be allowable to the person that owns
the facility described in subsection (b)(1), and
``(B) shall not be allowable to the person
described in paragraph (1).
``(b) Payments for Carbon Capture.--
``(1) In general.--In the case of any facility for which
carbon capture equipment has been placed in service, the
Secretary shall make payments in the same manner as if such
payment was a refund of an overpayment of the fee imposed by
section 4692 or 4693.
``(2) Amount of payment.--The payment determined under this
subsection shall be an amount equal to--
``(A) the metric tons of qualified carbon oxide
captured and disposed of, used, or utilized in a manner
consistent with subsection (a), multiplied by
``(B)(i) the carbon fee rate during the year in
which the carbon fee was imposed by section 4692 on the
covered fuel to which such carbon oxide relates, or
``(ii) in the case of a direct air capture facility
(as defined in section 45Q(e)(1)), the carbon fee rate
during the year in which the qualified carbon oxide was
captured and disposed of, used, or utilized.
``(c) Approved Uses of Qualified Carbon Oxide.--
``(1) In general.--Subject to paragraph (2), the Secretary,
in consultation with Administrator and the Secretary of Energy,
shall, through regulation or other public guidance, determine
which uses of qualified carbon oxide are eligible for payments
under this section, which may include--
``(A) utilization in a manner described in clause
(i) or (ii) of section 45Q(f)(5)(A), or
``(B) any other use which ensures minimal leakage
or escape of such carbon oxide.
``(2) Exclusion for enhanced oil or natural gas recovery.--
The sale or use of qualified carbon oxide as a tertiary
injectant in a qualified enhanced oil or natural gas recovery
project (as defined in section 45Q(e)(4)) shall not be eligible
for payments under this section.
``(d) Exception.--In the case of any facility which is owned by an
entity that is determined to be--
``(1) in violation of any applicable air or water quality
regulations, or
``(2) with respect to any environmental justice community
(as defined in section 2(d)(1)(D) of the America's Clean Future
Fund Act), creating health or environmental harm to such
community,
such facility shall not be eligible for any payment under this
section during the period of such violation.
``SEC. 4695. BORDER ADJUSTMENTS.
``(a) In General.--The fees imposed by, and refunds allowed under,
this section shall be referred to as `the carbon border fee
adjustment'.
``(b) Exports.--
``(1) Carbon-intensive products.--In the case of any
carbon-intensive product which is exported from the United
States, the Secretary shall pay to the person exporting such
product a refund equal to the amount of the cost of such
product attributable to any fees imposed under this subchapter
related to the manufacturing of such product (as determined
under regulations established by the Secretary).
``(2) Covered fuels.--In the case of any covered fuel which
is exported from the United States, the Secretary shall pay to
the person exporting such fuel a refund equal to the amount of
the cost of such fuel attributable to any fees imposed under
this subchapter related to the use, sale, or transfer of such
fuel.
``(c) Imports.--
``(1) Carbon-intensive products.--
``(A) Imposition of equivalency fee.--In the case
of any carbon-intensive product imported into the
United States, there is imposed an equivalency fee on
the person importing such product in an amount equal to
the cost of such product that would be attributable to
any fees imposed under this subchapter related to the
manufacturing of such product if any inputs or
processes used in manufacturing such product were
subject to such fees (as determined under regulations
established by the Secretary).
``(B) Reduction in fee.--The amount of the
equivalency fee under subparagraph (A) shall be reduced
by the amount, if any, of any fees imposed on the
carbon-intensive product by the foreign nation or
governmental units from which such product was
imported.
``(2) Covered fuels.--
``(A) In general.--In the case of any covered fuel
imported into the United States, there is imposed an
equivalency fee on the person importing such fuel in an
amount equal to the amount of any fees that would be
imposed under this subchapter related to the use, sale,
or transfer of such fuel.
``(B) Reduction in fee.--The amount of the fee
under subparagraph (A) shall be reduced by the amount,
if any, of any fees imposed on the covered fuel by the
foreign nation or governmental units from which the
fuel was imported.
``(d) Treatment of Alternative Policies as Fees.--Under regulations
established by the Secretary, foreign policies that have substantially
the same effect in reducing emissions of greenhouse gases as fees shall
be treated as fees for purposes of subsections (b) and (c).
``(e) Regulatory Authority.--
``(1) In general.--The Secretary shall consult with the
Administrator, the Secretary of Commerce, and the Secretary of
Energy in establishing rules and regulations implementing the
purposes of this section.
``(2) Treaties.--The Secretary, in consultation with the
Secretary of State, may adjust the applicable amounts of the
refunds and equivalency fees under this section in a manner
that is consistent with any obligations of the United States
under an international agreement.''.
(b) Effective Date.--The amendment made by this section shall apply
to periods beginning after December 31, 2026.
SEC. 4. AMERICA'S CLEAN FUTURE FUND.
(a) In General.--Subchapter A of chapter 98 of the Internal Revenue
Code of 1986 is amended by adding at the end the following:
``SEC. 9512. AMERICA'S CLEAN FUTURE FUND.
``(a) Establishment and Funding.--There is established in the
Treasury of the United States a trust fund to be known as the
`America's Clean Future Fund' (referred to in this section as the
`Trust Fund'), consisting of such amounts as are appropriated to the
Trust Fund under subsection (b).
``(b) Transfers to America's Clean Future Fund.--There is
appropriated to the Trust Fund, out of any funds in the Treasury not
otherwise appropriated, amounts equal to the fees received into the
Treasury under sections 4692, 4693, and 4695, less--
``(1) any amounts refunded or paid under sections 4692(d),
4694, and 4695(b), and
``(2) for each of the first 14 fiscal years beginning after
September 30, 2027, an amount equal to the quotient of--
``(A) $100,000,000,000, and
``(B) 14.
``(c) Expenditures.--For each fiscal year, amounts in the Trust
Fund shall be apportioned as follows:
``(1) Carbon fee rebate and agricultural decarbonization
transition payments.--
``(A) Carbon fee rebate.--For the purposes
described in section 5 of the America's Clean Future
Fund Act and any expenses necessary to administer such
section--
``(i) for each of the first 10 fiscal years
beginning after September 30, 2027, an amount
equal to--
``(I) 75 percent of those amounts,
minus
``(II) the amount determined under
subparagraph (B) for such fiscal year,
and
``(ii) for any fiscal year beginning after
the period described in clause (i), the
applicable percentage of such amounts.
``(B) Agricultural decarbonization transition
payments.--For the purposes described in section 6 of
the America's Clean Future Fund Act, for each of the
first 10 fiscal years beginning after September 30,
2027, an amount equal to 7 percent of the amount
determined annually under subparagraph (A)(i)(I).
``(C) Applicable percentage.--For purposes of
subparagraph (A)(ii), the applicable percentage shall
be equal to--
``(i) for the first fiscal year beginning
after the period described in subparagraph
(A)(i), 76 percent,
``(ii) for each of the first 3 fiscal years
subsequent to the period described in clause
(i), the applicable percentage for the
preceding fiscal year increased by 1 percentage
point, and
``(iii) for any fiscal year subsequent to
the period described in clause (ii), 80
percent.
``(2) Climate change finance corporation.--
``(A) In general.--For the purposes described in
section 2 of the America's Clean Future Fund Act
(including any expenses necessary to administer such
section), the applicable percentage of such amounts.
``(B) Applicable percentage.--For purposes of this
paragraph, the applicable percentage shall be equal
to--
``(i) for each of the first 10 fiscal years
beginning after the period described in
subsection (e) of such section, 15 percent,
``(ii) for each of the first 4 fiscal years
subsequent to the period described in clause
(i), the applicable percentage for the
preceding fiscal year increased by 1 percentage
point, and
``(iii) for any fiscal year subsequent to
the period described in clause (ii), 20
percent.
``(3) Transition assistance for impacted communities.--
``(A) In general.--For the purposes described in
section 7 of the America's Clean Future Fund Act
(including any expenses necessary to administer such
section), the applicable percentage of such amounts.
``(B) Applicable percentage.--For purposes of this
paragraph, the applicable percentage shall be equal
to--
``(i) for each of the first 10 fiscal years
beginning after September 30, 2027, 10 percent,
``(ii) for each of the first 4 fiscal years
subsequent to the period described in clause
(i), the applicable percentage for the
preceding fiscal year reduced by 2 percentage
points, and
``(iii) for any fiscal year subsequent to
the period described in clause (ii), 0
percent.''.
(b) Clerical Amendment.--The table of sections for subchapter A of
chapter 98 of the Internal Revenue Code of 1986 is amended by adding at
the end the following new item:
``Sec. 9512. America's Clean Future Fund.''.
SEC. 5. AMERICA'S CLEAN FUTURE FUND STIMULUS.
(a) Eligible Individual.--
(1) In general.--In this section, the term ``eligible
individual'' means, with respect to any quarter, any natural
living person--
(A) who has a valid Social Security number or
taxpayer identification number,
(B) who has attained 18 years of age, and
(C) whose principal place of abode is in the United
States for more than one-half of the most recent
taxable year for which a return has been filed.
(2) Verification.--The Secretary of the Treasury, or the
Secretary's delegate (referred to in this section as the
``Secretary'') may verify the eligibility of an individual to
receive a carbon fee rebate payment under subsection (b).
(b) Rebates.--Subject to subsections (c)(2) and (k), from amounts
in the America's Clean Future Fund established by section 9512(c)(1)(A)
of the Internal Revenue Code of 1986 that are available in any year,
the Secretary shall, for each calendar quarter beginning after
September 30, 2027, make carbon fee rebate payments to each eligible
individual, to be known as ``America's Clean Future Fund Stimulus
payments'' (referred to in this section as ``carbon fee rebate
payments'').
(c) Pro-Rata Share.--
(1) In general.--With respect to each quarter during any
fiscal year beginning after September 30, 2027, the carbon fee
rebate payment is 1 pro-rata share for each eligible individual
of an amount equal to 25 percent of amounts apportioned under
section 9512(c)(1)(A) of the Internal Revenue Code of 1986 for
such fiscal year.
(2) Initial annual rebate payments.--
(A) In general.--From amounts appropriated under
subsection (j), the Secretary shall, for each of fiscal
years 2026 and 2027, make carbon fee rebate payments to
each eligible individual during the third quarter of
each such fiscal year.
(B) Pro-rata share.--For purposes of this
paragraph, the carbon fee rebate payment is 1 pro-rata
share for each eligible individual of the amount
appropriated under subsection (j) for the fiscal year.
(3) Estimate.--For each fiscal year described in paragraph
(1), the Secretary shall, not later than the first day of such
fiscal year, publicly announce an estimate of the amount of the
carbon fee rebate payment for each quarter during such fiscal
year.
(d) Phaseout.--
(1) Definitions.--In this subsection:
(A) Modified adjusted gross income.--The term
``modified adjusted gross income'' means adjusted gross
income increased by any amount excluded from gross
income under section 911, 931, or 933 of the Internal
Revenue Code of 1986.
(B) Household member.--The term ``household member
of the taxpayer'' means the taxpayer, the taxpayer's
spouse, and any dependent of the taxpayer.
(C) Threshold amount.--The term ``threshold
amount'' means--
(i) $150,000 in the case of a taxpayer
filing a joint return, and
(ii) $75,000 in the case of a taxpayer not
filing a joint return.
(2) Phaseout of payments.--In the case of any taxpayer
whose modified adjusted gross income for the most recent
taxable year for which a return has been filed exceeds the
threshold amount, the amount of the carbon fee rebate payment
otherwise payable to any household member of the taxpayer under
this section shall be reduced (but not below zero) by a dollar
amount equal to 5 percent of such payment (as determined before
application of this paragraph) for each $1,000 (or fraction
thereof) by which the modified adjusted gross income of the
taxpayer exceeds the threshold amount.
(e) Fee Treatment of Payments.--Amounts paid under this section
shall not be includible in gross income for purposes of Federal income
taxes.
(f) Federal Programs and Federal Assisted Programs.--The carbon fee
rebate payment received by any eligible individual shall not be taken
into account as income and shall not be taken into account as resources
for purposes of determining the eligibility of such individual or any
other individual for benefits or assistance, or the amount or extent of
benefits or assistance, under any Federal program or under any State or
local program financed in whole or in part with Federal funds.
(g) Disclosure of Return Information.--Section 6103(l) of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new paragraph:
``(23) Disclosure of return information relating to carbon
fee rebate payments.--
``(A) Department of treasury.--Return information
with respect to any taxpayer 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 5
of the America's Clean Future Fund Act.
``(B) Restriction on disclosure.--Information
disclosed under this paragraph shall be disclosed only
for purposes of, and to the extent necessary in,
carrying out such section.''.
(h) Regulations.--The Secretary shall prescribe such regulations,
and other guidance, as may be necessary to carry out the purposes of
this section, including--
(1) establishment of rules for eligible individuals who
have not filed a recent tax return, and
(2) in coordination with the Commissioner of Social
Security, the Secretary of Veterans Affairs, and any relevant
State agencies, establish methods to identify eligible
individuals and provide carbon fee rebate payments to such
individuals through appropriate means of distribution,
including through the use of electronic benefit transfer cards.
(i) Public Awareness Campaign.--The Secretary shall conduct a
public awareness campaign, in coordination with the Commissioner of
Social Security, the heads of other relevant Federal agencies, and
Indian Tribes (as defined in section 4 of the Indian Self-Determination
and Education Assistance Act (25 U.S.C. 5304)), to provide information
to the public regarding the availability of carbon fee rebate payments
under this section.
(j) Initial Appropriation.--For purposes of subsection (c)(2),
there is appropriated, out of any funds in the Treasury not otherwise
appropriated, to remain available until expended--
(1) for the fiscal year ending September 30, 2026,
$37,500,000,000, and
(2) for the fiscal year ending September 30, 2027,
$37,500,000,000.
(k) Termination.--This section shall not apply to any calendar
quarter beginning after--
(1) a determination by the Secretary under section
4692(d)(3)(B) of the Internal Revenue Code of 1986; or
(2) any period of 8 consecutive calendar quarters for which
the amount of carbon fee rebate payment (without application of
subsection (d)) during each such quarter is less than $20.
SEC. 6. AGRICULTURAL DECARBONIZATION TRANSITION PAYMENTS.
(a) Purposes.--The purposes of this section are--
(1) to provide transition assistance to eligible producers
in the agricultural sector to prepare for and facilitate entry
into greenhouse gas credit markets; and
(2) to provide for the collection and reporting of data
under subsection (d).
(b) Definitions.--In this section:
(1) Eligible land.--The term ``eligible land'' means land
in the United States, including territories of the United
States and Indian land (as defined in section 2601 of the
Energy Policy Act of 1992 (25 U.S.C. 3501)), that has a
cropping or livestock history during each of the 3 years
preceding the date on which a payment is provided under the
program with respect to the land, as determined by the
Secretary.
(2) Eligible producer.--The term ``eligible producer''
means an individual or legal entity that--
(A) is an owner, operator, or tenant of eligible
land; and
(B) has the ability to enter into an agreement with
the Secretary to carry out qualifying actions described
in subsection (c)(2) under the program.
(3) Greenhouse gas emissions reduction.--The term
``greenhouse gas emissions reduction'' means the reduction in
greenhouse gas emissions as a result of the adoption of
qualifying actions described in subsection (c)(2), as compared
to an historical baseline.
(4) Program.--The term ``program'' means the program
established under subsection (c)(1).
(5) Secretary.--The term ``Secretary'' means the Secretary
of Agriculture.
(6) Traditionally underserved.--The term ``traditionally
underserved'', with respect to an eligible producer, means that
the eligible producer--
(A) has been socially or economically disadvantaged
by previous discriminatory laws or policies based on
race, ethnicity, or disability;
(B) is new to agriculture, as determined by the
Secretary;
(C)(i) has served in the United States Armed
Forces; and
(ii)(I) has not operated an agriculture operation;
(II) is new to agriculture, as determined by the
Secretary; or
(III) first obtained veteran status during the
previous 5-year period;
(D) is an owner, operator, or tenant of a limited
resource agriculture operation; or
(E) has a household income not greater than the
national poverty level.
(c) Establishment of Program.--
(1) In general.--The Secretary shall establish a program to
provide payments to eligible producers that will assist with
reducing greenhouse gas emissions through the adoption of
qualifying actions described in paragraph (2).
(2) Qualifying actions.--
(A) In general.--The Secretary shall determine
actions that qualify for payments under the program.
(B) Requirements.--To be a qualifying action under
subparagraph (A), an action shall be--
(i) a climate-smart practice, including--
(I) a practice determined by a
land-grant college or university (as
defined in section 1404 of the National
Agricultural Research, Extension, and
Teaching Policy Act of 1977 (7 U.S.C.
3103)); or
(II) climate-smart energy
generation, fueling, or efficiency; and
(ii) measurable, reportable, and verifiable
for reducing greenhouse gas emissions, as
determined by the Secretary.
(3) Considerations.--In determining the rate and duration
of a payment under paragraph (1), the Secretary shall
consider--
(A) the degree of additionality of the greenhouse
gas emissions reduction;
(B) whether the recipient of the payment was an
early adopter of 1 or more practices that reduce
greenhouse gas emissions;
(C) the likelihood that the applicable qualifying
action described in paragraph (2) would have been
carried out absent the provision of the payment;
(D) the degree of transitionality or permanence of
the greenhouse gas emissions reduction;
(E) whether the applicable qualifying action
described in paragraph (2) provides multiple
environmental and health co-benefits in addition to
reduced greenhouse gas emissions;
(F) the degree to which the recipient of the
payment is a traditionally underserved eligible
producer;
(G) the integration with and enhancement of
payments and policies of similar Federal, State, or
local programs; and
(H) any payments received, or to be received, by
the applicable eligible producer from a similar
Federal, State, or local program for applicable
qualifying actions described in paragraph (2).
(4) Ineligibility.--A person that is determined to be in
violation of any applicable water or air quality regulation,
including under the Federal Water Pollution Control Act (33
U.S.C. 1251 et seq.) (including regulations), shall not be
eligible for any payment under paragraph (1) during the period
of the violation.
(5) Effectiveness.--The authority to provide payments under
this subsection shall be effective for each of the first 10
fiscal years beginning after September 30, 2026.
(d) Collection of Data and Reporting.--
(1) Measurement system.--The Secretary shall use an
outcomes-based measurement system that uses the best available
science and technology for cost-effective recordkeeping,
modeling, and measurement of farm-level greenhouse gas
emissions on eligible land enrolled in the program.
(2) Inventory.--
(A) In general.--For the purposes of providing
payments under the program, the Secretary shall conduct
a nationwide soil health and agricultural greenhouse
gas emissions inventory that uses the best available
science and data to establish baselines and expected
average performance for soil carbon drawdown and
storage and greenhouse gas emissions reduction by
primary production type and production region.
(B) Database.--The Secretary shall--
(i) establish an accessible and
interoperable database for the inventory
established under subparagraph (A) using the
measurement system established under paragraph
(1); and
(ii) improve and update the database as new
data is collected, but not less frequently than
once every 2 years.
(3) Criteria.--
(A) In general.--The Secretary shall establish
criteria for payments under the program to inform
policy and markets established to promote greenhouse
gas emissions reductions.
(B) Requirements.--The criteria established under
subparagraph (A) shall--
(i) have a documented likelihood of
providing long-term net greenhouse gas
emissions reductions, according to the best
available science;
(ii) be based in part on environmental
impact modeling of the changes of shifting from
baseline practices to new or improved
practices; and
(iii) prevent, to the maximum extent
practicable, the degradation of other natural
resource or environmental conditions.
(4) Measurement, reporting, monitoring, and verification
services.--
(A) In general.--The Secretary--
(i) shall provide services described in
subparagraph (B) to eligible producers
participating in the program; and
(ii) may approve and provide oversight of 1
or more third-party agents to provide services
described in subparagraph (B) to eligible
producers participating in the program.
(B) Services described.--Services referred to in
subparagraph (A) are determining the greenhouse gas
emissions reduction by--
(i) measurement;
(ii) reporting;
(iii) monitoring; and
(iv) verification.
(C) Use of protocols.--Services referred to in
subparagraph (A) shall be provided using--
(i) the measurement system described in
paragraph (1); and
(ii) the criteria described in paragraph
(3).
(D) Privacy and data security.--
(i) In general.--The Secretary shall
establish--
(I) safeguards to protect the
privacy of information that is
submitted through or retained by a
third-party agent approved under
subparagraph (A), including employees
and contractors of the third-party
agent; and
(II) such other rules and standards
of data security as the Secretary
determines to be appropriate to carry
out this subsection.
(ii) Penalties.--The Secretary shall
establish penalties for any violations of
privacy or confidentiality under clause (i).
(E) Disclosure of information.--
(i) Public disclosure.--Information
collected for purposes of services provided
under subparagraph (A) may be disclosed to the
public--
(I) if the information is
transformed into a statistical or
aggregate form such that the
information does not include any
identifiable or personal information of
individual producers; or
(II) in a form that may include
identifiable or personal information of
a producer only if that producer
consents to the disclosure of the
information.
(ii) Research, audit, and program
improvement.--Information collected for the
purposes of services provided under
subparagraph (A) may be disclosed for the
purposes of providing technical assistance,
including audit, research, or improvement of a
program under this section, either in aggregate
or in a form that includes identifiable or
personal information of a producer, if the
Secretary obtains adequate assurances that--
(I) the recipient shall ensure
privacy safeguards of identifiable or
personal information of a producer; and
(II) the release of any data to the
public will only occur only if the data
has been transformed into a statistical
or aggregate form.
(e) Regulations.--Not later than July 1, 2026, the Secretary shall
promulgate regulations to carry out this section, including--
(1) the amount of a payment under subsection (c), which
shall be based on--
(A) the quantity of CO<INF>2</INF>-e reduced; and
(B) the considerations described in subsection
(c)(3);
(2) a methodology that any third-party agents approved
under subsection (d)(4)(A)(ii) shall use to provide the
services under that subsection, including--
(A) an accreditation process; and
(B) a conflict of interest policy; and
(3) provisions for the ownership and transportability of
data, including historical data, generated by an eligible
producer for the purpose of determining eligibility for
payments under the program.
SEC. 7. TRANSITION ASSISTANCE FOR IMPACTED COMMUNITIES.
(a) Definitions.--In this section:
(1) Indian tribe.--The term ``Indian Tribe'' has the
meaning given the term in section 4 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 5304).
(2) Individual with a barrier to employment.--The term
``individual with a barrier to employment'' has the meaning
given the term in section 3 of the Workforce Innovation and
Opportunity Act (29 U.S.C. 3102).
(3) Institution of higher education.--The term
``institution of higher education'' has the meaning given the
term in section 101 of the Higher Education Act of 1965 (20
U.S.C. 1001).
(4) Local board.--The term ``local board'' has the meaning
given the term in section 3 of the Workforce Innovation and
Opportunity Act (29 U.S.C. 3102).
(5) Recognized postsecondary credential.--The term
``recognized postsecondary credential'' has the meaning given
the term in section 3 of the Workforce Innovation and
Opportunity Act (29 U.S.C. 3102).
(6) Secretary.--The term ``Secretary'' means the Secretary
of Commerce, acting through the Assistant Secretary of Commerce
for Economic Development.
(7) State.--The term ``State'' means--
(A) a State;
(B) the District of Columbia;
(C) the Commonwealth of Puerto Rico; and
(D) any other territory or possession of the United
States.
(8) State board.--The term ``State board'' has the meaning
given the term in section 3 of the Workforce Innovation and
Opportunity Act (29 U.S.C. 3102).
(9) Supportive services.--The term ``supportive services''
has the meaning given the term in section 3 of the Workforce
Innovation and Opportunity Act (29 U.S.C. 3102).
(b) Grants.--The Secretary, in coordination with the Secretary of
Labor, shall provide grants to eligible entities to assist in the
transition to a low- or zero-greenhouse gas emitting economy.
(c) Eligible Entities.--An entity eligible to receive a grant under
this section is a labor organization, an institution of higher
education, a unit of State or local government, an Indian Tribe, an
economic development organization, a nonprofit organization, community-
based organization, or intermediary, or a State board or local board
that serves or is located in a community that--
(1) as determined by the Secretary, in coordination with
the Secretary of Labor, has been or will be impacted by
economic changes in carbon-intensive industries, including in
an energy community (as defined in section 45(b)(11) of the
Internal Revenue Code of 1986);
(2) as determined by the Secretary, in consultation with
the Administrator of the Federal Emergency Management Agency,
has been or is at risk of being impacted by extreme weather
events, sea level rise, and natural disasters related to
climate change; or
(3) as determined by the Secretary, in consultation with
the Administrator of the Environmental Protection Agency, has
been impacted by harmful residuals from a fossil fuel or
carbon-intensive industry.
(d) Use of Funds.--An eligible entity that receives a grant under
this section shall use the grant for--
(1) economic and workforce development activities, such
as--
(A) job creation;
(B) providing reemployment and worker transition
assistance, including registered apprenticeships,
subsidized employment, job training, transitional jobs,
and supportive services, with priority given to--
(i) workers impacted by changes in carbon-
intensive industries;
(ii) individuals with a barrier to
employment; and
(iii) programs that lead to a recognized
postsecondary credential;
(C) local and regional investment, including
commercial and industrial economic diversification;
(D) export promotion; and
(E) establishment of a monthly subsidy payment for
workers who retire early due to economic changes in
carbon-intensive industries;
(2) climate change resiliency, such as--
(A) building electrical, communications, utility,
transportation, and other infrastructure in flood-prone
areas above flood zone levels;
(B) building flood and stormproofing measures in
flood-prone areas and erosion-prone areas;
(C) increasing the resilience of a surface
transportation infrastructure asset to withstand
extreme weather events and climate change impacts;
(D) improving stormwater infrastructure;
(E) increasing the resilience of agriculture to
extreme weather;
(F) ecological restoration;
(G) increasing the resilience of forests to
wildfires;
(H) increasing coastal resilience; and
(I) implementing heat island cooling strategies;
(3) environmental remediation and restoration projects of
fossil fuel industry facilities that are abandoned or retired,
or closed due to bankruptcy, and residuals from carbon-
intensive industries, such as--
(A) coal ash and petroleum coke cleanup;
(B) mine reclamation;
(C) reclamation and plugging of abandoned oil and
natural gas wells on private and public land; and
(D) remediation of impaired waterways and drinking
water resources; or
(4) other activities as the Secretary, in coordination with
the Secretary of Labor, the Administrator of the Federal
Emergency Management Agency, and the Administrator of the
Environmental Protection Agency, determines to be appropriate.
(e) Requirements.--
(1) Labor standards; nondiscrimination.--An eligible entity
that receives a grant under this section shall use the funds in
a manner consistent with sections 181 and 188 of the Workforce
Innovation and Opportunity Act (29 U.S.C. 3241, 3248).
(2) Wage rate requirements.--
(A) In general.--All laborers and mechanics
employed by eligible entities to carry out projects and
activities funded directly by or assisted in whole or
in part by a grant under this section shall be paid at
wages at rates not less than those prevailing on
projects of a similar character in the locality as
determined by the Secretary of Labor in accordance with
subchapter IV of chapter 31 of title 40, United States
Code (commonly known as the ``Davis-Bacon Act'').
(B) Authority.--With respect to the labor standards
specified in subparagraph (A), the Secretary of Labor
shall have the authority and functions set forth in
Reorganization Plan No. 14 of 1950 (64 Stat. 1267; 5
U.S.C. App.) and section 3145 of title 40, United
States Code.
(3) Buy america requirements.--
(A) In general.--All iron, steel, and manufactured
goods used for projects and activities carried out with
a grant under this section shall be produced in the
United States.
(B) Waiver.--The Secretary may waive the
requirement in subparagraph (A) if the Secretary finds
that--
(i) enforcing the requirement would be
inconsistent with the public interest;
(ii) the iron, steel, and manufactured
goods produced in the United States are not
produced in a sufficient and reasonably
available amount or are not of a satisfactory
quality; or
(iii) enforcing the requirement will
increase the overall cost of the project or
activity by more than 25 percent.
(f) Coordination.--An eligible entity that receives a grant under
this section is encouraged to collaborate or partner with other
eligible entities and impacted communities in planning and carrying out
activities with that grant.
(g) Report.--Not later than 3 years after the date on which the
Secretary establishes the grant program under this section, the
Secretary and the Secretary of Labor shall submit to Congress a report
on the effectiveness of the grant program, including--
(1) the number of individuals that have received
reemployment or worker transition assistance under this
section;
(2) a description of any job creation activities carried
out with a grant under this section and the number of jobs
created from those activities;
(3) the percentage of individuals that have received
reemployment or worker transition assistance under this section
who are, during the second and fourth quarters after exiting
the program--
(A) in education or training activities; or
(B) employed;
(4) the average wages of individuals that have received
reemployment or worker transition assistance under this section
during the second and fourth quarters after exit from the
program;
(5) a description of any regional investment activities
carried out with a grant under this section;
(6) a description of any export promotion activities
carried out with a grant under this section, including--
(A) a description of the products promoted; and
(B) an analysis of any increase in exports as a
result of the promotion;
(7) a description of any resilience activities carried out
with a grant under this section;
(8) a description of any cleanup activities from fossil
fuel industry facilities or carbon-intensive industries carried
out with a grant under this section; and
(9) the distribution of funding among geographic and
socioeconomic groups, including urban and rural communities,
low-income communities, communities of color, and Indian
Tribes.
(h) Funding.--
(1) Initial funding.--There is appropriated to the
Secretary, out of any funds in the Treasury not otherwise
appropriated, $5,000,000,000 for each of fiscal years 2026 and
2027 to carry out this section, to remain available until
expended.
(2) America's clean future fund.--The Secretary shall carry
out this section using amounts made available from the
America's Clean Future Fund under section 9512 of the Internal
Revenue Code of 1986 (as added by section 4).
SEC. 8. STUDY ON CARBON PRICING.
(a) In General.--Not later than January 1, 2029, the Administrator
of the Environmental Protection Agency (referred to in this section as
the ``Administrator'') shall seek to enter into an agreement with the
National Academy of Sciences under which the National Academy of
Sciences shall carry out a study not less frequently than once every 5
years to evaluate the effectiveness of the fees established under
sections 4692 and 4693 of the Internal Revenue Code of 1986 in
achieving the following goals:
(1) A net reduction of greenhouse gas emissions by 45
percent, based on 2018 levels, by 2030.
(2) A net reduction of greenhouse gas emissions by 100
percent, based on 2018 levels, by 2050.
(b) Requirements.--In executing the agreement under subsection (a),
the Administrator shall ensure that, in carrying out a study under that
subsection, the National Academy of Sciences--
(1) includes an evaluation of--
(A) total annual greenhouse gas emissions by the
United States, including greenhouse gas emissions not
subject to the fees described in that subsection;
(B) the historic trends in the total greenhouse gas
emissions evaluated under subparagraph (A); and
(C) the impacts of the fees established under
sections 4692 and 4693 of the Internal Revenue Code of
1986 on changes in the levels of fossil fuel-related
localized air pollutants in environmental justice
communities (as defined in section 2(e)(1));
(2) analyzes the extent to which greenhouse gas emissions
have been or would be reduced as a result of current and
potential future policies, including--
(A) a projection of greenhouse gas emissions
reductions that would result if the regulations of the
Administrator were to be adjusted to impose stricter
limits on greenhouse gas emissions than the goals
described in that subsection, with a particular focus
on greenhouse gas emissions not subject to the fees
described in that subsection;
(B) the status of greenhouse gas emissions
reductions that result from the fees established under
sections 4692 and 4693 of the Internal Revenue Code of
1986;
(C) a projection of greenhouse gas emissions
reductions that would result if the fees established
under those sections were annually increased--
(i) at the current price path; and
(ii) above the current price path;
(D) an analysis of greenhouse gas emissions
reductions that result from the policies of States,
units of local government, Tribal communities, and the
private sector; and
(E) the status and projections of decarbonization
in other major economies; and
(3) submits a report to the Administrator, Congress, and
the Board of Directors of the Climate Change Finance
Corporation describing the results of the study.
SEC. 9. ESTABLISHMENT OF TARGETS FOR CARBON SEQUESTRATION BY LAND AND
WATER.
(a) In General.--The Chair of the Council on Environmental Quality,
in consultation with the Secretaries of Agriculture, Commerce, and the
Interior, the Chief of Engineers, and the Administrator of the
Environmental Protection Agency, shall--
(1) establish a target for carbon sequestration that can
reasonably be achieved through enhancing the ability of public
and private land and water to function as natural carbon sinks;
(2) develop strategies for meeting that target; and
(3) develop strategies to expand protections for ecosystems
that sequester carbon and provide resiliency benefits, such
as--
(A) flood protection;
(B) soil and beach retention;
(C) erosion reduction;
(D) biodiversity;
(E) water purification; and
(F) nutrient cycling.
(b) Report.--As soon as practicable after the date of enactment of
this Act, the Chair of the Council on Environmental Quality shall
submit to Congress a report describing--
(1) the target and strategies described in paragraphs (1)
through (3) of subsection (a); and
(2) any additional statutory authorities or authorized
funding levels needed to successfully implement those
strategies.
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