Text: H.R.3966 — 116th Congress (2019-2020)All Information (Except Text)

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Introduced in House (07/25/2019)


116th CONGRESS
1st Session
H. R. 3966


To amend the Internal Revenue Code of 1986 to reduce social security payroll taxes and to reduce the reliance of the United States economy on carbon-based energy sources, and for other purposes.


IN THE HOUSE OF REPRESENTATIVES

July 25, 2019

Mr. Lipinski (for himself and Mr. Rooney of Florida) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, Education and Labor, and Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned


A BILL

To amend the Internal Revenue Code of 1986 to reduce social security payroll taxes and to reduce the reliance of the United States economy on carbon-based energy sources, 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 “Raise Wages, Cut Carbon Act of 2019”.

SEC. 2. Increase in the low-income housing energy assistance program and the weatherization assistance program.

(a) LIHEAP.—On October 1, 2020, and each October 1 thereafter, there shall be made available, without further appropriation or fiscal year limitation, to carry out the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621 et seq.) an amount equal to 5 percent of the net revenues received in the Treasury during the previous fiscal year from the taxes imposed under parts II, III, and IV of subchapter E of chapter 38 of the Internal Revenue Code of 1986.

(b) Weatherization assistance program.—On October 1, 2020, and each October 1 thereafter, there shall be made available, without further appropriation or fiscal year limitation, to carry out the weatherization assistance program established under part A of title IV of the Energy Conservation and Production Act (42 U.S.C. 6861 et seq.) an amount equal to 1 percent of the net revenues received in the Treasury during the previous fiscal year from the taxes imposed under parts II, III, and IV of subchapter E of chapter 38 of the Internal Revenue Code of 1986.

(c) Addition to other amounts.—Amounts made available pursuant to this section shall be in addition to other amounts made available to carry out the Low-Income Home Energy Assistance Act of 1981 and the weatherization assistance program established under part A of title IV of the Energy Conservation and Production Act for the fiscal year involved.

SEC. 3. Distribution of certain estimated revenues to social security beneficiaries.

Not later than October 1 of each fiscal year beginning with fiscal year 2020, the Commissioner of Social Security shall pay an amount out of the general fund of the Treasury, equal to 10 percent of the net revenues received in the Treasury during the previous fiscal year from the taxes imposed under parts II, III, and IV of subchapter E of chapter 38 of the Internal Revenue Code of 1986, to be distributed equally among each individual entitled to monthly insurance benefits under title II of the Social Security Act (42 U.S.C. 401 et seq.) or to an annuity under section 2 of the Railroad Retirement Act of 1974 for the 1st month in such fiscal year.

SEC. 4. Reduction of certain social security taxes; tax on combustible fossil fuels.

(a) In general.—Chapter 38 of the Internal Revenue Code of 1986 (relating to environmental taxes) is amended by adding at the end thereof the following new subchapter:

“PART V—SUPERMAJORITY REQUIRED TO CHANGE REVENUE NEUTRALITY


“Sec. 4691. Social Security taxes and benefits.

“SEC. 4691. Social Security taxes and benefits.

“(a) Amounts appropriated to social security trust funds.—

“(1) IN GENERAL.—There are hereby appropriated to the social security trust funds an amount equal to the excess (if any) of—

“(A) net revenues received in the Treasury from the taxes imposed by parts II, III, and IV, over

“(B) the net expenditures from the Treasury under sections 2 and 3 of the Raise Wages, Cut Carbon Act of 2019.

“(2) ALLOCATION AMONG FUNDS.—Amounts appropriated under paragraph (1) shall be allocated among such funds as determined appropriate by the Managing Trustee of the Board of Trustees of the Trust Funds (within the meaning of title II of the Social Security Act), in cooperation with the Railroad Retirement Board.

“(b) Reduction in certain social security taxes.—

“(1) IN GENERAL.—The rate of each specified social security tax for each calendar year (determined without regard to this section) shall be reduced by the number of percentage points equal to—

“(A) such rate, multiplied by

“(B) the reduction percentage determined by the Secretary for such calendar year.

“(2) REDUCTION PERCENTAGE.—The reduction percentage determined by the Secretary under paragraph (1) for any calendar year shall be the percentage which the Secretary estimates will result in aggregate appropriations into each trust fund equal to the amount which would (without regard to this section) be appropriated to each trust fund for such calendar year.

“(c) Definitions.—For purposes of this subchapter—

“(1) SPECIFIED SOCIAL SECURITY TAX.—The term ‘specified social security tax’ means—

“(A) the tax imposed by section 3101(a) (and so much of the tax imposed by section 3201(a) or section 3211(a) as is determined by reference to the tax imposed by section 3101(a)), and

“(B) 12 the tax imposed by section 1401(a).

“(2) SOCIAL SECURITY TRUST FUND.—The term ‘social security trust fund’ means—

“(A) the Federal Old-Age and Survivors Insurance Trust Fund established by section 201(a) of the Social Security Act,

“(B) the Federal Disability Insurance Trust Fund established by section 201(b) of the Social Security Act, and

“(C) the Social Security Equivalent Benefit Account established under section 15A of the Railroad Retirement Act of 1974.

“(d) Determination based on estimates.—Determinations under this section and sections 2 and 3 of the Raise Wages, Cut Carbon Act of 2019 shall be made on the basis of estimates by the Secretary. To the extent that any such determination for any period is determined to have been inaccurate, such determination for the subsequent period shall be appropriately increased or decreased by the amount that the previous determination was less than, or in excess of, the more accurate determination.

“(e) Publication of rate reductions.—Any adjustment under this section of social security tax rates for any calendar year shall be published in the Federal Register not later than 2 months before the beginning of such calendar year.


“Sec. 4692. Imposition of tax.

“Sec. 4693. Refunds or credits.

“Sec. 4694. Other definitions and special rules.

“SEC. 4692. Imposition of tax.

“(a) In general.—There is hereby imposed a tax on any taxable carbon substance sold by the manufacturer, producer, or importer thereof.

“(b) Amount of tax.—

“(1) IN GENERAL.—The amount of tax imposed by subsection (a) on any taxable carbon substance shall be the applicable amount per ton of the carbon dioxide emissions potential of such substance, as determined by the Secretary in consultation with the Secretary of Energy.

“(2) FRACTIONAL PART OF TON.—In the case of a fraction of a ton, the tax imposed by subsection (a) shall be the same fraction of the amount of such tax imposed on a whole ton.

“(3) APPLICABLE AMOUNT.—

“(A) IN GENERAL.—For purposes of this part, the applicable amount is—

“(i) for calendar year 2020, $40,

“(ii) for any calendar year following a year which is not a national emissions target attainment year, the sum of—

“(I) the product of the amount in effect under this subparagraph for the preceding calendar year and 102.5 percent, and

“(II) the inflation adjustment amount determined under subparagraph (B), and

“(iii) for any calendar year following a year which is a national emissions target attainment year, the sum of—

“(I) the amount in effect under this subparagraph for the preceding calendar year, and

“(II) the inflation adjustment amount determined under subparagraph (B).

“(B) INFLATION ADJUSTMENT AMOUNT.—

“(i) IN GENERAL.—The inflation adjustment amount for any calendar year shall be an amount (not less than zero) equal to the product of—

“(I) the amount determined under subparagraph (A)(ii)(I) or (A)(iii)(I), as applicable, for such year, and

“(II) the percentage by which the CPI for the preceding calendar year exceeds the CPI for the second preceding calendar year.

“(ii) CPI.—Rules similar to the rules of paragraphs (4) and (5) of section 1(f) shall apply for purposes of this paragraph.

“(C) ROUNDING.—The applicable amount under this subsection shall be rounded up to the next whole dollar amount.

“(D) NATIONAL EMISSIONS TARGET ATTAINMENT YEAR.—For purposes of subparagraph (A), a calendar year is a national emissions target attainment year if the level of greenhouse gas emissions in the United States for the calendar year does not exceed 20 percent of the level of greenhouse gas emissions in the United States for calendar year 2005 as determined by the Secretary in consultation with the Administrator of the Environmental Protection Agency.

“(c) Taxable carbon substance.—For purposes of this subchapter, the term ‘taxable carbon substance’ means—

“(1) coal (including lignite and peat),

“(2) petroleum and any petroleum product (as defined in section 4612(a)(3)), and

“(3) natural gas,

which is extracted, manufactured, or produced in the United States or entered into the United States for consumption, use, or warehousing.

“(d) Substance taxed only once.—No tax shall be imposed by subsection (a) with respect to a taxable carbon substance if the person who would be liable for such tax establishes that a prior tax imposed by such section has been imposed with respect to such substance.

“SEC. 4693. Refunds or credits.

“(a) Sequestered carbon.—Under regulations prescribed by the Secretary, if a person uses a taxable carbon substance so that the carbon associated with such substance will not be emitted, then an amount equal to the amount of tax in effect under section 4692(b) with respect to such substance for the calendar year in which such use begins shall be allowed as a credit or refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by section 4692.

“(b) Previously taxed carbon substances used To make another taxable carbon substance.—Under regulations prescribed by the Secretary, if—

“(1) a tax under section 4692 was paid with respect to any taxable carbon substance, and

“(2) such substance was used by any person in the manufacture or production of any other substance which is a taxable carbon substance,

then an amount equal to the tax so paid shall be allowed as a credit or refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by section 4692. In any case to which this subsection applies, the amount of any such credit or refund shall not exceed the amount of tax imposed by section 4692 on the other taxable fuel manufactured or produced (or which would have been imposed by such subsection on such other fuel but for section 4692(d)).

“(c) Exemption for exports.—

“(1) TAX-FREE SALES.—

“(A) IN GENERAL.—No tax shall be imposed under subsection (a) on the sale by the manufacturer or producer of any taxable carbon substance for export or for resale by the purchaser to a second purchaser for export.

“(B) PROOF OF EXPORT REQUIRED.—Rules similar to the rules of section 4221(b) shall apply for purposes of subparagraph (A).

“(2) CREDIT OR REFUND.—If—

“(A) any person exports—

“(i) a taxable carbon substance, or

“(ii) any other product any portion of the cost of which is attributable to the use of any taxable carbon substance as an energy source for the manufacture or production of such product, and

“(B) such person establishes to the satisfaction of the Secretary the portion of such cost which is attributable to the tax under section 4692,

credit or refund (without interest) of such tax shall be allowed or made to such person.

“(3) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection.

“SEC. 4694. Other definitions and special rules.

“(a) Definitions.—For purposes of this subchapter—

“(1) UNITED STATES.—The term ‘United States’ has the meaning given such term by section 4612(a)(4).

“(2) IMPORTER.—The term ‘importer’ means the person entering the article for consumption, use, or warehousing.

“(3) TON.—The term ‘ton’ means 2,000 pounds. In the case of any taxable carbon substance which is a gas, the term ‘ton’ means the amount of such gas in cubic feet which is the equivalent of 2,000 pounds on a molecular weight basis.

“(b) Use treated as sale.—If any person manufactures, produces, or imports any taxable carbon substance and uses such substance, then such person shall be liable for tax under section 4692 in the same manner as if such substance were sold by such person.

“(c) Special rules for inventory exchanges.—

“(1) IN GENERAL.—Except as provided in paragraph (2), in any case in which a manufacturer, producer, or importer of a taxable carbon substance exchanges such substance as part of an inventory exchange with another person—

“(A) such exchange shall not be treated as a sale, and

“(B) such other person shall, for purposes of section 4692, be treated as the manufacturer, producer, or importer of such substance.

“(2) REGISTRATION REQUIREMENT.—Paragraph (1) shall not apply to any inventory exchange unless—

“(A) both parties are registered with the Secretary as manufacturers, producers, or importers of taxable carbon substances, and

“(B) the person receiving the taxable carbon substance has, at such time as the Secretary may prescribe, notified the manufacturer, producer, or importer of such person’s registration number and the internal revenue district in which such person is registered.

“(3) INVENTORY EXCHANGE.—For purposes of this subsection, the term ‘inventory exchange’ means any exchange in which 2 persons exchange property which is, in the hands of each person, property described in section 1221(a)(1).


“Sec. 4695. Imposition of tax.

“Sec. 4696. Imported taxable product.

“SEC. 4695. Imposition of tax.

“(a) In general.—There is hereby imposed a tax on any imported taxable product sold or used by the importer thereof.

“(b) Amount of tax.—The amount of the tax imposed by subsection (a) with respect to any imported taxable product shall be the applicable amount under section 4692 per ton on the lesser of—

“(1) the taxable carbon substances used in the manufacture or production of such product, or

“(2) the carbon dioxide emissions attributable to the manufacture or production of such product.

“(c) Procedure To challenge information provided by importer.—The Secretary shall establish a procedure under which interested persons may examine the information provided by an importer for purposes of this section, and bring to the attention of the Secretary any suspected errors in such information.

“SEC. 4696. Imported taxable product.

“(a) In general.—For purposes of this part, the term ‘imported taxable product’ means any article which, at the time of such article’s sale or use by the importer, is described in the same heading of the Harmonized Tariff Schedule of the United States as a like article produced in a listed industry.

“(b) Listed industry.—For purposes of this section—

“(1) IN GENERAL.—Except as provided in paragraph (2), the term ‘listed industry’ means any industry listed by the Administrator as being among the industries which, in the aggregate, account for 95 percent of the taxable carbon substances used in the United States. An industry may not be omitted from the list under the preceding sentence if it uses more taxable carbon substances per unit of output than any industry which is so listed.

“(2) SPECIAL RULE FOR 2020 THROUGH 2022.—

“(A) 2020.—During 2020, the term ‘listed industry’ shall include only the 6 industries on the list under paragraph (1) having the highest average use of taxable carbon substances per unit of output.

“(B) 2021 AND 2022.—During 2021 and 2022, the term ‘listed industry’ shall include only—

“(i) the industries described in subparagraph (A), and

“(ii) (I) in the case of 2021, the 13 of the remaining industries on such list having the highest average use of taxable carbon substances per unit of output, or

“(II) in the case of 2022, the 23 of the remaining industries on such list having the highest average use of taxable carbon substances per unit of output.

“(c) Other definitions.—For purposes of this part, the terms ‘importer’, ‘taxable carbon substance’, and ‘United States’ have the respective meanings given such terms by part II.

“SEC. 4697. Imposition of tax.

“(a) Fluorinated gas fee.—There is hereby imposed a tax on any fluorinated greenhouse gas which is required to be reported under part 98 of title 40, Code of Federal Regulations.

“(b) Amount.—The tax imposed under subsection (a) shall be paid by the person required to so report in an amount equal to—

“(1) the total amount, in metric tons of CO2-e, of emitted fluorinated greenhouse gases (or, in the case of a supplier, emissions that would result determined under the rules of such part), multiplied by

“(2) an amount equal to 10 percent of the applicable amount in effect under section 4692 for the calendar year of such emission.

“PART VSupermajority required to change revenue neutrality

“SEC. 4698. Supermajority required.

“A bill, joint resolution, amendment to a bill or joint resolution, or conference report that increases aggregate revenues under parts II, III, and IV greater than the aggregate of—

“(1) the reduction in revenues under part I, and

“(2) the aggregate expenditures under sections 2 and 3 of the Raise Wages, Cut Carbon Act of 2019,

may not be considered as passed or agreed to by the House of Representatives or the Senate unless so determined by a vote of not less than two-thirds of the Members of the House of Representatives or the Senate (as the case may be) voting, a quorum being present.”.

(b) Clerical amendment.—The table of subchapters for chapter 38 of such Code is amended by adding at the end the following new item:

“SUBCHAPTER F. REDUCTION OF SOCIAL SECURITY TAXES; TAX ON COMBUSTIBLE FOSSIL FUELS”.

(c) Effective date.—The amendments made by this section shall take effect on January 1, 2020.

SEC. 5. Amendments to the Clean Air Act.

(a) In general.—Title III of the Clean Air Act (42 U.S.C. 7601) is amended by adding at the end the following:

“SEC. 330. Suspension of regulation of fuels and emissions based on greenhouse gas effects.

“(a) Fuels.—Unless specifically authorized in section 202, 211, 213, or 231 or this section, if a tax is imposed by part II or III of subchapter E of chapter 38 of the Internal Revenue Code of 1986 with respect to a covered fuel, the Administrator shall not enforce any rule limiting the emission of greenhouse gases from the combustion of that fuel under this Act (or impose any requirement on any State to limit such emission) on the basis of the emission’s greenhouse gas effects.

“(b) Emissions.—Unless specifically authorized in section 202, 211, 213, or 231 or this section, if a tax is imposed by part IV of subchapter E of chapter 38 of the Internal Revenue Code of 1986 with respect to a fluorinated greenhouse gas, the Administrator shall not enforce any rule limiting such gas under this Act (or impose any requirement on any State to limit such gas) on the basis of the greenhouse gas effects of such gas.

“(c) Authorized regulation.—Notwithstanding subsections (a) and (b), nothing in this section limits the Administrator’s authority pursuant to any other provision of this Act—

“(1) to limit the emission of any greenhouse gas because of any adverse impact on health or welfare other than its greenhouse gas effects;

“(2) in limiting emissions as described in paragraph (1), to consider the collateral benefits of limiting the emissions because of greenhouse gas effects;

“(3) to limit the emission of black carbon or any other pollutant that is not a greenhouse gas that the Administrator determines by rule has heat-trapping properties; or

“(4) to take any action with respect to any greenhouse gas other than limiting its emission, including—

“(A) monitoring, reporting, and record-keeping requirements;

“(B) conducting or supporting investigations; and

“(C) information collection.

“(d) Exception for certain greenhouse gas emissions.—Notwithstanding subsections (a) and (b), nothing in this section limits the Administrator’s authority to regulate greenhouse gas emissions from—

“(1) sources that—

“(A) are subject to subpart OOOO or OOOOa of part 60 of title 40, Code of Federal Regulations, as in effect or January 1, 2018; or

“(B) would be subject to such subpart OOOO or subpart OOOOa if such subpart applied regardless of the date on which construction, modification, or reconstruction of the source involved commenced; or

“(2) POTW Treatment Plants (as defined in section 403.3(r) of title 40, Code of Federal Regulations).

“(e) Suspension expiration.—

“(1) DETERMINATION.—The Administrator shall make a determination by March 30, 2030, and no less than once every five years thereafter, as to whether cumulative greenhouse gas emissions from covered fuels subject to tax under part II or III of subchapter E of chapter 38 of the Internal Revenue Code of 1986 during the period from calendar year 2022 through the calendar year preceding the determination exceed the cumulative emissions for that period that would have occurred if subsection (a) had not applied during such period.

“(2) CONSEQUENCE OF CUMULATIVE EMISSIONS EXCEEDANCE.—If the Administrator determines under paragraph (1) that cumulative greenhouse gas emissions from covered fuels subject to tax under part II or III of subchapter E of chapter 38 of the Internal Revenue Code of 1986 exceed the cumulative emissions for the period covered by the determination that would have occurred if subsection (a) had not applied during such period, then subsections (a) and (b) of this section, and the prohibition in section 211(c)(5) of this Act, shall cease to apply as of such determination.

“(f) Assuring environmental integrity.—

“(1) AUTHORITY.—If the Administrator makes the determination described in subsection (e)(2), the Administrator shall—

“(A) issue such regulations as the Administrator deems necessary to bring greenhouse gas emissions from covered fuels subject to tax under part II or III of subchapter E of chapter 38 of the Internal Revenue Code of 1986 to levels that are at or below the level at which such emissions would have been if subsection (a) had never applied, and

“(B) require in such regulations that additional reductions in greenhouse gas emissions are achieved to fully compensate for any amount by which greenhouse gas emissions from such fuels during the period referred to in subsection (e)(2) exceeded the levels at which such emissions would have been if subsection (a) had never applied.

“(2) DEADLINE FOR FINALIZING REGULATIONS.—The Administrator shall finalize any regulations required by paragraph (1) not later than two years after the Administrator makes the relevant determination pursuant to such paragraph.

“(3) ACHIEVEMENT OF ADDITIONAL REDUCTIONS.—Regulations issued pursuant to paragraph (1) shall ensure that any additional reductions required by paragraph (1)(B) are fully achieved by no later than eight years after the Administrator makes the determination described in subsection (e)(1).

“(g) Definitions.—In this section—

“(1) GREENHOUSE GAS.—The term ‘greenhouse gas’ means carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hy­dro­fluo­ro­car­bons (HFCs), perfluorocarbon (PFCs), and other gases as defined by rule of the Administrator.

“(2) GREENHOUSE GAS EFFECT.—The term ‘greenhouse gas effect’ means the adverse effects of greenhouse gases on health or welfare caused by the greenhouse gas’s heat-trapping potential or its effect on ocean acidification.”.

(b) New motor vehicles and new motor vehicle engines.—Section 202(b) of the Clean Air Act (42 U.S.C. 7521(b)) is amended—

(1) by redesignating the second paragraph (3) (as redesignated by section 230(4)(C) of Public Law 101–549 (104 Stat. 2529)) as paragraph (4); and

(2) by adding at the end the following:

“(5) Notwithstanding subsections (a) and (b) of section 330, the Administrator may—

“(A) limit the emission of any greenhouse gas (as defined in section 330(g)) on the basis of the emission’s greenhouse gas effects (as defined in such section) from any class or classes of new motor vehicles or new motor vehicle engines subject to regulation under subsection (a)(1); and

“(B) grant a waiver under section 209(b)(1) for standards for the control of greenhouse gas emissions.”.

(c) Fuels.—Section 211(c) of the Clean Air Act (42 U.S.C. 7545(c)) is amended by adding at the end the following new paragraph:

“(5) The Administrator shall not, pursuant to this subsection, impose on any manufacturer or processor of fuel any requirement for the purpose of reducing the emission of any greenhouse gas (as defined in section 330(g)) produced by combustion of the fuel on the basis of the emission’s greenhouse gas effects (as defined in such section).”.

(d) Nonroad engines and vehicles emissions standards.—Section 213 of the Clean Air Act (42 U.S.C. 7547) is amended by adding at the end the following:

“(e) Greenhouse gas emissions.—Notwithstanding section 330(a), the Administrator may limit the emission of any greenhouse gas (as defined in section 330(g)) on the basis of the emission’s greenhouse gas effects (as defined in such section) from any nonroad engines and nonroad vehicles subject to regulation under this section.”.

(e) Aircraft emission standards.—Section 231 of the Clean Air Act (42 U.S.C. 7571) is amended by adding at the end the following new subsection:

“(d) Notwithstanding subsections (a) and (b) of section 330, the Administrator may limit the emission of any greenhouse gas (as defined in section 330(g)) on the basis of the emission’s greenhouse gas effects (as defined in such section) from any class or classes of aircraft engines, so long as any such limitation is not more stringent than the standards adopted by the International Civil Aviation Organization.”.