[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3338 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 3338
To amend the Internal Revenue Code of 1986 to eliminate certain fuel
excise taxes and impose a tax on greenhouse gas emissions to provide
revenue for maintaining and building American infrastructure, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 13, 2025
Mr. Fitzpatrick (for himself and Mr. Carbajal) introduced the following
bill; which was referred to the Committee on Ways and Means, and in
addition to the Committees on Energy and Commerce, Natural Resources,
Education and Workforce, Transportation and Infrastructure, Science,
Space, and Technology, and Agriculture, 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 eliminate certain fuel
excise taxes and impose a tax on greenhouse gas emissions to provide
revenue for maintaining and building American infrastructure, 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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Modernizing
America with Rebuilding to Kickstart the Economy of the Twenty-first
Century with a Historic Infrastructure-Centered Expansion Act'' or the
``MARKET CHOICE Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
TITLE I--GREENHOUSE GAS EMISSIONS
Sec. 101. Treatment of domestic greenhouse gas emissions.
Sec. 102. Border greenhouse gas adjustments.
TITLE II--DISTRIBUTION OF REVENUES FROM TAXATION OF GREENHOUSE GAS
EMISSIONS
Subtitle A--Rebuilding Infrastructure and Solutions for the Environment
Trust Fund
Sec. 201. Establishment of the RISE Trust Fund.
Sec. 202. Appropriations from the RISE Trust Fund.
Sec. 203. State grants.
Subtitle B--Certain Manufacturers Excise Taxes
Sec. 211. Repeal of Federal motor vehicle and aviation fuel taxes.
Sec. 212. Modifications of qualifying advanced coal project credit.
TITLE III--AMENDMENTS TO OTHER LAWS
Subtitle A--Amendments to Federal Environmental Statutes
Sec. 301. Amendments to the Clean Air Act.
Sec. 302. Frequent and chronic flooding mitigation and adaptation
infrastructure projects.
Sec. 303. No preemption of State law.
Subtitle B--Assistance to Displaced Workers in the Energy Sector
Sec. 321. Assistance to displaced workers in the energy sector.
TITLE IV--NATIONAL CLIMATE COMMISSION
Sec. 401. Establishment of Commission.
Sec. 402. Duties of Commission.
Sec. 403. Powers of Commission.
Sec. 404. Funding for the activities of the Commission.
Sec. 405. Staff of the Commission.
SEC. 2. FINDINGS.
Congress finds that--
(1) roads, bridges, airports, and urban transportation
systems are essential to the economic and national security of
the United States;
(2) there is a chronic shortfall in funding for the
maintenance of highways, bridges, and other critical
infrastructure;
(3) strategic investments in new infrastructure will allow
for economic growth and dynamism in the 21st century;
(4) there has been a marked increase in extreme weather
events and the negative impacts of a changing climate are
expected to worsen in every region of the United States;
(5) if left unaddressed, the consequences of a changing
climate have the potential to adversely impact the health of
all Americans, harm the economy, and impose substantial costs
on local, State, and Federal budgets;
(6) efforts to reduce climate risk should protect our
Nation's economy, security, infrastructure, agriculture, water
supply, public health, and public safety; and
(7) there is bipartisan support for pursuing efforts to
reduce greenhouse gas emissions through economically viable,
broadly supported private and public policies and solutions.
TITLE I--GREENHOUSE GAS EMISSIONS
SEC. 101. TREATMENT OF DOMESTIC GREENHOUSE GAS EMISSIONS.
(a) In General.--The Internal Revenue Code of 1986 is amended by
adding at the end the following new subtitle:
``Subtitle L--Greenhouse Gas Emissions
``PART 1--TAXATION OF GREENHOUSE GAS EMISSIONS
``Sec. 9901. Imposition of tax on combusted fossil fuel greenhouse gas
emissions.
``Sec. 9902. Imposition of tax on greenhouse gas emissions from certain
industrial processes.
``Sec. 9903. Imposition of tax on greenhouse gas emissions from certain
product uses.
``Sec. 9904. Calculation of taxable emissions.
``Sec. 9905. Credit for state payments.
``Sec. 9906. Penalties for nonpayment.
``Sec. 9907. Definitions.
``SEC. 9901. IMPOSITION OF TAX ON COMBUSTED FOSSIL FUEL GREENHOUSE GAS
EMISSIONS.
``(a) In General.--There is hereby imposed a tax on fossil fuels
produced within, or imported into, the United States.
``(b) Rate of Tax.--
``(1) Greenhouse gases that would be released if the fossil
fuel were combusted.--The tax imposed by subsection (a) shall
be the applicable amount per ton of carbon dioxide equivalent
of all greenhouse gasses that would be released if the fossil
fuel were combusted.
``(2) Applicable amount of carbon dioxide equivalent
emissions.--For purposes of paragraph (1), the term `applicable
amount' means--
``(A) for calendar year 2027, $40 per metric ton of
carbon dioxide equivalent emissions, and
``(B) for each calendar year after 2027, the tax
rate shall be the sum of--
``(i) the previous calendar year's tax
rate, plus
``(ii) the sum of--
``(I) 5 percentage points, plus
``(II) a percentage increase in the
previous year's tax rate equal to the
increase in the Consumer Price Index
for the previous calendar year.
``(3) Consumer price index for any calendar year.--For
purposes of subparagraph (B), the Consumer Price Index for the
previous calendar year is the average of the Consumer Price
Index for all-urban consumers published by the Department of
Labor as of the close of the 12-month period ending on August
31 of such calendar year. For purposes of the preceding
sentence, the revision of the Consumer Price Index which is
most consistent with the Consumer Price Index for calendar year
1986 shall be used.
``(4) Rate adjustment based on emission levels.--
``(A) Report.--Not later than March 30, 2028, and
annually thereafter, the Secretary and the
Administrator shall jointly report the emissions during
the calendar year ending on the preceding December 31
from sources subject to taxation under this part. The
report shall determine whether the cumulative amount of
annual emissions reported for the period beginning in
calendar year 2027 and through the end of the preceding
calendar year were less than the emissions levels
specified in the following schedule:
``(i) The total emissions through calendar
year 2027 are 4,700 million metric tons of
carbon dioxide equivalent.
``(ii) The total emissions through calendar
year 2028 are 9,400 million metric tons of
carbon dioxide equivalent.
``(iii) The total emissions through
calendar year 2029 are 14,000 million metric
tons of carbon dioxide equivalent.
``(iv) The total emissions through calendar
year 2030 are 18,300 million metric tons of
carbon dioxide equivalent.
``(v) The total emissions through calendar
year 2031 are 22,600 million metric tons of
carbon dioxide equivalent.
``(vi) The total emissions through calendar
year 2032 are 26,800 million metric tons of
carbon dioxide equivalent.
``(vii) The total emissions through
calendar year 2033 are 31,000 million metric
tons of carbon dioxide equivalent.
``(viii) The total emissions through
calendar year 2034 are 35,100 million metric
tons of carbon dioxide equivalent.
``(ix) The total emissions through calendar
year 2035 are 39,100 million metric tons of
carbon dioxide equivalent.
``(x) The total emissions through calendar
year 2036 are 43,100 million metric tons of
carbon dioxide equivalent.
``(xi) The total emissions through calendar
year 2037 are 47,100 million metric tons of
carbon dioxide equivalent.
``(B) Adjustments for report period.--
``(i) In general.--Not later than March 30,
2029, and every two years thereafter, the
Secretary shall determine whether an adjustment
is required in accordance with clause (ii).
``(ii) Period through 2038.--If the
emission level reported under subparagraph (A)
for calendar year 2028, and every second
calendar year thereafter through calendar year
2038, exceeds the level for such calendar year
specified in clauses (i) through (xi) of
subparagraph (A), then the applicable amount
under paragraph (2) for the calendar year
beginning on the next January 1 following the
determination in clause (i) shall, after the
increase under paragraph (2) for such next
calendar year, be increased by an additional $4
per metric ton.
``(c) By Whom Paid.--The tax imposed by subsection (a) shall be
paid by the owner of the fossil fuel at the point of taxation.
``(d) Point of Taxation.--
``(1) For fossil fuels produced within the United States,
the point of taxation shall be--
``(A) for coal, the mine mouth or, for washed coal,
the exit from the coal preparation and processing
plant,
``(B) for petroleum products, the exit point from
the refinery, and
``(C) for natural gas, the exit from the gas
processing plant or, for natural gas that is not
treated at a gas processing plant, the point of sale to
the person who combusts the gas or incorporates it into
a product that is not intended for combustion.
``(2) For any fossil fuel imported into the United States,
the point of taxation shall be the point at which it first
enters the United States.
``(e) Exemptions.--
``(1) Exemption for noncombustive uses.--
``(A) Refund for reduction or elimination of
emissions.--Any manufacturer of a product that
incorporates a fossil fuel that has been taxed under
this section who can demonstrate to the Secretary that
the fossil fuel has been transformed via the
manufacture of the product so that the fossil fuel's
emissions will be reduced or eliminated over the
product's lifetime shall be entitled to a refund of the
tax paid under this section on the proportion of the
emissions reduced thereby, as determined by the
Secretary.
``(B) Rule.--The Secretary, in consultation with
the Administrator, shall establish by rule the criteria
and process by which product manufacturers can
demonstrate that the conditions in subparagraph (A)
have been satisfied.
``(C) Publication of regulations.--The Secretary
shall publish the regulations required by this
subsection no later than one year prior to the start of
the calendar year referred to in section 9901(b)(2)(A).
The Secretary may not collect the tax imposed by this
section for any calendar year that begins less than one
year after the regulations are published.
``(2) Exemption for carbon capture and storage.--
``(A) Refund for sequesters.--Any person who
sequesters greenhouse gas emissions resulting from the
combustion of fossil fuel that has passed through a
point of taxation shall be entitled to a refund of the
tax imposed by this section. Emissions that are used
for enhanced oil recovery shall be entitled for such
refund provided that these emissions meet all of the
criteria applicable to other emissions that qualify for
such refund.
``(B) Rule.--The Secretary shall establish by rule
the procedures by which to apply for such refunds and
such refunds shall be paid within six months of the
Secretary receiving an approvable application.
``(C) Time of refund.--The Secretary may not refund
any amounts under this paragraph until such time as the
Secretary has published the regulations described in
section 45Q(f)(2).
``SEC. 9902. IMPOSITION OF TAX ON GREENHOUSE GAS EMISSIONS FROM CERTAIN
INDUSTRIAL PROCESSES.
``(a) In General.--There is hereby imposed a tax on industrial
process greenhouse gas emissions by certain source categories.
``(b) List of Source Categories.--
``(1) Initial list.--The Congress establishes for purposes
of this section a list of source categories subject to this
section as follows:
``(A) Iron and steel production and metallurgical
coke production.
``(B) Underground coal mining.
``(C) Coal preparation and processing plants.
``(D) Refineries.
``(E) Cement production.
``(F) Petrochemical production.
``(G) Lime production.
``(H) Ammonia production.
``(I) Aluminum production.
``(J) Soda ash production.
``(K) Ferroalloy production.
``(L) Phosphoric acid production.
``(M) Glass production.
``(N) Zinc production.
``(O) Lead production.
``(P) Magnesium production and processing.
``(Q) Nitric acid production.
``(R) Adipic acid production.
``(S) Semiconductor manufacture.
``(T) Electrical transmission and distribution.
``(2) Revision of the list.--The Administrator shall review
the list of source categories established by this subsection
not less than once every five years to determine if they should
continue to be listed and publish the results of that review.
The Administrator may, if appropriate, add any source
categories to this list by rule.
``(3) Removal of a source category from the list.--The
Administrator may remove a source category from this list only
if--
``(A) the total emissions from the entire source
category which are taxable under this section have been
less than 250,000 metric tons of carbon dioxide
equivalent per year for each of three consecutive
years,
``(B) the average emissions from facilities in the
source category which are taxable under this section
have been less than 25,000 metric tons of carbon
dioxide equivalent per year for each of the years
referred in subparagraph (A), and
``(C) the Administrator determines that there is no
reasonable possibility that the total emissions from
the entire source category which are taxable under this
section will exceed 250,000 metric tons per year of
carbon dioxide equivalent within any of the five years
following such determination.
``(4) Addition of a source category to the list.--The
Administrator may add a source category to this list only if
the Administrator determines that--
``(A) the total emissions from the entire source
category which are taxable under this section have been
greater than 250,000 metric tons per year of carbon
dioxide equivalent in any two years out of the
preceding five years,
``(B) the average emissions from facilities in the
source category which are taxable under this section
have been greater than 25,000 metric tons per year of
carbon dioxide equivalent in the years in which
emissions from the entire source category have been
greater than 250,000 tons per year, and
``(C) there is a reasonable possibility that the
total emissions from the entire source category which
are taxable under this section will be greater than
250,000 metric tons per year of carbon dioxide
equivalent in any year within the next five years
following such determination.
``(c) Rate