S. 25

119th CONGRESS 1st Session

To impose an assessment related to fossil fuel emissions, to establish the Polluters Pay Climate Fund, and for other purposes.

IN THE SENATE OF THE UNITED STATES · January 7, 2025 · Sponsor: Mr. Van Hollen · Committee: Committee on Finance

Table of contents

• S. 25
  • Sec. 4691. Imposition of tax.

Sec. 4691. Imposition of tax.

• (a) Imposition
  • Each assessable person shall pay to the Secretary of the Treasury not later than the applicable payment date a tax in an amount determined under subsection (b).
• (b) Determination of amount
  • (1) In general
    • With respect to each assessable person, the tax under this section shall be equal to an amount that bears the same ratio to $1,000,000,000,000 as—
      • the assessable person's applicable share of covered carbon dioxide emissions taken into account under this section, bears to
      • the aggregate applicable shares of covered carbon dioxide emissions of all assessable persons taken into account under this section.
  • (2) Determination of applicable share
    • (A) In general
      • The applicable share of covered carbon dioxide emissions taken into account under this section for any assessable person shall be the excess (if any) of—
        • (i) the covered carbon dioxide emissions attributable to such person (determined in metric tons), as determined by the Secretary based on product-related carbon dioxide emissions of such person, over
        • (ii) 1,000,000,000 metric tons.
    • (B) Adjustment
      • The Secretary may adjust the amount determined under subparagraph (A)(i) with respect to an assessable person who is described in subsection (c)(2)(B)(ii) (or who is a successor in interest to a person described in such subsection) if such person establishes to the satisfaction of the Secretary that a portion of such amount was—
        • (i) attributable to the extraction of crude oil by another assessable person who is described in subsection (c)(2)(B)(i) (or a successor in interest to a person described in such subsection), and
        • (ii) taken into account in determining such amount for such other assessable person.
• (c) Assessable person
  • For purposes of this section—
  • (1) In general
    • The term assessable person means—
      • any person that is described in paragraph (2), or
      • any successor in interest to a person described in paragraph (2).
  • (2) Person described
    • A person is described in this paragraph if such person—
      • is a United States person or is engaged in a trade or business within the United States during the period beginning on the date of the enactment of this Act and ending on December 31, 2025,
      • during any part of the covered period, was engaged in the trade or business of—
        • (i) extracting any fossil fuel, or
        • (ii) refining any crude oil, and
      • is determined by the Secretary to be responsible for more than 1,000,000,000 metric tons of covered carbon dioxide emissions.
  • (3) Controlled groups
    • (A) In general
      • For purposes of this subsection, all persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or (o) of section 414 shall be treated as a single assessable person.
    • (B) Inclusion of foreign corporations
      • For purposes of subparagraph (A), in applying subsections (a) and (b) of section 52 to this section, section 1563 shall be applied without regard to subsection (b)(2)(C) thereof.
  • (4) Joint and several liability
    • If more than one person is liable for payment of the tax under subsection (a) with respect to a single assessable person by reason of the application of paragraph (3), all such persons shall be jointly and severally liable for payment of such tax.
• (d) Other definitions and rules
  • For purposes of this section—
    • The term applicable payment date means September 30, 2026.
    • The term covered carbon dioxide emissions means, with respect to any person, the total quantity of carbon dioxide released into the atmosphere during the covered period by reason such person engaging in the trade or business of extracting fossil fuels or of refining crude oil.
    • The term covered period means the period that—
    • The term fossil fuel means coal, crude oil, and fuel gases.
    • The term coal means anthracite, bituminous, subbituminous, and lignite coal.
    • The term crude oil means oil or petroleum of any kind and in any form, including bitumen, oil sands, heavy oil, conventional and unconventional oil, shale oil, natural gas liquids, condensates, and related fossil fuel liquids.
    • The term fuel gases means natural gas, associated natural gas, conventional and unconventional gas, shale gas, and related methane gas production.
    • In determining the amount of carbon dioxide emissions with respect to any assessable person—
• (e) Election To pay liability in installments
  • (1) In general
    • An assessable person may elect to pay the tax under this section in 9 annual installments of the following amounts:
      • 20 percent of the tax under this section in the case of the first installment.
      • 10 percent of the tax under this section in each of the following 8 installments.
  • (2) Date for payment of installments
    • If an election is made under paragraph (1), the first installment shall be paid on the applicable payment date and each succeeding installment shall be paid on the same date as the applicable payment date for each calendar year following the calendar year with respect to which the preceding installment was made.
  • (3) Acceleration of payment
    • If there is an addition to tax for failure to timely pay any installment required under this subsection, a liquidation or sale of substantially all the assets of the assessable person (including in a title 11 or similar case), a cessation of business by the assessable person, or any similar circumstance, then the unpaid portion of all remaining installments shall be due on the date of such event (or in the case of a title 11 or similar case, the day before the petition is filed). The preceding sentence shall not apply to the sale of substantially all the assets of an assessable person to a buyer if such buyer enters into an agreement with the Secretary under which such buyer is liable for the remaining installments due under this subsection in the same manner as if such buyer were the assessable person.
  • (4) Proration of deficiency to installments
    • If an election is made under paragraph (1) to pay the tax under this section in installments and a deficiency has been assessed with respect to such tax, the deficiency shall be prorated to the installments payable under paragraph (1). The part of the deficiency so prorated to any installment the date for payment of which has not arrived shall be collected at the same time as, and as a part of, such installment. The part of the deficiency so prorated to any installment the date for payment of which has arrived shall be paid upon notice and demand from the Secretary. This subsection shall not apply if the deficiency is due to negligence, to intentional disregard of rules and regulations, or to fraud with intent to evade tax.
  • (5) Election
    • Any election under paragraph (1) shall be made not later than the applicable payment date and shall be made in such manner as the Secretary shall provide.
  • (6) Installments not to prevent credit or refund of overpayments or increase estimated taxes
    • If an election is made under paragraph (1) to pay the tax under this section in installments—
      • no installment of such tax shall—
        • (i) in the case of a request for credit or refund, be taken into account as a liability for purposes of determining whether an overpayment exists for purposes of section 6402 before the date on which such installment is due, or
• (f) Regulations
  • Not later than 18 months after the date of enactment of this section, the Secretary shall promulgate such regulations as are necessary to carry out this section.