Section 1 Short title
This Act may be cited as the “Gas Tax Replacement Act of 2015”.
Gas Tax Replacement Act of 2015
A BILL
To amend the Internal Revenue Code of 1986 to provide for repealing the gas tax and establishing a carbon tax on highway fuels, and for other purposes.
Sec. 2 Repeal of excise tax on gasoline and diesel fuel
in clause (i) by striking “18.3 cents per gallon” and inserting “0 cents per gallon”, and
in clause (ii) by striking “24.3 cents per gallon” and inserting “0 cents per gallon”.
Retail tax— Section 4041(a) of the Internal Revenue Code of 1986 is amended by striking paragraph (1).
Conforming amendments—
Section 4081 of the Internal Revenue Code of 1986 is amended—
in subsection (a)(2) by striking subparagraph (D),
by striking subsection (c), and
in subsection (d) by striking paragraph (1).
Section 4041 of the Internal Revenue Code of 1986 is amended—
by amending the heading of subsection (a) to read as follows: “Special motor fuels”, and
in subsection (a)(2)(B)(i) by striking “the rate of tax specified in section 4081(a)(2)(A)(i) which is in effect at the time of such sale or use,” and inserting “18.3 cents per gallon”.
Effective date— The amendments made by this section shall apply to fuel sold or used after December 31, 2016.
Sec. 3 Carbon Tax on Highway Fuels
In general— Paragraph (1) of section 4611(c) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting “, and”, and by inserting after subparagraph (B) the following new subparagraph:
“(C) the carbon dioxide equivalent rate.”
Rates—
In general— Paragraph (2) of section 4611(c) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting “, and”, and by inserting after subparagraph (B) the following new subparagraph:
“(C) the carbon dioxide equivalent rate is—
“(i) $50 per metric ton (or portion thereof) of total life-cycle emissions of carbon dioxide, and
“(ii) an equivalent amount per metric ton (or portion thereof) of total life-cycle emissions of any other greenhouse gas determined on a ratio of the amount such other greenhouse gas per metric ton as the amount of carbon dioxide per metric ton,”
Adjustment for inflation— Section 4611(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(3) Carbon dioxide equivalent rate inflation adjustment
“(A) In general—In the case of any calendar year after 2015, the dollar amount in paragraph (2)(C) shall be increased by an amount equal to—
“(i) such dollar amount, multiplied by
“(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting “calendar year 2014” for “calendar year 1992” in subparagraph (B) thereof.
“(B) Rounding—If any amount as increased under subparagraph (A) is not a multiple of $1, such amount shall be rounded to the nearest multiple of $1.”
Alternative fuels producer excise tax—
In general— Subchapter A of chapter 38 of the Internal Revenue Code of 1986 is amended by inserting after section 4611 the following:
“4611A. Certain alternative fuels
“(a) General Rule—There is hereby imposed a tax at the rate specified in subsection (b) on—
“(1) methanol, ethanol, and biodiesel produced in the United States by the producer thereof, and
“(2) methanol, ethanol, and biodiesel, and any blended product thereof, entered into the United States for consumption, use, or warehousing.
“(b) Rate of tax—The rate of the tax imposed by this section is—
“(1) $50 per metric ton (or portion thereof) of total life-cycle emissions of carbon dioxide, and
“(2) an equivalent amount per metric ton (or portion thereof) of total life-cycle emissions of any other greenhouse gas determined on a ratio of the amount such other greenhouse gas per metric ton as the amount of carbon dioxide per metric ton,
“(c) Persons liable for tax
“(1) United States production—The tax imposed by subsection (a)(1) shall be paid by the producer of the product on which such tax is imposed.
“(2) Imported products—The tax imposed by subsection (a)(2) shall be paid by the person entering the product for consumption, use, or warehousing.”
Clerical amendment— The table of sections for subchapter A of chapter 38 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 4611 the following new item:
Credits and payments for nontaxable uses—
Gasoline used on farms— Section 6420 of the Internal Revenue Code of 1986 is amended by inserting after subsection (g) the following:
“(h) Special rule for carbon dioxide equivalent rate of tax—For purposes of this section, a gallon of gasoline refined from a barrel of crude oil or petroleum product on which tax was imposed under section 4611 at the carbon dioxide equivalent rate under subsection (c)(1)(C) thereof and used for a purpose described in subsection (a)—
“(1) shall be treated as a gallon of gasoline to which this section applies, and
“(2) the rate at which tax was imposed under section 4611 with respect to such gallon shall be the same fraction of so much of the tax imposed under section 4611 as is attributable to subsection (c)(1)(C) thereof on such barrel as the fraction of such gallon of gas is of the whole barrel.”
Gasoline used for certain nonhighway purposes, etc— Section 6421 of the Internal Revenue Code of 1986 is amended by redesignating subsection (j) as subsection (k) and by inserting after subsection (i) the following:
“(j) Special rule for carbon dioxide equivalent rate of tax—For purposes of this section, in the case of a gallon of gasoline refined from a barrel of crude oil or petroleum product on which tax was imposed under section 4611 at the carbon dioxide equivalent rate under subsection (c)(1)(C) thereof—
“(1) if such gallon is used for a purpose described in subsection (a) or (b) or is sold for a purpose described in subsection (c), such gallon shall be treated as a gallon of gasoline to which this section applies, and
“(2) the rate at which tax was imposed under section 4611 with respect to such gallon shall be the same fraction of so much of the tax imposed under section 4611 as is attributable to subsection (c)(1)(C) thereof on such barrel as the fraction of such gallon of gas is of the whole barrel.”
Credit for alcohol fuel, biodiesel, and alternative fuel mixtures— Section 6426(a) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting a comma, and by inserting after paragraph (2) the following:
“(3) against so much of the tax imposed by section 4611 as is attributable to the carbon dioxide equivalent rate of tax under subsection (c)(1)(C) an amount equal to the credit described in subsection (c), determined on the same fraction of the amount of such tax as the number of gallons of diesel used by the taxpayer in producing any biodiesel mixture for sale or use in a trade or business of the taxpayer, and
“(4) against the tax imposed by section 4611A an amount equal to the sum of the credits described in subsections (b), (c), and (e), determined on the same fraction of the amount of such tax as the number of gallons of alcohol, biodiesel, or alternative fuel used by the taxpayer in producing any fuel mixture of taxable fuel.”
Fuels not used for taxable purposes— Section 6427 of the Internal Revenue Code of 1986 is amended by redesignating subsection (p) as subsection (q) and by inserting after subsection (o) the following:
“(p) Special rule for carbon dioxide equivalent rate—For purposes of this section, in the case of a gallon of fuel refined from a barrel of crude oil or petroleum product on which tax was imposed under section 4611 at the carbon dioxide equivalent rate of tax under subsection (c)(1)(C) thereof, or produced from methanol, ethanol, or biodiesel on which tax was imposed under section 4611A, if the sale or use of such fuel would give rise to a payment under this section but for the fact that such fuel was taxed under section 4611 or 4611A and not section 4041 or 4081—
“(1) this section shall be applied as if such fuel had been taxed under section 4041 or 4081, and
“(2) the rate at which tax was imposed under section 4611 or 4611A with respect to such fuel shall be—
“(A) in the case of tax imposed under section 4611(c)(1)(C), the same fraction of such tax on such barrel as the fraction of a gallon of such fuel is of the whole barrel, and
“(B) in the case of tax imposed under section 4611A, the same fraction of the amount of such tax as the amount of fuel giving rise to a payment under this section.”
Effective date— The amendments made by this section shall take effect on January 1, 2015.
Sec. 4 Life-cycle emissions
Carbon dioxide emissions report— Not later than the first January 1st occurring at least 1 year after the date of enactment of this Act, the Administrator shall transmit to the Internal Revenue Service and make public a report on the total life-cycle emissions of carbon dioxide for each covered transportation fuel, expressed in tons of carbon dioxide emissions per barrel of fuel or an appropriate alternate measure. Such report shall take into account the differences in carbon dioxide emissions per barrel of fuel across different regions and countries due to means of resource extraction and production, transportation, and other factors, with each covered transportation fuel being as regionally specific as determined by the Administrator.
Addition of covered transportation fuel— The Administrator shall—
from time to time determine which transportation fuels have achieved a sufficient share of the on-road transportation fuel market to warrant being considered a covered transportation fuel, and
update the report transmitted under subsection (a), and transmit such updated report to Congress, with the specifications on the total life-cycle emissions of carbon dioxide and other greenhouse gases for each fuel newly determined under paragraph (1) to be considered a covered transportation fuel.
Definitions— In this section:
Administrator— The term Administrator means the Administrator of the Environmental Protection Agency.
Biofuel— The term biofuel means the biofuel component of a transportation fuel.
Covered transportation fuel— The term covered transportation fuel means gasoline, diesel fuel, biofuel, and any other fuel the Administrator determines has achieved a sufficient share of the on-road transportation fuel market to warrant regulation under this section.
Greenhouse gas— The term greenhouse gas has the same meaning given the term in section 211(o)(1) of the Clean Air Act (42 U.S.C. 7545(o)(1)).
Life-cycle emissions— The term life-cycle emissions means emissions from all activities included in the production, transport, storage, and use of a fuel, including land use changes, means of resource extraction and production, transportation systems, and leakages.