How HR 5827 changes current law

AI-generated reading aid from the bill's amendatory text — verify against the official bill.

The bill introduces a new tax on greenhouse gas emissions from fossil fuels and industrial processes, amending the Internal Revenue Code accordingly.

• Internal Revenue Code of 1986

  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.

  This change establishes a new subtitle for greenhouse gas emissions taxation in the Internal Revenue Code.

• Internal Revenue Code of 1986

  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.

  This section imposes a new tax on fossil fuel greenhouse gas emissions.

• Internal Revenue Code of 1986

  (2) Applicable amount of carbon dioxide equivalent emissions.--For purposes of paragraph (1), the term `applicable amount' means-- (A) for calendar year 2027, $35 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.

  This change establishes the initial tax rate and a mechanism for its annual adjustment.

• Internal Revenue Code of 1986

  (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.

  This section outlines reporting requirements and emission levels to determine tax adjustments.

• Internal Revenue Code of 1986

  (e) Exemptions.-- (1) Exemption for noncombustive uses.-- (A) Refund for reduction or elimination of such emissions due to noncombustive use shall be permitted.

  This change provides exemptions and potential refunds for specific noncombustive uses of fossil fuels.