article: SECTION 1. IMPOSITION OF CARBON TAX ON PRIMARY FOSSIL FUELS. (a) General Rule.--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: ``Subchapter E--Carbon Tax on Primary Fossil Fuels ``Sec. 4691. Tax on coal. ``Sec. 4692. Tax on petroleum. ``Sec. 4693. Tax on natural gas. ``Sec. 4694. Inflation adjustments. ``SEC. 4691. TAX ON COAL. ``(a) General Rule.--There is hereby imposed a tax at the rate specified in subsection (b) on coal sold by the producer or importer thereof. ``(b) Rate of Tax.-- ``(1) In general.--Except as provided in paragraph (2), the rate of the tax imposed by subsection (a) shall be $18 per ton. ``(2) Phase-in.-- The rate of the tax imposed by subsection Effective during (a) shall be the fol- calendar year: lowing amount per ton: 1994................................. $3.60 1995................................. $7.20 1996................................. $10.80 1997................................. $14.40 ``(c) Definitions and Special Rules.--For purposes of this section-- ``(1) Coal to include lignite.--The term `coal' includes lignite. ``(2) Ton.--The term `ton' means 2,000 pounds. ``(3) Use treated as sale.--If the producer or importer of any coal uses such coal, such producer or importer shall be liable for tax under this section in the same manner as if such coal were sold by such producer or importer. ``SEC. 4692. TAX ON PETROLEUM. ``(a) General Rule.--There is hereby imposed a tax at the rate specified in subsection (c) on any petroleum with respect to which there is a taxable event. ``(b) Taxable Event.--For purposes of this section, the term `taxable event' means any event which would result in tax being imposed under section 4611 if-- ``(1) such section were applied without regard to subsections (b)(2), (e), and (f) thereof, and ``(2) section 4612(b) were applied by substituting `section 4692' for `section 4611'. ``(c) Amount of Tax.-- ``(1) In general.--Except as provided in paragraph (2), the rate of the tax imposed by subsection (a) shall be $3.90 per barrel. ``(2) Phase-in.-- The rate of the tax imposed by subsection Effective during (a) shall be the fol- calendar year: lowing amount per barrel: 1994................................. $.78 1995................................. $1.56 1996................................. $2.34 1997................................. $3.12 ``(d) Person Liable for Tax.--The person required to pay the tax imposed by this section on any petroleum shall be determined under the principles of section 4611(d). ``(e) Definitions and Special Rules.--For purposes of this section-- ``(1) Petroleum.--The term `petroleum' means any petroleum product including crude oil. ``(2) Barrel.--The term `barrel' means 42 United States gallons. ``(3) Fraction of barrel.--In the case of a fraction of a barrel, the tax imposed by this section shall be the same fraction of the amount of such tax imposed on a whole barrel. ``(4) Certain rules made applicable.--Rules similar to the rules of subsections (c) and (e) of section 4612 shall apply to the tax imposed by this section. ``SEC. 4693. TAX ON NATURAL GAS. ``(a) General Rule.--There is hereby imposed a tax at the rate specified in subsection (c) on-- ``(1) natural gas received at a United States pipeline facility, and ``(2) natural gas entered into the United States for consumption, use, or warehousing. ``(b) Tax on Certain Uses, Etc.-- ``(1) In general.--If-- ``(A) any domestic natural gas is used in or exported from the United States, and ``(B) before such use or exportation, no tax was imposed on such natural gas under subsection (a), then a tax at the rate specified in subsection (c) is hereby imposed on such natural gas. ``(2) Exception for certain uses on premises where produced.--Paragraph (1) shall not apply to any use of natural gas for extracting oil or natural gas on the premises where such natural gas was produced. The preceding sentence shall not apply to any use involving the combustion of the natural gas. ``(c) Rate of Tax.-- ``(1) In general.--Except as provided in paragraph (2), the rate of the taxes imposed by this section shall be 48 cents per MCF. ``(2) Phase-in.-- The rate of the taxes imposed by subsection (a) Effective during shall be the fol- calendar year lowing amount per MCF 1994................................. $.096 1995................................. $.192 1996................................. $.288 1997................................. $.384 ``(d) Persons Liable for Tax.-- ``(1) Receipt at pipeline.--The tax imposed by subsection (a)(1) shall be paid by the operator of the United States pipeline facility. ``(2) Importation.--The tax imposed by subsection (a)(2) shall be paid by the person entering the natural gas for consumption, use, or warehousing. ``(3) Tax on use or exports.--The tax imposed by subsection (b) shall be paid by the person using or exporting the natural gas, as the case may be. ``(e) Definitions.--For purposes of this section-- ``(1) Natural gas.--The term `natural gas' includes any natural gas liquid which is not treated as petroleum for purposes of the tax imposed by section 4692. ``(2) Domestic natural gas.--The term `domestic natural gas' means any natural gas produced from a well located in the United States. ``(3) United states pipeline facility.--The term `United States pipeline facility' means any pipeline in the United States used for purposes of transporting natural gas (other than a pipeline which is part of a gathering system). ``(4) MCF.--The term `MCF' means 1,000 cubic feet. ``(5) Other definitions.--The terms `United States' and `premises' have the respective meanings given such terms by section 4612(a). ``(6) Fractional part of mcf.--In the case of a fraction of an MCF, the tax imposed by this section shall be the same fraction of the amount of such tax imposed on a whole MCF. ``(7) Certain rules made applicable.--Rules similar to the rules of subsections (b), (c), and (e) of section 4612 shall apply to the tax imposed by this section. ``SEC. 4694. INFLATION ADJUSTMENTS. ``(a) General Rule.--Each rate of tax which would otherwise be in effect under this subchapter during any calendar year after 1994 shall be increased by the percentage (if any) by which-- ``(1) the CPI for the preceding calendar year (as defined in section 1(f)(4)), exceeds ``(2) the CPI for calendar year 1993 (as so defined). ``(b) Rounding.--Any increase under subsection (a) shall be rounded-- ``(1) to the nearest multiple of 10 cents in the case of a rate in effect under section 4691, ``(2) to the nearest multiple of 1 cent in the case of a rate in effect under section 4692, and ``(3) to the nearest multiple of 1/10 cent in the case of a rate in effect under section 4693.'' (b) Clerical Amendment.--The table of subchapters for chapter 38 of such Code is amended by adding at the end thereof the following new item: ``Subchapter E. Carbon tax on primary fossil fuels.'' (c) Effective Date.--The amendments made by this section shall take effect on January 1, 1994.
summary: Amends the Internal Revenue Code to impose a tax on the sale or importation of the following fuels based on their carbon content: coal, petroleum, and natural gas. Provides an inflation adjustment for such tax rates after calendar year 1994.