text: 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.
target: 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.
feat_title: To amend the Internal Revenue Code of 1986 to reduce emissions of carbon dioxide by imposing a tax on certain fuels based on their carbon content.