,,ii #aagth ,,congress #ast ,session ,s4 #bcgh ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #ai1 #bjba ,mr4 ,coons introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to establish a border carbon adjustment for the importation of certain goods4 #a4 ,short title ,this ,act may be cited as the ,fair1 ,affordable1 ,innovative1 and ,resilient ,transition and ,competition ,act or the ,,fair ,transition and ,competition ,act4 #b4 ,border carbon adjustment ,the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subtitle3 ,l ,border carbon adjustment ,chapter #aja--;,border carbon adjustment #aja ,border carbon adjustment ,sec4 #iija4 ,definitions4 ,sec4 #iijb4 ,determination of domestic environmental cost incurred4 ,sec4 #iijc4 ,determination of emissions for each sector4 ,sec4 #iijd4 ,border carbon adjustment4 ,sec4 #iije4 ,administration of border carbon adjustment4 ,sec4 #iijf4 ,allocation of carbon border fee adjustment revenues4 #iija4 ,definitions ,for purposes of this subtitle3 7#a7 ,administrator ,the term ,administrator means the ,administrator of the ,environmental ,protection ,agency4 7#b7 ,baseline emissions ,the term baseline emissions means the average greenhouse gas emissions of a company's relevant sector1 as determined under section #iijc7;a74 7#c7 ,benchmark emissions ,the term benchmark emissions means the greenhouse gas emissions of the highest emitting sites within a company's relevant sector in the ,united ,states1 as determined under section #iijc7;b74 7#d7 ,border carbon adjustment ,the term border carbon adjustment means the fee imposed pursuant to section #iijd4 7#e7 ,,co#b-;e ,the term ,,co#b-;e means the number of metric tons of carbon dioxide emissions with the same global warming potential as one metric ton of another greenhouse gas4 7#f7 ,covered fuel ,the term covered fuel means natural gas1 petroleum1 coal1 or any other product derived from natural gas1 petroleum1 or coal that is used or may be used so as to emit greenhouse gases to the atmosphere4 7#g7 ,covered good ,the term covered good means a covered fuel or a product produced within a sector4 7#h7 ,domestic environmental cost incurred ,the term domestic environmental cost incurred means the amount determined under section #iijb4 7#i7 ,greenhouse gas ,the term greenhouse gas has the same meaning given such term under paragraph 7#c7 of section #ija of the ,energy ,independence and ,security ,act of #bjjg 7#db ,u4,s4,c4 #agcba74 7#aj7 ,greenhouse gas content ,the term greenhouse gas content means the amount of greenhouse gases1 expressed in metric tons of ,,co#b-;e1 which would be emitted to the atmosphere by the use of a covered fuel4 7#aa7 ,imported ,irrespective of any other definition in law or treaty1 the term imported means to have landed on1 brought into1 or introduced into any place subject to the jurisdiction of the ,united ,states from a person or place outside the ,united ,states4 7#ab7 ,importer ,the term importer means a person who1 for any reason1 brings a product from a foreign country into the ,united ,states for consumption1 use1 or warehousing4 7#ac7 ,production greenhouse gas emissions ,the term production greenhouse gas emissions means the quantity of greenhouse gases1 expressed in metric tons of ,,co#b-;e1 emitted to the atmosphere resulting from the production1 manufacture1 or assembly of a product1 as determined under section #iije4 7#ad7 ,secretary ,the term ,secretary means the ,secretary of the ,treasury1 or the ,secretary's delegate4 7#ae7 ,sector ,the term sector means industrial facilities which produce one of the following products3 7,a7 ,steel4 7,b7 ,aluminum4 7,c7 ,cement4 7,d7 ,iron4 7,e7 ,any product identified pursuant to section #iije7;e74 7,f7 ,any product for which greater than #ej percent of the composition of such product consists of a product described in subparagraphs 7,a7 through 7,e74 7#af7 ,state ,the term ,state means any of the #ej ,states1 the ,district of ,columbia1 or the ,commonwealth of ,puerto ,rico4 7#ag7 ,upstream greenhouse gas emissions ,the term upstream greenhouse gas emissions means the quantity of greenhouse gases1 expressed in metric tons of ,,co#b-;e1 emitted to the atmosphere resulting from the extraction1 processing1 transportation1 financing1 or other preparation of a covered fuel for use1 as determined under section #iije4 #iijb4 ,determination of domestic environmental cost incurred ,not later than ,july #a1 #bjbc1 and annually thereafter1 the ,secretary 7in coordination with the ,director of the ,office of ,management and ,budget1 the ,secretary of ,commerce1 the ,secretary of ,energy1 the ,administrator1 the ,secretary of ,agriculture1 the ,secretary of ,transportation1 the ,united ,states ,trade ,representative1 and the ,secretary of the ,interior7 shall determine the domestic environmental cost incurred for each sector1 and for the production of each covered fuel1 based on the average cost incurred by companies within such sector 7or1 in the case of a covered fuel1 the average cost incurred to produce such fuel7 to comply with any ,federal1 ,state1 regional1 or local law1 regulation1 policy or program which is-- 7#a7 in effect at the time of such determination1 including any such law1 regulation1 policy1 or program which is implemented after the date of enactment of the ,,fair ,transition and ,competition ,act1 and 7#b7 designed to limit or reduce greenhouse gas emissions1 including-- 7,a7 the ,clean ,air ,act 7#db ,u4,s4,c4 #gdja71 7,b7 greenhouse gas emissions standards for passenger cars and light trucks1 and 7,c7 any ,state1 regional1 or local law1 regulation1 policy1 or program that imposes a cap-and-trade system with respect to1 or a tax or fee on1 carbon dioxide4 #iijc4 ,determination of emissions for each sector 7a7 ,baseline emissions ,not later than ,july #a1 #bjbc1 and annually thereafter1 the ,administrator shall determine and publish the average greenhouse gas emissions of each sector during the prior calendar year in order to demonstrate the amount of progress made in reducing greenhouse gas emissions in the ,united ,states4 7b7 ,benchmark emissions ,not later than ,july #a1 #bjbc1 and annually thereafter1 the ,administrator shall determine and publish the production greenhouse gas emissions for the top #a percent of the emitting production sites within each sector in the ,united ,states during the prior calendar year4 #iijd4 ,border carbon adjustment 7a7 ,border carbon adjustment ,beginning on ,january #a1 #bjbd1 in the case of any importer that imports a covered good into the ,united ,states1 there shall be imposed a fee-- 7#a7 in the case of a covered fuel1 in an amount equal to the product of-- 7,a7 the domestic environmental cost incurred in the production of such fuel1 multiplied by 7,b7 the upstream greenhouse gas emissions of such fuel1 7#b7 in the case of a product produced within a sector which is not a covered fuel1 in an amount equal to the product of-- 7,a7 the domestic environmental cost incurred for the sector in which such product was produced1 multiplied by 7,b7 the production greenhouse gas emissions of the product1 or 7#c7 in the case of a product produced within a sector for which reliable data with respect to the production greenhouse gas emissions of such product is not available1 in an amount equal to the product of-- 7,a7 the benchmark emissions for the sector which produced such product1 multiplied by 7,b7 the domestic environmental cost incurred for the sector in which such product was produced4 7b7 ,exemptions 7#a7 ,in general ,not later than ,july #a1 #bjbc1 and annually thereafter1 the ,secretary shall publish an annual report which identifies all applicable countries1 with any covered good imported from an applicable country during the calendar year beginning after the date of publication of such report to be exempt from the border carbon adjustment4 7#b7 ,applicable countries ,for purposes of this subsection1 the term applicable country means-- 7,a7 any country included on the list of ,least ,developed ,countries on the most recent ,development ,assistance ,committee ,list of ,official ,development ,assistance ,recipients published by the ,organisation for ,economic ,co-operation and ,development1 and 7,b7 any country which-- 7i7 does not impose a border carbon adjustment on products produced or manufactured in the ,united ,states1 and 7ii7 the ,secretary 7in coordination with the ,secretary of ,state1 the ,united ,states ,trade ,representative1 the ,secretary of ,commerce1 the ,secretary of ,energy1 the ,administrator1 the ,secretary of ,agriculture1 the ,secretary of ,transportation1 and the ,secretary of the ,interior7 determines enforces laws and regulations designed to limit or reduce greenhouse gas emissions that are at least as ambitious as ,federal laws and regulations designed to limit or reduce greenhouse gas emissions4 #iije4 ,administration of border carbon adjustment 7a7 ,in general ,the ,secretary 7in consultation with the ,administrator1 the ,united ,states ,trade ,representative1 and the ,secretary of ,homeland ,security7 shall prescribe regulations and guidance to implement the border carbon adjustment4 7b7 ,methodology ,in determining the production greenhouse gas emissions of a covered good1 the ,secretary shall use reliable methodologies which-- 7#a7 as may be necessary or convenient-- 7,a7 distinguish between different types of covered fuels1 7,b7 distinguish between a covered fuel's greenhouse gas content and that covered fuel's upstream greenhouse gas emissions1 7,c7 distinguish between the different types of greenhouse gas emissions which compose a covered fuel's upstream greenhouse gas emissions1 as well as the various processes which produced those emissions1 and 7,d7 distinguish between the different types of greenhouse gas emissions which compose a covered good's production greenhouse gas emissions1 as well as the various processes which produced those emissions1 7#b7 ensure that no covered good has the border carbon adjustment imposed upon it more than once1 and 7#c7 are consistent with international treaties and agreements1 including free trade agreements4 7c7 ,petition procedure ,the ,secretary shall establish fair1 timely1 impartial1 and1 to the extent necessary1 confidential procedures by which the importer of any covered good may petition the ,secretary to revise the ,secretary's determination of the production greenhouse gas emissions of that importer's covered good4 7d7 ,international negotiations ,the ,secretary of ,state and the ,united ,states ,trade ,representative shall engage with other countries regarding reducing global greenhouse gas emissions through trade and ensuring fairness in the application of emissions-based tariffs4 7e7 ,additional sectors ,the ,secretary 7in consultation with the ,director of the ,office of ,management and ,budget1 the ,secretary of ,commerce1 the ,secretary of ,energy1 the ,administrator1 the ,secretary of ,agriculture1 the ,secretary of ,transportation1 the ,secretary of the ,interior1 and the ,united ,states ,trade ,representative7 shall1 for purposes of section #iija7ae77;,c71 annually identify any product for which the ,secretary determines-- 7#a7 there is reliable data for determining the production greenhouse gas emissions of such product1 and 7#b7 that it is in the interest of the ,united ,states to include such product under section #iija7ae7 for purposes of application of the border carbon adjustment with respect to such product4 #iijf4 ,allocation of carbon border fee adjustment revenues ,with respect to the revenues collected under section #iijd-- 7#a7 such revenues shall be used to supplement appropriations made available in fiscal year #bjbd and each fiscal year thereafter to ,u4,s4 ,customs and ,border ,protection1 in such amounts as are necessary to administer the border carbon adjustment1 and 7#b7 from any amounts remaining following any supplemental appropriation made with respect to amounts described in paragraph 7#a7-- 7,a7 #ej percent of such amounts remaining shall be used to provide grants to ,states as prescribed in section #c of the ,,fair ,transition and ,competition ,act1 and 7,b7 #ej percent of such amounts remaining shall be available1 as provided by appropriation ,acts1 for making expenditures to support the high-impact research1 development1 demonstration1 technology transfer1 commercialization1 and export of technologies that reduce or eliminate greenhouse gas emissions4 4 #c4 ,resilient communities grant program 7a7 ,in general ,the ,secretary shall provide to each ,state a ,resilient ,communities ,grant no later than ,april #a1 #bjbe1 and each calendar year thereafter1 in an amount determined under subsection 7c74 7b7 ,eligible purposes ,a ,state receiving a ,resilient ,communities ,grant under this section shall use the amount of each such grant as follows3 7#a7 ,to provide job training and worker transition assistance1 with priority given to workers and former workers in fossil fuel-related industries4 7#b7 ,to assist municipalities1 counties1 or other political subdivisions of the ,state in-- 7,a7 developing climate vulnerability assessments and adaptation plans to help build resilience to rapid-onset and slow-onset climate hazards2 and 7,b7 implementing such plans1 which may include but are not limited to such projects as climate-smart infrastructure1 agricultural climate solutions1 and natural climate solutions to build climate resilience and support carbon sequestration4 7#c7 ,to directly assist frontline communities who are experiencing the earliest1 most severe threats from climate change with technical assistance and resources to undertake efforts to build climate resilience4 7#d7 ,alleviate historical burdens imposed upon communities of color1 low-income communities1 ,tribal and ,indigenous communities1 fossil fuel-dependent communities1 and other vulnerable populations that have been historically under-resourced due to inequities in resource allocation or disproportionately burdened by environmental hazards1 including exposure to climate risks and polluted air1 waterways1 and landscapes4 7#e7 ,to provide relocation assistance to individuals and populations when climate change or the energy transition threatens their health1 well-being1 or livelihood4 7#f7 ,to assist small businesses that are disproportionately impacted by the border carbon adjustment imposed under subtitle ,l of the ,internal ,revenue ,code of #aihf 7as added by section #b of this ,act74 7c7 ,amount of grant 7#a7 ,in general ,the amount of the ,resilient ,communities ,grant made to any ,state for any calendar year shall be equal to the product of-- 7,a7 the total amount made available under section #iijf7b77;,a7 of the ,internal ,revenue ,code of #aihf 7as added by this ,act7 based on revenue collected in the prior calendar year2 and 7,b7 the ,state allocation percentage for the ,state 7as determined under paragraph 7#b774 7#b7 ,state allocation percentage ,not later than ,december #a1 #bjbd1 and each calendar year thereafter1 the ,secretary 7in coordination with the ,administrator of the ,environmental ,protection ,agency1 the ,secretary of ,commerce1 the ,secretary of ,labor1 the ,secretary of ,homeland ,security1 the ,secretary of ,transportation1 the ,secretary of ,agriculture1 and the ,secretary of ,energy7 shall establish the formula for determining the ,state allocation percentage for the following calendar year1 which1 for each ,state1 shall take into account-- 7,a7 the percentage of the population of the ,united ,states residing in such ,state2 7,b7 the vulnerability of such ,state to climate change2 and 7,c7 the percentage of the total ,united ,states workforce employed in fossil fuel-related industries who are employed in such industries in such ,state4 7#c7 ,climate vulnerability ,in accounting for the vulnerability of each ,state to climate change under paragraph 7#b77;,b7 for the purposes of determining the ,state allocation percentage1 the parties identified in paragraph 7#b7 shall-- 7,a7 at a minimum1 consider the potential risks from rapid-onset and slow-onset climate hazards to-- 7i7 human health and safety2 7ii7 infrastructure and other physical assets2 and 7iii7 natural and agricultural systems2 7,b7 account for the disproportionate impact of climate change on socially vulnerable communities2 7,c7 ensure the methods for determining climate vulnerability do not result in a formula for ,state allocation that inequitably allocates resources to specific communities based on race1 socioeconomic status1 or other such characteristics2 and 7,d7 utilize relevant components of existing metrics and indicators of climate vulnerability in the ,united ,states wherever possible1 including but not limited to-- 7i7 the ,,fema ,national ,risk ,index2 and 7ii7 over the past #e years1 the ,state's proportion of-- 7,i7 ,national ,flood ,insurance ,program claims2 7,,ii7 ,fire ,mitigation ,assistance ,grants2 and 7,,iii7 ,,usda fast track drought designations4 7#d7 ,minimum ,state allocation ,for purposes of subparagraph 7,b71 the ,state allocation percentage for any ,state shall not be less than #a percent4 7#e7 ,verification ,the ,secretary shall verify the ,state use of grants under this subsection to ensure such uses comply with the requirements of this section4 ,the ,secretary may withhold a grant under this subsection if the ,secretary determines that a ,state has not complied with such requirements4 7d7 ,definitions ,in this section3 7#a7 ,secretary ,the term ,secretary means the ,secretary of the ,treasury or the ,secretary's delegate4 7#b7 ,slow-onset climate hazard ,the term slow-onset climate hazard means a threat from climate change that evolves gradually due to incremental change or because of an increasing frequency or intensity of recurring climate impacts1 including-- 7,a7 sea level rise2 7,b7 desertification2 7,c7 biodiversity loss2 7,d7 increasing temperatures2 7,e7 ocean acidification2 7,f7 soil salinization2 7,g7 drought2 7,h7 land and natural resource degradation2 7,i7 glacial retreat or reduced snow pack1 and related impacts2 and 7,j7 permafrost thaw4 7#c7 ,state ,the term ,state means any of the #ej ,states1 the ,district of ,columbia1 or the ,commonwealth of ,puerto ,rico4