A BILL TO BE ENTITLED
AN ACT to impose a carbon emissions tax.
The General Assembly of North Carolina enacts:
SECTION 1.  Subchapter I of Chapter 105 of the General Statutes is amended by adding a new Article to read:
"Article 2E.
"Carbon Emissions Tax.
"§ 105‑113.120.  Carbon emissions tax.
(a)	Scope. – The taxes imposed by this Article shall be collected only once on the same carbon‑based fuel product.
(b)	Administration. – Except as otherwise provided, Article 9 of this Chapter applies to this Article.
(c)	Definitions. – The following definitions apply in this Article:
(1)	Carbon‑based fuel product. – Coal, a petroleum product, natural gas, or electricity produced from such fuels.
(2)	Carbon dioxide equivalent. – The amount of carbon dioxide by mass that would produce the same global warming impact as a given mass of another greenhouse gas over an integrated 20‑year time frame after emission, based on the best available science.
(3)	Department. – The Department of Revenue.
(4)	Distributor. – The vendor of a carbon‑based fuel, at the first point of sale within the State.
(5)	Greenhouse gas. – Carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and any other substance emitted into the air that may be reasonably anticipated to cause or contribute to anthropogenic climate change.
(6)	Petroleum product. – All petroleum derivatives, whether in bond or not, which are commonly burned to produce heat, electricity, or motion, or which are commonly processed to produce synthetic gas for burning, including propane, gasoline, unleaded gasoline, kerosene, heating oil, diesel fuel, kerosene‑based jet fuel, and number 4, number 5, and residual oil for utility and nonutility uses, but not including petroleum feedstocks to plastics production or other manufacturing.
(7)	Sale. – A transfer, a trade, an exchange, or a barter, in any manner or by any means, with or without consideration.
(8)	Secretary. – The Secretary of Revenue.
(9)	Use. – The exercise of any right or power over carbon‑based fuel products, incident to the ownership or possession thereof, other than the making of a sale thereof in the course of engaging in a business of selling carbon‑based fuel products. The term includes the keeping or retention of carbon‑based fuel products for use.
(d)	Tax. – Every distributor shall pay a tax on any carbon‑based fuel product sold, used, or entered into the State by the distributor for purposes of distribution or use within the State. For the 2022 calendar year, the amount of the tax shall be twenty dollars ($20.00) per metric ton of carbon dioxide equivalent that would be emitted through the combustion of a carbon‑based fuel product. For calendar years after 2022 until the amount of tax reaches fifty dollars ($50.00) per metric ton of carbon dioxide equivalent, the amount of the tax per metric ton shall be the amount in effect for the preceding calendar year plus five dollars ($5.00) and adjusted by the same percentage as the percent inflation used by the United States Bureau of Labor Statistics Consumer Price Index; thereafter, the adjustment of the amount shall include only the inflation percentage authorized in this subsection. A distributor shall pay the amount of the tax established under this Article by the end of each calendar quarter.
(e)	Publications. – The Department shall annually calculate and publish by October 1 each of the following:
(1)	In conjunction with the Department of Environmental Quality, a table of the carbon dioxide equivalent applicable to each carbon‑based fuel product taxed pursuant to this Article.
(2)	The amount of the tax applicable in the next calendar year under subsection (d) of this section.
(f)	Exemption. – The tax levied in this Article does not apply to the following:
(1)	Carbon‑based fuel products to the extent that the carbon dioxide equivalent that is emitted as a result of combustion is sequestered and not released into the atmosphere.
(2)	Any activities which this Article may purport to tax in violation of the Constitution of the United States or any federal statute are hereby expressly exempted from taxation under this Article.
(g)	Report. – A distributor paying the tax established in this Article shall submit an annual compliance report to the Department on a form made available by the Department. Each report shall include clear and concise information demonstrating that the distributor made calculations and collections fully in accordance with this Article.
(h)	Use. – The Secretary shall credit the net proceeds of the tax collected under this Article as follows:
(1)	An amount equal to ten percent (10%) of the proceeds to the General Fund to be used for the special purpose of investments in and promotion of renewable energy sources within the State.
(2)	The remainder to be used to reduce the amount of utility bills paid by rate payers."
SECTION 2.  This act is effective when it becomes law.