H.R. 7646 — Payback Act

This section sets forth congressional findings that (1) the Supreme Court in Learning Resources, Inc. v. Trump held the International Emergency Economic Powers Act does not authorize the President to impose tariffs absent express congressional authorization, reaffirming Congress's exclusive Article I, Section 8 power to lay and collect duties and tariffs; (2) the Constitution vests tariff authority exclusively in Congress, and executive imposition without authorization erodes separation of powers and democratic accountability; (3) such tariffs collected billions of dollars and increased consumer prices as a regressive tax burdening working families, seniors, and small businesses; and (4) affected consumers lacked notice or recourse and shall receive refunds through a congressionally directed process.

This section defines the term “covered tariffs” for purposes of the Act as any duties or fees imposed pursuant to presidential proclamations or executive orders under the International Emergency Economic Powers Act that were subsequently determined to lack congressional authorization.

This section directs the Secretary of the Treasury to develop and publish, not later than 120 days after enactment, a formula to calculate refunds to American consumers for amounts paid attributable to covered tariffs. The formula must (1) quantify total consumer cost increases tied to covered tariffs using data from U.S. Customs and Border Protection, the Bureau of Economic Analysis, and other relevant federal datasets; (2) estimate pass-through effects from importers, distributors, and retailers to end consumers; and (3) incorporate equitable adjustments based on household income and geographic disparities. In developing the formula, the Secretary must consult with the Bureau of Economic Analysis, the Internal Revenue Service, the Federal Reserve Board, and independent economists with expertise in trade policy and consumer pricing.

This section requires refunds to be issued automatically, to the maximum extent practicable, using existing Treasury and Internal Revenue Service payment systems, including direct deposit or refundable tax credits. For individuals not captured through existing systems, the section directs the Secretary to establish a streamlined application process requiring minimal documentation.

This section requires the Secretary to submit a report to Congress not later than 180 days after enactment detailing the finalized refund formula, total anticipated refund obligations, and projected distribution timelines. The section further requires the Government Accountability Office to review the implementation of this Act and submit findings to Congress not later than one year after refunds commence.