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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2454 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 2454

To create clean energy jobs, achieve energy independence, reduce global 
      warming pollution and transition to a clean energy economy.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 15, 2009

Mr. Waxman (for himself and Mr. Markey of Massachusetts) introduced the 
   following bill; which was referred to the Committee on Energy and 
    Commerce, and in addition to the Committees on Foreign Affairs, 
   Financial Services, Education and Labor, Science and Technology, 
Transportation and Infrastructure, Natural Resources, Agriculture, and 
   Ways and Means, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
To create clean energy jobs, achieve energy independence, reduce global 
      warming pollution and transition to a clean energy economy.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``American Clean 
Energy and Security Act of 2009''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
                         TITLE I--CLEAN ENERGY

   Subtitle A--Combined Efficiency and Renewable Electricity Standard

Sec. 101. Combined efficiency and renewable electricity standard.
        ``Sec. 610. Combined efficiency and renewable electricity 
                            standard.
              Subtitle B--Carbon Capture and Sequestration

Sec. 111. National strategy.
Sec. 112. Regulations for geologic sequestration sites.
        ``Sec. 813. Geologic sequestration sites.
Sec. 113. Studies and reports.
Sec. 114. Carbon capture and sequestration demonstration and early 
                            deployment program.
Sec. 115. Commercial deployment of carbon capture and sequestration 
                            technologies.
Sec. 116. Performance standards for coal-fueled power plants.
        ``Sec. 812. Performance standards for new coal-fired power 
                            plants.
                    Subtitle C--Clean Transportation

Sec. 121. Electric vehicle infrastructure.
Sec. 122. Large-scale vehicle electrification program.
Sec. 123. Plug-in electric drive vehicle manufacturing.
Sec. 124. Investment in clean vehicles.
     Subtitle D--State Energy and Environment Development Accounts

Sec. 131. Establishment of SEED Accounts.
Sec. 132. Support of State renewable energy and energy efficiency 
                            programs.
                   Subtitle E--Smart Grid Advancement

Sec. 141. Definitions.
Sec. 142. Assessment of Smart Grid cost effectiveness in products.
Sec. 143. Inclusions of Smart Grid capability on appliance ENERGY GUIDE 
                            labels.
Sec. 144. Smart Grid peak demand reduction goals.
Sec. 145. Reauthorization of energy efficiency public information 
                            program to include Smart Grid information.
Sec. 146. Inclusion of Smart-Grid features in appliance rebate program.
                   Subtitle F--Transmission Planning

Sec. 151. Transmission planning.
        ``Sec. 216A. Transmission planning.
            Subtitle G--Technical Corrections to Energy Laws

Sec. 161. Technical corrections to Energy Independence and Security Act 
                            of 2007.
Sec. 162. Technical corrections to Energy Policy Act of 2005.
              Subtitle H--Clean Energy Innovation Centers

Sec. 171. Clean energy innovation centers.
                  Subtitle I--Marine Spatial Planning

Sec. 181. Study of ocean renewable energy and transmission planning and 
                            siting.
                      TITLE II--ENERGY EFFICIENCY

            Subtitle A--Building Energy Efficiency Programs

Sec. 201. Greater energy efficiency in building codes.
        ``Sec. 304. Greater energy efficiency in building codes.
Sec. 202. Building retrofit program.
Sec. 203. Energy efficient manufactured homes.
Sec. 204. Building energy performance labeling program.
     Subtitle B--Lighting and Appliance Energy Efficiency Programs

Sec. 211. Lighting efficiency standards.
Sec. 212. Other appliance efficiency standards.
Sec. 213. Appliance efficiency determinations and procedures.
        ``Sec. 334. Jurisdiction and venue.
Sec. 214. Best-in-Class Appliances Deployment Program.
Sec. 215. Purpose of Energy Star.
                 Subtitle C--Transportation Efficiency

Sec. 221. Emissions standards.
                        ``Part B--Mobile Sources

        ``Sec. 821. Greenhouse gas emission standards for mobile 
                            sources.
Sec. 222. Greenhouse gas emissions reductions through transportation 
                            efficiency.
                    ``Part D--Planning Requirements

        ``Sec. 841. Greenhouse gas emissions reductions through 
                            transportation efficiency.
Sec. 223. SmartWay transportation efficiency program.
        ``Sec. 822. SmartWay transportation efficiency program.
Sec. 224. State vehicle fleets.
           Subtitle D--Industrial Energy Efficiency Programs

Sec. 241. Industrial plant energy efficiency standards.
Sec. 242. Electric and thermal waste energy recovery award program.
Sec. 243. Clarifying election of waste heat recovery financial 
                            incentives.
   Subtitle E--Improvements in Energy Savings Performance Contracting

Sec. 251. Energy savings performance contracts.
                    Subtitle F--Public Institutions

Sec. 261. Public institutions.
Sec. 262. Community energy efficiency flexibility.
Sec. 263. Small community joint participation.
Sec. 264. Low income community energy efficiency program.
              TITLE III--REDUCING GLOBAL WARMING POLLUTION

Sec. 301. Short title.
             Subtitle A--Reducing Global Warming Pollution

Sec. 311. Reducing global warming pollution.
        ``TITLE VII--GLOBAL WARMING POLLUTION REDUCTION PROGRAM

     ``Part A--Global Warming Pollution Reduction Goals and Targets

        ``Sec. 701. Findings and purpose.
        ``Sec. 702. Economy-wide reduction goals.
        ``Sec. 703. Reduction targets for specified sources.
        ``Sec. 704. Supplemental pollution reductions.
        ``Sec. 705. Review and program recommendations.
        ``Sec. 706. National academy review.
        ``Sec. 707. Presidential response and recommendations.
       ``Part B--Designation and Registration of Greenhouse Gases

        ``Sec. 711. Designation of greenhouse gases.
        ``Sec. 712. Carbon dioxide equivalent value of greenhouse 
                            gases.
        ``Sec. 713. Greenhouse gas registry.
                        ``Part C--Program Rules

        ``Sec. 721. Emission allowances.
        ``Sec. 722. Prohibition of excess emissions.
        ``Sec. 723. Penalty for noncompliance.
        ``Sec. 724. Trading.
        ``Sec. 725. Banking and borrowing.
        ``Sec. 726. Strategic reserve.
        ``Sec. 727. Permits.
        ``Sec. 728. International emission allowances.
                           ``Part D--Offsets

        ``Sec. 731. Offsets Integrity Advisory Board.
        ``Sec. 732. Establishment of offsets program.
        ``Sec. 733. Eligible project types.
        ``Sec. 734. Requirements for offset projects.
        ``Sec. 735. Approval of offset projects.
        ``Sec. 736. Verification of offset projects.
        ``Sec. 737. Issuance of offset credits.
        ``Sec. 738. Audits.
        ``Sec. 739. Program review and revision.
        ``Sec. 740. Early offset supply.
        ``Sec. 741. Environmental considerations.
        ``Sec. 742. Trading.
        ``Sec. 743. International offset credits.
 ``Part E--Supplemental Emissions Reductions From Reduced Deforestation

        ``Sec. 751. Definitions.
        ``Sec. 752. Findings.
        ``Sec. 753. Supplemental emissions reductions through reduced 
                            deforestation.
        ``Sec. 754. Requirements for international deforestation 
                            reduction program.
        ``Sec. 755. Reports and reviews.
        ``Sec. 756. Legal effect of part.
Sec. 312. Definitions.
        ``Sec. 700. Definitions.
                 Subtitle B--Disposition of Allowances

Sec. 321. Disposition of allowances for global warming pollution 
                            reduction program.
                  ``Part H--Disposition of Allowances

        ``Sec. 781. Allocation of allowances for supplemental 
                            reductions.
        ``Sec. 782. Allocation of emission allowances.
        ``Sec. 783. Electricity consumers.
        ``Sec. 784. Natural gas consumers.
        ``Sec. 785. Home heating oil and propane consumers.
        ``Sec. 786-788. [SECTIONS RESERVED].
        ``Sec. 789. Climate change rebates.
        ``Sec. 790. Exchange for State-issued allowances.
        ``Sec. 791. Auction procedures.
        ``Sec. 792. Auctioning allowances for other entities.
        ``Sec. 793. Establishment of funds.
            Subtitle C--Additional Greenhouse Gas Standards

Sec. 331. Greenhouse gas standards.
           ``TITLE VIII--ADDITIONAL GREENHOUSE GAS STANDARDS

        ``Sec. 801. Definitions.
                 ``Part A--Stationary Source Standards

        ``Sec. 811. Standards of performance.
                ``Part C--Exemptions From Other Programs

        ``Sec. 831. Criteria pollutants.
        ``Sec. 832. Hazardous air pollutants.
        ``Sec. 833. New source review.
        ``Sec. 834. Title V permits.
        ``Sec. 835. Existing proceedings.
Sec. 332. HFC Regulation.
        ``Sec. 619. Hydrofluorocarbons (HFCs).
Sec. 333. Black carbon.
                         ``Part E--Black Carbon

        ``Sec. 851. Black carbon.
Sec. 334. States.
Sec. 335. State programs.
                        ``Part F--Miscellaneous

        ``Sec. 861. State programs.
Sec. 336. Enforcement.
Sec. 337. Conforming amendments.
                  Subtitle D--Carbon Market Assurance

Sec. 341. Carbon market assurance.
                   ``Part IV--Carbon Market Assurance

        ``Sec. 401. Oversight and assurance of carbon markets.
                Subtitle E--Additional Market Assurance

Sec. 351. Regulation of certain transactions in derivatives involving 
                            energy commodities.
Sec. 352. No effect on authority of the Federal Energy Regulatory 
                            Commission.
Sec. 353. Inspector general of the Commodity Futures Trading 
                            Commission.
Sec. 354. Settlement and clearing through registered derivatives 
                            clearing organizations.
Sec. 355. Limitation on eligibility to purchase a credit default swap.
Sec. 356. Transaction fees.
Sec. 357. No effect on authority of the Federal Trade Commission.
Sec. 358. Regulation of carbon derivatives markets.
           TITLE IV--TRANSITIONING TO A CLEAN ENERGY ECONOMY

                     Subtitle A--Industrial Sector

Sec. 401. Ensuring real reductions in industrial emissions.
       ``Part F--Ensuring Real Reductions in Industrial Emissions

        ``Sec. 761. Purposes.
        ``Sec. 762. International negotiations.
        ``Sec. 763. Definitions.
             ``subpart 1--emission allowance rebate program

        ``Sec. 764. Eligible industrial sectors.
        ``Sec. 765. Distribution of emission allowance rebates.
          ``subpart 2--international reserve allowance program

        ``Sec. 766. International reserve allowance program.
                ``subpart 3--presidential determination

        ``Sec. 767. Presidential reports and determinations.
Sec. 402. Allocations to petroleum refineries.
                     ``Part G--Petroleum Refineries

        ``Sec. 771. Allocations to petroleum refineries.
              Subtitle B--Green Jobs and Worker Transition

                           Part 1--Green Jobs

Sec. 421. Clean energy curriculum development grants.
Sec. 422. Increased funding for energy worker training program.
          Part 2--Climate Change Worker Adjustment Assistance

Sec. 425. Petitions, eligibility requirements, and determinations.
Sec. 426. Program benefits.
Sec. 427. General provisions.
                    Subtitle C--Consumer Assistance

Sec. 431. Energy tax credit.
        ``Sec. 36B. Energy tax credit.
Sec. 432. Energy refund program for low-income consumers.
                 Subtitle D--Exporting Clean Technology

Sec. 441. Findings and purposes.
Sec. 442. Definitions.
Sec. 443. Governance.
Sec. 444. Determination of eligible countries.
Sec. 445. Qualifying activities.
Sec. 446. Assistance.
                 Subtitle E--Adapting to Climate Change

                      Part 1--Domestic Adaptation

         subpart a--national climate change adaptation program

Sec. 451. National climate change adaptation program.
Sec. 452. Climate services.
Sec. 453. State programs to build resilience to climate change impacts.
              subpart b--public health and climate change

Sec. 461. Sense of Congress on public health and climate change.
Sec. 462. Relationship to other laws.
Sec. 463. National strategic action plan.
Sec. 464. Advisory board.
Sec. 465. Reports.
Sec. 466. Definitions.
Sec. 467. Climate change health protection and promotion fund.
                 subpart c--natural resource adaptation

Sec. 471. Purposes.
Sec. 472. Natural resources climate change adaptation policy.
Sec. 473. Definitions.
Sec. 474. Council on Environmental Quality.
Sec. 475. Natural Resources Climate Change Adaptation Panel.
Sec. 476. Natural Resources Climate Change Adaptation Strategy.
Sec. 477. Natural resources adaptation science and information.
Sec. 478. Federal natural resource agency adaptation plans.
Sec. 479. State natural resources adaptation plans.
Sec. 480. Natural Resources Climate Change Adaptation Fund.
Sec. 481. National Wildlife Habitat and Corridors Information Program.
Sec. 482. Additional provisions regarding Indian tribes.
        Part 2--International Climate Change Adaptation Program

Sec. 491. Findings and purposes.
Sec. 492. Definitions.
Sec. 493. International Climate Change Adaptation Program.
Sec. 494. Distribution of allowances.
Sec. 495. Bilateral assistance.

SEC. 2. DEFINITIONS.

    For purposes of this Act:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) State.--The term ``State'' has the meaning given that 
        term in section 700 of the Clean Air Act, as added by section 
        312 of this Act.

                         TITLE I--CLEAN ENERGY

   Subtitle A--Combined Efficiency and Renewable Electricity Standard

SEC. 101. COMBINED EFFICIENCY AND RENEWABLE ELECTRICITY STANDARD.

    (a) In General.--Title VI of the Public Utility Regulatory Policies 
Act of 1978 (16 U.S.C. 2601 and following) is amended by adding at the 
end the following:

``SEC. 610. COMBINED EFFICIENCY AND RENEWABLE ELECTRICITY STANDARD.

    ``(a) Definitions.--For purposes of this section:
            ``(1) CHP savings.--The term `CHP savings' means--
                    ``(A) CHP system savings from a combined heat and 
                power system that commences operation after the date of 
                enactment of this section; and
                    ``(B) the increase in CHP system savings from, at 
                any time after the date of the enactment of this 
                section, upgrading, replacing, expanding, or increasing 
                the utilization of a combined heat and power system 
                that commenced operation on or before the date of 
                enactment of this section.
            ``(2) CHP system savings.--The term `CHP system savings' 
        means the electric output, and the electricity saved due to the 
        mechanical output, of a combined heat and power system, 
        adjusted to reflect any increase in fuel consumption by that 
        system as compared to the fuel that would have been required to 
        produce an equivalent useful thermal energy output in a 
        separate thermal-only system.
            ``(3) Combined heat and power system.--The term `combined 
        heat and power system' means a system that uses the same energy 
        source both for the generation of electrical or mechanical 
        power and the production of steam or another form of useful 
        thermal energy, provided that--
                    ``(A) the system meets such requirements relating 
                to efficiency and other operating characteristics as 
                the Commission may promulgate by regulation; and
                    ``(B) the net sales of electricity by the facility 
                to customers not consuming the thermal output from that 
                facility will not exceed 50 percent of total annual 
                electric generation by the facility.
            ``(4) Customer facility savings.--The term `customer 
        facility savings' means a reduction in end-use electricity 
        consumption (including recycled energy savings) at a facility 
        of an end-use consumer of electricity served by a retail 
        electric supplier, as compared to--
                    ``(A) in the case of a new facility, consumption at 
                a reference facility of average efficiency;
                    ``(B) in the case of an existing facility, 
                consumption at such facility during a base period, 
                except as provided in subparagraphs (C) and (D);
                    ``(C) in the case of new equipment that replaces 
                existing equipment with remaining useful life, the 
                projected consumption of the existing equipment for the 
                remaining useful life of such equipment, and 
                thereafter, consumption of new equipment of average 
                efficiency of the same equipment type; and
                    ``(D) in the case of new equipment that replaces 
                existing equipment at the end of the useful life of the 
                existing equipment, consumption by new equipment of 
                average efficiency of the same equipment type.
            ``(5) Distributed renewable generation facility.--The term 
        `distributed renewable generation facility' means a facility 
        that--
                    ``(A) generates renewable electricity;
                    ``(B) primarily serves 1 or more electricity 
                consumers at or near the facility site; and
                    ``(C) is no larger than 2 megawatts in capacity.
            ``(6) Electricity savings.--The term `electricity savings' 
        means reductions in electricity consumption, relative to 
        business-as-usual projections, achieved through measures 
        implemented after the date of enactment of this section, 
        limited to--
                    ``(A) customer facility savings of electricity, 
                adjusted to reflect any associated increase in fuel 
                consumption at the facility;
                    ``(B) reductions in distribution system losses of 
                electricity achieved by a retail electricity 
                distributor, as compared to losses attributable to new 
                or replacement distribution system equipment of average 
                efficiency;
                    ``(C) CHP savings; and
                    ``(D) fuel cell savings.
            ``(7) Federal land.--The term `Federal land' means land 
        owned by the United States, other than land held in trust for 
        an Indian or Indian tribe.
            ``(8) Federal renewable electricity credit.--The term 
        `Federal renewable electricity credit' means a credit, 
        representing one megawatt hour of renewable electricity, issued 
        pursuant to subsection (e).
            ``(9) Fuel cell.--The term `fuel cell' means a device that 
        directly converts the chemical energy of a fuel and an oxidant 
        into electricity by electrochemical processes occurring at 
        separate electrodes in the device.
            ``(10) Fuel cell savings.--The term `fuel cell savings' 
        means the electricity saved by a fuel cell that is installed 
        after the date of enactment of this section, or by upgrading a 
        fuel cell that commenced operation on or before the date of 
        enactment of this section, as a result of the greater 
        efficiency with which the fuel cell transforms fuel into 
        electricity as compared with sources of electricity delivered 
        through the grid, provided that--
                    ``(A) the fuel cell meets such requirements 
                relating to efficiency and other operating 
                characteristics as the Commission may promulgate by 
                regulation; and
                    ``(B) the net sales of electricity from the fuel 
                cell to third parties that do not receive thermal 
                service from the fuel cell do not exceed 50 percent of 
                the total annual electricity generation by the fuel 
                cell.
            ``(11) High conservation priority land.--The term `high 
        conservation priority land' means land that is not Federal land 
        and is--
                    ``(A) globally or State ranked as critically 
                imperiled or imperiled under a State Natural Heritage 
                Program; or
                    ``(B) old-growth or late-successional forest, as 
                defined by the office of the relevant State Forester or 
                relevant State agency with regulatory jurisdiction over 
                forestry activities.
            ``(12) Other qualifying energy resource.--The term `other 
        qualifying energy resource' means any of the following:
                    ``(A) Landfill gas.
                    ``(B) Wastewater treatment gas.
                    ``(C) Coal mine methane used to generate 
                electricity at or near the mine mouth.
                    ``(D) Qualified waste-to-energy.
            ``(13) Qualified hydropower.--The term `qualified 
        hydropower' means--
                    ``(A) energy produced from increased efficiency 
                achieved, or additions of capacity made, on or after 
                January 1, 1992, at a hydroelectric facility that was 
                placed in service before that date and does not include 
                additional energy generated as a result of operational 
                changes not directly associated with efficiency 
                improvements or capacity additions; or
                    ``(B) energy produced from generating capacity 
                added to a dam on or after January 1, 1992, provided 
                that the Commission certifies that--
                            ``(i) the dam was placed in service before 
                        the date of the enactment of this section and 
                        was operated for flood control, navigation, or 
                        water supply purposes and was not producing 
                        hydroelectric power prior to the addition of 
                        such capacity;
                            ``(ii) the hydroelectric project installed 
                        on the dam is licensed (or is exempt from 
                        licensing) by the Commission and is in 
                        compliance with the terms and conditions of the 
                        license or exemption, and with other applicable 
                        legal requirements for the protection of 
                        environmental quality, including applicable 
                        fish passage requirements; and
                            ``(iii) the hydroelectric project installed 
                        on the dam is operated so that the water 
                        surface elevation at any given location and 
                        time that would have occurred in the absence of 
                        the hydroelectric project is maintained, 
                        subject to any license or exemption 
                        requirements that require changes in water 
                        surface elevation for the purpose of improving 
                        the environmental quality of the affected 
                        waterway.
            ``(14) Qualified waste-to-energy.--The term `qualified 
        waste-to-energy' means energy from the combustion of municipal 
        solid waste or construction, demolition, or disaster debris, or 
        from the gasification or pyrolization of such waste or debris 
        and the combustion of the resulting gas at the same facility, 
        provided that--
                    ``(A) such term shall include only the energy 
                derived from the non-fossil biogenic portion of such 
                waste or debris;
                    ``(B) the Commission determines, with the 
                concurrence of the Administrator of the Environmental 
                Protection Agency, that the total lifecycle greenhouse 
                gas emissions attributable to the generation of 
                electricity from such waste or debris are lower than 
                those attributable to the likely alternative method of 
                disposing of such waste or debris; and
                    ``(C) the owner or operator of the facility 
                generating electricity from such energy provides to the 
                Commission, on an annual basis--
                            ``(i) a certification that the facility is 
                        in compliance with all applicable State and 
                        Federal environmental permits;
                            ``(ii) in the case of a facility that 
                        commenced operation before the date of the 
                        enactment of this section, a certification that 
                        the facility meets emissions standards 
                        promulgated under sections 112 or 129 of the 
                        Clean Air Act (42 U.S.C. 7412 or 7429) that 
                        apply as of the date of the enactment of this 
                        section to new facilities within the relevant 
                        source category; and
                            ``(iii) in the case of the combustion, 
                        pyrolization, or gasification of municipal 
                        solid waste, a certification that each local 
                        government unit from which such waste 
                        originates operates, participates in the 
                        operation of, contracts for, or otherwise 
                        provides for, recycling services for its 
                        residents.
            ``(15) Recycled energy savings.--The term `recycled energy 
        savings' means a reduction in electricity consumption that 
        results from a modification of an industrial or commercial 
        system that commenced operation before the date of enactment of 
        this section, in order to recapture electrical, mechanical, or 
        thermal energy that would otherwise be wasted.
            ``(16) Renewable biomass.--The term `renewable biomass' 
        means any of the following:
                    ``(A) Plant material, including waste material, 
                harvested or collected from actively managed 
                agricultural land that was in cultivation, cleared, or 
                fallow and nonforested on the date of enactment of this 
                section;
                    ``(B) Plant material, including waste material, 
                harvested or collected from pastureland that was 
                nonforested on such date of enactment;
                    ``(C) Nonhazardous vegetative matter derived from 
                waste, including separated yard waste, landscape right-
                of-way trimmings, construction and demolition debris or 
                food waste (but not municipal solid waste, recyclable 
                waste paper, painted, treated or pressurized wood, or 
                wood contaminated with plastic or metals);
                    ``(D) Animal waste or animal byproducts, including 
                products of animal waste digesters;
                    ``(E) Algae;
                    ``(F) Trees, brush, slash, residues, or any other 
                vegetative matter removed from within 600 feet of any 
                building, campground, or route designated for 
                evacuation by a public official with responsibility for 
                emergency preparedness, or from within 300 feet of a 
                paved road, electric transmission line, utility tower, 
                or water supply line;
                    ``(G) Residues from or byproducts of milled logs;
                    ``(H) Any of the following removed from forested 
                land that is not Federal and is not high conservation 
                priority land:
                            ``(i) Trees, brush, slash, residues, 
                        interplanted energy crops, or any other 
                        vegetative matter removed from an actively 
                        managed tree plantation established--
                                    ``(I) prior to the date of 
                                enactment of this section; or
                                    ``(II) on land that, as of the date 
                                of enactment of this section, was 
                                cultivated or fallow and non-forested.
                            ``(ii) Trees, logging residue, thinnings, 
                        cull trees, pulpwood, and brush removed from 
                        naturally regenerated forests or other non-
                        plantation forests, including for the purposes 
                        of hazardous fuel reduction or preventative 
                        treatment for reducing or containing insect or 
                        disease infestation.
                            ``(iii) Logging residue, thinnings, cull 
                        trees, pulpwood, brush and species that are 
                        non-native and noxious, from stands that were 
                        planted and managed after the date of enactment 
                        of this section to restore or maintain native 
                        forest types.
                            ``(iv) Dead or severely damaged trees 
                        removed within 5 years of fire, blowdown, or 
                        other natural disaster, and badly infested 
                        trees;
                    ``(I) Materials, pre-commercial thinnings, or 
                removed invasive species from National Forest System 
                land and public lands (as defined in section 103 of the 
                Federal Land Policy and Management Act of 1976 (43 
                U.S.C. 1702)), including those that are byproducts of 
                preventive treatments (such as trees, wood, brush, 
                thinnings, chips, and slash), that are removed as part 
                of a federally recognized timber sale, or that are 
                removed to reduce hazardous fuels, to reduce or contain 
                disease or insect infestation, or to restore ecosystem 
                health, and that are--
                            ``(i) not from components of the National 
                        Wilderness Preservation System, Wilderness 
                        Study Areas, Inventoried Roadless Areas, old 
                        growth or mature forest stands, components of 
                        the National Landscape Conservation System, 
                        National Monuments, National Conservation 
                        Areas, Designated Primitive Areas, or Wild and 
                        Scenic Rivers corridors;
                            ``(ii) harvested in environmentally 
                        sustainable quantities, as determined by the 
                        appropriate Federal land manager; and
                            ``(iii) harvested in accordance with 
                        Federal and State law and applicable land 
                        management plans.
            ``(17) Renewable electricity.--The term `renewable 
        electricity' means electricity generated (including by means of 
        a fuel cell) from a renewable energy resource or other 
        qualifying energy resources.
            ``(18) Renewable energy resource.--The term `renewable 
        energy resource' means each of the following:
                    ``(A) Wind energy.
                    ``(B) Solar energy.
                    ``(C) Geothermal energy.
                    ``(D) Renewable biomass.
                    ``(E) Biogas derived exclusively from renewable 
                biomass.
                    ``(F) Biofuels derived exclusively from renewable 
                biomass.
                    ``(G) Qualified hydropower.
                    ``(H) Marine and hydrokinetic renewable energy, as 
                that term is defined in section 632 of the Energy 
                Independence and Security Act of 2007 (42 U.S.C. 
                17211).
            ``(19) Retail electric supplier.--
                    ``(A) In general.--The term `retail electric 
                supplier' means, for any given year, an electric 
                utility that sold not less than 4,000,000 megawatt 
                hours of electric energy to electric consumers for 
                purposes other than resale during the preceding 
                calendar year.
                    ``(B) Inclusions and limitations.--For purposes of 
                determining whether an electric utility qualifies as a 
                retail electric supplier under subparagraph (A)--
                            ``(i) the sales of any affiliate of an 
                        electric utility to electric consumers, other 
                        than sales to the affiliate's lessees or 
                        tenants, for purposes other than resale shall 
                        be considered to be sales of such electric 
                        utility; and
                            ``(ii) sales by any electric utility to an 
                        affiliate, lessee, or tenant of such electric 
                        utility shall not be treated as sales to 
                        electric consumers.
                    ``(C) Affiliate.--For purposes of this paragraph, 
                the term `affiliate' when used in relation to a person, 
                means another person that directly or indirectly owns 
                or controls, is owned or controlled by, or is under 
                common ownership or control with, such person, as 
                determined under regulations promulgated by the 
                Commission.
            ``(20) Retail electric supplier's base amount.--The term 
        `retail electric supplier's base amount' means the total amount 
        of electric energy sold by the retail electric supplier, 
        expressed in megawatt hours, to electric customers for purposes 
        other than resale during the relevant calendar year, 
        excluding--
                    ``(A) electricity generated by a hydroelectric 
                facility that is not qualified hydropower;
                    ``(B) electricity generated by a nuclear generating 
                unit placed in service after the date of enactment of 
                this section; and
                    ``(C) the proportion of electricity generated by a 
                fossil-fueled generating unit that is equal to the 
                proportion of greenhouse gases produced by such unit 
                that are captured and geologically sequestered.
            ``(21) Retire and retirement.--The terms `retire' and 
        `retirement' with respect to a Federal renewable electricity 
        credit, means to disqualify such credit for any subsequent use 
        under this section, regardless of whether the use is a sale, 
        transfer, exchange, or submission in satisfaction of a 
        compliance obligation.
            ``(22) Third-party efficiency provider.--The term `third-
        party efficiency provider' means any retailer, building owner, 
        energy service company, financial institution or other 
        commercial, industrial or nonprofit entity that is capable of 
        providing electricity savings in accordance with the 
        requirements of this section.
            ``(23) Total annual electricity savings.--The term `total 
        annual electricity savings' means electricity savings during a 
        specified calendar year from measures that were placed into 
        service since date of the enactment of this section, taking 
        into account verified measure lifetimes or verified annual 
        savings attrition rates, as determined in accordance with such 
        regulations as the Commission may promulgate and measured in 
        megawatt hours.
    ``(b) Annual Compliance Obligation.--
            ``(1) In general.--For each of calendar years 2012 through 
        2039, not later than March 31 of the following calendar year, 
        each retail electric supplier shall submit to the Commission an 
        amount of Federal renewable electricity credits and 
        demonstrated total annual electricity savings that, in the 
        aggregate, is equal to such retail electric supplier's annual 
        combined target as set forth in subsection (d), except as 
        otherwise provided in subsection (g).
            ``(2) Demonstration of savings.--For purposes of this 
        subsection, submission of demonstrated total annual electricity 
        savings means submission of a report that demonstrates, in 
        accordance with the requirements of subsection (f), the total 
        annual electricity savings achieved by the retail electricity 
        supplier within the relevant compliance year.
            ``(3) Renewable electricity credits portion.--Except as 
        provided in paragraph (4), each retail electric supplier must 
        submit Federal renewable electricity credits equal to at least 
        three quarters of the retail electric supplier's annual 
        combined target.
            ``(4) State petition.--
                    ``(A) In general.--Upon written request from the 
                Governor of any State (including, for purposes of this 
                paragraph, the Mayor of the District of Columbia), the 
                Commission shall increase, to not more than two fifths, 
                the proportion of the annual combined targets of retail 
                electric suppliers located within such State that may 
                be met through submission of demonstrated total annual 
                electricity savings, provided that such increase shall 
                be effective only with regard to the portion of a 
                retail electric supplier's annual combined target that 
                is attributable to electricity sales within such State.
                    ``(B) Contents.--A Governor's request under this 
                paragraph shall include an explanation of the 
                Governor's rationale for determining, after 
                consultation with the relevant State regulatory 
                authority and other retail electricity ratemaking 
                authorities within the State, to make such request. The 
                request shall specify the maximum proportion of annual 
                combined targets (not more than two fifths) that can be 
                met through demonstrated total annual electricity 
                savings, and the period for which such proportion shall 
                be effective.
                    ``(C) Revision.--The Governor of any State may, 
                after consultation with the relevant State regulatory 
                authority and other retail electricity ratemaking 
                authorities within the State, submit a written request 
                for revocation or revision of a previous request 
                submitted under this paragraph. The Commission shall 
                grant such request, provided that--
                            ``(i) any revocation or revision shall not 
                        apply to the combined annual target for any 
                        year that is any earlier than 2 calendar years 
                        after the calendar year in which such request 
                        is submitted, so as to provide retail electric 
                        suppliers with adequate notice of such change; 
                        and
                            ``(ii) any revision shall meet the 
                        requirements of subparagraph (A).
    ``(c) Establishment of Program.--Not later than 1 year after the 
date of enactment of this section, the Commission shall promulgate 
regulations to implement and enforce the requirements of this section. 
In promulgating such regulations, the Commission shall, to the extent 
practicable--
            ``(1) preserve the integrity, and incorporate best 
        practices, of existing State renewable electricity and energy 
        efficiency programs;
            ``(2) rely upon existing and emerging State or regional 
        tracking systems that issue and track non-Federal renewable 
        electricity credits; and
            ``(3) cooperate with the States to facilitate coordination 
        between State and Federal renewable electricity and energy 
        efficiency programs and to minimize administrative burdens and 
        costs to retail electric suppliers.
    ``(d) Annual Compliance Requirement.--
            ``(1) Annual combined targets.--For each of calendar years 
        2012 through 2039, a retail electric supplier's annual combined 
        target shall be the product of--
                    ``(A) the required annual percentage for such year, 
                as set forth in paragraph (2); and
                    ``(B) the retail electric supplier's base amount 
                for such year.
            ``(2) Required annual percentage.--For each of calendar 
        years 2012 through 2039, the required annual percentage shall 
        be as follows:

 
            ``Calendar year                 Required annual percentage
 
2012...................................  6.0
2013...................................  6.0
2014...................................  9.5
2015...................................  9.5
2016...................................  13.0
2017...................................  13.0
2018...................................  16.5
2019...................................  16.5
2020...................................  20.0
2021 through 2039......................  20.0
 

    ``(e) Federal Renewable Electricity Credits.--
            ``(1) In general.--The regulations promulgated under this 
        section shall include provisions governing the issuance, 
        tracking, and verification of Federal renewable electricity 
        credits. Except as provided in paragraphs (2), (3), and (4) of 
        this subsection, the Commission shall issue to each generator 
        of renewable electricity, 1 Federal renewable electricity 
        credit for each megawatt hour of renewable electricity 
        generated by such generator after December 31, 2011. The 
        Commission shall assign a unique serial number to each Federal 
        renewable electricity credit.
            ``(2) Generation from certain state renewable electricity 
        programs.--Where renewable electricity is generated with the 
        support of payments from a retail electric supplier pursuant to 
        a State renewable electricity program (whether through State 
        alternative compliance payments or through payments to a State 
        renewable electricity procurement fund or entity), the 
        Commission shall issue Federal renewable electricity credits to 
        such retail electric supplier for the proportion of the 
        relevant renewable electricity generation that is attributable 
        to the retail electric supplier's payments, as determined 
        pursuant to regulations issued by the Commission. For any 
        remaining portion of the relevant renewable electricity 
        generation, the Commission shall issue Federal renewable 
        electricity credits to the generator, as provided in paragraph 
        (1), except that in no event shall more than 1 Federal 
        renewable electricity credit be issued for the same megawatt 
        hour of electricity. In determining how Federal renewable 
        electricity credits will be apportioned among retail electric 
        suppliers and generators in such circumstances, the Commission 
        shall consider information and guidance furnished by the 
        relevant State or States.
            ``(3) Certain power sales contracts.--When a generator has 
        sold renewable electricity to a retail electric supplier under 
        a contract for power from a facility placed in service before 
        the date of enactment of this section, and the contract does 
        not provide for the determination of ownership of the Federal 
        renewable electricity credits associated with such generation, 
        the Commission shall issue such Federal renewable electricity 
        credits to the retail electric supplier for the duration of the 
        contract.
            ``(4) Credit multiplier for distributed renewable 
        generation.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Commission shall issue 3 Federal 
                renewable electricity credits for each megawatt hour of 
                renewable electricity generated by a distributed 
                renewable generation facility.
                    ``(B) Adjustment.--Except as provided in 
                subparagraph (C), not later than January 1, 2014, and 
                not less frequently than every 4 years thereafter, the 
                Commission shall review the effect of this paragraph 
                and shall, as necessary, reduce the number of Federal 
                renewable electricity credits per megawatt hour issued 
                under this paragraph for any given energy source or 
                technology, but not below 1, to ensure that such number 
                is no higher than the Commission determines is 
                necessary to make distributed renewable generation 
                facilities using such source or technology cost 
                competitive with other sources of renewable electricity 
                generation.
                    ``(C) Facilities placed in service after 
                enactment.--For any distributed renewable generation 
                facility placed in service after the date of enactment 
                of this section, subparagraph (B) shall not apply for 
                the first 10 years after the date on which the facility 
                is placed in service. For each year during such 10-year 
                period, the Commission shall issue to the facility the 
                same number of Federal renewable electricity credits 
                per megawatt hour as are issued to that facility in the 
                year in which such facility is placed in service. After 
                such 10-year period, the Commission shall issue Federal 
                renewable energy credits to the facility in accordance 
                with the current multiplier as determined pursuant to 
                subparagraph (B).
            ``(5) Credits based on qualified hydropower.--For purposes 
        of this subsection, the number of Federal renewable electricity 
        credits issued for qualified hydropower shall be calculated--
                    ``(A) based solely on the increase in average 
                annual generation directly resulting from the 
                efficiency improvements or capacity additions described 
                in subsection (a)(13)(A); and
                    ``(B) using the same water flow information used to 
                determine a historic average annual generation baseline 
                for the hydroelectric facility, as certified by the 
                Commission.
            ``(6) Generation from mixed renewable and nonrenewable 
        resources.--If electricity is generated using both a renewable 
        energy resource or other qualifying energy resource and an 
        energy source that is not a renewable energy resource or other 
        qualifying energy resource (as, for example, in the case of co-
        firing of renewable biomass and fossil fuel), the Commission 
        shall issue Federal renewable electricity credits based son the 
        proportion of the electricity that is attributable to the 
        renewable energy resource or other qualifying energy resource.
            ``(7) Prohibition against double-counting.--Except as 
        provided in paragraph (4) of this subsection, the Commission 
        shall ensure that no more than 1 Federal renewable electricity 
        credit will be issued for any megawatt hour of renewable 
        electricity and that no Federal renewable electricity credit 
        will be used more than once for compliance with this section.
            ``(8) Trading.--The lawful holder of a Federal renewable 
        electricity credit may sell, exchange, transfer, submit for 
        compliance in accordance with subsection (b), or submit such 
        credit for retirement by the Commission.
            ``(9) Banking.--A Federal renewable electricity credit may 
        be submitted in satisfaction of the compliance obligation set 
        forth in subsection (b) for the compliance year in which the 
        credit was issued or for any subsequent compliance year.
            ``(10) Retirement.--The Commission shall retire a Federal 
        renewable electricity credit immediately upon submission by the 
        lawful holder of such credit, whether in satisfaction of a 
        compliance obligation under subsection (b) or on some other 
        basis.
    ``(f) Electricity Savings.--
            ``(1) Standards for measurement of savings.--As part of the 
        regulations promulgated under this section, the Commission 
        shall prescribe standards and protocols for defining and 
        measuring electricity savings and total annual electricity 
        savings that can be counted towards the compliance obligation 
        set forth in subsection (b). Such protocols and standards 
        shall, at minimum--
                    ``(A) specify the types of energy efficiency and 
                energy conservation measures that can be counted;
                    ``(B) require that energy consumption estimates for 
                customer facilities or portions of facilities in the 
                applicable base and current years be adjusted, as 
                appropriate, to account for changes in weather, level 
                of production, and building area;
                    ``(C) account for the useful life of measures;
                    ``(D) include deemed savings values for specific, 
                commonly used measures;
                    ``(E) allow for savings from a program to be 
                estimated based on extrapolation from a representative 
                sample of participating customers;
                    ``(F) include procedures for counting CHP savings, 
                recycled energy savings, and fuel cell savings;
                    ``(G) avoid double-counting of savings used for 
                compliance with this section, including savings that 
                are transferred pursuant to paragraph (3);
                    ``(H) ensure that, except as provided in 
                subparagraph (J), the retail electric supplier claiming 
                the savings played a significant role in achieving the 
                savings (including through the activities of a 
                designated agent of the supplier or through the 
                purchase of transferred savings);
                    ``(I) include savings from programs administered by 
                a retail electric supplier (or a retail electricity 
                distributor that is not a retail electric supplier) 
                that are funded by State, Federal, or other sources; 
                and
                    ``(J) in any State in which the State regulatory 
                authority has designated 1 or more entities to 
                administer electric ratepayer-funded efficiency 
                programs approved by such State regulatory authority, 
                provide that electricity savings achieved through such 
                programs shall be distributed equitably among retail 
                electric suppliers in accord with the direction of the 
                relevant State regulatory authority.
            ``(2) Standards for third-party verification of savings.--
        The regulations promulgated under this section shall establish 
        procedures and standards requiring third-party verification of 
        all reported electricity savings, including requirements for 
        accreditation of third-party verifiers to ensure that such 
        verifiers are professionally qualified and have no conflicts of 
        interest.
            ``(3) Transfers of savings.--
                    ``(A) Bilateral contracts for savings transfers.--
                Subject to the limitations of this paragraph, a retail 
                electric supplier may use electricity savings 
                transferred, pursuant to a bilateral contract, from 
                another retail electric supplier, an owner of an 
                electric distribution facility that is not a retail 
                electric supplier, a State, or a third-party efficiency 
                provider to meet the applicable compliance obligation 
                under subsection (b).
                    ``(B) Requirements.--Electricity savings 
                transferred and used for compliance pursuant to this 
                paragraph shall be--
                            ``(i) measured and verified in accordance 
                        with the procedures specified under this 
                        subsection;
                            ``(ii) reported in accordance with 
                        paragraph (4) of this subsection; and
                            ``(iii) achieved within the same State as 
                        is served by the retail electric supplier.
                    ``(C) Regulatory approval.--Nothing in this 
                paragraph shall limit or affect the authority of a 
                State regulatory authority to require a retail electric 
                supplier that is regulated by such authority to obtain 
                such authority's authorization or approval of a 
                contract for transfer of savings under this paragraph.
            ``(4) Reporting savings.--
                    ``(A) Requirements.--The regulations promulgated 
                under this section shall establish requirements 
                governing the submission of reports to demonstrate, in 
                accord with the protocols and standards for measurement 
                and third-party verification established under this 
                subsection, the total annual electricity savings 
                achieved by a retail electric supplier within the 
                relevant year.
                    ``(B) Review and approval.--The Commission shall 
                review each report submitted to the Commission by a 
                retail electric supplier and shall exclude any 
                electricity savings that have not been adequately 
                demonstrated in accordance with the requirements of 
                this subsection.
            ``(5) State administration.--
                    ``(A) Delegation of authority.--Upon receipt of an 
                application from the Governor of a State (including, 
                for purposes of this subsection, the Mayor of the 
                District of Columbia), the Commission may delegate to 
                the State the authority to review and verify reported 
                electricity savings for purposes of determining 
                demonstrated total annual electricity savings that may 
                be counted towards a retail electric supplier's 
                compliance obligation under subsection (b). The 
                Commission shall make a substantive determination 
                approving or disapproving a State application under 
                this subparagraph, after notice and comment, within 180 
                days of receipt of a complete application.
                    ``(B) Alternative measurement and verification 
                procedures and standards.--As part of an application 
                submitted under subparagraph (A), a State may request 
                to use alternative measurement and verification 
                procedures and standards to those specified in 
                paragraphs (1) and (2), provided the State demonstrates 
                that such alternative procedures and standards provide 
                a level of accuracy of measurement and verification at 
                least equivalent to the Federal procedures and 
                standards promulgated under paragraphs (1) and (2) of 
                this subsection.
                    ``(C) Review of state implementation.--The 
                Commission shall periodically review State 
                implementation of delegated authority under this 
                paragraph to ensure conformance with the requirements 
                of this section. The Commission may, at any time, 
                revoke the delegation of authority under this section 
                upon a finding that the State is not implementing its 
                delegated responsibilities in conformity with this 
                paragraph. As a condition of maintaining its delegated 
                authority under this paragraph, the Commission may 
                require a State to submit a revised application under 
                subparagraph (A) if the Commission has--
                            ``(i) promulgated new or substantially 
                        revised measurement and verification procedures 
                        and standards under this subsection; or
                            ``(ii) otherwise substantially revised the 
                        program established under this section.
    ``(g) Alternative Compliance Payments.--
            ``(1) In general.--A retail electric supplier may satisfy 
        the requirements of subsection (b) in whole or in part by 
        submitting in accord with this subsection, in lieu of each 
        Federal renewable electricity credit or megawatt hour of 
        demonstrated total annual electricity savings that would 
        otherwise be due, a payment equal to $25, adjusted for 
        inflation on January 1 of each year following calendar year 
        2009, in accord with such regulations as the Commission may 
        promulgate.
            ``(2) Payment to state funds.--Payments made under this 
        subsection shall be made directly to the State in which the 
        retail electric supplier is located, provided that such 
        payments are deposited directly into a fund within the State's 
        treasury for use pursuant to paragraph (3).
            ``(3) State use of funds.--States receiving payments under 
        this subsection shall use such funds exclusively for the 
        purposes of--
                    ``(A) deploying technologies that generate 
                electricity from renewable energy resources; or
                    ``(B) cost-effective energy efficiency measures and 
                programs.
            ``(4) Reporting.--Any State that receives a payment under 
        this subsection shall, within 12 months of receipt of such 
        payment, provide a report to the Commission giving a full 
        accounting of the use of such payments, including a detailed 
        description of the activities funded thereby.
    ``(h) Information Collection.--The Commission may require any 
retail electric supplier, renewable electricity generator, or such 
other entities as the Commission deems appropriate, to provide any 
information the Commission determines appropriate to carry out this 
section. Failure to submit such information or submission of false or 
misleading information under this subsection shall be a violation of 
this section.
    ``(i) Enforcement and Judicial Review.--
            ``(1) Failure to submit credits or demonstrate savings.--If 
        any person fails to comply with the requirements of subsection 
        (b) or (g), such person shall be liable to pay to the 
        Commission a civil penalty equal to the product of--
                    ``(A) double the alternative compliance payment 
                calculated under subsection (g)(1), and
                    ``(B) the aggregate quantity of Federal renewable 
                electricity credits, total annual electricity savings, 
                or equivalent alternative compliance payments that the 
                person failed to submit in violation of the 
                requirements of subsections (b) and (g).
            ``(2) Enforcement.--The Secretary shall assess a civil 
        penalty under paragraph (1) in accordance with the procedures 
        described in section 31(d) of the Federal Power Act (16 U.S.C. 
        823b(d)).
            ``(3) Violation of requirement of regulations or orders.--
        Any person who violates, or fails or refuses to comply with, 
        any requirement of a regulation promulgated or order issued 
        under this section shall be subject to a civil penalty under 
        section 316A(b) of the Federal Power Act. Such penalty shall be 
        assessed by the Commission in the same manner as in the case of 
        a violation referred to in section 316A(b) of such Act.
    ``(j) Judicial Review.--Any person aggrieved by a final action 
taken by the Commission under this section, other than the assessment 
of a civil penalty under subsection (i), may use the procedures for 
review described in section 313 of the Federal Power Act (16 U.S.C. 
825l). For purposes of this paragraph, references to an order in 
section 313 of such Act shall be deemed to refer also to all other 
final actions of the Commission under this section other than the 
assessment of a civil penalty under subsection (i).
    ``(k) Savings Provisions.--Nothing in this section shall--
            ``(1) diminish or qualify any authority of a State or 
        political subdivision of a State to--
                    ``(A) adopt or enforce any law or regulation 
                respecting renewable electricity or energy efficiency, 
                including any law or regulation establishing 
                requirements more stringent than those established by 
                this section, provided that no such law or regulation 
                may relieve any person of any requirement otherwise 
                applicable under this section; or
                    ``(B) regulate the acquisition and disposition of 
                Federal renewable electricity credits by retail 
                electric suppliers within the jurisdiction of such 
                State or political subdivision, including the authority 
                to require such retail electric supplier to acquire and 
                submit to the Secretary for retirement Federal 
                renewable electricity credits in excess of those 
                submitted under this section; or
            ``(2) affect the application of, or the responsibility for 
        compliance with, any other provision of law or regulation, 
        including environmental and licensing requirements.
    ``(l) Sunset.--This section expires on December 31, 2040.''.
    (b) Conforming Amendment.--The table of contents set forth in 
section 1(b) of the Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2601 and following) is amended by inserting after the item 
relating to section 609 the following:

``Sec. 610. Combined efficiency and renewable electricity standard.''.

              Subtitle B--Carbon Capture and Sequestration

SEC. 111. NATIONAL STRATEGY.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Administrator of the Environmental Protection Agency, 
in consultation with the Secretary of Energy and the heads of such 
other relevant Federal agencies as the President may designate, shall 
submit to Congress a report setting forth a unified and comprehensive 
strategy to address the key legal, regulatory and other barriers to the 
commercial-scale deployment of carbon capture and sequestration.
    (b) Barriers.--The report under this section shall--
            (1) identify those regulatory, legal, and other gaps and 
        barriers that could be addressed by a Federal agency using 
        existing statutory authority, those, if any, that require 
        Federal legislation, and those that would be best addressed at 
        the State or regional level;
            (2) identify regulatory implementation challenges, 
        including those related to approval of State programs and 
        delegation of authority for permitting; and
            (3) recommend rulemakings, Federal legislation, or other 
        actions that should be taken to further evaluate and address 
        such barriers.

SEC. 112. REGULATIONS FOR GEOLOGIC SEQUESTRATION SITES.

    (a) Coordinated Certification and Permitting Process.--Title VIII 
of the Clean Air Act, as added by section 331 of this Act, is amended 
by adding after section 812 (as added by section 116 of this Act) the 
following:

``SEC. 813. GEOLOGIC SEQUESTRATION SITES.

    ``(a) Coordinated Process.--The Administrator shall establish a 
coordinated approach to certifying and permitting geologic 
sequestration, taking into consideration all relevant statutory 
authorities. In establishing such approach, the Administrator shall--
            ``(1) take into account, and reduce redundancy with, the 
        requirements of section 1421 of the Safe Drinking Water Act (42 
        U.S.C. 300h), as amended by section 112(b) of the American 
        Clean Energy and Security Act of 2009, including the rulemaking 
        for geologic sequestration wells described at 73 Fed. Reg. 
        43491-541 (July 25, 2008); and
            ``(2) to the extent practicable, reduce the burden on 
        certified entities and implementing authorities.
    ``(b) Regulations.--Not later than 2 years after the date of 
enactment of this title, the Administrator shall promulgate regulations 
to protect human health and the environment by minimizing the risk of 
escape to the atmosphere of carbon dioxide injected for purposes of 
geologic sequestration.
    ``(c) Requirements.--The regulations under subsection (b) shall 
include--
            ``(1) a process to obtain certification for geologic 
        sequestration under this section; and
            ``(2) requirements for--
                    ``(A) monitoring, record keeping, and reporting for 
                emissions associated with injection into, and escape 
                from, geologic sequestration sites, taking into account 
                any requirements or protocols developed under section 
                713;
                    ``(B) public participation in the certification 
                process that maximizes transparency;
                    ``(C) the sharing of data between States, Indian 
                tribes, and the Environmental Protection Agency; and
                    ``(D) other elements or safeguards necessary to 
                achieve the purpose set forth in subsection (b).
    ``(d) Report.--Not later than 2 years after the promulgation of 
regulations under subsection (b), and at 3-year intervals thereafter, 
the Administrator shall deliver to the Committee on Energy and Commerce 
of the House of Representatives and the Committee on Environment and 
Public Works of the Senate a report on geologic sequestration in the 
United States, and, to the extent relevant, other countries in North 
America. Such report shall include--
            ``(1) data regarding injection, emissions to the 
        atmosphere, if any, and performance of active and closed 
        geologic sequestration sites, including those where enhanced 
        hydrocarbon recovery operations occur;
            ``(2) an evaluation of the performance of relevant Federal 
        environmental regulations and programs in ensuring 
        environmentally protective geologic sequestration practices;
            ``(3) recommendations on how such programs and regulations 
        should be improved or made more effective; and
            ``(4) other relevant information.''.
    (b) Safe Drinking Water Act Standards.--Section 1421 of the Safe 
Drinking Water Act (42 U.S.C. 300h) is amended by inserting after 
subsection (d) the following:
    ``(e) Carbon Dioxide Geologic Sequestration Wells.--
            ``(1) In general.--Not later than 1 year after the date of 
        enactment of this subsection, the Administrator shall 
        promulgate regulations under subsection (a) for carbon dioxide 
        geologic sequestration wells.
            ``(2) Financial responsibility.--The regulations referred 
        to in paragraph (1) shall include requirements for maintaining 
        evidence of financial responsibility, including financial 
        responsibility for emergency and remedial response, well 
        plugging, site closure, and post-injection site care. Financial 
        responsibility may be established for carbon dioxide geologic 
        sequestration wells in accordance with regulations promulgated 
        by the Administrator by any one, or any combination, of the 
        following: insurance, guarantee, trust, standby trust, surety 
        bond, letter of credit, qualification as a self-insurer, or any 
        other method satisfactory to the Administrator.''.

SEC. 113. STUDIES AND REPORTS.

    (a) Study of Legal Framework for Geologic Sequestration Sites.--
            (1) Establishment of task force.--As soon as practicable, 
        but not later than 6 months after the date of enactment of this 
        Act, the Administrator of the Environmental Protection Agency 
        shall establish a task force to be composed of an equal number 
        of subject matter experts, nongovernmental organizations with 
        expertise in environmental policy, academic experts with 
        expertise in environmental law, State officials with 
        environmental expertise, representatives of State Attorneys 
        General, and members of the private sector, to conduct a study 
        of--
                    (A) existing Federal environmental statutes, State 
                environmental statutes, and State common law that apply 
                to geologic sequestration sites for carbon dioxide, 
                including the ability of such laws to serve as risk 
                management tools;
                    (B) the existing statutory framework, including 
                Federal and State laws, that apply to harm and damage 
                to the environment or public health at closed sites 
                where carbon dioxide injection has been used for 
                enhanced hydrocarbon recovery;
                    (C) the statutory framework, environmental health 
                and safety considerations, implementation issues, and 
                financial implications of potential models for Federal, 
                State, or private sector assumption of liabilities and 
                financial responsibilities with respect to closed 
                geologic sequestration sites;
                    (D) private sector mechanisms, including insurance 
                and bonding, that may be available to manage 
                environmental, health and safety risk from closed 
                geologic sequestration sites; and
                    (E) the subsurface mineral rights, water rights, or 
                property rights issues associated with geologic 
                sequestration of carbon dioxide.
            (2) Report.--Not later than 18 months after the date of 
        enactment of this Act, the task force established under 
        paragraph (1) shall submit to Congress a report describing the 
        results of the study conducted under that paragraph including 
        any consensus recommendations of the task force.
    (b) Environmental Statutes.--
            (1) Study.--The Administrator of the Environmental 
        Protection Agency shall conduct a study examining how, and 
        under what circumstances, the environmental statutes for which 
        the Environmental Protection Agency has responsibility would 
        apply to carbon dioxide injection and geologic sequestration 
        activities.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Administrator shall submit to 
        Congress a report describing the results of the study conducted 
        under paragraph (1).

SEC. 114. CARBON CAPTURE AND SEQUESTRATION DEMONSTRATION AND EARLY 
              DEPLOYMENT PROGRAM.

    (a) Definitions.--For purposes of this section:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (2) Distribution utility.--The term ``distribution 
        utility'' means an entity that distributes electricity directly 
        to retail consumers under a legal, regulatory, or contractual 
        obligation to do so.
            (3) Electric utility.--The term ``electric utility'' has 
        the meaning provided by section 3(22) of the Federal Power Act 
        (16 U.S.C. 796(22)).
            (4) Fossil fuel-based electricity.--The term ``fossil fuel-
        based electricity'' means electricity that is produced from the 
        combustion of fossil fuels.
            (5) Fossil fuel.--The term ``fossil fuel'' means coal, 
        petroleum, natural gas or any derivative of coal, petroleum, or 
        natural gas.
            (6) Corporation.--The term ``Corporation'' means the Carbon 
        Storage Research Corporation established in accordance with 
        this section.
            (7) Qualified industry organization.--The term ``qualified 
        industry organization'' means the Edison Electric Institute, 
        the American Public Power Association, the National Rural 
        Electric Cooperative Association, a successor organization of 
        such organizations, or a group of owners or operators of 
        distribution utilities delivering fossil fuel-based electricity 
        who collectively represent at least 20 percent of the volume of 
        fossil fuel-based electricity delivered by distribution 
        utilities to consumers in the United States.
            (8) Retail consumer.--The term ``retail consumer'' means an 
        end-user of electricity.
    (b) Carbon Storage Research Corporation.--
            (1) Establishment.--
                    (A) Referendum.--Qualified industry organizations 
                may conduct, at their own expense, a referendum among 
                the owners or operators of distribution utilities 
                delivering fossil fuel-based electricity for the 
                creation of a Carbon Storage Research Corporation. Such 
                referendum shall be conducted by an independent 
                auditing firm agreed to by the qualified industry 
                organizations. Voting rights in such referendum shall 
                be based on the quantity of fossil fuel-based 
                electricity delivered to consumers in the previous 
                calendar year or other representative period as 
                determined by the Secretary pursuant to subsection (f). 
                Upon approval of those persons representing two-thirds 
                of the total quantity of fossil fuel-based electricity 
                delivered to retail consumers, the Corporation shall be 
                established unless opposed by the State regulatory 
                authorities pursuant to subparagraph (B). All 
                distribution utilities voting in the referendum shall 
                certify to the independent auditing firm the quantity 
                of fossil fuel-based electricity represented by their 
                vote.
                    (B) State regulatory authorities.--Upon its own 
                motion or the petition of a qualified industry 
                organization, each State regulatory authority shall 
                consider its support or opposition to the creation of 
                the Corporation under subparagraph (A). State 
                regulatory authorities may notify the independent 
                auditing firm referred to in subparagraph (A) of their 
                views on the creation of the Corporation within 180 
                days after the date of enactment of this Act. If 40 
                percent or more of the State regulatory authorities 
                submit to the independent auditing firm written notices 
                of opposition, the Corporation shall not be established 
                notwithstanding the approval of the qualified industry 
                organizations as provided in subparagraph (A).
            (2) Termination.--The Corporation shall be authorized to 
        collect assessments and conduct operations pursuant to this 
        section for a 10-year period from the date 6 months after the 
        date of enactment of this Act. After such 10-year period, the 
        Corporation is no longer authorized to collect assessments and 
        shall be dissolved on the date 15 years after such date of 
        enactment, unless the period is extended by an Act of Congress.
            (3) Governance.--The Corporation shall operate as a 
        division or affiliate of the Electric Power Research Institute 
        (referred to in this section as ``EPRI'') and be managed by a 
        Board of not more than 15 voting members responsible for its 
        operations, including compliance with this section. EPRI, in 
        consultation with the Edison Electric Institute, the American 
        Public Power Association and the National Rural Electric 
        Cooperative Association shall appoint the Board members under 
        clauses (i), (ii), and (iii) of subparagraph (A) from among 
        candidates recommended by those organizations. At least a 
        majority of the Board members appointed by EPRI shall be 
        representatives of distribution utilities subject to 
        assessments under subsection (d).
                    (A) Members.--The Board shall include at least one 
                representative of each of the following:
                            (i) Investor-owned utilities.
                            (ii) Utilities owned by a State agency or a 
                        municipality.
                            (iii) Rural electric cooperatives.
                            (iv) Fossil fuel producers.
                            (v) Non-profit environmental organizations.
                            (vi) Independent generators or wholesale 
                        power providers.
                            (vii) Consumer groups.
                    (B) Nonvoting members.--The Board shall also 
                include as additional non-voting Members the Secretary 
                of Energy or his designee and 2 representatives of 
                State regulatory authorities as defined in section 
                3(17) of the Public Utility Regulatory Policies Act of 
                1978 (16 U.S.C. 2602(17)), each designated by the 
                National Association of State Regulatory Utility 
                Commissioners from States that are not within the same 
                transmission interconnection.
            (4) Compensation.--Corporation Board members shall receive 
        no compensation for their services, nor shall Corporation Board 
        members be reimbursed for expenses relating to their service.
            (5) Terms.--Corporation Board members shall serve terms of 
        4 years and may serve not more than 2 full consecutive terms. 
        Members filling unexpired terms may serve not more than a total 
        of 8 consecutive years. Former members of the Corporation Board 
        may be reappointed to the Corporation Board if they have not 
        been members for a period of 2 years. Initial appointments to 
        the Corporation Board shall be for terms of 1, 2, 3, and 4 
        years, staggered to provide for the selection of 3 members each 
        year.
            (6) Status of corporation.--The Corporation shall not be 
        considered to be an agency, department, or instrumentality of 
        the United States, and no officer or director or employee of 
        the Corporation shall be considered to be an officer or 
        employee of the United States Government, for purposes of title 
        5 or title 31 of the United States Code, or for any other 
        purpose, and no funds of the Corporation shall be treated as 
        public money for purposes of chapter 33 of title 31, United 
        States Code, or for any other purpose.
    (c) Functions and Administration of the Corporation.--
            (1) In general.--The Corporation shall establish and 
        administer a program to accelerate the commercial availability 
        of carbon dioxide capture and storage technologies and methods, 
        including technologies which capture and store, or capture and 
        convert, carbon dioxide. Under such program competitively 
        awarded grants, contracts, and financial assistance shall be 
        provided and entered into with eligible entities. Except as 
        provided in paragraph (8), the Corporation shall use all funds 
        derived from assessments under subsection (d) to issue grants 
        and contracts to eligible entities.
            (2) Purpose.--The purposes of the grants, contracts, and 
        assistance under this subsection shall be to support 
        commercial-scale demonstrations of carbon capture or storage 
        technology projects capable of advancing the technologies to 
        commercial readiness. Such projects should encompass a range of 
        different coal and other fossil fuel varieties, be 
        geographically diverse, involve diverse storage media, and 
        employ capture or storage, or capture and conversion, 
        technologies potentially suitable either for new or for 
        retrofit applications. The Corporation shall seek, to the 
        extent feasible, to support at least 5 commercial-scale 
        demonstration projects integrating carbon capture and 
        sequestration or conversion technologies.
            (3) Eligible entities.--Entities eligible for grants, 
        contracts or assistance under this subsection may include 
        distribution utilities, electric utilities and other private 
        entities, academic institutions, national laboratories, Federal 
        research agencies, State research agencies, non-profit 
        organizations, or consortiums of 2 or more entities. Pilot-
        scale and similar small-scale projects are not eligible for 
        support by the Corporation. Owners or developers of projects 
        supported by the Corporation shall, where appropriate, share in 
        the costs of such projects.
            (4) Grants for early movers.--Fifty percent of the funds 
        raised under this section shall be provided in the form of 
        grants to electric utilities that had, prior to the award of 
        any grant under this section, committed resources to deploy a 
        large scale electricity generation unit with integrated carbon 
        capture and sequestration or conversion applied to a 
        substantial portion of the unit's carbon dioxide emissions. 
        Grant funds shall be provided to defray costs incurred by such 
        electricity utilities for at least 5 such electricity 
        generation units.
            (5) Administration.--The members of the Board of Directors 
        of the Corporation shall elect a Chairman and other officers as 
        necessary, may establish committees and subcommittees of the 
        Corporation, and shall adopt rules and bylaws for the conduct 
        of business and the implementation of this section. The Board 
        shall appoint an Executive Director and professional support 
        staff who may be employees of the Electric Power Research 
        Institute (EPRI). After consultation with the Technical 
        Advisory Committee established under subsection (j), the 
        Secretary, and the Director of the National Energy Technology 
        Laboratory to obtain advice and recommendations on plans, 
        programs, and project selection criteria, the Board shall 
        establish priorities for grants, contracts, and assistance; 
        publish requests for proposals for grants, contracts and 
        assistance; award grants, contracts and assistance 
        competitively, on the basis of merit, after the establishment 
        of procedures that provide for scientific peer review by the 
        Technical Advisory Committee. The Board shall give preference 
        to applications that reflect the best overall value and 
        prospect for achieving the purposes of the section, such as 
        those which demonstrate an integrated approach for capture and 
        storage or capture and conversion technologies. The Board 
        members shall not participate in making grants or awards to 
        entities with whom they are affiliated.
            (6) Uses of grants, contracts, and assistance.--A grant, 
        contract, or other assistance provided under this subsection 
        may be used to purchase carbon dioxide when needed to conduct 
        tests of carbon dioxide storage sites, in the case of 
        established projects that are storing carbon dioxide emissions, 
        or for other purposes consistent with the purposes of this 
        section. The Corporation shall make publicly available at no 
        cost information learned as a result of projects which it 
        supports financially.
            (7) Intellectual property.--The Board shall establish 
        policies regarding the ownership of intellectual property 
        developed as a result of Corporation grants and other forms of 
        technology support. Such policies shall encourage individual 
        ingenuity and invention.
            (8) Administrative expenses.--Up to 5 percent of the funds 
        collected in any fiscal year under subsection (d) may be used 
        for the administrative expenses of operating the Corporation 
        (not including costs incurred in the determination and 
        collection of the assessments pursuant to subsection (d)).
            (9) Programs and budget.--Before August 1 each year, the 
        Corporation, after consulting with the Technical Advisory 
        Committee and the Secretary and the Director of the 
        Department's National Energy Technology Laboratory and other 
        interested parties to obtain advice and recommendations, shall 
        publish for public review and comment its proposed plans, 
        programs, project selection criteria, and projects to be funded 
        by the Corporation for the next calendar year. The Corporation 
        shall also publish for public review and comment a budget plan 
        for the next calendar year, including the probable costs of all 
        programs, projects, and contracts and a recommended rate of 
        assessment sufficient to cover such costs. The Secretary may 
        recommend program and activities the Secretary considers 
        appropriate. The Corporation shall include in the first 
        publication it issues under this paragraph a strategic plan or 
        roadmap for the achievement of the purposes of the Corporation, 
        as set forth in paragraph (2).
            (10) Records; audits.--The Corporation shall keep minutes, 
        books, and records that clearly reflect all of the acts and 
        transactions of the Corporation and make public such 
        information. The books of the Corporation shall be audited by a 
        certified public accountant at least once each fiscal year and 
        at such other times as the Corporation may designate. Copies of 
        each audit shall be provided to the Congress, all Corporation 
        board members, all qualified industry organizations, each State 
        regulatory authority and, upon request, to other members of the 
        industry. If the audit determines that the Corporation's 
        practices fail to meet generally accepted accounting principles 
        the assessment collection authority of the Corporation under 
        subsection (d) shall be suspended until a certified public 
        accountant renders a subsequent opinion that the failure has 
        been corrected. The Corporation shall make its books and 
        records available for review by the Secretary or the 
        Comptroller General of the United States.
            (11) Public access.--The Corporation Board's meetings shall 
        be open to the public and shall occur after at least 30 days 
        advance public notice. Meetings of the Board of Directors may 
        be closed to the public where the agenda of such meetings 
        includes only confidential matters pertaining to project 
        selection, the award of grants or contracts, personnel matter, 
        or the receipt of legal advice. The minutes of all meetings of 
        the Corporation shall be made available to and readily 
        accessible by the public.
            (12) Annual report.--Each year the Corporation shall 
        prepare and make publicly available a report which includes an 
        identification and description of all programs and projects 
        undertaken by the Corporation during the previous year. The 
        report shall also detail the allocation or planned allocation 
        of Corporation resources for each such program and project. The 
        Corporation shall provide its annual report to the Congress, 
        the Secretary, each State regulatory authority, and upon 
        request to the public. The Secretary shall, not less than 60 
        days after receiving such report, provide to the President and 
        Congress a report assessing the progress of the Corporation in 
        meeting the objectives of this section.
    (d) Assessments.--
            (1) Amount.--(A) In all calendar years following its 
        establishment, the Corporation shall collect an assessment on 
        distribution utilities for all fossil fuel-based electricity 
        delivered directly to retail consumers (as determined under 
        subsection (f)). The assessments shall reflect the relative 
        carbon dioxide emission rates of different fossil fuel-based 
        electricity, and initially shall be not less than the following 
        amounts for coal, natural gas, and oil:

Fuel type                               Rate of assessment per kilowatt
                                         hour
  Coal................................  $0.00043
  Natural Gas.........................  $0.00022
  Oil.................................  $0.00032.
 

            (B) The Corporation is authorized to adjust the assessments 
        on fossil fuel-based electricity to reflect changes in the 
        expected quantities of such electricity from different fuel 
        types, such that the assessments generate not less than $1.0 
        billion and not more than $1.1 billion annually. The 
        Corporation is authorized to supplement assessments through 
        additional financial commitments.
            (2) Investment of funds.--Pending disbursement pursuant to 
        a program, plan, or project, the Corporation may invest funds 
        collected through assessments under this subsection, and any 
        other funds received by the Corporation, only in obligations of 
        the United States or any agency thereof, in general obligations 
        of any State or any political subdivision thereof, in any 
        interest-bearing account or certificate of deposit of a bank 
        that is a member of the Federal Reserve System, or in 
        obligations fully guaranteed as to principal and interest by 
        the United States.
            (3) Reversion of unused funds.--If the Corporation does not 
        disburse, dedicate or assign 75 percent or more of the 
        available proceeds of the assessed fees in any calendar year 7 
        or more years following its establishment, due to an absence of 
        qualified projects or similar circumstances, it shall reimburse 
        the remaining undedicated or unassigned balance of such fees, 
        less administrative and other expenses authorized by this 
        section, to the distribution utilities upon which such fees 
        were assessed, in proportion to their collected assessments.
    (e)  ERCOT.--
            (1) Assessment, collection, and remittance.--(A) 
        Notwithstanding any other provision of this section, within 
        ERCOT, the assessment provided for in subsection (d) shall be--
                    (i) levied directly on qualified scheduling 
                entities, or their successor entities;
                    (ii) charged consistent with other charges imposed 
                on qualified scheduling entities as a fee on energy 
                used by the load-serving entities; and
                    (iii) collected and remitted by ERCOT to the 
                Corporation in the amounts and in the same manner as 
                set forth in subsection (d).
            (B) The assessment amounts referred to in subparagraph (A) 
        shall be--
                    (i) determined by the amount and types of fossil 
                fuel-based electricity delivered directly to all retail 
                customers in the prior calendar year beginning with the 
                year ending immediately prior to the period described 
                in subsection (b)(1); and
                    (ii) take into account the number of renewable 
                energy credits retired by the load-serving entities 
                represented by a qualified scheduling entity within the 
                prior calendar year.
            (2) Administration expenses.--Up to 1 percent of the funds 
        collected in any fiscal year by ERCOT under the provisions of 
        this subsection may be used for the administrative expenses 
        incurred in the determination, collection and remittance of the 
        assessments to the Corporation.
            (3) Audit.--ERCOT shall provide a copy of its annual audit 
        pertaining to the administration of the provisions of this 
        subsection to the Corporation.
            (4) Definitions.--For the purposes of this subsection:
                    (A) The term ``ERCOT'' means the Electric 
                Reliability Council of Texas.
                    (B) The term ``load-serving entities'' has the 
                meaning adopted by ERCOT Protocols and in effect on the 
                date of enactment of this Act.
                    (C) The term ``qualified scheduling entities'' has 
                the meaning adopted by ERCOT Protocols and in effect on 
                the date of enactment of this Act.
                    (D) The term ``renewable energy credit'' has the 
                meaning as promulgated and adopted by the Public 
                Utility Commission of Texas pursuant to section 
                39.904(b) of the Public Utility Regulatory Act of 1999, 
                and in effect on the date of enactment of this Act.
    (f) Determination of Fossil Fuel-Based Electricity Deliveries.--
            (1) Findings.--The Congress finds that:
                    (A) The assessments under subsection (d) are to be 
                collected based on the amount of fossil fuel-based 
                electricity delivered by each distribution utility.
                    (B) Since many distribution utilities purchase all 
                or part of their retail consumer's electricity needs 
                from other entities, it may not be practical to 
                determine the precise fuel mix for the power sold by 
                each individual distribution utility.
                    (C) It may be necessary to use average data, often 
                on a regional basis with reference to Regional 
                Transmission Organization (``RTO'') or NERC regions, to 
                make the determinations necessary for making 
                assessments.
            (2) DOE proposed rule.--The Secretary, acting in close 
        consultation with the Energy Information Administration, shall 
        issue for notice and comment a proposed rule to determine the 
        level of fossil fuel electricity delivered to retail customers 
        by each distribution utility in the United States during the 
        most recent calendar year or other period determined to be most 
        appropriate. Such proposed rule shall balance the need to be 
        efficient, reasonably precise, and timely, taking into account 
        the nature and cost of data currently available and the nature 
        of markets and regulation in effect in various regions of the 
        country. Different methodologies may be applied in different 
        regions if appropriate to obtain the best balance of such 
        factors.
            (3) Final rule.--Within 6 months after the date of 
        enactment of this Act, and after opportunity for comment, the 
        Secretary shall issue a final rule under this subsection for 
        determining the level and type of fossil fuel-based electricity 
        delivered to retail customers by each distribution utility in 
        the United States during the appropriate period. In issuing 
        such rule, the Secretary may consider opportunities and costs 
        to develop new data sources in the future and issue 
        recommendations for the Energy Information Administration or 
        other entities to collect such data. After notice and 
        opportunity for comment the Secretary may, by rule, 
        subsequently update and modify the methodology for making such 
        determinations.
            (4) Annual determinations.--Pursuant to the final rule 
        issued under paragraph (3), the Secretary shall make annual 
        determinations of the amounts and types for each such utility 
        and publish such determinations in the Federal Register. Such 
        determinations shall be used to conduct the referendum under 
        subsection (b) and by the Corporation in applying any 
        assessment under this subsection.
            (5) Rehearing and judicial review.--The owner or operator 
        of any distribution utility that believes that the Secretary 
        has misapplied the methodology in the final rule in determining 
        the amount and types of fossil fuel electricity delivered by 
        such distribution utility may seek rehearing of such 
        determination within 30 days of publication of the 
        determination in the Federal Register. The Secretary shall 
        decide such rehearing petitions within 30 days. The Secretary's 
        determinations following rehearing shall be final and subject 
        to judicial review in the United States Court of Appeals for 
        the District of Columbia.
    (g) Compliance With Corporation Assessments.--The Corporation may 
bring an action in the appropriate court of the United States to compel 
compliance with an assessment levied by the Corporation under this 
section. A successful action for compliance under this subsection may 
also require payment by the defendant of the costs incurred by the 
Corporation in bringing such action.
    (h) Midcourse Review.--Not later than 5 years following 
establishment of the Corporation, the Comptroller General of the United 
States shall prepare an analysis, and report to Congress, assessing the 
Corporation's activities, including project selection and methods of 
disbursement of assessed fees, impacts on the prospects for 
commercialization of carbon capture and storage technologies, adequacy 
of funding, and administration of funds. The report shall also make 
such recommendations as may be appropriate in each of these areas. The 
Corporation shall reimburse the Government Accountability Office for 
the costs associated with performing this midcourse review.
    (i) Recovery of Costs.--
            (1) In general.--A distribution utility whose transmission, 
        delivery, or sales of electric energy are subject to any form 
        of rate regulation shall not be denied the opportunity to 
        recover the full amount of the prudently incurred costs 
        associated with complying with this section, consistent with 
        applicable State or Federal law.
            (2) Ratepayer rebates.--Regulatory authorities that approve 
        cost recovery pursuant to paragraph (1) may order rebates to 
        ratepayers to the extent that distribution utilities are 
        reimbursed undedicated or unassigned balances pursuant to 
        subsection (d)(3).
    (j) Technical Advisory Committee.--
            (1) Establishment.--There is established an advisory 
        committee, to be known as the ``Technical Advisory Committee''.
            (2) Membership.--The Technical Advisory Committee shall be 
        comprised of not less than 7 members appointed by the Board 
        from among academic institutions, national laboratories, 
        independent research institutions, and other qualified 
        institutions. No member of the Committee shall be affiliated 
        with EPRI or with any organization having members serving on 
        the Board. At least one member of the Committee shall be 
        appointed from among officers or employees of the Department of 
        Energy recommended to the Board by the Secretary of Energy.
            (3) Chairperson and vice chairperson.--The Board shall 
        designate one member of the Technical Advisory Committee to 
        serve as Chairperson of the Committee and one to serve as Vice 
        Chairperson of the Committee.
            (4) Compensation.--The Board shall provide compensation to 
        members of the Technical Advisory Committee for travel and 
        other incidental expenses and such other compensation as the 
        Board determines to be necessary.
            (5) Purpose.--The Technical Advisory Committee shall 
        provide independent assessments and technical evaluations, as 
        well as make non-binding recommendations to the Board, 
        concerning Corporation activities, including but not limited to 
        the following:
                    (A) Reviewing and evaluating the Corporation's 
                plans and budgets described in subsection (c)(8), as 
                well as any other appropriate areas, which could 
                include approaches to prioritizing technologies, 
                appropriateness of engineering techniques, monitoring 
                and verification technologies for storage, geological 
                site selection, and cost control measures.
                    (B) Making annual non-binding recommendations to 
                the Board concerning any of the matters referred to in 
                subparagraph (A), as well as what types of investments, 
                scientific research, or engineering practices would 
                best further to the goals of the Corporation.
            (6) Public availability.--All reports, evaluations, and 
        other materials of the Technical Advisory Committee shall be 
        made available to the public by the Board, without charge, at 
        time of receipt by the Board.
    (k) Lobbying Restrictions.--No funds collected by the Corporation 
shall be used in any manner for influencing legislation or elections, 
except that the Corporation may recommend to the Secretary and the 
Congress changes in this section or other statutes that would further 
the purposes of this section.
    (l) Davis-Bacon Compliance.--The Corporation shall ensure that 
entities receiving grants, contracts, or other financial support from 
the Corporation for the project activities authorized by this section 
are in compliance with the Davis-Bacon Act (40 U.S.C. 276a--276a-5).

SEC. 115. COMMERCIAL DEPLOYMENT OF CARBON CAPTURE AND SEQUESTRATION 
              TECHNOLOGIES.

    (a) Regulations.--Not later than 2 years after the date of 
enactment of this title, the Administrator shall promulgate regulations 
providing for the distribution of emission allowances allocated 
pursuant to section 782(f), pursuant to the requirements of this 
section, to support the commercial deployment of carbon capture and 
sequestration technologies in both electric power generation and 
industrial operations.
    (b) Eligibility Criteria.--To be eligible to receive emission 
allowances under this section, the owner of a project must--
            (1) implement carbon capture and sequestration technology--
                    (A) at an electric generating unit that--
                            (i) has a nameplate capacity of 200 
                        megawatts or more;
                            (ii) derives at least 50 percent of its 
                        annual fuel input from coal, petroleum coke, or 
                        any combination of these 2 fuels; and
                            (iii) upon implementation of capture and 
                        sequestration technology, will capture and 
                        permanently sequester at least 50 percent of 
                        the carbon dioxide, measured on an annual 
                        basis, that would be emitted by the unit absent 
                        capture and sequestration technology; or
                    (B) at an industrial source that--
                            (i) injects for sequestration not less than 
                        50,000 tons per year of carbon dioxide;
                            (ii) upon implementation, will capture and 
                        permanently sequester at least 50 percent of 
                        the carbon dioxide produced by the source, 
                        measured on an annual basis, that would be 
                        emitted in the absence of capture and 
                        sequestration technology; and
                            (iii) does not produce a liquid 
                        transportation fuel from a solid fossil-based 
                        feedstock;
            (2) permanently sequester carbon dioxide at a site that 
        meets all applicable permitting and certification requirements 
        for geologic sequestration, or, pursuant to such requirements 
        as the Administrator may prescribe by regulation, convert 
        captured carbon dioxide to a stable form that will safely and 
        permanently sequester such carbon dioxide;
            (3) meet all other applicable State and Federal permitting 
        requirements; and
            (4) be located in the United States.
    (c) Phase I Distribution to Electric Generating Units.--
            (1) Application.--This subsection shall apply only to 
        projects at the first 6 gigawatts of electric generating units, 
        measured in cumulative generating capacity of such units.
            (2) Distribution.--The Administrator shall distribute 
        emission allowances allocated under section 782(a)(f) to each 
        eligible project at an electric generating unit in a quantity 
        equal to the quotient obtained by dividing--
                    (A) the product obtained by multiplying--
                            (i) the number of metric tons of carbon 
                        dioxide emissions avoided through capture and 
                        sequestration of emissions by the project, as 
                        determined pursuant to such methodology as the 
                        Administrator shall prescribe by regulation; 
                        and
                            (ii) a bonus allowance value, pursuant to 
                        paragraph (3); by
                    (B) the average fair market value of an emission 
                allowance during the preceding year.
            (3) Bonus allowance values.--
                    (A) For a generating unit achieving the capture and 
                sequestration of 85 percent or more of the carbon 
                dioxide that otherwise would be emitted by such unit, 
                the bonus allowance value shall be $90.
                    (B) The Administrator shall by regulation establish 
                a bonus allowance value for each rate of lower capture 
                and sequestration achieved by a generating unit, from a 
                minimum of $50 per ton for a 50 percent rate and 
                varying directly with increasing rates of capture and 
                sequestration up to $90 per ton for an 85 percent rate.
                    (C) For a generating unit that achieves the capture 
                and sequestration of at least 50 percent of the carbon 
                dioxide that otherwise would be emitted by such unit by 
                not later than January 1, 2017, the otherwise 
                applicable bonus allowance value under this paragraph 
                shall be increased by $10, provided that the owner of 
                such unit notifies the Administrator of its intent to 
                achieve such rate of capture and sequestration by not 
                later than January 1, 2012.
                    (D) For a carbon capture and sequestration project 
                sequestering in a geological formation for purposes of 
                enhanced hydrocarbon recovery, the Administrator shall, 
                by regulation, reduce the applicable bonus allowance 
                value under this paragraph to reflect the lower net 
                cost of the project when compared to sequestration into 
                geological formations solely for purposes of 
                sequestration.
                    (E) All monetary values in this section shall be 
                adjusted for inflation.
    (d) Phase II Distribution to Electric Generating Units.--
            (1) Application.--This subsection shall apply only to the 
        distribution of emission allowances to carbon capture and 
        sequestration projects at electric generating units after the 
        capacity threshold identified in subsection (c)(1) is reached.
            (2) Regulations.--Not later than 2 years prior to the date 
        on which the capacity threshold identified in subsection (c)(1) 
        is projected to be reached, the Administrator shall promulgate 
        regulations to govern the distribution of emission allowances 
        to eligible projects under this subsection.
            (3) Reverse auctions.--
                    (A) In general.--Except as provided in paragraph 
                (4), the regulations promulgated under paragraph (2) 
                shall provide for the distribution of emission 
                allowances to eligible projects under this subsection 
                through reverse auctions, which shall be held no less 
                frequently than once each calendar year. The 
                Administrator may establish a separate auction for each 
                of no more than 5 different project categories, defined 
                on the basis of coal type, capture technology, 
                geological formation type, new unit versus retrofit 
                application, such other factors as the Administrator 
                may prescribe, or any combination thereof. The 
                Administrator may establish appropriate minimum rates 
                of capture and sequestration in implementing this 
                paragraph.
                    (B) Auction process.--At each reverse auction--
                            (i) the Administrator shall solicit bids 
                        from eligible entities;
                            (ii) eligible entities participating in the 
                        auction shall submit a bid including the 
                        desired level of carbon dioxide sequestration 
                        incentive per ton and the estimated quantity of 
                        carbon dioxide that the project will 
                        permanently sequester over 10 years; and
                            (iii) the Administrator shall select bids, 
                        within each auction, for the sequestration 
                        amount submitted, beginning with the eligible 
                        entity submitting the bid for the lowest level 
                        of sequestration incentive on a per ton basis 
                        and meeting such other requirements as the 
                        Administrator may specify, until the amount of 
                        funds available for the reverse auction is 
                        committed.
                    (C) Form of distribution.--The Administrator shall 
                provide deployment incentives to eligible entities 
                selected through a reverse auction under this paragraph 
                pursuant to a formula equivalent to that described in 
                subsection (c)(2), except that the incentive level that 
                is bid by the entity shall be substituted for the bonus 
                allowance value.
            (4) Alternative distribution method.--
                    (A) In general.--If the Administrator determines 
                that reverse auctions would not provide for efficient 
                and cost-effective commercial deployment of carbon 
                capture and sequestration technologies, the 
                Administrator may instead, through regulations 
                promulgated under paragraph (2) or (5), prescribe a 
                schedule for the award of bonus allowances to eligible 
                projects under this subsection, in accord with the 
                requirements of this paragraph.
                    (B) Multiple tranches.--The Administrator shall 
                divide emission allowances available for distribution 
                to eligible projects into a series of tranches, each 
                supporting the deployment of a specified quantity of 
                cumulative electric generating capacity utilizing 
                carbon capture and sequestration technology, each of 
                which shall not be greater than 6 gigawatts.
                    (C) Method of distribution.--The Administrator 
                shall distribute emission allowances within each 
                tranche, on a first-come, first-served basis--
                            (i) based on the date of full-scale 
                        operation of capture and sequestration 
                        technology; and
                            (ii) pursuant to a formula, similar to that 
                        set forth in subsection (c)(2) (except that the 
                        Administrator shall prescribe bonus allowance 
                        values different than those set forth in 
                        subsection (c)(2)), establishing the number of 
                        allowances to be distributed per ton of carbon 
                        dioxide permanently sequestered by the project.
                    (D) Requirements.--For each tranche established 
                pursuant to subparagraph (A), the Administrator shall 
                establish a schedule for distributing emission 
                allowances that--
                            (i) is based on a sliding scale that 
                        provides higher bonus allowance values for 
                        projects achieving higher rates of capture and 
                        sequestration;
                            (ii) for each capture and sequestration 
                        rate, establishes a bonus allowance value that 
                        is lower than that established for such rate in 
                        the previous tranche (or, in the case of the 
                        first tranche, than that established for such 
                        rate under subsection (c)(1)); and
                            (iii) may establish different bonus 
                        allowance levels for no more than 5 different 
                        project categories, defined by coal type, 
                        capture technology, geological formation type, 
                        new unit versus retrofit application, such 
                        other factors as the Administrator may 
                        prescribe, or any combination thereof.
                    (E) Criteria for establishing bonus allowance 
                values.--In setting bonus allowance values under this 
                paragraph, the Administrator shall seek to cover no 
                more than the reasonable incremental capital and 
                operating costs of a project that are attributable to 
                implementation of carbon capture, transportation, and 
                sequestration technologies, taking into account--
                            (i) the reduced cost of compliance with 
                        section 722 of this Act;
                            (ii) the reduced cost associated with 
                        sequestering in a geological formation for 
                        purposes of enhanced hydrocarbon recovery when 
                        compared to sequestration into geological 
                        formations solely for purposes of 
                        sequestration;
                            (iii) the relevant factors defining the 
                        project category; and
                            (iv) such other factors as the 
                        Administrator determines are appropriate.
            (5) Revision of regulations.--The Administrator shall 
        review, and as appropriate revise, the applicable regulations 
        under this subsection no less frequently than every 8 years.
    (e) Limits for Certain Electric Generating Units.--
            (1) Definitions.--For purposes of this subsection, the 
        terms ``covered EGU'' and ``initially permitted'' shall have 
        the meaning given those terms in section 812 of this Act.
            (2) Covered egus initially permitted from 2009 through 
        2015.--For a covered EGU that is initially permitted on or 
        after January 1, 2009, and before January 1, 2015, the 
        Administrator shall reduce the quantity of emission allowances 
        that such covered EGU would otherwise be eligible to receive 
        under this section by the product of--
                    (A) 20 percent; and
                    (B) the number of years between--
                            (i) the earlier of January 1, 2020, or the 
                        date that is 5 years after the commencement of 
                        operation of such covered EGU; and
                            (ii) the first year that such covered EGU 
                        achieves (and thereafter maintains) the capture 
                        and permanent sequestration of at least 50 
                        percent of the carbon dioxide, measured on an 
                        annual basis, that such covered EGU would emit 
                        in the absence of carbon capture and 
                        sequestration technology.
            (3) Covered egus initially permitted from 2015 through 
        2020.--A covered EGU that is initially permitted on or after 
        January 1, 2015, and before January 1, 2020, shall be 
        ineligible to receive emission allowances pursuant to this 
        section if such unit, upon commencement of operations or 
        thereafter, does not achieve and maintain the capture and 
        permanent sequestration of at least 50 percent of the carbon 
        dioxide, measured on an annual basis, that such covered EGU 
        would emit in the absence of capture and sequestration 
        technology.
    (f) Industrial Sources.--
            (1) Allowances.--The Administrator may distribute not more 
        than 15 percent of the allowances allocated under section 
        782(a)(f) for any vintage year to eligible industrial sources 
        to support the commercial-scale deployment of carbon capture 
        and sequestration technologies at such sources.
            (2) Distribution.--The Administrator shall, by regulation, 
        prescribe requirements for the distribution of emission 
        allowances to industrial sources under this subsection, based 
        on a bonus allowance formula that awards allowances to 
        qualifying projects on the basis of tons of carbon dioxide 
        captured and permanently sequestered. The Administrator may 
        provide for the distribution of emission allowances pursuant 
        to--
                    (A) a reverse auction method, similar to that 
                described under subsection (d)(3), including the use of 
                separate auctions for different project categories; or
                    (B) an incentive schedule, similar to that 
                described under subsection (d)(4), which shall ensure 
                that incentives are set so as to satisfy the 
                requirement described in subsection (d)(4)(E).
            (3) Revision of regulations.--The Administrator shall 
        review, and as appropriate revise, the applicable regulations 
        under this subsection no less frequently than every 8 years.
    (g) Limitations.--A qualifying project may receive annual emission 
allowances under this section only for the first 10 years of operation. 
No greater than 72 gigawatts of total cumulative generating capacity 
(including industrial applications, measured by such equivalent metric 
as the Administrator may designate) may receive emission allowances 
under this section. Upon reaching the limit described in the preceding 
sentence, the Administrator shall auction, pursuant to section 791, any 
emission allowances that are allocated for carbon capture and 
sequestration deployment under section 782(a)(f) and are not yet 
obligated under this section.
    (h) Exhaustion of Account and Annual Roll-Over of Surplus 
Allowances.--
            (1) In distributing bonus allowances under this subsection, 
        the Administrator shall ensure that qualifying projects 
        receiving allowances receive distributions for 10 years.
            (2) If the Administrator determines that the allowances 
        allocated under section 782(a)(f) with a vintage year that 
        matches the year of distribution will be exhausted once the 
        estimated full 10-year distributions will be provided to 
        current eligible participants, the Administrator shall provide 
        to new eligible projects allowances from vintage years after 
        the year of the distribution.
    (i) Davis-Bacon Compliance.--All laborers and mechanics employed on 
projects funded directly by or assisted in whole or in part by this 
section through the use of bonus allowances shall be paid wages at 
rates not less than those prevailing on projects of a character similar 
in the locality as determined by the Secretary of Labor in accordance 
with subchapter IV, chapter 31, part A of subtitle II of title 40, 
United States Code. With respect to the labor standards specified in 
this section, the Secretary of Labor shall have the authority and 
functions set forth in Reorganization Plan Numbered 14 of 1950 (64 
Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40, United States 
Code.

SEC. 116. PERFORMANCE STANDARDS FOR COAL-FUELED POWER PLANTS.

    (a) In General.--Title VIII of the Clean Air Act (as added by 
section 331 of this Act) is amended by adding the following new section 
after section 811:

``SEC. 812. PERFORMANCE STANDARDS FOR NEW COAL-FIRED POWER PLANTS.

    ``(a) Definitions.--For purposes of this section:
            ``(1) Covered egu.--The term `covered EGU' means a utility 
        unit that is required to have a permit under section 503(a) and 
        is authorized under state or federal law to derive at least 30 
        percent of its annual heat input from coal, petroleum coke, or 
        any combination of these fuels.
            ``(2) Initially permitted.--The term `initially permitted' 
        means that the owner or operator has received a Clean Air Act 
        preconstruction approval or permit, for the covered EGU as a 
        new (not a modified) source, but administrative review or 
        appeal of such approval or permit has not been exhausted. A 
        subsequent modification of any such approval or permits, 
        ongoing administrative or court review, appeals, or challenges, 
        or the existence or tolling of any time to pursue further 
        review, appeals, or challenges shall not affect the date on 
        which a covered EGU is considered to be initially permitted 
        under this paragraph.
    ``(b) Standards.--(1) A covered EGU that is initially permitted on 
or after January 1, 2020, shall achieve an emission limit that is a 65 
percent reduction in emissions of the carbon dioxide  produced by the  
unit, as measured on an annual basis, or meet such more stringent 
standard as the Administrator may establish pursuant to subsection (c). 
In determining compliance with this subsection, the Administrator shall 
assume an energy penalty of the carbon dioxide capture system of no 
greater than 15 percent.
    ``(2) A covered EGU that is initially permitted after January 1, 
2009, and before January 1, 2020, shall, by the applicable compliance 
date established under this paragraph, shall achieve an emission limit 
that is a 50 percent reduction in emissions of the carbon dioxide  
produced by the  unit, as measured on an annual basis. In determining 
compliance with this subsection, the Administrator shall assume an 
energy penalty of the carbon dioxide capture system of no greater than 
15 percent. Compliance with the requirement set forth in this paragraph 
shall be required by the earliest of the following:
            ``(A) Four years after the date the Administrator issues a 
        determination that there are in commercial operation in the 
        United States electric generating units equipped with carbon 
        capture and sequestration technology that, in the aggregate--
                    ``(i) have a total of at least 4 gigawatts of 
                nameplate generating capacity of which--
                            ``(I) at least 3 gigawatts must be electric 
                        generating units; and
                            ``(II) up to 1 gigawatt may be industrial 
                        applications, for which capture and 
                        sequestration of 3 million tons of carbon 
                        dioxide per year on an aggregate annualized 
                        basis shall be considered equivalent to 1 
                        gigawatt;
                    ``(ii) include at least 2 electric generating 
                units, each with a nameplate generating capacity of 250 
                megawatts or greater, that inject carbon dioxide into 
                geologic formations other than oil and gas fields; and
                    ``(iii) are capturing and sequestering in the 
                aggregate at least 12 million tons of carbon dioxide 
                per year, calculated on an aggregate annualized basis.
            ``(B) January 1, 2025.
    ``(3) If the deadline for compliance with paragraph (2) is January 
1, 2025, the Administrator may extend the deadline for compliance by a 
covered EGU by up to 18 months if the Administrator makes a 
determination, based on a showing by the owner or operator of the unit, 
that it will be technically infeasible for the unit to meet the 
standard by the deadline. The owner or operator must submit a request 
for such an extension by no later than January 1, 2022, and the 
Administrator shall provide for public notice and comment on the 
extension request.
    ``(c) Review and Revision of Standards.--Not later than 2025 and at 
5-year intervals thereafter, the Administrator shall review the 
standards for new covered EGUs under this section and shall, by rule, 
reduce the maximum carbon dioxide emission rate for new covered EGUs to 
a rate which reflects the degree of emission limitation achievable 
through the application of the best system of emission reduction which 
(taking into account the cost of achieving such reduction and any 
nonair quality health and environmental impact and energy requirements) 
the Administrator determines has been adequately demonstrated.''.

                    Subtitle C--Clean Transportation

SEC. 121. ELECTRIC VEHICLE INFRASTRUCTURE.

    (a) Amendment of PURPA.--Section 111(d) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by 
adding at the end the following:
            ``(20) Plug-in electric drive vehicle infrastructure.--
                    ``(A) Utility plan for infrastructure.--Each 
                electric utility shall develop a plan to support the 
                use of plug-in electric drive vehicles, including 
                heavy-duty hybrid electric vehicles. The plan may 
                provide for deployment of electrical charging stations 
                in public or private locations, including street 
                parking, parking garages, parking lots, homes, gas 
                stations, and highway rest stops. Any such plan may 
                also include--
                            ``(i) battery exchange, fast charging 
                        infrastructure and other services;
                            ``(ii) triggers for infrastructure 
                        deployment based upon market penetration of 
                        plug-in electric drive vehicles; and
                            ``(iii) such other elements as the State 
                        determines necessary to support plug-in 
                        electric drive vehicles.
                Each plan under this paragraph shall provide for the 
                deployment of the charging infrastructure or other 
                infrastructure necessary to adequately support the use 
                of plug-in electric drive vehicles.
                    ``(B) Support requirements.--Each State regulatory 
                authority (in the case of each electric utility for 
                which it has ratemaking authority) and each utility (in 
                the case of a nonregulated utility) shall--
                            ``(i) require that charging infrastructure 
                        deployed is interoperable with products of all 
                        auto manufacturers to the extent possible; and
                            ``(ii) consider adopting minimum 
                        requirements for deployment of electrical 
                        charging infrastructure and other appropriate 
                        requirements necessary to support the use of 
                        plug-in electric drive vehicles.
                    ``(C) Cost recovery.--Each State regulatory 
                authority (in the case of each electric utility for 
                which it has ratemaking authority) and each utility (in 
                the case of a nonregulated utility) shall consider 
                whether, and to what extent, to allow cost recovery for 
                plans and implementation of plans.
                    ``(D) Smart grid integration.--The State regulatory 
                authority (in the case of each electric utility for 
                which it has ratemaking authority) and each utility (in 
                the case of a nonregulated utility) shall, in 
                accordance with regulations issued by the Federal 
                Energy Regulatory Commission pursuant to section 
                1305(d) of the Energy Independence and Security Act of 
                2007--
                            ``(i) establish any appropriate protocols 
                        and standards for integrating plug-in electric 
                        drive vehicles into an electrical distribution 
                        system, including Smart Grid systems and 
                        devices as described in title XIII of the 
                        Energy Independence and Security Act of 2007;
                            ``(ii) include, to the extent feasible, the 
                        ability for each plug-in electric drive vehicle 
                        to be identified individually and to be 
                        associated with its owner's electric utility 
                        account, regardless of the location that the 
                        vehicle is plugged in, for purposes of 
                        appropriate billing for any electricity 
                        required to charge the vehicle's batteries as 
                        well as any crediting for electricity provided 
                        to the electric utility from the vehicle's 
                        batteries; and
                            ``(iii) review the determination made in 
                        response to section 1252 of the Energy Policy 
                        Act of 2005 in light of this section, including 
                        whether time-of-use pricing should be employed 
                        to enable the use of plug-in electric drive 
                        vehicles to contribute to meeting peak-load and 
                        ancillary service power needs.''.
    (b) Compliance.--
            (1) Time limitations.--Section 112(b) of the Public Utility 
        Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is amended 
        by adding the following at the end thereof:
            ``(7)(A) Not later than 3 years after the date of enactment 
        of this paragraph, each State regulatory authority (with 
        respect to each electric utility for which it has ratemaking 
        authority) and each nonregulated utility shall commence the 
        consideration referred to in section 111, or set a hearing date 
        for consideration, with respect to the standard established by 
        paragraph (20) of section 111(d).
            ``(B) Not later than 4 years after the date of enactment of 
        the this paragraph, each State regulatory authority (with 
        respect to each electric utility for which it has ratemaking 
        authority), and each nonregulated electric utility, shall 
        complete the consideration, and shall make the determination, 
        referred to in section 111 with respect to the standard 
        established by paragraph (20) of section 111(d).''.
            (2) Failure to comply.--Section 112(c) of the Public 
        Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is 
        amended by adding the following at the end: ``In the case of 
        the standards established by paragraph (20) of section 111(d), 
        the reference contained in this subsection to the date of 
        enactment of this Act shall be deemed to be a reference to the 
        date of enactment of such paragraph.''.
            (3) Prior state actions.--Section 112(d) of the Public 
        Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(d)) is 
        amended by striking ``(19)'' and inserting ``(20)'' before ``of 
        section 111(d)''.

SEC. 122. LARGE-SCALE VEHICLE ELECTRIFICATION PROGRAM.

    (a) Deployment Program.--The Secretary of Energy shall establish a 
program to deploy and integrate plug-in electric drive vehicles into 
the electricity grid in multiple regions. In carrying out the program, 
the Secretary may provide financial assistance described under 
subsection (d), consistent with the goals under subsection (b). The 
Secretary shall select regions based upon applications for assistance 
received pursuant to subsection (c).
    (b) Goals.--The goals of the program established pursuant to 
subsection (a) shall be--
            (1) to demonstrate the viability of a vehicle-based 
        transportation system that is not overly dependent on petroleum 
        as a fuel and contributes to lower carbon emissions than a 
        system based on conventional vehicles;
            (2) to facilitate the integration of advanced vehicle 
        technologies into electricity distribution areas to improve 
        system performance and reliability;
            (3) to demonstrate the potential benefits of coordinated 
        investments in vehicle electrification on personal mobility and 
        a regional grid;
            (4) to demonstrate protocols and standards that facilitate 
        vehicle integration into the grid; and
            (5) to investigate differences in each region and 
        regulatory environment regarding best practices in implementing 
        vehicle electrification.
    (c) Applications.--Any State, Indian tribe, or local government (or 
group of State, Indian tribe, or local governments) may apply to the 
Secretary of Energy for financial assistance in furthering the regional 
deployment and integration into the electricity grid of plug-in 
electric drive vehicles. Such applications may be jointly sponsored by 
electric utilities, automobile manufacturers, technology providers, car 
sharing companies or organizations, or other persons or entities.
    (d) Use of Funds.--Pursuant to applications received under 
subsection (c), the Secretary may make financial assistance available 
to any applicant or joint sponsor of the application to be used for any 
of the following:
            (1) Assisting persons located in the regional deployment 
        area, including fleet owners, in the purchase of new plug-in 
        electric drive vehicles by offsetting in whole or in part the 
        incremental cost of such vehicles above the cost of comparable 
        conventionally fueled vehicles.
            (2) Supporting the use of plug-in electric drive vehicles 
        by funding projects for the deployment of any of the following:
                    (A) Electrical charging infrastructure for plug-in 
                electric drive vehicles, including battery exchange, 
                fast charging infrastructure, and other services, in 
                public or private locations, including street parking, 
                parking garages, parking lots, homes, gas stations, and 
                highway rest stops.
                    (B) Smart Grid equipment and infrastructure, as 
                described in title XIII of the Energy Independence and 
                Security Act of 2007, to facilitate the charging and 
                integration of plug-in electric drive vehicles.
            (3) Such other projects as the Secretary determines 
        appropriate to support the large-scale deployment of plug-in 
        electric drive vehicles in regional deployment areas.
    (e) Program Requirements.--The Secretary, in consultation with the 
Administrator and the Secretary of Transportation, shall determine 
design elements and requirements of the program established pursuant to 
subsection (a), including--
            (1) the type of financial mechanism with which to provide 
        financial assistance;
            (2) criteria for evaluating applications submitted under 
        subsection (c), including the anticipated ability to promote 
        deployment and market penetration of vehicles that are less 
        dependent on petroleum as fuel source; and
            (3) reporting requirements for entities that receive 
        financial assistance under this section, including a 
        comprehensive set of performance data characterizing the 
        results of the deployment program.
    (f) Information Clearinghouse.--The Secretary shall, as part of the 
program established pursuant to subsection (a), collect and make 
available to the public information regarding the cost, performance, 
and other technical data regarding the deployment and integration of 
plug-in electric drive vehicles.
    (g) Authorization.--There are authorized to be appropriated to 
carry out this section such sums as may be necessary.

SEC. 123. PLUG-IN ELECTRIC DRIVE VEHICLE MANUFACTURING.

    (a) Vehicle Manufacturing Assistance Program.--The Secretary of 
Energy shall establish a program to provide financial assistance to 
automobile manufacturers to facilitate the manufacture of plug-in 
electric drive vehicles, as defined in section 131(a)(5) of the Energy 
Independence and Security Act of 2007, that are developed and produced 
in the United States.
    (b) Financial Assistance.--The Secretary of Energy may provide 
financial assistance to an automobile manufacturer under the program 
established pursuant to subsection (a) for--
            (1) the reconstruction or retooling of facilities for the 
        manufacture of plug-in electric drive vehicles that are 
        developed and produced in the United States; and
            (2) if appropriate, the purchase of domestically produced 
        vehicle batteries to be used in the manufacture of vehicles 
        manufactured pursuant to paragraph (1).
    (c) Requirements.--The Secretary may provide financial assistance 
under subsection (b) to an automobile manufacturer if--
            (1) in the case of a reconstruction or retooling described 
        under subsection (b)(1), without financial assistance the 
        automobile manufacturer is not able to reasonably finance the 
        reconstruction or retooling of a facility; or
            (2) in the case of battery purchases described under 
        subsection (b)(2), without financial assistance, the automobile 
        manufacturer is not able to reasonably finance the purchase of 
        such batteries.
    (d) Coordination With Regional Deployment.--The Secretary may 
provide financial assistance under subsection (b) in conjunction with 
the award of financial assistance under the large scale vehicle 
electrification program established pursuant to section 122 of this 
Act.
    (e) Program Requirements.--The Secretary shall determine design 
elements and requirements of the program established pursuant to 
subsection (a), including--
            (1) the type of financial mechanism with which to provide 
        financial assistance;
            (2) criteria, in addition to the criteria described under 
        subsection (f), for evaluating applications for financial 
        assistance; and
            (3) reporting requirements for automobile manufacturers 
        that receive financial assistance under this section.
    (f) Criteria.--In selecting recipients of financial assistance from 
among applicant automobile manufacturers, the Secretary shall give 
preference to proposals that--
            (1) are most likely to be successful; and
            (2) are located in local markets that have the greatest 
        need for the facility.
    (g) Reports.--The Secretary shall annually submit to Congress a 
report on the program established pursuant to this section.
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 124. INVESTMENT IN CLEAN VEHICLES.

    (a) Definitions.--In this section:
            (1) Advanced technology vehicles and qualifying 
        components.--The terms ``advanced technology vehicles'' and 
        ``qualifying components'' shall have the definition of such 
        terms in section 136 of the Energy Independence and Security 
        Act of 2007, except that for purposes of this section, the 
        average base year as described section 136(a)(1)(C) shall be 
        the following:
                    (A) in each of the years 2012 through 2016, the 
                average base year shall be model year 2009; and
                    (B) in 2017, the Administrator shall, 
                notwithstanding section 136(a)(1)(C), determine an 
                appropriate baseline based on technological and 
                economic feasibility.
            (2) Plug-in electric drive vehicle.--The term ``plug-in 
        electric drive vehicle'' shall have the definition of such term 
        in section 131 of the Energy Independence and Security Act of 
        2007.
    (b) Distribution of Allowances.--The Administrator shall, in 
accordance with this section, distribute allowances allocated pursuant 
to section 782(i) of the Clean Air Act not later than October 31 of 
2012 and each calendar year thereafter through 2025.
    (c) Plug-In Electric Drive Vehicle Manufacturing and Deployment.--
            (1) In general.--The Administrator shall, at the direction 
        of the Secretary of Energy, provide allowances allocated 
        pursuant to section [782(i)] to applicants, joint sponsors and 
        automobile manufacturers pursuant to sections 122 and 123 of 
        this Act.
            (2) Annual amount.--In each of the years 2012 through 2017, 
        one-quarter of the portion of the allowances allocated pursuant 
        to section 782(i) of the Clean Air Act shall be available to 
        carry out paragraph (1) such that--
                    (A) one-eighth of the portion shall be available to 
                carry out section 122; and
                    (B) one-eighth of the portion shall be available to 
                carry out section 123.
            (3) Preference.--In directing the provision of allowances 
        under this subsection, the Secretary shall give preference to 
        applications under section 122(c) that are jointly sponsored by 
        one or more automobile manufacturers.
            (4) Multi-year commitments.--The Administrator shall commit 
        to providing allowances to an applicant, joint sponsor or 
        automobile manufacturer for up to five consecutive years if--
                    (A) an application under section 122 or 123 of this 
                Act requests a multi-year commitment;
                    (B) such application meets the criteria for support 
                established by the Secretary of Energy under sections 
                122 or 123 of this Act;
                    (C) the Administrator confirms to the Secretary 
                that allowances will be available for a multi-year 
                commitment;
                    (D) the Secretary of Energy determines that a 
                multi-year commitment for such application will advance 
                the goals of section 122 or 123; and
                    (E) the Secretary of Energy directs the 
                Administrator to make a multi-year commitment.
            (5) Insufficient applications.--If, in any year, allowances 
        available under paragraph (2) cannot be provided because of 
        insufficient numbers of submitted applications that meet the 
        criteria for support established by the Secretary of Energy 
        under sections 122 or 123 of this Act, the remaining allowances 
        shall be distributed according to subsection (d).
    (d) Advanced Technology Vehicles.--
            (1) In general.--The Administrator shall, at the direction 
        of the Secretary of Energy, provide any allowances allocated 
        pursuant to section 782(i) of the Clean Air Act that are not 
        provided under subsection (c) to automobile manufacturers and 
        component suppliers to pay not more than 30 percent of the cost 
        of--
                    (A) reequipping, expanding, or establishing a 
                manufacturing facility in the United States to 
                produce--
                            (i) qualifying advanced technology 
                        vehicles; or
                            (ii) qualifying components; and
                    (B) engineering integration performed in the United 
                States of qualifying vehicles and qualifying 
                components.
            (2) Preference.--In directing the provision of allowances 
        under this subsection during the years 2012 through 2017, the 
        Secretary shall give preference to applications for projects 
        that save the maximum number of gallons per vehicle.

     Subtitle D--State Energy and Environment Development Accounts

SEC. 131. ESTABLISHMENT OF SEED ACCOUNTS.

    (a) Definitions.--In this section:
            (1) SEED account.--The term ``SEED Account'' means a State 
        Energy and Environment Development Account established pursuant 
        to this section.
            (2) State energy office.--The term ``State Energy Office'' 
        means a State entity eligible for grants under part D of title 
        III of the Energy Policy and Conservation Act (42 U.S.C. 6321 
        et seq.).
    (b) Establishment of Program.--The Administrator shall establish a 
program under which a State, through its State Energy Office or other 
State agency designated by the State, may create a State Energy and 
Environment Development Account.
    (c) Purpose.--The purpose of each SEED Account is to serve as a 
common State-level repository for managing and accounting for emission 
allowances provided to States designated for renewable energy and 
energy efficiency purposes.
    (d) Regulations.--Not later than one year after the date of 
enactment of this Act, the Administrator shall promulgate regulations 
to carry out this section, including regulations--
            (1) to ensure that each State operates its SEED Account and 
        any subaccounts thereof efficiently and in accordance with this 
        Act and applicable State and Federal laws;
            (2) to prevent waste, fraud, and abuse;
            (3) to indicate the emission allowances that may be 
        deposited in a State's SEED Account pending distribution or 
        use;
            (4) to indicate the programs and objectives authorized by 
        Federal law for which emission allowances in a SEED Account may 
        be distributed or used;
            (5) to identify the forms of financial assistance and 
        incentives that States may provide through distribution or use 
        of SEED Accounts; and
            (6) to prescribe the form and content of reports that the 
        States are required to submit under this section on the use of 
        SEED Accounts.
    (e) Operation.--
            (1) Deposits.--
                    (A) In general.--Except as required pursuant to 
                subparagraph (B), a State shall deposit into its SEED 
                Account all allowances received from the Administrator 
                for renewable energy and energy efficiency purposes, 
                pursuant to this Act.
                    (B) A State may create a financial account 
                associated with its SEED Account to deposit, retain, 
                and manage any proceeds of any sale of any allowance 
                provided pursuant to this Act pending expenditure or 
                disbursement of those proceeds for purposes permitted 
                under this section. The funds in such an account shall 
                not be commingled with other funds not derived from the 
                sale of allowances provided to the State; however, 
                loans made by the State from such funds pursuant to 
                paragraph (2)(C)(i) may be repaid into such a financial 
                account, including any interest charged.
            (2) Withdrawals.--
                    (A) In general.--All allowances distributed or 
                withdrawn from SEED Accounts, including the proceeds of 
                any sale or such allowances, shall support renewable 
                energy and energy efficiency programs authorized or 
                approved by the Federal Government.
                    (B) Dedicated allowances.--Allowances deposited in 
                a SEED Account that are required by law to be used for 
                specific purposes for a specified period shall be used 
                according to those requirements during that period.
                    (C) Undedicated allowances.--To the extent that 
                allowances deposited in a SEED Account are not required 
                by law to be used for specific purposes for a specified 
                period as described in subparagraph (B), such 
                allowances or the proceeds of their sale may be used 
                for any of the following purposes:
                            (i) Loans.--Loans of allowances, or the 
                        proceeds from the sale of allowances, may be 
                        provided, interest on commercial loans may be 
                        subsidized at an interest rate as low as zero, 
                        and other credit support may be provided to 
                        support programs authorized to use SEED Account 
                        allowance value or any other renewable energy 
                        or energy efficiency purpose authorized or 
                        approved by the Federal Government.
                            (ii) Grants.--Grants of allowances or the 
                        proceeds of their sale may be provided to 
                        support programs authorized to use SEED Account 
                        allowance value or any other renewable energy 
                        or energy efficiency purpose authorized or 
                        approved by the Federal Government.
                            (iii) Other forms of support.--Allowances 
                        or the proceeds of the sale of allowances may 
                        be provided for other forms of support for 
                        programs authorized to use SEED Account 
                        allowance value or any other renewable energy 
                        or energy efficiency purpose authorized or 
                        approved by the Federal Government.
                            (iv) Administrative costs.--Except to the 
                        extent provided in Federal law authorizing or 
                        allocating allowances deposited in a SEED 
                        Account, not more than 5 percent of the 
                        allowance value in a SEED Account in any year 
                        may be used to cover administrative expenses of 
                        the SEED Account.
                    (D) Subaccounts.--A State may create and maintain 
                subaccounts for local governments that request such 
                subaccounts to hold allowances distributed to local 
                governments for renewable energy or energy efficiency 
                programs authorized or approved by the Federal 
                Government.
                    (E) Intended use plans.--
                            (i) In general.--After providing for public 
                        review and comment, each State administering a 
                        SEED Account shall annually prepare a plan that 
                        identifies the intended uses of the allowances 
                        or proceeds from the sale of allowances in its 
                        SEED Account.
                            (ii) Contents.--An intended use plan shall 
                        include--
                                    (I) a list of the projects or 
                                programs for which withdrawals from the 
                                SEED Account are intended in the next 
                                fiscal year that begins after the date 
                                of the plan, including a description of 
                                each project;
                                    (II) the relationship of each of 
                                the projects or programs to an 
                                identified Federal purpose authorized 
                                by this Act, or any other Federal 
                                statute;
                                    (III) the expected terms of use of 
                                allowance value to provide assistance;
                                    (IV) the criteria and methods 
                                established for the distribution of 
                                allowances or allowance value;
                                    (V) a description of the equivalent 
                                financial value and status of the SEED 
                                Account; and
                                    (VI) a statement of the mid-term 
                                and long-term goals of the State for 
                                use of its SEED Account.
            (3) Accountability and transparency.--
                    (A) Controls and procedures.--Any State that has 
                established a SEED Account shall establish fiscal 
                controls and recordkeeping and accounting procedures 
                for the SEED Account sufficient to ensure proper 
                accounting during appropriate accounting periods for 
                deposits into the SEED Account, withdrawals from the 
                SEED Account, and SEED Account balances, including any 
                subaccounts or related financial accounts. Such 
                controls and procedures shall conform to generally 
                accepted government accounting principles. Any State 
                that has established a SEED Account shall retain 
                records for a period of at least 5 years.
                    (B) Audits.--Any State that has established a SEED 
                Account shall have an annual audit conducted of the 
                SEED Account by an independent public accountant in 
                accordance with generally accepted auditing standards, 
                and shall transmit the results of that audit to the 
                Administrator.
                    (C) State report.--Each State administering a SEED 
                Account shall make publicly available and submit to the 
                Secretary a report every 2 years on its activities 
                related to its SEED Account.
                    (D) Public information.--Any--
                            (i) controls and procedures established 
                        under subparagraph (A); and
                            (ii) information obtained through audits 
                        conducted under subparagraph (B), except to the 
                        extent that it would be protected from 
                        disclosure, if it were information held by the 
                        Federal Government, under section 552(b) of 
                        title 5, United States Code,
                shall be made publicly available.
                    (E) Other protections.--The Administrator shall 
                require such additional procedures and protections as 
                are necessary to ensure that any State that has 
                established a SEED Account will operate the SEED 
                Account in an accountable and transparent manner.
    (f) Requirements for Eligibility.--A State's eligibility to receive 
allowances in its SEED Account shall depend on that State's compliance 
with the requirements of this Act (and the amendments made by this 
Act).
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated to the Administrator such sums as may be necessary for 
SEED Account operations.

SEC. 132. SUPPORT OF STATE RENEWABLE ENERGY AND ENERGY EFFICIENCY 
              PROGRAMS.

    (a) Definitions.--For purposes of this section:
            (1) Cost-effective.--The term ``cost-effective'', with 
        respect to an energy efficiency program, means that the program 
        meets the Total Resource Cost Test, which requires that the net 
        present value of economic benefits over the life of the program 
        or measure, including avoided supply and delivery costs and 
        deferred or avoided investments, is greater than the net 
        present value of the economic costs over the life of the 
        program, including program costs and incremental costs borne by 
        the energy consumer.
            (2) Renewable energy resource.--The term ``renewable energy 
        resource'' shall have the meaning given that term in section 
        610 of the Public Utility Regulatory Policies Act of 1978 (as 
        added by section 101 of this Act).
            (3) State.--The term ``State'' shall have the meaning given 
        that term in section 302(d) of the Clean Air Act (42 U.S.C. 
        7602(d)).
    (b) Distribution Among States.--The Administrator shall, in 
accordance with this section, distribute emission allowances allocated 
pursuant to section 782(g)(1) not later than September 30, 2012, and 
each calendar year thereafter through 2050. The Administrator shall 
distribute the emission allowances to States for renewable energy and 
energy efficiency programs to be deposited in and administered through 
the State Energy and Environment Development (SEED) Accounts 
established pursuant to section 131 of the American Clean Energy and 
Security Act of 2009. The Administrator shall distribute allowances 
among the States under this section each year in accordance with the 
following formula:
            (1) One third of the allowances shall be divided equally 
        among the States.
            (2) One third of the allowances shall be distributed 
        ratably among the States based on the population of each State, 
        as contained in the most recent reliable census data available 
        from the Bureau of the Census, Department of Commerce, for all 
        States at the time the Administrator calculates the formula for 
        distribution.
            (3) One third of the allowances for shall be distributed 
        ratably among the States on the basis of the energy consumption 
        of each State as contained in the most recent State Energy Data 
        Report available from the Energy Information Administration (or 
        such alternative reliable source as the Administrator may 
        designate).
    (c) Uses.--The allowances distributed to each State pursuant to 
this section shall be used exclusively for the purposes listed in this 
subsection, as set forth below:
            (1) Not less than 12.5 percent shall be distributed by the 
        State to units of local government within such State to be used 
        exclusively to support the energy efficiency and renewable 
        energy purposes listed in paragraphs (2) and (3).
            (2) Not less than 20 percent shall be used exclusively for 
        the following energy efficiency purposes--
                    (A) implementation and enforcement of building 
                codes adopted in compliance with section 201 of the 
                American Clean Energy and Security Act of 2009;
                    (B) implementation of the Retrofit for Energy and 
                Environmental Performance (REEP) program established 
                pursuant to section 202 of the American Clean Energy 
                and Security Act of 2009;
                    (C) implementation of the energy efficient 
                manufactured homes program established pursuant to 
                section 203 of the American Clean Energy and Security 
                Act of 2009;
                    (D) implementation of the building energy 
                performance labeling program established pursuant to 
                section 204 of the American Clean Energy and Security 
                Act of 2009;
                    (E) enabling the development of a Smart Grid (as 
                described in section 1301 of the Energy Independence 
                and Security Act of 2007 (42 U.S.C. 17381)), including 
                integration of renewable energy resources and 
                distributed generation, demand response, demand side 
                management, and systems analysis;
                    (F) transportation planning pursuant to section 
                841; and
                    (G) other cost-effective energy efficiency programs 
                for end-use consumers of electricity, natural gas, home 
                heating oil, or propane, including, where appropriate, 
                programs or mechanisms administered by local 
                governments and entities other than the State.
            (3) Not less than 20 percent shall be used exclusively for 
        capital grants, tax credits, production incentives, loans, loan 
        guarantees, forgivable loans, and interest rate buy-downs for--
                    (A) re-equipping, expanding, or establishing a 
                manufacturing facility that receives certification from 
                the Secretary of Energy pursuant to section 1302 of the 
                American Recovery and Reinvestment Act of 2009 for the 
                production of--
                            (i) property designed to be used to produce 
                        energy from renewable energy sources; and
                            (ii) electricity storage systems; and
                    (B) deployment of technologies to generate 
                electricity from renewable energy sources.
            (4) The remaining 47.5 percent shall be used exclusively 
        for any of the purposes described in subparagraphs (A) through 
        (F) of paragraph (2) and in paragraph (3).
    (d) Reporting.--Each State receiving emission allowances under this 
section shall include in its biennial reports required under section 
131 of the American Clean Energy and Security Act of 2009, in 
accordance with such requirements as the Administrator may prescribe--
            (1) a list of entities receiving allowances or allowance 
        value under this section;
            (2) the amount and nature of allowances or allowance value 
        received by each recipient;
            (3) the specific purposes for which such allowances or 
        allowance value was conveyed;
            (4) the amount of energy savings, emission reductions, 
        renewable energy deployment, or new or retooled manufacturing 
        capacity resulting from such allowances or allowance value; and
            (5) an assessment of the cost-effectiveness of any energy 
        efficiency program supported under subsection (c)(2)(G).
    (e) Enforcement.--If the Administrator determines that a State is 
not in compliance with this section, the Administrator may withhold a 
portion of the allowances, the value of which is equal to up to twice 
the value of the allowances that the State failed to use in accordance 
with the requirements of this section, that such State would otherwise 
be eligible to receive under this section in later years. Allowances 
withheld pursuant to this subsection shall be distributed among the 
remaining States in accordance with the requirements of subsection (b).

                   Subtitle E--Smart Grid Advancement

SEC. 141. DEFINITIONS.

    For purposes of this subtitle:
            (1) The term ``Administrator'' means the Administrator of 
        the Environmental Protection Agency.
            (2) The term ``applicable baseline'' means the average of 
        the highest three annual peak demands a load-serving entity has 
        experienced during the 5 years immediately prior to the date of 
        enactment of this Act.
            (3) The term``Commission'' means Federal Energy Regulatory 
        Commission.
            (4) The term ``load-serving entity'' means an entity that 
        provides electricity directly to retail consumers with the 
        responsibility to assure power quality and reliability, 
        including such entities that are investor-owned, publicly 
        owned, owned by rural electric cooperatives, or other entities.
            (5) The term ``peak demand'' means the highest point of 
        electricity demand, net of any distributed electricity 
        generation or storage from sources on the load-serving entity's 
        customers' premises, during any hour on the system of a load 
        serving entity during a calendar year, expressed in Megawatts 
        (MW), or more than one such high point as a function of 
        seasonal demand changes.
            (6) The term ``peak demand reduction'' means the reduction 
        in annual peak demand as compared to a previous baseline year 
        or period, expressed in Megawatts (MW), whether accomplished by 
        diminishing the end-use requirements for electricity or by use 
        of locally stored or generated electricity to meet those 
        requirements from distributed resources on the load-serving 
        entity's customers' premises and without use of high-voltage 
        transmission.
            (7) The term ``peak demand reduction plan'' means a plan 
        developed by or for a load-serving entity that it will 
        implement to meet its peak demand reduction goals.
            (8) The term ``peak period'' means the time period on the 
        system of a load-serving entity relative to peak demand that 
        may warrant special measures or electricity resources to 
        maintain system reliability while meeting peak demand.
            (9) The term ``Secretary'' means the Secretary of Energy.
            (10) The term ``Smart Grid'' has the meaning provided by 
        section 1301 of the Energy Independence and Security Act of 
        2007 (15 U.S.C. 17381).

SEC. 142. ASSESSMENT OF SMART GRID COST EFFECTIVENESS IN PRODUCTS.

    (a) Assessment.--Within one year after the date of enactment of 
this Act, the Secretary and the Administrator shall each assess the 
potential for cost-effective integration of Smart Grid technologies and 
capabilities in all products that are reviewed by the Department of 
Energy and the Environmental Protection Agency, respectively, for 
potential designation as Energy Star products.
    (b) Analysis.--(1) Within 2 years after the date of enactment of 
this Act, the Secretary and the Administrator shall each prepare an 
analysis of the potential energy savings, greenhouse gas emission 
reductions, and electricity cost savings that could accrue for each of 
the products identified by the assessment in subsection (a) in the 
following optimal circumstances:
            (A) The products possessed Smart Grid capability and 
        interoperability that is tested and proven reliable.
            (B) The products were utilized in an electricity utility 
        service area which had Smart Grid capability and offered 
        customers rate or program incentives to use the products.
            (C) The utility's rates reflected national average costs, 
        including average peak and valley seasonal and daily 
        electricity costs.
            (D) Consumers using such products took full advantage of 
        such capability.
            (E) The utility avoided incremental investments and rate 
        increases related to such savings.
    (2) The analysis under paragraph (1) shall be considered the ``best 
case'' Smart Grid analysis. On the basis of such an analysis for each 
product, the Secretary and the Administrator shall determine whether 
the installation of Smart Grid capability for such a product would be 
cost effective. For purposes of this paragraph, the term ``cost 
effective'' means that the cumulative savings from using the product 
under the best case Smart Grid circumstances for a period of one-half 
of the product's expected useful life will be greater than the 
incremental cost of the Smart Grid features included in the product.
    (3) To the extent that including Smart Grid capability in any 
products analyzed under paragraph (2) is found to be cost effective in 
the best case, the Secretary and the Administrator shall, not later 
than 3 years after the date of enactment of this Act take each of the 
following actions:
            (A) Inform the manufacturer of such product of such finding 
        of cost effectiveness.
            (B) Assess the potential contributions the development and 
        use of products with Smart Grid technologies bring to reducing 
        peak demand and promoting grid stability.
            (C) Assess the potential national energy savings and 
        electricity cost savings that could be realized if Smart Grid 
        potential were installed in the relevant products reviewed by 
        the Energy Star program.
            (D) Assess and identify options for providing consumers 
        information on products with Smart Grid capabilities, including 
        the necessary conditions for cost-effective savings.
            (E) Submit a report to Congress summarizing the results of 
        the assessment for each class of products, and presenting the 
        potential energy and greenhouse gas savings that could result 
        if Smart Grid capability were installed and utilized on such 
        products

SEC. 143. INCLUSIONS OF SMART GRID CAPABILITY ON APPLIANCE ENERGY GUIDE 
              LABELS.

    Section 324(a)(2) of the Energy Policy and Conservation Act (42 
U.S.C. 6294(a)(2)) is amended by adding the following at the end:
                    ``(J)(i) Not later than 3 years after the date of 
                enactment of this subparagraph, the Federal Trade 
                Commission shall initiate a rulemaking to consider 
                making a special note in a prominent manner on any 
                ENERGY GUIDE label for any product actually including 
                Smart Grid capability that--
                            ``(I) Smart Grid capability is a feature of 
                        that product;
                            ``(II) the use and value of that feature 
                        depended on the Smart Grid capability of the 
                        utility system in which the product was 
                        installed and the active utilization of that 
                        feature by the customer; and
                            ``(III) on a utility system with Smart Grid 
                        capability, the use of the product's Smart Grid 
                        capability could reduce the customer's cost of 
                        the product's annual operation by an estimated 
                        dollar amount range representing the result of 
                        incremental energy and electricity cost savings 
                        that would result from the customer taking full 
                        advantage of such Smart Grid capability.
                    ``(ii) Not later than 3 years after the date of 
                enactment of this subparagraph, the Commission shall 
                complete the rulemaking initiated under clause (i).''.

SEC. 144. SMART GRID PEAK DEMAND REDUCTION GOALS.

    (a) Goals.--Not later than one year after the date of enactment of 
this Act, load-serving entities, or, at their option, States with 
respect to load-serving entities that they regulate, shall determine 
and publish peak demand reduction goals for any load-serving entities 
that have an applicable baseline in excess of 250 megawatts.
    (b) Baselines.--(1) The Commission, in consultation with the 
Secretary and the Administrator, shall develop and publish, after an 
opportunity for public comment, a methodology to provide for 
adjustments or normalization to a load-serving entity's applicable 
baseline over time to reflect changes in the number of customers 
served, weather conditions, general economic conditions, and any other 
appropriate factors external to peak demand management, as determined 
by the Commission.
    (2) The Commission shall support load-serving entities (including 
any load-serving entities with an applicable baseline of less than 250 
megawatts that volunteer to participate in achieving the purposes of 
this section) in determining their applicable baselines, and in 
developing their peak demand reduction goals.
    (3) The Secretary, in consultation with the Commission, the 
Administrator, and the National Electric Reliability Corporation, shall 
develop a system and rules for measurement and verification of demand 
reductions.
    (c) Peak Demand Reduction Goals.--(1) Peak demand reduction goals 
may be established for an individual load-serving entity, or, at the 
determination of a State or regional entity, by that State or regional 
entity for a larger region that shares a common system peak demand and 
for which peak demand reduction measures would offer regional benefit.
    (2) A State or regional entity establishing peak demand reduction 
goals shall cooperate, as necessary and appropriate, with the 
Commission, the Secretary, State regulatory commissions, State energy 
offices, the National Electric Reliability Corporation, and other 
relevant authorities.
    (3) In determining the applicable peak demand reduction goals, 
States and other jurisdictional entities may utilize the results of the 
2009 National Demand Response Potential Assessment, as authorized by 
section 571 of the National Energy Conservation Policy Act (42 U.S.C. 
8279).
    (4) The applicable peak demand reduction goals shall provide that--
            (A) load-serving entities will reduce or mitigate peak 
        demand by a minimum percentage amount from the applicable 
        baseline to a lower peak demand during calendar year 2012;
            (B) load-serving entities will reduce or mitigate peak 
        demand by a minimum percentage greater amount from the 
        applicable baseline to a lower peak demand during calendar year 
        2015; and
            (C) the minimum percentage reductions established as peak 
        demand reduction goals shall be the maximum reductions that are 
        realistically achievable with an aggressive effort to deploy 
        Smart Grid and peak demand reduction technologies and methods, 
        including but not limited to those listed in subsection (d).
    (d) Plan.--Each load-serving entity shall prepare a peak demand 
reduction plan that demonstrates its ability to meet each applicable 
goal by any or a combination of the following options:
            (1) Direct reduction in megawatts of peak demand through 
        energy efficiency measures with reliable and continued 
        application during peak demand periods.
            (2) Demonstration that an amount of megawatts equal to a 
        stated portion of the applicable goal is contractually 
        committed to be available for peak reduction through one or 
        more of the following:
                    (A) Megawatts enrolled in demand response programs.
                    (B) Megawatts subject to the ability of a load-
                serving entity to call on demand response programs, 
                smart appliances, smart electricity storage devices, 
                distributed generation resources on the entity's 
                customers' premises, or other measures directly capable 
                of actively, controllably, reliably, and dynamically 
                reducing peak demand (``dynamic peak management 
                control'').
                    (C) Megawatts available from distributed dynamic 
                electricity storage under agreement with the owner of 
                that storage.
                    (D) Megawatts committed from dispatchable 
                distributed generation demonstrated to be reliable 
                under peak period conditions and in compliance with air 
                quality regulations.
                    (E) Megawatts available from smart appliances and 
                equipment with Smart Grid capability available for 
                direct control by the utility through agreement with 
                the customer owning the appliances or equipment.
                    (F) Megawatts from a demonstrated and assured 
                minimum of distributed solar electric generation 
                capacity in instances where peak period and peak demand 
                conditions are directly related to solar radiation and 
                accompanying heat.
            (3) If any of the methods listed in subparagraph (C), (D), 
        or (E) of paragraph (2) are relied upon to meet its peak demand 
        reduction goals, the load-serving entity must demonstrate this 
        capability by operating a test during the applicable calendar 
        year.
            (4) Nothing in this section shall require the publication 
        in peak demand reduction goals or in any peak demand reduction 
        plan of any information that is confidential for competitive or 
        other reasons or that identifies individual customers.
    (e) Existing Authority and Requirements.--Nothing in this section 
diminishes or supersedes any authority of a State or political 
subdivision of a State to adopt or enforce any law or regulation 
respecting peak demand management, demand response, distributed 
storage, use of distributed generation, or the regulation of load-
serving entities. The Commission, in consultation with States having 
such peak management, demand response and distributed storage programs, 
shall to the maximum extent practicable, facilitate coordination 
between the Federal program and such State programs.
    (f) Relief.--The Commission may, for good cause, grant relief to 
load-serving entities from the requirements of this section.
    (g) Other Laws.--Except as provided in subsections (e) and (f), no 
law or regulation shall relieve any person of any requirement otherwise 
applicable under this section.
    (h) Compliance.--(1) The Commission shall within one year after the 
date of enactment of this Act establish a public website where the 
Commission will provide information and data demonstrating compliance 
by States, regional entities, and load-serving entities with this 
section, including the success of load-serving entities in meeting 
applicable peak demand reduction goals.
    (2) The Commission shall, by April 1 of each year beginning in 
2012, provide a report to Congress on compliance with this section and 
success in meeting applicable peak demand reduction goals and, as 
appropriate, shall make recommendations as to how to increase peak 
demand reduction efforts.
    (3) The Commission shall note in each such report any State, 
political subdivision of a State, or load-serving entity that has 
failed to comply with this section, or is not a part of any region or 
group of load-serving entities serving a region that has complied with 
this section.
    (4) The Commission shall have and exercise the authority to take 
reasonable steps to modify the process of establishing peak demand 
reduction goals and to accept adjustments to them as appropriate when 
sought by load-serving entities.
    (i) Assistance to States and Funding.--
            (1) Assistance to states.--Any costs incurred by States for 
        activities undertaken pursuant to this section shall be 
        supported by the use of emission allowances allocated to the 
        States' SEED Accounts pursuant to section [___] of this Act. To 
        the extent that a State provides allowances to local 
        governments within the State to implement this program, that 
        shall be deemed a distribution of such allowances to units of 
        local government pursuant to subsection (c)(1) of that section.
            (2) Funding.--There are authorized to be appropriated such 
        sums as may be necessary to the Commission, the Secretary, and 
        the Administrator to carry out the provisions of this section.

SEC. 145. REAUTHORIZATION OF ENERGY EFFICIENCY PUBLIC INFORMATION 
              PROGRAM TO INCLUDE SMART GRID INFORMATION.

    (a) In General.--Section 134 of the Energy Policy Act of 2005 (42 
U.S.C. 15832) is amended as follows:
            (1) By amending the section heading to read as follows: 
        ``energy efficiency and smart grid public information 
        initiative''.
            (2) In paragraph (1) of subsection (a) by striking ``reduce 
        energy consumption during the 4-year period beginning on the 
        date of enactment of this Act'' and inserting ``increase energy 
        efficiency and to adopt Smart Grid technology and practices''.
            (3) In paragraph (2) of subsection (a) by striking 
        ``benefits to consumers of reducing'' and inserting ``economic 
        and environmental benefits to consumers and the United States 
        of optimizing''.
            (4) In subsection (a) by inserting at the beginning of 
        paragraph (3) ``the effect of energy efficiency and Smart Grid 
        capability in reducing energy and electricity prices throughout 
        the economy, together with''.
            (5) In subsection (a)(4) by redesignating subparagraph (D) 
        as (E), by striking ``and'' at the end of subparagraph (C), and 
        by inserting after subparagraph (C) the following:
                    ``(D) purchasing and utilizing equipment that 
                includes Smart Grid features and capability; and''.
            (6) In subsection (c), by striking ``Not later than July 1, 
        2009,'' and inserting, ``For each year when appropriations 
        pursuant to the authorization in this section exceed 
        $10,000,000,''.
            (7) In subsection (d) by striking ``2010'' and inserting 
        ``2020''.
            (8) In subsection (e) by striking ``2010'' and inserting 
        ``2020''.
    (b) Table of Contents.--The item relating to section 134 in the 
table of contents for the Energy Policy Act of 2005 (42 U.S.C. 15801 
and following) is amended to read as follows:

``Sec. 134. Energy efficiency and Smart Grid public information 
                            initiative.''.

SEC. 146. INCLUSION OF SMART-GRID FEATURES IN APPLIANCE REBATE PROGRAM.

    (a) Amendments.--Section 124 of the Energy Policy Act of 2005 (42 
U.S.C. 15821) is amended as follows:
            (1) By amending the section heading to read as follows: 
        ``energy efficient and smart appliance rebate program.''.
            (2) By redesignating paragraphs (4) and (5) of subsection 
        (a) as paragraphs (5) and (6), respectively, and inserting 
        after paragraph (3) the following:
            ``(4) Smart appliance.--The term `smart appliance' means a 
        product that the Administrator of the Environmental Protection 
        Agency or the Secretary of Energy has determined qualifies for 
        such a designation in the Energy Star program pursuant to 
        section 142 of the American Clean Energy and Security Act of 
        2009, or that the Secretary or the Administrator has separately 
        determined includes the relevant Smart Grid capabilities listed 
        in section 1301 of the Energy Independence and Security Act of 
        2007 (15 U.S.C. 17381).''.
            (3) In subsection (b)(1) by inserting ``and smart'' after 
        ``efficient'' and by inserting after ``products'' the first 
        place it appears ``, including products designated as being 
        smart appliances,''.
            (4) In subsection (b)(3), by inserting ``the administration 
        of'' after ``carry out''.
            (5) In subsection (d), by inserting ``the administration 
        of'' after ``carrying out'' and by inserting ``, and up to 100 
        percent of the value of the rebates provided pursuant to this 
        section'' before the period at the end.
            (6) In subsection (e)(3), by inserting ``, with separate 
        consideration as applicable if the product is also a smart 
        appliance,'' after ``Energy Star product'' the first place it 
        appears and by inserting ``or smart appliance'' before the 
        period at the end.
            (7) In subsection (f), by striking ``$50,000,000'' through 
        the period at the end and inserting ``$100,000,000 for each 
        fiscal year from 2010 through 2015.''.
    (b) Table of Contents.--The item relating to section 124 in the 
table of contents for the Energy Policy Act of 2005 (42 U.S.C. 15801 
and following) is amended to read as follows:

``Sec. 124. Energy efficient and smart appliance rebate program.''.

                   Subtitle F--Transmission Planning

SEC. 151. TRANSMISSION PLANNING.

    Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended 
by adding after section 216 the following new section:

``SEC. 216A. TRANSMISSION PLANNING.

    ``(a) Federal Policy.--
            ``(1) Objectives.--It is the policy of the United States 
        that regional electric grid planning should facilitate the 
        deployment of renewable and other zero-carbon energy sources 
        for generating electricity to reduce greenhouse gas emissions 
        while ensuring reliability, reducing congestion, ensuring 
        cyber-security, and providing for cost-effective electricity 
        services throughout the United States.
            ``(2) Options.--In addition to the policy under paragraph 
        (1), it is the policy of the United States that regional 
        electric grid planning to meet these objectives should take 
        into account all significant demand-side and supply-side 
        options, including energy efficiency, distributed generation, 
        renewable energy and zero-carbon electricity generation 
        technologies, smart-grid technologies and practices, demand 
        response, electricity storage, voltage regulation technologies, 
        high capacity conductor and superconductor technologies, 
        underground transmission technologies, and new conventional 
        electric transmission capacity and corridors.
    ``(b) Planning.--
            ``(1) Planning principles.--Not later than 1 year after the 
        date of enactment of this section, the Commission shall adopt, 
        after notice and opportunity for comment, national electricity 
        grid planning principles derived from the Federal policy 
        established under subsection (a) to be applied in ongoing and 
        future transmission planning that may implicate interstate 
        transmission of electricity.
            ``(2) Regional planning entities.--Not later than 3 months 
        after the date of adoption by the Commission of national 
        electricity grid planning principles pursuant to paragraph (1), 
        entities that conduct or may conduct transmission planning 
        pursuant to State or Federal law or regulation, including 
        States, entities designated by States, public utility 
        transmission providers, operators and owners, regional 
        organizations, and electric utilities, and that are willing to 
        incorporate the national electricity grid planning principles 
        adopted by the Commission in their electric grid planning, 
        shall identify themselves and the regions for which they 
        propose to develop plans to the Commission.
            ``(3) Coordination of regional planning entities.--The 
        Commission shall encourage regional planning entities described 
        under paragraph (2) to cooperate and coordinate across regions 
        and to harmonize regional electric grid planning with planning 
        in adjacent or overlapping jurisdictions to the maximum extent 
        feasible. The Commission shall work with States, public 
        utilities transmission providers, load-serving entities, 
        transmission operators, and other organizations to resolve any 
        conflict or competition among proposed planning entities in 
        order to build consensus and promote the Federal policy 
        established under subsection (a). The Commission shall seek to 
        ensure that planning that is consistent with the national 
        electricity grid planning principles adopted pursuant to 
        paragraph (1) is conducted in all regions of the United States 
        and the territories.
            ``(4) Relation to existing planning policy.--In 
        implementing the Federal policy established under subsection 
        (a), the Commission shall--
                    ``(A) incorporate any ongoing planning efforts 
                undertaken pursuant to section 217; and
                    ``(B) consult with and invite the participation of 
                the Secretary of Energy in relationship to the 
                Secretary's duties pursuant to section 216.
            ``(5) Assistance.--
                    ``(A) In general.--The Commission shall provide 
                support to and participate in the regional grid 
                planning processes conducted by regional planning 
                entities. The Commission may provide planning resources 
                and assistance as required or as requested by regional 
                planning entities, including system data, cost 
                information, system analysis, technical expertise, 
                modeling support, dispute resolution services, and 
                other assistance to regional planning entities, as 
                appropriate.
                    ``(B) Authorization.--There are authorized to be 
                appropriated such sums as may be necessary to carry out 
                this paragraph.
            ``(6) Conflict resolution.--In the event that regional grid 
        plans conflict, the Commission shall assist the regional 
        planning entities in resolving such conflicts in order to 
        achieve the objectives of the Federal policy established under 
        subsection (a).
            ``(7) Submission of plans.--The Commission shall require 
        regional planning entities to submit initial regional electric 
        grid plans to the Commission not later than 18 months after the 
        date the Commission promulgates national electricity grid 
        planning principles pursuant to paragraph (1). Regional 
        electric grid plans should, in general, be developed from sub-
        regional requirements and plans, including planning input 
        reflecting individual utility service areas. Regional plans may 
        then in turn be combined into larger regional plans, up to 
        interconnection-wide and national plans, as appropriate and 
        necessary as determined by the Commission. The Commission shall 
        review such plans for consistency with the national grid 
        planning principles and may return a plan to one or more 
        planning entities for further consideration, along with the 
        Commission's own recommendations for resolution of any conflict 
        or for improvement. To the extent practicable, all plans 
        submitted to the Commission shall be public documents and 
        available on the Commission's website.
            ``(8) Multi-regional meetings.--As regional grid plans are 
        submitted to the Commission, the Commission may convene multi-
        regional meetings to discuss regional grid plan consistency and 
        integration, including requirements for multi-regional 
        projects, and to resolve any conflicts that emerge from such 
        multi-regional projects. The Commission shall provide its 
        recommendations for eliminating any inter-regional conflicts.
            ``(9) Report to congress.--Not later than 3 years after the 
        date of enactment of this section, the Commission shall provide 
        a report to Congress containing the results of the regional 
        grid planning process, including summaries of the adopted 
        regional plans. The Commission shall provide an electronic 
        version of its report on its website with links to all regional 
        and sub-regional plans taken into account. The Commission shall 
        note and provide its recommended resolution for any conflicts 
        not resolved during the planning process. The Commission shall 
        make any recommendations to Congress on the appropriate Federal 
        role or support required to address the needs of the electric 
        grid, including recommendations for addressing any needs that 
        are beyond the reach of existing State and Federal 
        authority.''.

            Subtitle G--Technical Corrections to Energy Laws

SEC. 161. TECHNICAL CORRECTIONS TO ENERGY INDEPENDENCE AND SECURITY ACT 
              OF 2007.

    (a) Title III--Energy Savings Through Improved Standards for 
Appliance and Lighting.--(1) Section 325(u) of the Energy Policy and 
Conservation Act (42 U.S.C. 6295(u)) (as amended by section 301(c) of 
the Energy Independence and Security Act of 2007 (121 Stat. 1550)) is 
amended--
                    (A) by redesignating paragraph (7) as paragraph 
                (4); and
                    (B) in paragraph (4) (as so redesignated), by 
                striking ``supplies is'' and inserting ``supply is''.
    (2) Section 302 of the Energy Independence and Security Act of 2007 
(121 Stat. 1551)) is amended--
            (A) in subsection (a), by striking ``end of the paragraph'' 
        and inserting ``end of subparagraph (A)''; and
            (B) in subsection (b), by striking ``6313(a)'' and 
        inserting ``6314(a)''.
    (3) Section 343(a)(1) of the Energy Policy and Conservation Act (42 
U.S.C. 6313(a)(1)) (as amended by section 302(b) of the Energy 
Independence and Security Act of 2007 (121 Stat. 1551)) is amended--
            (A) by striking ``Test procedures'' and all that follows 
        through ``At least once'' and inserting ``Test procedures.--At 
        least once''; and
            (B) by redesignating clauses (i) and (ii) as subparagraphs 
        (A) and (B), respectively.
    (4) Section 342(a)(6) of the Energy Policy and Conservation Act (42 
U.S.C. 6313(a)(6)) (as amended by section 305(b)(2) of the Energy 
Independence and Security Act of 2007 (121 Stat. 1554)) is amended--
            (A) in subparagraph (B)--
                    (i) by striking ``If the Secretary'' and inserting 
                the following:
                            ``(i) In general.--If the Secretary'';
                    (ii) by striking ``clause (ii)(II)'' and inserting 
                ``subparagraph (A)(ii)(II)'';
                    (iii) by striking ``clause (i)'' and inserting 
                ``subparagraph (A)(i)''; and
                    (iv) by adding at the end the following:
                            ``(ii) Factors.--In determining whether a 
                        standard is economically justified for the 
                        purposes of subparagraph (A)(ii)(II), the 
                        Secretary shall, after receiving views and 
                        comments furnished with respect to the proposed 
                        standard, determine whether the benefits of the 
                        standard exceed the burden of the proposed 
                        standard by, to the maximum extent practicable, 
                        considering--
                                    ``(I) the economic impact of the 
                                standard on the manufacturers and on 
                                the consumers of the products subject 
                                to the standard;
                                    ``(II) the savings in operating 
                                costs throughout the estimated average 
                                life of the product in the type (or 
                                class) compared to any increase in the 
                                price of, or in the initial charges 
                                for, or maintenance expenses of, the 
                                products that are likely to result from 
                                the imposition of the standard;
                                    ``(III) the total projected 
                                quantity of energy savings likely to 
                                result directly from the imposition of 
                                the standard;
                                    ``(IV) any lessening of the utility 
                                or the performance of the products 
                                likely to result from the imposition of 
                                the standard;
                                    ``(V) the impact of any lessening 
                                of competition, as determined in 
                                writing by the Attorney General, that 
                                is likely to result from the imposition 
                                of the standard;
                                    ``(VI) the need for national energy 
                                conservation; and
                                    ``(VII) other factors the Secretary 
                                considers relevant.
                            ``(iii) Administration.--
                                    ``(I) Energy use and efficiency.--
                                The Secretary may not prescribe any 
                                amended standard under this paragraph 
                                that increases the maximum allowable 
                                energy use, or decreases the minimum 
                                required energy efficiency, of a 
                                covered product.
                                    ``(II) Unavailability.--
                                            ``(aa) In general.--The 
                                        Secretary may not prescribe an 
                                        amended standard under this 
                                        subparagraph if the Secretary 
                                        finds (and publishes the 
                                        finding) that interested 
                                        persons have established by a 
                                        preponderance of the evidence 
                                        that a standard is likely to 
                                        result in the unavailability in 
                                        the United States in any 
                                        product type (or class) of 
                                        performance characteristics 
                                        (including reliability, 
                                        features, sizes, capacities, 
                                        and volumes) that are 
                                        substantially the same as those 
                                        generally available in the 
                                        United States at the time of 
                                        the finding of the Secretary.
                                            ``(bb) Other types or 
                                        classes.--The failure of some 
                                        types (or classes) to meet the 
                                        criterion established under 
                                        this subclause shall not affect 
                                        the determination of the 
                                        Secretary on whether to 
                                        prescribe a standard for the 
                                        other types or classes.''; and
            (B) in subparagraph (C)(iv), by striking ``An amendment 
        prescribed under this subsection'' and inserting 
        ``Notwithstanding subparagraph (D), an amendment prescribed 
        under this subparagraph''.
    (5) Section 306(c) of the Energy Independence and Security Act of 
2007 (121 Stat. 1559) is amended--
            (A) by striking ``Section'' and all that follows through 
        ``is amended'' and inserting ``Section 342(a)(6)(C) of the 
        Energy Policy and Conservation Act (42 U.S.C. 6313(a)(6)(C)) 
        (as amended by section 305(b)(2)) is amended''; and
            (B) by redesignating clause (iii) of section 342(a)(6)(B) 
        of the Energy Policy and Conservation Act (as added by section 
        306(c) of the Energy Independence and Security Act of 2007) as 
        clause (vi) of section 342(a)(6)(C) of the Energy Policy and 
        Conservation Act (as amended by section 305(b)(2) of the Energy 
        Independence and Security Act of 2007).
    (6) Section 340 of the Energy Policy and Conservation Act (42 
U.S.C. 6311) (as amended by sections 312(a)(2) and 314(a) of the Energy 
Independence and Security Act of 2007 (121 Stat. 1564, 1569)) is 
amended by redesignating paragraphs (22) and (23) (as added by section 
314(a) of that Act) as paragraphs (23) and (24), respectively.
    (7) Section 345 of the Energy Policy and Conservation Act (42 
U.S.C. 6316) (as amended by section 312(e) of the Energy Independence 
and Security Act of 2007 (121 Stat. 1567)) is amended--
            (A) by striking ``subparagraphs (B) through (G)'' each 
        place it appears and inserting ``subparagraphs (B), (C), (D), 
        (I), (J), and (K)'';
            (B) by striking ``part A'' each place it appears and 
        inserting ``part B''; and
            (C) in subsection (h)(3), by striking ``section 342(f)(3)'' 
        and inserting ``section 342(f)(4)''.
    (8) Section 340(13) of the Energy Policy and Conservation Act (42 
U.S.C. 6311(13)) (as amended by section 313(a) of the Energy 
Independence and Security Act of 2007 (121 Stat. 1568)) is amended--
            (A) by striking subparagraphs (A) and (B) and inserting the 
        following:
                    ``(A) In general.--The term `electric motor' means 
                any motor that is--
                            ``(i) a general purpose T-frame, single-
                        speed, foot-mounting, polyphase squirrel-cage 
                        induction motor of the National Electrical 
                        Manufacturers Association, Design A and B, 
                        continuous rated, operating on 230/460 volts 
                        and constant 60 Hertz line power as defined in 
                        NEMA Standards Publication MG1-1987; or
                            ``(ii) a motor incorporating the design 
                        elements described in clause (i), but is 
                        configured to incorporate one or more of the 
                        following variations--
                                    ``(I) U-frame motor;
                                    ``(II) NEMA Design C motor;
                                    ``(III) close-coupled pump motor;
                                    ``(IV) footless motor;
                                    ``(V) vertical solid shaft normal 
                                thrust motor (as tested in a horizontal 
                                configuration);
                                    ``(VI) 8-pole motor; or
                                    ``(VII) poly-phase motor with a 
                                voltage rating of not more than 600 
                                volts (other than 230 volts or 460 
                                volts, or both, or can be operated on 
                                230 volts or 460 volts, or both).''; 
                                and
            (B) by redesignating subparagraphs (C) through (I) as 
        subparagraphs (B) through (H), respectively.
    (9)(A) Section 342(b) of the Energy Policy and Conservation Act (42 
U.S.C. 6313(b)) is amended--
            (i) in paragraph (1), by striking ``paragraph (2)'' and 
        inserting ``paragraph (3)'';
            (ii) by redesignating paragraphs (2) and (3) as paragraphs 
        (3) and (4);
            (iii) by inserting after paragraph (1) the following:
            ``(2) Standards effective beginning december 19, 2010.--
                    ``(A) In general.--Except for definite purpose 
                motors, special purpose motors, and those motors 
                exempted by the Secretary under paragraph (3) and 
                except as provided for in subparagraphs (B), (C), and 
                (D), each electric motor manufactured with power 
                ratings from 1 to 200 horsepower (alone or as a 
                component of another piece of equipment) on or after 
                December 19, 2010, shall have a nominal full load 
                efficiency of not less than the nominal full load 
                efficiency described in NEMA MG-1 (2006) Table 12-12.
                    ``(B) Fire pump electric motors.--Except for those 
                motors exempted by the Secretary under paragraph (3), 
                each fire pump electric motor manufactured with power 
                ratings from 1 to 200 horsepower (alone or as a 
                component of another piece of equipment) on or after 
                December 19, 2010, shall have a nominal full load 
                efficiency that is not less than the nominal full load 
                efficiency described in NEMA MG-1 (2006) Table 12-11.
                    ``(C) NEMA design b electric motors.--Except for 
                those motors exempted by the Secretary under paragraph 
                (3), each NEMA Design B electric motor with power 
                ratings of more than 200 horsepower, but not greater 
                than 500 horsepower, manufactured (alone or as a 
                component of another piece of equipment) on or after 
                December 19, 2010, shall have a nominal full load 
                efficiency of not less than the nominal full load 
                efficiency described in NEMA MG-1 (2006) Table 12-11.
                    ``(D) Motors incorporating certain design 
                elements.--Except for those motors exempted by the 
                Secretary under paragraph (3), each electric motor 
                described in section 340(13)(A)(ii) manufactured with 
                power ratings from 1 to 200 horsepower (alone or as a 
                component of another piece of equipment) on or after 
                December 19, 2010, shall have a nominal full load 
                efficiency of not less than the nominal full load 
                efficiency described in NEMA MG-1 (2006) Table 12-
                11.''; and
            (iv) in paragraph (3) (as redesignated by clause (ii)), by 
        striking ``paragraph (1)'' each place it appears in 
        subparagraphs (A) and (D) and inserting ``paragraphs (1) and 
        (2)''.
    (B) Section 313 of the Energy Independence and Security Act of 2007 
(121 Stat. 1568) is repealed.
    (C) The amendments made by--
            (i) subparagraph (A) take effect on December 19, 2010; and
            (ii) subparagraph (B) take effect on December 19, 2007.
    (10) Section 321(30)(D)(i)(III) of the Energy Policy and 
Conservation Act (42 U.S.C. 6291(30)(D)(i)(III)) (as amended by section 
321(a)(1)(A) of the Energy Independence and Security Act of 2007 (121 
Stat. 1574)) is amended by inserting before the semicolon the 
following: ``or, in the case of a modified spectrum lamp, not less than 
232 lumens and not more than 1,950 lumens''.
    (11) Section 321(30)(T) of the Energy Policy and Conservation Act 
(42 U.S.C. 6291(30)(T) (as amended by section 321(a)(1)(B) of the 
Energy Independence and Security Act of 2007 (121 Stat. 1574)) is 
amended--
            (A) in clause (i)--
                    (i) by striking the comma after ``household 
                appliance'' and inserting ``and''; and
                    (ii) by striking ``and is sold at retail,''; and
            (B) in clause (ii), by inserting ``when sold at retail,'' 
        before ``is designated''.
    (12) Section 325 of the Energy Policy and Conservation Act (42 
U.S.C. 6295) (as amended by sections 321(a)(3)(A) and 322(b) of the 
Energy Independence and Security Act of 2007 (121 Stat. 1577, 1588)) is 
amended by striking subsection (i) and inserting the following:
    ``(i) General Service Fluorescent Lamps, General Service 
Incandescent Lamps, Intermediate Base Incandescent Lamps, Candelabra 
Base Incandescent Lamps, and Incandescent Reflector Lamps.--
            ``(1) Energy efficiency standards.--
                    ``(A) In general.--Each of the following general 
                service fluorescent lamps, general service incandescent 
                lamps, intermediate base incandescent lamps, candelabra 
                base incandescent lamps, and incandescent reflector 
                lamps manufactured after the effective date specified 
                in the tables listed in this subparagraph shall meet or 
                exceed the following lamp efficacy, new maximum 
                wattage, and CRI standards:

                                               ``FLUORESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
                                                                                                  Effective Date
           Lamp Type               Nominal Lamp       Minimum CRI       Minimum Average Lamp        (Period of
                                      Wattage                              Efficacy (LPW)            Months)
----------------------------------------------------------------------------------------------------------------
4-foot medium bi-pin...........        >35 W              69                    75.0                    36
                                       35 W               45                    75.0                    36
2-foot U-shaped................        >35 W              69                    68.0                    36
                                        35 W              45                    64.0                    36
8-foot slimline................         65 W              69                    80.0                    18
                                       65 W               45                    80.0                    18
8-foot high output.............       >100 W              69                    80.0                    18
                                       100 W              45                    80.0                    18
----------------------------------------------------------------------------------------------------------------

                     ``INCANDESCENT REFLECTOR LAMPS
------------------------------------------------------------------------
                                                          Effective Date
     Nominal Lamp Wattage         Minimum Average Lamp      (Period of
                                     Efficacy (LPW)           Months)
------------------------------------------------------------------------
 40-50.......................             10.5                  36
 51-66.......................             11.0                  36
 67-85.......................             12.5                  36
 86-115......................             14.0                  36
116-155......................             14.5                  36
156-205......................             15.0                  36
------------------------------------------------------------------------

                                      ``GENERAL SERVICE INCANDESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
                                                                                         Minimum
                       Rated Lumen Ranges                            Maximum Rated        Rated       Effective
                                                                        Wattage         Lifetime        Date
----------------------------------------------------------------------------------------------------------------
1490-2600                                                                        72     1,000 hrs      1/1/2012
1050-1489                                                                        53     1,000 hrs      1/1/2013
750-1049                                                                         43     1,000 hrs      1/1/2014
310-749                                                                          29     1,000 hrs      1/1/2014
----------------------------------------------------------------------------------------------------------------

                             ``MODIFIED SPECTRUM GENERAL SERVICE INCANDESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
                                                                                         Minimum
                       Rated Lumen Ranges                            Maximum Rated        Rated       Effective
                                                                        Wattage         Lifetime        Date
----------------------------------------------------------------------------------------------------------------
1118-1950                                                                        72     1,000 hrs      1/1/2012
788-1117                                                                         53     1,000 hrs      1/1/2013
563-787                                                                          43     1,000 hrs      1/1/2014
232-562                                                                          29     1,000 hrs      1/1/2014
----------------------------------------------------------------------------------------------------------------

                    ``(B) Application.--
                            ``(i) Application criteria.--This 
                        subparagraph applies to each lamp that--
                                    ``(I) is intended for a general 
                                service or general illumination 
                                application (whether incandescent or 
                                not);
                                    ``(II) has a medium screw base or 
                                any other screw base not defined in 
                                ANSI C81.61-2006;
                                    ``(III) is capable of being 
                                operated at a voltage at least 
                                partially within the range of 110 to 
                                130 volts; and
                                    ``(IV) is manufactured or imported 
                                after December 31, 2011.
                            ``(ii) Requirement.--For purposes of this 
                        paragraph, each lamp described in clause (i) 
                        shall have a color rendering index that is 
                        greater than or equal to--
                                    ``(I) 80 for nonmodified spectrum 
                                lamps; or
                                    ``(II) 75 for modified spectrum 
                                lamps.
                    ``(C) Candelabra incandescent lamps and 
                intermediate base incandescent lamps.--
                            ``(i) Candelabra base incandescent lamps.--
                        Effective beginning January 1, 2012, a 
                        candelabra base incandescent lamp shall not 
                        exceed 60 rated watts.
                            ``(ii) Intermediate base incandescent 
                        lamps.--Effective beginning January 1, 2012, an 
                        intermediate base incandescent lamp shall not 
                        exceed 40 rated watts.
                    ``(D) Exemptions.--
                            ``(i) Statutory exemptions.--The standards 
                        specified in subparagraph (A) shall not apply 
                        to the following types of incandescent 
                        reflector lamps:
                                    ``(I) Lamps rated at 50 watts or 
                                less that are ER30, BR30, BR40, or ER40 
                                lamps.
                                    ``(II) Lamps rated at 65 watts that 
                                are BR30, BR40, or ER40 lamps.
                                    ``(III) R20 incandescent reflector 
                                lamps rated 45 watts or less.
                            ``(ii) Administrative exemptions.--
                                    ``(I) Petition.--Any person may 
                                petition the Secretary for an exemption 
                                for a type of general service lamp from 
                                the requirements of this subsection.
                                    ``(II) Criteria.--The Secretary may 
                                grant an exemption under subclause (I) 
                                only to the extent that the Secretary 
                                finds, after a hearing and opportunity 
                                for public comment, that it is not 
                                technically feasible to serve a 
                                specialized lighting application (such 
                                as a military, medical, public safety, 
                                or certified historic lighting 
                                application) using a lamp that meets 
                                the requirements of this subsection.
                                    ``(III) Additional criterion.--To 
                                grant an exemption for a product under 
                                this clause, the Secretary shall 
                                include, as an additional criterion, 
                                that the exempted product is unlikely 
                                to be used in a general service 
                                lighting application.
                    ``(E) Extension of coverage.--
                            ``(i) Petition.--Any person may petition 
                        the Secretary to establish standards for lamp 
                        shapes or bases that are excluded from the 
                        definition of general service lamps.
                            ``(ii) Increased sales of exempted lamps.--
                        The petition shall include evidence that the 
                        availability or sales of exempted incandescent 
                        lamps have increased significantly since the 
                        date on which the standards on general service 
                        incandescent lamps were established.
                            ``(iii) Criteria.--The Secretary shall 
                        grant a petition under clause (i) if the 
                        Secretary finds that--
                                    ``(I) the petition presents 
                                evidence that demonstrates that 
                                commercial availability or sales of 
                                exempted incandescent lamp types have 
                                increased significantly since the 
                                standards on general service lamps were 
                                established and likely are being widely 
                                used in general lighting applications; 
                                and
                                    ``(II) significant energy savings 
                                could be achieved by covering exempted 
                                products, as determined by the 
                                Secretary based in part on sales data 
                                provided to the Secretary from 
                                manufacturers and importers.
                            ``(iv) No presumption.--The grant of a 
                        petition under this subparagraph shall create 
                        no presumption with respect to the 
                        determination of the Secretary with respect to 
                        any criteria under a rulemaking conducted under 
                        this section.
                            ``(v) Expedited proceeding.--If the 
                        Secretary grants a petition for a lamp shape or 
                        base under this subparagraph, the Secretary 
                        shall--
                                    ``(I) conduct a rulemaking to 
                                determine standards for the exempted 
                                lamp shape or base; and
                                    ``(II) complete the rulemaking not 
                                later than 18 months after the date on 
                                which notice is provided granting the 
                                petition.
                    ``(F) Effective dates.--
                            ``(i) In general.--In this paragraph, 
                        except as otherwise provided in a table 
                        contained in subparagraph (A) or in clause 
                        (ii), the term `effective date' means the last 
                        day of the month specified in the table that 
                        follows October 24, 1992.
                            ``(ii) Special effective dates.--
                                    ``(I) ER, br, and bpar lamps.--The 
                                standards specified in subparagraph (A) 
                                shall apply with respect to ER 
                                incandescent reflector lamps, BR 
                                incandescent reflector lamps, BPAR 
                                incandescent reflector lamps, and 
                                similar bulb shapes on and after 
                                January 1, 2008, or the date that is 
                                180 days after the date of enactment of 
                                the Energy Independence and Security 
                                Act of 2007.
                                    ``(II) Lamps between 2.25-2.75 
                                inches in diameter.--The standards 
                                specified in subparagraph (A) shall 
                                apply with respect to incandescent 
                                reflector lamps with a diameter of more 
                                than 2.25 inches, but not more than 
                                2.75 inches, on and after the later of 
                                January 1, 2008, or the date that is 
                                180 days after the date of enactment of 
                                the Energy Independence and Security 
                                Act of 2007.
            ``(2) Compliance with existing law.--Notwithstanding 
        section 332(a)(5) and section 332(b), it shall not be unlawful 
        for a manufacturer to sell a lamp that is in compliance with 
        the law at the time the lamp was manufactured.
            ``(3) Rulemaking before october 24, 1995.--
                    ``(A) In general.--Not later than 36 months after 
                October 24, 1992, the Secretary shall initiate a 
                rulemaking procedure and shall publish a final rule not 
                later than the end of the 54-month period beginning on 
                October 24, 1992, to determine whether the standards 
                established under paragraph (1) should be amended.
                    ``(B) Administration.--The rule shall contain the 
                amendment, if any, and provide that the amendment shall 
                apply to products manufactured on or after the 36-month 
                period beginning on the date on which the final rule is 
                published.
            ``(4) Rulemaking before october 24, 2000.--
                    ``(A) In general.--Not later than 8 years after 
                October 24, 1992, the Secretary shall initiate a 
                rulemaking procedure and shall publish a final rule not 
                later than 9 years and 6 months after October 24, 1992, 
                to determine whether the standards in effect for 
                fluorescent lamps and incandescent lamps should be 
                amended.
                    ``(B) Administration.--The rule shall contain the 
                amendment, if any, and provide that the amendment shall 
                apply to products manufactured on or after the 36-month 
                period beginning on the date on which the final rule is 
                published.
            ``(5) Rulemaking for additional general service fluorescent 
        lamps.--
                    ``(A) In general.--Not later than the end of the 
                24-month period beginning on the date labeling 
                requirements under section 324(a)(2)(C) become 
                effective, the Secretary shall--
                            ``(i) initiate a rulemaking procedure to 
                        determine whether the standards in effect for 
                        fluorescent lamps and incandescent lamps should 
                        be amended so that the standards would be 
                        applicable to additional general service 
                        fluorescent lamps; and
                            ``(ii) publish, not later than 18 months 
                        after initiating the rulemaking, a final rule 
                        including the amended standards, if any.
                    ``(B) Administration.--The rule shall provide that 
                the amendment shall apply to products manufactured 
                after a date which is 36 months after the date on which 
                the rule is published.
            ``(6) Standards for general service lamps.--
                    ``(A) Rulemaking before january 1, 2014.--
                            ``(i) In general.--Not later than January 
                        1, 2014, the Secretary shall initiate a 
                        rulemaking procedure to determine whether--
                                    ``(I) standards in effect for 
                                general service lamps should be 
                                amended; and
                                    ``(II) the exclusions for certain 
                                incandescent lamps should be maintained 
                                or discontinued based, in part, on 
                                excluded lamp sales collected by the 
                                Secretary from manufacturers.
                            ``(ii) Scope.--The rulemaking--
                                    ``(I) shall not be limited to 
                                incandescent lamp technologies; and
                                    ``(II) shall include consideration 
                                of a minimum standard of 45 lumens per 
                                watt for general service lamps.
                            ``(iii) Amended standards.--If the 
                        Secretary determines that the standards in 
                        effect for general service lamps should be 
                        amended, the Secretary shall publish a final 
                        rule not later than January 1, 2017, with an 
                        effective date that is not earlier than 3 years 
                        after the date on which the final rule is 
                        published.
                            ``(iv) Phased-in effective dates.--The 
                        Secretary shall consider phased-in effective 
                        dates under this subparagraph after 
                        considering--
                                    ``(I) the impact of any amendment 
                                on manufacturers, retiring and 
                                repurposing existing equipment, 
                                stranded investments, labor contracts, 
                                workers, and raw materials; and
                                    ``(II) the time needed to work with 
                                retailers and lighting designers to 
                                revise sales and marketing strategies.
                            ``(v) Backstop requirement.--If the 
                        Secretary fails to complete a rulemaking in 
                        accordance with clauses (i) through (iv) or if 
                        the final rule does not produce savings that 
                        are greater than or equal to the savings from a 
                        minimum efficacy standard of 45 lumens per 
                        watt, effective beginning January 1, 2020, the 
                        Secretary shall prohibit the manufacture of any 
                        general service lamp that does not meet a 
                        minimum efficacy standard of 45 lumens per 
                        watt.
                            ``(vi) State preemption.--Neither section 
                        327(c) nor any other provision of law shall 
                        preclude California or Nevada from adopting, 
                        effective beginning on or after January 1, 
                        2018--
                                    ``(I) a final rule adopted by the 
                                Secretary in accordance with clauses 
                                (i) through (iv);
                                    ``(II) if a final rule described in 
                                subclause (I) has not been adopted, the 
                                backstop requirement under clause (v); 
                                or
                                    ``(III) in the case of California, 
                                if a final rule described in subclause 
                                (I) has not been adopted, any 
                                California regulations relating to 
                                these covered products adopted pursuant 
                                to State statute in effect as of the 
                                date of enactment of the Energy 
                                Independence and Security Act of 2007.
                    ``(B) Rulemaking before january 1, 2020.--
                            ``(i) In general.--Not later than January 
                        1, 2020, the Secretary shall initiate a 
                        rulemaking procedure to determine whether--
                                    ``(I) standards in effect for 
                                general service lamps should be 
                                amended; and
                                    ``(II) the exclusions for certain 
                                incandescent lamps should be maintained 
                                or discontinued based, in part, on 
                                excluded lamp sales data collected by 
                                the Secretary from manufacturers.
                            ``(ii) Scope.--The rulemaking shall not be 
                        limited to incandescent lamp technologies.
                            ``(iii) Amended standards.--If the 
                        Secretary determines that the standards in 
                        effect for general service lamps should be 
                        amended, the Secretary shall publish a final 
                        rule not later than January 1, 2022, with an 
                        effective date that is not earlier than 3 years 
                        after the date on which the final rule is 
                        published.
                            ``(iv) Phased-in effective dates.--The 
                        Secretary shall consider phased-in effective 
                        dates under this subparagraph after 
                        considering--
                                    ``(I) the impact of any amendment 
                                on manufacturers, retiring and 
                                repurposing existing equipment, 
                                stranded investments, labor contracts, 
                                workers, and raw materials; and
                                    ``(II) the time needed to work with 
                                retailers and lighting designers to 
                                revise sales and marketing strategies.
            ``(7) Federal actions.--
                    ``(A) Comments of secretary.--
                            ``(i) In general.--With respect to any lamp 
                        to which standards are applicable under this 
                        subsection or any lamp specified in section 
                        346, the Secretary shall inform any Federal 
                        entity proposing actions that would adversely 
                        impact the energy consumption or energy 
                        efficiency of the lamp of the energy 
                        conservation consequences of the action.
                            ``(ii) Consideration.--The Federal entity 
                        shall carefully consider the comments of the 
                        Secretary.
                    ``(B) Amendment of standards.--Notwithstanding 
                section 325(n)(1), the Secretary shall not be 
                prohibited from amending any standard, by rule, to 
                permit increased energy use or to decrease the minimum 
                required energy efficiency of any lamp to which 
                standards are applicable under this subsection if the 
                action is warranted as a result of other Federal action 
                (including restrictions on materials or processes) that 
                would have the effect of either increasing the energy 
                use or decreasing the energy efficiency of the product.
            ``(8) Compliance.--
                    ``(A) In general.--Not later than the date on which 
                standards established pursuant to this subsection 
                become effective, or, with respect to high-intensity 
                discharge lamps covered under section 346, the 
                effective date of standards established pursuant to 
                that section, each manufacturer of a product to which 
                the standards are applicable shall file with the 
                Secretary a laboratory report certifying compliance 
                with the applicable standard for each lamp type.
                    ``(B) Contents.--The report shall include the lumen 
                output and wattage consumption for each lamp type as an 
                average of measurements taken over the preceding 12-
                month period.
                    ``(C) Other lamp types.--With respect to lamp types 
                that are not manufactured during the 12-month period 
                preceding the date on which the standards become 
                effective, the report shall--
                            ``(i) be filed with the Secretary not later 
                        than the date that is 12 months after the date 
                        on which manufacturing is commenced; and
                            ``(ii) include the lumen output and wattage 
                        consumption for each such lamp type as an 
                        average of measurements taken during the 12-
                        month period.''.
    (13) Section 325(l)(4)(A) of the Energy Policy and Conservation Act 
(42 U.S.C. 6295(l)(4)(A)) (as amended by section 321(a)(3)(B) of the 
Energy Independence and Security Act of 2007 (121 Stat. 1581)) is 
amended by striking ``only''.
    (14) Section 327(b)(1)(B) of the Energy Policy and Conservation Act 
(42 U.S.C. 6297(b)(1)(B)) (as amended by section 321(d)(3) of the 
Energy Independence and Security Act of 2007 (121 Stat. 1585)) is 
amended--
            (A) in clause (i), by inserting ``and'' after the semicolon 
        at the end;
            (B) in clause (ii), by striking ``; and'' and inserting a 
        period; and
            (C) by striking clause (iii).
    (15) Section 321(e) of the Energy Independence and Security Act of 
2007 (121 Stat. 1586) is amended--
            (A) in the matter preceding paragraph (1), by striking ``is 
        amended'' and inserting ``(as amended by section 306(b)) is 
        amended''; and
            (B) by striking paragraphs (1) and (2) and inserting the 
        following:
            ``(1) in paragraph (5), by striking `or' after the 
        semicolon at the end;
            ``(2) in paragraph (6), by striking the period at the end 
        and inserting `; or'; and''.
    (16) Section 332(a) of the Energy Policy and Conservation Act (42 
U.S.C. 6302(a)) (as amended by section 321(e) of the Energy 
Independence and Security Act of 2007 (121 Stat. 1586)) is amended by 
redesignating the second paragraph (6) as paragraph (7).
    (17) Section 321(30)(C)(ii) of the Energy Policy and Conservation 
Act (42 U.S.C. 6291(30)(C)(ii)) (as amended by section 322(a)(1)(B) of 
the Energy Independence and Security Act of 2007 (121 Stat. 1587)) is 
amended by inserting a period after ``40 watts or higher''.
    (18) Section 322(b) of the Energy Independence and Security Act of 
2007 (121 Stat. 1588)) is amended by striking ``6995(i)'' and inserting 
``6295(i)''.
    (19) Section 327(c) of the Energy Policy and Conservation Act (42 
U.S.C. 6297(c)) (as amended by sections 324(f) of the Energy 
Independence and Security Act of 2007 (121 Stat. 1594)) is amended--
            (A) in paragraph (6), by striking ``or'' after the 
        semicolon at the end;
            (B) in paragraph (8)(B), by striking ``and'' after the 
        semicolon at the end;
            (C) in paragraph (9)--
                    (i) by striking ``except that--'' and all that 
                follows through ``if the Secretary fails to issue'' and 
                inserting ``except that if the Secretary fails to 
                issue'';
                    (ii) by redesignating clauses (i) and (ii) as 
                subparagraphs (A) and (B), respectively; and
                    (iii) by striking the period at the end and 
                inserting a semicolon; and
            (D) by adding at the end the following:
            ``(10) is a regulation for general service lamps that 
        conforms with Federal standards and effective dates;
            ``(11) is an energy efficiency standard for general service 
        lamps enacted into law by the State of Nevada prior to December 
        19, 2007, if the State has not adopted the Federal standards 
        and effective dates pursuant to subsection (b)(1)(B)(ii); or''.
    (20) Section 325(b) of the Energy Independence and Security Act of 
2007 (121 Stat. 1596)) is amended by striking ``6924(c)'' and inserting 
``6294(c)''.
    (b) Title IV--Energy Savings in Buildings and Industry.--(1) 
Section 401 of the Energy Independence and Security Act of 2007 (42 
U.S.C. 17061) is amended--
            (A) in paragraph (2), by striking ``484'' and inserting 
        ``494''; and
            (B) in paragraph (13), by striking ``Agency'' and inserting 
        ``Administration''.
    (2) Section 422 of the Energy Conservation and Production Act (42 
U.S.C. 6872) (as amended by section 411(a) of the Energy Independence 
and Security Act of 2007 (121 Stat. 1600)) is amended by striking 1 of 
the 2 periods at the end of paragraph (5).
    (3) Section 543 of the National Energy Conservation Policy Act (42 
U.S.C. 8253) (as amended by sections 432 and 434(a) of the Energy 
Independence and Security Act of 2007 (121 Stat. 1607, 1614)) is 
amended by redesignating subsection (f) (as added by section 434(a) of 
that Act) as subsection (g).
    (4) Section 305(a)(3)(D)(i) of the Energy Conservation and 
Production Act (42 U.S.C. 6834(a)(3)(D)(i)) (as amended by section 
433(a) of the Energy Independence and Security Act of 2007 (121 Stat. 
1612)) is amended--
            (A) in subclause (I)--
                    (i) by striking ``in fiscal year 2003 (as measured 
                by Commercial Buildings Energy Consumption Survey or 
                Residential Energy Consumption Survey data from the 
                Energy Information Agency'' and inserting ``as measured 
                by the calendar year 2003 Commercial Buildings Energy 
                Consumption Survey or the calendar year 2005 
                Residential Energy Consumption Survey data from the 
                Energy Information Administration''; and
                    (ii) in the table at the end, by striking ``Fiscal 
                Year'' and inserting ``Calendar Year''; and
            (B) in subclause (II)--
                    (i) by striking ``(II) Upon petition'' and 
                inserting the following:
                                    ``(II) Downward adjustment of 
                                numeric requirement.--
                                            ``(aa) In general.--On 
                                        petition''; and
                    (ii) by striking the last sentence and inserting 
                the following:
                                            ``(bb) Exceptions to 
                                        requirement for concurrence of 
                                        secretary.--

                                                    ``(AA) In 
                                                general.--The 
                                                requirement to petition 
                                                and obtain the 
                                                concurrence of the 
                                                Secretary under this 
                                                subclause shall not 
                                                apply to any Federal 
                                                building with respect 
                                                to which the 
                                                Administrator of 
                                                General Services is 
                                                required to transmit a 
                                                prospectus to Congress 
                                                under section 3307 of 
                                                title 40, United States 
                                                Code, or to any other 
                                                Federal building 
                                                designed, constructed, 
                                                or renovated by the 
                                                Administrator if the 
                                                Administrator 
                                                certifies, in writing, 
                                                that meeting the 
                                                applicable numeric 
                                                requirement under 
                                                subclause (I) with 
                                                respect to the Federal 
                                                building would be 
                                                technically 
                                                impracticable in light 
                                                of the specific 
                                                functional needs for 
                                                the building.

                                                    ``(BB) 
                                                Adjustment.--In the 
                                                case of a building 
                                                described in subitem 
                                                (AA), the Administrator 
                                                may adjust the 
                                                applicable numeric 
                                                requirement of 
                                                subclause (I) downward 
                                                with respect to the 
                                                building.''.

    (5) Section 436(c)(3) of the Energy Independence and Security Act 
of 2007 (42 U.S.C. 17092(c)(3)) is amended by striking ``474'' and 
inserting ``494''.
    (6) Section 440 of the Energy Independence and Security Act of 2007 
(42 U.S.C. 17096) is amended by striking ``and 482''.
    (7) Section 373(c) of the Energy Policy and Conservation Act (42 
U.S.C. 6343(c)) (as amended by section 451(a) of the Energy 
Independence and Security Act of 2007 (121 Stat. 1628)) is amended by 
striking ``Administrator'' and inserting ``Secretary''.
    (c) Title V--Energy Savings in Government and Public 
Institutions.--Section 541(3)(A)(i)(II) of the Energy Independence and 
Security Act of 2007 (42 U.S.C. 17151(3)(A)(i)(II)) is amended by 
striking ``and'' after the semicolon at the end and inserting ``or''.
    (d) Effective Date.--This section and the amendments made by this 
section take effect as if included in the Energy Independence and 
Security Act of 2007 (Public Law 110-140; 121 Stat. 1492).

SEC. 162. TECHNICAL CORRECTIONS TO ENERGY POLICY ACT OF 2005.

    (a) Title I--Energy Efficiency.--Section 325(g)(8)(C)(ii) of the 
Energy Policy and Conservation Act (42 U.S.C. 6295(g)(8)(C)(ii)) (as 
added by section 135(c)(2)(B) of the Energy Policy Act of 2005) is 
amended by striking ``20F'' and inserting ``-20F''.
    (b) Effective Date.--This section and the amendments made by this 
section take effect as if included in the Energy Policy Act of 2005 
(Public Law 109-58; 119 Stat. 594).

              Subtitle H--Clean Energy Innovation Centers

SEC. 171. CLEAN ENERGY INNOVATION CENTERS.

    (a) Purpose.--The Secretary shall carry out a program to establish 
Clean Energy Innovation Centers to enhance the Nation's economic, 
environmental, and energy security by promoting commercial deployment 
of clean, indigenous energy alternatives to oil and other fossil fuels, 
reducing greenhouse gas emissions, and ensuring that the United States 
maintains a technological lead in developing and deploying state-of-
the-art energy technologies. To achieve these purposes the program 
shall--
            (1) leverage the expertise and resources of the university 
        and private research communities, industry, venture capital, 
        national laboratories, and other participants in energy 
        innovation to support cross-disciplinary research and 
        development in areas not being served by the private sector in 
        order to develop and transfer innovative clean energy 
        technologies into the marketplace;
            (2) expand the knowledge base and human capital necessary 
        to transition to a low-carbon economy; and
            (3) promote regional economic development by cultivating 
        clusters of clean energy technology firms, private research 
        organizations, suppliers, and other complementary groups and 
        businesses.
    (b) Definitions.--For purposes of this section:
            (1) Allowance.--The term ``allowance'' means an emission 
        allowance under section 721 of the Clean Air Act.
            (2) Center.--The term ``Center'' means a Clean Energy 
        Innovation Center established in accordance with this section.
            (3) Clean energy technology.--The term ``clean energy 
        technology'' means a technology that--
                    (A) produces energy from solar, wind, geothermal, 
                biomass, tidal, wave, ocean, and other renewable energy 
                resources (as such term is defined in section 610 of 
                the Public Utility Regulatory Policies Act of 1978);
                    (B) more efficiently transmits, distributes, or 
                stores energy;
                    (C) enhances energy efficiency for buildings and 
                industry, including combined heat and power;
                    (D) enables the development of a Smart Grid (as 
                described in section 1301 of the Energy Independence 
                and Security Act of 2007 (42 U.S.C. 17381)), including 
                integration of renewable energy resources and 
                distributed generation, demand response, demand side 
                management, and systems analysis;
                    (E) produces an advanced or sustainable material 
                with energy or energy efficiency applications;
                    (F) enhances water security through improved water 
                management, conservation, distribution, and end use 
                applications; or
                    (G) improves energy efficiency for transportation, 
                including electric vehicles.
            (4) Cluster.--The term ``cluster'' means a concentration of 
        firms directly involved in the research, development, finance, 
        and commercialization of clean energy technologies whose 
        geographic proximity facilitates utilization and sharing of 
        skilled human resources, infrastructure, research facilities, 
        educational and training institutions, venture capital, and 
        input suppliers.
            (5) Project.--The term ``project'' means an activity with 
        respect to which a Center provides support under subsection 
        (e).
            (6) Qualifying entity.--The term ``qualifying entity'' 
        means each of the following:
                    (A) A research university.
                    (B) A State institution with a focus on the 
                advancement of clean energy technologies.
                    (C) A nongovernmental organization with research or 
                commercialization expertise in clean energy technology 
                development.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (8) Technology focus.--The term ``technology focus'' means 
        the unique technology area in which a Center will specialize, 
        and may include solar electricity, fuels from solar energy, 
        batteries and energy storage, electricity grid systems and 
        devices, energy efficient building systems and design, advanced 
        materials, modeling and simulation, and other clean energy 
        technology areas designated by the Secretary.
            (9) Translational research.--The term ``translational 
        research'' means clean energy technology research to coordinate 
        basic or applied research with technical and commercial 
        applications to enable promising discoveries or inventions to 
        attract investment sufficient for market penetration and 
        diffusion.
    (c) Role of the Secretary.--The Secretary shall--
            (1) have ultimate responsibility for, and oversight of, all 
        aspects of the program under this section;
            (2) provide for the distribution of allowances to consortia 
        for the establishment of 8 Centers pursuant to this section, 
        with each Center designated a unique technology focus area;
            (3) coordinate the innovation activities of Centers with 
        those occurring through other Department of Energy entities, 
        including the National Laboratories, the Advanced Research 
        Projects Agency--Energy, and Energy Frontier Research Centers, 
        and within industry, and to avoid duplication of research, by 
        annually--
                    (A) issuing guidance regarding national energy 
                research and development priorities and strategic 
                objectives; and
                    (B) convening a conference of staff of the 
                Department of Energy and representatives from such 
                other entities to share research results, program 
                plans, and opportunities for collaboration.
    (d) Consortium.--A consortium shall be eligible to receive 
allowances to support the establishment of a Center under this section 
if--
            (1) it is composed of--
                    (A) 2 research universities with a combined annual 
                research budget of $500,000,000; and
                    (B) no fewer than 1 additional qualifying entity;
            (2) its members have established a binding agreement that 
        documents--
                    (A) the structure of the partnership agreement;
                    (B) the governance and management structure to 
                enable cost-effective implementation of the program;
                    (C) an intellectual property management policy;
                    (D) conflicts of interest policy consistent with 
                subsection (e)(4);
                    (E) an accounting structure that meets the 
                requirements of the Department and can be audited under 
                subsection (f)(3); and
                    (F) has an Advisory Board consistent with 
                subsection (e)(3);
            (3) it receives financial contributions from States, 
        consortium participants, or other non-Federal sources, to be 
        used pursuant to subsection (e)(2);
            (4) it is part of an existing cluster or demonstrates high 
        potential to develop a new cluster; and
            (5) it operates as a nonprofit organization.
    (e) Clean Energy Innovation Centers.--
            (1) Role.--Centers shall provide support to activities 
        leading to commercial deployment of clean energy technologies 
        pursuant to the purposes of this section through issuance of 
        awards to projects managed by qualifying entities and other 
        entities meeting the Center's project criteria, including 
        national laboratories. Each Center shall--
                    (A) develop and publish for public review and 
                comment proposed plans, programs, and project selection 
                criteria;
                    (B) submit an annual report to the Secretary 
                summarizing the Center's activities, organizational 
                expenditures, and Board members, which shall include a 
                certification of compliance with conflict of interest 
                policies and a description of each project in the 
                research portfolio;
                    (C) establish policies--
                            (i) regarding intellectual property 
                        developed as a result of Center awards and 
                        other forms of technology support that 
                        encourage individual ingenuity and invention 
                        while speeding knowledge transfer and 
                        facilitating the establishment of rapid 
                        commercialization pathways;
                            (ii) to prevent resources provided to the 
                        Center from being used to displace private 
                        sector investment likely to otherwise occur, 
                        including investment from private sector 
                        entities which are members of the consortium;
                            (iii) to facilitate the participation of 
                        private investment firms or other private 
                        entities that invest in clean energy 
                        technologies to perform due diligence on award 
                        proposals, to participate in the award review 
                        process, and to provide guidance to projects 
                        supported by the Center; and
                            (iv) to facilitate the participation of 
                        entrepreneurs with a demonstrated history of 
                        commercializing clean energy technologies;
                    (D) oversee project solicitations, review proposed 
                projects, and select projects for awards; and
                    (E) monitor project implementation.
            (2) Use and distribution of awards by centers.--A Center 
        shall allocate awards and other support for--
                    (A) clean energy technology projects conducting 
                translational research and related activities, at least 
                40 percent of which shall be utilized for projects 
                related to the Center's technology focus; and
                    (B) administrative expenses, which may constitute 
                no more than 10 percent of the award.
            (3) Advisory boards.--
                    (A) In general.--Each Center shall establish an 
                Advisory Board whose members shall have extensive and 
                relevant scientific, technical, industry, financial, or 
                research management expertise. The Advisory Board shall 
                review the Center's proposed plans, programs, project 
                selection criteria, and projects and shall ensure that 
                projects selected for awards meet the conflict of 
                interest policies of the Center. Advisory Board members 
                other than those representing consortium members shall 
                serve for no more than three years and must comply with 
                conflict of interest provisions.
                    (B) Members.--Each Advisory Board shall consist 
                of--
                            (i) 5 members selected by the consortium's 
                        research universities;
                            (ii) 2 members selected by the consortium's 
                        other qualifying entities; and
                            (iii) 2 members selected at large by other 
                        Board members to represent the entrepreneur and 
                        venture capital communities.
                Individuals appointed under clause (iii) shall not be 
                State or Federal employees or affiliated with the 
                consortium's qualified entities.
                    (C) Nonvoting members.--The Board shall also 
                include 1 nonvoting member appointed by the Secretary.
                    (D) Compensation.--Members of an Advisory Board may 
                receive reimbursement for travel expenses and a 
                reasonable stipend.
            (4) Conflict of interest.--
                    (A) Procedures.--Centers shall establish procedures 
                to ensure that employees or consortia designees for 
                Center activities who are in decisionmaking capacities 
                shall--
                            (i) disclose any financial interests in, or 
                        financial relationships with, applicants for or 
                        recipients of awards under paragraph (1), 
                        including those of his or her spouse or minor 
                        child, unless such relationships or interests 
                        would be considered to be remote or 
                        inconsequential; and
                            (ii) recuse himself or herself from any 
                        funding decision for projects in which he or 
                        she has a personal financial interest.
                    (B) Disqualification and revocation.--The Secretary 
                may disqualify an application or revoke allowances 
                distributed to the Center or awards provided under 
                paragraph (1), if cognizant officials of the Center 
                fail to comply with procedures required under 
                subparagraph (A).
    (f) Distribution of Allowances to Clean Energy Innovation 
Centers.--
            (1) Selection and schedule.--Allowances to support the 
        establishment of a Center shall be distributed through a 
        competitive process. Not later than 120 days after the date of 
        enactment of this Act, the Secretary shall solicit proposals 
        from eligible consortia to establish Centers, which shall be 
        submitted not later than 180 days after the date of enactment 
        of this Act. The Secretary shall select the program consortia 
        not later than 270 days after the date of enactment of this Act 
        pursuant to subsection (d). The Secretary shall award 3 grants 
        for the establishment of 3 Centers of Excellence to be located 
        on the campus of 1890 Land Grant Institution (as defined in 
        section 2 of the Agricultural Research, Extension, and 
        Education Reform Act of 1998 (7 U.S.C. 7061)).
            (2) Term and use of allowances.--Allowances distributed to 
        Centers shall be used to provide awards pursuant to subsection 
        (e)(1). The amount of allowances distributed to support the 
        establishment of a Center under this section shall not be less 
        than 10 and not more than 30 percent of the allowances 
        allocated under section 782(h) of the Clean Air Act, each year 
        for a 6 year period. Centers shall be eligible to compete for 
        additional allowance distribution after the expiration of the 
        initial period. Centers shall establish award periods for 
        individual awards. The transfer of allowances to a Center shall 
        occur at the start of each calendar year.
            (3) Audit.--Each Center shall conduct an annual audit to 
        determine the extent to which allowances distributed to the 
        Center, and awards under subsection (e) have been utilized in a 
        manner consistent with this section. The auditor shall transmit 
        a report of the results of the audit to the Secretary and to 
        the Government Accountability Office. The Secretary shall 
        include such report in the annual report to Congress, along 
        with a plan to remedy any deficiencies cited in the report. The 
        Government Accountability Office may review such audits as 
        appropriate and shall have full access to the books, records, 
        and personnel of the Center to ensure that allowances 
        distributed to the Center, and awards made under subsection 
        (e), have been utilized in a manner consistent with this 
        section.

                  Subtitle I--Marine Spatial Planning

SEC. 181. STUDY OF OCEAN RENEWABLE ENERGY AND TRANSMISSION PLANNING AND 
              SITING.

    (a) Definitions.--In this section:
            (1) Marine spatial plan.--The term ``marine spatial plan'' 
        means the analysis and allocation of ocean space for various 
        uses to achieve ecological, economic, and social objectives, 
        based on the principle of ecosystem-based management.
            (2) Marine spatial planning.--The term ``marine spatial 
        planning'' means the process of developing a marine spatial 
        plan.
            (3) Ecosystem-based management.--The term ``ecosystem-based 
        management'' means a management approach that ensures the 
        future ecological and economic sustainability of natural 
        resources by--
                    (A) accounting for all ecosystem interactions and 
                direct, indirect, and cumulative impacts of human 
                activities on the ecosystem;
                    (B) emphasizing protection of ecosystem structure, 
                functions, patterns, and processes; and
                    (C) maintaining ecosystems in a healthy and 
                resilient condition.
            (4) Offshore renewable energy.--The term ``offshore 
        renewable energy'' means energy generated from offshore wind or 
        offshore hydrokinetic (wave, tidal, ocean current, and tidal-
        current) energy technologies.
            (5) Offshore renewable energy facility.--The term 
        ``offhsore renewable energy facility'' means a facility that 
        generates offshore renewable energy or any offshore 
        transmission line associated with such facility.
    (b) Study.--
            (1) In general.--As soon as practicable after the date of 
        enactment of this section, the Federal Energy Regulatory 
        Commission, the Secretary of the Interior, and the National 
        Oceanic and Atmospheric Administration, in consultation with 
        the Council on Environmental Quality and, as appropriate, 
        coastal States, regional organizations of coastal States, and 
        relevant nongovernmental organizations, shall jointly conduct a 
        study of the potential for marine spatial planning to 
        facilitate the development of offshore renewable energy 
        facilities in a manner that protects and maintains coastal and 
        marine ecosystem health.
            (2) Requirements.--The study under paragraph (1) shall 
        include--
                    (A) identification of the steps involved in 
                regional marine spatial planning for the siting of 
                offshore renewable energy facilities;
                    (B) a recommended approach for the development of 
                regional marine spatial plans for the siting of 
                offshore renewable energy facilities that provides 
                for--
                            (i) the participation of relevant Federal 
                        agencies and State governments;
                            (ii) coordination, to the maximum extent 
                        practicable, with any marine spatial planning 
                        undertaken by States;
                            (iii) public input; and
                            (iv) the periodic revision of such plans as 
                        necessary to account for significant new 
                        information and ensure achievement of plan 
                        objectives;
                    (C) identification of required elements of such 
                regional marine spatial plans, including rules that 
                Federal agencies shall apply to applications for any 
                authorizations required under existing Federal law to 
                construct or operate offshore renewable energy 
                facilities within areas covered by such plans;
                    (D) an assessment of the adequacy of existing data, 
                including baseline environmental data, to support such 
                marine spatial planning and identification of gaps in 
                such data and the studies needed to fill such gaps;
                    (E) an assessment of the resources required to 
                carry out such marine spatial planning;
                    (F) recommended mechanisms for the formal adoption 
                and implementation of regional marine spatial plans for 
                the development of offshore renewable energy facilities 
                by relevant Federal agencies;
                    (G) identification of any additional authority 
                relevant Federal agencies would need to adopt and 
                implement regional marine spatial plans for the 
                development of offshore renewable energy facilities; 
                and
                    (H) such other recommendations as appropriate.
            (3) Report.--Not later than 6 months after the date of 
        enactment of this section, the Federal Energy Regulatory 
        Commission, the Secretary of the Interior, and the National 
        Oceanic and Atmospheric Administration shall jointly publish 
        the findings and recommendations of the study conducted 
        pursuant to this subsection and shall accept public comment for 
        at least 30 days after such publication. Following 
        consideration of any public comments, and not later than 8 
        months after the date of enactment of this section, the Federal 
        Energy Regulatory Commission, the Secretary of the Interior, 
        and the National Oceanic and Atmospheric Administration shall 
        jointly submit to Congress and the Council on Environmental 
        Quality the findings and recommendations of the study conducted 
        pursuant to this subsection.
    (c) Assessment of Report.--
            (1) In general.--Not later than 4 months after the date of 
        submission of the report required under subsection (b)(3), the 
        Council on Environmental Quality shall assess the 
        recommendations of such report, issue a written determination 
        as to whether the recommended approach to marine spatial 
        planning should be implemented, and transmit such written 
        determination to the relevant Federal agencies and Congress.
            (2) Coordination for recommended approach.--If the Council 
        on Environmental Quality determines that the recommended 
        approach to marine spatial planning should be implemented, the 
        relevant Federal agencies shall implement such approach no 
        later than 18 months after the written determination required 
        by paragraph (1), and the Council on Environmental Quality 
        shall coordinate such implementation. At the time of the 
        written determination required by paragraph (1), the Council on 
        Environmental Quality shall notify Congress if the relevant 
        Federal agencies lack authority to carry out any aspect of the 
        recommended approach.
            (3) Alternative approach.--If the Council on Environmental 
        Quality determines that the recommended approach to marine 
        spatial planning should not be implemented, the Council on 
        Environmental Quality shall formulate an alternative approach 
        and submit such alternative approach to the relevant Federal 
        agencies and Congress at the time of the written determination 
        required by paragraph (1).
    (d) Relationship to Existing Law.--Nothing in this section shall 
affect or be construed to affect any law, regulation, or memoranda of 
understanding governing the development of offshore renewable energy 
facilities in effect prior to the implementation of the recommended or 
alternative approach pursuant to subsection (c).
    (e) Authorization.--There are authorized to be appropriated such 
sums as may be necessary to carry out this section.

                      TITLE II--ENERGY EFFICIENCY

            Subtitle A--Building Energy Efficiency Programs

SEC. 201. GREATER ENERGY EFFICIENCY IN BUILDING CODES.

    Section 304 of the Energy Conservation and Production Act (42 
U.S.C. 6833) is amended to read as follows:

``SEC. 304. GREATER ENERGY EFFICIENCY IN BUILDING CODES.

    ``(a) Energy Efficiency Targets.--
            ``(1) In general.--Except as provided in paragraph (2) or 
        (3), the national building code energy efficiency target for 
        the national average percentage improvement of a building's 
        energy performance when built to a code meeting the target 
        shall be--
                    ``(A) effective on the date of enactment of the 
                American Clean Energy and Security Act of 2009, 30 
                percent reduction in energy use relative to a 
                comparable building constructed in compliance with the 
                baseline code;
                    ``(B) effective January 1, 2014, for residential 
                buildings, and January 1, 2015, for commercial 
                buildings, 50 percent reduction in energy use relative 
                to the baseline code; and
                    ``(C) effective January 1, 2017, for residential 
                buildings, and January 1, 2018, for commercial 
                buildings, and every 3 years thereafter, respectively, 
                through January 1, 2029, and January 1, 2030, 5 percent 
                additional reduction in energy use relative to the 
                baseline code.
            ``(2) Consensus-based codes.--If on any effective date 
        specified in paragraph (1)(A), (B), or (C) a successor code to 
        the baseline codes provides for greater reduction in energy use 
        than is required under paragraph (1), the overall percentage 
        reduction in energy use provided by that successor code shall 
        be the national building code energy efficiency target.
            ``(3) Targets established by secretary.--The Secretary may 
        by rule establish a national building code energy efficiency 
        target for residential or commercial buildings achieving 
        greater reductions in energy use than the targets prescribed in 
        paragraph (1) or (2) if the Secretary determines that such 
        greater reductions in energy use can be achieved with a code 
        that is life cycle cost-justified and technically feasible. The 
        Secretary may by rule establish a national building code energy 
        efficiency target for residential or commercial buildings 
        achieving a reduction in energy use that is greater than zero 
        but less than the targets prescribed in paragraph (1) or (2) if 
        the Secretary determines that such lesser target is the maximum 
        reduction in energy use that can be achieved through a code 
        that is life cycle cost-justified and technically feasible.
            ``(4) Additional reductions in energy use.--Effective on 
        January 1, 2033, and once every 3 years thereafter, the 
        Secretary shall determine, after notice and opportunity for 
        comment, whether further energy efficiency building code 
        improvements for residential or commercial buildings, 
        respectively, are life cycle cost-justified and technically 
        feasible, and shall establish updated national building code 
        energy efficiency targets that meet such criteria.
            ``(5) Zero-net-energy buildings.--In setting targets under 
        this subsection, the Secretary shall consider ways to support 
        the deployment of distributed renewable energy technology, and 
        shall seek to achieve the goal of zero-net-energy commercial 
        buildings established in section 422 of the Energy Independence 
        and Security Act of 2007 (42 U.S.C. 17082).
            ``(6) Baseline code.--For purposes of this section, the 
        term `baseline code' means--
                    ``(A) for residential buildings, the 2006 
                International Energy Conservation Code (IECC) published 
                by the International Code Council; and
                    ``(B) for commercial buildings, the code published 
                in ASHRAE Standard 90.1-2004.
            ``(7) Consultation.--In establishing the targets required 
        by this section, the Secretary shall consult with the Director 
        of the National Institute of Standards and Technology.
    ``(b) National Energy Efficiency Building Codes.--
            ``(1) Requirement.--
                    ``(A) In general.--There shall be established 
                national energy efficiency building codes under this 
                subsection, for residential and commercial buildings, 
                sufficient to meet each of the national building code 
                energy efficiency targets established under subsection 
                (a), not later than the date that is one year after the 
                deadline for establishment of each such target.
                    ``(B) Existing code.--If the Secretary finds prior 
                to the date one year after the deadline for 
                establishing a target that one or more energy 
                efficiency building codes published by a recognized 
                consensus-based code development organization meet or 
                exceed the established target, the Secretary shall 
                select the code that meets the target with the highest 
                efficiency in the most cost-effective manner, and such 
                code shall be the national energy efficiency building 
                code.
                    ``(C) Requirement to establish code.--If the 
                Secretary does not make a finding under subparagraph 
                (B), the national energy efficiency building code shall 
                be established by rule by the Secretary under paragraph 
                (2).
            ``(2) Establishment by secretary.--
                    ``(A) Procedure.--In order to establish a national 
                energy efficiency building code as required under 
                paragraph (1)(C), the Secretary shall--
                            ``(i) not later than six months prior to 
                        the effective date for each target, review 
                        existing and proposed codes published or under 
                        review by recognized consensus-based code 
                        development organizations;
                            ``(ii) determine the percentage of energy 
                        efficiency improvements that are or would be 
                        achieved in such published or proposed code 
                        versions relative to the target;
                            ``(iii) propose improvements to such 
                        published or proposed code versions sufficient 
                        to meet or exceed the target; and
                            ``(iv) unless a finding is made under 
                        paragraph (1)(B) with respect to a code 
                        published by a recognized consensus-based code 
                        development organization, adopt a code that 
                        meets or exceeds the relevant national building 
                        code energy efficiency target by not later than 
                        one year after the effective date of such 
                        target.
                    ``(B) Calculations.--Each code established by the 
                Secretary under this paragraph shall be set at the 
                maximum level the Secretary determines is life cycle 
                cost-justified and technically feasible, in accordance 
                with the following:
                            ``(i) Savings calculations.--Calculations 
                        of energy savings shall take into account the 
                        typical lifetimes of different products, 
                        measures, and system configurations.
                            ``(ii) Cost-effectiveness calculations.--
                        Calculations of life cycle cost-effectiveness 
                        shall be based on life cycle cost methods and 
                        procedures under section 544 of the National 
                        Energy Conservation Policy Act (42 U.S.C. 
                        8254), but shall incorporate to the extent 
                        feasible externalities such as impacts on 
                        climate change and on peak energy demand that 
                        are not already incorporated in assumed energy 
                        costs.
                    ``(C) Considerations.--In developing a national 
                energy efficiency building code under this paragraph, 
                the Secretary shall consider--
                            ``(i) for residential codes--
                                    ``(I) residential building 
                                standards published or proposed by 
                                ASHRAE;
                                    ``(II) residential building codes 
                                published or proposed in the 
                                International Energy Conservation Code 
                                (IECC);
                                    ``(III) data from the Residential 
                                Energy Services Network (RESNET) on 
                                compliance measures utilized by 
                                consumers to qualify for the 
                                residential energy efficiency tax 
                                credits established under the Energy 
                                Policy Act of 2005;
                                    ``(IV) data and information from 
                                the Department of Energy's Building 
                                America Program;
                                    ``(V) data and information from the 
                                Energy Star New Homes program;
                                    ``(VI) data and information from 
                                the New Building Institute and similar 
                                organizations; and
                                    ``(VII) standards for practices and 
                                materials to achieve cool roofs in 
                                residential buildings, taking into 
                                consideration reduced air conditioning 
                                energy use as a function of cool roofs, 
                                the potential reduction in global 
                                warming from increased solar 
                                reflectance from buildings, and cool 
                                roofs criteria in State and local 
                                building codes and in national and 
                                local voluntary programs; and
                            ``(ii) for commercial codes--
                                    ``(I) commercial building standards 
                                proposed by ASHRAE;
                                    ``(II) commercial building codes 
                                proposed in the International Energy 
                                Conservation Code (IECC);
                                    ``(III) the Core Performance 
                                Criteria published by the New Buildings 
                                Institute;
                                    ``(IV) data and information 
                                developed by the Director of the 
                                Commercial High-Performance Green 
                                Building Office of the Department of 
                                Energy and any public-private 
                                partnerships established under that 
                                Office;
                                    ``(V) data and information from the 
                                Energy Star for Buildings program;
                                    ``(VI) data and information from 
                                the New Building Institute, RESNET, and 
                                similar organizations; and
                                    ``(VII) standards for practices and 
                                materials to achieve cool roofs in 
                                commercial buildings, taking into 
                                consideration reduced air conditioning 
                                energy use as a function of cool roofs, 
                                the potential reduction in global 
                                warming from increased solar 
                                reflectance from buildings, and cool 
                                roofs criteria in State and local 
                                building codes and in national and 
                                local voluntary programs.
                    ``(D) Consultation.--In establishing any national 
                energy efficiency building code required by this 
                section, the Secretary shall consult with the Director 
                of the National Institute of Standards and Technology.
            ``(3) Consensus standard assistance.--(A) To support the 
        development of consensus standards that may provide the basis 
        for national energy efficiency building codes, minimize 
        duplication of effort, encourage progress through consensus, 
        and facilitate the development of greater building efficiency, 
        the Secretary shall provide assistance to recognized consensus-
        based code development organizations to develop, and where the 
        relevant code has been adopted as the national code, 
        disseminate consensus based energy efficiency building codes as 
        provided in this paragraph.
            ``(B) Upon a finding by the Secretary that a code developed 
        by such an organization meets a target established under 
        subsection (a), the Secretary shall--
                    ``(i) send notice of the Secretary's finding to all 
                duly authorized or appointed State and local code 
                agencies; and
                    ``(ii) provide sufficient support to such an 
                organization to make the code available on the 
                Internet, or to accomplish distribution of such code to 
                all such State and local code agencies at no cost to 
                the State and local code agencies.
            ``(C) The Secretary may contract with such an organization 
        and with other organizations with expertise on codes to provide 
        training for State and local code officials and building 
        inspectors in the implementation and enforcement of such code.
            ``(D) The Secretary may provide grants and other support to 
        such an organization to--
                    ``(i) develop appropriate refinements to such code; 
                and
                    ``(ii) support analysis of options for improvements 
                in the code to meet the next scheduled target.
            ``(4) Code developed by secretary.--If the Secretary 
        establishes a national energy efficiency building code under 
        paragraph (2), the Secretary shall--
                    ``(A) to the extent that such code is based on a 
                prior code developed by a recognized consensus-based 
                code development organization, negotiate and provide 
                appropriate compensation to such organization for the 
                use of the code materials that remain in the code 
                established by the Secretary; and
                    ``(B) disseminate the national energy efficiency 
                building codes to State and local code officials, and 
                support training and provide guidance and technical 
                assistance to such officials as appropriate.
    ``(c) State Adoption of Energy Efficiency Building Codes.--
            ``(1) Requirement.--Not later than 1 year after a national 
        energy efficiency building code for residential or commercial 
        buildings is established or revised under subsection (b), each 
        State--
                    ``(A) shall--
                            ``(i) review and update the provisions of 
                        its building code regarding energy efficiency 
                        to meet or exceed the target met in the new 
                        national code, to achieve equivalent or greater 
                        energy savings;
                            ``(ii) document, where local governments 
                        establish building codes, that local 
                        governments representing not less than 80 
                        percent of the State's urban population have 
                        adopted the new national code, or have adopted 
                        local codes that meet or exceed the target met 
                        in the new national code to achieve equivalent 
                        or greater energy savings; or
                            ``(iii) adopt the new national code; and
                    ``(B) shall provide a certification to the 
                Secretary demonstrating that energy efficiency building 
                code provisions that apply throughout the State meet or 
                exceed the target met by the new national code, to 
                achieve equivalent or greater energy savings.
            ``(2) Confirmation.--
                    ``(A) Requirement.--Not later than 90 days after a 
                State certification is provided under paragraph (1)(B), 
                the Secretary shall determine whether the State's 
                energy efficiency building code provisions meet the 
                requirements of this subsection.
                    ``(B) Acceptance by secretary.--If the Secretary 
                determines under subparagraph (A) that the State's 
                energy efficiency building code or codes meet the 
                requirements of this subsection, the Secretary shall 
                accept the certification.
                    ``(C) Deficiency notice.--If the Secretary 
                determines under subparagraph (A) that the State's 
                building code or codes do not meet the requirements of 
                this subsection, the Secretary shall identify the 
                deficiency in meeting the national building code energy 
                efficiency target, and, to the extent possible, 
                indicate areas where further improvement in the State's 
                code provisions would allow the deficiency to be 
                eliminated.
                    ``(D) Revision of code and recertification.--A 
                State may revise its code or codes and submit a 
                recertification under paragraph (1)(B) to the Secretary 
                at any time.
            ``(3) Compliant code.--For the purposes of meeting the 
        target described in subsection (a)(1)(A) for residential 
        buildings, a State that adopts the code represented in 
        California's Title 24-2009 by the date two years after the date 
        of enactment of the American Clean Energy and Security Act of 
        2009 shall be considered to have met the requirements of this 
        subsection for the applicable period.
    ``(d) Application of National Code to State and Local 
Jurisdictions.--
            ``(1) In general.--Upon the expiration of 1 year after a 
        national energy efficiency building code is established under 
        subsection (b), in any jurisdiction where the State has not had 
        a certification relating to that code accepted by the Secretary 
        under subsection (c)(2)(B), and the local government has not 
        had a certification relating to that code accepted by the 
        Secretary under subsection (e)(6)(B), the national code shall 
        become the applicable energy efficiency building code for such 
        jurisdiction.
            ``(2) State legislative adoption.--In a State in which the 
        relevant building energy code is adopted legislatively, the 
        deadline in paragraph (1) shall not be earlier than 1 year 
        after the first day that the legislature meets following 
        establishment of a national energy efficiency building code.
            ``(3) Violations.--It shall be a violation of this section 
        for an owner or builder of a building to knowingly occupy, 
        permit occupancy of, or convey the building if the building is 
        subject to the requirements of--
                    ``(A) a State energy efficiency building code with 
                respect to which a certification has been accepted by 
                the Secretary under subsection (c)(2)(B);
                    ``(B) a local energy efficiency building code with 
                respect to which a certification has been accepted by 
                the Secretary under subsection (e)(6)(B); or
                    ``(C) a national energy efficiency building code 
                adopted under subsection (c)(1)(A)(i) or made 
                applicable under paragraph (1) of this subsection,
        if the building was constructed out of compliance with such 
        code.
    ``(e) State Enforcement of Energy Efficiency Building Codes.--
            ``(1) In general.--Each State, or where applicable under 
        State law each local government, shall implement and enforce 
        applicable State or local codes with respect to which a 
        certification was accepted by the Secretary under subsection 
        (c)(2)(B) or paragraph (6)(B) of this subsection, or the 
        national energy efficiency building codes, as provided in this 
        subsection.
            ``(2) State certification.--Not later than 2 years after 
        the date of a certification under subsection (c)(1) or the 
        establishment of a national energy efficiency building code 
        under subsection (b), each State shall certify that it has--
                    ``(A) achieved compliance with--
                            ``(i) State codes, or, as provided under 
                        State law, local codes, with respect to which a 
                        certification was accepted by the Secretary 
                        under subsection (c)(2)(B); or
                            ``(ii) the national energy efficiency 
                        building code, as applicable; or
                    ``(B) for any certification submitted within 7 
                years after the date of enactment of the American Clean 
                Energy and Security Act of 2009, made significant 
                progress toward achieving such compliance.
            ``(3) Achieving compliance.--A State shall be considered to 
        achieve compliance with a code described in paragraph (2)(A) if 
        at least 90 percent of new and substantially renovated building 
        space in that State in the preceding year upon inspection meets 
        the requirements of the code. A certification under paragraph 
        (2) shall include documentation of the rate of compliance based 
        on--
                    ``(A) independent inspections of a random sample of 
                the new and substantially renovated buildings covered 
                by the code in the preceding year; or
                    ``(B) an alternative method that yields an accurate 
                measure of compliance as determined by the Secretary.
            ``(4) Significant progress.--A State shall be considered to 
        have made significant progress toward achieving compliance with 
        a code described in paragraph (2)(A) if--
                    ``(A) the State has developed a plan, including for 
                hiring enforcement staff, providing training, providing 
                manuals and checklists, and instituting enforcement 
                programs, designed to achieve full compliance within 5 
                years after the date of the adoption of the code;
                    ``(B) the State is taking significant, timely, and 
                measurable action to implement that plan;
                    ``(C) the State has not reduced its expenditures 
                for code enforcement; and
                    ``(D) at least 50 percent of new and substantially 
                renovated building space in the State in the preceding 
                year upon inspection meets the requirements of the 
                code.
            ``(5) Secretary's determination.--Not later than 90 days 
        after a State certification under paragraph (2), the Secretary 
        shall determine whether the State has demonstrated that it has 
        complied with the requirements of this subsection, including 
        accurate measurement of compliance, or that it has made 
        significant progress toward compliance. If such determination 
        is positive, the Secretary shall accept the certification. If 
        the determination is negative, the Secretary shall identify the 
        areas of deficiency.
            ``(6) Out of compliance.--
                    ``(A) In general.--Any State for which the 
                Secretary has not accepted a certification under 
                paragraph (5) by a deadline established under this 
                subsection is out of compliance with this section.
                    ``(B) Local compliance.--In any State that is out 
                of compliance with this section as provided in 
                subparagraph (A), a local government may be in 
                compliance with this section by meeting all 
                certification requirements applicable to the State.
                    ``(C) Noncompliance.--Any State that is not in 
                compliance with this section, as provided in 
                subparagraph (A), shall, until the State regains such 
                compliance, be ineligible to receive--
                            ``(i) emission allowances pursuant to 
                        subsection (h)(1);
                            ``(ii) Federal funding in excess of that 
                        State's share (calculated according to the 
                        allocation formula in section 363 of the Energy 
                        Policy and Conservation Act (42 U.S.C. 6323)) 
                        of $125,000,000 each year; and
                            ``(iii) for--
                                    ``(I) the first year for which the 
                                State is out of compliance, 25 percent 
                                of any additional funding or other 
                                items of monetary value otherwise 
                                provided under the American Clean 
                                Energy and Security Act of 2009;
                                    ``(II) the second year for which 
                                the State is out of compliance, 50 
                                percent of any additional funding or 
                                other items of monetary value otherwise 
                                provided under the American Clean 
                                Energy and Security Act of 2009;
                                    ``(III) the third year for which 
                                the State is out of compliance, 75 
                                percent of any additional funding or 
                                other items of monetary value otherwise 
                                provided under the American Clean 
                                Energy and Security Act of 2009; and
                                    ``(IV) the fourth and subsequent 
                                years for which the State is out of 
                                compliance, 100 percent of any 
                                additional funding or other items of 
                                monetary value otherwise provided under 
                                the American Clean Energy and Security 
                                Act of 2009.
    ``(f) Federal Enforcement.--Where a State fails and local 
governments in that State also fail to enforce the applicable State or 
national energy efficiency building codes, the Secretary shall enforce 
such codes, as follows:
            ``(1) The Secretary shall establish, by rule, within 2 
        years after the date of enactment of the American Clean Energy 
        and Security Act of 2009, an energy efficiency building code 
        enforcement capability.
            ``(2) Such enforcement capability shall be designed to 
        achieve 90 percent compliance with such code in any State 
        within 1 year after the date of the Secretary's determination 
        that such State is out of compliance with this section.
            ``(3) The Secretary may set and collect reasonable 
        inspection fees to cover the costs of inspections required for 
        such enforcement. Revenue from fees collected shall be 
        available to the Secretary to carry out the requirements of 
        this section upon appropriation.
    ``(g) Enforcement Procedures.--(1) The Secretary shall assess a 
civil penalty for violations of this section, pursuant to subsection 
(d)(3), in accordance with the procedures described in section 333(d) 
of the Energy Policy and Conservation Act (42 U.S.C. 6303). The United 
States district courts shall also have jurisdiction to restrain any 
violation of this section or rules adopted thereunder, in accordance 
with the procedures described in section 334 of the Energy Policy and 
Conservation Act (42 U.S.C. 6304).
    ``(2) Each day of unlawful occupancy shall be considered a separate 
violation.
    ``(3) In the event a building constructed out of compliance with 
the applicable code has been conveyed by a knowing builder or knowing 
seller to an unknowing purchaser, the builder or seller shall be the 
violator.
    ``(h) Federal Support.--
            ``(1) Allowance allocation for state compliance.--Not later 
        than June 1, 2011, and on that date in each year thereafter, 
        the Administrator shall provide emission allowances to the SEED 
        Account for each State that the Secretary identifies as a State 
        from which he has accepted the State's certification under 
        subsection (e)(5) for compliance with the then current national 
        energy efficiency building codes. Such allowances shall be 
        distributed from an amount of 0.5 percent of the allowances 
        made available for each year pursuant to the American Clean 
        Energy and Security Act of 2009 to each State in accordance 
        with a formula established by the Secretary as follows:
                    ``(A) One-fifth in an equal amount to each of the 
                50 States and United States territories.
                    ``(B) Two-fifths as a function of the relative 
                energy use in all buildings in each State in the most 
                recent year for which data is available.
                    ``(C) Two-fifths based on the number of building 
                construction starts recorded in each State, the number 
                of new building permits applied for in each State, or 
                other relevant available data indicating building 
                activity in each State, in the judgment of the 
                Secretary, for the year prior to the year of the 
                allocation.
            ``(2) Allowance allocation to local governments.--In the 
        instance that the Secretary certifies that one or more local 
        governments are in compliance with this section pursuant to 
        subsection (e)(6)(B), the Administrator shall provide to each 
        such local government the portion of the emission allowances 
        that would have been provided to that State as a function of 
        the population of that locality as a proportion of the 
        population of that State as a whole.
            ``(3) Unallocated allowances.--To the extent that 
        allowances are not provided to State or local governments for 
        lack of certification in any year, those allowances shall be 
        added to the amount provided to those States and local 
        governments that are certified as eligible in that year.
            ``(4) Use of allowances.--Each State or each local 
        government shall use such emission allowances as it receives 
        pursuant to this section exclusively for the purposes of this 
        section, including covering a reasonable portion of the costs 
        of the development, adoption, implementation, and enforcement 
        of a State or local energy efficiency building code with 
        respect to which a certification is accepted by the Secretary 
        under subsection (c)(2)(B) or subsection (e)(6)(B), or the 
        national energy efficiency building code.
    ``(i) Annual Reports by Secretary.--The Secretary shall annually 
submit to Congress, and publish in the Federal Register, a report on--
            ``(1) the status of national building energy efficiency 
        codes;
            ``(2) the status of energy efficiency building code 
        adoption and compliance in the States;
            ``(3) the implementation of this section; and
            ``(4) impacts of past action under this section, and 
        potential impacts of further action, on lifetime energy use by 
        buildings, including resulting energy and cost savings.''.

SEC. 202. BUILDING RETROFIT PROGRAM.

    (a) Definitions.--For purposes of this section:
            (1) Nonresidential building.--The term ``nonresidential 
        building'' means a building with a primary use or purpose other 
        than residential housing, including commercial offices, 
        schools, academic and other public and private institutions, 
        nonprofit organizations, hospitals, hotels, and houses of 
        worship. Such buildings shall include mixed-use properties used 
        for both residential and nonresidential purposes in which more 
        than half of building floor space is nonresidential.
            (2) Performance-based building retrofit program.--The term 
        ``performance-based building retrofit program'' means a program 
        that determines building energy efficiency success based on 
        actual measured savings after a retrofit is complete, as 
        evidenced by energy invoices or evaluation protocols.
            (3) Prescriptive building retrofit program.--The term 
        ``prescriptive building retrofit program'' means a program that 
        projects building retrofit energy efficiency success based on 
        the known effectiveness of measures prescribed to be included 
        in a retrofit.
            (4) Recommissioning; retrocommissioning.--The terms 
        ``recommissioning'' and ``retrocommissioning'' have the meaning 
        given those terms in section 543(f)(1) of the National Energy 
        Conservation Policy Act (42 U.S.C. 8253(f)(1)).
            (5) Residential building.--The term ``residential 
        building'' means a building whose primary use is residential. 
        Such buildings shall include single-family homes (both attached 
        and detached), owner-occupied units in larger buildings with 
        their own dedicated space-conditioning systems, and buildings 
        used for both residential and nonresidential purposes in which 
        more than half of building floor space is residential.
            (6) State energy program.--The term ``State Energy 
        Program'' means the program under part D of title III of the 
        Energy Policy and Conservation Act (42 U.S.C. 6321 et seq.).
    (b) Establishment.--The Administrator shall develop and implement, 
in consultation with the Secretary of Energy, standards for a national 
energy and environmental building retrofit policy for single-family and 
multifamily residences. The Administrator shall develop and implement, 
in consultation with the Secretary of Energy and the Director of 
Commercial High-Performance Green Buildings, standards for a national 
energy and environmental building retrofit policy for nonresidential 
buildings. The programs to implement the residential and nonresidential 
policies based on the standards developed under this section shall 
together be known as the Retrofit for Energy and Environmental 
Performance (REEP) program.
    (c) Purpose.--The purpose of the REEP program is to facilitate the 
retrofitting of existing buildings across the United States to achieve 
maximum cost-effective energy efficiency improvements and significant 
improvements in water use and other environmental attributes.
    (d) Federal Administration.--
            (1) Existing programs.--In creating and operating the REEP 
        program--
                    (A) the Administrator shall make appropriate use of 
                existing programs, including the Energy Star program 
                and in particular the Environmental Protection Agency 
                Energy Star for Buildings program; and
                    (B) the Secretary of Energy shall make appropriate 
                use of existing programs, including delegating 
                authority to the Director of Commercial High-
                Performance Green Buildings appointed under section 421 
                of the Energy Independence and Security Act of 2007 (42 
                U.S.C. 17081), who shall designate and provide funding 
                to support a high-performance green building 
                partnership consortium pursuant to subsection (f) of 
                such section to support efforts under this section.
            (2) Consultation and coordination.--The Administrator and 
        the Secretary of Energy shall consult with and coordinate with 
        the Secretary of Housing and Urban Development in carrying out 
        the REEP program.
            (3) Allocation of allowances.--The Administrator shall 
        support the REEP program by providing emission allowances to 
        each State's SEED Account for the purposes of the program, and 
        providing, as appropriate, emission allowances to a local 
        government entity that carries out the purposes of this section 
        in the absence of a State program. The Administrator shall 
        support administration of the program through such existing 
        State and local agencies or entities, including those regulated 
        by the State, that the State designates to carry out the 
        purposes of this section. The Administrator shall ensure 
        accountability for allowances dispensed, and shall confirm 
        measurement and verification of energy, water, and 
        environmental savings achieved.
            (4) Assistance.--The Administrator and the Secretary of 
        Energy shall provide consultation and assistance to State and 
        local agencies for the establishment of revolving loan funds, 
        loan guarantees, or other forms of financial assistance under 
        this section.
    (e) State and Local Administration.--
            (1) Delegation.--The designated State agency, agencies, or 
        entities described in subsection (d)(3) may delegate 
        performance of appropriate elements of the REEP program, upon 
        their request and subject to State law, to counties, 
        municipalities, appropriate public agencies, and other 
        divisions of local government, as well as to entities regulated 
        by the State. In making any such delegation, a State shall give 
        priority to entities that administer existing comprehensive 
        retrofit programs, including those under the supervision of 
        State utility regulators. The State shall ensure accountability 
        for the use of allowances provided under this section, and to 
        the extent such allowances are sold by the State, for the 
        proceeds. States shall maintain responsibility for meeting the 
        standards and requirements of the REEP program. In any State 
        that elects not to administer the REEP program, a unit of local 
        government may propose to do so within its jurisdiction, and if 
        the Administrator finds that such local government is capable 
        of administering the program, the Administrator may provide 
        allowances to that local government, prorated according to the 
        population of the local jurisdiction relative to the population 
        of the State, for purposes of the REEP program.
            (2) Employment.--States and local government entities may 
        administer a REEP program in a manner that authorizes public or 
        regulated investor-owned utilities, building auditors and 
        inspectors, contractors, nonprofit organizations, for-profit 
        companies, and other entities to perform audits and retrofit 
        services under this section. A State may provide incentives for 
        retrofits without direct participation by the State or its 
        agents, so long as the resulting savings are measured and 
        verified. A State or local administrator of a REEP program 
        shall seek to ensure that sufficient qualified entities are 
        available to support retrofit activities so that building 
        owners have a competitive choice among qualified auditors, 
        raters, contractors, and providers of services related to 
        retrofits. Nothing in this section is intended to preclude or 
        preempt the right of a building owner to choose the specific 
        providers of retrofit services to engage for a retrofit project 
        in that owner's building.
            (3) Equal incentives for equal improvement.--In general, 
        the States should strive to offer the same levels of incentives 
        for retrofits that meet the same efficiency improvement goals, 
        regardless of whether the State, its agency or entity, or the 
        building owner has conducted the retrofit achieving the 
        improvement, provided the improvement is measured and verified.
    (f) Elements of REEP Program.--The Administrator, in consultation 
with the Secretary of Energy, shall establish goals, guidelines, 
practices, and standards for accomplishing the purpose stated in 
subsection (c), and shall annually review and, as appropriate, revise 
such goals, guidelines, practices, and standards. The program under 
this section shall include the following:
            (1) Residential Energy Services Network (RESNET) or 
        Building Performance Institute (BPI) analyst certification of 
        residential building energy and environment auditors, 
        inspectors, and raters, or an equivalent certification system 
        as determined by the Administrator.
            (2) BPI certification or licensing by States of residential 
        building energy and environmental retrofit contractors, or an 
        equivalent certification or licensing system as determined by 
        the Administrator.
            (3) Provision of BPI, RESNET, or other appropriate 
        information on equipment and procedures, as determined by the 
        Administrator, that contractors can use to test the energy and 
        environmental efficiency of buildings effectively (such as 
        infrared photography and pressurized testing, and tests for 
        water use and indoor air quality).
            (4) Provision of clear and effective materials to describe 
        the testing and retrofit processes for typical buildings.
            (5) Guidelines for offering and managing prescriptive 
        building retrofit programs and performance-based building 
        retrofit programs for residential and nonresidential buildings.
            (6) Guidelines for applying recommissioning and 
        retrocommissioning principles to improve a building's 
        operations and maintenance procedures.
            (7) A requirement that building retrofits conducted 
        pursuant to a REEP program utilize, especially in all air-
        conditioned buildings, roofing materials with high solar energy 
        reflectance, unless inappropriate due to green roof management, 
        solar energy production, or for other reasons identified by the 
        Administrator, in order to reduce energy consumption within the 
        building, increase the albedo of the building's roof, and 
        decrease the heat island effect in the area of the building.
            (8) Determination of energy savings in a performance-based 
        building retrofit program through--
                    (A) for residential buildings, comparison of before 
                and after retrofit scores on the Home Energy Rating 
                System (HERS) Index, where the final score is produced 
                by an objective third party;
                    (B) for nonresidential buildings, Environmental 
                Protection Agency Portfolio Manager benchmarks; or
                    (C) for either residential or nonresidential 
                buildings, use of an Administrator-approved simulation 
                program by a contractor with the appropriate 
                certification, subject to appropriate software 
                standards and verification of at least 15 percent of 
                all work done, or such other percentage as the 
                Administrator may determine.
            (9) Guidelines for utilizing the Energy Star Portfolio 
        Manager, the Home Energy Rating System (HERS) rating system, 
        Home Performance with Energy Star program approvals, and any 
        other tools associated with the retrofit program.
            (10) Requirements and guidelines for post-retrofit 
        inspection and confirmation of work and energy savings.
            (11) Detailed descriptions of funding options for the 
        benefit of State and local governments, along with model forms, 
        accounting aids, agreements, and guides to best practices.
            (12) Guidance on opportunities for--
                    (A) rating or certifying retrofitted buildings as 
                Energy Star buildings, or as green buildings under a 
                recognized green building rating system;
                    (B) assigning Home Energy Rating System (HERS) or 
                similar ratings; and
                    (C) completing any applicable building performance 
                labels.
            (13) Sample materials for publicizing the program to 
        building owners, including public service announcements and 
        advertisements.
            (14) Processes for tracking the numbers and locations of 
        buildings retrofitted under the REEP program, with information 
        on projected and actual savings of energy and its value over 
        time.
    (g) Requirements.--As a condition of receiving allowances for the 
REEP program pursuant to this Act, a State or qualifying local 
government shall--
            (1) adopt the standards for training, certification of 
        contractors, certification of buildings, and post-retrofit 
        inspection as developed by the Administrator for residential 
        and nonresidential buildings, respectively, except as necessary 
        to match local conditions, needs, efficiency opportunities, or 
        other local factors, or to accord with State laws or 
        regulations, and then only after the Administrator approves 
        such a variance; and
            (2) establish fiscal controls and accounting procedures 
        (which conform to generally accepted government accounting 
        principles) sufficient to ensure proper accounting during 
        appropriate accounting periods for payments received and 
        disbursements, and for fund balances.
The Administrator shall conduct or require each State to have such 
independent financial audits of REEP-related funding as the 
Administrator considers necessary or appropriate to carry out the 
purposes of this section.
    (h) Options To Support REEP Program.--The emission allowances 
provided pursuant to this Act to the States' SEED Accounts shall 
support the implementation through State REEP programs of alternate 
means of creating incentives for, or reducing financial barriers to, 
improved energy and environmental performance in buildings, consistent 
with this section, including--
            (1) implementing prescriptive building retrofit programs 
        and performance-based building retrofit programs;
            (2) providing credit enhancement, interest rate subsidies, 
        loan guarantees, or other credit support;
            (3) providing initial capital for public revolving fund 
        financing of retrofits, with repayments by beneficiary building 
        owners over time through their tax payments, calibrated to 
        create net positive cash flow to the building owner;
            (4) providing funds to support utility-operated retrofit 
        programs with repayments over time through utility rates, 
        calibrated to create net positive cash flow to the building 
        owner, and transferable from one building owner to the next 
        with the building's utility services;
            (5) providing funds to local government programs to provide 
        REEP services and financial assistance; and
            (6) other means proposed by State and local agencies, 
        subject to the approval of the Administrator.
    (i) Support for Program.--
            (1) Use of allowances.--The REEP program shall be supported 
        by the use of emission allowances allocated to the States' SEED 
        Accounts pursuant to section 132 of this Act. To the extent 
        that a State provides allowances to local governments within 
        the State to implement elements of the REEP Program, that shall 
        be deemed a distribution of such allowances to units of local 
        government pursuant to subsection (c)(1) of that section.
            (2) Initial award limits.--Except as provided in paragraph 
        (3), State and local REEP programs may make per-building direct 
        expenditures for retrofit improvements, or their equivalent in 
        indirect or other forms of financial support, from funds 
        derived from the sale of allowances received directly from the 
        Administrator in amounts not to exceed the following:
                    (A) Residential building program.--
                            (i) Awards.--For residential buildings--
                                    (I) support for a free or low-cost 
                                detailed building energy audit that 
                                prescribes, as part of a energy-
                                reducing measures sufficient to achieve 
                                at least a 20 percent reduction in 
                                energy use, by providing an incentive 
                                equal to the documented cost of such 
                                audit, but not more than $200, in 
                                addition to any earned by achieving a 
                                20 percent or greater efficiency 
                                improvement;
                                    (II) a total of $1,000 for a 
                                combination of measures, prescribed in 
                                an audit conducted under subclause (I), 
                                designed to reduce energy consumption 
                                by more than 10 percent, and $2,000 for 
                                a combination of measures prescribed in 
                                such an audit, designed to reduce 
                                energy consumption by more than 20 
                                percent;
                                    (III) $3,000 for demonstrated 
                                savings of 20 percent, pursuant to a 
                                performance-based building retrofit 
                                program; and
                                    (IV) $1,000 for each additional 5 
                                percentage points of energy savings 
                                achieved beyond savings for which 
                                funding is provided under subclause 
                                (II) or (III).
                        Funding shall not be provided under clauses 
                        (II) and (III) for the same energy savings.
                            (ii) Maximum percentage.--Awards under 
                        clause (i) shall not exceed 50 percent of 
                        retrofit costs for each building. For buildings 
                        with multiple residential units, awards under 
                        clause (i) shall not be greater than 50 percent 
                        of the total cost of retrofitting the building, 
                        prorated among individual residential units on 
                        the basis of relative costs of the retrofit.
                            (iii) Additional awards.--Additional awards 
                        may be provided for purposes of increasing 
                        energy efficiency, for buildings achieving at 
                        least 20 percent energy savings using funding 
                        provided under clause (i), in the form of 
                        grants of not more than $600 for measures 
                        projected or measured (using an appropriate 
                        method approved by the Administrator) to 
                        achieve at least 35 percent potable water 
                        savings through equipment or systems with an 
                        estimated service life of not less than seven 
                        years, and not more than an additional $20 may 
                        be provided for each additional one percent of 
                        such savings, up to a maximum total grant of 
                        $1,200.
                    (B) Nonresidential building program.--
                            (i) Awards.--For nonresidential buildings--
                                    (I) support for a free or low-cost 
                                detailed building energy audit that 
                                prescribes, as part of a energy-
                                reducing measures sufficient to achieve 
                                at least a 20 percent reduction in 
                                energy use, by providing an incentive 
                                equal to the documented cost of such 
                                audit, but not more than $500, in 
                                addition to any award earned by 
                                achieving a 20 percent or greater 
                                efficiency improvement;
                                    (II) $0.15 per square foot of 
                                retrofit area for demonstrated energy 
                                use reductions from 20 percent to 30 
                                percent;
                                    (III) $0.75 per square foot for 
                                demonstrated energy use reductions from 
                                30 percent to 40 percent;
                                    (IV) $1.60 per square foot for 
                                demonstrated energy use reductions from 
                                40 percent to 50 percent; and
                                    (V) $2.50 per square foot for 
                                demonstrated energy use reductions 
                                exceeding 50 percent.
                            (ii) Maximum percentage.--Amounts provided 
                        under subclauses (II) through (V) of clause (i) 
                        combined shall not exceed 50 percent of the 
                        total retrofit cost of a building. In 
                        nonresidential buildings with multiple units, 
                        such awards shall be prorated among individual 
                        units on the basis of relative costs of the 
                        retrofit.
                            (iii) Additional awards.--Additional awards 
                        may be provided, for buildings achieving at 
                        least 20 percent energy savings using funding 
                        provided under clause (i), as follows:
                                    (I) Water.--For purposes of 
                                increasing energy efficiency, grants 
                                may be made for whole building potable 
                                water use reduction (using an 
                                appropriate method approved by the 
                                Secretary of Energy) for up to 50 
                                percent of the total retrofit cost, 
                                including amounts up to--
                                            (aa) $24.00 per thousand 
                                        gallons per year of potable 
                                        water savings of 40 percent or 
                                        more;
                                            (bb) $27.00 per thousand 
                                        gallons per year of potable 
                                        water savings of 50 percent or 
                                        more; and
                                            (cc) $30.00 per thousand 
                                        gallons per year of potable 
                                        water savings of 60 percent or 
                                        more.
                                    (II) Environmental improvements.--
                                Additional awards of up to $1,000 may 
                                be granted for the inclusion of other 
                                environmental attributes that the 
                                Secretary, in consultation with the 
                                Administrator, identifies as 
                                contributing to energy efficiency. Such 
                                attributes may include, but are not 
                                limited to waste diversion and the use 
                                of environmentally preferable materials 
                                (including salvaged, renewable, or 
                                recycled materials, and materials with 
                                no or low-VOC content). The 
                                Administrator may recommend that States 
                                develop such standards as are necessary 
                                to account for local or regional 
                                conditions that may affect the 
                                feasibility or availability of 
                                identified resources and attributes.
                            (iv) Indoor air quality minimum.--
                        Nonresidential buildings receiving incentives 
                        under this section must satisfy at a minimum 
                        the most recent version of ASHRAE Standard 62.1 
                        for ventilation, or the equivalent as 
                        determined by the Administrator. A State may 
                        issue a waiver from this requirement to a 
                        building project on a showing that such 
                        compliance is infeasible due to the physical 
                        constraints of the building's existing 
                        ventilation system, or such other limitations 
                        as may be specified by the Administrator.
                    (C) Historic buildings.--Notwithstanding 
                subparagraphs (A) and (B), a building in or eligible 
                for the National Register of Historic Places shall be 
                eligible for awards under this paragraph in amounts up 
                to 120 percent of the amounts set forth in 
                subparagraphs (A) and (B).
                    (D) Supplemental support.--State and local 
                governments may supplement the per-building 
                expenditures under this paragraph with funding from 
                other sources.
            (3) Adjustment.--The Administrator may adjust the specific 
        dollar limits funded by the sale of allowances pursuant to 
        paragraph (2) in years subsequent to the second year after the 
        date of enactment of this Act, and every 2 years thereafter, as 
        the Administrator determines necessary to achieve optimum cost-
        effectiveness and to maximize incentives to achieve energy 
        efficiency within the total building award amounts provided in 
        that paragraph, and shall publish and hold constant such 
        revised limits for at least 2 years.
    (j) Report to Congress.--The Administrator shall conduct an annual 
assessment of the achievements of the REEP program in each State, shall 
prepare an annual report of such achievements and any recommendations 
for program modifications, and shall provide such report to Congress at 
the end of each fiscal year during which funding or other resources 
were made available to the States for the REEP Program.
    (k) Other Sources of Federal Support.--
            (1) Additional state energy program funds.--Any Federal 
        funding provided to a State Energy Program that is not required 
        to be expended for a different federally designated purpose may 
        be used to support a REEP program.
            (2) Program administration.--State Energy Offices or 
        designated State agencies may expend up to 10 percent of 
        available funding provided under this section for program 
        administration.
            (3) Authorization of appropriations.--There are authorized 
        to be appropriated for the purposes of this section, for each 
        of fiscal years 2010, 2011, 2012, and 2013--
                    (A) $50,000,000 to the Administrator for program 
                administration costs; and
                    (B) $20,000,000 to the Secretary of Energy for 
                program administration costs.

SEC. 203. ENERGY EFFICIENT MANUFACTURED HOMES.

    (a) Definitions.--In this section:
            (1) Manufactured home.--The term ``manufactured home'' has 
        the meaning given such term in section 603 of the National 
        Manufactured Housing Construction and Safety Standards Act of 
        1974 (42 U.S.C. 5402).
            (2) Energy star qualified manufactured home.--The term 
        ``Energy Star qualified manufactured home'' means a 
        manufactured home that has been designed, produced, and 
        installed in accordance with Energy Star's guidelines by an 
        Energy Star certified plant.
    (b) Purpose.--The purpose of this section is to assist low-income 
households residing in manufactured homes constructed prior to 1976 to 
save energy and energy expenditures by providing support toward the 
purchase of new Energy Star qualified manufactured homes.
    (c) State Implementation of Program.--
            (1) Manufactured home replacement program.--Any State may 
        provide to the owner of a manufactured home constructed prior 
        to 1976 a rebate to use toward the purchase of a new Energy 
        Star qualified manufactured home pursuant to this section.
            (2) Use of allowances.--The program established in this 
        section shall be supported by the use of emission allowances 
        allocated to the States' SEED Accounts pursuant to section 782 
        of this Act. To the extent that a State provides allowances to 
        local governments within the State to implement this program, 
        that shall be deemed a distribution of such allowances to units 
        of local government pursuant to subsection (c)(1) of that 
        section.
            (3) Rebates.--
                    (A) Primary residence requirement.--A rebate 
                described under paragraph (1) may only be made to an 
                owner of a manufactured home constructed prior to 1976 
                that is used on a year-round basis as a primary 
                residence.
                    (B) Dismantling and replacement.--A rebate 
                described under paragraph (1) may be made only if the 
                manufactured home constructed prior to 1976 will be--
                            (i) rendered unusable for human habitation 
                        (including appropriate recycling); and
                            (ii) replaced, in the same general 
                        location, as determined by the applicable State 
                        agency, with an Energy Star qualified 
                        manufactured home.
                    (C) Single rebate.--A rebate described under 
                paragraph (1) may not be provided to any owner of a 
                manufactured home constructed prior to 1976 that was or 
                is a member of a household for which any other member 
                of the household was provided a rebate pursuant to this 
                section.
                    (D) Eligible households.--To be eligible to receive 
                a rebate described under paragraph (1), an owner of a 
                manufactured home constructed prior to 1976 shall 
                demonstrate to the applicable State agency that the 
                total income of all members the owner's household does 
                not exceed 200 percent of the Federal poverty level for 
                income in the applicable area.
                    (E) Advance availability.--A rebate may be provided 
                under this section in a manner to facilitate the 
                purchase of a new Energy Star qualified manufactured 
                home.
            (4) Rebate limitation.--Rebates provided by States under 
        this section shall not exceed $7,500 per manufactured home from 
        any value derived from the use of emission allowances provided 
        to the State pursuant to section 132.
            (5) Use of state funds.--A State providing rebates under 
        this section may supplement the amount of such rebates under 
        paragraph (4) by any additional amount is from State funds and 
        other sources, including private donations or grants from 
        charitable organizations.
            (6) Coordination with similar programs.--
                    (A) State programs.--A State conducting an existing 
                program that has the purpose of replacing manufactured 
                homes constructed prior to 1976 with Energy Star 
                qualified manufactured homes, may use allowance value 
                provided under section 782 to support such a program, 
                provided such funding does not exceed the rebate 
                limitation amount under paragraph (4).
                    (B) Federal programs.--The Secretary of Energy 
                shall coordinate with and seek to achieve the purpose 
                of this section through similar Federal programs 
                including--
                            (i) the Weatherization Assistance Program 
                        under part A of title IV of the Energy 
                        Conservation and Production Act (42 U.S.C. 6861 
                        et seq.); and
                            (ii) the program under part D of title III 
                        of the Energy Policy and Conservation Act (42 
                        U.S.C. 6321 et seq.).
                    (C) Coordination with other state agencies.--A 
                State agency using allowance value to administer the 
                program under this section may coordinate its efforts, 
                and share funds for administration, with other State 
                agencies involved in low-income housing programs.
            (7) Administrative expenses.--A State using allowance value 
        under this section may expend not more than 10 percent of such 
        value for administrative expenses related to this program.

SEC. 204. BUILDING ENERGY PERFORMANCE LABELING PROGRAM.

    (a) Establishment.--
            (1) Purpose.--The Administrator shall establish a building 
        energy performance labeling program with broad applicability to 
        the residential and commercial markets to enable and encourage 
        knowledge about building energy performance by owners and 
        occupants and to inform efforts to reduce energy consumption 
        nationwide.
            (2) Components.--In developing such program, the 
        Administrator shall--
                    (A) consider existing programs, such as 
                Environmental Protection Agency's Energy Star program, 
                the Home Energy Rating System (HERS) Index, and 
                programs at the Department of Energy;
                    (B) support the development of model performance 
                labels for residential and commercial buildings; and
                    (C) utilize incentives and other means to spur use 
                of energy performance labeling of public and private 
                sector buildings nationwide.
    (b) Data Assessment for Building Energy Performance.--
            (1) Initial report.--Not later than 90 days after the date 
        of enactment of this Act, the Administrator shall provide to 
        Congress, as well as to the Secretary of Energy and the Office 
        of Management and Budget, a report identifying--
                    (A) all principal building types for which 
                statistically significant energy performance data 
                exists to serve as the basis of measurement protocols 
                and labeling requirements for achieved building energy 
                performance; and
                    (B) those building types for which additional data 
                are required to enable the development of such 
                protocols and requirements.
            (2) Additional reports.--Additional updated reports shall 
        be provided under this subsection as often as The Administrator 
        considers practicable, but not less than every 2 years.
    (c) Building Data Acquisition.--
            (1) Resource requirements.--For all principal building 
        types identified under subsection (b), the Secretary of Energy, 
        not later than 90 days after a report by the Administrator 
        under subsection (b), shall provide to Congress, the 
        Administrator, and the Office of Management and Budget a 
        statement of additional resources needed, if any, to fully 
        develop the relevant data, as well as the anticipated timeline 
        for data development.
            (2) Consultation.--The Secretary of Energy shall consult 
        with the Administrator concerning the Administrator's ability 
        to use data series for these additional building types to 
        support the achieved performance component in the labeling 
        program.
            (3) Improvements to building energy consumption 
        databases.--
                    (A) Commercial database.--The Secretary of Energy 
                shall support improvements to the Commercial Buildings 
                Energy Consumption Survey (CBECS) as authorized by 
                section 205(k) of the Department of Energy Organization 
                Act (42 U.S.C. 7135(k))--
                            (i) to enable complete and robust data for 
                        the actual energy performance of principal 
                        building types currently covered by survey;
                            (ii) to cover additional building types as 
                        identified by the Administrator under 
                        subsection (e)(1)(B), to enable the development 
                        of achieved performance measurement protocols 
                        are developed for at least 90 percent of all 
                        major commercial building types within 5 years 
                        after the date of enactment of this Act; and
                            (iii) to include third-party audits of 
                        random data samplings to ensure the quality and 
                        accuracy of survey information.
                    (B) Residential databases.--The Administrator, in 
                consultation with the Energy Information Administration 
                and the Secretary of Energy, shall support improvements 
                to the Residential Energy Consumption Survey (RECS) as 
                authorized by section 205(k) of the Department of 
                Energy Organization Act (42 U.S.C. 7135(k)), or such 
                other residential energy performance databases as the 
                Administrator considers appropriate, to aid the 
                development of achieved performance measurement 
                protocols for residential building energy use for at 
                least 90 percent of the residential market within 5 
                years after the date of enactment of this Act.
                    (C) Consultation.--The Secretary of Energy and the 
                Administrator shall consult with public, private, and 
                nonprofit sector representatives from the building 
                industry and real estate industry to assist in the 
                evaluation and improvement of building energy 
                performance databases and labeling programs.
    (d) Identification of Measurement Protocols for Achieved 
Performance.--
            (1) Proposed protocols and requirements.--At the earliest 
        practicable date, but not later than 1 year after identifying a 
        building type under subsection (b)(1)(A), the Administrator 
        shall propose a measurement protocol for that building type and 
        a requirement detailing how to use that protocol in completing 
        applicable commercial or residential performance labels created 
        pursuant to this section.
            (2) Final rule.--After providing for notice and comment, 
        the Administrator shall publish a final rule containing a 
        measurement protocol and the corresponding requirements for 
        applying that protocol. Such a rule--
                    (A) shall define the minimum period for measurement 
                of energy use by buildings of that type and other 
                details for determining achieved performance, to 
                include leased buildings or parts thereof;
                    (B) shall identify necessary data collection and 
                record retention requirements; and
                    (C) may specify transition rules and exemptions for 
                classes of buildings within the building type.
    (e) Procedures for Evaluating Designed Performance.--The 
Administrator shall develop protocols for evaluating the designed 
performance of individual building types. The Administrator may conduct 
such feasibility studies and demonstration projects as are necessary to 
evaluate the sufficiency of proposed protocols for designed 
performance.
    (f) Creation of Building Energy Performance Labeling Program.--
            (1) Model label.--Not later than 1 year after the date of 
        enactment of this Act, the Administrator shall propose a model 
        building energy label that provides a format--
                    (A) to display achieved performance and designed 
                performance data;
                    (B) that may be tailored for residential and 
                commercial buildings, and for single-occupancy and 
                multitenanted buildings; and
                    (C) to display other appropriate elements 
                identified during the development of measurement 
                protocols under subsections (d) and (e).
            (2) Inclusions.--Nothing in this section shall require the 
        inclusion on such a label of designed performance data where 
        impracticable or not cost effective, or to preclude the display 
        of both achieved performance and designed performance data for 
        a particular building where both such measures are available, 
        practicable, and cost effective.
            (3) Existing programs.--In developing the model label, the 
        Administrator shall consider existing programs, including--
                    (A) the Environmental Protection Agency's Energy 
                Star Portfolio Manager program and the California HERS 
                II Program Custom Approach for the achieved performance 
                component of the label;
                    (B) the Home Energy Rating System (HERS) Index 
                system for the designed performance component of the 
                label; and
                    (C) other Federal and State programs, including the 
                Department of Energy's related programs on building 
                technologies and those of the Federal Energy Management 
                Program.
            (4) Final rule.--After providing for notice and comment, 
        the Administrator shall publish a final rule containing the 
        label applicable to covered building types.
    (g) Demonstration Projects for Labeling Program.--
            (1) In general.--The Administrator shall conduct building 
        energy performance labeling demonstration projects for 
        different building types--
                    (A) to ensure the sufficiency of the current 
                Commercial Buildings Energy Consumption Survey and 
                other data to serve as the basis for new measurement 
                protocols for the achieved performance component of the 
                building energy performance labeling program;
                    (B) to inform the development of measurement 
                protocols for building types not currently covered by 
                the Commercial Buildings Energy Consumption Survey; and
                    (C) to identify any additional information that 
                needs to be developed to ensure effective use of the 
                model label.
            (2) Participation.--Such demonstration projects shall 
        include participation of--
                    (A) buildings from diverse geographical and climate 
                regions;
                    (B) buildings in both urban and rural areas;
                    (C) single-family residential buildings;
                    (D) multihousing residential buildings with more 
                than 50 units, including at least one project that 
                provides affordable housing to individuals of diverse 
                incomes;
                    (E) single-occupant commercial buildings larger 
                than 30,000 square feet;
                    (F) multitenanted commercial buildings larger than 
                50,000 square feet; and
                    (G) buildings from both the public and private 
                sectors.
            (3) Priority.--Priority in the selection of demonstration 
        projects shall be given to projects that facilitate large-scale 
        implementation of the labeling program for samples of buildings 
        across neighborhoods, geographic regions, cities, or States.
            (4) Findings.--The Administrator shall report any findings 
        from demonstration projects under this subsection, including an 
        identification of any areas of needed data improvement, to the 
        Department of Energy's Energy Information Administration and 
        Building Technologies Program.
            (5) Coordination.--The Administrator and the Secretary of 
        Energy shall coordinate demonstration projects undertaken 
        pursuant to this subsection with those undertaken as part of 
        the Zero-Net-Energy Commercial Buildings Initiative adopted 
        under section 422 of the Energy Independence and Security Act 
        of 2007 (42 U.S.C. 17082).
    (h) Implementation of Labeling Program.--
            (1) In general.--The Administrator, in consultation with 
        the Secretary of Energy, shall work with all State Energy 
        Offices established pursuant to part D of title III of the 
        Energy Policy and Conservation Act (42 U.S.C. 6321 et seq.) or 
        other State authorities as necessary for the purpose of 
        implementing the labeling program established under this 
        section for commercial and residential buildings.
            (2) Outreach to local authorities.--The Administrator 
        shall, acting in consultation and coordination with the 
        respective States, encourage use of the labeling program by 
        counties and other localities to broaden access to information 
        about building energy use, for example, through disclosure of 
        building label contents in tax, title, and other records those 
        localities maintain. For this purpose, the Administrator shall 
        develop an electronic version of the label and information that 
        can be readily transmitted and read in widely available 
        computer programs but is protected from unauthorized 
        manipulation.
            (3) Means of implementation.--In adopting the model 
        labeling program established under this section, a State shall 
        seek to ensure that labeled information be made accessible to 
        the public in a manner so that owners, lenders, tenants, 
        occupants, or other relevant parties can utilize it. Such 
        accessibility may be accomplished through--
                    (A) preparation, and public disclosure of the label 
                through filing with tax and title records at the time 
                of--
                            (i) a building audit conducted with support 
                        from Federal or State funds;
                            (ii) a building energy-efficiency retrofit 
                        conducted in response to such an audit;
                            (iii) a final inspection of major 
                        renovations or additions made to a building in 
                        accordance with a building permit issued by a 
                        local government entity;
                            (iv) a sale that is recorded for title and 
                        tax purposes consistent with subsection (h)(8) 
                        of this section;
                            (v) a new lien recorded on the property for 
                        more than a set percentage of the assessed 
                        value of the property, if that lien reflects 
                        public financial assistance for energy-related 
                        improvements to that building; or
                            (vi) a change in ownership or operation of 
                        the building for purposes of utility billing; 
                        or
                    (B) other appropriate means.
            (4) State implementation of program.--
                    (A) Eligibility.--A State may become eligible to 
                utilize allowance value to implement this program by--
                            (i) adopting by statute or regulation a 
                        requirement that buildings be assessed and 
                        labeled, consistent with the labeling 
                        requirements of the program established under 
                        this section; or
                            (ii) adopting a plan to implement a model 
                        labeling program consistent with this section 
                        within one year of enactment of this Act, 
                        including the establishment of that program 
                        within 3 years after the date of enactment of 
                        this Act, and demonstrating continuous progress 
                        under that plan.
                    (B) Use of allowances.--The program established in 
                this section shall be supported by the use of emission 
                allowances allocated to the States' SEED Accounts 
                pursuant to section 132 of this Act. To the extent that 
                a State provides allowances to local governments within 
                the State to implement this program, that shall be 
                deemed a distribution of such allowances to units of 
                local government pursuant to subsection (c)(1) of that 
                section.
            (5) Guidance.--The Administrator may create or identify 
        model programs and resources to provide guidance to offer to 
        States and localities for creating labeling programs consistent 
        with the model program established under this section.
            (6) Progress report.--The Administrator, in consultation 
        with the Secretary of Energy, shall provide a progress report 
        to Congress not later than 3 years after the date of enactment 
        of this Act that--
                    (A) evaluates the effectiveness of efforts to 
                advance use of the model labeling program by States and 
                localities;
                    (B) recommends any legislative changes necessary to 
                broaden the use of the model labeling program; and
                    (C) identifies any changes to broaden the use of 
                the model labeling program that the Administrator has 
                made or intends to make that do not require additional 
                legislative authority.
            (7) State information.--The Administrator may require 
        States to report to the Administrator information that the 
        Administrator requires to provide the report required under 
        paragraph (6).
            (8) Prevention of disruption of sales transactions.--No 
        State shall implement a new labeling program pursuant to this 
        section in a manner that requires the labeling of a building to 
        occur after a contract has been executed for the sale of that 
        building and before the sales transaction is completed.
    (i) Implementation of Labeling Program in Federal Buildings.--
            (1) Use of labeling program.--The Secretary of Energy and 
        the Administrator shall use the labeling program established 
        under this section to evaluate energy performance in the 
        facilities of the Department of Energy and the Environmental 
        Protection Agency, respectively, to the extent practicable, and 
        shall encourage and support implementation efforts in other 
        Federal agencies.
            (2) Annual progress report.--The Secretary of Energy and 
        Administrator shall provide an annual progress report to 
        Congress and the Office of Management and Budget detailing 
        efforts to implement this subsection, as well as any best 
        practices or needed resources identified as a result of such 
        efforts.
    (j) Public Outreach.--The Secretary of Energy and the 
Administrator, in consultation with nonprofit and industry stakeholders 
with specialized expertise, and in conjunction with other energy 
efficiency public awareness efforts, shall establish a business and 
consumer education program to increase awareness about the importance 
of building energy efficiency and to facilitate widespread use of the 
labeling program established under this section.
    (k) Definitions.--In this section:
            (1) Building type.--The term ``building type'' means a 
        grouping of buildings as identified by their principal building 
        activities, or as grouped by their use, including office 
        buildings, laboratories, libraries, data centers, retail 
        establishments, hotels, warehouses, and educational buildings.
            (2) Measurement protocol.--The term ``measurement 
        protocol'' means the methodology, prescribed by the 
        Administrator, for defining a benchmark for building energy 
        performance for a specific building type and for measuring that 
        performance against the benchmark.
            (3) Achieved performance.--The term ``achieved 
        performance'' means the actual energy consumption of a building 
        as compared to a baseline building of the same type and size, 
        determined by actual consumption data normalized for 
        appropriate variables.
            (4) Designed performance.--The term ``designed 
        performance'' means the energy consumption performance a 
        building would achieve if operated consistent with its design 
        intent for building energy use, utilizing a standardized set of 
        operational conditions informed by data collected or confirmed 
        during an energy audit.
    (l) Authorization of Appropriations.--There are authorized to be 
appropriated--
            (1) to the Administrator $50,000,000 for implementation of 
        this section for each fiscal year from 2010 through 2020; and
            (2) to the Secretary of Energy $20,000,000 for 
        implementation of this section for fiscal year 2010 and 
        $10,000,000 for fiscal years 2011 through 2020.

     Subtitle B--Lighting and Appliance Energy Efficiency Programs

SEC. 211. LIGHTING EFFICIENCY STANDARDS.

    (a) Outdoor Lighting.--
            (1) Definitions.--
                    (A) Section 340(1) of the Energy Policy and 
                Conservation Act (42 U.S.C. 6311(1)) is amended by 
                striking subparagraph (L) and inserting the following:
                    ``(L) Outdoor luminaires.
                    ``(M) Outdoor high light output lamps.
                    ``(N) Any other type of industrial equipment which 
                the Secretary classifies as covered equipment under 
                section 341(b).''.
                    (B) Section 340 of the Energy Policy and 
                Conservation Act (42 U.S.C. 6311) is amended as adding 
                at the end the following:
            ``(25) The term `luminaire' means a complete lighting unit 
        consisting of one or more light sources and ballast(s), 
        together with parts designed to distribute the light, to 
        position and protect such lamps, and to connect such light 
        sources to the power supply.
            ``(26) The term `outdoor luminaire' means a luminaire that 
        is listed as suitable for wet locations pursuant to 
        Underwriters Laboratories Inc. standard UL 1598 and is labeled 
        as `Suitable for Wet Locations' consistent with section 
        410.4(A) of the National Electrical Code 2005, or is designed 
        for roadway illumination and meets the requirements of Addendum 
        A for IESNA TM-15-07: Backlight, Uplight, and Glare (BUG) 
        Ratings, except for--
                    ``(A) luminaires designed for outdoor video display 
                images that cannot be used in general lighting 
                applications;
                    ``(B) portable luminaires designed for use at 
                construction sites;
                    ``(C) luminaires designed for continuous immersion 
                in swimming pools and other water features;
                    ``(D) seasonal luminaires incorporating solely 
                individual lamps rated at 10 watts or less;
                    ``(E) luminaires designed to be used in emergency 
                conditions that incorporate a means of charging a 
                battery and a device to switch the power supply to 
                emergency lighting loads automatically upon failure of 
                the normal power supply;
                    ``(F) components used for repair of installed 
                luminaries and that meet the requirements of section 
                342(h);
                    ``(G) a luminaire utilizing an electrode-less 
                fluorescent lamp as the light source;
                    ``(H) decorative gas lighting systems;
                    ``(I) luminaires designed explicitly for lighting 
                for theatrical purposes, including performance, stage, 
                film production, and video production;
                    ``(J) luminaires designed as theme elements in 
                theme/amusement parks and that cannot be used in most 
                general lighting applications;
                    ``(K) luminaires designed explicitly for vehicular 
                roadway tunnels designed to comply with ANSI/IESNA RP-
                22-05;
                    ``(L) luminaires designed explicitly for hazardous 
                locations meeting UL Standard 844;
                    ``(M) searchlights;
                    ``(N) luminaires that are designed to be recessed 
                into a building, and that cannot be used in most 
                general lighting applications;
                    ``(O) a luminaire rated only for residential 
                applications utilizing a light source or sources 
                regulated under the amendments made by section 321 of 
                the Energy Independence and Security Act of 2007 and 
                with a light output no greater than 2,600 lumens;
                    ``(P) a residential pole-mounted luminaire that is 
                not rated for commercial use utilizing a light source 
                or sources meeting the efficiency requirements of 
                section 231 of the Energy Independence and Security Act 
                of 2007 and mounted on a post or pole not taller than 
                10.5 feet above ground and with a light output not 
                greater than 2.600 lumens;
                    ``(Q) a residential fixture with E12 (Candelabra) 
                bases that is rated for not more than 300 watts total; 
                or
                    ``(R) a residential fixture with medium screw bases 
                that is rated for not more than 145 watts.
            ``(27) The term `outdoor high light outputlamp' means a 
        lamp that--
                    ``(A) has a rated lumen output not less than 2601 
                lumens;
                    ``(B) is capable of being operated at a voltage not 
                less than 110 volts and not greater than 300 volts, or 
                driven at a constant current of 6.6 amperes;
                    ``(C) is not a Parabolic Aluminized Reflector lamp; 
                and
                    ``(D) is not a J-type double-ended (T-3) halogen 
                quartz lamp, utilizing R-7S bases, that is manufactured 
                before January 1, 2015.
            ``(28) The term `outdoor lighting control' means a device 
        incorporated in a luminaire that receives a signal, from either 
        a sensor (such as an occupancy sensor, motion sensor, or 
        daylight sensor) or an input signal (including analog or 
        digital signals communicated through wired or wireless 
        technology), and can adjust the light level according to the 
        signal.''.
            (2) Standards.--Section 342 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6313) is amended by adding at the 
        end the following:
    ``(g) Outdoor Luminaires.--
            ``(1) Each outdoor luminaire manufactured on or after 
        January 1, 2011, shall--
                    ``(A) have an initial luminaire efficacy of at 
                least 50 lumens per watt; and
                    ``(B) be designed to use a light source with a 
                lumen maintenance, calculated as mean rated lumens 
                divided by initial lumens, of at least 0.6.
            ``(2) Each outdoor luminaire manufactured on or after 
        January 1, 2013, shall--
                    ``(A) have an initial luminaire efficacy of at 
                least 70 lumens per watt; and
                    ``(B) be designed to use a light source with a 
                lumen maintenance, calculated as mean rated lumens 
                divided by initial lumens, of at least 0.6.
            ``(3) Each outdoor luminaire manufactured on or after 
        January 1, 2015, shall--
                    ``(A) have an initial luminaire efficacy of at 
                least 80 lumens per watt; and
                    ``(B) be designed to use a light source with a 
                lumen maintenance, calculated as mean rated lumens 
                divided by initial lumens, of at least 0.65.
            ``(4) In addition to the requirements of paragraphs (1) 
        through (3), each outdoor luminaire manufactured on or after 
        January 1, 2011, shall have the capability of producing at 
        least two different light levels, including 100 percent and 60 
        percent of full lamp output as tested with the maximum rated 
        lamp per UL1598 or the manufacturer's maximum specified for the 
        luminaire under test.
            ``(5)(A) Not later than January 1, 2017, the Secretary 
        shall issue a final rule amending the applicable standards 
        established in paragraphs (3) and (4) if technologically 
        feasible and economically justified. Such a final rule shall be 
        effective no later than January 1, 2020.
            ``(B) A final rule issued under subparagraph (A) shall 
        establish efficiency standards at the maximum level that is 
        technically feasible and economically justified, as provided in 
        subsections (o) and (p) of section 325. The Secretary may also, 
        in such rulemaking, amend or discontinue the product exclusions 
        listed in section 340(26)(A) through (P), or amend the lumen 
        maintenance requirements in paragraph (3) if the Secretary 
        determines that such amendments are consistent with the 
        purposes of this Act.
            ``(C) If the Secretary issues a final rule under 
        subparagraph (A) establishing amended standards, the final rule 
        shall provide that the amended standards apply to products 
        manufactured on or after January 1, 2020, or one year after the 
        date on which the final amended standard is published, 
        whichever is later.
    ``(h) Outdoor High Light Output Lamps.--Each outdoor high light 
output lamp manufactured on or after January 1, 2012, shall have a 
lighting efficiency of at least 45 lumens per watt.''.
            (3) Test procedures.--Section 343(a) of the Energy Policy 
        and Conservation Act (42 U.S.C. 6314(a)) is amended by adding 
        at the end the following:
            ``(10) Outdoor lighting.--
                    ``(A) With respect to outdoor luminaires and 
                outdoor high light output lamps, the test procedures 
                shall be based upon the test procedures specified in 
                illuminating engineering society procedures LM-79 as of 
                March 1, 2009, and LM-31, and/or other appropriate 
                consensus test procedures developed by the Illuminating 
                Engineering Society or other appropriate consensus 
                standards bodies.
                    ``(B) If illuminating engineering society procedure 
                LM-79 is amended, the Secretary shall amend the test 
                procedures established in subparagraph (A) as necessary 
                to be consistent with the amended LM-79 test procedure, 
                unless the Secretary determines, by rule, published in 
                the Federal Register and supported by clear and 
                convincing evidence, that to do so would not meet the 
                requirements for test procedures under paragraph (2).
                    ``(C) The Secretary may revise the test procedures 
                for outdoor luminaires or outdoor high light output 
                lamps by rule consistent with paragraph (2), and may 
                incorporate as appropriate consensus test procedures 
                developed by the Illuminating Engineering Society or 
                other appropriate consensus standards bodies.''.
            (4) Preemption.--Section 345 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6316) is amended by adding at the 
        end the following:
    ``(i)(1) Except as provided in paragraph (2), section 327 shall 
apply to outdoor luminaires to the same extent and in the same manner 
as the section applies under part B.
    ``(2) Any State standard that is adopted on or before January 1, 
2015, pursuant to a statutory requirement to adopt efficiency standards 
for reducing outdoor lighting energy use enacted prior to January 31, 
2008, shall not be preempted.''.
            (5) Energy efficiency standards for certain luminaires.--
        Not later than 1 year after the date of enactment of this Act, 
        the Secretary of Energy shall, in consultation with the 
        National Electrical Manufacturers Association, collect data for 
        United States sales of luminaires described in section 
        340(26)(H) and (M) of the Energy Policy and Conservation Act, 
        to determine the historical growth rate. If the Secretary finds 
        that the growth in market share of such luminaires exceeds 
        twice the year to year rate of the average of the previous 
        three years, then the Secretary shall within 12 months initiate 
        a rulemaking to determine if such exclusion should be 
        eliminated, if substitute products exist that perform more 
        efficiently and fulfill the performance functions of these 
        luminaires.
    (b) Portable Lighting.--
            (1) Portable light fixtures.--
                    (A) Definitions.--Section 321 of the Energy Policy 
                and Conservation Act (42 U.S.C. 6291) is amended by 
                adding at the end the following:
            ``(67) Art work light fixture.--The term `art work light 
        fixture' means a light fixture designed only to be mounted 
        directly to an art work and for the purpose of illuminating 
        that art work.
            ``(68) LED light engine.--The term `LED light engine' or 
        `LED light engine with integral heat sink' means a subsystem of 
        an LED light fixture that--
                    ``(A) includes 1 or more LED components, 
                including--
                            ``(i) an LED driver power source with 
                        electrical and mechanical interfaces; and
                            ``(ii) an integral heat sink to provide 
                        thermal dissipation; and
                    ``(B) may be designed to accept additional 
                components that provide aesthetic, optical, and 
                environmental control.
            ``(69) LED light fixture.--The term `LED light fixture' 
        means a complete lighting unit consisting of--
                    ``(A) an LED light source with 1 or more LED lamps 
                or LED light engines; and
                    ``(B) parts--
                            ``(i) to distribute the light;
                            ``(ii) to position and protect the light 
                        source; and
                            ``(iii) to connect the light source to 
                        electrical power.
            ``(70) Light fixture.--The term `light fixture' means a 
        product designed to provide light that includes--
                    ``(A) at least 1 lamp socket; and
                    ``(B) parts--
                            ``(i) to distribute the light;
                            ``(ii) position and protect 1 or more 
                        lamps; and
                            ``(iii) to connect 1 or more lamps to a 
                        power supply.
            ``(71) Portable light fixture.--
                    ``(A) In general.--The term `portable light 
                fixture' means a light fixture that has a flexible cord 
                and an attachment plug for connection to a nominal 120-
                volt circuit that--
                            ``(i) allows the user to relocate the 
                        product without any rewiring; and
                            ``(ii) typically can be controlled with a 
                        switch located on the product or the power cord 
                        of the product.
                    ``(B) Exclusions.--The term `portable light 
                fixture' does not include--
                            ``(i) direct plug-in night lights, sun or 
                        heat lamps, medical or dental lights, portable 
                        electric hand lamps, signs or commercial 
                        advertising displays, photographic lamps, 
                        germicidal lamps, or light fixtures for marine 
                        use or for use in hazardous locations (as those 
                        terms are defined in ANSI/NFPA 70 of the 
                        National Electrical Code); or
                            ``(ii) decorative lighting strings, 
                        decorative lighting outfits, or electric 
                        candles or candelabra without lamp shades that 
                        are covered by Underwriter Laboratories (UL) 
                        standard 588, `Seasonal and Holiday Decorative 
                        Products'.''.
                    (B) Coverage.--
                            (i) In general.--Section 322(a) of the 
                        Energy Policy and Conservation Act (42 U.S.C. 
                        6292(a)) is amended--
                                    (I) by redesignating paragraph (20) 
                                as paragraph (24); and
                                    (II) by inserting after paragraph 
                                (19) the following:
            ``(20) Portable light fixtures.''.
                            (ii) Conforming amendments.--Section 325(l) 
                        of the Energy Policy and Conservation Act (42 
                        U.S.C. 6295(l)) is amended by striking 
                        ``paragraph (19)'' each place it appears in 
                        paragraphs (1) and (2) and inserting 
                        ``paragraph (21)''.
                    (C) Test procedures.--Section 323(b) of the Energy 
                Policy and Conservation Act (42 U.S.C. 6293(b)) is 
                amended by adding at the end the following:
            ``(19) LED fixtures and led light engines.--Test procedures 
        for LED fixtures and LED light engines shall be based on 
        Illuminating Engineering Society of North America (IESNA) test 
        procedure LM-79, Approved Method for Electrical and Photometric 
        Testing of Solid-State Lighting Devices, and IESNA-approved 
        test procedure for testing LED light engines.''.
                    (D) Standards.--Section 325 of the Energy Policy 
                and Conservation Act (42 U.S.C. 6295) is amended--
                            (i) by redesignating subsection (ii) as 
                        subsection (nn);
                            (ii) in subsection (nn)(2), as redesignated 
                        in clause (i) of this subparagraph, by striking 
                        ``(hh)'' each place it appears and inserting 
                        ``(mm)''; and
                            (iii) by inserting after subsection (hh) 
                        the following:
    ``(ii) Portable Light Fixtures.--
            ``(1) In general.--Subject to paragraphs (2) and (3), 
        portable light fixtures manufactured on or after January 1, 
        2012, shall meet 1 or more of the following requirements:
                    ``(A) Be a fluorescent light fixture that meets the 
                requirements of the Energy Star Program for Residential 
                Light Fixtures, Version 4.2.
                    ``(B) Be equipped with only 1 or more GU-24 line-
                voltage sockets, not be rated for use with incandescent 
                lamps of any type (as defined in ANSI standards), and 
                meet the requirements of version 4.2 of the Energy Star 
                program for residential light fixtures.
                    ``(C) Be an LED light fixture or a light fixture 
                with an LED light engine and comply with the following 
                minimum requirements:
                            ``(i) Minimum light output: 200 lumens 
                        (initial).
                            ``(ii) Minimum LED light engine efficacy: 
                        40 lumens/watt installed in fixtures that meet 
                        the minimum light fixture efficacy of 29 
                        lumens/watt or, alternatively, a minimum LED 
                        light engine efficacy of 60 lumens/watt for 
                        fixtures that do not meet the minimum light 
                        fixture efficacy of 29 lumens/watt.
                            ``(iii) All portable fixtures shall have a 
                        minimum LED light fixture efficacy of 29 
                        lumens/watt and a minimum LED light engine 
                        efficacy of 60 lumens/watt by January 1, 2016.
                            ``(iv) Color Correlated Temperature (CCT): 
                        2700K through 4000K.
                            ``(v) Minimum Color Rendering Index (CRI): 
                        75.
                            ``(vi) Power factor equal to or greater 
                        than 0.70.
                            ``(vii) Portable luminaries that have 
                        internal power supplies shall have zero standby 
                        power when the luminaire is turned off.
                            ``(viii) LED light sources shall deliver at 
                        least 70 percent of initial lumens for at least 
                        25,000 hours.
                    ``(D)(i) Be equipped with an ANSI-designated E12, 
                E17, or E26 screw-based socket and be prepackaged and 
                sold together with 1 screw-based compact fluorescent 
                lamp or screw-based LED lamp for each screw-based 
                socket on the portable light fixture.
                    ``(ii) The compact fluorescent or LED lamps 
                prepackaged with the light fixture shall be fully 
                compatible with any light fixture controls incorporated 
                into the light fixture (for example, light fixtures 
                with dimmers shall be packed with dimmable lamps).
                    ``(iii) Compact fluorescent lamps prepackaged with 
                light fixtures shall meet the requirements of the 
                Energy Star Program for CFLs Version 4.0.
                    ``(iv) Screw-based LED lamps shall comply with the 
                minimum requirements described in subparagraph (C).
                    ``(E) Be equipped with 1 or more single-ended, non-
                screw based halogen lamp sockets (line or low voltage), 
                a dimmer control or high-low control, and be rated for 
                a maximum of 100 watts.
            ``(2) Review.--
                    ``(A) Review.--The Secretary shall review the 
                criteria and standards established under paragraph (1) 
                to determine if revised standards are technologically 
                feasible and economically justified.
                    ``(B) Components.--The review shall include 
                consideration of--
                            ``(i) whether a separate compliance 
                        procedure is still needed for halogen fixtures 
                        described in subparagraph (E) and, if 
                        necessary, what an appropriate standard for 
                        halogen fixtures shall be;
                            ``(ii) whether the specific technical 
                        criteria described in subparagraphs (A), (C), 
                        and (D)(iii) should be modified; and
                            ``(iii) which fixtures should be exempted 
                        from the light fixture efficacy standard as of 
                        January 1, 2016, because the fixtures are 
                        primarily decorative in nature (as defined by 
                        the Secretary) and, even if exempted, are 
                        likely to be sold in limited quantities.
                    ``(C) Timing.--
                            ``(i) Determination.--Not later than 
                        January 1, 2014, the Secretary shall publish 
                        amended standards, or a determination that no 
                        amended standards are justified, under this 
                        subsection.
                            ``(ii) Standards.--Any standards under this 
                        paragraph shall take effect on January 1, 2016.
            ``(3) Art work light fixtures.--Art work light fixtures 
        manufactured on or after January 1, 2012, shall--
                    ``(A) comply with paragraph (1); or
                    ``(B)(i) contain only ANSI-designated E12 screw-
                based line-voltage sockets;
                    ``(ii) have not more than 3 sockets;
                    ``(iii) be controlled with an integral high/low 
                switch;
                    ``(iv) be rated for not more than 25 watts if 
                fitted with 1 socket; and
                    ``(v) be rated for not more than 15 watts per 
                socket if fitted with 2 or 3 sockets.
            ``(4) Exception from preemption.--Notwithstanding section 
        327, Federal preemption shall not apply to a regulation 
        concerning portable light fixtures adopted by the California 
        Energy Commission on or before January 1, 2014.''.
            (2) GU-24 base lamps.--
                    (A) Definitions.--Section 321 of the Energy Policy 
                and Conservation Act (42 U.S.C. 6291) (as amended by 
                paragraph (1)(A)) is amended by adding at the end the 
                following:
            ``(72) GU-24.--The term `GU-24' means the designation of a 
        lamp socket, based on a coding system by the International 
        Electrotechnical Commission, under which--
                    ``(A) `G' indicates a holder and socket type with 2 
                or more projecting contacts, such as pins or posts;
                    ``(B) `U' distinguishes between lamp and holder 
                designs of similar type that are not interchangeable 
                due to electrical or mechanical requirements; and
                    ``(C) 24 indicates the distance in millimeters 
                between the electrical contact posts.
            ``(73) GU-24 adaptor.--
                    ``(A) In general.--The term `GU-24 Adaptor' means a 
                1-piece device, pig-tail, wiring harness, or other such 
                socket or base attachment that--
                            ``(i) connects to a GU-24 socket on 1 end 
                        and provides a different type of socket or 
                        connection on the other end; and
                            ``(ii) does not alter the voltage.
                    ``(B) Exclusion.--The term `GU-24 Adaptor' does not 
                include a fluorescent ballast with a GU-24 base.
            ``(74) GU-24 base lamp.--`GU-24 base lamp' means a light 
        bulb designed to fit in a GU-24 socket.''.
                    (B) Standards.--Section 325 of the Energy Policy 
                and Conservation Act (42 U.S.C. 6295) (as amended by 
                paragraph (1)(D)) is amended by inserting after 
                subsection (ii) the following:
    ``(jj) GU-24 Base Lamps.--
            ``(1) In general.--A GU-24 base lamp shall not be an 
        incandescent lamp as defined by ANSI.
            ``(2) GU-24 adaptors.--GU-24 adaptors shall not adapt a GU-
        24 socket to any other line voltage socket.''.
            (3) Standards for certain incandescent reflector lamps.--
        Section 325(i) of the Energy Policy and Conservation Act (42 
        U.S.C. 6293(i)), as amended by section 171(a)(12) of this Act, 
        is amended by adding at the end the following:
            ``(9) Certain incandescent reflector lamps.--(A) No later 
        than 12 months after enactment of this paragraph, the Secretary 
        shall publish a final rule establishing standards for 
        incandescent reflector lamp types described in paragraph 
        (1)(C). Such standards shall be effective on July 1, 2013.
            ``(B) Any rulemaking for incandescent reflector lamps 
        completed after enactment of this section shall consider 
        standards for all incandescent reflector lamps, inclusive of 
        those specified in paragraph (1)(C).
            ``(10) Reflector lamps.--No later than January 1, 2015, the 
        Secretary shall publish a final rule establishing and amending 
        standards for reflector lamps, including incandescent reflector 
        lamps. Such standards shall be effective no sooner than three 
        years after publication of the final rule. Such rulemaking 
        shall consider incandescent and nonincandescent technologies. 
        Such rulemaking shall consider a new metric other than lumens-
        per-watt based on the photometric distribution of light from 
        such lamps.''.

SEC. 212. OTHER APPLIANCE EFFICIENCY STANDARDS.

    (a) Standards for Water Dispensers, Hot Food Holding Cabinets, and 
Portable Electric Spas.--
            (1) Definitions.--Section 321 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6291), as amended by section 211 of 
        this Act, is further amended by adding at the end the 
        following:
            ``(75) The term `water dispenser' means a factory-made 
        assembly that mechanically cools and heats potable water and 
        that dispenses the cooled or heated water by integral or remote 
        means.
            ``(76) The term `bottle-type water dispenser' means a 
        drinking water dispenser designated for dispensing both hot and 
        cold water that uses a removable bottle or container as the 
        source of potable water.
            ``(77) The term `commercial hot food holding cabinet' means 
        a heated, fully enclosed compartment with one or more solid or 
        glass doors that is designed to maintain the temperature of hot 
        food that has been cooked in a separate appliance. Such term 
        does not include heated glass merchandizing cabinets, drawer 
        warmers, commercial hot food holding cabinets with interior 
        volumes of less than 8 cubic feet, or cook-and-hold appliances.
            ``(78) The term `portable electric spa' means a factory-
        built electric spa or hot tub, supplied with equipment for 
        heating and circulating water.''.
            (2) Coverage.--Section 322(a) of the Energy Policy and 
        Conservation Act (42 U.S.C. 6292(a)), as amended by section 
        211(b)(1)(B) of this Act, is further amended by inserting after 
        paragraph (20) the following new paragraphs:
            ``(21) Bottle type water dispensers.
            ``(22) Commercial hot food holding cabinets.
            ``(23) Portable electric spas.''.
            (3) Test procedures.--Section 323(b) of the Energy Policy 
        and Conservation Act (42 U.S.C. 6293(b)), as amended by section 
        211(b)(1)(C) of this Act, is further amended by adding at the 
        end the following:
            ``(20) Bottle type water dispensers.--Test procedures for 
        bottle type water dispensers shall be based on `Energy Star 
        Program Requirements for Bottled Water Coolers version 1.1' 
        published by the Environmental Protection Agency. Units with an 
        integral, automatic timer shall not be tested using section 4D, 
        `Timer Usage,' of the test criteria.
            ``(21) Commercial hot food holding cabinets.--Test 
        procedures for commercial hot food holding cabinets shall be 
        based on the test procedures described in ANSI/ASTM F2140-01 
        (Test for idle energy rate-dry test). Interior volume shall be 
        based on the method shown in the Environmental Protection 
        Agency's `Energy Star Program Requirements for Commercial Hot 
        Food Holding Cabinets' as in effect on August 15, 2003.
            ``(22) Portable electric spas.--Test procedures for 
        portable electric spas shall be based on the test method for 
        portable electric spas contained in section 1604, title 20, 
        California Code of Regulations as amended on December 3, 2008. 
        When the American National Standards Institute publishes a test 
        procedure for portable electric spas, the Secretary shall 
        revise the Department of Energy's procedure.''.
            (4) Standards.--Section 325 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6295), as amended by section 211 of 
        this Act, is further amended by adding after subsection (jj) 
        the following:
    ``(kk) Bottle Type Water Dispensers.--Effective January 1, 2012, 
bottle-type water dispensers designed for dispensing both hot and cold 
water shall not have standby energy consumption greater than 1.2 
kilowatt-hours per day.
    ``(ll) Commercial Hot Food Holding Cabinets.--Effective January 1, 
2012, commercial hot food holding cabinets with interior volumes of 8 
cubic feet or greater shall have a maximum idle energy rate of 40 watts 
per cubic foot of interior volume.
    ``(mm) Portable Electric Spas.--Effective January 1, 2012, portable 
electric spas shall not have a normalized standby power greater than 
5(V\2/3\) Watts where V = the fill volume in gallons.
The Secretary of Energy shall consider revisions to the standards in 
subsections (kk), (ll), and (mm) in accordance with subsection (o) and 
publish a final rule no later than January 1, 2013, establishing such 
revised standards, or make a finding that no revisions are technically 
feasible and economically justified. Any such revised standards shall 
take effect January 1, 2016.''.
    (b) Commercial Furnace Efficiency Standards.--Section 342(a) of the 
Energy Policy and Conservation Act (42 U.S.C. 6312(a)) is amended by 
inserting after paragraph (10) the following new paragraph:
            ``(11) Warm air furnaces.--Each warm air furnace with an 
        input rating of 225,000 Btu per hour or more and manufactured 
        after January 1, 2011, shall meet the following standard 
        levels:
                    ``(A) Gas-fired units.--
                            ``(i) Minimum thermal efficiency of 80 
                        percent.
                            ``(ii) Include an interrupted or 
                        intermittent ignition device.
                            ``(iii) Have jacket losses not exceeding 
                        0.75 percent of the input rating.
                            ``(iv) Have either power venting or a flue 
                        damper.
                    ``(B) Oil-fired units.--
                            ``(i) Minimum thermal efficiency of 81 
                        percent.
                            ``(ii) Have jacket losses not exceeding 
                        0.75 percent of the input rating.
                            ``(iii) Have either power venting or a flue 
                        damper.''.

SEC. 213. APPLIANCE EFFICIENCY DETERMINATIONS AND PROCEDURES.

    (a) Definition of Energy Conservation Standard.--Section 321(6) of 
the Energy Policy and Conservation Act (42 U.S.C. 6291(6)) is amended 
to read as follows:
            ``(6) Energy conservation standard.--
                    ``(A) In general.--The term `energy conservation 
                standard' means 1 or more performance standards that--
                            ``(i) for covered products (excluding 
                        clothes washers, dishwashers, showerheads, 
                        faucets, water closets, and urinals), prescribe 
                        a minimum level of energy efficiency or a 
                        maximum quantity of energy use, determined in 
                        accordance with test procedures prescribed 
                        under section 323;
                            ``(ii) for showerheads, faucets, water 
                        closets, and urinals, prescribe a minimum level 
                        of water efficiency or a maximum quantity of 
                        water use, determined in accordance with test 
                        procedures prescribed under section 323; and
                            ``(iii) for clothes washers and 
                        dishwashers--
                                    ``(I) prescribe a minimum level of 
                                energy efficiency or a maximum quantity 
                                of energy use, determined in accordance 
                                with test procedures prescribed under 
                                section 323; and
                                    ``(II) may include a minimum level 
                                of water efficiency or a maximum 
                                quantity of water use, determined in 
                                accordance with those test procedures.
                    ``(B) Inclusions.--The term `energy conservation 
                standard' includes--
                            ``(i) 1 or more design requirements, if the 
                        requirements were established--
                                    ``(I) on or before the date of 
                                enactment of this subclause;
                                    ``(II) as part of a direct final 
                                rule under section 325(p)(4); or
                                    ``(III) as part of a final rule 
                                published on or after January 1, 2012, 
                                and
                            ``(ii) any other requirements that the 
                        Secretary may prescribe under section 325(r).
                    ``(C) Exclusion.--The term `energy conservation 
                standard' does not include a performance standard for a 
                component of a finished covered product, unless 
                regulation of the component is specifically authorized 
                or established pursuant to this title.''.
    (b) Adopting Consensus Test Procedures and Test Procedures in Use 
Elsewhere.--Section 323(b) of the Energy Policy and Conservation Act 
(42 U.S.C. 6293(b)), as amended by sections 211 and 212 of this Act, is 
further amended by adding the following new paragraph after paragraph 
(22):
            ``(23) Consensus and alternate test procedures.--
                    ``(A) Receipt of joint recommendation or alternate 
                testing procedure.--On receipt of--
                            ``(i) a statement that is submitted jointly 
                        by interested persons that are fairly 
                        representative of relevant points of view 
                        (including representatives of manufacturers of 
                        covered products, States, and efficiency 
                        advocates), as determined by the Secretary, and 
                        contains recommendations with respect to the 
                        testing procedure for a covered product; or
                            ``(ii) a submission of a testing procedure 
                        currently in use for a covered product by a 
                        State, nation, or group of nations--
                                    ``(I) if the Secretary determines 
                                that the recommended testing procedure 
                                contained in the statement or 
                                submission is in accordance with 
                                subsection (b)(3), the Secretary may 
                                issue a final rule that establishes an 
                                energy or water conservation testing 
                                procedure that is published 
                                simultaneously with a notice of 
                                proposed rulemaking that proposes a new 
                                or amended energy or water conservation 
                                testing procedure that is identical to 
                                the testing procedure established in 
                                the final rule to establish the 
                                recommended testing procedure (referred 
                                to in this paragraph as a `direct final 
                                rule'); or
                                    ``(II) if the Secretary determines 
                                that a direct final rule cannot be 
                                issued based on the statement or 
                                submission, the Secretary shall publish 
                                a notice of the determination, together 
                                with an explanation of the reasons for 
                                the determination.
                    ``(B) Public comment.--The Secretary shall solicit 
                public comment for a period of at least 110 days with 
                respect to each direct final rule issued by the 
                Secretary under subparagraph (A)(ii)(I).
                    ``(C) Withdrawal of direct final rules.--
                            ``(i) In general.--Not later than 120 days 
                        after the date on which a direct final rule 
                        issued under subparagraph (A)(ii)(I) is 
                        published in the Federal Register, the 
                        Secretary shall withdraw the direct final rule 
                        if--
                                    ``(I) the Secretary receives 1 or 
                                more adverse public comments relating 
                                to the direct final rule under 
                                subparagraph (B)or any alternative 
                                joint recommendation; and
                                    ``(II) based on the rulemaking 
                                record relating to the direct final 
                                rule, the Secretary determines that 
                                such adverse public comments or 
                                alternative joint recommendation may 
                                provide a reasonable basis for 
                                withdrawing the direct final rule under 
                                paragraph (3) or any other applicable 
                                law.
                            ``(ii) Action on withdrawal.--On withdrawal 
                        of a direct final rule under clause (i), the 
                        Secretary shall--
                                    ``(I) proceed with the notice of 
                                proposed rulemaking published 
                                simultaneously with the direct final 
                                rule as described in subparagraph 
                                (A)(ii)(I); and
                                    ``(II) publish in the Federal 
                                Register the reasons why the direct 
                                final rule was withdrawn.
                            ``(iii) Treatment of withdrawn direct final 
                        rules.--A direct final rule that is withdrawn 
                        under clause (i) shall not be considered to be 
                        a final rule for purposes of subsection (b).
                    ``(D) Effect of paragraph.--Nothing in this 
                paragraph authorizes the Secretary to issue a direct 
                final rule based solely on receipt of more than 1 
                statement containing recommended test procedures 
                relating to the direct final rule.''.
    (c) Updating Television Test Methods.--Section 323(b) of the Energy 
Policy and Conservation Act (42 U.S.C. 6293(b)), as amended by sections 
211 and 212 of this Act, and subsection (b) of this section, is further 
amended by adding at the end the following new paragraph:
            ``(24) Televisions.--(A) On the date of enactment of this 
        section, Appendix H to Subpart B of Part 430 of the United 
        States Code of Federal Regulations, `Uniform Test Method for 
        Measuring the Energy Consumption of Television Sets', is 
        repealed.
            ``(B) No later than 12 months after enactment of this 
        paragraph the Secretary shall publish in the Federal Register a 
        final rule prescribing a new test method for televisions.''.
    (d) Criteria for Prescribing New or Amended Standards.--(1) Section 
325(o)(2)(B)(i) of the Energy Policy and Conservation Act (42 U.S.C. 
6295(o)(2)(B)(i)) is amended as follows:
            (A) By striking ``and'' at the end of subclause (VI).
            (B) By and inserting the following new subclauses after 
        subclause (VI):
            ``(VII) the estimated value of the carbon dioxide or other 
        emission reductions that will be achieved by virtue of the 
        higher energy efficiency of the covered products resulting from 
        the imposition of the standard;
            ``(VIII) the estimated impact of standards for a particular 
        product on average consumer energy prices;
            ``(IX) the increased energy efficiency that may be 
        attributable to the installation of Smart Grid technologies or 
        capabilities in the covered products, if applicable in the 
        determination of the Secretary;
            ``(X) the availability in the United States or in other 
        nations of examples or prototypes of covered products that 
        achieve significantly higher efficiency standards for energy or 
        for water; and''.
            (C) By redesignating subclause (VII) as subclause (XI).
    (2) Section 325(o)(2)(B)(iii) of such Act is amended as follows:
            (A) By striking ``three'' and inserting ``5''.
            (B) By inserting after the first sentence the following 
        ``For products with an average expected useful life of less 
        than 5 years, such rebuttable presumption shall be determined 
        utilizing 75 percent of the product's average expected useful 
        life as a multiplier instead of 5.''.
            (C) By striking the last sentence and inserting the 
        following: ``Such a presumption may be rebutted only if the 
        Secretary finds, based on clear, convincing, and reliable 
        evidence, that--
            ``(I) such standard level would cause serious and 
        unavoidable hardship to the average consumer of the product, or 
        to manufacturers supplying a significant portion of the market 
        for the product, that substantially outweighs the standard 
        level's benefits;
            ``(II) the standard and implementing regulations cannot be 
        designed to avoid or mitigate the hardship identified under 
        subparagraph (I), through the adoption of regional standards 
        consistent with paragraph (6) of this subsection, or other 
        reasonable means consistent with this chapter;
            ``(III) the same or substantially similar hardship would 
        not occur under a standard adopted in the absence of the 
        presumption, but that otherwise meets the requirements of this 
        section; and
            ``(IV) the hardship cannot be avoided or mitigated pursuant 
        the procedures specified in section 504 of the Department of 
        Energy Organization Act (42 U.S.C. 7194).
A determination by the Secretary that the criteria triggering such 
presumption are not met, or that the criterion for rebutting the 
presumption are met shall not be taken into consideration in the 
Secretary's determination of whether a standard is economically 
justified.''.
    (e) Obtaining Appliance Information From Manufacturers.--Section 
326(d) of the Energy Policy and Conservation Act (42 U.S.C. 6295(d)) is 
amended to read as follows:
    ``(d) Information Requirements.--(1) For purposes of carrying out 
this part, the Secretary shall publish proposed regulations not later 
than one year after the date of enactment of the American Clean Energy 
and Security Act of 2009, and after receiving public comment, final 
regulations not later than 18 months from such date of enactment under 
this part or other provision of law administered by the Secretary, 
which shall require each manufacturer of a covered product to submit 
information or reports to the Secretary on an annual basis in a form 
adopted by the Secretary. Such reports shall include information or 
data with respect to--
            ``(A) the manufacturers' compliance with all requirements 
        applicable pursuant to this part;
            ``(B) the economic impact of any proposed energy 
        conservation standard;
            ``(C) the manufacturers' annual shipments of each class or 
        category of covered products, organized, to the maximum extent 
        practicable, by--
                    ``(i) energy efficiency, energy use, and, if 
                applicable, water use;
                    ``(ii) the presence or absence of such efficiency 
                related or energy consuming operational characteristics 
                or components as the Secretary determines are relevant 
                for the purposes of carrying out this part; and
                    ``(iii) the State or regional location of sale, for 
                covered products for which the Secretary may adopt 
                regional standards; and
            ``(D) such other categories of information as the Secretary 
        deems relevant to carry out this part, including such other 
        information as may be necessary to establish and revise test 
        procedures, labeling rules, and energy conservation standards 
        and to insure compliance with the requirements of this part.
    ``(2) In adopting regulations under this subsection, the Secretary 
shall consider existing public sources of information, including 
nationally recognized certification programs of trade associations.
    ``(3) The Secretary shall exercise authority under this section in 
a manner designed to minimize unnecessary burdens on manufacturers of 
covered products.
    ``(4) To the extent that they do not conflict with the duties of 
the Secretary in carrying out this part, the provisions of section 
11(d) of the Energy Supply and Environmental Coordination Act of 1974 
(15 U.S.C. 796(d)) shall apply with respect to information obtained 
under this subsection to the same extent and in the same manner as they 
apply with respect to other energy information obtained under such 
section.''.
    (f) State Waiver.--Section 327(c) of the Energy Policy and 
Conservation Act (42 U.S.C. 6297(c)), as amended by section 171(a)(19) 
of this Act, is further amended by adding at the end the following:
            ``(12) is a regulation concerning standards for hot food 
        holding cabinets, drinking water dispensers and portable 
        electric spas adopted by the California Energy Commission on or 
        before January 1, 2013.''.
    (g) Waiver of Federal Preemption.--Paragraph (1) of section 327(d) 
of the Energy Policy and Conservation Act (42 U.S.C. 6297(d)) is 
amended as follows:
            (1) In subparagraph (A) by striking ``State regulation'' 
        each place it appears and inserting ``State statute or 
        regulation''.
            (2) In subparagraph (B) by adding at the end the following 
        new sentence: ``In making such a finding, the Secretary may not 
        reject a petition for failure of the petitioning State or river 
        basin commission to produce confidential information maintained 
        by any manufacturer or distributor, or group or association of 
        manufacturers or distributors, and which the petitioning party 
        does not have the legal right to obtain.''.
            (3) In clause (ii) of subparagraph (C) by striking 
        ``costs'' each place it appears and inserting ``estimated 
        costs''.
            (4) In subparagraph (C) by striking ``within the context of 
        the State's energy plan and forecast, and,''.
    (h) Inclusion of Carbon Output on Appliance ``Energyguide'' 
Labels.--(1) Section 324(a)(2) of the Energy Policy and Conservation 
Act (42 U.S.C. 6294(a)(2)) is amended by adding the following at the 
end:
                    ``(I)(i) Not later than 90 days after the date of 
                enactment of this subparagraph, the Commission shall 
                initiate a rulemaking to implement the additional 
                labeling requirements specified in subsection (c)(1)(C) 
                of this section with an effective date for the revised 
                labeling requirement not later than 12 months from 
                issuance of the final rule.
                    ``(ii) Not later than 24 months after the date of 
                enactment of this subparagraph, the Commission shall 
                complete the rulemaking initiated under clause (i).
                    ``(iii) Not later than 90 days after issuance of 
                the final rule as provided in this subparagraph, the 
                Secretary shall issue calculation methods required to 
                effectuate the labeling requirements specified in 
                subsection (c)(1)(C) of this section.''.
            (2) Section 324(c)(1) of the Energy Policy and Conservation 
        Act (42 U.S.C. 6294(c)(1)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (A);
                    (B) by striking the period at the end of 
                subparagraph (B); and
                    (C) by adding at the end the following new 
                subparagraphs:
                    ``(C) for products or groups of products providing 
                a comparable function (including the group of products 
                comprising the heating function of heat pumps and 
                furnaces) among covered products listed in paragraphs 
                (3), (4), (5), (8), (9), (10), and (11) of section 
                322(a) of this part, and others designated by the 
                Secretary, the estimated total annual atmospheric 
                carbon dioxide emissions (or their equivalent in other 
                greenhouse gases) associated with, or caused by, the 
                product, calculated utilizing--
                            ``(i) national average energy use for the 
                        product including energy consumed at the point 
                        of end use based on test procedures developed 
                        under section 323 of this part;
                            ``(ii) national average energy consumed or 
                        lost in the production, generation, 
                        transportation, storage, and distribution of 
                        energy to the point of end use; and
                            ``(iii) any direct emissions of greenhouse 
                        gases from the product during normal use;
                    ``(D) in determining the national average energy 
                consumption and total annual atmospheric carbon dioxide 
                emissions, the Secretary shall utilize Federal 
                Government sources, including the Energy Information 
                Administration Annual Energy Review, the Environmental 
                Protection Agency eGRID data base, Environmental 
                Protection Agency AP-42 Emission Factors as amended, 
                and other sources determined to be appropriate by the 
                Secretary; and
                    ``(E) information presenting, for each product (or 
                group of products providing the comparable function) 
                identified in section (c)(1)(C) of this section, the 
                estimated annual carbon dioxide emissions calculated 
                within the range of emissions calculated for all models 
                of the product or group according to its function, 
                including those models consuming fuels and those models 
                not consuming fuels.''.
    (i) Permitting States To Seek Injunctive Enforcement.--Section 334 
of the Energy Policy and Conservation Act (42 U.S.C. 6304(a)) is 
amended to read as follows:

``SEC. 334. JURISDICTION AND VENUE.

    ``(a) Jurisdiction.--The United States district courts shall have 
jurisdiction to restrain--
            ``(1) any violation of section 332; and
            ``(2) any person from distributing in commerce any covered 
        product which does not comply with an applicable rule under 
        section 324 or 325.
    ``(b) Authority.--Any action referred to in subsection (a) shall be 
brought by the Commission or by the attorney general of a State in the 
name of the State, except that--
            ``(1) any such action to restrain any violation of section 
        332(a)(3) which relates to requirements prescribed by the 
        Secretary or any violation of section 332(a)(4) which relates 
        to request of the Secretary under section 326(b)(2) shall be 
        brought by the Secretary; and
            ``(2) any violation of section 332(a)(5) or 332(a)(7) shall 
        be brought by the Secretary or by the attorney general of a 
        State in the name of the State.
    ``(c) Venue and Service of Process.--Any such action may be brought 
in the United States district court for a district wherein any act, 
omission, or transaction constituting the violation occurred, or in 
such court of the district wherein the defendant is found or transacts 
business. In any action under this section, process may be served on a 
defendant in any other district in which the defendant resides or may 
be found.''.
    (j) Treatment of Appliances Within Building Codes.--(1) Section 
327(f)(3) of the Energy Policy and Conservation Act (42 U.S.C. 
6297(f)(3)) is amended by striking subparagraphs (B) through (E) and 
inserting the following:
                    ``(B) The code meets at least one of the following 
                requirements:
                            ``(i) The code does not require that the 
                        covered product have an energy efficiency 
                        exceeding--
                                    ``(I) the applicable energy 
                                conservation standard established in or 
                                prescribed under section 325;
                                    ``(II) the level required by a 
                                regulation of that State for which the 
                                Secretary has issued a rule granting a 
                                waiver under subsection (d) of this 
                                section; or
                                    ``(III) the required level 
                                established in the International Energy 
                                Conservation Code or in a standard of 
                                the American Society of Heating, 
                                Refrigerating and Air-Conditioning 
                                Engineers, or by the Secretary pursuant 
                                to section 304 of the Energy 
                                Conservation and Production Act.
                            ``(ii) If the code uses one or more 
                        baseline building designs against which all 
                        submitted building designs are to be evaluated 
                        and such baseline building designs contain a 
                        covered product subject to an energy 
                        conservation standard established in or 
                        prescribed under section 325, the baseline 
                        building designs are based on an efficiency 
                        level for such covered product which meets but 
                        does not exceed one of the levels specified in 
                        clause (i).
                            ``(iii) If the code sets forth one or more 
                        optional combinations of items which meet the 
                        energy consumption or conservation objective, 
                        in at least one combination that the State has 
                        found to be reasonably achievable using 
                        commercially available technologies the 
                        efficiency of the covered product meets but 
                        does not exceed one of the levels specified in 
                        clause (i).
                    ``(C) The credit to the energy consumption or 
                conservation objective allowed by the code for 
                installing covered products having energy efficiencies 
                exceeding one of the levels specified in subparagraph 
                (B)(i) is on a one-for-one equivalent energy use or 
                equivalent energy cost basis, taking into account the 
                typical lifetime of the product.
                    ``(D) The energy consumption or conservation 
                objective is specified in terms of an estimated total 
                consumption of energy (which may be calculated from 
                energy loss- or gain-based codes) utilizing an 
                equivalent amount of energy (which may be specified in 
                units of energy or its equivalent cost) and equivalent 
                lifetimes.
                    ``(E) The estimated energy use of any covered 
                product permitted or required in the code, or used in 
                calculating the objective, is determined using the 
                applicable test procedures prescribed under section 
                323, except that the State may permit the estimated 
                energy use calculation to be adjusted to reflect the 
                conditions of the areas where the code is being applied 
                if such adjustment is based on the use of the 
                applicable test procedures prescribed under section 323 
                or other technically accurate documented procedure.''.
            (2) Section 327(f)(4)(B) of the Energy Policy and 
        Conservation Act (42 U.S.C. 6297(f)(4)(B)) is amended to read 
        as follows:
                    ``(B) If a building code requires the installation 
                of covered products with efficiencies exceeding the 
                levels and requirements specified in paragraph (3)(B), 
                such requirement of the building code shall not be 
                applicable unless the Secretary has granted a waiver 
                for such requirement under subsection (d) of this 
                section.''.

SEC. 214. BEST-IN-CLASS APPLIANCES DEPLOYMENT PROGRAM.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Secretary of Energy, in consultation with the 
Administrator, shall establish a program to be known as the ``Best-in-
Class Appliances Deployment Program'' to--
            (1) provide bonus payments to retailers or distributors 
        under subsection (c) for sales of best-in-class high-efficiency 
        household appliance models, high-efficiency installed building 
        equipment, and high-efficiency consumer electronics, with the 
        goal of reducing life-cycle costs for consumers, encouraging 
        innovation, and maximizing energy savings and public benefit;
            (2) provide bounties under subsection (d) to retailers for 
        the replacement, retirement, and recycling of old, inefficient, 
        and environmentally harmful products; and
            (3) provide premium awards under subsection (e) to 
        manufacturers for developing and producing new Superefficient 
        Best-in-Class Products.
    (b) Designation of Best-in-Class Product Models.--
            (1) In general.--The Secretary of Energy shall designate 
        product models of appliances, equipment, or electronics as 
        Best-in-Class Product models. The Secretary shall publicly 
        announce the Best-in-Class Product models designated under this 
        subsection. The Secretary shall define product classes broadly 
        and, except as provided in paragraph (2), shall designate as 
        Best-in-Class Product models no more than the most efficient 10 
        percent of the commercially available product models in a class 
        that demonstrate, as a group, a distinctly greater energy 
        efficiency than the average energy efficiency of that class of 
        appliances, equipment, or electronics. In designating models, 
        the Secretary shall--
                    (A) identify commercially available models in the 
                relevant class of products;
                    (B) identify the subgroup of those models that 
                share the distinctly higher energy-efficiency 
                characteristics that warrant designation as best-in-
                class; and
                    (C) add other models in that class to the list of 
                Best-in-Class Product models as they demonstrate their 
                ability to meet the higher-efficiency characteristics 
                on which the designation was made.
            (2) Percentage exception.--If there are fewer than 10 
        product models in a class of products, the Secretary may 
        designate one or more of such models as Best-in-Class Products.
            (3) Review of best-in-class standards.--The Secretary shall 
        review annually the product-specific criteria for designating, 
        and the product models that qualify as, Best-in-Class Products 
        and, after notice and a 30-day comment period, make upwards 
        adjustments in the efficiency criteria as necessary to maintain 
        an appropriate ratio of such product models to the total number 
        of product models in the product class.
    (c) Bonuses for Sales of Best-in-Class Products.--
            (1) In general.--The Secretary of Energy shall make bonus 
        payments to retailers or, as provided in paragraph (5)(B), 
        distributors for the sale of Best-in-Class Products.
            (2) Bonus program.--The Secretary shall--
                    (A) publicly announce the availability and amount 
                of the bonus to be paid for each sale of a Best-in-
                Class Product of a model designated under subsection 
                (b); and
                    (B) make bonus payments in at least that amount for 
                each Best-in-Class Product of that model sold during 
                the 3-year period beginning on the date the model is 
                designated under subsection (b).
            (3) Upgrade of best-in-class product eligibility.--In 
        conducting a review under subsection (b)(3), the Secretary 
        shall--
                    (A) consider designating as a Best-in-Class Product 
                model a Superefficient Best-in-Class Product model that 
                has been designated pursuant to subsection (e);
                    (B) announce any change in the bonus payment as 
                necessary to increase the market share of Best-in-Class 
                Product models;
                    (C) list models that will be eligible for bonuses 
                in the new amount; and
                    (D) continue paying bonus payments at the original 
                level, for the sale of any models that previously 
                qualified as Best-in-Class Products but do not qualify 
                at the new level, for the remainder of the 3-year 
                period announced with the original designation.
            (4) Size of individual bonus payments.--(A) The size of 
        each bonus payment under this subsection shall be the product 
        of--
                            (i) an amount determined by the Secretary; 
                        and
                            (ii) the difference in energy consumption 
                        between the Best-in-Class Product and the 
                        average product in the product class.
            (B) The Secretary shall determine the amount under 
        subparagraph (A)(i) for each product type, in consultation with 
        State and utility efficiency program administrators as well as 
        the Administrator, based on estimates of the amount of bonus 
        payment that would provide significant incentive to increase 
        the market share of Best-in-Class Products.
            (5) Eligible bonus recipient.--(A) The Secretary shall 
        ensure that not more than 1 bonus payment is provided under 
        this subsection for each Best-in-Class Product.
            (B) The Secretary may make distributors eligible to receive 
        bonus payments under this subsection for sales that are not to 
        the final end-user, to the extent that the Secretary determines 
        that for a particular product category distributors are well 
        situated to increase sales of Best-in-Class Products.
    (d) Bounties for Replacement, Retirement, and Recycling of Existing 
Low-Efficiency Products.--
            (1) In general.--The Secretary of Energy shall make bounty 
        payments to retailers for the replacement, retirement, and 
        recycling of older operating low-efficiency products that might 
        otherwise continue in operation.
            (2) Bounties.--Bounties shall be payable upon documentation 
        that the sale of a Best-in-Class Product was accompanied by the 
        replacement, retirement, and recycling of--
                    (A) an inefficient but still-functioning product; 
                or
                    (B) a nonfunctioning product containing a 
                refrigerant,
        by the consumer to whom the Best-in-Class Product was sold.
            (3) Amount.--
                    (A) Functioning products.--The bounty payment 
                payable under this subsection for a product described 
                in paragraph (2)(A) shall be based on the difference 
                between the estimated energy use of the product 
                replaced and the energy use of an average new product 
                in the product class, over the estimated remaining 
                lifetime of the product that was replaced.
                    (B) Nonfunctioning products containing 
                refrigerants.--The bounty payment payable under this 
                subsection for a product described in paragraph (2)(B) 
                shall be in the amount that the Secretary of Energy, in 
                consultation with the Administrator, determines is 
                sufficient to promote the recycling of such products, 
                up to the amount of bounty for a comparable product 
                described in paragraph (2)(A).
            (4) Retirement.--The Secretary shall ensure that no product 
        for which a bounty is paid under this subsection is returned to 
        active service, but that it is instead destroyed, and recycled 
        to the extent feasible.
            (5) Recycling appliances containing refrigerants.--The 
        Secretary shall ensure that standards for environmentally 
        responsible methods of recycling established by the 
        Administrator pursuant to section 608 of the Clean Air Act are 
        employed before a bounty payment is made under this subsection 
        for a product containing a refrigerant. Nothing in this section 
        shall be interpreted to alter the requirements of section 608 
        of the Clean Air Act or to relieve any person from complying 
        with those requirements.
    (e) Premium Awards for Development and Production of Superefficient 
Best-in-Class Products.--
            (1) In general.--(A) The Secretary of Energy shall provide 
        premium awards to manufacturers for the development and 
        production of Superefficient Best-in-Class Products. The 
        Secretary shall set and periodically revise standards for 
        eligibility of products for designation as a Superefficient 
        Best-in-Class Product.
            (B) The Secretary may establish a standard for a 
        Superefficient Best-in-Class Product even if no product meeting 
        that standard exists, if the Secretary has reasonable grounds 
        to conclude that a mass-producible product could be made to 
        meet that standard.
            (C) The Secretary may also establish a Superefficient Best-
        in-Class Product standard that is met by one or more existing 
        Best-in-Class Product models, if those product models have 
        distinct energy efficiency attributes and performance 
        characteristics that make them significantly better than other 
        product models qualifying as best-in-class. The Secretary may 
        not designate as Superefficient Best-in-Class Products under 
        this subparagraph models that represent more than 10 percent of 
        the currently qualifying Best-in-Class Product models.
            (2) Premium awards.--(A) The premium award payment provided 
        to a manufacturer under this subsection shall be in addition to 
        any bonus payments made under subsection (c).
            (B) The amount of the premium award paid per unit of 
        Superefficient Best-in-Class Products sold to retailers or 
        distributors shall be the product of--
                    (i) an amount determined by the Secretary; and
                    (ii) the difference in energy consumption between 
                the Superefficient Best-in-Class Product and the 
                average product in the product class.
            (C) The Secretary shall determine the amount under 
        subparagraph (B)(i) for each product type, in consultation with 
        State and utility efficiency program administrators as well as 
        the Administrator, based on consideration of the present value 
        to the Nation of the energy (and water or other resources or 
        inputs) saved over the useful life of the product. The 
        Secretary may also take into consideration the methods used to 
        increase sales of qualifying products in determining such 
        amount.
            (D) The Secretary may adjust the value described in 
        subparagraph (C) upward or downward as appropriate, including 
        based on the effect of the premium awards on the sales of 
        products in different classes that may be affected by the 
        program under this subsection.
            (E) Premium award payments shall be applied to sales of any 
        Superefficient Best-in-Class Product for the first 3 years 
        after designation as a Superefficient Best-in-Class Product.
            (3) Coordination of incentives.--No product for which 
        Federal tax credit is received under section 45M of the 
        Internal Revenue Code of 1986 shall be eligible to receive 
        premium award payments pursuant to this subsection.
    (f) Reporting.--The Secretary of Energy shall require, as a 
condition of receiving a bonus, bounty, or premium award under this 
section, that a report containing the following documentation be 
provided:
            (1) For retailers and distributors, the number of units 
        sold within each product type, and model-specific wholesale 
        purchase prices and retail sale prices, on a monthly basis.
            (2) For manufacturers, model-specific energy consumption 
        data.
            (3) For manufacturers, on an immediate basis, information 
        concerning any product design or function changes that affect 
        the energy consumption of the unit.
            (4) The methods used to increase the sales of qualifying 
        products.
    (g) Monitoring and Verification Protocols.--The Secretary of Energy 
shall establish monitoring and verification protocols for energy 
consumption tests for each product model and for sales of energy-
efficient models.
    (h) Disclosure.--The Secretary of Energy may require that retailers 
and distributors disclose publicly and to consumers their participation 
in the program under this section.
    (i) Cost-Effectiveness Requirement.--
            (1) Requirement.--The Secretary of Energy shall make cost-
        effectiveness a top priority in designing the program under, 
        and administering, this section, except that the cost-
        effectiveness of providing premium awards to manufacturers 
        under subsection (e), in aggregate, may be lower by this 
        measure than that of the bonuses and bounties to retailers and 
        distributors under subsections (c) and (d).
            (2) Definitions.--In this subsection:
                    (A) Cost-effectiveness.--The term ``cost-
                effectiveness'' means a measure of aggregate savings in 
                the cost of energy over the lifetime of a product in 
                relation to the cost to the Secretary of the bonuses, 
                bounties, and premium awards provided under this 
                section for a product.
                    (B) Savings.--The term ``savings'' means the 
                cumulative megawatt-hours of electricity or million 
                British thermal units of other fuels saved by a product 
                during the projected useful life of the product, in 
                comparison to projected energy consumption of the 
                average product in the same class, taking into 
                consideration the impact of any documented measures to 
                replace, retire, and recycle low-efficiency products at 
                the time of purchase of highly efficient substitutes.
    (j) Definitions.--In this section--
            (1) the term ``distributor'' mean an individual, 
        organization, or company that sells products in multiple lots 
        and not directly to end-users;
            (2) the term ``retailer'' means an individual, 
        organization, or company that sells products directly to end-
        users; and
            (3) the term ``Superefficient Best-in-Class Product'' means 
        a product that--
                    (A) can be mass produced; and
                    (B) achieves the highest level of efficiency that 
                the Secretary of Energy finds can, given the current 
                state of technology, be produced and sold commercially 
                to mass-market consumers.
    (k) Authorization of Appropriations.--There are authorized to be 
appropriated $300,000,000 for each of the fiscal years 2010 through 
2014 to the Secretary of Energy for purposes of this section, of which 
not more than 10 percent for any fiscal year may be expended on program 
administration.

SEC. 215. PURPOSE OF ENERGY STAR.

    Section 324A of the Energy Policy and Conservation Act (42 U.S.C. 
6294a) is amended--
            (1) by redesignating subsections (b) through (d) as 
        subsections (c) through (e), respectively; and
            (2) by inserting after subsection (a) the following new 
        subsection:
    ``(b) Purpose.--The purpose of the Energy Star program for products 
is to assist consumers in selecting products for purchase that have 
demonstrated high energy efficiency and that are cost-effective from 
the consumer's perspective, ensuring that any incremental cost 
attributable to the energy-efficient features of such products will be 
more than recovered in the value of energy savings the products will 
make possible within several years of purchase, typically within 3 
years but no more than 5 years.''.

                 Subtitle C--Transportation Efficiency

SEC. 221. EMISSIONS STANDARDS.

    (a) Motor Vehicle Standards.--The President shall use statutory 
authorities in effect on the day before the date of enactment of this 
section to set motor vehicle standards that--
            (1) are achievable by the automobile manufacturing 
        companies;
            (2) to the extent practicable, harmonize standards that may 
        be set by the National Highway Traffic Safety Administration 
        pursuant to the authority in chapter 329 of title 49, United 
        States Code, standards that may be set by the Administrator of 
        the Environmental Protection Agency pursuant to the authority 
        in the Clean Air Act, and standards that have or may be set by 
        the State of California;
            (3) achieve at least as much emissions reductions as would 
        be achieved by implementation of the California law AB 1493 if 
        enforced in the State of California and the other States that 
        have adopted the standard; and
            (4) do not preempt California's legal authority to adopt 
        and enforce its own mobile source emissions standards.
    (b) Greenhouse Gas Emission Standards for Mobile Sources.--Title 
VIII of the Clean Air Act, as added by section 331 of this Act, is 
amended by inserting after part A the following new part:

                        ``PART B--MOBILE SOURCES

``SEC. 821. GREENHOUSE GAS EMISSION STANDARDS FOR MOBILE SOURCES.

    ``(a) Motor Vehicles and Engines.--
            ``(1) Pursuant to section 202(a)(1), by December 31, 2010, 
        the Administrator shall promulgate standards applicable to 
        emissions of greenhouse gases from new heavy-duty vehicles and 
        engines, excluding such vehicles covered by the Tier II 
        standards (as established by the Administrator as of the date 
        of enactment of this section). The Administrator may revise 
        these standards from time to time.
            ``(2) Regulations issued under section 202(a)(1) applicable 
        to emissions of greenhouse gases from new heavy-duty vehicles 
        and engines, excluding such vehicles covered by the Tier II 
        standards (as established by the Administrator as of the date 
        of enactment of this section), shall contain standards that 
        achieve the greatest degree of emissions reduction achievable 
        based on the application of technology which the Administrator 
        determines will be available at the time such standards take 
        effect, taking into consideration cost, energy, and safety 
        factors associated with the application of such technology. Any 
        such regulations shall take effect after such period as the 
        Administrator finds necessary to permit the development and 
        application of the requisite technology.
    ``(b) Nonroad Vehicles and Engines.--
            ``(1) Pursuant to section 213(a)(4), the Administrator 
        shall promulgate standards applicable to emissions of 
        greenhouse gases from new marine vessels and locomotives, and 
        from new engines used in marine vessels and locomotives, by 
        December 31, 2012. The Administrator shall also promulgate 
        standards applicable to emissions of greenhouse gases for such 
        other classes and categories of nonroad vehicles and engines as 
        the Administrator determines appropriate and in the timeframe 
        the Administrator determines appropriate. The Administrator 
        shall base such determination, among other factors, on the 
        relative contribution of greenhouse gas emissions, and the 
        costs for achieving reductions, from such classes or categories 
        of new nonroad engines and vehicles. The Administrator may 
        revise these standards from time to time.
            ``(2) Standards under section 213(a)(4) applicable to 
        emissions of greenhouse gases from new marine vessels and 
        locomotives, and from new engines used in marine vessels and 
        locomotives, shall achieve the greatest degree of emissions 
        reduction achievable based on the application of technology 
        which the Administrator determines will be available at the 
        time such standards take effect, taking into consideration 
        cost, energy, and safety factors associated with the 
        application of such technology. Any such regulations shall take 
        effect after such period as the Administrator finds necessary 
        to permit the development and application of the requisite 
        technology.
            ``(3) For purposes of this section and standards under 
        section 213(a)(4) applicable to emissions of greenhouse gases, 
        the term `nonroad engines and vehicles' shall include non-
        internal combustion engines and the vehicles these engines 
        power (such as electric engines and electric vehicles), for 
        those non-internal combustion engines and vehicles which would 
        be in the same category and have the same uses as nonroad 
        engines and vehicles that are powered by internal combustion 
        engines.
    ``(c) Aircraft and Aircraft Engines.--
            ``(1) Pursuant to section 231(a), the Administrator shall 
        promulgate standards applicable to emissions of greenhouse 
        gases from new aircraft and new engines used in aircraft by 
        December 31, 2012. Notwithstanding any requirement in section 
        231(a), the Administrator shall also promulgate standards 
        applicable to emissions of greenhouse gases from other classes 
        and categories of aircraft and aircraft engines for such 
        classes and categories as the Administrator determines 
        appropriate and in the timeframe the Administrator determines 
        appropriate. The Administrator may revise these standards from 
        time to time.
            ``(2) Standards under section 231(a) applicable to 
        emissions of greenhouse gases from new aircraft and new engines 
        used in aircraft, and any later revisions or additional 
        standards, shall achieve the greatest degree of emissions 
        reduction achievable based on the application of technology 
        which the Administrator determines will be available at the 
        time such standards take effect, taking into consideration 
        cost, energy, and safety factors associated with the 
        application of such technology. Any such standards shall take 
        effect after such period as the Administrator finds necessary 
        to permit the development and application of the requisite 
        technology.
    ``(d) Averaging, Banking, and Trading of Emissions Credits.--In 
establishing standards applicable to emissions of greenhouse gases 
pursuant to this section and sections 202(a), 213(a)(4), and 231(a), 
the Administrator may establish provisions for averaging, banking, and 
trading of greenhouse gas emissions credits within or across classes or 
categories of motor vehicles and motor vehicle engines, nonroad 
vehicles and engines (including marine vessels), and aircraft and 
aircraft engines, to the extent the Administrator determines 
appropriate and considering the factors appropriate in setting 
standards under those sections. Such provisions may include reasonable 
and appropriate provisions concerning generation, banking, trading, 
duration, and use of credits.
    ``(e) Reports.--The Administrator shall, from time to time, submit 
a report to Congress that projects the amount of greenhouse gas 
emissions from the transportation sector, including transportation 
fuels, for the years 2030 and 2050, based on the standards adopted 
under this section.''.

SEC. 222. GREENHOUSE GAS EMISSIONS REDUCTIONS THROUGH TRANSPORTATION 
              EFFICIENCY.

    Title VIII of the Clean Air Act, as added by section 331 of this 
Act, is further amended by inserting after part C the following new 
part:

                    ``PART D--PLANNING REQUIREMENTS

``SEC. 841. GREENHOUSE GAS EMISSIONS REDUCTIONS THROUGH TRANSPORTATION 
              EFFICIENCY.

    ``(a) In General.--Each State shall--
            ``(1) not later than 3 years after the date of enactment of 
        this section, submit to the Administrator goals for 
        transportation-related greenhouse gas emissions reductions; and
            ``(2) as part of each transportation plan or transportation 
        improvement program developed under title 23 or title 49, 
        United States Code, ensure that a plan to achieve such goals, 
        or an updated version of such a plan, is submitted to the 
        Administrator and to the Secretary of Transportation (in this 
        section referred to as the `Secretary') by each metropolitan 
        planning organization in the State for an area with a 
        population exceeding 200,000.
    ``(b) Models and Methodologies.--
            ``(1) In general.--The Administrator shall promulgate 
        regulations to establish standards for use in developing goals, 
        plans, and strategies under this section and for monitoring 
        progress toward such goals. Such standards shall include--
                    ``(A) data collection techniques for assessing 
                State and regional transportation-related greenhouse 
                gas emissions;
                    ``(B) methodologies for determining transportation-
                related greenhouse gas emissions baselines;
                    ``(C) models and methodologies for scenario 
                analysis; and
                    ``(D) models and methodologies for estimating 
                transportation-related greenhouse gas emissions 
                reductions from the strategies considered under this 
                section.
        Such regulations may approve or improve existing models and 
        methodologies.
            ``(2) Timing.--The Administrator shall--
                    ``(A) publish proposed regulations under paragraph 
                (1) not later than 1 year after the date of enactment 
                of this section; and
                    ``(B) promulgate final regulations under paragraph 
                (1) not later than 2 years after such date of 
                enactment.
            ``(3) Assessment.--At least every 6 years after 
        promulgating final regulations under paragraph (1), the 
        Administrator, in coordination with the Secretary, shall assess 
        current and projected progress in reducing transportation-
        related greenhouse gas emissions. The assessment shall examine 
        the contributions to emissions reductions attributable to 
        improvements in vehicle efficiency, greenhouse gas performance 
        of transportation fuels, and increased efficiency in utilizing 
        transportation systems.
    ``(c) Greenhouse Gas Reduction Goals.--
            ``(1) Consultation.--Each State shall develop the goals 
        referred to in subsection (a)(1)--
                    ``(A) in concurrence with State agencies 
                responsible for air quality and transportation;
                    ``(B) in consultation with each metropolitan 
                planning organization for an area in the State with a 
                population exceeding 200,000 and applicable local air 
                quality and transportation agencies; and
                    ``(C) with public involvement, including public 
                comment periods and meetings.
            ``(2) Period.--The goals referred to in subsection (a)(1) 
        shall be for 4-, 10-, and 20-year periods.
            ``(3) Targets; designated year.--The goals referred to in 
        subsection (a)(1) shall establish targets to reduce 
        transportation-related greenhouse gas emissions in the covered 
        area. The targets shall be designed to ensure that the levels 
        of such emissions stabilize and decrease after a designated 
        year. The State shall consider designating 2010 as such 
        designated year.
            ``(4) Covered area.--The goals referred to in subsection 
        (a)(1)--
                    ``(A) shall be established on a statewide basis;
                    ``(B) shall be established for each metropolitan 
                planning organization in the State for an area with a 
                population exceeding 200,000; and
                    ``(C) may be established on a voluntary basis, in 
                accordance with the provisions of this section, for any 
                metropolitan planning organization not described in 
                subparagraph (B).
            ``(5) Revised goals.--Every 4 years, each State shall 
        update and revise, as appropriate, the goals referred to in 
        subsection (a)(1).
    ``(d) Planning.--A plan submitted under subsection (a)(2) shall--
            ``(1) be based upon the models and methodologies 
        established by the Administrator under subsection (b);
            ``(2) use transportation and land use scenario analysis to 
        address transportation-related greenhouse gas emissions and 
        economic development impacts; and
            ``(3) be developed--
                    ``(A) with public involvement, including public 
                comment periods and meetings which provide 
                opportunities for comment from a variety of 
                stakeholders based on age, race, income, and 
                disability;
                    ``(B) with regional coordination, including with 
                respect to--
                            ``(i) metropolitan planning organizations;
                            ``(ii) the localities comprising the 
                        metropolitan planning organization;
                            ``(iii) the State in which the metropolitan 
                        planning organization is located; and
                            ``(iv) air quality, environmental health, 
                        and transportation agencies for the State and 
                        region involved; and
                    ``(C) in consultation with the State and local 
                housing, public health, economic development, land use, 
                environment, and public transportation agencies.
    ``(e) Strategies.--In developing goals under subsection (a)(1) and 
a plan under subsection (a)(2), the State or metropolitan planning 
organization, as applicable, shall consider transportation and land use 
planning strategies to reduce transportation-related greenhouse gas 
emissions, including the following:
            ``(1) Efforts to increase or improve public transportation, 
        including--
                    ``(A) new public transportation systems, including 
                new commuter rail systems;
                    ``(B) expansion of existing public transportation 
                systems;
                    ``(C) employer-based subsidies;
                    ``(D) cleaner locomotive technologies; and
                    ``(E) quality of service improvements, including 
                improved frequency of service.
            ``(2) Updates to zoning and other land use regulations and 
        plans to support development that--
                    ``(A) coordinates transportation and land use 
                planning;
                    ``(B) focuses future growth close to existing and 
                planned job centers and public facilities;
                    ``(C) uses existing infrastructure;
                    ``(D) promotes walking, bicycling, and public 
                transportation use; and
                    ``(E) mixes land uses such as housing, retail, and 
                schools.
            ``(3) Implementation of a policy (referred to as a 
        `complete streets policy') that--
                    ``(A) ensures adequate accommodation of all users 
                of transportation systems, including pedestrians, 
                bicyclists, public transportation users, motorists, 
                children, the elderly, and individuals with 
                disabilities; and
                    ``(B) adequately addresses the safety and 
                convenience of all users of the transportation system.
            ``(4) Construction of bicycle and pedestrian infrastructure 
        facilities, including facilities that improve the connections 
        with networks that provide access to human services, 
        employment, schools, and retail.
            ``(5) Projects to promote telecommuting, flexible work 
        schedules, or satellite work centers.
            ``(6) Pricing measures, including tolling, congestion 
        pricing, and pay-as-you-drive insurance.
            ``(7) Intermodal freight system strategies, including 
        enhanced rail services, short sea shipping, and other 
        strategies.
            ``(8) Parking policies.
            ``(9) Intercity rail service, including high speed rail.
            ``(10) Travel demand management projects.
            ``(11) Restriction of the use of certain roads, or lanes, 
        by vehicles other than passenger buses and high-occupancy 
        vehicles.
            ``(12) Reduction of vehicle idling, including idling 
        associated with freight management, construction, 
        transportation, and commuter operations.
            ``(13) Policies to encourage the use of retrofit 
        technologies and early replacement of vehicles, engines and 
        equipment to reduce transportation-related greenhouse gas 
        emissions from existing mobile sources.
            ``(14) Other projects that the Administrator finds reduce 
        transportation-related greenhouse gas emissions.
    ``(f) Public Availability.--The Administrator shall publish, 
including by posting on the Environmental Protection Agency's website--
            ``(1) the goals and plans submitted under subsection (a); 
        and
            ``(2) for each plan submitted under subsection (a)(2), an 
        analysis of the anticipated effects of the plan on greenhouse 
        gas emissions and oil consumption.
    ``(g) Certification.--The Administrator, in consultation with the 
Secretary, shall certify a State or metropolitan planning organization 
greenhouse gas reduction plan submitted under subsection (a)(2) if the 
plan's implementation is likely to meet the corresponding greenhouse 
gas reduction goal referred to in subsection (a)(1). If the 
Administrator, in consultation with the Secretary, determines that a 
submitted plan cannot be certified, the State or metropolitan planning 
organization shall revise and resubmit the plan within 1 year.
    ``(h) Enforcement.--If the Administrator finds that a State has 
failed to submit goals under subsection (a)(1), has failed to ensure 
the submission of a plan under subsection (a)(2), or has failed to 
submit a revised plan under subsection (g), for any area in the State 
(irrespective of whether the area is a nonattainment area), the 
Administrator shall impose a prohibition in accordance with section 
179(b)(1) applicable to the area within 2 years of such a finding. The 
Administrator may not impose a prohibition under the preceding 
sentence, and no action may be brought by the Administrator or any 
other entity alleging a violation of this section, based on the content 
or adequacy of a goal or plan submitted under subsection (a)(1) or 
(a)(2) or failure to achieve the goal submitted under subsection 
(a)(1).
    ``(i) Competitive Grants.--
            ``(1) Grants.--The Administrator, in consultation with the 
        Secretary, may--
                    ``(A) award grants to support activities related to 
                improving data collection, modeling, and monitoring 
                systems to assess transportation-related greenhouse gas 
                emissions and the effects of plans, policies, and 
                strategies referenced in this section;
                    ``(B) award grants to States and metropolitan 
                planning organizations for the development of goals and 
                plans to be submitted under sections (a)(1) or (a)(2); 
                and
                    ``(C) award grants, on a competitive basis, to 
                implement plans certified under subsection (g) or 
                elements thereof, provided that each project thus 
                funded includes a measurement and evaluation component 
                that meets the regulations promulgated under subsection 
                (b).
            ``(2) Priority.--In making grants under paragraph (1)(C), 
        the Administrator shall give priority to applicants based 
        upon--
                    ``(A) the amount of total greenhouse gas emissions 
                to be reduced as a result of implementation of a 
                certified plan, within the covered area, as determined 
                by methods established under subsection (b);
                    ``(B) the amount of per capita greenhouse gas 
                emissions to be reduced as a result of implementation 
                of a certified plan, within the covered area, as 
                determined by methods established under subsection (b);
                    ``(C) the cost effectiveness, in terms of dollars 
                per tons of greenhouse gas reductions, to be achieved 
                as a result of the implementation of a certified plan;
                    ``(D) the potential for both short- and long-term 
                reductions; and
                    ``(E) such other factors as the Administrator 
                determines appropriate.
            ``(3) Authorization of appropriations.--To carry out this 
        subsection, there are authorized to be appropriated such sums 
        as may be necessary.
    ``(j) Definitions.--In this section:
            ``(1) The term `metropolitan planning organization' means a 
        metropolitan planning organization, as such term is used in 
        section 176.
            ``(2) The term `scenario analysis' means an analysis that 
        is conducted by identifying different trends and making 
        projections based on those trends to develop a range of 
        scenarios and estimates of how each scenario could improve 
        access to goods and services, including access to employment, 
        education, and health care (especially for elderly and 
        economically disadvantaged communities), and could affect rates 
        of--
                    ``(A) vehicle miles traveled;
                    ``(B) vehicle hours traveled;
                    ``(C) use of mobile source fuel by type, including 
                electricity; and
                    ``(D) transportation-related greenhouse gas 
                emissions.
    ``(k) Land Use Authority.--Nothing in this section may be construed 
to--
            ``(1) infringe upon the existing authority of State or 
        local governments to plan or control land use; or
            ``(2) provide or transfer authority over land use to any 
        other entity.''.

SEC. 223. SMARTWAY TRANSPORTATION EFFICIENCY PROGRAM.

    Part B of title VIII of the Clean Air Act, as added by section 221 
of this Act is amended by adding after section 821 the following 
section:

``SEC. 822. SMARTWAY TRANSPORTATION EFFICIENCY PROGRAM.

    ``(a) In General.--There is established within the Environmental 
Protection Agency a SmartWay Transport Program to quantify, 
demonstrate, and promote the benefits of technologies, products, fuels, 
and operational strategies that reduce petroleum consumption, air 
pollution, and greenhouse gas emissions from the mobile source sector.
    ``(b) General Duties.--Under the program established under this 
section, the Administrator shall carry out each of the following:
            ``(1) Development of measurement protocols to evaluate the 
        energy consumption and greenhouse gas impacts from technologies 
        and strategies in the mobile source sector, including those for 
        passenger transport and goods movement.
            ``(2) Development of qualifying thresholds for certifying, 
        verifying, or designating energy-efficient, low-greenhouse gas 
        SmartWay technologies and strategies for each mode of passenger 
        transportation and goods movement.
            ``(3) Development of partnership and recognition programs 
        to promote best practices and drive demand for energy-
        efficient, low-greenhouse gas transportation performance.
            ``(4) Promotion of the availability of, and encouragement 
        of the adoption of, SmartWay certified or verified technologies 
        and strategies, and publication of the availability of 
        financial incentives, such as assistance from loan programs and 
        other Federal and State incentives.
    ``(c) Smartway Transport Freight Partnership.--The Administrator 
shall establish a SmartWay Transport Partnership program with shippers 
and carriers of goods to promote energy-efficient, low-greenhouse gas 
transportation. In carrying out such partnership, the Administrator 
shall undertake each of the following:
            ``(1) Certification of the energy and greenhouse gas 
        performance of participating freight carriers, including those 
        operating rail, trucking, marine, and other goods movement 
        operations.
            ``(2) Publication of a comprehensive energy and greenhouse 
        gas performance index of freight modes (including rail, 
        trucking, marine, and other modes of transporting goods) and 
        individual freight companies so that shippers can choose to 
        deliver their goods more efficiently.
            ``(3) Development of tools for--
                    ``(A) carriers to calculate their energy and 
                greenhouse gas performance; and
                    ``(B) shippers to calculate the energy and 
                greenhouse gas impacts of moving their products and to 
                evaluate the relative impacts from transporting their 
                goods by different modes and corporate carriers.
            ``(4) Provision of recognition opportunities for 
        participating shipper and carrier companies demonstrating 
        advanced practices and achieving superior levels of greenhouse 
        gas performance.
    ``(d) Improving Freight Greenhouse Gas Performance Databases.--The 
Administrator shall, in coordination with other appropriate agencies, 
define and collect data on the physical and operational characteristics 
of the Nation's truck population, with special emphasis on data related 
to energy efficiency and greenhouse gas performance to inform the 
performance index published under subsection (c)(2) of this section, 
and other means of goods transport as necessary, at least every 5 
years.
    ``(e) Establishment of Financing Program.--The Administrator shall 
establish a SmartWay Financing Program to competitively award funding 
to eligible entities identified by the Administrator in accordance with 
the program requirements in subsection (g).
    ``(f) Purpose.--Under the SmartWay Financing Program, eligible 
entities shall--
            ``(1) use funds awarded by the Administrator to provide 
        flexible loan and lease terms that increase approval rates or 
        lower the costs of loans and leases in accordance with guidance 
        developed by the Administrator; and
            ``(2) make such loans and leases available to public and 
        private entities for the purpose of adopting low-greenhouse gas 
        technologies or strategies for the mobile source sector that 
        are designated by the Administrator.
    ``(g) Program Requirements.--The Administrator shall determine 
program design elements and requirements, including--
            ``(1) the type of financial mechanism with which to award 
        funding, in the form of grants or contracts;
            ``(2) the designation of eligible entities to receive 
        funding, including State, tribal, and local governments, 
        regional organizations comprised of governmental units, 
        nonprofit organizations, or for-profit companies;
            ``(3) criteria for evaluating applications from eligible 
        entities, including anticipated--
                    ``(A) cost-effectiveness of loan or lease program 
                on a metric-ton-of-greenhouse gas-saved-per-dollar 
                basis;
                    ``(B) ability to promote the loan or lease program 
                and associated technologies and strategies to the 
                target audience; and
            ``(4) reporting requirements for entities that receive 
        awards, including--
                    ``(A) actual cost-effectiveness and greenhouse gas 
                savings from the loan or lease program based on a 
                methodology designated by the Administrator;
                    ``(B) the total number of applications and number 
                of approved applications; and
                    ``(C) terms granted to loan and lease recipients 
                compared to prevailing market practices.
    ``(h) Authorization of Appropriations.--Such sums as necessary are 
authorized to be appropriated to the Administrator to carry out this 
section.''.

SEC. 224. STATE VEHICLE FLEETS.

    Section 507(o) of the Energy Policy Act of 1992 (42 U.S.C. 13257) 
is amended by adding the following new paragraph at the end thereof:
    ``(3) The Secretary shall revise the rules under this subsection 
with respect to the types of alternative fueled vehicles required for 
compliance with this subsection to ensure those rules are consistent 
with any guidance issued pursuant to section 303 of this Act.''.

           Subtitle D--Industrial Energy Efficiency Programs

SEC. 241. INDUSTRIAL PLANT ENERGY EFFICIENCY STANDARDS.

    The Secretary of Energy shall continue to support the development 
of the American National Standards Institute (ANSI) voluntary 
industrial plant energy efficiency certification program, pending 
International Standards Organization (ISO) consensus standard 50001, 
and other related ANSI/ISO standards. In addition, the Department shall 
undertake complementary activities through the Department of Energy's 
Industry Technologies Program that support the voluntary implementation 
of such standards by manufacturing firms. There are authorized to be 
appropriated to the Secretary such sums as are necessary to carry out 
these activities. The Secretary shall report to Congress on the status 
of standards development and plans for further standards development 
pursuant to this Section by not later than 18 months after the date of 
enactment of this Act, and shall prepare a second such report 18 months 
thereafter.

SEC. 242. ELECTRIC AND THERMAL WASTE ENERGY RECOVERY AWARD PROGRAM.

    (a) Electric and Thermal Waste Energy Recovery Awards.--The 
Secretary of Energy shall establish a program to make monetary awards 
to the owners and operators of new and existing electric energy 
generation facilities or thermal energy production facilities using 
fossil or nuclear fuel, to encourage them to use innovative means of 
recovering any thermal energy that is a potentially useful byproduct of 
electric power generation or other processes to--
            (1) generate additional electric energy; or
            (2) make sales of thermal energy not used for electric 
        generation, in the form of steam, hot water, chilled water, or 
        desiccant regeneration, or for other commercially valid 
        purposes.
    (b) Amount of Awards.--
            (1) Eligibility.--Awards shall be made under subsection (a) 
        only for the use of innovative means that achieve net energy 
        efficiency at the facility concerned significantly greater than 
        the current standard technology in use at similar facilities.
            (2) Amount.--The amount of an award made under subsection 
        (a) shall equal an amount up to the value of 25 percent of the 
        energy projected to be recovered or generated during the first 
        5 years of operation of the facility using the innovative 
        energy recovery method, or such lesser amount that the 
        Secretary determines to be the minimum amount that can cost-
        effectively stimulate such innovation.
            (3) Limitation.--No person may receive an award under this 
        section if a grant under the waste energy incentive grant 
        program under section 373 of the Energy Policy and Conservation 
        Act (42 U.S.C. 6343) is made for the same energy savings 
        resulting from the same innovative method.
    (c) Regulatory Status.--The Secretary of Energy shall--
            (1) assist State regulatory commissions to identify and 
        make changes in State regulatory programs for electric 
        utilities to provide appropriate regulatory status for thermal 
        energy byproduct businesses of regulated electric utilities to 
        encourage those utilities to enter businesses making the sales 
        referred to in subsection (a)(2); and
            (2) encourage self-regulated utilities to enter businesses 
        making the sales referred to in subsection (a)(2).
    (d) Eligibility for Seed Loans.--Owners and operators of electric 
energy generation and thermal energy production facilities shall be 
eligible for SEED Fund loans under subtitle D of title I to provide 
initial capital for entering into businesses involving sales referred 
to in subsection (a)(2).
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy such sums as are necessary for 
the purposes of this section.

SEC. 243. CLARIFYING ELECTION OF WASTE HEAT RECOVERY FINANCIAL 
              INCENTIVES.

    Section 373(e) of the Energy Policy and Conservation Act (42 U.S.C. 
6343(e)) is amended--
            (1) by striking ``that qualifies for'' and inserting ``who 
        elects to claim''; and
            (2) by inserting ``from that project'' after ``for waste 
        heat recovery''.

   Subtitle E--Improvements in Energy Savings Performance Contracting

SEC. 251. ENERGY SAVINGS PERFORMANCE CONTRACTS.

    (a) Competition Requirements for Task or Delivery Orders Under 
Energy Savings Performance Contracts.--
            (1) Competition requirements.--Subsection (a) of section 
        801 of the National Energy Conservation Policy Act (42 U.S.C. 
        8287(a)) is amended by adding at the end the following 
        paragraph:
            ``(3)(A) The head of a Federal agency may issue a task or 
        delivery order under an energy savings performance contract 
        by--
                    ``(i) notifying all contractors that have received 
                an award under such contract that the agency proposes 
                to discuss energy savings performance services for some 
                or all of its facilities, soliciting an expression of 
                interest in performing site surveys or investigations 
                and feasibility designs and studies and the submission 
                of qualifications from such contractors, and including 
                in such notice summary information concerning energy 
                use for any facilities that the agency has specific 
                interest in including in such contract;
                    ``(ii) reviewing all expressions of interest and 
                qualifications submitted pursuant to the notice under 
                clause (i);
                    ``(iii) selecting two or more contractors (from 
                among those reviewed under clause (ii)) to conduct 
                discussions concerning the contractors' respective 
                qualifications to implement potential energy 
                conservation measures, including requesting references 
                demonstrating experience on similar efforts and the 
                resulting energy savings of such similar efforts;
                    ``(iv) selecting and authorizing--
                            ``(I) more than one contractor (from among 
                        those selected under clause (iii)) to conduct 
                        site surveys, investigations, feasibility 
                        designs and studies or similar assessments for 
                        the energy savings performance contract 
                        services (or for discrete portions of such 
                        services), for the purpose of allowing each 
                        such contractor to submit a firm, fixed-price 
                        proposal to implement specific energy 
                        conservation measures; or
                            ``(II) one contractor (from among those 
                        selected under clause (iii)) to conduct a site 
                        survey, investigation, a feasibility design and 
                        study or similar for the purpose of allowing 
                        the contractor to submit a firm, fixed-price 
                        proposal to implement specific energy 
                        conservation measures;
                    ``(v) negotiating a task or delivery order for 
                energy savings performance contracting services with 
                the contractor or contractors selected under clause 
                (iv) based on the energy conservation measures 
                identified.; and
                    ``(vi) issuing a task or delivery order for energy 
                savings performance contracting services to such 
                contractor or contractors.
            ``(B) The issuance of a task or delivery order for energy 
        savings performance contracting services pursuant to 
        subparagraph (A) is deemed to satisfy the task and delivery 
        order competition requirements in section 2304c(d) of title 10, 
        United States Code, and section 303J(d) of the Federal Property 
        and Administrative Services Act of 1949 (41 U.S.C. 253j(d)).
            ``(C) The Secretary may issue guidance as necessary to 
        agencies issuing task or delivery orders pursuant to 
        subparagraph (A).''.
            (2) Effective date.--The amendment made by paragraph (1) is 
        inapplicable to task or delivery orders issued before the date 
        of enactment of this section.
    (b) Inclusion of Thermal Renewable Energy.--Section 203 of the 
Energy Policy Act of 2005 (42 U.S.C. 15852) is amended--
            (1) in subsection (a), by striking ``electric''; and
            (2) in subsection (b)(2), by inserting ``or thermal'' after 
        ``means electric''.
    (c)  Credit for Renewable Energy Produced and Used on Site.--
Subsection (c) of section 203 of the Energy Policy Act of 2005 (42 
U.S.C. 15852) is amended to read as follows:
    ``(c) Calculation.--Renewable energy produced at a Federal 
facility, on Federal lands, or on Indian lands (as defined in title 
XXVI of the Energy Policy Act of 1992 (25 U.S.C. 3501 et seq.)), shall 
be calculated separately from renewable energy consumed at a Federal 
facility, and each may be used to comply with the consumption 
requirement under subsection (a).''.
    (d) Financing Flexibility.--Section 801(a)(2)(F) of the National 
Energy Conservation Policy Act (42 U.S.C. 8287(a)(2)(F)), as so 
redesignated by subsection (b)(1) of this section, is amended by 
striking ``In'' and inserting ``Notwithstanding any other provision of 
law, in''.

                    Subtitle F--Public Institutions

SEC. 261. PUBLIC INSTITUTIONS.

    Section 399A of the Energy Policy and Conservation Act (42 U.S.C. 
6371h-1) is amended--
            (1) in subsection (a)(5), by striking ``or a designee'' and 
        inserting ``a not-for-profit hospital or not-for-profit 
        inpatient health care facility, or a designated agent'';
            (2) in subsection (c)(1), by striking subparagraph (C);
            (3) in subsection (f)(3)(A), by striking ``$1,000,000'' and 
        inserting ``$2,500,000''; and
            (4) in subsection (i)(1), by striking ``$250,000,000 for 
        each of fiscal years 2009 through 2013'' and inserting ``such 
        sums as may be necessary for each of fiscal years 2010 through 
        2015''.

SEC. 262. COMMUNITY ENERGY EFFICIENCY FLEXIBILITY.

    Section 545(b)(3) of the Energy Independence and Security Act of 
2007 (42 U.S.C. 17155(b)(3)) is amended--
            (1) by striking ``Indian tribe may use'' and all that 
        follows through ``for administrative expenses'' and inserting 
        ``Indian tribe may use for administrative expenses'';
            (2) by striking subparagraphs (B) and (C);
            (3) by redesignating the remaining clauses (i) and (ii) as 
        subparagraphs (A) and (B), respectively and adjusting the 
        margin of those subparagraphs accordingly; and
            (4) by striking the semicolon at the end and inserting a 
        period.

SEC. 263. SMALL COMMUNITY JOINT PARTICIPATION.

    (a) Section 541(3)(A) of the Energy Independence and Security Act 
of 2007 is amended in clause (i) by changing the word ``and'' to ``or'' 
at the end of subclause (II), in subclause (ii)(II) by striking the 
period at the end of and inserting a semicolon and the word ``or'', and 
by inserting the following new clause (iii):
                            ``(iii) a group of adjacent, contiguous, or 
                        geographically proximate units of local 
                        government that reach agreement to act jointly 
                        for purposes of this section and that represent 
                        a combined population of not less than 
                        35,000.''.
    (b) Section 541(3)(B) of the Energy Independence and Security Act 
of 2007 is amended in subclause (ii)(II) by striking the period at the 
end of and inserting a semicolon and the word ``or'', and by inserting 
the following new clause (iii):
                            ``(iii) a group of adjacent, contiguous, or 
                        geographically proximate units of local 
                        government that reach agreement to act jointly 
                        for purposes of this section and that represent 
                        a combined population of not less than 
                        50,000.''.

SEC. 264. LOW INCOME COMMUNITY ENERGY EFFICIENCY PROGRAM.

    (a) In General.--The Secretary of Energy is authorized to make 
grants to private, non-profit, mission-driven community development 
organizations including community development corporations and 
community development financial institutions to provide financing to 
businesses and projects that improve energy efficiency; identify and 
develop alternative, renewable, and distributed energy supplies; 
provide technical assistance and promote job and business opportunities 
for low-income residents; and increase energy conservation in low 
income rural and urban communities.
    (b) Grants.--The purpose of such grants is to increase the flow of 
capital and benefits to low income communities, minority-owned and 
woman-owned businesses and entrepreneurs and other projects and 
activities located in low income communities in order to reduce 
environmental degradation, foster energy conservation and efficiency 
and create job and business opportunities for local residents. The 
Secretary may make grants on a competitive basis for--
            (1) investments that develop alternative, renewable, and 
        distributed energy supplies;
            (2) capitalizing loan funds that lend to energy efficiency 
        projects and energy conservation programs;
            (3) technical assistance to plan, develop and manage an 
        energy efficiency financing program; and
            (4) technical and financial assistance to assist small-
        scale businesses and private entities develop new renewable and 
        distributed sources of power or combined heat and power 
        generation.
    (c) Authorization of Appropriations.--For the purposes of this 
section there is authorized to be appropriated $50,000,000 for each of 
the fiscal years 2010 through 2015.

              TITLE III--REDUCING GLOBAL WARMING POLLUTION

SEC. 301. SHORT TITLE.

    This title, and sections 112, 116, 121, 221, 222, and 223 of this 
Act, may be cited as the ``Safe Climate Act''.

             Subtitle A--Reducing Global Warming Pollution

SEC. 311. REDUCING GLOBAL WARMING POLLUTION.

    The Clean Air Act (42 U.S.C. and following) is amended by adding 
after title VI the following new title:

        ``TITLE VII--GLOBAL WARMING POLLUTION REDUCTION PROGRAM

     ``PART A--GLOBAL WARMING POLLUTION REDUCTION GOALS AND TARGETS

``SEC. 701. FINDINGS AND PURPOSE.

    ``(a) Findings.--The Congress finds as follows:
            ``(1) Global warming poses a significant threat to the 
        national security, economy, public health and welfare, and 
        environment of the United States, as well as of other nations.
            ``(2) Reviews of scientific studies, including by the 
        Intergovernmental Panel on Climate Change and the National 
        Academy of Sciences, demonstrate that global warming is the 
        result of the combined anthropogenic greenhouse gas emissions 
        from numerous sources of all types and sizes. Each increment of 
        emission, when combined with other emissions, causes or 
        contributes materially to the acceleration and extent of global 
        warming and its adverse effects for the lifetime of such gas in 
        the atmosphere. Accordingly, controlling emissions in small as 
        well as large amounts is essential to prevent, slow the pace 
        of, reduce the threats from, and mitigate global warming and 
        its adverse effects.
            ``(3) Because they induce global warming, greenhouse gas 
        emissions cause or contribute to injuries to persons in the 
        United States, including--
                    ``(A) adverse health effects such as disease and 
                loss of life;
                    ``(B) displacement of human populations;
                    ``(C) damage to property and other interests 
                related to ocean levels, acidification, and ice 
                changes;
                    ``(D) severe weather and seasonal changes;
                    ``(E) disruption, costs, and losses to business, 
                trade, employment, farms, subsistence, aesthetic 
                enjoyment of the environment, recreation, culture, and 
                tourism;
                    ``(F) damage to plants, forests, lands, and waters;
                    ``(G) harm to wildlife and habitat;
                    ``(H) scarcity of water and the decreased abundance 
                of other natural resources;
                    ``(I) worsening of tropospheric air pollution;
                    ``(J) substantial threats of similar damage; and
                    ``(K) other harm.
            ``(4) That many of these effects and risks of future 
        effects of global warming are widely shared does not minimize 
        the adverse effects individual persons have suffered, will 
        suffer, and are at risk of suffering because of global warming.
            ``(5) That some of the adverse and potentially catastrophic 
        effects of global warming are at risk of occurring and not a 
        certainty does not negate the harm persons suffer from actions 
        that increase the likelihood, extent, and severity of such 
        future impacts.
            ``(6) Nations of the world look to the United States for 
        leadership in addressing the threat of and harm from global 
        warming. Full implementation of the Safe Climate Act is 
        critical to engage other nations in an international effort to 
        mitigate the threat of and harm from global warming.
            ``(7) Global warming and its adverse effects are occurring 
        and are likely to continue and increase in magnitude, and to do 
        so at a greater and more harmful rate, unless the Safe Climate 
        Act is fully implemented and enforced in an expeditious manner.
    ``(b) Purpose.--It is the general purpose of the Safe Climate Act 
to help prevent, reduce the pace of, mitigate, and remedy global 
warming and its adverse effects. To fulfill such purpose, it is 
necessary to--
            ``(1) require the timely fulfillment of all governmental 
        acts and duties, both substantive and procedural, and the 
        prompt compliance of covered entities with the requirements of 
        the Safe Climate Act;
            ``(2) establish and maintain an effective, transparent, and 
        fair market for emission allowances and preserve the integrity 
        of the cap on emissions and of offset credits;
            ``(3) advance the production and deployment of clean energy 
        and energy efficiency technologies; and
            ``(4) ensure effective enforcement of the Safe Climate Act 
        by citizens, States, Indian tribes, and all levels of 
        government because each violation of the Safe Climate Act is 
        likely to result in an additional increment of greenhouse gas 
        emission and will slow the pace of implementation of the Safe 
        Climate Act and delay the achievement of the goals set forth in 
        section 702, and cause or contribute to global warming and its 
        adverse effects.

``SEC. 702. ECONOMY-WIDE REDUCTION GOALS.

    ``The goals of the Safe Climate Act are to reduce steadily the 
quantity of United States greenhouse gas emissions such that--
            ``(1) in 2012, the quantity of United States greenhouse gas 
        emissions does not exceed 97 percent of the quantity of United 
        States greenhouse gas emissions in 2005;
            ``(2) in 2020, the quantity of United States greenhouse gas 
        emissions does not exceed 80 percent of the quantity of United 
        States greenhouse gas emissions in 2005;
            ``(3) in 2030, the quantity of United States greenhouse gas 
        emissions does not exceed 58 percent of the quantity of United 
        States greenhouse gas emissions in 2005; and
            ``(4) in 2050, the quantity of United States greenhouse gas 
        emissions does not exceed 17 percent of the quantity of United 
        States greenhouse gas emissions in 2005.

``SEC. 703. REDUCTION TARGETS FOR SPECIFIED SOURCES.

    ``(a) In General.--The regulations issued under section 721 shall 
cap and reduce annually the greenhouse gas emissions of capped sources 
each calendar year beginning in 2012 such that--
            ``(1) in 2012, the quantity of greenhouse gas emissions 
        from capped sources does not exceed 97 percent of the quantity 
        of greenhouse gas emissions from such sources in 2005;
            ``(2) in 2020, the quantity of greenhouse gas emissions 
        from capped sources does not exceed 83 percent of the quantity 
        of greenhouse gas emissions from such sources in 2005;
            ``(3) in 2030, the quantity of greenhouse gas emissions 
        from capped sources does not exceed 58 percent of the quantity 
        of greenhouse gas emissions from such sources in 2005; and
            ``(4) in 2050, the quantity of greenhouse gas emissions 
        from capped sources does not exceed 17 percent of the quantity 
        of greenhouse gas emissions from such sources in 2005.
    ``(b) Definition.--For purposes of this section, the term 
`greenhouse gas emissions from such sources in 2005' means emissions to 
which section 722 would have applied if the requirements of this title 
for the specified year had been in effect for 2005.

``SEC. 704. SUPPLEMENTAL POLLUTION REDUCTIONS.

    ``For the purposes of decreasing the likelihood of catastrophic 
climate change, preserving tropical forests, building capacity to 
generate offset credits, and facilitating international action on 
global warming, the Administrator shall set aside the percentage 
specified in section 781 of the quantity of emission allowances 
established under section 721(a) for each year, to be used to achieve a 
reduction of greenhouse gas emissions from deforestation in developing 
countries in accordance with part E. In 2020, activities supported 
under part E shall provide greenhouse gas reductions in an amount equal 
to an additional 10 percentage points of reductions from United States 
greenhouse gas emissions in 2005. The Administrator shall transfer 
these allowances with respect to activities in countries that enter 
into and implement agreements or arrangements relating to reduced 
deforestation as described in section 754(a)(2).

``SEC. 705. REVIEW AND PROGRAM RECOMMENDATIONS.

    ``(a) In General.--The Administrator shall, in consultation with 
appropriate Federal agencies, submit to Congress a report not later 
than July 1, 2013, and every 4 years thereafter, that includes--
            ``(1) an analysis of key findings based on the latest 
        scientific information and data relevant to global climate 
        change;
            ``(2) an analysis of capabilities to monitor and verify 
        greenhouse gas reductions on a worldwide basis, including for 
        the United States, as required under the Safe Climate Act; and
            ``(3) an analysis of the status of worldwide greenhouse gas 
        reduction efforts, including implementation of the Safe Climate 
        Act and other policies, both domestic and international, for 
        reducing greenhouse gas emissions, preventing dangerous 
        atmospheric concentrations of greenhouse gases, preventing 
        significant irreversible consequences of climate change, and 
        reducing vulnerability to the impacts of climate change.
    ``(b) Exception.--Paragraph (3) of subsection (a) shall not apply 
to the first report submitted under such subsection.
    ``(c) Latest Scientific Information.--The analysis required under 
subsection (a)(1) shall--
            ``(1) address existing scientific information and reports, 
        considering, to the greatest extent possible, the most recent 
        assessment report of the Intergovernmental Panel on Climate 
        Change, reports by the United States Global Change Research 
        Program and Federal agencies, and the European Union's global 
        temperature data assessment; and
            ``(2) review trends and projections for--
                    ``(A) global and country-specific annual emissions 
                of greenhouse gases, and cumulative emissions produced 
                between 1850 and the present, including--
                            ``(i) global cumulative emissions of 
                        anthropogenic greenhouse gases;
                            ``(ii) global annual emissions of 
                        anthropogenic greenhouse gases; and
                            ``(iii) by country, annual total, annual 
                        per capita, and cumulative anthropogenic 
                        emissions of greenhouse gases for the top 50 
                        emitting nations;
                    ``(B) significant changes, both globally and by 
                region, in annual net non-anthropogenic greenhouse gas 
                from natural sources, including permafrost, forests, or 
                oceans;
                    ``(C) global atmospheric concentrations of 
                greenhouse gases, expressed in annual concentration 
                units as well as carbon dioxide equivalents based on 
                100-year global warming potentials;
                    ``(D) major climate forcing factors, such as 
                aerosols;
                    ``(E) global average temperature, expressed as 
                seasonal and annual averages in land, ocean, and land-
                plus-ocean averages; and
                    ``(F) sea level rise;
            ``(3) assess the current and potential impacts of global 
        climate change on--
                    ``(A) human populations, including impacts on 
                public health, economic livelihoods, subsistence, human 
                infrastructure, and displacement or permanent 
                relocation due to flooding, severe weather, extended 
                drought, erosion, or other ecosystem changes;
                    ``(B) freshwater systems, including water resources 
                for human consumption and agriculture and natural and 
                managed ecosystems, flood and drought risks, and 
                relative humidity;
                    ``(C) the carbon cycle, including impacts related 
                to the thawing of permafrost, the frequency and 
                intensity of wildfire, and terrestrial and ocean carbon 
                sinks;
                    ``(D) ecosystems and animal and plant populations, 
                including impacts on species abundance, phenology, and 
                distribution;
                    ``(E) oceans and ocean ecosystems, including 
                effects on sea level, ocean acidity, ocean 
                temperatures, coral reefs, ocean circulation, 
                fisheries, and other indicators of ocean ecosystem 
                health;
                    ``(F) the cryosphere, including effects on ice 
                sheet mass balance, mountain glacier mass balance, and 
                sea-ice extent and volume;
                    ``(G) changes in the intensity, frequency, or 
                distribution of severe weather events, including 
                precipitation, tropical cyclones, tornadoes and severe 
                heat waves;
                    ``(H) agriculture and forest systems, including 
                effects on growing season, distribution, and yield; and
                    ``(I) any other indicators the Administrator deems 
                appropriate;
            ``(4) summarize any significant socio-economic impacts of 
        climate change in the United States, including the territories 
        of the United States, drawing on work by Federal agencies and 
        the academic literature, including impacts on--
                    ``(A) public health;
                    ``(B) human infrastructure, including coastal 
                infrastructure vulnerability to extreme events and sea 
                level rise, river floodplain infrastructure, and sewer 
                and water management systems;
                    ``(C) agriculture and forests, including effects on 
                potential growing season, distribution, and yield;
                    ``(D) water resources for human consumption, 
                agriculture and natural and managed ecosystems, flood 
                and drought risks and relative humidity;
                    ``(E) energy supply and use; and
                    ``(F) transportation;
            ``(5) in assessing risks and impacts, use a risk management 
        framework, including both qualitative and quantitative 
        measures, to assess the observed and projected impacts of 
        current and future climate change, accounting for--
                    ``(A) both monetized and non-monetized losses;
                    ``(B) potential nonlinear, abrupt, or essentially 
                irreversible changes in the climate system;
                    ``(C) potential nonlinear increases in the cost of 
                impacts;
                    ``(D) potential low-probability, high impact 
                events; and
                    ``(E) whether impacts are transitory or essentially 
                permanent;
            ``(6) based on the findings of the Administrator under this 
        section, as well as assessments produced by the 
        Intergovernmental Panel on Climate Change, the United States 
        Global Change Research program, and other relevant scientific 
        entities--
                    ``(A) describe increased risks to natural systems 
                and society that would result from an increase in 
                global average temperature 3.6 degrees Fahrenheit (2 
                degrees Celsius) above the pre-industrial average or an 
                increase in atmospheric greenhouse gas concentrations 
                above 450 parts per million carbon dioxide equivalent; 
                and
                    ``(B) identify and assess--
                            ``(i) significant residual risks not 
                        avoided by the thresholds described in 
                        subparagraph (A);
                            ``(ii) alternative thresholds or targets 
                        that may more effectively limit the risks 
                        identified pursuant to clause (i); and
                            ``(iii) thresholds in addition to those 
                        described in subparagraph (A) which 
                        significantly increase the risk of certain 
                        impacts or render them essentially permanent.
    ``(d) Status of Monitoring and Verification Capabilities To 
Evaluate Greenhouse Gas Reduction Efforts.--The analysis required under 
subsection (a)(2) shall evaluate the capabilities of the monitoring, 
reporting, and verification systems used to quantify progress in 
achieving reductions in greenhouse gas emissions by the United States 
as described in section 702, including--
            ``(1) quantification of emissions and emission reductions 
        by entities participating in the cap and trade program under 
        this title;
            ``(2) quantification of emissions and emission reductions 
        by entities participating in the offset program under this 
        title;
            ``(3) quantification of emission and emissions reductions 
        by entities regulated by performance standards;
            ``(4) quantification of aggregate net emissions and 
        emissions reductions by the United States; and
            ``(5) quantification of global changes in net emissions and 
        in sources and sinks of greenhouse gases.
    ``(e) Status of Greenhouse Gas Reduction Efforts.--The analysis 
required under subsection (a)(3) shall address--
            ``(1) whether the programs under Safe Climate Act and other 
        Federal statutes are resulting in sufficient United States 
        greenhouse gas emissions reductions to meet the emissions 
        reduction targets described in section 702, taking into account 
        the use of offsets; and
            ``(2) whether United States actions, taking into account 
        international actions, commitments, and trends, and considering 
        the range of plausible emissions scenarios, are sufficient to 
        avoid--
                    ``(A) atmospheric greenhouse gas concentrations 
                above 450 parts per million carbon dioxide equivalent;
                    ``(B) global average surface temperature 3.6 
                degrees Fahrenheit (2 degrees Celsius) above the pre-
                industrial average, or such other temperature 
                thresholds as the Administrator deems appropriate; and
                    ``(C) other temperature or greenhouse gas 
                thresholds identified pursuant to subsection (c)(6)(B).
    ``(f) Recommendations.--
            ``(1) Latest scientific information.--Based on the analysis 
        described in subsection (a)(1), each report under subsection 
        (a) shall identify actions that could be taken to--
                    ``(A) improve the characterization of changes in 
                the earth-climate system and impacts of global climate 
                change;
                    ``(B) better inform decision making and actions 
                related to global climate change;
                    ``(C) mitigate risks to natural and social systems; 
                and
                    ``(D) design policies to better account for climate 
                risks.
            ``(2) Monitoring, reporting and verification.--Based on the 
        analysis described in subsection (a)(2), each report under 
        subsection (a) shall identify key gaps in measurement, 
        reporting, and verification capabilities and make 
        recommendations to improve the accuracy and reliability of 
        those capabilities.
            ``(3) Status of greenhouse gas reduction efforts.--Based on 
        the analysis described in subsection (a)(3), taking into 
        account international actions, commitments, and trends, and 
        considering the range of plausible emissions scenarios, each 
        report under subsection (a) shall identify--
                    ``(A) the quantity of additional reductions 
                required to meet the emissions reduction targets in 
                section 702;
                    ``(B) the quantity of additional reductions in 
                global greenhouse gas emissions needed to avoid the 
                identified concentration and temperature thresholds 
                described in subsection (e); and
                    ``(C) possible strategies and approaches for 
                achieving additional reductions.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary.

``SEC. 706. NATIONAL ACADEMY REVIEW.

    ``(a) In General.--Not later than 1 year after the date of 
enactment of this title, the Administrator shall offer to enter into a 
contract with the National Academy of Sciences (in this section 
referred to as the `Academy') under which the Academy shall, not later 
than July 1, 2014, and every 4 years thereafter, submit to Congress and 
the Administrator a report that includes--
            ``(1) a review of the most recent report and 
        recommendations issued under section 705; and
            ``(2) an analysis of technologies to achieve reductions in 
        greenhouse gas emissions.
    ``(b) Failure to Issue a Report.--In the event that the 
Administrator has not issued all or part of the most recent report 
required under section 705, the Academy shall conduct its own review 
and analysis of the required information.
    ``(c) Technological Information.--The analysis required under 
subsection (a)(2) shall--
            ``(1) review existing technological information and 
        reports, including the most recent reports by the Department of 
        Energy, the United States Global Change Research Program, the 
        Intergovernmental Panel on Climate Change, and the 
        International Energy Agency and any other relevant information 
        on technologies or practices that reduce or limit greenhouse 
        gas emissions;
            ``(2) include the participation of technical experts from 
        relevant private industry sectors;
            ``(3) review the current and future projected deployment of 
        technologies and practices in the United States that reduce or 
        limit greenhouse gas emissions, including--
                    ``(A) technologies for capture and sequestration of 
                greenhouse gases;
                    ``(B) technologies to improve energy efficiency;
                    ``(C) low- or zero-greenhouse gas emitting energy 
                technologies;
                    ``(D) low- or zero-greenhouse gas emitting fuels;
                    ``(E) biological sequestration practices and 
                technologies; and
                    ``(F) any other technologies the Academy deems 
                relevant; and
            ``(4) review and compare the emissions reduction potential, 
        commercial viability, market penetration, investment trends, 
        and deployment of the technologies described in paragraph (3), 
        including--
                    ``(A) the need for additional research and 
                development, including publicly funded research and 
                development;
                    ``(B) the extent of commercial deployment, 
                including, where appropriate, a comparison to the cost 
                and level of deployment of conventional fossil fuel-
                fired energy technologies and devices; and
                    ``(C) an evaluation of any substantial 
                technological, legal, or market-based barriers to 
                commercial deployment.
    ``(d) Recommendations.--
            ``(1) Latest scientific information.--Based on the review 
        described in subsection (a)(1), the Academy shall identify 
        actions that could be taken to--
                    ``(A) improve the characterization of changes in 
                the earth-climate system and impacts of global climate 
                change;
                    ``(B) better inform decision making and actions 
                related to global climate change;
                    ``(C) mitigate risks to natural and social systems;
                    ``(D) design policies to better account for climate 
                risks; and
                    ``(E) improve the accuracy and reliability of 
                capabilities to monitor, report and verify greenhouse 
                gas emissions reduction efforts.
            ``(2) Technological information.--Based on the analysis 
        described in subsection (a)(2), the Academy shall identify--
                    ``(A) additional emissions reductions that may be 
                possible as a result of technologies described in the 
                analysis;
                    ``(B) barriers to the deployment of such 
                technologies; and
                    ``(C) actions that could be taken to speed 
                deployment of such technologies.
            ``(3) Status of greenhouse gas reduction efforts.--Based on 
        the review described in subsection (a)(1), the Academy shall 
        identify--
                    ``(A) the quantity of additional reductions 
                required to meet the emissions reduction targets 
                described in section 702; and
                    ``(B) the quantity of additional reductions in 
                global greenhouse gas emissions needed to avoid the 
                concentration and temperature thresholds described in 
                section 705(c)(6)(A) or identified pursuant to section 
                705(c)(6)(B).
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary.

``SEC. 707. PRESIDENTIAL RESPONSE AND RECOMMENDATIONS.

    ``Not later than July 1, 2017, and every 4 years thereafter--
            ``(1) the President shall direct relevant Federal agencies 
        to use existing statutory authority to take appropriate actions 
        identified in the report submitted under section 705 by the 
        National Academy of Sciences in the previous year and to 
        address any shortfalls identified in such report; and
            ``(2) in the event that the National Academy of Sciences 
        has concluded, in the most recent report submitted under 
        section 705, that the United States will not achieve the 
        necessary domestic greenhouse gas emissions reductions, or that 
        global actions will not maintain safe global average surface 
        temperature and atmospheric greenhouse gas concentration 
        thresholds, the President shall submit to Congress a plan 
        identifying domestic and international actions that will 
        achieve necessary additional greenhouse gas reductions, 
        including any recommendations for legislative action.

       ``PART B--DESIGNATION AND REGISTRATION OF GREENHOUSE GASES

``SEC. 711. DESIGNATION OF GREENHOUSE GASES.

    ``(a) Greenhouse Gases.--For purposes of this title, the following 
are greenhouse gases:
            ``(1) Carbon dioxide.
            ``(2) Methane.
            ``(3) Nitrous oxide.
            ``(4) Sulfur hexafluoride.
            ``(5) Hydrofluorocarbons from a chemical manufacturing 
        process at an industrial stationary source.
            ``(6) Any perfluorocarbon.
            ``(7) Nitrogen trifluoride.
            ``(8) Any other anthropogenic gas designated as a 
        greenhouse gas by the Administrator under this section.
    ``(b) Determination on Administrator's Initiative.--The 
Administrator shall, by rule--
            ``(1) determine whether 1 metric ton of another 
        anthropogenic gas makes the same or greater contribution to 
        global warming over 100 years as 1 metric ton of carbon 
        dioxide;
            ``(2) determine the carbon dioxide equivalent value for 
        each gas with respect to which the Administrator makes an 
        affirmative determination under paragraph (1);
            ``(3) for each gas with respect to which the Administrator 
        makes an affirmative determination under paragraph (1) and that 
        is used as a substitute for a class I or class II substance 
        under title VI, determine the extent to which to regulate that 
        gas under section 619 and specify appropriate compliance 
        obligations under section 619;
            ``(4) designate as a greenhouse gas for purposes of this 
        title each gas for which the Administrator makes an affirmative 
        determination under paragraph (1), to the extent that it is not 
        regulated under section 619; and
            ``(5) specify the appropriate compliance obligations under 
        this title for each gas designated as a greenhouse gas under 
        paragraph (4).
    ``(c) Petitions to Designate a Greenhouse Gas.--
            ``(1) In general.--Any person may petition the 
        Administrator to designate as a greenhouse gas any 
        anthropogenic gas 1 metric ton of which makes the same or 
        greater contribution to global warming over 100 years as 1 
        metric ton of carbon dioxide.
            ``(2) Contents of petition.--The petitioner shall provide 
        sufficient data, as specified by rule by the Administrator, to 
        demonstrate that the gas is likely to be a greenhouse gas and 
        is likely to be produced, imported, used, or emitted in the 
        United States. To the extent practicable, the petitioner shall 
        also identify producers, importers, distributors, users, and 
        emitters of the gas in the United States.
            ``(3) Review and action by the administrator.--Not later 
        than 90 days after receipt of a petition under paragraph (2), 
        the Administrator shall determine whether the petition is 
        complete and notify the petitioner and the public of the 
        decision.
            ``(4) Additional information.--The Administrator may 
        require producers, importers, distributors, users, or emitters 
        of the gas to provide information on the contribution of the 
        gas to global warming over 100 years compared to carbon 
        dioxide.
            ``(5) Treatment of petition.--For any substance used as a 
        substitute for a class I or class II substance under title VI, 
        the Administrator may elect to treat a petition under this 
        subsection as a petition to list the substance as a class II, 
        group II substance under section 619, and may require the 
        petition to be amended to address listing criteria promulgated 
        under that section.
            ``(6) Determination.--Not later than 2 years after receipt 
        of a complete petition, the Administrator shall, after notice 
        and an opportunity for comment--
                    ``(A) issue and publish in the Federal Register--
                            ``(i) a determination that 1 metric ton of 
                        the gas does not make a contribution to global 
                        warming over 100 years that is equal to or 
                        greater than that made by 1 metric ton of 
                        carbon dioxide; and
                            ``(ii) an explanation of the decision; or
                    ``(B) determine that 1 metric ton of the gas makes 
                a contribution to global warming over 100 years that is 
                equal to or greater than that made by 1 metric ton of 
                carbon dioxide, and take the actions described in 
                subsection (b) with respect to such gas.
            ``(7) Grounds for denial.--The Administrator may not deny a 
        petition under this subsection solely on the basis of 
        inadequate Environmental Protection Agency resources or time 
        for review.
    ``(d) Manufacturing and Emission Notices.--
            ``(1) Notice requirement.--
                    ``(A) In general.--Effective 24 months after the 
                date of enactment of this title, no person may 
                manufacture or introduce into interstate commerce a 
                fluorinated gas, or emit a significant quantity, as 
                determined by the Administrator, of any fluorinated gas 
                that is generated as a byproduct during the production 
                or use of another fluorinated gas, unless--
                            ``(i) the gas is designated as a greenhouse 
                        gas under this section or is an ozone-depleting 
                        substance listed as a class I or class II 
                        substance under title VI;
                            ``(ii) the Administrator has determined 
                        that 1 metric ton of such gas does not make a 
                        contribution to global warming that is equal to 
                        or greater than that made by 1 metric ton of 
                        carbon dioxide; or
                            ``(iii) the person manufacturing or 
                        importing the gas for distribution into 
                        interstate commerce, or emitting the gas, has 
                        submitted to the Administrator, at least 90 
                        days before the start of such manufacture, 
                        importation, or emission, a notice of such 
                        person's manufacture, importation, or emission 
                        of such gas, and the Administrator has not 
                        determined that notice or a substantially 
                        similar notice is incomplete.
                    ``(B) Alternative compliance.--For a gas that is a 
                substitute for a class I or class II substance under 
                title VI and either has been listed as acceptable for 
                use under section 612 or is currently subject to 
                evaluation under section 612, the Administrator may 
                accept the notice and information provided pursuant to 
                that section as fulfilling the obligation under clause 
                (iii) of subparagraph (A).
            ``(2) Review and action by the administrator.--
                    ``(A) Completeness.--Not later than 90 days after 
                receipt of notice under paragraph (1)(A)(iii) or (B), 
                the Administrator shall determine whether the notice is 
                complete.
                    ``(B) Determination.--If the Administrator 
                determines that the notice is complete, the 
                Administrator shall, after notice and an opportunity 
                for comment, not later than 12 months after receipt of 
                the notice--
                            ``(i) issue and publish in the Federal 
                        Register a determination that 1 metric ton of 
                        the gas does not make a contribution to global 
                        warming over 100 years that is equal to or 
                        greater than that made by 1 metric ton of 
                        carbon dioxide and an explanation of the 
                        decision; or
                            ``(ii) determine that 1 metric ton of the 
                        gas makes a contribution to global warming over 
                        100 years that is equal to or greater than that 
                        made by 1 metric ton of carbon dioxide, and 
                        take the actions described in subsection (b) 
                        with respect to such gas.
    ``(e) Regulations.--Not later than one year after the date of 
enactment of this title, the Administrator shall promulgate regulations 
to carry out this section. Such regulations shall include--
            ``(1) requirements for the contents of a petition submitted 
        under subsection (c);
            ``(2) requirements for the contents of a notice required 
        under subsection (d); and
            ``(3) methods and standards for evaluating the carbon 
        dioxide equivalent value of a gas.
    ``(f) Gases Regulated Under Title VI.--The Administrator shall not 
designate a gas as a greenhouse gas under this section to the extent 
that the gas is regulated under title VI.
    ``(g) Savings Clause.--Nothing in this section shall be interpreted 
to relieve any person from complying with the requirements of section 
612.

``SEC. 712. CARBON DIOXIDE EQUIVALENT VALUE OF GREENHOUSE GASES.

    ``(a) Measure of Quantity of Greenhouse Gases.--Any provision of 
this title or title VIII that refers to a quantity or percentage of a 
quantity of greenhouse gases shall mean the quantity or percentage of 
the greenhouse gases expressed in carbon dioxide equivalents.
    ``(b) Initial Value.--Except as provided by the Administrator under 
this section or section 711, the carbon dioxide equivalent value of 
greenhouse gases for purposes of this Act shall be as follows:

                         ``CARBON DIOXIDE EQUIVALENT OF 1 TON OF LISTED GREENHOUSE GASES
----------------------------------------------------------------------------------------------------------------
              Greenhouse gas (1 metric ton)                       Carbon dioxide equivalent (metric tons)
----------------------------------------------------------------------------------------------------------------
Carbon dioxide                                            1
----------------------------------------------------------------------------------------------------------------
Methane                                                   25
----------------------------------------------------------------------------------------------------------------
Nitrous oxide                                             298
----------------------------------------------------------------------------------------------------------------
HFC-23                                                    14,800
----------------------------------------------------------------------------------------------------------------
HFC-125                                                   3,500
----------------------------------------------------------------------------------------------------------------
HFC-134a                                                  1,430
----------------------------------------------------------------------------------------------------------------
HFC-143a                                                  4,470
----------------------------------------------------------------------------------------------------------------
HFC-152a                                                  124
----------------------------------------------------------------------------------------------------------------
HFC-227ea                                                 3,220
----------------------------------------------------------------------------------------------------------------
HFC-236fa                                                 9,810
----------------------------------------------------------------------------------------------------------------
HFC-4310mee                                               1,640
----------------------------------------------------------------------------------------------------------------
CF4                                                       7,390
----------------------------------------------------------------------------------------------------------------
C2F6                                                      12,200
----------------------------------------------------------------------------------------------------------------
C4F10                                                     8,860
----------------------------------------------------------------------------------------------------------------
C6F14                                                     9,300
----------------------------------------------------------------------------------------------------------------
SF6                                                       22,800
----------------------------------------------------------------------------------------------------------------
NF3                                                       17,200
----------------------------------------------------------------------------------------------------------------

    ``(c) Periodic Review.--
            ``(1) Not later than February 1, 2017, and (except as 
        provided in paragraph (3)) not less than every 5 years 
        thereafter, the Administrator shall--
                    ``(A) review and, if appropriate, revise the carbon 
                dioxide equivalent values established under this 
                section or section 711(b)(2), based on a determination 
                of the number of metric tons of carbon dioxide that 
                makes the same contribution to global warming over 100 
                years as 1 metric ton of each greenhouse gas; and
                    ``(B) publish in the Federal Register the results 
                of that review and any revisions.
            ``(2) A revised determination published in the Federal 
        Register under paragraph (1)(B) shall take effect for 
        greenhouse gas emissions starting on January 1 of the first 
        calendar year starting at least 9 months after the date on 
        which the revised determination was published.
            ``(3) The Administrator may decrease the frequency of 
        review and revision under paragraph (1) if the Administrator 
        determines that such decrease is appropriate in order to 
        synchronize such review and revision with any similar review 
        process carried out pursuant to the United Nations Framework 
        Convention on Climate Change, done at New York on May 9, 1992, 
        or to an agreement negotiated under that convention, except 
        that in no event shall the Administrator carry out such review 
        and revision any less frequently than every 10 years.
    ``(d) Methodology.--In setting carbon dioxide equivalent values, 
for purposes of this section or section 711, the Administrator shall 
take into account publications by the Intergovernmental Panel on 
Climate Change or a successor organization under the auspices of the 
United Nations Environmental Programme and the World Meteorological 
Organization.

``SEC. 713. GREENHOUSE GAS REGISTRY.

    ``(a) Definitions.--For purposes of this section:
            ``(1) Climate registry.--The term `Climate Registry' means 
        the greenhouse gas emissions registry jointly established and 
        managed by more than 40 States and Indian tribes in 2007 to 
        collect high-quality greenhouse gas emission data from 
        facilities, corporations, and other organizations to support 
        various greenhouse gas emission reporting and reduction 
        policies for the member States and Indian tribes.
            ``(2) Reporting entity.--The term `reporting entity' 
        means--
                    ``(A) a covered entity;
                    ``(B) an entity that--
                            ``(i) would be a covered entity if it had 
                        emitted, produced, imported, manufactured, or 
                        delivered in 2008 or any subsequent year more 
                        than the applicable threshold level in the 
                        definition of covered entity in paragraph (14) 
                        of section 700; and
                            ``(ii) has emitted, produced, imported, 
                        manufactured, or delivered in 2008 or any 
                        subsequent year more than the applicable 
                        threshold level in the definition of covered 
                        entity in paragraph (14) of section 700, 
                        provided that the figure of 25,000 tons of 
                        carbon dioxide equivalent is read instead as 
                        10,000 tons of carbon dioxide equivalent and 
                        the figure of 460,000,000 cubic feet is read 
                        instead as 276,000,000 cubic feet;
                    ``(C) any other entity that emits a greenhouse gas, 
                or produces, imports, manufactures, or delivers 
                material whose use results or may result in greenhouse 
                gas emissions if the Administrator determines that 
                reporting under this section by such entity will help 
                achieve the purposes of this title or title VIII;
                    ``(D) any vehicle fleet with emissions of more than 
                25,000 tons of carbon dioxide equivalent on an annual 
                basis, if the Administrator determines that the 
                inclusion of such fleet will help achieve the purposes 
                of this title or title VIII; or
                    ``(E) any entity that delivers electricity to an 
                energy-intensive facility in an industrial sector that 
                meets the energy or greenhouse gas intensity criteria 
                in section 764(b)(2)(A)(i).
    ``(b) Regulations.--
            ``(1) In general.--Not later than 6 months after the date 
        of enactment of this title, the Administrator shall issue 
        regulations establishing a Federal greenhouse gas registry. 
        Such regulations shall--
                    ``(A) require reporting entities to submit to the 
                Administrator data on--
                            ``(i) greenhouse gas emissions in the 
                        United States;
                            ``(ii) the production and manufacture in 
                        the United States, importation into the United 
                        States, and, at the discretion of the 
                        Administrator, exportation from the United 
                        States, of fuels and industrial gases the uses 
                        of which result or may result in greenhouse gas 
                        emissions;
                            ``(iii) deliveries in the United States of 
                        natural gas, and any other gas meeting the 
                        specifications for commingling with natural gas 
                        for purposes of delivery, the combustion of 
                        which result or may result in greenhouse gas 
                        emissions; and
                            ``(iv) the capture and sequestration of 
                        greenhouse gases;
                    ``(B) require covered entities and, where 
                appropriate, other reporting entities to submit to the 
                Administrator data sufficient to ensure compliance with 
                or implementation of the requirements of this title;
                    ``(C) require reporting of electricity delivered to 
                industrial sources in energy-intensive industries;
                    ``(D) ensure the completeness, consistency, 
                transparency, accuracy, precision, and reliability of 
                such data;
                    ``(E) take into account the best practices from the 
                most recent Federal, State, tribal, and international 
                protocols for the measurement, accounting, reporting, 
                and verification of greenhouse gas emissions, including 
                protocols from the Climate Registry and other mandatory 
                State or multistate authorized programs;
                    ``(F) take into account the latest scientific 
                research;
                    ``(G) require that, for covered entities with 
                respect to greenhouse gases to which section 722 
                applies, and, to the extent determined to be 
                appropriate by the Administrator, for covered entities 
                with respect to other greenhouse gases and for other 
                reporting entities, submitted data are based on--
                            ``(i) continuous monitoring systems for 
                        fuel flow or emissions, such as continuous 
                        emission monitoring systems;
                            ``(ii) alternative systems that are 
                        demonstrated as providing data with the same 
                        precision, reliability, accessibility, and 
                        timeliness, or, to the extent the Administrator 
                        determines is appropriate for reporting small 
                        amounts of emissions, the same precision, 
                        reliability, and accessibility and similar 
                        timeliness, as data provided by continuous 
                        monitoring systems for fuel flow or emissions; 
                        or
                            ``(iii) alternative methodologies that are 
                        demonstrated to provide data with precision, 
                        reliability, accessibility, and timeliness, or, 
                        to the extent the Administrator determines is 
                        appropriate for reporting small amounts of 
                        emissions, precision, reliability, and 
                        accessibility, as similar as is technically 
                        feasible to that of data generally provided by 
                        continuous monitoring systems for fuel flow or 
                        emissions, if the Administrator determines 
                        that, with respect to a reporting entity, there 
                        is no continuous monitoring system or 
                        alternative system described in clause (i) or 
                        (ii) that is technically feasible;
                    ``(H) require that the Administrator, in 
                determining the extent to which the requirement to use 
                systems or methodologies in accordance with 
                subparagraph (G) is appropriate for reporting entities 
                other than covered entities or for greenhouse gases to 
                which section 722 does not apply, consider the cost of 
                using such systems and methodologies, and of using 
                other systems and methodologies that are available and 
                suitable, for quantifying the emissions involved in 
                light of the purposes of this title, including the goal 
                of collecting consistent entity-wide data;
                    ``(I) include methods for minimizing double 
                reporting and avoiding irreconcilable double reporting 
                of greenhouse gas emissions;
                    ``(J) establish measurement protocols for carbon 
                capture and sequestration systems, including those 
                where enhanced hydrocarbon recovery operations occur, 
                taking into consideration the regulations promulgated 
                under section 813;
                    ``(K) require that reporting entities provide the 
                data required under this paragraph in reports submitted 
                electronically to the Administrator, in such form and 
                containing such information as may be required by the 
                Administrator;
                    ``(L) include requirements for keeping records 
                supporting or related to, and protocols for auditing, 
                submitted data;
                    ``(M) establish consistent policies for calculating 
                carbon content and greenhouse gas emissions for each 
                type of fossil fuel with respect to which reporting is 
                required;
                    ``(N) subsequent to implementation of policies 
                developed under subparagraph (M), provide for immediate 
                dissemination, to States, Indian tribes, and on the 
                Internet, of all data reported under this section as 
                soon as practicable after electronic audit by the 
                Administrator and any resulting correction of data, 
                except that data shall not be disseminated under this 
                subparagraph if--
                            ``(i) its nondissemination is vital to the 
                        national security of the United States, as 
                        determined by the President; or
                            ``(ii) it is confidential business 
                        information that cannot be derived from 
                        information that is otherwise publicly 
                        available and that would cause significant 
                        calculable competitive harm if published, 
                        except that--
                                    ``(I) data relating to greenhouse 
                                gas emissions, including any upstream 
                                or verification data from reporting 
                                entities, shall not be considered to be 
                                confidential business information; and
                                    ``(II) data that is confidential 
                                business information shall be provided 
                                to a State or Indian tribe within whose 
                                jurisdiction the reporting entity is 
                                located, if the Administrator 
                                determines that such State or Indian 
                                tribe has in effect protections for 
                                confidential business information that 
                                are equivalent to protections 
                                applicable to the Federal Government;
                    ``(O) prescribe methods by which the Administrator 
                shall, in cases in which satisfactory data are not 
                submitted to the Administrator for any period of time, 
                estimate emission, production, importation, 
                manufacture, or delivery levels--
                            ``(i) for covered entities with respect to 
                        greenhouse gas emissions, production, 
                        importation, manufacture, or delivery regulated 
                        under this title to ensure that emissions, 
                        production, importation, manufacture, or 
                        deliveries are not underreported, and to create 
                        a strong incentive for meeting data monitoring 
                        and reporting requirements--
                                    ``(I) with a conservative estimate 
                                of the highest emission, production, 
                                importation, manufacture, or delivery 
                                levels that may have occurred during 
                                the period for which data are missing; 
                                or
                                    ``(II) to the extent the 
                                Administrator considers appropriate, 
                                with an estimate of such levels 
                                assuming the unit is emitting, 
                                producing, importing, manufacturing, or 
                                delivering at a maximum potential level 
                                during the period, in order to ensure 
                                that such levels are not underreported 
                                and to create a strong incentive for 
                                meeting data monitoring and reporting 
                                requirements; and
                            ``(ii) for covered entities with respect to 
                        greenhouse gas emissions to which section 722 
                        does not apply and for other reporting 
                        entities, with a reasonable estimate of the 
                        emission, production, importation, manufacture, 
                        or delivery levels that may have occurred 
                        during the period for which data are missing;
                    ``(P) require the designation of a designated 
                representative for each reporting entity;
                    ``(Q) require an appropriate certification, by the 
                designated representative for the reporting entity, of 
                accurate and complete accounting of greenhouse gas 
                emissions, as determined by the Administrator; and
                    ``(R) include requirements for other data necessary 
                for accurate and complete accounting of greenhouse gas 
                emissions, as determined by the Administrator, 
                including data for quality assurance of monitoring 
                systems, monitors and other measurement devices, and 
                other data needed to verify reported emissions, 
                production, importation, manufacture, or delivery.
            ``(2) Timing.--
                    ``(A) Calendar years 2007 through 2010.--For a base 
                period of calendar years 2007 through 2010, each 
                reporting entity shall submit annual data required 
                under this section to the Administrator not later than 
                March 31, 2011. The Administrator may waive or modify 
                reporting requirements for calendar years 2007 through 
                2010 for categories of reporting entities to the extent 
                that the Administrator determines that the reporting 
                entities did not keep data or records necessary to meet 
                reporting requirements. The Administrator may, in 
                addition to or in lieu of such requirements, collect 
                information on energy consumption and production.
                    ``(B) Subsequent calendar years.--For calendar year 
                2011 and each subsequent calendar year, each reporting 
                entity shall submit quarterly data required under this 
                section to the Administrator not later than 60 days 
                after the end of the applicable quarter, except when 
                the data is already being reported to the Administrator 
                on an earlier timeframe for another program.
            ``(3) Waiver of reporting requirements.--The Administrator 
        may waive reporting requirements under this section for 
        specific entities to the extent that the Administrator 
        determines that sufficient and equally or more reliable 
        verified and timely data are available to the Administrator and 
        the public on the Internet under other mandatory statutory 
        requirements.
            ``(4) Alternative threshold.--The Administrator may, by 
        rule, establish applicability thresholds for reporting under 
        this section using alternative metrics and levels, provided 
        that such metrics and levels are easier to administer and cover 
        the same size and type of sources as the threshold defined in 
        this section.
    ``(c) Interrelationship With Other Systems.--In developing the 
regulations issued under subsection (b), the Administrator shall take 
into account the work done by the Climate Registry and other mandatory 
State or multistate programs. Such regulations shall include an 
explanation of any major differences in approach between the system 
established under the regulations and such registries and programs.

                        ``PART C--PROGRAM RULES

``SEC. 721. EMISSION ALLOWANCES.

    ``(a) In General.--The Administrator shall establish a separate 
quantity of emission allowances for each calendar year starting in 
2012, in the amounts prescribed under subsection (e).
    ``(b) Identification Numbers.--The Administrator shall assign to 
each emission allowance established under subsection (a) a unique 
identification number that includes the vintage year for that emission 
allowance.
    ``(c) Legal Status of Emission Allowances.--
            ``(1) In general.--An allowance established by the 
        Administrator under this title does not constitute a property 
        right.
            ``(2) Termination or limitation.--Nothing in this Act or 
        any other provision of law shall be construed to limit or alter 
        the authority of the United States, including the Administrator 
        acting pursuant to statutory authority, to terminate or limit 
        allowances or offset credits.
            ``(3) Other provisions unaffected.--Except as otherwise 
        specified in this Act, nothing in this Act relating to 
        allowances or offset credits established or issued under this 
        title shall affect the application of any other provision of 
        law to a covered entity, or the responsibility for a covered 
        entity to comply with any such provision of law.
    ``(d) Savings Provision.--Nothing in this title shall be construed 
as requiring a change of any kind in any State law regulating electric 
utility rates and charges, or as affecting any State law regarding such 
State regulation, or as limiting State regulation (including any 
prudency review) under such a State law. Nothing in this title shall be 
construed as modifying the Federal Power Act or as affecting the 
authority of the Federal Energy Regulatory Commission under that Act. 
Nothing in this title shall be construed to interfere with or impair 
any program for competitive bidding for power supply in a State in 
which such program is established.
    ``(e) Allowances for Each Calendar Year.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        number of emission allowances established by the Administrator 
        under subsection (a) for each calendar year shall be as 
        provided in the following table:

----------------------------------------------------------------------------------------------------------------
                    ``Calendar year                                 Emission allowances (in millions)
----------------------------------------------------------------------------------------------------------------
2012                                                     4,627
----------------------------------------------------------------------------------------------------------------
2013                                                     4,544
----------------------------------------------------------------------------------------------------------------
2014                                                     5,099
----------------------------------------------------------------------------------------------------------------
2015                                                     5,003
----------------------------------------------------------------------------------------------------------------
2016                                                     5,482
----------------------------------------------------------------------------------------------------------------
2017                                                     5,375
----------------------------------------------------------------------------------------------------------------
2018                                                     5,269
----------------------------------------------------------------------------------------------------------------
2019                                                     5,162
----------------------------------------------------------------------------------------------------------------
2020                                                     5,056
----------------------------------------------------------------------------------------------------------------
2021                                                     4,903
----------------------------------------------------------------------------------------------------------------
2022                                                     4,751
----------------------------------------------------------------------------------------------------------------
2023                                                     4,599
----------------------------------------------------------------------------------------------------------------
2024                                                     4,446
----------------------------------------------------------------------------------------------------------------
2025                                                     4,294
----------------------------------------------------------------------------------------------------------------
2026                                                     4,142
----------------------------------------------------------------------------------------------------------------
2027                                                     3,990
----------------------------------------------------------------------------------------------------------------
2028                                                     3,837
----------------------------------------------------------------------------------------------------------------
2029                                                     3,685
----------------------------------------------------------------------------------------------------------------
2030                                                     3,533
----------------------------------------------------------------------------------------------------------------
2031                                                     3,408
----------------------------------------------------------------------------------------------------------------
2032                                                     3,283
----------------------------------------------------------------------------------------------------------------
2033                                                     3,158
----------------------------------------------------------------------------------------------------------------
2034                                                     3,033
----------------------------------------------------------------------------------------------------------------
2035                                                     2,908
----------------------------------------------------------------------------------------------------------------
2036                                                     2,784
----------------------------------------------------------------------------------------------------------------
2037                                                     2,659
----------------------------------------------------------------------------------------------------------------
2038                                                     2,534
----------------------------------------------------------------------------------------------------------------
2039                                                     2,409
----------------------------------------------------------------------------------------------------------------
2040                                                     2,284
----------------------------------------------------------------------------------------------------------------
2041                                                     2,159
----------------------------------------------------------------------------------------------------------------
2042                                                     2,034
----------------------------------------------------------------------------------------------------------------
2043                                                     1,910
----------------------------------------------------------------------------------------------------------------
2044                                                     1,785
----------------------------------------------------------------------------------------------------------------
2045                                                     1,660
----------------------------------------------------------------------------------------------------------------
2046                                                     1,535
----------------------------------------------------------------------------------------------------------------
2047                                                     1,410
----------------------------------------------------------------------------------------------------------------
2048                                                     1,285
----------------------------------------------------------------------------------------------------------------
2049                                                     1,160
----------------------------------------------------------------------------------------------------------------
2050 and each year thereafter                            1,035
----------------------------------------------------------------------------------------------------------------

            ``(2) Revision.--
                    ``(A) In general.--The Administrator may adjust, in 
                accordance with subparagraph (B), the number of 
                emission allowances established pursuant to paragraph 
                (1) if, after notice and an opportunity for public 
                comment, the Administrator determines that--
                            ``(i) United States greenhouse gas 
                        emissions in 2005 were other than 7,206 million 
                        metric tons carbon dioxide equivalent;
                            ``(ii) if the requirements of this title 
                        for 2012 had been in effect in 2005, section 
                        722 would have required emission allowances to 
                        be held for other than 66.2 percent of United 
                        States greenhouse gas emissions in 2005;
                            ``(iii) if the requirements of this title 
                        for 2014 had been in effect in 2005, section 
                        722 would have required emission allowances to 
                        be held for other than 75.7 percent of United 
                        States greenhouse gas emissions in 2005; or
                            ``(iv) if the requirements of this title 
                        for 2016 had been in effect in 2005, section 
                        722 would have required emission allowances to 
                        be held for other than 84.5 percent United 
                        States greenhouse gas emissions in 2005.
                    ``(B) Adjustment formula.--
                            ``(i) In general.--If the Administrator 
                        adjusts under this paragraph the number of 
                        emission allowances established pursuant to 
                        paragraph (1), the number of emission 
                        allowances the Administrator establishes for 
                        any given calendar year shall equal the product 
                        of--
                                    ``(I) United States greenhouse gas 
                                emissions in 2005, expressed in tons of 
                                carbon dioxide equivalent;
                                    ``(II) the percent of United States 
                                greenhouse gas emissions in 2005, 
                                expressed in tons of carbon dioxide 
                                equivalent, that would have been 
                                subject to section 722 if the 
                                requirements of this title for the 
                                given calendar year had been in effect 
                                in 2005; and
                                    ``(III) the percentage set forth 
                                for that calendar year in section 
                                703(a), or determined under clause (ii) 
                                of this subparagraph.
                            ``(ii) Targets.--In applying the formula 
                        under clause (i)(III) of this subparagraph, for 
                        calendar years for which a percentage is not 
                        listed in section 703(a), the Administrator 
                        shall use a uniform annual decline in the 
                        amount of emissions between the years that are 
                        specified.
                            ``(iii) Limitation on adjustment timing.--
                        Once a calendar year has started, the 
                        Administrator may not adjust the number of 
                        emission allowances to be established for that 
                        calendar year.
                    ``(C) Limitation on adjustment authority.--The 
                Administrator may adjust under this paragraph the 
                number of emission allowances to be established 
                pursuant to paragraph (1) only once.
    ``(f) Compensatory Allowance.--
            ``(1) In general.--The regulations promulgated under 
        subsection (g) shall provide for the establishment and 
        distribution of compensatory allowances for--
                    ``(A) the destruction, in 2012 or later, of 
                fluorinated gases that are greenhouse gases if--
                            ``(i) allowances or offset credits were 
                        retired for their production or importation; 
                        and
                            ``(ii) such gases are not required to be 
                        destroyed under any other provision of law;
                    ``(B) the nonemissive use, in 2012 or later, of 
                petroleum-based or coal-based liquid or gaseous fuel, 
                petroleum coke, natural gas liquid, or natural gas as a 
                feedstock, if allowances or offset credits were retired 
                for the greenhouse gases that would have been emitted 
                from their combustion; and
                    ``(C) the conversionary use, in 2012 or later, of 
                fluorinated gases in a manufacturing process, including 
                semiconductor research or manufacturing, if allowances 
                or offset credits were retired for the production or 
                importation of such gas.
            ``(2) Establishment and distribution.--
                    ``(A) In general.--Not later than 90 days after the 
                end of each calendar year, the Administrator shall 
                establish and distribute to the entity taking the 
                actions described in subparagraph (A), (B), or (C) of 
                paragraph (1) a quantity of compensatory allowances 
                equivalent to the number of tons of carbon dioxide 
                equivalent of avoided emissions achieved through such 
                actions. In establishing the quantity of compensatory 
                allowances, the Administrator shall take into account 
                the carbon dioxide equivalent value of any greenhouse 
                gas resulting from such action.
                    ``(B) Source of allowances.--Compensatory 
                allowances established under this subsection shall not 
                be emission allowances established under subsection 
                (a).
                    ``(C) Identification numbers.--The Administrator 
                shall assign to each compensatory allowance established 
                under subparagraph (A) a unique identification number.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) the term `destruction' means the conversion 
                of a greenhouse gas by thermal, chemical, or other 
                means to another gas or set of gases with little or no 
                carbon dioxide equivalent value;
                    ``(B) the term `nonemissive use' means the use of 
                fossil fuel as a feedstock in an industrial or 
                manufacturing process to the extent that greenhouse 
                gases are not emitted from such process, and to the 
                extent that the products of such process are not 
                intended for use as a fuel or are otherwise intended to 
                be contained in a fuel; and
                    ``(C) the term `conversionary use' means the 
                conversion during research or manufacturing of a 
                fluorinated gas into another greenhouse gas or set of 
                gases with a lower carbon dioxide equivalent value.
    ``(g) Regulations.--Not later than 24 months after the date of 
enactment of this title, the Administrator shall promulgate regulations 
to carry out the provisions of this title.
    ``(h) Feedstock Emissions Study.--
            ``(1) The Administrator may conduct a study to determine 
        the extent to which petroleum-based or coal-based liquid or 
        gaseous fuel, petroleum coke, natural gas liquid, or natural 
        gas are used as feedstocks in manufacturing processes to 
        produce products and the greenhouse gas emissions resulting 
        from such uses.
            ``(2) If as a result of such a study, the Administrator 
        determines that the use of such products by noncoverd sources 
        results in substantial emissions of greenhouse gases or their 
        precursors and that such emissions have not been adequately 
        addressed under other requirements of this Act, the 
        Administrator may, after notice and comment rulemaking, 
        promulgate a regulation reducing compensatory allowances 
        commensurately if doing so will not result in leakage.

``SEC. 722. PROHIBITION OF EXCESS EMISSIONS.

    ``(a) Prohibition.--Except as provided in subsection (c), effective 
January 1, 2012, each covered entity is prohibited from emitting 
greenhouse gases, and having attributable greenhouse gas emissions, in 
combination, in excess of its allowable emissions level. A covered 
entity's allowable emissions level for each calendar year is the number 
of emission allowances (or credits or other allowances as provided in 
subsection (d)) it holds as of 12:01 a.m. on April 1 (or a later date 
established by the Administrator under subsection (j)) of the following 
calendar year.
    ``(b) Methods of Demonstrating Compliance.--Except as otherwise 
provided in this section, the owner or operator of a covered entity 
shall not be considered to be in compliance with the prohibition in 
subsection (a) unless, as of 12:01 a.m. on April 1 (or a later date 
established by the Administrator under subsection (j)) of each calendar 
year starting in 2013, the owner or operator holds a quantity of 
emission allowances (or credits or other allowances as provided in 
subsection (d)) at least as great as the quantity calculated as 
follows:
            ``(1) Electricity sources.--For a covered entity described 
        in section 700(14)(A), 1 emission allowance for each ton of 
        carbon dioxide equivalent of greenhouse gas that such covered 
        entity emitted in the previous calendar year, excluding 
        emissions resulting from the combustion of--
                    ``(A) petroleum-based or coal-based liquid fuel;
                    ``(B) natural gas liquid;
                    ``(C) renewable biomass;
                    ``(D) petroleum coke; or
                    ``(E) any fluorinated gas that is a greenhouse gas 
                purchased for use at that covered entity, except for 
                nitrogen trifluoride.
            ``(2) Fuel producers and importers.--For a covered entity 
        described in section 700(14)(B), 1 emission allowance for each 
        ton of carbon dioxide equivalent of greenhouse gas that would 
        be emitted from the combustion of any petroleum-based or coal-
        based liquid fuel, petroleum coke, or natural gas liquid, 
        produced or imported by such covered entity during the previous 
        calendar year for sale or distribution in interstate commerce, 
        assuming no capture and sequestration of any greenhouse gas 
        emissions.
            ``(3) Industrial gas producers and importers.--For a 
        covered entity described in section 700(14)(C), 1 emission 
        allowance for each ton of carbon dioxide equivalent of fossil 
        fuel-based carbon dioxide, nitrous oxide, or any other 
        fluorinated gas that is a greenhouse gas (except for nitrogen 
        trifluoride), or any combination thereof, produced or imported 
        by such covered entity during the previous calendar year for 
        sale or distribution in interstate commerce or released as 
        fugitive emissions in the production of fluorinated gas.
            ``(4) Geological sequestration sites.--For a covered entity 
        described in section 700(14)(D), 1 emission allowance for each 
        ton of carbon dioxide equivalent of greenhouse gas that such 
        covered entity emitted in the previous calendar year.
            ``(5) Industrial stationary sources.--For a covered entity 
        described in section 700(14)(E), (F), or (G), 1 emission 
        allowance for each ton of carbon dioxide equivalent of 
        greenhouse gas that such covered entity emitted in the previous 
        calendar year, excluding emissions resulting from the 
        combustion of--
                    ``(A) petroleum-based or coal-based liquid fuel;
                    ``(B) natural gas liquid;
                    ``(C) renewable biomass;
                    ``(D) petroleum coke; or
                    ``(E) any fluorinated gas that is a greenhouse gas 
                purchased for use at that covered entity, except for 
                nitrogen trifluoride.
            ``(6) Industrial fossil fuel-fired combustion devices.--For 
        a covered entity described in section 700(14)(H), 1 emission 
        allowance for each ton of carbon dioxide equivalent of 
        greenhouse gas that the devices emitted in the previous 
        calendar year, excluding emissions resulting from the 
        combustion of--
                    ``(A) petroleum-based or coal-based liquid fuel;
                    ``(B) natural gas liquid;
                    ``(C) renewable biomass; or
                    ``(D) petroleum coke.
            ``(7) Natural gas local distribution companies.--For a 
        covered entity described in section 700(14)(I), 1 emission 
        allowance for each ton of carbon dioxide equivalent of 
        greenhouse gas that will be emitted from the combustion of the 
        natural gas, and any other gas meeting the specifications for 
        commingling with natural gas for purposes of deliver, that such 
        entity delivered during the previous calendar year to customers 
        that are not covered entities, assuming no capture and 
        sequestration of that greenhouse gas.
            ``(8) Nitrogen trifluoride sources.--For a covered entity 
        described in section 700(14)(J), 1 emission allowance for each 
        ton of carbon dioxide equivalent of nitrogen trifluoride that 
        such covered entity emitted in the previous calendar year.
            ``(9) Algae-based fuels.--Where carbon dioxide (or another 
        greenhouse gas) is used as an input in the production of fuels, 
        the Administrator shall ensure that allowances are not required 
        to be held both for the carbon dioxide used to grow algae and 
        for the carbon dioxide emitted from combustion of the fuel 
        produced from such algae.
            ``(10) Fugitive emissions.--The greenhouse gas emissions to 
        which paragraphs (1), (5), (6), and (8) apply shall not include 
        fugitive emissions of greenhouse gas, except to the extent the 
        Administrator determines that data on the carbon dioxide 
        equivalent value of greenhouse gas in the fugitive emissions 
        can be provided with sufficient precision, reliability, 
        accessibility, and timeliness to ensure the integrity of 
        emission allowances, the allowance tracking system, and the cap 
        on emissions.
            ``(11) Export exemption.--This section shall not apply to 
        any petroleum-based or coal-based liquid fuel, petroleum coke, 
        natural gas liquid, or fluorinated gas that is exported for any 
        calendar year.
            ``(12) Natural gas liquids.--Notwithstanding subsection 
        (a), in the case where the owner or operator of a covered 
        entity described in section 700(14)(B) that produces natural 
        gas liquids does not take ownership of the liquids, nor is 
        responsible for the distribution or use of the liquids in 
        commerce, the owner of the liquids shall be responsible for 
        compliance under this section. In such a case, the owner of the 
        covered entity shall provide the Administrator, in a manner to 
        be determined by the Administrator, information regarding the 
        quantity and ownership of liquids produced at the covered 
        entity.
            ``(13) Application of multiple paragraphs.--For a covered 
        entity to which more than 1 of paragraphs (1) through (8) 
        apply, all applicable paragraphs shall apply, except that not 
        more than 1 emission allowance shall be required for the same 
        emission.
    ``(c) Phase-In of Prohibition.--
            ``(1) Industrial stationary sources.--The prohibition under 
        subsection (a) shall first apply to a covered entity described 
        in section 700(14)(E), (F), (G), or (H) with respect to 
        emissions occurring during calendar year 2014.
            ``(2) Natural gas local distribution companies.--The 
        prohibition under subsection (a) shall first apply to a covered 
        entity described in section 700(14)(I) with respect to 
        deliveries occurring during calendar year 2016.
    ``(d) Additional Methods.--In addition to using the method of 
compliance described in subsection (b), a covered entity may do the 
following:
            ``(1) Offset credits.--
                    ``(A) In general.--Covered entities collectively 
                may, in accordance with this paragraph, use offset 
                credits to demonstrate compliance for up to a maximum 
                of 2 billion tons of greenhouse gas emissions annually. 
                The ability to demonstrate compliance with offset 
                credits shall be divided pro rata among covered 
                entities by allowing each covered entity to satisfy a 
                percentage of the number of allowances required to be 
                held under subsection (b) to demonstrate compliance by 
                holding 1 domestic offset credit or 1.25 international 
                offset credits in lieu of an emission allowance, except 
                as provided in subparagraph (D).
                    ``(B) Applicable percentage.--The percentage 
                referred to in subparagraph (A) for a given calendar 
                year shall be determined by dividing 2 billion by the 
                sum of 2 billion plus the number of emission allowances 
                established under section 721(a) for the previous year, 
                and multiplying that number by 100. Not more than one 
                half of the applicable percentage under this paragraph 
                may be used for a year by holding domestic offset 
                credits, and not more than one half of the applicable 
                percentage under this paragraph may be used for a year 
                by holding international offset credits, except as 
                provided in subparagraph (C).
                    ``(C) Modified percentages.--If the Administrator 
                determines that domestic offset credits available for 
                use in any calendar year at domestic offset prices 
                generally equal to or less than allowance prices, are 
                likely to offset less than 0.9 billion tons of 
                greenhouse gas emissions measured in tons of carbon 
                dioxide equivalents, the Administrator shall increase 
                the percent of emissions that can be offset through the 
                use of international offset credits (and decrease the 
                percent of emissions that can be allowed through the 
                use of domestic offset credits by the same amount) to 
                reflect the amount that 1.0 billion exceeds the number 
                of domestic offset credits the Administrator determines 
                is available for that year, up to a maximum of 0.5 
                billion emissions.
                    ``(D) International offset credits.--
                Notwithstanding subparagraph (A), to demonstrate 
                compliance prior to calendar year 2018, a covered 
                entity may use 1 international offset credit in lieu of 
                an emission allowance up to the amount permitted under 
                this paragraph.
                    ``(E) President's recommendation.--The President 
                may make a recommendation to Congress as to whether the 
                number 2 billion specified in subparagraphs (A) and (B) 
                should be increased or decreased.
            ``(2) International emission allowances.--To demonstrate 
        compliance, a covered entity may hold an international emission 
        allowance in lieu of an emission allowance, except as modified 
        under section 728(d).
            ``(3) Compensatory allowances.--To demonstrate compliance, 
        a covered entity may hold a compensatory allowance obtained 
        under section 721(f) in lieu of an emission allowance.
    ``(d) Retirement of Allowances and Credits.--As soon as practicable 
after a deadline established for covered entities to demonstrate 
compliance with this title, the Administrator shall retire the quantity 
of allowances or credits required to be held under this title.
    ``(e) Alternative Metrics.--For categories of covered entities 
described in subparagraph (B), (C), (F), (G), or (H) of section 
700(14), the Administrator may, by rule, establish an applicability 
threshold for inclusion under those subparagraphs using an alternative 
metric and level, provided that such metric and level are easier to 
administer and cover the same size and type of sources as the threshold 
defined in such subparagraphs.
    ``(f) Threshold Review.--For each category of covered entities 
described in subparagraph (B), (C), (F), (G), or (H) of section 
700(14), the Administrator shall, in 2020 and once every 8 years 
thereafter, review the carbon dioxide equivalent emission thresholds 
that are used to define covered entities. After consideration of--
            ``(1) emissions from covered entities in each such 
        category, and from other entities of the same type that emit 
        less than the threshold amount for the category (including 
        emission sources that commence operation after the date of 
        enactment of this title that are not covered entities); and
            ``(2) whether greater greenhouse gas emission reductions 
        can be cost-effectively achieved by lowering the applicable 
        threshold,
the Administrator may by rule lower such threshold to not less than 
10,000 tons of carbon dioxide equivalent emissions. In determining the 
cost effectiveness of potential reductions from lowering the threshold 
for covered entities, the Administrator shall consider alternative 
regulatory greenhouse gas programs, including setting standards under 
other titles of this Act.
    ``(g) Designated Representatives.--The regulations promulgated 
under section 721(g) shall require that each covered entity, and each 
entity holding allowances or credits or receiving allowances or credits 
from the Administrator under this title, select a designated 
representative.
    ``(h) Education and Outreach.--
            ``(1) In general.--The Administrator shall establish and 
        carry out a program of education and outreach to assist covered 
        entities, especially entities having little experience with 
        environmental regulatory requirements similar or comparable to 
        those under this title, in preparing to meet the compliance 
        obligations of this title. Such program shall include education 
        with respect to using markets to effectively achieve such 
        compliance.
            ``(2) Failure to receive information.--A failure to receive 
        information or assistance under this subsection may not be used 
        as a defense against an allegation of any violation of this 
        title.
    ``(i) Adjustment of Deadline.--The Administrator may, by rule, 
establish a deadline for demonstrating compliance, for a calendar year, 
later than the date provided in subsection (a), as necessary to ensure 
the availability of emissions data, but in no event shall the deadline 
be later than June 1.
    ``(j) Notice Requirement for Covered Entities Receiving Natural Gas 
From Natural Gas Local Distribution Companies.--The owner or operator 
of a covered entity that takes delivery of natural gas from a natural 
gas local distribution company shall, not later than September 1 of 
each calendar year, notify such natural gas local distribution company 
in writing that such entity will qualify as a covered entity under this 
title for that calendar year.
    ``(k) Compliance Obligation.--For purposes of this title, the year 
of a compliance obligation is the year in which compliance is 
determined, not the year in which the greenhouse gas emissions occur or 
the covered entity has attributable greenhouse gas emissions.

``SEC. 723. PENALTY FOR NONCOMPLIANCE.

    ``(a) Enforcement.--A violation of any prohibition of, requirement 
of, or regulation promulgated pursuant to this title shall be a 
violation of this Act. It shall be a violation of this Act for a 
covered entity to emit greenhouse gases, and have attributable 
greenhouse gas emissions, in combination, in excess of its allowable 
emissions level as provided in section 722(a). Each ton of carbon 
dioxide equivalent for which a covered entity fails to demonstrate 
compliance under section 722(b) shall be a separate violation.
    ``(b) Excess Emissions Penalty.--
            ``(1) In general.--The owner or operator of any covered 
        entity that fails for any year to comply, on the deadline 
        described in section 722(a) or (i), shall be liable for payment 
        to the Administrator of an excess emissions penalty in the 
        amount described in paragraph (2).
            ``(2) Amount.--The amount of an excess emissions penalty 
        required to be paid under paragraph (1) shall be equal to the 
        product obtained by multiplying--
                    ``(A) the tons of carbon dioxide equivalent for 
                which the owner or operator of a covered entity failed 
                to comply under section 722(b) on the deadline; by
                    ``(B) twice the fair market value of emission 
                allowances established for emissions occurring in the 
                calendar year for which the emission allowances were 
                due.
            ``(3) Timing.--An excess emissions penalty required under 
        this subsection shall be immediately due and payable to the 
        Administrator, without demand, in accordance with regulations 
        promulgated by the Administrator, which shall be issued not 
        later than 2 years after the date of enactment of this title.
            ``(4) No effect on liability.--An excess emissions penalty 
        due and payable by the owners or operators of a covered entity 
        under this subsection shall not diminish the liability of the 
        owners or operators for any fine, penalty, or assessment 
        against the owners or operators for the same violation under 
        any other provision of this Act or any other law.
    ``(c) Excess Emissions Allowances.--The owner or operator of a 
covered entity that fails for any year to comply on the deadline 
described in section 722(a) or (i) shall be liable to offset the 
covered entity's excess combination of greenhouse gases emitted and 
attributable greenhouse gas emissions by an equal quantity of emission 
allowances during the following calendar year, or such longer period as 
the Administrator may prescribe. During the year in which the covered 
entity failed to comply, or any year thereafter, the Administrator may 
deduct the emission allowances required under this subsection to offset 
the covered entity's excess actual or attributable emissions.

``SEC. 724. TRADING.

    ``(a) Permitted Transactions.--Except as otherwise provided in this 
title, the lawful holder of an emission allowance, compensatory 
allowance, or offset credit may, without restriction, sell, exchange, 
transfer, hold for compliance in accordance with section 722, or 
request that the Administrator retire the emission allowance or offset 
credit.
    ``(b) No Restriction on Transactions.--The privilege of purchasing, 
holding, selling, exchanging, transferring, and requesting retirement 
of emission allowances, compensatory allowances, or offset credits 
shall not be restricted to the owners and operators of covered 
entities, except as otherwise provided in this title.
    ``(c) Effectiveness of Allowance Transfers.--No transfer of an 
emission allowance, compensatory allowance, or offset credit shall be 
effective for purposes of this title until a certification of the 
transfer, signed by the designated representative of the transferor, is 
received and recorded by the Administrator in accordance with 
regulations promulgated under section 721(g).
    ``(d) Allowance Tracking System.--The regulations promulgated under 
section 721(g) shall include a system for issuing, recording, holding, 
and tracking allowances and offset credits that shall specify all 
necessary procedures and requirements for an orderly and competitive 
functioning of the allowance and offset credit market. Such regulations 
shall provide for appropriate publication of the information in the 
system on the Internet.

``SEC. 725. BANKING AND BORROWING.

    ``(a) Banking.--An emission allowance may be used to comply with 
section 722 or section 723 for emissions in--
            ``(1) the vintage year for the allowance; or
            ``(2) any calendar year subsequent to the vintage year for 
        the allowance.
    ``(b) Expiration.--
            ``(1) Regulations.--The Administrator may establish by 
        regulation criteria and procedures for determining whether, and 
        for implementing a determination that, the expiration of an 
        allowance or credit established or issued by the Administrator 
        under this title, or expiration of the ability to use an 
        international emission allowance to comply with section 722, is 
        necessary to ensure the authenticity and integrity of 
        allowances or credits or the allowance tracking system.
            ``(2) General rule.--An allowance or credit established or 
        issued by the Administrator under this title shall not expire 
        unless--
                    ``(A) it is retired by the Administrator as 
                required under this title; or
                    ``(B) it is determined to expire or to have expired 
                by a specific date by the Administrator in accordance 
                with regulations promulgated under paragraph (1).
            ``(3) International emission allowances.--The ability to 
        use an international emission allowance to comply with section 
        722 shall not expire unless--
                    ``(A) the allowance is retired by the Administrator 
                as required by this title; or
                    ``(B) the ability to use such allowance to meet 
                such compliance obligation requirements is determined 
                to expire or to have expired by a specific date by the 
                Administrator in accordance with regulations 
                promulgated under paragraph (1).
    ``(c) Borrowing Future Vintage Year Allowances.--
            ``(1) Borrowing without interest.--In addition to the uses 
        described in subsection (a), an emission allowance may be used 
        to comply with section 722(a) or section 723 for emissions, 
        production, importation, manufacture, or deliveries in the 
        calendar year immediately preceding the vintage year for the 
        allowance.
            ``(2) Borrowing with interest.--
                    ``(A) In general.--A covered entity may satisfy up 
                to 15 percent of its compliance obligations under 
                section 722(a) in a specific calendar year by holding 
                emission allowances with a vintage year 1 to 5 years 
                later than that calendar year.
                    ``(B) Limitations.--An emission allowance borrowed 
                pursuant to this paragraph shall be an emission 
                allowance established by the Administrator for a 
                specific future calendar year under section 721(a) and 
                that is held by the borrower.
                    ``(C) Repayment with interest.--For each emission 
                allowance that an owner or operator of a covered entity 
                borrows pursuant to this paragraph, such owner or 
                operator shall, at the time it borrows the allowance, 
                hold for retirement by the Administrator a quantity of 
                emission allowances that is equal to the product 
                obtained by multiplying--
                            ``(i) 0.08; by
                            ``(ii) the number of years between the 
                        calendar year in which the allowance is being 
                        used to satisfy a compliance obligation and the 
                        vintage year of the allowance.

``SEC. 726. STRATEGIC RESERVE.

    ``(a) Strategic Reserve Auctions.--
            ``(1) In general.--Once each quarter of each calendar year 
        for which allowances are established under section 721(a), the 
        Administrator shall auction strategic reserve allowances.
            ``(2) Restriction to covered entities.--In each auction 
        conducted under paragraph (1), only covered entities that the 
        Administrator expects will be required to comply with section 
        722(a) in the following calendar year shall be eligible to make 
        purchases.
    ``(b) Pool of Emission Allowances for Strategic Reserve Auctions.--
            ``(1) Filling the strategic reserve initially.--
                    ``(A) In general.--The Administrator shall, not 
                later than 2 years after the date of enactment of this 
                title, establish a strategic reserve account, and shall 
                place in that account an amount of emission allowances 
                established under section 721(a) for each calendar year 
                from 2012 through 2050 in the amounts specified in 
                subparagraph (B) of this paragraph.
                    ``(B) Amount.--The amount referred to in 
                subparagraph (A) shall be--
                            ``(i) for each of calendar years 2012 
                        through 2019, 1 percent of the quantity of 
                        emission allowances established for that year 
                        pursuant to section 721(e)(1);
                            ``(ii) for each of calendar years 2020 
                        through 2029, 2 percent of the quantity of 
                        emission allowances established for that year 
                        pursuant to section 721(e)(1); and
                            ``(iii) for each of calendar years 2030 
                        through 2050, 3 percent of the quantity of 
                        emission allowances established for that year 
                        pursuant to section 721(e)(1).
                    ``(C) Effect on other provisions.--Any provision in 
                this title (except for subparagraph (B) of this 
                paragraph) that refers to a quantity or percentage of 
                the emission allowances established for a calendar year 
                under section 721(a) shall be considered to refer to 
                the amount of emission allowances as determined 
                pursuant to section 721(e), less any emission 
                allowances established for that year that are placed in 
                the strategic reserve account under this paragraph.
            ``(2) Supplementing the strategic reserve.--The 
        Administrator shall also--
                    ``(A) at the end of each calendar year, transfer to 
                the strategic reserve account each emission allowance 
                that was offered for sale but not sold at any auction 
                conducted under part H; and
                    ``(B) transfer emission allowances established 
                under subsection (g) from auction proceeds, and deposit 
                them into the strategic reserve, to the extent 
                necessary to maintain the reserve at its original size.
    ``(c) Minimum Strategic Reserve Auction Price.--
            ``(1) In general.--At each strategic reserve auction, the 
        Administrator shall offer emission allowances for sale 
        beginning at a minimum price per emission allowance, which 
        shall be known as the `minimum strategic reserve auction 
        price'.
            ``(2) Initial minimum strategic reserve auction prices.--
        The minimum strategic reserve auction price shall be [insert 
        amount twice the EPA-modeled 2012 allowance price EPA provides 
        to the Committee] for the strategic reserve auctions held in 
        2012. For the strategic reserve auctions held in 2013 and 2014, 
        the minimum strategic reserve auction price shall be the 
        strategic reserve auction price for the previous year increased 
        by 5 percent plus the rate of inflation (as measured by the 
        Consumer Price Index for All Urban Consumers).
            ``(3) Minimum strategic reserve auction price in subsequent 
        years.--For each strategic reserve auction held in 2015 and 
        each year thereafter, the minimum strategic reserve auction 
        price shall be 60 percent above a rolling 36-month average of 
        the daily closing price for that year's emission allowance 
        vintage as reported on registered carbon trading facilities, 
        calculated using constant dollars.
    ``(d) Quantity of Emission Allowances Released From the Strategic 
Reserve.--
            ``(1) Initial limits.--For each of calendar years 2012 
        through 2016, the annual limit on the number of emission 
        allowances from the strategic reserve account that may be 
        auctioned is an amount equal to 5 percent of the emission 
        allowances established for that calendar year under section 
        721(a). This limit does not apply to international offset 
        credits sold on consignment pursuant to subsection (h).
            ``(2) Limits in subsequent years.--For calendar year 2017 
        and each year thereafter, the annual limit on the number of 
        emission allowances from the strategic reserve account that may 
        be auctioned is an amount equal to 10 percent of the emission 
        allowances established for that calendar year under section 
        721(a). This limit does not apply to international offset 
        credits sold on consignment pursuant to subsection (h).
            ``(3) Allocation of limitation.--One-fourth of each year's 
        annual strategic reserve auction limit under this subsection 
        shall be made available for auction in each quarter. Any 
        allowances from the strategic reserve account that are made 
        available for sale in a quarterly auction and not sold shall be 
        rolled over and added to the quantity available for sale in the 
        following quarter, except that allowances not sold at auction 
        in the fourth quarter of a year shall not be rolled over to the 
        following calendar year's auctions, but shall be returned to 
        the strategic reserve account.
    ``(e) Purchase Limit.--
            ``(1) In general.--Except as provided in paragraph (2) or 
        (3), the annual number of emission allowances that a covered 
        entity may purchase at the strategic reserve auctions in each 
        calendar year shall not exceed 20 percent of the covered 
        entity's emissions during the most recent year for which 
        allowances or credits were retired under section 722(a).
            ``(2) 2012 Limit.--For calendar year 2012, the maximum 
        aggregate number of emission allowances that a covered entity 
        may purchase from that year's strategic reserve auctions shall 
        be 20 percent of the covered entity's greenhouse gas emissions 
        that the covered entity reported to the registry established 
        under section 713 for 2011 and that would be subject to section 
        722(a) if occurring in later calendar years.
            ``(3) New entrants.--The Administrator shall, by 
        regulation, establish a separate limitation applicable to 
        entities that expect to become a covered entity in the year of 
        the auction, permitting them to purchase emission allowances at 
        the strategic reserve auctions in their first calendar year of 
        operation in an amount of at least 20 percent of their expected 
        combined emissions and attributable greenhouse gas emissions 
        for that year.
    ``(f) Delegation or Contract.--Pursuant to regulations under this 
section, the Administrator may, by delegation or contract, provide for 
the conduct of strategic reserve auctions under the Administrator's 
supervision by other departments or agencies of the Federal Government 
or by nongovernmental agencies, groups, or organizations.
    ``(g) Use of Auction Proceeds.--
            ``(1) Deposit in strategic reserve fund.--The proceeds from 
        strategic reserve auctions shall be placed in the Strategic 
        Reserve Fund established under section 782(c), and shall be 
        available without further appropriation or fiscal year 
        limitation for the purposes described in this subsection.
            ``(2) International offset credits for reduced 
        deforestation.--The Administrator shall use the proceeds from 
        each strategic reserve auction to purchase international offset 
        credits issued for reduced deforestation activities pursuant to 
        section 743(e). The Administrator shall retire those 
        international offset credits and establish a number of emission 
        allowances equal to 80 percent of the number of international 
        offset credits so retired. Emission allowances established 
        under this paragraph shall be in addition to those established 
        under section 721(a).
            ``(3) Emission allowances.--The Administrator shall deposit 
        emission allowances established under paragraph (2) in the 
        strategic reserve, except that, with respect to any such 
        emission allowances in excess of the amount necessary to fill 
        the strategic reserve to its original size, the Administrator 
        shall--
                    ``(A) except as provided in subparagraph (B), 
                assign a vintage year to the emission allowance, which 
                shall be no earlier than the year in which the 
                allowance is established under paragraph (2), and make 
                the emission allowances available for auction under 
                section 791; and
                    ``(B) to the extent any such allowances cannot be 
                assigned a vintage year because of the limitation in 
                paragraph (4), retire the allowances.
            ``(4) Limitation.--In no case may the Administrator assign 
        under paragraph (3)(A) more emission allowances to a vintage 
        year than the number of emission allowances from that vintage 
        year that were placed in the strategic reserve account under 
        subsection (b)(1).
    ``(h) Availability of International Offset Credits for Auction.--
            ``(1) In general.--The regulations promulgated under 
        section 721(g) shall allow any entity holding international 
        offset credits from reduced deforestation issued under section 
        743(e) to request that the Administrator include such offset 
        credits in an upcoming strategic reserve auction. The 
        regulations shall provide that--
                    ``(A) such international offset credits will be 
                used to fill bid orders only after the supply of 
                strategic reserve allowances available for sale at that 
                auction has been depleted;
                    ``(B) international offset credits may be sold at a 
                strategic reserve auction under this subsection only if 
                the Administrator determines that it is highly likely 
                that covered entities will, to cover emissions 
                occurring in the year the auction is held, use under 
                section 722 offset credits in an amount equal to or 
                greater than 80 percent of 2 billion tons of carbon 
                dioxide equivalent;
                    ``(C) upon sale of such international offset 
                credits, the Administrator shall retire those 
                international offset credits, and establish and provide 
                to the purchasers a number of emission allowances equal 
                to 80 percent of the number of international offset 
                credits so retired, which allowances shall be in 
                addition to those established under section 721(a); and
                    ``(D) for international offset credits sold 
                pursuant to this subsection, the proceeds for the 
                entity that offered the international offset credits 
                for sale shall be the lesser of--
                            ``(i) the average daily closing price for 
                        international offset credits sold on registered 
                        exchanges (or if such price is unavailable, the 
                        average price as determined by the 
                        Administrator) during the six months prior to 
                        the strategic reserve auction at which they 
                        were auctioned, with the remaining funds 
                        collected upon the sale of the international 
                        offset credits deposited in the Treasury; and
                            ``(ii) the amount received for the 
                        international offset credits at the auction.
            ``(2) Proceeds.--For international offset credits auctioned 
        pursuant to this subsection, notwithstanding section 3302 of 
        title 31, United States Code, or any other provision of law, 
        within 90 days of receipt, the United States shall transfer the 
        proceeds from the auction, as defined in paragraph (1)(D), to 
        the entity which possessed the international offset credits 
        auctioned. No funds transferred from a purchaser to a seller of 
        international offset credits under this paragraph shall be held 
        by any officer or employee of the United States or treated for 
        any purpose as public monies.
            ``(3) Pricing.--When the Administrator acts under this 
        subsection as the agent of an entity in possession of 
        international offset credits, the Administrator is not 
        obligated to obtain the highest price possible for the 
        international offset credits, and instead shall auction such 
        international offset credits in the same manner and pursuant to 
        the same rules (except as modified in paragraph (1)) as set 
        forth for auctioning strategic reserve allowances. Entities 
        requesting that such international offset credits be offered 
        for sale at a strategic reserve auction may not set a minimum 
        reserve price for their international offset credits.
    ``(i) Initial Regulations.--Not later than 24 months after the date 
of enactment of this title, the Administrator shall promulgate 
regulations, in consultation with other appropriate agencies, governing 
the auction of allowances under this section. Such regulations shall 
include the following requirements:
            ``(1) Frequency; first auction.--Auctions shall be held 
        four times per year at regular intervals, with the first 
        auction to be held no later than March 31, 2012.
            ``(2) Auction format.--Auctions shall follow a single-
        round, sealed-bid, uniform price format.
            ``(3) Participation; financial assurance.--Auctions shall 
        be open to any covered entity eligible to purchase emission 
        allowances under subsection (a)(2), except that the 
        Administrator may establish financial assurance requirements to 
        ensure that auction participants can and will perform on their 
        bids.
            ``(4) Disclosure of beneficial ownership.--Each bidder in 
        an auction shall be required to disclose the person or entity 
        sponsoring or benefitting from the bidder's participation in 
        the auction if such person or entity is, in whole or in part, 
        other than the bidder.
            ``(5) Purchase limits.--No person may, directly or in 
        concert with another participant, purchase more than 20 percent 
        of the allowances offered for sale at any quarterly auction.
            ``(6) Publication of information.--After the auction, the 
        Administrator shall, in a timely fashion, publish the 
        identities of winning bidders, the quantity of allowances 
        obtained by each winning bidder, and the auction clearing 
        price.
            ``(7) Other requirements.--The Administrator may include in 
        the regulations such other requirements or provisions as the 
        Administrator, in consultation with other agencies as 
        appropriate, considers appropriate to promote effective, 
        efficient, transparent, and fair administration of auctions 
        under this section.
    ``(j) Revision of Regulations.--The Administrator may, at any time, 
in consultation with other agencies as appropriate, revise the initial 
regulations promulgated under subsection (i). Such revised regulations 
need not meet the requirements identified in subsection (i) if the 
Administrator determines that an alternative auction design would be 
more effective, taking into account factors including costs of 
administration, transparency, fairness, and risks of collusion or 
manipulation. In determining whether and how to revise the initial 
regulations under this subsection, the Administrator shall not consider 
maximization of revenues to the Federal Government.

``SEC. 727. PERMITS.

    ``(a) Permit Program.--For stationary sources subject to title V of 
this Act, the provisions of this title shall be implemented by permits 
issued to covered entities (and enforced) in accordance with the 
provisions of title V, as modified by this title. Any such permit 
issued by the Administrator, or by a State with an approved permit 
program, shall require a covered entity to hold a number of emission 
allowances at least equal to the total annual amount of carbon dioxide 
equivalents for its combined emissions and attributable greenhouse gas 
emissions to which section 722 applies. No such permit shall be issued 
that is inconsistent with the requirements of this title, and title V 
as applicable. Nothing in this section regarding compliance plans or in 
title V shall be construed as affecting emission allowances. Submission 
of a statement by the owner or operator, or the designated 
representative of the owners and operators, of a covered entity that 
the owners and operators will hold emission allowances not less than 
the total amount of carbon dioxide equivalents for a year for its 
combined emissions and attributable greenhouse gas emissions to which 
section 722 applies shall be deemed to meet the proposed and approved 
planning requirements of title V. Recordation by the Administrator of 
transfers of emission allowances shall amend automatically all 
applicable proposed or approved permit applications, compliance plans, 
and permits.
    ``(b) Multiple Owners.--No permit shall be issued under this 
section and no allowances or offset credits shall be disbursed under 
this title to a covered entity or any other person until the designated 
representative of the owners or operators has filed a certificate of 
representation with regard to matters under this title, including the 
holding and distribution of emission allowances and the proceeds of 
transactions involving emission allowances. Where there are multiple 
holders of a legal or equitable title to, or a leasehold interest in, 
such a covered entity or other entity or where a utility or industrial 
customer purchases power from an independent power producer, the 
certificate shall state--
            ``(1) that emission allowances and the proceeds of 
        transactions involving emission allowances will be deemed to be 
        held or distributed in proportion to each holder's legal, 
        equitable, leasehold, or contractual reservation or 
        entitlement; or
            ``(2) if such multiple holders have expressly provided for 
        a different distribution of emission allowances by contract, 
        that emission allowances and the proceeds of transactions 
        involving emission allowances will be deemed to be held or 
        distributed in accordance with the contract.
A passive lessor, or a person who has an equitable interest through 
such lessor, whose rental payments are not based, either directly or 
indirectly, upon the revenues or income from the covered entity or 
other person shall not be deemed to be a holder of a legal, equitable, 
leasehold, or contractual interest for the purpose of holding or 
distributing emission allowances as provided in this subsection, during 
either the term of such leasehold or thereafter, unless expressly 
provided for in the leasehold agreement. Except as otherwise provided 
in this subsection, where all legal or equitable title to or interest 
in a covered entity, or other entity, is held by a single person, the 
certificate shall state that all emission allowances received by the 
entity are deemed to be held for that person.
    ``(c) Prohibition.--It shall be unlawful for any person to operate 
any covered entity [that is a stationary source subject to title V] 
except in compliance with the terms and requirements of a permit issued 
by the Administrator or a State with an approved permit program. For 
purposes of this subsection, compliance, as provided in section 504(f), 
with a permit issued under title V which complies with this title for 
covered entities shall be deemed compliance with this subsection as 
well as section 502(a).

``SEC. 728. INTERNATIONAL EMISSION ALLOWANCES.

    ``(a) Qualifying Programs.--The Administrator, in consultation with 
the Secretary of State, may by rule designate an international climate 
change program as a qualifying international program if--
            ``(1) the program is run by a national or supranational 
        foreign government, and imposes a mandatory absolute tonnage 
        limit on greenhouse gas emissions from 1 or more foreign 
        countries, or from 1 or more economic sectors in such a country 
        or countries; and
            ``(2) the program is at least as stringent as the program 
        established by this title, including provisions to ensure at 
        least comparable monitoring, compliance, enforcement, quality 
        of offsets, and restrictions on the use of offsets.
    ``(b) Disqualified Allowances.--An international emission allowance 
may not be held under section 722(d)(2) if it is in the nature of an 
offset instrument or allowance awarded based on the achievement of 
greenhouse gas emission reductions or avoidance, or greenhouse gas 
sequestration, that are not subject to the mandatory absolute tonnage 
limits referred to in subsection (a)(1).
    ``(c) Retirement.--
            ``(1) Entity certification.--The owner or operator of an 
        entity that holds an international emission allowance under 
        section 722(d)(2) shall certify to the Administrator that such 
        international emission allowance has not previously been used 
        to comply with any foreign, international, or domestic 
        greenhouse gas regulatory program.
            ``(2) Retirement.--
                    ``(A) Foreign and international regulatory 
                entities.--The Administrator, in consultation with the 
                Secretary of State, shall seek, by whatever means 
                appropriate, including agreements and technical 
                cooperation on allowance tracking, to ensure that any 
                relevant foreign, international, and domestic 
                regulatory entities--
                            ``(i) are notified of the use, for purposes 
                        of compliance with this title, of any 
                        international emission allowance; and
                            ``(ii) provide for the disqualification of 
                        such international emission allowance for any 
                        subsequent use under the relevant foreign, 
                        international, or domestic greenhouse gas 
                        regulatory program, regardless of whether such 
                        use is a sale, exchange, or submission to 
                        satisfy a compliance obligation.
                    ``(B) Disqualification from further use.--The 
                Administrator shall ensure that, once an international 
                emission allowance has been disqualified or otherwise 
                used for purposes of compliance with this title, such 
                allowance shall be disqualified from any further use 
                under this title.
    ``(d) Use Limitations.--The Administrator may, by rule, modify the 
percentage applicable to international emission allowances under 
section 722(d)(2), consistent with the purposes of the Safe Climate 
Act.

                           ``PART D--OFFSETS

``SEC. 731. OFFSETS INTEGRITY ADVISORY BOARD.

    ``(a) Establishment.--Not later than 30 days after the date of 
enactment of this title, the Administrator shall establish an 
independent Offsets Integrity Advisory Board. The Advisory Board shall 
make recommendations to the Administrator for use in promulgating and 
revising regulations under this part and part E, and for ensuring the 
overall environmental integrity of the programs established pursuant to 
those regulations.
    ``(b) Membership.--The Advisory Board shall be comprised of at 
least nine members. Each member shall be qualified by education, 
training, and experience to evaluate scientific and technical 
information on matters referred to the Board under this section. The 
Administrator shall appoint Advisory Board members, including a chair 
and vice-chair of the Advisory Board. Terms shall be 3 years in length, 
except for initial terms, which may be up to 5 years in length to allow 
staggering. Members may be reappointed only once for an additional 3-
year term, and such second term may follow directly after a first term.
    ``(c) Activities.--The Advisory Board established pursuant to 
subsection (a) shall--
            ``(1) provide recommendations, not later than 90 days after 
        the Advisory Board's establishment and periodically thereafter, 
        to the Administrator regarding offset project types that should 
        be considered for eligibility under section 733, taking into 
        consideration relevant scientific and other issues, including--
                    ``(A) the availability of a representative data set 
                for use in developing the activity baseline;
                    ``(B) the potential for accurate quantification of 
                greenhouse gas reduction, avoidance, or sequestration 
                for an offset project type;
                    ``(C) the potential level of scientific and 
                measurement uncertainty associated with an offset 
                project type; and
                    ``(D) any beneficial or adverse environmental, 
                public health, welfare, social, economic, or energy 
                effects associated with an offset project type;
            ``(2) make available to the Administrator its advice and 
        comments on offset methodologies that should be considered 
        under regulations promulgated pursuant to section 734(a) and 
        (b), including methodologies to address the issues of 
        additionality, activity baselines, measurement, leakage, 
        uncertainty, permanence, and environmental integrity;
            ``(3) make available the Administrator, and other relevant 
        Federal agencies, its advice and comments regarding scientific, 
        technical, and methodological issues specific to the issuance 
        of international offset credits under section 743;
            ``(4) make available to the Administrator, and other 
        relevant Federal agencies, its advice and comments regarding 
        scientific, technical, and methodological issues associated 
        with the implementation of part E;
            ``(5) make available to the Administrator its advice and 
        comments on areas in which further knowledge is required to 
        appraise the adequacy of existing, revised, or proposed 
        methodologies for use under this part and part E, and describe 
        the research efforts necessary to provide the required 
        information; and
            ``(6) make available to the Administrator its advice and 
        comments on other ways to improve or safeguard the 
        environmental integrity of programs established under this part 
        and part E.
    ``(d) Scientific Review of Offset and Deforestation Reduction 
Programs.--Not later than January 1, 2017, and at five-year intervals 
thereafter, the Advisory Board shall submit to the Administrator and 
make available to the public an analysis of relevant scientific and 
technical information related to this part and part E. The Advisory 
Board shall review approved and potential methodologies, scientific 
studies, offset project monitoring, offset project verification 
reports, and audits related to this part and part E, and evaluate the 
net emissions effects of implemented offset projects. The Advisory 
Board shall recommend changes to offset methodologies, protocols, or 
project types, or to the overall offset program under this part, to 
ensure that offset credits issued by the Administrator do not 
compromise the integrity of the annual emission reductions established 
under section 703, and to avoid or minimize adverse effects to human 
health or the environment.

``SEC. 732. ESTABLISHMENT OF OFFSETS PROGRAM.

    ``(a) Regulations.--Not later than 2 years after the date of 
enactment of this title, the Administrator, in consultation with 
appropriate Federal agencies and taking into consideration the 
recommendations of the Advisory Board, shall promulgate regulations 
establishing a program for the issuance of offset credits in accordance 
with the requirements of this part. The Administrator shall 
periodically revise these regulations as necessary to meet the 
requirements of this part.
    ``(b) Requirements.--The regulations described in subsection (a) 
shall--
            ``(1) authorize the issuance of offset credits with respect 
        to qualifying offset projects that result in reductions or 
        avoidance of greenhouse gas emissions, or sequestration of 
        greenhouse gases;
            ``(2) ensure that such offset credits represent verifiable 
        and additional greenhouse gas emission reductions or avoidance, 
        or increases in sequestration;
            ``(3) ensure that offset credits issued for sequestration 
        offset projects are only issued for greenhouse gas reductions 
        that are permanent;
            ``(4) provide for the implementation of the requirements of 
        this part; and
            ``(5) include as reductions in greenhouse gases reductions 
        achieved through the destruction of methane and its conversion 
        to carbon dioxide.
    ``(c) Coordination to Minimize Negative Effects.--In promulgating 
and implementing regulations under this part, the Administrator shall 
act (including by rejecting projects, if necessary) to avoid or 
minimize, to the maximum extent practicable, adverse effects on human 
health or the environment resulting from the implementation of offset 
projects under this part.
    ``(d) Offset Registry.--The Administrator shall establish within 
the allowance tracking system established under section 724(d) an 
Offset Registry for qualifying offset projects and offset credits 
issued with respect thereto under this part.
    ``(e) Legal Status of Offset Credit.--An offset credit does not 
constitute a property right.
    ``(f) Fees.--The Administrator shall assess fees payable by offset 
project developer in an amount necessary to cover the administrative 
costs to the Environmental Protection Agency of carrying out the 
activities under this part. Amounts collected for such fees shall be 
available to the Administrator for carrying out the activities under 
this part to the extent provided in advance in appropriations Acts.

``SEC. 733. ELIGIBLE PROJECT TYPES.

    ``(a) List of Eligible Project Types.--
            ``(1) In general.--As part of the regulations promulgated 
        under section 732(a), the Administrator shall establish, and 
        may periodically revise, a list of types of projects eligible 
        to generate offset credits, including international offset 
        credits, under this part.
            ``(2) Advisory board recommendations.--In determining the 
        eligibility of project types, the Administrator shall take into 
        consideration the recommendations of the Advisory Board. If a 
        list established under this section differs from the 
        recommendations of the Advisory Board, the regulations 
        promulgated under section 732(a) shall include a justification 
        for the discrepancy.
            ``(3) Initial determination.--The Administrator shall 
        establish the initial eligibility list under paragraph (1) not 
        later than one year after the date of enactment of this title. 
        The Administrator shall add additional project types to the 
        list not later than 2 years after the date of enactment of this 
        title. In determining the initial list, the Administrator shall 
        give priority to consideration of offset project types that are 
        recommended by the Advisory Board and for which there are well 
        developed methodologies that the Administrator determines would 
        meet the criteria of section 734, with such modifications as 
        the Administrator deems appropriate. In issuing methodologies 
        pursuant to section 734, the Administrator shall give priority 
        to methodologies for offset types included on the initial 
        eligibility list.
    ``(b) Modification of List.--The Administrator--
            ``(1) may at any time, by rule, add a project type to the 
        list established under subsection (a) if the Administrator, in 
        consultation with appropriate Federal agencies and taking into 
        consideration the recommendations of the Advisory Board, 
        determines that the project type can generate additional 
        reductions or avoidance of greenhouse gas emissions, or 
        sequestration of greenhouse gases, subject to the requirements 
        of this part;
            ``(2) may at any time, by rule, determine that a project 
        type on the list does not generate additional reductions or 
        avoidance of greenhouse gas emissions, or sequestration of 
        greenhouse gases, subject to the requirements of this part, and 
        remove a project type from the list established under 
        subsection (a), in consultation with appropriate Federal 
        agencies and taking into consideration the recommendations of 
        the Advisory Board; and
            ``(3) shall consider adding to or removing from the list 
        established under subsection (a), at a minimum, project types 
        proposed to the Administrator--
                    ``(A) by petition pursuant to subsection (c); or
                    ``(B) by the Advisory Board.
    ``(c) Petition Process.--Any person may petition the Administrator 
to modify the list established under subsection (a) by adding or 
removing a project type pursuant to subsection (b). Any such petition 
shall include a showing by the petitioner that there is adequate data 
to establish that the project type does or does not meet the 
requirements of this part. Not later than 12 months after receipt of 
such a petition, the Administrator shall either grant or deny the 
petition and publish a written explanation of the reasons for the 
Administrator's decision. The Administrator may not deny a petition 
under this subsection on the basis of inadequate Environmental 
Protection Agency resources or time for review.

``SEC. 734. REQUIREMENTS FOR OFFSET PROJECTS.

    ``(a) Methodologies.--As part of the regulations promulgated under 
section 732(a), the Administrator shall establish, for each type of 
offset project listed as eligible under section 733, the following:
            ``(1) Additionality.--A standardized methodology for 
        determining the additionality of greenhouse gas emission 
        reductions or avoidance, or greenhouse gas sequestration, 
        achieved by an offset project of that type. Such methodology 
        shall ensure, at a minimum, that any greenhouse gas emission 
        reduction or avoidance, or any greenhouse gas sequestration, is 
        considered additional only to the extent that it results from 
        activities that--
                    ``(A) are not required by or undertaken to comply 
                with any law, including any regulation or consent 
                order;
                    ``(B) were not commenced prior to January 1, 2009, 
                except for offset project activities that commenced 
                after January 1, 2001, and were registered as of the 
                date of enactment of this title under an offset program 
                with respect to which the Administrator has made an 
                affirmative determination under section 740(a)(2);
                    ``(C) are not receiving support under part E of 
                this title or title IV, subtitle D of the American 
                Clean Energy and Security Act of 2009; and
                    ``(D) exceed the activity baseline established 
                under paragraph (2).
            ``(2) Activity baselines.--A standardized methodology for 
        establishing activity baselines for offset projects of that 
        type. The Administrator shall set activity baselines to reflect 
        a conservative estimate of business-as-usual performance or 
        practices for the relevant type of activity such that the 
        baseline provides an adequate margin of safety to ensure the 
        environmental integrity of offsets calculated in reference to 
        such baseline.
            ``(3) Quantification methods.--A standardized methodology 
        for determining the extent to which greenhouse gas emission 
        reductions or avoidance, or greenhouse gas sequestration, 
        achieved by an offset project of that type exceed a relevant 
        activity baseline, including protocols for monitoring and 
        accounting for uncertainty.
            ``(4) Leakage.--A standardized methodology for accounting 
        for and mitigating potential leakage, if any, from an offset 
        project of that type, taking uncertainty into account.
    ``(b) Accounting for Reversals.--
            ``(1) In general.--For each type of sequestration project 
        listed under section 733, the Administrator shall establish 
        requirements to account for and address reversals, including--
                    ``(A) a requirement to report any reversal with 
                respect to an offset project for which offset credits 
                have been issued under this part;
                    ``(B) provisions to require emission allowances to 
                be held in amounts to fully compensate for greenhouse 
                gas emissions attributable to reversals, and to assign 
                responsibility for holding such emission allowances; 
                and
                    ``(C) any other provisions the Administrator 
                determines necessary to account for and address 
                reversals.
            ``(2) Mechanisms.--The Administrator shall prescribe 
        mechanisms to ensure that any sequestration with respect to 
        which an offset credit is issued under this part results in a 
        permanent net increase in sequestration, and that full account 
        is taken of any actual or potential reversal of such 
        sequestration, with an adequate margin of safety. The 
        Administrator shall prescribe at least one of the following 
        mechanisms to meet the requirements of this paragraph:
                    ``(A) An offsets reserve, pursuant to paragraph 
                (3).
                    ``(B) Insurance that provides for purchase and 
                provision to the Administrator for retirement of an 
                amount of offset credits or emission allowances equal 
                in number to the tons of carbon dioxide equivalents of 
                greenhouse gas emissions released due to reversal.
                    ``(C) Another mechanism that the Administrator 
                determines satisfies the requirements of this part.
            ``(3) Offsets reserve.--
                    ``(A) In general.--An offsets reserve referred to 
                in paragraph (2)(A) is a program under which, before 
                issuance of offset credits under this part, the 
                Administrator shall subtract and reserve from the 
                quantity to be issued a quantity of offset credits 
                based on the risk of reversal. The Administrator 
                shall--
                            ``(i) hold these reserved offset credits in 
                        the offsets reserve; and
                            ``(ii) register the holding of the reserved 
                        offset credits in the Offset Registry 
                        established under section 732(d).
                    ``(B) Project reversal.--
                            ``(i) In general.--If a reversal has 
                        occurred with respect an offset project for 
                        which offset credits are reserved under this 
                        paragraph, the Administrator shall remove 
                        offset credits from the offsets reserve and 
                        cancel them to fully account for the tons of 
                        carbon dioxide equivalent that are no longer 
                        sequestered.
                            ``(ii) Intentional reversals.--If the 
                        Administrator determines that a reversal was 
                        intentional, the offset project developer for 
                        the relevant offset project shall place into 
                        the offsets reserve a quantity of offset 
                        credits, or combination of offset credits and 
                        emission allowances, equal in number to the 
                        number of reserve offset credits that were 
                        canceled due to the reversal pursuant to clause 
                        (i).
                            ``(iii) Unintentional reversals.--If the 
                        Administrator determines that a reversal was 
                        unintentional, the offset project developer for 
                        the relevant offset project shall place into 
                        the offsets reserve a quantity of offset 
                        credits, or combination of offset credits and 
                        emission allowances, equal in number to half 
                        the number of offset credits that were reserved 
                        for that offset project, or half the number of 
                        reserve offset credits that were canceled due 
                        to the reversal pursuant to clause (i), 
                        whichever is less.
                    ``(C) Use of reserved offset credits.--Offset 
                credits placed into the offsets reserve under this 
                paragraph may not be used to comply with section 722.
    ``(c) Crediting Periods.--
            ``(1) In general.--For each offset project type, the 
        Administrator shall specify a crediting period, and establish 
        provisions for petitions for new crediting periods, in 
        accordance with this subsection.
            ``(2) Duration.--The crediting period shall be no less than 
        5 and no greater than 10 years for any project type other than 
        those involving sequestration.
            ``(3) Eligibility.--An offset project shall be eligible to 
        generate offset credits under this part only during the 
        project's crediting period. During such crediting period, the 
        project shall remain eligible to generate offset credits, 
        subject to the methodologies and project type eligibility list 
        that applied as of the date of project approval under section 
        735, except as provided in paragraph (4) of this subsection.
            ``(4) Petition for new crediting period.--An offset project 
        developer may petition for a new crediting period to commence 
        after termination of a crediting period, subject to the 
        methodologies and project type eligibility list in effect at 
        the time when such petition is submitted. A petition may not be 
        submitted under this paragraph more than 18 months before the 
        end of the pending crediting period. The Administrator may 
        limit the number of new crediting periods available for 
        projects of particular project types.
    ``(d) Environmental Integrity.--In establishing the requirements 
under this section, the Administrator shall apply conservative 
assumptions or methods to maximize the certainty that the environmental 
integrity of the cap established under section 703 is not compromised.
    ``(e) Pre-Existing Methodologies.--In promulgating requirements 
under this section, the Administrator shall give due consideration to 
methodologies for offset projects existing as of the date of enactment 
of this title.
    ``(f) Added Project Types.--The Administrator shall establish 
methodologies described in subsection (a), and, as applicable, 
requirements and mechanisms for reversals as described in subsection 
(b), for any project type that is added to the list pursuant to section 
733.

``SEC. 735. APPROVAL OF OFFSET PROJECTS.

    ``(a) Approval Petition.--An offset project developer shall submit 
an offset project approval petition providing such information as the 
Administrator requires to determine whether the offset project is 
eligible for issuance of offset credits under rules promulgated 
pursuant to this part.
    ``(b) Timing.--An approval petition shall be submitted to the 
Administrator under subsection (a) no later than the time at which an 
offset project's first verification report is submitted under section 
736.
    ``(c) Approval Petition Requirements.--As part of the regulations 
promulgated under section 732, the Administrator shall include 
provisions for, and shall specify, the required components of an offset 
project approval petition required under subsection (a), which shall 
include--
            ``(1) designation of an offset project developer; and
            ``(2) any other information that the Administrator 
        considers to be necessary to achieve the purposes of this part.
    ``(d) Approval and Notification.--Not later than 90 days after 
receiving a complete approval petition under subsection (a), the 
Administrator shall approve or deny the petition in writing and, if the 
petition is denied, provide the reasons for denial. After an offset 
project is approved, the offset project developer shall not be required 
to resubmit an approval petition during the offset project's crediting 
period, except as provided in section 734(c)(4).
    ``(e) Appeal.--The Administrator shall establish procedures for 
appeal and review of determinations made under subsection (d).
    ``(f) Voluntary Preapproval Review.--The Administrator may 
establish a voluntary preapproval review procedure, to allow an offset 
project developer to request the Administrator to conduct a preliminary 
eligibility review for an offset project. Findings of such reviews 
shall not be binding upon the Administrator. The voluntary preapproval 
review procedure--
            ``(1) shall require the offset project developer to submit 
        such basic project information as the Administrator requires to 
        provide a meaningful review; and
            ``(2) shall require a response from the Administrator not 
        later than 6 weeks after receiving a request for review under 
        this subsection.

``SEC. 736. VERIFICATION OF OFFSET PROJECTS.

    ``(a) In General.--As part of the regulations promulgated under 
section 732(a), the Administrator shall establish requirements, 
including protocols, for verification of the quantity of greenhouse gas 
emission reductions or avoidance, or sequestration of greenhouse gases, 
resulting from an offset project. The regulations shall require that an 
offset project developer shall submit a report, prepared by a third-
party verifier accredited under subsection (d), providing such 
information as the Administrator requires to determine the quantity of 
greenhouse gas emission reductions or avoidance, or sequestration of 
greenhouse gas, resulting from the offset project.
    ``(b) Schedule.--The Administrator shall prescribe a schedule for 
the submission of verification reports under subsection (a).
    ``(c) Verification Report Requirements.--The Administrator shall 
specify the required components of a verification report required under 
subsection (a), which shall include--
            ``(1) the name and contact information for a designated 
        representative for the offset project developer;
            ``(2) the quantity of greenhouse gas reduced, avoided, or 
        sequestered;
            ``(3) the methodologies applicable to the project pursuant 
        to section 734;
            ``(4) a certification that the project meets the applicable 
        requirements;
            ``(5) a certification establishing that the conflict of 
        interest requirements in the regulations promulgated under 
        subsection (d)(1) have been complied with; and
            ``(6) any other information that the Administrator 
        considers to be necessary to achieve the purposes of this part.
    ``(d) Verifier Accreditation.--
            ``(1) In general.--As part of the regulations promulgated 
        under section 732(a), the Administrator shall establish a 
        process and requirements for periodic accreditation of third-
        party verifiers to ensure that such verifiers are 
        professionally qualified and have no conflicts of interest.
            ``(2) Standards.--
                    ``(A) American national standards institute 
                accreditation.--The Administrator may accredit, or 
                accept for purposes of accreditation under this 
                subsection, verifiers accredited under the American 
                National Standards Institute (ANSI) accreditation 
                program in accordance with ISO 14065. The Administrator 
                shall accredit, or accept for accreditation, verifiers 
                under this subparagraph only if the Administrator finds 
                that the American National Standards Institute 
                accreditation program provides sufficient assurance 
                that the requirements of this part will be met.
                    ``(B) EPA accreditation.--As part of the 
                regulations promulgated under section 732(a), the 
                Administrator may establish accreditation standards for 
                verifiers under this subsection, and may establish 
                related training and testing programs and requirements.
            ``(3) Public accessibility.--Each verifier meeting the 
        requirements for accreditation in accordance with this 
        subsection shall be listed in a publicly accessible database, 
        which shall be maintained and updated by the Administrator.

``SEC. 737. ISSUANCE OF OFFSET CREDITS.

    ``(a) Determination and Notification.--Not later than 90 days after 
receiving a complete verification report under section 736, the 
Administrator shall--
            ``(1) make the report publicly available;
            ``(2) make a determination of the quantity of greenhouse 
        gas emissions reduced or avoided, or greenhouse gases 
        sequestered, resulting from an offset project approved under 
        section 735; and
            ``(3) notify the offset project developer in writing of 
        such determination.
    ``(b) Issuance of Offset Credits.--The Administrator shall issue 
one offset credit to an offset project developer for each ton of carbon 
dioxide equivalent that the Administrator has determined has been 
reduced, avoided, or sequestered during the period covered by a 
verification report submitted in accordance with section 736, only if--
            ``(1) the Administrator has approved the offset project 
        pursuant to section 735; and
            ``(2) the relevant emissions reduction, avoidance, or 
        sequestration has already occurred, during the offset project's 
        crediting period.
    ``(c) Appeal.--The Administrator shall establish procedures for 
appeal and review of determinations made under subsection (a).
    ``(d) Timing.--Offset credits meeting the criteria established in 
subsection (b) shall be issued not later than 2 weeks following the 
verification determination made by the Administrator under subsection 
(a).
    ``(e) Registration.--The Administrator shall assign a unique serial 
number to and register each offset credit to be issued in the Offset 
Registry established under section 732(d).

``SEC. 738. AUDITS.

    ``(a) In General.--The Administrator shall, on an ongoing basis, 
conduct random audits of offset projects, offset credits, and practices 
of third-party verifiers. In each year, the Administrator shall conduct 
audits, at minimum, for a representative sample of project types and 
geographic areas.
    ``(b) Delegation.--The Administrator may delegate to a State or 
tribal government the responsibility for conducting audits under this 
section if the Administrator finds that the program proposed by the 
State or tribal government provides assurances equivalent to those 
provided by the auditing program of the Administrator, and that the 
integrity of the offset program under this part will be maintained. 
Nothing in this subsection shall prevent the Administrator from 
conducting any audit the Administrator considers necessary and 
appropriate.

``SEC. 739. PROGRAM REVIEW AND REVISION.

    ``At least once every 5 years, the Administrator shall review and, 
based on new or updated information and taking into consideration the 
recommendations of the Advisory Board, update and revise--
            ``(1) the list of eligible project types established under 
        section 733;
            ``(2) the methodologies established, including specific 
        activity baselines, under section 734(a);
            ``(3) the reversal requirements and mechanisms established 
        or prescribed under section 734(b);
            ``(4) measures to improve the accountability of the offsets 
        program; and
            ``(5) any other requirements established under this part to 
        ensure the environmental integrity and effective operation of 
        this part.

``SEC. 740. EARLY OFFSET SUPPLY.

    ``(a) Projects Registered Under Other Government-Recognized 
Programs.--Except as provided in subsection (b) or (c), the 
Administrator shall issue one offset credit for each ton of carbon 
dioxide equivalent emissions reduced, avoided, or sequestered--
            ``(1) under an offset project that was started after 
        January 1, 2001;
            ``(2) for which a credit was issued under any regulatory or 
        voluntary greenhouse gas emission offset program that the 
        Administrator determines--
                    ``(A) was established under State or tribal law or 
                regulation prior to January 1, 2009;
                    ``(B) has developed offset project type standards, 
                methodologies, and protocols through a public 
                consultation process or a peer review process;
                    ``(C) has made available to the public standards, 
                methodologies, and protocols that require that credited 
                emission reductions, avoidance, or sequestration are 
                permanent, additional, verifiable, and enforceable;
                    ``(D) requires that all emission reductions, 
                avoidance, or sequestration be verified by a State 
                regulatory agency or an accredited third-party 
                independent verification body;
                    ``(E) requires that all credits issued are 
                registered in a publicly accessible registry, with 
                individual serial numbers assigned for each ton of 
                carbon dioxide equivalent emission reductions, 
                avoidance, or sequestration; and
                    ``(F) ensures that no credits are issued for 
                activities for which the entity administering the 
                program, or a program administrator or representative, 
                has funded, solicited, or served as a fund 
                administrator for the development of, the project or 
                activity that caused the emission reduction, avoidance, 
                or sequestration; and
            ``(3) for which the credit described in paragraph (2) is 
        transferred to the Administrator.
    ``(b) Ineligible Credits.--Subsection (a) shall not apply to offset 
credits that have expired or have been retired, canceled, or used for 
compliance under a program established under State or tribal law or 
regulation.
    ``(c) Limitation.--Notwithstanding subsection (a)(1), offset 
credits shall be issued under this section--
            ``(1) only for reductions or avoidance of greenhouse gas 
        emissions, or sequestration of greenhouse gases, that occur 
        after January 1, 2009; and
            ``(2) only until the date that is 3 years after the date of 
        enactment of this title, or the date that regulations 
        promulgated under section 732(a) take effect, whichever occurs 
        sooner.
    ``(d) Retirement of Credits.--The Administrator shall seek to 
ensure that offset credits described in subsection (a)(2) are retired 
for purposes of use under a program described in subsection (b).
    ``(e) Other Programs.--(1) Offset programs that otherwise meet all 
of the criteria of subsection (a)(2), but do not meet one of the 
following criteria:
            ``(A) were not established under State or tribal law; or
            ``(B) were not established prior to January 1, 2001.
    ``(2) The Administrator shall approve any such program that the 
Administrator determines has criteria and methodologies of at least 
equal stringency to the criteria and methodologies of the programs 
established under State or tribal law that the Administrator determines 
meet the criteria of subsection (a)(2). The Administrator may approve 
types of offsets under any such program that are subject to criteria 
and methodologies of at least equal stringency to the criteria and 
methodologies for such types of offsets applied under the programs 
established under State or tribal law that the Administrator determines 
meet the criteria of subsection (a)(2).

``SEC. 741. ENVIRONMENTAL CONSIDERATIONS.

    ``If the Administrator lists forestry projects as eligible offset 
project types under section 733, the Administrator, in consultation 
with appropriate Federal agencies, shall promulgate regulations for the 
selection and use of tree species in forestry offset projects--
            ``(1) to ensure that native species are given primary 
        consideration in such projects;
            ``(2) to enhance biological diversity in such projects;
            ``(3) to prohibit the use of federally designated or State-
        designated noxious weeds;
            ``(4) to prohibit the use of a species listed by a regional 
        or State invasive plant authority within the applicable region 
        or State; and
            ``(5) in accordance with widely accepted, environmentally 
        sustainable forestry practices.

``SEC. 742. TRADING.

    ``Section 724 shall apply to the trading of offset credits.

``SEC. 743. INTERNATIONAL OFFSET CREDITS.

    ``(a) In General.--The Administrator, in consultation with the 
Secretary of State and the Administrator of the United States Agency 
for International Development, may issue, in accordance with this 
section, international offset credits based on activities that reduce 
or avoid greenhouse gas emissions, or increase sequestration of 
greenhouse gases, in a developing country. Such credits may be issued 
for projects pursuant to the requirements of this part or as provided 
in subsection (c), (d), or (e).
    ``(b) Issuance.--
            ``(1) Regulations.--Not later than 2 years after the date 
        of enactment of this title, the Administrator, in consultation 
        with the Secretary of State, the Administrator of the United 
        States Agency for International Development, and any other 
        appropriate Federal agency, and taking into consideration the 
        recommendations of the Advisory Board, shall promulgate 
        regulations for implementing this section. Except as otherwise 
        provided in this section, the issuance of international offset 
        credits under this section shall be subject to the requirements 
        of this part.
            ``(2) Requirements for international offset credits.--The 
        Administrator may issue international offset credits only if--
                    ``(A) the United States is a party to a bilateral 
                or multilateral agreement or arrangement that includes 
                the country in which the project or measure achieving 
                the relevant greenhouse gas emission reduction or 
                avoidance, or greenhouse gas sequestration, has 
                occurred;
                    ``(B) such country is a developing country; and
                    ``(C) such agreement or arrangement--
                            ``(i) ensures that all of the requirements 
                        of this part apply to the issuance of 
                        international offset credits under this 
                        section; and
                            ``(ii) provides for the appropriate 
                        distribution of international offset credits 
                        issued.
    ``(c) Sector-Based Credits.--
            ``(1) In general.--In order to minimize the potential for 
        leakage and to encourage countries to take nationally 
        appropriate mitigation actions to reduce or avoid greenhouse 
        gas emissions, or sequester greenhouse gases, the 
        Administrator, in consultation with the Secretary of State, 
        shall--
                    ``(A) identify sectors of specific countries with 
                respect to which the issuance of international offset 
                credits on a sectoral basis is appropriate; and
                    ``(B) issue international offset credits for such 
                sectors only on a sectoral basis.
            ``(2) Identification of sectors.--
                    ``(A) General rule.--For purposes of paragraph 
                (1)(A), a sectoral basis shall be appropriate for 
                activities--
                            ``(i) in countries that have comparatively 
                        high greenhouse gas emissions, or comparatively 
                        greater levels of economic development; and
                            ``(ii) that, if located in the United 
                        States, would be within a sector subject to the 
                        compliance obligation under section 722.
                    ``(B) Factors.--In determining the sectors and 
                countries for which international offset credits should 
                be awarded only on a sectoral basis, the Administrator, 
                in consultation with the Secretary of State, shall 
                consider the following factors:
                            ``(i) The country's gross domestic product.
                            ``(ii) The country's total greenhouse gas 
                        emissions.
                            ``(iii) Whether the comparable sector of 
                        the United States economy is covered by the 
                        compliance obligation under section 722.
                            ``(iv) The heterogeneity or homogeneity of 
                        sources within the relevant sector.
                            ``(v) Whether the relevant sector provides 
                        products or services that are sold in 
                        internationally competitive markets.
                            ``(vi) The risk of leakage if international 
                        offset credits were issued on a project-level 
                        basis, instead of on a sectoral basis, for 
                        activities within the relevant sector.
                            ``(vii) The capability of accurately 
                        measuring, monitoring, reporting, and verifying 
                        the performance of sources across the relevant 
                        sector.
                            ``(viii) Such other factors as the 
                        Administrator, in consultation with the 
                        Secretary of State, determines are appropriate 
                        to--
                                    ``(I) ensure the integrity of the 
                                United States greenhouse gas emissions 
                                cap established under section 703; and
                                    ``(II) encourage countries to take 
                                nationally appropriate mitigation 
                                actions to reduce or avoid greenhouse 
                                gas emissions, or sequester greenhouse 
                                gases.
            ``(3) Sectoral basis.--
                    ``(A) Definition.--In this subsection, the term 
                `sectoral basis' means the issuance international 
                offset credits only for the quantity of sector-wide 
                reductions or avoidance of greenhouse gas emissions, or 
                sector-wide increases in sequestration of greenhouse 
                gases, achieved across the relevant sector of the 
                economy relative to a baseline level of performance 
                established in an agreement or arrangement described in 
                subsection (b)(2)(A) for the sector.
                    ``(B) Baseline.--The baseline for a sector shall be 
                established at levels of greenhouse gas emissions lower 
                than would occur under a business-as-usual scenario 
                taking into account relevant domestic or international 
                policies or incentives to reduce greenhouse gas 
                emissions, among other factors, and additionality and 
                performance shall be determined on the basis of such 
                baseline.
    ``(d) Credits Issued by an International Body.--
            ``(1) In general.--The Administrator, in consultation with 
        the Secretary of State, may issue international offset credits 
        in exchange for instruments in the nature of offset credits 
        that are issued by an international body established pursuant 
        to the United Nations Framework Convention on Climate Change, 
        to a protocol to such Convention, or to a treaty that succeeds 
        such Convention. The Administrator may issue international 
        offset credits under this subsection only if, in addition to 
        the requirements of subsection (b), the Administrator has 
        determined that the international body that issued the 
        instruments has implemented substantive and procedural 
        requirements for the relevant project type that provide equal 
        or greater assurance of the integrity of such instruments as is 
        provided by the requirements of this part.
            ``(2) Retirement.--The Administrator, in consultation with 
        the Secretary of State, shall seek, by whatever means 
        appropriate, including agreements, arrangements, or technical 
        cooperation with the international issuing body described in 
        paragraph (1), to ensure that such body--
                    ``(A) is notified of the Administrator's issuance, 
                under this subsection, of an international offset 
                credit in exchange for an instrument issued by such 
                international body; and
                    ``(B) provides, to the extent feasible, for the 
                disqualification of the instrument issued by such 
                international body for subsequent use under any 
                relevant foreign or international greenhouse gas 
                regulatory program, regardless of whether such use is a 
                sale, exchange, or submission to satisfy a compliance 
                obligation.
    ``(e) Offsets From Reduced Deforestation.--
            ``(1) Requirements.--The Administrator, in accordance with 
        the regulations promulgated under subsection (b)(1) and an 
        agreement or arrangement described in subsection (b)(2)(A), 
        shall issue international offset credits for greenhouse gas 
        emission reductions achieved through activities to reduce 
        deforestation only if, in addition to the requirements of 
        subsection (b)--
                    ``(A) the activity occurs in--
                            ``(i) a country listed by the Administrator 
                        pursuant to paragraph (2);
                            ``(ii) a state or province listed by the 
                        Administrator pursuant to paragraph (5); or
                            ``(iii) a country listed by the 
                        Administrator pursuant to paragraph (6);
                    ``(B) except as provided in paragraph (5) or (6), 
                the quantity of the international offset credits is 
                determined by comparing the national emissions from 
                deforestation relative to a national deforestation 
                baseline for that country established, in accordance 
                with an agreement or arrangement described in 
                subsection (b)(2)(A), pursuant to paragraph (4);
                    ``(C) the reduction in emissions from deforestation 
                has occurred before the issuance of the international 
                offset credit and, taking into consideration relevant 
                international standards, has been demonstrated using 
                ground-based inventories, remote sensing technology, 
                and other methodologies to ensure that all relevant 
                carbon stocks are accounted;
                    ``(D) the Administrator has made appropriate 
                adjustments, such as discounting for any additional 
                uncertainty, to account for circumstances specific to 
                the country, including its technical capacity described 
                in paragraph (2)(A);
                    ``(E) the activity is designed, carried out, and 
                managed--
                            ``(i) in accordance with widely accepted, 
                        environmentally sustainable forest management 
                        practices;
                            ``(ii) to promote or restore native forest 
                        species and ecosystems where practicable, and 
                        to avoid the introduction of invasive nonnative 
                        species;
                            ``(iii) in a manner that gives due regard 
                        to the rights and interests of forest-dependent 
                        communities, indigenous peoples, and vulnerable 
                        social groups;
                            ``(iv) with consultations with, and full 
                        participation of, forest-dependent communities 
                        and indigenous peoples in affected areas, as 
                        partners and primary stakeholders, prior to and 
                        during the design, planning, implementation, 
                        and monitoring and evaluation of activities; 
                        and
                            ``(v) with equitable sharing of profits and 
                        benefits derived from offset credits with 
                        forest-dependent communities and indigenous 
                        peoples; and
                    ``(F) the reduction otherwise satisfies and is 
                consistent with any relevant requirements established 
                by an agreement reached under the auspices of the 
                United Nations Framework Convention on Climate Change.
            ``(2) Eligible countries.--The Administrator, in 
        consultation with the Secretary of State and the Administrator 
        of the United States Agency for International Development, and 
        in accordance with an agreement or arrangement described in 
        subsection (b)(2)(A), shall establish, and periodically review 
        and update, a list of the developing countries that have the 
        capacity to participate in deforestation reduction activities 
        at a national level, including--
                    ``(A) the technical capacity to monitor, measure, 
                report, and verify forest carbon fluxes for all 
                significant sources of greenhouse gas emissions from 
                deforestation with an acceptable level of uncertainty, 
                as determined taking into account relevant 
                international standards, such as those established by 
                the Intergovernmental Panel on Climate Change;
                    ``(B) the institutional capacity to reduce 
                emissions from deforestation, including strong forest 
                governance and mechanisms to equitably distribute 
                deforestation resources for local actions; and
                    ``(C) a land use or forest sector strategic plan 
                that--
                            ``(i) assesses national and local drivers 
                        of deforestation and forest degradation and 
                        identifies reforms to national policies needed 
                        to address them;
                            ``(ii) estimates the country's emissions 
                        from deforestation and forest degradation;
                            ``(iii) identifies improvements in data 
                        collection, monitoring, and institutional 
                        capacity necessary to implement a national 
                        deforestation reduction program; and
                            ``(iv) establishes a timeline for 
                        implementing the program and transitioning to 
                        low-emissions development.
            ``(3) Protection of interests.--With respect to an 
        agreement or arrangement described in subsection (b)(2)(A) with 
        a country that addresses international offset credits under 
        this subsection, the Administrator, in consultation with the 
        Secretary of State and the Administrator of the United States 
        Agency for International Development, shall seek to ensure the 
        establishment and enforcement by such country of legal regimes, 
        standards, and safeguards that--
                    ``(A) give due regard to the rights and interests 
                of forest-dependent communities, indigenous peoples, 
                and vulnerable social groups;
                    ``(B) promote consultations with, and full 
                participation of, forest-dependent communities and 
                indigenous peoples in affected areas, as partners and 
                primary stakeholders, prior to and during the design, 
                planning, implementation, and monitoring and evaluation 
                of activities; and
                    ``(C) facilitate sharing of profits and benefits 
                derived from international offset credits with forest-
                dependent communities and indigenous peoples.
            ``(4) National deforestation baseline.--A national 
        deforestation baseline established under this subsection 
        shall--
                    ``(A) be national in scope;
                    ``(B) be consistent with nationally appropriate 
                mitigation commitments or actions with respect to 
                deforestation, taking into consideration the average 
                annual historical deforestation rates of the country 
                during a period of at least 5 years, the applicable 
                drivers of deforestation, and other factors to ensure 
                additionality;
                    ``(C) establish a trajectory that would result in 
                zero net deforestation by not later than 20 years after 
                the national deforestation baseline has been 
                established;
                    ``(D) be adjusted over time to take account of 
                changing national circumstances;
                    ``(E) be designed to account for all significant 
                sources of greenhouse gas emissions from deforestation 
                in the country; and
                    ``(F) be consistent with the national deforestation 
                baseline, if any, established for such country under 
                section 754(d)(1).
            ``(5) State-level or province-level activities.--
                    ``(A) Eligible states or provinces.--The 
                Administrator, in consultation with the Secretary of 
                State and the Administrator of the United States Agency 
                for International Development, shall establish, and 
                periodically review and update, a list of states or 
                provinces in developing countries where--
                            ``(i) the developing country is not 
                        included on the list of countries established 
                        pursuant to paragraph (6)(A);
                            ``(ii) the state or province by itself is a 
                        major emitter of greenhouse gases from tropical 
                        deforestation on a scale commensurate to the 
                        emissions of other countries; and
                            ``(iii) the state or province meets the 
                        eligibility criteria in paragraphs (2) and (3) 
                        for the geographic area under its jurisdiction.
                    ``(B) Activities.--The Administrator may issue 
                international offset credits for greenhouse gas 
                emission reductions achieved through activities to 
                reduce deforestation at a state or provincial level 
                that meet the requirements of this section. Such 
                credits shall be determined by comparing the emissions 
                from deforestation within that state or province 
                relative to the state or province deforestation 
                baseline for that state or province established, in 
                accordance with an agreement or arrangement described 
                in subsection (b)(2)(A), pursuant to subparagraph (C) 
                of this paragraph.
                    ``(C) State-level or province-level deforestation 
                baseline.--A state-level or province-level 
                deforestation baseline shall--
                            ``(i) be consistent with any existing 
                        nationally appropriate mitigation commitments 
                        or actions for the country in which the 
                        activity is occurring, taking into 
                        consideration the average annual historical 
                        deforestation rates of the state or province 
                        during a period of at least 5 years, relevant 
                        drivers of deforestation, and other factors to 
                        ensure additionality;
                            ``(ii) establish a trajectory that would 
                        result in zero net deforestation by not later 
                        than 20 years after the state-level or 
                        province-level deforestation baseline has been 
                        established; and
                            ``(iii) be designed to account for all 
                        significant sources of greenhouse gas emissions 
                        from deforestation in the state or province and 
                        adjusted to fully account for emissions leakage 
                        outside the state or province.
                    ``(D) Phase out.--Beginning in 2017, the 
                Administrator shall issue no further international 
                offset credits for eligible state-level or province-
                level activities to reduce deforestation pursuant to 
                this paragraph.
            ``(6) Projects and programs to reduce deforestation.--
                    ``(A) Eligible countries.--The Administrator, in 
                consultation with the Secretary of State and the 
                Administrator of the United States Agency for 
                International Development, shall establish, and 
                periodically review and update, a list of developing 
                countries that--
                            ``(i) the Administrator determines, based 
                        on recent, credible, and reliable emissions 
                        data, account for less than 1 percent of global 
                        greenhouse gas emissions and less than 3 
                        percent of global forest-sector and land use 
                        change greenhouse gas emissions; and
                            ``(ii) have, or in the determination of the 
                        Administrator are making a good faith effort to 
                        develop, a land use or forest sector strategic 
                        plan that meets the criteria described in 
                        paragraph (2)(C).
                    ``(B) Activities.--The Administrator may issue 
                international offset credits for greenhouse gas 
                emission reductions achieved through project or program 
                level activities to reduce deforestation in countries 
                listed under subparagraph (A) that meet the 
                requirements of this section. The quantity of 
                international offset credits shall be determined by 
                comparing the project-level or program-level emissions 
                from deforestation to a deforestation baseline for such 
                project or program established pursuant to subparagraph 
                (C).
                    ``(C) Project-level or program-level baseline.--
                            ``(i) A project-level or program-level 
                        deforestation baseline shall--
                                    ``(I) be consistent with any 
                                existing nationally appropriate 
                                mitigation commitments or actions for 
                                the country in which the project or 
                                program is occurring, taking into 
                                consideration the average annual 
                                historical deforestation rates in the 
                                project or program boundary during a 
                                period of at least 5 years, applicable 
                                drivers of deforestation, and other 
                                factors to ensure additionality;
                                    ``(II) be designed to account for 
                                all significant sources of greenhouse 
                                gas emissions from deforestation in the 
                                project or program boundary; and
                                    ``(III) be adjusted to fully 
                                account for emissions leakage outside 
                                the project or program boundary.
                    ``(D) Phase out.--(i) Beginning in 2017, the 
                Administrator shall issue no further international 
                offset credits for project-level or program-level 
                activities as described in this paragraph, except as 
                provided in clause (ii).
                    ``(ii) The Administrator may extend the phase out 
                deadline for the issuance of international offset 
                credits under this section to no later than 2025 with 
                respect to eligible activities taking place in a least 
                developed nation, which is a foreign country that the 
                United Nations has identified as among the least 
                developed of developing countries at the time that the 
                Administrator determines to provide an extension, 
                provided that the Administrator, in consultation with 
                the Secretary of State and the Administrator of the 
                United States Agency for International Development, 
                determines the nation--
                            ``(I) lacks sufficient capacity to adopt 
                        and implement effective programs to achieve 
                        reductions in deforestation measured against 
                        national baselines;
                            ``(II) is receiving support under part E to 
                        develop such capacity; and
                            ``(III) has developed and is working 
                        towards implementation of a credible national 
                        strategy or plan to reduce deforestation.
            ``(7) Deforestation.--In implementing this subsection, the 
        Administrator, taking into consideration the recommendations of 
        the Advisory Board, may include forest degradation, or soil 
        carbon losses associated with forested wetlands or peatlands, 
        within the meaning of deforestation.
    ``(f) Modification of Requirements.--In promulgating regulations 
under subsection (b)(1) with respect to the issuance of international 
offset credits under subsection (c), (d), or (e), the Administrator may 
modify or omit a requirement of this part (excluding the requirements 
of this section) if the Administrator determines that the application 
of that requirement to this subsection is not feasible. In modifying or 
omitting such a requirement on the basis of infeasibility, the 
Administrator shall ensure, with an adequate margin of safety, the 
integrity of international offset credits issued under this section and 
of the greenhouse gas emissions cap established pursuant to section 
703.
    ``(g) Avoiding Double Counting.--The Administrator, in consultation 
with the Secretary of State, shall seek, by whatever means appropriate, 
including agreements, arrangements, or technical cooperation, to ensure 
that activities on the basis of which international offset credits are 
issued under this section are not used for compliance with an 
obligation to reduce or avoid greenhouse gas emissions, or increase 
greenhouse gas sequestration, under a foreign or international 
regulatory system. In addition, no international offset credits shall 
be issued for emission reductions from activities with respect to which 
emission allowances were allocated under section 781 for distribution 
under part E.
    ``(h) Limitation.--The Administrator shall not issue international 
offset credits generated by products based on the destruction of 
hydrofluorocarbons.

 ``PART E--SUPPLEMENTAL EMISSIONS REDUCTIONS FROM REDUCED DEFORESTATION

``SEC. 751. DEFINITIONS.

    ``In this part:
            ``(1) Leakage prevention activities.--The term `leakage 
        prevention activities' means activities in developing countries 
        that are directed at preserving existing forest carbon stocks, 
        including forested wetlands and peatlands, that might, absent 
        such activities, be lost through leakage.
            ``(2) National deforestation reduction activities.--The 
        term `national deforestation reduction activities' means 
        activities in developing countries that reduce a quantity of 
        greenhouse gas emissions from deforestation that is calculated 
        by measuring actual emissions against a national deforestation 
        baseline established pursuant to section 754(d)(1) and (2).
            ``(3) Subnational deforestation reduction activities.--The 
        term `subnational deforestation reduction activities' means 
        activities in developing countries that reduce a quantity of 
        greenhouse gas emissions from deforestation that are calculated 
        by measuring actual emissions using an appropriate baseline 
        established by the Administrator that is less than national in 
        scope.
            ``(4) Supplemental emissions reductions.--The term 
        `supplemental emissions reductions' means greenhouse gas 
        emissions reductions achieved from reduced or avoided 
        deforestation under this part.
            ``(5) USAID.--The term `USAID' means the United States 
        Agency for International Development.

``SEC. 752. FINDINGS.

    ``Congress finds that--
            ``(1) as part of a global effort to mitigate climate 
        change, it is in the national interest of the United States to 
        assist developing countries to reduce and ultimately halt 
        emissions from deforestation;
            ``(2) deforestation is one of the largest sources of 
        greenhouse gas emissions in developing countries, amounting to 
        roughly 20 percent of overall emissions globally;
            ``(3) recent scientific analysis shows that it will be 
        substantially more difficult to limit the increase in global 
        temperatures to less than 2 degrees centigrade above 
        preindustrial levels without reducing and ultimately halting 
        net emissions from deforestation;
            ``(4) reducing emissions from deforestation is highly cost-
        effective, compared to many other sources of emissions 
        reductions;
            ``(5) in addition to contributing significantly to 
        worldwide efforts to address global warming, this assistance 
        will generate significant environmental and social cobenefits, 
        including protection of biodiversity, ecosystem services, and 
        forest-related livelihoods; and
            ``(6) Under the Bali Action Plan, developed country parties 
        to the United Nations Framework Convention on Climate Change, 
        including the United States, committed to `enhanced action on 
        the provision of financial resources and investment to support 
        action on mitigation and adaptation and technology 
        cooperation,' including, inter alia, consideration of improved 
        access to adequate, predictable, and sustainable financial 
        resources and financial and technical support, and the 
        provision of new and additional resources, including official 
        and concessional funding for developing country parties.

``SEC. 753. SUPPLEMENTAL EMISSIONS REDUCTIONS THROUGH REDUCED 
              DEFORESTATION.

    ``(a) Regulations.--Not later than 2 years after the date of 
enactment of this title, the Administrator, in consultation with the 
Administrator of USAID and any other appropriate agencies, shall 
promulgate regulations establishing a program to use emission 
allowances set aside for this purpose under section 781 to achieve the 
reduction of greenhouse gas emissions from deforestation in developing 
countries in accordance with the requirements of this part.
    ``(b) Objectives.--The objectives of the program established under 
this section shall be to--
            ``(1) achieve supplemental emissions reductions of at least 
        720,000,000 tons of carbon dioxide equivalent in 2020, a 
        cumulative amount of at least 6,000,000,000 tons of carbon 
        dioxide equivalent by December 31, 2025, and additional 
        supplemental emissions reductions in subsequent years;
            ``(2) build capacity to reduce deforestation in developing 
        countries experiencing deforestation, including preparing 
        developing countries to participate in international markets 
        for international offset credits for reduced emissions from 
        deforestation; and
            ``(3) preserve existing forest carbon stocks in countries 
        where such forest carbon may be vulnerable to international 
        leakage, particularly in developing countries with largely 
        intact native forests.

``SEC. 754. REQUIREMENTS FOR INTERNATIONAL DEFORESTATION REDUCTION 
              PROGRAM.

    ``(a) Eligible Countries.--The Administrator may support activities 
under this part only with respect to a developing country that--
            ``(1) the Administrator, in consultation with the 
        Administrator of USAID, determines is experiencing 
        deforestation or forest degradation or has standing forest 
        carbon stocks that may be at risk of deforestation or 
        degradation; and
            ``(2) has entered into a bilateral or multilateral 
        agreement or arrangement with the United States establishing 
        the conditions of its participation in the program established 
        under this part, which shall include an agreement to meet the 
        standards established under subsection (d) for the activities 
        to which those standards apply.
    ``(b) Activities.--(1) Subject to the requirements of this part, 
the Administrator, in consultation with the Administrator of USAID, may 
support activities to achieve the objectives identified in section 
753(b), including--
                    ``(A) national deforestation reduction activities;
                    ``(B) subnational deforestation reduction 
                activities, including pilot activities that reduce 
                greenhouse gas emissions but are subject to significant 
                uncertainty;
                    ``(C) activities to measure, monitor, and verify 
                deforestation, avoided deforestation, and deforestation 
                rates;
                    ``(D) leakage prevention activities;
                    ``(E) development of measurement, monitoring, and 
                verification capacities to enable a country to quantify 
                supplemental emissions reductions and to generate for 
                sale offset credits from reduced or avoided 
                deforestation;
                    ``(F) development of governance structures to 
                reduce deforestation and illegal logging;
                    ``(G) enforcement of requirements for reduced 
                deforestation or forest conservation;
                    ``(H) efforts to combat illegal logging and 
                increase enforcement cooperation;
                    ``(I) providing incentives for policy reforms to 
                achieve the objectives identified in section 753(b); 
                and
                    ``(J) monitoring and evaluation of the results of 
                the activities conducted under this section.
            ``(2) Activities selected by usaid.--
                    ``(A) The Administrator of USAID, in consultation 
                with the Administrator, may select for support and 
                implementation pursuant to subsection (c) any of the 
                activities described in paragraph (1), consistent with 
                this part and the regulations promulgated under 
                subsection (d), and subject to the requirement to 
                achieve the objectives listed in section 753(b)(1).
                    ``(B) With respect to the activities listed in 
                subparagraphs (iv) through (x) of this section, the 
                Administrator of USAID, in consultation with the 
                Administrator, shall have primary but not exclusive 
                responsibility for selecting the activities to be 
                supported and implemented.
            ``(3) Interagency coordination.--The Administrator and the 
        Administrator of USAID shall jointly develop and biennially 
        update a strategic plan for meeting the objectives listed in 
        section 753(b) and shall execute a memorandum of understanding 
        delineating the agencies' respective roles in implementing this 
        part.
    ``(c) Mechanisms.--
            ``(1) In general.--The Administrator may support activities 
        to achieve the objectives identified in section 753(b) by--
                    ``(A) developing and implementing programs and 
                projects that achieve such objectives; and
                    ``(B) distributing emission allowances to a country 
                that is eligible under subsection (a), to any private 
                or public group (including international 
                organizations), or to an international fund established 
                by an international agreement to which the United 
                States is a party, to carry out activities to achieve 
                such objectives.
            ``(2) Usaid activities.--With respect to activities 
        selected and implemented by the Administrator of USAID pursuant 
        to (b)(2), the Administrator shall distribute emission 
        allowances as provided in subparagraph (1) based upon the 
        direction of the Administrator of USAID, subject to the 
        availability of allowances for such activities.
            ``(3) Implementation through international organizations.--
        If support is distributed through an international 
        organization, the agency responsible for selecting activities 
        in accordance with subparagraph (b)(1) or (2), in consultation 
        with the Secretary of State, shall ensure the establishment and 
        implementation of adequate mechanisms to apply and enforce the 
        eligibility requirements and other requirements of this 
        section.
            ``(4) Role of the secretary of state.--The Administrator 
        may not distribute emission allowances to the government of 
        another country or to an international organization or 
        international fund unless the Secretary of State has concurred 
        with such distribution.
    ``(d) Standards.--The Administrator, in consultation with the 
Administrator of USAID, shall promulgate standards to ensure that 
supplemental emissions reductions achieved through supported activities 
are additional, measurable, verifiable, permanent, monitored, and 
account for leakage and uncertainty. In addition, such standards 
shall--
            ``(1) require the establishment of a national deforestation 
        baseline for each country with national deforestation reduction 
        activities that is used to account for reductions achieved from 
        such activities;
            ``(2) provide that a national deforestation baseline 
        established under paragraph (1) shall--
                    ``(A) be national in scope;
                    ``(B) be consistent with nationally appropriate 
                mitigation commitments or actions with respect to 
                deforestation, taking into consideration the average 
                annual historical deforestation rates of the country 
                during a period of at least 5 years and other factors 
                to ensure additionality;
                    ``(C) establish a trajectory that would result in 
                zero net deforestation by not later than 20 years from 
                the date the baseline is established;
                    ``(D) be adjusted over time to take account of 
                changing national circumstances;
                    ``(E) be designed to account for all significant 
                sources of greenhouse gas emissions from deforestation 
                in the country; and
                    ``(F) be consistent with the national deforestation 
                baseline, if any, established for such country under 
                section 743(e)(4);
            ``(3) with respect to support provided pursuant to 
        subsection (b)(1) or (2), require supplemental emissions 
        reductions to be achieved and verified prior to compensation 
        through the distribution of emission allowances under this 
        part;
            ``(4) with respect to accounting for subnational 
        deforestation reduction activities that lack the standardized 
        or precise measurement and monitoring techniques needed for a 
        full accounting of changes in emissions or baselines, or are 
        subject to other sources of uncertainty, apply a conservative 
        discount factor to reflect the uncertainty regarding the levels 
        of reductions achieved;
            ``(5) ensure that activities under this part shall be 
        designed, carried out, and managed--
                    ``(A) in accordance with widely accepted, 
                environmentally sustainable forestry practices; and
                    ``(B) to promote native species and conservation or 
                restoration of native forests, if practicable, and to 
                avoid the introduction of invasive nonnative species; 
                and
            ``(6) with respect to support for all activities under this 
        part, seek to ensure the establishment and enforcement by the 
        recipient country of legal regimes, standards, and safeguards 
        that--
                    ``(A) give due regard to the rights and interests 
                of local communities, indigenous and forest-dependent 
                peoples, and vulnerable social groups;
                    ``(B) promote consultations with local communities 
                and indigenous and forest-dependent peoples in affected 
                areas, as partners and primary stakeholders, prior to 
                and during the design, planning, implementation, 
                monitoring, and evaluation of activities under this 
                part; and
                    ``(C) encourage sharing of profits from incentives 
                for emissions reductions or leakage prevention with 
                local communities and indigenous and forest-dependent 
                peoples.
    ``(e) Expansion of Scope.--The Administrator, in consultation with 
the Administrator of USAID, may decide, taking into account any advice 
from the Advisory Board, to expand, where appropriate, the scope of 
activities under this part to include--
            ``(1) reduced emissions from forest degradation; or
            ``(2) reduced soil carbon-derived emissions associated with 
        deforestation and degradation of forested wetlands and 
        peatlands.
    ``(f) Accounting.--The Administrator shall establish a publicly 
accessible registry of the supplemental emissions reductions achieved 
through support provided under this part each year, after appropriately 
discounting for uncertainty and other relevant factors as required by 
the standards established under subsection (d).
    ``(g) Transition to National Reductions.--Beginning 5 years after 
the date that a country entered into the agreement or arrangement 
required under subsection (a)(2), the Administrator shall provide no 
further compensation through emission allowances to that country under 
this part for any subnational deforestation reduction activities, 
except that the Administrator may extend this period by an additional 5 
years if the Administrator, in consultation with the Administrator of 
USAID, determines that--
            ``(1) the country is making substantial progress towards 
        adopting and implementing a program to achieve reductions in 
        deforestation measured against a national baseline;
            ``(2) the greenhouse gas emissions reductions achieved are 
        not resulting in significant leakage; and
            ``(3) the greenhouse gas emissions reductions achieved are 
        being appropriately discounted to account for any leakage that 
        is occurring.
The limitation under this subsection shall not apply to support for 
activities to further the objectives listed in section 753(b)(2) or 
(3).
    ``(h) Coordination With U.S. Foreign Assistance.--Subject to the 
Direction of the President, the Administrator and the Administrator of 
USAID shall, to the extent practicable and consistent with the 
objectives of this program, seek to align activities under this section 
with broader development, poverty alleviation, or natural resource 
management objectives and initiatives in the recipient country.
    ``(i) Support as Supplement.--The provision of support for 
activities under this part shall be used to supplement, and not to 
supplant, any other Federal, State, or local support available to carry 
out such qualifying activities under this part.

``SEC. 755. REPORTS AND REVIEWS.

    ``(a) Reports.--Not later than January 1, 2014, and annually 
thereafter, the Administrator and the Administrator of USAID shall 
submit to the Committee on Energy and Commerce and the Committee on 
Foreign Affairs of the House of Representatives, and the Committee on 
Environment and Public Works and the Committee on Foreign Relations of 
the Senate, and make available to the public, a report on the support 
provided under this part during the prior fiscal year. The report shall 
include--
            ``(1) a statement of the quantity of supplemental emissions 
        reductions for which compensation was provided under this part 
        during the prior fiscal year, as registered by the 
        Administrator under section 754(f); and
            ``(2) a description of the national and subnational 
        deforestation reduction activities, capacity-building 
        activities, and leakage prevention activities supported under 
        this part, including a statement of the quantity of emission 
        allowances distributed to each recipient for each activity 
        during the prior fiscal year, and a description of what was 
        accomplished through each of the activities.
    ``(b) Reviews.--Not later than 4 years after the date of enactment 
of this title and every 5 years thereafter, the Administrator and the 
Administrator of USAID and taking into consideration any evaluation by 
or recommendations from the Advisory Board established under section 
731, shall conduct a review of the activities undertaken pursuant to 
this part and make any appropriate changes in the program established 
under this part based on the findings of the review. The review shall 
include the effects of the activities on--
            ``(1) total documented carbon stocks of each country that 
        directly or indirectly received support under this part 
        compared with such country's national deforestation baseline 
        established under section 754(d)(1);
            ``(2) the number of countries with the capacity to generate 
        for sale instruments in the nature of offset credits from 
        forest-related activities, and the amount of such activities;
            ``(3) forest governance in each country that directly or 
        indirectly received support under this part;
            ``(4) indigenous and forest-dependent peoples residing in 
        areas affected by such activities;
            ``(5) biodiversity and ecosystem services within forested 
        areas associated with the activities;
            ``(6) international leakage; and
            ``(7) any program or mechanism established under the United 
        Nations Framework Convention on Climate Change related to 
        greenhouse gas emissions from deforestation.

``SEC. 756. LEGAL EFFECT OF PART.

            ``(1) In general.--Nothing in this part supersedes, limits, 
        or otherwise affects any restriction imposed by Federal law 
        (including regulations) on any interaction between an entity 
        located in the United States and an entity located in a foreign 
        country.
            ``(2) Role of the secretary of state.--Nothing in this part 
        shall be construed as affecting the role of the Secretary of 
        State or the responsibilities of the Secretary under section 
        622 (c) of the Foreign Assistance Act of 1961.''.

SEC. 312. DEFINITIONS.

    Title VII of the Clean Air Act, as added by section 311 of this 
Act, is amended by inserting before part A the following new section:

``SEC. 700. DEFINITIONS.

    ``In this title:
            ``(1) Additional.--The term `additional', when used with 
        respect to reductions or avoidance of greenhouse gas emissions, 
        or to sequestration of greenhouse gases, means reductions, 
        avoidance, or sequestration that result in a lower level of net 
        greenhouse gas emissions or atmospheric concentrations than 
        would occur in the absence of an offset project.
            ``(2) Additionality.--The term `additionality' means the 
        extent to which reductions or avoidance of greenhouse gas 
        emissions, or sequestration of greenhouse gases, are 
        additional.
            ``(3) Advisory board.--The term `Advisory Board' means the 
        Offsets Integrity Advisory Board established under section 731.
            ``(4) Affiliated.--The term `affiliated'--
                    ``(A) when used in relation to an entity means 
                owned or controlled by, or under common ownership or 
                control with, another entity, as determined by the 
                Administrator; and
                    ``(B) when used in relation to a natural gas local 
                distribution company, means owned or controlled by, or 
                under common ownership or control with, another natural 
                gas local distribution company, as determined by the 
                Administrator.
            ``(5) Allowance.--The term `allowance' means a limited 
        authorization to emit, or have attributable greenhouse gas 
        emissions in an amount of, 1 ton of carbon dioxide equivalent 
        of a greenhouse gas in accordance with this title, including an 
        emission allowance, a compensatory allowance, or an 
        international emission allowance.
            ``(6) Attributable greenhouse gas emissions.--The term 
        `attributable greenhouse gas emissions' means--
                    ``(A) for a covered entity that is a fuel producer 
                or importer described in section 700(14)(B), greenhouse 
                gases that would be emitted from the combustion of any 
                petroleum-based or coal-based liquid fuel, petroleum 
                coke, or natural gas liquid, produced or imported by 
                that covered entity for sale or distribution in 
                interstate commerce, assuming no capture and 
                sequestration of any greenhouse gas emissions;
                    ``(B) for a covered entity that is an industrial 
                gas producer or importer described in section 
                700(14)(C), the tons of carbon dioxide equivalent of 
                carbon dioxide, nitrous oxide, any fluorinated gas, 
                other than nitrogen trifluoride, that is a greenhouse 
                gas, or any combination thereof--
                            ``(i) produced or imported by such covered 
                        entity during the previous calendar year for 
                        sale or distribution in interstate commerce; or
                            ``(ii) released as fugitive emissions in 
                        the production of fluorinated gas; and
                    ``(C) for a natural gas local distribution company 
                described in section 700(14)(I), greenhouse gases that 
                would be emitted from the combustion of the natural 
                gas, and any other gas meeting the specifications for 
                commingling with natural gas for purposes of delivery, 
                that such entity delivered during the previous calendar 
                year to customers that are not covered entities, 
                assuming no capture and sequestration of that 
                greenhouse gas.
            ``(7) Biological sequestration; biologically sequestered.--
        The terms `biological sequestration' and `biologically 
        sequestered' mean the removal of greenhouse gases from the 
        atmosphere by terrestrial biological means, such as by growing 
        plants, and the storage of those greenhouse gases in plants or 
        soils.
            ``(8) Capped emissions.--The term `capped emissions' means 
        greenhouse gas emissions to which section 722 applies, 
        including emissions from the combustion of natural gas, 
        petroleum-based or coal-based liquid fuel, petroleum coke, or 
        natural gas liquid to which section 722(a)(2) or (7) applies.
            ``(9) Capped source.--The term `capped source' means a 
        source that directly emits capped emissions.
            ``(10) Carbon dioxide equivalent.--The term `carbon dioxide 
        equivalent' means the unit of measure, expressed in metric 
        tons, of greenhouse gases as provided under section 711 or 712.
            ``(11) Carbon stock.--The term `carbon stock' means the 
        quantity of carbon contained in a biological reservoir or 
        system which has the capacity to accumulate or release carbon.
            ``(12) Compensatory allowance.--The term `compensatory 
        allowance' means an allowance issued under section 721(f).
            ``(13) Covered entity.--The term `covered entity' means 
        each of the following:
                    ``(A) Any electricity source.
                    ``(B) Any stationary source that produces, and any 
                entity that (or any group of two or more affiliated 
                entities that, in the aggregate) imports, for sale or 
                distribution in interstate commerce in 2008 or any 
                subsequent year, petroleum-based or coal-based liquid 
                fuel, petroleum coke, or natural gas liquid, the 
                combustion of which would emit more than 25,000 tons of 
                carbon dioxide equivalent, as determined by the 
                Administrator.
                    ``(C) Any stationary source that produces, and any 
                entity that (or any group of two or more affiliated 
                entities that, in the aggregate) imports, for sale or 
                distribution in interstate commerce in bulk or products 
                designated by the Administrator for sale or 
                distribution in interstate commerce in 2008 or any 
                subsequent year more than 25,000 tons of carbon dioxide 
                equivalent of--
                            ``(i) fossil fuel-based carbon dioxide;
                            ``(ii) nitrous oxide;
                            ``(iii) perfluorocarbons;
                            ``(iv) sulfur hexafluoride;
                            ``(v) any other fluorinated gas, except for 
                        nitrogen trifluoride, that is a greenhouse gas, 
                        as designated by the Administrator under 
                        section 711(b) or (c); or
                            ``(vi) any combination of greenhouse gases 
                        described in clauses (i) through (vi).
                    ``(D) Any geologic sequestration site.
                    ``(E) Any stationary source in the following 
                industrial sectors:
                            ``(i) Adipic acid production.
                            ``(ii) Primary aluminum production.
                            ``(iii) Ammonia manufacturing.
                            ``(iv) Cement production, excluding 
                        grinding-only operations.
                            ``(v) Hydrochlorofluorocarbon production.
                            ``(vi) Lime manufacturing.
                            ``(vii) Nitric acid production.
                            ``(viii) Petroleum refining.
                            ``(ix) Phosphoric acid production.
                            ``(x) Silicon carbide production.
                            ``(xi) Soda ash production.
                            ``(xii) Titanium dioxide production.
                            ``(xiii) Coal-based liquid or gaseous fuel 
                        production.
                    ``(F) Any stationary source in the chemical or 
                petrochemical sector that, in 2008 or any subsequent 
                year--
                            ``(i) produces acrylonitrile, carbon black, 
                        ethylene, ethylene dichloride, ethylene oxide, 
                        or methanol; or
                            ``(ii) produces a chemical or petrochemical 
                        product if producing that product results in 
                        annual combustion plus process emissions of 
                        25,000 or more tons of carbon dioxide 
                        equivalent.
                    ``(G) Any stationary source that--
                            ``(i) is in one of the following industrial 
                        sectors: ethanol production; ferroalloy 
                        production; fluorinated gas production; food 
                        processing; glass production; hydrogen 
                        production; iron and steel production; lead 
                        production; pulp and paper manufacturing; and 
                        zinc production; and
                            ``(ii) has emitted 25,000 or more tons of 
                        carbon dioxide equivalent in 2008 or any 
                        subsequent year.
                    ``(H) Any fossil fuel-fired combustion device (such 
                as a boiler) or grouping of such devices that--
                            ``(i) is all or part of an industrial 
                        source not specified in subparagraph (E), (F), 
                        or (G); and
                            ``(ii) has emitted 25,000 or more tons of 
                        carbon dioxide equivalent in 2008 or any 
                        subsequent year.
                    ``(I) Any natural gas local distribution company 
                that (or any group of 2 or more affiliated natural gas 
                local distribution companies that, in the aggregate) in 
                2008 or any subsequent year, delivers 460,000,000 cubic 
                feet or more of natural gas to customers that are not 
                covered entities.
                    ``(J) Any stationary source that has emitted 25,000 
                or more tons of carbon dioxide equivalent emission of 
                nitrogen trifluoride in 2008 or any subsequent year.
            ``(14) Crediting period.--The term `crediting period' means 
        the period with respect to which an offset project is eligible 
        to earn offset credits under part D, as determined under 
        section 734(c).
            ``(15) Designated representative.--The term `designated 
        representative' means, with respect to a covered entity, a 
        reporting entity, an offset project developer, or any other 
        entity receiving or holding allowances or offset credits under 
        this title, an individual authorized, through a certificate of 
        representation submitted to the Administrator by the owners and 
        operators, to represent the owners and operators in all matters 
        pertaining to this title (including the holding, transfer, or 
        disposition of allowances or offset credits), and to make all 
        submissions to the Administrator under this title.
            ``(16) Developing country.--The term `developing country' 
        means a country eligible to receive official development 
        assistance according to the income guidelines of the 
        Development Assistance Committee of the Organization for 
        Economic Cooperation and Development.
            ``(17) Domestic offset credit.--The term `domestic offset 
        credit' means an offset credit issued under part D, other than 
        an international offset credit.
            ``(18) Electricity source.--The term `electricity source' 
        means a stationary source that includes one or more utility 
        units.
            ``(19) Emission.--The term `emission' means the release of 
        a greenhouse gas into the ambient air. Such term does not 
        include gases that are captured and sequestered, except to the 
        extent that they are later released into the atmosphere, in 
        which case they shall be subject to section 722(a)(4).
            ``(20) Emission allowance.--The term `emission allowance' 
        means an allowance established under section 721(a) or section 
        726(g)(2) or (h)(1)(C).
            ``(21) Fair market value.--The term `fair market value' 
        means the average daily closing price on registered exchanges 
        or, if such a price is unavailable, the average price as 
        determined by the Administrator, during a specified time 
        period, of an emission allowance.
            ``(22) Federal land.--The term `Federal land' means land 
        that is owned by the United States, other than land held in 
        trust for an Indian or Indian tribe.
            ``(23) Fossil fuel.--The term `fossil fuel' means natural 
        gas, petroleum, coal, or any form of solid, liquid, or gaseous 
        fuel derived from such material, including consumer products 
        that are derived from such materials and are combusted.
            ``(24) Fossil fuel-fired.--The term `fossil fuel-fired' 
        means powered by combustion of fossil fuel, alone or in 
        combination with any other fuel, regardless of the percentage 
        of fossil fuel consumed.
            ``(25) Fugitive emissions.--The term `fugitive emissions' 
        means emissions from leaks, valves, joints, or other small 
        openings in pipes, ducts, or other equipment, or from vents.
            ``(26) Geologic sequestration; geologically sequestered.--
        The terms `geologic sequestration' and `geologically 
        sequestered' mean the sequestration of greenhouse gases in 
        subsurface geologic formations for purposes of permanent 
        storage.
            ``(27) Geologic sequestration site.--The term `geologic 
        sequestration site' means a site where carbon dioxide is 
        geologically sequestered.
            ``(28) Greenhouse gas.--The term `greenhouse gas' means any 
        gas described in section 711(a) or designated under section 
        711(b), (c), or (d), except to the extent that it is regulated 
        under title VI.
            ``(29) High conservation priority land.--The term `high 
        conservation priority land' means land that is not Federal land 
        and is--
                    ``(A) globally or State ranked as critically 
                imperiled or imperiled under a State Natural Heritage 
                Program; or
                    ``(B) old-growth or late-successional forest, as 
                identified by the office of the State Forester or 
                relevant State agency with regulatory jurisdiction over 
                forestry activities.
            ``(30) Hold.--The term `hold' means, with respect to an 
        allowance or offset credit, to have in the appropriate account 
        in the allowance tracking system, or submit to the 
        Administrator for recording in such account.
            ``(31) Industrial source.--The term `industrial source' 
        means any stationary source that--
                    ``(A) is not an electricity source; and
                    ``(B) is in--
                            ``(i) the manufacturing sector (as defined 
                        in North American Industrial Classification 
                        System codes 31, 32, and 33); or
                            ``(ii) the natural gas processing or 
                        natural gas pipeline transportation sector (as 
                        defined in North American Industrial 
                        Classification System codes 211112 or 486210).
            ``(32) International emission allowance.--The term 
        `international emission allowance' means a tradable 
        authorization to emit 1 ton of carbon dioxide equivalent of 
        greenhouse gas that is issued by a national or supranational 
        foreign government pursuant to a qualifying international 
        program designated by the Administrator pursuant to section 
        728(a).
            ``(33) International forest carbon activities.--The term 
        `international forest carbon activities' means national or 
        subnational activities in countries other than the United 
        States that are directed at--
                    ``(A) reducing greenhouse gas emissions from 
                deforestation or forest degradation; or
                    ``(B) increasing sequestration of carbon through--
                            ``(i) afforestation or reforestation of 
                        acreage not forested as of January 1, 2009;
                            ``(ii) restoration of degraded land or 
                        forest; or
                            ``(iii) improved forest management.
            ``(34) International offset credit.--The term 
        `international offset credit' means an offset credit issued by 
        the Administrator under section 743.
            ``(35) Leakage.--The term `leakage' means a significant 
        increase in greenhouse gas emissions, or significant decrease 
        in sequestration, which is caused by an offset project and 
        occurs outside the boundaries of the offset project.
            ``(36) Mineral sequestration.--The term `mineral 
        sequestration' means sequestration of carbon dioxide from the 
        atmosphere by capturing carbon dioxide into a permanent 
        mineral, such as the aqueous precipitation of carbonate 
        minerals that results in the storage of carbon dioxide in a 
        mineral form.
            ``(37) Natural gas liquid.--The term `natural gas liquid' 
        means ethane, butane, isobutene natural gasoline, and propane 
        which is ready for commercial sale or use.
            ``(38) Natural gas local distribution company.--The term 
        `natural gas local distribution company' has the meaning given 
        the term `local distribution company' in section 2(17) of the 
        Natural Gas Policy Act of 1978 (15 U.S.C. 3301(17)).
            ``(39) Offset credit.--The term `offset credit' means a 
        credit issued under part D.
            ``(40) Offset project.--The term `offset project' means a 
        project or activity that reduces or avoids greenhouse gas 
        emissions, or sequesters greenhouse gases, and for which offset 
        credits are issued under part D.
            ``(41) Offset project developer.--The term `offset project 
        developer' means the individual or entity designated as the 
        offset project developer in an offset project approval petition 
        under section 735(c)(1).
            ``(42) Petroleum.--The term `petroleum' includes crude oil, 
        tar sands, oil shale, and heavy oils.
            ``(43) Renewable biomass.--The term `renewable biomass' 
        means any of the following:
                    ``(A) Plant material, including waste material, 
                harvested or collected from actively managed 
                agricultural land that was in cultivation, cleared, or 
                fallow and nonforested on the date of enactment;
                    ``(B) Plant material, including waste material, 
                harvested or collected from pastureland that was 
                nonforested on the date of enactment;
                    ``(C) Nonhazardous vegetative matter derived from 
                waste, including separated yard waste, landscape right-
                of-way trimmings, construction and demolition debris or 
                food waste (but not municipal solid waste, recyclable 
                waste paper, painted, treated or pressurized wood, or 
                wood contaminated with plastic or metals);
                    ``(D) Animal waste or animal byproducts, including 
                products of animal waste digesters;
                    ``(E) Algae;
                    ``(F) Trees, brush, slash, residues, or any other 
                vegetative matter removed from within 600 feet of any 
                building, campground, or route designated for 
                evacuation by a public official with responsibility for 
                emergency preparedness, or from within 300 feet of a 
                paved road, electric transmission line; utility tower, 
                or water supply line;
                    ``(G) Residues from or byproducts of milled logs;
                    ``(H) Any of the following removed from forested 
                land that is not Federal and is not high conservation 
                priority land:
                            ``(i) Trees, brush, slash, residues, 
                        interplanted energy crops, or any other 
                        vegetative matter removed from an actively 
                        managed tree plantation established--
                                    ``(I) prior to the date of 
                                enactment of this section; or
                                    ``(II) on land that, as of the date 
                                of enactment of this section, was 
                                cultivated or fallow and non-forested.
                            ``(ii) Trees, logging residue, thinnings, 
                        cull trees, pulpwood, and brush removed from 
                        naturally regenerated forests or other non-
                        plantation forests, including for the purposes 
                        of hazardous fuel reduction or preventative 
                        treatment for reducing or containing insect or 
                        disease infestation.
                            ``(iii) Logging residue, thinnings, cull 
                        trees, pulpwood, brush and species that are 
                        non-native and noxious, from stands that were 
                        planted and managed after the enactment of this 
                        sentence to restore or maintain native forest 
                        types.
                            ``(iv) Dead or severely damaged trees 
                        removed within 5 years of fire, blowdown, or 
                        other natural disaster, and badly infested 
                        trees.
                    ``(I) Materials, pre-commercial thinnings, or 
                removed invasive species from National Forest System 
                land and public lands (as defined in section 103 of the 
                Federal Land Policy and Management Act of 1976 (43 
                U.S.C. 1702)), including those that are byproducts of 
                preventive treatments (such as trees, wood, brush, 
                thinnings, chips, and slash), that are removed as part 
                of a federally recognized timber sale, or that are 
                removed to reduce hazardous fuels, to reduce or contain 
                disease or insect infestation, or to restore ecosystem 
                health, and that are--
                            ``(i) not from are not from components of 
                        the National Wilderness Preservation System, 
                        Wilderness Study Areas, Inventoried Roadless 
                        Areas, old growth or mature forest stands, 
                        components of the National Landscape 
                        Conservation System, National Monuments, 
                        National Conservation Areas, Designated 
                        Primitive Areas; or Wild and Scenic Rivers 
                        corridors;
                            ``(ii) harvested in environmentally 
                        sustainable quantities, as determined by the 
                        appropriate Federal land manager; and
                            ``(iii) are harvested in accordance with 
                        Federal and State law, and applicable land 
                        management plans.
            ``(44) Retire.--The term `retire', with respect to an 
        allowance or offset credit established or issued under this 
        title, means to disqualify such allowance or offset credit for 
        any subsequent use under this title, regardless of whether the 
        use is a sale, exchange, or submission of the allowance or 
        offset credit to satisfy a compliance obligation.
            ``(45) Reversal.--The term `reversal' means an intentional 
        or unintentional loss of sequestered greenhouse gases to the 
        atmosphere.
            ``(46) Sequestered and sequestration.--The terms 
        `sequestered' and `sequestration' mean the separation, 
        isolation, or removal of greenhouse gases from the atmosphere, 
        as determined by the Administrator. The terms include 
        biological, geologic, and mineral sequestration, but do not 
        include ocean fertilization techniques.
            ``(47) Stationary source.--The term `stationary source' 
        means any integrated operation comprising any plant, building, 
        structure, or stationary equipment, including support buildings 
        and equipment, that is located within one or more contiguous or 
        adjacent properties, is under common control of the same person 
        or persons, and emits or may emit a greenhouse gas.
            ``(48) Strategic reserve allowance.--The term `strategic 
        reserve allowance' means an emission allowance reserved for, 
        transferred to, or deposited in the strategic reserve, or 
        established, under section 726.
            ``(49) Ton of carbon dioxide equivalent.--The term `ton of 
        carbon dioxide equivalent' has the meaning specified in section 
        712(b) or determined by the Administrator under section 711 or 
        712.
            ``(50) Uncapped emissions.--The term `uncapped emissions' 
        means emissions of greenhouse gases emitted after December 31, 
        2011, that are not capped emissions.
            ``(51) United states greenhouse gas emissions.--The term 
        `United States greenhouse gas emissions' means the total 
        quantity of annual greenhouse gas emissions from the United 
        States, as calculated by the Administrator and reported to the 
        United Nations Framework Convention on Climate Change 
        Secretariat.
            ``(52) Utility unit.--The term `utility unit' means a 
        combustion device that, on January 1, 2009, or any date 
        thereafter, is fossil fuel-fired and serves a generator that 
        produces electricity for sale, unless such combustion device, 
        during the 12-month period starting the later of January 1, 
        2009, or the commencement of commercial operation and each 
        calendar year starting after such later date--
                    ``(A) is part of an integrated cycle system that 
                cogenerates steam and electricity during normal 
                operation and that supplies one-third or less of its 
                potential electric output capacity and 25 MW or less of 
                electrical output for sale; or
                    ``(B) combusts materials of which more than 95 
                percent is municipal solid waste on a heat input basis.
            ``(53) Vintage year.--The term `vintage year' means the 
        calendar year for which an emission allowance is established 
        under section 721(a) or which is assigned to an emission 
        allowance under section 726(g)(3)(A), except that the vintage 
        year for a strategic reserve allowance shall be the year in 
        which such allowance is purchased at auction.''.

                 Subtitle B--Disposition of Allowances

SEC. 321. DISPOSITION OF ALLOWANCES FOR GLOBAL WARMING POLLUTION 
              REDUCTION PROGRAM.

    Title VII of the Clean Air Act, as added by section 311 of this 
Act, is amended by adding at the end the following part:

                  ``PART H--DISPOSITION OF ALLOWANCES

``SEC. 781. ALLOCATION OF ALLOWANCES FOR SUPPLEMENTAL REDUCTIONS.

    ``(a) In General.--The Administrator shall allocate for each 
vintage year the following percentage of the emission allowances 
established under section 721(a), for distribution in accordance with 
part E:
            ``(1) For vintage years 2012 through 2025, 5 percent.
            ``(2) For vintage years 2026 through 2030, 3 percent.
            ``(3) For vintage years 2031 through 2050, 2 percent.
    ``(b) Adjustment.--The Administrator shall modify the percentages 
set forth in subsection (a) as necessary to ensure the achievement of 
the annual supplemental emission reduction objective for 2020, and the 
cumulative reduction objective through 2025, set forth in section 
753(b)(1).
    ``(c) Carryover.--If the Administrator has not distributed all of 
the allowances allocated pursuant to this section for a given vintage 
year by the end of that year, the Administrator shall--
            ``(1) auction the remaining emission allowances under 
        section 791 not later than March 31 of the year following that 
        vintage year; and
            ``(2) increase the allocation for the vintage year after 
        the vintage year for which emission allowances were 
        undistributed by the amount of undistributed emission 
        allowances.

``SEC. 782. ALLOCATION OF EMISSION ALLOWANCES.

    ``(a) Electricity Consumers.--The Administrator shall allocate 
emission allowances for the benefit of electricity consumers, to be 
distributed in accordance with section 783 in the following amounts:
            ``(1) For vintage years 2012 and 2013, 43.75 percent of the 
        emission allowances established for each year under section 
        721(a).
            ``(2) For vintage years 2014 and 2015, 38.89 percent of the 
        emission allowances established for each year under section 
        721(a).
            ``(3) For vintage years 2016 through 2025, 35.00 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(4) For vintage year 2026, 28 percent of the emission 
        allowances established for each year under section 721(a).
            ``(5) For vintage year 2027, 21 percent of the emission 
        allowances established for each year under section 721(a).
            ``(6) For vintage year 2028, 14 percent of the emission 
        allowances established for each year under section 721(a).
            ``(7) For vintage year 2029, 7 percent of the emission 
        allowances established for each year under section 721(a).
    ``(b) Natural Gas Consumers.--The Administrator shall allocate 
emission allowances for the benefit of natural gas consumers to be 
distributed in accordance with section 784 in the following amounts:
            ``(1) For vintage years 2016 through 2025, 9 percent of the 
        emission allowances established for each year under section 
        721(a).
            ``(2) For vintage year 2026, 7.2 percent of the emission 
        allowances established for each year under section 721(a).
            ``(3) For vintage year 2027, 5.4 percent of the emission 
        allowances established for each year under section 721(a).
            ``(4) For vintage year 2028, 3.6 percent of the emission 
        allowances established for each year under section 721(a).
            ``(5) For vintage year 2029, 1.8 percent of the emission 
        allowances established for each year under section 721(a).
    ``(c) Home Heating Oil and Propane Consumers.--The Administrator 
shall allocate emission allowances for the benefit of home heating oil 
and propane consumers to be distributed in accordance with section 785 
in the following amounts:
            ``(1) For vintage years 2012 and 2013, 1.875 percent of the 
        emission allowances established for each year under section 
        721(a).
            ``(2) For vintage years 2014 and 2015, 1.67 percent of the 
        emission allowances established for each year under section 
        721(a).
            ``(3) For vintage years 2016 through 2025, 1.5 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(4) For vintage year 2026, 1.2 percent of the emission 
        allowances established for each year under section 721(a).
            ``(5) For vintage year 2027, 0.9 percent of the emission 
        allowances established for each year under section 721(a).
            ``(6) For vintage year 2028, 0.6 percent of the emission 
        allowances established for each year under section 721(a).
            ``(7) For vintage year 2029, 0.3 percent of the emission 
        allowances established for each year under section 721(a).
    ``(d) Low Income Consumers.--For each vintage year starting in 
2012, the Administrator shall auction 15 percent of the emission 
allowances established for each year under section 721(a), pursuant to 
section 791, with the proceeds used for the benefit of low income 
consumers to fund the program set forth in subtitle C of title IV of 
American Clean Energy and Security Act of 2009.
    ``(e) Trade-Vulnerable Industries.--The Administrator shall 
allocate emission allowances to energy-intensive, trade-exposed 
entities, to be distributed in accordance with part F, in the following 
amounts:
            ``(1) For vintage years 2012 and 2013, up to 2.0 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(2) For vintage years 2014, up to 15 percent of the 
        emission allowances established for that year under section 
        721(a).
            ``(3) For vintage years 2015 through 2025, the maximum 
        number of allowances that shall be distributed shall decline by 
        the same amount that the annual reduction target set forth in 
        section 702 declines (which is 1.75 percentage points annually 
        for 2015 through 2020, and 2.5 percentage points annually from 
        2021 through 2025).
            ``(4) For vintage years 2026 through 2050, the maximum 
        number of allowances that shall be distributed shall decline by 
        the same amount that the annual reduction target set forth in 
        section 702 declines (which is 2.5 percentage points annually 
        for 2026 through 2030, and 1.55 percentage points annually from 
        2031 through 2050) and shall be multiplied by a factor, which 
        shall be 90 percent in 2026 and decline 10 percentage points a 
        year until it reaches zero, unless the President sets a 
        different factor under section 767(c)(3)(A), that shall not 
        exceed 100 percent.
    ``(f) Deployment of Carbon Capture and Sequestration Technology.--
            ``(1) Annual allocation.--The Administrator shall allocate 
        emission allowances for the deployment of carbon capture and 
        sequestration technology to be distributed in accordance with 
        section 786 in the following amounts:
                    ``(A) For vintage years 2014 through 2017, 2 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(B) For vintage years 2018 through 2050, 5 
                percent of the emission allowances established for each 
                year under section 721(a).
            ``(2) Carryover.--If the Administrator has not distributed 
        all of the allowances allocated pursuant to this section for a 
        given vintage year by the end of that year, the Administrator 
        shall--
                    ``(A) auction those emission allowances under 
                section 791 not later than March 31 of the year 
                following that vintage year; and
                    ``(B) increase the allocation under this subsection 
                for the vintage year after the vintage year for which 
                emission allowances were undisbursed by the amount of 
                undisbursed emission allowances.
    ``(g) Investment in Energy Efficiency and Renewable Energy.--The 
Administrator shall allocate emission allowances to invest in energy 
efficiency and renewable energy as follows:
            ``(1) To be distributed in accordance with section 132 of 
        the American Clean Energy and Security Act of 2009 in the 
        following amounts:
                    ``(A) For vintage years 2012 through 2015, 9.5 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(B) For vintage years 2016 through 2017, 7.0 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(C) For vintage years 2018 through 2021, 6.0 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(D) For vintage years 2022 through 2025, 1.5 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(E) For vintage years 2026 through 2050, 4.5 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(F) At the same time the vintage year 2022 
                through 2025 allowances are distributed, 3.55 percent 
                of emission allowances established under section 721(a) 
                for the vintage year four years greater shall also be 
                distributed (which shall be in addition to the emission 
                allowances in subparagraph (E)).
            ``(2) To be distributed in accordance with section 201 of 
        the American Clean Energy and Security Act of 2009 in the 
        amount of 0.5 percent of emission allowances established under 
        section 721(a) for each vintage year from 2012 through 2050.
    ``(h) Clean Energy Innovation Centers.--The Administrator shall 
allocate 1 percent of emission allowances for each vintage year from 
2012 through 2050 to be distributed to Clean Energy Innovation Centers 
in accordance with section 181 of the American Clean Energy and 
Security Act of 2009.
    ``(i) Investment in Clean Vehicle Technology.--The Administrator 
shall allocate emission allowances to invest in the development and 
deployment of clean vehicles, to be distributed in accordance with 
section 124 of the American Clean Energy and Security Act of 2009 in 
the following amounts:
            ``(1) For vintage years 2012 through 2017, 3 percent of the 
        emission allowances established for each year under section 
        721(a).
            ``(2) For vintage years 2018 through 2025, 1 percent of the 
        emission allowances established for each year under section 
        721(a).
    ``(j) Domestic Fuel Production.--For vintage years 2014 through 
2026, the Administrator shall allocate 2.0 percent of the emission 
allowances established under section 721(a) to domestic refiners, to be 
distributed in accordance with part F.
    ``(k) Investment in Workers.--The Administrator shall auction 
pursuant to section 791 emission allowances for workers in the 
following amounts and shall report to the Secretary of Labor the amount 
of proceeds from the sale of these allowances:
            ``(1) For vintage years 2012 through 2021, 0.5 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(2) For vintage years 2022 through 2050, 1.0 percent of 
        the emission allowances established for each year under section 
        721(a).
    ``(l) Domestic Adaptation.--The Administrator shall allocate 
emission allowances for domestic adaptation as follows:
            ``(1) To be distributed in accordance with section 453 of 
        the American Clean Energy and Security Act in the following 
        amounts:
                    ``(A) For vintage years 2012 through 2021, 0.9 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(B) For vintage years 2022 through 2026, 1.9 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(C) For vintage years 2027 through 2050, 3.9 
                percent of the emission allowances established for each 
                year under section 721(a).
            ``(2) For vintage year 2012 and thereafter, the 
        Administrator shall auction 0.1 percent of the emission 
        allowances established for each year under section 721(a), 
        pursuant to section 791, and shall deposit the proceeds in the 
        Climate Change Health Protection and Promotion Fund established 
        by section 467 of the American Clean Energy and Security Act.
    ``(m) Wildlife and Natural Resource Adaptation.--The Administrator 
shall auction pursuant to section 791 emission allowances for domestic 
wildlife and natural resource adaptation in the amounts listed in 
paragraphs (1) through (3) and shall deposit the proceeds from the sale 
of these allowances in the Natural Resources Climate Change Adaptation 
Account established pursuant to section 480(a) of the American Clean 
Energy and Security Act. Funds so deposited shall be available for 
expenditure, without further appropriation or fiscal year limitation.
            ``(1) For vintage years 2012 through 2021, 1.0 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(2) For vintage years 2022 through 2026, 2.0 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(3) For vintage years 2027 through 2050, 4.0 percent of 
        the emission allowances established for each year under section 
        721(a).
    ``(n) International Adaptation.--The Administrator shall allocate 
emission allowances for international adaptation to be distributed in 
accordance with part 2 of subtitle E of title IV of the American Clean 
Energy and Security Act in the following amounts:
            ``(1) For vintage years 2012 through 2021, 1.0 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(2) For vintage years 2022 through 2026, 2.0 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(3) For vintage years 2027 through 2050, 4.0 percent of 
        the emission allowances established for each year under section 
        721(a).
    ``(o) International Clean Technology Deployment.--The Administrator 
shall allocate emission allowances for international clean technology 
deployment for distribution in accordance with subtitle D of title IV 
of the American Clean Energy and Security Act in the following amounts:
            ``(1) For vintage years 2012 through 2021, 1.0 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(2) For vintage years 2022 through 2026, 2.0 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(3) For vintage years 2027 through 2050, 4.0 percent of 
        the emission allowances established for each year under section 
        721(a).
    ``(p) Release of Future Allowances.--The Administrator shall make 
future year allowances available by auctioning allowances, pursuant to 
section 791, in the following amounts:
            ``(1) In each of calendar years 2015 through 2020, a string 
        of 0.7 billion allowances with vintage years 11 to 16 years 
        after the year of the auction, with an equal number of 
        allowances from each vintage year in the string.
            ``(2) In each of calendar years 2021 through 2025, a string 
        of 0.5 billion allowances with vintage years 11 to 16 years 
        after the year of the auction, with an equal number of 
        allowances from each vintage year in the string.
            ``(3) In each of calendar years 2026 through 2030, a string 
        of 0.3 billion allowances with vintage years 11 to 16 years 
        after the year of the auction, with an equal number of 
        allowances from each vintage year in the string.
    ``(q) Deficit Reduction.--
            ``(1) For each of vintage years 2012 through 2025, any 
        allowances not designated for distribution or auction pursuant 
        to section 781, subsections (a) through (o) of this section, or 
        section 790 shall be auctioned by the Administrator pursuant to 
        section 791 and the proceeds shall be deposited into the 
        Treasury.
            ``(2) Unless otherwise specified, any allowances allocated 
        pursuant to subsections (a) through (o) and not distributed by 
        March 31 of the calendar year following the allowance's vintage 
        year, shall be auctioned by the Administrator and the proceeds 
        shall be deposited into the Treasury.
            ``(3) For auctions conducted through vintage year 2025 
        pursuant to subsection (p), the auction proceeds shall be 
        deposited into the Treasury.
    ``(r) Climate Change Consumer Dividend.--For each of vintage years 
2026 through 2050, the Administrator shall auction pursuant to section 
791 any allowance established under section 721(a) for that year and 
not designated for distribution or auction pursuant to subsections (a) 
through (p), and place the proceeds from the sale of these allowances 
in the Climate Change Dividend Fund. For auctions conducted in 2026 and 
thereafter pursuant to subsection (p), the auction proceeds shall be 
deposited into the Climate Change Dividend Fund. Funds so deposited 
shall be available for expenditure, without further appropriation or 
fiscal year limitation.

``SEC. 783. ELECTRICITY CONSUMERS.

    ``(a) Definitions.--For purposes of this section:
            ``(1) Electricity local distribution company.--The term 
        `electricity local distribution company' means an electric 
        utility--
                    ``(A) that has a legal, regulatory, or contractual 
                obligation to deliver electricity directly to retail 
                consumers in the United States, regardless of whether 
                that entity or another entity sells the electricity as 
                a commodity to those retail consumers; and
                    ``(B) the retail rates of which, except in the case 
                of a registered electric cooperative, are regulated by 
                a State regulatory authority, regulatory commission, 
                municipality, public utility, or by an Indian tribe 
                pursuant to tribal law.
            ``(2) Long-term contract generator.--The term `long-term 
        contract generator' means a qualifying small power production 
        facility or a qualifying cogeneration facility (within the 
        meaning of section 3(17)(C) or 3(18)(B) of the Federal Power 
        Act), or a new independent power production facility (within 
        the meaning of section 416(a)(2) of this Act, except that 
        subparagraph (C) of such definition shall not apply for 
        purposes of this paragraph), that is--
                    ``(A) a covered entity;
                    ``(B) as of the commencement of operation, a 
                facility consisting of one or more utility units with 
                total installed net output capacity (in MWe) of no more 
                than 130 percent of the facility's total planned net 
                output capacity (in MWe);
                    ``(C) as of the date of enactment of this title, a 
                facility with a power sales agreement executed before 
                January 1, 2007, that governs the facility's 
                electricity sales and provides for sales at a price 
                (whether a fixed price or a price formula) for 
                electricity that does not allow for recovery of the 
                costs of compliance with the limitation on greenhouse 
                gas emissions under this title; and
                    ``(B) not a merchant coal generator (within the 
                meaning of paragraph (3)).
            ``(3) Merchant coal generator.--The term `merchant coal 
        generator' means an electric generation facility that--
                    ``(A) is a covered entity;
                    ``(B) derives at least 85 percent of its heat input 
                from coal, petroleum coke, or any combination of these 
                2 fuels;
                    ``(C) is not owned by a Federal, State, or regional 
                agency or power authority; and
                    ``(D) generates electricity for sale to others, 
                provided that such sales are not subject to--
                            ``(i) retail rate regulation by a State 
                        public utility commission; or
                            ``(ii) self-regulation of rates by a local 
                        government, State agency, or electric 
                        cooperative.
            ``(4) State regulatory authority.--The term `State 
        regulatory authority' has the meaning given that term in 
        section 3(17) of the Public Utility Regulatory Policies Act of 
        1978 (16 U.S.C. 2602(17)).
    ``(b) Electricity Local Distribution Companies.--
            ``(1) Allocation.--Not later than June 30 of 2011 and each 
        calendar year thereafter through 2028, the Administrator shall 
        distribute to electricity local distribution companies the 
        quantity of emission allowances allocated for the electricity 
        sector for the following vintage year pursuant to section 
        782(a), provided that the Administrator shall first subtract 
        from such quantity and distribute or reserve for distribution 
        the quantity of emission allowances for the relevant vintage 
        year that are required for distribution under subsections (c) 
        and (d) of this section.
            ``(2) Distribution of allowances.--
                    ``(A) Distribution based on emissions.--
                            ``(i) In general.--For each vintage year, 
                        50 percent of the emission allowances available 
                        for distribution under paragraph (1) shall be 
                        distributed by the Administrator among 
                        individual electricity local distribution 
                        companies ratably based on the annual average 
                        carbon dioxide emissions attributable to 
                        generation of electricity sold at retail by 
                        each such company during--
                                    ``(I) calendar years 2006 through 
                                2008; or
                                    ``(II) any 3 consecutive calendar 
                                years between 1999 and 2008, inclusive, 
                                that such company selects, provided 
                                that the company timely informs the 
                                Administrator of such selection.
                            ``(ii) Determination of emissions.--As part 
                        of the regulations promulgated pursuant to 
                        subsection (e), the Administrator, after 
                        consultation with the Energy Information 
                        Administration, shall determine the average 
                        amount of carbon dioxide emissions attributable 
                        to generation of electricity sold at retail by 
                        each electricity local distribution company for 
                        each of the years 1999 through 2008. Such 
                        determinations shall be as precise as 
                        practicable, taking into account the nature of 
                        data currently available and the nature of 
                        markets and regulation in effect in various 
                        regions of the country. The following 
                        requirements shall apply to such 
                        determinations:
                                    ``(I) The Administrator shall 
                                determine the amount of fossil fuel-
                                based electricity delivered at retail 
                                by each electricity local distribution 
                                company, and shall use appropriate 
                                emission factors to calculate carbon 
                                dioxide emissions associated with the 
                                generation of such electricity.
                                    ``(II) Where it is not practical to 
                                determine the precise fuel mix for the 
                                electricity delivered at retail by an 
                                individual electricity local 
                                distribution company, the Administrator 
                                may use the best available data, 
                                including average data on a regional 
                                basis with reference to Regional 
                                Transmission Organizations or regional 
                                entities (as that term is defined in 
                                section 215(a)(7) of the Federal Power 
                                Act (16 U.S.C. 824o(a)(7)), to estimate 
                                fuel mix and emissions. Different 
                                methodologies may be applied in 
                                different regions if appropriate to 
                                obtain the most accurate estimate.
                    ``(B) Distribution based on deliveries.--
                            ``(i) Initial allocation formula.--Except 
                        as provided in clause (ii), for each vintage 
                        year, the Administrator shall distribute 50 
                        percent of the emission allowances allocated 
                        under paragraph (1) of this subsection among 
                        individual electricity local distribution 
                        companies ratably based on each electricity 
                        local distribution company's annual average 
                        retail electricity deliveries for 2006 through 
                        2008, unless the owner or operator of the 
                        company selects 3 other consecutive years 
                        between 1999 and 2008, inclusive, and timely 
                        notifies the Administrator of its selection.
                            ``(ii) Updating.--Prior to distributing 
                        2015 vintage emission allowances under this 
                        subparagraph and at 3-year intervals 
                        thereafter, the Administrator shall update the 
                        distribution formula under this subparagraph to 
                        reflect changes in each electricity local 
                        distribution company's service territory since 
                        the most recent formula was established. For 
                        each successive 3-year period, the 
                        Administrator shall distribute allowances 
                        ratably among individual electricity local 
                        distribution companies based on the product 
                        of--
                                    ``(I) each electricity local 
                                distribution company's average annual 
                                deliveries per customer during calendar 
                                years 2006 through 2008, or during the 
                                3 alternative consecutive years 
                                selected by such company under clause 
                                (i); and
                                    ``(II) the number of customers of 
                                such electricity local distribution 
                                company in the most recent year in 
                                which the formula is updated under this 
                                clause.
            ``(3) Use of allowances.--
                    ``(A) Ratepayer benefit.--Emission allowances 
                distributed to an electricity local distribution 
                company under this subsection shall be used exclusively 
                for the benefit of retail ratepayers of such 
                electricity local distribution company. Emission 
                allowances received by an electricity local 
                distribution company under this subsection may not be 
                used to support electricity sales to entities or 
                persons other than the retail ratepayers of such 
                electricity local distribution company.
                    ``(B) Ratepayer classes.--In using emission 
                allowances distributed under this section for the 
                benefit of ratepayers, an electricity local 
                distribution company shall ensure that ratepayer 
                benefits are distributed--
                            ``(i) among ratepayer classes ratably based 
                        on electricity deliveries to each class; and
                            ``(ii) equitably among individual 
                        ratepayers within each ratepayer class, 
                        including entities that receive emission 
                        allowances pursuant to part F.
                    ``(C) Limitation.--No electricity local 
                distribution company may use emission allowances to 
                provide to any ratepayer a rebate that is based solely 
                on the quantity of electricity delivered to such 
                ratepayer. To the extent an electricity local 
                distribution company uses the value of emission 
                allowances distributed under this subsection to provide 
                rebates, it shall, to the maximum extent practicable, 
                provide such rebates with regard to the fixed portion 
                of ratepayers' bills.
                    ``(D) Guidelines.--As part of the regulations 
                promulgated under subsection (e), the Administrator 
                shall prescribe specific guidelines for the 
                implementation of the requirements of this paragraph.
            ``(4) Regulatory proceedings.--
                    ``(A) Requirement.--No electricity local 
                distribution company shall be eligible to receive 
                emission allowances under this subsection unless the 
                State regulatory authority with authority over such 
                company, or the entity with authority to regulate 
                retail electricity rates of an electricity local 
                distribution company not regulated by a State 
                regulatory authority, has--
                            ``(i) promulgated a regulation or completed 
                        a rate proceeding (or the equivalent, in the 
                        case of a ratemaking entity other than a State 
                        regulatory authority) that provides for the 
                        full implementation of the requirements of 
                        paragraph (3) of this subsection; and
                            ``(ii) made available to the Administrator 
                        and the public a report describing, in adequate 
                        detail, the manner in which the requirements of 
                        paragraph (3) will be implemented.
                    ``(B) Updating.--The Administrator shall require, 
                as a condition of continued receipt of emission 
                allowances under this subsection by an electricity 
                local distribution company, that a new regulation be 
                promulgated or rate proceeding be completed, and a new 
                report be made available to the Administrator and the 
                public, pursuant to subparagraph (A), not less 
                frequently than every 5 years.
            ``(5) Plans and reporting.--
                    ``(A) Regulations.--As part of the regulations 
                promulgated under subsection (e), the Administrator 
                shall prescribe requirements governing plans and 
                reports to be submitted by electricity local 
                distribution companies in accordance with this 
                paragraph.
                    ``(B) Plans.--Not later than April 30 of 2011 and 
                every 5 years thereafter through 2026, each electricity 
                local distribution company shall submit to the 
                Administrator a plan, approved by the State regulatory 
                authority or other entity charged with regulating the 
                retail rates of such company, describing such company's 
                plans for the disposition of the value of emission 
                allowances to be received pursuant to this subsection, 
                in accord with the requirements of this subsection.
                    ``(C) Reports.--Not later than June 30 of 2013 and 
                each calendar year thereafter through 2031, each 
                electricity local distribution company that received 
                emission allowances under this subsection in the 
                preceding calendar year shall submit a report to the 
                Administrator, and to the relevant State regulatory 
                authority or the entity with authority to regulate 
                retail electricity rates in the case of an electricity 
                local distribution company not regulated by a State 
                regulatory authority, describing the disposition of the 
                value of any emission allowances received by the 
                company in the prior calendar year pursuant to this 
                subsection, including--
                            ``(i) a description of sales, transfer, 
                        exchange, or use by the company for compliance 
                        with obligations under this title, of any such 
                        emission allowances;
                            ``(ii) the monetary value received by the 
                        company, whether in money or in some other 
                        form, from the sale, transfer, or exchange of 
                        emission allowances received by the company 
                        under this section;
                            ``(iii) the manner in which the company's 
                        disposition of emission allowances received 
                        under this subsection complies with the 
                        requirements of this subsection, including each 
                        of the requirements of paragraph (3); and
                            ``(iv) such other information as the 
                        Administrator may require pursuant to 
                        subparagraph (A).
                    ``(D) Publication.--The Administrator shall make 
                available to the public all plans and reports submitted 
                by electricity local distribution companies under this 
                section, including by publishing such plans and reports 
                on the Internet.
            ``(6) Audits.--Each year, the Administrator shall conduct 
        an audit of a representative sample of electricity local 
        distribution companies receiving emission allowances under this 
        subsection to ensure compliance with the requirements of this 
        subsection. In selecting electricity local distribution 
        companies for audit, the Administrator shall take into account 
        any credible evidence of noncompliance with the requirements of 
        this subsection. The Administrator shall make available to the 
        public a report describing the results of each such audit, 
        including by publishing such report on the Internet.
            ``(7) Enforcement.--A violation of any requirement of this 
        subsection shall be a violation of this Act. Each emission 
        allowance the value of which is used in violation of the 
        requirements of this subsection shall be a separate violation.
    ``(c) Merchant Coal Generators.--
            ``(1) Qualifying emissions.--The qualifying emissions for a 
        merchant coal generator for a given calendar year shall be the 
        product of the number of megawatt hours of electricity 
        generated by such generator in such calendar year and the 
        average carbon dioxide emissions per megawatt hour generated by 
        such generator during calendar years 2006 through 2008, 
        provided that the number of megawatt hours in a given calendar 
        year for purposes of such calculation shall be reduced in 
        proportion to the portion of such generator's carbon dioxide 
        emissions that were captured and sequestered in such calendar 
        year and for which such generator received or will receive 
        bonus emission allowances under section 785.
            ``(2) Phase-down schedule.--The Administrator shall 
        identify an annual phase-down factor, applicable to 
        distributions to merchant coal generators for each of calendar 
        years 2012 through 2029, that corresponds to the overall 
        decline in the amount of emission allowances to be allocated to 
        the electricity sector in such years pursuant to section 
        782(a). Such factor shall--
                    ``(A) for calendar year 2012, be equal to 1.0;
                    ``(B) for each of calendar years 2013 through 2029, 
                correspond to the quotient of--
                            ``(i) the quantity of emission allowances 
                        to be allocated to the electricity sector under 
                        section 782(a) for such calendar year; divided 
                        by
                            ``(ii) the quantity of emission allowances 
                        to be allocated to the electricity sector under 
                        section 782(a) for calendar year 2012.
            ``(3) Distribution of emission allowances.--Not later than 
        March 1 of 2013 and each calendar year through 2030, the 
        Administrator shall distribute emission allowances of the 
        preceding vintage year to each merchant coal generator equal to 
        the product of--
                    ``(A) 0.5;
                    ``(B) the qualifying emissions for such merchant 
                coal generator for the preceding year, as determined 
                under paragraph (1); and
                    ``(C) the phase-down factor for the preceding 
                calendar year, as identified under paragraph (2).
            ``(4) Adjustment.--
                    ``(A) Study.--Not later than July 1, 2014, the 
                Administrator, in consultation with the Federal Energy 
                Regulatory Commission, shall complete a study to 
                determine whether the allocation formula under 
                paragraph (3) is resulting in, or is likely to result 
                in, windfall profits to merchant coal generators or 
                substantially disparate treatment of merchant coal 
                generators operating in different markets or regions.
                    ``(B) Regulation.--If the Administrator, in 
                consultation with the Federal Energy Regulatory 
                Commission, makes an affirmative finding of windfall 
                profits or disparate treatment under subparagraph (A), 
                the Administrator shall, not later than 18 months after 
                the completion of the study described in subparagraph 
                (A), promulgate regulations providing for the 
                adjustment of the allocation formula under paragraph 
                (3) to mitigate, to the extent practicable, such 
                windfall profits, if any, and such disparate treatment, 
                if any.
            ``(5) Limitation on allowances.--Notwithstanding paragraph 
        (3) or (4), for any vintage year the Administrator shall 
        distribute under this subsection no more than 10 percent of the 
        total quantity of emission allowances available for such 
        vintage year for distribution to the electricity sector under 
        section 782(a). If the quantity of emission allowances that 
        would otherwise be distributed pursuant to paragraph (3) or (4) 
        for any vintage year would exceed such limit, the Administrator 
        shall distribute 10 percent of the total emission allowances 
        available for distribution under section 782(a) for such 
        vintage year ratably among merchant coal generators based on 
        the formula in paragraph (3) or (4).
    ``(d) Generators With Long-Term Power Purchase Agreements.--
            ``(1) Reserved allowances.--Notwithstanding subsections (b) 
        and (c) of this section, the Administrator shall withhold from 
        distribution to electricity local distribution companies a 
        number of emission allowances equal to 105 percent of the 
        emission allowances the Administrator anticipates will be 
        distributed to long-term contract generators under this 
        subsection. If not required to distribute all of these reserved 
        allowances under this subsection, the Administrator shall 
        distribute any remaining emission allowances to the electricity 
        local distribution companies in accordance with subsection (b).
            ``(2) Distribution.--Not later than March 1 of 2013 and 
        each calendar year through 2030, the Administrator shall 
        distribute to the owner or operator of each long-term contract 
        generator the number of emission allowances of the preceding 
        vintage year that are equal to the number of tons of carbon 
        dioxide emitted as a result of a qualifying long-term power 
        purchase agreement referred to in subsection (a)(2)(C).
            ``(3) Duration.--A long-term contract generator shall cease 
        to be eligible to receive allocations under this subsection 
        upon the earliest of the following dates:
                    ``(A) The date when the facility no longer 
                qualifies as a qualifying small power production 
                facility or a qualifying cogeneration facility (within 
                the meaning of section 3(17)(C) or 3(18)(B) of the 
                Federal Power Act), or a new independent power 
                production facility (within the meaning of section 
                416(a)(2) of this Act, except that subparagraph (C) of 
                such definition shall not apply for purposes of this 
                clause).
                    ``(B) The date when the facility no longer meets 
                the total installed net output capacity criterion 
                required to be met as of the commencement of operation 
                in subsection (a)(2)(B).
                    ``(C) The date when the power purchase agreement 
                referred to in subsection (a)(2)(C)--
                            ``(i) expires;
                            ``(ii) is terminated; or
                            ``(iii) is amended in any way that changes 
                        the location of the facility, the price 
                        (whether a fixed price or price formula) for 
                        electricity sold under such agreement, the 
                        quantity of electricity sold under the 
                        agreement, or the expiration or termination 
                        date of the agreement.
            ``(4) Eligibility.--To be eligible to receive allowance 
        distributions under this subsection, a long-term contract 
        generator shall submit each of the following in writing to the 
        Administrator within 180 days after the date of enactment of 
        this title, and not later than September 30 of each vintage 
        year for which such generator wishes to receive emission 
        allowances:
                    ``(A) A certificate of representation described in 
                section 700(16).
                    ``(B) An identification of each owner and each 
                operator of the facility.
                    ``(C) An identification of the units at the 
                facility and the location of the facility.
                    ``(D) A written certification by the designated 
                representative that the facility meets all the 
                requirements of the definition of a long-term contract 
                generator.
                    ``(E) The expiration date of the power purchase 
                agreement referred to in subsection (a)(2)(C).
                    ``(F) A copy of the power purchase agreement 
                referred to in subsection (a)(2)(C).
            ``(5) Notification.--Not later than 30 days after a 
        facility loses, in accordance with paragraph (3), its 
        eligibility for emission allowances distributed pursuant to 
        this subsection, the designated representative of such facility 
        shall notify the Administrator in writing when, and on what 
        basis, the facility lost its eligibility to receive emission 
        allowances.
    ``(e) Regulations.--Not later than 2 years after the date of 
enactment of this title, the Administrator, in consultation with the 
Federal Energy Regulatory Commission, shall promulgate regulations to 
implement the requirements of this section.

``SEC. 784. NATURAL GAS CONSUMERS.

    ``(a) Definitions.--For purposes of this section:
            ``(1) Natural gas local distribution company.--The term 
        `natural gas local distribution company' means a natural gas 
        local distribution company that is a covered entity.
            ``(2) Cost-effective.--The term `cost-effective', with 
        respect to an energy efficiency program, means that the program 
        meets the Total Resource Cost Test, which requires that the net 
        present value of economic benefits over the life of the 
        program, including avoided supply and delivery costs and 
        deferred or avoided investments, is greater than the net 
        present value of the economic costs over the life of the 
        program, including program costs and incremental costs borne by 
        the energy consumer.
    ``(b) Allocation.--Not later than June 30 of 2015 and each calendar 
year thereafter through 2028, the Administrator shall distribute to 
natural gas local distribution companies the quantity of emission 
allowances allocated for the following vintage year pursuant to section 
782(b). Such allowances shall be distributed among local natural gas 
distribution companies based on the following formula:
            ``(1) Initial formula.--Except as provided in paragraph 
        (2), for each vintage year, the Administrator shall distribute 
        emission allowances among natural gas local distribution 
        companies ratably based on each such company's annual average 
        retail natural gas deliveries for 2006 through 2008, unless the 
        owner or operator of the company selects 3 other consecutive 
        years between 1999 and 2008, inclusive, and timely notifies the 
        Administrator of its selection.
            ``(2) Updating.--Prior to distributing 2019 vintage 
        emission allowances and at 3-year intervals thereafter, the 
        Administrator shall update the distribution formula under this 
        subsection to reflect changes in each natural gas local 
        distribution company's service territory since the most recent 
        formula was established. For each successive 3-year period, the 
        Administrator shall distribute allowances ratably among natural 
        gas local distribution companies based on the product of--
                    ``(A) each natural gas local distribution company's 
                average annual natural gas deliveries per customer 
                during calendar years 2006 through 2008, or during the 
                3 alternative consecutive years selected by such 
                company under paragraph (1); and
                    ``(B) the number of customers of such natural gas 
                local distribution company in the most recent year in 
                which the formula is updated under this paragraph.
    ``(c) Use of Allowances.--
            ``(1) Ratepayer benefit.--Emission allowances distributed 
        to a natural gas local distribution company under this section 
        shall be used exclusively for the benefit of retail ratepayers 
        of such natural gas local distribution company. Emission 
        allowances received by a natural gas local distribution company 
        under this section may not be used to support natural gas sales 
        to entities or persons other than the retail ratepayers of such 
        natural gas local distribution company.
            ``(2) Ratepayer classes.--In using emission allowances 
        distributed under this section for the benefit of ratepayers, a 
        natural gas local distribution company shall ensure that 
        ratepayer benefits are distributed--
                    ``(A) among ratepayer classes ratably based on 
                natural gas deliveries to each class; and
                    ``(B) equitably among individual ratepayers within 
                each ratepayer class.
            ``(3) Limitation.--No natural gas local distribution 
        company may use emission allowances to provide to any ratepayer 
        a rebate that is based solely on the quantity of natural gas 
        delivered to such ratepayer. To the extent a natural gas local 
        distribution company uses the value of emission allowances 
        distributed under this subsection to provide rebates, it shall, 
        to the maximum extent practicable, provide such rebates with 
        regard to the fixed portion of ratepayers' bills.
            ``(4) Energy efficiency programs.--The value of no less 
        than one third of the emission allowances distributed to 
        natural gas local distribution companies pursuant to this 
        section in any calendar year shall be used for cost-effective 
        energy efficiency programs for natural gas consumers. Such 
        programs must be authorized and overseen by the State 
        regulatory authority, or by the entity with regulatory 
        authority over retail natural gas rates in the case of a 
        natural gas local distribution company that is not regulated by 
        a State regulatory authority.
            ``(5) Guidelines.--As part of the regulations promulgated 
        under subsection (h), the Administrator shall prescribe 
        specific guidelines for the implementation of the requirements 
        of this subsection.
    ``(d) Regulatory Proceedings.--
            ``(1) Requirement.--No natural gas local distribution 
        company shall be eligible to receive emission allowances under 
        this section unless the State regulatory authority with 
        authority over such company, or the entity with authority to 
        regulate retail rates of a natural gas local distribution 
        company not regulated by a State regulatory authority, has--
                    ``(A) promulgated a regulation or completed a rate 
                proceeding (or the equivalent, in the case of a 
                ratemaking entity other than a State regulatory 
                authority) that provides for the full implementation of 
                the requirements of subsection (c); and
                    ``(B) made available to the Administrator and the 
                public a report describing, in adequate detail, the 
                manner in which the requirements of subsection (c) will 
                be implemented.
            ``(2) Updating.--The Administrator shall require, as a 
        condition of continued receipt of emission allowances under 
        this section by a natural gas local distribution company, that 
        a new regulation be promulgated or rate proceeding be 
        completed, and a new report be made available to the 
        Administrator and the public, pursuant to paragraph (1), not 
        less frequently than every 5 years.
    ``(e) Plans and Reporting.--
            ``(1) Regulations.--As part of the regulations promulgated 
        under subsection (h), the Administrator shall prescribe 
        requirements governing plans and reports to be submitted by 
        natural gas local distribution companies in accordance with 
        this subsection.
            ``(2) Plans.--Not later than April 30 of 2015 and every 5 
        years thereafter through 2025, each natural gas local 
        distribution company shall submit to the Administrator a plan, 
        approved by the State regulatory authority or other entity 
        charged with regulating the retail rates of such company, 
        describing such company's plans for the disposition of the 
        value of emission allowances to be received pursuant to this 
        section, in accord with the requirements of this section.
            ``(3) Reports.--Not later than June 30 of 2017 and each 
        calendar year thereafter through 2031, each natural gas local 
        distribution company that received emission allowances under 
        this section in the preceding calendar year shall submit a 
        report to the Administrator, approved by the relevant State 
        regulatory authority or the entity with authority to regulate 
        retail natural gas rates in the case of a natural gas local 
        distribution company not regulated by a State regulatory 
        authority, describing the disposition of the value of any 
        emission allowances received by the company in the prior 
        calendar year pursuant to this subsection, including--
                    ``(A) a description of sales, transfer, exchange, 
                or use by the company for compliance with obligations 
                under this title, of any such emission allowances;
                    ``(B) the monetary value received by the company, 
                whether in money or in some other form, from the sale, 
                transfer, or exchange of emission allowances received 
                by the company under this section;
                    ``(C) the manner in which the company's disposition 
                of emission allowances received under this subsection 
                complies with the requirements of this section, 
                including each of the requirements of subsection (c);
                    ``(D) the cost-effectiveness of, and energy savings 
                achieved by, energy efficiency programs supported 
                through such emission allowances; and
                    ``(E) such other information as the Administrator 
                may require pursuant to paragraph (1).
            ``(4) Publication.--The Administrator shall make available 
        to the public all plans and reports submitted by natural gas 
        local distribution companies under this subsection, including 
        by publishing such plans and reports on the Internet.
    ``(f) Audits.--Each year, the Administrator shall conduct an audit 
of a representative sample of natural gas local distribution companies 
receiving emission allowances under this section to ensure compliance 
with the requirements of this section. In selecting natural gas local 
distribution companies for audit, the Administrator shall take into 
account any credible evidence of noncompliance with the requirements of 
this section. The Administrator shall make available to the public a 
report describing the results of each such audit, including by 
publishing such report on the Internet.
    ``(g) Enforcement.--A violation of any requirement of this section 
shall be a violation of this Act. Each emission allowance the value of 
which is used in violation of the requirements of this section shall be 
a separate violation.
    ``(h) Regulations.--Not later than January 1, 2014, the 
Administrator, in consultation with the Federal Energy Regulatory 
Commission, shall promulgate regulations to implement the requirements 
of this section.

``SEC. 785. HOME HEATING OIL AND PROPANE CONSUMERS.

    ``(a) Definitions.--For purposes of this section:
            ``(1) Carbon content.--The term `carbon content' means the 
        amount of carbon dioxide that will be emitted as a result of 
        the combustion of a fuel.
            ``(2) Cost-effective.--The term `cost-effective', with 
        respect to an energy efficiency program, means that the program 
        meets the Total Resource Cost Test, which requires that the net 
        present value of economic benefits over the life of the 
        program, including avoided supply and delivery costs and 
        deferred or avoided investments, is greater than the net 
        present value of the economic costs over the life of the 
        program, including program costs and incremental costs borne by 
        the energy consumer.
    ``(b) Allocation.--Not later than September 30 of each of calendar 
years 2012 through 2030, the Administrator shall distribute among the 
States, in accordance with this section, the quantity of emission 
allowances allocated pursuant to section 782(c).
    ``(c) Distribution Among States.--The Administrator shall 
distribute allowances among the States under this section each year 
ratably based on the ratio of--
            ``(1) the carbon content of home heating oil and propane 
        sold to consumers within each State in the preceding year for 
        residential or commercial uses; to
            ``(2) the carbon content of home heating oil and propane 
        sold to consumers within the United States in the preceding 
        year for residential or commercial uses.
    ``(d) Use of Allowances.--
            ``(1) In general.--States shall use emission allowances 
        distributed under this section exclusively for the benefit of 
        consumers of home heating oil or propane for residential or 
        commercial purposes. Such proceeds shall be used exclusively 
        for--
                    ``(A) cost-effective energy efficiency programs for 
                consumers that use home heating oil or propane for 
                residential or commercial purposes; or
                    ``(B) rebates or other direct financial assistance 
                programs for consumers of home heating oil or propane 
                used for residential or commercial purposes.
            ``(2) Administration and delivery mechanisms.--In 
        administering programs supported by this section, States 
        shall--
                    ``(A) use no less than 50 percent of the value of 
                emission allowances received under this section for 
                cost-effective efficiency programs to reduce consumers' 
                overall fuel costs;
                    ``(B) to the extent practicable, deliver consumer 
                support under this section through existing energy 
                efficiency and consumer energy assistance programs or 
                delivery mechanisms, including, where appropriate, 
                programs or mechanisms administered by parties other 
                than the State; and
                    ``(C) seek to coordinate the administration and 
                delivery of energy efficiency and consumer energy 
                assistance programs funded under this section, with one 
                another and with existing programs for various fuel 
                types, so as to deliver comprehensive, fuel-blind, 
                coordinated programs to consumers.
    ``(e) Reporting.--Each State receiving emission allowances under 
this section shall submit to the Administrator, within 12 months of 
each receipt of such allowances, a report, in accordance with such 
requirements as the Administrator may prescribe, that--
            ``(1) describes the State's use of emission allowances 
        distributed under this section, including a description of the 
        energy efficiency and consumer assistance programs supported 
        with such allowances;
            ``(2) demonstrates the cost-effectiveness of, and the 
        energy savings achieved by, energy efficiency programs 
        supported under this section; and
            ``(3) includes a report prepared by an independent third 
        party, in accordance with such regulations as the Administrator 
        may promulgate, evaluating the performance of the energy 
        efficiency and consumer assistance programs supported under 
        this section.
    ``(f) Enforcement.--If the Administrator determines that a State is 
not in compliance with this section, the Administrator may withhold a 
portion of the allowances, the value of which is equal to up to twice 
the value of the allowances that the State failed to use in accordance 
with the requirements of this section, that such State would otherwise 
be eligible to receive under this section in later years. Allowances 
withheld pursuant to this subsection shall be distributed among the 
remaining States ratably in accordance with the formula in subsection 
(c).

``SEC. 786-788. [SECTIONS RESERVED].

``SEC. 789. CLIMATE CHANGE REBATES.

    ``(a) Rebate.--Not later than October 31 of each calendar year, the 
President, or such Federal agency or department as the President may 
designate, shall distribute the funds in the Consumer Climate Change 
Rebate Fund on a per capita basis to each household in the United 
States.
    ``(b) Limitations.--The President, or such Federal agency or 
department as the President may designate, shall establish procedures 
to ensure that individuals who are not--
            ``(1) citizens or nationals of the United States; or
            ``(2) immigrants lawfully residing in the United States,
are excluded for the purpose of calculating and distributing rebates 
under this section.

``SEC. 790. EXCHANGE FOR STATE-ISSUED ALLOWANCES.

    ``(a) In General.--Not later than one year after the date of 
enactment of this title, the Administrator shall issue regulations 
allowing any person in the United States to exchange greenhouse gas 
emission allowances issued before December 31, 2011, by the State of 
California or for the Regional Greenhouse Gas Initiative, or the 
Western Climate Initiative (in this section referred to as `State 
allowances') for emission allowances established by the Administrator 
under section 721(a).
    ``(b) Regulations.--Regulations issued under subsection (a) shall--
            ``(1) provide that a person exchanging State allowances 
        under this section receive emission allowances established 
        under section 721(a) in the amount that is sufficient to 
        compensate for the cost of obtaining and holding such State 
        allowances;
            ``(2) establish a deadline by which persons must exchange 
        the State allowances; and
            ``(3) provide that the Federal emission allowances 
        disbursed pursuant to this section shall be deducted from the 
        allowances to be auctioned pursuant to section 782(b).
    ``(c) Cost of Obtaining State Allowance.--For purposes of this 
section, the cost of obtaining a State allowance shall be the average 
auction price, for emission allowances issued in the year in which the 
State allowance was issued, under the program under which the State 
allowance was issued.

``SEC. 791. AUCTION PROCEDURES.

    ``(a) In General.--To the extent that auctions of emission 
allowances by the Administrator are authorized by this part, such 
auctions shall be carried out pursuant to this section and the 
regulations established hereunder.
    ``(b) Initial Regulations.--Not later than 12 months after the date 
of enactment of this title, the Administrator, in consultation with 
other agencies, as appropriate, shall promulgate regulations governing 
the auction of allowances under this section. Such regulations shall 
include the following requirements:
            ``(1) Frequency; first auction.--Auctions shall be held 
        four times per year at regular intervals, with the first 
        auction to be held no later than March 31, 2011.
            ``(2) Auction schedule; current and future vintages.--The 
        Administrator shall, at each quarterly auction under this 
        section, offer for sale both a portion of the allowances with 
        the same vintage year as the year in which the auction is being 
        conducted and a portion of the allowances with vintage years 
        from future years. The preceding sentence shall not apply to 
        auctions held before 2012, during which period, by necessity, 
        the Administrator shall auction only allowances with a vintage 
        year that is later than the year in which the auction is held. 
        Beginning with the first auction and at each quarterly auction 
        held thereafter, the Administrator may offer for sale 
        allowances with vintage years of up to four years after the 
        year in which the auction is being conducted.
            ``(3) Auction format.--Auctions shall follow a single-
        round, sealed-bid, uniform price format.
            ``(4) Participation; financial assurance.--Auctions shall 
        be open to any person, except that the Administrator may 
        establish financial assurance requirements to ensure that 
        auction participants can and will perform on their bids.
            ``(5) Disclosure of beneficial ownership.--Each bidder in 
        the auction shall be required to disclose the person or entity 
        sponsoring or benefitting from the bidder's participation in 
        the auction if such person or entity is, in whole or in part, 
        other than the bidder.
            ``(6) Purchase limits.--No person may, directly or in 
        concert with another participant, purchase more than 5 percent 
        of the allowances offered for sale at any quarterly auction.
            ``(7) Publication of information.--After the auction, the 
        Administrator shall, in a timely fashion, publish the 
        identities of winning bidders, the quantity of allowances 
        obtained by each winning bidder, and the auction clearing 
        price.
            ``(8) Other requirements.--The Administrator may include in 
        the regulations such other requirements or provisions as the 
        Administrator, in consultation with other agencies, as 
        appropriate, considers appropriate to promote effective, 
        efficient, transparent, and fair administration of auctions 
        under this section.
    ``(c) Revision of Regulations.--The Administrator may, in 
consultation with other agencies, as appropriate, at any time, revise 
the initial regulations promulgated under subsection (b). Such revised 
regulations need not meet the requirements identified in subsection (b) 
if the Administrator determines that an alternative auction design 
would be more effective, taking into account factors including costs of 
administration, transparency, fairness, and risks of collusion or 
manipulation. In determining whether and how to revise the initial 
regulations under this subsection, the Administrator shall not consider 
maximization of revenues to the Federal Government.
    ``(d) Reserve Auction Price.--The minimum reserve auction price 
shall be $10 for auctions occurring in 2012. The minimum reserve price 
for auctions occurring in years after 2012 shall be the minimum reserve 
auction price for the previous year increased by 5 percent plus the 
rate of inflation (as measured by the Consumer Price Index for all 
urban consumers).
    ``(e) Delegation or Contract.--Pursuant to regulations under this 
section, the Administrator may by delegation or contract provide for 
the conduct of auctions under the Administrator's supervision by other 
departments or agencies of the Federal Government or by nongovernmental 
agencies, groups, or organizations.

``SEC. 792. AUCTIONING ALLOWANCES FOR OTHER ENTITIES.

    ``(a) Consignment.--Any entity holding emission allowances or 
compensatory allowances may request that the Administrator auction, 
pursuant to section 791, the allowances on consignment.
    ``(b) Pricing.--When the Administrator acts under this section as 
the agent of an entity in possession of emission allowances, the 
Administrator is not obligated to obtain the highest price possible for 
the emission allowances, and instead shall auction consignment 
allowances in the same manner and pursuant to the same rules as 
auctions of other allowances under section 791. The Administrator may 
permit emission allowance owners to condition the sale of their 
allowances pursuant to this section on a minimum reserve price.
    ``(c) Proceeds.--For emission allowances and compensatory 
allowances auctioned pursuant to this section, notwithstanding section 
3302 of title 31, United States Code, or any other provision of law, 
within 90 days of receipt, the United States shall transfer the 
proceeds from the auction to the entity which held the allowances 
auctioned. No funds transferred from a purchaser to a seller of 
emission allowances or compensatory allowances under this subsection 
shall be held by any officer or employee of the United States or 
treated for any purpose as public monies.
    ``(d) Regulations.--The Administrator shall issue regulations 
within 24 months after the date of enactment of this title to implement 
this section.

``SEC. 793. ESTABLISHMENT OF FUNDS.

    ``There is established in the Treasury of the United States the 
following funds:
            ``(1) The Strategic Reserve Fund.
            ``(2) The Climate Change Rebate Fund.''.

            Subtitle C--Additional Greenhouse Gas Standards

SEC. 331. GREENHOUSE GAS STANDARDS.

    The Clean Air Act (42 U.S.C. 7401 and following), as amended by 
subtitles A and B of this title, is further amended by adding the 
following new title after title VII:

           ``TITLE VIII--ADDITIONAL GREENHOUSE GAS STANDARDS

``SEC. 801. DEFINITIONS.

    ``For purposes of this title, terms that are defined in title VII, 
except for the term `stationary source', shall have the meaning given 
those terms in title VII.

                 ``PART A--STATIONARY SOURCE STANDARDS

``SEC. 811. STANDARDS OF PERFORMANCE.

    ``(a) Uncapped Stationary Sources.--
            ``(1) Inventory of source categories.--(A) Within 12 months 
        after the date of enactment of this title, the Administrator 
        shall publish under section 111(b)(1)(A) an inventory of 
        categories of stationary sources that consist of those 
        categories that contain sources that individually had uncapped 
        greenhouse gas emissions greater than 10,000 tons of carbon 
        dioxide equivalent and that, in the aggregate, were responsible 
        for emitting at least 20 percent annually of the uncapped 
        greenhouse gas emissions.
            ``(B) The Administrator shall include in the inventory 
        under this paragraph each source category that is responsible 
        for at least 10 percent of the uncapped methane emissions. 
        Notwithstanding any other provision, the inventory required by 
        this section shall not include sources of enteric fermentation. 
        The list under this paragraph shall include industrial sources, 
        the emissions from which, when added to the capped emissions 
        from industrial sources, constitute at least 95 percent of the 
        greenhouse gas emissions of the industrial sector.
            ``(C) For purposes of this subsection, emissions shall be 
        calculated using tons of carbon dioxide equivalents. In 
        promulgating the inventory required by this paragraph and the 
        schedule required under by paragraph (2)(C), the Administrator 
        shall use the most current emissions data available at the time 
        of promulgation.
            ``(D) Notwithstanding any other provisions, the 
        Administrator may list under 111(b) any source category 
        identified in the inventory required by this subsection without 
        making a finding that the source category causes or contributes 
        significantly to, air pollution with may be reasonably 
        anticipated to endanger public health or welfare.
            ``(2) Standards and schedule.--(A) For each category 
        identified as provided in paragraph (1), the Administrator 
        shall promulgate standards of performance under section 111 for 
        the uncapped emissions of greenhouse gases from stationary 
        sources in that category and shall promulgate corresponding 
        regulations under section 111(d).
            ``(B) The Administrator shall promulgate standards as 
        required by this subsection for stationary sources in 
        categories identified as provided in paragraph (1) as 
        expeditiously as practicable, assuring that--
                    ``(i) standards for identified source categories 
                that, combined, emitted 80 percent or more of the 
                greenhouse gas emissions of the identified source 
                categories shall be promulgated not later than 3 years 
                after the date of enactment of this title and shall 
                include standards for natural gas extraction; and
                    ``(ii) for all other identified source categories--
                            ``(I) standards for not less than an 
                        additional 25 percent of the identified 
                        categories shall be promulgated not later than 
                        5 years after the date of enactment of this 
                        title;
                            ``(II) standards for not less than an 
                        additional 25 percent of the identified 
                        categories shall be promulgated not later than 
                        7 years after the date of enactment of this 
                        title; and
                            ``(III) standards for all the identified 
                        categories shall be promulgated not later than 
                        10 years after the date of enactment of this 
                        title.
            ``(C) Not later than 24 months after the date of enactment 
        of this title and after notice and opportunity for comment, the 
        Administrator shall publish a schedule establishing a date for 
        the promulgation of standards for each category of sources 
        identified pursuant to paragraph (1). The date for each 
        category shall be consistent with the requirements of 
        subparagraph (B). The determination of priorities for the 
        promulgation of standards pursuant to this paragraph is not a 
        rulemaking and shall not be subject to judicial review, except 
        that failure to promulgate any standard pursuant to the 
        schedule established by this paragraph shall be subject to 
        review under section 304(a)(2).
            ``(D) Notwithstanding section 307, no action of the 
        Administrator listing a source category under paragraph (1) 
        shall be a final agency action subject to judicial review, 
        except that any such action may be reviewed under section 307 
        when the Administrator issues performance standards for such 
        category.
    ``(b) Capped Sources.--No standard of performance shall be 
established under section 111 for capped greenhouse gas emissions from 
a capped source unless the Administrator determines that such standards 
are appropriate because of impacts, not including climate change 
effects. In promulgating a standard of performance under section 111 
for the emission from capped sources of any air pollutant that is not a 
greenhouse gas, the Administrator shall treat the emission of any 
greenhouse gas by those entities as a nonair quality public health and 
environmental impact within the meaning of section 111(a)(1).
    ``(c) Performance Standards.--For purposes of setting a performance 
standard for source categories identified pursuant to subsection (a)--
            ``(1) The Administrator shall take into account the goal of 
        reducing total United States greenhouse gas emissions as set 
        forth in section 702.
            ``(2) The Administrator may promulgate a design, equipment, 
        work practice, or operational standard, or any combination 
        thereof, under section 111 in lieu of a standard of performance 
        under that section without regard to any determination of 
        feasibility that would otherwise be required under section 
        111(h).
            ``(3) Notwithstanding any other provision, in setting the 
        level of each standard required by this section, the 
        Administrator shall take into account projections of allowance 
        prices, such that the marginal cost of compliance (expressed as 
        dollars per ton of carbon dioxide equivalent reduced) imposed 
        by the standard would not, in the judgement of the 
        Administrator, be expected to exceed the Administrator's 
        projected allowance prices over the time period spanning from 
        the date of initial compliance to the date that the next 
        revisions of the standard would come into effect pursuant to 
        the schedule under section 111(b)(1)(B).
    ``(d) Definitions.--In this section, the terms `uncapped greenhouse 
gas emissions' and `uncapped methane emissions' mean those greenhouse 
gas or methane emissions, respectively, to which section 722 would not 
have applied if the requirements of this title had been in effect for 
the same year as the emissions data upon which the list is based.
    ``(e) Study of the Effects of Performance Standards.--
            ``(1) Study.--The Administrator shall conduct a study of 
        the impacts of performance standards required under this 
        section, which shall evaluate the effect of such standards on 
        the--
                    ``(A) costs of achieving compliance with the 
                economy-wide reduction goals specified in section 702 
                and the reduction targets specified in section 703;
                    ``(B) available supply of offset credits; and
                    ``(C) ability to achieve the economy-wide reduction 
                goals specified in section 702 and any other benefits 
                of such standards.
            ``(2) Report.--The Administrator shall submit to the House 
        Energy and Commerce Committee a report that describes the 
        results of the study not later than 18 months after the 
        publication of the standards required under subsection 
        (a)(2)(B)(i).

                ``PART C--EXEMPTIONS FROM OTHER PROGRAMS

``SEC. 831. CRITERIA POLLUTANTS.

    ``No greenhouse gas may be listed under section 108(a) on the basis 
of its effect on climate change.

``SEC. 832. HAZARDOUS AIR POLLUTANTS.

    ``No greenhouse gas may be added to the list of hazardous air 
pollutants under section 112 unless such greenhouse gas meets the 
listing criteria of section 112(b) independent of its effects on 
climate change.

``SEC. 833. NEW SOURCE REVIEW.

    ``The provisions of part C of title I shall not apply to a 
greenhouse gas solely on the basis of its effect on climate change or 
regulation under title VII or this title.

``SEC. 834. TITLE V PERMITS.

    ``Notwithstanding any provision of title III or V, in determining 
whether a stationary source is required to apply for, or operate 
pursuant to, a permit under title V, the Administrator shall not 
consider the source's greenhouse gas emissions.

``SEC. 835. EXISTING PROCEEDINGS.

    ``Nothing in the American Clean Energy and Security Act of 2009, or 
the adoption thereof, shall affect the requirements to be applied in 
administrative proceedings or litigation initiated under the Clean Air 
Act prior to the date of enactment of the American Clean Energy and 
Security Act of 2009. The preceding sentence does not apply to any 
covered EGU that is subject to the requirements of section 812(b).''.

SEC. 332. HFC REGULATION.

    (a) In General.--Title VI of the Clean Air Act (42 U.S.C. 7671 et 
seq.) (relating to stratospheric ozone protection) is amended by adding 
at the end the following:

``SEC. 619. HYDROFLUOROCARBONS (HFCS).

    ``(a) Treatment as Class II, Group II Substances.--Except as 
otherwise provided in this section, hydrofluorocarbons shall be treated 
as class II substances for purposes of applying the provisions of this 
title. The Administrator shall establish two groups of class II 
substances. Class II, group I substances shall include all 
hydrochlorofluorocarbons (HCFCs) listed pursuant to section 602(b). 
Class II, group II substances shall include each of the following:
            ``(1) Hydrofluorocarbon-23 (HFC-23).
            ``(2) Hydrofluorocarbon-32 (HFC-32).
            ``(3) Hydrofluorocarbon-41 (HFC-41).
            ``(4) Hydrofluorocarbon-125 (HFC-125).
            ``(5) Hydrofluorocarbon-134 (HFC-134).
            ``(6) Hydrofluorocarbon-134a (HFC-134a).
            ``(7) Hydrofluorocarbon-143 (HFC-143).
            ``(8) Hydrofluorocarbon-143a (HFC-143a).
            ``(9) Hydrofluorocarbon-152 (HFC-152).
            ``(10) Hydrofluorocarbon-152a (HFC-152a).
            ``(11) Hydrofluorocarbon-227ea (HFC-227ea).
            ``(12) Hydrofluorocarbon-236cb (HFC-236cb).
            ``(13) Hydrofluorocarbon-236ea (HFC-236ea).
            ``(14) Hydrofluorocarbon-236fa (HFC-236fa).
            ``(15) Hydrofluorocarbon-245ca (HFC-245ca).
            ``(16) Hydrofluorocarbon-245fa (HFC-245fa).
            ``(17) Hydrofluorocarbon-365mfc (HFC-365mfc).
            ``(18) Hydrofluorocarbon-43-10mee (HFC-43-10mee).
            ``(19) Hydrofluoroolefin-1234yf (HFO-1234yf).
            ``(20) Hydrofluoroolefin-1234ze (HFO-1234ze).
Not later than 6 months after the date of enactment of this title, the 
Administrator shall publish an initial list of class II, group II 
substances, which shall include the substances listed in this 
subsection. The Administrator may add to the list of class II, group II 
substances any other substance used as a substitute for a class I or II 
substance if the Administrator determines that 1 metric ton of the gas 
makes the same or greater contribution to global warming over 100 years 
as 1 metric ton of carbon dioxide. Within 24 months after the date of 
enactment of this section, the Administrator shall amend the 
regulations under this title (including the regulations referred to in 
sections 603, 608, 609, 610, 611, 612, and 613) to apply to class II, 
group II substances.
    ``(b) Consumption and Production of Class II, Group II 
Substances.--
            ``(1) In general.--
                    ``(A) Consumption phase down.--In the case of class 
                II, group II substances, in lieu of applying section 
                605 and the regulations thereunder, the Administrator 
                shall promulgate regulations phasing down the 
                consumption of class II, group II substances in the 
                United States, and the importation of products 
                containing any class II, group II substance, in 
                accordance with this subsection within 18 months after 
                the date of enactment of this section. Effective 
                January 1, 2012, it shall be unlawful for any person to 
                produce any class II, group II substance, import any 
                class II, group II substance, or import any product 
                containing any class II, group II substance without 
                holding one consumption allowance or one destruction 
                offset credit for each carbon dioxide equivalent ton of 
                the class II, group II substance. Any person who 
                exports a class II, group II substance for which a 
                consumption allowance was retired may receive a refund 
                of that allowance from the Administrator following the 
                export.
                    ``(B) Production.--If the United States becomes a 
                party or otherwise adheres to a multilateral agreement, 
                including any amendment to the Montreal Protocol on 
                Substances That Deplete the Ozone Layer, that restricts 
                the production of class II, group II substances, the 
                Administrator shall promulgate regulations establishing 
                a baseline for the production of class II, group II 
                substances in the United States and phasing down the 
                production of class II, group II substances in the 
                United States, in accordance with such multilateral 
                agreement and subject to the same exceptions and other 
                provisions as are applicable to the phase down of 
                consumption of class II, group II substances under this 
                section (except that the Administrator shall not 
                require a person who obtains production allowances from 
                the Administrator to make payment for such allowances 
                if the person is making payment for a corresponding 
                quantity of consumption allowances of the same vintage 
                year). Upon the effective date of such regulations, it 
                shall be unlawful for any person to produce any class 
                II, group II substance without holding one consumption 
                allowance and one production allowance, or one 
                destruction offset credit, for each carbon dioxide 
                equivalent ton of the class II, group II substance.
                    ``(C) Integrity of cap.--To maintain the integrity 
                of the class II, group II cap, the Administrator may, 
                through rulemaking, limit the percentage of each 
                person's compliance obligation that may be met through 
                the use of destruction offset credits or banked 
                allowances.
                    ``(D) Counting of violations.--Each emission 
                allowance not held as required by this section shall be 
                a separate violation of this section.
            ``(2) Schedule.--Pursuant to the regulations promulgated 
        pursuant to paragraph (1), the number of class II, group II 
        consumption allowances established by the Administrator for 
        each calendar year beginning in 2012 shall be the following 
        percentage of the baseline, as established by the Administrator 
        pursuant to paragraph (3):

----------------------------------------------------------------------------------------------------------------
                    ``Calendar Year                                        Percent of Baseline
----------------------------------------------------------------------------------------------------------------
2012                                                     90
----------------------------------------------------------------------------------------------------------------
2013                                                     87.5
----------------------------------------------------------------------------------------------------------------
2014                                                     85
----------------------------------------------------------------------------------------------------------------
2015                                                     82.5
----------------------------------------------------------------------------------------------------------------
2016                                                     80
----------------------------------------------------------------------------------------------------------------
2017                                                     77.5
----------------------------------------------------------------------------------------------------------------
2018                                                     75
----------------------------------------------------------------------------------------------------------------
2019                                                     71
----------------------------------------------------------------------------------------------------------------
2020                                                     67
----------------------------------------------------------------------------------------------------------------
2021                                                     63
----------------------------------------------------------------------------------------------------------------
2022                                                     59
----------------------------------------------------------------------------------------------------------------
2023                                                     54
----------------------------------------------------------------------------------------------------------------
2024                                                     50
----------------------------------------------------------------------------------------------------------------
2025                                                     46
----------------------------------------------------------------------------------------------------------------
2026                                                     42
----------------------------------------------------------------------------------------------------------------
2027                                                     38
----------------------------------------------------------------------------------------------------------------
2028                                                     34
----------------------------------------------------------------------------------------------------------------
2029                                                     30
----------------------------------------------------------------------------------------------------------------
2030                                                     25
----------------------------------------------------------------------------------------------------------------
2031                                                     21
----------------------------------------------------------------------------------------------------------------
2032                                                     17
----------------------------------------------------------------------------------------------------------------
after 2032                                               15
----------------------------------------------------------------------------------------------------------------

            ``(3) Baseline.--(A) Within 12 months after the date of 
        enactment of this section, the Administrator shall promulgate 
        regulations to establish the baseline for purposes of paragraph 
        (2). The baseline shall be the sum, expressed in tons of carbon 
        dioxide equivalents, of--
                    ``(i) the annual average consumption of all class 
                II substances in calendar years 2004, 2005, and 2006; 
                plus
                    ``(ii) the annual average quantity of all class II 
                substances contained in imported products in calendar 
                years 2004, 2005, and 2006.
            ``(B) Notwithstanding subparagraph (A), if the 
        Administrator determines that the baseline is higher than 370 
        million metric tons of carbon dioxide equivalents, then the 
        Administrator shall establish the baseline at 370 million 
        metric tons of carbon dioxide equivalents.
            ``(C) Notwithstanding subparagraph (A), if the 
        Administrator determines that the baseline is lower than 280 
        million metric tons of carbon dioxide equivalents, then the 
        Administrator shall establish the baseline at 280 million 
        metric tons of carbon dioxide equivalents.
            ``(4) Distribution of allowances.--
                    ``(A) In general.--Pursuant to the regulations 
                promulgated under paragraph (1), for each calendar year 
                beginning in 2012, the Administrator shall sell 
                consumption allowances in accordance with this 
                paragraph.
                    ``(B) Establishment of pools.--The Administrator 
                shall establish two allowance pools. Eighty percent of 
                the consumption allowances available for a calendar 
                year shall be placed in the producer-importer pool, and 
                20 percent of the consumption allowances available for 
                a calendar year shall be placed in the secondary pool.
                    ``(C) Producer-importer pool.--
                            ``(i) Auction.--(I) For each calendar year, 
                        the Administrator shall offer for sale at 
                        auction the following percentage of the 
                        consumption allowances in the producer-importer 
                        pool:

----------------------------------------------------------------------------------------------------------------
                    ``Calendar Year                                   Percent Available for Auction
----------------------------------------------------------------------------------------------------------------
2012                                                     10
----------------------------------------------------------------------------------------------------------------
2013                                                     20
----------------------------------------------------------------------------------------------------------------
2014                                                     30
----------------------------------------------------------------------------------------------------------------
2015                                                     40
----------------------------------------------------------------------------------------------------------------
2016                                                     50
----------------------------------------------------------------------------------------------------------------
2017                                                     60
----------------------------------------------------------------------------------------------------------------
2018                                                     70
----------------------------------------------------------------------------------------------------------------
2019                                                     80
----------------------------------------------------------------------------------------------------------------
2020 and thereafter                                      90
----------------------------------------------------------------------------------------------------------------

                            ``(II) Any person who produced or imported 
                        any class II substance during calendar year 
                        2004, 2005, or 2006 may participate in the 
                        auction. No other persons may participate in 
                        the auction unless permitted to do so pursuant 
                        to subclause (III).
                            ``(III) Not later than three years after 
                        the date of the initial auction and from time 
                        to time thereafter, the Administrator shall 
                        determine through rulemaking whether any 
                        persons who did not produce or import a class 
                        II substance during calendar year 2004, 2005, 
                        or 2006 will be permitted to participate in 
                        future auctions. The Administrator shall base 
                        this determination on the duration, 
                        consistency, and scale of such person's 
                        purchases of consumption allowances in the 
                        secondary pool under subparagraph (D), as well 
                        as economic or technical hardship and other 
                        factors deemed relevant by the Administrator.
                            ``(IV) The Administrator shall set a 
                        minimum bid per consumption allowance of the 
                        following:
                                    ``(aa) For vintage year 2012, 
                                $1.00.
                                    ``(bb) For vintage year 2013, 
                                $1.20.
                                    ``(cc) For vintage year 2014, 
                                $1.40.
                                    ``(dd) For vintage year 2015, 
                                $1.60.
                                    ``(ee) For vintage year 2016, 
                                $1.80.
                                    ``(ff) For vintage year 2017, 
                                $2.00.
                                    ``(gg) For vintage year 2018 and 
                                thereafter, $2.00 adjusted for 
                                inflation after vintage year 2017 based 
                                upon the producer price index as 
                                published by the Department of 
                                Commerce.
                            ``(ii) Non-auction sale.--(I) For each 
                        calendar year, as soon as practicable after 
                        auction, the Administrator shall offer for sale 
                        the remaining consumption allowances in the 
                        producer-importer pool at the following prices:
                                    ``(aa) A fee of $1.00 per vintage 
                                year 2012 allowance.
                                    ``(bb) A fee of $1.20 per vintage 
                                year 2013 allowance.
                                    ``(cc) A fee of $1.40 per vintage 
                                year 2014 allowance.
                                    ``(dd) For each vintage year 2015 
                                allowance, a fee equal to the average 
                                of $1.10 and the auction clearing price 
                                for vintage year 2014 allowances.
                                    ``(ee) For each vintage year 2016 
                                allowance, a fee equal to the average 
                                of $1.30 and the auction clearing price 
                                for vintage year 2015 allowances.
                                    ``(ff) For each vintage year 2017 
                                allowance, a fee equal to the average 
                                of $1.40 and the auction clearing price 
                                for vintage year 2016 allowances.
                                    ``(gg) For each allowance of 
                                vintage year 2018 and subsequent 
                                vintage years, a fee equal to the 
                                auction clearing price for that vintage 
                                year.
                            ``(II) The Administrator shall offer to 
                        sell the remaining consumption allowances in 
                        the producer-importer pool to producers of 
                        class II, group II substances and importers of 
                        class II, group II substances in proportion to 
                        their relative allocation share.
                            ``(III) Such allocation share for such sale 
                        shall be determined by the Administrator using 
                        such producer's or importer's annual average 
                        data on class II substances from calendar years 
                        2004, 2005, and 2006, on a carbon dioxide 
                        equivalent basis, and--
                                    ``(aa) shall be based on a 
                                producer's production, plus 
                                importation, plus acquisitions and 
                                purchases from persons who produced 
                                class II substances in the United 
                                States during calendar years 2004, 
                                2005, or 2006, less exportation, less 
                                transfers and sales to persons who 
                                produced class II substances in the 
                                United States during calendar years 
                                2004, 2005, or 2006; and
                                    ``(bb) for an importer of class II 
                                substances that did not produce in the 
                                United States any class II substance 
                                during calendar years 2004, 2005, and 
                                2006, shall be based on the importer's 
                                importation less exportation.
                        For purposes of item (aa), the Administrator 
                        shall account for 100 percent of class II, 
                        group II substances and 60 percent of class II, 
                        group I substances. For purposes of item (bb), 
                        the Administrator shall account for 100 percent 
                        of class II, group II substances and 100 
                        percent of class II, group I substances.
                            ``(IV) Any consumption allowances made 
                        available for nonauction sale to a specific 
                        producer or importer of class II, group II 
                        substances but not purchased by the specific 
                        producer or importer shall be made available 
                        for sale to any producer or importer of class 
                        II substances during calendar years 2004, 2005, 
                        and 2006. If demand for such consumption 
                        allowances exceeds supply of such consumption 
                        allowances, the Administrator shall develop and 
                        utilize criteria for the sale of such 
                        consumption allowances that may include pro 
                        rata shares, historic production and 
                        importation, economic or technical hardship, or 
                        other factors deemed relevant by the 
                        Administrator. If the supply of such 
                        consumption allowances exceeds demand, the 
                        Administrator may offer such consumption 
                        allowances for sale in the secondary pool as 
                        set forth in subparagraph (D).
                    ``(D) Secondary pool.--(i) For each calendar year, 
                as soon as practicable after the auction required in 
                subparagraph (C), the Administrator shall offer for 
                sale the consumption allowances in the secondary pool 
                at the prices listed in subparagraph (C)(ii).
                    ``(ii) The Administrator shall accept applications 
                for purchase of secondary pool consumption allowances 
                from--
                            ``(I) importers of products containing 
                        class II, group II substances;
                            ``(II) persons who purchased any class II, 
                        group II substance directly from a producer or 
                        importer of class II, group II substances for 
                        use in a product containing a class II, group 
                        II substance, a manufacturing process, or a 
                        reclamation process;
                            ``(III) persons who did not produce or 
                        import a class II substance during calendar 
                        year 2004, 2005, or 2006, but who the 
                        Administrator determines have subsequently 
                        taken significant steps to produce or import a 
                        substantial quantity of any class II, group II 
                        substance; and
                            ``(IV) persons who produced or imported any 
                        class II substance during calendar year 2004, 
                        2005, or 2006.
                    ``(iii) If the supply of consumption allowances in 
                the secondary pool equals or exceeds the demand for 
                consumption allowances in the secondary pool as 
                presented in the applications for purchase, the 
                Administrator shall sell the consumption allowances in 
                the secondary pool to the applicants in the amounts 
                requested in the applications for purchase. Any 
                consumption allowances in the secondary pool not 
                purchased in a calendar year may be rolled over and 
                added to the quantity available in the secondary pool 
                in the following year.
                    ``(iv) If the demand for consumption allowances in 
                the secondary pool as presented in the applications for 
                purchase exceeds the supply of consumption allowances 
                in the secondary pool, the Administrator shall sell the 
                consumption allowances as follows:
                            ``(I) The Administrator shall first sell 
                        the consumption allowances in the secondary 
                        pool to any importers of products containing 
                        class II, group II substances in the amounts 
                        requested in their applications for purchase. 
                        If the demand for such consumption allowances 
                        exceeds supply of such consumption allowances, 
                        the Administrator shall develop and utilize 
                        criteria for the sale of such consumption 
                        allowances among importers of products 
                        containing class II, group II substances that 
                        may include pro rata shares, historic 
                        importation, economic or technical hardship, or 
                        other factors deemed relevant by the 
                        Administrator.
                            ``(II) The Administrator shall next sell 
                        any remaining consumption allowances to persons 
                        identified in subclauses (II) and (III) of 
                        clause (ii) in the amounts requested in their 
                        applications for purchase. If the demand for 
                        such consumption allowances exceeds remaining 
                        supply of such consumption allowances, the 
                        Administrator shall develop and utilize 
                        criteria for the sale of such consumption 
                        allowances among subclauses (II) and (III) 
                        applicants that may include pro rata shares, 
                        historic use, economic or technical hardship, 
                        or other factors deemed relevant by the 
                        Administrator.
                            ``(III) The Administrator shall then sell 
                        any remaining consumption allowances to persons 
                        who produced or imported any class II substance 
                        during calendar year 2004, 2005, or 2006 in the 
                        amounts requested in their applications for 
                        purchase. If demand for such consumption 
                        allowances exceeds remaining supply of such 
                        consumption allowances, the Administrator shall 
                        develop and utilize criteria for the sale of 
                        such consumption allowances that may include 
                        pro rata shares, historic production and 
                        importation, economic or technical hardship, or 
                        other factors deemed relevant by the 
                        Administrator.
                            ``(IV) Each person who purchases 
                        consumption allowances in a non-auction sale 
                        under this subparagraph shall be required to 
                        disclose the person or entity sponsoring or 
                        benefitting from the purchases if such person 
                        or entity is, in whole or in part, other than 
                        the purchaser or the purchaser's employer.
                    ``(E) Discretion to withhold allowances.--Nothing 
                in this paragraph prevents the Administrator from 
                exercising discretion to withhold and retire 
                consumption allowances that would otherwise be 
                available for auction or nonauction sale. Not later 
                than 18 months after the date of enactment of this 
                section, the Administrator shall promulgate regulations 
                establishing criteria for withholding and retiring 
                consumption allowances.
            ``(5) Banking.--A consumption allowance or destruction 
        offset credit may be used to meet the compliance obligation 
        requirements of paragraph (1) in--
                    ``(A) the vintage year for the allowance or 
                destruction offset credit; or
                    ``(B) any calendar year subsequent to the vintage 
                year for the allowance or destruction offset credit.
            ``(6) Auctions.--
                    ``(A) Initial regulations.--Not later than 18 
                months after the date of enactment of this section, the 
                Administrator shall promulgate regulations governing 
                the auction of allowances under this section. Such 
                regulations shall include the following requirements:
                            ``(i) Frequency; first auction.--Auctions 
                        shall be held one time per year at regular 
                        intervals, with the first auction to be held no 
                        later than October 31, 2011.
                            ``(ii) Auction format.--Auctions shall 
                        follow a single-round, sealed-bid, uniform 
                        price format.
                            ``(iii) Financial assurance.--The 
                        Administrator may establish financial assurance 
                        requirements to ensure that auction 
                        participants can and will perform on their 
                        bids.
                            ``(iv) Disclosure of beneficial 
                        ownership.--Each bidder in the auction shall be 
                        required to disclose the person or entity 
                        sponsoring or benefitting from the bidder's 
                        participation in the auction if such person or 
                        entity is, in whole or in part, other than the 
                        bidder or the bidder's employer.
                            ``(v) Publication of information.--After 
                        the auction, the Administrator shall, in a 
                        timely fashion, publish the number of bidders, 
                        number of winning bidders, the quantity of 
                        allowances sold, and the auction clearing 
                        price.
                            ``(vi) Bidding limits in 2012.--In the 
                        vintage year 2012 auction, no auction 
                        participant may, directly or in concert with 
                        another participant, bid for or purchase more 
                        allowances offered for sale at the auction than 
                        the greater of--
                                    ``(I) the number of allowances 
                                which, when added to the number of 
                                allowances available for purchase by 
                                the participant in the producer-
                                importer pool non-auction sale, would 
                                equal the participant's annual average 
                                consumption of class II, group II 
                                substances in calendar years 2004, 
                                2005, and 2006; or
                                    ``(II) the number of allowances 
                                equal to the product of--
                                            ``(aa) 1.20 multiplied by 
                                        the participant's allocation 
                                        share of the producer-importer 
                                        pool non-auction sale as 
                                        determined under paragraph 
                                        (4)(C)(ii); and
                                            ``(bb) the number of 
                                        vintage year 2012 allowances 
                                        offered at auction.
                            ``(vii) Bidding limits in 2013.--In the 
                        vintage year 2013 auction, no auction 
                        participant may, directly or in concert with 
                        another participant, bid for or purchase more 
                        allowances offered for sale at the auction than 
                        the product of--
                                    ``(I) 1.15 multiplied by the ratio 
                                of the total number of vintage year 
                                2012 allowances purchased by the 
                                participant from the auction and from 
                                the producer-importer pool non-auction 
                                sale to the total number of vintage 
                                year 2012 allowances in the producer-
                                importer pool; and
                                    ``(II) the number of vintage year 
                                2013 allowances offered at auction.
                            ``(viii) Bidding limits in subsequent 
                        years.--In the auctions for vintage year 2014 
                        and subsequent vintage years, no auction 
                        participant may, directly or in concert with 
                        another participant, bid for or purchase more 
                        allowances offered for sale at the auction than 
                        the product of--
                                    ``(I) 1.15 multiplied by the ratio 
                                of the highest number of allowances 
                                held by the participant in any of the 
                                three prior vintage years to meet its 
                                compliance obligation under paragraph 
                                (1) to the total number of allowances 
                                in the producer-importer pool for such 
                                vintage year; and
                                    ``(II) the number of allowances 
                                offered at auction for that vintage 
                                year.
                            ``(ix) Other requirements.--The 
                        Administrator may include in the regulations 
                        such other requirements or provisions as the 
                        Administrator considers necessary to promote 
                        effective, efficient, transparent, and fair 
                        administration of auctions under this section.
                    ``(B) Revision of regulations.--The Administrator 
                may, at any time, revise the initial regulations 
                promulgated under subparagraph (A) based on the 
                Administrator's experience in administering allowance 
                auctions. Such revised regulations need not meet the 
                requirements identified in subparagraph (A) if the 
                Administrator determines that an alternative auction 
                design would be more effective, taking into account 
                factors including costs of administration, 
                transparency, fairness, and risks of collusion or 
                manipulation. In determining whether and how to revise 
                the initial regulations under this paragraph, the 
                Administrator shall not consider maximization of 
                revenues to the Federal Government.
                    ``(C) Delegation or contract.--Pursuant to 
                regulations under this section, the Administrator may, 
                by delegation or contract, provide for the conduct of 
                auctions under the Administrator's supervision by other 
                departments or agencies of the Federal Government or by 
                nongovernmental agencies, groups, or organizations.
            ``(7) Payments for allowances.--
                    ``(A) Initial regulations.--Not later than 18 
                months after the date of enactment of this section, the 
                Administrator shall promulgate regulations governing 
                the payment for allowances purchased in auction and 
                non-auction sales under this section. Such regulations 
                shall include the requirement that, in the event that 
                full payment for purchased allowances is not made on 
                the date of purchase, equal payments shall be made one 
                time per calendar quarter with all payments for 
                allowances of a vintage year made by the end of that 
                vintage year.
                    ``(B) Revision of regulations.--The Administrator 
                may, at any time, revise the initial regulations 
                promulgated under subparagraph (A) based on the 
                Administrator's experience in administering collection 
                of payments. Such revised regulations need not meet the 
                requirements identified in subparagraph (A) if the 
                Administrator determines that an alternative payment 
                structure or frequency would be more effective, taking 
                into account factors including cost of administration, 
                transparency, and fairness. In determining whether and 
                how to revise the initial regulations under this 
                paragraph, the Administrator shall not consider 
                maximization of revenues to the Federal Government.
                    ``(C) Penalties for non-payment.--Failure to pay 
                for purchased allowances in accordance with the 
                regulations promulgated pursuant to this paragraph 
                shall be a violation of the requirements of subsection 
                (b). Section 113(c)(3) shall apply in the case of any 
                person who knowingly fails to pay for purchased 
                allowances in accordance with the regulations 
                promulgated pursuant to this paragraph.
            ``(8) Imported products.--If the United States becomes a 
        party or otherwise adheres to a multilateral agreement, 
        including any amendment to the Montreal Protocol on Substances 
        That Deplete the Ozone Layer, which restricts the production 
        and consumption of class II, group II substances--
                    ``(A) as of the date on which such agreement or 
                amendment enters into force, it shall no longer be 
                unlawful for any person to import from a party to such 
                agreement or amendment any product containing any class 
                II, group II substance whose production and consumption 
                are regulated by such agreement or amendment without 
                holding one consumption allowance or one destruction 
                offset credit for each carbon dioxide equivalent ton of 
                the class II, group II substance;
                    ``(B) the Administrator shall promulgate 
                regulations within 12 months of the date the United 
                States becomes a party or otherwise adheres to such 
                agreement or amendment, or the date on which such 
                agreement or amendment enters into force, whichever is 
                later, to establish a new baseline for purposes of 
                paragraph (2), which new baseline shall be the original 
                baseline less the carbon dioxide equivalent of the 
                annual average quantity of any class II substances 
                regulated by such agreement or amendment contained in 
                products imported from parties to such agreement or 
                amendment in calendar years 2004, 2005, and 2006;
                    ``(C) as of the date on which such agreement or 
                amendment enters into force, no person importing any 
                product containing any class II, group II substance 
                may, directly or in concert with another person, 
                purchase any consumption allowances for sale by the 
                Administrator for the importation of products from a 
                party to such agreement or amendment that contain any 
                class II, group II substance restricted by such 
                agreement or amendment; and
                    ``(D) the Administrator may adjust the two 
                allowance pools established in paragraph (4) such that 
                up to 90 percent of the consumption allowances 
                available for a calendar year are placed in the 
                producer-importer pool with the remaining consumption 
                allowances placed in the secondary pool.
            ``(9) Offsets.--
                    ``(A) Chlorofluorocarbon destruction.--Within 18 
                months after the date of enactment of this section, the 
                Administrator shall promulgate regulations to provide 
                for the issuance of offset credits for the destruction, 
                in the calendar year 2012 or later, of 
                chlorofluorocarbons in the United States. The 
                Administrator shall establish and distribute to the 
                destroying entity a quantity of destruction offset 
                credits equal to 0.8 times the number of tons of carbon 
                dioxide equivalents of reduction achieved through the 
                destruction. No destruction offset credits shall be 
                established for the destruction of a class II, group II 
                substance.
                    ``(B) Definition.--For purposes of this paragraph, 
                the term `destruction' means the conversion of a 
                substance by thermal, chemical, or other means to 
                another substance with little or no carbon dioxide 
                equivalent value and no ozone depletion potential.
                    ``(C) Regulations.--The regulations promulgated 
                under this paragraph shall include standards and 
                protocols for project eligibility, certification of 
                destroyers, monitoring, tracking, destruction 
                efficiency, quantification of project and baseline 
                emissions and carbon dioxide equivalent value, and 
                verification. The Administrator shall ensure that 
                destruction offset credits represent real and 
                verifiable destruction of chlorofluorocarbons or other 
                class I or class II, group I, substances authorized 
                under subparagraph (D).
                    ``(D) Other substances.--The Administrator may 
                promulgate regulations to add to the list of class I 
                and class II, group I, substances that may be destroyed 
                for destruction offset credits, taking into account a 
                candidate substance's carbon dioxide equivalent value, 
                ozone depletion potential, prevalence in banks in the 
                United States, and emission rates, as well as the need 
                for additional cost containment under the class II, 
                group II cap and the integrity of the class II, group 
                II cap. The Administrator shall not add a class I or 
                class II, group I substance to the list if the 
                consumption of the substance has not been completely 
                phased-out internationally (except for essential use 
                exemptions or other similar exemptions) pursuant to the 
                Montreal Protocol.
                    ``(E) Extension of offsets.--(i) At any time after 
                the Administrator promulgates regulations pursuant to 
                subparagraph (A), the Administrator may add the types 
                of destruction projects authorized to receive 
                destruction offset credits under this paragraph to the 
                list of types of projects eligible for offset credits 
                under section 733. Nothing in this paragraph shall 
                affect the issuance of offset credits under section 
                740.
                    ``(ii) The Administrator shall not make the 
                addition under clause (i) unless the Administrator 
                finds that insufficient destruction is occurring or is 
                projected to occur under this paragraph and that the 
                addition would increase destruction.
                    ``(iii) In no event shall more than one destruction 
                offset credit be issued under title VII and this 
                section for the destruction of the same quantity of a 
                substance.
            ``(10) Legal status of allowances and credits.--None of the 
        following constitutes a property right:
                    ``(A) A production or consumption allowance.
                    ``(B) A destruction offset credit.
    ``(c) Deadlines for Compliance.--Notwithstanding the deadlines 
specified for class II substances in sections 608, 609, 610, 612, and 
613 that occur prior to January 1, 2009, the deadline for promulgating 
regulations under those sections for class II, group II substances 
shall be January 1, 2012.
    ``(d) Exceptions for Essential Uses.--Notwithstanding any phase 
down of production and consumption required by this section, to the 
extent consistent with any applicable multilateral agreement to which 
the United States is a party or otherwise adheres, the Administrator 
may provide the following exceptions for essential uses:
            ``(1) Medical devices.--The Administrator, after notice and 
        opportunity for public comment, and in consultation with the 
        Commissioner of the Food and Drug Administration, may provide 
        an exception for the production and consumption of class II, 
        group II substances solely for use in medical devices.
            ``(2) Aviation safety.--The Administrator, after notice and 
        opportunity for public comment, may authorize the production 
        and consumption of limited quantities of class II, group II 
        substances solely for the purposes of aviation safety if the 
        Administrator of the Federal Aviation Administration, in 
        consultation with the Administrator, determines that no safe 
        and effective substitute has been developed and that such 
        authorization is necessary for aviation safety purposes.
    ``(e) Developing Countries.--Notwithstanding any phase down of 
production required by this section, the Administrator, after notice 
and opportunity for public comment, may authorize the production of 
limited quantities of class II, group II substances in excess of the 
amounts otherwise allowable under this section solely for export to, 
and use in, developing countries. Any production authorized under this 
subsection shall be solely for purposes of satisfying the basic 
domestic needs of such countries as provided in applicable 
international agreements, if any, to which the United States is a party 
or otherwise adheres.
    ``(f) National Security; Fire Suppression, etc.--The provisions of 
subsection (f) and paragraphs (1) and (2) of subsection (g) of section 
604 shall apply to any consumption and production phase down of class 
II, group II substances in the same manner and to the same extent, 
consistent with any applicable international agreement to which the 
United States is a party or otherwise adheres, as such provisions apply 
to the substances specified in such subsection.
    ``(g) Accelerated Schedule.--In lieu of section 606, the provisions 
of paragraphs (1), (2), and (3) of this subsection shall apply in the 
case of class II, group II substances.
            ``(1) In general.--The Administrator shall promulgate 
        initial regulations not later than 18 months after the date of 
        enactment of this section, and revised regulations any time 
        thereafter, which establish a schedule for phasing down the 
        consumption (and, if the condition in subsection (b)(1)(B) is 
        met, the production) of class II, group II substances that is 
        more stringent than the schedule set forth in this section if, 
        based on the availability of substitutes, the Administrator 
        determines that such more stringent schedule is practicable, 
        taking into account technological achievability, safety, and 
        other factors the Administrator deems relevant, or if the 
        Montreal Protocol, or any applicable international agreement to 
        which the United States is a party or otherwise adheres, is 
        modified or established to include a schedule or other 
        requirements to control or reduce production, consumption, or 
        use of any class II, group II substance more rapidly than the 
        applicable schedule under this section.
            ``(2) Petition.--Any person may submit a petition to 
        promulgate regulations under this subsection in the same manner 
        and subject to the same procedures as are provided in section 
        606(b).
            ``(3) Inconsistency.--If the Administrator determines that 
        the provisions of this section regarding banking, allowance 
        rollover, or destruction offset credits create a significant 
        potential for inconsistency with the requirements of any 
        applicable international agreement to which the United States 
        is a party or otherwise adheres, the Administrator may 
        promulgate regulations restricting the availability of banking, 
        allowance rollover, or destruction offset credits to the extent 
        necessary to avoid such inconsistency.
    ``(h) Exchange.--Section 607 shall not apply in the case of class 
II, group II substances. Production and consumption allowances for 
class II, group II substances may be freely exchanged or sold but may 
not be converted into allowances for class II, group I substances.
    ``(i) Labeling.--(1) In applying section 611 to products containing 
or manufactured with class II, group II substances, in lieu of the 
words `destroying ozone in the upper atmosphere' on labels required 
under section 611 there shall be substituted the words `contributing to 
global warming'.
    ``(2) The Administrator may, through rulemaking, exempt from the 
requirements of section 611 products containing or manufactured with 
class II, group II substances determined to have little or no carbon 
dioxide equivalent value compared to other substances used in similar 
products.
    ``(j) Nonessential Products.--For the purposes of section 610, 
class II, group II substances shall be regulated under section 610(b), 
except that in applying section 610(b) the word `hydrofluorocarbon' 
shall be substituted for the word `chlorofluorocarbon' and the term 
`class II, group II' shall be substituted for the term `class I'. Class 
II, group II substances shall not be subject to the provisions of 
section 610(d).
    ``(k) International Transfers.--In the case of class II, group II 
substances, in lieu of sections 616(a) and 616(b), this subsection 
shall apply. To the extent consistent with any applicable international 
agreement to which the United States is a party or otherwise adheres, 
including any amendment to the Montreal Protocol, the United States may 
engage in transfers with other parties to such agreement or amendment 
under the following conditions:
            ``(1) The United States may transfer production allowances 
        to another party to such agreement or amendment if, at the time 
        of the transfer, the Administrator establishes revised 
        production limits for the United States accounting for the 
        transfer in accordance with regulations promulgated pursuant to 
        this subsection.
            ``(2) The United States may acquire production allowances 
        from another party to such agreement or amendment if, at the 
        time of the transfer, the Administrator finds that the other 
        party has revised its domestic production limits in the same 
        manner as provided with respect to transfers by the United 
        States in the regulations promulgated pursuant to this 
        subsection.
    ``(l) Relationship to Other Laws.--
            ``(1) State laws.--For purposes of section 116, the 
        requirements of this section for class II, group II substances 
        shall be treated as requirements for the control and abatement 
        of air pollution.
            ``(2) International agreements.--Section 614 shall apply to 
        the provisions of this section concerning class II, group II 
        substances, except that for the words `Montreal Protocol' there 
        shall be substituted the words `Montreal Protocol, or any 
        applicable international agreement to which the United States 
        is a party or otherwise adheres that restricts the production 
        or consumption of class II, group II substances,' and for the 
        words `Article 4 of the Montreal Protocol' there shall be 
        substituted `any provision of such international agreement 
        regarding trade with non-parties'.
            ``(3) Federal facilities.--For purposes of section 118, the 
        requirements of this section for class II, group II substances 
        and corresponding State, interstate, and local requirements, 
        administrative authority, and process and sanctions shall be 
        treated as requirements for the control and abatement of air 
        pollution within the meaning of section 118.
    ``(m) Carbon Dioxide Equivalent Value.--(1) In lieu of section 
602(e), the provisions of this subsection shall apply in the case of 
class II, group II substances. Simultaneously with establishing the 
list of class II, group II substances, and simultaneously with any 
addition to that list, the Administrator shall publish the carbon 
dioxide equivalent value of each listed class II, group II substance, 
based on a determination of the number of metric tons of carbon dioxide 
that makes the same contribution to global warming over 100 years as 1 
metric ton of each class II, group II substance.
    ``(2) Not later than February 1, 2017, and not less than every 5 
years thereafter, the Administrator shall--
            ``(A) review, and if appropriate, revise the carbon dioxide 
        equivalent values established for class II, group II substances 
        based on a determination of the number of metric tons of carbon 
        dioxide that makes the same contributions to global warming 
        over 100 years as 1 metric ton of each class II, group II 
        substance; and
            ``(B) publish in the Federal Register the results of that 
        review and any revisions.
    ``(3) A revised determination published in the Federal Register 
under paragraph (2)(B) shall take effect for production of class II, 
group II substances, consumption of class II, group II substances, and 
importation of products containing class II, group II substances 
starting on January 1 of the first calendar year starting at least 9 
months after the date on which the revised determination was published.
    ``(4) The Administrator may decrease the frequency of review and 
revision under paragraph (2) if the Administrator determines that such 
decrease is appropriate in order to synchronize such review and 
revisions with any similar review process carried out pursuant to the 
United Nations Framework Convention on Climate Change, an agreement 
negotiated under that convention, The Vienna Convention for the 
Protection of the Ozone Layer, or an agreement negotiated under that 
convention, except that in no event shall the Administrator carry out 
such review and revision any less frequently than every 10 years.
    ``(n) Reporting Requirements.--In lieu of subsections (b) and (c) 
of section 603, paragraphs (1) and (2) of this subsection shall apply 
in the case of class II, group II substances:
            ``(1) In general.--On a quarterly basis, or such other 
        basis (not less than annually) as determined by the 
        Administrator, each person who produced, imported, or exported 
        a class II, group II substance, or who imported a product 
        containing a class II, group II substance, shall file a report 
        with the Administrator setting forth the carbon dioxide 
        equivalent amount of the substance that such person produced, 
        imported, or exported, as well as the amount that was contained 
        in products imported by that person, during the preceding 
        reporting period. Each such report shall be signed and attested 
        by a responsible officer. If all other reporting is complete, 
        no such report shall be required from a person after April 1 of 
        the calendar year after such person permanently ceases 
        production, importation, and exportation of the substance, as 
        well as importation of products containing the substance, and 
        so notifies the Administrator in writing. If the United States 
        becomes a party or otherwise adheres to a multilateral 
        agreement, including any amendment to the Montreal Protocol on 
        Substances That Deplete the Ozone Layer, that restricts the 
        production and consumption of class II, group II substances, 
        then, if all other reporting is complete, no such report shall 
        be required from a person with respect to importation from 
        parties to such agreement or amendment of products containing 
        any class II, group II substance restricted by such agreement 
        or amendment, after April 1 of the calendar year following the 
        year during which such agreement or amendment enters into 
        force.
            ``(2) Baseline reports for class ii, group ii substances.--
                    ``(A) In general.--Unless such information has been 
                previously reported to the Administrator, on the date 
                on which the first report under paragraph (1) of this 
                subsection is required to be filed, each person who 
                produced, imported, or exported a class II, group II 
                substance, or who imported a product containing a class 
                II substance, (other than a substance added to the list 
                of class II, group II substances after the publication 
                of the initial list of such substances under this 
                section), shall file a report with the Administrator 
                setting forth the amount of such substance that such 
                person produced, imported, exported, or that was 
                contained in products imported by that person, during 
                each of calendar years 2004, 2005, and 2006.
                    ``(B) Producers.--In reporting under subparagraph 
                (A), each person who produced in the United States a 
                class II substance during calendar years 2004, 2005, or 
                2006 shall--
                            ``(i) report all acquisitions or purchases 
                        of class II substances during each of calendar 
                        years 2004, 2005, and 2006 from all other 
                        persons who produced in the United States a 
                        class II substance during calendar years 2004, 
                        2005, or 2006, and supply evidence of such 
                        acquisitions and purchases as deemed necessary 
                        by the Administrator; and
                            ``(ii) report all transfers or sales of 
                        class II substances during each of calendar 
                        years 2004, 2005, and 2006 to all other persons 
                        who produced in the United States a class II 
                        substance during calendar years 2004, 2005, or 
                        2006, and supply evidence of such transfers and 
                        sales as deemed necessary by the Administrator.
                    ``(C) Added substances.--In the case of a substance 
                added to the list of class II, group II substances 
                after publication of the initial list of such 
                substances under this section, each person who 
                produced, imported, exported, or imported products 
                containing such substance in calendar year 2004, 2005, 
                or 2006 shall file a report with the Administrator 
                within 180 days after the date on which such substance 
                is added to the list, setting forth the amount of the 
                substance that such person produced, imported, and 
                exported, as well as the amount that was contained in 
                products imported by that person, in calendar years 
                2004, 2005, and 2006.
    ``(o) Stratospheric Ozone and Climate Protection Fund.--
            ``(1) In general.--There is established in the Treasury of 
        the United States a Stratospheric Ozone and Climate Protection 
        Fund.
            ``(2) Deposits.--The Administrator shall deposit all 
        proceeds from the auction and non-auction sale of allowances 
        under this section into the Stratospheric Ozone and Climate 
        Protection Fund.
            ``(3) Use.--Amounts deposited into the Stratospheric Ozone 
        and Climate Protection Fund shall be available, subject to 
        appropriations, exclusively for the following purposes:
                    ``(A) Recovery, recycling, and reclamation.--The 
                Administrator may utilize funds to establish a program 
                to incentivize the recovery, recycling, and reclamation 
                of any Class II substances in order to reduce emissions 
                of such substances.
                    ``(B) Multilateral fund.--If the United States 
                becomes a party or otherwise adheres to a multilateral 
                agreement, including any amendment to the Montreal 
                Protocol on Substances That Deplete the Ozone Layer, 
                which restricts the production and consumption of class 
                II, group II substances, the Administrator may utilize 
                funds to meet any related contribution obligation of 
                the United States to the Multilateral Fund for the 
                Implementation of the Montreal Protocol or similar 
                multilateral fund established under such multilateral 
                agreement.
                    ``(C) Best-in-class appliances deployment 
                program.--The Secretary of Energy is authorized to 
                utilize funds to carry out the purposes of section 214 
                of the American Clean Energy and Security Act of 2009.
                    ``(D) Low global warming product transition 
                assistance program.--
                            ``(i) In general.--The Administrator, in 
                        consultation with the Secretary of Energy, may 
                        utilize funds in fiscal years 2012 through 2022 
                        to establish a program to provide financial 
                        assistance to manufacturers of products 
                        containing class II, group II substances to 
                        facilitate the transition to products that 
                        contain or utilize alternative substances with 
                        no or low carbon dioxide equivalent value and 
                        no ozone depletion potential.
                            ``(ii) Definition.--In this subparagraph, 
                        the term `products' means refrigerators, 
                        freezers, dehumidifiers, air conditioners, foam 
                        insulation, technical aerosols, fire protection 
                        systems, and semiconductors.
                            ``(iii) Financial assistance.--The 
                        Administrator may provide financial assistance 
                        to manufacturers pursuant to clause (i) for--
                                    ``(I) the design and configuration 
                                of new consumer products that use 
                                alternative substances with no or low 
                                carbon dioxide equivalent value and no 
                                ozone depletion potential; and
                                    ``(II) the redesign and retooling 
                                of facilities for the manufacture of 
                                consumer products in the United States 
                                that use alternative substances with no 
                                or low carbon dioxide equivalent value 
                                and no ozone depletion potential.
                            ``(iv) Reports.--For any fiscal year during 
                        which the Administrator provides financial 
                        assistance pursuant to this subparagraph, the 
                        Administrator shall submit a report to the 
                        Congress within 3 months of the end of such 
                        fiscal year detailing the amounts, recipients, 
                        specific purposes, and results of the financial 
                        assistance provided.''
    (b) Table of Contents.--The table of contents of title VI of the 
Clean Air Act (42 U.S.C. 7671 et seq.) is amended by adding the 
following new item at the end thereof:

``Sec. 619. Hydrofluorocarbons (HFCs).''.
    (c) Fire Suppression Agents.--Section 605(a) of the Clean Air Act 
(42 U.S.C. 7671(a)) is amended--
            (1) by striking ``or'' at the end of paragraph (2);
            (2) by striking the period at the end of paragraph (3) and 
        inserting ``; or''; and
            (3) by adding the following new paragraph after paragraph 
        (3):
            ``(4) is listed as acceptable for use as a fire suppression 
        agent for nonresidential applications in accordance with 
        section 612(c).''.
    (d) Motor Vehicle Air Conditioners.--
            (1) Section 609(e) of the Clean Air Act (42 U.S.C. 
        7671h(e)) is amended by inserting ``, group I'' after each 
        reference to ``class II''.
            (2) Section 609 of the Clean Air Act (42 U.S.C. 7671h) is 
        amended by adding the following new subsection after subsection 
        (e):
    ``(f) Class II, Group II Substances.--
            ``(1) Repair.--The Administrator may promulgate regulations 
        establishing requirements for repair of motor vehicle air 
        conditioners prior to adding a class II, group II substance.
            ``(2) Small containers.--(A) The Administrator may 
        promulgate regulations establishing servicing practices and 
        procedures for recovery of class II, group II substances from 
        containers which contain less than 20 pounds of such class II, 
        group II substances.
            ``(B) Not later than 18 months after enactment of this 
        subsection, the Administrator shall either promulgate 
        regulations requiring that containers which contain less than 
        20 pounds of a class II, group II substance be equipped with a 
        device or technology that limits refrigerant emissions and 
        leaks from the container and limits refrigerant emissions and 
        leaks during the transfer of refrigerant from the container to 
        the motor vehicle air conditioner or issue a determination that 
        such requirements are not necessary or appropriate.
            ``(C) Not later than 18 months after enactment of this 
        subsection, the Administrator shall promulgate regulations 
        establishing requirements for consumer education materials on 
        best practices associated with the use of containers which 
        contain less than 20 pounds of a class II, group II substance 
        and prohibiting the sale or distribution, or offer for sale or 
        distribution, of any class II, group II substance in any 
        container which contains less than 20 pounds of such class II, 
        group II substance, unless consumer education materials 
        consistent with such requirements are displayed and available 
        at point-of-sale locations, provided to the consumer, or 
        included in or on the packaging of the container which contain 
        less than 20 pounds of a class II, group II substance.
            ``(D) The Administrator may, through rulemaking, extend the 
        requirements established under this paragraph to containers 
        which contain 30 pounds or less of a class II, group II 
        substance if the Administrator determines that such action 
        would produce significant environmental benefits.
            ``(3) Restriction of sales.--Effective January 1, 2014, no 
        person may sell or distribute or offer to sell or distribute or 
        otherwise introduce into interstate commerce any motor vehicle 
        air conditioner refrigerant in any size container unless the 
        substance has been found acceptable for use in a motor vehicle 
        air conditioner under section 612.''.
    (e) Safe Alternatives Policy.--Section 612(e) of the Clean Air Act 
(42 U.S.C. 7671k(e)) is amended by inserting ``or class II'' after each 
reference to ``class I''.

SEC. 333. BLACK CARBON.

    (a) Definition.--As used in this section, the term ``black carbon'' 
means the light absorbing component of carbonaceous aerosols.
    (b) Black Carbon Abatement Report.--Not later than one year after 
the date of enactment of this section, the Administrator shall, in 
consultation with other appropriate Federal agencies, submit to 
Congress a report regarding black carbon emissions. The report shall 
include the following:
            (1) A summary of the current research that identifies--
                    (A) an inventory of the major sources of black 
                carbon emissions in the United States and throughout 
                the world, including--
                            (i) an estimate of the quantity of current 
                        and projected future emissions; and
                            (ii) the net climate forcing of the 
                        emissions from such sources, including 
                        consideration of co-emissions of other 
                        pollutants;
                    (B) effective and cost-effective control 
                technologies, operations, and strategies for additional 
                domestic and international black carbon emissions 
                reductions, such as diesel retrofit technologies on 
                existing on-road and off-road engines and programs to 
                address residential cookstoves, forest burning, and 
                other agriculture-based burning;
                    (C) potential metrics quantifying the climatic 
                effects of black carbon emissions, including its 
                radiative forcing and warming effects, that may be used 
                to compare the climate benefits of different mitigation 
                strategies, including an assessment of the uncertainty 
                in such metrics; and
                    (D) the public health and environmental benefits 
                associated with additional controls for black carbon 
                emissions.
            (2) Recommendations regarding--
                    (A) development of additional emissions monitoring 
                techniques and capabilities, modeling, and other black 
                carbon-related areas of study;
                    (B) areas of focus for additional study of 
                technologies, operations, and strategies with the 
                greatest potential to reduce emissions of black carbon; 
                and
                    (C) actions, in addition to those identified by the 
                Administrator under section 851 of the Clean Air Act 
                (as amended by subsection (c)), the Federal Government 
                may take to encourage or require reductions in black 
                carbon emissions.
    (c) Black Carbon Mitigation.--Title VIII of the Clean Air Act, as 
added by section 331 of this Act, and amended by section 222 of this 
Act, is further amended by adding after part D the following new part:

                         ``PART E--BLACK CARBON

``SEC. 851. BLACK CARBON.

    ``(a) Domestic Black Carbon Mitigation.--Not later than one year 
after the date of enactment of this section, the Administrator, taking 
into consideration the public health and environmental impacts of black 
carbon emissions, including the effects on global warming, the Arctic, 
and other snow and ice-covered surfaces, shall propose regulations 
under the existing authorities of this Act to reduce emissions of black 
carbon or propose a finding that existing regulations promulgated 
pursuant to this Act adequately regulate black carbon emissions. Not 
later than two years after the date of enactment of this section, the 
Administrator shall promulgate final regulations under the existing 
authorities of this Act or finalize the proposed finding.
    ``(b) International Black Carbon Mitigation.--
            ``(1) Report.--Not later than one year after the date of 
        enactment of this section, the Administrator, in coordination 
        with the Secretary of State and other appropriate Federal 
        agencies, shall transmit a report to Congress on the amount, 
        type, and direction of all present United States financial, 
        technical, and related assistance to foreign countries to 
        reduce, mitigate, and otherwise abate black carbon emissions.
            ``(2) Other opportunities.--The report required under 
        paragraph (1) shall also identify opportunities and 
        recommendations, including action under existing authorities, 
        to achieve significant black carbon emission reductions in 
        foreign countries through technical assistance or other 
        approaches to--
                    ``(A) promote sustainable solutions to bring clean, 
                efficient, safe, and affordable stoves, fuels, or both 
                stoves and fuels to residents of developing countries 
                that are reliant on solid fuels such as wood, dung, 
                charcoal, coal, or crop residues for home cooking and 
                heating, so as to help reduce the public health, 
                environmental, and economic impacts of black carbon 
                emissions from these sources by--
                            ``(i) identifying key regions for large-
                        scale demonstration efforts, and key partners 
                        in each such region; and
                            ``(ii) developing for each such region a 
                        large-scale implementation strategy with a goal 
                        of collectively reaching 20,000,000 homes over 
                        5 years with interventions that will--
                                    ``(I) increase stove efficiency by 
                                over 50 percent (or such other goal as 
                                determined by the Administrator);
                                    ``(II) reduce emissions of black 
                                carbon by over 60 percent (or such 
                                other goal as determined by the 
                                Administrator); and
                                    ``(III) reduce the incidence of 
                                severe pneumonia in children under 5 
                                years old by over 30 percent (or such 
                                other goal as determined by the 
                                Administrator);
                    ``(B) make technological improvements to diesel 
                engines and provide greater access to fuels that emit 
                less or no black carbon;
                    ``(C) reduce unnecessary agricultural or other 
                biomass burning where feasible alternatives exist;
                    ``(D) reduce unnecessary fossil fuel burning that 
                produces black carbon where feasible alternatives 
                exist;
                    ``(E) reduce other sources of black carbon 
                emissions; and
                    ``(F) improve capacity to achieve greater 
                compliance with existing laws to address black carbon 
                emissions.''.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 334. STATES.

    Section 116 of the Clean Air Act (42 U.S.C. 7416) is amended by 
adding the following at the end thereof: ``For the purposes of this 
section, the phrases `standard or limitation respecting emissions of 
air pollutants' and `requirements respecting control or abatement of 
air pollution' shall include any provision to: cap greenhouse gas 
emissions, require surrender to the State or a political subdivision 
thereof of emission allowances or offset credits established or issued 
under this Act, and require the use of such allowances or credits as a 
means of demonstrating compliance with requirements established by a 
State or political subdivision thereof.''.

SEC. 335. STATE PROGRAMS.

    Title VIII of the Clean Air Act, as added by section 331 of this 
Act and amended by several sections of this Act, is further amended by 
adding after part E (as added by section 333 of this Act) the following 
new part:

                        ``PART F--MISCELLANEOUS

``SEC. 861. STATE PROGRAMS.

    ``Notwithstanding section 116, no State or political subdivision 
thereof shall implement or enforce a cap and trade program that covers 
any capped emissions emitted during the years 2012 through 2017. For 
purposes of this section, the term `cap and trade program' means a 
system of greenhouse gas regulation under which a State or political 
subdivision issues a limited number of tradable instruments in the 
nature of emission allowances and requires that sources within its 
jurisdiction surrender such tradeable instruments for each unit of 
greenhouse gases emitted during a compliance period. For purposes of 
this section, a `cap-and-trade program' does not include a target or 
limit on greenhouse gas emissions adopted by a State or political 
subdivision that is implemented other than through the issuance and 
surrender of a limited number of tradable instruments in the nature of 
emission allowances, nor does it include any other standard, limit, 
regulation, or program to reduce greenhouse gas emissions that is not 
implemented through the issuance and surrender of a limited number of 
tradeable instruments in the nature of emission allowances. For 
purposes of this section, the term `cap and trade program' does not 
include, among other things, fleet-wide motor vehicle emission 
requirements that allow greater emissions with increased vehicle 
production, or requirements that fuels, or other products, meet an 
average pollution emission rate or lifecycle greenhouse gas 
standard.''.

SEC. 336. ENFORCEMENT.

    (a) Remand.--Section 307(b) of the Clean Air Act (42 U.S.C. 
7607(b)) is amended by adding the following new paragraph at the end 
thereof:
            ``(3) If the court determines that any action of the 
        Administrator is arbitrary, capricious, or otherwise unlawful, 
        the court may remand such action, without vacatur, if vacatur 
        would impair or delay protection of the environment or public 
        health or otherwise undermine the timely achievement of the 
        purposes of this Act.''.
    (b) Petition for Reconsideration.--Section 307(d)(7)(B) of the 
Clean Air Act (42 U.S.C. 7607(d)(7)(B)) is amended as follows:
            (1) By inserting after the second sentence ``If a petition 
        for reconsideration is filed, the Administrator shall take 
        final action on such petition, including promulgation of final 
        action either revising or determining not to revise the action 
        for which reconsideration is sought, within 150 days after the 
        petition is received by the Administrator or the petition shall 
        be deemed denied for the purpose of judicial review.''.
            (2) By amending the third sentence to read as follows: 
        ``Such person may seek judicial review of such denial, or of 
        any other final action, by the Administrator, in response to a 
        petition for reconsideration, in the United States court of 
        appeals for the appropriate circuit (as provided in subsection 
        (b)).''.

SEC. 337. CONFORMING AMENDMENTS.

    (a) Federal Enforcement.--Section 113 of the Clean Air Act (42 
U.S.C. 7413) is amended as follows:
            (1) In subsection (a)(3), by striking ``or title VI,'' and 
        inserting ``title VI, title VII, or title VIII''.
            (2) In subsection (b), by striking ``or a major stationary 
        source'' and inserting ``a major stationary source, or a 
        covered EGU under title VIII,'' in the material preceding 
        paragraph (1).
            (3) In paragraph (2), by striking ``or title VI'' and 
        inserting ``title VI, title VII, or title VIII''.
            (4) In subsection (c)--
                    (A) in the first sentence of paragraph (1), by 
                striking ``or title VI (relating to stratospheric ozone 
                control),'' and inserting ``title VI (relating to 
                stratospheric ozone control), or title VII or VIII 
                (relating to reduction of greenhouse gas emissions),''; 
                and
                    (B) in the first sentence of paragraph (3), by 
                striking ``or VI'' and inserting ``VI, VII, VIII''.
            (5) In subsection (d)(1)(B), by striking ``or VI'' and 
        inserting ``VI, VII, or VIII''.
            (6) In subsection (f), in the first sentence, by striking 
        ``or VI'' and inserting ``VI, VII, or VIII''.
    (b) Retention of State Authority.--Section 116 of the Clean Air Act 
(42 U.S.C. 7416) is amended as follows:
            (1) By striking ``and 233'' and inserting ``233''.
            (2) By striking ``of moving sources)'' and inserting ``of 
        moving sources), and 861 (preempting certain State greenhouse 
        gas programs for a limited time)''.
    (c) Inspections, Monitoring, and Entry.--Section 114(a) of the 
Clean Air Act (42 U.S.C. 7414(a)) is amended by striking ``section 
112,'' and all that follows through ``(ii)'' and inserting the 
following: ``section 112, or any regulation of greenhouse gas emissions 
under title VII or VIII, (ii)''.
    (d) Enforcement.--Subsection (f) of section 304 of the Clean Air 
Act (42 U.S.C. 7604(f)) is amended as follows:
            (1) By striking ``; or'' at the end of paragraph (3) 
        thereof and inserting a comma.
            (2) By striking the period at the end of paragraph (4) 
        thereof and inserting ``, or''.
            (3) By adding the following after paragraph (4) thereof:
            ``(5) any requirement of title VII or VIII.''.
    (e) Administrative Proceedings and Judicial Review.--Section 307 of 
the Clean Air Act (42 U.S.C. 7607) is amended as follows:
            (1) In subsection (a), by striking ``, or section 306'' and 
        inserting ``section 306, or title VII or VIII''.
            (2) In subsection (b)(1)--
                    (A) by striking ``,,'' and inserting ``,'' in each 
                place such punctuation appears; and
                    (B) by striking ``section 120,'' in the first 
                sentence and inserting ``section 120, any final action 
                under title VII or VIII,''.
            (3) In subsection (d)(1) by amending subparagraph (S) to 
        read as follows:
                    ``(S) the promulgation or revision of any 
                regulation under title VII or VIII,''.

                  Subtitle D--Carbon Market Assurance

SEC. 341. CARBON MARKET ASSURANCE.

    The Federal Power Act (16 U.S.C. 791a and following) is amended by 
adding at the end the following:

                   ``PART IV--CARBON MARKET ASSURANCE

``SEC. 401. OVERSIGHT AND ASSURANCE OF CARBON MARKETS.

    ``(a) Definitions.--In this section:
            ``(1) Contract of sale.--The term `contract of sale' 
        includes sales, agreements of sale, and agreements to sell.
            ``(2) Covered entity.--The term `covered entity' shall have 
        the meaning given in section 700 of the Clean Air Act.
            ``(3) Future delivery.--The term `future delivery' does not 
        include any sale of any cash commodity for deferred shipment or 
        delivery.
            ``(4) Offset creation contract.--The term `offset creation 
        contract' mean a written agreement for the origination and 
        development of an offset project, and the related issuance of 
        offset credits, pursuant to title VII of the Clean Air Act.
            ``(5) Regulated allowance.--The term `regulated allowance' 
        means any emission allowance, compensatory allowance, offset 
        credit, or renewable energy credit established or issued under 
        the American Clean Energy and Security Act of 2009.
            ``(6) Regulated allowance derivative.--The term `regulated 
        allowance derivative' means an instrument that is, or includes, 
        an instrument--
                    ``(A) which--
                            ``(i) is of the character of, or is 
                        commonly known to the trade as, a `put option', 
                        `call option', `privilege', `indemnity', 
                        `advance guaranty', `decline guaranty', or 
                        `swap agreement'; or
                            ``(ii) is a contract of sale for future 
                        delivery other than an offset creation 
                        contract; and
                    ``(B) the value of which, in whole or in part, is 
                expressly linked to the price of a regulated allowance 
                or another regulated allowance derivative.
            ``(7) Regulated instrument.--The term `regulated 
        instrument' means a regulated allowance or a regulated 
        allowance derivative.
    ``(b) Regulated Allowance Market.--
            ``(1) Authority.--The Commission shall promulgate 
        regulations for the establishment, operation, and oversight of 
        markets for regulated allowances not later than 18 months after 
        the date of the enactment of this section, and from time to 
        time thereafter as may be appropriate.
            ``(2) Regulations.--The regulations promulgated pursuant to 
        paragraph (1) shall--
                    ``(A) provide for effective and comprehensive 
                market oversight;
                    ``(B) prohibit fraud, market manipulation 
                (including an entity's fraudulent or manipulative 
                conduct with respect to regulated allowance derivatives 
                that benefits the entity in regulated allowance 
                markets), and excess speculation, and provide measures 
                to limit unreasonable fluctuation in the prices of 
                regulated allowances;
                    ``(C) facilitate compliance with title VII of the 
                Clean Air Act by covered entities;
                    ``(D) ensure market transparency and recordkeeping 
                deemed necessary and appropriate by the Commission to 
                provide for efficient price discovery; prevention of 
                fraud, market manipulation, and excess speculation; and 
                compliance with title VII of the Clean Air Act and 
                section 610 of the Public Utility Regulatory Policies 
                Act;
                    ``(E) as necessary, ensure that position 
                limitations for individual market participants are 
                established with respect to each class of regulated 
                allowances;
                    ``(F) as necessary, ensure that margin requirements 
                are established for each class of regulated allowances;
                    ``(G) provide for the formation and operation of a 
                fair, orderly and liquid national market system that 
                allows for the best execution in the trading of 
                regulated allowances;
                    ``(H) limit or eliminate counterparty risks, market 
                power concentration risks, and other risks associated 
                with over-the-counter trading;
                    ``(I) establish standards for qualification as, and 
                operation of, trading facilities for regulated 
                allowances;
                    ``(J) establish standards for qualification as, and 
                operation of, clearing organizations for trading 
                facilities for regulated allowances; and
                    ``(K) include such other requirements as necessary 
                to preserve market integrity and facilitate compliance 
                with title VII of the Clean Air Act and section 610 of 
                the Public Utility Regulatory Policies Act and the 
                regulations promulgated under such title and such 
                section.
            ``(3) Enforcement.--
                    ``(A) In general.--If the Commission determines, 
                after notice and an opportunity for a hearing on the 
                record, that any entity has violated any rule or order 
                issued by the Commission under this subsection, the 
                Commission may issue an order--
                            ``(i) prohibiting the entity from trading 
                        on a trading facility for regulated allowances 
                        registered with the Commission, and requiring 
                        all such facilities to refuse the entity all 
                        privileges for such period as may be specified 
                        in the order;
                            ``(ii) if the entity is registered with the 
                        Commission in any capacity, suspending for a 
                        period of not more than 6 months, or revoking, 
                        the registration of the entity;
                            ``(iii) assessing the entity a civil 
                        penalty of not more than $1,000,000 per day per 
                        violation for as long as the violation 
                        continues (and in determining the amount of a 
                        civil penalty, the Commission shall take into 
                        account the nature and seriousness of the 
                        violation and the efforts to remedy the 
                        violation); and
                            ``(iv) requiring disgorgement of unjust 
                        profits, restitution to entities harmed by the 
                        violation as determined by the Commission, or 
                        both.
                    ``(B) Authority to suspend or revoke 
                registration.--The Commission may suspend for a period 
                of not more than 6 months, or revoke, the registration 
                of a trading facility for regulated allowances or of a 
                clearing organization registered by the Commission if, 
                after notice and opportunity for a hearing on the 
                record, the Commission finds that--
                            ``(i) the entity violated any rule or order 
                        issued by the Commission under this subsection; 
                        or
                            ``(ii) a director, officer, employee, or 
                        agent of the entity has violated any rule or 
                        order issued by the Commission under this 
                        subsection.
                    ``(C) Cease and desist proceedings.--
                            ``(i) In general.--If the Commission 
                        determines that any entity may be violating, 
                        may have violated, or may be about to violate 
                        any provision of this part, or any regulation 
                        promulgated by, or any restriction, condition, 
                        or order made or imposed by, the Commission 
                        under this part, and if the Commission finds 
                        that the alleged violation or threatened 
                        violation, or the continuation of the 
                        violation, is likely to result in significant 
                        harm to covered entities or market 
                        participants, or significant harm to the public 
                        interest, the Commission may issue a temporary 
                        order requiring the entity--
                                    ``(I) to cease and desist from the 
                                violation or threatened violation;
                                    ``(II) to take such action as is 
                                necessary to prevent the violation or 
                                threatened violation; and
                                    ``(III) to prevent, as the 
                                Commission determines to be 
                                appropriate--
                                            ``(aa) significant harm to 
                                        covered entities or market 
                                        participants;
                                            ``(bb) significant harm to 
                                        the public interest; and
                                            ``(cc) frustration of the 
                                        ability of the Commission to 
                                        conduct the proceedings or to 
                                        redress the violation at the 
                                        conclusion of the proceedings.
                            ``(ii) Timing of entry.--An order issued 
                        under clause (i) shall be entered only after 
                        notice and opportunity for a hearing, unless 
                        the Commission determines that notice and 
                        hearing before entry would be impracticable or 
                        contrary to the public interest.
                            ``(iii) Effective date.--A temporary order 
                        issued under clause (i) shall--
                                    ``(I) become effective upon service 
                                upon the entity; and
                                    ``(II) unless set aside, limited, 
                                or suspended by the Commission or a 
                                court of competent jurisdiction, remain 
                                effective and enforceable pending the 
                                completion of the proceedings.
                    ``(D) Proceedings regarding dissipation or 
                conversion of assets.--
                            ``(i) In general.--In a proceeding 
                        involving an alleged violation of a regulation 
                        or order promulgated or issued by the 
                        Commission, if the Commission determines that 
                        the alleged violation or related circumstances 
                        are likely to result in significant dissipation 
                        or conversion of assets, the Commission may 
                        issue a temporary order requiring the 
                        respondent to take such action as is necessary 
                        to prevent the dissipation or conversion of 
                        assets.
                            ``(ii) Timing of entry.--An order issued 
                        under clause (i) shall be entered only after 
                        notice and opportunity for a hearing, unless 
                        the Commission determines that notice and 
                        hearing before entry would be impracticable or 
                        contrary to the public interest.
                            ``(iii) Effective date.--A temporary order 
                        issued under clause (i) shall--
                                    ``(I) become effective upon service 
                                upon the respondent; and
                                    ``(II) unless set aside, limited, 
                                or suspended by the Commission or a 
                                court of competent jurisdiction, remain 
                                effective and enforceable pending the 
                                completion of the proceedings.
                    ``(E) Review of temporary orders.--
                            ``(i) Application for review.--At any time 
                        after a respondent has been served with a 
                        temporary cease-and-desist order pursuant to 
                        subparagraph (C) or order regarding the 
                        dissipation or conversion of assets pursuant to 
                        subparagraph (D), the respondent may apply to 
                        the Commission to have the order set aside, 
                        limited, or suspended.
                            ``(ii) No prior hearing.--If a respondent 
                        has been served with a temporary order entered 
                        without a prior hearing of the Commission--
                                    ``(I) the respondent may, not later 
                                than 10 days after the date on which 
                                the order was served, request a hearing 
                                on the application; and
                                    ``(II) the Commission shall hold a 
                                hearing and render a decision on the 
                                application at the earliest practicable 
                                time.
                            ``(iii) Judicial review.--
                                    ``(I) In general.--An entity shall 
                                not be required to submit a request for 
                                rehearing of a temporary order before 
                                seeking judicial review in accordance 
                                with this subparagraph.
                                    ``(II) Timing of review.--Not later 
                                than 10 days after the date on which a 
                                respondent is served with a temporary 
                                cease-and-desist order entered with a 
                                prior hearing of the Commission, or 10 
                                days after the date on which the 
                                Commission renders a decision on an 
                                application and hearing under clause 
                                (i) with respect to any temporary order 
                                entered without such a prior hearing--
                                            ``(aa) the respondent may 
                                        obtain a review of the order in 
                                        a United States circuit court 
                                        having jurisdiction over the 
                                        circuit in which the respondent 
                                        resides or has a principal 
                                        place of business, or in the 
                                        United States Court of Appeals 
                                        for the District of Columbia 
                                        Circuit, for an order setting 
                                        aside, limiting, or suspending 
                                        the effectiveness or 
                                        enforcement of the order; and
                                            ``(bb) the court shall have 
                                        jurisdiction to enter such an 
                                        order.
                                    ``(III) No prior hearing.--A 
                                respondent served with a temporary 
                                order entered without a prior hearing 
                                of the Commission may not apply to the 
                                applicable court described in subclause 
                                (II) except after a hearing and 
                                decision by the Commission on the 
                                application of the respondent under 
                                clauses (i) and (ii).
                            ``(iv) Procedures.--Section 222 and Part 
                        III shall apply to--
                                    ``(I) an application for review of 
                                an order under clause (i); and
                                    ``(II) an order subject to review 
                                under clause (iii).
                            ``(v) No automatic stay of temporary 
                        order.--The commencement of proceedings under 
                        clause (iii) shall not, unless specifically 
                        ordered by the court, operate as a stay of the 
                        order of the Commission.
                    ``(F) Actions to collect civil penalties.--If any 
                person fails to pay a civil penalty assessed under this 
                subsection after an order assessing the penalty has 
                become final and unappealable, the Commission shall 
                bring an action to recover the amount of the penalty in 
                any appropriate United States district court. In any 
                such action, the validity or appropriateness of the 
                final assessment order or judgment shall not be subject 
                to review.
            ``(4) Transaction fees.--
                    ``(A) In general.--The Commission shall, in 
                accordance with this paragraph, establish and collect 
                transaction fees designed to recover the costs to the 
                Federal Government of the supervision and regulation of 
                regulated allowance markets and market participants, 
                including related costs for enforcement activities, 
                policy and rulemaking activities, administration, legal 
                services, and international regulatory activities.
                    ``(B) Initial fee rate.--Each trading facility on 
                or through which regulated allowances are transacted 
                shall pay to the Commission a fee at a rate of not more 
                than $15 per $1,000,000 of the aggregate dollar amount 
                of sales of regulated allowances transacted through the 
                facility.
                    ``(C) Annual adjustment of fee rate.--The 
                Commission shall, on an annual basis--
                            ``(i) assess the rate at which fees are to 
                        be collected as necessary to meet the cost 
                        recovery requirement in subparagraph (A); and
                            ``(ii) consistent with subparagraph (B), 
                        adjust the rate as necessary in order to meet 
                        the requirement.
                    ``(D) Report on adequacy of fees in recovering 
                costs.--The Commission, shall, on an annual basis, 
                report to the Committee on Energy and Commerce of the 
                House of Representatives and the Committee on Energy 
                and Natural Resources of the Senate on the adequacy of 
                the transaction fees in providing funding for the 
                Commission to regulate the regulated allowance markets.
            ``(5) Judicial review.--Judicial review of actions taken by 
        the Commission under this subsection shall be pursuant to part 
        III.
            ``(6) Information-sharing.--Within 6 months after a Federal 
        agency with jurisdiction over regulated allowance derivatives 
        is delegated authority pursuant to subsection (c)(1), the 
        agency shall enter into a memorandum of understanding with the 
        Commission relating to information sharing, which shall include 
        provisions ensuring that information requests to markets within 
        the respective jurisdiction of the agency are properly 
        coordinated to facilitate, among other things, effective 
        information-sharing while minimizing duplicative information 
        requests, and provisions regarding the treatment of proprietary 
        information.
            ``(7) Additional employees report and appointment.--Within 
        18 months after the date of the enactment of this section, the 
        Commission shall submit to the President, the Committee on 
        Energy and Commerce of the House of Representatives, and the 
        Committee on Energy and Natural Resources of the Senate, a 
        report that contains recommendations as to how many additional 
        employees would be necessary to provide robust oversight and 
        enforcement of the regulations promulgated under this 
        subsection. As soon as practicable after the completion of the 
        report, subject to appropriations, the Commission shall appoint 
        the recommended number of additional employees for such 
        purposes.
    ``(c) Delegation of Authority by the President.--
            ``(1) Delegation.--The President, taking into consideration 
        the recommendations of the interagency working group 
        established in subsection (d), shall delegate to members of the 
        working group and the heads of other appropriate Federal 
        agencies the authority to promulgate regulations for the 
        establishment, operation, and oversight of all markets for 
        regulated allowance derivatives.
            ``(2) Regulations.--The regulations promulgated pursuant to 
        paragraph (1) shall--
                    ``(A) provide for effective and comprehensive 
                market oversight;
                    ``(B) prohibit fraud, market manipulation, and 
                excess speculation, and provide measures to limit 
                unreasonable fluctuation in the prices of regulated 
                allowance derivatives;
                    ``(C) facilitate compliance with title VII of the 
                Clean Air Act by covered entities;
                    ``(D) ensure market transparency and recordkeeping 
                necessary to provide for efficient price discovery; 
                prevention of fraud, market manipulation, and excess 
                speculation; and compliance with title VII of the Clean 
                Air Act and section 610 of the Public Utility 
                Regulatory Policies Act;
                    ``(E) ensure that position limitations for 
                individual market participants are established with 
                respect to each regulated allowance derivative and 
                aggregate position limitations for individual market 
                participants are established with respect to all 
                regulated allowance derivative markets;
                    ``(F) ensure that margin requirements are 
                established for each regulated allowance derivative;
                    ``(G) provide for the formation and operation of a 
                market system that allows for best execution in the 
                trading of regulated allowance derivatives;
                    ``(H) to the extent the regulations deviate from 
                the rule set forth in paragraph (4)(B), limit or 
                eliminate counterparty risks, market power 
                concentration risks, and other risks associated with 
                over-the-counter trading, and promulgate reporting and 
                market transparency rules for large traders;
                    ``(I) ensure that market participants do not evade 
                position limits or otherwise undermine the integrity 
                and effectiveness of the regulations promulgated under 
                subparagraph (C) through participation in markets not 
                subject to the position limits and regulations;
                    ``(J) establish standards, as necessary, for 
                qualification as, and operation of, trading facilities 
                for regulated allowance derivatives;
                    ``(K) establish standards, as necessary, for 
                qualification as, and operation of, clearing 
                organizations for trading facilities for regulated 
                allowance derivatives;
                    ``(L) provide boards of trade designated as 
                contract markets under the Commodity Exchange Act, and 
                market participants, with an adequate transition period 
                for compliance with any new regulatory requirements 
                established under this paragraph;
                    ``(M) determine whether and to what extent offset 
                creation contracts, to the extent incorporating 
                regulated allowance derivatives, should be governed by 
                the same regulations that apply to other regulated 
                allowance derivatives; and
                    ``(N) include such other requirements as necessary 
                to preserve market integrity and facilitate compliance 
                with title VII of the Clean Air Act and section 610 of 
                the Public Utility Regulatory Policies Act and the 
                regulations promulgated under such title and such 
                section.
            ``(3) Deadline.--The agencies authorized to promulgate 
        regulations for the establishment, operation, and oversight of 
        markets for regulated allowance derivatives pursuant to 
        paragraph (1) shall promulgate such regulations not later than 
        18 months after the date of enactment of this section, and from 
        time to time thereafter as may be appropriate.
            ``(4) Default rules.--
                    ``(A) An individual market participant, directly or 
                in concert with another participant, shall not control 
                more than 10 percent of the open interest in any 
                regulated allowance derivative.
                    ``(B) All contracts for the purchase or sale of any 
                regulated allowance derivative shall be executed on or 
                through a board of trade designated as a contract 
                market under the Commodity Exchange Act.
                    ``(C) To the extent that regulations promulgated 
                under this subsection provide different rules with 
                respect to the matters described in subparagraph (A) or 
                (B), the regulations shall supersede subparagraph (A) 
                or (B), as the case may be.
    ``(d) Working Group.--
            ``(1) Establishment.--Not later than 30 days after the date 
        of the enactment of this section, the President shall establish 
        an interagency working group on carbon market oversight, which 
        shall include the Administrator of the Environmental Protection 
        Agency and representatives of other relevant agencies, to make 
        recommendations to the President regarding proposed regulations 
        for the establishment, operation, and oversight of markets for 
        regulated allowance derivatives.
            ``(2) Report.--Not later than 180 days after the date of 
        the enactment of this section, and biennially thereafter, the 
        interagency working group shall submit a written report to the 
        President and Congress that includes its recommendations to the 
        President regarding proposed regulations for the establishment, 
        operation, and oversight of markets for regulated allowance 
        derivatives and any recommendations to Congress for statutory 
        changes needed to ensure the establishment, operation, and 
        oversight of transparent, fair, stable, and efficient markets 
        for regulated allowance derivatives.
    ``(e) Enforcement of Regulations.--Each Federal agency that 
promulgates under subsection (c) a regulation of conduct with respect 
to a regulated allowance derivative shall have the same authority to 
enforce compliance with the regulation as the Commodity Futures Trading 
Commission has to enforce compliance with any regulation of similar 
conduct with respect to a contract, agreement, or transaction over 
which the Commodity Futures Trading Commission has jurisdiction, except 
that any enforcement by the Federal Energy Regulatory Commission shall 
be pursuant to section 222 and Part III.
    ``(f) Prohibition on Price or Market Manipulation, Fraud, and False 
or Misleading Statements or Reports.--(1) It shall be a felony 
punishable by a fine of not more than $25,000,000 (or $5,000,000 in the 
case of a person who is an individual) or imprisonment for not more 
than 20 years, or both, together with the costs of prosecution for any 
person, directly or indirectly--
            ``(A) in connection with a transaction involving a 
        regulated instrument, to knowingly--
                    ``(i) use any manipulative or deceptive device or 
                contrivance in violation of regulations promulgated 
                pursuant to this section;
                    ``(ii) corner or attempt to corner the regulated 
                instrument; or
                    ``(iii) cheat or defraud, or attempt to cheat or 
                defraud, any other person;
            ``(B) to knowingly deliver or cause to be delivered a 
        false, misleading, or inaccurate report concerning information 
        or conditions that affect or tend to affect the price of a 
        regulated instrument;
            ``(C) to knowingly make, or cause to be made, in an 
        application, report, or document required to be filed under any 
        regulation promulgated pursuant to this section, a statement 
        which is false or misleading with respect to a material fact, 
        or to omit any material fact required to be stated therein or 
        necessary to make the statements therein not misleading; or
            ``(D) to knowingly falsify, conceal, or cover up by any 
        trick, scheme, or artifice a material fact, make any false, 
        fictitious, or fraudulent statements or representations, or 
        make or use any false writing or document that contains a 
        false, fictitious, or fraudulent statement or entry, to an 
        entity on or through which transactions in regulated 
        instruments occur, or are settled or cleared, acting in 
        furtherance of its official duties under this section or 
        regulations promulgated under this section.
    ``(2) If a person is found guilty of a felony established in 
paragraph (1), the person may be prohibited from holding or trading 
regulated instruments for a period of not more than 5 years pursuant to 
the regulations promulgated under this section, except that, if the 
person is a covered entity, the person shall be allowed to hold 
sufficient regulated allowances to meet its compliance obligations.
    ``(g) Relation to State Law.--Nothing in this section shall 
preclude, diminish or qualify any authority of a State or political 
subdivision thereof to adopt or enforce any unfair competition, 
antitrust, consumer protection, securities, commodities or any other 
law or regulation, except that no such State law or regulation may 
relieve any person of any requirement otherwise applicable under this 
section.
    ``(h) Market Reports.--
            ``(1) Collection and analysis of information.--The 
        Commission, in conjunction with the Federal agency with 
        jurisdiction over regulated allowance derivatives pursuant to 
        subsection (c)(1), shall, on a continuous basis, collect and 
        analyze the following information on the functioning of the 
        markets for regulated instruments established under this part:
                    ``(A) The status of, and trends in, the markets, 
                including prices, trading volumes, transaction types, 
                and trading channels and mechanisms.
                    ``(B) Spikes, collapses, and volatility in prices 
                of regulated instruments, and the causes therefor.
                    ``(C) The relationship between the market for 
                regulated allowances and allowance derivatives, and the 
                spot and futures markets for energy commodities, 
                including electricity.
                    ``(D) Evidence of fraud or manipulation in any such 
                market, the effects on any such market of any such 
                fraud or manipulation (or threat of fraud or 
                manipulation) that the Commission, in conjunction with 
                the Federal agency, has identified, and the 
                effectiveness of corrective measures undertaken by the 
                Commission, in conjunction with the Federal agency, to 
                address the fraud, manipulation, or threat.
                    ``(E) The economic effects of the markets, 
                including to macro- and micro-economic effects of 
                unexpected significant increases and decreases in the 
                price of regulated instruments.
                    ``(F) Any changes in the roles, activities, or 
                strategies of various market participants.
                    ``(G) Regional, industrial, and consumer responses 
                to the markets, and energy investment responses to the 
                markets.
                    ``(H) Any other issue related to the markets that 
                the Commission, in conjunction with the entities, deems 
                appropriate.
            ``(2) Annual reports to the congress.--Not later than 1 
        month after the end of each calendar year, the Commission, in 
        conjunction with the Federal agency, shall submit to the 
        President, the Committee on Energy and Commerce of the House of 
        Representatives, and the Committee on Energy and Natural 
        Resources of the Senate, and make available to the public, a 
        report on the matters described in paragraph (1) with respect 
        to the year, including recommendations for any administrative 
        or statutory measures the Commission, in conjunction with the 
        Federal agency, considers necessary to address any threats to 
        the transparency, fairness, or integrity of the markets in 
        regulated instruments.''.

                Subtitle E--Additional Market Assurance

SEC. 351. REGULATION OF CERTAIN TRANSACTIONS IN DERIVATIVES INVOLVING 
              ENERGY COMMODITIES.

    (a) Energy Commodity Defined.--Section 1a of the Commodity Exchange 
Act (7 U.S.C. 1a) is amended--
            (1) in paragraph (14), by inserting ``, an energy 
        commodity,'' after ``excluded commodity'';
            (2) by redesignating paragraphs (13) through (21) and 
        paragraphs (22) through (34) as paragraphs (14) through (22) 
        and paragraphs (24) through (36), respectively;
            (3) by inserting after paragraph (12) the following:
            ``(13) Energy commodity.--The term `energy commodity' 
        means--
                    ``(A) coal;
                    ``(B) crude oil, gasoline, diesel fuel, jet fuel, 
                heating oil, and propane;
                    ``(C) electricity (excluding financial transmission 
                rights which are subject to regulation and oversight by 
                the Federal Energy Regulatory Commission);
                    ``(D) natural gas; and
                    ``(E) any other substance (other than an excluded 
                commodity, a metal, or an agricultural commodity) that 
                is used as a source of energy, as the Commission, in 
                its discretion, deems appropriate.''; and
            (4) by inserting after paragraph (22) (as so redesignated 
        by paragraph (2) of this subsection) the following:
            ``(23) Included energy transaction.--The term `included 
        energy transaction' means a contract, agreement, or transaction 
        in an energy commodity for future delivery that provides for a 
        delivery point of the energy commodity in the United States or 
        a territory or possession of the United States, or that is 
        offered or transacted on or through a computer terminal located 
        in the United States.''.
    (b) Extension of Regulatory Authority to Swaps Involving Energy 
Transactions.--Section 2(g) of such Act (7 U.S.C. 2(g)) is amended by 
inserting ``or an energy commodity'' after ``agricultural commodity''.
    (c) Elimination of Exemption for Over-the-Counter Swaps Involving 
Energy Commodities.--Section 2(h)(1) of such Act (7 U.S.C. 2(h)(1)) is 
amended by inserting ``(other than an energy commodity)'' after 
``exempt commodity''.
    (d) Extension of Regulatory Authority to Included Energy 
Transactions on Foreign Boards of Trade.--Section 4 of such Act (7 
U.S.C. 6) is amended--
            (1) in subsection (a), by inserting ``, and which is not an 
        included energy transaction'' after ``territories or 
        possessions'' the 2nd place it appears; and
            (2) in subsection (b), by adding at the end the following: 
        ``The preceding sentence shall not apply with respect to 
        included energy transactions.''.
    (e) Limitation of General Exemptive Authority of the CFTC With 
Respect to Included Energy Transactions.--
            (1) In general.--Section 4(c) of such Act (7 U.S.C. 6(c)) 
        is amended by adding at the end the following:
            ``(6) The Commission may not exempt any included energy 
        transaction from the requirements of subsection (a), unless the 
        Commission provides 60 days advance notice to the Congress and 
        the Position Limit Energy Advisory Group and solicits public 
        comment about the exemption request and any proposed Commission 
        action.''.
            (2) Nullification of no-action letter exemptions to certain 
        requirements applicable to included energy transactions.--
        Beginning 180 days after the date of the enactment of this Act, 
        any exemption provided by the Commodity Futures Trading 
        Commission that has allowed included energy transactions (as 
        defined in section 1a(13) of the Commodity Exchange Act) to be 
        conducted without regard to the requirements of section 4(a) of 
        such Act shall be null and void.
    (f) Requirement to Establish Uniform Speculative Position Limits 
for Energy Transactions.--
            (1) In general.--Section 4a(a) of such Act (7 U.S.C. 6a(a)) 
        is amended--
                    (A) by inserting ``(1)'' after ``(a)'';
                    (B) by inserting after the 2nd sentence the 
                following: ``With respect to energy transactions, the 
                Commission shall fix limits on the aggregate number of 
                positions which may be held by any person for each 
                month across all markets subject to the jurisdiction of 
                the Commission.'';
                    (C) in the 4th sentence by inserting ``, consistent 
                with the 3rd sentence,'' after ``Commission''; and
                    (D) by adding after and below the end the 
                following:
    ``(2)(A) Not later than 60 days after the date of the enactment of 
this paragraph, the Commission shall convene a Position Limit Energy 
Advisory Group consisting of representatives from--
            ``(i) 7 predominantly commercial short hedgers of the 
        actual energy commodity for future delivery;
            ``(ii) 7 predominantly commercial long hedgers of the 
        actual energy commodity for future delivery;
            ``(iii) 4 non-commercial participants in markets for energy 
        commodities for future delivery; and
            ``(iv) each designated contract market or derivatives 
        transaction execution facility upon which a contract in the 
        energy commodity for future delivery is traded, and each 
        electronic trading facility that has a significant price 
        discovery contract in the energy commodity.
    ``(B) Not later than 60 days after the date on which the advisory 
group is convened under subparagraph (A), and annually thereafter, the 
advisory group shall submit to the Commission advisory recommendations 
regarding the position limits to be established in paragraph (1).
    ``(C) The Commission shall have exclusive authority to grant 
exemptions for bona fide hedging transactions and positions from 
position limits imposed under this Act on energy transactions.''.
            (2) Conforming amendments.--
                    (A) Significant price discovery contracts.--Section 
                2(h)(7) of such Act (7 U.S.C. 2(h)(7)) is amended--
                            (i) in subparagraph (A)--
                                    (I) by inserting ``of this 
                                paragraph and section 4a(a)'' after 
                                ``(B) through (D)''; and
                                    (II) by inserting ``of this 
                                paragraph'' before the period; and
                            (ii) in subparagraph (C)(ii)(IV)--
                                    (I) in the heading, by striking 
                                ``limitations or''; and
                                    (II) by striking ``position 
                                limitations or''.
                    (B) Contracts traded on or through designated 
                contract markets.--Section 5(d)(5) of such Act (7 
                U.S.C. 7(d)(5)) is amended--
                            (i) in the heading by striking 
                        ``limitations or''; and
                            (ii) by striking ``position limitations 
                        or''.
                    (C) Contracts traded on or through derivatives 
                transaction execution facilities.--Section 5a(d)(4) of 
                such Act (7 U.S.C. 7a(d)(4)) is amended--
                            (i) in the heading by striking 
                        ``limitations or''; and
                            (ii) by striking ``position limits or''.
    (g) Elimination of the Swaps Loophole.--Section 4a(c) of such Act 
(7 U.S.C. 6a(c)) is amended--
            (1) by inserting ``(1)'' after ``(c)''; and
            (2) by adding after and below the end the following:
    ``(2) For the purposes of contracts of sale for future delivery and 
options on such contracts or commodities, the Commission shall define 
what constitutes a bona fide hedging transaction or position as a 
transaction or position that--
            ``(A)(i) represents a substitute for transactions made or 
        to be made or positions taken or to be taken at a later time in 
        a physical marketing channel;
            ``(ii) is economically appropriate to the reduction of 
        risks in the conduct and management of a commercial enterprise; 
        and
            ``(iii) arises from the potential change in the value of--
                    ``(I) assets that a person owns, produces, 
                manufactures, processes, or merchandises or anticipates 
                owning, producing, manufacturing, processing, or 
                merchandising;
                    ``(II) liabilities that a person owns or 
                anticipates incurring; or
                    ``(III) services that a person provides, purchases, 
                or anticipates providing or purchasing; or
            ``(B) reduces risks attendant to a position resulting from 
        a transaction that--
                    ``(i) was executed pursuant to subsection (d), (g), 
                (h)(1), or (h)(2) of section 2, or an exemption issued 
                by the Commission by rule, regulation or order; and
                    ``(ii) was executed opposite a counterparty for 
                which the transaction would qualify as a bona fide 
                hedging transaction pursuant to paragraph (2)(A) of 
                this subsection.''.
    (h) Detailed Reporting and Disaggregation of Market Data.--Section 
4 of such Act (7 U.S.C. 6) is amended by adding at the end the 
following:
    ``(e) Detailed Reporting and Disaggregation of Market Data.--
            ``(1) Index traders and swap dealers reporting.--The 
        Commission shall issue a proposed rule defining and classifying 
        index traders and swap dealers (as those terms are defined by 
        the Commission) for purposes of data reporting requirements and 
        setting routine detailed reporting requirements for any 
        positions of such entities in contracts traded on designated 
        contract markets, over-the-counter markets, derivatives 
        transaction execution facilities, foreign boards of trade 
        subject to section 4(f), and electronic trading facilities with 
        respect to significant price discovery contracts not later than 
        120 days after the date of the enactment of this subsection, 
        and issue a final rule within 180 days after such date of 
        enactment.
            ``(2) Disaggregation of index funds and other data in 
        markets.--Subject to section 8 and beginning within 60 days of 
        the issuance of the final rule required by paragraph (1), the 
        Commission shall disaggregate and make public weekly--
                    ``(A) the number of positions and total notional 
                value of index funds and other passive, long-only and 
                short-only positions (as defined by the Commission) in 
                all markets to the extent such information is 
                available; and
                    ``(B) data on speculative positions relative to 
                bona fide physical hedgers in those markets to the 
                extent such information is available.
            ``(3) Disclosure of identity of holders of positions in 
        indexes in excess of position limits.--The Commission shall 
        include in its weekly Commitment of Trader reports the identity 
        of each person who holds a position in an index in excess of a 
        limit imposed under section 4i.''.
    (i) Authority to Set Limits to Prevent Excessive Speculation in 
Indexes.--
            (1) In general.--Section 4a of such Act (7 U.S.C. 6a) is 
        amended by adding at the end the following:
    ``(f) The provisions of this section shall apply to the amounts of 
trading which may be done or positions which may be held by any person 
under contracts of sale of an index for future delivery on or subject 
to the rules of any contract market, derivatives transaction execution 
facility, or over-the-counter market, or on an electronic trading 
facility with respect to a significant price discovery contract, in the 
same manner in which this section applies to contracts of sale of a 
commodity for future delivery.''.
            (2) Regulations.--The Commodity Futures Trading Commission 
        shall issue regulations under section 4a(f) of the Commodity 
        Exchange Act within 180 days after the date of the enactment of 
        this Act.

SEC. 352. NO EFFECT ON AUTHORITY OF THE FEDERAL ENERGY REGULATORY 
              COMMISSION.

    Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is amended by 
adding at the end the following:.
    ``(j) No Effect on FERC Authority.--This Act shall not be 
interpreted to affect the jurisdiction of the Federal Energy Regulatory 
Commission with respect to the authority of the Federal Energy 
Regulatory Commission under the Federal Power Act (16 U.S.C. 791a et 
seq.), the Natural Gas Act (15 U.S.C. 717 et seq.), or other law to 
obtain information, carry out enforcement actions, or otherwise carry 
out the responsibilities of the Federal Energy Regulatory 
Commission.''.

SEC. 353. INSPECTOR GENERAL OF THE COMMODITY FUTURES TRADING 
              COMMISSION.

    (a) Elevation of Office.--
            (1) Inclusion of cftc in definition of establishment.--
                    (A) Section 11(1) of the Inspector General Act of 
                1978 (5 U.S.C. App.) is amended by striking ``or the 
                Federal Cochairpersons of the Commissions established 
                under section 15301 of title 40, United States Code;'' 
                and inserting ``the Federal Cochairpersons of the 
                Commissions established under section 15301 of title 
                40, United States Code; or the Chairman of the 
                Commodity Futures Trading Commission;''.
                    (B) Section 11(2) of the Inspector General Act of 
                1978 (5 U.S.C. App.) is amended by striking ``or the 
                Commissions established under section 15301 of title 
                40, United States Code,'' and inserting ``the 
                Commissions established under section 15301 of title 
                40, United States Code, or the Commodity Futures 
                Trading Commission,''.
            (2) Exclusion of cftc from definition of designated federal 
        entity.--Section 8G(a)(2) of the Inspector General Act of 1978 
        (5 U.S.C. App.) is amended by striking ``the Commodity Futures 
        Trading Commission,''.
    (b) Effective Date; Transition Rule.--
            (1) Effective date.--The amendments made by this section 
        shall take effect 30 days after the date of the enactment of 
        this Act.
            (2) Transition rule.--An individual serving as Inspector 
        General of the Commodity Futures Trading Commission on the 
        effective date of this section pursuant to an appointment made 
        under section 8G of the Inspector General Act of 1978 (5 U.S.C. 
        App.)--
                    (A) may continue so serving until the President 
                makes an appointment under section 3(a) of such Act 
                consistent with the amendments made by this section; 
                and
                    (B) shall, while serving under subparagraph (A), 
                remain subject to the provisions of section 8G of such 
                Act which apply with respect to the Commodity Futures 
                Trading Commission.

SEC. 354. SETTLEMENT AND CLEARING THROUGH REGISTERED DERIVATIVES 
              CLEARING ORGANIZATIONS.

    (a) In General.--
            (1) Application to excluded derivative transactions.--
                    (A) Section 2(d)(1) of the Commodity Exchange Act 
                (7 U.S.C. 2(d)(1)) is amended--
                            (i) by striking ``and'' at the end of 
                        subparagraph (A);
                            (ii) by striking the period at the end of 
                        subparagraph (B) and inserting ``and''; and
                            (iii) by adding at the end the following:
                    ``(C) except as provided in section 4(f), the 
                agreement, contract, or transaction is settled and 
                cleared through a derivatives clearing organization 
                registered with the Commission.''.
                    (B) Section 2(d)(2) of such Act (7 U.S.C. 2(d)(2)) 
                is amended--
                            (i) by striking ``and'' at the end of 
                        subparagraph (B);
                            (ii) by striking the period at the end of 
                        subparagraph (C) and inserting ``; and''; and
                            (iii) by adding at the end the following:
                    ``(D) except as provided in section 4(f), the 
                agreement, contract, or transaction is settled and 
                cleared through a derivatives clearing organization 
                registered with the Commission.''.
            (2) Application to certain swap transactions.--Section 2(g) 
        of such Act (7 U.S.C. 2(g)) is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (2);
                    (B) by striking the period at the end of paragraph 
                (3) and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(4) except as provided in section 4(f), settled and 
        cleared through a derivatives clearing organization registered 
        with the Commission.''.
            (3) Application to certain transactions in exempt 
        commodities.--
                    (A) Section 2(h)(1) of such Act ( 7 U.S.C. 2(h)(1)) 
                is amended--
                            (i) by striking ``and'' at the end of 
                        subparagraph (A);
                            (ii) by striking the period at the end of 
                        subparagraph (B) and inserting ``; and''; and
                            (iii) by adding at the end the following:
                    ``(C) except as provided in section 4(f), is 
                settled and cleared through a derivatives clearing 
                organization registered with the Commission.''.
                    (B) Section 2(h)(3) of such Act (7 U.S.C. 2(h)(3)) 
                is amended--
                            (i) by striking ``and'' at the end of 
                        subparagraph (A);
                            (ii) by striking the period at the end of 
                        subparagraph (B) and inserting ``; and''; and
                            (iii) by adding at the end the following:
                    ``(C) except as provided in section 4(f), settled 
                and cleared through a derivatives clearing organization 
                registered with the Commission.''.
            (4) General exemptive authority.--Section 4(c)(1) of such 
        Act (7 U.S.C. 6(c)(1)) is amended by inserting ``the agreement, 
        contract, or transaction, except as provided in section 4(h), 
        will be settled and cleared through a derivatives clearing 
        organization registered with the Commission and'' before ``the 
        Commission determines''.
            (5) Conforming amendment relating to significant price 
        discovery contracts.--Section 2(h)(7)(D) of such Act (7 U.S.C. 
        2(h)(7)(D)) is amended by striking the heading for the 
        subparagraph and all that follows through ``As part of'' and 
        inserting the following:
                    ``(D) Review of implementation.--As part of''.
    (b) Alternatives to Clearing Through Designated Clearing 
Organizations.--Section 4 of such Act (7 U.S.C. 6), as amended by 
section 351(h) of this Act, is amended by adding at the end the 
following:
    ``(f) Alternatives to Clearing Through Designated Clearing 
Organizations.--
            ``(1) Settlement and clearing through certain other 
        regulated entities.--An agreement, contract, or transaction, or 
        class thereof, relating to an excluded commodity, that would 
        otherwise be required to be settled and cleared by section 
        2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or 2(h)(3)(C) of 
        this Act, or subsection (c)(1) of this section may be settled 
        and cleared through an entity listed in subsections (a) or (b) 
        of section 409 of the Federal Deposit Insurance Corporation 
        Improvement Act of 1991.
            ``(2) Waiver of clearing requirement.--
                    ``(A) The Commission, in its discretion, may exempt 
                an agreement, contract, or transaction, or class 
                thereof, that would otherwise be required by section 
                2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or 
                2(h)(3)(C) of this Act, or subsection (c)(1) of this 
                section to be settled and cleared through a derivatives 
                clearing organization registered with the Commission 
                from such requirement.
                    ``(B) In granting exemptions pursuant to 
                subparagraph (A), the Commission shall consult with the 
                Securities and Exchange Commission and the Board of 
                Governors of the Federal Reserve System regarding 
                exemptions that relate to excluded commodities or 
                entities for which the Securities Exchange Commission 
                or the Board of Governors of the Federal Reserve System 
                serve as the primary regulator.
                    ``(C) Before granting an exemption pursuant to 
                subparagraph (A), the Commission shall find that the 
                agreement, contract, or transaction, or class thereof--
                            ``(i) is highly customized as to its 
                        material terms and conditions;
                            ``(ii) is transacted infrequently;
                            ``(iii) does not serve a significant price-
                        discovery function in the marketplace; and
                            ``(iv) is being entered into by parties who 
                        can demonstrate the financial integrity of the 
                        agreement, contract, or transaction and their 
                        own financial integrity, as such terms and 
                        standards are determined by the Commission. The 
                        standards may include, with respect to any 
                        federally regulated financial entity for which 
                        net capital requirements are imposed, a net 
                        capital requirement associated with any 
                        agreement, contract, or transaction subject to 
                        an exemption from the clearing requirement that 
                        is higher than the net capital requirement that 
                        would be associated with such a transaction 
                        were it cleared
                    ``(D) Any agreement, contract, or transaction, or 
                class thereof, which is exempted pursuant to 
                subparagraph (A) shall be reported to the Commission in 
                a manner designated by the Commission, or to such other 
                entity the Commission deems appropriate.
                    ``(E) The Commission, the Securities and Exchange 
                Commission and the Board of Governors of the Federal 
                Reserve System shall enter into a memorandum of 
                understanding by which the information reported to the 
                Commission pursuant to subparagraph (D) with regard to 
                excluded commodities or entities for which the 
                Securities Exchange Commission or the Board of 
                Governors of the Federal Reserve System serve as the 
                primary regulator may be provided to the other 
                agencies.
    ``(g) Spot and Forward Exclusion.--The settlement and clearing 
requirements of section 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 
2(h)(3)(C), or 4(c)(1) shall not apply to an agreement, contract, or 
transaction of any cash commodity for immediate or deferred shipment or 
delivery, as defined by the Commission.''.
    (c) Additional Requirements Applicable to Applicants for 
Registration as a Derivative Clearing Organization.--Section 5b(c)(2) 
of such Act (7 U.S.C. 7a-1(c)(2)) is amended by adding at the end the 
following:
                    ``(O) Disclosure of general information.--The 
                applicant shall disclose publicly and to the Commission 
                information concerning--
                            ``(i) the terms and conditions of 
                        contracts, agreements, and transactions cleared 
                        and settled by the applicant;
                            ``(ii) the conventions, mechanisms, and 
                        practices applicable to the contracts, 
                        agreements, and transactions;
                            ``(iii) the margin-setting methodology and 
                        the size and composition of the financial 
                        resource package of the applicant; and
                            ``(iv) other information relevant to 
                        participation in the settlement and clearing 
                        activities of the applicant.
                    ``(P) Daily publication of trading information.--
                The applicant shall make public daily information on 
                settlement prices, volume, and open interest for 
                contracts settled or cleared pursuant to the 
                requirements of 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 
                2(h)(1)(C), 2(h)(3)(C) or 4(c)(1) of this Act by the 
                applicant if the Commission determines that the 
                contracts perform a significant price discovery 
                function for transactions in the cash market for the 
                commodity underlying the contracts.
                    ``(Q) Fitness standards.--The applicant shall 
                establish and enforce appropriate fitness standards for 
                directors, members of any disciplinary committee, and 
                members of the applicant, and any other persons with 
                direct access to the settlement or clearing activities 
                of the applicant, including any parties affiliated with 
                any of the persons described in this subparagraph.''.
    (d) Amendments.--
            (1) Section 409 of the Federal Deposit Insurance 
        Corporation Improvement Act of 1991 (12 U.S.C. 4422) is amended 
        by adding at the end the following:
    ``(c) Clearing Requirement.--A multilateral clearing organization 
described in subsections (a) or (b) of this section shall comply with 
requirements similar to the requirements of sections 5b and 5c or the 
Commodity Exchange Act.''.
            (2) Section 407 of the Legal Certainty for Bank Products 
        Act of 2000 (7 U.S.C. 27e) is amended by inserting ``and the 
        settlement and clearing requirements of sections 2(d)(1)(C), 
        2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 2(h)(3)(C), and 4(c)(1) of 
        such Act'' after ``the clearing of covered swap agreements''.
    (e) Effective Date.--The amendments made by this section shall take 
effect 150 days after the date of the enactment of this Act.
    (f) Transition Rule.--Any agreement, contract, or transaction 
entered into before the date of the enactment of this Act or within 150 
days after such date of enactment, in reliance on subsection (d), (g), 
(h)(1), or (h)(3) of section 2 of the Commodity Exchange Act or any 
other exemption issued by the Commission Futures Trading Commission by 
rule, regulation, or order shall, within 90 days after such date of 
enactment, unless settled and cleared through an entity registered with 
the Commission as a derivatives clearing organization or another 
clearing entity pursuant to section 4(f) of such Act, be reported to 
the Commission in a manner designated by the Commission, or to such 
other entity as the Commission deems appropriate.

SEC. 355. LIMITATION ON ELIGIBILITY TO PURCHASE A CREDIT DEFAULT SWAP.

    (a) In General.--Section 4c of the Commodity Exchange Act (7 U.S.C. 
6c) is amended by adding at the end the following:
    ``(h) Limitation on Eligibility to Purchase a Credit Default 
Swap.--It shall be unlawful for any person to enter into a credit 
default swap unless the person--
            ``(1) owns a credit instrument which is insured by the 
        credit default swap;
            ``(2) would experience financial loss if an event that is 
        the subject of the credit default swap occurs with respect to 
        the credit instrument; and
            ``(3) meets such minimum capital adequacy standards as may 
        be established by the Commission, in consultation with the 
        Board of Governors of the Federal Reserve System, or such more 
        stringent minimum capital adequacy standards as may be 
        established by or under the law of any State in which the swap 
        is originated or entered into, or in which possession of the 
        contract involved takes place.''.
    (b) Elimination of Preemption of State Bucketing Laws Regarding 
Naked Credit Default Swaps.--Section 12(e)(2)(B) of such Act (7 U.S.C. 
16(e)(2)(B)) is amended by inserting ``(other than a credit default 
swap in which the purchaser of the swap would not experience financial 
loss if an event that is the subject of the swap occurred)'' before 
``that is excluded''.
    (c) Definition of Credit Default Swap.--Section 1a of such Act (7 
U.S.C. 1a), as amended by section 351(a) of this Act, is amended by 
adding at the end the following:
            ``(37) Credit default swap.--the term `credit default swap' 
        means a contract which insures a party to the contract against 
        the risk that an entity may experience a loss of value as a 
        result of an event specified in the contract, such as a default 
        or credit downgrade. A credit default swap that is traded on or 
        cleared by a registered entity shall be excluded from the 
        definition of a security as defined in this Act and in section 
        2(a)(1) of the Securities Act of 1933 or section 3(a)(10) of 
        the Securities Exchange Act of 1934, except it shall be deemed 
        a security solely for purpose of enforcing prohibitions against 
        insider trading in sections 10 and 16 of the Securities 
        Exchange Act of 1934.''.
    (d) Effective Date.--The amendments made by this section shall be 
effective for credit default swaps (as defined in section 1a(37) of the 
Commodity Exchange Act) entered into after 60 days after the date of 
the enactment of this section.

SEC. 356. TRANSACTION FEES.

    (a) In General.--Section 12 of the Commodity Exchange Act (7 U.S.C. 
16) is amended by redesignating subsections (e), (f), and (g) as 
subsections (f), (g), and (h), respectively, and inserting after 
subsection (d) the following:
    ``(e) Clearing Fees.--
            ``(1) In general.--The Commission shall, in accordance with 
        this subsection, charge and collect from each registered 
        clearing organization, and each such organization shall pay to 
        the Commission, transaction fees at a rate calculated to 
        recover the costs to the Federal Government of the supervision 
        and regulation of futures markets, except those directly 
        related to enforcement.
            ``(2) Fees assessed per side of cleared contracts.--
                    ``(A) In general.--The Commission shall determine 
                the fee rate referred to in paragraph (1), and shall 
                apply the fee rate per side of any transaction cleared.
                    ``(B) Authority to delegate.--The Commission may 
                determine the procedures by which the fee rate is to be 
                applied on the transactions subject to the fee, or 
                delegate the authority to make the determination to any 
                appropriate derivatives clearing organization.
            ``(3) Exemptions.--The Commision may not impose a fee under 
        paragraph (1) on--
                    ``(A) a class of contracts or transactions if the 
                Commission finds that it is in the public interest to 
                exempt the class from the fee; or
                    ``(B) a contract or transaction cleared by a 
                registered derivatives clearing organization that is--
                            ``(i) subject to fees under section 31 of 
                        the Securities Exchange Act of 1934; or
                            ``(ii) a security as defined in the 
                        Securities Act of 1933 or the Securities 
                        Exchange Act of 1934.
            ``(4) Dates for payment of fees.--The fees imposed under 
        paragraph (1) shall be paid on or before--
                    ``(A) March 15 of each year, with respect to 
                transactions occurring on or after the preceding 
                September 1 and on or before the preceding December 31; 
                and
                    ``(B) September 15 of each year, with respect to 
                transactions occurring on or after the preceding 
                January 1 and on or before the preceding August 31.
            ``(5) Annual adjustment of fee rates.--
                    ``(A) In general.--Not later than April 30 of each 
                fiscal year, the Commission shall, by order, adjust 
                each fee rate determined under paragraph (2) for the 
                fiscal year to a uniform adjusted rate that, when 
                applied to the estimated aggregate number of cleared 
                sides of transactions for the fiscal year, is 
                reasonably likely to produce aggregate fee receipts 
                under this subsection for the fiscal year equal to the 
                target offsetting receipt amount for the fiscal year.
                    ``(B) Definitions.--In subparagraph (A):
                            ``(i) Estimated aggregate number of cleared 
                        sides of transactions.--The term `estimated 
                        aggregate number of cleared sides of 
                        transactions' means, with respect to a fiscal 
                        year, the aggregate number of cleared sides of 
                        transactions to be cleared by registered 
                        derivatives clearing organizations during the 
                        fiscal year, as estimated by the Commission, 
                        after consultation with the Office of 
                        Management and Budget, using the methodology 
                        required for making projections pursuant to 
                        section 257 of the Balanced Budget and 
                        Emergency Deficit Control Act of 1985.
                            ``(ii) Target offsetting receipt amount.--
                        The term `target offsetting receipt amount' 
                        means, with respect to a fiscal year, the total 
                        level of Commission budget authority for all 
                        non-enforcement activities of the Commission, 
                        as contained in the regular appropriations Acts 
                        for the fiscal year.
                    ``(C) No judicial review.--An adjusted fee rate 
                prescribed under subparagraph (A) shall not be subject 
                to judicial review.
            ``(6) Publication.--Not later than April 30 of each fiscal 
        year, the Commission shall cause to be published in the Federal 
        Register notices of the fee rates applicable under this 
        subsection for the succeeding fiscal year, and any estimate or 
        projection on which the fee rates are based.
            ``(7) Inapplicability of certain procedural rules.--Section 
        553 of title 5, United States Code, shall not apply with 
        respect to any exercise of authority under this subsection.
            ``(8) Establishment of futures and options transaction fee 
        account; deposit of fees.--There is established in the Treasury 
        of the United States an account which shall be known as the 
        `Futures and Options Transaction Fee Account'. All fees 
        collected under this subsection for a fiscal year shall be 
        deposited in the account. Amounts in the account are authorized 
        to be appropriated to fund the expenditures of the 
        Commission.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to fiscal years beginning 30 or more days after the date of the 
enactment of this Act.
    (c) Transition Rule.--If this section becomes law after March 31 
and before September 1 of a fiscal year, then paragraphs (5)(A) and (6) 
of section 12(e) of the Commodity Exchange Act shall be applied, in the 
case of the 1st fiscal year beginning after the date of the enactment 
of this Act, by substituting ``August 31'' for ``April 30''.

SEC. 357. NO EFFECT ON AUTHORITY OF THE FEDERAL TRADE COMMISSION.

    Nothing in this subtitle shall be interpreted to affect or diminish 
the jurisdiction or authority of the Federal Trade Commission with 
respect to its authorities under the Federal Trade Commission Act (15 
U.S.C. 41 et seq.) or the Energy Independence and Security Act of 2007 
(Public Law 110-140) to obtain information, to carry out enforcement 
activities or otherwise carry out the responsibilities of the Federal 
Trade Commission.

SEC. 358. REGULATION OF CARBON DERIVATIVES MARKETS.

    (a) Default Rule.--Section 2 of the Commodity Exchange Act (7 
U.S.C. 2), as amended by section 352 of this Act, is amended by adding 
at the end the following:
    ``(k) The Commission shall have jurisdiction over the 
establishment, operations, and oversight of markets for regulated 
allowance derivatives (as defined in section 401 of the Federal Power 
Act (16 U.S.C. 791a and following), and shall provide for the 
establishment, operation, and oversight of the markets in accordance 
with the same regulations that apply under this Act to included energy 
transactions.''.
    (b) Presidential Determinations.--To the extent that the President 
delegates the authority to promulgate regulations for the 
establishment, operation, and oversight of all markets for regulated 
allowance derivatives to a Federal agency other than the Commodity 
Futures Trading Commission pursuant to section 401 of the Federal Power 
Act, such determination shall supersede subsection (a). To the extent 
that the President determines that regulations promulgated pursuant to 
section 401(c)(2) of the Federal Power Act would provide for more 
stringent and effective market oversight, such regulations shall 
supersede subsection (a). Nothing in this section shall be construed to 
affect the operation of the default rules established in section 
401(c)(4) of the Federal Power Act.

           TITLE IV--TRANSITIONING TO A CLEAN ENERGY ECONOMY

                     Subtitle A--Industrial Sector

SEC. 401. ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS.

    Title VII of the Clean Air Act is amended by inserting after part E 
the following new part:

       ``PART F--ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS

``SEC. 761. PURPOSES.

    ``(a) Purpose of Part.--The purposes of this part are--
            ``(1) to promote a strong global effort to significantly 
        reduce greenhouse gas emissions, and, through this global 
        effort, stabilize greenhouse gas concentrations in the 
        atmosphere at a level that will prevent dangerous anthropogenic 
        interference with the climate system; and
            ``(2) to prevent an increase in greenhouse gas emissions in 
        countries other than the United States as a result of direct 
        and indirect compliance costs incurred under this title.
    ``(b) Purposes of Subpart 1.--The purposes of subpart 1 are 
additionally--
            ``(1) to rebate the owners and operators of entities in 
        eligible domestic industrial sectors for their greenhouse gas 
        emission costs incurred under this title, but not for costs 
        associated with other related or unrelated market dynamics;
            ``(2) to design such rebates in a way that will prevent 
        carbon leakage while also rewarding innovation and facility-
        level investments in energy efficiency performance 
        improvements; and
            ``(3) to eliminate or reduce distribution of emission 
        allowances under this part when such distribution is no longer 
        necessary to prevent carbon leakage from eligible industrial 
        sectors.

``SEC. 762. INTERNATIONAL NEGOTIATIONS.

    ``(a) Finding.--Congress finds that the purposes of this part, as 
set forth in section 761, can be most effectively addressed and 
achieved through agreements negotiated between the United States and 
foreign countries.
    ``(b) Statement of Policy.--It is the policy of the United States 
to work proactively under the United Nations Framework Convention on 
Climate Change, and in other appropriate forums, to establish binding 
agreements, including sectoral agreements, committing all major 
greenhouse gas-emitting nations to contribute equitably to the 
reduction of global greenhouse gas emissions.
    ``(c) Notification of Foreign Countries.--Not later than January 1, 
2020, the President shall notify foreign countries that an 
International Reserve Allowance Program, as described in subpart 2, may 
apply to primary products produced in a foreign country by a sector for 
which the President has made a determination described in section 
767(c).

``SEC. 763. DEFINITIONS.

    ``In this part:
            ``(1) Carbon leakage.--The term `carbon leakage' means any 
        substantial increase (as determined by the Administrator) in 
        greenhouse gas emissions by industrial entities located in 
        other countries if such increase is caused by an incremental 
        cost of production increase in the United States resulting from 
        the implementation of this title.
            ``(2) Eligible industrial sector.--The term `eligible 
        industrial sector' means an industrial sector determined by the 
        Administrator under section 764(b) to be eligible to receive 
        emission allowance rebates under subpart 1.
            ``(3) Industrial sector.--The term `industrial sector' 
        means any sector that is in the manufacturing sector (as 
        defined in NAICS codes 31, 32, and 33).
            ``(4) NAICS.--The term `NAICS' means the North American 
        Industrial Classification System of 2002.
            ``(5) Output.--The term `output' means the total tonnage or 
        other standard unit of production (as determined by the 
        Administrator) produced by an entity in an industrial sector. 
        The output of the cement sector is hydraulic cement, and not 
        clinker.
            ``(6) Primary product.--The term `primary product' means a 
        product manufactured by an eligible industrial sector that is--
                    ``(A) iron, steel, steel mill products (including 
                pipe and tube), aluminum, cement, glass (including 
                flat, container, and specialty glass and fiberglass), 
                pulp, paper, chemicals, or industrial ceramics; or
                    ``(B) any other manufactured product that is sold 
                in bulk for purposes of further manufacture or 
                inclusion in a finished product.

             ``Subpart 1--Emission Allowance Rebate Program

``SEC. 764. ELIGIBLE INDUSTRIAL SECTORS.

    ``(a) List.--
            ``(1) Initial list.--Not later than June 30, 2011, the 
        Administrator shall publish in the Federal Register a list of 
        eligible industrial sectors pursuant to subsection (b). Such 
        list shall include the amount of the emission allowance rebate 
        per unit of production that shall be provided to entities in 
        each eligible industrial sector in the following two calendar 
        years pursuant to section 765.
            ``(2) Subsequent lists.--Not later than February 1, 2013, 
        and every four years thereafter, the Administrator shall 
        publish in the Federal Register an updated version of the list 
        published under paragraph (1).
    ``(b) Eligible Industrial Sectors.--
            ``(1) In general.--Not later than June 30, 2011, the 
        Administrator shall promulgate a rule designating, based on the 
        criteria under paragraph (2), the industrial sectors eligible 
        for emission allowance rebates under this subpart.
            ``(2) Presumptively eligible industrial sectors.--
                    ``(A) Eligibility criteria.--An owner or operator 
                of an entity shall be eligible to receive emission 
                allowance rebates under this subpart if such entity is 
                in an industrial sector that is included in a six-digit 
                classification of the NAICS that meets the criteria in 
                both clauses (i) and (ii), or the criteria in clause 
                (iii).
                            ``(i) Energy or greenhouse gas intensity.--
                        As determined by the Administrator, the 
                        industrial sector had--
                                    ``(I) an energy intensity of at 
                                least 5 percent, calculated by dividing 
                                the cost of purchased electricity and 
                                fuel costs of the sector by the value 
                                of the shipments of the sector, based 
                                on data described in subparagraph (E); 
                                or
                                    ``(II) a greenhouse gas intensity 
                                of at least 5 percent, calculated by 
                                dividing--
                                            ``(aa) the number 20 
                                        multiplied by the number of 
                                        tons of carbon dioxide 
                                        equivalent greenhouse gas 
                                        emissions (including direct 
                                        emissions from fuel combustion, 
                                        process emissions, and indirect 
                                        emissions from the generation 
                                        of electricity used to produce 
                                        the output of the sector) of 
                                        the sector; by
                                            ``(bb) the value of the 
                                        shipments of the sector, based 
                                        on data described in 
                                        subparagraph (E).
                            ``(ii) Trade intensity.--As determined by 
                        the Administrator, the industrial sector had a 
                        trade intensity of at least 15 percent, 
                        calculated by dividing the value of the total 
                        imports and exports of such sector by the value 
                        of the shipments plus the value of imports of 
                        such sector, based on data described in 
                        subparagraph (E).
                            ``(iii) Very high energy or greenhouse gas 
                        intensity.--As determined by the Administrator, 
                        the industrial sector had an energy or 
                        greenhouse gas intensity, as calculated under 
                        clause (i)(I) or (II), of at least 20 percent.
                    ``(B) Iron and steel sector.--The Administrator 
                shall consider as in different industrial sectors--
                            ``(i) entities using integrated iron and 
                        steelmaking technologies (including coke ovens, 
                        blast furnaces, and other iron-making 
                        technologies); and
                            ``(ii) entities using electric arc furnace 
                        technologies.
                    ``(C) Metal production classified under more than 
                one naics code.--In determining eligibility under this 
                subsection, the Administrator shall--
                            ``(i) aggregate data for the beneficiation 
                        or other processing of iron and copper ores 
                        with subsequent steps in the process of metal 
                        manufacturing regardless of the NAICS code 
                        under which such activity is classified; and
                            ``(ii) aggregate data for the manufacturing 
                        of steel with the manufacturing of steel pipe 
                        and tube made from purchased steel in a 
                        nonintegrated process.
                    ``(D) Exclusion.--The petroleum refining sector 
                shall not be an eligible industrial sector.
                    ``(E) Data sources.--
                            ``(i) Electricity and fuel costs, value of 
                        shipments.--The Administrator shall determine 
                        electricity and fuel costs and the value of 
                        shipments under this subsection from data from 
                        the United States Census of Mineral Industries 
                        and the United States Census Annual Survey of 
                        Manufacturers. The Administrator shall take the 
                        average of data from as many of the years of 
                        2004, 2005, and 2006 for which such data are 
                        available. If such data are unavailable, the 
                        Administrator shall make a determination based 
                        upon 2002 or 2006 data from the most detailed 
                        industrial classification level of Energy 
                        Information Agency's Manufacturing Energy 
                        Consumption Survey (using 2006 data if it is 
                        available) and the 2002 or 2007 Economic Census 
                        of the United States (using 2007 data if it is 
                        available). If data from the Manufacturing 
                        Energy Consumption Survey are unavailable for 
                        any sector at the six-digit classification 
                        level in the NAICS, then the Administrator may 
                        extrapolate the information necessary to 
                        determine the eligibility of a sector under 
                        this paragraph from available Manufacturing 
                        Energy Consumption Survey data pertaining to a 
                        broader industrial category classified in the 
                        NAICS. Fuel cost data shall not include the 
                        cost of fuel used as feedstock by an industrial 
                        sector.
                            ``(ii) Imports and exports.--The 
                        Administrator shall base the value of imports 
                        and exports under this subsection on United 
                        States International Trade Commission data. The 
                        Administrator shall take the average of data 
                        from as many of the years of 2004, 2005, and 
                        2006 for which such data are available.
                            ``(iii) Percentages.--The Administrator 
                        shall round the energy intensity, greenhouse 
                        gas intensity, and trade intensity percentages 
                        under subparagraph (A) to the nearest whole 
                        number.
                            ``(iv) Greenhouse gas emission 
                        calculations.--When calculating the tons of 
                        carbon dioxide equivalent greenhouse gas 
                        emissions for each sector under subparagraph 
                        (A)(i)(II)(aa), the Administrator may, to the 
                        extent necessary with respect to a sector, use 
                        economic and engineering models and the best 
                        available information on technology performance 
                        levels for such sector.
            ``(3) Administrative determination of additional eligible 
        industrial sectors.--
                    ``(A) Individual showing petition.--
                            ``(i) Petition.--The owner or operator of 
                        an entity in an industrial sector may petition 
                        the Administrator to designate as eligible 
                        industrial sectors under this subpart an entity 
                        or a group of entities that--
                                    ``(I) represent a subsector of a 
                                six-digit section of the NAICS code; 
                                and
                                    ``(II) meet the eligibility 
                                criteria in both clauses (i) and (ii) 
                                of paragraph (2)(A), or the eligibility 
                                criteria in clause (iii) of paragraph 
                                (2)(A).
                            ``(ii) Data.--In making a determination 
                        under this subparagraph, the Administrator 
                        shall consider data submitted by the petitioner 
                        that is specific to the entity, data solicited 
                        by the Administrator from other entities in the 
                        subsector, if such other entities exist, and 
                        data specified in paragraph (2)(E).
                            ``(iii) Basis of subsector determination.--
                        The Administrator shall determine an entity or 
                        group of entities to be a subsector of a six-
                        digit section of the NAICS code based only upon 
                        the products manufactured and not the 
                        industrial process by which the products are 
                        manufactured, except that the Administrator may 
                        determine an entity or group of entities that 
                        manufacture a product from a virgin material to 
                        be a separate subsector from another entity or 
                        group of entities that manufacture the same 
                        product from recycled material.
                            ``(iv) Final action.--The Administrator 
                        shall take final action on such petition no 
                        later than 6 months after the petition is 
                        received by the Administrator.
                    ``(B) Updated trade intensity data.--The 
                Administrator shall designate as eligible to receive 
                emission allowance rebates under this subpart an 
                industrial sector that--
                            ``(i) met the energy or greenhouse gas 
                        intensity criteria in paragraph (2)(A)(i) as of 
                        the date of promulgation of the rule under 
                        paragraph (1); and
                            ``(ii) meets the trade intensity criteria 
                        in paragraph (2)(A)(ii), using data from any 
                        year after 2006.
                    ``(C) Use of most recent data.--In determining 
                whether to designate a sector or subsector as an 
                eligible industrial sector under this paragraph, the 
                Administrator shall use the most recent data available 
                from the sources described in paragraph (2)(E), rather 
                than the data from the years specified in paragraph 
                (2)(E), to determine the trade intensity of such sector 
                or subsector, but only for determining such trade 
                intensity.

``SEC. 765. DISTRIBUTION OF EMISSION ALLOWANCE REBATES.

    ``(a) Distribution Schedule.--
            ``(1) In general.--For each vintage year, the Administrator 
        shall distribute allowances pursuant to this section no later 
        than October 31 of the preceding calendar year. The 
        Administrator shall make such annual distributions to the 
        owners and operators of each entity in an eligible industrial 
        sector in the amount of emission allowances calculated under 
        subsection (b), except that--
                    ``(A) for vintage years 2012 and 2013, the 
                distribution for a covered entity shall be the entity's 
                indirect carbon factor as calculated under subsection 
                (b)(3); and
                    ``(B) for vintage year 2026 and thereafter, the 
                distribution shall be the amount calculated under 
                subsection (b) multiplied by, except as modified by the 
                President pursuant to section 767(c)(3)(A) for a 
                sector--
                            ``(i) 90 percent for vintage year 2026;
                            ``(ii) 80 percent for vintage year 2027;
                            ``(iii) 70 percent for vintage year 2028;
                            ``(iv) 60 percent for vintage year 2029;
                            ``(v) 50 percent for vintage year 2030;
                            ``(vi) 40 percent for vintage year 2031;
                            ``(vii) 30 percent for vintage year 2032;
                            ``(viii) 20 percent for vintage year 2033;
                            ``(ix) 10 percent for vintage year 2034; 
                        and
                            ``(x) 0 percent for vintage year 2035 and 
                        thereafter.
            ``(2) Resumption of reduction.--If the President has 
        modified the percentage stated in paragraph (1)(B) under 
        section 767(c)(3)(A), and the President subsequently makes a 
        determination under section 767(b) for an eligible industrial 
        sector that more than 70 percent of global output for that 
        sector is produced or manufactured in countries that have met 
        at least one of the criteria in that subsection, then the 
        reduction schedule set forth in paragraph (1)(B) of this 
        subsection shall begin in the next vintage year, with the 
        percentage reduction based on the amount of the distribution of 
        emission allowances under this section in the previous year.
            ``(3) Newly eligible sectors.--In addition to receiving a 
        distribution of emission allowances under this section in the 
        first distribution occurring after an industrial sector is 
        designated as eligible under section 764(b)(3), the owner or 
        operator of an entity in that eligible industrial sector may 
        receive a prorated share of any emission allowances made 
        available for distribution under this section that were not 
        distributed for the year in which the petition for eligibility 
        was granted under section 764(b)(3).
    ``(b) Calculation of Direct and Indirect Carbon Factors.--
            ``(1) In general.--
                    ``(A) Covered entities.--Except as provided in 
                subsection (a), for covered entities, the amount of 
                emission allowance rebates shall be based on the sum of 
                the covered entity's direct and indirect carbon 
                factors.
                    ``(B) Other eligible entities.--For entities that 
                are in eligible industrial sectors but are not covered 
                entities, the amount of emission allowance rebates 
                shall be based on the entity's indirect carbon factor.
                    ``(C) New entities.--Not later than 2 years after 
                the date of enactment of this title, the Administrator 
                shall issue regulations governing the distribution of 
                emission allowance rebates for the first and second 
                years of operation of a new entity in an eligible 
                industrial sector. These regulations shall provide 
                for--
                            ``(i) the distribution of emission 
                        allowance rebates to such entities based on 
                        comparable entities in the same sector; and
                            ``(ii) an adjustment in the third and 
                        fourth years of operation to reconcile the 
                        total amount of emission allowance rebates 
                        received during the first and second years of 
                        operation to the amount the entity would have 
                        received during the first and second years of 
                        operation had the appropriate data been 
                        available.
            ``(2) Direct carbon factor.--The direct carbon factor for a 
        covered entity for a vintage year is the product of--
                    ``(A) the average output of the covered entity for 
                the two years preceding the year of the distribution; 
                and
                    ``(B) the most recent calculation of the average 
                direct greenhouse gas emissions (expressed in tons of 
                carbon dioxide equivalent) per unit of output for all 
                covered entities in the sector, as determined by the 
                Administrator under paragraph (4).
            ``(3) Indirect carbon factor.--
                    ``(A) In general.--The indirect carbon factor for 
                an entity for a calendar year is the product obtained 
                by multiplying the average output of the entity for the 
                two years preceding the years of the distribution by 
                both the electricity emissions intensity factor 
                determined pursuant to subparagraph (B) and the 
                electricity efficiency factor determined pursuant to 
                subparagraph (C) for the year concerned.
                    ``(B) Electricity emissions intensity factor.--Each 
                person selling electricity to the owner or operator of 
                an entity in any sector designated as an eligible 
                industrial sector under section 764(b) shall provide 
                the owner or operator of the entity and the 
                Administrator, on an annual basis, the electricity 
                emissions intensity factor for the entity. The 
                electricity emissions intensity factor for the entity, 
                expressed in tons of carbon dioxide equivalents per 
                kilowatt hour, is determined by dividing--
                            ``(i) the annual sum of the hourly product 
                        of--
                                    ``(I) the electricity purchased by 
                                the entity from that person in each 
                                hour (expressed in kilowatt hours), 
                                multiplied by
                                    ``(II) the cost the person selling 
                                the electricity passes to the entity 
                                per ton of carbon dioxide equivalent 
                                emitted by the electricity provider per 
                                kilowatt hour, taking into account the 
                                entity's retail rate arrangements, by
                            ``(ii) the total kilowatt hours of 
                        electricity purchased by the entity from that 
                        person during that year.
                    ``(C) Electricity efficiency factor.--The 
                electricity efficiency factor is the average amount of 
                electricity (in kilowatt hours) used per unit of output 
                for all entities in the relevant sector, as determined 
                by the Administrator based on the best available data, 
                including data provided under paragraph (6).
                    ``(D) Indirect carbon factor reduction.--If an 
                electricity provider received a free allocation of 
                emission allowances pursuant to section [782], the 
                Administrator shall adjust the indirect carbon factor 
                to avoid rebates to the eligible entity for costs that 
                the Administrator determines were not incurred by the 
                industrial entity because the allowances were freely 
                allocated to the eligible entity's electricity provider 
                and used for the benefit of industrial consumers.
            ``(4) Greenhouse gas intensity calculations.--The 
        Administrator shall calculate the average direct greenhouse gas 
        emissions (expressed in tons of carbon dioxide equivalent) per 
        unit of output for all covered entities in each eligible 
        industrial sector every four years using an average of the two 
        most recent years of the best available data.
            ``(5) Ensuring efficiency improvements.--When making 
        greenhouse gas calculations, the Administrator shall--
                    ``(A) limit the average direct greenhouse gas 
                emissions per unit of output, calculated under 
                paragraph (4), for any eligible industrial sector to an 
                amount that is not greater than it was in any previous 
                calculation under this subsection; and
                    ``(B) limit the electric emissions intensity 
                factor, calculated under paragraph (3)(B) and resulting 
                from a change in electricity supply, for any entity to 
                an amount that is not greater than it was during any 
                previous year.
            ``(6) Data sources.--For the purposes of this subsection--
                    ``(A) the Administrator shall use data from the 
                greenhouse gas registry, established under section 713, 
                where it is available; and
                    ``(B) each owner or operator of an entity in an 
                eligible industrial sector and each department, agency, 
                and instrumentality of the United States shall provide 
                the Administrator with such information as the 
                Administrator finds necessary to determine the direct 
                carbon factor and the indirect carbon factor for each 
                entity subject to this section.
    ``(c) Total Maximum Distribution.--Notwithstanding subsections (a) 
and (b), the Administrator shall not distribute more allowances for any 
vintage year pursuant to this section than are allocated for use under 
this part pursuant to section [782] for that vintage year. For any 
vintage year for which the total emission allowance rebates calculated 
pursuant to this section exceed the number of allowances allocated 
pursuant to section [782], the Administrator shall reduce each entity's 
distribution on a pro rata basis so that the total distribution under 
this section equals the number of allowances allocated under section 
[782].

          ``Subpart 2--International Reserve Allowance Program

``SEC. 766. INTERNATIONAL RESERVE ALLOWANCE PROGRAM.

    ``(a) Establishment.--
            ``(1) In general.--If the President takes an action 
        described in section 767(c)(3)(B) with respect to a sector 
        then, not later than 24 months after that determination, the 
        Administrator shall issue regulations--
                    ``(A) determining an appropriate price for and 
                offering for sale to United States importers 
                international reserve allowances;
                    ``(B) requiring the submission of appropriate 
                amounts of such allowances in conjunction with the 
                importation into the United States of a primary product 
                produced or manufactured by that sector;
                    ``(C) exempting from the requirements of 
                subparagraph (B) primary products produced in--
                            ``(i) foreign countries that the United 
                        Nations has identified as among the least 
                        developed of developing countries; or
                            ``(ii) foreign countries that the President 
                        has determined to be responsible for less than 
                        0.5 percent of total global greenhouse gas 
                        emissions; and
                    ``(D) prohibiting the introduction into interstate 
                commerce of a primary product without submitting the 
                required number of international reserve allowances in 
                accordance with such regulations, unless the product 
                was produced by a covered entity under this title, or 
                by an entity that is or could be regulated under this 
                title.
            ``(2) Purpose of program.--The Administrator shall 
        establish the program under paragraph (1) in a manner that 
        addresses, consistent with international agreements to which 
        the United States is a party, the competitive imbalance in the 
        costs of producing or manufacturing primary products in 
        industrial sectors resulting from the difference between--
                    ``(A) the direct and indirect costs of complying 
                with this title; and
                    ``(B) the direct and indirect costs, if any, of 
                complying in other countries with greenhouse gas 
                regulatory programs, requirements, export tariffs, or 
                other measures adopted or imposed to reduce greenhouse 
                gas emissions.
            ``(3) Emission allowance rebates.--The Administrator shall 
        take into account the value of emission allowance rebates 
        distributed under subpart 1 when making calculations under 
        paragraph (2).
            ``(4) Limitation.--The International Reserve Allowance 
        Program may not begin before January 1, 2025.
    ``(b) Covered Entities.--International reserve allowances may not 
be held by covered entities to comply with section 722.

                ``Subpart 3--Presidential Determination

``SEC. 767. PRESIDENTIAL REPORTS AND DETERMINATIONS.

    ``(a) Report.--Not later than January 1, 2018, the President shall 
submit a report to Congress on the effectiveness of the distribution of 
emission allowance rebates under subpart 1 in mitigating carbon leakage 
in industrial sectors. Such report shall also include--
            ``(1) recommendations on how to better achieve the purposes 
        of this part, including an assessment of the feasibility and 
        usefulness of an International Reserve Allowance Program; and
            ``(2) an assessment of the amount and duration of 
        assistance, including distribution of free allowances, being 
        provided to eligible industrial sectors in other developed 
        countries to mitigate costs of compliance with domestic 
        greenhouse gas reduction programs in such countries.
    ``(b) Presidential Determination.--Not later than June 30, 2022, 
and every four years thereafter, the President, in consultation with 
the Administrator and other appropriate agencies, shall determine, for 
each eligible industrial sector, whether more than 70 percent of global 
output for that sector is produced or manufactured in countries that 
have met at least one of the following criteria:
            ``(1) The country is a party to an international agreement 
        to which the United States is a party that includes a 
        nationally enforceable greenhouse gas emissions reduction 
        commitment for that country that is at least as stringent as 
        that of the United States.
            ``(2) The country is a party to a multilateral or bilateral 
        emission reduction agreement for that sector to which the 
        United States is a party.
            ``(3) The country has an annual energy or greenhouse gas 
        intensity, as described in section 764(b)(2)(A)(i), for the 
        sector that is equal to or less than the energy or greenhouse 
        gas intensity for such sector in the United States in the most 
        recent calendar year for which data are available.
            ``(4) The country has implemented policies, including 
        sectoral caps, export tariffs, production fees, electricity 
        generation regulations, or greenhouse gas emissions fees, that 
        individually or collectively impose an incremental increase on 
        the cost of production associated with greenhouse gas emissions 
        from the sector that is at least 60 percent of the cost of 
        complying with this title in the United States for such sector, 
        averaged over a two-year period.
    ``(c) Effect of Presidential Determination.--If the President makes 
a determination under subsection (b) with respect to an eligible 
industrial sector that 70 percent or less of the global output for the 
sector is produced or manufactured in countries that have met one or 
more of the criteria in subsection (b), then the President shall, not 
later than June 30, 2022, and every four years thereafter--
            ``(1) assess the extent to which the emission allowance 
        rebates provided pursuant to subpart 1 have mitigated or 
        addressed, or could mitigate or address, carbon leakage in that 
        sector;
            ``(2) assess the extent to which an International Reserve 
        Allowance Program has mitigated or addressed, or could mitigate 
        or address, carbon leakage in that sector and the feasibility 
        of establishing such a program; and
            ``(3) with respect to that sector--
                    ``(A) modify the percentage by which direct and 
                indirect carbon factors will be multiplied under 
                section 765(a)(1)(B);
                    ``(B) implement an International Reserve Allowance 
                Program under section 766 for the products of the 
                sector; or
                    ``(C) take the actions in both subparagraph (A) and 
                (B).
    ``(d) Report to Congress.--Not later than June 30, 2022, and every 
four years thereafter, the President shall transmit to the Congress a 
report providing notice of any determination made under subsection (b), 
explaining the reasons for such determination, and identifying the 
actions taken by the President under subsection (c).
    ``(e) Limitation.--The President may only implement an 
International Reserve Allowance Program for sectors producing primary 
products.''.

SEC. 402. ALLOCATIONS TO PETROLEUM REFINERIES.

    Title VII of the Clean Air Act is amended by inserting after part F 
the following new part:

                     ``PART G--PETROLEUM REFINERIES

``SEC. 771. ALLOCATIONS TO PETROLEUM REFINERIES.

    ``(a) Output.--In this section, the term `output' means the total 
tonnage or other standard unit of production (as determined by the 
Administrator) produced by a petroleum refinery.
    ``(b) In General.--For each vintage year between 2014 and 2026, the 
Administrator shall distribute allowances pursuant to this section to 
owners and operators of petroleum refineries in the United States.
    ``(c) Distribution Schedule.--The Administrator shall distribute 
emission allowances of each vintage year no later than October 31 of 
the preceding calendar year.
    ``(d) Calculation of Emission Allowance Rebates.--
            ``(1) In general.--The amount of emission allowance rebates 
        distributed to each refinery shall be based on the sum of the 
        refinery's direct and indirect carbon factors.
            ``(2) New refineries.--Not later than 2 years after the 
        date of enactment of this section, the Administrator shall 
        issue regulations governing the distribution of emission 
        allowance rebates for the first and second years of operation 
        of a new petroleum refinery. These regulations shall provide 
        for--
                    ``(A) the distribution of emission allowance 
                rebates to such petroleum refineries based on 
                comparable petroleum refineries; and
                    ``(B) an adjustment in the third and fourth years 
                of operation to reconcile the total amount of emission 
                allowance rebates received during the first and second 
                years of operation to the amount the petroleum refinery 
                would have received during the first and second years 
                of operation had the appropriate data been available.
            ``(3) Direct carbon factor.--The direct carbon factor for a 
        petroleum refinery for a vintage year is the product of--
                    ``(A) the average output of the petroleum refinery 
                for the two years preceding the year of the 
                distribution; and
                    ``(B) the most recent calculation of the average 
                direct greenhouse gas emissions (expressed in tons of 
                carbon dioxide equivalent) per unit of output for all 
                petroleum refineries, as determined by the 
                Administrator under paragraph (5).
            ``(4) Indirect carbon factor.--
                    ``(A) In general.--The indirect carbon factor for a 
                petroleum refinery for a vintage year is the product 
                obtained by multiplying the average output of the 
                petroleum refinery for the two years preceding the 
                years of the distribution by both the electricity 
                emissions intensity factor determined pursuant to 
                subparagraph (B) and the electricity efficiency factor 
                determined pursuant to subparagraph (C) for the year 
                concerned.
                    ``(B) Electricity emissions intensity factor.--Each 
                person selling electricity to the owner or operator of 
                a petroleum refinery shall provide the owner or 
                operator of the petroleum refinery and the 
                Administrator, on an annual basis, the electricity 
                emissions intensity factor for the petroleum refinery. 
                The electricity emissions intensity factor for the 
                petroleum refinery, expressed in tons of carbon dioxide 
                equivalents per kilowatt hour, is determined by 
                dividing--
                            ``(i) the annual sum of the hourly product 
                        of--
                                    ``(I) the electricity purchased by 
                                the petroleum refinery from that person 
                                in each hour (expressed in kilowatt 
                                hours), multiplied by
                                    ``(II) the cost the person selling 
                                the electricity passes to the petroleum 
                                refinery per ton of carbon dioxide 
                                equivalent emitted by the electricity 
                                provider per kilowatt hour, taking into 
                                account the petroleum refinery's retail 
                                rate arrangements, by
                            ``(ii) the total kilowatt hours of 
                        electricity purchased by the petroleum refinery 
                        from that person during that year.
                    ``(C) Electricity efficiency factor.--The 
                electricity efficiency factor is the average amount of 
                electricity (in kilowatt hours) used per unit of output 
                for all petroleum refineries, as determined by the 
                Administrator based on the best available data, 
                including data provided under paragraph (7).
                    ``(D) Indirect carbon factor reduction.--If an 
                electricity provider received a free allocation of 
                emission allowances pursuant to section 782, the 
                Administrator shall adjust the indirect carbon factor 
                to avoid rebates to the petroleum refinery for costs 
                that the Administrator determines were not incurred by 
                the petroleum refinery because the allowances were 
                freely allocated to the petroleum refinery's 
                electricity provider and used for the benefit of 
                petroleum refineries.
            ``(5) Greenhouse gas intensity calculations.--The 
        Administrator shall calculate the average direct greenhouse gas 
        emissions (expressed in tons of carbon dioxide equivalent) per 
        unit of output for all petroleum refineries not less than once 
        every five years using an average of the two most recent years 
        of the best available data.
            ``(6) Ensuring efficiency improvements.--When making 
        greenhouse gas calculations, the Administrator shall--
                    ``(A) limit the average direct greenhouse gas 
                emissions per unit of output, calculated under 
                paragraph (5), to an amount that is not greater than it 
                was in any previous calculation under this subsection; 
                and
                    ``(B) limit the electricity emissions intensity 
                factor, calculated under paragraph (4)(B) and resulting 
                from a change in electricity supply, for any petroleum 
                refinery to an amount that is not greater than it was 
                during any previous year.
            ``(7) Data sources.--For the purposes of this subsection--
                    ``(A) the Administrator shall use data from the 
                greenhouse gas registry, established under section 713, 
                where it is available; and
                    ``(B) each owner or operator of a petroleum 
                refinery and each department, agency, and 
                instrumentality of the United States shall provide the 
                Administrator with such information as the 
                Administrator finds necessary to determine the direct 
                carbon factor and the indirect carbon factor for each 
                petroleum refinery subject to this section.
    ``(e) Total Maximum Distribution.--The Administrator shall not 
distribute more allowances for any vintage year pursuant to this 
section than are allocated for use under this part pursuant to section 
782 for that vintage year. For any vintage year for which the total 
emission allowance rebates calculated pursuant to this section exceed 
the number of allowances allocated pursuant to section 782, the 
Administrator shall reduce each petroleum refinery's distribution on a 
pro rata basis so that the total distribution under this section equals 
the number of allowances allocated under section 782.''.

              Subtitle B--Green Jobs and Worker Transition

                           PART 1--GREEN JOBS

SEC. 421. CLEAN ENERGY CURRICULUM DEVELOPMENT GRANTS.

    (a) Authorization.--The Secretary of Education is authorized to 
award grants, on a competitive basis, to eligible partnerships to 
develop programs of study (containing the information described in 
section 122(c)(1)(A) of the Carl D. Perkins Career and Technical 
Education Act of 2006 (20 U.S.C. 2342), that are focused on emerging 
careers and jobs in renewable energy, energy efficiency, and climate 
change mitigation. The Secretary of Education shall consult with the 
Secretary of Labor and the Secretary of Energy prior to the issuance of 
a solicitation for grant applications.
    (b) Eligible Partnerships.--For purposes of this section, an 
eligible partnership shall include--
            (1) at least 1 local educational agency eligible for 
        funding under section 131 of the Carl D. Perkins Career and 
        Technical Education Act of 2006 (20 U.S.C. 2351) or an area 
        career and technical education school or education service 
        agency described in such section;
            (2) at least 1 postsecondary institution eligible for 
        funding under section 132 of such Act (20 U.S.C. 2352); and
            (3) representatives of the community including business, 
        labor organizations, and industry that have experience in clean 
        energy.
    (c) Application.--An eligible partnership seeking a grant under 
this section shall submit an application to the Secretary at such time 
and in such manner as the Secretary may require. Applications shall 
include--
            (1) a description of the eligible partners and partnership, 
        the roles and responsibilities of each partner, and a 
        demonstration of each partner's capacity to support the 
        program;
            (2) a description of the career area or areas within the 
        field of clean energy to be developed, the reason for the 
        choice, and evidence of the labor market need to prepare 
        students in that area;
            (3) a description of the new or existing program of study 
        and both secondary and postsecondary components;
            (4) a description of the students to be served by the new 
        program of study;
            (5) a description of how the program of study funded by the 
        grant will be replicable and disseminated to schools outside of 
        the partnership, including urban and rural areas;
            (6) a description of applied learning that will be 
        incorporated into the program of study and how it will 
        incorporate or reinforce academic learning;
            (7) a description of how the program of study will be 
        delivered;
            (8) a description of how the program will provide 
        accessibility to students, especially economically 
        disadvantaged, low performing, and urban and rural students;
            (9) a description of how the program will address placement 
        of students in nontraditional fields as described in section 
        3(20) of the Carl D. Perkins Career and Technical Education Act 
        of 2006 (20 U.S.C. 2302(20)); and
            (10) a description of how the applicant proposes to consult 
        or has consulted with a labor organization, labor management 
        partnership, apprenticeship program, or joint apprenticeship 
        and training program that provides education and training in 
        the field of study for which the applicant proposes to develop 
        a curriculum.
    (d) Priority.--The Secretary shall give priority to applications 
that--
            (1) use online learning or other innovative means to 
        deliver the program of study to students, educators, and 
        instructors outside of the partnership; and
            (2) focus on low performing students and special 
        populations as defined in section 3(29) of the Carl D. Perkins 
        Career and Technical Education Act of 2006 (20 U.S.C. 
        2302(29)).
    (e) Peer Review.--The Secretary shall convene a peer review process 
to review applications for grants under this section and to make 
recommendations regarding the selection of grantees. Members of the 
peer review committee shall include--
            (1) educators who have experience implementing curricula 
        with comparable purposes; and
            (2) business and industry experts in clean energy-related 
        fields.
    (f) Uses of Funds.--Grants awarded under this section shall be used 
for the development, implementation, and dissemination of programs of 
study (as described in section 122(c)(1)(A) of the Carl D. Perkins 
Career and Technical Education Act (20 U.S.C. 342(c)(1)(A))) in career 
areas related to clean energy, renewable energy, energy efficiency, and 
climate change mitigation.

SEC. 422. INCREASED FUNDING FOR ENERGY WORKER TRAINING PROGRAM.

    Section 171(e)(8) of the Workforce Investment Act of 1998 (29 
U.S.C. 2916(e)(8)) is amended by striking ``$125,000,000'' and 
inserting ``$150,000,000''.

          PART 2--CLIMATE CHANGE WORKER ADJUSTMENT ASSISTANCE

SEC. 425. PETITIONS, ELIGIBILITY REQUIREMENTS, AND DETERMINATIONS.

    (a) Petitions.--
            (1) Filing.--A petition for certification of eligibility to 
        apply for adjustment assistance for a group of workers under 
        this part may be filed by any of the following:
                    (A) The group of workers.
                    (B) The certified or recognized union or other duly 
                authorized representative of such workers.
                    (C) Employers of such workers, one-stop operators 
                or one-stop partners (as defined in section 101 of the 
                Workforce Investment Act of 1998 (29 U.S.C. 2801)), 
                including State employment security agencies, or the 
                State dislocated worker unit established under title I 
                of such Act, on behalf of such workers.
        The petition shall be filed simultaneously with the Secretary 
        of Labor and with the Governor of the State in which such 
        workers' employment site is located.
            (2) Action by governors.--Upon receipt of a petition filed 
        under paragraph (1), the Governor shall--
                    (A) ensure that rapid response activities and 
                appropriate core and intensive services (as described 
                in section 134 of the Workforce Investment Act of 1998 
                (29 U.S.C. 2864)) authorized under other Federal laws 
                are made available to the workers covered by the 
                petition to the extent authorized under such laws; and
                    (B) assist the Secretary in the review of the 
                petition by verifying such information and providing 
                such other assistance as the Secretary may request.
            (3) Action by the secretary.--Upon receipt of the petition, 
        the Secretary shall promptly publish notice in the Federal 
        Register and on the website of the Department of Labor that the 
        Secretary has received the petition and initiated an 
        investigation.
            (4) Hearings.--If the petitioner, or any other person found 
        by the Secretary to have a substantial interest in the 
        proceedings, submits not later than 10 days after the date of 
        the Secretary's publication under paragraph (3) a request for a 
        hearing, the Secretary shall provide for a public hearing and 
        afford such interested persons an opportunity to be present, to 
        produce evidence, and to be heard.
    (b) Eligibility.--
            (1) In general.--A group of workers shall be certified by 
        the Secretary as eligible to apply for adjustment assistance 
        under this part pursuant to a petition filed under subsection 
        (a) if--
                    (A) the group of workers is employed in--
                            (i) energy producing and transforming 
                        industries;
                            (ii) industries dependent upon energy 
                        industries;
                            (iii) energy-intensive manufacturing 
                        industries;
                            (iv) consumer goods manufacturing; or
                            (v) other industries whose employment the 
                        Secretary determines has been adversely 
                        affected by any requirement of title VII of the 
                        Clean Air Act;
                    (B) the Secretary determines that a significant 
                number or proportion of the workers in such workers' 
                employment site have become totally or partially 
                separated, or are threatened to become totally or 
                partially separated from employment; and
                    (C) the sales, production, or delivery of goods or 
                services have decreased as a result of any requirement 
                of title VII of the Clean Air Act, including--
                            (i) the shift from reliance upon fossil 
                        fuels to other sources of energy, including 
                        renewable energy, that results in the closing 
                        of a facility or layoff of employees at a 
                        facility that mines, produces, processes, or 
                        utilizes fossil fuels to generate electricity;
                            (ii) a substantial increase in the cost of 
                        energy required for a manufacturing facility to 
                        produce items whose prices are competitive in 
                        the marketplace, to the extent the cost is not 
                        offset by allowance allocation to the facility 
                        pursuant to title VII of the Clean Air Act; or
                            (iii) other documented occurrences that the 
                        Secretary determines are indicators of an 
                        adverse impact on an industry described in 
                        subparagraph (A) as a result of any requirement 
                        of title VII of the Clean Air Act.
            (2) Workers in public agencies.--A group of workers in a 
        public agency shall be certified by the Secretary as eligible 
        to apply for climate change adjustment assistance pursuant to a 
        petition filed if the Secretary determines that a significant 
        number or proportion of the workers in the public agency have 
        become totally or partially separated from employment, or are 
        threatened to become totally or partially separated as a result 
        of any requirement of title VII of the Clean Air Act.
            (3) Adversely affected service workers.--A group of workers 
        shall be certified as eligible to apply for climate change 
        adjustment assistance pursuant to a petition filed if the 
        Secretary determines that--
                    (A) a significant number or proportion of the 
                service workers at an employment site where a group of 
                workers has been certified by the Secretary as eligible 
                to apply for adjustment assistance under this part 
                pursuant to paragraph (1) have become totally or 
                partially separated from employment, or are threatened 
                to become totally or partially separated; and
                    (B) a loss of business in the firm providing 
                service workers to an employment site is directly 
                attributable to one or more of the documented 
                occurrences listed in paragraph (1)(C).
    (c) Authority to Investigate and Collect Information.--
            (1) In general.--The Secretary shall, in determining 
        whether to certify a group of workers under subsection (d), 
        obtain information the Secretary determines to be necessary to 
        make the certification, through questionnaires and in such 
        other manner as the Secretary determines appropriate from--
                    (A) the workers' employer;
                    (B) officials of certified or recognized unions or 
                other duly authorized representatives of the group of 
                workers; or
                    (C) one-stop operators or one-stop partners (as 
                defined in section 101 of the Workforce Investment Act 
                of 1998 (29 U.S.C. 2801)); or
            (2) Verification of information.--The Secretary shall 
        require an employer, union, or one-stop operator or partner to 
        certify all information obtained under paragraph (1) from the 
        employer, union, or one-stop operator or partner (as the case 
        may be) on which the Secretary relies in making a determination 
        under subsection (d), unless the Secretary has a reasonable 
        basis for determining that such information is accurate and 
        complete without being certified.
            (3) Protection of confidential information.--The Secretary 
        may not release information obtained under paragraph (1) that 
        the Secretary considers to be confidential business information 
        unless the employer submitting the confidential business 
        information had notice, at the time of submission, that the 
        information would be released by the Secretary, or the employer 
        subsequently consents to the release of the information. 
        Nothing in this paragraph shall be construed to prohibit the 
        Secretary from providing such confidential business information 
        to a court in camera or to another party under a protective 
        order issued by a court.
    (d) Determination by the Secretary of Labor.--
            (1) In general.--As soon as possible after the date on 
        which a petition is filed under subsection (a), but in any 
        event not later than 40 days after that date, the Secretary, in 
        consultation with the Secretary of Energy and the Administrator 
        of the Environmental Protection Agency, as necessary, shall 
        determine whether the petitioning group meets the requirements 
        of subsection (b) and shall issue a certification of 
        eligibility to apply for assistance under this part covering 
        workers in any group which meets such requirements. Each 
        certification shall specify the date on which the total or 
        partial separation began or threatened to begin. Upon reaching 
        a determination on a petition, the Secretary shall promptly 
        publish a summary of the determination in the Federal Register 
        and on the website of the Department of Labor, together with 
        the Secretary's reasons for making such determination.
            (2) One year limitation.--A certification under this 
        section shall not apply to any worker whose last total or 
        partial separation from the employment site before the worker's 
        application under section 426(a) occurred more than 1 year 
        before the date of the petition on which such certification was 
        granted.
            (3) Revocation of certification.--Whenever the Secretary 
        determines, with respect to any certification of eligibility of 
        the workers of an employment site, that total or partial 
        separations from such site are no longer a result of the 
        factors specified in subsection (b)(1), the Secretary shall 
        terminate such certification and promptly have notice of such 
        termination published in the Federal Register and on the 
        website of the Department of Labor, together with the 
        Secretary's reasons for making such determination. Such 
        termination shall apply only with respect to total or partial 
        separations occurring after the termination date specified by 
        the Secretary.
    (e) Industry Notification of Assistance.--Upon receiving a 
notification of a determination under subsection (d) with respect to a 
domestic industry the Secretary of Labor shall notify the 
representatives of the domestic industry affected by the determination, 
employers publicly identified by name during the course of the 
proceeding relating to the determination, and any certified or 
recognized union or, to the extent practicable, other duly authorized 
representative of workers employed by such representatives of the 
domestic industry, of--
            (1) the adjustment allowances, training, and other benefits 
        available under this part;
            (2) the manner in which to file a petition and apply for 
        such benefits; and
            (3) the availability of assistance in filing such 
        petitions;
            (4) notify the Governor of each State in which one or more 
        employers in such industry are located of the Secretary's 
        determination and the identity of the employers; and
            (5) upon request, provide any assistance that is necessary 
        to file a petition under subsection (a).
    (f) Benefit Information to Workers, Providers of Training.--
            (1) In general.--The Secretary shall provide full 
        information to workers about the adjustment allowances, 
        training, and other benefits available under this part and 
        about the petition and application procedures, and the 
        appropriate filing dates, for such allowances, training and 
        services. The Secretary shall provide whatever assistance is 
        necessary to enable groups of workers to prepare petitions or 
        applications for program benefits. The Secretary shall make 
        every effort to insure that cooperating State agencies fully 
        comply with the agreements entered into under section 426(a) 
        and shall periodically review such compliance. The Secretary 
        shall inform the State Board for Vocational Education or 
        equivalent agency, the one-stop operators or one-stop partners 
        (as defined in section 101 of the Workforce Investment Act of 
        1998 (29 U.S.C. 2801), and other public or private agencies, 
        institutions, and employers, as appropriate, of each 
        certification issued under subsection (d) and of projections, 
        if available, of the needs for training under as a result of 
        such certification.
            (2) Notice by mail.--The Secretary shall provide written 
        notice through the mail of the benefits available under this 
        part to each worker whom the Secretary has reason to believe is 
        covered by a certification made under subsection (d)--
                    (A) at the time such certification is made, if the 
                worker was partially or totally separated from the 
                adversely affected employment before such 
                certification, or--
                    (B) at the time of the total or partial separation 
                of the worker from the adversely affected employment, 
                if subparagraph (A) does not apply.
            (3) Newspapers; website.--The Secretary shall publish 
        notice of the benefits available under this part to workers 
        covered by each certification made under subsection (d) in 
        newspapers of general circulation in the areas in which such 
        workers reside and shall make such information available on the 
        website of the Department of Labor.

SEC. 426. PROGRAM BENEFITS.

    (a) Climate Change Adjustment Allowance.--
            (1) Eligibility.--Payment of a climate change adjustment 
        allowance shall be made to an adversely affected worker covered 
        by a certification under section 425(b) who files an 
        application for such allowance for any week of unemployment 
        which begins on or after the date of such certification, if the 
        following conditions are met:
                    (A) Such worker's total or partial separation 
                before the worker's application under this part 
                occurred--
                            (i) on or after the date, as specified in 
                        the certification under which the worker is 
                        covered, on which total or partial separation 
                        began or threatened to begin in the adversely 
                        affected employment;
                            (ii) before the expiration of the 2-year 
                        period beginning on the date on which the 
                        determination under section 425(d) was made; 
                        and
                            (iii) before the termination date, if any, 
                        determined pursuant to section 425(d)(3).
                    (B) Such worker had, in the 52-week period ending 
                with the week in which such total or partial separation 
                occurred, at least 26 weeks of full-time employment or 
                1,040 hours of part time employment in adversely 
                affected employment, or, if data with respect to weeks 
                of employment are not available, equivalent amounts of 
                employment computed under regulations prescribed by the 
                Secretary. For the purposes of this paragraph, any week 
                in which such worker--
                            (i) is on employer-authorized leave for 
                        purposes of vacation, sickness, injury, 
                        maternity, or inactive duty or active duty 
                        military service for training;
                            (ii) does not work because of a disability 
                        that is compensable under a workmen's 
                        compensation law or plan of a State or the 
                        United States;
                            (iii) had his employment interrupted in 
                        order to serve as a full-time representative of 
                        a labor organization in such firm; or
                            (iv) is on call-up for purposes of active 
                        duty in a reserve status in the Armed Forces of 
                        the United States, provided such active duty is 
                        ``Federal service'' as defined in section 
                        8521(a)(1) of title 5, United States Code,
                shall be treated as a week of employment.
                    (C) Such worker is enrolled in a training program 
                approved by the Secretary under subsection (b)(2).
            (2) Ineligibility for certain other benefits.--An adversely 
        affected worker receiving a payment under this section shall be 
        ineligible to receive any other form of unemployment insurance 
        for the period in which such worker is receiving a climate 
        change adjustment allowance under this section.
            (3) Revocation.--If--
                    (A) the Secretary determines that--
                            (i) the adversely affected worker--
                                    (I) has failed to begin 
                                participation in the training program 
                                the enrollment in which meets the 
                                requirement of paragraph (1)(C); or
                                    (II) has ceased to participate in 
                                such training program before completing 
                                such training program; and
                            (ii) there is no justifiable cause for such 
                        failure or cessation; or
                    (B) the certification made with respect to such 
                worker under section 425(d) is revoked under paragraph 
                (3) of such section,
        no adjustment allowance may be paid to the adversely affected 
        worker under this part for the week in which such failure, 
        cessation, or revocation occurred, or any succeeding week, 
        until the adversely affected worker begins or resumes 
        participation in a training program approved by the Secretary 
        under section (b)(2).
            (4) Waivers of training requirements.--The Secretary may 
        issue a written statement to an adversely affected worker 
        waiving the requirement to be enrolled in training described in 
        subsection (b)(2) if the Secretary determines that it is not 
        feasible or appropriate for the worker, because of 1 or more of 
        the following reasons:
                    (A) Recall.--The worker has been notified that the 
                worker will be recalled by the employer from which the 
                separation occurred.
                    (B) Marketable skills.--
                            (i) In general.--The worker possesses 
                        marketable skills for suitable employment (as 
                        determined pursuant to an assessment of the 
                        worker, which may include the profiling system 
                        under section 303(j) of the Social Security Act 
                        (42 U.S.C. 503(j)), carried out in accordance 
                        with guidelines issued by the Secretary) and 
                        there is a reasonable expectation of employment 
                        at equivalent wages in the foreseeable future.
                            (ii) Marketable skills defined.--For 
                        purposes of clause (i), the term ``marketable 
                        skills'' may include the possession of a 
                        postgraduate degree from an institution of 
                        higher education (as defined in section 102 of 
                        the Higher Education Act of 1965 (20 U.S.C. 
                        1002)) or an equivalent institution, or the 
                        possession of an equivalent postgraduate 
                        certification in a specialized field.
                    (C) Retirement.--The worker is within 2 years of 
                meeting all requirements for entitlement to either--
                            (i) old-age insurance benefits under title 
                        II of the Social Security Act (42 U.S.C. 401 et 
                        seq.) (except for application therefor); or
                            (ii) a private pension sponsored by an 
                        employer or labor organization.
                    (D) Health.--The worker is unable to participate in 
                training due to the health of the worker, except that a 
                waiver under this subparagraph shall not be construed 
                to exempt a worker from requirements relating to the 
                availability for work, active search for work, or 
                refusal to accept work under Federal or State 
                unemployment compensation laws.
                    (E) Enrollment unavailable.--The first available 
                enrollment date for the training of the worker is 
                within 60 days after the date of the determination made 
                under this paragraph, or, if later, there are 
                extenuating circumstances for the delay in enrollment, 
                as determined pursuant to guidelines issued by the 
                Secretary.
                    (F) Training not available.--Training described in 
                subsection (b)(2) is not reasonably available to the 
                worker from either governmental agencies or private 
                sources (which may include area career and technical 
                education schools, as defined in section 3 of the Carl 
                D. Perkins Career and Technical Education Act of 2006 
                (20 U.S.C. 2302), and employers), no training that is 
                suitable for the worker is available at a reasonable 
                cost, or no training funds are available.
            (5) Weekly amounts.--The climate change adjustment 
        allowance payable to an adversely affected worker for a week of 
        unemployment shall be an amount equal to 70 percent of the 
        average weekly wage of such worker, but in no case shall such 
        amount exceed the average weekly wage for all workers in the 
        State where the adversely affected worker resides.
            (6) Maximum duration of benefits.--An eligible worker may 
        receive a climate change adjustment allowance under this 
        subsection for a period of not longer than 156 weeks.
    (b) Employment Services and Training.--
            (1) Information and Employment Services.--The Secretary 
        shall make available, directly or through agreements with the 
        States under section 427(a) to adversely affected workers 
        covered by a certification under section 425(a) the following 
        information and employment services:
                    (A) Comprehensive and specialized assessment of 
                skill levels and service needs, including through--
                            (i) diagnostic testing and use of other 
                        assessment tools; and
                            (ii) in-depth interviewing and evaluation 
                        to identify employment barriers and appropriate 
                        employment goals.
                    (B) Development of an individual employment plan to 
                identify employment goals and objectives, and 
                appropriate training to achieve those goals and 
                objectives.
                    (C) Information on training available in local and 
                regional areas, information on individual counseling to 
                determine which training is suitable training, and 
                information on how to apply for such training.
                    (D) Information on training programs and other 
                services provided by a State pursuant to title I of the 
                Workforce Investment Act of 1998 and available in local 
                and regional areas, information on individual 
                counseling to determine which training is suitable 
                training, and information on how to apply for such 
                training.
                    (E) Information on how to apply for financial aid, 
                including referring workers to educational opportunity 
                centers described in section 402F of the Higher 
                Education Act of 1965 (20 U.S.C. 1070a-16), where 
                applicable, and notifying workers that the workers may 
                request financial aid administrators at institutions of 
                higher education (as defined in section 102 of such Act 
                (20 U.S.C. 1002)) to use the administrators' discretion 
                under section 479A of such Act (20 U.S.C. 1087tt) to 
                use current year income data, rather than preceding 
                year income data, for determining the amount of need of 
                the workers for Federal financial assistance under 
                title IV of such Act (20 U.S.C. 1070 et seq.).
                    (F) Short-term prevocational services, including 
                development of learning skills, communications skills, 
                interviewing skills, punctuality, personal maintenance 
                skills, and professional conduct to prepare individuals 
                for employment or training.
                    (G) Individual career counseling, including job 
                search and placement counseling, during the period in 
                which the individual is receiving a climate change 
                adjustment allowance or training under this part, and 
                after receiving such training for purposes of job 
                placement.
                    (H) Provision of employment statistics information, 
                including the provision of accurate information 
                relating to local, regional, and national labor market 
                areas, including--
                            (i) job vacancy listings in such labor 
                        market areas;
                            (ii) information on jobs skills necessary 
                        to obtain jobs identified in job vacancy 
                        listings described in subparagraph (A);
                            (iii) information relating to local 
                        occupations that are in demand and earnings 
                        potential of such occupations; and
                            (iv) skills requirements for local 
                        occupations described in subparagraph (C).
                    (I) Information relating to the availability of 
                supportive services, including services relating to 
                child care, transportation, dependent care, housing 
                assistance, and need-related payments that are 
                necessary to enable an individual to participate in 
                training.
            (2) Training.--
                    (A) Approval of and payment for training.--If the 
                Secretary determines, with respect to an adversely 
                affected worker that--
                            (i) there is no suitable employment (which 
                        may include technical and professional 
                        employment) available for an adversely affected 
                        worker;
                            (ii) the worker would benefit from 
                        appropriate training;
                            (iii) there is a reasonable expectation of 
                        employment following completion of such 
                        training;
                            (iv) training approved by the Secretary is 
                        reasonably available to the worker from either 
                        governmental agencies or private sources 
                        (including area career and technical education 
                        schools, as defined in section 3 of the Carl D. 
                        Perkins Career and Technical Education Act of 
                        2006, and employers);
                            (v) the worker is qualified to undertake 
                        and complete such training; and
                            (vi) such training is suitable for the 
                        worker and available at a reasonable cost,
                the Secretary shall approve such training for the 
                worker. Upon such approval, the worker shall be 
                entitled to have payment of the costs of such training 
                (subject to the limitations imposed by this section) 
                paid on the worker's behalf by the Secretary directly 
                or through a voucher system.
                    (B) Distribution.--The Secretary shall establish 
                procedures for the distribution of the funds to States 
                to carry out the training programs approved under this 
                paragraph, and shall make an initial distribution of 
                the funds made available as soon as practicable after 
                the beginning of each fiscal year.
                    (C) Additional rules regarding approval of and 
                payment for training.--
                            (i) For purposes of applying subparagraph 
                        (A)(iii), a reasonable expectation of 
                        employment does not require that employment 
                        opportunities for a worker be available, or 
                        offered, immediately upon the completion of 
                        training approved under such subparagraph.
                            (ii) If the costs of training an adversely 
                        affected worker are paid by the Secretary under 
                        subparagraph (A), no other payment for such 
                        costs may be made under any other provision of 
                        Federal law. No payment may be made under 
                        subparagraph (A) of the costs of training an 
                        adversely affected worker or an adversely 
                        affected incumbent worker if such costs--
                                    (I) have already been paid under 
                                any other provision of Federal law; or
                                    (II) are reimbursable under any 
                                other provision of Federal law and a 
                                portion of such costs have already been 
                                paid under such other provision of 
                                Federal law.
                        The provisions of this clause shall not apply 
                        to, or take into account, any funds provided 
                        under any other provision of Federal law which 
                        are used for any purpose other than the direct 
                        payment of the costs incurred in training a 
                        particular adversely affected worker, even if 
                        such use has the effect of indirectly paying or 
                        reducing any portion of the costs involved in 
                        training the adversely affected worker.
                    (D) Training programs.--The training programs that 
                may be approved under subparagraph (A) include--
                            (i) employer-based training, including--
                                    (I) on-the-job training if approved 
                                by the Secretary under subsection (c); 
                                and
                                    (II) joint labor-management 
                                apprenticeship programs;
                            (ii) any training program provided by a 
                        State pursuant to title I of the Workforce 
                        Investment Act of 1998;
                            (iii) any training program approved by a 
                        private industry council established under 
                        section 102 of such Act;
                            (iv) any programs in career and technical 
                        education described in section 3(5) of the Carl 
                        D. Perkins Career and Technical Education Act 
                        of 2006;
                            (v) any program of remedial education;
                            (vi) any program of prerequisite education 
                        or coursework required to enroll in training 
                        that may be approved under this paragraph;
                            (vii) any training program for which all, 
                        or any portion, of the costs of training the 
                        worker are paid--
                                    (I) under any Federal or State 
                                program other than this part; or
                                    (II) from any source other than 
                                this part;
                            (ix) any training program or coursework at 
                        an accredited institution of higher education 
                        (described in section 102 of the Higher 
                        Education Act of 1965 (20 U.S.C. 1002)), 
                        including a training program or coursework for 
                        the purpose of--
                                    (I) obtaining a degree or 
                                certification; or
                                    (II) completing a degree or 
                                certification that the worker had 
                                previously begun at an accredited 
                                institution of higher education; and
                            (viii) any other training program approved 
                        by the Secretary.
    (3) Supplemental Assistance.--The Secretary may, as appropriate, 
authorize supplemental assistance that is necessary to defray 
reasonable transportation and subsistence expenses for separate 
maintenance in a case in which training for a worker is provided in a 
facility that is not within commuting distance of the regular place of 
residence of the worker.
    (c) On-the-Job Training Requirements.--
            (1) In general.--The Secretary may approve on-the-job 
        training for any adversely affected worker if--
                    (A) the Secretary determines that on-the-job 
                training--
                            (i) can reasonably be expected to lead to 
                        suitable employment with the employer offering 
                        the on-the-job training;
                            (ii) is compatible with the skills of the 
                        worker;
                            (iii) includes a curriculum through which 
                        the worker will gain the knowledge or skills to 
                        become proficient in the job for which the 
                        worker is being trained; and
                            (iv) can be measured by benchmarks that 
                        indicate that the worker is gaining such 
                        knowledge or skills; and
                    (B) the State determines that the on-the-job 
                training program meets the requirements of clauses 
                (iii) and (iv) of subparagraph (A).
            (2) Monthly payments.--The Secretary shall pay the costs of 
        on-the-job training approved under paragraph (1) in monthly 
        installments.
            (3) Contracts for on-the-job training.--
                    (A) In general.--The Secretary shall ensure, in 
                entering into a contract with an employer to provide 
                on-the-job training to a worker under this subsection, 
                that the skill requirements of the job for which the 
                worker is being trained, the academic and occupational 
                skill level of the worker, and the work experience of 
                the worker are taken into consideration.
                    (B) Term of contract.--Training under any such 
                contract shall be limited to the period of time 
                required for the worker receiving on-the-job training 
                to become proficient in the job for which the worker is 
                being trained, but may not exceed 156 weeks in any 
                case.
            (4) Exclusion of certain employers.--The Secretary shall 
        not enter into a contract for on-the-job training with an 
        employer that exhibits a pattern of failing to provide workers 
        receiving on-the-job training from the employer with--
                    (A) continued, long-term employment as regular 
                employees; and
                    (B) wages, benefits, and working conditions that 
                are equivalent to the wages, benefits, and working 
                conditions provided to regular employees who have 
                worked a similar period of time and are doing the same 
                type of work as workers receiving on-the-job training 
                from the employer.
    (d) Administrative and Employment Services Funding.--
            (1) Administrative funding.--In addition to any funds made 
        available to a State to carry out this section __ for a fiscal 
        year, the State shall receive for the fiscal year a payment in 
        an amount that is equal to 15 percent of the amount of such 
        funds and shall--
                    (A) use not more than \2/3\ of such payment for the 
                administration of the climate change adjustment 
                assistance for workers program under this part, 
                including for--
                            (i) processing waivers of training 
                        requirements under subsection (a)(4); and
                            (ii) collecting, validating, and reporting 
                        data required under this part; and
                    (B) use not less than \1/3\ of such payment for 
                information and employment services under subsection 
                (b)(1).
            (2) Employment services funding.--
                    (A) In general.--In addition to any funds made 
                available to a State to carry out subsection (b)(2) and 
                the payment under paragraph (1) for a fiscal year, the 
                Secretary shall provide to the State for the fiscal 
                year a reasonable payment for the purpose of providing 
                employment and services under subsection (b)(1).
                    (B) Voluntary return of funds.--A State that 
                receives a payment under subparagraph (A) may decline 
                or otherwise return such payment to the Secretary.
    (e) Job Search Allowances.--The Secretary of Labor may provide 
adversely affected workers a one-time job search allowance in 
accordance with regulations prescribed by the Secretary. Any job search 
allowance provided shall be available only under the following 
circumstances and conditions:
            (1) The worker is no longer eligible for the climate change 
        adjustment allowance under subsection (a) and has completed the 
        training program required by subsection (a)(1)(E).
            (2) The Secretary determines that the worker cannot 
        reasonably be expected to secure suitable employment in the 
        commuting area in which the worker resides.
            (3) An allowance granted shall provide reimbursement to the 
        worker of all necessary job search expenses as prescribed by 
        the Secretary in regulations. Such reimbursement under this 
        subsection may not exceed $1,500 for any worker.
    (f) Relocation Allowance Authorized.--
            (1) In general.--Any adversely affected worker covered by a 
        certification issued under section 425 may file an application 
        for a relocation allowance with the Secretary, and the 
        Secretary may grant the relocation allowance, subject to the 
        terms and conditions of this subsection.
            (2) Conditions for granting allowance.--A relocation 
        allowance may be granted if all of the following terms and 
        conditions are met:
                    (A) Assist an adversely affected worker.--The 
                relocation allowance will assist an adversely affected 
                worker in relocating within the United States.
                    (B) Local employment not available.--The Secretary 
                determines that the worker cannot reasonably be 
                expected to secure suitable employment in the commuting 
                area in which the worker resides.
                    (C) Total separation.--The worker is totally 
                separated from employment at the time relocation 
                commences.
                    (D) Suitable employment obtained.--The worker--
                            (i) has obtained suitable employment 
                        affording a reasonable expectation of long-term 
                        duration in the area in which the worker wishes 
                        to relocate; or
                            (ii) has obtained a bona fide offer of such 
                        employment.
                    (E) Application.--The worker filed an application 
                with the Secretary at such time and in such manner as 
                the Secretary shall specify by regulation.
            (3) Amount of allowance.--The relocation allowance granted 
        to a worker under paragraph (1) includes--
                    (A) all reasonable and necessary expenses 
                (including, subsistence and transportation expenses at 
                levels not exceeding amounts prescribed by the 
                Secretary in regulations) incurred in transporting the 
                worker, the worker's family, and household effects; and
                    (B) a lump sum equivalent to 3 times the worker's 
                average weekly wage, up to a maximum payment of $1,500.
            (4) Limitations.--A relocation allowance may not be granted 
        to a worker unless--
                    (A) the relocation occurs within 182 days after the 
                filing of the application for relocation assistance; or
                    (B) the relocation occurs within 182 days after the 
                conclusion of training, if the worker entered a 
                training program approved by the Secretary under 
                subsection (b)(2).
    (g) Health Insurance Continuation.--Not later than 1 year after the 
date of enactment of this part, the Secretary of Labor shall prescribe 
regulations to provide, for the period in which an adversely affected 
worker is participating in a training program described in subsection 
(b)(2), 80 percent of the monthly premium of any health insurance 
coverage that an adversely affected worker was receiving from such 
worker's employer prior to the separation from employment described in 
section 425(b), to be paid to any health care insurance plan designated 
by the adversely affected worker receiving an allowance under this 
section.

SEC. 427. GENERAL PROVISIONS.

    (a) Agreements With States.--
            (1) In general.--The Secretary is authorized on behalf of 
        the United States to enter into an agreement with any State, or 
        with any State agency (referred to in this section as 
        ``cooperating States'' and ``cooperating States agencies'' 
        respectively). Under such an agreement, the cooperating State 
        agency--
                    (A) as agent of the United States, shall receive 
                applications for, and shall provide, payments on the 
                basis provided in this part;
                    (B) in accordance with paragraph (6), shall make 
                available to adversely affected workers covered by a 
                certification under section 425(d) the employment 
                services described in section 426(b)(1);
                    (C) shall make any certifications required under 
                section 425(d); and
                    (D) shall otherwise cooperate with the Secretary 
                and with other State and Federal agencies in providing 
                payments and services under this part.
        Each agreement under this section shall provide the terms and 
        conditions upon which the agreement may be amended, suspended, 
        or terminated.
            (2) Form and manner of data.--Each agreement under this 
        section shall--
                    (A) provide the Secretary with the authority to 
                collect any data the Secretary determines necessary to 
                meet the requirements of this part; and
                    (B) specify the form and manner in which any such 
                data requested by the Secretary shall be reported.
            (3) Relationship to unemployment insurance.--Each agreement 
        under this section shall provide that an adversely affected 
        worker receiving a climate change adjustment allowance under 
        this part shall not be eligible for unemployment insurance 
        otherwise payable to such worker under the laws of the State.
            (4) Review.--A determination by a cooperating State agency 
        with respect to entitlement to program benefits under an 
        agreement is subject to review in the same manner and to the 
        same extent as determinations under the applicable State law 
        and only in that manner and to that extent.
            (5) Coordination.--Any agreement entered into under this 
        section shall provide for the coordination of the 
        administration of the provisions for employment services, 
        training, and supplemental assistance under section 426 and 
        under title I of the Workforce Investment Act of 1998 upon such 
        terms and conditions as are established by the Secretary in 
        consultation with the States and set forth in such agreement. 
        Any agency of the State jointly administering such provisions 
        under such agreement shall be considered to be a cooperating 
        State agency for purposes of this part.
            (6) Responsibilities of cooperating agencies.--Each 
        cooperating State agency shall, in carrying out paragraph 
        (1)(B)--
                    (A) advise each worker who applies for unemployment 
                insurance of the benefits under this part and the 
                procedures and deadlines for applying for such 
                benefits;
                    (B) facilitate the early filing of petitions under 
                section 425(a) for any workers that the agency 
                considers are likely to be eligible for benefits under 
                this part;
                    (C) advise each adversely affected worker to apply 
                for training under section 426(b) before, or at the 
                same time, the worker applies for climate change 
                adjustment allowances under section 426(a);
                    (D) perform outreach to, intake of, and orientation 
                for adversely affected workers and adversely affected 
                incumbent workers covered by a certification under 
                section 426(a) with respect to assistance and benefits 
                available under this part;
                    (E) make employment services described in section 
                426(b)(1) available to adversely affected workers and 
                adversely affected incumbent workers covered by a 
                certification under section 425(d) and, if funds 
                provided to carry out this part are insufficient to 
                make such services available, make arrangements to make 
                such services available through other Federal programs; 
                and
                    (F) provide the benefits and reemployment services 
                under this part in a manner that is necessary for the 
                proper and efficient administration of this part, 
                including the use of state agency personnel employed in 
                accordance with a merit system of personnel 
                administration standards, including--
                            (i) making determinations of eligibility 
                        for, and payment of, climate change 
                        readjustment allowances and health care benefit 
                        replacement amounts;
                            (ii) developing recommendations regarding 
                        payments as a bridge to retirement and lump sum 
                        payments to pension plans in accordance with 
                        this subsection; and
                            (iii) the provision of reemployment 
                        services to eligible workers, including 
                        referral to training services.
            (7) In order to promote the coordination of workforce 
        investment activities in each State with activities carried out 
        under this part, any agreement entered into under this section 
        shall provide that the State shall submit to the Secretary, in 
        such form as the Secretary may require, the description and 
        information described in paragraphs (8) and (14) of section 
        112(b) of the Workforce Investment Act of 1998 (29 U.S.C. 
        2822(b)) and a description of the State's rapid response 
        activities under section 221(a)(2)(A).
            (8) Control measures.--
                    (A) In general.--The Secretary shall require each 
                cooperating State and cooperating State agency to 
                implement effective control measures and to effectively 
                oversee the operation and administration of the climate 
                change adjustment assistance program under this part, 
                including by means of monitoring the operation of 
                control measures to improve the accuracy and timeliness 
                of the data being collected and reported.
                    (B) Definition.--For purposes of subparagraph (A), 
                the term ``control measures'' means measures that--
                            (i) are internal to a system used by a 
                        State to collect data; and
                            (ii) are designed to ensure the accuracy 
                        and verifiability of such data.
            (9) Data reporting.--
                    (A) In general.--Any agreement entered into under 
                this section shall require the cooperating State or 
                cooperating State agency to report to the Secretary on 
                a quarterly basis comprehensive performance 
                accountability data, to consist of--
                            (i) the core indicators of performance 
                        described in subparagraph (B)(i);
                            (ii) the additional indicators of 
                        performance described in subparagraph (B)(ii), 
                        if any; and
                            (iii) a description of efforts made to 
                        improve outcomes for workers under the climate 
                        change adjustment assistance program.
                    (B) Core indicators described.--
                            (i) In general.--The core indicators of 
                        performance described in this subparagraph 
                        are--
                                    (I) the percentage of workers 
                                receiving benefits under this part who 
                                are employed during the second calendar 
                                quarter following the calendar quarter 
                                in which the workers cease receiving 
                                such benefits;
                                    (II) the percentage of such workers 
                                who are employed in each of the third 
                                and fourth calendar quarters following 
                                the calendar quarter in which the 
                                workers cease receiving such benefits; 
                                and
                                    (III) the earnings of such workers 
                                in each of the third and fourth 
                                calendar quarters following the 
                                calendar quarter in which the workers 
                                cease receiving such benefits.
                            (ii) Additional indicators.--The Secretary 
                        and a cooperating State or cooperating State 
                        agency may agree upon additional indicators of 
                        performance for the climate change adjustment 
                        assistance program under this part, as 
                        appropriate.
                    (C) Standards with respect to reliability of 
                data.--In preparing the quarterly report required by 
                subparagraph (A), each cooperating State or cooperating 
                State agency shall establish procedures that are 
                consistent with guidelines to be issued by the 
                Secretary to ensure that the data reported are valid 
                and reliable.
            (10) Verification of eligibility for program benefits.--
                    (A) In general.--An agreement under this section 
                shall provide that the State shall periodically 
                redetermine that a worker receiving benefits under this 
                part who is not a citizen or national of the United 
                States remains in a satisfactory immigration status. 
                Once satisfactory immigration status has been initially 
                verified through the immigration status verification 
                system described in section 1137(d) of the Social 
                Security Act (42 U.S.C. 1320b-7(d)) for purposes of 
                establishing a worker's eligibility for unemployment 
                compensation, the State shall reverify the worker's 
                immigration status if the documentation provided during 
                initial verification will expire during the period in 
                which that worker is potentially eligible to receive 
                benefits under this part. The State shall conduct such 
                redetermination in a timely manner, utilizing the 
                immigration status verification system described in 
                section 1137(d) of the Social Security Act (42 U.S.C. 
                1320b-7(d)).
                    (B) Procedures.--The Secretary shall establish 
                procedures to ensure the uniform application by the 
                States of the requirements of this paragraph.
    (b) Administration Absent State Agreement.--
            (1) In any State where there is no agreement in force 
        between a State or its agency under subsection (a), the 
        Secretary shall promulgate regulations for the performance of 
        all necessary functions under section 426, including provision 
        for a fair hearing for any worker whose application for 
        payments is denied.
            (2) A final determination under paragraph (1) with respect 
        to entitlement to program benefits under section 426 is subject 
        to review by the courts in the same manner and to the same 
        extent as is provided by section 205(g) of the Social Security 
        Act (42 U.S.C. 405(g)).
    (c) Prohibition on Contracting With Private Entities.--Neither the 
Secretary nor a State may contract with any private for-profit or 
nonprofit entity for the administration of the climate change 
adjustment assistance program under this part.
    (d) Payment to the States.--
            (1) In general.--The Secretary shall from time to time 
        certify to the Secretary of the Treasury for payment to each 
        cooperating State the sums necessary to enable such State as 
        agent of the United States to make payments provided for by 
        this part.
            (2) Restriction.--All money paid a State under this 
        subsection shall be used solely for the purposes for which it 
        is paid; and money so paid which is not used for such purposes 
        shall be returned, at the time specified in the agreement under 
        this section, to the Secretary of the Treasury.
            (3) Bonds.--Any agreement under this section may require 
        any officer or employee of the State certifying payments or 
        disbursing funds under the agreement or otherwise participating 
        in the performance of the agreement, to give a surety bond to 
        the United States in such amount as the Secretary may deem 
        necessary, and may provide for the payment of the cost of such 
        bond from funds for carrying out the purposes of this part.
    (e) Labor Standards.--
            (1) Prohibition on displacement.--An individual in an 
        apprenticeship program or on-the-job training program under 
        this part shall not displace (including a partial displacement, 
        such as a reduction in the hours of non-overtime work, wages, 
        or employment benefits) any employed employee.
            (2) Prohibition on impairment of contracts.--An 
        apprenticeship program or on-the-job raining program under this 
        Act shall not impair an existing contract for services or 
        collective bargaining agreement, and no such activity that 
        would be inconsistent with the terms of a collective bargaining 
        agreement shall be undertaken without the written concurrence 
        of the labor organization and employer concerned.
            (3) Additional standards.--The Secretary, or a State acting 
        under an agreement described in subsection (a) may pay the 
        costs of on-the-job training, notwithstanding any other 
        provision of this section, only if--
                    (A) in the case of training which would be 
                inconsistent with the terms of a collective bargaining 
                agreement, the written concurrence of the labor 
                organization concerned has been obtained;
                    (B) the job for which such adversely affected 
                worker is being trained is not being created in a 
                promotional line that will infringe in any way upon the 
                promotional opportunities of currently employed 
                individuals;
                    (C) such training is not for the same occupation 
                from which the worker was separated and with respect to 
                which such worker's group was certified pursuant to 
                section 425(d);
                    (D) the employer is provided reimbursement of not 
                more than 50 percent of the wage rate of the 
                participant, for the cost of providing the training and 
                additional supervision related to the training; and
                    (E) the employer has not received payment under 
                with respect to any other on-the-job training provided 
                by such employer which failed to meet the requirements 
                of subparagraphs (A) through (D).
    (f) Definitions.--As used in this part the following definitions 
apply:
            (1) The term ``adversely affected employment'' means 
        employment at an employment site, if workers at such site are 
        eligible to apply for adjustment assistance under this part.
            (2) The term ``adversely affected worker'' means an 
        individual who has been totally or partially separated from 
        employment and is eligible to apply for adjustment assistance 
        under this part.
            (3) The term ``average weekly wage'' means \1/13\ of the 
        total wages paid to an individual in the quarter in which the 
        individual's total wages were highest among the first 4 of the 
        last 5 completed calendar quarters immediately before the 
        quarter in which occurs the week with respect to which the 
        computation is made. Such week shall be the week in which total 
        separation occurred, or, in cases where partial separation is 
        claimed, an appropriate week, as defined in regulations 
        prescribed by the Secretary.
            (4) The term ``average weekly hours'' means the average 
        hours worked by the individual (excluding overtime) in the 
        employment from which he has been or claims to have been 
        separated in the 52 weeks (excluding weeks during which the 
        individual was sick or on vacation) preceding the week 
        specified in the last sentence of paragraph (4).
            (5) The term ``benefit period'' means, with respect to an 
        individual--
                    (A) the benefit year and any ensuing period, as 
                determined under applicable State law, during which the 
                individual is eligible for regular compensation, 
                additional compensation, or extended compensation; or
                    (B) the equivalent to such a benefit year or 
                ensuing period provided for under the applicable 
                Federal unemployment insurance law.
            (6) The term ``consumer goods manufacturing'' means the 
        electrical equipment, appliance, and component manufacturing 
        industry and transportation equipment manufacturing.
            (7) The term ``employment site'' means a single facility or 
        site of employment.
            (8) The term ``energy-intensive manufacturing industries'' 
        means all industrial sectors, entities, or groups of entities 
        that meet the energy or greenhouse gas intensity criteria in 
        section 765(b)(2)(A)(i) of the Clean Air Act based on the most 
        recent data available.
            (9) The term ``energy producing and transforming 
        industries'' means the coal mining industry, oil and gas 
        extraction, electricity power generation, transmission and 
        distribution, and natural gas distribution.
            (10) The term ``industries dependent on energy industries'' 
        means rail transportation and pipeline transportation.
            (11) The term ``on-the-job training'' means training 
        provided by an employer to an individual who is employed by the 
        employer.
            (12) The terms ``partial separation'' and ``partially 
        separated'' refer, with respect to an individual who has not 
        been totally separated, that such individual has had--
                    (A) his or her hours of work reduced to 80 percent 
                or less of his average weekly hours in adversely 
                affected employment; and
                    (B) his or her wages reduced to 80 percent or less 
                of his average weekly wage in such adversely affected 
                employment.
            (13) The term ``public agency'' means a department or 
        agency of a State or political subdivision of a State or of the 
        Federal government.
            (14) The term ``Secretary'' means the Secretary of Labor.
            (15) The term ``service workers'' means workers supplying 
        support or auxiliary services to an employment site.
            (16) The term ``State'' includes the District of Columbia 
        and the Commonwealth of Puerto Rico: and the term ``United 
        States'' when used in the geographical sense includes such 
        Commonwealth.
            (17) The term ``State agency'' means the agency of the 
        State which administers the State law.
            (18) The term ``State law'' means the unemployment 
        insurance law of the State approved by the Secretary of Labor 
        under section 3304 of the Internal Revenue Code of 1954.
            (19) The terms ``total separation'' and ``totally 
        separated'' refer to the layoff or severance of an individual 
        from employment with an employer in which adversely affected 
        employment exists.
            (20) The term ``unemployment insurance'' means the 
        unemployment compensation payable to an individual under any 
        State law or Federal unemployment compensation law, including 
        chapter 85 of title 5, United States Code, and the Railroad 
        Unemployment Insurance Act. The terms ``regular compensation'', 
        ``additional compensation'', and ``extended compensation'' have 
        the same respective meanings that are given them in section 
        205(2), (3), and (4) of the Federal-State Extended Unemployment 
        Compensation Act of 1970 (26 U.S.C. 3304 note).
            (21) The term ``week'' means a week as defined in the 
        applicable State law.
            (22) The term ``week of unemployment'' means a week of 
        total, part-total, or partial unemployment as determined under 
        the applicable State law or Federal unemployment insurance law.
    (g) Special Rule With Respect to Military Service.--
            (1) In general.--Notwithstanding any other provision of 
        this part, the Secretary may waive any requirement of this part 
        that the Secretary determines is necessary to ensure that an 
        adversely affected worker who is a member of a reserve 
        component of the Armed Forces and serves a period of duty 
        described in paragraph (2) is eligible to receive a climate 
        change adjustment allowance, training, and other benefits under 
        this part in the same manner and to the same extent as if the 
        worker had not served the period of duty.
            (2) Period of duty described.--An adversely affected worker 
        serves a period of duty described in this paragraph if, before 
        completing training under this part, the worker--
                    (A) serves on active duty for a period of more than 
                30 days under a call or order to active duty of more 
                than 30 days; or
                    (B) in the case of a member of the Army National 
                Guard of the United States or Air National Guard of the 
                United States, performs full-time National Guard duty 
                under section 502(f) of title 32, United States Code, 
                for 30 consecutive days or more when authorized by the 
                President or the Secretary of Defense for the purpose 
                of responding to a national emergency declared by the 
                President and supported by Federal funds.
    (h) Fraud and Recovery of Overpayments.--
            (1) Recovery of payments to which an individual was not 
        entitled.--If the Secretary or a court of competent 
        jurisdiction determines that any person has received any 
        payment under this part to which the individual was not 
        entitled, such individual shall be liable to repay such amount 
        to the Secretary, as the case may be, except that the Secretary 
        shall waive such repayment if such agency or the Secretary 
        determines that--
                    (A) the payment was made without fault on the part 
                of such individual; and
                    (B) requiring such repayment would cause a 
                financial hardship for the individual (or the 
                individual's household, if applicable) when taking into 
                consideration the income and resources reasonably 
                available to the individual (or household) and other 
                ordinary living expenses of the individual (or 
                household).
            (2) Means of recovery.--Unless an overpayment is otherwise 
        recovered, or waived under paragraph (1), the Secretary shall 
        recover the overpayment by deductions from any sums payable to 
        such person under this part, under any Federal unemployment 
        compensation law or other Federal law administered by the 
        Secretary which provides for the payment of assistance or an 
        allowance with respect to unemployment. Any amount recovered 
        under this section shall be returned to the Treasury of the 
        United States.
            (3) Penalties for fraud.--Any person who--
                    (A) makes a false statement of a material fact 
                knowing it to be false, or knowingly fails to disclose 
                a material fact, for the purpose of obtaining or 
                increasing for that person or for any other person any 
                payment authorized to be furnished under this part, or
                    (B) makes a false statement of a material fact 
                knowing it to be false, or knowingly fails to disclose 
                a material fact, when providing information to the 
                Secretary during an investigation of a petition under 
                section 425(c),
shall be imprisoned for not more than one year, or fined under title 
18, United States Code, or both, and be ineligible for any further 
payments under this part.
    (i) Regulations.--The Secretary shall prescribe such regulations as 
may be necessary to carry out the provisions of this part.
    (j) Study on Older Workers.--The Secretary shall conduct a study 
examine the circumstances of older adversely affected workers and the 
ability of such workers to access their retirement benefits. The 
Secretary shall transmit a report to Congress not later than 2 years 
after the date of enactment of this part on the findings of the study 
and the Secretary's recommendations on how to ensure that adversely 
affected workers within 2 years of retirement are able to access their 
retirement benefits.
    [(k) Spending Limit.--For each fiscal year, the total amount of 
funds disbursed for the purposes described in section 426 shall not 
exceed the amount deposited in that fiscal year into the Climate Change 
Worker Assistance Fund established under section [782(j)] of the Clean 
Air Act. The annual spending limit for any succeeding year shall be 
increased by the difference, if any, between the amount of the prior 
year's disbursements and the spending limitation for that year. The 
Secretary shall promulgate rules to ensure that this spending limit is 
not exceeded. Such rules shall provide that workers who receive any of 
the benefits described in section 426 receive full benefits, and shall 
include the establishment of a waiting list for workers in the event 
that the requests for assistance exceed the spending limit.]

                    Subtitle C--Consumer Assistance

SEC. 431. ENERGY TAX CREDIT.

    Subpart C of part IV of subchapter A of chapter 1 of the Internal 
Revenue Code of 1986 is amended by inserting after section 36A the 
following new section:

``SEC. 36B. ENERGY TAX CREDIT.

    ``(a) Allowance of Credit.--In the case of an eligible individual, 
there shall be allowed as a credit against the tax imposed by this 
subtitle for the taxable year an amount equal to--
            ``(1) for an eligible individual with applicable income of 
        less than $6,000, the phase in rate times the applicable 
        income;
            ``(2) for an eligible individual with applicable income 
        that is greater than or equal to $6,000 and is less than or 
        equal to the phase down amount, the maximum energy tax credit;
            ``(3) for an individual with applicable income that exceeds 
        the phase down amount, an amount equal to--
                    ``(A) the maximum energy tax credit minus; or
                    ``(B) the difference between the individual's 
                applicable income and the phase down amount multiplied 
                by .2.
    ``(b) Coordination With Energy Refund Received Through State Human 
Service Agencies.--The amount described in subsection (a) shall be 
reduced by \1/12\ for each month in which the individual or his or her 
spouse received a refund under section 432 of the Safe Climate Act.
            ``(1) The Secretary of the Treasury shall promulgate 
        regulations that instruct States on how to inform adult 
        individuals who receive a refund under section 432 of the Safe 
        Climate Act of the number of months he or she received a refund 
        and how such information shall be provided to the Internal 
        Revenue Service.
            ``(2) The Secretary of the Treasury shall establish a 
        telephone and online system that allows an individual to 
        inquire about the number of months she or he received such a 
        refund.
            ``(3) In the case of an individual that does not report the 
        number of months a refund was provided under section 432 of the 
        Safe Climate Act or recorded an incorrect number of months, the 
        Secretary of the Treasury shall adjust the energy tax credit 
        based on the information received from States, provided that 
        the Secretary of the Treasury has made a determination that the 
        information meets a sufficient standard for accuracy.
    ``(c) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Eligible individual.--
                    ``(A) In general.--The term `eligible individual' 
                means any individual other than--
                            ``(i) any nonresident alien individual;
                            ``(ii) any individual with respect to whom 
                        a deduction under section 151 is allowable to 
                        another taxpayer for a taxable year beginning 
                        in the calendar year in which the individual's 
                        taxable year begins; and
                            ``(iii) an estate or trust.
                    ``(B) Identification number requirement.--Such term 
                shall not include any individual who--
                            ``(i) in the case of a return that is not a 
                        joint return, does not include the social 
                        security number of the individual; and
                            ``(ii) in the case of joint return, does 
                        not include the social security number of at 
                        least one of the taxpayers on such return.
                For purposes of the preceding sentence, the social 
                security number shall not include a TIN issued by the 
                Internal Revenue Service.
            ``(2) Applicable income.--Applicable income means the 
        larger of--
                    ``(A) earned income as defined in section 32(c)(2), 
                except that such term shall not include net earnings 
                from self-employment which are not taken into account 
                in computing taxable income; and
                    ``(B) adjusted gross income.
            ``(3) Phase in rate.--The Secretary of the Treasury shall 
        compute the phase in rates each year for the energy credit for 
        joint returns and for returns that are not filed jointly with 
        respect to each relevant number of qualifying individuals such 
        that the phase in rate equals the maximum energy tax credit 
        divided by $6,000.
            ``(4) Maximum energy tax credit.--
                    ``(A) In general.--
                            ``(i) The maximum energy tax credit shall 
                        vary based on the number of individuals in the 
                        tax filing unit.
                            ``(ii) The maximum energy tax credit for a 
                        filing unit of a particular size shall be equal 
                        to the average annual reduction in purchasing 
                        power for low-income households of that 
                        household size, as calculated by the 
                        Environmental Protection Agency, that results 
                        from the regulation of greenhouse gas emissions 
                        under title VII of the Clean Air Act.
                            ``(iii) The Environmental Protection 
                        Agency, in consultation with other appropriate 
                        federal agencies, shall calculate the maximum 
                        energy tax credit by August 31 of each year for 
                        the following calendar year using the most 
                        recent, reliable data available.
                    ``(B) Energy tax credit calculation.--
                            ``(i) Distribution.--For each calendar 
                        year, the Environmental Protection Agency shall 
                        determine pursuant to subparagraph (B)(iii) the 
                        aggregate reduction in purchasing power among 
                        all United States households that results from 
                        the regulation of greenhouse gas emissions 
                        under title VII of the Clean Air Act and 
                        distribute that aggregate reduction in 
                        purchasing power among all United States 
                        households based on--
                                    ``(I) households' share of total 
                                consumption by all households;
                                    ``(II) the carbon intensity and 
                                covered-emissions intensity of 
                                households' consumption; and
                                    ``(III) the share of households' 
                                carbon and covered-emissions 
                                consumption that is not financed by 
                                Federal benefits subject to a cost of 
                                living adjustment that offsets 
                                increased carbon costs.
                            ``(ii) Maximum energy tax credit.--The 
                        maximum energy tax credit shall be equal to the 
                        arithmetic mean value of the amount allocated 
                        under clause (i) to households of a specified 
                        household size in the lowest income quintile. 
                        Tax filing units that include 5 or more 
                        individuals shall be eligible for the 
                        arithmetic mean value of the amount allocated 
                        under clause (i) to households that includes 5 
                        or more individuals.
                            ``(iii) Aggregate reduction in purchasing 
                        power.--For purposes of this section, the 
                        aggregate reduction in purchasing power shall 
                        be based on the projected total market value of 
                        the emissions allowances used to demonstrate 
                        compliance with title VII of the Clean Air Act 
                        in that year, adjusted to reflect costs that 
                        were not incurred by households as a result of 
                        allowances freely allocated pursuant to section 
                        [782] of the Clean Air Act, as estimated by the 
                        Environmental Protection Agency, and calculated 
                        in a way generally recognized as suitable by 
                        experts in evaluating such purchasing power 
                        impacts.
                            ``(iv) Income quintiles.--Income quintiles 
                        shall be determined by ranking households 
                        according to income adjusted for household 
                        size, and shall be constructed so that each 
                        quintile contains an equal number of people.
            ``(5) Phase down amount.--
                    ``(A) In the case of an eligible individual who has 
                no qualifying individuals, the phase down amount shall 
                be--
                            ``(i) $20,000 in the case of an individual 
                        who does not file a joint return; and
                            ``(ii) $25,000 in the case of a joint 
                        return.
                    ``(B) In the case of an eligible individual who 
                files a joint return and has at least one qualifying 
                individual--
                            ``(i) If the eligible individual has one 
                        qualifying individual, the lowest income level 
                        that exceeds the phaseout amount as defined in 
                        section 32(b)(2) at which a married couple with 
                        one qualifying child is ineligible for the 
                        earned income credit for the taxable year.
                            ``(ii) If the eligible individual has two 
                        qualifying individuals, the lowest income level 
                        that exceeds the phaseout amount as defined in 
                        section 32(b)(2) at which a married couple with 
                        two qualifying children is ineligible for the 
                        earned income credit for the taxable year.
                            ``(iii) If the eligible individual claims 
                        three or more qualifying individuals, the 
                        lowest income level that exceeds the phaseout 
                        amount as defined in section 32(b)(2) at which 
                        a married couple with three or more qualifying 
                        children is ineligible for the earned income 
                        credit for the taxable year.
                    ``(C) In the case of an eligible individual who 
                does not file a joint return and has at least one 
                individual qualifying individual--
                            ``(i) If the eligible individual has one 
                        qualifying individual, the lowest income level 
                        that exceeds the phaseout amount as defined in 
                        section 32(b)(2) at which a single individual 
                        with one qualifying child is ineligible for the 
                        earned income credit for the taxable year.
                            ``(ii) If the eligible individual has two 
                        qualifying individuals, the lowest income level 
                        that exceeds the phaseout amount as defined in 
                        section 32(b)(2) at which a single individual 
                        with two qualifying children is ineligible for 
                        the earned income credit for the taxable year.
                            ``(iii) If the eligible individual has 
                        three or more qualifying individuals, the 
                        lowest income level that exceeds the phaseout 
                        amount as defined in section 32(b)(2) at which 
                        a single individual with three or more 
                        qualifying children is ineligible for the 
                        earned income credit for the taxable year.
            ``(6) Qualifying individual.--A qualifying individual is an 
        individual whom the eligible individual claims as a dependent 
        under section 151, or as a qualifying child for the earned 
        income credit under section 32(c)(3) or the child tax credit 
        under section 24, or both. The term qualifying individual does 
        not include--
                    ``(A) someone claimed as a dependent under section 
                151 if that dependent is claimed as a qualifying child 
                for the earned income tax credit or the child tax 
                credit on a tax form by someone other than the eligible 
                individual; and
                    ``(B) the eligible individual and, if a joint 
                return, his or her spouse.
            ``(7) Number of people in the tax filing unit.--The number 
        of people in the tax filing unit shall equal the sum of the 
        number of qualifying individuals plus--
                    ``(A) in the case of a joint return, 2; and
                    ``(B) in the case of a return that is not filed 
                jointly, 1.
    ``(d) Treatment of Possessions.--
            ``(1) Payments to possessions.--
                    ``(A) Mirror code possession.--The Secretary of the 
                Treasury shall pay to each possession of the United 
                States with a mirror code tax system amounts equal to 
                the loss to that possession by reason of the amendments 
                made by this section. Such amounts shall be determined 
                by the Secretary of the Treasury based on information 
                provided by the Government of the respective 
                possession.
                    ``(B) Other possessions.--The Secretary of the 
                Treasury shall pay to each possession of the United 
                States which does not have a mirror code tax system 
                amounts estimated by the Secretary of the Treasury as 
                being equal to the aggregate benefits that would have 
                been provided to residents of such possession by reason 
                of the amendments made by this section if a mirror code 
                tax system had been in effect in such possession. The 
                preceding sentence shall not apply for a given taxable 
                year with respect to any possession of the United 
                States unless such possession has a plan, which has 
                been approved by the Secretary of the Treasury, under 
                which such possession will promptly distribute such 
                payments to residents of such possession.
            ``(2) Coordination with credit allowed against united 
        states income taxes.--No credit shall be allowed against United 
        States income taxes for any taxable year under this section to 
        any person--
                    ``(A) to whom a credit is allowed against taxes 
                imposed by the possession by reason of the amendments 
                made by this section for such taxable year; or
                    ``(B) who is eligible for a payment under a plan 
                described in paragraph (1)(B) with respect to such 
                taxable year.
    ``(e) Amount of Credit To Be Determined Under Tables.--The amount 
of the credit allowed by this section shall be determined under tables 
prescribed by the Secretary.
    ``(f) Inflation Adjustments.--In the case of any taxable year 
beginning after 2009, dollar amounts in subsection (c)(4)(A) shall be 
increased by an amount equal to such dollar amount, multiplied by the 
cost-of-living adjustment determined under section 1(f)(3) of the 
Internal Revenue Code of 1986.
    ``(g) Treatment in Other Programs.--The energy tax credit provided 
under this section shall not be considered income or resources for any 
purpose under any Federal, State, or local laws, including, but not 
limited to, laws relating to an income tax or public assistance program 
(including, but not limited to, health care, cash aid, child care, 
nutrition programs, and housing assistance), and no participating State 
or political subdivision thereof shall decrease any assistance 
otherwise provided an individual or individuals because of the receipt 
of an energy tax credit under this Act.''.

SEC. 432. ENERGY REFUND PROGRAM FOR LOW-INCOME CONSUMERS.

    (a) Energy Refund Program.--
            (1) The Administrator of the Environmental Protection 
        Agency, or the agency designated by the Administrator shall 
        formulate and administer the ``Energy Refund Program''.
            (2) At the request of the State agency, eligible low-income 
        households within the State shall receive a monthly cash energy 
        refund equal to the estimated loss in purchasing power 
        resulting from this Act.
    (b) Eligibility.--
            (1) Eligible households.--Participation in the Energy 
        Refund Program shall be limited to a household that--
                    (A) the State agency determines to be participating 
                in (i) the Supplemental Nutrition Assistance Program 
                authorized by the Food and Nutrition Act of 2008 (7 
                U.S.C. 2011 et seq.); (ii) the Food Distribution 
                Program on Indian Reservations authorized by section 
                4(b) of such Act (7 U.S.C. 2013(b)); or (iii) the 
                program for nutrition assistance in Puerto Rico or 
                American Samoa under section 19 of the such Act (7 
                U.S.C. 2028);
                    (B) has gross income that does not exceed 150 
                percent of the poverty line; or
                    (C) consists of a single individual or a married 
                couple and (i) receives the subsidy described in 
                section 1860D-14 of the Social Security Act (42 U.S.C. 
                1395w-114); or (ii)(I) participates in the program 
                under section XVIII of the Social Security Act; and 
                (II) meets the income requirements described in section 
                1860D-14(a)(1) or (a)(2) of such Act (42 U.S.C. 1395w-
                114(a)(1) or (a)(2)).
            (2) Streamlined eligibility for certain beneficiaries.--The 
        Administrator, in consultation with the Secretary of Health and 
        Human Services, the Commissioner of Social Security, the 
        Railroad Retirement Board, the Secretary of Veterans Affairs, 
        and the State agencies shall develop procedures to ensure that 
        low-income beneficiaries of the benefit programs they 
        administer receive the energy refund for which they are 
        eligible.
            (3) Limitation.--Notwithstanding any provision of law, the 
        Administrator shall establish procedures to ensure that 
        individuals that qualify for the refund under paragraph (1)(B) 
        and that do not participate in the Supplemental Nutrition 
        Assistance Program are United States citizens, United States 
        nationals, or individuals lawfully residing in the United 
        States.
            (4) National standards.--The Administrator shall establish 
        uniform national standards of eligibility in accordance with 
        the provisions of this section. No State agency shall impose 
        any other standard or requirement as a condition of eligibility 
        or refund receipt under the program. Assistance in the Energy 
        Refund Program shall be furnished promptly to all eligible 
        households who make application for such participation.
    (c) Monthly Energy Refund Amount.--
            (1) Monthly energy refund.--The monthly refund under this 
        subsection for households of 1, 2, 3, 4, and 5 or more members 
        shall be equal to the maximum energy tax credit amount 
        calculated under section 36B(c)(4) of the Internal Revenue Code 
        of 1986 for each household size, divided by 12 and rounded to 
        the nearest whole dollar amount.
            (2) Monthly eligibility.--A household shall not be eligible 
        for the refund under this section for months that the household 
        has not established eligibility under subsection (b).
    (d) Delivery Mechanism.--
            (1) Subject to standards and an implementation schedule set 
        by the Administrator, the energy refund shall be provided in 
        monthly installments via--
                    (A) direct deposit into the eligible household's 
                designated bank account;
                    (B) the State's electronic benefit transfer system; 
                or
                    (C) another Federal or State mechanism, if such a 
                mechanism is approved by the Administrator.
            (2) Such standards shall include--
                    (A)(i) defining the required level of recipient 
                protection regarding privacy;
                    (ii) guidance on how recipients are offered 
                choices, when relevant, about the delivery mechanism;
                    (iii) guidance on ease of use and access to the 
                refund, including the prohibition of fees charged to 
                recipients for withdrawals or other services; and
                    (iv) cost-effective protections against improper 
                accessing of the energy refund;
                    (B) operating standards that provide for 
                interoperability between States and law enforcement 
                monitoring; and
                    (C) other standards, as determined by the 
                Administrator or the Administrator's designee.
    (e) Information About Refund Provided to Households and Internal 
Revenue Service.--
            (1) By January 31 of each year, for each adult that was a 
        member of a household that received an energy refund under this 
        section in the State during the prior calendar year, each State 
        shall issue a form that conforms to standards established by 
        the Secretary of the Treasury under section 36B(b) of the 
        Internal Revenue Code of 1986, containing--
                    (A) the name, address, and social security number 
                of the adult household member; and
                    (B) the number of months the individual was a 
                member of a household that received an energy refund 
                under this section.
            (2) States shall provide this information to the Internal 
        Revenue Service in accordance to standards and regulations set 
        forth by the Secretary of the Treasury.
    (f) Administration.--
            (1) In general.--The State agency of each participating 
        State shall assume responsibility for the certification of 
        applicant households and for the issuance of refunds and the 
        control and accountability thereof.
            (2) Procedures.--Under standards established by the 
        Administrator, the State agency shall establish procedures 
        governing the administration of the Energy Refund Program that 
        the State agency determines best serve households in the State, 
        including households with special needs, such as households 
        with elderly or disabled members, households in rural areas, 
        homeless individuals, and households residing on reservations 
        as defined in the Indian Child Welfare Act of 1978 and the 
        Indian Financing Act of 1974. In carrying out this paragraph, a 
        State agency--
                    (A) shall provide timely, accurate, and fair 
                service to applicants for, and participants in, the 
                Energy Refund Program;
                    (B) shall permit an applicant household to apply to 
                participate in the program at the time that the 
                household first contacts the State agency, and shall 
                consider an application that contains the name, 
                address, and signature of the applicant to be 
                sufficient to constitute an application for 
                participation;
                    (C) shall screen any applicant household for the 
                Supplemental Nutrition Assistance Program, the State's 
                medical assistance program under section XIX of the 
                Social Security Act, State Childrens Health Insurance 
                Program under section XXI of the Social Security Act, 
                and a State program that provides basic assistance 
                under a State program funded under title IV of the 
                Social Security Act or with qualified State 
                expenditures as defined in section 409(a)(7) of the 
                Social Security Act for eligibility for the Energy 
                Refund Program and, if eligible, shall enroll such 
                applicant household in the Energy Refund Program;
                    (D) shall complete certification of and provide a 
                refund to any eligible household not later than thirty 
                days following its filing of an application;
                    (E) shall use appropriate bilingual personnel and 
                materials in the administration of the program in those 
                portions of the State in which a substantial number of 
                members of low-income households speak a language other 
                than English; and
                    (F) shall utilize State agency personnel who are 
                employed in accordance with the current standards for a 
                Merit System of Personnel Administration or any 
                standards later prescribed by the Office of Personnel 
                Management pursuant to section 208 of the 
                Intergovernmental Personnel Act of 1970 (42 U.S.C. 
                4728) modifying or superseding such standards relating 
                to the establishment and maintenance of personnel 
                standards on a merit basis to make all tentative and 
                final determinations of eligibility and ineligibility.
            (3) Regulations.--
                    (A) Except as provided in subparagraph (B) the 
                Administrator shall issue such regulations consistent 
                with this section as the Administrator deems necessary 
                or appropriate for the effective and efficient 
                administration of the Energy Refund Program and shall 
                promulgate all such regulations in accordance with the 
                procedures set forth in section 553 of title 5, United 
                States Code.
                    (B) Without regard to section 553 of title 5 of 
                such Code, the Administrator may, during the period 
                beginning with the effective date of this section and 
                ending two years after such date, by rule promulgate as 
                final any procedures that are substantially the same as 
                the procedures governing the Supplemental Nutrition 
                Assistance Program at 7 CFR 273.2, 273.12.273.15.
    (g) Treatment.--The value of the refund provided under this Act 
shall not be considered income or resources for any purpose under any 
Federal, State, or local laws, including, but not limited to, laws 
relating to an income tax, or public assistance programs (including, 
but not limited to, health care, cash aid, child care, nutrition 
programs, and housing assistance) and no participating State or 
political subdivision thereof shall decrease any assistance otherwise 
provided an individual or individuals because of the receipt of a 
refund under this Act.
    (h) Program Integrity.--For purposes of ensuring program integrity 
and complying with the requirements of the Improper Payment Information 
Act of 2002, the Administrator shall--
            (1) to the maximum extent possible rely on and coordinate 
        with the quality control sample and review procedures of 
        section 16(c)(2), (3), (4), and (5) of the Supplemental 
        Nutrition Assistance Program; and
            (2) develop procedures to monitor the compliance with and 
        accuracy of State agencies in providing forms to household 
        members and the Internal Revenue Service under subsection (f).
    (i) Definitions.--
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency or the 
        head of another agency designated by the Administrator.
            (2) Electronic benefit transfer system.--The term 
        ``electronic benefit transfer system'' means a system by which 
        household benefits or refunds defined under subsection (d) are 
        issued from and stored in a central databank via electronic 
        benefit transfer cards.
            (3) Gross income.--The term ``gross income'' means the 
        gross income of a household that is determined in accordance 
        with standards and procedures established under section 5 of 
        the Food and Nutrition Act of 2008 (7 U.S.C. 2014) and its 
        implementing regulations.
            (4) Household.--The term ``household'' means--
                    (A)(i) except as provided in subparagraph (C), an 
                individual or a group of individuals who are a 
                household under section 3(n) of the Food and Nutrition 
                Act of 2008 (7 U.S.C. 2012(n)); and
                    (ii) a single individual or married couple that 
                receive benefits under section 1860D-14 of the Social 
                Security Act (42 U.S.C. 1395w-114).
                    (B) The Administrator shall establish rules for 
                providing the energy refund in an equitable and 
                administratively simple manner to households where the 
                group of individuals who live together includes a 
                combination of members described in clauses (i) and 
                (ii) of subparagraph (A), or includes additional 
                members not described in clause (i) or clause (ii) of 
                subparagraph (A).
                    (C) The Administrator shall establish rules 
                regarding the eligibility and delivery of the energy 
                refund to groups of individuals described in section 
                3(n)(4) or (5) of the Food and Nutrition Act of 2008 (7 
                U.S.C. 2012(n)).
            (5) Poverty line.--The term ``poverty line'' has the 
        meaning given the term in section 673(2) of the Community 
        Services Block Grant Act (42 U.S.C. 9902(2)), including any 
        revision required by that section.
            (6) State.--The term ``State'' means the 50 States, the 
        District of Columbia, the Commonwealth of Puerto Rico, American 
        Samoa, the United States Virgin Islands, Guam, and the 
        Commonwealth of the Northern Mariana Islands.
            (7) State agency.--The term ``State agency'' means an 
        agency of State government, including the local offices 
        thereof, that has responsibility for administration of the 1 or 
        more federally aided public assistance programs within the 
        State, and in those States where such assistance programs are 
        operated on a decentralized basis, the term shall include the 
        counterpart local agencies administering such programs.
            (8) Other terms.--Other terms not defined in this Act shall 
        have the same meaning applied in the Supplemental Nutrition 
        Assistance Program unless the Administrator finds for good 
        cause that application of a particular definition would be 
        detrimental to the purposes of the Energy Refund Program.
    (j) Authorization of Appropriations.--Such sums as are necessary 
are hereby appropriated for the Energy Refund Program under this 
section.

                 Subtitle D--Exporting Clean Technology

SEC. 441. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) Protecting Americans from the impacts of climate change 
        requires global reductions in greenhouse gas emissions.
            (2) Although developing countries are historically least 
        responsible for the cumulative greenhouse gas emissions that 
        are causing climate change and continue to have very low per 
        capita greenhouse gas emissions, their overall greenhouse gas 
        emissions are increasing as they seek to grow their economies 
        and reduce energy poverty for their populations.
            (3) Many developing countries lack the financial and 
        technical resources to adopt clean energy technologies and 
        absent assistance their greenhouse gas emissions will continue 
        to increase.
            (4) Investments in clean energy technology cooperation can 
        substantially reduce global greenhouse gas emissions while 
        providing developing countries with incentives to adopt 
        policies that will address competitiveness concerns related to 
        regulation of United States greenhouse gas emissions.
            (5) Investments in clean technology in developing countries 
        will increase demand for clean energy products, open up new 
        markets for United States companies, spur innovation, and lower 
        costs.
            (6) Under Article 4 of the United Nations Framework 
        Convention on Climate Change, developed country parties, 
        including the United States, committed to ``take all 
        practicable steps to promote, facilitate, and finance, as 
        appropriate, the transfer of, or access to, environmentally 
        sound technologies and know-how to other parties, particularly 
        developing country parties, to enable them to implement the 
        provisions of the Convention''.
            (7) Under the Bali Action Plan, developed country parties 
        to the United Nations Framework Convention on Climate Change, 
        including the United States, committed to ``enhanced action on 
        the provision of financial resources and investment to support 
        action on mitigation and adaptation and technology 
        cooperation,'' including, inter alia, consideration of 
        ``improved access to adequate, predictable, and sustainable 
        financial resources and financial and technical support, and 
        the provision of new and additional resources, including 
        official and concessional funding for developing country 
        parties''.
    (b) Purposes.--The purposes of this subtitle are--
            (1) to provide United States assistance and leverage 
        private resources to encourage widespread implementation, in 
        developing countries, of activities that reduce, sequester, or 
        avoid greenhouse gas emissions; and
            (2) to provide such assistance in a manner that--
                    (A) encourages such countries to adopt policies and 
                measures, including sector-based and cross-sector 
                policies and measures, that substantially reduce, 
                sequester, or avoid greenhouse gas emissions; and
                    (B) promotes the successful negotiation of a global 
                agreement to reduce greenhouse gas emissions under the 
                United Nations Framework Convention on Climate Change.

SEC. 442. DEFINITIONS.

    In this subtitle:
            (1) Allowance.--The term ``allowance'' means an emission 
        allowance established under section 721 of the Clean Air Act.
            (2) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committees on Energy and Commerce, Foreign 
                Affairs, and Financial Services of the House of 
                Representatives; and
                    (B) the Committees on Environment and Public Works, 
                Energy and Natural Resources, and Foreign Relations of 
                the Senate.
            (3) Convention.--The term ``Convention'' means the United 
        Nations Framework Convention on Climate Change, done at New 
        York on May 9, 1992, and entered into force on March 21, 1994.
            (4) Developing country.--The term ``developing country'' 
        means a country eligible to receive official development 
        assistance according to the income guidelines of the 
        Development Assistance Committee of the Organization for 
        Economic Cooperation and Development.
            (5) Eligible country.--The term ``eligible country'' means 
        a developing country that is determined by the interagency 
        group under section 444 to be eligible to receive assistance 
        from the International Clean Technology Account.
            (6) Interagency group.--The term ``interagency group'' 
        means the group established by the President under section 443 
        to administer distributions from the International Clean 
        Technology Account.
            (7) International clean technology account.--The term 
        ``International Clean Technology Account'' means the account to 
        which the Administrator allocates allowances under section 
        782(o) of the Clean Air Act.
            (8) Least developed country.--The term ``least developed 
        country'' means a foreign country the United Nations has 
        identified as among the least developed of developing 
        countries.
            (9) Qualifying activity.--The term ``qualifying activity'' 
        means an activity that meets the criteria in section 445.
            (10) Qualifying entity.--The term ``qualifying entity'' 
        means a national, regional, or local government in, or a 
        nongovernmental organization or private entity located or 
        operating in, an eligible country.

SEC. 443. GOVERNANCE.

    (a) Oversight.--The Secretary of State, or such other Federal 
agency head as the President may designate, in consultation with the 
interagency group established under subsection (b), shall oversee 
distributions of allowances from the International Clean Technology 
Account.
    (b) Interagency Group.--The President shall establish an 
interagency group to administer the International Clean Technology 
Account. The Members of the interagency group shall include--
            (1) the Secretary of State;
            (2) the Administrator of the Environmental Protection 
        Agency;
            (3) the Secretary of Energy;
            (4) the Secretary of the Treasury;
            (5) the Administrator of the United States Agency for 
        International Development; and
            (6) any other head of a Federal agency or executive branch 
        appointee that the President may designate.
    (c) Chairperson.--The Secretary of State shall serve as the 
chairperson of the interagency group.
    (d) Supplement Not Supplant.--Allowances distributed from the 
International Clean Technology Account shall be used to supplement, and 
not to supplant, any other Federal, State, or local resources available 
to carry out activities that are qualifying activities under this 
subtitle.

SEC. 444. DETERMINATION OF ELIGIBLE COUNTRIES.

    (a) In General.--The interagency group shall determine a country to 
be an eligible country for the purposes of this subtitle if a country 
meets the following criteria:
            (1) The country is a developing country that--
                    (A) has entered into an international agreement to 
                which the United States is a party, under which such 
                country agrees to take actions to produce measurable, 
                reportable, and verifiable greenhouse gas emissions 
                mitigation; or
                    (B) is determined by the interagency group to have 
                in force national policies and measures that are 
                capable of producing measurable, reportable, and 
                verifiable greenhouse gas emissions mitigation.
            (2) The country has developed a nationally appropriate 
        mitigation strategy that seeks to achieve substantial 
        reductions, sequestration, or avoidance of greenhouse gas 
        emissions, relative to business-as-usual levels.
            (3) Subject to subsection (b)(1), such other criteria as 
        the President determines will serve the purposes of this 
        subtitle or other United States national security, foreign 
        policy, environmental, or economic objectives.
    (b) Exceptions.--
            (1) Subsection (a)(3) applies only to bilateral assistance 
        under section 446(c).
            (2) The eligibility criteria in this section do not apply 
        in the case of least developed countries receiving assistance 
        under section 445(7) for the purpose of building capacity to 
        meet such eligibility criteria.

SEC. 445. QUALIFYING ACTIVITIES.

    Assistance under this subtitle may be provided only to qualifying 
entities for clean technology activities (including building relevant 
technical and institutional capacity) that contribute to substantial, 
measurable, reportable, and verifiable reductions, sequestration, or 
avoidance of greenhouse gas emissions including--
            (1) deployment of technologies to capture and sequester 
        carbon dioxide emissions from electric generating units or 
        large industrial sources (except that assistance under this 
        subtitle for such deployment shall be limited to the cost of 
        retrofitting existing facilities with such technologies or the 
        incremental cost of purchasing and installing such technologies 
        at new facilities);
            (2) deployment of renewable electricity generation from 
        wind, solar, sustainably produced biomass, geothermal, marine, 
        or hydrokinetic sources;
            (3) substantial increases in the efficiency of electricity 
        transmission, distribution, and consumption;
            (4) deployment of low- or zero emissions technologies that 
        are facing financial or other barriers to their widespread 
        deployment which could be addressed through support under this 
        subtitle in order to reduce, sequester, or avoid emission;
            (5) reduction in transportation sector emissions through 
        increased transportation system and vehicle efficiency or use 
        of transportation fuels that have lifecycle greenhouse gas 
        emissions that are substantially lower than those attributable 
        to fossil fuel-based alternatives;
            (6) reduction in black carbon emissions; or
            (7) capacity building activities, including--
                    (A) developing and implementing methodologies and 
                programs for measuring and quantifying greenhouse gas 
                emissions and verifying emissions mitigation;
                    (B) assessing, developing, and implementing 
                technology and policy options for greenhouse gas 
                emissions mitigation and avoidance of future emissions, 
                including sector and cross-sector mitigation 
                strategies; and
                    (C) providing other forms of technical assistance 
                to facilitate the qualification for, and receipt of, 
                assistance under this Act.

SEC. 446. ASSISTANCE.

    (a) In General.--The Secretary of State, or such other Federal 
agency head as the President may designate, is authorized to provide 
assistance, through the distribution of allowances, from the 
International Clean Technology Account for qualifying activities that 
take place in eligible countries.
    (b) Distribution of Allowances.--
            (1) In general.--The Secretary of State, or such other 
        Federal agency head as the President may designate, after 
        consultation with the interagency group, shall distribute 
        allowances from the International Clean Technology Account--
                    (A) in the form of bilateral assistance in 
                accordance with paragraph (4);
                    (B) to multilateral funds or institutions pursuant 
                to the Convention or an agreement negotiated under the 
                Convention; or
                    (C) through some combination of the mechanisms 
                identified in subparagraphs (A) and (B).
            (2) Global environment facility.--For any allowances 
        provided to the Global Environment Facility pursuant to 
        paragraph (1)(B), the President shall designate the Secretary 
        of the Treasury to distribute those allowances to the Global 
        Environment Facility.
            (3) Distribution through international fund or 
        institution.--If allowances are distributed to a multilateral 
        fund or institution, as authorized in paragraph (1), the 
        Secretary of State, or such other Federal agency head as the 
        President may designate, shall seek to ensure the establishment 
        and implementation of adequate mechanisms to--
                    (A) apply and enforce the criteria for 
                determination of eligible countries and qualifying 
                activities under sections 444 and 445, respectively; 
                and
                    (B) require public reporting describing the process 
                and methodology for selecting the ultimate recipients 
                of assistance and a description of each activity that 
                received assistance, including the amount of 
                obligations and expenditures for assistance.
            (4) Bilateral assistance.--
                    (A) In general.--Bilateral assistance under 
                paragraph (1) shall be carried out by the Administrator 
                of the United States Agency for International 
                Development, in consultation with the interagency 
                group.
                    (B) Limitations.--Not more than 15 percent of 
                allowances made available to carry out bilateral 
                assistance under this subtitle in any year shall be 
                distributed to support activities in any single 
                country.
                    (C) Selection criteria.--Not later than 2 years 
                after the date of enactment of this subtitle, the 
                Administrator of the United States Agency for 
                International Development, after consultation with the 
                interagency group, shall develop and publish a set of 
                criteria to be used in evaluating activities within 
                eligible countries for bilateral assistance under this 
                subtitle.
                    (D) Criteria requirements.--The criteria under 
                subparagraph (C) shall require that--
                            (i) the activity is a qualifying activity;
                            (ii) the activity will be conducted as part 
                        of an eligible country's nationally appropriate 
                        mitigation strategy or as part of an eligible 
                        country's actions towards providing a 
                        nationally appropriate mitigation strategy to 
                        reduce, sequester, or avoid emissions being 
                        implemented by the eligible country;
                            (iii) the activity will not have adverse 
                        effects on human health, safety, or welfare, 
                        the environment, or natural resources;
                            (iv) any technologies deployed through 
                        bilateral assistance under this subtitle will 
                        be properly implemented and maintained;
                            (v) the activity will not cause any net 
                        loss of United States jobs or displacement of 
                        United States production;
                            (vi) costs of the activity will be shared 
                        by the host country government, private sector 
                        parties, or a multinational development bank, 
                        except that this clause does not apply to least 
                        developed countries; and
                            (vii) the activity meets such other 
                        requirements as the interagency group 
                        determines appropriate to further the purposes 
                        of this subtitle.
                    (E) Criteria preferences.--The criteria under 
                subparagraph (C) shall give preference to activities 
                that--
                            (i) promise to achieve large-scale 
                        greenhouse gas reductions, sequestration, or 
                        avoidance at a national, sectoral or cross-
                        sectoral level;
                            (ii) have the potential to catalyze a shift 
                        within the host country towards widespread 
                        deployment of low- or zero-carbon energy 
                        technologies;
                            (iii) build technical and institutional 
                        capacity and other activities that are unlikely 
                        to be attractive to private sector funding; or
                            (iv) maximize opportunities to leverage 
                        other sources of assistance and catalyze 
                        private-sector investment.
    (c) Monitoring, Evaluation, and Enforcement.--The Secretary of 
State, or such other Federal agency head as the President may 
designate, in consultation with the interagency group, shall establish 
and implement a system to monitor and evaluate the performance of 
activities receiving assistance under this subtitle. The Secretary of 
State, or such other Federal agency head as the President may 
designate, shall have the authority to suspend or terminate assistance 
in whole or in part for an activity if it is determined that the 
activity is not operating in compliance with the approved proposal.
    (d) Coordination With U.S. Foreign Assistance.--Subject to the 
direction of the President, the Secretary of State shall, to the extent 
practicable, seek to align activities under this section with broader 
development, poverty alleviation, or natural resource management 
objectives and initiatives in the recipient country.
    (e) Annual Reports.--Not later than March 1, 2012, and annually 
thereafter, the President shall submit to the appropriate congressional 
committees a report on the assistance provided under this subtitle 
during the prior fiscal year. Such report shall include--
            (1) a description of the amount and value of allowances 
        distributed during the prior fiscal year;
            (2) a description of each activity that received assistance 
        during the prior fiscal year, and a description of the 
        anticipated and actual outcomes;
            (3) an assessment of any adverse effects to human health, 
        safety, or welfare, the environment, or natural resources as a 
        result of activities supported under this subtitle;
            (4) an assessment of the success of the assistance provided 
        under this subtitle to improving the technical and 
        institutional capacity to implement substantial emissions 
        reductions; and
            (5) an estimate of the greenhouse gas emissions reductions, 
        sequestration, or avoidance achieved by assistance provided 
        under this subtitle during the prior fiscal year.

                 Subtitle E--Adapting to Climate Change

                      PART 1--DOMESTIC ADAPTATION

         Subpart A--National Climate Change Adaptation Program

SEC. 451. NATIONAL CLIMATE CHANGE ADAPTATION PROGRAM.

    The President shall establish within the United States Global 
Change Research Program a National Climate Change Adaptation Program 
for the purpose of increasing the overall effectiveness of Federal 
climate change adaptation efforts.

SEC. 452. CLIMATE SERVICES.

    The Secretary of Commerce, acting through the Administrator of the 
National Oceanic and Atmospheric Administration (NOAA), shall establish 
within NOAA a National Climate Service to develop climate information, 
data, forecasts, and warnings at national and regional scales, and to 
distribute information related to climate impacts to State, local, and 
tribal governments and the public to facilitate the development and 
implementation of strategies to reduce society's vulnerability to 
climate variability and change.

SEC. 453. STATE PROGRAMS TO BUILD RESILIENCE TO CLIMATE CHANGE IMPACTS.

    (a) Distribution of Allowances.--
            (1) In general.--Not later than September 30, 2012, and 
        annually thereafter through 2050, the Administrator shall 
        distribute allowances allocated for purposes of this subpart 
        pursuant to section [782] of the Clean Air Act ratably among 
        the State governments based on the product of--
                    (A) each State's population; and
                    (B) each State's allocation factor as determined 
                under paragraph (2).
            (2) State allocation factors.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the allocation factor for a State shall be the 
                quotient of--
                            (i) the per capita income of all 
                        individuals in the United States, divided by
                            (ii) the per capita income of all 
                        individuals in such State.
                    (B) Limitation.--If the allocation factor for a 
                State as calculated under subparagraph (A) would exceed 
                1.2, then the allocation factor for such State shall be 
                1.2. If the allocation factor for a State as calculated 
                under subparagraph (A) would be less than 0.8, then the 
                allocation factor for such State shall be 0.8.
                    (C) Per capita income.--For purposes of this 
                paragraph, per capita income shall be--
                            (i) determined at 2-year intervals; and
                            (ii) equal to the average of the annual per 
                        capita incomes for the most recent period of 3 
                        consecutive years for which satisfactory data 
                        are available from the Department of Commerce 
                        at the time such determination is made.
    (b) Sale of Allowances.--Each State receiving emission allowances 
under this section shall sell such allowances within 1 year of receipt, 
either directly or through consignment to the Administrator for 
auction. States shall deposit the proceeds of such sales within the 
State Energy and Environment Development (SEED) Fund established 
pursuant to section 131 of the American Clean Energy and Security Act 
of 2009. Emission allowances distributed under this section that are 
not sold within 1 year of receipt by a State shall be returned to the 
Administrator, who shall distribute such allowances to the remaining 
States ratably in accordance with the formula in subsection (a).
    (c) Use of Proceeds.--States shall, in accordance with a State 
climate adaptation plan approved pursuant to subsection (d), use the 
proceeds of sales of emission allowances distributed under this section 
exclusively for the implementation of projects, programs, or measures 
to build resilience to the impacts of climate change, including--
            (1) extreme weather events such as flooding and tropical 
        cyclones;
            (2) more frequent heavy precipitation events;
            (3) water scarcity and adverse impacts on water quality;
            (4) stronger and longer heat waves;
            (5) more frequent and severe droughts;
            (6) rises in sea level;
            (7) ecosystem disruption;
            (8) increased air pollution; and
            (9) effects on public health.
    (d) State Climate Adaptation Plans.--
            (1) In general.--Not later than 2 years after the date of 
        enactment of this Act, the Administrator, or such other Federal 
        agency head or heads as the President may designate, shall 
        promulgate regulations establishing requirements for submission 
        and approval of State climate adaptation plans under this 
        section. Receipt of emission allowances pursuant to this 
        section shall be contingent on approval of a State climate 
        adaptation plan meeting the requirements of such guidelines.
            (2) Requirements.--Regulations promulgated under this 
        subsection shall require, at minimum, that--
                    (A) State climate adaptation plans assess and 
                prioritize the State's vulnerability to a broad range 
                of impacts of climate change, based on the best 
                available science;
                    (B) State climate adaptation plans identify and 
                prioritize specific cost-effective projects, programs, 
                and measures to build resilience to predicted impacts 
                of climate change; and
                    (C) in order to be eligible to receive emission 
                allowances under this section, a State shall submit a 
                revised State climate adaptation plan for approval not 
                less frequently than every 5 years.
            (3) Coordination with prior planning efforts.--In 
        promulgating regulations under this subsection, the 
        Administrator, or such other Federal agency head or heads as 
        the President may designate, shall draw upon lessons learned 
        and best practices from preexisting State climate adaptation 
        planning efforts and shall seek to avoid duplication of such 
        efforts.
    (e) Reporting.--Each State receiving emission allowances under this 
section shall submit to the Administrator, or such other Federal agency 
head or heads as the President may designate, within 12 months after 
each receipt of such allowances and once every 2 years thereafter until 
the proceeds from the sale of emission allowances received under this 
section are fully expended, a report that--
            (1) provides a full accounting for the State's use of 
        proceeds of sales of emission allowances distributed under this 
        section, including a description of the projects, programs, or 
        measures funded through such proceeds; and
            (2) includes a report prepared by an independent third 
        party, in accordance with such regulations as are promulgated 
        by the Administrator or such other Federal agency head or heads 
        as the President may designate, evaluating the performance of 
        the projects, programs, or measures funded under this section.
    (f) Enforcement.--If the Administrator, or such other Federal 
agency head or heads as the President may designate, determines that a 
State is not in compliance with this section, the Administrator may 
withhold a portion of the allowances, the value of which is equal to up 
to twice the value of the allowances that the State failed to use in 
accordance with the requirements of this section, that such State would 
otherwise be eligible to receive under this section in 1 or more later 
years. Allowances withheld pursuant to this subsection shall be 
distributed among the remaining States ratably in accordance with the 
formula in subsection (a).

              Subpart B--Public Health and Climate Change

SEC. 461. SENSE OF CONGRESS ON PUBLIC HEALTH AND CLIMATE CHANGE.

    It is the sense of the Congress that the Federal Government, in 
cooperation with international, State, tribal, and local governments, 
concerned public and private organizations, and citizens, should use 
all practicable means and measures--
            (1) to assist the efforts of public health and health care 
        professionals, first responders, States, tribes, 
        municipalities, and local communities to incorporate measures 
        to prepare health systems to respond to the impacts of climate 
        change;
            (2) to ensure--
                    (A) that the Nation's health professionals have 
                sufficient information to prepare for and respond to 
                the adverse health impacts of climate change;
                    (B) the utility and value of scientific research in 
                advancing understanding of--
                            (i) the health impacts of climate change; 
                        and
                            (ii) strategies to prepare for and respond 
                        to the health impacts of climate change;
                    (C) the identification of communities vulnerable to 
                the health effects of climate change and the 
                development of strategic response plans to be carried 
                out by health professionals for those communities;
                    (D) the improvement of health status and health 
                equity through efforts to prepare for and respond to 
                climate change; and
                    (E) the inclusion of health policy in the 
                development of climate change responses;
            (3) to encourage further research, interdisciplinary 
        partnership, and collaboration among stakeholders in order to--
                    (A) understand and monitor the health impacts of 
                climate change; and
                    (B) improve public health knowledge and response 
                strategies to climate change;
            (4) to enhance preparedness activities, and public health 
        infrastructure, relating to climate change and health;
            (5) to encourage each and every American to learn about the 
        impacts of climate change on health; and
            (6) to assist the efforts of developing nations to 
        incorporate measures to prepare health systems to respond to 
        the impacts of climate change.

SEC. 462. RELATIONSHIP TO OTHER LAWS.

    Nothing in this subpart in any manner limits the authority provided 
to or responsibility conferred on any Federal department or agency by 
any provision of any law (including regulations) or authorizes any 
violation of any provision of any law (including regulations), 
including any health, energy, environmental, transportation, or any 
other law or regulation.

SEC. 463. NATIONAL STRATEGIC ACTION PLAN.

    (a) Requirement.--
            (1) In general.--The Secretary of Health and Human 
        Services, within 2 years after the date of the enactment of 
        this Act, on the basis of the best available science, and in 
        consultation pursuant to paragraph (2), shall publish a 
        strategic action plan to assist health professionals in 
        preparing for and responding to the impacts of climate change 
        on public health in the United States and other nations, 
        particularly developing nations.
            (2) Consultation.--In developing or making any revision to 
        the national strategic action plan, the Secretary shall--
                    (A) consult with the Director of the Centers for 
                Disease Control and Prevention, the Administrator of 
                the Environmental Protection Agency, the Director of 
                the National Institutes of Health, the Secretary of 
                Energy, other appropriate Federal agencies, Indian 
                tribes, State and local governments, public health 
                organizations, scientists, and other interested 
                stakeholders; and
                    (B) provide opportunity for public input.
    (b) Contents.--
            (1) In general.--The Secretary, acting through the Director 
        of the Centers for Disease Control and Prevention and other 
        appropriate Federal agencies, shall assist health professionals 
        in preparing for and responding effectively and efficiently to 
        the health effects of climate change through measures 
        including--
                    (A) developing, improving, integrating, and 
                maintaining domestic and international disease 
                surveillance systems and monitoring capacity to respond 
                to health-related effects of climate change, including 
                on topics addressing--
                            (i) water, food, and vector borne 
                        infectious diseases and climate change;
                            (ii) pulmonary effects, including responses 
                        to aeroallergens;
                            (iii) cardiovascular effects, including 
                        impacts of temperature extremes;
                            (iv) air pollution health effects, 
                        including heightened sensitivity to air 
                        pollution;
                            (v) hazardous algal blooms;
                            (vi) mental and behavioral health impacts 
                        of climate change;
                            (vii) the health of refugees, displaced 
                        persons, and vulnerable communities;
                            (viii) the implications for communities 
                        vulnerable to health effects of climate change, 
                        as well as strategies for responding to climate 
                        change within these communities; and
                            (ix) local and community-based health 
                        interventions for climate-related health 
                        impacts;
                    (B) creating tools for predicting and monitoring 
                the public health effects of climate change on the 
                international, national, regional, State, and local 
                levels, and providing technical support to assist in 
                their implementation;
                    (C) developing public health communications 
                strategies and interventions for extreme weather events 
                and disaster response situations;
                    (D) identifying and prioritizing communities and 
                populations vulnerable to the health effects of climate 
                change, and determining actions and communication 
                strategies that should be taken to inform and protect 
                these communities and populations from the health 
                effects of climate change;
                    (E) developing health communication, public 
                education, and outreach programs aimed at public health 
                and health care professionals, as well as the general 
                public, to promote preparedness and response strategies 
                relating to climate change and public health, including 
                the identification of greenhouse gas reduction 
                behaviors that are health-promoting;
                    (F) developing academic and regional centers of 
                excellence devoted to--
                            (i) researching relationships between 
                        climate change and health;
                            (ii) expanding and training the public 
                        health workforce to strengthen the capacity of 
                        such workforce to respond to and prepare for 
                        the health effects of climate change;
                            (iii) creating and supporting academic 
                        fellowships focusing on the health effects of 
                        climate change; and
                            (iv) training senior health ministry 
                        officials from developing nations to strengthen 
                        the capacity of such nations to--
                                    (I) prepare for and respond to the 
                                health effects of climate change; and
                                    (II) build an international network 
                                of public health professionals with the 
                                necessary climate change knowledge 
                                base;
                    (G) using techniques, including health impact 
                assessments, to assess various climate change public 
                health preparedness and response strategies on 
                international, national, State, regional, tribal, and 
                local levels, and make recommendations as to those 
                strategies that best protect the public health;
                    (H)(i) assisting in the development, 
                implementation, and support of State, regional, tribal, 
                and local preparedness, communication, and response 
                plans (including with respect to the health departments 
                of such entities) to anticipate and reduce the health 
                threats of climate change; and
                    (ii) pursuing collaborative efforts to develop, 
                integrate, and implement such plans;
                    (I) creating a program to advance research as it 
                relates to the effects of climate change on public 
                health across Federal agencies, including research to--
                            (i) identify and assess climate change 
                        health effects preparedness and response 
                        strategies;
                            (ii) prioritize critical public health 
                        infrastructure projects related to potential 
                        climate change impacts that affect public 
                        health; and
                            (iii) coordinate preparedness for climate 
                        change health impacts, including the 
                        development of modeling and forecasting tools;
                    (J) providing technical assistance for the 
                development, implementation, and support of 
                preparedness and response plans to anticipate and 
                reduce the health threats of climate change in 
                developing nations; and
                    (K) carrying out other activities determined 
                appropriate by the Secretary to plan for and respond to 
                the impacts of climate change on public health.
    (c) Revision.--The Secretary shall revise the national strategic 
action plan not later than July 1, 2014, and every 4 years thereafter, 
to reflect new information collected pursuant to implementation of the 
national strategic action plan and otherwise, including information 
on--
            (1) the status of critical environmental health parameters 
        and related human health impacts;
            (2) the impacts of climate change on public health; and
            (3) advances in the development of strategies for preparing 
        for and responding to the impacts of climate change on public 
        health.
    (d) Implementation.--
            (1) Implementation through hhs.--The Secretary shall 
        exercise the Secretary's authority under this subpart and other 
        provisions of Federal law to achieve the goals and measures of 
        the national strategic action plan.
            (2) Other public health programs and initiatives.--The 
        Secretary and Federal officials of other relevant Federal 
        agencies shall administer public health programs and 
        initiatives authorized by provisions of law other than this 
        subpart, subject to the requirements of such statutes, in a 
        manner designed to achieve the goals of the national strategic 
        action plan.
            (3) CDC.--In furtherance of the national strategic action 
        plan, the Secretary, acting through the Director of the Centers 
        for Disease Control and Prevention and the head of any other 
        appropriate Federal agency, shall--
                    (A) conduct scientific research to assist health 
                professionals in preparing for and responding to the 
                impacts of climate change on public health;
                    (B) provide funding for--
                            (i) research on the health effects of 
                        climate change; and
                            (ii) preparedness planning on the 
                        international, national, State, regional, and 
                        local levels to respond to or reduce the burden 
                        of health effects of climate change; and
                    (C) carry out other activities determined 
                appropriate by the Director or the head of such agency 
                to prepare for and respond to the impacts of climate 
                change on public health.

SEC. 464. ADVISORY BOARD.

    (a) Establishment.--The Secretary shall establish a permanent 
science advisory board comprised of not less than 10 and not more than 
20 members.
    (b) Appointment of Members.--The Secretary shall appoint the 
members of the science advisory board from among individuals--
            (1) who have expertise in public health and human services, 
        climate change, and other relevant disciplines; and
            (2) at least \1/2\ of whom are recommended by the President 
        of the National Academy of Sciences.
    (c) Functions.--The science advisory board shall--
            (1) provide scientific and technical advice and 
        recommendations to the Secretary on the domestic and 
        international impacts of climate change on public health, 
        populations and regions particularly vulnerable to the effects 
        of climate change, and strategies and mechanisms to prepare for 
        and respond to the impacts of climate change on public health; 
        and
            (2) advise the Secretary regarding the best science 
        available for purposes of issuing the national strategic action 
        plan.

SEC. 465. REPORTS.

    (a) Needs Assessment.--
            (1) In general.--The Secretary shall seek to enter into, by 
        not later than 6 months after the date of the enactment of this 
        Act, an agreement with the National Research Council and the 
        Institute of Medicine to complete a report that--
                    (A) assesses the needs for health professionals to 
                prepare for and respond to climate change impacts on 
                public health; and
                    (B) recommends programs to meet those needs.
            (2) Submission.--The agreement under paragraph (1) shall 
        require the completed report to be submitted to the Congress 
        and the Secretary and made publicly available not later than 1 
        year after the date of the agreement.
    (b) Climate Change Health Protection and Promotion Reports.--
            (1) In general.--The Secretary, in consultation with the 
        advisory board established under section 464, shall ensure the 
        issuance of reports to aid health professionals in preparing 
        for and responding to the adverse health effects of climate 
        change that--
                    (A) review scientific developments on health 
                impacts of climate change; and
                    (B) recommend changes to the national strategic 
                action plan.
            (2) Submission.--The Secretary shall submit the reports 
        required by paragraph (1) to the Congress and make such reports 
        publicly available not later than July 1, 2013, and every 4 
        years thereafter.

SEC. 466. DEFINITIONS.

    In this subpart:
            (1) Health impact assessment.--The term ``health impact 
        assessment'' means a combination of procedures, methods, and 
        tools by which a policy, program, or project may be judged as 
        to its potential effects on the health of a population, and the 
        distribution of those effects within the population.
            (2) National strategic action plan.--The term ``national 
        strategic action plan'' means the plan issued and revised under 
        section 463.
            (3) Secretary.--Unless otherwise specified, the term 
        ``Secretary'' means the Secretary of Health and Human Services.

SEC. 467. CLIMATE CHANGE HEALTH PROTECTION AND PROMOTION FUND.

    (a) Establishment of Fund.--There is hereby established in the 
Treasury a separate account that shall be known as the Climate Change 
Health Protection and Promotion Fund.
    (b) Availability of Amounts.--All amounts deposited into the 
Climate Change Health Protection and Promotion Fund shall be available 
to the Secretary to carry out this subpart subject to further 
appropriation.
    (c) Distribution of Funds by HHS.--In carrying out this subpart, 
the Secretary may make funds deposited in the Climate Change Health 
Protection and Promotion Fund available to--
            (1) other departments, agencies, and offices of the Federal 
        Government;
            (2) foreign, State, tribal, and local governments; and
            (3) such other entities as the Secretary determines 
        appropriate.
    (d) Supplement, Not Replace.--It is the intent of Congress that 
funds made available to carry out this subpart should be used to 
supplement, and not replace, existing sources of funding for public 
health.

                 Subpart C--Natural Resource Adaptation

SEC. 471. PURPOSES.

    The purposes of this subpart are to--
            (1) establish an integrated Federal program to protect, 
        restore, and conserve the Nation's natural resources in 
        response to the threats of climate change and ocean 
        acidification; and
            (2) provide financial support and incentives for programs, 
        strategies, and activities that protect, restore, and conserve 
        the Nation's natural resources in response to the threats of 
        climate change and ocean acidification.

SEC. 472. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION POLICY.

    It is the policy of the Federal Government, in cooperation with 
State and local governments, Indian tribes, and other interested 
stakeholders to use all practicable means and measures to protect, 
restore, and conserve natural resources to enable them to become more 
resilient, adapt to, and withstand the impacts of climate change and 
ocean acidification.

SEC. 473. DEFINITIONS.

    In this subpart:
            (1) Coastal state.--The term ``coastal State'' has the 
        meaning given the term in section 304 of the Coastal Zone 
        Management Act of 1972 (16 U.S.C. 1453).
            (2) Corridors.--The term ``corridors'' means areas that 
        provide connectivity, over different time scales (including 
        seasonal or longer), of habitat or potential habitat and that 
        facilitate the ability of terrestrial, marine, estuarine, and 
        freshwater fish, wildlife, or plants to move within a landscape 
        as needed for migration, gene flow, or dispersal, or in 
        response to the impacts of climate change and ocean 
        acidification or other impacts.
            (3) Ecological processes.--The term ``ecological 
        processes'' means biological, chemical, or physical interaction 
        between the biotic and abiotic components of an ecosystem and 
        includes--
                    (A) nutrient cycling;
                    (B) pollination;
                    (C) predator-prey relationships;
                    (D) soil formation;
                    (E) gene flow;
                    (F) disease epizootiology;
                    (G) larval dispersal and settlement;
                    (H) hydrological cycling;
                    (I) decomposition; and
                    (J) disturbance regimes such as fire and flooding.
            (4) Habitat.--The term ``habitat'' means the physical, 
        chemical, and biological properties that are used by fish, 
        wildlife, or plants for growth, reproduction, survival, food, 
        water, and cover, on a tract of land, in a body of water, or in 
        an area or region.
            (5) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).
            (6) Natural resources.--The term ``natural resources'' 
        means the terrestrial, freshwater, estuarine, and marine fish, 
        wildlife, plants, land, water, habitats, and ecosystems of the 
        United States.
            (7) Natural resources adaptation.--The term ``natural 
        resources adaptation'' means the protection, restoration, and 
        conservation of natural resources to enable them to become more 
        resilient, adapt to, and withstand the impacts of climate 
        change and ocean acidification.
            (8) Resilience.--Each of the terms ``resilience'' and 
        ``resilient'' means the ability to resist or recover from 
        disturbance and preserve diversity, productivity, and 
        sustainability.
            (9) State.--The term ``State'' means--
                    (A) a State of the United States;
                    (B) the District of Columbia; and
                    (C) the Commonwealth of Puerto Rico, Guam, the 
                United States Virgin Islands, the Northern Mariana 
                Islands, and American Samoa.

SEC. 474. COUNCIL ON ENVIRONMENTAL QUALITY.

    The Chair of the Council on Environmental Quality shall--
            (1) advise the President on implementation and development 
        of--
                    (A) a Natural Resources Climate Change Adaptation 
                Strategy required under section 476; and
                    (B) Federal natural resource agency adaptation 
                plans required under section 478;
            (2) serve as the Chair of the Natural Resources Climate 
        Change Adaptation Panel established under section 475; and
            (3) coordinate Federal agency strategies, plans, programs, 
        and activities related to protecting, restoring, and 
        maintaining natural resources to become more resilient, adapt 
        to, and withstand the impacts of climate change and ocean 
        acidification.

SEC. 475. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION PANEL.

    (a) Establishment.--Not later than 90 days after the date of the 
enactment of this subpart, the President shall establish a Natural 
Resources Climate Change Adaptation Panel, consisting of--
            (1) the head, or their designee, of each of--
                    (A) the National Oceanic and Atmospheric 
                Administration;
                    (B) the Forest Service;
                    (C) the National Park Service;
                    (D) the United States Fish and Wildlife Service;
                    (E) the Bureau of Land Management;
                    (F) the United States Geological Survey;
                    (G) the Bureau of Reclamation;
                    (H) the Bureau of Indian Affairs;
                    (I) the Environmental Protection Agency; and
                    (J) the Army Corps of Engineers;
            (2) the Chair of the Council on Environmental Quality; and
            (3) the heads of such other Federal agencies or departments 
        with jurisdiction over natural resources of the United States, 
        as determined by the President.
    (b) Functions.--The Panel shall serve as a forum for interagency 
consultation on and the coordination of the development and 
implementation of a national Natural Resources Climate Change 
Adaptation Strategy required under section 476.
    (c) Chair.--The Chair of the Council on Environmental Quality shall 
serve as the Chair of the Panel.

SEC. 476. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION STRATEGY.

    (a) In General.--Not later than one year after the date of the 
enactment of this subpart, the President, through the Natural Resources 
Climate Change Adaptation Panel established under section 475, shall 
develop a Natural Resources Climate Change Adaptation Strategy to 
protect, restore, and conserve natural resources to enable them to 
become more resilient, adapt to, and withstand the impacts of climate 
change and ocean acidification and to identify opportunities to 
mitigate those impacts.
    (b) Development and Revision.--In developing and revising the 
Strategy, the Panel shall--
            (1) base the strategy on the best available science;
            (2) develop the strategy in close cooperation with States 
        and Indian tribes;
            (3) coordinate with other Federal agencies as appropriate;
            (4) consult with local governments, conservation 
        organizations, scientists, and other interested stakeholders;
            (5) provide public notice and opportunity for comment; and
            (6) review and revise the Strategy every 5 years to 
        incorporate new information regarding the impacts of climate 
        change and ocean acidification on natural resources and 
        advances in the development of strategies for becoming more 
        resilient and adapting to those impacts.
    (c) Contents.--The National Resources Adaptation Strategy shall 
include--
            (1) an assessment of the vulnerability of natural resources 
        to climate change and ocean acidification, including the short-
        term, medium-term, long-term, cumulative, and synergistic 
        impacts;
            (2) a description of current research, observation, and 
        monitoring activities at the Federal, State, tribal, and local 
        level related to the impacts of climate change and ocean 
        acidification on natural resources, as well as identification 
        of research and data needs and priorities;
            (3) identification of natural resources that are likely to 
        have the greatest need for protection, restoration, and 
        conservation because of the adverse effects of climate change 
        and ocean acidification;
            (4) specific protocols for integrating climate change and 
        ocean acidification adaptation strategies and activities into 
        the conservation and management of natural resources by Federal 
        departments and agencies to ensure consistency across agency 
        jurisdictions and resources;
            (5) specific actions that Federal departments and agencies 
        shall take to protect, conserve, and restore natural resources 
        to become more resilient, adapt to, and withstand the impacts 
        of climate change and ocean acidification, including a timeline 
        to implement those actions;
            (6) specific mechanisms for ensuring communication and 
        coordination among Federal departments and agencies, and 
        between Federal departments and agencies and State natural 
        resource agencies, United States territories, Indian tribes, 
        private landowners, conservation organizations, and other 
        nations that share jurisdiction over natural resources with the 
        United States;
            (7) specific actions to develop and implement consistent 
        natural resources inventory and monitoring protocols through 
        interagency coordination and collaboration; and
            (8) a process for guiding the development of detailed 
        agency- and department-specific adaptation plans required under 
        section 478 to address the impacts of climate change and ocean 
        acidification on the natural resources in the jurisdiction of 
        each agency.
    (d) Implementation.--Consistent with its authorities under other 
laws and with Federal trust responsibilities with respect to Indian 
lands, each Federal department or agency with representation on the 
National Resources Climate Change Adaptation Panel shall consider the 
impacts of climate change and ocean acidification and integrate the 
elements of the strategy into agency plans, environmental reviews, 
programs, and activities related to the conservation, restoration, and 
management of natural resources.

SEC. 477. NATURAL RESOURCES ADAPTATION SCIENCE AND INFORMATION.

    (a) Coordination.--Not later than 90 days after the date of the 
enactment of this subpart, the Secretary of Commerce, acting through 
the Administrator of the National Oceanic and Atmospheric 
Administration, and the Secretary of the Interior, acting through the 
Director of the United States Geological Survey, shall establish a 
coordinated process for developing and providing science and 
information needed to assess and address the impacts of climate change 
and ocean acidification on natural resources. The process shall be led 
by the National Climate Change and Wildlife Science Center established 
within the United States Geological Survey under subsection (d) and the 
National Climate Service of the National Oceanic and Atmospheric 
Administration.
    (b) Functions.--The Secretaries shall ensure that such process 
avoids duplication and that the National Oceanic and Atmospheric 
Administration and the United States Geological Survey shall--
            (1) provide technical assistance to Federal departments and 
        agencies, State and local governments, Indian tribes, and 
        interested private landowners in their efforts to assess and 
        address the impacts of climate change and ocean acidification 
        on natural resources;
            (2) conduct and sponsor research and provide Federal 
        departments and agencies, State and local governments, Indian 
        tribes, and interested private landowners with research 
        products, decision and monitoring tools and information, to 
        develop strategies for assisting natural resources to become 
        more resilient, adapt to, and withstand the impacts of climate 
        change and ocean acidification; and
            (3) assist Federal departments and agencies in the 
        development of the adaptation plans required under section 478.
    (c) Survey.--Not later than one year after the date of enactment of 
this subpart and every 5 years thereafter, the Secretary of Commerce 
and the Secretary of the Interior shall undertake a climate change and 
ocean acidification impact survey that--
            (1) identifies natural resources considered likely to be 
        adversely affected by climate change and ocean acidification;
            (2) includes baseline monitoring and ongoing trend 
        analysis;
            (3) uses a stakeholder process to identify and prioritize 
        needed monitoring and research that is of greatest relevance to 
        the ongoing needs of natural resource managers to address the 
        impacts of climate change and ocean acidification; and
            (4) identifies decision tools necessary to develop 
        strategies for assisting natural resources to become more 
        resilient and adapt to and withstand the impacts of climate 
        change and ocean acidification.
    (d) National Climate Change and Wildlife Science Center.--
            (1) Establishment.--The Secretary of the Interior shall 
        establish the National Climate Change and Wildlife Science 
        Center within the United States Geological Survey.
            (2) Functions.--The Center shall, in collaboration with 
        Federal and State natural resources agencies and departments, 
        Indian tribes, universities, and other partner organizations--
                    (A) assess and synthesize current physical and 
                biological knowledge and prioritize scientific gaps in 
                such knowledge in order to forecast the ecological 
                impacts of climate change on fish and wildlife at the 
                ecosystem, habitat, community, population, and species 
                levels;
                    (B) develop and improve tools to identify, 
                evaluate, and, where appropriate, link scientific 
                approaches and models for forecasting the impacts of 
                climate change and adaptation on fish, wildlife, 
                plants, and their habitats, including monitoring, 
                predictive models, vulnerability analyses, risk 
                assessments, and decision support systems to help 
                managers make informed decisions;
                    (C) develop and evaluate tools to adaptively manage 
                and monitor the effects of climate change on fish and 
                wildlife at national, regional, and local scales; and
                    (D) develop capacities for sharing standardized 
                data and the synthesis of such data.
    (e) Science Advisory Board.--
            (1) Establishment.--Not later than 180 days after the date 
        of enactment of this subpart, the Secretary of Commerce and the 
        Secretary of the Interior shall establish and appoint the 
        members of a Science Advisory Board, to be comprised of not 
        fewer than 10 and not more than 20 members--
                    (A) who have expertise in fish, wildlife, plant, 
                aquatic, and coastal and marine biology, ecology, 
                climate change, ocean acidification, and other relevant 
                scientific disciplines;
                    (B) who represent a balanced membership among 
                Federal, State, Indian tribes, and local 
                representatives, universities, and conservation 
                organizations; and
                    (C) at least \1/2\ of whom are recommended by the 
                President of the National Academy of Sciences.
            (2) Duties.--The Science Advisory Board shall--
                    (A) advise the Secretaries on the state-of-the-
                science regarding the impacts of climate change and 
                ocean acidification on natural resources and scientific 
                strategies and mechanisms for protecting, restoring, 
                and conserving natural resources to enable them to 
                become more resilient, adapt to, and withstand the 
                impacts of climate change and ocean acidification; and
                    (B) identify and recommend priorities for ongoing 
                research needs on such issues.
            (3) Collaboration.--The Science Advisory Board shall 
        collaborate with other climate change and ecosystem research 
        entities in other Federal agencies and departments.
            (4) Availability to the public.--The advice and 
        recommendations of the Science Advisory Board shall be made 
        available to the public.

SEC. 478. FEDERAL NATURAL RESOURCE AGENCY ADAPTATION PLANS.

    (a) Development.--Not later than 1 year after the date of the 
development of a Natural Resources Climate Change Adaptation Strategy 
under section 476, each department or agency that has a representative 
on the Natural Resources Climate Change Adaptation Panel established 
under section 475 shall--
            (1) complete an adaptation plan for that department or 
        agency, respectively, implementing the Natural Resources 
        Climate Change Adaptation Strategy under section 476 and 
        consistent with the Natural Resources Climate Change Adaptation 
        Policy under section 472, detailing the department's or 
        agency's current and projected efforts to address the potential 
        impacts of climate change and ocean acidification on natural 
        resources within the department's or agency's jurisdiction and 
        necessary additional actions, including a timeline for 
        implementation of those actions;
            (2) provide opportunities for review and comment on that 
        adaptation plan by the public, including in the case of a plan 
        by the Bureau of Indian Affairs, review by Indian tribes; and
            (3) submit such plan to the President for approval.
    (b) Review by President and Submission to Congress.--
            (1) Review by president.--The President shall--
                    (A) approve an adaptation plan submitted under 
                subsection (a)(3) if the plan meets the requirements of 
                subsection (c) and is consistent with the strategy 
                developed under section 476;
                    (B) decide whether to approve the plan within 60 
                days after submission; and
                    (C) if the President disapproves a plan, direct the 
                department or agency to submit a revised plan to the 
                President under subsection (a)(3) within 60 days after 
                such disapproval.
            (2) Submission to congress.--Not later than 30 days after 
        the date of approval of such adaptation plan by the President, 
        the department or agency shall submit the approved plan to the 
        Committee on Natural Resources of the House of Representatives, 
        the Committee on Energy and Natural Resources of the Senate, 
        and the committees of the House of Representatives and the 
        Senate with principal jurisdiction over the department or 
        agency.
    (c) Requirements.--Each adaptation plan shall--
            (1) establish programs for assessing the current and future 
        impacts of climate change and ocean acidification on natural 
        resources within the department's or agency's, respectively, 
        jurisdiction, including cumulative and synergistic effects, and 
        for identifying and monitoring those natural resources that are 
        likely to be adversely affected and that have need for 
        conservation;
            (2) identify and prioritize the department's or agency's 
        strategies and specific conservation actions to address the 
        current and future impacts of climate change and ocean 
        acidification on natural resources within the scope of the 
        department's or agency's jurisdiction and to develop and 
        implement strategies to protect, restore, and conserve such 
        resources to become more resilient, adapt to, and better 
        withstand those impacts, including--
                    (A) the protection, restoration, and conservation 
                of terrestrial, marine, estuarine, and freshwater 
                habitats and ecosystems;
                    (B) the establishment of terrestrial, marine, 
                estuarine, and freshwater habitat linkages and 
                corridors;
                    (C) the restoration and conservation of ecological 
                processes;
                    (D) the protection of a broad diversity of native 
                species of fish, wildlife, and plant populations across 
                their range; and
                    (E) the protection of fish, wildlife, and plant 
                health, recognizing that climate can alter the 
                distribution and ecology of parasites, pathogens, and 
                vectors;
            (3) describe how the department or agency will integrate 
        such strategies and conservation activities into plans, 
        programs, activities, and actions of the department or agency, 
        related to the conservation and management of natural resources 
        and establish new plans, programs, activities, and actions as 
        necessary;
            (4) establish methods for assessing the effectiveness of 
        strategies and conservation actions taken to protect, restore, 
        and conserve natural resources to enable them to become more 
        resilient, adapt to, and withstand the impacts of climate 
        change and ocean acidification, and for updating those 
        strategies and actions to respond to new information and 
        changing conditions;
            (5) include a description of current and proposed 
        mechanisms to enhance cooperation and coordination of natural 
        resources adaptation efforts with other Federal agencies, State 
        and local governments, Indian tribes, and nongovernmental 
        stakeholders;
            (6) include specific written guidance to resource managers 
        to--
                    (A) explain how managers are expected to address 
                the effects of climate change and ocean acidification;
                    (B) identify how managers are to obtain any site-
                specific information that may be necessary; and
                    (C) reflect best practices shared among relevant 
                agencies, while also recognizing the unique missions, 
                objectives, and responsibilities of each agency; and
            (7) identify and assess data and information gaps necessary 
        to develop natural resources adaptation plans and strategies.
    (d) Implementation.--
            (1) In general.--Upon approval by the President, each 
        department or agency that serves on the Natural Resources 
        Climate Change Adaptation Panel shall implement its adaptation 
        plan through existing and new plans, policies, programs, 
        activities, and actions to the extent not inconsistent with 
        existing authority.
            (2) Consideration of impacts.--
                    (A) In general.--To the maximum extent practicable 
                and consistent with applicable law, every natural 
                resource management decision made by the department or 
                agency shall consider the impacts of climate change and 
                ocean acidification on those natural resources.
                    (B) Guidance.--The Council on Environmental Quality 
                shall issue guidance for Federal departments and 
                agencies for considering those impacts.
    (e) Revision and Review.--Not less than every 5 years, each 
adaptation plan under this section shall be reviewed and revised to 
incorporate the best available science and other information regarding 
the impacts of climate change and ocean acidification on natural 
resources.

SEC. 479. STATE NATURAL RESOURCES ADAPTATION PLANS.

    (a) Requirement.--In order to be eligible for funds under section 
480, not later than 1 year after the development of a Natural Resources 
Climate Change Adaptation Strategy required under section 476 each 
State shall prepare a State natural resources adaptation plan detailing 
the State's current and projected efforts to address the potential 
impacts of climate change and ocean acidification on natural resources 
and coastal areas within the State's jurisdiction.
    (b) Review or Approval.--
            (1) In general.--Each State adaptation plan shall be 
        reviewed and approved or disapproved by the Secretary of the 
        Interior and, as applicable, the Secretary of Commerce. Such 
        approval shall be granted if the plan meets the requirements of 
        subsection (c) and is consistent with the Natural Resources 
        Climate Change Adaptation Strategy required under section 476.
            (2) Approval or disapproval.--Within 180 days after 
        transmittal of such a plan, or a revision to such a plan, the 
        Secretary of the Interior and, as applicable, the Secretary of 
        Commerce shall approve or disapprove the plan by written 
        notice.
            (3) Resubmittal.--Within 90 days after transmittal of a 
        resubmitted adaptation plan as a result of disapproval under 
        paragraph (3), the Secretary of the Interior and, as 
        applicable, the Secretary of Commerce, shall approve or 
        disapprove the plan by written notice.
    (c) Contents.--A State natural resources adaptation plan shall--
            (1) include a strategy for addressing the impacts of 
        climate change and ocean acidification on terrestrial, marine, 
        estuarine, and freshwater fish, wildlife, plants, habitats, 
        ecosystems, wildlife health, and ecological processes, that--
                    (A) describes the impacts of climate change and 
                ocean acidification on the diversity and health of the 
                fish, wildlife and plant populations, habitats, 
                ecosystems, and associated ecological processes;
                    (B) establishes programs for monitoring the impacts 
                of climate change and ocean acidification on fish, 
                wildlife, and plant populations, habitats, ecosystems, 
                and associated ecological processes;
                    (C) describes and prioritizes proposed conservation 
                actions to assist fish, wildlife, plant populations, 
                habitats, ecosystems, and associated ecological 
                processes in becoming more resilient, adapting to, and 
                better withstanding those impacts;
                    (D) includes strategies, specific conservation 
                actions, and a time frame for implementing conservation 
                actions for fish, wildlife, and plant populations, 
                habitats, ecosystems, and associated ecological 
                processes;
                    (E) establishes methods for assessing the 
                effectiveness of strategies and conservation actions 
                taken to assist fish, wildlife, and plant populations, 
                habitats, ecosystems, and associated ecological 
                processes in becoming more resilient, adapt to, and 
                better withstand the impacts of climate changes and 
                ocean acidification and for updating those strategies 
                and actions to respond appropriately to new information 
                or changing conditions;
                    (F) is incorporated into a revision of the State 
                wildlife action plan (also known as the State 
                comprehensive wildlife strategy)--
                            (i) that has been submitted to the United 
                        States Fish and Wildlife Service; and
                            (ii) that has been approved by the Service 
                        or on which a decision on approval is pending; 
                        and
                    (G) is developed--
                            (i) with the participation of the State 
                        fish and wildlife agency, the State coastal 
                        agency, the State agency responsible for 
                        administration of Land and Water Conservation 
                        Fund grants, the State Forest Legacy program 
                        coordinator, and other State agencies 
                        considered appropriate by the Governor of such 
                        State; and
                            (ii) in coordination with the Secretary of 
                        the Interior, and where applicable, the 
                        Secretary of Commerce and other States that 
                        share jurisdiction over natural resources with 
                        the State; and
            (2) include, in the case of a coastal State, a strategy for 
        addressing the impacts of climate change and ocean 
        acidification on the coastal zone that--
                    (A) identifies natural resources that are likely to 
                be impacted by climate change and ocean acidification 
                and describes those impacts;
                    (B) identifies and prioritizes continuing research 
                and data collection needed to address those impacts 
                including--
                            (i) acquisition of high resolution coastal 
                        elevation and nearshore bathymetry data;
                            (ii) historic shoreline position maps, 
                        erosion rates, and inventories of shoreline 
                        features and structures;
                            (iii) measures and models of relative rates 
                        of sea level rise or lake level changes, 
                        including effects on flooding, storm surge, 
                        inundation, and coastal geological processes;
                            (iv) habitat loss, including projected 
                        losses of coastal wetlands and potentials for 
                        inland migration of natural shoreline habitats;
                            (v) ocean and coastal species and ecosystem 
                        migrations, and changes in species population 
                        dynamics;
                            (vi) changes in storm frequency, intensity, 
                        or rainfall patterns;
                            (vii) saltwater intrusion into coastal 
                        rivers and aquifers;
                            (viii) changes in chemical or physical 
                        characteristics of marine and estuarine 
                        systems;
                            (ix) increased harmful algal blooms; and
                            (x) spread of invasive species;
                    (C) identifies and prioritizes adaptation 
                strategies to protect, restore, and conserve natural 
                resources to enable them to become more resilient, 
                adapt to, and withstand the impacts of climate change 
                and ocean acidification, including--
                            (i) protection, maintenance, and 
                        restoration of ecologically important coastal 
                        lands, coastal and ocean ecosystems, and 
                        species biodiversity and the establishment of 
                        habitat buffer zones, migration corridors, and 
                        climate refugia; and
                            (ii) improved planning, siting policies, 
                        and hazard mitigation strategies;
                    (D) establishes programs for the long-term 
                monitoring of the impacts of climate change and ocean 
                acidification on the ocean and coastal zone and to 
                assess and adjust, when necessary, such adaptive 
                management strategies;
                    (E) establishes performance measures for assessing 
                the effectiveness of adaptation strategies intended to 
                improve resilience and the ability of natural resources 
                in the coastal zone to adapt to and withstand the 
                impacts of climate change and ocean acidification and 
                of adaptation strategies intended to minimize those 
                impacts on the coastal zone and to update those 
                strategies to respond to new information or changing 
                conditions; and
                    (F) is developed with the participation of the 
                State coastal agency and other appropriate State 
                agencies and in coordination with the Secretary of 
                Commerce and other appropriate Federal agencies.
    (d) Public Input.--States shall provide for solicitation and 
consideration of public and independent scientific input in the 
development of their plans.
    (e) Coordination With Other Plans.--The State plan shall take into 
consideration research and information contained in, and coordinate 
with and integrate the goals and measures identified in, as 
appropriate, other natural resources conservation strategies, 
including--
            (1) the national fish habitat action plan;
            (2) plans under the North American Wetlands Conservation 
        Act (16 U.S.C. 4401 et seq.);
            (3) the Federal, State, and local partnership known as 
        ``Partners in Flight'';
            (4) federally approved coastal zone management plans under 
        the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et 
        seq.);
            (5) federally approved regional fishery management plants 
        and habitat conservation activities under the Magnuson-Stevens 
        Fishery Conservation and Management Act (16 U.S.C. 1801 et 
        seq.);
            (6) the national coral reef action plan;
            (7) recovery plans for threatened species and endangered 
        species under section 4(f) of the Endangered Species Act of 
        1973 (16 U.S.C. 1533(f));
            (8) habitat conservation plans under section 10 of that Act 
        (16 U.S.C. 1539);
            (9) other Federal, State, and tribal plans for imperiled 
        species;
            (10) State or tribal hazard mitigation plans;
            (11) State or tribal water management plans; and
            (12) other State-based strategies that comprehensively 
        implement adaptation activities to remediate the effects of 
        climate change and ocean acidification on terrestrial, marine, 
        and freshwater fish, wildlife, plants, and other natural 
        resources.
    (f) Updating.--Each State plan shall be updated not less than every 
5 years.
    (g) Funding.--
            (1) In general.--Funds allocated to States under section 
        480 shall be used only for activities that are consistent with 
        a State natural resources adaptation plan that has been 
        approved by the Secretaries of Interior and Commerce.
            (2) Funding prior to the approval of a state plan.--Until 
        the earlier of the date that is 3 years after the date of the 
        enactment of this subpart or the date on which a State receives 
        approval for the State strategy, a State shall be eligible to 
        receive funding under section 480 for adaptation activities 
        that are--
                    (A) consistent with the comprehensive wildlife 
                strategy of the State and, where appropriate, other 
                natural resources conservation strategies; and
                    (B) in accordance with a workplan developed in 
                coordination with--
                            (i) the Secretary of the Interior; and
                            (ii) the Secretary of Commerce, for any 
                        coastal State subject to the condition that 
                        coordination with the Secretary of Commerce 
                        shall be required only for those portions of 
                        the strategy relating to activities affecting 
                        the coastal zone.
            (3) Pending approval.--During the period for which approval 
        by the applicable Secretary of a State plan is pending, the 
        State may continue receiving funds under section 480 pursuant 
        to the workplan described in paragraph (2)(B).

SEC. 480. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION FUND.

    (a) Establishment of Fund.--There is hereby established in the 
Treasury a separate account that shall be known as the Natural 
Resources Climate Change Adaptation Account.
    (b) Availability of Amounts.--All amounts deposited into the 
Natural Resources Climate Change Adaptation Fund shall be available 
without further appropriation or fiscal year limitation.
    (c) Allocations.--
            (1) States.--38.5 percent of the amounts made available for 
        each fiscal year to carry out this subpart shall be provided to 
        States to carry out natural resources adaptation activities in 
        accordance with State natural resources adaptation plans 
        approved under section 479. Specifically--
                    (A) 32.5 percent shall be available to State 
                wildlife agencies in accordance with the apportionment 
                formula established under the second subsection (c) of 
                section 4 of the Pittman-Robertson Wildlife Restoration 
                Act (16 U.S.C. 669c), as added by section 902(e) of 
                H.R. 5548 as introduced in the 106th Congress and 
                enacted into law by section 1(a)(2) of Public Law 106-
                553 (114 Stat. 2762A-119); and
                    (B) 6 percent shall be available to State coastal 
                agencies pursuant to the formula established by the 
                Secretary of Commerce under section 306(c) of the 
                Coastal Management Act of 1972 (16 U.S.C. 1455(c)).
            (2) Department of the interior.--Of the amounts made 
        available for each fiscal year to carry out this subpart--
                    (A) 17 percent shall be allocated to the Secretary 
                of the Interior for use in funding--
                            (i) natural resources adaptation activities 
                        carried out--
                                    (I) under endangered species, 
                                migratory species, and other fish and 
                                wildlife programs administered by the 
                                National Park Service, the United 
                                States Fish and Wildlife Service, the 
                                Bureau of Indian Affairs, and the 
                                Bureau of Land Management;
                                    (II) on wildlife refuges, National 
                                Park Service land, and other public 
                                land under the jurisdiction of the 
                                United States Fish and Wildlife 
                                Service, the Bureau of Land Management, 
                                the Bureau of Indian Affairs, or the 
                                National Park Service; or
                                    (III) within Federal water managed 
                                by the Bureau of Reclamation and the 
                                National Park Service; and
                            (ii) for the implementation of the National 
                        Fish and Wildlife Habitat and Corridors 
                        Identification Program pursuant to section 481;
                    (B) 5 percent shall be allocated to the Secretary 
                of the Interior for natural resources adaptation 
                activities carried out under cooperative grant 
                programs, including--
                            (i) the cooperative endangered species 
                        conservation fund authorized under section 6 of 
                        the Endangered Species Act of 1973 (16 U.S.C. 
                        1535);
                            (ii) programs under the North American 
                        Wetlands Conservation Act (16 U.S.C. 4401 et 
                        seq.);
                            (iii) the Neotropical Migratory Bird 
                        Conservation Fund established by section 478(a) 
                        of the Neotropical Migratory Bird Conservation 
                        Act (16 U.S.C. 6108(a));
                            (iv) the Coastal Program of the United 
                        States Fish and Wildlife Service;
                            (v) the National Fish Habitat Action Plan;
                            (vi) the Partners for Fish and Wildlife 
                        Program;
                            (vii) the Landowner Incentive Program;
                            (viii) the Wildlife Without Borders Program 
                        of the United States Fish and Wildlife Service; 
                        and
                            (ix) the Migratory Species Program and Park 
                        Flight Migratory Bird Program of the National 
                        Park Service; and
                    (C) 3 percent shall be allocated to the Secretary 
                of the Interior to provide financial assistance to 
                Indian tribes to carry out natural resources adaptation 
                activities through the Tribal Wildlife Grants Program 
                of the United States Fish and Wildlife Service.
            (3) Land and water conservation fund.--
                    (A) Deposits.--
                            (i) In general.--Of the amounts made 
                        available for each fiscal year to carry out 
                        this subpart, 12 percent shall be deposited 
                        into the Land and Water Conservation Fund 
                        established under section 2 of the Land and 
                        Water Conservation Fund Act of 1965 (16 U.S.C. 
                        460l-5).
                            (ii) Use of deposits.--Deposits into the 
                        Land and Water Conservation Fund under this 
                        paragraph shall--
                                    (I) be supplemental to 
                                authorizations provided under section 3 
                                of the Land and Water Conservation Fund 
                                Act of 1965 (16 U.S.C. 460l-6), which 
                                shall remain available for 
                                nonadaptation needs; and
                                    (II) be available for expenditure 
                                to carry out this subpart without 
                                further appropriation or fiscal year 
                                limitation.
                    (B) Allocations.--Of the amounts deposited under 
                this paragraph into the Land and Water Conservation 
                Fund--
                            (i) \1/6\ shall be allocated to the 
                        Secretary of the Interior and made available on 
                        a competitive basis to carry out natural 
                        resources adaptation activities through the 
                        acquisition of land and interests in land under 
                        section 6 of the Land and Water Conservation 
                        Fund Act of 1965 (16 U.S.C. 460l-8)--
                                    (I) to States in accordance with 
                                their natural resources adaptation 
                                plans, and to Indian tribes;
                                    (II) notwithstanding section 5 of 
                                that Act (16 U.S.C. 460l-7); and
                                    (III) in addition to any funds 
                                provided pursuant to annual 
                                appropriations Acts, the Energy Policy 
                                Act of 2005 (42 U.S.C. 15801 et seq.), 
                                or any other authorization for 
                                nonadaptation needs;
                            (ii) \1/3\ shall be allocated to the 
                        Secretary of the Interior to carry out natural 
                        resources adaptation activities through the 
                        acquisition of lands and interests in land 
                        under section 7 of the Land and Water 
                        Conservation Fund Act of 1965 (16 U.S.C. 460l-
                        9);
                            (iii) \1/6\ shall be allocated to the 
                        Secretary of Agriculture and made available to 
                        the States and Indian tribes to carry out 
                        natural resources adaptation activities through 
                        the acquisition of land and interests in land 
                        under section 7 of the Forest Legacy Program 
                        under the Cooperative Forestry Assistance Act 
                        of 1978 (16 U.S.C. 2103c); and
                            (iv) \1/3\ shall be allocated to the 
                        Secretary of Agriculture to carry out natural 
                        resources adaptation activities through the 
                        acquisition of land and interests in land under 
                        section 7 of the Land and Water Conservation 
                        Fund Act of 1965 (16 U.S.C. 460l-9).
                    (C) Expenditure of funds.--In allocating funds 
                under subparagraph (B), the Secretary of the Interior 
                and the Secretary of Agriculture shall take into 
                consideration factors including--
                            (i) the availability of non-Federal 
                        contributions from State, local, or private 
                        sources;
                            (ii) opportunities to protect fish and 
                        wildlife corridors or otherwise to link or 
                        consolidate fragmented habitats;
                            (iii) opportunities to reduce the risk of 
                        catastrophic wildfires, drought, extreme 
                        flooding, or other climate-related events that 
                        are harmful to fish and wildlife and people; 
                        and
                            (iv) the potential for conservation of 
                        species or habitat types at serious risk due to 
                        climate change, ocean acidification, and other 
                        stressors.
            (4) Forest service.--Of the amounts made available for each 
        fiscal year to carry out this subpart, 5 percent shall be 
        allocated to the Secretary of Agriculture for use in funding 
        natural resources adaptation activities carried out on national 
        forests and national grasslands under the jurisdiction of the 
        Forest Service.
            (5) Department of commerce.--Of the amounts made available 
        for each fiscal year to carry out this subpart, 7 percent shall 
        be allocated to the Secretary of Commerce for use in funding 
        natural resources adaptation activities to protect, maintain, 
        and restore coastal, estuarine, and marine resources, habitats, 
        and ecosystems, including such activities carried out under--
                    (A) the coastal and estuarine land conservation 
                program;
                    (B) the community-based restoration program;
                    (C) the Coastal Zone Management Act of 1972 (16 
                U.S.C. 1451 et seq.), that are specifically designed to 
                strengthen the ability of coastal, estuarine, and 
                marine resources, habitats, and ecosystems to adapt to 
                and withstand the impacts of climate change and ocean 
                acidification;
                    (D) the Open Rivers Initiative;
                    (E) the Magnuson-Stevens Fishery Conservation and 
                Management Act (16 U.S.C. 1801 et seq.);
                    (F) the Marine Mammal Protection Act of 1972 (16 
                U.S.C. 1361 et seq.);
                    (G) the Endangered Species Act of 1973 (16 U.S.C. 
                1531 et seq.);
                    (H) the Marine Protection, Research, and 
                Sanctuaries Act of 1972 (33 U.S.C. 1401 et seq.);
                    (I) the Coral Reef Conservation Act of 2000 (16 
                U.S.C. 6401 et seq.); and
                    (J) the Estuary Restoration Act of 2000 (33 U.S.C. 
                2901 et seq.).
            (6) Environmental protection agency.--Of the amounts made 
        available each fiscal year to carry out this section, 7.5 
        percent shall be allocated to the Administrator for use in 
        natural resources adaptation activities restoring and 
        protecting--
                    (A) large-scale freshwater aquatic ecosystems, such 
                as the Everglades, the Great Lakes, Flathead Lake, the 
                Missouri River, the Mississippi River, the Colorado 
                River, the Sacramento-San Joaquin Rivers, the Ohio 
                River, the Columbia-Snake River System, the 
                Apalachicola, Chattahoochee, and Flint River System, 
                the Connecticut River, and the Yellowstone River;
                    (B) large-scale estuarine ecosystems, such as 
                Chesapeake Bay, Long Island Sound, Puget Sound, the 
                Mississippi River Delta, the San Francisco Bay Delta, 
                Narragansett Bay, and Albemarle-Pamlico Sound; and
                    (C) freshwater and estuarine ecosystems, 
                watersheds, and basins identified as priorities by the 
                Administrator, working in cooperation with other 
                Federal agencies, States, Indian tribes, local 
                governments, scientists, and other conservation 
                partners.
            (7) Corps of engineers.--Of the amounts made available each 
        fiscal year to carry out this section, 5 percent shall be 
        available to the Secretary of the Army for use by the Corps of 
        Engineers to carry out natural resources adaptation activities 
        restoring--
                    (A) large-scale freshwater aquatic ecosystems, such 
                as the ecosystems described in paragraph (6)(A);
                    (B) large-scale estuarine ecosystems, such as the 
                ecosystems described in paragraph (6)(B);
                    (C) freshwater and estuarine ecosystems, 
                watersheds, and basins identified as priorities by the 
                Corps of Engineers, working in cooperation with other 
                Federal agencies, States, Indian tribes, local 
                governments, scientists, and other conservation 
                partners; and
                    (D) habitats and ecosystems through the 
                implementation of estuary habitat restoration projects 
                authorized by the Estuary Restoration Act of 2000 (33 
                U.S.C. 2901 et seq.), project modifications for 
                improvement of the environment, aquatic restoration and 
                protection projects authorized by section 206 of the 
                Water Resources Development Act of 1996 (33 U.S.C. 
                2330), and other appropriate programs and activities.
    (d) Use of Funds by Federal Departments and Agencies.--Funds 
allocated to Federal departments and agencies under this section shall 
only be used for natural resources adaptation activities that are 
consistent with an adaptation plan developed and approved by the 
President under section 478.
    (e) State Cost Sharing.--Notwithstanding any other provision of 
law, a State that receives a grant with amounts allocated under this 
section shall use funds from non-Federal sources to pay 10 percent of 
the costs of each activity carried out using amounts provided under the 
grant.

SEC. 481. NATIONAL WILDLIFE HABITAT AND CORRIDORS INFORMATION PROGRAM.

    (a) Establishment.--Within 6 months of the date of enactment of 
this subpart, the Secretary of the Interior, in cooperation with the 
States and Indian tribes, shall establish a National Fish and Wildlife 
Habitat and Corridors Information Program in accordance with the 
requirements of this section.
    (b) Purpose.--The purpose of this program is to--
            (1) support States and Indian tribes in the development of 
        a geographic information system database of fish and wildlife 
        habitat and corridors that would inform planning and 
        development decisions within each State, enable each State to 
        model climate impacts and adaptation, and provide 
        geographically specific enhancements of State wildlife action 
        plans;
            (2) ensure the collaborative development, with the States 
        and Indian tribes, of a comprehensive, national geographic 
        information system database of maps, models, data, surveys, 
        informational products, and other geospatial information 
        regarding fish and wildlife habitat and corridors, that--
                    (A) is based on consistent protocols for sampling 
                and mapping across landscapes that take into account 
                regional differences; and
                    (B) that utilizes--
                            (i) existing and planned State- and tribal-
                        based geographic information system databases; 
                        and
                            (ii) existing databases, analytical tools, 
                        metadata activities, and other information 
                        products available through the National 
                        Biological Information Infrastructure 
                        maintained by the Secretary and nongovernmental 
                        organizations; and
            (3) facilitate the use of such databases by Federal, State, 
        local, and tribal decisionmakers to incorporate qualitative 
        information on fish and wildlife habitat and corridors at the 
        earliest possible stage to--
                    (A) prioritize and target natural resources 
                adaptation strategies and activities;
                    (B) avoid, minimize, and mitigate the impacts on 
                fish and wildlife habitat and corridors in siting 
                energy development, water, transmission, 
                transportation, and other land use projects;
                    (C) assess the impacts of existing development on 
                habitats and corridors; and
                    (D) develop management strategies to enhance the 
                ability of fish, wildlife, and plant species to migrate 
                or respond to shifting habitats within existing 
                habitats and corridors.
    (c) Habitat and Corridors Information System.--
            (1) In general.--The Secretary, in cooperation with the 
        States and Indian tribes, shall develop a Habitat and Corridors 
        Information System.
            (2) Contents.--The System shall--
                    (A) include maps, data, and descriptions of fish 
                and wildlife habitat and corridors, that--
                            (i) have been developed by Federal 
                        agencies, State wildlife agencies and natural 
                        heritage programs, Indian tribes, local 
                        governments, nongovernmental organizations, and 
                        industry; and
                            (ii) meet accepted Geospatial 
                        Interoperability Framework data and metadata 
                        protocols and standards;
                    (B) include maps and descriptions of projected 
                shifts in habitats and corridors of fish and wildlife 
                species in response to climate change;
                    (C) assure data quality and make the data, models, 
                and analyses included in the System available at scales 
                useful to decisionmakers--
                            (i) to prioritize and target natural 
                        resources adaptation strategies and activities;
                            (ii) to assess the impacts of proposed 
                        energy development, water, transmission, 
                        transportation, and other land use projects and 
                        avoid, minimize, and mitigate those impacts on 
                        habitats and corridors;
                            (iii) to assess the impacts of existing 
                        development on habitats and corridors; and
                            (iv) to develop management strategies to 
                        enhance the ability of fish, wildlife, and 
                        plant species to migrate or respond to shifting 
                        habitats within existing habitats and 
                        corridors;
                    (D) establish a process for updating maps and other 
                information as landscapes, habitats, corridors, and 
                wildlife populations change or as other information 
                becomes available;
                    (E) encourage the development of collaborative 
                plans by Federal and State agencies and Indian tribes 
                to monitor and evaluate the efficacy of the System to 
                meet the needs of decisionmakers;
                    (F) identify gaps in habitat and corridor 
                information, mapping, and research that should be 
                addressed to fully understand and assess current data 
                and metadata, and to prioritize research and future 
                data collection activities for use in updating the 
                System and provide support for those activities;
                    (G) include mechanisms to support collaborative 
                research, mapping, and planning of habitats and 
                corridors by Federal and State agencies, Indian tribes, 
                and other interested stakeholders;
                    (H) incorporate biological and geospatial data on 
                species and corridors found in energy development and 
                transmission plans, including renewable energy 
                initiatives, transportation, and other land use plans;
                    (I) be based on the best scientific information 
                available; and
                    (J) identify, prioritize, and describe key parcels 
                of non-Federal land located within the boundaries of 
                units of the National Park System, National Wildlife 
                Refuge System, National Forest System, or National 
                Grassland System that are critical to maintenance of 
                wildlife habitat and migration corridors.
    (d) Financial and Other Support.--The Secretary may provide support 
to the States and Indian tribes, including financial and technical 
assistance, for activities that support the development and 
implementation of the System.
    (e) Coordination.--The Secretary, in cooperation with the States 
and Indian tribes, shall make recommendations on how the information 
developed in the System may be incorporated into existing relevant 
State and Federal plans affecting fish and wildlife, including land 
management plans, the State Comprehensive Wildlife Conservation 
Strategies, and appropriate tribal conservation plans, to ensure that 
they--
            (1) prevent unnecessary habitat fragmentation and 
        disruption of corridors;
            (2) promote the landscape connectivity necessary to allow 
        wildlife to move as necessary to meet biological needs, adjust 
        to shifts in habitat, and adapt to climate change; and
            (3) minimize the impacts of energy, development, water, 
        transportation, and transmission projects and other activities 
        expected to impact habitat and corridors.
    (f) Definitions.--In this section:
            (1) Geospatial interoperability framework.--The term 
        ``Geospatial Interoperability Framework'' means the strategy 
        utilized by the National Biological Information Infrastructure 
        that is based upon accepted standards, specifications, and 
        protocols adopted through the International Standards 
        Organization, the Open Geospatial Consortium, and the Federal 
        Geographic Data Committee, to manage, archive, integrate, 
        analyze, and make accessible geospatial and biological data and 
        metadata.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.

SEC. 482. ADDITIONAL PROVISIONS REGARDING INDIAN TRIBES.

    (a) Federal Trust Responsibility.--Nothing in this subpart is 
intended to amend, alter, or give priority over the Federal trust 
responsibility to Indian tribes.
    (b) Exemption From FOIA.--If a Federal department or agency 
receives any information related to sacred sites or cultural activities 
identified by an Indian tribe as confidential, such information shall 
be exempt from disclosure under section 552 of title 5, United States 
Code, popularly known as the Freedom of Information Act (5 U.S.C. 552).
    (c) Application of Other Law.--The Secretary of the Interior may 
apply the provisions of Public Law 93-638 where appropriate in the 
implementation of this subpart.

        PART 2--INTERNATIONAL CLIMATE CHANGE ADAPTATION PROGRAM

SEC. 491. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) Global climate change is a potentially significant 
        national and global security threat multiplier and is likely to 
        exacerbate competition and conflict over agricultural, 
        vegetative, marine, and water resources and to result in 
        increased displacement of people, poverty, and hunger within 
        developing countries.
            (2) The strategic, social, political, economic, cultural, 
        and environmental consequences of global climate change are 
        likely to have disproportionate adverse impacts on developing 
        countries, which have less economic capacity to respond to such 
        impacts.
            (3) The countries most vulnerable to climate change, due 
        both to greater exposure to harmful impacts and to lower 
        capacity to adapt, are developing countries with very low 
        industrial greenhouse gas emissions that have contributed less 
        to climate change than more affluent countries.
            (4) To a much greater degree than developed countries, 
        developing countries rely on the natural and environmental 
        systems likely to be affected by climate change for sustenance, 
        livelihoods, and economic growth and stability.
            (5) Within developing countries there may be varying 
        climate change adaptation and resilience needs among different 
        communities and populations, including impoverished 
        communities, children, women, and indigenous peoples.
            (6) The consequences of global climate change, including 
        increases in poverty and destabilization of economies and 
        societies, are likely to pose long-term challenges to the 
        national security, foreign policy, and economic interests of 
        the United States.
            (7) It is in the national security, foreign policy, and 
        economic interests of the United States to recognize, plan for, 
        and mitigate the international strategic, social, political, 
        cultural, environmental, health, and economic effects of 
        climate change and to assist developing countries to increase 
        their resilience to those effects.
            (8) Under Article 4 of the United Nations Framework 
        Convention on Climate Change, developed country parties, 
        including the United States, committed to ``assist the 
        developing country parties that are particularly vulnerable to 
        the adverse effects of climate change in meeting costs of 
        adaptation to those adverse effects''.
            (9) Under the Bali Action Plan, developed country parties 
        to the United Nations Framework Convention on Climate Change, 
        including the United States, committed to ``enhanced action on 
        the provision of financial resources and investment to support 
        action on mitigation and adaptation and technology 
        cooperation,'' including, inter alia, consideration of 
        ``improved access to adequate, predictable, and sustainable 
        financial resources and financial and technical support, and 
        the provision of new and additional resources, including 
        official and concessional funding for developing country 
        parties''.
    (b) Purposes.--The purposes of this part are--
            (1) to provide new and additional assistance from the 
        United States to the most vulnerable developing countries, 
        including the most vulnerable communities and populations 
        therein, in order to support the development and implementation 
        of climate change adaptation programs and activities that 
        reduce the vulnerability and increase the resilience of 
        communities to climate change impacts, including impacts on 
        water availability, agricultural productivity, flood risk, 
        coastal resources, timing of seasons, biodiversity, economic 
        livelihoods, health and diseases, and human migration; and
            (2) to provide such assistance in a manner that protects 
        and promotes the national security, foreign policy, 
        environmental, and economic interests of the United States to 
        the extent such interests may be advanced by minimizing, 
        averting, or increasing resilience to climate change impacts.

SEC. 492. DEFINITIONS.

    In this part:
            (1) Allowance.--The term ``allowance'' means an emission 
        allowance established under section 721 of the Clean Air Act.
            (2) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committees on Energy and Commerce, 
                Financial Services, and Foreign Affairs of the House of 
                Representatives; and
                    (B) the Committees on Environment and Public Works 
                and Foreign Relations of the Senate.
            (3) Developing country.--The term ``developing country'' 
        means a country eligible to receive official development 
        assistance according to the income guidelines of the 
        Development Assistance Committee of the Organization for 
        Economic Cooperation and Development.
            (4) Most vulnerable developing countries.--The term ``most 
        vulnerable developing countries'' means, as determined by the 
        Administrator of USAID, developing countries that are at risk 
        of substantial adverse impacts of climate change and have 
        limited capacity to respond to such impacts, considering the 
        approaches included in any international treaties and 
        agreements.
            (5) Most vulnerable communities and populations.--The term 
        ``most vulnerable communities and populations'' means 
        communities and populations that are at risk of substantial 
        adverse impacts of climate change and have limited capacity to 
        respond to such impacts, including impoverished communities, 
        children, women, and indigenous peoples.
            (6) Program.--The term ``Program'' means the International 
        Climate Change Adaptation Program established under section 
        493.
            (7) USAID.--The term ``USAID'' means the United States 
        Agency for International Development.
            (8) United nations framework convention on climate 
        change.--The term ``United Nations Framework Convention on 
        Climate Change'' or ``Convention'' means the United Nations 
        Framework Convention on Climate Change done at New York on May 
        9, 1992, and entered into force on March 21, 1994.

SEC. 493. INTERNATIONAL CLIMATE CHANGE ADAPTATION PROGRAM.

    (a) Establishment.--The Secretary of State, in consultation with 
the Administrator of USAID, the Secretary of the Treasury, and the 
Administrator of the Environmental Protection Agency, shall establish 
an International Climate Change Adaptation Program in accordance with 
the requirements of this part.
    (b) Allowance Account.--Allowances allocated pursuant to section 
782(n) of the Clean Air Act shall be available for distribution to 
carry out the Program established under subsection (a).
    (c) Supplement Not Supplant.--Assistance provided under this part 
shall be used to supplement, and not to supplant, any other Federal, 
State, or local resources available to carry out activities of the type 
carried out under the Program.

SEC. 494. DISTRIBUTION OF ALLOWANCES.

    (a) In General.--The Secretary of State, or such other Federal 
agency head as the President may designate, after consultation with the 
Secretary of the Treasury, the Administrator of USAID, and the 
Administrator of the Environmental Protection Agency, shall direct the 
distribution of allowances to carry out the Program--
            (1) in the form of bilateral assistance pursuant to the 
        requirements under section 495;
            (2) to multilateral funds or international institutions 
        pursuant to the Convention or an agreement negotiated under the 
        Convention; or
            (3) through a combination of the mechanisms identified 
        under paragraphs (1) and (2).
    (b) Limitation.--
            (1) Conditional distribution to multilateral funds or 
        international institutions.--In any fiscal year, the Secretary 
        of State, or such other Federal agency head as the President 
        may designate, in consultation with the Administrator of USAID, 
        the Secretary of the Treasury, and the Administrator of the 
        Environmental Protection Agency, shall distribute at least 40 
        percent and up to 60 percent of the allowances available to 
        carry out the Program to one or more multilateral funds or 
        international institutions that meet the requirements of 
        paragraph (2), if any such fund or institution exists, and 
        shall annually certify in a report to the appropriate 
        congressional committees that any multilateral fund or 
        international institution receiving allowances under this 
        section meets the requirements of paragraph (2) or that no 
        multilateral fund or international institution that meets the 
        requirements of paragraph (2) exists, as the case may be. The 
        Secretary of State shall notify the appropriate congressional 
        committees not less than 15 days prior to any transfer of 
        allowances to a multilateral fund or international institution 
        pursuant to this section.
            (2) Multilateral fund or international institution 
        eligibility.--A multilateral fund or international institution 
        is eligible to receive allowances available to carry out the 
        Program--
                    (A) if--
                            (i) such fund or institution is established 
                        pursuant to--
                                    (I) the Convention; or
                                    (II) an agreement negotiated under 
                                the Convention; or
                            (ii) the allowances are directed to one or 
                        more multilateral development banks or 
                        international development institutions, 
                        pursuant to an agreement negotiated under such 
                        Convention; and
                    (B) if such fund or institution--
                            (i) specifies the terms and conditions 
                        under which the United States is to provide 
                        allowances to the fund or institution, and 
                        under which the fund or institution is to 
                        provide assistance to recipient countries;
                            (ii) ensures that assistance from the 
                        United States to the fund or institution and 
                        the principal and income of the fund or 
                        institution are disbursed only for purposes 
                        that are consistent with those described in 
                        section 491(b)(1);
                            (iii) requires a regular meeting of a 
                        governing body of the fund or institution that 
                        includes representation from countries among 
                        the most vulnerable developing countries and 
                        provides public access;
                            (iv) requires that local communities and 
                        indigenous peoples in areas where any 
                        activities or programs are planned are engaged 
                        through adequate disclosure of information, 
                        public participation, and consultation; and
                            (v) prepares and makes public an annual 
                        report that--
                                    (I) describes the process and 
                                methodology for selecting the 
                                recipients of assistance from the fund 
                                or institution, including assessments 
                                of vulnerability;
                                    (II) describes specific programs 
                                and activities supported by the fund or 
                                institution and the extent to which the 
                                assistance is addressing the adaptation 
                                needs of the most vulnerable developing 
                                countries, and the most vulnerable 
                                communities and populations therein;
                                    (III) describes the performance 
                                goals for assistance authorized under 
                                the fund or institution and expresses 
                                such goals in an objective and 
                                quantifiable form, to the extent 
                                practicable;
                                    (IV) describes the performance 
                                indicators to be used in measuring or 
                                assessing the achievement of the 
                                performance goals described in 
                                subclause (III);
                                    (V) provides a basis for 
                                recommendations for adjustments to 
                                assistance authorized under this part 
                                to enhance the impact of such 
                                assistance; and
                                    (VI) describes the participation of 
                                other nations and international 
                                organizations in supporting and 
                                governing the fund or institution.
    (c) Oversight.--
            (1) Distribution to multilateral funds or international 
        institutions.--The Secretary of State, or such other Federal 
        agency head as the President may designate, in consultation 
        with the Administrator of USAID, shall oversee the distribution 
        of allowances available to carry out the Program to a 
        multilateral fund or international institution under subsection 
        (b).
            (2) Bilateral assistance.--The Administrator of USAID, in 
        consultation with the Secretary of State, shall oversee the 
        distribution of allowances available to carry out the Program 
        for bilateral assistance under section 495.

SEC. 495. BILATERAL ASSISTANCE.

    (a) Activities and Foreign Aid.--
            (1) In general.--In order to achieve the purposes of this 
        part, the Administrator of USAID may carry out programs and 
        activities and distribute allowances to any private or public 
        group (including international organizations and faith-based 
        organizations), association, or other entity engaged in 
        peaceful activities to--
                    (A) provide assistance to the most vulnerable 
                developing countries for--
                            (i) the development of national or regional 
                        climate change adaptation plans, including a 
                        systematic assessment of socioeconomic 
                        vulnerabilities in order to identify the most 
                        vulnerable communities and populations;
                            (ii) associated national policies; and
                            (iii) planning, financing, and execution of 
                        adaptation programs and activities;
                    (B) support investments, capacity-building 
                activities, and other assistance, to reduce 
                vulnerability and promote community-level resilience 
                related to climate change and its impacts in the most 
                vulnerable developing countries, including impacts on 
                water availability, agricultural productivity, flood 
                risk, coastal resources, timing of seasons, 
                biodiversity, economic livelihoods, health, human 
                migration, or other social, economic, political, 
                cultural, or environmental matters;
                    (C) support climate change adaptation research in 
                or for the most vulnerable developing countries;
                    (D) reduce vulnerability and provide increased 
                resilience to climate change for local communities and 
                livelihoods in the most vulnerable developing countries 
                by encouraging--
                            (i) the protection and rehabilitation of 
                        natural systems;
                            (ii) the enhancement and diversification of 
                        agricultural, fishery, and other livelihoods; 
                        and
                            (iii) the reduction of disaster risks;
                    (E) support the deployment of technologies to help 
                the most vulnerable developing countries respond to the 
                destabilizing impacts of climate change and encourage 
                the identification and adoption of appropriate 
                renewable and efficient energy technologies that are 
                beneficial in increasing community-level resilience to 
                the impacts of global climate change in those 
                countries; and
                    (F) encourage the engagement of local communities 
                through disclosure of information, consultation, and 
                the communities' informed participation relating to the 
                development of plans, programs, and activities to 
                increase community-level resilience to climate change 
                impacts.
            (2) Limitations.--Not more than 10 percent of the 
        allowances made available to carry out bilateral assistance 
        under this part in any year shall be distributed to support 
        activities in any single country.
            (3) Prioritizing assistance.--In providing assistance under 
        this section, the Administrator of USAID shall give priority to 
        countries, including the most vulnerable communities and 
        populations therein, that are most vulnerable to the adverse 
        impacts of climate change, determined by the likelihood and 
        severity of such impacts and the country's capacity to adapt to 
        such impacts.
    (b) Community Engagement.--
            (1) In general.--The Administrator of USAID shall ensure 
        that local communities, including the most vulnerable 
        communities and populations therein, in areas where any 
        programs or activities are carried out pursuant to this section 
        are engaged in, through disclosure of information, public 
        participation, and consultation, the design, implementation, 
        monitoring, and evaluation of such programs and activities.
            (2) Consultation and disclosure.--For each country 
        receiving assistance under this section, the Administrator of 
        USAID shall establish a process for consultation with, and 
        disclosure of information to, local, national, and 
        international stakeholders regarding any programs and 
        activities carried out pursuant to this section.
    (c) Coordination.--
            (1) Alignment of activities.--Subject to the direction of 
        the President and the Secretary of State, the Administrator of 
        USAID shall, to the extent practicable, seek to align 
        activities under this section with broader development, poverty 
        alleviation, or natural resource management objectives and 
        initiatives in the recipient country.
            (2) Coordination of activities.--The Administrator of USAID 
        shall ensure that there is coordination among the activities 
        under this section, subtitle D of this title, and part E of 
        title VII of the Clean Air Act, in order to maximize the 
        effectiveness of United States assistance to developing 
        countries.
    (d) Reporting.--
            (1) Initial report.--Not later than 180 days after the date 
        of enactment of this part, the Administrator of USAID, in 
        consultation with the Secretary of State, shall submit to the 
        President and the appropriate congressional committees an 
        initial report that--
                    (A) based on the most recent information available 
                from reliable public sources or knowledge obtained by 
                USAID on a reliable basis, as determined by the 
                Administrator of USAID, identifies the developing 
                countries, including the most vulnerable communities 
                and populations therein, that are most vulnerable to 
                climate change impacts and in which assistance may have 
                the greatest and most sustainable benefit in reducing 
                vulnerability to climate change; and
                    (B) describes the process and methodology for 
                selecting the recipients of assistance under subsection 
                (a)(1).
            (2) Annual reports.--Not later than 18 months after the 
        date on which the initial report is submitted pursuant to 
        paragraph (1), and annually thereafter, the Administrator of 
        USAID, in consultation with the Secretary of State, shall 
        submit to the President and the appropriate congressional 
        committees a report that--
                    (A) describes the extent to which global climate 
                change, through its potential negative impacts on 
                sensitive populations and natural resources in the most 
                vulnerable developing countries, may threaten, cause, 
                or exacerbate political, economic, environmental, 
                cultural, or social instability or international 
                conflict in those regions;
                    (B) describes the ramifications of any potentially 
                destabilizing impacts climate change may have on the 
                national security, foreign policy, and economic 
                interests of the United States, including--
                            (i) the creation of environmental migrants 
                        and internally displaced peoples;
                            (ii) international or internal armed 
                        conflicts over water, food, land, or other 
                        resources;
                            (iii) loss of agricultural and other 
                        livelihoods, cultural stability, and other 
                        causes of increased poverty and economic 
                        destabilization;
                            (iv) decline in availability of resources 
                        needed for survival, including water;
                            (v) increased impact of natural disasters 
                        (including droughts, flooding, and other severe 
                        weather events);
                            (vi) increased prevalence or virulence of 
                        climate-related diseases; and
                            (vii) intensified urban migration;
                    (C) describes how allowances available under this 
                section were distributed during the previous fiscal 
                year to enhance the national security, foreign policy, 
                and economic interests of the United States and assist 
                in avoiding the economically, politically, 
                environmentally, culturally, and socially destabilizing 
                impacts of climate change in most vulnerable developing 
                countries;
                    (D) identifies and recommends the developing 
                countries, including the most vulnerable communities 
                and populations therein, that are most vulnerable to 
                climate change impacts and in which assistance may have 
                the greatest and most sustainable benefit in reducing 
                vulnerability to climate change, including in the form 
                of deploying technologies, investments, capacity-
                building activities, and other types of assistance for 
                adaptation to climate change impacts and approaches to 
                reduce greenhouse gases in ways that may also provide 
                community-level resilience to climate change impacts; 
                and
                    (E) describes cooperation undertaken with other 
                nations and international organizations to carry out 
                this part.
    (e) Monitoring and Evaluation.--
            (1) In general.--The Administrator of USAID shall establish 
        and implement a system to monitor and evaluate the 
        effectiveness and efficiency of assistance provided under this 
        section in order to maximize the long-term sustainable 
        development impact of such assistance, including the extent to 
        which such assistance is meeting the purposes of this part and 
        addressing the adaptation needs of developing countries.
            (2) Requirements.--In carrying out paragraph (1), the 
        Administrator of USAID shall--
                    (A) in consultation with national governments in 
                recipient countries, establish performance goals for 
                assistance authorized under this section and express 
                such goals in an objective and quantifiable form, to 
                the extent practicable;
                    (B) establish performance indicators to be used in 
                measuring or assessing the achievement of the 
                performance goals described in subparagraph (A), 
                including an evaluation of--
                            (i) the extent to which assistance under 
                        this section provided for disclosure of 
                        information to, consultation with, and informed 
                        participation by local communities;
                            (ii) the extent to which local communities 
                        participated in the design, implementation, and 
                        evaluation of programs and activities 
                        implemented pursuant to this section; and
                            (iii) the impacts of such participation on 
                        the goals and objectives of the programs and 
                        activities implemented under this section;
                    (C) provide a basis for recommendations for 
                adjustments to assistance authorized under this section 
                to enhance the impact of such assistance; and
                    (D) include, in the annual report to the 
                appropriate congressional committees and other relevant 
                agencies required under subsection (d)(2), findings 
                resulting from the monitoring and evaluation of 
                programs and activities under this section.
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