111TH CONGRESS 

1ST SESSION H. R. 2454 

AN ACT 

To create clean energy jobs, achieve energy independence, 

reduce global warming pollution and transition to a clean 

energy economy. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘American Clean Energy and Security Act of 2009’’. 

4 (b) TABLE OF CONTENTS.—The table of contents for 

5 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

Sec. 3. International participation. 

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. 

Sec. 102. Clarifying State authority to adopt renewable energy incentives. 

Sec. 103. Federal renewable energy purchases. 

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. 786. 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. 

Sec. 125. Advanced technology vehicle manufacturing incentive loans. 

Sec. 126. Definition of renewable biomass. 

Sec. 127. Open fuel standard. 

‘‘Sec. 32920. Open fuel standard for transportation. 

Sec. 128. Diesel emissions reduction. 

Sec. 129. Loan guarantees for projects to construct renewable fuel pipelines. 

Sec. 130. Fleet vehicles. 

Sec. 130A. Report on natural gas vehicle emissions reductions. 

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. 
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Sec. 133. Support of Indian 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 and siting. 

‘‘Sec. 216A Transmission planning. 

‘‘Sec. 216B. Siting and construction in the Western Interconnection. 

Sec. 152. Net metering for Federal agencies. 

Sec. 153. Support for qualified advanced electric transmission manufacturing 

plants, qualified high efficiency transmission property, and 

qualified advanced electric transmission property. 

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—Energy and Efficiency Centers and Research 

Sec. 171. Energy Innovation Hubs. 

Sec. 172. Advanced energy research. 

Sec. 173. Building Assessment Centers. 

Sec. 174. Centers for Energy and Environmental Knowledge and Outreach. 

Sec. 175. High efficiency gas turbine research, development, and demonstration. 

Subtitle I—Nuclear and Advanced Technologies 

Sec. 181. Revisions to loan guarantee program authority. 

Sec. 182. Purpose. 

Sec. 183. Definitions. 

Sec. 184. Clean energy investment fund. 

Sec. 185. Energy technology deployment goals. 

Sec. 186. Clean energy deployment administration. 

Sec. 187. Direct support. 

Sec. 188. Indirect support. 

Sec. 189. Federal credit authority. 

Sec. 190. General provisions. 

Sec. 191. Conforming amendments. 

Subtitle J—Miscellaneous 

Sec. 195. Increased hydroelectric generation at existing Federal facilities. 

Sec. 196. Clean technology business competition grant program. 

Sec. 197. National Bioenergy Partnership. 

Sec. 198. Office of Consumer Advocacy. 
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‘‘Sec. 319. Office of Consumer Advocacy. 

Sec. 199. Development corporation for renewable power borrowing authority. 

Sec. 199A. Study. 

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. 

Sec. 205. Tree planting programs. 

Sec. 206. Energy efficiency for data center buildings. 

Sec. 207. Community building code administration grants. 

Sec. 208. Solar energy systems building permit requirements for receipt of community development block grant funds. 

Sec. 209. Prohibition of restrictions on residential installation of solar energy 

system. 

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. WaterSense. 

Sec. 216. Federal procurement of water efficient products. 

Sec. 217. Early adopter water efficient product incentive programs. 

Sec. 218. Certified stoves program. 

Sec. 219. Energy Star standards. 

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—TRANSPORTATION EMISSIONS

‘‘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. 

Sec. 244. Motor market assessment and commercial awareness program. 
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Sec. 245. Motor efficiency rebate program. 

‘‘Sec. 347. Motor efficiency rebate program. 

Sec. 246. Clean energy manufacturing revolving loan fund program. 

‘‘Sec. 27. Clean energy manufacturing revolving loan fund program. 

Sec. 247. Clean energy and efficiency manufacturing partnerships. 

Sec. 248. Technical amendments. 

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. 

Sec. 265. Consumer behavior research. 

Subtitle G—Miscellaneous 

Sec. 271. Energy efficient information and communications technologies. 

‘‘Sec. 543. Energy efficient information and communications technologies. 

Sec. 272. National energy efficiency goals. 

Sec. 273. Affiliated island energy independence team. 

Sec. 274. Product carbon disclosure program. 

Sec. 275. Industrial energy efficiency education and training initiative. 

Sec. 276. Sense of Congress. 

Subtitle H—Green Resources for Energy Efficient Neighborhoods 

Sec. 281. Short title. 

Sec. 282. Definitions. 

Sec. 283. Implementation of energy efficiency participation incentives for HUD 

programs. 

Sec. 284. Basic HUD energy efficiency standards and standards for additional 

credit. 

Sec. 285. Energy efficiency and conservation demonstration program for multifamily housing projects assisted with project-based rental assistance. 

Sec. 286. Additional credit for Fannie Mae and Freddie Mac housing goals for 

energy-efficient and location-efficient mortgages. 

Sec. 287. Duty to serve underserved markets for energy-efficient and locationefficient mortgages. 

Sec. 288. Consideration of energy efficiency under FHA mortgage insurance 

programs and Native American and Native Hawaiian loan 

guarantee programs. 

‘‘Sec. 543. Consideration of energy efficiency. 

Sec. 289. Energy-efficient mortgages and location-efficient mortgages education 

and outreach campaign. 

Sec. 290. Collection of information on energy-efficient and location-efficient 

mortgages through Home Mortgage Disclosure Act. 

Sec. 291. Ensuring availability of homeowners insurance for homes not connected to electricity grid. 

Sec. 292. Mortgage incentives for energy-efficient multifamily housing. 

Sec. 293. Energy-efficient certifications for manufactured housing with mortgages. 
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Sec. 294. Assisted housing energy loan pilot program. 

Sec. 295. Making it green. 

Sec. 296. Residential energy efficiency block grant program. 

‘‘Sec. 123. Residential energy efficiency block grant program. 

Sec. 297. Including sustainable development and transportation strategies in 

comprehensive housing affordability strategies. 

Sec. 298. Grant program to increase sustainable low-income community development capacity. 

Sec. 299. HOPE VI green developments requirement. 

Sec. 299A. Consideration of energy efficiency improvements in appraisals. 

Sec. 299B. Housing Assistance Council. 

Sec. 299C. Rural housing and economic development assistance. 

Sec. 299D. Loans to States and Indian tribes to carry out renewable energy 

sources activities. 

Sec. 299E. Green banking centers. 

Sec. 299F. GAO reports on availability of affordable mortgages. 

Sec. 299G. Public housing energy cost report. 

Sec. 299H. Secondary market for residential renewable energy lease instruments. 

Sec. 299I. Green guarantees. 

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. 
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‘‘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, propane, and kerosene consumers. 

‘‘Sec. 787. Allocations to refineries. 

‘‘Sec. 788. Supplemental agriculture and renewable energy incentives programs. 

‘‘Sec. 789. Climate change consumer refunds. 

‘‘Sec. 790. Exchange for State-issued allowances. 

‘‘Sec. 791. Auction procedures. 

‘‘Sec. 792. Auctioning allowances for other entities. 

‘‘Sec. 793. Establishment of funds. 

‘‘Sec. 794. Oversight of allocations. 

‘‘Sec. 795. Exchange for early action offset credits. 

Subtitle C—Additional Greenhouse Gas Standards 

Sec. 331. Greenhouse gas standards. 
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‘‘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. International air pollution. 

‘‘Sec. 833. Hazardous air pollutants. 

‘‘Sec. 834. New source review. 

‘‘Sec. 835. Title V permits. 

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. 862. Grants for support of air pollution control programs. 

Sec. 336. Enforcement. 

Sec. 337. Conforming amendments. 

Sec. 338. Davis-Bacon compliance. 

Sec. 339. National strategy for domestic biological carbon sequestration. 

Sec. 340. Reducing acid rain and mercury pollution. 

Subtitle D—Carbon Market Assurance 

Sec. 341. Carbon market assurance. 

‘‘PART IV—CARBON MARKET ASSURANCE

‘‘Sec. 401. Oversight and assurance of carbon markets. 

‘‘Sec. 402. Applicability of Part III provisions. 

‘‘Sec. 1041. Fraud and false statements in connection with regulated allowances. 

Sec. 342. Carbon derivative 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 antitrust law or authority of the Federal Trade Commission. 
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Sec. 358. Effect of derivatives regulatory reform legislation. 

Sec. 359. Cease-and-desist authority. 

Sec. 360. Presidential review of regulations. 

TITLE IV—TRANSITIONING TO A CLEAN ENERGY ECONOMY 

Subtitle A—Ensuring Real Reductions in Industrial Emissions 

Sec. 401. Ensuring real reductions in industrial emissions. 

‘‘PART F—ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS

‘‘Sec. 761. Purposes. 

‘‘Sec. 762. Definitions. 

‘‘SUBPART 1—EMISSION ALLOWANCE REBATE PROGRAM

‘‘Sec. 763. Eligible industrial sectors. 

‘‘Sec. 764. Distribution of emission allowance rebates. 

‘‘SUBPART 2—PROMOTING INTERNATIONAL REDUCTIONS IN INDUSTRIAL

EMISSIONS

‘‘Sec. 765. International negotiations. 

‘‘Sec. 766. United States negotiating objectives with respect to multilateral 

environmental negotiations. 

‘‘Sec. 767. Presidential reports and determinations. 

‘‘Sec. 768. International reserve allowance program. 

‘‘Sec. 769. Iron and steel sector. 

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. 

Sec. 423. Development of Information and Resources clearinghouse for vocational education and job training in renewable energy sectors. 

Sec. 424. Monitoring program effectiveness. 

Sec. 424A. Green construction careers demonstration project. 

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 refund program. 

‘‘TITLE XXII—ENERGY REFUND PROGRAM 

‘‘Sec. 2201. Energy refund program. 

Sec. 432. Modification of earned income credit amount for individuals with no 

qualifying children. 

Sec. 433. Protection of Social Security and Medicare trust funds. 

Subtitle D—Exporting Clean Technology 
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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. Global change research and data management. 

Sec. 452. National Climate Service. 

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. 

TITLE V—AGRICULTURAL AND FORESTRY RELATED OFFSETS 

Subtitle A—Offset Credit Program From Domestic Agricultural and Forestry 

Sources 

Sec. 501. Definitions. 

Sec. 502. Establishment of offset credit program from domestic agricultural 

and forestry sources. 
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Sec. 503. List of eligible domestic agricultural and forestry offset practice 

types. 

Sec. 504. Requirements for domestic agricultural and forestry practices. 

Sec. 505. Project plan submission and approval. 

Sec. 506. Verification of offset practices. 

Sec. 507. Certification of offset credits. 

Sec. 508. Ownership and transfer of offset credits. 

Sec. 509. Program review and revision. 

Sec. 510. Environmental considerations. 

Sec. 511. Audits. 

Subtitle B—USDA Greenhouse Gas Emission Reduction and Sequestration 

Advisory Committee 

Sec. 531. Establishment of USDA Greenhouse Gas Emission Reduction and 

Sequestration Advisory Committee. 

Subtitle C—Miscellaneous 

Sec. 551. International indirect land use changes. 

Sec. 552. Biomass-based diesel. 

Sec. 553. Modification of definition of renewable biomass. 

1 SEC. 2. DEFINITIONS. 

2 For purposes of this Act: 

3 (1) ADMINISTRATOR.—The term ‘‘Adminis4 trator’’ means the Administrator of the Environ5 mental Protection Agency. 

6 (2) STATE.—The term ‘‘State’’ has the mean7 ing given that term in section 302 of the Clean Air 

8 Act. 

9 SEC. 3. INTERNATIONAL PARTICIPATION. 

10 The Administrator, in consultation with the Depart11 ment of State and the United States Trade Representa12 tive, shall annually prepare and certify a report to the 

13 Congress regarding whether China and India have adopted 

14 greenhouse gas emissions standards at least as strict as 

15 those standards required under this Act. If the Adminis-
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1 trator determines that China and India have not adopted 

2 greenhouse gas emissions standards at least as stringent 

3 as those set forth in this Act, the Administrator shall no4 tify each Member of Congress of his determination, and 

5 shall release his determination to the media. 

6 TITLE I—CLEAN ENERGY 

7 Subtitle A—Combined Efficiency 

8 and Renewable Electricity 

9 Standard 

10 SEC. 101. COMBINED EFFICIENCY AND RENEWABLE ELEC11 TRICITY STANDARD. 

12 (a) IN GENERAL.—Title VI of the Public Utility Reg13 ulatory Policies Act of 1978 (16 U.S.C. 2601 and fol14 lowing) is amended by adding at the end the following: 

15 ‘‘SEC. 610. COMBINED EFFICIENCY AND RENEWABLE ELEC16 TRICITY STANDARD. 

17 ‘‘(a) DEFINITIONS.—For purposes of this section: 

18 ‘‘(1) CHP SAVINGS.—The term ‘CHP savings’ 

19 means— 

20 ‘‘(A) CHP system savings from a combined 

21 heat and power system that commences oper22 ation after the date of enactment of this sec23 tion; and 

24 ‘‘(B) the increase in CHP system savings 

25 from, at any time after the date of the enact-
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1 ment of this section, upgrading, replacing, ex2 panding, or increasing the utilization of a com3 bined heat and power system that commenced 

4 operation on or before the date of enactment of 

5 this section. 

6 ‘‘(2) CHP SYSTEM SAVINGS.—The term ‘CHP 

7 system savings’ means the increment of electric out8 put of a combined heat and power system that is at9 tributable to the higher efficiency of the combined 

10 system (as compared to the efficiency of separate 

11 production of the electric and thermal outputs). 

12 ‘‘(3) COMBINED HEAT AND POWER SYSTEM.— 

13 The term ‘combined heat and power system’ means 

14 a system that uses the same energy source both for 

15 the generation of electrical or mechanical power and 

16 the production of steam or another form of useful 

17 thermal energy, provided that— 

18 ‘‘(A) the system meets such requirements 

19 relating to efficiency and other operating char20 acteristics as the Commission may promulgate 

21 by regulation; and 

22 ‘‘(B) the net sales of electricity by the fa23 cility to customers not consuming the thermal 

24 output from that facility will not exceed 50 per-
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1 cent of total annual electric generation by the 

2 facility. 

3 ‘‘(4) CUSTOMER FACILITY SAVINGS.—The term 

4 ‘customer facility savings’ means a reduction in end5 use electricity consumption (including recycled en6 ergy savings) at a facility of an end-use consumer of 

7 electricity served by a retail electric supplier, as 

8 compared to— 

9 ‘‘(A) in the case of a new facility, con10 sumption at a reference facility of average effi11 ciency; 

12 ‘‘(B) in the case of an existing facility, 

13 consumption at such facility during a base pe14 riod, except as provided in subparagraphs (C) 

15 and (D); 

16 ‘‘(C) in the case of new equipment that re17 places existing equipment with remaining useful 

18 life, the projected consumption of the existing 

19 equipment for the remaining useful life of such 

20 equipment, and thereafter, consumption of new 

21 equipment of average efficiency of the same 

22 equipment type; and 

23 ‘‘(D) in the case of new equipment that re24 places existing equipment at the end of the use25 ful life of the existing equipment, consumption 
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1 by new equipment of average efficiency of the 

2 same equipment type. 

3 ‘‘(5) DISTRIBUTED RENEWABLE GENERATION

4 FACILITY.—The term ‘distributed renewable genera5 tion facility’ means a facility that— 

6 ‘‘(A) generates renewable electricity; 

7 ‘‘(B) primarily serves 1 or more electricity 

8 consumers at or near the facility site; and 

9 ‘‘(C) is no greater than— 

10 ‘‘(i) 2 megawatts in capacity; or 

11 ‘‘(ii) 4 megawatts in capacity, in the 

12 case of a facility that is placed in service 

13 after the date of enactment of this section 

14 and generates electricity from a renewable 

15 energy resource other than by means of 

16 combustion. 

17 ‘‘(6) ELECTRICITY SAVINGS.—The term ‘elec18 tricity savings’ means reductions in electricity con19 sumption, relative to business-as-usual projections, 

20 achieved through measures implemented after the 

21 date of enactment of this section, limited to— 

22 ‘‘(A) customer facility savings of elec23 tricity, adjusted to reflect any associated in24 crease in fuel consumption at the facility; 
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1 ‘‘(B) reductions in distribution system 

2 losses of electricity achieved by a retail elec3 tricity distributor, as compared to losses attrib4 utable to new or replacement distribution sys5 tem equipment of average efficiency; 

6 ‘‘(C) CHP savings; and 

7 ‘‘(D) fuel cell savings. 

8 ‘‘(7) CENTRAL PROCUREMENT STATE.—The 

9 term ‘central procurement State’ means a State 

10 that, as of January 1, 2009, had adopted and imple11 mented a legally enforceable mandate that, in lieu of 

12 requiring utilities to submit credits or certificates 

13 issued based on generation of electricity from (or to 

14 purchase or generate electricity from) resources de15 fined by the State as renewable, requires retail elec16 tric suppliers to collect payments from electricity 

17 ratepayers within the State that are used for central 

18 procurement, by a State agency or a public benefit 

19 corporation established pursuant to State law, of 

20 credits or certificates issued based on generation of 

21 electricity from resources defined by the State as re22 newable. 

23 ‘‘(8) FEDERAL RENEWABLE ELECTRICITY

24 CREDIT.—The term ‘Federal renewable electricity 

25 credit’ means a credit, representing one megawatt 
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1 hour of renewable electricity, issued pursuant to sub2 section (e). 

3 ‘‘(9) FUEL CELL.—The term ‘fuel cell’ means a 

4 device that directly converts the chemical energy of 

5 a fuel and an oxidant into electricity by electro6 chemical processes occurring at separate electrodes 

7 in the device. 

8 ‘‘(10) FUEL CELL SAVINGS.—The term ‘fuel 

9 cell savings’ means the electricity saved by a fuel cell 

10 that is installed after the date of enactment of this 

11 section, or by upgrading a fuel cell that commenced 

12 operation on or before the date of enactment of this 

13 section, as a result of the greater efficiency with 

14 which the fuel cell transforms fuel into electricity as 

15 compared with sources of electricity delivered 

16 through the grid, provided that— 

17 ‘‘(A) the fuel cell meets such requirements 

18 relating to efficiency and other operating char19 acteristics as the Commission may promulgate 

20 by regulation; and 

21 ‘‘(B) the net sales of electricity from the 

22 fuel cell to customers not consuming the ther23 mal output from the fuel cell, if any, do not ex24 ceed 50 percent of the total annual electricity 

25 generation by the fuel cell. 
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1 ‘‘(11) OTHER QUALIFYING ENERGY RE2 SOURCE.—The term ‘other qualifying energy re3 source’ means any of the following: 

4 ‘‘(A) Landfill gas. 

5 ‘‘(B) Wastewater treatment gas. 

6 ‘‘(C) Coal mine methane used to generate 

7 electricity at or near the mine mouth. 

8 ‘‘(D) Qualified waste-to-energy. 

9 ‘‘(12) QUALIFIED HYDROPOWER.—The term 

10 ‘qualified hydropower’ means— 

11 ‘‘(A) energy produced from increased effi12 ciency achieved, or additions of capacity made, 

13 on or after January 1, 1988, at a hydroelectric 

14 facility that was placed in service before that 

15 date and does not include additional energy 

16 generated as a result of operational changes not 

17 directly associated with efficiency improvements 

18 or capacity additions; or 

19 ‘‘(B) energy produced from generating ca20 pacity added to a dam on or after January 1, 

21 1988, provided that the Commission certifies 

22 that— 

23 ‘‘(i) the dam was placed in service be24 fore the date of the enactment of this sec25 tion and was operated for flood control, 
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1 navigation, or water supply purposes and 

2 was not producing hydroelectric power 

3 prior to the addition of such capacity; 

4 ‘‘(ii) the hydroelectric project installed 

5 on the dam is licensed (or is exempt from 

6 licensing) by the Commission and is in 

7 compliance with the terms and conditions 

8 of the license or exemption, and with other 

9 applicable legal requirements for the pro10 tection of environmental quality, including 

11 applicable fish passage requirements; and 

12 ‘‘(iii) the hydroelectric project in13 stalled on the dam is operated so that the 

14 water surface elevation at any given loca15 tion and time that would have occurred in 

16 the absence of the hydroelectric project is 

17 maintained, subject to any license or ex18 emption requirements that require changes 

19 in water surface elevation for the purpose 

20 of improving the environmental quality of 

21 the affected waterway. 

22 ‘‘(13) QUALIFIED WASTE-TO-ENERGY.—The 

23 term ‘qualified waste-to-energy’ means energy from 

24 the combustion of municipal solid waste or construc25 tion, demolition, or disaster debris, or from the gas-
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1 ification or pyrolization of such waste or debris and 

2 the combustion of the resulting gas at the same fa3 cility, provided that— 

4 ‘‘(A) such term shall include only the en5 ergy derived from the non-fossil biogenic por6 tion of such waste or debris; 

7 ‘‘(B) the Commission determines, with the 

8 concurrence of the Administrator of the Envi9 ronmental Protection Agency, that the total 

10 lifecycle greenhouse gas emissions attributable 

11 to the generation of electricity from such waste 

12 or debris are lower than those attributable to 

13 the likely alternative method of disposing of 

14 such waste or debris; and 

15 ‘‘(C) the owner or operator of the facility 

16 generating electricity from such energy provides 

17 to the Commission, on an annual basis— 

18 ‘‘(i) a certification that the facility is 

19 in compliance with all applicable State, 

20 tribal, and Federal environmental permits; 

21 ‘‘(ii) in the case of a facility that com22 menced operation before the date of enact23 ment of this section, a certification that 

24 the facility meets emissions standards pro25 mulgated under section 112 or 129 of the 
21 

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1 Clean Air Act (42 U.S.C. 7412 or 7429) 

2 that apply as of the date of enactment of 

3 this section to new facilities within the rel4 evant source category; and 

5 ‘‘(iii) in the case of the combustion, 

6 pyrolization, or gasification of municipal 

7 solid waste, a certification that each local 

8 government unit from which such waste 

9 originates operates, participates in the op10 eration of, contracts for, or otherwise pro11 vides for, recycling services for its resi12 dents. 

13 ‘‘(14) RECYCLED ENERGY SAVINGS.—The term 

14 ‘recycled energy savings’ means a reduction in elec15 tricity consumption that results from a modification 

16 of an industrial or commercial system that com17 menced operation before the date of enactment of 

18 this section, in order to recapture electrical, mechan19 ical, or thermal energy that would otherwise be 

20 wasted. 

21 ‘‘(15) RENEWABLE BIOMASS.—The term ‘re22 newable biomass’ means any of the following: 

23 ‘‘(A) Materials, pre-commercial thinnings, 

24 or removed invasive species from National For25 est System land and public lands (as defined in 
22 

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1 section 103 of the Federal Land Policy and 

2 Management Act of 1976 (43 U.S.C. 1702)), 

3 including those that are byproducts of preven4 tive treatments (such as trees, wood, brush, 

5 thinnings, chips, and slash), that are removed 

6 as part of a federally recognized timber sale, or 

7 that are removed to reduce hazardous fuels, to 

8 reduce or contain disease or insect infestation, 

9 or to restore ecosystem health, and that are— 

10 ‘‘(i) not from components of the Na11 tional Wilderness Preservation System, 

12 Wilderness Study Areas, Inventoried 

13 Roadless Areas, old growth stands, late14 successional stands (except for dead, se15 verely damaged, or badly infested trees), 

16 components of the National Landscape 

17 Conservation System, National Monu18 ments, National Conservation Areas, Des19 ignated Primitive Areas, or Wild and Sce20 nic Rivers corridors; 

21 ‘‘(ii) harvested in environmentally sus22 tainable quantities, as determined by the 

23 appropriate Federal land manager; and 
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1 ‘‘(iii) harvested in accordance with 

2 Federal and State law, and applicable land 

3 management plans. 

4 ‘‘(B) Any organic matter that is available 

5 on a renewable or recurring basis from non6 Federal land or land belonging to an Indian or 

7 Indian tribe that is held in trust by the United 

8 States or subject to a restriction against alien9 ation imposed by the United States, including— 

10 ‘‘(i) renewable plant material, includ11 ing— 

12 ‘‘(I) feed grains; 

13 ‘‘(II) other agricultural commod14 ities; 

15 ‘‘(III) other plants and trees; and 

16 ‘‘(IV) algae; and 

17 ‘‘(ii) waste material, including— 

18 ‘‘(I) crop residue; 

19 ‘‘(II) other vegetative waste ma20 terial (including wood waste and wood 

21 residues); 

22 ‘‘(III) animal waste and byprod23 ucts (including fats, oils, greases, and 

24 manure); 

25 ‘‘(IV) construction waste; and 
24 

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1 ‘‘(V) food waste and yard waste. 

2 ‘‘(C) Residues and byproducts from wood, 

3 pulp, or paper products facilities. 

4 ‘‘(16) RENEWABLE ELECTRICITY.—The term 

5 ‘renewable electricity’ means electricity generated 

6 (including by means of a fuel cell) from a renewable 

7 energy resource or other qualifying energy resources. 

8 ‘‘(17) RENEWABLE ENERGY RESOURCE.—The 

9 term ‘renewable energy resource’ means each of the 

10 following: 

11 ‘‘(A) Wind energy. 

12 ‘‘(B) Solar energy. 

13 ‘‘(C) Geothermal energy. 

14 ‘‘(D) Renewable biomass. 

15 ‘‘(E) Biogas derived exclusively from re16 newable biomass. 

17 ‘‘(F) Biofuels derived exclusively from re18 newable biomass. 

19 ‘‘(G) Qualified hydropower. 

20 ‘‘(H) Marine and hydrokinetic renewable 

21 energy, as that term is defined in section 632 

22 of the Energy Independence and Security Act 

23 of 2007 (42 U.S.C. 17211). 

24 ‘‘(18) RETAIL ELECTRIC SUPPLIER.— 
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1 ‘‘(A) IN GENERAL.—The term ‘retail elec2 tric supplier’ means, for any given year, an 

3 electric utility that sold not less than 4,000,000 

4 megawatt hours of electric energy to electric 

5 consumers for purposes other than resale dur6 ing the preceding calendar year. 

7 ‘‘(B) INCLUSIONS AND LIMITATIONS.—For 

8 purposes of determining whether an electric 

9 utility qualifies as a retail electric supplier 

10 under subparagraph (A)— 

11 ‘‘(i) the sales of any affiliate of an 

12 electric utility to electric consumers, other 

13 than sales to the affiliate’s lessees or ten14 ants, for purposes other than resale shall 

15 be considered to be sales of such electric 

16 utility; and 

17 ‘‘(ii) sales by any electric utility to an 

18 affiliate, lessee, or tenant of such electric 

19 utility shall not be treated as sales to elec20 tric consumers. 

21 ‘‘(C) AFFILIATE.—For purposes of this 

22 paragraph, the term ‘affiliate’ when used in re23 lation to a person, means another person that 

24 directly or indirectly owns or controls, is owned 

25 or controlled by, or is under common ownership 
26 

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1 or control with, such person, as determined 

2 under regulations promulgated by the Commis3 sion. 

4 ‘‘(19) RETAIL ELECTRIC SUPPLIER’S BASE

5 AMOUNT.—The term ‘retail electric supplier’s base 

6 amount’ means the total amount of electric energy 

7 sold by the retail electric supplier, expressed in 

8 megawatt hours, to electric customers for purposes 

9 other than resale during the relevant calendar year, 

10 excluding— 

11 ‘‘(A) electricity generated by a hydro12 electric facility that is not qualified hydropower; 

13 ‘‘(B) electricity generated by a nuclear 

14 generating unit placed in service after the date 

15 of enactment of this section; and 

16 ‘‘(C) the proportion of electricity generated 

17 by a fossil-fueled generating unit that is equal 

18 to the proportion of greenhouse gases produced 

19 by such unit that are captured and geologically 

20 sequestered. 

21 ‘‘(20) RETIRE AND RETIREMENT.—The terms 

22 ‘retire’ and ‘retirement’ with respect to a Federal re23 newable electricity credit, means to disqualify such 

24 credit for any subsequent use under this section, re25 gardless of whether the use is a sale, transfer, ex-
27 

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1 change, or submission in satisfaction of a compliance 

2 obligation. 

3 ‘‘(21) THIRD-PARTY EFFICIENCY PROVIDER.— 

4 The term ‘third-party efficiency provider’ means any 

5 retailer, building owner, energy service company, fi6 nancial institution or other commercial, industrial or 

7 nonprofit entity that is capable of providing elec8 tricity savings in accordance with the requirements 

9 of this section. 

10 ‘‘(22) TOTAL ANNUAL ELECTRICITY SAVINGS.— 

11 The term ‘total annual electricity savings’ means 

12 electricity savings during a specified calendar year 

13 from measures implemented since the date of the en14 actment of this section, taking into account verified 

15 measure lifetimes or verified annual savings attrition 

16 rates, as determined in accordance with such regula17 tions as the Commission may promulgate and meas18 ured in megawatt hours. 

19 ‘‘(b) ANNUAL COMPLIANCE OBLIGATION.— 

20 ‘‘(1) IN GENERAL.—For each of calendar years 

21 2012 through 2039, not later than March 31 of the 

22 following calendar year, each retail electric supplier 

23 shall submit to the Commission an amount of Fed24 eral renewable electricity credits and demonstrated 

25 total annual electricity savings that, in the aggre-
28 

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1 gate, is equal to such retail electric supplier’s annual 

2 combined target as set forth in subsection (d), ex3 cept as otherwise provided in subsection (h). 

4 ‘‘(2) DEMONSTRATION OF SAVINGS.—For pur5 poses of this subsection, submission of demonstrated 

6 total annual electricity savings means submission of 

7 a report that demonstrates, in accordance with the 

8 requirements of subsection (f), the total annual elec9 tricity savings achieved by the retail electric supplier 

10 within the relevant compliance year. 

11 ‘‘(3) RENEWABLE ELECTRICITY CREDITS POR12 TION.—Except as provided in paragraph (4), each 

13 retail electric supplier must submit Federal renew14 able electricity credits equal to at least three quar15 ters of the retail electric supplier’s annual combined 

16 target. 

17 ‘‘(4) STATE PETITION.— 

18 ‘‘(A) IN GENERAL.—Upon written request 

19 from the Governor of any State (including, for 

20 purposes of this paragraph, the Mayor of the 

21 District of Columbia), the Commission shall in22 crease, to not more than two fifths, the propor23 tion of the annual combined targets of retail 

24 electric suppliers located within such State that 

25 may be met through submission of dem-
29 

•HR 2454 EH

1 onstrated total annual electricity savings, pro2 vided that such increase shall be effective only 

3 with regard to the portion of a retail electric 

4 supplier’s annual combined target that is attrib5 utable to electricity sales within such State. 

6 ‘‘(B) CONTENTS.—A Governor’s request 

7 under this paragraph shall include an expla8 nation of the Governor’s rationale for deter9 mining, after consultation with the relevant 

10 State regulatory authority and other retail elec11 tricity ratemaking authorities within the State, 

12 to make such request. The request shall specify 

13 the maximum proportion of annual combined 

14 targets (not more than two fifths) that can be 

15 met through demonstrated total annual elec16 tricity savings, and the period for which such 

17 proportion shall be effective. 

18 ‘‘(C) REVISION.—The Governor of any 

19 State may, after consultation with the relevant 

20 State regulatory authority and other retail elec21 tricity ratemaking authorities within the State, 

22 submit a written request for revocation or revi23 sion of a previous request submitted under this 

24 paragraph. The Commission shall grant such 

25 request, provided that— 
30 

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1 ‘‘(i) any revocation or revision shall 

2 not apply to the combined annual target 

3 for any year that is any earlier than 2 cal4 endar years after the calendar year in 

5 which such request is submitted, so as to 

6 provide retail electric suppliers with ade7 quate notice of such change; and 

8 ‘‘(ii) any revision shall meet the re9 quirements of subparagraph (A). 

10 ‘‘(c) ESTABLISHMENT OF PROGRAM.—Not later than 

11 1 year after the date of enactment of this section, the 

12 Commission shall promulgate regulations to implement 

13 and enforce the requirements of this section. In promul14 gating such regulations, the Commission shall, to the ex15 tent practicable— 

16 ‘‘(1) preserve the integrity, and incorporate best 

17 practices, of existing State and tribal renewable elec18 tricity and energy efficiency programs; 

19 ‘‘(2) rely upon existing and emerging State, 

20 tribal, or regional tracking systems that issue and 

21 track non-Federal renewable electricity credits; and 

22 ‘‘(3) cooperate with the States and Indian 

23 tribes to facilitate coordination between State, tribal, 

24 and Federal renewable electricity and energy effi-
31 

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1 ciency programs and to minimize administrative bur2 dens and costs to retail electric suppliers. 

3 ‘‘(d) ANNUAL COMPLIANCE REQUIREMENT.— 

4 ‘‘(1) ANNUAL COMBINED TARGETS.—For each 

5 of calendar years 2012 through 2039, a retail elec6 tric supplier’s annual combined target shall be the 

7 product of— 

8 ‘‘(A) the required annual percentage for 

9 such year, as set forth in paragraph (2); and 

10 ‘‘(B) the retail electric supplier’s base 

11 amount for such year. 

12 ‘‘(2) REQUIRED ANNUAL PERCENTAGE.—For 

13 each of calendar years 2012 through 2039, the re14 quired 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 

15 ‘‘(e) FEDERAL RENEWABLE ELECTRICITY CRED16 ITS.— 

17 ‘‘(1) IN GENERAL.—The regulations promul18 gated under this section shall include provisions gov19 erning the issuance, tracking, and verification of 
32 

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1 Federal renewable electricity credits. Except as pro2 vided in paragraphs (2), (3), and (4) of this sub3 section, the Commission shall issue to each gener4 ator of renewable electricity, 1 Federal renewable 

5 electricity credit for each megawatt hour of renew6 able electricity generated by such generator after 

7 December 31, 2011. The Commission shall assign a 

8 unique serial number to each Federal renewable 

9 electricity credit. 

10 ‘‘(2) GENERATION FROM CERTAIN STATE RE11 NEWABLE ELECTRICITY PROGRAMS.—(A) Except as 

12 provided in subparagraph (B), where renewable elec13 tricity is generated with the support of payments 

14 from a retail electric supplier pursuant to a State re15 newable electricity program (whether through State 

16 alternative compliance payments or through pay17 ments to a State renewable electricity procurement 

18 fund or entity), the Commission shall issue Federal 

19 renewable electricity credits to such retail electric 

20 supplier for the proportion of the relevant renewable 

21 electricity generation that is attributable to the retail 

22 electric supplier’s payments, as determined pursuant 

23 to regulations issued by the Commission. For any 

24 remaining portion of the relevant renewable elec25 tricity generation, the Commission shall issue Fed-
33 

•HR 2454 EH

1 eral renewable electricity credits to the generator, as 

2 provided in paragraph (1), except that in no event 

3 shall more than 1 Federal renewable electricity cred4 it be issued for the same megawatt hour of elec5 tricity. In determining how Federal renewable elec6 tricity credits will be apportioned among retail elec7 tric suppliers and generators in such circumstances, 

8 the Commission shall consider information and guid9 ance furnished by the relevant State or States. 

10 ‘‘(B) In the case of a central procurement State 

11 that pursuant to subsection (g) has assumed respon12 sibility for compliance with the requirements of sub13 section (b), the Commission shall issue directly to 

14 the State Federal renewable electricity credits for 

15 any renewable electricity for which the State, pursu16 ant to a mandate described in subsection (a)(7), has 

17 centrally procured credits or certificates issued based 

18 on generation of such renewable electricity. 

19 ‘‘(3) CERTAIN POWER SALES CONTRACTS.—Ex20 cept as otherwise provided in paragraph (2), when a 

21 generator has sold renewable electricity to a retail 

22 electric supplier under a contract for power from a 

23 facility placed in service before the date of enact24 ment of this section, and the contract does not pro25 vide for the determination of ownership of the Fed-
34 

•HR 2454 EH

1 eral renewable electricity credits associated with 

2 such generation, the Commission shall issue such 

3 Federal renewable electricity credits to the retail 

4 electric supplier for the duration of the contract. 

5 ‘‘(4) CREDIT MULTIPLIER FOR DISTRIBUTED

6 RENEWABLE GENERATION.— 

7 ‘‘(A) IN GENERAL.—Except as provided in 

8 subparagraph (B), the Commission shall issue 3 

9 Federal renewable electricity credits for each 

10 megawatt hour of renewable electricity gen11 erated by a distributed renewable generation fa12 cility. 

13 ‘‘(B) ADJUSTMENT.—Except as provided 

14 in subparagraph (C), not later than January 1, 

15 2014, and not less frequently than every 4 

16 years thereafter, the Commission shall review 

17 the effect of this paragraph and shall, as nec18 essary, reduce the number of Federal renewable 

19 electricity credits per megawatt hour issued 

20 under this paragraph for any given energy 

21 source or technology, but not below 1, to ensure 

22 that such number is no higher than the Com23 mission determines is necessary to make dis24 tributed renewable generation facilities using 

25 such source or technology cost competitive with 
35 

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1 other sources of renewable electricity genera2 tion. 

3 ‘‘(C) FACILITIES PLACED IN SERVICE

4 AFTER ENACTMENT.—For any distributed re5 newable generation facility placed in service 

6 after the date of enactment of this section, sub7 paragraph (B) shall not apply for the first 10 

8 years after the date on which the facility is 

9 placed in service. For each year during such 10- 

10 year period, the Commission shall issue to the 

11 facility the same number of Federal renewable 

12 electricity credits per megawatt hour as are 

13 issued to that facility in the year in which such 

14 facility is placed in service. After such 10-year 

15 period, the Commission shall issue Federal re16 newable electricity credits to the facility in ac17 cordance with the current multiplier as deter18 mined pursuant to subparagraph (B). 

19 ‘‘(5) CREDITS BASED ON QUALIFIED HYDRO20 POWER.—For purposes of this subsection, the num21 ber of Federal renewable electricity credits issued for 

22 qualified hydropower shall be calculated— 

23 ‘‘(A) based solely on the increase in aver24 age annual generation directly resulting from 
36 

•HR 2454 EH

1 the efficiency improvements or capacity addi2 tions described in subsection (a)(13)(A); and 

3 ‘‘(B) using the same water flow informa4 tion used to determine a historic average an5 nual generation baseline for the hydroelectric 

6 facility, as certified by the Commission. 

7 ‘‘(6) GENERATION FROM QUALIFIED WASTE-TO8 ENERGY.—In the case of electricity generated from 

9 the combustion of any municipal solid waste or con10 struction, demolition, or disaster debris that is in11 cluded in the definition of renewable biomass, or 

12 from the gasification or pyrolization of such waste or 

13 debris and the combustion of the resulting gas at 

14 the same facility, the Commission shall issue Federal 

15 renewable electricity credits only for electricity gen16 erated from qualified waste-to-energy. 

17 ‘‘(7) GENERATION FROM MIXED RENEWABLE

18 AND NONRENEWABLE RESOURCES.—If electricity is 

19 generated using both a renewable energy resource or 

20 other qualifying energy resource and an energy 

21 source that is not a renewable energy resource or 

22 other qualifying energy resource (as, for example, in 

23 the case of co-firing of renewable biomass and fossil 

24 fuel), the Commission shall issue Federal renewable 

25 electricity credits based on the proportion of the 
37 

•HR 2454 EH

1 electricity that is attributable to the renewable en2 ergy resource or other qualifying energy resource. 

3 ‘‘(8) PROHIBITION AGAINST DOUBLE-COUNT4 ING.—Except as provided in paragraph (4) of this 

5 subsection, the Commission shall ensure that no 

6 more than 1 Federal renewable electricity credit will 

7 be issued for any megawatt hour of renewable elec8 tricity and that no Federal renewable electricity 

9 credit will be used more than once for compliance 

10 with this section. 

11 ‘‘(9) TRADING.—The lawful holder of a Federal 

12 renewable electricity credit may sell, exchange, 

13 transfer, submit for compliance in accordance with 

14 subsection (b), or submit such credit for retirement 

15 by the Commission. 

16 ‘‘(10) BANKING.—A Federal renewable elec17 tricity credit may be submitted in satisfaction of the 

18 compliance obligation set forth in subsection (b) for 

19 the compliance year in which the credit was issued 

20 or for any of the 3 immediately subsequent compli21 ance years. The Commission shall retire any Federal 

22 renewable electricity credit that has not been retired 

23 by April 2 of the calendar year that is 3 years after 

24 the calendar year in which the credit was issued. 
38 

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1 ‘‘(11) RETIREMENT.—The Commission shall re2 tire a Federal renewable electricity credit imme3 diately upon submission by the lawful holder of such 

4 credit, whether in satisfaction of a compliance obli5 gation under subsection (b) or on some other basis. 

6 ‘‘(f) ELECTRICITY SAVINGS.— 

7 ‘‘(1) STANDARDS FOR MEASUREMENT OF SAV8 INGS.—As part of the regulations promulgated 

9 under this section, the Commission shall prescribe 

10 standards and protocols for defining and measuring 

11 electricity savings and total annual electricity sav12 ings that can be counted towards the compliance ob13 ligation set forth in subsection (b). Such protocols 

14 and standards shall, at minimum— 

15 ‘‘(A) specify the types of energy efficiency 

16 and energy conservation measures that can be 

17 counted; 

18 ‘‘(B) require that energy consumption esti19 mates for customer facilities or portions of fa20 cilities in the applicable base and current years 

21 be adjusted, as appropriate, to account for 

22 changes in weather, level of production, and 

23 building area; 

24 ‘‘(C) account for the useful life of meas25 ures; 
39 

•HR 2454 EH

1 ‘‘(D) include deemed savings values for 

2 specific, commonly used measures; 

3 ‘‘(E) allow for savings from a program to 

4 be estimated based on extrapolation from a rep5 resentative sample of participating customers; 

6 ‘‘(F) include procedures for counting CHP 

7 savings, recycled energy savings, and fuel cell 

8 savings; 

9 ‘‘(G) include procedures for documenting 

10 measurable and verifiable electricity savings 

11 achieved as a result of market transformation 

12 efforts; 

13 ‘‘(H) include procedures for counting elec14 tricity savings achieved by solar water heating 

15 and solar light pipe technology that has the ca16 pability to provide measurable data on the 

17 amount of megawatt-hours displaced; 

18 ‘‘(I) avoid double-counting of savings used 

19 for compliance with this section, including sav20 ings that are transferred pursuant to paragraph 

21 (3); 

22 ‘‘(J) ensure that, except as provided in 

23 subparagraph (L), the retail electric supplier 

24 claiming the savings played a significant role in 

25 achieving the savings (including through the ac-
40 

•HR 2454 EH

1 tivities of a designated agent of the supplier or 

2 through the purchase of transferred savings); 

3 ‘‘(K) include savings from programs ad4 ministered by a retail electric supplier (or a re5 tail electricity distributor that is not a retail 

6 electric supplier) that are funded by State, Fed7 eral, or other sources; 

8 ‘‘(L) in any State in which the State regu9 latory authority has designated 1 or more enti10 ties to administer electric ratepayer-funded effi11 ciency programs approved by such State regu12 latory authority, provide that electricity savings 

13 achieved through such programs shall be dis14 tributed equitably among retail electric sup15 pliers in accordance with the direction of the 

16 relevant State regulatory authority; and 

17 ‘‘(M) exclude savings achieved as a result 

18 of compliance with mandatory appliance and 

19 equipment efficiency standards or building 

20 codes. 

21 ‘‘(2) STANDARDS FOR THIRD-PARTY

22 VERIFICATION OF SAVINGS.—The regulations pro23 mulgated under this section shall establish proce24 dures and standards requiring third-party 

25 verification of all reported electricity savings, includ-
41 

•HR 2454 EH

1 ing requirements for accreditation of third-party 

2 verifiers to ensure that such verifiers are profes3 sionally qualified and have no conflicts of interest. 

4 ‘‘(3) TRANSFERS OF SAVINGS.— 

5 ‘‘(A) BILATERAL CONTRACTS FOR SAVINGS

6 TRANSFERS.—Subject to the limitations of this 

7 paragraph, a retail electric supplier may use 

8 electricity savings transferred, pursuant to a bi9 lateral contract, from another retail electric 

10 supplier, an owner of an electric distribution fa11 cility that is not a retail electric supplier, a 

12 State, or a third-party efficiency provider to 

13 meet the applicable compliance obligation under 

14 subsection (b). 

15 ‘‘(B) REQUIREMENTS.—Electricity savings 

16 transferred and used for compliance pursuant 

17 to this paragraph shall be— 

18 ‘‘(i) measured and verified in accord19 ance with the procedures specified under 

20 this subsection; 

21 ‘‘(ii) reported in accordance with 

22 paragraph (4) of this subsection; and 

23 ‘‘(iii) achieved within the same State 

24 as is served by the retail electric supplier. 
42 

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1 ‘‘(C) REGULATORY APPROVAL.—Nothing 

2 in this paragraph shall limit or affect the au3 thority of a State regulatory authority to re4 quire a retail electric supplier that is regulated 

5 by such authority to obtain such authority’s au6 thorization or approval of a contract for trans7 fer of savings under this paragraph. 

8 ‘‘(4) REPORTING SAVINGS.— 

9 ‘‘(A) REQUIREMENTS.—The regulations 

10 promulgated under this section shall establish 

11 requirements governing the submission of re12 ports to demonstrate, in accordance with the 

13 protocols and standards for measurement and 

14 third-party verification established under this 

15 subsection, the total annual electricity savings 

16 achieved by a retail electric supplier within the 

17 relevant year. 

18 ‘‘(B) REVIEW AND APPROVAL.—The Com19 mission shall review each report submitted to 

20 the Commission by a retail electric supplier and 

21 shall exclude any electricity savings that have 

22 not been adequately demonstrated in accord23 ance with the requirements of this subsection. 

24 ‘‘(5) STATE ADMINISTRATION.— 
43 

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1 ‘‘(A) DELEGATION OF AUTHORITY.—Upon 

2 receipt of an application from the Governor of 

3 a State (including, for purposes of this sub4 section, the Mayor of the District of Columbia), 

5 the Commission may delegate to the State the 

6 authority to review and verify reported elec7 tricity savings for purposes of determining dem8 onstrated total annual electricity savings that 

9 may be counted towards a retail electric sup10 plier’s compliance obligation under subsection 

11 (b). The Commission shall make a substantive 

12 determination approving or disapproving a 

13 State application under this subparagraph, 

14 after notice and comment, within 180 days of 

15 receipt of a complete application. 

16 ‘‘(B) ALTERNATIVE MEASUREMENT AND

17 VERIFICATION PROCEDURES AND STAND18 ARDS.—As part of an application submitted 

19 under subparagraph (A), a State may request 

20 to use alternative measurement and verification 

21 procedures and standards to those specified in 

22 paragraphs (1) and (2), provided the State 

23 demonstrates that such alternative procedures 

24 and standards provide a level of accuracy of 

25 measurement and verification at least equiva-
44 

•HR 2454 EH

1 lent to the Federal procedures and standards 

2 promulgated under paragraphs (1) and (2). 

3 ‘‘(C) REVIEW OF STATE IMPLEMENTA4 TION.—The Commission shall, not less fre5 quently than once every 4 years, review each 

6 State’s implementation of delegated authority 

7 under this paragraph to ensure conformance 

8 with the requirements of this section. The Com9 mission may, at any time, revoke the delegation 

10 of authority under this section upon a finding 

11 that the State is not implementing its delegated 

12 responsibilities in conformity with this para13 graph. As a condition of maintaining its dele14 gated authority under this paragraph, the Com15 mission may require a State to submit a revised 

16 application under subparagraph (A) if the Com17 mission has— 

18 ‘‘(i) promulgated new or substantially 

19 revised measurement and verification pro20 cedures and standards under this sub21 section; or 

22 ‘‘(ii) otherwise substantially revised 

23 the program established under this section. 

24 ‘‘(g) ALTERNATIVE COMPLIANCE PAYMENTS.— 
45 

•HR 2454 EH

1 ‘‘(1) IN GENERAL.—A retail electric supplier, or 

2 a central procurement State that, pursuant to sub3 section (g), has assumed responsibility for compli4 ance with the requirements of subsection (b), may 

5 satisfy the requirements of subsection (b) in whole 

6 or in part by submitting in accordance with this sub7 section, in lieu of each Federal renewable electricity 

8 credit or megawatt hour of demonstrated total an9 nual electricity savings that would otherwise be due, 

10 a payment equal to $25, adjusted for inflation on 

11 January 1 of each year following calendar year 

12 2009, in accordance with such regulations as the 

13 Commission may promulgate. 

14 ‘‘(2) PAYMENT TO STATE FUNDS.—Except as 

15 otherwise provided in this paragraph and paragraph 

16 (4), payments made under this subsection shall be 

17 made directly to the State or States in which the re18 tail electric supplier is located, in proportion to the 

19 portion of the retail electric supplier’s base amount 

20 that is sold within each relevant State, provided that 

21 such payments are deposited directly into a fund in 

22 the State treasury established for this purpose and 

23 that the State uses such funds in accordance with 

24 paragraphs (3) and (5) and with paragraph (4), 

25 where applicable. If the Commission determines at 
46 

•HR 2454 EH

1 any time that a State is in substantial noncompli2 ance with paragraph (3) or (5), or with paragraph 

3 (4), where applicable, the Commission shall direct 

4 that any future alternative compliance payments 

5 that would otherwise be paid to such State under 

6 this subsection shall instead be paid to the Commis7 sion and deposited in the United States Treasury. 

8 ‘‘(3) STATE USE OF FUNDS.—As a condition of 

9 continued receipt of alternative compliance payments 

10 pursuant to this subsection, a State shall use such 

11 payments exclusively for the purposes of— 

12 ‘‘(A) deploying technologies that generate 

13 electricity from renewable energy resources; or 

14 ‘‘(B) implementing cost-effective energy ef15 ficiency programs to achieve electricity savings. 

16 ‘‘(4) CENTRAL PROCUREMENT STATES.— 

17 ‘‘(A) IN GENERAL.—A central procurement 

18 State that, pursuant to subsection (g), has as19 sumed responsibility for compliance with the re20 quirements of subsection (b) shall deposit any 

21 alternative compliance payments under this 

22 subsection in a unique fund in the State treas23 ury created and used solely for this purpose. 

24 ‘‘(B) REQUIREMENTS.—As a precondition 

25 of making alternative compliance payments 
47 

•HR 2454 EH

1 under this subsection, a central procurement 

2 State shall certify to the Commission, in ac3 cordance with such requirements as the Com4 mission may prescribe, that— 

5 ‘‘(i) making such payments is the low6 est cost alternative to meet the require7 ments of subsection (b); and 

8 ‘‘(ii) moneys used by the State to 

9 make such payments are in addition to any 

10 spending that the State, and any separate 

11 entity charged with administering the 

12 State central procurement requirement 

13 identified under subsection (a)(7), other14 wise collectively would direct to the pur15 poses identified in paragraph (3). 

16 ‘‘(C) USES.—A central procurement State 

17 that makes alternative compliance payments 

18 under this subsection shall certify to the Com19 mission that, in using such payments in accord20 ance with paragraph (3), it has, to the extent 

21 practicable, maximized the level of deployment 

22 of renewable electricity generation (measured in 

23 megawatt hours) and electricity savings per dol24 lar that are achieved through such expendi25 tures. 
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1 ‘‘(5) REPORTING.—As a condition of continued 

2 receipt of alternative compliance payments pursuant 

3 to this subsection, a State shall, within 12 months 

4 of receipt of any such payments and at 12-month in5 tervals thereafter until such payments are expended, 

6 provide a report to the Commission, in accordance 

7 with such regulations as the Commission may pre8 scribe, giving a full accounting of the use of such 

9 payments, including a detailed description of the ac10 tivities funded thereby and demonstrating compli11 ance with the requirements of this subsection. 

12 ‘‘(g) CENTRAL PROCUREMENT STATES.— 

13 ‘‘(1) IN GENERAL.—A central procurement 

14 State may, upon submission of a written request by 

15 the Governor of such State to the Commission, as16 sume responsibility for compliance with the require17 ments of subsection (b) on behalf of retail electric 

18 suppliers located in such State, exclusively with re19 gard to the portion of such retail electric suppliers’ 

20 base amount that is sold within the State. 

21 ‘‘(2) DEMONSTRATION OF ELECTRICITY SAV22 INGS.—If a central procurement State opts to meet 

23 any part of the requirements of subsection (b) based 

24 on the achievement of demonstrated total annual 

25 electricity savings, regardless of whether such State 
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1 has received delegated authority pursuant to sub2 section (f)(5), such State shall submit such dem3 onstrated total annual electricity savings to the 

4 Commission through an annual report in accordance 

5 with requirements prescribed by the Commission by 

6 regulation, which shall be of equivalent stringency to 

7 those applicable to retail electric suppliers under 

8 subsection (f). 

9 ‘‘(3) NONCOMPLIANCE.—If a central procure10 ment State that pursuant to this subsection has as11 sumed responsibility for compliance with the require12 ments of subsection (b), fails to satisfy the require13 ments of subsection (b) or (h) for any year, the 

14 State’s assumption of responsibility under this sub15 section shall be discontinued immediately, and retail 

16 electric suppliers located in such State henceforth 

17 shall be directly subject to the requirements of this 

18 section. 

19 ‘‘(h) INFORMATION COLLECTION.—The Commission 

20 may require any retail electric supplier, renewable elec21 tricity generator, or such other entities as the Commission 

22 deems appropriate, to provide any information the Com23 mission determines appropriate to carry out this section. 

24 Failure to submit such information or submission of false 
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1 or misleading information under this subsection shall be 

2 a violation of this section. 

3 ‘‘(i) ENFORCEMENT AND JUDICIAL REVIEW.— 

4 ‘‘(1) FAILURE TO SUBMIT CREDITS OR DEM5 ONSTRATE SAVINGS.—If any person, other than any 

6 central procurement State that pursuant to sub7 section (g) has assumed responsibility for compliance 

8 with the requirements of subsection (b), fails to com9 ply with the requirements of subsection (b) or (h), 

10 such person shall be liable to pay to the Commission 

11 a civil penalty equal to the product of— 

12 ‘‘(A) double the alternative compliance 

13 payment calculated under subsection (h)(1), 

14 and 

15 ‘‘(B) the aggregate quantity of Federal re16 newable electricity credits, total annual elec17 tricity savings, or equivalent alternative compli18 ance payments that the person failed to submit 

19 in violation of the requirements of subsections 

20 (b) and (h). 

21 ‘‘(2) ENFORCEMENT.—The Commission shall 

22 assess a civil penalty under paragraph (1) in accord23 ance with the procedures described in section 31(d) 

24 of the Federal Power Act (16 U.S.C. 823b(d)). 
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1 ‘‘(3) VIOLATION OF REQUIREMENT OF REGULA2 TIONS OR ORDERS.—Any person, other than any 

3 central procurement State that pursuant to sub4 section (g) has assumed responsibility for compliance 

5 with the requirements of subsection (b), who vio6 lates, or fails or refuses to comply with, any require7 ment of a regulation promulgated or order issued 

8 under this section shall be subject to a civil penalty 

9 under section 316A(b) of the Federal Power Act (16 

10 U.S.C. 825o–1). Such penalty shall be assessed by 

11 the Commission in the same manner as in the case 

12 of a violation referred to in section 316A(b) of such 

13 Act. 

14 ‘‘(j) JUDICIAL REVIEW.—Any person aggrieved by a 

15 final action taken by the Commission under this section, 

16 other than the assessment of a civil penalty under sub17 section (j), may use the procedures for review described 

18 in section 313 of the Federal Power Act (16 U.S.C. 825l). 

19 For purposes of this paragraph, references to an order in 

20 section 313 of such Act shall be deemed to refer also to 

21 all other final actions of the Commission under this section 

22 other than the assessment of a civil penalty under sub23 section (i). 

24 ‘‘(k) SAVINGS PROVISIONS.—Nothing in this section 

25 shall— 
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1 ‘‘(1) diminish or qualify any authority of a 

2 State, a political subdivision of a State, or an Indian 

3 tribe to— 

4 ‘‘(A) adopt or enforce any law or regula5 tion respecting renewable electricity or energy 

6 efficiency, including any law or regulation es7 tablishing requirements more stringent than 

8 those established by this section, provided that 

9 no such law or regulation may relieve any per10 son of any requirement otherwise applicable 

11 under this section; or 

12 ‘‘(B) regulate the acquisition and disposi13 tion of Federal renewable electricity credits by 

14 retail electric suppliers within the jurisdiction of 

15 such State, political subdivision, or Indian tribe, 

16 including the authority to require such retail 

17 electric supplier to acquire and submit to the 

18 Secretary for retirement Federal renewable 

19 electricity credits in excess of those submitted 

20 under this section; or 

21 ‘‘(2) affect the application of, or the responsi22 bility for compliance with, any other provision of law 

23 or regulation, including environmental and licensing 

24 requirements. 
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1 ‘‘(l) SUNSET.—This section expires on December 31, 

2 2040.’’. 

3 (b) CONFORMING AMENDMENT.—The table of con4 tents set forth in section 1(b) of the Public Utility Regu5 latory Policies Act of 1978 (16 U.S.C. 2601 and following) 

6 is amended by inserting after the item relating to section 

7 609 the following: 

‘‘Sec. 610. Combined efficiency and renewable electricity standard.’’. 

8 SEC. 102. CLARIFYING STATE AUTHORITY TO ADOPT RE9 NEWABLE ENERGY INCENTIVES. 

10 Section 210 of the Public Utility Regulatory Policies 

11 Act of 1978 is amended by adding at the end thereof: 

12 ‘‘(o) CLARIFICATION OF STATE AUTHORITY TO

13 ADOPT RENEWABLE ENERGY INCENTIVES.—Notwith14 standing any other provision of this Act or the Federal 

15 Power Act, a State legislature or regulatory authority may 

16 set the rates for a sale of electric energy by a facility gen17 erating electric energy from renewable energy sources pur18 suant to a State-approved production incentive program 

19 under which the facility voluntarily sells electric energy. 

20 For purposes of this subsection, ‘State-approved produc21 tion incentive program’ means a requirement imposed pur22 suant to State law, or by a State regulatory authority act23 ing within its authority under State law, that an electric 

24 utility purchase renewable energy (as defined in section 

25 609 of this Act) at a specified rate.’’. 
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1 SEC. 103. FEDERAL RENEWABLE ENERGY PURCHASES. 

2 (a) REQUIREMENT.—For each of calendar years 

3 2012 through 2039, the President shall ensure that, of 

4 the total amount of electricity Federal agencies consume 

5 in the United States during each calendar year, the fol6 lowing percentage shall be renewable electricity: 

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 

7 (b) DEFINITIONS.—For purposes of this section: 

8 (1) RENEWABLE ELECTRICITY.—The term ‘‘re9 newable electricity’’ shall have the meaning given in 

10 section 610 of the Public Utility Regulatory Policies 

11 Act of 1978 (16 U.S.C. 2601 and following). 

12 (2) RENEWABLE ENERGY RESOURCE.—The 

13 term ‘‘renewable energy resource’’ shall have the 

14 meaning given in section 610 of the Public Utility 

15 Regulatory Policies Act of 1978 (16 U.S.C. 2601 

16 and following). 

17 (c) MODIFICATION OF REQUIREMENT.—If the Presi18 dent determines that the Federal Government cannot fea19 sibly meet the requirement established in subsection (a) 
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1 in a specific calendar year, the President may, by written 

2 order, reduce such requirement for such calendar year to 

3 a percentage the President determines the Federal Gov4 ernment can feasibly meet. 

5 (d) REPORTS.—Not later than April 1, 2013, and 

6 each year thereafter, the Secretary of Energy shall provide 

7 a report to Congress on the percentage of each Federal 

8 agency’s electricity consumption in the United States that 

9 was renewable electricity in the previous calendar year. 

10 (e) CONTRACTS FOR RENEWABLE ENERGY.—(1) 

11 Notwithstanding section 501(b)(1)(B) of title 40, United 

12 States Code, a contract for the acquisition of electricity 

13 generated from a renewable energy resource for the Fed14 eral Government may be made for a period of not more 

15 than 20 years. 

16 (2) Not later than 90 days after the date of enact17 ment of this subsection, the Secretary of Energy, through 

18 the Federal Energy Management Program, shall publish 

19 a standardized renewable energy purchase agreement, set20 ting forth commercial terms and conditions, that Federal 

21 agencies may use to acquire electricity generated from a 

22 renewable energy resource. 

23 (3) The Secretary of Energy shall provide technical 

24 assistance to assist Federal agencies in implementing this 

25 subsection. 
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1 Subtitle B—Carbon Capture and 

2 Sequestration 

3 SEC. 111. NATIONAL STRATEGY. 

4 (a) IN GENERAL.—Not later than 1 year after the 

5 date of enactment of this Act, the Administrator, in con6 sultation with the Secretary of Energy, the Secretary of 

7 the Interior, and the heads of such other relevant Federal 

8 agencies as the President may designate, shall submit to 

9 Congress a report setting forth a unified and comprehen10 sive strategy to address the key legal, regulatory and other 

11 barriers to the commercial-scale deployment of carbon 

12 capture and sequestration. 

13 (b) BARRIERS.— The report under this section 

14 shall— 

15 (1) identify those regulatory, legal, and other 

16 gaps and barriers that could be addressed by a Fed17 eral agency using existing statutory authority, those, 

18 if any, that require Federal legislation, and those 

19 that would be best addressed at the State, tribal, or 

20 regional level; 

21 (2) identify regulatory implementation chal22 lenges, including those related to approval of State 

23 and tribal programs and delegation of authority for 

24 permitting; and 
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1 (3) recommend rulemakings, Federal legisla2 tion, or other actions that should be taken to further 

3 evaluate and address such barriers. 

4 SEC. 112. REGULATIONS FOR GEOLOGIC SEQUESTRATION 

5 SITES. 

6 (a) COORDINATED CERTIFICATION AND PERMITTING

7 PROCESS.—Title VIII of the Clean Air Act, as added by 

8 section 331 of this Act, is amended by adding after section 

9 812 (as added by section 116 of this Act) the following: 

10 ‘‘SEC. 813. GEOLOGIC SEQUESTRATION SITES. 

11 ‘‘(a) COORDINATED PROCESS.—The Administrator 

12 shall establish a coordinated approach to certifying and 

13 permitting geologic sequestration, taking into consider14 ation all relevant statutory authorities. In establishing 

15 such approach, the Administrator shall— 

16 ‘‘(1) take into account, and reduce redundancy 

17 with, the requirements of section 1421 of the Safe 

18 Drinking Water Act (42 U.S.C. 300h), as amended 

19 by section 112(b) of the American Clean Energy and 

20 Security Act of 2009, including the rulemaking for 

21 geologic sequestration wells described at 73 Fed. 

22 Reg. 43491–541 (July 25, 2008); and 

23 ‘‘(2) to the extent practicable, reduce the bur24 den on certified entities and implementing authori25 ties. 
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1 ‘‘(b) REGULATIONS.—Not later than 2 years after 

2 the date of enactment of this title, the Administrator shall 

3 promulgate regulations to protect human health and the 

4 environment by minimizing the risk of escape to the at5 mosphere of carbon dioxide injected for purposes of geo6 logic sequestration. 

7 ‘‘(c) REQUIREMENTS.—The regulations under sub8 section (b) shall include— 

9 ‘‘(1) a process to obtain certification for geo10 logic sequestration under this section; and 

11 ‘‘(2) requirements for— 

12 ‘‘(A) monitoring, record keeping, and re13 porting for emissions associated with injection 

14 into, and escape from, geologic sequestration 

15 sites, taking into account any requirements or 

16 protocols developed under section 713; 

17 ‘‘(B) public participation in the certifi18 cation process that maximizes transparency; 

19 ‘‘(C) the sharing of data between States, 

20 Indian tribes, and the Environmental Protec21 tion Agency; and 

22 ‘‘(D) other elements or safeguards nec23 essary to achieve the purpose set forth in sub24 section (b). 
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1 ‘‘(d) REPORT.—Not later than 2 years after the pro2 mulgation of regulations under subsection (b), and at 3- 

3 year intervals thereafter, the Administrator shall deliver 

4 to the Committee on Energy and Commerce of the House 

5 of Representatives and the Committee on Environment 

6 and Public Works of the Senate a report on geologic se7 questration in the United States, and, to the extent rel8 evant, other countries in North America. Such report shall 

9 include— 

10 ‘‘(1) data regarding injection, emissions to the 

11 atmosphere, if any, and performance of active and 

12 closed geologic sequestration sites, including those 

13 where enhanced hydrocarbon recovery operations 

14 occur; 

15 ‘‘(2) an evaluation of the performance of rel16 evant Federal environmental regulations and pro17 grams in ensuring environmentally protective geo18 logic sequestration practices; 

19 ‘‘(3) recommendations on how such programs 

20 and regulations should be improved or made more 

21 effective; and 

22 ‘‘(4) other relevant information.’’. 

23 (b) SAFE DRINKING WATER ACT STANDARDS.—Sec24 tion 1421 of the Safe Drinking Water Act (42 U.S.C. 
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1 300h) is amended by inserting after subsection (d) the fol2 lowing: 

3 ‘‘(e) CARBON DIOXIDE GEOLOGIC SEQUESTRATION

4 WELLS.— 

5 ‘‘(1) IN GENERAL.—Not later than 1 year after 

6 the date of enactment of this subsection, the Admin7 istrator shall promulgate regulations under sub8 section (a) for carbon dioxide geologic sequestration 

9 wells. 

10 ‘‘(2) FINANCIAL RESPONSIBILITY.—The regula11 tions referred to in paragraph (1) shall include re12 quirements for maintaining evidence of financial re13 sponsibility, including financial responsibility for 

14 emergency and remedial response, well plugging, site 

15 closure, and post-injection site care. Financial re16 sponsibility may be established for carbon dioxide 

17 geologic sequestration wells in accordance with regu18 lations promulgated by the Administrator by any 

19 one, or any combination, of the following: insurance, 

20 guarantee, trust, standby trust, surety bond, letter 

21 of credit, qualification as a self-insurer, or any other 

22 method satisfactory to the Administrator.’’. 

23 SEC. 113. STUDIES AND REPORTS. 

24 (a) STUDY OF LEGAL FRAMEWORK FOR GEOLOGIC

25 SEQUESTRATION SITES.— 
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1 (1) ESTABLISHMENT OF TASK FORCE.—As 

2 soon as practicable, but not later than 6 months 

3 after the date of enactment of this Act, the Adminis4 trator shall establish a task force to be composed of 

5 an equal number of subject matter experts, non6 governmental organizations with expertise in envi7 ronmental policy, academic experts with expertise in 

8 environmental law, State and tribal officials with en9 vironmental expertise, representatives of State and 

10 tribal Attorneys General, representatives from the 

11 Environmental Protection Agency, the Department 

12 of the Interior, the Department of Energy, the De13 partment of Transportation, and other relevant Fed14 eral agencies, and members of the private sector, to 

15 conduct a study of— 

16 (A) existing Federal environmental stat17 utes, State environmental statutes, and State 

18 common law that apply to geologic sequestra19 tion sites for carbon dioxide, including the abil20 ity of such laws to serve as risk management 

21 tools; 

22 (B) the existing statutory framework, in23 cluding Federal and State laws, that apply to 

24 harm and damage to the environment or public 

25 health at closed sites where carbon dioxide in-
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1 jection has been used for enhanced hydrocarbon 

2 recovery; 

3 (C) the statutory framework, environ4 mental health and safety considerations, imple5 mentation issues, and financial implications of 

6 potential models for Federal, State, or private 

7 sector assumption of liabilities and financial re8 sponsibilities with respect to closed geologic se9 questration sites; 

10 (D) private sector mechanisms, including 

11 insurance and bonding, that may be available to 

12 manage environmental, health and safety risk 

13 from closed geologic sequestration sites; and 

14 (E) the subsurface mineral rights, water 

15 rights, or property rights issues associated with 

16 geologic sequestration of carbon dioxide, includ17 ing issues specific to Federal lands. 

18 (2) REPORT.—Not later than 18 months after 

19 the date of enactment of this Act, the task force es20 tablished under paragraph (1) shall submit to Con21 gress a report describing the results of the study 

22 conducted under that paragraph including any con23 sensus recommendations of the task force. 

24 (b) ENVIRONMENTAL STATUTES.— 
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1 (1) STUDY.—The Administrator shall conduct a 

2 study examining how, and under what cir3 cumstances, the environmental statutes for which 

4 the Environmental Protection Agency has responsi5 bility would apply to carbon dioxide injection and 

6 geologic sequestration activities. 

7 (2) REPORT.—Not later than 1 year after the 

8 date of enactment of this Act, the Administrator 

9 shall submit to Congress a report describing the re10 sults of the study conducted under paragraph (1). 

11 SEC. 114. CARBON CAPTURE AND SEQUESTRATION DEM12 ONSTRATION AND EARLY DEPLOYMENT PRO13 GRAM. 

14 (a) DEFINITIONS.—For purposes of this section: 

15 (1) SECRETARY.—The term ‘‘Secretary’’ means 

16 the Secretary of Energy. 

17 (2) DISTRIBUTION UTILITY.—The term ‘‘dis18 tribution utility’’ means an entity that distributes 

19 electricity directly to retail consumers under a legal, 

20 regulatory, or contractual obligation to do so. 

21 (3) ELECTRIC UTILITY.—The term ‘‘electric 

22 utility’’ has the meaning provided by section 3(22) 

23 of the Federal Power Act (16 U.S.C. 796(22)). 
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1 (4) FOSSIL FUEL-BASED ELECTRICITY.—The 

2 term ‘‘fossil fuel-based electricity’’ means electricity 

3 that is produced from the combustion of fossil fuels. 

4 (5) FOSSIL FUEL.—The term ‘‘fossil fuel’’ 

5 means coal, petroleum, natural gas or any derivative 

6 of coal, petroleum, or natural gas. 

7 (6) CORPORATION.—The term ‘‘Corporation’’ 

8 means the Carbon Storage Research Corporation es9 tablished in accordance with this section. 

10 (7) QUALIFIED INDUSTRY ORGANIZATION.—The 

11 term ‘‘qualified industry organization’’ means the 

12 Edison Electric Institute, the American Public 

13 Power Association, the National Rural Electric Co14 operative Association, a successor organization of 

15 such organizations, or a group of owners or opera16 tors of distribution utilities delivering fossil fuel17 based electricity who collectively represent at least 

18 20 percent of the volume of fossil fuel-based elec19 tricity delivered by distribution utilities to consumers 

20 in the United States. 

21 (8) RETAIL CONSUMER.—The term ‘‘retail con22 sumer’’ means an end-user of electricity. 

23 (b) CARBON STORAGE RESEARCH CORPORATION.— 

24 (1) ESTABLISHMENT.— 
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1 (A) REFERENDUM.—Qualified industry or2 ganizations may conduct, at their own expense, 

3 a referendum among the owners or operators of 

4 distribution utilities delivering fossil fuel-based 

5 electricity for the creation of a Carbon Storage 

6 Research Corporation. Such referendum shall 

7 be conducted by an independent auditing firm 

8 agreed to by the qualified industry organiza9 tions. Voting rights in such referendum shall be 

10 based on the quantity of fossil fuel-based elec11 tricity delivered to consumers in the previous 

12 calendar year or other representative period as 

13 determined by the Secretary pursuant to sub14 section (f). Upon approval of those persons rep15 resenting two-thirds of the total quantity of fos16 sil fuel-based electricity delivered to retail con17 sumers, the Corporation shall be established un18 less opposed by the State regulatory authorities 

19 pursuant to subparagraph (B). All distribution 

20 utilities voting in the referendum shall certify to 

21 the independent auditing firm the quantity of 

22 fossil fuel-based electricity represented by their 

23 vote. 

24 (B) STATE REGULATORY AUTHORITIES.— 

25 Upon its own motion or the petition of a quali-
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•HR 2454 EH

1 fied industry organization, each State regu2 latory authority shall consider its support or op3 position to the creation of the Corporation 

4 under subparagraph (A). State regulatory au5 thorities may notify the independent auditing 

6 firm referred to in subparagraph (A) of their 

7 views on the creation of the Corporation within 

8 180 days after the date of enactment of this 

9 Act. If 40 percent or more of the State regu10 latory authorities submit to the independent au11 diting firm written notices of opposition, the 

12 Corporation shall not be established notwith13 standing the approval of the qualified industry 

14 organizations as provided in subparagraph (A). 

15 (2) TERMINATION.—The Corporation shall be 

16 authorized to collect assessments and conduct oper17 ations pursuant to this section for a 10-year period 

18 from the date 6 months after the date of enactment 

19 of this Act. After such 10-year period, the Corpora20 tion is no longer authorized to collect assessments 

21 and shall be dissolved on the date 15 years after 

22 such date of enactment, unless the period is ex23 tended by an Act of Congress. 

24 (3) GOVERNANCE.—The Corporation shall oper25 ate as a division or affiliate of the Electric Power 
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1 Research Institute (referred to in this section as 

2 ‘‘EPRI’’) and be managed by a Board of not more 

3 than 15 voting members responsible for its oper4 ations, including compliance with this section. EPRI, 

5 in consultation with the Edison Electric Institute, 

6 the American Public Power Association and the Na7 tional Rural Electric Cooperative Association shall 

8 appoint the Board members under clauses (i), (ii), 

9 and (iii) of subparagraph (A) from among can10 didates recommended by those organizations. At 

11 least a majority of the Board members appointed by 

12 EPRI shall be representatives of distribution utilities 

13 subject to assessments under subsection (d). 

14 (A) MEMBERS.—The Board shall include 

15 at least one representative of each of the fol16 lowing: 

17 (i) Investor-owned utilities. 

18 (ii) Utilities owned by a State agency, 

19 a municipality, and an Indian tribe. 

20 (iii) Rural electric cooperatives. 

21 (iv) Fossil fuel producers. 

22 (v) Nonprofit environmental organiza23 tions. 

24 (vi) Independent generators or whole25 sale power providers. 
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1 (vii) Consumer groups. 

2 (B) NONVOTING MEMBERS.—The Board 

3 shall also include as additional nonvoting Mem4 bers the Secretary of Energy or his designee 

5 and 2 representatives of State regulatory au6 thorities as defined in section 3(17) of the Pub7 lic Utility Regulatory Policies Act of 1978 (16 

8 U.S.C. 2602(17)), each designated by the Na9 tional Association of State Regulatory Utility 

10 Commissioners from States that are not within 

11 the same transmission interconnection. 

12 (4) COMPENSATION.—Corporation Board mem13 bers shall receive no compensation for their services, 

14 nor shall Corporation Board members be reimbursed 

15 for expenses relating to their service. 

16 (5) TERMS.—Corporation Board members shall 

17 serve terms of 4 years and may serve not more than 

18 2 full consecutive terms. Members filling unexpired 

19 terms may serve not more than a total of 8 consecu20 tive years. Former members of the Corporation 

21 Board may be reappointed to the Corporation Board 

22 if they have not been members for a period of 2 

23 years. Initial appointments to the Corporation Board 

24 shall be for terms of 1, 2, 3, and 4 years, staggered 

25 to provide for the selection of 3 members each year. 
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1 (6) STATUS OF CORPORATION.—The Corpora2 tion shall not be considered to be an agency, depart3 ment, or instrumentality of the United States, and 

4 no officer or director or employee of the Corporation 

5 shall be considered to be an officer or employee of 

6 the United States Government, for purposes of title 

7 5 or title 31 of the United States Code, or for any 

8 other purpose, and no funds of the Corporation shall 

9 be treated as public money for purposes of chapter 

10 33 of title 31, United States Code, or for any other 

11 purpose. 

12 (c) FUNCTIONS AND ADMINISTRATION OF THE COR13 PORATION.— 

14 (1) IN GENERAL.—The Corporation shall estab15 lish and administer a program to accelerate the com16 mercial availability of carbon dioxide capture and 

17 storage technologies and methods, including tech18 nologies which capture and store, or capture and 

19 convert, carbon dioxide. Under such program com20 petitively awarded grants, contracts, and financial 

21 assistance shall be provided and entered into with el22 igible entities. Except as provided in paragraph (8), 

23 the Corporation shall use all funds derived from as24 sessments under subsection (d) to issue grants and 

25 contracts to eligible entities. 
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1 (2) PURPOSE.—The purposes of the grants, 

2 contracts, and assistance under this subsection shall 

3 be to support commercial-scale demonstrations of 

4 carbon capture or storage technology projects capa5 ble of advancing the technologies to commercial 

6 readiness. Such projects should encompass a range 

7 of different coal and other fossil fuel varieties, be 

8 geographically diverse, involve diverse storage media, 

9 and employ capture or storage, or capture and con10 version, technologies potentially suitable either for 

11 new or for retrofit applications. The Corporation 

12 shall seek, to the extent feasible, to support at least 

13 5 commercial-scale demonstration projects inte14 grating carbon capture and sequestration or conver15 sion technologies. 

16 (3) ELIGIBLE ENTITIES.—Entities eligible for 

17 grants, contracts or assistance under this subsection 

18 may include distribution utilities, electric utilities 

19 and other private entities, academic institutions, na20 tional laboratories, Federal research agencies, State 

21 and tribal research agencies, nonprofit organizations, 

22 or consortiums of 2 or more entities. Pilot-scale and 

23 similar small-scale projects are not eligible for sup24 port by the Corporation. Owners or developers of 
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1 projects supported by the Corporation shall, where 

2 appropriate, share in the costs of such projects. 

3 (4) GRANTS FOR EARLY MOVERS.—Fifty per4 cent of the funds raised under this section shall be 

5 provided in the form of grants to electric utilities 

6 that had, prior to the award of any grant under this 

7 section, committed resources to deploy a large scale 

8 electricity generation unit with integrated carbon 

9 capture and sequestration or conversion applied to a 

10 substantial portion of the unit’s carbon dioxide emis11 sions. Grant funds shall be provided to defray costs 

12 incurred by such electricity utilities for at least 5 

13 such electricity generation units. 

14 (5) ADMINISTRATION.—The members of the 

15 Board of Directors of the Corporation shall elect a 

16 Chairman and other officers as necessary, may es17 tablish committees and subcommittees of the Cor18 poration, and shall adopt rules and bylaws for the 

19 conduct of business and the implementation of this 

20 section. The Board shall appoint an Executive Di21 rector and professional support staff who may be 

22 employees of the Electric Power Research Institute 

23 (EPRI). After consultation with the Technical Advi24 sory Committee established under subsection (j), the 

25 Secretary, and the Director of the National Energy 
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1 Technology Laboratory to obtain advice and rec2 ommendations on plans, programs, and project selec3 tion criteria, the Board shall establish priorities for 

4 grants, contracts, and assistance; publish requests 

5 for proposals for grants, contracts, and assistance; 

6 and award grants, contracts, and assistance competi7 tively, on the basis of merit, after the establishment 

8 of procedures that provide for scientific peer review 

9 by the Technical Advisory Committee. The Board 

10 shall give preference to applications that reflect the 

11 best overall value and prospect for achieving the 

12 purposes of the section, such as those which dem13 onstrate an integrated approach for capture and 

14 storage or capture and conversion technologies. The 

15 Board members shall not participate in making 

16 grants or awards to entities with whom they are af17 filiated. 

18 (6) USES OF GRANTS, CONTRACTS, AND ASSIST19 ANCE.—A grant, contract, or other assistance pro20 vided under this subsection may be used to purchase 

21 carbon dioxide when needed to conduct tests of car22 bon dioxide storage sites, in the case of established 

23 projects that are storing carbon dioxide emissions, or 

24 for other purposes consistent with the purposes of 

25 this section. The Corporation shall make publicly 
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1 available at no cost information learned as a result 

2 of projects which it supports financially. 

3 (7) INTELLECTUAL PROPERTY.—The Board 

4 shall establish policies regarding the ownership of in5 tellectual property developed as a result of Corpora6 tion grants and other forms of technology support. 

7 Such policies shall encourage individual ingenuity 

8 and invention. 

9 (8) ADMINISTRATIVE EXPENSES.—Up to 5 per10 cent of the funds collected in any fiscal year under 

11 subsection (d) may be used for the administrative 

12 expenses of operating the Corporation (not including 

13 costs incurred in the determination and collection of 

14 the assessments pursuant to subsection (d)). 

15 (9) PROGRAMS AND BUDGET.—Before August 1 

16 each year, the Corporation, after consulting with the 

17 Technical Advisory Committee and the Secretary 

18 and the Director of the Department’s National En19 ergy Technology Laboratory and other interested 

20 parties to obtain advice and recommendations, shall 

21 publish for public review and comment its proposed 

22 plans, programs, project selection criteria, and 

23 projects to be funded by the Corporation for the 

24 next calendar year. The Corporation shall also pub25 lish for public review and comment a budget plan for 
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1 the next calendar year, including the probable costs 

2 of all programs, projects, and contracts and a rec3 ommended rate of assessment sufficient to cover 

4 such costs. The Secretary may recommend programs 

5 and activities the Secretary considers appropriate. 

6 The Corporation shall include in the first publication 

7 it issues under this paragraph a strategic plan or 

8 roadmap for the achievement of the purposes of the 

9 Corporation, as set forth in paragraph (2). 

10 (10) RECORDS; AUDITS.—The Corporation shall 

11 keep minutes, books, and records that clearly reflect 

12 all of the acts and transactions of the Corporation 

13 and make public such information. The books of the 

14 Corporation shall be audited by a certified public ac15 countant at least once each fiscal year and at such 

16 other times as the Corporation may designate. Cop17 ies of each audit shall be provided to the Congress, 

18 all Corporation board members, all qualified indus19 try organizations, each State regulatory authority 

20 and, upon request, to other members of the industry. 

21 If the audit determines that the Corporation’s prac22 tices fail to meet generally accepted accounting prin23 ciples the assessment collection authority of the Cor24 poration under subsection (d) shall be suspended 

25 until a certified public accountant renders a subse-
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•HR 2454 EH

1 quent opinion that the failure has been corrected. 

2 The Corporation shall make its books and records 

3 available for review by the Secretary or the Comp4 troller General of the United States. 

5 (11) PUBLIC ACCESS.—The Corporation 

6 Board’s meetings shall be open to the public and 

7 shall occur after at least 30 days advance public no8 tice. Meetings of the Board of Directors may be 

9 closed to the public where the agenda of such meet10 ings includes only confidential matters pertaining to 

11 project selection, the award of grants or contracts, 

12 personnel matters, or the receipt of legal advice. The 

13 minutes of all meetings of the Corporation shall be 

14 made available to and readily accessible by the pub15 lic. 

16 (12) ANNUAL REPORT.—Each year the Cor17 poration shall prepare and make publicly available a 

18 report which includes an identification and descrip19 tion of all programs and projects undertaken by the 

20 Corporation during the previous year. The report 

21 shall also detail the allocation or planned allocation 

22 of Corporation resources for each such program and 

23 project. The Corporation shall provide its annual re24 port to the Congress, the Secretary, each State regu25 latory authority, and upon request to the public. The 
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1 Secretary shall, not less than 60 days after receiving 

2 such report, provide to the President and Congress 

3 a report assessing the progress of the Corporation in 

4 meeting the objectives of this section. 

5 (d) ASSESSMENTS.— 

6 (1) AMOUNT.—(A) In all calendar years fol7 lowing its establishment, the Corporation shall col8 lect an assessment on distribution utilities for all 

9 fossil fuel-based electricity delivered directly to retail 

10 consumers (as determined under subsection (f)). The 

11 assessments shall reflect the relative carbon dioxide 

12 emission rates of different fossil fuel-based elec13 tricity, and initially shall be not less than the fol14 lowing 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. 

15 (B) The Corporation is authorized to adjust the 

16 assessments on fossil fuel-based electricity to reflect 

17 changes in the expected quantities of such electricity 

18 from different fuel types, such that the assessments 

19 generate not less than $1.0 billion and not more 

20 than $1.1 billion annually. The Corporation is au21 thorized to supplement assessments through addi22 tional financial commitments. 
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1 (2) INVESTMENT OF FUNDS.—Pending dis2 bursement pursuant to a program, plan, or project, 

3 the Corporation may invest funds collected through 

4 assessments under this subsection, and any other 

5 funds received by the Corporation, only in obliga6 tions of the United States or any agency thereof, in 

7 general obligations of any State or any political sub8 division thereof, in any interest-bearing account or 

9 certificate of deposit of a bank that is a member of 

10 the Federal Reserve System, or in obligations fully 

11 guaranteed as to principal and interest by the 

12 United States. 

13 (3) REVERSION OF UNUSED FUNDS.—If the 

14 Corporation does not disburse, dedicate or assign 75 

15 percent or more of the available proceeds of the as16 sessed fees in any calendar year 7 or more years fol17 lowing its establishment, due to an absence of quali18 fied projects or similar circumstances, it shall reim19 burse the remaining undedicated or unassigned bal20 ance of such fees, less administrative and other ex21 penses authorized by this section, to the distribution 

22 utilities upon which such fees were assessed, in pro23 portion to their collected assessments. 

24 (e) ERCOT.— 
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1 (1) ASSESSMENT, COLLECTION, AND REMIT2 TANCE.—(A) Notwithstanding any other provision of 

3 this section, within ERCOT, the assessment pro4 vided for in subsection (d) shall be— 

5 (i) levied directly on qualified scheduling 

6 entities, or their successor entities; 

7 (ii) charged consistent with other charges 

8 imposed on qualified scheduling entities as a fee 

9 on energy used by the load-serving entities; and 

10 (iii) collected and remitted by ERCOT to 

11 the Corporation in the amounts and in the 

12 same manner as set forth in subsection (d). 

13 (B) The assessment amounts referred to in sub14 paragraph (A) shall be— 

15 (i) determined by the amount and types of 

16 fossil fuel-based electricity delivered directly to 

17 all retail customers in the prior calendar year 

18 beginning with the year ending immediately 

19 prior to the period described in subsection 

20 (b)(2); and 

21 (ii) take into account the number of renew22 able energy credits retired by the load-serving 

23 entities represented by a qualified scheduling 

24 entity within the prior calendar year. 
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1 (2) ADMINISTRATION EXPENSES.—Up to 1 per2 cent of the funds collected in any fiscal year by 

3 ERCOT under the provisions of this subsection may 

4 be used for the administrative expenses incurred in 

5 the determination, collection and remittance of the 

6 assessments to the Corporation. 

7 (3) AUDIT.—ERCOT shall provide a copy of its 

8 annual audit pertaining to the administration of the 

9 provisions of this subsection to the Corporation. 

10 (4) DEFINITIONS.—For the purposes of this 

11 subsection: 

12 (A) The term ‘‘ERCOT’’ means the Elec13 tric Reliability Council of Texas. 

14 (B) The term ‘‘load-serving entities’’ has 

15 the meaning adopted by ERCOT Protocols and 

16 in effect on the date of enactment of this Act. 

17 (C) The term ‘‘qualified scheduling enti18 ties’’ has the meaning adopted by ERCOT Pro19 tocols and in effect on the date of enactment of 

20 this Act. 

21 (D) The term ‘‘renewable energy credit’’ 

22 has the meaning as promulgated and adopted 

23 by the Public Utility Commission of Texas pur24 suant to section 39.904(b) of the Public Utility 
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1 Regulatory Act of 1999, and in effect on the 

2 date of enactment of this Act. 

3 (f) DETERMINATION OF FOSSIL FUEL-BASED ELEC4 TRICITY DELIVERIES.— 

5 (1) FINDINGS.—The Congress finds that: 

6 (A) The assessments under subsection (d) 

7 are to be collected based on the amount of fossil 

8 fuel-based electricity delivered by each distribu9 tion utility. 

10 (B) Since many distribution utilities pur11 chase all or part of their retail consumer’s elec12 tricity needs from other entities, it may not be 

13 practical to determine the precise fuel mix for 

14 the power sold by each individual distribution 

15 utility. 

16 (C) It may be necessary to use average 

17 data, often on a regional basis with reference to 

18 Regional Transmission Organization (‘‘RTO’’) 

19 or NERC regions, to make the determinations 

20 necessary for making assessments. 

21 (2) DOE PROPOSED RULE.—The Secretary, 

22 acting in close consultation with the Energy Infor23 mation Administration, shall issue for notice and 

24 comment a proposed rule to determine the level of 

25 fossil fuel electricity delivered to retail customers by 
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1 each distribution utility in the United States during 

2 the most recent calendar year or other period deter3 mined to be most appropriate. Such proposed rule 

4 shall balance the need to be efficient, reasonably pre5 cise, and timely, taking into account the nature and 

6 cost of data currently available and the nature of 

7 markets and regulation in effect in various regions 

8 of the country. Different methodologies may be ap9 plied in different regions if appropriate to obtain the 

10 best balance of such factors. 

11 (3) FINAL RULE.—Within 6 months after the 

12 date of enactment of this Act, and after opportunity 

13 for comment, the Secretary shall issue a final rule 

14 under this subsection for determining the level and 

15 type of fossil fuel-based electricity delivered to retail 

16 customers by each distribution utility in the United 

17 States during the appropriate period. In issuing 

18 such rule, the Secretary may consider opportunities 

19 and costs to develop new data sources in the future 

20 and issue recommendations for the Energy Informa21 tion Administration or other entities to collect such 

22 data. After notice and opportunity for comment the 

23 Secretary may, by rule, subsequently update and 

24 modify the methodology for making such determina25 tions. 
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1 (4) ANNUAL DETERMINATIONS.—Pursuant to 

2 the final rule issued under paragraph (3), the Sec3 retary shall make annual determinations of the 

4 amounts and types for each such utility and publish 

5 such determinations in the Federal Register. Such 

6 determinations shall be used to conduct the ref7 erendum under subsection (b) and by the Corpora8 tion in applying any assessment under this sub9 section. 

10 (5) REHEARING AND JUDICIAL REVIEW.—The 

11 owner or operator of any distribution utility that be12 lieves that the Secretary has misapplied the method13 ology in the final rule in determining the amount 

14 and types of fossil fuel electricity delivered by such 

15 distribution utility may seek rehearing of such deter16 mination within 30 days of publication of the deter17 mination in the Federal Register. The Secretary 

18 shall decide such rehearing petitions within 30 days. 

19 The Secretary’s determinations following rehearing 

20 shall be final and subject to judicial review in the 

21 United States Court of Appeals for the District of 

22 Columbia. 

23 (g) COMPLIANCE WITH CORPORATION ASSESS24 MENTS.—The Corporation may bring an action in the ap25 propriate court of the United States to compel compliance 
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1 with an assessment levied by the Corporation under this 

2 section. A successful action for compliance under this sub3 section may also require payment by the defendant of the 

4 costs incurred by the Corporation in bringing such action. 

5 (h) MIDCOURSE REVIEW.—Not later than 5 years 

6 following establishment of the Corporation, the Comp7 troller General of the United States shall prepare an anal8 ysis, and report to Congress, assessing the Corporation’s 

9 activities, including project selection and methods of dis10 bursement of assessed fees, impacts on the prospects for 

11 commercialization of carbon capture and storage tech12 nologies, adequacy of funding, and administration of 

13 funds. The report shall also make such recommendations 

14 as may be appropriate in each of these areas. The Cor15 poration shall reimburse the Government Accountability 

16 Office for the costs associated with performing this mid17 course review. 

18 (i) RECOVERY OF COSTS.— 

19 (1) IN GENERAL.—A distribution utility whose 

20 transmission, delivery, or sales of electric energy are 

21 subject to any form of rate regulation shall not be 

22 denied the opportunity to recover the full amount of 

23 the prudently incurred costs associated with com24 plying with this section, consistent with applicable 

25 State or Federal law. 
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1 (2) RATEPAYER REBATES.—Regulatory authori2 ties that approve cost recovery pursuant to para3 graph (1) may order rebates to ratepayers to the ex4 tent that distribution utilities are reimbursed 

5 undedicated or unassigned balances pursuant to sub6 section (d)(3). 

7 (j) TECHNICAL ADVISORY COMMITTEE.— 

8 (1) ESTABLISHMENT.—There is established an 

9 advisory committee, to be known as the ‘‘Technical 

10 Advisory Committee’’. 

11 (2) MEMBERSHIP.—The Technical Advisory 

12 Committee shall be comprised of not less than 7 

13 members appointed by the Board from among aca14 demic institutions, national laboratories, independent 

15 research institutions, and other qualified institu16 tions. No member of the Committee shall be affili17 ated with EPRI or with any organization having 

18 members serving on the Board. At least one member 

19 of the Committee shall be appointed from among of20 ficers or employees of the Department of Energy 

21 recommended to the Board by the Secretary of En22 ergy. 

23 (3) CHAIRPERSON AND VICE CHAIRPERSON.— 

24 The Board shall designate one member of the Tech25 nical Advisory Committee to serve as Chairperson of 
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1 the Committee and one to serve as Vice Chairperson 

2 of the Committee. 

3 (4) COMPENSATION.—The Board shall provide 

4 compensation to members of the Technical Advisory 

5 Committee for travel and other incidental expenses 

6 and such other compensation as the Board deter7 mines to be necessary. 

8 (5) PURPOSE.—The Technical Advisory Com9 mittee shall provide independent assessments and 

10 technical evaluations, as well as make non-binding 

11 recommendations to the Board, concerning Corpora12 tion activities, including but not limited to the fol13 lowing: 

14 (A) Reviewing and evaluating the Corpora15 tion’s plans and budgets described in subsection 

16 (c)(9), as well as any other appropriate areas, 

17 which could include approaches to prioritizing 

18 technologies, appropriateness of engineering 

19 techniques, monitoring and verification tech20 nologies for storage, geological site selection, 

21 and cost control measures. 

22 (B) Making annual non-binding rec23 ommendations to the Board concerning any of 

24 the matters referred to in subparagraph (A), as 

25 well as what types of investments, scientific re-
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•HR 2454 EH

1 search, or engineering practices would best fur2 ther the goals of the Corporation. 

3 (6) PUBLIC AVAILABILITY.—All reports, evalua4 tions, and other materials of the Technical Advisory 

5 Committee shall be made available to the public by 

6 the Board, without charge, at time of receipt by the 

7 Board. 

8 (k) LOBBYING RESTRICTIONS.—No funds collected 

9 by the Corporation shall be used in any manner for influ10 encing legislation or elections, except that the Corporation 

11 may recommend to the Secretary and the Congress 

12 changes in this section or other statutes that would fur13 ther the purposes of this section. 

14 (l) DAVIS-BACON COMPLIANCE.—The Corporation 

15 shall ensure that entities receiving grants, contracts, or 

16 other financial support from the Corporation for the 

17 project activities authorized by this section are in compli18 ance with the Davis-Bacon Act (40 U.S.C. 276a–276a– 

19 5). 

20 SEC. 115. COMMERCIAL DEPLOYMENT OF CARBON CAP21 TURE AND SEQUESTRATION TECHNOLOGIES. 

22 Part H of title VII of the Clean Air Act (as added 

23 by section 321 of this Act) is amended by adding the fol24 lowing new section after section 785: 
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1 ‘‘SEC. 786. COMMERCIAL DEPLOYMENT OF CARBON CAP2 TURE AND SEQUESTRATION TECHNOLOGIES. 

3 ‘‘(a) REGULATIONS.—Not later than 2 years after 

4 the date of enactment of this title, the Administrator shall 

5 promulgate regulations providing for the distribution of 

6 emission allowances allocated pursuant to section 782(f), 

7 pursuant to the requirements of this section, to support 

8 the commercial deployment of carbon capture and seques9 tration technologies in both electric power generation and 

10 industrial operations. 

11 ‘‘(b) ELIGIBILITY CRITERIA.—For an owner or oper12 ator of a project to be eligible to receive emission allow13 ances under this section, the project must— 

14 ‘‘(1) implement carbon capture and sequestra15 tion technology— 

16 ‘‘(A) at an electric generating unit that— 

17 ‘‘(i) has a nameplate capacity of 200 

18 megawatts or more; 

19 ‘‘(ii) in the case of a retrofit applica20 tion, applies the carbon capture and se21 questration technology to the flue gas from 

22 at least 200 megawatts of the total name23 plate generating capacity of the unit, pro24 vided that clause (i) shall apply without ex25 ception; 
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1 ‘‘(iii) derives at least 50 percent of its 

2 annual fuel input from coal, petroleum 

3 coke, or any combination of these 2 fuels; 

4 and 

5 ‘‘(iv) upon implementation of capture 

6 and sequestration technology, will achieve 

7 an emission limit that is at least a 50 per8 cent reduction in emissions of the carbon 

9 dioxide produced by— 

10 ‘‘(I) the unit, measured on an 

11 annual basis, determined in accord12 ance with section 812(b)(2); or 

13 ‘‘(II) in the case of retrofit appli14 cations under clause (ii), the treated 

15 portion of flue gas from the unit, 

16 measured on an annual basis, deter17 mined in accordance with section 

18 812(b)(2); or 

19 ‘‘(B) at an industrial source that— 

20 ‘‘(i) absent carbon capture and se21 questration, would emit greater than 

22 50,000 tons per year of carbon dioxide; 

23 ‘‘(ii) upon implementation, will 

24 achieve an emission limit that is at least a 

25 50 percent reduction in emissions of the 
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1 carbon dioxide produced by the emission 

2 point, measured on an annual basis, deter3 mined in accordance with section 

4 812(b)(2); and 

5 ‘‘(iii) does not produce a liquid trans6 portation fuel from a solid fossil-based 

7 feedstock; 

8 ‘‘(2) geologically sequester carbon dioxide at a 

9 site that meets all applicable permitting and certifi10 cation requirements for geologic sequestration, or, 

11 pursuant to such requirements as the Administrator 

12 may prescribe by regulation, convert captured car13 bon dioxide to a stable form that will safely and per14 manently sequester such carbon dioxide; 

15 ‘‘(3) meet all other applicable State, tribal, and 

16 Federal permitting requirements; and 

17 ‘‘(4) be located in the United States. 

18 ‘‘(c) PHASE I DISTRIBUTION TO ELECTRIC GENER19 ATING UNITS.— 

20 ‘‘(1) APPLICATION.—This subsection shall 

21 apply only to projects at the first 6 gigawatts of 

22 electric generating units, measured in cumulative 

23 generating capacity of such units, that receive allow24 ances under this section. 
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1 ‘‘(2) DISTRIBUTION.—The Administrator shall 

2 distribute emission allowances allocated under sec3 tion 782(f) to the owner or operator of each eligible 

4 project at an electric generating unit in a quantity 

5 equal to the quotient obtained by dividing— 

6 ‘‘(A) the product obtained by multi7 plying— 

8 ‘‘(i) the number of metric tons of car9 bon dioxide emissions avoided through cap10 ture and sequestration of emissions by the 

11 project, as determined pursuant to such 

12 methodology as the Administrator shall 

13 prescribe by regulation; and 

14 ‘‘(ii) a bonus allowance value, pursu15 ant to paragraph (3); by 

16 ‘‘(B) the average fair market value of an 

17 emission allowance during the preceding year. 

18 ‘‘(3) BONUS ALLOWANCE VALUES.— 

19 ‘‘(A) For a generating unit achieving the 

20 capture and sequestration of 85 percent or 

21 more of the carbon dioxide that otherwise would 

22 be emitted by such unit, the bonus allowance 

23 value shall be $90 per ton. 

24 ‘‘(B) The Administrator shall by regulation 

25 establish a bonus allowance value for each rate 
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1 of lower capture and sequestration achieved by 

2 a generating unit, from a minimum of $50 per 

3 ton for a 50 percent rate and varying directly 

4 with increasing rates of capture and sequestra5 tion up to $90 per ton for an 85 percent rate. 

6 ‘‘(C) For a generating unit that achieves 

7 the capture and sequestration of at least 50 

8 percent of the carbon dioxide that otherwise 

9 would be emitted by such unit by not later than 

10 January 1, 2017, the otherwise applicable 

11 bonus allowance value under this paragraph 

12 shall be increased by $10, provided that the 

13 owner of such unit notifies the Administrator 

14 by not later than January 1, 2012, of its intent 

15 to achieve such rate of capture and sequestra16 tion. 

17 ‘‘(D) For a carbon capture and sequestra18 tion project sequestering in a geological forma19 tion for purposes of enhanced hydrocarbon re20 covery, the Administrator shall, by regulation, 

21 reduce the applicable bonus allowance value 

22 under this paragraph to reflect the lower net 

23 cost of the project when compared to sequestra24 tion into geological formations solely for pur25 poses of sequestration. 
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1 ‘‘(E) The Administrator shall annually ad2 just for inflation the bonus allowance values es3 tablished under this paragraph. 

4 ‘‘(d) PHASE II DISTRIBUTION TO ELECTRIC GENER5 ATING UNITS.— 

6 ‘‘(1) APPLICATION.—This subsection shall 

7 apply only to the distribution of emission allowances 

8 for carbon capture and sequestration projects at 

9 electric generating units after the capacity threshold 

10 identified in subsection (c)(1) is reached. 

11 ‘‘(2) REGULATIONS.—Not later than 2 years 

12 prior to the date on which the capacity threshold 

13 identified in subsection (c)(1) is projected to be 

14 reached, the Administrator shall promulgate regula15 tions to govern the distribution of emission allow16 ances to the owners or operators of eligible projects 

17 under this subsection. 

18 ‘‘(3) REVERSE AUCTIONS.— 

19 ‘‘(A) IN GENERAL.—Except as provided in 

20 paragraph (4), the regulations promulgated 

21 under paragraph (2) shall provide for the dis22 tribution of emission allowances to the owners 

23 or operators of eligible projects under this sub24 section through reverse auctions, which shall be 

25 held no less frequently than once each calendar 
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1 year. The Administrator may establish a sepa2 rate auction for each of no more than 5 dif3 ferent project categories, defined on the basis of 

4 coal type, capture technology, geological forma5 tion type, new unit versus retrofit application, 

6 such other factors as the Administrator may 

7 prescribe, or any combination thereof. The Ad8 ministrator may establish appropriate minimum 

9 rates of capture and sequestration in imple10 menting this paragraph. 

11 ‘‘(B) AUCTION PROCESS.—At each reverse 

12 auction— 

13 ‘‘(i) the Administrator shall solicit 

14 bids from eligible projects; 

15 ‘‘(ii) eligible projects participating in 

16 the auction shall submit a bid including 

17 the desired level of carbon dioxide seques18 tration incentive per ton and the estimated 

19 quantity of carbon dioxide that the project 

20 will permanently sequester over 10 years; 

21 and 

22 ‘‘(iii) the Administrator shall select 

23 bids, within each auction, for the seques24 tration amount submitted, beginning with 

25 the eligible project submitting the bid for 
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1 the lowest level of sequestration incentive 

2 on a per ton basis and meeting such other 

3 requirements as the Administrator may 

4 specify, until the amount of funds available 

5 for the reverse auction is committed. 

6 ‘‘(C) FORM OF DISTRIBUTION.—The Ad7 ministrator shall distribute emission allowances 

8 to the owners or operators of eligible projects 

9 selected through a reverse auction under this 

10 paragraph pursuant to a formula equivalent to 

11 that described in subsection (c)(2), except that 

12 the bonus allowance value that is bid by the en13 tity shall be substituted for the bonus allowance 

14 values set forth in subsection (c)(3). 

15 ‘‘(4) ALTERNATIVE DISTRIBUTION METHOD.— 

16 ‘‘(A) IN GENERAL.—If the Administrator 

17 determines that reverse auctions would not pro18 vide for efficient and cost-effective commercial 

19 deployment of carbon capture and sequestration 

20 technologies, the Administrator may instead, 

21 through regulations promulgated under para22 graph (2) or (5), prescribe a schedule for the 

23 award of bonus allowances to the owners or op24 erators of eligible projects under this sub-
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1 section, in accordance with the requirements of 

2 this paragraph. 

3 ‘‘(B) MULTIPLE TRANCHES.—The Admin4 istrator shall divide emission allowances avail5 able for distribution to the owners or operators 

6 of eligible projects into a series of tranches, 

7 each supporting the deployment of a specified 

8 quantity of cumulative electric generating ca9 pacity utilizing carbon capture and sequestra10 tion technology, each of which shall not be 

11 greater than 6 gigawatts. 

12 ‘‘(C) METHOD OF DISTRIBUTION.—The 

13 Administrator shall distribute emission allow14 ances within each tranche, on a first-come, 

15 first-served basis— 

16 ‘‘(i) based on the date of full-scale op17 eration of capture and sequestration tech18 nology; and 

19 ‘‘(ii) pursuant to a formula, similar to 

20 that set forth in subsection (c)(2) (except 

21 that the Administrator shall prescribe 

22 bonus allowance values different than those 

23 set forth in subsection (c)(3)), establishing 

24 the number of allowances to be distributed 
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1 per ton of carbon dioxide sequestered by 

2 the project. 

3 ‘‘(D) REQUIREMENTS.—For each tranche 

4 established pursuant to subparagraph (B), the 

5 Administrator shall establish a schedule for dis6 tributing emission allowances that— 

7 ‘‘(i) is based on a sliding scale that 

8 provides higher bonus allowance values for 

9 projects achieving higher rates of capture 

10 and sequestration; 

11 ‘‘(ii) for each capture and sequestra12 tion rate, establishes a bonus allowance 

13 value that is lower than that established 

14 for such rate in the previous tranche (or, 

15 in the case of the first tranche, than that 

16 established for such rate under subsection 

17 (c)(3)); and 

18 ‘‘(iii) may establish different bonus al19 lowance levels for no more than 5 different 

20 project categories, defined by coal type, 

21 capture technology, geological formation 

22 type, new unit versus retrofit application, 

23 such other factors as the Administrator 

24 may prescribe, or any combination thereof. 
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1 ‘‘(E) CRITERIA FOR ESTABLISHING BONUS

2 ALLOWANCE VALUES.—In setting bonus allow3 ance values under this paragraph, the Adminis4 trator shall seek to cover no more than the rea5 sonable incremental capital and operating costs 

6 of a project that are attributable to implemen7 tation of carbon capture, transportation, and 

8 sequestration technologies, taking into ac9 count— 

10 ‘‘(i) the reduced cost of compliance 

11 with section 722 of this Act; 

12 ‘‘(ii) the reduced cost associated with 

13 sequestering in a geological formation for 

14 purposes of enhanced hydrocarbon recovery 

15 when compared to sequestration into geo16 logical formations solely for purposes of se17 questration; 

18 ‘‘(iii) the relevant factors defining the 

19 project category; and 

20 ‘‘(iv) such other factors as the Admin21 istrator determines are appropriate. 

22 ‘‘(5) REVISION OF REGULATIONS.—The Admin23 istrator shall review, and as appropriate revise, the 

24 applicable regulations under this subsection no less 

25 frequently than every 8 years. 
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1 ‘‘(e) LIMITS FOR CERTAIN ELECTRIC GENERATING

2 UNITS.— 

3 ‘‘(1) DEFINITIONS.—For purposes of this sub4 section, the terms ‘covered EGU’ and ‘initially per5 mitted’ shall have the meaning given those terms in 

6 section 812 of this Act. 

7 ‘‘(2) COVERED EGUS INITIALLY PERMITTED

8 FROM 2009 THROUGH 2014.—For a covered EGU 

9 that is initially permitted on or after January 1, 

10 2009, and before January 1, 2015, the Adminis11 trator shall reduce the quantity of emission allow12 ances that the owner or operator of such covered 

13 EGU would otherwise be eligible to receive under 

14 this section as follows: 

15 ‘‘(A) In the case of a unit commencing op16 eration on or before January 1, 2019, if the 

17 date in clause (ii)(I) is earlier than the date in 

18 clause (ii)(II), by the product of— 

19 ‘‘(i) 20 percent; and 

20 ‘‘(ii) the number of years, if any, that 

21 have elapsed between— 

22 ‘‘(I) the earlier of January 1, 

23 2020, or the date that is 5 years after 

24 the commencement of operation of 

25 such covered EGU; and 
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1 ‘‘(II) the first year that such cov2 ered EGU achieves (and thereafter 

3 maintains) an emission limit that is at 

4 least a 50 percent reduction in emis5 sions of the carbon dioxide produced 

6 by the unit, measured on an annual 

7 basis, as determined in accordance 

8 with section 812(b)(2). 

9 ‘‘(B) In the case of a unit commencing op10 eration after January 1, 2019, by the product 

11 of— 

12 ‘‘(i) 20 percent; and 

13 ‘‘(ii) the number of years between— 

14 ‘‘(I) the commencement of oper15 ation of such covered EGU; and 

16 ‘‘(II) the first year that such cov17 ered EGU achieves (and thereafter 

18 maintains) an emission limit that is at 

19 least a 50 percent reduction in emis20 sions of the carbon dioxide produced 

21 by the unit, measured on an annual 

22 basis, as determined in accordance 

23 with section 812(b)(2). 

24 ‘‘(3) COVERED EGUS INITIALLY PERMITTED

25 FROM 2015 THROUGH 2019.—The owner or operator 
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1 of a covered EGU that is initially permitted on or 

2 after January 1, 2015, and before January 1, 2020, 

3 shall be ineligible to receive emission allowances pur4 suant to this section if such unit, upon commence5 ment of operations (and thereafter), does not achieve 

6 and maintain an emission limit that is at least a 50 

7 percent reduction in emissions of the carbon dioxide 

8 produced by the unit, measured on an annual basis, 

9 as determined in accordance with section 812(b)(2). 

10 ‘‘(f) INDUSTRIAL SOURCES.— 

11 ‘‘(1) ALLOWANCES.—The Administrator may 

12 distribute not more than 15 percent of the allow13 ances allocated under section 782(f) for any vintage 

14 year to the owners or operators of eligible industrial 

15 sources to support the commercial-scale deployment 

16 of carbon capture and sequestration technologies at 

17 such sources. 

18 ‘‘(2) DISTRIBUTION.—The Administrator shall, 

19 by regulation, prescribe requirements for the dis20 tribution of emission allowances to the owners or op21 erators of industrial sources under this subsection, 

22 based on a bonus allowance formula that awards al23 lowances to qualifying projects on the basis of tons 

24 of carbon dioxide captured and permanently seques-
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1 tered. The Administrator may provide for the dis2 tribution of emission allowances pursuant to— 

3 ‘‘(A) a reverse auction method, similar to 

4 that described under subsection (d)(3), includ5 ing the use of separate auctions for different 

6 project categories; or 

7 ‘‘(B) an incentive schedule, similar to that 

8 described under subsection (d)(4), which shall 

9 ensure that incentives are set so as to satisfy 

10 the requirement described in subsection 

11 (d)(4)(E). 

12 ‘‘(3) REVISION OF REGULATIONS.—The Admin13 istrator shall review, and as appropriate revise, the 

14 applicable regulations under this subsection no less 

15 frequently than every 8 years. 

16 ‘‘(g) LIMITATIONS.—Allowances may be distributed 

17 under this section only for tons of carbon dioxide emis18 sions that have already been captured and sequestered. A 

19 qualifying project may receive annual emission allowances 

20 under this section only for the first 10 years of operation. 

21 No greater than 72 gigawatts of total cumulative gener22 ating capacity (including industrial applications, measured 

23 by such equivalent metric as the Administrator may des24 ignate) may receive emission allowances under this sec25 tion. Upon reaching the limit described in the preceding 
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1 sentence, any emission allowances that are allocated for 

2 carbon capture and sequestration deployment under sec3 tion 782(f) and are not yet obligated under this section 

4 shall be treated as allowances not designated for distribu5 tion for purposes of section 782(r). 

6 ‘‘(h) EXHAUSTION OF ACCOUNT AND ANNUAL ROLL7 OVER OF SURPLUS ALLOWANCES.— 

8 ‘‘(1) In distributing emission allowances under 

9 this section, the Administrator shall ensure that 

10 qualifying projects receiving allowances receive dis11 tributions for 10 years. 

12 ‘‘(2) If the Administrator determines that the 

13 emission allowances allocated under section 782(f) 

14 with a vintage year that matches the year of dis15 tribution will be exhausted once the estimated full 

16 10-year distributions will be provided to current eli17 gible participants, the Administrator shall provide to 

18 new eligible projects allowances from vintage years 

19 after the year of the distribution. 

20 ‘‘(i) RETROFIT APPLICATIONS.—(1) In calculating 

21 bonus allowance values for retrofit applications eligible 

22 under subsection (b)(1)(A)(ii) and (iv)(II), the Adminis23 trator shall apply the required capture rates with respect 

24 to the treated portion of flue gas from the unit. 
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1 ‘‘(2) No additional projects shall be eligible for allow2 ances under subsection (b)(1)(A)(ii) and (iv)(II) as of such 

3 time as the Administrator reports, pursuant to section 

4 812(d), that carbon capture and sequestration retrofit 

5 projects at electric generating units that are eligible for 

6 allowances under this section have been applied, in the ag7 gregate, to the flue gas generated by 1 gigawatt of total 

8 cumulative generating capacity. The limitation in the pre9 ceding sentence shall not apply to projects that meet the 

10 eligibility criteria in subsection (b)(1)(A)(iv)(I). 

11 ‘‘(j) DAVIS-BACON COMPLIANCE.—All laborers and 

12 mechanics employed on projects funded directly by or as13 sisted in whole or in part by this section through the use 

14 of emission allowances shall be paid wages at rates not 

15 less than those prevailing on projects of a character simi16 lar in the locality as determined by the Secretary of Labor 

17 in accordance with subchapter IV, chapter 31, part A of 

18 subtitle II of title 40, United States Code. With respect 

19 to the labor standards specified in this subsection, the Sec20 retary of Labor shall have the authority and functions set 

21 forth in Reorganization Plan Numbered 14 of 1950 (64 

22 Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40, 

23 United States Code.’’. 
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1 SEC. 116. PERFORMANCE STANDARDS FOR COAL-FUELED 

2 POWER PLANTS. 

3 (a) IN GENERAL.—Title VIII of the Clean Air Act 

4 (as added by section 331 of this Act) is amended by add5 ing the following new section after section 811: 

6 ‘‘SEC. 812. PERFORMANCE STANDARDS FOR NEW COAL7 FIRED POWER PLANTS. 

8 ‘‘(a) DEFINITIONS.—For purposes of this section: 

9 ‘‘(1) COVERED EGU.—The term ‘covered EGU’ 

10 means a utility unit that is required to have a per11 mit under section 503(a) and is authorized under 

12 state or federal law to derive at least 30 percent of 

13 its annual heat input from coal, petroleum coke, or 

14 any combination of these fuels. 

15 ‘‘(2) INITIALLY PERMITTED.—The term ‘ini16 tially permitted’ means that the owner or operator 

17 has received a Clean Air Act preconstruction ap18 proval or permit, for the covered EGU as a new (not 

19 a modified) source, but administrative review or ap20 peal of such approval or permit has not been ex21 hausted. A subsequent modification of any such ap22 proval or permits, ongoing administrative or court 

23 review, appeals, or challenges, or the existence or 

24 tolling of any time to pursue further review, appeals, 

25 or challenges shall not affect the date on which a 
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1 covered EGU is considered to be initially permitted 

2 under this paragraph. 

3 ‘‘(b) STANDARDS.—(1) A covered EGU that is ini4 tially permitted on or after January 1, 2020, shall achieve 

5 an emission limit that is a 65 percent reduction in emis6 sions of the carbon dioxide produced by the unit, as 

7 measured on an annual basis, or meet such more stringent 

8 standard as the Administrator may establish pursuant to 

9 subsection (c). 

10 ‘‘(2) A covered EGU that is initially permitted after 

11 January 1, 2009, and before January 1, 2020, shall, by 

12 the applicable compliance date established under this 

13 paragraph, achieve an emission limit that is a 50 percent 

14 reduction in emissions of the carbon dioxide produced by 

15 the unit, as measured on an annual basis. Compliance 

16 with the requirement set forth in this paragraph shall be 

17 required by the earliest of the following: 

18 ‘‘(A) Four years after the date the Adminis19 trator has published pursuant to subsection (d) a re20 port that there are in commercial operation in the 

21 United States electric generating units or other sta22 tionary sources equipped with carbon capture and 

23 sequestration technology that, in the aggregate— 

24 ‘‘(i) have a total of at least 4 gigawatts of 

25 nameplate generating capacity of which— 
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1 ‘‘(I) at least 3 gigawatts must be elec2 tric generating units; and 

3 ‘‘(II) up to 1 gigawatt may be indus4 trial applications, for which capture and 

5 sequestration of 3 million tons of carbon 

6 dioxide per year on an aggregate 

7 annualized basis shall be considered equiv8 alent to 1 gigawatt; 

9 ‘‘(ii) include at least 2 electric generating 

10 units, each with a nameplate generating capac11 ity of 250 megawatts or greater, that capture, 

12 inject, and sequester carbon dioxide into geo13 logic formations other than oil and gas fields; 

14 and 

15 ‘‘(iii) are capturing and sequestering in the 

16 aggregate at least 12 million tons of carbon di17 oxide per year, calculated on an aggregate 

18 annualized basis. 

19 ‘‘(B) January 1, 2025. 

20 ‘‘(3) If the deadline for compliance with paragraph 

21 (2) is January 1, 2025, the Administrator may extend the 

22 deadline for compliance by a covered EGU by up to 18 

23 months if the Administrator makes a determination, based 

24 on a showing by the owner or operator of the unit, that 

25 it will be technically infeasible for the unit to meet the 
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1 standard by the deadline. The owner or operator must 

2 submit a request for such an extension by no later than 

3 January 1, 2022, and the Administrator shall provide for 

4 public notice and comment on the extension request. 

5 ‘‘(c) REVIEW AND REVISION OF STANDARDS.—Not 

6 later than 2025 and at 5-year intervals thereafter, the Ad7 ministrator shall review the standards for new covered 

8 EGUs under this section and shall, by rule, reduce the 

9 maximum carbon dioxide emission rate for new covered 

10 EGUs to a rate which reflects the degree of emission limi11 tation achievable through the application of the best sys12 tem of emission reduction which (taking into account the 

13 cost of achieving such reduction and any nonair quality 

14 health and environmental impact and energy require15 ments) the Administrator determines has been adequately 

16 demonstrated. 

17 ‘‘(d) REPORTS.—Not later than the date 18 months 

18 after the date of enactment of this title and semiannually 

19 thereafter, the Administrator shall publish a report on the 

20 nameplate capacity of units (determined pursuant to sub21 section (b)(2)(A)) in commercial operation in the United 

22 States equipped with carbon capture and sequestration 

23 technology, including the information described in sub24 section (b)(2)(A) (including the cumulative generating ca25 pacity to which carbon capture and sequestration retrofit 
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1 projects meeting the criteria described in section 

2 786(b)(1)(A)(ii) and (b)(1)(A)(iv)(II) has been applied 

3 and the quantities of carbon dioxide captured and seques4 tered by such projects). 

5 ‘‘(e) REGULATIONS.—Not later than 2 years after the 

6 date of enactment of this title, the Administrator shall 

7 promulgate regulations to carry out the requirements of 

8 this section.’’. 

9 Subtitle C—Clean Transportation 

10 SEC. 121. ELECTRIC VEHICLE INFRASTRUCTURE. 

11 (a) AMENDMENT OF PURPA.—Section 111(d) of the 

12 Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 

13 2621(d)) is amended by adding at the end the following: 

14 ‘‘(20) PLUG-IN ELECTRIC DRIVE VEHICLE IN15 FRASTRUCTURE.— 

16 ‘‘(A) UTILITY PLAN FOR INFRASTRUC17 TURE.—Each electric utility shall develop a 

18 plan to support the use of plug-in electric drive 

19 vehicles, including heavy-duty hybrid electric ve20 hicles. The plan may provide for deployment of 

21 electrical charging stations in public or private 

22 locations, including street parking, parking ga23 rages, parking lots, homes, gas stations, and 

24 highway rest stops. Any such plan may also in25 clude— 
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1 ‘‘(i) battery exchange, fast charging 

2 infrastructure and other services; 

3 ‘‘(ii) triggers for infrastructure de4 ployment based upon market penetration 

5 of plug-in electric drive vehicles; and 

6 ‘‘(iii) such other elements as the State 

7 determines necessary to support plug-in 

8 electric drive vehicles. 

9 Each plan under this paragraph shall provide 

10 for the deployment of the charging infrastruc11 ture or other infrastructure necessary to ade12 quately support the use of plug-in electric drive 

13 vehicles. 

14 ‘‘(B) SUPPORT REQUIREMENTS.—Each 

15 State regulatory authority (in the case of each 

16 electric utility for which it has ratemaking au17 thority) and each utility (in the case of a non18 regulated utility) shall— 

19 ‘‘(i) require that charging infrastruc20 ture deployed is interoperable with prod21 ucts of all auto manufacturers to the ex22 tent possible; and 

23 ‘‘(ii) consider adopting minimum re24 quirements for deployment of electrical 

25 charging infrastructure and other appro-
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1 priate requirements necessary to support 

2 the use of plug-in electric drive vehicles. 

3 ‘‘(C) COST RECOVERY.—Each State regu4 latory authority (in the case of each electric 

5 utility for which it has ratemaking authority) 

6 and each utility (in the case of a nonregulated 

7 utility) shall consider whether, and to what ex8 tent, to allow cost recovery for plans and imple9 mentation of plans. 

10 ‘‘(D) SMART GRID INTEGRATION.—The 

11 State regulatory authority (in the case of each 

12 electric utility for which it has ratemaking au13 thority) and each utility (in the case of a non14 regulated utility) shall, in accordance with regu15 lations issued by the Federal Energy Regu16 latory Commission pursuant to section 1305(d) 

17 of the Energy Independence and Security Act 

18 of 2007— 

19 ‘‘(i) establish any appropriate proto20 cols and standards for integrating plug-in 

21 electric drive vehicles into an electrical dis22 tribution system, including Smart Grid 

23 systems and devices as described in title 

24 XIII of the Energy Independence and Se25 curity Act of 2007; 
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1 ‘‘(ii) include, to the extent feasible, 

2 the ability for each plug-in electric drive 

3 vehicle to be identified individually and to 

4 be associated with its owner’s electric util5 ity account, regardless of the location that 

6 the vehicle is plugged in, for purposes of 

7 appropriate billing for any electricity re8 quired to charge the vehicle’s batteries as 

9 well as any crediting for electricity pro10 vided to the electric utility from the vehi11 cle’s batteries; and 

12 ‘‘(iii) review the determination made 

13 in response to section 1252 of the Energy 

14 Policy Act of 2005 in light of this section, 

15 including whether time-of-use pricing 

16 should be employed to enable the use of 

17 plug-in electric drive vehicles to contribute 

18 to meeting peak-load and ancillary service 

19 power needs.’’. 

20 (b) COMPLIANCE.— 

21 (1) TIME LIMITATIONS.—Section 112(b) of the 

22 Public Utility Regulatory Policies Act of 1978 (16 

23 U.S.C. 2622(b)) is amended by adding the following 

24 at the end thereof: 
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1 ‘‘(7)(A) Not later than 3 years after the date of en2 actment of this paragraph, each State regulatory authority 

3 (with respect to each electric utility for which it has rate4 making authority) and each nonregulated utility shall 

5 commence the consideration referred to in section 111, or 

6 set a hearing date for consideration, with respect to the 

7 standard established by paragraph (20) of section 111(d). 

8 ‘‘(B) Not later than 4 years after the date of enact9 ment of the this paragraph, each State regulatory author10 ity (with respect to each electric utility for which it has 

11 ratemaking authority), and each nonregulated electric util12 ity, shall complete the consideration, and shall make the 

13 determination, referred to in section 111 with respect to 

14 the standard established by paragraph (20) of section 

15 111(d).’’. 

16 (2) FAILURE TO COMPLY.—Section 112(c) of 

17 the Public Utility Regulatory Policies Act of 1978 

18 (16 U.S.C. 2622(c)) is amended by adding the fol19 lowing at the end: ‘‘In the case of the standards es20 tablished by paragraph (20) of section 111(d), the 

21 reference contained in this subsection to the date of 

22 enactment of this Act shall be deemed to be a ref23 erence to the date of enactment of such paragraph.’’. 

24 (3) PRIOR STATE ACTIONS.—Section 112(d) of 

25 the Public Utility Regulatory Policies Act of 1978 
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1 (16 U.S.C. 2622(d)) is amended by striking ‘‘(19)’’ 

2 and inserting ‘‘(20)’’ before ‘‘of section 111(d)’’. 

3 SEC. 122. LARGE-SCALE VEHICLE ELECTRIFICATION PRO4 GRAM. 

5 (a) DEPLOYMENT PROGRAM.—The Secretary of En6 ergy shall establish a program to deploy and integrate 

7 plug-in electric drive vehicles into the electricity grid in 

8 multiple regions. In carrying out the program, the Sec9 retary may provide financial assistance described under 

10 subsection (d), consistent with the goals under subsection 

11 (b). The Secretary shall select regions based upon applica12 tions for assistance received pursuant to subsection (c). 

13 (b) GOALS.—The goals of the program established 

14 pursuant to subsection (a) shall be— 

15 (1) to demonstrate the viability of a vehicle16 based transportation system that is not overly de17 pendent on petroleum as a fuel and contributes to 

18 lower carbon emissions than a system based on con19 ventional vehicles; 

20 (2) to facilitate the integration of advanced ve21 hicle technologies into electricity distribution areas 

22 to improve system performance and reliability; 

23 (3) to demonstrate the potential benefits of co24 ordinated investments in vehicle electrification on 

25 personal mobility and a regional grid; 
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1 (4) to demonstrate protocols and standards that 

2 facilitate vehicle integration into the grid; and 

3 (5) to investigate differences in each region and 

4 regulatory environment regarding best practices in 

5 implementing vehicle electrification. 

6 (c) APPLICATIONS.—Any State, Indian tribe, or local 

7 government (or group of State, Indian tribe, or local gov8 ernments) may apply to the Secretary of Energy for finan9 cial assistance in furthering the regional deployment and 

10 integration into the electricity grid of plug-in electric drive 

11 vehicles. Such applications may be jointly sponsored by 

12 electric utilities, automobile manufacturers, technology 

13 providers, car sharing companies or organizations, or 

14 other persons or entities. 

15 (d) USE OF FUNDS.—Pursuant to applications re16 ceived under subsection (c), the Secretary may make fi17 nancial assistance available to any applicant or joint spon18 sor of the application to be used for any of the following: 

19 (1) Assisting persons located in the regional de20 ployment area, including fleet owners, in the pur21 chase of new plug-in electric drive vehicles by offset22 ting in whole or in part the incremental cost of such 

23 vehicles above the cost of comparable conventionally 

24 fueled vehicles. 
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1 (2) Supporting the use of plug-in electric drive 

2 vehicles by funding projects for the deployment of 

3 any of the following: 

4 (A) Electrical charging infrastructure for 

5 plug-in electric drive vehicles, including battery 

6 exchange, fast charging infrastructure, and 

7 other services, in public or private locations, in8 cluding street parking, parking garages, park9 ing lots, homes, gas stations, and highway rest 

10 stops. 

11 (B) Smart Grid equipment and infrastruc12 ture, as described in title XIII of the Energy 

13 Independence and Security Act of 2007, to fa14 cilitate the charging and integration of plug-in 

15 electric drive vehicles. 

16 (3) Such other projects as the Secretary deter17 mines appropriate to support the large-scale deploy18 ment of plug-in electric drive vehicles in regional de19 ployment areas. 

20 (e) PROGRAM REQUIREMENTS.—The Secretary, in 

21 consultation with the Administrator and the Secretary of 

22 Transportation, shall determine design elements and re23 quirements of the program established pursuant to sub24 section (a), including— 
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1 (1) the type of financial mechanism with which 

2 to provide financial assistance; 

3 (2) criteria for evaluating applications sub4 mitted under subsection (c), including the antici5 pated ability to promote deployment and market 

6 penetration of vehicles that are less dependent on 

7 petroleum as a fuel source; and 

8 (3) reporting requirements for entities that re9 ceive financial assistance under this section, includ10 ing a comprehensive set of performance data charac11 terizing the results of the deployment program. 

12 (f) INFORMATION CLEARINGHOUSE.—The Secretary 

13 shall, as part of the program established pursuant to sub14 section (a), collect and make available to the public infor15 mation regarding the cost, performance, and other tech16 nical data regarding the deployment and integration of 

17 plug-in electric drive vehicles. 

18 (g) AUTHORIZATION.—There are authorized to be ap19 propriated to carry out this section such sums as may be 

20 necessary. 

21 SEC. 123. PLUG-IN ELECTRIC DRIVE VEHICLE MANUFAC22 TURING. 

23 (a) VEHICLE MANUFACTURING ASSISTANCE PRO24 GRAM.—The Secretary of Energy shall establish a pro25 gram to provide financial assistance to automobile manu-
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1 facturers to facilitate the manufacture of plug-in electric 

2 drive vehicles, as defined in section 131(a)(5) of the En3 ergy Independence and Security Act of 2007, that are de4 veloped and produced in the United States. 

5 (b) FINANCIAL ASSISTANCE.—The Secretary of En6 ergy may provide financial assistance to an automobile 

7 manufacturer under the program established pursuant to 

8 subsection (a) for the reconstruction or retooling of facili9 ties for the manufacture of plug-in electric drive vehicles 

10 or batteries for such vehicles that are developed and pro11 duced in the United States. 

12 (c) COORDINATION WITH REGIONAL DEPLOY13 MENT.—The Secretary may provide financial assistance 

14 under subsection (b) in conjunction with the award of fi15 nancial assistance under the large scale vehicle electrifica16 tion program established pursuant to section 122 of this 

17 Act. 

18 (d) PROGRAM REQUIREMENTS.—The Secretary shall 

19 determine design elements and requirements of the pro20 gram established pursuant to subsection (a), including— 

21 (1) the type of financial mechanism with which 

22 to provide financial assistance; 

23 (2) criteria, in addition to the criteria described 

24 under subsection (e), for evaluating applications for 

25 financial assistance; and 
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1 (3) reporting requirements for automobile man2 ufacturers that receive financial assistance under 

3 this section. 

4 (e) CRITERIA.—In selecting recipients of financial as5 sistance from among applicant automobile manufacturers, 

6 the Secretary shall give preference to proposals that— 

7 (1) are most likely to be successful; and 

8 (2) are located in local markets that have the 

9 greatest need for the facility. 

10 (f) REPORTS.—The Secretary shall annually submit 

11 to Congress a report on the program established pursuant 

12 to this section. 

13 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

14 are authorized to be appropriated such sums as are nec15 essary to carry out this section. 

16 SEC. 124. INVESTMENT IN CLEAN VEHICLES. 

17 (a) DEFINITIONS.—In this section: 

18 (1) ADVANCED TECHNOLOGY VEHICLES AND

19 QUALIFYING COMPONENTS.—The terms ‘‘advanced 

20 technology vehicles’’ and ‘‘qualifying components’’ 

21 shall have the definition of such terms in section 136 

22 of the Energy Independence and Security Act of 

23 2007, except that for purposes of this section, the 

24 average base year as described in such section 

25 136(a)(1)(C) shall be the following: 
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1 (A) In each of the years 2012 through 

2 2016, model year 2009. 

3 (B) In 2017, the Administrator shall, not4 withstanding such section 136(a)(1)(C), deter5 mine an appropriate baseline based on techno6 logical and economic feasibility. 

7 (2) PLUG-IN ELECTRIC DRIVE VEHICLE.—The 

8 term ‘‘plug-in electric drive vehicle’’ shall have the 

9 definition of such term in section 131 of the Energy 

10 Independence and Security Act of 2007. 

11 (b) DISTRIBUTION OF ALLOWANCES.—The Adminis12 trator shall, in accordance with this section, distribute 

13 emission allowances allocated pursuant to section 782(i) 

14 of the Clean Air Act not later than September 30 of 2012 

15 and each calendar year thereafter through 2025. 

16 (c) PLUG-IN ELECTRIC DRIVE VEHICLE MANUFAC17 TURING AND DEPLOYMENT.— 

18 (1) IN GENERAL.—The Administrator shall, at 

19 the direction of the Secretary of Energy, provide 

20 emission allowances allocated pursuant to section 

21 782(i) to applicants, joint sponsors and automobile 

22 manufacturers pursuant to sections 122 and 123 of 

23 this Act. 

24 (2) ANNUAL AMOUNT.—In each of the years 

25 2012 through 2017, one-quarter of the portion of 
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1 the emission allowances allocated pursuant to section 

2 782(i) of the Clean Air Act shall be available to 

3 carry out paragraph (1) such that— 

4 (A) one-eighth of the portion shall be avail5 able to carry out section 122; and 

6 (B) one-eighth of the portion shall be 

7 available to carry out section 123. 

8 (3) PREFERENCE.—In directing the provision 

9 of emission allowances under this subsection to carry 

10 out section 122, the Secretary shall give preference 

11 to applications under section 122(c) that are jointly 

12 sponsored by one or more automobile manufacturers. 

13 (4) MULTI-YEAR COMMITMENTS.—The Admin14 istrator shall commit to providing emission allow15 ances to an applicant, joint sponsor, or automobile 

16 manufacturer for up to five consecutive years if— 

17 (A) an application under section 122 or 

18 123 of this Act requests a multi-year commit19 ment; 

20 (B) such application meets the criteria for 

21 support established by the Secretary of Energy 

22 under section 122 or 123 of this Act; 

23 (C) the Administrator confirms to the Sec24 retary that emission allowances will be available 

25 for a multi-year commitment; 
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1 (D) the Secretary of Energy determines 

2 that a multi-year commitment for such applica3 tion will advance the goals of section 122 or 

4 123; and 

5 (E) the Secretary of Energy directs the 

6 Administrator to make a multi-year commit7 ment. 

8 (5) INSUFFICIENT APPLICATIONS.—If, in any 

9 year, emission allowances available under paragraph 

10 (2) cannot be provided because of insufficient num11 bers of submitted applications that meet the criteria 

12 for support established by the Secretary of Energy 

13 under section 122 or 123 of this Act, the remaining 

14 emission allowances shall be distributed according to 

15 subsection (d). 

16 (d) ADVANCED TECHNOLOGY VEHICLES.— 

17 (1) IN GENERAL.—The Administrator shall, at 

18 the direction of the Secretary of Energy, provide any 

19 emission allowances allocated pursuant to section 

20 782(i) of the Clean Air Act that are not provided 

21 under subsection (c) to automobile manufacturers 

22 and component suppliers to pay not more than 30 

23 percent of the cost of— 
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1 (A) reequipping, expanding, or establishing 

2 a manufacturing facility in the United States to 

3 produce— 

4 (i) qualifying advanced technology ve5 hicles; or 

6 (ii) qualifying components; and 

7 (B) engineering integration performed in 

8 the United States of qualifying vehicles and 

9 qualifying components. 

10 (2) PREFERENCE.—In directing the provision 

11 of emission allowances under this subsection during 

12 the years 2012 through 2017, the Secretary shall 

13 give preference to applications for projects that save 

14 the maximum number of gallons of fuel. 

15 SEC. 125. ADVANCED TECHNOLOGY VEHICLE MANUFAC16 TURING INCENTIVE LOANS. 

17 Section 136(d)(1) of the Energy Independence and 

18 Security Act of 2007 (42 U.S.C. 17013(d)(1)) is amended 

19 by striking ‘‘$25,000,000,000’’ and inserting 

20 ‘‘$50,000,000,000’’. 

21 SEC. 126. DEFINITION OF RENEWABLE BIOMASS. 

22 (a) IN GENERAL.—Section 211(o)(1)(I) of the Clean 

23 Air Act (42 U.S.C. 7545(o)(1)(I)) is amended to read as 

24 follows: 
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1 ‘‘(I) RENEWABLE BIOMASS.—The term ‘re2 newable biomass’ means any of the following: 

3 ‘‘(i) Materials, pre-commercial 

4 thinnings, or removed invasive species from 

5 National Forest System land and public 

6 lands (as defined in section 103 of the 

7 Federal Land Policy and Management Act 

8 of 1976 (43 U.S.C. 1702)), including those 

9 that are byproducts of preventive treat10 ments (such as trees, wood, brush, 

11 thinnings, chips, and slash), that are re12 moved as part of a federally recognized 

13 timber sale, or that are removed to reduce 

14 hazardous fuels, to reduce or contain dis15 ease or insect infestation, or to restore eco16 system health, and that are— 

17 ‘‘(I) not from components of the 

18 National Wilderness Preservation Sys19 tem, Wilderness Study Areas, Inven20 toried Roadless Areas, old growth 

21 stands, late-successional stands (ex22 cept for dead, severely damaged, or 

23 badly infested trees), components of 

24 the National Landscape Conservation 

25 System, National Monuments, Na-
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1 tional Conservation Areas, Designated 

2 Primitive Areas, or Wild and Scenic 

3 Rivers corridors; 

4 ‘‘(II) harvested in environ5 mentally sustainable quantities, as de6 termined by the appropriate Federal 

7 land manager; and 

8 ‘‘(III) harvested in accordance 

9 with Federal and State law, and ap10 plicable land management plans. 

11 ‘‘(ii) Any organic matter that is avail12 able on a renewable or recurring basis 

13 from non-Federal land or land belonging to 

14 an Indian or Indian tribe that is held in 

15 trust by the United States or subject to a 

16 restriction against alienation imposed by 

17 the United States, including— 

18 ‘‘(I) renewable plant material, in19 cluding— 

20 ‘‘(aa) feed grains; 

21 ‘‘(bb) other agricultural 

22 commodities; 

23 ‘‘(cc) other plants and trees; 

24 and 

25 ‘‘(dd) algae; and 
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1 ‘‘(II) waste material, including— 

2 ‘‘(aa) crop residue; 

3 ‘‘(bb) other vegetative waste 

4 material (including wood waste 

5 and wood residues); 

6 ‘‘(cc) animal waste and by7 products (including fats, oils, 

8 greases, and manure); 

9 ‘‘(dd) construction waste; 

10 ‘‘(ee) food waste and yard 

11 waste; and 

12 ‘‘(ff) the non-fossil biogenic 

13 portion of municipal solid waste 

14 and construction, demolition, and 

15 disaster debris. 

16 ‘‘(iii) Residues and byproducts from 

17 wood, pulp, or paper products facilities.’’. 

18 (b) REDUCTION.—The last sentence of section 

19 211(o)(7)(D) of the Clean Air Act (42 U.S.C. 

20 7545(o)(7)(D)) is amended to read as follows: ‘‘For any 

21 calendar year in which the Administrator makes such a 

22 reduction, the Administrator shall also reduce the applica23 ble volume of renewable fuel and advanced biofuels re24 quirement established under paragraph (2)(B) by the 

25 same volume.’’. 
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1 SEC. 127. OPEN FUEL STANDARD. 

2 (a) FINDINGS.—The Congress finds that— 

3 (1) the status of oil as a strategic commodity, 

4 which derives from its domination of the transpor5 tation sector, presents a clear and present danger to 

6 the United States; 

7 (2) in a prior era, when salt was a strategic 

8 commodity, salt mines conferred national power and 

9 wars were fought over the control of such mines; 

10 (3) technology, in the form of electricity and re11 frigeration, decisively ended salt’s monopoly of meat 

12 preservation and greatly reduced its strategic impor13 tance; 

14 (4) fuel competition and consumer choice would 

15 similarly serve to end oil’s monopoly in the transpor16 tation sector and strip oil of its strategic status; 

17 (5) the current closed fuel market has allowed 

18 a cartel of petroleum exporting countries to inflate 

19 fuel prices, effectively imposing a harmful tax on the 

20 economy of the United States; 

21 (6) much of the inflated petroleum revenues the 

22 oil cartel earns at the expense of the people of the 

23 United States are used for purposes antithetical to 

24 the interests of the United States and its allies; 

25 (7) alcohol fuels, including ethanol and meth26 anol, could potentially provide significant supplies of 
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1 additional fuels that could be produced in the United 

2 States and in many other countries in the Western 

3 Hemisphere that are friendly to the United States; 

4 (8) alcohol fuels can only play a major role in 

5 securing the energy independence of the United 

6 States if a substantial portion of vehicles in the 

7 United States are capable of operating on such fuels; 

8 (9) it is not in the best interest of United 

9 States consumers or the United States Government 

10 to be constrained to depend solely upon petroleum 

11 resources for vehicle fuels if alcohol fuels are poten12 tially available; 

13 (10) existing technology, in the form of flexible 

14 fuel vehicles, allows internal combustion engine cars 

15 and trucks to be produced at little or no additional 

16 cost, which are capable of operating on conventional 

17 gasoline, alcohol fuels, or any combination of such 

18 fuels, as availability or cost advantage dictates, pro19 viding a platform on which fuels can compete; 

20 (11) the necessary distribution system for such 

21 alcohol fuels will not be developed in the United 

22 States until a substantial fraction of the vehicles in 

23 the United States are capable of operating on such 

24 fuels; 
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1 (12) the establishment of such a vehicle fleet 

2 and distribution system would provide a large mar3 ket that would mobilize private resources to substan4 tially advance the technology and expand the pro5 duction of alcohol fuels in the United States and 

6 abroad; 

7 (13) the United States has an urgent national 

8 security interest to develop alcohol fuels technology, 

9 production, and distribution systems as rapidly as 

10 possible; 

11 (14) new cars sold in the United States that 

12 are equipped with an internal combustion engine 

13 should allow for fuel competition by being flexible 

14 fuel vehicles, and new diesel cars should be capable 

15 of operating on biodiesel; and 

16 (15) such an open fuel standard would help to 

17 protect the United States economy from high and 

18 volatile oil prices and from the threats caused by 

19 global instability, terrorism, and natural disaster. 

20 (b) OPEN FUEL STANDARD FOR TRANSPOR21 TATION.—(1) Chapter 329 of title 49, United States Code, 

22 is amended by adding at the end the following: 

23 ‘‘§ 32920. Open fuel standard for transportation 

24 ‘‘(a) DEFINITIONS.—In this section: 
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1 ‘‘(1) E85.—The term ‘E85’ means a fuel mix2 ture containing 85 percent ethanol and 15 percent 

3 gasoline by volume. 

4 ‘‘(2) FLEXIBLE FUEL AUTOMOBILE.—The term 

5 ‘flexible fuel automobile’ means an automobile that 

6 has been warranted by its manufacturer to operate 

7 on gasoline, E85, and M85. 

8 ‘‘(3) FUEL CHOICE-ENABLING AUTOMOBILE.— 

9 The term ‘fuel choice-enabling automobile’ means— 

10 ‘‘(A) a flexible fuel automobile; or 

11 ‘‘(B) an automobile that has been war12 ranted by its manufacturer to operate on bio13 diesel. 

14 ‘‘(4) LIGHT-DUTY AUTOMOBILE.—The term 

15 ‘light-duty automobile’ means— 

16 ‘‘(A) a passenger automobile; or 

17 ‘‘(B) a non-passenger automobile. 

18 ‘‘(5) LIGHT-DUTY AUTOMOBILE MANUFAC19 TURER’S ANNUAL COVERED INVENTORY.—The term 

20 ‘light-duty automobile manufacturer’s annual cov21 ered inventory’ means the number of light-duty 

22 automobiles powered by an internal combustion en23 gine that a manufacturer, during a given calendar 

24 year, manufactures in the United States or imports 
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1 from outside of the United States for sale in the 

2 United States. 

3 ‘‘(6) M85.—The term ‘M85’ means a fuel mix4 ture containing 85 percent methanol and 15 percent 

5 gasoline by volume. 

6 ‘‘(b) OPEN FUEL STANDARD FOR TRANSPOR7 TATION.— 

8 ‘‘(1) IN GENERAL.—The Secretary may promul9 gate regulations to require each light-duty auto10 mobile manufacturer’s annual covered inventory to 

11 be comprised of a minimum percentage of fuel-choice 

12 enabling automobiles, with sufficient lead time, if 

13 the Secretary, in coordination with the Secretary of 

14 Energy and the Administrator of the Environmental 

15 Protection Agency, determines such requirement is a 

16 cost-effective way to achieve the Nation’s energy 

17 independence and environmental objectives. The 

18 cost-effective determination shall consider the future 

19 availability of both alternative fuel supply and infra20 structure to deliver the alternative fuel to the fuel21 choice enabling vehicles. 

22 ‘‘(2) TEMPORARY EXEMPTION FROM REQUIRE23 MENTS.— 

24 ‘‘(A) APPLICATION.—A manufacturer may 

25 request an exemption from the requirement de-
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1 scribed in paragraph (1) by submitting an ap2 plication to the Secretary, at such time, in such 

3 manner, and containing such information as the 

4 Secretary may require by regulation. Each such 

5 application shall specify the models, lines, and 

6 types of automobiles affected. 

7 ‘‘(B) EVALUATION.—After evaluating an 

8 application received from a manufacturer, the 

9 Secretary may at any time, under such terms 

10 and conditions, and to such extent as the Sec11 retary considers appropriate, temporarily ex12 empt, or renew the exemption of, a light-duty 

13 automobile from the requirement described in 

14 paragraph (1) if the Secretary determines that 

15 unavoidable events not under the control of the 

16 manufacturer prevent the manufacturer of such 

17 automobile from meeting its required produc18 tion volume of fuel choice-enabling automobiles, 

19 including— 

20 ‘‘(i) a disruption in the supply of any 

21 component required for compliance with 

22 the regulations; 

23 ‘‘(ii) a disruption in the use and in24 stallation by the manufacturer of such 

25 component; or 
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1 ‘‘(iii) application to plug-in electric 

2 drive vehicles causing such vehicles to fail 

3 to meet State air quality requirements. 

4 ‘‘(C) CONSOLIDATION.—The Secretary 

5 may consolidate applications received from mul6 tiple manufacturers under subparagraph (A) if 

7 they are of a similar nature. 

8 ‘‘(D) CONDITIONS.—Any exemption grant9 ed under subparagraph (B) shall be conditioned 

10 upon the manufacturer’s commitment to recall 

11 the exempted automobiles for installation of the 

12 omitted components within a reasonable time 

13 proposed by the manufacturer and approved by 

14 the Secretary after such components become 

15 available in sufficient quantities to satisfy both 

16 anticipated production and recall volume re17 quirements. 

18 ‘‘(E) NOTICE.—The Secretary shall pub19 lish in the Federal Register— 

20 ‘‘(i) notice of each application received 

21 from a manufacturer; 

22 ‘‘(ii) notice of each decision to grant 

23 or deny a temporary exemption; and 

24 ‘‘(iii) the reasons for granting or de25 nying such exemptions.’’. 
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1 (2) The table of contents in chapter 329 of such title 

2 is amended adding at the end the following: 

‘‘32920. Open fuel standard for transportation.’’. 

3 SEC. 128. DIESEL EMISSIONS REDUCTION. 

4 Subtitle G of title VII of the Energy Policy Act of 

5 2005 (42 U.S.C. 16131 et seq.) is amended— 

6 (1) in the matter preceding clause (i) in section 

7 791(3)(B), by inserting ‘‘in any State’’ after ‘‘non8 profit organization or institution’’; 

9 (2) in section 791(9), by striking ‘‘The term 

10 ‘State’ includes the District of Columbia.’’ and in11 serting ‘‘The term ‘State’ includes the District of 

12 Columbia, American Samoa, Guam, the Common13 wealth of the Northern Mariana Islands, Puerto 

14 Rico, and the Virgin Islands.’’; 

15 (3) in section 793(c)— 

16 (A) in paragraph (2)(A), by striking ‘‘51 

17 States’’ and inserting ‘‘56 States’’; 

18 (B) in paragraph (2)(A), by striking ‘‘1.96 

19 percent’’ and inserting ‘‘1.785 percent’’; 

20 (C) in paragraph (2)(B), by striking ‘‘51 

21 States’’ and inserting ‘‘56 States’’; and 

22 (D) in paragraph (2)(B), by amending 

23 clause (ii) to read as follows: 

24 ‘‘(ii) the amount of funds remaining 

25 after each State described in paragraph (1) 
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1 receives the 1.785-percent allocation under 

2 this paragraph.’’; and 

3 (4) in section 797, by striking ‘‘2011’’ and in4 serting ‘‘2016’’. 

5 SEC. 129. LOAN GUARANTEES FOR PROJECTS TO CON6 STRUCT RENEWABLE FUEL PIPELINES. 

7 (a) DEFINITIONS.—Section 1701 of the Energy Pol8 icy Act of 2005 (42 U.S.C. 16511) is amended by adding 

9 at the end the following: 

10 ‘‘(6) RENEWABLE FUEL.—The term ‘renewable 

11 fuel’ has the meaning given the term in section 

12 211(o)(1) of the Clean Air Act (42 U.S.C. 

13 7545(o)(1)), except that the term shall include all 

14 ethanol and biodiesel. 

15 ‘‘(7) RENEWABLE FUEL PIPELINE.—The term 

16 ‘renewable fuel pipeline’ means a common carrier 

17 pipeline for transporting renewable fuel.’’. 

18 (b) RENEWABLE FUEL PIPELINE ELIGIBILITY.— 

19 Section 1703(b) the Energy Policy Act of 2005 (42 U.S.C. 

20 16513) is amended by adding at the end the following: 

21 ‘‘(11) Renewable fuel pipelines.’’. 

22 SEC. 130. FLEET VEHICLES. 

23 Section 508 of the Energy Policy Act of 1992 (42 

24 U.S.C. 13258) is amended as follows: 
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1 (1) By adding the following new paragraph at 

2 the end of subsection (a): 

3 ‘‘(6) REPOWERED OR CONVERTED ALTER4 NATIVE FUELED VEHICLES.—As used in this para5 graph, the term ‘repowered or converted alternative 

6 fueled vehicle’ includes light-, medium- or heavy-duty 

7 motor vehicles that have been modified with an EPA 

8 or CARB compliant engine or vehicle or aftermarket 

9 system so that the vehicle or engine is capable of op10 erating on an alternative fuel.’’. 

11 (2) By adding the following new paragraph at 

12 the end of subsection (b): 

13 ‘‘(3) Repowered or converted vehicles. Not later 

14 than January 1, 2010, the Secretary shall allocate 

15 credits to fleets that repower or convert an existing 

16 vehicle so that it is capable of operating on an alter17 native fuel. In the case of any medium- or heavy18 duty vehicle that is repowered or converted so that 

19 it is capable of operating on an alternative fuel, the 

20 Secretary shall allocate additional credits for such 

21 vehicles if he determines that such vehicles displace 

22 more petroleum than light duty alternative fueled ve23 hicles. Such rules shall also include a requirement 

24 that such vehicles remain in the fleet for a period of 

25 no less than 2 years in order to continue to qualify 
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1 for credit. The Secretary also shall extend the flexi2 bility afforded in this paragraph to Federal fleets 

3 subject to the purchase provisions contained in sec4 tion 303 of this Act.’’. 

5 SEC. 130A. REPORT ON NATURAL GAS VEHICLE EMISSIONS 

6 REDUCTIONS. 

7 Within 360 days after the date of enactment of this 

8 Act, the Administrator, in consultation with the Secre9 taries of Energy and Transportation, and the Adminis10 trator of the General Services Administration, and after 

11 an examination of available scientific studies or analysis, 

12 shall submit to the Congress a report on— 

13 (1) the contribution that light and heavy duty 

14 natural gas vehicles, by category and State, have 

15 made during the last decade to the reduction of 

16 greenhouse gases and criteria pollutants under the 

17 Clean Air Act, and the reduced consumption of pe18 troleum-based fuels; 

19 (2) the contribution that light and heavy duty 

20 natural gas vehicles are expected to make from 2010 

21 to 2020 in reducing greenhouse gas and criteria pol22 lutants under the Clean Air Act based, among other 

23 things, on additional Federal incentives for the man24 ufacture and deployment of natural gas vehicles pro25 vided in this Act, and other Federal legislation; and 
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1 (3) additional Federal measures, including leg2 islation, that could, if implemented, maximize the 

3 potential for natural gas used in both stationary and 

4 mobile sources to contribute to the reduction of 

5 greenhouse gases and criteria pollutants under the 

6 Clean Air Act. 

7 Subtitle D—State Energy and Envi8 ronment Development Accounts 

9 SEC. 131. ESTABLISHMENT OF SEED ACCOUNTS. 

10 (a) DEFINITIONS.—In this section: 

11 (1) SEED ACCOUNT.—The term ‘‘SEED Ac12 count’’ means a State Energy and Environment De13 velopment Account established pursuant to this sec14 tion. 

15 (2) STATE ENERGY OFFICE.—The term ‘‘State 

16 Energy Office’’ means a State entity eligible for 

17 grants under part D of title III of the Energy Policy 

18 and Conservation Act (42 U.S.C. 6321 et seq.). 

19 (b) ESTABLISHMENT OF PROGRAM.—The Adminis20 trator shall establish a program under which a State, 

21 through its State Energy Office or other State agency des22 ignated by the State, may operate a State Energy and En23 vironment Development Account. 

24 (c) PURPOSE.—The purpose of each SEED Account 

25 is to serve as a common State-level repository for man-
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1 aging and accounting for emission allowances provided to 

2 States designated for renewable energy and energy effi3 ciency purposes. 

4 (d) REGULATIONS.—Not later than 1 year after the 

5 date of enactment of this Act, the Administrator shall pro6 mulgate regulations to carry out this section, including 

7 regulations— 

8 (1) to ensure that each State operates its 

9 SEED Account and any subaccounts thereof effi10 ciently and in accordance with this Act and applica11 ble State and Federal laws; 

12 (2) to prevent waste, fraud, and abuse; 

13 (3) to indicate the emission allowances that 

14 may be deposited in a State’s SEED Account pend15 ing distribution or use; 

16 (4) to indicate the programs and objectives au17 thorized by Federal law for which emission allow18 ances in a SEED Account may be distributed or 

19 used; 

20 (5) to identify the forms of financial assistance 

21 and incentives that States may provide through dis22 tribution or use of SEED Accounts; and 

23 (6) to prescribe the form and content of reports 

24 that the States are required to submit under this 

25 section on the use of SEED Accounts. 
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1 (e) OPERATION.— 

2 (1) DEPOSITS.— 

3 (A) IN GENERAL.—In the allowance track4 ing system established pursuant to section 

5 724(d) of the Clean Air Act, the Administrator 

6 shall establish a SEED Account for each State 

7 and place in it the allowances allocated pursu8 ant to section 782(g) of the Clean Air Act to 

9 be distributed to States pursuant to sections 

10 132 and 201 of this Act. 

11 (B) FINANCIAL ACCOUNT.—A State may 

12 create a financial account associated with its 

13 SEED Account to deposit, retain, and manage 

14 any proceeds of any sale of any allowance pro15 vided pursuant to this Act pending expenditure 

16 or disbursement of those proceeds for purposes 

17 permitted under this section. The funds in such 

18 an account shall not be commingled with other 

19 funds not derived from the sale of allowances 

20 provided to the State; however, loans made by 

21 the State from such funds pursuant to para22 graph (2)(C)(i) may be repaid into such a fi23 nancial account, including any interest charged. 

24 (2) WITHDRAWALS.— 
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1 (A) IN GENERAL.—All allowances distrib2 uted pursuant to sections 132 and 201, includ3 ing the proceeds of any sale of such allowances, 

4 shall support renewable energy and energy effi5 ciency programs authorized or approved by the 

6 Federal Government. 

7 (B) DEDICATED ALLOWANCES.—Allow8 ances distributed pursuant to sections 132 and 

9 201 that are required by law to be used for spe10 cific purposes for a specified period shall be 

11 used according to those requirements during 

12 that period. 

13 (C) UNDEDICATED ALLOWANCES.—To the 

14 extent that allowances distributed pursuant to 

15 sections 132 and 201 are not required by law 

16 to be used for specific purposes for a specified 

17 period as described in subparagraph (B), such 

18 allowances or the proceeds of their sale may be 

19 used for any of the following purposes: 

20 (i) LOANS.—Loans of allowances, or 

21 the proceeds from the sale of allowances, 

22 may be provided, interest on commercial 

23 loans may be subsidized at an interest rate 

24 as low as zero, and other credit support 

25 may be provided to support programs au-
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1 thorized to use SEED Account allowance 

2 value or any other renewable energy or en3 ergy efficiency purpose authorized or ap4 proved by the Federal Government. 

5 (ii) GRANTS.—Grants of allowances or 

6 the proceeds of their sale may be provided 

7 to support programs authorized to use 

8 SEED Account allowance value or any 

9 other renewable energy or energy efficiency 

10 purpose authorized or approved by the 

11 Federal Government. 

12 (iii) OTHER FORMS OF SUPPORT.—Al13 lowances or the proceeds of the sale of al14 lowances may be provided for other forms 

15 of support for programs authorized to use 

16 SEED Account allowance value or any 

17 other renewable energy or energy efficiency 

18 purpose authorized or approved by the 

19 Federal Government. 

20 (iv) ADMINISTRATIVE COSTS.—Except 

21 to the extent provided in Federal law au22 thorizing or allocating allowances deposited 

23 in a SEED Account, not more than 5 per24 cent of the allowance value in a SEED Ac25 count in any year may be used to cover ad-
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1 ministrative expenses of the SEED Ac2 count. 

3 (D) SUBACCOUNTS.—A State may request 

4 that the Administrator establish accounts for 

5 local governments that request such sub6 accounts to hold allowances distributed to local 

7 governments for renewable energy or energy ef8 ficiency programs authorized or approved by 

9 the Federal Government. 

10 (E) INTENDED USE PLANS.— 

11 (i) IN GENERAL.—After providing for 

12 public review and comment, each State ad13 ministering a SEED Account shall annu14 ally prepare a plan that identifies the in15 tended uses of the allowances or proceeds 

16 from the sale of allowances in its SEED 

17 Account. 

18 (ii) CONTENTS.—An intended use 

19 plan shall include— 

20 (I) a list of the projects or pro21 grams for which withdrawals from the 

22 SEED Account are intended in the 

23 next fiscal year that begins after the 

24 date of the plan, including a descrip25 tion of each project; 
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1 (II) the relationship of each of 

2 the projects or programs to an identi3 fied Federal purpose authorized by 

4 this Act, or any other Federal statute; 

5 (III) the expected terms of use of 

6 allowance value to provide assistance; 

7 (IV) the criteria and methods es8 tablished for the distribution of allow9 ances or allowance value; 

10 (V) a description of the equiva11 lent financial value and status of the 

12 SEED Account; and 

13 (VI) a statement of the mid-term 

14 and long-term goals of the State for 

15 use of its SEED Account. 

16 (3) ACCOUNTABILITY AND TRANSPARENCY.— 

17 (A) CONTROLS AND PROCEDURES.—Any 

18 State that has a SEED Account shall establish 

19 fiscal controls and recordkeeping and account20 ing procedures for the SEED Account sufficient 

21 to ensure proper accounting during appropriate 

22 accounting periods for distributions into the 

23 SEED Account, transfers from the SEED Ac24 count, and SEED Account balances, including 

25 any related financial accounts. Such controls 
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1 and procedures shall conform to generally ac2 cepted government accounting principles. Any 

3 State that has a SEED Account shall retain 

4 records for a period of at least 5 years. 

5 (B) AUDITS.—Any State that has a SEED 

6 Account shall have an annual audit conducted 

7 of the SEED Account by an independent public 

8 accountant in accordance with generally accept9 ed auditing standards, and shall transmit the 

10 results of that audit to the Administrator. 

11 (C) STATE REPORT.—Each State admin12 istering a SEED Account shall make publicly 

13 available and submit to the Administrator a re14 port every 2 years on its activities related to its 

15 SEED Account. 

16 (D) PUBLIC INFORMATION.—Any— 

17 (i) controls and procedures established 

18 under subparagraph (A); and 

19 (ii) information obtained through au20 dits conducted under subparagraph (B), 

21 except to the extent that it would be pro22 tected from disclosure, if it were informa23 tion held by the Federal Government, 

24 under section 552(b) of title 5, United 

25 States Code, 
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1 shall be made publicly available. 

2 (E) OTHER PROTECTIONS.—The Adminis3 trator shall require such additional procedures 

4 and protections as are necessary to ensure that 

5 any State that has a SEED Account will oper6 ate the SEED Account in an accountable and 

7 transparent manner. 

8 (f) REQUIREMENTS FOR ELIGIBILITY.—A State’s eli9 gibility to receive allowances in its SEED Account shall 

10 depend on that State’s compliance with the requirements 

11 of this Act (and the amendments made by this Act). 

12 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

13 are authorized to be appropriated to the Administrator 

14 such sums as may be necessary for SEED Account oper15 ations. 

16 SEC. 132. SUPPORT OF STATE RENEWABLE ENERGY AND 

17 ENERGY EFFICIENCY PROGRAMS. 

18 (a) DEFINITIONS.—For purposes of this section: 

19 (1) ALLOWANCE.—The term ‘‘allowance’’ 

20 means an emission allowance established under sec21 tion 721 of the Clean Air Act (as added by section 

22 311 of this Act). 

23 (2) COST-EFFECTIVE.—The term ‘‘cost-effec24 tive’’, with respect to an energy efficiency program, 

25 means that the program meets the Total Resource 
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1 Cost Test, which requires that the net present value 

2 of economic benefits over the life of the program or 

3 measure, including avoided supply and delivery costs 

4 and deferred or avoided investments, is greater than 

5 the net present value of the economic costs over the 

6 life of the program, including program costs and in7 cremental costs borne by the energy consumer. 

8 (3) RENEWABLE ENERGY RESOURCE.—The 

9 term ‘‘renewable energy resource’’ shall have the 

10 meaning given that term in section 610 of the Public 

11 Utility Regulatory Policies Act of 1978 (as added by 

12 section 101 of this Act). 

13 (4) VINTAGE YEAR.—The term ‘‘vintage year’’ 

14 shall the meaning given that term in section 700 of 

15 the Clean Air Act (as added by section 311 of this 

16 Act). 

17 (b) DISTRIBUTION AMONG STATES.—Not later than 

18 September 30 of each calendar year from 2011 through 

19 2049, the Administrator shall, in accordance with this sec20 tion, distribute allowances allocated pursuant to section 

21 782(g)(1) of the Clean Air Act (as added by section 311 

22 of this Act) for the following vintage year. The Adminis23 trator shall distribute 0.5 percent of such allowances pur24 suant to section 133 of this Act. The Administrator shall 

25 distribute the remaining allowances to States for renew-
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1 able energy and energy efficiency programs to be deposited 

2 in and administered through the State Energy and Envi3 ronment Development (SEED) Accounts established pur4 suant to section 131. The Administrator shall distribute 

5 allowances among the States under this section each year 

6 in accordance with the following formula: 

7 (1) One third of the allowances shall be divided 

8 equally among the States. 

9 (2) One third of the allowances shall be distrib10 uted ratably among the States based on the popu11 lation of each State, as contained in the most recent 

12 reliable census data available from the Bureau of the 

13 Census, Department of Commerce, for all States at 

14 the time the Administrator calculates the formula 

15 for distribution. 

16 (3) One third of the allowances for shall be dis17 tributed ratably among the States on the basis of 

18 the energy consumption of each State as contained 

19 in the most recent State Energy Data Report avail20 able from the Energy Information Administration 

21 (or such alternative reliable source as the Adminis22 trator may designate). 

23 (c) USES.—The allowances distributed to each State 

24 pursuant to this section shall be used exclusively in accord25 ance with the following requirements: 
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1 (1) Not less than 12.5 percent shall be distrib2 uted by the State to units of local government within 

3 such State to be used exclusively to support the en4 ergy efficiency and renewable energy purposes listed 

5 in paragraphs (2) and (3). 

6 (2) Not less than 20 percent shall be used ex7 clusively for the following energy efficiency purposes, 

8 provided that not less than 1 percent shall be used 

9 for the purpose described in subparagraph (D) and 

10 not less than 5.5 percent shall be used for the pur11 pose described in subparagraph (E): 

12 (A) Implementation and enforcement of 

13 building codes adopted in compliance with sec14 tion 201. 

15 (B) Implementation of the energy efficient 

16 manufactured homes program established pur17 suant to section 203. 

18 (C) Implementation of the building energy 

19 performance labeling program established pur20 suant to section 204. 

21 (D) Low-income community energy effi22 ciency programs that are consistent with the 

23 grant program established under section 264 of 

24 this Act. 
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1 (E) Implementation of the Retrofit for En2 ergy and Environmental Performance (REEP) 

3 program established pursuant to section 202. 

4 (3) Not less than 20 percent shall be used ex5 clusively for capital grants, tax credits, production 

6 incentives, loans, loan guarantees, forgivable loans, 

7 direct provision of allowances, and interest rate buy8 downs for— 

9 (A) re-equipping, expanding, or estab10 lishing a manufacturing facility that receives 

11 certification from the Secretary of Energy pur12 suant to section 1302 of the American Recovery 

13 and Reinvestment Act of 2009 for the produc14 tion of— 

15 (i) property designed to be used to 

16 produce energy from renewable energy 

17 sources; and 

18 (ii) electricity storage systems; 

19 (B) deployment of technologies to generate 

20 electricity from renewable energy sources; and 

21 (C) deployment of facilities or equipment, 

22 such as solar panels, to generate electricity or 

23 thermal energy from renewable energy re24 sources in and on buildings in an urban envi25 ronment. 
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1 (4) The remaining 47.5 percent shall be used 

2 exclusively for any of the following purposes: 

3 (A) Energy efficiency purposes described 

4 in paragraph (2). 

5 (B) Renewable energy purposes described 

6 in paragraph (3)(B) and (C). 

7 (C) Cost-effective energy efficiency pro8 grams for end-use consumers of electricity, nat9 ural gas, home heating oil, or propane, includ10 ing, where appropriate, programs or mecha11 nisms administered by local governments and 

12 entities other than the State. 

13 (D) Enabling the development of a Smart 

14 Grid (as described in section 1301 of the En15 ergy Independence and Security Act of 2007 

16 (42 U.S.C. 17381)) for State, local government, 

17 and other public buildings and facilities, includ18 ing integration of renewable energy resources 

19 and distributed generation, demand response, 

20 demand side management, and systems anal21 ysis. 

22 (E) Providing the non-Federal share of 

23 support for surface transportation capital 

24 projects under— 
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1 (i) sections 5307, 5308, 5309, 5310, 

2 5311 and 5319 of title 49, United States 

3 Code; and 

4 (ii) sections 142, 146, and 149 of title 

5 23, United States Code, 

6 provided that not more than 10 percent of al7 lowances distributed to each State pursuant to 

8 this section shall be used for such purpose. 

9 (5) For any allowances used for the purpose de10 scribed in paragraph (4)(C), the State shall— 

11 (A) prioritize expansion of existing energy 

12 efficiency programs approved and overseen by 

13 the State or the appropriate State regulatory 

14 authority; and 

15 (B) demonstrate that such allowances have 

16 been used to supplement, and not to supplant, 

17 existing and otherwise available State, local, 

18 and ratepayer funding for such purpose. 

19 (d) REPORTING.—Each State receiving allowances 

20 under this section shall include in its biennial reports re21 quired under section 131, in accordance with such require22 ments as the Administrator may prescribe— 

23 (1) a list of entities receiving allowances or al24 lowance value under this section, including entities 

25 receiving such allowances or allowance value from 
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1 units of local government pursuant to subsection 

2 (c)(1); 

3 (2) the amount and nature of allowances or al4 lowance value received by each such recipient; 

5 (3) the specific purposes for which such allow6 ances or allowance value was conveyed to each such 

7 recipient; 

8 (4) documentation of the amount of energy sav9 ings, emission reductions, renewable energy deploy10 ment, and new or retooled manufacturing capacity 

11 resulting from the use of such allowances or allow12 ance value; and 

13 (5) for any energy efficiency program supported 

14 under subsection (c)(4)(C)— 

15 (A) an assessment demonstrating the cost16 effectiveness of such program; and 

17 (B) a demonstration that the requirements 

18 set forth in subsection (c)(5) have been satis19 fied. 

20 (e) ENFORCEMENT.—If the Administrator deter21 mines that a State is not in compliance with this section, 

22 the Administrator may withhold up to twice the number 

23 of allowances that the State failed to use in accordance 

24 with the requirements of this section, that such State 

25 would otherwise be eligible to receive under this section 
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1 in later years. Allowances withheld pursuant to this sub2 section shall be distributed among the remaining States 

3 in accordance with the requirements of subsection (b). 

4 SEC. 133. SUPPORT OF INDIAN RENEWABLE ENERGY AND 

5 ENERGY EFFICIENCY PROGRAMS. 

6 (a) DEFINITIONS.—For purposes of this section: 

7 (1) ALLOWANCE; COST-EFFECTIVE; RENEW8 ABLE ENERGY RESOURCE.—The terms ‘‘allowance’’, 

9 ‘‘cost-effective’’, and ‘‘renewable energy resource’’ 

10 have the meaning given those terms in section 132 

11 of this Act. 

12 (2) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 

13 has the meaning given the term in section 4 of the 

14 Indian Self-Determination and Education Assistance 

15 Act (25. U.S.C. 450b). 

16 (3) SECRETARY.—The term ‘‘Secretary’’ means 

17 the Secretary of Energy. 

18 (b) ESTABLISHMENT.—Not later than 18 months 

19 after the date of enactment of this Act, the Secretary 

20 shall, in consultation with the Administrator and the Sec21 retary of the Interior, promulgate regulations establishing 

22 a program to distribute allowances to Indian tribes on a 

23 competitive basis for the following purposes: 
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1 (1) ENERGY EFFICIENCY.—Cost-effective en2 ergy efficiency programs for end-use consumers of 

3 electricity, natural gas, home heating oil, or propane. 

4 (2) RENEWABLE ENERGY.—Deployment of 

5 technologies to generate electricity from renewable 

6 energy resources. 

7 (c) REQUIREMENTS.—The regulations promulgated 

8 pursuant to subsection (b) shall prescribe design elements 

9 and requirements of the program established under this 

10 section, including— 

11 (1) objective criteria for evaluating proposals 

12 submitted by Indian tribes, and for selecting projects 

13 and programs to receive support, under this section; 

14 (2) reporting requirements for Indian tribes 

15 that receive allowances under this section; and 

16 (3) other appropriate elements and require17 ments. 

18 (d) DISTRIBUTION.—The Administrator shall, at the 

19 direction of the Secretary, distribute to Indian tribes al20 lowances that are set aside, pursuant to section 132, for 

21 use under this section. 

22 Subtitle E—Smart Grid 

23 Advancement 

24 SEC. 141. DEFINITIONS. 

25 For purposes of this subtitle: 
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1 (1) The term ‘‘applicable baseline’’ means the 

2 average of the highest three annual peak demands a 

3 load-serving entity has experienced during the 5 

4 years immediately prior to the date of enactment of 

5 this Act. 

6 (2) The term ‘‘Commission’’ means Federal En7 ergy Regulatory Commission. 

8 (3) The term ‘‘load-serving entity’’ means an 

9 entity that provides electricity directly to retail con10 sumers with the responsibility to assure power qual11 ity and reliability, including such entities that are 

12 investor-owned, publicly owned, owned by rural elec13 tric cooperatives, or other entities. 

14 (4) The term ‘‘peak demand’’ means the high15 est point of electricity demand, net of any distrib16 uted electricity generation or storage from sources 

17 on the load-serving entity’s customers’ premises, 

18 during any hour on the system of a load serving en19 tity during a calendar year, expressed in Megawatts 

20 (MW), or more than one such high point as a func21 tion of seasonal demand changes. 

22 (5) The term ‘‘peak demand reduction’’ means 

23 the reduction in annual peak demand as compared 

24 to a previous baseline year or period, expressed in 

25 Megawatts (MW), whether accomplished by— 
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1 (A) diminishing the end-use requirements 

2 for electricity; 

3 (B) use of locally stored energy or gen4 erated electricity to meet those requirements 

5 from distributed resources on the load-serving 

6 entity’s customers’ premises and without use of 

7 high-voltage transmission; or 

8 (C) energy savings from efficient operation 

9 of the distribution grid resulting from the use 

10 of a Smart Grid. 

11 (6) The term ‘‘peak demand reduction plan’’ 

12 means a plan developed by or for a load-serving enti13 ty that it will implement to meet its peak demand 

14 reduction goals. 

15 (7) The term ‘‘peak period’’ means the time pe16 riod on the system of a load-serving entity relative 

17 to peak demand that may warrant special measures 

18 or electricity resources to maintain system reliability 

19 while meeting peak demand. 

20 (8) The term ‘‘Secretary’’ means the Secretary 

21 of Energy. 

22 (9) The term ‘‘Smart Grid’’ has the meaning 

23 provided by section 1301 of the Energy Independ24 ence and Security Act of 2007 (15 U.S.C. 17381). 
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1 SEC. 142. ASSESSMENT OF SMART GRID COST EFFECTIVE2 NESS IN PRODUCTS. 

3 (a) ASSESSMENT.—Within 1 year after the date of 

4 enactment of this Act, the Secretary and the Adminis5 trator shall each assess the potential for cost-effective in6 tegration of Smart Grid technologies and capabilities in 

7 all products that are reviewed by the Department of En8 ergy and the Environmental Protection Agency, respec9 tively, for potential designation as Energy Star products. 

10 (b) ANALYSIS.—(1) Within 2 years after the date of 

11 enactment of this Act, the Secretary and the Adminis12 trator shall each prepare an analysis of the potential en13 ergy savings, greenhouse gas emission reductions, and 

14 electricity cost savings that could accrue for each of the 

15 products identified by the assessment in subsection (a) in 

16 the following optimal circumstances: 

17 (A) The products possessed Smart Grid capa18 bility and interoperability that is tested and proven 

19 reliable. 

20 (B) The products were utilized in an electricity 

21 utility service area which had Smart Grid capability 

22 and offered customers rate or program incentives to 

23 use the products. 

24 (C) The utility’s rates reflected national average 

25 costs, including average peak and valley seasonal 

26 and daily electricity costs. 
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1 (D) Consumers using such products took full 

2 advantage of such capability. 

3 (E) The utility avoided incremental investments 

4 and rate increases related to such savings. 

5 (2) The analysis under paragraph (1) shall be consid6 ered the ‘‘best case’’ Smart Grid analysis. On the basis 

7 of such an analysis for each product, the Secretary and 

8 the Administrator shall determine whether the installation 

9 of Smart Grid capability for such a product would be cost 

10 effective. For purposes of this paragraph, the term ‘‘cost 

11 effective’’ means that the cumulative savings from using 

12 the product under the best case Smart Grid circumstances 

13 for a period of one-half of the product’s expected useful 

14 life will be greater than the incremental cost of the Smart 

15 Grid features included in the product. 

16 (3) To the extent that including Smart Grid capa17 bility in any products analyzed under paragraph (2) is 

18 found to be cost effective in the best case, the Secretary 

19 and the Administrator shall, not later than 3 years after 

20 the date of enactment of this Act take each of the fol21 lowing actions: 

22 (A) Inform the manufacturer of such product of 

23 such finding of cost effectiveness. 

24 (B) Assess the potential contributions the devel25 opment and use of products with Smart Grid tech-
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1 nologies bring to reducing peak demand and pro2 moting grid stability. 

3 (C) Assess the potential national energy savings 

4 and electricity cost savings that could be realized if 

5 Smart Grid potential were installed in the relevant 

6 products reviewed by the Energy Star program. 

7 (D) Assess and identify options for providing 

8 consumers information on products with Smart Grid 

9 capabilities, including the necessary conditions for 

10 cost-effective savings. 

11 (E) Submit a report to Congress summarizing 

12 the results of the assessment for each class of prod13 ucts, and presenting the potential energy and green14 house gas savings that could result if Smart Grid 

15 capability were installed and utilized on such prod16 ucts. 

17 SEC. 143. INCLUSIONS OF SMART GRID CAPABILITY ON AP18 PLIANCE ENERGY GUIDE LABELS. 

19 Section 324(a)(2) of the Energy Policy and Conserva20 tion Act (42 U.S.C. 6294(a)(2)) is amended by adding the 

21 following at the end: 

22 ‘‘(J)(i) Not later than 1 year after the date 

23 of enactment of this subparagraph, the Federal 

24 Trade Commission shall initiate a rulemaking 

25 to consider making a special note in a promi-
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1 nent manner on any ENERGY GUIDE label 

2 for any product actually including Smart Grid 

3 capability that— 

4 ‘‘(I) Smart Grid capability is a fea5 ture of that product; 

6 ‘‘(II) the use and value of that feature 

7 depended on the Smart Grid capability of 

8 the utility system in which the product was 

9 installed and the active utilization of that 

10 feature by the customer; and 

11 ‘‘(III) on a utility system with Smart 

12 Grid capability, the use of the product’s 

13 Smart Grid capability could reduce the 

14 customer’s cost of the product’s annual op15 eration by an estimated dollar amount 

16 range representing the result of incre17 mental energy and electricity cost savings 

18 that would result from the customer taking 

19 full advantage of such Smart Grid capa20 bility. 

21 ‘‘(ii) Not later than 3 years after the date 

22 of enactment of this subparagraph, the Com23 mission shall complete the rulemaking initiated 

24 under clause (i).’’. 
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1 SEC. 144. SMART GRID PEAK DEMAND REDUCTION GOALS. 

2 (a) GOALS.—Not later than 1 year after the date of 

3 enactment of this section, each load-serving entity, or, at 

4 the option of the State, each State with respect to load5 serving entities that the State regulates, shall determine 

6 and publish peak demand reduction goals for any load7 serving entities that have an applicable baseline in excess 

8 of 250 megawatts. 

9 (b) BASELINES.—(1) The Commission, in consulta10 tion with the Secretary and the Administrator, shall de11 velop and publish, after an opportunity for public com12 ment, but not later than 180 days after enactment of this 

13 section, a methodology to provide for adjustments or nor14 malization to a load-serving entity’s applicable baseline 

15 over time to reflect changes in the number of customers 

16 served, weather conditions, general economic conditions, 

17 and any other appropriate factors external to peak de18 mand management, as determined by the Commission. 

19 (2) The Commission shall support load-serving enti20 ties (including any load-serving entities with an applicable 

21 baseline of less than 250 megawatts that volunteer to par22 ticipate in achieving the purposes of this section) in deter23 mining their applicable baselines, and in developing their 

24 peak demand reduction goals. 

25 (3) The Secretary, in consultation with the Commis26 sion, the Administrator, and the North American Electric 
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1 Reliability Corporation, shall develop a system and rules 

2 for measurement and verification of demand reductions. 

3 (c) PEAK DEMAND REDUCTION GOALS.—(1) Peak 

4 demand reduction goals may be established for an indi5 vidual load-serving entity, or, at the determination of a 

6 State, tribal, or regional entity, by that State, tribal, or 

7 regional entity for a larger region that shares a common 

8 system peak demand and for which peak demand reduc9 tion measures would offer regional benefit. 

10 (2) A State or regional entity establishing peak de11 mand reduction goals shall cooperate, as necessary and 

12 appropriate, with the Commission, the Secretary, State 

13 regulatory commissions, State energy offices, the North 

14 American Electric Reliability Corporation, and other rel15 evant authorities. 

16 (3) In determining the applicable peak demand reduc17 tion goals— 

18 (A) States and other jurisdictional entities may 

19 utilize the results of the 2009 National Demand Re20 sponse Potential Assessment, as authorized by sec21 tion 571 of the National Energy Conservation Policy 

22 Act (42 U.S.C. 8279); and 

23 (B) the relative economics of peak demand re24 duction and generation required to meet peak de-
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1 mand shall be evaluated in a neutral and objective 

2 manner. 

3 (4) The applicable peak demand reduction goals shall 

4 provide that— 

5 (A) load-serving entities will reduce or mitigate 

6 peak demand by a minimum percentage amount 

7 from the applicable baseline to a lower peak demand 

8 during calendar year 2012; 

9 (B) load-serving entities will reduce or mitigate 

10 peak demand by a minimum percentage greater 

11 amount from the applicable baseline to a lower peak 

12 demand during calendar year 2015; and 

13 (C) the minimum percentage reductions estab14 lished as peak demand reduction goals shall be the 

15 maximum reductions that are realistically achievable 

16 with an aggressive effort to deploy Smart Grid and 

17 peak demand reduction technologies and methods, 

18 including but not limited to those listed in sub19 section (d). 

20 (d) PLAN.—Each load-serving entity shall prepare a 

21 peak demand reduction plan that demonstrates its ability 

22 to meet each applicable goal by any or a combination of 

23 the following options: 

24 (1) Direct reduction in megawatts of peak de25 mand through— 
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1 (A) energy efficiency measures (including 

2 efficient transmission wire technologies which 

3 significantly reduce line loss compared to tradi4 tional wire technology) with reliable and contin5 ued application during peak demand periods; or 

6 (B) use of a Smart Grid. 

7 (2) Demonstration that an amount of 

8 megawatts equal to a stated portion of the applicable 

9 goal is contractually committed to be available for 

10 peak reduction through one or more of the following: 

11 (A) Megawatts enrolled in demand re12 sponse programs. 

13 (B) Megawatts subject to the ability of a 

14 load-serving entity to call on demand response 

15 programs, smart appliances, smart electricity or 

16 energy storage devices, distributed generation 

17 resources on the entity’s customers’ premises, 

18 or other measures directly capable of actively, 

19 controllably, reliably, and dynamically reducing 

20 peak demand (‘‘dynamic peak management con21 trol’’). 

22 (C) Megawatts available from distributed 

23 dynamic electricity or energy storage under 

24 agreement with the owner of that storage. 
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1 (D) Megawatts committed from 

2 dispatchable distributed generation dem3 onstrated to be reliable under peak period con4 ditions and in compliance with air quality regu5 lations. 

6 (E) Megawatts available from smart appli7 ances and equipment with Smart Grid capa8 bility available for direct control by the utility 

9 through agreement with the customer owning 

10 the appliances or equipment or with a third 

11 party pursuant to such agreements. 

12 (F) Megawatts from a demonstrated and 

13 assured minimum of distributed solar electric 

14 generation capacity in instances where peak pe15 riod and peak demand conditions are directly 

16 related to solar radiation and accompanying 

17 heat. 

18 (3) If any of the methods listed in subpara19 graph (C), (D), or (E) of paragraph (2) are relied 

20 upon to meet its peak demand reduction goals, the 

21 load-serving entity must demonstrate this capability 

22 by operating a test during the applicable calendar 

23 year. 

24 (4) Nothing in this section shall require the 

25 publication in peak demand reduction goals or in 
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1 any peak demand reduction plan of any information 

2 that is confidential for competitive or other reasons 

3 or that identifies individual customers. 

4 (e) EXISTING AUTHORITY AND REQUIREMENTS.— 

5 Nothing in this section diminishes or supersedes any au6 thority of a State or political subdivision of a State to 

7 adopt or enforce any law or regulation respecting peak de8 mand management, demand response, distributed energy 

9 storage, use of distributed generation, or the regulation 

10 of load-serving entities. The Commission, in consultation 

11 with States and Indian tribes having such peak manage12 ment, demand response and distributed energy storage 

13 programs, shall to the maximum extent practicable, facili14 tate coordination between the Federal program and such 

15 State and tribal programs. 

16 (f) RELIEF.—The Commission may, for good cause, 

17 grant relief to load-serving entities from the requirements 

18 of this section. 

19 (g) OTHER LAWS.—Except as provided in sub20 sections (e) and (f), no law or regulation shall relieve any 

21 person of any requirement otherwise applicable under this 

22 section. 

23 (h) COMPLIANCE.—(1) The Commission shall within 

24 1 year after the date of enactment of this Act establish 

25 a public website where the Commission will provide infor-
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1 mation and data demonstrating compliance by States, In2 dian tribes regional entities, and load-serving entities with 

3 this section, including the success of load-serving entities 

4 in meeting applicable peak demand reduction goals. 

5 (2) The Commission shall, by April 1 of each year 

6 beginning in 2012, provide a report to Congress on com7 pliance with this section and success in meeting applicable 

8 peak demand reduction goals and, as appropriate, shall 

9 make recommendations as to how to increase peak de10 mand reduction efforts. 

11 (3) The Commission shall note in each such report 

12 any State, political subdivision of a State, or load-serving 

13 entity that has failed to comply with this section, or is 

14 not a part of any region or group of load-serving entities 

15 serving a region that has complied with this section. 

16 (4) The Commission shall have and exercise the au17 thority to take reasonable steps to modify the process of 

18 establishing peak demand reduction goals and to accept 

19 adjustments to them as appropriate when sought by load20 serving entities. 

21 (i) ASSISTANCE AND FUNDING.— 

22 (1) ASSISTANCE TO STATES AND TRIBES.—Any 

23 costs incurred by States for activities undertaken 

24 pursuant to this section shall be supported by the 

25 use of emission allowances allocated to the States’ 
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1 SEED Accounts or to the tribes pursuant to section 

2 132 of this Act. To the extent that a State provides 

3 allowances to local governments within the State to 

4 implement this program, that shall be deemed a dis5 tribution of such allowances to units of local govern6 ment pursuant to subsection (c)(1) of that section. 

7 (2) FUNDING.—There are authorized to be ap8 propriated such sums as may be necessary to the 

9 Commission, the Secretary, and the Administrator to 

10 carry out the provisions of this section. 

11 SEC. 145. REAUTHORIZATION OF ENERGY EFFICIENCY PUB12 LIC INFORMATION PROGRAM TO INCLUDE 

13 SMART GRID INFORMATION. 

14 (a) IN GENERAL.—Section 134 of the Energy Policy 

15 Act of 2005 (42 U.S.C. 15832) is amended as follows: 

16 (1) By amending the section heading to read as 

17 follows: ‘‘ENERGY EFFICIENCY AND SMART GRID

18 PUBLIC INFORMATION INITIATIVE’’. 

19 (2) In paragraph (1) of subsection (a) by strik20 ing ‘‘reduce energy consumption during the 4-year 

21 period beginning on the date of enactment of this 

22 Act’’ and inserting ‘‘increase energy efficiency and 

23 to adopt Smart Grid technology and practices’’. 

24 (3) In paragraph (2) of subsection (a) by strik25 ing ‘‘benefits to consumers of reducing’’ and insert-
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1 ing ‘‘economic and environmental benefits to con2 sumers and the United States of optimizing’’. 

3 (4) In subsection (a) by inserting at the begin4 ning of paragraph (3) ‘‘the effect of energy effi5 ciency and Smart Grid capability in reducing energy 

6 and electricity prices throughout the economy, to7 gether with’’. 

8 (5) In subsection (a)(4) by redesignating sub9 paragraph (D) as (E), by striking ‘‘and’’ at the end 

10 of subparagraph (C), and by inserting after subpara11 graph (C) the following: 

12 ‘‘(D) purchasing and utilizing equipment 

13 that includes Smart Grid features and capa14 bility; and’’. 

15 (6) In subsection (c), by striking ‘‘Not later 

16 than July 1, 2009,’’ and inserting, ‘‘For each year 

17 when appropriations pursuant to the authorization 

18 in this section exceed $10,000,000,’’. 

19 (7) In subsection (d) by striking ‘‘2010’’ and 

20 inserting ‘‘2020’’. 

21 (8) In subsection (e) by striking ‘‘2010’’ and in22 serting ‘‘2020’’. 

23 (b) TABLE OF CONTENTS.—The item relating to sec24 tion 134 in the table of contents for the Energy Policy 
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1 Act of 2005 (42 U.S.C. 15801 and following) is amended 

2 to read as follows: 

‘‘Sec. 134. Energy efficiency and Smart Grid public information initiative.’’. 

3 SEC. 146. INCLUSION OF SMART GRID FEATURES IN APPLI4 ANCE REBATE PROGRAM. 

5 (a) AMENDMENTS.—Section 124 of the Energy Pol6 icy Act of 2005 (42 U.S.C. 15821) is amended as follows: 

7 (1) By amending the section heading to read as 

8 follows: ‘‘ENERGY EFFICIENT AND SMART AP9 PLIANCE REBATE PROGRAM.’’. 

10 (2) By redesignating paragraphs (4) and (5) of 

11 subsection (a) as paragraphs (5) and (6), respec12 tively, and inserting after paragraph (3) the fol13 lowing: 

14 ‘‘(4) SMART APPLIANCE.—The term ‘smart ap15 pliance’ means a product that the Administrator of 

16 the Environmental Protection Agency or the Sec17 retary of Energy has determined qualifies for such 

18 a designation in the Energy Star program pursuant 

19 to section 142 of the American Clean Energy and 

20 Security Act of 2009, or that the Secretary or the 

21 Administrator has separately determined includes 

22 the relevant Smart Grid capabilities listed in section 

23 1301 of the Energy Independence and Security Act 

24 of 2007 (15 U.S.C. 17381).’’. 
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1 (3) In subsection (b)(1) by inserting ‘‘and 

2 smart’’ after ‘‘efficient’’ and by inserting after 

3 ‘‘products’’ the first place it appears ‘‘, including 

4 products designated as being smart appliances’’. 

5 (4) In subsection (b)(3), by inserting ‘‘the ad6 ministration of’’ after ‘‘carry out’’. 

7 (5) In subsection (d), by inserting ‘‘the admin8 istration of’’ after ‘‘carrying out’’ and by inserting 

9 ‘‘, and up to 100 percent of the value of the rebates 

10 provided pursuant to this section’’ before the period 

11 at the end. 

12 (6) In subsection (e)(3), by inserting ‘‘, with 

13 separate consideration as applicable if the product is 

14 also a smart appliance,’’ after ‘‘Energy Star prod15 uct’’ the first place it appears and by inserting ‘‘or 

16 smart appliance’’ before the period at the end. 

17 (7) In subsection (f), by striking 

18 ‘‘$50,000,000’’ through the period at the end and 

19 inserting ‘‘$100,000,000 for each fiscal year from 

20 2010 through 2015.’’. 

21 (b) TABLE OF CONTENTS.—The item relating to sec22 tion 124 in the table of contents for the Energy Policy 

23 Act of 2005 (42 U.S.C. 15801 and following) is amended 

24 to read as follows: 

‘‘Sec. 124. Energy efficient and smart appliance rebate program.’’. 
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1 Subtitle F—Transmission Planning 

2 SEC. 151. TRANSMISSION PLANNING AND SITING. 

3 (a) IN GENERAL.—Section 216 of the Federal Power 

4 Act (16 U.S.C. 824p) is amended as follows: 

5 (1) In subsection (b), in paragraph (5), by 

6 striking ‘‘; and’’ and inserting a semicolon, in para7 graph (6) by striking the period and inserting ‘‘; 

8 and’’ and by adding the following at the end thereof: 

9 ‘‘(7) the facility is interstate in nature or is an 

10 intrastate segment integral to a proposed interstate 

11 facility;’’. 

12 (2) In subsection (k), by inserting at the end 

13 the following: ‘‘Subsections (a), (b), (c), and (h) of 

14 this section shall not apply in the Western inter15 connection.’’. 

16 (3) In subsections (d) and (e), by striking ‘‘sub17 section (b)’’ in each place and inserting ‘‘subsection 

18 (b) or section 216B’’, and by striking ‘‘permit’’ and 

19 inserting ‘‘permit or certificate’’ in each place it ap20 pears. 

21 (b) NEW SECTIONS.—The Federal Power Act (16 

22 U.S.C. 824p) is amended by inserting the following new 

23 sections after section 216: 
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1 ‘‘SEC. 216A. TRANSMISSION PLANNING. 

2 ‘‘(a) FEDERAL POLICY FOR TRANSMISSION PLAN3 NING.— 

4 ‘‘(1) OBJECTIVES.—It is the policy of the 

5 United States that regional electric grid planning 

6 should facilitate the deployment of renewable and 

7 other zero-carbon and low-carbon energy sources for 

8 generating electricity to reduce greenhouse gas emis9 sions while ensuring reliability, reducing congestion, 

10 ensuring cyber-security, minimizing environmental 

11 harm, and providing for cost-effective electricity 

12 services throughout the United States, in addition to 

13 serving the objectives stated in section 217(b)(4). 

14 ‘‘(2) OPTIONS.—In addition to the policy under 

15 paragraph (1), it is the policy of the United States 

16 that regional electric grid planning to meet these ob17 jectives should result from an open, inclusive and 

18 transparent process, taking into account all signifi19 cant demand-side and supply-side options, including 

20 energy efficiency, distributed generation, renewable 

21 energy and zero-carbon electricity generation tech22 nologies, smart-grid technologies and practices, de23 mand response, electricity storage, voltage regulation 

24 technologies, high capacity conductors with at least 

25 25 percent greater efficiency than traditional ACSR 

26 (aluminum stranded conductors steel reinforced) 
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1 conductors, superconductor technologies, under2 ground transmission technologies, and new conven3 tional electric transmission capacity and corridors. 

4 ‘‘(b) PLANNING.— 

5 ‘‘(1) PLANNING PRINCIPLES.—Not later than 1 

6 year after the date of enactment of this section, the 

7 Commission shall adopt, after notice and oppor8 tunity for comment, national electricity grid plan9 ning principles derived from the Federal policy es10 tablished under subsection (a) to be applied in ongo11 ing and future transmission planning that may im12 plicate interstate transmission of electricity. 

13 ‘‘(2) REGIONAL PLANNING ENTITIES.—Not 

14 later than 3 months after the date of adoption by 

15 the Commission of national electricity grid planning 

16 principles pursuant to paragraph (1), entities that 

17 conduct or may conduct transmission planning pur18 suant to State, tribal, or Federal law or regulation, 

19 including States, Indian tribes, entities designated 

20 by States and Indian tribes, Federal Power Mar21 keting Administrations, transmission providers, op22 erators and owners, regional organizations, and elec23 tric utilities, and that are willing to incorporate the 

24 national electricity grid planning principles adopted 

25 by the Commission in their electric grid planning, 
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1 shall identify themselves and the regions for which 

2 they propose to develop plans to the Commission. 

3 ‘‘(3) COORDINATION OF REGIONAL PLANNING

4 ENTITIES.—The Commission shall encourage re5 gional planning entities described under paragraph 

6 (2) to cooperate and coordinate across regions and 

7 to harmonize regional electric grid planning with 

8 planning in adjacent or overlapping jurisdictions to 

9 the maximum extent feasible. The Commission shall 

10 work with States, Indian tribes, Federal land man11 agement agencies, State energy, environment, nat12 ural resources, and land management agencies and 

13 commissions, Federal power marketing administra14 tions, electric utilities, transmission providers, load15 serving entities, transmission operators, regional 

16 transmission organizations, independent system op17 erators, and other organizations to resolve any con18 flict or competition among proposed planning enti19 ties in order to build consensus and promote the 

20 Federal policy established under subsection (a). The 

21 Commission shall seek to ensure that planning that 

22 is consistent with the national electricity grid plan23 ning principles adopted pursuant to paragraph (1) is 

24 conducted in all regions of the United States and 

25 the territories, but in a manner that, to the extent 
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1 feasible, avoids uncoordinated planning by more 

2 than one planning entity for the same area. 

3 ‘‘(4) RELATION TO EXISTING PLANNING POL4 ICY.—In implementing the Federal policy established 

5 under subsection (a), the Commission shall— 

6 ‘‘(A) incorporate and coordinate with any 

7 ongoing planning efforts undertaken pursuant 

8 to section 217 and Commission Order No. 890; 

9 ‘‘(B) coordinate with the Secretary of En10 ergy in providing to the regional planning enti11 ties an annual summary of national energy pol12 icy priorities and goals; 

13 ‘‘(C) coordinate with corridor designation 

14 and planning functions carried out pursuant to 

15 section 216 by the Secretary of Energy, who 

16 shall provide financial support from available 

17 funds to support the purposes of this section; 

18 and 

19 ‘‘(D) coordinate with the Secretaries of the 

20 Interior and Agriculture and Indian tribes in 

21 carrying out the Secretaries’ or tribal govern22 ments’ existing responsibilities for the planning 

23 or siting of transmission facilities on Federal or 

24 tribal lands, consistent with law, policy, and 
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1 regulations relating to the management of fed2 eral public lands. 

3 ‘‘(5) ASSISTANCE.— 

4 ‘‘(A) IN GENERAL.—The Commission shall 

5 provide support to and may participate if in6 vited to do so in the regional grid planning 

7 processes conducted by regional planning enti8 ties. The Secretary of Energy and the Commis9 sion may provide planning resources and assist10 ance as required or as requested by regional 

11 planning entities, including system data, cost 

12 information, system analysis, technical exper13 tise, modeling support, dispute resolution serv14 ices, and other assistance to regional planning 

15 entities, as appropriate. 

16 ‘‘(B) AUTHORIZATION.—There are author17 ized to be appropriated such sums as may be 

18 necessary to carry out this paragraph. 

19 ‘‘(6) CONFLICT RESOLUTION.—In the event 

20 that regional grid plans conflict, the Commission 

21 shall assist the regional planning entities in resolving 

22 such conflicts in order to achieve the objectives of 

23 the Federal policy established under subsection (a). 

24 ‘‘(7) SUBMISSION OF PLANS.—The Commission 

25 shall require regional planning entities to submit ini-
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1 tial regional electric grid plans to the Commission 

2 not later than 18 months after the date the Commis3 sion promulgates national electricity grid planning 

4 principles pursuant to paragraph (1), with updates 

5 to such plans not less than every 3 years thereafter. 

6 The Commission shall review such plans for consist7 ency with the national grid planning principles and 

8 may return a plan to one or more planning entities 

9 for further consideration, along with the Commis10 sion’s own recommendations for resolution of any 

11 conflict or for improvement. 

12 ‘‘(8) INTEGRATION OF PLANS.—Regional elec13 tric grid plans should, in general, be developed from 

14 sub-regional requirements and plans, including plan15 ning input reflecting individual utility service areas. 

16 Regional plans may then in turn be combined into 

17 larger regional plans, up to interconnection-wide and 

18 national plans, as appropriate and necessary as de19 termined by the Commission. In no case shall a 

20 multi-regional plan impose inclusion of a facility on 

21 a region that has submitted a valid plan that, after 

22 efforts to resolve the conflict, does not include such 

23 facility. To the extent practicable, all plans sub24 mitted to the Commission shall be public documents 

25 and available on the Commission’s Web site. 
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1 ‘‘(9) MULTI-REGIONAL MEETINGS.—As regional 

2 grid plans are submitted to the Commission, the 

3 Commission may convene multi-regional meetings to 

4 discuss regional grid plan consistency and integra5 tion, including requirements for multi-regional 

6 projects, and to resolve any conflicts that emerge 

7 from such multi-regional projects. The Commission 

8 shall provide its recommendations for eliminating 

9 any inter-regional conflicts. 

10 ‘‘(10) REPORT TO CONGRESS.—Not later than 

11 3 years after the date of enactment of this section 

12 and each 3 years thereafter, the Commission shall 

13 provide a report to Congress containing the results 

14 of the regional grid planning process, including sum15 maries of the adopted regional plans and the extent 

16 to which the Federal policy objectives in subsection 

17 (a) have been successfully achieved. The Commission 

18 shall provide an electronic version of its report on its 

19 website with links to all regional and sub-regional 

20 plans taken into account. The Commission shall note 

21 and provide its recommended resolution for any con22 flicts not resolved during the planning process. The 

23 Commission shall make any recommendations to 

24 Congress on the appropriate Federal role or support 

25 required to address the needs of the electric grid, in-
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1 cluding recommendations for addressing any needs 

2 that are beyond the reach of existing State, tribal, 

3 and Federal authority. 

4 ‘‘SEC. 216B. SITING AND CONSTRUCTION IN THE WESTERN 

5 INTERCONNECTION. 

6 ‘‘(a) APPLICABILITY.—This section applies only to 

7 States located in the Western Interconnection and does 

8 not apply to States located in the Eastern Interconnection, 

9 to the States of Alaska or Hawaii, or to ERCOT. 

10 ‘‘(b) CERTIFICATE OF PUBLIC CONVENIENCE AND

11 NECESSITY.—The Commission may, after notice and op12 portunity for hearing, issue a certificate of public conven13 ience and necessity for the construction or modification 

14 of a transmission facility if the Commission finds that— 

15 ‘‘(1) the facility was identified and included in 

16 one or more relevant and final regional or inter17 connection-wide electric grid plans submitted to the 

18 Commission pursuant to subsection (b) of 216A; 

19 ‘‘(2) any conflict among regional electric grid 

20 plans concerning the need for the facility was re21 solved; 

22 ‘‘(3) such relevant regional electric grid plans 

23 are consistent with the national grid planning prin24 ciples adopted by the Commission pursuant to sub25 section (b); 
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1 ‘‘(4) the facility was identified as needed in sig2 nificant measure to meet demand for renewable en3 ergy in such plans; 

4 ‘‘(5) the facility is a multistate facility; 

5 ‘‘(6) the developer of such facility filed a com6 plete application seeking approval for the siting of 

7 the facility with a state commission or other entity 

8 that has authority to approve the siting of the facil9 ity; 

10 ‘‘(7) a State commission or other entity that 

11 has authority to approve the siting of the facility— 

12 ‘‘(A) did not issue a decision on an appli13 cation seeking approval for the siting of the fa14 cility within 1 year after the date the applicant 

15 submitted a completed application to the State; 

16 ‘‘(B) denied a complete application seeking 

17 approval for the siting of the facility; or 

18 ‘‘(C) authorized the siting of the facility 

19 subject to conditions that unreasonably inter20 fere with the development of the facility; and 

21 ‘‘(8) the siting of the facility can be accom22 plished in a manner consistent with the Federal pol23 icy established in subsection (a) of section 216A and 

24 the national grid planning principles adopted by the 
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1 Commission pursuant to subsection (b) of section 

2 216A. 

3 ‘‘(c) STATE RECOMMENDATIONS ON RESOURCE PRO4 TECTION.—In issuing a final certificate of public conven5 ience and necessity pursuant to subsection (b), the Com6 mission shall— 

7 ‘‘(1) consider any siting constraints and mitiga8 tion measures based on habitat protection, health 

9 and safety considerations, environmental consider10 ations, or cultural site protection identified by rel11 evant State or local authorities; and 

12 ‘‘(2) incorporate those identified siting con13 straints or mitigation measures, including rec14 ommendations related to project routing, as condi15 tions in the final certificate of public convenience 

16 and necessity, or if the Commission determines that 

17 a recommended siting constraint or mitigation meas18 ure is infeasible, excessively costly, or inconsistent 

19 with the Federal policy established in subsection (a) 

20 of section 216A or the national grid planning prin21 ciples adopted by the Commission pursuant to sub22 section (b) of section 216A— 

23 ‘‘(A) consult with State regulatory agencies 

24 to seek to resolve the issue; 
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1 ‘‘(B) incorporate as conditions on the cer2 tificate such recommended siting constraints or 

3 mitigation measures as are determined to be 

4 appropriate by the Commission, based on con5 sultation by the Commission with State regu6 latory agencies, the Federal policy established 

7 in subsection (a) of section 216A and the na8 tional grid planning principles adopted by the 

9 Commission pursuant to subsection (b)of sec10 tion 216A, and the record before the Commis11 sion; and 

12 ‘‘(C) if, after consultation, the Commission 

13 does not adopt in whole or in part a rec14 ommendation of an agency, publish a finding 

15 that the adoption of the recommendation is in16 feasible, not cost effective, or inconsistent with 

17 this section or other applicable provisions of 

18 law. 

19 ‘‘(d) CERTIFICATE APPLICATIONS.—(1) An applica20 tion for a preliminary or final certificate of public conven21 ience and necessity under this subsection shall be made 

22 in writing to the Commission. 

23 ‘‘(2) The Commission shall issue rules specifying— 

24 ‘‘(A) the form of the application; 
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1 ‘‘(B) the information to be contained in the ap2 plication; and 

3 ‘‘(C) the manner of service of notice of the ap4 plication on interested persons. 

5 ‘‘(e) COORDINATION OF FEDERAL AUTHORIZATIONS

6 FOR TRANSMISSION FACILITIES.— 

7 ‘‘(1) In this subsection, the term ‘Federal au8 thorization’ shall have the same meaning and include 

9 the same actions as in section 216(h). 

10 ‘‘(2) The Federal Energy Regulatory Commis11 sion shall act as the lead agency for purposes of co12 ordinating all applicable Federal authorizations and 

13 related environmental reviews of the facility, pro14 vided, however, that to the extent the facility is pro15 posed to be sited on Federal lands, the Department 

16 of the Interior will assume such lead-agency duties 

17 as agreed between the Commission and the Depart18 ment of Interior. 

19 ‘‘(3) To the maximum extent practicable under 

20 applicable Federal law, the Commission, and to the 

21 extent agreed, the Secretary of Interior, shall coordi22 nate the Federal authorization and review process 

23 under this subsection with any Indian tribes, 

24 multistate entities, and State agencies that are re25 sponsible for conducting any separate permitting 
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1 and environmental reviews of the facility, to ensure 

2 timely and efficient review and permit decisions. 

3 ‘‘(4)(A) As head of the lead agency, the Chair4 man of the Commission, in consultation with the 

5 Secretary of Interior and with those entities referred 

6 to in paragraph (3) that are willing to coordinate 

7 their own separate permitting and environmental re8 views with the Federal authorization and environ9 mental reviews, shall establish prompt and binding 

10 intermediate milestones and ultimate deadlines for 

11 the review of, and Federal authorization decisions 

12 relating to, the proposed facility. 

13 ‘‘(B) The Chairman of the Commission, or the 

14 Secretary of Interior, as agreed under paragraph 

15 (2), shall ensure that, once an application has been 

16 submitted with such data as the lead agency con17 siders necessary, all permit decisions and related en18 vironmental reviews under all applicable Federal 

19 laws shall be completed— 

20 ‘‘(i) within 1 year; or 

21 ‘‘(ii) if a requirement of another provision 

22 of Federal law does not permit compliance with 

23 clause (i), as soon thereafter as is practicable. 

24 ‘‘(C) The Commission shall provide an expedi25 tious pre-application mechanism for prospective ap-
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1 plicants to confer with the agencies involved to have 

2 each such agency determine and communicate to the 

3 prospective applicant not later than 60 days after 

4 the prospective applicant submits a request for such 

5 information concerning— 

6 ‘‘(i) the likelihood of approval for a poten7 tial facility; and 

8 ‘‘(ii) key issues of concern to the agencies 

9 and public. 

10 ‘‘(5)(A) As lead agency head, the Chairman of 

11 the Commission, in consultation with the affected 

12 agencies, shall prepare a single environmental review 

13 document, which shall be used as the basis for all 

14 decisions on the proposed project under Federal law. 

15 ‘‘(B) The Chairman of the Commission and the 

16 heads of other agencies shall streamline the review 

17 and permitting of transmission within corridors des18 ignated under section 503 of the Federal Land Pol19 icy and Management Act (43 U.S.C. 1763) by fully 

20 taking into account prior analyses and decisions re21 lating to the corridors. 

22 ‘‘(C) The document shall include consideration 

23 by the relevant agencies of any applicable criteria or 

24 other matters as required under applicable law. 
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1 ‘‘(6)(A) If any agency has denied a Federal au2 thorization required for a transmission facility, or 

3 has failed to act by the deadline established by the 

4 Commission pursuant to this section for deciding 

5 whether to issue the authorization, the applicant or 

6 any State in which the facility would be located may 

7 file an appeal with the President, who shall, in con8 sultation with the affected agency, review the denial 

9 or failure to take action on the pending application. 

10 ‘‘(B) Based on the overall record and in con11 sultation with the affected agency, the President 

12 may— 

13 ‘‘(i) issue the necessary authorization with 

14 any appropriate conditions; or 

15 ‘‘(ii) deny the application. 

16 ‘‘(C) The President shall issue a decision not 

17 later than 90 days after the date of the filing of the 

18 appeal. 

19 ‘‘(D) In making a decision under this para20 graph, the President shall comply with applicable re21 quirements of Federal law, including any require22 ments of— 

23 ‘‘(i) the National Forest Management Act 

24 of 1976 (16 U.S.C. 472a et seq.); 
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1 ‘‘(ii) the Endangered Species Act of 1973 

2 (16 U.S.C. 1531 et seq.); 

3 ‘‘(iii) the Federal Water Pollution Control 

4 Act (33 U.S.C. 1251 et seq.); 

5 ‘‘(iv) the National Environmental Policy 

6 Act of 1969 (42 U.S.C. 4321 et seq.); and 

7 ‘‘(v) the Federal Land Policy and Manage8 ment Act of 1976 (43 U.S.C. 1701 et seq.). 

9 ‘‘(7)(A) Not later than 18 months after August 

10 8, 2005, the Commission or, as requested, the Sec11 retary or Interior, shall issue any regulations nec12 essary to implement this subsection. 

13 ‘‘(B)(i) Not later than 1 year after August 8, 

14 2005, the Commission, the Secretary of Interior, 

15 and the heads of all Federal agencies with authority 

16 to issue Federal authorizations shall enter into a 

17 memorandum of understanding to ensure the timely 

18 and coordinated review and permitting of electricity 

19 transmission facilities. 

20 ‘‘(ii) Interested Indian tribes, multistate enti21 ties, and State agencies may enter the memorandum 

22 of understanding. 

23 ‘‘(C) The head of each Federal agency with au24 thority to issue a Federal authorization shall des25 ignate a senior official responsible for, and dedicate 
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1 sufficient other staff and resources to ensure, full 

2 implementation of the regulations and memorandum 

3 required under this paragraph. 

4 ‘‘(8)(A) Each Federal land use authorization 

5 for an electricity transmission facility shall be 

6 issued— 

7 ‘‘(i) for a duration, as determined by the 

8 Secretary of Interior, commensurate with the 

9 anticipated use of the facility; and 

10 ‘‘(ii) with appropriate authority to manage 

11 the right-of-way for reliability and environ12 mental protection. 

13 ‘‘(B) On the expiration of the authorization (in14 cluding an authorization issued before August 8, 

15 2005), the authorization shall be reviewed for re16 newal taking fully into account reliance on such elec17 tricity infrastructure, recognizing the importance of 

18 the authorization for public health, safety, and eco19 nomic welfare and as a legitimate use of Federal 

20 land. 

21 ‘‘(9) In exercising the responsibilities under this 

22 section, the Commission shall consult regularly 

23 with— 
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1 ‘‘(A) electric reliability organizations (in2 cluding related regional entities) approved by 

3 the Commission; and 

4 ‘‘(B) Transmission Organizations approved 

5 by the Commission.’’. 

6 SEC. 152. NET METERING FOR FEDERAL AGENCIES. 

7 (a) STANDARD.—Subsection (b) of section 113 of the 

8 Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 

9 2623) is amended by adding the following new paragraph 

10 at the end thereof: 

11 ‘‘(6) NET METERING FOR FEDERAL AGEN12 CIES.—Each electric utility shall offer to arrange 

13 (either directly or through a third party) to make 

14 interconnection and net metering available to Fed15 eral Government agencies, offices, or facilities in ac16 cordance with the requirements of section 115(j). 

17 The standard under this paragraph shall apply only 

18 to electric utilities that sold over 4,000,000 mega19 watt hours of electricity in the preceding year to the 

20 ultimate consumers thereof. In the case of a stand21 ard under this paragraph, a period of 1 year after 

22 the date of the enactment of this section shall be 

23 substituted for the 2-year period referred to in other 

24 provisions of this section.’’. 
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1 (b) SPECIAL RULES.—Section 115 of the Public Util2 ity Regulatory Policies Act of 1978 (16 U.S.C. 2625) is 

3 amended by adding the following new subsection at the 

4 end thereof: 

5 ‘‘(j) NET METERING FOR FEDERAL AGENCIES.—(1) 

6 The standard under paragraph (6) of section 113(b) shall 

7 require that rates and charges and contract terms and 

8 conditions for the sale of electric energy to the Federal 

9 Government or agency shall be the same as the rates and 

10 charges and contract terms and conditions that would be 

11 applicable if the agency did not own or operate a qualified 

12 generation unit and use a net metering system. 

13 ‘‘(2)(A) The standard under paragraph (6) of section 

14 113(b) shall require that each electric utility shall arrange 

15 to provide to the Government office or agency that quali16 fies for net metering an electrical energy meter capable 

17 of net metering and measuring, to the maximum extent 

18 practicable, the flow of electricity to or from the customer, 

19 using a single meter and single register, the cost of which 

20 shall be recovered from the customer. 

21 ‘‘(B) In a case in which it is not practicable to provide 

22 a meter under subparagraph (A), the utility (either di23 rectly or through a third party) shall, at the expense of 

24 the utility install 1 or more of those electric energy meters. 
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1 ‘‘(3)(A) The standard under paragraph (6) of section 

2 113(b) shall require that each electric utility shall cal3 culate the electric energy consumption for the Government 

4 office or agency using a net metering system that meets 

5 the requirements of this subsection and paragraph (6) of 

6 section 113(b) and shall measure the net electricity pro7 duced or consumed during the billing period using the me8 tering installed in accordance with this paragraph. 

9 ‘‘(B) If the electricity supplied by the retail electric 

10 supplier exceeds the electricity generated by the Govern11 ment office or agency during the billing period, the Gov12 ernment office or agency shall be billed for the net electric 

13 energy supplied by the retail electric supplier in accord14 ance with normal billing practices. 

15 ‘‘(C) If electric energy generated by the Government 

16 office or agency exceeds the electric energy supplied by 

17 the retail electric supplier during the billing period, the 

18 Government office or agency shall be billed for the appro19 priate customer charges for that billing period and cred20 ited for the excess electric energy generated during the 

21 billing period, with the credit appearing as a kilowatt-hour 

22 credit on the bill for the following billing period. 

23 ‘‘(D) Any kilowatt-hour credits provided to the Gov24 ernment office or agency as provided in this subsection 

25 shall be applied to the Government office or agency elec-
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1 tric energy consumption on the following billing period bill 

2 (except for a billing period that ends in the next calendar 

3 year). At the beginning of each calendar year, any unused 

4 kilowatt-hour credits remaining from the preceding year 

5 will carry over to the new year. 

6 ‘‘(4) The standard under paragraph (6) of section 

7 113(b) shall require that each electric utility shall offer 

8 a meter and retail billing arrangement that has time-dif9 ferentiated rates. The kilowatt-hour credit shall be based 

10 on the ratio representing the difference in retail rates for 

11 each time-of-use rate, or the credits shall be reflected on 

12 the bill of the Government office or agency as a monetary 

13 credit reflecting retail rates at the time of generation of 

14 the electric energy by the customer-generator. 

15 ‘‘(5) The standard under paragraph (6) of section 

16 113(b) shall require that the qualified generation unit, 

17 interconnection standards, and net metering system used 

18 by the Government office or agency shall meet all applica19 ble safety and performance and reliability standards estab20 lished by the National Electrical Code, the Institute of 

21 Electrical and Electronics Engineers, Underwriters Lab22 oratories, and the American National Standards Institute. 

23 ‘‘(6) The standard under paragraph (6) of section 

24 113(b) shall require that electric utilities shall not make 

25 additional charges, including standby charges, for equip-
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1 ment or services for safety or performance that are in ad2 dition to those necessary to meet the other standards and 

3 requirements of this subsection and paragraph (6) of sec4 tion 113(b). 

5 ‘‘(7) For purposes of this subsection and paragraph 

6 (6) of section 113(b): 

7 ‘‘(A) The term ‘Government’ means any office, 

8 facility, or agency of the Federal Government. 

9 ‘‘(B) The term ‘customer-generator’ means the 

10 owner or operator of a electricity generation unit. 

11 ‘‘(C) The term ‘electric generation unit’ means 

12 any renewable electric generation unit that is owned, 

13 operated, or sited on a Federal Government facility. 

14 ‘‘(D) The term ‘net metering’ means the proc15 ess of— 

16 ‘‘(i) measuring the difference between the 

17 electricity supplied to a customer-generator and 

18 the electricity generated by the customer-gener19 ator that is delivered to a utility at the same 

20 point of interconnection during an applicable 

21 billing period; and 

22 ‘‘(ii) providing an energy credit to the cus23 tomer-generator in the form of a kilowatt-hour 

24 credit for each kilowatt-hour of electricity pro-
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1 duced by the customer-generator from an elec2 tric generation unit.’’. 

3 (c) SAVINGS PROVISION.—If this section or a portion 

4 of this section is determined to be invalid or unenforceable, 

5 that shall not affect the validity or enforceability of any 

6 other provision of this Act. 

7 SEC. 153. SUPPORT FOR QUALIFIED ADVANCED ELECTRIC 

8 TRANSMISSION MANUFACTURING PLANTS, 

9 QUALIFIED HIGH EFFICIENCY TRANSMISSION 

10 PROPERTY, AND QUALIFIED ADVANCED 

11 ELECTRIC TRANSMISSION PROPERTY. 

12 (a) LOAN GUARANTEES PRIOR TO SEPTEMBER 30, 

13 2011.—Section 1705(a) of the Energy Policy Act of 2005 

14 (42 U.S.C. 16515(a)), as added by section 406 of the 

15 American Recovery and Reinvestment Act of 2009 (Public 

16 Law 109–58; 119 Stat. 594) is amended by adding the 

17 following new paragraph at the end thereof: 

18 ‘‘(5) The development, construction, acquisition, 

19 retrofitting, or engineering integration of a qualified 

20 advanced electric transmission manufacturing plant 

21 or the construction of a qualified high efficiency 

22 transmission property or a qualified advanced elec23 tric transmission property (whether by construction 

24 of new facilities or the modification of existing facili25 ties). For purposes of this paragraph: 
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1 ‘‘(A) The term ‘qualified advanced electric 

2 transmission property’ means any high voltage 

3 electric transmission cable, related substation, 

4 converter station, or other integrated facility 

5 that— 

6 ‘‘(i) utilizes advanced ultra low resist7 ance superconductive material or other ad8 vanced technology that has been deter9 mined by the Secretary of Energy as— 

10 ‘‘(I) reasonably likely to become 

11 commercially viable within 10 years 

12 after the date of enactment of this 

13 paragraph; 

14 ‘‘(II) capable of reliably transmit15 ting at least 5 gigawatts of high-volt16 age electric energy for distances 

17 greater than 300 miles with energy 

18 losses not exceeding 3 percent of the 

19 total power transported; and 

20 ‘‘(III) not creating an electro21 magnetic field; 

22 ‘‘(ii) has been determined by an ap23 propriate energy regulatory body, upon ap24 plication, to be in the public interest and 
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1 thereby eligible for inclusion in regulated 

2 rates; and 

3 ‘‘(iii) can be located safely and eco4 nomically in a permanent underground 

5 right of way not to exceed 25 feet in width. 

6 The term ‘qualified advanced electric trans7 mission property’ shall not include any property 

8 placed in service after December 31, 2016. 

9 ‘‘(B)(i) The term ‘qualified high efficiency 

10 transmission property’ means any high voltage 

11 overhead electric transmission line, related sub12 station, or other integrated facility that— 

13 ‘‘(I) utilizes advanced conductor core 

14 technology that— 

15 ‘‘(aa) has been determined by the 

16 Secretary of Energy as reasonably 

17 likely to become commercially viable 

18 within 10 years after the date of en19 actment of this paragraph; 

20 ‘‘(bb) is suitable for use on trans21 mission lines up to 765kV; and 

22 ‘‘(cc) exhibits power losses at 

23 least 30 percent lower than that of 

24 transmission lines using conventional 

25 ‘ACSR’ conductors; 
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1 ‘‘(II) has been determined by an ap2 propriate energy regulatory body, upon ap3 plication, to be in the public interest and 

4 thereby eligible for inclusion in regulated 

5 rates; and 

6 ‘‘(III) can be located safely and eco7 nomically in a right of way not to exceed 

8 that used by conventional ‘ACSR’ conduc9 tors; and 

10 ‘‘(ii) The term ‘qualified high efficiency 

11 transmission property’ shall not include any 

12 property placed in service after December 31, 

13 2016. 

14 ‘‘(C) The term ‘qualified advanced electric 

15 transmission manufacturing plant’ means any 

16 industrial facility located in the United States 

17 which can be equipped, re-equipped, expanded, 

18 or established to produce in whole or in part 

19 qualified advanced electric transmission prop20 erty.’’. 

21 (b) ADDITIONAL LOAN GUARANTEE AUTHORITY.— 

22 Section 1703 of the Energy Policy Act of 2005 (42 U.S.C. 

23 16513) is amended by adding the following new paragraph 

24 at the end of subsection (b): 
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1 ‘‘(12) The development, construction, acquisi2 tion, retrofitting, or engineering integration of a 

3 qualified advanced electric transmission manufac4 turing plant or the construction of a qualified ad5 vanced electric transmission property (whether by 

6 construction of new facilities or the modification of 

7 existing facilities). For purposes of this paragraph, 

8 the terms ‘qualified advanced electric transmission 

9 property’ and ‘qualified advanced electric trans10 mission manufacturing plant’ have the meanings 

11 provided by section 1705(a)(5).’’. 

12 (c) GRANTS.—The Secretary of Energy is authorized 

13 to provide grants for up to 50 percent of costs incurred 

14 in connection with the development, construction, acquisi15 tion of components for, or engineering of a qualified ad16 vanced electric transmission property defined in paragraph 

17 (5) of section 1705(a) of the Energy Policy Act of 2005 

18 (42 U.S.C. 16515(a)). Such grants may only be made to 

19 the first project which qualifies under that paragraph. 

20 There are authorized to be appropriated for purposes of 

21 this subsection not more than $100,000,000 for fiscal year 

22 2010. The United States shall take no equity or other 

23 ownership interest in the qualified advanced electric trans24 mission manufacturing plant or qualified advanced electric 
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1 transmission property for which funding is provided under 

2 this subsection. 

3 Subtitle G—Technical Corrections 

4 to Energy Laws 

5 SEC. 161. TECHNICAL CORRECTIONS TO ENERGY INDE6 PENDENCE AND SECURITY ACT OF 2007. 

7 (a) TITLE III—ENERGY SAVINGS THROUGH IM8 PROVED STANDARDS FOR APPLIANCE AND LIGHTING.— 

9 (1) Section 325(u) of the Energy Policy and Conservation 

10 Act (42 U.S.C. 6295(u)) (as amended by section 301(c) 

11 of the Energy Independence and Security Act of 2007 

12 (121 Stat. 1550)) is amended— 

13 (A) by redesignating paragraph (7) as 

14 paragraph (4); and 

15 (B) in paragraph (4) (as so redesignated), 

16 by striking ‘‘supplies is’’ and inserting ‘‘supply 

17 is’’. 

18 (2) Section 302 of the Energy Independence and Se19 curity Act of 2007 (121 Stat. 1551)) is amended— 

20 (A) in subsection (a), by striking ‘‘end of the 

21 paragraph’’ and inserting ‘‘end of subparagraph 

22 (A)’’; and 

23 (B) in subsection (b), by striking ‘‘6313(a)’’ 

24 and inserting ‘‘6314(a)’’. 
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1 (3) Section 343(a)(1) of the Energy Policy and Con2 servation Act (42 U.S.C. 6313(a)(1)) (as amended by sec3 tion 302(b) of the Energy Independence and Security Act 

4 of 2007 (121 Stat. 1551)) is amended— 

5 (A) by striking ‘‘TEST PROCEDURES’’ and all 

6 that follows through ‘‘At least once’’ and inserting 

7 ‘‘TEST PROCEDURES.—At least once’’; and 

8 (B) by redesignating clauses (i) and (ii) as sub9 paragraphs (A) and (B), respectively (and by moving 

10 the margins of such subparagraphs 2 ems to the 

11 left). 

12 (4) Section 342(a)(6) of the Energy Policy and Con13 servation Act (42 U.S.C. 6313(a)(6)) (as amended by sec14 tion 305(b)(2) of the Energy Independence and Security 

15 Act of 2007 (121 Stat. 1554)) is amended— 

16 (A) in subparagraph (B)— 

17 (i) by striking ‘‘If the Secretary’’ and in18 serting the following: 

19 ‘‘(i) IN GENERAL.—If the Secretary’’; 

20 (ii) by striking ‘‘clause (ii)(II)’’ and insert21 ing ‘‘subparagraph (A)(ii)(II)’’; 

22 (iii) by striking ‘‘clause (i)’’ and inserting 

23 ‘‘subparagraph (A)(i)’’; and 

24 (iv) by adding at the end the following: 
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1 ‘‘(ii) FACTORS.—In determining 

2 whether a standard is economically justi3 fied for the purposes of subparagraph 

4 (A)(ii)(II), the Secretary shall, after receiv5 ing views and comments furnished with re6 spect to the proposed standard, determine 

7 whether the benefits of the standard ex8 ceed the burden of the proposed standard 

9 by, to the maximum extent practicable, 

10 considering— 

11 ‘‘(I) the economic impact of the 

12 standard on the manufacturers and 

13 on the consumers of the products sub14 ject to the standard; 

15 ‘‘(II) the savings in operating 

16 costs throughout the estimated aver17 age life of the product in the type (or 

18 class) compared to any increase in the 

19 price of, or in the initial charges for, 

20 or maintenance expenses of, the prod21 ucts that are likely to result from the 

22 imposition of the standard; 

23 ‘‘(III) the total projected quan24 tity of energy savings likely to result 
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1 directly from the imposition of the 

2 standard; 

3 ‘‘(IV) any lessening of the utility 

4 or the performance of the products 

5 likely to result from the imposition of 

6 the standard; 

7 ‘‘(V) the impact of any lessening 

8 of competition, as determined in writ9 ing by the Attorney General, that is 

10 likely to result from the imposition of 

11 the standard; 

12 ‘‘(VI) the need for national en13 ergy conservation; and 

14 ‘‘(VII) other factors the Sec15 retary considers relevant. 

16 ‘‘(iii) ADMINISTRATION.— 

17 ‘‘(I) ENERGY USE AND EFFI18 CIENCY.—The Secretary may not pre19 scribe any amended standard under 

20 this paragraph that increases the 

21 maximum allowable energy use, or de22 creases the minimum required energy 

23 efficiency, of a covered product. 

24 ‘‘(II) UNAVAILABILITY.— 
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1 ‘‘(aa) IN GENERAL.—The 

2 Secretary may not prescribe an 

3 amended standard under this 

4 subparagraph if the Secretary 

5 finds (and publishes the finding) 

6 that interested persons have es7 tablished by a preponderance of 

8 the evidence that a standard is 

9 likely to result in the unavail10 ability in the United States in 

11 any product type (or class) of 

12 performance characteristics (in13 cluding reliability, features, sizes, 

14 capacities, and volumes) that are 

15 substantially the same as those 

16 generally available in the United 

17 States at the time of the finding 

18 of the Secretary. 

19 ‘‘(bb) OTHER TYPES OR

20 CLASSES.—The failure of some 

21 types (or classes) to meet the cri22 terion established under this sub23 clause shall not affect the deter24 mination of the Secretary on 

25 whether to prescribe a standard 
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1 for the other types or classes.’’; 

2 and 

3 (B) in subparagraph (C)(iv), by striking ‘‘An 

4 amendment prescribed under this subsection’’ and 

5 inserting ‘‘Notwithstanding subparagraph (D), an 

6 amendment prescribed under this subparagraph’’. 

7 (5) Section 342(a)(6)(B)(iii) of the Energy Policy 

8 and Conservation Act (as added by section 306(c) of the 

9 Energy Independence and Security Act of 2007) is trans10 ferred and redesignated as clause (vi) of section 

11 342(a)(6)(C) of the Energy Policy and Conservation Act 

12 (as amended by section 305(b)(2) of the Energy Independ13 ence and Security Act of 2007). 

14 (6) Section 340 of the Energy Policy and Conserva15 tion Act (42 U.S.C. 6311) (as amended by sections 

16 312(a)(2) and 314(a) of the Energy Independence and Se17 curity Act of 2007 (121 Stat. 1564, 1569)) is amended 

18 by redesignating paragraphs (22) and (23) (as added by 

19 section 314(a) of that Act) as paragraphs (23) and (24), 

20 respectively. 

21 (7) Section 345 of the Energy Policy and Conserva22 tion Act (42 U.S.C. 6316) (as amended by section 312(e) 

23 of the Energy Independence and Security Act of 2007 

24 (121 Stat. 1567)) is amended— 
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1 (A) by striking ‘‘subparagraphs (B) through 

2 (G)’’ each place it appears and inserting ‘‘subpara3 graphs (B), (C), (D), (I), (J), and (K)’’; 

4 (B) by striking ‘‘part A’’ each place it appears 

5 and inserting ‘‘part B’’; and 

6 (C) in subsection (h)(3), by striking ‘‘section 

7 342(f)(3)’’ and inserting ‘‘section 342(f)(4)’’. 

8 (8) Section 340(13) of the Energy Policy and Con9 servation Act (42 U.S.C. 6311(13)) (as amended by sec10 tion 313(a) of the Energy Independence and Security Act 

11 of 2007 (121 Stat. 1568)) is amended— 

12 (A) by striking subparagraphs (A) and (B) and 

13 inserting the following: 

14 ‘‘(A) IN GENERAL.—The term ‘electric 

15 motor’ means any motor that is— 

16 ‘‘(i) a general purpose T-frame, sin17 gle-speed, foot-mounting, polyphase squir18 rel-cage induction motor of the National 

19 Electrical Manufacturers Association, De20 sign A and B, continuous rated, operating 

21 on 230/460 volts and constant 60 Hertz 

22 line power as defined in NEMA Standards 

23 Publication MG1–1987; or 

24 ‘‘(ii) a motor incorporating the design 

25 elements described in clause (i), but is con-
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1 figured to incorporate one or more of the 

2 following variations— 

3 ‘‘(I) U-frame motor; 

4 ‘‘(II) NEMA Design C motor; 

5 ‘‘(III) close-coupled pump motor; 

6 ‘‘(IV) footless motor; 

7 ‘‘(V) vertical solid shaft normal 

8 thrust motor (as tested in a horizontal 

9 configuration); 

10 ‘‘(VI) 8-pole motor; or 

11 ‘‘(VII) poly-phase motor with a 

12 voltage rating of not more than 600 

13 volts (other than 230 volts or 460 

14 volts, or both, or can be operated on 

15 230 volts or 460 volts, or both).’’; and 

16 (B) by redesignating subparagraphs (C) 

17 through (I) as subparagraphs (B) through (H), re18 spectively. 

19 (9)(A) Section 342(b) of the Energy Policy and Con20 servation Act (42 U.S.C. 6313(b)) is amended— 

21 (i) in paragraph (1), by striking ‘‘paragraph (2)’’ and 

22 inserting ‘‘paragraph (3)’’; 

23 (ii) by redesignating paragraphs (2) and (3) as para24 graphs (3) and (4); 

25 (iii) by inserting after paragraph (1) the following: 
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1 ‘‘(2) STANDARDS EFFECTIVE BEGINNING DE2 CEMBER 19, 2010.— 

3 ‘‘(A) IN GENERAL.—Except for definite 

4 purpose motors, special purpose motors, and 

5 those motors exempted by the Secretary under 

6 paragraph (3) and except as provided for in 

7 subparagraphs (B), (C), and (D), each electric 

8 motor manufactured with power ratings from 1 

9 to 200 horsepower (alone or as a component of 

10 another piece of equipment) on or after Decem11 ber 19, 2010, shall have a nominal full load ef12 ficiency of not less than the nominal full load 

13 efficiency described in NEMA MG–1 (2006) 

14 Table 12–12. 

15 ‘‘(B) FIRE PUMP ELECTRIC MOTORS.—Ex16 cept for those motors exempted by the Sec17 retary under paragraph (3), each fire pump 

18 electric motor manufactured with power ratings 

19 from 1 to 200 horsepower (alone or as a compo20 nent of another piece of equipment) on or after 

21 December 19, 2010, shall have a nominal full 

22 load efficiency that is not less than the nominal 

23 full load efficiency described in NEMA MG–1 

24 (2006) Table 12–11. 
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1 ‘‘(C) NEMA DESIGN B ELECTRIC MO2 TORS.—Except for those motors exempted by 

3 the Secretary under paragraph (3), each 

4 NEMA Design B electric motor with power rat5 ings of more than 200 horsepower, but not 

6 greater than 500 horsepower, manufactured 

7 (alone or as a component of another piece of 

8 equipment) on or after December 19, 2010, 

9 shall have a nominal full load efficiency of not 

10 less than the nominal full load efficiency de11 scribed in NEMA MG–1 (2006) Table 12–11. 

12 ‘‘(D) MOTORS INCORPORATING CERTAIN

13 DESIGN ELEMENTS.—Except for those motors 

14 exempted by the Secretary under paragraph 

15 (3), each electric motor described in section 

16 340(13)(A)(ii) manufactured with power rat17 ings from 1 to 200 horsepower (alone or as a 

18 component of another piece of equipment) on or 

19 after December 19, 2010, shall have a nominal 

20 full load efficiency of not less than the nominal 

21 full load efficiency described in NEMA MG–1 

22 (2006) Table 12–11.’’; and 

23 (iv) in paragraph (3) (as redesignated by clause (ii)), 

24 by striking ‘‘paragraph (1)’’ each place it appears in sub-
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1 paragraphs (A) and (D) and inserting ‘‘paragraphs (1) 

2 and (2)’’. 

3 (B) Section 313 of the Energy Independence and Se4 curity Act of 2007 (121 Stat. 1568) is repealed. 

5 (C) The amendments made by— 

6 (i) subparagraph (A) shall take effect on De7 cember 19, 2010; and 

8 (ii) subparagraph (B) shall take effect on De9 cember 19, 2007. 

10 (10) Section 321(30)(D)(i)(III) of the Energy Policy 

11 and Conservation Act (42 U.S.C. 6291(30)(D)(i)(III)) (as 

12 amended by section 321(a)(1)(A) of the Energy Independ13 ence and Security Act of 2007 (121 Stat. 1574)) is 

14 amended by inserting before the semicolon the following: 

15 ‘‘or, in the case of a modified spectrum lamp, not less than 

16 232 lumens and not more than 1,950 lumens’’. 

17 (11) Section 321(30)(T) of the Energy Policy and 

18 Conservation Act (42 U.S.C. 6291(30)(T) (as amended by 

19 section 321(a)(1)(B) of the Energy Independence and Se20 curity Act of 2007 (121 Stat. 1574)) is amended— 

21 (A) in clause (i)— 

22 (i) by striking the comma after ‘‘household 

23 appliance’’ and inserting ‘‘and’’; and 

24 (ii) by striking ‘‘and is sold at retail,’’; and 
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1 (B) in clause (ii), by inserting ‘‘when sold at re2 tail,’’ before ‘‘is designated’’. 

3 (12) Section 325 of the Energy Policy and Conserva4 tion Act (42 U.S.C. 6295) (as amended by sections 

5 321(a)(3)(A) and 322(b) of the Energy Independence and 

6 Security Act of 2007 (121 Stat. 1577, 1588)) is amended 

7 by striking subsection (i) and inserting the following: 

8 ‘‘(i) GENERAL SERVICE FLUORESCENT LAMPS, GEN9 ERAL SERVICE INCANDESCENT LAMPS, INTERMEDIATE

10 BASE INCANDESCENT LAMPS, CANDELABRA BASE INCAN11 DESCENT LAMPS, AND INCANDESCENT REFLECTOR

12 LAMPS.— 

13 ‘‘(1) ENERGY EFFICIENCY STANDARDS.— 

14 ‘‘(A) IN GENERAL.—Each of the following 

15 general service fluorescent lamps, general serv16 ice incandescent lamps, intermediate base in17 candescent lamps, candelabra base incandescent 

18 lamps, and incandescent reflector lamps manu19 factured after the effective date specified in the 

20 tables listed in this subparagraph shall meet or 

21 exceed the following lamp efficacy, new max22 imum wattage, and CRI standards: 

‘‘FLUORESCENT LAMPS 

Lamp Type 

Nominal 

Lamp 

Wattage 

Minimum 

CRI 

Minimum Average 

Lamp Efficacy 

(LPW) 

Effective 

Date (Period of 

Months) 

4-foot medium bi-pin ................. >35 W 69 75.0 36 

.................................................... ≤35 W 45 75.0 36 
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‘‘FLUORESCENT LAMPS—Continued 

Lamp Type 

Nominal 

Lamp 

Wattage 

Minimum 

CRI 

Minimum Average 

Lamp Efficacy 

(LPW) 

Effective 

Date (Period of 

Months) 

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 

Nominal Lamp Wattage 

Minimum Average 

Lamp Efficacy 

(LPW) 

Effective 

Date (Period of 

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 

Rated Lumen Ranges Maximum Rated 

Wattage 

Minimum 

Rated Lifetime 

Effective 

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 

Rated Lumen Ranges Maximum Rated 

Wattage 

Minimum 

Rated Lifetime 

Effective 

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 

1 ‘‘(B) APPLICATION.— 

2 ‘‘(i) APPLICATION CRITERIA.—This 

3 subparagraph applies to each lamp that— 
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1 ‘‘(I) is intended for a general 

2 service or general illumination applica3 tion (whether incandescent or not); 

4 ‘‘(II) has a medium screw base 

5 or any other screw base not defined in 

6 ANSI C81.61–2006; 

7 ‘‘(III) is capable of being oper8 ated at a voltage at least partially 

9 within the range of 110 to 130 volts; 

10 and 

11 ‘‘(IV) is manufactured or im12 ported after December 31, 2011. 

13 ‘‘(ii) REQUIREMENT.—For purposes 

14 of this paragraph, each lamp described in 

15 clause (i) shall have a color rendering 

16 index that is greater than or equal to— 

17 ‘‘(I) 80 for nonmodified spectrum 

18 lamps; or 

19 ‘‘(II) 75 for modified spectrum 

20 lamps. 

21 ‘‘(C) CANDELABRA INCANDESCENT LAMPS

22 AND INTERMEDIATE BASE INCANDESCENT

23 LAMPS.— 

24 ‘‘(i) CANDELABRA BASE INCANDES25 CENT LAMPS.—Effective beginning Janu-
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•HR 2454 EH

1 ary 1, 2012, a candelabra base incandes2 cent lamp shall not exceed 60 rated watts. 

3 ‘‘(ii) INTERMEDIATE BASE INCANDES4 CENT LAMPS.—Effective beginning Janu5 ary 1, 2012, an intermediate base incan6 descent lamp shall not exceed 40 rated 

7 watts. 

8 ‘‘(D) EXEMPTIONS.— 

9 ‘‘(i) STATUTORY EXEMPTIONS.—The 

10 standards specified in subparagraph (A) 

11 shall not apply to the following types of in12 candescent reflector lamps: 

13 ‘‘(I) Lamps rated at 50 watts or 

14 less that are ER30, BR30, BR40, or 

15 ER40 lamps. 

16 ‘‘(II) Lamps rated at 65 watts 

17 that are BR30, BR40, or ER40 

18 lamps. 

19 ‘‘(III) R20 incandescent reflector 

20 lamps rated 45 watts or less. 

21 ‘‘(ii) ADMINISTRATIVE EXEMP22 TIONS.— 

23 ‘‘(I) PETITION.—Any person may 

24 petition the Secretary for an exemp25 tion for a type of general service lamp 
215 

•HR 2454 EH

1 from the requirements of this sub2 section. 

3 ‘‘(II) CRITERIA.—The Secretary 

4 may grant an exemption under sub5 clause (I) only to the extent that the 

6 Secretary finds, after a hearing and 

7 opportunity for public comment, that 

8 it is not technically feasible to serve a 

9 specialized lighting application (such 

10 as a military, medical, public safety, 

11 or certified historic lighting applica12 tion) using a lamp that meets the re13 quirements of this subsection. 

14 ‘‘(III) ADDITIONAL CRITERION.— 

15 To grant an exemption for a product 

16 under this clause, the Secretary shall 

17 include, as an additional criterion, 

18 that the exempted product is unlikely 

19 to be used in a general service lighting 

20 application. 

21 ‘‘(E) EXTENSION OF COVERAGE.— 

22 ‘‘(i) PETITION.—Any person may peti23 tion the Secretary to establish standards 

24 for lamp shapes or bases that are excluded 
216 

•HR 2454 EH

1 from the definition of general service 

2 lamps. 

3 ‘‘(ii) INCREASED SALES OF EXEMPT4 ED LAMPS.—The petition shall include evi5 dence that the availability or sales of ex6 empted incandescent lamps have increased 

7 significantly since the date on which the 

8 standards on general service incandescent 

9 lamps were established. 

10 ‘‘(iii) CRITERIA.—The Secretary shall 

11 grant a petition under clause (i) if the Sec12 retary finds that— 

13 ‘‘(I) the petition presents evi14 dence that demonstrates that commer15 cial availability or sales of exempted 

16 incandescent lamp types have in17 creased significantly since the stand18 ards on general service lamps were es19 tablished and likely are being widely 

20 used in general lighting applications; 

21 and 

22 ‘‘(II) significant energy savings 

23 could be achieved by covering exempt24 ed products, as determined by the 

25 Secretary based in part on sales data 
217 

•HR 2454 EH

1 provided to the Secretary from manu2 facturers and importers. 

3 ‘‘(iv) NO PRESUMPTION.—The grant 

4 of a petition under this subparagraph shall 

5 create no presumption with respect to the 

6 determination of the Secretary with respect 

7 to any criteria under a rulemaking con8 ducted under this section. 

9 ‘‘(v) EXPEDITED PROCEEDING.—If 

10 the Secretary grants a petition for a lamp 

11 shape or base under this subparagraph, 

12 the Secretary shall— 

13 ‘‘(I) conduct a rulemaking to de14 termine standards for the exempted 

15 lamp shape or base; and 

16 ‘‘(II) complete the rulemaking 

17 not later than 18 months after the 

18 date on which notice is provided 

19 granting the petition. 

20 ‘‘(F) EFFECTIVE DATES.— 

21 ‘‘(i) IN GENERAL.—In this paragraph, 

22 except as otherwise provided in a table 

23 contained in subparagraph (A) or in clause 

24 (ii), the term ‘effective date’ means the last 
218 

•HR 2454 EH

1 day of the month specified in the table 

2 that follows October 24, 1992. 

3 ‘‘(ii) SPECIAL EFFECTIVE DATES.— 

4 ‘‘(I) ER, BR, AND BPAR

5 LAMPS.—The standards specified in 

6 subparagraph (A) shall apply with re7 spect to ER incandescent reflector 

8 lamps, BR incandescent reflector 

9 lamps, BPAR incandescent reflector 

10 lamps, and similar bulb shapes on and 

11 after January 1, 2008, or the date 

12 that is 180 days after the date of en13 actment of the Energy Independence 

14 and Security Act of 2007. 

15 ‘‘(II) LAMPS BETWEEN 2.25–2.75

16 INCHES IN DIAMETER.—The stand17 ards specified in subparagraph (A) 

18 shall apply with respect to incandes19 cent reflector lamps with a diameter 

20 of more than 2.25 inches, but not 

21 more than 2.75 inches, on and after 

22 the later of January 1, 2008, or the 

23 date that is 180 days after the date of 

24 enactment of the Energy Independ25 ence and Security Act of 2007. 
219 

•HR 2454 EH

1 ‘‘(2) COMPLIANCE WITH EXISTING LAW.—Not2 withstanding section 332(a)(5) and section 332(b), 

3 it shall not be unlawful for a manufacturer to sell 

4 a lamp that is in compliance with the law at the 

5 time the lamp was manufactured. 

6 ‘‘(3) RULEMAKING BEFORE OCTOBER 24, 

7 1995.— 

8 ‘‘(A) IN GENERAL.—Not later than 36 

9 months after October 24, 1992, the Secretary 

10 shall initiate a rulemaking procedure and shall 

11 publish a final rule not later than the end of 

12 the 54-month period beginning on October 24, 

13 1992, to determine whether the standards es14 tablished under paragraph (1) should be 

15 amended. 

16 ‘‘(B) ADMINISTRATION.—The rule shall 

17 contain the amendment, if any, and provide 

18 that the amendment shall apply to products 

19 manufactured on or after the 36-month period 

20 beginning on the date on which the final rule is 

21 published. 

22 ‘‘(4) RULEMAKING BEFORE OCTOBER 24, 

23 2000.— 

24 ‘‘(A) IN GENERAL.—Not later than 8 years 

25 after October 24, 1992, the Secretary shall ini-
220 

•HR 2454 EH

1 tiate a rulemaking procedure and shall publish 

2 a final rule not later than 9 years and 6 months 

3 after October 24, 1992, to determine whether 

4 the standards in effect for fluorescent lamps 

5 and incandescent lamps should be amended. 

6 ‘‘(B) ADMINISTRATION.—The rule shall 

7 contain the amendment, if any, and provide 

8 that the amendment shall apply to products 

9 manufactured on or after the 36-month period 

10 beginning on the date on which the final rule is 

11 published. 

12 ‘‘(5) RULEMAKING FOR ADDITIONAL GENERAL

13 SERVICE FLUORESCENT LAMPS.— 

14 ‘‘(A) IN GENERAL.—Not later than the 

15 end of the 24-month period beginning on the 

16 date labeling requirements under section 

17 324(a)(2)(C) become effective, the Secretary 

18 shall— 

19 ‘‘(i) initiate a rulemaking procedure to 

20 determine whether the standards in effect 

21 for fluorescent lamps and incandescent 

22 lamps should be amended so that the 

23 standards would be applicable to additional 

24 general service fluorescent lamps; and 
221 

•HR 2454 EH

1 ‘‘(ii) publish, not later than 18 

2 months after initiating the rulemaking, a 

3 final rule including the amended stand4 ards, if any. 

5 ‘‘(B) ADMINISTRATION.—The rule shall 

6 provide that the amendment shall apply to 

7 products manufactured after a date which is 36 

8 months after the date on which the rule is pub9 lished. 

10 ‘‘(6) STANDARDS FOR GENERAL SERVICE

11 LAMPS.— 

12 ‘‘(A) RULEMAKING BEFORE JANUARY 1, 

13 2014.— 

14 ‘‘(i) IN GENERAL.—Not later than 

15 January 1, 2014, the Secretary shall ini16 tiate a rulemaking procedure to determine 

17 whether— 

18 ‘‘(I) standards in effect for gen19 eral service lamps should be amended; 

20 and 

21 ‘‘(II) the exclusions for certain 

22 incandescent lamps should be main23 tained or discontinued based, in part, 

24 on excluded lamp sales collected by 

25 the Secretary from manufacturers. 
222 

•HR 2454 EH

1 ‘‘(ii) SCOPE.—The rulemaking— 

2 ‘‘(I) shall not be limited to incan3 descent lamp technologies; and 

4 ‘‘(II) shall include consideration 

5 of a minimum standard of 45 lumens 

6 per watt for general service lamps. 

7 ‘‘(iii) AMENDED STANDARDS.—If the 

8 Secretary determines that the standards in 

9 effect for general service lamps should be 

10 amended, the Secretary shall publish a 

11 final rule not later than January 1, 2017, 

12 with an effective date that is not earlier 

13 than 3 years after the date on which the 

14 final rule is published. 

15 ‘‘(iv) PHASED-IN EFFECTIVE

16 DATES.—The Secretary shall consider 

17 phased-in effective dates under this sub18 paragraph after considering— 

19 ‘‘(I) the impact of any amend20 ment on manufacturers, retiring and 

21 repurposing existing equipment, 

22 stranded investments, labor contracts, 

23 workers, and raw materials; and 

24 ‘‘(II) the time needed to work 

25 with retailers and lighting designers 
223 

•HR 2454 EH

1 to revise sales and marketing strate2 gies. 

3 ‘‘(v) BACKSTOP REQUIREMENT.—If 

4 the Secretary fails to complete a rule5 making in accordance with clauses (i) 

6 through (iv) or if the final rule does not 

7 produce savings that are greater than or 

8 equal to the savings from a minimum effi9 cacy standard of 45 lumens per watt, effec10 tive beginning January 1, 2020, the Sec11 retary shall prohibit the manufacture of 

12 any general service lamp that does not 

13 meet a minimum efficacy standard of 45 

14 lumens per watt. 

15 ‘‘(vi) STATE PREEMPTION.—Neither 

16 section 327(c) nor any other provision of 

17 law shall preclude California or Nevada 

18 from adopting, effective beginning on or 

19 after January 1, 2018— 

20 ‘‘(I) a final rule adopted by the 

21 Secretary in accordance with clauses 

22 (i) through (iv); 

23 ‘‘(II) if a final rule described in 

24 subclause (I) has not been adopted, 
224 

•HR 2454 EH

1 the backstop requirement under 

2 clause (v); or 

3 ‘‘(III) in the case of California, if 

4 a final rule described in subclause (I) 

5 has not been adopted, any California 

6 regulations relating to these covered 

7 products adopted pursuant to State 

8 statute in effect as of the date of en9 actment of the Energy Independence 

10 and Security Act of 2007. 

11 ‘‘(B) RULEMAKING BEFORE JANUARY 1, 

12 2020.— 

13 ‘‘(i) IN GENERAL.—Not later than 

14 January 1, 2020, the Secretary shall ini15 tiate a rulemaking procedure to determine 

16 whether— 

17 ‘‘(I) standards in effect for gen18 eral service lamps should be amended; 

19 and 

20 ‘‘(II) the exclusions for certain 

21 incandescent lamps should be main22 tained or discontinued based, in part, 

23 on excluded lamp sales data collected 

24 by the Secretary from manufacturers. 
225 

•HR 2454 EH

1 ‘‘(ii) SCOPE.—The rulemaking shall 

2 not be limited to incandescent lamp tech3 nologies. 

4 ‘‘(iii) AMENDED STANDARDS.—If the 

5 Secretary determines that the standards in 

6 effect for general service lamps should be 

7 amended, the Secretary shall publish a 

8 final rule not later than January 1, 2022, 

9 with an effective date that is not earlier 

10 than 3 years after the date on which the 

11 final rule is published. 

12 ‘‘(iv) PHASED-IN EFFECTIVE

13 DATES.—The Secretary shall consider 

14 phased-in effective dates under this sub15 paragraph after considering— 

16 ‘‘(I) the impact of any amend17 ment on manufacturers, retiring and 

18 repurposing existing equipment, 

19 stranded investments, labor contracts, 

20 workers, and raw materials; and 

21 ‘‘(II) the time needed to work 

22 with retailers and lighting designers 

23 to revise sales and marketing strate24 gies. 

25 ‘‘(7) FEDERAL ACTIONS.— 
226 

•HR 2454 EH

1 ‘‘(A) COMMENTS OF SECRETARY.— 

2 ‘‘(i) IN GENERAL.—With respect to 

3 any lamp to which standards are applicable 

4 under this subsection or any lamp specified 

5 in section 346, the Secretary shall inform 

6 any Federal entity proposing actions that 

7 would adversely impact the energy con8 sumption or energy efficiency of the lamp 

9 of the energy conservation consequences of 

10 the action. 

11 ‘‘(ii) CONSIDERATION.—The Federal 

12 entity shall carefully consider the com13 ments of the Secretary. 

14 ‘‘(B) AMENDMENT OF STANDARDS.—Not15 withstanding section 325(n)(1), the Secretary 

16 shall not be prohibited from amending any 

17 standard, by rule, to permit increased energy 

18 use or to decrease the minimum required en19 ergy efficiency of any lamp to which standards 

20 are applicable under this subsection if the ac21 tion is warranted as a result of other Federal 

22 action (including restrictions on materials or 

23 processes) that would have the effect of either 

24 increasing the energy use or decreasing the en25 ergy efficiency of the product. 
227 

•HR 2454 EH

1 ‘‘(8) COMPLIANCE.— 

2 ‘‘(A) IN GENERAL.—Not later than the 

3 date on which standards established pursuant 

4 to this subsection become effective, or, with re5 spect to high-intensity discharge lamps covered 

6 under section 346, the effective date of stand7 ards established pursuant to that section, each 

8 manufacturer of a product to which the stand9 ards are applicable shall file with the Secretary 

10 a laboratory report certifying compliance with 

11 the applicable standard for each lamp type. 

12 ‘‘(B) CONTENTS.—The report shall include 

13 the lumen output and wattage consumption for 

14 each lamp type as an average of measurements 

15 taken over the preceding 12-month period. 

16 ‘‘(C) OTHER LAMP TYPES.—With respect 

17 to lamp types that are not manufactured during 

18 the 12-month period preceding the date on 

19 which the standards become effective, the re20 port shall— 

21 ‘‘(i) be filed with the Secretary not 

22 later than the date that is 12 months after 

23 the date on which manufacturing is com24 menced; and 
228 

•HR 2454 EH

1 ‘‘(ii) include the lumen output and 

2 wattage consumption for each such lamp 

3 type as an average of measurements taken 

4 during the 12-month period.’’. 

5 (13) Section 325(l)(4)(A) of the Energy Policy and 

6 Conservation Act (42 U.S.C. 6295(l)(4)(A)) (as amended 

7 by section 321(a)(3)(B) of the Energy Independence and 

8 Security Act of 2007 (121 Stat. 1581)) is amended by 

9 striking ‘‘only’’. 

10 (14) Section 327(b)(1)(B) of the Energy Policy and 

11 Conservation Act (42 U.S.C. 6297(b)(1)(B)) (as amended 

12 by section 321(d)(3) of the Energy Independence and Se13 curity Act of 2007 (121 Stat. 1585)) is amended— 

14 (A) in clause (i), by inserting ‘‘and’’ after the 

15 semicolon at the end; 

16 (B) in clause (ii), by striking ‘‘; and’’ and in17 serting a period; and 

18 (C) by striking clause (iii). 

19 (15) Section 321(e) of the Energy Independence and 

20 Security Act of 2007 (121 Stat. 1586) is amended— 

21 (A) in the matter preceding paragraph (1), by 

22 striking ‘‘is amended’’ and inserting ‘‘(as amended 

23 by section 306(b)) is amended’’; and 

24 (B) by striking paragraphs (1) and (2) and in25 serting the following: 
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•HR 2454 EH

1 ‘‘(1) in paragraph (5), by striking ‘or’ after the 

2 semicolon at the end; 

3 ‘‘(2) in paragraph (6), by striking the period at 

4 the end and inserting ‘; or’; and’’. 

5 (16) Section 332(a) of the Energy Policy and Con6 servation Act (42 U.S.C. 6302(a)) (as amended by section 

7 321(e) of the Energy Independence and Security Act of 

8 2007 (121 Stat. 1586)) is amended by redesignating the 

9 second paragraph (6) as paragraph (7). 

10 (17) Section 321(30)(C)(ii) of the Energy Policy and 

11 Conservation Act (42 U.S.C. 6291(30)(C)(ii)) (as amend12 ed by section 322(a)(1)(B) of the Energy Independence 

13 and Security Act of 2007 (121 Stat. 1587)) is amended 

14 by inserting a period after ‘‘40 watts or higher’’. 

15 (18) Section 322(b) of the Energy Independence and 

16 Security Act of 2007 (121 Stat. 1588)) is amended by 

17 striking ‘‘6995(i)’’ and inserting ‘‘6295(i)’’. 

18 (19) Section 327(c) of the Energy Policy and Con19 servation Act (42 U.S.C. 6297(c)) (as amended by sec20 tions 324(f) of the Energy Independence and Security Act 

21 of 2007 (121 Stat. 1594)) is amended— 

22 (A) in paragraph (6), by striking ‘‘or’’ after the 

23 semicolon at the end; 

24 (B) in paragraph (8)(B), by striking ‘‘and’’ 

25 after the semicolon at the end; 
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1 (C) in paragraph (9)— 

2 (i) by striking ‘‘except that—’’ and all that 

3 follows through ‘‘if the Secretary fails to issue’’ 

4 and inserting ‘‘except that if the Secretary fails 

5 to issue’’; 

6 (ii) by redesignating clauses (i) and (ii) as 

7 subparagraphs (A) and (B), respectively (and 

8 by moving the margins of such subparagraphs 

9 2 ems to the left); and 

10 (iii) by striking the period at the end and 

11 inserting a semicolon; and 

12 (D) by adding at the end the following: 

13 ‘‘(10) is a regulation for general service lamps 

14 that conforms with Federal standards and effective 

15 dates; 

16 ‘‘(11) is an energy efficiency standard for gen17 eral service lamps enacted into law by the State of 

18 Nevada prior to December 19, 2007, if the State has 

19 not adopted the Federal standards and effective 

20 dates pursuant to subsection (b)(1)(B)(ii); or’’. 

21 (20) Section 325(b) of the Energy Independence and 

22 Security Act of 2007 (121 Stat. 1596)) is amended by 

23 striking ‘‘6924(c)’’ and inserting ‘‘6294(c)’’. 

24 (b) TITLE IV—ENERGY SAVINGS IN BUILDINGS AND

25 INDUSTRY.—(1) Section 401 of the Energy Independence 
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1 and Security Act of 2007 (42 U.S.C. 17061) is amend2 ed— 

3 (A) in paragraph (2), by striking ‘‘484’’ and in4 serting ‘‘494’’; and 

5 (B) in paragraph (13), by striking ‘‘Agency’’ 

6 and inserting ‘‘Administration’’. 

7 (2) Section 422 of the Energy Conservation and Pro8 duction Act (42 U.S.C. 6872) (as amended by section 

9 411(a) of the Energy Independence and Security Act of 

10 2007 (121 Stat. 1600)) is amended by striking 1 of the 

11 2 periods at the end of paragraph (5). 

12 (3) Section 305(a)(3)(D)(i) of the Energy Conserva13 tion and Production Act (42 U.S.C. 6834(a)(3)(D)(i)) (as 

14 amended by section 433(a) of the Energy Independence 

15 and Security Act of 2007 (121 Stat. 1612)) is amended— 

16 (A) in subclause (I)— 

17 (i) by striking ‘‘in fiscal year 2003 (as 

18 measured by Commercial Buildings Energy 

19 Consumption Survey or Residential Energy 

20 Consumption Survey data from the Energy In21 formation Agency’’ and inserting ‘‘as measured 

22 by the calendar year 2003 Commercial Build23 ings Energy Consumption Survey or the cal24 endar year 2005 Residential Energy Consump-
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1 tion Survey data from the Energy Information 

2 Administration’’; and 

3 (ii) in the table at the end, by striking 

4 ‘‘Fiscal Year’’ and inserting ‘‘Calendar 

5 Year’’; and 

6 (B) in subclause (II)— 

7 (i) by striking ‘‘(II) Upon petition’’ and in8 serting the following: 

9 ‘‘(II) DOWNWARD ADJUSTMENT

10 OF NUMERIC REQUIREMENT.— 

11 ‘‘(aa) IN GENERAL.—On pe12 tition’’; and 

13 (ii) by striking the last sentence and in14 serting the following: 

15 ‘‘(bb) EXCEPTIONS TO RE16 QUIREMENT FOR CONCURRENCE

17 OF SECRETARY.— 

18 ‘‘(AA) IN GENERAL.— 

19 The requirement to petition 

20 and obtain the concurrence 

21 of the Secretary under this 

22 subclause shall not apply to 

23 any Federal building with 

24 respect to which the Admin25 istrator of General Services 
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1 is required to transmit a 

2 prospectus to Congress 

3 under section 3307 of title 

4 40, United States Code, or 

5 to any other Federal build6 ing designed, constructed, or 

7 renovated by the Adminis8 trator if the Administrator 

9 certifies, in writing, that 

10 meeting the applicable nu11 meric requirement under 

12 subclause (I) with respect to 

13 the Federal building would 

14 be technically impracticable 

15 in light of the specific func16 tional needs for the building. 

17 ‘‘(BB) ADJUSTMENT.— 

18 In the case of a building de19 scribed in subitem (AA), the 

20 Administrator may adjust 

21 the applicable numeric re22 quirement of subclause (I) 

23 downward with respect to 

24 the building.’’. 
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1 (4) Section 436(c)(3) of the Energy Independence 

2 and Security Act of 2007 (42 U.S.C. 17092(c)(3)) is 

3 amended by striking ‘‘474’’ and inserting ‘‘494’’. 

4 (5) Section 440 of the Energy Independence and Se5 curity Act of 2007 (42 U.S.C. 17096) is amended by strik6 ing ‘‘and 482’’. 

7 (6) Section 373(c) of the Energy Policy and Con8 servation Act (42 U.S.C. 6343(c)) (as amended by section 

9 451(a) of the Energy Independence and Security Act of 

10 2007 (121 Stat. 1628)) is amended by striking ‘‘Adminis11 trator’’ and inserting ‘‘Secretary’’. 

12 (c) DATE OF ENACTMENT.—Section 1302 of the En13 ergy Independence and Security Act of 2007 (42 U.S.C. 

14 17382) is amended in the first sentence by striking ‘‘en15 actment’’ and inserting ‘‘the date of enactment of this 

16 Act’’. 

17 (d) REFERENCE.—Section 1306(c)(3) of the Energy 

18 Independence and Security Act of 2007 (42 U.S.C. 

19 17386(c)(3)) is amended by striking ‘‘section 1307 (para20 graph (17) of section 111(d) of the Public Utility Regu21 latory Policies Act of 1978)’’ and inserting ‘‘paragraph 

22 (19) of section 111(d) of the Public Utility Regulatory 

23 Policies Act of 1978 (16 U.S.C. 2621(d))’’. 

24 (e) EFFECTIVE DATE.—This section and the amend25 ments made by this section take effect as if included in 
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1 the Energy Independence and Security Act of 2007 (Pub2 lic Law 110–140; 121 Stat. 1492). 

3 SEC. 162. TECHNICAL CORRECTIONS TO ENERGY POLICY 

4 ACT OF 2005. 

5 (a) TITLE I—ENERGY EFFICIENCY.—Section 

6 325(g)(8)(C)(ii) of the Energy Policy and Conservation 

7 Act (42 U.S.C. 6295(g)(8)(C)(ii)) (as added by section 

8 135(c)(2)(B) of the Energy Policy Act of 2005) is amend9 ed by striking ‘‘20°F’’ and inserting ‘‘¥20°F’’. 

10 (b) EFFECTIVE DATE.—This section and the amend11 ments made by this section take effect as if included in 

12 the Energy Policy Act of 2005 (Public Law 109–58; 119 

13 Stat. 594). 

14 Subtitle H—Energy and Efficiency 

15 Centers and Research 

16 SEC. 171. ENERGY INNOVATION HUBS. 

17 (a) PURPOSE.—The Secretary shall carry out a pro18 gram to establish Energy Innovation Hubs to enhance the 

19 Nation’s economic, environmental, and energy security by 

20 promoting commercial application of clean, indigenous en21 ergy alternatives to oil and other fossil fuels, reducing 

22 greenhouse gas emissions, and ensuring that the United 

23 States maintains a technological lead in the development 

24 and commercial application of state-of-the-art energy tech25 nologies. To achieve these purposes the program shall— 
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1 (1) leverage the expertise and resources of the 

2 university and private research communities, indus3 try, venture capital, national laboratories, and other 

4 participants in energy innovation to support cross5 disciplinary research and development in areas not 

6 being served by the private sector in order to develop 

7 and transfer innovative clean energy technologies 

8 into the marketplace; 

9 (2) expand the knowledge base and human cap10 ital necessary to transition to a low-carbon economy; 

11 and 

12 (3) promote regional economic development by 

13 cultivating clusters of clean energy technology firms, 

14 private research organizations, suppliers, and other 

15 complementary groups and businesses. 

16 (b) DEFINITIONS.—For purposes of this section: 

17 (1) ALLOWANCE.—The term ‘‘allowance’’ 

18 means an emission allowance established under sec19 tion 721 of the Clean Air Act (as added by section 

20 311 of this Act). 

21 (2) CLEAN ENERGY TECHNOLOGY.—The term 

22 ‘‘clean energy technology’’ means a technology 

23 that— 

24 (A) produces energy from solar, wind, geo25 thermal, biomass, tidal, wave, ocean, and other 
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1 renewable energy resources (as such term is de2 fined in section 610 of the Public Utility Regu3 latory Policies Act of 1978); 

4 (B) more efficiently transmits, distributes, 

5 or stores energy; 

6 (C) enhances energy efficiency for build7 ings and industry, including combined heat and 

8 power; 

9 (D) enables the development of a Smart 

10 Grid (as described in section 1301 of the En11 ergy Independence and Security Act of 2007 

12 (42 U.S.C. 17381)), including integration of re13 newable energy resources and distributed gen14 eration, demand response, demand side man15 agement, and systems analysis; 

16 (E) produces an advanced or sustainable 

17 material with energy or energy efficiency appli18 cations; 

19 (F) enhances water security through im20 proved water management, conservation, dis21 tribution, and end use applications; or 

22 (G) improves energy efficiency for trans23 portation, including electric vehicles. 

24 (3) CLUSTER.—The term ‘‘cluster’’ means a 

25 network of entities directly involved in the research, 
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1 development, finance, and commercialization of clean 

2 energy technologies whose geographic proximity fa3 cilitates utilization and sharing of skilled human re4 sources, infrastructure, research facilities, edu5 cational and training institutions, venture capital, 

6 and input suppliers. 

7 (4) HUB.—The term ‘‘Hub’’ means an Energy 

8 Innovation Hub established in accordance with this 

9 section. 

10 (5) PROJECT.—The term ‘‘project’’ means an 

11 activity with respect to which a Hub provides sup12 port under subsection (e). 

13 (6) QUALIFYING ENTITY.—The term ‘‘quali14 fying entity’’ means each of the following: 

15 (A) A research university. 

16 (B) A State or Federal institution with a 

17 focus on the advancement of clean energy tech18 nologies. 

19 (C) A nongovernmental organization with 

20 research or commercialization expertise in clean 

21 energy technology development. 

22 (7) SECRETARY.—The term ‘‘Secretary’’ means 

23 the Secretary of Energy. 

24 (8) TECHNOLOGY DEVELOPMENT FOCUS.—The 

25 term ‘‘technology development focus’’ means the 
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1 unique technology development areas in which a 

2 Hub will specialize, and may include solar electricity, 

3 fuels from solar energy, batteries and energy stor4 age, electricity grid systems and devices, energy effi5 cient building systems and design, advanced mate6 rials, modeling and simulation, and other clean en7 ergy technology development areas designated by the 

8 Secretary. 

9 (9) TRANSLATIONAL RESEARCH.—The term 

10 ‘‘translational research’’ means coordination of basic 

11 or applied research with technical and commercial 

12 applications to enable promising discoveries or inven13 tions to attract investment sufficient for market pen14 etration and diffusion. 

15 (10) VINTAGE YEAR.—The term ‘‘vintage year’’ 

16 has the meaning given that term in section 700 of 

17 the Clean Air Act (as added by section 312 of this 

18 Act). 

19 (c) ROLE OF THE SECRETARY.—The Secretary 

20 shall— 

21 (1) have ultimate responsibility for, and over22 sight of, all aspects of the program under this sec23 tion; 

24 (2) provide for the distribution of allowances al25 located under section 782(h)(1) of the Clean Air Act 
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1 (as added by section 321 of this Act) to support the 

2 establishment of 8 Hubs, each with a unique des3 ignated technology development focus, pursuant to 

4 this section; 

5 (3) coordinate the innovation activities of Hubs 

6 with those occurring through other Department of 

7 Energy entities, including the National Laboratories, 

8 the Advanced Research Projects Agency—Energy, 

9 and Energy Frontier Research Collaborations, and 

10 within industry, including by annually— 

11 (A) issuing guidance regarding national 

12 energy research and development priorities and 

13 strategic objectives; and 

14 (B) convening a conference of staff of the 

15 Department of Energy and representatives from 

16 such other entities to share research results, 

17 program plans, and opportunities for collabora18 tion. 

19 (d) ENTITIES ELIGIBLE FOR SUPPORT.—A consor20 tium shall be eligible to receive allowances to support the 

21 establishment of a Hub under this section if— 

22 (1) it is composed of— 

23 (A) 2 research universities with a com24 bined annual research budget of $500,000,000; 

25 and 
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1 (B) 1 or more additional qualifying enti2 ties; 

3 (2) its members have established a binding 

4 agreement that documents— 

5 (A) the structure of the partnership agree6 ment; 

7 (B) a governance and management struc8 ture to enable cost-effective implementation of 

9 the program; 

10 (C) an intellectual property management 

11 policy; 

12 (D) a conflicts of interest policy consistent 

13 with subsection (e)(4); 

14 (E) an accounting structure that meets the 

15 requirements of the Department of Energy and 

16 can be audited under subsection (f)(5); and 

17 (F) that it has an Advisory Board con18 sistent with subsection (e)(3); 

19 (3) it receives financial contributions from 

20 States, consortium participants, or other non-Fed21 eral sources, to be used to support project awards 

22 pursuant to subsection (e); 

23 (4) it is part of an existing cluster or dem24 onstrates high potential to develop a new cluster; 

25 and 
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1 (5) it operates as a nonprofit organization. 

2 (e) ENERGY INNOVATION HUBS.— 

3 (1) ROLE.—Hubs receiving allowances under 

4 this section shall support translational research ac5 tivities leading to commercial application of clean en6 ergy technologies, in accordance with the purposes of 

7 this section, through issuance of awards to projects 

8 managed by qualifying entities and other entities 

9 meeting the Hub’s project criteria, including na10 tional laboratories. Each such Hub shall— 

11 (A) develop and publish for public review 

12 and comment proposed plans, programs, project 

13 selection criteria, and terms for individual 

14 project awards under this subsection; 

15 (B) submit an annual report to the Sec16 retary summarizing the Hub’s activities, organi17 zational expenditures, and Board members, 

18 which shall include a certification of compliance 

19 with conflict of interest policies and a descrip20 tion of each project in the research portfolio; 

21 (C) establish policies— 

22 (i) regarding intellectual property de23 veloped as a result of Hub awards and 

24 other forms of technology support that en25 courage individual ingenuity and invention 
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1 while speeding technology transfer and fa2 cilitating the establishment of rapid com3 mercialization pathways; 

4 (ii) to prevent resources provided to 

5 the Hub from being used to displace pri6 vate sector investment otherwise likely to 

7 occur, including investment from private 

8 sector entities that are members of the 

9 consortium; 

10 (iii) to facilitate the participation of 

11 private investment firms or other private 

12 entities that invest in clean energy tech13 nologies to perform due diligence on award 

14 proposals, to participate in the award re15 view process, and to provide guidance to 

16 projects supported by the Hub; and 

17 (iv) to facilitate the participation of 

18 entrepreneurs with a demonstrated history 

19 of developing and commercializing clean 

20 energy technologies; 

21 (D) oversee project solicitations, review 

22 proposed projects, and select projects for 

23 awards; and 

24 (E) monitor project implementation. 
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1 (2) DISTRIBUTION OF AWARDS BY HUBS.—A 

2 Hub shall distribute awards under this subsection to 

3 support clean energy technology projects conducting 

4 translational research and related activities, provided 

5 that at least 50 percent of such support shall be pro6 vided to projects related to the Hub’s technology de7 velopment focus. 

8 (3) ADVISORY BOARDS.— 

9 (A) IN GENERAL.—Each Hub shall estab10 lish an Advisory Board, the members of which 

11 shall have extensive and relevant scientific, 

12 technical, industry, financial, or research man13 agement expertise. The Advisory Board shall 

14 review the Hub’s proposed plans, programs, 

15 project selection criteria, and projects and shall 

16 ensure that projects selected for awards meet 

17 the conflict of interest policies of the Hub. Ad18 visory Board members other than those rep19 resenting consortium members shall serve for 

20 no more than 3 years. All Advisory Board mem21 bers shall comply with the Hub’s conflict of in22 terest policies and procedures. 

23 (B) MEMBERS.—Each Advisory Board 

24 shall consist of— 
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1 (i) 5 members selected by the consor2 tium’s research universities; 

3 (ii) 2 members selected by the consor4 tium’s other qualifying entities; 

5 (iii) 2 members selected at large by 

6 other Advisory Board members to rep7 resent the entrepreneur and venture cap8 ital communities; and 

9 (iv) 1 member appointed by the Sec10 retary. 

11 (D) COMPENSATION.—Members of an Ad12 visory Board may receive reimbursement for 

13 travel expenses and a reasonable stipend. 

14 (4) CONFLICT OF INTEREST.— 

15 (A) PROCEDURES.—Hubs shall establish 

16 procedures to ensure that any employee or con17 sortia designee for Hub activities who serves in 

18 a decisionmaking capacity shall— 

19 (i) disclose any financial interests in, 

20 or financial relationships with, applicants 

21 for or recipients of awards under this sub22 section, including those of his or her 

23 spouse or minor child, unless such relation24 ships or interests would be considered to 

25 be remote or inconsequential; and 
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1 (ii) recuse himself or herself from any 

2 funding decision for projects in which he 

3 or she has a personal financial interest. 

4 (B) DISQUALIFICATION AND REVOCA5 TION.—The Secretary may disqualify an appli6 cation or revoke allowances distributed to the 

7 Hub or awards provided under this subsection, 

8 if cognizant officials of the Hub fail to comply 

9 with procedures required under subparagraph 

10 (A). 

11 (f) DISTRIBUTION OF ALLOWANCES TO ENERGY IN12 NOVATION HUBS.— 

13 (1) DISTRIBUTION OF ALLOWANCES.—Not later 

14 than September 30 of 2011 and each calendar year 

15 thereafter through 2049, the Secretary shall, in ac16 cordance with the requirements of this section, dis17 tribute to eligible consortia allowances allocated for 

18 the following vintage year under section 782(h)(1) of 

19 the Clean Air Act (as added by section 321 of this 

20 Act). Not less than 10 percent and not more than 

21 30 percent of the allowances available for distribu22 tion in any given year shall be distributed to support 

23 any individual Hub under this section. 

24 (2) SELECTION AND SCHEDULE.—Allowances to 

25 support the establishment of a Hub shall be distrib-
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1 uted to eligible consortia (as defined in subsection 

2 (d)) selected through a competitive process. Not 

3 later than 120 days after the date of enactment of 

4 this Act, the Secretary shall solicit proposals from 

5 eligible consortia to establish Hubs, which shall be 

6 submitted not later than 180 days after the date of 

7 enactment of this Act. The Secretary shall select the 

8 program consortia not later than 270 days after the 

9 date of enactment of this Act. For at least 3 awards 

10 to consortia under this section, the Secretary shall 

11 give special consideration to applications in which 1 

12 or more of the institutions under subsection 

13 (d)(1)(A) are 1890 Land Grant Institutions (as de14 fined in section 2 of the Agricultural Research, Ex15 tension, and Education Reform Act of 1998 (7 

16 U.S.C. 7061)), Predominantly Black Institutions (as 

17 defined in section 318 of the Higher Education Act 

18 of 1965 (20 U.S.C. 1059e)), Tribal Colleges or Uni19 versities (as defined in section 316(b) of the Higher 

20 Education Act of 1965 (20 U.S.C. 1059c(b)), or 

21 Hispanic Serving Institutions (as defined in section 

22 318 of the Higher Education Act of 1965 (20 

23 U.S.C. 1059e)). 

24 (3) AMOUNT AND TERM OF AWARDS.—For each 

25 Hub selected to receive an award under this sub-
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1 section, the Secretary shall define a quantity of al2 lowances that shall be distributed to such Hub each 

3 year for an initial period not to exceed 5 years. The 

4 Secretary may extend the term of such award by up 

5 to 5 additional years, and a Hub may compete to re6 ceive an increase in the quantity of allowances per 

7 year that it shall receive during any such extension. 

8 A Hub shall be eligible to compete for a new award 

9 after the expiration of the term of any award, in10 cluding any extension of such term, under this sub11 section. 

12 (4) USE OF ALLOWANCES.—Allowances distrib13 uted under this section shall be used exclusively to 

14 support project awards pursuant to subsection (e)(1) 

15 and (2), provided that a Hub may use not more 

16 than 10 percent of the value of such allowances for 

17 its administrative expenses related to making such 

18 awards. Allowances distributed under this section 

19 shall not be used for construction of new buildings 

20 or facilities for Hubs, and construction of new build21 ings or facilities shall not be considered as part of 

22 the non-Federal share of a cost sharing agreement 

23 under this section. 

24 (5) AUDIT.—Each Hub shall conduct, in ac25 cordance with such requirements as the Secretary 
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1 may prescribe, an annual audit to determine the ex2 tent to which allowances distributed to the Hub 

3 under this subsection, and awards under subsection 

4 (e), have been utilized in a manner consistent with 

5 this section. The auditor shall transmit a report of 

6 the results of the audit to the Secretary and to the 

7 Government Accountability Office. The Secretary 

8 shall include such report in an annual report to Con9 gress, along with a plan to remedy any deficiencies 

10 cited in the report. The Government Accountability 

11 Office may review such audits as appropriate and 

12 shall have full access to the books, records, and per13 sonnel of the Hub to ensure that allowances distrib14 uted to the Hub under this subsection, and awards 

15 made under subsection (e), have been utilized in a 

16 manner consistent with this section. 

17 (6) REVOCATION OF ALLOWANCES.—The Sec18 retary shall have authority to review awards made 

19 under this subsection and to revoke such awards if 

20 the Secretary determines that a Hub has used the 

21 award in a manner not consistent with the require22 ments of this section. 

23 SEC. 172. ADVANCED ENERGY RESEARCH. 

24 (a) DEFINITIONS.—For purposes of this section: 
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1 (1) ALLOWANCE.—The term ‘‘allowance’’ 

2 means an emission allowance established under sec3 tion 721 of the Clean Air Act (as added by section 

4 311 of this Act). 

5 (2) DIRECTOR.—The term ‘‘Director’’ means 

6 Director of the Advanced Research Projects Agency7 Energy. 

8 (b) IN GENERAL.—Not later than September 30 of 

9 2011 and each calendar year thereafter through 2049, the 

10 Director shall distribute allowances allocated for the fol11 lowing vintage year under section 782(h)(2) of the Clean 

12 Air Act (as added by section 321 of this Act). Such allow13 ances shall be distributed on a competitive basis to institu14 tions of higher education, companies, research founda15 tions, trade and industry research collaborations, or con16 sortia of such entities, or other appropriate research and 

17 development entities to achieve the goals of the Advanced 

18 Research Projects Agency-Energy (as described in section 

19 5012(c) of the America COMPETES Act) through tar20 geted acceleration of— 

21 (1) novel early-stage energy research with pos22 sible technology applications; 

23 (2) development of techniques, processes, and 

24 technologies, and related testing and evaluation; 
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1 (3) development of manufacturing processes for 

2 technologies; and 

3 (4) demonstration and coordination with non4 governmental entities for commercial applications of 

5 technologies and research applications. 

6 (c) RESPONSIBILITIES.—The Director shall be re7 sponsible for assessing the success of programs and termi8 nating programs carried out under this section that are 

9 not achieving the goals of the programs, consistent with 

10 5012(e)(2) and (4) of the America COMPETES Act. The 

11 Director shall designate program managers whose respon12 sibilities are consistent with 5012(f)(1)(B) of the America 

13 COMPETES Act. The Director’s reporting and coordina14 tion requirements established through 5012(g) and (h) of 

15 the America COMPETES Act shall apply to activities 

16 funded through this section. 

17 (d) SUPPLEMENT NOT SUPPLANT.—Assistance pro18 vided under this section shall be used to supplement, and 

19 not to supplant, any other Federal resources available to 

20 carry out activities described in this section. 

21 SEC. 173. BUILDING ASSESSMENT CENTERS. 

22 (a) IN GENERAL.—The Secretary of Energy (in this 

23 section referred to as the ‘‘Secretary’’) shall provide fund24 ing to institutions of higher education for Building Assess25 ment Centers to— 
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1 (1) identify opportunities for optimizing energy 

2 efficiency and environmental performance in existing 

3 buildings; 

4 (2) promote high-efficiency building construc5 tion techniques and materials options; 

6 (3) promote applications of emerging concepts 

7 and technologies in commercial and institutional 

8 buildings; 

9 (4) train engineers, architects, building sci10 entists, and building technicians in energy-efficient 

11 design and operation; 

12 (5) assist local community colleges, trade 

13 schools, registered apprenticeship programs and 

14 other accredited training programs in training build15 ing technicians; 

16 (6) promote research and development for the 

17 use of alternative energy sources to supply heat and 

18 power, for buildings, particularly energy-intensive 

19 buildings; and 

20 (7) coordinate with and assist State-accredited 

21 technical training centers and community colleges, 

22 while ensuring appropriate services to all regions of 

23 the United States. 

24 (b) COORDINATION WITH REGIONAL CENTERS FOR

25 ENERGY AND ENVIRONMENTAL KNOWLEDGE AND OUT-
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1 REACH.—A Building Assessment Center may serve as a 

2 Center for Energy and Environmental Knowledge and 

3 Outreach established pursuant to section 174. 

4 (c) COORDINATION AND DUPLICATION.—The Sec5 retary shall coordinate efforts under this section with 

6 other programs of the Department of Energy and other 

7 Federal agencies to avoid duplication of effort. 

8 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

9 are authorized to be appropriated to the Secretary to carry 

10 out this section $50,000,000 for fiscal year 2010 and each 

11 fiscal year thereafter. 

12 SEC. 174. CENTERS FOR ENERGY AND ENVIRONMENTAL 

13 KNOWLEDGE AND OUTREACH. 

14 (a) REGIONAL CENTERS FOR ENERGY AND ENVI15 RONMENTAL KNOWLEDGE AND OUTREACH.— 

16 (1) ESTABLISHMENT.—The Secretary shall es17 tablish not more than 10 regional Centers for En18 ergy and Environmental Knowledge and Outreach at 

19 institutions of higher education to coordinate with 

20 and advise industrial research and assessment cen21 ters, Building Assessment Centers, and Clean En22 ergy Application Centers located in the region of 

23 such Center for Energy and Environmental Knowl24 edge and Outreach. 
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1 (2) TECHNICAL ASSISTANCE PROGRAMS.—Each 

2 Center for Energy and Environmental Knowledge 

3 and Outreach shall consist of at least one, new or 

4 existing, high performing, of the following: 

5 (A) An industrial research and assessment 

6 center. 

7 (B) A Clean Energy Application Center. 

8 (C) A Building Assessment Center. 

9 (3) SELECTION CRITERIA.—The Secretary shall 

10 select Centers for Energy and Environmental 

11 Knowledge and Outreach through a competitive 

12 process, based on the following: 

13 (A) Identification of the highest per14 forming industrial research and assessment cen15 ters, Clean Energy Application Centers, and 

16 Building Assessment Centers. 

17 (B) The degree to which an institution of 

18 higher education maintains credibility among 

19 regional private sector organizations such as 

20 trade associations, engineering associations, and 

21 environmental organizations. 

22 (C) The degree to which an institution of 

23 higher education is providing or has provided 

24 technical assistance, academic leadership, and 

25 market leadership in the energy arena in a 
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1 manner that is consistent with the areas of 

2 focus of industrial research and assessment cen3 ters, Clean Energy Application Centers, and 

4 Building Assessment Centers. 

5 (D) The presence of an additional indus6 trial research and assessment center, Clean En7 ergy Application Center, or Building Assess8 ment Center at the institution of higher edu9 cation. 

10 (4) GEOGRAPHIC DIVERSITY.—In selecting Cen11 ters for Energy and Environmental Knowledge and 

12 Outreach under this subsection, the Secretary shall 

13 ensure such Centers are distributed geographically 

14 in a relatively uniform manner to ensure all regions 

15 of the Nation are represented. 

16 (5) REGIONAL LEADERSHIP.—Each Center for 

17 Energy and Environmental Knowledge and Outreach 

18 shall, to the extent possible, provide leadership to all 

19 other industrial research and assessment centers, 

20 Clean Energy Application Centers, and Building As21 sessment Centers located in the Center’s geographic 

22 region, as determined by the Secretary. Such leader23 ship shall include— 

24 (A) developing regional goals specific to 

25 the purview of the industrial research and as-
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1 sessment centers, Clean Energy Application 

2 Centers, and Building Assessment Centers pro3 grams; 

4 (B) developing regionally specific technical 

5 resources; and 

6 (C) outreach to interested parties in the 

7 region to inform them of the information, re8 sources, and services available through the asso9 ciated industrial research and assessment cen10 ters, Clean Energy Application Centers, and 

11 Building Assessment Centers. 

12 (6) FURTHER COORDINATION.—To increase the 

13 value and capabilities of the regionally associated in14 dustrial research and assessment centers, Clean En15 ergy Application Centers, and Building Assessment 

16 Centers programs, Centers for Energy and Environ17 mental Knowledge and Outreach shall— 

18 (A) coordinate with Manufacturing Exten19 sion Partnership Centers of the National Insti20 tute of Science and Technology; 

21 (B) coordinate with the relevant programs 

22 in the Department of Energy, including the 

23 Building Technology Program and Industrial 

24 Technologies Program; 
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1 (C) increase partnerships with the Na2 tional Laboratories of the Department of En3 ergy to leverage the expertise and technologies 

4 of the National Laboratories to achieve the 

5 goals of the industrial research and assessment 

6 centers, Clean Energy Application Centers, and 

7 Building Assessment Centers; 

8 (D) work with relevant municipal, county, 

9 and State economic development entities to le10 verage relevant financial incentives for capital 

11 investment and other policy tools for the protec12 tion and growth of local business and industry; 

13 (E) partner with local professional and pri14 vate trade associations and business develop15 ment interests to leverage existing knowledge of 

16 local business challenges and opportunities; 

17 (F) work with energy utilities and other 

18 administrators of publicly funded energy pro19 grams to leverage existing energy efficiency and 

20 clean energy programs; 

21 (G) identify opportunities for reducing 

22 greenhouse gas emissions; and 

23 (H) promote sustainable business practices 

24 for those served by the industrial research and 
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1 assessment centers, Clean Energy Application 

2 Centers, and Building Assessment Centers. 

3 (7) WORKFORCE TRAINING.— 

4 (A) IN GENERAL.—The Secretary shall re5 quire each Center for Energy and Environ6 mental Knowledge and Outreach to establish or 

7 maintain an internship program for the region 

8 of such Center, designed to encourage students 

9 who perform energy assessments to continue 

10 working with a particular company, building, or 

11 facility to help implement the recommendations 

12 contained in any such assessment provided to 

13 such company, building, or facility. Each Center 

14 for Energy and Environmental Knowledge and 

15 Outreach shall act as internship coordinator to 

16 help match students to available opportunities. 

17 (B) FEDERAL SHARE.—The Federal share 

18 of the cost of carrying out internship programs 

19 described under subparagraph (A) shall be 50 

20 percent. 

21 (C) FUNDING.—Subject to the availability 

22 of appropriations, of the funds made available 

23 to carry out this subsection, the Secretary shall 

24 use to carry out this paragraph not less than 
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1 $5,000,000 for fiscal year 2010 and each fiscal 

2 year thereafter. 

3 (8) SMALL BUSINESS LOANS.—The Adminis4 trator of the Small Business Administration shall, to 

5 the maximum practicable, expedite consideration of 

6 applications from eligible small business concerns for 

7 loans under the Small Business Act (15 U.S.C. 631 

8 et seq.) for loans to implement recommendations of 

9 any industrial research and assessment center, Clean 

10 Energy Application Center, or Building Assessment 

11 Center. 

12 (9) DEFINITIONS.—In this subsection: 

13 (A) INDUSTRIAL RESEARCH AND ASSESS14 MENT CENTER.—The term ‘‘industrial research 

15 and assessment center’’ means a center estab16 lished or maintained pursuant to section 452(e) 

17 of the Energy Independence and Security Act 

18 of 2007 (42 U.S.C. 17111(e)). 

19 (B) CLEAN ENERGY APPLICATION CEN20 TER.—The term ‘‘Clean Energy Application 

21 Center’’ means a center redesignated and de22 scribed section under section 375 of the Energy 

23 Policy and Conservation Act (42 U.S.C. 6345). 

24 (C) BUILDING ASSESSMENT CENTER.—The 

25 term ‘‘Building Assessment Center’’ means an 
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1 institution of higher education-based center es2 tablished pursuant to section 173. 

3 (D) SECRETARY.—The term ‘‘Secretary’’ 

4 means the Secretary of Energy. 

5 (10) FUNDING.—There are authorized to be ap6 propriated to the Secretary to carry out this sub7 section $10,000,000 for fiscal year 2010 and each 

8 fiscal year thereafter. Subject to the availability of 

9 appropriations, of the funds made available to carry 

10 out this subsection, the Secretary shall provide to 

11 each Center for Energy and Environmental Knowl12 edge and Outreach not less than $500,000 for fiscal 

13 year 2010 and each fiscal year thereafter. 

14 (b) INTEGRATION OF OTHER TECHNICAL ASSIST15 ANCE PROGRAMS.— 

16 (1) CLEAN ENERGY APPLICATION CENTERS.— 

17 Section 375 of the Energy Policy and Conservation 

18 Act (42 U.S.C. 6345) is amended— 

19 (A) by redesignating subsection (f) as sub20 section (g); and 

21 (B) by adding after subsection (e) the fol22 lowing new subsection: 

23 ‘‘(f) COORDINATION WITH CENTERS FOR ENERGY

24 AND ENVIRONMENTAL KNOWLEDGE AND OUTREACH.—A 

25 Clean Energy Application Center may serve as a Center 
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1 for Energy and Environmental Knowledge and Outreach 

2 established pursuant to section 174 of the American Clean 

3 Energy and Security Act of 2009.’’. 

4 (2) INDUSTRIAL RESEARCH AND ASSESSMENT

5 CENTERS.—Section 452(e) of the Energy Independ6 ence and Security Act of 2007 (42 U.S.C. 17111(e)) 

7 is amended— 

8 (A) by striking ‘‘The Secretary’’ and all 

9 that follows through ‘‘shall be—’’ and inserting 

10 the following: 

11 ‘‘(1) IN GENERAL.—The Secretary shall provide 

12 funding to institution of higher education-based in13 dustrial research and assessment centers, whose pur14 poses shall be—’’; 

15 (B) by redesignating paragraphs (1) 

16 through (5) as subparagraphs (A) through (E), 

17 respectively (and by moving the margins of such 

18 subparagraphs 2 ems to the right); and 

19 (C) by adding at the end the following new 

20 paragraph: 

21 ‘‘(2) COORDINATION WITH CENTERS FOR EN22 ERGY AND ENVIRONMENTAL KNOWLEDGE AND OUT23 REACH.—An industrial research and assessment cen24 ter may serve as a Center for Energy and Environ25 mental Knowledge and Outreach established pursu-
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1 ant to section 174 of the American Clean Energy 

2 and Security Act of 2009.’’. 

3 (c) ADDITIONAL FUNDING FOR CLEAN ENERGY AP4 PLICATION CENTERS.—Subsection (g) of section 375 of 

5 the Energy Policy and Conservation Act (42 U.S.C. 

6 6345(f)), as redesignated by subsection (b)(1) of this sec7 tion, is amended by striking ‘‘$10,000,000 for each of fis8 cal years 2008 through 2012’’ and inserting ‘‘$30,000,000 

9 for fiscal year 2010 and each fiscal year thereafter’’. 

10 SEC. 175. HIGH EFFICIENCY GAS TURBINE RESEARCH, DE11 VELOPMENT, AND DEMONSTRATION. 

12 (a) IN GENERAL.—The Secretary of Energy shall 

13 carry out a multiyear, multiphase program of research, de14 velopment, and technology demonstration to improve the 

15 efficiency of gas turbines used in combined cycle power 

16 generation systems and to identify the technologies that 

17 ultimately will lead to gas turbine combined cycle effi18 ciency of 65 percent. 

19 (b) PROGRAM ELEMENTS.—The program under this 

20 section shall— 

21 (1) support first-of-a-kind engineering and de22 tailed gas turbine design for utility-scale electric 

23 power generation, including— 

24 (A) high temperature materials, including 

25 superalloys, coatings, and ceramics; 
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1 (B) improved heat transfer capability; 

2 (C) manufacturing technology required to 

3 construct complex three-dimensional geometry 

4 parts with improved aerodynamic capability; 

5 (D) combustion technology to produce 

6 higher firing temperature while lowering nitro7 gen oxide and carbon monoxide emissions per 

8 unit of output; 

9 (E) advanced controls and systems integra10 tion; 

11 (F) advanced high performance compressor 

12 technology; and 

13 (G) validation facilities for the testing of 

14 components and subsystems; 

15 (2) include technology demonstration through 

16 component testing, subscale testing, and full scale 

17 testing in existing fleets; 

18 (3) include field demonstrations of the devel19 oped technology elements so as to demonstrate tech20 nical and economic feasibility; and 

21 (4) assess overall combined cycle system per22 formance. 

23 (c) PROGRAM GOALS.—The goals of the multiphase 

24 program established under subsection (a) shall be— 

25 (1) in phase I— 
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1 (A) to develop the conceptual design of ad2 vanced high efficiency gas turbines that can 

3 achieve at least 62 percent combined cycle effi4 ciency on a lower heating value basis; and 

5 (B) to develop and demonstrate the tech6 nology required for advanced high efficiency gas 

7 turbines that can achieve at least 62 percent 

8 combined cycle efficiency on a lower heating 

9 value basis; and 

10 (2) in phase II, to develop the conceptual de11 sign for advanced high efficiency gas turbines that 

12 can achieve at least 65 percent combined cycle effi13 ciency on a lower heating value basis. 

14 (d) PROPOSALS.—Within 180 days after the date of 

15 enactment of this section, the Secretary shall solicit pro16 posals for conducting activities under this section. In se17 lecting proposals, the Secretary shall emphasize— 

18 (1) the extent to which the proposal will stimu19 late the creation or increased retention of jobs in the 

20 United States; and 

21 (2) the extent to which the proposal will pro22 mote and enhance United States technology leader23 ship. 
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1 (e) COST SHARING.—Section 988 of the Energy Pol2 icy Act of 2005 (42 U.S.C. 16352) shall apply to an award 

3 of financial assistance made under this section. 

4 (f) LIMITS ON PARTICIPATION.—The limits on par5 ticipation applicable under section 999E of the Energy 

6 Policy Act of 2005 (42 U.S.C. 16375) shall apply to finan7 cial assistance awarded under this section. 

8 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

9 are authorized to be appropriated to the Secretary for car10 rying out this section $65,000,000 for each of fiscal years 

11 2011 through 2014. 

12 Subtitle I—Nuclear and Advanced 

13 Technologies 

14 SEC. 181. REVISIONS TO LOAN GUARANTEE PROGRAM AU15 THORITY. 

16 (a) DEFINITION OF CONDITIONAL COMMITMENT.— 

17 Section 1701 of the Energy Policy Act of 2005 (42 U.S.C. 

18 16511), as amended by section 130(a) of this Act, is 

19 amended by adding after paragraph (7) the following: 

20 ‘‘(8) CONDITIONAL COMMITMENT.—The term 

21 ‘conditional commitment’ means a final term sheet 

22 negotiated between the Secretary and a project 

23 sponsor or sponsors, which term sheet shall be bind24 ing on both parties and become a final loan guar25 antee agreement if all conditions precedent estab-
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1 lished in the term sheet, which shall include the ac2 quisition of all necessary permits and licenses, are 

3 satisfied.’’. 

4 (b) SPECIFIC APPROPRIATION OR CONTRIBUTION.— 

5 Section 1702 of the Energy Policy Act of 2005 (42 U.S.C. 

6 16512) is amended by striking subsection (b) and insert7 ing the following: 

8 ‘‘(b) SPECIFIC APPROPRIATION OR CONTRIBU9 TION.— 

10 ‘‘(1) IN GENERAL.—No guarantee shall be 

11 made unless— 

12 ‘‘(A) an appropriation for the cost has 

13 been made; 

14 ‘‘(B) the Secretary has received from the 

15 borrower a payment in full for the cost of the 

16 obligation and deposited the payment into the 

17 Treasury; or 

18 ‘‘(C) a combination of appropriations or 

19 payments from the borrower has been made 

20 sufficient to cover the cost of the obligation. 

21 ‘‘(2) LIMITATION.—The source of payments re22 ceived from a borrower under paragraph (1)(B) shall 

23 not be a loan or other debt obligation that is made 

24 or guaranteed by the Federal Government.’’. 
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1 (c) FEES.—Section 1702(h) of the Energy Policy Act 

2 of 2005 (42 U.S.C. 16512(h)) is amended by striking 

3 paragraph (2) and inserting the following: 

4 ‘‘(2) AVAILABILITY.—Fees collected under this 

5 subsection shall— 

6 ‘‘(A) be deposited by the Secretary into a 

7 special fund in the Treasury to be known as the 

8 ‘Incentives For Innovative Technologies Fund’; 

9 and 

10 ‘‘(B) remain available to the Secretary for 

11 expenditure, without further appropriation or 

12 fiscal year limitation, for administrative ex13 penses incurred in carrying out this title.’’. 

14 (d) WAGE RATE REQUIREMENTS.—Section 1702 of 

15 the Energy Policy Act of 2005 (42 U.S.C. 16512) is 

16 amended by adding at the end the following new sub17 section: 

18 ‘‘(k) WAGE RATE REQUIREMENTS.—No loan guar19 antee shall be made under this title unless the borrower 

20 has provided to the Secretary reasonable assurances that 

21 all laborers and mechanics employed by contractors and 

22 subcontractors in the performance of construction work fi23 nanced in whole or in part by the guaranteed loan will 

24 be paid wages at rates not less than those prevailing on 

25 projects of a character similar to the contract work in the 
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1 civil subdivision of the State in which the contract work 

2 is to be performed as determined by the Secretary of 

3 Labor in accordance with subchapter IV of chapter 31 of 

4 part A of subtitle II of title 40, United States Code. With 

5 respect to the labor standards specified in this subsection, 

6 the Secretary of Labor shall have the authority and func7 tions set forth in Reorganization Plan Numbered 14 of 

8 1950 (64 Stat. 1267; 5 U.S.C. App.) and section 3145 

9 of title 40, United States Code.’’. 

10 (e) SUBROGATION.—Section 1702(g)(2) of the En11 ergy Policy Act of 2005 (42 U.S.C. 16512(g)(2)) is 

12 amended by striking subparagraphs (B) and (C) and in13 serting the following: 

14 ‘‘(B) SUPERIORITY OF RIGHTS.—Except as 

15 provided in subparagraph (C), the rights of the 

16 Secretary, with respect to any property ac17 quired pursuant to a guarantee or related 

18 agreements, shall be superior to the rights of 

19 any other person with respect to the property. 

20 ‘‘(C) TERMS AND CONDITIONS.—A guar21 antee agreement shall include such detailed 

22 terms and conditions as the Secretary deter23 mines appropriate to— 

24 ‘‘(i) protect the financial interests of 

25 the United States in the case of default; 
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1 ‘‘(ii) have available all the patents and 

2 technology necessary for any person se3 lected, including the Secretary, to complete 

4 and operate the project; 

5 ‘‘(iii) provide for sharing the proceeds 

6 received from the sale of project assets 

7 with other creditors or control the disposi8 tion of project assets if necessary to pro9 tect the financial interests of the United 

10 States in the case of default; and 

11 ‘‘(iv) provide such lien priority in 

12 project assets as necessary to protect the 

13 financial interests of the United States in 

14 the case of a default.’’. 

15 SEC. 182. PURPOSE. 

16 The purpose of sections 183 through 189 of this sub17 title is to promote the domestic development and deploy18 ment of clean energy technologies required for the 21st 

19 century through the establishment of a self-sustaining 

20 Clean Energy Deployment Administration that will pro21 vide for an attractive investment environment through 

22 partnership with and support of the private capital market 

23 in order to promote access to affordable financing for ac24 celerated and widespread deployment of— 

25 (1) clean energy technologies; 
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1 (2) advanced or enabling energy infrastructure 

2 technologies; 

3 (3) energy efficiency technologies in residential, 

4 commercial, and industrial applications, including 

5 end-use efficiency in buildings; and 

6 (4) manufacturing technologies for any of the 

7 technologies or applications described in this section. 

8 SEC. 183. DEFINITIONS. 

9 In this subtitle: 

10 (1) ADMINISTRATION.—The term ‘‘Administra11 tion’’ means the Clean Energy Deployment Adminis12 tration established by section 186. 

13 (2) ADVISORY COUNCIL.—The term ‘‘Advisory 

14 Council’’ means the Energy Technology Advisory 

15 Council of the Administration. 

16 (3) BREAKTHROUGH TECHNOLOGY.—The term 

17 ‘‘breakthrough technology’’ means a clean energy 

18 technology that— 

19 (A) presents a significant opportunity to 

20 advance the goals developed under section 185, 

21 as assessed under the methodology established 

22 by the Advisory Council; but 

23 (B) has generally not been considered a 

24 commercially ready technology as a result of 
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1 high perceived technology risk or other similar 

2 factors. 

3 (4) CLEAN ENERGY TECHNOLOGY.—The term 

4 ‘‘clean energy technology’’ means a technology re5 lated to the production, use, transmission, storage, 

6 control, or conservation of energy— 

7 (A) that will contribute to a stabilization of 

8 atmospheric greenhouse gas concentrations 

9 thorough reduction, avoidance, or sequestration 

10 of energy-related emissions and— 

11 (i) reduce the need for additional en12 ergy supplies by using existing energy sup13 plies with greater efficiency or by transmit14 ting, distributing, or transporting energy 

15 with greater effectiveness through the in16 frastructure of the United States; or 

17 (ii) diversify the sources of energy 

18 supply of the United States to strengthen 

19 energy security and to increase supplies 

20 with a favorable balance of environmental 

21 effects if the entire technology system is 

22 considered; and 

23 (B) for which, as determined by the Ad24 ministrator, insufficient commercial lending is 
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1 available at affordable rates to allow for wide2 spread deployment. 

3 (5) COST.—The term ‘‘cost’’ has the meaning 

4 given the term in section 502 of the Federal Credit 

5 Reform Act of 1990 (2 U.S.C. 661a). 

6 (6) DIRECT LOAN.—The term ‘‘direct loan’’ has 

7 the meaning given the term in section 502 of the 

8 Federal Credit Reform Act of 1990 (2 U.S.C. 661a). 

9 (7) FUND.—The term ‘‘Fund’’ means the Clean 

10 Energy Investment Fund established by section 

11 184(a). 

12 (8) GREEN BONDS.—The term ‘‘Green Bonds’’ 

13 means bonds issued pursuant to section 184. 

14 (8) LOAN GUARANTEE.—The term ‘‘loan guar15 antee’’ has the meaning given the term in section 

16 502 of the Federal Credit Reform Act of 1990 (2 

17 U.S.C. 661a). 

18 (9) NATIONAL LABORATORY.—The term ‘‘Na19 tional Laboratory’’ has the meaning given the term 

20 in section 2 of the Energy Policy Act of 2005 (42 

21 U.S.C. 15801). 

22 (10) SECRETARY.—The term ‘‘Secretary’’ 

23 means the Secretary of Energy. 

24 (11) STATE.—The term ‘‘State’’ means— 

25 (A) a State; 
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1 (B) the District of Columbia; 

2 (C) the Commonwealth of Puerto Rico; 

3 and 

4 (D) any other territory or possession of the 

5 United States. 

6 (12) TECHNOLOGY RISK.—The term ‘‘tech7 nology risk’’ means the risks during construction or 

8 operation associated with the design, development, 

9 and deployment of clean energy technologies (includ10 ing the cost, schedule, performance, reliability and 

11 maintenance, and accounting for the perceived risk), 

12 from the perspective of commercial lenders, that 

13 may be increased as a result of the absence of ade14 quate historical construction, operating, or perform15 ance data from commercial applications of the tech16 nology. 

17 SEC. 184. CLEAN ENERGY INVESTMENT FUND. 

18 (a) ESTABLISHMENT.—There is established in the 

19 Treasury of the United States a revolving fund, to be 

20 known as the ‘‘Clean Energy Investment Fund’’, con21 sisting of— 

22 (1) such amounts as are deposited in the Fund 

23 under this subtitle; and 

24 (2) such sums as may be appropriated to sup25 plement the Fund. 
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1 (b) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated to the Fund such sums 

3 as are necessary to carry out this subtitle. 

4 (c) EXPENDITURES FROM FUND.— 

5 (1) IN GENERAL.—Amounts in the Fund shall 

6 be available to the Administrator of the Administra7 tion for obligation without fiscal year limitation, to 

8 remain available until expended. 

9 (2) ADMINISTRATIVE EXPENSES.— 

10 (A) FEES.—Fees collected for administra11 tive expenses shall be available without limita12 tion to cover applicable expenses. 

13 (B) FUND.—To the extent that adminis14 trative expenses are not reimbursed through 

15 fees, an amount not to exceed 1.5 percent of 

16 the amounts in the Fund as of the beginning of 

17 each fiscal year shall be available to pay the ad18 ministrative expenses for the fiscal year nec19 essary to carry out this subtitle. 

20 (d) TRANSFERS OF AMOUNTS.— 

21 (1) IN GENERAL.—The amounts required to be 

22 transferred to the Fund under this section shall be 

23 transferred at least monthly from the general fund 

24 of the Treasury to the Fund on the basis of esti25 mates made by the Secretary of the Treasury. 
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1 (2) ADJUSTMENTS.—Proper adjustment shall 

2 be made in amounts subsequently transferred to the 

3 extent prior estimates were in excess of or less than 

4 the amounts required to be transferred. 

5 (3) CASH FLOWS.—Cash flows associated with 

6 costs of the Fund described in section 502(5)(B) of 

7 the Federal Credit Reform Act of 1990 (2 U.S.C. 

8 661a(5)(B)) shall be transferred to appropriate 

9 credit accounts. 

10 (e) GREEN BONDS.— 

11 (1) INITIAL CAPITALIZATION.—The Secretary 

12 of the Treasury shall issue Green Bonds in the 

13 amount of $7,500,000,000 on the credit of the 

14 United States to acquire capital stock of the Admin15 istration. Stock certificates evidencing ownership in 

16 the Administration shall be issued by the Adminis17 tration to the Secretary of the Treasury, to the ex18 tent of payments made for the capital stock of the 

19 Administration. 

20 (2) DENOMINATIONS AND MATURITY.—Green 

21 Bonds shall be in such forms and denominations, 

22 and shall mature within such periods, as determined 

23 by the Secretary of the Treasury. 

24 (3) INTEREST.—Green Bonds shall bear inter25 est at a rate not less than the current average yield 
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1 on outstanding market obligations of the United 

2 States of comparable maturity during the month 

3 preceding the issuance of the obligation as deter4 mined by the Secretary of the Treasury. 

5 (4) LAWFUL INVESTMENTS.—Green Bonds 

6 shall be lawful investments, and may be accepted as 

7 security for all fiduciary, trust, and public funds, the 

8 investment or deposit of which shall be under the 

9 authority or control of the United States or any offi10 cer or officers thereof. 

11 SEC. 185. ENERGY TECHNOLOGY DEPLOYMENT GOALS. 

12 (a) GOALS.—Not later than 1 year after the date of 

13 enactment of this Act, the Secretary, after consultation 

14 with the Advisory Council, shall develop and publish for 

15 review and comment in the Federal Register recommended 

16 near-, medium-, and long-term goals (including numerical 

17 performance targets at appropriate intervals to measure 

18 progress toward those goals) for the deployment of clean 

19 energy technologies through the credit support programs 

20 established by section 187 to promote— 

21 (1) sufficient electric generating capacity using 

22 clean energy technologies to meet the energy needs 

23 of the United States; 

24 (2) clean energy technologies in vehicles and 

25 fuels that will substantially reduce the reliance of 
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1 the United States on foreign sources of energy and 

2 insulate consumers from the volatility of world en3 ergy markets; 

4 (3) a domestic commercialization and manufac5 turing capacity that will establish the United States 

6 as a world leader in clean energy technologies across 

7 multiple sectors; 

8 (4) installation of sufficient infrastructure to 

9 allow for the cost-effective deployment of clean en10 ergy technologies appropriate to each region of the 

11 United States; 

12 (5) the transformation of the building stock of 

13 the United States to zero net energy consumption; 

14 (6) the recovery, use, and prevention of waste 

15 energy; 

16 (7) domestic manufacturing of clean energy 

17 technologies on a scale that is sufficient to achieve 

18 price parity with conventional energy sources; 

19 (8) domestic production of commodities and 

20 materials (such as steel, chemicals, polymers, and 

21 cement) using clean energy technologies so that the 

22 United States will become a world leader in environ23 mentally sustainable production of the commodities 

24 and materials; 
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1 (9) a robust, efficient, and interactive electricity 

2 transmission grid that will allow for the incorpora3 tion of clean energy technologies, distributed genera4 tion, and demand-response in each regional electric 

5 grid; 

6 (10) sufficient availability of financial products 

7 to allow owners and users of residential, retail, com8 mercial, and industrial buildings to make energy ef9 ficiency and distributed generation technology in10 vestments with reasonable payback periods; 

11 (11) sufficient availability of financial services 

12 and support to small businesses developing and de13 ploying clean energy technologies through partner14 ships with private entities that have relevant credit 

15 expertise; and 

16 (12) such other goals as the Secretary, in con17 sultation with the Advisory Council, determines to be 

18 consistent with the purpose stated in section 182. 

19 (b) REVISIONS.—The Secretary shall revise the goals 

20 established under subsection (a), from time to time as ap21 propriate, to account for advances in technology and 

22 changes in energy policy. 

23 SEC. 186. CLEAN ENERGY DEPLOYMENT ADMINISTRATION. 

24 (a) ESTABLISHMENT.— 
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1 (1) ESTABLISHMENT OF CORPORATION.—There 

2 is established a corporation to be known as the 

3 Clean Energy Deployment Administration that shall 

4 be wholly owned by the United States. 

5 (2) INDEPENDENT CORPORATION.—The Admin6 istration shall be an independent corporation. Nei7 ther the Administration nor any of its functions, 

8 powers, or duties shall be transferred to or consoli9 dated with any other department, agency, or cor10 poration of the Government unless the Congress pro11 vides otherwise. 

12 (3) CHARTER.—The Administration shall be 

13 chartered for 20 years from the date of enactment 

14 of this section. 

15 (4) STATUS.— 

16 (A) INSPECTOR GENERAL.—Section 12 of 

17 the Inspector General Act of 1978 (5 U.S.C. 

18 App.) is amended— 

19 (i) in paragraph (1), by inserting ‘‘the 

20 Administrator of the Clean Energy Deploy21 ment Administration;’’ after ‘‘Export-Im22 port Bank;’’; and 

23 (ii) in paragraph (2), by inserting 

24 ‘‘the Clean Energy Deployment Adminis25 tration,’’ after ‘‘Export-Import Bank,’’. 
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1 (3) OFFICES.— 

2 (A) PRINCIPAL OFFICE.—The Administra3 tion shall— 

4 (i) maintain the principal office of the 

5 Administration in the national capital re6 gion; and 

7 (ii) for purposes of venue in civil ac8 tions, be considered to be a resident of the 

9 District of Columbia. 

10 (B) OTHER OFFICES.—The Administration 

11 may establish other offices in such other places 

12 as the Administration considers necessary or 

13 appropriate for the conduct of the business of 

14 the Administration. 

15 (b) ADMINISTRATOR.— 

16 (1) IN GENERAL.—The Administrator of the 

17 Administration shall be— 

18 (A) appointed by the President, with the 

19 advice and consent of the Senate, for a 5-year 

20 term; and 

21 (B) compensated at the prevailing rate for 

22 compensation for similar positions in industry. 

23 (2) DUTIES.—The Administrator of the Admin24 istration shall— 
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1 (A) serve as the Chief Executive Officer of 

2 the Administration and Chairman of the Board; 

3 (B) ensure that— 

4 (i) the Administration operates in a 

5 safe and sound manner, including mainte6 nance of adequate capital and internal con7 trols (consistent with section 404 of the 

8 Sarbanes-Oxley Act of 2002 (15 U.S.C. 

9 7262)); 

10 (ii) the operations and activities of the 

11 Administration foster liquid, efficient, com12 petitive, and resilient energy and energy ef13 ficiency finance markets; 

14 (iii) the Administration carries out the 

15 purpose stated in section 182 only through 

16 activities that are authorized under and 

17 consistent with sections 182 through 189; 

18 and 

19 (iv) the activities of the Administra20 tion and the manner in which the Adminis21 tration is operated are consistent with the 

22 public interest; 

23 (C) develop policies and procedures for the 

24 Administration that will— 
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1 (i) promote a self-sustaining portfolio 

2 of investments that will maximize the value 

3 of investments to effectively promote clean 

4 energy technologies; 

5 (ii) promote transparency and open6 ness in Administration operations; 

7 (iii) afford the Administration with 

8 sufficient flexibility to meet the purpose 

9 stated in section 182; and 

10 (iv) provide for the efficient proc11 essing of applications; and 

12 (D) with the concurrence of the Board, set 

13 expected loss reserves for the support provided 

14 by the Administration consistent with section 

15 187(c). 

16 (c) BOARD OF DIRECTORS.— 

17 (1) IN GENERAL.—The Board of Directors of 

18 the Administration shall consist of— 

19 (A) the Secretary or the designee of the 

20 Secretary, who shall serve as an ex-officio mem21 ber of the Board of Directors; 

22 (B) the Secretary of the Treasury or the 

23 designee of the Secretary, who shall serve as an 

24 ex-officio member of the Board of Directors; 
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1 (C) the Secretary of the Interior or the 

2 designee of the Secretary, who shall serve as an 

3 ex-officio member of the Board of Directors; 

4 (D) the Secretary of Agriculture or the 

5 designee of the Secretary, who shall serve as an 

6 ex officio member of the Board of Directors; 

7 (E) the Administrator of the Administra8 tion, who shall serve as the Chairman of the 

9 Board of Directors; and 

10 (F) 4 additional members who shall— 

11 (i) be appointed by the President, 

12 with the advice and consent of the Senate, 

13 for staggered 5-year terms; and 

14 (ii) have experience in banking, finan15 cial services, technology assessment, energy 

16 regulation, or risk management, including 

17 individuals with substantial experience in 

18 the development of energy projects, the 

19 electricity generation sector, the transpor20 tation sector, the manufacturing sector, 

21 and the energy efficiency sector. 

22 (2) DUTIES.—The Board of Directors shall— 

23 (A) oversee the operations of the Adminis24 tration and ensure industry best practices are 
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1 followed in all financial transactions involving 

2 the Administration; 

3 (B) consult with the Administrator of the 

4 Administration on the general policies and pro5 cedures of the Administration to ensure the in6 terests of the taxpayers are protected; 

7 (C) ensure the portfolio of investments are 

8 consistent with purpose stated in section 182 

9 and with the long-term financial stability of the 

10 Administration; 

11 (D) ensure that the operations and activi12 ties of the Administration are consistent with 

13 the development of a robust private sector that 

14 can provide commercial loans or financing prod15 ucts; and 

16 (E) not serve on a full-time basis, except 

17 that the Board of Directors shall meet at least 

18 quarterly to review, as appropriate, applications 

19 for credit support and set policies and proce20 dures as necessary. 

21 (3) REMOVAL.—An appointed member of the 

22 Board of Directors may be removed from office by 

23 the President for good cause. 

24 (4) VACANCIES.—An appointed seat on the 

25 Board of Directors that becomes vacant shall be 
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1 filled by appointment by the President, but only for 

2 the unexpired portion of the term of the vacating 

3 member. 

4 (5) COMPENSATION OF MEMBERS.—An ap5 pointed member of the Board of Directors shall be 

6 compensated at the prevailing rate for compensation 

7 for similar positions in industry. 

8 (d) ENERGY TECHNOLOGY ADVISORY COUNCIL.— 

9 (1) IN GENERAL.—The Administration shall 

10 have an Energy Technology Advisory Council con11 sisting of 8 members selected by the Board of Direc12 tors of the Administration. 

13 (2) QUALIFICATIONS.—The members of the Ad14 visory Council shall— 

15 (A) have clean energy project development, 

16 clean energy finance, commercial, and/or rel17 evant scientific expertise; and 

18 (B) include representatives of— 

19 (i) the academic community; 

20 (ii) the private research community; 

21 (iii) National Laboratories; 

22 (iv) the technology or project develop23 ment community; and 

24 (v) the commercial energy financing 

25 and operations sector. 
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1 (3) DUTIES.—The Advisory Council shall— 

2 (A) develop and publish for comment in 

3 the Federal Register a methodology for assess4 ment of clean energy technologies that will 

5 allow the Administration to evaluate projects 

6 based on the progress likely to be achieved per7 dollar invested in maximizing the attributes of 

8 the definition of clean energy technology, taking 

9 into account the extent to which support for a 

10 clean energy technology is likely to accrue sub11 sequent benefits that are attributable to a com12 mercial scale deployment taking place earlier 

13 than that which otherwise would have occurred 

14 without the support; and 

15 (B) advise on the technological approaches 

16 that should be supported by the Administration 

17 to meet the technology deployment goals estab18 lished by the Secretary pursuant to section 185. 

19 (4) TERM.— 

20 (A) IN GENERAL.—Members of the Advi21 sory Council shall have 5-year staggered terms, 

22 as determined by the Administrator of the Ad23 ministration. 

24 (B) REAPPOINTMENT.—A member of the 

25 Advisory Council may be reappointed. 
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1 (5) COMPENSATION.—A member of the Advi2 sory Council, who is not otherwise compensated as 

3 a Federal employee, shall be compensated at a rate 

4 equal to the daily equivalent of the annual rate of 

5 basic pay prescribed for level IV of the Executive 

6 Schedule under section 5315 of title 5, United 

7 States Code, for each day (including travel time) 

8 during which the member is engaged in the perform9 ance of the duties of the Advisory Council. 

10 (e) STAFF.— 

11 (1) IN GENERAL.—The Administrator of the 

12 Administration, in consultation with the Board of 

13 Directors, may— 

14 (A) appoint and terminate such officers, 

15 attorneys, employees, and agents as are nec16 essary to carry out this subtitle; and 

17 (B) vest those personnel with such powers 

18 and duties as the Administrator of the Adminis19 tration may determine. 

20 (f) CONFLICTS OF INTEREST.—No director, officer, 

21 attorney, agent, or employee of the Administration shall 

22 in any manner, directly or indirectly, participate in the 

23 deliberation upon, or the determination of, any question 

24 affecting such individual’s personal interests, or the inter25 ests of any corporation, partnership, or association in 
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1 which such individual is directly or indirectly personally 

2 interested. 

3 (g) SUNSET.— 

4 (1) EXPIRATION OF CHARTER.—The Adminis5 tration shall continue to exercise its functions until 

6 all obligations and commitments of the Administra7 tion are discharged, even after its charter has ex8 pired. 

9 (2) PRIOR OBLIGATIONS.—No provisions of this 

10 subsection shall be construed as preventing the Ad11 ministration from— 

12 (A) undertaking obligations prior to the 

13 date of the expiration of its charter which ma14 ture subsequent to such date; 

15 (B) assuming, prior to the date of the ex16 piration of its charter, liability as guarantor, 

17 endorser, or acceptor of obligations which ma18 ture subsequent to such date; or 

19 (C) continuing as a corporation and exer20 cising any of its functions subsequent to the 

21 date of the expiration of its charter for pur22 poses of orderly liquidation, including the ad23 ministration of its assets and the collection of 

24 any obligations held by the Administration. 
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1 SEC. 187. DIRECT SUPPORT. 

2 (a) IN GENERAL.—The Administration may issue di3 rect loans, letters of credit, and loan guarantees to deploy 

4 clean energy technologies if the Administrator of the Ad5 ministration has determined that deployment of the tech6 nologies would benefit or be accelerated by the support. 

7 (b) ELIGIBILITY CRITERIA.—In carrying out this sec8 tion and awarding credit support to projects, the Adminis9 trator of the Administration shall account for— 

10 (1) how the technology rates based on an eval11 uation methodology established by the Advisory 

12 Council; 

13 (2) how the project fits with the goals estab14 lished under section 185; and 

15 (3) the potential for the applicant to success16 fully complete the project. 

17 (c) RISK.— 

18 (1) EXPECTED LOAN LOSS RESERVE.—The Ad19 ministrator of the Administration shall establish an 

20 expected loan loss reserve to account for estimated 

21 losses attributable to activities under this section 

22 that is consistent with the purposes of— 

23 (A) developing breakthrough technologies 

24 to the point at which technology risk is largely 

25 mitigated; 
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1 (B) achieving widespread deployment and 

2 advancing the commercial viability of clean en3 ergy technologies; and 

4 (C) advancing the goals established under 

5 section 185. 

6 (2) INITIAL EXPECTED LOAN LOSS RESERVE.— 

7 Until such time as the Administrator of the Admin8 istration determines sufficient data exist to establish 

9 an expected loan loss reserve that is appropriate, the 

10 Administrator of the Administration shall consider 

11 establishing an initial rate of 10 percent for the 

12 portfolio of investments under this subtitle. 

13 (3) PORTFOLIO INVESTMENT APPROACH.—The 

14 Administration shall— 

15 (A) use a portfolio investment approach to 

16 mitigate risk and diversify investments across 

17 technologies and ensure that no particular tech18 nology is provided more than 30 percent of the 

19 financial support available; 

20 (B) to the maximum extent practicable and 

21 consistent with long-term self-sufficiency, weigh 

22 the portfolio of investments in projects to ad23 vance the goals established under section 185; 

24 (C) consistent with the expected loan loss 

25 reserve established under this subsection, the 
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1 purpose stated in section 182, and section 

2 186(b)(2)(B), provide the maximum practicable 

3 percentage of support to promote breakthrough 

4 technologies; and 

5 (D) give the highest priority to investments 

6 that promote technologies that will achieve the 

7 maximum greenhouse gas emission reductions 

8 within a reasonable period of time per dollar in9 vested and the earliest reductions in greenhouse 

10 gas emissions. 

11 (4) LOSS RATE REVIEW.— 

12 (A) IN GENERAL.—The Board of Directors 

13 shall review on an annual basis the loss rates 

14 of the portfolio to determine the adequacy of 

15 the reserves. 

16 (B) REPORT.—Not later than 90 days 

17 after the date of the initiation of the review, the 

18 Administrator of the Administration shall sub19 mit to the Committee on Energy and Natural 

20 Resources and the Committee on Finance of the 

21 Senate, and the Committee on Energy and 

22 Commerce and the Committee on Ways and 

23 Means of the House of Representatives a report 

24 describing the results of the review and any rec25 ommended policy changes. 
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1 (5) FEDERAL COST SHARE.—Direct loans, let2 ters of credit and loan guarantees by the Adminis3 tration shall not exceed an amount equal to 80 per4 cent of the project cost of the facility that is the 

5 subject of the loan, letter of credit or loan guar6 antee, as estimated at the time at which the loan, 

7 letter of credit or loan guarantee is issued. 

8 (d) APPLICATION REVIEW.— 

9 (1) IN GENERAL.—To the maximum extent 

10 practicable and consistent with sound business prac11 tices, the Administration shall seek to consolidate re12 views of applications for credit support under this 

13 subtitle such that final decisions on applications can 

14 generally be issued not later than 180 days after the 

15 date of submission of a completed application. 

16 (2) ENVIRONMENTAL REVIEW.—In carrying out 

17 this subtitle, the Administration shall, to the max18 imum extent practicable— 

19 (A) avoid duplicating efforts that have al20 ready been undertaken by other agencies (in21 cluding State agencies acting under Federal 

22 programs); and 

23 (B) with the advice of the Council on Envi24 ronmental Quality and any other applicable 

25 agencies, use the administrative records of simi-
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1 lar reviews conducted throughout the executive 

2 branch to develop the most expeditious review 

3 process practicable. 

4 (e) WAGE RATE REQUIREMENTS.— 

5 (1) IN GENERAL.—No credit support shall be 

6 issued under this section unless the borrower has 

7 provided to the Administrator of the Administration 

8 reasonable assurances that all laborers and mechan9 ics employed by contractors and subcontractors in 

10 the performance of construction work financed in 

11 whole or in part by the Administration will be paid 

12 wages at rates not less than those prevailing on 

13 projects of a character similar to the contract work 

14 in the civil subdivision of the State in which the con15 tract work is to be performed as determined by the 

16 Secretary of Labor in accordance with subchapter 

17 IV of chapter 31 of part A of subtitle II of title 40, 

18 United States Code. 

19 (2) LABOR STANDARDS.—With respect to the 

20 labor standards specified in this subsection, the Sec21 retary of Labor shall have the authority and func22 tions set forth in Reorganization Plan Numbered 14 

23 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and section 

24 3145 of title 40, United States Code. 
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1 (f) LIMITATIONS.—(1) The Administration shall not 

2 provide direct support as defined under this section or in3 direct support as defined under section 188 to an indi4 vidual clean energy technology project that obtained a loan 

5 guarantee under title XVII of the Energy Policy Act of 

6 2005. 

7 (2) No direct or indirect support provided by the Ad8 ministration may be used to pay any part of the cost of 

9 an obligation or a loan guarantee under title XVII of the 

10 Energy Policy Act of 2005. 

11 SEC. 188. INDIRECT SUPPORT. 

12 (a) IN GENERAL.—For the purpose of enhancing the 

13 availability of private financing for clean energy tech14 nology deployment, the Administration may— 

15 (1) provide credit support to portfolios of tax16 able debt obligations originated by state, local, and 

17 private sector entities that enable owners and users 

18 of buildings and industrial facilities to— 

19 (A) significantly increase the energy effi20 ciency of such buildings or facilities; or 

21 (B) install systems that individually gen22 erate electricity from renewable energy re23 sources and have a capacity of no more than 2 

24 megawatts; 
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1 (2) facilitate financing transactions in tax eq2 uity markets and long-term purchasing of clean en3 ergy by state, local, and non-governmental not-for4 profit entities, to the degree and extent that the Ad5 ministration determines such financing activity is 

6 appropriate and consistent with carrying out the 

7 purposes described in Section 182 of this Act; and 

8 (3) provide credit support to portfolios of tax9 able debt obligations originated by state, local, and 

10 private sector entities that enable the deployment of 

11 energy storage applications for electric drive vehi12 cles, stationary applications, and electricity trans13 mission and distribution. 

14 (b) DEFINITIONS.—For purposes of the section: 

15 (1) CREDIT SUPPORT.—The term ‘‘credit sup16 port’’ means— 

17 (A) direct loans, letters of credit, loan 

18 guarantees, and insurance products; and 

19 (B) the purchase or commitment to pur20 chase, or the sale or commitment to sell, debt 

21 instruments (including subordinated securities). 

22 (2) RENEWABLE ENERGY RESOURCE.—The 

23 term ‘‘renewable energy resource’’ shall have the 

24 meaning given that term in section 610 of the Public 
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1 Utility Regulatory Policies Act of 1978 (as added by 

2 section 101 of this Act). 

3 (c) TRANSPARENCY.—The Administration shall seek 

4 to foster through its credit support activities— 

5 (1) the development and consistent application 

6 of standard contractual terms, transparent under7 writing standards and consistent measurement and 

8 verification protocols, as applicable; and 

9 (2) the creation of performance data that pro10 motes effective underwriting and risk management 

11 to support lending markets and stimulate the devel12 opment of private investment markets. 

13 (d) EXEMPT SECURITIES.—All securities insured or 

14 guaranteed by the Administration shall, to the same ex15 tent as securities that are direct obligations of or obliga16 tions guaranteed as to the principal or interest by the 

17 United States, be considered to be exempt securities with18 in the meaning of the laws administered by the Securities 

19 and Exchange Commission. 

20 SEC. 189. FEDERAL CREDIT AUTHORITY. 

21 (a) PAYMENTS OF LIABILITIES.— 

22 (1) IN GENERAL.—Any payment made to dis23 charge liabilities arising from agreements under this 

24 subtitle shall be paid exclusively out of the Fund or 

25 the associated credit account, as appropriate. 
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1 (2) SECURITY.—Subject to paragraph (1), the 

2 full faith and credit of the United States is pledged 

3 to the payment of all obligations entered into by the 

4 Administration pursuant to this subtitle. 

5 (b) FEES.— 

6 (1) IN GENERAL.—Consistent with achieving 

7 the purpose stated in section 182, the Administrator 

8 of the Administration shall charge fees or collect 

9 compensation generally in accordance with commer10 cial rates. 

11 (2) AVAILABILITY OF FEES.—All fees collected 

12 by the Administration may be retained by the Ad13 ministration and placed in the Fund and may re14 main available to the Administration, without fur15 ther appropriation or fiscal year limitation, for use 

16 in carrying out the purpose stated in section 182. 

17 (3) BREAKTHROUGH TECHNOLOGIES.—The Ad18 ministration shall charge the minimum amount in 

19 fees or compensation practicable for breakthrough 

20 technologies, consistent with the long-term viability 

21 of the Administration, unless the Administration 

22 first determines that a higher charge will not impede 

23 the development of the technology. 

24 (4) ALTERNATIVE FEE ARRANGEMENTS.—The 

25 Administration may use such alternative arrange-
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1 ments (such as profit participation, contingent fees, 

2 and other valuable contingent interests) as the Ad3 ministration considers appropriate to compensate the 

4 Administration for the expenses of the Administra5 tion and the risk inherent in the support of the Ad6 ministration. 

7 (c) COST TRANSFER AUTHORITY.—Amounts col8 lected by the Administration for the cost of a loan or loan 

9 guarantee shall be transferred by the Administration to 

10 the respective credit accounts. 

11 SEC. 190. GENERAL PROVISIONS. 

12 (a) IMMUNITY FROM IMPAIRMENT, LIMITATION, OR

13 RESTRICTION.— 

14 (1) IN GENERAL.—All rights and remedies of 

15 the Administration (including any rights and rem16 edies of the Administration on, under, or with re17 spect to any mortgage or any obligation secured by 

18 a mortgage) shall be immune from impairment, limi19 tation, or restriction by or under— 

20 (A) any law (other than a law enacted by 

21 Congress expressly in limitation of this para22 graph) that becomes effective after the acquisi23 tion by the Administration of the subject or 

24 property on, under, or with respect to which the 
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1 right or remedy arises or exists or would so 

2 arise or exist in the absence of the law; or 

3 (B) any administrative or other action that 

4 becomes effective after the acquisition. 

5 (2) STATE LAW.—The Administrator of the Ad6 ministration may conduct the business of the Ad7 ministration without regard to any qualification or 

8 law of any State relating to incorporation. 

9 (b) USE OF OTHER AGENCIES.—With the consent of 

10 a department, establishment, or instrumentality (including 

11 any field office), the Administration may— 

12 (1) use and act through any department, estab13 lishment, or instrumentality; and 

14 (2) use, and pay compensation for, information, 

15 services, facilities, and personnel of the department, 

16 establishment, or instrumentality. 

17 (c) FINANCIAL MATTERS.— 

18 (1) INVESTMENTS.—Funds of the Administra19 tion may be invested in such investments as the 

20 Board of Directors may prescribe. Earnings from 

21 such funds, other than fees collected under section 

22 189, may be spent by the Administration only to 

23 such extent or in such amounts as are provided in 

24 advance by appropriation Acts. 
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1 (2) FISCAL AGENTS.—Any Federal Reserve 

2 bank or any bank as to which at the time of the des3 ignation of the bank by the Administrator of the Ad4 ministration there is outstanding a designation by 

5 the Secretary of the Treasury as a general or other 

6 depository of public money, may be designated by 

7 the Administrator of the Administration as a deposi8 tary or custodian or as a fiscal or other agent of the 

9 Administration. 

10 (d) PERIODIC REPORTS.—Not later than 1 year after 

11 commencement of operation of the Administration and at 

12 least biannually thereafter, the Administrator of the Ad13 ministration shall submit to the Committee on Energy and 

14 Natural Resources and the Committee on Finance of the 

15 Senate and the Committee on Energy and Commerce and 

16 the Committee on Ways and Means of the House of Rep17 resentatives a report that includes a description of— 

18 (1) the technologies supported by activities of 

19 the Administration and how the activities advance 

20 the purpose stated in section 182; and 

21 (2) the performance of the Administration on 

22 meeting the goals established under section 185. 

23 (g) AUDITS BY THE COMPTROLLER GENERAL.— 

24 (1) IN GENERAL.—The programs, activities, re25 ceipts, expenditures, and financial transactions of 
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1 the Administration shall be subject to audit by the 

2 Comptroller General of the United States under 

3 such rules and regulations as may be prescribed by 

4 the Comptroller General. 

5 (2) ACCESS.—The representatives of the Gov6 ernment Accountability Office shall— 

7 (A) have access to the personnel and to all 

8 books, accounts, documents, records (including 

9 electronic records), reports, files, and all other 

10 papers, automated data, things, or property be11 longing to, under the control of, or in use by 

12 the Administration, or any agent, representa13 tive, attorney, advisor, or consultant retained by 

14 the Administration, and necessary to facilitate 

15 the audit; 

16 (B) be afforded full facilities for verifying 

17 transactions with the balances or securities held 

18 by depositories, fiscal agents, and custodians; 

19 (C) be authorized to obtain and duplicate 

20 any such books, accounts, documents, records, 

21 working papers, automated data and files, or 

22 other information relevant to the audit without 

23 cost to the Comptroller General; and 
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1 (D) have the right of access of the Comp2 troller General to such information pursuant to 

3 section 716(c) of title 31, United States Code. 

4 (3) ASSISTANCE AND COST.— 

5 (A) IN GENERAL.—For the purpose of con6 ducting an audit under this subsection, the 

7 Comptroller General may, in the discretion of 

8 the Comptroller General, employ by contract, 

9 without regard to section 3709 of the Revised 

10 Statutes (41 U.S.C. 5), professional services of 

11 firms and organizations of certified public ac12 countants for temporary periods or for special 

13 purposes. 

14 (B) REIMBURSEMENT.— 

15 (i) IN GENERAL.—On the request of 

16 the Comptroller General, the Administra17 tion shall reimburse the Government Ac18 countability Office for the full cost of any 

19 audit conducted by the Comptroller Gen20 eral under this subsection. 

21 (ii) CREDITING.—Such reimburse22 ments shall— 

23 (I) be credited to the appropria24 tion account entitled ‘‘Salaries and 

25 Expenses, Government Accountability 
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1 Office’’ at the time at which the pay2 ment is received; and 

3 (II) remain available until ex4 pended. 

5 (h) ANNUAL INDEPENDENT AUDITS.— 

6 (1) IN GENERAL.—The Administrator of the 

7 Administration shall— 

8 (A) have an annual independent audit 

9 made of the financial statements of the Admin10 istration by an independent public accountant 

11 in accordance with generally accepted auditing 

12 standards; and 

13 (B) submit to the Secretary and to the 

14 Committee on Energy and Natural Resources 

15 and the Committee on Finance of the Senate 

16 and the Committee on Energy and Commerce 

17 and the Committee on Ways and Means of the 

18 House the results of the audit. 

19 (2) CONTENT.—In conducting an audit under 

20 this subsection, the independent public accountant 

21 shall determine and report on whether the financial 

22 statements of the Administration— 

23 (A) are presented fairly in accordance with 

24 generally accepted accounting principles; and 
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1 (B) comply with any disclosure require2 ments imposed under this subtitle. 

3 (i) FINANCIAL REPORTS.— 

4 (1) IN GENERAL.—The Administrator of the 

5 Administration shall submit to the Secretary and to 

6 the Committee on Energy and Natural Resources 

7 and the Committee on Finance of the Senate and 

8 the Committee on Energy and Commerce and the 

9 Committee on Ways and Means of the House annual 

10 and quarterly reports of the financial condition and 

11 operations of the Administration, which shall be in 

12 such form, contain such information, and be sub13 mitted on such dates as the Secretary shall require. 

14 (2) CONTENTS OF ANNUAL REPORTS.—Each 

15 annual report shall include— 

16 (A) financial statements prepared in ac17 cordance with generally accepted accounting 

18 principles; 

19 (B) any supplemental information or alter20 native presentation that the Secretary may re21 quire; and 

22 (C) an assessment (as of the end of the 

23 most recent fiscal year of the Administration), 

24 signed by the chief executive officer and chief 
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1 accounting or financial officer of the Adminis2 tration, of— 

3 (i) the effectiveness of the internal 

4 control structure and procedures of the 

5 Administration; and 

6 (ii) the compliance of the Administra7 tion with applicable safety and soundness 

8 laws. 

9 (3) SPECIAL REPORTS.—The Secretary may re10 quire the Administrator of the Administration to 

11 submit other reports on the condition (including fi12 nancial condition), management, activities, or oper13 ations of the Administration, as the Secretary con14 siders appropriate. 

15 (4) ACCURACY.—Each report of financial condi16 tion shall contain a declaration by the Administrator 

17 of the Administration or any other officer designated 

18 by the Board of Directors of the Administration to 

19 make the declaration, that the report is true and 

20 correct to the best of the knowledge and belief of the 

21 officer. 

22 (5) AVAILABILITY OF REPORTS.—Reports re23 quired under this section shall be published and 

24 made publicly available as soon as is practicable 

25 after receipt by the Secretary. 
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1 (j) SPENDING SAFEGUARDS AND REPORTING.— 

2 (1) IN GENERAL.—The Administrator— 

3 (A) shall require any entity receiving fi4 nancing support from the Administration to re5 port quarterly, in a format specified by the Ad6 ministrator, on such entity’s use of such sup7 port and its progress fulfilling the objectives for 

8 which such support was granted, and the Ad9 ministrator shall make these reports available 

10 to the public; 

11 (B) may establish additional reporting and 

12 information requirements for any recipient of fi13 nancing support from the Administration; 

14 (C) shall establish appropriate mechanisms 

15 to ensure appropriate use and compliance with 

16 all terms of any financing support from the Ad17 ministration; 

18 (D) shall create and maintain a fully 

19 searchable database, accessible on the Internet 

20 (or successor protocol) at no cost to the public, 

21 that contains at least— 

22 (i) a list of each entity that has ap23 plied for financing support; 

24 (ii) a description of each application; 
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1 (iii) the status of each such applica2 tion; 

3 (iv) the name of each entity receiving 

4 financing support; 

5 (v) the purpose for which such entity 

6 is receiving such financing support; 

7 (vi) each quarterly report submitted 

8 by the entity pursuant to this section; and 

9 (vii) such other information sufficient 

10 to allow the public to understand and mon11 itor the financial support provided by the 

12 Administration; 

13 (E) shall make all financing transactions 

14 available for public inspection, including formal 

15 annual reviews by both a private auditor and 

16 the Comptroller General; and 

17 (F) shall at all times be available to receive 

18 public comment in writing on the activities of 

19 the Administration. 

20 (2) PROTECTION OF CONFIDENTIAL BUSINESS

21 INFORMATION.—To the extent necessary and appro22 priate, the Administrator may redact any informa23 tion regarding applicants and borrowers to protect 

24 confidential business information. 
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1 SEC. 191. CONFORMING AMENDMENTS. 

2 (a) TAX EXEMPT STATUS.—Subsection (l) of section 

3 501 of the Internal Revenue Code of 1986 is amended by 

4 adding at the end the following: 

5 ‘‘(4) The Clean Energy Deployment Adminis6 tration established under section 186 of the Amer7 ican Clean Energy and Security Act of 2009.’’. 

8 (b) WHOLLY OWNED GOVERNMENT CORPORA9 TION.—Paragraph (3) of section 9101 of title 31, United 

10 States Code, is amended by adding at the end the fol11 lowing: 

12 ‘‘(S) the Clean Energy Deployment Admin13 istration.’’. 

14 Subtitle J—Miscellaneous 

15 SEC. 195. INCREASED HYDROELECTRIC GENERATION AT 

16 EXISTING FEDERAL FACILITIES. 

17 (a) IN GENERAL.—The Secretary of the Interior, the 

18 Secretary of Energy, and the Secretary of the Army shall 

19 jointly update the study of the potential for increasing 

20 electric power production capability at federally owned or 

21 operated water regulation, storage, and conveyance facili22 ties required in section 1834 of the Energy Policy Act of 

23 2005. 

24 (b) CONTENT.—The update under this section shall 

25 include identification and description in detail of each fa26 cility that is capable, with or without modification, of pro-
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1 ducing additional hydroelectric power, including esti2 mation of the existing potential for the facility to generate 

3 hydroelectric power. 

4 (c) REPORT.—The Secretaries shall submit to the 

5 Committees on Energy and Commerce, Natural Re6 sources, and Transportation and Infrastructure of the 

7 House of Representatives and the Committee on Energy 

8 and Natural Resources of the Senate a report on the find9 ings, conclusions, and recommendations of the update of 

10 the study under this section by not later than 12 months 

11 after the date of enactment of this Act. The report shall 

12 include each of the following: 

13 (1) The identifications, descriptions, and esti14 mations referred to in subsection (b). 

15 (2) A description of activities currently con16 ducted or considered, or that could be considered, to 

17 produce additional hydroelectric power from each 

18 identified facility. 

19 (3) A summary of prior actions taken by the 

20 Secretaries to produce additional hydroelectric power 

21 from each identified facility. 

22 (4) The costs to install, upgrade, or modify 

23 equipment or take other actions to produce addi24 tional hydroelectric power from each identified facil-
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1 ity, and the level of Federal power customer involve2 ment in the determination of such costs. 

3 (5) The benefits that would be achieved by such 

4 installation, upgrade, modification, or other action, 

5 including quantified estimates of any additional en6 ergy or capacity from each facility identified under 

7 subsection (b). 

8 (6) A description of actions that are planned, 

9 underway, or might reasonably be considered to in10 crease hydroelectric power production by replacing 

11 turbine runners, by performing generator upgrades 

12 or rewinds, or by construction of pumped storage fa13 cilities. 

14 (7) The impact of increased hydroelectric power 

15 production on irrigation, water supply, fish, wildlife, 

16 Indian tribes, river health, water quality, navigation, 

17 recreation, fishing, and flood control. 

18 (8) Any additional recommendations to increase 

19 hydroelectric power production from, and reduce 

20 costs and improve efficiency at, federally owned or 

21 operated water regulation, storage, and conveyance 

22 facilities. 
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1 SEC. 196. CLEAN TECHNOLOGY BUSINESS COMPETITION 

2 GRANT PROGRAM. 

3 (a) IN GENERAL.—The Secretary of Energy is au4 thorized to provide grants to organizations to conduct 

5 business competitions that provide incentives, training, 

6 and mentorship to entrepreneurs, including minority7 owned and woman-owned, and early stage start-up compa8 nies throughout the United States to meet high priority 

9 economic, environmental, and energy security goals in 

10 areas to include energy efficiency, renewable energy, air 

11 quality, water quality and conservation, transportation, 

12 smart grid, green building, and waste management. Such 

13 competitions shall have the purpose of accelerating the de14 velopment and deployment of clean technology businesses 

15 and green jobs; stimulating green economic development; 

16 providing business training and mentoring to early stage 

17 clean technology companies; and strengthening the com18 petitiveness of United States clean technology industry in 

19 world trade markets. Priority shall be given to business 

20 competitions that are private sector led, encourage re21 gional and interregional cooperation, and can demonstrate 

22 market-driven practices and show the creation of cost-ef23 fective green jobs through an annual publication of com24 petition activities and directory of companies. 

25 (b) ELIGIBILITY.—An organization eligible for a 

26 grant under subsection (a) is— 
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1 (1) any organization described in section 

2 501(c)(3) of the Internal Revenue Code of 1986 and 

3 exempt from tax under section 501(a) of such Code; 

4 and 

5 (2) any sponsored entity of an organization de6 scribed in paragraph (1) that is operated as a non7 profit entity. 

8 (c) PRIORITY.—In making grants under this section, 

9 the Secretary shall give priority to those organizations 

10 that can demonstrate broad funding support from private 

11 and other non-Federal funding sources to leverage Federal 

12 investment. 

13 (d) AUTHORIZATION OF APPROPRIATIONS.—For the 

14 purpose of carrying out this section, there are authorized 

15 to be appropriated $20,000,000. 

16 SEC. 197. NATIONAL BIOENERGY PARTNERSHIP. 

17 (a) IN GENERAL.—The Secretary of Energy shall es18 tablish a National Bioenergy Partnership to provide co19 ordination among programs of State governments, the 

20 Federal Government, and the private sector that support 

21 the institutional and physical infrastructure necessary to 

22 promote the deployment of sustainable biomass fuels and 

23 bioenergy technologies for the United States. 

24 (b) PROGRAM.—The National Bioenergy Partnership 

25 shall consist of five regions, to be administered by the 
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1 CONEG Policy Research Center, the Council of Great 

2 Lakes Governors, the Southern States Energy Board, the 

3 Western Governors Association, and the Pacific Regional 

4 Biomass Energy Partnership led by the Washington State 

5 University Energy Program. 

6 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

7 are authorized to be appropriated for each of fiscal years 

8 2010 through 2014 to carry out this section— 

9 (1) $5,000,000, to be allocated among the 5 re10 gions described in subsection (b) on the basis of the 

11 number of States in each region, for distribution 

12 among the member States of that region based on 

13 procedures developed by the member States of the 

14 region; and 

15 (2) $2,500,000, to be allocated equally among 

16 the 5 regions described in subsection (b) for region17 wide activities, including technical assistance and re18 gional studies and coordination. 

19 SEC. 198. OFFICE OF CONSUMER ADVOCACY. 

20 Section 319 of the Federal Power Act is amended to 

21 read as follows: 

22 ‘‘SEC. 319. OFFICE OF CONSUMER ADVOCACY. 

23 ‘‘(a) OFFICE.— 

24 ‘‘(1) ESTABLISHMENT.—There is established 

25 within the Commission an Office of Consumer Advo-
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1 cacy to serve as an advocate for the public interest. 

2 The Office of Administrative Litigation within the 

3 Commission shall be incorporated into the Office of 

4 Consumer Advocacy. 

5 ‘‘(2) DIRECTOR.—The Office shall be headed by 

6 a Director to be appointed by the President by and 

7 with the advice and consent of the Senate from 

8 among individuals who are licensed attorneys admit9 ted to the Bar of any State or of the District of Co10 lumbia and who have experience in public utility pro11 ceedings. 

12 ‘‘(3) DUTIES.—The Office may— 

13 ‘‘(A) represent the interests of energy cus14 tomers— 

15 ‘‘(i) on matters before the Commission 

16 concerning rates or service of public utili17 ties and natural gas companies under the 

18 jurisdiction of the Commission; 

19 ‘‘(ii) as amicus curiae, in the review in 

20 the courts of the United States of rulings 

21 by the Commission in such matters; and 

22 ‘‘(iii) as amicus, in hearings and pro23 ceedings in other Federal regulatory agen24 cies and commissions related to such mat25 ters; 
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1 ‘‘(B) monitor and review energy customer 

2 complaints and grievances on matters con3 cerning rates or service of public utilities and 

4 natural gas companies under the jurisdiction of 

5 the Commission; 

6 ‘‘(C) investigate independently, or within 

7 the context of formal proceedings, the services 

8 provided by, the rates charged by, and the valu9 ation of the properties of, public utilities and 

10 natural gas companies under the jurisdiction of 

11 the Commission; 

12 ‘‘(D) develop means, such as public dis13 semination of information, consultative services, 

14 and technical assistance, to ensure, to the max15 imum extent practicable, that the interests of 

16 energy consumers are adequately represented in 

17 the course of any hearing or proceeding de18 scribed in subparagraph (A); 

19 ‘‘(E) collect data concerning rates or serv20 ice of public utilities and natural gas companies 

21 under the jurisdiction of the Commission; and 

22 ‘‘(F) prepare and issue reports and rec23 ommendations. 
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1 ‘‘(4) COMPENSATION AND POWERS.—The Di2 rector shall be compensated at Level IV of the Exec3 utive Schedule. The Director may— 

4 ‘‘(A) employ not more than 25 full-time 

5 professional employees at appropriate levels in 

6 the GS Scale and such additional support per7 sonnel as required; and 

8 ‘‘(B) procure temporary and intermittent 

9 services as needed. 

10 ‘‘(5) INFORMATION FROM OTHER FEDERAL

11 AGENCIES.—The Director may request, from any de12 partment, agency, or instrumentality of the United 

13 States such information as he deems necessary to 

14 carry out his functions under this section. Upon 

15 such request, the head of the department, agency, or 

16 instrumentality concerned shall, to the extent prac17 ticable and authorized by law, provide such informa18 tion to the Office. 

19 ‘‘(b) CONSUMER ADVOCACY ADVISORY COM20 MITTEE.— 

21 ‘‘(1) ESTABLISHMENT.—The Director shall es22 tablish an advisory committee to be known as Con23 sumer Advocacy Advisory Committee (in this section 

24 referred to as the ‘Advisory Committee’) to review 
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1 rates, services, and disputes and to make rec2 ommendations to the Director. 

3 ‘‘(2) COMPOSITION.—The Director shall ap4 point 5 members to the Advisory Committee includ5 ing— 

6 ‘‘(A) 2 individuals representing State util7 ity consumer advocates; and 

8 ‘‘(B) 1 individual, from a nongovernmental 

9 organization representing consumers. 

10 ‘‘(3) MEETINGS.—The Advisory Committee 

11 shall meet at such frequency as may be required to 

12 carry out its duties. 

13 ‘‘(4) REPORTS.—The Director shall provide for 

14 the publication of recommendations of the Advisory 

15 Committee on the public website established for the 

16 Office. 

17 ‘‘(5) DURATION.—Notwithstanding any other 

18 provision of law, the Advisory Committee shall con19 tinue in operation during the period for which the 

20 Office exists. 

21 ‘‘(c) DEFINITIONS.— 

22 ‘‘(1) ENERGY CUSTOMER.—The term ‘energy 

23 customer’ means a residential customer or a small 

24 commercial customer that receives products or serv25 ices directly or indirectly from a public utility or 
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1 natural gas company under the jurisdiction of the 

2 Commission. 

3 ‘‘(2) NATURAL GAS COMPANY.—The term ‘nat4 ural gas company’ has the meaning given the term 

5 in section 2 of the Natural Gas Act (15 U.S.C. 

6 717a), as modified by section 601(a) of the Natural 

7 Gas Policy Act of 1978 (15 U.S.C. 3431(a)). 

8 ‘‘(3) OFFICE.—The term ‘Office’ means the Of9 fice of Consumer Advocacy established under this 

10 section. 

11 ‘‘(4) PUBLIC UTILITY.—The term ‘public util12 ity’ has the meaning given the term in section 

13 201(e) of this Act. 

14 ‘‘(5) SMALL COMMERCIAL CUSTOMER.—The 

15 term ‘small commercial customer’ means a commer16 cial customer that has a peak demand of not more 

17 than 1,000 kilowatts per hour. 

18 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 

19 are authorized to be appropriated such sums as necessary 

20 to carry out this section. 

21 ‘‘(e) SAVINGS CLAUSE.—Nothing in this section af22 fects the rights or obligations of any State utility con23 sumer advocate.’’. 
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1 SEC. 199. DEVELOPMENT CORPORATION FOR RENEWABLE 

2 POWER BORROWING AUTHORITY. 

3 (a) DETERMINATION.—No later than 6 months after 

4 the date of enactment of this Act, the Secretary of Energy, 

5 in coordination with the Secretary of Commerce, shall— 

6 (1) determine any geographic area within the 

7 contiguous United States that lacks a Federal power 

8 marketing agency; 

9 (2) develop a plan or criteria for the geographic 

10 areas identified in paragraph (1) regarding invest11 ment in renewable energy and associated infrastruc12 ture within an area identified in paragraph (1); and 

13 (3) identify any Federal agency within an area 

14 in paragraph (1) that has, or could develop, the abil15 ity to facilitate the investment in paragraph (2). 

16 (b) REPORT.—The Secretary of Energy, in coordina17 tion with the Secretary of Commerce, shall provide the de18 terminations made under subsection (a) to the Committee 

19 on Energy and Commerce of the House of Representa20 tives. 

21 (c) ESTABLISHMENT.—Based upon the determina22 tions made pursuant to subsection (a), the Secretary of 

23 Energy, in coordination with the Secretary of Commerce, 

24 shall recommend to the Committee on Energy and Com25 merce of the House of Representatives the establishment 

26 of any new Federal lending authority, including authoriza-
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1 tion of additional lending authority for existing Federal 

2 agencies, not to exceed $3,500,000,000 per geographic 

3 area identified in subsection (a)(1). 

4 (d) AUTHORIZATION.—$25,000,000 is authorized to 

5 be appropriated for fiscal year 2010 to carry out the provi6 sions of this section. 

7 SEC. 199A. STUDY. 

8 Not later than February 1, 2011, the Secretary of 

9 Energy shall transmit to the Congress a report showing 

10 the results of a study on the use of thorium-fueled nuclear 

11 reactors for national energy needs. Such report shall in12 clude a response to the International Atomic Energy 

13 Agency study entitled ‘‘Thorium fuel cycle - Potential ben14 efits and challenges’’ (IAEA–TECDOC–1450). 

15 TITLE II—ENERGY EFFICIENCY 

16 Subtitle A—Building Energy 

17 Efficiency Programs 

18 SEC. 201. GREATER ENERGY EFFICIENCY IN BUILDING 

19 CODES. 

20 Section 304 of the Energy Conservation and Produc21 tion Act (42 U.S.C. 6833) is amended to read as follows: 

22 ‘‘SEC. 304. GREATER ENERGY EFFICIENCY IN BUILDING 

23 CODES. 

24 ‘‘(a) ENERGY EFFICIENCY TARGETS.— 
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1 ‘‘(1) IN GENERAL.—Except as provided in para2 graph (2) or (3), the national building code energy 

3 efficiency target for the national average percentage 

4 improvement of a building’s energy performance 

5 when built to a code meeting the target shall be— 

6 ‘‘(A) effective on the date of enactment of 

7 the American Clean Energy and Security Act of 

8 2009, 30 percent reduction in energy use rel9 ative to a comparable building constructed in 

10 compliance with the baseline code; 

11 ‘‘(B) effective January 1, 2014, for resi12 dential buildings, and January 1, 2015, for 

13 commercial buildings, 50 percent reduction in 

14 energy use relative to the baseline code; and 

15 ‘‘(C) effective January 1, 2017, for resi16 dential buildings, and January 1, 2018, for 

17 commercial buildings, and every 3 years there18 after, respectively, through January 1, 2029, 

19 and January 1, 2030, 5 percent additional re20 duction in energy use relative to the baseline 

21 code. 

22 ‘‘(2) CONSENSUS-BASED CODES.—If on any ef23 fective date specified in paragraph (1)(A), (B), or 

24 (C) a successor code to the baseline codes provides 

25 for greater reduction in energy use than is required 
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1 under paragraph (1), the overall percentage reduc2 tion in energy use provided by that successor code 

3 shall be the national building code energy efficiency 

4 target. 

5 ‘‘(3) TARGETS ESTABLISHED BY SECRETARY.— 

6 The Secretary may by rule establish a national 

7 building code energy efficiency target for residential 

8 or commercial buildings achieving greater reductions 

9 in energy use than the targets prescribed in para10 graph (1) or (2) if the Secretary determines that 

11 such greater reductions in energy use can be 

12 achieved with a code that is life cycle cost-justified 

13 and technically feasible. The Secretary may by rule 

14 establish a national building code energy efficiency 

15 target for residential or commercial buildings achiev16 ing a reduction in energy use that is greater than 

17 zero but less than the targets prescribed in para18 graph (1) or (2) if the Secretary determines that 

19 such lesser target is the maximum reduction in en20 ergy use that can be achieved through a code that 

21 is life cycle cost-justified and technically feasible. 

22 ‘‘(4) ADDITIONAL REDUCTIONS IN ENERGY

23 USE.—Effective on January 1, 2033, and once every 

24 3 years thereafter, the Secretary shall determine, 

25 after notice and opportunity for comment, whether 
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1 further energy efficiency building code improvements 

2 for residential or commercial buildings, respectively, 

3 are life cycle cost-justified and technically feasible, 

4 and shall establish updated national building code 

5 energy efficiency targets that meet such criteria. 

6 ‘‘(5) ZERO-NET-ENERGY BUILDINGS.—In set7 ting targets under this subsection, the Secretary 

8 shall consider ways to support the deployment of 

9 distributed renewable energy technology, and shall 

10 seek to achieve the goal of zero-net-energy commer11 cial buildings established in section 422 of the En12 ergy Independence and Security Act of 2007 (42 

13 U.S.C. 17082). 

14 ‘‘(6) BASELINE CODE.—For purposes of this 

15 section, the term ‘baseline code’ means— 

16 ‘‘(A) for residential buildings, the 2006 

17 International Energy Conservation Code 

18 (IECC) published by the International Code 

19 Council (ICC); and 

20 ‘‘(B) for commercial buildings, the code 

21 published in ASHRAE Standard 90.1–2004. 

22 ‘‘(7) CONSULTATION.—In establishing the tar23 gets required by this section, the Secretary shall 

24 consult with the Director of the National Institute of 

25 Standards and Technology. 
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1 ‘‘(b) NATIONAL ENERGY EFFICIENCY BUILDING

2 CODES.— 

3 ‘‘(1) REQUIREMENT.— 

4 ‘‘(A) IN GENERAL.—There shall be estab5 lished national energy efficiency building codes 

6 under this subsection, for residential and com7 mercial buildings, sufficient to meet each of the 

8 national building code energy efficiency targets 

9 established under subsection (a), not later than 

10 the date that is 1 year after the deadline for es11 tablishment of each such target, except that the 

12 national energy efficiency building code estab13 lished to meet the target described in subsection 

14 (a)(1)(A) shall be established by not later than 

15 15 months after the effective date of that tar16 get. 

17 ‘‘(B) EXISTING CODE.—If the Secretary 

18 finds prior to the date provided in subpara19 graph (A) for establishing a national code for 

20 any target that one or more energy efficiency 

21 building codes published by a recognized devel22 oper of national energy codes and standards 

23 meet or exceed the established target, the Sec24 retary shall select the code that meets the tar25 get with the highest efficiency in the most cost- 
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1 effective manner, and such code shall be the na2 tional energy efficiency building code. 

3 ‘‘(C) REQUIREMENT TO ESTABLISH

4 CODE.—If the Secretary does not make a find5 ing under subparagraph (B), the national en6 ergy efficiency building code shall be established 

7 by rule by the Secretary under paragraph (2). 

8 ‘‘(2) ESTABLISHMENT BY SECRETARY.— 

9 ‘‘(A) PROCEDURE.—In order to establish a 

10 national energy efficiency building code as re11 quired under paragraph (1)(C), the Secretary 

12 shall— 

13 ‘‘(i) not later than 6 months prior to 

14 the effective date for each target, review 

15 existing and proposed codes published or 

16 under review by recognized developers of 

17 national energy codes and standards; 

18 ‘‘(ii) determine the percentage of en19 ergy efficiency improvements that are or 

20 would be achieved in such published or 

21 proposed code versions relative to the tar22 get; 

23 ‘‘(iii) propose improvements to such 

24 published or proposed code versions suffi25 cient to meet or exceed the target; and 
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1 ‘‘(iv) unless a finding is made under 

2 paragraph (1)(B) with respect to a code 

3 published by a recognized developer of na4 tional energy codes and standards, adopt a 

5 code that meets or exceeds the relevant na6 tional building code energy efficiency tar7 get by not later than 1 year after the effec8 tive date of each such target, and by not 

9 later than 15 months after the target is es10 tablished under subsection (a)(1)(A). 

11 ‘‘(B) CALCULATIONS.—Each national en12 ergy efficiency building code established by the 

13 Secretary under this paragraph shall be set at 

14 the maximum level the Secretary determines is 

15 life cycle cost-justified and technically feasible, 

16 in accordance with the following: 

17 ‘‘(i) SAVINGS CALCULATIONS.—Cal18 culations of energy savings shall take into 

19 account the typical lifetimes of different 

20 products, measures, and system configura21 tions. 

22 ‘‘(ii) COST-EFFECTIVENESS CALCULA23 TIONS.—Calculations of life cycle cost-ef24 fectiveness shall be based on life cycle cost 

25 methods and procedures under section 544 
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1 of the National Energy Conservation Pol2 icy Act (42 U.S.C. 8254), but shall incor3 porate to the extent feasible externalities 

4 such as impacts on climate change and on 

5 peak energy demand that are not already 

6 incorporated in assumed energy costs. 

7 ‘‘(C) CONSIDERATIONS.—In developing a 

8 national energy efficiency building code under 

9 this paragraph, the Secretary shall consider— 

10 ‘‘(i) for residential national energy ef11 ficiency building codes— 

12 ‘‘(I) residential building stand13 ards published or proposed by 

14 ASHRAE; 

15 ‘‘(II) building codes published or 

16 proposed by the International Code 

17 Council (ICC); 

18 ‘‘(III) data from the Residential 

19 Energy Services Network (RESNET) 

20 on compliance measures utilized by 

21 consumers to qualify for the residen22 tial energy efficiency tax credits estab23 lished under the Energy Policy Act of 

24 2005; 
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1 ‘‘(IV) data and information from 

2 the Department of Energy’s Building 

3 America Program; 

4 ‘‘(V) data and information from 

5 the Energy Star New Homes pro6 gram; 

7 ‘‘(VI) data and information from 

8 the New Building Institute and simi9 lar organizations; and 

10 ‘‘(VII) standards for practices 

11 and materials to achieve cool roofs in 

12 residential buildings, taking into con13 sideration reduced air conditioning en14 ergy use as a function of cool roofs, 

15 the potential reduction in global 

16 warming from increased solar reflec17 tance from buildings, and cool roofs 

18 criteria in State and local building 

19 codes and in national and local vol20 untary programs, without reduction of 

21 otherwise applicable ceiling insulation 

22 standards; and 

23 ‘‘(ii) for commercial national energy 

24 efficiency building codes— 
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1 ‘‘(I) commercial building stand2 ards proposed by ASHRAE; 

3 ‘‘(II) building codes proposed by 

4 the International Code Council (ICC); 

5 ‘‘(III) the Core Performance Cri6 teria published by the New Buildings 

7 Institute; 

8 ‘‘(IV) data and information de9 veloped by the Director of the Com10 mercial High-Performance Green 

11 Building Office of the Department of 

12 Energy and any public-private part13 nerships established under that Office; 

14 ‘‘(V) data and information from 

15 the Energy Star for Buildings pro16 gram; 

17 ‘‘(VI) data and information from 

18 the New Building Institute, 

19 RESNET, and similar organizations; 

20 and 

21 ‘‘(VII) standards for practices 

22 and materials to achieve cool roofs in 

23 commercial buildings, taking into con24 sideration reduced air conditioning en25 ergy use as a function of cool roofs, 
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1 the potential reduction in global 

2 warming from increased solar reflec3 tance from buildings, and cool roofs 

4 criteria in State and local building 

5 codes and in national and local vol6 untary programs, without reduction of 

7 otherwise applicable ceiling insulation 

8 standards. 

9 ‘‘(D) CONSULTATION.—In establishing any 

10 national energy efficiency building code re11 quired by this section, the Secretary shall con12 sult with the Director of the National Institute 

13 of Standards and Technology. 

14 ‘‘(3) CONSENSUS STANDARD ASSISTANCE.—(A) 

15 To support the development of consensus standards 

16 that may provide the basis for national energy effi17 ciency building codes, minimize duplication of effort, 

18 encourage progress through consensus, and facilitate 

19 the development of greater building efficiency, the 

20 Secretary shall provide assistance to recognized de21 velopers of national energy codes and standards to 

22 develop, and where the relevant code has been adopt23 ed as the national code, disseminate consensus based 

24 energy efficiency building codes as provided in this 

25 paragraph. 
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1 ‘‘(B) Upon a finding by the Secretary that a 

2 code developed by such a developer meets a target 

3 established under subsection (a), the Secretary 

4 shall— 

5 ‘‘(i) send notice of the Secretary’s finding 

6 to all duly authorized or appointed State, tribal, 

7 and local code agencies; and 

8 ‘‘(ii) provide sufficient support to such a 

9 developer to make the code available on the 

10 Internet, or to accomplish distribution of such 

11 code to all such State, tribal, and local code 

12 agencies at no cost to the State, tribal, and 

13 local code agencies. 

14 ‘‘(C) The Secretary may contract with such a 

15 developer and with other organizations with exper16 tise on codes to provide training for State, tribal, 

17 and local code officials and building inspectors in the 

18 implementation and enforcement of such code. 

19 ‘‘(D) The Secretary may provide grants and 

20 other support to such a developer to— 

21 ‘‘(i) develop appropriate refinements to 

22 such code; and 

23 ‘‘(ii) support analysis of options for im24 provements in the code to meet the next sched25 uled target. 
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1 ‘‘(4) CODE DEVELOPED BY SECRETARY.—If the 

2 Secretary establishes a national energy efficiency 

3 building code under paragraph (2), the Secretary 

4 shall— 

5 ‘‘(A) to the extent that such code is based 

6 on a prior code developed by a recognized devel7 oper of national energy codes and standards, 

8 negotiate and provide appropriate compensation 

9 to such developer for the use of the code mate10 rials that remain in the code established by the 

11 Secretary; and 

12 ‘‘(B) disseminate the national energy effi13 ciency building codes to State, tribal, and local 

14 code officials, and support training and provide 

15 guidance and technical assistance to such offi16 cials as appropriate. 

17 ‘‘(c) STATE ADOPTION OF ENERGY EFFICIENCY

18 BUILDING CODES.— 

19 ‘‘(1) REQUIREMENT.—Not later than 1 year 

20 after a national energy efficiency building code for 

21 residential or commercial buildings is established or 

22 revised under subsection (b), each State— 

23 ‘‘(A) shall— 

24 ‘‘(i) review and update the provisions 

25 of its building code regarding energy effi-
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1 ciency to meet or exceed the target met in 

2 the new national energy efficiency building 

3 code, to achieve equivalent or greater en4 ergy savings; 

5 ‘‘(ii) document, where local govern6 ments establish building codes, that local 

7 governments representing not less than 80 

8 percent of the State’s urban population 

9 have adopted the new national code, or 

10 have adopted local codes that meet or ex11 ceed the target met in the new national 

12 code to achieve equivalent or greater en13 ergy savings; or 

14 ‘‘(iii) adopt the new national code; 

15 and 

16 ‘‘(B) shall provide a certification to the 

17 Secretary demonstrating that energy efficiency 

18 building code provisions that apply pursuant to 

19 subparagraph (A) in that State meet or exceed 

20 the target met by the new national code, to 

21 achieve equivalent or greater energy savings. 

22 ‘‘(2) CONFIRMATION.— 

23 ‘‘(A) REQUIREMENT.—Not later than 90 

24 days after a State certification is provided 

25 under paragraph (1)(B), the Secretary shall de-
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1 termine whether the State’s energy efficiency 

2 building code provisions meet the requirements 

3 of this subsection. 

4 ‘‘(B) ACCEPTANCE BY SECRETARY.—If the 

5 Secretary determines under subparagraph (A) 

6 that the State’s energy efficiency building code 

7 or codes meet the requirements of this sub8 section, the Secretary shall accept the certifi9 cation. 

10 ‘‘(C) DEFICIENCY NOTICE.—If the Sec11 retary determines under subparagraph (A) that 

12 the State’s building code or codes do not meet 

13 the requirements of this subsection, the Sec14 retary shall identify the deficiency in meeting 

15 the national building code energy efficiency tar16 get, and, to the extent possible, indicate areas 

17 where further improvement in the State’s code 

18 provisions would allow the deficiency to be 

19 eliminated. 

20 ‘‘(D) REVISION OF CODE AND RECERTIFI21 CATION.—A State may revise its code or codes 

22 and submit a recertification under paragraph 

23 (1)(B) to the Secretary at any time. 

24 ‘‘(3) COMPLIANT CODE.—For the purposes of 

25 meeting the target described in subsection (a)(1)(A) 
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1 for residential buildings, a State that adopts the 

2 code represented in California’s Title 24-2009 by the 

3 date 27 months after the date of enactment of the 

4 American Clean Energy and Security Act of 2009 

5 shall be considered to have met the requirements of 

6 this subsection for the applicable period. 

7 ‘‘(d) APPLICATION OF NATIONAL CODE TO STATE

8 AND LOCAL JURISDICTIONS.— 

9 ‘‘(1) IN GENERAL.—Upon the expiration of 18 

10 months after a national energy efficiency building 

11 code is established under subsection (b), in any ju12 risdiction where the State has not had a certification 

13 relating to that code accepted by the Secretary 

14 under subsection (c)(2)(B), and the local govern15 ment has not had a certification relating to that 

16 code accepted by the Secretary under subsection 

17 (e)(5), the national energy efficiency building code 

18 shall become the applicable energy efficiency build19 ing code for such jurisdiction. 

20 ‘‘(2) CONFLICTS.—In the event of a conflict be21 tween a provision of the national energy efficiency 

22 building code and a provision of other applicable en23 ergy codes, the national energy efficiency building 

24 code shall apply. If there is a conflict between a pro25 vision of the national energy efficiency building code 
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1 and a provision of any applicable fire code, life safe2 ty code, egress code, or accessibility code, the Sec3 retary shall take appropriate actions to resolve such 

4 conflict in a manner that does not compromise the 

5 objectives of such codes. 

6 ‘‘(3) STATE LEGISLATIVE ADOPTION.—In a 

7 State in which the relevant building energy code is 

8 adopted legislatively, the deadline in paragraph (1) 

9 shall not be earlier than 1 year after the first day 

10 that the legislature meets following establishment of 

11 a national energy efficiency building code. 

12 ‘‘(4) NOTICE OF INTENT TO ENFORCE.—A 

13 State or locality that enforces building codes may as14 sume responsibility for enforcing the national energy 

15 efficiency building code by notifying the Secretary to 

16 that effect not later than three months after the 

17 date established under paragraph (1). 

18 ‘‘(5) VIOLATIONS.—Violations of this section 

19 shall be defined as follows: 

20 ‘‘(A) If the building is subject to the re21 quirements of a State energy efficiency building 

22 code with respect to which a certification has 

23 been accepted by the Secretary under sub24 section (c)(2)(B) or a local energy efficiency 

25 building code with respect to which a certifi-
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1 cation has been accepted by the Secretary pur2 suant to subsection (e)(5), or the requirements 

3 of the national energy efficiency building code 

4 in a State where the State or locality has noti5 fied the Secretary of its intent to enforce the 

6 provisions of the national energy efficiency 

7 building code, a violation shall be determined 

8 pursuant to the relevant provisions of State or 

9 local law. 

10 ‘‘(B) If the building is subject to the re11 quirements of a national energy efficiency build12 ing code made applicable under paragraph (1) 

13 of this subsection, except as provided in sub14 paragraph (A), a violation shall be defined by 

15 the Secretary pursuant to subsection (g). 

16 ‘‘(e) STATE ENFORCEMENT OF ENERGY EFFICIENCY

17 BUILDING CODES.— 

18 ‘‘(1) IN GENERAL.—Each State, or where appli19 cable under State law each local government, shall 

20 implement and enforce applicable State or local 

21 codes with respect to which a certification was ac22 cepted by the Secretary under subsection (c)(2)(B) 

23 or paragraph (5) of this subsection, or the national 

24 energy efficiency building codes, as provided in this 

25 subsection. 
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1 ‘‘(2) STATE CERTIFICATION.—Not later than 2 

2 years after the date of a certification under sub3 section (c)(1) or the application of a national energy 

4 efficiency building code under subsection (d)(1), 

5 each State shall certify that it has— 

6 ‘‘(A) achieved compliance with— 

7 ‘‘(i) State codes, or, as provided under 

8 State law, local codes, with respect to 

9 which a certification was accepted by the 

10 Secretary under subsection (c)(2)(B); or 

11 ‘‘(ii) the national energy efficiency 

12 building code, as applicable; or 

13 ‘‘(B) for any certification submitted within 

14 7 years after the date of enactment of the 

15 American Clean Energy and Security Act of 

16 2009, made significant progress toward achiev17 ing such compliance. 

18 ‘‘(3) ACHIEVING COMPLIANCE.—A State shall 

19 be considered to achieve compliance with a code de20 scribed in paragraph (2)(A) if at least 90 percent of 

21 new and substantially renovated building space in 

22 that State in the preceding year upon inspection 

23 meets the requirements of the code. A certification 

24 under paragraph (2) shall include documentation of 

25 the rate of compliance based on— 
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1 ‘‘(A) independent inspections of a random 

2 sample of the new and substantially renovated 

3 buildings covered by the code in the preceding 

4 year; or 

5 ‘‘(B) an alternative method that yields an 

6 accurate measure of compliance as determined 

7 by the Secretary. 

8 ‘‘(4) SIGNIFICANT PROGRESS.—A State shall be 

9 considered to have made significant progress toward 

10 achieving compliance with a code described in para11 graph (2)(A) if— 

12 ‘‘(A) the State has developed a plan, in13 cluding for hiring enforcement staff, providing 

14 training, providing manuals and checklists, and 

15 instituting enforcement programs, designed to 

16 achieve full compliance within 5 years after the 

17 date of the adoption of the code; 

18 ‘‘(B) the State is taking significant, timely, 

19 and measurable action to implement that plan; 

20 ‘‘(C) the State has not reduced its expendi21 tures for code enforcement; and 

22 ‘‘(D) at least 50 percent of new and sub23 stantially renovated building space in the State 

24 in the preceding year upon inspection meets the 

25 requirements of the code. 
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1 ‘‘(5) SECRETARY’S DETERMINATION.—Not later 

2 than 90 days after a State certification under para3 graph (2), the Secretary shall determine whether the 

4 State has demonstrated that it has complied with 

5 the requirements of this subsection, including accu6 rate measurement of compliance, or that it has made 

7 significant progress toward compliance. If such de8 termination is positive, the Secretary shall accept 

9 the certification. If the determination is negative, 

10 the Secretary shall identify the areas of deficiency. 

11 ‘‘(6) OUT OF COMPLIANCE.— 

12 ‘‘(A) IN GENERAL.—Any State for which 

13 the Secretary has not accepted a certification 

14 under paragraph (5) by the dates specified in 

15 paragraph (2) is out of compliance with this 

16 section. 

17 ‘‘(B) LOCAL COMPLIANCE.—In any State 

18 that is out of compliance with this section as 

19 provided in subparagraph (A), a local govern20 ment may be in compliance with this section by 

21 meeting all certification requirements of this 

22 subsection. 

23 ‘‘(C) NONCOMPLIANCE.—Any State that is 

24 not in compliance with this section, as provided 
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1 in subparagraph (A), shall, until the State re2 gains such compliance, be ineligible to receive— 

3 ‘‘(i) emission allowances pursuant to 

4 subsection (h)(1); 

5 ‘‘(ii) Federal funding in excess of that 

6 State’s share (calculated according to the 

7 allocation formula in section 363 of the 

8 Energy Policy and Conservation Act (42 

9 U.S.C. 6323)) of $125,000,000 each year; 

10 and 

11 ‘‘(iii) for— 

12 ‘‘(I) the first year for which the 

13 State is out of compliance, 25 percent 

14 of any additional funding or other 

15 items of monetary value otherwise 

16 provided under the American Clean 

17 Energy and Security Act of 2009; 

18 ‘‘(II) the second year for which 

19 the State is out of compliance, 50 per20 cent of any additional funding or 

21 other items of monetary value other22 wise provided under the American 

23 Clean Energy and Security Act of 

24 2009; 
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1 ‘‘(III) the third year for which 

2 the State is out of compliance, 75 per3 cent of any additional funding or 

4 other items of monetary value other5 wise provided under the American 

6 Clean Energy and Security Act of 

7 2009; and 

8 ‘‘(IV) the fourth and subsequent 

9 years for which the State is out of 

10 compliance, 100 percent of any addi11 tional funding or other items of mone12 tary value otherwise provided under 

13 the American Clean Energy and Secu14 rity Act of 2009. 

15 ‘‘(f) FEDERAL ENFORCEMENT AND TRAINING.— 

16 Where a State fails and local governments in that State 

17 also fail to enforce the applicable State or national energy 

18 efficiency building codes, the Secretary shall enforce such 

19 codes, as follows: 

20 ‘‘(1) The Secretary shall establish, by rule, 

21 within 2 years after the date of enactment of the 

22 American Clean Energy and Security Act of 2009, 

23 an energy efficiency building code enforcement capa24 bility. 
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1 ‘‘(2) Such enforcement capability shall be de2 signed to achieve 90 percent compliance with such 

3 code in any State within 1 year after the date of the 

4 Secretary’s determination that such State is out of 

5 compliance with this section. 

6 ‘‘(3) The Secretary may set and collect reason7 able inspection fees to cover the costs of inspections 

8 required for such enforcement. Revenue from fees 

9 collected shall be available to the Secretary to carry 

10 out the requirements of this section upon appropria11 tion. 

12 ‘‘(4) In any jurisdiction to which this subsection 

13 applies, the Secretary shall coordinate enforcement 

14 of the national energy efficiency building code with 

15 State and local code enforcement of other building 

16 codes. 

17 ‘‘(5) In any jurisdiction to which this subsection 

18 applies, the Secretary shall enhance compliance by 

19 conducting training and education of builders and 

20 other professionals in the jurisdiction concerning the 

21 national energy efficiency building code. 

22 ‘‘(6) The Secretary shall coordinate with profes23 sional organizations representing code officials, ar24 chitects, engineers, builders, and other experts to de-
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1 velop training curricula concerning the national en2 ergy efficiency building code. 

3 ‘‘(7) If the Secretary enforces such codes under 

4 this subsection, the Secretary may, as appropriate, 

5 redefine violations of such codes. 

6 ‘‘(g) ENFORCEMENT PROCEDURES.—The Secretary 

7 shall propose and, not later than 3 years after the date 

8 of enactment of the American Clean Energy and Security 

9 Act of 2009, shall define by rule violations of the energy 

10 efficiency building codes to be enforced by the Secretary 

11 pursuant to this section, and the penalties that shall apply 

12 to violators, in any jurisdiction in which the national en13 ergy efficiency building code has been made applicable 

14 under subsection (d)(1). To the extent that the Secretary 

15 determines that the authority to adopt and impose such 

16 violations and penalties by rule requires further statutory 

17 authority, the Secretary shall report such determination 

18 to Congress as soon as such determination is made, but 

19 not later than 1 year after the enactment of the American 

20 Clean Energy and Security Act of 2009. 

21 ‘‘(h) FEDERAL SUPPORT.— 

22 ‘‘(1) ALLOWANCE ALLOCATION FOR STATE

23 COMPLIANCE.—For each vintage year from 2012 

24 through 2050, the Administrator shall distribute al25 lowances allocated pursuant to section 782(g)(2) of 
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1 the Clean Air Act to the SEED Account for each 

2 State. Such allowances shall be distributed according 

3 to a formula established by the Secretary as follows: 

4 ‘‘(A) One-fifth in an equal amount to each 

5 of the 50 States and United States territories. 

6 ‘‘(B) Two-fifths as a function of the rel7 ative energy use in all buildings in each State 

8 in the most recent year for which data is avail9 able. 

10 ‘‘(C) Two-fifths based on the number of 

11 building construction starts recorded in each 

12 State, the number of new building permits ap13 plied for in each State, or other relevant avail14 able data indicating building activity in each 

15 State, in the judgment of the Secretary, for the 

16 year prior to the year of the distribution. 

17 ‘‘(2) ALLOWANCE ALLOCATION TO LOCAL GOV18 ERNMENTS.—In the instance that the Secretary cer19 tifies that one or more local governments are in com20 pliance with this section pursuant to subsection 

21 (e)(6)(B), the Administrator shall provide to each 

22 such local government the portion of the emission al23 lowances that would have been provided to that 

24 State as a function of the population of that locality 
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1 as a proportion of the population of that State as a 

2 whole. 

3 ‘‘(3) UNALLOCATED ALLOWANCES.—To the ex4 tent that allowances are not provided to State or 

5 local governments for lack of certification in any 

6 year, those allowances shall be added to the amount 

7 provided to those States and local governments that 

8 are certified as eligible in that year. 

9 ‘‘(4) USE OF ALLOWANCES.—Each State or 

10 each local government shall use such emission allow11 ances as it receives pursuant to this section exclu12 sively for the purposes of this section, including cov13 ering a reasonable portion of the costs of the devel14 opment, adoption, implementation, and enforcement 

15 of a State or local energy efficiency building code 

16 that meets the national building code energy effi17 ciency targets, or the national energy efficiency 

18 building code. In a State where local governments 

19 provide substantially all building code enforcement, 

20 a minimum of 50 percent of the allowance value re21 ceived pursuant to this section shall be distributed to 

22 local governments as a function of the relative popu23 lations of such localities. In a State where local and 

24 State governments share building code enforcement 

25 duties, the State and local shares of allowance value 
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1 required for enforcement shall be allocated in pro2 portion to the number of building inspections per3 formed by each level of government, and the share 

4 for local governments shall be distributed as a func5 tion of the relative populations of such localities. 

6 States shall further ensure that the allowance value 

7 made available pursuant to section 782 of the Clean 

8 Air Act and section 132 of the American Clean En9 ergy and Security Act of 2009 is provided to the ap10 plicable State or local governmental entities as nec11 essary to adopt and implement energy efficiency 

12 building codes, provide training for inspectors, en13 sure compliance, and provide such other functions as 

14 necessary. Actions taken by local authorities pursu15 ant to this section shall constitute an acceptable use 

16 of funds authorized pursuant to the Energy Effi17 ciency and Conservation Block Grant program under 

18 section 544 of the Energy Independence and Secu19 rity Act of 2007 (42 U.S.C. 17154). 

20 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There 

21 are authorized to be appropriated to the Secretary of En22 ergy $25,000,000, and such additional sums as may be 

23 necessary to provide enforcement of a national energy effi24 ciency building code, for each of fiscal years 2010 through 
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1 2020, and such sums thereafter as may be necessary to 

2 support the purposes of this section. 

3 ‘‘(j) ANNUAL REPORTS BY SECRETARY.—The Sec4 retary shall annually submit to Congress, and publish in 

5 the Federal Register, a report on— 

6 ‘‘(1) the status of national energy efficiency 

7 building codes; 

8 ‘‘(2) the status of energy efficiency building 

9 code adoption and compliance in the States; 

10 ‘‘(3) the implementation of this section; 

11 ‘‘(4) the status of Federal enforcement of build12 ing codes, including coordination with State and 

13 local enforcement, and the extent and resolution of 

14 any conflicts between the national energy efficiency 

15 building code and other residential and commercial 

16 building codes in force in the same jurisdictions; and 

17 ‘‘(5) impacts of past action under this section, 

18 and potential impacts of further action, on lifetime 

19 energy use by buildings, including resulting energy 

20 and cost savings.’’. 

21 SEC. 202. BUILDING RETROFIT PROGRAM. 

22 (a) DEFINITIONS.—For purposes of this section: 

23 (1) ASSISTED HOUSING.—The term ‘‘assisted 

24 housing’’ means those properties receiving project25 based assistance pursuant to section 202 of the 
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1 Housing Act of 1959 (12 U.S.C. 1701q), section 

2 811 of the Cranston-Gonzalez National Affordable 

3 Housing Act (42 U.S.C. 8013), section 8 of the 

4 United States Housing Act of 1937 (42 U.S.C. 

5 1437f), or similar programs. 

6 (2) NONRESIDENTIAL BUILDING.—The term 

7 ‘‘nonresidential building’’ means a building with a 

8 primary use or purpose other than residential hous9 ing, including any building used for commercial of10 fices, schools, academic and other public and private 

11 institutions, nonprofit organizations including faith12 based organizations, hospitals, hotels, and other non13 residential purposes. Such buildings shall include 

14 mixed-use properties used for both residential and 

15 nonresidential purposes in which more than half of 

16 building floor space is nonresidential. 

17 (3) PERFORMANCE-BASED BUILDING RETROFIT

18 PROGRAM.—The term ‘‘performance-based building 

19 retrofit program’’ means a program that determines 

20 building energy efficiency success based on actual 

21 measured savings after a retrofit is complete, as evi22 denced by energy invoices or evaluation protocols. 

23 (4) PRESCRIPTIVE BUILDING RETROFIT PRO24 GRAM.—The term ‘‘prescriptive building retrofit pro25 gram’’ means a program that projects building ret-
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1 rofit energy efficiency success based on the known 

2 effectiveness of measures prescribed to be included 

3 in a retrofit. 

4 (5) PUBLIC HOUSING.—The term ‘‘public hous5 ing’’ means properties receiving assistance under 

6 section 9 of the United States Housing Act of 1937 

7 (42 U.S.C. 1437g). 

8 (6) RECOMMISSIONING; 

9 RETROCOMMISSIONING.—The terms ‘‘recommis10 sioning’’ and ‘‘retrocommissioning’’ have the mean11 ing given those terms in section 543(f)(1) of the Na12 tional Energy Conservation Policy Act (42 U.S.C. 

13 8253(f)(1)). 

14 (7) RESIDENTIAL BUILDING.—The term ‘‘resi15 dential building’’ means a building whose primary 

16 use is residential. Such buildings shall include sin17 gle-family homes (both attached and detached), 

18 owner-occupied units in larger buildings with their 

19 own dedicated space-conditioning systems, apart20 ment buildings, multi-unit condominium buildings, 

21 public housing, assisted housing, and buildings used 

22 for both residential and nonresidential purposes in 

23 which more than half of building floor space is resi24 dential. 
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1 (8) STATE ENERGY PROGRAM.—The term 

2 ‘‘State Energy Program’’ means the program under 

3 part D of title III of the Energy Policy and Con4 servation Act (42 U.S.C. 6321 et seq.). 

5 (b) ESTABLISHMENT.—The Administrator shall de6 velop and implement, in consultation with the Secretary 

7 of Energy, standards for a national energy and environ8 mental building retrofit policy for single-family and multi9 family residences. The Administrator shall develop and 

10 implement, in consultation with the Secretary of Energy 

11 and the Director of Commercial High-Performance Green 

12 Buildings, standards for a national energy and environ13 mental building retrofit policy for nonresidential buildings. 

14 The programs to implement the residential and nonresi15 dential policies based on the standards developed under 

16 this section shall together be known as the Retrofit for 

17 Energy and Environmental Performance (REEP) pro18 gram. 

19 (c) PURPOSE.—The purpose of the REEP program 

20 is to facilitate the retrofitting of existing buildings across 

21 the United States to achieve maximum cost-effective en22 ergy efficiency improvements and significant improve23 ments in water use and other environmental attributes. 

24 (d) FEDERAL ADMINISTRATION.— 
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1 (1) EXISTING PROGRAMS.—In creating and op2 erating the REEP program— 

3 (A) the Administrator shall make appro4 priate use of existing programs, including the 

5 Energy Star program and in particular the En6 vironmental Protection Agency Energy Star for 

7 Buildings program; and 

8 (B) the Secretary of Energy shall make 

9 appropriate use of existing programs, including 

10 delegating authority to the Director of Commer11 cial High-Performance Green Buildings ap12 pointed under section 421 of the Energy Inde13 pendence and Security Act of 2007 (42 U.S.C. 

14 17081), who shall designate and provide fund15 ing to support a high-performance green build16 ing partnership consortium pursuant to sub17 section (f) of such section to support efforts 

18 under this section. 

19 (2) CONSULTATION AND COORDINATION.—The 

20 Administrator and the Secretary of Energy shall 

21 consult with and coordinate with the Secretary of 

22 Housing and Urban Development in carrying out the 

23 REEP program with regard to retrofitting of public 

24 housing and assisted housing. As a result of such 

25 consultation, the Administrator shall establish stand-
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1 ards to ensure that retrofits of public housing and 

2 assisted housing funded pursuant to this section are 

3 cost-effective, including opportunities to address the 

4 potential co-performance of repair and replacement 

5 needs that may be supported with other forms of 

6 Federal assistance. Owners of public housing or as7 sisted housing receiving funding through the REEP 

8 program shall agree to continue to provide afford9 able housing consistent with the provisions of the 

10 authorizing legislation governing each program for 

11 an additional period commensurate with the funding 

12 received, as determined in accordance with guide13 lines established by the Secretary of Housing and 

14 Urban Development. 

15 (3) ASSISTANCE.—The Administrator and the 

16 Secretary of Energy shall provide consultation and 

17 assistance to State and local agencies for the estab18 lishment of revolving loan funds, loan guarantees, or 

19 other forms of financial assistance under this sec20 tion. 

21 (e) STATE AND LOCAL ADMINISTRATION.— 

22 (1) DESIGNATION AND DELEGATION.—A State 

23 may designate one or more agencies or entities, in24 cluding those regulated by the State, to carry out 

25 the purposes of this section, but shall designate one 
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1 entity or individual as the principal point of contact 

2 for the Administrator regarding the REEP Pro3 gram. The designated State agency, agencies, or en4 tities may delegate performance of appropriate ele5 ments of the REEP program, upon their request 

6 and subject to State law, to counties, municipalities, 

7 appropriate public agencies, and other divisions of 

8 local government, as well as to entities regulated by 

9 the State. In making any such designation or delega10 tion, a State shall give priority to entities that ad11 minister existing comprehensive retrofit programs, 

12 including those under the supervision of State utility 

13 regulators. States shall maintain responsibility for 

14 meeting the standards and requirements of the 

15 REEP program. In any State that elects not to ad16 minister the REEP program, a unit of local govern17 ment may propose to do so within its jurisdiction, 

18 and if the Administrator finds that such local gov19 ernment is capable of administering the program, 

20 the Administrator may provide allowances to that 

21 local government, prorated according to the popu22 lation of the local jurisdiction relative to the popu23 lation of the State, for purposes of the REEP pro24 gram. 
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1 (2) EMPLOYMENT.—States and local govern2 ment entities may administer a REEP program in 

3 a manner that authorizes public or regulated inves4 tor-owned utilities, building auditors and inspectors, 

5 contractors, nonprofit organizations, for-profit com6 panies, and other entities to perform audits and ret7 rofit services under this section. A State may pro8 vide incentives for retrofits without direct participa9 tion by the State or its agents, so long as the result10 ing savings are measured and verified. A State or 

11 local administrator of a REEP program shall seek 

12 to ensure that sufficient qualified entities are avail13 able to support retrofit activities so that building 

14 owners have a competitive choice among qualified 

15 auditors, raters, contractors, and providers of serv16 ices related to retrofits. Nothing in this section is in17 tended to deny the right of a building owner to 

18 choose the specific providers of retrofit services to 

19 engage for a retrofit project in that owner’s building. 

20 (3) EQUAL INCENTIVES FOR EQUAL IMPROVE21 MENT.—In general, the States should strive to offer 

22 the same levels of incentives for retrofits that meet 

23 the same efficiency improvement goals, regardless of 

24 whether the State, its agency or entity, or the build25 ing owner has conducted the retrofit achieving the 
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1 improvement, provided the improvement is measured 

2 and verified. 

3 (f) ELEMENTS OF REEP PROGRAM.—The Adminis4 trator, in consultation with the Secretary of Energy, shall 

5 establish goals, guidelines, practices, and standards for ac6 complishing the purpose stated in subsection (c), and shall 

7 annually review and, as appropriate, revise such goals, 

8 guidelines, practices, and standards. The program under 

9 this section shall include the following: 

10 (1) Residential Energy Services Network 

11 (RESNET) or Building Performance Institute 

12 (BPI) analyst certification of residential building en13 ergy and environment auditors, inspectors, and rat14 ers, or an equivalent certification system as deter15 mined by the Administrator. 

16 (2) BPI certification or licensing by States of 

17 residential building energy and environmental ret18 rofit contractors, or an equivalent certification or li19 censing system as determined by the Administrator. 

20 (3) Provision of BPI, RESNET, or other ap21 propriate information on equipment and procedures, 

22 as determined by the Administrator, that contractors 

23 can use to test the energy and environmental effi24 ciency of buildings effectively (such as infrared pho-
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1 tography and pressurized testing, and tests for water 

2 use and indoor air quality). 

3 (4) Provision of clear and effective materials to 

4 describe the testing and retrofit processes for typical 

5 buildings. 

6 (5) Guidelines for offering and managing pre7 scriptive building retrofit programs and perform8 ance-based building retrofit programs for residential 

9 and nonresidential buildings. 

10 (6) Guidelines for applying recommissioning 

11 and retrocommissioning principles to improve a 

12 building’s operations and maintenance procedures. 

13 (7) A requirement that building retrofits con14 ducted pursuant to a REEP program utilize, espe15 cially in all air-conditioned buildings, roofing mate16 rials with high solar energy reflectance, unless inap17 propriate due to green roof management, solar en18 ergy production, or for other reasons identified by 

19 the Administrator, in order to reduce energy con20 sumption within the building, increase the albedo of 

21 the building’s roof, and decrease the heat island ef22 fect in the area of the building, without reduction of 

23 otherwise applicable ceiling insulation standards. 

24 (8) Determination of energy savings in a per25 formance-based building retrofit program through— 
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1 (A) for residential buildings, comparison of 

2 before and after retrofit scores on the Home 

3 Energy Rating System (HERS) Index, where 

4 the final score is produced by an objective third 

5 party; 

6 (B) for nonresidential buildings, Environ7 mental Protection Agency Portfolio Manager 

8 benchmarks; or 

9 (C) for either residential or nonresidential 

10 buildings, use of an Administrator-approved 

11 simulation program by a contractor with the 

12 appropriate certification, subject to appropriate 

13 software standards and verification of at least 

14 15 percent of all work done, or such other per15 centage as the Administrator may determine. 

16 (9) Guidelines for utilizing the Energy Star 

17 Portfolio Manager, the Home Energy Rating System 

18 (HERS) rating system, Home Performance with En19 ergy Star program approvals, and any other tools 

20 associated with the retrofit program. 

21 (10) Requirements and guidelines for post-ret22 rofit inspection and confirmation of work and energy 

23 savings. 

24 (11) Detailed descriptions of funding options 

25 for the benefit of State and local governments, along 
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1 with model forms, accounting aids, agreements, and 

2 guides to best practices. 

3 (12) Guidance on opportunities for— 

4 (A) rating or certifying retrofitted build5 ings as Energy Star buildings, or as green 

6 buildings under a recognized green building rat7 ing system; 

8 (B) assigning Home Energy Rating Sys9 tem (HERS) or similar ratings; and 

10 (C) completing any applicable building per11 formance labels. 

12 (13) Sample materials for publicizing the pro13 gram to building owners, including public service an14 nouncements and advertisements. 

15 (14) Processes for tracking the numbers and lo16 cations of buildings retrofitted under the REEP pro17 gram, with information on projected and actual sav18 ings of energy and its value over time. 

19 (g) REQUIREMENTS.—As a condition of receiving al20 lowances for the REEP program pursuant to this Act, a 

21 State or qualifying local government shall— 

22 (1) adopt the standards for training, certifi23 cation of contractors, certification of buildings, and 

24 post-retrofit inspection as developed by the Adminis25 trator for residential and nonresidential buildings, 
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1 respectively, except as necessary to match local con2 ditions, needs, efficiency opportunities, or other local 

3 factors, or to accord with State laws or regulations, 

4 and then only after the Administrator approves such 

5 a variance; 

6 (2) establish fiscal controls and accounting pro7 cedures (which conform to generally accepted gov8 ernment accounting principles) sufficient to ensure 

9 proper accounting during appropriate accounting pe10 riods for payments received and disbursements, and 

11 for fund balances; and 

12 (3) agree to make not less than 10 percent of 

13 allowance value received pursuant to section 

14 132(c)(2) for dedicated funding of its REEP pro15 gram available on a preferential basis for retrofit 

16 projects proposed for public housing and assisted 

17 housing, provided that— 

18 (A) none of such funds shall be used for 

19 demolition of such housing; 

20 (B) such retrofits not shall not be used to 

21 justify any increase in rents charged to resi22 dents of such housing; and 

23 (C) owners of such housing shall agree to 

24 continue to provide affordable housing con25 sistent with the provisions of the authorizing 
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1 legislation governing each program for an addi2 tional period commensurate with the funding 

3 received. 

4 The Administrator shall conduct or require each State to 

5 have such independent financial audits of REEP-related 

6 funding as the Administrator considers necessary or ap7 propriate to carry out the purposes of this section. 

8 (h) OPTIONS TO SUPPORT REEP PROGRAM.—The 

9 emission allowances provided pursuant to this Act to the 

10 States SEED Accounts shall support the implementation 

11 through State REEP programs of alternate means of cre12 ating incentives for, or reducing financial barriers to, im13 proved energy and environmental performance in build14 ings, consistent with this section, including— 

15 (1) implementing prescriptive building retrofit 

16 programs and performance-based building retrofit 

17 programs; 

18 (2) providing credit enhancement, interest rate 

19 subsidies, loan guarantees, or other credit support; 

20 (3) providing initial capital for public revolving 

21 fund financing of retrofits, with repayments by bene22 ficiary building owners over time through their tax 

23 payments, calibrated to create net positive cash flow 

24 to the building owner; 
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1 (4) providing funds to support utility-operated 

2 retrofit programs with repayments over time 

3 through utility rates, calibrated to create net positive 

4 cash flow to the building owner, and transferable 

5 from one building owner to the next with the build6 ing’s utility services; 

7 (5) providing funds to local government pro8 grams to provide REEP services and financial as9 sistance; and 

10 (6) other means proposed by State and local 

11 agencies, subject to the approval of the Adminis12 trator. 

13 (i) SUPPORT FOR PROGRAM.— 

14 (1) USE OF ALLOWANCES.—Direct Federal sup15 port for the REEP program is provided through the 

16 emission allowances allocated to the States’ SEED 

17 Accounts pursuant to section 132 of this Act. To the 

18 extent that a State provides allowances to local gov19 ernments within the State to implement elements of 

20 the REEP Program, that shall be deemed a dis21 tribution of such allowances to units of local govern22 ment pursuant to subsection (c)(1) of that section. 

23 (2) INITIAL AWARD LIMITS.—Except as pro24 vided in paragraph (3), State and local REEP pro25 grams may make per-building direct expenditures 
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1 for retrofit improvements, or their equivalent in indi2 rect or other forms of financial support, from funds 

3 derived from the sale of allowances received directly 

4 from the Administrator in amounts not to exceed the 

5 following amounts per unit: 

6 (A) RESIDENTIAL BUILDING PROGRAM.— 

7 (i) AWARDS.—For residential build8 ings— 

9 (I) support for a free or low-cost 

10 detailed building energy audit that 

11 prescribes measures sufficient to 

12 achieve at least a 20 percent reduc13 tion in energy use, by providing an in14 centive equal to the documented cost 

15 of such audit, but not more than 

16 $200, in addition to any earned by 

17 achieving a 20 percent or greater effi18 ciency improvement; 

19 (II) a total of $1,000 for a com20 bination of measures, prescribed in an 

21 audit conducted under subclause (I), 

22 designed to reduce energy consump23 tion by more than 10 percent, and 

24 $2,000 for a combination of measures 

25 prescribed in such an audit, designed 
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1 to reduce energy consumption by more 

2 than 20 percent; 

3 (III) $3,000 for demonstrated 

4 savings of 20 percent, pursuant to a 

5 performance-based building retrofit 

6 program; and 

7 (IV) $1,000 for each additional 5 

8 percentage points of energy savings 

9 achieved beyond savings for which 

10 funding is provided under subclause 

11 (II) or (III). 

12 Funding shall not be provided under 

13 clauses (II) and (III) for the same energy 

14 savings. 

15 (ii) MAXIMUM PERCENTAGE.—Awards 

16 under clause (i) shall not exceed 50 per17 cent of retrofit costs for each building. For 

18 buildings with multiple residential units, 

19 awards under clause (i) shall not be great20 er than 50 percent of the total cost of ret21 rofitting the building, prorated among indi22 vidual residential units on the basis of rel23 ative costs of the retrofit. In the case of 

24 public housing and assisted housing, the 

25 50 percent contribution matching the con-
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1 tribution from REEP program funds may 

2 come from any other source, including 

3 other Federal funds. 

4 (iii) ADDITIONAL AWARDS.—Addi5 tional awards may be provided for pur6 poses of increasing energy efficiency, for 

7 buildings achieving at least 20 percent en8 ergy savings using funding provided under 

9 clause (i), in the form of grants of not 

10 more than $600 for measures projected or 

11 measured (using an appropriate method 

12 approved by the Administrator) to achieve 

13 at least 35 percent potable water savings 

14 through equipment or systems with an es15 timated service life of not less than 7 

16 years, and not more than an additional 

17 $20 may be provided for each additional 

18 one percent of such savings, up to a max19 imum total grant of $1,200. 

20 (B) NONRESIDENTIAL BUILDING PRO21 GRAM.— 

22 (i) AWARDS.—For nonresidential 

23 buildings— 

24 (I) support for a free or low-cost 

25 detailed building energy audit that 
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1 prescribes, as part of a energy-reduc2 ing measures sufficient to achieve at 

3 least a 20 percent reduction in energy 

4 use, by providing an incentive equal to 

5 the documented cost of such audit, 

6 but not more than $500, in addition 

7 to any award earned by achieving a 

8 20 percent or greater efficiency im9 provement; 

10 (II) $0.15 per square foot of ret11 rofit area for demonstrated energy use 

12 reductions from 20 percent to 30 per13 cent; 

14 (III) $0.75 per square foot for 

15 demonstrated energy use reductions 

16 from 30 percent to 40 percent; 

17 (IV) $1.60 per square foot for 

18 demonstrated energy use reductions 

19 from 40 percent to 50 percent; and 

20 (V) $2.50 per square foot for 

21 demonstrated energy use reductions 

22 exceeding 50 percent. 

23 (ii) MAXIMUM PERCENTAGE.— 

24 Amounts provided under subclauses (II) 

25 through (V) of clause (i) combined shall 
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1 not exceed 50 percent of the total retrofit 

2 cost of a building. In nonresidential build3 ings with multiple units, such awards shall 

4 be prorated among individual units on the 

5 basis of relative costs of the retrofit. 

6 (iii) ADDITIONAL AWARDS.—Addi7 tional awards may be provided, for build8 ings achieving at least 20 percent energy 

9 savings using funding provided under 

10 clause (i), as follows: 

11 (I) WATER.—For purposes of in12 creasing energy efficiency, grants may 

13 be made for whole building potable 

14 water use reduction (using an appro15 priate method approved by the Ad16 ministrator) for up to 50 percent of 

17 the total retrofit cost, including 

18 amounts up to— 

19 (aa) $24.00 per thousand 

20 gallons per year of potable water 

21 savings of 40 percent or more; 

22 (bb) $27.00 per thousand 

23 gallons per year of potable water 

24 savings of 50 percent or more; 

25 and 
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1 (cc) $30.00 per thousand 

2 gallons per year of potable water 

3 savings of 60 percent or more. 

4 (II) ENVIRONMENTAL IMPROVE5 MENTS.—Additional awards of up to 

6 $1,000 may be granted for the inclu7 sion of other environmental attributes 

8 that the Administrator, in consulta9 tion with the Secretary, identifies as 

10 contributing to energy efficiency. Such 

11 attributes may include, but are not 

12 limited to waste diversion and the use 

13 of environmentally preferable mate14 rials (including salvaged, renewable, 

15 or recycled materials, and materials 

16 with no or low-VOC content). The Ad17 ministrator may recommend that 

18 States develop such standards as are 

19 necessary to account for local or re20 gional conditions that may affect the 

21 feasibility or availability of identified 

22 resources and attributes. 

23 (iv) INDOOR AIR QUALITY MINIMUM.— 

24 Nonresidential buildings receiving incen25 tives under this section must satisfy at a 
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1 minimum the most recent version of 

2 ASHRAE Standard 62.1 for ventilation, or 

3 the equivalent as determined by the Ad4 ministrator. A State may issue a waiver 

5 from this requirement to a building project 

6 on a showing that such compliance is in7 feasible due to the physical constraints of 

8 the building’s existing ventilation system, 

9 or such other limitations as may be speci10 fied by the Administrator. 

11 (C) DISASTER DAMAGED BUILDINGS.—Any 

12 source of funds, including Federal funds pro13 vided through the Robert T. Stafford Disaster 

14 Relief and Emergency Assistance Act, shall 

15 qualify as the building owner’s 50 percent con16 tribution, in order to match the contribution of 

17 REEP funds, so long as the REEP funds are 

18 only used to improve the energy efficiency of 

19 the buildings being reconstructed. In addition, 

20 the appropriate Federal agencies providing as21 sistance to building owners through the Robert 

22 T. Stafford Disaster Relief and Emergency As23 sistance Act shall make information available, 

24 following a disaster, to building owners rebuild25 ing disaster damaged buildings with assistance 
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1 from the Act, that REEP funds may be used 

2 for energy efficiency improvements. 

3 (D) HISTORIC BUILDINGS.—Notwith4 standing subparagraphs (A) and (B), a building 

5 in or eligible for the National Register of His6 toric Places shall be eligible for awards under 

7 this paragraph in amounts up to 120 percent of 

8 the amounts set forth in subparagraphs (A) and 

9 (B). 

10 (E) SUPPLEMENTAL SUPPORT.—State and 

11 local governments may supplement the per12 building expenditures under this paragraph 

13 with funding from other sources. 

14 (3) ADJUSTMENT.—The Administrator may ad15 just the specific dollar limits funded by the sale of 

16 allowances pursuant to paragraph (2) in years sub17 sequent to the second year after the date of enact18 ment of this Act, and every 2 years thereafter, as 

19 the Administrator determines necessary to achieve 

20 optimum cost-effectiveness and to maximize incen21 tives to achieve energy efficiency within the total 

22 building award amounts provided in that paragraph, 

23 and shall publish and hold constant such revised lim24 its for at least 2 years. 
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1 (j) REPORT TO CONGRESS.—The Administrator shall 

2 conduct an annual assessment of the achievements of the 

3 REEP program in each State, shall prepare an annual re4 port of such achievements and any recommendations for 

5 program modifications, and shall provide such report to 

6 Congress at the end of each fiscal year during which fund7 ing or other resources were made available to the States 

8 for the REEP Program. 

9 (k) OTHER SOURCES OF FEDERAL SUPPORT.— 

10 (1) ADDITIONAL STATE ENERGY PROGRAM

11 FUNDS.—Any Federal funding provided to a State 

12 Energy Program that is not required to be expended 

13 for a different federally designated purpose may be 

14 used to support a REEP program. 

15 (2) PROGRAM ADMINISTRATION.—State Energy 

16 Offices or designated State agencies may expend up 

17 to 10 percent of available allowance value provided 

18 under this section for program administration. 

19 (3) AUTHORIZATION OF APPROPRIATIONS.— 

20 There are authorized to be appropriated for the pur21 poses of this section, for each of fiscal years 2010, 

22 2011, 2012, and 2013— 

23 (A) $50,000,000 to the Administrator for 

24 program administration costs; and 
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1 (B) $20,000,000 to the Secretary of En2 ergy for program administration costs. 

3 SEC. 203. ENERGY EFFICIENT MANUFACTURED HOMES. 

4 (a) DEFINITIONS.—In this section: 

5 (1) MANUFACTURED HOME.—The term ‘‘manu6 factured home’’ has the meaning given such term in 

7 section 603 of the National Manufactured Housing 

8 Construction and Safety Standards Act of 1974 (42 

9 U.S.C. 5402). 

10 (2) ENERGY STAR QUALIFIED MANUFACTURED

11 HOME.—The term ‘‘Energy Star qualified manufac12 tured home’’ means a manufactured home that has 

13 been designed, produced, and installed in accordance 

14 with Energy Star’s guidelines by an Energy Star 

15 certified plant. 

16 (b) PURPOSE.—The purpose of this section is to as17 sist low-income households residing in manufactured 

18 homes constructed prior to 1976 to save energy and en19 ergy expenditures by providing support toward the pur20 chase of new Energy Star qualified manufactured homes. 

21 (c) STATE IMPLEMENTATION OF PROGRAM.— 

22 (1) MANUFACTURED HOME REPLACEMENT PRO23 GRAM.—Any State may provide to the owner of a 

24 manufactured home constructed prior to 1976 a re25 bate to use toward the purchase of a new Energy 
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1 Star qualified manufactured home pursuant to this 

2 section. 

3 (2) USE OF ALLOWANCES.—Direct Federal sup4 port for the program established in this section is 

5 provided through the emission allowances allocated 

6 to the States’ SEED Accounts pursuant to section 

7 132 of this Act. To the extent that a State provides 

8 allowances to local governments within the State to 

9 implement this program, that shall be deemed a dis10 tribution of such allowances to units of local govern11 ment pursuant to subsection (c)(1) of that section. 

12 (3) REBATES.— 

13 (A) PRIMARY RESIDENCE REQUIRE14 MENT.—A rebate described under paragraph 

15 (1) may only be made to an owner of a manu16 factured home constructed prior to 1976 that is 

17 used on a year-round basis as a primary resi18 dence. 

19 (B) DISMANTLING AND REPLACEMENT.—A 

20 rebate described under paragraph (1) may be 

21 made only if the manufactured home con22 structed prior to 1976 will be— 

23 (i) rendered unusable for human habi24 tation (including appropriate recycling); 

25 and 
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1 (ii) replaced, in the same general loca2 tion, as determined by the applicable State 

3 agency, with an Energy Star qualified 

4 manufactured home. 

5 (C) SINGLE REBATE.—A rebate described 

6 under paragraph (1) may not be provided to 

7 any owner of a manufactured home constructed 

8 prior to 1976 that was or is a member of a 

9 household for which any other member of the 

10 household was provided a rebate pursuant to 

11 this section. 

12 (D) ELIGIBLE HOUSEHOLDS.—To be eligi13 ble to receive a rebate described under para14 graph (1), an owner of a manufactured home 

15 constructed prior to 1976 shall demonstrate to 

16 the applicable State agency that the total in17 come of all members the owner’s household does 

18 not exceed 200 percent of the Federal poverty 

19 level for income in the applicable area. 

20 (E) ADVANCE AVAILABILITY.—A rebate 

21 may be provided under this section in a manner 

22 to facilitate the purchase of a new Energy Star 

23 qualified manufactured home. 

24 (4) REBATE LIMITATION.—Rebates provided by 

25 States under this section shall not exceed $7,500 per 
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1 manufactured home from any value derived from the 

2 use of emission allowances provided to the State 

3 pursuant to section 132. 

4 (5) USE OF STATE FUNDS.—A State providing 

5 rebates under this section may supplement the 

6 amount of such rebates under paragraph (4) by any 

7 additional amount is from State funds and other 

8 sources, including private donations or grants from 

9 charitable organizations. 

10 (6) COORDINATION WITH SIMILAR PRO11 GRAMS.— 

12 (A) STATE PROGRAMS.—A State con13 ducting an existing program that has the pur14 pose of replacing manufactured homes con15 structed prior to 1976 with Energy Star quali16 fied manufactured homes, may use allowance 

17 value provided under section 782 of the Clean 

18 Air Act to support such a program, provided 

19 such funding does not exceed the rebate limita20 tion amount under paragraph (4). 

21 (B) FEDERAL PROGRAMS.—The Secretary 

22 of Energy shall coordinate with and seek to 

23 achieve the purpose of this section through 

24 similar Federal programs including— 
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1 (i) the Weatherization Assistance Pro2 gram under part A of title IV of the En3 ergy Conservation and Production Act (42 

4 U.S.C. 6861 et seq.); and 

5 (ii) the program under part D of title 

6 III of the Energy Policy and Conservation 

7 Act (42 U.S.C. 6321 et seq.). 

8 (C) COORDINATION WITH OTHER STATE

9 AGENCIES.—A State agency using allowance 

10 value to administer the program under this sec11 tion may coordinate its efforts, and share funds 

12 for administration, with other State agencies in13 volved in low-income housing programs. 

14 (7) ADMINISTRATIVE EXPENSES.—A State 

15 using allowance value under this section may expend 

16 not more than 10 percent of such value for adminis17 trative expenses related to this program. 

18 SEC. 204. BUILDING ENERGY PERFORMANCE LABELING 

19 PROGRAM. 

20 (a) ESTABLISHMENT.— 

21 (1) PURPOSE.—The Administrator shall estab22 lish a building energy performance labeling program 

23 with broad applicability to the residential and com24 mercial markets to enable and encourage knowledge 

25 about building energy performance by owners and 
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1 occupants and to inform efforts to reduce energy 

2 consumption nationwide. 

3 (2) COMPONENTS.—In developing such pro4 gram, the Administrator shall— 

5 (A) consider existing programs, such as 

6 Environmental Protection Agency’s Energy 

7 Star program, the Home Energy Rating System 

8 (HERS) Index, and programs at the Depart9 ment of Energy; 

10 (B) support the development of model per11 formance labels for residential and commercial 

12 buildings; and 

13 (C) utilize incentives and other means to 

14 spur use of energy performance labeling of pub15 lic and private sector buildings nationwide. 

16 (b) DATA ASSESSMENT FOR BUILDING ENERGY PER17 FORMANCE.— 

18 (1) INITIAL REPORT.—Not later than 90 days 

19 after the date of enactment of this Act, the Adminis20 trator shall provide to Congress, as well as to the 

21 Secretary of Energy and the Office of Management 

22 and Budget, a report identifying— 

23 (A) all principal building types for which 

24 statistically significant energy performance data 

25 exists to serve as the basis of measurement pro-
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1 tocols and labeling requirements for achieved 

2 building energy performance; and 

3 (B) those building types for which addi4 tional data are required to enable the develop5 ment of such protocols and requirements. 

6 (2) ADDITIONAL REPORTS.—Additional updated 

7 reports shall be provided under this subsection as 

8 often as The Administrator considers practicable, 

9 but not less than every 2 years. 

10 (c) BUILDING DATA ACQUISITION.— 

11 (1) RESOURCE REQUIREMENTS.—For all prin12 cipal building types identified under subsection (b), 

13 the Secretary of Energy, not later than 90 days 

14 after a report by the Administrator under subsection 

15 (b), shall provide to Congress, the Administrator, 

16 and the Office of Management and Budget a state17 ment of additional resources needed, if any, to fully 

18 develop the relevant data, as well as the anticipated 

19 timeline for data development. 

20 (2) CONSULTATION.—The Secretary of Energy 

21 shall consult with the Administrator concerning the 

22 Administrator’s ability to use data series for these 

23 additional building types to support the achieved 

24 performance component in the labeling program. 
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1 (3) IMPROVEMENTS TO BUILDING ENERGY CON2 SUMPTION DATABASES.— 

3 (A) COMMERCIAL DATABASE.—The Sec4 retary of Energy shall support improvements to 

5 the Commercial Buildings Energy Consumption 

6 Survey (CBECS) as authorized by section 

7 205(k) of the Department of Energy Organiza8 tion Act (42 U.S.C. 7135(k))— 

9 (i) to enable complete and robust data 

10 for the actual energy performance of prin11 cipal building types currently covered by 

12 survey; 

13 (ii) to cover additional building types 

14 as identified by the Administrator under 

15 subsection (b)(1)(B), to enable the develop16 ment of achieved performance measure17 ment protocols are developed for at least 

18 90 percent of all major commercial build19 ing types within 5 years after the date of 

20 enactment of this Act; and 

21 (iii) to include third-party audits of 

22 random data samplings to ensure the qual23 ity and accuracy of survey information. 

24 (B) RESIDENTIAL DATABASES.—The Ad25 ministrator, in consultation with the Energy In-
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1 formation Administration and the Secretary of 

2 Energy, shall support improvements to the Res3 idential Energy Consumption Survey (RECS) 

4 as authorized by section 205(k) of the Depart5 ment of Energy Organization Act (42 U.S.C. 

6 7135(k)), or such other residential energy per7 formance databases as the Administrator con8 siders appropriate, to aid the development of 

9 achieved performance measurement protocols 

10 for residential building energy use for at least 

11 90 percent of the residential market within 5 

12 years after the date of enactment of this Act. 

13 (C) CONSULTATION.—The Secretary of 

14 Energy and the Administrator shall consult 

15 with public, private, and nonprofit sector rep16 resentatives from the building industry and real 

17 estate industry to assist in the evaluation and 

18 improvement of building energy performance 

19 databases and labeling programs. 

20 (d) IDENTIFICATION OF MEASUREMENT PROTOCOLS

21 FOR ACHIEVED PERFORMANCE.— 

22 (1) PROPOSED PROTOCOLS AND REQUIRE23 MENTS.—At the earliest practicable date, but not 

24 later than 1 year after identifying a building type 

25 under subsection (b)(1)(A), the Administrator shall 
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1 propose a measurement protocol for that building 

2 type and a requirement detailing how to use that 

3 protocol in completing applicable commercial or resi4 dential performance labels created pursuant to this 

5 section. 

6 (2) FINAL RULE.—After providing for notice 

7 and comment, the Administrator shall publish a 

8 final rule containing a measurement protocol and 

9 the corresponding requirements for applying that 

10 protocol. Such a rule— 

11 (A) shall define the minimum period for 

12 measurement of energy use by buildings of that 

13 type and other details for determining achieved 

14 performance, to include leased buildings or 

15 parts thereof; 

16 (B) shall identify necessary data collection 

17 and record retention requirements; and 

18 (C) may specify transition rules and ex19 emptions for classes of buildings within the 

20 building type. 

21 (e) PROCEDURES FOR EVALUATING DESIGNED PER22 FORMANCE.—The Administrator shall develop protocols 

23 for evaluating the designed performance of individual 

24 building types. The Administrator may conduct such feasi25 bility studies and demonstration projects as are necessary 
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1 to evaluate the sufficiency of proposed protocols for de2 signed performance. 

3 (f) CREATION OF BUILDING ENERGY PERFORMANCE

4 LABELING PROGRAM.— 

5 (1) MODEL LABEL.—Not later than 1 year 

6 after the date of enactment of this Act, the Adminis7 trator shall propose a model building energy label 

8 that provides a format— 

9 (A) to display achieved performance and 

10 designed performance data; 

11 (B) that may be tailored for residential 

12 and commercial buildings, and for single-occu13 pancy and multitenanted buildings; and 

14 (C) to display other appropriate elements 

15 identified during the development of measure16 ment protocols under subsections (d) and (e). 

17 (2) INCLUSIONS.—Nothing in this section shall 

18 require the inclusion on such a label of designed per19 formance data where impracticable or not cost effec20 tive, or to preclude the display of both achieved per21 formance and designed performance data for a par22 ticular building where both such measures are avail23 able, practicable, and cost effective. 
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1 (3) EXISTING PROGRAMS.—In developing the 

2 model label, the Administrator shall consider exist3 ing programs, including— 

4 (A) the Environmental Protection Agency’s 

5 Energy Star Portfolio Manager program and 

6 the California HERS II Program Custom Ap7 proach for the achieved performance component 

8 of the label; 

9 (B) the Home Energy Rating System 

10 (HERS) Index system for the designed per11 formance component of the label; and 

12 (C) other Federal and State programs, in13 cluding the Department of Energy’s related 

14 programs on building technologies and those of 

15 the Federal Energy Management Program. 

16 (4) FINAL RULE.—After providing for notice 

17 and comment, the Administrator shall publish a 

18 final rule containing the label applicable to covered 

19 building types. 

20 (g) DEMONSTRATION PROJECTS FOR LABELING

21 PROGRAM.— 

22 (1) IN GENERAL.—The Administrator shall con23 duct building energy performance labeling dem24 onstration projects for different building types— 
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1 (A) to ensure the sufficiency of the current 

2 Commercial Buildings Energy Consumption 

3 Survey and other data to serve as the basis for 

4 new measurement protocols for the achieved 

5 performance component of the building energy 

6 performance labeling program; 

7 (B) to inform the development of measure8 ment protocols for building types not currently 

9 covered by the Commercial Buildings Energy 

10 Consumption Survey; and 

11 (C) to identify any additional information 

12 that needs to be developed to ensure effective 

13 use of the model label. 

14 (2) PARTICIPATION.—Such demonstration 

15 projects shall include participation of— 

16 (A) buildings from diverse geographical 

17 and climate regions; 

18 (B) buildings in both urban and rural 

19 areas; 

20 (C) single-family residential buildings; 

21 (D) multihousing residential buildings with 

22 more than 50 units, including at least one 

23 project that provides affordable housing to indi24 viduals of diverse incomes; 
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1 (E) single-occupant commercial buildings 

2 larger than 30,000 square feet; 

3 (F) multitenanted commercial buildings 

4 larger than 50,000 square feet; and 

5 (G) buildings from both the public and pri6 vate sectors. 

7 (3) PRIORITY.—Priority in the selection of dem8 onstration projects shall be given to projects that fa9 cilitate large-scale implementation of the labeling 

10 program for samples of buildings across neighbor11 hoods, geographic regions, cities, or States. 

12 (4) FINDINGS.—The Administrator shall report 

13 any findings from demonstration projects under this 

14 subsection, including an identification of any areas 

15 of needed data improvement, to the Department of 

16 Energy’s Energy Information Administration and 

17 Building Technologies Program. 

18 (5) COORDINATION.—The Administrator and 

19 the Secretary of Energy shall coordinate demonstra20 tion projects undertaken pursuant to this subsection 

21 with those undertaken as part of the Zero-Net-En22 ergy Commercial Buildings Initiative adopted under 

23 section 422 of the Energy Independence and Secu24 rity Act of 2007 (42 U.S.C. 17082). 

25 (h) IMPLEMENTATION OF LABELING PROGRAM.— 
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1 (1) IN GENERAL.—The Administrator, in con2 sultation with the Secretary of Energy, shall work 

3 with all State Energy Offices established pursuant 

4 to part D of title III of the Energy Policy and Con5 servation Act (42 U.S.C. 6321 et seq.) or other 

6 State authorities as necessary for the purpose of im7 plementing the labeling program established under 

8 this section for commercial and residential buildings. 

9 (2) OUTREACH TO LOCAL AUTHORITIES.—The 

10 Administrator shall, acting in consultation and co11 ordination with the respective States, encourage use 

12 of the labeling program by counties and other local13 ities to broaden access to information about building 

14 energy use, for example, through disclosure of build15 ing label contents in tax, title, and other records 

16 those localities maintain. For this purpose, the Ad17 ministrator shall develop an electronic version of the 

18 label and information that can be readily trans19 mitted and read in widely-available computer pro20 grams but is protected from unauthorized manipula21 tion. 

22 (3) MEANS OF IMPLEMENTATION.—In adopting 

23 the model labeling program established under this 

24 section, a State shall seek to ensure that labeled in25 formation be made accessible to the public in a man-
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1 ner so that owners, lenders, tenants, occupants, or 

2 other relevant parties can utilize it. Such accessi3 bility may be accomplished through— 

4 (A) preparation, and public disclosure of 

5 the label through filing with tax and title 

6 records at the time of— 

7 (i) a building audit conducted with 

8 support from Federal or State funds; 

9 (ii) a building energy-efficiency ret10 rofit conducted in response to such an 

11 audit; 

12 (iii) a final inspection of major ren13 ovations or additions made to a building in 

14 accordance with a building permit issued 

15 by a local government entity; 

16 (iv) a sale that is recorded for title 

17 and tax purposes consistent with para18 graph (8); 

19 (v) a new lien recorded on the prop20 erty for more than a set percentage of the 

21 assessed value of the property, if that lien 

22 reflects public financial assistance for en23 ergy-related improvements to that building; 

24 or 
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1 (vi) a change in ownership or oper2 ation of the building for purposes of utility 

3 billing; or 

4 (B) other appropriate means. 

5 (4) STATE IMPLEMENTATION OF PROGRAM.— 

6 (A) ELIGIBILITY.—A State may become el7 igible to utilize allowance value to implement 

8 this program by— 

9 (i) adopting by statute or regulation a 

10 requirement that buildings be assessed and 

11 labeled, consistent with the labeling re12 quirements of the program established 

13 under this section; or 

14 (ii) adopting a plan to implement a 

15 model labeling program consistent with 

16 this section within 1 year of enactment of 

17 this Act, including the establishment of 

18 that program within 3 years after the date 

19 of enactment of this Act, and dem20 onstrating continuous progress under that 

21 plan. 

22 (B) USE OF ALLOWANCES.—Direct Fed23 eral support for the program established in this 

24 section is provided through the emission allow25 ances allocated to the States’ SEED Accounts 
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1 pursuant to section 132 of this Act. To the ex2 tent that a State provides allowances to local 

3 governments within the State to implement this 

4 program, that shall be deemed a distribution of 

5 such allowances to units of local government 

6 pursuant to subsection (c)(1) of that section. 

7 (5) GUIDANCE.—The Administrator may create 

8 or identify model programs and resources to provide 

9 guidance to offer to States and localities for creating 

10 labeling programs consistent with the model pro11 gram established under this section. 

12 (6) PROGRESS REPORT.—The Administrator, in 

13 consultation with the Secretary of Energy, shall pro14 vide a progress report to Congress not later than 3 

15 years after the date of enactment of this Act that— 

16 (A) evaluates the effectiveness of efforts to 

17 advance use of the model labeling program by 

18 States and localities; 

19 (B) recommends any legislative changes 

20 necessary to broaden the use of the model label21 ing program; and 

22 (C) identifies any changes to broaden the 

23 use of the model labeling program that the Ad24 ministrator has made or intends to make that 

25 do not require additional legislative authority. 
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1 (7) STATE INFORMATION.—The Administrator 

2 may require States to report to the Administrator 

3 information that the Administrator requires to pro4 vide the report required under paragraph (6). 

5 (8) PREVENTION OF DISRUPTION OF SALES

6 TRANSACTIONS.—No State shall implement a new 

7 labeling program pursuant to this section in a man8 ner that requires the labeling of a building to occur 

9 after a contract has been executed for the sale of 

10 that building and before the sales transaction is 

11 completed. 

12 (i) IMPLEMENTATION OF LABELING PROGRAM IN

13 FEDERAL BUILDINGS.— 

14 (1) USE OF LABELING PROGRAM.—The Sec15 retary of Energy and the Administrator shall use the 

16 labeling program established under this section to 

17 evaluate energy performance in the facilities of the 

18 Department of Energy and the Environmental Pro19 tection Agency, respectively, to the extent prac20 ticable, and shall encourage and support implemen21 tation efforts in other Federal agencies. 

22 (2) ANNUAL PROGRESS REPORT.—The Sec23 retary of Energy and Administrator shall provide an 

24 annual progress report to Congress and the Office of 

25 Management and Budget detailing efforts to imple-
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1 ment this subsection, as well as any best practices 

2 or needed resources identified as a result of such ef3 forts. 

4 (j) PUBLIC OUTREACH.—The Secretary of Energy 

5 and the Administrator, in consultation with nonprofit and 

6 industry stakeholders with specialized expertise, and in 

7 conjunction with other energy efficiency public awareness 

8 efforts, shall establish a business and consumer education 

9 program to increase awareness about the importance of 

10 building energy efficiency and to facilitate widespread use 

11 of the labeling program established under this section. 

12 (k) DEFINITIONS.—In this section: 

13 (1) BUILDING TYPE.—The term ‘‘building 

14 type’’ means a grouping of buildings as identified by 

15 their principal building activities, or as grouped by 

16 their use, including office buildings, laboratories, li17 braries, data centers, retail establishments, hotels, 

18 warehouses, and educational buildings. 

19 (2) MEASUREMENT PROTOCOL.—The term 

20 ‘‘measurement protocol’’ means the methodology, 

21 prescribed by the Administrator, for defining a 

22 benchmark for building energy performance for a 

23 specific building type and for measuring that per24 formance against the benchmark. 
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1 (3) ACHIEVED PERFORMANCE.—The term 

2 ‘‘achieved performance’’ means the actual energy 

3 consumption of a building as compared to a baseline 

4 building of the same type and size, determined by 

5 actual consumption data normalized for appropriate 

6 variables. 

7 (4) DESIGNED PERFORMANCE.—The term ‘‘de8 signed performance’’ means the energy consumption 

9 performance a building would achieve if operated 

10 consistent with its design intent for building energy 

11 use, utilizing a standardized set of operational condi12 tions informed by data collected or confirmed during 

13 an energy audit. 

14 (l) AUTHORIZATION OF APPROPRIATIONS.—There 

15 are authorized to be appropriated— 

16 (1) to the Administrator $50,000,000 for imple17 mentation of this section for each fiscal year from 

18 2010 through 2020; and 

19 (2) to the Secretary of Energy $20,000,000 for 

20 implementation of this section for fiscal year 2010 

21 and $10,000,000 for fiscal years 2011 through 

22 2020. 

23 (m) NEW CONSTRUCTION.—This section shall apply 

24 only to construction beginning after the date of enactment 

25 of this Act. 
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1 SEC. 205. TREE PLANTING PROGRAMS. 

2 (a) FINDINGS.—The Congress finds that— 

3 (1) the utility sector is the largest single source 

4 of greenhouse gas emissions in the United States 

5 today, producing approximately one-third of the 

6 country’s emissions; 

7 (2) heating and cooling homes accounts for 

8 nearly 60 percent of residential electricity usage in 

9 the United States; 

10 (3) shade trees planted in strategic locations 

11 can reduce residential cooling costs by as much as 

12 30 percent; 

13 (4) shade trees have significant clean-air bene14 fits associated with them; 

15 (5) every 100 healthy large trees removes about 

16 300 pounds of air pollution (including particulate 

17 matter and ozone) and about 15 tons of carbon diox18 ide from the air each year; 

19 (6) tree cover on private property and on newly20 developed land has declined since the 1970s, even 

21 while emissions from transportation and industry 

22 have been rising; and 

23 (7) in over a dozen test cities across the United 

24 States, increasing urban tree cover has generated 

25 between two and five dollars in savings for every dol26 lar invested in such tree planting. 
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1 (b) DEFINITIONS.—As used in this section: 

2 (1) The term ‘‘Secretary’’ refers to the Sec3 retary of Energy. 

4 (2) The term ‘‘retail power provider’’ means 

5 any entity authorized under applicable State or Fed6 eral law to generate, distribute, or provide retail 

7 electricity, natural gas, or fuel oil service. 

8 (3) The term ‘‘tree-planting organization’’ 

9 means any nonprofit or not-for-profit group which 

10 exists, in whole or in part, to— 

11 (A) expand urban and residential tree 

12 cover; 

13 (B) distribute trees for planting; 

14 (C) increase awareness of the environ15 mental and energy-related benefits of trees; 

16 (D) educate the public about proper tree 

17 planting, care, and maintenance strategies; or 

18 (E) carry out any combination of the fore19 going activities. 

20 (4) The term ‘‘tree-siting guidelines’’ means a 

21 comprehensive list of science-based measurements 

22 outlining the species and minimum distance required 

23 between trees planted pursuant to this section, in 

24 addition to the minimum required distance to be 

25 maintained between such trees and— 
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1 (A) building foundations; 

2 (B) air conditioning units; 

3 (C) driveways and walkways; 

4 (D) property fences; 

5 (E) preexisting utility infrastructure; 

6 (F) septic systems; 

7 (G) swimming pools; and 

8 (H) other infrastructure as deemed appro9 priate. 

10 (5) The terms ‘‘small office’’, ‘‘small office 

11 buildings’’, and ‘‘small office settings’’ means non12 residential buildings or structures zoned for business 

13 purposes that are 20,000 square feet or less in total 

14 area. 

15 (c) PURPOSES.—The purpose of this section is to es16 tablish a grant program to assist retail power providers 

17 with the establishment and operation of targeted tree18 planting programs in residential and small office settings, 

19 for the following purposes: 

20 (1) Reducing the peak-load demand for elec21 tricity from residences and small office buildings 

22 during the summer months through direct shading 

23 of buildings provided by strategically planted trees. 

24 (2) Reducing wintertime demand for energy 

25 from residences and small office buildings by block-
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1 ing cold winds from reaching such structures, which 

2 lowers interior temperatures and drives heating de3 mand. 

4 (3) Protecting public health by removing harm5 ful pollution from the air. 

6 (4) Utilizing the natural photosynthetic and 

7 transpiration process of trees to lower ambient tem8 peratures and absorb carbon dioxide, thus mitigating 

9 the effects of climate change. 

10 (5) Lowering electric bills for residential and 

11 small office ratepayers by limiting electricity con12 sumption without reducing benefits. 

13 (6) Relieving financial and demand pressure on 

14 retail power providers that stems from large peak15 load energy demand. 

16 (7) Protecting water quality and public health 

17 by reducing stormwater runoff and keeping harmful 

18 pollutants from entering waterways. 

19 (8) Ensuring that trees are planted in locations 

20 that limit the amount of public money needed to 

21 maintain public and electric infrastructure. 

22 (d) GENERAL AUTHORITY.— 

23 (1) ASSISTANCE.—The Secretary is authorized 

24 to provide financial, technical, and related assistance 

25 to retail power providers to assist with the establish-
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1 ment of new, or continued operation of existing, tar2 geted tree-planting programs for residences and 

3 small office buildings. 

4 (2) PUBLIC RECOGNITION INITIATIVE.—In car5 rying out the authority provided under this section, 

6 the Secretary shall also create a national public rec7 ognition initiative to encourage participation in tree8 planting programs by retail power providers. 

9 (3) ELIGIBILITY.—Only those programs which 

10 utilize targeted, strategic tree-siting guidelines to 

11 plant trees in relation to building location, sunlight, 

12 and prevailing wind direction shall be eligible for as13 sistance under this section. 

14 (4) REQUIREMENTS.—In order to qualify for 

15 assistance under this section, a tree-planting pro16 gram shall meet each of the following requirements: 

17 (A) The program shall provide free or dis18 counted shade-providing or wind-reducing trees 

19 to residential and small office consumers inter20 ested in lowering their home energy costs. 

21 (B) The program shall optimize the elec22 tricity-consumption reduction benefit of each 

23 tree by planting in strategic locations around a 

24 given residence or small office. 

25 (C) The program shall either— 
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1 (i) provide maximum amounts of 

2 shade during summer intervals when resi3 dences and small offices are exposed to the 

4 most sun intensity; or 

5 (ii) provide maximum amounts of 

6 wind protection during fall and winter in7 tervals when residences and small offices 

8 are exposed to the most wind intensity. 

9 (D) The program shall use the best avail10 able science to create tree siting guidelines 

11 which dictate where the optimum tree species 

12 are best planted in locations that achieve max13 imum reductions in consumer energy demand 

14 while causing the least disruption to public in15 frastructure, considering overhead and under16 ground facilities. 

17 (E) The program shall receive certification 

18 from the Secretary that it is designed to achieve 

19 the goals set forth in subparagraphs (A) 

20 through (D). In designating criteria for such 

21 certification, the Secretary shall collaborate 

22 with the United States Forest Service’s Urban 

23 and Community Forestry Program to ensure 

24 that certification requirements are consistent 

25 with such above goals. 
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1 (5) NEW PROGRAM FUNDING SHARE.—The Sec2 retary shall ensure that no less than 30 percent of 

3 the funds made available under this section are dis4 tributed to retail power providers which— 

5 (A) have not previously established or op6 erated qualified tree-planting programs; or 

7 (B) are operating qualified tree-planting 

8 programs which were established no more than 

9 3 years prior to the date of enactment of this 

10 section. 

11 (e) AGREEMENTS BETWEEN ELECTRICITY PRO12 VIDERS AND TREE-PLANTING ORGANIZATIONS.— 

13 (1) GRANT AUTHORIZATION.—In providing as14 sistance under this section, the Secretary is author15 ized to award grants only to retail power providers 

16 that have entered into binding legal agreements with 

17 nonprofit tree-planting organizations. 

18 (2) CONDITIONS OF AGREEMENT.—Those 

19 agreements between retail power providers and tree20 planting organizations shall set forth conditions 

21 under which nonprofit tree-planting organizations 

22 shall provide targeted tree-planting programs which 

23 may require these organizations to— 

24 (A) participate in local technical advisory 

25 committees responsible for drafting general 
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1 tree-siting guidelines and choosing the most ef2 fective species of trees to plant in given loca3 tions; 

4 (B) coordinate volunteer recruitment to as5 sist with the physical act of planting trees in 

6 residential locations; 

7 (C) undertake public awareness campaigns 

8 to educate local residents about the benefits, 

9 cost savings, and availability of free shade 

10 trees; 

11 (D) establish education and information 

12 campaigns to encourage recipients to maintain 

13 their shade trees over the long term; 

14 (E) serve as the point of contact for exist15 ing and potential residential participants who 

16 have questions or concerns regarding the tree17 planting program; 

18 (F) require tree recipients to sign agree19 ments committing to voluntary stewardship and 

20 care of provided trees; 

21 (G) monitor and report on the survival, 

22 growth, overall health, and estimated energy 

23 savings of provided trees up until the end of 

24 their establishment period which shall be no 

25 less than 5 years; and 
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1 (H) ensure that trees planted near existing 

2 power lines will not interfere with energized 

3 electricity distribution lines when mature, and 

4 that no new trees will be planted under or adja5 cent to high-voltage electric transmission lines 

6 without prior consultation with the applicable 

7 retail power provider receiving assistance under 

8 this section. 

9 (3) LACK OF NONPROFIT ORGANIZATION.—If 

10 qualified nonprofit or not-for-profit tree planting or11 ganizations do not exist or operate within areas 

12 served by retail power providers applying for assist13 ance under this section, the requirements of this sec14 tion shall apply to binding legal agreements entered 

15 into by such retail power providers and one of the 

16 following entities: 

17 (A) Local municipal governments with ju18 risdiction over the urban or suburban forest. 

19 (B) The State Forester for the State in 

20 which the tree planting program will operate. 

21 (C) The United States Forest Service’s 

22 Urban and Community Forestry representative 

23 for the State in which the tree-planting pro24 gram will operate. 
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1 (D) A landscaping services company that 

2 is— 

3 (i) identified in consultation with a 

4 national or State nonprofit or not-for-prof5 it tree-planting organization; 

6 (ii) licensed to operate in the State in 

7 which the tree-planting program will oper8 ate; and 

9 (iii) a business as defined by the 

10 United States Census Bureau’s 2007 

11 North American Industry Classification 

12 System Code 561730. 

13 (f) TECHNICAL ADVISORY COMMITTEES.— 

14 (1) DESCRIPTION.—In order to qualify for as15 sistance under this section, the retail power provider 

16 shall establish and consult with a local technical ad17 visory committee which shall provide advice and con18 sultation to the program, and may— 

19 (A) design and adopt an approved plant 

20 list that emphasizes the use of hardy, 

21 noninvasive tree species and, where geographi22 cally appropriate, the use of native, or site23 adapted, or low water-use shade trees; 
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1 (B) design and adopt planting, installation, 

2 and maintenance specifications and create a 

3 process for inspection and quality control; 

4 (C) ensure that tree recipients are edu5 cated to care for and maintain their trees over 

6 the long term; 

7 (D) help the public become more engaged 

8 and educated in the planting and care of shade 

9 trees; 

10 (E) prioritize which sites receive trees, giv11 ing preference to locations with the most poten12 tial for energy conservation and secondary pref13 erence to areas where the average annual in14 come is below the regional median; and 

15 (F) assist with monitoring and collection of 

16 data on tree health, tree survival, and energy 

17 conservation benefits generated under this sec18 tion. 

19 (2) COMPENSATION.—Individuals serving on 

20 local technical advisory committees shall not receive 

21 compensation for their service. 

22 (3) COMPOSITION.—Local technical advisory 

23 committees shall be composed of representatives 

24 from public, private, and nongovernmental agencies 

25 with expertise in demand-side energy efficiency man-
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1 agement, urban forestry, or arboriculture, and shall 

2 be composed of the following: 

3 (A) Up to 4 persons, but no less than one 

4 person, representing the retail power provider 

5 receiving assistance under this section. 

6 (B) Up to 4 persons, but no less than one 

7 person, representing the local tree-planting or8 ganization which will partner with the retail 

9 power provider to carry out this section. 

10 (C) Up to 3 persons representing local 

11 nonprofit conservation or environmental organi12 zations. Preference shall be given to those enti13 ties which are organized under section 

14 501(c)(3) of the Internal Revenue Code of 

15 1986, and which have demonstrated expertise 

16 engaging the public in energy conservation, en17 ergy efficiency, or green building practices or a 

18 combination thereof, such that no single organi19 zation is represented by more than one indi20 vidual under this paragraph. 

21 (D) Up to 2 persons representing a local 

22 affordable housing agency, affordable housing 

23 builder, or community development corporation. 

24 (E) Up to 3, but no less than one, persons 

25 representing local city or county government for 
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1 each municipality where a shade tree-planting 

2 program will take place; at least one of these 

3 representatives shall be the city or county for4 ester, city or county arborist, or functional 

5 equivalent. 

6 (F) Up to one person representing the 

7 local government agency responsible for man8 agement of roads, sewers, and infrastructure, 

9 including but not limited to public works de10 partments, transportation agencies, or equiva11 lents. 

12 (G) Up to 3 persons representing the nurs13 ery and landscaping industry. 

14 (H) Up to 3 persons representing the re15 search community or academia with expertise in 

16 natural resources or energy management issues. 

17 (4) CHAIRPERSON.—Each local technical advi18 sory committee shall elect a chairperson to preside 

19 over Committee meetings, act as a liaison to govern20 mental and other outside entities, and direct the 

21 general operation of the committee; only committee 

22 representatives from paragraph (3)(A) or paragraph 

23 (3)(B) of this subsection shall be eligible to act as 

24 local technical advisory committee chairpersons. 
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1 (5) CREDENTIALS.—At least one of the mem2 bers of each local technical advisory committee shall 

3 be certified with one or more of the following creden4 tials: International Society of Arboriculture; Cer5 tified Arborist, ISA; Certified Arborist Municipal 

6 Specialist, ISA; Certified Arborist Utility Specialist, 

7 ISA; Board Certified Master Arborist; or Registered 

8 Landscape Architect recommended by the American 

9 Society of Landscape Architects. 

10 (g) COST-SHARE PROGRAM.— 

11 (1) FEDERAL SHARE.—The Federal share of 

12 support for projects funded under this section shall 

13 not exceed 50 percent of the cost of such project and 

14 shall be provided on a matching basis. 

15 (2) NON-FEDERAL SHARE.—The non-Federal 

16 share of such costs may be paid or contributed by 

17 any governmental or nongovernmental entity other 

18 than from funds derived directly or indirectly from 

19 an agency or instrumentality of the United States. 

20 (h) RULEMAKING.— 

21 (1) RULEMAKING PERIOD.—The Secretary shall 

22 be authorized to solicit comments and initiate a rule23 making period that shall last no more than 6 

24 months after the date of enactment of this section. 
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1 (2) COMPETITIVE GRANT RULE.—At the conclu2 sion of the rulemaking period under paragraph (1), 

3 the Secretary shall promulgate a rule governing a 

4 public, competitive grants process through which re5 tail power providers may apply for Federal support 

6 under this section. 

7 (i) NONDUPLICITY.—Nothing in this section shall be 

8 construed to supersede, duplicate, cancel, or negate the 

9 programs or authorities provided under section 9 of the 

10 Cooperative Forestry Assistance Act of 1978 (92 Stat. 

11 369; Public Law 95–313; 16 U.S.C. 2105). 

12 (j) AUTHORIZATION OF APPROPRIATIONS.—There 

13 are hereby authorized to be appropriated such sums as 

14 may be necessary for the implementation of this section. 

15 SEC. 206. ENERGY EFFICIENCY FOR DATA CENTER BUILD16 INGS. 

17 Section 453(c)(1) of the Energy Independence and 

18 Security Act of 2007 (42 U.S.C. 17112(c)(1)) is amended 

19 by inserting ‘‘but not later than 2 years after the date 

20 of enactment of this Act’’ after ‘‘described in subsection 

21 (b)’’. 

22 SEC. 207. COMMUNITY BUILDING CODE ADMINISTRATION 

23 GRANTS. 

24 (a) GRANT PROGRAM AUTHORIZED.— 
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1 (1) GRANT AUTHORIZATION.—The Secretary of 

2 Housing and Urban Development shall to the extent 

3 amounts are made available for grants under this 

4 section provide grants to local building code enforce5 ment departments. 

6 (2) COMPETITIVE AWARDS.—The Secretary 

7 shall award grants under paragraph (1) on a com8 petitive basis taking into consideration the following: 

9 (A) The financial need of each building 

10 code enforcement department. 

11 (B) The benefit to the jurisdiction of hav12 ing an adequately funded building code enforce13 ment department. 

14 (C) The demonstrated ability of each build15 ing code enforcement department to work coop16 eratively with other local code enforcement of17 fices, health departments, and local prosecu18 torial agencies. 

19 (3) MAXIMUM AMOUNT.—The maximum 

20 amount of any grant awarded under this subsection 

21 shall not exceed $1,000,000. 

22 (4) COORDINATION.—The Secretary of Housing 

23 and Urban Development shall coordinate with the 

24 Secretary of Energy to ensure that any unneces25 sarily duplicative funding through grants under this 
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1 section of activities otherwise funded through the 

2 Department of Energy is minimized or eliminated. 

3 (b) REQUIRED ELEMENTS IN GRANT PROPOSALS.— 

4 In order to be eligible for a grant under subsection (a), 

5 a building code enforcement department of a jurisdiction 

6 shall submit to the Secretary the following: 

7 (1) A demonstration of the jurisdiction’s needs 

8 in executing building code enforcement administra9 tion. 

10 (2) A plan for the use of any funds received 

11 from a grant under this section that addresses the 

12 needs discussed in paragraph (1) and that is con13 sistent with the authorized uses established in sub14 section (c). 

15 (3) A plan for local governmental actions to be 

16 taken to establish and sustain local building code en17 forcement administration functions, without con18 tinuing Federal support, at a level at least equiva19 lent to that proposed in the grant application. 

20 (4) A plan to create and maintain a program of 

21 public outreach that includes a regularly updated 

22 and readily accessible means of public communica23 tion, interaction, and reporting regarding the serv24 ices and work of the building code enforcement de25 partment to be supported by the grant. 
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1 (5) A plan for ensuring the timely and effective 

2 administrative enforcement of building safety and 

3 fire prevention violations. 

4 (c) USE OF FUNDS; MATCHING FUNDS.— 

5 (1) AUTHORIZED USES.—Amounts from grants 

6 awarded under subsection (a) may be used by the 

7 grant recipient to supplement existing State or local 

8 funding for administration of building code enforce9 ment, or to supplement allowance value received pur10 suant to this Act for implementation and enforce11 ment of energy efficiency building codes. Such 

12 amounts may be used to increase staffing, provide 

13 staff training, increase staff competence and profes14 sional qualifications, or support individual certifi15 cation or departmental accreditation, or for capital 

16 expenditures specifically dedicated to the administra17 tion of the building code enforcement department. 

18 (2) ADDITIONAL REQUIREMENT.—Each build19 ing code enforcement department receiving a grant 

20 under subsection (a) shall empanel a code adminis21 tration and enforcement team consisting of at least 

22 1 full-time building code enforcement officer, a city 

23 planner, and a health planner or similar officer. 

24 (3) MATCHING FUNDS REQUIRED.— 
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1 (A) IN GENERAL.—To be eligible to receive 

2 a grant under this section, a building code en3 forcement department shall provide matching, 

4 non-Federal funds in the following amount: 

5 (i) In the case of a building code en6 forcement department serving an area with 

7 a population of more than 50,000, an 

8 amount equal to not less than 50 percent 

9 of the total amount of any grant to be 

10 awarded under this section. 

11 (ii) In the case of a building code en12 forcement department serving an area with 

13 a population of between 20,001 and 

14 50,000, an amount equal to not less than 

15 25 percent of the total amount of any 

16 grant to be awarded under this section. 

17 (iii) In the case of a building code en18 forcement department serving an area with 

19 a population of less than 20,000, an 

20 amount equal to not less than 12.5 percent 

21 of the total amount of any grant to be 

22 awarded under this section. 

23 (B) ECONOMIC DISTRESS.— 

24 (i) IN GENERAL.—The Secretary may 

25 waive the matching fund requirements 
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1 under subparagraph (A), and institute, by 

2 regulation, new matching fund require3 ments based upon the level of economic 

4 distress of the jurisdiction in which the 

5 local building code enforcement department 

6 seeking such grant is located. 

7 (ii) CONTENT OF REGULATIONS.—Any 

8 regulations instituted under clause (i) shall 

9 include— 

10 (I) a method that allows for a 

11 comparison of the degree of economic 

12 distress among the local jurisdictions 

13 of grant applicants, as measured by 

14 the differences in the extent of growth 

15 lag, the extent of poverty, and the ad16 justed age of housing in such jurisdic17 tion; and 

18 (II) any other factor determined 

19 to be relevant by the Secretary in as20 sessing the comparative degree of eco21 nomic distress among such jurisdic22 tions. 

23 (4) IN-KIND CONTRIBUTIONS.—In determining 

24 the non-Federal share required to be provided under 

25 paragraph (3), the Secretary shall consider in-kind 
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1 contributions, not to exceed 50 percent of the 

2 amount that the department contributes in non-Fed3 eral funds. 

4 (5) WAIVER OF MATCHING REQUIREMENT.— 

5 The Secretary shall waive the matching fund re6 quirements under paragraph (3) for any recipient ju7 risdiction that has dedicated all building code per8 mitting fees to the conduct of local building code en9 forcement. 

10 (d) EVALUATION AND REPORT.— 

11 (1) IN GENERAL.—Grant recipients under this 

12 section shall— 

13 (A) be obligated to fully account and re14 port for the use of all grants funds; and 

15 (B) provide a report to the Secretary on 

16 the effectiveness of the program undertaken by 

17 the grantee and any other criteria requested by 

18 the Secretary for the purpose of indicating the 

19 effectiveness of, and ideas for, refinement of the 

20 grant program. 

21 (2) REPORT.—The report required under para22 graph (1)(B) shall include a discussion of— 

23 (A) the specific capabilities and functions 

24 in local building code enforcement administra-
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1 tion that were addressed using funds received 

2 under this section; 

3 (B) the lessons learned in carrying out the 

4 plans supported by the grant; and 

5 (C) the manner in which the programs 

6 supported by the grant are to be maintained by 

7 the grantee. 

8 (3) CONTENT OF REPORTS.—The Secretary 

9 shall— 

10 (A) require each recipient of a grant under 

11 this section to file interim and final reports 

12 under paragraph (2) to ensure that grant funds 

13 are being used as intended and to measure the 

14 effectiveness and benefits of the grant program; 

15 and 

16 (B) develop and maintain a means whereby 

17 the public can access such reports, at no cost, 

18 via the Internet. 

19 (e) DEFINITIONS.—For purposes of this section, the 

20 following definitions shall apply: 

21 (1) BUILDING CODE ENFORCEMENT.—The term 

22 ‘‘building code enforcement’’ means the enforcement 

23 of any code, adopted by a State or local government, 

24 that regulates the construction of buildings and fa25 cilities to mitigate hazards to life or property. Such 
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1 term includes building codes, electrical codes, energy 

2 codes, fire codes, fuel gas codes, mechanical codes, 

3 and plumbing codes. 

4 (2) BUILDING CODE ENFORCEMENT DEPART5 MENT.—The term ‘‘building code enforcement de6 partment’’ means an inspection or enforcement 

7 agency of a jurisdiction that is responsible for con8 ducting building code enforcement. 

9 (3) JURISDICTION.—The term ‘‘jurisdiction’’ 

10 means a city, county, parish, city and county author11 ity, or city and parish authority having local author12 ity to enforce building codes and regulations and to 

13 collect fees for building permits. 

14 (4) SECRETARY.—The term ‘‘Secretary’’ means 

15 the Secretary of Housing and Urban Development. 

16 (f) AUTHORIZATION OF APPROPRIATIONS.— 

17 (1) IN GENERAL.—There are authorized to be 

18 appropriated $20,000,000 for each of fiscal years 

19 2010 through 2014 to the Secretary of Housing and 

20 Urban Development to carry out the provisions of 

21 this section. 

22 (2) RESERVATION.—From the amount made 

23 available under paragraph (1), the Secretary may re24 serve not more than 5 percent for administrative 

25 costs. 
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1 (3) AVAILABILITY.—Any funds appropriated 

2 pursuant to paragraph (1) shall remain available 

3 until expended. 

4 SEC. 208. SOLAR ENERGY SYSTEMS BUILDING PERMIT RE5 QUIREMENTS FOR RECEIPT OF COMMUNITY 

6 DEVELOPMENT BLOCK GRANT FUNDS. 

7 Section 104 of the Housing and Community Develop8 ment Act of 1974 (42 U.S.C. 5304) is amended by adding 

9 at the end the following new subsection: 

10 ‘‘(n) REQUIREMENTS FOR BUILDING PERMITS RE11 GARDING SOLAR ENERGY SYSTEMS.— 

12 ‘‘(1) IN GENERAL.—A grant under section 106 

13 for a fiscal year may be made only if the grantee 

14 certifies to the Secretary that— 

15 ‘‘(A) in the case of a grant under section 

16 106(a) for any Indian tribe or insular area, 

17 during such fiscal year the cost of any permit 

18 or license, for construction or installation of any 

19 solar energy system for any structure, that is 

20 required by the tribe or insular area or by any 

21 other unit of general local government or other 

22 political subdivision of such tribe or insular 

23 area, complies with paragraph (2); 

24 ‘‘(B) in the case of a grant under section 

25 106(b) for any metropolitan city or urban coun-
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1 ty, during such fiscal year the cost of any per2 mit or license, for construction or installation of 

3 any solar energy system for any structure, that 

4 is required by the metropolitan city or urban 

5 county, or by any other political subdivision of 

6 such city or county, complies with paragraph 

7 (2); and 

8 ‘‘(C) in the case of a grant under section 

9 106(d) for any State, during such fiscal year 

10 the cost of any permit or license, for construc11 tion or installation of any solar energy system 

12 for any structure, that is required by the State, 

13 or by any other unit of general local govern14 ment within any nonentitlement area of such 

15 State, or other political subdivision within any 

16 nonentitlement area of such State or such a 

17 unit of general local government, complies with 

18 paragraph (2). 

19 ‘‘(2) LIMITATION ON COST.—The cost of permit 

20 or license for construction or installation of any 

21 solar energy system complies with this paragraph 

22 only if such cost does not exceed the following 

23 amount: 
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1 ‘‘(A) RESIDENTIAL STRUCTURES.—In the 

2 case of a structure primarily for residential use, 

3 $500. 

4 ‘‘(B) NONRESIDENTIAL STRUCTURES.—In 

5 the case of a structure primarily for nonresiden6 tial use, 1.0 percent of the total cost of the in7 stallation or construction of the solar energy 

8 system, but not in excess of $10,000. 

9 ‘‘(3) NONCOMPLIANCE.—If the Secretary deter10 mines that a grantee of a grant made under section 

11 106 is not in compliance with a certification under 

12 paragraph (1)— 

13 ‘‘(A) the Secretary shall notify the grantee 

14 of such determination; and 

15 ‘‘(B) if the grantee has not corrected such 

16 noncompliance before the expiration of the 6- 

17 month period beginning upon notification under 

18 subparagraph (A), such grantee shall not be eli19 gible for 5 percent of any amounts awarded 

20 under a grant under section 106 for the first 

21 fiscal year that commences after the expiration 

22 of such 6-month period. 

23 ‘‘(4) SOLAR ENERGY SYSTEM.—For purposes of 

24 this subsection, the term ‘solar energy system’ 

25 means, with respect to a structure, equipment that 
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1 uses solar energy to generate electricity for, or to 

2 heat or cool (or provide hot water for use in), such 

3 structure.’’. 

4 SEC. 209. PROHIBITION OF RESTRICTIONS ON RESIDEN5 TIAL INSTALLATION OF SOLAR ENERGY SYS6 TEM. 

7 (a) REGULATIONS.—Within 180 days after the enact8 ment of this Act, the Secretary of Housing and Urban 

9 Development, in consultation with the Secretary of En10 ergy, shall issue regulations— 

11 (1) to prohibit any private covenant, contract 

12 provision, lease provision, homeowners’ association 

13 rule or bylaw, or similar restriction, that impairs the 

14 ability of the owner or lessee of any residential 

15 structure designed for occupancy by 1 family to in16 stall, construct, maintain, or use a solar energy sys17 tem on such residential property; and 

18 (2) to require that whenever any such covenant, 

19 provision, rule or bylaw, or restriction requires ap20 proval for the installation or use of a solar energy 

21 system, the application for approval shall be proc22 essed and approved by the appropriate approving en23 tity in the same manner as an application for ap24 proval of an architectural modification to the prop25 erty, and shall not be willfully avoided or delayed. 
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1 (b) CONTENTS.—The regulations required under sub2 section (a) shall provide that— 

3 (1) such a covenant, provision, rule or bylaw, or 

4 restriction impairs the installation, construction, 

5 maintenance, or use of a solar energy system if it— 

6 (A) unreasonably delays or prevents instal7 lation, maintenance, or use; 

8 (B) unreasonably increases the cost of in9 stallation, maintenance, or use; or 

10 (C) precludes use of such a system; and 

11 (2) any fee or cost imposed on the owner or les12 see of such a residential structure by such a cov13 enant, provision, rule or bylaw, or restriction shall 

14 be considered unreasonable if— 

15 (A) such fee or cost is not reasonable in 

16 comparison to the cost of the solar energy sys17 tem or the value of its use; or 

18 (B) treatment of solar energy systems by 

19 the covenant, provision, rule or bylaw, or re20 striction is not reasonable in comparison with 

21 treatment of comparable systems by the same 

22 covenant, provision, rule or bylaw, or restric23 tion. 

24 (c) SOLAR ENERGY SYSTEM.—For purposes of this 

25 section, the term ‘‘solar energy system’’ means, with re-
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1 spect to a structure, equipment that uses solar energy to 

2 generate electricity for, or to heat or cool (or provide hot 

3 water for use in), such structure. 

4 Subtitle B—Lighting and Appliance 

5 Energy Efficiency Programs 

6 SEC. 211. LIGHTING EFFICIENCY STANDARDS. 

7 (a) OUTDOOR LIGHTING.— 

8 (1) DEFINITIONS.— 

9 (A) Section 340(1) of the Energy Policy 

10 and Conservation Act (42 U.S.C. 6311(1)) is 

11 amended by striking subparagraph (L) and in12 serting the following: 

13 ‘‘(L) Outdoor luminaires. 

14 ‘‘(M) Outdoor high light output lamps. 

15 ‘‘(N) Any other type of industrial equip16 ment which the Secretary classifies as covered 

17 equipment under section 341(b).’’. 

18 (B) Section 340 of the Energy Policy and 

19 Conservation Act (42 U.S.C. 6311) is amended 

20 as adding at the end the following: 

21 ‘‘(25) The term ‘luminaire’ means a complete 

22 lighting unit consisting of one or more light sources 

23 and ballast(s), together with parts designed to dis24 tribute the light, to position and protect such lamps, 
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1 and to connect such light sources to the power sup2 ply. 

3 ‘‘(26) The term ‘outdoor luminaire’ means a lu4 minaire that is listed as suitable for wet locations 

5 pursuant to Underwriters Laboratories Inc. stand6 ard UL 1598 and is labeled as ‘Suitable for Wet Lo7 cations’ consistent with section 410.4(A) of the Na8 tional Electrical Code 2005, or is designed for road9 way illumination and meets the requirements of Ad10 dendum A for IESNA TM–15–07: Backlight, 

11 Uplight, and Glare (BUG) Ratings, except for— 

12 ‘‘(A) luminaires designed for outdoor video 

13 display images that cannot be used in general 

14 lighting applications; 

15 ‘‘(B) portable luminaires designed for use 

16 at construction sites; 

17 ‘‘(C) luminaires designed for continuous 

18 immersion in swimming pools and other water 

19 features; 

20 ‘‘(D) seasonal luminaires incorporating 

21 solely individual lamps rated at 10 watts or 

22 less; 

23 ‘‘(E) luminaires designed to be used in 

24 emergency conditions that incorporate a means 

25 of charging a battery and a device to switch the 
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1 power supply to emergency lighting loads auto2 matically upon failure of the normal power sup3 ply; 

4 ‘‘(F) components used for repair of in5 stalled luminaries and that meet the require6 ments of section 342(h); 

7 ‘‘(G) a luminaire utilizing an electrode-less 

8 fluorescent lamp as the light source; 

9 ‘‘(H) decorative gas lighting systems; 

10 ‘‘(I) luminaires designed explicitly for 

11 lighting for theatrical purposes, including per12 formance, stage, film production, and video pro13 duction; 

14 ‘‘(J) luminaires designed as theme ele15 ments in theme/amusement parks and that can16 not be used in most general lighting applica17 tions; 

18 ‘‘(K) luminaires designed explicitly for ve19 hicular roadway tunnels designed to comply 

20 with ANSI/IESNA RP–22–05; 

21 ‘‘(L) luminaires designed explicitly for haz22 ardous locations meeting UL Standard 844; 

23 ‘‘(M) searchlights; 
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1 ‘‘(N) luminaires that are designed to be re2 cessed into a building, and that cannot be used 

3 in most general lighting applications; 

4 ‘‘(O) a luminaire rated only for residential 

5 applications utilizing a light source or sources 

6 regulated under the amendments made by sec7 tion 321 of the Energy Independence and Secu8 rity Act of 2007 and with a light output no 

9 greater than 2,600 lumens; 

10 ‘‘(P) a residential pole-mounted luminaire 

11 that is not rated for commercial use utilizing a 

12 light source or sources meeting the efficiency 

13 requirements of section 231 of the Energy 

14 Independence and Security Act of 2007 and 

15 mounted on a post or pole not taller than 10.5 

16 feet above ground and with a light output not 

17 greater than 2,600 lumens; 

18 ‘‘(Q) a residential fixture with E12 (Can19 delabra) bases that is rated for not more than 

20 300 watts total; or 

21 ‘‘(R) a residential fixture with medium 

22 screw bases that is rated for not more than 145 

23 watts. 

24 ‘‘(27) The term ‘outdoor high light outputlamp’ 

25 means a lamp that— 
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1 ‘‘(A) has a rated lumen output not less 

2 than 2601 lumens; 

3 ‘‘(B) is capable of being operated at a volt4 age not less than 110 volts and not greater 

5 than 300 volts, or driven at a constant current 

6 of 6.6 amperes; 

7 ‘‘(C) is not a Parabolic Aluminized Reflec8 tor lamp; and 

9 ‘‘(D) is not a J-type double-ended (T–3) 

10 halogen quartz lamp, utilizing R–7S bases, that 

11 is manufactured before January 1, 2015. 

12 ‘‘(28) The term ‘outdoor lighting control’ means 

13 a device incorporated in a luminaire that receives a 

14 signal, from either a sensor (such as an occupancy 

15 sensor, motion sensor, or daylight sensor) or an 

16 input signal (including analog or digital signals com17 municated through wired or wireless technology), 

18 and can adjust the light level according to the sig19 nal.’’. 

20 (2) STANDARDS.— Section 342 of the Energy 

21 Policy and Conservation Act (42 U.S.C. 6313) is 

22 amended by adding at the end the following: 

23 ‘‘(g) OUTDOOR LUMINAIRES.— 

24 ‘‘(1) Each outdoor luminaire manufactured on 

25 or after January 1, 2016, shall— 
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1 ‘‘(A) have an initial luminaire efficacy of 

2 at least 50 lumens per watt; and 

3 ‘‘(B) be designed to use a light source with 

4 a lumen maintenance, calculated as mean rated 

5 lumens divided by initial lumens, of at least 0.6. 

6 ‘‘(2) Each outdoor luminaire manufactured on 

7 or after January 1, 2018, shall— 

8 ‘‘(A) have an initial luminaire efficacy of 

9 at least 70 lumens per watt; and 

10 ‘‘(B) be designed to use a light source with 

11 a lumen maintenance, calculated as mean rated 

12 lumens divided by initial lumens, of at least 0.6. 

13 ‘‘(3) In addition to the requirements of para14 graphs (1) through (3), each outdoor luminaire man15 ufactured on or after January 1, 2016, shall have 

16 the capability of producing at least two different 

17 light levels, including 100 percent and 60 percent of 

18 full lamp output as tested with the maximum rated 

19 lamp per UL1598 or the manufacturer’s maximum 

20 specified for the luminaire under test. Outdoor lumi21 naries used for roadway lighting applications shall 

22 be exempt the 2 light level requirement. 

23 ‘‘(4)(A) Not later than January 1, 2022, the 

24 Secretary shall issue a final rule amending the appli-
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1 cable standards established in paragraph (3) if tech2 nologically feasible and economically justified. 

3 ‘‘(B) A final rule issued under subparagraph 

4 (A) shall establish efficiency standards at the max5 imum level that is technically feasible and economi6 cally justified, as provided in subsections (o) and (p) 

7 of section 325. The Secretary may also, in such rule8 making, amend or discontinue the product exclusions 

9 listed in section 340(26)(A) through (P), or amend 

10 the lumen maintenance requirements in paragraph 

11 (2) if the Secretary determines that such amend12 ments are consistent with the purposes of this Act. 

13 ‘‘(C) If the Secretary issues a final rule under 

14 subparagraph (A) establishing amended standards, 

15 the final rule shall provide that the amended stand16 ards apply to products manufactured on or after 

17 January 1, 2025, or 1 year after the date on which 

18 the final amended standard is published, whichever 

19 is later. 

20 ‘‘(h) OUTDOOR HIGH LIGHT OUTPUT LAMPS.—Each 

21 outdoor high light output lamp manufactured on or after 

22 January 1, 2017, shall have a lighting efficiency of at least 

23 45 lumens per watt.’’. 

24 (3) TEST PROCEDURES.— Section 343(a) of the 

25 Energy Policy and Conservation Act (42 U.S.C. 
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1 6314(a)) is amended by adding at the end the fol2 lowing: 

3 ‘‘(10) OUTDOOR LIGHTING.— 

4 ‘‘(A) With respect to outdoor luminaires 

5 and outdoor high light output lamps, the test 

6 procedures shall be based upon the test proce7 dures specified in illuminating engineering soci8 ety procedures LM–79 as of March 1, 2009, 

9 and LM–31, and/or other appropriate con10 sensus test procedures developed by the Illu11 minating Engineering Society or other appro12 priate consensus standards bodies. 

13 ‘‘(B) If illuminating engineering society 

14 procedure LM–79 is amended, the Secretary 

15 shall amend the test procedures established in 

16 subparagraph (A) as necessary to be consistent 

17 with the amended LM–79 test procedure, unless 

18 the Secretary determines, by rule, published in 

19 the Federal Register and supported by clear 

20 and convincing evidence, that to do so would 

21 not meet the requirements for test procedures 

22 under paragraph (2). 

23 ‘‘(C) The Secretary may revise the test 

24 procedures for outdoor luminaires or outdoor 

25 high light output lamps by rule consistent with 
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1 paragraph (2), and may incorporate as appro2 priate consensus test procedures developed by 

3 the Illuminating Engineering Society or other 

4 appropriate consensus standards bodies.’’. 

5 (4) PREEMPTION.— Section 345 of the Energy 

6 Policy and Conservation Act (42 U.S.C. 6316) is 

7 amended by adding at the end the following: 

8 ‘‘(i)(1) Except as provided in paragraph (2), section 

9 327 shall apply to outdoor luminaires to the same extent 

10 and in the same manner as the section applies under part 

11 B. 

12 ‘‘(2) Any State standard that is adopted on or before 

13 January 1, 2015, pursuant to a statutory requirement to 

14 adopt efficiency standards for reducing outdoor lighting 

15 energy use enacted prior to January 31, 2008, shall not 

16 be preempted.’’. 

17 (5) ENERGY EFFICIENCY STANDARDS FOR CER18 TAIN LUMINAIRES.—Not later than 1 year after the 

19 date of enactment of this Act, the Secretary of En20 ergy shall, in consultation with the National Elec21 trical Manufacturers Association, collect data for 

22 United States sales of luminaires described in sec23 tion 340(26)(H) and (M) of the Energy Policy and 

24 Conservation Act, to determine the historical growth 

25 rate. If the Secretary finds that the growth in mar-
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1 ket share of such luminaires exceeds twice the year2 to-year rate of the average of the previous 3 years, 

3 then the Secretary shall within 12 months initiate a 

4 rulemaking to determine if such exclusion should be 

5 eliminated, if substitute products exist that perform 

6 more efficiently and fulfill the performance functions 

7 of these luminaires. 

8 (b) PORTABLE LIGHTING.— 

9 (1) PORTABLE LIGHT FIXTURES.— 

10 (A) DEFINITIONS.—Section 321 of the En11 ergy Policy and Conservation Act (42 U.S.C. 

12 6291) is amended by adding at the end the fol13 lowing: 

14 ‘‘(67) ART WORK LIGHT FIXTURE.—The term 

15 ‘art work light fixture’ means a light fixture de16 signed only to be mounted directly to an art work 

17 and for the purpose of illuminating that art work. 

18 ‘‘(68) LED LIGHT ENGINE.—The term ‘LED 

19 light engine’ or ‘LED light engine with integral heat 

20 sink’ means a subsystem of an LED light fixture 

21 that— 

22 ‘‘(A) includes 1 or more LED components, 

23 including— 

24 ‘‘(i) an LED driver power source with 

25 electrical and mechanical interfaces; and 
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1 ‘‘(ii) an integral heat sink to provide 

2 thermal dissipation; and 

3 ‘‘(B) may be designed to accept additional 

4 components that provide aesthetic, optical, and 

5 environmental control. 

6 ‘‘(69) LED LIGHT FIXTURE.—The term ‘LED 

7 light fixture’ means a complete lighting unit con8 sisting of— 

9 ‘‘(A) an LED light source with 1 or more 

10 LED lamps or LED light engines; and 

11 ‘‘(B) parts— 

12 ‘‘(i) to distribute the light; 

13 ‘‘(ii) to position and protect the light 

14 source; and 

15 ‘‘(iii) to connect the light source to 

16 electrical power. 

17 ‘‘(70) LIGHT FIXTURE.—The term ‘light fix18 ture’ means a product designed to provide light that 

19 includes— 

20 ‘‘(A) at least 1 lamp socket; and 

21 ‘‘(B) parts— 

22 ‘‘(i) to distribute the light; 

23 ‘‘(ii) position and protect 1 or more 

24 lamps; and 
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1 ‘‘(iii) to connect 1 or more lamps to a 

2 power supply. 

3 ‘‘(71) PORTABLE LIGHT FIXTURE.— 

4 ‘‘(A) IN GENERAL.—The term ‘portable 

5 light fixture’ means a light fixture that has a 

6 flexible cord and an attachment plug for con7 nection to a nominal 120-volt circuit that— 

8 ‘‘(i) allows the user to relocate the 

9 product without any rewiring; and 

10 ‘‘(ii) typically can be controlled with a 

11 switch located on the product or the power 

12 cord of the product. 

13 ‘‘(B) EXCLUSIONS.—The term ‘portable 

14 light fixture’ does not include— 

15 ‘‘(i) direct plug-in night lights, sun or 

16 heat lamps, medical or dental lights, port17 able electric hand lamps, signs or commer18 cial advertising displays, photographic 

19 lamps, germicidal lamps, or light fixtures 

20 for marine use or for use in hazardous lo21 cations (as those terms are defined in 

22 ANSI/NFPA 70 of the National Electrical 

23 Code); or 

24 ‘‘(ii) decorative lighting strings, deco25 rative lighting outfits, or electric candles or 
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1 candelabra without lamp shades that are 

2 covered by Underwriter Laboratories (UL) 

3 standard 588, ‘Seasonal and Holiday Dec4 orative Products’.’’. 

5 (B) COVERAGE.— 

6 (i) IN GENERAL.—Section 322(a) of 

7 the Energy Policy and Conservation Act 

8 (42 U.S.C. 6292(a)) is amended— 

9 (I) by redesignating paragraph 

10 (20) as paragraph (24); and 

11 (II) by inserting after paragraph 

12 (19) the following: 

13 ‘‘(20) Portable light fixtures.’’. 

14 (ii) CONFORMING AMENDMENTS.— 

15 Section 325(l) of the Energy Policy and 

16 Conservation Act (42 U.S.C. 6295(l)) is 

17 amended by striking ‘‘paragraph (19)’’ 

18 each place it appears in paragraphs (1) 

19 and (2) and inserting ‘‘paragraph (24)’’. 

20 (C) TEST PROCEDURES.—Section 323(b) 

21 of the Energy Policy and Conservation Act (42 

22 U.S.C. 6293(b)) is amended by adding at the 

23 end the following: 

24 ‘‘(19) LED FIXTURES AND LED LIGHT EN25 GINES.—Test procedures for LED fixtures and LED 
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1 light engines shall be based on Illuminating Engi2 neering Society of North America (IESNA) test pro3 cedure LM–79, Approved Method for Electrical and 

4 Photometric Testing of Solid-State Lighting Devices, 

5 and IESNA-approved test procedure for testing 

6 LED light engines.’’. 

7 (D) STANDARDS.—Section 325 of the En8 ergy Policy and Conservation Act (42 U.S.C. 

9 6295) is amended— 

10 (i) by redesignating subsection (ii) as 

11 subsection (oo); 

12 (ii) in subsection (oo)(2), as redesig13 nated in clause (i) of this subparagraph, by 

14 striking ‘‘(hh)’’ each place it appears and 

15 inserting ‘‘(mm)’’; and 

16 (iii) by inserting after subsection (hh) 

17 the following: 

18 ‘‘(ii) PORTABLE LIGHT FIXTURES.— 

19 ‘‘(1) IN GENERAL.—Subject to paragraphs (2) 

20 and (3), portable light fixtures manufactured on or 

21 after January 1, 2012, shall meet 1 or more of the 

22 following requirements: 

23 ‘‘(A) Be a fluorescent light fixture that 

24 meets the requirements of the Energy Star Pro-
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1 gram for Residential Light Fixtures, Version 

2 4.2. 

3 ‘‘(B) Be equipped with only 1 or more 

4 GU–24 line-voltage sockets, not be rated for 

5 use with incandescent lamps of any type (as de6 fined in ANSI standards), and meet the re7 quirements of version 4.2 of the Energy Star 

8 program for residential light fixtures. 

9 ‘‘(C) Be an LED light fixture or a light 

10 fixture with an LED light engine and comply 

11 with the following minimum requirements: 

12 ‘‘(i) Minimum light output: 200 

13 lumens (initial). 

14 ‘‘(ii) Minimum LED light engine effi15 cacy: 40 lumens/watt installed in fixtures 

16 that meet the minimum light fixture effi17 cacy of 29 lumens/watt or, alternatively, a 

18 minimum LED light engine efficacy of 60 

19 lumens/watt for fixtures that do not meet 

20 the minimum light fixture efficacy of 29 

21 lumens/watt. 

22 ‘‘(iii) All portable fixtures shall have a 

23 minimum LED light fixture efficacy of 29 

24 lumens/watt and a minimum LED light 
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1 engine efficacy of 60 lumens/watt by Janu2 ary 1, 2016. 

3 ‘‘(iv) Color Correlated Temperature 

4 (CCT): 2700K through 4000K. 

5 ‘‘(v) Minimum Color Rendering Index 

6 (CRI): 75. 

7 ‘‘(vi) Power factor equal to or greater 

8 than 0.70. 

9 ‘‘(vii) Portable luminaries that have 

10 internal power supplies shall have zero 

11 standby power when the luminaire is 

12 turned off. 

13 ‘‘(viii) LED light sources shall deliver 

14 at least 70 percent of initial lumens for at 

15 least 25,000 hours. 

16 ‘‘(D)(i) Be equipped with an ANSI-des17 ignated E12, E17, or E26 screw-based socket 

18 and be prepackaged and sold together with 1 

19 screw-based compact fluorescent lamp or screw20 based LED lamp for each screw-based socket 

21 on the portable light fixture. 

22 ‘‘(ii) The compact fluorescent or LED 

23 lamps prepackaged with the light fixture shall 

24 be fully compatible with any light fixture con25 trols incorporated into the light fixture (for ex-
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1 ample, light fixtures with dimmers shall be 

2 packed with dimmable lamps). 

3 ‘‘(iii) Compact fluorescent lamps pre4 packaged with light fixtures shall meet the re5 quirements of the Energy Star Program for 

6 CFLs Version 4.0. 

7 ‘‘(iv) Screw-based LED lamps shall comply 

8 with the minimum requirements described in 

9 subparagraph (C). 

10 ‘‘(E) Be equipped with 1 or more single11 ended, non-screw based halogen lamp sockets 

12 (line or low voltage), a dimmer control or high13 low control, and be rated for a maximum of 100 

14 watts. 

15 ‘‘(2) REVIEW.— 

16 ‘‘(A) REVIEW.—The Secretary shall review 

17 the criteria and standards established under 

18 paragraph (1) to determine if revised standards 

19 are technologically feasible and economically 

20 justified. 

21 ‘‘(B) COMPONENTS.—The review shall in22 clude consideration of— 

23 ‘‘(i) whether a separate compliance 

24 procedure is still needed for halogen fix25 tures described in subparagraph (E) and, 
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1 if necessary, what an appropriate standard 

2 for halogen fixtures shall be; 

3 ‘‘(ii) whether the specific technical cri4 teria described in subparagraphs (A), (C), 

5 and (D)(iii) should be modified; and 

6 ‘‘(iii) which fixtures should be exempt7 ed from the light fixture efficacy standard 

8 as of January 1, 2016, because the fix9 tures are primarily decorative in nature (as 

10 defined by the Secretary) and, even if ex11 empted, are likely to be sold in limited 

12 quantities. 

13 ‘‘(C) TIMING.— 

14 ‘‘(i) DETERMINATION.—Not later 

15 than January 1, 2014, the Secretary shall 

16 publish amended standards, or a deter17 mination that no amended standards are 

18 justified, under this subsection. 

19 ‘‘(ii) STANDARDS.—Any standards 

20 under this paragraph shall take effect on 

21 January 1, 2016. 

22 ‘‘(3) ART WORK LIGHT FIXTURES.—Art work 

23 light fixtures manufactured on or after January 1, 

24 2012, shall— 

25 ‘‘(A) comply with paragraph (1); or 
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1 ‘‘(B)(i) contain only ANSI-designated E12 

2 screw-based line-voltage sockets; 

3 ‘‘(ii) have not more than 3 sockets; 

4 ‘‘(iii) be controlled with an integral high/ 

5 low switch; 

6 ‘‘(iv) be rated for not more than 25 watts 

7 if fitted with 1 socket; and 

8 ‘‘(v) be rated for not more than 15 watts 

9 per socket if fitted with 2 or 3 sockets. 

10 ‘‘(4) EXCEPTION FROM PREEMPTION.—Not11 withstanding section 327, Federal preemption shall 

12 not apply to a regulation concerning portable light 

13 fixtures adopted by the California Energy Commis14 sion on or before January 1, 2014.’’. 

15 (2) GU–24 BASE LAMPS.— 

16 (A) DEFINITIONS.—Section 321 of the En17 ergy Policy and Conservation Act (42 U.S.C. 

18 6291) (as amended by paragraph (1)(A)) is 

19 amended by adding at the end the following: 

20 ‘‘(72) GU–24.—The term ‘GU–24’ means the 

21 designation of a lamp socket, based on a coding sys22 tem by the International Electrotechnical Commis23 sion, under which— 
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1 ‘‘(A) ‘G’ indicates a holder and socket type 

2 with 2 or more projecting contacts, such as pins 

3 or posts; 

4 ‘‘(B) ‘U’ distinguishes between lamp and 

5 holder designs of similar type that are not 

6 interchangeable due to electrical or mechanical 

7 requirements; and 

8 ‘‘(C) 24 indicates the distance in millime9 ters between the electrical contact posts. 

10 ‘‘(73) GU–24 ADAPTOR.— 

11 ‘‘(A) IN GENERAL.—The term ‘GU–24 

12 Adaptor’ means a 1-piece device, pig-tail, wiring 

13 harness, or other such socket or base attach14 ment that— 

15 ‘‘(i) connects to a GU–24 socket on 1 

16 end and provides a different type of socket 

17 or connection on the other end; and 

18 ‘‘(ii) does not alter the voltage. 

19 ‘‘(B) EXCLUSION.—The term ‘GU–24 

20 Adaptor’ does not include a fluorescent ballast 

21 with a GU–24 base. 

22 ‘‘(74) GU–24 BASE LAMP.—‘GU–24 base lamp’ 

23 means a light bulb designed to fit in a GU–24 sock24 et.’’. 
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1 (B) STANDARDS.—Section 325 of the En2 ergy Policy and Conservation Act (42 U.S.C. 

3 6295) (as amended by paragraph (1)(D)) is 

4 amended by inserting after subsection (ii) the 

5 following: 

6 ‘‘(jj) GU–24 BASE LAMPS.— 

7 ‘‘(1) IN GENERAL.—A GU–24 base lamp shall 

8 not be an incandescent lamp as defined by ANSI. 

9 ‘‘(2) GU–24 ADAPTORS.—GU–24 adaptors shall 

10 not adapt a GU–24 socket to any other line voltage 

11 socket.’’. 

12 (3) STANDARDS FOR CERTAIN INCANDESCENT

13 REFLECTOR LAMPS.—Section 325(i) of the Energy 

14 Policy and Conservation Act (42 U.S.C. 6295(i)), as 

15 amended by section 161(a)(12) of this Act, is 

16 amended by adding at the end the following: 

17 ‘‘(9) CERTAIN INCANDESCENT REFLECTOR

18 LAMPS.—(A) No later than 12 months after enact19 ment of this paragraph, the Secretary shall publish 

20 a final rule establishing standards for incandescent 

21 reflector lamp types described in paragraph (1)(D). 

22 Such standards shall be effective on July 1, 2013. 

23 ‘‘(B) Any rulemaking for incandescent reflector 

24 lamps completed after enactment of this section 

25 shall consider standards for all incandescent reflec-
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1 tor lamps, inclusive of those specified in paragraph 

2 (1)(C). 

3 ‘‘(10) REFLECTOR LAMPS.—No later than Jan4 uary 1, 2015, the Secretary shall publish a final rule 

5 establishing and amending standards for reflector 

6 lamps, including incandescent reflector lamps. Such 

7 standards shall be effective no sooner than 3 years 

8 after publication of the final rule. Such rulemaking 

9 shall consider incandescent and nonincandescent 

10 technologies. Such rulemaking shall consider a new 

11 metric other than lumens-per-watt based on the pho12 tometric distribution of light from such lamps.’’. 

13 SEC. 212. OTHER APPLIANCE EFFICIENCY STANDARDS. 

14 (a) STANDARDS FOR WATER DISPENSERS, HOT

15 FOOD HOLDING CABINETS, AND PORTABLE ELECTRIC

16 SPAS.— 

17 (1) DEFINITIONS.—Section 321 of the Energy 

18 Policy and Conservation Act (42 U.S.C. 6291), as 

19 amended by section 211 of this Act, is further 

20 amended by adding at the end the following: 

21 ‘‘(75) The term ‘water dispenser’ means a fac22 tory-made assembly that mechanically cools and 

23 heats potable water and that dispenses the cooled or 

24 heated water by integral or remote means. 
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1 ‘‘(76) The term ‘bottle-type water dispenser’ 

2 means a drinking water dispenser designed for dis3 pensing both hot and cold water that uses a remov4 able bottle or container as the source of potable 

5 water. 

6 ‘‘(77) The term ‘commercial hot food holding 

7 cabinet’ means a heated, fully-enclosed compartment 

8 with one or more solid or glass doors that is de9 signed to maintain the temperature of hot food that 

10 has been cooked in a separate appliance. Such term 

11 does not include heated glass merchandising cabi12 nets, drawer warmers, commercial hot food holding 

13 cabinets with interior volumes of less than 8 cubic 

14 feet, or cook-and-hold appliances. 

15 ‘‘(78) The term ‘portable electric spa’ means a 

16 factory-built electric spa or hot tub, supplied with 

17 equipment for heating and circulating water.’’. 

18 (2) COVERAGE.—Section 322(a) of the Energy 

19 Policy and Conservation Act (42 U.S.C. 6292(a)), as 

20 amended by section 211(b)(1)(B) of this Act, is fur21 ther amended by inserting after paragraph (20) the 

22 following new paragraphs: 

23 ‘‘(21) Bottle type water dispensers. 

24 ‘‘(22) Commercial hot food holding cabinets. 

25 ‘‘(23) Portable electric spas.’’. 
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1 (3) TEST PROCEDURES.—Section 323(b) of the 

2 Energy Policy and Conservation Act (42 U.S.C. 

3 6293(b)), as amended by section 211(b)(1)(C) of 

4 this Act, is further amended by adding at the end 

5 the following: 

6 ‘‘(20) BOTTLE TYPE WATER DISPENSERS.— 

7 Test procedures for bottle type water dispensers 

8 shall be based on ‘Energy Star Program Require9 ments for Bottled Water Coolers version 1.1’ pub10 lished by the Environmental Protection Agency. 

11 Units with an integral, automatic timer shall not be 

12 tested using section 4D, ‘Timer Usage,’ of the test 

13 criteria. 

14 ‘‘(21) COMMERCIAL HOT FOOD HOLDING CABI15 NETS.—Test procedures for commercial hot food 

16 holding cabinets shall be based on the test proce17 dures described in ANSI/ASTM F2140–01 (Test for 

18 idle energy rate-dry test). Interior volume shall be 

19 based on the method shown in the Environmental 

20 Protection Agency’s ‘Energy Star Program Require21 ments for Commercial Hot Food Holding Cabinets’ 

22 as in effect on August 15, 2003. 

23 ‘‘(22) PORTABLE ELECTRIC SPAS.—Test proce24 dures for portable electric spas shall be based on the 

25 test method for portable electric spas contained in 
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1 section 1604, title 20, California Code of Regula2 tions as amended on December 3, 2008. When the 

3 American National Standards Institute publishes a 

4 test procedure for portable electric spas, the Sec5 retary shall revise the Department of Energy’s pro6 cedure.’’. 

7 (4) STANDARDS.—Section 325 of the Energy 

8 Policy and Conservation Act (42 U.S.C. 6295), as 

9 amended by section 211 of this Act, is further 

10 amended by adding after subsection (jj) the fol11 lowing: 

12 ‘‘(kk) BOTTLE TYPE WATER DISPENSERS.—Effec13 tive January 1, 2012, bottle-type water dispensers de14 signed for dispensing both hot and cold water shall not 

15 have standby energy consumption greater than 1.2 kilo16 watt-hours per day. 

17 ‘‘(ll) COMMERCIAL HOT FOOD HOLDING CABI18 NETS.—Effective January 1, 2012, commercial hot food 

19 holding cabinets with interior volumes of 8 cubic feet or 

20 greater shall have a maximum idle energy rate of 40 watts 

21 per cubic foot of interior volume. 

22 ‘‘(mm) PORTABLE ELECTRIC SPAS.—Effective Janu23 ary 1, 2012, portable electric spas shall not have a normalized standby power greater than 5(V2 24 ⁄3) Watts where 

25 V=the fill volume in gallons. 
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1 ‘‘(nn) REVISIONS.—The Secretary of Energy shall 

2 consider revisions to the standards in subsections (kk), 

3 (ll), and (mm) in accordance with subsection (o) and pub4 lish a final rule no later than January 1, 2013 establishing 

5 such revised standards, or make a finding that no revi6 sions are technically feasible and economically justified. 

7 Any such revised standards shall take effect January 1, 

8 2016.’’. 

9 (b) COMMERCIAL FURNACE EFFICIENCY STAND10 ARDS.—Section 342(a) of the Energy Policy and Con11 servation Act (42 U.S.C. 6312(a)) is amended by inserting 

12 after paragraph (10) the following new paragraph: 

13 ‘‘(11) WARM AIR FURNACES.—Each warm air 

14 furnace with an input rating of 225,000 Btu per 

15 hour or more and manufactured after January 1, 

16 2011, shall meet the following standard levels: 

17 ‘‘(A) GAS-FIRED UNITS.— 

18 ‘‘(i) Minimum thermal efficiency of 80 

19 percent. 

20 ‘‘(ii) Include an interrupted or inter21 mittent ignition device. 

22 ‘‘(iii) Have jacket losses not exceeding 

23 0.75 percent of the input rating. 

24 ‘‘(iv) Have either power venting or a 

25 flue damper. 
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1 ‘‘(B) OIL-FIRED UNITS.— 

2 ‘‘(i) Minimum thermal efficiency of 81 

3 percent. 

4 ‘‘(ii) Have jacket losses not exceeding 

5 0.75 percent of the input rating. 

6 ‘‘(iii) Have either power venting or a 

7 flue damper.’’. 

8 SEC. 213. APPLIANCE EFFICIENCY DETERMINATIONS AND 

9 PROCEDURES. 

10 (a) DEFINITION OF ENERGY CONSERVATION STAND11 ARD.—Section 321(6) of the Energy Policy and Conserva12 tion Act (42 U.S.C. 6291(6)) is amended to read as fol13 lows: 

14 ‘‘(6) ENERGY CONSERVATION STANDARD.— 

15 ‘‘(A) IN GENERAL.—The term ‘energy con16 servation standard’ means 1 or more perform17 ance standards that— 

18 ‘‘(i) for covered products (excluding 

19 clothes washers, dishwashers, showerheads, 

20 faucets, water closets, and urinals), pre21 scribe a minimum level of energy efficiency 

22 or a maximum quantity of energy use, de23 termined in accordance with test proce24 dures prescribed under section 323; 
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1 ‘‘(ii) for showerheads, faucets, water 

2 closets, and urinals, prescribe a minimum 

3 level of water efficiency or a maximum 

4 quantity of water use, determined in ac5 cordance with test procedures prescribed 

6 under section 323; and 

7 ‘‘(iii) for clothes washers and dish8 washers— 

9 ‘‘(I) prescribe a minimum level of 

10 energy efficiency or a maximum quan11 tity of energy use, determined in ac12 cordance with test procedures pre13 scribed under section 323; and 

14 ‘‘(II) may include a minimum 

15 level of water efficiency or a maximum 

16 quantity of water use, determined in 

17 accordance with those test procedures. 

18 ‘‘(B) INCLUSIONS.—The term ‘energy con19 servation standard’ includes— 

20 ‘‘(i) 1 or more design requirements, if 

21 the requirements were established— 

22 ‘‘(I) on or before the date of en23 actment of this subclause; 

24 ‘‘(II) as part of a direct final rule 

25 under section 325(p)(4); or 
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1 ‘‘(III) as part of a final rule pub2 lished on or after January 1, 2012, 

3 and 

4 ‘‘(ii) any other requirements that the 

5 Secretary may prescribe under section 

6 325(r). 

7 ‘‘(C) EXCLUSION.—The term ‘energy con8 servation standard’ does not include a perform9 ance standard for a component of a finished 

10 covered product, unless regulation of the com11 ponent is specifically authorized or established 

12 pursuant to this title.’’. 

13 (b) ADOPTING CONSENSUS TEST PROCEDURES AND

14 TEST PROCEDURES IN USE ELSEWHERE.—Section 

15 323(b) of the Energy Policy and Conservation Act (42 

16 U.S.C. 6293(b)), as amended by sections 211 and 212 of 

17 this Act, is further amended by adding the following new 

18 paragraph after paragraph (22): 

19 ‘‘(23) CONSENSUS AND ALTERNATE TEST PRO20 CEDURES.— 

21 ‘‘(A) RECEIPT OF JOINT RECOMMENDA22 TION OR ALTERNATE TESTING PROCEDURE.— 

23 On receipt of— 

24 ‘‘(i) a statement that is submitted 

25 jointly by interested persons that are fairly 
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1 representative of relevant points of view 

2 (including representatives of manufactur3 ers of covered products, States, and effi4 ciency advocates), as determined by the 

5 Secretary, and contains recommendations 

6 with respect to the testing procedure for a 

7 covered product; or 

8 ‘‘(ii) a submission of a testing proce9 dure currently in use for a covered product 

10 by a State, nation, or group of nations— 

11 ‘‘(I) if the Secretary determines 

12 that the recommended testing proce13 dure contained in the statement or 

14 submission is in accordance with sub15 section (b)(3), the Secretary may 

16 issue a final rule that establishes an 

17 energy or water conservation testing 

18 procedure that is published simulta19 neously with a notice of proposed rule20 making that proposes a new or 

21 amended energy or water conservation 

22 testing procedure that is identical to 

23 the testing procedure established in 

24 the final rule to establish the rec25 ommended testing procedure (referred 
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1 to in this paragraph as a ‘direct final 

2 rule’); or 

3 ‘‘(II) if the Secretary determines 

4 that a direct final rule cannot be 

5 issued based on the statement or sub6 mission, the Secretary shall publish a 

7 notice of the determination, together 

8 with an explanation of the reasons for 

9 the determination. 

10 ‘‘(B) PUBLIC COMMENT.—The Secretary 

11 shall solicit public comment for a period of at 

12 least 110 days with respect to each direct final 

13 rule issued by the Secretary under subpara14 graph (A)(ii)(I). 

15 ‘‘(C) WITHDRAWAL OF DIRECT FINAL

16 RULES.— 

17 ‘‘(i) IN GENERAL.—Not later than 

18 120 days after the date on which a direct 

19 final rule issued under subparagraph 

20 (A)(ii)(I) is published in the Federal Reg21 ister, the Secretary shall withdraw the di22 rect final rule if— 

23 ‘‘(I) the Secretary receives 1 or 

24 more adverse public comments relat25 ing to the direct final rule under sub-
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1 paragraph (B)or any alternative joint 

2 recommendation; and 

3 ‘‘(II) based on the rulemaking 

4 record relating to the direct final rule, 

5 the Secretary determines that such 

6 adverse public comments or alter7 native joint recommendation may pro8 vide a reasonable basis for with9 drawing the direct final rule under 

10 paragraph (3) or any other applicable 

11 law. 

12 ‘‘(ii) ACTION ON WITHDRAWAL.—On 

13 withdrawal of a direct final rule under 

14 clause (i), the Secretary shall— 

15 ‘‘(I) proceed with the notice of 

16 proposed rulemaking published simul17 taneously with the direct final rule as 

18 described in subparagraph (A)(ii)(I); 

19 and 

20 ‘‘(II) publish in the Federal Reg21 ister the reasons why the direct final 

22 rule was withdrawn. 

23 ‘‘(iii) TREATMENT OF WITHDRAWN DI24 RECT FINAL RULES.—A direct final rule 

25 that is withdrawn under clause (i) shall 
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1 not be considered to be a final rule for 

2 purposes of subsection (b). 

3 ‘‘(D) EFFECT OF PARAGRAPH.—Nothing 

4 in this paragraph authorizes the Secretary to 

5 issue a direct final rule based solely on receipt 

6 of more than 1 statement containing rec7 ommended test procedures relating to the direct 

8 final rule.’’. 

9 (c) UPDATING TELEVISION TEST METHODS.—Sec10 tion 323(b) of the Energy Policy and Conservation Act 

11 (42 U.S.C. 6293(b)), as amended by sections 211 and 212 

12 of this Act, and subsection (b) of this section, is further 

13 amended by adding at the end the following new para14 graph: 

15 ‘‘(24) TELEVISIONS.—(A) On the date of enact16 ment of this paragraph, Appendix H to Subpart B 

17 of Part 430 of the United States Code of Federal 

18 Regulations, ‘Uniform Test Method for Measuring 

19 the Energy Consumption of Television Sets’, is re20 pealed. 

21 ‘‘(B) No later than 12 months after the date of 

22 enactment of this paragraph the Secretary shall pub23 lish in the Federal Register a final rule prescribing 

24 a new test method for televisions.’’. 
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1 (d) CRITERIA FOR PRESCRIBING NEW OR AMENDED

2 STANDARDS.—(1) Section 325(o)(2)(B)(i) of the Energy 

3 Policy and Conservation Act (42 U.S.C. 6295(o)(2)(B)(i)) 

4 is amended as follows: 

5 (A) By striking ‘‘and’’ at the end of subclause 

6 (VI). 

7 (B) By redesignating subclause (VII) as sub8 clause (XI). 

9 (C) By inserting the following new subclauses 

10 after subclause (VI): 

11 ‘‘(VII) the estimated value of the carbon dioxide 

12 and other emission reductions that will be achieved 

13 by virtue of the higher energy efficiency of the cov14 ered products resulting from the imposition of the 

15 standard; 

16 ‘‘(VIII) the estimated impact of standards for a 

17 particular product on average consumer energy 

18 prices; 

19 ‘‘(IX) the increased energy efficiency that may 

20 be attributable to the installation of Smart Grid 

21 technologies or capabilities in the covered products, 

22 if applicable in the determination of the Secretary; 

23 ‘‘(X) the availability in the United States or in 

24 other nations of examples or prototypes of covered 
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1 products that achieve significantly higher efficiency 

2 standards for energy or for water; and’’. 

3 (2) Section 325(o)(2)(B)(iii) of such Act is amended 

4 as follows: 

5 (A) By striking ‘‘three’’ and inserting ‘‘5’’. 

6 (B) By inserting after the first sentence the fol7 lowing ‘‘For products with an average expected use8 ful life of less than 5 years, such rebuttable pre9 sumption shall be determined utilizing 75 percent of 

10 the product’s average expected useful life as a multi11 plier instead of 5.’’. 

12 (C) By striking the last sentence and inserting 

13 the following: ‘‘Such a presumption may be rebutted 

14 only if the Secretary finds, based on clear, con15 vincing, and reliable evidence, that— 

16 ‘‘(I) such standard level would cause serious 

17 and unavoidable hardship to the average consumer 

18 of the product, or to manufacturers supplying a sig19 nificant portion of the market for the product, that 

20 substantially outweighs the standard level’s benefits; 

21 ‘‘(II) the standard and implementing regula22 tions cannot be designed to avoid or mitigate the 

23 hardship identified under subclause (I), through the 

24 adoption of regional standards consistent with para-
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1 graph (6) of this subsection, or other reasonable 

2 means consistent with this part; 

3 ‘‘(III) the same or substantially similar hard4 ship would not occur under a standard adopted in 

5 the absence of the presumption, but that otherwise 

6 meets the requirements of this section; and 

7 ‘‘(IV) the hardship cannot be avoided or miti8 gated pursuant the procedures specified in section 

9 504 of the Department of Energy Organization Act 

10 (42 U.S.C. 7194). 

11 A determination by the Secretary that the criteria trig12 gering such presumption are not met, or that the criterion 

13 for rebutting the presumption are met shall not be taken 

14 into consideration in the Secretary’s determination of 

15 whether a standard is economically justified.’’. 

16 (e) OBTAINING APPLIANCE INFORMATION FROM

17 MANUFACTURERS.—Section 326(d) of the Energy Policy 

18 and Conservation Act (42 U.S.C. 6295(d)) is amended to 

19 read as follows: 

20 ‘‘(d) INFORMATION REQUIREMENTS.—(1) For pur21 poses of carrying out this part, the Secretary shall publish 

22 proposed regulations not later than 1 year after the date 

23 of enactment of the American Clean Energy and Security 

24 Act of 2009, and after receiving public comment, final reg25 ulations not later than 18 months from such date of enact-
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1 ment under this part or other provision of law adminis2 tered by the Secretary, which shall require each manufac3 turer of a covered product to submit information or re4 ports to the Secretary on an annual basis in a form adopt5 ed by the Secretary. Such reports shall include informa6 tion or data with respect to— 

7 ‘‘(A) the manufacturers’ compliance with all re8 quirements applicable pursuant to this part; 

9 ‘‘(B) the economic impact of any proposed en10 ergy conservation standard; 

11 ‘‘(C) the manufacturers’ annual shipments of 

12 each class or category of covered products, orga13 nized, to the maximum extent practicable, by— 

14 ‘‘(i) energy efficiency, energy use, and, if 

15 applicable, water use; 

16 ‘‘(ii) the presence or absence of such effi17 ciency related or energy consuming operational 

18 characteristics or components as the Secretary 

19 determines are relevant for the purposes of car20 rying out this part; and 

21 ‘‘(iii) the State or regional location of sale, 

22 for covered products for which the Secretary 

23 may adopt regional standards; and 

24 ‘‘(D) such other categories of information as 

25 the Secretary deems relevant to carry out this part, 
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1 including such other information as may be nec2 essary to establish and revise test procedures, label3 ing rules, and energy conservation standards and to 

4 insure compliance with the requirements of this 

5 part. 

6 ‘‘(2) In adopting regulations under this subsection, 

7 the Secretary shall consider existing public sources of in8 formation, including nationally recognized certification 

9 programs of trade associations. 

10 ‘‘(3) The Secretary shall exercise authority under this 

11 section in a manner designed to minimize unnecessary 

12 burdens on manufacturers of covered products. 

13 ‘‘(4) To the extent that they do not conflict with the 

14 duties of the Secretary in carrying out this part, the provi15 sions of section 11(d) of the Energy Supply and Environ16 mental Coordination Act of 1974 (15 U.S.C. 796(d)) shall 

17 apply with respect to information obtained under this sub18 section to the same extent and in the same manner as 

19 they apply with respect to other energy information ob20 tained under such section.’’. 

21 (f) STATE WAIVER.—Section 327(c) of the Energy 

22 Policy and Conservation Act (42 U.S.C. 6297(c)), as 

23 amended by section 161(a)(19) of this Act, is further 

24 amended by adding at the end the following: 
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1 ‘‘(12) is a regulation concerning standards for 

2 hot food holding cabinets, drinking water dispensers 

3 and portable electric spas adopted by the California 

4 Energy Commission on or before January 1, 2013.’’. 

5 (g) WAIVER OF FEDERAL PREEMPTION.—Paragraph 

6 (1) of section 327(d) of the Energy Policy and Conserva7 tion Act (42 U.S.C. 6297(d)) is amended as follows: 

8 (1) In subparagraph (A) by striking ‘‘State reg9 ulation’’ each place it appears and inserting ‘‘State 

10 statute or regulation’’. 

11 (2) In subparagraph (B) by adding at the end 

12 the following new sentence: ‘‘In making such a find13 ing, the Secretary may not reject a petition for fail14 ure of the petitioning State or river basin commis15 sion to produce confidential information maintained 

16 by any manufacturer or distributor, or group or as17 sociation of manufacturers or distributors, and 

18 which the petitioning party does not have the legal 

19 right to obtain.’’. 

20 (3) In clause (ii) of subparagraph (C) by strik21 ing ‘‘costs’’ each place it appears and inserting ‘‘es22 timated costs’’. 

23 (4) In subparagraph (C) by striking ‘‘within the 

24 context of the State’s energy plan and forecast, 

25 and,’’. 
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1 (h) INCLUSION OF CARBON OUTPUT ON APPLIANCE

2 ‘‘ENERGYGUIDE’’ LABELS.—(1) Section 324(a)(2) of the 

3 Energy Policy and Conservation Act (42 U.S.C. 

4 6294(a)(2)) is amended by adding the following at the 

5 end: 

6 ‘‘(I)(i) Not later than 90 days after the date of enact7 ment of this subparagraph, the Commission shall initiate 

8 a rulemaking to implement the additional labeling require9 ments specified in subsection (c)(1)(C) of this section with 

10 an effective date for the revised labeling requirement not 

11 later than 12 months from issuance of the final rule. 

12 ‘‘(ii) Not later than 24 months after the date of en13 actment of this subparagraph, the Commission shall com14 plete the rulemaking initiated under clause (i). 

15 ‘‘(iii) Not later than 90 days after issuance of the 

16 final rule as provided in this subparagraph, the Secretary 

17 shall issue calculation methods required to effectuate the 

18 labeling requirements specified in subsection (c)(1)(C) of 

19 this section.’’. 

20 (2) Section 324(c)(1) of the Energy Policy and Con21 servation Act (42 U.S.C. 6294(c)(1)) is amended— 

22 (A) by striking ‘‘and’’ at the end of subpara23 graph (A); 

24 (B) by striking the period at the end of sub25 paragraph (B) and inserting a semicolon; and 
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1 (C) by adding at the end the following new sub2 paragraphs: 

3 ‘‘(C) for products or groups of products pro4 viding a comparable function (including the group of 

5 products comprising the heating function of heat 

6 pumps and furnaces) among covered products listed 

7 in paragraphs (3), (4), (5), (8), (9), (10), and (11) 

8 of section 322(a) of this part, and others designated 

9 by the Secretary, the estimated total annual atmos10 pheric carbon dioxide emissions (or their equivalent 

11 in other greenhouse gases) associated with, or 

12 caused by, the product, calculated utilizing— 

13 ‘‘(i) national average energy use for the 

14 product including energy consumed at the point 

15 of end use based on test procedures developed 

16 under section 323 of this part; 

17 ‘‘(ii) national average energy consumed or 

18 lost in the production, generation, transpor19 tation, storage, and distribution of energy to 

20 the point of end use; and 

21 ‘‘(iii) any direct emissions of greenhouse 

22 gases from the product during normal use; 

23 ‘‘(D) in determining the national average 

24 energy consumption and total annual atmos25 pheric carbon dioxide emissions, the Secretary 
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1 shall utilize Federal Government sources, in2 cluding the Energy Information Administration 

3 Annual Energy Review, the Environmental Pro4 tection Agency eGRID database, Environmental 

5 Protection Agency AP–42 Emission Factors as 

6 amended, and other sources determined to be 

7 appropriate by the Secretary; and 

8 ‘‘(E) information presenting, for each 

9 product (or group of products providing the 

10 comparable function) identified in section 

11 (c)(1)(C) of this section, the estimated annual 

12 carbon dioxide emissions calculated within the 

13 range of emissions calculated for all models of 

14 the product or group according to its function, 

15 including those models consuming fuels and 

16 those models not consuming fuels.’’. 

17 (i) PERMITTING STATES TO SEEK INJUNCTIVE EN18 FORCEMENT.—(1) Section 334 of the Energy Policy and 

19 Conservation Act (42 U.S.C. 6304) is amended to read 

20 as follows: 

21 ‘‘SEC. 334. JURISDICTION AND VENUE. 

22 ‘‘(a) JURISDICTION.—The United States district 

23 courts shall have jurisdiction to restrain— 

24 ‘‘(1) any violation of section 332; and 
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1 ‘‘(2) any person from distributing in commerce 

2 any covered product which does not comply with an 

3 applicable rule under section 324 or 325. 

4 ‘‘(b) AUTHORITY.—Any action referred to in sub5 section (a) shall be brought by the Commission or by the 

6 attorney general of a State in the name of the State, ex7 cept that— 

8 ‘‘(1) any such action to restrain any violation of 

9 section 332(a)(3) which relates to requirements pre10 scribed by the Secretary or any violation of section 

11 332(a)(4) which relates to request of the Secretary 

12 under section 326(b)(2) shall be brought by the Sec13 retary; and 

14 ‘‘(2) any violation of section 332(a)(5) or 

15 332(a)(7) shall be brought by the Secretary or by 

16 the attorney general of a State in the name of the 

17 State. 

18 ‘‘(c) VENUE AND SERVICE OF PROCESS.—Any such 

19 action may be brought in the United States district court 

20 for a district wherein any act, omission, or transaction 

21 constituting the violation occurred, or in such court of the 

22 district wherein the defendant is found or transacts busi23 ness. In any action under this section, process may be 

24 served on a defendant in any other district in which the 

25 defendant resides or may be found.’’. 
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1 (2) The item relating to section 334 in the table of 

2 contents for such Act is amended to read as follows: 

‘‘Sec. 334. Jurisdiction and venue.’’. 

3 (j) TREATMENT OF APPLIANCES WITHIN BUILDING

4 CODES.—(1) Section 327(f)(3) of the Energy Policy and 

5 Conservation Act (42 U.S.C. 6297(f)(3)) is amended by 

6 striking subparagraphs (B) through (G) and inserting the 

7 following: 

8 ‘‘(B) The code meets at least one of the fol9 lowing requirements: 

10 ‘‘(i) The code does not require that the 

11 covered product have an energy efficiency ex12 ceeding— 

13 ‘‘(I) the applicable energy conserva14 tion standard established in or prescribed 

15 under section 325; 

16 ‘‘(II) the level required by a regula17 tion of that State for which the Secretary 

18 has issued a rule granting a waiver under 

19 subsection (d) of this section; or 

20 ‘‘(III) the required level established in 

21 the International Energy Conservation 

22 Code or in a standard of the American So23 ciety of Heating, Refrigerating and Air24 Conditioning Engineers, or by the Sec-
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1 retary pursuant to section 304 of the En2 ergy Conservation and Production Act. 

3 ‘‘(ii) If the code uses one or more baseline 

4 building designs against which all submitted 

5 building designs are to be evaluated and such 

6 baseline building designs contain a covered 

7 product subject to an energy conservation 

8 standard established in or prescribed under sec9 tion 325, the baseline building designs are 

10 based on an efficiency level for such covered 

11 product which meets but does not exceed one of 

12 the levels specified in clause (i). 

13 ‘‘(iii) If the code sets forth one or more op14 tional combinations of items which meet the en15 ergy consumption or conservation objective, in 

16 at least one combination that the State has 

17 found to be reasonably achievable using com18 mercially available technologies the efficiency of 

19 the covered product meets but does not exceed 

20 one of the levels specified in clause (i). 

21 ‘‘(C) The credit to the energy consumption or 

22 conservation objective allowed by the code for install23 ing covered products having energy efficiencies ex24 ceeding one of the levels specified in subparagraph 

25 (B)(i) is on a one-for-one equivalent energy use or 
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1 equivalent energy cost basis, taking into account the 

2 typical lifetime of the product. 

3 ‘‘(D) The energy consumption or conservation 

4 objective is specified in terms of an estimated total 

5 consumption of energy (which may be calculated 

6 from energy loss- or gain-based codes) utilizing an 

7 equivalent amount of energy (which may be specified 

8 in units of energy or its equivalent cost) and equiva9 lent lifetimes. 

10 ‘‘(E) The estimated energy use of any covered 

11 product permitted or required in the code, or used 

12 in calculating the objective, is determined using the 

13 applicable test procedures prescribed under section 

14 323, except that the State may permit the estimated 

15 energy use calculation to be adjusted to reflect the 

16 conditions of the areas where the code is being ap17 plied if such adjustment is based on the use of the 

18 applicable test procedures prescribed under section 

19 323 or other technically accurate documented proce20 dure.’’. 

21 (2) Section 327(f)(4)(B) of the Energy Policy 

22 and Conservation Act (42 U.S.C. 6297(f)(4)(B)) is 

23 amended to read as follows: 

24 ‘‘(B) If a building code requires the installation of 

25 covered products with efficiencies exceeding the levels and 
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1 requirements specified in paragraph (3)(B), such require2 ment of the building code shall not be applicable unless 

3 the Secretary has granted a waiver for such requirement 

4 under subsection (d) of this section.’’. 

5 SEC. 214. BEST-IN-CLASS APPLIANCES DEPLOYMENT PRO6 GRAM. 

7 (a) IN GENERAL.—Not later than 1 year after the 

8 date of enactment of this Act, the Secretary of Energy, 

9 in consultation with the Administrator, shall establish a 

10 program to be known as the ‘‘Best-in-Class Appliances 

11 Deployment Program’’ to— 

12 (1) provide bonus payments to retailers or dis13 tributors under subsection (c) for sales of best-in14 class high-efficiency household appliance models, 

15 high-efficiency installed building equipment, and 

16 high-efficiency consumer electronics, with the goal of 

17 reducing life-cycle costs for consumers, encouraging 

18 innovation, and maximizing energy savings and pub19 lic benefit; 

20 (2) provide bounties under subsection (d) to re21 tailers and manufacturers for the replacement, re22 tirement, and recycling of old, inefficient, and envi23 ronmentally harmful products; and 
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1 (3) provide premium awards under subsection 

2 (e) to manufacturers for developing and producing 

3 new Superefficient Best-in-Class Products. 

4 (b) DESIGNATION OF BEST-IN-CLASS PRODUCT

5 MODELS.— 

6 (1) IN GENERAL.—The Secretary of Energy 

7 shall designate product models of appliances, equip8 ment, or electronics as Best-in-Class Product mod9 els. The Secretary shall publicly announce the Best10 in-Class Product models designated under this sub11 section. The Secretary shall define product classes 

12 broadly and, except as provided in paragraph (2), 

13 shall designate as Best-in-Class Product models no 

14 more than the most efficient 10 percent of the com15 mercially available product models in a class that 

16 demonstrate, as a group, a distinctly greater energy 

17 efficiency than the average energy efficiency of that 

18 class of appliances, equipment, or electronics. In des19 ignating models, the Secretary shall— 

20 (A) identify commercially available models 

21 in the relevant class of products; 

22 (B) identify the subgroup of those models 

23 that share the distinctly higher energy-effi24 ciency characteristics that warrant designation 

25 as best-in-class; and 
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1 (C) add other models in that class to the 

2 list of Best-in-Class Product models as they 

3 demonstrate their ability to meet the higher-ef4 ficiency characteristics on which the designation 

5 was made. 

6 (2) PERCENTAGE EXCEPTION.—If there are 

7 fewer than 10 product models in a class of products, 

8 the Secretary may designate one or more of such 

9 models as Best-in-Class Products. 

10 (3) REVIEW OF BEST-IN-CLASS STANDARDS.— 

11 The Secretary shall review annually the product-spe12 cific criteria for designating, and the product models 

13 that qualify as, Best-in-Class Products and, after 

14 notice and a 30-day comment period, make upwards 

15 adjustments in the efficiency criteria as necessary to 

16 maintain an appropriate ratio of such product mod17 els to the total number of product models in the 

18 product class. 

19 (4) SMART GRID ENERGY EFFICIENCY SAV20 INGS.—The Secretary shall include energy efficiency 

21 savings achieved by a commercially available product 

22 having smart grid capability in determining the effi23 ciency level of a product for purposes of a Best-In24 Class Product designation pursuant to this sub25 section. In measuring energy efficiency savings 
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1 achieved by smart grid capability, the Secretary 

2 shall use a metric that— 

3 (A) is based on the time-differentiated 

4 value and amount of energy consumption; 

5 (B) accounts for the capability of the prod6 uct to respond to a smart grid in which the 

7 physical capability of the product to save or 

8 delay energy because of a smart grid feature is 

9 weighted by the likelihood that the feature will 

10 be used; 

11 (C) is based on the value of a unit of elec12 tric or gas consumption as a function of time 

13 of day and season; and 

14 (D) includes a test method by which the 

15 manufacturer shall determine the energy effi16 ciency of smart grid capable products. 

17 (c) BONUSES FOR SALES OF BEST-IN-CLASS PROD18 UCTS.— 

19 (1) IN GENERAL.—The Secretary of Energy 

20 shall make bonus payments to retailers or, as pro21 vided in paragraph (5)(B), distributors for the sale 

22 of Best-in-Class Products. 

23 (2) BONUS PROGRAM.—The Secretary shall— 

24 (A) publicly announce the availability and 

25 amount of the bonus to be paid for each sale 
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1 of a Best-in-Class Product of a model des2 ignated under subsection (b); and 

3 (B) make bonus payments in at least that 

4 amount for each Best-in-Class Product of that 

5 model sold during the 3-year period beginning 

6 on the date the model is designated under sub7 section (b). 

8 (3) UPGRADE OF BEST-IN-CLASS PRODUCT ELI9 GIBILITY.—In conducting a review under subsection 

10 (b)(3), the Secretary shall— 

11 (A) consider designating as a Best-in-Class 

12 Product model a Superefficient Best-in-Class 

13 Product model that has been designated pursu14 ant to subsection (e); 

15 (B) announce any change in the bonus 

16 payment as necessary to increase the market 

17 share of Best-in-Class Product models; 

18 (C) list models that will be eligible for bo19 nuses in the new amount; and 

20 (D) continue paying bonus payments at 

21 the original level, for the sale of any models 

22 that previously qualified as Best-in-Class Prod23 ucts but do not qualify at the new level, for the 

24 remainder of the 3-year period announced with 

25 the original designation. 
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1 (4) SIZE OF INDIVIDUAL BONUS PAYMENTS.— 

2 (A) The size of each bonus payment under this sub3 section shall be the product of— 

4 (i) an amount determined by the Sec5 retary; and 

6 (ii) the difference in energy consumption 

7 between the Best-in-Class Product and the av8 erage product in the product class. 

9 (B) The Secretary shall determine the amount 

10 under subparagraph (A)(i) for each product type, in 

11 consultation with State and utility efficiency pro12 gram administrators as well as the Administrator, 

13 based on estimates of the amount of bonus payment 

14 that would provide significant incentive to increase 

15 the market share of Best-in-Class Products. 

16 (5) ELIGIBLE BONUS RECIPIENT.—(A) The 

17 Secretary shall ensure that not more than 1 bonus 

18 payment is provided under this subsection for each 

19 Best-in-Class Product. 

20 (B) The Secretary may make distributors eligi21 ble to receive bonus payments under this subsection 

22 for sales that are not to the final end-user, to the 

23 extent that the Secretary determines that for a par24 ticular product category distributors are well situ25 ated to increase sales of Best-in-Class Products. 
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1 (d) BOUNTIES FOR REPLACEMENT, RETIREMENT, 

2 AND RECYCLING OF EXISTING LOW-EFFICIENCY PROD3 UCTS.— 

4 (1) IN GENERAL.—The Secretary of Energy 

5 shall make bounty payments to— 

6 (A) retailers for the replacement, retire7 ment, and recycling of older operating low-effi8 ciency products that might otherwise continue 

9 in operation; and 

10 (B) manufacturers of Superefficient Best11 in-Class Products for the retirement and recy12 cling of older operating low-efficiency products 

13 that perform the same function and which 

14 might otherwise continue in operation. 

15 (2) BOUNTIES.—Bounties shall be payable— 

16 (A) to a retailer upon documentation that 

17 the sale of a Best-in-Class Product was accom18 panied by the replacement, retirement, and re19 cycling of— 

20 (i) an inefficient but still-functioning 

21 product; or 

22 (ii) a nonfunctioning product con23 taining a refrigerant, by the consumer to 

24 whom the Best-in-Class Product was sold; 

25 and 
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1 (B) to a manufacturer upon documentation 

2 of the retirement and recycling of— 

3 (i) an inefficient but still-functioning 

4 product from a consumer to whom a 

5 Superefficient Best-in-Class Product was 

6 delivered; or 

7 (ii) a nonfunctioning product con8 taining a refrigerant from a consumer to 

9 whom a Superefficient Best-in-Class Prod10 uct was delivered. 

11 (3) AMOUNT.— 

12 (A) FUNCTIONING PRODUCTS.—The boun13 ty payment payable under this subsection for a 

14 product described in paragraphs (2)(A)(i) and 

15 (2)(B)(i) shall be based on the difference be16 tween the estimated energy use of the product 

17 replaced and the energy use of an average new 

18 product in the product class, over the estimated 

19 remaining lifetime of the product that was re20 placed. 

21 (B) NONFUNCTIONING PRODUCTS CON22 TAINING REFRIGERANTS.—The bounty payment 

23 payable under this subsection for a product de24 scribed in paragraphs (2)(A)(ii) and (2)(B)(ii) 

25 shall be in the amount that the Secretary of 
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1 Energy, in consultation with the Administrator, 

2 determines is sufficient to promote the recycling 

3 of such products, up to the amount of bounty 

4 for a comparable product described in para5 graphs (2)(A) and (2)(B). 

6 (4) RETIREMENT.—The Secretary shall ensure 

7 that no product for which a bounty is paid under 

8 this subsection is returned to active service, but that 

9 it is instead destroyed, and recycled to the extent 

10 feasible. 

11 (5) RECYCLING APPLIANCES CONTAINING RE12 FRIGERANTS.—Exclusively for the purpose of imple13 menting the bounty payment program for products 

14 containing a refrigerant under this section, the Ad15 ministrator shall establish standards for environ16 mentally responsible methods of recycling and dis17 posal of refrigerant-containing appliances that, at a 

18 minimum, meet the requirements set by the Respon19 sible Appliance Disposal (RAD) Program for refrig20 erant disposal. The Secretary shall ensure that such 

21 standards are met before a bounty payment is made 

22 under this subsection for a product containing a re23 frigerant. Nothing in this section shall be interpreted 

24 to alter the requirements of section 608 of the Clean 
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1 Air Act or to relieve any person from complying with 

2 those requirements. 

3 (e) PREMIUM AWARDS FOR DEVELOPMENT AND

4 PRODUCTION OF SUPEREFFICIENT BEST-IN-CLASS PROD5 UCTS.— 

6 (1) IN GENERAL.—(A) The Secretary of Energy 

7 shall provide premium awards to manufacturers for 

8 the development and production of Superefficient 

9 Best-in-Class Products. The Secretary shall set and 

10 periodically revise standards for eligibility of prod11 ucts for designation as a Superefficient Best-in12 Class Product. 

13 (B) The Secretary may establish a standard for 

14 a Superefficient Best-in-Class Product even if no 

15 product meeting that standard exists, if the Sec16 retary has reasonable grounds to conclude that a 

17 mass-producible product could be made to meet that 

18 standard. 

19 (C) The Secretary may also establish a Super20 efficient Best-in-Class Product standard that is met 

21 by one or more existing Best-in-Class Product mod22 els, if those product models have distinct energy effi23 ciency attributes and performance characteristics 

24 that make them significantly better than other prod25 uct models qualifying as best-in-class. The Secretary 
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1 may not designate as Superefficient Best-in-Class 

2 Products under this subparagraph models that rep3 resent more than 10 percent of the currently quali4 fying Best-in-Class Product models. This subpara5 graph shall not apply to products designated pursu6 ant to paragraph (4)(A). 

7 (D) In making its finding on the efficiency level 

8 a product can achieve for purposes of a Supereffi9 cient Best-In-Class Product designation pursuant to 

10 this paragraph, the Secretary shall include energy 

11 efficiency savings that would be achieved by a prod12 uct as a result of smart grid capability when a prod13 uct having such capability can be produced and sold 

14 commercially to mass market consumers. In meas15 uring energy efficiency savings achieved by smart 

16 grid capability, the Secretary shall use a metric 

17 that— 

18 (i) is based on the time-differentiated value 

19 and amount of energy consumption; 

20 (ii) accounts for the capability of the prod21 uct to respond to a smart grid in which the 

22 physical capability of the product to save or 

23 delay energy because of a smart grid feature is 

24 weighted by the likelihood that the feature will 

25 be used; 
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1 (iii) is based on the value of a unit of elec2 tric or gas consumption as a function of time 

3 of day and season; and 

4 (iv) includes a test method by which the 

5 manufacturer shall determine the energy effi6 ciency of smart grid capable products. 

7 (2) PREMIUM AWARDS.—(A) The premium 

8 award payment provided to a manufacturer under 

9 this subsection shall be in addition to any bonus 

10 payments made under subsection (c). 

11 (B) The amount of the premium award paid 

12 per unit of Superefficient Best-in-Class Products 

13 sold to retailers or distributors shall, except as pro14 vided by subparagraph (F), be the product of— 

15 (i) an amount determined by the Sec16 retary; and 

17 (ii) the difference in energy consumption 

18 between the Superefficient Best-in-Class Prod19 uct and the average product in the product 

20 class. 

21 (C) The Secretary shall determine the amount 

22 under subparagraph (B)(i) for each product type, in 

23 consultation with State and utility efficiency pro24 gram administrators as well as the Administrator, 

25 based on consideration of the present value to the 
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1 Nation of the energy (and water or other resources 

2 or inputs) saved over the useful life of the product. 

3 The Secretary may also take into consideration the 

4 methods used to increase sales of qualifying prod5 ucts in determining such amount. 

6 (D) The Secretary may adjust the value de7 scribed in subparagraph (C) upward or downward as 

8 appropriate, including based on the effect of the pre9 mium awards on the sales of products in different 

10 classes that may be affected by the program under 

11 this subsection. 

12 (E) Premium award payments shall be applied 

13 to sales of any Superefficient Best-in-Class Product 

14 for the first 3 years after designation as a Supereffi15 cient Best-in-Class Product. 

16 (F) For years 2011 through 2013, the Sec17 retary shall make bonus payments to manufacturers 

18 of the products designated in paragraph (4)(A) for 

19 each product produced in the following amounts: 

20 (i) $75 for each dishwasher. 

21 (ii) $250 for each clothes washer. 

22 (iii) $200 for each refrigerator or refrig23 erator-freezer. 

24 (iv) $250 for each clothes dryer. 

25 (v) $200 for each cooking product. 
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1 (vi) $300 for each water heater. 

2 (3) COORDINATION OF INCENTIVES.—No prod3 uct for which Federal tax credit is received under 

4 section 45M of the Internal Revenue Code of 1986 

5 shall be eligible to receive premium award payments 

6 pursuant to this subsection. 

7 (4) DESIGNATIONS.— 

8 (A) INITIAL DESIGNATIONS.—Notwith9 standing any other provisions of this section, 

10 the products the Secretary shall designate as a 

11 Superefficient Best-In-Class Product include, 

12 but are not limited to, the following products 

13 manufactured in 2011 through 2013: 

14 (i) A dishwasher, clothes washer, re15 frigerator, or refrigerator-freezer that 

16 meets the highest efficiency performance 

17 standards in its product category as pro18 vided in Section 305(b) of the Emergency 

19 Economic Stabilization Act of 2008 and 

20 has the smart grid capability specified in 

21 paragraph (5). 

22 (ii) A water heater that meets an effi23 ciency standard that is the same or equiva24 lent to the standard provided in Section 

25 1333 of the Energy Policy Act of 2005 
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1 and has the smart grid capability specified 

2 in paragraph (5). 

3 (iii) A clothes dryer or cooking prod4 uct that the Secretary determines meets 

5 the standards specified in subsection (j)(3), 

6 which the Secretary shall promulgate no 

7 later than 1 year after the date of enact8 ment, and has the smart grid capability 

9 specified in paragraph (5). 

10 (B) EXTENSION OF INITIAL DESIGNA11 TIONS.— 

12 (i) GENERAL.—The Secretary shall in 

13 2013 extend the Superefficient Best-In14 Class Product designation of each product 

15 specified in subparagraph (A)(i) through 

16 (iii) through 2017, provided that for each 

17 product designation extended— 

18 (I) the extension will result in 

19 significant energy efficiency savings; 

20 (II) the product meets the Super21 efficient Best-In-Class Product cri22 teria specified in paragraph (1); 

23 (III) the eligibility standards of 

24 the product include the smart grid ca-
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1 pability specified in paragraph (5); 

2 and 

3 (IV) the Secretary makes appro4 priate revisions to the eligibility stand5 ards of the product as provided by 

6 paragraph (1). 

7 (ii) AWARDS.—If a Superefficient 

8 Best-In-Class Product designation for a 

9 product is extended pursuant to this sub10 paragraph, the premium award for the 

11 product shall be determined in accordance 

12 with paragraph (2). 

13 (5) SMART GRID CAPABILITY.— 

14 (A) Until the Secretary promulgates cri15 teria under subparagraph (B), the term ‘‘smart 

16 grid capability’’ means capability of receiving 

17 and interpreting time-of-use pricing and peak18 load-shed signals from a utility and— 

19 (i) in the case of a cooking product, 

20 reducing a minimum of 20 percent during 

21 peak demand as measured by the tested 

22 average wattage over the course of a typ23 ical operating cycle of the product; or 

24 (ii) in the case of a clothes washer, a 

25 refrigerator, a dishwasher, a dryer and a 
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1 water heater, reducing a minimum of 50 

2 percent during peak demand as measured 

3 by the tested average wattage over the 

4 course of a typical operating cycle of the 

5 product, provided that the typical oper6 ating cycle of a refrigerator and a water 

7 heater shall be a 24-hour period. 

8 (B) After completion of the analysis re9 quired under section 142(b) of this Act, the 

10 Secretary shall expeditiously promulgate, after 

11 notice and a 30-day public comment period, cri12 teria for what constitutes ‘‘smart grid capa13 bility.’’ 

14 (f) REPORTING.—The Secretary of Energy shall re15 quire, as a condition of receiving a bonus, bounty, or pre16 mium award under this section, that a report containing 

17 the following documentation be provided: 

18 (1) For retailers and distributors, the number 

19 of units sold within each product type, and model20 specific wholesale purchase prices and retail sale 

21 prices, on a monthly basis. 

22 (2) For manufacturers, model-specific energy 

23 efficiency and consumption data. 

24 (3) For manufacturers, on an immediate basis, 

25 information concerning any product design or func-
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1 tion changes that affect the energy consumption of 

2 the unit. 

3 (4) The methods used to increase the sales of 

4 qualifying products. 

5 (g) MONITORING AND VERIFICATION PROTOCOLS.— 

6 The Secretary of Energy shall establish monitoring and 

7 verification protocols for energy consumption tests for 

8 each product model and for sales of energy-efficient mod9 els. The Secretary shall estimate actual savings of energy 

10 from the use of Smart Grid capability in appliances for 

11 which premium award payments are made pursuant to 

12 subsection (e) as a function of utility and consumer readi13 ness to utilize such capability. 

14 (h) DISCLOSURE.—The Secretary of Energy may re15 quire that manufacturers, retailers and distributors dis16 close publicly and to consumers their participation in the 

17 program under this section. 

18 (i) COST-EFFECTIVENESS REQUIREMENT.— 

19 (1) REQUIREMENT.—The Secretary of Energy 

20 shall make cost-effectiveness a top priority in design21 ing the program under, and administering, this sec22 tion, except that the cost-effectiveness of providing 

23 premium awards to manufacturers under subsection 

24 (e), in aggregate, may be lower by this measure than 
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1 that of the bonuses and bounties to retailers and 

2 distributors under subsections (c) and (d). 

3 (2) DEFINITIONS.—In this subsection: 

4 (A) COST-EFFECTIVENESS.—The term 

5 ‘‘cost-effectiveness’’ means a measure of aggre6 gate savings in the cost of energy over the life7 time of a product in relation to the cost to the 

8 Secretary of the bonuses, bounties, and pre9 mium awards provided under this section for a 

10 product. 

11 (B) SAVINGS.—The term ‘‘savings’’ means 

12 the cumulative megawatt-hours of electricity or 

13 million British thermal units of other fuels 

14 saved by a product during the projected useful 

15 life of the product, in comparison to projected 

16 energy consumption of the average product in 

17 the same class, taking into consideration the 

18 impact of any documented measures to replace, 

19 retire, and recycle low-efficiency products at the 

20 time of purchase of highly-efficient substitutes. 

21 (j) DEFINITIONS.—In this section— 

22 (1) the term ‘‘distributor’’ mean an individual, 

23 organization, or company that sells products in mul24 tiple lots and not directly to end-users; 
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1 (2) the term ‘‘retailer’’ means an individual, or2 ganization, or company that sells products directly 

3 to end-users; 

4 (3) the term ‘‘manufacturer’’ means an indi5 vidual, organization, or company that transforms 

6 raw materials into mass-producible finished goods; 

7 and 

8 (4) the term ‘‘Superefficient Best-in-Class 

9 Product’’ means a product that— 

10 (A) can be mass produced; and 

11 (B) achieves the highest level of efficiency 

12 that the Secretary of Energy finds can, given 

13 the current state of technology, be produced 

14 and sold commercially to mass-market con15 sumers. 

16 (k) AUTHORIZATION OF APPROPRIATIONS.—There 

17 are authorized to be appropriated $600,000,000 for each 

18 of the fiscal years 2011 through 2013 to the Secretary 

19 of Energy for purposes of this section, and such sums as 

20 may be necessary for subsequent fiscal years. Of funds 

21 appropriated, not more than 10 percent for any fiscal year 

22 may be expended on program administration, and not less 

23 than 40 percent of any funds appropriated during fiscal 

24 years 2011 through 2013 shall be for purposes of sub25 section (e). 
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1 SEC. 215. WATERSENSE. 

2 (a) IN GENERAL.—There is established within the 

3 Environmental Protection Agency a WaterSense program 

4 to identify and promote water efficient products, buildings 

5 and landscapes, and services in order— 

6 (1) to reduce water use; 

7 (2) to reduce the strain on water, wastewater, 

8 and stormwater infrastructure; 

9 (3) to conserve energy used to pump, heat, 

10 transport, and treat water; and 

11 (4) to preserve water resources for future gen12 erations, 

13 through voluntary labeling of, or other forms of commu14 nications about, products, buildings and landscapes, and 

15 services that meet the highest water efficiency and per16 formance standards. 

17 (b) DUTIES.—The Administrator shall— 

18 (1) promote WaterSense labeled products, 

19 buildings and landscapes, and services in the market 

20 place as the preferred technologies and services 

21 for— 

22 (A) reducing water use; and 

23 (B) ensuring product and service perform24 ance; 
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1 (2) work to enhance public awareness of the 

2 WaterSense label through public outreach, edu3 cation, and other means; 

4 (3) establish and maintain performance stand5 ards so that products, buildings and landscapes, and 

6 services labeled with the WaterSense label perform 

7 as well or better than their less efficient counter8 parts; 

9 (4) publicize the need for proper installation 

10 and maintenance of WaterSense products by a li11 censed, and where certification guidelines exist, 

12 WaterSense-certified professional to ensure optimal 

13 performance; 

14 (5) preserve the integrity of the WaterSense 

15 label; 

16 (6) regularly review and, when appropriate, up17 date WaterSense criteria for categories of products, 

18 buildings and landscapes, and services, at least once 

19 every 4 years; 

20 (7) to the extent practical, regularly estimate 

21 and make available to the public the production and 

22 relative market shares of WaterSense labeled prod23 ucts, buildings and landscapes, and services, at least 

24 annually; 
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1 (8) to the extent practical, regularly estimate 

2 and make available to the public the water and en3 ergy savings attributable to the use of WaterSense 

4 labeled products, buildings and landscapes, and serv5 ices, at least annually; 

6 (9) solicit comments from interested parties and 

7 the public prior to establishing or revising a 

8 WaterSense category, specification, installation cri9 terion, or other criterion (or prior to effective dates 

10 for any such category, specification, installation cri11 terion, or other criterion); 

12 (10) provide reasonable notice to interested par13 ties and the public of any changes (including effec14 tive dates), on the adoption of a new or revised cat15 egory, specification, installation criterion, or other 

16 criterion, along with— 

17 (A) an explanation of changes; and 

18 (B) as appropriate, responses to comments 

19 submitted by interested parties; 

20 (11) provide appropriate lead time (as deter21 mined by the Administrator) prior to the applicable 

22 effective date for a new or significant revision to a 

23 category, specification, installation criterion, or other 

24 criterion, taking into account the timing require25 ments of the manufacturing, marketing, training, 
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1 and distribution process for the specific product, 

2 building and landscape, or service category ad3 dressed; and 

4 (12) identify and, where appropriate, implement 

5 other voluntary approaches in commercial, institu6 tional, residential, municipal, and industrial sectors 

7 to encourage reuse and recycling technologies, im8 prove water efficiency, or lower water use while 

9 meeting, where applicable, the performance stand10 ards established under paragraph (3). 

11 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

12 are authorized to be appropriated $7,500,000 for fiscal 

13 year 2010, $10,000,000 for fiscal year 2011, $20,000,000 

14 for fiscal year 2012, and $50,000,000 for fiscal year 2013 

15 and each year thereafter, adjusted for inflation, to carry 

16 out this section. 

17 SEC. 216. FEDERAL PROCUREMENT OF WATER EFFICIENT 

18 PRODUCTS. 

19 (a) DEFINITIONS.—In this section: 

20 (1) AGENCY.—The term ‘‘agency’’ has the 

21 meaning given that term in section 7902(a) of title 

22 5, United States Code. 

23 (2) WATERSENSE PRODUCT OR SERVICE.—The 

24 term ‘‘WaterSense product or service’’ means a 
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1 product or service that is rated for water efficiency 

2 under the WaterSense program. 

3 (3) WATERSENSE PROGRAM.—The term 

4 ‘‘WaterSense program’’ means the program estab5 lished by section 215 of this Act. 

6 (4) FEMP DESIGNATED PRODUCT.—The term 

7 ‘‘FEMP designated product’’ means a product that 

8 is designated under the Federal Energy Manage9 ment Program of the Department of Energy as 

10 being among the highest 25 percent of equivalent 

11 products for efficiency. 

12 (5) PRODUCT AND SERVICE.—The terms ‘‘prod13 uct’’ and ‘‘service’’ do not include any water con14 suming product or service designed or procured for 

15 combat or combat-related missions. The terms also 

16 exclude products or services already covered by the 

17 Federal procurement regulations established under 

18 section 553 of the National Energy Conservation 

19 Policy Act (42 U.S.C. 8259b). 

20 (b) PROCUREMENT OF WATER EFFICIENT PROD21 UCTS.— 

22 (1) REQUIREMENT.—To meet the requirements 

23 of an agency for a water consuming product or serv24 ice, the head of the agency shall, except as provided 

25 in paragraph (2), procure— 
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1 (A) a WaterSense product or service; or 

2 (B) a FEMP designated product. 

3 A WaterSense plumbing product should preferably, 

4 when possible, be installed by a licensed and, when 

5 WaterSense certification guidelines exist, 

6 WaterSense-certified plumber or mechanical con7 tractor, and a WaterSense irrigation system should 

8 preferably, when possible, be installed, maintained, 

9 and audited by a WaterSense-certified irrigation 

10 professional to ensure optimal performance. 

11 (2) EXCEPTIONS.—The head of an agency is 

12 not required to procure a WaterSense product or 

13 service or FEMP designated product under para14 graph (1) if the head of the agency finds in writing 

15 that— 

16 (A) a WaterSense product or service or 

17 FEMP designated product is not cost-effective 

18 over the life of the product, taking energy and 

19 water cost savings into account; or 

20 (B) no WaterSense product or service or 

21 FEMP designated product is reasonably avail22 able that meets the functional requirements of 

23 the agency. 

24 (3) PROCUREMENT PLANNING.—The head of an 

25 agency shall incorporate into the specifications for 
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1 all procurements involving water consuming products 

2 and systems, including guide specifications, project 

3 specifications, and construction, renovation, and 

4 services contracts that include provision of water 

5 consuming products and systems, and into the fac6 tors for the evaluation of offers received for the pro7 curement, criteria used for rating WaterSense prod8 ucts and services and FEMP designated products. 

9 The head of an agency shall consider, to the max10 imum extent practicable, additional measures for re11 ducing agency water consumption, including water 

12 reuse technologies, leak detection and repair, and 

13 use of waterless products that perform similar func14 tions to existing water-consuming products. 

15 (c) REGULATIONS.—Not later than 180 days after 

16 the date of enactment of this Act, the Secretary of Energy, 

17 working in coordination with the Administrator, shall 

18 issue guidelines to carry out this section. 

19 SEC. 217. EARLY ADOPTER WATER EFFICIENT PRODUCT IN20 CENTIVE PROGRAMS. 

21 (a) DEFINITIONS.—In this section: 

22 (1) ELIGIBLE ENTITY.—The term ‘‘eligible enti23 ty’’ means a State government, local or county gov24 ernment, tribal government, wastewater or sewerage 

25 utility, municipal water authority, energy utility, 
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1 water utility, or nonprofit organization that meets 

2 the requirements of subsection (b). 

3 (2) INCENTIVE PROGRAM.—The term ‘‘incentive 

4 program’’ means a program for administering finan5 cial incentives for consumer purchase and installa6 tion of residential water efficient products and serv7 ices as described in subsection (b)(1). 

8 (3) RESIDENTIAL WATER EFFICIENT PRODUCT

9 OR SERVICE.—The term ‘‘residential water efficient 

10 product or service’’ means a product or service for 

11 a single-family or multifamily residence or its land12 scape that is rated for water efficiency and perform13 ance— 

14 (A) by the WaterSense program; or 

15 (B) where a WaterSense specification does 

16 not exist, by an incentive program. 

17 Categories of water efficient products and services 

18 may include faucets, irrigation technologies and 

19 services, point-of-use water treatment devices, reuse 

20 and recycling technologies, toilets, and showerheads. 

21 (4) WATERSENSE PROGRAM.—The term 

22 ‘‘WaterSense program’’ means the program estab23 lished by section 215 of this Act. 

24 (b) ELIGIBLE ENTITIES.—An entity shall be eligible 

25 to receive an allocation under subsection (c) if the entity— 
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1 (1) establishes (or has established) an incentive 

2 program to provide rebates, vouchers, other financial 

3 incentives, or direct installs to consumers for the 

4 purchase of residential water efficient products or 

5 services; 

6 (2) submits an application for the allocation at 

7 such time, in such form, and containing such infor8 mation as the Administrator may require; and 

9 (3) provides assurances satisfactory to the Ad10 ministrator that the entity will use the allocation to 

11 supplement, but not supplant, funds made available 

12 to carry out the incentive program. 

13 (c) AMOUNT OF ALLOCATIONS.—For each fiscal year, 

14 the Administrator shall determine the amount to allocate 

15 to each eligible entity to carry out subsection (d) taking 

16 into consideration— 

17 (1) the population served by the eligible entity 

18 in the most recent calendar year for which data are 

19 available; 

20 (2) the targeted population of the eligible enti21 ty’s incentive program, such as general households, 

22 low-income households, or first-time homeowners, 

23 and the probable effectiveness of the incentive pro24 gram for that population; 
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1 (3) for existing programs, the effectiveness of 

2 the incentive program in encouraging the adoption 

3 of water efficient products and services; and 

4 (4) any prior year’s allocation to the eligible en5 tity that remains unused. 

6 (d) USE OF ALLOCATED FUNDS.—Funds allocated to 

7 an entity under subsection (c) may be used to pay up to 

8 50 percent of the cost of establishing and carrying out 

9 an incentive program. 

10 (e) FIXTURE RECYCLING.—Entities are encouraged 

11 to promote or implement fixture recycling programs to 

12 manage the disposal of older fixtures replaced due to the 

13 incentive program under this section. 

14 (f) ISSUANCE OF INCENTIVES.—Financial incentives 

15 may be provided to consumers that meet the requirements 

16 of the incentive program. The entity may issue all finan17 cial incentives directly to consumers or, with approval of 

18 the Administrator, delegate some or all financial incentives 

19 administration to other organizations including, but not 

20 limited to, local governments, municipal water authorities, 

21 and water utilities. The amount of a financial incentives 

22 shall be determined by the entity, taking into consider23 ation— 

24 (1) the amount of the allocation to the entity 

25 under subsection (c); 
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1 (2) the amount of any Federal, State, or other 

2 organization’s tax or financial incentive available for 

3 the purchase of the residential water efficient prod4 uct or service; 

5 (3) the amount necessary to change consumer 

6 behavior to purchase water efficient products and 

7 services; and 

8 (4) the consumer expenditures for onsite prepa9 ration, assembly, and original installation of the 

10 product. 

11 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

12 are authorized to be appropriated to the Administrator to 

13 carry out this section $50,000,000 for fiscal year 2010, 

14 $100,000,000 for fiscal year 2011, $150,000,000 for fis15 cal year 2012, $100,000,000 for fiscal year 2013, and 

16 $50,000,000 for fiscal year 2014. 

17 SEC. 218. CERTIFIED STOVES PROGRAM. 

18 (a) DEFINITIONS.—In this section: 

19 (1) AGENCY.—The term ‘‘Agency’’ means the 

20 Environmental Protection Agency. 

21 (2) WOOD STOVE OR PELLET STOVE.—The 

22 term ‘‘wood stove or pellet stove’’ means a wood 

23 stove, pellet stove, or fireplace insert that uses wood 

24 or pellets for fuel. 
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1 (3) CERTIFIED STOVE.—The term ‘‘certified 

2 stove’’ means a wood stove or pellet stove that meets 

3 the standards of performance for new residential 

4 wood heaters under subpart AAA of part 60 of sub5 chapter C of chapter I of title 40, Code of Federal 

6 Regulations (or successor regulations), as certified 

7 by the Administrator. Pellet stoves and fireplace in8 serts using pellets for fuel that are exempt from 

9 testing by the Administrator but meet the same 

10 standards of performance as wood stoves are consid11 ered certified for the purposes of this section. 

12 (4) ELIGIBLE ENTITY.—The term ‘‘eligible enti13 ty’’ means— 

14 (A) a State, a local government, or a feder15 ally recognized Indian tribe; 

16 (B) Alaskan Native villages or regional or 

17 village corporations (as defined in, or estab18 lished under, the Alaskan Native Claims Settle19 ment Act (43 U.S.C. 1601 et seq.)); and 

20 (C) a nonprofit organization or institution 

21 that— 

22 (i) represents or provides pollution re23 duction or educational services relating to 

24 wood smoke minimization to persons, orga25 nizations, or communities; or 
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1 (ii) has, as its principal purpose, the 

2 promotion of air quality or energy effi3 ciency. 

4 (b) ESTABLISHMENT.—The Administrator shall es5 tablish and carry out a program to assist in the replace6 ment of wood stoves or pellet stoves that do not meet the 

7 standards of performance referred to in subsection (a)(4) 

8 by— 

9 (1) requiring that each wood stove or pellet 

10 stove sold in the United States on and after the date 

11 of enactment of this Act meet the standards of per12 formance referred to in subsection (a)(4); 

13 (2) requiring that no wood stove or pellet stove 

14 replaced under this program is sold or returned to 

15 active service, but that it is instead destroyed and 

16 recycled to the maximum extent feasible; 

17 (3) providing funds to an eligible entity to re18 place a wood stove or pellet stove that does not meet 

19 the standards of performance in subsection (a)(4) 

20 with a certified stove, including funds to pay for— 

21 (A) installation of a replacement certified 

22 stove; and 

23 (B) necessary replacement of or repairs to 

24 ventilation, flues, chimneys, or other relevant 
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1 items necessary for safe installation of a re2 placement certified stove; 

3 (4) in addition to any funds that may be appro4 priated for the program under this subsection, using 

5 existing Federal, State, and local programs and in6 centives, to the greatest extent practicable; 

7 (5) prioritizing the replacement of wood stoves 

8 or pellet stoves manufactured before July 1, 1990; 

9 and 

10 (6) carrying out such other activities as the Ad11 ministrator determines appropriate to facilitate the 

12 replacement of wood stoves or pellet stoves that do 

13 not meet the standards of performance referred to in 

14 subsection (a)(3). 

15 (c) REGULATIONS.—The Administrator may promul16 gate such regulations as are necessary to carry out the 

17 program established under subsection (b). 

18 (d) FUNDING.— 

19 (1) AUTHORIZATION OF APPROPRIATIONS.— 

20 There are authorized to be appropriated to carry out 

21 the program under this section $20,000,000 for the 

22 period of fiscal years 2010 through 2014. 

23 (2) DESIGNATED USE.—Of amounts appro24 priated pursuant to this subsection— 
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1 (A) 25 percent shall be designated for use 

2 to carry out the program under this section on 

3 lands held in trust for the benefit of a federally 

4 recognized Indian tribe; 

5 (B) 3 percent shall be designated for use 

6 to carry out the program under this section in 

7 Alaskan Native villages or regional or village 

8 corporations (as defined in, or established 

9 under, the Alaskan Native Claims Settlement 

10 Act (43 U.S.C. 1601 et seq.)); and 

11 (C) 72 percent shall be designated for use 

12 to carry out the program under this section na13 tionwide. 

14 (3) REGULATORY PROGRAMS.— 

15 (A) IN GENERAL.—No grant or loan pro16 vided under this section shall be used to fund 

17 the costs of emissions reductions that are man18 dated under Federal, State, or local law. 

19 (B) MANDATED.—For purposes of sub20 paragraph (A), voluntary or elective emission 

21 reduction measures shall not be considered 

22 ‘‘mandated’’, regardless of whether the reduc23 tions are included in the implementation plan of 

24 a State. 
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1 (e) EPA AUTHORITY TO ACCEPT WOOD STOVE OR

2 PELLET STOVE REPLACEMENT SUPPLEMENTAL ENVI3 RONMENTAL PROJECTS.— 

4 (1) IN GENERAL.—The Administrator may ac5 cept (notwithstanding sections 3302 and 1301 of 

6 title 31, United States Code) wood stove or pellet 

7 stove replacement Supplemental Environmental 

8 Projects if such projects, as part of a settlement of 

9 any alleged violation of environmental law— 

10 (A) protect human health or the environ11 ment; 

12 (B) are related to the underlying alleged 

13 violation; 

14 (C) do not constitute activities that the de15 fendant would otherwise be legally required to 

16 perform; and 

17 (D) do not provide funds for the staff of 

18 the Agency or for contractors to carry out the 

19 Agency’s internal operations. 

20 (2) CERTIFICATION.—In any settlement agree21 ment regarding an alleged violation of environmental 

22 law in which a defendant agrees to perform a wood 

23 stove or pellet stove replacement Supplemental Envi24 ronmental Project, the Administrator shall require 

25 the defendant to include in the settlement docu-
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1 ments a certification under penalty of law that the 

2 defendant would have agreed to perform a com3 parably valued, alternative project other than a wood 

4 stove or pellet stove replacement Supplemental Envi5 ronmental Project if the Administrator were pre6 cluded by law from accepting a wood stove or pellet 

7 stove replacement Supplemental Environmental 

8 Project. A failure by the Administrator to include 

9 this language in such a settlement agreement shall 

10 not create a cause of action against the United 

11 States under the Clean Air Act or any other law or 

12 create a basis for overturning a settlement agree13 ment entered into by the United States. 

14 SEC. 219. ENERGY STAR STANDARDS. 

15 (a) ENERGY STAR.—Section 324A(c) of the Energy 

16 Policy and Conservation Act is amended— 

17 (1) in paragraph (6)(B), by striking ‘‘and’’ 

18 after the semicolon at the end; 

19 (2) in paragraph (7), by striking the period at 

20 the end and inserting a semicolon; and 

21 (3) by adding at the end the following: 

22 ‘‘(8) not later than 18 months after the date of 

23 enactment of this paragraph, establish and imple24 ment a rating system for products identified as En25 ergy Star products pursuant to this section to pro-
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1 vide consumers with the most helpful information on 

2 the relative energy efficiency, including cost effec3 tiveness from the consumer’s perspective, and rel4 ative length of time for consumers to recover costs 

5 attributable to the energy efficient features, of those 

6 products, unless the Administrator and the Sec7 retary communicate to Congress that establishing 

8 such a system would diminish the value of the En9 ergy Star brand to consumers; 

10 ‘‘(9)(A) review the Energy Star product criteria 

11 for the 10 product models in each product category 

12 with the greatest energy consumption at least once 

13 every 3 years; and 

14 ‘‘(B) based on the review, update and publish 

15 the Energy Star product criteria for each such cat16 egory, as necessary; and 

17 ‘‘(10) require periodic verification of compliance 

18 with the Energy Star product criteria by products 

19 identified as Energy Star products pursuant to this 

20 section, including— 

21 ‘‘(A) purchase and testing of products 

22 from the market; or 

23 ‘‘(B) other appropriate testing and compli24 ance approaches.’’. 
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1 (b) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated to carry out the amend3 ments made by this section $5,000,000 for fiscal year 

4 2010 and for each fiscal year thereafter. 

5 Subtitle C—Transportation 

6 Efficiency 

7 SEC. 221. EMISSIONS STANDARDS. 

8 Title VIII of the Clean Air Act, as added by section 

9 331 of this Act, is amended by inserting after part A the 

10 following new part: 

11 ‘‘PART B—MOBILE SOURCES 

12 ‘‘SEC. 821. GREENHOUSE GAS EMISSION STANDARDS FOR 

13 MOBILE SOURCES. 

14 ‘‘(a) NEW MOTOR VEHICLES AND NEW MOTOR VE15 HICLE ENGINES.—(1) Pursuant to section 202(a)(1), by 

16 December 31, 2010, the Administrator shall promulgate 

17 standards applicable to emissions of greenhouse gases 

18 from new heavy-duty motor vehicles or new heavy-duty 

19 motor vehicle engines, excluding such motor vehicles cov20 ered by the Tier II standards (as established by the Ad21 ministrator as of the date of the enactment of this sec22 tion). The Administrator may revise these standards from 

23 time to time. 

24 ‘‘(2) Regulations issued under section 202(a)(1) ap25 plicable to emissions of greenhouse gases from new heavy- 
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1 duty motor vehicles or new heavy-duty motor vehicle en2 gines, excluding such motor vehicles covered by the Tier 

3 II standards (as established by the Administrator as of 

4 the date of the enactment of this section), shall contain 

5 standards that reflect the greatest degree of emissions re6 duction achievable through the application of technology 

7 which the Administrator determines will be available for 

8 the model year to which such standards apply, giving ap9 propriate consideration to cost, energy, and safety factors 

10 associated with the application of such technology. Any 

11 such regulations shall take effect after such period as the 

12 Administrator finds necessary to permit the development 

13 and application of the requisite technology, and, at a min14 imum, shall apply for a period no less than 3 model years 

15 beginning no earlier than the model year commencing 4 

16 years after such regulations are promulgated. 

17 ‘‘(3) Regulations issued under section 202(a)(1) ap18 plicable to emissions of greenhouse gases from new heavy19 duty motor vehicles or new heavy-duty motor vehicle en20 gines, excluding such motor vehicles covered by the Tier 

21 II standards (as established by the Administrator as of 

22 the date of the enactment of this section), shall supersede 

23 and satisfy any and all of the rulemaking and compliance 

24 requirements of section 32902(k) of title 49, United 

25 States Code. 
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1 ‘‘(4) Other than as specifically set forth in paragraph 

2 (3) of this subsection, nothing in this section shall affect 

3 or otherwise increase or diminish the authority of the Sec4 retary of Transportation to adopt regulations to improve 

5 the overall fuel efficiency of the commercial goods move6 ment system. 

7 ‘‘(b) NONROAD VEHICLES AND ENGINES.—(1) Pur8 suant to section 213(a)(4) and (5), the Administrator 

9 shall identify those classes or categories of new nonroad 

10 vehicles or engines, or combinations of such classes or cat11 egories, that, in the judgment of the Administrator, both 

12 contribute significantly to the total emissions of green13 house gases from nonroad engines and vehicles, and pro14 vide the greatest potential for significant and cost-effective 

15 reductions in emissions of greenhouse gases. The Adminis16 trator shall promulgate standards applicable to emissions 

17 of greenhouse gases from these new nonroad engines or 

18 vehicles by December 31, 2012. The Administrator shall 

19 also promulgate standards applicable to emissions of 

20 greenhouse gases for such other classes and categories of 

21 new nonroad vehicles and engines as the Administrator de22 termines appropriate and in the timeframe the Adminis23 trator determines appropriate. The Administrator shall 

24 base such determination, among other factors, on the rel25 ative contribution of greenhouse gas emissions, and the 
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1 costs for achieving reductions, from such classes or cat2 egories of new nonroad engines and vehicles. The Adminis3 trator may revise these standards from time to time. 

4 ‘‘(2) Standards under section 213(a)(4) and (5) ap5 plicable to emissions of greenhouse gases from those class6 es or categories of new nonroad engines or vehicles identi7 fied in the first sentence of paragraph (1) of this sub8 section, shall achieve the greatest degree of emissions re9 duction achievable based on the application of technology 

10 which the Administrator determines will be available at 

11 the time such standards take effect, taking into consider12 ation cost, energy, and safety factors associated with the 

13 application of such technology. Any such regulations shall 

14 take effect at the earliest possible date after such period 

15 as the Administrator finds necessary to permit the devel16 opment and application of the requisite technology, giving 

17 appropriate consideration to the cost of compliance within 

18 such period, the applicable compliance dates for other 

19 standards, and other appropriate factors, including the pe20 riod of time appropriate for the transfer of applicable tech21 nology from other applications, including motor vehicles, 

22 and the period of time in which previously promulgated 

23 regulations have been in effect. 

24 ‘‘(3) For purposes of this section and standards 

25 under section 213(a)(4) or (5) applicable to emissions of 
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1 greenhouse gases, the term ‘nonroad engines and vehicles’ 

2 shall include non-internal combustion engines and the ve3 hicles these engines power (such as electric engines and 

4 electric vehicles), for those non-internal combustion en5 gines and vehicles which would be in the same category 

6 and have the same uses as nonroad engines and vehicles 

7 that are powered by internal combustion engines. 

8 ‘‘(c) AVERAGING, BANKING, AND TRADING OF EMIS9 SIONS CREDITS.—In establishing standards applicable to 

10 emissions of greenhouse gases pursuant to this section and 

11 sections 202(a), 213(a)(4) and (5), and 231(a), the Ad12 ministrator may establish provisions for averaging, bank13 ing, and trading of greenhouse gas emissions credits with14 in or across classes or categories of motor vehicles and 

15 motor vehicle engines, nonroad vehicles and engines (in16 cluding marine vessels), and aircraft and aircraft engines, 

17 to the extent the Administrator determines appropriate 

18 and considering the factors appropriate in setting stand19 ards under those sections. Such provisions may include 

20 reasonable and appropriate provisions concerning genera21 tion, banking, trading, duration, and use of credits. 

22 ‘‘(d) REPORTS.—The Administrator shall, from time 

23 to time, submit a report to Congress that projects the 

24 amount of greenhouse gas emissions from the transpor25 tation sector, including transportation fuels, for the years 
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1 2030 and 2050, based on the standards adopted under 

2 this section. 

3 ‘‘(e) GREENHOUSE GASES.—Notwithstanding the 

4 provisions of section 711, hydrofluorocarbons shall be con5 sidered a greenhouse gas for purposes of this section.’’. 

6 SEC. 222. GREENHOUSE GAS EMISSIONS REDUCTIONS 

7 THROUGH TRANSPORTATION EFFICIENCY. 

8 (a) ENVIRONMENTAL PROTECTION AGENCY.—Title 

9 VIII of the Clean Air Act, as added by section 331 of this 

10 Act, is further amended by inserting after part C the fol11 lowing new part: 

12 ‘‘PART D—TRANSPORTATION EMISSIONS 

13 ‘‘SEC. 841. GREENHOUSE GAS EMISSIONS REDUCTIONS 

14 THROUGH TRANSPORTATION EFFICIENCY. 

15 ‘‘(a) IN GENERAL.—The Administrator, in consulta16 tion with the Secretary of Transportation, shall promul17 gate, and update from time to time, regulations to estab18 lish national transportation-related greenhouse gas emis19 sions reduction goals, standardized models and methodolo20 gies for use in developing surface transportation-related 

21 greenhouse gas emissions reduction targets pursuant to 

22 sections 134 and 135 of title 23 of the United States Code 

23 and methods for collection of data on transportation-re24 lated greenhouse gas emissions. Such goals shall be com25 mensurate with the emissions reductions goals established 
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1 under the American Clean Energy and Security Act of 

2 2009. In establishing such goals, models, and methodolo3 gies, the Administrator shall consult with States and met4 ropolitan planning organizations and may utilize existing 

5 models and methodologies. 

6 ‘‘(b) TIMING.—The Administrator shall— 

7 ‘‘(1) publish proposed regulations under sub8 section (a) not later than 12 months after the date 

9 of enactment of this section; and 

10 ‘‘(2) promulgate final regulations under sub11 section (a) not later than 18 months after the date 

12 of enactment of this section. 

13 ‘‘(c) ASSESSMENT.—At least every 6 years after pro14 mulgating final regulations under subsection (a), the Ad15 ministrator, jointly with the Secretary of Transportation, 

16 shall assess current and projected progress in reducing na17 tional transportation-related greenhouse gas emissions. 

18 The assessment shall examine the contributions to emis19 sions reductions attributable to improvements in vehicle 

20 efficiency, greenhouse gas performance of transportation 

21 fuels, increased efficiency in utilizing transportation sys22 tems and the effects of local and State planning.’’. 

23 (b) METROPOLITAN PLANNING ORGANIZATIONS.— 

24 Section 134 of title 23 of the United States Code is 

25 amended as follows: 
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1 (1) In subsection (a)(1)— 

2 (A) by striking ‘‘minimizing’’ and inserting 

3 ‘‘reducing’’; and 

4 (B) by inserting ‘‘, reliance on oil, impacts 

5 on the environment, transportation-related 

6 greenhouse gas emissions’’ after ‘‘consump7 tion’’. 

8 (2) In subsection (h)(1)(E)— 

9 (A) by inserting ‘‘sustainability and liv10 ability, reduce surface transportation-related 

11 greenhouse gas emissions and reliance on oil, 

12 adapt to the effects of climate change,’’ after 

13 ‘‘energy conservation’’; 

14 (B) by inserting ‘‘and public health’’ after 

15 ‘‘quality of life’’; and 

16 (C) by inserting ‘‘, including housing and 

17 land use patterns’’ after ‘‘development pat18 terns’’. 

19 (3) In subsection (i)(4)(A) by inserting ‘‘air 

20 quality, public health, housing, transportation,’’ 

21 after ‘‘conservation,’’. 

22 (4) In subsection (k) by inserting at the end the 

23 following new paragraph: 

24 ‘‘(6) EMISSIONS REDUCTION PROCESS.— 
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1 ‘‘(A) IN GENERAL.—Within a metropolitan 

2 planning area serving a transportation manage3 ment area, the transportation planning process 

4 under this section shall address transportation5 related greenhouse gas emissions by including 

6 emission reduction targets and strategies. 

7 ‘‘(B) ESTABLISHMENT OF EMISSIONS RE8 DUCTION TARGETS AND STRATEGIES.— 

9 ‘‘(i) IN GENERAL.—Not later than 1 

10 year after the promulgation of the final 

11 regulations required under section 841 of 

12 the Clean Air Act, each metropolitan plan13 ning organization shall develop surface 

14 transportation-related greenhouse gas 

15 emission reduction targets, as well as 

16 strategies to meet such targets, as part of 

17 the transportation planning process under 

18 this section. If more than one metropolitan 

19 planning organization has been designated 

20 within a metropolitan planning area serv21 ing a transportation management area, 

22 each such metropolitan planning organiza23 tion shall work cooperatively with other 

24 such organization to develop the surface 

25 transportation-related greenhouse gas 
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1 emission reduction targets required under 

2 this subparagraph. 

3 ‘‘(ii) MINIMUM REQUIREMENTS.— 

4 Each metropolitan planning organization 

5 that develops targets and strategies re6 quired under clause (i) shall demonstrate 

7 progress in stabilizing and reducing trans8 portation-related greenhouse gas emissions 

9 in each metropolitan planning area serving 

10 a surface transportation management area. 

11 The targets and strategies shall, at a min12 imum— 

13 ‘‘(I) be based on the models and 

14 methodologies established in the final 

15 regulations required under section 

16 841 of the Clean Air Act; 

17 ‘‘(II) address sources of surface 

18 transportation-related greenhouse gas 

19 emissions and contribute to achieve20 ment of the national transportation21 related greenhouse gas emissions re22 duction goals; 

23 ‘‘(III) include efforts to increase 

24 public transportation ridership; and 
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1 ‘‘(IV) include efforts to increase 

2 walking, bicycling, and other forms of 

3 nonmotorized transportation. 

4 ‘‘(C) PUBLIC NOTICE.—Each metropolitan 

5 planning organization shall make its emission 

6 reduction targets and strategies, and an anal7 ysis of the anticipated effects thereof, available 

8 to the public through its Web site. 

9 ‘‘(D) ENFORCEMENT.—If the Secretary 

10 finds that a metropolitan planning organization 

11 has failed to develop, submit or publish its 

12 emission reduction targets and strategies, the 

13 Secretary shall not certify that the require14 ments of this section are met with respect to 

15 the metropolitan planning process of such orga16 nization.’’. 

17 (c) STATES.—Section 135 of title 23 of the United 

18 States Code is amended as follows: 

19 (1) In subsection (d)(1)(E)— 

20 (A) by inserting ‘‘sustainability and liv21 ability, reduce surface transportation-related 

22 greenhouse gas emissions and reliance on oil, 

23 adapt to the effects of climate change,’’ after 

24 ‘‘energy conservation’’; 
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1 (B) by inserting ‘‘and public health’’ after 

2 ‘‘quality of life’’; and 

3 (C) by inserting ‘‘, including housing and 

4 land use patterns’’ after ‘‘development pat5 terns’’. 

6 (2) In subsection (f)(2)(D)(i) by inserting ‘‘air 

7 quality, public health, housing, transportation,’’ 

8 after ‘‘conservation,’’. 

9 (3) In subsection (f) by inserting at the end the 

10 following new paragraph: 

11 ‘‘(9) EMISSIONS REDUCTION PROCESS.— 

12 ‘‘(A) IN GENERAL.—Within a State, the 

13 transportation planning process under this sec14 tion shall address transportation-related green15 house gas emissions by including emission re16 duction targets and strategies. 

17 ‘‘(B) ESTABLISHMENT OF EMISSIONS RE18 DUCTION TARGETS AND STRATEGIES.— 

19 ‘‘(i) IN GENERAL.—Not later than 1 

20 year after the promulgation of the final 

21 regulations required under section 841 of 

22 the Clean Air Act, each State shall develop 

23 surface transportation-related greenhouse 

24 gas emission reduction targets, as well as 

25 strategies to meet such targets, as part of 
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1 the transportation planning process under 

2 this section. 

3 ‘‘(ii) MINIMUM REQUIREMENTS.— 

4 Each State that develops targets and strat5 egies required under clause (i) shall dem6 onstrate progress in stabilizing and reduc7 ing transportation-related greenhouse gas 

8 emissions in such State. The targets and 

9 strategies shall, at a minimum— 

10 ‘‘(I) be based on the models and 

11 methodologies established in the final 

12 regulations required under section 

13 841 of the Clean Air Act; 

14 ‘‘(II) address sources of surface 

15 transportation-related greenhouse gas 

16 emissions and contribute to achieve17 ment of the national transportation18 related greenhouse gas emissions re19 duction goals; 

20 ‘‘(III) include efforts to increase 

21 public transportation ridership; and 

22 ‘‘(IV) include efforts to increase 

23 walking, bicycling, and other forms of 

24 nonmotorized transportation. 
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1 ‘‘(D) PUBLIC NOTICE.—Each State shall 

2 make its emission reduction targets and strate3 gies, and an analysis of the anticipated effects 

4 thereof, available to the public through its Web 

5 site. 

6 ‘‘(E) ENFORCEMENT.—If the Secretary 

7 finds that a State has failed to develop, submit 

8 or publish its emission reduction targets and 

9 strategies, the Secretary shall not certify that 

10 the requirements of this section are met with 

11 respect to the statewide planning process of 

12 such State.’’. 

13 (d) DEPARTMENT OF TRANSPORTATION.—The Sec14 retary of Transportation shall establish appropriate re15 quirements, including performance measures, to ensure 

16 that transportation plans developed under sections 134 

17 and 135 of title 23 of the United States Code sufficiently 

18 meet the requirements of this section, including achieving 

19 progress towards national transportation-related green20 house gas emissions reduction goals. 

21 SEC. 223. SMARTWAY TRANSPORTATION EFFICIENCY PRO22 GRAM. 

23 Part B of title VIII of the Clean Air Act, as added 

24 by section 221 of this Act is amended by adding after sec25 tion 821 the following section: 
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1 ‘‘SEC. 822. SMARTWAY TRANSPORTATION EFFICIENCY PRO2 GRAM. 

3 ‘‘(a) IN GENERAL.—There is established within the 

4 Environmental Protection Agency a SmartWay Transport 

5 Program to quantify, demonstrate, and promote the bene6 fits of technologies, products, fuels, and operational strate7 gies that reduce petroleum consumption, air pollution, and 

8 greenhouse gas emissions from the mobile source sector. 

9 ‘‘(b) GENERAL DUTIES.—Under the program estab10 lished under this section, the Administrator shall carry out 

11 each of the following: 

12 ‘‘(1) Development of measurement protocols to 

13 evaluate the energy consumption and greenhouse gas 

14 impacts from technologies and strategies in the mo15 bile source sector, including those for passenger 

16 transport and goods movement. 

17 ‘‘(2) Development of qualifying thresholds for 

18 certifying, verifying, or designating energy-efficient, 

19 low-greenhouse gas SmartWay technologies and 

20 strategies for each mode of passenger transportation 

21 and goods movement. 

22 ‘‘(3) Development of partnership and recogni23 tion programs to promote best practices and drive 

24 demand for energy-efficient, low-greenhouse gas 

25 transportation performance. 
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1 ‘‘(4) Promotion of the availability of, and en2 couragement of the adoption of, SmartWay certified 

3 or verified technologies and strategies, and publica4 tion of the availability of financial incentives, such 

5 as assistance from loan programs and other Federal 

6 and State incentives. 

7 ‘‘(c) SMARTWAY TRANSPORT FREIGHT PARTNER8 SHIP.—The Administrator shall establish a SmartWay 

9 Transport Freight Partnership program with shippers and 

10 carriers of goods to promote energy-efficient, low-green11 house gas transportation. In carrying out such partner12 ship, the Administrator shall undertake each of the fol13 lowing: 

14 ‘‘(1) Certification of the energy and greenhouse 

15 gas performance of participating freight carriers, in16 cluding those operating rail, trucking, marine, and 

17 other goods movement operations. 

18 ‘‘(2) Publication of a comprehensive energy and 

19 greenhouse gas performance index of freight modes 

20 (including rail, trucking, marine, and other modes of 

21 transporting goods) and individual freight companies 

22 so that shippers can choose to deliver their goods 

23 more efficiently. 

24 ‘‘(3) Development of tools for— 
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1 ‘‘(A) carriers to calculate their energy and 

2 greenhouse gas performance; and 

3 ‘‘(B) shippers to calculate the energy and 

4 greenhouse gas impacts of moving their prod5 ucts and to evaluate the relative impacts from 

6 transporting their goods by different modes and 

7 corporate carriers. 

8 ‘‘(4) Provision of recognition opportunities for 

9 participating shipper and carrier companies dem10 onstrating advanced practices and achieving superior 

11 levels of greenhouse gas performance. 

12 ‘‘(d) IMPROVING FREIGHT GREENHOUSE GAS PER13 FORMANCE DATABASES.—The Administrator shall, in co14 ordination with other appropriate agencies, define and col15 lect data on the physical and operational characteristics 

16 of the Nation’s truck population, with special emphasis on 

17 data related to energy efficiency and greenhouse gas per18 formance to inform the performance index published 

19 under subsection (c)(2) of this section, and other means 

20 of goods transport as necessary, at least every 5 years. 

21 ‘‘(e) ESTABLISHMENT OF FINANCING PROGRAM.— 

22 The Administrator shall establish a SmartWay Financing 

23 Program to competitively award funding to eligible entities 

24 identified by the Administrator in accordance with the 

25 program requirements in subsection (g). 
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1 ‘‘(f) PURPOSE.—Under the SmartWay Financing 

2 Program, eligible entities shall— 

3 ‘‘(1) use funds awarded by the Administrator to 

4 provide flexible loan and lease terms that increase 

5 approval rates or lower the costs of loans and leases 

6 in accordance with guidance developed by the Ad7 ministrator; and 

8 ‘‘(2) make such loans and leases available to 

9 public and private entities for the purpose of adopt10 ing low-greenhouse gas technologies or strategies for 

11 the mobile source sector that are designated by the 

12 Administrator. 

13 ‘‘(g) PROGRAM REQUIREMENTS.—The Administrator 

14 shall determine program design elements and require15 ments, including— 

16 ‘‘(1) the type of financial mechanism with 

17 which to award funding, in the form of grants or 

18 contracts; 

19 ‘‘(2) the designation of eligible entities to re20 ceive funding, including State, tribal, and local gov21 ernments, regional organizations comprised of gov22 ernmental units, nonprofit organizations, or for-prof23 it companies; 

24 ‘‘(3) criteria for evaluating applications from el25 igible entities, including anticipated— 
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1 ‘‘(A) cost-effectiveness of loan or lease pro2 gram on a metric-ton-of-greenhouse gas-saved3 per-dollar basis; 

4 ‘‘(B) ability to promote the loan or lease 

5 program and associated technologies and strate6 gies to the target audience; and 

7 ‘‘(4) reporting requirements for entities that re8 ceive awards, including— 

9 ‘‘(A) actual cost-effectiveness and green10 house gas savings from the loan or lease pro11 gram based on a methodology designated by the 

12 Administrator; 

13 ‘‘(B) the total number of applications and 

14 number of approved applications; and 

15 ‘‘(C) terms granted to loan and lease re16 cipients compared to prevailing market prac17 tices. 

18 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—Such 

19 sums as necessary are authorized to be appropriated to 

20 the Administrator to carry out this section.’’. 

21 SEC. 224. STATE VEHICLE FLEETS. 

22 Section 507(o) of the Energy Policy Act of 1992 (42 

23 U.S.C. 13257) is amended by adding the following new 

24 paragraph at the end thereof: 
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1 ‘‘(3) The Secretary shall revise the rules under this 

2 subsection with respect to the types of alternative fueled 

3 vehicles required for compliance with this subsection to en4 sure those rules are consistent with any guidance issued 

5 pursuant to section 303 of this Act.’’. 

6 Subtitle D—Industrial Energy 

7 Efficiency Programs 

8 SEC. 241. INDUSTRIAL PLANT ENERGY EFFICIENCY STAND9 ARDS. 

10 The Secretary of Energy shall continue to support 

11 the development of the American National Standards In12 stitute (ANSI) voluntary industrial plant energy efficiency 

13 certification program, pending International Standards 

14 Organization (ISO) consensus standard 50001, and other 

15 related ANSI/ISO standards. In addition, the Department 

16 shall undertake complementary activities through the De17 partment of Energy’s Industry Technologies Program that 

18 support the voluntary implementation of such standards 

19 by manufacturing firms. There are authorized to be appro20 priated to the Secretary such sums as are necessary to 

21 carry out these activities. The Secretary shall report to 

22 Congress on the status of standards development and 

23 plans for further standards development pursuant to this 

24 section by not later than 18 months after the date of en-
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1 actment of this Act, and shall prepare a second such re2 port 18 months thereafter. 

3 SEC. 242. ELECTRIC AND THERMAL WASTE ENERGY RECOV4 ERY AWARD PROGRAM. 

5 (a) ELECTRIC AND THERMAL WASTE ENERGY RE6 COVERY AWARDS.—The Secretary of Energy shall estab7 lish a program to make monetary awards to the owners 

8 and operators of new and existing electric energy genera9 tion facilities or thermal energy production facilities using 

10 fossil or nuclear fuel, to encourage them to use innovative 

11 means of recovering any thermal energy that is a poten12 tially useful byproduct of electric power generation or 

13 other processes to— 

14 (1) generate additional electric energy; or 

15 (2) make sales of thermal energy not used for 

16 electric generation, in the form of steam, hot water, 

17 chilled water, or desiccant regeneration, or for other 

18 commercially valid purposes. 

19 (b) AMOUNT OF AWARDS.— 

20 (1) ELIGIBILITY.—Awards shall be made under 

21 subsection (a) only for the use of innovative means 

22 that achieve net energy efficiency at the facility con23 cerned significantly greater than the current stand24 ard technology in use at similar facilities. 
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1 (2) AMOUNT.—The amount of an award made 

2 under subsection (a) shall equal an amount up to 

3 the value of 25 percent of the energy projected to be 

4 recovered or generated during the first 5 years of 

5 operation of the facility using the innovative energy 

6 recovery method, or such lesser amount that the 

7 Secretary determines to be the minimum amount 

8 that can cost-effectively stimulate such innovation. 

9 (3) LIMITATION.—No person may receive an 

10 award under this section if a grant under the waste 

11 energy incentive grant program under section 373 of 

12 the Energy Policy and Conservation Act (42 U.S.C. 

13 6343) is made for the same energy savings resulting 

14 from the same innovative method. 

15 (c) REGULATORY STATUS.—The Secretary of Energy 

16 shall— 

17 (1) assist State regulatory commissions to iden18 tify and make changes in State regulatory programs 

19 for electric utilities to provide appropriate regulatory 

20 status for thermal energy byproduct businesses of 

21 regulated electric utilities to encourage those utilities 

22 to enter businesses making the sales referred to in 

23 subsection (a)(2); and 
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1 (2) encourage self-regulated utilities to enter 

2 businesses making the sales referred to in subsection 

3 (a)(2). 

4 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

5 are authorized to be appropriated to the Secretary of En6 ergy such sums as are necessary for the purposes of this 

7 section. 

8 SEC. 243. CLARIFYING ELECTION OF WASTE HEAT RECOV9 ERY FINANCIAL INCENTIVES. 

10 Section 373(e) of the Energy Policy and Conservation 

11 Act (42 U.S.C. 6343(e)) is amended— 

12 (1) by striking ‘‘that qualifies for’’ and insert13 ing ‘‘who elects to claim’’; and 

14 (2) by inserting ‘‘from that project’’ after ‘‘for 

15 waste heat recovery’’. 

16 SEC. 244. MOTOR MARKET ASSESSMENT AND COMMERCIAL 

17 AWARENESS PROGRAM. 

18 (a) FINDINGS.—Congress finds that— 

19 (1) electric motor systems account for about 

20 half of the electricity used in the United States; 

21 (2) electric motor energy use is determined by 

22 both the efficiency of the motor and the system in 

23 which the motor operates; 
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1 (3) Federal Government research on motor end 

2 use and efficiency opportunities is more than a dec3 ade old; and 

4 (4) the Census Bureau has discontinued collec5 tion of data on motor and generator importation, 

6 manufacture, shipment, and sales. 

7 (b) DEFINITIONS.—In this section: 

8 (1) DEPARTMENT.—The term ‘‘Department’’ 

9 means the Department of Energy. 

10 (2) INTERESTED PARTIES.—The term ‘‘inter11 ested parties’’ includes— 

12 (A) trade associations; 

13 (B) motor manufacturers; 

14 (C) motor end users; 

15 (D) electric utilities; and 

16 (E) individuals and entities that conduct 

17 energy efficiency programs. 

18 (3) SECRETARY.—The term ‘‘Secretary’’ means 

19 the Secretary of Energy, in consultation with inter20 ested parties. 

21 (c) ASSESSMENT.—The Secretary shall conduct an 

22 assessment of electric motors and the electric motor mar23 ket in the United States that shall— 
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1 (1) include important subsectors of the indus2 trial and commercial electric motor market (as de3 termined by the Secretary), including— 

4 (A) the stock of motors and motor-driven 

5 equipment; 

6 (B) efficiency categories of the motor pop7 ulation; and 

8 (C) motor systems that use drives, servos, 

9 and other control technologies; 

10 (2) characterize and estimate the opportunities 

11 for improvement in the energy efficiency of motor 

12 systems by market segment, including opportunities 

13 for— 

14 (A) expanded use of drives, servos, and 

15 other control technologies; 

16 (B) expanded use of process control, 

17 pumps, compressors, fans or blowers, and mate18 rial handling components; and 

19 (C) substitution of existing motor designs 

20 with existing and future advanced motor de21 signs, including electronically commutated per22 manent magnet, interior permanent magnet, 

23 and switched reluctance motors; and 

24 (3) develop an updated profile of motor system 

25 purchase and maintenance practices, including sur-
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1 veying the number of companies that have motor 

2 purchase and repair specifications, by company size, 

3 number of employees, and sales. 

4 (d) RECOMMENDATIONS; UPDATE.—Based on the as5 sessment conducted under subsection (c), the Secretary 

6 shall— 

7 (1) develop— 

8 (A) recommendations to update the de9 tailed motor profile on a periodic basis; 

10 (B) methods to estimate the energy sav11 ings and market penetration that is attributable 

12 to the Save Energy Now Program of the De13 partment; and 

14 (C) recommendations for the Director of 

15 the Census Bureau on market surveys that 

16 should be undertaken in support of the motor 

17 system activities of the Department; and 

18 (2) prepare an update to the Motor Master+ 

19 program of the Department. 

20 (e) PROGRAM.—Based on the assessment, rec21 ommendations, and update required under subsections (c) 

22 and (d), the Secretary shall establish a proactive, national 

23 program targeted at motor end-users and delivered in co24 operation with interested parties to increase awareness 

25 of— 
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1 (1) the energy and cost-saving opportunities in 

2 commercial and industrial facilities using higher effi3 ciency electric motors; 

4 (2) improvements in motor system procurement 

5 and management procedures in the selection of high6 er efficiency electric motors and motor-system com7 ponents, including drives, controls, and driven equip8 ment; and 

9 (3) criteria for making decisions for new, re10 placement, or repair motor and motor system com11 ponents. 

12 SEC. 245. MOTOR EFFICIENCY REBATE PROGRAM. 

13 (a) IN GENERAL.—Part C of title III of the Energy 

14 Policy and Conservation Act (42 U.S.C. 6311 et seq.) is 

15 amended by adding at the end the following: 

16 ‘‘SEC. 347. MOTOR EFFICIENCY REBATE PROGRAM. 

17 ‘‘(a) ESTABLISHMENT.—Not later than January 1, 

18 2010, in accordance with subsection (b), the Secretary 

19 shall establish a program to provide rebates for expendi20 tures made by entities— 

21 ‘‘(1) for the purchase and installation of a new 

22 electric motor that has a nominal full load efficiency 

23 that is not less than the nominal full load efficiency 

24 as defined in— 
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1 ‘‘(A) table 12–12 of NEMA Standards 

2 Publication MG 1–2006 for random wound mo3 tors rated 600 volts or lower; or 

4 ‘‘(B) table 12–13 of NEMA Standards 

5 Publication MG 1–2006 for form wound motors 

6 rated 5000 volts or lower; and 

7 ‘‘(2) to replace an installed motor of the entity 

8 the specifications of which are established by the 

9 Secretary by a date that is not later than 90 days 

10 after the date of enactment of this section. 

11 ‘‘(b) REQUIREMENTS.— 

12 ‘‘(1) APPLICATION.—To be eligible to receive a 

13 rebate under this section, an entity shall submit to 

14 the Secretary an application in such form, at such 

15 time, and containing such information as the Sec16 retary may require, including— 

17 ‘‘(A) demonstrated evidence that the entity 

18 purchased an electric motor described in sub19 section (a)(1) to replace an installed motor de20 scribed in subsection (a)(2); 

21 ‘‘(B) demonstrated evidence that the enti22 ty— 

23 ‘‘(i) removed the installed motor of 

24 the entity from service; and 
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1 ‘‘(ii) properly disposed the installed 

2 motor of the entity; and 

3 ‘‘(C) the physical nameplate of the in4 stalled motor of the entity. 

5 ‘‘(2) AUTHORIZED AMOUNT OF REBATE.—The 

6 Secretary may provide to an entity that meets each 

7 requirement under paragraph (1) a rebate the 

8 amount of which shall be equal to the product ob9 tained by multiplying— 

10 ‘‘(A) the nameplate horsepower of the elec11 tric motor purchased by the entity in accord12 ance with subsection (a)(1); and 

13 ‘‘(B) $25.00. 

14 ‘‘(3) PAYMENTS TO DISTRIBUTORS OF QUALI15 FYING ELECTRIC MOTORS.—To assist in the pay16 ment for expenses relating to processing and motor 

17 core disposal costs, the Secretary shall provide to the 

18 distributor of an electric motor described in sub19 section (a)(1), the purchaser of which received a re20 bate under this section, an amount equal to the 

21 product obtained by multiplying— 

22 ‘‘(A) the nameplate horsepower of the elec23 tric motor; and 

24 ‘‘(B) $5.00. 
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1 ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated to carry out this section, 

3 to remain available until expended— 

4 ‘‘(1) $80,000,000 for fiscal year 2011; 

5 ‘‘(2) $75,000,000 for fiscal year 2012; 

6 ‘‘(3) $70,000,000 for fiscal year 2013; 

7 ‘‘(4) $65,000,000 for fiscal year 2014; and 

8 ‘‘(5) $60,000,000 for fiscal year 2015.’’. 

9 (b) TABLE OF CONTENTS.—The table of contents of 

10 the Energy Policy and Conservation Act (42 U.S.C. prec. 

11 6201) is amended by adding at the end of the items relat12 ing to part C of title III the following: 

‘‘Sec. 347. Motor efficiency rebate program.’’. 

13 SEC. 246. CLEAN ENERGY MANUFACTURING REVOLVING 

14 LOAN FUND PROGRAM. 

15 The National Institute of Standards and Technology 

16 Act (15 U.S.C. 271 et seq.) is amended by inserting after 

17 section 26 the following: 

18 ‘‘SEC. 27. CLEAN ENERGY MANUFACTURING REVOLVING 

19 LOAN FUND PROGRAM. 

20 ‘‘(a) PURPOSES.—The purposes of this section are as 

21 follows: 

22 ‘‘(1) To develop the long-term manufacturing 

23 capacity of the United States. 

24 ‘‘(2) To create jobs through the retooling and 

25 expansion of manufacturing facilities to produce 
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1 clean energy technology products and energy effi2 cient products. 

3 ‘‘(3) To improve the long-term competitiveness 

4 of domestic manufacturing by increasing the energy 

5 efficiency of manufacturing facilities. 

6 ‘‘(4) To assist small and medium-sized manu7 facturers diversify operations to respond to emerging 

8 clean energy technology product markets. 

9 ‘‘(b) DEFINITIONS.—In this section: 

10 ‘‘(1) CLEAN ENERGY TECHNOLOGY PRODUCT.— 

11 The term ‘clean energy technology product’ means 

12 technology products relating to the following: 

13 ‘‘(A) Wind turbines. 

14 ‘‘(B) Solar energy. 

15 ‘‘(C) Fuel cells. 

16 ‘‘(D) Advanced batteries, battery systems, 

17 or storage devices. 

18 ‘‘(E) Biomass equipment. 

19 ‘‘(F) Geothermal equipment. 

20 ‘‘(G) Advanced biofuels. 

21 ‘‘(H) Ocean energy equipment. 

22 ‘‘(I) Carbon capture and storage. 

23 ‘‘(J) Such other products as the Secretary 

24 determines— 
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1 ‘‘(i) relate to the production, use, 

2 transmission, storage, control, or conserva3 tion of energy; 

4 ‘‘(ii) reduce greenhouse gas concentra5 tions; 

6 ‘‘(iii) achieve the earliest and max7 imum emission reductions within a reason8 able period per dollar invested; 

9 ‘‘(iv) result in the fewest non-green10 house gas environmental impacts; and 

11 ‘‘(v) either— 

12 ‘‘(I) reduce the need for addi13 tional energy supplies by— 

14 ‘‘(aa) using existing energy 

15 supplies with greater efficiency; 

16 or 

17 ‘‘(bb) by transmitting, dis18 tributing, or transporting energy 

19 with greater effectiveness 

20 through the infrastructure of the 

21 United States; or 

22 ‘‘(II) diversity the sources of en23 ergy supply of the United States— 

24 ‘‘(aa) to strengthen energy 

25 security; and 
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1 ‘‘(bb) to increase supplies 

2 with a favorable balance of envi3 ronmental effects if the entire 

4 technology system is considered. 

5 ‘‘(2) ENERGY EFFICIENT PRODUCT.—The term 

6 ‘energy efficient product’ means a product that, as 

7 determined by the Secretary in consultation with the 

8 Secretary of Energy— 

9 ‘‘(A) consumes significantly less energy 

10 than the average amount that all similar prod11 ucts consumed on the day before the date of the 

12 enactment of this Act; or 

13 ‘‘(B) is a component, system, or group of 

14 subsystems that is designed, developed, and 

15 validated to optimize the energy efficiency of a 

16 product. 

17 ‘‘(3) HOLLINGS MANUFACTURING EXTENSION

18 CENTER.—The term ‘Hollings Manufacturing Exten19 sion Center’ means a center established under sec20 tion 25. 

21 ‘‘(4) HOLLINGS MANUFACTURING PARTNERSHIP

22 PROGRAM.—The term ‘Hollings Manufacturing Part23 nership Program’ means the program established 

24 under sections 25 and 26. 
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1 ‘‘(5) PROGRAM.—The term ‘Program’ means 

2 the grant program established pursuant to sub3 section (c)(1). 

4 ‘‘(6) REVOLVING LOAN FUND.—The term ‘re5 volving loan fund’ means a revolving loan fund de6 scribed in subsection (d). 

7 ‘‘(7) SECRETARY.—Except as otherwise pro8 vided, the term ‘Secretary’ means the Secretary of 

9 Commerce. 

10 ‘‘(8) SMALL OR MEDIUM-SIZED MANUFAC11 TURER.—The term ‘small or medium-sized manufac12 turer’ means a manufacturer that employs fewer 

13 than 500 full-time equivalent employees at a manu14 facturing facility that is not owned or controlled by 

15 an automobile manufacturer. 

16 ‘‘(c) GRANT PROGRAM.— 

17 ‘‘(1) ESTABLISHMENT.—Not later than 120 

18 days after the date of the enactment of this section, 

19 the Secretary shall establish a program under which 

20 the Secretary shall award grants to States to estab21 lish revolving loan funds to provide loans to small 

22 and medium-sized manufacturers to finance the cost 

23 of— 

24 ‘‘(A) reequipping, expanding, or estab25 lishing (including applicable engineering costs) 
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1 a manufacturing facility in the United States to 

2 produce— 

3 ‘‘(i) clean energy technology products; 

4 ‘‘(ii) energy efficient products; or 

5 ‘‘(iii) integral component parts of 

6 clean energy technology products or energy 

7 efficient products; or 

8 ‘‘(B) reducing the energy intensity or 

9 greenhouse gas production of a manufacturing 

10 facility in the United States, including using 

11 energy intensive feedstocks. 

12 ‘‘(2) MAXIMUM AMOUNT.—The Secretary may 

13 not award a grant under the Program in an amount 

14 that exceeds $500,000,000 in any fiscal year. 

15 ‘‘(d) CRITERIA FOR AWARDING GRANTS.— 

16 ‘‘(1) MATCHING FUNDS.—The Secretary may 

17 make a grant to a State under the Program only if 

18 the State agrees to ensure that for each loan pro19 vided by the State under the Program, not less than 

20 20 percent of the amount of each loan will come 

21 from a non-Federal source. 

22 ‘‘(2) ADMINISTRATIVE COSTS.—A State receiv23 ing a grant under the Program may only use such 

24 amount of the grant for the costs of administering 
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1 the revolving loan fund as the Secretary shall pro2 vide in regulations. 

3 ‘‘(3) APPLICATION.—Each State seeking a 

4 grant under the Program shall submit to the Sec5 retary an application therefor in such form and in 

6 such manner as the Secretary considers appropriate. 

7 ‘‘(4) EVALUATION.—The Secretary shall evalu8 ate and prioritize an application submitted by a 

9 State for a grant under the Program on the basis 

10 of— 

11 ‘‘(A) the description of the revolving loan 

12 fund to be established with the grant and how 

13 such revolving loan fund will achieve the pur14 poses described in subsection (a); 

15 ‘‘(B) whether the State will be able to pro16 vide loans from the revolving loan fund to small 

17 or medium-sized manufacturers before the date 

18 that is 120 days after the date on which the 

19 State receives the grant; 

20 ‘‘(C) a description of how the State will 

21 administer the revolving loan fund in coordina22 tion with other State and Federal programs, in23 cluding programs administered by the Assistant 

24 Secretary for Economic Development; 
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1 ‘‘(D) a description of the actual or poten2 tial clean energy manufacturing supply chains, 

3 including significant component parts, in the re4 gion served by the revolving loan fund; 

5 ‘‘(E) how the State will target the provi6 sion of loans under the Program to manufactur7 ers located in regions characterized by high un8 employment and sudden and severe economic 

9 dislocation, in particular where mass layoffs 

10 have resulted in a precipitous increase in unem11 ployment; 

12 ‘‘(F) the availability of a skilled manufac13 turing workforce in the region served by the re14 volving loan fund and the capacity of the re15 gion’s workforce and education systems to pro16 vide pathways for unemployed or low-income 

17 workers into skilled manufacturing employment; 

18 ‘‘(G) a description of how the State will 

19 target loans to small or medium-sized manufac20 turers who are— 

21 ‘‘(i) manufacturers of automobile com22 ponents; and 

23 ‘‘(ii) either— 
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1 ‘‘(I) increasing the energy effi2 ciency of their manufacturing facili3 ties; or 

4 ‘‘(II) retooling to manufacture 

5 clean energy products or energy effi6 cient products, including manufac7 turing components to improve the 

8 compliance of an automobile with fuel 

9 economy standards prescribed under 

10 section 32902 of title 49, United 

11 States Code; 

12 ‘‘(H) a description of how the State will 

13 use the loan fund to achieve the earliest and 

14 maximum greenhouse gas emission reductions 

15 within a reasonable period of time per dollar in16 vested and with the fewest non-greenhouse gas 

17 environmental impacts; and 

18 ‘‘(I) such other factors as the Secretary 

19 considers appropriate to ensure that grants 

20 awarded under the Program effectively and effi21 ciently achieve the purposes described in sub22 section (a). 

23 ‘‘(e) REVOLVING LOAN FUNDS.— 

24 ‘‘(1) IN GENERAL.—A State receiving a grant 

25 under the Program shall establish, maintain, and 
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1 administer a revolving loan fund in accordance with 

2 this subsection. 

3 ‘‘(2) DEPOSITS.—A revolving loan fund shall 

4 consist of the following: 

5 ‘‘(A) Amounts from grants awarded under 

6 this section. 

7 ‘‘(B) All amounts held or received by the 

8 State incident to the provision of loans de9 scribed in subsection (f), including all collec10 tions of principal and interest. 

11 ‘‘(3) EXPENDITURES.—Amounts in the revolv12 ing loan fund shall be available for the provision and 

13 administration of loans in accordance with sub14 section (f). 

15 ‘‘(4) LIMITATION.—No funds provided pursuant 

16 to this section may be leveraged through use of tax17 exempt bonding authority by a State or a political 

18 subdivision of a State. 

19 ‘‘(f) LOANS.— 

20 ‘‘(1) IN GENERAL.—A State receiving a grant 

21 under this section shall use the amount in the re22 volving loan fund to provide loans to small and me23 dium-sized manufacturers as described in subsection 

24 (c)(1). 
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1 ‘‘(2) LOAN TERMS AND CONDITIONS.—The fol2 lowing shall apply with respect to loans provided 

3 under paragraph (1): 

4 ‘‘(A) TERMS.—Loans shall have a term de5 termined by the State receiving the grant as 

6 follows: 

7 ‘‘(i) For fixed assets, the term of the 

8 loan shall not exceed the useful life of the 

9 asset and shall be less than 15 years. 

10 ‘‘(ii) For working capital, the term of 

11 the loan shall not exceed 36 months. 

12 ‘‘(B) INTEREST RATES.—Loans shall bear 

13 an interest rate determined by the State receiv14 ing the grant as follows: 

15 ‘‘(i) The interest rate shall enable the 

16 loan recipient to accomplish the activities 

17 described in subparagraphs (A) and (B) of 

18 subsection (c)(1). 

19 ‘‘(ii) The interest rate may be set 

20 below-market interest rates. 

21 ‘‘(iii) The interest rate may not be 

22 less than zero percent. 

23 ‘‘(iv) The interest rate may not exceed 

24 the current prime rate plus 500 basis 

25 points. 
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1 ‘‘(C) DESCRIPTION AND BUDGET FOR USE

2 OF LOAN FUNDS.—Each recipient of a loan 

3 from a State under the Program shall develop 

4 and submit to the State and the Secretary a de5 scription and budget for the use of loan 

6 amounts, including a description of the fol7 lowing: 

8 ‘‘(i) Any new business expected to be 

9 developed with the loan. 

10 ‘‘(ii) Any improvements to manufac11 turing operations to be developed with the 

12 loan. 

13 ‘‘(iii) Any technology expected to be 

14 commercialized with the loan. 

15 ‘‘(D) PRIORITY IN REVIEW AND PREF16 ERENCE IN SELECTION FOR CERTAIN LOAN AP17 PLICANTS.— 

18 ‘‘(i) REVIEW.—In reviewing applica19 tions submitted by small or medium-sized 

20 manufacturers for a loan, a recipient of a 

21 grant under the Program shall give pri22 ority to small or medium-sized manufac23 turers described in clause (iii). 

24 ‘‘(ii) SELECTION.—In selecting small 

25 or medium-sized manufacturers to receive 
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•HR 2454 EH

1 a loan, a recipient of a grant under the 

2 Program shall give preference to small or 

3 medium-sized manufacturers described in 

4 clause (iii). 

5 ‘‘(iii) PRIORITY AND PREFERRED

6 SMALL OR MEDIUM-SIZED MANUFACTUR7 ERS.—A small or medium-sized manufac8 turer described in this clause is a manufac9 turer that— 

10 ‘‘(I) is certified by a Hollings 

11 Manufacturing Extension Center or a 

12 manufacturing-related local inter13 mediary designated by the Secretary 

14 for purposes of providing such certifi15 cation; or 

16 ‘‘(II) provides individuals em17 ployed at the manufacturing facilities 

18 of the manufacturer— 

19 ‘‘(aa) pay in amounts that 

20 are, on average, equal to or more 

21 than the average wage of an indi22 vidual working in a manufac23 turing facility in the State; and 

24 ‘‘(bb) health benefits. 
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1 ‘‘(iv) CERTIFICATION BY HOLLINGS

2 MANUFACTURING EXTENSION CENTER.—A 

3 Hollings Manufacturing Extension Center 

4 or other entity designated by the Secretary 

5 for purposes of providing certification 

6 under clause (iii)(I) shall only certify appli7 cations for a loan after carrying out a 

8 qualitative and quantitative review of the 

9 applicant’s business strategy, manufac10 turing operations, and technological ability 

11 to contribute to the purposes described in 

12 subsection (a). 

13 ‘‘(E) REPAYMENT UPON RELOCATION OUT14 SIDE UNITED STATES.— 

15 ‘‘(i) IN GENERAL.—If a person re16 ceives a loan under paragraph (1) to fi17 nance the cost of reequipping, expanding, 

18 or establishing a manufacturing facility as 

19 described in subsection (c)(1)(A) or to re20 duce the energy intensity of a manufac21 turing facility and such person relocates 

22 the production activities of such manufac23 turing facility outside the United States 

24 during the term of the loan, the recipient 

25 shall repay such loan in full with interest 
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1 as described in clause (ii) and for a dura2 tion described in clause (iii). 

3 ‘‘(ii) PAYMENT OF INTEREST.—Any 

4 amount owed by the recipient of a loan 

5 under paragraph (1) who is required to 

6 repay the loan under clause (i) shall bear 

7 interest at a penalty rate determined by 

8 the Secretary to deter recipients of loans 

9 under paragraph (1) from relocating pro10 duction activities as described in clause (i). 

11 ‘‘(iii) PERIOD OF REPAYMENT.—Re12 payment of a loan under clause (i) shall be 

13 for a duration determined by the Sec14 retary. 

15 ‘‘(F) COMPLIANCE WITH WAGE RATE RE16 QUIREMENTS.—Each recipient of a loan shall 

17 undertake and agree to incorporate or cause to 

18 be incorporated into all contracts for construc19 tion, alteration or repair, which are paid for in 

20 whole or in part with funds obtained pursuant 

21 to such loan, a requirement that all laborers 

22 and mechanics employed by contractors and 

23 subcontractors performing construction, alter24 ation or repair shall be paid wages at rates not 

25 less than those determined by the Secretary of 
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1 Labor, in accordance with subchapter IV of 

2 chapter 31 of title 40, United States Code 

3 (known as the ‘Davis-Bacon Act’), to be pre4 vailing for the corresponding classes of laborers 

5 and mechanics employed on projects of a char6 acter similar to the contract work in the same 

7 locality in which the work is to be performed. 

8 The Secretary of Labor shall have, with respect 

9 to the labor standards specified in this subpara10 graph, the authority and functions set forth in 

11 Reorganization Plan Numbered 14 of 1950 (15 

12 Fed. Reg. 3176; 64 Stat. 1267) and section 

13 3145 of title 40, United States Code. 

14 ‘‘(G) ANNUAL REPORTS BY LOAN RECIPI15 ENTS.—Each recipient of a loan issued by a 

16 State under paragraph (1) shall, not less fre17 quently than once each year during the term of 

18 the loan, submit to such State a report con19 taining such information as the Secretary may 

20 specify for purposes of the Program, including 

21 information that the Secretary can use to deter22 mine whether a recipient of a loan is required 

23 to repay the loan under subparagraph (E). 

24 ‘‘(3) ANNUAL REPORTS BY GRANT RECIPI25 ENTS.—Each recipient of a grant under the Pro-
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1 gram shall, not less frequently than once each year, 

2 submit to the Secretary a report on the impact of 

3 each loan issued by the State under the Program 

4 and the aggregate impact of all loans so issued, in5 cluding the following: 

6 ‘‘(A) The sales increased or retained. 

7 ‘‘(B) Cost savings or costs avoided. 

8 ‘‘(C) Additional investment encouraged. 

9 ‘‘(D) Jobs created or retained. 

10 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 

11 is authorized to be appropriated to carry out this section 

12 $15,000,000,000 for each of fiscal years 2010 and 2011.’’. 

13 SEC. 247. CLEAN ENERGY AND EFFICIENCY MANUFAC14 TURING PARTNERSHIPS. 

15 (a) HOLLINGS MANUFACTURING PARTNERSHIP PRO16 GRAM.—Section 25(b) of the National Institute of Stand17 ards and Technology Act (15 U.S.C. 278k(b)) is amend18 ed— 

19 (1) in paragraph (2), by striking ‘‘and’’ at the 

20 end; 

21 (2) in paragraph (3), by striking the period at 

22 the end and inserting ‘‘; and’’; and 

23 (3) by adding at the end the following: 

24 ‘‘(4) the establishment of a clean energy manu25 facturing supply chain initiative— 
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1 ‘‘(A) to support manufacturers in their 

2 identification of and diversification to new mar3 kets, including support for manufacturers 

4 transitioning to the use of clean energy supply 

5 chains; 

6 ‘‘(B) to assist manufacturers improve their 

7 competitiveness by reducing energy intensity 

8 and greenhouse gas production, including the 

9 use of energy intensive feedstocks; 

10 ‘‘(C) to increase adoption and implementa11 tion of innovative manufacturing technologies; 

12 ‘‘(D) to coordinate and leverage the exper13 tise of the National Laboratories and Tech14 nology Centers and the Industrial Assessment 

15 Centers of the Department of Energy to meet 

16 the needs of manufacturers; and 

17 ‘‘(E) to identify, assist, and certify manu18 facturers seeking loans under section 

19 27(e)(1).’’. 

20 (b) REDUCTION IN COST SHARE REQUIREMENTS.— 

21 Section 25(c) of such Act (15 U.S.C. 278k(c)) is amend22 ed— 

23 (1) in paragraph (1), by inserting ‘‘or as pro24 vided in paragraph (5)’’ after ‘‘not to exceed six 

25 years’’; 
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1 (2) in paragraph (3)(B), by striking ‘‘not less 

2 than 50 percent of the costs incurred for the first 

3 3 years and an increasing share for each of the last 

4 3 years’’ and inserting ‘‘50 percent of the costs in5 curred or such lesser percentage of the costs in6 curred as determined appropriate by the Secretary 

7 by rule’’; and 

8 (3) in paragraph (5)— 

9 (A) by striking ‘‘at declining levels’’; 

10 (B) by striking ‘‘one third’’ and inserting 

11 ‘‘50 percent’’; and 

12 (C) by inserting ‘‘, or such lesser percent13 age as determined appropriate by the Secretary 

14 by rule,’’ after ‘‘maintenance costs’’. 

15 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

16 are authorized to be appropriated to the Secretary of Com17 merce for the Hollings Manufacturing Partnership Pro18 gram authorized under sections 25 of the National Insti19 tute of Standards and Technology Act (15 U.S.C. 278k) 

20 and for the provision of assistance under section 26 of 

21 such Act (15 U.S.C. 278l)— 

22 (1) $200,000,000 for fiscal year 2010; 

23 (2) $250,000,000 for fiscal year 2011; 

24 (3) $300,000,000 for fiscal year 2012; 

25 (4) $350,000,000 for fiscal year 2013; and 
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1 (5) $400,000,000 for fiscal year 2014. 

2 SEC. 248. TECHNICAL AMENDMENTS. 

3 (a) AMENDMENT TO NATIONAL INSTITUTE OF

4 STANDARDS AND TECHNOLOGY ACT.—Section 25 of the 

5 National Institute of Standards and Technology Act (15 

6 U.S.C. 278k(b)) is amended— 

7 (1) in subsection (a), by striking ‘‘(hereafter in 

8 this Act referred to as the ‘Centers’)’’; and 

9 (2) by adding at the end the following: 

10 ‘‘(g) DESIGNATION.— 

11 ‘‘(1) HOLLINGS MANUFACTURING PARTNERSHIP

12 PROGRAM.—The program under this section shall be 

13 known as the ‘Hollings Manufacturing Partnership 

14 Program’. 

15 ‘‘(2) HOLLINGS MANUFACTURING EXTENSION

16 CENTERS.—The Regional Centers for the Transfer 

17 of Manufacturing Technology created and supported 

18 under subsection (a) shall be known as the ‘Hollings 

19 Manufacturing Extension Centers’ (in this Act re20 ferred to as the ‘Centers’).’’. 

21 (b) AMENDMENT TO CONSOLIDATED APPROPRIA22 TIONS ACT, 2005.—Division B of title II of the Consoli23 dated Appropriations Act, 2005 (Public Law 108–447; 

24 118 Stat. 2879; 15 U.S.C. 278k note) is amended under 

25 the heading ‘‘INDUSTRIAL TECHNOLOGY SERVICES’’ by 
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1 striking ‘‘2007: Provided further, That’’ and all that fol2 lows through ‘‘Extension Centers.’’ and inserting ‘‘2007.’’. 

3 Subtitle E—Improvements in En4 ergy Savings Performance Con5 tracting 

6 SEC. 251. ENERGY SAVINGS PERFORMANCE CONTRACTS. 

7 (a) COMPETITION REQUIREMENTS FOR TASK OR DE8 LIVERY ORDERS UNDER ENERGY SAVINGS PERFORM9 ANCE CONTRACTS.— 

10 (1) COMPETITION REQUIREMENTS.—Subsection 

11 (a) of section 801 of the National Energy Conserva12 tion Policy Act (42 U.S.C. 8287(a)) is amended by 

13 adding at the end the following paragraph: 

14 ‘‘(3)(A) The head of a Federal agency may issue a 

15 task or delivery order under an energy savings perform16 ance contract by— 

17 ‘‘(i) notifying all contractors that have received 

18 an award under such contract that the agency pro19 poses to discuss energy savings performance services 

20 for some or all of its facilities and, following a rea21 sonable period of time to provide a proposal in re22 sponse to the notice, soliciting an expression of in23 terest in performing site surveys or investigations 

24 and feasibility designs and studies and the submis25 sion of qualifications from such contractors, and in-
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1 cluding in such notice summary information con2 cerning energy use for any facilities that the agency 

3 has specific interest in including in such contract; 

4 ‘‘(ii) reviewing all expressions of interest and 

5 qualifications submitted pursuant to the notice 

6 under clause (i); 

7 ‘‘(iii) selecting two or more contractors (from 

8 among those reviewed under clause (ii)) to conduct 

9 discussions concerning the contractors’ respective 

10 qualifications to implement potential energy con11 servation measures, including requesting references 

12 demonstrating experience on similar efforts and the 

13 resulting energy savings of such similar efforts, and 

14 providing an opportunity for a post-award debriefing 

15 to all contractors that submitted expressions of in16 terest and qualifications under clause (ii) pursuant 

17 to the notice; 

18 ‘‘(iv) selecting and authorizing— 

19 ‘‘(I) more than one contractor (from 

20 among those selected under clause (iii)) to con21 duct site surveys, investigations, feasibility de22 signs and studies or similar assessments for the 

23 energy savings performance contract services 

24 (or for discrete portions of such services), for 

25 the purpose of allowing each such contractor to 
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1 submit a firm, fixed-price proposal to imple2 ment specific energy conservation measures; or 

3 ‘‘(II) one contractor (from among those se4 lected under clause (iii)) to conduct a site sur5 vey, investigation, a feasibility design and study 

6 or similar for the purpose of allowing the con7 tractor to submit a firm, fixed-price proposal to 

8 implement specific energy conservation meas9 ures; 

10 ‘‘(v) negotiating a task or delivery order for en11 ergy savings performance contracting services with 

12 the contractor or contractors selected under clause 

13 (iv) based on the energy conservation measures iden14 tified; and 

15 ‘‘(vi) issuing a task or delivery order for energy 

16 savings performance contracting services to such 

17 contractor or contractors. 

18 ‘‘(B) The issuance of a task or delivery order for en19 ergy savings performance contracting services pursuant to 

20 subparagraph (A) is deemed to satisfy the task and deliv21 ery order competition requirements in section 2304c(d) of 

22 title 10, United States Code, and section 303J(d) of the 

23 Federal Property and Administrative Services Act of 1949 

24 (41 U.S.C. 253j(d)). 
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1 ‘‘(C) The Secretary may issue guidance as necessary 

2 to agencies issuing task or delivery orders pursuant to 

3 subparagraph (A).’’. 

4 (2) EFFECTIVE DATE.—The amendment made 

5 by paragraph (1) is inapplicable to task or delivery 

6 orders issued before the date of enactment of this 

7 section. 

8 (b) INCLUSION OF THERMAL RENEWABLE EN9 ERGY.—Section 203 of the Energy Policy Act of 2005 (42 

10 U.S.C. 15852) is amended— 

11 (1) in subsection (a), by striking ‘‘electric’’; and 

12 (2) in subsection (b)(2), by inserting ‘‘or ther13 mal’’ after ‘‘means electric’’. 

14 (c) CREDIT FOR RENEWABLE ENERGY PRODUCED

15 AND USED ON SITE.—Subsection (c) of section 203 of the 

16 Energy Policy Act of 2005 (42 U.S.C. 15852) is amended 

17 to read as follows: 

18 ‘‘(c) CALCULATION.—Renewable energy produced at 

19 a Federal facility, on Federal lands, or on Indian lands 

20 (as defined in title XXVI of the Energy Policy Act of 1992 

21 (25 U.S.C. 3501 et seq.)) shall be calculated separately 

22 from renewable energy consumed at a Federal facility, and 

23 each may be used to comply with the consumption require24 ment under subsection (a).’’. 
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1 (d) FINANCING FLEXIBILITY.—Section 801(a)(2)(E) 

2 of the National Energy Conservation Policy Act (42 

3 U.S.C. 8287(a)(2)(E)) is amended by striking ‘‘In’’ and 

4 inserting ‘‘Notwithstanding any other provision of law, 

5 in’’. 

6 Subtitle F—Public Institutions 

7 SEC. 261. PUBLIC INSTITUTIONS. 

8 Section 399A of the Energy Policy and Conservation 

9 Act (42 U.S.C. 6371h–1) is amended— 

10 (1) in subsection (a)(5), by striking ‘‘or a des11 ignee’’ and inserting ‘‘an Indian tribe, a not-for12 profit hospital or not-for-profit inpatient health care 

13 facility, or a designated agent’’; 

14 (2) in subsection (c)(1), by striking subpara15 graph (C); 

16 (3) in subsection (f)(3)(A), by striking 

17 ‘‘$1,000,000’’ and inserting ‘‘$2,500,000’’; and 

18 (4) in subsection (i)(1), by striking 

19 ‘‘$250,000,000 for each of fiscal years 2009 through 

20 2013’’ and inserting ‘‘$250,000,000 for each of fis21 cal years 2010 through 2015’’. 

22 SEC. 262. COMMUNITY ENERGY EFFICIENCY FLEXIBILITY. 

23 Section 545(b)(3) of the Energy Independence and 

24 Security Act of 2007 (42 U.S.C. 17155(b)(3)) is amend25 ed— 
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1 (1) by striking ‘‘Indian tribe may use’’ and all 

2 that follows through ‘‘for administrative expenses’’ 

3 and inserting ‘‘Indian tribe may use for administra4 tive expenses’’; 

5 (2) by striking subparagraphs (B) and (C); 

6 (3) by redesignating the remaining clauses (i) 

7 and (ii) as subparagraphs (A) and (B), respectively 

8 and adjusting the margin of those subparagraphs ac9 cordingly; and 

10 (4) by striking the semicolon at the end and in11 serting a period. 

12 SEC. 263. SMALL COMMUNITY JOINT PARTICIPATION. 

13 (a) Section 541(3)(A) of the Energy Independence 

14 and Security Act of 2007 is amended in clause (i) by strik15 ing ‘‘and’’ at the end of subclause (II), in clause (ii) by 

16 striking the period at the end of subclause (II) and insert17 ing ‘‘; or’’, and by inserting the following new clause (iii): 

18 ‘‘(iii) a group of adjacent, contiguous, or 

19 geographically proximate units of local govern20 ment that reach agreement to act jointly for 

21 purposes of this section and that represent a 

22 combined population of not less than 35,000.’’. 

23 (b) Section 541(3)(B) of the Energy Independence 

24 and Security Act of 2007 is amended in clause (i) by strik25 ing ‘‘or’’, in clause (ii) by striking the period at the end 
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1 and inserting ‘‘; or’’, and by inserting the following new 

2 clause (iii): 

3 ‘‘(iii) a group of adjacent, contiguous, or 

4 geographically proximate units of local govern5 ment that reach agreement to act jointly for 

6 purposes of this section and that represent a 

7 combined population of not less than 50,000.’’. 

8 SEC. 264. LOW INCOME COMMUNITY ENERGY EFFICIENCY 

9 PROGRAM. 

10 (a) IN GENERAL.—The Secretary of Energy is au11 thorized to make grants to private, nonprofit, mission12 driven community development organizations including 

13 community development corporations and community de14 velopment financial institutions to provide financing to 

15 businesses and projects that improve energy efficiency; 

16 identify and develop alternative, renewable, and distrib17 uted energy supplies; provide technical assistance and pro18 mote job and business opportunities for low-income resi19 dents; and increase energy conservation in low income 

20 rural and urban communities. 

21 (b) GRANTS.—The purpose of such grants is to in22 crease the flow of capital and benefits to low income com23 munities, minority-owned and woman-owned businesses 

24 and entrepreneurs and other projects and activities located 

25 in low income communities in order to reduce environ-
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1 mental degradation, foster energy conservation and effi2 ciency and create job and business opportunities for local 

3 residents. The Secretary may make grants on a competi4 tive basis for— 

5 (1) investments that develop alternative, renew6 able, and distributed energy supplies; 

7 (2) capitalizing loan funds that lend to energy 

8 efficiency projects and energy conservation pro9 grams; 

10 (3) technical assistance to plan, develop, and 

11 manage an energy efficiency financing program; and 

12 (4) technical and financial assistance to assist 

13 small-scale businesses and private entities develop 

14 new renewable and distributed sources of power or 

15 combined heat and power generation. 

16 (c) AUTHORIZATION OF APPROPRIATIONS.—For the 

17 purposes of this section there is authorized to be appro18 priated $50,000,000 for each of the fiscal years 2010 

19 through 2015. 

20 SEC. 265. CONSUMER BEHAVIOR RESEARCH. 

21 (a) IN GENERAL.—The Secretary of Energy is au22 thorized to establish a research program to identify the 

23 factors affecting consumer actions to conserve energy and 

24 make improvements in energy efficiency. Through the pro25 gram the Secretary will make grants to public and private 
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1 institutions of higher education to study the effects of con2 sumer behavior on total energy use; potential energy sav3 ings from changes in consumption habits; the ability to 

4 reduce greenhouse gas emissions through changes in en5 ergy consumption habits; increase public awareness of 

6 Federal climate adaptation and mitigation programs; and 

7 the potential for alterations in consumer behavior to fur8 ther American energy independence. Grants may also fund 

9 projects that evaluate or inform public knowledge of the 

10 effects of energy consumption habits on these topics. 

11 (b) GRANTS.—The purpose of the program is to pro12 vide grants to public and private institutions of higher 

13 education to carry out projects which will improve under14 standing of the effects of consumer behavior on energy 

15 consumption and conservation. The Secretary shall make 

16 grants on a competitive basis for— 

17 (1) studies of the effects of consumer habits on 

18 energy consumption and conservation; 

19 (2) development of strategies that communicate 

20 the importance of energy efficiency and conservation 

21 to consumers; 

22 (3) identification of best practices to improve 

23 consumer energy use habits; 
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1 (4) education programs that inform consumers 

2 about the implications of consumption habits on en3 ergy use and climate change; 

4 (5) evaluation of the effectiveness of programs 

5 designed to promote public awareness of Federal 

6 Government climate adaptation and mitigation ac7 tivities; and 

8 (6) other projects that advance the mission of 

9 the program. 

10 (c) REPORT.—The Secretary of Energy shall provide 

11 Congress with a report on progress towards establishing 

12 the program within 120 days after the date of enactment 

13 of this Act. 

14 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

15 are authorized to be appropriated such sums as may be 

16 necessary to carry out this section. 

17 Subtitle G—Miscellaneous 

18 SEC. 271. ENERGY EFFICIENT INFORMATION AND COMMU19 NICATIONS TECHNOLOGIES. 

20 Section 543 of the National Energy Conservation 

21 Policy Act (42 U.S.C. 8253) is amended to read as follows: 

22 ‘‘SEC. 543. ENERGY EFFICIENT INFORMATION AND COMMU23 NICATIONS TECHNOLOGIES. 

24 ‘‘(a) IN GENERAL.—Not later than 1 year after the 

25 date of enactment of the American Clean Energy and Se-
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1 curity Act of 2009, each Federal agency shall collaborate 

2 with the Director of the Office of Management and Budget 

3 (referred to in this section as the ‘Director’) to create an 

4 implementation strategy, including best practices and 

5 measurement and verification techniques, for the purchase 

6 and use of energy efficient information and communica7 tions technologies and practices. Wherever possible, exist8 ing standards, specifications, performance metrics, and 

9 best management practices that have been or are being 

10 developed in open collaboration and with broad stake11 holder input and review should be incorporated. In addi12 tion, agency strategies shall be flexible, cost-effective, and 

13 based on the specific operating requirements and statutory 

14 mission of each agency. 

15 ‘‘(b) ENERGY EFFICIENT INFORMATION AND COM16 MUNICATIONS TECHNOLOGIES.—In developing an imple17 mentation strategy, each agency shall— 

18 ‘‘(1) consider information and communications 

19 technologies and infrastructure, including, but not 

20 limited to, advanced metering infrastructure, infor21 mation and communications technology services and 

22 products, efficient data center strategies, applica23 tions modernization and rationalization, building 

24 systems energy efficiency, and telework; and 
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1 ‘‘(2) ensure that agencies are eligible to realize 

2 the savings and rewards brought about through in3 creased efficiencies. 

4 ‘‘(c) PERFORMANCE GOALS.—Not later than 6 

5 months after the date of enactment of the American Clean 

6 Energy and Security Act of 2009, the Director shall estab7 lish performance goals for evaluating the efforts of the 

8 agencies in improving the maintenance, purchase and use 

9 of energy efficiency of information and communications 

10 technology systems. These performance goals should 

11 measure information technology costs over a specific time 

12 horizon (3 to 5 years), providing a complete picture of all 

13 costs, including energy. 

14 ‘‘(d) REPORT.—Not later than 18 months after the 

15 date of enactment of the American Clean Energy and Se16 curity Act of 2009, and annually thereafter, the Director 

17 shall submit a report to Congress on— 

18 ‘‘(1) the progress of each agency in reducing 

19 energy use through its implementation strategy; and 

20 ‘‘(2) new and emerging technologies that would 

21 help achieve increased energy efficiency.’’. 

22 SEC. 272. NATIONAL ENERGY EFFICIENCY GOALS. 

23 (a) GOALS.—The energy efficiency goals of the 

24 United States are— 
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1 (1) to achieve an improvement in the overall en2 ergy productivity of the United States (measured in 

3 gross domestic product per unit of energy input) of 

4 at least 2.5 percent per year by the year 2012; and 

5 (2) to maintain that annual rate of improve6 ment each year through 2030. 

7 (b) STRATEGIC PLAN.— 

8 (1) IN GENERAL.—Not later than 1 year after 

9 the date of enactment of this Act, the Secretary of 

10 Energy (referred to in this section as the ‘‘Sec11 retary’’), in cooperation with the Administrator and 

12 the heads of other appropriate Federal agencies, 

13 shall develop a strategic plan to achieve the national 

14 goals for improvement in energy productivity estab15 lished under subsection (a). 

16 (2) PUBLIC INPUT AND COMMENT.—The Sec17 retary shall develop the plan in a manner that pro18 vides appropriate opportunities for public input and 

19 comment. 

20 (c) PLAN CONTENTS.—The strategic plan shall— 

21 (1) identify future regulatory, funding, and pol22 icy priorities that would assist the United States in 

23 meeting the national goals; 

24 (2) include energy savings estimates for each 

25 sector; and 
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1 (3) include data collection methodologies and 

2 compilations used to establish baseline and energy 

3 savings data. 

4 (d) PLAN UPDATES.— 

5 (1) IN GENERAL.—The Secretary shall— 

6 (A) update the strategic plan biennially; 

7 and 

8 (B) include the updated strategic plan in 

9 the national energy policy plan required by sec10 tion 801 of the Department of Energy Organi11 zation Act (42 U.S.C. 7321). 

12 (2) CONTENTS.—In updating the plan, the Sec13 retary shall— 

14 (A) report on progress made toward imple15 menting efficiency policies to achieve the na16 tional goals established under subsection (a); 

17 and 

18 (B) verify, to the maximum extent prac19 ticable, energy savings resulting from the poli20 cies. 

21 (e) REPORT TO CONGRESS AND THE PUBLIC.—The 

22 Secretary shall submit to Congress, and make available 

23 to the public, the initial strategic plan developed under 

24 subsection (b) and each updated plan. 
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1 SEC. 273. AFFILIATED ISLAND ENERGY INDEPENDENCE 

2 TEAM. 

3 (a) DEFINITIONS.—In this section: 

4 (1) AFFILIATED ISLAND.—The term ‘‘affiliated 

5 island’’ means— 

6 (A) the Commonwealth of Puerto Rico; 

7 (B) Guam; 

8 (C) American Samoa; 

9 (D) the Commonwealth of the Northern 

10 Mariana Islands; 

11 (E) the Federated States of Micronesia; 

12 (F) the Republic of the Marshall Islands; 

13 (G) the Republic of Palau; and 

14 (H) the United States Virgin Islands. 

15 (2) SECRETARY.—The term ‘‘Secretary’’ means 

16 the Secretary of Energy (acting through the Assist17 ant Secretary of Energy Efficiency and Renewable 

18 Energy), in consultation with the Secretary of the 

19 Interior and the Secretary of State. 

20 (3) TEAM.—The term ‘‘team’’ means the team 

21 established by the Secretary under subsection (b). 

22 (b) ESTABLISHMENT.—As soon as practicable after 

23 the date of enactment of this Act, the Secretary shall as24 semble a team of technical, policy, and financial experts 

25 to address the energy needs of each affiliated island— 
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1 (1) to reduce the reliance and expenditure of 

2 each affiliated island on imported fossil fuels; 

3 (2) to increase the use by each affiliated island 

4 of indigenous, nonfossil fuel energy sources; 

5 (3) to improve the performance of the energy 

6 infrastructure of the affiliated island through 

7 projects— 

8 (A) to improve the energy efficiency of 

9 power generation, transmission, and distribu10 tion; and 

11 (B) to increase consumer energy efficiency; 

12 (4) to improve the performance of the energy 

13 infrastructure of each affiliated island through en14 hanced planning, education, and training; 

15 (5) to adopt research-based and public-private 

16 partnership-based approaches as appropriate; 

17 (6) to stimulate economic development and job 

18 creation; and 

19 (7) to enhance the engagement by the Federal 

20 Government in international efforts to address island 

21 energy needs. 

22 (c) DUTIES OF TEAM.— 

23 (1) ENERGY ACTION PLANS.— 

24 (A) IN GENERAL.—In accordance with 

25 subparagraph (B), the team shall provide tech-
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1 nical, programmatic, and financial assistance to 

2 each utility of each affiliated island, and the 

3 government of each affiliated island, as appro4 priate, to develop and implement an energy Ac5 tion Plan for each affiliated island to reduce the 

6 reliance of each affiliated island on imported 

7 fossil fuels through increased efficiency and use 

8 of indigenous clean-energy resources. 

9 (B) REQUIREMENTS.—Each Action Plan 

10 described in subparagraph (A) for each affili11 ated island shall require and provide for— 

12 (i) the conduct of 1 or more studies to 

13 assess opportunities to reduce fossil fuel 

14 use through— 

15 (I) the improvement of the en16 ergy efficiency of the affiliated island; 

17 and 

18 (II) the increased use by the af19 filiated island of indigenous clean-en20 ergy resources; 

21 (ii) the identification and implementa22 tion of the most cost-effective strategies 

23 and projects to reduce the dependence of 

24 the affiliated island on fossil fuels; 
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1 (iii) the promotion of education and 

2 training activities to improve the capacity 

3 of the local utilities of the affiliated island, 

4 and the government of the affiliated island, 

5 as appropriate, to plan for, maintain, and 

6 operate the energy infrastructure of the af7 filiated island through the use of local or 

8 regional institutions, as appropriate; 

9 (iv) the coordination of the activities 

10 described in clause (iii) to leverage the ex11 pertise and resources of international enti12 ties, the Department of Energy, the De13 partment of the Interior, and the regional 

14 utilities of the affiliated island; 

15 (v) the identification, and develop16 ment, as appropriate, of research-based 

17 and private-public, partnership approaches 

18 to implement the Action Plan; and 

19 (vi) any other component that the 

20 Secretary determines to be necessary to re21 duce successfully the use by each affiliated 

22 island of fossil fuels. 

23 (2) REPORTS TO SECRETARY.—Not later than 

24 1 year after the date on which the Secretary estab25 lishes the team and biennially thereafter, the team 
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1 shall submit to the Secretary a report that contains 

2 a description of the progress of each affiliated island 

3 in— 

4 (A) implementing the Action Plan of the 

5 affiliated island developed under paragraph 

6 (1)(A); and 

7 (B) reducing the reliance of the affiliated 

8 island on fossil fuels. 

9 (d) USE OF REGIONAL UTILITY ORGANIZATIONS.— 

10 To provide expertise to affiliated islands to assist the af11 filiated islands in meeting the purposes of this section, the 

12 Secretary shall consider— 

13 (1) including regional utility organizations in 

14 the establishment of the team; and 

15 (2) providing assistance through regional utility 

16 organizations. 

17 (e) ANNUAL REPORTS TO CONGRESS.—Not later 

18 than 30 days after the date on which the Secretary re19 ceives a report submitted by the team under subsection 

20 (c)(2), the Secretary shall submit to the appropriate com21 mittees of Congress a report that contains a summary of 

22 the report of the team. 

23 (f) AUTHORIZATION OF APPROPRIATIONS.—There 

24 are authorized to be appropriated such sums as are nec25 essary to carry out this section. 
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1 SEC. 274. PRODUCT CARBON DISCLOSURE PROGRAM. 

2 (a) EPA STUDY.—The Administrator shall conduct 

3 a study to determine the feasibility of establishing a na4 tional program for measuring, reporting, publicly dis5 closing, and labeling products or materials sold in the 

6 United States for their carbon content, and shall, not later 

7 than 18 months after the date of enactment of this Act, 

8 transmit a report to Congress which shall include the fol9 lowing: 

10 (1) A determination of whether a national prod11 uct carbon disclosure program and labeling program 

12 would be effective in achieving the intended goals of 

13 achieving greenhouse gas reductions and an exam14 ination of existing programs globally and their 

15 strengths and weaknesses. 

16 (2) Criteria for identifying and prioritizing sec17 tors and products and processes that should be cov18 ered in such program or programs. 

19 (3) An identification of products, processes, or 

20 sectors whose inclusion could have a substantial car21 bon impact (prioritizing industrial products such as 

22 iron and steel, aluminum, cement, chemicals, and 

23 paper products, and also including food, beverage, 

24 hygiene, cleaning, household cleaners, construction, 

25 metals, clothing, semiconductor, and consumer elec26 tronics). 
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1 (4) Suggested methodology and protocols for 

2 measuring the carbon content of the products across 

3 the entire carbon lifecycle of such products for use 

4 in a carbon disclosure program and labeling pro5 gram. 

6 (5) A review of existing greenhouse gas product 

7 accounting standards, methodologies, and practices 

8 including the Greenhouse Gas Protocol, ISO 14040/ 

9 44, ISO 14067, and Publically Available Specifica10 tion 2050, and including a review of the strengths 

11 and weaknesses of each. 

12 (6) A survey of secondary databases including 

13 the Manufacturing Energy Consumption Survey and 

14 evaluate the quality of data for use in a product car15 bon disclosure program and product carbon labeling 

16 program and an identification of gaps in the data 

17 relative to the potential purposes of a national prod18 uct carbon disclosure program and product carbon 

19 labeling program and development of recommenda20 tions for addressing these data gaps. 

21 (7) An assessment of the utility of comparing 

22 products and the appropriateness of product carbon 

23 standards. 

24 (8) An evaluation of the information needed on 

25 a label for clear and accurate communication, in-
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1 cluding what pieces of quantitative and qualitative 

2 information needs to be disclosed. 

3 (9) An evaluation of the appropriate boundaries 

4 of the carbon lifecycle analysis for different sectors 

5 and products. 

6 (10) An analysis of whether default values 

7 should be developed for products whose producer 

8 does not participate in the program or does not have 

9 data to support a disclosure or label and determine 

10 best ways to develop such default values. 

11 (11) A recommendation of certification and 

12 verification options necessary to assure the quality 

13 of the information and avoid greenwashing or the 

14 use of insubstantial or meaningless environmental 

15 claims to promote a product. 

16 (12) An assessment of options for educating 

17 consumers about product carbon content and the 

18 product carbon disclosure program and product car19 bon labeling program. 

20 (13) An analysis of the costs and timelines as21 sociated with establishing a national product carbon 

22 disclosure program and product carbon labeling pro23 gram, including options for a phased approach. 

24 Costs should include those for businesses associated 

25 with the measurement of carbon footprints and 
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1 those associated with creating a product carbon label 

2 and managing and operating a product carbon label3 ing program, and options for minimizing these costs. 

4 (14) An evaluation of incentives (such as finan5 cial incentives, brand reputation, and brand loyalty) 

6 to determine whether reductions in emissions can be 

7 accelerated through encouraging more efficient man8 ufacturing or by encouraging preferences for lower9 emissions products to substitute for higher-emissions 

10 products whose level of performance is no better. 

11 (b) DEVELOPMENT OF NATIONAL CARBON DISCLO12 SURE PROGRAM.—Upon conclusion of the study, and not 

13 more than 36 months after the date of enactment of this 

14 Act, the Administrator shall establish a national product 

15 carbon disclosure program, participation in which shall be 

16 voluntary, and which may involve a product carbon label 

17 with broad applicability to the wholesale and consumer 

18 markets to enable and encourage knowledge about carbon 

19 content by producers and consumers and to inform efforts 

20 to reduce energy consumption (carbon dioxide equivalent 

21 emissions) nationwide. In developing such a program, the 

22 Administrator shall— 

23 (1) consider the results of the study conducted 

24 under subsection (a); 
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1 (2) consider existing and planned programs and 

2 proposals and measurement standards (including the 

3 Publicly Available Specification 2050, standards to 

4 be developed by the World Resource Institute/World 

5 Business Council for Sustainable Development, the 

6 International Standards Organization, and the bill 

7 AB19 pending in the California legislature); 

8 (3) consider the compatibility of a national 

9 product carbon disclosure program with existing pro10 grams; 

11 (4) utilize incentives and other means to spur 

12 the adoption of product carbon disclosure and prod13 uct carbon labeling; 

14 (5) develop protocols and parameters for a 

15 product carbon disclosure program, including a 

16 methodology and formula for assessing, verifying, 

17 and potentially labeling a product’s greenhouse gas 

18 content, and for data quality requirements to allow 

19 for product comparison; 

20 (6) create a means to— 

21 (A) document best practices; 

22 (B) ensure clarity and consistency; 

23 (C) work with suppliers, manufacturers, 

24 and retailers to encourage participation; 
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1 (D) ensure that protocols are consistent 

2 and comparable across like products; and 

3 (E) evaluate the effectiveness of the pro4 gram; 

5 (7) make publicly available information on 

6 product carbon content to ensure transparency; 

7 (8) provide for public outreach, including a con8 sumer education program to increase awareness; 

9 (9) develop training and education programs to 

10 help businesses learn how to measure and commu11 nicate their carbon footprint and easy tools and tem12 plates for businesses to use to reduce cost and time 

13 to measure their products’ carbon lifecycle; 

14 (10) consult with the Secretary of Energy, the 

15 Secretary of Commerce, the Federal Trade Commis16 sion, and other Federal agencies, as necessary; 

17 (11) gather input from stakeholders through 

18 consultations, public workshops or hearings with 

19 representatives of consumer product manufacturers, 

20 consumer groups, and environmental groups; 

21 (12) utilize systems for verification and product 

22 certification that will ensure that claims manufactur23 ers make about their products are valid; 

24 (13) create a process for reviewing the accuracy 

25 of product carbon label information and protecting 
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1 the product carbon label in the case of a change in 

2 the product’s energy source, supply chain, ingredi3 ents, or other factors, and specify the frequency to 

4 which data should be updated; and 

5 (14) develop a standardized, easily understand6 able carbon label, if appropriate, and create a proc7 ess for responding to inaccuracies and misuses of 

8 such a label. 

9 (c) REPORT TO CONGRESS.—Not later than 5 years 

10 after the program is established pursuant to subsection 

11 (b), the Administrator shall report to Congress on the ef12 fectiveness and impact of the program, the level of vol13 untary participation, and any recommendations for addi14 tional measures. 

15 (d) DEFINITIONS.—As used in this section— 

16 (1) the term ‘‘carbon content’’ means the 

17 amount of greenhouse gas emissions and their 

18 warming impact on the atmosphere expressed in car19 bon dioxide equivalent associated with a product’s 

20 value chain; 

21 (2) the term ‘‘carbon footprint’’ means the level 

22 of greenhouse gas emissions produced by a par23 ticular activity, service, or entity; and 

24 (3) the term ‘‘carbon lifecycle’’ means the 

25 greenhouse gas emissions that are released as part 
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1 of the processes of creating, producing, processing or 

2 manufacturing, modifying, transporting, distrib3 uting, storing, using, recycling, or disposing of goods 

4 and services. 

5 (e) AUTHORIZATION OF APPROPRIATIONS.—There is 

6 authorized to be appropriated to the Administrator 

7 $5,000,000 for the study required by subsection (a) and 

8 $25,000,000 for each of fiscal years 2010 through 2025 

9 for the program required under subsection (b). 

10 SEC. 275. INDUSTRIAL ENERGY EFFICIENCY EDUCATION 

11 AND TRAINING INITIATIVE. 

12 (a) IN GENERAL.—The Secretary of Energy shall 

13 carry out a national education and awareness program for 

14 the purpose of informing building, facility, and industrial 

15 plant owners and managers and decisionmakers, govern16 ment leaders, and industry leaders about the large energy17 saving potential of greater use of mechanical insulation, 

18 and other benefits. 

19 (b) PURPOSE AND GOALS.— 

20 (1) PURPOSE.—The purpose of the initiative 

21 shall be to increase the energy efficiency of the com22 mercial and industrial sectors through an ongoing 

23 program that will include— 

24 (A) education and training sessions; 

25 (B) Web-based information; and 
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1 (C) advertising. 

2 (2) GOALS.—The goals of the initiative shall be 

3 to— 

4 (A) educate and motivate commercial 

5 building owners and industrial facility managers 

6 to utilize mechanical insulation in new and ex7 isting facilities; 

8 (B) preserve and create jobs while reduc9 ing energy and greenhouse gas emissions; 

10 (C) create a safer working environment 

11 and make businesses more competitive in a 

12 global economy; and 

13 (D) motivate and empower the industry to 

14 make better use of mechanical insulation 

15 through awareness, education, and training. 

16 (c) REPORT.—Not later than July 1, 2013, the Sec17 retary shall submit to Congress a report describing the 

18 extent by which the initiative has been enacted and the 

19 actual and projected effectiveness of the program under 

20 this section, including the energy efficiency, greenhouse 

21 gas emissions reductions, cost savings, and safety benefits 

22 at manufacturing facilities, power plants, refineries, hos23 pitals, universities, government buildings, and other com24 mercial and industrial locations. 
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1 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated $3,500,000 for each of 

3 fiscal years 2010 through 2014 to carry out this section.

4 The Secretary may enter into a cooperative agreement, in5 cluding grant funding, with an industry association and 

6 union working collaboratively and having expertise on the 

7 installation, maintenance, measure of efficiencies and 

8 standards, and certification of mechanical insulation in 

9 buildings and facilities. 

10 (e) TERMINATION OF AUTHORITY.—The program 

11 carried out under this section shall terminate on December 

12 31, 2014. 

13 SEC. 276. SENSE OF CONGRESS. 

14 It is the sense of Congress that the United States 

15 should— 

16 (1) continue to actively promote, within the 

17 International Civil Aviation Organization, the devel18 opment of a global framework for the regulation of 

19 greenhouse gas emissions from civil aircraft that rec20 ognizes the uniquely international nature of the in21 dustry and treats commercial aviation industries in 

22 all countries fairly; and 

23 (2) work with foreign governments towards a 

24 global agreement that reconciles foreign carbon 

25 emissions reduction programs to minimize duplica-
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1 tive requirements and avoids unnecessary complica2 tion for the aviation industry, while still achieving 

3 the environmental goals. 

4 Subtitle H—Green Resources for 

5 Energy Efficient Neighborhoods 

6 SEC. 281. SHORT TITLE. 

7 This subtitle may be cited as the ‘‘Green Resources 

8 for Energy Efficient Neighborhoods Act of 2009’’ or the 

9 ‘‘GREEN Act of 2009’’. 

10 SEC. 282. DEFINITIONS. 

11 For purposes of this subtitle, the following definitions 

12 shall apply: 

13 (1) GREEN BUILDING STANDARDS.—The term 

14 ‘‘green building standards’’ means standards to re15 quire use of sustainable design principles to reduce 

16 the use of nonrenewable resources, encourage en17 ergy-efficient construction and rehabilitation and the 

18 use of renewable energy resources, minimize the im19 pact of development on the environment, and im20 prove indoor air quality. 

21 (2) HUD.—The term ‘‘HUD’’ means the De22 partment of Housing and Urban Development. 

23 (3) HUD ASSISTANCE.—The term ‘‘HUD as24 sistance’’ means financial assistance that is awarded, 

25 competitively or noncompetitively, allocated by for-
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1 mula, or provided by HUD through loan insurance 

2 or guarantee. 

3 (4) NONRESIDENTIAL STRUCTURE.—The term 

4 ‘‘nonresidential structures’’ means only nonresiden5 tial structures that are appurtenant to single-family 

6 or multifamily housing residential structures, or 

7 those that are funded by the Secretary of Housing 

8 and Urban Development through the HUD Commu9 nity Development Block Grant program. 

10 (5) SECRETARY.—The term ‘‘Secretary’’, unless 

11 otherwise specified, means the Secretary of Housing 

12 and Urban Development. 

13 SEC. 283. IMPLEMENTATION OF ENERGY EFFICIENCY PAR14 TICIPATION INCENTIVES FOR HUD PRO15 GRAMS. 

16 (a) IN GENERAL.—Not later than 180 days after the 

17 date of the enactment of this Act, the Secretary shall issue 

18 such regulations as may be necessary to establish annual 

19 energy efficiency participation incentives to encourage par20 ticipants in programs administered by the Secretary, in21 cluding recipients under programs for which HUD assist22 ance is provided, to achieve substantial improvements in 

23 energy efficiency. 

24 (b) REQUIREMENT FOR APPROPRIATION OF

25 FUNDS.—The requirement under subsection (a) for the 
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1 Secretary to provide annual energy efficiency participation 

2 incentives pursuant to the provisions of this subtitle shall 

3 be subject to the annual appropriation of necessary funds. 

4 SEC. 284. BASIC HUD ENERGY EFFICIENCY STANDARDS 

5 AND STANDARDS FOR ADDITIONAL CREDIT. 

6 (a) BASIC HUD STANDARD.— 

7 (1) RESIDENTIAL STRUCTURES.—A residential 

8 single-family or multifamily structure shall be con9 sidered to comply with the energy efficiency stand10 ards under this subsection if— 

11 (A) the structure complies with an energy 

12 efficiency building code that has been certified 

13 as in compliance with section 304 of the Energy 

14 Conservation and Production Act (42 U.S.C. 

15 6833) as amended by section 201 of this Act, 

16 or a national energy efficiency building code 

17 adopted pursuant to that section; 

18 (B) the structure complies with the appli19 cable provisions of the American Society of 

20 Heating, Refrigerating, and Air-Conditioning 

21 Engineers Standard 90.1–2007, as such stand22 ard or successor standard is in effect for pur23 poses of this section pursuant subsection (c); 

24 (C) the structure complies with the appli25 cable provisions of the 2009 International En-
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1 ergy Conservation Code, as such standard or 

2 successor standard is in effect for purposes of 

3 this section pursuant subsection (c); 

4 (D) in the case only of an existing struc5 ture, where determined cost effective, the struc6 ture has undergone rehabilitation or improve7 ments, completed after the date of the enact8 ment of this Act, and the energy consumption 

9 for the structure has been reduced by at least 

10 20 percent from the previous level of consump11 tion, as determined in accordance with energy 

12 audits performed both before and after any re13 habilitation or improvements undertaken to re14 duce such consumption; or 

15 (E) the structure complies with the appli16 cable provisions of such other energy efficiency 

17 requirements, standards, checklists, or ratings 

18 systems as the Secretary may adopt and apply 

19 by regulation, as may be necessary, for pur20 poses of this section for specific types of resi21 dential single-family or multifamily structures 

22 or otherwise, except that the Secretary shall 

23 make a determination regarding whether to 

24 adopt and apply any such requirements, stand25 ards, checklists, or rating system for purposes 
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1 of this section not later than the expiration of 

2 the 180-day period beginning upon the date of 

3 receipt of any written request, made in such 

4 form as the Secretary shall provide, for such 

5 adoption and application. 

6 In addition to compliance with any of subparagraphs 

7 (A) through (E), the Secretary shall by regulation 

8 require, for any newly constructed residential single9 family or multifamily structure to be considered to 

10 comply with the energy efficiency standards under 

11 this subsection, that the structure have appropriate 

12 electrical outlets with the facility and capacity to re13 charge a standard electric passenger vehicle, includ14 ing an electric hybrid vehicle, where such vehicle 

15 would normally be parked. 

16 (2) NONRESIDENTIAL STRUCTURES.—For pur17 poses of this section, the Secretary shall identify and 

18 adopt by regulation, as may be necessary, energy ef19 ficiency requirements, standards, checklists, or rat20 ing systems applicable to nonresidential structures 

21 that are constructed or rehabilitated with HUD as22 sistance. A nonresidential structure shall be consid23 ered to comply with the energy efficiency standards 

24 under this subsection if the structure complies with 

25 the applicable provisions of any such energy effi-
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1 ciency requirements, standards, checklist, or rating 

2 systems identified and adopted by the Secretary pur3 suant to this paragraph, as such standards are in ef4 fect for purposes of this section pursuant to sub5 section (c). 

6 (3) EFFECT.—Nothing in this subsection may 

7 be construed to require any structure to comply with 

8 any standard established or adopted pursuant to this 

9 subsection, or identified in this subsection, or to pro10 vide any benefit or credit under any Federal pro11 gram for any structure that complies with any such 

12 standard, except to the extent that— 

13 (A) any provision of law other than this 

14 subsection provides a benefit or credit under a 

15 Federal program for compliance with a stand16 ard established or adopted pursuant to this sub17 section, or identified in this subsection; or 

18 (B) the Secretary specifically provides pur19 suant to subsection (c) for the applicability of 

20 such standard. 

21 (b) ENHANCED ENERGY EFFICIENCY STANDARDS

22 FOR PURPOSES OF PROVIDING ADDITIONAL CREDIT

23 UNDER CERTAIN FEDERALLY ASSISTED HOUSING PRO24 GRAMS.— 

25 (1) PURPOSE AND EFFECT.— 
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1 (A) PURPOSE.—The purpose of this sub2 section is to establish energy efficiency and con3 servation standards and green building stand4 ards that— 

5 (i) provide for greater energy effi6 ciency and conservation in structures than 

7 is required for compliance with the energy 

8 efficiency standards under subsection (a) 

9 and then in effect; 

10 (ii) provide for green and sustainable 

11 building standards not required by such 

12 standards; and 

13 (iii) can be used in connection with 

14 Federal housing, housing finance, and de15 velopment programs to provide incentives 

16 for greater energy efficiency and conserva17 tion and for green and sustainable building 

18 methods, elements, practices, and mate19 rials. 

20 (B) EFFECT.—Nothing in this subsection 

21 may be construed to require any structure to 

22 comply with any standard established pursuant 

23 to this subsection or to provide any benefit or 

24 credit under any Federal program for any 

25 structure, except to the extent that any provi-
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1 sion of law other than this subsection provides 

2 a benefit or credit under a Federal program for 

3 compliance with a standard established pursu4 ant to this subsection. 

5 (2) COMPLIANCE.—A residential or nonresiden6 tial structure shall be considered to comply with the 

7 enhanced energy efficiency and conservation stand8 ards or the green building standards under this sub9 section, to the extent that such structure complies 

10 with the applicable provisions of the standards under 

11 paragraph (3) or (4), respectively (as such standards 

12 are in effect for purposes of this section, pursuant 

13 to paragraph (7)), in a manner that is not required 

14 for compliance with the energy efficiency standards 

15 under subsection (a) then in effect and subject to 

16 the Secretary’s determination of which standards are 

17 applicable to which structures. 

18 (3) ENERGY EFFICIENCY AND CONSERVATION

19 STANDARDS.—The energy efficiency and conserva20 tion standards under this paragraph are as follows: 

21 (A) RESIDENTIAL STRUCTURES.—With re22 spect to residential structures: 

23 (i) NEW CONSTRUCTION.—For new 

24 construction, the Energy Star standards 

25 established by the Environmental Protec-
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1 tion Agency, as such standards are in ef2 fect for purposes of this subsection pursu3 ant to paragraph (7); 

4 (ii) EXISTING STRUCTURES.—For ex5 isting structures, a reduction in energy 

6 consumption from the previous level of 

7 consumption for the structure, as deter8 mined in accordance with energy audits 

9 performed both before and after any reha10 bilitation or improvements undertaken to 

11 reduce such consumption, that exceeds the 

12 reduction necessary for compliance with 

13 the energy efficiency standards under sub14 section (a) then in effect and applicable to 

15 existing structures. 

16 (B) NONRESIDENTIAL STRUCTURES.— 

17 With respect to nonresidential structures, such 

18 energy efficiency and conservation require19 ments, standards, checklists, or rating systems 

20 for nonresidential structures as the Secretary 

21 shall identify and adopt by regulation, as may 

22 be necessary, for purposes of this paragraph. 

23 (4) GREEN BUILDING STANDARDS.—The green 

24 building standards under this paragraph are as fol25 lows: 
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1 (A) The national Green Communities cri2 teria checklist for residential construction that 

3 provides criteria for the design, development, 

4 and operation of affordable housing, as such 

5 checklist or successor checklist is in effect for 

6 purposes of this section pursuant to paragraph 

7 (7). 

8 (B) The gold certification level for the 

9 LEED for New Construction rating system, the 

10 LEED for Homes rating system, the LEED for 

11 Core and Shell rating system, as applicable, as 

12 such systems or successor systems are in effect 

13 for purposes of this section pursuant to para14 graph (7). 

15 (C) The Green Globes assessment and rat16 ing system of the Green Buildings Initiative. 

17 (D) For manufactured housing, energy 

18 star rating with respect to fixtures, appliances, 

19 and equipment in such housing, as such stand20 ard or successor standard is in effect for pur21 poses of this section pursuant to paragraph (7). 

22 (E) The National Green Building Stand23 ard. 

24 (F) Any other requirements, standards, 

25 checklists, or rating systems for green building 
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1 or sustainability as the Secretary may identify 

2 and adopt by regulation, as may be necessary 

3 for purposes of this paragraph, except that the 

4 Secretary shall make a determination regarding 

5 whether to adopt and apply any such require6 ments, standards, checklist, or rating system 

7 for purposes of this section not later than the 

8 expiration of the 180-day period beginning upon 

9 date of receipt of any written request, made in 

10 such form as the Secretary shall provide, for 

11 such adoption and application. 

12 (5) GREEN BUILDING.—For purposes of this 

13 subsection, the term ‘‘green building’’ means, with 

14 respect to standards for structures, standards to re15 quire use of sustainable design principles to reduce 

16 the use of nonrenewable resources, minimize the im17 pact of development on the environment, and to im18 prove indoor air quality. 

19 (6) ENERGY AUDITS.—The Secretary shall es20 tablish standards and requirements for energy au21 dits for purposes of paragraph (3)(A)(ii) and, in es22 tablishing such standards, may consult with any ad23 visory committees established pursuant to section 

24 285(c)(2) of this subtitle. 
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1 (7) APPLICABILITY AND UPDATING OF STAND2 ARDS.— 

3 (A) APPLICABILITY.—Except as provided 

4 in subparagraph (B), the requirements, stand5 ards, checklists, and rating systems referred to 

6 in this subsection that are in effect for purposes 

7 of this subsection are such requirements, stand8 ards, checklists, and systems are as in existence 

9 upon the date of the enactment of this Act. 

10 (B) UPDATING.—For purposes of this sec11 tion, the Secretary may adopt and apply by reg12 ulation, as may be necessary, future amend13 ments and supplements to, and editions of, the 

14 requirements, standards, checklists, and rating 

15 systems referred to in this subsection, including 

16 applicable energy efficiency building codes that 

17 are certified as in compliance with section 304 

18 of the Energy Conservation and Production Act 

19 (42 U.S.C. 6833) as amended by section 201 of 

20 this Act, or national energy efficiency building 

21 codes adopted pursuant to that section. 

22 (c) AUTHORITY OF SECRETARY TO APPLY STAND23 ARDS TO FEDERALLY ASSISTED HOUSING AND PRO24 GRAMS.— 
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1 (1) HUD HOUSING AND PROGRAMS.—The Sec2 retary of Housing and Urban Development may, by 

3 regulation, provide for the applicability of the energy 

4 efficiency standards under subsection (a) or the en5 hanced energy efficiency and conservation standards 

6 and green building standards under subsection (b), 

7 or both, with respect to any covered federally as8 sisted housing described in paragraph (3)(A) or any 

9 HUD assistance, subject to minimum Federal codes 

10 or standards then in effect. 

11 (2) RURAL HOUSING.—The Secretary of Agri12 culture may, by regulation, provide for the applica13 bility of the energy efficiency standards under sub14 section (a) or the enhanced energy efficiency and 

15 conservation standards and green building standards 

16 under subsection (b), or both, with respect to any 

17 covered federally assisted housing described in para18 graph (3)(B) or any assistance provided with respect 

19 to rural housing by the Rural Housing Service of the 

20 Department of Agriculture, subject to minimum 

21 Federal codes or standards then in effect. 

22 (3) COVERED FEDERALLY ASSISTED HOUS23 ING.—For purposes of this subsection, the term 

24 ‘‘covered federally assisted housing’’ means— 
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1 (A) any residential or nonresidential struc2 ture for which any HUD assistance is provided; 

3 and 

4 (B) any new construction of single-family 

5 housing (other than manufactured homes) sub6 ject to mortgages insured, guaranteed, or made 

7 by the Secretary of Agriculture under title V of 

8 the Housing Act of 1949 (42 U.S.C. 1471 et 

9 seq.). 

10 SEC. 285. ENERGY EFFICIENCY AND CONSERVATION DEM11 ONSTRATION PROGRAM FOR MULTIFAMILY 

12 HOUSING PROJECTS ASSISTED WITH 

13 PROJECT-BASED RENTAL ASSISTANCE. 

14 (a) AUTHORITY.—For multifamily housing projects 

15 for which project-based rental assistance is provided under 

16 a covered multifamily assistance program, the Secretary 

17 shall, subject to the availability of amounts provided in 

18 advance in appropriation Acts, carry out a program to 

19 demonstrate the effectiveness of funding a portion of the 

20 costs of meeting the enhanced energy efficiency standards 

21 under section 284(b). At the discretion of the Secretary, 

22 the demonstration program may include incentives for 

23 housing that is assisted with Indian housing block grants 

24 provided pursuant to the Native American Housing Assist25 ance and Self-Determination Act of 1996, but only to the 
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1 extent that such inclusion does not violate such Act, its 

2 regulations, and the goal of such Act of tribal self-deter3 mination. 

4 (b) GOALS.—The demonstration program under this 

5 section shall be carried out in a manner that— 

6 (1) protects the financial interests of the Fed7 eral Government; 

8 (2) reduces the proportion of funds provided by 

9 the Federal Government and by owners and resi10 dents of multifamily housing projects that are used 

11 for costs of utilities for the projects; 

12 (3) encourages energy efficiency and conserva13 tion by owners and residents of multifamily housing 

14 projects and installation of renewable energy im15 provements, such as improvements providing for use 

16 of solar, wind, geothermal, or biomass energy 

17 sources; 

18 (4) creates incentives for project owners to 

19 carry out such energy efficiency renovations and im20 provements by allowing a portion of the savings in 

21 operating costs resulting from such renovations and 

22 improvements to be retained by the project owner, 

23 notwithstanding otherwise applicable limitations on 

24 dividends; 
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1 (5) promotes the installation, in existing resi2 dential buildings, of energy-efficient and cost-effec3 tive improvements and renewable energy improve4 ments, such as improvements providing for use of 

5 solar, wind, geothermal, or biomass energy sources; 

6 (6) tests the efficacy of a variety of energy effi7 ciency measures for multifamily housing projects of 

8 various sizes and in various geographic locations; 

9 (7) tests methods for addressing the various, 

10 and often competing, incentives that impede owners 

11 and residents of multifamily housing projects from 

12 working together to achieve energy efficiency or con13 servation; and 

14 (8) creates a database of energy efficiency and 

15 conservation, and renewable energy, techniques, en16 ergy-savings management practices, and energy effi17 ciency and conservation financing vehicles. 

18 (c) APPROACHES.—In carrying out the demonstra19 tion program under this section, the Secretary may— 

20 (1) enter into agreements with the Building 

21 America Program of the Department of Energy and 

22 other consensus committees under which such pro23 grams, partnerships, or committees assume some or 

24 all of the functions, obligations, and benefits of the 

25 Secretary with respect to energy savings; 
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1 (2) establish advisory committees to advise the 

2 Secretary and any such third-party partners on tech3 nological and other developments in the area of en4 ergy efficiency and the creation of an energy effi5 ciency and conservation credit facility and other fi6 nancing opportunities, which committees shall in7 clude representatives of homebuilders, realtors, ar8 chitects, nonprofit housing organizations, environ9 mental protection organizations, renewable energy 

10 organizations, and advocacy organizations for the el11 derly and persons with disabilities; any advisory 

12 committees established pursuant to this paragraph 

13 shall not be subject to the Federal Advisory Com14 mittee Act (5 U.S.C. App.); 

15 (3) approve, for a period not to exceed 10 

16 years, additional adjustments in the maximum 

17 monthly rents or additional project rental assistance, 

18 or additional Indian housing block grant funds 

19 under the Native American Housing Assistance and 

20 Self-Determination Act of 1996, as applicable, for 

21 dwelling units in multifamily housing projects that 

22 are provided project-based rental assistance under a 

23 covered multifamily assistance program, in such 

24 amounts as may be necessary to amortize a portion 
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1 of the cost of energy efficiency and conservation 

2 measures for such projects; 

3 (4) develop a competitive process for the award 

4 of such additional assistance for multifamily housing 

5 projects seeking to implement energy efficiency, re6 newable energy sources, or conservation measures; 

7 and 

8 (5) waive or modify any existing statutory or 

9 regulatory provision that would otherwise impair the 

10 implementation or effectiveness of the demonstration 

11 program under this section, including provisions re12 lating to methods for rent adjustments, com13 parability standards, maximum rent schedules, and 

14 utility allowances; notwithstanding the preceding 

15 provisions of this paragraph, the Secretary may not 

16 waive any statutory requirement relating to fair 

17 housing, nondiscrimination, labor standards, or the 

18 environment, except pursuant to existing authority 

19 to waive nonstatutory environmental and other ap20 plicable requirements. 

21 (d) REQUIREMENT.—During the 4-year period begin22 ning 12 months after the date of the enactment of this 

23 Act, the Secretary shall carry out demonstration programs 

24 under this section with respect to not fewer than 50,000 

25 dwelling units. 
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1 (e) SELECTION.— 

2 (1) SCOPE.—In order to provide a broad and 

3 representative profile for use in designing a program 

4 which can become operational and effective nation5 wide, the Secretary shall carry out the demonstra6 tion program under this section with respect to 

7 dwelling units located in a wide variety of geographic 

8 areas and project types assisted by the various cov9 ered multifamily assistance programs and using a 

10 variety of energy efficiency and conservation and 

11 funding techniques to reflect differences in climate, 

12 types of dwelling units and technical and scientific 

13 methodologies, and financing options. The Secretary 

14 shall ensure that the geographic areas included in 

15 the demonstration program include dwelling units on 

16 Indian lands (as such term is defined in section 

17 2601 of the Energy Policy Act of 1992 (25 U.S.C. 

18 3501), to the extent that dwelling units on Indian 

19 land have the type of residential structures that are 

20 the focus of the demonstration program. 

21 (2) PRIORITY.—The Secretary shall provide pri22 ority for selection for participation in the program 

23 under this section based on the extent to which, as 

24 a result of assistance provided, the project will com-
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1 ply with the energy efficiency standards under sub2 section (a), (b), or (c) of section 284 of this subtitle. 

3 (f) USE OF EXISTING PARTNERSHIPS.—To the ex4 tent feasible, the Secretary shall— 

5 (1) utilize the Partnership for Advancing Tech6 nology in Housing of the Department of Housing 

7 and Urban Development to assist in carrying out the 

8 requirements of this section and to provide education 

9 and outreach regarding the demonstration program 

10 authorized under this section; and 

11 (2) consult with the Secretary of Energy, the 

12 Administrator of the Environmental Protection 

13 Agency, and the Secretary of the Army regarding 

14 utilizing the Building America Program of the De15 partment of Energy, the Energy Star Program, and 

16 the Army Corps of Engineers, respectively, to deter17 mine the manner in which they might assist in car18 rying out the goals of this section and providing edu19 cation and outreach regarding the demonstration 

20 program authorized under this section. 

21 (g) LIMITATION.—No amounts made available under 

22 the American Recovery and Reinvestment Act of 2009 

23 (Public Law 111–5) may be used to carry out the dem24 onstration program under this section. 

25 (h) REPORTS.— 
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1 (1) ANNUAL.—Not later than the expiration of 

2 the 2-year beginning upon the date of the enactment 

3 of this Act, and for each year thereafter during the 

4 term of the demonstration program, the Secretary 

5 shall submit a report to the Congress annually that 

6 describes and assesses the demonstration program 

7 under this section. 

8 (2) FINAL.—Not later than 6 months after the 

9 expiration of the 4-year period described in sub10 section (d), the Secretary shall submit a final report 

11 to the Congress assessing the demonstration pro12 gram, which— 

13 (A) shall assess the potential for expanding 

14 the demonstration program on a nationwide 

15 basis; and 

16 (B) shall include descriptions of— 

17 (i) the size of each multifamily hous18 ing project for which assistance was pro19 vided under the program; 

20 (ii) the geographic location of each 

21 project assisted, by State and region; 

22 (iii) the criteria used to select the 

23 projects for which assistance is provided 

24 under the program; 
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1 (iv) the energy efficiency and con2 servation measures and financing sources 

3 used for each project that is assisted under 

4 the program; 

5 (v) the difference, before and during 

6 participation in the demonstration pro7 gram, in the amount of the monthly assist8 ance payments under the covered multi9 family assistance program for each project 

10 assisted under the program; 

11 (vi) the average length of the term of 

12 the such assistance provided under the 

13 program for a project; 

14 (vii) the aggregate amount of savings 

15 generated by the demonstration program 

16 and the amount of savings expected to be 

17 generated by the program over time on a 

18 per-unit and aggregate program basis; 

19 (viii) the functions performed in con20 nection with the implementation of the 

21 demonstration program that were trans22 ferred or contracted out to any third par23 ties; 
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1 (ix) an evaluation of the overall suc2 cesses and failures of the demonstration 

3 program; and 

4 (x) recommendations for any actions 

5 to be taken as a result of the such suc6 cesses and failures. 

7 (3) CONTENTS.—Each annual report pursuant 

8 to paragraph (1) and the final report pursuant to 

9 paragraph (2) shall include— 

10 (A) a description of the status of each mul11 tifamily housing project selected for participa12 tion in the demonstration program under this 

13 section; and 

14 (B) findings from the program and rec15 ommendations for any legislative actions. 

16 (i) COVERED MULTIFAMILY ASSISTANCE PRO17 GRAM.—For purposes of this section, the term ‘‘covered 

18 multifamily assistance program’’ means— 

19 (1) the program under section 8 of the United 

20 States Housing Act of 1937 (42 U.S.C. 1437f) for 

21 project-based rental assistance; 

22 (2) the program under section 202 of the Hous23 ing Act of 1959 (12 U.S.C. 1701q) for assistance 

24 for supportive housing for the elderly; 
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1 (3) the program under section 811 of the Cran2 ston-Gonzalez National Affordable Housing Act (42 

3 U.S.C. 8013) for supportive housing for persons 

4 with disabilities; 

5 (4) the program under section 236 of the Na6 tional Housing Act (12 U.S.C. 1715z–1 for assist7 ance for rental housing projects; 

8 (5) the program under section 515 of the Hous9 ing Act of 1949 (42 U.S.C. 1485) for rural rental 

10 housing; and 

11 (6) the program for assistance under the Native 

12 American Housing Assistance and Self-Determina13 tion Act of 1996 (25 U.S.C. 4111). 

14 (j) AUTHORIZATION OF APPROPRIATIONS.—There is 

15 authorized to be appropriated to carry out this section, 

16 including providing rent adjustments, additional project 

17 rental assistance, and incentives, $50,000,000 for each fis18 cal year in which the demonstration program under this 

19 section is carried out. 

20 (k) REGULATIONS.—Not later than the expiration of 

21 the 180-day period beginning on the date of the enactment 

22 of this Act, the Secretary shall issue any regulations nec23 essary to carry out this section. 
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1 SEC. 286. ADDITIONAL CREDIT FOR FANNIE MAE AND 

2 FREDDIE MAC HOUSING GOALS FOR ENERGY3 EFFICIENT AND LOCATION-EFFICIENT MORT4 GAGES. 

5 Section 1336(a) of the Housing and Community De6 velopment Act of 1992 (12 U.S.C. 4566(a)), as amended 

7 by the Federal Housing Finance Regulatory Reform Act 

8 of 2008 (Public Law 110–289; 122 Stat. 2654), is amend9 ed— 

10 (1) in paragraph (2), by striking ‘‘paragraph 

11 (5)’’ and inserting ‘‘paragraphs (5) and (6)’’; and 

12 (2) by adding at the end the following new 

13 paragraph: 

14 ‘‘(6) ADDITIONAL CREDIT.— 

15 ‘‘(A) IN GENERAL.—In assigning credit to16 ward achievement under this section of the 

17 housing goals for mortgage purchase activities 

18 of the enterprises, the Director shall assign— 

19 ‘‘(i) more than 125 percent credit, for 

20 any such purchase that both— 

21 ‘‘(I) complies with the require22 ments of such goals; and 

23 ‘‘(II)(aa) supports housing that 

24 meets the energy efficiency standards 

25 under section 284(a) of the Green Re-
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1 sources for Energy Efficient Neigh2 borhoods Act of 2009; or 

3 ‘‘(bb) is a location-efficient mort4 gage, as such term is defined in sec5 tion 1335(e); and 

6 ‘‘(ii) credit in addition to credit under 

7 clause (i), for any such purchase that 

8 both— 

9 ‘‘(I) complies with the require10 ments of such goals, and 

11 ‘‘(II) supports housing that com12 plies with the enhanced energy effi13 ciency and conservation standards, or 

14 the green building standards, under 

15 section 284(b) of such Act, or both, 

16 and such additional credit shall be given 

17 based on the extent to which the housing 

18 supported with such purchases complies 

19 with such standards. 

20 ‘‘(B) TREATMENT OF ADDITIONAL CRED21 IT.—The availability of additional credit under 

22 this paragraph shall not be used to increase any 

23 housing goal, subgoal, or target established 

24 under this subpart.’’. 
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1 SEC. 287. DUTY TO SERVE UNDERSERVED MARKETS FOR 

2 ENERGY-EFFICIENT AND LOCATION-EFFI3 CIENT MORTGAGES. 

4 Section 1335 of Federal Housing Enterprises Finan5 cial Safety and Soundness Act of 1992 (12 U.S.C. 4565), 

6 as amended by the Federal Housing Finance Regulatory 

7 Reform Act of 2008 (Public Law 110–289; 122 Stat. 

8 2654), is amended— 

9 (1) in subsection (a)(1), by adding at the end 

10 the following new subparagraph: 

11 ‘‘(D) MARKETS FOR ENERGY-EFFICIENT

12 AND LOCATION-EFFICIENT MORTGAGES.— 

13 ‘‘(i) DUTY.—Subject to clause (ii), the 

14 enterprise shall develop loan products and 

15 flexible underwriting guidelines to facilitate 

16 a secondary market for energy-efficient 

17 and location-efficient mortgages on hous18 ing for very low-, low-, and moderate-in19 come families, and for second and junior 

20 mortgages made for purposes of energy ef21 ficiency or renewable energy improvements, 

22 or both. 

23 ‘‘(ii) AUTHORITY TO SUSPEND.—Not24 withstanding any other provision of this 

25 section, the Director may suspend the ap26 plicability of the requirement under clause 
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1 (i) with respect to an enterprise, for such 

2 period as is necessary, if the Director de3 termines that exigent circumstances exist 

4 and such suspension is appropriate to en5 sure the safety and soundness of the port6 folio holdings of the enterprise.’’; 

7 (2) by adding at the end the following new sub8 section: 

9 ‘‘(e) DEFINITIONS.—For purposes of this section, the 

10 following definitions shall apply: 

11 ‘‘(1) ENERGY-EFFICIENT MORTGAGE.—The 

12 term ‘energy-efficient mortgage’ means a mortgage 

13 loan under which the income of the borrower, for 

14 purposes of qualification for such loan, is considered 

15 to be increased by not less than $1 for each $1 of 

16 savings projected to be realized by the borrower as 

17 a result of cost-effective energy-saving design, con18 struction or improvements (including use of renew19 able energy sources, such as solar, geothermal, bio20 mass, and wind, super-insulation, energy-saving win21 dows, insulating glass and film, and radiant barrier) 

22 for the home for which the loan is made. 

23 ‘‘(2) LOCATION-EFFICIENT MORTGAGE.—The 

24 term ‘location-efficient mortgage’ means a mortgage 

25 loan under which— 
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1 ‘‘(A) the income of the borrower, for pur2 poses of qualification for such loan, is consid3 ered to be increased by not less than $1 for 

4 each $1 of savings projected to be realized by 

5 the borrower because the location of the home 

6 for which loan is made will result in decreased 

7 transportation costs for the household of the 

8 borrower; or 

9 ‘‘(B) the sum of the principal, interest, 

10 taxes, and insurance due under the mortgage 

11 loan is decreased by not less than $1 for each 

12 $1 of savings projected to be realized by the 

13 borrower because the location of the home for 

14 which loan is made will result in decreased 

15 transportation costs for the household of the 

16 borrower.’’. 

17 SEC. 288. CONSIDERATION OF ENERGY EFFICIENCY UNDER 

18 FHA MORTGAGE INSURANCE PROGRAMS AND 

19 NATIVE AMERICAN AND NATIVE HAWAIIAN 

20 LOAN GUARANTEE PROGRAMS. 

21 (a) FHA MORTGAGE INSURANCE.— 

22 (1) REQUIREMENT.—Title V of the National 

23 Housing Act is amended by adding after section 542 

24 (12 U.S.C. 1735f–20) the following new section: 
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1 ‘‘SEC. 543. CONSIDERATION OF ENERGY EFFICIENCY. 

2 ‘‘(a) UNDERWRITING STANDARDS.—The Secretary 

3 shall establish a method to consider, in its underwriting 

4 standards for mortgages on single-family housing meeting 

5 the energy efficiency standards under section 284(a) of 

6 the Green Resources for Energy Efficient Neighborhoods 

7 Act of 2009 that are insured under this Act, the impact 

8 that savings on utility costs has on the income of the mort9 gagor. 

10 ‘‘(b) GOAL.—It is the sense of the Congress that, in 

11 carrying out this Act, the Secretary should endeavor to 

12 insure mortgages on single-family housing meeting the en13 ergy efficiency standards under section 284(a) of the 

14 Green Resources for Energy Efficient Neighborhoods Act 

15 of 2009 such that at least 50,000 such mortgages are in16 sured during the period beginning upon the date of the 

17 enactment of such Act and ending on December 31, 

18 2012.’’. 

19 (2) REPORTING ON DEFAULTS.—Section 540(b) 

20 of the National Housing Act (12 U.S.C. 1735f– 

21 18(b)) is amended by adding at the end the fol22 lowing new paragraph: 

23 ‘‘(3) With respect to each collection period that 

24 commences after December 31, 2011, the total num25 ber of mortgages on single-family housing meeting 

26 the energy efficiency standards under section 284(a) 
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1 of the Green Resources for Energy Efficient Neigh2 borhoods Act of 2009 that are insured by the Sec3 retary during the applicable collection period, the 

4 number of defaults and foreclosures occurring on 

5 such mortgages during such period, the percentage 

6 of the total of such mortgages insured during such 

7 period on which defaults and foreclosure occurred, 

8 and the rate for such period of defaults and fore9 closures on such mortgages compared to the overall 

10 rate for such period of defaults and foreclosures on 

11 mortgages for single-family housing insured under 

12 this Act by the Secretary.’’. 

13 (b) INDIAN HOUSING LOAN GUARANTEES.— 

14 (1) REQUIREMENT.—Section 184 of the Hous15 ing and Community Development Act of 1992 (12 

16 U.S.C. 1715z–13a) is amended— 

17 (A) by redesignating subsection (l) as sub18 section (m); and 

19 (B) by inserting after subsection (k) the 

20 following new subsection: 

21 ‘‘(l) CONSIDERATION OF ENERGY EFFICIENCY.—The 

22 Secretary shall establish a method to consider, in its un23 derwriting standards for loans for single-family housing 

24 meeting the energy efficiency standards under section 

25 284(a) of the Green Resources for Energy Efficient 
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1 Neighborhoods Act of 2009 that are guaranteed under 

2 this section, the impact that savings on utility costs has 

3 on the income of the borrower.’’. 

4 (2) REPORTING ON DEFAULTS.—Section 540(b) 

5 of the National Housing Act (12 U.S.C. 1735f– 

6 18(b)), as amended by subsection (a)(2) of this sec7 tion, is further amended by adding at the end the 

8 following new paragraph: 

9 ‘‘(4) With respect to each collection period that 

10 commences after December 31, 2011, the total num11 ber of loans guaranteed under section 184 of the 

12 Housing and Community Development Act of 1992 

13 (12 U.S.C. 1715z–13a) on single-family housing 

14 meeting the energy efficiency standards under sec15 tion 284(a) of the Green Resources for Energy Effi16 cient Neighborhoods Act of 2009 that are guaran17 teed by the Secretary during the applicable collection 

18 period, the number of defaults and foreclosures oc19 curring on such loans during such period, the per20 centage of the total of such loans guaranteed during 

21 such period on which defaults and foreclosure oc22 curred, and the rate for such period of defaults and 

23 foreclosures on such loans compared to the overall 

24 rate for such period of defaults and foreclosures on 
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1 loans for single-family housing guaranteed under 

2 such section 184 by the Secretary.’’. 

3 (c) NATIVE HAWAIIAN HOUSING LOAN GUARAN4 TEES.— 

5 (1) REQUIREMENT.—Section 184A of the 

6 Housing and Community Development Act of 1992 

7 (12 U.S.C. 1715z–13b) is amended by inserting 

8 after subsection (l) the following new subsection: 

9 ‘‘(m) ENERGY-EFFICIENT HOUSING REQUIRE10 MENT.—The Secretary shall establish a method to con11 sider, in its underwriting standards for loans for single12 family housing meeting the energy efficiency standards 

13 under section 284(a) of the Green Resources for Energy 

14 Efficient Neighborhoods Act of 2009 that are guaranteed 

15 under this section, the impact that savings on utility costs 

16 has on the income of the borrower.’’. 

17 (2) REPORTING ON DEFAULTS.—Section 540(b) 

18 of the National Housing Act (12 U.S.C. 1735f– 

19 18(b)), as amended by the preceding provisions of 

20 this section, is further amended by adding at the 

21 end the following new paragraph: 

22 ‘‘(5) With respect to each collection period that 

23 commences after December 31, 2011, the total num24 ber of loans guaranteed under section 184A of the 

25 Housing and Community Development Act of 1992 
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1 (12 U.S.C. 1715z–13b) on single-family housing 

2 meeting the energy efficiency standards under sec3 tion 284(a) of the Green Resources for Energy Effi4 cient Neighborhoods Act of 2009 that are guaran5 teed by the Secretary during the applicable collection 

6 period, the number of defaults and foreclosures oc7 curring on such loans during such period, the per8 centage of the total of such loans guaranteed during 

9 such period on which defaults and foreclosure oc10 curred, and the rate for such period of defaults and 

11 foreclosures on such loans compared to the overall 

12 rate for such period of defaults and foreclosures on 

13 loans for single-family housing guaranteed under 

14 such section 184A by the Secretary.’’. 

15 SEC. 289. ENERGY-EFFICIENT MORTGAGES AND LOCATION16 EFFICIENT MORTGAGES EDUCATION AND 

17 OUTREACH CAMPAIGN. 

18 Section 106 of the Energy Policy Act of 1992 (12 

19 U.S.C. 1701z–16) is amended by adding at the end the 

20 following new subsection: 

21 ‘‘(g) EDUCATION AND OUTREACH CAMPAIGN.— 

22 ‘‘(1) DEVELOPMENT OF ENERGY- AND LOCA23 TION-EFFICIENT MORTGAGES OUTREACH PRO24 GRAM.— 
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1 ‘‘(A) COMMISSION.—The Secretary, in con2 sultation and coordination with the Secretary of 

3 Energy, the Secretary of Education, the Sec4 retary of Agriculture, and the Administrator of 

5 the Environmental Protection Agency, shall es6 tablish a commission to develop and recommend 

7 model mortgage products and underwriting 

8 guidelines that provide market-based incentives 

9 to prospective home buyers, lenders, and sellers 

10 to incorporate energy efficiency upgrades and 

11 location efficiencies in new mortgage loan trans12 actions. 

13 ‘‘(B) REPORT.—Not later than 24 months 

14 after the date of the enactment of this Act, the 

15 Secretary shall provide a written report to the 

16 Congress on the results of work of the commis17 sion established pursuant to subparagraph (A) 

18 and that identifies model mortgage products 

19 and underwriting guidelines that may encour20 age energy and location efficiency. 

21 ‘‘(2) IMPLEMENTATION.—After submission of 

22 the report under paragraph (1)(B), the Secretary, in 

23 consultation and coordination with the Secretary of 

24 Energy, the Secretary of Education, and the Admin25 istrator of the Environmental Protection Agency, 
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1 shall carry out a public awareness, education, and 

2 outreach campaign based on the findings of the com3 mission established pursuant to paragraph (1) to in4 form and educate residential lenders and prospective 

5 borrowers regarding the availability, benefits, advan6 tages, and terms of energy-efficient mortgages and 

7 location-efficient mortgages made available pursuant 

8 to this section, energy-efficient and location-efficient 

9 mortgages that meet the requirements of section 

10 1335 of the Housing and Community Development 

11 Act of 1992 (42 U.S.C. 4565), and other mortgages, 

12 including mortgages for multifamily housing, that 

13 have energy improvement features or location effi14 ciency features and to publicize such availability, 

15 benefits, advantages, and terms. Such actions may 

16 include entering into a contract with an appropriate 

17 entity to publicize and market such mortgages 

18 through appropriate media. 

19 ‘‘(3) RENEWABLE ENERGY HOME PRODUCT

20 EXPOS.—The Congress hereby encourages the Sec21 retary of Housing and Urban Development to work 

22 with appropriate entities to organize and hold renew23 able energy expositions that provide an opportunity 

24 for the public to view and learn about renewable en-
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1 ergy products for the home that are currently on the 

2 market. 

3 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.— 

4 There is authorized to be appropriated to the Sec5 retary to carry out this subsection $5,000,000 for 

6 each of fiscal years 2010 through 2014.’’. 

7 SEC. 290. COLLECTION OF INFORMATION ON ENERGY-EFFI8 CIENT AND LOCATION-EFFICIENT MORT9 GAGES THROUGH HOME MORTGAGE DISCLO10 SURE ACT. 

11 (a) IN GENERAL.—Section 304(b) of the Home Mort12 gage Disclosure Act of 1975 (12 U.S.C. 2803(b)) is 

13 amended— 

14 (1) in paragraph (3), by striking ‘‘and’’ at the 

15 end; 

16 (2) in paragraph (4), by striking the period at 

17 the end and inserting a semicolon; and 

18 (3) by adding at the end the following new 

19 paragraphs: 

20 ‘‘(5) the number and dollar amount of mort21 gage loans for single-family housing and for multi22 family housing that are energy-efficient mortgages 

23 (as such term is defined in section 1335 of Housing 

24 and Community Development Act of 1992); and 
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1 ‘‘(6) the number and dollar amount of mort2 gage loans for single-family housing and for multi3 family housing that are location-efficient mortgages 

4 (as such term is defined in section 1335 of Housing 

5 and Community Development Act of 1992).’’. 

6 (b) APPLICABILITY.—The amendment made by sub7 section (a) shall apply with respect to the first calendar 

8 year that begins after the expiration of the 30-day period 

9 beginning on the date of the enactment of this Act. 

10 SEC. 291. ENSURING AVAILABILITY OF HOMEOWNERS IN11 SURANCE FOR HOMES NOT CONNECTED TO 

12 ELECTRICITY GRID. 

13 (a) CONGRESSIONAL INTENT.—The Congress intends 

14 that— 

15 (1) consumers shall not be denied homeowners 

16 insurance for a dwelling (as such term is defined in 

17 subsection (c)) based solely on the fact that the 

18 dwelling is not connected to or able to receive elec19 tricity service from any wholesale or retail electric 

20 power provider; 

21 (2) States should ensure that consumers are 

22 able to obtain homeowners insurance for such dwell23 ings; 

24 (3) States should support insurers that develop 

25 voluntary incentives to provide such insurance; and 
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1 (4) States may not prohibit insurers from offer2 ing a homeowners insurance product specifically de3 signed for such dwellings. 

4 (b) INSURING HOMES AND RELATED PROPERTY IN

5 INDIAN AREAS.—Notwithstanding any other provision of 

6 law, dwellings located in Indian areas (as such term is de7 fined in section 4 of the Native American Housing Assist8 ance and Self-Determination Act of 1996 (25 U.S.C. 

9 4103)) and constructed or maintained using assistance, 

10 loan guarantees, or other authority under the Native 

11 American Housing Assistance and Self-Determination Act 

12 of 1996 may be insured by any tribally owned self-insur13 ance risk pool approved by the Secretary of Housing and 

14 Urban Development. 

15 (c) DWELLING.—For purposes of this section, the 

16 term ‘‘dwelling’’ means a residential structure that— 

17 (1) consists of one to four dwelling units; 

18 (2) is provided electricity from renewable en19 ergy sources; and 

20 (3) is not connected to any wholesale or retail 

21 electrical power grid. 

22 SEC. 292. MORTGAGE INCENTIVES FOR ENERGY-EFFICIENT 

23 MULTIFAMILY HOUSING. 

24 (a) IN GENERAL.—The Secretary of Housing and 

25 Urban Development shall establish incentives for increas-
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1 ing the energy efficiency of multifamily housing that is 

2 subject to a mortgage to be insured under title II of the 

3 National Housing Act (12 U.S.C. 1707 et seq.) so that 

4 the housing meets the energy efficiency standards under 

5 section 284(a) of this subtitle and incentives to encourage 

6 compliance of such housing with the energy efficiency and 

7 conservation standards, and the green building standards, 

8 under section 284(b) of this subtitle, to the extent that 

9 such incentives are based on the impact that savings on 

10 utility costs has on the operating costs of the housing, as 

11 determined by the Secretary. 

12 (b) INCENTIVES.—Such incentives may include, for 

13 any such multifamily housing that complies with the en14 ergy efficiency standards under section 284(a)— 

15 (1) providing a discount on the chargeable pre16 miums for the mortgage insurance for such housing 

17 from the amount otherwise chargeable for such 

18 mortgage insurance; 

19 (2) allowing mortgages to exceed the dollar 

20 amount limits otherwise applicable under law to the 

21 extent such additional amounts are used to finance 

22 improvements or measures designed to meet the 

23 standards referred to in subsection (a); and 
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1 (3) reducing the amount that the owner of such 

2 multifamily housing meeting the standards referred 

3 to in subsection (a) is required to contribute. 

4 SEC. 293. ENERGY-EFFICIENT CERTIFICATIONS FOR MANU5 FACTURED HOUSING WITH MORTGAGES. 

6 Section 526 of the National Housing Act (12 U.S.C. 

7 1735f–4(a)) is amended— 

8 (1) in subsection (a)— 

9 (A) by striking ‘‘, other than manufactured 

10 homes,’’ each place such term appears; 

11 (B) by inserting after the period at the end 

12 the following: ‘‘The energy performance require13 ments developed and established by the Sec14 retary under this section for manufactured 

15 homes shall require energy star rating for wall 

16 fixtures, appliances, and equipment in such 

17 housing.’’; 

18 (C) by inserting ‘‘(1)’’ after ‘‘(a)’’; and 

19 (D) by adding at the end the following new 

20 paragraphs: 

21 ‘‘(2) The Secretary shall require, with respect to any 

22 single- or multi-family residential housing subject to a 

23 mortgage insured under this Act, that any approval or cer24 tification of the housing for meeting any energy efficiency 

25 or conservation criteria, standards, or requirements pursu-
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1 ant to this title and any approval or certification required 

2 pursuant to this title with respect to energy-conserving im3 provements or any renewable energy sources, such as 

4 wind, solar energy geothermal, or biomass, shall be con5 ducted only by an individual certified by a home energy 

6 rating system provider who has been accredited to conduct 

7 such ratings by the Home Energy Ratings System Coun8 cil, the Residential Energy Services Network, or such 

9 other appropriate national organization, as the Secretary 

10 may provide, or by licensed professional architect or engi11 neer. If any organization makes a request to the Secretary 

12 for approval to accredit individuals to conduct energy effi13 ciency or conservation ratings, the Secretary shall review 

14 and approve or disapprove such request not later than the 

15 expiration of the 6-month period beginning upon receipt 

16 of such request. 

17 ‘‘(3) The Secretary shall periodically examine the 

18 method used to conduct inspections for compliance with 

19 the requirements under this section, analyze various other 

20 approaches for conducting such inspections, and review 

21 the costs and benefits of the current method compared 

22 with other methods.’’; and 

23 (2) in subsection (b), by striking ‘‘, other than 

24 a manufactured home,’’. 
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1 SEC. 294. ASSISTED HOUSING ENERGY LOAN PILOT PRO2 GRAM. 

3 (a) AUTHORITY.—Not later than the expiration of 

4 the 12-month period beginning on the date of the enact5 ment of this Act, the Secretary shall develop and imple6 ment a pilot program under this section to facilitate the 

7 financing of cost-effective capital improvements for cov8 ered assisted housing projects to improve the energy effi9 ciency and conservation of such projects. 

10 (b) LOANS.—The pilot program under this section 

11 shall involve not less than three and not more than five 

12 lenders, and shall provide for a privately financed loan to 

13 be made for a covered assisted housing project, which 

14 shall— 

15 (1) finance capital improvements for the project 

16 that meet such requirements as the Secretary shall 

17 establish, and may involve contracts with third par18 ties to perform such capital improvements, including 

19 the design of such improvements by licensed profes20 sional architects or engineers; 

21 (2) have a term to maturity of not more than 

22 20 years, which shall be based upon the duration 

23 necessary to realize cost savings sufficient to repay 

24 the loan; 
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1 (3) be secured by a mortgage subordinate to the 

2 mortgage for the project that is insured under the 

3 National Housing Act; and 

4 (4) provide for a reduction in the remaining 

5 principal obligation under the loan based on the ac6 tual resulting cost savings realized from the capital 

7 improvements financed with the loan. 

8 (c) UNDERWRITING STANDARDS.—The Secretary 

9 shall establish underwriting requirements for loans made 

10 under the pilot program under this section, which shall— 

11 (1) require the cost savings projected to be real12 ized from the capital improvements financed with 

13 the loan, during the term of the loan, to exceed the 

14 costs of repaying the loan; 

15 (2) allow the designer or contractor involved in 

16 designing capital improvements to be financed with 

17 a loan under the program to carry out such capital 

18 improvements; and 

19 (3) include such energy, audit, property, finan20 cial, ownership, and approval requirements as the 

21 Secretary considers appropriate. 

22 (d) TREATMENT OF SAVINGS.—The pilot program 

23 under this section shall provide that the project owner 

24 shall receive the full financial benefit from any reduction 
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1 in the cost of utilities resulting from capital improvements 

2 financed with a loan made under the program. 

3 (e) COVERED ASSISTED HOUSING PROJECTS.—For 

4 purposes of this section, the term ‘‘covered assisted hous5 ing project’’ means a housing project that— 

6 (1) is financed by a loan or mortgage that is— 

7 (A) insured by the Secretary under— 

8 (i) subsection (d)(3) of section 221 of 

9 the National Housing Act (12 U.S.C. 

10 1715l), and bears interest at a rate deter11 mined under the proviso of section 

12 221(d)(5) of such Act; or 

13 (ii) subsection (d)(4) of such section 

14 221. 

15 (B) insured or assisted under section 236 

16 of the National Housing Act (12 U.S.C. 1715z– 

17 1); 

18 (2) at the time a loan under this section is 

19 made, is provided project-based rental assistance 

20 under section 8 of the United States Housing Act of 

21 1937 (42 U.S.C. 1437f) for 50 percent or more of 

22 the dwelling units in the project; and 

23 (3) is not a housing project owned or held by 

24 the Secretary, or subject to a mortgage held by the 

25 Secretary. 
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1 SEC. 295. MAKING IT GREEN. 

2 (a) PARTNERSHIPS WITH TREE-PLANTING ORGANI3 ZATIONS.—The Secretary shall establish and provide in4 centives for developers of housing for which any HUD fi5 nancial assistance, as determined by the Secretary, is pro6 vided for development, maintenance, operation, or other 

7 costs, to enter into agreements and partnerships with tree8 planting organizations, nurseries, and landscapers to cer9 tify that trees, shrubs, grasses, and other plants are plant10 ed in the proper manner, are provided adequate mainte11 nance, and survive for at least 3 years after planting or 

12 are replaced. The financial assistance determined by the 

13 Secretary as eligible under this section shall take into con14 sideration such factors as cost effectiveness and afford15 ability. 

16 (b) MAKING IT GREEN PLAN.—In the case of any 

17 new or substantially rehabilitated housing for which HUD 

18 financial assistance, as determined in accordance with 

19 subsection (a), is provided by the Secretary for the devel20 opment, construction, maintenance, rehabilitation, im21 provement, operation, or costs of the housing, including 

22 financial assistance provided through the Community De23 velopment Block Grant program under title I of the Hous24 ing and Community Development Act of 1974 (42 U.S.C. 

25 5301 et seq.), the Secretary shall require the development 

26 of a plan that provides for— 
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1 (1) in the case of new construction and im2 provements, siting of such housing and improve3 ments in a manner that provides for energy effi4 ciency and conservation to the extent feasible, taking 

5 into consideration location and project type; 

6 (2) minimization of the effects of construction, 

7 rehabilitation, or other development on the condition 

8 of existing trees; 

9 (3) selection and installation of indigenous 

10 trees, shrubs, grasses, and other plants based upon 

11 applicable design guidelines and standards of the 

12 International Society for Arboriculture; 

13 (4) post-planting care and maintenance of the 

14 landscaping relating to or affected by the housing in 

15 accordance with best management practices; and 

16 (5) establishment of a goal for minimum 

17 greenspace or tree canopy cover for the housing site 

18 for which such financial assistance is provided, in19 cluding guidelines and timetables within which to 

20 achieve compliance with such minimum require21 ments. 

22 (c) PARTNERSHIPS.—In carrying out this section, the 

23 Secretary is encouraged to consult, as appropriate, with 

24 national organizations dedicated to providing housing as25 sistance and related services to low-income families, such 
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1 as the Alliance for Community Trees and its affiliates, the 

2 American Nursery and Landscape Association, the Amer3 ican Society of Landscape Architects, and the National 

4 Arbor Day Foundation. 

5 SEC. 296. RESIDENTIAL ENERGY EFFICIENCY BLOCK 

6 GRANT PROGRAM. 

7 Title I of the Housing and Community Development 

8 Act of 1974 (42 U.S.C. 5301 et seq.) is amended by add9 ing at the end the following new section: 

10 ‘‘SEC. 123. RESIDENTIAL ENERGY EFFICIENCY BLOCK 

11 GRANT PROGRAM. 

12 ‘‘(a) IN GENERAL.—To the extent amounts are made 

13 available for grants under this section, the Secretary shall 

14 make grants under this section to States, metropolitan cit15 ies and urban counties, Indian tribes, and insular areas 

16 to carry out energy efficiency improvements in new and 

17 existing single-family and multifamily housing. 

18 ‘‘(b) ALLOCATIONS.— 

19 ‘‘(1) IN GENERAL.—Of the total amount made 

20 available for each fiscal year for grants under this 

21 section that remains after reserving amounts pursu22 ant to paragraph (2), the Secretary shall allocate for 

23 insular areas, for metropolitan cities and urban 

24 counties, and for States, an amount that bears the 

25 same ratio to such total amount as the amount allo-
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1 cated for such fiscal year under section 106 for In2 dian tribes, for insular areas, for metropolitan cities 

3 and urban counties, and for States, respectively, 

4 bears to the total amount made available for such 

5 fiscal year for grants under section 106. 

6 ‘‘(2) SET ASIDE FOR INDIAN TRIBES.—Of the 

7 total amount made available for each fiscal year for 

8 grants under this section, the Secretary shall allo9 cate not less than 1 percent to Indian tribes. 

10 ‘‘(c) GRANT AMOUNTS.— 

11 ‘‘(1) ENTITLEMENT COMMUNITIES.—From the 

12 amounts allocated pursuant to subsection (b) for 

13 metropolitan cities and urban counties for each fiscal 

14 year, the Secretary shall make a grant for such fis15 cal year to each metropolitan city and urban county 

16 that complies with the requirement under subsection 

17 (d), in the amount that bears the same ratio such 

18 total amount so allocated as the amount of the grant 

19 for such fiscal year under section 106 for such met20 ropolitan city or urban county bears to the aggre21 gate amount of all grants for such fiscal year under 

22 section 106 for all metropolitan cities and urban 

23 counties. 

24 ‘‘(2) STATES.—From the amounts allocated 

25 pursuant to subsection (b) for States for each fiscal 
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1 year, the Secretary shall make a grant for such fis2 cal year to each State that complies with the re3 quirement under subsection (d), in the amount that 

4 bears the same ratio such total amount so allocated 

5 as the amount of the grant for such fiscal year 

6 under section 106 for such State bears to the aggre7 gate amount of all grants for such fiscal year under 

8 section 106 for all States. Grant amounts received 

9 by a State shall be used only for eligible activities 

10 under subsection (e) carried out in nonentitlement 

11 areas of the State. 

12 ‘‘(3) INDIAN TRIBES.—From the amounts allo13 cated pursuant to subsection (b) for Indian tribes, 

14 the Secretary shall make grants to Indian tribes that 

15 comply with the requirement under subsection (d) on 

16 the basis of a competition conducted pursuant to 

17 specific criteria, as the Secretary shall establish by 

18 regulation, for the selection of Indian tribes to re19 ceive such amount. 

20 ‘‘(4) INSULAR AREAS.—From the amounts allo21 cated pursuant to subsection (b) for insular areas, 

22 the Secretary shall make a grant to each insular 

23 area that complies with the requirement under sub24 section (d) on the basis of the ratio of the population 

25 of the insular area to the aggregate population of all 
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1 insular areas. In determining the distribution of 

2 amounts to insular areas, the Secretary may also in3 clude other statistical criteria as data become avail4 able from the Bureau of Census of the Department 

5 of Labor, but only if such criteria are set forth by 

6 regulation issued after notice and an opportunity for 

7 comment. 

8 ‘‘(d) STATEMENT OF ACTIVITIES.— 

9 ‘‘(1) REQUIREMENT.—Before receipt the re10 ceipt in any fiscal year of a grant under subsection 

11 (c) by any grantee, the grantee shall have prepared 

12 a final statement of housing energy efficiency objec13 tives and projected use of funds as the Secretary 

14 shall require and shall have provided the Secretary 

15 with such certifications regarding such objectives 

16 and use as the Secretary may require. In the case 

17 of metropolitan cities, urban counties, units of gen18 eral local government, and insular areas receiving 

19 grants, the statement of projected use of funds shall 

20 consist of proposed housing energy efficiency activi21 ties. In the case of States receiving grants, the state22 ment of projected use of funds shall consist of the 

23 method by which the States will distribute funds to 

24 units of general local government. 
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1 ‘‘(2) PUBLIC PARTICIPATION.—The Secretary 

2 may establish requirements to ensure the public 

3 availability of information regarding projected use of 

4 grant amounts and public participation in deter5 mining such projected use. 

6 ‘‘(e) ELIGIBLE ACTIVITIES.— 

7 ‘‘(1) REQUIREMENT.—Amounts from a grant 

8 under this section may be used only to carry out ac9 tivities for single-family or multifamily housing that 

10 are designed to improve the energy efficiency of the 

11 housing so that the housing complies with the en12 ergy efficiency standards under section 284(a) of the 

13 Green Resources for Energy Efficient Neighbor14 hoods Act of 2009, including such activities to pro15 vide energy for such housing from renewable 

16 sources, such as wind, waves, solar, biomass, and 

17 geothermal sources. 

18 ‘‘(2) PREFERENCE FOR COMPLIANCE BEYOND

19 BASIC REQUIREMENTS.—In selecting activities to be 

20 funded with amounts from a grant under this sec21 tion, a grantee shall give more preference to activi22 ties based on the extent to which the activities will 

23 result in compliance by the housing with the en24 hanced energy efficiency and conservation standards, 
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1 and the green building standards, under section 

2 284(b) of such Act. 

3 ‘‘(f) REPORTS.—Each grantee of a grant under this 

4 section for a fiscal year shall submit to the Secretary, at 

5 a time determined by the Secretary, a performance and 

6 evaluation report concerning the use of grant amounts, 

7 which shall contain an assessment by the grantee of the 

8 relationship of such use to the objectives identified in the 

9 grantees statement under subsection (d). 

10 ‘‘(g) APPLICABILITY OF CDBG PROVISIONS.—Sec11 tions 109, 110, and 111 of the Housing and Community 

12 Development Act of 1974 (42 U.S.C. 5309, 5310, 5311) 

13 shall apply to assistance received under this section to the 

14 same extent and in the same manner that such sections 

15 apply to assistance received under title I of such Act. 

16 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There 

17 is authorized to be appropriated for grants under this sec18 tion $2,500,000,000 for fiscal year 2010 and such sums 

19 as may be necessary for each fiscal year thereafter.’’. 
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1 SEC. 297. INCLUDING SUSTAINABLE DEVELOPMENT AND 

2 TRANSPORTATION STRATEGIES IN COM3 PREHENSIVE HOUSING AFFORDABILITY 

4 STRATEGIES. 

5 Section 105(b) of the Cranston-Gonzalez National 

6 Affordable Housing Act (42 U.S.C. 12705(b)) is amend7 ed— 

8 (1) by striking ‘‘and’’ at the end of paragraph 

9 (19); 

10 (2) by striking the period at the end of para11 graph (20) and inserting ‘‘; and’’; 

12 (3) and by inserting after paragraph (20) the 

13 following new paragraphs: 

14 ‘‘(21) describe the jurisdiction’s strategies to 

15 encourage sustainable development for affordable 

16 housing, including single-family and multifamily 

17 housing, as measured by— 

18 ‘‘(A) greater energy efficiency and use of 

19 renewable energy sources, including any strate20 gies regarding compliance with the energy effi21 ciency standards under section 284(a) of the 

22 Green Resources for Energy Efficient Neigh23 borhoods Act of 2009 and with the enhanced 

24 energy efficiency and conservation standards, 

25 and the green building standards, under section 

26 284(b) of such Act; 
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1 ‘‘(B) increased conservation, recycling, and 

2 reuse of resources; 

3 ‘‘(C) more effective use of existing infra4 structure; 

5 ‘‘(D) use of building materials and meth6 ods that are healthier for residents of the hous7 ing, including use of building materials that are 

8 free of added known carcinogens that are classi9 fied as Group 1 Known Carcinogens by the 

10 International Agency for Research on Cancer; 

11 and 

12 ‘‘(E) such other criteria as the Secretary 

13 determines, in consultation with the Secretary 

14 of Energy, the Secretary of Agriculture, and the 

15 Administrator of the Environmental Protection 

16 Agency, are in accordance with the purposes of 

17 this paragraph; and 

18 ‘‘(22) describe the jurisdiction’s efforts to co19 ordinate its housing strategy with its transportation 

20 planning strategies to ensure to the extent prac21 ticable that residents of affordable housing have ac22 cess to public transportation.’’. 
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1 SEC. 298. GRANT PROGRAM TO INCREASE SUSTAINABLE 

2 LOW-INCOME COMMUNITY DEVELOPMENT 

3 CAPACITY. 

4 (a) IN GENERAL.—The Secretary may make grants 

5 to nonprofit organizations to use for any of the following 

6 purposes: 

7 (1) Training, educating, supporting, or advising 

8 an eligible community development organization or 

9 qualified youth service and conservation corps in im10 proving energy efficiency, resource conservation and 

11 reuse, design strategies to maximize energy effi12 ciency, installing or constructing renewable energy 

13 improvements (such as wind, wave, solar, biomass, 

14 and geothermal energy sources), and effective use of 

15 existing infrastructure in affordable housing and 

16 economic development activities in low-income com17 munities, taking into consideration energy efficiency 

18 standards under section 284(a) of this subtitle and 

19 with the enhanced energy efficiency and conservation 

20 standards, and the green building standards, under 

21 section 284(b) of this subtitle. 

22 (2) Providing loans, grants, or predevelopment 

23 assistance to eligible community development organi24 zations or qualified youth service and conservation 

25 corps to carry out energy efficiency improvements 

26 that comply with the energy efficiency standards 
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1 under section 284(a) of this subtitle, resource con2 servation and reuse, and effective use of existing in3 frastructure in affordable housing and economic de4 velopment activities in low-income communities. In 

5 providing assistance under this paragraph, the Sec6 retary shall give more preference to activities based 

7 on the extent to which the activities will result in 

8 compliance with the enhanced energy efficiency and 

9 conservation standards, and the green building 

10 standards, under section 284(b) of this subtitle. 

11 (3) Such other purposes as the Secretary deter12 mines are in accordance with the purposes of this 

13 subsection. 

14 (b) APPLICATION REQUIREMENT.—To be eligible for 

15 a grant under this section, a nonprofit organization shall 

16 prepare and submit to the Secretary an application at 

17 such time, in such manner, and containing such informa18 tion as the Secretary may require. 

19 (c) AWARD OF CONTRACTS.—Contracts for architec20 tural or engineering services funded with amounts from 

21 grants made under this section shall be awarded in accord22 ance with chapter 11 of title 40, United States Code (re23 lating to selection of architects and engineers). 

24 (d) MATCHING REQUIREMENT.—A grant made under 

25 this section may not exceed the amount that the nonprofit 
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1 organization receiving the grant certifies, to the Secretary, 

2 will be provided (in cash or in-kind) from nongovernmental 

3 sources to carry out the purposes for which the grant is 

4 made. 

5 (e) DEFINITIONS.—For purposes of this section, the 

6 following definitions shall apply: 

7 (1) The term ‘‘nonprofit organization’’ has the 

8 meaning given such term in section 104 of the Cran9 ston-Gonzalez National Affordable Housing Act (42 

10 U.S.C. 12704). 

11 (2) The term ‘‘eligible community development 

12 organization’’ means— 

13 (A) a unit of general local government (as 

14 defined in section 104 of the Cranston-Gonzalez 

15 National Affordable Housing Act (42 U.S.C. 

16 12704)); 

17 (B) a community housing development or18 ganization (as defined in section 104 of the 

19 Cranston-Gonzalez National Affordable Hous20 ing Act (42 U.S.C. 12704)); 

21 (C) an Indian tribe or tribally designated 

22 housing entity (as such terms are defined in 

23 section 4 of the Native American Housing As24 sistance and Self-Determination Act of 1996 

25 (25 U.S.C. 4103)); or 
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1 (D) a public housing agency, as such term 

2 is defined in section 3(b) of the United States 

3 Housing Act of 1937 (42 U.S.C. 1437(b)). 

4 (3) The term ‘‘low-income community’’ means a 

5 census tract in which 50 percent or more of the 

6 households have an income which is less than 80 

7 percent of the greater of— 

8 (A) the median gross income for such year 

9 for the area in which such census tract is lo10 cated; or 

11 (B) the median gross income for such year 

12 for the State in which such census tract is lo13 cated. 

14 (f) AUTHORIZATION OF APPROPRIATIONS.—There 

15 are authorized to be appropriated to the Secretary to carry 

16 out this section $10,000,000 for each of fiscal years 2010 

17 through 2014. 

18 SEC. 299. HOPE VI GREEN DEVELOPMENTS REQUIREMENT. 

19 (a) MANDATORY COMPONENT.—Section 24(e) of the 

20 United States Housing Act of 1937 (42 U.S.C. 1437v(e)) 

21 is amended by adding at the end the following new para22 graph: 

23 ‘‘(4) GREEN DEVELOPMENTS REQUIREMENT.— 

24 ‘‘(A) REQUIREMENT.—The Secretary may 

25 not make a grant under this section to an appli-
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1 cant unless the proposed revitalization plan of 

2 the applicant to be carried out with such grant 

3 amounts meets the following requirements: 

4 ‘‘(i) GREEN COMMUNITIES CRITERIA

5 CHECKLIST.—All residential construction 

6 under the proposed plan complies with the 

7 national Green Communities criteria 

8 checklist for residential construction that 

9 provides criteria for the design, develop10 ment, and operation of affordable housing, 

11 as such checklist is in effect for purposes 

12 of this paragraph pursuant to subpara13 graph (D) at the date of the application 

14 for the grant, or any substantially equiva15 lent standard or standards as determined 

16 by the Secretary, as follows: 

17 ‘‘(I) The proposed plan shall 

18 comply with all items of the national 

19 Green Communities criteria checklist 

20 for residential construction that are 

21 identified as mandatory. 

22 ‘‘(II) The proposed plan shall 

23 comply with such other nonmandatory 

24 items of such national Green Commu25 nities criteria checklist so as to result 
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1 in a cumulative number of points at2 tributable to such nonmandatory 

3 items under such checklist of not less 

4 than— 

5 ‘‘(aa) 25 points, in the case 

6 of any proposed plan (or portion 

7 thereof) consisting of new con8 struction; and 

9 ‘‘(bb) 20 points, in the case 

10 of any proposed plan (or portion 

11 thereof) consisting of rehabilita12 tion. 

13 ‘‘(ii) GREEN BUILDINGS CERTIFI14 CATION SYSTEM.—All nonresidential con15 struction under the proposed plan complies 

16 with all minimum required levels of the 

17 green building rating systems and levels 

18 identified by the Secretary pursuant to 

19 subparagraph (C), as such systems and 

20 levels are in effect for purposes of this 

21 paragraph pursuant to subparagraph (D) 

22 at the time of the application for the 

23 grant. 

24 ‘‘(B) VERIFICATION.— 
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1 ‘‘(i) IN GENERAL.—The Secretary 

2 shall verify, or provide for verification, suf3 ficient to ensure that each proposed revi4 talization plan carried out with amounts 

5 from a grant under this section complies 

6 with the requirements under subparagraph 

7 (A) and that the revitalization plan is car8 ried out in accordance with such require9 ments and plan. 

10 ‘‘(ii) TIMING.—In providing for such 

11 verification, the Secretary shall establish 

12 procedures to ensure such compliance with 

13 respect to each grantee, and shall report to 

14 the Congress with respect to the compli15 ance of each grantee, at each of the fol16 lowing times: 

17 ‘‘(I) Not later than 6 months 

18 after execution of the grant agreement 

19 under this section for the grantee. 

20 ‘‘(II) Upon completion of the re21 vitalization plan of the grantee. 

22 ‘‘(C) IDENTIFICATION OF GREEN BUILD23 INGS RATING SYSTEMS AND LEVELS.— 

24 ‘‘(i) IN GENERAL.—For purposes of 

25 this paragraph, the Secretary shall identify 
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1 rating systems and levels for green build2 ings that the Secretary determines to be 

3 the most likely to encourage a comprehen4 sive and environmentally sound approach 

5 to ratings and standards for green build6 ings. The identification of the ratings sys7 tems and levels shall be based on the cri8 teria specified in clause (ii), shall identify 

9 the highest levels the Secretary determines 

10 are appropriate above the minimum levels 

11 required under the systems selected. With12 in 90 days of the completion of each study 

13 required by clause (iii), the Secretary shall 

14 review and update the rating systems and 

15 levels, or identify alternative systems and 

16 levels for purposes of this paragraph, tak17 ing into account the conclusions of such 

18 study. 

19 ‘‘(ii) CRITERIA.—In identifying the 

20 green rating systems and levels, the Sec21 retary shall take into consideration— 

22 ‘‘(I) the ability and availability of 

23 assessors and auditors to independ24 ently verify the criteria and measure-
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1 ment of metrics at the scale necessary 

2 to implement this paragraph; 

3 ‘‘(II) the ability of the applicable 

4 ratings system organizations to collect 

5 and reflect public comment; 

6 ‘‘(III) the ability of the standards 

7 to be developed and revised through a 

8 consensus-based process; 

9 ‘‘(IV) An evaluation of the 

10 robustness of the criteria for a high11 performance green building, which 

12 shall give credit for promoting— 

13 ‘‘(aa) efficient and sustain14 able use of water, energy, and 

15 other natural resources; 

16 ‘‘(bb) use of renewable en17 ergy sources; 

18 ‘‘(cc) improved indoor and 

19 outdoor environmental quality 

20 through enhanced indoor and 

21 outdoor air quality, thermal com22 fort, acoustics, outdoor noise pol23 lution, day lighting, pollutant 

24 source control, sustainable land25 scaping, and use of building sys-
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1 tem controls and low- or no-emis2 sion materials, including pref3 erence for materials with no 

4 added carcinogens that are classi5 fied as Group 1 Known Carcino6 gens by the International Agency 

7 for Research on Cancer; and 

8 ‘‘(dd) such other criteria as 

9 the Secretary determines to be 

10 appropriate; and 

11 ‘‘(V) national recognition within 

12 the building industry. 

13 ‘‘(iii) 5-YEAR EVALUATION.—At least 

14 once every 5 years, the Secretary shall con15 duct a study to evaluate and compare 

16 available third-party green building rating 

17 systems and levels, taking into account the 

18 criteria listed in clause (ii). 

19 ‘‘(D) APPLICABILITY AND UPDATING OF

20 STANDARDS.— 

21 ‘‘(i) APPLICABILITY.—Except as pro22 vided in clause (ii) of this subparagraph, 

23 the national Green Communities criteria 

24 checklist and green building rating systems 

25 and levels referred to in clauses (i) and (ii) 
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1 of subparagraph (A) that are in effect for 

2 purposes of this paragraph are such check3 list systems, and levels as in existence 

4 upon the date of the enactment of the 

5 Green Resources for Energy Efficient 

6 Neighborhoods Act of 2009. 

7 ‘‘(ii) UPDATING.—The Secretary may, 

8 by regulation, adopt and apply, for pur9 poses of this paragraph, future amend10 ments and supplements to, and editions of, 

11 the national Green Communities criteria 

12 checklist, any standard or standards that 

13 the Secretary has determined to be sub14 stantially equivalent to such checklist, and 

15 the green building ratings systems and lev16 els identified by the Secretary pursuant to 

17 subparagraph (C).’’. 

18 (b) SELECTION CRITERIA; GRADED COMPONENT.— 

19 Section 24(e)(2) of the United States Housing Act of 

20 1937 (42 U.S.C. 1437v(e)(2)) is amended— 

21 (1) in subparagraph (K), by striking ‘‘and’’ at 

22 the end; 

23 (2) by redesignating subparagraph (L) as sub24 paragraph (M); and 
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1 (3) by inserting after subparagraph (K) the fol2 lowing new subparagraph: 

3 ‘‘(L) the extent to which the proposed revi4 talization plan— 

5 ‘‘(i) in the case of residential con6 struction, complies with the nonmandatory 

7 items of the national Green Communities 

8 criteria checklist identified in paragraph 

9 (4)(A)(i), or any substantially equivalent 

10 standard or standards as determined by 

11 the Secretary, but only to the extent such 

12 compliance exceeds the compliance nec13 essary to accumulate the number of points 

14 required under such paragraph; and 

15 ‘‘(ii) in the case of nonresidential con16 struction, complies with the components of 

17 the green building rating systems and lev18 els identified by the Secretary pursuant to 

19 paragraph (4)(C), but only to the extent 

20 such compliance exceeds the minimum level 

21 required under such systems and levels; 

22 and’’. 
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1 SEC. 299A. CONSIDERATION OF ENERGY EFFICIENCY IM2 PROVEMENTS IN APPRAISALS. 

3 (a) APPRAISALS IN CONNECTION WITH FEDERALLY

4 RELATED TRANSACTIONS.— 

5 (1) REQUIREMENT.—Section 1110 of the Fi6 nancial Institutions Reform, Recovery, and Enforce7 ment Act of 1989 (12 U.S.C. 3339) is amended— 

8 (A) in paragraph (1), by striking ‘‘and’’ at 

9 the end; 

10 (B) by redesignating paragraph (2) as 

11 paragraph (3); and 

12 (C) by inserting after paragraph (1) the 

13 following new paragraph: 

14 ‘‘(2) that such appraisals be performed in ac15 cordance with appraisal standards that require, in 

16 determining the value of a property, consideration of 

17 any renewable energy sources for, or energy effi18 ciency or energy-conserving improvements or fea19 tures of, the property; and’’. 

20 (2) REVISION OF APPRAISAL STANDARDS.— 

21 Each Federal financial institutions regulatory agen22 cy shall, not later than 6 months after the date of 

23 the enactment of this Act, revise its standards for 

24 the performance of real estate appraisals in connec25 tion with federally related transactions under the ju26 risdiction of the agency to comply with the require-
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1 ment under the amendments made by paragraph (1) 

2 of this subsection. 

3 (b) APPRAISER CERTIFICATION AND LICENSING RE4 QUIREMENTS.—Section 1116 of the Financial Institutions 

5 Reform, Recovery, and Enforcement Act of 1989 (12 

6 U.S.C. 3345) is amended— 

7 (1) in subsection (a), by inserting before the pe8 riod at the end the following: ‘‘, and meets the re9 quirements established pursuant to subsection (f) for 

10 qualifications regarding consideration of any renew11 able energy sources for, or energy efficiency or en12 ergy-conserving improvements or features of, the 

13 property’’; 

14 (2) in subsection (c), by inserting before the pe15 riod at the end the following: ‘‘, which shall include 

16 compliance with the requirements established pursu17 ant to subsection (f) regarding consideration of any 

18 renewable energy sources for, or energy efficiency or 

19 energy-conserving improvements or features of, the 

20 property’’; 

21 (3) in subsection (e), by striking ‘‘The’’ and in22 serting ‘‘Except as provided in subsection (f), the’’; 

23 and 

24 (4) by adding at the end the following new sub25 section: 
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1 ‘‘(f) REQUIREMENTS FOR APPRAISERS REGARDING

2 ENERGY EFFICIENCY FEATURES.—The Appraisal Sub3 committee shall establish requirements for State certifi4 cation of State certified real estate appraisers and for 

5 State licensing of State licensed appraisers, to ensure that 

6 appraisers consider and are qualified to consider, in deter7 mining the value of a property, any renewable energy 

8 sources for, or energy efficiency or energy-conserving im9 provements or features of, the property.’’. 

10 (c) GUIDELINES FOR APPRAISING PHOTOVOLTAIC

11 MEASURES AND TRAINING OF APPRAISERS.—Section 

12 1122 of the Financial Institutions Reform, Recovery, and 

13 Enforcement Act of 1989 (12 U.S.C. 3351) is amended 

14 by adding at the end the following new subsection: 

15 ‘‘(g) GUIDELINES FOR APPRAISING PHOTOVOLTAIC

16 MEASURES AND TRAINING OF APPRAISERS.—The Ap17 praisal Subcommittee shall, in consultation with the Sec18 retary of Housing and Urban Development, the Federal 

19 National Mortgage Association, and the Federal Home 

20 Loan Mortgage Corporation, establish specific guidelines 

21 for— 

22 ‘‘(1) appraising off- and on-grid photovoltaic 

23 measures for compliance with the appraisal stand24 ards prescribed pursuant to section 1110(2); 
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1 ‘‘(2) requirements under section 1116(f) for 

2 certification of State certified real estate appraisers 

3 and for State licensing of State licensed appraisers, 

4 to ensure that appraisers consider, and are qualified 

5 to consider, such photovoltaic measures in deter6 mining the value of a property; and 

7 ‘‘(3) training of appraisers to meet the require8 ments established pursuant to paragraph (2) of this 

9 subsection.’’. 

10 SEC. 299B. HOUSING ASSISTANCE COUNCIL. 

11 The Secretary shall require the Housing Assistance 

12 Council— 

13 (1) to encourage each organization that receives 

14 assistance from the Council with any amounts made 

15 available from the Secretary to provide that any 

16 structures and buildings developed or assisted under 

17 projects, programs, and activities funded with such 

18 amounts complies with the energy efficiency stand19 ards under section 284(a) of this subtitle; and 

20 (2) to establish incentives to encourage each 

21 such organization to provide that any such struc22 tures and buildings comply with the energy effi23 ciency and conservation standards, and the green 

24 building standards, under section 284(b) of such 

25 Act. 
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1 SEC. 299C. RURAL HOUSING AND ECONOMIC DEVELOP2 MENT ASSISTANCE. 

3 The Secretary shall— 

4 (1) require each tribe, agency, organization, 

5 corporation, and other entity that receives any as6 sistance from the Office of Rural Housing and Eco7 nomic Development of the Department of Housing 

8 and Urban Development to provide that any struc9 tures and buildings developed or assisted under ac10 tivities funded with such amounts complies with the 

11 energy efficiency standards under section 284(a) of 

12 this subtitle; and 

13 (2) establish incentives to encourage each such 

14 tribe, agency, organization, corporation, and other 

15 entity to provide that any such structures and build16 ings comply with the enhanced energy efficiency and 

17 conservation standards, and the green building 

18 standards, under section 284(b) of such Act. 

19 SEC. 299D. LOANS TO STATES AND INDIAN TRIBES TO 

20 CARRY OUT RENEWABLE ENERGY SOURCES 

21 ACTIVITIES. 

22 (a) ESTABLISHMENT OF FUND.—There is estab23 lished in the Treasury of the United States a fund, to be 

24 known as the ‘‘Alternative Energy Sources State Loan 

25 Fund’’. 

26 (b) EXPENDITURES.— 
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1 (1) IN GENERAL.—Subject to paragraph (2), on 

2 request by the Secretary, the Secretary of the Treas3 ury shall transfer from the Fund to the Secretary 

4 such amounts as the Secretary determines are nec5 essary to provide loans under subsection (c)(1). 

6 (2) ADMINISTRATIVE EXPENSES.—Of the 

7 amounts in the Fund, not more than 5 percent shall 

8 be available for each fiscal year to pay the adminis9 trative expenses of the Department of Housing and 

10 Urban Development to carry out this section. 

11 (c) LOANS TO STATES AND INDIAN TRIBES.— 

12 (1) IN GENERAL.—The Secretary shall use 

13 amounts in the Fund to provide loans to States and 

14 Indian tribes to provide incentives to owners of sin15 gle-family and multifamily housing, commercial 

16 properties, and public buildings to provide— 

17 (A) renewable energy sources for such 

18 structures, such as wind, wave, solar, biomass, 

19 or geothermal energy sources, including incen20 tives to companies and business to change their 

21 source of energy to such renewable energy 

22 sources and for changing the sources of energy 

23 for public buildings to such renewable energy 

24 sources; 
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1 (B) energy efficiency and energy con2 serving improvements and features for such 

3 structures; or 

4 (C) infrastructure related to the delivery of 

5 electricity and hot water for structures lacking 

6 such amenities. 

7 (2) ELIGIBILITY.—To be eligible to receive a 

8 loan under this subsection, a State or Indian tribe, 

9 directly or through an appropriate State or tribal 

10 agency, shall submit to the Secretary an application 

11 at such time, in such manner, and containing such 

12 information as the Secretary may require. 

13 (3) CRITERIA FOR APPROVAL.—The Secretary 

14 may approve an application of a State or Indian 

15 tribe under paragraph (2) only if the Secretary de16 termines that the State or tribe will use the funds 

17 from the loan under this subsection to carry out a 

18 program to provide incentives described in para19 graph (1) that— 

20 (A) requires that any such renewable en21 ergy sources, and energy efficiency and energy 

22 conserving improvements and features, devel23 oped pursuant to assistance under the program 

24 result in compliance of the structure so im-
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1 proved with energy efficiency requirements de2 termined by the Secretary; and 

3 (B) includes such compliance and audit re4 quirements as the Secretary determines are nec5 essary to ensure that the program is operated 

6 in a sound and effective manner. 

7 (4) PREFERENCE.—In making loans during 

8 each fiscal year, the Secretary shall give preference 

9 to States and Indian tribes that have not previously 

10 received a loan under this subsection. 

11 (5) MAXIMUM AMOUNT.—The aggregate out12 standing principal amount from loans under this 

13 subsection to any single State or Indian tribe may 

14 not exceed $500,000,000. 

15 (6) LOAN TERMS.—Each loan under this sub16 section shall have a term to maturity of not more 

17 than 10 years and shall bear interest at annual rate, 

18 determined by the Secretary, that shall not exceed 

19 interest rate charged by the Federal Reserve Bank 

20 of New York to commercial banks and other deposi21 tory institutions for very short-term loans under the 

22 primary credit program, as most recently published 

23 in the Federal Reserve Statistical Release on se24 lected interest rates (daily or weekly), and commonly 

25 referred to as the H.15 release, preceding the date 
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1 of a determination for purposes of applying this 

2 paragraph. 

3 (7) LOAN REPAYMENT.—The Secretary shall 

4 require full repayment of each loan made under this 

5 section. 

6 (d) INVESTMENT OF AMOUNTS.— 

7 (1) IN GENERAL.—The Secretary of the Treas8 ury shall invest such amounts in the Fund that are 

9 not, in the judgment of the Secretary of the Treas10 ury, required to meet needs for current withdrawals. 

11 (2) OBLIGATIONS OF UNITED STATES.—Invest12 ments may be made only in interest-bearing obliga13 tions of the United States. 

14 (e) REPORTS.— 

15 (1) REPORTS TO SECRETARY.—For each year 

16 during the term of a loan made under subsection 

17 (c), the State or Indian tribe that received the loan 

18 shall submit to the Secretary a report describing the 

19 State or tribal alternative energy sources program 

20 for which the loan was made and the activities con21 ducted under the program using the loan funds dur22 ing that year. 

23 (2) REPORT TO CONGRESS.—Not later than 

24 September 30 of each year that loans made under 

25 subsection (c) are outstanding, the Secretary shall 
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1 submit a report to the Congress describing the total 

2 amount of such loans provided under subsection (c) 

3 to each eligible State and Indian tribe during the fis4 cal year ending on such date, and an evaluation on 

5 effectiveness of the Fund. 

6 (f) AUTHORIZATION OF APPROPRIATIONS.—There is 

7 authorized to be appropriated to the Fund 

8 $5,000,000,000. 

9 (g) DEFINITIONS.—For purposes of this section, the 

10 following definitions shall apply: 

11 (1) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 

12 has the meaning given such term in section 4 of the 

13 Native American Housing Assistance and Self-De14 termination Act of 1996 (25 U.S.C. 4103). 

15 (2) STATE.—The term ‘‘State’’ means each of 

16 the several States, the Commonwealth of Puerto 

17 Rico, the District of Columbia, the Commonwealth 

18 of the Northern Mariana Islands, Guam, the Virgin 

19 Islands, American Samoa, the Trust Territories of 

20 the Pacific, or any other possession of the United 

21 States. 

22 SEC. 299E. GREEN BANKING CENTERS. 

23 (a) INSURED DEPOSITORY INSTITUTIONS.—Section 8 

24 of the Federal Deposit Insurance Act (12 U.S.C. 1818) 
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1 is amended by adding at the end the following new sub2 section: 

3 ‘‘(x) ‘GREEN BANKING’ CENTERS.— 

4 ‘‘(1) IN GENERAL.—The Federal banking agen5 cies shall prescribe guidelines encouraging the estab6 lishment and maintenance of ‘green banking’ centers 

7 by insured depository institutions to provide any 

8 consumer who seeks information on obtaining a 

9 mortgage, home improvement loan, home equity 

10 loan, or renewable energy lease with additional infor11 mation on— 

12 ‘‘(A) obtaining an home energy rating or 

13 audit for the residence for which such mortgage 

14 or loan is sought; 

15 ‘‘(B) obtaining financing for cost-effective 

16 energy-saving improvements to such property; 

17 and 

18 ‘‘(C) obtaining beneficial terms for any 

19 mortgage or loan, or qualifying for a larger 

20 mortgage or loan, secured by a residence which 

21 meets or will meet energy efficiency standards. 

22 ‘‘(2) INFORMATION AND REFERRALS.—The in23 formation made available to consumers under para24 graph (1) may include— 
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1 ‘‘(A) information on obtaining a home en2 ergy rating and contact information on quali3 fied energy raters in the area of the residence; 

4 ‘‘(B) information on the secondary market 

5 guidelines that permit lenders to provide more 

6 favorable terms by allowing lenders to increase 

7 the ratio on debt-to-income requirements or to 

8 use the projected utility savings as a compen9 sating factor; 

10 ‘‘(C) information including eligibility infor11 mation about, and contact information for, any 

12 conservation or renewable energy programs, 

13 grants, or loans offered by the Secretary of 

14 Housing and Urban Development, including the 

15 Energy Efficient Mortgage Program; 

16 ‘‘(D) information including eligibility infor17 mation about, and contact information for, any 

18 conservation or renewable energy programs, 

19 grants, or loans offered for qualified military 

20 personal, reservists, and veterans by the Sec21 retary of Veterans Affairs; 

22 ‘‘(E) information about, and contact infor23 mation for, the Office of Efficiency and Renew24 able Energy at the Department of Energy, in25 cluding the weatherization assistance program; 
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1 ‘‘(F) information about, and contact infor2 mation for, the Energy Star Program of the 

3 Environmental Protection Agency; 

4 ‘‘(G) information from, and contact infor5 mation for, the Federal Citizen Information 

6 Center of the General Services Administration 

7 on energy-efficient mortgages and loans, home 

8 energy rating systems, and the availability of 

9 energy-efficient mortgage information from a 

10 variety of Federal agencies; and 

11 ‘‘(H) such other information as the agen12 cies or the insured depository institution may 

13 determine to be appropriate or useful.’’. 

14 (b) INSURED CREDIT UNIONS.—Section 206 of the 

15 Federal Credit Union Act (12 U.S.C. 1786) is amended 

16 by adding at the end the following new subsection: 

17 ‘‘(x) ‘GREEN BANKING’ CENTERS.— 

18 ‘‘(1) IN GENERAL.—The Board shall prescribe 

19 guidelines encouraging the establishment and main20 tenance of ‘green banking’ centers by insured credit 

21 unions to provide any member who seeks informa22 tion on obtaining a mortgage, home improvement 

23 loan, home equity loan, or renewable energy lease 

24 with additional information on— 
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1 ‘‘(A) obtaining an home energy rating or 

2 audit for the residence for which such mortgage 

3 or loan is sought; 

4 ‘‘(B) obtaining financing for cost-effective 

5 energy-saving improvements to such property; 

6 and 

7 ‘‘(C) obtaining beneficial terms for any 

8 mortgage or loan, or qualifying for a larger 

9 mortgage or loan, secured by a residence which 

10 meets or will meet energy efficiency standards. 

11 ‘‘(2) INFORMATION AND REFERRALS.—The in12 formation made available to members under para13 graph (1) may include— 

14 ‘‘(A) information on obtaining a home en15 ergy rating and contact information on quali16 fied energy raters in the area of the residence; 

17 ‘‘(B) information on the secondary market 

18 guidelines that permit lenders to provide more 

19 favorable terms by allowing lenders to increase 

20 the ratio on debt-to-income requirements or to 

21 use the projected utility savings as a compen22 sating factor; 

23 ‘‘(C) information including eligibility infor24 mation about, and contact information for, any 

25 conservation or renewable energy programs, 
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1 grants, or loans offered by the Secretary of 

2 Housing and Urban Development, including the 

3 Energy Efficient Mortgage Program; 

4 ‘‘(D) information including eligibility infor5 mation about, and contact information for, any 

6 conservation or renewable energy programs, 

7 grants, or loans offered for qualified military 

8 personal, reservists, and veterans by the Sec9 retary of Veterans Affairs; 

10 ‘‘(E) information about, and contact infor11 mation for, the Office of Efficiency and Renew12 able Energy at the Department of Energy, in13 cluding the weatherization assistance program; 

14 ‘‘(F) information from, and contact infor15 mation for, the Federal Citizen Information 

16 Center of the General Services Administration 

17 on energy-efficient mortgages and loans, home 

18 energy rating systems, and the availability of 

19 energy-efficient mortgage information from a 

20 variety of Federal agencies; and 

21 ‘‘(G) such other information as the Board 

22 or the insured credit union may determine to be 

23 appropriate or useful.’’. 
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1 SEC. 299F. GAO REPORTS ON AVAILABILITY OF AFFORD2 ABLE MORTGAGES. 

3 (a) STUDY.—The Comptroller General of the United 

4 States shall periodically, as necessary to comply with sub5 section (b), examine the impact of this subtitle and the 

6 amendments made by this subtitle on the availability of 

7 affordable mortgages in various areas throughout the 

8 United States, including cities having older infrastructure 

9 and limited space for the development of new housing. 

10 (b) TRIENNIAL REPORTS.—The Comptroller General 

11 shall submit a report once every 3 years to the Committee 

12 on Financial Services of the House of Representatives and 

13 the Committee on Banking, Housing, and Urban Affairs 

14 of the Senate that shall include— 

15 (1) a detailed statement of the most recent 

16 findings pursuant to subsection (a); and 

17 (2) if the Comptroller General finds that this 

18 subtitle or the amendments made by this subtitle 

19 have directly or indirectly resulted in consequences 

20 that limit the availability or affordability of mort21 gages in any area or areas within the United States, 

22 including any city having older infrastructure and 

23 limited space for the development of new housing, 

24 any recommendations for any additional actions at 

25 the Federal, State, or local levels that the Comp-
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1 troller General considers necessary or appropriate to 

2 mitigate such effects. 

3 The first report under this subsection shall be submitted 

4 not later than the expiration of the 3-year period begin5 ning on the date of the enactment of this Act. 

6 SEC. 299G. PUBLIC HOUSING ENERGY COST REPORT. 

7 (a) COLLECTION OF INFORMATION BY HUD.—The 

8 Secretary of Housing and Urban Development shall obtain 

9 from each public housing agency, by such time as may 

10 be necessary to comply with the reporting requirement 

11 under subsection (b), information regarding the energy 

12 costs for public housing administered or operated by the 

13 agency. For each public housing agency, such information 

14 shall include the monthly energy costs associated with 

15 each separate building and development of the agency, for 

16 the most recently completed 12-month period for which 

17 such information is available, and such other information 

18 as the Secretary determines is appropriate in determining 

19 which public housing buildings and developments are most 

20 in need of repairs and improvements to reduce energy 

21 needs and costs and become more energy efficient. 

22 (b) REPORT.—Not later than the expiration of the 

23 12-month period beginning on the date of the enactment 

24 of this Act, the Secretary of Housing and Urban Develop-
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1 ment shall submit a report to the Congress setting forth 

2 the information collected pursuant to subsection (a). 

3 SEC. 299H. SECONDARY MARKET FOR RESIDENTIAL RE4 NEWABLE ENERGY LEASE INSTRUMENTS. 

5 (a) PURPOSES.—The purposes of this section are— 

6 (1) to encourage residential use of renewable 

7 energy systems by minimizing up-front costs and 

8 providing immediate utility cost savings to con9 sumers through leasing of such systems to home10 owners; 

11 (2) to reduce carbon emissions and the use of 

12 nonrenewable resources; 

13 (3) to encourage energy-efficient residential 

14 construction and rehabilitation; 

15 (4) to encourage the use of renewable resources 

16 by homeowners; 

17 (5) to minimize the impact of development on 

18 the environment; 

19 (6) to reduce consumer utility costs; and 

20 (7) to encourage private investment in the 

21 green economy. 

22 (b) RESIDUAL VALUE OF RENEWABLE ENERGY

23 ASSET.—The Secretary of Housing and Urban Develop24 ment shall establish a means of determining the residual 

25 value of a renewable energy asset such that a secondary 
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1 market for residential renewable energy lease instruments 

2 may be facilitated. Such means may include, without limi3 tation, the calculation of residual value based on the net 

4 present value of projected future energy production of the 

5 renewable energy asset. 

6 SEC. 299I. GREEN GUARANTEES. 

7 (a) AUTHORITY TO GUARANTEE ‘‘GREEN PORTION’’ 

8 OF ELIGIBLE MORTGAGES.— 

9 (1) IN GENERAL.—The Secretary of Housing 

10 and Urban Development may make commitments to 

11 guarantee under this section and may guarantee, the 

12 repayment of the portions of the principal obliga13 tions of eligible mortgages that are used to finance 

14 eligible sustainable building elements for the housing 

15 that is subject to the mortgage. 

16 (2) AMOUNT OF GUARANTEE.—A guarantee 

17 under this section by the Secretary in connection 

18 with an eligible mortgage shall not exceed a percent19 age of the green portion (as such term is defined in 

20 subsection (g)) of the mortgage, as shall be estab21 lished by the Secretary and may be established on 

22 a regional basis as the Secretary determines appro23 priate. 
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1 (b) ELIGIBLE MORTGAGES.—To be considered an eli2 gible mortgage for purposes of this section, a mortgage 

3 shall comply with all of the following requirements: 

4 (1) ACQUISITION OR CONSTRUCTION OF HOUS5 ING.—The mortgage shall be made for the acquisi6 tion or construction of single- or multifamily housing 

7 and repayment of the mortgage shall be secured by 

8 an interest in such housing. 

9 (2) FINANCING OF ELIGIBLE SUSTAINABLE

10 BUILDING ELEMENTS THROUGH GREEN PORTION OF

11 MORTGAGE.—A portion of the principal obligation of 

12 the mortgage, which meets the requirements under 

13 subsection (c), shall be used only for financing the 

14 provision of eligible sustainable building elements for 

15 the housing for which the mortgage was made. 

16 (3) MAXIMUM MORTGAGE AMOUNT.—The prin17 cipal obligation of the mortgage (including the eligi18 ble portion of such mortgage, and such initial service 

19 charges, appraisal, inspection, and other fees as the 

20 Secretary shall approve) may not exceed the fol21 lowing amounts: 

22 (A) SINGLE-FAMILY HOUSING.—Such dol23 lar amounts for single-family housing as the 

24 Secretary shall establish, which may be estab25 lished on the basis of the number of dwelling 
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1 units in the housing, as the Secretary considers 

2 appropriate. 

3 (B) MULTIFAMILY HOUSING.—Such dollar 

4 amounts for multifamily housing as the Sec5 retary shall establish, which may be established 

6 on the basis of the number of dwelling units in 

7 the housing and the number of bedrooms in 

8 such dwelling units, as the Secretary considers 

9 appropriate. 

10 (4) REPAYMENT.—The mortgage meets such 

11 requirements as the Secretary shall establish to en12 sure that there is a reasonable prospect of repay13 ment of the principal and interest on the obligation 

14 by the mortgagor. 

15 (5) MORTGAGE TERMS.—The mortgage shall 

16 meet such requirements with respect to loan-to-value 

17 ratio, mortgagor credit scores, debt-to-income ratio, 

18 and other underwriting standards, term to maturity, 

19 interest rates and amortization, including amortiza20 tion of the green portion of the mortgage, and other 

21 mortgage terms as the Secretary shall establish. 

22 (c) LIMITATIONS ON GREEN PORTION OF MORT23 GAGE.—The requirements under this subsection with re24 spect to the green portion of an eligible mortgage are as 

25 follows: 
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1 (1) PERCENTAGE LIMITATION.—Such portion 

2 shall not exceed, in the case of single-family or mul3 tifamily housing, 10 percent of the total principal 

4 obligation of the mortgage. 

5 (2) DOLLAR AMOUNT LIMITATION.—Such por6 tion shall not exceed— 

7 (A) in the case of single-family housing, 

8 such maximum dollar amount limitation as the 

9 Secretary shall establish, which may be estab10 lished on the basis of the number of dwelling 

11 units in the housing, as the Secretary considers 

12 appropriate; and 

13 (B) in the case of multifamily housing, 

14 such maximum dollar amount limitation as the 

15 Secretary shall establish, which limitation may 

16 be established on the basis of the number of 

17 dwelling units in the housing and the number 

18 of bedrooms in such dwelling units, as the Sec19 retary considers appropriate. 

20 (3) COST-EFFECTIVENESS LIMITATION.—Such 

21 portion shall not exceed the total present value of 

22 the savings (as determined in accordance with sub23 section (d)) attributable to the incorporation of the 

24 eligible sustainable building elements to be financed 
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1 with the green portion of the mortgage that are to 

2 be realized over the useful life of such elements. 

3 (d) ELIGIBLE SUSTAINABLE BUILDING ELE4 MENTS.—The Secretary may not guarantee any eligible 

5 mortgage under this section unless the mortgagor has 

6 demonstrated, in accordance with such requirements as 

7 the Secretary shall establish, the amount of savings attrib8 utable to incorporation of the sustainable building ele9 ments to be financed with the green portion of the mort10 gage, as measured by the National Green Building Stand11 ard for all residential construction developed by the Na12 tional Association of Home Builders and the U.S. Green 

13 Building Council, and approved by the American National 

14 Standards Institute, as updated and in effect at the time 

15 of such demonstration. 

16 (e) GUARANTEE FEE.— 

17 (1) ASSESSMENT AND COLLECTION.—The Sec18 retary shall assess and collect fees for guarantees 

19 under this section in amounts that the Secretary de20 termines are sufficient to cover the costs (as such 

21 term is defined in section 502 of the Federal Credit 

22 Reform Act of 1990 (2 U.S.C. 661a)) of such guar23 antees. 

24 (2) AVAILABILITY.—Fees collected under this 

25 subsection shall be deposited by the Secretary in the 
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1 Treasury of the United States and shall remain 

2 available until expended, subject to such other condi3 tions as are contained in annual appropriations Acts. 

4 (f) PAYMENT OF GUARANTEE.— 

5 (1) DEFAULT.— 

6 (A) RIGHT TO PAYMENT.—If a mortgagor 

7 under a mortgage guaranteed under this section 

8 defaults (as defined in regulations issued by the 

9 Secretary and specified in the guarantee con10 tract) on the obligation under the mortgage— 

11 (i) the holder of the guarantee shall 

12 have the right to demand payment of the 

13 unpaid amount of the guaranteed portion 

14 of the mortgage, to the extent provided 

15 under subsection (a)(2), from the Sec16 retary; and 

17 (ii) within such period as may be 

18 specified in the guarantee or related agree19 ments, the Secretary shall pay to the hold20 er of the guarantee, to the extent provided 

21 under subsection (a)(2), the unpaid inter22 est on, and unpaid principal of the portion 

23 of guaranteed portion of the mortgage with 

24 respect to which the borrower has de25 faulted, unless the Secretary finds that 
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1 there was no default by the borrower in 

2 the payment of interest or principal or that 

3 the default has been remedied. 

4 (B) FORBEARANCE.—Nothing in this para5 graph precludes any forbearance by the holder 

6 of an eligible mortgage for the benefit of the 

7 mortgagor which may be agreed upon by the 

8 parties to the mortgage and approved by the 

9 Secretary. 

10 (2) SUBROGATION.— 

11 (A) IN GENERAL.—If the Secretary makes 

12 a payment under paragraph (1), the Secretary 

13 shall be subrogated to the rights of the recipi14 ent of the payment as specified in the guar15 antee or related agreements including, if appro16 priate, the authority (notwithstanding any other 

17 provision of law)— 

18 (i) to complete, maintain, operate, 

19 lease, or otherwise dispose of any property 

20 acquired pursuant to such guarantee or re21 lated agreements; or 

22 (ii) to permit the mortgagor, pursuant 

23 to an agreement with the Secretary, to 

24 continue to occupy the property subject to 
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1 the mortgage, if the Secretary determines 

2 such occupancy to be appropriate. 

3 (B) SUPERIORITY OF RIGHTS.—The rights 

4 of the Secretary, with respect to any property 

5 acquired pursuant to a guarantee or related 

6 agreements, shall be superior to the rights of 

7 any other person with respect to the property. 

8 (C) TERMS AND CONDITIONS.—A guar9 antee agreement shall include such detailed 

10 terms and conditions as the Secretary deter11 mines appropriate to protect the interests of the 

12 United States in the case of default. 

13 (3) FULL FAITH AND CREDIT.—The full faith 

14 and credit of the United States is pledged to the 

15 payment of all guarantees issued under this section 

16 with respect to principal and interest. 

17 (g) DEFINITIONS.—For purposes of this section, the 

18 following definitions shall apply: 

19 (1) ELIGIBLE MORTGAGE.—The term ‘‘eligible 

20 mortgage’’ means a mortgage that meets the re21 quirements under subsection (b). 

22 (2) GREEN PORTION.—The term ‘‘green por23 tion’’ means, with respect to an eligible mortgage, 

24 the portion of the mortgage principal referred to in 

25 subsection (b)(2) that is attributable, as determined 
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1 in accordance with regulations issued by the Sec2 retary, to the increased costs incurred in financing 

3 provision of sustainable building elements for the 

4 housing for which the mortgage was made, as com5 pared to the costs that would have been incurred in 

6 financing the provision of other building elements 

7 for the housing for the same purposes that are com8 monly or conventionally used but are not sustainable 

9 building elements. 

10 (3) GUARANTEED PORTION.—The term ‘‘guar11 anteed portion’’ means, with respect to an eligible 

12 mortgage guaranteed under this section, the green 

13 portion of the mortgage that is so guaranteed. 

14 (4) MORTGAGE.—The term ‘‘mortgage’’ has the 

15 meaning given such term in section 201 of the Na16 tional Housing Act (12 U.S.C. 1707). 

17 (5) MULTIFAMILY HOUSING.—The term ‘‘multi18 family housing’’ means a residential property con19 sisting of five or more dwelling units. 

20 (6) SECRETARY.—The term ‘‘Secretary’’ means 

21 the Secretary of Housing and Urban Development. 

22 (7) SINGLE-FAMILY HOUSING.—The term ‘‘sin23 gle-family housing’’ means a residential property 

24 consisting of one to four dwelling units. 
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1 (8) SUSTAINABLE BUILDING ELEMENT.—The 

2 term ‘‘sustainable building element’’ means such 

3 building elements, as the Secretary shall define, that 

4 have energy efficiency or environmental sustain5 ability qualities that are superior to such qualities 

6 for other building elements for the same purposes 

7 that are commonly or conventionally used. 

8 (h) AUTHORIZATION OF APPROPRIATIONS.—There is 

9 authorized to be appropriated for costs (as such term is 

10 defined in section 502 of the Federal Credit Reform Act 

11 of 1990 (2 U.S.C. 661a) of guarantees under this section 

12 $500,000,000 for each of fiscal years 2010 through 2014. 

13 (i) REGULATIONS.—The Secretary shall issue any 

14 regulations necessary to carry out this section. 

15 TITLE III—REDUCING GLOBAL 

16 WARMING POLLUTION 

17 SEC. 301. SHORT TITLE. 

18 This title, and sections 112, 116, 221, 222, 223, and 

19 401 of this Act, and the amendments made by this title 

20 and those sections, may be cited as the ‘‘Safe Climate 

21 Act’’. 
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1 Subtitle A—Reducing Global 

2 Warming Pollution 

3 SEC. 311. REDUCING GLOBAL WARMING POLLUTION. 

4 The Clean Air Act (42 U.S.C. and following) is 

5 amended by adding after title VI the following new title: 

6 ‘‘TITLE VII—GLOBAL WARMING 

7 POLLUTION REDUCTION PRO8 GRAM 

9 ‘‘PART A—GLOBAL WARMING POLLUTION 

10 REDUCTION GOALS AND TARGETS 

11 ‘‘SEC. 701. FINDINGS AND PURPOSE. 

12 ‘‘(a) FINDINGS.—The Congress finds as follows: 

13 ‘‘(1) Global warming poses a significant threat 

14 to the national security, economy, public health and 

15 welfare, and environment of the United States, as 

16 well as of other nations. 

17 ‘‘(2) Reviews of scientific studies, including by 

18 the Intergovernmental Panel on Climate Change and 

19 the National Academy of Sciences, demonstrate that 

20 global warming is the result of the combined anthro21 pogenic greenhouse gas emissions from numerous 

22 sources of all types and sizes. Each increment of 

23 emission, when combined with other emissions, 

24 causes or contributes materially to the acceleration 

25 and extent of global warming and its adverse effects 
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1 for the lifetime of such gas in the atmosphere. Ac2 cordingly, controlling emissions in small as well as 

3 large amounts is essential to prevent, slow the pace 

4 of, reduce the threats from, and mitigate global 

5 warming and its adverse effects. 

6 ‘‘(3) Because they induce global warming, 

7 greenhouse gas emissions cause or contribute to in8 juries to persons in the United States, including— 

9 ‘‘(A) adverse health effects such as disease 

10 and loss of life; 

11 ‘‘(B) displacement of human populations; 

12 ‘‘(C) damage to property and other inter13 ests related to ocean levels, acidification, and 

14 ice changes; 

15 ‘‘(D) severe weather and seasonal changes; 

16 ‘‘(E) disruption, costs, and losses to busi17 ness, trade, employment, farms, subsistence, 

18 aesthetic enjoyment of the environment, recre19 ation, culture, and tourism; 

20 ‘‘(F) damage to plants, forests, lands, and 

21 waters; 

22 ‘‘(G) harm to wildlife and habitat; 

23 ‘‘(H) scarcity of water and the decreased 

24 abundance of other natural resources; 
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1 ‘‘(I) worsening of tropospheric air pollu2 tion; 

3 ‘‘(J) substantial threats of similar damage; 

4 and 

5 ‘‘(K) other harm. 

6 ‘‘(4) That many of these effects and risks of fu7 ture effects of global warming are widely shared 

8 does not minimize the adverse effects individual per9 sons have suffered, will suffer, and are at risk of 

10 suffering because of global warming. 

11 ‘‘(5) That some of the adverse and potentially 

12 catastrophic effects of global warming are at risk of 

13 occurring and not a certainty does not negate the 

14 harm persons suffer from actions that increase the 

15 likelihood, extent, and severity of such future im16 pacts. 

17 ‘‘(6) Nations of the world look to the United 

18 States for leadership in addressing the threat of and 

19 harm from global warming. Full implementation of 

20 the Safe Climate Act is critical to engage other na21 tions in an international effort to mitigate the threat 

22 of and harm from global warming. 

23 ‘‘(7) Global warming and its adverse effects are 

24 occurring and are likely to continue and increase in 

25 magnitude, and to do so at a greater and more 
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1 harmful rate, unless the Safe Climate Act is fully 

2 implemented and enforced in an expeditious manner. 

3 ‘‘(b) PURPOSE.—It is the general purpose of the Safe 

4 Climate Act to help prevent, reduce the pace of, mitigate, 

5 and remedy global warming and its adverse effects. To ful6 fill such purpose, it is necessary to— 

7 ‘‘(1) require the timely fulfillment of all govern8 mental acts and duties, both substantive and proce9 dural, and the prompt compliance of covered entities 

10 with the requirements of the Safe Climate Act; 

11 ‘‘(2) establish and maintain an effective, trans12 parent, and fair market for emission allowances and 

13 preserve the integrity of the cap on emissions and of 

14 offset credits; 

15 ‘‘(3) advance the production and deployment of 

16 clean energy and energy efficiency technologies; and 

17 ‘‘(4) ensure effective enforcement of the Safe 

18 Climate Act by citizens, States, Indian tribes, and 

19 all levels of government because each violation of the 

20 Safe Climate Act is likely to result in an additional 

21 increment of greenhouse gas emission and will slow 

22 the pace of implementation of the Safe Climate Act 

23 and delay the achievement of the goals set forth in 

24 section 702, and cause or contribute to global warm25 ing and its adverse effects. 
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1 ‘‘SEC. 702. ECONOMY-WIDE REDUCTION GOALS. 

2 ‘‘The goals of the Safe Climate Act are to reduce 

3 steadily the quantity of United States greenhouse gas 

4 emissions such that— 

5 ‘‘(1) in 2012, the quantity of United States 

6 greenhouse gas emissions does not exceed 97 percent 

7 of the quantity of United States greenhouse gas 

8 emissions in 2005; 

9 ‘‘(2) in 2020, the quantity of United States 

10 greenhouse gas emissions does not exceed 80 percent 

11 of the quantity of United States greenhouse gas 

12 emissions in 2005; 

13 ‘‘(3) in 2030, the quantity of United States 

14 greenhouse gas emissions does not exceed 58 percent 

15 of the quantity of United States greenhouse gas 

16 emissions in 2005; and 

17 ‘‘(4) in 2050, the quantity of United States 

18 greenhouse gas emissions does not exceed 17 percent 

19 of the quantity of United States greenhouse gas 

20 emissions in 2005. 

21 ‘‘SEC. 703. REDUCTION TARGETS FOR SPECIFIED SOURCES. 

22 ‘‘(a) IN GENERAL.—The regulations issued under 

23 section 721 shall cap and reduce annually the greenhouse 

24 gas emissions of capped sources each calendar year begin25 ning in 2012 such that— 
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1 ‘‘(1) in 2012, the quantity of greenhouse gas 

2 emissions from capped sources does not exceed 97 

3 percent of the quantity of greenhouse gas emissions 

4 from such sources in 2005; 

5 ‘‘(2) in 2020, the quantity of greenhouse gas 

6 emissions from capped sources does not exceed 83 

7 percent of the quantity of greenhouse gas emissions 

8 from such sources in 2005; 

9 ‘‘(3) in 2030, the quantity of greenhouse gas 

10 emissions from capped sources does not exceed 58 

11 percent of the quantity of greenhouse gas emissions 

12 from such sources in 2005; and 

13 ‘‘(4) in 2050, the quantity of greenhouse gas 

14 emissions from capped sources does not exceed 17 

15 percent of the quantity of greenhouse gas emissions 

16 from such sources in 2005. 

17 ‘‘(b) DEFINITION.—For purposes of this section, the 

18 term ‘greenhouse gas emissions from such sources in 

19 2005’ means emissions to which section 722 would have 

20 applied if the requirements of this title for the specified 

21 year had been in effect for 2005. 

22 ‘‘SEC. 704. SUPPLEMENTAL POLLUTION REDUCTIONS. 

23 ‘‘For the purposes of decreasing the likelihood of cat24 astrophic climate change, preserving tropical forests, 

25 building capacity to generate offset credits, and facili-
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1 tating international action on global warming, the Admin2 istrator shall set aside the percentage specified in section 

3 781 of the quantity of emission allowances established 

4 under section 721(a) for each year, to be used to achieve 

5 a reduction of greenhouse gas emissions from deforest6 ation in developing countries in accordance with part E. 

7 In 2020, activities supported under part E shall provide 

8 greenhouse gas reductions in an amount equal to an addi9 tional 10 percentage points of reductions from United 

10 States greenhouse gas emissions in 2005. The Adminis11 trator shall distribute these allowances with respect to ac12 tivities in countries that enter into and implement agree13 ments or arrangements relating to reduced deforestation 

14 as described in section 754(a)(2). 

15 ‘‘SEC. 705. REVIEW AND PROGRAM RECOMMENDATIONS. 

16 ‘‘(a) IN GENERAL.—The Administrator shall, in con17 sultation with appropriate Federal agencies, submit to 

18 Congress a report not later than July 1, 2013, and every 

19 4 years thereafter, that includes— 

20 ‘‘(1) an analysis of key findings based on the 

21 latest scientific information and data relevant to 

22 global climate change; 

23 ‘‘(2) an analysis of capabilities to monitor and 

24 verify greenhouse gas reductions on a worldwide 
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1 basis, including for the United States, as required 

2 under the Safe Climate Act; and 

3 ‘‘(3) an analysis of the status of worldwide 

4 greenhouse gas reduction efforts, including imple5 mentation of the Safe Climate Act and other poli6 cies, both domestic and international, for reducing 

7 greenhouse gas emissions, preventing dangerous at8 mospheric concentrations of greenhouse gases, pre9 venting significant irreversible consequences of cli10 mate change, and reducing vulnerability to the im11 pacts of climate change. 

12 ‘‘(b) EXCEPTION.—Paragraph (3) of subsection (a) 

13 shall not apply to the first report submitted under such 

14 subsection. 

15 ‘‘(c) LATEST SCIENTIFIC INFORMATION.—The anal16 ysis required under subsection (a)(1) shall— 

17 ‘‘(1) address existing scientific information and 

18 reports, considering, to the greatest extent possible, 

19 the most recent assessment report of the Intergov20 ernmental Panel on Climate Change, reports by the 

21 United States Global Change Research Program, the 

22 Natural Resources Climate Change Adaptation 

23 Panel established under section 475 of the American 

24 Clean Energy and Security Act of 2009, and Fed-
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1 eral agencies, and the European Union’s global tem2 perature data assessment; and 

3 ‘‘(2) review trends and projections for— 

4 ‘‘(A) global and country-specific annual 

5 emissions of greenhouse gases, and cumulative 

6 greenhouse gas emissions produced between 

7 1850 and the present, including— 

8 ‘‘(i) global cumulative emissions of an9 thropogenic greenhouse gases; 

10 ‘‘(ii) global annual emissions of an11 thropogenic greenhouse gases; and 

12 ‘‘(iii) by country, annual total, annual 

13 per capita, and cumulative anthropogenic 

14 emissions of greenhouse gases for the top 

15 50 emitting nations; 

16 ‘‘(B) significant changes, both globally and 

17 by region, in annual net non-anthropogenic 

18 greenhouse gas emissions from natural sources, 

19 including permafrost, forests, or oceans; 

20 ‘‘(C) global atmospheric concentrations of 

21 greenhouse gases, expressed in annual con22 centration units as well as carbon dioxide 

23 equivalents based on 100-year global warming 

24 potentials; 
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1 ‘‘(D) major climate forcing factors, such as 

2 aerosols; 

3 ‘‘(E) global average temperature, expressed 

4 as seasonal and annual averages in land, ocean, 

5 and land-plus-ocean averages; and 

6 ‘‘(F) sea level rise; 

7 ‘‘(3) assess the current and potential impacts of 

8 global climate change on— 

9 ‘‘(A) human populations, including impacts 

10 on public health, economic livelihoods, subsist11 ence, human infrastructure, and displacement 

12 or permanent relocation due to flooding, severe 

13 weather, extended drought, erosion, or other 

14 ecosystem changes; 

15 ‘‘(B) freshwater systems, including water 

16 resources for human consumption and agri17 culture and natural and managed ecosystems, 

18 flood and drought risks, and relative humidity; 

19 ‘‘(C) the carbon cycle, including impacts 

20 related to the thawing of permafrost, the fre21 quency and intensity of wildfire, and terrestrial 

22 and ocean carbon sinks; 

23 ‘‘(D) ecosystems and animal and plant 

24 populations, including impacts on species abun25 dance, phenology, and distribution; 
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1 ‘‘(E) oceans and ocean ecosystems, includ2 ing effects on sea level, ocean acidity, ocean 

3 temperatures, coral reefs, ocean circulation, 

4 fisheries, and other indicators of ocean eco5 system health; 

6 ‘‘(F) the cryosphere, including effects on 

7 ice sheet mass balance, mountain glacier mass 

8 balance, and sea-ice extent and volume; 

9 ‘‘(G) changes in the intensity, frequency, 

10 or distribution of severe weather events, includ11 ing precipitation, tropical cyclones, tornadoes, 

12 and severe heat waves; 

13 ‘‘(H) agriculture and forest systems; and 

14 ‘‘(I) any other indicators the Administrator 

15 deems appropriate; 

16 ‘‘(4) summarize any significant socio-economic 

17 impacts of climate change in the United States, in18 cluding the territories of the United States, drawing 

19 on work by Federal agencies and the academic lit20 erature, including impacts on— 

21 ‘‘(A) public health; 

22 ‘‘(B) economic livelihoods and subsistence; 

23 ‘‘(C) displacement or permanent relocation 

24 due to flooding, severe weather, extended 

25 drought, erosion, or other ecosystem changes; 
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1 ‘‘(D) human infrastructure, including 

2 coastal infrastructure vulnerability to extreme 

3 events and sea level rise, river floodplain infra4 structure, and sewer and water management 

5 systems; 

6 ‘‘(E) agriculture and forests, including ef7 fects on potential growing season, distribution, 

8 and yield; 

9 ‘‘(F) water resources for human consump10 tion, agriculture and natural and managed eco11 systems, flood and drought risks, and relative 

12 humidity; 

13 ‘‘(G) energy supply and use; and 

14 ‘‘(H) transportation; 

15 ‘‘(5) in assessing risks and impacts, use a risk 

16 management framework, including both qualitative 

17 and quantitative measures, to assess the observed 

18 and projected impacts of current and future climate 

19 change, accounting for— 

20 ‘‘(A) both monetized and non-monetized 

21 losses; 

22 ‘‘(B) potential nonlinear, abrupt, or essen23 tially irreversible changes in the climate system; 

24 ‘‘(C) potential nonlinear increases in the 

25 cost of impacts; 
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1 ‘‘(D) potential low-probability, high impact 

2 events; and 

3 ‘‘(E) whether impacts are transitory or es4 sentially permanent; and 

5 ‘‘(6) based on the findings of the Administrator 

6 under this section, as well as assessments produced 

7 by the Intergovernmental Panel on Climate Change, 

8 the United States Global Change Research program, 

9 and other relevant scientific entities— 

10 ‘‘(A) describe increased risks to natural 

11 systems and society that would result from an 

12 increase in global average temperature 3.6 de13 grees Fahrenheit (2 degrees Celsius) above the 

14 pre-industrial average or an increase in atmos15 pheric greenhouse gas concentrations above 450 

16 parts per million carbon dioxide equivalent; and 

17 ‘‘(B) identify and assess— 

18 ‘‘(i) significant residual risks not 

19 avoided by the thresholds described in sub20 paragraph (A); 

21 ‘‘(ii) alternative thresholds or targets 

22 that may more effectively limit the risks 

23 identified pursuant to clause (i); and 

24 ‘‘(iii) thresholds above those described 

25 in subparagraph (A) which significantly in-
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1 crease the risk of certain impacts or render 

2 them essentially permanent. 

3 ‘‘(d) STATUS OF MONITORING AND VERIFICATION

4 CAPABILITIES TO EVALUATE GREENHOUSE GAS REDUC5 TION EFFORTS.—The analysis required under subsection 

6 (a)(2) shall evaluate the capabilities of the monitoring, re7 porting, and verification systems used to quantify progress 

8 in achieving reductions in greenhouse gas emissions both 

9 globally and in the United States (as described in section 

10 702), including— 

11 ‘‘(1) quantification of emissions and emission 

12 reductions by entities participating in the cap and 

13 trade program under this title; 

14 ‘‘(2) quantification of emissions and emission 

15 reductions by entities participating in the offset pro16 gram under this title; 

17 ‘‘(3) quantification of emission and emissions 

18 reductions by entities regulated by performance 

19 standards; 

20 ‘‘(4) quantification of aggregate net emissions 

21 and emissions reductions by the United States; and 

22 ‘‘(5) quantification of global changes in net 

23 emissions and in sources and sinks of greenhouse 

24 gases. 
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1 ‘‘(e) STATUS OF GREENHOUSE GAS REDUCTION EF2 FORTS.—The analysis required under subsection (a)(3) 

3 shall address— 

4 ‘‘(1) whether the programs under Safe Climate 

5 Act and other Federal statutes are resulting in suffi6 cient United States greenhouse gas emissions reduc7 tions to meet the emissions reduction goals described 

8 in section 702, taking into account the use of off9 sets; and 

10 ‘‘(2) whether United States actions, taking into 

11 account international actions, commitments, and 

12 trends, and considering the range of plausible emis13 sions scenarios, are sufficient to avoid— 

14 ‘‘(A) atmospheric greenhouse gas con15 centrations above 450 parts per million carbon 

16 dioxide equivalent; 

17 ‘‘(B) global average surface temperature 

18 3.6 degrees Fahrenheit (2 degrees Celsius) 

19 above the pre-industrial average, or such other 

20 temperature thresholds as the Administrator 

21 deems appropriate; and 

22 ‘‘(C) other temperature or greenhouse gas 

23 thresholds identified pursuant to subsection 

24 (c)(6)(B). 

25 ‘‘(f) RECOMMENDATIONS.— 
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1 ‘‘(1) LATEST SCIENTIFIC INFORMATION.— 

2 Based on the analysis described in subsection (a)(1), 

3 each report under subsection (a) shall identify ac4 tions that could be taken to— 

5 ‘‘(A) improve the characterization of 

6 changes in the earth-climate system and im7 pacts of global climate change; 

8 ‘‘(B) better inform decision making and 

9 actions related to global climate change; 

10 ‘‘(C) mitigate risks to natural and social 

11 systems; and 

12 ‘‘(D) design policies to better account for 

13 climate risks. 

14 ‘‘(2) MONITORING, REPORTING AND

15 VERIFICATION.—Based on the analysis described in 

16 subsection (a)(2), each report under subsection (a) 

17 shall identify key gaps in measurement, reporting, 

18 and verification capabilities and make recommenda19 tions to improve the accuracy and reliability of those 

20 capabilities. 

21 ‘‘(3) STATUS OF GREENHOUSE GAS REDUCTION

22 EFFORTS.—Based on the analysis described in sub23 section (a)(3), taking into account international ac24 tions, commitments, and trends, and considering the 
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1 range of plausible emissions scenarios, each report 

2 under subsection (a) shall identify— 

3 ‘‘(A) the quantity of additional reductions 

4 required to meet the emissions reduction goals 

5 in section 702; 

6 ‘‘(B) the quantity of additional reductions 

7 in global greenhouse gas emissions needed to 

8 avoid the concentration and temperature 

9 thresholds identified in subsection (e); and 

10 ‘‘(C) possible strategies and approaches for 

11 achieving additional reductions. 

12 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 

13 are authorized to be appropriated to carry out this section 

14 such sums as may be necessary. 

15 ‘‘SEC. 706. NATIONAL ACADEMY REVIEW. 

16 ‘‘(a) IN GENERAL.—Not later than 1 year after the 

17 date of enactment of this title, the Administrator shall 

18 offer to enter into a contract with the National Academy 

19 of Sciences (in this section referred to as the ‘Academy’) 

20 under which the Academy shall, not later than July 1, 

21 2014, and every 4 years thereafter, submit to Congress 

22 and the Administrator a report that includes— 

23 ‘‘(1) a review of the most recent report and rec24 ommendations issued under section 705; and 
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1 ‘‘(2) an analysis of technologies to achieve re2 ductions in greenhouse gas emissions. 

3 ‘‘(b) FAILURE TO ISSUE A REPORT.—In the event 

4 that the Administrator has not issued all or part of the 

5 most recent report required under section 705, the Acad6 emy shall conduct its own review and analysis of the re7 quired information. 

8 ‘‘(c) TECHNOLOGICAL INFORMATION.—The analysis 

9 required under subsection (a)(2) shall— 

10 ‘‘(1) review existing technological information 

11 and reports, including the most recent reports by the 

12 Department of Energy, the United States Global 

13 Change Research Program, the Intergovernmental 

14 Panel on Climate Change, and the International En15 ergy Agency and any other relevant information on 

16 technologies or practices that reduce or limit green17 house gas emissions; 

18 ‘‘(2) include the participation of technical ex19 perts from relevant private industry sectors; 

20 ‘‘(3) review the current and future projected de21 ployment of technologies and practices in the United 

22 States that reduce or limit greenhouse gas emis23 sions, including— 

24 ‘‘(A) technologies for capture and seques25 tration of greenhouse gases; 
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1 ‘‘(B) technologies to improve energy effi2 ciency; 

3 ‘‘(C) low- or zero-greenhouse gas emitting 

4 energy technologies; 

5 ‘‘(D) low- or zero-greenhouse gas emitting 

6 fuels; 

7 ‘‘(E) biological sequestration practices and 

8 technologies; and 

9 ‘‘(F) any other technologies the Academy 

10 deems relevant; and 

11 ‘‘(4) review and compare the emissions reduc12 tion potential, commercial viability, market penetra13 tion, investment trends, and deployment of the tech14 nologies described in paragraph (3), including— 

15 ‘‘(A) the need for additional research and 

16 development, including publicly funded research 

17 and development; 

18 ‘‘(B) the extent of commercial deployment, 

19 including, where appropriate, a comparison to 

20 the cost and level of deployment of conventional 

21 fossil fuel-fired energy technologies and devices; 

22 and 

23 ‘‘(C) an evaluation of any substantial tech24 nological, legal, or market-based barriers to 

25 commercial deployment. 
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1 ‘‘(d) RECOMMENDATIONS.— 

2 ‘‘(1) LATEST SCIENTIFIC INFORMATION.— 

3 Based on the review described in subsection (a)(1), 

4 the Academy shall identify actions that could be 

5 taken to— 

6 ‘‘(A) improve the characterization of 

7 changes in the earth-climate system and im8 pacts of global climate change; 

9 ‘‘(B) better inform decision making and 

10 actions related to global climate change; 

11 ‘‘(C) mitigate risks to natural and social 

12 systems; 

13 ‘‘(D) design policies to better account for 

14 climate risks; and 

15 ‘‘(E) improve the accuracy and reliability 

16 of capabilities to monitor, report, and verify 

17 greenhouse gas emissions reduction efforts. 

18 ‘‘(2) TECHNOLOGICAL INFORMATION.—Based 

19 on the analysis described in subsection (a)(2), the 

20 Academy shall identify— 

21 ‘‘(A) additional emissions reductions that 

22 may be possible as a result of technologies de23 scribed in the analysis; 

24 ‘‘(B) barriers to the deployment of such 

25 technologies; and 
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1 ‘‘(C) actions that could be taken to speed 

2 deployment of such technologies. 

3 ‘‘(3) STATUS OF GREENHOUSE GAS REDUCTION

4 EFFORTS.—Based on the review described in sub5 section (a)(1), the Academy shall identify— 

6 ‘‘(A) the quantity of additional reductions 

7 required to meet the emissions reduction goals 

8 described in section 702; and 

9 ‘‘(B) the quantity of additional reductions 

10 in global greenhouse gas emissions needed to 

11 avoid the concentration and temperature 

12 thresholds described in section 705(c)(6)(A) or 

13 identified pursuant to section 705(c)(6)(B). 

14 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 

15 are authorized to be appropriated to carry out this section 

16 such sums as may be necessary. 

17 ‘‘SEC. 707. PRESIDENTIAL RESPONSE AND RECOMMENDA18 TIONS. 

19 ‘‘(a) AGENCY ACTIONS.—The President shall direct 

20 relevant Federal agencies to use existing statutory author21 ity to take appropriate actions identified in the reports 

22 submitted under sections 705 and 706, and to address any 

23 shortfalls identified in such reports, not later than July 

24 1, 2015, and every 4 years thereafter. 
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1 ‘‘(b) PLAN.—In the event that the Administrator or 

2 the National Academy of Sciences has concluded, in the 

3 most recent report submitted under section 705 or 706 

4 respectively, that the United States will not achieve the 

5 necessary domestic greenhouse gas emissions reductions, 

6 or that global actions will not maintain safe global average 

7 surface temperature and atmospheric greenhouse gas con8 centration thresholds, the President shall, not later than 

9 July 1, 2015, and every 4 years thereafter, submit to Con10 gress a plan identifying domestic and international actions 

11 that will achieve necessary additional greenhouse gas re12 ductions, including any recommendations for legislative 

13 action. 

14 ‘‘PART B—DESIGNATION AND REGISTRATION OF 

15 GREENHOUSE GASES 

16 ‘‘SEC. 711. DESIGNATION OF GREENHOUSE GASES. 

17 ‘‘(a) GREENHOUSE GASES.—For purposes of this 

18 title, the following are greenhouse gases: 

19 ‘‘(1) Carbon dioxide. 

20 ‘‘(2) Methane. 

21 ‘‘(3) Nitrous oxide. 

22 ‘‘(4) Sulfur hexafluoride. 

23 ‘‘(5) Hydrofluorocarbons emitted from a chem24 ical manufacturing process at an industrial sta25 tionary source. 
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1 ‘‘(6) Any perfluorocarbon. 

2 ‘‘(7) Nitrogen trifluoride. 

3 ‘‘(8) Any other anthropogenic gas designated as 

4 a greenhouse gas by the Administrator under this 

5 section. 

6 ‘‘(b) DETERMINATION ON ADMINISTRATOR’S INITIA7 TIVE.—The Administrator shall, by rule— 

8 ‘‘(1) determine whether 1 metric ton of another 

9 anthropogenic gas makes the same or greater con10 tribution to global warming over 100 years as 1 met11 ric ton of carbon dioxide; 

12 ‘‘(2) determine the carbon dioxide equivalent 

13 value for each gas with respect to which the Admin14 istrator makes an affirmative determination under 

15 paragraph (1); 

16 ‘‘(3) for each gas with respect to which the Ad17 ministrator makes an affirmative determination 

18 under paragraph (1) and that is used as a substitute 

19 for a class I or class II substance under title VI, de20 termine the extent to which to regulate that gas 

21 under section 619 and specify appropriate compli22 ance obligations under section 619; 

23 ‘‘(4) designate as a greenhouse gas for purposes 

24 of this title each gas for which the Administrator 

25 makes an affirmative determination under para-
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1 graph (1), to the extent that it is not regulated 

2 under section 619; and 

3 ‘‘(5) specify the appropriate compliance obliga4 tions under this title for each gas designated as a 

5 greenhouse gas under paragraph (4). 

6 ‘‘(c) PETITIONS TO DESIGNATE A GREENHOUSE

7 GAS.— 

8 ‘‘(1) IN GENERAL.—Any person may petition 

9 the Administrator to designate as a greenhouse gas 

10 any anthropogenic gas 1 metric ton of which makes 

11 the same or greater contribution to global warming 

12 over 100 years as 1 metric ton of carbon dioxide. 

13 ‘‘(2) CONTENTS OF PETITION.—The petitioner 

14 shall provide sufficient data, as specified by rule by 

15 the Administrator, to demonstrate that the gas is 

16 likely to be designated as a greenhouse gas and is 

17 likely to be produced, imported, used, or emitted in 

18 the United States. To the extent practicable, the pe19 titioner shall also identify producers, importers, dis20 tributors, users, and emitters of the gas in the 

21 United States. 

22 ‘‘(3) REVIEW AND ACTION BY THE ADMINIS23 TRATOR.—Not later than 90 days after receipt of a 

24 petition under paragraph (2), the Administrator 
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1 shall determine whether the petition is complete and 

2 notify the petitioner and the public of the decision. 

3 ‘‘(4) ADDITIONAL INFORMATION.—The Admin4 istrator may require producers, importers, distribu5 tors, users, or emitters of the gas to provide infor6 mation on the contribution of the gas to global 

7 warming over 100 years compared to carbon dioxide. 

8 ‘‘(5) TREATMENT OF PETITION.—For any sub9 stance used as a substitute for a class I or class II 

10 substance under title VI, the Administrator may 

11 elect to treat a petition under this subsection as a 

12 petition to list the substance as a class II, group II 

13 substance under section 619, and may require the 

14 petition to be amended to address listing criteria 

15 promulgated under that section. 

16 ‘‘(6) DETERMINATION.—Not later than 2 years 

17 after receipt of a complete petition, the Adminis18 trator shall, after notice and an opportunity for com19 ment— 

20 ‘‘(A) issue and publish in the Federal Reg21 ister— 

22 ‘‘(i) a determination that 1 metric ton 

23 of the gas does not make a contribution to 

24 global warming over 100 years that is 
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1 equal to or greater than that made by 1 

2 metric ton of carbon dioxide; and 

3 ‘‘(ii) an explanation of the decision; or 

4 ‘‘(B) determine that 1 metric ton of the 

5 gas makes a contribution to global warming 

6 over 100 years that is equal to or greater than 

7 that made by 1 metric ton of carbon dioxide, 

8 and take the actions described in subsection (b) 

9 with respect to such gas. 

10 ‘‘(7) GROUNDS FOR DENIAL.—The Adminis11 trator may not deny a petition under this subsection 

12 solely on the basis of inadequate Environmental Pro13 tection Agency resources or time for review. 

14 ‘‘(d) SCIENCE ADVISORY BOARD CONSULTATION.— 

15 ‘‘(1) CONSULTATION.—The Administrator 

16 shall— 

17 ‘‘(A) give notice to the Science Advisory 

18 Board prior to making a determination under 

19 subsection (b)(1), (c)(6), or (e)(2)(B); 

20 ‘‘(B) consider the written recommendations 

21 of the Science Advisory Board under paragraph 

22 (2) regarding the determination; and 

23 ‘‘(C) consult with the Science Advisory 

24 Board regarding such determination, including 
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1 consultation subsequent to receipt of such writ2 ten recommendations. 

3 ‘‘(2) FORMULATION OF RECOMMENDATIONS.— 

4 Upon receipt of notice under paragraph (1)(A) re5 garding a pending determination under subsection 

6 (b)(1), (c)(6), or (e)(2)(B), the Science Advisory 

7 Board shall— 

8 ‘‘(A) formulate recommendations regarding 

9 such determination, subject to a peer review 

10 process; and 

11 ‘‘(B) submit such recommendations in 

12 writing to the Administrator. 

13 ‘‘(e) MANUFACTURING AND EMISSION NOTICES.— 

14 ‘‘(1) NOTICE REQUIREMENT.— 

15 ‘‘(A) IN GENERAL.—Effective 24 months 

16 after the date of enactment of this title, no per17 son may manufacture or introduce into inter18 state commerce a fluorinated gas, or emit a sig19 nificant quantity, as determined by the Admin20 istrator, of any fluorinated gas that is gen21 erated as a byproduct during the production or 

22 use of another fluorinated gas, unless— 

23 ‘‘(i) the gas is designated as a green24 house gas under this section or is an 
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1 ozone-depleting substance listed as a class 

2 I or class II substance under title VI; 

3 ‘‘(ii) the Administrator has deter4 mined that 1 metric ton of such gas does 

5 not make a contribution to global warming 

6 over 100 years that is equal to or greater 

7 than that made by 1 metric ton of carbon 

8 dioxide; or 

9 ‘‘(iii) the person manufacturing or im10 porting the gas for distribution into inter11 state commerce, or emitting the gas, has 

12 submitted to the Administrator, at least 90 

13 days before the start of such manufacture, 

14 introduction into commerce, or emission, a 

15 notice of such person’s manufacture, intro16 duction into commerce, or emission of such 

17 gas, and the Administrator has not deter18 mined that that notice or a substantially 

19 similar notice submitted by that person is 

20 incomplete. 

21 ‘‘(B) ALTERNATIVE COMPLIANCE.—For a 

22 gas that is a substitute for a class I or class II 

23 substance under title VI and either has been 

24 listed as acceptable for use under section 612 

25 or is currently subject to evaluation under sec-
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1 tion 612, the Administrator may accept the no2 tice and information provided pursuant to that 

3 section as fulfilling the obligation under clause 

4 (iii) of subparagraph (A). 

5 ‘‘(2) REVIEW AND ACTION BY THE ADMINIS6 TRATOR.— 

7 ‘‘(A) COMPLETENESS.—Not later than 90 

8 days after receipt of notice under paragraph 

9 (1)(A)(iii) or (B), the Administrator shall deter10 mine whether the notice is complete. 

11 ‘‘(B) DETERMINATION.— If the Adminis12 trator determines that the notice is complete, 

13 the Administrator shall, after notice and an op14 portunity for comment, not later than 12 

15 months after receipt of the notice— 

16 ‘‘(i) issue and publish in the Federal 

17 Register— 

18 ‘‘(I) a determination that 1 met19 ric ton of the gas does not make a 

20 contribution to global warming over 

21 100 years that is equal to or greater 

22 than that made by 1 metric ton of 

23 carbon dioxide; and 

24 ‘‘(II) an explanation of the deci25 sion; or 
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1 ‘‘(ii) determine that 1 metric ton of 

2 the gas makes a contribution to global 

3 warming over 100 years that is equal to or 

4 greater than that made by 1 metric ton of 

5 carbon dioxide, and take the actions de6 scribed in subsection (b) with respect to 

7 such gas. 

8 ‘‘(f) REGULATIONS.—Not later than 1 year after the 

9 date of enactment of this title, the Administrator shall 

10 promulgate regulations to carry out this section. Such reg11 ulations shall include— 

12 ‘‘(1) requirements for the contents of a petition 

13 submitted under subsection (c); 

14 ‘‘(2) requirements for the contents of a notice 

15 required under subsection (e); and 

16 ‘‘(3) methods and standards for evaluating the 

17 carbon dioxide equivalent value of a gas. 

18 ‘‘(g) GASES REGULATED UNDER TITLE VI.—The 

19 Administrator shall not designate a gas as a greenhouse 

20 gas under this section to the extent that the gas is regu21 lated under title VI. 

22 ‘‘(h) SAVINGS CLAUSE.—Nothing in this section shall 

23 be interpreted to relieve any person from complying with 

24 the requirements of section 612. 
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1 ‘‘SEC. 712. CARBON DIOXIDE EQUIVALENT VALUE OF 

2 GREENHOUSE GASES. 

3 ‘‘(a) MEASURE OF QUANTITY OF GREENHOUSE

4 GASES.—Any provision of this title or title VIII that refers 

5 to a quantity or percentage of a quantity of greenhouse 

6 gases shall mean the quantity or percentage of the green7 house gases expressed in carbon dioxide equivalents. 

8 ‘‘(b) INITIAL VALUE.—Except as provided by the Ad9 ministrator under this section or section 711— 

10 ‘‘(1) the carbon dioxide equivalent value of 

11 greenhouse gases for purposes of this Act shall be as 

12 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 
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‘‘CARBON DIOXIDE EQUIVALENT OF 1 TON OF LISTED 

GREENHOUSE GASES—Continued 

Greenhouse gas (1 metric ton) Carbon dioxide equivalent 

(metric tons) 

C2F6 12,200 

C4F10 8,860 

C6F14 9,300 

SF6 22,800 

NF3 17,200 

1 ; and 

2 ‘‘(2) the carbon dioxide equivalent value for 

3 purposes of this Act for any greenhouse gas not list4 ed in the table under paragraph (1) shall be the 

5 100-year Global Warming Potentials provided in the 

6 Intergovernmental Panel on Climate Change Fourth 

7 Assessment Report. 

8 ‘‘(c) PERIODIC REVIEW.— 

9 ‘‘(1) Not later than February 1, 2017, and (ex10 cept as provided in paragraph (3)) not less than 

11 every 5 years thereafter, the Administrator shall— 

12 ‘‘(A) review and, if appropriate, revise the 

13 carbon dioxide equivalent values established 

14 under this section or section 711(b)(2), based 

15 on a determination of the number of metric 

16 tons of carbon dioxide that makes the same 

17 contribution to global warming over 100 years 

18 as 1 metric ton of each greenhouse gas; and 
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1 ‘‘(B) publish in the Federal Register the 

2 results of that review and any revisions. 

3 ‘‘(2) A revised determination published in the 

4 Federal Register under paragraph (1)(B) shall take 

5 effect for greenhouse gas emissions starting on Jan6 uary 1 of the first calendar year starting at least 9 

7 months after the date on which the revised deter8 mination was published. 

9 ‘‘(3) The Administrator may decrease the fre10 quency of review and revision under paragraph (1) 

11 if the Administrator determines that such decrease 

12 is appropriate in order to synchronize such review 

13 and revision with any similar review process carried 

14 out pursuant to the United Nations Framework 

15 Convention on Climate Change, done at New York 

16 on May 9, 1992, or to an agreement negotiated 

17 under that convention, except that in no event shall 

18 the Administrator carry out such review and revision 

19 any less frequently than every 10 years. 

20 ‘‘(d) METHODOLOGY.—In setting carbon dioxide 

21 equivalent values, for purposes of this section or section 

22 711, the Administrator shall take into account publica23 tions by the Intergovernmental Panel on Climate Change 

24 or a successor organization under the auspices of the 
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1 United Nations Environmental Programme and the World 

2 Meteorological Organization. 

3 ‘‘SEC. 713. GREENHOUSE GAS REGISTRY. 

4 ‘‘(a) DEFINITIONS.—For purposes of this section: 

5 ‘‘(1) CLIMATE REGISTRY.—The term ‘Climate 

6 Registry’ means the greenhouse gas emissions reg7 istry jointly established and managed by more than 

8 40 States and Indian tribes in 2007 to collect high9 quality greenhouse gas emission data from facilities, 

10 corporations, and other organizations to support var11 ious greenhouse gas emission reporting and reduc12 tion policies for the member States and Indian 

13 tribes. 

14 ‘‘(2) REPORTING ENTITY.—The term ‘reporting 

15 entity’ means— 

16 ‘‘(A) a covered entity; 

17 ‘‘(B) an entity that— 

18 ‘‘(i) would be a covered entity if it had 

19 emitted, produced, imported, manufac20 tured, or delivered in 2008 or any subse21 quent year more than the applicable 

22 threshold level in the definition of covered 

23 entity in paragraph (13) of section 700; 

24 and 
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1 ‘‘(ii) has emitted, produced, imported, 

2 manufactured, or delivered in 2008 or any 

3 subsequent year more than the applicable 

4 threshold level in the definition of covered 

5 entity in paragraph (13) of section 700, 

6 provided that the figure of 25,000 tons of 

7 carbon dioxide equivalent is read instead 

8 as 10,000 tons of carbon dioxide equivalent 

9 and the figure of 460,000,000 cubic feet is 

10 read instead as 184,000,000 cubic feet; 

11 ‘‘(C) any other entity that emits a green12 house gas, or produces, imports, manufactures, 

13 or delivers material whose use results or may 

14 result in greenhouse gas emissions if the Ad15 ministrator determines that reporting under 

16 this section by such entity will help achieve the 

17 purposes of this title or title VIII; 

18 ‘‘(D) any vehicle fleet with emissions of 

19 more than 25,000 tons of carbon dioxide equiv20 alent on an annual basis, if the Administrator 

21 determines that the inclusion of such fleet will 

22 help achieve the purposes of this title or title 

23 VIII; or 

24 ‘‘(E) any entity that delivers electricity to 

25 a facility in an energy-intensive industrial sec-
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1 tor that meets the energy or greenhouse gas in2 tensity criteria in section 764(b)(2)(A)(i). 

3 ‘‘(b) REGULATIONS.— 

4 ‘‘(1) IN GENERAL.—Not later than 6 months 

5 after the date of enactment of this title, the Admin6 istrator shall issue regulations establishing a Federal 

7 greenhouse gas registry. Such regulations shall— 

8 ‘‘(A) require reporting entities to submit to 

9 the Administrator data on— 

10 ‘‘(i) greenhouse gas emissions in the 

11 United States; 

12 ‘‘(ii) the production and manufacture 

13 in the United States, importation into the 

14 United States, and, at the discretion of the 

15 Administrator, exportation from the 

16 United States, of fuels and industrial gases 

17 the uses of which result or may result in 

18 greenhouse gas emissions; 

19 ‘‘(iii) deliveries in the United States of 

20 natural gas, and any other gas meeting the 

21 specifications for commingling with natural 

22 gas for purposes of delivery, the combus23 tion of which result or may result in green24 house gas emissions; and 
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1 ‘‘(iv) the capture and sequestration of 

2 greenhouse gases; 

3 ‘‘(B) require covered entities and, where 

4 appropriate, other reporting entities to submit 

5 to the Administrator data sufficient to ensure 

6 compliance with or implementation of the re7 quirements of this title; 

8 ‘‘(C) require reporting of electricity deliv9 ered to facilities in an energy-intensive indus10 trial sector that meets the energy or greenhouse 

11 gas intensity criteria in section 764(b)(2)(A)(i); 

12 ‘‘(D) ensure the completeness, consistency, 

13 transparency, accuracy, precision, and reliability 

14 of such data; 

15 ‘‘(E) take into account the best practices 

16 from the most recent Federal, State, tribal, and 

17 international protocols for the measurement, ac18 counting, reporting, and verification of green19 house gas emissions, including protocols from 

20 the Climate Registry and other mandatory 

21 State or multistate authorized programs; 

22 ‘‘(F) take into account the latest scientific 

23 research; 

24 ‘‘(G) require that, for covered entities with 

25 respect to greenhouse gases to which section 
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1 722 applies, and, to the extent determined to be 

2 appropriate by the Administrator, for covered 

3 entities with respect to other greenhouse gases 

4 and for other reporting entities, submitted data 

5 are based on— 

6 ‘‘(i) continuous monitoring systems 

7 for fuel flow or emissions, such as contin8 uous emission monitoring systems; 

9 ‘‘(ii) alternative systems that are dem10 onstrated as providing data with the same 

11 precision, reliability, accessibility, and 

12 timeliness, or, to the extent the Adminis13 trator determines is appropriate for report14 ing small amounts of emissions, the same 

15 precision, reliability, and accessibility and 

16 similar timeliness, as data provided by con17 tinuous monitoring systems for fuel flow or 

18 emissions; or 

19 ‘‘(iii) alternative methodologies that 

20 are demonstrated to provide data with pre21 cision, reliability, accessibility, and timeli22 ness, or, to the extent the Administrator 

23 determines is appropriate for reporting 

24 small amounts of emissions, precision, reli25 ability, and accessibility, as similar as is 
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1 technically feasible to that of data gen2 erally provided by continuous monitoring 

3 systems for fuel flow or emissions, if the 

4 Administrator determines that, with re5 spect to a reporting entity, there is no con6 tinuous monitoring system or alternative 

7 system described in clause (i) or (ii) that 

8 is technically feasible; 

9 ‘‘(H) require that the Administrator, in de10 termining the extent to which the requirement 

11 to use systems or methodologies in accordance 

12 with subparagraph (G) is appropriate for re13 porting entities other than covered entities or 

14 for greenhouse gases to which section 722 does 

15 not apply, consider the cost of using such sys16 tems and methodologies, and of using other sys17 tems and methodologies that are available and 

18 suitable, for quantifying the emissions involved 

19 in light of the purposes of this title, including 

20 the goal of collecting consistent entity-wide 

21 data; 

22 ‘‘(I) include methods for minimizing double 

23 reporting and avoiding irreconcilable double re24 porting of greenhouse gas emissions; 
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1 ‘‘(J) establish measurement protocols for 

2 carbon capture and sequestration systems, tak3 ing into consideration the regulations promul4 gated under section 813; 

5 ‘‘(K) require that reporting entities provide 

6 the data required under this paragraph in re7 ports submitted electronically to the Adminis8 trator, in such form and containing such infor9 mation as may be required by the Adminis10 trator; 

11 ‘‘(L) include requirements for keeping 

12 records supporting or related to, and protocols 

13 for auditing, submitted data; 

14 ‘‘(M) establish consistent policies for calcu15 lating carbon content and greenhouse gas emis16 sions for each type of fossil fuel with respect to 

17 which reporting is required; 

18 ‘‘(N) subsequent to implementation of poli19 cies developed under subparagraph (M), provide 

20 for immediate dissemination, to States, Indian 

21 tribes, and on the Internet, of all data reported 

22 under this section as soon as practicable after 

23 electronic audit by the Administrator and any 

24 resulting correction of data, except that data 
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1 shall not be disseminated under this subpara2 graph if— 

3 ‘‘(i) its nondissemination is vital to 

4 the national security of the United States, 

5 as determined by the President; or 

6 ‘‘(ii) it is confidential business infor7 mation that cannot be derived from infor8 mation that is otherwise publicly available 

9 and that would cause significant calculable 

10 competitive harm if published, except 

11 that— 

12 ‘‘(I) data relating to greenhouse 

13 gas emissions, including any upstream 

14 or verification data from reporting en15 tities, shall not be considered to be 

16 confidential business information; and 

17 ‘‘(II) data that is confidential 

18 business information shall be provided 

19 to a State or Indian tribe within 

20 whose jurisdiction the reporting entity 

21 is located, if the Administrator deter22 mines that such State or Indian tribe 

23 has in effect protections for confiden24 tial business information that are at 
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1 least as protective as protections ap2 plicable to the Federal Government; 

3 ‘‘(O) prescribe methods by which the Ad4 ministrator shall, in cases in which satisfactory 

5 data are not submitted to the Administrator for 

6 any period of time, estimate emission, produc7 tion, importation, manufacture, or delivery lev8 els— 

9 ‘‘(i) for covered entities with respect 

10 to greenhouse gas emissions, production, 

11 importation, manufacture, or delivery regu12 lated under this title to ensure that emis13 sions, production, importation, manufac14 ture, or deliveries are not underreported, 

15 and to create a strong incentive for meet16 ing data monitoring and reporting require17 ments— 

18 ‘‘(I) with a conservative estimate 

19 of the highest emission, production, 

20 importation, manufacture, or delivery 

21 levels that may have occurred during 

22 the period for which data are missing; 

23 or 

24 ‘‘(II) to the extent the Adminis25 trator considers appropriate, with an 
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1 estimate of such levels assuming the 

2 unit is emitting, producing, importing, 

3 manufacturing, or delivering at a 

4 maximum potential level during the 

5 period, in order to ensure that such 

6 levels are not underreported and to 

7 create a strong incentive for meeting 

8 data monitoring and reporting re9 quirements; and 

10 ‘‘(ii) for covered entities with respect 

11 to greenhouse gas emissions to which sec12 tion 722 does not apply and for other re13 porting entities, with a reasonable estimate 

14 of the emission, production, importation, 

15 manufacture, or delivery levels that may 

16 have occurred during the period for which 

17 data are missing; 

18 ‘‘(P) require the designation of a des19 ignated representative for each reporting entity; 

20 ‘‘(Q) require an appropriate certification, 

21 by the designated representative for the report22 ing entity, of accurate and complete accounting 

23 of greenhouse gas emissions, as determined by 

24 the Administrator; and 
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1 ‘‘(R) include requirements for other data 

2 necessary for accurate and complete accounting 

3 of greenhouse gas emissions, as determined by 

4 the Administrator, including data for quality 

5 assurance of monitoring systems, monitors and 

6 other measurement devices, and other data 

7 needed to verify reported emissions, production, 

8 importation, manufacture, or delivery. 

9 ‘‘(2) TIMING.— 

10 ‘‘(A) CALENDAR YEARS 2007 THROUGH

11 2010.—For a base period of calendar years 

12 2007 through 2010, each reporting entity shall 

13 submit annual data required under this section 

14 to the Administrator not later than March 31, 

15 2011. The Administrator may waive or modify 

16 reporting requirements for calendar years 2007 

17 through 2010 for categories of reporting enti18 ties to the extent that the Administrator deter19 mines that the reporting entities did not keep 

20 data or records necessary to meet reporting re21 quirements. The Administrator may, in addition 

22 to or in lieu of such requirements, collect infor23 mation on energy consumption and production. 

24 ‘‘(B) SUBSEQUENT CALENDAR YEARS.— 

25 For calendar year 2011 and each subsequent 
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1 calendar year, each reporting entity shall sub2 mit quarterly data required under this section 

3 to the Administrator not later than 60 days 

4 after the end of the applicable quarter, except 

5 when the data is already being reported to the 

6 Administrator on an earlier timeframe for an7 other program. 

8 ‘‘(3) WAIVER OF REPORTING REQUIREMENTS.— 

9 The Administrator may waive reporting require10 ments under this section for specific entities to the 

11 extent that the Administrator determines that suffi12 cient and equally or more reliable verified and timely 

13 data are available to the Administrator and the pub14 lic on the Internet under other mandatory statutory 

15 requirements. 

16 ‘‘(4) ALTERNATIVE THRESHOLD.—The Admin17 istrator may, by rule, establish applicability thresh18 olds for reporting under this section using alter19 native metrics and levels, provided that such metrics 

20 and levels are easier to administer and cover the 

21 same size and type of sources as the threshold de22 fined in this section. 

23 ‘‘(c) INTERRELATIONSHIP WITH OTHER SYSTEMS.— 

24 In developing the regulations issued under subsection (b), 

25 the Administrator shall take into account the work done 
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1 by the Climate Registry and other mandatory State or 

2 multistate programs. Such regulations shall include an ex3 planation of any major differences in approach between 

4 the system established under the regulations and such reg5 istries and programs. 

6 ‘‘PART C—PROGRAM RULES 

7 ‘‘SEC. 721. EMISSION ALLOWANCES. 

8 ‘‘(a) IN GENERAL.—The Administrator shall estab9 lish a separate quantity of emission allowances for each 

10 calendar year starting in 2012, in the amounts prescribed 

11 under subsection (e). 

12 ‘‘(b) IDENTIFICATION NUMBERS.—The Adminis13 trator shall assign to each emission allowance established 

14 under subsection (a) a unique identification number that 

15 includes the vintage year for that emission allowance. 

16 ‘‘(c) LEGAL STATUS OF EMISSION ALLOWANCES.— 

17 ‘‘(1) IN GENERAL.—An allowance established 

18 by the Administrator under this title does not con19 stitute a property right, nor does any offset credit 

20 or other instrument established or issued under the 

21 American Clean Energy and Security Act of 2009, 

22 and the amendments made thereby, for the purpose 

23 of demonstrating compliance with this title. 

24 ‘‘(2) TERMINATION OR LIMITATION.—Nothing 

25 in this Act or any other provision of law shall be 
724 

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1 construed to limit or alter the authority of the 

2 United States, including the Administrator acting 

3 pursuant to statutory authority, to terminate or 

4 limit allowances, offset credits, or term offset cred5 its. 

6 ‘‘(3) OTHER PROVISIONS UNAFFECTED.—Ex7 cept as otherwise specified in this Act, nothing in 

8 this Act relating to allowances, offset credits, or 

9 term offset credits established or issued under this 

10 title shall affect the application of any other provi11 sion of law to a covered entity, or the responsibility 

12 for a covered entity to comply with any such provi13 sion of law. 

14 ‘‘(d) SAVINGS PROVISION.—Nothing in this part shall 

15 be construed as requiring a change of any kind in any 

16 State law regulating electric utility rates and charges, or 

17 as affecting any State law regarding such State regula18 tion, or as limiting State regulation (including any 

19 prudency review) under such a State law. Nothing in this 

20 part shall be construed as modifying the Federal Power 

21 Act or as affecting the authority of the Federal Energy 

22 Regulatory Commission under that Act. Nothing in this 

23 part shall be construed to interfere with or impair any pro24 gram for competitive bidding for power supply in a State 

25 in which such program is established. 
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1 ‘‘(e) ALLOWANCES FOR EACH CALENDAR YEAR.— 

2 ‘‘(1) IN GENERAL.—Except as provided in para3 graph (2), the number of emission allowances estab4 lished by the Administrator under subsection (a) for 

5 each calendar year shall be as provided in the fol6 lowing 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 
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‘‘Calendar year Emission allowances (in millions) 

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 

1 ‘‘(2) REVISION.— 

2 ‘‘(A) IN GENERAL.—The Administrator 

3 may adjust, in accordance with subparagraph 

4 (B), the number of emission allowances estab5 lished pursuant to paragraph (1) if, after notice 

6 and an opportunity for public comment, the Ad7 ministrator determines that— 
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1 ‘‘(i) United States greenhouse gas 

2 emissions in 2005 were other than 7,206 

3 million metric tons carbon dioxide equiva4 lent; 

5 ‘‘(ii) if the requirements of this title 

6 for 2012 had been in effect in 2005, sec7 tion 722 would have required emission al8 lowances to be held for other than 66.2 

9 percent of United States greenhouse gas 

10 emissions in 2005; 

11 ‘‘(iii) if the requirements of this title 

12 for 2014 had been in effect in 2005, sec13 tion 722 would have required emission al14 lowances to be held for other than 75.7 

15 percent of United States greenhouse gas 

16 emissions in 2005; or 

17 ‘‘(iv) if the requirements of this title 

18 for 2016 had been in effect in 2005, sec19 tion 722 would have required emission al20 lowances to be held for other than 84.5 

21 percent United States greenhouse gas 

22 emissions in 2005. 

23 ‘‘(B) ADJUSTMENT FORMULA.— 

24 ‘‘(i) IN GENERAL.—If the Adminis25 trator adjusts under this paragraph the 
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•HR 2454 EH

1 number of emission allowances established 

2 pursuant to paragraph (1), the number of 

3 emission allowances the Administrator es4 tablishes for any given calendar year shall 

5 equal the product of— 

6 ‘‘(I) United States greenhouse 

7 gas emissions in 2005, expressed in 

8 tons of carbon dioxide equivalent; 

9 ‘‘(II) the percent of United 

10 States greenhouse gas emissions in 

11 2005, expressed in tons of carbon di12 oxide equivalent, that would have been 

13 subject to section 722 if the require14 ments of this title for the given cal15 endar year had been in effect in 2005; 

16 and 

17 ‘‘(III) the percentage set forth 

18 for that calendar year in section 

19 703(a), or determined under clause 

20 (ii) of this subparagraph. 

21 ‘‘(ii) TARGETS.—In applying the por22 tion of the formula in clause (i)(III) of this 

23 subparagraph, for calendar years for which 

24 a percentage is not listed in section 703(a), 

25 the Administrator shall use a uniform an-
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•HR 2454 EH

1 nual decline in the amount of emissions be2 tween the years that are specified. 

3 ‘‘(iii) CARBON DIOXIDE EQUIVALENT

4 VALUE.—If the Administrator adjusts 

5 under this paragraph the number of emis6 sion allowances established pursuant to 

7 paragraph (1), the Administrator shall use 

8 the carbon dioxide equivalent values estab9 lished pursuant to section 712. 

10 ‘‘(iv) LIMITATION ON ADJUSTMENT

11 TIMING.—Once a calendar year has start12 ed, the Administrator may not adjust the 

13 number of emission allowances to be estab14 lished for that calendar year. 

15 ‘‘(C) LIMITATION ON ADJUSTMENT AU16 THORITY.—The Administrator may adjust 

17 under this paragraph the number of emission 

18 allowances to be established pursuant to para19 graph (1) only once. 

20 ‘‘(f) COMPENSATORY ALLOWANCE.— 

21 ‘‘(1) IN GENERAL.—The regulations promul22 gated under subsection (h) shall provide for the es23 tablishment and distribution of compensatory allow24 ances for— 
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1 ‘‘(A) the destruction, in 2012 or later, of 

2 fluorinated gases that are greenhouse gases if— 

3 ‘‘(i) allowances or offset credits were 

4 retired for their production or importation; 

5 and 

6 ‘‘(ii) such gases are not required to be 

7 destroyed under any other provision of law; 

8 ‘‘(B) the nonemissive use, in 2012 or later, 

9 of petroleum-based or coal-based liquid or gas10 eous fuel, petroleum coke, natural gas liquid, or 

11 natural gas as a feedstock, if allowances or off12 set credits were retired for the greenhouse 

13 gases that would have been emitted from their 

14 combustion; and 

15 ‘‘(C) the conversionary use, in 2012 or 

16 later, of fluorinated gases in a manufacturing 

17 process, including semiconductor research or 

18 manufacturing, if allowances or offset credits 

19 were retired for the production or importation 

20 of such gas. 

21 ‘‘(2) ESTABLISHMENT AND DISTRIBUTION.— 

22 ‘‘(A) IN GENERAL.—Not later than 90 

23 days after the end of each calendar year, the 

24 Administrator shall establish and distribute to 

25 the entity taking the actions described in sub-
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1 paragraph (A), (B), or (C) of paragraph (1) a 

2 quantity of compensatory allowances equivalent 

3 to the number of tons of carbon dioxide equiva4 lent of avoided emissions achieved through such 

5 actions. In establishing the quantity of compen6 satory allowances, the Administrator shall take 

7 into account the carbon dioxide equivalent value 

8 of any greenhouse gas resulting from such ac9 tion. 

10 ‘‘(B) SOURCE OF ALLOWANCES.—Compen11 satory allowances established under this sub12 section shall not be emission allowances estab13 lished under subsection (a). 

14 ‘‘(C) IDENTIFICATION NUMBERS.—The 

15 Administrator shall assign to each compen16 satory allowance established under subpara17 graph (A) a unique identification number. 

18 ‘‘(3) DEFINITIONS.—For purposes of this sub19 section— 

20 ‘‘(A) the term ‘destruction’ means the con21 version of a greenhouse gas by thermal, chem22 ical, or other means to another gas or set of 

23 gases with little or no carbon dioxide equivalent 

24 value; 
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1 ‘‘(B) the term ‘nonemissive use’ means the 

2 use of fossil fuel as a feedstock in an industrial 

3 or manufacturing process to the extent that 

4 greenhouse gases are not emitted from such 

5 process, and to the extent that the products of 

6 such process are not intended for use as, or to 

7 be contained in, a fuel; and 

8 ‘‘(C) the term ‘conversionary use’ means 

9 the conversion during research or manufac10 turing of a fluorinated gas into another green11 house gas or set of gases with a lower carbon 

12 dioxide equivalent value. 

13 ‘‘(4) FEEDSTOCK EMISSIONS STUDY.— 

14 ‘‘(A) The Administrator may conduct a 

15 study to determine the extent to which petro16 leum-based or coal-based liquid or gaseous fuel, 

17 petroleum coke, natural gas liquid, or natural 

18 gas are used as feedstocks in manufacturing 

19 processes to produce products and the green20 house gas emissions resulting from such uses. 

21 ‘‘(B) If as a result of such a study, the Ad22 ministrator determines that the use of such 

23 products by noncovered sources results in sub24 stantial emissions of greenhouse gases and that 

25 such emissions have not been adequately ad-
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•HR 2454 EH

1 dressed under other requirements of this Act, 

2 the Administrator may, after notice and com3 ment rulemaking, promulgate a regulation re4 ducing compensatory allowances commen5 surately if doing so will not result in shifting 

6 such emissions to noncovered sources. 

7 ‘‘(g) FLUORINATED GASES ASSESSMENT.—No later 

8 than March 31, 2014, the Administrator shall complete 

9 an assessment of the regulation of non-HFC fluorinated 

10 gases under this title to determine whether the most ap11 propriate point of regulation is at the gas manufacturer 

12 or importer level, or at the source of emissions down13 stream. If the Administrator determines, based on consid14 eration of environmental effectiveness, cost effectiveness, 

15 administrative feasibility, extent of coverage of emissions, 

16 competitiveness and other relevant considerations con17 sistent with the purposes of this title, that emissions of 

18 non-HFC fluorinated gases can best be regulated by desig19 nating downstream emission sources as covered entities 

20 with compliance obligations under section 722, the Admin21 istrator shall, after notice and comment rulemaking, 

22 change the definition of covered entity and the compliance 

23 obligations under section 722 with respect to non-HFC 

24 fluorinated gases accordingly, consistent with the purposes 

25 of this title, and establish such other requirements as are 
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•HR 2454 EH

1 necessary to ensure compliance for such entities with the 

2 requirements of this title. 

3 ‘‘(h) REGULATIONS.—Not later than 24 months after 

4 the date of enactment of this title, the Administrator shall 

5 promulgate regulations to carry out the provisions of this 

6 title. 

7 ‘‘SEC. 722. PROHIBITION OF EXCESS EMISSIONS. 

8 ‘‘(a) PROHIBITION.—Except as provided in sub9 section (c), effective January 1, 2012, each covered entity 

10 is prohibited from emitting greenhouse gases and having 

11 attributable greenhouse gas emissions, in combination, in 

12 excess of its allowable emissions level. A covered entity’s 

13 allowable emissions level for each calendar year is the 

14 number of emission allowances (or offset credits or other 

15 allowances as provided in subsection (d)) it holds as of 

16 12:01 a.m. on April 1 (or a later date established by the 

17 Administrator under subsection (j)) of the following cal18 endar year. 

19 ‘‘(b) METHODS OF DEMONSTRATING COMPLIANCE.— 

20 Except as otherwise provided in this section, the owner 

21 or operator of a covered entity shall not be considered to 

22 be in compliance with the prohibition in subsection (a) un23 less, as of 12:01 a.m. on April 1 (or a later date estab24 lished by the Administrator under subsection (j)) of each 

25 calendar year starting in 2013, the owner or operator 
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•HR 2454 EH

1 holds a quantity of emission allowances (or offset credits 

2 or other allowances as provided in subsection (d)) at least 

3 as great as the quantity calculated as follows: 

4 ‘‘(1) ELECTRICITY SOURCES.—For a covered 

5 entity described in section 700(13)(A), 1 emission 

6 allowance for each ton of carbon dioxide equivalent 

7 of greenhouse gas that such covered entity emitted 

8 in the previous calendar year, excluding emissions 

9 resulting from the combustion of— 

10 ‘‘(A) petroleum-based or coal-based liquid 

11 fuel; 

12 ‘‘(B) natural gas liquid; 

13 ‘‘(C) renewable biomass or gas derived 

14 from renewable biomass; or 

15 ‘‘(D) petroleum coke or gas derived from 

16 petroleum coke. 

17 ‘‘(2) FUEL PRODUCERS AND IMPORTERS.—For 

18 a covered entity described in section 700(13)(B), 1 

19 emission allowance for each ton of carbon dioxide 

20 equivalent of greenhouse gas that would be emitted 

21 from the combustion of any petroleum-based or coal22 based liquid fuel, petroleum coke, or natural gas liq23 uid, produced or imported by such covered entity 

24 during the previous calendar year for sale or dis25 tribution in interstate commerce, assuming no cap-
736 

•HR 2454 EH

1 ture and sequestration of any greenhouse gas emis2 sions. 

3 ‘‘(3) INDUSTRIAL GAS PRODUCERS AND IM4 PORTERS.—For a covered entity described in section 

5 700(13)(C), 1 emission allowance for each ton of 

6 carbon dioxide equivalent of fossil fuel-based carbon 

7 dioxide, nitrous oxide, or any other fluorinated gas 

8 that is a greenhouse gas (except for nitrogen 

9 trifluoride), or any combination thereof, produced or 

10 imported by such covered entity during the previous 

11 calendar year for sale or distribution in interstate 

12 commerce. 

13 ‘‘(4) NITROGEN TRIFLUORIDE SOURCES.—For 

14 a covered entity described in section 700(13)(D), 1 

15 emission allowance for each ton of carbon dioxide 

16 equivalent of nitrogen trifluoride that such covered 

17 entity emitted in the previous calendar year. 

18 ‘‘(5) GEOLOGICAL SEQUESTRATION SITES.—For 

19 a covered entity described in section 700(13)(E), 1 

20 emission allowance for each ton of carbon dioxide 

21 equivalent of greenhouse gas that such covered enti22 ty emitted in the previous calendar year. 

23 ‘‘(6) INDUSTRIAL STATIONARY SOURCES.—For 

24 a covered entity described in section 700(13)(F), 

25 (G), or (H), 1 emission allowance for each ton of 
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•HR 2454 EH

1 carbon dioxide equivalent of greenhouse gas that 

2 such covered entity emitted in the previous calendar 

3 year, excluding emissions resulting from— 

4 ‘‘(A) the combustion of petroleum-based or 

5 coal-based liquid fuel; 

6 ‘‘(B) the combustion of natural gas liquid; 

7 ‘‘(C) the combustion of renewable biomass 

8 or gas derived from renewable biomass; 

9 ‘‘(D) the combustion of petroleum coke or 

10 gas derived from petroleum coke; or 

11 ‘‘(E) the use of any fluorinated gas that is 

12 a greenhouse gas purchased for use at that cov13 ered entity, except for nitrogen trifluoride. 

14 ‘‘(7) INDUSTRIAL FOSSIL FUEL-FIRED COMBUS15 TION DEVICES.—For a covered entity described in 

16 section 700(13)(I), 1 emission allowance for each 

17 ton of carbon dioxide equivalent of greenhouse gas 

18 that the devices emitted in the previous calendar 

19 year, excluding emissions resulting from the combus20 tion of— 

21 ‘‘(A) petroleum-based or coal-based liquid 

22 fuel; 

23 ‘‘(B) natural gas liquid; 

24 ‘‘(C) renewable biomass or gas derived 

25 from renewable biomass; or 
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•HR 2454 EH

1 ‘‘(D) petroleum coke or gas derived from 

2 petroleum coke. 

3 ‘‘(8) NATURAL GAS LOCAL DISTRIBUTION COM4 PANIES.—For a covered entity described in section 

5 700(13)(J), 1 emission allowance for each ton of 

6 carbon dioxide equivalent of greenhouse gas that 

7 would be emitted from the combustion of the natural 

8 gas, and any other gas meeting the specifications for 

9 commingling with natural gas for purposes of deliv10 ery, that such entity delivered during the previous 

11 calendar year to customers that are not covered enti12 ties, assuming no capture and sequestration of that 

13 greenhouse gas. 

14 ‘‘(9) ALGAE-BASED FUELS.—Where carbon di15 oxide (or another greenhouse gas) generated by a 

16 covered entity is used as an input in the production 

17 of algae-based fuels, the Administrator shall ensure 

18 that emission allowances are required to be held ei19 ther for the carbon dioxide generated by a covered 

20 entity that is used to grow the algae or for the por21 tion of the carbon dioxide emitted from combustion 

22 of the fuel produced from such algae that is attrib23 utable to carbon dioxide generated by a covered enti24 ty, but not for both. 
739 

•HR 2454 EH

1 ‘‘(10) FUGITIVE EMISSIONS.—The greenhouse 

2 gas emissions to which paragraphs (1), (4), (6), and 

3 (7) apply shall not include fugitive emissions of 

4 greenhouse gas, except to the extent the Adminis5 trator determines that data on the carbon dioxide 

6 equivalent value of greenhouse gas in the fugitive 

7 emissions can be provided with sufficient precision, 

8 reliability, accessibility, and timeliness to ensure the 

9 integrity of emission allowances, the allowance track10 ing system, and the cap on emissions. 

11 ‘‘(11) EXPORT EXEMPTION.—This section shall 

12 not apply to any petroleum-based or coal-based liq13 uid fuel, petroleum coke, natural gas liquid, fossil 

14 fuel-based carbon dioxide, nitrous oxide, or 

15 fluorinated gas that is exported for sale or use. 

16 ‘‘(12) NATURAL GAS LIQUIDS.—For natural gas 

17 liquids, the covered entity subject to the requirement 

18 stated in paragraph (2) shall be the owner of the 

19 natural gas liquids at the point the natural gas liq20 uids are separated into merchantable products. 

21 ‘‘(13) APPLICATION OF MULTIPLE PARA22 GRAPHS.—For a covered entity to which more than 

23 1 of paragraphs (1) through (8) apply, all applicable 

24 paragraphs shall apply, except that not more than 1 
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•HR 2454 EH

1 emission allowance shall be required for the same 

2 emission. 

3 ‘‘(14) APPLICATION TO FRACTIONS OF TONS.— 

4 In applying paragraphs (1) through (8), any amount 

5 less than 1 ton of carbon dioxide equivalent of emis6 sions or attributable greenhouse gas emissions shall 

7 be treated as 1 ton of such carbon dioxide equiva8 lent. 

9 ‘‘(c) PHASE-IN OF PROHIBITION.— 

10 ‘‘(1) INDUSTRIAL STATIONARY SOURCES.—The 

11 prohibition under subsection (a) shall first apply to 

12 a covered entity described in section 700(13)(D), 

13 (F), (G), (H), or (I), with respect to emissions oc14 curring during calendar year 2014. 

15 ‘‘(2) NATURAL GAS LOCAL DISTRIBUTION COM16 PANIES.—The prohibition under subsection (a) shall 

17 first apply to a covered entity described in section 

18 700(13)(J) with respect to deliveries occurring dur19 ing calendar year 2016. 

20 ‘‘(d) ADDITIONAL METHODS.—In addition to using 

21 the method of compliance described in subsection (b), a 

22 covered entity may do the following: 

23 ‘‘(1) OFFSET CREDITS.— 

24 ‘‘(A) IN GENERAL.—Covered entities col25 lectively may, in accordance with this para-
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1 graph, use offset credits to demonstrate compli2 ance for up to a maximum of 2 billion tons of 

3 greenhouse gas emissions annually. The ability 

4 to demonstrate compliance with offset credits 

5 shall be divided pro rata among covered entities 

6 by allowing each covered entity to satisfy a per7 centage of the number of allowances required to 

8 be held under subsection (b) to demonstrate 

9 compliance by holding 1 domestic offset credit 

10 or 1.25 international offset credits in lieu of an 

11 emission allowance, except as provided in sub12 paragraph (D). 

13 ‘‘(B) APPLICABLE PERCENTAGE.—The 

14 percentage referred to in subparagraph (A) for 

15 a given calendar year shall be determined by di16 viding 2 billion by the sum of 2 billion plus the 

17 number of emission allowances established 

18 under section 721(a) for the previous year, and 

19 multiplying that number by 100. Not more than 

20 one half of the applicable percentage under this 

21 paragraph may be used by holding domestic off22 set credits, and not more than one half of the 

23 applicable percentage under this paragraph may 

24 be used by holding international offset credits, 

25 except as provided in subparagraph (C). 
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1 ‘‘(C) MODIFIED PERCENTAGES.—If the 

2 Administrator determines that domestic offset 

3 credits available for use in demonstrating com4 pliance in any calendar year at domestic offset 

5 prices generally equal to or less than emission 

6 allowance prices, are likely to offset less than 

7 0.9 billion tons of greenhouse gas emissions 

8 (measured in tons of carbon dioxide equiva9 lents), for purposes of compliance demonstra10 tion in that year the Administrator shall— 

11 ‘‘(i) increase the percentage of emis12 sions that can be offset through the use of 

13 international offset credits to reflect the 

14 amount that 1.0 billion exceeds the number 

15 of domestic offset credits the Adminis16 trator determines is available, at prices 

17 generally equal to or less than emission al18 lowance prices, for that year, up to a max19 imum of 0.5 billion tons of greenhouse gas 

20 emissions; and 

21 ‘‘(ii) decrease the percentage of emis22 sions that can be offset through the use of 

23 domestic offset credits by the same 

24 amount. 
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1 ‘‘(D) INTERNATIONAL OFFSET CREDITS.— 

2 Notwithstanding subparagraph (A), to dem3 onstrate compliance prior to calendar year 

4 2018, a covered entity may use 1 international 

5 offset credit in lieu of an emission allowance up 

6 to the amount permitted under this paragraph. 

7 ‘‘(E) PRESIDENT’S RECOMMENDATION.— 

8 The President may make a recommendation to 

9 Congress as to whether the number 2 billion 

10 specified in subparagraphs (A) and (B) should 

11 be increased or decreased. 

12 ‘‘(2) TERM OFFSET CREDITS.— 

13 ‘‘(A) IN GENERAL.—Covered entities may, 

14 in accordance with this paragraph, use non-ex15 pired term offset credits instead of domestic 

16 offset credits for purposes of temporarily dem17 onstrating compliance with this section. 

18 ‘‘(B) AMOUNT.—The combined quantity of 

19 term offset credits and domestic offset credits 

20 used by a covered entity to demonstrate compli21 ance for its emissions or attributable green22 house gas emissions in any given year shall not 

23 exceed the quantity of domestic offset credits 

24 that a covered entity is entitled to use for that 
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1 year to demonstrate compliance in accordance 

2 with paragraph (1). 

3 ‘‘(C) EXPIRATION.—A term offset credit 

4 shall expire in the year after its term ends. The 

5 term of a term offset credit shall be calculated 

6 by adding to the year of issuance the number 

7 of years equal to the length of the crediting pe8 riod for the practice or project for which the 

9 term offset credit was issued, but in no case 

10 shall be later than the date 5 years from the 

11 date of issuance. 

12 ‘‘(D) DEMONSTRATING COMPLIANCE UPON

13 EXPIRATION OF TERM OFFSET CREDIT.—With 

14 respect to the emissions for which a covered en15 tity is using term offset credits to demonstrate 

16 compliance temporarily with this section, the 

17 owner or operator of a covered entity shall not 

18 be considered to be in compliance with the pro19 hibition in subsection (a) unless, as of 12:01 

20 a.m. on April 1 (or a later date established by 

21 the Administrator under subsection (j)) of the 

22 calendar year in which a term offset credit ex23 pires, the owner or operator holds— 
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1 ‘‘(i) for purposes of finally dem2 onstrating compliance, an allowance or a 

3 domestic offset credit; or 

4 ‘‘(ii) for purposes of temporarily dem5 onstrating compliance, a non-expired term 

6 offset credit. 

7 Domestic offset credits used for purposes of fi8 nally demonstrating compliance under this sub9 paragraph shall not be subject to the percent10 age limitations in subparagraph (B). 

11 ‘‘(E) FINANCIAL ASSURANCE.—A covered 

12 entity may not use a term offset credit to dem13 onstrate compliance temporarily unless it simul14 taneously provides to the Administrator finan15 cial assurance that, at the end of the term off16 set credit’s crediting term, the covered entity 

17 will have sufficient resources to obtain the 

18 quantity of allowances or credits necessary to 

19 demonstrate final compliance. The Adminis20 trator shall issue regulations establishing re21 quirements for such financial assurance, which 

22 shall take into account the increased risk asso23 ciated with longer crediting terms. These regu24 lations shall take into account the total number 

25 of tons of carbon dioxide equivalent of green-
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1 house gas emissions for which a covered entity 

2 is demonstrating compliance temporarily, and 

3 may set a limit on this amount. In the event 

4 that a covered entity that used term offset cred5 its to demonstrate compliance temporarily fails 

6 to meet the requirements of subparagraph (D) 

7 at the end of the term offset credits’ crediting 

8 term, if the financial assurance mechanism fails 

9 to provide to the Administrator the number of 

10 allowances or offset credits for which the cred11 iting term has expired, then the Administrator 

12 shall retire that number of allowances with the 

13 vintage year 2 years after the year in which the 

14 term offset credit expires in the same amount. 

15 Allowances so retired shall not be counted as 

16 emission allowances established for that cal17 endar year under section 721(a). 

18 ‘‘(3) INTERNATIONAL EMISSION ALLOW19 ANCES.—To demonstrate compliance, a covered enti20 ty may hold an international emission allowance in 

21 lieu of an emission allowance, except as modified 

22 under section 728(d). 

23 ‘‘(4) COMPENSATORY ALLOWANCES.—To dem24 onstrate compliance, a covered entity may hold a 
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1 compensatory allowance obtained under section 

2 721(f) in lieu of an emission allowance. 

3 ‘‘(e) RETIREMENT OF ALLOWANCES AND CREDITS.— 

4 As soon as practicable after a deadline established for cov5 ered entities to demonstrate compliance with this title, the 

6 Administrator shall retire the quantity of allowances or 

7 credits required to be held under this title. 

8 ‘‘(f) ALTERNATIVE METRICS.—For categories of cov9 ered entities described in subparagraph (B), (C), (D), (G), 

10 (H), or (I) of section 700(13), the Administrator may, by 

11 rule, establish an applicability threshold for inclusion 

12 under those subparagraphs using an alternative metric 

13 and level, provided that such metric and level are easier 

14 to administer and cover the same size and type of sources 

15 as the threshold defined in such subparagraphs. 

16 ‘‘(g) THRESHOLD REVIEW.—For each category of 

17 covered entities described in subparagraph (B), (C), (D), 

18 (G), (H), or (I) of section 700(13), the Administrator 

19 shall, in 2020 and once every 8 years thereafter, review 

20 the carbon dioxide equivalent emission threshold that is 

21 used to define covered entities in such category. After con22 sideration of— 

23 ‘‘(1) emissions from covered entities in such 

24 category, and from other entities of the same type 

25 that emit less than the threshold amount for the cat-
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1 egory (including emission sources that commence op2 eration after the date of enactment of this title that 

3 are not covered entities); and 

4 ‘‘(2) whether greater greenhouse gas emission 

5 reductions can be cost-effectively achieved by low6 ering the applicable threshold, 

7 the Administrator may by rule lower such threshold to not 

8 less than 10,000 tons of carbon dioxide equivalent emis9 sions. In determining the cost effectiveness of potential re10 ductions from lowering the threshold for covered entities, 

11 the Administrator shall consider alternative regulatory 

12 greenhouse gas programs, including setting standards 

13 under other titles of this Act. 

14 ‘‘(h) DESIGNATED REPRESENTATIVES.—The regula15 tions promulgated under section 721(h) shall require that 

16 each covered entity, and each entity holding allowances or 

17 offset credits or receiving allowances or offset credits from 

18 the Administrator under this title, submit to the Adminis19 trator a certificate of representation designating a des20 ignated representative. 

21 ‘‘(i) EDUCATION AND OUTREACH.— 

22 ‘‘(1) IN GENERAL.—The Administrator shall es23 tablish and carry out a program of education and 

24 outreach to assist covered entities, especially entities 

25 having little experience with environmental regu-
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1 latory requirements similar or comparable to those 

2 under this title, in preparing to meet the compliance 

3 obligations of this title. Such program shall include 

4 education with respect to using markets to effec5 tively achieve such compliance. 

6 ‘‘(2) FAILURE TO RECEIVE INFORMATION.—A 

7 failure to receive information or assistance under 

8 this subsection may not be used as a defense against 

9 an allegation of any violation of this title. 

10 ‘‘(j) ADJUSTMENT OF DEADLINE.—The Adminis11 trator may, by rule, establish a deadline for demonstrating 

12 compliance, for a calendar year, later than the date pro13 vided in subsection (a), as necessary to ensure the avail14 ability of emissions data, but in no event shall the deadline 

15 be later than June 1. 

16 ‘‘(k) NOTICE REQUIREMENT FOR COVERED ENTI17 TIES RECEIVING NATURAL GAS FROM NATURAL GAS

18 LOCAL DISTRIBUTION COMPANIES.—The owner or oper19 ator of a covered entity that takes delivery of natural gas 

20 from a natural gas local distribution company shall, not 

21 later than September 1 of each calendar year, notify such 

22 natural gas local distribution company in writing that 

23 such entity will qualify as a covered entity under this title 

24 for that calendar year. 
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1 ‘‘(l) COMPLIANCE OBLIGATION.—For purposes of 

2 this title, the year of a compliance obligation is the year 

3 in which compliance is determined, not the year in which 

4 the greenhouse gas emissions occur or the covered entity 

5 has attributable greenhouse gas emissions. 

6 ‘‘SEC. 723. PENALTY FOR NONCOMPLIANCE. 

7 ‘‘(a) ENFORCEMENT.—A violation of any prohibition 

8 of, requirement of, or regulation promulgated pursuant to 

9 this title shall be a violation of this Act. It shall be a viola10 tion of this Act for a covered entity to emit greenhouse 

11 gases and have attributable greenhouse gas emissions, in 

12 combination, in excess of its allowable emissions level as 

13 provided in section 722(a). Each ton of carbon dioxide 

14 equivalent for which a covered entity fails to demonstrate 

15 compliance under section 722 shall be a separate violation. 

16 In the event that a covered entity fails to demonstrate 

17 compliance at the expiration of a term offset credit’s cred18 iting term as required by section 722(d)(2)(D), the year 

19 of the violation shall be the year in which the term offset 

20 credit expires. 

21 ‘‘(b) EXCESS EMISSIONS PENALTY.— 

22 ‘‘(1) IN GENERAL.—The owner or operator of 

23 any covered entity that fails for any year to comply, 

24 on the deadline described in section 722(a), (d)(2), 

25 or (j), shall be liable for payment to the Adminis-
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1 trator of an excess emissions penalty in the amount 

2 described in paragraph (2). 

3 ‘‘(2) AMOUNT.—The amount of an excess emis4 sions penalty required to be paid under paragraph 

5 (1) shall be equal to the product obtained by multi6 plying— 

7 ‘‘(A) the tons of carbon dioxide equivalent 

8 of greenhouse gas emissions or attributable 

9 greenhouse gas emissions for which the owner 

10 or operator of a covered entity failed to dem11 onstrate compliance under section 722 on the 

12 deadline; by 

13 ‘‘(B) twice the auction clearing price for 

14 the earliest vintage year emission allowances in 

15 the last auction carried out pursuant to section 

16 791 before such deadline. 

17 ‘‘(3) TIMING.—An excess emissions penalty re18 quired under this subsection shall be immediately 

19 due and payable to the Administrator, without de20 mand, in accordance with regulations promulgated 

21 by the Administrator, which shall be issued not later 

22 than 2 years after the date of enactment of this 

23 title. 

24 ‘‘(4) NO EFFECT ON LIABILITY.—An excess 

25 emissions penalty due and payable by the owners or 
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1 operators of a covered entity under this subsection 

2 shall not diminish the liability of the owners or oper3 ators for any fine, penalty, or assessment against 

4 the owners or operators for the same violation under 

5 any other provision of this Act or any other law. 

6 ‘‘(c) EXCESS EMISSIONS ALLOWANCES.—The owner 

7 or operator of a covered entity that fails for any year to 

8 comply on the deadline described in section 722(a), (d)(2), 

9 or (j) shall be liable to offset the covered entity’s excess 

10 combination of greenhouse gases emitted and attributable 

11 greenhouse gas emissions by an equal quantity of emission 

12 allowances during the following calendar year, or such 

13 longer period as the Administrator may prescribe. During 

14 the year in which the covered entity failed to comply, or 

15 any year thereafter, the Administrator may deduct the 

16 emission allowances required under this subsection to off17 set the covered entity’s excess greenhouse gas emissions 

18 or attributable greenhouse gas emissions. 

19 ‘‘SEC. 724. TRADING. 

20 ‘‘(a) PERMITTED TRANSACTIONS.—Except as other21 wise provided in this title, the lawful holder of an emission 

22 allowance, compensatory allowance, or offset credit may, 

23 without restriction, sell, exchange, transfer, hold for com24 pliance in accordance with section 722, or request that the 
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1 Administrator retire the emission allowance, compensatory 

2 allowance, or offset credit. 

3 ‘‘(b) NO RESTRICTION ON TRANSACTIONS.—The 

4 privilege of purchasing, holding, selling, exchanging, 

5 transferring, and requesting retirement of emission allow6 ances, compensatory allowances, or offset credits shall not 

7 be restricted to the owners and operators of covered enti8 ties, except as otherwise provided in this title. 

9 ‘‘(c) EFFECTIVENESS OF ALLOWANCE TRANS10 FERS.—No transfer of an allowance, offset credit, or term 

11 offset credit shall be effective for purposes of this title 

12 until a certification of the transfer, signed by the des13 ignated representative of the transferor, is received and 

14 recorded by the Administrator in accordance with regula15 tions promulgated under section 721(h). 

16 ‘‘(d) ALLOWANCE TRACKING SYSTEM.—The regula17 tions promulgated under section 721(h) shall include a 

18 system for issuing, recording, holding, and tracking allow19 ances, offset credits, and term offset credits that shall 

20 specify all necessary procedures and requirements for an 

21 orderly and competitive functioning of the allowance and 

22 offset credit markets. Such regulations shall provide for 

23 appropriate publication of the information in the system 

24 on the Internet. 
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1 ‘‘SEC. 725. BANKING AND BORROWING. 

2 ‘‘(a) BANKING.—An emission allowance may be used 

3 to comply with section 722 or section 723 for emissions 

4 in— 

5 ‘‘(1) the vintage year for the allowance; or 

6 ‘‘(2) any calendar year subsequent to the vin7 tage year for the allowance. 

8 ‘‘(b) EXPIRATION.— 

9 ‘‘(1) REGULATIONS.—The Administrator may 

10 establish by regulation criteria and procedures for 

11 determining whether, and for implementing a deter12 mination that, the expiration of an allowance, offset 

13 credit, or term offset credit, established or issued 

14 under the American Clean Energy and Security Act 

15 of 2009 or the amendments made thereby, or expira16 tion of the ability to use an international emission 

17 allowance to comply with section 722, is necessary to 

18 ensure the authenticity and integrity of allowances, 

19 offset credits, or term offset credits or the allowance 

20 tracking system. 

21 ‘‘(2) GENERAL RULE.—An allowance, offset 

22 credit, or term offset credit, established or issued 

23 under the American Clean Energy and Security Act 

24 of 2009 or the amendments made thereby, shall not 

25 expire unless— 
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1 ‘‘(A) it is retired by the Administrator pur2 suant to this title; or 

3 ‘‘(B) it is determined to expire or to have 

4 expired by a specific date by the Administrator 

5 in accordance with regulations promulgated 

6 under paragraph (1). 

7 ‘‘(3) INTERNATIONAL EMISSION ALLOW8 ANCES.—The ability to use an international emission 

9 allowance to comply with section 722 shall not ex10 pire unless— 

11 ‘‘(A) the allowance is retired by the Ad12 ministrator pursuant to this title; or 

13 ‘‘(B) the ability to use such allowance to 

14 meet such compliance obligation requirements is 

15 determined to expire or to have expired by a 

16 specific date by the Administrator in accord17 ance with regulations promulgated under para18 graph (1). 

19 ‘‘(c) BORROWING FUTURE VINTAGE YEAR ALLOW20 ANCES.— 

21 ‘‘(1) BORROWING WITHOUT INTEREST.—In ad22 dition to the uses described in subsection (a), an 

23 emission allowance may be used to demonstrate com24 pliance under section 722 or comply with section 

25 723 for emissions, production, importation, manu-
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1 facture, or deliveries in the calendar year imme2 diately preceding the vintage year for the allowance. 

3 ‘‘(2) BORROWING WITH INTEREST.— 

4 ‘‘(A) IN GENERAL.—A covered entity may 

5 demonstrate compliance under section 722 in a 

6 specific calendar year for up to 15 percent of 

7 its emissions by holding emission allowances 

8 with a vintage year 1 to 5 years later than that 

9 calendar year. 

10 ‘‘(B) LIMITATIONS.—An emission allow11 ance borrowed pursuant to this paragraph shall 

12 be an emission allowance that is established by 

13 the Administrator for a specific future calendar 

14 year under section 721(a) and that is held by 

15 the borrower. 

16 ‘‘(C) PREPAYMENT OF INTEREST.—For 

17 each emission allowance that an owner or oper18 ator of a covered entity borrows pursuant to 

19 this paragraph, such owner or operator shall, at 

20 the time it borrows the allowance, hold for re21 tirement by the Administrator, and the Admin22 istrator shall retire, a quantity of emission al23 lowances that is equal to the product obtained 

24 by multiplying— 

25 ‘‘(i) 0.08; by 
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1 ‘‘(ii) the number of years between the 

2 calendar year in which the allowance is 

3 being used to satisfy a compliance obliga4 tion and the vintage year of the allowance. 

5 ‘‘SEC. 726. STRATEGIC RESERVE. 

6 ‘‘(a) STRATEGIC RESERVE AUCTIONS.— 

7 ‘‘(1) IN GENERAL.—Once each quarter of each 

8 calendar year for which allowances are established 

9 under section 721(a), the Administrator shall auc10 tion strategic reserve allowances. 

11 ‘‘(2) RESTRICTION TO COVERED ENTITIES.—In 

12 each auction conducted under paragraph (1), only 

13 covered entities that the Administrator expects will 

14 be required to comply with section 722 in the fol15 lowing calendar year shall be eligible to make pur16 chases. 

17 ‘‘(b) POOL OF EMISSION ALLOWANCES FOR STRA18 TEGIC RESERVE AUCTIONS.— 

19 ‘‘(1) FILLING THE STRATEGIC RESERVE INI20 TIALLY.— 

21 ‘‘(A) IN GENERAL.—The Administrator 

22 shall, not later than 2 years after the date of 

23 enactment of this title, establish a strategic re24 serve account, and shall place in that account 

25 an amount of emission allowances established 
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1 under section 721(a) for each calendar year 

2 from 2012 through 2050 in the amounts speci3 fied in subparagraph (B) of this paragraph. 

4 ‘‘(B) AMOUNT.—The amount referred to in 

5 subparagraph (A) shall be— 

6 ‘‘(i) for each of calendar years 2012 

7 through 2019, 1 percent of the quantity of 

8 emission allowances established for that 

9 year pursuant to section 721(e)(1); 

10 ‘‘(ii) for each of calendar years 2020 

11 through 2029, 2 percent of the quantity of 

12 emission allowances established for that 

13 year pursuant to section 721(e)(1); and 

14 ‘‘(iii) for each of calendar years 2030 

15 through 2050, 3 percent of the quantity of 

16 emission allowances established for that 

17 year pursuant to section 721(e)(1). 

18 ‘‘(C) EFFECT ON OTHER PROVISIONS.— 

19 Any provision in this title (except for subpara20 graph (B) of this paragraph) that refers to a 

21 quantity or percentage of the emission allow22 ances established for a calendar year under sec23 tion 721(a) shall be considered to refer to the 

24 amount of emission allowances as determined 

25 pursuant to section 721(e), less any emission 
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1 allowances established for that year that are 

2 placed in the strategic reserve account under 

3 this paragraph. 

4 ‘‘(2) SUPPLEMENTING THE STRATEGIC RE5 SERVE.—The Administrator shall also— 

6 ‘‘(A) at the end of each calendar year, 

7 transfer to the strategic reserve account each 

8 emission allowance that was offered for sale but 

9 not sold at any auction conducted under section 

10 791; and 

11 ‘‘(B) deposit emission allowances estab12 lished under subsection (g) from auction pro13 ceeds into the strategic reserve, to the extent 

14 necessary to maintain the reserve at its original 

15 size. 

16 ‘‘(c) MINIMUM STRATEGIC RESERVE AUCTION

17 PRICE.— 

18 ‘‘(1) IN GENERAL.—At each strategic reserve 

19 auction, the Administrator shall offer emission al20 lowances for sale beginning at a minimum price per 

21 emission allowance, which shall be known as the 

22 ‘minimum strategic reserve auction price’. 

23 ‘‘(2) INITIAL MINIMUM STRATEGIC RESERVE

24 AUCTION PRICES.—The minimum strategic reserve 

25 auction price shall be $28 (in constant 2009 dollars) 
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1 for the strategic reserve auctions held in 2012. For 

2 the strategic reserve auctions held in 2013 and 

3 2014, the minimum strategic reserve auction price 

4 shall be the strategic reserve auction price for the 

5 previous year increased by 5 percent plus the rate of 

6 inflation (as measured by the Consumer Price Index 

7 for All Urban Consumers). 

8 ‘‘(3) MINIMUM STRATEGIC RESERVE AUCTION

9 PRICE IN SUBSEQUENT YEARS.—For each strategic 

10 reserve auction held in 2015 and each year there11 after, the minimum strategic reserve auction price 

12 shall be 60 percent above a rolling 36-month average 

13 of the daily closing price for that year’s emission al14 lowance vintage as reported on registered carbon 

15 trading facilities, calculated using constant dollars. 

16 ‘‘(d) QUANTITY OF EMISSION ALLOWANCES RE17 LEASED FROM THE STRATEGIC RESERVE.— 

18 ‘‘(1) INITIAL LIMITS.—For each of calendar 

19 years 2012 through 2016, the annual limit on the 

20 number of emission allowances from the strategic re21 serve account that may be auctioned is an amount 

22 equal to 5 percent of the emission allowances estab23 lished for that calendar year under section 721(a). 

24 This limit does not apply to international offset 
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1 credits sold on consignment pursuant to subsection 

2 (h). 

3 ‘‘(2) LIMITS IN SUBSEQUENT YEARS.—For cal4 endar year 2017 and each year thereafter, the an5 nual limit on the number of emission allowances 

6 from the strategic reserve account that may be auc7 tioned is an amount equal to 10 percent of the emis8 sion allowances established for that calendar year 

9 under section 721(a). This limit does not apply to 

10 international offset credits sold on consignment pur11 suant to subsection (h). 

12 ‘‘(3) ALLOCATION OF LIMITATION.—One-fourth 

13 of each year’s annual strategic reserve auction limit 

14 under this subsection shall be made available for 

15 auction in each quarter. Any allowances from the 

16 strategic reserve account that are made available for 

17 sale in a quarterly auction and not sold shall be 

18 rolled over and added to the quantity available for 

19 sale in the following quarter, except that allowances 

20 not sold at auction in the fourth quarter of a year 

21 shall not be rolled over to the following calendar 

22 year’s auctions, but shall be returned to the stra23 tegic reserve account. 

24 ‘‘(e) PURCHASE LIMIT.— 
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1 ‘‘(1) IN GENERAL.—Except as provided in para2 graph (2) or (3), the annual number of emission al3 lowances that a covered entity may purchase at the 

4 strategic reserve auctions in each calendar year shall 

5 not exceed 20 percent of the covered entity’s com6 bined greenhouse gas emissions and attributable 

7 greenhouse gas emissions during the most recent 

8 year for which allowances or offset credits were re9 tired under section 722. 

10 ‘‘(2) 2012 LIMIT.—For calendar year 2012, the 

11 maximum aggregate number of emission allowances 

12 that a covered entity may purchase from that year’s 

13 strategic reserve auctions shall be 20 percent of the 

14 covered entity’s combined greenhouse gas emissions 

15 and attributable greenhouse gas emissions that the 

16 covered entity reported to the registry established 

17 under section 713 for 2011 and that would be sub18 ject to section 722(a) if occurring in later calendar 

19 years. 

20 ‘‘(3) NEW ENTRANTS.—The Administrator 

21 shall, by regulation, establish a separate purchase 

22 limit applicable to entities that expect to become a 

23 covered entity in the year of the auction, permitting 

24 them to purchase emission allowances at the stra25 tegic reserve auctions in their first calendar year of 
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1 operation in an amount of at least 20 percent of 

2 their expected combined greenhouse gas emissions 

3 and attributable greenhouse gas emissions for that 

4 year. 

5 ‘‘(f) DELEGATION OR CONTRACT.—Pursuant to regu6 lations under this section, the Administrator may, by dele7 gation or contract, provide for the conduct of strategic re8 serve auctions under the Administrator’s supervision by 

9 other departments or agencies of the Federal Government 

10 or by nongovernmental agencies, groups, or organizations. 

11 ‘‘(g) USE OF AUCTION PROCEEDS.— 

12 ‘‘(1) DEPOSIT IN STRATEGIC RESERVE FUND.— 

13 The proceeds from strategic reserve auctions shall be 

14 placed in the Strategic Reserve Fund established 

15 under section 793(1), and shall be available without 

16 further appropriation or fiscal year limitation for the 

17 purposes described in this subsection. 

18 ‘‘(2) INTERNATIONAL OFFSET CREDITS FOR RE19 DUCED DEFORESTATION.—The Administrator shall 

20 use the proceeds from each strategic reserve auction 

21 to purchase international offset credits issued for re22 duced deforestation activities pursuant to section 

23 743(e). The Administrator shall retire those inter24 national offset credits and establish a number of 

25 emission allowances equal to 80 percent of the num-
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1 ber of international offset credits so retired. Emis2 sion allowances established under this paragraph 

3 shall be in addition to those established under sec4 tion 721(a). 

5 ‘‘(3) EMISSION ALLOWANCES.—The Adminis6 trator shall deposit emission allowances established 

7 under paragraph (2) in the strategic reserve, except 

8 that, with respect to any such emission allowances in 

9 excess of the amount necessary to fill the strategic 

10 reserve to its original size, the Administrator shall— 

11 ‘‘(A) except as provided in subparagraph 

12 (B), assign a vintage year to the emission al13 lowance, which shall be no earlier than the year 

14 in which the allowance is established under 

15 paragraph (2), and shall treat such allowances 

16 as ones that are not designated for distribution 

17 or auction for purposes of section 782(q) and 

18 (r); and 

19 ‘‘(B) to the extent any such allowances 

20 cannot be assigned a vintage year because of 

21 the limitation in paragraph (4), retire the allow22 ances. 

23 ‘‘(4) LIMITATION.—In no case may the Admin24 istrator assign under paragraph (3)(A) more emis25 sion allowances to a vintage year than the number 
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1 of emission allowances from that vintage year that 

2 were placed in the strategic reserve account under 

3 subsection (b)(1). 

4 ‘‘(h) AVAILABILITY OF INTERNATIONAL OFFSET

5 CREDITS FOR AUCTION.— 

6 ‘‘(1) IN GENERAL.—The regulations promul7 gated under section 721(h) shall allow any entity 

8 holding international offset credits from reduced de9 forestation issued under section 743(e) to request 

10 that the Administrator include such offset credits in 

11 an upcoming strategic reserve auction. The regula12 tions shall provide that— 

13 ‘‘(A) such international offset credits will 

14 be used to fill bid orders only after the supply 

15 of strategic reserve allowances available for sale 

16 at that auction has been depleted; 

17 ‘‘(B) international offset credits may be 

18 sold at a strategic reserve auction under this 

19 subsection only if the Administrator determines 

20 that it is highly likely that covered entities will, 

21 to cover emissions occurring in the year the 

22 auction is held, use offset credits to dem23 onstrate compliance under section 722 for emis24 sions equal to or greater than 80 percent of 2 

25 billion tons of carbon dioxide equivalent; 
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1 ‘‘(C) upon sale of such international offset 

2 credits, the Administrator shall retire those 

3 international offset credits, and establish and 

4 provide to the purchasers a number of emission 

5 allowances equal to 80 percent of the number of 

6 international offset credits so retired, which al7 lowances shall be in addition to those estab8 lished under section 721(a); and 

9 ‘‘(D) for international offset credits sold 

10 pursuant to this subsection, the proceeds for 

11 the entity that offered the international offset 

12 credits for sale shall be the lesser of— 

13 ‘‘(i) the average daily closing price for 

14 international offset credits sold on reg15 istered exchanges (or if such price is un16 available, the average price as determined 

17 by the Administrator) during the six 

18 months prior to the strategic reserve auc19 tion at which they were auctioned, with the 

20 remaining funds collected upon the sale of 

21 the international offset credits deposited in 

22 the Treasury; and 

23 ‘‘(ii) the amount received for the 

24 international offset credits at the auction. 
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1 ‘‘(2) PROCEEDS.—For international offset cred2 its sold pursuant to this subsection, notwithstanding 

3 section 3302 of title 31, United States Code, or any 

4 other provision of law, within 90 days of receipt, the 

5 United States shall transfer the proceeds from the 

6 auction, as defined in paragraph (1)(D), to the enti7 ty that offered the international offset credits for 

8 sale. No funds transferred from a purchaser to a 

9 seller of international offset credits under this para10 graph shall be held by any officer or employee of the 

11 United States or treated for any purpose as public 

12 monies. 

13 ‘‘(3) PRICING.—When the Administrator acts 

14 under this subsection as the agent of an entity in 

15 possession of international offset credits, the Admin16 istrator is not obligated to obtain the highest price 

17 possible for the international offset credits, and in18 stead shall auction such international offset credits 

19 in the same manner and pursuant to the same rules 

20 (except as modified in paragraph (1)) as set forth 

21 for auctioning strategic reserve allowances. Entities 

22 requesting that such international offset credits be 

23 offered for sale at a strategic reserve auction may 

24 not set a minimum reserve price for their inter25 national offset credits that is different than the min-
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1 imum strategic reserve auction price set pursuant to 

2 subsection (c). 

3 ‘‘(i) INITIAL REGULATIONS.—Not later than 24 

4 months after the date of enactment of this title, the Ad5 ministrator shall promulgate regulations, in consultation 

6 with other appropriate agencies, governing the auction of 

7 allowances under this section. Such regulations shall in8 clude the following requirements: 

9 ‘‘(1) FREQUENCY; FIRST AUCTION.—Auctions 

10 shall be held four times per year at regular intervals, 

11 with the first auction to be held no later than March 

12 31, 2012. 

13 ‘‘(2) AUCTION FORMAT.—Auctions shall follow 

14 a single-round, sealed-bid, uniform price format. 

15 ‘‘(3) PARTICIPATION; FINANCIAL ASSURANCE.— 

16 Auctions shall be open to any covered entity eligible 

17 to purchase emission allowances at the auction 

18 under subsection (a)(2), except that the Adminis19 trator may establish financial assurance require20 ments to ensure that auction participants can and 

21 will perform on their bids. 

22 ‘‘(4) DISCLOSURE OF BENEFICIAL OWNER23 SHIP.—Each bidder in an auction shall be required 

24 to disclose the person or entity sponsoring or bene25 fitting from the bidder’s participation in the auction 
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1 if such person or entity is, in whole or in part, other 

2 than the bidder. 

3 ‘‘(5) PURCHASE LIMITS.—No person may, di4 rectly or in concert with another participant, pur5 chase more than 20 percent of the allowances of6 fered for sale at any quarterly auction. 

7 ‘‘(6) PUBLICATION OF INFORMATION.—After 

8 the auction, the Administrator shall, in a timely 

9 fashion, publish the identities of winning bidders, 

10 the quantity of allowances obtained by each winning 

11 bidder, and the auction clearing price. 

12 ‘‘(7) OTHER REQUIREMENTS.—The Adminis13 trator may include in the regulations such other re14 quirements or provisions as the Administrator, in 

15 consultation with other agencies as appropriate, con16 siders appropriate to promote effective, efficient, 

17 transparent, and fair administration of auctions 

18 under this section. 

19 ‘‘(j) REVISION OF REGULATIONS.—The Adminis20 trator may, at any time, in consultation with other agen21 cies as appropriate, revise the initial regulations promul22 gated under subsection (i) by promulgating new regula23 tions. Such revised regulations need not meet the require24 ments identified in subsection (i) if the Administrator de25 termines that an alternative auction design would be more 
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1 effective, taking into account factors including costs of ad2 ministration, transparency, fairness, and risks of collusion 

3 or manipulation. In determining whether and how to re4 vise the initial regulations under this subsection, the Ad5 ministrator shall not consider maximization of revenues to 

6 the Federal Government. 

7 ‘‘SEC. 727. PERMITS. 

8 ‘‘(a) PERMIT PROGRAM.—For stationary sources 

9 subject to title V of this Act that are covered entities, the 

10 provisions of this title shall be implemented by permits 

11 issued to such covered entities (and enforced) in accord12 ance with the provisions of title V, as modified by this 

13 title. Any such permit issued by the Administrator, or by 

14 a State or Indian tribe with an approved permit program, 

15 shall require the owner or operator of a covered entity to 

16 hold allowances or offset credits at least equal to the total 

17 annual amount of carbon dioxide equivalents for its com18 bined emissions and attributable greenhouse gas emissions 

19 to which section 722 applies. No such permit shall be 

20 issued that is inconsistent with the requirements of this 

21 title, and title V as applicable. Nothing in this section re22 garding compliance plans or in title V shall be construed 

23 as affecting allowances or offset credits. Submission of a 

24 statement by the owner or operator, or the designated rep25 resentative of the owners and operators, of a covered enti-
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1 ty that the owners and operators will hold allowances or 

2 offset credits for the entity’s combined emissions and at3 tributable greenhouse gas emissions to which section 722 

4 applies shall be deemed to meet the proposed and ap5 proved planning requirements of title V. Recordation by 

6 the Administrator of transfers of allowances and offset 

7 credits shall amend automatically all applicable proposed 

8 or approved permit applications, compliance plans, and 

9 permits. 

10 ‘‘(b) MULTIPLE OWNERS.—No permit shall be issued 

11 under this section and no allowances or offset credits shall 

12 be disbursed under this title to a covered entity or any 

13 other person until the designated representative of the 

14 owners or operators has filed a certificate of representa15 tion with regard to matters under this title, including the 

16 holding and distribution of emission allowances and the 

17 proceeds of transactions involving emission allowances. 

18 Where there are multiple holders of a legal or equitable 

19 title to, or a leasehold interest in, such a covered entity 

20 or other entity or where a utility or industrial customer 

21 purchases power under a long-term power purchase con22 tract from an independent power production facility that 

23 is a covered entity, the certificate shall state— 

24 ‘‘(1) that emission allowances and the proceeds 

25 of transactions involving emission allowances will be 
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1 deemed to be held or distributed in proportion to 

2 each holder’s legal, equitable, leasehold, or contrac3 tual reservation or entitlement; or 

4 ‘‘(2) if such multiple holders have expressly pro5 vided for a different distribution of emission allow6 ances by contract, that emission allowances and the 

7 proceeds of transactions involving emission allow8 ances will be deemed to be held or distributed in ac9 cordance with the contract. 

10 A passive lessor, or a person who has an equitable interest 

11 through such lessor, whose rental payments are not based, 

12 either directly or indirectly, upon the revenues or income 

13 from the covered entity or other entity shall not be deemed 

14 to be a holder of a legal, equitable, leasehold, or contrac15 tual interest for the purpose of holding or distributing 

16 emission allowances as provided in this subsection, during 

17 either the term of such leasehold or thereafter, unless ex18 pressly provided for in the leasehold agreement. Except 

19 as otherwise provided in this subsection, where all legal 

20 or equitable title to or interest in a covered entity, or other 

21 entity, is held by a single person, the certificate shall state 

22 that all emission allowances received by the entity are 

23 deemed to be held for that person. 

24 ‘‘(c) PROHIBITION.—It shall be unlawful for any per25 son to operate any stationary source subject to the re-
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1 quirements of this section except in compliance with the 

2 terms and requirements of a permit issued by the Admin3 istrator or a State or Indian tribe with an approved permit 

4 program in accordance with this section. For purposes of 

5 this subsection, compliance, as provided in section 504(f), 

6 with a permit issued under title V which complies with 

7 this title for covered entities shall be deemed compliance 

8 with this subsection as well as section 502(a). 

9 ‘‘(d) RELIABILITY.—Nothing in this section or title 

10 V shall be construed as requiring termination of oper11 ations of a stationary source that is a covered entity for 

12 failure to have an approved permit, or compliance plan, 

13 that is consistent with the requirements in the second and 

14 fifth sentences of subsection (a) concerning the holding 

15 of allowances or offset credits, except that any such cov16 ered entity may be subject to the applicable enforcement 

17 provision of section 113. 

18 ‘‘(e) REGULATIONS.—Not later than 2 years after the 

19 date of enactment of this title, the Administrator shall 

20 promulgate regulations to implement this section. To pro21 vide for permits required under this section, each State 

22 in which one or more stationary sources that are covered 

23 entities are located shall submit, in accordance with this 

24 section and title V, revised permit programs for approval. 
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1 ‘‘SEC. 728. INTERNATIONAL EMISSION ALLOWANCES. 

2 ‘‘(a) QUALIFYING PROGRAMS.—The Administrator, 

3 in consultation with the Secretary of State, may by rule 

4 designate an international climate change program as a 

5 qualifying international program if— 

6 ‘‘(1) the program is run by a national or supra7 national foreign government, and imposes a manda8 tory absolute tonnage limit on greenhouse gas emis9 sions from 1 or more foreign countries, or from 1 or 

10 more economic sectors in such a country or coun11 tries; and 

12 ‘‘(2) the program is at least as stringent as the 

13 program established by this title, including provi14 sions to ensure at least comparable monitoring, com15 pliance, enforcement, quality of offsets, and restric16 tions on the use of offsets. 

17 ‘‘(b) DISQUALIFIED ALLOWANCES.—An international 

18 emission allowance may not be held under section 

19 722(d)(2) if it is in the nature of an offset instrument 

20 or allowance awarded based on the achievement of green21 house gas emission reductions or avoidance, or greenhouse 

22 gas sequestration, that are not subject to the mandatory 

23 absolute tonnage limits referred to in subsection (a)(1). 

24 ‘‘(c) RETIREMENT.— 

25 ‘‘(1) ENTITY CERTIFICATION.—The owner or 

26 operator of an entity that holds an international 
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1 emission allowance under section 722(d)(2) shall 

2 certify to the Administrator that such international 

3 emission allowance has not previously been used to 

4 comply with any foreign, international, or domestic 

5 greenhouse gas regulatory program. 

6 ‘‘(2) RETIREMENT.— 

7 ‘‘(A) FOREIGN AND INTERNATIONAL REG8 ULATORY ENTITIES.—The Administrator, in 

9 consultation with the Secretary of State, shall 

10 seek, by whatever means appropriate, including 

11 agreements and technical cooperation on allow12 ance tracking, to ensure that any relevant for13 eign, international, and domestic regulatory en14 tities— 

15 ‘‘(i) are notified of the use, for pur16 poses of compliance with this title, of any 

17 international emission allowance; and 

18 ‘‘(ii) provide for the disqualification of 

19 such international emission allowance for 

20 any subsequent use under the relevant for21 eign, international, or domestic greenhouse 

22 gas regulatory program, regardless of 

23 whether such use is a sale, exchange, or 

24 submission to satisfy a compliance obliga25 tion. 
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1 ‘‘(B) DISQUALIFICATION FROM FURTHER

2 USE.—The Administrator shall ensure that, 

3 once an international emission allowance has 

4 been disqualified or otherwise used for purposes 

5 of compliance with this title, such allowance 

6 shall be disqualified from any further use under 

7 this title. 

8 ‘‘(d) USE LIMITATIONS.—The Administrator may, by 

9 rule, apply a limit to the percentage of the combined 

10 greenhouse gas emissions and attributable greenhouse gas 

11 emissions of a covered entity with respect to which compli12 ance may be demonstrated by holding international emis13 sion allowances under section 722(d)(2), consistent with 

14 the purposes of the Safe Climate Act. 

15 ‘‘PART D—OFFSETS 

16 ‘‘SEC. 731. OFFSETS INTEGRITY ADVISORY BOARD. 

17 ‘‘(a) ESTABLISHMENT.—Not later than 30 days after 

18 the date of enactment of this title, the Administrator shall 

19 establish an independent Offsets Integrity Advisory 

20 Board. The Advisory Board shall make recommendations 

21 to the Administrator for use in promulgating and revising 

22 regulations under this part and part E, and for ensuring 

23 the overall environmental integrity of the programs estab24 lished pursuant to those regulations. 
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1 ‘‘(b) MEMBERSHIP.—The Advisory Board shall be 

2 comprised of at least nine members. Each member shall 

3 be qualified by education, training, and experience to 

4 evaluate scientific and technical information on matters 

5 referred to the Board under this section. The Adminis6 trator shall appoint Advisory Board members, including 

7 a chair and vice-chair of the Advisory Board. Terms shall 

8 be 3 years in length, except for initial terms, which may 

9 be up to 5 years in length to allow staggering. Members 

10 may be reappointed only once for an additional 3-year 

11 term, and such second term may follow directly after a 

12 first term. 

13 ‘‘(c) ACTIVITIES.—The Advisory Board established 

14 pursuant to subsection (a) shall— 

15 ‘‘(1) provide recommendations, not later than 

16 90 days after the Advisory Board’s establishment 

17 and periodically thereafter, to the Administrator re18 garding offset project types that should be consid19 ered for eligibility under section 733, taking into 

20 consideration relevant scientific and other issues, in21 cluding— 

22 ‘‘(A) the availability of a representative 

23 data set for use in developing the activity base24 line; 
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1 ‘‘(B) the potential for accurate quantifica2 tion of greenhouse gas reduction, avoidance, or 

3 sequestration for an offset project type; 

4 ‘‘(C) the potential level of scientific and 

5 measurement uncertainty associated with an 

6 offset project type; and 

7 ‘‘(D) any beneficial or adverse environ8 mental, public health, welfare, social, economic, 

9 or energy effects associated with an offset 

10 project type; 

11 ‘‘(2) make available to the Administrator its ad12 vice and comments on offset methodologies that 

13 should be considered under regulations promulgated 

14 with respect to section 734, including methodologies 

15 to address the issues of additionality, activity base16 lines, quantification methods, leakage, uncertainty, 

17 permanence, and environmental integrity; 

18 ‘‘(3) make available to the Administrator, and 

19 other relevant Federal agencies, its advice and com20 ments regarding scientific, technical, and methodo21 logical issues specific to the issuance of international 

22 offset credits under section 743; 

23 ‘‘(4) make available to the Administrator, and 

24 other relevant Federal agencies, its advice and com25 ments regarding scientific, technical, and methodo-
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1 logical issues associated with the implementation of 

2 part E; 

3 ‘‘(5) make available to the Administrator its ad4 vice and comments on areas in which further knowl5 edge is required to appraise the adequacy of exist6 ing, revised, or proposed methodologies for use 

7 under this part and part E, and describe the re8 search efforts necessary to provide the required in9 formation; and 

10 ‘‘(6) make available to the Administrator its ad11 vice and comments on other ways to improve or 

12 safeguard the environmental integrity of programs 

13 established under this part and part E. 

14 ‘‘(d) SCIENTIFIC REVIEW OF OFFSET AND DEFOR15 ESTATION REDUCTION PROGRAMS.—Not later than Janu16 ary 1, 2017, and at 5-year intervals thereafter, the Advi17 sory Board shall submit to the Administrator and make 

18 available to the public an analysis of relevant scientific and 

19 technical information related to this part and part E. The 

20 Advisory Board shall review approved and potential meth21 odologies, scientific studies, offset project monitoring, off22 set project verification reports, and audits related to this 

23 part and part E, and evaluate the net emissions effects 

24 of implemented offset projects. The Advisory Board shall 

25 recommend changes to offset methodologies, protocols, or 
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1 project types, or to the overall offset program under this 

2 part, to ensure that offset credits issued by the Adminis3 trator do not compromise the integrity of the annual emis4 sion reductions established under section 703, and to 

5 avoid or minimize adverse effects to human health or the 

6 environment. 

7 ‘‘SEC. 732. ESTABLISHMENT OF OFFSETS PROGRAM. 

8 ‘‘(a) REGULATIONS.—Not later than 2 years after 

9 the date of enactment of this title, the Administrator, in 

10 consultation with appropriate Federal agencies and taking 

11 into consideration the recommendations of the Advisory 

12 Board, shall promulgate regulations establishing a pro13 gram for the issuance of offset credits in accordance with 

14 the requirements of this part. The Administrator shall pe15 riodically revise these regulations as necessary to meet the 

16 requirements of this part. 

17 ‘‘(b) REQUIREMENTS.—The regulations described in 

18 subsection (a) shall— 

19 ‘‘(1) authorize the issuance of offset credits 

20 with respect to qualifying offset projects that result 

21 in reductions or avoidance of greenhouse gas emis22 sions, or sequestration of greenhouse gases; 

23 ‘‘(2) ensure that such offset credits represent 

24 verifiable and additional greenhouse gas emission re25 ductions or avoidance, or increases in sequestration; 
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1 ‘‘(3) ensure that offset credits issued for se2 questration offset projects are only issued for green3 house gas reductions that are permanent; 

4 ‘‘(4) provide for the implementation of the re5 quirements of this part; and 

6 ‘‘(5) include as reductions in greenhouse gases 

7 reductions achieved through the destruction of meth8 ane and its conversion to carbon dioxide, and reduc9 tions achieved through destruction of 

10 chlorofluorocarbons or other ozone depleting sub11 stances, if permitted by the Administrator under 

12 section 619(b)(9) and subject to the conditions spec13 ified in section 619(b)(9), based on the carbon diox14 ide equivalent value of the substance destroyed. 

15 ‘‘(c) COORDINATION TO MINIMIZE NEGATIVE EF16 FECTS.—In promulgating and implementing regulations 

17 under this part, the Administrator shall act (including by 

18 rejecting projects, if necessary) to avoid or minimize, to 

19 the maximum extent practicable, adverse effects on human 

20 health or the environment resulting from the implementa21 tion of offset projects under this part. 

22 ‘‘(d) OFFSET REGISTRY.—The Administrator shall 

23 establish within the allowance tracking system established 

24 under section 724(d) an Offset Registry for qualifying off-
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1 set projects and offset credits issued with respect thereto 

2 under this part. 

3 ‘‘(e) LEGAL STATUS OF OFFSET CREDIT.—An offset 

4 credit does not constitute a property right. 

5 ‘‘(f) FEES.—The Administrator shall assess fees pay6 able by offset project developers in an amount necessary 

7 to cover the administrative costs to the Environmental 

8 Protection Agency of carrying out the activities under this 

9 part. Amounts collected for such fees shall be available 

10 to the Administrator for carrying out the activities under 

11 this part to the extent provided in advance in appropria12 tions Acts. 

13 ‘‘SEC. 733. ELIGIBLE PROJECT TYPES. 

14 ‘‘(a) LIST OF ELIGIBLE PROJECT TYPES.— 

15 ‘‘(1) IN GENERAL.—As part of the regulations 

16 promulgated under section 732(a), the Adminis17 trator shall establish, and may periodically revise, a 

18 list of types of projects eligible to generate offset 

19 credits, including international offset credits, under 

20 this part. 

21 ‘‘(2) ADVISORY BOARD RECOMMENDATIONS.— 

22 In determining the eligibility of project types, the 

23 Administrator shall take into consideration the rec24 ommendations of the Advisory Board. If a list estab25 lished under this section differs from the rec-
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1 ommendations of the Advisory Board, the regula2 tions promulgated under section 732(a) shall include 

3 a justification for the discrepancy. 

4 ‘‘(3) INITIAL DETERMINATION.—The Adminis5 trator shall establish the initial eligibility list under 

6 paragraph (1) not later than 1 year after the date 

7 of enactment of this title. The Administrator shall 

8 add additional project types to the list not later than 

9 2 years after the date of enactment of this title. In 

10 determining the initial list, the Administrator shall 

11 give priority to consideration of offset project types 

12 that are recommended by the Advisory Board and 

13 for which there are well developed methodologies 

14 that the Administrator determines would meet the 

15 criteria of section 734, with such modifications as 

16 the Administrator deems appropriate. In establishing 

17 methodologies pursuant to section 734, the Adminis18 trator shall give priority to methodologies for offset 

19 project types included on the initial eligibility list. 

20 ‘‘(b) MODIFICATION OF LIST.—The Administrator— 

21 ‘‘(1) may at any time, by rule, add a project 

22 type to the list established under subsection (a) if 

23 the Administrator, in consultation with appropriate 

24 Federal agencies and taking into consideration the 

25 recommendations of the Advisory Board, determines 
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1 that the project type can generate additional reduc2 tions or avoidance of greenhouse gas emissions, or 

3 sequestration of greenhouse gases, subject to the re4 quirements of this part; 

5 ‘‘(2) may at any time, by rule, determine that 

6 a project type on the list does not meet the require7 ments of this part, and remove the project type from 

8 the list established under subsection (a), in consulta9 tion with appropriate Federal agencies and taking 

10 into consideration any recommendations of the Advi11 sory Board; and 

12 ‘‘(3) shall consider adding to or removing from 

13 the list established under subsection (a), at a min14 imum, project types proposed to the Adminis15 trator— 

16 ‘‘(A) by petition pursuant to subsection 

17 (c); or 

18 ‘‘(B) by the Advisory Board. 

19 ‘‘(c) PETITION PROCESS.—Any person may petition 

20 the Administrator to modify the list established under sub21 section (a) by adding or removing a project type pursuant 

22 to subsection (b). Any such petition shall include a show23 ing by the petitioner that there is adequate data to estab24 lish that the project type does or does not meet the re25 quirements of this part. Not later than 12 months after 
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1 receipt of such a petition, the Administrator shall either 

2 grant or deny the petition and publish a written expla3 nation of the reasons for the Administrator’s decision. The 

4 Administrator may not deny a petition under this sub5 section on the basis of inadequate Environmental Protec6 tion Agency resources or time for review. 

7 ‘‘SEC. 734. REQUIREMENTS FOR OFFSET PROJECTS. 

8 ‘‘(a) METHODOLOGIES.—As part of the regulations 

9 promulgated under section 732(a), the Administrator shall 

10 establish, for each type of offset project listed as eligible 

11 under section 733, the following: 

12 ‘‘(1) ADDITIONALITY.—A standardized method13 ology for determining the additionality of greenhouse 

14 gas emission reductions or avoidance, or greenhouse 

15 gas sequestration, achieved by an offset project of 

16 that type. Such methodology shall ensure, at a min17 imum, that any greenhouse gas emission reduction 

18 or avoidance, or any greenhouse gas sequestration, is 

19 considered additional only to the extent that it re20 sults from activities that— 

21 ‘‘(A) are not required by or undertaken to 

22 comply with any law, including any regulation 

23 or consent order; 

24 ‘‘(B) were not commenced prior to Janu25 ary 1, 2009, except in the case of— 
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1 ‘‘(i) offset project activities that com2 menced after January 1, 2001, and were 

3 registered as of the date of enactment of 

4 this title under an offset program with re5 spect to which the Administrator has made 

6 an affirmative determination under section 

7 740(a)(2); or 

8 ‘‘(ii) activities that are readily revers9 ible, with respect to which the Adminis10 trator may set an alternative earlier date 

11 under this subparagraph that is not earlier 

12 than January 1, 2001, where the Adminis13 trator determines that setting such an al14 ternative date may produce an environ15 mental benefit by removing an incentive to 

16 cease and then reinitiate activities that 

17 began prior to January 1, 2009; and 

18 ‘‘(C) exceed the activity baseline estab19 lished under paragraph (2). 

20 ‘‘(2) ACTIVITY BASELINES.—A standardized 

21 methodology for establishing activity baselines for 

22 offset projects of that type. The Administrator shall 

23 set activity baselines to reflect a conservative esti24 mate of business-as-usual performance or practices 

25 for the relevant type of activity such that the base-
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1 line provides an adequate margin of safety to ensure 

2 the environmental integrity of offsets calculated in 

3 reference to such baseline. 

4 ‘‘(3) QUANTIFICATION METHODS.—A standard5 ized methodology for determining the extent to 

6 which greenhouse gas emission reductions or avoid7 ance, or greenhouse gas sequestration, achieved by 

8 an offset project of that type exceed a relevant activ9 ity baseline, including protocols for monitoring and 

10 accounting for uncertainty. 

11 ‘‘(4) LEAKAGE.—A standardized methodology 

12 for accounting for and mitigating potential leakage, 

13 if any, from an offset project of that type, taking 

14 uncertainty into account. 

15 ‘‘(b) ACCOUNTING FOR REVERSALS.— 

16 ‘‘(1) IN GENERAL.—For each type of sequestra17 tion project listed under section 733, the Adminis18 trator shall establish requirements to account for 

19 and address reversals, including— 

20 ‘‘(A) a requirement to report any reversal 

21 with respect to an offset project for which offset 

22 credits have been issued under this part; 

23 ‘‘(B) provisions to require emission allow24 ances to be held in amounts to fully compensate 

25 for greenhouse gas emissions attributable to re-
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1 versals, and to assign responsibility for holding 

2 such emission allowances; and 

3 ‘‘(C) any other provisions the Adminis4 trator determines necessary to account for and 

5 address reversals. 

6 ‘‘(2) MECHANISMS.—The Administrator shall 

7 prescribe mechanisms to ensure that any sequestra8 tion with respect to which an offset credit is issued 

9 under this part results in a permanent net increase 

10 in sequestration, and that full account is taken of 

11 any actual or potential reversal of such sequestra12 tion, with an adequate margin of safety. The Admin13 istrator shall prescribe at least one of the following 

14 mechanisms to meet the requirements of this para15 graph: 

16 ‘‘(A) An offsets reserve, pursuant to para17 graph (3). 

18 ‘‘(B) Insurance that provides for purchase 

19 and provision to the Administrator for retire20 ment of an amount of offset credits or emission 

21 allowances equal in number to the tons of car22 bon dioxide equivalents of greenhouse gas emis23 sions released due to reversal. 
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1 ‘‘(C) Another mechanism that the Admin2 istrator determines satisfies the requirements of 

3 this part. 

4 ‘‘(3) OFFSETS RESERVE.— 

5 ‘‘(A) IN GENERAL.—An offsets reserve re6 ferred to in paragraph (2)(A) is a program 

7 under which, before issuance of offset credits 

8 under this part, the Administrator shall sub9 tract and reserve from the quantity to be issued 

10 a quantity of offset credits based on the risk of 

11 reversal. The Administrator shall— 

12 ‘‘(i) hold these reserved offset credits 

13 in the offsets reserve; and 

14 ‘‘(ii) register the holding of the re15 served offset credits in the Offset Registry 

16 established under section 732(d). 

17 ‘‘(B) PROJECT REVERSAL.— 

18 ‘‘(i) IN GENERAL.—If a reversal has 

19 occurred with respect to an offset project 

20 for which offset credits are reserved under 

21 this paragraph, the Administrator shall re22 tire offset credits or emission allowances 

23 from the offsets reserve to fully account 

24 for the tons of carbon dioxide equivalent 

25 that are no longer sequestered. 
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1 ‘‘(ii) INTENTIONAL REVERSALS.—If 

2 the Administrator determines that a rever3 sal was intentional, the offset project devel4 oper for the relevant offset project shall 

5 place into the offsets reserve a quantity of 

6 offset credits, or combination of offset 

7 credits and emission allowances, equal in 

8 number to the number of reserve offset 

9 credits that were canceled due to the rever10 sal pursuant to clause (i). 

11 ‘‘(iii) UNINTENTIONAL REVERSALS.— 

12 If the Administrator determines that a re13 versal was unintentional, the offset project 

14 developer for the relevant offset project 

15 shall place into the offsets reserve a quan16 tity of offset credits, or combination of off17 set credits and emission allowances, equal 

18 in number to half the number of offset 

19 credits that were reserved for that offset 

20 project, or half the number of reserve off21 set credits that were canceled due to the 

22 reversal pursuant to clause (i), whichever 

23 is less. 

24 ‘‘(C) USE OF RESERVED OFFSET CRED25 ITS.—Offset credits placed into the offsets re-
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1 serve under this paragraph may not be used to 

2 comply with section 722. 

3 ‘‘(c) CREDITING PERIODS.— 

4 ‘‘(1) IN GENERAL.—For each offset project 

5 type, the Administrator shall specify a crediting pe6 riod, and establish provisions for petitions for new 

7 crediting periods, in accordance with this subsection. 

8 ‘‘(2) DURATION.—The crediting period shall be 

9 no less than 5 and no greater than 10 years for any 

10 project type other than those involving sequestra11 tion. 

12 ‘‘(3) ELIGIBILITY.—An offset project shall be 

13 eligible to generate offset credits under this part 

14 only during the project’s crediting period. During 

15 such crediting period, the project shall remain eligi16 ble to generate offset credits, subject to the meth17 odologies and project type eligibility list that applied 

18 as of the date of project approval under section 735, 

19 except as provided in paragraph (4) of this sub20 section. 

21 ‘‘(4) PETITION FOR NEW CREDITING PERIOD.— 

22 An offset project developer may petition for a new 

23 crediting period to commence after termination of a 

24 crediting period, subject to the methodologies and 

25 project type eligibility list in effect at the time when 
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1 such petition is submitted. A petition may not be 

2 submitted under this paragraph more than 18 

3 months before the end of the pending crediting pe4 riod. The Administrator may limit the number of 

5 new crediting periods available for projects of par6 ticular project types. 

7 ‘‘(d) ENVIRONMENTAL INTEGRITY.—In establishing 

8 the requirements under this section, the Administrator 

9 shall apply conservative assumptions or methods to maxi10 mize the certainty that the environmental integrity of the 

11 cap established under section 703 is not compromised. 

12 ‘‘(e) PRE-EXISTING METHODOLOGIES.—In promul13 gating requirements under this section, the Administrator 

14 shall give due consideration to methodologies for offset 

15 projects existing as of the date of enactment of this title. 

16 ‘‘(f) ADDED PROJECT TYPES.—The Administrator 

17 shall establish methodologies described in subsection (a), 

18 and, as applicable, requirements and mechanisms for re19 versals as described in subsection (b), for any project type 

20 that is added to the list pursuant to section 733. 

21 ‘‘SEC. 735. APPROVAL OF OFFSET PROJECTS. 

22 ‘‘(a) APPROVAL PETITION.—An offset project devel23 oper shall submit an offset project approval petition pro24 viding such information as the Administrator requires to 

25 determine whether the offset project is eligible for issuance 
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1 of offset credits under rules promulgated pursuant to this 

2 part. 

3 ‘‘(b) TIMING.—An approval petition shall be sub4 mitted to the Administrator under subsection (a) no later 

5 than the time at which an offset project’s first verification 

6 report is submitted under section 736. 

7 ‘‘(c) APPROVAL PETITION REQUIREMENTS.—As part 

8 of the regulations promulgated under section 732, the Ad9 ministrator shall include provisions for, and shall specify, 

10 the required components of an offset project approval peti11 tion required under subsection (a), which shall include— 

12 ‘‘(1) designation of an offset project developer; 

13 and 

14 ‘‘(2) any other information that the Adminis15 trator considers to be necessary to achieve the pur16 poses of this part. 

17 ‘‘(d) APPROVAL AND NOTIFICATION.—Not later than 

18 90 days after receiving a complete approval petition under 

19 subsection (a), the Administrator shall make the approval 

20 petition publicly available, approve or deny the petition in 

21 writing and if the petition is denied, provide the reasons 

22 for denial, and make the Administrator’s written decision 

23 publicly available. After an offset project is approved, the 

24 offset project developer shall not be required to resubmit 
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1 an approval petition during the offset project’s crediting 

2 period, except as provided in section 734(c)(4). 

3 ‘‘(e) APPEAL.—The Administrator shall establish 

4 procedures for appeal and review of determinations made 

5 under subsection (d). 

6 ‘‘(f) VOLUNTARY PREAPPROVAL REVIEW.—The Ad7 ministrator may establish a voluntary preapproval review 

8 procedure, to allow an offset project developer to request 

9 the Administrator to conduct a preliminary eligibility re10 view for an offset project. Findings of such reviews shall 

11 not be binding upon the Administrator. The voluntary 

12 preapproval review procedure— 

13 ‘‘(1) shall require the offset project developer to 

14 submit such basic project information as the Admin15 istrator requires to provide a meaningful review; and 

16 ‘‘(2) shall require a response from the Adminis17 trator not later than 6 weeks after receiving a re18 quest for review under this subsection. 

19 ‘‘SEC. 736. VERIFICATION OF OFFSET PROJECTS. 

20 ‘‘(a) IN GENERAL.—As part of the regulations pro21 mulgated under section 732(a), the Administrator shall es22 tablish requirements, including protocols, for verification 

23 of the quantity of greenhouse gas emission reductions or 

24 avoidance, or sequestration of greenhouse gases, resulting 

25 from an offset project. The regulations shall require that 
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1 an offset project developer shall submit a report, prepared 

2 by a third-party verifier accredited under subsection (d), 

3 providing such information as the Administrator requires 

4 to determine the quantity of greenhouse gas emission re5 ductions or avoidance, or sequestration of greenhouse 

6 gases, resulting from the offset project. 

7 ‘‘(b) SCHEDULE.—The Administrator shall prescribe 

8 a schedule for the submission of verification reports under 

9 subsection (a). 

10 ‘‘(c) VERIFICATION REPORT REQUIREMENTS.—The 

11 Administrator shall specify the required components of a 

12 verification report required under subsection (a), which 

13 shall include— 

14 ‘‘(1) the name and contact information for a 

15 designated representative for the offset project devel16 oper; 

17 ‘‘(2) the quantity of greenhouse gases reduced, 

18 avoided, or sequestered; 

19 ‘‘(3) the methodologies applicable to the project 

20 pursuant to section 734; 

21 ‘‘(4) a certification that the project meets the 

22 applicable requirements; 

23 ‘‘(5) a certification establishing that the conflict 

24 of interest requirements in the regulations promul-
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1 gated under subsection (d)(1) have been complied 

2 with; and 

3 ‘‘(6) any other information that the Adminis4 trator considers to be necessary to achieve the pur5 poses of this part. 

6 ‘‘(d) VERIFIER ACCREDITATION.— 

7 ‘‘(1) IN GENERAL.—As part of the regulations 

8 promulgated under section 732(a), the Adminis9 trator shall establish a process and requirements for 

10 periodic accreditation of third-party verifiers to en11 sure that such verifiers are professionally qualified 

12 and have no conflicts of interest. 

13 ‘‘(2) STANDARDS.— 

14 ‘‘(A) AMERICAN NATIONAL STANDARDS IN15 STITUTE ACCREDITATION.—The Administrator 

16 may accredit, or accept for purposes of accredi17 tation under this subsection, verifiers accredited 

18 under the American National Standards Insti19 tute (ANSI) accreditation program in accord20 ance with ISO 14065. The Administrator shall 

21 accredit, or accept for accreditation, verifiers 

22 under this subparagraph only if the Adminis23 trator finds that the American National Stand24 ards Institute accreditation program provides 
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1 sufficient assurance that the requirements of 

2 this part will be met. 

3 ‘‘(B) EPA ACCREDITATION.—As part of 

4 the regulations promulgated under section 

5 732(a), the Administrator may establish accred6 itation standards for verifiers under this sub7 section, and may establish related training and 

8 testing programs and requirements. 

9 ‘‘(3) PUBLIC ACCESSIBILITY.—Each verifier 

10 meeting the requirements for accreditation in ac11 cordance with this subsection shall be listed in a 

12 publicly accessible database, which shall be main13 tained and updated by the Administrator. 

14 ‘‘SEC. 737. ISSUANCE OF OFFSET CREDITS. 

15 ‘‘(a) DETERMINATION AND NOTIFICATION.—Not 

16 later than 90 days after receiving a complete verification 

17 report under section 736, the Administrator shall— 

18 ‘‘(1) make the report publicly available; 

19 ‘‘(2) make a determination of the quantity of 

20 greenhouse gas emissions that have been reduced or 

21 avoided, or greenhouse gases that have been seques22 tered, by the offset project; and 

23 ‘‘(3) notify the offset project developer in writ24 ing of such determination and make such determina25 tion publicly available. 
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1 ‘‘(b) ISSUANCE OF OFFSET CREDITS.—The Adminis2 trator shall issue one offset credit to an offset project de3 veloper for each ton of carbon dioxide equivalent that the 

4 Administrator has determined has been reduced, avoided, 

5 or sequestered during the period covered by a verification 

6 report submitted in accordance with section 736, only if— 

7 ‘‘(1) the Administrator has approved the offset 

8 project pursuant to section 735; and 

9 ‘‘(2) the relevant emissions reduction, avoid10 ance, or sequestration has— 

11 ‘‘(A) already occurred, during the offset 

12 project’s crediting period; and 

13 ‘‘(B) occurred after January 1, 2009. 

14 ‘‘(c) APPEAL.—The Administrator shall establish 

15 procedures for appeal and review of determinations made 

16 under subsection (a). 

17 ‘‘(d) TIMING.—Offset credits meeting the criteria es18 tablished in subsection (b) shall be issued not later than 

19 2 weeks following the verification determination made by 

20 the Administrator under subsection (a). 

21 ‘‘(e) REGISTRATION.—The Administrator shall as22 sign a unique serial number to and register each offset 

23 credit to be issued in the Offset Registry established under 

24 section 732(d). 
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1 ‘‘SEC. 738. AUDITS. 

2 ‘‘(a) IN GENERAL.—The Administrator shall, on an 

3 ongoing basis, conduct random audits of offset projects, 

4 offset credits, and practices of third-party verifiers. In 

5 each year, the Administrator shall conduct audits, at min6 imum, for a representative sample of project types and 

7 geographic areas. 

8 ‘‘(b) DELEGATION.—The Administrator may delegate 

9 to a State or tribal government the responsibility for con10 ducting audits under this section if the Administrator 

11 finds that the program proposed by the State or tribal 

12 government provides assurances equivalent to those pro13 vided by the auditing program of the Administrator, and 

14 that the integrity of the offset program under this part 

15 will be maintained. Nothing in this subsection shall pre16 vent the Administrator from conducting any audit the Ad17 ministrator considers necessary and appropriate. 

18 ‘‘SEC. 739. PROGRAM REVIEW AND REVISION. 

19 ‘‘At least once every 5 years, the Administrator shall 

20 review and, based on new or updated information and tak21 ing into consideration the recommendations of the Advi22 sory Board, update and revise— 

23 ‘‘(1) the list of eligible project types established 

24 under section 733; 

25 ‘‘(2) the methodologies established, including 

26 specific activity baselines, under section 734(a); 
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1 ‘‘(3) the reversal requirements and mechanisms 

2 established or prescribed under section 734(b); 

3 ‘‘(4) measures to improve the accountability of 

4 the offsets program; and 

5 ‘‘(5) any other requirements established under 

6 this part to ensure the environmental integrity and 

7 effective operation of this part. 

8 ‘‘SEC. 740. EARLY OFFSET SUPPLY. 

9 ‘‘(a) PROJECTS REGISTERED UNDER OTHER GOV10 ERNMENT-RECOGNIZED PROGRAMS.—Except as provided 

11 in subsection (b) or (c), the Administrator shall issue one 

12 offset credit for each ton of carbon dioxide equivalent 

13 emissions reduced, avoided, or sequestered— 

14 ‘‘(1) under an offset project that was started 

15 after January 1, 2001; 

16 ‘‘(2) for which a credit was issued under any 

17 regulatory or voluntary greenhouse gas emission off18 set program that the Administrator determines— 

19 ‘‘(A) was established under State or tribal 

20 law or regulation prior to January 1, 2009, or 

21 has been approved by the Administrator pursu22 ant to subsection (e); 

23 ‘‘(B) has developed offset project type 

24 standards, methodologies, and protocols 
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1 through a public consultation process or a peer 

2 review process; 

3 ‘‘(C) has made available to the public 

4 standards, methodologies, and protocols that re5 quire that credited emission reductions, avoid6 ance, or sequestration are permanent, addi7 tional, verifiable, and enforceable; 

8 ‘‘(D) requires that all emission reductions, 

9 avoidance, or sequestration be verified by a 

10 State or tribal regulatory agency or an accred11 ited third-party independent verification body; 

12 ‘‘(E) requires that all credits issued are 

13 registered in a publicly accessible registry, with 

14 individual serial numbers assigned for each ton 

15 of carbon dioxide equivalent emission reduc16 tions, avoidance, or sequestration; and 

17 ‘‘(F) ensures that no credits are issued for 

18 an activity if the entity administering the pro19 gram, or a program administrator or represent20 ative, has funded, solicited, or served as a fund 

21 administrator for the development of the activ22 ity; and 

23 ‘‘(3) for which the credit described in para24 graph (2) is transferred to the Administrator. 
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1 ‘‘(b) INELIGIBLE CREDITS.—Subsection (a) shall not 

2 apply to offset credits that have expired or have been re3 tired, canceled, or used for compliance under a program 

4 established under State or tribal law or regulation. 

5 ‘‘(c) LIMITATION.—Notwithstanding subsection 

6 (a)(1), offset credits shall be issued under this section— 

7 ‘‘(1) only for reductions or avoidance of green8 house gas emissions, sequestration of greenhouse 

9 gases, or destruction of chlorofluorocarbons (subject 

10 to the conditions specified in section 619(b)(9) and 

11 based on the carbon dioxide equivalent value of the 

12 substance destroyed), that occur after January 1, 

13 2009; and 

14 ‘‘(2) only until the date that is 3 years after the 

15 date of enactment of this title, or the date that regu16 lations promulgated under section 732(a) take ef17 fect, whichever occurs sooner. 

18 ‘‘(d) RETIREMENT OF CREDITS.—The Administrator 

19 shall seek to ensure that offset credits described in sub20 section (a)(2) are retired for purposes of use under a pro21 gram described in subsection (b). 

22 ‘‘(e) OTHER PROGRAMS.—(1) Offset programs that 

23 either— 

24 ‘‘(A) were not established under State or tribal 

25 law or regulation; or 
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1 ‘‘(B) were not established prior to January 1, 

2 2009, 

3 but that otherwise meet all of the criteria of subsection 

4 (a)(2) may apply to the Administrator to be approved 

5 under this subsection as an eligible program for early off6 set credits under this section. 

7 ‘‘(2) The Administrator shall approve any such pro8 gram that the Administrator determines has criteria and 

9 methodologies of at least equal stringency to the criteria 

10 and methodologies of the programs established under 

11 State or tribal law or regulation that the Administrator 

12 determines meet the criteria of subsection (a)(2). The Ad13 ministrator may approve types of offsets under any such 

14 program that are subject to criteria and methodologies of 

15 at least equal stringency to the criteria and methodologies 

16 for such types of offsets applied under the programs estab17 lished under State or tribal law or regulation that the Ad18 ministrator determines meet the criteria of subsection 

19 (a)(2). The Administrator shall make a determination on 

20 any application received under this section by no later 

21 than 180 days from the date of receipt of the application. 

22 ‘‘SEC. 741. ENVIRONMENTAL CONSIDERATIONS. 

23 ‘‘If the Administrator lists forestry or other relevant 

24 land management-related offset projects as eligible offset 

25 project types under section 733, the Administrator, in con-
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1 sultation with appropriate Federal agencies, shall promul2 gate regulations for the selection and use of species in 

3 such offset projects— 

4 ‘‘(1) to ensure that native species are given pri5 mary consideration in such projects; 

6 ‘‘(2) to enhance biological diversity in such 

7 projects; 

8 ‘‘(3) to prohibit the use of federally designated 

9 or State-designated noxious weeds; 

10 ‘‘(4) to prohibit the use of a species listed by 

11 a regional or State invasive plant authority within 

12 the applicable region or State; and 

13 ‘‘(5) in the case of forestry offset projects, in 

14 accordance with widely accepted, environmentally 

15 sustainable forestry practices. 

16 ‘‘SEC. 742. TRADING. 

17 ‘‘Section 724 shall apply to the trading of offset cred18 its. 

19 ‘‘SEC. 743. INTERNATIONAL OFFSET CREDITS. 

20 ‘‘(a) IN GENERAL.—The Administrator, in consulta21 tion with the Secretary of State and the Administrator 

22 of the United States Agency for International Develop23 ment, may issue, in accordance with this section, inter24 national offset credits based on activities that reduce or 

25 avoid greenhouse gas emissions, or increase sequestration 
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1 of greenhouse gases, in a developing country. Such credits 

2 may be issued for projects eligible under section 733 or 

3 as provided in subsection (c), (d), or (e) of this section. 

4 ‘‘(b) ISSUANCE.— 

5 ‘‘(1) REGULATIONS.—Not later than 2 years 

6 after the date of enactment of this title, the Admin7 istrator, in consultation with the Secretary of State, 

8 the Administrator of the United States Agency for 

9 International Development, and any other appro10 priate Federal agency, and taking into consideration 

11 the recommendations of the Advisory Board, shall 

12 promulgate regulations for implementing this sec13 tion. Except as otherwise provided in this section, 

14 the issuance of international offset credits under this 

15 section shall be subject to the requirements of this 

16 part. 

17 ‘‘(2) REQUIREMENTS FOR INTERNATIONAL

18 OFFSET CREDITS.—The Administrator may issue 

19 international offset credits only if— 

20 ‘‘(A) the United States is a party to a bi21 lateral or multilateral agreement or arrange22 ment that includes the country in which the 

23 project or measure achieving the relevant green24 house gas emission reduction or avoidance, or 

25 greenhouse gas sequestration, has occurred; 
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1 ‘‘(B) such country is a developing country; 

2 and 

3 ‘‘(C) such agreement or arrangement— 

4 ‘‘(i) ensures that the requirements of 

5 this part apply to the issuance of inter6 national offset credits under this section; 

7 and 

8 ‘‘(ii) provides for the appropriate dis9 tribution of international offset credits 

10 issued. 

11 ‘‘(c) SECTOR-BASED CREDITS.— 

12 ‘‘(1) IN GENERAL.—In order to minimize the 

13 potential for leakage and to encourage countries to 

14 take nationally appropriate mitigation actions to re15 duce or avoid greenhouse gas emissions, or sequester 

16 greenhouse gases, the Administrator, in consultation 

17 with the Secretary of State and the Administrator of 

18 the United States Agency for International Develop19 ment, shall— 

20 ‘‘(A) identify sectors of specific countries 

21 with respect to which the issuance of inter22 national offset credits on a sectoral basis is ap23 propriate; and 

24 ‘‘(B) issue international offset credits for 

25 such sectors only on a sectoral basis. 
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1 ‘‘(2) IDENTIFICATION OF SECTORS.— 

2 ‘‘(A) GENERAL RULE.—For purposes of 

3 paragraph (1)(A), a sectoral basis shall be ap4 propriate for activities— 

5 ‘‘(i) in countries that have compara6 tively high greenhouse gas emissions, or 

7 comparatively greater levels of economic 

8 development; and 

9 ‘‘(ii) that, if located in the United 

10 States, would be within a sector subject to 

11 the compliance obligation under section 

12 722. 

13 ‘‘(B) FACTORS.—In determining the sec14 tors and countries for which international offset 

15 credits should be awarded only on a sectoral 

16 basis, the Administrator, in consultation with 

17 the Secretary of State and the Administrator of 

18 the United States Agency for International De19 velopment, shall consider the following factors: 

20 ‘‘(i) The country’s gross domestic 

21 product. 

22 ‘‘(ii) The country’s total greenhouse 

23 gas emissions. 

24 ‘‘(iii) Whether the comparable sector 

25 of the United States economy is covered by 
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1 the compliance obligation under section 

2 722. 

3 ‘‘(iv) The heterogeneity or homo4 geneity of sources within the relevant sec5 tor. 

6 ‘‘(v) Whether the relevant sector pro7 vides products or services that are sold in 

8 internationally competitive markets. 

9 ‘‘(vi) The risk of leakage if inter10 national offset credits were issued on a 

11 project-level basis, instead of on a sectoral 

12 basis, for activities within the relevant sec13 tor. 

14 ‘‘(vii) The capability of accurately 

15 measuring, monitoring, reporting, and 

16 verifying the performance of sources across 

17 the relevant sector. 

18 ‘‘(viii) Such other factors as the Ad19 ministrator, in consultation with the Sec20 retary of State and the Administrator of 

21 the United States Agency for International 

22 Development, determines are appropriate 

23 to— 

24 ‘‘(I) ensure the integrity of the 

25 United States greenhouse gas emis-
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1 sions cap established under section 

2 703; and 

3 ‘‘(II) encourage countries to take 

4 nationally appropriate mitigation ac5 tions to reduce or avoid greenhouse 

6 gas emissions, or sequester green7 house gases. 

8 ‘‘(3) SECTORAL BASIS.— 

9 ‘‘(A) DEFINITION.—In this subsection, the 

10 term ‘sectoral basis’ means the issuance of 

11 international offset credits only for the quantity 

12 of sector-wide reductions or avoidance of green13 house gas emissions, or sector-wide increases in 

14 sequestration of greenhouse gases, achieved 

15 across the relevant sector of the economy rel16 ative to a domestically enforceable baseline level 

17 of absolute emissions established in an agree18 ment or arrangement described in subsection 

19 (b)(2)(A) for the sector. 

20 ‘‘(B) BASELINE.—The baseline for a sec21 tor shall be established on an absolute basis 

22 and at levels of greenhouse gas emissions con23 sistent with the thresholds identified in section 

24 705(e)(2) and lower than would occur under a 

25 business-as-usual scenario taking into account 
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1 relevant domestic or international policies or in2 centives to reduce greenhouse gas emissions, 

3 among other factors, and additionality and per4 formance shall be determined on the basis of 

5 such baseline. 

6 ‘‘(d) CREDITS ISSUED BY AN INTERNATIONAL

7 BODY.— 

8 ‘‘(1) IN GENERAL.—The Administrator, in con9 sultation with the Secretary of State, may issue 

10 international offset credits in exchange for instru11 ments in the nature of offset credits that are issued 

12 by an international body established pursuant to the 

13 United Nations Framework Convention on Climate 

14 Change, to a protocol to such Convention, or to a 

15 treaty that succeeds such Convention. The Adminis16 trator may issue international offset credits under 

17 this subsection only if, in addition to the require18 ments of subsection (b), the Administrator has de19 termined that the international body that issued the 

20 instruments has implemented substantive and proce21 dural requirements for the relevant project type that 

22 provide equal or greater assurance of the integrity of 

23 such instruments as is provided by the requirements 

24 of this part. Starting January 1, 2016, the Adminis25 trator shall issue no offset credit pursuant to this 
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1 subsection if the activity generating the greenhouse 

2 gas emissions reductions or avoidance, or greenhouse 

3 gas sequestration, occurs in a country and sector 

4 identified by the Administrator under subsection (c). 

5 ‘‘(2) RETIREMENT.—The Administrator, in 

6 consultation with the Secretary of State, shall seek, 

7 by whatever means appropriate, including agree8 ments, arrangements, or technical cooperation with 

9 the international issuing body described in para10 graph (1), to ensure that such body— 

11 ‘‘(A) is notified of the Administrator’s 

12 issuance, under this subsection, of an inter13 national offset credit in exchange for an instru14 ment issued by such international body; and 

15 ‘‘(B) provides, to the extent feasible, for 

16 the disqualification of the instrument issued by 

17 such international body for subsequent use 

18 under any relevant foreign or international 

19 greenhouse gas regulatory program, regardless 

20 of whether such use is a sale, exchange, or sub21 mission to satisfy a compliance obligation. 

22 ‘‘(e) OFFSETS FROM REDUCED DEFORESTATION.— 

23 ‘‘(1) REQUIREMENTS.—The Administrator, in 

24 accordance with the regulations promulgated under 

25 subsection (b)(1) and an agreement or arrangement 
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1 described in subsection (b)(2)(A), shall issue inter2 national offset credits for greenhouse gas emission 

3 reductions achieved through activities to reduce de4 forestation only if, in addition to the requirements of 

5 subsection (b)— 

6 ‘‘(A) the activity occurs in— 

7 ‘‘(i) a country listed by the Adminis8 trator pursuant to paragraph (2); 

9 ‘‘(ii) a state or province listed by the 

10 Administrator pursuant to paragraph (5); 

11 or 

12 ‘‘(iii) a country listed by the Adminis13 trator pursuant to paragraph (6); 

14 ‘‘(B) except as provided in paragraph (5) 

15 or (6), the quantity of the international offset 

16 credits is determined by comparing the national 

17 emissions from deforestation relative to a na18 tional deforestation baseline for that country es19 tablished, in accordance with an agreement or 

20 arrangement described in subsection (b)(2)(A), 

21 pursuant to paragraph (4); 

22 ‘‘(C) the reduction in emissions from de23 forestation has occurred before the issuance of 

24 the international offset credit and, taking into 

25 consideration relevant international standards, 
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1 has been demonstrated using ground-based in2 ventories, remote sensing technology, and other 

3 methodologies to ensure that all relevant carbon 

4 stocks are accounted; 

5 ‘‘(D) the Administrator has made appro6 priate adjustments, such as discounting for any 

7 additional uncertainty, to account for cir8 cumstances specific to the country, including its 

9 technical capacity described in paragraph 

10 (2)(A); 

11 ‘‘(E) the activity is designed, carried out, 

12 and managed— 

13 ‘‘(i) in accordance with widely accept14 ed, environmentally sustainable forest 

15 management practices; 

16 ‘‘(ii) to promote or restore native for17 est species and ecosystems where prac18 ticable, and to avoid the introduction of 

19 invasive nonnative species; 

20 ‘‘(iii) in a manner that gives due re21 gard to the rights and interests of local 

22 communities, indigenous peoples, forest-de23 pendent communities, and vulnerable social 

24 groups; 
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1 ‘‘(iv) with consultations with, and full 

2 participation of, local communities, indige3 nous peoples, and forest-dependent com4 munities, in affected areas, as partners 

5 and primary stakeholders, prior to and 

6 during the design, planning, implementa7 tion, and monitoring and evaluation of ac8 tivities; and 

9 ‘‘(v) with equitable sharing of profits 

10 and benefits derived from offset credits 

11 with local communities, indigenous peoples, 

12 and forest-dependent communities; and 

13 ‘‘(F) the reduction otherwise satisfies and 

14 is consistent with any relevant requirements es15 tablished by an agreement reached under the 

16 auspices of the United Nations Framework 

17 Convention on Climate Change. 

18 ‘‘(2) ELIGIBLE COUNTRIES.—The Adminis19 trator, in consultation with the Secretary of State 

20 and the Administrator of the United States Agency 

21 for International Development, and in accordance 

22 with an agreement or arrangement described in sub23 section (b)(2)(A), shall establish, and periodically re24 view and update, a list of the developing countries 
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1 that have the capacity to participate in deforestation 

2 reduction activities at a national level, including— 

3 ‘‘(A) the technical capacity to monitor, 

4 measure, report, and verify forest carbon fluxes 

5 for all significant sources of greenhouse gas 

6 emissions from deforestation with an acceptable 

7 level of uncertainty, as determined taking into 

8 account relevant internationally accepted meth9 odologies, such as those established by the 

10 Intergovernmental Panel on Climate Change; 

11 ‘‘(B) the institutional capacity to reduce 

12 emissions from deforestation, including strong 

13 forest governance and mechanisms to equitably 

14 distribute deforestation resources for local ac15 tions; and 

16 ‘‘(C) a land use or forest sector strategic 

17 plan that— 

18 ‘‘(i) assesses national and local drivers 

19 of deforestation and forest degradation and 

20 identifies reforms to national policies need21 ed to address them; 

22 ‘‘(ii) estimates the country’s emissions 

23 from deforestation and forest degradation; 

24 ‘‘(iii) identifies improvements in data 

25 collection, monitoring, and institutional ca-
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•HR 2454 EH

1 pacity necessary to implement a national 

2 deforestation reduction program; and 

3 ‘‘(iv) establishes a timeline for imple4 menting the program and transitioning to 

5 low-emissions development with respect to 

6 emissions from forest and land use activi7 ties. 

8 ‘‘(3) PROTECTION OF INTERESTS.—With re9 spect to an agreement or arrangement described in 

10 subsection (b)(2)(A) that addresses international off11 set credits under this subsection, the Administrator, 

12 in consultation with the Secretary of State and the 

13 Administrator of the United States Agency for 

14 International Development, shall seek to ensure the 

15 establishment and enforcement by such country of 

16 legal regimes, processes, standards, and safeguards 

17 that— 

18 ‘‘(A) give due regard to the rights and in19 terests of local communities, indigenous peoples, 

20 forest-dependent communities, and vulnerable 

21 social groups; 

22 ‘‘(B) promote consultations with, and full 

23 participation of, forest-dependent communities 

24 and indigenous peoples in affected areas, as 

25 partners and primary stakeholders, prior to and 
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1 during the design, planning, implementation, 

2 and monitoring and evaluation of activities; and 

3 ‘‘(C) encourage equitable sharing of profits 

4 and benefits derived from international offset 

5 credits with local communities, indigenous peo6 ples, and forest-dependent communities. 

7 ‘‘(4) NATIONAL DEFORESTATION BASELINE.—A 

8 national deforestation baseline established under this 

9 subsection shall— 

10 ‘‘(A) be national in scope; 

11 ‘‘(B) be consistent with nationally appro12 priate mitigation commitments or actions with 

13 respect to deforestation, taking into consider14 ation the average annual historical deforestation 

15 rates of the country during a period of at least 

16 5 years, the applicable drivers of deforestation, 

17 and other factors to ensure additionality; 

18 ‘‘(C) establish a trajectory that would re19 sult in zero net deforestation by not later than 

20 20 years after the national deforestation base21 line has been established; 

22 ‘‘(D) be adjusted over time to take account 

23 of changing national circumstances; 
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1 ‘‘(E) be designed to account for all signifi2 cant sources of greenhouse gas emissions from 

3 deforestation in the country; and 

4 ‘‘(F) be consistent with the national defor5 estation baseline, if any, established for such 

6 country under section 754(d)(1) and (2). 

7 ‘‘(5) STATE-LEVEL OR PROVINCE-LEVEL AC8 TIVITIES.— 

9 ‘‘(A) ELIGIBLE STATES OR PROVINCES.— 

10 The Administrator, in consultation with the 

11 Secretary of State and the Administrator of the 

12 United States Agency for International Devel13 opment, shall establish within 2 years after the 

14 date of enactment of this title, and periodically 

15 review and update, a list of states or provinces 

16 in developing countries where— 

17 ‘‘(i) the developing country is not in18 cluded on the list of countries established 

19 pursuant to paragraph (6)(A); 

20 ‘‘(ii) the state or province by itself is 

21 a major emitter of greenhouse gases from 

22 tropical deforestation on a scale commen23 surate to the emissions of other countries; 

24 and 
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1 ‘‘(iii) the state or province meets the 

2 eligibility criteria in paragraphs (2) and 

3 (3) for the geographic area under its juris4 diction. 

5 ‘‘(B) ACTIVITIES.—The Administrator may 

6 issue international offset credits for greenhouse 

7 gas emission reductions achieved through activi8 ties to reduce deforestation at a state or provin9 cial level that meet the requirements of this sec10 tion. Such credits shall be determined by com11 paring the emissions from deforestation within 

12 that state or province relative to the state or 

13 province deforestation baseline for that state or 

14 province established, in accordance with an 

15 agreement or arrangement described in sub16 section (b)(2)(A), pursuant to subparagraph 

17 (C) of this paragraph. 

18 ‘‘(C) STATE OR PROVINCE DEFOREST19 ATION BASELINE.—A state or province deforest20 ation baseline shall— 

21 ‘‘(i) be consistent with any existing 

22 nationally appropriate mitigation commit23 ments or actions for the country in which 

24 the activity is occurring, taking into con25 sideration the average annual historical de-
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1 forestation rates of the state or province 

2 during a period of at least 5 years, rel3 evant drivers of deforestation, and other 

4 factors to ensure additionality; 

5 ‘‘(ii) establish a trajectory that would 

6 result in zero net deforestation by not later 

7 than 20 years after the state or province 

8 deforestation baseline has been established; 

9 and 

10 ‘‘(iii) be designed to account for all 

11 significant sources of greenhouse gas emis12 sions from deforestation in the state or 

13 province and adjusted to fully account for 

14 emissions leakage outside the state or 

15 province. 

16 ‘‘(D) PHASE OUT.—Beginning 5 years 

17 after the first calendar year for which a covered 

18 entity must demonstrate compliance with sec19 tion 722(a), the Administrator shall issue no 

20 further international offset credits for eligible 

21 state-level or province-level activities to reduce 

22 deforestation pursuant to this paragraph. 

23 ‘‘(6) PROJECTS AND PROGRAMS TO REDUCE

24 DEFORESTATION.— 
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1 ‘‘(A) ELIGIBLE COUNTRIES.—The Admin2 istrator, in consultation with the Secretary of 

3 State and the Administrator of the United 

4 States Agency for International Development, 

5 shall establish within 2 years after the date of 

6 enactment of this title, and periodically review 

7 and update, a list of developing countries each 

8 of which— 

9 ‘‘(i) the Administrator determines, 

10 based on recent, credible, and reliable 

11 emissions data, accounts for less than 1 

12 percent of global greenhouse gas emissions 

13 and less than 3 percent of global forest14 sector and land use change greenhouse gas 

15 emissions; and 

16 ‘‘(ii) has, or in the determination of 

17 the Administrator is making a good faith 

18 effort to develop, a land use or forest sec19 tor strategic plan that meets the criteria 

20 described in paragraph (2)(C). 

21 ‘‘(B) ACTIVITIES.—The Administrator may 

22 issue international offset credits for greenhouse 

23 gas emission reductions achieved through 

24 project or program level activities to reduce de25 forestation in countries listed under subpara-
822 

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1 graph (A) that meet the requirements of this 

2 section. The quantity of international offset 

3 credits shall be determined by comparing the 

4 project-level or program-level emissions from 

5 deforestation to a deforestation baseline for 

6 such project or program established pursuant to 

7 subparagraph (C). 

8 ‘‘(C) PROJECT-LEVEL OR PROGRAM-LEVEL

9 BASELINE.—A project-level or program-level de10 forestation baseline shall— 

11 ‘‘(i) be consistent with any existing 

12 nationally appropriate mitigation commit13 ments or actions for the country in which 

14 the project or program is occurring, taking 

15 into consideration the average annual his16 torical deforestation rates relevant to the 

17 specific project or program during a period 

18 of at least 5 years, applicable drivers of de19 forestation, and other factors to ensure 

20 additionality; 

21 ‘‘(ii) be designed to account for all 

22 significant sources of greenhouse gas emis23 sions from deforestation in the project or 

24 program boundary; and 
823 

•HR 2454 EH

1 ‘‘(iii) be adjusted to fully account for 

2 emissions leakage outside the project or 

3 program boundary. 

4 ‘‘(D) PHASE OUT.—(i) Beginning 5 years 

5 after the first calendar year for which a covered 

6 entity must demonstrate compliance with sec7 tion 722(a), the Administrator shall issue no 

8 further international offset credits for project9 level or program-level activities pursuant to this 

10 paragraph, except as provided in clause (ii). 

11 ‘‘(ii) The Administrator may extend the 

12 phase out deadline for the issuance of inter13 national offset credits under this paragraph by 

14 up to 8 years with respect to eligible activities 

15 taking place in a least developed country, which 

16 for purposes of this paragraph is defined as a 

17 foreign country that the United Nations has 

18 identified as among the least developed of devel19 oping countries at the time that the Adminis20 trator determines to provide an extension, if the 

21 Administrator, in consultation with the Sec22 retary of State and the Administrator of the 

23 United States Agency for International Devel24 opment, determines the country— 
824 

•HR 2454 EH

1 ‘‘(I) lacks sufficient capacity to adopt 

2 and implement effective programs to 

3 achieve reductions in deforestation meas4 ured against national baselines; 

5 ‘‘(II) is receiving support under part 

6 E to develop such capacity; and 

7 ‘‘(III) has developed and is working to 

8 implement a credible national strategy or 

9 plan to reduce deforestation. 

10 ‘‘(7) DEFORESTATION.—In implementing this 

11 subsection, the Administrator, taking into consider12 ation the recommendations of the Advisory Board, 

13 may include forest degradation, or soil carbon losses 

14 associated with forested wetlands or peatlands, with15 in the meaning of deforestation. 

16 ‘‘(8) CONSULTATION.—In implementing this 

17 subsection, the Administrator shall consult with the 

18 Secretary of Agriculture on relevant matters within 

19 such Secretary’s area of expertise. 

20 ‘‘(f) MODIFICATION OF REQUIREMENTS.—In promul21 gating regulations under subsection (b)(1) with respect to 

22 the issuance of international offset credits under sub23 section (c), (d), or (e), the Administrator, in consultation 

24 with the Secretary of State and the Administrator of the 

25 United States Agency for International Development, may 
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•HR 2454 EH

1 modify or omit a requirement of this part (excluding the 

2 requirements of this section) if the Administrator deter3 mines that the application of that requirement to such 

4 subsection is not feasible. In modifying or omitting such 

5 a requirement on the basis of infeasibility, the Adminis6 trator, in consultation with the Secretary of State and the 

7 Administrator of the United States Agency for Inter8 national Development, shall ensure, with an adequate 

9 margin of safety, the integrity of international offset cred10 its issued under this section and of the greenhouse gas 

11 emissions cap established pursuant to section 703. 

12 ‘‘(g) AVOIDING DOUBLE COUNTING.—The Adminis13 trator, in consultation with the Secretary of State, shall 

14 seek, by whatever means appropriate, including agree15 ments, arrangements, or technical cooperation, to ensure 

16 that activities on the basis of which international offset 

17 credits are issued under this section are not used for com18 pliance with an obligation to reduce or avoid greenhouse 

19 gas emissions, or increase greenhouse gas sequestration, 

20 under a foreign or international regulatory system. In ad21 dition, no international offset credits shall be issued for 

22 emission reductions from activities with respect to which 

23 emission allowances were allocated under section 781 for 

24 distribution under part E. 
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•HR 2454 EH

1 ‘‘(h) LIMITATION.—The Administrator shall not issue 

2 international offset credits generated by projects based on 

3 the destruction of hydrofluorocarbons. 

4 ‘‘PART E—SUPPLEMENTAL EMISSIONS 

5 REDUCTIONS FROM REDUCED DEFORESTATION 

6 ‘‘SEC. 751. DEFINITIONS. 

7 ‘‘In this part: 

8 ‘‘(1) LEAKAGE PREVENTION ACTIVITIES.—The 

9 term ‘leakage prevention activities’ means activities 

10 in developing countries that are directed at pre11 serving existing forest carbon stocks, including for12 ested wetlands and peatlands, that might, absent 

13 such activities, be lost through leakage. 

14 ‘‘(2) NATIONAL DEFORESTATION REDUCTION

15 ACTIVITIES.—The term ‘national deforestation re16 duction activities’ means activities in developing 

17 countries that reduce a quantity of greenhouse gas 

18 emissions from deforestation that is calculated by 

19 measuring actual emissions against a national defor20 estation baseline established pursuant to section 

21 754(d)(1) and (2). 

22 ‘‘(3) SUBNATIONAL DEFORESTATION REDUC23 TION ACTIVITIES.—The term ‘subnational deforest24 ation reduction activities’ means activities in devel25 oping countries that reduce a quantity of greenhouse 
827 

•HR 2454 EH

1 gas emissions from deforestation that are calculated 

2 by measuring actual emissions using an appropriate 

3 baseline established by the Administrator that is less 

4 than national in scope. 

5 ‘‘(4) SUPPLEMENTAL EMISSIONS REDUC6 TIONS.—The term ‘supplemental emissions reduc7 tions’ means greenhouse gas emissions reductions 

8 achieved from reduced or avoided deforestation 

9 under this part. 

10 ‘‘(5) USAID.—The term ‘USAID’ means the 

11 United States Agency for International Develop12 ment. 

13 ‘‘SEC. 752. FINDINGS. 

14 ‘‘Congress finds that— 

15 ‘‘(1) as part of a global effort to mitigate cli16 mate change, it is in the national interest of the 

17 United States to assist developing countries to re18 duce and ultimately halt emissions from deforest19 ation; 

20 ‘‘(2) deforestation is one of the largest sources 

21 of greenhouse gas emissions in developing countries, 

22 amounting to roughly 20 percent of overall emissions 

23 globally; 

24 ‘‘(3) recent scientific analysis shows that it will 

25 be substantially more difficult to limit the increase 
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•HR 2454 EH

1 in global temperatures to less than 2 degrees centi2 grade above preindustrial levels without reducing 

3 and ultimately halting net emissions from deforest4 ation; 

5 ‘‘(4) reducing emissions from deforestation is 

6 highly cost-effective, compared to many other 

7 sources of emissions reductions; 

8 ‘‘(5) in addition to contributing significantly to 

9 worldwide efforts to address global warming, assist10 ance under this part will generate significant envi11 ronmental and social cobenefits, including protection 

12 of biodiversity, ecosystem services, and forest-related 

13 livelihoods; and 

14 ‘‘(6) under the Bali Action Plan, developed 

15 country parties to the United Nations Framework 

16 Convention on Climate Change, including the United 

17 States, committed to ‘enhanced action on the provi18 sion of financial resources and investment to support 

19 action on mitigation and adaptation and technology 

20 cooperation,’ including, inter alia, consideration of 

21 ‘improved access to adequate, predictable, and sus22 tainable financial resources and financial and tech23 nical support, and the provision of new and addi24 tional resources, including official and concessional 

25 funding for developing country parties’ . 
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•HR 2454 EH

1 ‘‘SEC. 753. SUPPLEMENTAL EMISSIONS REDUCTIONS 

2 THROUGH REDUCED DEFORESTATION. 

3 ‘‘(a) REGULATIONS.—Not later than 2 years after 

4 the date of enactment of this title, the Administrator, in 

5 consultation with the Administrator of USAID and any 

6 other appropriate agencies, shall promulgate regulations 

7 establishing a program to use emission allowances set 

8 aside for this purpose under section 781 to reduce green9 house gas emissions from deforestation in developing 

10 countries in accordance with the requirements of this part. 

11 ‘‘(b) OBJECTIVES.—The objectives of the program es12 tablished under this section shall be to— 

13 ‘‘(1) achieve supplemental emissions reductions 

14 of at least 720,000,000 tons of carbon dioxide equiv15 alent in 2020, a cumulative amount of at least 

16 6,000,000,000 tons of carbon dioxide equivalent by 

17 December 31, 2025, and additional supplemental 

18 emissions reductions in subsequent years; 

19 ‘‘(2) build capacity to reduce deforestation in 

20 developing countries experiencing deforestation, in21 cluding preparing developing countries to participate 

22 in international markets for international offset 

23 credits for reduced emissions from deforestation; and 

24 ‘‘(3) preserve existing forest carbon stocks in 

25 countries where such forest carbon may be vulner-
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•HR 2454 EH

1 able to international leakage, particularly in devel2 oping countries with largely intact native forests. 

3 ‘‘SEC. 754. REQUIREMENTS FOR INTERNATIONAL DEFOR4 ESTATION REDUCTION PROGRAM. 

5 ‘‘(a) ELIGIBLE COUNTRIES.—The Administrator 

6 may support activities under this part only with respect 

7 to a developing country that— 

8 ‘‘(1) the Administrator, in consultation with the 

9 Administrator of USAID, determines is experiencing 

10 deforestation or forest degradation or has standing 

11 forest carbon stocks that may be at risk of deforest12 ation or degradation; and 

13 ‘‘(2) has entered into a bilateral or multilateral 

14 agreement or arrangement with the United States 

15 establishing the conditions of its participation in the 

16 program established under this part, which shall in17 clude an agreement to meet the standards estab18 lished under subsection (d) for the activities to 

19 which those standards apply. 

20 ‘‘(b) ACTIVITIES.— 

21 ‘‘(1) AUTHORIZED ACTIVITIES.—Subject to the 

22 requirements of this part, the Administrator, in con23 sultation with the Administrator of USAID, may 

24 support activities to achieve the objectives identified 

25 in section 753(b), including— 
831 

•HR 2454 EH

1 ‘‘(A) national deforestation reduction ac2 tivities; 

3 ‘‘(B) subnational deforestation reduction 

4 activities, including pilot activities that reduce 

5 greenhouse gas emissions but are subject to sig6 nificant uncertainty; 

7 ‘‘(C) activities to measure, monitor, and 

8 verify deforestation, avoided deforestation, and 

9 deforestation rates; 

10 ‘‘(D) leakage prevention activities; 

11 ‘‘(E) development of measurement, moni12 toring, and verification capacities to enable a 

13 country to quantify supplemental emissions re14 ductions and to generate for sale offset credits 

15 from reduced or avoided deforestation; 

16 ‘‘(F) development of governance structures 

17 to reduce deforestation and illegal logging; 

18 ‘‘(G) enforcement of requirements for re19 duced deforestation or forest conservation; 

20 ‘‘(H) efforts to combat illegal logging and 

21 increase enforcement cooperation; 

22 ‘‘(I) providing incentives for policy reforms 

23 to achieve the objectives identified in section 

24 753(b); and 
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•HR 2454 EH

1 ‘‘(J) monitoring and evaluation of the re2 sults of the activities conducted under this sec3 tion. 

4 ‘‘(2) ACTIVITIES SELECTED BY USAID.— 

5 ‘‘(A) The Administrator of USAID, in con6 sultation with the Administrator, may select for 

7 support and implementation pursuant to sub8 section (c) any of the activities described in 

9 paragraph (1), consistent with this part and the 

10 regulations promulgated under subsection (d), 

11 and subject to the requirement to achieve the 

12 objectives listed in section 753(b)(1). 

13 ‘‘(B) With respect to the activities listed in 

14 subparagraphs (D) through (J) of paragraph 

15 (1), the Administrator of USAID, in consulta16 tion with the Administrator, shall have primary 

17 but not exclusive responsibility for selecting the 

18 activities to be supported and implemented. 

19 ‘‘(3) INTERAGENCY COORDINATION.—The Ad20 ministrator and the Administrator of USAID shall 

21 jointly develop and biennially update a strategic plan 

22 for meeting the objectives listed in section 753(b) 

23 and shall execute a memorandum of understanding 

24 delineating the agencies’ respective roles in imple25 menting this part. 
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•HR 2454 EH

1 ‘‘(c) MECHANISMS.— 

2 ‘‘(1) IN GENERAL.—The Administrator may 

3 support activities to achieve the objectives identified 

4 in section 753(b) by— 

5 ‘‘(A) developing and implementing pro6 grams and projects that achieve such objectives; 

7 and 

8 ‘‘(B) distributing emission allowances to a 

9 country that is eligible under subsection (a), to 

10 a private or public group (including inter11 national organizations), or to an international 

12 fund established by an international agreement 

13 to which the United States is a party, to carry 

14 out activities to achieve such objectives. 

15 ‘‘(2) USAID ACTIVITIES.—With respect to ac16 tivities selected and implemented by the Adminis17 trator of USAID pursuant to subsection (b)(2), the 

18 Administrator shall distribute emission allowances as 

19 provided in paragraph (1) of this subsection based 

20 upon the direction of the Administrator of USAID, 

21 subject to the availability of allowances for such ac22 tivities. 

23 ‘‘(3) IMPLEMENTATION THROUGH INTER24 NATIONAL ORGANIZATIONS.—If support is distrib25 uted through an international organization, the 
834 

•HR 2454 EH

1 agency responsible for selecting activities in accord2 ance with subsection (b)(1) or (2), in consultation 

3 with the Secretary of State, shall ensure the estab4 lishment and implementation of adequate mecha5 nisms to apply and enforce the eligibility require6 ments and other requirements of this section. 

7 ‘‘(4) ROLE OF THE SECRETARY OF STATE.— 

8 The Administrator may not distribute emission al9 lowances under this part to the government of an10 other country or to an international organization or 

11 international fund unless the Secretary of State has 

12 concurred with such distribution. 

13 ‘‘(d) STANDARDS.—The Administrator, in consulta14 tion with the Administrator of USAID, shall promulgate 

15 regulations establishing standards to ensure that supple16 mental emissions reductions achieved through supported 

17 activities are additional, measurable, verifiable, perma18 nent, and monitored, and account for leakage and uncer19 tainty. In addition, such standards shall— 

20 ‘‘(1) require the establishment of a national de21 forestation baseline for each country with national 

22 deforestation reduction activities that is used to ac23 count for reductions achieved from such activities; 

24 ‘‘(2) provide that a national deforestation base25 line established under paragraph (1) shall— 
835 

•HR 2454 EH

1 ‘‘(A) be national in scope; 

2 ‘‘(B) be consistent with nationally appro3 priate mitigation commitments or actions with 

4 respect to deforestation, taking into consider5 ation the average annual historical deforestation 

6 rates of the country during a period of at least 

7 5 years, the applicable drivers of deforestation, 

8 and other factors to ensure additionality; 

9 ‘‘(C) establish a trajectory that would re10 sult in zero net deforestation by not later than 

11 20 years from the date the baseline is estab12 lished; 

13 ‘‘(D) be adjusted over time to take account 

14 of changing national circumstances; 

15 ‘‘(E) be designed to account for all signifi16 cant sources of greenhouse gas emissions from 

17 deforestation in the country; and 

18 ‘‘(F) be consistent with the national defor19 estation baseline, if any, established for such 

20 country under section 743(e)(4); 

21 ‘‘(3) with respect to support provided pursuant 

22 to subsection (b)(1)(A) or (B), require supplemental 

23 emissions reductions to be achieved and verified 

24 prior to compensation through the distribution of 

25 emission allowances under this part; 
836 

•HR 2454 EH

1 ‘‘(4) with respect to accounting for subnational 

2 deforestation reduction activities that lack the stand3 ardized or precise measurement and monitoring 

4 techniques needed for a full accounting of changes 

5 in emissions or baselines, or are subject to other 

6 sources of uncertainty, apply a conservative discount 

7 factor to reflect the uncertainty regarding the levels 

8 of reductions achieved; 

9 ‘‘(5) ensure that activities under this part shall 

10 be designed, carried out, and managed— 

11 ‘‘(A) in accordance with widely accepted, 

12 environmentally sustainable forest management 

13 practices; 

14 ‘‘(B) to promote or restore native forest 

15 species and ecosystems where practicable, and 

16 to avoid the introduction of invasive nonnative 

17 species; 

18 ‘‘(C) in a manner that gives due regard to 

19 the rights and interests of local communities, 

20 indigenous peoples, forest-dependent commu21 nities, and vulnerable social groups; 

22 ‘‘(D) with consultations with, and full par23 ticipation of, local communities, indigenous peo24 ples, and forest-dependent communities in af25 fected areas, as partners and primary stake-
837 

•HR 2454 EH

1 holders, prior to and during the design, plan2 ning, implementation, and monitoring and eval3 uation of activities; and 

4 ‘‘(E) with equitable sharing of profits and 

5 benefits derived from the activities with local 

6 communities, indigenous peoples, and forest-de7 pendent communities; and 

8 ‘‘(6) with respect to support for all activities 

9 under this part, seek to ensure the establishment 

10 and enforcement, by the country in which the activi11 ties occur, of legal regimes, standards, processes, 

12 and safeguards that— 

13 ‘‘(A) give due regard to the rights and in14 terests of local communities, indigenous peoples, 

15 forest-dependent communities, and vulnerable 

16 social groups; 

17 ‘‘(B) promote consultations with local com18 munities and indigenous peoples and forest-de19 pendent communities in affected areas, as part20 ners and primary stakeholders, prior to and 

21 during the design, planning, implementation, 

22 monitoring, and evaluation of activities under 

23 this part; and 

24 ‘‘(C) encourage equitable sharing of profits 

25 and benefits from incentives for emissions re-
838 

•HR 2454 EH

1 ductions or leakage prevention with local com2 munities, indigenous peoples, and forest-de3 pendent communities. 

4 ‘‘(e) SCOPE.—(1) The Administrator shall include 

5 within the scope of activities under this part reduced emis6 sions from forest degradation. 

7 ‘‘(2) The Administrator, in consultation with the Ad8 ministrator of USAID, may decide, taking into account 

9 any advice from the Advisory Board, to expand, where ap10 propriate, the scope of activities under this part to include 

11 reduced soil carbon-derived emissions associated with de12 forestation and degradation of forested wetlands and 

13 peatlands. 

14 ‘‘(f) ACCOUNTING.—The Administrator shall estab15 lish a publicly accessible registry of the supplemental emis16 sions reductions achieved through support provided under 

17 this part each year, after appropriately discounting for un18 certainty and other relevant factors as required by the 

19 standards established under subsection (d). 

20 ‘‘(g) TRANSITION TO NATIONAL REDUCTIONS.—Be21 ginning 5 years after the date that a country entered into 

22 the agreement or arrangement required under subsection 

23 (a)(2), the Administrator shall provide no further com24 pensation through emission allowances to that country 

25 under this part for any subnational deforestation reduc-
839 

•HR 2454 EH

1 tion activities, except that the Administrator may extend 

2 this period by an additional 5 years if the Administrator, 

3 in consultation with the Administrator of USAID, deter4 mines that— 

5 ‘‘(1) the country is making substantial progress 

6 towards adopting and implementing a program to 

7 achieve reductions in deforestation measured against 

8 a national baseline; 

9 ‘‘(2) the greenhouse gas emissions reductions 

10 achieved are not resulting in significant leakage; and 

11 ‘‘(3) the greenhouse gas emissions reductions 

12 achieved are being appropriately discounted to ac13 count for any leakage that is occurring. 

14 The limitation under this subsection shall not apply to 

15 support for activities to further the objectives listed in sec16 tion 753(b)(2) or (3). 

17 ‘‘(h) COORDINATION WITH U.S. FOREIGN ASSIST18 ANCE.—Subject to the direction of the President, the Ad19 ministrator and the Administrator of USAID shall, to the 

20 extent practicable and consistent with the objectives of 

21 this program, seek to align activities under this section 

22 with broader development, poverty alleviation, or natural 

23 resource management objectives and initiatives in the re24 cipient country. 
840 

•HR 2454 EH

1 ‘‘(i) SUPPORT AS SUPPLEMENT.—The provision of 

2 support for activities under this part shall be used to sup3 plement, and not to supplant, any other Federal, State, 

4 or local support available to carry out such qualifying ac5 tivities under this part. 

6 ‘‘(j) NOT ELIGIBLE FOR OFFSET CREDIT.—Activities 

7 that receive support under this part shall not be issued 

8 offset credits for the greenhouse gas emissions reductions 

9 or avoidance, or greenhouse gas sequestration, produced 

10 by such activities. 

11 ‘‘SEC. 755. REPORTS AND REVIEWS. 

12 ‘‘(a) REPORTS.—Not later than January 1, 2014, 

13 and annually thereafter, the Administrator and the Ad14 ministrator of USAID shall submit to the Committee on 

15 Energy and Commerce and the Committee on Foreign Af16 fairs of the House of Representatives, and the Committee 

17 on Environment and Public Works and the Committee on 

18 Foreign Relations of the Senate, and make available to 

19 the public, a report on the support provided under this 

20 part during the prior fiscal year. The report shall in21 clude— 

22 ‘‘(1) a statement of the quantity of supple23 mental emissions reductions for which compensation 

24 in the form of emission allowances was provided 

25 under this part during the prior fiscal year, as reg-
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•HR 2454 EH

1 istered by the Administrator under section 754(f); 

2 and 

3 ‘‘(2) a description of the national and sub4 national deforestation reduction activities, capacity5 building activities, and leakage prevention activities 

6 supported under this part, including a statement of 

7 the quantity of emission allowances distributed to 

8 each recipient for each activity during the prior fis9 cal year, and a description of what was accomplished 

10 through each of the activities. 

11 ‘‘(b) REVIEWS.—Not later than 4 years after the date 

12 of enactment of this title and every 5 years thereafter, 

13 the Administrator and the Administrator of USAID, tak14 ing into consideration any evaluation by or recommenda15 tions from the Advisory Board established under section 

16 731, shall conduct a review of the activities undertaken 

17 pursuant to this part and make any appropriate changes 

18 in the program established under this part, consistent with 

19 the requirements of this part, based on the findings of the 

20 review. The review shall include the effects of the activities 

21 on— 

22 ‘‘(1) total documented carbon stocks of each 

23 country that directly or indirectly received support 

24 under this part compared with such country’s na-
842 

•HR 2454 EH

1 tional deforestation baseline established under sec2 tion 754(d)(1) and (2); 

3 ‘‘(2) the number of countries with the capacity 

4 to generate for sale instruments in the nature of off5 set credits from forest-related activities, and the 

6 amount of such activities; 

7 ‘‘(3) forest governance in each country that di8 rectly or indirectly received support under this part; 

9 ‘‘(4) indigenous peoples and forest-dependent 

10 communities residing in areas affected by such ac11 tivities; 

12 ‘‘(5) biodiversity and ecosystem services within 

13 forested areas associated with the activities; 

14 ‘‘(6) subnational and international leakage; and 

15 ‘‘(7) any program or mechanism established 

16 under the United Nations Framework Convention on 

17 Climate Change related to greenhouse gas emissions 

18 from deforestation. 

19 ‘‘SEC. 756. LEGAL EFFECT OF PART. 

20 ‘‘(1) IN GENERAL.—Nothing in this part super21 sedes, limits, or otherwise affects any restriction im22 posed by Federal law (including regulations) on any 

23 interaction between an entity located in the United 

24 States and an entity located in a foreign country. 
843 

•HR 2454 EH

1 ‘‘(2) ROLE OF THE SECRETARY OF STATE.— 

2 Nothing in this part shall be construed as affecting 

3 the role of the Secretary of State or the responsibil4 ities of the Secretary under section 622(c) of the 

5 Foreign Assistance Act of 1961.’’. 

6 SEC. 312. DEFINITIONS. 

7 Title VII of the Clean Air Act, as added by section 

8 311 of this Act, is amended by inserting before part A 

9 the following new section: 

10 ‘‘SEC. 700. DEFINITIONS. 

11 ‘‘In this title: 

12 ‘‘(1) ADDITIONAL.—The term ‘additional’, 

13 when used with respect to reductions or avoidance of 

14 greenhouse gas emissions, or to sequestration of 

15 greenhouse gases, means reductions, avoidance, or 

16 sequestration that result in a lower level of net 

17 greenhouse gas emissions or atmospheric concentra18 tions than would occur in the absence of an offset 

19 project. 

20 ‘‘(2) ADDITIONALITY.—The term ‘additionality’ 

21 means the extent to which reductions or avoidance 

22 of greenhouse gas emissions, or sequestration of 

23 greenhouse gases, are additional. 
844 

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1 ‘‘(3) ADVISORY BOARD.—The term ‘Advisory 

2 Board’ means the Offsets Integrity Advisory Board 

3 established under section 731. 

4 ‘‘(4) AFFILIATED.—The term ‘affiliated’— 

5 ‘‘(A) when used in relation to an entity 

6 means owned or controlled by, or under com7 mon ownership or control with, another entity, 

8 as determined by the Administrator; and 

9 ‘‘(B) when used in relation to a natural 

10 gas local distribution company, means owned or 

11 controlled by, or under common ownership or 

12 control with, another natural gas local distribu13 tion company, as determined by the Adminis14 trator. 

15 ‘‘(5) ALLOWANCE.—The term ‘allowance’ 

16 means a limited authorization to emit, or have at17 tributable greenhouse gas emissions in an amount 

18 of, 1 ton of carbon dioxide equivalent of a green19 house gas in accordance with this title. Such term 

20 includes an emission allowance, a compensatory al21 lowance, and an international emission allowance, 

22 but does not include an international reserve allow23 ance established under section 766. 
845 

•HR 2454 EH

1 ‘‘(6) ATTRIBUTABLE GREENHOUSE GAS EMIS2 SIONS.—The term ‘attributable greenhouse gas emis3 sions’, for a given calendar year, means— 

4 ‘‘(A) for a covered entity that is a fuel pro5 ducer or importer described in paragraph 

6 (13)(B), greenhouse gases that would be emit7 ted from the combustion of any petroleum8 based or coal-based liquid fuel, petroleum coke, 

9 or natural gas liquid, produced or imported by 

10 that covered entity during that calendar year 

11 for sale or distribution in interstate commerce, 

12 assuming no capture and sequestration of any 

13 greenhouse gas emissions; 

14 ‘‘(B) for a covered entity that is an indus15 trial gas producer or importer described in 

16 paragraph (13)(C), the tons of carbon dioxide 

17 equivalent of any gas described in clauses (i) 

18 through (vi) of paragraph (13)(C)— 

19 ‘‘(i) produced or imported by such 

20 covered entity during that calendar year 

21 for sale or distribution in interstate com22 merce; or 

23 ‘‘(ii) released as fugitive emissions in 

24 the production of fluorinated gas; and 
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1 ‘‘(C) for a natural gas local distribution 

2 company described in paragraph (13)(J), green3 house gases that would be emitted from the 

4 combustion of the natural gas, and any other 

5 gas meeting the specifications for commingling 

6 with natural gas for purposes of delivery, that 

7 such entity delivered during that calendar year 

8 to customers that are not covered entities, as9 suming no capture and sequestration of that 

10 greenhouse gas. 

11 ‘‘(7) BIOLOGICAL SEQUESTRATION; BIO12 LOGICALLY SEQUESTERED.—The terms ‘biological 

13 sequestration’ and ‘biologically sequestered’ mean 

14 the removal of greenhouse gases from the atmos15 phere by terrestrial biological means, such as by 

16 growing plants, and the storage of those greenhouse 

17 gases in plants or soils. 

18 ‘‘(8) CAPPED EMISSIONS.—The term ‘capped 

19 emissions’ means greenhouse gas emissions to which 

20 section 722 applies, including emissions from the 

21 combustion of natural gas, petroleum-based or coal22 based liquid fuel, petroleum coke, or natural gas liq23 uid to which section 722(b)(2) or (8) applies. 
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1 ‘‘(9) CAPPED SOURCE.—The term ‘capped 

2 source’ means a source that directly emits capped 

3 emissions. 

4 ‘‘(10) CARBON DIOXIDE EQUIVALENT.—The 

5 term ‘carbon dioxide equivalent’ means the unit of 

6 measure, expressed in metric tons, of greenhouse 

7 gases as provided under section 711 or 712. 

8 ‘‘(11) CARBON STOCK.—The term ‘carbon 

9 stock’ means the quantity of carbon contained in a 

10 biological reservoir or system which has the capacity 

11 to accumulate or release carbon. 

12 ‘‘(12) COMPENSATORY ALLOWANCE.—The term 

13 ‘compensatory allowance’ means an allowance issued 

14 under section 721(f). 

15 ‘‘(13) COVERED ENTITY.—The term ‘covered 

16 entity’ means each of the following: 

17 ‘‘(A) Any electricity source. 

18 ‘‘(B) Any stationary source that produces, 

19 and any entity that (or any group of two or 

20 more affiliated entities that, in the aggregate) 

21 imports, for sale or distribution in interstate 

22 commerce in 2008 or any subsequent year, pe23 troleum-based or coal-based liquid fuel, petro24 leum coke, or natural gas liquid, the combus25 tion of which would emit 25,000 or more tons 
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1 of carbon dioxide equivalent, as determined by 

2 the Administrator. 

3 ‘‘(C) Any stationary source that produces, 

4 and any entity that (or any group of two or 

5 more affiliated entities that, in the aggregate) 

6 imports, for sale or distribution in interstate 

7 commerce, in bulk, or in products designated by 

8 the Administrator, in 2008 or any subsequent 

9 year 25,000 or more tons of carbon dioxide 

10 equivalent of— 

11 ‘‘(i) fossil fuel-based carbon dioxide; 

12 ‘‘(ii) nitrous oxide; 

13 ‘‘(iii) perfluorocarbons; 

14 ‘‘(iv) sulfur hexafluoride; 

15 ‘‘(v) any other fluorinated gas, except 

16 for nitrogen trifluoride, that is a green17 house gas, as designated by the Adminis18 trator under section 711; or 

19 ‘‘(vi) any combination of greenhouse 

20 gases described in clauses (i) through (v). 

21 ‘‘(D) Any stationary source that has emit22 ted 25,000 or more tons of carbon dioxide 

23 equivalent of nitrogen trifluoride in 2008 or any 

24 subsequent year. 

25 ‘‘(E) Any geologic sequestration site. 
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1 ‘‘(F) Any stationary source in the following 

2 industrial sectors: 

3 ‘‘(i) Adipic acid production. 

4 ‘‘(ii) Primary aluminum production. 

5 ‘‘(iii) Ammonia manufacturing. 

6 ‘‘(iv) Cement production, excluding 

7 grinding-only operations. 

8 ‘‘(v) Hydrochlorofluorocarbon produc9 tion. 

10 ‘‘(vi) Lime manufacturing. 

11 ‘‘(vii) Nitric acid production. 

12 ‘‘(viii) Petroleum refining. 

13 ‘‘(ix) Phosphoric acid production. 

14 ‘‘(x) Silicon carbide production. 

15 ‘‘(xi) Soda ash production. 

16 ‘‘(xii) Titanium dioxide production. 

17 ‘‘(xiii) Coal-based liquid or gaseous 

18 fuel production. 

19 ‘‘(G) Any stationary source in the chemical 

20 or petrochemical sector that, in 2008 or any 

21 subsequent year— 

22 ‘‘(i) produces acrylonitrile, carbon 

23 black, ethylene, ethylene dichloride, ethyl24 ene oxide, or methanol; or 
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1 ‘‘(ii) produces a chemical or petro2 chemical product if producing that product 

3 results in annual combustion plus process 

4 emissions of 25,000 or more tons of carbon 

5 dioxide equivalent. 

6 ‘‘(H) Any stationary source that— 

7 ‘‘(i) is in one of the following indus8 trial sectors: ethanol production; ferroalloy 

9 production; fluorinated gas production; 

10 food processing; glass production; hydrogen 

11 production; iron and steel production; lead 

12 production; pulp and paper manufacturing; 

13 and zinc production; and 

14 ‘‘(ii) has emitted 25,000 or more tons 

15 of carbon dioxide equivalent in 2008 or 

16 any subsequent year. 

17 ‘‘(I) Any fossil fuel-fired combustion device 

18 (such as a boiler) or grouping of such devices 

19 that— 

20 ‘‘(i) is all or part of an industrial 

21 source not specified in subparagraph (D), 

22 (F), (G), or (H); and 

23 ‘‘(ii) has emitted 25,000 or more tons 

24 of carbon dioxide equivalent in 2008 or 

25 any subsequent year. 
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1 ‘‘(J) Any natural gas local distribution 

2 company that (or any group of 2 or more affili3 ated natural gas local distribution companies 

4 that, in the aggregate), in 2008 or any subse5 quent year, delivers 460,000,000 cubic feet or 

6 more of natural gas, and any other gas meeting 

7 the specifications for commingling with natural 

8 gas for purposes of delivery, to customers that 

9 are not covered entities. 

10 ‘‘(14) CREDITING PERIOD.—The term ‘crediting 

11 period’ means the period with respect to which an 

12 offset project is eligible to earn offset credits under 

13 part D, as determined under section 734(c). 

14 ‘‘(15) DESIGNATED REPRESENTATIVE.—The 

15 term ‘designated representative’ means, with respect 

16 to a covered entity, a reporting entity (as defined in 

17 section 713), an offset project developer, or any 

18 other entity receiving or holding allowances, offset 

19 credits, or term offset credits under this title, an in20 dividual authorized, through a certificate of rep21 resentation submitted to the Administrator by the 

22 owners and operators or similar entity official, to 

23 represent the owners and operators or similar entity 

24 official in all matters pertaining to this title (includ25 ing the holding, transfer, or disposition of allowances 
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1 or offset credits), and to make all submissions to the 

2 Administrator under this title. 

3 ‘‘(16) DEVELOPING COUNTRY.—The term ‘de4 veloping country’ means a country eligible to receive 

5 official development assistance according to the in6 come guidelines of the Development Assistance Com7 mittee of the Organization for Economic Coopera8 tion and Development. 

9 ‘‘(17) DOMESTIC OFFSET CREDIT.—For pur10 poses of part D, the term ‘domestic offset credit’ 

11 means an offset credit issued under part D, other 

12 than an international offset credit. For purposes of 

13 part C, the term means any offset credit issued 

14 under the American Clean Energy and Security Act 

15 of 2009, or the amendments made thereby. The 

16 term does not include a term offset credit. 

17 ‘‘(18) ELECTRICITY SOURCE.—The term ‘elec18 tricity source’ means a stationary source that in19 cludes one or more utility units. 

20 ‘‘(19) EMISSION.—The term ‘emission’ means 

21 the release of a greenhouse gas into the ambient air. 

22 Such term does not include gases that are captured 

23 and geologically sequestered, except to the extent 

24 that they are later released into the atmosphere, in 
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1 which case compliance must be demonstrated pursu2 ant to section 722(b)(5). 

3 ‘‘(20) EMISSION ALLOWANCE.—The term ‘emis4 sion allowance’ means an allowance established 

5 under section 721(a) or section 726(g)(2) or 

6 (h)(1)(C). 

7 ‘‘(21) FAIR MARKET VALUE.—The term ‘fair 

8 market value’ means the average daily closing price 

9 on registered exchanges or, if such a price is un10 available, the average price as determined by the Ad11 ministrator, during a specified time period, of an 

12 emission allowance. 

13 ‘‘(22) FEDERAL LAND.—The term ‘Federal 

14 land’ means land that is owned by the United 

15 States, other than land held in trust for an Indian 

16 or Indian tribe. 

17 ‘‘(23) FOSSIL FUEL.—The term ‘fossil fuel’ 

18 means natural gas, petroleum, or coal, or any form 

19 of solid, liquid, or gaseous fuel derived from such 

20 material, including consumer products that are de21 rived from such materials and are combusted. 

22 ‘‘(24) FOSSIL FUEL-FIRED.—The term ‘fossil 

23 fuel-fired’ means powered by combustion of fossil 

24 fuel, alone or in combination with any other fuel, re25 gardless of the percentage of fossil fuel consumed. 
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1 ‘‘(25) FUGITIVE EMISSIONS.—The term ‘fugi2 tive emissions’ means emissions from leaks, valves, 

3 joints, or other small openings in pipes, ducts, or 

4 other equipment, or from vents. 

5 ‘‘(26) GEOLOGIC SEQUESTRATION; GEOLOGI6 CALLY SEQUESTERED.—The terms ‘geologic seques7 tration’ and ‘geologically sequestered’ mean the se8 questration of greenhouse gases in subsurface geo9 logic formations for purposes of permanent storage. 

10 ‘‘(27) GEOLOGIC SEQUESTRATION SITE.—The 

11 term ‘geologic sequestration site’ means a site where 

12 carbon dioxide is geologically sequestered. 

13 ‘‘(28) GREENHOUSE GAS.—The term ‘green14 house gas’ means any gas described in section 

15 711(a) or designated under section 711, except to 

16 the extent that it is regulated under title VI. 

17 ‘‘(29) HOLD.—The term ‘hold’ means, with re18 spect to an allowance, offset credit, or term offset 

19 credit, to have in the appropriate account in the al20 lowance tracking system established under section 

21 724(d), or submit to the Administrator for recording 

22 in such account. 

23 ‘‘(30) INDUSTRIAL SOURCE.—The term ‘indus24 trial source’ means any stationary source that— 

25 ‘‘(A) is not an electricity source; and 
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1 ‘‘(B) is in— 

2 ‘‘(i) the manufacturing sector (as de3 fined in North American Industrial Classi4 fication System codes 31, 32, and 33); or 

5 ‘‘(ii) the natural gas processing or 

6 natural gas pipeline transportation sector 

7 (as defined in North American Industrial 

8 Classification System codes 211112 and 

9 486210). 

10 ‘‘(31) INTERNATIONAL EMISSION ALLOW11 ANCE.—The term ‘international emission allowance’ 

12 means a tradable authorization to emit 1 ton of car13 bon dioxide equivalent of greenhouse gas that is 

14 issued by a national or supranational foreign govern15 ment pursuant to a qualifying international program 

16 designated by the Administrator pursuant to section 

17 728(a). 

18 ‘‘(32) INTERNATIONAL OFFSET CREDIT.—The 

19 term ‘international offset credit’ means an offset 

20 credit issued by the Administrator under section 

21 743. 

22 ‘‘(33) LEAKAGE.—Except as provided in part 

23 F, the term ‘leakage’ means a significant increase in 

24 greenhouse gas emissions, or significant decrease in 

25 sequestration, which is caused by an offset project or 
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1 activities under part E and occurs outside the 

2 boundaries of the offset project or the relevant pro3 gram or project under part E. 

4 ‘‘(34) MINERAL SEQUESTRATION.—The term 

5 ‘mineral sequestration’ means sequestration of car6 bon dioxide from the atmosphere by capturing car7 bon dioxide into a permanent mineral, such as the 

8 aqueous precipitation of carbonate minerals that re9 sults in the storage of carbon dioxide in a mineral 

10 form. 

11 ‘‘(35) NATURAL GAS LIQUID.—The term ‘nat12 ural gas liquid’ means ethane, butane, isobutane, 

13 natural gasoline, and propane. 

14 ‘‘(36) NATURAL GAS LOCAL DISTRIBUTION

15 COMPANY.—The term ‘natural gas local distribution 

16 company’ has the meaning given the term ‘local dis17 tribution company’ in section 2(17) of the Natural 

18 Gas Policy Act of 1978 (15 U.S.C. 3301(17)). 

19 ‘‘(37) OFFSET CREDIT.—For purposes of this 

20 section and part D, the term ‘offset credit’ means an 

21 offset credit issued under part D. For purposes of 

22 part C, the term means any offset credit issued 

23 under the American Clean Energy and Security Act 

24 of 2009, or the amendments made thereby. The 

25 term does not include a term offset credit. 
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1 ‘‘(38) OFFSET PROJECT.—The term ‘offset 

2 project’ means a project or activity that reduces or 

3 avoids greenhouse gas emissions, or sequesters 

4 greenhouse gases, and for which offset credits are or 

5 may be issued under part D. 

6 ‘‘(39) OFFSET PROJECT DEVELOPER.—The 

7 term ‘offset project developer’ means the individual 

8 or entity designated as the offset project developer 

9 in an offset project approval petition under section 

10 735(c)(1). 

11 ‘‘(40) PETROLEUM.—The term ‘petroleum’ in12 cludes crude oil, tar sands, oil shale, and heavy oils. 

13 ‘‘(41) RENEWABLE BIOMASS.—The term ‘re14 newable biomass’ means any of the following: 

15 ‘‘(A) Materials, pre-commercial thinnings, 

16 or removed invasive species from National For17 est System land and public lands (as defined in 

18 section 103 of the Federal Land Policy and 

19 Management Act of 1976 (43 U.S.C. 1702)), 

20 including those that are byproducts of preven21 tive treatments (such as trees, wood, brush, 

22 thinnings, chips, and slash), that are removed 

23 as part of a federally recognized timber sale, or 

24 that are removed to reduce hazardous fuels, to 
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1 reduce or contain disease or insect infestation, 

2 or to restore ecosystem health, and that are— 

3 ‘‘(i) not from components of the Na4 tional Wilderness Preservation System, 

5 Wilderness Study Areas, Inventoried 

6 Roadless Areas, old growth stands, late7 successional stands (except for dead, se8 verely damaged, or badly infested trees), 

9 components of the National Landscape 

10 Conservation System, National Monu11 ments, National Conservation Areas, Des12 ignated Primitive Areas, or Wild and Sce13 nic Rivers corridors; 

14 ‘‘(ii) harvested in environmentally sus15 tainable quantities, as determined by the 

16 appropriate Federal land manager; and 

17 ‘‘(iii) harvested in accordance with 

18 Federal and State law, and applicable land 

19 management plans. 

20 ‘‘(B) Any organic matter that is available 

21 on a renewable or recurring basis from non22 Federal land or land belonging to an Indian or 

23 Indian tribe that is held in trust by the United 

24 States or subject to a restriction against alien25 ation imposed by the United States, including— 
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1 ‘‘(i) renewable plant material, includ2 ing— 

3 ‘‘(I) feed grains; 

4 ‘‘(II) other agricultural commod5 ities; 

6 ‘‘(III) other plants and trees; and 

7 ‘‘(IV) algae; and 

8 ‘‘(ii) waste material, including— 

9 ‘‘(I) crop residue; 

10 ‘‘(II) other vegetative waste ma11 terial (including wood waste and wood 

12 residues); 

13 ‘‘(III) animal waste and byprod14 ucts (including fats, oils, greases, and 

15 manure); 

16 ‘‘(IV) construction waste; and 

17 ‘‘(V) food waste and yard waste. 

18 ‘‘(C) Residues and byproducts from wood, 

19 pulp, or paper products facilities. 

20 ‘‘(42) RETIRE.—The term ‘retire’, with respect 

21 to an allowance, offset credit, or term offset credit, 

22 established or issued under the American Clean En23 ergy and Security Act of 2009 or the amendments 

24 made thereby, means to disqualify such allowance or 

25 offset credit for any subsequent use under this title, 
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1 regardless of whether the use is a sale, exchange, or 

2 submission of the allowance, offset credit, or term 

3 offset credit to satisfy a compliance obligation. 

4 ‘‘(43) REVERSAL.—The term ‘reversal’ means 

5 an intentional or unintentional loss of sequestered 

6 greenhouse gases to the atmosphere. 

7 ‘‘(44) SEQUESTERED AND SEQUESTRATION.— 

8 The terms ‘sequestered’ and ‘sequestration’ mean 

9 the separation, isolation, or removal of greenhouse 

10 gases from the atmosphere, as determined by the 

11 Administrator. The terms include biological, geo12 logic, and mineral sequestration, but do not include 

13 ocean fertilization techniques. 

14 ‘‘(45) STATIONARY SOURCE.—The term ‘sta15 tionary source’ means any integrated operation com16 prising any plant, building, structure, or stationary 

17 equipment, including support buildings and equip18 ment, that is located within one or more contiguous 

19 or adjacent properties, is under common control of 

20 the same person or persons, and emits or may emit 

21 a greenhouse gas. 

22 ‘‘(46) STRATEGIC RESERVE ALLOWANCE.—The 

23 term ‘strategic reserve allowance’ means an emission 

24 allowance reserved for, transferred to, or deposited 

25 in the strategic reserve under section 726. 
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1 ‘‘(47) TON.—The term ‘ton’ means metric ton. 

2 ‘‘(48) UNCAPPED EMISSIONS.—The term ‘un3 capped emissions’ means emissions of greenhouse 

4 gases emitted after December 31, 2011, that are not 

5 capped emissions. 

6 ‘‘(49) UNITED STATES GREENHOUSE GAS EMIS7 SIONS.—The term ‘United States greenhouse gas 

8 emissions’ means the total quantity of annual green9 house gas emissions from the United States, as cal10 culated by the Administrator and reported to the 

11 United Nations Framework Convention on Climate 

12 Change Secretariat. 

13 ‘‘(50) UTILITY UNIT.—The term ‘utility unit’ 

14 means a combustion device that, on January 1, 

15 2009, or any date thereafter, is fossil fuel-fired and 

16 serves a generator that produces electricity for sale, 

17 unless such combustion device, during the 12-month 

18 period starting the later of January 1, 2009, or the 

19 commencement of commercial operation and each 

20 calendar year starting after such later date— 

21 ‘‘(A) is part of an integrated cycle system 

22 that cogenerates steam and electricity during 

23 normal operation and that supplies one-third or 

24 less of its potential electric output capacity and 

25 25 MW or less of electrical output for sale; or 
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1 ‘‘(B) combusts materials of which more 

2 than 95 percent is municipal solid waste on a 

3 heat input basis. 

4 ‘‘(51) VINTAGE YEAR.—The term ‘vintage year’ 

5 means the calendar year for which an emission al6 lowance is established under section 721(a) or which 

7 is assigned to an emission allowance under section 

8 726(g)(3)(A), except that the vintage year for a 

9 strategic reserve allowance shall be the year in which 

10 such allowance is purchased at auction.’’. 

11 Subtitle B—Disposition of 

12 Allowances 

13 SEC. 321. DISPOSITION OF ALLOWANCES FOR GLOBAL 

14 WARMING POLLUTION REDUCTION PRO15 GRAM. 

16 Title VII of the Clean Air Act, as added by section 

17 311 of this Act, is amended by adding at the end the fol18 lowing part: 

19 ‘‘PART H—DISPOSITION OF ALLOWANCES 

20 ‘‘SEC. 781. ALLOCATION OF ALLOWANCES FOR SUPPLE21 MENTAL REDUCTIONS. 

22 ‘‘(a) IN GENERAL.—The Administrator shall allocate 

23 for each vintage year the following percentage of the emis24 sion allowances established under section 721(a), for dis25 tribution in accordance with part E: 
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1 ‘‘(1) For vintage years 2012 through 2025, 5 

2 percent. 

3 ‘‘(2) For vintage years 2026 through 2030, 3 

4 percent. 

5 ‘‘(3) For vintage years 2031 through 2050, 2 

6 percent. 

7 ‘‘(b) ADJUSTMENT.—The Administrator shall modify 

8 the percentages set forth in subsection (a) as necessary 

9 to ensure the achievement of the annual supplemental 

10 emission reduction objective for 2020, and the cumulative 

11 reduction objective through 2025, set forth in section 

12 753(b)(1). 

13 ‘‘(c) CARRYOVER.—If the Administrator has not dis14 tributed all of the allowances allocated pursuant to this 

15 section for a given vintage year by the end of that year, 

16 all such undistributed emission allowances shall, in accord17 ance with section 782(s), be exchanged for allowances 

18 from the following vintage year and treated as part of the 

19 allocation for supplemental reductions under this section 

20 for that later vintage year. 

21 ‘‘SEC. 782. ALLOCATION OF EMISSION ALLOWANCES. 

22 ‘‘(a) ELECTRICITY CONSUMERS.—(1) The Adminis23 trator shall allocate emission allowances for the benefit of 

24 electricity consumers, to be distributed in accordance with 

25 section 783(b), (c), and (d) in the following amounts: 
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1 ‘‘(A) For vintage years 2012 and 2013: 43.75 

2 percent of the emission allowances established for 

3 each year under section 721(a). 

4 ‘‘(B) For vintage years 2014 and 2015: 38.89 

5 percent of the emission allowances established for 

6 each year under section 721(a). 

7 ‘‘(C) For vintage years 2016 through 2025: 

8 35.00 percent of the emission allowances established 

9 for each year under section 721(a). 

10 ‘‘(D) For vintage year 2026: 28 percent of the 

11 emission allowances established for that year under 

12 section 721(a). 

13 ‘‘(E) For vintage year 2027: 21 percent of the 

14 emission allowances established for that year under 

15 section 721(a). 

16 ‘‘(F) For vintage year 2028: 14 percent of the 

17 emission allowances established for that year under 

18 section 721(a). 

19 ‘‘(G) For vintage year 2029: 7 percent of the 

20 emission allowances established for that year under 

21 section 721(a). 

22 ‘‘(2) The Administrator shall allocate emission allow23 ances for energy efficiency, renewable electricity, and low 

24 income ratepayer assistance programs administered by 

25 small electricity local distribution companies, to be distrib-
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1 uted in accordance with section 783(e) in the following 

2 amounts: 

3 ‘‘(A) For vintage years 2012 through 2025: 0.5 

4 percent of the emission allowances established each 

5 year under section 721(a). 

6 ‘‘(B) For vintage year 2026: 0.4 percent of the 

7 emission allowances established for that year under 

8 section 721(a). 

9 ‘‘(C) For vintage year 2027: 0.3 percent of the 

10 emission allowances established for that year under 

11 section 721(a). 

12 ‘‘(D) For vintage year 2028: 0.2 percent of the 

13 emission allowances established for that year under 

14 section 721(a). 

15 ‘‘(E) For vintage year 2029: 0.1 percent of the 

16 emission allowances established for that year under 

17 section 721(a). 

18 ‘‘(3) For vintage year 2012, the Administrator shall 

19 allocate 0.35 percent of emission allowances established 

20 for such year under section 721(a) to avoid disincentives 

21 to the continued use of existing energy-efficient cogenera22 tion facilities at industrial parks, to be distributed in ac23 cordance with section 783(f). 

24 ‘‘(b) NATURAL GAS CONSUMERS.—The Adminis25 trator shall allocate emission allowances for the benefit of 
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1 natural gas consumers to be distributed in accordance 

2 with section 784 in the following amounts: 

3 ‘‘(1) For vintage years 2016 through 2025, 9 

4 percent of the emission allowances established for 

5 each year under section 721(a). 

6 ‘‘(2) For vintage year 2026, 7.2 percent of the 

7 emission allowances established for that year under 

8 section 721(a). 

9 ‘‘(3) For vintage year 2027, 5.4 percent of the 

10 emission allowances established for that year under 

11 section 721(a). 

12 ‘‘(4) For vintage year 2028, 3.6 percent of the 

13 emission allowances established for that year under 

14 section 721(a). 

15 ‘‘(5) For vintage year 2029, 1.8 percent of the 

16 emission allowances established for that year under 

17 section 721(a). 

18 ‘‘(c) HOME HEATING OIL AND PROPANE CON19 SUMERS.—The Administrator shall allocate emission al20 lowances for the benefit of home heating oil and propane 

21 consumers to be distributed in accordance with section 

22 785 in the following amounts: 

23 ‘‘(1) For vintage years 2012 and 2013, 1.875 

24 percent of the emission allowances established for 

25 each year under section 721(a). 
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1 ‘‘(2) For vintage years 2014 and 2015, 1.67 

2 percent of the emission allowances established for 

3 each year under section 721(a). 

4 ‘‘(3) For vintage years 2016 through 2025, 1.5 

5 percent of the emission allowances established for 

6 each year under section 721(a). 

7 ‘‘(4) For vintage year 2026, 1.2 percent of the 

8 emission allowances established for that year under 

9 section 721(a). 

10 ‘‘(5) For vintage year 2027, 0.9 percent of the 

11 emission allowances established for that year under 

12 section 721(a). 

13 ‘‘(6) For vintage year 2028, 0.6 percent of the 

14 emission allowances established for that year under 

15 section 721(a). 

16 ‘‘(7) For vintage year 2029, 0.3 percent of the 

17 emission allowances established for that year under 

18 section 721(a). 

19 ‘‘(d) LOW INCOME CONSUMERS.—For each vintage 

20 year starting in 2012, the Administrator shall auction, 

21 pursuant to section 791, 15 percent of the emission allow22 ances established for each year under section 721(a), with 

23 the proceeds used for the benefit of low income consumers 

24 to fund the program set forth in subtitle C of title IV of 
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1 American Clean Energy and Security Act of 2009 and the 

2 amendments made thereby. 

3 ‘‘(e) TRADE-VULNERABLE INDUSTRIES.— 

4 ‘‘(1) IN GENERAL.—The Administrator shall al5 locate emission allowances to energy-intensive, trade6 exposed entities, to be distributed in accordance with 

7 section 765, in the following amounts: 

8 ‘‘(A) For vintage years 2012 and 2013, up 

9 to 2.0 percent of the emission allowances estab10 lished for each year under section 721(a). 

11 ‘‘(B) For vintage year 2014, up to 15 per12 cent of the emission allowances established for 

13 that year under section 721(a). 

14 ‘‘(C) For vintage year 2015, up to the 

15 product of— 

16 ‘‘(i) the amount specified in para17 graph (2); multiplied by 

18 ‘‘(ii) the quantity of emission allow19 ances established for 2015 under section 

20 721(a) divided by the quantity of emission 

21 allowances established for 2014 under sec22 tion 721(a). 

23 ‘‘(D) For vintage year 2016, up to the 

24 product of— 
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1 ‘‘(i) the amount specified in para2 graph (3); multiplied by 

3 ‘‘(ii) the quantity of emission allow4 ances established for 2015 under section 

5 721(a) divided by the quantity of emission 

6 allowances established for 2014 under sec7 tion 721(a). 

8 ‘‘(E) For vintage years 2017 through 

9 2025, up to the product of— 

10 ‘‘(i) the amount specified in para11 graph (4); multiplied by 

12 ‘‘(ii) the quantity of emission allow13 ances established for that year under sec14 tion 721(a) divided by the quantity of 

15 emission allowances established for 2016 

16 under section 721(a). 

17 ‘‘(F) For vintage years 2026 through 

18 2050, up to the product of the amount specified 

19 in paragraph (4)— 

20 ‘‘(i) multiplied by the quantity of 

21 emission allowances established for the ap22 plicable year during 2026 through 2050 

23 under section 721(a) divided by the quan24 tity of emission allowances established for 

25 2016 under section 721(a); and 
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1 ‘‘(ii) multiplied by a factor that shall 

2 equal 90 percent for 2026 and decline 10 

3 percent for each year thereafter until 

4 reaching zero, except that, if the President 

5 modifies a percentage for a year under 

6 subparagraph (A) of section 767(c)(3), the 

7 highest percentage the President applies 

8 for any sector under that subparagraph for 

9 that year (not exceeding 100 percent) shall 

10 be used for that year instead of the factor 

11 otherwise specified in this clause. 

12 ‘‘(2) CARRYOVER.—After the Administrator dis13 tributes emission allowances pursuant to section 765 

14 for any given vintage year, any emission allowances 

15 allocated to energy-intensive, trade-exposed entities 

16 pursuant to this subsection that have not been so 

17 distributed shall, in accordance with subsection (s), 

18 be exchanged for allowances from the following vin19 tage year and treated as part of the allocation to 

20 such entities for that later vintage year. 

21 ‘‘(f) DEPLOYMENT OF CARBON CAPTURE AND SE22 QUESTRATION TECHNOLOGY.— 

23 ‘‘(1) ANNUAL ALLOCATION.—The Adminis24 trator shall allocate emission allowances for the de25 ployment of carbon capture and sequestration tech-
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1 nology to be distributed in accordance with section 

2 786 in the following amounts: 

3 ‘‘(A) For vintage years 2014 through 

4 2017, 1.75 percent of the emission allowances 

5 established for each year under section 721(a). 

6 ‘‘(B) For vintage years 2018 and 2019, 

7 4.75 percent of the emission allowances estab8 lished for each year under section 721(a). 

9 ‘‘(C) For vintage years 2020 through 

10 2050, 5 percent of the emission allowances es11 tablished for each year under section 721(a). 

12 ‘‘(2) CARRYOVER.—If the Administrator has 

13 not distributed all of the allowances allocated pursu14 ant to this subsection for a given vintage year by the 

15 end of that year, all such undistributed emission al16 lowances shall, in accordance with subsection (s), be 

17 exchanged for allowances from the following vintage 

18 year and treated as part of the allocation for the de19 ployment of carbon capture and sequestration tech20 nology under this subsection for that later vintage 

21 year. 

22 ‘‘(g) INVESTMENT IN ENERGY EFFICIENCY AND RE23 NEWABLE ENERGY.—The Administrator shall allocate 

24 emission allowances to invest in energy efficiency and re25 newable energy as follows: 
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1 ‘‘(1) To be distributed in accordance with sec2 tion 132 of the American Clean Energy and Security 

3 Act of 2009 in the following amounts: 

4 ‘‘(A) For vintage years 2012 through 

5 2015, 9.5 percent of the emission allowances es6 tablished for each year under section 721(a). 

7 ‘‘(B) For vintage years 2016 through 

8 2017, 6.5 percent of the emission allowances es9 tablished for each year under section 721(a). 

10 ‘‘(C) For vintage years 2018 through 

11 2021, 5.5 percent of the emission allowances es12 tablished for each year under section 721(a). 

13 ‘‘(D) For vintage years 2022 through 

14 2025, 1.0 percent of the emission allowances es15 tablished for each year under section 721(a). 

16 ‘‘(E) For vintage years 2026 through 

17 2050, 4.5 percent of the emission allowances es18 tablished for each year under section 721(a). 

19 ‘‘(F) At the same time allowances are dis20 tributed under subparagraph (D) for each of 

21 the vintage years 2022 through 2025, 3.55 per22 cent of emission allowances established under 

23 section 721(a) for the vintage year 4 years after 

24 that vintage year shall also be distributed 
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1 (which shall be in addition to the emission al2 lowances distributed under subparagraph (E)). 

3 ‘‘(2) To be distributed in accordance with sec4 tion 304 of the Energy Conservation and Production 

5 Act, as amended by section 201 of the American 

6 Clean Energy and Security Act of 2009, for each 

7 vintage year from 2012 through 2050, 0.5 percent 

8 of emission allowances established for that year 

9 under section 721(a). 

10 ‘‘(3) To be distributed among the States in ac11 cordance with the formula in section 132(b) of the 

12 American Clean Energy and Security Act of 2009 

13 and to be used exclusively for the purposes of section 

14 202 of the American Clean Energy and Security Act 

15 of 2009 in the following amounts: 

16 ‘‘(A) For vintage years 2012 through 

17 2017, 0.05 percent of the emission allowances 

18 established for each year under section 721(a). 

19 ‘‘(B) For vintage years 2018 through 

20 2050, 0.03 percent of the emission allowances 

21 established for each year under section 721(a). 

22 ‘‘(h) ENERGY RESEARCH AND DEVELOPMENT.— 

23 ‘‘(1) ENERGY INNOVATION HUBS.—For vintage 

24 years 2012 through 2050, the Administrator shall 

25 allocate 0.45 percent of the emission allowances es-
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1 tablished under section 721(a) to be distributed to 

2 Energy Innovation Hubs in accordance with section 

3 171 of the American Clean Energy and Security Act 

4 of 2009. 

5 ‘‘(2) ADVANCED ENERGY RESEARCH.—For vin6 tage years 2012 through 2050, the Administrator 

7 shall allocate 1.05 percent of the emission allowances 

8 established under section 721(a) for the Advanced 

9 Research Project Agency-Energy to be distributed in 

10 accordance with section 172 of the American Clean 

11 Energy and Security Act of 2009. 

12 ‘‘(i) INVESTMENT IN CLEAN VEHICLE TECH13 NOLOGY.—The Administrator shall allocate emission al14 lowances to invest in the development and deployment of 

15 clean vehicles, to be distributed in accordance with section 

16 124 of the American Clean Energy and Security Act of 

17 2009 in the following amounts: 

18 ‘‘(1) For vintage years 2012 through 2017, 3 

19 percent of the emission allowances established for 

20 each year under section 721(a). 

21 ‘‘(2) For vintage years 2018 through 2025, 1 

22 percent of the emission allowances established for 

23 each year under section 721(a). 
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1 ‘‘(j) DOMESTIC FUEL PRODUCTION.—For vintage 

2 years 2014 through 2026, the Administrator shall allocate 

3 and distribute according to section 787— 

4 ‘‘(1) 2 percent of the emission allowances estab5 lished for each year under section 721(a) to domes6 tic petroleum refineries that are covered entities pur7 suant to section 700(13)(F)(viii), including small 

8 business refiners; and 

9 ‘‘(2) an additional 0.25 percent of the emissions 

10 allowances established for each year under section 

11 721(a) to small business refiners that are covered 

12 entities pursuant to section 700(13)(F)(viii). 

13 ‘‘(k) INVESTMENT IN WORKERS.—(1) The Adminis14 trator shall auction pursuant to section 791 emission al15 lowances for the benefit of workers pursuant to part 2 of 

16 subtitle B of the American Clean Energy and Security Act 

17 of 2009 in the following amounts, and shall deposit into 

18 the Climate Change Worker Adjustment Assistance Fund 

19 established pursuant to section 793, and report to the Sec20 retary of Labor on, the proceeds from the sale of these 

21 allowances: 

22 ‘‘(A) For vintage years 2012 through 2021, 0.5 

23 percent of the emission allowances established for 

24 each year under section 721(a). 
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1 ‘‘(B) For vintage years 2022 through 2050, 1.0 

2 percent of the emission allowances established for 

3 each year under section 721(a). 

4 All amounts deposited into the fund shall be available to 

5 the Secretary of Labor until expended to carry out part 

6 2 of subtitle B of title IV of the American Clean Energy 

7 and Security Act of 2009. Of the amounts deposited, not 

8 more than $10,000,000 shall be available to the Secretary 

9 of Labor for Federal administration costs of such part 2 

10 each fiscal year. 

11 ‘‘(2) The Administrator shall auction, pursuant to 

12 section 791, 0.75 percent of the emission allowances estab13 lished for each of vintage years 2012 and 2013 under sec14 tion 721(a), and shall deposit the proceeds in the Energy 

15 Efficiency and Renewable Energy Worker Training Fund 

16 established by section 422 of the American Clean Energy 

17 and Security Act of 2009. 

18 ‘‘(l) DOMESTIC ADAPTATION.—The Administrator 

19 shall allocate emission allowances for domestic adaptation 

20 as follows: 

21 ‘‘(1) To be distributed in accordance with sec22 tion 453 of the American Clean Energy and Security 

23 Act of 2009 in the following amounts: 
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1 ‘‘(A) For vintage years 2012 through 

2 2021, 0.9 percent of the emission allowances es3 tablished for each year under section 721(a). 

4 ‘‘(B) For vintage years 2022 through 

5 2026, 1.9 percent of the emission allowances es6 tablished for each year under section 721(a). 

7 ‘‘(C) For vintage years 2027 through 

8 2050, 3.9 percent of the emission allowances es9 tablished for each year under section 721(a). 

10 ‘‘(2) For vintage year 2012 and thereafter, the 

11 Administrator shall auction, pursuant to section 

12 791, 0.1 percent of the emission allowances estab13 lished for each year under section 721(a), and shall 

14 deposit the proceeds in the Climate Change Health 

15 Protection and Promotion Fund established by sec16 tion 467 of the American Clean Energy and Security 

17 Act of 2009. 

18 ‘‘(m) WILDLIFE AND NATURAL RESOURCE ADAPTA19 TION.—The Administrator shall allocate emission allow20 ances for wildlife and natural resource adaptation as fol21 lows: 

22 ‘‘(1) To be distributed to State agencies in ac23 cordance with section 480(a) of the American Clean 

24 Energy and Security Act of 2009 in the following 

25 amounts: 
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1 ‘‘(A) For vintage years 2012 through 

2 2021, 0.385 percent of the emission allowances 

3 established for each year under section 721(a). 

4 ‘‘(B) For vintage years 2022 through 

5 2026, 0.77 percent of the emission allowances 

6 established for each year under section 721(a). 

7 ‘‘(C) For vintage years 2027 through 

8 2050, 1.54 percent of the emission allowances 

9 established for each year under section 721(a). 

10 ‘‘(2) To be auctioned pursuant to section 791, 

11 with the proceeds to be deposited in the Natural Re12 sources Climate Change Adaptation Fund estab13 lished pursuant to section 480(b), in the following 

14 amounts: 

15 ‘‘(A) For vintage years 2012 through 

16 2021, 0.615 percent of the emission allowances 

17 established for each year under section 721(a). 

18 ‘‘(B) For vintage years 2022 through 

19 2026, 1.23 percent of the emission allowances 

20 established for each year under section 721(a). 

21 ‘‘(C) For vintage years 2027 through 

22 2050, 2.46 percent of the emission allowances 

23 established for each year under section 721(a). 

24 ‘‘(n) INTERNATIONAL ADAPTATION.—The Adminis25 trator shall allocate emission allowances for international 
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1 adaptation to be distributed in accordance with part 2 of 

2 subtitle E of title IV of the American Clean Energy and 

3 Security Act of 2009 in the following amounts: 

4 ‘‘(1) For vintage years 2012 through 2021, 1.0 

5 percent of the emission allowances established for 

6 each year under section 721(a). 

7 ‘‘(2) For vintage years 2022 through 2026, 2.0 

8 percent of the emission allowances established for 

9 each year under section 721(a). 

10 ‘‘(3) For vintage years 2027 through 2050, 4.0 

11 percent of the emission allowances established for 

12 each year under section 721(a). 

13 ‘‘(o) INTERNATIONAL CLEAN TECHNOLOGY DEPLOY14 MENT.—The Administrator shall allocate emission allow15 ances for international clean technology deployment for 

16 distribution in accordance with subtitle D of title IV of 

17 the American Clean Energy and Security Act of 2009 in 

18 the following amounts: 

19 ‘‘(1) For vintage years 2012 through 2021, 1.0 

20 percent of the emission allowances established for 

21 each year under section 721(a). 

22 ‘‘(2) For vintage years 2022 through 2026, 2.0 

23 percent of the emission allowances established for 

24 each year under section 721(a). 
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1 ‘‘(3) For vintage years 2027 through 2050, 4.0 

2 percent of the emission allowances established for 

3 each year under section 721(a). 

4 ‘‘(p) RELEASE OF FUTURE ALLOWANCES.—The Ad5 ministrator shall make future year allowances available by 

6 auctioning allowances, pursuant to section 791, in the fol7 lowing amounts: 

8 ‘‘(1) In each of calendar years 2014 through 

9 2019, a string of 0.70 billion allowances with vintage 

10 years 12 to 17 years after the year of the auction, 

11 with an equal number of allowances from each vin12 tage year in the string. 

13 ‘‘(2) In each of calendar years 2020 through 

14 2025, a string of 0.50 billion allowances with vintage 

15 years 12 to 17 years after the year of the auction, 

16 with an equal number of allowances from each vin17 tage year in the string. 

18 ‘‘(3) In each of calendar years 2026 through 

19 2030, a string of 0.3 billion allowances with vintage 

20 years 12 to 17 years after the year of the auction, 

21 with an equal number of allowances from each vin22 tage year in the string. 

23 ‘‘(q) DEFICIT REDUCTION.— 

24 ‘‘(1) For each of vintage years 2012 through 

25 2025, any allowances not allocated for distribution 
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1 or auction pursuant to section 781 or subsections 

2 (a) through (o) and subsections (s) and (t) of this 

3 section, or disbursed pursuant to section 790, shall 

4 be auctioned by the Administrator pursuant to sec5 tion 791 and the proceeds shall be deposited into the 

6 Treasury. 

7 ‘‘(2) Unless otherwise specified, any allowances 

8 allocated pursuant to subsections (a) through (o) 

9 and subsections (s) and (t) and not distributed by 

10 March 31 of the calendar year following the allow11 ance’s vintage year, shall be auctioned by the Ad12 ministrator and the proceeds shall be deposited into 

13 the Treasury. 

14 ‘‘(3) For auctions conducted through calendar 

15 year 2020 pursuant to subsection (p), the auction 

16 proceeds shall be deposited into the Treasury. 

17 ‘‘(r) CLIMATE CHANGE CONSUMER REFUND.— 

18 ‘‘(1) For each of vintage years 2026 through 

19 2050, the Administrator shall auction the following 

20 allowances established under section 721(a) and de21 posit the proceeds into the Climate Change Con22 sumer Refund Account: 

23 ‘‘(A) Any allowances not allocated for dis24 tribution or auction pursuant to section 781 or 
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1 subsections (a) through (p) of this section, or 

2 disbursed pursuant to section 790. 

3 ‘‘(B) Unless otherwise specified, any allow4 ances allocated pursuant to subsections (a) 

5 through (o) and not distributed by March 31 of 

6 the calendar year following the allowance’s vin7 tage year. 

8 ‘‘(2) For auctions conducted pursuant to sub9 section (p) in calendar years 2021 and thereafter, 

10 the Administrator shall place the proceeds from the 

11 sales of the these allowances into the Climate 

12 Change Consumer Refund Account. 

13 ‘‘(3) Funds deposited into the Climate Change 

14 Consumer Refund Account shall be used as specified 

15 in section 789 and shall be available for expenditure, 

16 without further appropriation or fiscal year limita17 tion. 

18 ‘‘(s) TREATMENT OF CARRYOVER ALLOWANCES.— 

19 ‘‘(1) IN GENERAL.—If there are undistributed 

20 allowances from a vintage year for supplemental re21 ductions pursuant to section 781(c), energy-inten22 sive, trade-exposed industries pursuant to subsection 

23 (e)(2) of this section, deployment of carbon capture 

24 and sequestration technology pursuant to subsection 

25 (f)(2) of this section, or supplemental agriculture 
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1 and renewable energy pursuant to subsection (u)(2) 

2 of this section, the Administrator shall— 

3 ‘‘(A) use the undistributed allowances to 

4 increase for the same vintage year— 

5 ‘‘(i) the allocation of allowances to be 

6 auctioned for deficit reduction pursuant to 

7 subsection (q) or for consumer refunds 

8 pursuant to subsection (r); 

9 ‘‘(ii) the allocation of allowances to be 

10 auctioned for low income consumers pursu11 ant to subsection (d); or 

12 ‘‘(iii) a combination of both; and 

13 ‘‘(B) except as provided in paragraph 

14 (2)— 

15 ‘‘(i) decrease by the same amount for 

16 the following vintage year the allocation for 

17 the purpose for which the allocation was 

18 increased pursuant to subparagraph (A); 

19 and 

20 ‘‘(ii) increase by the same amount for 

21 the following vintage year the allocation for 

22 the purpose for which the undistributed al23 lowances were originally allocated. 

24 ‘‘(2) EXCESS UNDISTRIBUTED ALLOWANCES.— 

25 (A) For each vintage year for which this subsection 
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1 applies, the Administrator shall determine wheth2 er— 

3 ‘‘(i) the total quantity of undistributed al4 lowances for that vintage year that were allo5 cated pursuant to section 781(c), and sub6 sections (e)(2), (f)(2), and (u)(2) of this sec7 tion, exceeds 

8 ‘‘(ii) the total quantity of allowances allo9 cated pursuant to subsection (d), (q) and (r) 

10 for the following vintage year, decreased by the 

11 quantity of allowances for that following vintage 

12 year set aside for the reserve established by sec13 tion 791(f). 

14 ‘‘(B) If the Administrator determines under 

15 subparagraph (A) that the quantity described in 

16 subparagraph (A)(i) exceeds the quantity described 

17 in subparagraph (A)(ii), paragraph (1)(B)(ii) of this 

18 subsection shall not apply. Instead, for each purpose 

19 described in section 781(c), or subsections (e)(2), 

20 (f)(2), and (u)(2) of this section for which undistrib21 uted allowances for a given vintage year were allo22 cated, the Administrator shall increase the allocation 

23 for the following vintage year by the amount that is 

24 the product of— 
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1 ‘‘(i) the number of undistributed allow2 ances for that purpose, times 

3 ‘‘(ii) the quantity described in subpara4 graph (A)(ii) divided by the quantity described 

5 in subparagraph (A)(i). 

6 ‘‘(t) COMPENSATION FOR EARLY ACTORS.—For vin7 tage year 2012, the Administrator shall allocate for com8 pensation for early actors 1 percent of emission allowances 

9 established under section 721(a), to be distributed in ac10 cordance with section 795 of the American Clean Energy 

11 and Security Act of 2009. 

12 ‘‘(u) SUPPLEMENTAL AGRICULTURE AND RENEW13 ABLE ENERGY.— 

14 ‘‘(1) IN GENERAL.—For vintage years 2012 

15 through 2016, the Administrator shall allocate 0.28 

16 percent of emission allowances established under sec17 tion 721(a), to be distributed in accordance with sec18 tion 788 of the American Clean Energy and Security 

19 Act of 2009. 

20 ‘‘(2) CARRYOVER.—After the Administrator dis21 tributes emission allowances pursuant to section 788 

22 for any given vintage year, any emission allowances 

23 allocated to supplemental agriculture and renewable 

24 energy pursuant to this subsection that have not 

25 been so distributed shall, in accordance with sub-
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1 section (s), be exchanged for allowances from the 

2 following vintage year and treated as part of the al3 location to such entities for that later vintage year. 

4 ‘‘SEC. 783. ELECTRICITY CONSUMERS. 

5 ‘‘(a) DEFINITIONS.—For purposes of this section: 

6 ‘‘(1) COAL-FUELED UNIT.—The term ‘coal7 fueled unit’ means a utility unit that derives at least 

8 85 percent of its heat input from coal, petroleum 

9 coke, or any combination of these 2 fuels. 

10 ‘‘(2) ELECTRICITY LOCAL DISTRIBUTION COM11 PANY.—The term ‘electricity local distribution com12 pany’ means an electric utility— 

13 ‘‘(A) that has a legal, regulatory, or con14 tractual obligation to deliver electricity directly 

15 to retail consumers in the United States, re16 gardless of whether that entity or another enti17 ty sells the electricity as a commodity to those 

18 retail consumers; and 

19 ‘‘(B) the retail rates of which, except in 

20 the case of an electric cooperative, are regulated 

21 or set by— 

22 ‘‘(i) a State regulatory authority; 

23 ‘‘(ii) a State or political subdivision 

24 thereof (or an agency or instrumentality 
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1 of, or corporation wholly owned by, either 

2 of the foregoing); or 

3 ‘‘(iii) an Indian tribe pursuant to trib4 al law. 

5 ‘‘(3) ELECTRICITY SAVINGS; RENEWABLE EN6 ERGY RESOURCE.—The terms ‘electricity savings’ 

7 and ‘renewable energy resource’ shall have the 

8 meaning given those terms in section 610 of the 

9 Public Utility Regulatory Policies Act of 1978 (as 

10 added by section 101 of the American Clean Energy 

11 and Security Act of 2009). 

12 ‘‘(4) INDEPENDENT POWER PRODUCTION FA13 CILITY.—The term ‘independent power production 

14 facility’ means a facility— 

15 ‘‘(A) that is used for the generation of 

16 electric energy, at least 80 percent of which is 

17 sold at wholesale; and 

18 ‘‘(B) the sales of the output of which are 

19 not subject to retail rate regulation or setting 

20 of retail rates by— 

21 ‘‘(i) a State regulatory authority; 

22 ‘‘(ii) a State or political subdivision 

23 thereof (or an agency or instrumentality 

24 of, or corporation wholly owned by, either 

25 of the foregoing); 
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1 ‘‘(iii) an electric cooperative; or 

2 ‘‘(iv) an Indian tribe pursuant to trib3 al law. 

4 ‘‘(5) LONG-TERM CONTRACT GENERATOR.—The 

5 term ‘long-term contract generator’ means a quali6 fying small power production facility, a qualifying 

7 cogeneration facility ), an independent power pro8 duction facility, or a facility for the production of 

9 electric energy for sale to others that is owned and 

10 operated by an electric cooperative that is— 

11 ‘‘(A) a covered entity; and 

12 ‘‘(B) as of the date of enactment of this 

13 title— 

14 ‘‘(i) a facility with 1 or more sales or 

15 tolling agreements executed before March 

16 1, 2007, that govern the facility’s elec17 tricity sales and provide for sales at a price 

18 (whether a fixed price or a price formula) 

19 for electricity that does not allow for recov20 ery of the costs of compliance with the lim21 itation on greenhouse gas emissions under 

22 this title, provided that such agreements 

23 are not between entities that are affiliates 

24 of one another; or 
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1 ‘‘(ii) a facility consisting of 1 or more 

2 cogeneration units that makes useful ther3 mal energy available to an industrial or 

4 commercial process with 1 or more sales 

5 agreements executed before March 1, 

6 2007, that govern the facility’s useful ther7 mal energy sales and provide for sales at 

8 a price (whether a fixed price or price for9 mula) for useful thermal energy that does 

10 not allow for recovery of the costs of com11 pliance with the limitation on greenhouse 

12 gas emissions under this title, provided 

13 that such agreements are not between enti14 ties that are affiliates of one another. 

15 ‘‘(6) MERCHANT COAL UNIT.—The term ‘mer16 chant coal unit’ means a coal-fueled unit that— 

17 ‘‘(A) is or is part of a covered entity; 

18 ‘‘(B) is not owned by a Federal, State, or 

19 regional agency or power authority; and 

20 ‘‘(C) generates electricity solely for sale to 

21 others, provided that all or a portion of such 

22 sales are made by a separate legal entity that— 

23 ‘‘(i) has a full or partial ownership or 

24 leasehold interest in the unit, as certified 
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1 in accordance with such requirements as 

2 the Administrator shall prescribe; and 

3 ‘‘(ii) is not subject to retail rate regu4 lation or setting of retail rates by— 

5 ‘‘(I) a State regulatory authority; 

6 ‘‘(II) a State or political subdivi7 sion thereof (or an agency or instru8 mentality of, or corporation wholly 

9 owned by, either of the foregoing); 

10 ‘‘(III) an electric cooperative; or 

11 ‘‘(IV) an Indian tribe pursuant 

12 to tribal law. 

13 ‘‘(7) MERCHANT COAL UNIT SALES.—The term 

14 ‘merchant coal unit sales’ means sales to others of 

15 electricity generated by a merchant coal unit that 

16 are made by the owner or leaseholder described in 

17 paragraph (6)(C). 

18 ‘‘(8) NEW COAL-FUELED UNIT.—The term ‘new 

19 coal-fueled unit’ means a coal-fueled unit that com20 menced operation on or after January 1, 2009 and 

21 before January 1, 2013. 

22 ‘‘(9) NEW MERCHANT COAL UNIT.—The term 

23 ‘new merchant coal unit’ means a merchant coal 

24 unit— 
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1 ‘‘(A) that commenced operation on or after 

2 January 1, 2009 and before January 1, 2013; 

3 and 

4 ‘‘(B) the actual, on-site construction of 

5 which commenced prior to January 1, 2009. 

6 ‘‘(10) QUALIFYING SMALL POWER PRODUCTION

7 FACILITY; QUALIFYING COGENERATION FACILITY.— 

8 The terms ‘qualifying small power production facil9 ity’ and ‘qualifying cogeneration facility’ have the 

10 meanings given those terms in section 3(17)(C) and 

11 3(18)(B) of the Federal Power Act (16 U.S.C. 

12 796(17)(C) and 796(18)(B)). 

13 ‘‘(11) SMALL LDC.—The term ‘small LDC’ 

14 means, for any given year, an electricity local dis15 tribution company that delivered less than 4,000,000 

16 megawatt hours of electric energy directly to retail 

17 consumers in the preceding year. 

18 ‘‘(12) STATE REGULATORY AUTHORITY.—The 

19 term ‘State regulatory authority’ has the meaning 

20 given that term in section 3(17) of the Public Utility 

21 Regulatory Policies Act of 1978 (16 U.S.C. 

22 2602(17)). 

23 ‘‘(13) USEFUL THERMAL ENERGY.—The term 

24 ‘useful thermal energy’has the meaning given that 
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1 term in section 371(7) of the Energy Policy and 

2 Conservation Act (42 U.S.C. 6341(7)). 

3 ‘‘(b) ELECTRICITY LOCAL DISTRIBUTION COMPA4 NIES.— 

5 ‘‘(1) DISTRIBUTION OF ALLOWANCES.—Not 

6 later than September 30, 2011, and each calendar 

7 year thereafter through 2028, the Administrator 

8 shall distribute to electricity local distribution com9 panies for the benefit of retail ratepayers the quan10 tity of emission allowances allocated for the fol11 lowing vintage year pursuant to section 782(a)(1). 

12 Notwithstanding the preceding sentence, the Admin13 istrator shall withhold from distribution under this 

14 subsection a quantity of emission allowances equal to 

15 the lesser of 14.3 percent of the quantity of emission 

16 allowances allocated under section 782(a)(1) for the 

17 relevant vintage year, or 105 percent of the emission 

18 allowances for the relevant vintage year that the Ad19 ministrator anticipates will be distributed to mer20 chant coal units and to long-term contract genera21 tors, respectively, under subsections (c) and (d). If 

22 not required by subsections (c) and (d) to distribute 

23 all of these reserved allowances, the Administrator 

24 shall distribute any remaining emission allowances 
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1 to electricity local distribution companies in accord2 ance with this subsection. 

3 ‘‘(2) DISTRIBUTION BASED ON EMISSIONS.— 

4 ‘‘(A) IN GENERAL.—For each vintage year, 

5 50 percent of the emission allowances available 

6 for distribution under paragraph (1), after re7 serving allowances for distribution under sub8 sections (c) and (d), shall be distributed by the 

9 Administrator among individual electricity local 

10 distribution companies ratably based on the an11 nual average carbon dioxide emissions attrib12 utable to generation of electricity delivered at 

13 retail by each such company during the base 

14 period determined under subparagraph (B). 

15 ‘‘(B) BASE PERIOD.— 

16 ‘‘(i) VINTAGE YEARS 2012 AND 2013.— 

17 For vintage years 2012 and 2013, an elec18 tricity local distribution company’s base 

19 period shall be— 

20 ‘‘(I) calendar years 2006 through 

21 2008; or 

22 ‘‘(II) any 3 consecutive calendar 

23 years between 1999 and 2008, inclu24 sive, that such company selects, pro-
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1 vided that the company timely informs 

2 the Administrator of such selection. 

3 ‘‘(ii) VINTAGE YEARS 2014 AND

4 THEREAFTER.—For vintage years 2014 

5 and thereafter, the base period shall be— 

6 ‘‘(I) the base period selected 

7 under clause (i); or 

8 ‘‘(II) calendar year 2012, in the 

9 case of an electricity local distribution 

10 company that owns, co-owns, or pur11 chases through a power purchase 

12 agreement (whether directly or 

13 through a cooperative arrangement) a 

14 substantial portion of the electricity 

15 generated by a new coal-fueled unit, 

16 provided that such company timely in17 forms the Administrator of its election 

18 to use 2012 as its base period. 

19 ‘‘(C) DETERMINATION OF EMISSIONS.— 

20 ‘‘(i) DETERMINATION FOR 1999– 

21 2008.—As part of the regulations promul22 gated pursuant to subsection (g), the Ad23 ministrator, after consultation with the 

24 Energy Information Administration, shall 

25 determine the average amount of carbon 
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1 dioxide emissions attributable to genera2 tion of electricity delivered at retail by 

3 each electricity local distribution company 

4 for each of the years 1999 through 2008, 

5 taking into account entities’ electricity gen6 eration, electricity purchases, and elec7 tricity sales. In the case of any electricity 

8 local distribution company that owns, co9 owns, or purchases through a power pur10 chase agreement (whether directly or 

11 through a cooperative arrangement) a sub12 stantial portion of the electricity generated 

13 by, a coal-fueled unit that commenced op14 eration after January 1, 2006, and before 

15 December 31, 2008, the Administrator 

16 shall adjust the emissions attributable to 

17 such company’s retail deliveries in calendar 

18 years 2006 through 2008 to reflect the 

19 emissions that would have occurred if the 

20 relevant unit were in operation during the 

21 entirety of such 3-year period. 

22 ‘‘(ii) ADJUSTMENTS FOR NEW COAL23 FUELED UNITS.— 

24 ‘‘(I) VINTAGE YEARS 2012 AND

25 2013.—For purposes of emission al-
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1 lowance distributions for vintage years 

2 2012 and 2013, in the case of any 

3 electricity local distribution company 

4 that owns, co-owns, or purchases 

5 through a power purchase agreement 

6 (whether directly or through a cooper7 ative arrangement) a substantial por8 tion of the electricity generated by, a 

9 new coal-fueled unit, the Adminis10 trator shall adjust the emissions at11 tributable to such company’s retail de12 liveries in the applicable base period 

13 to reflect the emissions that would 

14 have occurred if the new coal-fueled 

15 unit were in operation during such pe16 riod. 

17 ‘‘(II) VINTAGE YEAR 2014 AND

18 THEREAFTER.—Not later than nec19 essary for use in making emission al20 lowance distributions under this sub21 section for vintage year 2014, the Ad22 ministrator shall, for any electricity 

23 local distribution company that owns, 

24 co-owns, or purchases through a 

25 power purchase agreement (whether 
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1 directly or through a cooperative ar2 rangement) a substantial portion of 

3 the electricity generated by a new 

4 coal-fueled unit and has selected cal5 endar year 2012 as its base period 

6 pursuant to subparagraph (B)(ii)(II), 

7 determine the amount of carbon diox8 ide emissions attributable to genera9 tion of electricity delivered at retail by 

10 such company in calendar year 2012. 

11 If the relevant new coal-fueled unit 

12 was not yet operational by January 1, 

13 2012, the Administrator shall adjust 

14 such determination to reflect the 

15 emissions that would have occurred if 

16 such unit were in operation for all of 

17 calendar year 2012. 

18 ‘‘(iii) REQUIREMENTS.—Determina19 tions under this paragraph shall be as pre20 cise as practicable, taking into account the 

21 nature of data currently available and the 

22 nature of markets and regulation in effect 

23 in various regions of the country. The fol24 lowing requirements shall apply to such de25 terminations: 
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1 ‘‘(I) The Administrator shall de2 termine the amount of fossil fuel3 based electricity delivered at retail by 

4 each electricity local distribution com5 pany, and shall use appropriate emis6 sion factors to calculate carbon diox7 ide emissions associated with the gen8 eration of such electricity. 

9 ‘‘(II) Where it is not practical to 

10 determine the precise fuel mix for the 

11 electricity delivered at retail by an in12 dividual electricity local distribution 

13 company, the Administrator may use 

14 the best available data, including aver15 age data on a regional basis with ref16 erence to Regional Transmission Or17 ganizations or regional entities (as 

18 that term is defined in section 

19 215(a)(7) of the Federal Power Act 

20 (16 U.S.C. 824o(a)(7)), to estimate 

21 fuel mix and emissions. Different 

22 methodologies may be applied in dif23 ferent regions if appropriate to obtain 

24 the most accurate estimate. 

25 ‘‘(3) DISTRIBUTION BASED ON DELIVERIES.— 
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1 ‘‘(A) INITIAL FORMULA.—Except as pro2 vided in subparagraph (B), for each vintage 

3 year, the Administrator shall distribute 50 per4 cent of the emission allowances available for 

5 distribution under paragraph (1), after reserv6 ing allowances for distribution under sub7 sections (c) and (d), among individual elec8 tricity local distribution companies ratably 

9 based on each electricity local distribution com10 pany’s annual average retail electricity deliv11 eries for calendar years 2006 through 2008, un12 less the owner or operator of the company se13 lects 3 other consecutive years between 1999 

14 and 2008, inclusive, and timely notifies the Ad15 ministrator of its selection. 

16 ‘‘(B) UPDATING.—Prior to distributing 

17 2015 vintage year emission allowances under 

18 this paragraph and at 3-year intervals there19 after, the Administrator shall update the dis20 tribution formula under this paragraph to re21 flect changes in each electricity local distribu22 tion company’s service territory since the most 

23 recent formula was established. For each suc24 cessive 3-year period, the Administrator shall 

25 distribute allowances ratably among individual 
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1 electricity local distribution companies based on 

2 the product of— 

3 ‘‘(i) each electricity local distribution 

4 company’s average annual deliveries per 

5 customer during calendar years 2006 

6 through 2008, or during the 3 alternative 

7 consecutive years selected by such company 

8 under subparagraph (A); and 

9 ‘‘(ii) the number of customers of such 

10 electricity local distribution company in the 

11 most recent year in which the formula is 

12 updated under this subparagraph. 

13 ‘‘(4) PROHIBITION AGAINST EXCESS DISTRIBU14 TIONS.—The regulations promulgated under sub15 section (g) shall ensure that, notwithstanding para16 graphs (2) and (3), no electricity local distribution 

17 company shall receive a greater quantity of allow18 ances under this subsection than is necessary to off19 set any increased electricity costs to such company’s 

20 retail ratepayers, including increased costs attrib21 utable to purchased power costs, due to enactment 

22 of this title. Any emission allowances withheld from 

23 distribution to an electricity local distribution com24 pany pursuant to this paragraph shall be distributed 

25 among all remaining electricity local distribution 
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1 companies ratably based on emissions pursuant to 

2 paragraph (2). 

3 ‘‘(5) USE OF ALLOWANCES.— 

4 ‘‘(A) RATEPAYER BENEFIT.—Emission al5 lowances distributed to an electricity local dis6 tribution company under this subsection shall 

7 be used exclusively for the benefit of retail rate8 payers of such electricity local distribution com9 pany and may not be used to support electricity 

10 sales or deliveries to entities or persons other 

11 than such ratepayers. 

12 ‘‘(B) RATEPAYER CLASSES.—In using 

13 emission allowances distributed under this sub14 section for the benefit of ratepayers, an elec15 tricity local distribution company shall ensure 

16 that ratepayer benefits are distributed— 

17 ‘‘(i) among ratepayer classes ratably 

18 based on electricity deliveries to each class; 

19 and 

20 ‘‘(ii) equitably among individual rate21 payers within each ratepayer class, includ22 ing entities that receive emission allow23 ances pursuant to part F. 

24 ‘‘(C) LIMITATION.—In general, an elec25 tricity local distribution company shall not use 
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1 the value of emission allowances distributed 

2 under this subsection to provide to any rate3 payer a rebate that is based solely on the quan4 tity of electricity delivered to such ratepayer. 

5 To the extent an electricity local distribution 

6 company uses the value of emission allowances 

7 distributed under this subsection to provide re8 bates, it shall, to the maximum extent prac9 ticable, provide such rebates with regard to the 

10 fixed portion of ratepayers’ bills or as a fixed 

11 credit or rebate on electricity bills. 

12 ‘‘(D) INDUSTRIAL RATEPAYERS.—Notwith13 standing subparagraph (C), if compliance with 

14 the requirements of this title results (or would 

15 otherwise result) in an increase in electricity 

16 costs for industrial retail ratepayers of any 

17 given electricity local distribution company (in18 cluding entities that receive emission allowances 

19 pursuant to part F), such electricity local dis20 tribution company— 

21 ‘‘(i) shall pass through to industrial 

22 retail ratepayers their ratable share (based 

23 on deliveries to each ratepayer class) of the 

24 value of the emission allowances distrib25 uted to such company under this sub-
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1 section, to reduce electricity cost impacts 

2 on such ratepayers; and 

3 ‘‘(ii) may do so based on the quantity 

4 of electricity delivered to individual indus5 trial retail ratepayers. 

6 ‘‘(E) GUIDELINES.—As part of the regula7 tions promulgated under subsection (g), the Ad8 ministrator shall, after consultation with State 

9 regulatory authorities, prescribe guidelines for 

10 the implementation of the requirements of this 

11 paragraph. Such guidelines shall include re12 quirements to ensure that industrial retail rate13 payers (including entities that receive emission 

14 allowances under part F) receive their ratable 

15 share of the value of the allowances distributed 

16 to each electricity local distribution company 

17 pursuant to this subsection. 

18 ‘‘(6) REGULATORY PROCEEDINGS.— 

19 ‘‘(A) REQUIREMENT.—No electricity local 

20 distribution company shall be eligible to receive 

21 emission allowances under this subsection or 

22 subsection (e) unless the State regulatory au23 thority with authority over such company’s re24 tail rates, or the entity with authority to regu25 late or set retail electricity rates of an elec-
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1 tricity local distribution company not regulated 

2 by a State regulatory authority, has— 

3 ‘‘(i) after public notice and an oppor4 tunity for comment, promulgated a regula5 tion or completed a rate proceeding (or the 

6 equivalent, in the case of a ratemaking en7 tity other than a State regulatory author8 ity) that provides for the full implementa9 tion of the requirements of paragraph (5) 

10 of this subsection and the requirements of 

11 subsection (e); and 

12 ‘‘(ii) made available to the Adminis13 trator and the public a report describing, 

14 in adequate detail, the manner in which 

15 the requirements of paragraph (5) and the 

16 requirements of subsection (e) will be im17 plemented. 

18 ‘‘(B) UPDATING.—The Administrator shall 

19 require, as a condition of continued receipt of 

20 emission allowances under this subsection by an 

21 electricity local distribution company, that a 

22 new regulation be promulgated or rate pro23 ceeding be completed , after public notice and 

24 an opportunity for comment, and a new report 

25 be made available to the Administrator and the 
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1 public, pursuant to subparagraph (A), not less 

2 frequently than every 5 years. 

3 ‘‘(7) PLANS AND REPORTING.— 

4 ‘‘(A) REGULATIONS.—As part of the regu5 lations promulgated under subsection (g), the 

6 Administrator shall prescribe requirements gov7 erning plans and reports to be submitted in ac8 cordance with this paragraph. 

9 ‘‘(B) PLANS.—Not later than April 30 of 

10 2011 and every 5 years thereafter through 

11 2026, each electricity local distribution com12 pany shall submit to the Administrator a plan, 

13 approved by the State regulatory authority or 

14 other entity charged with regulating tor setting 

15 the retail rates of such company, describing 

16 such company’s plans for the disposition of the 

17 value of emission allowances to be received pur18 suant to this subsection and subsection (e), in 

19 accordance with the requirements of this sub20 section and subsection (e). Such plan shall in21 clude a description of the manner in which the 

22 company will provide to industrial retail rate23 payers (including entities that receive emission 

24 allowances under part F) their ratable share of 

25 the value of such allowances. 
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1 ‘‘(C) REPORTS.—Not later than June 30, 

2 2013, and each calendar year thereafter 

3 through 2031, each electricity local distribution 

4 company shall submit a report to the Adminis5 trator, and to the relevant State regulatory au6 thority or other entity charged with regulating 

7 or setting the retail electricity rates of such 

8 company, describing the disposition of the value 

9 of any emission allowances received by such 

10 company in the prior calendar year pursuant to 

11 this subsection and subsection (e), including— 

12 ‘‘(i) a description of sales, transfer, 

13 exchange, or use by the company for com14 pliance with obligations under this title, of 

15 any such emission allowances; 

16 ‘‘(ii) the monetary value received by 

17 the company, whether in money or in some 

18 other form, from the sale, transfer, or ex19 change of any such emission allowances; 

20 ‘‘(iii) the manner in which the com21 pany’s disposition of any such emission al22 lowances complies with the requirements of 

23 this subsection and of subsection (e), in24 cluding each of the requirements of para25 graph (5) of this subsection, including the 
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1 requirement that industrial retail rate2 payers (including entities that receive 

3 emission allowances under part F) receive 

4 their ratable share of the value of such al5 lowances; and 

6 ‘‘(iv) such other information as the 

7 Administrator may require pursuant to 

8 subparagraph (A). 

9 ‘‘(D) PUBLICATION.—The Administrator 

10 shall make available to the public all plans and 

11 reports submitted under this subsection, includ12 ing by publishing such plans and reports on the 

13 Internet. 

14 ‘‘(8) AUDITS.—Each year, the Administrator 

15 shall audit a representative sample of electricity local 

16 distribution companies to ensure that emission al17 lowances distributed under this subsection have been 

18 used exclusively for the benefit of retail ratepayers 

19 and that such companies are complying with the re20 quirements of this subsection and of subsection (e), 

21 including the requirement that industrial retail rate22 payers (including entities that receive emission al23 lowances under part F) receive their ratable share of 

24 the value of such allowances. In selecting companies 

25 for audit, the Administrator shall take into account 
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1 any credible evidence of noncompliance with such re2 quirements. The Administrator shall make available 

3 to the public a report describing the results of each 

4 such audit, including by publishing such report on 

5 the Internet. 

6 ‘‘(9) ENFORCEMENT.—A violation of any re7 quirement of this subsection or of subsection (e) 

8 shall be a violation of this Act. Each emission allow9 ance the value of which is used in violation of the 

10 requirements of this subsection or of subsection (e) 

11 shall be a separate violation. 

12 ‘‘(c) MERCHANT COAL UNITS.— 

13 ‘‘(1) QUALIFYING EMISSIONS.—The qualifying 

14 emissions for a merchant coal unit for a given cal15 endar year shall be the product of the number of 

16 megawatt hours of merchant coal unit sales gen17 erated by such unit in such calendar year and the 

18 average carbon dioxide emissions per megawatt hour 

19 generated by such unit during the base period under 

20 paragraph (2), provided that the number of mega21 watt hours in a given calendar year for purposes of 

22 such calculation shall be reduced in proportion to 

23 the portion of such unit’s carbon dioxide emissions 

24 that are either— 
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1 ‘‘(A) captured and sequestered in such cal2 endar year; or 

3 ‘‘(B) attributable to the combustion or gas4 ification of biomass, to the extent that the 

5 owner or operator of the unit is not required to 

6 hold emission allowances for such emissions. 

7 ‘‘(2) BASE PERIOD.—For purposes of this sub8 section, the base period for a merchant coal unit 

9 shall be— 

10 ‘‘(A) calendar years 2006 through 2008; or 

11 ‘‘(B) in the case of a new merchant coal 

12 unit— 

13 ‘‘(i) the first full calendar year of op14 eration of such unit, if such unit com15 mences operation before January 1, 2012; 

16 ‘‘(ii) calendar year 2012, if such unit 

17 commences operation on or after January 

18 1, 2012, and before October 1, 2012; or 

19 ‘‘(iii) calendar year 2013, if such unit 

20 commences operation on or after October 

21 1, 2012, and before January 1, 2013. 

22 ‘‘(3) PHASE-DOWN SCHEDULE.—The Adminis23 trator shall identify an annual phase-down factor, 

24 applicable to distributions to merchant coal units for 

25 each of vintage years 2012 through 2029, that cor-
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1 responds to the overall decline in the amount of 

2 emission allowances allocated to the electricity sector 

3 in such years pursuant to section 782(a)(1). Such 

4 factor shall— 

5 ‘‘(A) for vintage year 2012, be equal to 

6 1.0; 

7 ‘‘(B) for each of vintage years 2013 

8 through 2029, correspond to the quotient of— 

9 ‘‘(i) the quantity of emission allow10 ances allocated under section 782(a)(1) for 

11 such vintage year; divided by 

12 ‘‘(ii) the quantity of emission allow13 ances allocated under section 782(a)(1) for 

14 vintage year 2012. 

15 ‘‘(4) DISTRIBUTION OF EMISSION ALLOW16 ANCES.—Not later than March 1 of 2013 and each 

17 calendar year through 2030, the Administrator shall 

18 distribute emission allowances of the preceding vin19 tage year to the owner or operator of each merchant 

20 coal unit described in subsection (a)(6)(C) in an 

21 amount equal to the product of— 

22 ‘‘(A) 0.5; 

23 ‘‘(B) the qualifying emissions for such 

24 merchant coal unit for the preceding year, as 

25 determined under paragraph (1); and 
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1 ‘‘(C) the phase-down factor for the pre2 ceding calendar year, as identified under para3 graph (3). 

4 ‘‘(5) ADJUSTMENT.— 

5 ‘‘(A) STUDY.—Not later than July 1, 

6 2014, the Administrator, in consultation with 

7 the Federal Energy Regulatory Commission, 

8 shall complete a study to determine whether the 

9 allocation formula under paragraph (3) is re10 sulting in, or is likely to result in, windfall prof11 its to merchant coal generators or substantially 

12 disparate treatment of merchant coal genera13 tors operating in different markets or regions. 

14 ‘‘(B) REGULATION.—If the Administrator, 

15 in consultation with the Federal Energy Regu16 latory Commission, makes an affirmative find17 ing of windfall profits or disparate treatment 

18 under subparagraph (A), the Administrator 

19 shall, not later than 18 months after the com20 pletion of the study described in subparagraph 

21 (A), promulgate regulations providing for the 

22 adjustment of the allocation formula under 

23 paragraph (3) to mitigate, to the extent prac24 ticable, such windfall profits, if any, and such 

25 disparate treatment, if any. 
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1 ‘‘(6) LIMITATION ON ALLOWANCES.—Notwith2 standing paragraph (4) or (5), for each vintage year 

3 the Administrator shall distribute under this sub4 section no more than 10 percent of the total quan5 tity of emission allowances available for such vintage 

6 year for distribution to the electricity sector under 

7 section 782(a)(1). If the quantity of emission allow8 ances that would otherwise be distributed pursuant 

9 to paragraph (4) or (5) for any vintage year would 

10 exceed such limit, the Administrator shall distribute 

11 10 percent of the total emission allowances available 

12 for distribution under section 782(a)(1) for such vin13 tage year ratably among merchant coal generators 

14 based on the applicable formula under paragraph (4) 

15 or (5). 

16 ‘‘(7) ELIGIBILITY.—The owner or operator of a 

17 merchant coal unit shall not be eligible to receive 

18 emission allowances under this subsection for any 

19 vintage year for which such owner or operator has 

20 elected to receive emission allowances for the same 

21 unit under subsection (d). 

22 ‘‘(d) LONG-TERM CONTRACT GENERATORS.— 

23 ‘‘(1) DISTRIBUTION.—Not later than March 1, 

24 2013, and each calendar year through 2030, the Ad25 ministrator shall distribute to the owner or operator 
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1 of each long-term contract generator a quantity of 

2 emission allowances of the preceding vintage year 

3 that is equal to the sum of— 

4 ‘‘(A) the number of tons of carbon dioxide 

5 emitted as a result of a qualifying electricity 

6 sales agreement referred to in subsection 

7 (a)(5)(B)(i); and 

8 ‘‘(B) the incremental number of tons of 

9 carbon dioxide emitted solely as a result of a 

10 qualifying thermal sales agreement referred to 

11 in subsection (a)(5)(B)(ii), provided that in no 

12 event shall the Administrator distribute more 

13 than 1 emission allowance for the same ton of 

14 emissions. 

15 ‘‘(2) LIMITATION ON ALLOWANCES.— Notwith16 standing paragraph (1), for each vintage year the 

17 Administrator shall distribute under this subsection 

18 no more than 4.3 percent of the total quantity of 

19 emission allowances available for such vintage year 

20 for distribution to the electricity sector under section 

21 782(a)(1). If the quantity of emission allowances 

22 that would otherwise be distributed pursuant to 

23 paragraph (1) for any vintage year would exceed 

24 such limit, the Administrator shall distribute 4.3 

25 percent of the total emission allowances available for 
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1 distribution under section 782(a)(1) for such vintage 

2 year ratably among long-term contract generators 

3 based on paragraph (1). 

4 ‘‘(3) ELIGIBILITY.— 

5 ‘‘(A) FACILITY ELIGIBILITY.—The owner 

6 or operator of a facility shall cease to be eligible 

7 to receive emission allowances under this sub8 section upon the earliest date on which the fa9 cility no longer meets each and every element of 

10 the definition of a long-term contract generator 

11 under subsection (a)(5). 

12 ‘‘(B) CONTRACT ELIGIBILITY.—The owner 

13 or operator of a facility shall cease to be eligible 

14 to receive emission allowances under this sub15 section based on an electricity or thermal sales 

16 agreement referred to in subsection (a)(5)(B) 

17 upon the earliest date that such agreement— 

18 ‘‘(i) expires; 

19 ‘‘(ii) is terminated; or 

20 ‘‘(iii) is amended in any way that 

21 changes the location of the facility, the 

22 price (whether a fixed price or price for23 mula) for electricity or thermal energy sold 

24 under such agreement, the quantity of 

25 electricity or thermal energy sold under the 
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1 agreement, or the expiration or termi2 nation date of the agreement. 

3 ‘‘(4) DEMONSTRATION OF ELIGIBILITY.—To be 

4 eligible to receive allowance distributions under this 

5 subsection, the owner or operator of a long-term 

6 contract generator shall submit each of the following 

7 in writing to the Administrator within 180 days 

8 after the date of enactment of this title, and not 

9 later than September 30 of each vintage year for 

10 which such generator wishes to receive emission al11 lowances: 

12 ‘‘(A) A certificate of representation de13 scribed in section 700(15). 

14 ‘‘(B) An identification of each owner and 

15 each operator of the facility. 

16 ‘‘(C) An identification of the units at the 

17 facility and the location of the facility. 

18 ‘‘(D) A written certification by the des19 ignated representative that the facility meets all 

20 the requirements of the definition of a long21 term contract generator. 

22 ‘‘(E) The expiration date of each quali23 fying electricity or thermal sales agreement re24 ferred to in subsection (a)(5)(B). 
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1 ‘‘(F) A copy of each qualifying electricity 

2 or thermal sales agreement referred to in sub3 section (a)(5)(B). 

4 ‘‘(5) NOTIFICATION.—Not later than 30 days 

5 after, in accordance with paragraph (3), a facility or 

6 an agreement ceases to meet the eligibility require7 ments for distribution of emission allowances pursu8 ant to this subsection, the designated representative 

9 of such facility shall notify the Administrator in 

10 writing when, and on what basis, such facility or 

11 agreement ceased to meet such requirements. 

12 ‘‘(e) SMALL LDCS.— 

13 ‘‘(1) DISTRIBUTION.—Not later than Sep14 tember 30 of each calendar year from 2011 through 

15 2028, the Administrator shall, in accordance with 

16 this subsection, distribute emission allowances allo17 cated pursuant to section 782(a)(2) for the following 

18 vintage year. Such allowances shall be distributed 

19 ratably among small LDCs based on historic emis20 sions in accordance with the same measure of such 

21 emissions applied to each such small LDC for the 

22 relevant vintage year under subsection (b)(2) of this 

23 section. 
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1 ‘‘(2) USES.—A small LDC receiving allowances 

2 under this section shall use such allowances exclu3 sively for the following purposes: 

4 ‘‘(A) Cost-effective programs to achieve 

5 electricity savings, provided that such savings 

6 shall not be transferred or used for compliance 

7 with section 610 of the Public Utility Regu8 latory Policies Act of 1978. 

9 ‘‘(B) Deployment of technologies to gen10 erate electricity from renewable energy re11 sources, provided that any Federal renewable 

12 electricity credits issued based on generation 

13 supported under this section shall be submitted 

14 to the Federal Energy Regulatory Commission 

15 for voluntary retirement and shall not be used 

16 for compliance with section 610 of the Public 

17 Utility Regulatory Policies Act of 1978. 

18 ‘‘(C) Assistance programs to reduce elec19 tricity costs for low-income residential rate20 payers of such small LDC, provided that such 

21 assistance is made available equitably to all res22 idential ratepayers below a certain income level, 

23 which shall not be higher than 200 percent of 

24 the poverty line (as that term is defined in sec-
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1 tion 673(2) of the Community Services Block 

2 Grant Act (42 U.S.C. 9902(2)). 

3 ‘‘(3) REQUIREMENTS.—As part of the regula4 tions promulgated under subsection (g), the Admin5 istrator shall prescribe— 

6 ‘‘(A) after consultation with the Federal 

7 Energy Regulatory Commission, requirements 

8 to ensure that programs and projects under 

9 paragraph (2)(A) and (B) are consistent with 

10 the standards established by, and effectively 

11 supplement electricity savings and generation of 

12 electricity from renewable energy resources 

13 achieved by, the Combined Efficiency and Re14 newable Electricity Standard established under 

15 section 610 of the Public Utility Regulatory 

16 Policies Act of 1978; 

17 ‘‘(B) eligibility criteria and guidelines for 

18 consumer assistance programs for low-income 

19 residential ratepayers under paragraph (2)(C); 

20 and 

21 ‘‘(C) such other requirements as the Ad22 ministrator determines appropriate to ensure 

23 compliance with the requirements of this sub24 section. 
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1 ‘‘(4) REPORTING.—Reports submitted under 

2 subsection (b)(7) shall include, in accordance with 

3 such requirements as the Administrator may pre4 scribe— 

5 ‘‘(A) a description of any facilities de6 ployed under paragraph (2)(A), the quantity of 

7 resulting electricity generation from renewable 

8 energy resources; 

9 ‘‘(B) an assessment demonstrating the 

10 cost-effectiveness of, and electricity savings 

11 achieved by, programs supported under para12 graph (2)(B); and 

13 ‘‘(C) a description of assistance provided to 

14 low-income retail ratepayers under paragraph 

15 (2)(C). 

16 ‘‘(f) CERTAIN COGENERATION FACILITIES.— 

17 ‘‘(1) ELIGIBLE COGENERATION FACILITIES.— 

18 For purposes of this subsection, an ‘eligible cogen19 eration facility’ is a facility that— 

20 ‘‘(A) is a qualifying co-generation facility 

21 (as that term is defined in section 3(18)(B) of 

22 the Federal Power Act (16 U.S.C. 796(18)(B)); 

23 ‘‘(B) derives 80 percent or more of its heat 

24 input from coal, petroleum coke, or any com25 bination of these 2 fuels; 
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1 ‘‘(C) has a nameplate capacity of 100 

2 megawatts or greater; 

3 ‘‘(D) was in operation as of January 1, 

4 2009, and remains in operation as of the date 

5 of any distribution of emission allowances under 

6 this subsection; 

7 ‘‘(E) in calendar years 2006 through 2008 

8 sold, and as of the date of any distribution of 

9 emission allowances under this section sells, 

10 steam or electricity directly and solely to mul11 tiple, separately-owned industrial or commercial 

12 facilities co-located at the same site with the co13 generation facility; and 

14 ‘‘(F) is not eligible to receive allowances 

15 under any other subsection of this section or 

16 under part F of this title. 

17 ‘‘(2) DISTRIBUTION.—The Administrator shall 

18 distribute the emission allowances allocated pursuant 

19 to section 782(a)(3) to owners or operators of eligi20 ble cogeneration facilities ratably based on the car21 bon dioxide emissions of each such facility in cal22 endar years 2006 through 2008. The Adminis23 trator— 

24 ‘‘(A) shall not, in any year, distribute 

25 emission allowances under this subsection to the 
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1 owner or operator of any eligible cogeneration 

2 facility in excess of the amount necessary to 

3 offset such facility’s cost of compliance with the 

4 requirements of this title in that year; and 

5 ‘‘(B) may distribute such allowances over a 

6 period of years if annual distributions under 

7 this subsection would otherwise exceed the limi8 tation in subparagraph (A), provided that in no 

9 event shall distributions be made under this 

10 subsection after calendar year 2025. 

11 ‘‘(3) REQUIREMENTS.—The Administrator 

12 shall, by regulation, establish requirements to ensure 

13 that the value of any emission allowances distributed 

14 pursuant to this subsection are passed through, on 

15 an equitable basis, to the facilities to which the rel16 evant cogeneration facility provides electricity or 

17 steam deliveries, including any facility owned or op18 erated by the owner or operator of the cogeneration 

19 facility. 

20 ‘‘(g) REGULATIONS.—Not later than 2 years after 

21 the date of enactment of this title, the Administrator, in 

22 consultation with the Federal Energy Regulatory Commis23 sion, shall promulgate regulations to implement the re24 quirements of this section. 
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1 ‘‘SEC. 784. NATURAL GAS CONSUMERS. 

2 ‘‘(a) DEFINITIONS.—For purposes of this section: 

3 ‘‘(1) COST-EFFECTIVE.—The term ‘cost-effec4 tive’, with respect to an energy efficiency program, 

5 means that the program meets the Total Resource 

6 Cost Test, which requires that the net present value 

7 of economic benefits over the life of the program, in8 cluding avoided supply and delivery costs and de9 ferred or avoided investments, is greater than the 

10 net present value of the economic costs over the life 

11 of the program, including program costs and incre12 mental costs borne by the energy consumer. 

13 ‘‘(2) NATURAL GAS LOCAL DISTRIBUTION COM14 PANY.—The term ‘natural gas local distribution 

15 company’ means a natural gas local distribution 

16 company that is a covered entity. 

17 ‘‘(3) NON-COVERED ENTITY.—The term ‘non18 covered entity’ means, when used in reference to a 

19 date or period prior to the enactment of this title, 

20 an entity that would not have been a covered entity 

21 if this title had been in effect during such date or 

22 period. 

23 ‘‘(4) STATE REGULATORY AUTHORITY.—The 

24 term ‘State regulatory authority’ has the meaning 

25 given the term ‘State commission’ in section 2(8) of 

26 the Natural Gas Act (15 U.S.C. 717a(8)). 
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1 ‘‘(b) DISTRIBUTION.—Not later than June 30 of 

2 2015 and each calendar year thereafter through 2028, the 

3 Administrator shall distribute to natural gas local dis4 tribution companies for the benefit of retail ratepayers the 

5 quantity of emission allowances allocated for the following 

6 vintage year pursuant to section 782(b). Such allowances 

7 shall be distributed among local natural gas distribution 

8 companies based on the following formula: 

9 ‘‘(1) INITIAL FORMULA.—Except as provided in 

10 paragraph (2), for each vintage year, the Adminis11 trator shall distribute emission allowances among 

12 natural gas local distribution companies ratably 

13 based on each such company’s annual average retail 

14 natural gas deliveries for 2006 through 2008 to cus15 tomers that were non-covered entities, unless the 

16 owner or operator of the company selects 3 other 

17 consecutive years between 1999 and 2008, inclusive, 

18 and timely notifies the Administrator of its selection. 

19 ‘‘(2) UPDATING.—Prior to distributing 2019 

20 vintage year emission allowances and at 3-year inter21 vals thereafter, the Administrator shall update the 

22 distribution formula under this subsection to reflect 

23 changes in each natural gas local distribution com24 pany’s service territory since the most recent for25 mula was established. For each successive 3-year pe-
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1 riod, the Administrator shall distribute allowances 

2 ratably among natural gas local distribution compa3 nies based on the product of— 

4 ‘‘(A) each natural gas local distribution 

5 company’s average annual natural gas deliveries 

6 per customer to customers that were non-cov7 ered entities during calendar years 2006 

8 through 2008, or during the 3 alternative con9 secutive years selected by such company under 

10 paragraph (1); and 

11 ‘‘(B) the number of customers of such nat12 ural gas local distribution company that are not 

13 covered entities in the most recent year in 

14 which the formula is updated under this para15 graph. 

16 ‘‘(c) USE OF ALLOWANCES.— 

17 ‘‘(1) RATEPAYER BENEFIT.—Emission allow18 ances distributed to a natural gas local distribution 

19 company under this section shall be used exclusively 

20 for the benefit of retail ratepayers of such natural 

21 gas local distribution company other than covered 

22 entities and may not be used to support natural gas 

23 sales or deliveries to entities or persons other than 

24 such ratepayers. 
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1 ‘‘(2) RATEPAYER CLASSES.—In using emission 

2 allowances distributed under this section for the ben3 efit of ratepayers, a natural gas local distribution 

4 company shall ensure that ratepayer benefits are 

5 distributed— 

6 ‘‘(A) among ratepayer classes ratably 

7 based on natural gas deliveries to each class, 

8 excluding deliveries to covered entities; and 

9 ‘‘(B) equitably among individual ratepayers 

10 other than covered entities within each rate11 payer class. 

12 ‘‘(3) LIMITATION.—In general, a natural gas 

13 local distribution company shall not use the value of 

14 emission allowances distributed under this section to 

15 provide to any ratepayer a rebate that is based solely 

16 on the quantity of natural gas delivered to such 

17 ratepayer. To the extent a natural gas local distribu18 tion company uses the value of emission allowances 

19 distributed under this section to provide rebates, it 

20 shall, to the maximum extent practicable, provide 

21 such rebates with regard to the fixed portion of rate22 payers’ bills or as a fixed creditor rebate on natural 

23 gas bills. 

24 ‘‘(4) INDUSTRIAL RATEPAYERS.—Notwith25 standing paragraph (3), if compliance with the re-
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1 quirements of this title results (or would otherwise 

2 result) in an increase in natural gas costs for indus3 trial retail ratepayers of any given natural gas local 

4 distribution company that are not covered entities 

5 (including entities that receive emission allowances 

6 pursuant to part F), such natural gas local distribu7 tion company— 

8 ‘‘(A) shall pass through to industrial retail 

9 ratepayers that are not covered entities their 

10 ratable share (based on deliveries to each rate11 payer class) of the value of the emission allow12 ances distributed to such company under this 

13 subsection, to reduce natural gas cost impacts 

14 on such ratepayers; and 

15 ‘‘(B) may do so based on the quantity of 

16 natural gas delivered to individual industrial re17 tail ratepayers. 

18 ‘‘(5) ENERGY EFFICIENCY PROGRAMS.—The 

19 value of no less than one third of the emission allow20 ances distributed to natural gas local distribution 

21 companies pursuant to this section in any calendar 

22 year shall be used for cost-effective energy efficiency 

23 programs for natural gas consumers. Such programs 

24 must be authorized and overseen by the State regu25 latory authority, or by the entity with authority to 
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•HR 2454 EH

1 regulate or set retail natural gas rates in the case 

2 of a natural gas local distribution company that is 

3 not regulated by a State regulatory authority. 

4 ‘‘(6) CERTAIN INTRACOMPANY DELIVERIES.—If 

5 a natural gas local distribution company makes an 

6 intracompany delivery of natural gas to a customer 

7 that is not a covered entity, for which such company 

8 is required to hold emission allowances under section 

9 722, such customer shall, for purposes of this sec10 tion, be considered a retail ratepayer and a member 

11 of a ratepayer class to be determined by the relevant 

12 State regulatory authority, or other entity with au13 thority to regulate or set natural gas rates in the 

14 case of a company not regulated by a State regu15 latory authority. 

16 ‘‘(7) GUIDELINES.—As part of the regulations 

17 promulgated under subsection (h), the Administrator 

18 shall, after consultation with State regulatory au19 thorities, prescribe guidelines for the implementation 

20 of the requirements of this subsection. Such guide21 lines shall include requirements to ensure that in22 dustrial retail ratepayers that are not covered enti23 ties (including entities that receive emission allow24 ances under part F) receive their ratable share of 

25 the value of the allowances distributed to each nat-
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•HR 2454 EH

1 ural gas local distribution company pursuant to this 

2 section. 

3 ‘‘(d) REGULATORY PROCEEDINGS.— 

4 ‘‘(1) REQUIREMENT.—No natural gas local dis5 tribution company shall be eligible to receive emis6 sion allowances under this section unless the State 

7 regulatory authority with authority over the retail 

8 rates of such company, or the entity with authority 

9 to regulate or set retail rates of a natural gas local 

10 distribution company not regulated by a State regu11 latory authority, has— 

12 ‘‘(A) after public notice and an opportunity 

13 for comment, promulgated a regulation or com14 pleted a public rate proceeding (or the equiva15 lent, in the case of a ratemaking entity other 

16 than a State regulatory authority) that provides 

17 for the full implementation of the requirements 

18 of subsection (c); and 

19 ‘‘(B) made available to the Administrator 

20 and the public a report describing, in adequate 

21 detail, the manner in which the requirements of 

22 subsection (c) will be implemented. 

23 ‘‘(2) UPDATING.—The Administrator shall re24 quire, as a condition of continued receipt of emission 

25 allowances under this section, that a new regulation 
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•HR 2454 EH

1 be promulgated or rate proceeding be completed, 

2 after public notice and an opportunity for comment, 

3 and a new report be made available to the Adminis4 trator and the public, pursuant to paragraph (1), 

5 not less frequently than every 5 years. 

6 ‘‘(e) PLANS AND REPORTING.— 

7 ‘‘(1) REGULATIONS.—As part of the regulations 

8 promulgated under subsection (h), the Administrator 

9 shall prescribe requirements governing plans and re10 ports to be submitted in accordance with this sub11 section. 

12 ‘‘(2) PLANS.—Not later than April 30, 2015, 

13 and every 5 years thereafter through 2025, each 

14 natural gas local distribution company shall submit 

15 to the Administrator a plan, approved by the State 

16 regulatory authority or other entity charged with 

17 regulating or setting the retail rates of such com18 pany, describing such company’s plans for the dis19 position of the value of emission allowances to be re20 ceived pursuant to this section, in accordance with 

21 the requirements of this section. 

22 ‘‘(3) REPORTS.—Not later than June 30, 2017, 

23 and each calendar year thereafter through 2031, 

24 each natural gas local distribution company shall 

25 submit a report to the Administrator, approved by 
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1 the relevant State regulatory authority or other enti2 ty charged with regulating or setting the retail nat3 ural gas rates of such company, describing the dis4 position of the value of any emission allowances re5 ceived by such company in the prior calendar year 

6 pursuant to this section, including— 

7 ‘‘(A) a description of sales, transfer, ex8 change, or use by the company for compliance 

9 with obligations under this title, of any such 

10 emission allowances; 

11 ‘‘(B) the monetary value received by the 

12 company, whether in money or in some other 

13 form, from the sale, transfer, or exchange of 

14 emission allowances received by the company 

15 under this section; 

16 ‘‘(C) the manner in which the company’s 

17 disposition of emission allowances received 

18 under this section complies with the require19 ments of this section, including each of the re20 quirements of subsection (c); 

21 ‘‘(D) the cost-effectiveness of, and energy 

22 savings achieved by, energy efficiency programs 

23 supported through such emission allowances; 

24 and 
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1 ‘‘(E) such other information as the Admin2 istrator may require pursuant to paragraph (1). 

3 ‘‘(4) PUBLICATION.—The Administrator shall 

4 make available to the public all plans and reports 

5 submitted by natural gas local distribution compa6 nies under this subsection, including by publishing 

7 such plans and reports on the Internet. 

8 ‘‘(f) AUDITS.—Each year, the Administrator shall 

9 audit a representative sample of natural gas local distribu10 tion companies to ensure that emission allowances distrib11 uted under this section have been used exclusively for the 

12 benefit of retail ratepayers and that such companies are 

13 complying with the requirements of this section. In select14 ing companies for audit, the Administrator shall take into 

15 account any credible evidence of noncompliance with such 

16 requirements. The Administrator shall make available to 

17 the public a report describing the results of each such 

18 audit, including by publishing such report on the Internet. 

19 ‘‘(g) ENFORCEMENT.—A violation of any require20 ment of this section shall be a violation of this Act. Each 

21 emission allowance the value of which is used in violation 

22 of the requirements of this section shall be a separate vio23 lation. 

24 ‘‘(h) REGULATIONS.—Not later than January 1, 

25 2014, the Administrator, in consultation with the Federal 
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•HR 2454 EH

1 Energy Regulatory Commission, shall promulgate regula2 tions to implement the requirements of this section. 

3 ‘‘SEC. 785. HOME HEATING OIL, PROPANE, AND KEROSENE 

4 CONSUMERS. 

5 ‘‘(a) DEFINITIONS.—For purposes of this section: 

6 ‘‘(1) CARBON CONTENT.—The term ‘carbon 

7 content’ means the amount of carbon dioxide that 

8 would be emitted as a result of the combustion of a 

9 fuel. 

10 ‘‘(2) COST-EFFECTIVE.—The term ‘cost-effec11 tive’ has the meaning given that term in section 

12 784(a)(1). 

13 ‘‘(3) OILHEAT FUEL.—The term ‘oilheat fuel’ 

14 means fuel that— 

15 ‘‘(A) is— 

16 ‘‘(i) No. 1 distillate; 

17 ‘‘(ii) No. 2 dyed distillate; 

18 ‘‘(iii) a liquid blended with No. 1 dis19 tillate or No. 2 dyed distillate; or 

20 ‘‘(iv) a biobased liquid; and 

21 ‘‘(B) is used as a fuel for nonindustrial 

22 commercial or residential space or hot water 

23 heating. 

24 ‘‘(b) DISTRIBUTION AMONG STATES.—Not later than 

25 September 30 of each of calendar years 2011 through 
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1 2028, the Administrator shall distribute among the States, 

2 in accordance with this section, the quantity of emission 

3 allowances allocated for the following vintage year pursu4 ant to section 782(c). The Administrator shall distribute 

5 emission allowances among the States under this section 

6 each year ratably based on the ratio of— 

7 ‘‘(1) the carbon content of oilheat fuel, propane, 

8 and kerosene sold to consumers within each State in 

9 the preceding year for residential or commercial 

10 uses; to 

11 ‘‘(2) the carbon content of oilheat fuel, propane, 

12 and kerosene sold to consumers within the United 

13 States in the preceding year for residential or com14 mercial uses. 

15 ‘‘(c) USE OF ALLOWANCES.— 

16 ‘‘(1) IN GENERAL.—States shall use emission 

17 allowances distributed under this section exclusively 

18 for the benefit of consumers of oilheat fuel, propane, 

19 or kerosene for residential or commercial purposes. 

20 Such proceeds shall be used exclusively for— 

21 ‘‘(A) cost-effective energy efficiency pro22 grams for consumers that use oilheat fuel, pro23 pane, or kerosene for residential or commercial 

24 purposes; or 
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•HR 2454 EH

1 ‘‘(B) rebates or other direct financial as2 sistance programs for consumers of oilheat fuel, 

3 propane, or kerosene used for residential or 

4 commercial purposes. 

5 ‘‘(2) ADMINISTRATION AND DELIVERY MECHA6 NISMS.—In administering programs supported by 

7 this section, States shall— 

8 ‘‘(A) use no less than 50 percent of the 

9 value of emission allowances received under this 

10 section for cost-effective energy efficiency pro11 grams to reduce consumers’ overall fuel costs; 

12 ‘‘(B) to the extent practicable, deliver con13 sumer support under this section through exist14 ing energy efficiency and consumer energy as15 sistance programs or delivery mechanisms, in16 cluding, where appropriate, programs or mecha17 nisms administered by parties other than the 

18 State; and 

19 ‘‘(C) seek to coordinate the administration 

20 and delivery of energy efficiency and consumer 

21 energy assistance programs supported under 

22 this section, with one another and with existing 

23 programs for various fuel types, so as to deliver 

24 comprehensive, fuel-blind, coordinated programs 

25 to consumers. 
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1 ‘‘(d) REPORTING.—Each State receiving emission al2 lowances under this section shall submit to the Adminis3 trator, within 12 months of each receipt of such allow4 ances, a report, in accordance with such requirements as 

5 the Administrator may prescribe, that— 

6 ‘‘(1) describes the State’s use of emission allow7 ances distributed under this section, including a de8 scription of the energy efficiency and consumer as9 sistance programs supported with such allowances; 

10 ‘‘(2) demonstrates the cost-effectiveness of, and 

11 the energy savings and greenhouse gas emissions re12 ductions achieved by, energy efficiency programs 

13 supported under this section; and 

14 ‘‘(3) includes a report prepared by an inde15 pendent third party, in accordance with such regula16 tions as the Administrator may promulgate, evalu17 ating the performance of the energy efficiency and 

18 consumer assistance programs supported under this 

19 section. 

20 ‘‘(e) ENFORCEMENT.—If the Administrator deter21 mines that a State is not in compliance with this section, 

22 the Administrator may withhold a portion of the emission 

23 allowances, the quantity of which is equal to up to twice 

24 the quantity of the allowances that the State failed to use 

25 in accordance with the requirements of this section, that 
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•HR 2454 EH

1 such State would otherwise be eligible to receive under this 

2 section in later years. Allowances withheld pursuant to 

3 this subsection shall be distributed among the remaining 

4 States ratably in accordance with the formula in sub5 section (b). 

6 ‘‘SEC. 787. ALLOCATIONS TO REFINERIES. 

7 ‘‘(a) PURPOSE.—The purpose of this section is to 

8 provide emission allowance rebates to petroleum refineries 

9 in the United States in a manner that promotes energy 

10 efficiency and a reduction in greenhouse gas emissions at 

11 such facilities. 

12 ‘‘(b) DEFINITIONS.—In this section: 

13 ‘‘(1) EMISSIONS.—The term ‘emissions’ in14 cludes direct emissions from fuel combustion, proc15 ess emissions, and indirect emissions from the gen16 eration of electricity, steam, and hydrogen used to 

17 produce the output of a petroleum refinery or the 

18 petroleum refinery sector. 

19 ‘‘(2) PETROLEUM REFINERY.—The term ‘petro20 leum refinery’ means a facility classified under code 

21 324110 of the North American Industrial Classifica22 tion System of 2002. 

23 ‘‘(3) SMALL BUSINESS REFINER.—The term 

24 ‘small business refiner’ means a refiner that meets 

25 the applicable Federal refinery capacity and em-
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•HR 2454 EH

1 ployee limitations criteria described in section 

2 45H(c)(1) of the Internal Revenue Code of 1986 (as 

3 in effect on the date of enactment of this section and 

4 without regard to section 45H(d)). Eligibility of a 

5 small business refiner under this paragraph shall not 

6 be recalculated or disallowed on account of (i) its 

7 merger with another small business refiner or refin8 ers after December 31, 2002 or (ii) its acquisition 

9 of another small business refiner (or refinery of such 

10 refiner) after December 31, 2002. 

11 ‘‘(c) IN GENERAL.—For each vintage year between 

12 2014 and 2026, the Administrator shall distribute allow13 ances pursuant to this section to owners and operators of 

14 petroleum refineries, including small business refiners, in 

15 the United States. 

16 ‘‘(d) DISTRIBUTION SCHEDULE.—The Administrator 

17 shall distribute emission allowances pursuant to the regu18 lations issued under subsection (e) for each vintage year 

19 no later than October 31 of the preceding calendar year. 

20 ‘‘(e) REGULATIONS.—Not later than 3 years after the 

21 date of enactment of this title, the Administrator, in con22 sultation with the Administrator of the Energy Informa23 tion Administration, shall promulgate regulations that es24 tablish a formula for distributing emission allowances con25 sistent with the purpose of this section. In establishing 
938 

•HR 2454 EH

1 such formula, the Administrator shall consider the relative 

2 complexity of refinery processes and appropriate mecha3 nisms to take energy efficiency and greenhouse gas reduc4 tions into account. If a petroleum refinery’s electricity pro5 vider received a free allocation of emission allowances pur6 suant to section 782(a), the Administrator shall take this 

7 free allocation into account when establishing such for8 mula to avoid rebates to a petroleum refinery for costs 

9 that the Administrator determines were not incurred by 

10 the petroleum refinery because the allowances were freely 

11 allocated to the petroleum refinery’s electricity provider 

12 and used for the benefit of the petroleum refinery. This 

13 formula shall apply separately to the distribution of allow14 ances allocated pursuant to section 782(j)(1) and to those 

15 allocated under section 782(j)(2). 

16 ‘‘SEC. 788. SUPPLEMENTAL AGRICULTURE AND RENEW17 ABLE ENERGY INCENTIVES PROGRAMS. 

18 ‘‘(a) IN GENERAL.—Emission allowances allocated 

19 pursuant to section 782(u) shall be distributed by the Ad20 ministrator at the direction of the Secretary of Energy 

21 and the Secretary of Agriculture in accordance with this 

22 section. Not less than 50 percent of the allowances shall 

23 be available for the program established pursuant to sub24 section (b). 

25 ‘‘(b) AGRICULTURE INCENTIVES PROGRAM.— 
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1 ‘‘(1) ESTABLISHMENT.—The Secretary of Agri2 culture shall establish by rule a program to provide 

3 incentives in the form of emission allowances for ac4 tivities undertaken in the agriculture sector that re5 duce greenhouse gas emissions or sequester carbon. 

6 Under this program, the Secretary of Agriculture 

7 shall provide incentives for projects and activities 

8 that— 

9 ‘‘(A) reduce or avoid greenhouse gas emis10 sions, or sequester greenhouse gases, but do not 

11 meet the criteria for offset credits established 

12 under the American Clean Energy and Security 

13 Act of 2009; 

14 ‘‘(B) support actions to adapt to climate 

15 change; or 

16 ‘‘(C) prevent conversion of land that would 

17 increase greenhouse gas emissions (including 

18 projects and activities that complement or sup19 plement conservation programs administered by 

20 the Secretary). 

21 ‘‘(2) CONSIDERATIONS.—In designing this pro22 gram, the Secretary shall ensure that it provides 

23 support for— 

24 ‘‘(A) development and demonstration of 

25 practices to reduce greenhouse gas emissions or 
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•HR 2454 EH

1 sequester carbon in agricultural operations 

2 where there are limited recognized opportunities 

3 to achieve such emissions reductions or seques4 tration; and 

5 ‘‘(B) projects that reduce greenhouse gas 

6 emissions or increase sequestration of green7 house gases and also achieve other significant 

8 environmental benefits, such as the improve9 ment of water or air quality. 

10 ‘‘(3) RESEARCH.—The Secretary shall establish 

11 by rule a program to conduct research to develop ad12 ditional projects and activities for crops to find addi13 tional techniques and methods to reduce greenhouse 

14 gas emissions or sequester greenhouse gases that 

15 may or may not meet the criteria for offset credits 

16 established under the American Clean Energy and 

17 Security Act of 2009. 

18 ‘‘(4) USE OF INFORMATION.—Information and 

19 data generated by this program should, where rel20 evant, be used to inform the development of addi21 tional offset practices and methodologies. 

22 ‘‘(c) RENEWABLE ENERGY INCENTIVES PROGRAM.— 

23 The Secretary of Energy and the Administrator shall es24 tablish by rule a program to provide allowances to State 
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•HR 2454 EH

1 and local governments to support the deployment of re2 newable energy infrastructure. 

3 ‘‘SEC. 789. CLIMATE CHANGE CONSUMER REFUNDS. 

4 ‘‘(a) REFUND.—In each year after deposits are made 

5 to the Climate Change Consumer Refund Account, the 

6 Secretary of the Treasury shall provide tax refunds on a 

7 per capita basis to each household in the United States 

8 that shall collectively equal the amount deposited into the 

9 Climate Change Consumer Refund Account. 

10 ‘‘(b) LIMITATIONS.—The Secretary of the Treasury 

11 shall establish procedures to ensure that individuals who 

12 are not— 

13 ‘‘(1) citizens or nationals of the United States; 

14 or 

15 ‘‘(2) immigrants lawfully residing in the United 

16 States, 

17 are excluded for the purpose of calculating and distrib18 uting refunds under this section. 

19 ‘‘SEC. 790. EXCHANGE FOR STATE-ISSUED ALLOWANCES. 

20 ‘‘(a) IN GENERAL.—Not later than 1 year after the 

21 date of enactment of this title, the Administrator shall 

22 issue regulations allowing any person in the United States 

23 to exchange greenhouse gas emission allowances issued be24 fore December 31, 2011, by the State of California or for 

25 the Regional Greenhouse Gas Initiative, or the Western 
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1 Climate Initiative (in this section referred to as ‘State al2 lowances’) for emission allowances established by the Ad3 ministrator under section 721(a). 

4 ‘‘(b) REGULATIONS.—Regulations issued under sub5 section (a) shall— 

6 ‘‘(1) provide that a person exchanging State al7 lowances under this section receive emission allow8 ances established under section 721(a) in the 

9 amount that is sufficient to compensate for the cost 

10 of obtaining and holding such State allowances; 

11 ‘‘(2) establish a deadline by which persons must 

12 exchange the State allowances; 

13 ‘‘(3) provide that the Federal emission allow14 ances disbursed pursuant to this section shall be de15 ducted from the allowances to be auctioned pursuant 

16 to section 782(d); and 

17 ‘‘(4) require that, once exchanged, the credit or 

18 other instrument be retired for purposes of use 

19 under the program by or for which it was originally 

20 issued. 

21 ‘‘(c) COST OF OBTAINING STATE ALLOWANCE.—For 

22 purposes of this section, the cost of obtaining a State al23 lowance shall be the average auction price, for emission 

24 allowances issued in the year in which the State allowance 
943 

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1 was issued, under the program under which the State al2 lowance was issued. 

3 ‘‘SEC. 791. AUCTION PROCEDURES. 

4 ‘‘(a) IN GENERAL.—To the extent that auctions of 

5 emission allowances by the Administrator are authorized 

6 by this part, such auctions shall be carried out pursuant 

7 to this section and the regulations established hereunder. 

8 ‘‘(b) INITIAL REGULATIONS.—Not later than 12 

9 months after the date of enactment of this title, the Ad10 ministrator, in consultation with other agencies, as appro11 priate, shall promulgate regulations governing the auction 

12 of allowances under this section. Such regulations shall in13 clude the following requirements: 

14 ‘‘(1) FREQUENCY; FIRST AUCTION.—Auctions 

15 shall be held four times per year at regular intervals, 

16 with the first auction to be held no later than March 

17 31, 2011. 

18 ‘‘(2) AUCTION SCHEDULE; CURRENT AND FU19 TURE VINTAGES.—The Administrator shall, at each 

20 quarterly auction under this section, offer for sale 

21 both a portion of the allowances with the same vin22 tage year as the year in which the auction is being 

23 conducted and a portion of the allowances with vin24 tage years from future years. The preceding sen25 tence shall not apply to auctions held before 2012, 
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1 during which period, by necessity, the Administrator 

2 shall auction only allowances with a vintage year 

3 that is later than the year in which the auction is 

4 held. Beginning with the first auction and at each 

5 quarterly auction held thereafter, the Administrator 

6 may offer for sale allowances with vintage years of 

7 up to 4 years after the year in which the auction is 

8 being conducted, except as provided in section 

9 782(p). 

10 ‘‘(3) AUCTION FORMAT.—Auctions shall follow 

11 a single-round, sealed-bid, uniform price format. 

12 ‘‘(4) PARTICIPATION; FINANCIAL ASSURANCE.— 

13 Auctions shall be open to any person, except that 

14 the Administrator may establish financial assurance 

15 requirements to ensure that auction participants can 

16 and will perform on their bids. 

17 ‘‘(5) DISCLOSURE OF BENEFICIAL OWNER18 SHIP.—Each bidder in the auction shall be required 

19 to disclose the person or entity sponsoring or bene20 fitting from the bidder’s participation in the auction 

21 if such person or entity is, in whole or in part, other 

22 than the bidder. 

23 ‘‘(6) PURCHASE LIMITS.—No person may, di24 rectly or in concert with another participant, pur-
945 

•HR 2454 EH

1 chase more than 5 percent of the allowances offered 

2 for sale at any quarterly auction. 

3 ‘‘(7) PUBLICATION OF INFORMATION.—After 

4 the auction, the Administrator shall, in a timely 

5 fashion, publish the identities of winning bidders, 

6 the quantity of allowances obtained by each winning 

7 bidder, and the auction clearing price. 

8 ‘‘(8) OTHER REQUIREMENTS.—The Adminis9 trator may include in the regulations such other re10 quirements or provisions as the Administrator, in 

11 consultation with other agencies, as appropriate, 

12 considers appropriate to promote effective, efficient, 

13 transparent, and fair administration of auctions 

14 under this section. 

15 ‘‘(c) REVISION OF REGULATIONS.—The Adminis16 trator may, in consultation with other agencies, as appro17 priate, at any time, revise the initial regulations promul18 gated under subsection (b) by promulgating new regula19 tions. Such revised regulations need not meet the require20 ments identified in subsection (b) if the Administrator de21 termines that an alternative auction design would be more 

22 effective, taking into account factors including costs of ad23 ministration, transparency, fairness, and risks of collusion 

24 or manipulation. In determining whether and how to re25 vise the initial regulations under this subsection, the Ad-
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•HR 2454 EH

1 ministrator shall not consider maximization of revenues to 

2 the Federal Government. 

3 ‘‘(d) RESERVE AUCTION PRICE.—The minimum re4 serve auction price shall be $10 (in constant 2009 dollars) 

5 for auctions occurring in 2012. The minimum reserve 

6 price for auctions occurring in years after 2012 shall be 

7 the minimum reserve auction price for the previous year 

8 increased by 5 percent plus the rate of inflation (as meas9 ured by the Consumer Price Index for all urban con10 sumers). 

11 ‘‘(e) DELEGATION OR CONTRACT.—Pursuant to reg12 ulations under this section, the Administrator may by del13 egation or contract provide for the conduct of auctions 

14 under the Administrator’s supervision by other depart15 ments or agencies of the Federal Government or by non16 governmental agencies, groups, or organizations. 

17 ‘‘(f) SMALL BUSINESS REFINER RESERVE.—The Ad18 ministrator shall, in accordance with this subsection, issue 

19 regulations setting aside a specified number of allowances 

20 that small business refiners may purchase at the average 

21 auction price and may use to demonstrate compliance pur22 suant to section 722. These regulations shall provide the 

23 following: 

24 ‘‘(1) AMOUNT.—The Administrator shall place 

25 in the small business refiner reserve account allow-
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1 ances that are to be sold at auction pursuant to the 

2 allocations in section 782 in an amount equal to— 

3 ‘‘(A) 6.2 percent of the emission allow4 ances established under section 721(a) for each 

5 vintage year from 2012 through 2013; 

6 ‘‘(B) 5.4 percent of the emission allow7 ances established under section 721(a) for each 

8 vintage year from 2014 through 2015; and 

9 ‘‘(C) 4.9 percent of the emission allow10 ances established under section 721(a) for each 

11 vintage year from 2016 through 2024. 

12 ‘‘(2) ALLOWED PURCHASES.—From January 1 

13 of the calendar year that matches the vintage year 

14 for which allowances have been placed in the reserve, 

15 through January 14 of the following year, small 

16 business refiners (as defined in section 787(b)) may 

17 purchase allowances from this reserve at the price 

18 determined pursuant to paragraph (3). 

19 ‘‘(3) PRICE.—The price for allowances pur20 chased from this reserve shall be the average auction 

21 price for allowances of the same vintage year pur22 chased at auctions conducted pursuant to this sec23 tion during the 12 months preceding the purchase of 

24 the allowances. 
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1 ‘‘(4) USE OF ALLOWANCES.—Allowances pur2 chased from this reserve shall only be used by the 

3 purchaser to demonstrate compliance pursuant to 

4 section 722 for attributable greenhouse gas emis5 sions in the calendar year that matches the vintage 

6 year of the purchased allowance. Allowances pur7 chased from this reserve may not be banked, traded 

8 or borrowed. 

9 ‘‘(5) LIMITATIONS ON PURCHASE AMOUNT.— 

10 The Administrator, by regulation adopted after pub11 lic notice and an opportunity for comment, shall es12 tablish procedures to distribute the ability to pur13 chase allowances from the reserve fairly among all 

14 small business refiners interested in purchasing al15 lowances from this reserve so as to address the po16 tential that requests to purchase allowances exceed 

17 the number of allowances available in the reserve. 

18 This regulation may place limits on the number of 

19 allowances a small business refiner may purchase 

20 from the reserve. 

21 ‘‘(6) UNSOLD ALLOWANCES.—Vintage year al22 lowances not sold from the reserve on or before Jan23 uary 15 of the calendar year following the vintage 

24 year shall be sold at an auction conducted pursuant 

25 to this section no later than March 31 of the cal-
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•HR 2454 EH

1 endar year following the vintage year. If significantly 

2 more allowances are being placed in the reserve than 

3 are being purchased from the reserve several years 

4 in a row, the Administrator may adjust either the 

5 percent of allowances placed in the reserve or the 

6 date by which allowances may be purchased from the 

7 reserve. 

8 ‘‘SEC. 792. AUCTIONING ALLOWANCES FOR OTHER ENTI9 TIES. 

10 ‘‘(a) CONSIGNMENT.—Any entity holding emission al11 lowances or compensatory allowances may request that the 

12 Administrator auction, pursuant to section 791, the allow13 ances on consignment. 

14 ‘‘(b) PRICING.—When the Administrator acts under 

15 this section as the agent of an entity in possession of emis16 sion allowances or compensatory allowances, the Adminis17 trator is not obligated to obtain the highest price possible 

18 for the allowances, and instead shall auction consignment 

19 allowances in the same manner and pursuant to the same 

20 rules as auctions of other allowances under section 791. 

21 The Administrator may permit the entity offering the al22 lowance for sale to condition the sale of its allowances pur23 suant to this section on a minimum reserve price that is 

24 different than the reserve auction price set pursuant to 

25 section 791(d). 
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1 ‘‘(c) PROCEEDS.—For emission allowances and com2 pensatory allowances auctioned pursuant to this section, 

3 notwithstanding section 3302 of title 31, United States 

4 Code, or any other provision of law, within 90 days of re5 ceipt, the United States shall transfer the proceeds from 

6 the auction to the entity which held the allowances auc7 tioned. No funds transferred from a purchaser to a seller 

8 of emission allowances or compensatory allowances under 

9 this subsection shall be held by any officer or employee 

10 of the United States or treated for any purpose as public 

11 monies. 

12 ‘‘(d) UNSOLD ALLOWANCES.—Allowances offered for 

13 sale under this section that are not sold shall be returned 

14 to the entity in possession of the allowance, notwith15 standing section 726(b)(2)(A). 

16 ‘‘(e) REGULATIONS.—The Administrator shall issue 

17 regulations within 24 months after the date of enactment 

18 of this title to implement this section. 

19 ‘‘SEC. 793. ESTABLISHMENT OF FUNDS. 

20 ‘‘There is hereby established in the Treasury of the 

21 United States the following separate accounts: 

22 ‘‘(1) The Strategic Reserve Fund. 

23 ‘‘(2) The Climate Change Consumer Refund 

24 Account. 
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1 ‘‘(3) The Climate Change Worker Adjustment 

2 Assistance Fund. 

3 ‘‘SEC. 794. OVERSIGHT OF ALLOCATIONS. 

4 ‘‘(a) IN GENERAL.—Not later than January 1, 2014, 

5 and every 2 years thereafter, the Comptroller General of 

6 the United States shall carry out and report to Congress 

7 on the results of a review of programs administered by 

8 the Federal Government that distribute emission allow9 ances or funds from any Federal auction of allowances. 

10 ‘‘(b) CONTENTS.—Each such report shall include a 

11 comprehensive evaluation of the administration and effec12 tiveness of each program, including— 

13 ‘‘(1) the efficiency, transparency, and sound14 ness of the administration of each program; 

15 ‘‘(2) the performance of activities receiving as16 sistance under each program; 

17 ‘‘(3) the cost-effectiveness of each program in 

18 achieving the stated purposes of the program; and 

19 ‘‘(4) recommendations, if any, for legislative, 

20 regulatory, or administrative changes to each pro21 gram to improve its effectiveness. 

22 ‘‘(c) FOCUS.—In evaluating program performance, 

23 each review under this section review shall address the ef24 fectiveness of such programs in— 

25 ‘‘(1) creating and preserving jobs; 
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1 ‘‘(2) ensuring a manageable transition for 

2 working families and workers; 

3 ‘‘(3) reducing the emissions, or enhancing se4 questration, of greenhouse gases; 

5 ‘‘(4) developing clean technologies; and 

6 ‘‘(5) building resilience to the impacts of cli7 mate change. 

8 ‘‘SEC. 795. EXCHANGE FOR EARLY ACTION OFFSET CRED9 ITS. 

10 ‘‘(a) IN GENERAL.—Emission allowances allocated 

11 pursuant to section 782(t) shall be distributed by the Ad12 ministrator in accordance with this section. Not later than 

13 1 year after the date of enactment of this title, the Admin14 istrator shall issue regulations allowing— 

15 ‘‘(1) any person in the United States to ex16 change instruments in the nature of offset credits 

17 issued before January 1, 2009, by a State or vol18 untary offset program with respect to which the Ad19 ministrator has made an affirmative determination 

20 under section 740(a)(2), for emissions allowances es21 tablished by the Administrator under section 721(a); 

22 and 

23 ‘‘(2) the Administrator to provide compensation 

24 in the form of emission allowances to entities that 

25 do not meet the criteria of paragraph (1) and meet 
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1 the criteria of this paragraph for documented early 

2 reductions or avoidance of greenhouse gas emissions 

3 or greenhouse gases sequestered before January 1, 

4 2009, from projects begun before January 1, 2009, 

5 where— 

6 ‘‘(A) the entity publicly stated greenhouse 

7 gas reduction goals and publicly reported 

8 against those goals; 

9 ‘‘(B) the entity demonstrated entity-wide 

10 net greenhouse gas reductions; and 

11 ‘‘(C) the entity demonstrates the actual 

12 projects undertaken to make reductions and 

13 documents the reductions (e.g., through docu14 mentation of engineering projects). 

15 ‘‘(b) REGULATIONS.—Regulations issued under sub16 section (a) shall— 

17 ‘‘(1) provide that a person exchanging credits 

18 under subsection (a)(1) receive emission allowances 

19 established under section 721(a) in an amount for 

20 which the monetary value is equivalent to the aver21 age monetary value of the credits during the period 

22 from January 1, 2006, to January 1, 2009, as ad23 justed for inflation to reflect current dollar values at 

24 the time of the exchange; 
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1 ‘‘(2) provide that a person receiving compensa2 tion for documented early action under subsection 

3 (a)(2) shall receive emission allowances established 

4 under section 721(a) in an amount that is approxi5 mately equivalent in value to the carbon dioxide 

6 equivalent per ton value received by entities in ex7 change for credits under paragraph (1) (as adjusted 

8 for inflation to reflect current dollar values at the 

9 time of the exchange), as determined by the Admin10 istrator; 

11 ‘‘(3) provide that only reductions or avoidance 

12 of greenhouse gas emissions, or sequestration of 

13 greenhouse gases, achieved by activities in the 

14 United States between January 1, 2001, and Janu15 ary 1, 2009, may be compensated under this section, 

16 and only credits issued for such activities may be ex17 changed under this section; 

18 ‘‘(4) provide that only credits that have not 

19 been retired or otherwise used to meet a voluntary 

20 or mandatory commitment, and have not expired, 

21 may be exchanged under subsection (a)(1); 

22 ‘‘(5) require that, once exchanged, the credit be 

23 retired for purposes of use under the program by or 

24 for which it was originally issued; and 
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1 ‘‘(6) establish a deadline by which persons must 

2 exchange the credits or request compensation for 

3 early action under this section. 

4 ‘‘(c) PARTICIPATION.—Participation in an exchange 

5 of credits for allowances or compensation for early action 

6 authorized by this section shall not preclude any person 

7 from participation in an offset credit program established 

8 under the American Clean Energy and Security Act of 

9 2009. 

10 ‘‘(d) DISTRIBUTION.—Of the emission allowances 

11 distributed under this section, a quantity equal to 0.75 

12 percent of vintage year 2012 emission allowances estab13 lished under section 721(a) shall be distributed pursuant 

14 to subsection (a)(1), and a quantity equal to 0.25 percent 

15 of vintage year 2012 emission allowances established 

16 under section 721(a) shall be distributed pursuant to sub17 section (a)(2).’’. 

18 Subtitle C—Additional Greenhouse 

19 Gas Standards 

20 SEC. 331. GREENHOUSE GAS STANDARDS. 

21 The Clean Air Act (42 U.S.C. 7401 and following), 

22 as amended by subtitles A and B of this title, is further 

23 amended by adding the following new title after title VII: 
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1 ‘‘TITLE VIII—ADDITIONAL 

2 GREENHOUSE GAS STANDARDS 

3 ‘‘SEC. 801. DEFINITIONS. 

4 ‘‘For purposes of this title, terms that are defined 

5 in title VII, except for the term ‘stationary source’, shall 

6 have the meaning given those terms in title VII. 

7 ‘‘PART A—STATIONARY SOURCE STANDARDS 

8 ‘‘SEC. 811. STANDARDS OF PERFORMANCE. 

9 ‘‘(a) UNCAPPED STATIONARY SOURCES.— 

10 ‘‘(1) INVENTORY OF SOURCE CATEGORIES.—(A) 

11 Within 12 months after the date of enactment of 

12 this title, the Administrator shall publish under sec13 tion 111(b)(1)(A) an inventory of categories of sta14 tionary sources that consist of those categories that 

15 contain sources that individually had uncapped 

16 greenhouse gas emissions greater than 10,000 tons 

17 of carbon dioxide equivalent and that, in the aggre18 gate, were responsible for emitting at least 20 per19 cent annually of the uncapped greenhouse gas emis20 sions. 

21 ‘‘(B) The Administrator shall include in the in22 ventory under this paragraph each source category 

23 that is responsible for at least 10 percent of the un24 capped methane emissions in 2005. Notwithstanding 

25 any other provision, the inventory required by this 
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1 section shall not include sources of enteric fermenta2 tion. The list under this paragraph shall include in3 dustrial sources, the emissions from which, when 

4 added to the capped emissions from industrial 

5 sources, constitute at least 95 percent of the green6 house gas emissions of the industrial sector. 

7 ‘‘(C) For purposes of this subsection, emissions 

8 shall be calculated using tons of carbon dioxide 

9 equivalents. In promulgating the inventory required 

10 by this paragraph and the schedule required under 

11 by paragraph (2)(C), the Administrator shall use the 

12 most current emissions data available at the time of 

13 promulgation, except as provided in subparagraph 

14 (B). 

15 ‘‘(D) Notwithstanding any other provisions, the 

16 Administrator may list under 111(b) any source cat17 egory identified in the inventory required by this 

18 subsection without making a finding that the source 

19 category causes or contributes significantly to, air 

20 pollution with may be reasonably anticipated to en21 danger public health or welfare. 

22 ‘‘(2) STANDARDS AND SCHEDULE.—(A) For 

23 each category identified as provided in paragraph 

24 (1), the Administrator shall promulgate standards of 

25 performance under section 111 for the uncapped 
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1 emissions of greenhouse gases from stationary 

2 sources in that category and shall promulgate cor3 responding regulations under section 111(d). 

4 ‘‘(B) The Administrator shall promulgate 

5 standards as required by this subsection for sta6 tionary sources in categories identified as provided 

7 in paragraph (1) as expeditiously as practicable, as8 suring that— 

9 ‘‘(i) standards for identified source cat10 egories that, combined, emitted 80 percent or 

11 more of the greenhouse gas emissions of the 

12 identified source categories shall be promul13 gated not later than 3 years after the date of 

14 enactment of this title and shall include stand15 ards for natural gas extraction; and 

16 ‘‘(ii) for all other identified source cat17 egories— 

18 ‘‘(I) standards for not less than an 

19 additional 25 percent of the identified cat20 egories shall be promulgated not later than 

21 5 years after the date of enactment of this 

22 title; 

23 ‘‘(II) standards for not less than an 

24 additional 25 percent of the identified cat25 egories shall be promulgated not later than 
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1 7 years after the date of enactment of this 

2 title; and 

3 ‘‘(III) standards for all the identified 

4 categories shall be promulgated not later 

5 than 10 years after the date of enactment 

6 of this title. 

7 ‘‘(C) Not later than 24 months after the date 

8 of enactment of this title and after notice and oppor9 tunity for comment, the Administrator shall publish 

10 a schedule establishing a date for the promulgation 

11 of standards for each category of sources identified 

12 pursuant to paragraph (1). The date for each cat13 egory shall be consistent with the requirements of 

14 subparagraph (B). The determination of priorities 

15 for the promulgation of standards pursuant to this 

16 paragraph is not a rulemaking and shall not be sub17 ject to judicial review, except that failure to promul18 gate any standard pursuant to the schedule estab19 lished by this paragraph shall be subject to review 

20 under section 304(a)(2). 

21 ‘‘(D) Notwithstanding section 307, no action of 

22 the Administrator listing a source category under 

23 paragraph (1) shall be a final agency action subject 

24 to judicial review, except that any such action may 

25 be reviewed under section 307 when the Adminis-
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1 trator issues performance standards for such cat2 egory. 

3 ‘‘(b) CAPPED SOURCES.—No standard of perform4 ance shall be established under section 111 for capped 

5 greenhouse gas emissions from a capped source unless the 

6 Administrator determines that such standards are appro7 priate because of effects that do not include climate 

8 change effects. In promulgating a standard of perform9 ance under section 111 for the emission from capped 

10 sources of any air pollutant that is not a greenhouse gas, 

11 the Administrator shall treat the emission of any green12 house gas by those entities as a nonair quality public 

13 health and environmental impact within the meaning of 

14 section 111(a)(1). 

15 ‘‘(c) PERFORMANCE STANDARDS.—For purposes of 

16 setting a performance standard for source categories iden17 tified pursuant to subsection (a)— 

18 ‘‘(1) The Administrator shall take into account 

19 the goal of reducing total United States greenhouse 

20 gas emissions as set forth in section 702. 

21 ‘‘(2) The Administrator may promulgate a de22 sign, equipment, work practice, or operational stand23 ard, or any combination thereof, under section 111 

24 in lieu of a standard of performance under that sec25 tion without regard to any determination of feasi-
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1 bility that would otherwise be required under section 

2 111(h). 

3 ‘‘(3) Notwithstanding any other provision, in 

4 setting the level of each standard required by this 

5 section, the Administrator shall take into account 

6 projections of allowance prices, such that the mar7 ginal cost of compliance (expressed as dollars per 

8 ton of carbon dioxide equivalent reduced) imposed by 

9 the standard would not, in the judgement of the Ad10 ministrator, be expected to exceed the Administra11 tor’s projected allowance prices over the time period 

12 spanning from the date of initial compliance to the 

13 date that the next revisions of the standard would 

14 come into effect pursuant to the schedule under sec15 tion 111(b)(1)(B). 

16 ‘‘(d) DEFINITIONS.—In this section, the terms ‘un17 capped greenhouse gas emissions’ and ‘uncapped methane 

18 emissions’ mean those greenhouse gas or methane emis19 sions, respectively, to which section 722 would not have 

20 applied if the requirements of this title had been in effect 

21 for the same year as the emissions data upon which the 

22 list is based. 

23 ‘‘(e) STUDY OF THE EFFECTS OF PERFORMANCE

24 STANDARDS.— 
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1 ‘‘(1) STUDY.—The Administrator shall conduct 

2 a study of the impacts of performance standards re3 quired under this section, which shall evaluate the 

4 effect of such standards on the— 

5 ‘‘(A) costs of achieving compliance with the 

6 economy-wide reduction goals specified in sec7 tion 702 and the reduction targets specified in 

8 section 703; 

9 ‘‘(B) available supply of offset credits; and 

10 ‘‘(C) ability to achieve the economy-wide 

11 reduction goals specified in section 702 and any 

12 other benefits of such standards. 

13 ‘‘(2) REPORT.—The Administrator shall submit 

14 to the House Energy and Commerce Committee a 

15 report that describes the results of the study not 

16 later than 18 months after the publication of the 

17 standards required under subsection (a)(2)(B)(i). 

18 ‘‘PART C—EXEMPTIONS FROM OTHER PROGRAMS 

19 ‘‘SEC. 831. CRITERIA POLLUTANTS. 

20 ‘‘As of the date of the enactment of the Safe Climate 

21 Act, no greenhouse gas may be added to the list under 

22 section 108(a) on the basis of its effect on global climate 

23 change. 
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1 ‘‘SEC. 832. INTERNATIONAL AIR POLLUTION. 

2 ‘‘Section 115 shall not apply to an air pollutant with 

3 respect to that pollutant’s contribution to global warming. 

4 ‘‘SEC. 833. HAZARDOUS AIR POLLUTANTS. 

5 ‘‘No greenhouse gas may be added to the list of haz6 ardous air pollutants under section 112 unless such green7 house gas meets the listing criteria of section 112(b) inde8 pendent of its effects on global climate change. 

9 ‘‘SEC. 834. NEW SOURCE REVIEW. 

10 ‘‘The provisions of part C of title I shall not apply 

11 to a major emitting facility that is initially permitted or 

12 modified after January 1, 2009, on the basis of its emis13 sions of any greenhouse gas. 

14 ‘‘SEC. 835. TITLE V PERMITS. 

15 ‘‘Notwithstanding any provision of title III or V, no 

16 stationary source shall be required to apply for, or operate 

17 pursuant to, a permit under title V, solely because the 

18 source emits any greenhouse gases that are regulated sole19 ly because of their effect on global climate change.’’. 

20 SEC. 332. HFC REGULATION. 

21 (a) IN GENERAL.—Title VI of the Clean Air Act (42 

22 U.S.C. 7671 et seq.) (relating to stratospheric ozone pro23 tection) is amended by adding at the end the following: 

24 ‘‘SEC. 619. HYDROFLUOROCARBONS (HFCS). 

25 ‘‘(a) TREATMENT AS CLASS II, GROUP II SUB26 STANCES.—Except as otherwise provided in this section, 
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1 hydrofluorocarbons shall be treated as class II substances 

2 for purposes of applying the provisions of this title. The 

3 Administrator shall establish two groups of class II sub4 stances. Class II, group I substances shall include all 

5 hydrochlorofluorocarbons (HCFCs) listed pursuant to sec6 tion 602(b). Class II, group II substances shall include 

7 each of the following: 

8 ‘‘(1) Hydrofluorocarbon-23 (HFC–23). 

9 ‘‘(2) Hydrofluorocarbon-32 (HFC–32). 

10 ‘‘(3) Hydrofluorocarbon-41 (HFC–41). 

11 ‘‘(4) Hydrofluorocarbon-125 (HFC–125). 

12 ‘‘(5) Hydrofluorocarbon-134 (HFC–134). 

13 ‘‘(6) Hydrofluorocarbon-134a (HFC–134a). 

14 ‘‘(7) Hydrofluorocarbon-143 (HFC–143). 

15 ‘‘(8) Hydrofluorocarbon-143a (HFC–143a). 

16 ‘‘(9) Hydrofluorocarbon-152 (HFC–152). 

17 ‘‘(10) Hydrofluorocarbon-152a (HFC–152a). 

18 ‘‘(11) Hydrofluorocarbon-227ea (HFC–227ea). 

19 ‘‘(12) Hydrofluorocarbon-236cb (HFC–236cb). 

20 ‘‘(13) Hydrofluorocarbon-236ea (HFC–236ea). 

21 ‘‘(14) Hydrofluorocarbon-236fa (HFC–236fa). 

22 ‘‘(15) Hydrofluorocarbon-245ca (HFC–245ca). 

23 ‘‘(16) Hydrofluorocarbon-245fa (HFC–245fa). 

24 ‘‘(17) Hydrofluorocarbon-365mfc (HFC– 

25 365mfc). 
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1 ‘‘(18) Hydrofluorocarbon-43-10mee (HFC–43– 

2 10mee). 

3 ‘‘(19) Hydrofluoroolefin-1234yf (HFO–1234yf). 

4 ‘‘(20) Hydrofluoroolefin-1234ze (HFO–1234ze). 

5 Not later than 6 months after the date of enactment of 

6 this title, the Administrator shall publish an initial list of 

7 class II, group II substances, which shall include the sub8 stances listed in this subsection. The Administrator may 

9 add to the list of class II, group II substances any other 

10 substance used as a substitute for a class I or II substance 

11 if the Administrator determines that 1 metric ton of the 

12 substance makes the same or greater contribution to glob13 al warming over 100 years as 1 metric ton of carbon diox14 ide. Within 24 months after the date of enactment of this 

15 section, the Administrator shall amend the regulations 

16 under this title (including the regulations referred to in 

17 sections 603, 608, 609, 610, 611, 612, and 613) to apply 

18 to class II, group II substances. 

19 ‘‘(b) CONSUMPTION AND PRODUCTION OF CLASS II, 

20 GROUP II SUBSTANCES.— 

21 ‘‘(1) IN GENERAL.— 

22 ‘‘(A) CONSUMPTION PHASE DOWN.—In the 

23 case of class II, group II substances, in lieu of 

24 applying section 605 and the regulations there25 under, the Administrator shall promulgate reg-
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1 ulations phasing down the consumption of class 

2 II, group II substances in the United States, 

3 and the importation of products containing any 

4 class II, group II substance, in accordance with 

5 this subsection within 18 months after the date 

6 of enactment of this section. Effective January 

7 1, 2012, it shall be unlawful for any person to 

8 produce any class II, group II substance, im9 port any class II, group II substance, or import 

10 any product containing any class II, group II 

11 substance without holding one consumption al12 lowance or one destruction offset credit for each 

13 carbon dioxide equivalent ton of the class II, 

14 group II substance. Any person who exports a 

15 class II, group II substance for which a con16 sumption allowance was retired may receive a 

17 refund of that allowance from the Adminis18 trator following the export. 

19 ‘‘(B) PRODUCTION.—If the United States 

20 becomes a party or otherwise adheres to a mul21 tilateral agreement, including any amendment 

22 to the Montreal Protocol on Substances That 

23 Deplete the Ozone Layer, that restricts the pro24 duction of class II, group II substances, the Ad25 ministrator shall promulgate regulations estab-
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1 lishing a baseline for the production of class II, 

2 group II substances in the United States and 

3 phasing down the production of class II, group 

4 II substances in the United States, in accord5 ance with such multilateral agreement and sub6 ject to the same exceptions and other provisions 

7 as are applicable to the phase down of con8 sumption of class II, group II substances under 

9 this section (except that the Administrator shall 

10 not require a person who obtains production al11 lowances from the Administrator to make pay12 ment for such allowances if the person is mak13 ing payment for a corresponding quantity of 

14 consumption allowances of the same vintage 

15 year). Upon the effective date of such regula16 tions, it shall be unlawful for any person to 

17 produce any class II, group II substance with18 out holding one consumption allowance and one 

19 production allowance, or one destruction offset 

20 credit, for each carbon dioxide equivalent ton of 

21 the class II, group II substance. 

22 ‘‘(C) INTEGRITY OF CAP.—To maintain 

23 the integrity of the class II, group II cap, the 

24 Administrator may, through rulemaking, limit 

25 the percentage of each person’s compliance obli-
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1 gation that may be met through the use of de2 struction offset credits or banked allowances. 

3 ‘‘(D) COUNTING OF VIOLATIONS.—Each 

4 consumption allowance, production allowance, 

5 or destruction offset credit not held as required 

6 by this section shall be a separate violation of 

7 this section. 

8 ‘‘(2) SCHEDULE.—Pursuant to the regulations 

9 promulgated pursuant to paragraph (1)(A), the 

10 number of class II, group II consumption allowances 

11 established by the Administrator for each calendar 

12 year beginning in 2012 shall be the following per13 centage of the baseline, as established by the Admin14 istrator 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 
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‘‘Calendar Year Percent of Baseline 

2023 54 

2024 50 

2025 46 

2026 42 

2027 38 

2028 34 

2029 30 

2030 25 

2031 21 

2032 17 

after 2032 15 

1 ‘‘(3) BASELINE.—(A) Within 12 months after 

2 the date of enactment of this section, the Adminis3 trator shall promulgate regulations to establish the 

4 baseline for purposes of paragraph (2). The baseline 

5 shall be the sum, expressed in metric tons of carbon 

6 dioxide equivalents, of— 

7 ‘‘(i) the annual average consumption of all 

8 class II substances in calendar years 2004, 

9 2005, and 2006; plus 

10 ‘‘(ii) the annual average quantity of all 

11 class II substances contained in imported prod12 ucts in calendar years 2004, 2005, and 2006. 

13 ‘‘(B) Notwithstanding subparagraph (A), if the 

14 Administrator determines that the baseline is higher 
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1 than 370 million metric tons of carbon dioxide 

2 equivalents, then the Administrator shall establish 

3 the baseline at 370 million metric tons of carbon di4 oxide equivalents. 

5 ‘‘(C) Notwithstanding subparagraph (A), if the 

6 Administrator determines that the baseline is lower 

7 than 280 million metric tons of carbon dioxide 

8 equivalents, then the Administrator shall establish 

9 the baseline at 280 million metric tons of carbon di10 oxide equivalents. 

11 ‘‘(4) DISTRIBUTION OF ALLOWANCES.— 

12 ‘‘(A) IN GENERAL.—Pursuant to the regu13 lations promulgated under paragraph (1)(A), 

14 for each calendar year beginning in 2012, the 

15 Administrator shall sell consumption allowances 

16 in accordance with this paragraph. 

17 ‘‘(B) ESTABLISHMENT OF POOLS.—The 

18 Administrator shall establish two allowance 

19 pools. Eighty percent of the consumption allow20 ances available for a calendar year shall be 

21 placed in the producer-importer pool, and 20 

22 percent of the consumption allowances available 

23 for a calendar year shall be placed in the sec24 ondary pool. 

25 ‘‘(C) PRODUCER-IMPORTER POOL.— 
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1 ‘‘(i) AUCTION.—(I) For each calendar 

2 year, the Administrator shall offer for sale 

3 at auction the following percentage of the 

4 consumption allowances in the producer5 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 

6 ‘‘(II) Any person who produced or im7 ported any class II substance during cal8 endar year 2004, 2005, or 2006 may par9 ticipate in the auction. No other persons 

10 may participate in the auction unless per11 mitted to do so pursuant to subclause 

12 (III). 

13 ‘‘(III) Not later than 3 years after the 

14 date of the initial auction and from time to 

15 time thereafter, the Administrator shall de16 termine through rulemaking whether any 
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1 persons who did not produce or import a 

2 class II substance during calendar year 

3 2004, 2005, or 2006 will be permitted to 

4 participate in future auctions. The Admin5 istrator shall base this determination on 

6 the duration, consistency, and scale of such 

7 person’s purchases of consumption allow8 ances in the secondary pool under subpara9 graph (D)(ii)(III), as well as economic or 

10 technical hardship and other factors 

11 deemed relevant by the Administrator. 

12 ‘‘(IV) The Administrator shall set a 

13 minimum bid per consumption allowance of 

14 the following: 

15 ‘‘(aa) For vintage year 2012, 

16 $1.00. 

17 ‘‘(bb) For vintage year 2013, 

18 $1.20. 

19 ‘‘(cc) For vintage year 2014, 

20 $1.40. 

21 ‘‘(dd) For vintage year 2015, 

22 $1.60. 

23 ‘‘(ee) For vintage year 2016, 

24 $1.80. 
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1 ‘‘(ff) For vintage year 2017, 

2 $2.00. 

3 ‘‘(gg) For vintage year 2018 and 

4 thereafter, $2.00 adjusted for infla5 tion after vintage year 2017 based 

6 upon the producer price index as pub7 lished by the Department of Com8 merce. 

9 ‘‘(ii) NON-AUCTION SALE.—(I) For 

10 each calendar year, as soon as practicable 

11 after auction, the Administrator shall offer 

12 for sale the remaining consumption allow13 ances in the producer-importer pool at the 

14 following prices: 

15 ‘‘(aa) A fee of $1.00 per vintage 

16 year 2012 allowance. 

17 ‘‘(bb) A fee of $1.20 per vintage 

18 year 2013 allowance. 

19 ‘‘(cc) A fee of $1.40 per vintage 

20 year 2014 allowance. 

21 ‘‘(dd) For each vintage year 

22 2015 allowance, a fee equal to the av23 erage of $1.10 and the auction clear24 ing price for vintage year 2014 allow25 ances. 
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1 ‘‘(ee) For each vintage year 2016 

2 allowance, a fee equal to the average 

3 of $1.30 and the auction clearing 

4 price for vintage year 2015 allow5 ances. 

6 ‘‘(ff) For each vintage year 2017 

7 allowance, a fee equal to the average 

8 of $1.40 and the auction clearing 

9 price for vintage year 2016 allow10 ances. 

11 ‘‘(gg) For each allowance of vin12 tage year 2018 and subsequent vin13 tage years, a fee equal to the auction 

14 clearing price for that vintage year. 

15 ‘‘(II) The Administrator shall offer to 

16 sell the remaining consumption allowances 

17 in the producer-importer pool to producers 

18 of class II, group II substances and im19 porters of class II, group II substances in 

20 proportion to their relative allocation 

21 share. 

22 ‘‘(III) Such allocation share for such 

23 sale shall be determined by the Adminis24 trator using such producer’s or importer’s 

25 annual average data on class II substances 
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1 from calendar years 2004, 2005, and 

2 2006, on a carbon dioxide equivalent basis, 

3 and— 

4 ‘‘(aa) shall be based on a pro5 ducer’s production, plus importation, 

6 plus acquisitions and purchases from 

7 persons who produced class II sub8 stances in the United States during 

9 calendar year 2004, 2005, or 2006, 

10 less exportation, less transfers and 

11 sales to persons who produced class II 

12 substances in the United States dur13 ing calendar year 2004, 2005, or 

14 2006; and 

15 ‘‘(bb) for an importer of class II 

16 substances that did not produce in the 

17 United States any class II substance 

18 during calendar years 2004, 2005, 

19 and 2006, shall be based on the im20 porter’s importation less exportation. 

21 For purposes of item (aa), the Adminis22 trator shall account for 100 percent of 

23 class II, group II substances and 60 per24 cent of class II, group I substances. For 

25 purposes of item (bb), the Administrator 
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1 shall account for 100 percent of class II, 

2 group II substances and 100 percent of 

3 class II, group I substances. 

4 ‘‘(IV) Any consumption allowances 

5 made available for nonauction sale to a 

6 specific producer or importer of class II, 

7 group II substances but not purchased by 

8 the specific producer or importer shall be 

9 made available for sale to any producer or 

10 importer of class II substances during cal11 endar year 2004, 2005, or 2006. If de12 mand for such consumption allowances ex13 ceeds supply of such consumption allow14 ances, the Administrator shall develop and 

15 utilize criteria for the sale of such con16 sumption allowances that may include pro 

17 rata shares, historic production and impor18 tation, economic or technical hardship, or 

19 other factors deemed relevant by the Ad20 ministrator. If the supply of such con21 sumption allowances exceeds demand, the 

22 Administrator may offer such consumption 

23 allowances for sale in the secondary pool as 

24 set forth in subparagraph (D). 
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1 ‘‘(D) SECONDARY POOL.—(i) For each cal2 endar year, as soon as practicable after the auc3 tion required in subparagraph (C), the Adminis4 trator shall offer for sale the consumption al5 lowances in the secondary pool at the prices 

6 listed in subparagraph (C)(ii). 

7 ‘‘(ii) The Administrator shall accept appli8 cations for purchase of secondary pool con9 sumption allowances from— 

10 ‘‘(I) importers of products containing 

11 class II, group II substances; 

12 ‘‘(II) persons who purchased any class 

13 II, group II substance directly from a pro14 ducer or importer of class II, group II sub15 stances for use in a product containing a 

16 class II, group II substance, a manufac17 turing process, or a reclamation process; 

18 ‘‘(III) persons who did not produce or 

19 import a class II substance during cal20 endar year 2004, 2005, or 2006, but who 

21 the Administrator determines have subse22 quently taken significant steps to produce 

23 or import a substantial quantity of any 

24 class II, group II substance; and 
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1 ‘‘(IV) persons who produced or im2 ported any class II substance during cal3 endar year 2004, 2005, or 2006. 

4 ‘‘(iii) If the supply of consumption allow5 ances in the secondary pool equals or exceeds 

6 the demand for consumption allowances in the 

7 secondary pool as presented in the applications 

8 for purchase, the Administrator shall sell the 

9 consumption allowances in the secondary pool 

10 to the applicants in the amounts requested in 

11 the applications for purchase. Any consumption 

12 allowances in the secondary pool not purchased 

13 in a calendar year may be rolled over and added 

14 to the quantity available in the secondary pool 

15 in the following year. 

16 ‘‘(iv) If the demand for consumption allow17 ances in the secondary pool as presented in the 

18 applications for purchase exceeds the supply of 

19 consumption allowances in the secondary pool, 

20 the Administrator shall sell the consumption al21 lowances as follows: 

22 ‘‘(I) The Administrator shall first sell 

23 the consumption allowances in the sec24 ondary pool to any importers of products 

25 containing class II, group II substances in 
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1 the amounts requested in their applications 

2 for purchase. If the demand for such con3 sumption allowances exceeds supply of 

4 such consumption allowances, the Adminis5 trator shall develop and utilize criteria for 

6 the sale of such consumption allowances 

7 among importers of products containing 

8 class II, group II substances that may in9 clude pro rata shares, historic importation, 

10 economic or technical hardship, or other 

11 factors deemed relevant by the Adminis12 trator. 

13 ‘‘(II) The Administrator shall next 

14 sell any remaining consumption allowances 

15 to persons identified in subclauses (II) and 

16 (III) of clause (ii) in the amounts re17 quested in their applications for purchase. 

18 If the demand for such consumption allow19 ances exceeds remaining supply of such 

20 consumption allowances, the Administrator 

21 shall develop and utilize criteria for the 

22 sale of such consumption allowances 

23 among subclauses (II) and (III) applicants 

24 that may include pro rata shares, historic 

25 use, economic or technical hardship, or 
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1 other factors deemed relevant by the Ad2 ministrator. 

3 ‘‘(III) The Administrator shall then 

4 sell any remaining consumption allowances 

5 to persons who produced or imported any 

6 class II substance during calendar year 

7 2004, 2005, or 2006 in the amounts re8 quested in their applications for purchase. 

9 If demand for such consumption allow10 ances exceeds remaining supply of such 

11 consumption allowances, the Administrator 

12 shall develop and utilize criteria for the 

13 sale of such consumption allowances that 

14 may include pro rata shares, historic pro15 duction and importation, economic or tech16 nical hardship, or other factors deemed rel17 evant by the Administrator. 

18 ‘‘(IV) Each person who purchases 

19 consumption allowances in a non-auction 

20 sale under this subparagraph shall be re21 quired to disclose the person or entity 

22 sponsoring or benefitting from the pur23 chases if such person or entity is, in whole 

24 or in part, other than the purchaser or the 

25 purchaser’s employer. 
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1 ‘‘(E) DISCRETION TO WITHHOLD ALLOW2 ANCES.—Nothing in this paragraph prevents 

3 the Administrator from exercising discretion to 

4 withhold and retire consumption allowances 

5 that would otherwise be available for auction or 

6 nonauction sale. Not later than 18 months after 

7 the date of enactment of this section, the Ad8 ministrator shall promulgate regulations estab9 lishing criteria for withholding and retiring con10 sumption allowances. 

11 ‘‘(5) BANKING.—A consumption allowance or 

12 destruction offset credit may be used to meet the 

13 compliance obligation requirements of paragraph (1) 

14 in— 

15 ‘‘(A) the vintage year for the allowance or 

16 destruction offset credit; or 

17 ‘‘(B) any calendar year subsequent to the 

18 vintage year for the allowance or destruction 

19 offset credit. 

20 ‘‘(6) AUCTIONS.— 

21 ‘‘(A) INITIAL REGULATIONS.—Not later 

22 than 18 months after the date of enactment of 

23 this section, the Administrator shall promulgate 

24 regulations governing the auction of allowances 
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1 under this section. Such regulations shall in2 clude the following requirements: 

3 ‘‘(i) FREQUENCY; FIRST AUCTION.— 

4 Auctions shall be held one time per year at 

5 regular intervals, with the first auction to 

6 be held no later than October 31, 2011. 

7 ‘‘(ii) AUCTION FORMAT.—Auctions 

8 shall follow a single-round, sealed-bid, uni9 form price format. 

10 ‘‘(iii) FINANCIAL ASSURANCE.—The 

11 Administrator may establish financial as12 surance requirements to ensure that auc13 tion participants can and will perform on 

14 their bids. 

15 ‘‘(iv) DISCLOSURE OF BENEFICIAL

16 OWNERSHIP.—Each bidder in the auction 

17 shall be required to disclose the person or 

18 entity sponsoring or benefitting from the 

19 bidder’s participation in the auction if such 

20 person or entity is, in whole or in part, 

21 other than the bidder. 

22 ‘‘(v) PUBLICATION OF INFORMA23 TION.—After the auction, the Adminis24 trator shall, in a timely fashion, publish 

25 the number of bidders, number of winning 
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1 bidders, the quantity of allowances sold, 

2 and the auction clearing price. 

3 ‘‘(vi) BIDDING LIMITS IN 2012.—In 

4 the vintage year 2012 auction, no auction 

5 participant may, directly or in concert with 

6 another participant, bid for or purchase 

7 more allowances offered for sale at the 

8 auction than the greater of— 

9 ‘‘(I) the number of allowances 

10 which, when added to the number of 

11 allowances available for purchase by 

12 the participant in the producer-im13 porter pool non-auction sale, would 

14 equal the participant’s annual average 

15 consumption of class II, group II sub16 stances in calendar years 2004, 2005, 

17 and 2006; or 

18 ‘‘(II) the number of allowances 

19 equal to the product of— 

20 ‘‘(aa) 1.20 multiplied by the 

21 participant’s allocation share of 

22 the producer-importer pool non23 auction sale as determined under 

24 paragraph (4)(C)(ii); and 
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1 ‘‘(bb) the number of vintage 

2 year 2012 allowances offered at 

3 auction. 

4 ‘‘(vii) BIDDING LIMITS IN 2013.—In 

5 the vintage year 2013 auction, no auction 

6 participant may, directly or in concert with 

7 another participant, bid for or purchase 

8 more allowances offered for sale at the 

9 auction than the product of— 

10 ‘‘(I) 1.15 multiplied by the ratio 

11 of the total number of vintage year 

12 2012 allowances purchased by the 

13 participant from the auction and from 

14 the producer-importer pool non-auc15 tion sale to the total number of vin16 tage year 2012 allowances in the pro17 ducer-importer pool; and 

18 ‘‘(II) the number of vintage year 

19 2013 allowances offered at auction. 

20 ‘‘(viii) BIDDING LIMITS IN SUBSE21 QUENT YEARS.—In the auctions for vin22 tage year 2014 and subsequent vintage 

23 years, no auction participant may, directly 

24 or in concert with another participant, bid 

25 for or purchase more allowances offered 
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1 for sale at the auction than the product 

2 of— 

3 ‘‘(I) 1.15 multiplied by the ratio 

4 of the highest number of allowances 

5 required to be held by the participant 

6 in any of the three prior vintage years 

7 to meet its compliance obligation 

8 under paragraph (1) to the total num9 ber of allowances in the producer-im10 porter pool for such vintage year; and 

11 ‘‘(II) the number of allowances 

12 offered at auction for that vintage 

13 year. 

14 ‘‘(ix) OTHER REQUIREMENTS.—The 

15 Administrator may include in the regula16 tions such other requirements or provisions 

17 as the Administrator considers necessary 

18 to promote effective, efficient, transparent, 

19 and fair administration of auctions under 

20 this section. 

21 ‘‘(B) REVISION OF REGULATIONS.—The 

22 Administrator may, at any time, revise the ini23 tial regulations promulgated under subpara24 graph (A) based on the Administrator’s experi25 ence in administering allowance auctions by 
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1 promulgating new regulations. Such revised reg2 ulations need not meet the requirements identi3 fied in subparagraph (A) if the Administrator 

4 determines that an alternative auction design 

5 would be more effective, taking into account 

6 factors including costs of administration, trans7 parency, fairness, and risks of collusion or ma8 nipulation. In determining whether and how to 

9 revise the initial regulations under this para10 graph, the Administrator shall not consider 

11 maximization of revenues to the Federal Gov12 ernment. 

13 ‘‘(C) DELEGATION OR CONTRACT.—Pursu14 ant to regulations under this section, the Ad15 ministrator may, by delegation or contract, pro16 vide for the conduct of auctions under the Ad17 ministrator’s supervision by other departments 

18 or agencies of the Federal Government or by 

19 nongovernmental agencies, groups, or organiza20 tions. 

21 ‘‘(7) PAYMENTS FOR ALLOWANCES.— 

22 ‘‘(A) INITIAL REGULATIONS.—Not later 

23 than 18 months after the date of enactment of 

24 this section, the Administrator shall promulgate 

25 regulations governing the payment for allow-
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1 ances purchased in auction and non-auction 

2 sales under this section. Such regulations shall 

3 include the requirement that, in the event that 

4 full payment for purchased allowances is not 

5 made on the date of purchase, equal payments 

6 shall be made one time per calendar quarter 

7 with all payments for allowances of a vintage 

8 year made by the end of that vintage year. 

9 ‘‘(B) REVISION OF REGULATIONS.— The 

10 Administrator may, at any time, revise the ini11 tial regulations promulgated under subpara12 graph (A) based on the Administrator’s experi13 ence in administering collection of payments by 

14 promulgating new regulations. Such revised reg15 ulations need not meet the requirements identi16 fied in subparagraph (A) if the Administrator 

17 determines that an alternative payment struc18 ture or frequency would be more effective, tak19 ing into account factors including cost of ad20 ministration, transparency, and fairness. In de21 termining whether and how to revise the initial 

22 regulations under this paragraph, the Adminis23 trator shall not consider maximization of reve24 nues to the Federal Government. 
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1 ‘‘(C) PENALTIES FOR NON-PAYMENT.— 

2 Failure to pay for purchased allowances in ac3 cordance with the regulations promulgated pur4 suant to this paragraph shall be a violation of 

5 the requirements of subsection (b). Section 

6 113(c)(3) shall apply in the case of any person 

7 who knowingly fails to pay for purchased allow8 ances in accordance with the regulations pro9 mulgated pursuant to this paragraph. 

10 ‘‘(8) IMPORTED PRODUCTS.—If the United 

11 States becomes a party or otherwise adheres to a 

12 multilateral agreement, including any amendment to 

13 the Montreal Protocol on Substances That Deplete 

14 the Ozone Layer, which restricts the production or 

15 consumption of class II, group II substances— 

16 ‘‘(A) as of the date on which such agree17 ment or amendment enters into force, it shall 

18 no longer be unlawful for any person to import 

19 from a party to such agreement or amendment 

20 any product containing any class II, group II 

21 substance whose production or consumption is 

22 regulated by such agreement or amendment 

23 without holding one consumption allowance or 

24 one destruction offset credit for each carbon di-
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1 oxide equivalent ton of the class II, group II 

2 substance; 

3 ‘‘(B) the Administrator shall promulgate 

4 regulations within 12 months of the date the 

5 United States becomes a party or otherwise ad6 heres to such agreement or amendment, or the 

7 date on which such agreement or amendment 

8 enters into force, whichever is later, to establish 

9 a new baseline for purposes of paragraph (2), 

10 which new baseline shall be the original baseline 

11 less the carbon dioxide equivalent of the annual 

12 average quantity of any class II substances reg13 ulated by such agreement or amendment con14 tained in products imported from parties to 

15 such agreement or amendment in calendar 

16 years 2004, 2005, and 2006; 

17 ‘‘(C) as of the date on which such agree18 ment or amendment enters into force, no per19 son importing any product containing any class 

20 II, group II substance may, directly or in con21 cert with another person, purchase any con22 sumption allowances for sale by the Adminis23 trator for the importation of products from a 

24 party to such agreement or amendment that 
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1 contain any class II, group II substance re2 stricted by such agreement or amendment; and 

3 ‘‘(D) the Administrator may adjust the 

4 two allowance pools established in paragraph 

5 (4) such that up to 90 percent of the consump6 tion allowances available for a calendar year are 

7 placed in the producer-importer pool with the 

8 remaining consumption allowances placed in the 

9 secondary pool. 

10 ‘‘(9) OFFSETS.— 

11 ‘‘(A) CHLOROFLUOROCARBON DESTRUC12 TION.—Within 18 months after the date of en13 actment of this section, the Administrator shall 

14 promulgate regulations to provide for the 

15 issuance of offset credits for the destruction, in 

16 the calendar year 2012 or later, of 

17 chlorofluorocarbons in the United States. The 

18 Administrator shall establish and distribute to 

19 the destroying entity a quantity of destruction 

20 offset credits equal to 0.8 times the number of 

21 metric tons of carbon dioxide equivalents of re22 duction achieved through the destruction. No 

23 destruction offset credits shall be established 

24 for the destruction of a class II, group II sub25 stance. 
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1 ‘‘(B) DEFINITION.—For purposes of this 

2 paragraph, the term ‘destruction’ means the 

3 conversion of a substance by thermal, chemical, 

4 or other means to another substance with little 

5 or no carbon dioxide equivalent value and no 

6 ozone depletion potential. 

7 ‘‘(C) REGULATIONS.—The regulations pro8 mulgated under this paragraph shall include 

9 standards and protocols for project eligibility, 

10 certification of destroyers, monitoring, tracking, 

11 destruction efficiency, quantification of project 

12 and baseline emissions and carbon dioxide 

13 equivalent value, and verification. The Adminis14 trator shall ensure that destruction offset cred15 its represent real and verifiable destruction of 

16 chlorofluorocarbons or other class I or class II, 

17 group I, substances authorized under subpara18 graph (D). 

19 ‘‘(D) OTHER SUBSTANCES.—The Adminis20 trator may promulgate regulations to add to the 

21 list of class I and class II, group I, substances 

22 that may be destroyed for destruction offset 

23 credits, taking into account a candidate sub24 stance’s carbon dioxide equivalent value, ozone 

25 depletion potential, prevalence in banks in the 
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1 United States, and emission rates, as well as 

2 the need for additional cost containment under 

3 the class II, group II cap and the integrity of 

4 the class II, group II cap. The Administrator 

5 shall not add a class I or class II, group I sub6 stance to the list if the consumption of the sub7 stance has not been completely phased-out 

8 internationally (except for essential use exemp9 tions or other similar exemptions) pursuant to 

10 the Montreal Protocol. 

11 ‘‘(E) EXTENSION OF OFFSETS.—(i) At any 

12 time after the Administrator promulgates regu13 lations pursuant to subparagraph (A), the Ad14 ministrator may, pursuant to the requirements 

15 of part D of title VII and based on the carbon 

16 dioxide equivalent value of the substance de17 stroyed, add the types of destruction projects 

18 authorized to receive destruction offset credits 

19 under this paragraph to the list of types of 

20 projects eligible for offset credits under section 

21 733. If such projects are added to the list under 

22 section 733, the issuance of offset credits for 

23 such projects under part D of title VII shall be 

24 governed by the requirements of such part D, 

25 while the issuance of offset credits for such 
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1 projects under this paragraph shall be governed 

2 by the requirements of this paragraph. Nothing 

3 in this paragraph shall affect the issuance of 

4 offset credits under section 740. 

5 ‘‘(ii) The Administrator shall not make the 

6 addition under clause (i) unless the Adminis7 trator finds that insufficient destruction is oc8 curring or is projected to occur under this para9 graph and that the addition would increase de10 struction. 

11 ‘‘(iii) In no event shall more than one de12 struction offset credit be issued under title VII 

13 and this section for the destruction of the same 

14 quantity of a substance. 

15 ‘‘(10) LEGAL STATUS OF ALLOWANCES AND

16 CREDITS.—None of the following constitutes a prop17 erty right: 

18 ‘‘(A) A production or consumption allow19 ance. 

20 ‘‘(B) A destruction offset credit. 

21 ‘‘(c) DEADLINES FOR COMPLIANCE.—Notwith22 standing the deadlines specified for class II substances in 

23 sections 608, 609, 610, 612, and 613 that occur prior to 

24 January 1, 2009, the deadline for promulgating regula-
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1 tions under those sections for class II, group II substances 

2 shall be January 1, 2012. 

3 ‘‘(d) EXCEPTIONS FOR ESSENTIAL USES.—Notwith4 standing any phase down of production and consumption 

5 required by this section, to the extent consistent with any 

6 applicable multilateral agreement to which the United 

7 States is a party or otherwise adheres, the Administrator 

8 may provide the following exceptions for essential uses: 

9 ‘‘(1) MEDICAL DEVICES.—The Administrator, 

10 after notice and opportunity for public comment, 

11 and in consultation with the Commissioner of the 

12 Food and Drug Administration, may provide an ex13 ception for the production and consumption of class 

14 II, group II substances solely for use in medical de15 vices. 

16 ‘‘(2) AVIATION AND SPACE VEHICLE SAFETY.— 

17 The Administrator, after notice and opportunity for 

18 public comment, may authorize the production and 

19 consumption of limited quantities of class II, group 

20 II substances solely for the purposes of aviation or 

21 space vehicle safety if either the Administrator of 

22 the Federal Aviation Administration or the Adminis23 trator of the National Aeronautics and Space Ad24 ministration, in consultation with the Administrator, 

25 determines that no safe and effective substitute has 
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1 been developed and that such authorization is nec2 essary for aviation or space flight safety purposes. 

3 ‘‘(e) DEVELOPING COUNTRIES.—Notwithstanding 

4 any phase down of production required by this section, the 

5 Administrator, after notice and opportunity for public 

6 comment, may authorize the production of limited quan7 tities of class II, group II substances in excess of the 

8 amounts otherwise allowable under this section solely for 

9 export to, and use in, developing countries. Any produc10 tion authorized under this subsection shall be solely for 

11 purposes of satisfying the basic domestic needs of such 

12 countries as provided in applicable international agree13 ments, if any, to which the United States is a party or 

14 otherwise adheres. 

15 ‘‘(f) NATIONAL SECURITY; FIRE SUPPRESSION, 

16 ETC.—The provisions of subsection (f) and paragraphs (1) 

17 and (2) of subsection (g) of section 604 shall apply to any 

18 consumption and production phase down of class II, group 

19 II substances in the same manner and to the same extent, 

20 consistent with any applicable international agreement to 

21 which the United States is a party or otherwise adheres, 

22 as such provisions apply to the substances specified in 

23 such subsection. 

24 ‘‘(g) ACCELERATED SCHEDULE.—In lieu of section 

25 606, the provisions of paragraphs (1), (2), and (3) of this 
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1 subsection shall apply in the case of class II, group II sub2 stances. 

3 ‘‘(1) IN GENERAL.—The Administrator shall 

4 promulgate initial regulations not later than 18 

5 months after the date of enactment of this section, 

6 and revised regulations any time thereafter, which 

7 establish a schedule for phasing down the consump8 tion (and, if the condition in subsection (b)(1)(B) is 

9 met, the production) of class II, group II substances 

10 that is more stringent than the schedule set forth in 

11 this section if, based on the availability of sub12 stitutes, the Administrator determines that such 

13 more stringent schedule is practicable, taking into 

14 account technological achievability, safety, and other 

15 factors the Administrator deems relevant, or if the 

16 Montreal Protocol, or any applicable international 

17 agreement to which the United States is a party or 

18 otherwise adheres, is modified or established to in19 clude a schedule or other requirements to control or 

20 reduce production, consumption, or use of any class 

21 II, group II substance more rapidly than the appli22 cable schedule under this section. 

23 ‘‘(2) PETITION.—Any person may submit a pe24 tition to promulgate regulations under this sub-
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1 section in the same manner and subject to the same 

2 procedures as are provided in section 606(b). 

3 ‘‘(3) INCONSISTENCY.—If the Administrator de4 termines that the provisions of this section regarding 

5 banking, allowance rollover, or destruction offset 

6 credits create a significant potential for inconsist7 ency with the requirements of any applicable inter8 national agreement to which the United States is a 

9 party or otherwise adheres, the Administrator may 

10 promulgate regulations restricting the availability of 

11 banking, allowance rollover, or destruction offset 

12 credits to the extent necessary to avoid such incon13 sistency. 

14 ‘‘(h) EXCHANGE.—Section 607 shall not apply in the 

15 case of class II, group II substances. Production and con16 sumption allowances for class II, group II substances may 

17 be freely exchanged or sold but may not be converted into 

18 allowances for class II, group I substances. 

19 ‘‘(i) LABELING.—(1) In applying section 611 to prod20 ucts containing or manufactured with class II, group II 

21 substances, in lieu of the words ‘destroying ozone in the 

22 upper atmosphere’ on labels required under section 611 

23 there shall be substituted the words ‘contributing to global 

24 warming’. 
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1 ‘‘(2) The Administrator may, through rulemaking, 

2 exempt from the requirements of section 611 products 

3 containing or manufactured with class II, group II sub4 stances determined to have little or no carbon dioxide 

5 equivalent value compared to other substances used in 

6 similar products. 

7 ‘‘(j) NONESSENTIAL PRODUCTS.—For the purposes 

8 of section 610, class II, group II substances shall be regu9 lated under section 610(b), except that in applying section 

10 610(b) the word ‘hydrofluorocarbon’ shall be substituted 

11 for the word ‘chlorofluorocarbon’ and the term ‘class II, 

12 group II’ shall be substituted for the term ‘class I’. Class 

13 II, group II substances shall not be subject to the provi14 sions of section 610(d). 

15 ‘‘(k) INTERNATIONAL TRANSFERS.—In the case of 

16 class II, group II substances, in lieu of section 616, this 

17 subsection shall apply. To the extent consistent with any 

18 applicable international agreement to which the United 

19 States is a party or otherwise adheres, including any 

20 amendment to the Montreal Protocol, the United States 

21 may engage in transfers with other parties to such agree22 ment or amendment under the following conditions: 

23 ‘‘(1) The United States may transfer produc24 tion allowances to another party to such agreement 

25 or amendment if, at the time of the transfer, the 
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1 Administrator establishes revised production limits 

2 for the United States accounting for the transfer in 

3 accordance with regulations promulgated pursuant 

4 to this subsection. 

5 ‘‘(2) The United States may acquire production 

6 allowances from another party to such agreement or 

7 amendment if, at the time of the transfer, the Ad8 ministrator finds that the other party has revised its 

9 domestic production limits in the same manner as 

10 provided with respect to transfers by the United 

11 States in the regulations promulgated pursuant to 

12 this subsection. 

13 ‘‘(l) RELATIONSHIP TO OTHER LAWS.— 

14 ‘‘(1) STATE LAWS.—For purposes of section 

15 116, the requirements of this section for class II, 

16 group II substances shall be treated as requirements 

17 for the control and abatement of air pollution. 

18 ‘‘(2) MULTILATERAL AGREEMENTS.—Section 

19 614 shall apply to the provisions of this section con20 cerning class II, group II substances, except that for 

21 the words ‘Montreal Protocol’ there shall be sub22 stituted the words ‘Montreal Protocol, or any appli23 cable multilateral agreement to which the United 

24 States is a party or otherwise adheres that restricts 

25 the production or consumption of class II, group II 
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1 substances,’ and for the words ‘Article 4 of the Mon2 treal Protocol’ there shall be substituted ‘any provi3 sion of such multilateral agreement regarding trade 

4 with non-parties’. 

5 ‘‘(3) FEDERAL FACILITIES.—For purposes of 

6 section 118, the requirements of this section for 

7 class II, group II substances and corresponding 

8 State, interstate, and local requirements, administra9 tive authority, and process and sanctions shall be 

10 treated as requirements for the control and abate11 ment of air pollution within the meaning of section 

12 118. 

13 ‘‘(m) CARBON DIOXIDE EQUIVALENT VALUE.—(1) 

14 In lieu of section 602(e), the provisions of this subsection 

15 shall apply in the case of class II, group II substances. 

16 Simultaneously with establishing the list of class II, group 

17 II substances, and simultaneously with any addition to 

18 that list, the Administrator shall publish the carbon diox19 ide equivalent value of each listed class II, group II sub20 stance, based on a determination of the number of metric 

21 tons of carbon dioxide that makes the same contribution 

22 to global warming over 100 years as 1 metric ton of each 

23 class II, group II substance. 

24 ‘‘(2) Not later than February 1, 2017, and not less 

25 than every 5 years thereafter, the Administrator shall— 
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1 ‘‘(A) review, and if appropriate, revise the car2 bon dioxide equivalent values established for class II, 

3 group II substances based on a determination of the 

4 number of metric tons of carbon dioxide that makes 

5 the same contributions to global warming over 100 

6 years as 1 metric ton of each class II, group II sub7 stance; and 

8 ‘‘(B) publish in the Federal Register the results 

9 of that review and any revisions. 

10 ‘‘(3) A revised determination published in the Federal 

11 Register under paragraph (2)(B) shall take effect for pro12 duction of class II, group II substances, consumption of 

13 class II, group II substances, and importation of products 

14 containing class II, group II substances starting on Janu15 ary 1 of the first calendar year starting at least 9 months 

16 after the date on which the revised determination was pub17 lished. 

18 ‘‘(4) The Administrator may decrease the frequency 

19 of review and revision under paragraph (2) if the Adminis20 trator determines that such decrease is appropriate in 

21 order to synchronize such review and revisions with any 

22 similar review process carried out pursuant to the United 

23 Nations Framework Convention on Climate Change, an 

24 agreement negotiated under that convention, The Vienna 

25 Convention for the Protection of the Ozone Layer, or an 
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1 agreement negotiated under that convention, except that 

2 in no event shall the Administrator carry out such review 

3 and revision any less frequently than every 10 years. 

4 ‘‘(n) REPORTING REQUIREMENTS.—In lieu of sub5 sections (b) and (c) of section 603, paragraphs (1) and 

6 (2) of this subsection shall apply in the case of class II, 

7 group II substances: 

8 ‘‘(1) IN GENERAL.—On a quarterly basis, or 

9 such other basis (not less than annually) as deter10 mined by the Administrator, each person who pro11 duced, imported, or exported a class II, group II 

12 substance, or who imported a product containing a 

13 class II, group II substance, shall file a report with 

14 the Administrator setting forth the carbon dioxide 

15 equivalent amount of the substance that such person 

16 produced, imported, or exported, as well as the 

17 amount that was contained in products imported by 

18 that person, during the preceding reporting period. 

19 Each such report shall be signed and attested by a 

20 responsible officer. If all other reporting is complete, 

21 no such report shall be required from a person after 

22 April 1 of the calendar year after such person per23 manently ceases production, importation, and expor24 tation of the substance, as well as importation of 

25 products containing the substance, and so notifies 
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1 the Administrator in writing. If the United States 

2 becomes a party or otherwise adheres to a multilat3 eral agreement, including any amendment to the 

4 Montreal Protocol on Substances That Deplete the 

5 Ozone Layer, that restricts the production or con6 sumption of class II, group II substances, then, if all 

7 other reporting is complete, no such report shall be 

8 required from a person with respect to importation 

9 from parties to such agreement or amendment of 

10 products containing any class II, group II substance 

11 restricted by such agreement or amendment, after 

12 April 1 of the calendar year following the year dur13 ing which such agreement or amendment enters into 

14 force. 

15 ‘‘(2) BASELINE REPORTS FOR CLASS II, GROUP

16 II SUBSTANCES.— 

17 ‘‘(A) IN GENERAL.—Unless such informa18 tion has been previously reported to the Admin19 istrator, on the date on which the first report 

20 under paragraph (1) of this subsection is re21 quired to be filed, each person who produced, 

22 imported, or exported a class II, group II sub23 stance, or who imported a product containing a 

24 class II substance, (other than a substance 

25 added to the list of class II, group II substances 
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1 after the publication of the initial list of such 

2 substances under this section), shall file a re3 port with the Administrator setting forth the 

4 amount of such substance that such person pro5 duced, imported, exported, or that was con6 tained in products imported by that person, 

7 during each of calendar years 2004, 2005, and 

8 2006. 

9 ‘‘(B) PRODUCERS.—In reporting under 

10 subparagraph (A), each person who produced in 

11 the United States a class II substance during 

12 calendar year 2004, 2005, or 2006 shall— 

13 ‘‘(i) report all acquisitions or pur14 chases of class II substances during each 

15 of calendar years 2004, 2005, and 2006 

16 from all other persons who produced in the 

17 United States a class II substance during 

18 calendar year 2004, 2005, or 2006, and 

19 supply evidence of such acquisitions and 

20 purchases as deemed necessary by the Ad21 ministrator; and 

22 ‘‘(ii) report all transfers or sales of 

23 class II substances during each of calendar 

24 years 2004, 2005, and 2006 to all other 

25 persons who produced in the United States 
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1 a class II substance during calendar year 

2 2004, 2005, or 2006, and supply evidence 

3 of such transfers and sales as deemed nec4 essary by the Administrator. 

5 ‘‘(C) ADDED SUBSTANCES.—In the case of 

6 a substance added to the list of class II, group 

7 II substances after publication of the initial list 

8 of such substances under this section, each per9 son who produced, imported, exported, or im10 ported products containing such substance in 

11 calendar year 2004, 2005, or 2006 shall file a 

12 report with the Administrator within 180 days 

13 after the date on which such substance is added 

14 to the list, setting forth the amount of the sub15 stance that such person produced, imported, 

16 and exported, as well as the amount that was 

17 contained in products imported by that person, 

18 in calendar years 2004, 2005, and 2006. 

19 ‘‘(o) STRATOSPHERIC OZONE AND CLIMATE PROTEC20 TION FUND.— 

21 ‘‘(1) IN GENERAL.—There is established in the 

22 Treasury of the United States a Stratospheric Ozone 

23 and Climate Protection Fund. 

24 ‘‘(2) DEPOSITS.—The Administrator shall de25 posit all proceeds from the auction and non-auction 
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1 sale of allowances under this section into the Strato2 spheric Ozone and Climate Protection Fund. 

3 ‘‘(3) USE.—Amounts deposited into the Strato4 spheric Ozone and Climate Protection Fund shall be 

5 available, subject to appropriations, exclusively for 

6 the following purposes: 

7 ‘‘(A) RECOVERY, RECYCLING, AND REC8 LAMATION.—The Administrator may utilize 

9 funds to establish a program to incentivize the 

10 recovery, recycling, and reclamation of any 

11 Class II substances in order to reduce emissions 

12 of such substances. 

13 ‘‘(B) MULTILATERAL FUND.—If the 

14 United States becomes a party or otherwise ad15 heres to a multilateral agreement, including any 

16 amendment to the Montreal Protocol on Sub17 stances That Deplete the Ozone Layer, which 

18 restricts the production or consumption of class 

19 II, group II substances, the Administrator may 

20 utilize funds to meet any related contribution 

21 obligation of the United States to the Multilat22 eral Fund for the Implementation of the Mon23 treal Protocol or similar multilateral fund es24 tablished under such multilateral agreement. 
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1 ‘‘(C) BEST-IN-CLASS APPLIANCES DEPLOY2 MENT PROGRAM.—The Secretary of Energy is 

3 authorized to utilize funds to carry out the pur4 poses of section 214 of the American Clean En5 ergy and Security Act of 2009. 

6 ‘‘(D) LOW GLOBAL WARMING PRODUCT

7 TRANSITION ASSISTANCE PROGRAM.— 

8 ‘‘(i) IN GENERAL.—The Adminis9 trator, in consultation with the Secretary 

10 of Energy, may utilize funds in fiscal years 

11 2012 through 2022 to establish a program 

12 to provide financial assistance to manufac13 turers of products containing class II, 

14 group II substances to facilitate the transi15 tion to products that contain or utilize al16 ternative substances with no or low carbon 

17 dioxide equivalent value and no ozone de18 pletion potential. 

19 ‘‘(ii) DEFINITION.—In this subpara20 graph, the term ‘products’ means refrig21 erators, freezers, dehumidifiers, air condi22 tioners, foam insulation, technical aerosols, 

23 fire protection systems, and semiconduc24 tors. 
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1 ‘‘(iii) FINANCIAL ASSISTANCE.—The 

2 Administrator may provide financial assist3 ance to manufacturers pursuant to clause 

4 (i) for— 

5 ‘‘(I) the design and configuration 

6 of new products that use alternative 

7 substances with no or low carbon di8 oxide equivalent value and no ozone 

9 depletion potential; and 

10 ‘‘(II) the redesign and retooling 

11 of facilities for the manufacture of 

12 products in the United States that use 

13 alternative substances with no or low 

14 carbon dioxide equivalent value and 

15 no ozone depletion potential. 

16 ‘‘(iv) REPORTS.—For any fiscal year 

17 during which the Administrator provides 

18 financial assistance pursuant to this sub19 paragraph, the Administrator shall submit 

20 a report to the Congress within 3 months 

21 of the end of such fiscal year detailing the 

22 amounts, recipients, specific purposes, and 

23 results of the financial assistance pro24 vided.’’. 
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1 (b) TABLE OF CONTENTS.—The table of contents of 

2 title VI of the Clean Air Act (42 U.S.C. 7671 et seq.) 

3 is amended by adding the following new item at the end 

4 thereof: 

‘‘Sec. 619. Hydrofluorocarbons (HFCs).’’. 

5 (c) FIRE SUPPRESSION AGENTS.—Section 605(a) of 

6 the Clean Air Act (42 U.S.C. 7671(a)) is amended— 

7 (1) by striking ‘‘or’’ at the end of paragraph 

8 (2); 

9 (2) by striking the period at the end of para10 graph (3) and inserting ‘‘; or’’; and 

11 (3) by adding the following new paragraph after 

12 paragraph (3): 

13 ‘‘(4) is listed as acceptable for use as a fire sup14 pression agent for nonresidential applications in ac15 cordance with section 612(c).’’. 

16 (d) MOTOR VEHICLE AIR CONDITIONERS.— 

17 (1) Section 609(e) of the Clean Air Act (42 

18 U.S.C. 7671h(e)) is amended by inserting ‘‘, group 

19 I’’ after each reference to ‘‘class II’’ in the text and 

20 heading. 

21 (2) Section 609 of the Clean Air Act (42 U.S.C. 

22 7671h) is amended by adding the following new sub23 section after subsection (e): 

24 ‘‘(f) CLASS II, GROUP II SUBSTANCES.— 
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1 ‘‘(1) REPAIR.—The Administrator may promul2 gate regulations establishing requirements for repair 

3 of motor vehicle air conditioners prior to adding a 

4 class II, group II substance. 

5 ‘‘(2) SMALL CONTAINERS.—(A) The Adminis6 trator may promulgate regulations establishing serv7 icing practices and procedures for recovery of class 

8 II, group II substances from containers which con9 tain less than 20 pounds of such class II, group II 

10 substances. 

11 ‘‘(B) Not later than 18 months after enactment 

12 of this subsection, the Administrator shall either 

13 promulgate regulations requiring that containers 

14 which contain less than 20 pounds of a class II, 

15 group II substance be equipped with a device or 

16 technology that limits refrigerant emissions and 

17 leaks from the container and limits refrigerant emis18 sions and leaks during the transfer of refrigerant 

19 from the container to the motor vehicle air condi20 tioner or issue a determination that such require21 ments are not necessary or appropriate. 

22 ‘‘(C) Not later than 18 months after enactment 

23 of this subsection, the Administrator shall promul24 gate regulations establishing requirements for con25 sumer education materials on best practices associ-
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1 ated with the use of containers which contain less 

2 than 20 pounds of a class II, group II substance and 

3 prohibiting the sale or distribution, or offer for sale 

4 or distribution, of any class II, group II substance 

5 in any container which contains less than 20 pounds 

6 of such class II, group II substance, unless con7 sumer education materials consistent with such re8 quirements are displayed and available at point-of9 sale locations, provided to the consumer, or included 

10 in or on the packaging of the container which con11 tain less than 20 pounds of a class II, group II sub12 stance. 

13 ‘‘(D) The Administrator may, through rule14 making, extend the requirements established under 

15 this paragraph to containers which contain 30 

16 pounds or less of a class II, group II substance if 

17 the Administrator determines that such action would 

18 produce significant environmental benefits. 

19 ‘‘(3) RESTRICTION OF SALES.—Effective Janu20 ary 1, 2014, no person may sell or distribute or offer 

21 to sell or distribute or otherwise introduce into inter22 state commerce any motor vehicle air conditioner re23 frigerant in any size container unless the substance 

24 has been found acceptable for use in a motor vehicle 

25 air conditioner under section 612.’’. 
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1 (e) SAFE ALTERNATIVES POLICY.—Section 612(e) of 

2 the Clean Air Act (42 U.S.C. 7671k(e)) is amended by 

3 inserting ‘‘or class II’’ after each reference to ‘‘class I’’. 

4 SEC. 333. BLACK CARBON. 

5 (a) DEFINITION.—As used in this section, the term 

6 ‘‘black carbon’’ means primary light absorbing aerosols, 

7 as defined by the Administrator, based on the best avail8 able science. 

9 (b) BLACK CARBON ABATEMENT REPORT.—Not 

10 later than 1 year after the date of enactment of this sec11 tion, the Administrator shall, in consultation with other 

12 appropriate Federal agencies, submit to Congress a report 

13 regarding black carbon emissions. The report shall include 

14 the following: 

15 (1) A summary of the current information and 

16 research that identifies— 

17 (A) an inventory of the major sources of 

18 black carbon emissions in the United States 

19 and throughout the world, including— 

20 (i) an estimate of the quantity of cur21 rent and projected future emissions; and 

22 (ii) the net climate forcing of the 

23 emissions from such sources, including 

24 consideration of co-emissions of other pol25 lutants; 
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1 (B) effective and cost-effective control 

2 technologies, operations, and strategies for ad3 ditional domestic and international black carbon 

4 emissions reductions, such as diesel retrofit 

5 technologies on existing on-road, non-road, and 

6 stationary engines and programs to address res7 idential cookstoves, and forest and agriculture8 based burning; 

9 (C) potential metrics and approaches for 

10 quantifying the climatic effects of black carbon 

11 emissions, including its radiative forcing and 

12 warming effects, that may be used to compare 

13 the climate benefits of different mitigation 

14 strategies, including an assessment of the un15 certainty in such metrics and approaches; and 

16 (D) the public health and environmental 

17 benefits associated with additional controls for 

18 black carbon emissions. 

19 (2) Recommendations regarding— 

20 (A) development of additional emissions 

21 monitoring techniques and capabilities, mod22 eling, and other black carbon-related areas of 

23 study; 

24 (B) areas of focus for additional study of 

25 technologies, operations, and strategies with the 
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1 greatest potential to reduce emissions of black 

2 carbon and associated public health, economic, 

3 and environmental impacts associated with 

4 these emissions; and 

5 (C) actions, in addition to those identified 

6 by the Administrator under section 851 of the 

7 Clean Air Act (as added by subsection (c)), the 

8 Federal Government may take to encourage or 

9 require reductions in black carbon emissions. 

10 (c) BLACK CARBON MITIGATION.—Title VIII of the 

11 Clean Air Act, as added by section 331 of this Act, and 

12 amended by section 222 of this Act, is further amended 

13 by adding after part D the following new part: 

14 ‘‘PART E—BLACK CARBON 

15 ‘‘SEC. 851. BLACK CARBON. 

16 ‘‘(a) DOMESTIC BLACK CARBON MITIGATION.—Not 

17 later than 18 months after the date of enactment of this 

18 section, the Administrator, taking into consideration the 

19 public health and environmental impacts of black carbon 

20 emissions, including the effects on global and regional 

21 warming, the Arctic, and other snow and ice-covered sur22 faces, shall propose regulations under the existing authori23 ties of this Act to reduce emissions of black carbon or pro24 pose a finding that existing regulations promulgated pur25 suant to this Act adequately regulate black carbon emis-
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1 sions. Not later than 2 years after the date of enactment 

2 of this section, the Administrator shall promulgate final 

3 regulations under the existing authorities of this Act or 

4 finalize the proposed finding. Such regulations shall not 

5 apply to specific types, classes, categories, or other suit6 able groupings of emissions sources that the Adminis7 trator finds are subject to adequate regulation. 

8 ‘‘(b) INTERNATIONAL BLACK CARBON MITIGA9 TION.— 

10 ‘‘(1) REPORT.—Not later than 1 year after the 

11 date of enactment of this section, the Administrator, 

12 in coordination with the Secretary of State and 

13 other appropriate Federal agencies, shall transmit a 

14 report to Congress on the amount, type, and direc15 tion of all present United States financial, technical, 

16 and related assistance to foreign countries to reduce, 

17 mitigate, and otherwise abate black carbon emis18 sions. 

19 ‘‘(2) OTHER OPPORTUNITIES.—The report re20 quired under paragraph (1) shall also identify oppor21 tunities and recommendations, including action 

22 under existing authorities, to achieve significant 

23 black carbon emission reductions in foreign countries 

24 through technical assistance or other approaches 

25 to— 
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1 ‘‘(A) promote sustainable solutions to 

2 bring clean, efficient, safe, and affordable 

3 stoves, fuels, or both stoves and fuels to resi4 dents of developing countries that are reliant on 

5 solid fuels such as wood, dung, charcoal, coal, 

6 or crop residues for home cooking and heating, 

7 so as to help reduce the public health, environ8 mental, and economic impacts of black carbon 

9 emissions from these sources by— 

10 ‘‘(i) identifying key regions for large11 scale demonstration efforts, and key part12 ners in each such region; and 

13 ‘‘(ii) developing for each such region a 

14 large-scale implementation strategy with a 

15 goal of collectively reaching 20,000,000 

16 homes over 5 years with interventions that 

17 will— 

18 ‘‘(I) increase stove efficiency by 

19 over 50 percent (or such other goal as 

20 determined by the Administrator); 

21 ‘‘(II) reduce emissions of black 

22 carbon by over 60 percent (or such 

23 other goal as determined by the Ad24 ministrator); and 
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1 ‘‘(III) reduce the incidence of se2 vere pneumonia in children under 5 

3 years old by over 30 percent (or such 

4 other goal as determined by the Ad5 ministrator); 

6 ‘‘(B) make technological improvements to 

7 diesel engines and provide greater access to 

8 fuels that emit less or no black carbon; 

9 ‘‘(C) reduce unnecessary agricultural or 

10 other biomass burning where feasible alter11 natives exist; 

12 ‘‘(D) reduce unnecessary fossil fuel burn13 ing that produces black carbon where feasible 

14 alternatives exist; 

15 ‘‘(E) reduce other sources of black carbon 

16 emissions; and 

17 ‘‘(F) improve capacity to achieve greater 

18 compliance with existing laws to address black 

19 carbon emissions.’’. 

20 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

21 are authorized to be appropriated such sums as are nec22 essary to carry out this section. 

23 SEC. 334. STATES. 

24 Section 116 of the Clean Air Act (42 U.S.C. 7416) 

25 is amended by adding the following at the end thereof: 
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1 ‘‘For the purposes of this section, the phrases ‘standard 

2 or limitation respecting emissions of air pollutants’ and 

3 ‘requirements respecting control or abatement of air pollu4 tion’ shall include any provision to: cap greenhouse gas 

5 emissions, require surrender to the State or a political 

6 subdivision thereof of emission allowances or offset credits 

7 established or issued under this Act, and require the use 

8 of such allowances or credits as a means of demonstrating 

9 compliance with requirements established by a State or 

10 political subdivision thereof.’’. 

11 SEC. 335. STATE PROGRAMS. 

12 Title VIII of the Clean Air Act, as added by section 

13 331 of this Act and amended by several sections of this 

14 Act, is further amended by adding after part E (as added 

15 by section 333(c) of this Act) the following new part: 

16 ‘‘PART F—MISCELLANEOUS 

17 ‘‘SEC. 861. STATE PROGRAMS. 

18 ‘‘Notwithstanding section 116, no State or political 

19 subdivision thereof shall implement or enforce a cap and 

20 trade program that covers any capped emissions emitted 

21 during the years 2012 through 2017. For purposes of this 

22 section, the term ‘cap and trade program’ means a system 

23 of greenhouse gas regulation under which a State or polit24 ical subdivision issues a limited number of tradable instru25 ments in the nature of emission allowances and requires 
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1 that sources within its jurisdiction surrender such 

2 tradeable instruments for each unit of greenhouse gases 

3 emitted during a compliance period. For purposes of this 

4 section, a ‘cap-and-trade program’ does not include a tar5 get or limit on greenhouse gas emissions adopted by a 

6 State or political subdivision that is implemented other 

7 than through the issuance and surrender of a limited num8 ber of tradable instruments in the nature of emission al9 lowances, nor does it include any other standard, limit, 

10 regulation, or program to reduce greenhouse gas emissions 

11 that is not implemented through the issuance and sur12 render of a limited number of tradeable instruments in 

13 the nature of emission allowances. For purposes of this 

14 section, the term ‘cap and trade program’ does not in15 clude, among other things, fleet-wide motor vehicle emis16 sion requirements that allow greater emissions with in17 creased vehicle production, or requirements that fuels, or 

18 other products, meet an average pollution emission rate 

19 or lifecycle greenhouse gas standard. 

20 ‘‘SEC. 862. GRANTS FOR SUPPORT OF AIR POLLUTION CON21 TROL PROGRAMS. 

22 ‘‘The Administrator is authorized to make grants to 

23 air pollution control agencies pursuant to section 105 for 

24 purposes of assisting in the implementation of programs 
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1 to address global warming established under the Safe Cli2 mate Act.’’. 

3 SEC. 336. ENFORCEMENT. 

4 (a) REMAND.—Section 307(b) of the Clean Air Act 

5 (42 U.S.C. 7607(b)) is amended by adding the following 

6 new paragraphs at the end thereof: 

7 ‘‘(3) If the court determines that any action of 

8 the Administrator is arbitrary, capricious, or other9 wise unlawful, the court may remand such action, 

10 without vacatur, if vacatur would impair or delay 

11 protection of the environment or public health or 

12 otherwise undermine the timely achievement of the 

13 purposes of this Act. 

14 ‘‘(4) If the court determines that any action of 

15 the Administrator is arbitrary, capricious, or other16 wise unlawful, and remands the matter to the Ad17 ministrator, the Administrator shall complete final 

18 action on remand within an expeditious time period 

19 no longer than the time originally allowed for the ac20 tion or 1 year, whichever is less, unless the court on 

21 motion determines that a shorter or longer period is 

22 necessary, appropriate, and consistent with the pur23 poses of this Act. The court of appeals shall have ju24 risdiction to enforce a deadline for action on remand 

25 under this subparagraph.’’. 
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1 (b) PETITION FOR RECONSIDERATION.—Section 

2 307(d)(7)(B) of the Clean Air Act (42 U.S.C. 

3 7607(d)(7)(B)) is amended as follows: 

4 (1) By inserting after the second sentence ‘‘If 

5 a petition for reconsideration is filed, the Adminis6 trator shall take final action on such petition, in7 cluding promulgation of final action either revising 

8 or determining not to revise the action for which re9 consideration is sought, within 150 days after the 

10 petition is received by the Administrator or the peti11 tion shall be deemed denied for the purpose of judi12 cial review.’’. 

13 (2) By amending the third sentence to read as 

14 follows: ‘‘Such person may seek judicial review of 

15 such denial, or of any other final action, by the Ad16 ministrator, in response to a petition for reconsider17 ation, in the United States court of appeals for the 

18 appropriate circuit (as provided in subsection (b)).’’. 

19 SEC. 337. CONFORMING AMENDMENTS. 

20 (a) FEDERAL ENFORCEMENT.—Section 113 of the 

21 Clean Air Act (42 U.S.C. 7413) is amended as follows: 

22 (1) In subsection (a)(3), by striking ‘‘or title 

23 VI,’’ and inserting ‘‘title VI, title VII, or title VIII’’. 

24 (2) In subsection (b), by striking ‘‘or a major 

25 stationary source’’ and inserting ‘‘a major stationary 
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1 source, or a covered EGU under title VIII’’ in the 

2 material preceding paragraph (1). 

3 (3) In paragraph (2) of subsection (b), by strik4 ing ‘‘or title VI’’ and inserting ‘‘title VI, title VII, 

5 or title VIII’’. 

6 (4) In subsection (c)— 

7 (A) in the first sentence of paragraph (1), 

8 by striking ‘‘or title VI (relating to strato9 spheric ozone control),’’ and inserting ‘‘title VI, 

10 title VII, or title VIII,’’; and 

11 (B) in the first sentence of paragraph (3), 

12 by striking ‘‘or VI’’ and inserting ‘‘VI, VII, or 

13 VIII’’. 

14 (5) In subsection (d)(1)(B), by striking ‘‘or VI’’ 

15 and inserting ‘‘VI, VII, or VIII’’. 

16 (6) In subsection (f), in the first sentence, by 

17 striking ‘‘or VI’’ and inserting ‘‘VI, VII, or VIII’’. 

18 (b) RETENTION OF STATE AUTHORITY.—Section 

19 116 of the Clean Air Act (42 U.S.C. 7416) is amended 

20 as follows: 

21 (1) By striking ‘‘and 233’’ and inserting ‘‘233’’. 

22 (2) By striking ‘‘of moving sources)’’ and in23 serting ‘‘of moving sources), and 861 (preempting 

24 certain State greenhouse gas programs for a limited 

25 time)’’. 
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1 (c) INSPECTIONS, MONITORING, AND ENTRY.—Sec2 tion 114(a) of the Clean Air Act (42 U.S.C. 7414(a)) is 

3 amended by striking ‘‘section 112,’’ and all that follows 

4 through ‘‘(ii)’’ and inserting the following: ‘‘section 112, 

5 or any regulation of greenhouse gas emissions under title 

6 VII or VIII, (ii)’’. 

7 (d) ENFORCEMENT.—Subsection (f) of section 304 of 

8 the Clean Air Act (42 U.S.C. 7604(f)) is amended as fol9 lows: 

10 (1) By striking ‘‘; or’’ at the end of paragraph 

11 (3) thereof and inserting a comma. 

12 (2) By striking the period at the end of para13 graph (4) thereof and inserting ‘‘, or’’. 

14 (3) By adding the following after paragraph (4) 

15 thereof: 

16 ‘‘(5) any requirement of title VII or VIII.’’. 

17 (e) ADMINISTRATIVE PROCEEDINGS AND JUDICIAL

18 REVIEW.—Section 307 of the Clean Air Act (42 U.S.C. 

19 7607) is amended as follows: 

20 (1) In subsection (a), by striking ‘‘, or section 

21 306’’ and inserting ‘‘section 306, or title VII or 

22 VIII’’. 

23 (2) In subsection (b)(1)— 

24 (A) by striking ‘‘,,’’ and inserting ‘‘,’’ in 

25 each place such punctuation appears; and 
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1 (B) by striking ‘‘section 120,’’ in the first 

2 sentence and inserting ‘‘section 120, any final 

3 action under title VII or VIII,’’. 

4 (3) In subsection (d)(1) by amending subpara5 graph (S) to read as follows: 

6 ‘‘(S) the promulgation or revision of any 

7 regulation under title VII or VIII,’’. 

8 SEC. 338. DAVIS-BACON COMPLIANCE. 

9 (a) IN GENERAL.—Notwithstanding any other provi10 sion of law and in a manner consistent with other provi11 sions in this Act, to receive emission allowances or funding 

12 under this Act, or the amendments made by this Act, the 

13 recipient shall provide reasonable assurances that all la14 borers and mechanics employed by contractors and sub15 contractors on projects funded directly by or assisted in 

16 whole or in part by and through the Federal Government 

17 pursuant to this Act, or the amendments made by this 

18 Act, or by any entity established in accordance with this 

19 Act, or the amendments made by this Act, including the 

20 Carbon Storage Research Corporation, will be paid wages 

21 at rates not less than those prevailing on projects of a 

22 character similar in the locality as determined by the Sec23 retary of Labor in accordance with subchapter IV of chap24 ter 31 of title 40, United States Code (commonly known 

25 as the ‘‘Davis-Bacon Act’’). With respect to the labor 
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1 standards specified in this section, the Secretary of Labor 

2 shall have the authority and functions set forth in Reorga3 nization Plan Numbered 14 of 1950 (64 Stat. 1267; 5 

4 U.S.C. App.) and section 3145 of title 40, United States 

5 Code. 

6 (b) EXEMPTION.—Neither subsection (a) nor the re7 quirements of subchapter IV of chapter 31 of title 40, 

8 United States Code, shall apply to retrofitting of the fol9 lowing: 

10 (1) Single family homes (both attached and de11 tached) under section 202. 

12 (2) Owner-occupied residential units in larger 

13 buildings that have their own dedicated space-condi14 tioning systems under section 202. 

15 (3) Residential buildings (as defined in section 

16 202(a)(5)) if designed for residential use by less 

17 than 4 families. 

18 (4) Nonresidential buildings (as defined in sec19 tion 202(a)(1)) if the net interior space of such non20 residential building is less than 6,500 square feet. 

21 SEC. 339. NATIONAL STRATEGY FOR DOMESTIC BIOLOGI22 CAL CARBON SEQUESTRATION. 

23 Not later than 1 year after the date of enactment 

24 of this Act, the Administrator of the Environmental Pro25 tection Agency, in consultation with the Secretary of En-
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1 ergy, the Secretary of Agriculture, the Secretary of the 

2 Interior, and the heads of such other relevant Federal 

3 agencies as the President may designate, shall submit to 

4 Congress a report setting forth a unified and comprehen5 sive strategy to address the key legal, regulatory, techno6 logical, and other barriers to maximizing the potential for 

7 sustainable biological sequestration of carbon within the 

8 United States. 

9 SEC. 340. REDUCING ACID RAIN AND MERCURY POLLU10 TION. 

11 Not later than 18 months after the date of enactment 

12 of this Act, the Administrator shall submit to Congress 

13 a report that analyzes the effects of different carbon diox14 ide reduction strategies and technologies on the emissions 

15 of mercury, sulfur dioxide, and nitrogen oxide, which 

16 cause acid rain, particulate matter, ground level ozone, 

17 mercury contamination, and other environmental prob18 lems. The report shall assess a variety of carbon reduction 

19 technologies, including the application of various carbon 

20 capture and sequestration technologies for both new and 

21 existing power plants. The report shall assess the current 

22 scientific and technical understanding of the interplay be23 tween the various technologies and emissions of air pollut24 ants, identify hurdles to strategies that could cost-effec-
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1 tively reduce emissions of multiple pollutants, and make 

2 appropriate recommendations. 

3 Subtitle D—Carbon Market 

4 Assurance 

5 SEC. 341. CARBON MARKET ASSURANCE. 

6 (a) AMENDMENT.—The Federal Power Act (16 

7 U.S.C. 791a and following) is amended by adding at the 

8 end the following: 

9 ‘‘PART IV—CARBON MARKET ASSURANCE 

10 ‘‘SEC. 401. OVERSIGHT AND ASSURANCE OF CARBON MAR11 KETS. 

12 ‘‘(a) DEFINITIONS.—In this section: 

13 ‘‘(1) COVERED ENTITY.—The term ‘covered en14 tity’ shall have the meaning given in section 700 of 

15 the Clean Air Act. 

16 ‘‘(2) REGULATED ALLOWANCE.—The term ‘reg17 ulated allowance’ means any emission allowance, 

18 compensatory allowance, offset credit, or Federal re19 newable electricity credit established or issued under 

20 the American Clean Energy and Security Act of 

21 2009. 

22 ‘‘(3) REGULATED INSTRUMENT.—The term 

23 ‘regulated instrument’ means a regulated allowance 

24 or a regulated allowance derivative. 

25 ‘‘(b) REGULATED ALLOWANCE MARKET.— 
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1 ‘‘(1) AUTHORITY.—The Commission shall pro2 mulgate regulations for the establishment, operation, 

3 and oversight of markets for regulated allowances 

4 not later than 18 months after the date of the enact5 ment of this section, and from time to time there6 after as may be appropriate. 

7 ‘‘(2) REGULATIONS.—The regulations promul8 gated pursuant to paragraph (1) shall— 

9 ‘‘(A) provide for effective and comprehen10 sive market oversight; 

11 ‘‘(B) prohibit fraud, market manipulation, 

12 and excess speculation, and provide measures to 

13 limit unreasonable fluctuation in the prices of 

14 regulated allowances; 

15 ‘‘(C) facilitate compliance with title VII of 

16 the Clean Air Act by covered entities; 

17 ‘‘(D) ensure market transparency and rec18 ordkeeping deemed necessary and appropriate 

19 by the Commission to provide for efficient price 

20 discovery; prevention of fraud, market manipu21 lation, and excess speculation; and compliance 

22 with title VII of the Clean Air Act and section 

23 610 of the Public Utility Regulatory Policies 

24 Act of 1978; 
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1 ‘‘(E) as necessary, ensure that position 

2 limitations for individual market participants 

3 are established with respect to each class of 

4 regulated allowances; 

5 ‘‘(F) as necessary, ensure that margin re6 quirements are established for each class of reg7 ulated allowances; 

8 ‘‘(G) provide for the formation and oper9 ation of a fair, orderly and liquid national mar10 ket system that allows for the best execution in 

11 the trading of regulated allowances; 

12 ‘‘(H) limit or eliminate counterparty risks, 

13 market power concentration risks, and other 

14 risks associated with trading regulated allow15 ances outside of trading facilities; and 

16 ‘‘(I) establish standards for qualification 

17 as, and operation of, trading facilities for regu18 lated allowances; 

19 ‘‘(J) establish standards for qualification 

20 as, and operation of, clearing organizations for 

21 trading facilities for regulated allowances; and 

22 ‘‘(K) include such other requirements as 

23 necessary to preserve market integrity and fa24 cilitate compliance with title VII of the Clean 

25 Air Act and section 610 of the Public Utility 
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1 Regulatory Policies Act of 1978 and the regula2 tions promulgated under such title and such 

3 section. 

4 ‘‘(3) ENFORCEMENT.— 

5 ‘‘(A) IN GENERAL.—If the Commission de6 termines, after notice and an opportunity for a 

7 hearing on the record, that any entity has vio8 lated any rule or order issued by the Commis9 sion under this subsection, the Commission may 

10 issue an order— 

11 ‘‘(i) prohibiting the entity from trad12 ing on a trading facility for regulated al13 lowances registered with the Commission, 

14 and requiring all such facilities to refuse 

15 the entity all privileges for such period as 

16 may be specified in the order; 

17 ‘‘(ii) if the entity is registered with 

18 the Commission in any capacity, sus19 pending for a period of not more than 6 

20 months, or revoking, the registration of the 

21 entity; 

22 ‘‘(iii) assessing the entity a civil pen23 alty of not more than $1,000,000 per day 

24 per violation for as long as the violation 

25 continues (and in determining the amount 
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1 of a civil penalty, the Commission shall 

2 take into account the nature and serious3 ness of the violation and the efforts to 

4 remedy the violation); and 

5 ‘‘(iv) requiring disgorgement of unjust 

6 profits, restitution to entities harmed by 

7 the violation as determined by the Com8 mission, or both. 

9 ‘‘(B) AUTHORITY TO SUSPEND OR REVOKE

10 REGISTRATION.—The Commission may suspend 

11 for a period of not more than 6 months, or re12 voke, the registration of a trading facility for 

13 regulated allowances or of a clearing organiza14 tion registered by the Commission if, after no15 tice and opportunity for a hearing on the 

16 record, the Commission finds that— 

17 ‘‘(i) the entity violated any rule or 

18 order issued by the Commission under this 

19 subsection; or 

20 ‘‘(ii) a director, officer, employee, or 

21 agent of the entity has violated any rule or 

22 order issued by the Commission under this 

23 subsection. 

24 ‘‘(C) CEASE AND DESIST PROCEEDINGS.— 
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1 ‘‘(i) IN GENERAL.—If the Commission 

2 determines that any entity may be vio3 lating, may have violated, or may be about 

4 to violate any provision of this part, or any 

5 regulation promulgated by, or any restric6 tion, condition, or order made or imposed 

7 by, the Commission under this Act, and if 

8 the Commission finds that the alleged vio9 lation or threatened violation, or the con10 tinuation of the violation, is likely to result 

11 in significant harm to covered entities or 

12 market participants, or significant harm to 

13 the public interest, the Commission may 

14 issue a temporary order requiring the enti15 ty— 

16 ‘‘(I) to cease and desist from the 

17 violation or threatened violation; 

18 ‘‘(II) to take such action as is 

19 necessary to prevent the violation or 

20 threatened violation; and 

21 ‘‘(III) to prevent, as the Commis22 sion determines to be appropriate— 

23 ‘‘(aa) significant harm to 

24 covered entities or market par25 ticipants; 
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1 ‘‘(bb) significant harm to 

2 the public interest; and 

3 ‘‘(cc) frustration of the abil4 ity of the Commission to conduct 

5 the proceedings or to redress the 

6 violation at the conclusion of the 

7 proceedings. 

8 ‘‘(ii) TIMING OF ENTRY.—An order 

9 issued under clause (i) shall be entered 

10 only after notice and opportunity for a 

11 hearing, unless the Commission determines 

12 that notice and hearing before entry would 

13 be impracticable or contrary to the public 

14 interest. 

15 ‘‘(iii) EFFECTIVE DATE.—A tem16 porary order issued under clause (i) 

17 shall— 

18 ‘‘(I) become effective upon serv19 ice upon the entity; and 

20 ‘‘(II) unless set aside, limited, or 

21 suspended by the Commission or a 

22 court of competent jurisdiction, re23 main effective and enforceable pend24 ing the completion of the proceedings. 
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1 ‘‘(D) PROCEEDINGS REGARDING DISSIPA2 TION OR CONVERSION OF ASSETS.— 

3 ‘‘(i) IN GENERAL.—In a proceeding 

4 involving an alleged violation of a regula5 tion or order promulgated or issued by the 

6 Commission, if the Commission determines 

7 that the alleged violation or related cir8 cumstances are likely to result in signifi9 cant dissipation or conversion of assets, 

10 the Commission may issue a temporary 

11 order requiring the respondent to take 

12 such action as is necessary to prevent the 

13 dissipation or conversion of assets. 

14 ‘‘(ii) TIMING OF ENTRY.—An order 

15 issued under clause (i) shall be entered 

16 only after notice and opportunity for a 

17 hearing, unless the Commission determines 

18 that notice and hearing before entry would 

19 be impracticable or contrary to the public 

20 interest. 

21 ‘‘(iii) EFFECTIVE DATE.—A tem22 porary order issued under clause (i) 

23 shall— 

24 ‘‘(I) become effective upon serv25 ice upon the respondent; and 
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1 ‘‘(II) unless set aside, limited, or 

2 suspended by the Commission or a 

3 court of competent jurisdiction, re4 main effective and enforceable pend5 ing the completion of the proceedings. 

6 ‘‘(E) REVIEW OF TEMPORARY ORDERS.— 

7 ‘‘(i) APPLICATION FOR REVIEW.—At 

8 any time after a respondent has been 

9 served with a temporary cease-and-desist 

10 order pursuant to subparagraph (C) or 

11 order regarding the dissipation or conver12 sion of assets pursuant to subparagraph 

13 (D), the respondent may apply to the Com14 mission to have the order set aside, lim15 ited, or suspended. 

16 ‘‘(ii) NO PRIOR HEARING.—If a re17 spondent has been served with a temporary 

18 order entered without a prior hearing of 

19 the Commission— 

20 ‘‘(I) the respondent may, not 

21 later than 10 days after the date on 

22 which the order was served, request a 

23 hearing on the application; and 

24 ‘‘(II) the Commission shall hold a 

25 hearing and render a decision on the 
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1 application at the earliest practicable 

2 time. 

3 ‘‘(iii) JUDICIAL REVIEW.— 

4 ‘‘(I) IN GENERAL.—An entity 

5 shall not be required to submit a re6 quest for rehearing of a temporary 

7 order before seeking judicial review in 

8 accordance with this subparagraph. 

9 ‘‘(II) TIMING OF REVIEW.—Not 

10 later than 10 days after the date on 

11 which a respondent is served with a 

12 temporary cease-and-desist order en13 tered with a prior hearing of the Com14 mission, or 10 days after the date on 

15 which the Commission renders a deci16 sion on an application and hearing 

17 under clause (i) with respect to any 

18 temporary order entered without such 

19 a prior hearing— 

20 ‘‘(aa) the respondent may 

21 obtain a review of the order in a 

22 United States circuit court hav23 ing jurisdiction over the circuit in 

24 which the respondent resides or 

25 has a principal place of business, 
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•HR 2454 EH

1 or in the United States Court of 

2 Appeals for the District of Co3 lumbia Circuit, for an order set4 ting aside, limiting, or sus5 pending the effectiveness or en6 forcement of the order; and 

7 ‘‘(bb) the court shall have 

8 jurisdiction to enter such an 

9 order. 

10 ‘‘(III) NO PRIOR HEARING.—A 

11 respondent served with a temporary 

12 order entered without a prior hearing 

13 of the Commission may not apply to 

14 the applicable court described in sub15 clause (II) except after a hearing and 

16 decision by the Commission on the ap17 plication of the respondent under 

18 clauses (i) and (ii). 

19 ‘‘(iv) PROCEDURES.—Section 222 and 

20 Part III shall apply to— 

21 ‘‘(I) an application for review of 

22 an order under clause (i); and 

23 ‘‘(II) an order subject to review 

24 under clause (iii). 
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1 ‘‘(v) NO AUTOMATIC STAY OF TEM2 PORARY ORDER.—The commencement of 

3 proceedings under clause (iii) shall not, un4 less specifically ordered by the court, oper5 ate as a stay of the order of the Commis6 sion. 

7 ‘‘(F) ACTIONS TO COLLECT CIVIL PEN8 ALTIES.—If any person fails to pay a civil pen9 alty assessed under this subsection after an 

10 order assessing the penalty has become final 

11 and unappealable, the Commission shall bring 

12 an action to recover the amount of the penalty 

13 in any appropriate United States district court. 

14 ‘‘(4) TRANSACTION FEES.— 

15 ‘‘(A) IN GENERAL.—The Commission 

16 shall, in accordance with this paragraph, estab17 lish and collect transaction fees designed to re18 cover the costs to the Federal Government of 

19 the supervision and regulation of regulated al20 lowance markets and market participants, in21 cluding related costs for enforcement activities, 

22 policy and rulemaking activities, administration, 

23 legal services, and international regulatory ac24 tivities. 
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1 ‘‘(B) INITIAL FEE RATE.—Each trading 

2 facility on or through which regulated allow3 ances are transacted shall pay to the Commis4 sion a fee at a rate of not more than $15 per 

5 $1,000,000 of the aggregate dollar amount of 

6 sales of regulated allowances transacted 

7 through the facility. 

8 ‘‘(C) ANNUAL ADJUSTMENT OF FEE

9 RATE.—The Commission shall, on an annual 

10 basis— 

11 ‘‘(i) assess the rate at which fees are 

12 to be collected as necessary to meet the 

13 cost recovery requirement in subparagraph 

14 (A); and 

15 ‘‘(ii) consistent with subparagraph 

16 (B), adjust the rate as necessary in order 

17 to meet the requirement. 

18 ‘‘(D) REPORT ON ADEQUACY OF FEES IN

19 RECOVERING COSTS.—The Commission, shall, 

20 on an annual basis, report to the Committee on 

21 Energy and Commerce of the House of Rep22 resentatives and the Committee on Energy and 

23 Natural Resources of the Senate on the ade24 quacy of the transaction fees in providing fund-
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1 ing for the Commission to regulate the regu2 lated allowance markets. 

3 ‘‘(5) JUDICIAL REVIEW.—Judicial review of ac4 tions taken by the Commission under this subsection 

5 shall be pursuant to part III. 

6 ‘‘(6) ADDITIONAL EMPLOYEES REPORT AND AP7 POINTMENT.—Within 18 months after the date of 

8 the enactment of this section, the Commission shall 

9 submit to the President, the Committee on Energy 

10 and Commerce of the House of Representatives, and 

11 the Committee on Energy and Natural Resources of 

12 the Senate, a report that contains recommendations 

13 as to how many additional employees would be nec14 essary to provide robust oversight and enforcement 

15 of the regulations promulgated under this sub16 section. As soon as practicable after the completion 

17 of the report, subject to appropriations, the Commis18 sion shall appoint the recommended number of addi19 tional employees for such purposes. 

20 ‘‘(c) WORKING GROUP.— 

21 ‘‘(1) ESTABLISHMENT.—Not later than 30 days 

22 after the date of the enactment of this section, the 

23 President shall establish an interagency working 

24 group on carbon market oversight, which shall in25 clude the Administrator of the Environmental Pro-
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•HR 2454 EH

1 tection Agency and representatives of other relevant 

2 agencies, to make recommendations to the Com3 modity Futures Trading Commission regarding pro4 posed regulations for the establishment, operation, 

5 and oversight of markets for regulated allowance de6 rivatives. 

7 ‘‘(2) REPORT.—Not later than 180 days after 

8 the date of the enactment of this section, and bienni9 ally thereafter, the interagency working group shall 

10 submit a written report to the President and Con11 gress that includes its recommendations to the Com12 modity Futures Trading Commission regarding pro13 posed regulations for the establishment, operation, 

14 and oversight of markets for regulated allowance de15 rivatives and any recommendations to Congress for 

16 statutory changes needed to ensure the establish17 ment, operation, and oversight of transparent, fair, 

18 stable, and efficient markets for regulated allowance 

19 derivatives. 

20 ‘‘(d) PENALTY FOR FRAUD AND FALSE OR MIS21 LEADING STATEMENTS.—A person convicted under sec22 tion 1041 of title 18, United States Code, may be prohib23 ited from holding or trading regulated allowances for a 

24 period of not more than 5 years pursuant to the regula25 tions promulgated under this section, except that, if the 
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•HR 2454 EH

1 person is a covered entity, the person shall be allowed to 

2 hold sufficient regulated allowances to meet its compliance 

3 obligations. 

4 ‘‘(e) RELATION TO STATE LAW.—Nothing in this 

5 section shall preclude, diminish or qualify any authority 

6 of a State or political subdivision thereof to adopt or en7 force any unfair competition, antitrust, consumer protec8 tion, securities, commodities or any other law or regula9 tion, except that no such State law or regulation may re10 lieve any person of any requirement otherwise applicable 

11 under this section. 

12 ‘‘(f) MARKET REPORTS.— 

13 ‘‘(1) COLLECTION AND ANALYSIS OF INFORMA14 TION.—The Commission, in conjunction with the 

15 Commodity Futures Trading Commission, shall, on 

16 a continuous basis, analyze the following information 

17 on the functioning of the markets for regulated in18 struments established under this part: 

19 ‘‘(A) The status of, and trends in, the 

20 markets, including prices, trading volumes, 

21 transaction types, and trading channels and 

22 mechanisms. 

23 ‘‘(B) Spikes, collapses, and volatility in 

24 prices of regulated instruments, and the causes 

25 therefor. 
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•HR 2454 EH

1 ‘‘(C) The relationship between the market 

2 for regulated allowances and allowance deriva3 tives, and the spot and futures markets for en4 ergy commodities, including electricity. 

5 ‘‘(D) The economic effects of the markets, 

6 including to macro- and micro-economic effects 

7 of unexpected significant increases and de8 creases in the price of regulated instruments. 

9 ‘‘(E) Any changes in the roles, activities, 

10 or strategies of various market participants. 

11 ‘‘(F) Regional, industrial, and consumer 

12 responses to the markets, and energy invest13 ment responses to the markets. 

14 ‘‘(G) Any other issue related to the mar15 kets that the Commission, and the Commodity 

16 Futures Trading Commission deem appropriate. 

17 ‘‘(2) ANNUAL REPORTS TO THE CONGRESS.— 

18 Not later than 1 month after the end of each cal19 endar year, the Commission, in conjunction with the 

20 Commodity Futures Trading Commission, shall sub21 mit to the President, the Committee on Agriculture 

22 and Committee on Energy and Commerce of the 

23 House of Representatives, and the Committee on 

24 Agriculture, Nutrition, and Forestry and Committee 

25 on Energy and Natural Resources of the Senate, 
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•HR 2454 EH

1 and make available to the public, a report on the 

2 matters described in paragraph (1) with respect to 

3 the year, including recommendations for any admin4 istrative or statutory measures the Commission and 

5 the Commodity Futures Trading Commission con6 sider necessary to address any threats to the trans7 parency, fairness, or integrity of the markets in reg8 ulated instruments. 

9 ‘‘SEC. 402. APPLICABILITY OF PART III PROVISIONS. 

10 ‘‘(a) SECTIONS 301, 304, AND 306.—Sections 301, 

11 304, and 306 shall not apply to this part. 

12 ‘‘(b) SECTION 315.—In applying section 315(a) to 

13 this part, the words ‘person or entity’ shall be substituted 

14 for the words ‘licensee or public utility’. In applying sec15 tion 315(b) to this part, the words ‘an entity’ shall be sub16 stituted for the words ‘a licensee or public utility’ and the 

17 words ‘such entity’ shall be substituted for the words ‘such 

18 licensee or public utility’. 

19 ‘‘(c) SECTION 316.—Section 316(a) shall not apply 

20 to section 401(d).’’. 

21 (b) CRIMINAL PROHIBITION AGAINST FRAUD AND

22 FALSE OR MISLEADING STATEMENTS.— 

23 (1) Chapter 47 of title 18, United States Code, 

24 is amended by adding at the end the following: 
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1 ‘‘§ 1041. Fraud and false statements in connection 

2 with regulated allowances 

3 ‘‘Whoever in connection with a transaction involving 

4 a regulated allowance (as defined in section 401(a) of the 

5 Federal Power Act, as added by section 341 of the Amer6 ican Clean Energy and Security Act of 2009), know7 ingly— 

8 ‘‘(1) makes or uses a materially false or mis9 leading statement, writing, representation, scheme, 

10 or device; or 

11 ‘‘(2) falsifies, conceals, or covers up by any 

12 trick, scheme, or device any material fact, 

13 shall be fined not more than $5,000,000 (or $25,000,000 

14 in the case of an organization) or imprisoned not more 

15 than 20 years, or both.’’. 

16 (2) The table of sections at the beginning of 

17 chapter 47 of title 18, United States Code, is 

18 amended by adding at the end the following new 

19 item: 

‘‘1041. Fraud and false statements in connection with regulated allowances.’’. 

20 SEC. 342. CARBON DERIVATIVE MARKETS. 

21 (a) Section 1a(14) of the Commodity Exchange Act 

22 (7 U.S.C. 1a(14)) is amended by striking ‘‘or an agricul23 tural commodity’’ and inserting ‘‘, an agricultural com24 modity, or any emission allowance, compensatory allow25 ance, offset credit, or Federal renewable electricity credit 
1046 

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1 established or issued under the American Clean Energy 

2 and Security Act of 2009’’. 

3 (b) Section 4(c) of such Act (7 U.S.C. 6(c)) is amend4 ed by adding at the end the following: 

5 ‘‘(6) This subsection does not apply to any 

6 agreement, contract, or transaction for any emission 

7 allowance, compensatory allowance, offset credit, or 

8 Federal renewable electricity credit established or 

9 issued under the American Clean Energy and Secu10 rity Act of 2009.’’. 

11 Subtitle E—Additional Market 

12 Assurance 

13 SEC. 351. REGULATION OF CERTAIN TRANSACTIONS IN DE14 RIVATIVES INVOLVING ENERGY COMMOD15 ITIES. 

16 (a) ENERGY COMMODITY DEFINED.—Section 1a of 

17 the Commodity Exchange Act (7 U.S.C. 1a) is amended— 

18 (1) in paragraph (14), by inserting ‘‘, an energy 

19 commodity,’’ after ‘‘excluded commodity’’; 

20 (2) by redesignating paragraphs (13) through 

21 (21) and paragraphs (22) through (34) as para22 graphs (14) through (22) and paragraphs (24) 

23 through (36), respectively; 

24 (3) by inserting after paragraph (12) the fol25 lowing: 
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1 ‘‘(13) ENERGY COMMODITY.—The term ‘energy 

2 commodity’ means— 

3 ‘‘(A) coal; 

4 ‘‘(B) crude oil, gasoline, diesel fuel, jet 

5 fuel, heating oil, and propane; 

6 ‘‘(C) electricity (excluding financial trans7 mission rights which are subject to regulation 

8 and oversight by the Federal Energy Regu9 latory Commission); 

10 ‘‘(D) natural gas; and 

11 ‘‘(E) any other substance (other than an 

12 excluded commodity, a metal, or an agricultural 

13 commodity) that is used as a source of energy, 

14 as the Commission, in its discretion, deems ap15 propriate.’’; and 

16 (4) by inserting after paragraph (22) (as so re17 designated by paragraph (2) of this subsection) the 

18 following: 

19 ‘‘(23) INCLUDED ENERGY TRANSACTION.—The 

20 term ‘included energy transaction’ means a contract, 

21 agreement, or transaction in an energy commodity 

22 for future delivery that provides for a delivery point 

23 of the energy commodity in the United States or a 

24 territory or possession of the United States, or that 
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1 is offered or transacted on or through a computer 

2 terminal located in the United States.’’. 

3 (b) EXTENSION OF REGULATORY AUTHORITY TO

4 SWAPS INVOLVING ENERGY TRANSACTIONS.—Section 

5 2(g) of such Act (7 U.S.C. 2(g)) is amended by inserting 

6 ‘‘or an energy commodity’’ after ‘‘agricultural com7 modity’’. 

8 (c) ELIMINATION OF EXEMPTION FOR OVER-THE9 COUNTER SWAPS INVOLVING ENERGY COMMODITIES.— 

10 Section 2(h)(1) of such Act (7 U.S.C. 2(h)(1)) is amended 

11 by inserting ‘‘(other than an energy commodity)’’ after 

12 ‘‘exempt commodity’’. 

13 (d) EXTENSION OF REGULATORY AUTHORITY TO IN14 CLUDED ENERGY TRANSACTIONS ON FOREIGN BOARDS

15 OF TRADE.—Section 4 of such Act (7 U.S.C. 6) is amend16 ed— 

17 (1) in subsection (a), by inserting ‘‘, and which 

18 is not an included energy transaction’’ after ‘‘terri19 tories or possessions’’ the 2nd place it appears; and 

20 (2) in subsection (b), by adding at the end the 

21 following: ‘‘The preceding sentence shall not apply 

22 with respect to included energy transactions.’’. 

23 (e) LIMITATION OF GENERAL EXEMPTIVE AUTHOR24 ITY OF THE CFTC WITH RESPECT TO INCLUDED EN25 ERGY TRANSACTIONS.— 
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1 (1) IN GENERAL.—Section 4(c) of such Act (7 

2 U.S.C. 6(c)) is amended by adding at the end the 

3 following: 

4 ‘‘(6) The Commission may not exempt any included 

5 energy transaction from the requirements of subsection 

6 (a), unless the Commission provides 60 days advance no7 tice to the Congress and the Position Limit Energy Advi8 sory Group and solicits public comment about the exemp9 tion request and any proposed Commission action.’’. 

10 (2) NULLIFICATION OF NO-ACTION LETTER EX11 EMPTIONS TO CERTAIN REQUIREMENTS APPLICABLE

12 TO INCLUDED ENERGY TRANSACTIONS.—Beginning 

13 180 days after the date of the enactment of this Act, 

14 any exemption provided by the Commodity Futures 

15 Trading Commission that has allowed included en16 ergy transactions (as defined in section 1a(13) of 

17 the Commodity Exchange Act) to be conducted with18 out regard to the requirements of section 4(a) of 

19 such Act shall be null and void. 

20 (f) REQUIREMENT TO ESTABLISH UNIFORM SPECU21 LATIVE POSITION LIMITS FOR ENERGY TRANSACTIONS.— 

22 (1) IN GENERAL.—Section 4a(a) of such Act (7 

23 U.S.C. 6a(a)) is amended— 

24 (A) by inserting ‘‘(1)’’ after ‘‘(a)’’; 
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1 (B) by inserting after the 2nd sentence the 

2 following: ‘‘With respect to energy transactions, 

3 the Commission shall fix limits on the aggre4 gate number of positions which may be held by 

5 any person for each month across all markets 

6 subject to the jurisdiction of the Commission.’’; 

7 (C) in the 4th sentence by inserting ‘‘, con8 sistent with the 3rd sentence,’’ after ‘‘Commis9 sion’’; and 

10 (D) by adding after and below the end the 

11 following: 

12 ‘‘(2)(A) Not later than 60 days after the date of the 

13 enactment of this paragraph, the Commission shall con14 vene a Position Limit Energy Advisory Group consisting 

15 of representatives from— 

16 ‘‘(i) 7 predominantly commercial short hedgers 

17 of the actual energy commodity for future delivery; 

18 ‘‘(ii) 7 predominantly commercial long hedgers 

19 of the actual energy commodity for future delivery; 

20 ‘‘(iii) 4 non-commercial participants in markets 

21 for energy commodities for future delivery; and 

22 ‘‘(iv) each designated contract market or de23 rivatives transaction execution facility upon which a 

24 contract in the energy commodity for future delivery 

25 is traded, and each electronic trading facility that 
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1 has a significant price discovery contract in the en2 ergy commodity. 

3 ‘‘(B) Not later than 60 days after the date on which 

4 the advisory group is convened under subparagraph (A), 

5 and annually thereafter, the advisory group shall submit 

6 to the Commission advisory recommendations regarding 

7 the position limits to be established in paragraph (1). 

8 ‘‘(C) The Commission shall have exclusive authority 

9 to grant exemptions for bona fide hedging transactions 

10 and positions from position limits imposed under this Act 

11 on energy transactions.’’. 

12 (2) CONFORMING AMENDMENTS.— 

13 (A) SIGNIFICANT PRICE DISCOVERY CON14 TRACTS.—Section 2(h)(7) of such Act (7 U.S.C. 

15 2(h)(7)) is amended— 

16 (i) in subparagraph (A)— 

17 (I) by inserting ‘‘of this para18 graph and section 4a(a)’’ after ‘‘(B) 

19 through (D)’’; and 

20 (II) by inserting ‘‘of this para21 graph’’ before the period; and 

22 (ii) in subparagraph (C)(ii)(IV)— 

23 (I) in the heading, by striking 

24 ‘‘LIMITATIONS OR’’; and 
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1 (II) by striking ‘‘position limita2 tions or’’. 

3 (B) CONTRACTS TRADED ON OR THROUGH

4 DESIGNATED CONTRACT MARKETS.—Section 

5 5(d)(5) of such Act (7 U.S.C. 7(d)(5)) is 

6 amended— 

7 (i) in the heading by striking ‘‘LIMI8 TATIONS OR’’; and 

9 (ii) by striking ‘‘position limitations 

10 or’’. 

11 (C) CONTRACTS TRADED ON OR THROUGH

12 DERIVATIVES TRANSACTION EXECUTION FACILI13 TIES.—Section 5a(d)(4) of such Act (7 U.S.C. 

14 7a(d)(4)) is amended— 

15 (i) in the heading by striking ‘‘LIMI16 TATIONS OR’’; and 

17 (ii) by striking ‘‘position limits or’’. 

18 (g) ELIMINATION OF THE SWAPS LOOPHOLE.—Sec19 tion 4a(c) of such Act (7 U.S.C. 6a(c)) is amended— 

20 (1) by inserting ‘‘(1)’’ after ‘‘(c)’’; and 

21 (2) by adding after and below the end the fol22 lowing: 

23 ‘‘(2) For the purposes of contracts of sale for future 

24 delivery and options on such contracts or commodities, the 

25 Commission shall define what constitutes a bona fide 
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1 hedging transaction or position as a transaction or posi2 tion that— 

3 ‘‘(A)(i) represents a substitute for transactions 

4 made or to be made or positions taken or to be 

5 taken at a later time in a physical marketing chan6 nel; 

7 ‘‘(ii) is economically appropriate to the reduc8 tion of risks in the conduct and management of a 

9 commercial enterprise; and 

10 ‘‘(iii) arises from the potential change in the 

11 value of— 

12 ‘‘(I) assets that a person owns, produces, 

13 manufactures, processes, or merchandises or 

14 anticipates owning, producing, manufacturing, 

15 processing, or merchandising; 

16 ‘‘(II) liabilities that a person owns or an17 ticipates incurring; or 

18 ‘‘(III) services that a person provides, pur19 chases, or anticipates providing or purchasing; 

20 or 

21 ‘‘(B) reduces risks attendant to a position re22 sulting from a transaction that— 

23 ‘‘(i) was executed pursuant to subsection 

24 (d), (g), (h)(1), or (h)(2) of section 2, or an ex-
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1 emption issued by the Commission by rule, reg2 ulation or order; and 

3 ‘‘(ii) was executed opposite a counterparty 

4 for which the transaction would qualify as a 

5 bona fide hedging transaction pursuant to para6 graph (2)(A) of this subsection.’’. 

7 (h) DETAILED REPORTING AND DISAGGREGATION OF

8 MARKET DATA.—Section 4 of such Act (7 U.S.C. 6) is 

9 amended by adding at the end the following: 

10 ‘‘(e) DETAILED REPORTING AND DISAGGREGATION

11 OF MARKET DATA.— 

12 ‘‘(1) INDEX TRADERS AND SWAP DEALERS RE13 PORTING.—The Commission shall issue a proposed 

14 rule defining and classifying index traders and swap 

15 dealers (as those terms are defined by the Commis16 sion) for purposes of data reporting requirements 

17 and setting routine detailed reporting requirements 

18 for any positions of such entities in contracts traded 

19 on designated contract markets, over-the-counter 

20 markets, derivatives transaction execution facilities, 

21 foreign boards of trade subject to section 4(f), and 

22 electronic trading facilities with respect to signifi23 cant price discovery contracts not later than 120 

24 days after the date of the enactment of this sub-
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1 section, and issue a final rule within 180 days after 

2 such date of enactment. 

3 ‘‘(2) DISAGGREGATION OF INDEX FUNDS AND

4 OTHER DATA IN MARKETS.—Subject to section 8 

5 and beginning within 60 days of the issuance of the 

6 final rule required by paragraph (1), the Commis7 sion shall disaggregate and make public weekly— 

8 ‘‘(A) the number of positions and total no9 tional value of index funds and other passive, 

10 long-only and short-only positions (as defined 

11 by the Commission) in all markets to the extent 

12 such information is available; and 

13 ‘‘(B) data on speculative positions relative 

14 to bona fide physical hedgers in those markets 

15 to the extent such information is available. 

16 ‘‘(3) DISCLOSURE OF IDENTITY OF HOLDERS

17 OF POSITIONS IN INDEXES IN EXCESS OF POSITION

18 LIMITS.—The Commission shall include in its weekly 

19 Commitment of Trader reports the identity of each 

20 person who holds a position in an index in excess of 

21 a limit imposed under section 4i.’’. 

22 (i) AUTHORITY TO SET LIMITS TO PREVENT EXCES23 SIVE SPECULATION IN INDEXES.— 
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1 (1) IN GENERAL.—Section 4a of such Act (7 

2 U.S.C. 6a) is amended by adding at the end the fol3 lowing: 

4 ‘‘(f) The provisions of this section shall apply to the 

5 amounts of trading which may be done or positions which 

6 may be held by any person under contracts of sale of an 

7 index for future delivery on or subject to the rules of any 

8 contract market, derivatives transaction execution facility, 

9 or over-the-counter market, or on an electronic trading fa10 cility with respect to a significant price discovery contract, 

11 in the same manner in which this section applies to con12 tracts of sale of a commodity for future delivery.’’. 

13 (2) REGULATIONS.—The Commodity Futures 

14 Trading Commission shall issue regulations under 

15 section 4a(f) of the Commodity Exchange Act within 

16 180 days after the date of the enactment of this Act. 

17 SEC. 352. NO EFFECT ON AUTHORITY OF THE FEDERAL EN18 ERGY REGULATORY COMMISSION. 

19 Section 2 of the Commodity Exchange Act (7 U.S.C. 

20 2) is amended by adding at the end the following: 

21 ‘‘(j) This Act shall not be interpreted to affect the 

22 jurisdiction of the Federal Energy Regulatory Commission 

23 with respect to the authority of the Federal Energy Regu24 latory Commission under the Federal Power Act (16 

25 U.S.C. 791a et seq.), the Natural Gas Act (15 U.S.C. 717 
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1 et seq.), or other law to obtain information, carry out en2 forcement actions, or otherwise carry out the responsibil3 ities of the Federal Energy Regulatory Commission.’’. 

4 SEC. 353. INSPECTOR GENERAL OF THE COMMODITY FU5 TURES TRADING COMMISSION. 

6 (a) ELEVATION OF OFFICE.— 

7 (1) INCLUSION OF CFTC IN DEFINITION OF ES8 TABLISHMENT.— 

9 (A) Section 12(1) of the Inspector General 

10 Act of 1978 (5 U.S.C. App.) is amended by 

11 striking ‘‘or the Federal Cochairpersons of the 

12 Commissions established under section 15301 

13 of title 40, United States Code;’’ and inserting 

14 ‘‘the Federal Cochairpersons of the Commis15 sions established under section 15301 of title 

16 40, United States Code; or the Chairman of the 

17 Commodity Futures Trading Commission;’’. 

18 (B) Section 12(2) of the Inspector General 

19 Act of 1978 (5 U.S.C. App.) is amended by 

20 striking ‘‘or the Commissions established under 

21 section 15301 of title 40, United States Code,’’ 

22 and inserting ‘‘the Commissions established 

23 under section 15301 of title 40, United States 

24 Code, or the Commodity Futures Trading Com25 mission,’’. 
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1 (2) EXCLUSION OF CFTC FROM DEFINITION OF

2 DESIGNATED FEDERAL ENTITY.—Section 8G(a)(2) 

3 of the Inspector General Act of 1978 (5 U.S.C. 

4 App.) is amended by striking ‘‘the Commodity Fu5 tures Trading Commission,’’. 

6 (b) PROVISIONS RELATING TO PAY AND PERSONNEL

7 AUTHORITY.— 

8 (1) PROVISION RELATING TO THE POSITION OF

9 INSPECTOR GENERAL OF THE CFTC.—In the case of 

10 the Inspector General of the Commodities Futures 

11 Trading Commission, subsections (b) and (c) of sec12 tion 4 of the Inspector General Reform Act of 2008 

13 (Public Law 110–409) shall apply in the same man14 ner as if the Commission was a designated Federal 

15 entity under section 8G. The Inspector General of 

16 the Commodities Futures Trading Commission shall 

17 not be subject to section 3(e) of such Act. 

18 (2) PROVISION RELATING TO OTHER PER19 SONNEL.—Notwithstanding paragraphs (7) and (8) 

20 of section 6(a) of the Inspector General Act of 1978 

21 (5 U.S.C. App.), the Inspector General of the Com22 modities Futures Trading Commission may select, 

23 appoint, and employ such officers and employees as 

24 may be necessary for carrying out the functions, 

25 powers, and duties of the Office of Inspector General 
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1 and to obtain the temporary or intermittent services 

2 of experts or consultants or an organization of ex3 perts or consultants, subject to the applicable laws 

4 and regulations that govern such selections, appoint5 ments, and employment, and the obtaining of such 

6 services, within the Commodities Futures Trading 

7 Commission. 

8 (c) EFFECTIVE DATE; TRANSITION RULE.— 

9 (1) EFFECTIVE DATE.—The amendments made 

10 by this section shall take effect 30 days after the 

11 date of the enactment of this Act. 

12 (2) TRANSITION RULE.—An individual serving 

13 as Inspector General of the Commodity Futures 

14 Trading Commission on the effective date of this 

15 section pursuant to an appointment made under sec16 tion 8G of the Inspector General Act of 1978 (5 

17 U.S.C. App.)— 

18 (A) may continue so serving until the 

19 President makes an appointment under section 

20 3(a) of such Act consistent with the amend21 ments made by this section; and 

22 (B) shall, while serving under subpara23 graph (A), remain subject to the provisions of 

24 section 8G of such Act which apply with respect 
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1 to the Commodity Futures Trading Commis2 sion. 

3 SEC. 354. SETTLEMENT AND CLEARING THROUGH REG4 ISTERED DERIVATIVES CLEARING ORGANIZA5 TIONS. 

6 (a) IN GENERAL.— 

7 (1) APPLICATION TO EXCLUDED DERIVATIVE

8 TRANSACTIONS.— 

9 (A) Section 2(d)(1) of the Commodity Ex10 change Act (7 U.S.C. 2(d)(1)) is amended— 

11 (i) by striking ‘‘and’’ at the end of 

12 subparagraph (A); 

13 (ii) by striking the period at the end 

14 of subparagraph (B) and inserting ‘‘; 

15 and’’; and 

16 (iii) by adding at the end the fol17 lowing: 

18 ‘‘(C) except as provided in section 4(f), the 

19 agreement, contract, or transaction is settled 

20 and cleared through a derivatives clearing orga21 nization registered with the Commission.’’. 

22 (B) Section 2(d)(2) of such Act (7 U.S.C. 

23 2(d)(2)) is amended— 

24 (i) by striking ‘‘and’’ at the end of 

25 subparagraph (B); 
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1 (ii) by striking the period at the end 

2 of subparagraph (C) and inserting ‘‘; and’’; 

3 and 

4 (iii) by adding at the end the fol5 lowing: 

6 ‘‘(D) except as provided in section 4(f), the 

7 agreement, contract, or transaction is settled 

8 and cleared through a derivatives clearing orga9 nization registered with the Commission.’’. 

10 (2) APPLICATION TO CERTAIN SWAP TRANS11 ACTIONS.—Section 2(g) of such Act (7 U.S.C. 2(g)) 

12 is amended— 

13 (A) by striking ‘‘and’’ at the end of para14 graph (2); 

15 (B) by striking the period at the end of 

16 paragraph (3) and inserting ‘‘; and’’; and 

17 (C) by adding at the end the following: 

18 ‘‘(4) except as provided in section 4(f), settled 

19 and cleared through a derivatives clearing organiza20 tion registered with the Commission.’’. 

21 (3) APPLICATION TO CERTAIN TRANSACTIONS

22 IN EXEMPT COMMODITIES.— 

23 (A) Section 2(h)(1) of such Act ( 7 U.S.C. 

24 2(h)(1)) is amended— 
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1 (i) by striking ‘‘and’’ at the end of 

2 subparagraph (A); 

3 (ii) by striking the period at the end 

4 of subparagraph (B) and inserting ‘‘; 

5 and’’; and 

6 (iii) by adding at the end the fol7 lowing: 

8 ‘‘(C) except as provided in section 4(f), is 

9 settled and cleared through a derivatives clear10 ing organization registered with the Commis11 sion.’’. 

12 (B) Section 2(h)(3) of such Act (7 U.S.C. 

13 2(h)(3)) is amended— 

14 (i) by striking ‘‘and’’ at the end of 

15 subparagraph (A); 

16 (ii) by striking the period at the end 

17 of subparagraph (B) and inserting ‘‘; 

18 and’’; and 

19 (iii) by adding at the end the fol20 lowing: 

21 ‘‘(C) except as provided in section 4(f), set22 tled and cleared through a derivatives clearing 

23 organization registered with the Commission.’’. 

24 (4) GENERAL EXEMPTIVE AUTHORITY.—Sec25 tion 4(c)(1) of such Act (7 U.S.C. 6(c)(1)) is 
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1 amended by inserting ‘‘the agreement, contract, or 

2 transaction, except as provided in section 4(h), will 

3 be settled and cleared through a derivatives clearing 

4 organization registered with the Commission and’’ 

5 before ‘‘the Commission determines’’. 

6 (5) CONFORMING AMENDMENT RELATING TO

7 SIGNIFICANT PRICE DISCOVERY CONTRACTS.—Sec8 tion 2(h)(7)(D) of such Act (7 U.S.C. 2(h)(7)(D)) is 

9 amended by striking the designation and heading for 

10 the subparagraph and all that follows through ‘‘As 

11 part of’’ and inserting the following: 

12 ‘‘(D) REVIEW OF IMPLEMENTATION.—As 

13 part of’’. 

14 (b) ALTERNATIVES TO CLEARING THROUGH DES15 IGNATED CLEARING ORGANIZATIONS.—Section 4 of such 

16 Act (7 U.S.C. 6), as amended by section 351(h) of this 

17 Act, is amended by adding at the end the following: 

18 ‘‘(f) ALTERNATIVES TO CLEARING THROUGH DES19 IGNATED CLEARING ORGANIZATIONS.— 

20 ‘‘(1) SETTLEMENT AND CLEARING THROUGH

21 CERTAIN OTHER REGULATED ENTITIES.—An agree22 ment, contract, or transaction, or class thereof, re23 lating to an excluded commodity, that would other24 wise be required to be settled and cleared by section 

25 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or 
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1 2(h)(3)(C) of this Act, or subsection (c)(1) of this 

2 section may be settled and cleared through an entity 

3 listed in subsections (a) or (b) of section 409 of the 

4 Federal Deposit Insurance Corporation Improvement 

5 Act of 1991. 

6 ‘‘(2) WAIVER OF CLEARING REQUIREMENT.— 

7 ‘‘(A) The Commission, in its discretion, 

8 may exempt an agreement, contract, or trans9 action, or class thereof, that would otherwise be 

10 required by section 2(d)(1)(C), 2(d)(2)(D), 

11 2(g)(4), 2(h)(1)(C), or 2(h)(3)(C) of this Act, 

12 or subsection (c)(1) of this section to be settled 

13 and cleared through a derivatives clearing orga14 nization registered with the Commission from 

15 such requirement. 

16 ‘‘(B) In granting exemptions pursuant to 

17 subparagraph (A), the Commission shall consult 

18 with the Securities and Exchange Commission 

19 and the Board of Governors of the Federal Re20 serve System regarding exemptions that relate 

21 to excluded commodities or entities for which 

22 the Securities Exchange Commission or the 

23 Board of Governors of the Federal Reserve Sys24 tem serve as the primary regulator. 
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1 ‘‘(C) Before granting an exemption pursu2 ant to subparagraph (A), the Commission shall 

3 find that the agreement, contract, or trans4 action, or class thereof— 

5 ‘‘(i) is highly customized as to its ma6 terial terms and conditions; 

7 ‘‘(ii) is transacted infrequently; 

8 ‘‘(iii) does not serve a significant 

9 price-discovery function in the market10 place; and 

11 ‘‘(iv) is being entered into by parties 

12 who can demonstrate the financial integ13 rity of the agreement, contract, or trans14 action and their own financial integrity, as 

15 such terms and standards are determined 

16 by the Commission. The standards may in17 clude, with respect to any federally regu18 lated financial entity for which net capital 

19 requirements are imposed, a net capital re20 quirement associated with any agreement, 

21 contract, or transaction subject to an ex22 emption from the clearing requirement 

23 that is higher than the net capital require24 ment that would be associated with such a 

25 transaction were it cleared. 
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1 ‘‘(D) Any agreement, contract, or trans2 action, or class thereof, which is exempted pur3 suant to subparagraph (A) shall be reported to 

4 the Commission in a manner designated by the 

5 Commission, or to such other entity the Com6 mission deems appropriate. 

7 ‘‘(E) The Commission, the Securities and 

8 Exchange Commission and the Board of Gov9 ernors of the Federal Reserve System shall 

10 enter into a memorandum of understanding by 

11 which the information reported to the Commis12 sion pursuant to subparagraph (D) with regard 

13 to excluded commodities or entities for which 

14 the Securities Exchange Commission or the 

15 Board of Governors of the Federal Reserve Sys16 tem serve as the primary regulator may be pro17 vided to the other agencies. 

18 ‘‘(g) SPOT AND FORWARD EXCLUSION.—The settle19 ment and clearing requirements of section 2(d)(1)(C), 

20 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 2(h)(3)(C), or 4(c)(1) 

21 shall not apply to an agreement, contract, or transaction 

22 of any cash commodity for immediate or deferred ship23 ment or delivery, as defined by the Commission.’’. 

24 (c) ADDITIONAL REQUIREMENTS APPLICABLE TO

25 APPLICANTS FOR REGISTRATION AS A DERIVATIVE
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1 CLEARING ORGANIZATION.—Section 5b(c)(2) of such Act 

2 (7 U.S.C. 7a–1(c)(2)) is amended by adding at the end 

3 the following: 

4 ‘‘(O) DISCLOSURE OF GENERAL INFORMA5 TION.—The applicant shall disclose publicly and 

6 to the Commission information concerning— 

7 ‘‘(i) the terms and conditions of con8 tracts, agreements, and transactions 

9 cleared and settled by the applicant; 

10 ‘‘(ii) the conventions, mechanisms, 

11 and practices applicable to the contracts, 

12 agreements, and transactions; 

13 ‘‘(iii) the margin-setting methodology 

14 and the size and composition of the finan15 cial resource package of the applicant; and 

16 ‘‘(iv) other information relevant to 

17 participation in the settlement and clearing 

18 activities of the applicant. 

19 ‘‘(P) DAILY PUBLICATION OF TRADING IN20 FORMATION.—The applicant shall make public 

21 daily information on settlement prices, volume, 

22 and open interest for contracts settled or 

23 cleared pursuant to the requirements of section 

24 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 

25 2(h)(3)(C) or 4(c)(1) of this Act by the appli-
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1 cant if the Commission determines that the 

2 contracts perform a significant price discovery 

3 function for transactions in the cash market for 

4 the commodity underlying the contracts. 

5 ‘‘(Q) FITNESS STANDARDS.—The applicant 

6 shall establish and enforce appropriate fitness 

7 standards for directors, members of any dis8 ciplinary committee, and members of the appli9 cant, and any other persons with direct access 

10 to the settlement or clearing activities of the 

11 applicant, including any parties affiliated with 

12 any of the persons described in this subpara13 graph.’’. 

14 (d) AMENDMENTS.— 

15 (1) Section 409 of the Federal Deposit Insur16 ance Corporation Improvement Act of 1991 (12 

17 U.S.C. 4422) is amended by adding at the end the 

18 following: 

19 ‘‘(c) CLEARING REQUIREMENT.—A multilateral 

20 clearing organization described in subsections (a) or (b) 

21 of this section shall comply with requirements similar to 

22 the requirements of sections 5b and 5c of the Commodity 

23 Exchange Act.’’. 

24 (2) Section 407 of the Legal Certainty for 

25 Bank Products Act of 2000 (7 U.S.C. 27e) is 
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1 amended by inserting ‘‘and the settlement and clear2 ing requirements of sections 2(d)(1)(C), 2(d)(2)(D), 

3 2(g)(4), 2(h)(1)(C), 2(h)(3)(C), and 4(c)(1) of such 

4 Act’’ after ‘‘the clearing of covered swap agree5 ments’’. 

6 (e) EFFECTIVE DATE.—The amendments made by 

7 this section shall take effect 150 days after the date of 

8 the enactment of this Act. 

9 (f) TRANSITION RULE.—Any agreement, contract, or 

10 transaction entered into before the date of the enactment 

11 of this Act or within 150 days after such date of enact12 ment, in reliance on subsection (d), (g), (h)(1), or (h)(3) 

13 of section 2 of the Commodity Exchange Act or any other 

14 exemption issued by the Commission Futures Trading 

15 Commission by rule, regulation, or order shall, within 90 

16 days after such date of enactment, unless settled and 

17 cleared through an entity registered with the Commission 

18 as a derivatives clearing organization or another clearing 

19 entity pursuant to section 4(f) of such Act, be reported 

20 to the Commission in a manner designated by the Com21 mission, or to such other entity as the Commission deems 

22 appropriate. 
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1 SEC. 355. LIMITATION ON ELIGIBILITY TO PURCHASE A 

2 CREDIT DEFAULT SWAP. 

3 (a) IN GENERAL.—Section 4c of the Commodity Ex4 change Act (7 U.S.C. 6c) is amended by adding at the 

5 end the following: 

6 ‘‘(h) LIMITATION ON ELIGIBILITY TO PURCHASE A

7 CREDIT DEFAULT SWAP.—It shall be unlawful for any 

8 person to enter into a credit default swap unless the per9 son— 

10 ‘‘(1) owns a credit instrument which is insured 

11 by the credit default swap; 

12 ‘‘(2) would experience financial loss if an event 

13 that is the subject of the credit default swap occurs 

14 with respect to the credit instrument; and 

15 ‘‘(3) meets such minimum capital adequacy 

16 standards as may be established by the Commission, 

17 in consultation with the Board of Governors of the 

18 Federal Reserve System, or such more stringent 

19 minimum capital adequacy standards as may be es20 tablished by or under the law of any State in which 

21 the swap is originated or entered into, or in which 

22 possession of the contract involved takes place.’’. 

23 (b) ELIMINATION OF PREEMPTION OF STATE

24 BUCKETING LAWS REGARDING NAKED CREDIT DEFAULT

25 SWAPS.—Section 12(e)(2)(B) of such Act (7 U.S.C. 

26 16(e)(2)(B)) is amended by inserting ‘‘(other than a credit 
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1 default swap in which the purchaser of the swap would 

2 not experience financial loss if an event that is the subject 

3 of the swap occurred)’’ before ‘‘that is excluded’’. 

4 (c) DEFINITION OF CREDIT DEFAULT SWAP.—Sec5 tion 1a of such Act (7 U.S.C. 1a), as amended by section 

6 351(a) of this Act, is amended by adding at the end the 

7 following: 

8 ‘‘(37) CREDIT DEFAULT SWAP.—The term 

9 ‘credit default swap’ means a contract which insures 

10 a party to the contract against the risk that an enti11 ty may experience a loss of value as a result of an 

12 event specified in the contract, such as a default or 

13 credit downgrade. A credit default swap that is trad14 ed on or cleared by a registered entity shall be ex15 cluded from the definition of a security as defined in 

16 this Act and in section 2(a)(1) of the Securities Act 

17 of 1933 or section 3(a)(10) of the Securities Ex18 change Act of 1934, except it shall be deemed a se19 curity solely for purpose of enforcing prohibitions 

20 against insider trading in sections 10 and 16 of the 

21 Securities Exchange Act of 1934.’’. 

22 (d) EFFECTIVE DATE.—The amendments made by 

23 this section shall be effective for credit default swaps (as 

24 defined in section 1a(37) of the Commodity Exchange Act) 
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1 entered into after 60 days after the date of the enactment 

2 of this section. 

3 SEC. 356. TRANSACTION FEES. 

4 (a) IN GENERAL.—Section 12 of the Commodity Ex5 change Act (7 U.S.C. 16) is amended by redesignating 

6 subsections (e), (f), and (g) as subsections (f), (g), and 

7 (h), respectively, and inserting after subsection (d) the fol8 lowing: 

9 ‘‘(e) CLEARING FEES.— 

10 ‘‘(1) IN GENERAL.—The Commission shall, in 

11 accordance with this subsection, charge and collect 

12 from each registered clearing organization, and each 

13 such organization shall pay to the Commission, 

14 transaction fees at a rate calculated to recover the 

15 costs to the Federal Government of the supervision 

16 and regulation of futures markets, except those di17 rectly related to enforcement. 

18 ‘‘(2) FEES ASSESSED PER SIDE OF CLEARED

19 CONTRACTS.— 

20 ‘‘(A) IN GENERAL.—The Commission shall 

21 determine the fee rate referred to in paragraph 

22 (1), and shall apply the fee rate per side of any 

23 transaction cleared. 

24 ‘‘(B) AUTHORITY TO DELEGATE.— The 

25 Commission may determine the procedures by 
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1 which the fee rate is to be applied on the trans2 actions subject to the fee, or delegate the au3 thority to make the determination to any appro4 priate derivatives clearing organization. 

5 ‘‘(3) EXEMPTIONS.—The Commission may not 

6 impose a fee under paragraph (1) on— 

7 ‘‘(A) a class of contracts or transactions if 

8 the Commission finds that it is in the public in9 terest to exempt the class from the fee; or 

10 ‘‘(B) a contract or transaction cleared by 

11 a registered derivatives clearing organization 

12 that is— 

13 ‘‘(i) subject to fees under section 31 

14 of the Securities Exchange Act of 1934; or 

15 ‘‘(ii) a security as defined in the Secu16 rities Act of 1933 or the Securities Ex17 change Act of 1934. 

18 ‘‘(4) DATES FOR PAYMENT OF FEES.—The fees 

19 imposed under paragraph (1) shall be paid on or be20 fore— 

21 ‘‘(A) March 15 of each year, with respect 

22 to transactions occurring on or after the pre23 ceding September 1 and on or before the pre24 ceding December 31; and 
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1 ‘‘(B) September 15 of each year, with re2 spect to transactions occurring on or after the 

3 preceding January 1 and on or before the pre4 ceding August 31. 

5 ‘‘(5) ANNUAL ADJUSTMENT OF FEE RATES.— 

6 ‘‘(A) IN GENERAL.—Not later than April 

7 30 of each fiscal year , the Commission shall, 

8 by order, adjust each fee rate determined under 

9 paragraph (2) for the fiscal year to a uniform 

10 adjusted rate that, when applied to the esti11 mated aggregate number of cleared sides of 

12 transactions for the fiscal year, is reasonably 

13 likely to produce aggregate fee receipts under 

14 this subsection for the fiscal year equal to the 

15 target offsetting receipt amount for the fiscal 

16 year. 

17 ‘‘(B) DEFINITIONS.—In subparagraph (A): 

18 ‘‘(i) ESTIMATED AGGREGATE NUMBER

19 OF CLEARED SIDES OF TRANSACTIONS.— 

20 The term ‘estimated aggregate number of 

21 cleared sides of transactions’ means, with 

22 respect to a fiscal year, the aggregate 

23 number of cleared sides of transactions to 

24 be cleared by registered derivatives clear25 ing organizations during the fiscal year, as 
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1 estimated by the Commission, after con2 sultation with the Office of Management 

3 and Budget, using the methodology re4 quired for making projections pursuant to 

5 section 257 of the Balanced Budget and 

6 Emergency Deficit Control Act of 1985. 

7 ‘‘(ii) TARGET OFFSETTING RECEIPT

8 AMOUNT.—The term ‘target offsetting re9 ceipt amount’ means, with respect to a fis10 cal year, the total level of Commission 

11 budget authority for all non-enforcement 

12 activities of the Commission, as contained 

13 in the regular appropriations Acts for the 

14 fiscal year. 

15 ‘‘(C) NO JUDICIAL REVIEW.—An adjusted 

16 fee rate prescribed under subparagraph (A) 

17 shall not be subject to judicial review. 

18 ‘‘(6) PUBLICATION.—Not later than April 30 of 

19 each fiscal year, the Commission shall cause to be 

20 published in the Federal Register notices of the fee 

21 rates applicable under this subsection for the suc22 ceeding fiscal year, and any estimate or projection 

23 on which the fee rates are based. 

24 ‘‘(7) ESTABLISHMENT OF FUTURES AND OP25 TIONS TRANSACTION FEE ACCOUNT; DEPOSIT OF
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1 FEES.—There is established in the Treasury of the 

2 United States an account which shall be known as 

3 the ‘Futures and Options Transaction Fee Account’. 

4 All fees collected under this subsection for a fiscal 

5 year shall be deposited in the account. Amounts in 

6 the account are authorized to be appropriated to 

7 fund the expenditures of the Commission.’’. 

8 (b) EFFECTIVE DATE.—The amendments made by 

9 subsection (a) shall apply to fiscal years beginning 30 or 

10 more days after the date of the enactment of this Act. 

11 (c) TRANSITION RULE.—If this section becomes law 

12 after March 31 and before September 1 of a fiscal year, 

13 then paragraphs (5)(A) and (6) of section 12(e) of the 

14 Commodity Exchange Act shall be applied, in the case of 

15 the 1st fiscal year beginning after the date of the enact16 ment of this Act, by substituting ‘‘August 31’’ for ‘‘April 

17 30’’. 

18 SEC. 357. NO EFFECT ON ANTITRUST LAW OR AUTHORITY 

19 OF THE FEDERAL TRADE COMMISSION. 

20 (a) Nothing in this subtitle shall be construed to mod21 ify, impair, or supersede the operation of any of the anti22 trust laws. For purposes of this subsection, the term 

23 ‘‘antitrust laws’’ has the meaning given it in subsection 

24 (a) of the 1st section of the Clayton Act (15 U.S.C. 12(a)), 

25 except that such term includes section 5 of the Federal 
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1 Trade Commission Act (15 U.S.C. 45) to the extent that 

2 such term applies to unfair methods of competition. 

3 (b) Nothing in this subtitle shall be construed to af4 fect or diminish the jurisdiction or authority of the Fed5 eral Trade Commission with respect to its authorities 

6 under the Federal Trade Commission Act (15 U.S.C. 41 

7 et seq.) or the Energy Independence and Security Act of 

8 2007 (Public Law 110–140) to obtain information, to 

9 carry out enforcement activities, or otherwise to carry out 

10 the responsibilities of the Federal Trade Commission. 

11 SEC. 358. EFFECT OF DERIVATIVES REGULATORY REFORM 

12 LEGISLATION. 

13 (a) STATUTES.—Upon the passage of legislation that 

14 includes derivatives regulatory reform, sections 351, 352, 

15 354, 355, 356, and 357 shall be repealed. 

16 (b) REGULATIONS.—Upon the passage of legislation 

17 that includes derivatives regulatory reform, any regula18 tions promulgated under section 351, 352, 354, 355, 356, 

19 or 357 shall be considered null and void. 

20 SEC. 359. CEASE-AND-DESIST AUTHORITY. 

21 (a) NATURAL GAS ACT.—Section 20 of the Natural 

22 Gas Act (15 U.S.C. 717s) is amended by adding the fol23 lowing at the end: 

24 ‘‘(e) CEASE-AND-DESIST PROCEEDINGS; TEMPORARY

25 ORDERS; AUTHORITY OF THE COMMISSION.— 
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1 ‘‘(1) IN GENERAL.—If the Commission finds, 

2 after notice and opportunity for hearing, that any 

3 entity may be violating, may have violated, or may 

4 be about to violate any provision of this Act, or any 

5 rule, regulation, restriction, condition, or order made 

6 or imposed by the Commission under the authority 

7 of this Act, the Commission may publish its findings 

8 and issue an order requiring such entity, and any 

9 other entity that is, was, or would be a cause of the 

10 violation, due to an act or omission the entity knew 

11 or should have known would contribute to such vio12 lation, to cease and desist from committing or caus13 ing such violation and any future violation of the 

14 same provision, rule, or regulation. Such order may, 

15 in addition to requiring an entity to cease and desist 

16 from committing or causing a violation, require such 

17 entity to comply, to provide an accounting and 

18 disgorgement, or to take steps to effect compliance, 

19 with such provision, rule, or regulation, upon such 

20 terms and conditions and within such time as the 

21 Commission may specify in such order. Any such 

22 order may, as the Commission deems appropriate, 

23 require future compliance or steps to effect future 

24 compliance, either permanently or for such period of 

25 time as the Commission may specify. 
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1 ‘‘(2) TIMING OF ENTRY.—An order issued 

2 under this subsection shall be entered only after no3 tice and opportunity for a hearing, unless the Com4 mission determines that notice and hearing prior to 

5 entry would be impracticable or contrary to the pub6 lic interest. 

7 ‘‘(f) HEARING.—The notice instituting proceedings 

8 pursuant to subsection (e) shall fix a hearing date not ear9 lier than 30 days nor later than 60 days after service of 

10 the notice unless an earlier or a later date is set by the 

11 Commission with the consent of any respondent so served. 

12 ‘‘(g) TEMPORARY ORDER.—Whenever the Commis13 sion determines that— 

14 ‘‘(1) a respondent may take actions to dissipate 

15 or convert assets prior to the completion of the pro16 ceedings referred to in subsection (e), and such as17 sets would be necessary to comply with or otherwise 

18 satisfy a final enforcement order of the Commission 

19 pursuant to alleged violations or threatened viola20 tions specified in the notice instituting proceedings; 

21 or 

22 ‘‘(2) a respondent is engaged in actual or 

23 threatened violations of this Act or a Commission 

24 rule, regulation, restriction or order referred to in 

25 subsection (e), 
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1 the Commission may issue a temporary order requiring 

2 the respondent to take such action to prevent dissipation 

3 or conversion of assets, significant harm to energy con4 sumers, or substantial harm to the public interest, frustra5 tion of the Commission’s ability to conduct the pro6 ceedings, or frustration of the Commission’s ability to re7 dress said violation at the conclusion of the proceedings, 

8 as the Commission deems appropriate pending completion 

9 of such proceedings. 

10 ‘‘(h) REVIEW OF TEMPORARY ORDERS.— 

11 ‘‘(1) COMMISSION REVIEW.—At any time after 

12 the respondent has been served with a temporary 

13 cease-and-desist order pursuant to subsection (g), 

14 the respondent may apply to the Commission to have 

15 the order set aside, limited, or suspended. If the re16 spondent has been served with a temporary cease17 and-desist order entered without a prior Commission 

18 hearing, the respondent may, within 10 days after 

19 the date on which the order was served, request a 

20 hearing on such application and the Commission 

21 shall hold a hearing and render a decision on such 

22 application at the earliest possible time. 

23 ‘‘(2) JUDICIAL REVIEW.—Within— 

24 ‘‘(A) 10 days after the date the respondent 

25 was served with a temporary cease-and-desist 
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1 order entered with a prior Commission hearing; 

2 or 

3 ‘‘(B) 10 days after the Commission ren4 ders a decision on an application and hearing 

5 under paragraph (1), 

6 with respect to any temporary cease-and-desist order 

7 entered without a prior Commission hearing, the re8 spondent may apply to the United States circuit 

9 court having jurisdiction over the circuit in which 

10 the respondent resides or has its principal place of 

11 business, or to the United States Court of Appeals 

12 for the District of Columbia Circuit, for an order 

13 setting aside, limiting, or suspending the effective14 ness or enforcement of the order, and the court shall 

15 have jurisdiction to enter such an order. A respond16 ent served with a temporary cease-and-desist order 

17 entered without a prior Commission hearing may not 

18 apply to the court except after hearing and decision 

19 by the Commission on the respondent’s application 

20 under paragraph (1) of this subsection. 

21 ‘‘(3) NO AUTOMATIC STAY OF TEMPORARY

22 ORDER.—The commencement of proceedings under 

23 paragraph (2) of this subsection shall not, unless 

24 specifically ordered by the court, operate as a stay 

25 of the Commission’s order. 
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1 ‘‘(4) EXCLUSIVE REVIEW.—Sections 19(d) and 

2 24 shall not apply to a temporary order entered pur3 suant to this section. 

4 ‘‘(i) IMPLEMENTATION.—The Commission is author5 ized to adopt rules, regulations, and orders as it deems 

6 appropriate to implement this section.’’. 

7 (c) NATURAL GAS POLICY ACT OF 1978.—Section 

8 504 of the Natural Gas Policy Act of 1978 (15 U.S.C. 

9 3414) is amended by adding the following at the end: 

10 ‘‘(d) CEASE-AND-DESIST PROCEEDINGS; TEMPORARY

11 ORDERS; AUTHORITY OF THE COMMISSION.— 

12 ‘‘(1) IN GENERAL.—If the Commission finds, 

13 after notice and opportunity for hearing, that any 

14 entity may be violating, may have violated, or may 

15 be about to violate any provision of this Act, or any 

16 rule, regulation, restriction, condition, or order made 

17 or imposed by the Commission under the authority 

18 of this Act, the Commission may publish its findings 

19 and issue an order requiring such entity, and any 

20 other entity that is, was, or would be a cause of the 

21 violation, due to an act or omission the entity knew 

22 or should have known would contribute to such vio23 lation, to cease and desist from committing or caus24 ing such violation and any future violation of the 

25 same provision, rule, or regulation. Such order may, 
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1 in addition to requiring an entity to cease and desist 

2 from committing or causing a violation, require such 

3 entity to comply, to provide an accounting and 

4 disgorgement, or to take steps to effect compliance, 

5 with such provision, rule, or regulation, upon such 

6 terms and conditions and within such time as the 

7 Commission may specify in such order. Any such 

8 order may, as the Commission deems appropriate, 

9 require future compliance or steps to effect future 

10 compliance, either permanently or for such period of 

11 time as the Commission may specify. 

12 ‘‘(2) TIMING OF ENTRY.—An order issued 

13 under this subsection shall be entered only after no14 tice and opportunity for a hearing, unless the Com15 mission determines that notice and hearing prior to 

16 entry would be impracticable or contrary to the pub17 lic interest. 

18 ‘‘(3) HEARING.—The notice instituting pro19 ceedings pursuant to paragraph (1) shall fix a hear20 ing date not earlier than 30 days nor later than 60 

21 days after service of the notice unless an earlier or 

22 a later date is set by the Commission with the con23 sent of any respondent so served. 

24 ‘‘(4) TEMPORARY ORDER.—Whenever the Com25 mission determines that— 
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1 ‘‘(A) a respondent may take actions to dis2 sipate or convert assets prior to the completion 

3 of the proceedings referred to in paragraph (1) 

4 and such assets would be necessary to comply 

5 with or otherwise satisfy a final enforcement 

6 order of the Commission pursuant to alleged 

7 violations or threatened violations specified in 

8 the notice instituting proceedings; or 

9 ‘‘(B) a respondent is engaged in actual or 

10 threatened violations of this Act or a Commis11 sion rule, regulation, restriction or order re12 ferred to in paragraph (1), 

13 the Commission may issue a temporary order requir14 ing the respondent to take such action to prevent 

15 dissipation or conversion of assets, significant harm 

16 to energy consumers, or substantial harm to the 

17 public interest, frustration of the Commission’s abil18 ity to conduct the proceedings, or frustration of the 

19 Commission’s ability to redress said violation at the 

20 conclusion of the proceedings, as the Commission 

21 deems appropriate pending completion of such pro22 ceedings. 

23 ‘‘(5) REVIEW OF TEMPORARY ORDERS.— 

24 ‘‘(A) COMMISSION REVIEW.—At any time 

25 after the respondent has been served with a 
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1 temporary cease-and-desist order pursuant to 

2 paragraph (4), the respondent may apply to the 

3 Commission to have the order set aside, limited, 

4 or suspended. If the respondent has been served 

5 with a temporary cease-and-desist order entered 

6 without a prior Commission hearing, the re7 spondent may, within 10 days after the date on 

8 which the order was served, request a hearing 

9 on such application and the Commission shall 

10 hold a hearing and render a decision on such 

11 application at the earliest possible time. 

12 ‘‘(B) JUDICIAL REVIEW.—Within— 

13 ‘‘(i) 10 days after the date the re14 spondent was served with a temporary 

15 cease-and-desist order entered with a prior 

16 Commission hearing; or 

17 ‘‘(ii) 10 days after the Commission 

18 renders a decision on an application and 

19 hearing under subparagraph (A), with re20 spect to any temporary cease-and-desist 

21 order entered without a prior Commission 

22 hearing, the respondent may apply to the 

23 United States circuit court having jurisdic24 tion over the circuit in which the respond25 ent resides or has its principal place of 
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1 business, or to the United States Court of 

2 Appeals for the District of Columbia Cir3 cuit, for an order setting aside, limiting, or 

4 suspending the effectiveness or enforce5 ment of the order, and the court shall have 

6 jurisdiction to enter such an order. A re7 spondent served with a temporary cease8 and-desist order entered without a prior 

9 Commission hearing may not apply to the 

10 court except after hearing and decision by 

11 the Commission on the respondent’s appli12 cation under paragraph (1) of this sub13 section. 

14 ‘‘(C) NO AUTOMATIC STAY OF TEMPORARY

15 ORDER.—The commencement of proceedings 

16 under subparagraph (B) of this paragraph shall 

17 not, unless specifically ordered by the court, op18 erate as a stay of the Commission’s order. 

19 ‘‘(6) IMPLEMENTATION.—The Commission is 

20 authorized to adopt rules, regulations, and orders as 

21 it deems appropriate to implement this subsection.’’. 

22 SEC. 360. PRESIDENTIAL REVIEW OF REGULATIONS. 

23 Not later than 24 months after the date of enactment 

24 of this Act, the President shall review the offset regula25 tions and derivatives regulations promulgated pursuant to 
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1 the American Clean Energy and Security Act of 2009. The 

2 President shall determine whether such regulations ade3 quately protect the United States financial system from 

4 systemic risk. 

5 TITLE IV—TRANSITIONING TO A 

6 CLEAN ENERGY ECONOMY 

7 Subtitle A—Ensuring Real 

8 Reductions in Industrial Emissions 

9 SEC. 401. ENSURING REAL REDUCTIONS IN INDUSTRIAL 

10 EMISSIONS. 

11 Title VII of the Clean Air Act is amended by insert12 ing after part E the following new part: 

13 ‘‘PART F—ENSURING REAL REDUCTIONS IN 

14 INDUSTRIAL EMISSIONS 

15 ‘‘SEC. 761. PURPOSES. 

16 ‘‘(a) PURPOSES OF PART.—The purposes of this part 

17 are— 

18 ‘‘(1) to promote a strong global effort to signifi19 cantly reduce greenhouse gas emissions, and, 

20 through this global effort, stabilize greenhouse gas 

21 concentrations in the atmosphere at a level that will 

22 prevent dangerous anthropogenic interference with 

23 the climate system; and 

24 ‘‘(2) to prevent an increase in greenhouse gas 

25 emissions in countries other than the United States 
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1 as a result of direct and indirect compliance costs in2 curred under this title. 

3 ‘‘(b) PURPOSES OF SUBPART 1.—The purposes of 

4 subpart 1 are additionally— 

5 ‘‘(1) to provide a rebate to the owners and op6 erators of entities in domestic eligible industrial sec7 tors for their greenhouse gas emission costs incurred 

8 under this title, but not for costs associated with 

9 other related or unrelated market dynamics; 

10 ‘‘(2) to design such rebates in a way that will 

11 prevent carbon leakage while also rewarding innova12 tion and facility-level investments in energy effi13 ciency performance improvements; and 

14 ‘‘(3) to eliminate or reduce distribution of emis15 sion allowances under subpart 1 when such distribu16 tion is no longer necessary to prevent carbon leakage 

17 from eligible industrial sectors. 

18 ‘‘(c) PURPOSES OF SUBPART 2.—The purposes of 

19 subpart 2 are additionally— 

20 ‘‘(1) to induce foreign countries, and, in par21 ticular, fast-growing developing countries, to take 

22 substantial action with respect to their greenhouse 

23 gas emissions consistent with the Bali Action Plan 

24 developed under the United Nations Framework 

25 Convention on Climate Change; and 
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1 ‘‘(2) to ensure that the measures described in 

2 subpart 2 are designed and implemented in a man3 ner consistent with applicable international agree4 ments to which the United States is a party. 

5 ‘‘SEC. 762. DEFINITIONS. 

6 ‘‘In this part: 

7 ‘‘(1) CARBON LEAKAGE.—The term ‘carbon 

8 leakage’ means any substantial increase (as deter9 mined by the Administrator) in greenhouse gas 

10 emissions by industrial entities located in other 

11 countries if such increase is caused by an incre12 mental cost of production increase in the United 

13 States resulting from the implementation of this 

14 title. 

15 ‘‘(2) COVERED GOOD.—The term ‘covered good’ 

16 means a good that, as identified by the Adminis17 trator by regulation, is either— 

18 ‘‘(A) entered under a heading or sub19 heading of the Harmonized Tariff Schedule of 

20 the United States that corresponds to the 

21 NAICS code for an eligible industrial sector, as 

22 established in the concordance between NAICS 

23 codes and the Harmonized Tariff Schedule of 

24 the United States prepared by the United 

25 States Census Bureau; or 
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1 ‘‘(B) a manufactured item for consump2 tion. 

3 ‘‘(3) ELIGIBLE INDUSTRIAL SECTOR.—The 

4 term ‘eligible industrial sector’ means an industrial 

5 sector determined by the Administrator under sec6 tion 763(b) to be eligible to receive emission allow7 ance rebates under subpart 1. 

8 ‘‘(4) INDUSTRIAL SECTOR.—The term ‘indus9 trial sector’ means any sector that is in the manu10 facturing sector (as defined in NAICS codes 31, 32, 

11 and 33) or that beneficiates or otherwise processes 

12 (including agglomeration) metal ores, including iron 

13 and copper ores, soda ash, or phosphate. The extrac14 tion of metal ores, soda ash, or phosphate shall not 

15 be considered to be an industrial sector. 

16 ‘‘(5) MANUFACTURED ITEM FOR CONSUMP17 TION.— 

18 ‘‘(A) IN GENERAL.—The term ‘manufac19 tured item for consumption’ means any good— 

20 ‘‘(i) that includes in substantial 

21 amounts one or more goods like the goods 

22 produced by an eligible industrial sector; 

23 ‘‘(ii) with respect to which an inter24 national reserve allowance program pursu25 ant to subpart 2 is in effect with regard to 
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1 the eligible industrial sector and the quan2 tity of international reserve allowances is 

3 not zero pursuant to section 768(b); 

4 ‘‘(iii) with respect to which the trade 

5 intensity of the industrial sector that pro6 duces the good, as measured consistent 

7 with section 763(b)(2)(A)(iii), is at least 

8 15 percent; and 

9 ‘‘(iv) for which the domestic producers 

10 of the good have demonstrated, and the 

11 Administrator has determined, that the ap12 plication of the international reserve allow13 ance program pursuant to subpart 2 is 

14 technically and administratively feasible 

15 and appropriate to achieve the purposes of 

16 this part, taking into account the energy 

17 and greenhouse gas intensity of the indus18 trial sector that produces the good, as 

19 measured consistent with section 

20 763(b)(2)(A)(ii), and the ability of such 

21 producers to pass on cost increases and 

22 other appropriate factors. 

23 ‘‘(B) RULE OF CONSTRUCTION.—A deter24 mination of the Administrator under subpara25 graph (A)(iv) shall not be considered to be a de-
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1 termination of the President under section 

2 767(b). 

3 ‘‘(6) NAICS.—The term ‘NAICS’ means the 

4 North American Industrial Classification System of 

5 2002. 

6 ‘‘(7) OUTPUT.—The term ‘output’ means the 

7 total tonnage or other standard unit of production 

8 (as determined by the Administrator) produced by 

9 an entity in an industrial sector. The output of the 

10 cement sector is hydraulic cement, and not clinker. 

11 ‘‘Subpart 1—Emission Allowance Rebate Program 

12 ‘‘SEC. 763. ELIGIBLE INDUSTRIAL SECTORS. 

13 ‘‘(a) LIST.— 

14 ‘‘(1) INITIAL LIST.—Not later than June 30, 

15 2011, the Administrator shall publish in the Federal 

16 Register a list of eligible industrial sectors pursuant 

17 to subsection (b). Such list shall include the amount 

18 of the emission allowance rebate per unit of produc19 tion that shall be provided to entities in each eligible 

20 industrial sector in the following two calendar years 

21 pursuant to section 764. 

22 ‘‘(2) SUBSEQUENT LISTS.—Not later than Feb23 ruary 1, 2013, and every 4 years thereafter, the Ad24 ministrator shall publish in the Federal Register an 
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1 updated version of the list published under para2 graph (1). 

3 ‘‘(b) ELIGIBLE INDUSTRIAL SECTORS.— 

4 ‘‘(1) IN GENERAL.—Not later than June 30, 

5 2011, the Administrator shall promulgate a rule des6 ignating, based on the criteria under paragraph (2), 

7 the industrial sectors eligible for emission allowance 

8 rebates under this subpart. 

9 ‘‘(2) PRESUMPTIVELY ELIGIBLE INDUSTRIAL

10 SECTORS.— 

11 ‘‘(A) ELIGIBILITY CRITERIA.— 

12 ‘‘(i) IN GENERAL.—An owner or oper13 ator of an entity shall be eligible to receive 

14 emission allowance rebates under this sub15 part if such entity is in an industrial sector 

16 that is included in a six-digit classification 

17 of the NAICS that meets the criteria in 

18 both clauses (ii) and (iii), or the criteria in 

19 clause (iv). 

20 ‘‘(ii) ENERGY OR GREENHOUSE GAS

21 INTENSITY.—As determined by the Admin22 istrator, the industrial sector had— 

23 ‘‘(I) an energy intensity of at 

24 least 5 percent, calculated by dividing 

25 the cost of purchased electricity and 
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1 fuel costs of the sector by the value of 

2 the shipments of the sector, based on 

3 data described in subparagraph (D); 

4 or 

5 ‘‘(II) a greenhouse gas intensity 

6 of at least 5 percent, calculated by di7 viding— 

8 ‘‘(aa) the number 20 multi9 plied by the number of tons of 

10 carbon dioxide equivalent green11 house gas emissions (including 

12 direct emissions from fuel com13 bustion, process emissions, and 

14 indirect emissions from the gen15 eration of electricity used to 

16 produce the output of the sector) 

17 of the sector based on data de18 scribed in subparagraph (D); by 

19 ‘‘(bb) the value of the ship20 ments of the sector, based on 

21 data described in subparagraph 

22 (D). 

23 ‘‘(iii) TRADE INTENSITY.—As deter24 mined by the Administrator, the industrial 

25 sector had a trade intensity of at least 15 
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1 percent, calculated by dividing the value of 

2 the total imports and exports of such sec3 tor by the value of the shipments plus the 

4 value of imports of such sector, based on 

5 data described in subparagraph (D). 

6 ‘‘(iv) VERY HIGH ENERGY OR GREEN7 HOUSE GAS INTENSITY.—As determined by 

8 the Administrator, the industrial sector 

9 had an energy or greenhouse gas intensity, 

10 as calculated under clause (ii)(I) or (II), of 

11 at least 20 percent. 

12 ‘‘(B) METAL AND PHOSPHATE PRODUC13 TION CLASSIFIED UNDER MORE THAN ONE

14 NAICS CODE.—For purposes of this section, the 

15 Administrator shall— 

16 ‘‘(i) aggregate data for the 

17 beneficiation or other processing (including 

18 agglomeration) of metal ores, including 

19 iron and copper ores, soda ash, or phos20 phate with subsequent steps in the process 

21 of metal and phosphate manufacturing, re22 gardless of the NAICS code under which 

23 such activity is classified; and 

24 ‘‘(ii) aggregate data for the manufac25 turing of steel with the manufacturing of 
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1 steel pipe and tube made from purchased 

2 steel in a nonintegrated process. 

3 ‘‘(C) EXCLUSION.—The petroleum refining 

4 sector shall not be an eligible industrial sector. 

5 ‘‘(D) DATA SOURCES.— 

6 ‘‘(i) ELECTRICITY AND FUEL COSTS, 

7 VALUE OF SHIPMENTS.—The Adminis8 trator shall determine electricity and fuel 

9 costs and the value of shipments under 

10 this subsection from data from the United 

11 States Census Annual Survey of Manufac12 turers. The Administrator shall take the 

13 average of data from as many of the years 

14 of 2004, 2005, and 2006 for which such 

15 data are available. If such data are un16 available, the Administrator shall make a 

17 determination based upon 2002 or 2006 

18 data from the most detailed industrial clas19 sification level of Energy Information 

20 Agency’s Manufacturing Energy Consump21 tion Survey (using 2006 data if it is avail22 able) and the 2002 or 2007 Economic Cen23 sus of the United States (using 2007 data 

24 if it is available). If data from the Manu25 facturing Energy Consumption Survey or 
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1 Economic Census are unavailable for any 

2 sector at the six-digit classification level in 

3 the NAICS, then the Administrator may 

4 extrapolate the information necessary to 

5 determine the eligibility of a sector under 

6 this paragraph from available Manufac7 turing Energy Consumption Survey or 

8 Economic Census data pertaining to a 

9 broader industrial category classified in the 

10 NAICS. If data relating to the 

11 beneficiation or other processing (including 

12 agglomeration) of metal ores, including 

13 iron and copper ores, soda ash, or phos14 phate are not available from the specified 

15 data sources, the Administrator shall use 

16 the best available Federal or State govern17 ment data and may use, to the extent nec18 essary, representative data submitted by 

19 entities that perform such beneficiation or 

20 other processing (including agglomeration), 

21 in making a determination. Fuel cost data 

22 shall not include the cost of fuel used as 

23 feedstock by an industrial sector. 

24 ‘‘(ii) IMPORTS AND EXPORTS.—The 

25 Administrator shall base the value of im-
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1 ports and exports under this subsection on 

2 United States International Trade Com3 mission data. The Administrator shall take 

4 the average of data from as many of the 

5 years of 2004, 2005, and 2006 for which 

6 such data are available. If data from the 

7 United States International Trade Com8 mission are unavailable for any sector at 

9 the six-digit classification level in the 

10 NAICS, then the Administrator may ex11 trapolate the information necessary to de12 termine the eligibility of a sector under 

13 this paragraph from available United 

14 States International Trade Commission 

15 data pertaining to a broader industrial cat16 egory classified in the NAICS. 

17 ‘‘(iii) PERCENTAGES.—The Adminis18 trator shall round the energy intensity, 

19 greenhouse gas intensity, and trade inten20 sity percentages under subparagraph (A) 

21 to the nearest whole number. 

22 ‘‘(iv) GREENHOUSE GAS EMISSION

23 CALCULATIONS.—When calculating the 

24 tons of carbon dioxide equivalent green25 house gas emissions for each sector under 
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1 subparagraph (A)(ii)(II)(aa), the Adminis2 trator— 

3 ‘‘(I) shall use the best available 

4 data from as many of the years 2004, 

5 2005, and 2006 for which such data 

6 is available; and 

7 ‘‘(II) may, to the extent nec8 essary with respect to a sector, use 

9 economic and engineering models and 

10 the best available information on tech11 nology performance levels for such 

12 sector. 

13 ‘‘(3) ADMINISTRATIVE DETERMINATION OF AD14 DITIONAL ELIGIBLE INDUSTRIAL SECTORS.— 

15 ‘‘(A) UPDATED TRADE INTENSITY DATA.— 

16 The Administrator shall designate as eligible to 

17 receive emission allowance rebates under this 

18 subpart an industrial sector that— 

19 ‘‘(i) met the energy or greenhouse gas 

20 intensity criteria in paragraph (2)(A)(ii) as 

21 of the date of promulgation of the rule 

22 under paragraph (1); and 

23 ‘‘(ii) meets the trade intensity criteria 

24 in paragraph (2)(A)(iii), using data from 

25 any year after 2006. 
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1 ‘‘(B) INDIVIDUAL SHOWING PETITION.— 

2 ‘‘(i) PETITION.—In addition to des3 ignation under paragraph (2) or subpara4 graph (A) of this paragraph, the owner or 

5 operator of an entity in an industrial sec6 tor may petition the Administrator to des7 ignate as eligible industrial sectors under 

8 this subpart an entity or a group of enti9 ties that— 

10 ‘‘(I) represent a subsector of a 

11 six-digit section of the NAICS code; 

12 and 

13 ‘‘(II) meet the eligibility criteria 

14 in both clauses (ii) and (iii) of para15 graph (2)(A), or the eligibility criteria 

16 in clause (iv) of paragraph (2)(A). 

17 ‘‘(ii) DATA.—In making a determina18 tion under this subparagraph, the Admin19 istrator shall consider data submitted by 

20 the petitioner that is specific to the entity, 

21 data solicited by the Administrator from 

22 other entities in the subsector, if such 

23 other entities exist, and data specified in 

24 paragraph (2)(D). 
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1 ‘‘(iii) BASIS OF SUBSECTOR DETER2 MINATION.—The Administrator shall de3 termine an entity or group of entities to be 

4 a subsector of a six-digit section of the 

5 NAICS code based only upon the products 

6 manufactured and not the industrial proc7 ess by which the products are manufac8 tured, except that the Administrator may 

9 determine an entity or group of entities 

10 that manufacture a product from primarily 

11 virgin material to be a separate subsector 

12 from another entity or group of entities 

13 that manufacture the same product pri14 marily from recycled material. 

15 ‘‘(iv) USE OF MOST RECENT DATA.— 

16 In determining whether to designate a sec17 tor or subsector as an eligible industrial 

18 sector under this subparagraph, the Ad19 ministrator shall use the most recent data 

20 available from the sources described in 

21 paragraph (2)(D), rather than the data 

22 from the years specified in paragraph 

23 (2)(D), to determine the trade intensity of 

24 such sector or subsector, but only for de25 termining such trade intensity. 
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1 ‘‘(v) FINAL ACTION.—The Adminis2 trator shall take final action on such peti3 tion no later than 6 months after the peti4 tion is received by the Administrator. 

5 ‘‘SEC. 764. DISTRIBUTION OF EMISSION ALLOWANCE RE6 BATES. 

7 ‘‘(a) DISTRIBUTION SCHEDULE.— 

8 ‘‘(1) IN GENERAL.—For each vintage year, the 

9 Administrator shall distribute pursuant to this sec10 tion emission allowances made available under sec11 tion 782(e), no later than October 31 of the pre12 ceding calendar year. The Administrator shall make 

13 such annual distributions to the owners and opera14 tors of each entity in an eligible industrial sector in 

15 the amount of emission allowances calculated under 

16 subsection (b), except that— 

17 ‘‘(A) for vintage years 2012 and 2013, the 

18 distribution for a covered entity shall be pursu19 ant to the entity’s indirect carbon factor as cal20 culated under subsection (b)(3); 

21 ‘‘(B) for vintage year 2026 and thereafter, 

22 the distribution shall be pursuant to the 

23 amount calculated under subsection (b) multi24 plied by, except as modified by the President 

25 pursuant to section 767(d)(1)(C) for a sector— 
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1 ‘‘(i) 90 percent for vintage year 2026; 

2 ‘‘(ii) 80 percent for vintage year 

3 2027; 

4 ‘‘(iii) 70 percent for vintage year 

5 2028; 

6 ‘‘(iv) 60 percent for vintage year 

7 2029; 

8 ‘‘(v) 50 percent for vintage year 2030; 

9 ‘‘(vi) 40 percent for vintage year 

10 2031; 

11 ‘‘(vii) 30 percent for vintage year 

12 2032; 

13 ‘‘(viii) 20 percent for vintage year 

14 2033; 

15 ‘‘(ix) 10 percent for vintage year 

16 2034; and 

17 ‘‘(x) 0 percent for vintage year 2035 

18 and thereafter. 

19 ‘‘(2) RESUMPTION OF REDUCTION.—If the 

20 President has modified the percentage stated in 

21 paragraph (1)(B) under section 767(d)(1)(C), and 

22 the President subsequently makes a determination 

23 under section 767(c) for an eligible industrial sector 

24 that more than 85 percent of United States imports 

25 for that sector are produced or manufactured in 
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1 countries that have met at least one of the criteria 

2 in that section, then the 10-year reduction schedule 

3 set forth in paragraph (1)(B) of this subsection shall 

4 begin in the next vintage year, with the percentage 

5 reduction based on the amount of the distribution of 

6 emission allowances under this section in the pre7 vious year. 

8 ‘‘(3) NEWLY ELIGIBLE SECTORS.—In addition 

9 to receiving a distribution of emission allowances 

10 under this section in the first distribution occurring 

11 after an industrial sector is designated as eligible 

12 under section 763(b)(3), the owner or operator of an 

13 entity in that eligible industrial sector may receive a 

14 prorated share of any emission allowances made 

15 available for distribution under this section that 

16 were not distributed for the year in which the peti17 tion for eligibility was granted under section 

18 763(b)(3)(A). 

19 ‘‘(4) CESSATION OF QUALIFYING ACTIVITIES.— 

20 If, as determined by the Administrator, a facility is 

21 no longer in an eligible industrial sector designated 

22 under section 763— 

23 ‘‘(A) the Administrator shall not distribute 

24 emission allowances to the owner or operator of 

25 such facility under this section; and 
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1 ‘‘(B) the owner or operator of such facility 

2 shall return to the Administrator all allowances 

3 that have been distributed to it for future vin4 tage years and a pro-rated amount of allow5 ances distributed to the facility under this sec6 tion for the vintage year in which the facility 

7 ceases to be in an eligible industrial sector des8 ignated under section 763. 

9 ‘‘(b) CALCULATION OF DIRECT AND INDIRECT CAR10 BON FACTORS.— 

11 ‘‘(1) IN GENERAL.— 

12 ‘‘(A) COVERED ENTITIES.—Except as pro13 vided in subsection (a), for covered entities that 

14 are in eligible industrial sectors, the amount of 

15 emission allowance rebates shall be based on 

16 the sum of the covered entity’s direct and indi17 rect carbon factors. 

18 ‘‘(B) OTHER ELIGIBLE ENTITIES.—For 

19 entities that are in eligible industrial sectors 

20 but are not covered entities, the amount of 

21 emission allowance rebates shall be based on 

22 the entity’s indirect carbon factor. 

23 ‘‘(C) NEW ENTITIES.—Not later than 2 

24 years after the date of enactment of this title, 

25 the Administrator shall issue regulations gov-
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1 erning the distribution of emission allowance re2 bates for the first and second years of operation 

3 of a new entity in an eligible industrial sector. 

4 These regulations shall provide for— 

5 ‘‘(i) the distribution of emission allow6 ance rebates to such entities based on com7 parable entities in the same sector; and 

8 ‘‘(ii) an adjustment in the third and 

9 fourth years of operation to reconcile the 

10 total amount of emission allowance rebates 

11 received during the first and second years 

12 of operation to the amount the entity 

13 would have received during the first and 

14 second years of operation had the appro15 priate data been available. 

16 ‘‘(2) DIRECT CARBON FACTOR.—The direct car17 bon factor for a covered entity for a vintage year is 

18 the product of— 

19 ‘‘(A) the average annual output of the cov20 ered entity for the 2 years preceding the year 

21 of the distribution; and 

22 ‘‘(B) the most recent calculation of the av23 erage direct greenhouse gas emissions (ex24 pressed in tons of carbon dioxide equivalent) 

25 per unit of output for all covered entities in the 
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1 sector, as determined by the Administrator 

2 under paragraph (4). 

3 ‘‘(3) INDIRECT CARBON FACTOR.— 

4 ‘‘(A) IN GENERAL.—The indirect carbon 

5 factor for an entity for a vintage year is the 

6 product obtained by multiplying the average an7 nual output of the entity for the 2 years pre8 ceding the year of the distribution by both the 

9 electricity emissions intensity factor determined 

10 pursuant to subparagraph (B) and the elec11 tricity efficiency factor determined pursuant to 

12 subparagraph (C) for the year concerned. 

13 ‘‘(B) ELECTRICITY EMISSIONS INTENSITY

14 FACTOR.— 

15 ‘‘(i) IN GENERAL.—Each person sell16 ing electricity to the owner or operator of 

17 an entity in any sector designated as an el18 igible industrial sector under section 

19 763(b) shall provide the owner or operator 

20 of the entity and the Administrator, on an 

21 annual basis, the electricity emissions in22 tensity factor for the entity. The electricity 

23 emissions intensity factor for the entity, 

24 expressed in tons of carbon dioxide equiva-
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1 lents per kilowatt hour, is determined by 

2 dividing— 

3 ‘‘(I) the annual sum of the hour4 ly product of— 

5 ‘‘(aa) the electricity pur6 chased by the entity from that 

7 person in each hour (expressed in 

8 kilowatt hours); multiplied by 

9 ‘‘(bb) the marginal or 

10 weighted average tons of carbon 

11 dioxide equivalent per kilowatt 

12 hour that are reflected in the 

13 electricity charges to the entity, 

14 as determined by the entity’s re15 tail rate arrangements; by 

16 ‘‘(II) the total kilowatt hours of 

17 electricity purchased by the entity 

18 from that person during that year. 

19 ‘‘(ii) USE OF OTHER DATA TO DETER20 MINE FACTOR.—Where it is not possible to 

21 determine the precise electricity emissions 

22 intensity factor for an entity using the 

23 methodology in clause (i), the person sell24 ing electricity shall use the monthly aver25 age data reported by the Energy Informa-
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1 tion Administration or collected and re2 ported by the Administrator for the utility 

3 serving the entity to determine the elec4 tricity emissions intensity factor. 

5 ‘‘(C) ELECTRICITY EFFICIENCY FACTOR.— 

6 The electricity efficiency factor is the average 

7 amount of electricity (in kilowatt hours) used 

8 per unit of output for all entities in the relevant 

9 sector, as determined by the Administrator 

10 based on the best available data, including data 

11 provided under paragraph (6). 

12 ‘‘(D) INDIRECT CARBON FACTOR REDUC13 TION.—If an electricity provider received a free 

14 allocation of emission allowances pursuant to 

15 section 782(a), the Administrator shall adjust 

16 the indirect carbon factor to avoid rebates to 

17 the eligible entity for costs that the Adminis18 trator determines were not incurred by the eli19 gible entity because the allowances were freely 

20 allocated to the eligible entity’s electricity pro21 vider and used for the benefit of industrial con22 sumers. 

23 ‘‘(4) GREENHOUSE GAS INTENSITY CALCULA24 TIONS.—The Administrator shall calculate the aver25 age direct greenhouse gas emissions (expressed in 
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1 tons of carbon dioxide equivalent) per unit of output 

2 and the electricity efficiency factor for all covered 

3 entities in each eligible industrial sector every 4 

4 years, using an average of the four most recent 

5 years of the best available data. For purposes of the 

6 lists required to be published no later than February 

7 1, 2013, the Administrator shall use the best avail8 able data for the maximum number of years, up to 

9 4 years, for which data are available. 

10 ‘‘(5) ENSURING EFFICIENCY IMPROVEMENTS.— 

11 When making greenhouse gas calculations, the Ad12 ministrator shall— 

13 ‘‘(A) limit the average direct greenhouse 

14 gas emissions per unit of output, calculated 

15 under paragraph (4), for any eligible industrial 

16 sector to an amount that is not greater than it 

17 was in any previous calculation under this sub18 section; 

19 ‘‘(B) limit the electricity emissions inten20 sity factor, calculated under paragraph (3)(B) 

21 and resulting from a change in electricity sup22 ply, for any entity to an amount that is not 

23 greater than it was during any previous year; 

24 and 
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1 ‘‘(C) limit the electricity efficiency factor, 

2 calculated under paragraph (3)(C), for any eli3 gible industrial sector to an amount that is not 

4 greater than it was in any previous calculation 

5 under this subsection. 

6 ‘‘(6) DATA SOURCES.—For the purposes of this 

7 subsection— 

8 ‘‘(A) the Administrator shall use data from 

9 the greenhouse gas registry established under 

10 section 713, where it is available; and 

11 ‘‘(B) each owner or operator of an entity 

12 in an eligible industrial sector and each depart13 ment, agency, and instrumentality of the 

14 United States shall provide the Administrator 

15 with such information as the Administrator 

16 finds necessary to determine the direct carbon 

17 factor and the indirect carbon factor for each 

18 entity subject to this section. 

19 ‘‘(c) TOTAL MAXIMUM DISTRIBUTION.—Notwith20 standing subsections (a) and (b), the Administrator shall 

21 not distribute more allowances for any vintage year pursu22 ant to this section than are allocated for use under this 

23 subpart pursuant to section 782(e) for that vintage year. 

24 For any vintage year for which the total emission allow25 ance rebates calculated pursuant to this section exceed the 
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1 number of allowances allocated pursuant to section 782(e), 

2 the Administrator shall reduce each entity’s distribution 

3 on a pro rata basis so that the total distribution under 

4 this section equals the number of allowances allocated 

5 under section 782(e). 

6 ‘‘(d) IRON AND STEEL SECTOR.—For purposes of 

7 this section, the Administrator shall consider as in dif8 ferent industrial sectors— 

9 ‘‘(1) entities using integrated iron and 

10 steelmaking technologies (including coke ovens, blast 

11 furnaces, and other iron-making technologies); and 

12 ‘‘(2) entities using electric arc furnace tech13 nologies. 

14 ‘‘(e) METAL, SODA ASH, OR PHOSPHATE PRODUC15 TION CLASSIFIED UNDER MORE THAN ONE NAICS

16 CODE.—For purposes of this section, the Administrator 

17 shall not aggregate data for the beneficiation or other 

18 processing (including agglomeration) of metal ores, soda 

19 ash, or phosphate with subsequent steps in the process 

20 of metal, soda ash, or phosphate manufacturing. The Ad21 ministrator shall consider the beneficiation or other proc22 essing (including agglomeration) of metal ores, soda ash, 

23 or phosphate to be in separate industrial sectors from the 

24 metal, soda ash, or phosphate manufacturing sectors. In25 dustrial sectors that beneficiate or otherwise process (in-
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1 cluding agglomeration) metal ores, soda ash, or phosphate 

2 shall not receive emission allowance rebates under this sec3 tion related to the activity of extracting metal ores, soda 

4 ash, or phosphate. 

5 ‘‘(f) COMBINED HEAT AND POWER.—For purposes 

6 of this section, and to achieve the purpose set forth in 

7 section 761(b)(2), the Administrator may consider entities 

8 to be in different industrial sectors or otherwise take into 

9 account the differences among entities in the same indus10 trial sector, based upon the extent to which such entities 

11 use combined heat and power technologies. 

12 ‘‘Subpart 2—Promoting International Reductions in 

13 Industrial Emissions 

14 ‘‘SEC. 765. INTERNATIONAL NEGOTIATIONS. 

15 ‘‘(a) FINDING.—Congress finds that the purposes of 

16 this subpart, as set forth in section 761(c), can be most 

17 effectively addressed and achieved through agreements ne18 gotiated between the United States and foreign countries. 

19 ‘‘(b) STATEMENT OF POLICY.—It is the policy of the 

20 United States to work proactively under the United Na21 tions Framework Convention on Climate Change, and in 

22 other appropriate fora, to establish binding agreements, 

23 including sectoral agreements, committing all major 

24 greenhouse gas-emitting nations to contribute equitably to 

25 the reduction of global greenhouse gas emissions. 
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1 ‘‘(c) NOTIFICATION OF FOREIGN COUNTRIES.— 

2 ‘‘(1) IN GENERAL.—As soon as practicable 

3 after the date of the enactment of this title, the 

4 President shall provide a notification on climate 

5 change described in paragraph (2) to each foreign 

6 country the products of which are not exempted 

7 under section 768(a)(1)(E). 

8 ‘‘(2) NOTIFICATION DESCRIBED.—A notifica9 tion described in this paragraph is a notification 

10 that consists of— 

11 ‘‘(A) a statement of the policy of the 

12 United States described in subsection (b); and 

13 ‘‘(B) a declaration— 

14 ‘‘(i) requesting the foreign country to 

15 take appropriate measures to limit the 

16 greenhouse gas emissions of the foreign 

17 country; and 

18 ‘‘(ii) indicating that, beginning on 

19 January 1, 2020, the international reserve 

20 requirements of this subpart may apply to 

21 a covered good. 
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1 ‘‘SEC. 766. UNITED STATES NEGOTIATING OBJECTIVES 

2 WITH RESPECT TO MULTILATERAL ENVIRON3 MENTAL NEGOTIATIONS. 

4 ‘‘(a) IN GENERAL.—The negotiating objectives of the 

5 United States with respect to multilateral environmental 

6 negotiations described in this subpart are— 

7 ‘‘(1) to reach an internationally binding agree8 ment in which all major greenhouse gas-emitting 

9 countries contribute equitably to the reduction of 

10 global greenhouse gas emissions; 

11 ‘‘(2)(A) to include in such international agree12 ment provisions that recognize and address the com13 petitive imbalances that lead to carbon leakage and 

14 may be created between parties and non-parties to 

15 the agreement in domestic and export markets; and 

16 ‘‘(B) not to prevent parties to such agreement 

17 from addressing the competitive imbalances that 

18 lead to carbon leakage and may be created by the 

19 agreement among parties to the agreement in do20 mestic and export markets ; and 

21 ‘‘(3) to include in such international agreement 

22 agreed remedies for any party to the agreement that 

23 fails to meet its greenhouse gas reduction obligations 

24 in the agreement. 
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1 ‘‘(b) RULE OF CONSTRUCTION.—Nothing in sub2 section (a)(2) shall be construed to require the United 

3 States to alter the provisions of section 764 . 

4 ‘‘SEC. 767. PRESIDENTIAL REPORTS AND DETERMINA5 TIONS. 

6 ‘‘(a) REPORT.—Not later than January 1, 2017, and 

7 every 2 years thereafter, the President shall submit a re8 port to Congress on the effectiveness of the distribution 

9 of emission allowance rebates under subpart 1 in miti10 gating carbon leakage in eligible industrial sectors. Such 

11 report shall also include— 

12 ‘‘(1) an assessment, for each eligible industrial 

13 sector receiving emission allowance rebates, as to 

14 whether, and by how much, the per unit cost of pro15 duction has increased for that sector as a result of 

16 compliance with section 722 (as determined in a 

17 manner consistent with section 764(b)), taking into 

18 account the provision of the emission allowance re19 bates to that industrial sector and the benefit re20 ceived by that industrial sector from the provision of 

21 free allowances to electricity providers pursuant to 

22 section 782(a); 

23 ‘‘(2) recommendations on how to better achieve 

24 the purposes of this subpart, including an assess25 ment of the feasibility and usefulness of an inter-
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1 national reserve allowance program for the eligible 

2 industrial sector under section 768; 

3 ‘‘(3) to the extent the President determines that 

4 an international reserve allowance program would 

5 not be useful for the eligible industrial sector be6 cause its exposure to carbon leakage is the result of 

7 competition in export markets with goods produced 

8 in countries not implementing similar greenhouse 

9 gas emission reduction policies, an identification of, 

10 and to the extent appropriate a description of how 

11 the President will implement, alternative actions or 

12 programs consistent with the purposes of this sub13 part (and, in such case, the President may deter14 mine not to apply an international reserve allowance 

15 program to the eligible industrial sector under sub16 section (b)); and 

17 ‘‘(4) an assessment of the amount and duration 

18 of assistance, including distribution of free allow19 ances, being provided to industrial sectors in other 

20 developed countries to mitigate costs of compliance 

21 with domestic greenhouse gas reduction programs in 

22 such countries. 

23 ‘‘(b) PRESIDENTIAL DETERMINATION.— 

24 ‘‘(1) IN GENERAL.—If, by January 1, 2018, a 

25 multilateral agreement consistent with the negoti-
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1 ating objectives set forth in section 766 has not en2 tered into force with respect to the United States, 

3 the President shall establish an international reserve 

4 allowance program for each eligible industrial sector 

5 to the extent provided under section 768 unless— 

6 ‘‘(A) the President determines and certifies 

7 to the Congress with respect to such eligible in8 dustrial sector that such program would not be 

9 in the national economic interest or environ10 mental interest of the United States; and 

11 ‘‘(B) not later than 90 days after the 

12 President transmits the certification described 

13 in subparagraph (A), a joint resolution is en14 acted into law that approves the determination 

15 of the President described in subparagraph (A). 

16 ‘‘(2) CONTENTS OF JOINT RESOLUTION.—For 

17 purposes of this subsection, the term ‘joint resolu18 tion’ means only a joint resolution of the two Houses 

19 of Congress, the matter after the resolving clause of 

20 which is as follows: ‘That the Congress approves the 

21 determination of the President under section 

22 768(b)(1)(A) of the Clean Air Act transmitted to the 

23 Congress on llllll.’, the blank space being 

24 filled with the appropriate date. 
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1 ‘‘(3) CONGRESSIONAL PROCEDURES.—Sub2 sections (c), (d), (e), and (f) of section 152 of the 

3 Trade Act of 1974 (19 U.S.C. 2192 (c), (d), (e), 

4 and (f)) shall apply to a joint resolution under this 

5 subsection to the same extent as such subsections 

6 apply to a joint resolution under section 152 of such 

7 Act. 

8 ‘‘(4) RULE OF CONSTRUCTION.—For purposes 

9 of this section and section 768, if the President 

10 transmits a multilateral agreement to Congress (re11 gardless of whether it is transmitted as a treaty for 

12 ratification by the Senate or another international 

13 agreement for implementation by law enacted by the 

14 Congress) indicating that the agreement is con15 sistent with the negotiating objectives set forth in 

16 section 766, such agreement will be considered to be 

17 consistent with such negotiating objectives as of the 

18 date on which the Senate ratifies the treaty, or legis19 lation is enacted implementing such other agree20 ment, unless the Senate (in the case of ratification) 

21 or the implementing legislation expressly provides 

22 that the multilateral agreement shall not be treated 

23 as consistent with such negotiating objectives for 

24 purposes of this section and section 768. 
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1 ‘‘(c) DETERMINATIONS WITH RESPECT TO ELIGIBLE

2 INDUSTRIAL SECTORS.—If the President establishes an 

3 international reserve allowance program pursuant to sub4 section (b), then not later than June 30, 2018, and every 

5 4 years thereafter, the President, in consultation with the 

6 Administrator and other appropriate agencies, shall deter7 mine, for each eligible industrial sector, whether or not 

8 more than 85 percent of United States imports of covered 

9 goods with respect to that sector are produced or manu10 factured in countries that have met at least one of the 

11 following criteria: 

12 ‘‘(1) The country is a party to an international 

13 agreement to which the United States is a party 

14 that includes a nationally enforceable and economy15 wide greenhouse gas emissions reduction commit16 ment for that country that is at least as stringent 

17 as that of the United States. 

18 ‘‘(2) The country is a party to a multilateral or 

19 bilateral emission reduction agreement for that sec20 tor to the which the United States is a party. 

21 ‘‘(3) The country has an annual energy or 

22 greenhouse gas intensity, as described in section 

23 763(b)(2)(A)(ii), for the sector that is equal to or 

24 less than the energy or greenhouse gas intensity for 

25 such industrial sector in the United States in the 
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1 most recent calendar year for which data are avail2 able. 

3 ‘‘(d) EFFECT OF PRESIDENTIAL DETERMINATION.— 

4 ‘‘(1) REQUIRED ACTIONS.—If the President 

5 makes a determination under subsection (c) with re6 spect to an eligible industrial sector that 85 percent 

7 or less of United States imports of covered goods 

8 with respect to the sector are produced or manufac9 tured in countries that have met one or more of the 

10 criteria in subsection (c), then the President shall, 

11 not later than June 30, 2018, and every 4 years 

12 thereafter— 

13 ‘‘(A) assess the extent to which the emis14 sion allowance rebates provided pursuant to 

15 subpart 1 and the benefit received by that in16 dustrial sector from the provision of free allow17 ances to electricity providers pursuant to sec18 tion 782(a) have mitigated or addressed, or 

19 could mitigate or address, carbon leakage in 

20 that sector; 

21 ‘‘(B) assess the extent to which an inter22 national reserve allowance program has miti23 gated or addressed, or could mitigate or ad24 dress, carbon leakage in that sector; and 

25 ‘‘(C) with respect to that sector— 
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1 ‘‘(i) modify the percentage by which 

2 direct and indirect carbon factors will be 

3 multiplied under section 764(a)(1)(B); and 

4 ‘‘(ii) apply or continue to apply an 

5 international reserve allowance program 

6 under section 768 with respect to imports 

7 of covered goods with respect to that sec8 tor. 

9 ‘‘(2) PROHIBITED ACTIONS.—If the President 

10 makes a determination under subsection (c) with re11 spect to an eligible industrial sector that more than 

12 85 percent of United States imports of covered 

13 goods with respect to the sector are produced or 

14 manufactured in countries that have met one or 

15 more of the criteria in subsection (c), then the Presi16 dent may not apply or continue to apply an inter17 national reserve allowance program under section 

18 768 with respect to imports of covered goods with 

19 respect to that sector. 

20 ‘‘(e) REPORT TO CONGRESS.—Not later than June 

21 30, 2018, and every 4 years thereafter, the President shall 

22 transmit to the Congress a report providing notice of any 

23 determination made under subsection (c), explaining the 

24 reasons for such determination, and identifying the ac25 tions taken by the President under subsection (d). 
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1 ‘‘SEC. 768. INTERNATIONAL RESERVE ALLOWANCE PRO2 GRAM. 

3 ‘‘(a) ESTABLISHMENT.— 

4 ‘‘(1) IN GENERAL.—The Administrator, with 

5 the concurrence of Commissioner responsible for 

6 U.S. Customs and Border Protection, shall issue 

7 regulations— 

8 ‘‘(A) establishing an international reserve 

9 allowance program for the sale, exchange, pur10 chase, transfer, and banking of international re11 serve allowances for covered goods with respect 

12 to the eligible industrial sector; 

13 ‘‘(B) ensuring that the price for pur14 chasing the international reserve allowances 

15 from the United States on a particular day is 

16 equivalent to the auction clearing price for 

17 emission allowances under section 722 for the 

18 most recent emission allowance auction; 

19 ‘‘(C) establishing a general methodology 

20 for calculating the quantity of international re21 serve allowances that a United States importer 

22 of any covered good must submit; 

23 ‘‘(D) requiring the submission of appro24 priate amounts of such allowances for covered 

25 goods with respect to the eligible industrial sec-
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1 tor that enter the customs territory of the 

2 United States; 

3 ‘‘(E) exempting from the requirements of 

4 subparagraph (D) such products that are the 

5 origin of— 

6 ‘‘(i) any country determined to meet 

7 any of the standards provided in section 

8 767(c); 

9 ‘‘(ii) any foreign country that the 

10 United Nations has identified as among 

11 the least developed of developing countries; 

12 or 

13 ‘‘(iii) any foreign country that the 

14 President has determined to be responsible 

15 for less than 0.5 percent of total global 

16 greenhouse gas emissions and less than 5 

17 percent of United States imports of cov18 ered goods with respect to the eligible in19 dustrial sector; 

20 ‘‘(F) specifying the procedures that U.S. 

21 Customs and Border Protection will apply for 

22 the declaration and entry of covered goods with 

23 respect to the eligible industrial sector into the 

24 customs territory of the United States; and 
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1 ‘‘(G) establishing procedures that prevent 

2 circumvention of the international reserve allow3 ance requirement for covered goods with respect 

4 to the eligible industrial sector that are manu5 factured or processed in more than one foreign 

6 country. 

7 ‘‘(2) PURPOSE OF PROGRAM.—The Adminis8 trator shall establish the program under paragraph 

9 (1) consistent with international agreements to 

10 which the United States is a party, in a manner that 

11 minimizes the likelihood of carbon leakage as a re12 sult of differences between— 

13 ‘‘(A) the direct and indirect costs of com14 plying with section 722; and 

15 ‘‘(B) the direct and indirect costs, if any, 

16 of complying in other countries with greenhouse 

17 gas regulatory programs, requirements, export 

18 tariffs, or other measures adopted or imposed 

19 to reduce greenhouse gas emissions. 

20 ‘‘(b) EMISSION ALLOWANCE REBATES.—In estab21 lishing a general methodology for purposes of subsection 

22 (a)(1)(C), the Administrator shall include an adjustment 

23 to the quantity of international reserve allowances based 

24 on the value of emission allowance rebates distributed 

25 under subpart 1 and the benefit received by the eligible 
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1 industrial sector concerned from the provision of free al2 lowances to electricity providers pursuant to section 

3 782(a) and may, if appropriate, determine that the quan4 tity of international reserve allowances should be reduced 

5 as low as to zero. 

6 ‘‘(c) EFFECTIVE DATE.—The international reserve 

7 allowance program may not apply to imports of covered 

8 goods entering the customs territory of the United States 

9 before January 1, 2020. 

10 ‘‘(d) COVERED ENTITIES.—International reserve al11 lowances may not be used by covered entities to comply 

12 with section 722. 

13 ‘‘SEC. 769. IRON AND STEEL SECTOR. 

14 ‘‘For purposes of this subpart, the Administrator 

15 shall consider to be in the same eligible industrial sector— 

16 ‘‘(1) entities using integrated iron and 

17 steelmaking technologies (including coke ovens, blast 

18 furnaces, and other iron-making technologies); and 

19 ‘‘(2) entities using electric arc furnace tech20 nologies.’’. 
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1 Subtitle B—Green Jobs and 

2 Worker Transition 

3 PART 1—GREEN JOBS 

4 SEC. 421. CLEAN ENERGY CURRICULUM DEVELOPMENT 

5 GRANTS. 

6 (a) AUTHORIZATION.—The Secretary of Education is 

7 authorized to award grants, on a competitive basis, to eli8 gible partnerships to develop programs of study (con9 taining the information described in section 122(c)(1)(A) 

10 of the Carl D. Perkins Career and Technical Education 

11 Act of 2006 (20 U.S.C. 2342)), that are focused on emerg12 ing careers and jobs in the fields of clean energy, renew13 able energy, energy efficiency, climate change mitigation, 

14 and climate change adaptation. The Secretary of Edu15 cation shall consult with the Secretary of Labor and the 

16 Secretary of Energy prior to the issuance of a solicitation 

17 for grant applications. 

18 (b) ELIGIBLE PARTNERSHIPS.—For purposes of this 

19 section, an eligible partnership shall include— 

20 (1) at least 1 local educational agency eligible 

21 for funding under section 131 of the Carl D. Per22 kins Career and Technical Education Act of 2006 

23 (20 U.S.C. 2351) or an area career and technical 

24 education school or education service agency de25 scribed in such section; 
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1 (2) at least 1 postsecondary institution eligible 

2 for funding under section 132 of such Act (20 

3 U.S.C. 2352); and 

4 (3) representatives of the community including 

5 business, labor organizations, and industry that have 

6 experience in fields as described in subsection (a). 

7 (c) APPLICATION.—An eligible partnership seeking a 

8 grant under this section shall submit an application to the 

9 Secretary at such time and in such manner as the Sec10 retary may require. Applications shall include— 

11 (1) a description of the eligible partners and 

12 partnership, the roles and responsibilities of each 

13 partner, and a demonstration of each partner’s ca14 pacity to support the program; 

15 (2) a description of the career area or areas 

16 within the fields as described in subsection (a) to be 

17 developed, the reason for the choice, and evidence of 

18 the labor market need to prepare students in that 

19 area; 

20 (3) a description of the new or existing program 

21 of study and both secondary and postsecondary com22 ponents; 

23 (4) a description of the students to be served by 

24 the new program of study; 
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1 (5) a description of how the program of study 

2 funded by the grant will be replicable and dissemi3 nated to schools outside of the partnership, including 

4 urban and rural areas; 

5 (6) a description of applied learning that will be 

6 incorporated into the program of study and how it 

7 will incorporate or reinforce academic learning; 

8 (7) a description of how the program of study 

9 will be delivered; 

10 (8) a description of how the program will pro11 vide accessibility to students, especially economically 

12 disadvantaged, low performing, and urban and rural 

13 students; 

14 (9) a description of how the program will ad15 dress placement of students in nontraditional fields 

16 as described in section 3(20) of the Carl D. Perkins 

17 Career and Technical Education Act of 2006 (20 

18 U.S.C. 2302(20)); and 

19 (10) a description of how the applicant proposes 

20 to consult or has consulted with a labor organiza21 tion, labor management partnership, apprenticeship 

22 program, or joint apprenticeship and training pro23 gram that provides education and training in the 

24 field of study for which the applicant proposes to de25 velop a curriculum. 
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1 (d) PRIORITY.—The Secretary shall give priority to 

2 applications that— 

3 (1) use online learning or other innovative 

4 means to deliver the program of study to students, 

5 educators, and instructors outside of the partner6 ship; and 

7 (2) focus on low performing students and spe8 cial populations as defined in section 3(29) of the 

9 Carl D. Perkins Career and Technical Education 

10 Act of 2006 (20 U.S.C. 2302(29)). 

11 (e) PEER REVIEW.—The Secretary shall convene a 

12 peer review process to review applications for grants under 

13 this section and to make recommendations regarding the 

14 selection of grantees. Members of the peer review com15 mittee shall include— 

16 (1) educators who have experience imple17 menting curricula with comparable purposes; and 

18 (2) business and industry experts in fields as 

19 described in subsection (a). 

20 (f) USES OF FUNDS.—Grants awarded under this 

21 section shall be used for the development, implementation, 

22 and dissemination of programs of study (as described in 

23 section 122(c)(1)(A) of the Carl D. Perkins Career and 

24 Technical Education Act (20 U.S.C. 2342(c)(1)(A))) in 

25 career areas related to clean energy, renewable energy, en-
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1 ergy efficiency, climate change mitigation, and climate 

2 change adaptation. 

3 SEC. 422. INCREASED FUNDING FOR ENERGY WORKER 

4 TRAINING PROGRAM. 

5 (a) AUTHORIZATION.—Section 171(e)(8) of the 

6 Workforce Investment Act of 1998 (29 U.S.C. 2916(e)(8)) 

7 is amended by striking ‘‘$125,000,000’’ and inserting 

8 ‘‘$150,000,000’’. 

9 (b) ESTABLISHMENT OF FUND.—There is hereby es10 tablished in the Treasury a separate account that shall 

11 be known as the Energy Efficiency and Renewable Energy 

12 Worker Training Fund. 

13 (c) AVAILABILITY OF AMOUNTS.—Subject to subtitle 

14 F of title IV, all amounts deposited into the Energy Effi15 ciency and Renewable Energy Worker Training Fund shall 

16 be available to the Secretary to carry out section 171(e)(8) 

17 of the Workforce Investment Act of 1998 (29 U.S.C. 

18 2916(e)(8)) subject to further appropriation. 

19 SEC. 423. DEVELOPMENT OF INFORMATION AND RE20 SOURCES CLEARINGHOUSE FOR VOCA21 TIONAL EDUCATION AND JOB TRAINING IN 

22 RENEWABLE ENERGY SECTORS. 

23 (a) DEVELOPMENT OF CLEARINGHOUSE.—Not later 

24 than 18 months after the date of enactment of this Act, 

25 the Secretary of Labor, in collaboration with the Secretary 
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1 of Energy and the Secretary of Education, shall develop 

2 an internet based information and resources clearinghouse 

3 to aid career and technical education and job training pro4 grams for the renewable energy sectors. In establishing 

5 the clearinghouse, the Secretary shall— 

6 (1) collect and provide information that ad7 dresses the consequences of rapid changes in tech8 nology and regional disparities for renewable energy 

9 training programs and provides best practices for 

10 training and education in light of such changes and 

11 disparities; 

12 (2) place an emphasis on facilitating collabora13 tion between the renewable energy industry and job 

14 training programs and on identifying industry and 

15 technological trends and best practices, to better 

16 help job training programs maintain quality and rel17 evance; and 

18 (3) place an emphasis on assisting programs 

19 that cater to high-demand middle-skill, trades, man20 ufacturing, contracting, and consulting careers. 

21 (b) SOLICITATION AND CONSULTATION.—In devel22 oping the clearinghouse pursuant to subsection (a), the 

23 Secretary shall solicit information and expertise from busi24 nesses and organizations in the renewable energy sector 

25 and from institutions of higher education, career and tech-
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1 nical schools, and community colleges that provide train2 ing in the renewable energy sectors. The Secretary shall 

3 solicit a comprehensive peer review of the clearinghouse 

4 by such entities not less than once every 2 years. Nothing 

5 in this subsection should be interpreted to require the di6 vulgence of proprietary or competitive information. 

7 (c) CONTENTS OF CLEARINGHOUSE.— 

8 (1) SEPARATE SECTION FOR EACH RENEWABLE

9 ENERGY SECTOR.—The clearinghouse shall contain 

10 separate sections developed for each of the following 

11 renewable energy sectors: 

12 (A) Solar energy systems. 

13 (B) Wind energy systems. 

14 (C) Energy transmission systems. 

15 (D) Geothermal systems of energy and 

16 heating. 

17 (E) Energy efficiency technical training. 

18 (2) ADDITIONAL REQUIREMENTS.—In addition 

19 to the information required in subsection (a), each 

20 section of the clearinghouse shall include information 

21 on basic environmental science and processes needed 

22 to understand renewable energy systems, Federal 

23 government and industry resources, and points of 

24 contact to aid institutions in the development of 

25 placement programs for apprenticeships and post 
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1 graduation opportunities, and information and tips 

2 about a green workplace, energy efficiency, and rel3 evant environmental topics and information on avail4 able industry recognized certifications in each area. 

5 (d) DISSEMINATION.—The clearinghouse shall be 

6 made available via the Internet to the general public. No7 tice of the completed clearinghouse and any major revi8 sions thereto shall also be provided— 

9 (1) to each Member of Congress; and 

10 (2) on the websites of the Departments of Edu11 cation, Energy, and Labor. 

12 (e) REVISION.—The Secretary of Labor shall revise 

13 and update the clearinghouse on a regular basis to ensure 

14 its relevance. 

15 SEC. 424. MONITORING PROGRAM EFFECTIVENESS. 

16 The Secretary of Labor shall monitor the potential 

17 growth of affected and displaced workers to ensure that 

18 the necessary funding continues to support the number of 

19 workers affected. 

20 SEC. 424A. GREEN CONSTRUCTION CAREERS DEMONSTRA21 TION PROJECT. 

22 (a) ESTABLISHMENT AND AUTHORITY.—The Sec23 retary of Labor, in consultation with the Secretary of En24 ergy, shall, not later than 180 days after the enactment 

25 of this Act, establish a Green Construction Careers dem-
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1 onstration project by rules, regulations, and guidance in 

2 accordance with the provisions of this section. The purpose 

3 of the demonstration project shall be to promote middle 

4 class careers and quality employment practices in the 

5 green construction sector among targeted workers and to 

6 advance efficiency and performance on construction 

7 projects related to this Act. In order to advance these pur8 poses, the Secretary shall identify projects, including resi9 dential retrofitting projects, funded directly by or assisted 

10 in whole or in part by or through the Federal Government 

11 pursuant to this Act or by any other entity established 

12 in accordance with this Act, to which all of the following 

13 shall apply. 

14 (b) REQUIREMENTS.—The Secretaries may establish 

15 such terms and conditions for the demonstration projects 

16 as the Secretaries determine are necessary to meet the 

17 purposes of subsection (a), including establishing min18 imum proportions of hours to be worked by targeted work19 ers on such projects. The Secretaries may require the con20 tractors and subcontractors performing construction serv21 ices on the project to comply with the terms and conditions 

22 as a condition of receiving funding or assistance from the 

23 Federal Government under this Act. 

24 (c) EVALUATION.—The Secretaries shall evaluate the 

25 demonstration projects against the purposes of this section 
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1 at the end of 3 years from initiation of the demonstration 

2 project. If the Secretaries determine that the demonstra3 tion projects have been successful, the Secretaries may 

4 identify further projects to which of the provisions of this 

5 section shall apply. 

6 (d) GAO REPORT.—The Comptroller General shall 

7 prepare and submit a report to the Committee on Health, 

8 Education, Labor and Pensions and the Committee on 

9 Energy and Natural Resources of the Senate and the 

10 Committee on Education and Labor and the Committee 

11 on Energy and Commerce of the House of Representatives 

12 not later than 5 years after the date of enactment of this 

13 Act, which shall advise the committees of the results of 

14 the demonstration projects and make appropriate rec15 ommendations. 

16 (e) DEFINITION AND DESIGNATION OF TARGETED

17 WORKERS.—As used in this section, the term ‘‘targeted 

18 worker’’ means an individual who resides in the same 

19 labor market area (as defined in section 101(18) of the 

20 Workforce Investment Act of 1998 (29 U.S.C. 2801(18))) 

21 as the project and who— 

22 (1) is a member of a targeted group, within the 

23 meaning of section 51 of the Internal Revenue Code 

24 of 1986, other than an individual described in sub25 section (d)(1)(C) of such section; 
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1 (2)(A) resides in a census tract in which not 

2 less than 20 percent of the households have incomes 

3 below the Federal poverty guidelines; or 

4 (B) is a member of a family that received 

5 a total family income that, during the 2-year 

6 period prior to employment on the project or 

7 admission to the pre-apprenticeship program, 

8 did not exceed 200 percent of the Federal pov9 erty guidelines (exclusive of unemployment com10 pensation, child support payments, payments 

11 described in section 101(25)(A) of the Work12 force Investment Act (29 U.S.C. 2801(25)(A)), 

13 and old-age and survivors insurance benefits re14 ceived under section 202 of the Social Security 

15 Act (42 U.S.C. 402); or 

16 (3) is a displaced homemaker, as such term is 

17 defined in section 3(10) of the Carl D. Perkins Ca18 reer and Technical Education Act of 2006 (20 

19 U.S.C. 2302(10)). 

20 (f) QUALIFIED PRE-APPRENTICESHIP PROGRAM.—A 

21 qualified pre-apprenticeship program is a pre-apprentice22 ship program that has demonstrated an ability to recruit, 

23 train, and prepare for admission to apprenticeship pro24 grams individuals who are targeted workers. 
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1 (g) QUALIFIED APPRENTICESHIP AND OTHER

2 TRAINING PROGRAMS.— 

3 (1) PARTICIPATION BY EACH CONTRACTOR RE4 QUIRED.—Each contractor and subcontractor that 

5 seeks to provide construction services on projects 

6 identified by the Secretaries pursuant to subsection 

7 (a) shall submit adequate assurances with its bid or 

8 proposal that it participates in a qualified appren9 ticeship or other training program, with a written 

10 arrangement with a qualified pre-apprenticeship pro11 gram, for each craft or trade classification of worker 

12 that it intends to employ to perform work on the 

13 project. 

14 (2) DEFINITION OF QUALIFIED APPRENTICE

15 SHIP OR OTHER TRAINING PROGRAM.— 

16 (A) IN GENERAL.—For purposes of this 

17 section, the term ‘‘qualified apprenticeship or 

18 other training program’’ means an apprentice19 ship or other training program that qualifies as 

20 an employee welfare benefit plan, as defined in 

21 section 3(1) of the Employee Retirement In22 come Security Act of 1974 (29 U.S.C. 

23 1002(1)). 

24 (B) CERTIFICATION OF OTHER PROGRAMS

25 IN CERTAIN LOCALITIES.—In the event that the 
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1 Secretary of Labor certifies that a qualified ap2 prenticeship or other training program (as de3 fined in subparagraph (A)) for a craft or trade 

4 classification of workers that a prospective con5 tractor or subcontractor intends to employ, is 

6 not operated in the locality where the project 

7 will be performed, an apprenticeship or other 

8 training program that is not an employee wel9 fare benefit plan (as defined in such section) 

10 may be certified by the Secretary as a qualified 

11 apprenticeship or other training program pro12 vided it is registered with the Office of Appren13 ticeship of the Department of Labor, or a State 

14 apprenticeship agency recognized by the Office 

15 of Apprenticeship for Federal purposes. 

16 (h) FACILITATING COMPLIANCE.—The Secretary 

17 may require Federal contracting agencies, recipients of 

18 Federal assistance, and any other entity established in ac19 cordance with this Act to require contractors to enter into 

20 an agreement in a manner comparable with the standards 

21 set forth in sections 3 and 4 of Executive Order 13502 

22 in order to achieve the purposes of this section, including 

23 any requirements established by subsection (b). 

24 (i) LIMITATION.—The requirements of this section 

25 shall not apply to any project funded under this Act in 
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1 American Samoa, Guam, the Commonwealth of the North2 ern Mariana Islands, the Commonwealth of Puerto Rico, 

3 or the United States Virgin Islands, unless participation 

4 is requested by the governor of such territories within 1 

5 year of the promulgation of rules under this Act. 

6 PART 2—CLIMATE CHANGE WORKER 

7 ADJUSTMENT ASSISTANCE 

8 SEC. 425. PETITIONS, ELIGIBILITY REQUIREMENTS, AND 

9 DETERMINATIONS. 

10 (a) PETITIONS.— 

11 (1) FILING.—A petition for certification of eli12 gibility to apply for adjustment assistance for a 

13 group of workers under this part may be filed by 

14 any of the following: 

15 (A) The group of workers. 

16 (B) The certified or recognized union or 

17 other duly authorized representative of such 

18 workers. 

19 (C) Employers of such workers, one-stop 

20 operators or one-stop partners (as defined in 

21 section 101 of the Workforce Investment Act of 

22 1998 (29 U.S.C. 2801)), including State em23 ployment security agencies, or the State dis24 located worker unit established under title I of 

25 such Act, on behalf of such workers. 
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1 The petition shall be filed simultaneously with the 

2 Secretary of Labor and with the Governor of the 

3 State in which such workers’ employment site is lo4 cated. 

5 (2) ACTION BY GOVERNORS.—Upon receipt of a 

6 petition filed under paragraph (1), the Governor 

7 shall— 

8 (A) ensure that rapid response activities 

9 and appropriate core and intensive services (as 

10 described in section 134 of the Workforce In11 vestment Act of 1998 (29 U.S.C. 2864)) au12 thorized under other Federal laws are made 

13 available to the workers covered by the petition 

14 to the extent authorized under such laws; and 

15 (B) assist the Secretary in the review of 

16 the petition by verifying such information and 

17 providing such other assistance as the Secretary 

18 may request. 

19 (3) ACTION BY THE SECRETARY.—Upon receipt 

20 of the petition, the Secretary shall promptly publish 

21 notice in the Federal Register and on the website of 

22 the Department of Labor that the Secretary has re23 ceived the petition and initiated an investigation. 

24 (4) HEARINGS.—If the petitioner, or any other 

25 person found by the Secretary to have a substantial 
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1 interest in the proceedings, submits not later than 

2 10 days after the date of the Secretary’s publication 

3 under paragraph (3) a request for a hearing, the 

4 Secretary shall provide for a public hearing and af5 ford such interested persons an opportunity to be 

6 present, to produce evidence, and to be heard. 

7 (b) ELIGIBILITY.— 

8 (1) IN GENERAL.—A group of workers shall be 

9 certified by the Secretary as eligible to apply for ad10 justment assistance under this part pursuant to a 

11 petition filed under subsection (a) if— 

12 (A) the group of workers is employed in— 

13 (i) energy producing and transforming 

14 industries; 

15 (ii) industries dependent upon energy 

16 industries; 

17 (iii) energy-intensive manufacturing 

18 industries; 

19 (iv) consumer goods manufacturing; 

20 or 

21 (v) other industries whose employment 

22 the Secretary determines has been ad23 versely affected by any requirement of title 

24 VII of the Clean Air Act; 
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1 (B) the Secretary determines that a sig2 nificant number or proportion of the workers in 

3 such workers’ employment site have become to4 tally or partially separated, or are threatened to 

5 become totally or partially separated from em6 ployment; and 

7 (C) the sales, production, or delivery of 

8 goods or services have decreased as a result of 

9 any requirement of title VII of the Clean Air 

10 Act, including— 

11 (i) the shift from reliance upon fossil 

12 fuels to other sources of energy, including 

13 renewable energy, that results in the clos14 ing of a facility or layoff of employees at 

15 a facility that mines, produces, processes, 

16 or utilizes fossil fuels to generate elec17 tricity; 

18 (ii) a substantial increase in the cost 

19 of energy required for a manufacturing fa20 cility to produce items whose prices are 

21 competitive in the marketplace, to the ex22 tent the cost is not offset by allowance al23 location to the facility pursuant to title VII 

24 of the Clean Air Act; or 
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1 (iii) other documented occurrences 

2 that the Secretary determines are indica3 tors of an adverse impact on an industry 

4 described in subparagraph (A) as a result 

5 of any requirement of title VII of the 

6 Clean Air Act. 

7 (2) WORKERS IN PUBLIC AGENCIES.—A group 

8 of workers in a public agency shall be certified by 

9 the Secretary as eligible to apply for climate change 

10 adjustment assistance pursuant to a petition filed if 

11 the Secretary determines that a significant number 

12 or proportion of the workers in the public agency 

13 have become totally or partially separated from em14 ployment, or are threatened to become totally or 

15 partially separated as a result of any requirement of 

16 title VII of the Clean Air Act. 

17 (3) ADVERSELY AFFECTED SERVICE WORK18 ERS.—A group of workers shall be certified as eligi19 ble to apply for climate change adjustment assist20 ance pursuant to a petition filed if the Secretary de21 termines that— 

22 (A) a significant number or proportion of 

23 the service workers at an employment site 

24 where a group of workers has been certified by 

25 the Secretary as eligible to apply for adjustment 
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•HR 2454 EH

1 assistance under this part pursuant to para2 graph (1) have become totally or partially sepa3 rated from employment, or are threatened to 

4 become totally or partially separated; and 

5 (B) a loss of business in the firm providing 

6 service workers to an employment site is di7 rectly attributable to one or more of the docu8 mented occurrences listed in paragraph (1)(C). 

9 (c) AUTHORITY TO INVESTIGATE AND COLLECT IN10 FORMATION.— 

11 (1) IN GENERAL.—The Secretary shall, in de12 termining whether to certify a group of workers 

13 under subsection (d), obtain information the Sec14 retary determines to be necessary to make the cer15 tification, through questionnaires and in such other 

16 manner as the Secretary determines appropriate 

17 from— 

18 (A) the workers’ employer; 

19 (B) officials of certified or recognized 

20 unions or other duly authorized representatives 

21 of the group of workers; or 

22 (C) one-stop operators or one-stop partners 

23 (as defined in section 101 of the Workforce In24 vestment Act of 1998 (29 U.S.C. 2801)); or 
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1 (2) VERIFICATION OF INFORMATION.—The Sec2 retary shall require an employer, union, or one-stop 

3 operator or partner to certify all information ob4 tained under paragraph (1) from the employer, 

5 union, or one-stop operator or partner (as the case 

6 may be) on which the Secretary relies in making a 

7 determination under subsection (d), unless the Sec8 retary has a reasonable basis for determining that 

9 such information is accurate and complete without 

10 being certified. 

11 (3) PROTECTION OF CONFIDENTIAL INFORMA12 TION.—The Secretary may not release information 

13 obtained under paragraph (1) that the Secretary 

14 considers to be confidential business information un15 less the employer submitting the confidential busi16 ness information had notice, at the time of submis17 sion, that the information would be released by the 

18 Secretary, or the employer subsequently consents to 

19 the release of the information. Nothing in this para20 graph shall be construed to prohibit the Secretary 

21 from providing such confidential business informa22 tion to a court in camera or to another party under 

23 a protective order issued by a court. 

24 (d) DETERMINATION BY THE SECRETARY OF

25 LABOR.— 
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1 (1) IN GENERAL.—As soon as possible after the 

2 date on which a petition is filed under subsection 

3 (a), but in any event not later than 40 days after 

4 that date, the Secretary, in consultation with the 

5 Secretary of Energy and the Administrator, as nec6 essary, shall determine whether the petitioning 

7 group meets the requirements of subsection (b) and 

8 shall issue a certification of eligibility to apply for 

9 assistance under this part covering workers in any 

10 group which meets such requirements. Each certifi11 cation shall specify the date on which the total or 

12 partial separation began or threatened to begin. 

13 Upon reaching a determination on a petition, the 

14 Secretary shall promptly publish a summary of the 

15 determination in the Federal Register and on the 

16 website of the Department of Labor, together with 

17 the Secretary’s reasons for making such determina18 tion. 

19 (2) ONE YEAR LIMITATION.—A certification 

20 under this section shall not apply to any worker 

21 whose last total or partial separation from the em22 ployment site before the worker’s application under 

23 section 426(a) occurred more than 1 year before the 

24 date of the petition on which such certification was 

25 granted. 
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1 (3) REVOCATION OF CERTIFICATION.—When2 ever the Secretary determines, with respect to any 

3 certification of eligibility of the workers of an em4 ployment site, that total or partial separations from 

5 such site are no longer a result of the factors speci6 fied in subsection (b)(1), the Secretary shall termi7 nate such certification and promptly have notice of 

8 such termination published in the Federal Register 

9 and on the website of the Department of Labor, to10 gether with the Secretary’s reasons for making such 

11 determination. Such termination shall apply only 

12 with respect to total or partial separations occurring 

13 after the termination date specified by the Secretary. 

14 (e) INDUSTRY NOTIFICATION OF ASSISTANCE.— 

15 Upon receiving a notification of a determination under 

16 subsection (d) with respect to a domestic industry the Sec17 retary of Labor shall notify the representatives of the do18 mestic industry affected by the determination, employers 

19 publicly identified by name during the course of the pro20 ceeding relating to the determination, and any certified 

21 or recognized union or, to the extent practicable, other 

22 duly authorized representative of workers employed by 

23 such representatives of the domestic industry, of— 

24 (1) the adjustment allowances, training, and 

25 other benefits available under this part; 
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1 (2) the manner in which to file a petition and 

2 apply for such benefits; and 

3 (3) the availability of assistance in filing such 

4 petitions; 

5 (4) notify the Governor of each State in which 

6 one or more employers in such industry are located 

7 of the Secretary’s determination and the identity of 

8 the employers; and 

9 (5) upon request, provide any assistance that is 

10 necessary to file a petition under subsection (a). 

11 (f) BENEFIT INFORMATION TO WORKERS, PRO12 VIDERS OF TRAINING.— 

13 (1) IN GENERAL.—The Secretary shall provide 

14 full information to workers about the adjustment al15 lowances, training, and other benefits available 

16 under this part and about the petition and applica17 tion procedures, and the appropriate filing dates, for 

18 such allowances, training and services. The Sec19 retary shall provide whatever assistance is necessary 

20 to enable groups of workers to prepare petitions or 

21 applications for program benefits. The Secretary 

22 shall make every effort to insure that cooperating 

23 State agencies fully comply with the agreements en24 tered into under section 426(a) and shall periodically 

25 review such compliance. The Secretary shall inform 
1150 

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1 the State Board for Vocational Education or equiva2 lent agency, the one-stop operators or one-stop part3 ners (as defined in section 101 of the Workforce In4 vestment Act of 1998 (29 U.S.C. 2801), and other 

5 public or private agencies, institutions, and employ6 ers, as appropriate, of each certification issued 

7 under subsection (d) and of projections, if available, 

8 of the needs for training under as a result of such 

9 certification. 

10 (2) NOTICE BY MAIL.—The Secretary shall pro11 vide written notice through the mail of the benefits 

12 available under this part to each worker whom the 

13 Secretary has reason to believe is covered by a cer14 tification made under subsection (d)— 

15 (A) at the time such certification is made, 

16 if the worker was partially or totally separated 

17 from the adversely affected employment before 

18 such certification, or— 

19 (B) at the time of the total or partial sepa20 ration of the worker from the adversely affected 

21 employment, if subparagraph (A) does not 

22 apply. 

23 (3) NEWSPAPERS; WEBSITE.—The Secretary 

24 shall publish notice of the benefits available under 

25 this part to workers covered by each certification 
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1 made under subsection (d) in newspapers of general 

2 circulation in the areas in which such workers reside 

3 and shall make such information available on the 

4 website of the Department of Labor. 

5 SEC. 426. PROGRAM BENEFITS. 

6 (a) CLIMATE CHANGE ADJUSTMENT ALLOWANCE.— 

7 (1) ELIGIBILITY.—Payment of a climate change 

8 adjustment allowance shall be made to an adversely 

9 affected worker covered by a certification under sec10 tion 425(b) who files an application for such allow11 ance for any week of unemployment which begins on 

12 or after the date of such certification, if the fol13 lowing conditions are met: 

14 (A) Such worker’s total or partial separa15 tion before the worker’s application under this 

16 part occurred— 

17 (i) on or after the date, as specified in 

18 the certification under which the worker is 

19 covered, on which total or partial separa20 tion began or threatened to begin in the 

21 adversely affected employment; 

22 (ii) before the expiration of the 2-year 

23 period beginning on the date on which the 

24 determination under section 425(d) was 

25 made; and 
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1 (iii) before the termination date, if 

2 any, determined pursuant to section 

3 425(d)(3). 

4 (B) Such worker had, in the 52-week pe5 riod ending with the week in which such total 

6 or partial separation occurred, at least 26 

7 weeks of full-time employment or 1,040 hours 

8 of part time employment in adversely affected 

9 employment, or, if data with respect to weeks of 

10 employment are not available, equivalent 

11 amounts of employment computed under regu12 lations prescribed by the Secretary. For the 

13 purposes of this paragraph, any week in which 

14 such worker— 

15 (i) is on employer-authorized leave for 

16 purposes of vacation, sickness, injury, ma17 ternity, or inactive duty or active duty 

18 military service for training; 

19 (ii) does not work because of a dis20 ability that is compensable under a work21 men’s compensation law or plan of a State 

22 or the United States; 

23 (iii) had his employment interrupted 

24 in order to serve as a full-time representa25 tive of a labor organization in such firm; or 
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1 (iv) is on call-up for purposes of active 

2 duty in a reserve status in the Armed 

3 Forces of the United States, provided such 

4 active duty is ‘‘Federal service’’ as defined 

5 in section 8521(a)(1) of title 5, United 

6 States Code, 

7 shall be treated as a week of employment. 

8 (C) Such worker is enrolled in a training 

9 program approved by the Secretary under sub10 section (b)(2). 

11 (2) INELIGIBILITY FOR CERTAIN OTHER BENE12 FITS.—An adversely affected worker receiving a pay13 ment under this section shall be ineligible to receive 

14 any other form of unemployment insurance for the 

15 period in which such worker is receiving a climate 

16 change adjustment allowance under this section. 

17 (3) REVOCATION.—If— 

18 (A) the Secretary determines that— 

19 (i) the adversely affected worker— 

20 (I) has failed to begin participa21 tion in the training program the en22 rollment in which meets the require23 ment of paragraph (1)(C); or 
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1 (II) has ceased to participate in 

2 such training program before com3 pleting such training program; and 

4 (ii) there is no justifiable cause for 

5 such failure or cessation; or 

6 (B) the certification made with respect to 

7 such worker under section 425(d) is revoked 

8 under paragraph (3) of such section, 

9 no adjustment allowance may be paid to the ad10 versely affected worker under this part for the week 

11 in which such failure, cessation, or revocation oc12 curred, or any succeeding week, until the adversely 

13 affected worker begins or resumes participation in a 

14 training program approved by the Secretary under 

15 section (b)(2). 

16 (4) WAIVERS OF TRAINING REQUIREMENTS.— 

17 The Secretary may issue a written statement to an 

18 adversely affected worker waiving the requirement to 

19 be enrolled in training described in subsection (b)(2) 

20 if the Secretary determines that it is not feasible or 

21 appropriate for the worker, because of 1 or more of 

22 the following reasons: 

23 (A) RECALL.—The worker has been noti24 fied that the worker will be recalled by the em25 ployer from which the separation occurred. 
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1 (B) MARKETABLE SKILLS.— 

2 (i) IN GENERAL.—The worker pos3 sesses marketable skills for suitable em4 ployment (as determined pursuant to an 

5 assessment of the worker, which may in6 clude the profiling system under section 

7 303(j) of the Social Security Act (42 

8 U.S.C. 503(j)), carried out in accordance 

9 with guidelines issued by the Secretary) 

10 and there is a reasonable expectation of 

11 employment at equivalent wages in the 

12 foreseeable future. 

13 (ii) MARKETABLE SKILLS DEFINED.— 

14 For purposes of clause (i), the term ‘‘mar15 ketable skills’’ may include the possession 

16 of a postgraduate degree from an institu17 tion of higher education (as defined in sec18 tion 102 of the Higher Education Act of 

19 1965 (20 U.S.C. 1002)) or an equivalent 

20 institution, or the possession of an equiva21 lent postgraduate certification in a special22 ized field. 

23 (C) RETIREMENT.—The worker is within 2 

24 years of meeting all requirements for entitle25 ment to either— 
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1 (i) old-age insurance benefits under 

2 title II of the Social Security Act (42 

3 U.S.C. 401 et seq.) (except for application 

4 therefor); or 

5 (ii) a private pension sponsored by an 

6 employer or labor organization. 

7 (D) HEALTH.—The worker is unable to 

8 participate in training due to the health of the 

9 worker, except that a waiver under this sub10 paragraph shall not be construed to exempt a 

11 worker from requirements relating to the avail12 ability for work, active search for work, or re13 fusal to accept work under Federal or State un14 employment compensation laws. 

15 (E) ENROLLMENT UNAVAILABLE.—The 

16 first available enrollment date for the training 

17 of the worker is within 60 days after the date 

18 of the determination made under this para19 graph, or, if later, there are extenuating cir20 cumstances for the delay in enrollment, as de21 termined pursuant to guidelines issued by the 

22 Secretary. 

23 (F) TRAINING NOT AVAILABLE.—Training 

24 described in subsection (b)(2) is not reasonably 

25 available to the worker from either govern-
1157 

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1 mental agencies or private sources (which may 

2 include area career and technical education 

3 schools, as defined in section 3 of the Carl D. 

4 Perkins Career and Technical Education Act of 

5 2006 (20 U.S.C. 2302), and employers), no 

6 training that is suitable for the worker is avail7 able at a reasonable cost, or no training funds 

8 are available. 

9 (5) WEEKLY AMOUNTS.—The climate change 

10 adjustment allowance payable to an adversely af11 fected worker for a week of unemployment shall be 

12 an amount equal to 70 percent of the average weekly 

13 wage of such worker, but in no case shall such 

14 amount exceed the average weekly wage for all work15 ers in the State where the adversely affected worker 

16 resides. 

17 (6) MAXIMUM DURATION OF BENEFITS.—An el18 igible worker may receive a climate change adjust19 ment allowance under this subsection for a period of 

20 not longer than 156 weeks. 

21 (b) EMPLOYMENT SERVICES AND TRAINING.— 

22 (1) INFORMATION AND EMPLOYMENT SERV23 ICES.—The Secretary shall make available, directly 

24 or through agreements with the States under section 

25 427(a) to adversely affected workers covered by a 
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1 certification under section 425(a) the following in2 formation and employment services: 

3 (A) Comprehensive and specialized assess4 ment of skill levels and service needs, including 

5 through— 

6 (i) diagnostic testing and use of other 

7 assessment tools; and 

8 (ii) in-depth interviewing and evalua9 tion to identify employment barriers and 

10 appropriate employment goals. 

11 (B) Development of an individual employ12 ment plan to identify employment goals and ob13 jectives, and appropriate training to achieve 

14 those goals and objectives. 

15 (C) Information on training available in 

16 local and regional areas, information on indi17 vidual counseling to determine which training is 

18 suitable training, and information on how to 

19 apply for such training. 

20 (D) Information on training programs and 

21 other services provided by a State pursuant to 

22 title I of the Workforce Investment Act of 1998 

23 and available in local and regional areas, infor24 mation on individual counseling to determine 
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1 which training is suitable training, and informa2 tion on how to apply for such training. 

3 (E) Information on how to apply for finan4 cial aid, including referring workers to edu5 cational opportunity centers described in section 

6 402F of the Higher Education Act of 1965 (20 

7 U.S.C. 1070a–16), where applicable, and noti8 fying workers that the workers may request fi9 nancial aid administrators at institutions of 

10 higher education (as defined in section 102 of 

11 such Act (20 U.S.C. 1002)) to use the adminis12 trators’ discretion under section 479A of such 

13 Act (20 U.S.C. 1087tt) to use current year in14 come data, rather than preceding year income 

15 data, for determining the amount of need of the 

16 workers for Federal financial assistance under 

17 title IV of such Act (20 U.S.C. 1070 et seq.). 

18 (F) Short-term prevocational services, in19 cluding development of learning skills, commu20 nications skills, interviewing skills, punctuality, 

21 personal maintenance skills, and professional 

22 conduct to prepare individuals for employment 

23 or training. 

24 (G) Individual career counseling, including 

25 job search and placement counseling, during the 
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1 period in which the individual is receiving a cli2 mate change adjustment allowance or training 

3 under this part, and after receiving such train4 ing for purposes of job placement. 

5 (H) Provision of employment statistics in6 formation, including the provision of accurate 

7 information relating to local, regional, and na8 tional labor market areas, including— 

9 (i) job vacancy listings in such labor 

10 market areas; 

11 (ii) information on jobs skills nec12 essary to obtain jobs identified in job va13 cancy listings described in subparagraph 

14 (A); 

15 (iii) information relating to local occu16 pations that are in demand and earnings 

17 potential of such occupations; and 

18 (iv) skills requirements for local occu19 pations described in subparagraph (C). 

20 (I) Information relating to the availability 

21 of supportive services, including services relat22 ing to child care, transportation, dependent 

23 care, housing assistance, and need-related pay24 ments that are necessary to enable an indi25 vidual to participate in training. 
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1 (2) TRAINING.— 

2 (A) APPROVAL OF AND PAYMENT FOR

3 TRAINING.—If the Secretary determines, with 

4 respect to an adversely affected worker that— 

5 (i) there is no suitable employment 

6 (which may include technical and profes7 sional employment) available for an ad8 versely affected worker; 

9 (ii) the worker would benefit from ap10 propriate training; 

11 (iii) there is a reasonable expectation 

12 of employment following completion of 

13 such training; 

14 (iv) training approved by the Sec15 retary is reasonably available to the worker 

16 from either governmental agencies or pri17 vate sources (including area career and 

18 technical education schools, as defined in 

19 section 3 of the Carl D. Perkins Career 

20 and Technical Education Act of 2006, and 

21 employers); 

22 (v) the worker is qualified to under23 take and complete such training; and 

24 (vi) such training is suitable for the 

25 worker and available at a reasonable cost, 
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1 the Secretary shall approve such training for 

2 the worker. Upon such approval, the worker 

3 shall be entitled to have payment of the costs 

4 of such training (subject to the limitations im5 posed by this section) paid on the worker’s be6 half by the Secretary directly or through a 

7 voucher system. 

8 (B) DISTRIBUTION.—The Secretary shall 

9 establish procedures for the distribution of the 

10 funds to States to carry out the training pro11 grams approved under this paragraph, and shall 

12 make an initial distribution of the funds made 

13 available as soon as practicable after the begin14 ning of each fiscal year. 

15 (C) ADDITIONAL RULES REGARDING AP16 PROVAL OF AND PAYMENT FOR TRAINING.— 

17 (i) For purposes of applying subpara18 graph (A)(iii), a reasonable expectation of 

19 employment does not require that employ20 ment opportunities for a worker be avail21 able, or offered, immediately upon the 

22 completion of training approved under 

23 such subparagraph. 

24 (ii) If the costs of training an ad25 versely affected worker are paid by the 
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1 Secretary under subparagraph (A), no 

2 other payment for such costs may be made 

3 under any other provision of Federal law. 

4 No payment may be made under subpara5 graph (A) of the costs of training an ad6 versely affected worker or an adversely af7 fected incumbent worker if such costs— 

8 (I) have already been paid under 

9 any other provision of Federal law; or 

10 (II) are reimbursable under any 

11 other provision of Federal law and a 

12 portion of such costs have already 

13 been paid under such other provision 

14 of Federal law. 

15 The provisions of this clause shall not 

16 apply to, or take into account, any funds 

17 provided under any other provision of Fed18 eral law which are used for any purpose 

19 other than the direct payment of the costs 

20 incurred in training a particular adversely 

21 affected worker, even if such use has the 

22 effect of indirectly paying or reducing any 

23 portion of the costs involved in training the 

24 adversely affected worker. 
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1 (D) TRAINING PROGRAMS.—The training 

2 programs that may be approved under subpara3 graph (A) include— 

4 (i) employer-based training, includ5 ing— 

6 (I) on-the-job training if ap7 proved by the Secretary under sub8 section (c); and 

9 (II) joint labor-management ap10 prenticeship programs; 

11 (ii) any training program provided by 

12 a State pursuant to title I of the Work13 force Investment Act of 1998; 

14 (iii) any training program approved 

15 by a private industry council established 

16 under section 102 of such Act; 

17 (iv) any programs in career and tech18 nical education described in section 3(5) of 

19 the Carl D. Perkins Career and Technical 

20 Education Act of 2006; 

21 (v) any program of remedial edu22 cation; 

23 (vi) any program of prerequisite edu24 cation or coursework required to enroll in 
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1 training that may be approved under this 

2 paragraph; 

3 (vii) any training program for which 

4 all, or any portion, of the costs of training 

5 the worker are paid— 

6 (I) under any Federal or State 

7 program other than this part; or 

8 (II) from any source other than 

9 this part; 

10 (viii) any training program or 

11 coursework at an accredited institution of 

12 higher education (described in section 102 

13 of the Higher Education Act of 1965 (20 

14 U.S.C. 1002)), including a training pro15 gram or coursework for the purpose of— 

16 (I) obtaining a degree or certifi17 cation; or 

18 (II) completing a degree or cer19 tification that the worker had pre20 viously begun at an accredited institu21 tion of higher education; and 

22 (ix) any other training program ap23 proved by the Secretary. 

24 (3) SUPPLEMENTAL ASSISTANCE.—The Secretary 

25 may, as appropriate, authorize supplemental assistance 
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1 that is necessary to defray reasonable transportation and 

2 subsistence expenses for separate maintenance in a case 

3 in which training for a worker is provided in a facility that 

4 is not within commuting distance of the regular place of 

5 residence of the worker. 

6 (c) ON-THE-JOB TRAINING REQUIREMENTS.— 

7 (1) IN GENERAL.—The Secretary may approve 

8 on-the-job training for any adversely affected worker 

9 if— 

10 (A) the Secretary determines that on-the11 job training— 

12 (i) can reasonably be expected to lead 

13 to suitable employment with the employer 

14 offering the on-the-job training; 

15 (ii) is compatible with the skills of the 

16 worker; 

17 (iii) includes a curriculum through 

18 which the worker will gain the knowledge 

19 or skills to become proficient in the job for 

20 which the worker is being trained; and 

21 (iv) can be measured by benchmarks 

22 that indicate that the worker is gaining 

23 such knowledge or skills; and 
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1 (B) the State determines that the on-the2 job training program meets the requirements of 

3 clauses (iii) and (iv) of subparagraph (A). 

4 (2) MONTHLY PAYMENTS.—The Secretary shall 

5 pay the costs of on-the-job training approved under 

6 paragraph (1) in monthly installments. 

7 (3) CONTRACTS FOR ON-THE-JOB TRAINING.— 

8 (A) IN GENERAL.—The Secretary shall en9 sure, in entering into a contract with an em10 ployer to provide on-the-job training to a work11 er under this subsection, that the skill require12 ments of the job for which the worker is being 

13 trained, the academic and occupational skill 

14 level of the worker, and the work experience of 

15 the worker are taken into consideration. 

16 (B) TERM OF CONTRACT.—Training under 

17 any such contract shall be limited to the period 

18 of time required for the worker receiving on19 the-job training to become proficient in the job 

20 for which the worker is being trained, but may 

21 not exceed 156 weeks in any case. 

22 (4) EXCLUSION OF CERTAIN EMPLOYERS.—The 

23 Secretary shall not enter into a contract for on-the24 job training with an employer that exhibits a pattern 
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1 of failing to provide workers receiving on-the-job 

2 training from the employer with— 

3 (A) continued, long-term employment as 

4 regular employees; and 

5 (B) wages, benefits, and working condi6 tions that are equivalent to the wages, benefits, 

7 and working conditions provided to regular em8 ployees who have worked a similar period of 

9 time and are doing the same type of work as 

10 workers receiving on-the-job training from the 

11 employer. 

12 (d) ADMINISTRATIVE AND EMPLOYMENT SERVICES

13 FUNDING.— 

14 (1) ADMINISTRATIVE FUNDING.—In addition to 

15 any funds made available to a State to carry out this 

16 section for a fiscal year, the State shall receive for 

17 the fiscal year a payment in an amount that is equal 

18 to 15 percent of the amount of such funds and 

19 shall— 

(A) use not more than 2 20 ⁄3 of such payment 

21 for the administration of the climate change ad22 justment assistance for workers program under 

23 this part, including for— 

24 (i) processing waivers of training re25 quirements under subsection (a)(4); 
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1 (ii) collecting, validating, and report2 ing data required under this part; and 

3 (iii) administering the Climate Change 

4 Adjustment Assistance Allowance pay5 ments; and 

(B) use not less than 1 6 ⁄3 of such payment 

7 for information and employment services under 

8 subsection (b)(1). 

9 (2) EMPLOYMENT SERVICES FUNDING.— 

10 (A) IN GENERAL.—In addition to any 

11 funds made available to a State to carry out 

12 subsection (b)(2) and the payment under para13 graph (1) for a fiscal year, the Secretary shall 

14 provide to the State for the fiscal year a reason15 able payment for the purpose of providing em16 ployment and services under subsection (b)(1). 

17 (B) VOLUNTARY RETURN OF FUNDS.—A 

18 State that receives a payment under subpara19 graph (A) may decline or otherwise return such 

20 payment to the Secretary. 

21 (e) JOB SEARCH ALLOWANCES.—The Secretary of 

22 Labor may provide adversely affected workers a one-time 

23 job search allowance in accordance with regulations pre24 scribed by the Secretary. Any job search allowance pro-
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1 vided shall be available only under the following cir2 cumstances and conditions: 

3 (1) The worker is no longer eligible for the cli4 mate change adjustment allowance under subsection 

5 (a) and has completed the training program required 

6 by subsection (a)(1)(E). 

7 (2) The Secretary determines that the worker 

8 cannot reasonably be expected to secure suitable em9 ployment in the commuting area in which the worker 

10 resides. 

11 (3) An allowance granted shall provide reim12 bursement to the worker of all necessary job search 

13 expenses as prescribed by the Secretary in regula14 tions. Such reimbursement under this subsection 

15 may not exceed $1,500 for any worker. 

16 (f) RELOCATION ALLOWANCE AUTHORIZED.— 

17 (1) IN GENERAL.—Any adversely affected work18 er covered by a certification issued under section 

19 425 may file an application for a relocation allow20 ance with the Secretary, and the Secretary may 

21 grant the relocation allowance, subject to the terms 

22 and conditions of this subsection. 

23 (2) CONDITIONS FOR GRANTING ALLOWANCE.— 

24 A relocation allowance may be granted if all of the 

25 following terms and conditions are met: 
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1 (A) ASSIST AN ADVERSELY AFFECTED

2 WORKER.—The relocation allowance will assist 

3 an adversely affected worker in relocating with4 in the United States. 

5 (B) LOCAL EMPLOYMENT NOT AVAIL6 ABLE.—The Secretary determines that the 

7 worker cannot reasonably be expected to secure 

8 suitable employment in the commuting area in 

9 which the worker resides. 

10 (C) TOTAL SEPARATION.—The worker is 

11 totally separated from employment at the time 

12 relocation commences. 

13 (D) SUITABLE EMPLOYMENT OBTAINED.— 

14 The worker— 

15 (i) has obtained suitable employment 

16 affording a reasonable expectation of long17 term duration in the area in which the 

18 worker wishes to relocate; or 

19 (ii) has obtained a bona fide offer of 

20 such employment. 

21 (E) APPLICATION.—The worker filed an 

22 application with the Secretary at such time and 

23 in such manner as the Secretary shall specify 

24 by regulation. 
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1 (3) AMOUNT OF ALLOWANCE.—The relocation 

2 allowance granted to a worker under paragraph (1) 

3 includes— 

4 (A) all reasonable and necessary expenses 

5 (including, subsistence and transportation ex6 penses at levels not exceeding amounts pre7 scribed by the Secretary in regulations) in8 curred in transporting the worker, the worker’s 

9 family, and household effects; and 

10 (B) a lump sum equivalent to 3 times the 

11 worker’s average weekly wage, up to a max12 imum payment of $1,500. 

13 (4) LIMITATIONS.—A relocation allowance may 

14 not be granted to a worker unless— 

15 (A) the relocation occurs within 182 days 

16 after the filing of the application for relocation 

17 assistance; or 

18 (B) the relocation occurs within 182 days 

19 after the conclusion of training, if the worker 

20 entered a training program approved by the 

21 Secretary under subsection (b)(2). 

22 (g) HEALTH INSURANCE CONTINUATION.—Not later 

23 than 1 year after the date of enactment of this part, the 

24 Secretary of Labor shall prescribe regulations to provide, 

25 for the period in which an adversely affected worker is 
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1 participating in a training program described in sub2 section (b)(2), 80 percent of the monthly premium of any 

3 health insurance coverage that an adversely affected work4 er was receiving from such worker’s employer prior to the 

5 separation from employment described in section 425(b), 

6 to be paid to any health care insurance plan designated 

7 by the adversely affected worker receiving an allowance 

8 under this section. 

9 SEC. 427. GENERAL PROVISIONS. 

10 (a) AGREEMENTS WITH STATES.— 

11 (1) IN GENERAL.—The Secretary is authorized 

12 on behalf of the United States to enter into an 

13 agreement with any State, or with any State agency 

14 (referred to in this section as ‘‘cooperating States’’ 

15 and ‘‘cooperating States agencies’’ respectively). 

16 Under such an agreement, the cooperating State 

17 agency— 

18 (A) as agent of the United States, shall re19 ceive applications for, and shall provide, pay20 ments on the basis provided in this part; 

21 (B) in accordance with paragraph (6), 

22 shall make available to adversely affected work23 ers covered by a certification under section 

24 425(d) the employment services described in 

25 section 426(b)(1); 
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1 (C) shall make any certifications required 

2 under section 425(d); 

3 (D) shall otherwise cooperate with the Sec4 retary and with other State and Federal agen5 cies in providing payments and services under 

6 this part. 

7 Each agreement under this section shall provide the 

8 terms and conditions upon which the agreement may 

9 be amended, suspended, or terminated. 

10 (2) FORM AND MANNER OF DATA.—Each 

11 agreement under this section shall— 

12 (A) provide the Secretary with the author13 ity to collect any data the Secretary determines 

14 necessary to meet the requirements of this part; 

15 and 

16 (B) specify the form and manner in which 

17 any such data requested by the Secretary shall 

18 be reported. 

19 (3) RELATIONSHIP TO UNEMPLOYMENT INSUR20 ANCE.—Each agreement under this section shall 

21 provide that an adversely affected worker receiving 

22 a climate change adjustment allowance under this 

23 part shall not be eligible for unemployment insur24 ance otherwise payable to such worker under the 

25 laws of the State. 
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1 (4) REVIEW.—A determination by a cooper2 ating State agency with respect to entitlement to 

3 program benefits under an agreement is subject to 

4 review in the same manner and to the same extent 

5 as determinations under the applicable State law 

6 and only in that manner and to that extent. 

7 (5) COORDINATION.—Any agreement entered 

8 into under this section shall provide for the coordi9 nation of the administration of the provisions for 

10 employment services, training, and supplemental as11 sistance under section 426 and under title I of the 

12 Workforce Investment Act of 1998 upon such terms 

13 and conditions as are established by the Secretary in 

14 consultation with the States and set forth in such 

15 agreement. Any agency of the State jointly admin16 istering such provisions under such agreement shall 

17 be considered to be a cooperating State agency for 

18 purposes of this part. 

19 (6) RESPONSIBILITIES OF COOPERATING AGEN20 CIES.—Each cooperating State agency shall, in car21 rying out paragraph (1)(B)— 

22 (A) advise each worker who applies for un23 employment insurance of the benefits under this 

24 part and the procedures and deadlines for ap25 plying for such benefits; 
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1 (B) facilitate the early filing of petitions 

2 under section 425(a) for any workers that the 

3 agency considers are likely to be eligible for 

4 benefits under this part; 

5 (C) advise each adversely affected worker 

6 to apply for training under section 426(b) be7 fore, or at the same time, the worker applies for 

8 climate change adjustment allowances under 

9 section 426(a); 

10 (D) perform outreach to, intake of, and 

11 orientation for adversely affected workers and 

12 adversely affected incumbent workers covered 

13 by a certification under section 426(a) with re14 spect to assistance and benefits available under 

15 this part; 

16 (E) make employment services described in 

17 section 426(b)(1) available to adversely affected 

18 workers and adversely affected incumbent work19 ers covered by a certification under section 

20 425(d) and, if funds provided to carry out this 

21 part are insufficient to make such services 

22 available, make arrangements to make such 

23 services available through other Federal pro24 grams; and 
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1 (F) provide the benefits and reemployment 

2 services under this part in a manner that is 

3 necessary for the proper and efficient adminis4 tration of this part, including the use of state 

5 agency personnel employed in accordance with a 

6 merit system of personnel administration stand7 ards, including— 

8 (i) making determinations of eligibility 

9 for, and payment of, climate change read10 justment allowances and health care ben11 efit replacement amounts; 

12 (ii) developing recommendations re13 garding payments as a bridge to retire14 ment and lump sum payments to pension 

15 plans in accordance with this subsection; 

16 and 

17 (iii) the provision of reemployment 

18 services to eligible workers, including refer19 ral to training services. 

20 (7) In order to promote the coordination of 

21 workforce investment activities in each State with 

22 activities carried out under this part, any agreement 

23 entered into under this section shall provide that the 

24 State shall submit to the Secretary, in such form as 

25 the Secretary may require, the description and infor-
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1 mation described in paragraphs (8) and (14) of sec2 tion 112(b) of the Workforce Investment Act of 

3 1998 (29 U.S.C. 2822(b)) and a description of the 

4 State’s rapid response activities under section 

5 221(a)(2)(A). 

6 (8) CONTROL MEASURES.— 

7 (A) IN GENERAL.—The Secretary shall re8 quire each cooperating State and cooperating 

9 State agency to implement effective control 

10 measures and to effectively oversee the oper11 ation and administration of the climate change 

12 adjustment assistance program under this part, 

13 including by means of monitoring the operation 

14 of control measures to improve the accuracy 

15 and timeliness of the data being collected and 

16 reported. 

17 (B) DEFINITION.—For purposes of sub18 paragraph (A), the term ‘‘control measures’’ 

19 means measures that— 

20 (i) are internal to a system used by a 

21 State to collect data; and 

22 (ii) are designed to ensure the accu23 racy and verifiability of such data. 

24 (9) DATA REPORTING.— 
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1 (A) IN GENERAL.—Any agreement entered 

2 into under this section shall require the cooper3 ating State or cooperating State agency to re4 port to the Secretary on a quarterly basis com5 prehensive performance accountability data, to 

6 consist of— 

7 (i) the core indicators of performance 

8 described in subparagraph (B)(i); 

9 (ii) the additional indicators of per10 formance described in subparagraph 

11 (B)(ii), if any; and 

12 (iii) a description of efforts made to 

13 improve outcomes for workers under the 

14 climate change adjustment assistance pro15 gram. 

16 (B) CORE INDICATORS DESCRIBED.— 

17 (i) IN GENERAL.—The core indicators 

18 of performance described in this subpara19 graph are— 

20 (I) the percentage of workers re21 ceiving benefits under this part who 

22 are employed during the second cal23 endar quarter following the calendar 

24 quarter in which the workers cease re25 ceiving such benefits; 
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1 (II) the percentage of such work2 ers who are employed in each of the 

3 third and fourth calendar quarters fol4 lowing the calendar quarter in which 

5 the workers cease receiving such bene6 fits; and 

7 (III) the earnings of such work8 ers in each of the third and fourth 

9 calendar quarters following the cal10 endar quarter in which the workers 

11 cease receiving such benefits. 

12 (ii) ADDITIONAL INDICATORS.—The 

13 Secretary and a cooperating State or co14 operating State agency may agree upon 

15 additional indicators of performance for 

16 the climate change adjustment assistance 

17 program under this part, as appropriate. 

18 (C) STANDARDS WITH RESPECT TO RELI19 ABILITY OF DATA.—In preparing the quarterly 

20 report required by subparagraph (A), each co21 operating State or cooperating State agency 

22 shall establish procedures that are consistent 

23 with guidelines to be issued by the Secretary to 

24 ensure that the data reported are valid and reli25 able. 
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1 (10) VERIFICATION OF ELIGIBILITY FOR PRO2 GRAM BENEFITS.— 

3 (A) IN GENERAL.—An agreement under 

4 this section shall provide that the State shall 

5 periodically redetermine that a worker receiving 

6 benefits under this part who is not a citizen or 

7 national of the United States remains in a sat8 isfactory immigration status. Once satisfactory 

9 immigration status has been initially verified 

10 through the immigration status verification sys11 tem described in section 1137(d) of the Social 

12 Security Act (42 U.S.C. 1320b–7(d)) for pur13 poses of establishing a worker’s eligibility for 

14 unemployment compensation, the State shall 

15 reverify the worker’s immigration status if the 

16 documentation provided during initial 

17 verification will expire during the period in 

18 which that worker is potentially eligible to re19 ceive benefits under this part. The State shall 

20 conduct such redetermination in a timely man21 ner, utilizing the immigration status verification 

22 system described in section 1137(d) of the So23 cial Security Act (42 U.S.C. 1320b–7(d)). 

24 (B) PROCEDURES.—The Secretary shall 

25 establish procedures to ensure the uniform ap-
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1 plication by the States of the requirements of 

2 this paragraph. 

3 (b) ADMINISTRATION ABSENT STATE AGREE4 MENT.— 

5 (1) In any State where there is no agreement 

6 in force between a State or its agency under sub7 section (a), the Secretary shall promulgate regula8 tions for the performance of all necessary functions 

9 under section 426, including provision for a fair 

10 hearing for any worker whose application for pay11 ments is denied. 

12 (2) A final determination under paragraph (1) 

13 with respect to entitlement to program benefits 

14 under section 426 is subject to review by the courts 

15 in the same manner and to the same extent as is 

16 provided by section 205(g) of the Social Security Act 

17 (42 U.S.C. 405(g)). 

18 (c) PROHIBITION ON CONTRACTING WITH PRIVATE

19 ENTITIES.—Neither the Secretary nor a State may con20 tract with any private for-profit or nonprofit entity for the 

21 administration of the climate change adjustment assist22 ance program under this part. 

23 (d) PAYMENT TO THE STATES.— 

24 (1) IN GENERAL.—The Secretary shall from 

25 time to time certify to the Secretary of the Treasury 
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1 for payment to each cooperating State the sums nec2 essary to enable such State as agent of the United 

3 States to make payments provided for by this part. 

4 (2) RESTRICTION.—All money paid a State 

5 under this subsection shall be used solely for the 

6 purposes for which it is paid; and money so paid 

7 which is not used for such purposes shall be re8 turned, at the time specified in the agreement under 

9 this section, to the Secretary of the Treasury. 

10 (3) BONDS.—Any agreement under this section 

11 may require any officer or employee of the State cer12 tifying payments or disbursing funds under the 

13 agreement or otherwise participating in the perform14 ance of the agreement, to give a surety bond to the 

15 United States in such amount as the Secretary may 

16 deem necessary, and may provide for the payment of 

17 the cost of such bond from funds for carrying out 

18 the purposes of this part. 

19 (e) LABOR STANDARDS.— 

20 (1) PROHIBITION ON DISPLACEMENT.—An indi21 vidual in an apprenticeship program or on-the-job 

22 training program under this part shall not displace 

23 (including a partial displacement, such as a reduc24 tion in the hours of non-overtime work, wages, or 

25 employment benefits) any employed employee. 
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1 (2) PROHIBITION ON IMPAIRMENT OF CON2 TRACTS.—An apprenticeship program or on-the-job 

3 raining program under this Act shall not impair an 

4 existing contract for services or collective bargaining 

5 agreement, and no such activity that would be incon6 sistent with the terms of a collective bargaining 

7 agreement shall be undertaken without the written 

8 concurrence of the labor organization and employer 

9 concerned. 

10 (3) ADDITIONAL STANDARDS.—The Secretary, 

11 or a State acting under an agreement described in 

12 subsection (a) may pay the costs of on-the-job train13 ing, notwithstanding any other provision of this sec14 tion, only if— 

15 (A) in the case of training which would be 

16 inconsistent with the terms of a collective bar17 gaining agreement, the written concurrence of 

18 the labor organization concerned has been ob19 tained; 

20 (B) the job for which such adversely af21 fected worker is being trained is not being cre22 ated in a promotional line that will infringe in 

23 any way upon the promotional opportunities of 

24 currently employed individuals; 
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1 (C) such training is not for the same occu2 pation from which the worker was separated 

3 and with respect to which such worker’s group 

4 was certified pursuant to section 425(d); 

5 (D) the employer is provided reimburse6 ment of not more than 50 percent of the wage 

7 rate of the participant, for the cost of providing 

8 the training and additional supervision related 

9 to the training; and 

10 (E) the employer has not received payment 

11 under with respect to any other on-the-job 

12 training provided by such employer which failed 

13 to meet the requirements of subparagraphs (A) 

14 through (D). 

15 (f) DEFINITIONS.—As used in this part the following 

16 definitions apply: 

17 (1) The term ‘‘adversely affected employment’’ 

18 means employment at an employment site, if work19 ers at such site are eligible to apply for adjustment 

20 assistance under this part. 

21 (2) The term ‘‘adversely affected worker’’ 

22 means an individual who has been totally or partially 

23 separated from employment and is eligible to apply 

24 for adjustment assistance under this part. 
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(3) The term ‘‘average weekly wage’’ means 1 1 ⁄13

2 of the total wages paid to an individual in the quar3 ter in which the individual’s total wages were highest 

4 among the first 4 of the last 5 completed calendar 

5 quarters immediately before the quarter in which oc6 curs the week with respect to which the computation 

7 is made. Such week shall be the week in which total 

8 separation occurred, or, in cases where partial sepa9 ration is claimed, an appropriate week, as defined in 

10 regulations prescribed by the Secretary. 

11 (4) The term ‘‘average weekly hours’’ means 

12 the average hours worked by the individual (exclud13 ing overtime) in the employment from which he has 

14 been or claims to have been separated in the 52 

15 weeks (excluding weeks during which the individual 

16 was sick or on vacation) preceding the week speci17 fied in the last sentence of paragraph (4). 

18 (5) The term ‘‘benefit period’’ means, with re19 spect to an individual— 

20 (A) the benefit year and any ensuing pe21 riod, as determined under applicable State law, 

22 during which the individual is eligible for reg23 ular compensation, additional compensation, or 

24 extended compensation; or 
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1 (B) the equivalent to such a benefit year 

2 or ensuing period provided for under the appli3 cable Federal unemployment insurance law. 

4 (6) The term ‘‘consumer goods manufacturing’’ 

5 means the electrical equipment, appliance, and com6 ponent manufacturing industry and transportation 

7 equipment manufacturing. 

8 (7) The term ‘‘employment site’’ means a single 

9 facility or site of employment. 

10 (8) The term ‘‘energy-intensive manufacturing 

11 industries’’ means all industrial sectors, entities, or 

12 groups of entities that meet the energy or green13 house gas intensity criteria in section 

14 765(b)(2)(A)(i) of the Clean Air Act based on the 

15 most recent data available. 

16 (9) The term ‘‘energy producing and trans17 forming industries’’ means the coal mining industry, 

18 oil and gas extraction, electricity power generation, 

19 transmission and distribution, and natural gas dis20 tribution. 

21 (10) The term ‘‘industries dependent on energy 

22 industries’’ means rail transportation and pipeline 

23 transportation. 
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1 (11) The term ‘‘on-the-job training’’ means 

2 training provided by an employer to an individual 

3 who is employed by the employer. 

4 (12) The terms ‘‘partial separation’’ and ‘‘par5 tially separated’’ refer, with respect to an individual 

6 who has not been totally separated, that such indi7 vidual has had— 

8 (A) his or her hours of work reduced to 80 

9 percent or less of his average weekly hours in 

10 adversely affected employment; and 

11 (B) his or her wages reduced to 80 percent 

12 or less of his average weekly wage in such ad13 versely affected employment. 

14 (13) The term ‘‘public agency’’ means a depart15 ment or agency of a State or political subdivision of 

16 a State or of the Federal Government. 

17 (14) The term ‘‘Secretary’’ means the Secretary 

18 of Labor. 

19 (15) The term ‘‘service workers’’ means work20 ers supplying support or auxiliary services to an em21 ployment site. 

22 (16) The term ‘‘State agency’’ means the agen23 cy of the State which administers the State law. 

24 (17) The term ‘‘State law’’ means the unem25 ployment insurance law of the State approved by the 
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1 Secretary of Labor under section 3304 of the Inter2 nal Revenue Code of 1954. 

3 (18) The terms ‘‘total separation’’ and ‘‘totally 

4 separated’’ refer to the layoff or severance of an in5 dividual from employment with an employer in which 

6 adversely affected employment exists. 

7 (19) The term ‘‘unemployment insurance’’ 

8 means the unemployment compensation payable to 

9 an individual under any State law or Federal unem10 ployment compensation law, including chapter 85 of 

11 title 5, United States Code, and the Railroad Unem12 ployment Insurance Act. The terms ‘‘regular com13 pensation’’, ‘‘additional compensation’’, and ‘‘ex14 tended compensation’’ have the same respective 

15 meanings that are given them in section 205(2), (3), 

16 and (4) of the Federal-State Extended Unemploy17 ment Compensation Act of 1970 (26 U.S.C. 3304 

18 note). 

19 (20) The term ‘‘week’’ means a week as defined 

20 in the applicable State law. 

21 (21) The term ‘‘week of unemployment’’ means 

22 a week of total, part-total, or partial unemployment 

23 as determined under the applicable State law or 

24 Federal unemployment insurance law. 
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1 (g) SPECIAL RULE WITH RESPECT TO MILITARY

2 SERVICE.— 

3 (1) IN GENERAL.—Notwithstanding any other 

4 provision of this part, the Secretary may waive any 

5 requirement of this part that the Secretary deter6 mines is necessary to ensure that an adversely af7 fected worker who is a member of a reserve compo8 nent of the Armed Forces and serves a period of 

9 duty described in paragraph (2) is eligible to receive 

10 a climate change adjustment allowance, training, 

11 and other benefits under this part in the same man12 ner and to the same extent as if the worker had not 

13 served the period of duty. 

14 (2) PERIOD OF DUTY DESCRIBED.—An ad15 versely affected worker serves a period of duty de16 scribed in this paragraph if, before completing train17 ing under this part, the worker— 

18 (A) serves on active duty for a period of 

19 more than 30 days under a call or order to ac20 tive duty of more than 30 days; or 

21 (B) in the case of a member of the Army 

22 National Guard of the United States or Air Na23 tional Guard of the United States, performs 

24 full-time National Guard duty under section 

25 502(f) of title 32, United States Code, for 30 
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1 consecutive days or more when authorized by 

2 the President or the Secretary of Defense for 

3 the purpose of responding to a national emer4 gency declared by the President and supported 

5 by Federal funds. 

6 (h) FRAUD AND RECOVERY OF OVERPAYMENTS.— 

7 (1) RECOVERY OF PAYMENTS TO WHICH AN IN8 DIVIDUAL WAS NOT ENTITLED.—If the Secretary or 

9 a court of competent jurisdiction determines that 

10 any person has received any payment under this 

11 part to which the individual was not entitled, such 

12 individual shall be liable to repay such amount to 

13 the Secretary, as the case may be, except that the 

14 Secretary shall waive such repayment if such agency 

15 or the Secretary determines that— 

16 (A) the payment was made without fault 

17 on the part of such individual; and 

18 (B) requiring such repayment would cause 

19 a financial hardship for the individual (or the 

20 individual’s household, if applicable) when tak21 ing into consideration the income and resources 

22 reasonably available to the individual (or house23 hold) and other ordinary living expenses of the 

24 individual (or household). 
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1 (2) MEANS OF RECOVERY.—Unless an overpay2 ment is otherwise recovered, or waived under para3 graph (1), the Secretary shall recover the overpay4 ment by deductions from any sums payable to such 

5 person under this part, under any Federal unem6 ployment compensation law or other Federal law ad7 ministered by the Secretary which provides for the 

8 payment of assistance or an allowance with respect 

9 to unemployment. Any amount recovered under this 

10 section shall be returned to the Treasury of the 

11 United States. 

12 (i) REGULATIONS.—The Secretary shall prescribe 

13 such regulations as may be necessary to carry out the pro14 visions of this part. 

15 (j) STUDY ON OLDER WORKERS.—The Secretary 

16 shall conduct a study examine the circumstances of older 

17 adversely affected workers and the ability of such workers 

18 to access their retirement benefits. The Secretary shall 

19 transmit a report to Congress not later than 2 years after 

20 the date of enactment of this part on the findings of the 

21 study and the Secretary’s recommendations on how to en22 sure that adversely affected workers within 2 years of re23 tirement are able to access their retirement benefits. 

24 (k) SPENDING LIMIT.—For each fiscal year, the total 

25 amount of funds disbursed for the purposes described in 
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1 section 426 shall not exceed the amount deposited in that 

2 fiscal year into the Climate Change Worker Assistance 

3 Fund established under section 782(j) of the Clean Air 

4 Act. The annual spending limit for any succeeding year 

5 shall be increased by the difference, if any, between the 

6 amount of the prior year’s disbursements and the spend7 ing limitation for that year. The Secretary shall promul8 gate rules to ensure that this spending limit is not exceed9 ed. Such rules shall provide that workers who receive any 

10 of the benefits described in section 426 receive full bene11 fits, and shall include the establishment of a waiting list 

12 for workers in the event that the requests for assistance 

13 exceed the spending limit. 

14 Subtitle C—Consumer Assistance 

15 SEC. 431. ENERGY REFUND PROGRAM. 

16 The Social Security Act (42 U.S.C. 201 et seq.) is 

17 amended by adding at the end the following: 

18 ‘‘TITLE XXII—ENERGY REFUND 

19 PROGRAM 

20 ‘‘SEC. 2201. ENERGY REFUND PROGRAM. 

21 ‘‘(a) IN GENERAL.—The Secretary shall formulate 

22 and administer the program provided for in this section, 

23 which shall be known as the ‘Energy Refund Program’, 

24 and under which eligible low-income households are pro25 vided cash payments to reimburse the households for the 
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1 estimated loss in their purchasing power resulting from 

2 the American Clean Energy and Security Act of 2009. 

3 ‘‘(b) ENTITLEMENT OF ELIGIBLE HOUSEHOLDS TO

4 CASH PAYMENTS.—At the request of the State agency of 

5 a State, each eligible low-income household in the State 

6 shall be entitled to receive monthly cash payments under 

7 this section in an amount equal to the monthly energy re8 fund amount determined under subsection (d). 

9 ‘‘(c) ELIGIBILITY.— 

10 ‘‘(1) ELIGIBLE HOUSEHOLDS.—A household 

11 shall be considered to be an eligible low-income 

12 household for purposes of this section if— 

13 ‘‘(A) the gross income of the household 

14 does not exceed the greater of— 

15 ‘‘(i) 150 percent of the poverty line; 

16 or 

17 ‘‘(ii) the greatest amount of household 

18 gross income in respect of which a benefit 

19 could be payable under subsection 

20 (d)(2)(B); 

21 ‘‘(B) the State agency of the State in 

22 which the household is located determines that 

23 the household is participating in— 

24 ‘‘(i) the Supplemental Nutrition As25 sistance Program authorized by the Food 
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1 and Nutrition Act of 2008 (7 U.S.C. 2011 

2 et seq.); 

3 ‘‘(ii) the Food Distribution Program 

4 on Indian Reservations authorized by sec5 tion 4(b) of such Act (7 U.S.C. 2013(b)); 

6 or 

7 ‘‘(iii) the program for nutrition assist8 ance in Puerto Rico or American Samoa 

9 under section 19 of such Act (7 U.S.C. 

10 2028); 

11 ‘‘(C) the household consists of a single in12 dividual or a married couple, and— 

13 ‘‘(i) receives the subsidy described in 

14 section 1860D–14 of this Act (42 U.S.C. 

15 1395w–114); or 

16 ‘‘(ii)(I) participates in the program 

17 under title XVIII of this Act; and 

18 ‘‘(II) meets the income requirements 

19 described in section 1860D–14(a)(1) or 

20 (a)(2) of this Act (42 U.S.C. 1395w– 

21 114(a)(1) or (a)(2)); or 

22 ‘‘(D) the household consists of a single in23 dividual or a married couple, and receives bene24 fits under the supplemental security income 
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1 program under title XVI of this Act (42 U.S.C. 

2 1381–1383f). 

3 ‘‘(2) STREAMLINED PARTICIPATION FOR CER4 TAIN BENEFICIARIES.—The Secretary shall— 

5 ‘‘(A) periodically estimate the number of 

6 eligible beneficiaries and households, and the 

7 number of participating beneficiaries and 

8 households, for the Energy Refund Program; 

9 and 

10 ‘‘(B) develop procedures, in consultation 

11 with the Commissioner of Social Security, the 

12 Railroad Retirement Board, the Secretary of 

13 Veterans Affairs, and the State agencies, to en14 sure that low-income beneficiaries of the benefit 

15 programs administered by such entities receive 

16 the energy refund for which the beneficiaries 

17 are eligible under the Energy Refund Program. 

18 ‘‘(3) LIMITATION.—Notwithstanding any other 

19 provision of law, the Secretary shall provide refunds 

20 to United States citizens, United States nationals, 

21 and individuals lawfully residing in the United 

22 States who qualify for a refund under paragraph 

23 (1)(A), and shall establish procedures to ensure that 

24 other individuals do not receive refunds. 
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1 ‘‘(4) NATIONAL STANDARDS.—The Secretary 

2 shall consult with the Secretary of Agriculture and 

3 establish uniform national standards of eligibility en4 suring that States may seamlessly co-administer the 

5 energy refund program with the Supplemental Nu6 trition Assistance Program in accordance with the 

7 provisions of this section. No State agency shall im8 pose any other standard or requirement as a condi9 tion of eligibility or refund receipt under the pro10 gram. Assistance in the Energy Refund Program 

11 shall be furnished promptly to all eligible households 

12 who make application for such participation or are 

13 already enrolled in any program referred to in para14 graph (1). 

15 ‘‘(d) MONTHLY ENERGY REFUND AMOUNT.— 

16 ‘‘(1) ESTIMATED ANNUAL TOTAL LOSS IN PUR17 CHASING POWER.—Not later than August 31 of each 

18 fiscal year, the Energy Information Administration 

19 shall estimate the annual total loss in purchasing 

20 power that will result from American Clean Energy 

21 and Security Act of 2009 in the next fiscal year for 

22 households of each size with gross income equal to 

23 150 percent of the poverty line, based on the pro24 jected total market value of all compliance costs (in25 cluding, but not limited to, the emissions allowances 
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1 used to demonstrate compliance with title VII of the 

2 Clean Air Act in the next fiscal year, and excluding 

3 costs that are not projected to be incurred by house4 holds as a result of allowances freely allocated and 

5 intended for residential consumer assistance pursu6 ant to sections 783 through 785 of the Clean Air 

7 Act), in a way generally recognized as suitable by 

8 experts. 

9 ‘‘(2) MONTHLY ENERGY REFUND.—The month10 ly energy refund amount for an eligible household 

11 under this section shall be— 

12 ‘‘(A) if the gross income of the household 

13 does not exceed 150 percent of the poverty line 

14 applicable to the household— 

15 ‘‘(i) if the household has 1, 2, 3, or 4 

members, 1 16 ⁄12 of the amount estimated 

17 under paragraph (1) for a household of the 

18 same size, rounded to the nearest whole 

19 dollar amount; or 

20 ‘‘(ii) if the household has 5 or more 

members, 1 21 ⁄12 of the arithmetic mean value 

22 of the amounts estimated under paragraph 

23 (1) for households with 5 or more mem24 bers, rounded to the nearest whole dollar 

25 amount; or 
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1 ‘‘(B) if the gross income of the household 

2 exceeds 150 percent of the poverty line applicable to the household, 1 3 ⁄12 of the amount (if any) 

4 by which— 

5 ‘‘(i) the amount estimated under 

6 paragraph (1) for a household of the same 

7 size; exceeds 

8 ‘‘(ii) 20 percent of the amount by 

9 which the gross income of the household 

10 exceeds 150 percent of the poverty line. 

11 ‘‘(e) DELIVERY MECHANISM.— 

12 ‘‘(1) Subject to standards and an implementa13 tion schedule set by the Secretary, the energy refund 

14 shall be provided in monthly installments via— 

15 ‘‘(A) direct deposit into the eligible house16 hold’s designated bank account; 

17 ‘‘(B) the State’s electronic benefit transfer 

18 system; or 

19 ‘‘(C) another Federal or State mechanism, 

20 if such a mechanism is approved by the Sec21 retary. 

22 ‘‘(2) Such standards shall include— 

23 ‘‘(A)(i) defining the required level of recipi24 ent protection regarding privacy; 
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1 ‘‘(ii) guidance on how recipients are of2 fered choices, when relevant, about the delivery 

3 mechanism; 

4 ‘‘(iii) guidance on ease of use and access to 

5 the refund, including the prohibition of fees 

6 charged to recipients for withdrawals or other 

7 services; and 

8 ‘‘(iv) cost-effective protections against im9 proper accessing of the energy refund; 

10 ‘‘(B) operating standards that provide for 

11 interoperability between States and law enforce12 ment monitoring; and 

13 ‘‘(C) other standards, as determined by the 

14 Secretary or the Secretary’s designee. 

15 ‘‘(f) ADMINISTRATION.— 

16 ‘‘(1) IN GENERAL.—The State agency of each 

17 participating State shall assume responsibility for 

18 the certification of applicant households and for the 

19 issuance of refunds and the control and account20 ability thereof. 

21 ‘‘(2) PROCEDURES.—Under standards estab22 lished by the Secretary, the State agency shall estab23 lish procedures governing the administration of the 

24 Energy Refund Program that the State agency de25 termines best serve households in the State, includ-
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1 ing households with special needs, such as house2 holds with elderly or disabled members, households 

3 in rural areas, homeless individuals, and households 

4 residing on reservations as defined in the Indian 

5 Child Welfare Act of 1978 and the Indian Financing 

6 Act of 1974. In carrying out this paragraph, a State 

7 agency— 

8 ‘‘(A) shall provide timely, accurate, and 

9 fair service to applicants for, and participants 

10 in, the Energy Refund Program; 

11 ‘‘(B) shall permit an applicant household 

12 to apply to participate in the program at the 

13 time that the household first contacts the State 

14 agency, and shall consider an application that 

15 contains the name, address, and signature of 

16 the applicant to be sufficient to constitute an 

17 application for participation; 

18 ‘‘(C) shall screen any applicant household 

19 for the Supplemental Nutrition Assistance Pro20 gram, the State’s medical assistance program 

21 under section XIX of this Act, State Childrens 

22 Health Insurance Program under section XXI 

23 of this Act, and a State program that provides 

24 basic assistance under a State program funded 

25 under title IV of this Act or with qualified 
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1 State expenditures as defined in section 

2 409(a)(7) of this Act for eligibility for the En3 ergy Refund Program and, if eligible, shall en4 roll such applicant household in the Energy Re5 fund Program; 

6 ‘‘(D) shall complete certification of and 

7 provide a refund to any eligible household not 

8 later than 30 days following its filing of an ap9 plication; 

10 ‘‘(E) shall use appropriate bilingual per11 sonnel and materials in the administration of 

12 the program in those portions of the State in 

13 which a substantial number of members of low14 income households speak a language other than 

15 English; and 

16 ‘‘(F) shall utilize State agency personnel 

17 who are employed in accordance with the cur18 rent standards for a Merit System of Personnel 

19 Administration or any standards later pre20 scribed by the Office of Personnel Management 

21 pursuant to section 208 of the Intergovern22 mental Personnel Act of 1970 (42 U.S.C. 4728) 

23 modifying or superseding such standards relat24 ing to the establishment and maintenance of 

25 personnel standards on a merit basis to make 
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1 all tentative and final determinations of eligi2 bility and ineligibility. 

3 ‘‘(3) REGULATIONS.— 

4 ‘‘(A) Except as provided in subparagraph 

5 (B), the Secretary shall issue such regulations 

6 consistent with this section as the Secretary 

7 deems necessary or appropriate for the effective 

8 and efficient administration of the Energy Re9 fund Program, and shall promulgate all such 

10 regulations in accordance with the procedures 

11 set forth in section 553 of title 5, United States 

12 Code. 

13 ‘‘(B) Without regard to section 553 of title 

14 5 of such Code, the Administrator may by rule 

15 promulgate as final, to be effective until no 

16 later than 2 years after the date of the enact17 ment of the American Clean Energy and Secu18 rity Act of 2009, any procedures that are sub19 stantially the same as the procedures governing 

20 the Supplemental Nutrition Assistance Program 

21 in section 273.2, 273.12, or 273.15 of title 7, 

22 Code of Federal Regulations. 

23 ‘‘(C) Notwithstanding subsection (i)(4), 

24 the Secretary may promulgate regulations al25 lowing for streamlined eligibility determinations 
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1 for some or all households which include indi2 viduals receiving assistance under a State plan 

3 approved under title XIX or XXI of this Act. 

4 The regulations may institute procedures 

5 whereby the income and family size information 

6 used for determining eligibility under such title 

7 XIX or XXI may be the basis for determining 

8 eligibility for the Energy Refund Program. 

9 ‘‘(D) Notwithstanding any other provision 

10 of this section, the Secretary may authorize 

11 States to provide benefits under this section on 

12 a quarterly basis if the Secretary determines 

13 that the amount of the benefits that would be 

14 provided on a monthly basis to households is in15 sufficient to be efficiently paid on a monthly 

16 basis in light of the administrative expenses of 

17 the Energy Refund Program. 

18 ‘‘(g) TREATMENT.—The value of the refund provided 

19 under this section shall not be considered income or re20 sources for any purpose under any Federal, State, or local 

21 laws, including, but not limited to, laws relating to an in22 come tax, or public assistance programs (including, but 

23 not limited to, health care, cash aid, child care, nutrition 

24 programs, and housing assistance) and no participating 

25 State or political subdivision thereof shall decrease any as-
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1 sistance otherwise provided an individual or individuals be2 cause of the receipt of a refund under this section. 

3 ‘‘(h) PROGRAM INTEGRITY.—For purposes of ensur4 ing program integrity and complying with the require5 ments of the Improper Payment Information Act of 2002, 

6 the Secretary shall, to the maximum extent possible, rely 

7 on and coordinate with the quality control sample and re8 view procedures of paragraphs (2), (3), (4), and (5) of 

9 section 16(c) of the Food and Nutrition Act of 2008 (7 

10 U.S.C. 2025(c)). 

11 ‘‘(i) DEFINITIONS.— 

12 ‘‘(1) SECRETARY.—The term ‘Secretary’ means 

13 the Secretary of Health and Human Services or the 

14 head of another agency designated by the Secretary 

15 of Health and Human Services. 

16 ‘‘(2) ELECTRONIC BENEFIT TRANSFER SYS17 TEM.—The term ‘electronic benefit transfer system’ 

18 means a system by which household benefits or re19 funds defined under subsection (e) are issued from 

20 and stored in a central databank via electronic ben21 efit transfer cards. 

22 ‘‘(3) GROSS INCOME.—The term ‘gross income’ 

23 means the gross income of a household that is deter24 mined in accordance with standards and procedures 

25 established under section 5 of the Food and Nutri-
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1 tion Act of 2008 (7 U.S.C. 2014) and its imple2 menting regulations. 

3 ‘‘(4) HOUSEHOLD.— 

4 ‘‘(A) The term ‘household’ means— 

5 ‘‘(i) in subparagraphs (A) and (B) of 

6 subsection (c)(1) of this section, except as 

7 provided in subparagraph (C) of this para8 graph, an individual or a group of individ9 uals who are a household under section 

10 3(n) of the Food and Nutrition Act of 

11 2008 (7 U.S.C. 2012(n)); 

12 ‘‘(ii) in subsection (c)(1)(C) of this 

13 section, a single individual or married cou14 ple that receives benefits under section 

15 1860D–14 of this Act (42 U.S.C. 1395w– 

16 114); and 

17 ‘‘(iii) in subsection (c)(1)(D) of this 

18 section, a single individual or married cou19 ple that receives benefits under the supple20 mental security income program under title 

21 XVI of this Act (42 U.S.C. 1381–1383f). 

22 ‘‘(B) The Secretary shall establish rules 

23 for providing the energy refund in an equitable 

24 and administratively simple manner to house25 holds where the group of individuals who live 
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1 together includes members not all of whom are 

2 described in a single clause of subparagraph 

3 (A), or includes additional members not de4 scribed in any such clause. 

5 ‘‘(C) The Secretary shall establish rules re6 garding the eligibility and delivery of the energy 

7 refund to groups of individuals described in sec8 tion 3(n)(4) or (5) of the Food and Nutrition 

9 Act of 2008 (7 U.S.C. 2012(n)). 

10 ‘‘(5) POVERTY LINE.—The term ‘poverty line’ 

11 has the meaning given the term in section 673(2) of 

12 the Community Services Block Grant Act (42 U.S.C. 

13 9902(2)), including any revision required by that 

14 section. 

15 ‘‘(6) STATE.—The term ‘State’ means the 50 

16 States, the District of Columbia, the Commonwealth 

17 of Puerto Rico, American Samoa, the United States 

18 Virgin Islands, Guam, and the Commonwealth of the 

19 Northern Mariana Islands. 

20 ‘‘(7) STATE AGENCY.—The term ‘State agency’ 

21 means an agency of State government, including the 

22 local offices thereof, that has responsibility for ad23 ministration of the 1 or more federally aided public 

24 assistance programs within the State, and in those 

25 States where such assistance programs are operated 
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1 on a decentralized basis, the term shall include the 

2 counterpart local agencies administering such pro3 grams. 

4 ‘‘(8) OTHER TERMS.—Other terms not defined 

5 in this title shall have the same meaning applied in 

6 the Supplemental Nutrition Assistance Program au7 thorized by the Food and Nutrition Act of 2008 (7 

8 U.S.C. 2011 et seq.) unless the Secretary finds for 

9 good cause that application of a particular definition 

10 would be detrimental to the purposes of the Energy 

11 Refund Program.’’. 

12 SEC. 432. MODIFICATION OF EARNED INCOME CREDIT 

13 AMOUNT FOR INDIVIDUALS WITH NO QUALI14 FYING CHILDREN. 

15 (a) IN GENERAL.—Subsection (b) of section 32 of the 

16 Internal Revenue Code of 1986 is amended by adding at 

17 the end the following new paragraph: 

18 ‘‘(4) SPECIAL RULE FOR INDIVIDUALS WITH NO

19 QUALIFYING CHILDREN WHO ARE AFFECTED BY THE

20 AMERICAN CLEAN ENERGY AND SECURITY ACT OF

21 2009.— 

22 ‘‘(A) IN GENERAL.—In the case of any 

23 household which the Secretary determines expe24 rienced a reduction in purchasing power as a 

25 result of the provisions of, or amendments 
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1 made by, the American Clean Energy and Secu2 rity Act of 2009 (determined without regard to 

3 this paragraph and section 2201 of the Social 

4 Security Act)— 

5 ‘‘(i) INCREASE IN CREDIT PERCENT6 AGE AND PHASEOUT PERCENTAGE.—The 

7 table contained in paragraph (1)(A) shall 

8 be applied by substituting ‘15.3’ for ‘7.65’. 

9 ‘‘(ii) INCREASE IN BEGINNING PHASE10 OUT AMOUNT.—The table contained in 

11 paragraph (2)(A) shall be applied by sub12 stituting ‘$11,640’ for ‘$5,280’. 

13 ‘‘(B) INFLATION ADJUSTMENT.— 

14 ‘‘(i) IN GENERAL.—In the case of any 

15 taxable year beginning after 2012, the 

16 $11,640 amount in subparagraph (A)(ii) 

17 shall be increased by an amount equal to— 

18 ‘‘(I) such dollar amount, multi19 plied by 

20 ‘‘(II) the cost of living adjust21 ment determined under section 1(f)(3) 

22 for the calendar year in which the tax23 able year begins determined by sub24 stituting ‘calendar year 2011’ for ‘cal-
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1 endar year 1992’ in subparagraph (B) 

2 thereof. 

3 ‘‘(ii) ROUNDING.—Subparagraph (A) 

4 of subsection (j)(2) shall apply after taking 

5 into account any increase under clause (i) 

6 in the same manner as if such increase 

7 were under paragraph (1) of subsection (j). 

8 ‘‘(iii) COORDINATION WITH OTHER IN9 FLATION ADJUSTMENTS.—Paragraph (1) 

10 of subsection (j) shall not apply to the dol11 lar amount substituted under subpara12 graph (A)(ii).’’. 

13 (b) EFFECTIVE DATE.—The amendment made by 

14 this section shall apply to taxable years beginning after 

15 December 31, 2011. 

16 SEC. 433. PROTECTION OF SOCIAL SECURITY AND MEDI17 CARE TRUST FUNDS. 

18 (a) OASDI TRUST FUNDS.—Section 201 of the So19 cial Security Act (42 U.S.C. 401) is amended by adding 

20 at the end the following new subsection: 

21 ‘‘(o) The Secretary of the Treasury shall transfer 

22 from time to time to the Federal Old-Age and Survivors 

23 Insurance Trust Fund and the Federal Disability Insur24 ance Trust Fund, from amounts in the general fund of 

25 the Treasury that are not otherwise appropriated, such 
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1 sums as the Chief Actuary of the Social Security Adminis2 tration calculates as necessary (and so certifies to such 

3 Secretary) for any fiscal year, on account of changes in 

4 benefit costs and changes in tax revenue attributable to 

5 the provisions of the American Clean Energy and Security 

6 Act of 2009 and the amendments made thereby, in order 

7 to place each of such Trust Funds in the same position 

8 at the end of such fiscal year as the position in which such 

9 Trust Fund would have been if such changes had not oc10 curred.’’. 

11 (b) HI TRUST FUND.—Section 1817 of such Act (42 

12 U.S.C. 1395i) is amended by adding at the end the fol13 lowing new subsection: 

14 ‘‘(l) TRANSFERS TO ACCOUNT FOR CHANGES IN

15 BENEFIT COSTS AND CHANGES IN TAX REVENUE AT16 TRIBUTABLE TO THE AMERICAN CLEAN ENERGY AND SE17 CURITY ACT OF 2009.—The Secretary of the Treasury 

18 shall transfer from time to time to the Trust Fund, from 

19 amounts in the general fund of the Treasury that are not 

20 otherwise appropriated, such sums as the Chief Actuary 

21 of the Centers for Medicare & Medicaid Services calculates 

22 as necessary (and so certifies to such Secretary) for any 

23 fiscal year, on account of changes in benefit costs and 

24 changes in tax revenue attributable to the provisions of 

25 the American Clean Energy and Security Act of 2009 and 
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1 the amendments made thereby, in order to place the Trust 

2 Fund in the same position at the end of such fiscal year 

3 as the position in which it would have been if such changes 

4 had not occurred.’’. 

5 Subtitle D—Exporting Clean 

6 Technology 

7 SEC. 441. FINDINGS AND PURPOSES. 

8 (a) FINDINGS.—Congress finds the following: 

9 (1) Protecting Americans from the impacts of 

10 climate change requires global reductions in green11 house gas emissions. 

12 (2) Although developing countries are histori13 cally least responsible for the cumulative greenhouse 

14 gas emissions that are causing climate change and 

15 continue to have very low per capita greenhouse gas 

16 emissions, their overall greenhouse gas emissions are 

17 increasing as they seek to grow their economies and 

18 reduce energy poverty for their populations. 

19 (3) Many developing countries lack the financial 

20 and technical resources to adopt clean energy tech21 nologies and absent assistance their greenhouse gas 

22 emissions will continue to increase. 

23 (4) Investments in clean energy technology co24 operation can substantially reduce global greenhouse 

25 gas emissions while providing developing countries 
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1 with incentives to adopt policies that will address 

2 competitiveness concerns related to regulation of 

3 United States greenhouse gas emissions. 

4 (5) Investments in clean technology in devel5 oping countries will increase demand for clean en6 ergy products, open up new markets for United 

7 States companies, spur innovation, and lower costs. 

8 (6) Under Article 4 of the United Nations 

9 Framework Convention on Climate Change, devel10 oped country parties, including the United States, 

11 committed to ‘‘take all practicable steps to promote, 

12 facilitate, and finance, as appropriate, the transfer 

13 of, or access to, environmentally sound technologies 

14 and know-how to other parties, particularly devel15 oping country parties, to enable them to implement 

16 the provisions of the Convention’’. 

17 (7) Under the Bali Action Plan, developed 

18 country parties to the United Nations Framework 

19 Convention on Climate Change, including the United 

20 States, committed to ‘‘enhanced action on the provi21 sion of financial resources and investment to support 

22 action on mitigation and adaptation and technology 

23 cooperation,’’ including, inter alia, consideration of 

24 ‘‘improved access to adequate, predictable, and sus25 tainable financial resources and financial and tech-
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1 nical support, and the provision of new and addi2 tional resources, including official and concessional 

3 funding for developing country parties’’. 

4 (8) Intellectual property rights are a key driver 

5 of investment and research and development in, and 

6 the global deployment of, clean technologies. 

7 (9) Innovative clean technologies, including 

8 U.S. and multilateral financing mechanisms for their 

9 deployment, are critical to mitigating global warming 

10 pollution, preventing catastrophic changes to the cli11 mate, and developing robust economies around the 

12 world. 

13 (10) Any weakening of intellectual property 

14 rights protection poses a substantial competitive risk 

15 to U.S. companies and the creation of high-quality 

16 U.S. jobs, inhibiting the creation of new ‘‘green’’ 

17 employment and the transformational shift to the 

18 ‘‘Green Economy’’ of the 21st Century. 

19 (11) Any U.S. funding directed toward assist20 ing developing countries with regard to exporting 

21 clean technology should promote the robust compli22 ance with and enforcement of existing international 

23 legal requirements for the protection of intellectual 

24 property rights as formulated in the Agreement on 

25 Trade-Related Aspects of Intellectual Property 
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1 Rights, referred to in section 101(d)(15) of the Uru2 guay Round Agreements Act (19 U.S.C.3511(d)(15) 

3 and in applicable intellectual property provisions of 

4 bilateral trade agreements. 

5 (b) PURPOSES.—The purposes of this subtitle are— 

6 (1) to provide United States assistance and le7 verage private resources to encourage widespread 

8 implementation, in developing countries, of activities 

9 that reduce, sequester, or avoid greenhouse gas 

10 emissions; and 

11 (2) to provide such assistance in a manner 

12 that— 

13 (A) encourages such countries to adopt 

14 policies and measures, including sector-based 

15 and cross-sector policies and measures, that 

16 substantially reduce, sequester, or avoid green17 house gas emissions; 

18 (B) promotes the successful negotiation of 

19 a global agreement to reduce greenhouse gas 

20 emissions under the United Nations Framework 

21 Convention on Climate Change; and 

22 (C) promotes robust compliance with and 

23 enforcement of existing international legal re24 quirements for the protection of intellectual 

25 property rights, as formulated in the Agreement 
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1 on Trade-Related Aspects of Intellectual Prop2 erty Rights referred to in section 101(d)(15) of 

3 the Uruguay Round Agreements Act (19 U.S.C. 

4 3511(d)(15)) and in applicable intellectual 

5 property provisions of bilateral trade agree6 ments. 

7 SEC. 442. DEFINITIONS. 

8 In this subtitle: 

9 (1) ALLOWANCE.—The term ‘‘allowance’’ 

10 means an emission allowance established under sec11 tion 721 of the Clean Air Act. 

12 (2) APPROPRIATE CONGRESSIONAL COMMIT13 TEES.—The term ‘‘appropriate congressional com14 mittees’’ means— 

15 (A) the Committees on Energy and Com16 merce, Foreign Affairs, and Financial Services 

17 of the House of Representatives; and 

18 (B) the Committees on Environment and 

19 Public Works, Energy and Natural Resources, 

20 and Foreign Relations of the Senate. 

21 (3) CONVENTION.—The term ‘‘Convention’’ 

22 means the United Nations Framework Convention 

23 on Climate Change, done at New York on May 9, 

24 1992, and entered into force on March 21, 1994. 
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1 (4) DEVELOPING COUNTRY.—The term ‘‘devel2 oping country’’ means a country eligible to receive 

3 official development assistance according to the in4 come guidelines of the Development Assistance Com5 mittee of the Organization for Economic Coopera6 tion and Development. 

7 (5) ELIGIBLE COUNTRY.—The term ‘‘eligible 

8 country’’ means a developing country that is deter9 mined by the interagency group under section 444 

10 to be eligible to receive assistance under this sub11 title. 

12 (6) INTERAGENCY GROUP.—The term ‘‘inter13 agency group’’ means the group established by the 

14 President under section 443 to administer the pro15 gram established under this subtitle. 

16 (7) LEAST DEVELOPED COUNTRY.—The term 

17 ‘‘least developed country’’ means a foreign country 

18 the United Nations has identified as among the least 

19 developed of developing countries. 

20 (8) QUALIFYING ACTIVITY.—The term ‘‘quali21 fying activity’’ means an activity that meets the cri22 teria in section 445. 

23 (9) QUALIFYING ENTITY.—The term ‘‘quali24 fying entity’’ means a national, regional, or local 

25 government in, or a nongovernmental organization 
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•HR 2454 EH

1 or private entity located or operating in, an eligible 

2 country. 

3 SEC. 443. GOVERNANCE. 

4 (a) OVERSIGHT.—The Secretary of State, or such 

5 other Federal agency head as the President may des6 ignate, in consultation with the interagency group estab7 lished under subsection (b), shall oversee distributions of 

8 allowances allocated under section 782(o) of the Clean Air 

9 Act (as added by section 321 of this Act) for distribution 

10 pursuant to this subtitle. 

11 (b) INTERAGENCY GROUP.—The President shall es12 tablish an interagency group to administer the program 

13 established under this subtitle. The Members of the inter14 agency group shall include— 

15 (1) the Secretary of State; 

16 (2) the Administrator of the Environmental 

17 Protection Agency; 

18 (3) the Secretary of Energy; 

19 (4) the Secretary of the Treasury; 

20 (5) the Secretary of Commerce; 

21 (6) the Administrator of the United States 

22 Agency for International Development; and 

23 (7) any other head of a Federal agency or exec24 utive branch appointee that the President may des25 ignate. 
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1 (c) CHAIRPERSON.—The Secretary of State shall 

2 serve as the chairperson of the interagency group. 

3 (d) SUPPLEMENT NOT SUPPLANT.—Allowances dis4 tributed pursuant to this subtitle shall be used to supple5 ment, and not to supplant, any other Federal, State, or 

6 local resources available to carry out activities that are 

7 qualifying activities under this subtitle. 

8 SEC. 444. DETERMINATION OF ELIGIBLE COUNTRIES. 

9 (a) IN GENERAL.—The interagency group shall de10 termine a country to be an eligible country for the pur11 poses of this subtitle if a country meets the following cri12 teria: 

13 (1) The country is a developing country that— 

14 (A) has entered into an international 

15 agreement to which the United States is a 

16 party, under which such country agrees to take 

17 actions to produce measurable, reportable, and 

18 verifiable greenhouse gas emissions mitigation; 

19 or 

20 (B) is determined by the interagency group 

21 to have in force national policies and measures 

22 that are capable of producing measurable, re23 portable, and verifiable greenhouse gas emis24 sions mitigation. 
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•HR 2454 EH

1 (2) The country has developed a nationally ap2 propriate mitigation strategy that seeks to achieve 

3 substantial reductions, sequestration, or avoidance of 

4 greenhouse gas emissions, relative to business-as5 usual levels. 

6 (3) Subject to subsection (b)(1), such other cri7 teria as the President determines will serve the pur8 poses of this subtitle or other United States national 

9 security, foreign policy, environmental, or economic 

10 objectives including robust compliance with and en11 forcement of existing international legal require12 ments for the protection of intellectual property 

13 rights for clean technology, as formulated in the 

14 Agreement on Trade-Related Aspects of Intellectual 

15 Property Rights, referred to in section 101(d)(15) of 

16 the Uruguay Round Agreements Act (19 U.S.C. 

17 3511(d)(15)) and in applicable intellectual property 

18 provisions of bilateral trade agreements. 

19 (b) EXCEPTIONS.— 

20 (1) Subsection (a)(3) applies only to bilateral 

21 assistance under section 446(c)(4). 

22 (2) The eligibility criteria in this section do not 

23 apply in the case of least developed countries receiv24 ing assistance under section 445(7) for the purpose 

25 of building capacity to meet such eligibility criteria. 
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1 SEC. 445. QUALIFYING ACTIVITIES. 

2 Assistance under this subtitle may be provided only 

3 to qualifying entities for clean technology activities (in4 cluding building relevant technical and institutional capac5 ity) that contribute to substantial, measurable, reportable, 

6 and verifiable reductions, sequestration, or avoidance of 

7 greenhouse gas emissions including— 

8 (1) deployment of technologies to capture and 

9 sequester carbon dioxide emissions from electric gen10 erating units or large industrial sources (except that 

11 assistance under this subtitle for such deployment 

12 shall be limited to the cost of retrofitting existing fa13 cilities with such technologies or the incremental 

14 cost of purchasing and installing such technologies 

15 at new facilities); 

16 (2) deployment of renewable electricity genera17 tion from wind, solar, sustainably produced biomass, 

18 geothermal, marine, or hydrokinetic sources; 

19 (3) substantial increases in the efficiency of 

20 electricity transmission, distribution, and consump21 tion; 

22 (4) deployment of low- or zero emissions tech23 nologies that are facing financial or other barriers to 

24 their widespread deployment which could be ad25 dressed through support under this subtitle in order 

26 to reduce, sequester, or avoid emission; 
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•HR 2454 EH

1 (5) reduction in transportation sector emissions 

2 through increased transportation system and vehicle 

3 efficiency or use of transportation fuels that have 

4 lifecycle greenhouse gas emissions that are substan5 tially lower than those attributable to fossil fuel6 based alternatives; 

7 (6) reduction in black carbon emissions; or 

8 (7) capacity building activities, including— 

9 (A) developing and implementing meth10 odologies and programs for measuring and 

11 quantifying greenhouse gas emissions and 

12 verifying emissions mitigation; 

13 (B) assessing, developing, and imple14 menting technology and policy options for 

15 greenhouse gas emissions mitigation and avoid16 ance of future emissions, including sector and 

17 cross-sector mitigation strategies; and 

18 (C) providing other forms of technical as19 sistance to facilitate the qualification for, and 

20 receipt of, assistance under this Act. 

21 SEC. 446. ASSISTANCE. 

22 (a) IN GENERAL.—The Secretary of State, or such 

23 other Federal agency head as the President may des24 ignate, is authorized to provide assistance, through the 

25 distribution of allowances allocated for such purpose under 
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•HR 2454 EH

1 section 782(o) of the Clean Air Act (as added by section 

2 321 of this Act) for qualifying activities that take place 

3 in eligible countries, in accordance with the requirements 

4 of this subtitle. 

5 (b) DEFINITION.—For the purposes of this section 

6 the term ‘‘clean technology’’ means any technology or 

7 service related to the qualifying activities identified in sec8 tion 445. 

9 (c) DISTRIBUTION OF ALLOWANCES.— 

10 (1) IN GENERAL.—The Secretary of State, or 

11 such other Federal agency head as the President 

12 may designate, after consultation with the inter13 agency group, shall distribute allowances under this 

14 subtitle— 

15 (A) in the form of bilateral assistance in 

16 accordance with paragraph (4); 

17 (B) to multilateral funds or institutions 

18 pursuant to the Convention or an agreement 

19 negotiated under the Convention; or 

20 (C) through some combination of the 

21 mechanisms identified in subparagraphs (A) 

22 and (B). 

23 (2) GLOBAL ENVIRONMENT FACILITY.—For any 

24 allowances provided to the Global Environment Fa25 cility pursuant to paragraph (1)(B), the President 
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•HR 2454 EH

1 shall designate the Secretary of the Treasury to dis2 tribute those allowances to the Global Environment 

3 Facility. 

4 (3) DISTRIBUTION THROUGH INTERNATIONAL

5 FUND OR INSTITUTION.—If allowances are distrib6 uted to a multilateral fund or institution, as author7 ized in paragraph (1), the Secretary of State, or 

8 such other Federal agency head as the President 

9 may designate, shall seek to ensure the establish10 ment and implementation of adequate mechanisms 

11 to— 

12 (A) apply and enforce the criteria for de13 termination of eligible countries and qualifying 

14 activities under sections 444 and 445, respec15 tively; 

16 (B) require public reporting describing the 

17 process and methodology for selecting the ulti18 mate recipients of assistance and a description 

19 of each activity that received assistance, includ20 ing the amount of obligations and expenditures 

21 for assistance; and 

22 (C) require that no funds be expended for 

23 the benefit of any qualifying activity where that 

24 activity or any activity relating to a qualifying 

25 activity under section 445 undermines the ro-
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•HR 2454 EH

1 bust compliance with and enforcement of exist2 ing legal requirements for the protection of in3 tellectual property rights for clean technology, 

4 as formulated in the Agreement on Trade-Re5 lated Aspects of Intellectual Property Rights, 

6 referred to in section 101(d)(15) of the Uru7 guay Round Agreements Act (19 U.S.C. 

8 3511(d)(15)). 

9 (4) BILATERAL ASSISTANCE.— 

10 (A) IN GENERAL.—Bilateral assistance 

11 under paragraph (1) shall be carried out by the 

12 Administrator of the United States Agency for 

13 International Development, in consultation with 

14 the interagency group. 

15 (B) LIMITATIONS.—Not more than 15 per16 cent of allowances made available to carry out 

17 bilateral assistance under this subtitle in any 

18 year shall be distributed to support activities in 

19 any single country. 

20 (C) SELECTION CRITERIA.—Not later than 

21 2 years after the date of enactment of this sub22 title, the Administrator of the United States 

23 Agency for International Development, after 

24 consultation with the interagency group, shall 

25 develop and publish a set of criteria to be used 
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•HR 2454 EH

1 in evaluating activities within eligible countries 

2 for bilateral assistance under this subtitle. 

3 (D) CRITERIA REQUIREMENTS.—The cri4 teria under subparagraph (C) shall require 

5 that— 

6 (i) the activity is a qualifying activity; 

7 (ii) the activity will be conducted as 

8 part of an eligible country’s nationally ap9 propriate mitigation strategy or as part of 

10 an eligible country’s actions towards pro11 viding a nationally appropriate mitigation 

12 strategy to reduce, sequester, or avoid 

13 emissions being implemented by the eligi14 ble country; 

15 (iii) the activity will not have adverse 

16 effects on human health, safety, or welfare, 

17 the environment, or natural resources; 

18 (iv) any technologies deployed through 

19 bilateral assistance under this subtitle will 

20 be properly implemented and maintained; 

21 (v) the activity will not cause any net 

22 loss of United States jobs or displacement 

23 of United States production; 

24 (vi) costs of the activity will be shared 

25 by the host country government, private 
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•HR 2454 EH

1 sector parties, or a multinational develop2 ment bank, except that this clause does not 

3 apply to least developed countries; 

4 (vii) the activity would not undermine 

5 the protection of intellectual property 

6 rights for clean technology, as formulated 

7 in the Agreement on Trade-Related As8 pects of Intellectual Property Rights, re9 ferred to in section 101(d)(15) of the Uru10 guay Round Agreements Act (19 U.S.C. 

11 3511(d)(15)) and applicable intellectual 

12 property provisions of bilateral trade 

13 agreements; and 

14 (viii) the activity meets such other re15 quirements as the interagency group deter16 mines appropriate to further the purposes 

17 of this subtitle. 

18 (E) CRITERIA PREFERENCES.—The cri19 teria under subparagraph (C) shall give pref20 erence to activities that— 

21 (i) promise to achieve large-scale 

22 greenhouse gas reductions, sequestration, 

23 or avoidance at a national, sectoral or 

24 cross-sectoral level; 
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•HR 2454 EH

1 (ii) have the potential to catalyze a 

2 shift within the host country towards wide3 spread deployment of low- or zero-carbon 

4 energy technologies; 

5 (iii) build technical and institutional 

6 capacity and other activities that are un7 likely to be attractive to private sector 

8 funding; or 

9 (iv) maximize opportunities to lever10 age other sources of assistance and cata11 lyze private-sector investment. 

12 (d) MONITORING, EVALUATION, AND ENFORCE13 MENT.—The Secretary of State, or such other Federal 

14 agency head as the President may designate, in consulta15 tion with the interagency group, shall establish and imple16 ment a system to monitor and evaluate the performance 

17 of activities receiving assistance under this subtitle. The 

18 Secretary of State, or such other Federal agency head as 

19 the President may designate, shall have the authority to 

20 suspend or terminate assistance in whole or in part for 

21 an activity if it is determined that the activity is not oper22 ating in compliance with the approved proposal. 

23 (e) COORDINATION WITH U.S. FOREIGN ASSIST24 ANCE.—Subject to the direction of the President, the Sec25 retary of State shall, to the extent practicable, seek to 
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•HR 2454 EH

1 align activities under this section with broader develop2 ment, poverty alleviation, or natural resource management 

3 objectives and initiatives in the recipient country. 

4 (f) ANNUAL REPORTS.—Not later than March 1, 

5 2012, and annually thereafter, the President shall submit 

6 to the appropriate congressional committees a report on 

7 the assistance provided under this subtitle during the prior 

8 fiscal year. Such report shall include— 

9 (1) a description of the amount and value of al10 lowances distributed during the prior fiscal year; 

11 (2) a description of each activity that received 

12 assistance during the prior fiscal year, and a de13 scription of the anticipated and actual outcomes; 

14 (3) an assessment of any adverse effects to 

15 human health, safety, or welfare, the environment, 

16 or natural resources as a result of activities sup17 ported under this subtitle; 

18 (4) an assessment of the success of the assist19 ance provided under this subtitle to improving the 

20 technical and institutional capacity to implement 

21 substantial emissions reductions; 

22 (5) an estimate of the greenhouse gas emissions 

23 reductions, sequestration, or avoidance achieved by 

24 assistance provided under this subtitle during the 

25 prior fiscal year; and 
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•HR 2454 EH

1 (6) an assessment whether any funds expended 

2 for the benefit of any qualifying activity undermined 

3 the protection of intellectual property rights for 

4 clean technology, as formulated in the Agreement on 

5 Trade-Related Aspects of Intellectual Property 

6 Rights, referred to in section 101(d)(15) of the Uru7 guay Round Agreements Act (19 U.S.C. 

8 3511(d)(15)) and applicable intellectual property 

9 provisions of bilateral trade agreements. 

10 (g) NOT ELIGIBLE FOR OFFSET CREDIT.—Activities 

11 that receive support under this subtitle shall not be issued 

12 offset credits for the greenhouse gas emissions reductions 

13 or avoidance, or greenhouse gas sequestration, produced 

14 by such activities. 

15 Subtitle E—Adapting to Climate 

16 Change 

17 PART 1—DOMESTIC ADAPTATION 

18 Subpart A—National Climate Change Adaptation 

19 Program 

20 SEC. 451. GLOBAL CHANGE RESEARCH AND DATA MANAGE21 MENT. 

22 (a) SHORT TITLE.—This section may be cited as the 

23 ‘‘Global Change Research and Data Management Act of 

24 2009’’. 

25 (b) GLOBAL CHANGE RESEARCH.— 
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•HR 2454 EH

1 (1) PURPOSE.—The purpose of this subsection 

2 is to provide for the continuation and coordination 

3 of a comprehensive and integrated United States ob4 servation, research, and outreach program which will 

5 assist the Nation and the world to understand, as6 sess, predict, and respond to the effects of human7 induced and natural processes of global change. 

8 (2) DEFINITIONS.—For purposes of this sub9 section— 

10 (A) the term ‘‘global change’’ means 

11 human-induced or natural changes in the global 

12 environment (including alterations in climate, 

13 land productivity, oceans or other water re14 sources, atmospheric chemistry, biodiversity, 

15 and ecological systems) that may alter the ca16 pacity of the Earth to sustain life; 

17 (B) the term ‘‘global change research’’ 

18 means study, monitoring, assessment, pre19 diction, and information management activities 

20 to describe and understand— 

21 (i) the interactive physical, chemical, 

22 and biological processes that regulate the 

23 total Earth system; 

24 (ii) the unique environment that the 

25 Earth provides for life; 
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•HR 2454 EH

1 (iii) changes that are occurring in the 

2 Earth system; and 

3 (iv) the manner in which such system, 

4 environment, and changes are influenced 

5 by human actions; 

6 (C) the term ‘‘interagency committee’’ 

7 means the interagency committee established 

8 under paragraph (3); 

9 (D) the term ‘‘Plan’’ means the National 

10 Global Change Research and Assessment Plan 

11 developed under paragraph (5); 

12 (E) the term ‘‘Program’’ means the United 

13 States Global Change Research Program estab14 lished under paragraph (4); and 

15 (F) the term ‘‘regional climate change’’ 

16 means the natural or human-induced changes 

17 manifested in the local or regional environment 

18 (including alterations in weather patterns, land 

19 productivity, water resources, sea level rise, at20 mospheric chemistry, biodiversity, and ecologi21 cal systems) that may alter the capacity of a 

22 specific region to support current or future so23 cial and economic activity or natural eco24 systems. 
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•HR 2454 EH

1 (3) INTERAGENCY COOPERATION AND COORDI2 NATION.— 

3 (A) ESTABLISHMENT.—The President 

4 shall establish or designate an interagency com5 mittee to ensure cooperation and coordination 

6 of all Federal research activities pertaining to 

7 processes of global change for the purpose of 

8 increasing the overall effectiveness and produc9 tivity of Federal global change research efforts. 

10 The interagency committee shall include re11 search and program representatives of agencies 

12 conducting global change research, agencies 

13 with authority over resources likely to be af14 fected by global change, and agencies with au15 thority to mitigate human-induced global 

16 change. 

17 (B) FUNCTIONS OF THE INTERAGENCY

18 COMMITTEE.—The interagency committee 

19 shall— 

20 (i) serve as the forum for developing 

21 the Plan and for overseeing its implemen22 tation; 

23 (ii) serve as the forum for developing 

24 the vulnerability assessment under para25 graph (7); 
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•HR 2454 EH

1 (iii) ensure cooperation among Fed2 eral agencies with respect to global change 

3 research activities; 

4 (iv) work with academic, State, indus5 try, and other groups conducting global 

6 change research, to provide for periodic 

7 public and peer review of the Program; 

8 (v) cooperate with the Secretary of 

9 State in— 

10 (I) providing representation at 

11 international meetings and con12 ferences on global change research in 

13 which the United States participates; 

14 and 

15 (II) coordinating the Federal ac16 tivities of the United States with pro17 grams of other nations and with inter18 national global change research activi19 ties; 

20 (vi) work with appropriate Federal, 

21 State, regional, and local authorities to en22 sure that the Program is designed to 

23 produce information needed to develop 

24 policies to mitigate human-induced global 

25 change and to reduce the vulnerability of 
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•HR 2454 EH

1 the United States and other regions to 

2 global change; 

3 (vii) facilitate ongoing dialog and in4 formation exchange with regional, State, 

5 and local governments and other user com6 munities; and 

7 (viii) identify additional decision8 making groups that may use information 

9 generated through the Program. 

10 (4) UNITED STATES GLOBAL CHANGE RE11 SEARCH PROGRAM.— 

12 (A) ESTABLISHMENT.—The President 

13 shall establish an interagency United States 

14 Global Change Research Program to improve 

15 understanding of global change, to respond to 

16 the information needs of communities and deci17 sionmakers, and to provide periodic assessments 

18 of the vulnerability of the United States and 

19 other regions to global and regional climate 

20 change. The Program shall be implemented in 

21 accordance with the Plan. 

22 (B) LEAD AGENCY.—The lead agency for 

23 the United States Global Change Research Pro24 gram shall be the Office of Science and Tech25 nology Policy. 
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•HR 2454 EH

1 (C) INTERAGENCY PROGRAM ACTIVITIES.— 

2 The Director of the Office of Science and Tech3 nology Policy, in consultation with the inter4 agency committee, shall identify activities in5 cluded in the Plan that involve participation by 

6 2 or more agencies in the Program, and that do 

7 not fall within the current fiscal year budget al8 locations of those participating agencies, to ful9 fill the requirements of this section. The Direc10 tor of the Office of Science and Technology Pol11 icy shall allocate funds to the agencies to con12 duct the identified interagency activities. Such 

13 activities may include— 

14 (i) development of scenarios for cli15 mate, land-cover change, population 

16 growth, and socioeconomic development; 

17 (ii) calibration and testing of alter18 native regional and global climate models; 

19 (iii) identification of economic sectors 

20 and regional climatic zones; and 

21 (iv) convening regional workshops to 

22 facilitate information exchange and in23 volvement of regional, State, and local de24 cisionmakers, non-Federal experts, and 
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•HR 2454 EH

1 other stakeholder groups in the activities 

2 of the Program. 

3 (D) WORKSHOPS.—The Director shall en4 sure that at least one workshop is held per year 

5 in each region identified by the Plan under 

6 paragraph (5)(B)(xi) to facilitate information 

7 exchange and outreach to regional, State, and 

8 local stakeholders as required by this section. 

9 (E) AUTHORIZATION OF APPROPRIA10 TIONS.—There are authorized to be appro11 priated to the Office of Science and Technology 

12 Policy for carrying out this paragraph 

13 $10,000,000 for each of the fiscal years 2009 

14 through 2014. 

15 (5) NATIONAL GLOBAL CHANGE RESEARCH AND

16 ASSESSMENT PLAN.— 

17 (A) IN GENERAL.—The President shall de18 velop a National Global Change Research and 

19 Assessment Plan for implementation of the Pro20 gram. The Plan shall contain recommendations 

21 for global change research and assessment. The 

22 President shall submit an outline for the devel23 opment of the Plan to the Congress within 1 

24 year after the date of enactment of this Act, 

25 and shall submit a completed Plan to the Con-
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•HR 2454 EH

1 gress within 3 years after the date of enactment 

2 of this Act. Revised Plans shall be submitted to 

3 the Congress at least once every 5 years there4 after. In the development of each Plan, the 

5 President shall conduct a formal assessment 

6 process under this paragraph to determine the 

7 needs of appropriate Federal, State, regional, 

8 and local authorities and other interested par9 ties regarding the types of information needed 

10 by them in developing policies to mitigate 

11 human-induced global change and to reduce so12 ciety’s vulnerability to global change and shall 

13 utilize these assessments, including the reviews 

14 by the National Academy of Sciences and the 

15 National Governors Association under subpara16 graphs (E) and (F), in developing the Plan. 

17 (B) CONTENTS OF THE PLAN.—The Plan 

18 shall— 

19 (i) establish, for the 10-year period 

20 beginning in the year the Plan is sub21 mitted, the goals and priorities for Federal 

22 global change research which most effec23 tively advance scientific understanding of 

24 global change and provide information of 

25 use to Federal, State, regional, and local 
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•HR 2454 EH

1 authorities in the development of policies 

2 relating to global change; 

3 (ii) describe specific activities, includ4 ing efforts to determine user information 

5 needs, research activities, data collection, 

6 database development, and data analysis 

7 requirements, development of regional sce8 narios, assessment of model predictability, 

9 assessment of climate change impacts, par10 ticipation in international research efforts, 

11 and information management, required to 

12 achieve such goals and priorities; 

13 (iii) identify relevant programs and 

14 activities of the Federal agencies that con15 tribute to the Program directly and indi16 rectly; 

17 (iv) set forth the role of each Federal 

18 agency in implementing the Plan; 

19 (v) consider and utilize, as appro20 priate, reports and studies conducted by 

21 Federal agencies, the National Research 

22 Council, or other entities; 

23 (vi) make recommendations for the 

24 coordination of the global change research 

25 and assessment activities of the United 
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•HR 2454 EH

1 States with such activities of other nations 

2 and international organizations, includ3 ing— 

4 (I) a description of the extent 

5 and nature of international coopera6 tive activities; 

7 (II) bilateral and multilateral ef8 forts to provide worldwide access to 

9 scientific data and information; and 

10 (III) improving participation by 

11 developing nations in international 

12 global change research and environ13 mental data collection; 

14 (vii) detail budget requirements for 

15 Federal global change research and assess16 ment activities to be conducted under the 

17 Plan; 

18 (viii) catalog the type of information 

19 identified by appropriate Federal, State, 

20 regional, and local decisionmakers needed 

21 to develop policies to reduce society’s vul22 nerability to global change and indicate 

23 how the planned research will meet these 

24 decisionmakers’ information needs; 
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•HR 2454 EH

1 (ix) identify the observing systems 

2 currently employed in collecting data rel3 evant to global and regional climate change 

4 research and prioritize additional observa5 tion systems that may be needed to ensure 

6 adequate data collection and monitoring of 

7 global change; 

8 (x) describe specific activities designed 

9 to facilitate outreach and data and infor10 mation exchange with regional, State, and 

11 local governments and other user commu12 nities; and 

13 (xi) identify and describe regions of 

14 the United States that are likely to experi15 ence similar impacts of global change or 

16 are likely to share similar vulnerabilities to 

17 global change. 

18 (C) RESEARCH ELEMENTS.—The Plan 

19 shall include at a minimum the following re20 search elements: 

21 (i) Global measurements, establishing 

22 worldwide to regional scale observations 

23 prioritized to understand global change 

24 and to meet the information needs of deci-
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•HR 2454 EH

1 sionmakers on all relevant spatial and time 

2 scales. 

3 (ii) Information on economic, demo4 graphic, and technological trends that con5 tribute to changes in the Earth system and 

6 that influence society’s vulnerability to 

7 global and regional climate change. 

8 (iii) Development of indicators and 

9 baseline databases to document global 

10 change, including changes in species dis11 tribution and behavior, extent of glacia12 tions, and changes in sea level. 

13 (iv) Studies of historical changes in 

14 the Earth system, using evidence from the 

15 geological and fossil record. 

16 (v) Assessments of predictability using 

17 quantitative models of the Earth system to 

18 simulate global and regional environmental 

19 processes and trends. 

20 (vi) Focused research initiatives to 

21 understand the nature of and interaction 

22 among physical, chemical, biological, land 

23 use, and social processes related to global 

24 and regional climate change. 
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1 (vii) Focused research initiatives to 

2 determine and then meet the information 

3 needs of appropriate Federal, State, and 

4 regional decisionmakers. 

5 (D) INFORMATION MANAGEMENT.—The 

6 Plan shall incorporate, to the extent practicable, 

7 the recommendations relating to data acquisi8 tion, management, integration, and archiving 

9 made by the interagency climate and other 

10 global change data management working group 

11 established under subsection (c)(3). 

12 (E) NATIONAL ACADEMY OF SCIENCES

13 EVALUATION.—The President shall enter into 

14 an agreement with the National Academy of 

15 Sciences under which the Academy shall— 

16 (i) evaluate the scientific content of 

17 the Plan; and 

18 (ii) recommend priorities for future 

19 global and regional climate change re20 search and assessment. 

21 (F) NATIONAL GOVERNORS ASSOCIATION

22 EVALUATION.—The President shall enter into 

23 an agreement with the National Governors As24 sociation Center for Best Practices under which 

25 that Center shall— 
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1 (i) evaluate the utility to State, local, 

2 and regional decisionmakers of each Plan 

3 and of the anticipated and actual informa4 tion outputs of the Program for develop5 ment of State, local, and regional policies 

6 to reduce vulnerability to global change; 

7 and 

8 (ii) recommend priorities for future 

9 global and regional climate change re10 search and assessment. 

11 (G) PUBLIC PARTICIPATION.—In devel12 oping the Plan, the President shall consult with 

13 representatives of academic, State, industry, 

14 and environmental groups. Not later than 90 

15 days before the President submits the Plan, or 

16 any revision thereof, to the Congress, a sum17 mary of the proposed Plan shall be published in 

18 the Federal Register for a public comment pe19 riod of not less than 60 days. 

20 (6) BUDGET COORDINATION.— 

21 (A) IN GENERAL.—The President shall 

22 provide general guidance to each Federal agen23 cy participating in the Program with respect to 

24 the preparation of requests for appropriations 

25 for activities related to the Program. 
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1 (B) CONSIDERATION IN PRESIDENT’S

2 BUDGET.—The President shall submit, at the 

3 time of his annual budget request to Congress, 

4 a description of those items in each agency’s 

5 annual budget which are elements of the Pro6 gram. 

7 (7) VULNERABILITY ASSESSMENT.— 

8 (A) REQUIREMENT.—Within 1 year after 

9 the date of enactment of this Act, and at least 

10 once every 5 years thereafter, the President 

11 shall submit to the Congress an assessment 

12 which— 

13 (i) integrates, evaluates, and inter14 prets the findings of the Program and dis15 cusses the scientific uncertainties associ16 ated with such findings; 

17 (ii) analyzes current trends in global 

18 change, both human-induced and natural, 

19 and projects major trends for the subse20 quent 25 to 100 years; 

21 (iii) based on indicators and baselines 

22 developed under paragraph (5)(C)(iii), as 

23 well as other measurements, analyzes 

24 changes to the natural environment, land 
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1 and water resources, and biological diver2 sity in— 

3 (I) major geographic regions of 

4 the United States; and 

5 (II) other continents; 

6 (iv) analyzes the effects of global 

7 change, including the changes described in 

8 clause (iii), on food and fiber production, 

9 energy production and use, transportation, 

10 human health and welfare, water avail11 ability and coastal infrastructure, and 

12 human social and economic systems, in13 cluding providing information about the 

14 differential impacts on specific geographic 

15 regions within the United States, on people 

16 of different income levels within those re17 gions, and for rural and urban areas with18 in those regions; and 

19 (v) summarizes the vulnerability of 

20 different geographic regions of the world to 

21 global change and analyzes the implica22 tions of global change for the United 

23 States, including international assistance, 

24 population displacement, food and resource 

25 availability, and national security. 
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1 (B) USE OF RELATED REPORTS.—To the 

2 extent appropriate, the assessment produced 

3 pursuant to this paragraph may coordinate 

4 with, consider, incorporate, or otherwise make 

5 use of related reports, assessments, or informa6 tion produced by the United States Global 

7 Change Research Program, regional, State, and 

8 local entities, and international organizations, 

9 including the World Meteorological Organiza10 tion and the Intergovernmental Panel on Cli11 mate Change. 

12 (8) POLICY ASSESSMENT.—Not later than 1 

13 year after the date of enactment of this Act, and at 

14 least once every 4 years thereafter, the President 

15 shall enter into a joint agreement with the National 

16 Academy of Public Administration and the National 

17 Academy of Sciences under which the Academies 

18 shall— 

19 (A) document current policy options being 

20 implemented by Federal, State, and local gov21 ernments to mitigate or adapt to the effects of 

22 global and regional climate change; 

23 (B) evaluate the realized and anticipated 

24 effectiveness of those current policy options in 

25 meeting mitigation and adaptation goals; 
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1 (C) identify and evaluate a range of addi2 tional policy options and infrastructure for miti3 gating or adapting to the effects of global and 

4 regional climate change; 

5 (D) analyze the adoption rates of policies 

6 and technologies available to reduce the vulner7 ability of society to global change with an eval8 uation of the market and policy obstacles to 

9 their adoption in the United States; and 

10 (E) evaluate the distribution of economic 

11 costs and benefits of these policy options across 

12 different United States economic sectors. 

13 (9) ANNUAL REPORT.—Each year at the time 

14 of submission to the Congress of the President’s 

15 budget request, the President shall submit to the 

16 Congress a report on the activities conducted pursu17 ant to this subsection, including— 

18 (A) a description of the activities of the 

19 Program during the past fiscal year; 

20 (B) a description of the activities planned 

21 in the next fiscal year toward achieving the 

22 goals of the Plan; and 

23 (C) a description of the groups or cat24 egories of State, local, and regional decision25 makers identified as potential users of the in-
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1 formation generated through the Program and 

2 a description of the activities used to facilitate 

3 consultations with and outreach to these 

4 groups, coordinated through the work of the 

5 interagency committee. 

6 (10) RELATION TO OTHER AUTHORITIES.—The 

7 President shall— 

8 (A) ensure that relevant research, assess9 ment, and outreach activities of the National 

10 Climate Program, established by the National 

11 Climate Program Act (15 U.S.C. 2901 et seq.), 

12 are considered in developing national global and 

13 regional climate change research and assess14 ment efforts; and 

15 (B) facilitate ongoing dialog and informa16 tion exchange with regional, State, and local 

17 governments and other user communities 

18 through programs authorized in the National 

19 Climate Program Act (15 U.S.C. 2901 et seq.). 

20 (11) REPEAL.—The Global Change Research 

21 Act of 1990 (15 U.S.C. 2921 et seq.) is amended by 

22 striking titles I and III thereof. 

23 (12) GLOBAL CHANGE RESEARCH INFORMA24 TION.—The President shall establish or designate a 

25 Global Change Research Information Exchange to 
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1 make scientific research and other information pro2 duced through or utilized by the Program which 

3 would be useful in preventing, mitigating, or adapt4 ing to the effects of global change accessible through 

5 electronic means. 

6 (13) ICE SHEET STUDY AND REPORT.— 

7 (A) STUDY.— 

8 (i) REQUIREMENT.—The Director of 

9 the National Science Foundation and the 

10 Administrator of National Oceanic and At11 mospheric Administration shall enter into 

12 an arrangement with the National Acad13 emy of Sciences to complete a study of the 

14 current status of ice sheet melt, as caused 

15 by climate change, with implications for 

16 global sea level rise. 

17 (ii) CONTENTS.—The study shall take 

18 into consideration— 

19 (I) the past research completed 

20 related to ice sheet melt as reviewed 

21 by Working Group I of the Intergov22 ernmental Panel on Climate Change; 

23 (II) additional research com24 pleted since the fall of 2005 that was 
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1 not included in the Working Group I 

2 report due to time constraints; and 

3 (III) the need for an accurate as4 sessment of changes in ice sheet 

5 spreading, changes in ice sheet flow, 

6 self-lubrication, the corresponding ef7 fect on ice sheets, and current mod8 eling capabilities. 

9 (B) REPORT.—Not later than 18 months 

10 after the date of enactment of this Act, the Na11 tional Academy of Sciences shall transmit to 

12 the Committee on Science and Technology of 

13 the House of Representatives and the Com14 mittee on Commerce, Science, and Transpor15 tation of the Senate a report on the key find16 ings of the study conducted under subpara17 graph (A), along with recommendations for ad18 ditional research related to ice sheet melt and 

19 corresponding sea level rise. 

20 (14) HURRICANE FREQUENCY AND INTENSITY

21 STUDY AND REPORT.— 

22 (A) STUDY.— 

23 (i) REQUIREMENT.—The Adminis24 trator of the National Oceanic and Atmos25 pheric Administration and the Director of 
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1 the National Science Foundation shall 

2 enter into an arrangement with the Na3 tional Academy of Sciences to complete a 

4 study of the current state of the science on 

5 the potential impacts of climate change on 

6 patterns of hurricane and typhoon develop7 ment, including storm intensity, track, and 

8 frequency, and the implications for hurri9 cane-prone and typhoon-prone coastal re10 gions. 

11 (ii) CONTENTS.—The study shall take 

12 into consideration— 

13 (I) the past research completed 

14 related to hurricane and typhoon de15 velopment, track, and intensity as re16 viewed by Working Groups I and II of 

17 the Intergovernmental Panel on Cli18 mate Change; 

19 (II) additional research com20 pleted since the fall of 2005 that was 

21 not included in the Working Group I 

22 and II reports due to time con23 straints; 

24 (III) the need for accurate as25 sessment of potential changes in hur-
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1 ricane and typhoon intensity, track, 

2 and frequency and of the current 

3 modeling and forecasting capabilities 

4 and the need for improvements in 

5 forecasting of these parameters; and 

6 (IV) the need for additional re7 search and monitoring to improve 

8 forecasting of hurricanes and ty9 phoons and to understand the rela10 tionship between climate change and 

11 hurricane and typhoon development. 

12 (B) REPORT.—Not later than 18 months 

13 after the date of enactment of this Act, the Na14 tional Academy of Sciences shall transmit to 

15 the Committee on Science and Technology of 

16 the House of Representatives and the Com17 mittee on Commerce, Science, and Transpor18 tation of the Senate a report on the key find19 ings of the study conducted under subpara20 graph (A). 

21 (c) CLIMATE AND OTHER GLOBAL CHANGE DATA

22 MANAGEMENT.— 

23 (1) PURPOSES.—The purposes of this sub24 section are to establish climate and other global 

25 change data management and archiving as Federal 
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1 agency missions, and to establish Federal policies for 

2 managing and archiving climate and other global 

3 change data. 

4 (2) DEFINITIONS.—For purposes of this sub5 section— 

6 (A) the term ‘‘metadata’’ means informa7 tion describing the content, quality, condition, 

8 and other characteristics of climate and other 

9 global change data, compiled, to the maximum 

10 extent possible, consistent with the require11 ments of the ‘‘Content Standard for Digital 

12 Geospatial Metadata’’ (FGDC–STD–001–1998) 

13 issued by the Federal Geographic Data Com14 mittee, or any successor standard approved by 

15 the working group; and 

16 (B) the term ‘‘working group’’ means the 

17 interagency climate and other global change 

18 data management working group established 

19 under paragraph (3). 

20 (3) INTERAGENCY CLIMATE AND OTHER GLOB21 AL CHANGE DATA MANAGEMENT WORKING GROUP.— 

22 (A) ESTABLISHMENT.—The President 

23 shall establish or designate an interagency cli24 mate and other global change data management 

25 working group to make recommendations for 
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1 coordinating Federal climate and other global 

2 change data management and archiving activi3 ties. 

4 (B) MEMBERSHIP.—The working group 

5 shall include the Administrator of the National 

6 Aeronautics and Space Administration, the Ad7 ministrator of the National Oceanic and Atmos8 pheric Administration, the Secretary of Energy, 

9 the Secretary of Defense, the Director of the 

10 National Science Foundation, the Director of 

11 the United States Geological Survey, the Archi12 vist of the United States, the Administrator of 

13 the Environmental Protection Agency, the Sec14 retary of the Smithsonian Institution, or their 

15 designees, and representatives of any other 

16 Federal agencies the President considers appro17 priate. 

18 (C) REPORTS.—Not later than 1 year after 

19 the date of enactment of this Act, the working 

20 group shall transmit a report to the Congress 

21 containing the elements described in subpara22 graph (D). Not later than 4 years after the ini23 tial report under this subparagraph, and at 

24 least once every 4 years thereafter, the working 

25 group shall transmit reports updating the pre-
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1 vious report. In preparing reports under this 

2 subparagraph, the working group shall consult 

3 with expected users of the data collected and 

4 archived by the Program. 

5 (D) CONTENTS.—The reports and updates 

6 required under subparagraph (C) shall— 

7 (i) include recommendations for the 

8 establishment, maintenance, and accessi9 bility of a catalog identifying all available 

10 climate and other global change data sets; 

11 (ii) identify climate and other global 

12 change data collections in danger of being 

13 lost and recommend actions to prevent 

14 such loss; 

15 (iii) identify gaps in climate and other 

16 global change data and recommend actions 

17 to fill those gaps; 

18 (iv) identify effective and compatible 

19 procedures for climate and other global 

20 change data collection, management, and 

21 retention and make recommendations for 

22 ensuring their use by Federal agencies and 

23 other appropriate entities; 

24 (v) develop and propose a coordinated 

25 strategy for funding and allocating respon-
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1 sibilities among Federal agencies for cli2 mate and other global change data collec3 tion, management, and retention; 

4 (vi) make recommendations for ensur5 ing that particular attention is paid to the 

6 collection, management, and archiving of 

7 metadata; 

8 (vii) make recommendations for en9 suring a unified and coordinated Federal 

10 capital investment strategy with respect to 

11 climate and other global change data col12 lection, management, and archiving; 

13 (viii) evaluate the data record from 

14 each observing system and make rec15 ommendations to ensure that delivered 

16 data are free from time-dependent biases 

17 and random errors before they are trans18 ferred to long-term archives; and 

19 (ix) evaluate optimal design of obser20 vation system components to ensure a cost21 effective, adequate set of observations de22 tecting and tracking global change. 

23 SEC. 452. NATIONAL CLIMATE SERVICE. 

24 (a) SHORT TITLE.—This section may be cited as the 

25 ‘‘National Climate Service Act of 2009’’. 
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1 (b) PURPOSE.—The purpose of this section is to es2 tablish a National Climate Service and to define the activi3 ties to be undertaken within the National Oceanic and At4 mospheric Administration to— 

5 (1) advance understanding of climate variability 

6 and change at the global, national, regional, and 

7 local levels; 

8 (2) provide forecasts, warnings, and other infor9 mation to the public on variability and change in 

10 weather and climate that affect geographic areas, 

11 natural resources, infrastructure, economic sectors, 

12 and communities; and 

13 (3) support development of adaptation and re14 sponse plans by Federal agencies, State, local, and 

15 tribal governments, the private sector, and the pub16 lic. 

17 (c) DEFINITIONS.—In this section: 

18 (1) ADVISORY COMMITTEE.—The term ‘‘Advi19 sory Committee’’ means the Climate Service Advi20 sory Committee established under subsection (f). 

21 (2) DIRECTOR.—The term ‘‘Director’’ means 

22 the Director of the Climate Service Office. 

23 (3) REPRESENTATIVE.—The term ‘‘representa24 tive’’ means an individual who is not a full-time or 

25 part-time employee of the Federal Government and 
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1 who is appointed to an advisory committee to rep2 resent the views of an entity or entities outside the 

3 Federal Government. 

4 (4) SPECIAL GOVERNMENT EMPLOYEE.—The 

5 term ‘‘Special Government Employee’’ has the same 

6 meaning as in section 202(a) of title 18, United 

7 States Code. 

8 (5) UNDER SECRETARY.—The term ‘‘Under 

9 Secretary’’ means the Under Secretary of Commerce 

10 for Oceans and Atmosphere. 

11 (d) INTERAGENCY DEVELOPMENT OF A NATIONAL

12 CLIMATE SERVICE.— 

13 (1) IN GENERAL.—The President shall— 

14 (A) initiate a process within 30 days after 

15 the date of enactment of this Act through the 

16 Committee on Environment and Natural Re17 sources of the National Science and Technology 

18 Council and led by the Director of the Office of 

19 Science and Technology Policy, to evaluate al20 ternative structures to support a collaborative, 

21 interagency research and operational program 

22 that will achieve the goal of meeting the needs 

23 of decisionmakers in— 

24 (i) Federal agencies; 
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1 (ii) State, local, and tribal govern2 ments; 

3 (iii) regional entities and other stake4 holders and users, 

5 for reliable, timely, and relevant information re6 lated to climate variability and change; 

7 (B) within 1 year after the date of enact8 ment of this Act complete pursuant to para9 graph (2) a survey of the needs of current and 

10 future users of information related to climate 

11 variability and change; 

12 (C) within 2 years after the date of enact13 ment of this Act report to Congress under para14 graph (3) the results of the evaluation described 

15 in subparagraph (A) and provide a plan to es16 tablish a collaborative, interagency research and 

17 operational program to deliver information re18 lated to climate variability and change to all 

19 users; and 

20 (D) within 3 years after the date of enact21 ment of this Act, and after delivery of the re22 port to Congress required under subparagraph 

23 (C), establish a National Climate Service, based 

24 upon the information obtained through the 
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1 process described in subparagraph (A), that 

2 meets the goal described in subparagraph (A). 

3 (2) SURVEY OF NEED FOR CLIMATE SERV4 ICES.— 

5 (A) IN GENERAL.—The Director of the Of6 fice of Science and Technology Policy, through 

7 the Committee on Environment and Natural 

8 Resources, shall provide a report to Congress 

9 within 1 year after the date of enactment of 

10 this Act that compiles information on the cur11 rent climate products being delivered by each 

12 Federal agency and its partner organizations to 

13 users and stakeholders, and on the needs of 

14 users and stakeholders for new climate products 

15 and services. 

16 (B) CONTENTS OF THE REPORT.—The re17 port shall identify— 

18 (i) specific user groups and stake19 holders that currently are served by each 

20 Federal agency and its partner organiza21 tions; 

22 (ii) the type of climate products and 

23 services currently delivered to specific 

24 users groups and stakeholders, and the 

25 specific Federal agency office, program, or 
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1 partner organization that delivers these 

2 products and services; 

3 (iii) potential user groups and stake4 holders that may be served by expanding 

5 climate products and services; 

6 (iv) specific needs for new climate 

7 products and services to be delivered by 

8 each Federal agency and its partner orga9 nizations identified by user groups and 

10 stakeholders; 

11 (v) a characterization of the different 

12 user and stakeholder groups that were sur13 veyed by each Federal agency; and 

14 (vi) a list of non-Federal entities that 

15 deliver climate products and services. 

16 (3) REPORT TO CONGRESS.— 

17 (A) IN GENERAL.—Within 2 years after 

18 the date of enactment of this Act, the Director 

19 of the Office of Science and Technology Policy 

20 shall report to the President and the Congress 

21 on a proposal, prepared through the Committee 

22 on Environment and Natural Resources, to es23 tablish and operate a National Climate Service. 

24 The report shall include— 
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1 (i) a description of the alternative 

2 structures considered; 

3 (ii) a description of the structure pro4 posed for a National Climate Service, in5 cluding a discussion of the benefits of this 

6 structure as compared to the alternatives 

7 considered; 

8 (iii) designation of a specific office or 

9 agency that will lead the National Climate 

10 Service and that shall be accountable for 

11 the daily operation of the National Climate 

12 Service; 

13 (iv) a description of the role and capa14 bility of each Federal agency, including a 

15 list of all entities within each agency or 

16 supported with agency funds that currently 

17 provide or may provide climate products or 

18 services; 

19 (v) a description of the mechanisms 

20 that will be used to ensure ongoing com21 munication and information exchange 

22 among the Federal agencies and between 

23 Federal agencies and their respective user 

24 and stakeholder communities including— 
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1 (I) mechanisms to facilitate ongo2 ing dialogue with non-Federal organi3 zations providing climate services; 

4 (II) mechanisms to facilitate on5 going dialogue with regional, State, 

6 local, and tribal governments, the pri7 vate sector, and other users and 

8 stakeholders on the development and 

9 delivery of climate services; 

10 (III) mechanisms to collect infor11 mation, observations, and other data 

12 relevant for improving climate prod13 ucts and services; and 

14 (IV) designation of points of con15 tact for each Federal agency with re16 sponsibilities to deliver climate serv17 ices; 

18 (vi) a detailed description of the proc19 esses and procedures that will be necessary 

20 to coordinate observations and information 

21 collection by different Federal agencies to 

22 ensure the compatibility of information and 

23 to facilitate data and information exchange 

24 among Federal agencies and with non-Fed25 eral entities, and a designation of the 
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1 agency or agencies that would be respon2 sible for ongoing oversight of these func3 tions; 

4 (vii) a detailed description of how re5 search findings and climate impact assess6 ments produced through the United States 

7 Global Change Research Program and the 

8 other activities undertaken within the 

9 United States Global Change Research 

10 Program would be integrated with the ac11 tivities undertaken by a National Climate 

12 Service; 

13 (viii) a list of the existing observation 

14 and monitoring systems or programs oper15 ated by each Federal agency that provide 

16 data, observations, and other information 

17 that may be used to develop or improve cli18 mate products and services; 

19 (ix) a description of new infrastruc20 ture, equipment, personnel or other re21 sources, by agency, that may be needed to 

22 achieve the goals of a National Climate 

23 Service, and the time period over which 

24 these new resources will be allocated; 
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1 (x) an identification of the activities 

2 that may be undertaken in cooperation 

3 with international partners; 

4 (xi) the mechanisms established to 

5 provide quality assurance and quality con6 trol of climate service products and serv7 ices, and the agency or agencies designated 

8 to conduct and oversee these mechanisms; 

9 (xii) an identification of non-Federal 

10 entities that provide climate products and 

11 services, and a description of the relation12 ship envisioned between a National Climate 

13 Service and the non-Federal entities pro14 viding climate services; and 

15 (xiii) responses to the comments re16 ceived during the public comment period. 

17 (B) DRAFT REPORT.—Prior to the submis18 sion of the final report, the Director of the Of19 fice of Science and Technology Policy shall pub20 lish a draft report in the Federal Register with 

21 a comment period of at least 30 days. 

22 (C) CONSULTATION.—In developing the re23 port, the Director of the Office of Science and 

24 Technology Policy shall consult with State, 

25 local, and tribal governments, regional entities, 
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1 the private sector, and other users and stake2 holder groups, and Congress. 

3 (4) ANNUAL REPORT.—The Director of the Of4 fice of Science and Technology Policy shall transmit 

5 to the Congress at the time of the President’s fiscal 

6 year 2013 budget request, and annually thereafter, 

7 a report on the annual anticipated cost of carrying 

8 out the research and operational activities of the Na9 tional Climate Service, with a description of the 

10 budget for each Federal agency’s activities. 

11 (e) CLIMATE SERVICE PROGRAM.— 

12 (1) IN GENERAL.—The Under Secretary, build13 ing upon the resources of the National Weather 

14 Service and other weather and climate programs in 

15 the National Oceanic and Atmospheric Administra16 tion, shall establish a Climate Service Program. 

17 (2) CLIMATE SERVICE OFFICE.—The Under 

18 Secretary shall establish a Climate Service Office 

19 and shall appoint a Director of the Office to collabo20 rate with the leadership of the National Oceanic and 

21 Atmospheric Administration line offices to perform 

22 the duties assigned to the Office. The Climate Serv23 ice Office shall— 

24 (A) coordinate programs at the National 

25 Oceanic and Atmospheric Administration to en-
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1 sure the timely production and distribution of 

2 data and information on global, national, re3 gional, and local climate variability and change 

4 over all time scales relevant for planning and 

5 response, including intraseasonal, interannual, 

6 decadal, and multidecadal time periods; 

7 (B) ensure exchange of information be8 tween the research and operational offices at 

9 the National Oceanic and Atmospheric Admin10 istration to identify research needs for improv11 ing climate products and services and ensure 

12 the timely and orderly transition of research 

13 findings, improved technologies, models, and 

14 other tools to the National Oceanic and Atmos15 pheric Administration’s operations; 

16 (C) ensure operational quality control of all 

17 Climate Service Program products including a 

18 transparent and open accounting of all the as19 sumptions built into the global, national, re20 gional, and local weather and climate computer 

21 models upon which such products are based; 

22 (D) ensure a continuous level of high-qual23 ity data collected through a national observa24 tion and monitoring infrastructure, including at 
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1 a minimum performing regular maintenance 

2 and verification, and periodic upgrades; 

3 (E) serve as liaison to and exchange infor4 mation with other Federal agencies that provide 

5 climate services in order to— 

6 (i) ensure the timely dissemination of 

7 data and information on weather and cli8 mate produced by the National Oceanic 

9 and Atmospheric Administration to other 

10 Federal agencies; 

11 (ii) ensure that data and information 

12 collected by other Federal agencies rel13 evant to improving climate services are 

14 made available to the National Oceanic 

15 and Atmospheric Administration; 

16 (iii) facilitate the development and de17 livery of climate products and services to 

18 relevant stakeholders; and 

19 (iv) obtain information from other 

20 Federal agencies to improve the develop21 ment and dissemination by the National 

22 Oceanic and Atmospheric Administration 

23 of information on weather and climate to 

24 other Federal agencies for the development 
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1 of climate service products by those agen2 cies; 

3 (F) ensure cooperation and collaboration, 

4 as appropriate, of the Climate Service Program 

5 with State, local, and tribal governments, re6 gional entities, academic and nonprofit research 

7 organizations, and private sector entities, in8 cluding weather information providers and 

9 other stakeholders; and 

10 (G) ensure exchange of data, information, 

11 and research with the United States Global 

12 Change Research Program to support the devel13 opment of assessments required under the Glob14 al Change Research Act of 1990 (15 U.S.C. 

15 2921 et seq.). 

16 (3) CLIMATE SERVICE PROGRAM.— 

17 (A) IN GENERAL.—The Under Secretary 

18 shall operate the Climate Service Program 

19 through a national center, the Climate Service 

20 Office, and a network of regional and local fa21 cilities, including the established regional and 

22 local offices of the National Weather Service, 6 

23 Regional Climate Centers, the offices of the Re24 gional Integrated Sciences and Assessments 

25 program, the National Integrated Drought In-
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1 formation System, and any other National Oce2 anic and Atmospheric Administration or Na3 tional Oceanic and Atmospheric Administration4 supported regional and local entities, as appro5 priate. 

6 (B) REGIONAL CLIMATE CENTERS PRO7 GRAM.—The Under Secretary shall maintain a 

8 network of 6 Regional Climate Centers to work 

9 cooperatively with the State Climate Offices 

10 to— 

11 (i) collect and exchange data and in12 formation needed to characterize, under13 stand, and forecast regional and local 

14 weather and climate; 

15 (ii) facilitate collection and exchange 

16 of data and information between the States 

17 and Federal Government on weather and 

18 climate in conjunction with the National 

19 Climatic Data Center; 

20 (iii) support research and observa21 tions; 

22 (iv) obtain input on stakeholder needs 

23 for weather and climate information and 

24 products; and 
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1 (v) support State and local adaptation 

2 and response planning. 

3 (C) REGIONAL INTEGRATED SCIENCES AND

4 ASSESSMENTS PROGRAM.—The Under Secretary 

5 shall maintain a network of offices as part of 

6 the Regional Integrated Sciences and Assess7 ments Program. Such offices shall engage in co8 operative research, development, and dem9 onstration projects with the academic commu10 nity, State Climate Offices, Regional Climate 

11 Offices, and other users and stakeholders on cli12 mate products, technologies, models, and other 

13 tools to improve understanding and forecasting 

14 of regional and local climate variability and 

15 change and the effects on economic activities, 

16 natural resources, and water availability, and 

17 other effects on communities, to facilitate devel18 opment of regional and local adaptation plans 

19 to respond to climate variability and change, 

20 and any other needed research identified by the 

21 Under Secretary or the Advisory Committee. 

22 (D) OTHER OFFICES.—In carrying out the 

23 functions of the Climate Service Program, the 

24 Under Secretary shall utilize the assets and ex25 pertise of— 
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1 (i) the National Weather Service to— 

2 (I) deliver operational weather 

3 and climate forecasts, warnings, prod4 ucts, and information through the Cli5 mate Service Programs Division, 

6 Local Weather Forecast Offices, 

7 Weather Service Offices, and River 

8 Forecast Centers; and 

9 (II) develop climate forecast 

10 models and tools through the National 

11 Centers for Environmental Prediction; 

12 (ii) the National Environmental Sat13 ellite, Data, and Information Service to 

14 provide data services and support for prod15 uct development and operations through 

16 the National Climatic Data Center and the 

17 Regional Climate Centers; 

18 (iii) the Office of Oceanic and Atmos19 pheric Research to— 

20 (I) provide research on product 

21 development; 

22 (II) improve weather and climate 

23 forecast models; 

24 (III) provide new technologies 

25 and methods of observation; and 
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1 (IV) oversee the National Oce2 anic and Atmospheric Administration 

3 supported research performed by the 

4 Joint Cooperative Institutes, univer5 sities, and other non-Federal entities; 

6 (iv) the National Integrated Drought 

7 Information System to— 

8 (I) provide an effective drought 

9 warning system; 

10 (II) coordinate and integrate 

11 Federal research on droughts; 

12 (III) collect and integrate infor13 mation on key indicators of drought; 

14 (IV) make usable, reliable, and 

15 timely forecasts and assessments of 

16 drought, including assessments of the 

17 severity of drought conditions and ef18 fects; 

19 (V) communicate drought fore20 casts, conditions, and effects to Fed21 eral, State, tribal, and local govern22 ments, regional entities, the private 

23 sector, and the public; and 

24 (VI) coordinate with State Cli25 mate Offices and RISA teams to as-
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1 sess management practices and tech2 nologies, and the effects of both, used 

3 for drought mitigation at the local, 

4 State, and regional levels; and 

5 (v) any other National Oceanic and 

6 Atmospheric Administration offices or pro7 grams, as appropriate. 

8 (E) MISSION.—The Under Secretary shall 

9 ensure that the core functions and missions of 

10 the National Weather Service, the National In11 tegrated Drought Information System, and any 

12 other programs within the National Oceanic 

13 and Atmospheric Administration are not dimin14 ished or neglected by the establishment of the 

15 Climate Service Program or the duties imposed 

16 on such offices or programs under this para17 graph. 

18 (F) PROGRAM ELEMENTS.—The Climate 

19 Service Program shall— 

20 (i) conduct analyses of and studies re21 lating to the effects of weather and climate 

22 on communities, including effects on agri23 cultural production, natural resources, en24 ergy supply and demand, recreation, and 

25 other sectors of the economy; 
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1 (ii) carry out observations, data collec2 tion, and monitoring of atmospheric and 

3 oceanic conditions on a statewide, regional, 

4 national, and global basis; 

5 (iii) provide information and technical 

6 support for Federal, regional, State, tribal, 

7 and local government efforts to assess and 

8 respond to climate variability and change; 

9 (iv) develop systems for the manage10 ment and dissemination of data, informa11 tion, and assessments, including mecha12 nisms for consultation with current and 

13 potential users and other stakeholders; 

14 (v) conduct research to improve fore15 casting, characterization, and under16 standing of weather and climate variability 

17 and change and its effects on communities, 

18 including its effects on agricultural produc19 tion, natural resources, energy supply and 

20 demand, recreation, and other sectors of 

21 the economy; and 

22 (vi) develop tools to facilitate the use 

23 of climate information by local and re24 gional stakeholders. 

25 (f) CLIMATE SERVICE ADVISORY COMMITTEE.— 
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1 (1) IN GENERAL.—The Under Secretary shall 

2 establish a Climate Service Advisory Committee to 

3 provide advice on— 

4 (A) climate service product development; 

5 (B) delivery of services to decisionmakers 

6 and other stakeholders; 

7 (C) infrastructure to support observations 

8 and monitoring; 

9 (D) computation and modeling needs, re10 search needs, and other resources needed to de11 velop, distribute, and ensure the utility of cli12 mate data, products, and services; and 

13 (E) any other topics as may be requested 

14 by the Under Secretary or Congress. 

15 (2) MEMBERS.— 

16 (A) IN GENERAL.—The Advisory Com17 mittee shall be composed of at least 25 mem18 bers appointed by the Under Secretary. Each 

19 member of the Advisory Committee shall be 

20 qualified either— 

21 (i) by education, training, and experi22 ence to evaluate scientific and technical in23 formation on matters referred to the Advi24 sory Committee under this subsection; or 
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1 (ii) to evaluate the utility and need for 

2 climate products by planners, decision3 makers, the private sector, and the public. 

4 (B) TERMS OF SERVICE.—Members shall 

5 be appointed for 3-year terms, renewable once, 

6 and shall serve at the discretion of the Under 

7 Secretary. Vacancy appointments shall be for 

8 the remainder of the unexpired term of the va9 cancy, and an individual so appointed may sub10 sequently be appointed for 2 full 3-year terms 

11 if the remainder of the unexpired term is less 

12 than 1 year. 

13 (C) CHAIRPERSON.—The Under Secretary 

14 shall designate a chairperson from among the 

15 members of the Advisory Committee. The des16 ignated Chairperson shall alternate between a 

17 member who is appointed as a representative 

18 and a member who is appointed as a Special 

19 Government Employee. 

20 (D) SUBCOMMITTEES.— 

21 (i) ESTABLISHMENT.—The Advisory 

22 Committee shall establish— 

23 (I) a Subcommittee on Science 

24 and Technology to advise the Climate 

25 Service Program on needed research, 
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1 technology development, and addi2 tional observations, and on any other 

3 scientific or technical issues as appro4 priate; and 

5 (II) a Subcommittee on Product 

6 Development and Delivery composed 

7 primarily of representatives of the 

8 community of potential users of the 

9 products developed and delivered by 

10 the Climate Service Program. 

11 The Advisory Committee may establish 

12 such additional subcommittees of its mem13 bers as may be necessary. 

14 (ii) APPOINTMENT.— 

15 (I) FULL ADVISORY COM16 MITTEE.—At least 50 percent of the 

17 members of the Advisory Committee 

18 shall be appointed as Special Govern19 ment Employees. 

20 (II) SUBCOMMITTEES.—At least 

21 75 percent of the members of the 

22 Subcommittee on Science and Tech23 nology shall be appointed as Special 

24 Government Employees. Not more 

25 than 25 percent of the members of 
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1 the Subcommittee on Product Devel2 opment and Delivery shall be ap3 pointed as Special Government Em4 ployees. 

5 (3) ADMINISTRATIVE PROVISIONS.— 

6 (A) REPORTING.—The Advisory Com7 mittee shall report to the Under Secretary and 

8 the appropriate requesting party. 

9 (B) ADMINISTRATIVE SUPPORT.—The 

10 Under Secretary shall provide administrative 

11 support to the Advisory Committee. 

12 (C) MEETINGS.—The Advisory Committee 

13 shall meet at least twice each year and at other 

14 times at the call of the Under Secretary or the 

15 Chairperson. 

16 (D) COMPENSATION AND EXPENSES.—A 

17 member of the Advisory Committee shall not be 

18 compensated for service on the Advisory Com19 mittee, but may be allowed travel expenses, in20 cluding per diem in lieu of subsistence, in ac21 cordance with subchapter I of chapter 57 of 

22 title 5, United States Code. 

23 (4) EXPIRATION.—Section 14 of the Federal 

24 Advisory Committee Act (5 U.S.C. App.) shall not 

25 apply to the Climate Service Advisory Committee. 
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1 (g) REPEAL.—The National Climate Program Act 

2 (15 U.S.C. 2901 et seq.) is repealed. 

3 (h) ESTABLISHMENT OF REGIONAL INTEGRATED

4 SCIENCES AND ASSESSMENTS TEAMS.— 

5 (1) IN GENERAL.—In maintaining the network 

6 of Regional Integrated Sciences and Assessments 

7 (RISA) Teams under subsection (e)(3)(C), the 

8 Under Secretary shall utilize a competitive, peer-re9 viewed selection process. Teams shall conduct ap10 plied regional climate research and projects to ad11 dress the needs of local and regional decisionmakers 

12 for information and tools to develop adaptation and 

13 response plans to climate variability and change. 

14 The awards shall be administered through a cooper15 ative agreement between the National Oceanic and 

16 Atmospheric Administration and the RISA Team. 

17 Each award shall be for a period of 5 years. 

18 (2) RISA TEAMS.—Teams shall be composed of 

19 multi-institutional partnerships whose individual 

20 members may include— 

21 (A) institutions of higher education, as de22 fined in section 101(a) of the Higher Education 

23 Act of 1965 (20 U.S.C. 1001(a)); 
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1 (B) minority serving institutions, as de2 fined in section 371(a) of the Higher Education 

3 Act of 1965; and 

4 (C) nongovernmental research organiza5 tions, Federal agencies, State and local agen6 cies, tribal organizations, and for-profit entities. 

7 (3) CONSIDERATIONS.—In making awards 

8 under this subsection, the Under Secretary shall 

9 consider— 

10 (A) the overall geographic distribution of 

11 RISA Teams and existing gaps in applied re12 search to support local and regional decision13 makers; 

14 (B) the team’s ability to contribute to the 

15 National Oceanic and Atmospheric Administra16 tion’s efforts to deliver climate services in the 

17 region; and 

18 (C) the team’s proposal to integrate social 

19 and physical sciences research to address the 

20 effects of climate variability and change on the 

21 ecology, economy, infrastructure, and commu22 nities in the region. 

23 (i) SURVEY OF NEED FOR CLIMATE SERVICES.— 

24 (1) IN GENERAL.—The Under Secretary shall 

25 provide a report to Congress within 9 months after 
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1 the date of enactment of this Act that compiles in2 formation on the current climate products being de3 livered by the National Oceanic and Atmospheric 

4 Administration and its partner organizations to 

5 users and stakeholders and on the needs of users 

6 and stakeholders for new climate products and serv7 ices. 

8 (2) CONTENTS OF REPORT.—The report shall 

9 identify— 

10 (A) specific user groups and stakeholders 

11 that currently are served by the National Oce12 anic and Atmospheric Administration and its 

13 partner organizations; 

14 (B) the type of climate products and serv15 ices currently delivered to specific user groups 

16 and stakeholders and the specific National Oce17 anic and Atmospheric Administration office or 

18 partner organization that delivers these prod19 ucts and services; 

20 (C) potential user groups and stakeholders 

21 that may be served by expanding climate prod22 ucts and services; and 

23 (D) specific needs for new climate products 

24 and services identified by user groups and 

25 stakeholders. 
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1 (3) CONSULTATION.—The Under Secretary 

2 shall consult with the Climate Service Advisory Com3 mittee in the preparation of this report. 

4 (j) IMPLEMENTATION PLAN.— 

5 (1) IN GENERAL.—The Under Secretary shall 

6 prepare a plan for creating a Climate Service Pro7 gram in the National Oceanic and Atmospheric Ad8 ministration and delivering climate products and 

9 services to the National Oceanic and Atmospheric 

10 Administration users and stakeholders. The plan 

11 shall be submitted to the President and the Con12 gress within 1 year after the date of enactment of 

13 this Act. 

14 (2) DRAFT PLAN.—Prior to the submission of 

15 the final plan, the Under Secretary shall publish a 

16 draft plan in the Federal Register with a public 

17 comment period of at least 30 days. 

18 (3) CONTENTS.—The plan shall— 

19 (A) identify the current gaps in climate 

20 services and outline the process and resources 

21 the National Oceanic and Atmospheric Admin22 istration will use to fill these gaps; 

23 (B) describe the roles of the National Oce24 anic and Atmospheric Administration line of25 fices and the National Oceanic and Atmospheric 
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1 Administration partner organizations in the de2 velopment and delivery of climate products and 

3 services; 

4 (C) describe the development and imple5 mentation of quality assurance and control 

6 mechanisms for climate products and services 

7 delivered by the National Oceanic and Atmos8 pheric Administration and its partner organiza9 tions; 

10 (D) identify the mechanisms and opportu11 nities for determining user needs and engaging 

12 in a two-way dialogue with users that will in13 form climate product and service development 

14 and delivery of authoritative, timely, and useful 

15 information on climate variability and change 

16 and the effects on local, State, regional, na17 tional, and global scales; 

18 (E) identify new responsibilities or tasks to 

19 be undertaken by existing National Oceanic and 

20 Atmospheric Administration line offices and 

21 partner organizations; 

22 (F) identify new infrastructure, equipment, 

23 personnel, or other resources needed to imple24 ment the proposed plan; and 
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1 (G) include responses to the comments re2 ceived during the public comment period. 

3 (4) CONTINUITY OF SERVICE.—During the de4 velopment of the implementation plan, the public 

5 comment period, and final plan, the National Oce6 anic and Atmospheric Administration shall continue 

7 to provide climate services to the user community. 

8 (5) CONSULTATION.—In developing the plan, 

9 the Under Secretary shall consult with user groups 

10 and stakeholders, State Climate Offices, Regional 

11 Climate Centers, other Federal agencies, the Climate 

12 Service Advisory Committee, and Congress. 

13 (6) COORDINATION WITH INTERAGENCY DEVEL14 OPMENT OF A NATIONAL CLIMATE SERVICE.—In 

15 preparing the plan required under this subsection, 

16 the Under Secretary shall consult with the Director 

17 of the Office of Science and Technology Policy to en18 sure that the program developed by the Agency will 

19 serve the needs of a National Climate Service. 

20 (k) SUMMER INSTITUTES PROGRAM AT THE RE21 GIONAL CLIMATE CENTERS.— 

22 (1) DEFINITIONS.—In this subsection: 

23 (A) SUMMER INSTITUTE.—The term 

24 ‘‘summer institute’’ means an institute, oper25 ated during the summer, that— 
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1 (i) is hosted by a Regional Climate 

2 Center or an eligible partner; 

3 (ii) is operated for a period of not less 

4 than 2 weeks; and 

5 (iii) provides direct interaction of mid6 dle school and high school teacher and un7 dergraduate student participants with per8 sonnel of the Regional Climate Centers or 

9 eligible partners who have scientific exper10 tise in weather and climate. 

11 (B) ELIGIBLE PARTNER.—The term ‘‘eligi12 ble partner’’ means— 

13 (i) the science, engineering, or mathe14 matics department at an institution of 

15 higher education; or 

16 (ii) a nonprofit entity with expertise 

17 in providing educational enrichment experi18 ences for students. 

19 (2) SUMMER INSTITUTES PROGRAM AUTHOR20 IZED.— 

21 (A) IN GENERAL.—The Under Secretary 

22 shall establish a summer institutes program, to 

23 be conducted in cooperation with the Regional 

24 Climate Centers, which may include an eligible 

25 partner. The purpose of the program is to pro-
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1 vide training and professional enrichment by 

2 providing opportunities for interaction between 

3 participants and climate scientists in a research 

4 and operational setting to— 

5 (i) enable middle school and high 

6 school teachers to integrate weather and 

7 climate sciences into their curricula: and 

8 (ii) encourage undergraduate students 

9 to pursue further study and careers in 

10 weather and climate sciences. 

11 (B) REQUIRED ACTIVITIES.—Funds au12 thorized under this subsection shall be used 

13 for— 

14 (i) providing educational opportunities 

15 for middle school and high school teachers 

16 and undergraduate students not achievable 

17 inside the classroom; 

18 (ii) exposing such teachers and stu19 dents to researchers, scientists, or engi20 neers who can demonstrate their daily ac21 tivities to the teachers and students; 

22 (iii) exposing teachers and students to 

23 scientific methods in a research discovery 

24 setting; and 
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1 (iv) assisting teachers with curriculum 

2 development in the areas of weather and 

3 climate science. 

4 (3) PRIORITY.—The Under Secretary shall en5 sure that each summer institute program authorized 

6 under paragraph (2) includes students from groups 

7 underrepresented in the fields of science, technology, 

8 engineering, and mathematics teaching, including 

9 women and members of minority groups. 

10 (4) REPORT TO CONGRESS.—The Under Sec11 retary shall submit to Congress a biennial report on 

12 the activities conducted under this subsection, in13 cluding the number of participants and the new cur14 ricula developed in atmospheric and climate sciences. 

15 (l) CLEARINGHOUSE OF FEDERAL CLIMATE SERVICE

16 PRODUCTS AND LINKS TO FEDERAL AGENCIES PRO17 VIDING CLIMATE SERVICES.— 

18 (1) IN GENERAL.—The Under Secretary shall 

19 establish and maintain a clearinghouse to inform 

20 State, local, and tribal governments and the public 

21 about the information and services available to— 

22 (A) assess the impacts of climate varia23 bility and change at different geographic scales; 
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1 (B) characterize and forecast climate vari2 ability and change for specific regions, re3 sources, and economic sectors; and 

4 (C) develop and implement adaptation 

5 strategies to reduce vulnerabilities to climate 

6 variability and change. 

7 (2) OTHER RESOURCES.—The clearinghouse 

8 shall include hyperlinks to Internet sites that de9 scribe the activities, information, and resources of— 

10 (A) the Federal Government; 

11 (B) State and local governments; 

12 (C) the private sector; 

13 (D) nongovernmental and nonprofit enti14 ties and organizations; and 

15 (E) international organizations. 

16 (m) FINANCIAL BURDEN.—Nothing in this section 

17 shall be construed as authorizing the National Climate 

18 Service or the Climate Service Program at the National 

19 Oceanic and Atmospheric Administration to require State, 

20 tribal, or local governments to develop adaptation or re21 sponse plans or to take any other action in response to 

22 variations in climate that may result in an increased finan23 cial burden to such governments. 
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1 SEC. 453. STATE PROGRAMS TO BUILD RESILIENCE TO CLI2 MATE CHANGE IMPACTS. 

3 (a) DEFINITIONS.—For purposes of this section: 

4 (1) ALLOWANCE.—The term ‘‘allowance’’ 

5 means an emission allowance established under sec6 tion 721 of the Clean Air Act (as added by section 

7 311 of this Act). 

8 (2) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 

9 has the meaning given the term in section 4 of the 

10 Indian Self-Determination and Education Assistance 

11 Act (25 U.S.C. 450b). 

12 (3) VINTAGE YEAR.—The term ‘‘vintage year’’ 

13 has the meaning given that term under section 700 

14 of the Clean Air Act (as added by section 312 of this 

15 Act). 

16 (b) REGULATIONS; COORDINATION.—Not later than 

17 2 years after the date of enactment of this Act, the Admin18 istrator, or such Federal agency head or heads as the 

19 President may designate, shall promulgate regulations to 

20 implement the requirements of this section. If the Presi21 dent designates more than 1 Federal agency to implement 

22 this section, the President shall require such agencies to 

23 establish a memorandum of understanding providing for 

24 coordination of rulemaking and other implementing activi25 ties, in accordance with the requirements of this section. 

26 (c) DISTRIBUTION OF ALLOWANCES.— 
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1 (1) IN GENERAL.—Not later than September 

2 30 of each of calendar years 2011 through 2049, the 

3 Administrator shall distribute, in accordance with 

4 this section, allowances allocated for the following 

5 vintage year pursuant to section 782(l) of the Clean 

6 Air Act (as added by section 321 of this Act). The 

7 Administrator shall reserve 1 percent of such allow8 ances for distribution to Indian tribes in accordance 

9 with subsection (d). The remainder of such allow10 ances shall be distributed ratably among the States 

11 based on the product of— 

12 (A) each State’s population; and 

13 (B) each State’s allocation factor as deter14 mined under paragraph (2). 

15 (2) STATE ALLOCATION FACTORS.— 

16 (A) IN GENERAL.—Except as provided in 

17 subparagraph (B), the allocation factor for a 

18 State shall be the quotient of— 

19 (i) the per capita income of all indi20 viduals in the United States, divided by 

21 (ii) the per capita income of all indi22 viduals in such State. 

23 (B) LIMITATION.—If the allocation factor 

24 for a State as calculated under subparagraph 

25 (A) would exceed 1.2, then the allocation factor 
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1 for such State shall be 1.2. If the allocation fac2 tor for a State as calculated under subpara3 graph (A) would be less than 0.8, then the allo4 cation factor for such State shall be 0.8. 

5 (C) PER CAPITA INCOME.—For purposes 

6 of this paragraph, per capita income shall be— 

7 (i) determined at 2-year intervals; and 

8 (ii) subject to subparagraph (D), 

9 equal to the average of the annual per cap10 ita incomes for the most recent period of 

11 3 consecutive years for which satisfactory 

12 data are available from the Department of 

13 Commerce at the time such determination 

14 is made. 

15 (D) REVENUE DIRECTLY RESULTING FROM

16 A PRESIDENTIALLY DECLARED MAJOR DIS17 ASTER.—For purposes of this paragraph, per 

18 capita income from one or more of the following 

19 sources shall be reduced or excluded if the Sec20 retary of Commerce (in consultation with the 

21 Administrator and the secretaries or adminis22 trators of the departments or agencies involved) 

23 determines that the income accrues to persons 

24 as the result of a Major Disaster (as declared 

25 by the President of the United States) and if 
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1 the Secretary finds that the inclusion of one or 

2 more of these income sources, in whole or in 

3 part, results in a transitory, rather than a sus4 tainable, increase in a State’s per capita income 

5 level relative to the national average: 

6 (i) Property and casualty insurance 

7 (including homeowners and renters insur8 ance). 

9 (ii) The National Flood Insurance 

10 Program of the Federal Emergency Man11 agement Agency. 

12 (iii) The Individual and Family 

13 Grants Program of the Federal Emergency 

14 Management Agency. 

15 (iv) The Disaster Housing Program of 

16 the Federal Emergency Management 

17 Agency. 

18 (v) The Community Development 

19 Block Grant Program of the Department 

20 of Housing and Urban Development. 

21 (vi) The Disaster Unemployment As22 sistance Program of the Department of 

23 Labor. 

24 (vii) Any other source determined ap25 propriate by the Administrator. 
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1 (d) DISTRIBUTION TO INDIAN TRIBES.—The Admin2 istrator, or such Federal agency head or heads as the 

3 President may designate, shall promulgate regulations es4 tablishing a program to distribute allowances on a com5 petitive basis to Indian tribes, in accordance with the re6 quirements of this section. Such allowances shall be used 

7 exclusively in accordance with the requirements of sub8 section (e). Beginning with vintage year 2015, Indian 

9 tribes with a tribal adaptation plan approved pursuant to 

10 subsection (f) shall be given priority in selection of pro11 grams or projects for receipt of emission allowances under 

12 this subsection. 

13 (e) USE OF ALLOWANCES.— 

14 (1) IN GENERAL.—States and Indian tribes 

15 shall use allowances distributed under this section 

16 exclusively for the implementation of projects, pro17 grams, or measures to build resilience to the impacts 

18 of climate change, including— 

19 (A) extreme weather events such as flood20 ing and tropical cyclones; 

21 (B) more frequent heavy precipitation 

22 events; 

23 (C) water scarcity and adverse impacts on 

24 water quality; 

25 (D) stronger and longer heat waves; 
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1 (E) more frequent and severe droughts; 

2 (F) rises in sea level; 

3 (G) ecosystem disruption; 

4 (H) increased air pollution; and 

5 (I) effects on public health. 

6 (2) PRIORITY IN PROJECTS TO REDUCE FLOOD

7 EVENTS.—When implementing any project, program, 

8 or measure supported under this section and de9 signed to reduce flood events, a State or Indian tribe 

10 should consider prioritizing projects that seek to— 

11 (A) mitigate the destructive impacts of cli12 mate-related increases in the duration, fre13 quency, or magnitude of rainfall or runoff, in14 cluding snowmelt runoff, as well as hurricanes; 

15 (B) improve flood protection for densely 

16 populated urban areas; and 

17 (C) mitigate the destructive impact of 

18 ocean-related climate change effects, including 

19 effects on bays, estuaries, populated barrier is20 lands and other ocean-related features, through 

21 a variety of means and measures, including the 

22 construction of jetties, levies, and other coastal 

23 structures in densely populated coastal areas 

24 impacted by climate change. 
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1 (3) STATE AND TRIBAL ADAPTATION PLANS.— 

2 Upon approval of a State or tribal climate adapta3 tion plan under subsection (f), allowances received 

4 by a State under this section shall be used in ac5 cordance with such plan. 

6 (4) SUPPLEMENT, NOT SUPPLANT.—It is the 

7 intent of the Congress that allowances distributed to 

8 carry out this section should be used to supplement, 

9 and not replace, existing sources of funding used to 

10 build resilience to the impacts of climate change 

11 identified in paragraph (1). 

12 (5) RESEARCH ON HURRICANES.—The author13 ized uses of allowances under this section shall in14 clude establishment of projects or programs to con15 duct research and monitoring on the effect of ongo16 ing climate change on the frequency and intensity of 

17 hurricanes. 

18 (f) STATE AND TRIBAL CLIMATE ADAPTATION

19 PLANS.— 

20 (1) IN GENERAL.—The regulations promulgated 

21 pursuant to subsection (b) shall include require22 ments for submission and approval of State or tribal 

23 climate adaptation plans under this section. Begin24 ning with vintage year 2015, distribution of allow25 ances to a State pursuant to this section shall be 
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1 contingent on approval of a State climate adaptation 

2 plan for such State that meets the requirements of 

3 such regulations. Requirements for tribal climate ad4 aptation plans may vary from those of State adapta5 tion plans to the extent necessary to account for the 

6 special circumstances of Indian tribes. 

7 (2) REQUIREMENTS.—Regulations promulgated 

8 under this section shall require, at minimum, that 

9 State and tribal climate adaptation plans— 

10 (A) assess and prioritize the State’s or In11 dian tribe’s vulnerability to a broad range of 

12 impacts of climate change, based on the best 

13 available science; 

14 (B) include an assessment of potential for 

15 carbon reduction through changes to land man16 agement policies (including enhancement or 

17 protection of forest carbon sinks); 

18 (C) identify and prioritize specific cost-ef19 fective projects, programs, and measures to 

20 build resilience to current and predicted im21 pacts of climate change; 

22 (D) ensure that the State or Indian tribe 

23 fully considers and undertakes, to the maximum 

24 extent practicable, initiatives that— 
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1 (i) protect or enhance natural eco2 system functions, including protection, 

3 maintenance, or restoration of natural in4 frastructure such as wetlands, reefs, and 

5 barrier islands to buffer communities from 

6 floodwaters or storms, watershed protec7 tion to maintain water quality and ground8 water recharge, or floodplain restoration to 

9 improve natural flood control capacity; or 

10 (ii) use non-structural approaches in11 cluding practices that utilize, enhance, or 

12 mimic the natural hydrologic cycle proc13 esses of infiltration, evapotranspiration, 

14 and reuse; 

15 (E) be revised and resubmitted for ap16 proval not less frequently than every 5 years; 

17 and 

18 (F) be consistent with Federal conserva19 tion and environmental laws and, to the max20 imum extent practicable, avoid environmental 

21 degradation. 

22 (3) COORDINATION WITH PRIOR PLANNING EF23 FORTS.—In implementing this subsection, the Ad24 ministrator, or such Federal agency head or heads 

25 as the President may designate, shall— 
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1 (A) draw upon lessons learned and best 

2 practices from preexisting State and tribal cli3 mate adaptation planning efforts; 

4 (B) seek to avoid duplication of such ef5 forts; and 

6 (C) ensure that the plans developed under 

7 this section reflect and are fully consistent with 

8 State natural resources adaptation plans devel9 oped under section 479 of this Act. 

10 (g) REPORTING.—Each State or Indian tribe receiv11 ing allowances under this section shall submit to the Ad12 ministrator, or such Federal agency head or heads as the 

13 President may designate, within 12 months after each re14 ceipt of such allowances and once every 2 years thereafter 

15 until the value of any allowances received under this sec16 tion has been fully expended, a report that— 

17 (1) provides a full accounting for the State’s or 

18 Indian tribe’s use of allowances distributed under 

19 this section, including a description of the projects, 

20 programs, or measures supported using such allow21 ances; 

22 (2) includes a report prepared by an inde23 pendent third party, in accordance with such regula24 tions as are promulgated by the Administrator or 

25 such other Federal agency head or heads as the 
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1 President may designate, evaluating the performance 

2 of the projects, programs, or measures supported 

3 under this section; and 

4 (3) identifies any use by the State or Indian 

5 tribe of allowances distributed under this section for 

6 the reduction of flood and storm damage and the ef7 fects of climate change on water and flood protection 

8 infrastructure. 

9 (h) ENFORCEMENT.—If the Administrator, or such 

10 Federal agency head or heads as the President may des11 ignate, determines that a State or Indian tribe is not in 

12 compliance with this section, the Administrator or such 

13 other agency head may withhold a quantity of the allow14 ances equal to up to twice the quantity of allowances that 

15 the State or Indian tribe failed to use in accordance with 

16 the requirements of this section, that such State or Indian 

17 tribe would otherwise be eligible to receive under this sec18 tion in 1 or more later years. Allowances withheld pursu19 ant to this subsection shall be distributed among the re20 maining States or Indian tribes ratably in accordance with 

21 the formula in subsection (c) in the case of allowances 

22 withheld from a State, or in accordance with subsection 

23 (d) in the case of allowances withheld from an Indian 

24 tribe. 
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1 Subpart B—Public Health and Climate Change 

2 SEC. 461. SENSE OF CONGRESS ON PUBLIC HEALTH AND 

3 CLIMATE CHANGE. 

4 It is the sense of the Congress that the Federal Gov5 ernment, in cooperation with international, State, tribal, 

6 and local governments, concerned public and private orga7 nizations, and citizens, should use all practicable means 

8 and measures— 

9 (1) to assist the efforts of public health and 

10 health care professionals, first responders, States, 

11 tribes, municipalities, and local communities to in12 corporate measures to prepare health systems to re13 spond to the impacts of climate change; 

14 (2) to ensure— 

15 (A) that the Nation’s health professionals 

16 have sufficient information to prepare for and 

17 respond to the adverse health impacts of cli18 mate change; 

19 (B) the utility and value of scientific re20 search in advancing understanding of— 

21 (i) the health impacts of climate 

22 change; and 

23 (ii) strategies to prepare for and re24 spond to the health impacts of climate 

25 change; 
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1 (C) the identification of communities vul2 nerable to the health effects of climate change 

3 and the development of strategic response plans 

4 to be carried out by health professionals for 

5 those communities; 

6 (D) the improvement of health status and 

7 health equity through efforts to prepare for and 

8 respond to climate change; and 

9 (E) the inclusion of health policy in the de10 velopment of climate change responses; 

11 (3) to encourage further research, interdiscipli12 nary partnership, and collaboration among stake13 holders in order to— 

14 (A) understand and monitor the health im15 pacts of climate change; and 

16 (B) improve public health knowledge and 

17 response strategies to climate change; 

18 (4) to enhance preparedness activities, and pub19 lic health infrastructure, relating to climate change 

20 and health; 

21 (5) to encourage each and every American to 

22 learn about the impacts of climate change on health; 

23 and 
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1 (6) to assist the efforts of developing nations to 

2 incorporate measures to prepare health systems to 

3 respond to the impacts of climate change. 

4 SEC. 462. RELATIONSHIP TO OTHER LAWS. 

5 Nothing in this subpart in any manner limits the au6 thority provided to or responsibility conferred on any Fed7 eral department or agency by any provision of any law 

8 (including regulations) or authorizes any violation of any 

9 provision of any law (including regulations), including any 

10 health, energy, environmental, transportation, or any 

11 other law or regulation. 

12 SEC. 463. NATIONAL STRATEGIC ACTION PLAN. 

13 (a) REQUIREMENT.— 

14 (1) IN GENERAL.—The Secretary of Health and 

15 Human Services, within 2 years after the date of the 

16 enactment of this Act, on the basis of the best avail17 able science, and in consultation pursuant to para18 graph (2), shall publish a strategic action plan to as19 sist health professionals in preparing for and re20 sponding to the impacts of climate change on public 

21 health in the United States and other nations, par22 ticularly developing nations. 

23 (2) CONSULTATION.—In developing or making 

24 any revision to the national strategic action plan, the 

25 Secretary shall— 
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1 (A) consult with the Director of the Cen2 ters for Disease Control and Prevention, the 

3 Administrator of the Environmental Protection 

4 Agency, the Director of the National Institutes 

5 of Health, the Secretary of Energy, other ap6 propriate Federal agencies, Indian tribes, State 

7 and local governments, public health organiza8 tions, scientists, and other interested stake9 holders; and 

10 (B) provide opportunity for public input. 

11 (b) CONTENTS.— 

12 (1) IN GENERAL.—The Secretary, acting 

13 through the Director of the Centers for Disease 

14 Control and Prevention and other appropriate Fed15 eral agencies, shall assist health professionals in pre16 paring for and responding effectively and efficiently 

17 to the health effects of climate change through 

18 measures including— 

19 (A) developing, improving, integrating, and 

20 maintaining domestic and international disease 

21 surveillance systems and monitoring capacity to 

22 respond to health-related effects of climate 

23 change, including on topics addressing— 

24 (i) water, food, and vector borne infec25 tious diseases and climate change; 
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1 (ii) pulmonary effects, including re2 sponses to aeroallergens; 

3 (iii) cardiovascular effects, including 

4 impacts of temperature extremes; 

5 (iv) air pollution health effects, includ6 ing heightened sensitivity to air pollution; 

7 (v) hazardous algal blooms; 

8 (vi) mental and behavioral health im9 pacts of climate change; 

10 (vii) the health of refugees, displaced 

11 persons, and vulnerable communities; 

12 (viii) the implications for communities 

13 vulnerable to health effects of climate 

14 change, as well as strategies for responding 

15 to climate change within these commu16 nities; and 

17 (ix) local and community-based health 

18 interventions for climate-related health im19 pacts; 

20 (B) creating tools for predicting and moni21 toring the public health effects of climate 

22 change on the international, national, regional, 

23 State, and local levels, and providing technical 

24 support to assist in their implementation; 
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1 (C) developing public health communica2 tions strategies and interventions for extreme 

3 weather events and disaster response situations; 

4 (D) identifying and prioritizing commu5 nities and populations vulnerable to the health 

6 effects of climate change, and determining ac7 tions and communication strategies that should 

8 be taken to inform and protect these commu9 nities and populations from the health effects of 

10 climate change; 

11 (E) developing health communication, pub12 lic education, and outreach programs aimed at 

13 public health and health care professionals, as 

14 well as the general public, to promote prepared15 ness and response strategies relating to climate 

16 change and public health, including the identi17 fication of greenhouse gas reduction behaviors 

18 that are health-promoting; and 

19 (F) developing academic and regional cen20 ters of excellence devoted to— 

21 (i) researching relationships between 

22 climate change and health; 

23 (ii) expanding and training the public 

24 health workforce to strengthen the capacity 

25 of such workforce to respond to and pre-
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1 pare for the health effects of climate 

2 change; 

3 (iii) creating and supporting academic 

4 fellowships focusing on the health effects 

5 of climate change; and 

6 (iv) training senior health ministry of7 ficials from developing nations to strength8 en the capacity of such nations to— 

9 (I) prepare for and respond to 

10 the health effects of climate change; 

11 and 

12 (II) build an international net13 work of public health professionals 

14 with the necessary climate change 

15 knowledge base; 

16 (G) using techniques, including health im17 pact assessments, to assess various climate 

18 change public health preparedness and response 

19 strategies on international, national, State, re20 gional, tribal, and local levels, and make rec21 ommendations as to those strategies that best 

22 protect the public health; 

23 (H)(i) assisting in the development, imple24 mentation, and support of State, regional, trib25 al, and local preparedness, communication, and 
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1 response plans (including with respect to the 

2 health departments of such entities) to antici3 pate and reduce the health threats of climate 

4 change; and 

5 (ii) pursuing collaborative efforts to de6 velop, integrate, and implement such plans; 

7 (I) creating a program to advance research 

8 as it relates to the effects of climate change on 

9 public health across Federal agencies, including 

10 research to— 

11 (i) identify and assess climate change 

12 health effects preparedness and response 

13 strategies; 

14 (ii) prioritize critical public health in15 frastructure projects related to potential 

16 climate change impacts that affect public 

17 health; and 

18 (iii) coordinate preparedness for cli19 mate change health impacts, including the 

20 development of modeling and forecasting 

21 tools; 

22 (J) providing technical assistance for the 

23 development, implementation, and support of 

24 preparedness and response plans to anticipate 
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1 and reduce the health threats of climate change 

2 in developing nations; and 

3 (K) carrying out other activities deter4 mined appropriate by the Secretary to plan for 

5 and respond to the impacts of climate change 

6 on public health. 

7 (c) REVISION.—The Secretary shall revise the na8 tional strategic action plan not later than July 1, 2014, 

9 and every 4 years thereafter, to reflect new information 

10 collected pursuant to implementation of the national stra11 tegic action plan and otherwise, including information 

12 on— 

13 (1) the status of critical environmental health 

14 parameters and related human health impacts; 

15 (2) the impacts of climate change on public 

16 health; and 

17 (3) advances in the development of strategies 

18 for preparing for and responding to the impacts of 

19 climate change on public health. 

20 (d) IMPLEMENTATION.— 

21 (1) IMPLEMENTATION THROUGH HHS.—The 

22 Secretary shall exercise the Secretary’s authority 

23 under this subpart and other provisions of Federal 

24 law to achieve the goals and measures of the na25 tional strategic action plan. 
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1 (2) OTHER PUBLIC HEALTH PROGRAMS AND

2 INITIATIVES.—The Secretary and Federal officials of 

3 other relevant Federal agencies shall administer 

4 public health programs and initiatives authorized by 

5 provisions of law other than this subpart, subject to 

6 the requirements of such statutes, in a manner de7 signed to achieve the goals of the national strategic 

8 action plan. 

9 (3) CDC.—In furtherance of the national stra10 tegic action plan, the Secretary, acting through the 

11 Director of the Centers for Disease Control and Pre12 vention and the head of any other appropriate Fed13 eral agency, shall— 

14 (A) conduct scientific research to assist 

15 health professionals in preparing for and re16 sponding to the impacts of climate change on 

17 public health; and 

18 (B) provide funding for— 

19 (i) research on the health effects of 

20 climate change; and 

21 (ii) preparedness planning on the 

22 international, national, State, tribal, re23 gional, and local levels to respond to or re24 duce the burden of health effects of climate 

25 change; and 
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1 (C) carry out other activities determined 

2 appropriate by the Director or the head of such 

3 agency to prepare for and respond to the im4 pacts of climate change on public health. 

5 SEC. 464. ADVISORY BOARD. 

6 (a) ESTABLISHMENT.—The Secretary shall establish 

7 a permanent science advisory board comprised of not less 

8 than 10 and not more than 20 members. 

9 (b) APPOINTMENT OF MEMBERS.—The Secretary 

10 shall appoint the members of the science advisory board 

11 from among individuals— 

12 (1) who have expertise in public health and 

13 human services, climate change, and other relevant 

14 disciplines; and 

(2) at least 1 15 ⁄2 of whom are recommended by 

16 the President of the National Academy of Sciences. 

17 (c) FUNCTIONS.—The science advisory board shall— 

18 (1) provide scientific and technical advice and 

19 recommendations to the Secretary on the domestic 

20 and international impacts of climate change on pub21 lic health, populations and regions particularly vul22 nerable to the effects of climate change, and strate23 gies and mechanisms to prepare for and respond to 

24 the impacts of climate change on public health; and 
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1 (2) advise the Secretary regarding the best 

2 science available for purposes of issuing the national 

3 strategic action plan. 

4 SEC. 465. REPORTS. 

5 (a) NEEDS ASSESSMENT.— 

6 (1) IN GENERAL.—The Secretary shall seek to 

7 enter into, by not later than 6 months after the date 

8 of the enactment of this Act, an agreement with the 

9 National Research Council and the Institute of Med10 icine to complete a report that— 

11 (A) assesses the needs for health profes12 sionals to prepare for and respond to climate 

13 change impacts on public health; and 

14 (B) recommends programs to meet those 

15 needs. 

16 (2) SUBMISSION.—The agreement under para17 graph (1) shall require the completed report to be 

18 submitted to the Congress and the Secretary and 

19 made publicly available not later than 1 year after 

20 the date of the agreement. 

21 (b) CLIMATE CHANGE HEALTH PROTECTION AND

22 PROMOTION REPORTS.— 

23 (1) IN GENERAL.—The Secretary, in consulta24 tion with the advisory board established under sec25 tion 464, shall ensure the issuance of reports to aid 
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1 health professionals in preparing for and responding 

2 to the adverse health effects of climate change 

3 that— 

4 (A) review scientific developments on 

5 health impacts of climate change; and 

6 (B) recommend changes to the national 

7 strategic action plan. 

8 (2) SUBMISSION.—The Secretary shall submit 

9 the reports required by paragraph (1) to the Con10 gress and make such reports publicly available not 

11 later than July 1, 2013, and every 4 years there12 after. 

13 SEC. 466. DEFINITIONS. 

14 In this subpart: 

15 (1) HEALTH IMPACT ASSESSMENT.—The term 

16 ‘‘health impact assessment’’ means a combination of 

17 procedures, methods, and tools by which a policy, 

18 program, or project may be judged as to its potential 

19 effects on the health of a population, and the dis20 tribution of those effects within the population. 

21 (2) NATIONAL STRATEGIC ACTION PLAN.—The 

22 term ‘‘national strategic action plan’’ means the 

23 plan issued and revised under section 463. 
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1 (3) SECRETARY.—Unless otherwise specified, 

2 the term ‘‘Secretary’’ means the Secretary of Health 

3 and Human Services. 

4 SEC. 467. CLIMATE CHANGE HEALTH PROTECTION AND 

5 PROMOTION FUND. 

6 (a) ESTABLISHMENT OF FUND.—Subject to subtitle 

7 F of title IV, there is hereby established in the Treasury 

8 a separate account that shall be known as the Climate 

9 Change Health Protection and Promotion Fund. 

10 (b) AVAILABILITY OF AMOUNTS.—Subject to subtitle 

11 F of title IV, all amounts deposited into the Climate 

12 Change Health Protection and Promotion Fund shall be 

13 available to the Secretary to carry out this subpart subject 

14 to further appropriation. 

15 (c) DISTRIBUTION OF FUNDS BY HHS.—In carrying 

16 out this subpart, the Secretary may make funds deposited 

17 in the Climate Change Health Protection and Promotion 

18 Fund available to— 

19 (1) other departments, agencies, and offices of 

20 the Federal Government; 

21 (2) foreign, State, tribal, and local govern22 ments; and 

23 (3) such other entities as the Secretary deter24 mines appropriate. 
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1 (d) SUPPLEMENT, NOT REPLACE.—It is the intent 

2 of Congress that funds made available to carry out this 

3 subpart should be used to supplement, and not replace, 

4 existing sources of funding for public health. 

5 Subpart C—Natural Resource Adaptation 

6 SEC. 471. PURPOSES. 

7 The purposes of this subpart are to— 

8 (1) establish an integrated Federal program to 

9 protect, restore, and conserve the Nation’s natural 

10 resources in response to the threats of climate 

11 change and ocean acidification; and 

12 (2) provide financial support and incentives for 

13 programs, strategies, and activities that protect, re14 store, and conserve the Nation’s natural resources in 

15 response to the threats of climate change and ocean 

16 acidification. 

17 SEC. 472. NATURAL RESOURCES CLIMATE CHANGE ADAP18 TATION POLICY. 

19 It is the policy of the Federal Government, in co20 operation with State and local governments, Indian tribes, 

21 and other interested stakeholders to use all practicable 

22 means and measures to protect, restore, and conserve nat23 ural resources to enable them to become more resilient, 

24 adapt to, and withstand the impacts of climate change and 

25 ocean acidification. 
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1 SEC. 473. DEFINITIONS. 

2 In this subpart: 

3 (1) COASTAL STATE.—The term ‘‘coastal 

4 State’’ has the meaning given the term in section 

5 304 of the Coastal Zone Management Act of 1972 

6 (16 U.S.C. 1453). 

7 (2) CORRIDORS.—The term ‘‘corridors’’ means 

8 areas that provide connectivity, over different time 

9 scales (including seasonal or longer), of habitat or 

10 potential habitat and that facilitate the ability of ter11 restrial, marine, estuarine, and freshwater fish, wild12 life, or plants to move within a landscape as needed 

13 for migration, gene flow, or dispersal, or in response 

14 to the impacts of climate change and ocean acidifica15 tion or other impacts. 

16 (3) ECOLOGICAL PROCESSES.—The term ‘‘eco17 logical processes’’ means biological, chemical, or 

18 physical interaction between the biotic and abiotic 

19 components of an ecosystem and includes— 

20 (A) nutrient cycling; 

21 (B) pollination; 

22 (C) predator-prey relationships; 

23 (D) soil formation; 

24 (E) gene flow; 

25 (F) disease epizootiology; 

26 (G) larval dispersal and settlement; 
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1 (H) hydrological cycling; 

2 (I) decomposition; and 

3 (J) disturbance regimes such as fire and 

4 flooding. 

5 (4) HABITAT.—The term ‘‘habitat’’ means the 

6 physical, chemical, and biological properties that are 

7 used by fish, wildlife, or plants for growth, reproduc8 tion, survival, food, water, and cover, on a tract of 

9 land, in a body of water, or in an area or region. 

10 (5) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 

11 has the meaning given the term in section 4 of the 

12 Indian Self-Determination and Education Assistance 

13 Act (25 U.S.C. 450b). 

14 (6) NATURAL RESOURCES.—The term ‘‘natural 

15 resources’’ means the terrestrial, freshwater, estua16 rine, and marine fish, wildlife, plants, land, water, 

17 habitats, and ecosystems of the United States. 

18 (7) NATURAL RESOURCES ADAPTATION.—The 

19 term ‘‘natural resources adaptation’’ means the pro20 tection, restoration, and conservation of natural re21 sources to enable them to become more resilient, 

22 adapt to, and withstand the impacts of climate 

23 change and ocean acidification. 

24 (8) RESILIENCE.—Each of the terms ‘‘resil25 ience’’ and ‘‘resilient’’ means the ability to resist or 
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1 recover from disturbance and preserve diversity, pro2 ductivity, and sustainability. 

3 (9) STATE.—The term ‘‘State’’ means— 

4 (A) a State of the United States; 

5 (B) the District of Columbia; and 

6 (C) the Commonwealth of Puerto Rico, 

7 Guam, the United States Virgin Islands, the 

8 Northern Mariana Islands, and American 

9 Samoa. 

10 SEC. 474. COUNCIL ON ENVIRONMENTAL QUALITY. 

11 The Chair of the Council on Environmental Quality 

12 shall— 

13 (1) advise the President on implementation and 

14 development of— 

15 (A) a Natural Resources Climate Change 

16 Adaptation Strategy required under section 

17 476; and 

18 (B) Federal natural resource agency adap19 tation plans required under section 478; 

20 (2) serve as the Chair of the Natural Resources 

21 Climate Change Adaptation Panel established under 

22 section 475; and 

23 (3) coordinate Federal agency strategies, plans, 

24 programs, and activities related to protecting, restor25 ing, and maintaining natural resources to become 
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1 more resilient, adapt to, and withstand the impacts 

2 of climate change and ocean acidification. 

3 SEC. 475. NATURAL RESOURCES CLIMATE CHANGE ADAP4 TATION PANEL. 

5 (a) ESTABLISHMENT.—Not later than 90 days after 

6 the date of the enactment of this subpart, the President 

7 shall establish a Natural Resources Climate Change Adap8 tation Panel, consisting of— 

9 (1) the head, or their designee, of each of— 

10 (A) the National Oceanic and Atmospheric 

11 Administration; 

12 (B) the Forest Service; 

13 (C) the National Park Service; 

14 (D) the United States Fish and Wildlife 

15 Service; 

16 (E) the Bureau of Land Management; 

17 (F) the United States Geological Survey; 

18 (G) the Bureau of Reclamation; 

19 (H) the Bureau of Indian Affairs; 

20 (I) the Environmental Protection Agency; 

21 and 

22 (J) the Army Corps of Engineers; 

23 (2) the Chair of the Council on Environmental 

24 Quality; and 
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1 (3) the heads of such other Federal agencies or 

2 departments with jurisdiction over natural resources 

3 of the United States, as determined by the Presi4 dent. 

5 (b) FUNCTIONS.—The Panel shall serve as a forum 

6 for interagency consultation on and the coordination of the 

7 development and implementation of a national Natural 

8 Resources Climate Change Adaptation Strategy required 

9 under section 476. 

10 (c) CHAIR.—The Chair of the Council on Environ11 mental Quality shall serve as the Chair of the Panel. 

12 SEC. 476. NATURAL RESOURCES CLIMATE CHANGE ADAP13 TATION STRATEGY. 

14 (a) IN GENERAL.—Not later than 1 year after the 

15 date of the enactment of this subpart, the President, 

16 through the Natural Resources Climate Change Adapta17 tion Panel established under section 475, shall develop a 

18 Natural Resources Climate Change Adaptation Strategy 

19 to protect, restore, and conserve natural resources to en20 able them to become more resilient, adapt to, and with21 stand the impacts of climate change and ocean acidifica22 tion and to identify opportunities to mitigate those im23 pacts. 

24 (b) DEVELOPMENT AND REVISION.—In developing 

25 and revising the Strategy, the Panel shall— 
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1 (1) base the strategy on the best available 

2 science; 

3 (2) develop the strategy in close cooperation 

4 with States and Indian tribes; 

5 (3) coordinate with other Federal agencies as 

6 appropriate; 

7 (4) consult with local governments, conservation 

8 organizations, scientists, and other interested stake9 holders; 

10 (5) provide public notice and opportunity for 

11 comment; and 

12 (6) review and revise the Strategy every 5 years 

13 to incorporate new information regarding the im14 pacts of climate change and ocean acidification on 

15 natural resources and advances in the development 

16 of strategies for becoming more resilient and adapt17 ing to those impacts. 

18 (c) CONTENTS.—The National Resources Adaptation 

19 Strategy shall include— 

20 (1) an assessment of the vulnerability of nat21 ural resources to climate change and ocean acidifica22 tion, including the short-term, medium-term, long23 term, cumulative, and synergistic impacts; 

24 (2) a description of current research, observa25 tion, and monitoring activities at the Federal, State, 
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1 tribal, and local level related to the impacts of cli2 mate change and ocean acidification on natural re3 sources, as well as identification of research and 

4 data needs and priorities; 

5 (3) identification of natural resources that are 

6 likely to have the greatest need for protection, res7 toration, and conservation because of the adverse ef8 fects of climate change and ocean acidification; 

9 (4) specific protocols for integrating climate 

10 change and ocean acidification adaptation strategies 

11 and activities into the conservation and management 

12 of natural resources by Federal departments and 

13 agencies to ensure consistency across agency juris14 dictions and resources; 

15 (5) specific actions that Federal departments 

16 and agencies shall take to protect, conserve, and re17 store natural resources to become more resilient, 

18 adapt to, and withstand the impacts of climate 

19 change and ocean acidification, including a timeline 

20 to implement those actions; 

21 (6) specific mechanisms for ensuring commu22 nication and coordination among Federal depart23 ments and agencies, and between Federal depart24 ments and agencies and State natural resource agen25 cies, United States territories, Indian tribes, private 
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1 landowners, conservation organizations, and other 

2 nations that share jurisdiction over natural resources 

3 with the United States; 

4 (7) specific actions to develop and implement 

5 consistent natural resources inventory and moni6 toring protocols through interagency coordination 

7 and collaboration; and 

8 (8) a process for guiding the development of de9 tailed agency- and department-specific adaptation 

10 plans required under section 478 to address the im11 pacts of climate change and ocean acidification on 

12 the natural resources in the jurisdiction of each 

13 agency. 

14 (d) IMPLEMENTATION.—Consistent with its authori15 ties under other laws and with Federal trust responsibil16 ities with respect to Indian lands, each Federal depart17 ment or agency with representation on the National Re18 sources Climate Change Adaptation Panel shall consider 

19 the impacts of climate change and ocean acidification and 

20 integrate the elements of the strategy into agency plans, 

21 environmental reviews, programs, and activities related to 

22 the conservation, restoration, and management of natural 

23 resources. 
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1 SEC. 477. NATURAL RESOURCES ADAPTATION SCIENCE 

2 AND INFORMATION. 

3 (a) COORDINATION.—Not later than 90 days after 

4 the date of the enactment of this subpart, the Secretary 

5 of Commerce, acting through the Administrator of the Na6 tional Oceanic and Atmospheric Administration, and the 

7 Secretary of the Interior, acting through the Director of 

8 the United States Geological Survey, shall establish a co9 ordinated process for developing and providing science and 

10 information needed to assess and address the impacts of 

11 climate change and ocean acidification on natural re12 sources. The process shall be led by the National Climate 

13 Change and Wildlife Science Center established within the 

14 United States Geological Survey under subsection (d) and 

15 the National Climate Service of the National Oceanic and 

16 Atmospheric Administration. 

17 (b) FUNCTIONS.—The Secretaries shall ensure that 

18 such process avoids duplication and that the National Oce19 anic and Atmospheric Administration and the United 

20 States Geological Survey shall— 

21 (1) provide technical assistance to Federal de22 partments and agencies, State and local govern23 ments, Indian tribes, and interested private land24 owners in their efforts to assess and address the im25 pacts of climate change and ocean acidification on 

26 natural resources; 
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1 (2) conduct and sponsor research and provide 

2 Federal departments and agencies, State and local 

3 governments, Indian tribes, and interested private 

4 landowners with research products, decision and 

5 monitoring tools and information, to develop strate6 gies for assisting natural resources to become more 

7 resilient, adapt to, and withstand the impacts of cli8 mate change and ocean acidification; and 

9 (3) assist Federal departments and agencies in 

10 the development of the adaptation plans required 

11 under section 478. 

12 (c) SURVEY.—Not later than 1 year after the date 

13 of enactment of this subpart and every 5 years thereafter, 

14 the Secretary of Commerce and the Secretary of the Inte15 rior shall undertake a climate change and ocean acidifica16 tion impact survey that— 

17 (1) identifies natural resources considered likely 

18 to be adversely affected by climate change and ocean 

19 acidification; 

20 (2) includes baseline monitoring and ongoing 

21 trend analysis; 

22 (3) uses a stakeholder process to identify and 

23 prioritize needed monitoring and research that is of 

24 greatest relevance to the ongoing needs of natural 
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1 resource managers to address the impacts of climate 

2 change and ocean acidification; and 

3 (4) identifies decision tools necessary to develop 

4 strategies for assisting natural resources to become 

5 more resilient and adapt to and withstand the im6 pacts of climate change and ocean acidification. 

7 (d) NATIONAL CLIMATE CHANGE AND WILDLIFE

8 SCIENCE CENTER.— 

9 (1) ESTABLISHMENT.—The Secretary of the In10 terior shall establish the National Climate Change 

11 and Wildlife Science Center within the United States 

12 Geological Survey. 

13 (2) FUNCTIONS.—The Center shall, in collabo14 ration with Federal and State natural resources 

15 agencies and departments, Indian tribes, univer16 sities, and other partner organizations— 

17 (A) assess and synthesize current physical 

18 and biological knowledge and prioritize sci19 entific gaps in such knowledge in order to fore20 cast the ecological impacts of climate change on 

21 fish and wildlife at the ecosystem, habitat, com22 munity, population, and species levels; 

23 (B) develop and improve tools to identify, 

24 evaluate, and, where appropriate, link scientific 

25 approaches and models for forecasting the im-
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1 pacts of climate change and adaptation on fish, 

2 wildlife, plants, and their habitats, including 

3 monitoring, predictive models, vulnerability 

4 analyses, risk assessments, and decision support 

5 systems to help managers make informed deci6 sions; 

7 (C) develop and evaluate tools to adapt8 ively manage and monitor the effects of climate 

9 change on fish and wildlife at national, regional, 

10 and local scales; and 

11 (D) develop capacities for sharing stand12 ardized data and the synthesis of such data. 

13 (e) SCIENCE ADVISORY BOARD.— 

14 (1) ESTABLISHMENT.—Not later than 180 days 

15 after the date of enactment of this subpart, the Sec16 retary of Commerce and the Secretary of the Inte17 rior shall establish and appoint the members of a 

18 Science Advisory Board, to be comprised of not 

19 fewer than 10 and not more than 20 members— 

20 (A) who have expertise in fish, wildlife, 

21 plant, aquatic, and coastal and marine biology, 

22 ecology, climate change, ocean acidification, and 

23 other relevant scientific disciplines; 

24 (B) who represent a balanced membership 

25 among Federal, State, Indian tribes, and local 
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1 representatives, universities, and conservation 

2 organizations; and 

(C) at least 1 3 ⁄2 of whom are recommended 

4 by the President of the National Academy of 

5 Sciences. 

6 (2) DUTIES.—The Science Advisory Board 

7 shall— 

8 (A) advise the Secretaries on the state-of9 the-science regarding the impacts of climate 

10 change and ocean acidification on natural re11 sources and scientific strategies and mecha12 nisms for protecting, restoring, and conserving 

13 natural resources to enable them to become 

14 more resilient, adapt to, and withstand the im15 pacts of climate change and ocean acidification; 

16 and 

17 (B) identify and recommend priorities for 

18 ongoing research needs on such issues. 

19 (3) COLLABORATION.—The Science Advisory 

20 Board shall collaborate with other climate change 

21 and ecosystem research entities in other Federal 

22 agencies and departments. 

23 (4) AVAILABILITY TO THE PUBLIC.—The advice 

24 and recommendations of the Science Advisory Board 

25 shall be made available to the public. 
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1 SEC. 478. FEDERAL NATURAL RESOURCE AGENCY ADAPTA2 TION PLANS. 

3 (a) DEVELOPMENT.—Not later than 1 year after the 

4 date of the development of a Natural Resources Climate 

5 Change Adaptation Strategy under section 476, each de6 partment or agency that has a representative on the Nat7 ural Resources Climate Change Adaptation Panel estab8 lished under section 475 shall— 

9 (1) complete an adaptation plan for that de10 partment or agency, respectively, implementing the 

11 Natural Resources Climate Change Adaptation 

12 Strategy under section 476 and consistent with the 

13 Natural Resources Climate Change Adaptation Pol14 icy under section 472, detailing the department’s or 

15 agency’s current and projected efforts to address the 

16 potential impacts of climate change and ocean acidi17 fication on natural resources within the depart18 ment’s or agency’s jurisdiction and necessary addi19 tional actions, including a timeline for implementa20 tion of those actions; 

21 (2) provide opportunities for review and com22 ment on that adaptation plan by the public, includ23 ing in the case of a plan by the Bureau of Indian 

24 Affairs, review by Indian tribes; and 

25 (3) submit such plan to the President for ap26 proval. 
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1 (b) REVIEW BY PRESIDENT AND SUBMISSION TO

2 CONGRESS.— 

3 (1) REVIEW BY PRESIDENT.—The President 

4 shall— 

5 (A) approve an adaptation plan submitted 

6 under subsection (a)(3) if the plan meets the 

7 requirements of subsection (c) and is consistent 

8 with the strategy developed under section 476; 

9 (B) decide whether to approve the plan 

10 within 60 days after submission; and 

11 (C) if the President disapproves a plan, di12 rect the department or agency to submit a re13 vised plan to the President under subsection 

14 (a)(3) within 60 days after such disapproval. 

15 (2) SUBMISSION TO CONGRESS.—Not later than 

16 30 days after the date of approval of such adapta17 tion plan by the President, the department or agen18 cy shall submit the approved plan to the Committee 

19 on Natural Resources of the House of Representa20 tives, the Committee on Energy and Natural Re21 sources of the Senate, and the committees of the 

22 House of Representatives and the Senate with prin23 cipal jurisdiction over the department or agency. 

24 (c) REQUIREMENTS.—Each adaptation plan shall— 
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1 (1) establish programs for assessing the current 

2 and future impacts of climate change and ocean 

3 acidification on natural resources within the depart4 ment’s or agency’s, respectively, jurisdiction, includ5 ing cumulative and synergistic effects, and for iden6 tifying and monitoring those natural resources that 

7 are likely to be adversely affected and that have 

8 need for conservation; 

9 (2) identify and prioritize the department’s or 

10 agency’s strategies and specific conservation actions 

11 to address the current and future impacts of climate 

12 change and ocean acidification on natural resources 

13 within the scope of the department’s or agency’s ju14 risdiction and to develop and implement strategies to 

15 protect, restore, and conserve such resources to be16 come more resilient, adapt to, and better withstand 

17 those impacts, including— 

18 (A) the protection, restoration, and con19 servation of terrestrial, marine, estuarine, and 

20 freshwater habitats and ecosystems; 

21 (B) the establishment of terrestrial, ma22 rine, estuarine, and freshwater habitat linkages 

23 and corridors; 

24 (C) the restoration and conservation of ec25 ological processes; 
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1 (D) the protection of a broad diversity of 

2 native species of fish, wildlife, and plant popu3 lations across their range; and 

4 (E) the protection of fish, wildlife, and 

5 plant health, recognizing that climate can alter 

6 the distribution and ecology of parasites, patho7 gens, and vectors; 

8 (3) describe how the department or agency will 

9 integrate such strategies and conservation activities 

10 into plans, programs, activities, and actions of the 

11 department or agency, related to the conservation 

12 and management of natural resources and establish 

13 new plans, programs, activities, and actions as nec14 essary; 

15 (4) establish methods for assessing the effec16 tiveness of strategies and conservation actions taken 

17 to protect, restore, and conserve natural resources to 

18 enable them to become more resilient, adapt to, and 

19 withstand the impacts of climate change and ocean 

20 acidification, and for updating those strategies and 

21 actions to respond to new information and changing 

22 conditions; 

23 (5) include a description of current and pro24 posed mechanisms to enhance cooperation and co25 ordination of natural resources adaptation efforts 
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1 with other Federal agencies, State and local govern2 ments, Indian tribes, and nongovernmental stake3 holders; 

4 (6) include specific written guidance to resource 

5 managers to— 

6 (A) explain how managers are expected to 

7 address the effects of climate change and ocean 

8 acidification; 

9 (B) identify how managers are to obtain 

10 any site-specific information that may be nec11 essary; and 

12 (C) reflect best practices shared among rel13 evant agencies, while also recognizing the 

14 unique missions, objectives, and responsibilities 

15 of each agency; and 

16 (7) identify and assess data and information 

17 gaps necessary to develop natural resources adapta18 tion plans and strategies. 

19 (d) IMPLEMENTATION.— 

20 (1) IN GENERAL.—Upon approval by the Presi21 dent, each department or agency that serves on the 

22 Natural Resources Climate Change Adaptation 

23 Panel shall implement its adaptation plan through 

24 existing and new plans, policies, programs, activities, 
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1 and actions to the extent not inconsistent with exist2 ing authority. 

3 (2) CONSIDERATION OF IMPACTS.— 

4 (A) IN GENERAL.—To the maximum ex5 tent practicable and consistent with applicable 

6 law, every natural resource management deci7 sion made by the department or agency shall 

8 consider the impacts of climate change and 

9 ocean acidification on those natural resources. 

10 (B) GUIDANCE.—The Council on Environ11 mental Quality shall issue guidance for Federal 

12 departments and agencies for considering those 

13 impacts. 

14 (e) REVISION AND REVIEW.—Not less than every 5 

15 years, each adaptation plan under this section shall be re16 viewed and revised to incorporate the best available science 

17 and other information regarding the impacts of climate 

18 change and ocean acidification on natural resources. 

19 SEC. 479. STATE NATURAL RESOURCES ADAPTATION 

20 PLANS. 

21 (a) REQUIREMENT.—In order to be eligible for funds 

22 under section 480, not later than 1 year after the develop23 ment of a Natural Resources Climate Change Adaptation 

24 Strategy required under section 476 each State shall pre25 pare a State natural resources adaptation plan detailing 
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1 the State’s current and projected efforts to address the 

2 potential impacts of climate change and ocean acidifica3 tion on natural resources and coastal areas within the 

4 State’s jurisdiction. 

5 (b) REVIEW OR APPROVAL.— 

6 (1) IN GENERAL.—Each State adaptation plan 

7 shall be reviewed and approved or disapproved by 

8 the Secretary of the Interior and, as applicable, the 

9 Secretary of Commerce. Such approval shall be 

10 granted if the plan meets the requirements of sub11 section (c) and is consistent with the Natural Re12 sources Climate Change Adaptation Strategy re13 quired under section 476. 

14 (2) APPROVAL OR DISAPPROVAL.—Within 180 

15 days after transmittal of such a plan, or a revision 

16 to such a plan, the Secretary of the Interior and, as 

17 applicable, the Secretary of Commerce shall approve 

18 or disapprove the plan by written notice. 

19 (3) RESUBMITTAL.—Within 90 days after 

20 transmittal of a resubmitted adaptation plan as a re21 sult of disapproval under paragraph (3), the Sec22 retary of the Interior and, as applicable, the Sec23 retary of Commerce, shall approve or disapprove the 

24 plan by written notice. 
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1 (c) CONTENTS.—A State natural resources adapta2 tion plan shall— 

3 (1) include a strategy for addressing the im4 pacts of climate change and ocean acidification on 

5 terrestrial, marine, estuarine, and freshwater fish, 

6 wildlife, plants, habitats, ecosystems, wildlife health, 

7 and ecological processes, that— 

8 (A) describes the impacts of climate 

9 change and ocean acidification on the diversity 

10 and health of the fish, wildlife and plant popu11 lations, habitats, ecosystems, and associated ec12 ological processes; 

13 (B) establishes programs for monitoring 

14 the impacts of climate change and ocean acidifi15 cation on fish, wildlife, and plant populations, 

16 habitats, ecosystems, and associated ecological 

17 processes; 

18 (C) describes and prioritizes proposed con19 servation actions to assist fish, wildlife, plant 

20 populations, habitats, ecosystems, and associ21 ated ecological processes in becoming more re22 silient, adapting to, and better withstanding 

23 those impacts; 

24 (D) includes strategies, specific conserva25 tion actions, and a time frame for implementing 
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1 conservation actions for fish, wildlife, and plant 

2 populations, habitats, ecosystems, and associ3 ated ecological processes; 

4 (E) establishes methods for assessing the 

5 effectiveness of strategies and conservation ac6 tions taken to assist fish, wildlife, and plant 

7 populations, habitats, ecosystems, and associ8 ated ecological processes in becoming more re9 silient, adapt to, and better withstand the im10 pacts of climate changes and ocean acidification 

11 and for updating those strategies and actions to 

12 respond appropriately to new information or 

13 changing conditions; 

14 (F) is incorporated into a revision of the 

15 State wildlife action plan (also known as the 

16 State comprehensive wildlife strategy)— 

17 (i) that has been submitted to the 

18 United States Fish and Wildlife Service; 

19 and 

20 (ii) that has been approved by the 

21 Service or on which a decision on approval 

22 is pending; and 

23 (G) is developed— 

24 (i) with the participation of the State 

25 fish and wildlife agency, the State coastal 
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1 agency, the State agency responsible for 

2 administration of Land and Water Con3 servation Fund grants, the State Forest 

4 Legacy program coordinator, and other 

5 State agencies considered appropriate by 

6 the Governor of such State; and 

7 (ii) in coordination with the Secretary 

8 of the Interior, and where applicable, the 

9 Secretary of Commerce and other States 

10 that share jurisdiction over natural re11 sources with the State; and 

12 (2) include, in the case of a coastal State, a 

13 strategy for addressing the impacts of climate 

14 change and ocean acidification on the coastal zone 

15 that— 

16 (A) identifies natural resources that are 

17 likely to be impacted by climate change and 

18 ocean acidification and describes those impacts; 

19 (B) identifies and prioritizes continuing re20 search and data collection needed to address 

21 those impacts including— 

22 (i) acquisition of high resolution 

23 coastal elevation and nearshore bathymetry 

24 data; 
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1 (ii) historic shoreline position maps, 

2 erosion rates, and inventories of shoreline 

3 features and structures; 

4 (iii) measures and models of relative 

5 rates of sea level rise or lake level changes, 

6 including effects on flooding, storm surge, 

7 inundation, and coastal geological proc8 esses; 

9 (iv) habitat loss, including projected 

10 losses of coastal wetlands and potentials 

11 for inland migration of natural shoreline 

12 habitats; 

13 (v) ocean and coastal species and eco14 system migrations, and changes in species 

15 population dynamics; 

16 (vi) changes in storm frequency, in17 tensity, or rainfall patterns; 

18 (vii) saltwater intrusion into coastal 

19 rivers and aquifers; 

20 (viii) changes in chemical or physical 

21 characteristics of marine and estuarine 

22 systems; 

23 (ix) increased harmful algal blooms; 

24 and 

25 (x) spread of invasive species; 
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1 (C) identifies and prioritizes adaptation 

2 strategies to protect, restore, and conserve nat3 ural resources to enable them to become more 

4 resilient, adapt to, and withstand the impacts of 

5 climate change and ocean acidification, includ6 ing— 

7 (i) protection, maintenance, and res8 toration of ecologically important coastal 

9 lands, coastal and ocean ecosystems, and 

10 species biodiversity and the establishment 

11 of habitat buffer zones, migration cor12 ridors, and climate refugia; and 

13 (ii) improved planning, siting policies, 

14 and hazard mitigation strategies; 

15 (D) establishes programs for the long-term 

16 monitoring of the impacts of climate change 

17 and ocean acidification on the ocean and coastal 

18 zone and to assess and adjust, when necessary, 

19 such adaptive management strategies; 

20 (E) establishes performance measures for 

21 assessing the effectiveness of adaptation strate22 gies intended to improve resilience and the abil23 ity of natural resources in the coastal zone to 

24 adapt to and withstand the impacts of climate 

25 change and ocean acidification and of adapta-
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1 tion strategies intended to minimize those im2 pacts on the coastal zone and to update those 

3 strategies to respond to new information or 

4 changing conditions; and 

5 (F) is developed with the participation of 

6 the State coastal agency and other appropriate 

7 State agencies and in coordination with the 

8 Secretary of Commerce and other appropriate 

9 Federal agencies. 

10 (d) PUBLIC INPUT.—States shall provide for solicita11 tion and consideration of public and independent scientific 

12 input in the development of their plans. 

13 (e) COORDINATION WITH OTHER PLANS.—The State 

14 plan shall take into consideration research and informa15 tion contained in, and coordinate with and integrate the 

16 goals and measures identified in, as appropriate, other 

17 natural resources conservation strategies, including— 

18 (1) the national fish habitat action plan; 

19 (2) plans under the North American Wetlands 

20 Conservation Act (16 U.S.C. 4401 et seq.); 

21 (3) the Federal, State, and local partnership 

22 known as ‘‘Partners in Flight’’; 

23 (4) federally approved coastal zone management 

24 plans under the Coastal Zone Management Act of 

25 1972 (16 U.S.C. 1451 et seq.); 
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1 (5) federally approved regional fishery manage2 ment plants and habitat conservation activities 

3 under the Magnuson-Stevens Fishery Conservation 

4 and Management Act (16 U.S.C. 1801 et seq.); 

5 (6) the national coral reef action plan; 

6 (7) recovery plans for threatened species and 

7 endangered species under section 4(f) of the Endan8 gered Species Act of 1973 (16 U.S.C. 1533(f)); 

9 (8) habitat conservation plans under section 10 

10 of that Act (16 U.S.C. 1539); 

11 (9) other Federal, State, and tribal plans for 

12 imperiled species; 

13 (10) State or tribal hazard mitigation plans; 

14 (11) State or tribal water management plans; 

15 and 

16 (12) other State-based strategies that com17 prehensively implement adaptation activities to re18 mediate the effects of climate change and ocean 

19 acidification on terrestrial, marine, and freshwater 

20 fish, wildlife, plants, and other natural resources. 

21 (f) UPDATING.—Each State plan shall be updated 

22 not less than every 5 years. 

23 (g) FUNDING.— 

24 (1) IN GENERAL.—Funds allocated to States 

25 under section 480 shall be used only for activities 
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1 that are consistent with a State natural resources 

2 adaptation plan that has been approved by the Sec3 retaries of Interior and Commerce. 

4 (2) FUNDING PRIOR TO THE APPROVAL OF A

5 STATE PLAN.—Until the earlier of the date that is 

6 3 years after the date of the enactment of this sub7 part or the date on which a State receives approval 

8 for the State strategy, a State shall be eligible to re9 ceive funding under section 480 for adaptation ac10 tivities that are— 

11 (A) consistent with the comprehensive 

12 wildlife strategy of the State and, where appro13 priate, other natural resources conservation 

14 strategies; and 

15 (B) in accordance with a workplan devel16 oped in coordination with— 

17 (i) the Secretary of the Interior; and 

18 (ii) the Secretary of Commerce, for 

19 any coastal State subject to the condition 

20 that coordination with the Secretary of 

21 Commerce shall be required only for those 

22 portions of the strategy relating to activi23 ties affecting the coastal zone. 

24 (3) PENDING APPROVAL.—During the period 

25 for which approval by the applicable Secretary of a 
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1 State plan is pending, the State may continue receiv2 ing funds under section 480 pursuant to the 

3 workplan described in paragraph (2)(B). 

4 SEC. 480. NATURAL RESOURCES CLIMATE CHANGE ADAP5 TATION FUND. 

6 (a) ALLOCATIONS TO STATES.—100 percent of the 

7 emission allowances made available for each year to carry 

8 out this subpart shall be provided to States to carry out 

9 natural resources adaptation activities in accordance with 

10 State natural resources adaptation plans approved under 

11 section 479. Specifically— 

12 (1) 84.4 percent shall be available to State 

13 wildlife agencies in accordance with the apportion14 ment formula established under the second sub15 section (c) of section 4 of the Pittman-Robertson 

16 Wildlife Restoration Act (16 U.S.C. 669c), as added 

17 by section 902(e) of H.R. 5548 as introduced in the 

18 106th Congress and enacted into law by section 

19 1(a)(2) of Public Law 106–553 (114 Stat. 2762A– 

20 119); and 

21 (2) 15.6 percent shall be available to State 

22 coastal agencies pursuant to the formula established 

23 by the Secretary of Commerce under section 306(c) 

24 of the Coastal Management Act of 1972 (16 U.S.C. 

25 1455(c)). 
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1 (b) ESTABLISHMENT OF FUND.— 

2 (1) ESTABLISHMENT.—Subject to subtitle F of 

3 title IV, there is hereby established in the Treasury 

4 a separate account that shall be known as the Nat5 ural Resources Climate Change Adaptation Fund. 

6 (2) AUTHORIZATION OF APPROPRIATIONS.— 

7 Subject to subtitle F of title IV, there are authorized 

8 to be appropriated for subsection (c) such sums as 

9 are deposited in the Natural Resources Climate 

10 Change Fund, and the amounts appropriated for 

11 subsection (c) shall be no less than the total esti12 mated annual deposits in the Natural Resources Cli13 mate Change Adaptation Fund. 

14 (c) ALLOCATIONS TO FEDERAL AGENCIES.— 

15 (1) DEPARTMENT OF THE INTERIOR.—Of the 

16 amounts made available for each fiscal year to carry 

17 out this subpart— 

18 (A) 27.6 percent shall be allocated to the 

19 Secretary of the Interior for use in funding— 

20 (i) natural resources adaptation activi21 ties carried out— 

22 (I) under endangered species, mi23 gratory species, and other fish and 

24 wildlife programs administered by the 

25 National Park Service, the United 
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1 States Fish and Wildlife Service, the 

2 Bureau of Indian Affairs, and the Bu3 reau of Land Management; 

4 (II) on wildlife refuges, National 

5 Park Service land, and other public 

6 land under the jurisdiction of the 

7 United States Fish and Wildlife Serv8 ice, the Bureau of Land Management, 

9 the Bureau of Indian Affairs, or the 

10 National Park Service; or 

11 (III) within Federal water man12 aged by the Bureau of Reclamation 

13 and the National Park Service; and 

14 (ii) for the implementation of the Na15 tional Fish and Wildlife Habitat and Cor16 ridors Identification Program pursuant to 

17 section 481; 

18 (B) 8.1 percent shall be allocated to the 

19 Secretary of the Interior for natural resources 

20 adaptation activities carried out under coopera21 tive grant programs, including— 

22 (i) the cooperative endangered species 

23 conservation fund authorized under section 

24 6 of the Endangered Species Act of 1973 

25 (16 U.S.C. 1535); 
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1 (ii) programs under the North Amer2 ican Wetlands Conservation Act (16 

3 U.S.C. 4401 et seq.); 

4 (iii) the Neotropical Migratory Bird 

5 Conservation Fund established by section 

6 478(a) of the Neotropical Migratory Bird 

7 Conservation Act (16 U.S.C. 6108(a)); 

8 (iv) the Coastal Program of the 

9 United States Fish and Wildlife Service; 

10 (v) the National Fish Habitat Action 

11 Plan; 

12 (vi) the Partners for Fish and Wildlife 

13 Program; 

14 (vii) the Landowner Incentive Pro15 gram; 

16 (viii) the Wildlife Without Borders 

17 Program of the United States Fish and 

18 Wildlife Service; and 

19 (ix) the Migratory Species Program 

20 and Park Flight Migratory Bird Program 

21 of the National Park Service; and 

22 (C) 4.9 percent shall be allocated to the 

23 Secretary of the Interior to provide financial as24 sistance to Indian tribes to carry out natural 

25 resources adaptation activities through the 
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1 Tribal Wildlife Grants Program of the United 

2 States Fish and Wildlife Service and in accord3 ance with the Indian Self-Determination and 

4 Educational Assistance Act (25 U.S.C. 450(f)). 

5 (2) LAND AND WATER CONSERVATION FUND.— 

6 (A) DEPOSITS.— 

7 (i) IN GENERAL.—Of the amounts 

8 made available for each fiscal year to carry 

9 out this subpart, 19.5 percent shall be de10 posited into the Land and Water Conserva11 tion Fund established under section 2 of 

12 the Land and Water Conservation Fund 

13 Act of 1965 (16 U.S.C. 460l–5). 

14 (ii) USE OF DEPOSITS.—(I) Deposits 

15 into the Land and Water Conservation 

16 Fund under this paragraph shall be sup17 plemental to authorizations provided under 

18 section 3 of the Land and Water Conserva19 tion Fund Act of 1965 (16 U.S.C. 460l–6), 

20 which shall remain available for non21 adaptation needs. 

22 (II) There are authorized to be appro23 priated for activities in this subpart such 

24 sums as are deposited in the Land and 

25 Water Conservation Fund pursuant to sec-
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1 tion 480(c)(3)(A)(ii), and the amounts ap2 propriated for this paragraph shall be no 

3 less than the total estimated annual depos4 its in the Land and Water Conservation 

5 Fund. 

6 (B) ALLOCATIONS.—Of the amounts de7 posited under this paragraph into the Land and 

8 Water Conservation Fund— 

(i) 1 9 ⁄6 shall be allocated to the Sec10 retary of the Interior and made available 

11 on a competitive basis to carry out natural 

12 resources adaptation activities through the 

13 acquisition of land and interests in land 

14 under section 6 of the Land and Water 

15 Conservation Fund Act of 1965 (16 U.S.C. 

16 460l–8)— 

17 (I) to States in accordance with 

18 their natural resources adaptation 

19 plans, and to Indian tribes; 

20 (II) notwithstanding section 5 of 

21 that Act (16 U.S.C. 460l–7); and 

22 (III) in addition to any funds 

23 provided pursuant to annual appro24 priations Acts, the Energy Policy Act 

25 of 2005 (42 U.S.C. 15801 et seq.), or 
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1 any other authorization for non2 adaptation needs; 

(ii) 1 3 ⁄3 shall be allocated to the Sec4 retary of the Interior to carry out natural 

5 resources adaptation activities through the 

6 acquisition of lands and interests in land 

7 under section 7 of the Land and Water 

8 Conservation Fund Act of 1965 (16 U.S.C. 

9 460l–9); 

(iii) 1 10 ⁄6 shall be allocated to the Sec11 retary of Agriculture and made available to 

12 the States and Indian tribes to carry out 

13 natural resources adaptation activities 

14 through the acquisition of land and inter15 ests in land under section 7 of the Forest 

16 Legacy Program under the Cooperative 

17 Forestry Assistance Act of 1978 (16 

18 U.S.C. 2103c); and 

(iv) 1 19 ⁄3 shall be allocated to the Sec20 retary of Agriculture to carry out natural 

21 resources adaptation activities through the 

22 acquisition of land and interests in land 

23 under section 7 of the Land and Water 

24 Conservation Fund Act of 1965 (16 U.S.C. 

25 460l–9). 
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1 (C) EXPENDITURE OF FUNDS.—In allo2 cating funds under subparagraph (B), the Sec3 retary of the Interior and the Secretary of Agri4 culture shall take into consideration factors in5 cluding— 

6 (i) the availability of non-Federal con7 tributions from State, local, or private 

8 sources; 

9 (ii) opportunities to protect fish and 

10 wildlife corridors or otherwise to link or 

11 consolidate fragmented habitats; 

12 (iii) opportunities to reduce the risk of 

13 catastrophic wildfires, drought, extreme 

14 flooding, or other climate-related events 

15 that are harmful to fish and wildlife and 

16 people; and 

17 (iv) the potential for conservation of 

18 species or habitat types at serious risk due 

19 to climate change, ocean acidification, and 

20 other stressors. 

21 (3) FOREST SERVICE.—Of the amounts made 

22 available for each fiscal year to carry out this sub23 part, 8.1 percent shall be allocated to the Secretary 

24 of Agriculture for use in funding natural resources 

25 adaptation activities carried out on national forests 
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1 and national grasslands under the jurisdiction of the 

2 Forest Service and for natural resource adaptation 

3 activities on State and private forest lands carried 

4 out under the Cooperative Forestry Assistance Act 

5 of 1978. 

6 (4) DEPARTMENT OF COMMERCE.—Of the 

7 amounts made available for each fiscal year to carry 

8 out this subpart, 11.5 percent shall be allocated to 

9 the Secretary of Commerce for use in funding nat10 ural resources adaptation activities to protect, main11 tain, and restore coastal, estuarine, and marine re12 sources, habitats, and ecosystems, including such ac13 tivities carried out under— 

14 (A) the coastal and estuarine land con15 servation program; 

16 (B) the community-based restoration pro17 gram; 

18 (C) the Coastal Zone Management Act of 

19 1972 (16 U.S.C. 1451 et seq.), that are specifi20 cally designed to strengthen the ability of coast21 al, estuarine, and marine resources, habitats, 

22 and ecosystems to adapt to and withstand the 

23 impacts of climate change and ocean acidifica24 tion; 

25 (D) the Open Rivers Initiative; 
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1 (E) the Magnuson-Stevens Fishery Con2 servation and Management Act (16 U.S.C. 

3 1801 et seq.); 

4 (F) the Marine Mammal Protection Act of 

5 1972 (16 U.S.C. 1361 et seq.); 

6 (G) the Endangered Species Act of 1973 

7 (16 U.S.C. 1531 et seq.); 

8 (H) the Marine Protection, Research, and 

9 Sanctuaries Act of 1972 (33 U.S.C. 1401 et 

10 seq.); 

11 (I) the Coral Reef Conservation Act of 

12 2000 (16 U.S.C. 6401 et seq.); and 

13 (J) the Estuary Restoration Act of 2000 

14 (33 U.S.C. 2901 et seq.). 

15 (5) ENVIRONMENTAL PROTECTION AGENCY.— 

16 Of the amounts made available each fiscal year to 

17 carry out this section, 12.2 percent shall be allocated 

18 to the Administrator for use in natural resources ad19 aptation activities restoring and protecting— 

20 (A) large-scale freshwater aquatic eco21 systems, such as the Everglades, the Great 

22 Lakes, Flathead Lake, the Missouri River, the 

23 Mississippi River, the Colorado River, the Sac24 ramento-San Joaquin Rivers, the Ohio River, 

25 the Columbia-Snake River System, the Apa-
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1 lachicola, Chattahoochee, and Flint River Sys2 tem, the Connecticut River, and the Yellowstone 

3 River; 

4 (B) large-scale estuarine ecosystems, such 

5 as Chesapeake Bay, Long Island Sound, Puget 

6 Sound, the Mississippi River Delta, the San 

7 Francisco Bay Delta, Narragansett Bay, and 

8 Albemarle-Pamlico Sound; and 

9 (C) freshwater and estuarine ecosystems, 

10 watersheds, and basins identified as priorities 

11 by the Administrator, working in cooperation 

12 with other Federal agencies, States, Indian 

13 tribes, local governments, scientists, and other 

14 conservation partners. 

15 (6) CORPS OF ENGINEERS.—Of the amounts 

16 made available each fiscal year to carry out this sec17 tion, 8.1 percent shall be available to the Secretary 

18 of the Army for use by the Corps of Engineers to 

19 carry out natural resources adaptation activities re20 storing— 

21 (A) large-scale freshwater aquatic eco22 systems, such as the ecosystems described in 

23 paragraph (5)(A); 
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1 (B) large-scale estuarine ecosystems, such 

2 as the ecosystems described in paragraph 

3 (5)(B); 

4 (C) freshwater and estuarine ecosystems, 

5 watersheds, and basins identified as priorities 

6 by the Corps of Engineers, working in coopera7 tion with other Federal agencies, States, Indian 

8 tribes, local governments, scientists, and other 

9 conservation partners; and 

10 (D) habitats and ecosystems through the 

11 implementation of estuary habitat restoration 

12 projects authorized by the Estuary Restoration 

13 Act of 2000 (33 U.S.C. 2901 et seq.), project 

14 modifications for improvement of the environ15 ment, aquatic restoration and protection 

16 projects authorized by section 206 of the Water 

17 Resources Development Act of 1996 (33 U.S.C. 

18 2330), and other appropriate programs and ac19 tivities. 

20 (d) USE OF FUNDS BY FEDERAL DEPARTMENTS AND

21 AGENCIES.—Funds allocated to Federal departments and 

22 agencies under this section shall only be used for natural 

23 resources adaptation activities that are consistent with an 

24 adaptation plan developed and approved by the President 

25 under section 478. 
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•HR 2454 EH

1 (e) STATE COST SHARING.—Notwithstanding any 

2 other provision of law, a State that receives a grant with 

3 amounts allocated under this section shall use funds from 

4 non-Federal sources to pay at least 10 percent of the costs 

5 of each activity carried out using amounts provided under 

6 the grant. 

7 SEC. 481. NATIONAL WILDLIFE HABITAT AND CORRIDORS 

8 INFORMATION PROGRAM. 

9 (a) ESTABLISHMENT.—Within 6 months of the date 

10 of enactment of this subpart, the Secretary of the Interior, 

11 in cooperation with the States and Indian tribes, shall es12 tablish a National Fish and Wildlife Habitat and Cor13 ridors Information Program in accordance with the re14 quirements of this section. 

15 (b) PURPOSE.—The purpose of this program is to— 

16 (1) support States and Indian tribes in the de17 velopment of a geographic information system data18 base of fish and wildlife habitat and corridors that 

19 would inform planning and development decisions 

20 within each State and Indian tribe, enable each 

21 State and Indian tribe to model climate impacts and 

22 adaptation, and provide geographically specific en23 hancements of State and tribal wildlife action plans; 

24 (2) ensure the collaborative development, with 

25 the States and Indian tribes, of a comprehensive, 
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1 national geographic information system database of 

2 maps, models, data, surveys, informational products, 

3 and other geospatial information regarding fish and 

4 wildlife habitat and corridors, that— 

5 (A) is based on consistent protocols for 

6 sampling and mapping across landscapes that 

7 take into account regional differences; and 

8 (B) that utilizes— 

9 (i) existing and planned State- and 

10 tribal-based geographic information system 

11 databases; and 

12 (ii) existing databases, analytical 

13 tools, metadata activities, and other infor14 mation products available through the Na15 tional Biological Information Infrastruc16 ture maintained by the Secretary and non17 governmental organizations; and 

18 (3) facilitate the use of such databases by Fed19 eral, State, local, and tribal decisionmakers to incor20 porate qualitative information on fish and wildlife 

21 habitat and corridors at the earliest possible stage 

22 to— 

23 (A) prioritize and target natural resources 

24 adaptation strategies and activities; 
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1 (B) avoid, minimize, and mitigate the im2 pacts on fish and wildlife habitat and corridors 

3 in siting energy development, water, trans4 mission, transportation, and other land use 

5 projects; 

6 (C) assess the impacts of existing develop7 ment on habitats and corridors; and 

8 (D) develop management strategies to en9 hance the ability of fish, wildlife, and plant spe10 cies to migrate or respond to shifting habitats 

11 within existing habitats and corridors. 

12 (c) HABITAT AND CORRIDORS INFORMATION SYS13 TEM.— 

14 (1) IN GENERAL.—The Secretary, in coopera15 tion with the States and Indian tribes, shall develop 

16 a Habitat and Corridors Information System. 

17 (2) CONTENTS.—The System shall— 

18 (A) include maps, data, and descriptions of 

19 fish and wildlife habitat and corridors, that— 

20 (i) have been developed by Federal 

21 agencies, State wildlife agencies and nat22 ural heritage programs, Indian tribes, local 

23 governments, nongovernmental organiza24 tions, and industry; 
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1 (ii) meet accepted Geospatial Inter2 operability Framework data and metadata 

3 protocols and standards; 

4 (B) include maps and descriptions of pro5 jected shifts in habitats and corridors of fish 

6 and wildlife species in response to climate 

7 change; 

8 (C) assure data quality and make the data, 

9 models, and analyses included in the System 

10 available at scales useful to decisionmakers— 

11 (i) to prioritize and target natural re12 sources adaptation strategies and activi13 ties; 

14 (ii) to assess the impacts of proposed 

15 energy development, water, transmission, 

16 transportation, and other land use projects 

17 and avoid, minimize, and mitigate those 

18 impacts on habitats and corridors; 

19 (iii) to assess the impacts of existing 

20 development on habitats and corridors; and 

21 (iv) to develop management strategies 

22 to enhance the ability of fish, wildlife, and 

23 plant species to migrate or respond to 

24 shifting habitats within existing habitats 

25 and corridors; 
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1 (D) establish a process for updating maps 

2 and other information as landscapes, habitats, 

3 corridors, and wildlife populations change or as 

4 other information becomes available; 

5 (E) encourage the development of collabo6 rative plans by Federal and State agencies and 

7 Indian tribes to monitor and evaluate the effi8 cacy of the System to meet the needs of deci9 sionmakers; 

10 (F) identify gaps in habitat and corridor 

11 information, mapping, and research that should 

12 be addressed to fully understand and assess 

13 current data and metadata, and to prioritize re14 search and future data collection activities for 

15 use in updating the System and provide support 

16 for those activities; 

17 (G) include mechanisms to support collabo18 rative research, mapping, and planning of habi19 tats and corridors by Federal and State agen20 cies, Indian tribes, and other interested stake21 holders; 

22 (H) incorporate biological and geospatial 

23 data on species and corridors found in energy 

24 development and transmission plans, including 
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1 renewable energy initiatives, transportation, and 

2 other land use plans; 

3 (I) be based on the best scientific informa4 tion available; and 

5 (J) identify, prioritize, and describe key 

6 parcels of non-Federal land located within the 

7 boundaries of units of the National Park Sys8 tem, National Wildlife Refuge System, National 

9 Forest System, or National Grassland System 

10 that are critical to maintenance of wildlife habi11 tat and migration corridors. 

12 (d) FINANCIAL AND OTHER SUPPORT.—The Sec13 retary may provide support to the States and Indian 

14 tribes, including financial and technical assistance, for ac15 tivities that support the development and implementation 

16 of the System. 

17 (e) COORDINATION.—The Secretary, in cooperation 

18 with the States and Indian tribes, shall make rec19 ommendations on how the information developed in the 

20 System may be incorporated into existing relevant State 

21 and Federal plans affecting fish and wildlife, including 

22 land management plans, the State Comprehensive Wildlife 

23 Conservation Strategies, and appropriate tribal conserva24 tion plans, to ensure that they— 
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1 (1) prevent unnecessary habitat fragmentation 

2 and disruption of corridors; 

3 (2) promote the landscape connectivity nec4 essary to allow wildlife to move as necessary to meet 

5 biological needs, adjust to shifts in habitat, and 

6 adapt to climate change; and 

7 (3) minimize the impacts of energy, develop8 ment, water, transportation, and transmission 

9 projects and other activities expected to impact habi10 tat and corridors. 

11 (f) DEFINITIONS.—In this section: 

12 (1) GEOSPATIAL INTEROPERABILITY FRAME13 WORK.—The term ‘‘Geospatial Interoperability 

14 Framework’’ means the strategy utilized by the Na15 tional Biological Information Infrastructure that is 

16 based upon accepted standards, specifications, and 

17 protocols adopted through the International Stand18 ards Organization, the Open Geospatial Consortium, 

19 and the Federal Geographic Data Committee, to 

20 manage, archive, integrate, analyze, and make acces21 sible geospatial and biological data and metadata. 

22 (2) SECRETARY.—The term ‘‘Secretary’’ means 

23 the Secretary of the Interior. 
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1 SEC. 482. ADDITIONAL PROVISIONS REGARDING INDIAN 

2 TRIBES. 

3 (a) FEDERAL TRUST RESPONSIBILITY.—Nothing in 

4 this subpart is intended to amend, alter, or give priority 

5 over the Federal trust responsibility to Indian tribes. 

6 (b) EXEMPTION FROM FOIA.—Information received 

7 by a Federal agency pursuant to this Act relating to the 

8 location, character, or ownership of human remains of a 

9 person of Indian ancestry; or resources, cultural items, 

10 uses, or activities identified by an Indian tribe as tradi11 tional or cultural because of the long-established signifi12 cance or ceremonial nature to the Indian tribe; shall not 

13 be subject to disclosure under section 552 of title 5, 

14 United States Code, if the head of the agency, in consulta15 tion with the Secretary of the Interior and an affected In16 dian tribe, determines that disclosure may— 

17 (1) cause a significant invasion of privacy; 

18 (2) risk harm to the human remains or re19 sources, cultural items, uses, or activities; or 

20 (3) impede the use of a traditional religious site 

21 by practitioners. 

22 (c) APPLICATION OF OTHER LAW.—The Secretary of 

23 the Interior may apply the provisions of Public Law 93– 

24 638 where appropriate in the implementation of this sub25 part. 
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1 PART 2—INTERNATIONAL CLIMATE CHANGE 

2 ADAPTATION PROGRAM 

3 SEC. 491. FINDINGS AND PURPOSES. 

4 (a) FINDINGS.—Congress finds the following: 

5 (1) Global climate change is a potentially sig6 nificant national and global security threat multi7 plier and is likely to exacerbate competition and con8 flict over agricultural, vegetative, marine, and water 

9 resources and to result in increased displacement of 

10 people, poverty, and hunger within developing coun11 tries. 

12 (2) The strategic, social, political, economic, 

13 cultural, and environmental consequences of global 

14 climate change are likely to have disproportionate 

15 adverse impacts on developing countries, which have 

16 less economic capacity to respond to such impacts. 

17 (3) The countries most vulnerable to climate 

18 change, due both to greater exposure to harmful im19 pacts and to lower capacity to adapt, are developing 

20 countries with very low industrial greenhouse gas 

21 emissions that have contributed less to climate 

22 change than more affluent countries. 

23 (4) To a much greater degree than developed 

24 countries, developing countries rely on the natural 

25 and environmental systems likely to be affected by 
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1 climate change for sustenance, livelihoods, and eco2 nomic growth and stability. 

3 (5) Within developing countries there may be 

4 varying climate change adaptation and resilience 

5 needs among different communities and populations, 

6 including impoverished communities, children, 

7 women, and indigenous peoples. 

8 (6) The consequences of global climate change, 

9 including increases in poverty and destabilization of 

10 economies and societies, are likely to pose long-term 

11 challenges to the national security, foreign policy, 

12 and economic interests of the United States. 

13 (7) It is in the national security, foreign policy, 

14 and economic interests of the United States to rec15 ognize, plan for, and mitigate the international stra16 tegic, social, political, cultural, environmental, 

17 health, and economic effects of climate change and 

18 to assist developing countries to increase their resil19 ience to those effects. 

20 (8) Under Article 4 of the United Nations 

21 Framework Convention on Climate Change, devel22 oped country parties, including the United States, 

23 committed to ‘‘assist the developing country parties 

24 that are particularly vulnerable to the adverse effects 
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1 of climate change in meeting costs of adaptation to 

2 those adverse effects’’. 

3 (9) Under the Bali Action Plan, developed 

4 country parties to the United Nations Framework 

5 Convention on Climate Change, including the United 

6 States, committed to ‘‘enhanced action on the provi7 sion of financial resources and investment to support 

8 action on mitigation and adaptation and technology 

9 cooperation,’’ including, inter alia, consideration of 

10 ‘‘improved access to adequate, predictable, and sus11 tainable financial resources and financial and tech12 nical support, and the provision of new and addi13 tional resources, including official and concessional 

14 funding for developing country parties’’. 

15 (b) PURPOSES.—The purposes of this part are— 

16 (1) to provide new and additional assistance 

17 from the United States to the most vulnerable devel18 oping countries, including the most vulnerable com19 munities and populations therein, in order to sup20 port the development and implementation of climate 

21 change adaptation programs and activities that re22 duce the vulnerability and increase the resilience of 

23 communities to climate change impacts, including 

24 impacts on water availability, agricultural produc25 tivity, flood risk, coastal resources, timing of sea-
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1 sons, biodiversity, economic livelihoods, health and 

2 diseases, and human migration; and 

3 (2) to provide such assistance in a manner that 

4 protects and promotes the national security, foreign 

5 policy, environmental, and economic interests of the 

6 United States to the extent such interests may be 

7 advanced by minimizing, averting, or increasing re8 silience to climate change impacts. 

9 SEC. 492. DEFINITIONS. 

10 In this part: 

11 (1) ALLOWANCE.—The term ‘‘allowance’’ 

12 means an emission allowance established under sec13 tion 721 of the Clean Air Act. 

14 (2) APPROPRIATE CONGRESSIONAL COMMIT15 TEES.—The term ‘‘appropriate congressional com16 mittees’’ means— 

17 (A) the Committees on Energy and Com18 merce, Financial Services, and Foreign Affairs 

19 of the House of Representatives; and 

20 (B) the Committees on Environment and 

21 Public Works and Foreign Relations of the Sen22 ate. 

23 (3) DEVELOPING COUNTRY.—The term ‘‘devel24 oping country’’ means a country eligible to receive 

25 official development assistance according to the in-
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1 come guidelines of the Development Assistance Com2 mittee of the Organization for Economic Coopera3 tion and Development. 

4 (4) MOST VULNERABLE DEVELOPING COUN5 TRIES.—The term ‘‘most vulnerable developing 

6 countries’’ means, as determined by the Adminis7 trator of USAID, developing countries that are at 

8 risk of substantial adverse impacts of climate change 

9 and have limited capacity to respond to such im10 pacts, considering the approaches included in any 

11 international treaties and agreements. 

12 (5) MOST VULNERABLE COMMUNITIES AND

13 POPULATIONS.—The term ‘‘most vulnerable commu14 nities and populations’’ means communities and pop15 ulations that are at risk of substantial adverse im16 pacts of climate change and have limited capacity to 

17 respond to such impacts, including impoverished 

18 communities, children, women, and indigenous peo19 ples. 

20 (6) PROGRAM.—The term ‘‘Program’’ means 

21 the International Climate Change Adaptation Pro22 gram established under section 493. 

23 (7) USAID.—The term ‘‘USAID’’ means the 

24 United States Agency for International Develop25 ment. 
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1 (8) UNITED NATIONS FRAMEWORK CONVEN2 TION ON CLIMATE CHANGE.—The term ‘‘United Na3 tions Framework Convention on Climate Change’’ or 

4 ‘‘Convention’’ means the United Nations Framework 

5 Convention on Climate Change done at New York on 

6 May 9, 1992, and entered into force on March 21, 

7 1994. 

8 SEC. 493. INTERNATIONAL CLIMATE CHANGE ADAPTATION 

9 PROGRAM. 

10 (a) ESTABLISHMENT.—The Secretary of State, in 

11 consultation with the Administrator of USAID, the Sec12 retary of the Treasury, and the Administrator of the Envi13 ronmental Protection Agency, shall establish an Inter14 national Climate Change Adaptation Program in accord15 ance with the requirements of this part. 

16 (b) ALLOWANCE ACCOUNT.—Allowances allocated 

17 pursuant to section 782(n) of the Clean Air Act shall be 

18 available for distribution to carry out the Program estab19 lished under subsection (a). 

20 (c) SUPPLEMENT NOT SUPPLANT.—Assistance pro21 vided under this part shall be used to supplement, and 

22 not to supplant, any other Federal, State, or local re23 sources available to carry out activities of the type carried 

24 out under the Program. 
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1 SEC. 494. DISTRIBUTION OF ALLOWANCES. 

2 (a) IN GENERAL.—The Secretary of State, or such 

3 other Federal agency head as the President may des4 ignate, after consultation with the Secretary of the Treas5 ury, the Administrator of USAID, and the Administrator 

6 of the Environmental Protection Agency, shall direct the 

7 distribution of allowances to carry out the Program— 

8 (1) in the form of bilateral assistance pursuant 

9 to the requirements under section 495; 

10 (2) to multilateral funds or international insti11 tutions pursuant to the Convention or an agreement 

12 negotiated under the Convention; or 

13 (3) through a combination of the mechanisms 

14 identified under paragraphs (1) and (2). 

15 (b) LIMITATION.— 

16 (1) CONDITIONAL DISTRIBUTION TO MULTILAT17 ERAL FUNDS OR INTERNATIONAL INSTITUTIONS.— 

18 In any fiscal year, the Secretary of State, or such 

19 other Federal agency head as the President may 

20 designate, in consultation with the Administrator of 

21 USAID, the Secretary of the Treasury, and the Ad22 ministrator of the Environmental Protection Agency, 

23 shall distribute at least 40 percent and up to 60 per24 cent of the allowances available to carry out the Pro25 gram to one or more multilateral funds or inter26 national institutions that meet the requirements of 
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1 paragraph (2), if any such fund or institution exists, 

2 and shall annually certify in a report to the appro3 priate congressional committees that any multilat4 eral fund or international institution receiving allow5 ances under this section meets the requirements of 

6 paragraph (2) or that no multilateral fund or inter7 national institution that meets the requirements of 

8 paragraph (2) exists, as the case may be. The Sec9 retary of State shall notify the appropriate congres10 sional committees not less than 15 days prior to any 

11 transfer of allowances to a multilateral fund or 

12 international institution pursuant to this section. 

13 (2) MULTILATERAL FUND OR INTERNATIONAL

14 INSTITUTION ELIGIBILITY.—A multilateral fund or 

15 international institution is eligible to receive allow16 ances available to carry out the Program— 

17 (A) if— 

18 (i) such fund or institution is estab19 lished pursuant to— 

20 (I) the Convention; or 

21 (II) an agreement negotiated 

22 under the Convention; or 

23 (ii) the allowances are directed to one 

24 or more multilateral development banks or 

25 international development institutions, pur-
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1 suant to an agreement negotiated under 

2 such Convention; and 

3 (B) if such fund or institution— 

4 (i) specifies the terms and conditions 

5 under which the United States is to pro6 vide allowances to the fund or institution, 

7 and under which the fund or institution is 

8 to provide assistance to recipient countries; 

9 (ii) ensures that assistance from the 

10 United States to the fund or institution 

11 and the principal and income of the fund 

12 or institution are disbursed only for pur13 poses that are consistent with those de14 scribed in section 491(b)(1); 

15 (iii) requires a regular meeting of a 

16 governing body of the fund or institution 

17 that includes representation from countries 

18 among the most vulnerable developing 

19 countries and provides public access; 

20 (iv) requires that local communities 

21 and indigenous peoples in areas where any 

22 activities or programs are planned are en23 gaged through adequate disclosure of in24 formation, public participation, and con25 sultation; and 
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1 (v) prepares and makes public an an2 nual report that— 

3 (I) describes the process and 

4 methodology for selecting the recipi5 ents of assistance from the fund or in6 stitution, including assessments of 

7 vulnerability; 

8 (II) describes specific programs 

9 and activities supported by the fund 

10 or institution and the extent to which 

11 the assistance is addressing the adap12 tation needs of the most vulnerable 

13 developing countries, and the most 

14 vulnerable communities and popu15 lations therein; 

16 (III) describes the performance 

17 goals for assistance authorized under 

18 the fund or institution and expresses 

19 such goals in an objective and quan20 tifiable form, to the extent practicable; 

21 (IV) describes the performance 

22 indicators to be used in measuring or 

23 assessing the achievement of the per24 formance goals described in subclause 

25 (III); 
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1 (V) provides a basis for rec2 ommendations for adjustments to as3 sistance authorized under this part to 

4 enhance the impact of such assist5 ance; and 

6 (VI) describes the participation 

7 of other nations and international or8 ganizations in supporting and gov9 erning the fund or institution. 

10 (c) OVERSIGHT.— 

11 (1) DISTRIBUTION TO MULTILATERAL FUNDS

12 OR INTERNATIONAL INSTITUTIONS.—The Secretary 

13 of State, or such other Federal agency head as the 

14 President may designate, in consultation with the 

15 Administrator of USAID, shall oversee the distribu16 tion of allowances available to carry out the Pro17 gram to a multilateral fund or international institu18 tion under subsection (b). 

19 (2) BILATERAL ASSISTANCE.—The Adminis20 trator of USAID, in consultation with the Secretary 

21 of State, shall oversee the distribution of allowances 

22 available to carry out the Program for bilateral as23 sistance under section 495. 

24 SEC. 495. BILATERAL ASSISTANCE. 

25 (a) ACTIVITIES AND FOREIGN AID.— 
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1 (1) IN GENERAL.—In order to achieve the pur2 poses of this part, the Administrator of USAID may 

3 carry out programs and activities and distribute al4 lowances to any private or public group (including 

5 international organizations and faith-based organiza6 tions), association, or other entity engaged in peace7 ful activities to— 

8 (A) provide assistance to the most vulner9 able developing countries for— 

10 (i) the development of national or re11 gional climate change adaptation plans, in12 cluding a systematic assessment of socio13 economic vulnerabilities in order to identify 

14 the most vulnerable communities and pop15 ulations; 

16 (ii) associated national policies; and 

17 (iii) planning, financing, and execu18 tion of adaptation programs and activities; 

19 (B) support investments, capacity-building 

20 activities, and other assistance, to reduce vul21 nerability and promote community-level resil22 ience related to climate change and its impacts 

23 in the most vulnerable developing countries, in24 cluding impacts on water availability, agricul25 tural productivity, flood risk, coastal resources, 
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1 timing of seasons, biodiversity, economic liveli2 hoods, health, human migration, or other social, 

3 economic, political, cultural, or environmental 

4 matters; 

5 (C) support climate change adaptation re6 search in or for the most vulnerable developing 

7 countries; 

8 (D) reduce vulnerability and provide in9 creased resilience to climate change for local 

10 communities and livelihoods in the most vulner11 able developing countries by encouraging— 

12 (i) the protection and rehabilitation of 

13 natural systems; 

14 (ii) the enhancement and diversifica15 tion of agricultural, fishery, and other live16 lihoods; and 

17 (iii) the reduction of disaster risks; 

18 (E) support the deployment of technologies 

19 to help the most vulnerable developing countries 

20 respond to the destabilizing impacts of climate 

21 change and encourage the identification and 

22 adoption of appropriate renewable and efficient 

23 energy technologies that are beneficial in in24 creasing community-level resilience to the im-
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1 pacts of global climate change in those coun2 tries; and 

3 (F) encourage the engagement of local 

4 communities through disclosure of information, 

5 consultation, and the communities’ informed 

6 participation relating to the development of 

7 plans, programs, and activities to increase com8 munity-level resilience to climate change im9 pacts. 

10 (2) LIMITATIONS.—Not more than 10 percent 

11 of the allowances made available to carry out bilat12 eral assistance under this part in any year shall be 

13 distributed to support activities in any single coun14 try. 

15 (3) PRIORITIZING ASSISTANCE.—In providing 

16 assistance under this section, the Administrator of 

17 USAID shall give priority to countries, including the 

18 most vulnerable communities and populations there19 in, that are most vulnerable to the adverse impacts 

20 of climate change, determined by the likelihood and 

21 severity of such impacts and the country’s capacity 

22 to adapt to such impacts. 

23 (b) COMMUNITY ENGAGEMENT.— 

24 (1) IN GENERAL.—The Administrator of 

25 USAID shall ensure that local communities, includ-
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1 ing the most vulnerable communities and popu2 lations therein, in areas where any programs or ac3 tivities are carried out pursuant to this section are 

4 engaged in, through disclosure of information, public 

5 participation, and consultation, the design, imple6 mentation, monitoring, and evaluation of such pro7 grams and activities. 

8 (2) CONSULTATION AND DISCLOSURE.—For 

9 each country receiving assistance under this section, 

10 the Administrator of USAID shall establish a proc11 ess for consultation with, and disclosure of informa12 tion to, local, national, and international stake13 holders regarding any programs and activities car14 ried out pursuant to this section. 

15 (c) COORDINATION.— 

16 (1) ALIGNMENT OF ACTIVITIES.—Subject to the 

17 direction of the President and the Secretary of 

18 State, the Administrator of USAID shall, to the ex19 tent practicable, seek to align activities under this 

20 section with broader development, poverty allevi21 ation, or natural resource management objectives 

22 and initiatives in the recipient country. 

23 (2) COORDINATION OF ACTIVITIES.—The Ad24 ministrator of USAID shall ensure that there is co25 ordination among the activities under this section, 
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1 subtitle D of this title, and part E of title VII of the 

2 Clean Air Act, in order to maximize the effectiveness 

3 of United States assistance to developing countries. 

4 (d) REPORTING.— 

5 (1) INITIAL REPORT.—Not later than 180 days 

6 after the date of enactment of this part, the Admin7 istrator of USAID, in consultation with the Sec8 retary of State, shall submit to the President and 

9 the appropriate congressional committees an initial 

10 report that— 

11 (A) based on the most recent information 

12 available from reliable public sources or knowl13 edge obtained by USAID on a reliable basis, as 

14 determined by the Administrator of USAID, 

15 identifies the developing countries, including the 

16 most vulnerable communities and populations 

17 therein, that are most vulnerable to climate 

18 change impacts and in which assistance may 

19 have the greatest and most sustainable benefit 

20 in reducing vulnerability to climate change; and 

21 (B) describes the process and methodology 

22 for selecting the recipients of assistance under 

23 subsection (a)(1). 

24 (2) ANNUAL REPORTS.—Not later than 18 

25 months after the date on which the initial report is 
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1 submitted pursuant to paragraph (1), and annually 

2 thereafter, the Administrator of USAID, in consulta3 tion with the Secretary of State, shall submit to the 

4 President and the appropriate congressional commit5 tees a report that— 

6 (A) describes the extent to which global cli7 mate change, through its potential negative im8 pacts on sensitive populations and natural re9 sources in the most vulnerable developing coun10 tries, may threaten, cause, or exacerbate polit11 ical, economic, environmental, cultural, or social 

12 instability or international conflict in those re13 gions; 

14 (B) describes the ramifications of any po15 tentially destabilizing impacts climate change 

16 may have on the national security, foreign pol17 icy, and economic interests of the United 

18 States, including— 

19 (i) the creation of environmental mi20 grants and internally displaced peoples; 

21 (ii) international or internal armed 

22 conflicts over water, food, land, or other 

23 resources; 

24 (iii) loss of agricultural and other live25 lihoods, cultural stability, and other causes 
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1 of increased poverty and economic desta2 bilization; 

3 (iv) decline in availability of resources 

4 needed for survival, including water; 

5 (v) increased impact of natural disas6 ters (including droughts, flooding, and 

7 other severe weather events); 

8 (vi) increased prevalence or virulence 

9 of climate-related diseases; and 

10 (vii) intensified urban migration; 

11 (C) describes how allowances available 

12 under this section were distributed during the 

13 previous fiscal year to enhance the national se14 curity, foreign policy, and economic interests of 

15 the United States and assist in avoiding the 

16 economically, politically, environmentally, cul17 turally, and socially destabilizing impacts of cli18 mate change in most vulnerable developing 

19 countries; 

20 (D) identifies and recommends the devel21 oping countries, including the most vulnerable 

22 communities and populations therein, that are 

23 most vulnerable to climate change impacts and 

24 in which assistance may have the greatest and 

25 most sustainable benefit in reducing vulner-
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1 ability to climate change, including in the form 

2 of deploying technologies, investments, capacity3 building activities, and other types of assistance 

4 for adaptation to climate change impacts and 

5 approaches to reduce greenhouse gases in ways 

6 that may also provide community-level resilience 

7 to climate change impacts; and 

8 (E) describes cooperation undertaken with 

9 other nations and international organizations to 

10 carry out this part. 

11 (e) MONITORING AND EVALUATION.— 

12 (1) IN GENERAL.—The Administrator of 

13 USAID shall establish and implement a system to 

14 monitor and evaluate the effectiveness and efficiency 

15 of assistance provided under this section in order to 

16 maximize the long-term sustainable development im17 pact of such assistance, including the extent to 

18 which such assistance is meeting the purposes of 

19 this part and addressing the adaptation needs of de20 veloping countries. 

21 (2) REQUIREMENTS.—In carrying out para22 graph (1), the Administrator of USAID shall— 

23 (A) in consultation with national govern24 ments in recipient countries, establish perform25 ance goals for assistance authorized under this 
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1 section and express such goals in an objective 

2 and quantifiable form, to the extent practicable; 

3 (B) establish performance indicators to be 

4 used in measuring or assessing the achievement 

5 of the performance goals described in subpara6 graph (A), including an evaluation of— 

7 (i) the extent to which assistance 

8 under this section provided for disclosure 

9 of information to, consultation with, and 

10 informed participation by local commu11 nities; 

12 (ii) the extent to which local commu13 nities participated in the design, implemen14 tation, and evaluation of programs and ac15 tivities implemented pursuant to this sec16 tion; and 

17 (iii) the impacts of such participation 

18 on the goals and objectives of the pro19 grams and activities implemented under 

20 this section; 

21 (C) provide a basis for recommendations 

22 for adjustments to assistance authorized under 

23 this section to enhance the impact of such as24 sistance; and 
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1 (D) include, in the annual report to the 

2 appropriate congressional committees and other 

3 relevant agencies required under subsection 

4 (d)(2), findings resulting from the monitoring 

5 and evaluation of programs and activities under 

6 this section. 

7 Subtitle F—Deficit Neutral 

8 Budgetary Treatment 

9 SEC. 496. DEFICIT NEUTRALITY. 

10 (a) FUNDS ESTABLISHED.—Funds established under 

11 sections 422, 467, and 480 of this Act are to be treated 

12 as separate accounts in the Treasury and shall be known 

13 as ‘‘the Funds’’. 

14 (b) AVAILABILITY.—Funds appropriated or made 

15 available pursuant to sections 422(b), 467(b), and 

16 480(b)(2) are only available for the purposes set forth 

17 under this Act. Receipts in the Funds and appropriations 

18 therefrom shall not be available and are precluded from 

19 obligation for any other purpose. 

20 (c) ESTIMATION OF BUDGETARY IMPACT.—For the 

21 purposes of estimating the revenue and spending effects 

22 of this Act; 

23 (1) the revenue assumed to be deposited into 

24 the Funds established under sections 422, 467, and 

25 480, shall be attributed to this Act; and 
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1 (2) the authorization or availability of appro2 priations from the Funds shall be treated as new di3 rect spending and attributed to this Act. 

4 (d) BUDGETARY TREATMENT.—For the purposes of 

5 section 257 of the Balanced Budget and Emergency Def6 icit Control Act of 1985, the Funds, and amounts subse7 quently appropriated or made available for the purposes 

8 for which such Funds were established, shall be deemed 

9 to be included on the list of appropriations referenced 

10 under section 250(c)(17) of that Act. Such appropriations 

11 from each Fund shall not be in excess of the amounts de12 posited into the respective Fund in the previous year. 

13 TITLE V—AGRICULTURAL AND 

14 FORESTRY RELATED OFFSETS 

15 Subtitle A—Offset Credit Program 

16 From Domestic Agricultural and 

17 Forestry Sources 

18 SEC. 501. DEFINITIONS. 

19 (a) IN GENERAL.—In this title: 

20 (1) ADDITIONAL.—The term ‘‘additional’’, 

21 when used with respect to reductions or avoidance of 

22 greenhouse gas emissions, or to sequestration of 

23 greenhouse gases, means reductions, avoidance, or 

24 sequestration that result in a lower level of net 

25 greenhouse gas emissions or atmospheric concentra-
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1 tions than would occur in the absence of an offset 

2 project. 

3 (2) ADDITIONALITY.—The term ‘‘additionality’’ 

4 means the extent to which reductions or avoidance 

5 of greenhouse gas emissions, or sequestration of 

6 greenhouse gases, are additional. 

7 (3) ADMINISTRATOR.—The term ‘‘Adminis8 trator’’ means the Administrator of the Environ9 mental Protection Agency. 

10 (4) ADVISORY COMMITTEE.—The term ‘‘Advi11 sory Committee’’ means the USDA Greenhouse Gas 

12 Emission Reduction and Sequestration Advisory 

13 Committee established under section 1245(f) of the 

14 Food Security Act of 1985 (16 U.S.C. 3845). 

15 (5) GREENHOUSE GAS.—The term ‘‘greenhouse 

16 gas’’ means any of the following: 

17 (A) Carbon dioxide. 

18 (B) Methane. 

19 (C) Nitrous oxide. 

20 (D) Sulfur hexafluoride. 

21 (E) Hydrofluorocarbons from a chemical 

22 manufacturing process at an industrial sta23 tionary source. 

24 (F) Any perfluorocarbon. 

25 (G) Nitrogen trifluoride. 
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1 (H) Any other anthropogenic gas des2 ignated as a greenhouse gas by the Adminis3 trator. 

4 (6) LEAKAGE.—The term ‘‘leakage’’ means a 

5 significant and quantifiable increase in greenhouse 

6 gas emissions, or a significant and quantifiable de7 crease in sequestration, which is caused by an offset 

8 practice and occurs outside the boundaries of the 

9 offset practice. 

10 (7) OFFSET CREDIT.—The term ‘‘offset credit’’ 

11 means a tradeable compliance instrument that— 

12 (A) represents the reduction, avoidance, or 

13 sequestration of 1 ton of carbon dioxide equiva14 lent; and 

15 (B) is issued pursuant to this title. 

16 (8) OFFSET PRACTICE.—The term ‘‘offset prac17 tice’’ means an activity that reduces, avoids, or se18 questers greenhouse gas emissions, and for which 

19 offset credits may be issued pursuant to this title. 

20 (9) OFFSET PRODUCER.—The term ‘‘offset pro21 ducer’’ means an owner, operator, landlord, tenant, 

22 or sharecropper who has or shares responsibility for 

23 ensuring that an offset practice is established and 

24 maintained during the crediting period for purposes 

25 of an offset credit. 
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1 (10) OFFSET PROJECT.—The term ‘‘offset 

2 project’’ means a practice or set of practices that re3 duce or avoid greenhouse gas emissions, or sequester 

4 greenhouse gases as implemented by an offset pro5 ducer. 

6 (11) OFFSET PROJECT DEVELOPER.—The term 

7 ‘‘offset project developer’’ means the offset producer 

8 or designee of the offset producer. 

9 (12) PRACTICE TYPE.—The term ‘‘practice 

10 type’’ means a discrete category of offset practices 

11 for which the Secretary develops a standardized 

12 methodology to accurately estimate the amount of 

13 greenhouse gas emissions reduced or avoided or 

14 greenhouse gases sequestered. 

15 (13) REVERSAL.—The term ‘‘reversal’’ means 

16 an intentional or unintentional loss of sequestered 

17 greenhouse gases to the atmosphere. 

18 (14) SECRETARY.—The term ‘‘Secretary’’ 

19 means the Secretary of Agriculture. 

20 (15) SEQUESTRATION AND SEQUESTERED.— 

21 The terms ‘‘sequestered’’ and ‘‘sequestration’’ mean 

22 the separation, isolation, or removal of greenhouse 

23 gases from the atmosphere, as determined by the 

24 Secretary. The terms include biological sequestra-
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1 tion, but do not include ocean fertilization tech2 niques. 

3 (16) TERM OFFSET CREDIT.—The term ‘‘term 

4 offset credit’’ means a compliance instrument au5 thorized under section 504(d). 

6 (b) AGRICULTURAL AND FORESTRY EXCEPTION TO

7 DEFINITION OF CAPPED SECTOR.—For purposes of this 

8 title and title III of this Act, and amendments made by 

9 such titles, the term ‘‘capped sector’’ means a sector of 

10 economic activity that directly emits capped emissions, in11 cluding the industrial sector, the electricity generation sec12 tor, the transportation sector, and the residential and 

13 commercial sectors (to the extent they burn oil or natural 

14 gas), but not including the agricultural or forestry sectors. 

15 SEC. 502. ESTABLISHMENT OF OFFSET CREDIT PROGRAM 

16 FROM DOMESTIC AGRICULTURAL AND FOR17 ESTRY SOURCES. 

18 (a) ESTABLISHMENT.—Not later than 1 year after 

19 the date of enactment of this title, the Secretary shall es20 tablish a program governing the generation of offset cred21 its from domestic agricultural and forestry sources. 

22 (b) REQUIREMENTS.—The program described in sub23 section (a) shall— 

24 (1) ensure that offset credits represent 

25 verifiable and additional greenhouse gas emission re-
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1 ductions or avoidance, or increases in sequestration; 

2 and 

3 (2) ensure that offset credits issued for seques4 tration offset projects are only issued for greenhouse 

5 gas reductions that result in a permanent net reduc6 tion in atmospheric greenhouse gases. 

7 (c) DUTIES OF SECRETARY.—In addition to the du8 ties described in subsection (a) and section 1245 of the 

9 Food Security Act of 1985 (16 U.S.C. 3845), the Sec10 retary shall, with respect to practices relating to offset 

11 credits from agricultural and forestry sources— 

12 (1) establish by rule methodologies by practice 

13 types for quantifying greenhouse gas benefits; 

14 (2) establish by rule methodologies for each 

15 practice type for establishing activity baselines and 

16 determining additionality; 

17 (3) establish by rule methodologies by practice 

18 types for accounting for and mitigating potential 

19 leakage; 

20 (4) establish rules to account for and address 

21 reversals; 

22 (5) establish rules to require third-party 

23 verification; 
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1 (6) provide technical assistance to offset project 

2 developers using funds appropriated to the Con3 servation Operations account; 

4 (7) establish rules for approval of offset project 

5 plans; 

6 (8) establish rules for certification of implemen7 tation of offset project plans; 

8 (9) establish by rule requirements for reporting 

9 and record keeping; and 

10 (10) conduct audits. 

11 SEC. 503. LIST OF ELIGIBLE DOMESTIC AGRICULTURAL 

12 AND FORESTRY OFFSET PRACTICE TYPES. 

13 (a) LIST REQUIRED.— 

14 (1) PREPARATION AND PUBLICATION.—Not 

15 later than 1 year after the date of enactment of this 

16 title, the Secretary shall prepare and publish in the 

17 Federal Register a list of domestic agricultural and 

18 forestry practice types that are eligible to generate 

19 offset credits under this title because the practices 

20 avoid or reduce greenhouse gas emissions or seques21 ter greenhouse gases. 

22 (2) RECOMMENDATIONS.—In preparing the list 

23 under paragraph (1), the Secretary shall take into 

24 consideration the recommendations of the Advisory 

25 Committee. 
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1 (b) INITIAL LIST.—At a minimum, the list prepared 

2 under this section shall include those practices that avoid 

3 or reduce greenhouse gas emissions or sequester green4 house gases, such as— 

5 (1) agricultural, grassland, and rangeland se6 questration and management practices, including— 

7 (A) altered tillage practices; 

8 (B) winter cover cropping, continuous 

9 cropping, and other means to increase biomass 

10 returned to soil in lieu of planting followed by 

11 fallowing; 

12 (C) reduction of nitrogen fertilizer use or 

13 increase in nitrogen use efficiency; 

14 (D) reduction in the frequency and dura15 tion of flooding of rice paddies; 

16 (E) reduction in carbon emissions from or17 ganic soils; 

18 (F) reduction in greenhouse gas emissions 

19 from manure and effluent; and 

20 (G) reduction in greenhouse gas emissions 

21 due to changes in animal management prac22 tices, including dietary modifications; 

23 (2) changes in carbon stocks attributed to land 

24 use change and forestry activities, including— 
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1 (A) afforestation or reforestation of acre2 age that is not forested; 

3 (B) forest management resulting in an in4 crease in forest carbon stores including but not 

5 limited to harvested wood products; 

6 (C) management of peatland or wetland; 

7 (D) conservation of grassland and forested 

8 land; 

9 (E) improved forest management, includ10 ing accounting for carbon stored in wood prod11 ucts; 

12 (F) reduced deforestation or avoided forest 

13 conversion; 

14 (G) urban tree-planting and maintenance; 

15 (H) agroforestry; and 

16 (I) adaptation of plant traits or new tech17 nologies that increase sequestration by forests; 

18 and 

19 (3) manure management and disposal, includ20 ing— 

21 (A) waste aeration; 

22 (B) biogas capture and combustion; and 

23 (C) application to fields as a substitute for 

24 commercial fertilizer. 

25 (c) ADDITIONS AND REVISIONS TO LIST.— 
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1 (1) PERIODIC REVISION.—Not later than 2 

2 years after the date of enactment of this title, and 

3 every 2 years thereafter, the Secretary, after public 

4 notice and opportunity for comment, shall add to 

5 and revise the types of offset practices to the list es6 tablished under subsection (a) if those types of prac7 tices meet the standards for environmental integrity 

8 that are consistent with the purposes of this title. 

9 (2) CONSIDERATION OF PETITIONS.—The Sec10 retary shall— 

11 (A) consider petitions to add types of off12 set practices to the list established under sub13 section (a); and 

14 (B) add those types of offset practices to 

15 the list if the types of offset practices meet 

16 standards for environmental integrity consistent 

17 with the purposes of this title. 

18 (3) TIME FOR CONSIDERATION OF PETI19 TIONS.—Not later than 1 year after the receipt of 

20 a petition under paragraph (2), the Secretary shall 

21 make a decision to either grant or deny the petition 

22 and publish a written explanation of the reasons for 

23 the Secretary’s decision. The Secretary may not 

24 deny a petition under this subsection on the basis of 
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1 inadequate Department of Agriculture resources at 

2 the time of the review. 

3 SEC. 504. REQUIREMENTS FOR DOMESTIC AGRICULTURAL 

4 AND FORESTRY PRACTICES. 

5 (a) METHODOLOGIES.— 

6 (1) IN GENERAL; CONDITION.—In promulgating 

7 regulations under section 502, the Secretary shall 

8 establish methodologies for domestic agricultural 

9 and forestry practices listed under section 503, if 

10 the Secretary determines that methodologies can be 

11 established for such practices that meet each of the 

12 requirements of this section. The Secretary shall 

13 only issue offset credits under this title pursuant to 

14 promulgated methodologies applicable to the offset 

15 practice that avoided or reduced greenhouse gas 

16 emissions or sequestered greenhouse gases. 

17 (2) SPECIFIED METHODOLOGIES.—The Sec18 retary shall establish the following methodologies 

19 under this section: 

20 (A) ACTIVITY BASELINES.—A standardized 

21 methodology for establishing activity baselines 

22 for an offset practice of that type. The Sec23 retary shall set activity baselines to reflect a 

24 conservative estimate of performance or activi25 ties for the relevant type of practice (excluding 
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1 changes in performance or activities due to the 

2 availability of offset credits) such that the base3 line provides an adequate margin of safety to 

4 ensure the environmental integrity of offset 

5 credits calculated in reference to such baseline. 

6 (B) ADDITIONALITY.—A standardized 

7 methodology for determining the additionality 

8 of greenhouse gas emissions reduction or avoid9 ance, or greenhouse gas sequestration, achieved 

10 by an offset practice of that type. Such method11 ology shall ensure, at a minimum, that any 

12 greenhouse gas emission reduction or avoidance, 

13 or any greenhouse gas sequestration, is consid14 ered additional only to the extent that it results 

15 from activities that— 

16 (i) are not required by existing gov17 ernment regulations, as determined by the 

18 Secretary; 

19 (ii) were not commenced prior to Jan20 uary 1, 2009, except in the case of— 

21 (I) offset project activities that 

22 commenced after January 1, 2001, 

23 and were registered as of the date of 

24 enactment of this title under an offset 

25 program with respect to which an af-
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1 firmative determination has been 

2 made under section 740 of the Clean 

3 Air Act; or 

4 (II) activities that are readily re5 versible, with respect to which the 

6 Secretary may set an alternative ear7 lier date under this subparagraph that 

8 is not earlier than January 1, 2001, 

9 where the Secretary determines that 

10 setting such an alternative date may 

11 produce an environmental benefit by 

12 removing an incentive to cease and 

13 then reinitiate activities that began 

14 prior to January 1, 2009; and 

15 (iii) exceed the applicable activity 

16 baseline established under paragraph (2). 

17 (C) QUANTIFICATION METHODS.—A stand18 ardized methodology for determining the extent 

19 to which greenhouse gas emission reductions or 

20 avoidance, or greenhouse gas sequestration, 

21 achieved by an offset practice of that type ex22 ceeded a relevant activity baseline, including 

23 methods for monitoring and accounting for un24 certainty. 
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1 (D) LEAKAGE.—A standardized method2 ology for accounting for and mitigating poten3 tial leakage, if any, from an offset practice of 

4 that type, taking uncertainty into account, ex5 cluding international indirect land use changes 

6 unless a positive determination is made under 

7 section 211(o)(13)(C)(iii) of the Clean Air Act. 

8 (b) SPECIAL CONSIDERATIONS.— 

9 (1) EXISTING OFFSET PRACTICES.—In estab10 lishing the methodologies under subsection (a), the 

11 Secretary shall give due consideration to methodolo12 gies for offset practices existing as of the date of the 

13 enactment of this title. 

14 (2) CERTAIN FACTORS.—As part of the meth15 odologies established under subsection (a), the Sec16 retary shall establish a formula that takes into ac17 count the components of the practice, the character18 istics of the land on which the practice is applied, 

19 the crop produced, and such other factors as deter20 mined appropriate by the Secretary. 

21 (c) ACCOUNTING FOR REVERSALS.— 

22 (1) IN GENERAL.—Except as provided in sub23 section (d) with respect to issuance of a term offset 

24 credit, for each type of practice listed under section 
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1 503, the Secretary shall establish requirements to 

2 account for and address reversals, including— 

3 (A) a requirement to report any reversal 

4 with respect to an offset practice for which off5 set credits have been issued under this title; 

6 (B) provisions to require emission allow7 ances or offset credits to be held in amounts to 

8 fully compensate for greenhouse gas emissions 

9 attributable to reversals, and to assign responsi10 bility for holding such emission allowances; and 

11 (C) any other provisions that the Secretary 

12 determines to be necessary to account for and 

13 address reversals. 

14 (2) MECHANISMS.— 

15 (A) IN GENERAL.—The Secretary shall 

16 prescribe mechanisms to ensure that any se17 questration of greenhouse gases, with respect to 

18 which an offset credit is issued under this title, 

19 results in a permanent net increase in seques20 tration of greenhouse gases, and that full ac21 count is taken of any actual or potential rever22 sal of such sequestration, with an adequate 

23 margin of safety. 

24 (B) SPECIFIC MECHANISMS.—The Sec25 retary shall make available one or more of the 
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1 following mechanisms to meet the requirements 

2 of this paragraph: 

3 (i) An offsets reserve, pursuant to 

4 paragraph (3). 

5 (ii) Insurance that provides for pur6 chase and provision to the Secretary for 

7 retirement of a quantity of offset credits or 

8 emission allowances equal in number to the 

9 tons of carbon dioxide equivalents of green10 house gas emissions released due to rever11 sal. 

12 (iii) Another mechanism if the Sec13 retary determines it is necessary to satisfy 

14 the requirements of this title, taking into 

15 account whether the reversal was inten16 tional or unintentional. 

17 (3) OFFSETS RESERVE.— 

18 (A) IN GENERAL.—An offsets reserve re19 ferred to in paragraph (2)(B)(i) is a program 

20 under which, before issuance of offset credits 

21 under this title, the Secretary shall— 

22 (i) subtract and reserve from the 

23 quantity to be issued a quantity of offset 

24 credits based on the risk of reversal; 
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1 (ii) hold those reserved offset credits 

2 in the offsets reserve; and 

3 (iii) register the holding of the re4 served offset credits in an offset registry. 

5 (B) PRACTICE REVERSAL.— 

6 (i) IN GENERAL.—If a reversal has 

7 occurred with respect to an offset practice 

8 within an offset project, for which offset 

9 credits are reserved under this paragraph, 

10 the Secretary shall retire offset credits 

11 from the offsets reserve to fully account 

12 for the tons of carbon dioxide equivalent 

13 that are no longer sequestered. 

14 (ii) INTENTIONAL REVERSALS.—If the 

15 Secretary determines that a reversal was 

16 intentional, the offset practice developer 

17 for the relevant offset practice shall place 

18 into the offsets reserve a quantity of offset 

19 credits, or combination of offset credits 

20 and emission allowances, equal in number 

21 to the number of reserve offset credits that 

22 were retired pursuant to clause (i). 

23 (iii) UNINTENTIONAL REVERSALS.—If 

24 the Secretary determines that a reversal 

25 was unintentional, the offset project devel-
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1 oper for the relevant offset project shall 

2 place into the offsets reserve a quantity of 

3 offset credits, or combination of offset 

4 credits and emission allowances, equal in 

5 number to half the number of offset credits 

6 that were reserved for that offset project, 

7 or half the number of reserve offset credits 

8 that were canceled due to the reversal pur9 suant to clause (i), whichever is less, ex10 cept that the Secretary may lower this 

11 amount based on undue hardship in the 

12 event of a catastrophic occurrence. 

13 (C) USE OF RESERVED OFFSET CRED14 ITS.—Offset credits placed into the offsets re15 serve under this paragraph may not be used to 

16 comply with section 722 of the Clean Air Act. 

17 (d) TERM OFFSET CREDITS.— 

18 (1) APPLICABILITY.—With respect to a practice 

19 listed under section 503 that sequesters greenhouse 

20 gases and has a crediting period of no more than 5 

21 years, the Secretary may address reversals pursuant 

22 to this subsection in lieu of permanently accounting 

23 for reversals pursuant to subsection (c). 

24 (2) ACCOUNTING FOR REVERSALS.—For such 

25 practices or projects implementing such practices, 
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1 the Secretary shall require only reversals that occur 

2 during the crediting period to be accounted for and 

3 addressed pursuant to subsection (c). 

4 (3) CREDITS ISSUED.—For practices or projects 

5 regulated pursuant to paragraph (2), the Secretary 

6 shall issue under section 507 a term offset credit, in 

7 lieu of an offset credit, for each ton of carbon diox8 ide equivalent that has been sequestered. 

9 (e) CREDITING PERIODS.— 

10 (1) IN GENERAL.—For each offset practice type 

11 within an offset project, the Secretary shall specify 

12 a crediting period, and establish provisions for re13 enrollment for a subsequent crediting period, in ac14 cordance with this subsection. 

15 (2) DURATION.—The crediting period shall 

16 have a term of up to— 

17 (A) 5 years for agricultural sequestration 

18 practices; 

19 (B) 20 years for forestry sequestration 

20 practices; and 

21 (C) 10 years for other practice types that 

22 reduce or avoid greenhouse gas emissions or se23 quester greenhouse gases. 

24 (3) ELIGIBILITY.—An offset practice, within an 

25 offset project, shall— 
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1 (A) be eligible to generate offset credits 

2 under this title only during the crediting period 

3 of the offset practice; and 

4 (B) remain eligible to generate offset cred5 its, only during the crediting period, subject to 

6 the methodologies and practice type eligibility 

7 list that applied as of the date of the project 

8 approval. 

9 (4) REENROLLMENT FOR SUBSEQUENT CRED10 ITING PERIOD.— 

11 (A) REENROLLMENT AUTHORIZED; TIME

12 FOR REENROLLMENT.—An offset project devel13 oper may reenroll for a subsequent crediting pe14 riod, to commence after termination of the cur15 rent crediting period, subject to the methodolo16 gies and practice type eligibility list in effect at 

17 the time of reenrollment. Reenrollment may not 

18 occur more than 18 months before the end of 

19 the crediting period then in effect. 

20 (B) LIMITATION.—The Secretary may 

21 limit the number of subsequent crediting peri22 ods available for a particular practice type. 

23 (f) ENVIRONMENTAL INTEGRITY.—In establishing 

24 the requirements under this section, the Secretary shall 

25 apply conservative assumptions or methods to ensure the 
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1 environmental integrity of the cap established under sec2 tion 703 of the Clean Air Act is not compromised. 

3 SEC. 505. PROJECT PLAN SUBMISSION AND APPROVAL. 

4 (a) PROJECT PLAN REQUIRED.—An offset project 

5 developer shall submit to the Secretary an offset project 

6 plan for approval. 

7 (b) REQUIREMENTS.—As part of the regulations pro8 mulgated under this title, the Secretary shall include pro9 visions for, and shall specify, the required components of 

10 an offset project plan, including— 

11 (1) designation of an offset project developer; 

12 (2) a list and schedule of the practices to be im13 plemented; 

14 (3) any other information that the Secretary 

15 considers to be necessary— 

16 (A) to determine whether the offset prac17 tice, within the offset project, is eligible for 

18 issuance of offset credits under regulations pro19 mulgated under this title; and 

20 (B) to achieve the purposes of this title. 

21 (c) TIME FOR CONSIDERATION; NOTIFICATION.—Not 

22 later than 90 days after receiving a complete offset project 

23 plan under subsection (a), the Secretary shall— 

24 (1) approve the plan in writing and include an 

25 estimate of the offset project credits that will be 
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1 earned if the plan is implemented, subject to 

2 verification of all project-specific variables; or 

3 (2) if the plan is denied, provide the reasons for 

4 denial in writing. 

5 (d) APPEAL.—The Secretary shall establish proce6 dures for appeal and review of determinations made under 

7 this section. 

8 (e) RESUBMISSION.—After an offset project plan is 

9 approved, the offset project developer shall not be required 

10 to resubmit a project plan during the crediting period. 

11 SEC. 506. VERIFICATION OF OFFSET PRACTICES. 

12 (a) IN GENERAL.—As part of the regulations promul13 gated under this title, the Secretary shall establish re14 quirements to verify— 

15 (1) that offset practices in an approved offset 

16 project plan have been implemented; and 

17 (2) the quantity of greenhouse gas emission re18 ductions or avoidance, or sequestration of green19 house gases, resulting from an offset practice and 

20 project. 

21 (b) VERIFICATION REPORTS.— 

22 (1) IN GENERAL.—The regulations described in 

23 subsection (a) shall require an offset project devel24 oper to submit a report, prepared by a third-party 

25 verifier accredited under subsection (c). 
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1 (2) REQUIREMENTS.—The Secretary shall 

2 specify the components of a verification report re3 quired under paragraph (1), including— 

4 (A) the name and contact information for 

5 the offset project developer; 

6 (B) a certification that the project plan 

7 has been implemented; 

8 (C) the quantity of greenhouse gases re9 duced, avoided, or sequestered; 

10 (D) a certification establishing that the 

11 conflict of interest requirements in the regula12 tions promulgated under this title have been 

13 complied with; 

14 (E) any other information that the Sec15 retary requires to determine the quantity of 

16 greenhouse gas emission reduction or avoidance, 

17 or sequestration of greenhouse gases, resulting 

18 from the offset practice and project; and 

19 (F) any other information that the Sec20 retary considers to be necessary to achieve the 

21 purposes of this title. 

22 (c) VERIFIER ACCREDITATION.— 

23 (1) IN GENERAL.—As part of the regulations 

24 promulgated under this title, the Secretary shall es25 tablish a process and requirements for periodic ac-
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1 creditation of third-party verifiers for offset credits 

2 under this program to ensure that those verifiers are 

3 professionally qualified and have no conflicts of in4 terest. 

5 (2) PUBLIC ACCESSIBILITY.—Each verifier 

6 meeting the requirements for accreditation in ac7 cordance with this subsection shall be listed in a 

8 publicly accessible database, which shall be main9 tained and updated by the Secretary. 

10 SEC. 507. CERTIFICATION OF OFFSET CREDITS. 

11 (a) DETERMINATION AND NOTIFICATION.—Not later 

12 than 90 days after receiving a complete verification report, 

13 the Secretary shall— 

14 (1) make a determination of the quantity of 

15 greenhouse gas emissions that have been reduced or 

16 avoided, or greenhouse gases that have been seques17 tered, by the offset practice in an approved and 

18 verified offset project plan; and 

19 (2) notify the offset project developer in writing 

20 of the determination. 

21 (b) ISSUANCE OF OFFSET CREDITS.—The Secretary 

22 shall issue 1 offset credit to an offset project developer 

23 for each ton of carbon dioxide equivalent that the Sec24 retary determines has been reduced, avoided, or seques25 tered during the crediting period. Offset credits may be 
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1 issued only for greenhouse gas emissions reduced, avoided, 

2 or sequestered after January 1, 2009. 

3 (c) APPEAL.—The Secretary shall establish proce4 dures for appeal and review of determinations made under 

5 subsection (a). 

6 (d) TIMING.—Offset credits meeting the criteria de7 scribed in subsection (b) shall be issued by the Secretary 

8 not later than 14 days after the date on which the Sec9 retary makes a determination under subsection (a). 

10 (e) REGISTRATION.—The Secretary shall obtain from 

11 the Administrator a unique serial number to allow for the 

12 registration of each offset credit to be issued under this 

13 title. 

14 SEC. 508. OWNERSHIP AND TRANSFER OF OFFSET CREDITS. 

15 (a) OWNERSHIP.—Initial ownership of an offset cred16 it shall lie with the offset project developer, unless other17 wise specified in a legally binding contract or agreement. 

18 (b) TRANSFERABILITY.—An offset credit issued 

19 under this title may be sold, traded, or transferred, unless 

20 the offset credit has expired or been retired. 

21 SEC. 509. PROGRAM REVIEW AND REVISION. 

22 At least once every 5 years, the Secretary shall review 

23 and, based on new or updated information and taking into 

24 consideration the recommendations of the Advisory Board, 

25 update and revise— 
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1 (1) the list of eligible practice types established 

2 under section 503; 

3 (2) the methodologies established, including 

4 specific activity baselines, under section 504(a); 

5 (3) the reversal requirements and mechanisms 

6 established or prescribed under subsections (c) and 

7 (d) of section 504; 

8 (4) measures to improve the accountability of 

9 the offsets program; and 

10 (5) any other requirements established under 

11 this title to ensure the environmental integrity and 

12 effective operation of this title. 

13 SEC. 510. ENVIRONMENTAL CONSIDERATIONS. 

14 If the Secretary lists forestry practices as eligible off15 set practice types under section 503, the Secretary, in con16 sultation with appropriate Federal agencies, shall promul17 gate regulations for the selection and use of species in for18 estry and other relevant land management-related offset 

19 practices— 

20 (1) to ensure that native species are given pri21 mary consideration in such practices; 

22 (2) to encourage the conservation of biological 

23 diversity in such practices; 

24 (3) to prohibit the use of federally designated 

25 or State-designated noxious weeds; 
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1 (4) to prohibit the use of a species listed by a 

2 regional or State invasive plant authority within the 

3 applicable region or State; and 

4 (5) in accordance with widely accepted, environ5 mentally sustainable forestry practices. 

6 SEC. 511. AUDITS. 

7 (a) AUDITS REQUIRED.—The Secretary shall con8 duct, on an annual basis, random audits of offset projects, 

9 offset credits, and the practices of third-party verifiers. At 

10 a minimum, the Secretary shall conduct audits each year 

11 for a representative sample of practice types and geo12 graphical areas. 

13 (b) ADDITIONAL AUTHORITY.—Nothing in this sec14 tion prevents the Secretary from conducting any audit the 

15 Secretary considers to be necessary. 

16 Subtitle B—USDA Greenhouse Gas 

17 Emission Reduction and Seques18 tration Advisory Committee 

19 SEC. 531. ESTABLISHMENT OF USDA GREENHOUSE GAS 

20 EMISSION REDUCTION AND SEQUESTRATION 

21 ADVISORY COMMITTEE. 

22 Section 1245 of the Food Security Act of 1985 (16 

23 U.S.C. 3854), as added by section 2709 of the Food, Con24 servation, and Energy Act of 2008 (Public Law 110–246; 
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1 122 Stat. 1809), is amended by adding at the end the 

2 following new subsection: 

3 ‘‘(f) USDA GREENHOUSE GAS EMISSION REDUC4 TION AND SEQUESTRATION ADVISORY COMMITTEE.— 

5 ‘‘(1) ESTABLISHMENT.—Not later than 30 days 

6 after the date of the enactment of the American 

7 Clean Energy and Security Act of 2009, the Sec8 retary shall establish an independent advisory com9 mittee, to be known as the ‘USDA Greenhouse Gas 

10 Emission Reduction and Sequestration Advisory 

11 Committee’, to provide scientific and technical advice 

12 on establishing, implementing, and ensuring the 

13 overall environmental integrity of an offset program 

14 for domestic agricultural and forestry practices that 

15 reduce or avoid greenhouse gas emissions, or seques16 ter greenhouse gases. 

17 ‘‘(2) MEMBERSHIP.—The Advisory Committee 

18 shall be comprised of nine members, including a 

19 chairperson and vice-chairperson, appointed by the 

20 Secretary. Each member shall be qualified by edu21 cation, training, and experience to evaluate scientific 

22 and technical information for domestic agricultural 

23 and forestry offset practices that reduce or avoid 

24 greenhouse gas emissions or sequester greenhouse 

25 gases. 
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1 ‘‘(3) TERMS.—Terms shall be 3 years in length, 

2 except for the initial terms, which may be up to 5 

3 years in length to allow staggered terms. Members 

4 may be reappointed only once for an additional 3- 

5 year term, and such term may follow directly after 

6 a first term. 

7 ‘‘(4) DUTIES.—The Advisory Committee 

8 shall— 

9 ‘‘(A) provide options and recommenda10 tions, not later than 180 days after the date of 

11 the enactment of the American Clean Energy 

12 and Security Act of 2009, to the Secretary re13 garding the establishment of methodologies as 

14 described in section 504 of such Act, taking 

15 into account relevant scientific information, in16 cluding— 

17 ‘‘(i) the availability of representative 

18 data for use in developing an activity base19 line for a land area, forest, soil, industry 

20 sector, and facility type; 

21 ‘‘(ii) the potential for accurate 

22 quanitification of greenhouse gas reduc23 tion, or sequestration for an offset practice 

24 type; 
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1 ‘‘(iii) the potential level of scientific 

2 and measurement uncertainty associated 

3 with an offset practice type; and 

4 ‘‘(iv) the use of practice methodologies 

5 that account for common practice or other 

6 direct comparisons within a relevant land 

7 area, industry sector, forest, soil, or facility 

8 type; 

9 ‘‘(B) make available to the Secretary op10 tions and recommendations for the program as 

11 a whole and on offset methodologies for each 

12 practice type that should be considered under 

13 regulations promulgated pursuant to section 

14 504 of the American Clean Energy and Secu15 rity Act of 2009, including methodologies to ad16 dress the issues of additionality, activity base17 lines, measurement, leakage, including the ap18 plication of sector specific leakage factors, un19 certainty, permanence, and environmental in20 tegrity; 

21 ‘‘(C) make available to the Secretary ad22 vice and comment on areas where further 

23 knowledge is required to appraise the adequacy 

24 of existing, revised, or proposed methodologies 
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1 and describe the research efforts necessary to 

2 provide the required information; 

3 ‘‘(D) make available to the Secretary ad4 vice and comments on other ways to improve or 

5 safeguard the environmental integrity of the 

6 offset practice types listed under section 503 of 

7 the American Clean Energy and Security Act of 

8 2009; and 

9 ‘‘(E) provide options and recommendations 

10 regarding new practice types. 

11 ‘‘(5) SCIENTIFIC REVIEW OF OFFSET PRO12 GRAM.—Not later than January 1, 2017, and at 5- 

13 year intervals thereafter, the Advisory Committee 

14 shall— 

15 ‘‘(A) submit to the Secretary and make 

16 available to the public an analysis of relevant 

17 scientific and technical information regarding 

18 agricultural and forestry offset practices that 

19 reduce or avoid greenhouse gas emissions or se20 quester greenhouse gases; 

21 ‘‘(B) review approved and potential prac22 tice types, methodologies, scientific studies, off23 set project monitoring, offset project 

24 verification reports, reporting of reversals, au25 dits related to the offset program, and other 
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•HR 2454 EH

1 relevant information needed to evaluate the off2 set program; 

3 ‘‘(C) evaluate the net emission effects of 

4 implemented offset projects; and 

5 ‘‘(D) recommend changes to offset meth6 odologies, procedures, practice types, or the 

7 overall program to ensure that— 

8 ‘‘(i) the offset practices result in re9 duced or avoided greenhouse gas emissions 

10 or sequestration of greenhouse gases; 

11 ‘‘(ii) the offset credits issued by the 

12 Secretary do not compromise the integrity 

13 of the annual emissions reductions estab14 lished under section 703 of the Clean Air 

15 Act; and 

16 ‘‘(iii) the offset program avoids or 

17 minimizes adverse affects to human health 

18 and the environment. 

19 ‘‘(6) COORDINATION.—To avoid duplication, the 

20 Advisory Committee shall coordinate its activities 

21 with those of any other Federal advisory committees 

22 working in related areas, and shall to the maximum 

23 extent possible use research data and services of the 

24 research, education, extension agencies of the De25 partment of Agriculture. 
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1 ‘‘(7) CONSULTATION.—On a periodic basis, the 

2 Advisory Committee shall consult with, and be in3 formed by the views of, the Offsets Integrity Advi4 sory Board established under section 731 of the 

5 Clean Air Act. 

6 ‘‘(8) MEETING.—The Advisory Committee shall 

7 meet on at least a quarterly basis each year. 

8 ‘‘(9) ADMINISTRATIVE SUPPORT AND FUND9 ING.—The Secretary may provide such administra10 tive and funding support as necessary to enable the 

11 Advisory Committee to carry out its duties under 

12 this section. 

13 ‘‘(10) REPORT.—For each fiscal year, the Sec14 retary shall submit to Congress a report on— 

15 ‘‘(A) the status and progress on the offset 

16 practices; 

17 ‘‘(B) the general status of cooperation and 

18 research and development; and 

19 ‘‘(C) the plans for addressing future issues 

20 and concerns.’’. 

21 Subtitle C—Miscellaneous 

22 SEC. 551. INTERNATIONAL INDIRECT LAND USE CHANGES. 

23 Section 211(o) of the Clean Air Act (42 U.S.C. 

24 7545(o)) is amended by adding at the end the following 
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1 ‘‘(13) INTERNATIONAL INDIRECT LAND USE

2 CHANGES.— 

3 ‘‘(A) EXCLUSION FROM REGULATORY RE4 QUIREMENTS REGARDING LIFECYCLE GREEN5 HOUSE GAS EMISSIONS.—Notwithstanding the 

6 definition of ‘lifecycle greenhouse gas emissions’ 

7 in paragraph (1)(H), for purposes of deter8 mining whether the fuel meets a definition in 

9 paragraph (1) or complies with paragraph 

10 (2)(A)(i), the Administrator shall exclude emis11 sions from indirect land use changes outside the 

12 renewable fuel’s feedstock’s country of origin. 

13 ‘‘(B) NATIONAL ACADEMIES OF SCIENCE

14 REPORT.—(i) Not later than 6 months after the 

15 date of enactment of this paragraph, the Ad16 ministrator and the Secretary of Agriculture 

17 shall jointly arrange for the National Academies 

18 of Science to review and report on specified 

19 issues related to indirect greenhouse gas emis20 sions related to transportation fuels. 

21 ‘‘(ii) The report shall evaluate and report 

22 on whether there are economic and environ23 mental models and methodologies that individ24 ually, or as a system, can project with reli25 ability, predictability, and confidence— 
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1 ‘‘(I) for purposes of determining 

2 whether the fuel meets a definition in 

3 paragraph (1) or complies with paragraph 

4 (2)(A)(i), indirect land use changes that 

5 are related to the production of renewable 

6 fuels and that may occur outside the coun7 try in which the feedstocks are grown, and 

8 the impacts of these changes on green9 house gas emissions; and 

10 ‘‘(II) indirect effects, both domestic 

11 and international, related to the production 

12 and importation of non-renewable trans13 portation fuels that have significant green14 house gas emissions, and the impact of 

15 these effects on greenhouse gas emissions. 

16 ‘‘(iii) The report shall include a review and 

17 assessment of all pertinent scientific studies, 

18 methodologies and data, shall evaluate potential 

19 methodologies for calculating such emissions 

20 (including an evaluation of methods for 

21 annualizing emissions associated with forest 

22 degradation or land conversion), and shall make 

23 appropriate recommendations. The rec24 ommendations shall address indirect effects, 

25 both domestic and international, related to the 
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1 production and importation of non-renewable 

2 transportation fuels that have significant green3 house gas emissions. The report shall use ap4 propriate validation procedures, including sensi5 tivity analyses, of how results change as as6 sumptions change. The evaluation shall include 

7 for a model, a methodology, or a system of 

8 models— 

9 ‘‘(I) an assessment of how reliably the 

10 models, methodologies, or systems track 

11 actual outcomes over historical periods 

12 using available historical data; and 

13 ‘‘(II) an assessment of how reliably 

14 the models, methodologies or systems will 

15 project future outcomes. 

16 ‘‘(iv) The report shall be publicly available 

17 and shall include sufficient information and 

18 data such that economists and other scientists 

19 with relevant expertise that are not on the Na20 tional Academies of Science panel can fully 

21 evaluate the conclusions of the report. 

22 ‘‘(v) The report shall be completed within 

23 3 years of the date of enactment of this para24 graph. 
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1 ‘‘(C) DETERMINATION.—(i) The Adminis2 trator and the Secretary of Agriculture shall, 

3 after notice and an opportunity for public com4 ment, determine whether, for purposes of deter5 mining compliance with the percent reductions 

6 in lifecycle greenhouse gas emissions specified 

7 in paragraph (1) for various renewable fuels, 

8 scientifically valid models and methodologies 

9 exist to project indirect land use changes that 

10 are related to the production of renewable fuels 

11 and that occur outside the country in which the 

12 feedstocks are grown, and the impact of these 

13 changes on greenhouse gas emissions. 

14 ‘‘(ii) The determination shall take into ac15 count the findings and recommendations of the 

16 report required under subparagraph (B), as 

17 well as other available scientific, economic, and 

18 other relevant information. The Administrator 

19 and the Secretary may also consider methods 

20 used by the Environmental Protection Agency, 

21 the Department of Agriculture, and other Fed22 eral agencies to assess or guide their related 

23 policies. 

24 ‘‘(iii) The Administrator and the Secretary 

25 of Agriculture shall publish a proposed deter-
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1 mination not later than 4 years after date of 

2 enactment of this paragraph, and shall publish 

3 a final determination not later than 5 years 

4 after date of enactment of this paragraph. An 

5 explanation and justification of the determina6 tion shall be included in the proposed and final 

7 actions, together with a response to comments 

8 received. 

9 ‘‘(D) RESPONSE TO DETERMINATION.—(i) 

10 In the event of a positive determination under 

11 subparagraph (C), the Administrator and the 

12 Secretary of Agriculture shall, after notice and 

13 an opportunity for public comment, by the same 

14 date jointly establish a methodology (or meth15 odologies) to calculate greenhouse gas emissions 

16 from indirect land use changes that are attrib17 utable to the production of renewable fuels and 

18 that occur outside the country in which feed19 stocks are grown for purposes of calculating a 

20 renewable fuel’s lifecycle greenhouse gas emis21 sions to determine whether the fuel meets a def22 inition in paragraph (1) or complies with para23 graph (2)(A)(i). The exclusion in subparagraph 

24 (A) shall end, and the Administrator shall issue 

25 a regulation by the same date that shall include 
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1 emissions from indirect land use changes out2 side the renewable fuel’s feedstock’s country of 

3 origin for purposes of calculating a renewable 

4 fuel’s lifecycle greenhouse gas emissions to de5 termine whether the fuel meets a definition in 

6 paragraph (1) or complies with paragraph 

7 (2)(A)(i) for renewable fuels sold in the cal8 endar year following the year of the positive de9 termination. The effective date of the regulation 

10 shall be 6 years after the date of enactment of 

11 this paragraph. 

12 ‘‘(ii) A negative determination under sub13 paragraph (C) shall include a statement of the 

14 basis for the determination. 

15 ‘‘(E) ACCOUNTABILITY.—The joint duties 

16 and actions of the Administrator and the Sec17 retary of Agriculture shall be subject to sections 

18 304 and 307 of this Act as if they were the du19 ties and actions of the Administrator alone.’’. 

20 SEC. 552. BIOMASS-BASED DIESEL. 

21 Section 211(o)(2)(A) of the Clean Air Act (42 U.S.C. 

22 7545(o)(2)(A)) is amended by adding at the end the fol23 lowing new clause: 

24 ‘‘(v) GRANDFATHERING BIOMASS25 BASED DIESEL.—The Administrator shall 
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1 promulgate regulations exempting from the 

2 lifecycle greenhouse gas requirements in 

3 subparagraphs (B) and (D) of paragraph 

4 (1) up to the greater of 1 billion gallons or 

5 the volume mandate adopted pursuant to 

6 subparagraph (B)(ii) of biomass-based die7 sel annually from facilities that commenced 

8 construction before the date of enactment 

9 of the Energy Independence and Security 

10 Act of 2007.’’. 

11 SEC. 553. MODIFICATION OF DEFINITION OF RENEWABLE 

12 BIOMASS. 

13 (a) NATIONAL ACADEMY OF SCIENCES REPORT.— 

14 Not later than 1 year after the date of enactment of this 

15 Act, the Administrator of the Environmental Protection 

16 Agency, the Secretary of Agriculture, and the Federal En17 ergy Regulatory Commission shall jointly arrange for the 

18 National Academy of Sciences to evaluate how sources of 

19 renewable biomass contribute to the goals of increasing 

20 America’s energy independence, protecting the environ21 ment, and reducing global warming pollution. 

22 (b) MODIFICATION.— 

23 (1) EPA MODIFICATION AUTHORITY.—After re24 viewing the report required by subsection (a), the 

25 Administrator of the Environmental Protection 
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•HR 2454 EH

1 Agency, in concurrence with the Secretary of Agri2 culture, may, by regulation and after public notice 

3 and comment, modify the non-Federal lands portion 

4 of the definition of ‘‘renewable biomass’’ in sections 

5 211(o)(1)(I) and 700 of the Clean Air Act in order 

6 to advance the goals of increasing America’s energy 

7 independence, protecting the environment, and re8 ducing global warming pollution. 

9 (2) FERC MODIFICATION AUTHORITY.—After 

10 reviewing the report required by subsection (a), the 

11 Federal Energy Regulatory Commission, in concur12 rence with the Secretary of Agriculture, may, by reg13 ulation and after public notice and comment, modify 

14 the non-Federal lands portion of the definition of 

15 ‘‘renewable biomass’’ in section 610 of the Public 

16 Utility Regulatory Policies Act of 1978 in order to 

17 advance the goals of increasing America’s energy 

18 independence, protecting the environment, and re19 ducing global warming pollution. 

20 (c) FEDERAL LANDS.— 

21 (1) SCIENTIFIC REVIEW.—The Secretary of the 

22 Interior, the Secretary of Agriculture, and the Ad23 ministrator of the Environmental Protection Agency 

24 shall conduct a joint scientific review, within 1 year 

25 after the date of enactment of this Act, to evaluate 
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1 how sources of biomass from Federal lands could 

2 contribute to the goals of increasing America’s en3 ergy independence, protecting the environment, and 

4 reducing global warming pollution. 

5 (2) MODIFICATION AUTHORITY.—Based on the 

6 scientific review, the agencies may, by rule, modify 

7 the definition of ‘‘renewable biomass’’ from Federal 

8 lands in sections 211(o)(1)(I) and 700 of the Clean 

9 Air Act and section 610 of the Public Utility Regu10 latory Policies Act of 1978 as appropriate to ad11 vance the goals of increasing America’s energy inde12 pendence, protecting the environment, and reducing 

13 global warming pollution. 

Passed the House of Representatives June 26, 2009. 

Attest: 

Clerk. 
111TH CONGRESS 

1ST SESSION H. R. 2454 

AN ACT 

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