IB 

Union Calendar No. 90 

111TH CONGRESS 

1ST SESSION H. R. 2454 

[Report No. 111–137, Part I] 

To create clean energy jobs, achieve energy independence, reduce global 

warming pollution and transition to a clean energy economy. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 15, 2009 

Mr. WAXMAN (for himself and Mr. MARKEY of Massachusetts) introduced the 

following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Foreign Affairs, Financial 

Services, Education and Labor, Science and Technology, Transportation 

and Infrastructure, Natural Resources, Agriculture, and Ways and 

Means, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

JUNE 5, 2009 

Reported from the Committee on Energy and Commerce with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

JUNE 5, 2009 

The Committees on Education and Labor and Foreign Affairs discharged 

JUNE 5, 2009 

Referral to the Committees on Financial Services, Science and Technology, 

Transportation and Infrastructure, Natural Resources, Agriculture, and 

Ways and Means extended for a period ending not later than June 19, 

2009 

JUNE 19, 2009 

The Committees on Financial Services, Science and Technology, Transportation and Infrastructure, Natural Resources, Agriculture, and Ways and 

Means discharged; committed to the Committee of the Whole House on 

the State of the Union and ordered to the printed 

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[For text of introduced bill, see copy of bill as introduced on May 15, 2009] 

A BILL 

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, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

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

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

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

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. 

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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. Amendment to renewable fuels standard. 

Sec. 127. Open fuel standard. 

Sec. 128. Temporary Vehicle Trade-in Program. 

Sec. 129. Diesel emissions reduction. 

Sec. 130. Loan guarantees for projects to construct renewable fuel pipelines. 

Subtitle D—State Energy and Environment Development Accounts 

Sec. 131. Establishment of SEED Accounts. 

Sec. 132. Support of State renewable energy and energy efficiency programs. 

Subtitle E—Smart Grid Advancement 

Sec. 141. Definitions. 

Sec. 142. Assessment of Smart Grid cost effectiveness in products. 

Sec. 143. Inclusions of Smart Grid capability on appliance ENERGY GUIDE 

labels. 

Sec. 144. Smart Grid peak demand reduction goals. 

Sec. 145. Reauthorization of energy efficiency public information program to include Smart Grid information. 

Sec. 146. Inclusion of Smart Grid features in appliance rebate program. 

Subtitle F—Transmission Planning 

Sec. 151. Transmission planning. 

Sec. 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 

Sec. 171. Clean Energy Innovation Centers. 

Sec. 172. Building Assessment Centers. 

Sec. 173. Centers for Energy and Environmental Knowledge and Outreach. 

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. Federal credit authority. 

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Sec. 189. General provisions. 

Subtitle J—Miscellaneous 

Sec. 191. Study of ocean renewable energy and transmission planning and siting. 

Sec. 192. Clean technology business competition grant program. 

Sec. 193. National Bioenergy Partnership. 

Sec. 194. Office of Consumer Advocacy. 

TITLE II—ENERGY EFFICIENCY 

Subtitle A—Building Energy Efficiency Programs 

Sec. 201. 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. 

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. 214. Best-in-Class Appliances Deployment Program. 

Sec. 215. WaterSense. 

Sec. 216. Federal procurement of water efficient products. 

Sec. 217. Water efficient product rebate 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—PLANNING REQUIREMENTS

‘‘Sec. 841. Greenhouse gas emissions reductions through transportation efficiency. 

Sec. 223. SmartWay transportation efficiency program. 

‘‘Sec. 822. SmartWay transportation efficiency program. 

Sec. 224. State vehicle fleets. 

Subtitle D—Industrial Energy Efficiency Programs 

Sec. 241. Industrial plant energy efficiency standards. 

Sec. 242. Electric and thermal waste energy recovery award program. 

Sec. 243. Clarifying election of waste heat recovery financial incentives. 

Sec. 244. Motor market assessment and commercial awareness program. 

Sec. 245. Motor efficiency rebate program. 

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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. 

Subtitle G—Miscellaneous 

Sec. 271. 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. 

TITLE III—REDUCING GLOBAL WARMING POLLUTION 

Sec. 301. Short title. 

Subtitle A—Reducing Global Warming Pollution 

Sec. 311. Reducing global warming pollution. 

‘‘TITLE VII—GLOBAL WARMING POLLUTION REDUCTION PROGRAM 

‘‘PART A—GLOBAL WARMING POLLUTION REDUCTION GOALS AND TARGETS

‘‘Sec. 701. Findings and purpose. 

‘‘Sec. 702. Economy-wide reduction goals. 

‘‘Sec. 703. Reduction targets for specified sources. 

‘‘Sec. 704. Supplemental pollution reductions. 

‘‘Sec. 705. Review and program recommendations. 

‘‘Sec. 706. National Academy review. 

‘‘Sec. 707. Presidential response and recommendations. 

‘‘PART B—DESIGNATION AND REGISTRATION OF GREENHOUSE GASES

‘‘Sec. 711. Designation of greenhouse gases. 

‘‘Sec. 712. Carbon dioxide equivalent value of greenhouse gases. 

‘‘Sec. 713. Greenhouse gas registry. 

‘‘PART C—PROGRAM RULES

‘‘Sec. 721. Emission allowances. 

‘‘Sec. 722. Prohibition of excess emissions. 

‘‘Sec. 723. Penalty for noncompliance. 

‘‘Sec. 724. Trading. 

‘‘Sec. 725. Banking and borrowing. 

‘‘Sec. 726. Strategic reserve. 

‘‘Sec. 727. Permits. 

‘‘Sec. 728. International emission allowances. 

‘‘PART D—OFFSETS

‘‘Sec. 731. Offsets Integrity Advisory Board. 

‘‘Sec. 732. Establishment of offsets program. 

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‘‘Sec. 733. Eligible project types. 

‘‘Sec. 734. Requirements for offset projects. 

‘‘Sec. 735. Approval of offset projects. 

‘‘Sec. 736. Verification of offset projects. 

‘‘Sec. 737. Issuance of offset credits. 

‘‘Sec. 738. Audits. 

‘‘Sec. 739. Program review and revision. 

‘‘Sec. 740. Early offset supply. 

‘‘Sec. 741. Environmental considerations. 

‘‘Sec. 742. Trading. 

‘‘Sec. 743. International offset credits. 

‘‘PART E—SUPPLEMENTAL EMISSIONS REDUCTIONS FROM REDUCED

DEFORESTATION

‘‘Sec. 751. Definitions. 

‘‘Sec. 752. Findings. 

‘‘Sec. 753. Supplemental emissions reductions through reduced deforestation. 

‘‘Sec. 754. Requirements for international deforestation reduction program. 

‘‘Sec. 755. Reports and reviews. 

‘‘Sec. 756. Legal effect of part. 

Sec. 312. Definitions. 

‘‘Sec. 700. Definitions. 

Subtitle B—Disposition of Allowances 

Sec. 321. Disposition of allowances for global warming pollution reduction program. 

‘‘PART H—DISPOSITION OF ALLOWANCES

‘‘Sec. 781. Allocation of allowances for supplemental reductions. 

‘‘Sec. 782. Allocation of emission allowances. 

‘‘Sec. 783. Electricity consumers. 

‘‘Sec. 784. Natural gas consumers. 

‘‘Sec. 785. Home heating oil and propane consumers. 

‘‘Sec. 787. Allocations to refineries. 

‘‘Sec. 788. ƒSECTION RESERVED≈. 

‘‘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. 

Subtitle C—Additional Greenhouse Gas Standards 

Sec. 331. Greenhouse gas standards. 

‘‘TITLE VIII—ADDITIONAL GREENHOUSE GAS STANDARDS 

‘‘Sec. 801. Definitions. 

‘‘PART A—STATIONARY SOURCE STANDARDS

‘‘Sec. 811. Standards of performance. 

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‘‘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. 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. 

Subtitle D—Carbon Market Assurance 

Sec. 341. Carbon market assurance. 

Subtitle E—Additional Market Assurance 

Sec. 351. Regulation of certain transactions in derivatives involving energy commodities. 

Sec. 352. No effect on authority of the Federal Energy Regulatory Commission. 

Sec. 353. Inspector General of the Commodity Futures Trading Commission. 

Sec. 354. Settlement and clearing through registered derivatives clearing organizations. 

Sec. 355. Limitation on eligibility to purchase a credit default swap. 

Sec. 356. Transaction fees. 

Sec. 357. No effect on authority of the Federal Trade Commission. 

Sec. 358. Regulation of carbon derivatives markets. 

Sec. 359. Cease-and-desist authority. 

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. International negotiations. 

‘‘Sec. 763. Definitions. 

‘‘SUBPART 1—EMISSION ALLOWANCE REBATE PROGRAM

‘‘Sec. 764. Eligible industrial sectors. 

‘‘Sec. 765. Distribution of emission allowance rebates. 

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‘‘SUBPART 2—INTERNATIONAL RESERVE ALLOWANCE PROGRAM

‘‘Sec. 766. International reserve allowance program. 

‘‘SUBPART 3—PRESIDENTIAL DETERMINATION

‘‘Sec. 767. Presidential reports and determinations. 

Subtitle B—Green Jobs and Worker Transition 

PART 1—GREEN JOBS

Sec. 421. Clean energy curriculum development grants. 

Sec. 422. Increased funding for energy worker training program. 

PART 2—CLIMATE CHANGE WORKER ADJUSTMENT ASSISTANCE

Sec. 425. Petitions, eligibility requirements, and determinations. 

Sec. 426. Program benefits. 

Sec. 427. General provisions. 

Subtitle C—Consumer Assistance 

Sec. 431. Energy tax credit. 

Sec. 432. Energy refund program for low-income consumers. 

Subtitle D—Exporting Clean Technology 

Sec. 441. Findings and purposes. 

Sec. 442. Definitions. 

Sec. 443. Governance. 

Sec. 444. Determination of eligible countries. 

Sec. 445. Qualifying activities. 

Sec. 446. Assistance. 

Subtitle E—Adapting to Climate Change 

PART 1—DOMESTIC ADAPTATION

SUBPART A—NATIONAL CLIMATE CHANGE ADAPTATION PROGRAM

Sec. 451. National Climate Change Adaptation Program. 

Sec. 452. Climate services. 

Sec. 453. State programs to build resilience to climate change impacts. 

SUBPART B—PUBLIC HEALTH AND CLIMATE CHANGE

Sec. 461. Sense of Congress on public health and climate change. 

Sec. 462. Relationship to other laws. 

Sec. 463. National strategic action plan. 

Sec. 464. Advisory board. 

Sec. 465. Reports. 

Sec. 466. Definitions. 

Sec. 467. Climate Change Health Protection and Promotion Fund. 

SUBPART C—NATURAL RESOURCE ADAPTATION

Sec. 471. Purposes. 

Sec. 472. Natural resources climate change adaptation policy. 

Sec. 473. Definitions. 

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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. 

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 meaning 

7 given that term in section 302 of the Clean Air Act. 

8 SEC. 3. INTERNATIONAL PARTICIPATION. 

9 The Administrator, in consultation with the Depart10 ment of State and the United States Trade Representative, 

11 shall annually prepare and certify a report to the Congress 

12 regarding whether China and India have adopted green13 house gas emissions standards at least as strict as those 

14 standards required under this Act. If the Administrator de15 termines that China and India have not adopted greenhouse 

16 gas emissions standards at least as stringent as those set 

17 forth in this Act, the Administrator shall notify each Memmstockstill on PROD1PC66 with BILLS

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1 ber of Congress of his determination, and shall release his 

2 determination to the media. 

3 TITLE I—CLEAN ENERGY 

4 Subtitle A—Combined Efficiency 

5 and Renewable Electricity 

6 Standard 

7 SEC. 101. COMBINED EFFICIENCY AND RENEWABLE ELEC8 TRICITY STANDARD. 

9 (a) IN GENERAL.—Title VI of the Public Utility Regu10 latory Policies Act of 1978 (16 U.S.C. 2601 and following) 

11 is amended by adding at the end the following: 

12 ‘‘SEC. 610. COMBINED EFFICIENCY AND RENEWABLE ELEC13 TRICITY STANDARD. 

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

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

16 means— 

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

18 heat and power system that commences operation 

19 after the date of enactment of this section; and 

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

21 from, at any time after the date of the enactment 

22 of this section, upgrading, replacing, expanding, 

23 or increasing the utilization of a combined heat 

24 and power system that commenced operation on 

25 or before the date of enactment of this section. 

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

2 system savings’ means the electric output, and the 

3 electricity saved due to the mechanical output, of a 

4 combined heat and power system, adjusted to reflect 

5 any increase in fuel consumption by that system as 

6 compared to the fuel that would have been required to 

7 produce an equivalent useful thermal energy output 

8 in a separate thermal-only system. 

9 ‘‘(3) COMBINED HEAT AND POWER SYSTEM.—The 

10 term ‘combined heat and power system’ means a sys11 tem that uses the same energy source both for the gen12 eration of electrical or mechanical power and the pro13 duction of steam or another form of useful thermal 

14 energy, provided that— 

15 ‘‘(A) the system meets such requirements re16 lating to efficiency and other operating charac17 teristics as the Commission may promulgate by 

18 regulation; and 

19 ‘‘(B) the net sales of electricity by the facil20 ity to customers not consuming the thermal out21 put from that facility will not exceed 50 percent 

22 of total annual electric generation by the facility. 

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

24 ‘customer facility savings’ means a reduction in end25 use electricity consumption (including recycled energy 

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1 savings) at a facility of an end-use consumer of elec2 tricity served by a retail electric supplier, as com3 pared to— 

4 ‘‘(A) in the case of a new facility, consump5 tion at a reference facility of average efficiency; 

6 ‘‘(B) in the case of an existing facility, con7 sumption at such facility during a base period, 

8 except as provided in subparagraphs (C) and 

9 (D); 

10 ‘‘(C) in the case of new equipment that re11 places existing equipment with remaining useful 

12 life, the projected consumption of the existing 

13 equipment for the remaining useful life of such 

14 equipment, and thereafter, consumption of new 

15 equipment of average efficiency of the same 

16 equipment type; and 

17 ‘‘(D) in the case of new equipment that re18 places existing equipment at the end of the useful 

19 life of the existing equipment, consumption by 

20 new equipment of average efficiency of the same 

21 equipment type. 

22 ‘‘(5) DISTRIBUTED RENEWABLE GENERATION FA23 CILITY.—The term ‘distributed renewable generation 

24 facility’ means a facility that— 

25 ‘‘(A) generates renewable electricity; 

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

2 consumers at or near the facility site; and 

3 ‘‘(C) is no greater than— 

4 ‘‘(i) 2 megawatts in capacity; or 

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

6 case of a facility that is placed in service 

7 after the date of enactment of this section 

8 and generates electricity from a renewable 

9 energy resource other than by means of com10 bustion. 

11 ‘‘(6) ELECTRICITY SAVINGS.—The term ‘elec12 tricity savings’ means reductions in electricity con13 sumption, relative to business-as-usual projections, 

14 achieved through measures implemented after the date 

15 of enactment of this section, limited to— 

16 ‘‘(A) customer facility savings of electricity, 

17 adjusted to reflect any associated increase in fuel 

18 consumption at the facility; 

19 ‘‘(B) reductions in distribution system 

20 losses of electricity achieved by a retail electricity 

21 distributor, as compared to losses attributable to 

22 new or replacement distribution system equip23 ment of average efficiency; 

24 ‘‘(C) CHP savings; and 

25 ‘‘(D) fuel cell savings. 

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1 ‘‘(7) FEDERAL LAND.—The term ‘Federal land’ 

2 means land owned by the United States, other than 

3 land held in trust for an Indian or Indian tribe. 

4 ‘‘(8) FEDERAL RENEWABLE ELECTRICITY CRED5 IT.—The term ‘Federal renewable electricity credit’ 

6 means a credit, representing one megawatt hour of re7 newable electricity, issued pursuant to subsection (e). 

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

9 device that directly converts the chemical energy of a 

10 fuel and an oxidant into electricity by electrochemical 

11 processes occurring at separate electrodes in the de12 vice. 

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

14 savings’ means the electricity saved by a fuel cell that 

15 is installed after the date of enactment of this section, 

16 or by upgrading a fuel cell that commenced operation 

17 on or before the date of enactment of this section, as 

18 a result of the greater efficiency with which the fuel 

19 cell transforms fuel into electricity as compared with 

20 sources of electricity delivered through the grid, pro21 vided that— 

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

23 relating to efficiency and other operating charac24 teristics as the Commission may promulgate by 

25 regulation; and 

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1 ‘‘(B) the net sales of electricity from the fuel 

2 cell to customers not consuming the thermal out3 put from the fuel cell, if any, do not exceed 50 

4 percent of the total annual electricity generation 

5 by the fuel cell. 

6 ‘‘(11) HIGH CONSERVATION PRIORITY LAND.— 

7 The term ‘high conservation priority land’ means 

8 land that is not Federal land and is— 

9 ‘‘(A) globally or State ranked as critically 

10 imperiled or imperiled under a State Natural 

11 Heritage Program; or 

12 ‘‘(B) old-growth or late-successional forest, 

13 as identified by the office of the relevant State 

14 Forester or relevant State agency with regulatory 

15 jurisdiction over forestry activities. 

16 ‘‘(12) OTHER QUALIFYING ENERGY RESOURCE.— 

17 The term ‘other qualifying energy resource’ means 

18 any of the following: 

19 ‘‘(A) Landfill gas. 

20 ‘‘(B) Wastewater treatment gas. 

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

22 electricity at or near the mine mouth. 

23 ‘‘(D) Qualified waste-to-energy. 

24 ‘‘(13) QUALIFIED HYDROPOWER.—The term 

25 ‘qualified hydropower’ means— 

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1 ‘‘(A) energy produced from increased effi2 ciency achieved, or additions of capacity made, 

3 on or after January 1, 1992, at a hydroelectric 

4 facility that was placed in service before that 

5 date and does not include additional energy gen6 erated as a result of operational changes not di7 rectly associated with efficiency improvements or 

8 capacity additions; or 

9 ‘‘(B) energy produced from generating ca10 pacity added to a dam on or after January 1, 

11 1992, provided that the Commission certifies 

12 that— 

13 ‘‘(i) the dam was placed in service be14 fore the date of the enactment of this section 

15 and was operated for flood control, naviga16 tion, or water supply purposes and was not 

17 producing hydroelectric power prior to the 

18 addition of such capacity; 

19 ‘‘(ii) the hydroelectric project installed 

20 on the dam is licensed (or is exempt from 

21 licensing) by the Commission and is in 

22 compliance with the terms and conditions of 

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1 tion of environmental quality, including 

2 applicable fish passage requirements; and 

3 ‘‘(iii) the hydroelectric project installed 

4 on the dam is operated so that the water 

5 surface elevation at any given location and 

6 time that would have occurred in the ab7 sence of the hydroelectric project is main8 tained, subject to any license or exemption 

9 requirements that require changes in water 

10 surface elevation for the purpose of improv11 ing the environmental quality of the affected 

12 waterway. 

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

14 ‘qualified waste-to-energy’ means energy from the 

15 combustion of municipal solid waste or construction, 

16 demolition, or disaster debris, or from the gasification 

17 or pyrolization of such waste or debris and the com18 bustion of the resulting gas at the same facility, pro19 vided that— 

20 ‘‘(A) such term shall include only the energy 

21 derived from the non-fossil biogenic portion of 

22 such waste or debris; 

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

24 concurrence of the Administrator of the Environ25 mental Protection Agency, that the total lifecycle 

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1 greenhouse gas emissions attributable to the gen2 eration of electricity from such waste or debris 

3 are lower than those attributable to the likely al4 ternative method of disposing of such waste or 

5 debris; and 

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

7 generating electricity from such energy provides 

8 to the Commission, on an annual basis— 

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

10 in compliance with all applicable State and 

11 Federal environmental permits; 

12 ‘‘(ii) in the case of a facility that com13 menced operation before the date of enact14 ment of this section, a certification that the 

15 facility meets emissions standards promul16 gated under sections 112 or 129 of the Clean 

17 Air Act (42 U.S.C. 7412 or 7429) that 

18 apply as of the date of enactment of this 

19 section to new facilities within the relevant 

20 source category; and 

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

22 pyrolization, or gasification of municipal 

23 solid waste, a certification that each local 

24 government unit from which such waste 

25 originates operates, participates in the opermstockstill on PROD1PC66 with BILLS

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1 ation of, contracts for, or otherwise provides 

2 for, recycling services for its residents. 

3 ‘‘(15) RECYCLED ENERGY SAVINGS.—The term 

4 ‘recycled energy savings’ means a reduction in elec5 tricity consumption that results from a modification 

6 of an industrial or commercial system that com7 menced operation before the date of enactment of this 

8 section, in order to recapture electrical, mechanical, 

9 or thermal energy that would otherwise be wasted. 

10 ‘‘(16) RENEWABLE BIOMASS.—The term ‘renew11 able biomass’ means any of the following: 

12 ‘‘(A) Plant material, including waste mate13 rial, harvested or collected from actively man14 aged agricultural land that was in cultivation, 

15 cleared, or fallow and nonforested on January 1, 

16 2009. 

17 ‘‘(B) Plant material, including waste mate18 rial, harvested or collected from pastureland that 

19 was nonforested on January 1, 2009. 

20 ‘‘(C) Nonhazardous vegetative matter de21 rived from waste, including separated yard 

22 waste, landscape right-of-way trimmings, con23 struction and demolition debris or food waste 

24 (but not municipal solid waste, recyclable waste 

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1 paper, painted, treated or pressurized wood, or 

2 wood contaminated with plastic or metals). 

3 ‘‘(D) Animal waste or animal byproducts, 

4 including products of animal waste digesters. 

5 ‘‘(E) Algae. 

6 ‘‘(F) Trees, brush, slash, residues, or any 

7 other vegetative matter removed from within 600 

8 feet of any building, campground, or route des9 ignated for evacuation by a public official with 

10 responsibility for emergency preparedness, or 

11 from within 300 feet of a paved road, electric 

12 transmission line, utility tower, or water supply 

13 line. 

14 ‘‘(G) Residues from or byproducts of milled 

15 logs. 

16 ‘‘(H) Any of the following removed from for17 ested land that is not Federal and is not high 

18 conservation priority land: 

19 ‘‘(i) Trees, brush, slash, residues, inter20 planted energy crops, or any other vegeta21 tive matter removed from an actively man22 aged tree plantation established— 

23 ‘‘(I) prior to January 1, 2009; or 

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1 ‘‘(II) on land that, as of January 

2 1, 2009, was cultivated or fallow and 

3 non-forested. 

4 ‘‘(ii) Trees, logging residue, thinnings, 

5 cull trees, pulpwood, and brush removed 

6 from naturally-regenerated forests or other 

7 non-plantation forests, including for the 

8 purposes of hazardous fuel reduction or pre9 ventative treatment for reducing or con10 taining insect or disease infestation. 

11 ‘‘(iii) Logging residue, thinnings, cull 

12 trees, pulpwood, brush and species that are 

13 non-native and noxious, from stands that 

14 were planted and managed after January 1, 

15 2009, to restore or maintain native forest 

16 types. 

17 ‘‘(iv) Dead or severely damaged trees 

18 removed within 5 years of fire, blowdown, 

19 or other natural disaster, and badly infested 

20 trees. 

21 ‘‘(I) Materials, pre-commercial thinnings, 

22 or removed invasive species from National Forest 

23 System land and public lands (as defined in sec24 tion 103 of the Federal Land Policy and Man25 agement Act of 1976 (43 U.S.C. 1702)), includmstockstill on PROD1PC66 with BILLS

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1 ing those that are byproducts of preventive treat2 ments (such as trees, wood, brush, thinnings, 

3 chips, and slash), that are removed as part of a 

4 federally recognized timber sale, or that are re5 moved to reduce hazardous fuels, to reduce or 

6 contain disease or insect infestation, or to restore 

7 ecosystem health, and that are— 

8 ‘‘(i) not from components of the Na9 tional Wilderness Preservation System, Wil10 derness Study Areas, Inventoried Roadless 

11 Areas, old growth or mature forest stands, 

12 components of the National Landscape Con13 servation System, National Monuments, Na14 tional Conservation Areas, Designated 

15 Primitive Areas, or Wild and Scenic Rivers 

16 corridors; 

17 ‘‘(ii) harvested in environmentally sus18 tainable quantities, as determined by the 

19 appropriate Federal land manager; and 

20 ‘‘(iii) harvested in accordance with 

21 Federal and State law and applicable land 

22 management plans. 

23 ‘‘(17) RENEWABLE ELECTRICITY.—The term ‘re24 newable electricity’ means electricity generated (inmstockstill on PROD1PC66 with BILLS

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1 cluding by means of a fuel cell) from a renewable en2 ergy resource or other qualifying energy resources. 

3 ‘‘(18) RENEWABLE ENERGY RESOURCE.—The 

4 term ‘renewable energy resource’ means each of the 

5 following: 

6 ‘‘(A) Wind energy. 

7 ‘‘(B) Solar energy. 

8 ‘‘(C) Geothermal energy. 

9 ‘‘(D) Renewable biomass. 

10 ‘‘(E) Biogas derived exclusively from renew11 able biomass. 

12 ‘‘(F) Biofuels derived exclusively from re13 newable biomass. 

14 ‘‘(G) Qualified hydropower. 

15 ‘‘(H) Marine and hydrokinetic renewable 

16 energy, as that term is defined in section 632 of 

17 the Energy Independence and Security Act of 

18 2007 (42 U.S.C. 17211). 

19 ‘‘(19) RETAIL ELECTRIC SUPPLIER.— 

20 ‘‘(A) IN GENERAL.—The term ‘retail electric 

21 supplier’ means, for any given year, an electric 

22 utility that sold not less than 4,000,000 mega23 watt hours of electric energy to electric con24 sumers for purposes other than resale during the 

25 preceding calendar year. 

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

2 purposes of determining whether an electric util3 ity qualifies as a retail electric supplier under 

4 subparagraph (A)— 

5 ‘‘(i) the sales of any affiliate of an elec6 tric utility to electric consumers, other than 

7 sales to the affiliate’s lessees or tenants, for 

8 purposes other than resale shall be consid9 ered to be sales of such electric utility; and 

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

11 affiliate, lessee, or tenant of such electric 

12 utility shall not be treated as sales to elec13 tric consumers. 

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

15 paragraph, the term ‘affiliate’ when used in rela16 tion to a person, means another person that di17 rectly or indirectly owns or controls, is owned or 

18 controlled by, or is under common ownership or 

19 control with, such person, as determined under 

20 regulations promulgated by the Commission. 

21 ‘‘(20) RETAIL ELECTRIC SUPPLIER’S BASE

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

23 amount’ means the total amount of electric energy 

24 sold by the retail electric supplier, expressed in mega25 watt hours, to electric customers for purposes other 

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1 than resale during the relevant calendar year, exclud2 ing— 

3 ‘‘(A) electricity generated by a hydroelectric 

4 facility that is not qualified hydropower; 

5 ‘‘(B) electricity generated by a nuclear gen6 erating unit placed in service after the date of 

7 enactment of this section; and 

8 ‘‘(C) the proportion of electricity generated 

9 by a fossil-fueled generating unit that is equal to 

10 the proportion of greenhouse gases produced by 

11 such unit that are captured and geologically se12 questered. 

13 ‘‘(21) RETIRE AND RETIREMENT.—The terms ‘re14 tire’ and ‘retirement’ with respect to a Federal renew15 able electricity credit, means to disqualify such credit 

16 for any subsequent use under this section, regardless 

17 of whether the use is a sale, transfer, exchange, or sub18 mission in satisfaction of a compliance obligation. 

19 ‘‘(22) THIRD-PARTY EFFICIENCY PROVIDER.— 

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

21 retailer, building owner, energy service company, fi22 nancial institution or other commercial, industrial or 

23 nonprofit entity that is capable of providing elec24 tricity savings in accordance with the requirements of 

25 this section. 

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1 ‘‘(23) TOTAL ANNUAL ELECTRICITY SAVINGS.— 

2 The term ‘total annual electricity savings’ means elec3 tricity savings during a specified calendar year from 

4 measures that were placed into service since the date 

5 of the enactment of this section, taking into account 

6 verified measure lifetimes or verified annual savings 

7 attrition rates, as determined in accordance with such 

8 regulations as the Commission may promulgate and 

9 measured in megawatt hours. 

10 ‘‘(b) ANNUAL COMPLIANCE OBLIGATION.— 

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

12 2012 through 2039, not later than March 31 of the 

13 following calendar year, each retail electric supplier 

14 shall submit to the Commission an amount of Federal 

15 renewable electricity credits and demonstrated total 

16 annual electricity savings that, in the aggregate, is 

17 equal to such retail electric supplier’s annual com18 bined target as set forth in subsection (d), except as 

19 otherwise provided in subsection (g). 

20 ‘‘(2) DEMONSTRATION OF SAVINGS.—For pur21 poses of this subsection, submission of demonstrated 

22 total annual electricity savings means submission of 

23 a report that demonstrates, in accordance with the re24 quirements of subsection (f), the total annual elecmstockstill on PROD1PC66 with BILLS

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1 tricity savings achieved by the retail electric supplier 

2 within the relevant compliance year. 

3 ‘‘(3) RENEWABLE ELECTRICITY CREDITS POR4 TION.—Except as provided in paragraph (4), each re5 tail electric supplier must submit Federal renewable 

6 electricity credits equal to at least three quarters of 

7 the retail electric supplier’s annual combined target. 

8 ‘‘(4) STATE PETITION.— 

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

10 from the Governor of any State (including, for 

11 purposes of this paragraph, the Mayor of the 

12 District of Columbia), the Commission shall in13 crease, to not more than two fifths, the propor14 tion of the annual combined targets of retail elec15 tric suppliers located within such State that may 

16 be met through submission of demonstrated total 

17 annual electricity savings, provided that such in18 crease shall be effective only with regard to the 

19 portion of a retail electric supplier’s annual 

20 combined target that is attributable to electricity 

21 sales within such State. 

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

23 under this paragraph shall include an expla24 nation of the Governor’s rationale for deter25 mining, after consultation with the relevant 

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1 State regulatory authority and other retail elec2 tricity ratemaking authorities within the State, 

3 to make such request. The request shall specify 

4 the maximum proportion of annual combined 

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

6 met through demonstrated total annual elec7 tricity savings, and the period for which such 

8 proportion shall be effective. 

9 ‘‘(C) REVISION.—The Governor of any State 

10 may, after consultation with the relevant State 

11 regulatory authority and other retail electricity 

12 ratemaking authorities within the State, submit 

13 a written request for revocation or revision of a 

14 previous request submitted under this paragraph. 

15 The Commission shall grant such request, pro16 vided that— 

17 ‘‘(i) any revocation or revision shall 

18 not apply to the combined annual target for 

19 any year that is any earlier than 2 cal20 endar years after the calendar year in 

21 which such request is submitted, so as to 

22 provide retail electric suppliers with ade23 quate notice of such change; and 

24 ‘‘(ii) any revision shall meet the re25 quirements of subparagraph (A). 

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

2 1 year after the date of enactment of this section, the Com3 mission shall promulgate regulations to implement and en4 force the requirements of this section. In promulgating such 

5 regulations, the Commission shall, to the extent prac6 ticable— 

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

8 practices, of existing State renewable electricity and 

9 energy efficiency programs; 

10 ‘‘(2) rely upon existing and emerging State or 

11 regional tracking systems that issue and track non12 Federal renewable electricity credits; and 

13 ‘‘(3) cooperate with the States to facilitate co14 ordination between State and Federal renewable elec15 tricity and energy efficiency programs and to mini16 mize administrative burdens and costs to retail elec17 tric suppliers. 

18 ‘‘(d) ANNUAL COMPLIANCE REQUIREMENT.— 

19 ‘‘(1) ANNUAL COMBINED TARGETS.—For each of 

20 calendar years 2012 through 2039, a retail electric 

21 supplier’s annual combined target shall be the prod22 uct of— 

23 ‘‘(A) the required annual percentage for 

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

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

2 amount for such year. 

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

4 each of calendar years 2012 through 2039, the re5 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 

6 ‘‘(e) FEDERAL RENEWABLE ELECTRICITY CREDITS.— 

7 ‘‘(1) IN GENERAL.—The regulations promulgated 

8 under this section shall include provisions governing 

9 the issuance, tracking, and verification of Federal re10 newable electricity credits. Except as provided in 

11 paragraphs (2), (3), and (4) of this subsection, the 

12 Commission shall issue to each generator of renewable 

13 electricity, 1 Federal renewable electricity credit for 

14 each megawatt hour of renewable electricity generated 

15 by such generator after December 31, 2011. The Com16 mission shall assign a unique serial number to each 

17 Federal renewable electricity credit. 

18 ‘‘(2) GENERATION FROM CERTAIN STATE RENEW19 ABLE ELECTRICITY PROGRAMS.—Where renewable 

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1 electricity is generated with the support of payments 

2 from a retail electric supplier pursuant to a State re3 newable electricity program (whether through State 

4 alternative compliance payments or through pay5 ments to a State renewable electricity procurement 

6 fund or entity), the Commission shall issue Federal 

7 renewable electricity credits to such retail electric sup8 plier for the proportion of the relevant renewable elec9 tricity generation that is attributable to the retail 

10 electric supplier’s payments, as determined pursuant 

11 to regulations issued by the Commission. For any re12 maining portion of the relevant renewable electricity 

13 generation, the Commission shall issue Federal renew14 able electricity credits to the generator, as provided in 

15 paragraph (1), except that in no event shall more 

16 than 1 Federal renewable electricity credit be issued 

17 for the same megawatt hour of electricity. In deter18 mining how Federal renewable electricity credits will 

19 be apportioned among retail electric suppliers and 

20 generators in such circumstances, the Commission 

21 shall consider information and guidance furnished by 

22 the relevant State or States. 

23 ‘‘(3) CERTAIN POWER SALES CONTRACTS.—When 

24 a generator has sold renewable electricity to a retail 

25 electric supplier under a contract for power from a 

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1 facility placed in service before the date of enactment 

2 of this section, and the contract does not provide for 

3 the determination of ownership of the Federal renew4 able electricity credits associated with such genera5 tion, the Commission shall issue such Federal renew6 able electricity credits to the retail electric supplier 

7 for the duration of the contract. 

8 ‘‘(4) CREDIT MULTIPLIER FOR DISTRIBUTED RE9 NEWABLE GENERATION.— 

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

11 subparagraph (B), the Commission shall issue 3 

12 Federal renewable electricity credits for each 

13 megawatt hour of renewable electricity generated 

14 by a distributed renewable generation facility. 

15 ‘‘(B) ADJUSTMENT.—Except as provided in 

16 subparagraph (C), not later than January 1, 

17 2014, and not less frequently than every 4 years 

18 thereafter, the Commission shall review the effect 

19 of this paragraph and shall, as necessary, reduce 

20 the number of Federal renewable electricity cred21 its per megawatt hour issued under this para22 graph for any given energy source or technology, 

23 but not below 1, to ensure that such number is 

24 no higher than the Commission determines is 

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1 tion facilities using such source or technology 

2 cost competitive with other sources of renewable 

3 electricity generation. 

4 ‘‘(C) FACILITIES PLACED IN SERVICE AFTER

5 ENACTMENT.—For any distributed renewable 

6 generation facility placed in service after the 

7 date of enactment of this section, subparagraph 

8 (B) shall not apply for the first 10 years after 

9 the date on which the facility is placed in serv10 ice. For each year during such 10-year period, 

11 the Commission shall issue to the facility the 

12 same number of Federal renewable electricity 

13 credits per megawatt hour as are issued to that 

14 facility in the year in which such facility is 

15 placed in service. After such 10-year period, the 

16 Commission shall issue Federal renewable elec17 tricity credits to the facility in accordance with 

18 the current multiplier as determined pursuant to 

19 subparagraph (B). 

20 ‘‘(5) CREDITS BASED ON QUALIFIED HYDRO21 POWER.—For purposes of this subsection, the number 

22 of Federal renewable electricity credits issued for 

23 qualified hydropower shall be calculated— 

24 ‘‘(A) based solely on the increase in average 

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1 ficiency improvements or capacity additions de2 scribed in subsection (a)(13)(A); and 

3 ‘‘(B) using the same water flow information 

4 used to determine a historic average annual gen5 eration baseline for the hydroelectric facility, as 

6 certified by the Commission. 

7 ‘‘(6) GENERATION FROM MIXED RENEWABLE AND

8 NONRENEWABLE RESOURCES.—If electricity is gen9 erated using both a renewable energy resource or other 

10 qualifying energy resource and an energy source that 

11 is not a renewable energy resource or other qualifying 

12 energy resource (as, for example, in the case of co-fir13 ing of renewable biomass and fossil fuel), the Commis14 sion shall issue Federal renewable electricity credits 

15 based on the proportion of the electricity that is at16 tributable to the renewable energy resource or other 

17 qualifying energy resource. 

18 ‘‘(7) PROHIBITION AGAINST DOUBLE-COUNT19 ING.—Except as provided in paragraph (4) of this 

20 subsection, the Commission shall ensure that no more 

21 than 1 Federal renewable electricity credit will be 

22 issued for any megawatt hour of renewable electricity 

23 and that no Federal renewable electricity credit will 

24 be used more than once for compliance with this sec25 tion. 

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1 ‘‘(8) TRADING.—The lawful holder of a Federal 

2 renewable electricity credit may sell, exchange, trans3 fer, submit for compliance in accordance with sub4 section (b), or submit such credit for retirement by the 

5 Commission. 

6 ‘‘(9) BANKING.—A Federal renewable electricity 

7 credit may be submitted in satisfaction of the compli8 ance obligation set forth in subsection (b) for the com9 pliance year in which the credit was issued or for any 

10 of the 3 immediately subsequent compliance years. 

11 The Commission shall retire any Federal renewable 

12 electricity credit that has not been retired by April 2 

13 of the calendar year that is 3 years after the calendar 

14 year in which the credit was issued. 

15 ‘‘(10) RETIREMENT.—The Commission shall re16 tire a Federal renewable electricity credit imme17 diately upon submission by the lawful holder of such 

18 credit, whether in satisfaction of a compliance obliga19 tion under subsection (b) or on some other basis. 

20 ‘‘(f) ELECTRICITY SAVINGS.— 

21 ‘‘(1) STANDARDS FOR MEASUREMENT OF SAV22 INGS.—As part of the regulations promulgated under 

23 this section, the Commission shall prescribe standards 

24 and protocols for defining and measuring electricity 

25 savings and total annual electricity savings that can 

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1 be counted towards the compliance obligation set forth 

2 in subsection (b). Such protocols and standards shall, 

3 at minimum— 

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

5 and energy conservation measures that can be 

6 counted; 

7 ‘‘(B) require that energy consumption esti8 mates for customer facilities or portions of facili9 ties in the applicable base and current years be 

10 adjusted, as appropriate, to account for changes 

11 in weather, level of production, and building 

12 area; 

13 ‘‘(C) account for the useful life of measures; 

14 ‘‘(D) include deemed savings values for spe15 cific, commonly used measures; 

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

17 be estimated based on extrapolation from a rep18 resentative sample of participating customers; 

19 ‘‘(F) include procedures for counting CHP 

20 savings, recycled energy savings, and fuel cell 

21 savings; 

22 ‘‘(G) include procedures for counting elec23 tricity savings achieved by solar water heating 

24 and solar light pipe technology that has the camstockstill on PROD1PC66 with BILLS

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1 pability to provide measureable data on the 

2 amount of megawatt-hours displaced; 

3 ‘‘(H) avoid double-counting of savings used 

4 for compliance with this section, including sav5 ings that are transferred pursuant to paragraph 

6 (3); 

7 ‘‘(I) ensure that, except as provided in sub8 paragraph (K), the retail electric supplier claim9 ing the savings played a significant role in 

10 achieving the savings (including through the ac11 tivities of a designated agent of the supplier or 

12 through the purchase of transferred savings); 

13 ‘‘(J) include savings from programs admin14 istered by a retail electric supplier (or a retail 

15 electricity distributor that is not a retail electric 

16 supplier) that are funded by State, Federal, or 

17 other sources; 

18 ‘‘(K) in any State in which the State regu19 latory authority has designated 1 or more enti20 ties to administer electric ratepayer-funded effi21 ciency programs approved by such State regu22 latory authority, provide that electricity savings 

23 achieved through such programs shall be distrib24 uted equitably among retail electric suppliers in 

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1 accordance with the direction of the relevant 

2 State regulatory authority; and 

3 ‘‘(L) exclude savings achieved as a result of 

4 compliance with mandatory appliance and 

5 equipment efficiency standards or building codes. 

6 ‘‘(2) STANDARDS FOR THIRD-PARTY

7 VERIFICATION OF SAVINGS.—The regulations promul8 gated under this section shall establish procedures and 

9 standards requiring third-party verification of all re10 ported electricity savings, including requirements for 

11 accreditation of third-party verifiers to ensure that 

12 such verifiers are professionally qualified and have no 

13 conflicts of interest. 

14 ‘‘(3) TRANSFERS OF SAVINGS.— 

15 ‘‘(A) BILATERAL CONTRACTS FOR SAVINGS

16 TRANSFERS.—Subject to the limitations of this 

17 paragraph, a retail electric supplier may use 

18 electricity savings transferred, pursuant to a bi19 lateral contract, from another retail electric sup20 plier, an owner of an electric distribution facil21 ity that is not a retail electric supplier, a State, 

22 or a third-party efficiency provider to meet the 

23 applicable compliance obligation under sub24 section (b). 

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1 ‘‘(B) REQUIREMENTS.—Electricity savings 

2 transferred and used for compliance pursuant to 

3 this paragraph shall be— 

4 ‘‘(i) measured and verified in accord5 ance with the procedures specified under 

6 this subsection; 

7 ‘‘(ii) reported in accordance with para8 graph (4) of this subsection; and 

9 ‘‘(iii) achieved within the same State 

10 as is served by the retail electric supplier. 

11 ‘‘(C) REGULATORY APPROVAL.—Nothing in 

12 this paragraph shall limit or affect the authority 

13 of a State regulatory authority to require a re14 tail electric supplier that is regulated by such 

15 authority to obtain such authority’s authoriza16 tion or approval of a contract for transfer of sav17 ings under this paragraph. 

18 ‘‘(4) REPORTING SAVINGS.— 

19 ‘‘(A) REQUIREMENTS.—The regulations 

20 promulgated under this section shall establish re21 quirements governing the submission of reports 

22 to demonstrate, in accordance with the protocols 

23 and standards for measurement and third-party 

24 verification established under this subsection, the 

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1 total annual electricity savings achieved by a re2 tail electric supplier within the relevant year. 

3 ‘‘(B) REVIEW AND APPROVAL.—The Com4 mission shall review each report submitted to the 

5 Commission by a retail electric supplier and 

6 shall exclude any electricity savings that have 

7 not been adequately demonstrated in accordance 

8 with the requirements of this subsection. 

9 ‘‘(5) STATE ADMINISTRATION.— 

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

11 receipt of an application from the Governor of a 

12 State (including, for purposes of this subsection, 

13 the Mayor of the District of Columbia), the Com14 mission may delegate to the State the authority 

15 to review and verify reported electricity savings 

16 for purposes of determining demonstrated total 

17 annual electricity savings that may be counted 

18 towards a retail electric supplier’s compliance 

19 obligation under subsection (b). The Commission 

20 shall make a substantive determination approv21 ing or disapproving a State application under 

22 this subparagraph, after notice and comment, 

23 within 180 days of receipt of a complete applica24 tion. 

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1 ‘‘(B) ALTERNATIVE MEASUREMENT AND

2 VERIFICATION PROCEDURES AND STANDARDS.— 

3 As part of an application submitted under sub4 paragraph (A), a State may request to use alter5 native measurement and verification procedures 

6 and standards to those specified in paragraphs 

7 (1) and (2), provided the State demonstrates that 

8 such alternative procedures and standards pro9 vide a level of accuracy of measurement and 

10 verification at least equivalent to the Federal 

11 procedures and standards promulgated under 

12 paragraphs (1) and (2). 

13 ‘‘(C) REVIEW OF STATE IMPLEMENTA14 TION.—The Commission shall, not less frequently 

15 than once every 4 years, review each State’s im16 plementation of delegated authority under this 

17 paragraph to ensure conformance with the re18 quirements of this section. The Commission may, 

19 at any time, revoke the delegation of authority 

20 under this section upon a finding that the State 

21 is not implementing its delegated responsibilities 

22 in conformity with this paragraph. As a condi23 tion of maintaining its delegated authority 

24 under this paragraph, the Commission may re25 quire a State to submit a revised application 

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1 under subparagraph (A) if the Commission 

2 has— 

3 ‘‘(i) promulgated new or substantially 

4 revised measurement and verification proce5 dures and standards under this subsection; 

6 or 

7 ‘‘(ii) otherwise substantially revised the 

8 program established under this section. 

9 ‘‘(g) ALTERNATIVE COMPLIANCE PAYMENTS.— 

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

11 may satisfy the requirements of subsection (b) in 

12 whole or in part by submitting in accordance with 

13 this subsection, in lieu of each Federal renewable elec14 tricity credit or megawatt hour of demonstrated total 

15 annual electricity savings that would otherwise be 

16 due, a payment equal to $25, adjusted for inflation 

17 on January 1 of each year following calendar year 

18 2009, in accordance with such regulations as the 

19 Commission may promulgate. 

20 ‘‘(2) PAYMENT TO STATE FUNDS.—Except as oth21 erwise provided in this paragraph, payments made 

22 under this subsection shall be made directly to the 

23 State or States in which the retail electric supplier is 

24 located, in proportion to the portion of the retail elec25 tric supplier’s base amount that is sold within each 

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1 relevant State, provided that such payments are de2 posited directly into a fund in the State treasury es3 tablished for this purpose and that the State uses such 

4 funds in accordance with paragraphs (3) and (4). If 

5 the Commission determines at any time that a State 

6 is in substantial noncompliance with paragraph (3) 

7 or (4), the Commission shall direct that any future 

8 alternative compliance payments that would other9 wise be paid to such State under this subsection shall 

10 instead be paid to the Commission and deposited in 

11 the United States Treasury. 

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

13 continued receipt of alternative compliance payments 

14 pursuant to this subsection, a State shall use such 

15 payments exclusively for the purposes of— 

16 ‘‘(A) deploying technologies that generate 

17 electricity from renewable energy resources; or 

18 ‘‘(B) implementing cost-effective energy effi19 ciency programs to achieve electricity savings. 

20 ‘‘(4) REPORTING.—As a condition of continued 

21 receipt of alternative compliance payments pursuant 

22 to this subsection, a State shall, within 12 months of 

23 receipt of any such payments and at 12-month inter24 vals thereafter until such payments are expended, pro25 vide a report to the Commission, in accordance with 

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1 such regulations as the Commission may prescribe, 

2 giving a full accounting of the use of such payments, 

3 including a detailed description of the activities fund4 ed thereby. 

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

6 may require any retail electric supplier, renewable elec7 tricity generator, or such other entities as the Commission 

8 deems appropriate, to provide any information the Com9 mission determines appropriate to carry out this section. 

10 Failure to submit such information or submission of false 

11 or misleading information under this subsection shall be a 

12 violation of this section. 

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

14 ‘‘(1) FAILURE TO SUBMIT CREDITS OR DEM15 ONSTRATE SAVINGS.—If any person fails to comply 

16 with the requirements of subsection (b) or (g), such 

17 person shall be liable to pay to the Commission a 

18 civil penalty equal to the product of— 

19 ‘‘(A) double the alternative compliance pay20 ment calculated under subsection (g)(1), and 

21 ‘‘(B) the aggregate quantity of Federal re22 newable electricity credits, total annual elec23 tricity savings, or equivalent alternative compli24 ance payments that the person failed to submit 

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1 in violation of the requirements of subsections (b) 

2 and (g). 

3 ‘‘(2) ENFORCEMENT.—The Commission shall as4 sess a civil penalty under paragraph (1) in accord5 ance with the procedures described in section 31(d) of 

6 the Federal Power Act (16 U.S.C. 823b(d)). 

7 ‘‘(3) VIOLATION OF REQUIREMENT OF REGULA8 TIONS OR ORDERS.—Any person who violates, or fails 

9 or refuses to comply with, any requirement of a regu10 lation promulgated or order issued under this section 

11 shall be subject to a civil penalty under section 

12 316A(b) of the Federal Power Act (16 U.S.C. 825o– 

13 1). Such penalty shall be assessed by the Commission 

14 in the same manner as in the case of a violation re15 ferred to in section 316A(b) of such Act. 

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

17 final action taken by the Commission under this section, 

18 other than the assessment of a civil penalty under sub19 section (i), may use the procedures for review described in 

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

21 purposes of this paragraph, references to an order in section 

22 313 of such Act shall be deemed to refer also to all other 

23 final actions of the Commission under this section other 

24 than the assessment of a civil penalty under subsection (i). 

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

2 shall— 

3 ‘‘(1) diminish or qualify any authority of a 

4 State or political subdivision of a State to— 

5 ‘‘(A) adopt or enforce any law or regulation 

6 respecting renewable electricity or energy effi7 ciency, including any law or regulation estab8 lishing requirements more stringent than those 

9 established by this section, provided that no such 

10 law or regulation may relieve any person of any 

11 requirement otherwise applicable under this sec12 tion; or 

13 ‘‘(B) regulate the acquisition and disposi14 tion of Federal renewable electricity credits by 

15 retail electric suppliers within the jurisdiction of 

16 such State or political subdivision, including the 

17 authority to require such retail electric supplier 

18 to acquire and submit to the Secretary for retire19 ment Federal renewable electricity credits in ex20 cess of those submitted 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 contents 

4 set forth in section 1(b) of the Public Utility Regulatory 

5 Policies Act of 1978 (16 U.S.C. 2601 and following) is 

6 amended by inserting after the item relating to section 609 

7 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 ADOPT

13 RENEWABLE ENERGY INCENTIVES.—Notwithstanding any 

14 other provision of this Act or the Federal Power Act, a State 

15 legislature or regulatory authority may set the rates for a 

16 sale of electric energy by a facility generating electric en17 ergy from renewable energy sources pursuant to a State18 approved production incentive program under which the fa19 cility voluntarily sells electric energy. For purposes of this 

20 subsection, ‘State-approved production incentive program’ 

21 means a requirement imposed pursuant to State law, or 

22 by a State regulatory authority acting within its authority 

23 under State law, that an electric utility purchase renewable 

24 energy (as defined in section 609 of this Act) at a specified 

25 rate.’’. 

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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 date 

5 of enactment of this Act, the Administrator, in consultation 

6 with the Secretary of Energy and the heads of such other 

7 relevant Federal agencies as the President may designate, 

8 shall submit to Congress a report setting forth a unified 

9 and comprehensive strategy to address the key legal, regu10 latory and other barriers to the commercial-scale deploy11 ment of carbon capture and sequestration. 

12 (b) BARRIERS.— The report under this section shall— 

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

14 gaps and barriers that could be addressed by a Fed15 eral agency using existing statutory authority, those, 

16 if any, that require Federal legislation, and those that 

17 would be best addressed at the State or regional level; 

18 (2) identify regulatory implementation chal19 lenges, including those related to approval of State 

20 programs and delegation of authority for permitting; 

21 and 

22 (3) recommend rulemakings, Federal legislation, 

23 or other actions that should be taken to further evalu24 ate and address such barriers. 

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1 SEC. 112. REGULATIONS FOR GEOLOGIC SEQUESTRATION 

2 SITES. 

3 (a) COORDINATED CERTIFICATION AND PERMITTING

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

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

6 812 (as added by section 116 of this Act) the following: 

7 ‘‘SEC. 813. GEOLOGIC SEQUESTRATION SITES. 

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

9 shall establish a coordinated approach to certifying and 

10 permitting geologic sequestration, taking into consideration 

11 all relevant statutory authorities. In establishing such ap12 proach, the Administrator shall— 

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

14 with, the requirements of section 1421 of the Safe 

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

16 section 112(b) of the American Clean Energy and Se17 curity Act of 2009, including the rulemaking for geo18 logic sequestration wells described at 73 Fed. Reg. 

19 43491-541 (July 25, 2008); and 

20 ‘‘(2) to the extent practicable, reduce the burden 

21 on certified entities and implementing authorities. 

22 ‘‘(b) REGULATIONS.—Not later than 2 years after the 

23 date of enactment of this title, the Administrator shall pro24 mulgate regulations to protect human health and the envi25 ronment by minimizing the risk of escape to the atmosphere 

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1 of carbon dioxide injected for purposes of geologic sequestra2 tion. 

3 ‘‘(c) REQUIREMENTS.—The regulations under sub4 section (b) shall include— 

5 ‘‘(1) a process to obtain certification for geologic 

6 sequestration under this section; and 

7 ‘‘(2) requirements for— 

8 ‘‘(A) monitoring, record keeping, and re9 porting for emissions associated with injection 

10 into, and escape from, geologic sequestration 

11 sites, taking into account any requirements or 

12 protocols developed under section 713; 

13 ‘‘(B) public participation in the certifi14 cation process that maximizes transparency; 

15 ‘‘(C) the sharing of data between States, In16 dian tribes, and the Environmental Protection 

17 Agency; and 

18 ‘‘(D) other elements or safeguards necessary 

19 to achieve the purpose set forth in subsection (b). 

20 ‘‘(d) REPORT.—Not later than 2 years after the pro21 mulgation of regulations under subsection (b), and at 3- 

22 year intervals thereafter, the Administrator shall deliver to 

23 the Committee on Energy and Commerce of the House of 

24 Representatives and the Committee on Environment and 

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1 tion in the United States, and, to the extent relevant, other 

2 countries in North America. Such report shall include— 

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

4 atmosphere, if any, and performance of active and 

5 closed geologic sequestration sites, including those 

6 where enhanced hydrocarbon recovery operations 

7 occur; 

8 ‘‘(2) an evaluation of the performance of relevant 

9 Federal environmental regulations and programs in 

10 ensuring environmentally protective geologic seques11 tration practices; 

12 ‘‘(3) recommendations on how such programs 

13 and regulations should be improved or made more ef14 fective; and 

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

16 (b) SAFE DRINKING WATER ACT STANDARDS.—Sec17 tion 1421 of the Safe Drinking Water Act (42 U.S.C. 300h) 

18 is amended by inserting after subsection (d) the following: 

19 ‘‘(e) CARBON DIOXIDE GEOLOGIC SEQUESTRATION

20 WELLS.— 

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

22 the date of enactment of this subsection, the Adminis23 trator shall promulgate regulations under subsection 

24 (a) for carbon dioxide geologic sequestration wells. 

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1 ‘‘(2) FINANCIAL RESPONSIBILITY.—The regula2 tions referred to in paragraph (1) shall include re3 quirements for maintaining evidence of financial re4 sponsibility, including financial responsibility for 

5 emergency and remedial response, well plugging, site 

6 closure, and post-injection site care. Financial re7 sponsibility may be established for carbon dioxide 

8 geologic sequestration wells in accordance with regu9 lations promulgated by the Administrator by any one, 

10 or any combination, of the following: insurance, guar11 antee, trust, standby trust, surety bond, letter of cred12 it, qualification as a self-insurer, or any other method 

13 satisfactory to the Administrator.’’. 

14 SEC. 113. STUDIES AND REPORTS. 

15 (a) STUDY OF LEGAL FRAMEWORK FOR GEOLOGIC SE16 QUESTRATION SITES.— 

17 (1) ESTABLISHMENT OF TASK FORCE.—As soon 

18 as practicable, but not later than 6 months after the 

19 date of enactment of this Act, the Administrator shall 

20 establish a task force to be composed of an equal num21 ber of subject matter experts, nongovernmental orga22 nizations with expertise in environmental policy, aca23 demic experts with expertise in environmental law, 

24 State officials with environmental expertise, repmstockstill on PROD1PC66 with BILLS

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1 resentatives of State Attorneys General, and members 

2 of the private sector, to conduct a study of— 

3 (A) existing Federal environmental statutes, 

4 State environmental statutes, and State common 

5 law that apply to geologic sequestration sites for 

6 carbon dioxide, including the ability of such laws 

7 to serve as risk management tools; 

8 (B) the existing statutory framework, in9 cluding Federal and State laws, that apply to 

10 harm and damage to the environment or public 

11 health at closed sites where carbon dioxide injec12 tion has been used for enhanced hydrocarbon re13 covery; 

14 (C) the statutory framework, environmental 

15 health and safety considerations, implementation 

16 issues, and financial implications of potential 

17 models for Federal, State, or private sector as18 sumption of liabilities and financial responsibil19 ities with respect to closed geologic sequestration 

20 sites; 

21 (D) private sector mechanisms, including 

22 insurance and bonding, that may be available to 

23 manage environmental, health and safety risk 

24 from closed geologic sequestration sites; and 

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1 (E) the subsurface mineral rights, water 

2 rights, or property rights issues associated with 

3 geologic sequestration of carbon dioxide. 

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

5 date of enactment of this Act, the task force estab6 lished under paragraph (1) shall submit to Congress 

7 a report describing the results of the study conducted 

8 under that paragraph including any consensus rec9 ommendations of the task force. 

10 (b) ENVIRONMENTAL STATUTES.— 

11 (1) STUDY.—The Administrator shall conduct a 

12 study examining how, and under what circumstances, 

13 the environmental statutes for which the Environ14 mental Protection Agency has responsibility would 

15 apply to carbon dioxide injection and geologic seques16 tration activities. 

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

18 date of enactment of this Act, the Administrator shall 

19 submit to Congress a report describing the results of 

20 the study conducted under paragraph (1). 

21 SEC. 114. CARBON CAPTURE AND SEQUESTRATION DEM22 ONSTRATION AND EARLY DEPLOYMENT PRO23 GRAM. 

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

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

2 the Secretary of Energy. 

3 (2) DISTRIBUTION UTILITY.—The term ‘‘dis4 tribution utility’’ means an entity that distributes 

5 electricity directly to retail consumers under a legal, 

6 regulatory, or contractual obligation to do so. 

7 (3) ELECTRIC UTILITY.—The term ‘‘electric util8 ity’’ has the meaning provided by section 3(22) of the 

9 Federal Power Act (16 U.S.C. 796(22)). 

10 (4) FOSSIL FUEL-BASED ELECTRICITY.—The 

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

12 that is produced from the combustion of fossil fuels. 

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

14 coal, petroleum, natural gas or any derivative of coal, 

15 petroleum, or natural gas. 

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

17 means the Carbon Storage Research Corporation es18 tablished in accordance with this section. 

19 (7) QUALIFIED INDUSTRY ORGANIZATION.—The 

20 term ‘‘qualified industry organization’’ means the 

21 Edison Electric Institute, the American Public Power 

22 Association, the National Rural Electric Cooperative 

23 Association, a successor organization of such organi24 zations, or a group of owners or operators of distribu25 tion utilities delivering fossil fuel-based electricity 

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1 who collectively represent at least 20 percent of the 

2 volume of fossil fuel-based electricity delivered by dis3 tribution utilities to consumers in the United States. 

4 (8) RETAIL CONSUMER.—The term ‘‘retail con5 sumer’’ means an end-user of electricity. 

6 (b) CARBON STORAGE RESEARCH CORPORATION.— 

7 (1) ESTABLISHMENT.— 

8 (A) REFERENDUM.—Qualified industry or9 ganizations may conduct, at their own expense, 

10 a referendum among the owners or operators of 

11 distribution utilities delivering fossil fuel-based 

12 electricity for the creation of a Carbon Storage 

13 Research Corporation. Such referendum shall be 

14 conducted by an independent auditing firm 

15 agreed to by the qualified industry organiza16 tions. Voting rights in such referendum shall be 

17 based on the quantity of fossil fuel-based elec18 tricity delivered to consumers in the previous 

19 calendar year or other representative period as 

20 determined by the Secretary pursuant to sub21 section (f). Upon approval of those persons rep22 resenting two-thirds of the total quantity of fossil 

23 fuel-based electricity delivered to retail con24 sumers, the Corporation shall be established un25 less opposed by the State regulatory authorities 

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1 pursuant to subparagraph (B). All distribution 

2 utilities voting in the referendum shall certify to 

3 the independent auditing firm the quantity of 

4 fossil fuel-based electricity represented by their 

5 vote. 

6 (B) STATE REGULATORY AUTHORITIES.— 

7 Upon its own motion or the petition of a quali8 fied industry organization, each State regulatory 

9 authority shall consider its support or opposition 

10 to the creation of the Corporation under sub11 paragraph (A). State regulatory authorities may 

12 notify the independent auditing firm referred to 

13 in subparagraph (A) of their views on the cre14 ation of the Corporation within 180 days after 

15 the date of enactment of this Act. If 40 percent 

16 or more of the State regulatory authorities sub17 mit to the independent auditing firm written no18 tices of opposition, the Corporation shall not be 

19 established notwithstanding the approval of the 

20 qualified industry organizations as provided in 

21 subparagraph (A). 

22 (2) TERMINATION.—The Corporation shall be au23 thorized to collect assessments and conduct operations 

24 pursuant to this section for a 10-year period from the 

25 date 6 months after the date of enactment of this Act. 

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1 After such 10-year period, the Corporation is no 

2 longer authorized to collect assessments and shall be 

3 dissolved on the date 15 years after such date of en4 actment, unless the period is extended by an Act of 

5 Congress. 

6 (3) GOVERNANCE.—The Corporation shall oper7 ate as a division or affiliate of the Electric Power Re8 search Institute (referred to in this section as 

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

10 than 15 voting members responsible for its operations, 

11 including compliance with this section. EPRI, in con12 sultation with the Edison Electric Institute, the 

13 American Public Power Association and the National 

14 Rural Electric Cooperative Association shall appoint 

15 the Board members under clauses (i), (ii), and (iii) 

16 of subparagraph (A) from among candidates rec17 ommended by those organizations. At least a majority 

18 of the Board members appointed by EPRI shall be 

19 representatives of distribution utilities subject to as20 sessments under subsection (d). 

21 (A) MEMBERS.—The Board shall include at 

22 least one representative of each of the following: 

23 (i) Investor-owned utilities. 

24 (ii) Utilities owned by a State agency 

25 or a municipality. 

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1 (iii) Rural electric cooperatives. 

2 (iv) Fossil fuel producers. 

3 (v) Nonprofit environmental organiza4 tions. 

5 (vi) Independent generators or whole6 sale power providers. 

7 (vii) Consumer groups. 

8 (B) NONVOTING MEMBERS.—The Board 

9 shall also include as additional nonvoting Mem10 bers the Secretary of Energy or his designee and 

11 2 representatives of State regulatory authorities 

12 as defined in section 3(17) of the Public Utility 

13 Regulatory Policies Act of 1978 (16 U.S.C. 

14 2602(17)), each designated by the National Asso15 ciation of State Regulatory Utility Commis16 sioners from States that are not within the same 

17 transmission interconnection. 

18 (4) COMPENSATION.—Corporation Board mem19 bers shall receive no compensation for their services, 

20 nor shall Corporation Board members be reimbursed 

21 for expenses relating to their service. 

22 (5) TERMS.—Corporation Board members shall 

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

24 2 full consecutive terms. Members filling unexpired 

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1 tive years. Former members of the Corporation Board 

2 may be reappointed to the Corporation Board if they 

3 have not been members for a period of 2 years. Initial 

4 appointments to the Corporation Board shall be for 

5 terms of 1, 2, 3, and 4 years, staggered to provide for 

6 the selection of 3 members each year. 

7 (6) STATUS OF CORPORATION.—The Corporation 

8 shall not be considered to be an agency, department, 

9 or instrumentality of the United States, and no offi10 cer or director or employee of the Corporation shall 

11 be considered to be an officer or employee of the 

12 United States Government, for purposes of title 5 or 

13 title 31 of the United States Code, or for any other 

14 purpose, and no funds of the Corporation shall be 

15 treated as public money for purposes of chapter 33 of 

16 title 31, United States Code, or for any other purpose. 

17 (c) FUNCTIONS AND ADMINISTRATION OF THE COR18 PORATION.— 

19 (1) IN GENERAL.—The Corporation shall estab20 lish and administer a program to accelerate the com21 mercial availability of carbon dioxide capture and 

22 storage technologies and methods, including tech23 nologies which capture and store, or capture and con24 vert, carbon dioxide. Under such program competi25 tively awarded grants, contracts, and financial assistmstockstill on PROD1PC66 with BILLS

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1 ance shall be provided and entered into with eligible 

2 entities. Except as provided in paragraph (8), the 

3 Corporation shall use all funds derived from assess4 ments under subsection (d) to issue grants and con5 tracts to eligible entities. 

6 (2) PURPOSE.—The purposes of the grants, con7 tracts, and assistance under this subsection shall be to 

8 support commercial-scale demonstrations of carbon 

9 capture or storage technology projects capable of ad10 vancing the technologies to commercial readiness. 

11 Such projects should encompass a range of different 

12 coal and other fossil fuel varieties, be geographically 

13 diverse, involve diverse storage media, and employ 

14 capture or storage, or capture and conversion, tech15 nologies potentially suitable either for new or for ret16 rofit applications. The Corporation shall seek, to the 

17 extent feasible, to support at least 5 commercial-scale 

18 demonstration projects integrating carbon capture 

19 and sequestration or conversion technologies. 

20 (3) ELIGIBLE ENTITIES.—Entities eligible for 

21 grants, contracts or assistance under this subsection 

22 may include distribution utilities, electric utilities 

23 and other private entities, academic institutions, na24 tional laboratories, Federal research agencies, State 

25 research agencies, nonprofit organizations, or consormstockstill on PROD1PC66 with BILLS

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1 tiums of 2 or more entities. Pilot-scale and similar 

2 small-scale projects are not eligible for support by the 

3 Corporation. Owners or developers of projects sup4 ported by the Corporation shall, where appropriate, 

5 share in the costs of such projects. 

6 (4) GRANTS FOR EARLY MOVERS.—Fifty percent 

7 of the funds raised under this section shall be pro8 vided in the form of grants to electric utilities that 

9 had, prior to the award of any grant under this sec10 tion, committed resources to deploy a large scale elec11 tricity generation unit with integrated carbon capture 

12 and sequestration or conversion applied to a substan13 tial portion of the unit’s carbon dioxide emissions.

14 Grant funds shall be provided to defray costs incurred 

15 by such electricity utilities for at least 5 such elec16 tricity generation units. 

17 (5) ADMINISTRATION.—The members of the 

18 Board of Directors of the Corporation shall elect a 

19 Chairman and other officers as necessary, may estab20 lish committees and subcommittees of the Corpora21 tion, and shall adopt rules and bylaws for the conduct 

22 of business and the implementation of this section. 

23 The Board shall appoint an Executive Director and 

24 professional support staff who may be employees of 

25 the Electric Power Research Institute (EPRI). After 

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1 consultation with the Technical Advisory Committee 

2 established under subsection (j), the Secretary, and 

3 the Director of the National Energy Technology Lab4 oratory to obtain advice and recommendations on 

5 plans, programs, and project selection criteria, the 

6 Board shall establish priorities for grants, contracts, 

7 and assistance; publish requests for proposals for 

8 grants, contracts, and assistance; and award grants, 

9 contracts, and assistance competitively, on the basis 

10 of merit, after the establishment of procedures that 

11 provide for scientific peer review by the Technical Ad12 visory Committee. The Board shall give preference to 

13 applications that reflect the best overall value and 

14 prospect for achieving the purposes of the section, such 

15 as those which demonstrate an integrated approach 

16 for capture and storage or capture and conversion 

17 technologies. The Board members shall not participate 

18 in making grants or awards to entities with whom 

19 they are affiliated. 

20 (6) USES OF GRANTS, CONTRACTS, AND ASSIST21 ANCE.—A grant, contract, or other assistance pro22 vided under this subsection may be used to purchase 

23 carbon dioxide when needed to conduct tests of carbon 

24 dioxide storage sites, in the case of established projects 

25 that are storing carbon dioxide emissions, or for other 

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1 purposes consistent with the purposes of this section. 

2 The Corporation shall make publicly available at no 

3 cost information learned as a result of projects which 

4 it supports financially. 

5 (7) INTELLECTUAL PROPERTY.—The Board shall 

6 establish policies regarding the ownership of intellec7 tual property developed as a result of Corporation 

8 grants and other forms of technology support. Such 

9 policies shall encourage individual ingenuity and in10 vention. 

11 (8) ADMINISTRATIVE EXPENSES.—Up to 5 per12 cent of the funds collected in any fiscal year under 

13 subsection (d) may be used for the administrative ex14 penses of operating the Corporation (not including 

15 costs incurred in the determination and collection of 

16 the assessments pursuant to subsection (d)). 

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

18 each year, the Corporation, after consulting with the 

19 Technical Advisory Committee and the Secretary and 

20 the Director of the Department’s National Energy 

21 Technology Laboratory and other interested parties to 

22 obtain advice and recommendations, shall publish for 

23 public review and comment its proposed plans, pro24 grams, project selection criteria, and projects to be 

25 funded by the Corporation for the next calendar year. 

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1 The Corporation shall also publish for public review 

2 and comment a budget plan for the next calendar 

3 year, including the probable costs of all programs, 

4 projects, and contracts and a recommended rate of as5 sessment sufficient to cover such costs. The Secretary 

6 may recommend programs and activities the Sec7 retary considers appropriate. The Corporation shall 

8 include in the first publication it issues under this 

9 paragraph a strategic plan or roadmap for the 

10 achievement of the purposes of the Corporation, as set 

11 forth in paragraph (2). 

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

13 keep minutes, books, and records that clearly reflect 

14 all of the acts and transactions of the Corporation 

15 and make public such information. The books of the 

16 Corporation shall be audited by a certified public ac17 countant at least once each fiscal year and at such 

18 other times as the Corporation may designate. Copies 

19 of each audit shall be provided to the Congress, all 

20 Corporation board members, all qualified industry or21 ganizations, each State regulatory authority and, 

22 upon request, to other members of the industry. If the 

23 audit determines that the Corporation’s practices fail 

24 to meet generally accepted accounting principles the 

25 assessment collection authority of the Corporation 

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1 under subsection (d) shall be suspended until a cer2 tified public accountant renders a subsequent opinion 

3 that the failure has been corrected. The Corporation 

4 shall make its books and records available for review 

5 by the Secretary or the Comptroller General of the 

6 United States. 

7 (11) PUBLIC ACCESS.—The Corporation Board’s 

8 meetings shall be open to the public and shall occur 

9 after at least 30 days advance public notice. Meetings 

10 of the Board of Directors may be closed to the public 

11 where the agenda of such meetings includes only con12 fidential matters pertaining to project selection, the 

13 award of grants or contracts, personnel matters, or 

14 the receipt of legal advice. The minutes of all meetings 

15 of the Corporation shall be made available to and 

16 readily accessible by the public. 

17 (12) ANNUAL REPORT.—Each year the Corpora18 tion shall prepare and make publicly available a re19 port which includes an identification and description 

20 of all programs and projects undertaken by the Cor21 poration during the previous year. The report shall 

22 also detail the allocation or planned allocation of Cor23 poration resources for each such program and project. 

24 The Corporation shall provide its annual report to 

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1 thority, and upon request to the public. The Secretary 

2 shall, not less than 60 days after receiving such re3 port, provide to the President and Congress a report 

4 assessing the progress of the Corporation in meeting 

5 the objectives of this section. 

6 (d) ASSESSMENTS.— 

7 (1) AMOUNT.—(A) In all calendar years fol8 lowing its establishment, the Corporation shall collect 

9 an assessment on distribution utilities for all fossil 

10 fuel-based electricity delivered directly to retail con11 sumers (as determined under subsection (f)). The as12 sessments shall reflect the relative carbon dioxide 

13 emission rates of different fossil fuel-based electricity, 

14 and initially shall be not less than the following 

15 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. 

16 (B) The Corporation is authorized to adjust the 

17 assessments on fossil fuel-based electricity to reflect 

18 changes in the expected quantities of such electricity 

19 from different fuel types, such that the assessments 

20 generate not less than $1.0 billion and not more than 

21 $1.1 billion annually. The Corporation is authorized 

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1 to supplement assessments through additional finan2 cial commitments. 

3 (2) INVESTMENT OF FUNDS.—Pending disburse4 ment pursuant to a program, plan, or project, the 

5 Corporation may invest funds collected through as6 sessments under this subsection, and any other funds 

7 received by the Corporation, only in obligations of the 

8 United States or any agency thereof, in general obli9 gations of any State or any political subdivision 

10 thereof, in any interest-bearing account or certificate 

11 of deposit of a bank that is a member of the Federal 

12 Reserve System, or in obligations fully guaranteed as 

13 to principal and interest by the United States. 

14 (3) REVERSION OF UNUSED FUNDS.—If the Cor15 poration does not disburse, dedicate or assign 75 per16 cent or more of the available proceeds of the assessed 

17 fees in any calendar year 7 or more years following 

18 its establishment, due to an absence of qualified 

19 projects or similar circumstances, it shall reimburse 

20 the remaining undedicated or unassigned balance of 

21 such fees, less administrative and other expenses au22 thorized by this section, to the distribution utilities 

23 upon which such fees were assessed, in proportion to 

24 their collected assessments. 

25 (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 provided 

4 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 same 

12 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 (b)(2); 

20 and 

21 (ii) take into account the number of renew22 able energy credits retired by the load-serving en23 tities represented by a qualified scheduling entity 

24 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 as6 sessments 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 sub11 section: 

12 (A) The term ‘‘ERCOT’’ means the Electric 

13 Reliability Council of Texas. 

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

15 meaning adopted by ERCOT Protocols and in 

16 effect on the date of enactment of this Act. 

17 (C) The term ‘‘qualified scheduling entities’’ 

18 has the meaning adopted by ERCOT Protocols 

19 and in effect on the date of enactment of this 

20 Act. 

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

22 the meaning as promulgated and adopted by the 

23 Public Utility Commission of Texas pursuant to 

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1 latory Act of 1999, and in effect on the date of 

2 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, act22 ing in close consultation with the Energy Information 

23 Administration, shall issue for notice and comment a 

24 proposed rule to determine the level of fossil fuel elec25 tricity delivered to retail customers by each distribumstockstill on PROD1PC66 with BILLS

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1 tion utility in the United States during the most re2 cent calendar year or other period determined to be 

3 most appropriate. Such proposed rule shall balance 

4 the need to be efficient, reasonably precise, and time5 ly, taking into account the nature and cost of data 

6 currently available and the nature of markets and 

7 regulation in effect in various regions of the country. 

8 Different methodologies may be applied in different 

9 regions if appropriate to obtain the best balance of 

10 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 such 

18 rule, the Secretary may consider opportunities and 

19 costs to develop new data sources in the future and 

20 issue recommendations for the Energy Information 

21 Administration or other entities to collect such data. 

22 After notice and opportunity for comment the Sec23 retary may, by rule, subsequently update and modify 

24 the methodology for making such determinations. 

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1 (4) ANNUAL DETERMINATIONS.—Pursuant to the 

2 final rule issued under paragraph (3), the Secretary 

3 shall make annual determinations of the amounts and 

4 types for each such utility and publish such deter5 minations in the Federal Register. Such determina6 tions shall be used to conduct the referendum under 

7 subsection (b) and by the Corporation in applying 

8 any assessment under this subsection. 

9 (5) REHEARING AND JUDICIAL REVIEW.—The 

10 owner or operator of any distribution utility that be11 lieves that the Secretary has misapplied the method12 ology in the final rule in determining the amount 

13 and types of fossil fuel electricity delivered by such 

14 distribution utility may seek rehearing of such deter15 mination within 30 days of publication of the deter16 mination in the Federal Register. The Secretary shall 

17 decide such rehearing petitions within 30 days. The 

18 Secretary’s determinations following rehearing shall 

19 be final and subject to judicial review in the United 

20 States Court of Appeals for the District of Columbia. 

21 (g) COMPLIANCE WITH CORPORATION ASSESS22 MENTS.—The Corporation may bring an action in the ap23 propriate court of the United States to compel compliance 

24 with an assessment levied by the Corporation under this 

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1 section may also require payment by the defendant of the 

2 costs incurred by the Corporation in bringing such action. 

3 (h) MIDCOURSE REVIEW.—Not later than 5 years fol4 lowing establishment of the Corporation, the Comptroller 

5 General of the United States shall prepare an analysis, and 

6 report to Congress, assessing the Corporation’s activities, 

7 including project selection and methods of disbursement of 

8 assessed fees, impacts on the prospects for commercializa9 tion of carbon capture and storage technologies, adequacy 

10 of funding, and administration of funds. The report shall 

11 also make such recommendations as may be appropriate in 

12 each of these areas. The Corporation shall reimburse the 

13 Government Accountability Office for the costs associated 

14 with performing this midcourse review. 

15 (i) RECOVERY OF COSTS.— 

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

17 transmission, delivery, or sales of electric energy are 

18 subject to any form of rate regulation shall not be de19 nied the opportunity to recover the full amount of the 

20 prudently incurred costs associated with complying 

21 with this section, consistent with applicable State or 

22 Federal law. 

23 (2) RATEPAYER REBATES.—Regulatory authori24 ties that approve cost recovery pursuant to paragraph 

25 (1) may order rebates to ratepayers to the extent that 

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1 distribution utilities are reimbursed undedicated or 

2 unassigned balances pursuant to subsection (d)(3). 

3 (j) TECHNICAL ADVISORY COMMITTEE.— 

4 (1) ESTABLISHMENT.—There is established an 

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

6 Advisory Committee’’. 

7 (2) MEMBERSHIP.—The Technical Advisory 

8 Committee shall be comprised of not less than 7 mem9 bers appointed by the Board from among academic 

10 institutions, national laboratories, independent re11 search institutions, and other qualified institutions. 

12 No member of the Committee shall be affiliated with 

13 EPRI or with any organization having members serv14 ing on the Board. At least one member of the Com15 mittee shall be appointed from among officers or em16 ployees of the Department of Energy recommended to 

17 the Board by the Secretary of Energy. 

18 (3) CHAIRPERSON AND VICE CHAIRPERSON.—The 

19 Board shall designate one member of the Technical 

20 Advisory Committee to serve as Chairperson of the 

21 Committee and one to serve as Vice Chairperson of 

22 the Committee. 

23 (4) COMPENSATION.—The Board shall provide 

24 compensation to members of the Technical Advisory 

25 Committee for travel and other incidental expenses 

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1 and such other compensation as the Board determines 

2 to be necessary. 

3 (5) PURPOSE.—The Technical Advisory Com4 mittee shall provide independent assessments and 

5 technical evaluations, as well as make non-binding 

6 recommendations to the Board, concerning Corpora7 tion activities, including but not limited to the fol8 lowing: 

9 (A) Reviewing and evaluating the Corpora10 tion’s plans and budgets described in subsection 

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

12 which could include approaches to prioritizing 

13 technologies, appropriateness of engineering tech14 niques, monitoring and verification technologies 

15 for storage, geological site selection, and cost con16 trol measures. 

17 (B) Making annual non-binding rec18 ommendations to the Board concerning any of 

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

20 well as what types of investments, scientific re21 search, or engineering practices would best fur22 ther the goals of the Corporation. 

23 (6) PUBLIC AVAILABILITY.—All reports, evalua24 tions, and other materials of the Technical Advisory 

25 Committee shall be made available to the public by 

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

2 Board. 

3 (k) LOBBYING RESTRICTIONS.—No funds collected by 

4 the Corporation shall be used in any manner for influ5 encing legislation or elections, except that the Corporation 

6 may recommend to the Secretary and the Congress changes 

7 in this section or other statutes that would further the pur8 poses of this section. 

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

10 shall ensure that entities receiving grants, contracts, or 

11 other financial support from the Corporation for the project 

12 activities authorized by this section are in compliance with 

13 the Davis-Bacon Act (40 U.S.C. 276a–276a–5). 

14 SEC. 115. COMMERCIAL DEPLOYMENT OF CARBON CAPTURE 

15 AND SEQUESTRATION TECHNOLOGIES. 

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

17 by section 321 of this Act) is amended by adding the fol18 lowing new section after section 785: 

19 ‘‘SEC. 786. COMMERCIAL DEPLOYMENT OF CARBON CAP20 TURE AND SEQUESTRATION TECHNOLOGIES. 

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

22 date of enactment of this title, the Administrator shall pro23 mulgate regulations providing for the distribution of emis24 sion allowances allocated pursuant to section 782(f), pursu25 ant to the requirements of this section, to support the commstockstill on PROD1PC66 with BILLS

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1 mercial deployment of carbon capture and sequestration 

2 technologies in both electric power generation and indus3 trial operations. 

4 ‘‘(b) ELIGIBILITY CRITERIA.—To be eligible to receive 

5 emission allowances under this section, the owner or oper6 ator of a project must— 

7 ‘‘(1) implement carbon capture and sequestration 

8 technology— 

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

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

11 megawatts or more; 

12 ‘‘(ii) in the case of a retrofit applica13 tion, applies the carbon capture and seques14 tration technology to the flue gas from at 

15 least 200 megawatts of the total nameplate 

16 generating capacity of the unit, provided 

17 that clause (i) shall apply without excep18 tion; 

19 ‘‘(iii) derives at least 50 percent of its 

20 annual fuel input from coal, petroleum 

21 coke, or any combination of these 2 fuels; 

22 and 

23 ‘‘(iv) upon implementation of capture 

24 and sequestration technology, will achieve 

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1 cent reduction in emissions of the carbon 

2 dioxide produced by— 

3 ‘‘(I) the unit, measured on an an4 nual basis, determined in accordance 

5 with section 812(b)(2); or 

6 ‘‘(II) in the case of retrofit appli7 cations under clause (ii), the treated 

8 portion of flue gas from the unit, meas9 ured on an annual basis, determined 

10 in accordance with section 812(b)(2); 

11 or 

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

13 ‘‘(i) absent carbon capture and seques14 tration, would emit greater than 50,000 

15 tons per year of carbon dioxide; 

16 ‘‘(ii) upon implementation, will 

17 achieve an emission limit that is at least a 

18 50 percent reduction in emissions of the 

19 carbon dioxide produced by the emission 

20 point, measured on an annual basis, deter21 mined in accordance with section 812(b)(2); 

22 and 

23 ‘‘(iii) does not produce a liquid trans24 portation fuel from a solid fossil-based feed25 stock; 

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

2 site that meets all applicable permitting and certifi3 cation requirements for geologic sequestration, or, 

4 pursuant to such requirements as the Administrator 

5 may prescribe by regulation, convert captured carbon 

6 dioxide to a stable form that will safely and perma7 nently sequester such carbon dioxide; 

8 ‘‘(3) meet all other applicable State and Federal 

9 permitting requirements; and 

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

11 ‘‘(c) PHASE I DISTRIBUTION TO ELECTRIC GENER12 ATING UNITS.— 

13 ‘‘(1) APPLICATION.—This subsection shall apply 

14 only to projects at the first 6 gigawatts of electric gen15 erating units, measured in cumulative generating ca16 pacity of such units. 

17 ‘‘(2) DISTRIBUTION.—The Administrator shall 

18 distribute emission allowances allocated under section 

19 782(f) to the owner or operator of each eligible project 

20 at an electric generating unit in a quantity equal to 

21 the quotient obtained by dividing— 

22 ‘‘(A) the product obtained by multiplying— 

23 ‘‘(i) the number of metric tons of car24 bon dioxide emissions avoided through cap25 ture and sequestration of emissions by the 

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1 project, as determined pursuant to such 

2 methodology as the Administrator shall pre3 scribe by regulation; and 

4 ‘‘(ii) a bonus allowance value, pursu5 ant to paragraph (3); by 

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

7 emission allowance during the preceding year. 

8 ‘‘(3) BONUS ALLOWANCE VALUES.— 

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

10 capture and sequestration of 85 percent or more 

11 of the carbon dioxide that otherwise would be 

12 emitted by such unit, the bonus allowance value 

13 shall be $90. 

14 ‘‘(B) The Administrator shall by regulation 

15 establish a bonus allowance value for each rate 

16 of lower capture and sequestration achieved by a 

17 generating unit, from a minimum of $50 per ton 

18 for a 50 percent rate and varying directly with 

19 increasing rates of capture and sequestration up 

20 to $90 per ton for an 85 percent rate. 

21 ‘‘(C) For a generating unit that achieves the 

22 capture and sequestration of at least 50 percent 

23 of the carbon dioxide that otherwise would be 

24 emitted by such unit by not later than January 

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1 ance value under this paragraph shall be in2 creased by $10, provided that the owner of such 

3 unit notifies the Administrator of its intent to 

4 achieve such rate of capture and sequestration by 

5 not later than January 1, 2012. 

6 ‘‘(D) For a carbon capture and sequestra7 tion project sequestering in a geological forma8 tion for purposes of enhanced hydrocarbon recov9 ery, the Administrator shall, by regulation, re10 duce the applicable bonus allowance value under 

11 this paragraph to reflect the lower net cost of the 

12 project when compared to sequestration into geo13 logical formations solely for purposes of seques14 tration. 

15 ‘‘(E) All monetary values in this section 

16 shall be adjusted annually for inflation. 

17 ‘‘(d) PHASE II DISTRIBUTION TO ELECTRIC GENER18 ATING UNITS.— 

19 ‘‘(1) APPLICATION.—This subsection shall apply 

20 only to the distribution of emission allowances to car21 bon capture and sequestration projects at electric gen22 erating units after the capacity threshold identified in 

23 subsection (c)(1) is reached. 

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

25 prior to the date on which the capacity threshold 

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

2 reached, the Administrator shall promulgate regula3 tions to govern the distribution of emission allowances 

4 to the owners or operators of eligible projects under 

5 this subsection. 

6 ‘‘(3) REVERSE AUCTIONS.— 

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

8 paragraph (4), the regulations promulgated 

9 under paragraph (2) shall provide for the dis10 tribution of emission allowances to the owners or 

11 operators of eligible projects under this sub12 section through reverse auctions, which shall be 

13 held no less frequently than once each calendar 

14 year. The Administrator may establish a sepa15 rate auction for each of no more than 5 different 

16 project categories, defined on the basis of coal 

17 type, capture technology, geological formation 

18 type, new unit versus retrofit application, such 

19 other factors as the Administrator may prescribe, 

20 or any combination thereof. The Administrator 

21 may establish appropriate minimum rates of 

22 capture and sequestration in implementing this 

23 paragraph. 

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

25 auction— 

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1 ‘‘(i) the Administrator shall solicit bids 

2 from eligible projects; 

3 ‘‘(ii) eligible projects participating in 

4 the auction shall submit a bid including the 

5 desired level of carbon dioxide sequestration 

6 incentive per ton and the estimated quan7 tity of carbon dioxide that the project will 

8 permanently sequester over 10 years; and 

9 ‘‘(iii) the Administrator shall select 

10 bids, within each auction, for the sequestra11 tion amount submitted, beginning with the 

12 eligible project submitting the bid for the 

13 lowest level of sequestration incentive on a 

14 per ton basis and meeting such other re15 quirements as the Administrator may speci16 fy, until the amount of funds available for 

17 the reverse auction is committed. 

18 ‘‘(C) FORM OF DISTRIBUTION.—The Admin19 istrator shall provide deployment incentives to 

20 the owners or operators of eligible projects se21 lected through a reverse auction under this para22 graph pursuant to a formula equivalent to that 

23 described in subsection (c)(2), except that the in24 centive level that is bid by the entity shall be 

25 substituted for the bonus allowance value. 

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1 ‘‘(4) ALTERNATIVE DISTRIBUTION METHOD.— 

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

3 determines that reverse auctions would not pro4 vide for efficient and cost-effective commercial 

5 deployment of carbon capture and sequestration 

6 technologies, the Administrator may instead, 

7 through regulations promulgated under para8 graph (2) or (5), prescribe a schedule for the 

9 award of bonus allowances to the owners or oper10 ators of eligible projects under this subsection, in 

11 accordance with the requirements of this para12 graph. 

13 ‘‘(B) MULTIPLE TRANCHES.—The Adminis14 trator shall divide emission allowances available 

15 for distribution to the owners or operators of eli16 gible projects into a series of tranches, each sup17 porting the deployment of a specified quantity of 

18 cumulative electric generating capacity utilizing 

19 carbon capture and sequestration technology, 

20 each of which shall not be greater than 6 

21 gigawatts. 

22 ‘‘(C) METHOD OF DISTRIBUTION.—The Ad23 ministrator shall distribute emission allowances 

24 within each tranche, on a first-come, first-served 

25 basis— 

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1 ‘‘(i) based on the date of full-scale op2 eration of capture and sequestration tech3 nology; and 

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

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

6 that the Administrator shall prescribe bonus 

7 allowance values different than those set 

8 forth in subsection (c)(2)), establishing the 

9 number of allowances to be distributed per 

10 ton of carbon dioxide sequestered by the 

11 project. 

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

13 established pursuant to subparagraph (A), the 

14 Administrator shall establish a schedule for dis15 tributing emission allowances that— 

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

17 provides higher bonus allowance values for 

18 projects achieving higher rates of capture 

19 and sequestration; 

20 ‘‘(ii) for each capture and sequestra21 tion rate, establishes a bonus allowance 

22 value that is lower than that established for 

23 such rate in the previous tranche (or, in the 

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1 lished for such rate under subsection (c)(3)); 

2 and 

3 ‘‘(iii) may establish different bonus al4 lowance levels for no more than 5 different 

5 project categories, defined by coal type, cap6 ture technology, geological formation type, 

7 new unit versus retrofit application, such 

8 other factors as the Administrator may pre9 scribe, or any combination thereof. 

10 ‘‘(E) CRITERIA FOR ESTABLISHING BONUS

11 ALLOWANCE VALUES.—In setting bonus allow12 ance values under this paragraph, the Adminis13 trator shall seek to cover no more than the rea14 sonable incremental capital and operating costs 

15 of a project that are attributable to implementa16 tion of carbon capture, transportation, and se17 questration technologies, taking into account— 

18 ‘‘(i) the reduced cost of compliance 

19 with section 722 of this Act; 

20 ‘‘(ii) the reduced cost associated with 

21 sequestering in a geological formation for 

22 purposes of enhanced hydrocarbon recovery 

23 when compared to sequestration into geo24 logical formations solely for purposes of se25 questration; 

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1 ‘‘(iii) the relevant factors defining the 

2 project category; and 

3 ‘‘(iv) such other factors as the Admin4 istrator determines are appropriate. 

5 ‘‘(5) REVISION OF REGULATIONS.—The Adminis6 trator shall review, and as appropriate revise, the ap7 plicable regulations under this subsection no less fre8 quently than every 8 years. 

9 ‘‘(e) LIMITS FOR CERTAIN ELECTRIC GENERATING

10 UNITS.— 

11 ‘‘(1) DEFINITIONS.—For purposes of this sub12 section, the terms ‘covered EGU’ and ‘initially per13 mitted’ shall have the meaning given those terms in 

14 section 812 of this Act. 

15 ‘‘(2) COVERED EGUS INITIALLY PERMITTED

16 FROM 2009 THROUGH 2014.—For a covered EGU that 

17 is initially permitted on or after January 1, 2009, 

18 and before January 1, 2015, the Administrator shall 

19 reduce the quantity of emission allowances that the 

20 owner or operator of such covered EGU would other21 wise be eligible to receive under this section as follows: 

22 ‘‘(A) In the case of a unit commencing oper23 ation on or before January 1, 2019, if the date 

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

25 (ii)(II), by the product of— 

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1 ‘‘(i) 20 percent; and 

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

3 have elapsed between— 

4 ‘‘(I) the earlier of January 1, 

5 2020, or the date that is 5 years after 

6 the commencement of operation of such 

7 covered EGU; and 

8 ‘‘(II) the first year that such cov9 ered EGU achieves (and thereafter 

10 maintains) an emission limit that is 

11 at least a 50 percent reduction in 

12 emissions of the carbon dioxide pro13 duced by the unit, measured on an an14 nual basis, as determined in accord15 ance with section 812(b)(2). 

16 ‘‘(B) In the case of a unit commencing op17 eration after January 1, 2019, by the product 

18 of— 

19 ‘‘(i) 20 percent; and 

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

21 ‘‘(I) the commencement of oper22 ation of such covered EGU; and 

23 ‘‘(II) the first year that such cov24 ered EGU achieves (and thereafter 

25 maintains) an emission limit that is 

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1 at least a 50 percent reduction in 

2 emissions of the carbon dioxide pro3 duced by the unit, measured on an an4 nual basis, as determined in accord5 ance with section 812(b)(2). 

6 ‘‘(3) COVERED EGUS INITIALLY PERMITTED

7 FROM 2015 THROUGH 2019.—The owner or operator of 

8 a covered EGU that is initially permitted on or after 

9 January 1, 2015, and before January 1, 2020, shall 

10 be ineligible to receive emission allowances pursuant 

11 to this section if such unit, upon commencement of 

12 operations (and thereafter), does not achieve and 

13 maintain an emission limit that is at least a 50 per14 cent reduction in emissions of the carbon dioxide pro15 duced by the unit, measured on an annual basis, as 

16 determined in accordance with section 812(b)(2). 

17 ‘‘(f) INDUSTRIAL SOURCES.— 

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

19 distribute not more than 15 percent of the allowances 

20 allocated under section 782(a) for any vintage year to 

21 the owners or operators of eligible industrial sources 

22 to support the commercial-scale deployment of carbon 

23 capture and sequestration technologies at such 

24 sources. 

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

2 by regulation, prescribe requirements for the distribu3 tion of emission allowances to the owners or operators 

4 of industrial sources under this subsection, based on 

5 a bonus allowance formula that awards allowances to 

6 qualifying projects on the basis of tons of carbon diox7 ide captured and permanently sequestered. The Ad8 ministrator may provide for the distribution of emis9 sion allowances pursuant to— 

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

11 that described under subsection (d)(3), including 

12 the use of separate auctions for different project 

13 categories; or 

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

15 described under subsection (d)(4), which shall en16 sure that incentives are set so as to satisfy the 

17 requirement described in subsection (d)(4)(E). 

18 ‘‘(3) REVISION OF REGULATIONS.—The Adminis19 trator shall review, and as appropriate revise, the ap20 plicable regulations under this subsection no less fre21 quently than every 8 years. 

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

23 under this section only for tons of carbon dioxide emissions 

24 that have already been captured and sequestered. A quali25 fying project may receive annual emission allowances under 

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1 this section only for the first 10 years of operation. No 

2 greater than 72 gigawatts of total cumulative generating 

3 capacity (including industrial applications, measured by 

4 such equivalent metric as the Administrator may designate) 

5 may receive emission allowances under this section. Upon 

6 reaching the limit described in the preceding sentence, any 

7 emission allowances that are allocated for carbon capture 

8 and sequestration deployment under section 782(f) and are 

9 not yet obligated under this section shall be treated as allow10 ances not designated for distribution for purposes of section 

11 782(r). 

12 ‘‘(h) EXHAUSTION OF ACCOUNT AND ANNUAL ROLL13 OVER OF SURPLUS ALLOWANCES.— 

14 ‘‘(1) In distributing bonus allowances under this 

15 subsection, the Administrator shall ensure that quali16 fying projects receiving allowances receive distribu17 tions for 10 years. 

18 ‘‘(2) If the Administrator determines that the al19 lowances allocated under section 782(f) with a vintage 

20 year that matches the year of distribution will be ex21 hausted once the estimated full 10-year distributions 

22 will be provided to current eligible participants, the 

23 Administrator shall provide to new eligible projects 

24 allowances from vintage years after the year of the 

25 distribution. 

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

2 bonus allowance values for retrofit applications eligible 

3 under subsections (b)(1)(A)(ii) and (b)(1)(A)(iv)(II), the 

4 Administrator shall apply the required capture rates with 

5 respect to the treated portion of flue gas from the unit. 

6 ‘‘(2) No additional projects shall be eligible for allow7 ances under subsections (b)(1)(A)(ii) and (b)(1)(A)(iv)(II) 

8 as of such time as the Administrator reports, pursuant to 

9 section 812(d), that carbon capture and sequestration ret10 rofit projects at electric generating units that are eligible 

11 for allowances under this section have been applied, in the 

12 aggregate, to the flue gas generated by 1 gigawatt of total 

13 cumulative generating capacity. 

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

15 mechanics employed on projects funded directly by or as16 sisted in whole or in part by this section through the use 

17 of bonus allowances shall be paid wages at rates not less 

18 than those prevailing on projects of a character similar in 

19 the locality as determined by the Secretary of Labor in ac20 cordance with subchapter IV, chapter 31, part A of subtitle 

21 II of title 40, United States Code. With respect to the labor 

22 standards specified in this section, the Secretary of Labor 

23 shall have the authority and functions set forth in Reorga24 nization Plan Numbered 14 of 1950 (64 Stat. 1267; 5 

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1 U.S.C. App.) and section 3145 of title 40, United States 

2 Code.’’. 

3 SEC. 116. PERFORMANCE STANDARDS FOR COAL-FUELED 

4 POWER PLANTS. 

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

6 added by section 331 of this Act) is amended by adding 

7 the following new section after section 811: 

8 ‘‘SEC. 812. PERFORMANCE STANDARDS FOR NEW COAL9 FIRED POWER PLANTS. 

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

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

12 means a utility unit that is required to have a permit 

13 under section 503(a) and is authorized under state or 

14 federal law to derive at least 30 percent of its annual 

15 heat input from coal, petroleum coke, or any com16 bination of these fuels. 

17 ‘‘(2) INITIALLY PERMITTED.—The term ‘initially 

18 permitted’ means that the owner or operator has re19 ceived a Clean Air Act preconstruction approval or 

20 permit, for the covered EGU as a new (not a modi21 fied) source, but administrative review or appeal of 

22 such approval or permit has not been exhausted. A 

23 subsequent modification of any such approval or per24 mits, ongoing administrative or court review, ap25 peals, or challenges, or the existence or tolling of any 

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1 time to pursue further review, appeals, or challenges 

2 shall not affect the date on which a covered EGU is 

3 considered to be initially permitted under this para4 graph. 

5 ‘‘(b) STANDARDS.—(1) A covered EGU that is initially 

6 permitted on or after January 1, 2020, shall achieve an 

7 emission limit that is a 65 percent reduction in emissions 

8 of the carbon dioxide produced by the unit, as measured 

9 on an annual basis, or meet such more stringent standard 

10 as the Administrator may establish pursuant to subsection 

11 (c). 

12 ‘‘(2) A covered EGU that is initially permitted after 

13 January 1, 2009, and before January 1, 2020, shall, by 

14 the applicable compliance date established under this para15 graph, achieve an emission limit that is a 50 percent reduc16 tion in emissions of the carbon dioxide produced by the

17 unit, as measured on an annual basis. Compliance with 

18 the requirement set forth in this paragraph shall be required 

19 by the earliest of the following: 

20 ‘‘(A) Four years after the date the Administrator 

21 has published pursuant to subsection (d) a report that 

22 there are in commercial operation in the United 

23 States electric generating units or other stationary 

24 sources equipped with carbon capture and sequestra25 tion technology that, in the aggregate— 

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1 ‘‘(i) have a total of at least 4 gigawatts of 

2 nameplate generating capacity of which— 

3 ‘‘(I) at least 3 gigawatts must be elec4 tric generating units; and 

5 ‘‘(II) up to 1 gigawatt may be indus6 trial applications, for which capture and se7 questration of 3 million tons of carbon diox8 ide per year on an aggregate annualized 

9 basis shall be considered equivalent to 1 

10 gigawatt; 

11 ‘‘(ii) include at least 2 electric generating 

12 units, each with a nameplate generating capac13 ity of 250 megawatts or greater, that capture, 

14 inject, and sequester carbon dioxide into geologic 

15 formations other than oil and gas fields; and 

16 ‘‘(iii) are capturing and sequestering in the 

17 aggregate at least 12 million tons of carbon diox18 ide per year, calculated on an aggregate 

19 annualized basis. 

20 ‘‘(B) January 1, 2025. 

21 ‘‘(3) If the deadline for compliance with paragraph (2) 

22 is January 1, 2025, the Administrator may extend the 

23 deadline for compliance by a covered EGU by up to 18 

24 months if the Administrator makes a determination, based 

25 on a showing by the owner or operator of the unit, that 

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1 it will be technically infeasible for the unit to meet the 

2 standard by the deadline. The owner or operator must sub3 mit a request for such an extension by no later than Janu4 ary 1, 2022, and the Administrator shall provide for public 

5 notice and comment on the extension request. 

6 ‘‘(c) REVIEW AND REVISION OF STANDARDS.—Not 

7 later than 2025 and at 5-year intervals thereafter, the Ad8 ministrator shall review the standards for new covered 

9 EGUs under this section and shall, by rule, reduce the max10 imum carbon dioxide emission rate for new covered EGUs 

11 to a rate which reflects the degree of emission limitation 

12 achievable through the application of the best system of 

13 emission reduction which (taking into account the cost of 

14 achieving such reduction and any nonair quality health 

15 and environmental impact and energy requirements) the 

16 Administrator determines has been adequately dem17 onstrated. 

18 ‘‘(d) REPORTS.—Not later than the date 18 months 

19 after the date of enactment of this title and semiannually 

20 thereafter, the Administrator shall publish a report on the 

21 nameplate capacity of units (determined pursuant to sub22 section (b)(2)(A)) in commercial operation in the United 

23 States equipped with carbon capture and sequestration 

24 technology, including the information described in sub25 section (b)(2)(A) (including the cumulative generating camstockstill on PROD1PC66 with BILLS

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1 pacity to which carbon capture and sequestration retrofit 

2 projects meeting the criteria described in section 

3 786(b)(1)(A)(ii) and (b)(1)(A)(iv)(II) has been applied and 

4 the quantities of carbon dioxide captured and sequestered 

5 by such projects). 

6 ‘‘(e) REGULATIONS.—Not later than 2 years after the 

7 date of enactment of this title, the Administrator shall pro8 mulgate regulations to carry out the requirements of this 

9 section.’’. 

10 Subtitle C—Clean Transportation 

11 SEC. 121. ELECTRIC VEHICLE INFRASTRUCTURE. 

12 (a) AMENDMENT OF PURPA.—Section 111(d) of the 

13 Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 

14 2621(d)) is amended by adding at the end the following: 

15 ‘‘(20) PLUG-IN ELECTRIC DRIVE VEHICLE INFRA16 STRUCTURE.— 

17 ‘‘(A) UTILITY PLAN FOR INFRASTRUC18 TURE.—Each electric utility shall develop a plan 

19 to support the use of plug-in electric drive vehi20 cles, including heavy-duty hybrid electric vehi21 cles. The plan may provide for deployment of 

22 electrical charging stations in public or private 

23 locations, including street parking, parking ga24 rages, parking lots, homes, gas stations, and 

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1 highway rest stops. Any such plan may also in2 clude— 

3 ‘‘(i) battery exchange, fast charging in4 frastructure and other services; 

5 ‘‘(ii) triggers for infrastructure deploy6 ment based upon market penetration of 

7 plug-in electric drive vehicles; and 

8 ‘‘(iii) such other elements as the State 

9 determines necessary to support plug-in 

10 electric drive vehicles. 

11 Each plan under this paragraph shall provide 

12 for the deployment of the charging infrastructure 

13 or other infrastructure necessary to adequately 

14 support the use of plug-in electric drive vehicles. 

15 ‘‘(B) SUPPORT REQUIREMENTS.—Each 

16 State regulatory authority (in the case of each 

17 electric utility for which it has ratemaking au18 thority) and each utility (in the case of a non19 regulated utility) shall— 

20 ‘‘(i) require that charging infrastruc21 ture deployed is interoperable with products 

22 of all auto manufacturers to the extent pos23 sible; and 

24 ‘‘(ii) consider adopting minimum re25 quirements for deployment of electrical 

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1 charging infrastructure and other appro2 priate requirements necessary to support the 

3 use of plug-in electric drive vehicles. 

4 ‘‘(C) COST RECOVERY.—Each State regu5 latory authority (in the case of each electric util6 ity for which it has ratemaking authority) and 

7 each utility (in the case of a nonregulated util8 ity) shall consider whether, and to what extent, 

9 to allow cost recovery for plans and implementa10 tion of plans. 

11 ‘‘(D) SMART GRID INTEGRATION.—The 

12 State regulatory authority (in the case of each 

13 electric utility for which it has ratemaking au14 thority) and each utility (in the case of a non15 regulated utility) shall, in accordance with regu16 lations issued by the Federal Energy Regulatory 

17 Commission pursuant to section 1305(d) of the 

18 Energy Independence and Security Act of 

19 2007— 

20 ‘‘(i) establish any appropriate proto21 cols and standards for integrating plug-in 

22 electric drive vehicles into an electrical dis23 tribution system, including Smart Grid sys24 tems and devices as described in title XIII 

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1 of the Energy Independence and Security 

2 Act of 2007; 

3 ‘‘(ii) include, to the extent feasible, the 

4 ability for each plug-in electric drive vehicle 

5 to be identified individually and to be asso6 ciated with its owner’s electric utility ac7 count, regardless of the location that the ve8 hicle is plugged in, for purposes of appro9 priate billing for any electricity required to 

10 charge the vehicle’s batteries as well as any 

11 crediting for electricity provided to the elec12 tric utility from the vehicle’s batteries; and 

13 ‘‘(iii) review the determination made 

14 in response to section 1252 of the Energy 

15 Policy Act of 2005 in light of this section, 

16 including whether time-of-use pricing 

17 should be employed to enable the use of 

18 plug-in electric drive vehicles to contribute 

19 to meeting peak-load and ancillary service 

20 power needs.’’. 

21 (b) COMPLIANCE.— 

22 (1) TIME LIMITATIONS.—Section 112(b) of the 

23 Public Utility Regulatory Policies Act of 1978 (16 

24 U.S.C. 2622(b)) is amended by adding the following 

25 at the end thereof: 

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1 ‘‘(7)(A) Not later than 3 years after the date of enact2 ment 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 com5 mence the consideration referred to in section 111, or set 

6 a hearing date for consideration, with respect to the stand7 ard established by paragraph (20) of section 111(d). 

8 ‘‘(B) Not later than 4 years after the date of enactment 

9 of the this paragraph, each State regulatory authority (with 

10 respect to each electric utility for which it has ratemaking 

11 authority), and each nonregulated electric utility, shall 

12 complete the consideration, and shall make the determina13 tion, referred to in section 111 with respect to the standard 

14 established by paragraph (20) of section 111(d).’’. 

15 (2) FAILURE TO COMPLY.—Section 112(c) of the 

16 Public Utility Regulatory Policies Act of 1978 (16 

17 U.S.C. 2622(c)) is amended by adding the following 

18 at the end: ‘‘In the case of the standards established 

19 by paragraph (20) of section 111(d), the reference 

20 contained in this subsection to the date of enactment 

21 of this Act shall be deemed to be a reference to the 

22 date of enactment of such paragraph.’’. 

23 (3) PRIOR STATE ACTIONS.—Section 112(d) of 

24 the Public Utility Regulatory Policies Act of 1978 (16 

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1 U.S.C. 2622(d)) is amended by striking ‘‘(19)’’ and 

2 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 plug7 in electric drive vehicles into the electricity grid in multiple 

8 regions. In carrying out the program, the Secretary may 

9 provide financial assistance described under subsection (d), 

10 consistent with the goals under subsection (b). The Sec11 retary shall select regions based upon applications for as12 sistance received pursuant to subsection (c). 

13 (b) GOALS.—The goals of the program established pur14 suant to subsection (a) shall be— 

15 (1) to demonstrate the viability of a vehicle-based 

16 transportation system that is not overly dependent on 

17 petroleum as a fuel and contributes to lower carbon 

18 emissions than a system based on conventional vehi19 cles; 

20 (2) to facilitate the integration of advanced vehi21 cle technologies into electricity distribution areas to 

22 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 pro13 viders, car sharing companies or organizations, or other 

14 persons or entities. 

15 (d) USE OF FUNDS.—Pursuant to applications re16 ceived under subsection (c), the Secretary may make finan17 cial assistance available to any applicant or joint sponsor 

18 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 purchase 

21 of new plug-in electric drive vehicles by offsetting in 

22 whole or in part the incremental cost of such vehicles 

23 above the cost of comparable conventionally fueled ve24 hicles. 

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1 (2) Supporting the use of plug-in electric drive 

2 vehicles by funding projects for the deployment of any 

3 of the following: 

4 (A) Electrical charging infrastructure for 

5 plug-in electric drive vehicles, including battery 

6 exchange, fast charging infrastructure, and other 

7 services, in public or private locations, including 

8 street parking, parking garages, parking lots, 

9 homes, gas stations, and highway rest stops. 

10 (B) Smart Grid equipment and infrastruc11 ture, as described in title XIII of the Energy 

12 Independence and Security Act of 2007, to facili13 tate the charging and integration of plug-in elec14 tric drive vehicles. 

15 (3) Such other projects as the Secretary deter16 mines appropriate to support the large-scale deploy17 ment of plug-in electric drive vehicles in regional de18 ployment areas. 

19 (e) PROGRAM REQUIREMENTS.—The Secretary, in 

20 consultation with the Administrator and the Secretary of 

21 Transportation, shall determine design elements and re22 quirements of the program established pursuant to sub23 section (a), including— 

24 (1) the type of financial mechanism with which 

25 to provide financial assistance; 

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1 (2) criteria for evaluating applications sub2 mitted under subsection (c), including the anticipated 

3 ability to promote deployment and market penetra4 tion of vehicles that are less dependent on petroleum 

5 as a fuel source; and 

6 (3) reporting requirements for entities that re7 ceive financial assistance under this section, includ8 ing a comprehensive set of performance data charac9 terizing the results of the deployment program. 

10 (f) INFORMATION CLEARINGHOUSE.—The Secretary 

11 shall, as part of the program established pursuant to sub12 section (a), collect and make available to the public infor13 mation regarding the cost, performance, and other technical 

14 data regarding the deployment and integration of plug-in 

15 electric drive vehicles. 

16 (g) AUTHORIZATION.—There are authorized to be ap17 propriated to carry out this section such sums as may be 

18 necessary. 

19 SEC. 123. PLUG-IN ELECTRIC DRIVE VEHICLE MANUFAC20 TURING. 

21 (a) VEHICLE MANUFACTURING ASSISTANCE PRO22 GRAM.—The Secretary of Energy shall establish a program 

23 to provide financial assistance to automobile manufacturers 

24 to facilitate the manufacture of plug-in electric drive vehi25 cles, as defined in section 131(a)(5) of the Energy Independmstockstill on PROD1PC66 with BILLS

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1 ence and Security Act of 2007, that are developed and pro2 duced in the United States. 

3 (b) FINANCIAL ASSISTANCE.—The Secretary of Energy 

4 may provide financial assistance to an automobile manu5 facturer under the program established pursuant to sub6 section (a) for— 

7 (1) the reconstruction or retooling of facilities for 

8 the manufacture of plug-in electric drive vehicles that 

9 are developed and produced in the United States; and 

10 (2) if appropriate, the purchase of domestically 

11 produced vehicle batteries to be used in the manufac12 ture of vehicles manufactured pursuant to paragraph 

13 (1). 

14 (c) COORDINATION WITH REGIONAL DEPLOYMENT.— 

15 The Secretary may provide financial assistance under sub16 section (b) in conjunction with the award of financial as17 sistance under the large scale vehicle electrification program 

18 established pursuant to section 122 of this Act. 

19 (d) PROGRAM REQUIREMENTS.—The Secretary shall 

20 determine design elements and requirements of the program 

21 established pursuant to subsection (a), including— 

22 (1) the type of financial mechanism with which 

23 to provide financial assistance; 

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1 (2) criteria, in addition to the criteria described 

2 under subsection (e), for evaluating applications for 

3 financial assistance; and 

4 (3) reporting requirements for automobile manu5 facturers that receive financial assistance under this 

6 section. 

7 (e) CRITERIA.—In selecting recipients of financial as8 sistance from among applicant automobile manufacturers, 

9 the Secretary shall give preference to proposals that— 

10 (1) are most likely to be successful; and 

11 (2) are located in local markets that have the 

12 greatest need for the facility. 

13 (f) REPORTS.—The Secretary shall annually submit to 

14 Congress a report on the program established pursuant to 

15 this section. 

16 (g) AUTHORIZATION OF APPROPRIATIONS.—There are 

17 authorized to be appropriated such sums as are necessary 

18 to carry out this section. 

19 SEC. 124. INVESTMENT IN CLEAN VEHICLES. 

20 (a) DEFINITIONS.—In this section: 

21 (1) ADVANCED TECHNOLOGY VEHICLES AND

22 QUALIFYING COMPONENTS.—The terms ‘‘advanced 

23 technology vehicles’’ and ‘‘qualifying components’’ 

24 shall have the definition of such terms in section 136 

25 of the Energy Independence and Security Act of 2007, 

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1 except that for purposes of this section, the average 

2 base year as described in such section 136(a)(1)(C) 

3 shall be the following: 

4 (A) In each of the years 2012 through 2016, 

5 model year 2009. 

6 (B) In 2017, the Administrator shall, not7 withstanding such section 136(a)(1)(C), deter8 mine an appropriate baseline based on techno9 logical and economic feasibility. 

10 (2) PLUG-IN ELECTRIC DRIVE VEHICLE.—The 

11 term ‘‘plug-in electric drive vehicle’’ shall have the 

12 definition of such term in section 131 of the Energy 

13 Independence and Security Act of 2007. 

14 (b) DISTRIBUTION OF ALLOWANCES.—The Adminis15 trator shall, in accordance with this section, distribute 

16 emission allowances allocated pursuant to section 782(i) of 

17 the Clean Air Act not later than September 30 of 2012 and 

18 each calendar year thereafter through 2025. 

19 (c) PLUG-IN ELECTRIC DRIVE VEHICLE MANUFAC20 TURING AND DEPLOYMENT.— 

21 (1) IN GENERAL.—The Administrator shall, at 

22 the direction of the Secretary of Energy, provide 

23 emission allowances allocated pursuant to section 

24 782(i) to applicants, joint sponsors and automobile 

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1 manufacturers pursuant to sections 122 and 123 of 

2 this Act. 

3 (2) ANNUAL AMOUNT.—In each of the years 2012 

4 through 2017, one-quarter of the portion of the emis5 sion allowances allocated pursuant to section 782(i) 

6 of the Clean Air Act shall be available to carry out 

7 paragraph (1) such that— 

8 (A) one-eighth of the portion shall be avail9 able to carry out section 122; and, 

10 (B) one-eighth of the portion shall be avail11 able to carry out section 123. 

12 (3) PREFERENCE.—In directing the provision of 

13 emission allowances under this subsection to carry 

14 out section 122, the Secretary shall give preference to 

15 applications under section 122(c) that are jointly 

16 sponsored by one or more automobile manufacturers. 

17 (4) MULTI-YEAR COMMITMENTS.—The Adminis18 trator shall commit to providing emission allowances 

19 to an applicant, joint sponsor, or automobile manu20 facturer for up to five consecutive years if— 

21 (A) an application under section 122 or 

22 123 of this Act requests a multi-year commit23 ment; 

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1 (B) such application meets the criteria for 

2 support established by the Secretary of Energy 

3 under sections 122 or 123 of this Act; 

4 (C) the Administrator confirms to the Sec5 retary that emission allowances will be available 

6 for a multi-year commitment; 

7 (D) the Secretary of Energy determines that 

8 a multi-year commitment for such application 

9 will advance the goals of section 122 or 123; and 

10 (E) the Secretary of Energy directs the Ad11 ministrator to make a multi-year commitment. 

12 (5) INSUFFICIENT APPLICATIONS.—If, in any 

13 year, emission allowances available under paragraph 

14 (2) cannot be provided because of insufficient num15 bers of submitted applications that meet the criteria 

16 for support established by the Secretary of Energy 

17 under sections 122 or 123 of this Act, the remaining 

18 emission allowances shall be distributed according to 

19 subsection (d). 

20 (d) ADVANCED TECHNOLOGY VEHICLES.— 

21 (1) IN GENERAL.—The Administrator shall, at 

22 the direction of the Secretary of Energy, provide any 

23 emission allowances allocated pursuant to section 

24 782(i) of the Clean Air Act that are not provided 

25 under subsection (c) to automobile manufacturers and 

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1 component suppliers to pay not more than 30 percent 

2 of the cost of— 

3 (A) reequipping, expanding, or establishing 

4 a manufacturing facility in the United States to 

5 produce— 

6 (i) qualifying advanced technology ve7 hicles; or 

8 (ii) qualifying components; and 

9 (B) engineering integration performed in 

10 the United States of qualifying vehicles and 

11 qualifying components. 

12 (2) PREFERENCE.—In directing the provision of 

13 emission allowances under this subsection during the 

14 years 2012 through 2017, the Secretary shall give 

15 preference to applications for projects that save the 

16 maximum number of gallons of fuel. 

17 SEC. 125. ADVANCED TECHNOLOGY VEHICLE MANUFAC18 TURING INCENTIVE LOANS. 

19 Section 136(d)(1) of the Energy Independence and Se20 curity Act of 2007 (42 U.S.C. 17013(d)(1)) is amended by 

21 striking ‘‘$25,000,000,000’’ and inserting 

22 ‘‘$50,000,000,000’’. 

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1 SEC. 126. AMENDMENT TO RENEWABLE FUELS STANDARD. 

2 (a) DEFINITION OF RENEWABLE BIOMASS.—Section 

3 211(o)(1)(I) of the Clean Air Act (42 U.S.C. 7545(o)) is 

4 amended to read as follows: 

5 ‘‘(I) RENEWABLE BIOMASS.—The term ‘re6 newable biomass’ means any of the following: 

7 ‘‘(i) Plant material, including waste 

8 material, harvested or collected from ac9 tively managed agricultural land that was 

10 in cultivation, cleared, or fallow and non11 forested on January 1, 2009. 

12 ‘‘(ii) Plant material, including waste 

13 material, harvested or collected from 

14 pastureland that was nonforested on Janu15 ary 1, 2009. 

16 ‘‘(iii) Nonhazardous vegetative matter 

17 derived from waste, including separated 

18 yard waste, landscape right-of-way trim19 mings, construction and demolition debris 

20 or food waste (but not recyclable waste 

21 paper, painted, treated or pressurized wood, 

22 or wood contaminated with plastic or met23 als). 

24 ‘‘(iv) Animal waste or animal byprod25 ucts, including products of animal waste di26 gesters. 

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1 ‘‘(v) Algae. 

2 ‘‘(vi) Trees, brush, slash, residues, or 

3 any other vegetative matter removed from 

4 within 600 feet of any building, camp5 ground, or route designated for evacuation 

6 by a public official with responsibility for 

7 emergency preparedness, or from within 300 

8 feet of a paved road, electric transmission 

9 line, utility tower, or water supply line. 

10 ‘‘(vii) Residues from or byproducts of 

11 milled logs. 

12 ‘‘(viii) Any of the following removed 

13 from forested land that is not Federal and 

14 is not high conservation priority land: 

15 ‘‘(I) Trees, brush, slash, residues, 

16 interplanted energy crops, or any other 

17 vegetative matter removed from an ac18 tively managed tree plantation estab19 lished— 

20 ‘‘(aa) prior to January 1, 

21 2009; or 

22 ‘‘(bb) on land that, as of 

23 January 1, 2009, was cultivated 

24 or fallow and non-forested. 

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1 ‘‘(II) Trees, logging residue, 

2 thinnings, cull trees, pulpwood, and 

3 brush removed from naturally-regen4 erated forests or other non-plantation 

5 forests, including for the purposes of 

6 hazardous fuel reduction or preventa7 tive treatment for reducing or con8 taining insect or disease infestation. 

9 ‘‘(III) Logging residue, thinnings, 

10 cull trees, pulpwood, brush and species 

11 that are non-native and noxious, from 

12 stands that were planted and managed 

13 after January 1, 2009, to restore or 

14 maintain native forest types. 

15 ‘‘(IV) Dead or severely damaged 

16 trees removed within 5 years of fire, 

17 blowdown, or other natural disaster, 

18 and badly infested trees. 

19 ‘‘(ix) Materials, pre-commercial 

20 thinnings, or removed invasive species from 

21 National Forest System land and public 

22 lands (as defined in section 103 of the Fed23 eral Land Policy and Management Act of 

24 1976 (43 U.S.C. 1702)), including those 

25 that are byproducts of preventive treatments 

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1 (such as trees, wood, brush, thinnings, 

2 chips, and slash), that are removed as part 

3 of a federally recognized timber sale, or that 

4 are removed to reduce hazardous fuels, to re5 duce or contain disease or insect infestation, 

6 or to restore ecosystem health, and that 

7 are— 

8 ‘‘(I) not from components of the 

9 National Wilderness Preservation Sys10 tem, Wilderness Study Areas, Inven11 toried Roadless Areas, old growth or 

12 mature forest stands, components of the 

13 National Landscape Conservation Sys14 tem, National Monuments, National 

15 Conservation Areas, Designated Primi16 tive Areas, or Wild and Scenic Rivers 

17 corridors; 

18 ‘‘(II) harvested in environ19 mentally sustainable quantities, as de20 termined by the appropriate Federal 

21 land manager; and 

22 ‘‘(III) harvested in accordance 

23 with Federal and State law and appli24 cable land management plans.’’. 

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1 (b) DEFINITION OF HIGH CONSERVATION PRIORITY

2 LAND.—Section 211(o)(1) of the Clean Air Act (42 U.S.C. 

3 7545(o)) is amended by inserting the following at the end 

4 thereof: 

5 ‘‘(M) HIGH CONSERVATION PRIORITY

6 LAND.—The term ‘high conservation priority 

7 land’ means land that is not Federal land and 

8 is— 

9 ‘‘(i) globally or State ranked as criti10 cally imperiled or imperiled under a State 

11 Natural Heritage Program; or 

12 ‘‘(ii) old-growth or late-successional 

13 forest, as identified by the office of the State 

14 Forester or relevant State agency with regu15 latory jurisdiction over forestry activities.’’. 

16 SEC. 127. OPEN FUEL STANDARD. 

17 (a) FINDINGS.—The Congress finds that— 

18 (1) the status of oil as a strategic commodity, 

19 which derives from its domination of the transpor20 tation sector, presents a clear and present danger to 

21 the United States; 

22 (2) in a prior era, when salt was a strategic 

23 commodity, salt mines conferred national power and 

24 wars were fought over the control of such mines; 

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1 (3) technology, in the form of electricity and re2 frigeration, decisively ended salt’s monopoly of meat 

3 preservation and greatly reduced its strategic impor4 tance; 

5 (4) fuel competition and consumer choice would 

6 similarly serve to end oil’s monopoly in the transpor7 tation sector and strip oil of its strategic status; 

8 (5) the current closed fuel market has allowed a 

9 cartel of petroleum exporting countries to inflate fuel 

10 prices, effectively imposing a harmful tax on the econ11 omy of the United States; 

12 (6) much of the inflated petroleum revenues the 

13 oil cartel earns at the expense of the people of the 

14 United States are used for purposes antithetical to the 

15 interests of the United States and its allies; 

16 (7) alcohol fuels, including ethanol and meth17 anol, could potentially provide significant supplies of 

18 additional fuels that could be produced in the United 

19 States and in many other countries in the Western 

20 Hemisphere that are friendly to the United States; 

21 (8) alcohol fuels can only play a major role in 

22 securing the energy independence of the United States 

23 if a substantial portion of vehicles in the United 

24 States are capable of operating on such fuels; 

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1 (9) it is not in the best interest of United States 

2 consumers or the United States Government to be con3 strained to depend solely upon petroleum resources for 

4 vehicle fuels if alcohol fuels are potentially available; 

5 (10) existing technology, in the form of flexible 

6 fuel vehicles, allows internal combustion engine cars 

7 and trucks to be produced at little or no additional 

8 cost, which are capable of operating on conventional 

9 gasoline, alcohol fuels, or any combination of such 

10 fuels, as availability or cost advantage dictates, pro11 viding a platform on which fuels can compete; 

12 (11) the necessary distribution system for such 

13 alcohol fuels will not be developed in the United 

14 States until a substantial fraction of the vehicles in 

15 the United States are capable of operating on such 

16 fuels; 

17 (12) the establishment of such a vehicle fleet and 

18 distribution system would provide a large market that 

19 would mobilize private resources to substantially ad20 vance the technology and expand the production of al21 cohol fuels in the United States and abroad; 

22 (13) the United States has an urgent national 

23 security interest to develop alcohol fuels technology, 

24 production, and distribution systems as rapidly as 

25 possible; 

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1 (14) new cars sold in the United States that are 

2 equipped with an internal combustion engine should 

3 allow for fuel competition by being flexible fuel vehi4 cles, and new diesel cars should be capable of oper5 ating on biodiesel; and 

6 (15) such an open fuel standard would help to 

7 protect the United States economy from high and 

8 volatile oil prices and from the threats caused by glob9 al instability, terrorism, and natural disaster. 

10 (b) OPEN FUEL STANDARD FOR TRANSPORTATION.— 

11 (1) Chapter 329 of title 49, United States Code, is amended 

12 by adding at the end the following: 

13 ‘‘§ 32920. Open fuel standard for transportation 

14 ‘‘(a) DEFINITIONS.—In this section: 

15 ‘‘(1) E85.—The term ‘E85’ means a fuel mixture 

16 containing 85 percent ethanol and 15 percent gasoline 

17 by volume. 

18 ‘‘(2) FLEXIBLE FUEL AUTOMOBILE.—The term 

19 ‘flexible fuel automobile’ means an automobile that 

20 has been warranted by its manufacturer to operate on 

21 gasoline, E85, and M85. 

22 ‘‘(3) FUEL CHOICE-ENABLING AUTOMOBILE.— 

23 The term ‘fuel choice-enabling automobile’ means— 

24 ‘‘(A) a flexible fuel automobile; or 

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1 ‘‘(B) an automobile that has been war2 ranted by its manufacturer to operate on bio3 diesel. 

4 ‘‘(4) LIGHT-DUTY AUTOMOBILE.—The term 

5 ‘light-duty automobile’ means— 

6 ‘‘(A) a passenger automobile; or 

7 ‘‘(B) a non-passenger automobile. 

8 ‘‘(5) LIGHT-DUTY AUTOMOBILE MANUFAC9 TURER’S ANNUAL COVERED INVENTORY.—The term 

10 ‘light-duty automobile manufacturer’s annual covered 

11 inventory’ means the number of light-duty auto12 mobiles powered by an internal combustion engine 

13 that a manufacturer, during a given calendar year, 

14 manufactures in the United States or imports from 

15 outside of the United States for sale in the United 

16 States. 

17 ‘‘(6) M85.—The term ‘M85’ means a fuel mixture 

18 containing 85 percent methanol and 15 percent gaso19 line by volume. 

20 ‘‘(b) OPEN FUEL STANDARD FOR TRANSPORTATION.— 

21 ‘‘(1) IN GENERAL.—The Secretary may promul22 gate regulations to require each light-duty automobile 

23 manufacturer’s annual covered inventory to be com24 prised of a minimum percentage of fuel-choice ena25 bling automobiles, with sufficient lead time, if the 

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1 Secretary, in coordination with the Secretary of En2 ergy and the Administrator of the Environmental 

3 Protection Agency, determines such requirement is a 

4 cost-effective way to achieve the Nation’s energy inde5 pendence and environmental objectives. The cost-effec6 tive determination shall consider the future avail7 ability of both alternative fuel supply and infrastruc8 ture to deliver the alternative fuel to the fuel-choice 

9 enabling vehicles. 

10 ‘‘(2) TEMPORARY EXEMPTION FROM REQUIRE11 MENTS.— 

12 ‘‘(A) APPLICATION.—A manufacturer may 

13 request an exemption from the requirement de14 scribed in paragraph (1) by submitting an ap15 plication to the Secretary, at such time, in such 

16 manner, and containing such information as the 

17 Secretary may require by regulation. Each such 

18 application shall specify the models, lines, and 

19 types of automobiles affected. 

20 ‘‘(B) EVALUATION.—After evaluating an 

21 application received from a manufacturer, the 

22 Secretary may at any time, under such terms 

23 and conditions, and to such extent as the Sec24 retary considers appropriate, temporarily ex25 empt, or renew the exemption of, a light-duty 

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1 automobile from the requirement described in 

2 paragraph (1) if the Secretary determines that 

3 unavoidable events not under the control of the 

4 manufacturer prevent the manufacturer of such 

5 automobile from meeting its required production 

6 volume of fuel choice-enabling automobiles, in7 cluding— 

8 ‘‘(i) a disruption in the supply of any 

9 component required for compliance with the 

10 regulations; 

11 ‘‘(ii) a disruption in the use and in12 stallation by the manufacturer of such com13 ponent; or 

14 ‘‘(iii) application to plug-in electric 

15 drive vehicles causing such vehicles to fail to 

16 meet State air quality requirements. 

17 ‘‘(C) CONSOLIDATION.—The Secretary may 

18 consolidate applications received from multiple 

19 manufacturers under subparagraph (A) if they 

20 are of a similar nature. 

21 ‘‘(D) CONDITIONS.—Any exemption granted 

22 under subparagraph (B) shall be conditioned 

23 upon the manufacturer’s commitment to recall 

24 the exempted automobiles for installation of the 

25 omitted components within a reasonable time 

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1 proposed by the manufacturer and approved by 

2 the Secretary after such components become 

3 available in sufficient quantities to satisfy both 

4 anticipated production and recall volume re5 quirements. 

6 ‘‘(E) NOTICE.—The Secretary shall publish 

7 in the Federal Register— 

8 ‘‘(i) notice of each application received 

9 from a manufacturer; 

10 ‘‘(ii) notice of each decision to grant or 

11 deny a temporary exemption; and 

12 ‘‘(iii) the reasons for granting or deny13 ing such exemptions.’’. 

14 (2) The table of contents in chapter 329 of such title 

15 is amended adding at the end the following: 

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

16 SEC. 128. TEMPORARY VEHICLE TRADE-IN PROGRAM. 

17 (a) ESTABLISHMENT.—There is established in the Na18 tional Highway Traffic Safety Administration a program 

19 to be known as the ‘‘Cash for Clunkers Temporary Vehicle 

20 Trade-in Program’’ through which the Secretary, in accord21 ance with this section and the regulations promulgated 

22 under subsection (d), shall— 

23 (1) authorize the issuance of an electronic vouch24 er, subject to the specifications set forth in subsection 

25 (c), to offset the purchase price or lease price for a 

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1 qualifying lease of a new fuel efficient automobile 

2 upon the surrender of an eligible trade-in vehicle to 

3 a dealer participating in the Program; 

4 (2) certify dealers for participation in the Pro5 gram and require that all certified dealers— 

6 (A) accept vouchers as provided in this sec7 tion as partial payment or down payment for 

8 the purchase or qualifying lease of any new fuel 

9 efficient automobile offered for sale or lease by 

10 that dealer; and 

11 (B) in accordance with subsection (c)(2), 

12 dispose of each eligible trade-in vehicle surren13 dered to the dealer under the Program; 

14 (3) in consultation with the Secretary of the 

15 Treasury, make payments to dealers for vouchers ac16 cepted by such dealers prior to April 1, 2010, in ac17 cordance with the regulations issued under subsection 

18 (d); 

19 (4) in consultation with the Secretary of the 

20 Treasury, provide for the payment of rebates to per21 sons who qualify for a rebate under subsection (c)(3); 

22 and 

23 (5) in consultation with the Secretary of the 

24 Treasury and the Inspector General of the Depart25 ment of Transportation, establish and provide for the 

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1 enforcement of measures to prevent and penalize 

2 fraud under the Program. 

3 (b) QUALIFICATIONS FOR AND VALUE OF VOUCH4 ERS.—A voucher issued under the Program shall have a 

5 value that may be applied to offset the purchase price or 

6 lease price for a qualifying lease of a new fuel efficient auto7 mobile as follows: 

8 (1) $3,500 VALUE.—The voucher may be used to 

9 offset the purchase price or lease price of the new fuel 

10 efficient automobile by $3,500 if— 

11 (A) the new fuel efficient automobile is a 

12 passenger automobile and the combined fuel 

13 economy value of such automobile is at least 4 

14 miles per gallon higher than the combined fuel 

15 economy value of the eligible trade-in vehicle; 

16 (B) the new fuel efficient automobile is a 

17 category 1 truck and the combined fuel economy 

18 value of such truck is at least 2 miles per gallon 

19 higher than the combined fuel economy value of 

20 the eligible trade-in vehicle; 

21 (C) the new fuel efficient automobile is a 

22 category 2 truck that has a combined fuel econ23 omy value of at least 15 miles per gallon and— 

24 (i) the eligible trade-in vehicle is a cat25 egory 2 truck and the combined fuel econmstockstill on PROD1PC66 with BILLS

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1 omy value of the new fuel efficient auto2 mobile is at least 1 mile per gallon higher 

3 than the combined fuel economy value of the 

4 eligible trade-in vehicle; or 

5 (ii) the eligible trade-in vehicle is a 

6 category 3 truck of model year 2001 or ear7 lier; or 

8 (D) the new fuel efficient automobile is a 

9 category 3 truck and the eligible trade-in vehicle 

10 is a category 3 truck of model year of 2001 or 

11 earlier and is of similar size or larger than the 

12 new fuel efficient automobile as determined in a 

13 manner prescribed by the Secretary. 

14 (2) $4,500 VALUE.—The voucher may be used to 

15 offset the purchase price or lease price of the new fuel 

16 efficient automobile by $4,500 if— 

17 (A) the new fuel efficient automobile is a 

18 passenger automobile and the combined fuel 

19 economy value of such automobile is at least 10 

20 miles per gallon higher than the combined fuel 

21 economy value of the eligible trade-in vehicle; 

22 (B) the new fuel efficient automobile is a 

23 category 1 truck and the combined fuel economy 

24 value of such truck is at least 5 miles per gallon 

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1 higher than the combined fuel economy value of 

2 the eligible trade-in vehicle; or 

3 (C) the new fuel efficient automobile is a 

4 category 2 truck that has a combined fuel econ5 omy value of at least 15 miles per gallon and the 

6 combined fuel economy value of such truck is at 

7 least 2 miles per gallon higher than the combined 

8 fuel economy value of the eligible trade-in vehicle 

9 and the eligible trade-in vehicle is a category 2 

10 truck. 

11 (c) PROGRAM SPECIFICATIONS.— 

12 (1) LIMITATIONS.— 

13 (A) GENERAL PERIOD OF ELIGIBILITY.—A 

14 voucher issued under the Program shall be used 

15 only for the purchase or qualifying lease of new 

16 fuel efficient automobiles that occur between 

17 March 30, 2009, and March 31, 2010. 

18 (B) NUMBER OF VOUCHERS PER PERSON

19 AND PER TRADE-IN VEHICLE.—Not more than 1 

20 voucher may be issued for a single person and 

21 not more than 1 voucher may be issued for the 

22 joint registered owners of a single eligible trade23 in vehicle. 

24 (C) NO COMBINATION OF VOUCHERS.—Only 

25 1 voucher issued under the Program may be apmstockstill on PROD1PC66 with BILLS

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1 plied toward the purchase or qualifying lease of 

2 a single new fuel efficient automobile. 

3 (D) CAP ON FUNDS FOR CATEGORY 3

4 TRUCKS.—Not more than 7.5 percent of the total 

5 funds made available for the Program shall be 

6 used for vouchers for the purchase or qualifying 

7 lease of category 3 trucks. 

8 (E) COMBINATION WITH OTHER INCENTIVES

9 PERMITTED.—The availability or use of a Fed10 eral, State, or local incentive or a State-issued 

11 voucher for the purchase or lease of a new fuel 

12 efficient automobile shall not limit the value or 

13 issuance of a voucher under the Program to any 

14 person otherwise eligible to receive such a vouch15 er. 

16 (F) NO ADDITIONAL FEES.—A dealer par17 ticipating in the program may not charge a per18 son purchasing or leasing a new fuel efficient 

19 automobile any additional fees associated with 

20 the use of a voucher under the Program. 

21 (G) NUMBER AND AMOUNT.—The total 

22 number and value of vouchers issued under the 

23 Program may not exceed the amounts appro24 priated for such purpose. 

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1 (2) DISPOSITION OF ELIGIBLE TRADE-IN VEHI2 CLES.— 

3 (A) IN GENERAL.—For each eligible trade4 in vehicle, the title of which is transferred to a 

5 dealer under the Program, the dealer shall certify 

6 to the Secretary, in such manner as the Sec7 retary shall prescribe by rule, that the vehicle, 

8 including the engine and drive train— 

9 (i) will be crushed or shredded within 

10 such period and in such manner as the Sec11 retary prescribes, or will be transferred to 

12 an entity that will ensure that the vehicle 

13 will be crushed or shredded within such pe14 riod and in such manner as the Secretary 

15 prescribes; and 

16 (ii) has not been, and will not be, sold, 

17 leased, exchanged, or otherwise disposed of 

18 for use as an automobile in the United 

19 States or in any other country, or has been 

20 or will be transferred, in such manner as 

21 the Secretary prescribes, to an entity that 

22 will ensure that the vehicle has not been, 

23 and will not be, sold, leased, exchanged, or 

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1 mobile in the United States or in any other 

2 country. 

3 (B) SAVINGS PROVISION.—Nothing in sub4 paragraph (A) may be construed to preclude a 

5 person who dismantles or disposes of the vehicle 

6 from— 

7 (i) selling any parts of the disposed ve8 hicle other than the engine block and drive 

9 train (unless the engine or drive train has 

10 been crushed or shredded); or 

11 (ii) retaining the proceeds from such 

12 sale. 

13 (C) COORDINATION.—The Secretary shall 

14 coordinate with the Attorney General to ensure 

15 that the National Motor Vehicle Title Informa16 tion System and other publicly accessible and 

17 commercially available systems are appro18 priately updated to reflect the crushing or shred19 ding of vehicles under this section and appro20 priate re-classification of the vehicles’ titles. 

21 (3) ELIGIBLE PURCHASES OR LEASES PRIOR TO

22 DATE OF ENACTMENT.—A person who purchased or 

23 leased a new fuel efficient vehicle after March 30, 

24 2009, and before the date of enactment of this section 

25 is eligible for a cash rebate equivalent to the amount 

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1 described in subsection (b)(1) if the person provides 

2 proof satisfactory to the Secretary that— 

3 (A) the person was the registered owner of 

4 an eligible trade-in vehicle; and 

5 (B) such vehicle has been disposed of in ac6 cordance with clauses (i) and (ii) of paragraph 

7 (2)(A). 

8 (d) REGULATIONS.—Notwithstanding the requirements 

9 of section 553 of title 5, United States Code, the Secretary 

10 shall promulgate final regulations to implement the Pro11 gram not later than 30 days after the date of the enactment 

12 of this section. Such regulations shall— 

13 (1) provide for a means of certifying dealers for 

14 participation in the program; 

15 (2) establish procedures for the reimbursement of 

16 dealers participating in the Program to be made 

17 through electronic transfer of funds for both the 

18 amount of the vouchers and any reasonable adminis19 trative costs incurred by the dealer as soon as prac20 ticable but no longer than 10 days after the submis21 sion of a voucher for the new fuel efficient automobile 

22 to the Secretary; 

23 (3) prohibit a dealer from using the voucher to 

24 offset any other rebate or discount offered by that 

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1 dealer or the manufacturer of the new fuel efficient 

2 automobile; 

3 (4) require dealers to disclose to the person trad4 ing in an eligible trade in vehicle the best estimate of 

5 the scrappage value of such vehicle and to permit the 

6 dealer to retain $50 of any amounts paid to the deal7 er for scrappage of the automobile as payment for 

8 any administrative costs to the dealer associated with 

9 participation in the Program; 

10 (5) establish a process by which persons who 

11 qualify for a rebate under subsection (c)(3) may 

12 apply for such rebate; 

13 (6) consistent with subsection (c)(2), establish re14 quirements and procedures for the disposal of eligible 

15 trade-in vehicles and provide such information as 

16 may be necessary to entities engaged in such disposal 

17 to ensure that such vehicles are disposed of in accord18 ance with such requirements and procedures, includ19 ing— 

20 (A) requirements for the removal and ap21 propriate disposition of refrigerants, antifreeze, 

22 lead products, mercury switches, and such other 

23 toxic or hazardous vehicle components prior to 

24 the crushing or shredding of an eligible trade-in 

25 vehicle, in accordance with rules established by 

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1 the Secretary in consultation with the Adminis2 trator, and in accordance with other applicable 

3 Federal or State requirements; and 

4 (B) a mechanism for dealers to certify to 

5 the Secretary that eligible trade-in vehicles are 

6 disposed of, or transferred to an entity that will 

7 ensure that the vehicle is disposed of, in accord8 ance with such requirements and procedures and 

9 to submit the vehicle identification numbers of 

10 the vehicles disposed of and the new fuel efficient 

11 automobile purchased with each voucher; 

12 (7) consistent with subsection (c)(2), establish re13 quirements and procedures for the disposal of eligible 

14 trade-in vehicles and provide such information as 

15 may be necessary to entities engaged in such disposal 

16 to ensure that such vehicles are disposed of in accord17 ance with such requirements and procedures; and 

18 (8) provide for the enforcement of the penalties 

19 described in subsection (e). 

20 (e) ANTI-FRAUD PROVISIONS.— 

21 (1) VIOLATION.—It shall be unlawful for any 

22 person to violate any provision under this section or 

23 any regulations issued pursuant to subsection (d). 

24 (2) PENALTIES.—Any person who commits a 

25 violation described in paragraph (1) shall be liable to 

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1 the United States Government for a civil penalty of 

2 not more than $25,000 for each violation. 

3 (f) INFORMATION TO CONSUMERS AND DEALERS.—Not 

4 later than 30 days after the date of enactment of this sec5 tion, and promptly upon the update of any relevant infor6 mation, the Secretary shall make available on an Internet 

7 website and through other means determined by the Sec8 retary information about the Program, including— 

9 (1) how to determine if a vehicle is an eligible 

10 trade-in vehicle; 

11 (2) how to participate in the Program, including 

12 how to determine participating dealers; and 

13 (3) a comprehensive list, by make and model, of 

14 new fuel efficient automobiles meeting the require15 ments of the Program. 

16 Once such information is available, the Secretary shall con17 duct a public awareness campaign to inform consumers 

18 about the Program and where to obtain additional informa19 tion. 

20 (g) RECORDKEEPING AND REPORT.— 

21 (1) DATABASE.—The Secretary shall maintain a 

22 database of the vehicle identification numbers of all 

23 new fuel efficient vehicles purchased or leased and all 

24 eligible trade-in vehicles disposed of under the Pro25 gram. 

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1 (2) REPORT.—Not later than June 30, 2010, the 

2 Secretary shall submit a report to the Committee on 

3 Energy and Commerce of the House of Representa4 tives and the Committee on Commerce, Science, and 

5 Transportation of the Senate describing the efficacy of 

6 the Program, including— 

7 (A) a description of program results, in8 cluding— 

9 (i) the total number and amount of 

10 vouchers issued for purchase or lease of new 

11 fuel efficient automobiles by manufacturer 

12 (including aggregate information con13 cerning the make, model, model year) and 

14 category of automobile; 

15 (ii) aggregate information regarding 

16 the make, model, model year, and manufac17 turing location of vehicles traded in under 

18 the Program; and 

19 (iii) the location of sale or lease; 

20 (B) an estimate of the overall increase in 

21 fuel efficiency in terms of miles per gallon, total 

22 annual oil savings, and total annual greenhouse 

23 gas reductions, as a result of the Program; and 

24 (C) an estimate of the overall economic and 

25 employment effects of the Program. 

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1 (h) DEFINITIONS.—As used in this section— 

2 (1) the term ‘‘passenger automobile’’ means a 

3 passenger automobile, as defined in section 

4 32901(a)(18) of title 49, United States Code, that has 

5 a combined fuel economy value of at least 22 miles 

6 per gallon; 

7 (2) the term ‘‘category 1 truck’’ means a nonpas8 senger automobile, as defined in section 32901(a)(17) 

9 of title 49, United States Code, that has a combined 

10 fuel economy value of at least 18 miles per gallon, ex11 cept that such term does not include a category 2 

12 truck; 

13 (3) the term ‘‘category 2 truck’’ means a large 

14 van or a large pickup, as categorized by the Secretary 

15 using the method used by the Environmental Protec16 tion Agency and described in the report entitled 

17 ‘‘Light-Duty Automotive Technology and Fuel Econ18 omy Trends: 1975 through 2008’’; 

19 (4) the term ‘‘category 3 truck’’ means a work 

20 truck, as defined in section 32901(a)(19) of title 49, 

21 United States Code; 

22 (5) the term ‘‘combined fuel economy value’’ 

23 means— 

24 (A) with respect to a new fuel efficient auto25 mobile, the number, expressed in miles per galmstockstill on PROD1PC66 with BILLS

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1 lon, centered below the words ‘‘Combined Fuel 

2 Economy’’ on the label required to be affixed or 

3 caused to be affixed on a new automobile pursu4 ant to subpart D of part 600 of title 40 Code of 

5 Federal Regulations; 

6 (B) with respect to an eligible trade-in vehi7 cle, the equivalent of the number described in 

8 subparagraph (A), and posted under the words 

9 ‘‘Estimated New EPA MPG’’ and above the word 

10 ‘‘Combined’’ for vehicles of model year 1984 

11 through 2007, or posted under the words ‘‘New 

12 EPA MPG’’ and above the word ‘‘Combined’’ for 

13 vehicles of model year 2008 or later on the 

14 fueleconomy.gov website of the Environmental 

15 Protection Agency for the make, model, and year 

16 of such vehicle; or 

17 (C) with respect to an eligible trade-in vehi18 cle manufactured between model years 1978 

19 through 1984, the equivalent of the number de20 scribed in subparagraph (A) as determined by 

21 the Secretary (and posted on the website of the 

22 National Highway Traffic Safety Administra23 tion) using data maintained by the Environ24 mental Protection Agency for the make, model, 

25 and year of such vehicle; 

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1 (6) the term ‘‘dealer’’ means a person licensed by 

2 a State who engages in the sale of new automobiles 

3 to ultimate purchasers; 

4 (7) the term ‘‘eligible trade-in vehicle’’ means an 

5 automobile or a work truck (as such terms are defined 

6 in section 32901(a) of title 49, United States Code) 

7 that, at the time it is presented for trade-in under 

8 this section— 

9 (A) is in drivable condition; 

10 (B) has been continuously insured con11 sistent with the applicable State law and reg12 istered to the same owner for a period of not less 

13 than 1 year immediately prior to such trade-in; 

14 and 

15 (C) has a combined fuel economy value of 

16 18 miles per gallon or less; 

17 (8) the term ‘‘new fuel efficient automobile’’ 

18 means an automobile described in paragraph (1), (2), 

19 (3), or (4)— 

20 (A) the equitable or legal title of which has 

21 not been transferred to any person other than the 

22 ultimate purchaser; 

23 (B) that carries a manufacturer’s suggested 

24 retail price of $45,000 or less; 

25 (C) that— 

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1 (i) for new fuel efficient automobiles 

2 weighing up to 8,500 pounds, is certified to 

3 applicable standards under section 86.1811- 

4 04 of title 40, Code of Federal Regulations; 

5 or 

6 (ii) for category 3 trucks, is certified to 

7 the applicable vehicle or engine standards 

8 under section 86.1816-08, 86-007-11, or 

9 86.008-10 of title 40, Code of Federal Regu10 lations; and 

11 (D) that has the combined fuel economy 

12 value of— 

13 (i) 22 miles per gallon for a passenger 

14 automobile; 

15 (ii) 18 miles per gallon for a category 

16 1 truck; and 

17 (iii) 15 miles per gallon for a category 

18 2 truck; 

19 (9) the term ‘‘Program’’ means the Cash for 

20 Clunkers Temporary Vehicle Trade-in Program estab21 lished by this section; 

22 (10) the term ‘‘qualifying lease’’ means a lease of 

23 an automobile for a period of not less than 5 years; 

24 (11) the term ‘‘scrappage value’’ means the 

25 amount received by the dealer for a vehicle upon 

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1 transferring title of such vehicle to the person respon2 sible for ensuring the dismantling and destroying the 

3 vehicle; 

4 (12) the term ‘‘Secretary’’ means the Secretary of 

5 Transportation acting through the National Highway 

6 Traffic Safety Administration; 

7 (13) the term ‘‘ultimate purchaser’’ means, with 

8 respect to any new automobile, the first person who 

9 in good faith purchases such automobile for purposes 

10 other than resale; and 

11 (14) the term ‘‘vehicle identification number’’ 

12 means the 17 character number used by the auto13 mobile industry to identify individual automobiles. 

14 (i) AUTHORIZATION OF APPROPRIATIONS.—There is 

15 authorized to be appropriated to the Secretary 

16 $4,000,000,000 to carry out this section. 

17 SEC. 129. DIESEL EMISSIONS REDUCTION. 

18 Subtitle G of title VII of the Energy Policy Act of 2005 

19 (42 U.S.C. 16131 et seq.) is amended— 

20 (1) in the matter preceding clause (i) in section 

21 791(3)(B), by inserting ‘‘in any State’’ after ‘‘non22 profit organization or institution’’; 

23 (2) in section 791(9), by striking ‘‘The term 

24 ‘State’ includes the District of Columbia.’’ and insert25 ing ‘‘The term ‘State’ includes the District of Colummstockstill on PROD1PC66 with BILLS

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1 bia, American Samoa, Guam, the Commonwealth of 

2 the Northern Mariana Islands, Puerto Rico, and the 

3 Virgin Islands.’’; and 

4 (3) in section 793(c)— 

5 (A) in paragraph (2)(A), by striking ‘‘51 

6 States’’ and inserting ‘‘56 States’’; 

7 (B) in paragraph (2)(A), by striking ‘‘1.96 

8 percent’’ and inserting ‘‘1.785 percent’’; 

9 (C) in paragraph (2)(B), by striking ‘‘51 

10 States’’ and inserting ‘‘56 States’’; and 

11 (D) in paragraph (2)(B), by amending 

12 clause (ii) to read as follows: 

13 ‘‘(ii) the amount of funds remaining 

14 after each State described in paragraph (1) 

15 receives the 1.785-percent allocation under 

16 this paragraph.’’. 

17 SEC. 130. LOAN GUARANTEES FOR PROJECTS TO CON18 STRUCT RENEWABLE FUEL PIPELINES. 

19 (a) DEFINITIONS.—Section 1701 of the Energy Policy 

20 Act of 2005 (42 U.S.C. 16511) is amended by adding at 

21 the end the following: 

22 ‘‘(6) RENEWABLE FUEL.—The term ‘renewable 

23 fuel’ has the meaning given the term in section 

24 211(o)(1) of the Clean Air Act (42 U.S.C. 7545(o)(1)), 

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1 except that the term shall include all ethanol and bio2 diesel. 

3 ‘‘(7) RENEWABLE FUEL PIPELINE.—The term 

4 ‘renewable fuel pipeline’ means a common carrier 

5 pipeline for transporting renewable fuel.’’. 

6 (b) RENEWABLE FUEL PIPELINE ELIGIBILITY.—Sec7 tion 1703(b) the Energy Policy Act of 2005 (42 U.S.C. 

8 16513) is amended by adding at the end the following: 

9 ‘‘(11) Renewable fuel pipelines.’’. 

10 Subtitle D—State Energy and 

11 Environment Development Accounts 

12 SEC. 131. ESTABLISHMENT OF SEED ACCOUNTS. 

13 (a) DEFINITIONS.—In this section: 

14 (1) SEED ACCOUNT.—The term ‘‘SEED Ac15 count’’ means a State Energy and Environment De16 velopment Account established pursuant to this sec17 tion. 

18 (2) STATE ENERGY OFFICE.—The term ‘‘State 

19 Energy Office’’ means a State entity eligible for 

20 grants under part D of title III of the Energy Policy 

21 and Conservation Act (42 U.S.C. 6321 et seq.). 

22 (b) ESTABLISHMENT OF PROGRAM.—The Adminis23 trator shall establish a program under which a State, 

24 through its State Energy Office or other State agency desmstockstill on PROD1PC66 with BILLS

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1 ignated by the State, may operate a State Energy and En2 vironment Development Account. 

3 (c) PURPOSE.—The purpose of each SEED Account is 

4 to serve as a common State-level repository for managing 

5 and accounting for emission allowances provided to States 

6 designated for renewable energy and energy efficiency pur7 poses. 

8 (d) REGULATIONS.—Not later than one year after the 

9 date of enactment of this Act, the Administrator shall pro10 mulgate regulations to carry out this section, including reg11 ulations— 

12 (1) to ensure that each State operates its SEED 

13 Account and any subaccounts thereof efficiently and 

14 in accordance with this Act and applicable State and 

15 Federal laws; 

16 (2) to prevent waste, fraud, and abuse; 

17 (3) to indicate the emission allowances that may 

18 be deposited in a State’s SEED Account pending dis19 tribution or use; 

20 (4) to indicate the programs and objectives au21 thorized by Federal law for which emission allow22 ances in a SEED Account may be distributed or 

23 used; 

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1 (5) to identify the forms of financial assistance 

2 and incentives that States may provide through dis3 tribution or use of SEED Accounts; and 

4 (6) to prescribe the form and content of reports 

5 that the States are required to submit under this sec6 tion on the use of SEED Accounts. 

7 (e) OPERATION.— 

8 (1) DEPOSITS.— 

9 (A) IN GENERAL.—In the allowance track10 ing system established pursuant to section 724(d) 

11 of the Clean Air Act, the Administrator shall es12 tablish a SEED Account for each State and 

13 place in it the allowances allocated pursuant to 

14 section 782(g) of the Clean Air Act to be distrib15 uted to States pursuant to sections 132 and 201 

16 of this Act. 

17 (B) FINANCIAL ACCOUNT.—A State may 

18 create a financial account associated with its 

19 SEED Account to deposit, retain, and manage 

20 any proceeds of any sale of any allowance pro21 vided pursuant to this Act pending expenditure 

22 or disbursement of those proceeds for purposes 

23 permitted under this section. The funds in such 

24 an account shall not be commingled with other 

25 funds not derived from the sale of allowances 

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1 provided to the State; however, loans made by 

2 the State from such funds pursuant to para3 graph (2)(C)(i) may be repaid into such a finan4 cial account, including any interest charged. 

5 (2) WITHDRAWALS.— 

6 (A) IN GENERAL.—All allowances distrib7 uted pursuant to sections 132 and 201, including 

8 the proceeds of any sale of such allowances, shall 

9 support renewable energy and energy efficiency 

10 programs authorized or approved by the Federal 

11 Government. 

12 (B) DEDICATED ALLOWANCES.—Allowances 

13 distributed pursuant to sections 132 and 201 

14 that are required by law to be used for specific 

15 purposes for a specified period shall be used ac16 cording to those requirements during that period. 

17 (C) UNDEDICATED ALLOWANCES.—To the 

18 extent that allowances distributed pursuant to 

19 sections 132 and 201 are not required by law to 

20 be used for specific purposes for a specified pe21 riod as described in subparagraph (B), such al22 lowances or the proceeds of their sale may be 

23 used for any of the following purposes: 

24 (i) LOANS.—Loans of allowances, or 

25 the proceeds from the sale of allowances, 

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1 may be provided, interest on commercial 

2 loans may be subsidized at an interest rate 

3 as low as zero, and other credit support 

4 may be provided to support programs au5 thorized to use SEED Account allowance 

6 value or any other renewable energy or en7 ergy efficiency purpose authorized or ap8 proved by the Federal Government. 

9 (ii) GRANTS.—Grants of allowances or 

10 the proceeds of their sale may be provided 

11 to support programs authorized to use 

12 SEED Account allowance value or any 

13 other renewable energy or energy efficiency 

14 purpose authorized or approved by the Fed15 eral Government. 

16 (iii) OTHER FORMS OF SUPPORT.—Al17 lowances or the proceeds of the sale of allow18 ances may be provided for other forms of 

19 support for programs authorized to use 

20 SEED Account allowance value or any 

21 other renewable energy or energy efficiency 

22 purpose authorized or approved by the Fed23 eral Government. 

24 (iv) ADMINISTRATIVE COSTS.—Except 

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1 thorizing or allocating allowances deposited 

2 in a SEED Account, not more than 5 per3 cent of the allowance value in a SEED Ac4 count in any year may be used to cover ad5 ministrative expenses of the SEED Account. 

6 (D) SUBACCOUNTS.—A State may request 

7 that the Administrator establish accounts for 

8 local governments that request such subaccounts 

9 to hold allowances distributed to local govern10 ments for renewable energy or energy efficiency 

11 programs authorized or approved by the Federal 

12 Government. 

13 (E) INTENDED USE PLANS.— 

14 (i) IN GENERAL.—After providing for 

15 public review and comment, each State ad16 ministering a SEED Account shall annu17 ally prepare a plan that identifies the in18 tended uses of the allowances or proceeds 

19 from the sale of allowances in its SEED Ac20 count. 

21 (ii) CONTENTS.—An intended use plan 

22 shall include— 

23 (I) a list of the projects or pro24 grams for which withdrawals from the 

25 SEED Account are intended in the 

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1 next fiscal year that begins after the 

2 date of the plan, including a descrip3 tion of each project; 

4 (II) the relationship of each of the 

5 projects or programs to an identified 

6 Federal purpose authorized by this Act, 

7 or any other Federal statute; 

8 (III) the expected terms of use of 

9 allowance value to provide assistance; 

10 (IV) the criteria and methods es11 tablished for the distribution of allow12 ances or allowance value; 

13 (V) a description of the equivalent 

14 financial value and status of the 

15 SEED Account; and 

16 (VI) a statement of the mid-term 

17 and long-term goals of the State for use 

18 of its SEED Account. 

19 (3) ACCOUNTABILITY AND TRANSPARENCY.— 

20 (A) CONTROLS AND PROCEDURES.—Any 

21 State that has a SEED Account shall establish 

22 fiscal controls and recordkeeping and accounting 

23 procedures for the SEED Account sufficient to 

24 ensure proper accounting during appropriate ac25 counting periods for distributions into the 

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1 SEED Account, transfers from the SEED Ac2 count, and SEED Account balances, including 

3 any related financial accounts. Such controls 

4 and procedures shall conform to generally accept5 ed government accounting principles. Any State 

6 that has a SEED Account shall retain records 

7 for a period of at least 5 years. 

8 (B) AUDITS.—Any State that has a SEED 

9 Account shall have an annual audit conducted of 

10 the SEED Account by an independent public ac11 countant in accordance with generally accepted 

12 auditing standards, and shall transmit the re13 sults of that audit to the Administrator. 

14 (C) STATE REPORT.—Each State admin15 istering a SEED Account shall make publicly 

16 available and submit to the Administrator a re17 port every 2 years on its activities related to its 

18 SEED Account. 

19 (D) PUBLIC INFORMATION.—Any— 

20 (i) controls and procedures established 

21 under subparagraph (A); and 

22 (ii) information obtained through au23 dits conducted under subparagraph (B), ex24 cept to the extent that it would be protected 

25 from disclosure, if it were information held 

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1 by the Federal Government, under section 

2 552(b) of title 5, United States Code, 

3 shall be made publicly available. 

4 (E) OTHER PROTECTIONS.—The Adminis5 trator shall require such additional procedures 

6 and protections as are necessary to ensure that 

7 any State that has a SEED Account will operate 

8 the SEED Account in an accountable and trans9 parent manner. 

10 (f) REQUIREMENTS FOR ELIGIBILITY.—A State’s eligi11 bility to receive allowances in its SEED Account shall de12 pend on that State’s compliance with the requirements of 

13 this Act (and the amendments made by this Act). 

14 (g) AUTHORIZATION OF APPROPRIATIONS.—There are 

15 authorized to be appropriated to the Administrator such 

16 sums as may be necessary for SEED Account operations. 

17 SEC. 132. SUPPORT OF STATE RENEWABLE ENERGY AND 

18 ENERGY EFFICIENCY PROGRAMS. 

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

20 (1) COST-EFFECTIVE.—The term ‘‘cost-effective’’, 

21 with respect to an energy efficiency program, means 

22 that the program meets the Total Resource Cost Test, 

23 which requires that the net present value of economic 

24 benefits over the life of the program or measure, in25 cluding avoided supply and delivery costs and demstockstill on PROD1PC66 with BILLS

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1 ferred or avoided investments, is greater than the net 

2 present value of the economic costs over the life of the 

3 program, including program costs and incremental 

4 costs borne by the energy consumer. 

5 (2) RENEWABLE ENERGY RESOURCE.—The term 

6 ‘‘renewable energy resource’’ shall have the meaning 

7 given that term in section 610 of the Public Utility 

8 Regulatory Policies Act of 1978 (as added by section 

9 101 of this Act). 

10 (b) DISTRIBUTION AMONG STATES.—For each vintage 

11 year from 2012 through 2050, the Administrator shall, in 

12 accordance with this section, distribute emission allowances 

13 allocated pursuant to section 782(g)(1) of the Clean Air Act 

14 not later than September 30 of the year preceding the vin15 tage year. The Administrator shall distribute the emission 

16 allowances to States for renewable energy and energy effi17 ciency programs to be deposited in and administered 

18 through the State Energy and Environment Development 

19 (SEED) Accounts established pursuant to section 131. The 

20 Administrator shall distribute allowances among the States 

21 under this section each year in accordance with the fol22 lowing formula: 

23 (1) One third of the allowances shall be divided 

24 equally among the States. 

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1 (2) One third of the allowances shall be distrib2 uted ratably among the States based on the popu3 lation of each State, as contained in the most recent 

4 reliable census data available from the Bureau of the 

5 Census, Department of Commerce, for all States at 

6 the time the Administrator calculates the formula for 

7 distribution. 

8 (3) One third of the allowances for shall be dis9 tributed ratably among the States on the basis of the 

10 energy consumption of each State as contained in the 

11 most recent State Energy Data Report available from 

12 the Energy Information Administration (or such al13 ternative reliable source as the Administrator may 

14 designate). 

15 (c) USES.—The allowances distributed to each State 

16 pursuant to this section shall be used exclusively for the 

17 purposes listed in this subsection, as set forth below: 

18 (1) Not less than 12.5 percent shall be distributed 

19 by the State to units of local government within such 

20 State to be used exclusively to support the energy effi21 ciency and renewable energy purposes listed in para22 graphs (2), (3), and (4). 

23 (2) Not less than 15 percent shall be used exclu24 sively for the following energy efficiency purposes: 

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1 (A) Implementation and enforcement of 

2 building codes adopted in compliance with sec3 tion 201. 

4 (B) Implementation of the energy efficient 

5 manufactured homes program established pursu6 ant to section 203. 

7 (C) Implementation of the building energy 

8 performance labeling program established pursu9 ant to section 204. 

10 (D) Enabling the development of a Smart 

11 Grid (as described in section 1301 of the Energy 

12 Independence and Security Act of 2007 (42 

13 U.S.C. 17381)) for State, local government, and 

14 other public buildings and facilities, including 

15 integration of renewable energy resources and 

16 distributed generation, demand response, de17 mand side management, and systems analysis. 

18 (E) Transportation planning pursuant to 

19 section 841 of the Clean Air Act. 

20 (F) Low-income community energy effi21 ciency programs that are consistent with the 

22 grant program established under section 264 of 

23 this Act. 

24 (G) Other cost-effective energy efficiency 

25 programs for end-use consumers of electricity, 

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1 natural gas, home heating oil, or propane, in2 cluding, where appropriate, programs or mecha3 nisms administered by local governments and 

4 entities other than the State. 

5 (3) Not less than 5 percent shall be used exclu6 sively for implementation of the Retrofit for Energy 

7 and Environmental Performance (REEP) program 

8 established pursuant to section 202. 

9 (4) Not less than 20 percent shall be used exclu10 sively for capital grants, tax credits, production in11 centives, loans, loan guarantees, forgivable loans, and 

12 interest rate buy-downs for— 

13 (A) re-equipping, expanding, or establishing 

14 a manufacturing facility that receives certifi15 cation from the Secretary of Energy pursuant to 

16 section 1302 of the American Recovery and Re17 investment Act of 2009 for the production of— 

18 (i) property designed to be used to 

19 produce energy from renewable energy 

20 sources; and 

21 (ii) electricity storage systems; 

22 (B) deployment of technologies to generate 

23 electricity from renewable energy sources; and 

24 (C) deployment of facilities or equipment, 

25 such as solar panels, to generate electricity or 

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1 thermal energy from renewable energy resources 

2 in and on buildings in an urban environment. 

3 (5) The remaining 47.5 percent shall be used ex4 clusively for any of the purposes described in sub5 paragraphs (A) through (F) of paragraph (2) and in 

6 paragraphs (3) and (4), provided that each State re7 ceiving emission allowances under this section shall 

8 use not less than 1 percent of such allowances for the 

9 purpose described in paragraph (2)(F). 

10 (d) REPORTING.—Each State receiving emission al11 lowances under this section shall include in its biennial re12 ports required under section 131, in accordance with such 

13 requirements as the Administrator may prescribe— 

14 (1) a list of entities receiving allowances or al15 lowance value under this section; 

16 (2) the amount and nature of allowances or al17 lowance value received by each recipient; 

18 (3) the specific purposes for which such allow19 ances or allowance value was conveyed; 

20 (4) the amount of energy savings, emission re21 ductions, renewable energy deployment, or new or re22 tooled manufacturing capacity resulting from such al23 lowances or allowance value; and 

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1 (5) an assessment of the cost-effectiveness of any 

2 energy efficiency program supported under subsection 

3 (c)(2)(F). 

4 (e) ENFORCEMENT.—If the Administrator determines 

5 that a State is not in compliance with this section, the Ad6 ministrator may withhold up to twice the number of allow7 ances that the State failed to use in accordance with the 

8 requirements of this section, that such State would otherwise 

9 be eligible to receive under this section in later years. Allow10 ances withheld pursuant to this subsection shall be distrib11 uted among the remaining States in accordance with the 

12 requirements of subsection (b). 

13 Subtitle E—Smart Grid 

14 Advancement 

15 SEC. 141. DEFINITIONS. 

16 For purposes of this subtitle: 

17 (1) The term ‘‘applicable baseline’’ means the av18 erage of the highest three annual peak demands a 

19 load-serving entity has experienced during the 5 years 

20 immediately prior to the date of enactment of this 

21 Act. 

22 (2) The term ‘‘Commission’’ means Federal En23 ergy Regulatory Commission. 

24 (3) The term ‘‘load-serving entity’’ means an en25 tity that provides electricity directly to retail conmstockstill on PROD1PC66 with BILLS

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1 sumers with the responsibility to assure power quality 

2 and reliability, including such entities that are inves3 tor-owned, publicly owned, owned by rural electric co4 operatives, or other entities. 

5 (4) The term ‘‘peak demand’’ means the highest 

6 point of electricity demand, net of any distributed 

7 electricity generation or storage from sources on the 

8 load-serving entity’s customers’ premises, during any 

9 hour on the system of a load serving entity during a 

10 calendar year, expressed in Megawatts (MW), or more 

11 than one such high point as a function of seasonal de12 mand changes. 

13 (5) The term ‘‘peak demand reduction’’ means 

14 the reduction in annual peak demand as compared to 

15 a previous baseline year or period, expressed in 

16 Megawatts (MW), whether accomplished by dimin17 ishing the end-use requirements for electricity or by 

18 use of locally stored or generated electricity to meet 

19 those requirements from distributed resources on the 

20 load-serving entity’s customers’ premises and without 

21 use of high-voltage transmission. 

22 (6) The term ‘‘peak demand reduction plan’’ 

23 means a plan developed by or for a load-serving enti24 ty that it will implement to meet its peak demand re25 duction goals. 

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1 (7) The term ‘‘peak period’’ means the time pe2 riod on the system of a load-serving entity relative to 

3 peak demand that may warrant special measures or 

4 electricity resources to maintain system reliability 

5 while meeting peak demand. 

6 (8) The term ‘‘Secretary’’ means the Secretary of 

7 Energy. 

8 (9) The term ‘‘Smart Grid’’ has the meaning 

9 provided by section 1301 of the Energy Independence 

10 and Security Act of 2007 (15 U.S.C. 17381). 

11 SEC. 142. ASSESSMENT OF SMART GRID COST EFFECTIVE12 NESS IN PRODUCTS. 

13 (a) ASSESSMENT.—Within one year after the date of 

14 enactment of this Act, the Secretary and the Administrator 

15 shall each assess the potential for cost-effective integration 

16 of Smart Grid technologies and capabilities in all products 

17 that are reviewed by the Department of Energy and the En18 vironmental Protection Agency, respectively, for potential 

19 designation as Energy Star products. 

20 (b) ANALYSIS.—(1) Within 2 years after the date of 

21 enactment of this Act, the Secretary and the Administrator 

22 shall each prepare an analysis of the potential energy sav23 ings, greenhouse gas emission reductions, and electricity 

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1 tified by the assessment in subsection (a) in the following 

2 optimal circumstances: 

3 (A) The products possessed Smart Grid capa4 bility and interoperability that is tested and proven 

5 reliable. 

6 (B) The products were utilized in an electricity 

7 utility service area which had Smart Grid capability 

8 and offered customers rate or program incentives to 

9 use the products. 

10 (C) The utility’s rates reflected national average 

11 costs, including average peak and valley seasonal and 

12 daily electricity costs. 

13 (D) Consumers using such products took full ad14 vantage of such capability. 

15 (E) The utility avoided incremental investments 

16 and rate increases related to such savings. 

17 (2) The analysis under paragraph (1) shall be consid18 ered the ‘‘best case’’ Smart Grid analysis. On the basis of 

19 such an analysis for each product, the Secretary and the 

20 Administrator shall determine whether the installation of 

21 Smart Grid capability for such a product would be cost 

22 effective. For purposes of this paragraph, the term ‘‘cost ef23 fective’’ means that the cumulative savings from using the 

24 product under the best case Smart Grid circumstances for 

25 a period of one-half of the product’s expected useful life will 

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1 be greater than the incremental cost of the Smart Grid fea2 tures included in the product. 

3 (3) To the extent that including Smart Grid capability 

4 in any products analyzed under paragraph (2) is found to 

5 be cost effective in the best case, the Secretary and the Ad6 ministrator shall, not later than 3 years after the date of 

7 enactment of this Act take each of the following actions: 

8 (A) Inform the manufacturer of such product of 

9 such finding of cost effectiveness. 

10 (B) Assess the potential contributions the devel11 opment and use of products with Smart Grid tech12 nologies bring to reducing peak demand and pro13 moting grid stability. 

14 (C) Assess the potential national energy savings 

15 and electricity cost savings that could be realized if 

16 Smart Grid potential were installed in the relevant 

17 products reviewed by the Energy Star program. 

18 (D) Assess and identify options for providing 

19 consumers information on products with Smart Grid 

20 capabilities, including the necessary conditions for 

21 cost-effective savings. 

22 (E) Submit a report to Congress summarizing 

23 the results of the assessment for each class of products, 

24 and presenting the potential energy and greenhouse 

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1 gas savings that could result if Smart Grid capability 

2 were installed and utilized on such products. 

3 SEC. 143. INCLUSIONS OF SMART GRID CAPABILITY ON AP4 PLIANCE ENERGY GUIDE LABELS. 

5 Section 324(a)(2) of the Energy Policy and Conserva6 tion Act (42 U.S.C. 6294(a)(2)) is amended by adding the 

7 following at the end: 

8 ‘‘(J)(i) Not later than 3 years after the date 

9 of enactment of this subparagraph, the Federal 

10 Trade Commission shall initiate a rulemaking to 

11 consider making a special note in a prominent 

12 manner on any ENERGY GUIDE label for any 

13 product actually including Smart Grid capa14 bility that— 

15 ‘‘(I) Smart Grid capability is a feature 

16 of that product; 

17 ‘‘(II) the use and value of that feature 

18 depended on the Smart Grid capability of 

19 the utility system in which the product was 

20 installed and the active utilization of that 

21 feature by the customer; and 

22 ‘‘(III) on a utility system with Smart 

23 Grid capability, the use of the product’s 

24 Smart Grid capability could reduce the cus25 tomer’s cost of the product’s annual opermstockstill on PROD1PC66 with BILLS

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1 ation by an estimated dollar amount range 

2 representing the result of incremental en3 ergy and electricity cost savings that would 

4 result from the customer taking full advan5 tage of such Smart Grid capability. 

6 ‘‘(ii) Not later than 3 years after the date 

7 of enactment of this subparagraph, the Commis8 sion shall complete the rulemaking initiated 

9 under clause (i).’’. 

10 SEC. 144. SMART GRID PEAK DEMAND REDUCTION GOALS. 

11 (a) GOALS.—Not later than one year after the date of 

12 enactment of this Act, load-serving entities, or, at their op13 tion, States with respect to load-serving entities that they 

14 regulate, shall determine and publish peak demand reduc15 tion goals for any load-serving entities that have an appli16 cable baseline in excess of 250 megawatts. 

17 (b) BASELINES.—(1) The Commission, in consultation 

18 with the Secretary and the Administrator, shall develop and 

19 publish, after an opportunity for public comment, a meth20 odology to provide for adjustments or normalization to a 

21 load-serving entity’s applicable baseline over time to reflect 

22 changes in the number of customers served, weather condi23 tions, general economic conditions, and any other appro24 priate factors external to peak demand management, as de25 termined by the Commission. 

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1 (2) The Commission shall support load-serving entities 

2 (including any load-serving entities with an applicable 

3 baseline of less than 250 megawatts that volunteer to par4 ticipate in achieving the purposes of this section) in deter5 mining their applicable baselines, and in developing their 

6 peak demand reduction goals. 

7 (3) The Secretary, in consultation with the Commis8 sion, the Administrator, and the North American Electric 

9 Reliability Corporation, shall develop a system and rules 

10 for measurement and verification of demand reductions. 

11 (c) PEAK DEMAND REDUCTION GOALS.—(1) Peak de12 mand reduction goals may be established for an individual 

13 load-serving entity, or, at the determination of a State or 

14 regional entity, by that State or regional entity for a larger 

15 region that shares a common system peak demand and for 

16 which peak demand reduction measures would offer re17 gional benefit. 

18 (2) A State or regional entity establishing peak de19 mand reduction goals shall cooperate, as necessary and ap20 propriate, with the Commission, the Secretary, State regu21 latory commissions, State energy offices, the North Amer22 ican Electric Reliability Corporation, and other relevant 

23 authorities. 

24 (3) In determining the applicable peak demand reduc25 tion goals, States and other jurisdictional entities may utimstockstill on PROD1PC66 with BILLS

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1 lize the results of the 2009 National Demand Response Po2 tential Assessment, as authorized by section 571 of the Na3 tional Energy Conservation Policy Act (42 U.S.C. 8279). 

4 (4) The applicable peak demand reduction goals shall 

5 provide that— 

6 (A) load-serving entities will reduce or mitigate 

7 peak demand by a minimum percentage amount from 

8 the applicable baseline to a lower peak demand dur9 ing calendar year 2012; 

10 (B) load-serving entities will reduce or mitigate 

11 peak demand by a minimum percentage greater 

12 amount from the applicable baseline to a lower peak 

13 demand during calendar year 2015; and 

14 (C) the minimum percentage reductions estab15 lished as peak demand reduction goals shall be the 

16 maximum reductions that are realistically achievable 

17 with an aggressive effort to deploy Smart Grid and 

18 peak demand reduction technologies and methods, in19 cluding but not limited to those listed in subsection 

20 (d). 

21 (d) PLAN.—Each load-serving entity shall prepare a 

22 peak demand reduction plan that demonstrates its ability 

23 to meet each applicable goal by any or a combination of 

24 the following options: 

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1 (1) Direct reduction in megawatts of peak de2 mand through energy efficiency measures (including 

3 efficient transmission wire technologies which signifi4 cantly reduce line loss compared to traditional wire 

5 technology) with reliable and continued application 

6 during peak demand periods. 

7 (2) Demonstration that an amount of megawatts 

8 equal to a stated portion of the applicable goal is con9 tractually committed to be available for peak reduc10 tion through one or more of the following: 

11 (A) Megawatts enrolled in demand response 

12 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 

16 storage devices, distributed generation resources 

17 on the entity’s customers’ premises, or other 

18 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 storage under agreement 

24 with the owner of that storage. 

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1 (D) Megawatts committed from dispatchable 

2 distributed generation demonstrated to be reli3 able under peak period conditions and in com4 pliance with air quality regulations. 

5 (E) Megawatts available from smart appli6 ances and equipment with Smart Grid capa7 bility available for direct control by the utility 

8 through agreement with the customer owning the 

9 appliances or equipment. 

10 (F) Megawatts from a demonstrated and as11 sured minimum of distributed solar electric gen12 eration capacity in instances where peak period 

13 and peak demand conditions are directly related 

14 to solar radiation and accompanying heat. 

15 (3) If any of the methods listed in subparagraph 

16 (C), (D), or (E) of paragraph (2) are relied upon to 

17 meet its peak demand reduction goals, the load-serv18 ing entity must demonstrate this capability by oper19 ating a test during the applicable calendar year. 

20 (4) Nothing in this section shall require the pub21 lication in peak demand reduction goals or in any 

22 peak demand reduction plan of any information that 

23 is confidential for competitive or other reasons or that 

24 identifies individual customers. 

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1 (e) EXISTING AUTHORITY AND REQUIREMENTS.— 

2 Nothing in this section diminishes or supersedes any au3 thority of a State or political subdivision of a State to 

4 adopt or enforce any law or regulation respecting peak de5 mand management, demand response, distributed storage, 

6 use of distributed generation, or the regulation of load-serv7 ing entities. The Commission, in consultation with States 

8 having such peak management, demand response and dis9 tributed storage programs, shall to the maximum extent 

10 practicable, facilitate coordination between the Federal pro11 gram and such State programs. 

12 (f) RELIEF.—The Commission may, for good cause, 

13 grant relief to load-serving entities from the requirements 

14 of this section. 

15 (g) OTHER LAWS.—Except as provided in subsections 

16 (e) and (f), no law or regulation shall relieve any person 

17 of any requirement otherwise applicable under this section. 

18 (h) COMPLIANCE.—(1) The Commission shall within 

19 one year after the date of enactment of this Act establish 

20 a public website where the Commission will provide infor21 mation and data demonstrating compliance by States, re22 gional entities, and load-serving entities with this section, 

23 including the success of load-serving entities in meeting ap24 plicable peak demand reduction goals. 

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1 (2) The Commission shall, by April 1 of each year be2 ginning in 2012, provide a report to Congress on compli3 ance with this section and success in meeting applicable 

4 peak demand reduction goals and, as appropriate, shall 

5 make recommendations as to how to increase peak demand 

6 reduction efforts. 

7 (3) The Commission shall note in each such report any 

8 State, political subdivision of a State, or load-serving entity 

9 that has failed to comply with this section, or is not a part 

10 of any region or group of load-serving entities serving a 

11 region that has complied with this section. 

12 (4) The Commission shall have and exercise the au13 thority to take reasonable steps to modify the process of es14 tablishing peak demand reduction goals and to accept ad15 justments to them as appropriate when sought by load-serv16 ing entities. 

17 (i) ASSISTANCE TO STATES AND FUNDING.— 

18 (1) ASSISTANCE TO STATES.—Any costs incurred 

19 by States for activities undertaken pursuant to this 

20 section shall be supported by the use of emission al21 lowances allocated to the States’ SEED Accounts pur22 suant to section 132 of this Act. To the extent that a 

23 State provides allowances to local governments within 

24 the State to implement this program, that shall be 

25 deemed a distribution of such allowances to units of 

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1 local government pursuant to subsection (c)(1) of that 

2 section. 

3 (2) FUNDING.—There are authorized to be ap4 propriated such sums as may be necessary to the 

5 Commission, the Secretary, and the Administrator to 

6 carry out the provisions of this section. 

7 SEC. 145. REAUTHORIZATION OF ENERGY EFFICIENCY PUB8 LIC INFORMATION PROGRAM TO INCLUDE 

9 SMART GRID INFORMATION. 

10 (a) IN GENERAL.—Section 134 of the Energy Policy 

11 Act of 2005 (42 U.S.C. 15832) is amended as follows: 

12 (1) By amending the section heading to read as 

13 follows: ‘‘ENERGY EFFICIENCY AND SMART GRID

14 PUBLIC INFORMATION INITIATIVE’’. 

15 (2) In paragraph (1) of subsection (a) by strik16 ing ‘‘reduce energy consumption during the 4-year pe17 riod beginning on the date of enactment of this Act’’ 

18 and inserting ‘‘increase energy efficiency and to 

19 adopt Smart Grid technology and practices’’. 

20 (3) In paragraph (2) of subsection (a) by strik21 ing ‘‘benefits to consumers of reducing’’ and inserting 

22 ‘‘economic and environmental benefits to consumers 

23 and the United States of optimizing’’. 

24 (4) In subsection (a) by inserting at the begin25 ning of paragraph (3) ‘‘the effect of energy efficiency 

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1 and Smart Grid capability in reducing energy and 

2 electricity prices throughout the economy, together 

3 with’’. 

4 (5) In subsection (a)(4) by redesignating sub5 paragraph (D) as (E), by striking ‘‘and’’ at the end 

6 of subparagraph (C), and by inserting after subpara7 graph (C) the following: 

8 ‘‘(D) purchasing and utilizing equipment 

9 that includes Smart Grid features and capa10 bility; and’’. 

11 (6) In subsection (c), by striking ‘‘Not later than 

12 July 1, 2009,’’ and inserting, ‘‘For each year when 

13 appropriations pursuant to the authorization in this 

14 section exceed $10,000,000,’’. 

15 (7) In subsection (d) by striking ‘‘2010’’ and in16 serting ‘‘2020’’. 

17 (8) In subsection (e) by striking ‘‘2010’’ and in18 serting ‘‘2020’’. 

19 (b) TABLE OF CONTENTS.—The item relating to sec20 tion 134 in the table of contents for the Energy Policy Act 

21 of 2005 (42 U.S.C. 15801 and following) is amended to read 

22 as follows: 

‘‘Sec. 134. Energy efficiency and Smart Grid public information initiative.’’. 

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1 SEC. 146. INCLUSION OF SMART GRID FEATURES IN APPLI2 ANCE REBATE PROGRAM. 

3 (a) AMENDMENTS.—Section 124 of the Energy Policy 

4 Act of 2005 (42 U.S.C. 15821) is amended as follows: 

5 (1) By amending the section heading to read as 

6 follows: ‘‘ENERGY EFFICIENT AND SMART APPLI7 ANCE REBATE PROGRAM.’’. 

8 (2) By redesignating paragraphs (4) and (5) of 

9 subsection (a) as paragraphs (5) and (6), respectively, 

10 and inserting after paragraph (3) the following: 

11 ‘‘(4) SMART APPLIANCE.—The term ‘smart ap12 pliance’ means a product that the Administrator of 

13 the Environmental Protection Agency or the Sec14 retary of Energy has determined qualifies for such a 

15 designation in the Energy Star program pursuant to 

16 section 142 of the American Clean Energy and Secu17 rity Act of 2009, or that the Secretary or the Admin18 istrator has separately determined includes the rel19 evant Smart Grid capabilities listed in section 1301 

20 of the Energy Independence and Security Act of 2007 

21 (15 U.S.C. 17381).’’. 

22 (3) In subsection (b)(1) by inserting ‘‘and 

23 smart’’ after ‘‘efficient’’ and by inserting after ‘‘prod24 ucts’’ the first place it appears ‘‘, including products 

25 designated as being smart appliances’’. 

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1 (4) In subsection (b)(3), by inserting ‘‘the ad2 ministration of’’ after ‘‘carry out’’. 

3 (5) In subsection (d), by inserting ‘‘the adminis4 tration of’’ after ‘‘carrying out’’ and by inserting ‘‘, 

5 and up to 100 percent of the value of the rebates pro6 vided pursuant to this section’’ before the period at 

7 the end. 

8 (6) In subsection (e)(3), by inserting ‘‘, with sep9 arate consideration as applicable if the product is 

10 also a smart appliance,’’ after ‘‘Energy Star product’’ 

11 the first place it appears and by inserting ‘‘or smart 

12 appliance’’ before the period at the end. 

13 (7) In subsection (f), by striking ‘‘$50,000,000’’ 

14 through the period at the end and inserting 

15 ‘‘$100,000,000 for each fiscal year from 2010 through 

16 2015.’’. 

17 (b) TABLE OF CONTENTS.—The item relating to sec18 tion 124 in the table of contents for the Energy Policy Act 

19 of 2005 (42 U.S.C. 15801 and following) is amended to read 

20 as follows: 

‘‘Sec. 124. Energy efficient and smart appliance rebate program.’’. 

21 Subtitle F—Transmission Planning 

22 SEC. 151. TRANSMISSION PLANNING. 

23 Part II of the Federal Power Act (16 U.S.C. 824 et 

24 seq.) is amended by adding after section 216 the following 

25 new section: 

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1 ‘‘SEC. 216A. TRANSMISSION PLANNING. 

2 ‘‘(a) FEDERAL POLICY.— 

3 ‘‘(1) OBJECTIVES.—It is the policy of the United 

4 States that regional electric grid planning should fa5 cilitate the deployment of renewable and other zero6 carbon energy sources for generating electricity to re7 duce greenhouse gas emissions while ensuring reli8 ability, reducing congestion, ensuring cyber-security, 

9 and providing for cost-effective electricity services 

10 throughout the United States. 

11 ‘‘(2) OPTIONS.—In addition to the policy under 

12 paragraph (1), it is the policy of the United States 

13 that regional electric grid planning to meet these ob14 jectives should take into account all significant de15 mand-side and supply-side options, including energy 

16 efficiency, distributed generation, renewable energy 

17 and zero-carbon electricity generation technologies, 

18 smart-grid technologies and practices, demand re19 sponse, electricity storage, voltage regulation tech20 nologies, high capacity conductors with at least 25 

21 percent greater efficiency than traditional ACSR 

22 (aluminum stranded conductors steel reinforced) con23 ductors, superconductor technologies, underground 

24 transmission technologies, and new conventional elec25 tric transmission capacity and corridors. 

26 ‘‘(b) PLANNING.— 

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1 ‘‘(1) PLANNING PRINCIPLES.—Not later than 1 

2 year after the date of enactment of this section, the 

3 Commission shall adopt, after notice and opportunity 

4 for comment, national electricity grid planning prin5 ciples derived from the Federal policy established 

6 under subsection (a) to be applied in ongoing and fu7 ture transmission planning that may implicate inter8 state transmission of electricity. 

9 ‘‘(2) REGIONAL PLANNING ENTITIES.—Not later 

10 than 3 months after the date of adoption by the Com11 mission of national electricity grid planning prin12 ciples pursuant to paragraph (1), entities that con13 duct or may conduct transmission planning pursuant 

14 to State or Federal law or regulation, including 

15 States, entities designated by States, public utility 

16 transmission providers, operators and owners, re17 gional organizations, and electric utilities, and that 

18 are willing to incorporate the national electricity grid 

19 planning principles adopted by the Commission in 

20 their electric grid planning, shall identify themselves 

21 and the regions for which they propose to develop 

22 plans to the Commission. 

23 ‘‘(3) COORDINATION OF REGIONAL PLANNING EN24 TITIES.—The Commission shall encourage regional 

25 planning entities described under paragraph (2) to 

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1 cooperate and coordinate across regions and to har2 monize regional electric grid planning with planning 

3 in adjacent or overlapping jurisdictions to the max4 imum extent feasible. The Commission shall work 

5 with States, public utilities transmission providers, 

6 load-serving entities, transmission operators, and 

7 other organizations to resolve any conflict or competi8 tion among proposed planning entities in order to 

9 build consensus and promote the Federal policy estab10 lished under subsection (a). The Commission shall 

11 seek to ensure that planning that is consistent with 

12 the national electricity grid planning principles 

13 adopted pursuant to paragraph (1) is conducted in 

14 all regions of the United States and the territories. 

15 ‘‘(4) RELATION TO EXISTING PLANNING POL16 ICY.—In implementing the Federal policy established 

17 under subsection (a), the Commission shall— 

18 ‘‘(A) incorporate any ongoing planning ef19 forts undertaken pursuant to section 217; and 

20 ‘‘(B) consult with and invite the participa21 tion of the Secretary of Energy in relationship 

22 to the Secretary’s duties pursuant to section 216. 

23 ‘‘(5) ASSISTANCE.— 

24 ‘‘(A) IN GENERAL.—The Commission shall 

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1 gional grid planning processes conducted by re2 gional planning entities. The Commission may 

3 provide planning resources and assistance as re4 quired or as requested by regional planning enti5 ties, including system data, cost information, 

6 system analysis, technical expertise, modeling 

7 support, dispute resolution services, and other 

8 assistance to regional planning entities, as ap9 propriate. 

10 ‘‘(B) AUTHORIZATION.—There are author11 ized to be appropriated such sums as may be 

12 necessary to carry out this paragraph. 

13 ‘‘(6) CONFLICT RESOLUTION.—In the event that 

14 regional grid plans conflict, the Commission shall as15 sist the regional planning entities in resolving such 

16 conflicts in order to achieve the objectives of the Fed17 eral policy established under subsection (a). 

18 ‘‘(7) SUBMISSION OF PLANS.—The Commission 

19 shall require regional planning entities to submit ini20 tial regional electric grid plans to the Commission 

21 not later than 18 months after the date the Commis22 sion promulgates national electricity grid planning 

23 principles pursuant to paragraph (1). Regional elec24 tric grid plans should, in general, be developed from 

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1 ning input reflecting individual utility service areas. 

2 Regional plans may then in turn be combined into 

3 larger regional plans, up to interconnection-wide and 

4 national plans, as appropriate and necessary as de5 termined by the Commission. The Commission shall 

6 review such plans for consistency with the national 

7 grid planning principles and may return a plan to 

8 one or more planning entities for further consider9 ation, along with the Commission’s own recommenda10 tions for resolution of any conflict or for improve11 ment. To the extent practicable, all plans submitted 

12 to the Commission shall be public documents and 

13 available on the Commission’s website. 

14 ‘‘(8) MULTI-REGIONAL MEETINGS.—As regional 

15 grid plans are submitted to the Commission, the Com16 mission may convene multi-regional meetings to dis17 cuss regional grid plan consistency and integration, 

18 including requirements for multi-regional projects, 

19 and to resolve any conflicts that emerge from such 

20 multi-regional projects. The Commission shall provide 

21 its recommendations for eliminating any inter-re22 gional conflicts. 

23 ‘‘(9) REPORT TO CONGRESS.—Not later than 3 

24 years after the date of enactment of this section, the 

25 Commission shall provide a report to Congress conmstockstill on PROD1PC66 with BILLS

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1 taining the results of the regional grid planning proc2 ess, including summaries of the adopted regional 

3 plans. The Commission shall provide an electronic 

4 version of its report on its website with links to all 

5 regional and sub-regional plans taken into account. 

6 The Commission shall note and provide its rec7 ommended resolution for any conflicts not resolved 

8 during the planning process. The Commission shall 

9 make any recommendations to Congress on the appro10 priate Federal role or support required to address the 

11 needs of the electric grid, including recommendations 

12 for addressing any needs that are beyond the reach of 

13 existing State and Federal authority.’’. 

14 SEC. 152. NET METERING FOR FEDERAL AGENCIES. 

15 (a) STANDARD.—Subsection (b) of section 113 of the 

16 Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 

17 2623) is amended by adding the following new paragraph 

18 at the end thereof: 

19 ‘‘(6) NET METERING FOR FEDERAL AGENCIES.— 

20 Each electric utility shall offer to arrange (either di21 rectly or through a third party) to make interconnec22 tion and net metering available to Federal Govern23 ment agencies, offices, or facilities in accordance with 

24 the requirements of section 115(j). The standard 

25 under this paragraph shall apply only to electric utilmstockstill on PROD1PC66 with BILLS

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1 ities that sold over 4,000,000 megawatt hours of elec2 tricity in the preceding year to the ultimate con3 sumers thereof. In the case of a standard under this 

4 paragraph, a period of 1 year after the date of the en5 actment of this section shall be substituted for the 2- 

6 year period referred to in other provisions of this sec7 tion.’’. 

8 (b) SPECIAL RULES.—Section 115 of the Public Util9 ity Regulatory Policies Act of 1978 (16 U.S.C. 2625) is 

10 amended by adding the following new subsection at the end 

11 thereof: 

12 ‘‘(j) NET METERING FOR FEDERAL AGENCIES.—(1) 

13 The standard under paragraph (6) of section 113(b) shall 

14 require that rates and charges and contract terms and con15 ditions for the sale of electric energy to the Federal Govern16 ment or agency shall be the same as the rates and charges 

17 and contract terms and conditions that would be applicable 

18 if the agency did not own or operate a qualified generation 

19 unit and use a net metering system. 

20 ‘‘(2)(A) The standard under paragraph (6) of section 

21 113(b) shall require that each electric utility shall arrange 

22 to provide to the Government office or agency that qualifies 

23 for net metering an electrical energy meter capable of net 

24 metering and measuring, to the maximum extent prac25 ticable, the flow of electricity to or from the customer, using 

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1 a single meter and single register, the cost of which shall 

2 be recovered from the customer. 

3 ‘‘(B) In a case in which it is not practicable to provide 

4 a meter under subparagraph (A), the utility (either directly 

5 or through a third party) shall, at the expense of the utility 

6 install 1 or more of those electric energy meters. 

7 ‘‘(3)(A) The standard under paragraph (6) of section 

8 113(b) shall require that each electric utility shall calculate 

9 the electric energy consumption for the Government office 

10 or agency using a net metering system that meets the re11 quirements of this subsection and paragraph (6) of section 

12 113(b) and shall measure the net electricity produced or 

13 consumed during the billing period using the metering in14 stalled in accordance with this paragraph. 

15 ‘‘(B) If the electricity supplied by the retail electric 

16 supplier exceeds the electricity generated by the Government 

17 office or agency during the billing period, the Government 

18 office or agency shall be billed for the net electric energy 

19 supplied by the retail electric supplier in accordance with 

20 normal billing practices. 

21 ‘‘(C) If electric energy generated by the Government 

22 office or agency exceeds the electric energy supplied by the 

23 retail electric supplier during the billing period, the Gov24 ernment office or agency shall be billed for the appropriate 

25 customer charges for that billing period and credited for 

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1 the excess electric energy generated during the billing pe2 riod, with the credit appearing as a kilowatt-hour credit 

3 on the bill for the following billing period. 

4 ‘‘(D) Any kilowatt-hour credits provided to the Gov5 ernment office or agency as provided in this subsection shall 

6 be applied to the Government office or agency electric en7 ergy consumption on the following billing period bill (except 

8 for a billing period that ends in the next calendar year). 

9 At the beginning of each calendar year, any unused kilo10 watt-hour credits remaining from the preceding year will 

11 carry over to the new year. 

12 ‘‘(4) The standard under paragraph (6) of section 

13 113(b) shall require that each electric utility shall offer a 

14 meter and retail billing arrangement that has time-differen15 tiated rates. The kilowatt-hour credit shall be based on the 

16 ratio representing the difference in retail rates for each 

17 time-of-use rate, or the credits shall be reflected on the bill 

18 of the Government office or agency as a monetary credit 

19 reflecting retail rates at the time of generation of the electric 

20 energy by the customer-generator. 

21 ‘‘(5) The standard under paragraph (6) of section 

22 113(b) shall require that the qualified generation unit, 

23 interconnection standards, and net metering system used by 

24 the Government office or agency shall meet all applicable 

25 safety and performance and reliability standards estabmstockstill on PROD1PC66 with BILLS

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1 lished by the National Electrical Code, the Institute of Elec2 trical and Electronics Engineers, Underwriters Labora3 tories, and the American National Standards Institute. 

4 ‘‘(6) The standard under paragraph (6) of section 

5 113(b) shall require that electric utilities shall not make ad6 ditional charges, including standby charges, for equipment 

7 or services for safety or performance that are in addition 

8 to those necessary to meet the other standards and require9 ments of this subsection and paragraph (6) of section 

10 113(b). 

11 ‘‘(7) For purposes of this subsection and paragraph (6) 

12 of section 113(b): 

13 ‘‘(A) The term ‘Government’ means any office, 

14 facility, or agency of the Federal Government. 

15 ‘‘(B) The term ‘customer-generator’ means the 

16 owner or operator of a electricity generation unit. 

17 ‘‘(C) The term ‘electric generation unit’ means 

18 any renewable electric generation unit that is owned, 

19 operated, or sited on a Federal Government facility. 

20 ‘‘(D) The term ‘net metering’ means the process 

21 of— 

22 ‘‘(i) measuring the difference between the 

23 electricity supplied to a customer-generator and 

24 the electricity generated by the customer-gener25 ator that is delivered to a utility at the same 

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1 point of interconnection during an applicable 

2 billing period; and 

3 ‘‘(ii) providing an energy credit to the cus4 tomer-generator in the form of a kilowatt-hour 

5 credit for each kilowatt-hour of electricity pro6 duced by the customer-generator from an electric 

7 generation unit.’’. 

8 (c) SAVINGS PROVISION.—If this section or a portion 

9 of this section is determined to be invalid or unenforceable, 

10 that shall not affect the validity or enforceability of any 

11 other provision of this Act. 

12 SEC. 153. SUPPORT FOR QUALIFIED ADVANCED ELECTRIC 

13 TRANSMISSION MANUFACTURING PLANTS, 

14 QUALIFIED HIGH EFFICIENCY TRANSMISSION 

15 PROPERTY, AND QUALIFIED ADVANCED ELEC16 TRIC TRANSMISSION PROPERTY. 

17 (a) LOAN GUARANTEES PRIOR TO SEPTEMBER 30, 

18 2011.—Section 1705(a) of the Energy Policy Act of 2005 

19 (42 U.S.C. 16515(a)), as added by section 406 of the Amer20 ican Recovery and Reinvestment Act of 2009 (Public Law 

21 109-58; 119 Stat. 594) is amended by adding the following 

22 new paragraph at the end thereof: 

23 ‘‘(5) The development, construction, acquisition, 

24 retrofitting, or engineering integration of a qualified 

25 advanced electric transmission manufacturing plant 

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1 or the construction of a qualified high efficiency 

2 transmission property or a qualified advanced electric 

3 transmission property (whether by construction of 

4 new facilities or the modification of existing facili5 ties). For purposes of this paragraph: 

6 ‘‘(A) The term ‘qualified advanced electric 

7 transmission property’ means any high voltage 

8 electric transmission cable, related substation, 

9 converter station, or other integrated facility 

10 that— 

11 ‘‘(i) utilizes advanced ultra low resist12 ance superconductive material or other ad13 vanced technology that has been determined 

14 by the Secretary of Energy as— 

15 ‘‘(I) reasonably likely to become 

16 commercially viable within 10 years 

17 after the date of enactment of this 

18 paragraph; 

19 ‘‘(II) capable of reliably transmit20 ting at least 5 gigawatts of high-volt21 age electric energy for distances greater 

22 than 300 miles with energy losses not 

23 exceeding 3 percent of the total power 

24 transported; and 

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1 ‘‘(III) not creating an electro2 magnetic field; 

3 ‘‘(ii) has been determined by an appro4 priate energy regulatory body, upon appli5 cation, to be in the public interest and 

6 thereby eligible for inclusion in regulated 

7 rates; and 

8 ‘‘(iii) can be located safely and eco9 nomically in a permanent underground 

10 right of way not to exceed 25 feet in width. 

11 The term ‘qualified advanced electric trans12 mission property’ shall not include any property 

13 placed in service after December 31, 2016. 

14 ‘‘(B)(i) The term ‘qualified high efficiency 

15 transmission property’ means any high voltage 

16 overhead electric transmission line, related sub17 station, or other integrated facility that— 

18 ‘‘(I) utilizes advanced conductor core 

19 technology that— 

20 ‘‘(aa) has been determined by the 

21 Secretary of Energy as reasonably like22 ly to become commercially viable with23 in 10 years after the date of enactment 

24 of this paragraph; 

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1 ‘‘(bb) is suitable for use on trans2 mission lines up to 765kV; and 

3 ‘‘(cc) exhibits power losses at least 

4 30 percent lower than that of trans5 mission lines using conventional 

6 ‘ACSR’ conductors; 

7 ‘‘(II) has been determined by an ap8 propriate energy regulatory body, upon ap9 plication, to be in the public interest and 

10 thereby eligible for inclusion in regulated 

11 rates; and 

12 ‘‘(III) can be located safely and eco13 nomically in a right of way not to exceed 

14 that used by conventional ‘ACSR’ conduc15 tors; and 

16 ‘‘(ii) The term ‘qualified high efficiency 

17 transmission property’ shall not include any 

18 property placed in service after December 31, 

19 2016. 

20 ‘‘(C) The term ‘qualified advanced electric 

21 transmission manufacturing plant’ means any 

22 industrial facility located in the United States 

23 which can be equipped, re-equipped, expanded, 

24 or established to produce in whole or in part 

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1 qualified advanced electric transmission prop2 erty.’’. 

3 (b) ADDITIONAL LOAN GUARANTEE AUTHORITY.—Sec4 tion 1703 of the Energy Policy Act of 2005 (42 U.S.C. 

5 16513) is amended by adding the following new paragraph 

6 at the end of subsection (b): 

7 ‘‘(12) The development, construction, acquisition, 

8 retrofitting, or engineering integration of a qualified 

9 advanced electric transmission manufacturing plant 

10 or the construction of a qualified advanced electric 

11 transmission property (whether by construction of 

12 new facilities or the modification of existing facili13 ties). For purposes of this paragraph, the terms 

14 ‘qualified advanced electric transmission property’ 

15 and ‘qualified advanced electric transmission manu16 facturing plant’ have the meanings provided by sec17 tion 1705(a)(5).’’. 

18 (c) GRANTS.—The Secretary of Energy is authorized 

19 to provide grants for up to 50 percent of costs incurred in 

20 connection with the development, construction, acquisition 

21 of components for, or engineering of a qualified advanced 

22 electric transmission property defined in paragraph (5) of 

23 section 1705(a) of the Energy Policy Act of 2005 (42 U.S.C. 

24 16515(a)). Such grants may only be made to the first 

25 project which qualifies under that paragraph. There are aumstockstill on PROD1PC66 with BILLS

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1 thorized to be appropriated for purposes of this subsection 

2 not more than $100,000,000 for fiscal year 2010. The 

3 United States shall take no equity or other ownership inter4 est in the qualified advanced electric transmission manufac5 turing plant or qualified advanced electric transmission 

6 property for which funding is provided under this sub7 section. 

8 Subtitle G—Technical Corrections 

9 to Energy Laws 

10 SEC. 161. TECHNICAL CORRECTIONS TO ENERGY INDE11 PENDENCE AND SECURITY ACT OF 2007. 

12 (a) TITLE III—ENERGY SAVINGS THROUGH IM13 PROVED STANDARDS FOR APPLIANCE AND LIGHTING.—(1) 

14 Section 325(u) of the Energy Policy and Conservation Act 

15 (42 U.S.C. 6295(u)) (as amended by section 301(c) of the 

16 Energy Independence and Security Act of 2007 (121 Stat. 

17 1550)) is amended— 

18 (A) by redesignating paragraph (7) as 

19 paragraph (4); and 

20 (B) in paragraph (4) (as so redesignated), 

21 by striking ‘‘supplies is’’ and inserting ‘‘supply 

22 is’’. 

23 (2) Section 302 of the Energy Independence and Secu24 rity Act of 2007 (121 Stat. 1551)) is amended— 

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1 (A) in subsection (a), by striking ‘‘end of the 

2 paragraph’’ and inserting ‘‘end of subparagraph 

3 (A)’’; and 

4 (B) in subsection (b), by striking ‘‘6313(a)’’ and 

5 inserting ‘‘6314(a)’’. 

6 (3) Section 343(a)(1) of the Energy Policy and Con7 servation Act (42 U.S.C. 6313(a)(1)) (as amended by sec8 tion 302(b) of the Energy Independence and Security Act 

9 of 2007 (121 Stat. 1551)) is amended— 

10 (A) by striking ‘‘TEST PROCEDURES’’ and all 

11 that follows through ‘‘At least once’’ and inserting 

12 ‘‘TEST PROCEDURES.—At least once’’; and 

13 (B) by redesignating clauses (i) and (ii) as sub14 paragraphs (A) and (B), respectively (and by moving 

15 the margins of such subparagraphs 2 ems to the left). 

16 (4) Section 342(a)(6) of the Energy Policy and Con17 servation Act (42 U.S.C. 6313(a)(6)) (as amended by sec18 tion 305(b)(2) of the Energy Independence and Security Act 

19 of 2007 (121 Stat. 1554)) is amended— 

20 (A) in subparagraph (B)— 

21 (i) by striking ‘‘If the Secretary’’ and in22 serting the following: 

23 ‘‘(i) IN GENERAL.—If the Secretary’’; 

24 (ii) by striking ‘‘clause (ii)(II)’’ and insert25 ing ‘‘subparagraph (A)(ii)(II)’’; 

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1 (iii) by striking ‘‘clause (i)’’ and inserting 

2 ‘‘subparagraph (A)(i)’’; and 

3 (iv) by adding at the end the following: 

4 ‘‘(ii) FACTORS.—In determining 

5 whether a standard is economically justified 

6 for the purposes of subparagraph 

7 (A)(ii)(II), the Secretary shall, after receiv8 ing views and comments furnished with re9 spect to the proposed standard, determine 

10 whether the benefits of the standard exceed 

11 the burden of the proposed standard by, to 

12 the maximum extent practicable, consid13 ering— 

14 ‘‘(I) the economic impact of the 

15 standard on the manufacturers and on 

16 the consumers of the products subject to 

17 the standard; 

18 ‘‘(II) the savings in operating 

19 costs throughout the estimated average 

20 life of the product in the type (or class) 

21 compared to any increase in the price 

22 of, or in the initial charges for, or 

23 maintenance expenses of, the products 

24 that are likely to result from the impo25 sition of the standard; 

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1 ‘‘(III) the total projected quantity 

2 of energy savings likely to result di3 rectly from the imposition of the stand4 ard; 

5 ‘‘(IV) any lessening of the utility 

6 or the performance of the products like7 ly to result from the imposition of the 

8 standard; 

9 ‘‘(V) the impact of any lessening 

10 of competition, as determined in writ11 ing by the Attorney General, that is 

12 likely to result from the imposition of 

13 the standard; 

14 ‘‘(VI) the need for national energy 

15 conservation; and 

16 ‘‘(VII) other factors the Secretary 

17 considers relevant. 

18 ‘‘(iii) ADMINISTRATION.— 

19 ‘‘(I) ENERGY USE AND EFFI20 CIENCY.—The Secretary may not pre21 scribe any amended standard under 

22 this paragraph that increases the max23 imum allowable energy use, or de24 creases the minimum required energy 

25 efficiency, of a covered product. 

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1 ‘‘(II) UNAVAILABILITY.— 

2 ‘‘(aa) IN GENERAL.—The 

3 Secretary may not prescribe an 

4 amended standard under this sub5 paragraph if the Secretary finds 

6 (and publishes the finding) that 

7 interested persons have established 

8 by a preponderance of the evi9 dence that a standard is likely to 

10 result in the unavailability in the 

11 United States in any product 

12 type (or class) of performance 

13 characteristics (including reli14 ability, features, sizes, capacities, 

15 and volumes) that are substan16 tially the same as those generally 

17 available in the United States at 

18 the time of the finding of the Sec19 retary. 

20 ‘‘(bb) OTHER TYPES OR

21 CLASSES.—The failure of some 

22 types (or classes) to meet the cri23 terion established under this sub24 clause shall not affect the deter25 mination of the Secretary on 

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1 whether to prescribe a standard 

2 for the other types or classes.’’; 

3 and 

4 (B) in subparagraph (C)(iv), by striking ‘‘An 

5 amendment prescribed under this subsection’’ and in6 serting ‘‘Notwithstanding subparagraph (D), an 

7 amendment prescribed under this subparagraph’’. 

8 (5) Section 342(a)(6)(B)(iii) of the Energy Policy and 

9 Conservation Act (as added by section 306(c) of the Energy 

10 Independence and Security Act of 2007) is transferred and 

11 redesignated as clause (vi) of section 342(a)(6)(C) of the 

12 Energy Policy and Conservation Act (as amended by sec13 tion 305(b)(2) of the Energy Independence and Security Act 

14 of 2007). 

15 (6) Section 340 of the Energy Policy and Conservation 

16 Act (42 U.S.C. 6311) (as amended by sections 312(a)(2) 

17 and 314(a) of the Energy Independence and Security Act 

18 of 2007 (121 Stat. 1564, 1569)) is amended by redesig19 nating paragraphs (22) and (23) (as added by section 

20 314(a) of that Act) as paragraphs (23) and (24), respec21 tively. 

22 (7) Section 345 of the Energy Policy and Conservation 

23 Act (42 U.S.C. 6316) (as amended by section 312(e) of the 

24 Energy Independence and Security Act of 2007 (121 Stat. 

25 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 section 

10 313(a) of the Energy Independence and Security Act of 

11 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, single17 speed, foot-mounting, polyphase squirrel18 cage induction motor of the National Elec19 trical Manufacturers Association, Design A 

20 and B, continuous rated, operating on 230/ 

21 460 volts and constant 60 Hertz line power 

22 as defined in NEMA Standards Publication 

23 MG1-1987; or 

24 ‘‘(ii) a motor incorporating the design 

25 elements described in clause (i), but is conmstockstill on PROD1PC66 with BILLS

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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 volts, 

14 or both, or can be operated on 230 

15 volts or 460 volts, or both).’’; and 

16 (B) by redesignating subparagraphs (C) through 

17 (I) as subparagraphs (B) through (H), respectively. 

18 (9)(A) Section 342(b) of the Energy Policy and Con19 servation Act (42 U.S.C. 6313(b)) is amended— 

20 (i) in paragraph (1), by striking ‘‘paragraph (2)’’ and 

21 inserting ‘‘paragraph (3)’’; 

22 (ii) by redesignating paragraphs (2) and (3) as para23 graphs (3) and (4); 

24 (iii) by inserting after paragraph (1) the following: 

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1 ‘‘(2) STANDARDS EFFECTIVE BEGINNING DECEM2 BER 19, 2010.— 

3 ‘‘(A) IN GENERAL.—Except for definite pur4 pose motors, special purpose motors, and those 

5 motors exempted by the Secretary under para6 graph (3) and except as provided for in subpara7 graphs (B), (C), and (D), each electric motor 

8 manufactured with power ratings from 1 to 200 

9 horsepower (alone or as a component of another 

10 piece of equipment) on or after December 19, 

11 2010, shall have a nominal full load efficiency of 

12 not less than the nominal full load efficiency de13 scribed in NEMA MG-1 (2006) Table 12-12. 

14 ‘‘(B) FIRE PUMP ELECTRIC MOTORS.—Ex15 cept for those motors exempted by the Secretary 

16 under paragraph (3), each fire pump electric 

17 motor manufactured with power ratings from 1 

18 to 200 horsepower (alone or as a component of 

19 another piece of equipment) on or after December 

20 19, 2010, shall have a nominal full load effi21 ciency that is not less than the nominal full load 

22 efficiency described in NEMA MG-1 (2006) 

23 Table 12-11. 

24 ‘‘(C) NEMA DESIGN B ELECTRIC MO25 TORS.—Except for those motors exempted by the 

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1 Secretary under paragraph (3), each NEMA De2 sign B electric motor with power ratings of more 

3 than 200 horsepower, but not greater than 500 

4 horsepower, manufactured (alone or as a compo5 nent of another piece of equipment) on or after 

6 December 19, 2010, shall have a nominal full 

7 load efficiency of not less than the nominal full 

8 load efficiency described in NEMA MG-1 (2006) 

9 Table 12-11. 

10 ‘‘(D) MOTORS INCORPORATING CERTAIN DE11 SIGN ELEMENTS.—Except for those motors ex12 empted by the Secretary under paragraph (3), 

13 each electric motor described in section 

14 340(13)(A)(ii) manufactured with power ratings 

15 from 1 to 200 horsepower (alone or as a compo16 nent of another piece of equipment) on or after 

17 December 19, 2010, shall have a nominal full 

18 load efficiency of not less than the nominal full 

19 load efficiency described in NEMA MG-1 (2006) 

20 Table 12-11.’’; and 

21 (iv) in paragraph (3) (as redesignated by clause (ii)), 

22 by striking ‘‘paragraph (1)’’ each place it appears in sub23 paragraphs (A) and (D) and inserting ‘‘paragraphs (1) and 

24 (2)’’. 

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1 (B) Section 313 of the Energy Independence and Secu2 rity Act of 2007 (121 Stat. 1568) is repealed. 

3 (C) The amendments made by— 

4 (i) subparagraph (A) shall take effect on Decem5 ber 19, 2010; and 

6 (ii) subparagraph (B) shall take effect on Decem7 ber 19, 2007. 

8 (10) Section 321(30)(D)(i)(III) of the Energy Policy 

9 and Conservation Act (42 U.S.C. 6291(30)(D)(i)(III)) (as 

10 amended by section 321(a)(1)(A) of the Energy Independ11 ence and Security Act of 2007 (121 Stat. 1574)) is amended 

12 by inserting before the semicolon the following: ‘‘or, in the 

13 case of a modified spectrum lamp, not less than 232 lumens 

14 and not more than 1,950 lumens’’. 

15 (11) Section 321(30)(T) of the Energy Policy and Con16 servation Act (42 U.S.C. 6291(30)(T) (as amended by sec17 tion 321(a)(1)(B) of the Energy Independence and Security 

18 Act of 2007 (121 Stat. 1574)) is amended— 

19 (A) in clause (i)— 

20 (i) by striking the comma after ‘‘household 

21 appliance’’ and inserting ‘‘and’’; and 

22 (ii) by striking ‘‘and is sold at retail,’’; and 

23 (B) in clause (ii), by inserting ‘‘when sold at re24 tail,’’ before ‘‘is designated’’. 

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1 (12) Section 325 of the Energy Policy and Conserva2 tion Act (42 U.S.C. 6295) (as amended by sections 

3 321(a)(3)(A) and 322(b) of the Energy Independence and 

4 Security Act of 2007 (121 Stat. 1577, 1588)) is amended 

5 by striking subsection (i) and inserting the following: 

6 ‘‘(i) GENERAL SERVICE FLUORESCENT LAMPS, GEN7 ERAL SERVICE INCANDESCENT LAMPS, INTERMEDIATE

8 BASE INCANDESCENT LAMPS, CANDELABRA BASE INCAN9 DESCENT LAMPS, AND INCANDESCENT REFLECTOR

10 LAMPS.— 

11 ‘‘(1) ENERGY EFFICIENCY STANDARDS.— 

12 ‘‘(A) IN GENERAL.—Each of the following 

13 general service fluorescent lamps, general service 

14 incandescent lamps, intermediate base incandes15 cent lamps, candelabra base incandescent lamps, 

16 and incandescent reflector lamps manufactured 

17 after the effective date specified in the tables list18 ed in this subparagraph shall meet or exceed the 

19 following lamp efficacy, new maximum wattage, 

20 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 

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 

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‘‘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— 

4 ‘‘(I) is intended for a general 

5 service or general illumination appli6 cation (whether incandescent or not); 

7 ‘‘(II) has a medium screw base or 

8 any other screw base not defined in 

9 ANSI C81.61–2006; 

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1 ‘‘(III) is capable of being operated 

2 at a voltage at least partially within 

3 the range of 110 to 130 volts; and 

4 ‘‘(IV) is manufactured or im5 ported after December 31, 2011. 

6 ‘‘(ii) REQUIREMENT.—For purposes of 

7 this paragraph, each lamp described in 

8 clause (i) shall have a color rendering index 

9 that is greater than or equal to— 

10 ‘‘(I) 80 for nonmodified spectrum 

11 lamps; or 

12 ‘‘(II) 75 for modified spectrum 

13 lamps. 

14 ‘‘(C) CANDELABRA INCANDESCENT LAMPS

15 AND INTERMEDIATE BASE INCANDESCENT

16 LAMPS.— 

17 ‘‘(i) CANDELABRA BASE INCANDESCENT

18 LAMPS.—Effective beginning January 1, 

19 2012, a candelabra base incandescent lamp 

20 shall not exceed 60 rated watts. 

21 ‘‘(ii) INTERMEDIATE BASE INCANDES22 CENT LAMPS.—Effective beginning January 

23 1, 2012, an intermediate base incandescent 

24 lamp shall not exceed 40 rated watts. 

25 ‘‘(D) EXEMPTIONS.— 

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1 ‘‘(i) STATUTORY EXEMPTIONS.—The 

2 standards specified in subparagraph (A) 

3 shall not apply to the following types of in4 candescent reflector lamps: 

5 ‘‘(I) Lamps rated at 50 watts or 

6 less that are ER30, BR30, BR40, or 

7 ER40 lamps. 

8 ‘‘(II) Lamps rated at 65 watts 

9 that are BR30, BR40, or ER40 lamps. 

10 ‘‘(III) R20 incandescent reflector 

11 lamps rated 45 watts or less. 

12 ‘‘(ii) ADMINISTRATIVE EXEMPTIONS.— 

13 ‘‘(I) PETITION.—Any person may 

14 petition the Secretary for an exemption 

15 for a type of general service lamp from 

16 the requirements of this subsection. 

17 ‘‘(II) CRITERIA.—The Secretary 

18 may grant an exemption under sub19 clause (I) only to the extent that the 

20 Secretary finds, after a hearing and 

21 opportunity for public comment, that 

22 it is not technically feasible to serve a 

23 specialized lighting application (such 

24 as a military, medical, public safety, 

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1 tion) using a lamp that meets the re2 quirements of this subsection. 

3 ‘‘(III) ADDITIONAL CRITERION.— 

4 To grant an exemption for a product 

5 under this clause, the Secretary shall 

6 include, as an additional criterion, 

7 that the exempted product is unlikely 

8 to be used in a general service lighting 

9 application. 

10 ‘‘(E) EXTENSION OF COVERAGE.— 

11 ‘‘(i) PETITION.—Any person may peti12 tion the Secretary to establish standards for 

13 lamp shapes or bases that are excluded from 

14 the definition of general service lamps. 

15 ‘‘(ii) INCREASED SALES OF EXEMPTED

16 LAMPS.—The petition shall include evidence 

17 that the availability or sales of exempted in18 candescent lamps have increased signifi19 cantly since the date on which the stand20 ards on general service incandescent lamps 

21 were established. 

22 ‘‘(iii) CRITERIA.—The Secretary shall 

23 grant a petition under clause (i) if the Sec24 retary finds that— 

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1 ‘‘(I) the petition presents evidence 

2 that demonstrates that commercial 

3 availability or sales of exempted incan4 descent lamp types have increased sig5 nificantly since the standards on gen6 eral service lamps were established and 

7 likely are being widely used in general 

8 lighting applications; and 

9 ‘‘(II) significant energy savings 

10 could be achieved by covering exempted 

11 products, as determined by the Sec12 retary based in part on sales data pro13 vided to the Secretary from manufac14 turers and importers. 

15 ‘‘(iv) NO PRESUMPTION.—The grant of 

16 a petition under this subparagraph shall 

17 create no presumption with respect to the 

18 determination of the Secretary with respect 

19 to any criteria under a rulemaking con20 ducted under this section. 

21 ‘‘(v) EXPEDITED PROCEEDING.—If the 

22 Secretary grants a petition for a lamp 

23 shape or base under this subparagraph, the 

24 Secretary shall— 

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1 ‘‘(I) conduct a rulemaking to de2 termine standards for the exempted 

3 lamp shape or base; and 

4 ‘‘(II) complete the rulemaking not 

5 later than 18 months after the date on 

6 which notice is provided granting the 

7 petition. 

8 ‘‘(F) EFFECTIVE DATES.— 

9 ‘‘(i) IN GENERAL.—In this paragraph, 

10 except as otherwise provided in a table con11 tained in subparagraph (A) or in clause 

12 (ii), the term ‘effective date’ means the last 

13 day of the month specified in the table that 

14 follows October 24, 1992. 

15 ‘‘(ii) SPECIAL EFFECTIVE DATES.— 

16 ‘‘(I) ER, BR, AND BPAR LAMPS.— 

17 The standards specified in subpara18 graph (A) shall apply with respect to 

19 ER incandescent reflector lamps, BR 

20 incandescent reflector lamps, BPAR 

21 incandescent reflector lamps, and simi22 lar bulb shapes on and after January 

23 1, 2008, or the date that is 180 days 

24 after the date of enactment of the Enmstockstill on PROD1PC66 with BILLS

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1 ergy Independence and Security Act of 

2 2007. 

3 ‘‘(II) LAMPS BETWEEN 2.25–2.75

4 INCHES IN DIAMETER.—The standards 

5 specified in subparagraph (A) shall 

6 apply with respect to incandescent re7 flector lamps with a diameter of more 

8 than 2.25 inches, but not more than 

9 2.75 inches, on and after the later of 

10 January 1, 2008, or the date that is 

11 180 days after the date of enactment of 

12 the Energy Independence and Security 

13 Act of 2007. 

14 ‘‘(2) COMPLIANCE WITH EXISTING LAW.—Not15 withstanding section 332(a)(5) and section 332(b), it 

16 shall not be unlawful for a manufacturer to sell a 

17 lamp that is in compliance with the law at the time 

18 the lamp was manufactured. 

19 ‘‘(3) RULEMAKING BEFORE OCTOBER 24, 1995.— 

20 ‘‘(A) IN GENERAL.—Not later than 36 

21 months after October 24, 1992, the Secretary 

22 shall initiate a rulemaking procedure and shall 

23 publish a final rule not later than the end of the 

24 54-month period beginning on October 24, 1992, 

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1 to determine whether the standards established 

2 under paragraph (1) should be amended. 

3 ‘‘(B) ADMINISTRATION.—The rule shall con4 tain the amendment, if any, and provide that 

5 the amendment shall apply to products manufac6 tured on or after the 36-month period beginning 

7 on the date on which the final rule is published. 

8 ‘‘(4) RULEMAKING BEFORE OCTOBER 24, 2000.— 

9 ‘‘(A) IN GENERAL.—Not later than 8 years 

10 after October 24, 1992, the Secretary shall ini11 tiate a rulemaking procedure and shall publish 

12 a final rule not later than 9 years and 6 months 

13 after October 24, 1992, to determine whether the 

14 standards in effect for fluorescent lamps and in15 candescent lamps should be amended. 

16 ‘‘(B) ADMINISTRATION.—The rule shall con17 tain the amendment, if any, and provide that 

18 the amendment shall apply to products manufac19 tured on or after the 36-month period beginning 

20 on the date on which the final rule is published. 

21 ‘‘(5) RULEMAKING FOR ADDITIONAL GENERAL

22 SERVICE FLUORESCENT LAMPS.— 

23 ‘‘(A) IN GENERAL.—Not later than the end 

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1 beling requirements under section 324(a)(2)(C) 

2 become effective, the Secretary shall— 

3 ‘‘(i) initiate a rulemaking procedure to 

4 determine whether the standards in effect 

5 for fluorescent lamps and incandescent 

6 lamps should be amended so that the stand7 ards would be applicable to additional gen8 eral service fluorescent lamps; and 

9 ‘‘(ii) publish, not later than 18 months 

10 after initiating the rulemaking, a final rule 

11 including the amended standards, if any. 

12 ‘‘(B) ADMINISTRATION.—The rule shall pro13 vide that the amendment shall apply to products 

14 manufactured after a date which is 36 months 

15 after the date on which the rule is published. 

16 ‘‘(6) STANDARDS FOR GENERAL SERVICE

17 LAMPS.— 

18 ‘‘(A) RULEMAKING BEFORE JANUARY 1, 

19 2014.— 

20 ‘‘(i) IN GENERAL.—Not later than Jan21 uary 1, 2014, the Secretary shall initiate a 

22 rulemaking procedure to determine wheth23 er— 

24 ‘‘(I) standards in effect for general 

25 service lamps should be amended; and 

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1 ‘‘(II) the exclusions for certain in2 candescent lamps should be maintained 

3 or discontinued based, in part, on ex4 cluded lamp sales collected by the Sec5 retary from manufacturers. 

6 ‘‘(ii) SCOPE.—The rulemaking— 

7 ‘‘(I) shall not be limited to incan8 descent lamp technologies; and 

9 ‘‘(II) shall include consideration 

10 of a minimum standard of 45 lumens 

11 per watt for general service lamps. 

12 ‘‘(iii) AMENDED STANDARDS.—If the 

13 Secretary determines that the standards in 

14 effect for general service lamps should be 

15 amended, the Secretary shall publish a final 

16 rule not later than January 1, 2017, with 

17 an effective date that is not earlier than 3 

18 years after the date on which the final rule 

19 is published. 

20 ‘‘(iv) PHASED-IN EFFECTIVE DATES.— 

21 The Secretary shall consider phased-in effec22 tive dates under this subparagraph after 

23 considering— 

24 ‘‘(I) the impact of any amend25 ment on manufacturers, retiring and 

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1 repurposing existing equipment, 

2 stranded investments, labor contracts, 

3 workers, and raw materials; and 

4 ‘‘(II) the time needed to work with 

5 retailers and lighting designers to re6 vise sales and marketing strategies. 

7 ‘‘(v) BACKSTOP REQUIREMENT.—If the 

8 Secretary fails to complete a rulemaking in 

9 accordance with clauses (i) through (iv) or 

10 if the final rule does not produce savings 

11 that are greater than or equal to the savings 

12 from a minimum efficacy standard of 45 

13 lumens per watt, effective beginning Janu14 ary 1, 2020, the Secretary shall prohibit the 

15 manufacture of any general service lamp 

16 that does not meet a minimum efficacy 

17 standard of 45 lumens per watt. 

18 ‘‘(vi) STATE PREEMPTION.—Neither 

19 section 327(c) nor any other provision of 

20 law shall preclude California or Nevada 

21 from adopting, effective beginning on or 

22 after January 1, 2018— 

23 ‘‘(I) a final rule adopted by the 

24 Secretary in accordance with clauses 

25 (i) through (iv); 

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1 ‘‘(II) if a final rule described in 

2 subclause (I) has not been adopted, the 

3 backstop requirement under clause (v); 

4 or 

5 ‘‘(III) in the case of California, if 

6 a final rule described in subclause (I) 

7 has not been adopted, any California 

8 regulations relating to these covered 

9 products adopted pursuant to State 

10 statute in effect as of the date of enact11 ment of the Energy Independence and 

12 Security Act of 2007. 

13 ‘‘(B) RULEMAKING BEFORE JANUARY 1, 

14 2020.— 

15 ‘‘(i) IN GENERAL.—Not later than Jan16 uary 1, 2020, the Secretary shall initiate a 

17 rulemaking procedure to determine wheth18 er— 

19 ‘‘(I) standards in effect for general 

20 service lamps should be amended; and 

21 ‘‘(II) the exclusions for certain in22 candescent lamps should be maintained 

23 or discontinued based, in part, on ex24 cluded lamp sales data collected by the 

25 Secretary from manufacturers. 

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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 final 

8 rule not later than January 1, 2022, with 

9 an effective date that is not earlier than 3 

10 years after the date on which the final rule 

11 is published. 

12 ‘‘(iv) PHASED-IN EFFECTIVE DATES.— 

13 The Secretary shall consider phased-in effec14 tive dates under this subparagraph after 

15 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 with 

22 retailers and lighting designers to re23 vise sales and marketing strategies. 

24 ‘‘(7) FEDERAL ACTIONS.— 

25 ‘‘(A) COMMENTS OF SECRETARY.— 

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1 ‘‘(i) IN GENERAL.—With respect to any 

2 lamp to which standards are applicable 

3 under this subsection or any lamp specified 

4 in section 346, the Secretary shall inform 

5 any Federal entity proposing actions that 

6 would adversely impact the energy con7 sumption or energy efficiency of the lamp of 

8 the energy conservation consequences of the 

9 action. 

10 ‘‘(ii) CONSIDERATION.—The Federal 

11 entity shall carefully consider the comments 

12 of the Secretary. 

13 ‘‘(B) AMENDMENT OF STANDARDS.—Not14 withstanding section 325(n)(1), the Secretary 

15 shall not be prohibited from amending any 

16 standard, by rule, to permit increased energy use 

17 or to decrease the minimum required energy effi18 ciency of any lamp to which standards are ap19 plicable under this subsection if the action is 

20 warranted as a result of other Federal action 

21 (including restrictions on materials or processes) 

22 that would have the effect of either increasing the 

23 energy use or decreasing the energy efficiency of 

24 the product. 

25 ‘‘(8) COMPLIANCE.— 

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1 ‘‘(A) IN GENERAL.—Not later than the date 

2 on which standards established pursuant to this 

3 subsection become effective, or, with respect to 

4 high-intensity discharge lamps covered under 

5 section 346, the effective date of standards estab6 lished pursuant to that section, each manufac7 turer of a product to which the standards are 

8 applicable shall file with the Secretary a labora9 tory report certifying compliance with the appli10 cable standard for each lamp type. 

11 ‘‘(B) CONTENTS.—The report shall include 

12 the lumen output and wattage consumption for 

13 each lamp type as an average of measurements 

14 taken over the preceding 12-month period. 

15 ‘‘(C) OTHER LAMP TYPES.—With respect to 

16 lamp types that are not manufactured during 

17 the 12-month period preceding the date on which 

18 the standards become effective, the report shall— 

19 ‘‘(i) be filed with the Secretary not 

20 later than the date that is 12 months after 

21 the date on which manufacturing is com22 menced; and 

23 ‘‘(ii) include the lumen output and 

24 wattage consumption for each such lamp 

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1 type as an average of measurements taken 

2 during the 12-month period.’’. 

3 (13) Section 325(l)(4)(A) of the Energy Policy and 

4 Conservation Act (42 U.S.C. 6295(l)(4)(A)) (as amended by 

5 section 321(a)(3)(B) of the Energy Independence and Secu6 rity Act of 2007 (121 Stat. 1581)) is amended by striking 

7 ‘‘only’’. 

8 (14) Section 327(b)(1)(B) of the Energy Policy and 

9 Conservation Act (42 U.S.C. 6297(b)(1)(B)) (as amended 

10 by section 321(d)(3) of the Energy Independence and Secu11 rity Act of 2007 (121 Stat. 1585)) is amended— 

12 (A) in clause (i), by inserting ‘‘and’’ after the 

13 semicolon at the end; 

14 (B) in clause (ii), by striking ‘‘; and’’ and in15 serting a period; and 

16 (C) by striking clause (iii). 

17 (15) Section 321(e) of the Energy Independence and 

18 Security Act of 2007 (121 Stat. 1586) is amended— 

19 (A) in the matter preceding paragraph (1), by 

20 striking ‘‘is amended’’ and inserting ‘‘(as amended by 

21 section 306(b)) is amended’’; and 

22 (B) by striking paragraphs (1) and (2) and in23 serting the following: 

24 ‘‘(1) in paragraph (5), by striking ‘or’ after the 

25 semicolon at the end; 

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1 ‘‘(2) in paragraph (6), by striking the period at 

2 the end and inserting ‘; or’; and’’. 

3 (16) Section 332(a) of the Energy Policy and Con4 servation Act (42 U.S.C. 6302(a)) (as amended by section 

5 321(e) of the Energy Independence and Security Act of 

6 2007 (121 Stat. 1586)) is amended by redesignating the sec7 ond paragraph (6) as paragraph (7). 

8 (17) Section 321(30)(C)(ii) of the Energy Policy and 

9 Conservation Act (42 U.S.C. 6291(30)(C)(ii)) (as amended 

10 by section 322(a)(1)(B) of the Energy Independence and Se11 curity Act of 2007 (121 Stat. 1587)) is amended by insert12 ing a period after ‘‘40 watts or higher’’. 

13 (18) Section 322(b) of the Energy Independence and 

14 Security Act of 2007 (121 Stat. 1588)) is amended by strik15 ing ‘‘6995(i)’’ and inserting ‘‘6295(i)’’. 

16 (19) Section 327(c) of the Energy Policy and Con17 servation Act (42 U.S.C. 6297(c)) (as amended by sections 

18 324(f) of the Energy Independence and Security Act of 2007 

19 (121 Stat. 1594)) is amended— 

20 (A) in paragraph (6), by striking ‘‘or’’ after the 

21 semicolon at the end; 

22 (B) in paragraph (8)(B), by striking ‘‘and’’ after 

23 the semicolon at the end; 

24 (C) in paragraph (9)— 

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1 (i) by striking ‘‘except that—’’ and all that 

2 follows through ‘‘if the Secretary fails to issue’’ 

3 and inserting ‘‘except that if the Secretary fails 

4 to issue’’; 

5 (ii) by redesignating clauses (i) and (ii) as 

6 subparagraphs (A) and (B), respectively (and by 

7 moving the margins of such subparagraphs 2 

8 ems to the left); and 

9 (iii) by striking the period at the end and 

10 inserting a semicolon; and 

11 (D) by adding at the end the following: 

12 ‘‘(10) is a regulation for general service lamps 

13 that conforms with Federal standards and effective 

14 dates; 

15 ‘‘(11) is an energy efficiency standard for gen16 eral service lamps enacted into law by the State of 

17 Nevada prior to December 19, 2007, if the State has 

18 not adopted the Federal standards and effective dates 

19 pursuant to subsection (b)(1)(B)(ii); or’’. 

20 (20) Section 325(b) of the Energy Independence and 

21 Security Act of 2007 (121 Stat. 1596)) is amended by strik22 ing ‘‘6924(c)’’ and inserting ‘‘6294(c)’’. 

23 (b) TITLE IV—ENERGY SAVINGS IN BUILDINGS AND

24 INDUSTRY.—(1) Section 401 of the Energy Independence 

25 and Security Act of 2007 (42 U.S.C. 17061) is amended— 

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1 (A) in paragraph (2), by striking ‘‘484’’ and in2 serting ‘‘494’’; and 

3 (B) in paragraph (13), by striking ‘‘Agency’’ 

4 and inserting ‘‘Administration’’. 

5 (2) Section 422 of the Energy Conservation and Pro6 duction Act (42 U.S.C. 6872) (as amended by section 

7 411(a) of the Energy Independence and Security Act of 

8 2007 (121 Stat. 1600)) is amended by striking 1 of the 2 

9 periods at the end of paragraph (5). 

10 (3) Section 305(a)(3)(D)(i) of the Energy Conserva11 tion and Production Act (42 U.S.C. 6834(a)(3)(D)(i)) (as 

12 amended by section 433(a) of the Energy Independence and 

13 Security Act of 2007 (121 Stat. 1612)) is amended— 

14 (A) in subclause (I)— 

15 (i) by striking ‘‘in fiscal year 2003 (as 

16 measured by Commercial Buildings Energy Con17 sumption Survey or Residential Energy Con18 sumption Survey data from the Energy Informa19 tion Agency’’ and inserting ‘‘as measured by the 

20 calendar year 2003 Commercial Buildings En21 ergy Consumption Survey or the calendar year 

22 2005 Residential Energy Consumption Survey 

23 data from the Energy Information Administra24 tion’’; and 

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1 (ii) in the table at the end, by striking 

2 ‘‘Fiscal Year’’ and inserting ‘‘Calendar 

3 Year’’; and 

4 (B) in subclause (II)— 

5 (i) by striking ‘‘(II) Upon petition’’ and in6 serting the following: 

7 ‘‘(II) DOWNWARD ADJUSTMENT OF

8 NUMERIC REQUIREMENT.— 

9 ‘‘(aa) IN GENERAL.—On pe10 tition’’; and 

11 (ii) by striking the last sentence and insert12 ing the following: 

13 ‘‘(bb) EXCEPTIONS TO RE14 QUIREMENT FOR CONCURRENCE

15 OF SECRETARY.— 

16 ‘‘(AA) IN GENERAL.— 

17 The requirement to petition 

18 and obtain the concurrence of 

19 the Secretary under this sub20 clause shall not apply to any 

21 Federal building with respect 

22 to which the Administrator 

23 of General Services is re24 quired to transmit a pro25 spectus to Congress under 

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1 section 3307 of title 40, 

2 United States Code, or to 

3 any other Federal building 

4 designed, constructed, or ren5 ovated by the Administrator 

6 if the Administrator certifies, 

7 in writing, that meeting the 

8 applicable numeric require9 ment under subclause (I) 

10 with respect to the Federal 

11 building would be technically 

12 impracticable in light of the 

13 specific functional needs for 

14 the building. 

15 ‘‘(BB) ADJUSTMENT.— 

16 In the case of a building de17 scribed in subitem (AA), the 

18 Administrator may adjust 

19 the applicable numeric re20 quirement of subclause (I) 

21 downward with respect to the 

22 building.’’. 

23 (4) Section 436(c)(3) of the Energy Independence and 

24 Security Act of 2007 (42 U.S.C. 17092(c)(3)) is amended 

25 by striking ‘‘474’’ and inserting ‘‘494’’. 

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1 (5) Section 440 of the Energy Independence and Secu2 rity Act of 2007 (42 U.S.C. 17096) is amended by striking 

3 ‘‘and 482’’. 

4 (6) Section 373(c) of the Energy Policy and Conserva5 tion Act (42 U.S.C. 6343(c)) (as amended by section 451(a) 

6 of the Energy Independence and Security Act of 2007 (121 

7 Stat. 1628)) is amended by striking ‘‘Administrator’’ and 

8 inserting ‘‘Secretary’’. 

9 (c) DATE OF ENACTMENT.—Section 1302 of the En10 ergy Independence and Security Act of 2007 (42 U.S.C. 

11 17382) is amended in the first sentence by striking ‘‘enact12 ment’’ and inserting ‘‘the date of enactment of this Act’’. 

13 (d) REFERENCE.—Section 1306(c)(3) of the Energy 

14 Independence and Security Act of 2007 (42 U.S.C. 

15 17386(c)(3)) is amended by striking ‘‘section 1307 (para16 graph (17) of section 111(d) of the Public Utility Regu17 latory Policies Act of 1978)’’ and inserting ‘‘paragraph (19) 

18 of section 111(d) of the Public Utility Regulatory Policies 

19 Act of 1978 (16 U.S.C. 2621(d))’’. 

20 (e) EFFECTIVE DATE.—This section and the amend21 ments made by this section take effect as if included in the 

22 Energy Independence and Security Act of 2007 (Public 

23 Law 110–140; 121 Stat. 1492). 

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1 SEC. 162. TECHNICAL CORRECTIONS TO ENERGY POLICY 

2 ACT OF 2005. 

3 (a) TITLE I—ENERGY EFFICIENCY.—Section 

4 325(g)(8)(C)(ii) of the Energy Policy and Conservation Act 

5 (42 U.S.C. 6295(g)(8)(C)(ii)) (as added by section 

6 135(c)(2)(B) of the Energy Policy Act of 2005) is amended 

7 by striking ‘‘20°F’’ and inserting ‘‘¥20°F’’. 

8 (b) EFFECTIVE DATE.—This section and the amend9 ments made by this section take effect as if included in the 

10 Energy Policy Act of 2005 (Public Law 109–58; 119 Stat. 

11 594). 

12 Subtitle H—Energy and Efficiency 

13 Centers 

14 SEC. 171. CLEAN ENERGY INNOVATION CENTERS. 

15 (a) PURPOSE.—The Secretary shall carry out a pro16 gram to establish Clean Energy Innovation Centers to en17 hance the Nation’s economic, environmental, and energy se18 curity by promoting commercial deployment of clean, in19 digenous energy alternatives to oil and other fossil fuels, 

20 reducing greenhouse gas emissions, and ensuring that the 

21 United States maintains a technological lead in developing 

22 and deploying state-of-the-art energy technologies. To 

23 achieve these purposes the program shall— 

24 (1) leverage the expertise and resources of the 

25 university and private research communities, indus26 try, venture capital, national laboratories, and other 

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1 participants in energy innovation to support cross2 disciplinary research and development in areas not 

3 being served by the private sector in order to develop 

4 and transfer innovative clean energy technologies into 

5 the marketplace; 

6 (2) expand the knowledge base and human cap7 ital necessary to transition to a low-carbon economy; 

8 and 

9 (3) promote regional economic development by 

10 cultivating clusters of clean energy technology firms, 

11 private research organizations, suppliers, and other 

12 complementary groups and businesses. 

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

14 (1) ALLOWANCE.—The term ‘‘allowance’’ means 

15 an emission allowance established under section 721 

16 of the Clean Air Act. 

17 (2) CENTER.—The term ‘‘Center’’ means a Clean 

18 Energy Innovation Center established in accordance 

19 with this section. 

20 (3) CLEAN ENERGY TECHNOLOGY.—The term 

21 ‘‘clean energy technology’’ means a technology that— 

22 (A) produces energy from solar, wind, geo23 thermal, biomass, tidal, wave, ocean, and other 

24 renewable energy resources (as such term is demstockstill on PROD1PC66 with BILLS

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1 fined in section 610 of the Public Utility Regu2 latory Policies Act of 1978); 

3 (B) more efficiently transmits, distributes, 

4 or stores energy; 

5 (C) enhances energy efficiency for buildings 

6 and industry, including combined heat and 

7 power; 

8 (D) enables the development of a Smart 

9 Grid (as described in section 1301 of the Energy 

10 Independence and Security Act of 2007 (42 

11 U.S.C. 17381)), including integration of renew12 able energy resources and distributed generation, 

13 demand response, demand side management, and 

14 systems analysis; 

15 (E) produces an advanced or sustainable 

16 material with energy or energy efficiency appli17 cations; 

18 (F) enhances water security through im19 proved water management, conservation, dis20 tribution, and end use applications; or 

21 (G) improves energy efficiency for transpor22 tation, including electric vehicles. 

23 (4) CLUSTER.—The term ‘‘cluster’’ means a con24 centration of firms directly involved in the research, 

25 development, finance, and commercialization of clean 

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1 energy technologies whose geographic proximity facili2 tates utilization and sharing of skilled human re3 sources, infrastructure, research facilities, educational 

4 and training institutions, venture capital, and input 

5 suppliers. 

6 (5) PROJECT.—The term ‘‘project’’ means an ac7 tivity with respect to which a Center provides support 

8 under subsection (e). 

9 (6) QUALIFYING ENTITY.—The term ‘‘qualifying 

10 entity’’ means each of the following: 

11 (A) A research university. 

12 (B) A State institution with a focus on the 

13 advancement of clean energy technologies. 

14 (C) A nongovernmental organization with 

15 research or commercialization expertise in clean 

16 energy technology development. 

17 (7) SECRETARY.—The term ‘‘Secretary’’ means 

18 the Secretary of Energy. 

19 (8) TECHNOLOGY FOCUS.—The term ‘‘technology 

20 focus’’ means the unique technology area in which a 

21 Center will specialize, and may include solar elec22 tricity, fuels from solar energy, batteries and energy 

23 storage, electricity grid systems and devices, energy 

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1 rials, modeling and simulation, and other clean en2 ergy technology areas designated by the Secretary. 

3 (9) TRANSLATIONAL RESEARCH.—The term 

4 ‘‘translational research’’ means clean energy tech5 nology research to coordinate basic or applied re6 search with technical and commercial applications to 

7 enable promising discoveries or inventions to attract 

8 investment sufficient for market penetration and dif9 fusion. 

10 (c) ROLE OF THE SECRETARY.—The Secretary shall— 

11 (1) have ultimate responsibility for, and over12 sight of, all aspects of the program under this section; 

13 (2) provide for the distribution of allowances to 

14 consortia for the establishment of 8 Centers pursuant 

15 to this section, with each Center designated a unique 

16 technology focus area; 

17 (3) coordinate the innovation activities of Cen18 ters with those occurring through other Department of 

19 Energy entities, including the National Laboratories, 

20 the Advanced Research Projects Agency—Energy, and 

21 Energy Frontier Research Centers, and within indus22 try, and to avoid duplication of research, by annu23 ally— 

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1 (A) issuing guidance regarding national en2 ergy research and development priorities and 

3 strategic objectives; and 

4 (B) convening a conference of staff of the 

5 Department of Energy and representatives from 

6 such other entities to share research results, pro7 gram plans, and opportunities for collaboration. 

8 (d) CONSORTIUM.—A consortium shall be eligible to re9 ceive allowances to support the establishment of a Center 

10 under this section if— 

11 (1) it is composed of— 

12 (A) 2 research universities with a combined 

13 annual research budget of $500,000,000; and 

14 (B) no fewer than 1 additional qualifying 

15 entity; 

16 (2) its members have established a binding agree17 ment that documents— 

18 (A) the structure of the partnership agree19 ment; 

20 (B) the governance and management struc21 ture to enable cost-effective implementation of the 

22 program; 

23 (C) an intellectual property management 

24 policy; 

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1 (D) a conflicts of interest policy consistent 

2 with subsection (e)(4); 

3 (E) an accounting structure that meets the 

4 requirements of the Department and can be au5 dited under subsection (f)(3); and 

6 (F) that it has an Advisory Board con7 sistent with subsection (e)(3); 

8 (3) it receives financial contributions from 

9 States, consortium participants, or other non-Federal 

10 sources, to be used pursuant to subsection (e)(2); 

11 (4) it is part of an existing cluster or dem12 onstrates high potential to develop a new cluster; and 

13 (5) it operates as a nonprofit organization. 

14 (e) CLEAN ENERGY INNOVATION CENTERS.— 

15 (1) ROLE.—Centers shall provide support to ac16 tivities leading to commercial deployment of clean en17 ergy technologies pursuant to the purposes of this sec18 tion through issuance of awards to projects managed 

19 by qualifying entities and other entities meeting the 

20 Center’s project criteria, including national labora21 tories. Each Center shall— 

22 (A) develop and publish for public review 

23 and comment proposed plans, programs, and 

24 project selection criteria; 

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1 (B) submit an annual report to the Sec2 retary summarizing the Center’s activities, orga3 nizational expenditures, and Board members, 

4 which shall include a certification of compliance 

5 with conflict of interest policies and a descrip6 tion of each project in the research portfolio; 

7 (C) establish policies— 

8 (i) regarding intellectual property de9 veloped as a result of Center awards and 

10 other forms of technology support that en11 courage individual ingenuity and invention 

12 while speeding knowledge transfer and fa13 cilitating the establishment of rapid com14 mercialization pathways; 

15 (ii) to prevent resources provided to the 

16 Center from being used to displace private 

17 sector investment likely to otherwise occur, 

18 including investment from private sector 

19 entities which are members of the consor20 tium; 

21 (iii) to facilitate the participation of 

22 private investment firms or other private 

23 entities that invest in clean energy tech24 nologies to perform due diligence on award 

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1 view process, and to provide guidance to 

2 projects supported by the Center; and 

3 (iv) to facilitate the participation of 

4 entrepreneurs with a demonstrated history 

5 of commercializing clean energy tech6 nologies; 

7 (D) oversee project solicitations, review pro8 posed projects, and select projects for awards; 

9 and 

10 (E) monitor project implementation. 

11 (2) USE AND DISTRIBUTION OF AWARDS BY CEN12 TERS.—A Center shall allocate awards and other sup13 port for— 

14 (A) clean energy technology projects con15 ducting translational research and related activi16 ties, at least 40 percent of which shall be utilized 

17 for projects related to the Center’s technology 

18 focus; and 

19 (B) administrative expenses, which may 

20 constitute no more than 10 percent of the award. 

21 (3) ADVISORY BOARDS.— 

22 (A) IN GENERAL.—Each Center shall estab23 lish an Advisory Board whose members shall 

24 have extensive and relevant scientific, technical, 

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1 pertise. The Advisory Board shall review the 

2 Center’s proposed plans, programs, project selec3 tion criteria, and projects and shall ensure that 

4 projects selected for awards meet the conflict of 

5 interest policies of the Center. Advisory Board 

6 members other than those representing consor7 tium members shall serve for no more than three 

8 years and must comply with conflict of interest 

9 provisions. 

10 (B) MEMBERS.—Each Advisory Board shall 

11 consist of— 

12 (i) 5 members selected by the consor13 tium’s research universities; 

14 (ii) 2 members selected by the consor15 tium’s other qualifying entities; and 

16 (iii) 2 members selected at large by 

17 other Board members to represent the entre18 preneur and venture capital communities. 

19 Individuals appointed under clause (iii) shall 

20 not be State or Federal employees or affiliated 

21 with the consortium’s qualified entities. 

22 (C) NONVOTING MEMBERS.—The Board 

23 shall also include 1 nonvoting member appointed 

24 by the Secretary. 

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1 (D) COMPENSATION.—Members of an Advi2 sory Board may receive reimbursement for travel 

3 expenses and a reasonable stipend. 

4 (4) CONFLICT OF INTEREST.— 

5 (A) PROCEDURES.—Centers shall establish 

6 procedures to ensure that employees or consortia 

7 designees for Center activities who are in deci8 sionmaking capacities shall— 

9 (i) disclose any financial interests in, 

10 or financial relationships with, applicants 

11 for or recipients of awards under paragraph 

12 (1), including those of his or her spouse or 

13 minor child, unless such relationships or in14 terests would be considered to be remote or 

15 inconsequential; and 

16 (ii) recuse himself or herself from any 

17 funding decision for projects in which he or 

18 she has a personal financial interest. 

19 (B) DISQUALIFICATION AND REVOCATION.— 

20 The Secretary may disqualify an application or 

21 revoke allowances distributed to the Center or 

22 awards provided under paragraph (1), if cog23 nizant officials of the Center fail to comply with 

24 procedures required under subparagraph (A). 

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1 (f) DISTRIBUTION OF ALLOWANCES TO CLEAN ENERGY

2 INNOVATION CENTERS.— 

3 (1) SELECTION AND SCHEDULE.—Allowances to 

4 support the establishment of a Center shall be distrib5 uted through a competitive process. Not later than 

6 120 days after the date of enactment of this Act, the 

7 Secretary shall solicit proposals from eligible con8 sortia to establish Centers, which shall be submitted 

9 not later than 180 days after the date of enactment 

10 of this Act. The Secretary shall select the program 

11 consortia not later than 270 days after the date of en12 actment of this Act pursuant to subsection (d). The 

13 Secretary shall award 3 grants for the establishment 

14 of 3 Centers to be located on the campus of 1890 Land 

15 Grant Institution (as defined in section 2 of the Agri16 cultural Research, Extension, and Education Reform 

17 Act of 1998 (7 U.S.C. 7061)). 

18 (2) TERM AND USE OF ALLOWANCES.—Allow19 ances distributed to Centers shall be used to provide 

20 awards pursuant to subsection (e)(1). The amount of 

21 allowances distributed to support the establishment of 

22 a Center under this section shall not be less than 10 

23 and not more than 30 percent of the allowances allo24 cated under section 782(h) of the Clean Air Act, each 

25 year for a 6 year period. Centers shall be eligible to 

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1 compete for additional allowance distribution after 

2 the expiration of the initial period. Centers shall es3 tablish award periods for individual awards. The 

4 transfer of allowances to a Center shall occur at the 

5 start of each calendar year. 

6 (3) AUDIT.—Each Center shall conduct an an7 nual audit to determine the extent to which allow8 ances distributed to the Center, and awards under 

9 subsection (e) have been utilized in a manner con10 sistent with this section. The auditor shall transmit 

11 a report of the results of the audit to the Secretary 

12 and to the Government Accountability Office. The 

13 Secretary shall include such report in the annual re14 port to Congress, along with a plan to remedy any 

15 deficiencies cited in the report. The Government Ac16 countability Office may review such audits as appro17 priate and shall have full access to the books, records, 

18 and personnel of the Center to ensure that allowances 

19 distributed to the Center, and awards made under 

20 subsection (e), have been utilized in a manner con21 sistent with this section. 

22 SEC. 172. BUILDING ASSESSMENT CENTERS. 

23 (a) IN GENERAL.—The Secretary of Energy (in this 

24 section referred to as the ‘‘Secretary’’) shall provide funding 

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1 to institutions of higher education for Building Assessment 

2 Centers to— 

3 (1) identify opportunities for optimizing energy 

4 efficiency and environmental performance in existing 

5 buildings; 

6 (2) promote high-efficiency building construction 

7 techniques and materials options; 

8 (3) promote applications of emerging concepts 

9 and technologies in commercial and institutional 

10 buildings; 

11 (4) train engineers, architects, building sci12 entists, and building technicians in energy-efficient 

13 design and operation; 

14 (5) assist local community colleges, trade schools, 

15 registered apprenticeship programs and other accred16 ited training programs in training building techni17 cians; 

18 (6) promote research and development for the use 

19 of alternative energy sources to supply heat and 

20 power, for buildings, particularly energy-intensive 

21 buildings; and 

22 (7) coordinate with and assist State-accredited 

23 technical training centers and community colleges, 

24 while ensuring appropriate services to all regions of 

25 the United States. 

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1 (b) COORDINATION WITH REGIONAL CENTERS FOR

2 ENERGY AND ENVIRONMENTAL KNOWLEDGE AND OUT3 REACH.—A Building Assessment Center may serve as a 

4 Center for Energy and Environmental Knowledge and Out5 reach established pursuant to section 173. 

6 (c) COORDINATION AND DUPLICATION.—The Secretary 

7 shall coordinate efforts under this section with other pro8 grams of the Department of Energy and other Federal agen9 cies to avoid duplication of effort. 

10 (d) AUTHORIZATION OF APPROPRIATIONS.—There are 

11 authorized to be appropriated to the Secretary to carry out 

12 this section $50,000,000 for fiscal year 2010 and each fiscal 

13 year thereafter. 

14 SEC. 173. CENTERS FOR ENERGY AND ENVIRONMENTAL 

15 KNOWLEDGE AND OUTREACH. 

16 (a) REGIONAL CENTERS FOR ENERGY AND ENVIRON17 MENTAL KNOWLEDGE AND OUTREACH.— 

18 (1) ESTABLISHMENT.—The Secretary shall estab19 lish not more than 10 regional Centers for Energy 

20 and Environmental Knowledge and Outreach at in21 stitutions of higher education to coordinate with and 

22 advise industrial research and assessment centers, 

23 Building Assessment Centers, and Clean Energy Ap24 plication Centers located in the region of such Center 

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1 for Energy and Environmental Knowledge and Out2 reach. 

3 (2) TECHNICAL ASSISTANCE PROGRAMS.—Each 

4 Center for Energy and Environmental Knowledge 

5 and Outreach shall consist of at least one, new or ex6 isting, high performing, of the following: 

7 (A) An industrial research and assessment 

8 center. 

9 (B) A Clean Energy Application Center. 

10 (C) A Building Assessment Center. 

11 (3) SELECTION CRITERIA.—The Secretary shall 

12 select Centers for Energy and Environmental Knowl13 edge and Outreach through a competitive process, 

14 based on the following: 

15 (A) Identification of the highest performing 

16 industrial research and assessment centers, Clean 

17 Energy Application Centers, and Building As18 sessment Centers. 

19 (B) The degree to which an institution of 

20 higher education maintains credibility among 

21 regional private sector organizations such as 

22 trade associations, engineering associations, and 

23 environmental organizations. 

24 (C) The degree to which an institution of 

25 higher education is providing or has provided 

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1 technical assistance, academic leadership, and 

2 market leadership in the energy arena in a man3 ner that is consistent with the areas of focus of 

4 industrial research and assessment centers, Clean 

5 Energy Application Centers, and Building As6 sessment Centers. 

7 (D) The presence of an additional indus8 trial research and assessment center, Clean En9 ergy Application Center, or Building Assessment 

10 Center at the institution of higher education. 

11 (4) GEOGRAPHIC DIVERSITY.—In selecting Cen12 ters for Energy and Environmental Knowledge and 

13 Outreach under this subsection, the Secretary shall 

14 ensure such Centers are distributed geographically in 

15 a relatively uniform manner to ensure all regions of 

16 the Nation are represented. 

17 (5) REGIONAL LEADERSHIP.—Each Center for 

18 Energy and Environmental Knowledge and Outreach 

19 shall, to the extent possible, provide leadership to all 

20 other industrial research and assessment centers, 

21 Clean Energy Application Centers, and Building As22 sessment Centers located in the Center’s geographic re23 gion, as determined by the Secretary. Such leadership 

24 shall include— 

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1 (A) developing regional goals specific to the 

2 purview of the industrial research and assess3 ment centers, Clean Energy Application Centers, 

4 and Building Assessment Centers programs; 

5 (B) developing regionally specific technical 

6 resources; and 

7 (C) outreach to interested parties in the re8 gion to inform them of the information, re9 sources, and services available through the associ10 ated industrial research and assessment centers, 

11 Clean Energy Application Centers, and Building 

12 Assessment Centers. 

13 (6) FURTHER COORDINATION.—To increase the 

14 value and capabilities of the regionally associated in15 dustrial research and assessment centers, Clean En16 ergy Application Centers, and Building Assessment 

17 Centers programs, Centers for Energy and Environ18 mental Knowledge and Outreach shall— 

19 (A) coordinate with Manufacturing Exten20 sion Partnership Centers of the National Insti21 tute of Science and Technology; 

22 (B) coordinate with the relevant programs 

23 in the Department of Energy, including the 

24 Building Technology Program and Industrial 

25 Technologies Program; 

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1 (C) increase partnerships with the National 

2 Laboratories of the Department of Energy to le3 verage the expertise and technologies of the Na4 tional Laboratories to achieve the goals of the in5 dustrial research and assessment centers, Clean 

6 Energy Application Centers, and Building As7 sessment Centers; 

8 (D) work with relevant municipal, county, 

9 and State economic development entities to lever10 age relevant financial incentives for capital in11 vestment and other policy tools for the protection 

12 and growth of local business and industry; 

13 (E) partner with local professional and pri14 vate trade associations and business development 

15 interests to leverage existing knowledge of local 

16 business challenges and opportunities; 

17 (F) work with energy utilities and other ad18 ministrators of publicly funded energy programs 

19 to leverage existing energy efficiency and clean 

20 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 to 

23 carry out this subsection, the Secretary shall use 

24 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 of 

18 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 172. 

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 fis8 cal year thereafter. Subject to the availability of ap9 propriations, of the funds made available to carry out 

10 this subsection, the Secretary shall provide to each 

11 Center for Energy and Environmental Knowledge 

12 and Outreach not less than $500,000 for fiscal year 

13 2010 and each fiscal year thereafter. 

14 (b) INTEGRATION OF OTHER TECHNICAL ASSISTANCE

15 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 AND

24 ENVIRONMENTAL KNOWLEDGE AND OUTREACH.—A Clean 

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1 ergy and Environmental Knowledge and Outreach estab2 lished pursuant to section 173 of the American Clean En3 ergy 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 ENERGY

22 AND ENVIRONMENTAL KNOWLEDGE AND OUTREACH.— 

23 An industrial research and assessment center may 

24 serve as a Center for Energy and Environmental 

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1 tion 173 of the American Clean Energy and Security 

2 Act of 2009.’’. 

3 (c) ADDITIONAL FUNDING FOR CLEAN ENERGY APPLI4 CATION CENTERS.—Subsection (g) of section 375 of the En5 ergy Policy and Conservation Act (42 U.S.C. 6345(f)), as 

6 redesignated by subsection (b)(1) of this section, is amended 

7 by striking ‘‘$10,000,000 for each of fiscal years 2008 

8 through 2012’’ and inserting ‘‘$30,000,000 for fiscal year 

9 2010 and each fiscal year thereafter’’. 

10 Subtitle I—Nuclear and Advanced 

11 Technologies 

12 SEC. 181. REVISIONS TO LOAN GUARANTEE PROGRAM AU13 THORITY. 

14 (a) DEFINITION OF CONDITIONAL COMMITMENT.—Sec15 tion 1701 of the Energy Policy Act of 2005 (42 U.S.C. 

16 16511), as amended by section 130(a) of this Act, is amend17 ed by adding after paragraph (7) the following: 

18 ‘‘(8) CONDITIONAL COMMITMENT.—The term 

19 ‘conditional commitment’ means a final term sheet 

20 negotiated between the Secretary and a project spon21 sor or sponsors, which term sheet shall be binding on 

22 both parties and become a final loan guarantee agree23 ment if all conditions precedent established in the 

24 term sheet, which shall include the acquisition of all 

25 necessary permits and licenses, are satisfied.’’. 

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1 (b) SPECIFIC APPROPRIATION OR CONTRIBUTION.— 

2 Section 1702 of the Energy Policy Act of 2005 (42 U.S.C. 

3 16512) is amended by striking subsection (b) and inserting 

4 the following: 

5 ‘‘(b) SPECIFIC APPROPRIATION OR CONTRIBUTION.— 

6 ‘‘(1) IN GENERAL.—No guarantee shall be made 

7 unless— 

8 ‘‘(A) an appropriation for the cost has been 

9 made; 

10 ‘‘(B) the Secretary has received from the 

11 borrower a payment in full for the cost of the ob12 ligation and deposited the payment into the 

13 Treasury; or 

14 ‘‘(C) a combination of appropriations or 

15 payments from the borrower has been made suffi16 cient to cover the cost of the obligation. 

17 ‘‘(2) LIMITATION.—The source of payments re18 ceived from a borrower under paragraph (1)(B) shall 

19 not be a loan or other debt obligation that is made 

20 or guaranteed by the Federal Government.’’. 

21 (c) FEES.—Section 1702(h) of the Energy Policy Act 

22 of 2005 (42 U.S.C. 16512(h)) is amended by striking para23 graph (2) and inserting the following: 

24 ‘‘(2) AVAILABILITY.—Fees collected under this 

25 subsection shall— 

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1 ‘‘(A) be deposited by the Secretary into a 

2 special fund in the Treasury to be known as the 

3 ‘Incentives For Innovative Technologies Fund’; 

4 and 

5 ‘‘(B) remain available to the Secretary for 

6 expenditure, without further appropriation or 

7 fiscal year limitation, for administrative ex8 penses incurred in carrying out this title.’’. 

9 (d) WAGE RATE REQUIREMENTS.—Section 1702 of the 

10 Energy Policy Act of 2005 (42 U.S.C. 16512) is amended 

11 by adding at the end the following new subsection: 

12 ‘‘(k) WAGE RATE REQUIREMENTS.—No loan guar13 antee shall be made under this title unless the borrower has 

14 provided to the Secretary reasonable assurances that all la15 borers and mechanics employed by contractors and sub16 contractors in the performance of construction work fi17 nanced in whole or in part by the guaranteed loan will 

18 be paid wages at rates not less than those prevailing on 

19 projects of a character similar to the contract work in the 

20 civil subdivision of the State in which the contract work 

21 is to be performed as determined by the Secretary of Labor 

22 in accordance with subchapter IV of chapter 31 of part A 

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

24 to the labor standards specified in this subsection, the Sec25 retary of Labor shall have the authority and functions set 

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1 forth in Reorganization Plan Numbered 14 of 1950 (64 

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

3 United States Code.’’. 

4 SEC. 182. PURPOSE. 

5 The purpose of sections 183 through 189 of this subtitle 

6 is to promote the domestic development and deployment of 

7 clean energy technologies required for the 21st century 

8 through the establishment of a self-sustaining Clean Energy 

9 Deployment Administration that will provide for an attrac10 tive investment environment through partnership with and 

11 support of the private capital market in order to promote 

12 access to affordable financing for accelerated and wide13 spread deployment of— 

14 (1) clean energy technologies; 

15 (2) advanced or enabling energy infrastructure 

16 technologies; 

17 (3) energy efficiency technologies in residential, 

18 commercial, and industrial applications, including 

19 end-use efficiency in buildings; and 

20 (4) manufacturing technologies for any of the 

21 technologies or applications described in this section. 

22 SEC. 183. DEFINITIONS. 

23 In this subtitle: 

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1 (1) ADMINISTRATION.—The term ‘‘Administra2 tion’’ means the Clean Energy Deployment Adminis3 tration established by section 186. 

4 (2) ADVISORY COUNCIL.—The term ‘‘Advisory 

5 Council’’ means the Energy Technology Advisory 

6 Council of the Administration. 

7 (3) BREAKTHROUGH TECHNOLOGY.—The term 

8 ‘‘breakthrough technology’’ means a clean energy tech9 nology that— 

10 (A) presents a significant opportunity to 

11 advance the goals developed under section 185, as 

12 assessed under the methodology established by the 

13 Advisory Council; but 

14 (B) has generally not been considered a 

15 commercially ready technology as a result of 

16 high perceived technology risk or other similar 

17 factors. 

18 (4) CLEAN ENERGY TECHNOLOGY.—The term 

19 ‘‘clean energy technology’’ means a technology related 

20 to the production, use, transmission, storage, control, 

21 or conservation of energy— 

22 (A) that will contribute to a stabilization of 

23 atmospheric greenhouse gas concentrations thor24 ough reduction, avoidance, or sequestration of 

25 energy-related emissions and— 

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1 (i) reduce the need for additional en2 ergy supplies by using existing energy sup3 plies with greater efficiency or by transmit4 ting, distributing, or transporting energy 

5 with greater effectiveness through the infra6 structure of the United States; or 

7 (ii) diversify the sources of energy sup8 ply of the United States to strengthen en9 ergy security and to increase supplies with 

10 a favorable balance of environmental effects 

11 if the entire technology system is considered; 

12 and 

13 (B) for which, as determined by the Admin14 istrator, insufficient commercial lending is 

15 available to allow for widespread deployment. 

16 (5) COST.—The term ‘‘cost’’ has the meaning 

17 given the term in section 502 of the Federal Credit 

18 Reform Act of 1990 (2 U.S.C. 661a). 

19 (6) DIRECT LOAN.—The term ‘‘direct loan’’ has 

20 the meaning given the term in section 502 of the Fed21 eral Credit Reform Act of 1990 (2 U.S.C. 661a). 

22 (7) FUND.—The term ‘‘Fund’’ means the Clean 

23 Energy Investment Fund established by section 

24 184(a). 

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1 (8) LOAN GUARANTEE.—The term ‘‘loan guar2 antee’’ has the meaning given the term in section 502 

3 of the Federal Credit Reform Act of 1990 (2 U.S.C. 

4 661a). 

5 (9) NATIONAL LABORATORY.—The term ‘‘Na6 tional Laboratory’’ has the meaning given the term in 

7 section 2 of the Energy Policy Act of 2005 (42 U.S.C. 

8 15801). 

9 (10) SECRETARY.—The term ‘‘Secretary’’ means 

10 the Secretary of Energy. 

11 (11) STATE.—The term ‘‘State’’ means— 

12 (A) a State; 

13 (B) the District of Columbia; 

14 (C) the Commonwealth of Puerto Rico; and 

15 (D) any other territory or possession of the 

16 United States. 

17 (12) TECHNOLOGY RISK.—The term ‘‘technology 

18 risk’’ means the risks during construction or oper19 ation associated with the design, development, and de20 ployment of clean energy technologies (including the 

21 cost, schedule, performance, reliability and mainte22 nance, and accounting for the perceived risk), from 

23 the perspective of commercial lenders, that may be in24 creased as a result of the absence of adequate histormstockstill on PROD1PC66 with BILLS

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1 ical construction, operating, or performance data 

2 from commercial applications of the technology. 

3 SEC. 184. CLEAN ENERGY INVESTMENT FUND. 

4 (a) ESTABLISHMENT.—There is established in the 

5 Treasury of the United States a revolving fund, to be known 

6 as the ‘‘Clean Energy Investment Fund’’, consisting of— 

7 (1) such amounts as are deposited in the Fund 

8 under this subtitle; and 

9 (2) such sums as may be appropriated to supple10 ment the Fund. 

11 (b) AUTHORIZATION OF APPROPRIATIONS.—There are 

12 authorized to be appropriated to the Fund such sums as 

13 are necessary to carry out this subtitle. 

14 (c) EXPENDITURES FROM FUND.— 

15 (1) IN GENERAL.—Amounts in the Fund shall be 

16 available to the Administrator of the Administration 

17 for obligation without fiscal year limitation, to re18 main available until expended. 

19 (2) ADMINISTRATIVE EXPENSES.— 

20 (A) FEES.—Fees collected for administra21 tive expenses shall be available without limita22 tion to cover applicable expenses. 

23 (B) FUND.—To the extent that administra24 tive expenses are not reimbursed through fees, an 

25 amount not to exceed 1.5 percent of the amounts 

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1 in the Fund as of the beginning of each fiscal 

2 year shall be available to pay the administrative 

3 expenses for the fiscal year necessary to carry 

4 out this subtitle. 

5 (d) TRANSFERS OF AMOUNTS.— 

6 (1) IN GENERAL.—The amounts required to be 

7 transferred to the Fund under this section shall be 

8 transferred at least monthly from the general fund of 

9 the Treasury to the Fund on the basis of estimates 

10 made by the Secretary of the Treasury. 

11 (2) ADJUSTMENTS.—Proper adjustment shall be 

12 made in amounts subsequently transferred to the ex13 tent prior estimates were in excess of or less than the 

14 amounts required to be transferred. 

15 SEC. 185. ENERGY TECHNOLOGY DEPLOYMENT GOALS. 

16 (a) GOALS.—Not later than 1 year after the date of 

17 enactment of this Act, the Secretary, after consultation with 

18 the Advisory Council, shall develop and publish for review 

19 and comment in the Federal Register near-, medium-, and 

20 long-term goals (including numerical performance targets 

21 at appropriate intervals to measure progress toward those 

22 goals) for the deployment of clean energy technologies 

23 through the credit support programs established by section 

24 187 to promote— 

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1 (1) sufficient electric generating capacity using 

2 clean energy technologies to meet the energy needs of 

3 the United States; 

4 (2) clean energy technologies in vehicles and fuels 

5 that will substantially reduce the reliance of the 

6 United States on foreign sources of energy and insu7 late consumers from the volatility of world energy 

8 markets; 

9 (3) a domestic commercialization and manufac10 turing capacity that will establish the United States 

11 as a world leader in clean energy technologies across 

12 multiple sectors; 

13 (4) installation of sufficient infrastructure to 

14 allow for the cost-effective deployment of clean energy 

15 technologies appropriate to each region of the United 

16 States; 

17 (5) the transformation of the building stock of 

18 the United States to zero net energy consumption; 

19 (6) the recovery, use, and prevention of waste en20 ergy; 

21 (7) domestic manufacturing of clean energy tech22 nologies on a scale that is sufficient to achieve price 

23 parity with conventional energy sources; 

24 (8) domestic production of commodities and ma25 terials (such as steel, chemicals, polymers, and cemstockstill on PROD1PC66 with BILLS

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1 ment) using clean energy technologies so that the 

2 United States will become a world leader in environ3 mentally sustainable production of the commodities 

4 and materials; 

5 (9) a robust, efficient, and interactive electricity 

6 transmission grid that will allow for the incorpora7 tion of clean energy technologies, distributed genera8 tion, and demand-response in each regional electric 

9 grid; 

10 (10) sufficient availability of financial products 

11 to allow owners and users of residential, retail, com12 mercial, and industrial buildings to make energy effi13 ciency and distributed generation technology invest14 ments with reasonable payback periods; and 

15 (11) such other goals as the Secretary, in con16 sultation with the Advisory Council, determines to be 

17 consistent with the purpose stated in section 182. 

18 (b) REVISIONS.—The Secretary shall revise the goals 

19 established under subsection (a), from time to time as ap20 propriate, to account for advances in technology and 

21 changes in energy policy. 

22 SEC. 186. CLEAN ENERGY DEPLOYMENT ADMINISTRATION. 

23 (a) ESTABLISHMENT.— 

24 (1) IN GENERAL.—There is established in the De25 partment of Energy an administration to be known 

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1 as the Clean Energy Deployment Administration, 

2 under the direction of the Administrator of the Ad3 ministration and the Board of Directors. 

4 (2) STATUS.— 

5 (A) IN GENERAL.—The Administration (in6 cluding officers, employees, and agents of the Ad7 ministration) shall not be responsible to, or sub8 ject to the authority, direction, or control of, any 

9 other officer, employee, or agent of the Depart10 ment of Energy other than the Secretary, acting 

11 through the Administrator of the Administra12 tion. 

13 (B) EXEMPTION FROM REORGANIZATION.— 

14 The Administration shall be exempt from the re15 organization authority provided under section 

16 643 of the Department of Energy Reorganization 

17 Act (42 U.S.C. 7253). 

18 (C) INSPECTOR GENERAL.—Section 12 of 

19 the Inspector General Act of 1978 (5 U.S.C. 

20 App.) is amended— 

21 (i) in paragraph (1), by inserting ‘‘the 

22 Administrator of the Clean Energy Deploy23 ment Administration;’’ after ‘‘Export-Im24 port Bank;’’; and 

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1 (ii) in paragraph (2), by inserting 

2 ‘‘the Clean Energy Deployment Administra3 tion,’’ after ‘‘Export-Import Bank,’’. 

4 (3) OFFICES.— 

5 (A) PRINCIPAL OFFICE.—The Administra6 tion shall— 

7 (i) maintain the principal office of the 

8 Administration in the District of Columbia; 

9 and 

10 (ii) for purposes of venue in civil ac11 tions, be considered to be a resident of the 

12 District of Columbia. 

13 (B) OTHER OFFICES.—The Administration 

14 may establish other offices in such other places 

15 as the Administration considers necessary or ap16 propriate for the conduct of the business of the 

17 Administration. 

18 (b) ADMINISTRATOR.— 

19 (1) IN GENERAL.—The Administrator of the Ad20 ministration shall be— 

21 (A) appointed by the President, with the 

22 advice and consent of the Senate, for a 5-year 

23 term; and 

24 (B) compensated at the annual rate of basic 

25 pay prescribed for level II of the Executive 

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1 Schedule under section 5313 of title 5, United 

2 States Code. 

3 (2) DUTIES.—The Administrator of the Admin4 istration shall— 

5 (A) serve as the Chief Executive Officer of 

6 the Administration and Chairman of the Board; 

7 (B) ensure that— 

8 (i) the Administration operates in a 

9 safe and sound manner, including mainte10 nance of adequate capital and internal con11 trols (consistent with section 404 of the Sar12 banes-Oxley Act of 2002 (15 U.S.C. 7262)); 

13 (ii) the operations and activities of the 

14 Administration foster liquid, efficient, com15 petitive, and resilient energy and energy ef16 ficiency finance markets; 

17 (iii) the Administration carries out the 

18 purpose stated in section 182 only through 

19 activities that are authorized under and 

20 consistent with sections 182 through 189; 

21 and 

22 (iv) the activities of the Administra23 tion and the manner in which the Adminis24 tration is operated are consistent with the 

25 public interest; 

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1 (C) develop policies and procedures for the 

2 Administration that will— 

3 (i) promote a self-sustaining portfolio 

4 of investments that will maximize the value 

5 of investments to effectively promote clean 

6 energy technologies; 

7 (ii) promote transparency and open8 ness in Administration operations; 

9 (iii) afford the Administration with 

10 sufficient flexibility to meet the purpose 

11 stated in section 182; and 

12 (iv) provide for the efficient processing 

13 of applications; and 

14 (D) with the concurrence of the Board, set 

15 expected loss reserves for the support provided by 

16 the Administration consistent with section 

17 187(c). 

18 (c) BOARD OF DIRECTORS.— 

19 (1) IN GENERAL.—The Board of Directors of the 

20 Administration shall consist of— 

21 (A) the Secretary or the designee of the Sec22 retary, who shall serve as an ex-officio voting 

23 member of the Board of Directors; 

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1 (B) the Administrator of the Administra2 tion, who shall serve as the Chairman of the 

3 Board of Directors; and 

4 (C) 7 additional members who shall— 

5 (i) be appointed by the President, with 

6 the advice and consent of the Senate, for 

7 staggered 5-year terms; and 

8 (ii) have experience in banking, finan9 cial services, technology assessment, energy 

10 regulation, or risk management, including 

11 individuals with substantial experience in 

12 the development of energy projects, the elec13 tricity generation sector, the transportation 

14 sector, the manufacturing sector, and the 

15 energy efficiency sector. 

16 (2) DUTIES.—The Board of Directors shall— 

17 (A) oversee the operations of the Adminis18 tration and ensure industry best practices are 

19 followed in all financial transactions involving 

20 the Administration; 

21 (B) consult with the Administrator of the 

22 Administration on the general policies and pro23 cedures of the Administration to ensure the in24 terests of the taxpayers are protected; 

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1 (C) ensure the portfolio of investments are 

2 consistent with purpose stated in section 182 and 

3 with the long-term financial stability of the Ad4 ministration; 

5 (D) ensure that the operations and activi6 ties of the Administration are consistent with the 

7 development of a robust private sector that can 

8 provide commercial loans or financing products; 

9 and 

10 (E) not serve on a full-time basis, except 

11 that the Board of Directors shall meet at least 

12 quarterly to review, as appropriate, applications 

13 for credit support and set policies and proce14 dures as necessary. 

15 No member of the Board shall take part in any re16 view or decision of any project as to which that mem17 ber or member’s immediate family has a financial or 

18 other interest. 

19 (3) REMOVAL.—An appointed member of the 

20 Board of Directors may be removed from office by the 

21 President for good cause. 

22 (4) VACANCIES.—An appointed seat on the 

23 Board of Directors that becomes vacant shall be filled 

24 by appointment by the President, but only for the un25 expired portion of the term of the vacating member. 

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1 (5) COMPENSATION OF MEMBERS.—An ap2 pointed member of the Board of Directors shall be 

3 compensated at a rate equal to the daily equivalent 

4 of the annual rate of basic pay prescribed for level III 

5 of the Executive Schedule under section 5314 of title 

6 5, United States Code, for each day (including travel 

7 time) during which the member is engaged in the per8 formance of the duties of the Board of Directors. 

9 (d) ENERGY TECHNOLOGY ADVISORY COUNCIL.— 

10 (1) IN GENERAL.—The Administration shall 

11 have an Energy Technology Advisory Council con12 sisting of— 

13 (A) 5 members selected by the Secretary; 

14 and 

15 (B) 3 members selected by the Board of Di16 rectors of the Administration. 

17 (2) QUALIFICATIONS.—The members of the Advi18 sory Council shall— 

19 (A) have relevant scientific expertise; and 

20 (B) in the case of the members selected by 

21 the Secretary under paragraph (1)(A), include 

22 representatives of— 

23 (i) the academic community; 

24 (ii) the private research community; 

25 (iii) National Laboratories; 

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1 (iv) the technology or project develop2 ment community; and 

3 (v) the commercial energy financing 

4 and operations sector. 

5 (3) DUTIES.—The Advisory Council shall— 

6 (A) develop and publish for comment in the 

7 Federal Register a methodology for assessment of 

8 clean energy technologies that will allow the Ad9 ministration to evaluate projects based on the 

10 progress likely to be achieved per-dollar invested 

11 in maximizing the attributes of the definition of 

12 clean energy technology, taking into account the 

13 extent to which support for a clean energy tech14 nology is likely to accrue subsequent benefits that 

15 are attributable to a commercial scale deploy16 ment taking place earlier than that which other17 wise would have occurred without the support; 

18 and 

19 (B) advise on the technological approaches 

20 that should be supported by the Administration 

21 to meet the technology deployment goals estab22 lished by the Secretary pursuant to section 185. 

23 (4) TERM.— 

24 (A) IN GENERAL.—Members of the Advisory 

25 Council shall have 5-year staggered terms, as demstockstill on PROD1PC66 with BILLS

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1 termined by the Secretary and the Administrator 

2 of the Administration. 

3 (B) REAPPOINTMENT.—A member of the 

4 Advisory Council may be reappointed. 

5 (5) COMPENSATION.—A member of the Advisory 

6 Council, who is not otherwise compensated as a Fed7 eral employee, shall be compensated at a rate equal 

8 to the daily equivalent of the annual rate of basic pay 

9 prescribed for level IV of the Executive Schedule 

10 under section 5315 of title 5, United States Code, for 

11 each day (including travel time) during which the 

12 member is engaged in the performance of the duties 

13 of the Advisory Council. 

14 (e) STAFF.— 

15 (1) IN GENERAL.—The Administrator of the Ad16 ministration, in consultation with the Board of Di17 rectors, may— 

18 (A) appoint and terminate such officers, at19 torneys, employees, and agents as are necessary 

20 to carry out this subtitle; and 

21 (B) vest those personnel with such powers 

22 and duties as the Administrator of the Adminis23 tration may determine. 

24 (2) DIRECT HIRE AUTHORITY.— 

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1 (A) IN GENERAL.—Notwithstanding section 

2 3304 and sections 3309 through 3318 of title 5, 

3 United States Code, the Administrator of the Ad4 ministration may, on a determination that there 

5 is a severe shortage of candidates or a critical 

6 hiring need for particular positions, recruit and 

7 directly appoint highly qualified critical per8 sonnel with specialized knowledge important to 

9 the function of the Administration into the com10 petitive service. 

11 (B) EXCEPTION.—The authority granted 

12 under subparagraph (A) shall not apply to posi13 tions in the excepted service or the Senior Execu14 tive Service. 

15 (C) REQUIREMENTS.—In exercising the au16 thority granted under subparagraph (A), the Ad17 ministrator of the Administration shall ensure 

18 that any action taken by the Administrator of 

19 the Administration— 

20 (i) is consistent with the merit prin21 ciples of section 2301 of title 5, United 

22 States Code; and 

23 (ii) complies with the public notice re24 quirements of section 3327 of title 5, United 

25 States Code. 

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1 (D) TERMINATION OF EFFECTIVENESS.— 

2 The authority provided by this paragraph termi3 nates effective on the date that is 2 years after 

4 the date of enactment of this Act. 

5 (3) CRITICAL PAY AUTHORITY.— 

6 (A) IN GENERAL.—Notwithstanding section 

7 5377 of title 5, United States Code, and without 

8 regard to the provisions of that title governing 

9 appointments in the competitive service or the 

10 Senior Executive Service and chapters 51 and 53 

11 of that title (relating to classification and pay 

12 rates), the Administrator of the Administration 

13 may establish, fix the compensation of, and ap14 point individuals to critical positions needed to 

15 carry out the functions of the Administration, if 

16 the Administrator of the Administration certifies 

17 that— 

18 (i) the positions require expertise of an 

19 extremely high level in a financial, tech20 nical, or scientific field; 

21 (ii) the Administration would not suc22 cessfully accomplish an important mission 

23 without such an individual; and 

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1 (iii) exercise of the authority is nec2 essary to recruit an individual who is ex3 ceptionally well qualified for the position. 

4 (B) LIMITATIONS.—The authority granted 

5 under subparagraph (A) shall be subject to the 

6 following conditions: 

7 (i) The number of critical positions au8 thorized by subparagraph (A) may not ex9 ceed 20 at any 1 time in the Administra10 tion. 

11 (ii) The term of an appointment under 

12 subparagraph (A) may not exceed 4 years. 

13 (iii) An individual appointed under 

14 subparagraph (A) may not have been an 

15 Administration employee at any time dur16 ing the 2-year period preceding the date of 

17 appointment. 

18 (iv) Total annual compensation for 

19 any individual appointed under subpara20 graph (A) may not exceed the highest total 

21 annual compensation payable at the rate 

22 determined under section 104 of title 3, 

23 United States Code. 

24 (v) An individual appointed under 

25 subparagraph (A) may not be considered to 

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1 be an employee for purposes of subchapter 

2 II of chapter 75 of title 5, United States 

3 Code. 

4 (C) NOTIFICATION.—Each year, the Admin5 istrator of the Administration shall submit to 

6 Congress a notification that lists each individual 

7 appointed under this paragraph. 

8 SEC. 187. DIRECT SUPPORT. 

9 (a) IN GENERAL.—The Administration may issue di10 rect loans, letters of credit, and loan guarantees to deploy 

11 clean energy technologies if the Administrator of the Ad12 ministration has determined that deployment of the tech13 nologies would benefit or be accelerated by the support. 

14 (b) ELIGIBILITY CRITERIA.—In carrying out this sec15 tion and awarding credit support to projects, the Adminis16 trator of the Administration shall account for— 

17 (1) how the technology rates based on an evalua18 tion methodology established by the Advisory Council; 

19 (2) how the project fits with the goals established 

20 under section 185; and 

21 (3) the potential for the applicant to successfully 

22 complete the project. 

23 (c) RISK.— 

24 (1) EXPECTED LOAN LOSS RESERVE.—The Ad25 ministrator of the Administration shall establish an 

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1 expected loan loss reserve to account for estimated 

2 losses attributable to activities under this section that 

3 is consistent with the purposes of— 

4 (A) developing breakthrough technologies to 

5 the point at which technology risk is largely 

6 mitigated; 

7 (B) achieving widespread deployment and 

8 advancing the commercial viability of clean en9 ergy technologies; and 

10 (C) advancing the goals established under 

11 section 185. 

12 (2) INITIAL EXPECTED LOAN LOSS RESERVE.— 

13 Until such time as the Administrator of the Adminis14 tration determines sufficient data exist to establish an 

15 expected loan loss reserve that is appropriate, the Ad16 ministrator of the Administration shall consider es17 tablishing an initial rate of 10 percent for the port18 folio of investments under this subtitle. 

19 (3) PORTFOLIO INVESTMENT APPROACH.—The 

20 Administration shall— 

21 (A) use a portfolio investment approach to 

22 mitigate risk and diversify investments across 

23 technologies and ensure that no particular tech24 nology is provided more than 30 percent of the 

25 financial support available; 

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1 (B) to the maximum extent practicable and 

2 consistent with long-term self-sufficiency, weigh 

3 the portfolio of investments in projects to ad4 vance the goals established under section 185; 

5 (C) consistent with the expected loan loss re6 serve established under this subsection, the pur7 pose stated in section 182, and section 

8 186(b)(2)(B), provide the maximum practicable 

9 percentage of support to promote breakthrough 

10 technologies; and 

11 (D) give the highest priority to investments 

12 that promote technologies that will achieve the 

13 maximum greenhouse gas emission reductions 

14 within a reasonable period of time per dollar in15 vested and the earliest reductions in greenhouse 

16 gas emissions. 

17 (4) LOSS RATE REVIEW.— 

18 (A) IN GENERAL.—The Board of Directors 

19 shall review on an annual basis the loss rates of 

20 the portfolio to determine the adequacy of the re21 serves. 

22 (B) REPORT.—Not later than 90 days after 

23 the date of the initiation of the review, the Ad24 ministrator of the Administration shall submit 

25 to the Committee on Energy and Natural Remstockstill on PROD1PC66 with BILLS

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1 sources of the Senate and the Committee on En2 ergy and Commerce of the House of Representa3 tives a report describing the results of the review 

4 and any recommended policy changes. 

5 (5) FEDERAL COST SHARE.—A loan guarantee 

6 by the Administration shall not exceed an amount 

7 equal to 80 percent of the project cost of the facility 

8 that is the subject of the guarantee, as estimated at 

9 the time at which the guarantee is issued. 

10 (d) APPLICATION REVIEW.— 

11 (1) IN GENERAL.—To the maximum extent prac12 ticable and consistent with sound business practices, 

13 the Administration shall seek to consolidate reviews of 

14 applications for credit support under this subtitle 

15 such that final decisions on applications can gen16 erally be issued not later than 180 days after the date 

17 of submission of a completed application. 

18 (2) ENVIRONMENTAL REVIEW.—In carrying out 

19 this subtitle, the Administration shall, to the max20 imum extent practicable— 

21 (A) avoid duplicating efforts that have al22 ready been undertaken by other agencies (includ23 ing State agencies acting under Federal pro24 grams); and 

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1 (B) with the advice of the Council on Envi2 ronmental Quality and any other applicable 

3 agencies, use the administrative records of simi4 lar reviews conducted throughout the executive 

5 branch to develop the most expeditious review 

6 process practicable. 

7 (e) WAGE RATE REQUIREMENTS.— 

8 (1) IN GENERAL.—No credit support shall be 

9 issued under this section unless the borrower has pro10 vided to the Administrator of the Administration rea11 sonable assurances that all laborers and mechanics 

12 employed by contractors and subcontractors in the 

13 performance of construction work financed in whole 

14 or in part by the Administration will be paid wages 

15 at rates not less than those prevailing on projects of 

16 a character similar to the contract work in the civil 

17 subdivision of the State in which the contract work is 

18 to be performed as determined by the Secretary of 

19 Labor in accordance with subchapter IV of chapter 31 

20 of part A of subtitle II of title 40, United States Code. 

21 (2) LABOR STANDARDS.—With respect to the 

22 labor standards specified in this subsection, the Sec23 retary of Labor shall have the authority and functions 

24 set forth in Reorganization Plan Numbered 14 of 

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1 1950 (64 Stat. 1267; 5 U.S.C. App.) and section 3145 

2 of title 40, United States Code. 

3 SEC. 188. FEDERAL CREDIT AUTHORITY. 

4 (a) PAYMENTS OF LIABILITIES.— 

5 (1) IN GENERAL.—Any payment made to dis6 charge liabilities arising from agreements under this 

7 subtitle shall be paid out of the Fund or the associ8 ated credit account, as appropriate. 

9 (2) SECURITY.—The full faith and credit of the 

10 United States is pledged to the payment of all obliga11 tions entered into by the Administration pursuant to 

12 this subtitle. 

13 (b) FEES.— 

14 (1) IN GENERAL.—Consistent with achieving the 

15 purpose stated in section 182, the Administrator of 

16 the Administration shall charge fees or collect com17 pensation generally in accordance with commercial 

18 rates. 

19 (2) AVAILABILITY OF FEES.—All fees collected by 

20 the Administration may be retained by the Adminis21 tration and placed in the Fund and may remain 

22 available to the Administration, without further ap23 propriation or fiscal year limitation, for use in car24 rying out the purpose stated in section 182. 

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1 (3) BREAKTHROUGH TECHNOLOGIES.—The Ad2 ministration shall charge the minimum amount in 

3 fees or compensation practicable for breakthrough 

4 technologies, consistent with the long-term viability of 

5 the Administration, unless the Administration first 

6 determines that a higher charge will not impede the 

7 development of the technology. 

8 (4) ALTERNATIVE FEE ARRANGEMENTS.—The 

9 Administration may use such alternative arrange10 ments (such as profit participation, contingent fees, 

11 and other valuable contingent interests) as the Ad12 ministration considers appropriate to compensate the 

13 Administration for the expenses of the Administration 

14 and the risk inherent in the support of the Adminis15 tration. 

16 (c) COST TRANSFER AUTHORITY.—Amounts collected 

17 by the Administration for the cost of a loan or loan guar18 antee shall be transferred by the Administration to the re19 spective credit accounts. 

20 SEC. 189. GENERAL PROVISIONS. 

21 (a) IMMUNITY FROM IMPAIRMENT, LIMITATION, OR

22 RESTRICTION.— 

23 (1) IN GENERAL.—All rights and remedies of the 

24 Administration (including any rights and remedies of 

25 the Administration on, under, or with respect to any 

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1 mortgage or any obligation secured by a mortgage) 

2 shall be immune from impairment, limitation, or re3 striction by or under— 

4 (A) any law (other than a law enacted by 

5 Congress expressly in limitation of this para6 graph) that becomes effective after the acquisition 

7 by the Administration of the subject or property 

8 on, under, or with respect to which the right or 

9 remedy arises or exists or would so arise or exist 

10 in the absence of the law; or 

11 (B) any administrative or other action that 

12 becomes effective after the acquisition. 

13 (2) STATE LAW.—The Administrator of the Ad14 ministration may conduct the business of the Admin15 istration without regard to any qualification or law 

16 of any State relating to incorporation. 

17 (b) USE OF OTHER AGENCIES.—With the consent of 

18 a department, establishment, or instrumentality (including 

19 any field office), the Administration may— 

20 (1) use and act through any department, estab21 lishment, or instrumentality; and 

22 (2) use, and pay compensation for, information, 

23 services, facilities, and personnel of the department, 

24 establishment, or instrumentality. 

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1 (c) PROCUREMENT.—The Administrator of the Admin2 istration shall be the senior procurement officer for the Ad3 ministration for purposes of section 16(a) of the Office of 

4 Federal Procurement Policy Act (41 U.S.C. 414(a)). 

5 (d) FINANCIAL MATTERS.— 

6 (1) INVESTMENTS.—Funds of the Administration 

7 may be invested in such investments as the Board of 

8 Directors may prescribe. 

9 (2) FISCAL AGENTS.—Any Federal Reserve bank 

10 or any bank as to which at the time of the designa11 tion of the bank by the Administrator of the Adminis12 tration there is outstanding a designation by the Sec13 retary of the Treasury as a general or other deposi14 tory of public money, may be designated by the Ad15 ministrator of the Administration as a depositary or 

16 custodian or as a fiscal or other agent of the Adminis17 tration. 

18 (e) JURISDICTION.—Notwithstanding section 1349 of 

19 title 28, United States Code, or any other provision of 

20 law— 

21 (1) the Administration shall be considered a cor22 poration covered by sections 1345 and 1442 of title 

23 28, United States Code; 

24 (2) all civil actions to which the Administration 

25 is a party shall be considered to arise under the laws 

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1 of the United States, and the district courts of the 

2 United States shall have original jurisdiction of all 

3 such actions, without regard to amount or value; and 

4 (3) any civil or other action, case or controversy 

5 in a court of a State, or in any court other than a 

6 district court of the United States, to which the Ad7 ministration is a party may at any time before trial 

8 be removed by the Administration, without the giving 

9 of any bond or security and by following any proce10 dure for removal of causes in effect at the time of the 

11 removal— 

12 (A) to the district court of the United States 

13 for the district and division embracing the place 

14 in which the same is pending; or 

15 (B) if there is no such district court, to the 

16 district court of the United States for the district 

17 in which the principal office of the Administra18 tion is located. 

19 (f) PERIODIC REPORTS.—Not later than 1 year after 

20 commencement of operation of the Administration and at 

21 least biannually thereafter, the Administrator of the Ad22 ministration shall submit to the Committee on Energy and 

23 Natural Resources of the Senate and the Committee on En24 ergy and Commerce of the House of Representatives a report 

25 that includes a description of— 

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1 (1) the technologies supported by activities of the 

2 Administration and how the activities advance the 

3 purpose stated in section 182; and 

4 (2) the performance of the Administration on 

5 meeting the goals established under section 185. 

6 (g) AUDITS BY THE COMPTROLLER GENERAL.— 

7 (1) IN GENERAL.—The programs, activities, re8 ceipts, expenditures, and financial transactions of the 

9 Administration shall be subject to audit by the Comp10 troller General of the United States under such rules 

11 and regulations as may be prescribed by the Comp12 troller General. 

13 (2) ACCESS.—The representatives of the Govern14 ment Accountability Office shall— 

15 (A) have access to the personnel and to all 

16 books, accounts, documents, records (including 

17 electronic records), reports, files, and all other 

18 papers, automated data, things, or property be19 longing to, under the control of, or in use by the 

20 Administration, or any agent, representative, at21 torney, advisor, or consultant retained by the 

22 Administration, and necessary to facilitate the 

23 audit; 

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1 (B) be afforded full facilities for verifying 

2 transactions with the balances or securities held 

3 by depositories, fiscal agents, and custodians; 

4 (C) be authorized to obtain and duplicate 

5 any such books, accounts, documents, records, 

6 working papers, automated data and files, or 

7 other information relevant to the audit without 

8 cost to the Comptroller General; and 

9 (D) have the right of access of the Comp10 troller General to such information pursuant to 

11 section 716(c) of title 31, United States Code. 

12 (3) ASSISTANCE AND COST.— 

13 (A) IN GENERAL.—For the purpose of con14 ducting an audit under this subsection, the 

15 Comptroller General may, in the discretion of 

16 the Comptroller General, employ by contract, 

17 without regard to section 3709 of the Revised 

18 Statutes (41 U.S.C. 5), professional services of 

19 firms and organizations of certified public ac20 countants for temporary periods or for special 

21 purposes. 

22 (B) REIMBURSEMENT.— 

23 (i) IN GENERAL.—On the request of the 

24 Comptroller General, the Administration 

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1 ability Office for the full cost of any audit 

2 conducted by the Comptroller General under 

3 this subsection. 

4 (ii) CREDITING.—Such reimbursements 

5 shall— 

6 (I) be credited to the appropria7 tion account entitled ‘‘Salaries and 

8 Expenses, Government Accountability 

9 Office’’ at the time at which the pay10 ment is received; and 

11 (II) remain available until ex12 pended. 

13 (h) ANNUAL INDEPENDENT AUDITS.— 

14 (1) IN GENERAL.—The Administrator of the Ad15 ministration shall— 

16 (A) have an annual independent audit 

17 made of the financial statements of the Adminis18 tration by an independent public accountant in 

19 accordance with generally accepted auditing 

20 standards; and 

21 (B) submit to the Secretary the results of 

22 the audit. 

23 (2) CONTENT.—In conducting an audit under 

24 this subsection, the independent public accountant 

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1 shall determine and report on whether the financial 

2 statements of the Administration— 

3 (A) are presented fairly in accordance with 

4 generally accepted accounting principles; and 

5 (B) comply with any disclosure require6 ments imposed under this subtitle. 

7 (i) FINANCIAL REPORTS.— 

8 (1) IN GENERAL.—The Administrator of the Ad9 ministration shall submit to the Secretary 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 an15 nual 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 most 

23 recent fiscal year of the Administration), signed 

24 by the chief executive officer and chief accounting 

25 or financial officer of the Administration, of— 

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1 (i) the effectiveness of the internal con2 trol structure and procedures of the Admin3 istration; and 

4 (ii) the compliance of the Administra5 tion with applicable safety and soundness 

6 laws. 

7 (3) SPECIAL REPORTS.—The Secretary may re8 quire the Administrator of the Administration to sub9 mit other reports on the condition (including finan10 cial condition), management, activities, or operations 

11 of the Administration, as the Secretary considers ap12 propriate. 

13 (4) ACCURACY.—Each report of financial condi14 tion shall contain a declaration by the Administrator 

15 of the Administration or any other officer designated 

16 by the Board of Directors of the Administration to 

17 make the declaration, that the report is true and cor18 rect to the best of the knowledge and belief of the offi19 cer. 

20 (5) AVAILABILITY OF REPORTS.—Reports re21 quired under this section shall be published and made 

22 publicly available as soon as is practicable after re23 ceipt by the Secretary. 

24 (j) SCOPE AND TERMINATION OF AUTHORITY.— 

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1 (1) NEW OBLIGATIONS.—The Administrator of 

2 the Administration shall not initiate any new obliga3 tions under this subtitle on or after January 1, 2029. 

4 (2) REVERSION TO SECRETARY.—The authorities 

5 and obligations of the Administration shall revert to 

6 the Secretary on January 1, 2029. 

7 Subtitle J—Miscellaneous 

8 SEC. 191. STUDY OF OCEAN RENEWABLE ENERGY AND 

9 TRANSMISSION PLANNING AND SITING. 

10 (a) DEFINITIONS.—In this section: 

11 (1) MARINE SPATIAL PLAN.—The term ‘‘marine 

12 spatial plan’’ means the analysis and allocation of 

13 ocean space for various uses to achieve ecological, eco14 nomic, and social objectives, based on the principle of 

15 ecosystem-based management. 

16 (2) MARINE SPATIAL PLANNING.—The term ‘‘ma17 rine spatial planning’’ means the process of devel18 oping a marine spatial plan. 

19 (3) ECOSYSTEM-BASED MANAGEMENT.—The term 

20 ‘‘ecosystem-based management’’ means a management 

21 approach that ensures the future ecological and eco22 nomic sustainability of natural resources by— 

23 (A) accounting for all ecosystem inter24 actions and direct, indirect, and cumulative im25 pacts of human activities on the ecosystem; 

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1 (B) emphasizing protection of ecosystem 

2 structure, functions, patterns, and processes; and 

3 (C) maintaining ecosystems in a healthy 

4 and resilient condition. 

5 (4) OFFSHORE RENEWABLE ENERGY.—The term 

6 ‘‘offshore renewable energy’’ means energy generated 

7 from offshore wind or offshore hydrokinetic (wave, 

8 tidal, ocean current, and tidal-current) energy tech9 nologies. 

10 (5) OFFSHORE RENEWABLE ENERGY FACILITY.— 

11 The term ‘‘offshore renewable energy facility’’ means 

12 a facility that generates offshore renewable energy or 

13 any offshore transmission line associated with such 

14 facility. 

15 (b) STUDY.— 

16 (1) IN GENERAL.—As soon as practicable after 

17 the date of enactment of this section, the Federal En18 ergy Regulatory Commission, the Secretary of the In19 terior, and the National Oceanic and Atmospheric 

20 Administration, in consultation with the Council on 

21 Environmental Quality and, as appropriate, coastal 

22 States, regional organizations of coastal States, and 

23 relevant nongovernmental organizations, shall jointly 

24 conduct a study of the potential for marine spatial 

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1 newable energy facilities in a manner that protects 

2 and maintains coastal and marine ecosystem health. 

3 (2) REQUIREMENTS.—The study under para4 graph (1) shall include— 

5 (A) identification of the steps involved in 

6 regional marine spatial planning for the siting 

7 of offshore renewable energy facilities; 

8 (B) a recommended approach for the devel9 opment of regional marine spatial plans for the 

10 siting of offshore renewable energy facilities that 

11 provides for— 

12 (i) the participation of relevant Fed13 eral agencies and State governments; 

14 (ii) coordination, to the maximum ex15 tent practicable, with any marine spatial 

16 planning undertaken by States; 

17 (iii) public input; and 

18 (iv) the periodic revision of such plans 

19 as necessary to account for significant new 

20 information and ensure achievement of plan 

21 objectives; 

22 (C) identification of required elements of 

23 such regional marine spatial plans, including 

24 rules that Federal agencies shall apply to appli25 cations for any authorizations required under 

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1 existing Federal law to construct or operate off2 shore renewable energy facilities within areas 

3 covered by such plans; 

4 (D) an assessment of the adequacy of exist5 ing data, including baseline environmental data, 

6 to support such marine spatial planning and 

7 identification of gaps in such data and the stud8 ies needed to fill such gaps; 

9 (E) an assessment of the resources required 

10 to carry out such marine spatial planning; 

11 (F) recommended mechanisms for the for12 mal adoption and implementation of regional 

13 marine spatial plans for the development of off14 shore renewable energy facilities by relevant Fed15 eral agencies; 

16 (G) identification of any additional author17 ity relevant Federal agencies would need to 

18 adopt and implement regional marine spatial 

19 plans for the development of offshore renewable 

20 energy facilities; and 

21 (H) such other recommendations as appro22 priate. 

23 (3) REPORT.—Not later than 6 months after the 

24 date of enactment of this section, the Federal Energy 

25 Regulatory Commission, the Secretary of the Interior, 

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1 and the National Oceanic and Atmospheric Adminis2 tration shall jointly publish the findings and rec3 ommendations of the study conducted pursuant to this 

4 subsection and shall accept public comment for at 

5 least 30 days after such publication. Following con6 sideration of any public comments, and not later 

7 than 8 months after the date of enactment of this sec8 tion, the Federal Energy Regulatory Commission, the 

9 Secretary of the Interior, and the National Oceanic 

10 and Atmospheric Administration shall jointly submit 

11 to Congress and the Council on Environmental Qual12 ity the findings and recommendations of the study 

13 conducted pursuant to this subsection. 

14 (c) ASSESSMENT OF REPORT.— 

15 (1) IN GENERAL.—Not later than 4 months after 

16 the date of submission of the report required under 

17 subsection (b)(3), the Council on Environmental 

18 Quality shall assess the recommendations of such re19 port, issue a written determination as to whether the 

20 recommended approach to marine spatial planning 

21 should be implemented, and transmit such written de22 termination to the relevant Federal agencies and Con23 gress. 

24 (2) COORDINATION FOR RECOMMENDED AP25 PROACH.—If the Council on Environmental Quality 

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1 determines that the recommended approach to marine 

2 spatial planning should be implemented, the relevant 

3 Federal agencies shall implement such approach and 

4 complete the development of marine spatial plans 

5 pursuant to that approach no later than 18 months 

6 after the written determination required by para7 graph (1), and the Council on Environmental Quality 

8 shall coordinate such implementation. At the time of 

9 the written determination required by paragraph (1), 

10 the Council on Environmental Quality shall notify 

11 Congress if the relevant Federal agencies lack author12 ity to carry out any aspect of the recommended ap13 proach. 

14 (3) ALTERNATIVE APPROACH.—If the Council on 

15 Environmental Quality determines that the rec16 ommended approach to marine spatial planning 

17 should not be implemented, the Council on Environ18 mental Quality shall formulate an alternative ap19 proach and submit such alternative approach to the 

20 relevant Federal agencies and Congress at the time of 

21 the written determination required by paragraph (1). 

22 (d) RELATIONSHIP TO EXISTING LAW.—Nothing in 

23 this section shall affect or be construed to affect any law, 

24 regulation, or memoranda of understanding governing the 

25 development of offshore renewable energy facilities in effect 

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1 prior to the implementation of the recommended or alter2 native approach pursuant to subsection (c). 

3 (e) AUTHORIZATION.—There are authorized to be ap4 propriated such sums as may be necessary to carry out this 

5 section. 

6 SEC. 192. CLEAN TECHNOLOGY BUSINESS COMPETITION 

7 GRANT PROGRAM. 

8 (a) IN GENERAL.—The Secretary of Energy is author9 ized to provide grants to organizations to conduct business 

10 competitions that provide incentives, training, and 

11 mentorship to entrepreneurs and early stage start-up com12 panies throughout the United States to meet high priority 

13 economic, environmental, and energy security goals in 

14 areas to include energy efficiency, renewable energy, air 

15 quality, water quality and conservation, transportation, 

16 smart grid, green building, and waste management. Such 

17 competitions shall have the purpose of accelerating the de18 velopment and deployment of clean technology businesses 

19 and green jobs; stimulating green economic development; 

20 providing business training and mentoring to early stage 

21 clean technology companies; and strengthening the competi22 tiveness of United States clean technology industry in world 

23 trade markets. Priority shall be given to business competi24 tions that are private sector led, encourage regional and 

25 interregional cooperation, and can demonstrate marketmstockstill on PROD1PC66 with BILLS

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1 driven practices and show the creation of cost-effective green 

2 jobs through an annual publication of competition activities 

3 and directory of companies. 

4 (b) ELIGIBILITY.—An organization eligible for a grant 

5 under subsection (a) is— 

6 (1) any organization described in section 

7 501(c)(3) of the Internal Revenue Code of 1986 and 

8 exempt from tax under section 501(a) of such Code; 

9 and 

10 (2) any sponsored entity of an organization de11 scribed in paragraph (1) that is operated as a non12 profit entity. 

13 (c) PRIORITY.—In making grants under this section, 

14 the Secretary shall give priority to those organizations that 

15 can demonstrate broad funding support from private and 

16 other non-Federal funding sources to leverage Federal in17 vestment. 

18 (d) AUTHORIZATION OF APPROPRIATIONS.—For the 

19 purpose of carrying out this section, there are authorized 

20 to be appropriated $20,000,000. 

21 SEC. 193. NATIONAL BIOENERGY PARTNERSHIP. 

22 (a) IN GENERAL.—The Secretary of Energy shall es23 tablish a National Bioenergy Partnership to provide coordi24 nation among programs of State governments, the Federal 

25 Government, and the private sector that support the institumstockstill on PROD1PC66 with BILLS

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1 tional and physical infrastructure necessary to promote the 

2 deployment of sustainable biomass fuels and bioenergy tech3 nologies for the United States. 

4 (b) PROGRAM.—The National Bioenergy Partnership 

5 shall consist of five regions, to be administered by the 

6 CONEG Policy Research Center, the Council of Great Lakes 

7 Governors, the Southern States Energy Board, the Western 

8 Governors Association, and the Pacific Regional Biomass 

9 Energy Partnership led by the Washington State Univer10 sity Energy Program. 

11 (c) AUTHORIZATION OF APPROPRIATIONS.—There are 

12 authorized to be appropriated for each of fiscal years 2010 

13 through 2014 to carry out this section— 

14 (1) $5,000,000, to be allocated among the 5 re15 gions described in subsection (b) on the basis of the 

16 number of States in each region, for distribution 

17 among the member States of that region based on pro18 cedures developed by the member States of the region; 

19 and 

20 (2) $2,500,000, to be allocated equally among the 

21 5 regions described in subsection (b) for region-wide 

22 activities, including technical assistance and regional 

23 studies and coordination. 

24 SEC. 194. OFFICE OF CONSUMER ADVOCACY. 

25 (a) OFFICE.— 

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1 (1) ESTABLISHMENT.—There is an Office of 

2 Consumer Advocacy established within the Commis3 sion to serve as an advocate for the public interest. 

4 (2) DIRECTOR.—The Office shall be headed by a 

5 Director to be appointed by the President, who is ad6 mitted to the Federal Bar, with experience in public 

7 utility proceedings, and by and with the advice and 

8 consent of the Senate. 

9 (3) DUTIES.—The Office may— 

10 (A) represent, and appeal on behalf of, en11 ergy customers on matters concerning rates or 

12 service of public utilities and natural gas compa13 nies under the jurisdiction of the Commission— 

14 (i) at hearings of the Commission; 

15 (ii) in judicial proceedings in the 

16 courts of the United States; and 

17 (iii) at hearings or proceedings of other 

18 Federal regulatory agencies and commis19 sions; 

20 (B) monitor and review energy customer 

21 complaints and grievances on matters concerning 

22 rates or service of public utilities and natural 

23 gas companies under the jurisdiction of the Com24 mission; 

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1 (C) investigate independently, or within the 

2 context of formal proceedings, the services pro3 vided by, the rates charged by, and the valuation 

4 of the properties of, public utilities and natural 

5 gas companies under the jurisdiction of the Com6 mission; 

7 (D) develop means, such as public dissemi8 nation of information, consultative services, and 

9 technical assistance, to ensure, to the maximum 

10 extent practicable, that the interests of energy 

11 consumers are adequately represented in the 

12 course of any hearing or proceeding described in 

13 subparagraph (A); 

14 (E) collect data concerning rates or service 

15 of public utilities and natural gas companies 

16 under the jurisdiction of the Commission; and 

17 (F) prepare and issue reports and rec18 ommendations. 

19 (4) COMPENSATION AND POWERS.—The Director 

20 may— 

21 (A) employ and fix the compensation of 

22 such staff personnel as is deemed necessary; and 

23 (B) procure temporary and intermittent 

24 services as needed. 

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1 (5) ACCESS TO INFORMATION.—Each depart2 ment, agency, and instrumentality of the Federal 

3 Government is authorized and directed to furnish to 

4 the Director such reports and other information as he 

5 deems necessary to carry out his functions under this 

6 section. 

7 (b) CONSUMER ADVOCACY ADVISORY COMMITTEE.— 

8 (1) ESTABLISHMENT.—The Director shall estab9 lish an advisory committee to be known as Consumer 

10 Advocacy Advisory Committee (in this section re11 ferred to as the ‘‘Advisory Committee’’) to review 

12 rates, services, and disputes and to make rec13 ommendations to the Director. 

14 (2) COMPOSITION.—The Director shall appoint 5 

15 members to the Advisory Committee including— 

16 (A) 2 individuals representing State Utility 

17 Consumer Advocates; and 

18 (B) 1 individual, from a nongovernmental 

19 organization, representing consumers. 

20 (3) MEETINGS.—The Advisory Committee shall 

21 meet at such frequency as may be required to carry 

22 out its duties. 

23 (4) REPORTS.—The Director shall provide for 

24 publication of recommendations of the Advisory Com25 mittee on the public website established for the Office. 

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1 (5) DURATION.—Notwithstanding any other pro2 vision of law, the Advisory Committee shall continue 

3 in operation during the period in which the Office ex4 ists. 

5 (6) APPLICATION OF FACA.—Except as otherwise 

6 specifically provided, the Advisory Committee shall be 

7 subject to the Federal Advisory Committee Act. 

8 (c) DEFINITIONS.— 

9 (1) COMMISSION.—The term ‘‘Commission’’ 

10 means the Federal Energy Regulatory Commission. 

11 (2) ENERGY CUSTOMER.—The term ‘‘energy cus12 tomer’’ means a residential customer or a small com13 mercial customer that receives products or services 

14 from a public utility or natural gas company under 

15 the jurisdiction of the Commission. 

16 (3) NATURAL GAS COMPANY.—The term ‘‘natural 

17 gas company’’ has the meaning given the term in sec18 tion 2 of the Natural Gas Act (15 U.S.C. 717a), as 

19 modified by section 601(a) of the Natural Gas Policy 

20 Act of 1978 (15 U.S.C. 3431(a)). 

21 (4) OFFICE.—The term ‘‘Office’’ means the Office 

22 of Consumer Advocacy established by subsection 

23 (a)(1). 

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1 (5) PUBLIC UTILITY.—The term ‘‘public utility’’ 

2 has the meaning given the term in section 201(e) of 

3 the Federal Power Act (16 U.S.C. 824(e)). 

4 (6) SMALL COMMERCIAL CUSTOMER.—The term 

5 ‘‘small commercial customer’’ means a commercial 

6 customer that has a peak demand of not more than 

7 1,000 kilowatts per hour. 

8 (d) AUTHORIZATION OF APPROPRIATIONS.—There are 

9 authorized such sums as necessary to carry out this section. 

10 (e) SAVINGS CLAUSE.—Nothing in this section affects 

11 the rights or obligations of State Utility Consumer Advo12 cates. 

13 TITLE II—ENERGY EFFICIENCY 

14 Subtitle A—Building Energy 

15 Efficiency Programs 

16 SEC. 201. GREATER ENERGY EFFICIENCY IN BUILDING 

17 CODES. 

18 Section 304 of the Energy Conservation and Produc19 tion Act (42 U.S.C. 6833) is amended to read as follows: 

20 ‘‘SEC. 304. GREATER ENERGY EFFICIENCY IN BUILDING 

21 CODES. 

22 ‘‘(a) ENERGY EFFICIENCY TARGETS.— 

23 ‘‘(1) IN GENERAL.—Except as provided in para24 graph (2) or (3), the national building code energy ef25 ficiency target for the national average percentage 

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1 improvement of a building’s energy performance when 

2 built to a code meeting the target shall be— 

3 ‘‘(A) effective on the date of enactment of 

4 the American Clean Energy and Security Act of 

5 2009, 30 percent reduction in energy use relative 

6 to a comparable building constructed in compli7 ance with the baseline code; 

8 ‘‘(B) effective January 1, 2014, for residen9 tial buildings, and January 1, 2015, for com10 mercial buildings, 50 percent reduction in en11 ergy use relative to the baseline code; and 

12 ‘‘(C) effective January 1, 2017, for residen13 tial buildings, and January 1, 2018, for com14 mercial buildings, and every 3 years thereafter, 

15 respectively, through January 1, 2029, and Jan16 uary 1, 2030, 5 percent additional reduction in 

17 energy use relative to the baseline code. 

18 ‘‘(2) CONSENSUS-BASED CODES.—If on any effec19 tive date specified in paragraph (1)(A), (B), or (C) 

20 a successor code to the baseline codes provides for 

21 greater reduction in energy use than is required 

22 under paragraph (1), the overall percentage reduction 

23 in energy use provided by that successor code shall be 

24 the national building code energy efficiency target. 

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1 ‘‘(3) TARGETS ESTABLISHED BY SECRETARY.— 

2 The Secretary may by rule establish a national build3 ing code energy efficiency target for residential or 

4 commercial buildings achieving greater reductions in 

5 energy use than the targets prescribed in paragraph 

6 (1) or (2) if the Secretary determines that such great7 er reductions in energy use can be achieved with a 

8 code that is life cycle cost-justified and technically 

9 feasible. The Secretary may by rule establish a na10 tional building code energy efficiency target for resi11 dential or commercial buildings achieving a reduction 

12 in energy use that is greater than zero but less than 

13 the targets prescribed in paragraph (1) or (2) if the 

14 Secretary determines that such lesser target is the 

15 maximum reduction in energy use that can be 

16 achieved through a code that is life cycle cost-justified 

17 and technically feasible. 

18 ‘‘(4) ADDITIONAL REDUCTIONS IN ENERGY

19 USE.—Effective on January 1, 2033, and once every 

20 3 years thereafter, the Secretary shall determine, after 

21 notice and opportunity for comment, whether further 

22 energy efficiency building code improvements for resi23 dential or commercial buildings, respectively, are life 

24 cycle cost-justified and technically feasible, and shall 

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1 establish updated national building code energy effi2 ciency targets that meet such criteria. 

3 ‘‘(5) ZERO-NET-ENERGY BUILDINGS.—In setting 

4 targets under this subsection, the Secretary shall con5 sider ways to support the deployment of distributed 

6 renewable energy technology, and shall seek to achieve 

7 the goal of zero-net-energy commercial buildings es8 tablished in section 422 of the Energy Independence 

9 and Security Act of 2007 (42 U.S.C. 17082). 

10 ‘‘(6) BASELINE CODE.—For purposes of this sec11 tion, the term ‘baseline code’ means— 

12 ‘‘(A) for residential buildings, the 2006 

13 International Energy Conservation Code (IECC) 

14 published by the International Code Council; 

15 and 

16 ‘‘(B) for commercial buildings, the code 

17 published in ASHRAE Standard 90.1-2004. 

18 ‘‘(7) CONSULTATION.—In establishing the targets 

19 required by this section, the Secretary shall consult 

20 with the Director of the National Institute of Stand21 ards and Technology. 

22 ‘‘(b) NATIONAL ENERGY EFFICIENCY BUILDING

23 CODES.— 

24 ‘‘(1) REQUIREMENT.— 

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1 ‘‘(A) IN GENERAL.—There shall be estab2 lished national energy efficiency building codes 

3 under this subsection, for residential and com4 mercial buildings, sufficient to meet each of the 

5 national building code energy efficiency targets 

6 established under subsection (a), not later than 

7 the date that is one year after the deadline for 

8 establishment of each such target. 

9 ‘‘(B) EXISTING CODE.—If the Secretary 

10 finds prior to the date one year after the dead11 line for establishing a target that one or more 

12 energy efficiency building codes published by a 

13 recognized consensus-based code development or14 ganization meet or exceed the established target, 

15 the Secretary shall select the code that meets the 

16 target with the highest efficiency in the most 

17 cost-effective manner, and such code shall be the 

18 national energy efficiency building code. 

19 ‘‘(C) REQUIREMENT TO ESTABLISH CODE.— 

20 If the Secretary does not make a finding under 

21 subparagraph (B), the national energy efficiency 

22 building code shall be established by rule by the 

23 Secretary under paragraph (2). 

24 ‘‘(2) ESTABLISHMENT BY SECRETARY.— 

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1 ‘‘(A) PROCEDURE.—In order to establish a 

2 national energy efficiency building code as re3 quired under paragraph (1)(C), the Secretary 

4 shall— 

5 ‘‘(i) not later than six months prior to 

6 the effective date for each target, review ex7 isting and proposed codes published or 

8 under review by recognized consensus-based 

9 code development organizations; 

10 ‘‘(ii) determine the percentage of en11 ergy efficiency improvements that are or 

12 would be achieved in such published or pro13 posed code versions relative to the target; 

14 ‘‘(iii) propose improvements to such 

15 published or proposed code versions suffi16 cient to meet or exceed the target; and 

17 ‘‘(iv) unless a finding is made under 

18 paragraph (1)(B) with respect to a code 

19 published by a recognized consensus-based 

20 code development organization, adopt a code 

21 that meets or exceeds the relevant national 

22 building code energy efficiency target by not 

23 later than one year after the effective date 

24 of such target. 

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1 ‘‘(B) CALCULATIONS.—Each code estab2 lished by the Secretary under this paragraph 

3 shall be set at the maximum level the Secretary 

4 determines is life cycle cost-justified and tech5 nically feasible, in accordance with the following: 

6 ‘‘(i) SAVINGS CALCULATIONS.—Cal7 culations of energy savings shall take into 

8 account the typical lifetimes of different 

9 products, measures, and system configura10 tions. 

11 ‘‘(ii) COST-EFFECTIVENESS CALCULA12 TIONS.—Calculations of life cycle cost-effec13 tiveness shall be based on life cycle cost 

14 methods and procedures under section 544 

15 of the National Energy Conservation Policy 

16 Act (42 U.S.C. 8254), but shall incorporate 

17 to the extent feasible externalities such as 

18 impacts on climate change and on peak en19 ergy demand that are not already incor20 porated in assumed energy costs. 

21 ‘‘(C) CONSIDERATIONS.—In developing a 

22 national energy efficiency building code under 

23 this paragraph, the Secretary shall consider— 

24 ‘‘(i) for residential codes— 

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1 ‘‘(I) residential building stand2 ards published or proposed by 

3 ASHRAE; 

4 ‘‘(II) residential building codes 

5 published or proposed in the Inter6 national Energy Conservation Code 

7 (IECC); 

8 ‘‘(III) data from the Residential 

9 Energy Services Network (RESNET) 

10 on compliance measures utilized by 

11 consumers to qualify for the residential 

12 energy efficiency tax credits established 

13 under the Energy Policy Act of 2005; 

14 ‘‘(IV) data and information from 

15 the Department of Energy’s Building 

16 America Program; 

17 ‘‘(V) data and information from 

18 the Energy Star New Homes program; 

19 ‘‘(VI) data and information from 

20 the New Building Institute and simi21 lar organizations; and 

22 ‘‘(VII) standards for practices and 

23 materials to achieve cool roofs in resi24 dential buildings, taking into consider25 ation reduced air conditioning energy 

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1 use as a function of cool roofs, the po2 tential reduction in global warming 

3 from increased solar reflectance from 

4 buildings, and cool roofs criteria in 

5 State and local building codes and in 

6 national and local voluntary pro7 grams; and 

8 ‘‘(ii) for commercial codes— 

9 ‘‘(I) commercial building stand10 ards proposed by ASHRAE; 

11 ‘‘(II) commercial building codes 

12 proposed in the International Energy 

13 Conservation Code (IECC); 

14 ‘‘(III) the Core Performance Cri15 teria published by the New Buildings 

16 Institute; 

17 ‘‘(IV) data and information devel18 oped by the Director of the Commercial 

19 High-Performance Green Building Of20 fice of the Department of Energy and 

21 any public-private partnerships estab22 lished under that Office; 

23 ‘‘(V) data and information from 

24 the Energy Star for Buildings pro25 gram; 

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1 ‘‘(VI) data and information from 

2 the New Building Institute, RESNET, 

3 and similar organizations; and 

4 ‘‘(VII) standards for practices and 

5 materials to achieve cool roofs in com6 mercial buildings, taking into consid7 eration reduced air conditioning en8 ergy use as a function of cool roofs, the 

9 potential reduction in global warming 

10 from increased solar reflectance from 

11 buildings, and cool roofs criteria in 

12 State and local building codes and in 

13 national and local voluntary pro14 grams. 

15 ‘‘(D) CONSULTATION.—In establishing any 

16 national energy efficiency building code required 

17 by this section, the Secretary shall consult with 

18 the Director of the National Institute of Stand19 ards and Technology. 

20 ‘‘(3) CONSENSUS STANDARD ASSISTANCE.—(A) 

21 To support the development of consensus standards 

22 that may provide the basis for national energy effi23 ciency building codes, minimize duplication of effort, 

24 encourage progress through consensus, and facilitate 

25 the development of greater building efficiency, the Secmstockstill on PROD1PC66 with BILLS

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1 retary shall provide assistance to recognized con2 sensus-based code development organizations to de3 velop, and where the relevant code has been adopted 

4 as the national code, disseminate consensus based en5 ergy efficiency building codes as provided in this 

6 paragraph. 

7 ‘‘(B) Upon a finding by the Secretary that a 

8 code developed by such an organization meets a target 

9 established under subsection (a), the Secretary shall— 

10 ‘‘(i) send notice of the Secretary’s finding to 

11 all duly authorized or appointed State and local 

12 code agencies; and 

13 ‘‘(ii) provide sufficient support to such an 

14 organization to make the code available on the 

15 Internet, or to accomplish distribution of such 

16 code to all such State and local code agencies at 

17 no cost to the State and local code agencies. 

18 ‘‘(C) The Secretary may contract with such an 

19 organization and with other organizations with ex20 pertise on codes to provide training for State and 

21 local code officials and building inspectors in the im22 plementation and enforcement of such code. 

23 ‘‘(D) The Secretary may provide grants and 

24 other support to such an organization to— 

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1 ‘‘(i) develop appropriate refinements to such 

2 code; and 

3 ‘‘(ii) support analysis of options for im4 provements in the code to meet the next scheduled 

5 target. 

6 ‘‘(4) CODE DEVELOPED BY SECRETARY.—If the 

7 Secretary establishes a national energy efficiency 

8 building code under paragraph (2), the Secretary 

9 shall— 

10 ‘‘(A) to the extent that such code is based on 

11 a prior code developed by a recognized consensus12 based code development organization, negotiate 

13 and provide appropriate compensation to such 

14 organization for the use of the code materials 

15 that remain in the code established by the Sec16 retary; and 

17 ‘‘(B) disseminate the national energy effi18 ciency building codes to State and local code offi19 cials, and support training and provide guid20 ance and technical assistance to such officials as 

21 appropriate. 

22 ‘‘(c) STATE ADOPTION OF ENERGY EFFICIENCY

23 BUILDING CODES.— 

24 ‘‘(1) REQUIREMENT.—Not later than 1 year 

25 after a national energy efficiency building code for 

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1 residential or commercial buildings is established or 

2 revised under subsection (b), each State— 

3 ‘‘(A) shall— 

4 ‘‘(i) review and update the provisions 

5 of its building code regarding energy effi6 ciency to meet or exceed the target met in 

7 the new national code, to achieve equivalent 

8 or greater energy savings; 

9 ‘‘(ii) document, where local govern10 ments establish building codes, that local 

11 governments representing not less than 80 

12 percent of the State’s urban population have 

13 adopted the new national code, or have 

14 adopted local codes that meet or exceed the 

15 target met in the new national code to 

16 achieve equivalent or greater energy sav17 ings; or 

18 ‘‘(iii) adopt the new national code; and 

19 ‘‘(B) shall provide a certification to the Sec20 retary demonstrating that energy efficiency 

21 building code provisions that apply throughout 

22 the State meet or exceed the target met by the 

23 new national code, to achieve equivalent or 

24 greater energy savings. 

25 ‘‘(2) CONFIRMATION.— 

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1 ‘‘(A) REQUIREMENT.—Not later than 90 

2 days after a State certification is provided under 

3 paragraph (1)(B), the Secretary shall determine 

4 whether the State’s energy efficiency building 

5 code provisions meet the requirements of this 

6 subsection. 

7 ‘‘(B) ACCEPTANCE BY SECRETARY.—If the 

8 Secretary determines under subparagraph (A) 

9 that the State’s energy efficiency building code or 

10 codes meet the requirements of this subsection, 

11 the Secretary shall accept the certification. 

12 ‘‘(C) DEFICIENCY NOTICE.—If the Secretary 

13 determines under subparagraph (A) that the 

14 State’s building code or codes do not meet the re15 quirements of this subsection, the Secretary shall 

16 identify the deficiency in meeting the national 

17 building code energy efficiency target, and, to the 

18 extent possible, indicate areas where further im19 provement in the State’s code provisions would 

20 allow the deficiency to be eliminated. 

21 ‘‘(D) REVISION OF CODE AND RECERTIFI22 CATION.—A State may revise its code or codes 

23 and submit a recertification under paragraph 

24 (1)(B) to the Secretary at any time. 

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1 ‘‘(3) COMPLIANT CODE.—For the purposes of 

2 meeting the target described in subsection (a)(1)(A) 

3 for residential buildings, a State that adopts the code 

4 represented in California’s Title 24-2009 by the date 

5 two years after the date of enactment of the American 

6 Clean Energy and Security Act of 2009 shall be con7 sidered to have met the requirements of this subsection 

8 for the applicable period. 

9 ‘‘(d) APPLICATION OF NATIONAL CODE TO STATE AND

10 LOCAL JURISDICTIONS.— 

11 ‘‘(1) IN GENERAL.—Upon the expiration of 1 

12 year after a national energy efficiency building code 

13 is established under subsection (b), in any jurisdic14 tion where the State has not had a certification relat15 ing to that code accepted by the Secretary under sub16 section (c)(2)(B), and the local government has not 

17 had a certification relating to that code accepted by 

18 the Secretary under subsection (e)(6)(B), the national 

19 code shall become the applicable energy efficiency 

20 building code for such jurisdiction. 

21 ‘‘(2) STATE LEGISLATIVE ADOPTION.—In a State 

22 in which the relevant building energy code is adopted 

23 legislatively, the deadline in paragraph (1) shall not 

24 be earlier than 1 year after the first day that the legmstockstill on PROD1PC66 with BILLS

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1 islature meets following establishment of a national 

2 energy efficiency building code. 

3 ‘‘(3) VIOLATIONS.—Violations of this section 

4 shall be defined as follows: 

5 ‘‘(A) If the building is subject to the re6 quirements of a State energy efficiency building 

7 code with respect to which a certification has 

8 been accepted by the Secretary under subsection 

9 (c)(2)(B) or a local energy efficiency building 

10 code with respect to which a certification has 

11 been accepted by the Secretary pursuant to sub12 section (e)(6)(B), a violation shall be determined 

13 pursuant to the relevant provisions of the State 

14 or local code. 

15 ‘‘(B) If the building is subject to the re16 quirements of a national energy efficiency build17 ing code adopted under subsection (c)(1)(A)(i) or 

18 made applicable under paragraph (1) of this 

19 subsection, a violation shall be defined by the 

20 Secretary pursuant to subsection (g). 

21 ‘‘(e) STATE ENFORCEMENT OF ENERGY EFFICIENCY

22 BUILDING CODES.— 

23 ‘‘(1) IN GENERAL.—Each State, or where appli24 cable under State law each local government, shall 

25 implement and enforce applicable State or local codes 

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1 with respect to which a certification was accepted by 

2 the Secretary under subsection (c)(2)(B) or paragraph 

3 (6)(B) of this subsection, or the national energy effi4 ciency building codes, as provided in this subsection. 

5 ‘‘(2) STATE CERTIFICATION.—Not later than 2 

6 years after the date of a certification under subsection 

7 (c)(1) or the establishment of a national energy effi8 ciency building code under subsection (b), each State 

9 shall certify that it has— 

10 ‘‘(A) achieved compliance with— 

11 ‘‘(i) State codes, or, as provided under 

12 State law, local codes, with respect to which 

13 a certification was accepted by the Sec14 retary under subsection (c)(2)(B); or 

15 ‘‘(ii) the national energy efficiency 

16 building code, as applicable; or 

17 ‘‘(B) for any certification submitted within 

18 7 years after the date of enactment of the Amer19 ican Clean Energy and Security Act of 2009, 

20 made significant progress toward achieving such 

21 compliance. 

22 ‘‘(3) ACHIEVING COMPLIANCE.—A State shall be 

23 considered to achieve compliance with a code de24 scribed in paragraph (2)(A) if at least 90 percent of 

25 new and substantially renovated building space in 

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1 that State in the preceding year upon inspection 

2 meets the requirements of the code. A certification 

3 under paragraph (2) shall include documentation of 

4 the rate of compliance based on— 

5 ‘‘(A) independent inspections of a random 

6 sample of the new and substantially renovated 

7 buildings covered by the code in the preceding 

8 year; or 

9 ‘‘(B) an alternative method that yields an 

10 accurate measure of compliance as determined 

11 by the Secretary. 

12 ‘‘(4) SIGNIFICANT PROGRESS.—A State shall be 

13 considered to have made significant progress toward 

14 achieving compliance with a code described in para15 graph (2)(A) if— 

16 ‘‘(A) the State has developed a plan, includ17 ing for hiring enforcement staff, providing train18 ing, providing manuals and checklists, and in19 stituting enforcement programs, designed to 

20 achieve full compliance within 5 years after the 

21 date of the adoption of the code; 

22 ‘‘(B) the State is taking significant, timely, 

23 and measurable action to implement that plan; 

24 ‘‘(C) the State has not reduced its expendi25 tures for code enforcement; and 

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1 ‘‘(D) at least 50 percent of new and sub2 stantially renovated building space in the State 

3 in the preceding year upon inspection meets the 

4 requirements of the code. 

5 ‘‘(5) SECRETARY’S DETERMINATION.—Not later 

6 than 90 days after a State certification under para7 graph (2), the Secretary shall determine whether the 

8 State has demonstrated that it has complied with the 

9 requirements of this subsection, including accurate 

10 measurement of compliance, or that it has made sig11 nificant progress toward compliance. If such deter12 mination is positive, the Secretary shall accept the 

13 certification. If the determination is negative, the Sec14 retary shall identify the areas of deficiency. 

15 ‘‘(6) OUT OF COMPLIANCE.— 

16 ‘‘(A) IN GENERAL.—Any State for which 

17 the Secretary has not accepted a certification 

18 under paragraph (5) by a deadline established 

19 under this subsection is out of compliance with 

20 this section. 

21 ‘‘(B) LOCAL COMPLIANCE.—In any State 

22 that is out of compliance with this section as 

23 provided in subparagraph (A), a local govern24 ment may be in compliance with this section by 

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1 meeting all certification requirements applicable 

2 to the State. 

3 ‘‘(C) NONCOMPLIANCE.—Any State that is 

4 not in compliance with this section, as provided 

5 in subparagraph (A), shall, until the State re6 gains such compliance, be ineligible to receive— 

7 ‘‘(i) emission allowances pursuant to 

8 subsection (h)(1); 

9 ‘‘(ii) Federal funding in excess of that 

10 State’s share (calculated according to the al11 location formula in section 363 of the En12 ergy Policy and Conservation Act (42 

13 U.S.C. 6323)) of $125,000,000 each year; 

14 and 

15 ‘‘(iii) for— 

16 ‘‘(I) the first year for which the 

17 State is out of compliance, 25 percent 

18 of any additional funding or other 

19 items of monetary value otherwise pro20 vided under the American Clean En21 ergy and Security Act of 2009; 

22 ‘‘(II) the second year for which 

23 the State is out of compliance, 50 per24 cent of any additional funding or other 

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1 vided under the American Clean En2 ergy and Security Act of 2009; 

3 ‘‘(III) the third year for which the 

4 State is out of compliance, 75 percent 

5 of any additional funding or other 

6 items of monetary value otherwise pro7 vided under the American Clean En8 ergy and Security Act of 2009; and 

9 ‘‘(IV) the fourth and subsequent 

10 years for which the State is out of com11 pliance, 100 percent of any additional 

12 funding or other items of monetary 

13 value otherwise provided under the 

14 American Clean Energy and Security 

15 Act of 2009. 

16 ‘‘(f) FEDERAL ENFORCEMENT.—Where a State fails 

17 and local governments in that State also fail to enforce the 

18 applicable State or national energy efficiency building 

19 codes, the Secretary shall enforce such codes, as follows: 

20 ‘‘(1) The Secretary shall establish, by rule, with21 in 2 years after the date of enactment of the Amer22 ican Clean Energy and Security Act of 2009, an en23 ergy efficiency building code enforcement capability. 

24 ‘‘(2) Such enforcement capability shall be de25 signed to achieve 90 percent compliance with such 

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1 code in any State within 1 year after the date of the 

2 Secretary’s determination that such State is out of 

3 compliance with this section. 

4 ‘‘(3) The Secretary may set and collect reason5 able inspection fees to cover the costs of inspections re6 quired for such enforcement. Revenue from fees col7 lected shall be available to the Secretary to carry out 

8 the requirements of this section upon appropriation. 

9 ‘‘(g) ENFORCEMENT PROCEDURES.—The Secretary 

10 shall propose and, not later than three years after the date 

11 of enactment of the American Clean Energy and Security 

12 Act of 2009, shall determine and adopt by rule what shall 

13 constitute violations of the energy efficiency building codes 

14 to be enforced pursuant to this section, and the penalties 

15 that shall apply to violators. To the extent that the Sec16 retary determines that the authority to adopt and impose 

17 such violations and penalties by rule requires further statu18 tory authority, the Secretary shall report such determina19 tion to Congress as soon as such determination is made, 

20 but not later than one year after the enactment of the Amer21 ican Clean Energy and Security Act of 2009. 

22 ‘‘(h) FEDERAL SUPPORT.— 

23 ‘‘(1) ALLOWANCE ALLOCATION FOR STATE COM24 PLIANCE.—For each vintage year from 2012 through 

25 2050, the Administrator shall distribute allowances 

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1 allocated pursuant to section 782(g)(2) of the Clean 

2 Air Act to the SEED Account for each State that the 

3 Secretary identifies as a State from which he has ac4 cepted the State’s certification under subsection (e)(5) 

5 for compliance with the then current national energy 

6 efficiency building codes. Such allowances shall be 

7 distributed according to a formula established by the 

8 Secretary as follows: 

9 ‘‘(A) One-fifth in an equal amount to each 

10 of the 50 States and United States territories. 

11 ‘‘(B) Two-fifths as a function of the relative 

12 energy use in all buildings in each State in the 

13 most recent year for which data is available. 

14 ‘‘(C) Two-fifths based on the number of 

15 building construction starts recorded in each 

16 State, the number of new building permits ap17 plied for in each State, or other relevant avail18 able data indicating building activity in each 

19 State, in the judgment of the Secretary, for the 

20 year prior to the year of the distribution. 

21 ‘‘(2) ALLOWANCE ALLOCATION TO LOCAL GOV22 ERNMENTS.—In the instance that the Secretary cer23 tifies that one or more local governments are in com24 pliance with this section pursuant to subsection 

25 (e)(6)(B), the Administrator shall provide to each 

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1 such local government the portion of the emission al2 lowances that would have been provided to that State 

3 as a function of the population of that locality as a 

4 proportion of the population of that State as a whole. 

5 ‘‘(3) UNALLOCATED ALLOWANCES.—To the extent 

6 that allowances are not provided to State or local gov7 ernments for lack of certification in any year, those 

8 allowances shall be added to the amount provided to 

9 those States and local governments that are certified 

10 as eligible in that year. 

11 ‘‘(4) USE OF ALLOWANCES.—Each State or each 

12 local government shall use such emission allowances 

13 as it receives pursuant to this section exclusively for 

14 the purposes of this section, including covering a rea15 sonable portion of the costs of the development, adop16 tion, implementation, and enforcement of a State or 

17 local energy efficiency building code with respect to 

18 which a certification is accepted by the Secretary 

19 under subsection (c)(2)(B) or subsection (e)(6)(B), or 

20 the national energy efficiency building code. In a 

21 State where local governments provide building code 

22 enforcement, a minimum of 50 percent of the allow23 ance value received pursuant to this section shall be 

24 distributed to local governments as a function of the 

25 relative populations of such localities. 

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1 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There are 

2 authorized to be appropriated to the Secretary of Energy 

3 $100,000,000 for each of fiscal years 2010 through 2020 and 

4 such sums thereafter as may be necessary to support the 

5 purposes of this section. 

6 ‘‘(j) ANNUAL REPORTS BY SECRETARY.—The Sec7 retary shall annually submit to Congress, and publish in 

8 the Federal Register, a report on— 

9 ‘‘(1) the status of national building energy effi10 ciency codes; 

11 ‘‘(2) the status of energy efficiency building code 

12 adoption and compliance in the States; 

13 ‘‘(3) the implementation of this section; and 

14 ‘‘(4) impacts of past action under this section, 

15 and potential impacts of further action, on lifetime 

16 energy use by buildings, including resulting energy 

17 and cost savings.’’. 

18 SEC. 202. BUILDING RETROFIT PROGRAM. 

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

20 (1) NONRESIDENTIAL BUILDING.—The term 

21 ‘‘nonresidential building’’ means a building with a 

22 primary use or purpose other than residential hous23 ing, including commercial offices, schools, academic 

24 and other public and private institutions, nonprofit 

25 organizations, hospitals, hotels, and houses of wormstockstill on PROD1PC66 with BILLS

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1 ship. Such buildings shall include mixed-use prop2 erties used for both residential and nonresidential 

3 purposes in which more than half of building floor 

4 space is nonresidential. 

5 (2) PERFORMANCE-BASED BUILDING RETROFIT

6 PROGRAM.—The term ‘‘performance-based building 

7 retrofit program’’ means a program that determines 

8 building energy efficiency success based on actual 

9 measured savings after a retrofit is complete, as evi10 denced by energy invoices or evaluation protocols. 

11 (3) PRESCRIPTIVE BUILDING RETROFIT PRO12 GRAM.—The term ‘‘prescriptive building retrofit pro13 gram’’ means a program that projects building ret14 rofit energy efficiency success based on the known ef15 fectiveness of measures prescribed to be included in a 

16 retrofit. 

17 (4) RECOMMISSIONING; RETROCOMMISSIONING.— 

18 The terms ‘‘recommissioning’’ and 

19 ‘‘retrocommissioning’’ have the meaning given those 

20 terms in section 543(f)(1) of the National Energy 

21 Conservation Policy Act (42 U.S.C. 8253(f)(1)). 

22 (5) RESIDENTIAL BUILDING.—The term ‘‘resi23 dential building’’ means a building whose primary 

24 use is residential. Such buildings shall include single25 family homes (both attached and detached), owner-ocmstockstill on PROD1PC66 with BILLS

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1 cupied units in larger buildings with their own dedi2 cated space-conditioning systems, and buildings used 

3 for both residential and nonresidential purposes in 

4 which more than half of building floor space is resi5 dential. 

6 (6) STATE ENERGY PROGRAM.—The term ‘‘State 

7 Energy Program’’ means the program under part D 

8 of title III of the Energy Policy and Conservation Act 

9 (42 U.S.C. 6321 et seq.). 

10 (b) ESTABLISHMENT.—The Administrator shall de11 velop and implement, in consultation with the Secretary 

12 of Energy, standards for a national energy and environ13 mental building retrofit policy for single-family and multi14 family residences. The Administrator shall develop and im15 plement, in consultation with the Secretary of Energy and 

16 the Director of Commercial High-Performance Green Build17 ings, standards for a national energy and environmental 

18 building retrofit policy for nonresidential buildings. The 

19 programs to implement the residential and nonresidential 

20 policies based on the standards developed under this section 

21 shall together be known as the Retrofit for Energy and En22 vironmental Performance (REEP) program. 

23 (c) PURPOSE.—The purpose of the REEP program is 

24 to facilitate the retrofitting of existing buildings across the 

25 United States to achieve maximum cost-effective energy effimstockstill on PROD1PC66 with BILLS

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1 ciency improvements and significant improvements in 

2 water use and other environmental attributes. 

3 (d) FEDERAL ADMINISTRATION.— 

4 (1) EXISTING PROGRAMS.— In creating and op5 erating the REEP program— 

6 (A) the Administrator shall make appro7 priate use of existing programs, including the 

8 Energy Star program and in particular the En9 vironmental Protection Agency Energy Star for 

10 Buildings program; and 

11 (B) the Secretary of Energy shall make ap12 propriate use of existing programs, including 

13 delegating authority to the Director of Commer14 cial High-Performance Green Buildings ap15 pointed under section 421 of the Energy Inde16 pendence and Security Act of 2007 (42 U.S.C. 

17 17081), who shall designate and provide funding 

18 to support a high-performance green building 

19 partnership consortium pursuant to subsection 

20 (f) of such section to support efforts under this 

21 section. 

22 (2) CONSULTATION AND COORDINATION.—The 

23 Administrator and the Secretary of Energy shall con24 sult with and coordinate with the Secretary of Housmstockstill on PROD1PC66 with BILLS

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1 ing and Urban Development in carrying out the 

2 REEP program. 

3 (3) ASSISTANCE.—The Administrator and the 

4 Secretary of Energy shall provide consultation and 

5 assistance to State and local agencies for the estab6 lishment of revolving loan funds, loan guarantees, or 

7 other forms of financial assistance under this section. 

8 (e) STATE AND LOCAL ADMINISTRATION.— 

9 (1) DESIGNATION AND DELEGATION.—A State 

10 may designate one or more agencies or entities, in11 cluding those regulated by the State, to carry out the 

12 purposes of this section, but shall designate one entity 

13 or individual as the principal point of contact for the 

14 Administrator regarding the REEP Program. The 

15 designated State agency, agencies, or entities may del16 egate performance of appropriate elements of the 

17 REEP program, upon their request and subject to 

18 State law, to counties, municipalities, appropriate 

19 public agencies, and other divisions of local govern20 ment, as well as to entities regulated by the State. In 

21 making any such designation or delegation, a State 

22 shall give priority to entities that administer existing 

23 comprehensive retrofit programs, including those 

24 under the supervision of State utility regulators. 

25 States shall maintain responsibility for meeting the 

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1 standards and requirements of the REEP program. 

2 In any State that elects not to administer the REEP 

3 program, a unit of local government may propose to 

4 do so within its jurisdiction, and if the Administrator 

5 finds that such local government is capable of admin6 istering the program, the Administrator may provide 

7 allowances to that local government, prorated accord8 ing to the population of the local jurisdiction relative 

9 to the population of the State, for purposes of the 

10 REEP program. 

11 (2) EMPLOYMENT.—States and local government 

12 entities may administer a REEP program in a man13 ner that authorizes public or regulated investor-owned 

14 utilities, building auditors and inspectors, contrac15 tors, nonprofit organizations, for-profit companies, 

16 and other entities to perform audits and retrofit serv17 ices under this section. A State may provide incen18 tives for retrofits without direct participation by the 

19 State or its agents, so long as the resulting savings 

20 are measured and verified. A State or local adminis21 trator of a REEP program shall seek to ensure that 

22 sufficient qualified entities are available to support 

23 retrofit activities so that building owners have a com24 petitive choice among qualified auditors, raters, con25 tractors, and providers of services related to retrofits. 

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1 Nothing in this section is intended to preclude or pre2 empt the right of a building owner to choose the spe3 cific providers of retrofit services to engage for a ret4 rofit project in that owner’s building. 

5 (3) EQUAL INCENTIVES FOR EQUAL IMPROVE6 MENT.—In general, the States should strive to offer 

7 the same levels of incentives for retrofits that meet the 

8 same efficiency improvement goals, regardless of 

9 whether the State, its agency or entity, or the build10 ing owner has conducted the retrofit achieving the im11 provement, provided the improvement is measured 

12 and verified. 

13 (f) ELEMENTS OF REEP PROGRAM.—The Adminis14 trator, in consultation with the Secretary of Energy, shall 

15 establish goals, guidelines, practices, and standards for ac16 complishing the purpose stated in subsection (c), and shall 

17 annually review and, as appropriate, revise such goals, 

18 guidelines, practices, and standards. The program under 

19 this section shall include the following: 

20 (1) Residential Energy Services Network 

21 (RESNET) or Building Performance Institute (BPI) 

22 analyst certification of residential building energy 

23 and environment auditors, inspectors, and raters, or 

24 an equivalent certification system as determined by 

25 the Administrator. 

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1 (2) BPI certification or licensing by States of 

2 residential building energy and environmental retrofit 

3 contractors, or an equivalent certification or licensing 

4 system as determined by the Administrator. 

5 (3) Provision of BPI, RESNET, or other appro6 priate information on equipment and procedures, as 

7 determined by the Administrator, that contractors can 

8 use to test the energy and environmental efficiency of 

9 buildings effectively (such as infrared photography 

10 and pressurized testing, and tests for water use and 

11 indoor air quality). 

12 (4) Provision of clear and effective materials to 

13 describe the testing and retrofit processes for typical 

14 buildings. 

15 (5) Guidelines for offering and managing pre16 scriptive building retrofit programs and performance17 based building retrofit programs for residential and 

18 nonresidential buildings. 

19 (6) Guidelines for applying recommissioning 

20 and retrocommissioning principles to improve a 

21 building’s operations and maintenance procedures. 

22 (7) A requirement that building retrofits con23 ducted pursuant to a REEP program utilize, espe24 cially in all air-conditioned buildings, roofing mate25 rials with high solar energy reflectance, unless inapmstockstill on PROD1PC66 with BILLS

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1 propriate due to green roof management, solar energy 

2 production, or for other reasons identified by the Ad3 ministrator, in order to reduce energy consumption 

4 within the building, increase the albedo of the build5 ing’s roof, and decrease the heat island effect in the 

6 area of the building. 

7 (8) Determination of energy savings in a per8 formance-based building retrofit program through— 

9 (A) for residential buildings, comparison of 

10 before and after retrofit scores on the Home En11 ergy Rating System (HERS) Index, where the 

12 final score is produced by an objective third 

13 party; 

14 (B) for nonresidential buildings, Environ15 mental Protection Agency Portfolio Manager 

16 benchmarks; or 

17 (C) for either residential or nonresidential 

18 buildings, use of an Administrator-approved 

19 simulation program by a contractor with the ap20 propriate certification, subject to appropriate 

21 software standards and verification of at least 15 

22 percent of all work done, or such other percent23 age as the Administrator may determine. 

24 (9) Guidelines for utilizing the Energy Star 

25 Portfolio Manager, the Home Energy Rating System 

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1 (HERS) rating system, Home Performance with En2 ergy Star program approvals, and any other tools as3 sociated with the retrofit program. 

4 (10) Requirements and guidelines for post-ret5 rofit inspection and confirmation of work and energy 

6 savings. 

7 (11) Detailed descriptions of funding options for 

8 the benefit of State and local governments, along with 

9 model forms, accounting aids, agreements, and guides 

10 to best practices. 

11 (12) Guidance on opportunities for— 

12 (A) rating or certifying retrofitted buildings 

13 as Energy Star buildings, or as green buildings 

14 under a recognized green building rating system; 

15 (B) assigning Home Energy Rating System 

16 (HERS) or similar ratings; and 

17 (C) completing any applicable building per18 formance labels. 

19 (13) Sample materials for publicizing the pro20 gram to building owners, including public service an21 nouncements and advertisements. 

22 (14) Processes for tracking the numbers and loca23 tions of buildings retrofitted under the REEP pro24 gram, with information on projected and actual sav25 ings of energy and its value over time. 

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1 (g) REQUIREMENTS.—As a condition of receiving al2 lowances for the REEP program pursuant to this Act, a 

3 State or qualifying local government shall— 

4 (1) adopt the standards for training, certifi5 cation of contractors, certification of buildings, and 

6 post-retrofit inspection as developed by the Adminis7 trator for residential and nonresidential buildings, re8 spectively, except as necessary to match local condi9 tions, needs, efficiency opportunities, or other local 

10 factors, or to accord with State laws or regulations, 

11 and then only after the Administrator approves such 

12 a variance; and 

13 (2) establish fiscal controls and accounting pro14 cedures (which conform to generally accepted govern15 ment accounting principles) sufficient to ensure prop16 er accounting during appropriate accounting periods 

17 for payments received and disbursements, and for 

18 fund balances. 

19 The Administrator shall conduct or require each State to 

20 have such independent financial audits of REEP-related 

21 funding as the Administrator considers necessary or appro22 priate to carry out the purposes of this section. 

23 (h) OPTIONS TO SUPPORT REEP PROGRAM.—The 

24 emission allowances provided pursuant to this Act to the 

25 States’ SEED Accounts shall support the implementation 

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1 through State REEP programs of alternate means of cre2 ating incentives for, or reducing financial barriers to, im3 proved energy and environmental performance in buildings, 

4 consistent with this section, including— 

5 (1) implementing prescriptive building retrofit 

6 programs and performance-based building retrofit 

7 programs; 

8 (2) providing credit enhancement, interest rate 

9 subsidies, loan guarantees, or other credit support; 

10 (3) providing initial capital for public revolving 

11 fund financing of retrofits, with repayments by bene12 ficiary building owners over time through their tax 

13 payments, calibrated to create net positive cash flow 

14 to the building owner; 

15 (4) providing funds to support utility-operated 

16 retrofit programs with repayments over time through 

17 utility rates, calibrated to create net positive cash 

18 flow to the building owner, and transferable from one 

19 building owner to the next with the building’s utility 

20 services; 

21 (5) providing funds to local government pro22 grams to provide REEP services and financial assist23 ance; and 

24 (6) other means proposed by State and local 

25 agencies, subject to the approval of the Administrator. 

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1 (i) SUPPORT FOR PROGRAM.— 

2 (1) USE OF ALLOWANCES.—Direct Federal sup3 port for the REEP program is provided through the 

4 emission allowances allocated to the States’ SEED 

5 Accounts pursuant to section 132 of this Act. To the 

6 extent that a State provides allowances to local gov7 ernments within the State to implement elements of 

8 the REEP Program, that shall be deemed a distribu9 tion of such allowances to units of local government 

10 pursuant to subsection (c)(1) of that section. 

11 (2) INITIAL AWARD LIMITS.—Except as provided 

12 in paragraph (3), State and local REEP programs 

13 may make per-building direct expenditures for ret14 rofit improvements, or their equivalent in indirect or 

15 other forms of financial support, from funds derived 

16 from the sale of allowances received directly from the 

17 Administrator in amounts not to exceed the following: 

18 (A) RESIDENTIAL BUILDING PROGRAM.— 

19 (i) AWARDS.—For residential build20 ings— 

21 (I) support for a free or low-cost 

22 detailed building energy audit that 

23 prescribes, as part of a energy-reducing 

24 measures sufficient to achieve at least a 

25 20 percent reduction in energy use, by 

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1 providing an incentive equal to the 

2 documented cost of such audit, but not 

3 more than $200, in addition to any 

4 earned by achieving a 20 percent or 

5 greater efficiency improvement; 

6 (II) a total of $1,000 for a com7 bination of measures, prescribed in an 

8 audit conducted under subclause (I), 

9 designed to reduce energy consumption 

10 by more than 10 percent, and $2,000 

11 for a combination of measures pre12 scribed in such an audit, designed to 

13 reduce energy consumption by more 

14 than 20 percent; 

15 (III) $3,000 for demonstrated sav16 ings of 20 percent, pursuant to a per17 formance-based building retrofit pro18 gram; and 

19 (IV) $1,000 for each additional 5 

20 percentage points of energy savings 

21 achieved beyond savings for which 

22 funding is provided under subclause 

23 (II) or (III). 

24 Funding shall not be provided under clauses 

25 (II) and (III) for the same energy savings. 

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1 (ii) MAXIMUM PERCENTAGE.—Awards 

2 under clause (i) shall not exceed 50 percent 

3 of retrofit costs for each building. For build4 ings with multiple residential units, awards 

5 under clause (i) shall not be greater than 50 

6 percent of the total cost of retrofitting the 

7 building, prorated among individual resi8 dential units on the basis of relative costs of 

9 the retrofit. 

10 (iii) ADDITIONAL AWARDS.—Addi11 tional awards may be provided for purposes 

12 of increasing energy efficiency, for buildings 

13 achieving at least 20 percent energy savings 

14 using funding provided under clause (i), in 

15 the form of grants of not more than $600 

16 for measures projected or measured (using 

17 an appropriate method approved by the Ad18 ministrator) to achieve at least 35 percent 

19 potable water savings through equipment or 

20 systems with an estimated service life of not 

21 less than seven years, and not more than an 

22 additional $20 may be provided for each 

23 additional one percent of such savings, up 

24 to a maximum total grant of $1,200. 

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1 (B) NONRESIDENTIAL BUILDING PRO2 GRAM.— 

3 (i) AWARDS.—For nonresidential 

4 buildings— 

5 (I) support for a free or low-cost 

6 detailed building energy audit that 

7 prescribes, as part of a energy-reducing 

8 measures sufficient to achieve at least a 

9 20 percent reduction in energy use, by 

10 providing an incentive equal to the 

11 documented cost of such audit, but not 

12 more than $500, in addition to any 

13 award earned by achieving a 20 per14 cent or greater efficiency improvement; 

15 (II) $0.15 per square foot of ret16 rofit area for demonstrated energy use 

17 reductions from 20 percent to 30 per18 cent; 

19 (III) $0.75 per square foot for 

20 demonstrated energy use reductions 

21 from 30 percent to 40 percent; 

22 (IV) $1.60 per square foot for 

23 demonstrated energy use reductions 

24 from 40 percent to 50 percent; and 

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1 (V) $2.50 per square foot for dem2 onstrated energy use reductions exceed3 ing 50 percent. 

4 (ii) MAXIMUM PERCENTAGE.— 

5 Amounts provided under subclauses (II) 

6 through (V) of clause (i) combined shall not 

7 exceed 50 percent of the total retrofit cost of 

8 a building. In nonresidential buildings with 

9 multiple units, such awards shall be pro10 rated among individual units on the basis 

11 of relative costs of the retrofit. 

12 (iii) ADDITIONAL AWARDS.—Addi13 tional awards may be provided, for build14 ings achieving at least 20 percent energy 

15 savings using funding provided under 

16 clause (i), as follows: 

17 (I) WATER.—For purposes of in18 creasing energy efficiency, grants may 

19 be made for whole building potable 

20 water use reduction (using an appro21 priate method approved by the Sec22 retary of Energy) for up to 50 percent 

23 of the total retrofit cost, including 

24 amounts up to— 

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1 (aa) $24.00 per thousand 

2 gallons per year of potable water 

3 savings of 40 percent or more; 

4 (bb) $27.00 per thousand gal5 lons per year of potable water sav6 ings of 50 percent or more; and 

7 (cc) $30.00 per thousand gal8 lons per year of potable water sav9 ings of 60 percent or more. 

10 (II) ENVIRONMENTAL IMPROVE11 MENTS.—Additional awards of up to 

12 $1,000 may be granted for the inclu13 sion of other environmental attributes 

14 that the Secretary, in consultation 

15 with the Administrator, identifies as 

16 contributing to energy efficiency. Such 

17 attributes may include, but are not 

18 limited to waste diversion and the use 

19 of environmentally preferable materials 

20 (including salvaged, renewable, or re21 cycled materials, and materials with 

22 no or low-VOC content). The Adminis23 trator may recommend that States de24 velop such standards as are necessary 

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1 tions that may affect the feasibility or 

2 availability of identified resources and 

3 attributes. 

4 (iv) INDOOR AIR QUALITY MINIMUM.— 

5 Nonresidential buildings receiving incen6 tives under this section must satisfy at a 

7 minimum the most recent version of 

8 ASHRAE Standard 62.1 for ventilation, or 

9 the equivalent as determined by the Admin10 istrator. A State may issue a waiver from 

11 this requirement to a building project on a 

12 showing that such compliance is infeasible 

13 due to the physical constraints of the build14 ing’s existing ventilation system, or such 

15 other limitations as may be specified by the 

16 Administrator. 

17 (C) HISTORIC BUILDINGS.—Notwith18 standing subparagraphs (A) and (B), a building 

19 in or eligible for the National Register of His20 toric Places shall be eligible for awards under 

21 this paragraph in amounts up to 120 percent of 

22 the amounts set forth in subparagraphs (A) and 

23 (B). 

24 (D) SUPPLEMENTAL SUPPORT.—State and 

25 local governments may supplement the per-buildmstockstill on PROD1PC66 with BILLS

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1 ing expenditures under this paragraph with 

2 funding from other sources. 

3 (3) ADJUSTMENT.—The Administrator may ad4 just the specific dollar limits funded by the sale of al5 lowances pursuant to paragraph (2) in years subse6 quent to the second year after the date of enactment 

7 of this Act, and every 2 years thereafter, as the Ad8 ministrator determines necessary to achieve optimum 

9 cost-effectiveness and to maximize incentives to 

10 achieve energy efficiency within the total building 

11 award amounts provided in that paragraph, and 

12 shall publish and hold constant such revised limits for 

13 at least 2 years. 

14 (j) REPORT TO CONGRESS.—The Administrator shall 

15 conduct an annual assessment of the achievements of the 

16 REEP program in each State, shall prepare an annual re17 port of such achievements and any recommendations for 

18 program modifications, and shall provide such report to 

19 Congress at the end of each fiscal year during which fund20 ing or other resources were made available to the States for 

21 the REEP Program. 

22 (k) OTHER SOURCES OF FEDERAL SUPPORT.— 

23 (1) ADDITIONAL STATE ENERGY PROGRAM

24 FUNDS.—Any Federal funding provided to a State 

25 Energy Program that is not required to be expended 

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1 for a different federally designated purpose may be 

2 used to support a REEP program. 

3 (2) PROGRAM ADMINISTRATION.—State Energy 

4 Offices or designated State agencies may expend up 

5 to 10 percent of available allowance value provided 

6 under this section for program administration. 

7 (3) AUTHORIZATION OF APPROPRIATIONS.— 

8 There are authorized to be appropriated for the pur9 poses of this section, for each of fiscal years 2010, 

10 2011, 2012, and 2013— 

11 (A) $50,000,000 to the Administrator for 

12 program administration costs; and 

13 (B) $20,000,000 to the Secretary of Energy 

14 for program administration costs. 

15 SEC. 203. ENERGY EFFICIENT MANUFACTURED HOMES. 

16 (a) DEFINITIONS.—In this section: 

17 (1) MANUFACTURED HOME.—The term ‘‘manu18 factured home’’ has the meaning given such term in 

19 section 603 of the National Manufactured Housing 

20 Construction and Safety Standards Act of 1974 (42 

21 U.S.C. 5402). 

22 (2) ENERGY STAR QUALIFIED MANUFACTURED

23 HOME.—The term ‘‘Energy Star qualified manufac24 tured home’’ means a manufactured home that has 

25 been designed, produced, and installed in accordance 

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1 with Energy Star’s guidelines by an Energy Star cer2 tified plant. 

3 (b) PURPOSE.—The purpose of this section is to assist 

4 low-income households residing in manufactured homes 

5 constructed prior to 1976 to save energy and energy expend6 itures by providing support toward the purchase of new En7 ergy Star qualified manufactured homes. 

8 (c) STATE IMPLEMENTATION OF PROGRAM.— 

9 (1) MANUFACTURED HOME REPLACEMENT PRO10 GRAM.—Any State may provide to the owner of a 

11 manufactured home constructed prior to 1976 a re12 bate to use toward the purchase of a new Energy Star 

13 qualified manufactured home pursuant to this section. 

14 (2) USE OF ALLOWANCES.—Direct Federal sup15 port for the program established in this section is pro16 vided through the emission allowances allocated to the 

17 States’ SEED Accounts pursuant to section 132 of 

18 this Act. To the extent that a State provides allow19 ances to local governments within the State to imple20 ment this program, that shall be deemed a distribu21 tion of such allowances to units of local government 

22 pursuant to subsection (c)(1) of that section. 

23 (3) REBATES.— 

24 (A) PRIMARY RESIDENCE REQUIREMENT.— 

25 A rebate described under paragraph (1) may 

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1 only be made to an owner of a manufactured 

2 home constructed prior to 1976 that is used on 

3 a year-round basis as a primary residence. 

4 (B) DISMANTLING AND REPLACEMENT.—A 

5 rebate described under paragraph (1) may be 

6 made only if the manufactured home constructed 

7 prior to 1976 will be— 

8 (i) rendered unusable for human habi9 tation (including appropriate recycling); 

10 and 

11 (ii) replaced, in the same general loca12 tion, as determined by the applicable State 

13 agency, with an Energy Star qualified 

14 manufactured home. 

15 (C) SINGLE REBATE.—A rebate described 

16 under paragraph (1) may not be provided to any 

17 owner of a manufactured home constructed prior 

18 to 1976 that was or is a member of a household 

19 for which any other member of the household was 

20 provided a rebate pursuant to this section. 

21 (D) ELIGIBLE HOUSEHOLDS.—To be eligi22 ble to receive a rebate described under paragraph 

23 (1), an owner of a manufactured home con24 structed prior to 1976 shall demonstrate to the 

25 applicable State agency that the total income of 

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1 all members the owner’s household does not ex2 ceed 200 percent of the Federal poverty level for 

3 income in the applicable area. 

4 (E) ADVANCE AVAILABILITY.—A rebate may 

5 be provided under this section in a manner to 

6 facilitate the purchase of a new Energy Star 

7 qualified manufactured home. 

8 (4) REBATE LIMITATION.—Rebates provided by 

9 States under this section shall not exceed $7,500 per 

10 manufactured home from any value derived from the 

11 use of emission allowances provided to the State pur12 suant to section 132. 

13 (5) USE OF STATE FUNDS.—A State providing 

14 rebates under this section may supplement the 

15 amount of such rebates under paragraph (4) by any 

16 additional amount is from State funds and other 

17 sources, including private donations or grants from 

18 charitable organizations. 

19 (6) COORDINATION WITH SIMILAR PROGRAMS.— 

20 (A) STATE PROGRAMS.—A State conducting 

21 an existing program that has the purpose of re22 placing manufactured homes constructed prior to 

23 1976 with Energy Star qualified manufactured 

24 homes, may use allowance value provided under 

25 section 782 of the Clean Air Act to support such 

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1 a program, provided such funding does not ex2 ceed the rebate limitation amount under para3 graph (4). 

4 (B) FEDERAL PROGRAMS.—The Secretary of 

5 Energy shall coordinate with and seek to achieve 

6 the purpose of this section through similar Fed7 eral programs including— 

8 (i) the Weatherization Assistance Pro9 gram under part A of title IV of the Energy 

10 Conservation and Production Act (42 

11 U.S.C. 6861 et seq.); and 

12 (ii) the program under part D of title 

13 III of the Energy Policy and Conservation 

14 Act (42 U.S.C. 6321 et seq.). 

15 (C) COORDINATION WITH OTHER STATE

16 AGENCIES.—A State agency using allowance 

17 value to administer the program under this sec18 tion may coordinate its efforts, and share funds 

19 for administration, with other State agencies in20 volved in low-income housing programs. 

21 (7) ADMINISTRATIVE EXPENSES.—A State using 

22 allowance value under this section may expend not 

23 more than 10 percent of such value for administrative 

24 expenses related to this program. 

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1 SEC. 204. BUILDING ENERGY PERFORMANCE LABELING 

2 PROGRAM. 

3 (a) ESTABLISHMENT.— 

4 (1) PURPOSE.—The Administrator shall estab5 lish a building energy performance labeling program 

6 with broad applicability to the residential and com7 mercial markets to enable and encourage knowledge 

8 about building energy performance by owners and oc9 cupants and to inform efforts to reduce energy con10 sumption nationwide. 

11 (2) COMPONENTS.—In developing such program, 

12 the Administrator shall— 

13 (A) consider existing programs, such as En14 vironmental Protection Agency’s Energy Star 

15 program, the Home Energy Rating System 

16 (HERS) Index, and programs at the Depart17 ment of Energy; 

18 (B) support the development of model per19 formance labels for residential and commercial 

20 buildings; and 

21 (C) utilize incentives and other means to 

22 spur use of energy performance labeling of public 

23 and private sector buildings nationwide. 

24 (b) DATA ASSESSMENT FOR BUILDING ENERGY PER25 FORMANCE.— 

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1 (1) INITIAL REPORT.—Not later than 90 days 

2 after the date of enactment of this Act, the Adminis3 trator shall provide to Congress, as well as to the Sec4 retary of Energy and the Office of Management and 

5 Budget, a report identifying— 

6 (A) all principal building types for which 

7 statistically significant energy performance data 

8 exists to serve as the basis of measurement proto9 cols and labeling requirements for achieved 

10 building energy performance; and 

11 (B) those building types for which addi12 tional data are required to enable the develop13 ment of such protocols and requirements. 

14 (2) ADDITIONAL REPORTS.—Additional updated 

15 reports shall be provided under this subsection as 

16 often as The Administrator considers practicable, but 

17 not less than every 2 years. 

18 (c) BUILDING DATA ACQUISITION.— 

19 (1) RESOURCE REQUIREMENTS.—For all prin20 cipal building types identified under subsection (b), 

21 the Secretary of Energy, not later than 90 days after 

22 a report by the Administrator under subsection (b), 

23 shall provide to Congress, the Administrator, and the 

24 Office of Management and Budget a statement of ad25 ditional resources needed, if any, to fully develop the 

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1 relevant data, as well as the anticipated timeline for 

2 data development. 

3 (2) CONSULTATION.—The Secretary of Energy 

4 shall consult with the Administrator concerning the 

5 Administrator’s ability to use data series for these ad6 ditional building types to support the achieved per7 formance component in the labeling program. 

8 (3) IMPROVEMENTS TO BUILDING ENERGY CON9 SUMPTION DATABASES.— 

10 (A) COMMERCIAL DATABASE.—The Sec11 retary of Energy shall support improvements to 

12 the Commercial Buildings Energy Consumption 

13 Survey (CBECS) as authorized by section 205(k) 

14 of the Department of Energy Organization Act 

15 (42 U.S.C. 7135(k))— 

16 (i) to enable complete and robust data 

17 for the actual energy performance of prin18 cipal building types currently covered by 

19 survey; 

20 (ii) to cover additional building types 

21 as identified by the Administrator under 

22 subsection (b)(1)(B), to enable the develop23 ment of achieved performance measurement 

24 protocols are developed for at least 90 per25 cent of all major commercial building types 

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1 within 5 years after the date of enactment 

2 of this Act; and 

3 (iii) to include third-party audits of 

4 random data samplings to ensure the qual5 ity and accuracy of survey information. 

6 (B) RESIDENTIAL DATABASES.—The Ad7 ministrator, in consultation with the Energy In8 formation Administration and the Secretary of 

9 Energy, shall support improvements to the Resi10 dential Energy Consumption Survey (RECS) as 

11 authorized by section 205(k) of the Department 

12 of Energy Organization Act (42 U.S.C. 7135(k)), 

13 or such other residential energy performance 

14 databases as the Administrator considers appro15 priate, to aid the development of achieved per16 formance measurement protocols for residential 

17 building energy use for at least 90 percent of the 

18 residential market within 5 years after the date 

19 of enactment of this Act. 

20 (C) CONSULTATION.—The Secretary of En21 ergy and the Administrator shall consult with 

22 public, private, and nonprofit sector representa23 tives from the building industry and real estate 

24 industry to assist in the evaluation and immstockstill on PROD1PC66 with BILLS

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1 provement of building energy performance data2 bases and labeling programs. 

3 (d) IDENTIFICATION OF MEASUREMENT PROTOCOLS

4 FOR ACHIEVED PERFORMANCE.— 

5 (1) PROPOSED PROTOCOLS AND REQUIRE6 MENTS.—At the earliest practicable date, but not later 

7 than 1 year after identifying a building type under 

8 subsection (b)(1)(A), the Administrator shall propose 

9 a measurement protocol for that building type and a 

10 requirement detailing how to use that protocol in 

11 completing applicable commercial or residential per12 formance labels created pursuant to this section. 

13 (2) FINAL RULE.—After providing for notice and 

14 comment, the Administrator shall publish a final rule 

15 containing a measurement protocol and the cor16 responding requirements for applying that protocol. 

17 Such a rule— 

18 (A) shall define the minimum period for 

19 measurement of energy use by buildings of that 

20 type and other details for determining achieved 

21 performance, to include leased buildings or parts 

22 thereof; 

23 (B) shall identify necessary data collection 

24 and record retention requirements; and 

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1 (C) may specify transition rules and ex2 emptions for classes of buildings within the 

3 building type. 

4 (e) PROCEDURES FOR EVALUATING DESIGNED PER5 FORMANCE.—The Administrator shall develop protocols for 

6 evaluating the designed performance of individual building 

7 types. The Administrator may conduct such feasibility 

8 studies and demonstration projects as are necessary to 

9 evaluate the sufficiency of proposed protocols for designed 

10 performance. 

11 (f) CREATION OF BUILDING ENERGY PERFORMANCE

12 LABELING PROGRAM.— 

13 (1) MODEL LABEL.—Not later than 1 year after 

14 the date of enactment of this Act, the Administrator 

15 shall propose a model building energy label that pro16 vides a format— 

17 (A) to display achieved performance and de18 signed performance data; 

19 (B) that may be tailored for residential and 

20 commercial buildings, and for single-occupancy 

21 and multitenanted buildings; and 

22 (C) to display other appropriate elements 

23 identified during the development of measure24 ment protocols under subsections (d) and (e). 

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1 (2) INCLUSIONS.—Nothing in this section shall 

2 require the inclusion on such a label of designed per3 formance data where impracticable or not cost effec4 tive, or to preclude the display of both achieved per5 formance and designed performance data for a par6 ticular building where both such measures are avail7 able, practicable, and cost effective. 

8 (3) EXISTING PROGRAMS.—In developing the 

9 model label, the Administrator shall consider existing 

10 programs, including— 

11 (A) the Environmental Protection Agency’s 

12 Energy Star Portfolio Manager program and the 

13 California HERS II Program Custom Approach 

14 for the achieved performance component of the 

15 label; 

16 (B) the Home Energy Rating System 

17 (HERS) Index system for the designed perform18 ance component of the label; and 

19 (C) other Federal and State programs, in20 cluding the Department of Energy’s related pro21 grams on building technologies and those of the 

22 Federal Energy Management Program. 

23 (4) FINAL RULE.—After providing for notice and 

24 comment, the Administrator shall publish a final rule 

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1 containing the label applicable to covered building 

2 types. 

3 (g) DEMONSTRATION PROJECTS FOR LABELING PRO4 GRAM.— 

5 (1) IN GENERAL.—The Administrator shall con6 duct building energy performance labeling demonstra7 tion projects for different building types— 

8 (A) to ensure the sufficiency of the current 

9 Commercial Buildings Energy Consumption 

10 Survey and other data to serve as the basis for 

11 new measurement protocols for the achieved per12 formance component of the building energy per13 formance labeling program; 

14 (B) to inform the development of measure15 ment protocols for building types not currently 

16 covered by the Commercial Buildings Energy 

17 Consumption Survey; and 

18 (C) to identify any additional information 

19 that needs to be developed to ensure effective use 

20 of the model label. 

21 (2) PARTICIPATION.—Such demonstration 

22 projects shall include participation of— 

23 (A) buildings from diverse geographical and 

24 climate regions; 

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1 (B) buildings in both urban and rural 

2 areas; 

3 (C) single-family residential buildings; 

4 (D) multihousing residential buildings with 

5 more than 50 units, including at least one 

6 project that provides affordable housing to indi7 viduals of diverse incomes; 

8 (E) single-occupant commercial buildings 

9 larger than 30,000 square feet; 

10 (F) multitenanted commercial buildings 

11 larger than 50,000 square feet; and 

12 (G) buildings from both the public and pri13 vate sectors. 

14 (3) PRIORITY.—Priority in the selection of dem15 onstration projects shall be given to projects that fa16 cilitate large-scale implementation of the labeling pro17 gram for samples of buildings across neighborhoods, 

18 geographic regions, cities, or States. 

19 (4) FINDINGS.—The Administrator shall report 

20 any findings from demonstration projects under this 

21 subsection, including an identification of any areas of 

22 needed data improvement, to the Department of Ener23 gy’s Energy Information Administration and Build24 ing Technologies Program. 

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1 (5) COORDINATION.—The Administrator and the 

2 Secretary of Energy shall coordinate demonstration 

3 projects undertaken pursuant to this subsection with 

4 those undertaken as part of the Zero-Net-Energy 

5 Commercial Buildings Initiative adopted under sec6 tion 422 of the Energy Independence and Security 

7 Act of 2007 (42 U.S.C. 17082). 

8 (h) IMPLEMENTATION OF LABELING PROGRAM.— 

9 (1) IN GENERAL.—The Administrator, in con10 sultation with the Secretary of Energy, shall work 

11 with all State Energy Offices established pursuant to 

12 part D of title III of the Energy Policy and Con13 servation Act (42 U.S.C. 6321 et seq.) or other State 

14 authorities as necessary for the purpose of imple15 menting the labeling program established under this 

16 section for commercial and residential buildings. 

17 (2) OUTREACH TO LOCAL AUTHORITIES.—The 

18 Administrator shall, acting in consultation and co19 ordination with the respective States, encourage use of 

20 the labeling program by counties and other localities 

21 to broaden access to information about building en22 ergy use, for example, through disclosure of building 

23 label contents in tax, title, and other records those lo24 calities maintain. For this purpose, the Adminis25 trator shall develop an electronic version of the label 

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1 and information that can be readily transmitted and 

2 read in widely-available computer programs but is 

3 protected from unauthorized manipulation. 

4 (3) MEANS OF IMPLEMENTATION.—In adopting 

5 the model labeling program established under this sec6 tion, a State shall seek to ensure that labeled informa7 tion be made accessible to the public in a manner so 

8 that owners, lenders, tenants, occupants, or other rel9 evant parties can utilize it. Such accessibility may be 

10 accomplished through— 

11 (A) preparation, and public disclosure of 

12 the label through filing with tax and title records 

13 at the time of— 

14 (i) a building audit conducted with 

15 support from Federal or State funds; 

16 (ii) a building energy-efficiency retrofit 

17 conducted in response to such an audit; 

18 (iii) a final inspection of major ren19 ovations or additions made to a building in 

20 accordance with a building permit issued 

21 by a local government entity; 

22 (iv) a sale that is recorded for title and 

23 tax purposes consistent with paragraph (8); 

24 (v) a new lien recorded on the property 

25 for more than a set percentage of the asmstockstill on PROD1PC66 with BILLS

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1 sessed value of the property, if that lien re2 flects public financial assistance for energy3 related improvements to that building; or 

4 (vi) a change in ownership or oper5 ation of the building for purposes of utility 

6 billing; or 

7 (B) other appropriate means. 

8 (4) STATE IMPLEMENTATION OF PROGRAM.— 

9 (A) ELIGIBILITY.—A State may become eli10 gible to utilize allowance value to implement this 

11 program by— 

12 (i) adopting by statute or regulation a 

13 requirement that buildings be assessed and 

14 labeled, consistent with the labeling require15 ments of the program established under this 

16 section; or 

17 (ii) adopting a plan to implement a 

18 model labeling program consistent with this 

19 section within one year of enactment of this 

20 Act, including the establishment of that pro21 gram within 3 years after the date of enact22 ment of this Act, and demonstrating contin23 uous progress under that plan. 

24 (B) USE OF ALLOWANCES.—Direct Federal 

25 support for the program established in this secmstockstill on PROD1PC66 with BILLS

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1 tion is provided through the emission allowances 

2 allocated to the States’ SEED Accounts pursuant 

3 to section 132 of this Act. To the extent that a 

4 State provides allowances to local governments 

5 within the State to implement this program, that 

6 shall be deemed a distribution of such allowances 

7 to units of local government pursuant to sub8 section (c)(1) of that section. 

9 (5) GUIDANCE.—The Administrator may create 

10 or identify model programs and resources to provide 

11 guidance to offer to States and localities for creating 

12 labeling programs consistent with the model program 

13 established under this section. 

14 (6) PROGRESS REPORT.—The Administrator, in 

15 consultation with the Secretary of Energy, shall pro16 vide a progress report to Congress not later than 3 

17 years after the date of enactment of this Act that— 

18 (A) evaluates the effectiveness of efforts to 

19 advance use of the model labeling program by 

20 States and localities; 

21 (B) recommends any legislative changes 

22 necessary to broaden the use of the model label23 ing program; and 

24 (C) identifies any changes to broaden the 

25 use of the model labeling program that the Admstockstill on PROD1PC66 with BILLS

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1 ministrator has made or intends to make that do 

2 not require additional legislative authority. 

3 (7) STATE INFORMATION.—The Administrator 

4 may require States to report to the Administrator in5 formation that the Administrator requires to provide 

6 the report required under paragraph (6). 

7 (8) PREVENTION OF DISRUPTION OF SALES

8 TRANSACTIONS.—No State shall implement a new la9 beling program pursuant to this section in a manner 

10 that requires the labeling of a building to occur after 

11 a contract has been executed for the sale of that build12 ing and before the sales transaction is completed. 

13 (i) IMPLEMENTATION OF LABELING PROGRAM IN FED14 ERAL BUILDINGS.— 

15 (1) USE OF LABELING PROGRAM.—The Secretary 

16 of Energy and the Administrator shall use the label17 ing program established under this section to evaluate 

18 energy performance in the facilities of the Department 

19 of Energy and the Environmental Protection Agency, 

20 respectively, to the extent practicable, and shall en21 courage and support implementation efforts in other 

22 Federal agencies. 

23 (2) ANNUAL PROGRESS REPORT.—The Secretary 

24 of Energy and Administrator shall provide an annual 

25 progress report to Congress and the Office of Managemstockstill on PROD1PC66 with BILLS

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1 ment and Budget detailing efforts to implement this 

2 subsection, as well as any best practices or needed re3 sources identified as a result of such efforts. 

4 (j) PUBLIC OUTREACH.—The Secretary of Energy and 

5 the Administrator, in consultation with nonprofit and in6 dustry stakeholders with specialized expertise, and in con7 junction with other energy efficiency public awareness ef8 forts, 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 type’’ 

14 means a grouping of buildings as identified by their 

15 principal building activities, or as grouped by their 

16 use, including office buildings, laboratories, libraries, 

17 data centers, retail establishments, hotels, warehouses, 

18 and educational buildings. 

19 (2) MEASUREMENT PROTOCOL.—The term 

20 ‘‘measurement protocol’’ means the methodology, pre21 scribed by the Administrator, for defining a bench22 mark for building energy performance for a specific 

23 building type and for measuring that performance 

24 against the benchmark. 

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1 (3) ACHIEVED PERFORMANCE.—The term 

2 ‘‘achieved performance’’ means the actual energy con3 sumption of a building as compared to a baseline 

4 building of the same type and size, determined by ac5 tual 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 con10 sistent with its design intent for building energy use, 

11 utilizing a standardized set of operational conditions 

12 informed by data collected or confirmed during an 

13 energy audit. 

14 (l) AUTHORIZATION OF APPROPRIATIONS.—There are 

15 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 2020. 

22 SEC. 205. TREE PLANTING PROGRAMS. 

23 (a) FINDINGS.—The Congress finds that— 

24 (1) the utility sector is the largest single source 

25 of greenhouse gas emissions in the United States 

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1 today, producing approximately one-third of the 

2 country’s emissions; 

3 (2) heating and cooling homes accounts for near4 ly 60 percent of residential electricity usage in the 

5 United States; 

6 (3) shade trees planted in strategic locations can 

7 reduce residential cooling costs by as much as 30 per8 cent; 

9 (4) shade trees have significant clean-air benefits 

10 associated with them; 

11 (5) every 100 healthy large trees removes about 

12 300 pounds of air pollution (including particulate 

13 matter and ozone) and about 15 tons of carbon diox14 ide from the air each year; 

15 (6) tree cover on private property and on newly16 developed land has declined since the 1970s, even 

17 while emissions from transportation and industry 

18 have been rising; and 

19 (7) in over a dozen test cities across the United 

20 States, increasing urban tree cover has generated be21 tween two and five dollars in savings for every dollar 

22 invested in such tree planting. 

23 (b) DEFINITIONS.—As used in this section: 

24 (1) The term ‘‘Secretary’’ refers to the Secretary 

25 of Energy. 

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1 (2) The term ‘‘retail power provider’’ means any 

2 entity authorized under applicable State or Federal 

3 law to generate, distribute, or provide retail elec4 tricity, natural gas, or fuel oil service. 

5 (3) The term ‘‘tree-planting organization’’ means 

6 any nonprofit or not-for-profit group which exists, in 

7 whole or in part, to— 

8 (A) expand urban and residential tree 

9 cover; 

10 (B) distribute trees for planting; 

11 (C) increase awareness of the environmental 

12 and energy-related benefits of trees; 

13 (D) educate the public about proper tree 

14 planting, care, and maintenance strategies; or 

15 (E) carry out any combination of the fore16 going activities. 

17 (4) The term ‘‘tree-siting guidelines’’ means a 

18 comprehensive list of science-based measurements out19 lining the species and minimum distance required be20 tween trees planted pursuant to this section, in addi21 tion to the minimum required distance to be main22 tained between such trees and— 

23 (A) building foundations; 

24 (B) air conditioning units; 

25 (C) driveways and walkways; 

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1 (D) property fences; 

2 (E) preexisting utility infrastructure; 

3 (F) septic systems; 

4 (G) swimming pools; and 

5 (H) other infrastructure as deemed appro6 priate. 

7 (5) The terms ‘‘small office’’, ‘‘small office build8 ings’’, and ‘‘small office settings’’ means nonresiden9 tial buildings or structures zoned for business pur10 poses that are 20,000 square feet or less in total area. 

11 (c) PURPOSES.—The purpose of this section is to estab12 lish a grant program to assist retail power providers with 

13 the establishment and operation of targeted tree-planting 

14 programs in residential and small office settings, for the 

15 following purposes: 

16 (1) Reducing the peak-load demand for elec17 tricity from residences and small office buildings dur18 ing the summer months through direct shading of 

19 buildings provided by strategically planted trees. 

20 (2) Reducing wintertime demand for energy 

21 from residences and small office buildings by blocking 

22 cold winds from reaching such structures, which low23 ers interior temperatures and drives heating demand. 

24 (3) Protecting public health by removing harm25 ful pollution from the air. 

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1 (4) Utilizing the natural photosynthetic and 

2 transpiration process of trees to lower ambient tem3 peratures and absorb carbon dioxide, thus mitigating 

4 the effects of climate change. 

5 (5) Lowering electric bills for residential and 

6 small office ratepayers by limiting electricity con7 sumption without reducing benefits. 

8 (6) Relieving financial and demand pressure on 

9 retail power providers that stems from large peak10 load energy demand. 

11 (7) Protecting water quality and public health 

12 by reducing stormwater runoff and keeping harmful 

13 pollutants from entering waterways. 

14 (8) Ensuring that trees are planted in locations 

15 that limit the amount of public money needed to 

16 maintain public and electric infrastructure. 

17 (d) GENERAL AUTHORITY.— 

18 (1) ASSISTANCE.—The Secretary is authorized to 

19 provide financial, technical, and related assistance to 

20 retail power providers to assist with the establishment 

21 of new, or continued operation of existing, targeted 

22 tree-planting programs for residences and small office 

23 buildings. 

24 (2) PUBLIC RECOGNITION INITIATIVE.—In car25 rying out the authority provided under this section, 

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1 the Secretary shall also create a national public rec2 ognition initiative to encourage participation in tree3 planting programs by retail power providers. 

4 (3) ELIGIBILITY.—Only those programs which 

5 utilize targeted, strategic tree-siting guidelines to 

6 plant trees in relation to building location, sunlight, 

7 and prevailing wind direction shall be eligible for as8 sistance under this section. 

9 (4) REQUIREMENTS.—In order to qualify for as10 sistance under this section, a tree-planting program 

11 shall meet each of the following requirements: 

12 (A) The program shall provide free or dis13 counted shade-providing or wind-reducing trees 

14 to residential and small office consumers inter15 ested in lowering their home energy costs. 

16 (B) The program shall optimize the elec17 tricity-consumption reduction benefit of each tree 

18 by planting in strategic locations around a given 

19 residence or small office. 

20 (C) The program shall either— 

21 (i) provide maximum amounts of 

22 shade during summer intervals when resi23 dences and small offices are exposed to the 

24 most sun intensity; or 

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1 (ii) provide maximum amounts of 

2 wind protection during fall and winter in3 tervals when residences and small offices are 

4 exposed to the most wind intensity. 

5 (D) The program shall use the best available 

6 science to create tree siting guidelines which dic7 tate where the optimum tree species are best 

8 planted in locations that achieve maximum re9 ductions in consumer energy demand while caus10 ing the least disruption to public infrastructure, 

11 considering overhead and underground facilities. 

12 (E) The program shall receive certification 

13 from the Secretary that it is designed to achieve 

14 the goals set forth in subparagraphs (A) through 

15 (D). In designating criteria for such certifi16 cation, the Secretary shall collaborate with the 

17 United States Forest Service’s Urban and Com18 munity Forestry Program to ensure that certifi19 cation requirements are consistent with such 

20 above goals. 

21 (5) NEW PROGRAM FUNDING SHARE.—The Sec22 retary shall ensure that no less than 30 percent of the 

23 funds made available under this section are distrib24 uted to retail power providers which— 

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1 (A) have not previously established or oper2 ated qualified tree-planting programs; or 

3 (B) are operating qualified tree-planting 

4 programs which were established no more than 

5 three years prior to the date of enactment of this 

6 section. 

7 (e) AGREEMENTS BETWEEN ELECTRICITY PROVIDERS

8 AND TREE-PLANTING ORGANIZATIONS.— 

9 (1) GRANT AUTHORIZATION.—In providing as10 sistance under this section, the Secretary is author11 ized to award grants only to retail power providers 

12 that have entered into binding legal agreements with 

13 nonprofit tree-planting organizations. 

14 (2) CONDITIONS OF AGREEMENT.—Those agree15 ments between retail power providers and tree-plant16 ing organizations shall set forth conditions under 

17 which nonprofit tree-planting organizations shall pro18 vide targeted tree-planting programs which may re19 quire these organizations to— 

20 (A) participate in local technical advisory 

21 committees responsible for drafting general tree22 siting guidelines and choosing the most effective 

23 species of trees to plant in given locations; 

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1 (B) coordinate volunteer recruitment to as2 sist with the physical act of planting trees in 

3 residential locations; 

4 (C) undertake public awareness campaigns 

5 to educate local residents about the benefits, cost 

6 savings, and availability of free shade trees; 

7 (D) establish education and information 

8 campaigns to encourage recipients to maintain 

9 their shade trees over the long term; 

10 (E) serve as the point of contact for existing 

11 and potential residential participants who have 

12 questions or concerns regarding the tree-planting 

13 program; 

14 (F) require tree recipients to sign agree15 ments committing to voluntary stewardship and 

16 care of provided trees; 

17 (G) monitor and report on the survival, 

18 growth, overall health, and estimated energy sav19 ings of provided trees up until the end of their 

20 establishment period which shall be no less than 

21 five years; and 

22 (H) ensure that trees planted near existing 

23 power lines will not interfere with energized elec24 tricity distribution lines when mature, and that 

25 no new trees will be planted under or adjacent 

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1 to high-voltage electric transmission lines with2 out prior consultation with the applicable retail 

3 power provider receiving assistance under this 

4 section. 

5 (3) LACK OF NONPROFIT ORGANIZATION.—If 

6 qualified nonprofit or not-for-profit tree planting or7 ganizations do not exist or operate within areas 

8 served by retail power providers applying for assist9 ance under this section, the requirements of this sec10 tion shall apply to binding legal agreements entered 

11 into by such retail power providers and one of the fol12 lowing entities: 

13 (A) Local municipal governments with ju14 risdiction over the urban or suburban forest. 

15 (B) The State Forester for the State in 

16 which the tree planting program will operate. 

17 (C) The United States Forest Service’s 

18 Urban and Community Forestry representative 

19 for the State in which the tree-planting program 

20 will operate. 

21 (D) A landscaping services company that 

22 is— 

23 (i) identified in consultation with a 

24 national or State nonprofit or not-for-profit 

25 tree-planting organization; 

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1 (ii) licensed to operate in the State in 

2 which the tree-planting program will oper3 ate; and 

4 (iii) a business as defined by the 

5 United States Census Bureau’s 2007 North 

6 American Industry Classification System 

7 Code 561730. 

8 (f) TECHNICAL ADVISORY COMMITTEES.— 

9 (1) DESCRIPTION.—In order to qualify for as10 sistance under this section, the retail power provider 

11 shall establish and consult with a local technical advi12 sory committee which shall provide advice and con13 sultation to the program, and may— 

14 (A) design and adopt an approved plant 

15 list that emphasizes the use of hardy, 

16 noninvasive tree species and, where geographi17 cally appropriate, the use of native, or site18 adapted, or low water-use shade trees; 

19 (B) design and adopt planting, installation, 

20 and maintenance specifications and create a 

21 process for inspection and quality control; 

22 (C) ensure that tree recipients are educated 

23 to care for and maintain their trees over the long 

24 term; 

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1 (D) help the public become more engaged 

2 and educated in the planting and care of shade 

3 trees; 

4 (E) prioritize which sites receive trees, giv5 ing preference to locations with the most poten6 tial for energy conservation and secondary pref7 erence to areas where the average annual income 

8 is below the regional median; and 

9 (F) assist with monitoring and collection of 

10 data on tree health, tree survival, and energy 

11 conservation benefits generated under this sec12 tion. 

13 (2) COMPENSATION.—Individuals serving on 

14 local technical advisory committees shall not receive 

15 compensation for their service. 

16 (3) COMPOSITION.—Local technical advisory 

17 committees shall be composed of representatives from 

18 public, private, and nongovernmental agencies with 

19 expertise in demand-side energy efficiency manage20 ment, urban forestry, or arboriculture, and shall be 

21 composed of the following: 

22 (A) Up to 4 persons, but no less than one 

23 person, representing the retail power provider re24 ceiving assistance under this section. 

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1 (B) Up to 4 persons, but no less than one 

2 person, representing the local tree-planting orga3 nization which will partner with the retail 

4 power provider to carry out this section. 

5 (C) Up to 3 persons representing local non6 profit conservation or environmental organiza7 tions. Preference shall be given to those entities 

8 which are organized under section 501(c)(3) of 

9 the Internal Revenue Code of 1986, and which 

10 have demonstrated expertise engaging the public 

11 in energy conservation, energy efficiency, or 

12 green building practices or a combination there13 of, such that no single organization is rep14 resented by more than one individual under this 

15 paragraph. 

16 (D) Up to 2 persons representing a local af17 fordable housing agency, affordable housing 

18 builder, or community development corporation. 

19 (E) Up to 3, but no less than one, persons 

20 representing local city or county government for 

21 each municipality where a shade tree-planting 

22 program will take place; at least one of these rep23 resentatives shall be the city or county forester, 

24 city or county arborist, or functional equivalent. 

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1 (F) Up to one person representing the local 

2 government agency responsible for management 

3 of roads, sewers, and infrastructure, including 

4 but not limited to public works departments, 

5 transportation agencies, or equivalents. 

6 (G) Up to 3 persons representing the nurs7 ery and landscaping industry. 

8 (H) Up to 3 persons representing the re9 search community or academia with expertise in 

10 natural resources or energy management issues. 

11 (4) CHAIRPERSON.—Each local technical advi12 sory committee shall elect a chairperson to preside 

13 over Committee meetings, act as a liaison to govern14 mental and other outside entities, and direct the gen15 eral operation of the committee; only committee rep16 resentatives from paragraph (3)(A) or paragraph 

17 (3)(B) of this subsection shall be eligible to act as 

18 local technical advisory committee chairpersons. 

19 (5) CREDENTIALS.—At least one of the members 

20 of each local technical advisory committee shall be 

21 certified with one or more of the following credentials: 

22 International Society of Arboriculture; Certified 

23 Arborist, ISA; Certified Arborist Municipal Spe24 cialist, ISA; Certified Arborist Utility Specialist, 

25 ISA; Board Certified Master Arborist; or Registered 

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1 Landscape Architect recommended by the American 

2 Society of Landscape Architects. 

3 (g) COST-SHARE PROGRAM.— 

4 (1) FEDERAL SHARE.—The Federal share of sup5 port for projects funded under this section shall not 

6 exceed 50 percent of the cost of such project and shall 

7 be provided on a matching basis. 

8 (2) NON-FEDERAL SHARE.—The non-Federal 

9 share of such costs may be paid or contributed by any 

10 governmental or nongovernmental entity other than 

11 from funds derived directly or indirectly from an 

12 agency or instrumentality of the United States. 

13 (h) RULEMAKING.— 

14 (1) RULEMAKING PERIOD.—The Secretary shall 

15 be authorized to solicit comments and initiate a rule16 making period that shall last no more than 6 months 

17 after the date of enactment of this section. 

18 (2) COMPETITIVE GRANT RULE.—At the conclu19 sion of the rulemaking period under paragraph (1), 

20 the Secretary shall promulgate a rule governing a 

21 public, competitive grants process through which re22 tail power providers may apply for Federal support 

23 under this section. 

24 (i) NONDUPLICITY.—Nothing in this section shall be 

25 construed to supersede, duplicate, cancel, or negate the promstockstill on PROD1PC66 with BILLS

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1 grams or authorities provided under section 9 of the Cooper2 ative Forestry Assistance Act of 1978 (92 Stat. 369; Public 

3 Law 95–313; 16 U.S.C. 2105). 

4 (j) AUTHORIZATION OF APPROPRIATIONS.—There are 

5 hereby authorized to be appropriated such sums as may be 

6 necessary for the implementation of this section. 

7 SEC. 206. ENERGY EFFICIENCY FOR DATA CENTER BUILD8 INGS. 

9 Section 453(c)(1) of the Energy Independence and Se10 curity Act of 2007 (42 U.S.C. 17112(c)(1)) is amended by 

11 inserting ‘‘but not later than 2 years after the date of enact12 ment of this Act’’ after ‘‘described in subsection (b)’’. 

13 Subtitle B—Lighting and Appliance 

14 Energy Efficiency Programs 

15 SEC. 211. LIGHTING EFFICIENCY STANDARDS. 

16 (a) OUTDOOR LIGHTING.— 

17 (1) DEFINITIONS.— 

18 (A) Section 340(1) of the Energy Policy 

19 and Conservation Act (42 U.S.C. 6311(1)) is 

20 amended by striking subparagraph (L) and in21 serting the following: 

22 ‘‘(L) Outdoor luminaires. 

23 ‘‘(M) Outdoor high light output lamps. 

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1 ‘‘(N) Any other type of industrial equip2 ment which the Secretary classifies as covered 

3 equipment under section 341(b).’’. 

4 (B) Section 340 of the Energy Policy and 

5 Conservation Act (42 U.S.C. 6311) is amended 

6 as adding at the end the following: 

7 ‘‘(25) The term ‘luminaire’ means a complete 

8 lighting unit consisting of one or more light sources 

9 and ballast(s), together with parts designed to dis10 tribute the light, to position and protect such lamps, 

11 and to connect such light sources to the power supply. 

12 ‘‘(26) The term ‘outdoor luminaire’ means a lu13 minaire that is listed as suitable for wet locations 

14 pursuant to Underwriters Laboratories Inc. standard 

15 UL 1598 and is labeled as ‘Suitable for Wet Loca16 tions’ consistent with section 410.4(A) of the National 

17 Electrical Code 2005, or is designed for roadway illu18 mination and meets the requirements of Addendum A 

19 for IESNA TM-15-07: Backlight, Uplight, and Glare 

20 (BUG) Ratings, except for— 

21 ‘‘(A) luminaires designed for outdoor video 

22 display images that cannot be used in general 

23 lighting applications; 

24 ‘‘(B) portable luminaires designed for use at 

25 construction sites; 

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1 ‘‘(C) luminaires designed for continuous 

2 immersion in swimming pools and other water 

3 features; 

4 ‘‘(D) seasonal luminaires incorporating 

5 solely individual lamps rated at 10 watts or less; 

6 ‘‘(E) luminaires designed to be used in 

7 emergency conditions that incorporate a means 

8 of charging a battery and a device to switch the 

9 power supply to emergency lighting loads auto10 matically upon failure of the normal power sup11 ply; 

12 ‘‘(F) components used for repair of installed 

13 luminaries and that meet the requirements of 

14 section 342(h); 

15 ‘‘(G) a luminaire utilizing an electrode-less 

16 fluorescent lamp as the light source; 

17 ‘‘(H) decorative gas lighting systems; 

18 ‘‘(I) luminaires designed explicitly for light19 ing for theatrical purposes, including perform20 ance, stage, film production, and video produc21 tion; 

22 ‘‘(J) luminaires designed as theme elements 

23 in theme/amusement parks and that cannot be 

24 used in most general lighting applications; 

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1 ‘‘(K) luminaires designed explicitly for ve2 hicular roadway tunnels designed to comply 

3 with ANSI/IESNA RP-22-05; 

4 ‘‘(L) luminaires designed explicitly for haz5 ardous locations meeting UL Standard 844; 

6 ‘‘(M) searchlights; 

7 ‘‘(N) luminaires that are designed to be re8 cessed into a building, and that cannot be used 

9 in most general lighting applications; 

10 ‘‘(O) a luminaire rated only for residential 

11 applications utilizing a light source or sources 

12 regulated under the amendments made by section 

13 321 of the Energy Independence and Security 

14 Act of 2007 and with a light output no greater 

15 than 2,600 lumens; 

16 ‘‘(P) a residential pole-mounted luminaire 

17 that is not rated for commercial use utilizing a 

18 light source or sources meeting the efficiency re19 quirements of section 231 of the Energy Inde20 pendence and Security Act of 2007 and mounted 

21 on a post or pole not taller than 10.5 feet above 

22 ground and with a light output not greater than 

23 2,600 lumens; 

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1 ‘‘(Q) a residential fixture with E12 (Can2 delabra) bases that is rated for not more than 

3 300 watts total; or 

4 ‘‘(R) a residential fixture with medium 

5 screw bases that is rated for not more than 145 

6 watts. 

7 ‘‘(27) The term ‘outdoor high light outputlamp’ 

8 means a lamp that— 

9 ‘‘(A) has a rated lumen output not less than 

10 2601 lumens; 

11 ‘‘(B) is capable of being operated at a volt12 age not less than 110 volts and not greater than 

13 300 volts, or driven at a constant current of 6.6 

14 amperes; 

15 ‘‘(C) is not a Parabolic Aluminized Reflec16 tor lamp; and 

17 ‘‘(D) is not a J-type double-ended (T-3) 

18 halogen quartz lamp, utilizing R-7S bases, that 

19 is manufactured before January 1, 2015. 

20 ‘‘(28) The term ‘outdoor lighting control’ means 

21 a device incorporated in a luminaire that receives a 

22 signal, from either a sensor (such as an occupancy 

23 sensor, motion sensor, or daylight sensor) or an input 

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1 nicated through wired or wireless technology), and 

2 can adjust the light level according to the signal.’’. 

3 (2) STANDARDS.— Section 342 of the Energy 

4 Policy and Conservation Act (42 U.S.C. 6313) is 

5 amended by adding at the end the following: 

6 ‘‘(g) OUTDOOR LUMINAIRES.— 

7 ‘‘(1) Each outdoor luminaire manufactured on 

8 or after January 1, 2011, shall— 

9 ‘‘(A) have an initial luminaire efficacy of 

10 at least 50 lumens per watt; and 

11 ‘‘(B) be designed to use a light source with 

12 a lumen maintenance, calculated as mean rated 

13 lumens divided by initial lumens, of at least 0.6. 

14 ‘‘(2) Each outdoor luminaire manufactured on 

15 or after January 1, 2013, shall— 

16 ‘‘(A) have an initial luminaire efficacy of 

17 at least 70 lumens per watt; and 

18 ‘‘(B) be designed to use a light source with 

19 a lumen maintenance, calculated as mean rated 

20 lumens divided by initial lumens, of at least 0.6. 

21 ‘‘(3) Each outdoor luminaire manufactured on 

22 or after January 1, 2015, shall— 

23 ‘‘(A) have an initial luminaire efficacy of 

24 at least 80 lumens per watt; and 

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1 ‘‘(B) be designed to use a light source with 

2 a lumen maintenance, calculated as mean rated 

3 lumens divided by initial lumens, of at least 

4 0.65. 

5 ‘‘(4) In addition to the requirements of para6 graphs (1) through (3), each outdoor luminaire man7 ufactured on or after January 1, 2011, shall have the 

8 capability of producing at least two different light 

9 levels, including 100 percent and 60 percent of full 

10 lamp output as tested with the maximum rated lamp 

11 per UL1598 or the manufacturer’s maximum speci12 fied for the luminaire under test. 

13 ‘‘(5)(A) Not later than January 1, 2017, the Sec14 retary shall issue a final rule amending the applica15 ble standards established in paragraphs (3) and (4) 

16 if technologically feasible and economically justified. 

17 ‘‘(B) A final rule issued under subparagraph (A) 

18 shall establish efficiency standards at the maximum 

19 level that is technically feasible and economically jus20 tified, as provided in subsections (o) and (p) of sec21 tion 325. The Secretary may also, in such rule22 making, amend or discontinue the product exclusions 

23 listed in section 340(26)(A) through (P), or amend 

24 the lumen maintenance requirements in paragraph 

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1 (3) if the Secretary determines that such amendments 

2 are consistent with the purposes of this Act. 

3 ‘‘(C) If the Secretary issues a final rule under 

4 subparagraph (A) establishing amended standards, 

5 the final rule shall provide that the amended stand6 ards apply to products manufactured on or after Jan7 uary 1, 2020, or one year after the date on which the 

8 final amended standard is published, whichever is 

9 later. 

10 ‘‘(h) OUTDOOR HIGH LIGHT OUTPUT LAMPS.—Each 

11 outdoor high light output lamp manufactured on or after 

12 January 1, 2012, shall have a lighting efficiency of at least 

13 45 lumens per watt.’’. 

14 (3) TEST PROCEDURES.— Section 343(a) of the 

15 Energy Policy and Conservation Act (42 U.S.C. 

16 6314(a)) is amended by adding at the end the fol17 lowing: 

18 ‘‘(10) OUTDOOR LIGHTING.— 

19 ‘‘(A) With respect to outdoor luminaires 

20 and outdoor high light output lamps, the test 

21 procedures shall be based upon the test proce22 dures specified in illuminating engineering soci23 ety procedures LM–79 as of March 1, 2009, and 

24 LM-31, and/or other appropriate consensus test 

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1 neering Society or other appropriate consensus 

2 standards bodies. 

3 ‘‘(B) If illuminating engineering society 

4 procedure LM—79 is amended, the Secretary 

5 shall amend the test procedures established in 

6 subparagraph (A) as necessary to be consistent 

7 with the amended LM–79 test procedure, unless 

8 the Secretary determines, by rule, published in 

9 the Federal Register and supported by clear and 

10 convincing evidence, that to do so would not 

11 meet the requirements for test procedures under 

12 paragraph (2). 

13 ‘‘(C) The Secretary may revise the test pro14 cedures for outdoor luminaires or outdoor high 

15 light output lamps by rule consistent with para16 graph (2), and may incorporate as appropriate 

17 consensus test procedures developed by the Illu18 minating Engineering Society or other appro19 priate consensus standards bodies.’’. 

20 (4) PREEMPTION.— Section 345 of the Energy 

21 Policy and Conservation Act (42 U.S.C. 6316) is 

22 amended by adding at the end the following: 

23 ‘‘(i)(1) Except as provided in paragraph (2), section 

24 327 shall apply to outdoor luminaires to the same extent 

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1 and in the same manner as the section applies under part 

2 B. 

3 ‘‘(2) Any State standard that is adopted on or before 

4 January 1, 2015, pursuant to a statutory requirement to 

5 adopt efficiency standards for reducing outdoor lighting en6 ergy use enacted prior to January 31, 2008, shall not be 

7 preempted.’’. 

8 (5) ENERGY EFFICIENCY STANDARDS FOR CER9 TAIN LUMINAIRES.—Not later than 1 year after the 

10 date of enactment of this Act, the Secretary of Energy 

11 shall, in consultation with the National Electrical 

12 Manufacturers Association, collect data for United 

13 States sales of luminaires described in section 

14 340(26)(H) and (M) of the Energy Policy and Con15 servation Act, to determine the historical growth rate. 

16 If the Secretary finds that the growth in market share 

17 of such luminaires exceeds twice the year to year rate 

18 of the average of the previous three years, then the 

19 Secretary shall within 12 months initiate a rule20 making to determine if such exclusion should be 

21 eliminated, if substitute products exist that perform 

22 more efficiently and fulfill the performance functions 

23 of these luminaires. 

24 (b) PORTABLE LIGHTING.— 

25 (1) PORTABLE LIGHT FIXTURES.— 

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1 (A) DEFINITIONS.—Section 321 of the En2 ergy Policy and Conservation Act (42 U.S.C. 

3 6291) is amended by adding at the end the fol4 lowing: 

5 ‘‘(67) ART WORK LIGHT FIXTURE.—The term 

6 ‘art work light fixture’ means a light fixture designed 

7 only to be mounted directly to an art work and for 

8 the purpose of illuminating that art work. 

9 ‘‘(68) LED LIGHT ENGINE.—The term ‘LED 

10 light engine’ or ‘LED light engine with integral heat 

11 sink’ means a subsystem of an LED light fixture 

12 that— 

13 ‘‘(A) includes 1 or more LED components, 

14 including— 

15 ‘‘(i) an LED driver power source with 

16 electrical and mechanical interfaces; and 

17 ‘‘(ii) an integral heat sink to provide 

18 thermal dissipation; and 

19 ‘‘(B) may be designed to accept additional 

20 components that provide aesthetic, optical, and 

21 environmental control. 

22 ‘‘(69) LED LIGHT FIXTURE.—The term ‘LED 

23 light fixture’ means a complete lighting unit con24 sisting of— 

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1 ‘‘(A) an LED light source with 1 or more 

2 LED lamps or LED light engines; and 

3 ‘‘(B) parts— 

4 ‘‘(i) to distribute the light; 

5 ‘‘(ii) to position and protect the light 

6 source; and 

7 ‘‘(iii) to connect the light source to 

8 electrical power. 

9 ‘‘(70) LIGHT FIXTURE.—The term ‘light fixture’ 

10 means a product designed to provide light that in11 cludes— 

12 ‘‘(A) at least 1 lamp socket; and 

13 ‘‘(B) parts— 

14 ‘‘(i) to distribute the light; 

15 ‘‘(ii) position and protect 1 or more 

16 lamps; and 

17 ‘‘(iii) to connect 1 or more lamps to a 

18 power supply. 

19 ‘‘(71) PORTABLE LIGHT FIXTURE.— 

20 ‘‘(A) IN GENERAL.—The term ‘portable light 

21 fixture’ means a light fixture that has a flexible 

22 cord and an attachment plug for connection to 

23 a nominal 120-volt circuit that— 

24 ‘‘(i) allows the user to relocate the 

25 product without any rewiring; and 

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1 ‘‘(ii) typically can be controlled with a 

2 switch located on the product or the power 

3 cord of the product. 

4 ‘‘(B) EXCLUSIONS.—The term ‘portable 

5 light fixture’ does not include— 

6 ‘‘(i) direct plug-in night lights, sun or 

7 heat lamps, medical or dental lights, port8 able electric hand lamps, signs or commer9 cial advertising displays, photographic 

10 lamps, germicidal lamps, or light fixtures 

11 for marine use or for use in hazardous loca12 tions (as those terms are defined in ANSI/ 

13 NFPA 70 of the National Electrical Code); 

14 or 

15 ‘‘(ii) decorative lighting strings, deco16 rative lighting outfits, or electric candles or 

17 candelabra without lamp shades that are 

18 covered by Underwriter Laboratories (UL) 

19 standard 588, ‘Seasonal and Holiday Deco20 rative Products’.’’. 

21 (B) COVERAGE.— 

22 (i) IN GENERAL.—Section 322(a) of the 

23 Energy Policy and Conservation Act (42 

24 U.S.C. 6292(a)) is amended— 

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1 (I) by redesignating paragraph 

2 (20) as paragraph (24); and 

3 (II) by inserting after paragraph 

4 (19) the following: 

5 ‘‘(20) Portable light fixtures.’’. 

6 (ii) CONFORMING AMENDMENTS.—Sec7 tion 325(l) of the Energy Policy and Con8 servation Act (42 U.S.C. 6295(l)) is amend9 ed by striking ‘‘paragraph (19)’’ each place 

10 it appears in paragraphs (1) and (2) and 

11 inserting ‘‘paragraph (24)’’. 

12 (C) TEST PROCEDURES.—Section 323(b) of 

13 the Energy Policy and Conservation Act (42 

14 U.S.C. 6293(b)) is amended by adding at the end 

15 the following: 

16 ‘‘(19) LED FIXTURES AND LED LIGHT EN17 GINES.—Test procedures for LED fixtures and LED 

18 light engines shall be based on Illuminating Engi19 neering Society of North America (IESNA) test proce20 dure LM–79, Approved Method for Electrical and 

21 Photometric Testing of Solid-State Lighting Devices, 

22 and IESNA-approved test procedure for testing LED 

23 light engines.’’. 

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1 (D) STANDARDS.—Section 325 of the En2 ergy Policy and Conservation Act (42 U.S.C. 

3 6295) is amended— 

4 (i) by redesignating subsection (ii) as 

5 subsection (oo); 

6 (ii) in subsection (oo)(2), as redesig7 nated in clause (i) of this subparagraph, by 

8 striking ‘‘(hh)’’ each place it appears and 

9 inserting ‘‘(mm)’’; and 

10 (iii) by inserting after subsection (hh) 

11 the following: 

12 ‘‘(ii) PORTABLE LIGHT FIXTURES.— 

13 ‘‘(1) IN GENERAL.—Subject to paragraphs (2) 

14 and (3), portable light fixtures manufactured on or 

15 after January 1, 2012, shall meet 1 or more of the fol16 lowing requirements: 

17 ‘‘(A) Be a fluorescent light fixture that 

18 meets the requirements of the Energy Star Pro19 gram for Residential Light Fixtures, Version 4.2. 

20 ‘‘(B) Be equipped with only 1 or more GU– 

21 24 line-voltage sockets, not be rated for use with 

22 incandescent lamps of any type (as defined in 

23 ANSI standards), and meet the requirements of 

24 version 4.2 of the Energy Star program for resi25 dential light fixtures. 

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1 ‘‘(C) Be an LED light fixture or a light fix2 ture with an LED light engine and comply with 

3 the following minimum requirements: 

4 ‘‘(i) Minimum light output: 200 

5 lumens (initial). 

6 ‘‘(ii) Minimum LED light engine effi7 cacy: 40 lumens/watt installed in fixtures 

8 that meet the minimum light fixture effi9 cacy of 29 lumens/watt or, alternatively, a 

10 minimum LED light engine efficacy of 60 

11 lumens/watt for fixtures that do not meet 

12 the minimum light fixture efficacy of 29 

13 lumens/watt. 

14 ‘‘(iii) All portable fixtures shall have a 

15 minimum LED light fixture efficacy of 29 

16 lumens/watt and a minimum LED light en17 gine efficacy of 60 lumens/watt by January 

18 1, 2016. 

19 ‘‘(iv) Color Correlated Temperature 

20 (CCT): 2700K through 4000K. 

21 ‘‘(v) Minimum Color Rendering Index 

22 (CRI): 75. 

23 ‘‘(vi) Power factor equal to or greater 

24 than 0.70. 

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1 ‘‘(vii) Portable luminaries that have 

2 internal power supplies shall have zero 

3 standby power when the luminaire is 

4 turned off. 

5 ‘‘(viii) LED light sources shall deliver 

6 at least 70 percent of initial lumens for at 

7 least 25,000 hours. 

8 ‘‘(D)(i) Be equipped with an ANSI-des9 ignated E12, E17, or E26 screw-based socket and 

10 be prepackaged and sold together with 1 screw11 based compact fluorescent lamp or screw-based 

12 LED lamp for each screw-based socket on the 

13 portable light fixture. 

14 ‘‘(ii) The compact fluorescent or LED 

15 lamps prepackaged with the light fixture shall be 

16 fully compatible with any light fixture controls 

17 incorporated into the light fixture (for example, 

18 light fixtures with dimmers shall be packed with 

19 dimmable lamps). 

20 ‘‘(iii) Compact fluorescent lamps pre21 packaged with light fixtures shall meet the re22 quirements of the Energy Star Program for 

23 CFLs Version 4.0. 

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1 ‘‘(iv) Screw-based LED lamps shall comply 

2 with the minimum requirements described in 

3 subparagraph (C). 

4 ‘‘(E) Be equipped with 1 or more single5 ended, non-screw based halogen lamp sockets 

6 (line or low voltage), a dimmer control or high7 low control, and be rated for a maximum of 100 

8 watts. 

9 ‘‘(2) REVIEW.— 

10 ‘‘(A) REVIEW.—The Secretary shall review 

11 the criteria and standards established under 

12 paragraph (1) to determine if revised standards 

13 are technologically feasible and economically jus14 tified. 

15 ‘‘(B) COMPONENTS.—The review shall in16 clude consideration of— 

17 ‘‘(i) whether a separate compliance 

18 procedure is still needed for halogen fixtures 

19 described in subparagraph (E) and, if nec20 essary, what an appropriate standard for 

21 halogen fixtures shall be; 

22 ‘‘(ii) whether the specific technical cri23 teria described in subparagraphs (A), (C), 

24 and (D)(iii) should be modified; and 

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1 ‘‘(iii) which fixtures should be exempt2 ed from the light fixture efficacy standard 

3 as of January 1, 2016, because the fixtures 

4 are primarily decorative in nature (as de5 fined by the Secretary) and, even if exempt6 ed, are likely to be sold in limited quan7 tities. 

8 ‘‘(C) TIMING.— 

9 ‘‘(i) DETERMINATION.—Not later than 

10 January 1, 2014, the Secretary shall pub11 lish amended standards, or a determination 

12 that no amended standards are justified, 

13 under this subsection. 

14 ‘‘(ii) STANDARDS.—Any standards 

15 under this paragraph shall take effect on 

16 January 1, 2016. 

17 ‘‘(3) ART WORK LIGHT FIXTURES.—Art work 

18 light fixtures manufactured on or after January 1, 

19 2012, shall— 

20 ‘‘(A) comply with paragraph (1); or 

21 ‘‘(B)(i) contain only ANSI-designated E12 

22 screw-based line-voltage sockets; 

23 ‘‘(ii) have not more than 3 sockets; 

24 ‘‘(iii) be controlled with an integral high/ 

25 low switch; 

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1 ‘‘(iv) be rated for not more than 25 watts 

2 if fitted with 1 socket; and 

3 ‘‘(v) be rated for not more than 15 watts 

4 per socket if fitted with 2 or 3 sockets. 

5 ‘‘(4) EXCEPTION FROM PREEMPTION.—Notwith6 standing section 327, Federal preemption shall not 

7 apply to a regulation concerning portable light fix8 tures adopted by the California Energy Commission 

9 on or before January 1, 2014.’’. 

10 (2) GU–24 BASE LAMPS.— 

11 (A) DEFINITIONS.—Section 321 of the En12 ergy Policy and Conservation Act (42 U.S.C. 

13 6291) (as amended by paragraph (1)(A)) is 

14 amended by adding at the end the following: 

15 ‘‘(72) GU–24.—The term ‘GU–24’ means the des16 ignation of a lamp socket, based on a coding system 

17 by the International Electrotechnical Commission, 

18 under which— 

19 ‘‘(A) ‘G’ indicates a holder and socket type 

20 with 2 or more projecting contacts, such as pins 

21 or posts; 

22 ‘‘(B) ‘U’ distinguishes between lamp and 

23 holder designs of similar type that are not inter24 changeable due to electrical or mechanical re25 quirements; and 

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1 ‘‘(C) 24 indicates the distance in millime2 ters between the electrical contact posts. 

3 ‘‘(73) GU-24 ADAPTOR.— 

4 ‘‘(A) IN GENERAL.—The term ‘GU-24 

5 Adaptor’ means a 1-piece device, pig-tail, wiring 

6 harness, or other such socket or base attachment 

7 that— 

8 ‘‘(i) connects to a GU-24 socket on 1 

9 end and provides a different type of socket 

10 or connection on the other end; and 

11 ‘‘(ii) does not alter the voltage. 

12 ‘‘(B) EXCLUSION.—The term ‘GU-24 Adap13 tor’ does not include a fluorescent ballast with a 

14 GU–24 base. 

15 ‘‘(74) GU–24 BASE LAMP.—‘GU–24 base lamp’ 

16 means a light bulb designed to fit in a GU–24 sock17 et.’’. 

18 (B) STANDARDS.—Section 325 of the En19 ergy Policy and Conservation Act (42 U.S.C. 

20 6295) (as amended by paragraph (1)(D)) is 

21 amended by inserting after subsection (ii) the 

22 following: 

23 ‘‘(jj) GU–24 BASE LAMPS.— 

24 ‘‘(1) IN GENERAL.—A GU–24 base lamp shall 

25 not be an incandescent lamp as defined by ANSI. 

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1 ‘‘(2) GU-24 ADAPTORS.—GU–24 adaptors shall 

2 not adapt a GU–24 socket to any other line voltage 

3 socket.’’. 

4 (3) STANDARDS FOR CERTAIN INCANDESCENT

5 REFLECTOR LAMPS.—Section 325(i) of the Energy 

6 Policy and Conservation Act (42 U.S.C. 6295(i)), as 

7 amended by section 161(a)(12) of this Act, is amend8 ed by adding at the end the following: 

9 ‘‘(9) CERTAIN INCANDESCENT REFLECTOR

10 LAMPS.—(A) No later than 12 months after enact11 ment of this paragraph, the Secretary shall publish a 

12 final rule establishing standards for incandescent re13 flector lamp types described in paragraph (1)(D). 

14 Such standards shall be effective on July 1, 2013. 

15 ‘‘(B) Any rulemaking for incandescent reflector 

16 lamps completed after enactment of this section shall 

17 consider standards for all incandescent reflector 

18 lamps, inclusive of those specified in paragraph 

19 (1)(C). 

20 ‘‘(10) REFLECTOR LAMPS.—No later than Janu21 ary 1, 2015, the Secretary shall publish a final rule 

22 establishing and amending standards for reflector 

23 lamps, including incandescent reflector lamps. Such 

24 standards shall be effective no sooner than three years 

25 after publication of the final rule. Such rulemaking 

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1 shall consider incandescent and nonincandescent tech2 nologies. Such rulemaking shall consider a new met3 ric other than lumens-per-watt based on the photo4 metric distribution of light from such lamps.’’. 

5 SEC. 212. OTHER APPLIANCE EFFICIENCY STANDARDS. 

6 (a) STANDARDS FOR WATER DISPENSERS, HOT FOOD

7 HOLDING CABINETS, AND PORTABLE ELECTRIC SPAS.— 

8 (1) DEFINITIONS.—Section 321 of the Energy 

9 Policy and Conservation Act (42 U.S.C. 6291), as 

10 amended by section 211 of this Act, is further amend11 ed by adding at the end the following: 

12 ‘‘(75) The term ‘water dispenser’ means a fac13 tory-made assembly that mechanically cools and heats 

14 potable water and that dispenses the cooled or heated 

15 water by integral or remote means. 

16 ‘‘(76) The term ‘bottle-type water dispenser’ 

17 means a drinking water dispenser designed for dis18 pensing both hot and cold water that uses a removable 

19 bottle or container as the source of potable water. 

20 ‘‘(77) The term ‘commercial hot food holding 

21 cabinet’ means a heated, fully-enclosed compartment 

22 with one or more solid or glass doors that is designed 

23 to maintain the temperature of hot food that has been 

24 cooked in a separate appliance. Such term does not 

25 include heated glass merchandizing cabinets, drawer 

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1 warmers, commercial hot food holding cabinets with 

2 interior volumes of less than 8 cubic feet, or cook-and3 hold appliances. 

4 ‘‘(78) The term ‘portable electric spa’ means a 

5 factory-built electric spa or hot tub, supplied with 

6 equipment for heating and circulating water.’’. 

7 (2) COVERAGE.—Section 322(a) of the Energy 

8 Policy and Conservation Act (42 U.S.C. 6292(a)), as 

9 amended by section 211(b)(1)(B) of this Act, is fur10 ther amended by inserting after paragraph (20) the 

11 following new paragraphs: 

12 ‘‘(21) Bottle type water dispensers. 

13 ‘‘(22) Commercial hot food holding cabinets. 

14 ‘‘(23) Portable electric spas.’’. 

15 (3) TEST PROCEDURES.—Section 323(b) of the 

16 Energy Policy and Conservation Act (42 U.S.C. 

17 6293(b)), as amended by section 211(b)(1)(C) of this 

18 Act, is further amended by adding at the end the fol19 lowing: 

20 ‘‘(20) BOTTLE TYPE WATER DISPENSERS.—Test 

21 procedures for bottle type water dispensers shall be 

22 based on ‘Energy Star Program Requirements for 

23 Bottled Water Coolers version 1.1’ published by the 

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1 tegral, automatic timer shall not be tested using sec2 tion 4D, ‘Timer Usage,’ of the test criteria. 

3 ‘‘(21) COMMERCIAL HOT FOOD HOLDING CABI4 NETS.—Test procedures for commercial hot food hold5 ing cabinets shall be based on the test procedures de6 scribed in ANSI/ASTM F2140–01 (Test for idle en7 ergy rate-dry test). Interior volume shall be based on 

8 the method shown in the Environmental Protection 

9 Agency’s ‘Energy Star Program Requirements for 

10 Commercial Hot Food Holding Cabinets’ as in effect 

11 on August 15, 2003. 

12 ‘‘(22) PORTABLE ELECTRIC SPAS.—Test proce13 dures for portable electric spas shall be based on the 

14 test method for portable electric spas contained in sec15 tion 1604, title 20, California Code of Regulations as 

16 amended on December 3, 2008. When the American 

17 National Standards Institute publishes a test proce18 dure for portable electric spas, the Secretary shall re19 vise the Department of Energy’s procedure.’’. 

20 (4) STANDARDS.—Section 325 of the Energy Pol21 icy and Conservation Act (42 U.S.C. 6295), as 

22 amended by section 211 of this Act, is further amend23 ed by adding after subsection (jj) the following: 

24 ‘‘(kk) BOTTLE TYPE WATER DISPENSERS.—Effective 

25 January 1, 2012, bottle-type water dispensers designed for 

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1 dispensing both hot and cold water shall not have standby 

2 energy consumption greater than 1.2 kilowatt-hours per 

3 day. 

4 ‘‘(ll) COMMERCIAL HOT FOOD HOLDING CABINETS.— 

5 Effective January 1, 2012, commercial hot food holding 

6 cabinets with interior volumes of 8 cubic feet or greater 

7 shall have a maximum idle energy rate of 40 watts per 

8 cubic foot of interior volume. 

9 ‘‘(mm) PORTABLE ELECTRIC SPAS.—Effective Janu10 ary 1, 2012, portable electric spas shall not have a normalized standby power greater than 5(V2 11 ⁄3) Watts where V=the 

12 fill volume in gallons. 

13 ‘‘(nn) REVISIONS.—The Secretary of Energy shall con14 sider revisions to the standards in subsections (kk), (ll), and 

15 (mm) in accordance with subsection (o) and publish a final 

16 rule no later than January 1, 2013 establishing such revised 

17 standards, or make a finding that no revisions are tech18 nically feasible and economically justified. Any such revised 

19 standards shall take effect January 1, 2016.’’. 

20 (b) COMMERCIAL FURNACE EFFICIENCY STAND21 ARDS.—Section 342(a) of the Energy Policy and Conserva22 tion Act (42 U.S.C. 6312(a)) is amended by inserting after 

23 paragraph (10) the following new paragraph: 

24 ‘‘(11) WARM AIR FURNACES.—Each warm air 

25 furnace with an input rating of 225,000 Btu per hour 

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1 or more and manufactured after January 1, 2011, 

2 shall meet the following standard levels: 

3 ‘‘(A) GAS-FIRED UNITS.— 

4 ‘‘(i) Minimum thermal efficiency of 80 

5 percent. 

6 ‘‘(ii) Include an interrupted or inter7 mittent ignition device. 

8 ‘‘(iii) Have jacket losses not exceeding 

9 0.75 percent of the input rating. 

10 ‘‘(iv) Have either power venting or a 

11 flue damper. 

12 ‘‘(B) OIL-FIRED UNITS.— 

13 ‘‘(i) Minimum thermal efficiency of 81 

14 percent. 

15 ‘‘(ii) Have jacket losses not exceeding 

16 0.75 percent of the input rating. 

17 ‘‘(iii) Have either power venting or a 

18 flue damper.’’. 

19 SEC. 213. APPLIANCE EFFICIENCY DETERMINATIONS AND 

20 PROCEDURES. 

21 (a) DEFINITION OF ENERGY CONSERVATION STAND22 ARD.—Section 321(6) of the Energy Policy and Conserva23 tion Act (42 U.S.C. 6291(6)) is amended to read as follows: 

24 ‘‘(6) ENERGY CONSERVATION STANDARD.— 

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1 ‘‘(A) IN GENERAL.—The term ‘energy con2 servation standard’ means 1 or more perform3 ance standards that— 

4 ‘‘(i) for covered products (excluding 

5 clothes washers, dishwashers, showerheads, 

6 faucets, water closets, and urinals), pre7 scribe a minimum level of energy efficiency 

8 or a maximum quantity of energy use, de9 termined in accordance with test procedures 

10 prescribed under section 323; 

11 ‘‘(ii) for showerheads, faucets, water 

12 closets, and urinals, prescribe a minimum 

13 level of water efficiency or a maximum 

14 quantity of water use, determined in ac15 cordance with test procedures prescribed 

16 under section 323; and 

17 ‘‘(iii) for clothes washers and dish18 washers— 

19 ‘‘(I) prescribe a minimum level of 

20 energy efficiency or a maximum quan21 tity of energy use, determined in ac22 cordance with test procedures pre23 scribed under section 323; and 

24 ‘‘(II) may include a minimum 

25 level of water efficiency or a maximum 

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1 quantity of water use, determined in 

2 accordance with those test procedures. 

3 ‘‘(B) INCLUSIONS.—The term ‘energy con4 servation standard’ includes— 

5 ‘‘(i) 1 or more design requirements, if 

6 the requirements were established— 

7 ‘‘(I) on or before the date of enact8 ment of this subclause; 

9 ‘‘(II) as part of a direct final rule 

10 under section 325(p)(4); or 

11 ‘‘(III) as part of a final rule pub12 lished on or after January 1, 2012, 

13 and 

14 ‘‘(ii) any other requirements that the 

15 Secretary may prescribe under section 

16 325(r). 

17 ‘‘(C) EXCLUSION.—The term ‘energy con18 servation standard’ does not include a perform19 ance standard for a component of a finished cov20 ered product, unless regulation of the component 

21 is specifically authorized or established pursuant 

22 to this title.’’. 

23 (b) ADOPTING CONSENSUS TEST PROCEDURES AND

24 TEST PROCEDURES IN USE ELSEWHERE.—Section 323(b) 

25 of the Energy Policy and Conservation Act (42 U.S.C. 

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1 6293(b)), as amended by sections 211 and 212 of this Act, 

2 is further amended by adding the following new paragraph 

3 after paragraph (22): 

4 ‘‘(23) CONSENSUS AND ALTERNATE TEST PROCE5 DURES.— 

6 ‘‘(A) RECEIPT OF JOINT RECOMMENDATION

7 OR ALTERNATE TESTING PROCEDURE.—On re8 ceipt of— 

9 ‘‘(i) a statement that is submitted 

10 jointly by interested persons that are fairly 

11 representative of relevant points of view (in12 cluding representatives of manufacturers of 

13 covered products, States, and efficiency ad14 vocates), as determined by the Secretary, 

15 and contains recommendations with respect 

16 to the testing procedure for a covered prod17 uct; or 

18 ‘‘(ii) a submission of a testing proce19 dure currently in use for a covered product 

20 by a State, nation, or group of nations— 

21 ‘‘(I) if the Secretary determines 

22 that the recommended testing proce23 dure contained in the statement or sub24 mission is in accordance with sub25 section (b)(3), the Secretary may issue 

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1 a final rule that establishes an energy 

2 or water conservation testing procedure 

3 that is published simultaneously with 

4 a notice of proposed rulemaking that 

5 proposes a new or amended energy or 

6 water conservation testing procedure 

7 that is identical to the testing proce8 dure established in the final rule to es9 tablish the recommended testing proce10 dure (referred to in this paragraph as 

11 a ‘direct final rule’); or 

12 ‘‘(II) if the Secretary determines 

13 that a direct final rule cannot be 

14 issued based on the statement or sub15 mission, the Secretary shall publish a 

16 notice of the determination, together 

17 with an explanation of the reasons for 

18 the determination. 

19 ‘‘(B) PUBLIC COMMENT.—The Secretary 

20 shall solicit public comment for a period of at 

21 least 110 days with respect to each direct final 

22 rule issued by the Secretary under subparagraph 

23 (A)(ii)(I). 

24 ‘‘(C) WITHDRAWAL OF DIRECT FINAL

25 RULES.— 

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1 ‘‘(i) IN GENERAL.—Not later than 120 

2 days after the date on which a direct final 

3 rule issued under subparagraph (A)(ii)(I) is 

4 published in the Federal Register, the Sec5 retary shall withdraw the direct final rule 

6 if— 

7 ‘‘(I) the Secretary receives 1 or 

8 more adverse public comments relating 

9 to the direct final rule under subpara10 graph (B)or any alternative joint rec11 ommendation; and 

12 ‘‘(II) based on the rulemaking 

13 record relating to the direct final rule, 

14 the Secretary determines that such ad15 verse public comments or alternative 

16 joint recommendation may provide a 

17 reasonable basis for withdrawing the 

18 direct final rule under paragraph (3) 

19 or any other applicable law. 

20 ‘‘(ii) ACTION ON WITHDRAWAL.—On 

21 withdrawal of a direct final rule under 

22 clause (i), the Secretary shall— 

23 ‘‘(I) proceed with the notice of 

24 proposed rulemaking published simul25 taneously with the direct final rule as 

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1 described in subparagraph (A)(ii)(I); 

2 and 

3 ‘‘(II) publish in the Federal Reg4 ister the reasons why the direct final 

5 rule was withdrawn. 

6 ‘‘(iii) TREATMENT OF WITHDRAWN DI7 RECT FINAL RULES.—A direct final rule 

8 that is withdrawn under clause (i) shall not 

9 be considered to be a final rule for purposes 

10 of subsection (b). 

11 ‘‘(D) EFFECT OF PARAGRAPH.—Nothing in 

12 this paragraph authorizes the Secretary to issue 

13 a direct final rule based solely on receipt of more 

14 than 1 statement containing recommended test 

15 procedures relating to the direct final rule.’’. 

16 (c) UPDATING TELEVISION TEST METHODS.—Section 

17 323(b) of the Energy Policy and Conservation Act (42 

18 U.S.C. 6293(b)), as amended by sections 211 and 212 of 

19 this Act, and subsection (b) of this section, is further amend20 ed by adding at the end the following new paragraph: 

21 ‘‘(24) TELEVISIONS.—(A) On the date of enact22 ment of this paragraph, Appendix H to Subpart B of 

23 Part 430 of the United States Code of Federal Regu24 lations, ‘Uniform Test Method for Measuring the En25 ergy Consumption of Television Sets’, is repealed. 

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1 ‘‘(B) No later than 12 months after the date of 

2 enactment of this paragraph the Secretary shall pub3 lish in the Federal Register a final rule prescribing 

4 a new test method for televisions.’’. 

5 (d) CRITERIA FOR PRESCRIBING NEW OR AMENDED

6 STANDARDS.—(1) Section 325(o)(2)(B)(i) of the Energy 

7 Policy and Conservation Act (42 U.S.C. 6295(o)(2)(B)(i)) 

8 is amended as follows: 

9 (A) By striking ‘‘and’’ at the end of subclause 

10 (VI). 

11 (B) By redesignating subclause (VII) as sub12 clause (XI). 

13 (C) By inserting the following new subclauses 

14 after subclause (VI): 

15 ‘‘(VII) the estimated value of the carbon dioxide 

16 and other emission reductions that will be achieved by 

17 virtue of the higher energy efficiency of the covered 

18 products resulting from the imposition of the stand19 ard; 

20 ‘‘(VIII) the estimated impact of standards for a 

21 particular product on average consumer energy 

22 prices; 

23 ‘‘(IX) the increased energy efficiency that may be 

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1 nologies or capabilities in the covered products, if ap2 plicable in the determination of the Secretary; 

3 ‘‘(X) the availability in the United States or in 

4 other nations of examples or prototypes of covered 

5 products that achieve significantly higher efficiency 

6 standards for energy or for water; and’’. 

7 (2) Section 325(o)(2)(B)(iii) of such Act is amended 

8 as follows: 

9 (A) By striking ‘‘three’’ and inserting ‘‘5’’. 

10 (B) By inserting after the first sentence the fol11 lowing ‘‘For products with an average expected useful 

12 life of less than 5 years, such rebuttable presumption 

13 shall be determined utilizing 75 percent of the prod14 uct’s average expected useful life as a multiplier in15 stead of 5.’’. 

16 (C) By striking the last sentence and inserting 

17 the following: ‘‘Such a presumption may be rebutted 

18 only if the Secretary finds, based on clear, con19 vincing, and reliable evidence, that— 

20 ‘‘(I) such standard level would cause serious and 

21 unavoidable hardship to the average consumer of the 

22 product, or to manufacturers supplying a significant 

23 portion of the market for the product, that substan24 tially outweighs the standard level’s benefits; 

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1 ‘‘(II) the standard and implementing regulations 

2 cannot be designed to avoid or mitigate the hardship 

3 identified under subclause (I), through the adoption of 

4 regional standards consistent with paragraph (6) of 

5 this subsection, or other reasonable means consistent 

6 with this part; 

7 ‘‘(III) the same or substantially similar hardship 

8 would not occur under a standard adopted in the ab9 sence of the presumption, but that otherwise meets the 

10 requirements of this section; and 

11 ‘‘(IV) the hardship cannot be avoided or miti12 gated pursuant the procedures specified in section 504 

13 of the Department of Energy Organization Act (42 

14 U.S.C. 7194). 

15 A determination by the Secretary that the criteria trig16 gering such presumption are not met, or that the criterion 

17 for rebutting the presumption are met shall not be taken 

18 into consideration in the Secretary’s determination of 

19 whether a standard is economically justified.’’. 

20 (e) OBTAINING APPLIANCE INFORMATION FROM MANU21 FACTURERS.—Section 326(d) of the Energy Policy and 

22 Conservation Act (42 U.S.C. 6295(d)) is amended to read 

23 as follows: 

24 ‘‘(d) INFORMATION REQUIREMENTS.—(1) For pur25 poses of carrying out this part, the Secretary shall publish 

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1 proposed regulations not later than one year after the date 

2 of enactment of the American Clean Energy and Security 

3 Act of 2009, and after receiving public comment, final regu4 lations not later than 18 months from such date of enact5 ment under this part or other provision of law administered 

6 by the Secretary, which shall require each manufacturer of 

7 a covered product to submit information or reports to the 

8 Secretary on an annual basis in a form adopted by the 

9 Secretary. Such reports shall include information or data 

10 with respect to— 

11 ‘‘(A) the manufacturers’ compliance with all re12 quirements applicable pursuant to this part; 

13 ‘‘(B) the economic impact of any proposed en14 ergy conservation standard; 

15 ‘‘(C) the manufacturers’ annual shipments of 

16 each class or category of covered products, organized, 

17 to the maximum extent practicable, by— 

18 ‘‘(i) energy efficiency, energy use, and, if 

19 applicable, water use; 

20 ‘‘(ii) the presence or absence of such effi21 ciency related or energy consuming operational 

22 characteristics or components as the Secretary 

23 determines are relevant for the purposes of car24 rying out this part; and 

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1 ‘‘(iii) the State or regional location of sale, 

2 for covered products for which the Secretary may 

3 adopt regional standards; and 

4 ‘‘(D) such other categories of information as the 

5 Secretary deems relevant to carry out this part, in6 cluding such other information as may be necessary 

7 to establish and revise test procedures, labeling rules, 

8 and energy conservation standards and to insure 

9 compliance with the requirements of this part. 

10 ‘‘(2) In adopting regulations under this subsection, the 

11 Secretary shall consider existing public sources of informa12 tion, including nationally recognized certification pro13 grams of trade associations. 

14 ‘‘(3) The Secretary shall exercise authority under this 

15 section in a manner designed to minimize unnecessary bur16 dens on manufacturers of covered products. 

17 ‘‘(4) To the extent that they do not conflict with the 

18 duties of the Secretary in carrying out this part, the provi19 sions of section 11(d) of the Energy Supply and Environ20 mental Coordination Act of 1974 (15 U.S.C. 796(d)) shall 

21 apply with respect to information obtained under this sub22 section to the same extent and in the same manner as they 

23 apply with respect to other energy information obtained 

24 under such section.’’. 

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1 (f) STATE WAIVER.—Section 327(c) of the Energy Pol2 icy and Conservation Act (42 U.S.C. 6297(c)), as amended 

3 by section 161(a)(19) of this Act, is further amended by 

4 adding at the end the following: 

5 ‘‘(12) is a regulation concerning standards for 

6 hot food holding cabinets, drinking water dispensers 

7 and portable electric spas adopted by the California 

8 Energy Commission on or before January 1, 2013.’’. 

9 (g) WAIVER OF FEDERAL PREEMPTION.—Paragraph 

10 (1) of section 327(d) of the Energy Policy and Conservation 

11 Act (42 U.S.C. 6297(d)) is amended as follows: 

12 (1) In subparagraph (A) by striking ‘‘State regu13 lation’’ each place it appears and inserting ‘‘State 

14 statute or regulation’’. 

15 (2) In subparagraph (B) by adding at the end 

16 the following new sentence: ‘‘In making such a find17 ing, the Secretary may not reject a petition for fail18 ure of the petitioning State or river basin commission 

19 to produce confidential information maintained by 

20 any manufacturer or distributor, or group or associa21 tion of manufacturers or distributors, and which the 

22 petitioning party does not have the legal right to ob23 tain.’’. 

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1 (3) In clause (ii) of subparagraph (C) by strik2 ing ‘‘costs’’ each place it appears and inserting ‘‘esti3 mated costs’’. 

4 (4) In subparagraph (C) by striking ‘‘within the 

5 context of the State’s energy plan and forecast, and,’’. 

6 (h) INCLUSION OF CARBON OUTPUT ON APPLIANCE

7 ‘‘ENERGYGUIDE’’ LABELS.—(1) Section 324(a)(2) of the 

8 Energy Policy and Conservation Act (42 U.S.C. 

9 6294(a)(2)) is amended by adding the following at the end: 

10 ‘‘(I)(i) Not later than 90 days after the date of enact11 ment of this subparagraph, the Commission shall initiate 

12 a rulemaking to implement the additional labeling require13 ments specified in subsection (c)(1)(C) of this section with 

14 an effective date for the revised labeling requirement not 

15 later than 12 months from issuance of the final rule. 

16 ‘‘(ii) Not later than 24 months after the date of enact17 ment of this subparagraph, the Commission shall complete 

18 the rulemaking initiated under clause (i). 

19 ‘‘(iii) Not later than 90 days after issuance of the final 

20 rule as provided in this subparagraph, the Secretary shall 

21 issue calculation methods required to effectuate the labeling 

22 requirements specified in subsection (c)(1)(C) of this sec23 tion.’’. 

24 (2) Section 324(c)(1) of the Energy Policy and Con25 servation Act (42 U.S.C. 6294(c)(1)) is amended— 

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1 (A) by striking ‘‘and’’ at the end of subpara2 graph (A); 

3 (B) by striking the period at the end of subpara4 graph (B) and inserting a semicolon; and 

5 (C) by adding at the end the following new sub6 paragraphs: 

7 ‘‘(C) for products or groups of products pro8 viding a comparable function (including the group of 

9 products comprising the heating function of heat 

10 pumps and furnaces) among covered products listed 

11 in paragraphs (3), (4), (5), (8), (9), (10), and (11) 

12 of section 322(a) of this part, and others designated 

13 by the Secretary, the estimated total annual atmos14 pheric carbon dioxide emissions (or their equivalent 

15 in other greenhouse gases) associated with, or caused 

16 by, the product, calculated utilizing— 

17 ‘‘(i) national average energy use for the 

18 product including energy consumed at the point 

19 of end use based on test procedures developed 

20 under section 323 of this part; 

21 ‘‘(ii) national average energy consumed or 

22 lost in the production, generation, transpor23 tation, storage, and distribution of energy to the 

24 point of end use; and 

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1 ‘‘(iii) any direct emissions of greenhouse 

2 gases from the product during normal use; 

3 ‘‘(D) in determining the national average 

4 energy consumption and total annual atmos5 pheric carbon dioxide emissions, the Secretary 

6 shall utilize Federal Government sources, includ7 ing the Energy Information Administration An8 nual Energy Review, the Environmental Protec9 tion Agency eGRID data base, Environmental 

10 Protection Agency AP–42 Emission Factors as 

11 amended, and other sources determined to be ap12 propriate by the Secretary; and 

13 ‘‘(E) information presenting, for each prod14 uct (or group of products providing the com15 parable function) identified in section (c)(1)(C) 

16 of this section, the estimated annual carbon diox17 ide emissions calculated within the range of 

18 emissions calculated for all models of the product 

19 or group according to its function, including 

20 those models consuming fuels and those models 

21 not consuming fuels.’’. 

22 (i) PERMITTING STATES TO SEEK INJUNCTIVE EN23 FORCEMENT.—(1) Section 334 of the Energy Policy and 

24 Conservation Act (42 U.S.C. 6304) is amended to read as 

25 follows: 

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1 ‘‘SEC. 334. JURISDICTION AND VENUE. 

2 ‘‘(a) JURISDICTION.—The United States district courts 

3 shall have jurisdiction to restrain— 

4 ‘‘(1) any violation of section 332; and 

5 ‘‘(2) any person from distributing in commerce 

6 any covered product which does not comply with an 

7 applicable rule under section 324 or 325. 

8 ‘‘(b) AUTHORITY.—Any action referred to in sub9 section (a) shall be brought by the Commission or by the 

10 attorney general of a State in the name of the State, except 

11 that— 

12 ‘‘(1) any such action to restrain any violation of 

13 section 332(a)(3) which relates to requirements pre14 scribed by the Secretary or any violation of section 

15 332(a)(4) which relates to request of the Secretary 

16 under section 326(b)(2) shall be brought by the Sec17 retary; and 

18 ‘‘(2) any violation of section 332(a)(5) or 

19 332(a)(7) shall be brought by the Secretary or by the 

20 attorney general of a State in the name of the State. 

21 ‘‘(c) VENUE AND SERVICE OF PROCESS.—Any such ac22 tion may be brought in the United States district court for 

23 a district wherein any act, omission, or transaction consti24 tuting the violation occurred, or in such court of the district 

25 wherein the defendant is found or transacts business. In 

26 any action under this section, process may be served on a 

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1 defendant in any other district in which the defendant re2 sides or may be found.’’. 

3 (2) The item relating to section 334 in the table of 

4 contents for such Act is amended to read as follows: 

‘‘Sec. 334. Jurisdiction and venue.’’. 

5 (j) TREATMENT OF APPLIANCES WITHIN BUILDING

6 CODES.—(1) Section 327(f)(3) of the Energy Policy and 

7 Conservation Act (42 U.S.C. 6297(f)(3)) is amended by 

8 striking subparagraphs (B) through (G) and inserting the 

9 following: 

10 ‘‘(B) The code meets at least one of the following 

11 requirements: 

12 ‘‘(i) The code does not require that the cov13 ered product have an energy efficiency exceed14 ing— 

15 ‘‘(I) the applicable energy conservation 

16 standard established in or prescribed under 

17 section 325; 

18 ‘‘(II) the level required by a regulation 

19 of that State for which the Secretary has 

20 issued a rule granting a waiver under sub21 section (d) of this section; or 

22 ‘‘(III) the required level established in 

23 the International Energy Conservation Code 

24 or in a standard of the American Society of 

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1 tioning Engineers, or by the Secretary pur2 suant to section 304 of the Energy Con3 servation and Production Act. 

4 ‘‘(ii) If the code uses one or more baseline 

5 building designs against which all submitted 

6 building designs are to be evaluated and such 

7 baseline building designs contain a covered prod8 uct subject to an energy conservation standard 

9 established in or prescribed under section 325, 

10 the baseline building designs are based on an ef11 ficiency level for such covered product which 

12 meets but does not exceed one of the levels speci13 fied in clause (i). 

14 ‘‘(iii) If the code sets forth one or more op15 tional combinations of items which meet the en16 ergy consumption or conservation objective, in at 

17 least one combination that the State has found 

18 to be reasonably achievable using commercially 

19 available technologies the efficiency of the covered 

20 product meets but does not exceed one of the lev21 els specified in clause (i). 

22 ‘‘(C) The credit to the energy consumption or 

23 conservation objective allowed by the code for install24 ing covered products having energy efficiencies exceed25 ing one of the levels specified in subparagraph (B)(i) 

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1 is on a one-for-one equivalent energy use or equiva2 lent energy cost basis, taking into account the typical 

3 lifetime of the product. 

4 ‘‘(D) The energy consumption or conservation 

5 objective is specified in terms of an estimated total 

6 consumption of energy (which may be calculated from 

7 energy loss- or gain-based codes) utilizing an equiva8 lent amount of energy (which may be specified in 

9 units of energy or its equivalent cost) and equivalent 

10 lifetimes. 

11 ‘‘(E) The estimated energy use of any covered 

12 product permitted or required in the code, or used in 

13 calculating the objective, is determined using the ap14 plicable test procedures prescribed under section 323, 

15 except that the State may permit the estimated energy 

16 use calculation to be adjusted to reflect the conditions 

17 of the areas where the code is being applied if such 

18 adjustment is based on the use of the applicable test 

19 procedures prescribed under section 323 or other tech20 nically accurate documented procedure.’’. 

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 cov25 ered products with efficiencies exceeding the levels and remstockstill on PROD1PC66 with BILLS

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1 quirements specified in paragraph (3)(B), such requirement 

2 of the building code shall not be applicable unless the Sec3 retary has granted a waiver for such requirement under 

4 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 date 

8 of enactment of this Act, the Secretary of Energy, in con9 sultation with the Administrator, shall establish a program 

10 to be known as the ‘‘Best-in-Class Appliances Deployment 

11 Program’’ to— 

12 (1) provide bonus payments to retailers or dis13 tributors under subsection (c) for sales of best-in-class 

14 high-efficiency household appliance models, high-effi15 ciency installed building equipment, and high-effi16 ciency consumer electronics, with the goal of reducing 

17 life-cycle costs for consumers, encouraging innovation, 

18 and maximizing energy savings and public benefit; 

19 (2) provide bounties under subsection (d) to re20 tailers for the replacement, retirement, and recycling 

21 of old, inefficient, and environmentally harmful prod22 ucts; and 

23 (3) provide premium awards under subsection 

24 (e) to manufacturers for developing and producing 

25 new Superefficient Best-in-Class Products. 

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1 (b) DESIGNATION OF BEST-IN-CLASS PRODUCT MOD2 ELS.— 

3 (1) IN GENERAL.—The Secretary of Energy shall 

4 designate product models of appliances, equipment, or 

5 electronics as Best-in-Class Product models. The Sec6 retary shall publicly announce the Best-in-Class 

7 Product models designated under this subsection. The 

8 Secretary shall define product classes broadly and, ex9 cept as provided in paragraph (2), shall designate as 

10 Best-in-Class Product models no more than the most 

11 efficient 10 percent of the commercially available 

12 product models in a class that demonstrate, as a 

13 group, a distinctly greater energy efficiency than the 

14 average energy efficiency of that class of appliances, 

15 equipment, or electronics. In designating models, the 

16 Secretary shall— 

17 (A) identify commercially available models 

18 in the relevant class of products; 

19 (B) identify the subgroup of those models 

20 that share the distinctly higher energy-efficiency 

21 characteristics that warrant designation as best22 in-class; and 

23 (C) add other models in that class to the list 

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1 ciency characteristics on which the designation 

2 was made. 

3 (2) PERCENTAGE EXCEPTION.—If there are fewer 

4 than 10 product models in a class of products, the 

5 Secretary may designate one or more of such models 

6 as Best-in-Class Products. 

7 (3) REVIEW OF BEST-IN-CLASS STANDARDS.— 

8 The Secretary shall review annually the product-spe9 cific criteria for designating, and the product models 

10 that qualify as, Best-in-Class Products and, after no11 tice and a 30-day comment period, make upwards ad12 justments in the efficiency criteria as necessary to 

13 maintain an appropriate ratio of such product mod14 els to the total number of product models in the prod15 uct class. 

16 (c) BONUSES FOR SALES OF BEST-IN-CLASS PROD17 UCTS.— 

18 (1) IN GENERAL.—The Secretary of Energy shall 

19 make bonus payments to retailers or, as provided in 

20 paragraph (5)(B), distributors for the sale of Best-in21 Class Products. 

22 (2) BONUS PROGRAM.—The Secretary shall— 

23 (A) publicly announce the availability and 

24 amount of the bonus to be paid for each sale of 

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1 a Best-in-Class Product of a model designated 

2 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 ELIGI9 BILITY.—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 pursuant 

14 to subsection (e); 

15 (B) announce any change in the bonus pay16 ment as necessary to increase the market share 

17 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 the 

21 original level, for the sale of any models that 

22 previously qualified as Best-in-Class Products 

23 but do not qualify at the new level, for the re24 mainder of the 3-year period announced with the 

25 original designation. 

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1 (4) SIZE OF INDIVIDUAL BONUS PAYMENTS.—(A) 

2 The size of each bonus payment under this subsection 

3 shall be the product of— 

4 (i) an amount determined by the Sec5 retary; and 

6 (ii) the difference in energy consump7 tion between the Best-in-Class Product and 

8 the average 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 Sec17 retary shall ensure that not more than 1 bonus pay18 ment is provided under this subsection for each Best19 in-Class Product. 

20 (B) The Secretary may make distributors eligible 

21 to receive bonus payments under this subsection for 

22 sales that are not to the final end-user, to the extent 

23 that the Secretary determines that for a particular 

24 product category distributors are well situated to in25 crease sales of Best-in-Class Products. 

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1 (d) BOUNTIES FOR REPLACEMENT, RETIREMENT, AND

2 RECYCLING OF EXISTING LOW-EFFICIENCY PRODUCTS.— 

3 (1) IN GENERAL.—The Secretary of Energy shall 

4 make bounty payments to retailers for the replace5 ment, retirement, and recycling of older operating 

6 low-efficiency products that might otherwise continue 

7 in operation. 

8 (2) BOUNTIES.—Bounties shall be payable upon 

9 documentation that the sale of a Best-in-Class Prod10 uct was accompanied by the replacement, retirement, 

11 and recycling of— 

12 (A) an inefficient but still-functioning prod13 uct; or 

14 (B) a nonfunctioning product containing a 

15 refrigerant, 

16 by the consumer to whom the Best-in-Class Product 

17 was sold. 

18 (3) AMOUNT.— 

19 (A) FUNCTIONING PRODUCTS.—The bounty 

20 payment payable under this subsection for a 

21 product described in paragraph (2)(A) shall be 

22 based on the difference between the estimated en23 ergy use of the product replaced and the energy 

24 use of an average new product in the product 

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1 class, over the estimated remaining lifetime of 

2 the product that was replaced. 

3 (B) NONFUNCTIONING PRODUCTS CON4 TAINING REFRIGERANTS.—The bounty payment 

5 payable under this subsection for a product de6 scribed in paragraph (2)(B) shall be in the 

7 amount that the Secretary of Energy, in con8 sultation with the Administrator, determines is 

9 sufficient to promote the recycling of such prod10 ucts, up to the amount of bounty for a com11 parable product described in paragraph (2)(A). 

12 (4) RETIREMENT.—The Secretary shall ensure 

13 that no product for which a bounty is paid under this 

14 subsection is returned to active service, but that it is 

15 instead destroyed, and recycled to the extent feasible. 

16 (5) RECYCLING APPLIANCES CONTAINING RE17 FRIGERANTS.—Exclusively for the purpose of imple18 menting the bounty payment program for products 

19 containing a refrigerant under this section, the Ad20 ministrator shall establish standards for environ21 mentally responsible methods of recycling and dis22 posal of refrigerant-containing appliances that, at a 

23 minimum, meet the requirements set by the Respon24 sible Appliance Disposal (RAD) Program for refrig25 erant disposal. The Secretary shall ensure that such 

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1 standards are met before a bounty payment is made 

2 under this subsection for a product containing a re3 frigerant. Nothing in this section shall be interpreted 

4 to alter the requirements of section 608 of the Clean 

5 Air Act or to relieve any person from complying with 

6 those requirements. 

7 (e) PREMIUM AWARDS FOR DEVELOPMENT AND PRO8 DUCTION OF SUPEREFFICIENT BEST-IN-CLASS PROD9 UCTS.— 

10 (1) IN GENERAL.—(A) The Secretary of Energy 

11 shall provide premium awards to manufacturers for 

12 the development and production of Superefficient 

13 Best-in-Class Products. The Secretary shall set and 

14 periodically revise standards for eligibility of prod15 ucts for designation as a Superefficient Best-in-Class 

16 Product. 

17 (B) The Secretary may establish a standard for 

18 a Superefficient Best-in-Class Product even if no 

19 product meeting that standard exists, if the Secretary 

20 has reasonable grounds to conclude that a mass-pro21 ducible product could be made to meet that standard. 

22 (C) The Secretary may also establish a Super23 efficient Best-in-Class Product standard that is met 

24 by one or more existing Best-in-Class Product models, 

25 if those product models have distinct energy efficiency 

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1 attributes and performance characteristics that make 

2 them significantly better than other product models 

3 qualifying as best-in-class. The Secretary may not 

4 designate as Superefficient Best-in-Class Products 

5 under this subparagraph models that represent more 

6 than 10 percent of the currently qualifying Best-in7 Class Product models. 

8 (2) PREMIUM AWARDS.—(A) The premium 

9 award payment provided to a manufacturer under 

10 this subsection shall be in addition to any bonus pay11 ments made under subsection (c). 

12 (B) The amount of the premium award paid per 

13 unit of Superefficient Best-in-Class Products sold to 

14 retailers or distributors shall be the product of— 

15 (i) an amount determined by the Secretary; 

16 and 

17 (ii) the difference in energy consumption be18 tween the Superefficient Best-in-Class Product 

19 and the average product in the product class. 

20 (C) The Secretary shall determine the amount 

21 under subparagraph (B)(i) for each product type, in 

22 consultation with State and utility efficiency pro23 gram administrators as well as the Administrator, 

24 based on consideration of the present value to the Na25 tion of the energy (and water or other resources or inmstockstill on PROD1PC66 with BILLS

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1 puts) saved over the useful life of the product. The 

2 Secretary may also take into consideration the meth3 ods used to increase sales of qualifying products in 

4 determining such amount. 

5 (D) The Secretary may adjust the value de6 scribed in subparagraph (C) upward or downward as 

7 appropriate, including based on the effect of the pre8 mium awards on the sales of products in different 

9 classes that may be affected by the program under 

10 this subsection. 

11 (E) Premium award payments shall be applied 

12 to sales of any Superefficient Best-in-Class Product 

13 for the first 3 years after designation as a Supereffi14 cient Best-in-Class Product. 

15 (3) COORDINATION OF INCENTIVES.—No product 

16 for which Federal tax credit is received under section 

17 45M of the Internal Revenue Code of 1986 shall be eli18 gible to receive premium award payments pursuant 

19 to this subsection. 

20 (f) REPORTING.—The Secretary of Energy shall re21 quire, as a condition of receiving a bonus, bounty, or pre22 mium award under this section, that a report containing 

23 the following documentation be provided: 

24 (1) For retailers and distributors, the number of 

25 units sold within each product type, and model-spemstockstill on PROD1PC66 with BILLS

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1 cific wholesale purchase prices and retail sale prices, 

2 on a monthly basis. 

3 (2) For manufacturers, model-specific energy 

4 consumption data. 

5 (3) For manufacturers, on an immediate basis, 

6 information concerning any product design or func7 tion changes that affect the energy consumption of the 

8 unit. 

9 (4) The methods used to increase the sales of 

10 qualifying products. 

11 (g) MONITORING AND VERIFICATION PROTOCOLS.— 

12 The Secretary of Energy shall establish monitoring and 

13 verification protocols for energy consumption tests for each 

14 product model and for sales of energy-efficient models. 

15 (h) DISCLOSURE.—The Secretary of Energy may re16 quire that retailers and distributors disclose publicly and 

17 to consumers their participation in the program under this 

18 section. 

19 (i) COST-EFFECTIVENESS REQUIREMENT.— 

20 (1) REQUIREMENT.—The Secretary of Energy 

21 shall make cost-effectiveness a top priority in design22 ing the program under, and administering, this sec23 tion, except that the cost-effectiveness of providing 

24 premium awards to manufacturers under subsection 

25 (e), in aggregate, may be lower by this measure than 

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1 that of the bonuses and bounties to retailers and dis2 tributors under subsections (c) and (d). 

3 (2) DEFINITIONS.—In this subsection: 

4 (A) COST-EFFECTIVENESS.—The term ‘‘cost5 effectiveness’’ means a measure of aggregate sav6 ings in the cost of energy over the lifetime of a 

7 product in relation to the cost to the Secretary 

8 of the bonuses, bounties, and premium awards 

9 provided under this section for a product. 

10 (B) SAVINGS.—The term ‘‘savings’’ means 

11 the cumulative megawatt-hours of electricity or 

12 million British thermal units of other fuels saved 

13 by a product during the projected useful life of 

14 the product, in comparison to projected energy 

15 consumption of the average product in the same 

16 class, taking into consideration the impact of 

17 any documented measures to replace, retire, and 

18 recycle low-efficiency products at the time of 

19 purchase of highly-efficient substitutes. 

20 (j) DEFINITIONS.—In this section— 

21 (1) the term ‘‘distributor’’ mean an individual, 

22 organization, or company that sells products in mul23 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 to 

3 end-users; and 

4 (3) the term ‘‘Superefficient Best-in-Class Prod5 uct’’ means a product that— 

6 (A) can be mass produced; and 

7 (B) achieves the highest level of efficiency 

8 that the Secretary of Energy finds can, given the 

9 current state of technology, be produced and sold 

10 commercially to mass-market consumers. 

11 (k) AUTHORIZATION OF APPROPRIATIONS.—There are 

12 authorized to be appropriated $300,000,000 for each of the 

13 fiscal years 2010 through 2014 to the Secretary of Energy 

14 for purposes of this section, of which not more than 10 per15 cent for any fiscal year may be expended on program ad16 ministration. 

17 SEC. 215. WATERSENSE. 

18 (a) IN GENERAL.—There is established within the En19 vironmental Protection Agency a WaterSense program to 

20 identify and promote water efficient products, buildings 

21 and landscapes, and services in order— 

22 (1) to reduce water use; 

23 (2) to reduce the strain on water, wastewater, 

24 and stormwater infrastructure; 

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1 (3) to conserve energy used to pump, heat, trans2 port, and treat water; and 

3 (4) to preserve water resources for future genera4 tions, 

5 through voluntary labeling of, or other forms of communica6 tions about, products, buildings and landscapes, and serv7 ices that meet the highest water efficiency and performance 

8 standards. 

9 (b) DUTIES.—The Administrator shall— 

10 (1) promote WaterSense labeled products, build11 ings and landscapes, and services in the market place 

12 as the preferred technologies and services for— 

13 (A) reducing water use; and 

14 (B) ensuring product and service perform15 ance; 

16 (2) work to enhance public awareness of the 

17 WaterSense label through public outreach, education, 

18 and other means; 

19 (3) establish and maintain performance stand20 ards so that products, buildings and landscapes, and 

21 services labeled with the WaterSense label perform as 

22 well or better than their less efficient counterparts; 

23 (4) publicize the need for proper installation and 

24 maintenance of WaterSense products by a licensed, 

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1 and where certification guidelines exist, WaterSense2 certified professional to ensure optimal performance; 

3 (5) preserve the integrity of the WaterSense label; 

4 (6) regularly review and, when appropriate, up5 date WaterSense criteria for categories of products, 

6 buildings and landscapes, and services, at least once 

7 every four years; 

8 (7) to the extent practical, regularly estimate 

9 and make available to the public the production and 

10 relative market shares of WaterSense labeled products, 

11 buildings and landscapes, and services, at least annu12 ally; 

13 (8) to the extent practical, regularly estimate 

14 and make available to the public the water and en15 ergy savings attributable to the use of WaterSense la16 beled products, buildings and landscapes, and serv17 ices, at least annually; 

18 (9) solicit comments from interested parties and 

19 the public prior to establishing or revising a 

20 WaterSense category, specification, installation cri21 terion, or other criterion (or prior to effective dates 

22 for any such category, specification, installation cri23 terion, or other criterion); 

24 (10) provide reasonable notice to interested par25 ties and the public of any changes (including effective 

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1 dates), on the adoption of a new or revised category, 

2 specification, installation criterion, or other criterion, 

3 along with— 

4 (A) an explanation of changes; and 

5 (B) as appropriate, responses to comments 

6 submitted by interested parties; 

7 (11) provide appropriate lead time (as deter8 mined by the Administrator) prior to the applicable 

9 effective date for a new or significant revision to a 

10 category, specification, installation criterion, or other 

11 criterion, taking into account the timing requirements 

12 of the manufacturing, marketing, training, and dis13 tribution process for the specific product, building 

14 and landscape, or service category addressed; and 

15 (12) identify and, where appropriate, implement 

16 other voluntary approaches in commercial, institu17 tional, residential, municipal, and industrial sectors 

18 to encourage reuse and recycling technologies, improve 

19 water efficiency, or lower water use while meeting, 

20 where applicable, the performance standards estab21 lished under paragraph (3). 

22 (c) AUTHORIZATION OF APPROPRIATIONS.—There are 

23 authorized to be appropriated $7,500,000 for fiscal year 

24 2010, $10,000,000 for fiscal year 2011, $20,000,000 for fis25 cal year 2012, and $50,000,000 for fiscal year 2013 and 

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1 each year thereafter, adjusted for inflation, to carry out this 

2 section. 

3 SEC. 216. FEDERAL PROCUREMENT OF WATER EFFICIENT 

4 PRODUCTS. 

5 (a) DEFINITIONS.—In this section: 

6 (1) AGENCY.—The term ‘‘agency’’ has the mean7 ing given that term in section 7902(a) of title 5, 

8 United States Code. 

9 (2) WATERSENSE PRODUCT OR SERVICE.—The 

10 term ‘‘WaterSense product or service’’ means a prod11 uct or service that is rated for water efficiency under 

12 the WaterSense program. 

13 (3) WATERSENSE PROGRAM.—The term 

14 ‘‘WaterSense program’’ means the program estab15 lished by section 215 of this Act. 

16 (4) FEMP DESIGNATED PRODUCT.—The term 

17 ‘‘FEMP designated product’’ means a product that is 

18 designated under the Federal Energy Management 

19 Program of the Department of Energy as being 

20 among the highest 25 percent of equivalent products 

21 for efficiency. 

22 (5) PRODUCT AND SERVICE.—The terms ‘‘prod23 uct’’ and ‘‘service’’ do not include any water con24 suming product or service designed or procured for 

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1 clude products or services already covered by the Fed2 eral procurement regulations established under section 

3 553 of the National Energy Conservation Policy Act 

4 (42 U.S.C. 8259b). 

5 (b) PROCUREMENT OF WATER EFFICIENT PROD6 UCTS.— 

7 (1) REQUIREMENT.—To meet the requirements of 

8 an agency for a water consuming product or service, 

9 the head of the agency shall, except as provided in 

10 paragraph (2), procure— 

11 (A) a WaterSense product or service; or 

12 (B) a FEMP designated product. 

13 A WaterSense plumbing product should preferably, 

14 when possible, be installed by a licensed and, when 

15 WaterSense certification guidelines exist, WaterSense16 certified plumber or mechanical contractor, and a 

17 WaterSense irrigation system should preferably, when 

18 possible, be installed, maintained, and audited by a 

19 WaterSense-certified irrigation professional to ensure 

20 optimal performance. 

21 (2) EXCEPTIONS.—The head of an agency is not 

22 required to procure a WaterSense product or service 

23 or FEMP designated product under paragraph (1) if 

24 the head of the agency finds in writing that— 

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1 (A) a WaterSense product or service or 

2 FEMP designated product is not cost-effective 

3 over the life of the product, taking energy and 

4 water cost savings into account; or 

5 (B) no WaterSense product or service or 

6 FEMP designated product is reasonably avail7 able that meets the functional requirements of the 

8 agency. 

9 (3) PROCUREMENT PLANNING.—The head of an 

10 agency shall incorporate into the specifications for all 

11 procurements involving water consuming products 

12 and systems, including guide specifications, project 

13 specifications, and construction, renovation, and serv14 ices contracts that include provision of water con15 suming products and systems, and into the factors for 

16 the evaluation of offers received for the procurement, 

17 criteria used for rating WaterSense products and 

18 services and FEMP designated products. The head of 

19 an agency shall consider, to the maximum extent 

20 practicable, additional measures for reducing agency 

21 water consumption, including water reuse tech22 nologies, leak detection and repair, and use of water23 less products that perform similar functions to exist24 ing water-consuming products. 

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1 (c) REGULATIONS.—Not later than 180 days after the 

2 date of enactment of this Act, the Secretary of Energy, 

3 working in coordination with the Administrator, shall issue 

4 guidelines to carry out this section. 

5 SEC. 217. WATER EFFICIENT PRODUCT REBATE PROGRAMS. 

6 (a) DEFINITIONS.—In this section: 

7 (1) ELIGIBLE STATE.—The term ‘‘eligible State’’ 

8 means a State that meets the requirements of sub9 section (b). 

10 (2) RESIDENTIAL WATER EFFICIENT PRODUCT

11 OR SERVICE.—The term ‘‘residential water efficient 

12 product or service’’ means a product or service for a 

13 residence or its landscape that is rated for water effi14 ciency and performance— 

15 (A) by the WaterSense program, where a 

16 WaterSense specification does not exist; or 

17 (B) by a State program and approved by 

18 the Administrator. 

19 Categories of water efficient products and services 

20 may include faucets, irrigation technologies and serv21 ices, point-of-use water treatment devices, reuse and 

22 recycling technologies, toilets, and showerheads. 

23 (3) STATE PROGRAM.—The term ‘‘State pro24 gram’’ means a State program for administering re25 bates or vouchers for consumer purchase of water effimstockstill on PROD1PC66 with BILLS

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1 cient products and services as described in subsection 

2 (b)(1). 

3 (4) WATERSENSE PROGRAM.—The term 

4 ‘‘WaterSense program’’ means the program estab5 lished by section 215 of this Act. 

6 (b) ELIGIBLE STATES.—A State shall be eligible to re7 ceive an allocation under subsection (c) if the State— 

8 (1) establishes (or has established) a State pro9 gram to provide rebates or vouchers to residential 

10 consumers for the purchase of residential water effi11 cient products or services to replace used products of 

12 the same type; 

13 (2) submits an application for the allocation at 

14 such time, in such form, and containing such infor15 mation as the Administrator may require; and 

16 (3) provides assurances satisfactory to the Ad17 ministrator that the State will use the allocation to 

18 supplement, but not supplant, funds made available 

19 to carry out the State program. 

20 (c) AMOUNT OF ALLOCATIONS.— 

21 (1) IN GENERAL.—Subject to paragraph (2), for 

22 each fiscal year, the Administrator shall allocate to 

23 each eligible State to carry out subsection (d) an 

24 amount equal to the product obtained by multiplying 

25 the amount made available under subsection (g) for 

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1 the fiscal year by the ratio that the population of the 

2 State in the most recent calendar year for which data 

3 are available bears to the total population of all eligi4 ble States in that calendar year. 

5 (2) MINIMUM ALLOCATIONS.—For each fiscal 

6 year, the amounts allocated under this subsection 

7 shall be adjusted proportionately so that no eligible 

8 State is allocated a sum that is less than an amount 

9 determined by the Administrator. 

10 (d) USE OF ALLOCATED FUNDS.—Funds allocated to 

11 a State under subsection (c) may be used to pay up to 50 

12 percent of the cost of establishing and carrying out a State 

13 program. 

14 (e) FIXTURE RECYCLING.—States are encouraged to 

15 promote or implement fixture recycling programs to man16 age the disposal of older fixtures replaced due to the rebate 

17 program under this section. 

18 (f) ISSUANCE OF REBATES.—Rebates or vouchers may 

19 be provided to residential consumers that meet the require20 ments of the State program. The State may issue all rebates 

21 or vouchers directly to residential consumers or, with ap22 proval of the Administrator, delegate some or all rebate and 

23 voucher administration to other organizations including, 

24 but not limited to, local governments, municipal water au25 thorities, and water utilities. The amount of a rebate or 

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1 voucher shall be determined by the State, taking into con2 sideration— 

3 (1) the amount of the allocation to the State 

4 under subsection (c); 

5 (2) the amount of any Federal or State tax in6 centive available for the purchase of the residential 

7 water efficient product or service; 

8 (3) the amount necessary to change consumer be9 havior to purchase water efficient products and serv10 ices; and 

11 (4) the consumer expenditures for onsite prepa12 ration, assembly, and original installation of the 

13 product. 

14 (g) AUTHORIZATION OF APPROPRIATIONS.—There are 

15 authorized to be appropriated to the Administrator to carry 

16 out this section $50,000,000 for each of the fiscal years 2010 

17 and 2011, $75,000,000 for fiscal year 2012, $100,000,000 

18 for fiscal year 2013, and $150,000,000 for fiscal year 2014 

19 and each year thereafter, adjusted for inflation. 

20 SEC. 218. CERTIFIED STOVES PROGRAM. 

21 (a) DEFINITIONS.—In this section: 

22 (1) AGENCY.—The term ‘‘Agency’’ means the En23 vironmental Protection Agency. 

24 (2) WOOD STOVE OR PELLET STOVE.—The term 

25 ‘‘wood stove or pellet stove’’ means a wood stove, pellet 

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1 stove, or fireplace insert that uses wood or pellets for 

2 fuel. 

3 (3) CERTIFIED STOVE.—The term ‘‘certified 

4 stove’’ means a wood stove or pellet stove that meets 

5 the standards of performance for new residential wood 

6 heaters under subpart AAA of part 60 of subchapter 

7 C of chapter I of title 40, Code of Federal Regulations 

8 (or successor regulations), as certified by the Adminis9 trator. Pellet stoves and fireplace inserts using pellets 

10 for fuel that are exempt from testing by the Adminis11 trator but meet the same standards of performance as 

12 wood stoves are considered certified for the purposes 

13 of this section. 

14 (4) ELIGIBLE ENTITY.—The term ‘‘eligible enti15 ty’’ means— 

16 (A) a State, a local government, or a feder17 ally recognized Indian tribe; 

18 (B) Alaskan Native villages or regional or 

19 village corporations (as defined in, or established 

20 under, the Alaskan Native Claims Settlement Act 

21 (43 U.S.C. 1601 et seq.)); and 

22 (C) a nonprofit organization or institution 

23 that— 

24 (i) represents or provides pollution re25 duction or educational services relating to 

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1 wood smoke minimization to persons, orga2 nizations, or communities; or 

3 (ii) has, as its principal purpose, the 

4 promotion of air quality or energy effi5 ciency. 

6 (b) ESTABLISHMENT.—The Administrator shall estab7 lish and carry out a program to assist in the replacement 

8 of wood stoves or pellet stoves that do not meet the standards 

9 of performance referred to in subsection (a)(4) by— 

10 (1) requiring that each wood stove or pellet stove 

11 sold in the United States on and after the date of en12 actment of this Act meet the standards of performance 

13 referred to in subsection (a)(4); 

14 (2) requiring that no wood stove or pellet stove 

15 replaced under this program is sold or returned to ac16 tive service, but that it is instead destroyed and recy17 cled to the maximum extent feasible; 

18 (3) providing funds to an eligible entity to re19 place a wood stove or pellet stove that does not meet 

20 the standards of performance in subsection (a)(4) 

21 with a certified stove, including funds to pay for— 

22 (A) installation of a replacement certified 

23 stove; and 

24 (B) necessary replacement of or repairs to 

25 ventilation, flues, chimneys, or other relevant 

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1 items necessary for safe installation of a replace2 ment 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 or 

8 pellet stoves manufactured before July 1, 1990; and 

9 (6) carrying out such other activities as the Ad10 ministrator determines appropriate to facilitate the 

11 replacement of wood stoves or pellet stoves that do not 

12 meet the standards of performance referred to in sub13 section (a)(3). 

14 (c) REGULATIONS.—The Administrator may promul15 gate such regulations as are necessary to carry out the pro16 gram established under subsection (b). 

17 (d) FUNDING.— 

18 (1) AUTHORIZATION OF APPROPRIATIONS.— 

19 There are authorized to be appropriated to carry out 

20 the program under this section $20,000,000 for the 

21 period of fiscal years 2010 through 2014. 

22 (2) DESIGNATED USE.—Of amounts appro23 priated pursuant to this subsection— 

24 (A) 25 percent shall be designated for use to 

25 carry out the program under this section on 

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1 lands held in trust for the benefit of a federally 

2 recognized Indian tribe; 

3 (B) 3 percent shall be designated for use to 

4 carry out the program under this section in 

5 Alaskan Native villages or regional or village 

6 corporations (as defined in, or established under, 

7 the Alaskan Native Claims Settlement Act (43 

8 U.S.C. 1601 et seq.)); and 

9 (C) 72 percent shall be designated for use to 

10 carry out the program under this section nation11 wide. 

12 (3) REGULATORY PROGRAMS.— 

13 (A) IN GENERAL.—No grant or loan pro14 vided under this section shall be used to fund the 

15 costs of emissions reductions that are mandated 

16 under Federal, State, or local law. 

17 (B) MANDATED.—For purposes of subpara18 graph (A), voluntary or elective emission reduc19 tion measures shall not be considered ‘‘man20 dated’’, regardless of whether the reductions are 

21 included in the implementation plan of a State. 

22 (e) EPA AUTHORITY TO ACCEPT WOOD STOVE OR

23 PELLET STOVE REPLACEMENT SUPPLEMENTAL ENVIRON24 MENTAL PROJECTS.— 

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1 (1) IN GENERAL.—The Administrator may ac2 cept (notwithstanding sections 3302 and 1301 of title 

3 31, United States Code) wood stove or pellet stove re4 placement Supplemental Environmental Projects if 

5 such projects, as part of a settlement of any alleged 

6 violation of environmental law— 

7 (A) protect human health or the environ8 ment; 

9 (B) are related to the underlying alleged 

10 violation; 

11 (C) do not constitute activities that the de12 fendant would otherwise be legally required to 

13 perform; and 

14 (D) do not provide funds for the staff of the 

15 Agency or for contractors to carry out the Agen16 cy’s internal operations. 

17 (2) CERTIFICATION.—In any settlement agree18 ment regarding an alleged violation of environmental 

19 law in which a defendant agrees to perform a wood 

20 stove or pellet stove replacement Supplemental Envi21 ronmental Project, the Administrator shall require the 

22 defendant to include in the settlement documents a 

23 certification under penalty of law that the defendant 

24 would have agreed to perform a comparably valued, 

25 alternative project other than a wood stove or pellet 

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1 stove replacement Supplemental Environmental 

2 Project if the Administrator were precluded by law 

3 from accepting a wood stove or pellet stove replace4 ment Supplemental Environmental Project. A failure 

5 by the Administrator to include this language in such 

6 a settlement agreement shall not create a cause of ac7 tion against the United States under the Clean Air 

8 Act or any other law or create a basis for overturning 

9 a settlement agreement entered into by the United 

10 States. 

11 SEC. 219. ENERGY STAR STANDARDS. 

12 (a) ENERGY STAR.—Section 324A(c) of the Energy 

13 Policy and Conservation Act is amended— 

14 (1) in paragraph (6)(B), by striking ‘‘and’’ after 

15 the semicolon at the end; 

16 (2) in paragraph (7), by striking the period at 

17 the end and inserting a semicolon; and 

18 (3) by adding at the end the following: 

19 ‘‘(8) in establishing and revising an Energy Star 

20 product category, specification, or criterion, require 

21 inclusion of developmental products planned for sale 

22 within 2 years in the testing or evaluation of prod23 ucts proposed for purposes of such establishment or 

24 revision; 

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1 ‘‘(9) not later than 18 months after the date of 

2 enactment of this paragraph, establish and implement 

3 a rating system for products identified as Energy 

4 Star products pursuant to this section to provide con5 sumers with the most helpful information on the rel6 ative energy efficiency of those products, unless the 

7 Administrator and the Secretary communicate to 

8 Congress that establishing such a system would di9 minish the value of the Energy Star brand to con10 sumers; 

11 ‘‘(10)(A) review the Energy Star product criteria 

12 for the 10 products in each product category with the 

13 greatest energy consumption at least once every 3 

14 years; and 

15 ‘‘(B) based on the review, update and publish the 

16 Energy Star product criteria for each such category, 

17 as necessary; and 

18 ‘‘(11) require periodic verification of compliance 

19 with the Energy Star product criteria by products 

20 identified as Energy Star products pursuant to this 

21 section, including— 

22 ‘‘(A) purchase and testing of products from 

23 the market; or 

24 ‘‘(B) other appropriate testing and compli25 ance approaches.’’. 

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1 (b) AUTHORIZATION OF APPROPRIATIONS.—There are 

2 authorized to be appropriated to carry out the amendments 

3 made by this section $5,000,000 for fiscal year 2010 and 

4 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 VEHI15 CLE ENGINES.—(1) Pursuant to section 202(a)(1), by De16 cember 31, 2010, the Administrator shall promulgate stand17 ards applicable to emissions of greenhouse gases from new 

18 heavy-duty motor vehicles or new heavy-duty motor vehicle 

19 engines, excluding such motor vehicles covered by the Tier 

20 II standards (as established by the Administrator as of the 

21 date of the enactment of this section). The Administrator 

22 may revise these standards from time to time. 

23 ‘‘(2) Regulations issued under section 202(a)(1) appli24 cable to emissions of greenhouse gases from new heavy-duty 

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1 cluding such motor vehicles covered by the Tier II standards 

2 (as established by the Administrator as of the date of the 

3 enactment of this section), shall contain standards that re4 flect the greatest degree of emissions reduction achievable 

5 through the application of technology which the Adminis6 trator determines will be available for the model year to 

7 which such standards apply, giving appropriate consider8 ation to cost, energy, and safety factors associated with the 

9 application of such technology. Any such regulations shall 

10 take effect after such period as the Administrator finds nec11 essary to permit the development and application of the req12 uisite technology, and, at a minimum, shall apply for a 

13 period no less than 3 model years beginning no earlier than 

14 the model year commencing 4 years after such regulations 

15 are promulgated. 

16 ‘‘(3) Regulations issued under section 202(a)(1) appli17 cable to emissions of greenhouse gases from new heavy-duty 

18 motor vehicles or new heavy-duty motor vehicle engines, ex19 cluding such motor vehicles covered by the Tier II standards 

20 (as established by the Administrator as of the date of the 

21 enactment of this section), shall supersede and satisfy any 

22 and all of the rulemaking and compliance requirements of 

23 section 32902(k) of title 49, United States Code. 

24 ‘‘(4) Other than as specifically set forth in paragraph 

25 (3) of this subsection, nothing in this section shall affect 

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1 or otherwise increase or diminish the authority of the Sec2 retary of Transportation to adopt regulations to improve 

3 the overall fuel efficiency of the commercial goods movement 

4 system. 

5 ‘‘(b) NONROAD VEHICLES AND ENGINES.—(1) Pursu6 ant to section 213(a)(4) and (5), the Administrator shall 

7 identify those classes or categories of new nonroad vehicles 

8 or engines, or combinations of such classes or categories, 

9 that, in the judgment of the Administrator, both contribute 

10 significantly to the total emissions of greenhouse gases from 

11 nonroad engines and vehicles, and provide the greatest po12 tential for significant and cost-effective reductions in emis13 sions of greenhouse gases. The Administrator shall promul14 gate standards applicable to emissions of greenhouse gases 

15 from these new nonroad engines or vehicles by December 

16 31, 2012. The Administrator shall also promulgate stand17 ards applicable to emissions of greenhouse gases for such 

18 other classes and categories of new nonroad vehicles and en19 gines as the Administrator determines appropriate and in 

20 the timeframe the Administrator determines appropriate. 

21 The Administrator shall base such determination, among 

22 other factors, on the relative contribution of greenhouse gas 

23 emissions, and the costs for achieving reductions, from such 

24 classes or categories of new nonroad engines and vehicles. 

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1 The Administrator may revise these standards from time 

2 to time. 

3 ‘‘(2) Standards under section 213(a)(4) and (5) appli4 cable to emissions of greenhouse gases from those classes or 

5 categories of new nonroad engines or vehicles identified in 

6 the first sentence of paragraph (1) of this subsection, shall 

7 achieve the greatest degree of emissions reduction achievable 

8 based on the application of technology which the Adminis9 trator determines will be available at the time such stand10 ards take effect, taking into consideration cost, energy, and 

11 safety factors associated with the application of such tech12 nology. Any such regulations shall take effect after such pe13 riod as the Administrator finds necessary to permit the de14 velopment and application of the requisite technology. 

15 ‘‘(3) For purposes of this section and standards under 

16 section 213(a)(4) or (5) applicable to emissions of green17 house gases, the term ‘nonroad engines and vehicles’ shall 

18 include non-internal combustion engines and the vehicles 

19 these engines power (such as electric engines and electric 

20 vehicles), for those non-internal combustion engines and ve21 hicles which would be in the same category and have the 

22 same uses as nonroad engines and vehicles that are powered 

23 by internal combustion engines. 

24 ‘‘(c) AIRCRAFT AND AIRCRAFT ENGINES.— 

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1 ‘‘(1) Pursuant to section 231(a), the Adminis2 trator shall promulgate standards applicable to emis3 sions of greenhouse gases from new aircraft and new 

4 engines used in aircraft by December 31, 2012. Not5 withstanding any requirement in section 231(a), the 

6 Administrator, in consultation with the Adminis7 trator of the Federal Aviation Administration, shall 

8 also promulgate standards applicable to emissions of 

9 greenhouse gases from other classes and categories of 

10 aircraft and aircraft engines for such classes and cat11 egories as the Administrator determines appropriate 

12 and in the timeframe the Administrator determines 

13 appropriate. The Administrator may revise these 

14 standards from time to time. 

15 ‘‘(2) Standards under section 231(a) applicable 

16 to emissions of greenhouse gases from new aircraft 

17 and new engines used in aircraft, and any later revi18 sions or additional standards, shall achieve the great19 est degree of emissions reduction achievable based on 

20 the application of technology which the Administrator 

21 determines will be available at the time such stand22 ards take effect, taking into consideration cost, en23 ergy, and safety factors associated with the applica24 tion of such technology. Any such standards shall take 

25 effect after such period as the Administrator finds 

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1 necessary to permit the development and application 

2 of the requisite technology. 

3 ‘‘(d) AVERAGING, BANKING, AND TRADING OF EMIS4 SIONS CREDITS.—In establishing standards applicable to 

5 emissions of greenhouse gases pursuant to this section and 

6 sections 202(a), 213(a)(4) and (5), and 231(a), the Admin7 istrator may establish provisions for averaging, banking, 

8 and trading of greenhouse gas emissions credits within or 

9 across classes or categories of motor vehicles and motor vehi10 cle engines, nonroad vehicles and engines (including marine 

11 vessels), and aircraft and aircraft engines, to the extent the 

12 Administrator determines appropriate and considering the 

13 factors appropriate in setting standards under those sec14 tions. Such provisions may include reasonable and appro15 priate provisions concerning generation, banking, trading, 

16 duration, and use of credits. 

17 ‘‘(e) REPORTS.—The Administrator shall, from time 

18 to time, submit a report to Congress that projects the 

19 amount of greenhouse gas emissions from the transportation 

20 sector, including transportation fuels, for the years 2030 

21 and 2050, based on the standards adopted under this sec22 tion. 

23 ‘‘(f) GREENHOUSE GASES.—Notwithstanding the pro24 visions of section 711, hydrofluorocarbons shall be consid25 ered a greenhouse gas for purposes of this section.’’. 

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1 SEC. 222. GREENHOUSE GAS EMISSIONS REDUCTIONS 

2 THROUGH TRANSPORTATION EFFICIENCY. 

3 Title VIII of the Clean Air Act, as added by section 

4 331 of this Act, is further amended by inserting after part 

5 C the following new part: 

6 ‘‘PART D—PLANNING REQUIREMENTS 

7 ‘‘SEC. 841. GREENHOUSE GAS EMISSIONS REDUCTIONS 

8 THROUGH TRANSPORTATION EFFICIENCY. 

9 ‘‘(a) IN GENERAL.—Each State shall— 

10 ‘‘(1) not later than 3 years after the date of en11 actment of this section, submit to the Administrator 

12 goals for transportation-related greenhouse gas emis13 sions reductions, which goals shall be reasonably com14 mensurate with the targets for overall greenhouse gas 

15 emissions reduction established by this Act; and 

16 ‘‘(2) as part of each transportation plan or 

17 transportation improvement program developed under 

18 title 23 or title 49, United States Code, ensure that 

19 a plan to achieve such goals, or an updated version 

20 of such a plan, is submitted to the Administrator and 

21 to the Secretary of Transportation (in this section re22 ferred to as the ‘Secretary’) by each metropolitan 

23 planning organization in the State for an area with 

24 a population exceeding 200,000. 

25 ‘‘(b) MODELS AND METHODOLOGIES.— 

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1 ‘‘(1) IN GENERAL.—The Administrator shall pro2 mulgate regulations to establish standards for use in 

3 developing goals, plans, and strategies under this sec4 tion and for monitoring progress toward such goals. 

5 Such standards shall include— 

6 ‘‘(A) data collection techniques for assessing 

7 State and regional transportation-related green8 house gas emissions; 

9 ‘‘(B) methodologies for determining trans10 portation-related greenhouse gas emissions base11 lines; 

12 ‘‘(C) models and methodologies for scenario 

13 analysis; and 

14 ‘‘(D) models and methodologies for esti15 mating transportation-related greenhouse gas 

16 emissions reductions from the strategies consid17 ered under this section. 

18 Such regulations may approve or improve existing 

19 models and methodologies 

20 ‘‘(2) TIMING.—The Administrator shall— 

21 ‘‘(A) publish proposed regulations under 

22 paragraph (1) not later than 1 year after the 

23 date of enactment of this section; and 

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1 ‘‘(B) promulgate final regulations under 

2 paragraph (1) not later than 2 years after such 

3 date of enactment. 

4 ‘‘(3) ASSESSMENT.—At least every 6 years after 

5 promulgating final regulations under paragraph (1), 

6 the Administrator, in coordination with the Sec7 retary, shall assess current and projected progress in 

8 reducing transportation-related greenhouse gas emis9 sions. The assessment shall examine the contributions 

10 to emissions reductions attributable to improvements 

11 in vehicle efficiency, greenhouse gas performance of 

12 transportation fuels, and increased efficiency in uti13 lizing transportation systems. 

14 ‘‘(c) GREENHOUSE GAS REDUCTION GOALS.— 

15 ‘‘(1) CONSULTATION.—Each State shall develop 

16 the goals referred to in subsection (a)(1)— 

17 ‘‘(A) in concurrence with State agencies re18 sponsible for air quality and transportation; 

19 ‘‘(B) in consultation with each metropolitan 

20 planning organization for an area in the State 

21 with a population exceeding 200,000 and appli22 cable local air quality and transportation agen23 cies; and 

24 ‘‘(C) with public involvement, including 

25 public comment periods and meetings. 

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1 ‘‘(2) PERIOD.—The goals referred to in sub2 section (a)(1) shall be for 4-, 10-, and 20-year peri3 ods. 

4 ‘‘(3) TARGETS; DESIGNATED YEAR.—The goals 

5 referred to in subsection (a)(1) shall establish targets 

6 to reduce transportation-related greenhouse gas emis7 sions in the covered area. The targets shall be de8 signed to ensure that the levels of such emissions sta9 bilize and decrease after a designated year. The State 

10 shall consider designating 2010 as such designated 

11 year. 

12 ‘‘(4) COVERED AREA.—The goals referred to in 

13 subsection (a)(1)— 

14 ‘‘(A) shall be established on a statewide 

15 basis; 

16 ‘‘(B) shall be established for each metropoli17 tan planning organization in the State for an 

18 area with a population exceeding 200,000; and 

19 ‘‘(C) may be established on a voluntary 

20 basis, in accordance with the provisions of this 

21 section, for any metropolitan planning organiza22 tion not described in subparagraph (B). 

23 ‘‘(5) REVISED GOALS.—Every 4 years, each 

24 State shall update and revise, as appropriate, the 

25 goals referred to in subsection (a)(1). 

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1 ‘‘(d) PLANNING.—A plan submitted under subsection 

2 (a)(2) shall— 

3 ‘‘(1) be based upon the models and methodologies 

4 established by the Administrator under subsection (b); 

5 ‘‘(2) use transportation and land use scenario 

6 analysis to address transportation-related greenhouse 

7 gas emissions and economic development impacts; 

8 and 

9 ‘‘(3) be developed— 

10 ‘‘(A) with public involvement, including 

11 public comment periods and meetings that pro12 vide opportunities for comment from a variety of 

13 stakeholders based on age, race, income, and dis14 ability; 

15 ‘‘(B) with regional coordination, including 

16 with respect to— 

17 ‘‘(i) metropolitan planning organiza18 tions; 

19 ‘‘(ii) the localities comprising the met20 ropolitan planning organization; 

21 ‘‘(iii) the State in which the metropoli22 tan planning organization is located; and 

23 ‘‘(iv) air quality, environmental 

24 health, and transportation agencies for the 

25 State and region involved; and 

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1 ‘‘(C) in consultation with the State and 

2 local housing, public health, economic develop3 ment, land use, environment, and public trans4 portation agencies. 

5 ‘‘(e) STRATEGIES.—In developing goals under sub6 section (a)(1) and a plan under subsection (a)(2), the State 

7 or metropolitan planning organization, as applicable, shall 

8 consider transportation and land use planning strategies 

9 to reduce transportation-related greenhouse gas emissions, 

10 including the following: 

11 ‘‘(1) Efforts to increase or improve public trans12 portation, including— 

13 ‘‘(A) new public transportation systems, in14 cluding new commuter rail systems; 

15 ‘‘(B) expansion of existing public transpor16 tation systems; 

17 ‘‘(C) employer-based subsidies; 

18 ‘‘(D) cleaner locomotive technologies; 

19 ‘‘(E) quality of service improvements, in20 cluding improved frequency of service; and 

21 ‘‘(F) use of transit buses that are powered 

22 by alternative fuels. 

23 ‘‘(2) Updates to zoning and other land use regu24 lations and plans to support development that— 

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1 ‘‘(A) coordinates transportation and land 

2 use planning; 

3 ‘‘(B) focuses future growth close to existing 

4 and planned job centers and public facilities; 

5 ‘‘(C) uses existing infrastructure; 

6 ‘‘(D) promotes walking, bicycling, and pub7 lic transportation use; and 

8 ‘‘(E) mixes land uses such as housing, re9 tail, and schools. 

10 ‘‘(3) Implementation of a policy (referred to as 

11 a ‘complete streets policy’) that— 

12 ‘‘(A) ensures adequate accommodation of all 

13 users of transportation systems, including pedes14 trians, bicyclists, public transportation users, 

15 motorists, children, the elderly, and individuals 

16 with disabilities; and 

17 ‘‘(B) adequately addresses the safety and 

18 convenience of all users of the transportation sys19 tem. 

20 ‘‘(4) Construction of bicycle and pedestrian in21 frastructure facilities, including facilities that im22 prove the connections with networks that provide ac23 cess to human services, employment, schools, and re24 tail. 

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1 ‘‘(5) Projects to promote telecommuting, flexible 

2 work schedules, or satellite work centers. 

3 ‘‘(6) Pricing measures, including tolling, conges4 tion pricing, and pay-as-you-drive insurance. 

5 ‘‘(7) Intermodal freight system strategies, includ6 ing enhanced rail services, short sea shipping, and 

7 other strategies. 

8 ‘‘(8) Parking policies. 

9 ‘‘(9) Intercity rail service, including high speed 

10 rail. 

11 ‘‘(10) Travel demand management projects. 

12 ‘‘(11) Restriction of the use of certain roads, or 

13 lanes, by vehicles other than passenger buses and 

14 high-occupancy vehicles. 

15 ‘‘(12) Reduction of vehicle idling, including 

16 idling associated with freight management, construc17 tion, transportation, and commuter operations. 

18 ‘‘(13) Policies to encourage the use of retrofit 

19 technologies and early replacement of vehicles, engines 

20 and equipment to reduce transportation-related green21 house gas emissions from existing mobile sources. 

22 ‘‘(14) Other projects that the Administrator finds 

23 reduce transportation-related greenhouse gas emis24 sions. 

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1 ‘‘(f) PUBLIC AVAILABILITY.—The Administrator shall 

2 publish, including by posting on the Environmental Protec3 tion Agency’s website— 

4 ‘‘(1) the goals and plans submitted under sub5 section (a); and 

6 ‘‘(2) for each plan submitted under subsection 

7 (a)(2), an analysis of the anticipated effects of the 

8 plan on greenhouse gas emissions and oil consump9 tion. 

10 ‘‘(g) CERTIFICATION.—The Administrator, in con11 sultation with the Secretary, shall certify a State or metro12 politan planning organization greenhouse gas reduction 

13 plan submitted under subsection (a)(2) if the plan’s imple14 mentation is likely to meet the corresponding greenhouse 

15 gas reduction goal referred to in subsection (a)(1). If the 

16 Administrator, in consultation with the Secretary, deter17 mines that a submitted plan cannot be certified, the State 

18 or metropolitan planning organization shall revise and re19 submit the plan within 1 year. 

20 ‘‘(h) ENFORCEMENT.—If the Administrator finds that 

21 a State has failed to submit goals under subsection (a)(1), 

22 has failed to ensure the submission of a plan under sub23 section (a)(2), or has failed to submit a revised plan under 

24 subsection (g), for any area in the State (irrespective of 

25 whether the area is a nonattainment area), the Adminismstockstill on PROD1PC66 with BILLS

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1 trator shall impose a prohibition in accordance with section 

2 179(b)(1) applicable to the area within 2 years of such a 

3 finding. The Administrator may not impose a prohibition 

4 under the preceding sentence, and no action may be brought 

5 by the Administrator or any other entity alleging a viola6 tion of this section, based on the content or adequacy of 

7 a goal or plan submitted under subsection (a)(1) or (a)(2) 

8 or failure to achieve the goal submitted under subsection 

9 (a)(1). 

10 ‘‘(i) COMPETITIVE GRANTS.— 

11 ‘‘(1) GRANTS.—The Administrator, in consulta12 tion with the Secretary, may award grants to States 

13 or metropolitan planning organizations— 

14 ‘‘(A) to support activities related to improv15 ing data collection, modeling, and monitoring 

16 systems to assess transportation-related green17 house gas emissions and the effects of plans, poli18 cies, and strategies referenced in this section; 

19 ‘‘(B) for the development of goals and plans 

20 to be submitted under sections (a)(1) or (a)(2); 

21 and 

22 ‘‘(C) to implement plans certified under 

23 subsection (g) or elements thereof, provided that 

24 each project thus funded includes a measurement 

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1 and evaluation component that meets the regula2 tions promulgated under subsection (b). 

3 ‘‘(2) PRIORITY.—In making grants under para4 graph (1)(C), the Administrator shall give priority to 

5 applicants based upon— 

6 ‘‘(A) the amount of total greenhouse gas 

7 emissions to be reduced as a result of implemen8 tation of a certified plan, within the covered 

9 area, as determined by methods established under 

10 subsection (b); 

11 ‘‘(B) the amount of per capita greenhouse 

12 gas emissions to be reduced as a result of imple13 mentation of a certified plan, within the covered 

14 area, as determined by methods established under 

15 subsection (b); 

16 ‘‘(C) the cost effectiveness, in terms of dol17 lars per tons of greenhouse gas reductions, to be 

18 achieved as a result of the implementation of a 

19 certified plan; 

20 ‘‘(D) the potential for both short- and long21 term reductions; and 

22 ‘‘(E) such other factors as the Administrator 

23 determines appropriate. 

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1 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.—To 

2 carry out this subsection, there are authorized to be 

3 appropriated such sums as may be necessary. 

4 ‘‘(j) DEFINITIONS.—In this section: 

5 ‘‘(1) The term ‘metropolitan planning organiza6 tion’ means a metropolitan planning organization, as 

7 such term is used in section 176. 

8 ‘‘(2) The term ‘scenario analysis’ means an 

9 analysis that is conducted by identifying different 

10 trends and making projections based on those trends 

11 to develop a range of scenarios and estimates of how 

12 each scenario could improve access to goods and serv13 ices, including access to employment, education, and 

14 health care (especially for elderly and economically 

15 disadvantaged communities), and could affect rates 

16 of— 

17 ‘‘(A) vehicle miles traveled; 

18 ‘‘(B) vehicle hours traveled; 

19 ‘‘(C) use of mobile source fuel by type, in20 cluding electricity; and 

21 ‘‘(D) transportation-related greenhouse gas 

22 emissions. 

23 ‘‘(k) LAND USE AUTHORITY.—Nothing in this section 

24 may be construed to— 

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1 ‘‘(1) infringe upon the existing authority of 

2 State or local governments to plan or control land 

3 use; or 

4 ‘‘(2) provide or transfer authority over land use 

5 to any other entity.’’. 

6 SEC. 223. SMARTWAY TRANSPORTATION EFFICIENCY PRO7 GRAM. 

8 Part B of title VIII of the Clean Air Act, as added 

9 by section 221 of this Act is amended by adding after sec10 tion 821 the following section: 

11 ‘‘SEC. 822. SMARTWAY TRANSPORTATION EFFICIENCY PRO12 GRAM. 

13 ‘‘(a) IN GENERAL.—There is established within the 

14 Environmental Protection Agency a SmartWay Transport 

15 Program to quantify, demonstrate, and promote the benefits 

16 of technologies, products, fuels, and operational strategies 

17 that reduce petroleum consumption, air pollution, and 

18 greenhouse gas emissions from the mobile source sector. 

19 ‘‘(b) GENERAL DUTIES.—Under the program estab20 lished under this section, the Administrator shall carry out 

21 each of the following: 

22 ‘‘(1) Development of measurement protocols to 

23 evaluate the energy consumption and greenhouse gas 

24 impacts from technologies and strategies in the mobile 

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1 source sector, including those for passenger transport 

2 and goods movement. 

3 ‘‘(2) Development of qualifying thresholds for 

4 certifying, verifying, or designating energy-efficient, 

5 low-greenhouse gas SmartWay technologies and strat6 egies for each mode of passenger transportation and 

7 goods movement. 

8 ‘‘(3) Development of partnership and recognition 

9 programs to promote best practices and drive demand 

10 for energy-efficient, low-greenhouse gas transportation 

11 performance. 

12 ‘‘(4) Promotion of the availability of, and en13 couragement of the adoption of, SmartWay certified 

14 or verified technologies and strategies, and publica15 tion of the availability of financial incentives, such as 

16 assistance from loan programs and other Federal and 

17 State incentives. 

18 ‘‘(c) SMARTWAY TRANSPORT FREIGHT PARTNER19 SHIP.—The Administrator shall establish a SmartWay 

20 Transport Partnership program with shippers and carriers 

21 of goods to promote energy-efficient, low-greenhouse gas 

22 transportation. In carrying out such partnership, the Ad23 ministrator shall undertake each of the following: 

24 ‘‘(1) Certification of the energy and greenhouse 

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1 cluding those operating rail, trucking, marine, and 

2 other goods movement operations. 

3 ‘‘(2) Publication of a comprehensive energy and 

4 greenhouse gas performance index of freight modes 

5 (including rail, trucking, marine, and other modes of 

6 transporting goods) and individual freight companies 

7 so that shippers can choose to deliver their goods more 

8 efficiently. 

9 ‘‘(3) Development of tools for— 

10 ‘‘(A) carriers to calculate their energy and 

11 greenhouse gas performance; and 

12 ‘‘(B) shippers to calculate the energy and 

13 greenhouse gas impacts of moving their products 

14 and to evaluate the relative impacts from trans15 porting their goods by different modes and cor16 porate carriers. 

17 ‘‘(4) Provision of recognition opportunities for 

18 participating shipper and carrier companies dem19 onstrating advanced practices and achieving superior 

20 levels of greenhouse gas performance. 

21 ‘‘(d) IMPROVING FREIGHT GREENHOUSE GAS PER22 FORMANCE DATABASES.—The Administrator shall, in co23 ordination with other appropriate agencies, define and col24 lect data on the physical and operational characteristics of 

25 the Nation’s truck population, with special emphasis on 

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1 data related to energy efficiency and greenhouse gas per2 formance to inform the performance index published under 

3 subsection (c)(2) of this section, and other means of goods 

4 transport as necessary, at least every 5 years. 

5 ‘‘(e) ESTABLISHMENT OF FINANCING PROGRAM.—The 

6 Administrator shall establish a SmartWay Financing Pro7 gram to competitively award funding to eligible entities 

8 identified by the Administrator in accordance with the pro9 gram requirements in subsection (g). 

10 ‘‘(f) PURPOSE.—Under the SmartWay Financing Pro11 gram, eligible entities shall— 

12 ‘‘(1) use funds awarded by the Administrator to 

13 provide flexible loan and lease terms that increase ap14 proval rates or lower the costs of loans and leases in 

15 accordance with guidance developed by the Adminis16 trator; and 

17 ‘‘(2) make such loans and leases available to 

18 public and private entities for the purpose of adopt19 ing low-greenhouse gas technologies or strategies for 

20 the mobile source sector that are designated by the 

21 Administrator. 

22 ‘‘(g) PROGRAM REQUIREMENTS.—The Administrator 

23 shall determine program design elements and requirements, 

24 including— 

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1 ‘‘(1) the type of financial mechanism with which 

2 to award funding, in the form of grants or contracts; 

3 ‘‘(2) the designation of eligible entities to receive 

4 funding, including State, tribal, and local govern5 ments, regional organizations comprised of govern6 mental units, nonprofit organizations, or for-profit 

7 companies; 

8 ‘‘(3) criteria for evaluating applications from el9 igible entities, including anticipated— 

10 ‘‘(A) cost-effectiveness of loan or lease pro11 gram on a metric-ton-of-greenhouse gas-saved12 per-dollar basis; 

13 ‘‘(B) ability to promote the loan or lease 

14 program and associated technologies and strate15 gies to the target audience; and 

16 ‘‘(4) reporting requirements for entities that re17 ceive awards, including— 

18 ‘‘(A) actual cost-effectiveness and greenhouse 

19 gas savings from the loan or lease program based 

20 on a methodology designated by the Adminis21 trator; 

22 ‘‘(B) the total number of applications and 

23 number of approved applications; and 

24 ‘‘(C) terms granted to loan and lease recipi25 ents compared to prevailing market practices. 

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1 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—Such 

2 sums as necessary are authorized to be appropriated to the 

3 Administrator to carry out this section.’’. 

4 SEC. 224. STATE VEHICLE FLEETS. 

5 Section 507(o) of the Energy Policy Act of 1992 (42 

6 U.S.C. 13257) is amended by adding the following new 

7 paragraph at the end thereof: 

8 ‘‘(3) The Secretary shall revise the rules under this 

9 subsection with respect to the types of alternative fueled ve10 hicles required for compliance with this subsection to ensure 

11 those rules are consistent with any guidance issued pursu12 ant to section 303 of this Act.’’. 

13 Subtitle D—Industrial Energy 

14 Efficiency Programs 

15 SEC. 241. INDUSTRIAL PLANT ENERGY EFFICIENCY STAND16 ARDS. 

17 The Secretary of Energy shall continue to support the 

18 development of the American National Standards Institute 

19 (ANSI) voluntary industrial plant energy efficiency certifi20 cation program, pending International Standards Organi21 zation (ISO) consensus standard 50001, and other related 

22 ANSI/ISO standards. In addition, the Department shall 

23 undertake complementary activities through the Depart24 ment of Energy’s Industry Technologies Program that sup25 port the voluntary implementation of such standards by 

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1 manufacturing firms. There are authorized to be appro2 priated to the Secretary such sums as are necessary to carry 

3 out these activities. The Secretary shall report to Congress 

4 on the status of standards development and plans for fur5 ther standards development pursuant to this section by not 

6 later than 18 months after the date of enactment of this 

7 Act, and shall prepare a second such report 18 months 

8 thereafter. 

9 SEC. 242. ELECTRIC AND THERMAL WASTE ENERGY RECOV10 ERY AWARD PROGRAM. 

11 (a) ELECTRIC AND THERMAL WASTE ENERGY RECOV12 ERY AWARDS.—The Secretary of Energy shall establish a 

13 program to make monetary awards to the owners and oper14 ators of new and existing electric energy generation facili15 ties or thermal energy production facilities using fossil or 

16 nuclear fuel, to encourage them to use innovative means of 

17 recovering any thermal energy that is a potentially useful 

18 byproduct of electric power generation or other processes 

19 to— 

20 (1) generate additional electric energy; or 

21 (2) make sales of thermal energy not used for 

22 electric generation, in the form of steam, hot water, 

23 chilled water, or desiccant regeneration, or for other 

24 commercially valid purposes. 

25 (b) AMOUNT OF AWARDS.— 

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1 (1) ELIGIBILITY.—Awards shall be made under 

2 subsection (a) only for the use of innovative means 

3 that achieve net energy efficiency at the facility con4 cerned significantly greater than the current standard 

5 technology in use at similar facilities. 

6 (2) AMOUNT.—The amount of an award made 

7 under subsection (a) shall equal an amount up to the 

8 value of 25 percent of the energy projected to be recov9 ered or generated during the first 5 years of operation 

10 of the facility using the innovative energy recovery 

11 method, or such lesser amount that the Secretary de12 termines to be the minimum amount that can cost-ef13 fectively stimulate such innovation. 

14 (3) LIMITATION.—No person may receive an 

15 award under this section if a grant under the waste 

16 energy incentive grant program under section 373 of 

17 the Energy Policy and Conservation Act (42 U.S.C. 

18 6343) is made for the same energy savings resulting 

19 from the same innovative method. 

20 (c) REGULATORY STATUS.—The Secretary of Energy 

21 shall— 

22 (1) assist State regulatory commissions to iden23 tify and make changes in State regulatory programs 

24 for electric utilities to provide appropriate regulatory 

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1 ulated electric utilities to encourage those utilities to 

2 enter businesses making the sales referred to in sub3 section (a)(2); and 

4 (2) encourage self-regulated utilities to enter 

5 businesses making the sales referred to in subsection 

6 (a)(2). 

7 (d) AUTHORIZATION OF APPROPRIATIONS.—There are 

8 authorized to be appropriated to the Secretary of Energy 

9 such sums as are necessary for the purposes of this section. 

10 SEC. 243. CLARIFYING ELECTION OF WASTE HEAT RECOV11 ERY FINANCIAL INCENTIVES. 

12 Section 373(e) of the Energy Policy and Conservation 

13 Act (42 U.S.C. 6343(e)) is amended— 

14 (1) by striking ‘‘that qualifies for’’ and inserting 

15 ‘‘who elects to claim’’; and 

16 (2) by inserting ‘‘from that project’’ after ‘‘for 

17 waste heat recovery’’. 

18 SEC. 244. MOTOR MARKET ASSESSMENT AND COMMERCIAL 

19 AWARENESS PROGRAM. 

20 (a) FINDINGS.—Congress finds that— 

21 (1) electric motor systems account for about half 

22 of the electricity used in the United States; 

23 (2) electric motor energy use is determined by 

24 both the efficiency of the motor and the system in 

25 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 ‘‘interested 

11 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 as22 sessment of electric motors and the electric motor market 

23 in the United States that shall— 

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1 (1) include important subsectors of the industrial 

2 and commercial electric motor market (as determined 

3 by the Secretary), including— 

4 (A) the stock of motors and motor-driven 

5 equipment; 

6 (B) efficiency categories of the motor popu7 lation; 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 sys12 tems 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, pumps, 

17 compressors, fans or blowers, and material han18 dling components; and 

19 (C) substitution of existing motor designs 

20 with existing and future advanced motor designs, 

21 including electronically commutated permanent 

22 magnet, interior permanent magnet, and 

23 switched reluctance motors; and 

24 (3) develop an updated profile of motor system 

25 purchase and maintenance practices, including surmstockstill on PROD1PC66 with BILLS

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1 veying the number of companies that have motor pur2 chase 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 detailed 

9 motor profile on a periodic basis; 

10 (B) methods to estimate the energy savings 

11 and market penetration that is attributable to 

12 the Save Energy Now Program of the Depart13 ment; and 

14 (C) recommendations for the Director of the 

15 Census Bureau on market surveys that should be 

16 undertaken in support of the motor system ac17 tivities 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, recommenda21 tions, and update required under subsections (c) and (d), 

22 the Secretary shall establish a proactive, national program 

23 targeted at motor end-users and delivered in cooperation 

24 with interested parties to increase awareness 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 higher 

6 efficiency electric motors and motor-system compo7 nents, including drives, controls, and driven equip8 ment; and 

9 (3) criteria for making decisions for new, re10 placement, or repair motor and motor system compo11 nents. 

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 shall 

19 establish a program to provide rebates for expenditures 

20 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 Pub2 lication MG 1–2006 for random wound motors 

3 rated 600 volts or lower; or 

4 ‘‘(B) table 12–13 of NEMA Standards Pub5 lication 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 Sec9 retary by a date that is not later than 90 days after 

10 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 the 

14 Secretary an application in such form, at such time, 

15 and containing such information as the Secretary 

16 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 the 

24 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 installed 

4 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 amount 

8 of which shall be equal to the product obtained by 

9 multiplying— 

10 ‘‘(A) the nameplate horsepower of the elec11 tric motor purchased by the entity in accordance 

12 with subsection (a)(1); and 

13 ‘‘(B) $25.00. 

14 ‘‘(3) PAYMENTS TO DISTRIBUTORS OF QUALI15 FYING ELECTRIC MOTORS.—To assist in the payment 

16 for expenses relating to processing and motor core dis17 posal costs, the Secretary shall provide to the dis18 tributor of an electric motor described in subsection 

19 (a)(1), the purchaser of which received a rebate under 

20 this section, an amount equal to the product obtained 

21 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 are 

2 authorized to be appropriated to carry out this section, to 

3 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 the 

10 Energy Policy and Conservation Act (42 U.S.C. prec. 6201) 

11 is amended by adding at the end of the items relating to 

12 part C of title III the following: 

‘‘Sec. 347. Motor efficiency rebate program.’’. 

13 Subtitle E—Improvements in En14 ergy Savings Performance Con15 tracting 

16 SEC. 251. ENERGY SAVINGS PERFORMANCE CONTRACTS. 

17 (a) COMPETITION REQUIREMENTS FOR TASK OR DE18 LIVERY ORDERS UNDER ENERGY SAVINGS PERFORMANCE

19 CONTRACTS.— 

20 (1) COMPETITION REQUIREMENTS.—Subsection 

21 (a) of section 801 of the National Energy Conserva22 tion Policy Act (42 U.S.C. 8287(a)) is amended by 

23 adding at the end the following paragraph: 

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1 ‘‘(3)(A) The head of a Federal agency may issue a task 

2 or delivery order under an energy savings performance con3 tract by— 

4 ‘‘(i) notifying all contractors that have received 

5 an award under such contract that the agency pro6 poses to discuss energy savings performance services 

7 for some or all of its facilities, soliciting an expres8 sion of interest in performing site surveys or inves9 tigations and feasibility designs and studies and the 

10 submission of qualifications from such contractors, 

11 and including in such notice summary information 

12 concerning energy use for any facilities that the agen13 cy has specific interest in including in such contract; 

14 ‘‘(ii) reviewing all expressions of interest and 

15 qualifications submitted pursuant to the notice under 

16 clause (i); 

17 ‘‘(iii) selecting two or more contractors (from 

18 among those reviewed under clause (ii)) to conduct 

19 discussions concerning the contractors’ respective 

20 qualifications to implement potential energy con21 servation measures, including requesting references 

22 demonstrating experience on similar efforts and the 

23 resulting energy savings of such similar efforts; 

24 ‘‘(iv) selecting and authorizing— 

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1 ‘‘(I) more than one contractor (from among 

2 those selected under clause (iii)) to conduct site 

3 surveys, investigations, feasibility designs and 

4 studies or similar assessments for the energy sav5 ings performance contract services (or for dis6 crete portions of such services), for the purpose of 

7 allowing each such contractor to submit a firm, 

8 fixed-price proposal to implement specific energy 

9 conservation measures; or 

10 ‘‘(II) one contractor (from among those se11 lected under clause (iii)) to conduct a site sur12 vey, investigation, a feasibility design and study 

13 or similar for the purpose of allowing the con14 tractor to submit a firm, fixed-price proposal to 

15 implement specific energy conservation measures; 

16 ‘‘(v) negotiating a task or delivery order for en17 ergy savings performance contracting services with 

18 the contractor or contractors selected under clause (iv) 

19 based on the energy conservation measures identified; 

20 and 

21 ‘‘(vi) issuing a task or delivery order for energy 

22 savings performance contracting services to such con23 tractor or contractors. 

24 ‘‘(B) The issuance of a task or delivery order for energy 

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1 paragraph (A) is deemed to satisfy the task and delivery 

2 order competition requirements in section 2304c(d) of title 

3 10, United States Code, and section 303J(d) of the Federal 

4 Property and Administrative Services Act of 1949 (41 

5 U.S.C. 253j(d)). 

6 ‘‘(C) The Secretary may issue guidance as necessary 

7 to agencies issuing task or delivery orders pursuant to sub8 paragraph (A).’’. 

9 (2) EFFECTIVE DATE.—The amendment made by 

10 paragraph (1) is inapplicable to task or delivery or11 ders issued before the date of enactment of this sec12 tion. 

13 (b) INCLUSION OF THERMAL RENEWABLE ENERGY.— 

14 Section 203 of the Energy Policy Act of 2005 (42 U.S.C. 

15 15852) is amended— 

16 (1) in subsection (a), by striking ‘‘electric’’; and 

17 (2) in subsection (b)(2), by inserting ‘‘or ther18 mal’’ after ‘‘means electric’’. 

19 (c) CREDIT FOR RENEWABLE ENERGY PRODUCED AND

20 USED ON SITE.—Subsection (c) of section 203 of the Energy 

21 Policy Act of 2005 (42 U.S.C. 15852) is amended to read 

22 as follows: 

23 ‘‘(c) CALCULATION.—Renewable energy produced at a 

24 Federal facility, on Federal lands, or on Indian lands (as 

25 defined in title XXVI of the Energy Policy Act of 1992 (25 

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1 U.S.C. 3501 et seq.)) shall be calculated separately from re2 newable energy consumed at a Federal facility, and each 

3 may be used to comply with the consumption requirement 

4 under subsection (a).’’. 

5 (d) FINANCING FLEXIBILITY.—Section 801(a)(2)(E) of 

6 the National Energy Conservation Policy Act (42 U.S.C. 

7 8287(a)(2)(E)) is amended by striking ‘‘In’’ and inserting 

8 ‘‘Notwithstanding any other provision of law, in’’. 

9 Subtitle F—Public Institutions 

10 SEC. 261. PUBLIC INSTITUTIONS. 

11 Section 399A of the Energy Policy and Conservation 

12 Act (42 U.S.C. 6371h–1) is amended— 

13 (1) in subsection (a)(5), by striking ‘‘or a des14 ignee’’ and inserting ‘‘a not-for-profit hospital or not15 for-profit inpatient health care facility, or a des16 ignated agent’’; 

17 (2) in subsection (c)(1), by striking subpara18 graph (C); 

19 (3) in subsection (f)(3)(A), by striking 

20 ‘‘$1,000,000’’ and inserting ‘‘$2,500,000’’; and 

21 (4) in subsection (i)(1), by striking 

22 ‘‘$250,000,000 for each of fiscal years 2009 through 

23 2013’’ and inserting ‘‘$250,000,000 for each of fiscal 

24 years 2010 through 2015’’. 

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1 SEC. 262. COMMUNITY ENERGY EFFICIENCY FLEXIBILITY. 

2 Section 545(b)(3) of the Energy Independence and Se3 curity Act of 2007 (42 U.S.C. 17155(b)(3)) is amended— 

4 (1) by striking ‘‘Indian tribe may use’’ and all 

5 that follows through ‘‘for administrative expenses’’ 

6 and inserting ‘‘Indian tribe may use for administra7 tive expenses’’; 

8 (2) by striking subparagraphs (B) and (C); 

9 (3) by redesignating the remaining clauses (i) 

10 and (ii) as subparagraphs (A) and (B), respectively 

11 and adjusting the margin of those subparagraphs ac12 cordingly; and 

13 (4) by striking the semicolon at the end and in14 serting a period. 

15 SEC. 263. SMALL COMMUNITY JOINT PARTICIPATION. 

16 (a) Section 541(3)(A) of the Energy Independence and 

17 Security Act of 2007 is amended in clause (i) by striking 

18 ‘‘and’’ at the end of subclause (II), in clause (ii) by striking 

19 the period at the end of subclause (II) and inserting ‘‘; or’’, 

20 and by inserting the following new clause (iii): 

21 ‘‘(iii) a group of adjacent, contiguous, or 

22 geographically proximate units of local govern23 ment that reach agreement to act jointly for pur24 poses of this section and that represent a com25 bined population of not less than 35,000.’’. 

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1 (b) Section 541(3)(B) of the Energy Independence and 

2 Security Act of 2007 is amended in clause (i) by striking 

3 ‘‘or’’, in clause (ii) by striking the period at the end and 

4 inserting ‘‘; or’’, and by inserting the following new clause 

5 (iii): 

6 ‘‘(iii) a group of adjacent, contiguous, or 

7 geographically proximate units of local govern8 ment that reach agreement to act jointly for pur9 poses of this section and that represent a com10 bined population of not less than 50,000.’’. 

11 SEC. 264. LOW INCOME COMMUNITY ENERGY EFFICIENCY 

12 PROGRAM. 

13 (a) IN GENERAL.—The Secretary of Energy is author14 ized to make grants to private, nonprofit, mission-driven 

15 community development organizations including commu16 nity development corporations and community development 

17 financial institutions to provide financing to businesses 

18 and projects that improve energy efficiency; identify and 

19 develop alternative, renewable, and distributed energy sup20 plies; provide technical assistance and promote job and 

21 business opportunities for low-income residents; and in22 crease energy conservation in low income rural and urban 

23 communities. 

24 (b) GRANTS.—The purpose of such grants is to increase 

25 the flow of capital and benefits to low income communities, 

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1 minority-owned and woman-owned businesses and entre2 preneurs and other projects and activities located in low 

3 income communities in order to reduce environmental deg4 radation, foster energy conservation and efficiency and cre5 ate job and business opportunities for local residents. The 

6 Secretary may make grants on a competitive basis for— 

7 (1) investments that develop alternative, renew8 able, and distributed energy supplies; 

9 (2) capitalizing loan funds that lend to energy 

10 efficiency projects and energy conservation programs; 

11 (3) technical assistance to plan, develop, and 

12 manage an energy efficiency financing program; and 

13 (4) technical and financial assistance to assist 

14 small-scale businesses and private entities develop 

15 new renewable and distributed sources of power or 

16 combined heat and power generation. 

17 (c) AUTHORIZATION OF APPROPRIATIONS.—For the 

18 purposes of this section there is authorized to be appro19 priated $50,000,000 for each of the fiscal years 2010 

20 through 2015. 

21 Subtitle G—Miscellaneous 

22 SEC. 271. ENERGY EFFICIENT INFORMATION AND COMMU23 NICATIONS TECHNOLOGIES. 

24 Section 543 of the National Energy Conservation Pol25 icy Act (42 U.S.C. 8253) is amended to read as follows: 

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1 ‘‘SEC. 543. ENERGY EFFICIENT INFORMATION AND COMMU2 NICATIONS TECHNOLOGIES. 

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

4 date of enactment of the American Clean Energy and Secu5 rity Act of 2009, each Federal agency shall collaborate with 

6 the Director of the Office of Management and Budget (re7 ferred to in this section as the ‘Director’) to create an imple8 mentation strategy, including best practices and measure9 ment and verification techniques, for the purchase and use 

10 of energy efficient information and communications tech11 nologies and practices. Wherever possible, existing stand12 ards, specifications, performance metrics, and best manage13 ment practices that have been or are being developed in 

14 open collaboration and with broad stakeholder input and 

15 review should be incorporated. In addition, agency strate16 gies shall be flexible, cost-effective, and based on the specific 

17 operating requirements and statutory mission of each agen18 cy. 

19 ‘‘(b) ENERGY EFFICIENT INFORMATION AND COMMU20 NICATIONS TECHNOLOGIES.—In developing an implemen21 tation strategy, each agency shall— 

22 ‘‘(1) consider information and communications 

23 technologies and infrastructure, including, but not 

24 limited to, advanced metering infrastructure, infor25 mation and communications technology services and 

26 products, efficient data center strategies, applications 

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1 modernization and rationalization, building systems 

2 energy efficiency, and telework; and 

3 ‘‘(2) ensure that agencies are eligible to realize 

4 the savings and rewards brought about through in5 creased efficiencies. 

6 ‘‘(c) PERFORMANCE GOALS.—Not later than 6 months 

7 after the date of enactment of the American Clean Energy 

8 and Security Act of 2009, the Director shall establish per9 formance goals for evaluating the efforts of the agencies in 

10 improving the maintenance, purchase and use of energy ef11 ficiency of information and communications technology 

12 systems. These performance goals should measure informa13 tion technology costs over a specific time horizon (3 to 5 

14 years), providing a complete picture of all costs, including 

15 energy. 

16 ‘‘(d) REPORT.—Not later than 18 months after the 

17 date of enactment of the American Clean Energy and Secu18 rity Act of 2009, and annually thereafter, the Director shall 

19 submit a report to Congress on— 

20 ‘‘(1) the progress of each agency in reducing en21 ergy use through its implementation strategy; and 

22 ‘‘(2) new and emerging technologies that would 

23 help achieve increased energy efficiency.’’. 

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1 SEC. 272. NATIONAL ENERGY EFFICIENCY GOALS. 

2 (a) GOALS.—The energy efficiency goals of the United 

3 States are— 

4 (1) to achieve an improvement in the overall en5 ergy productivity of the United States (measured in 

6 gross domestic product per unit of energy input) of at 

7 least 2.5 percent per year by the year 2012; and 

8 (2) to maintain that annual rate of improve9 ment each year through 2030. 

10 (b) STRATEGIC PLAN.— 

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

12 the date of enactment of this Act, the Secretary of En13 ergy (referred to in this section as the ‘‘Secretary’’), 

14 in cooperation with the Administrator and the heads 

15 of other appropriate Federal agencies, shall develop a 

16 strategic plan to achieve the national goals for im17 provement in energy productivity established under 

18 subsection (a). 

19 (2) PUBLIC INPUT AND COMMENT.—The Sec20 retary shall develop the plan in a manner that pro21 vides appropriate opportunities for public input and 

22 comment. 

23 (c) PLAN CONTENTS.—The strategic plan shall— 

24 (1) identify future regulatory, funding, and pol25 icy priorities that would assist the United States in 

26 meeting the national goals; 

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1 (2) include energy savings estimates for each sec2 tor; and 

3 (3) include data collection methodologies and 

4 compilations used to establish baseline and energy 

5 savings data. 

6 (d) PLAN UPDATES.— 

7 (1) IN GENERAL.—The Secretary shall— 

8 (A) update the strategic plan biennially; 

9 and 

10 (B) include the updated strategic plan in 

11 the national energy policy plan required by sec12 tion 801 of the Department of Energy Organiza13 tion Act (42 U.S.C. 7321). 

14 (2) CONTENTS.—In updating the plan, the Sec15 retary shall— 

16 (A) report on progress made toward imple17 menting efficiency policies to achieve the na18 tional goals established under subsection (a); and 

19 (B) verify, to the maximum extent prac20 ticable, energy savings resulting from the poli21 cies. 

22 (e) REPORT TO CONGRESS AND THE PUBLIC.—The 

23 Secretary shall submit to Congress, and make available to 

24 the public, the initial strategic plan developed under sub25 section (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 Assistant 

17 Secretary of Energy Efficiency and Renewable En18 ergy), in consultation with the Secretary of the Inte19 rior and the Secretary of State. 

20 (3) TEAM.—The term ‘‘team’’ means the team es21 tablished by the Secretary under subsection (b). 

22 (b) ESTABLISHMENT.—As soon as practicable after the 

23 date of enactment of this Act, the Secretary shall assemble 

24 a team of technical, policy, and financial experts to address 

25 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 in6 frastructure of the affiliated island through projects— 

7 (A) to improve the energy efficiency of 

8 power generation, transmission, and distribu9 tion; and 

10 (B) to increase consumer energy efficiency; 

11 (4) to improve the performance of the energy in12 frastructure of each affiliated island through enhanced 

13 planning, education, and training; 

14 (5) to adopt research-based and public-private 

15 partnership-based approaches as appropriate; 

16 (6) to stimulate economic development and job 

17 creation; and 

18 (7) to enhance the engagement by the Federal 

19 Government in international efforts to address island 

20 energy needs. 

21 (c) DUTIES OF TEAM.— 

22 (1) ENERGY ACTION PLANS.— 

23 (A) IN GENERAL.—In accordance with sub24 paragraph (B), the team shall provide technical, 

25 programmatic, and financial assistance to each 

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1 utility of each affiliated island, and the govern2 ment of each affiliated island, as appropriate, to 

3 develop and implement an energy Action Plan 

4 for each affiliated island to reduce the reliance of 

5 each affiliated island on imported fossil fuels 

6 through increased efficiency and use of indige7 nous clean-energy resources. 

8 (B) REQUIREMENTS.—Each Action Plan 

9 described in subparagraph (A) for each affiliated 

10 island shall require and provide for— 

11 (i) the conduct of 1 or more studies to 

12 assess opportunities to reduce fossil fuel use 

13 through— 

14 (I) the improvement of the energy 

15 efficiency of the affiliated island; and 

16 (II) the increased use by the affili17 ated island of indigenous clean-energy 

18 resources; 

19 (ii) the identification and implementa20 tion of the most cost-effective strategies and 

21 projects to reduce the dependence of the af22 filiated island on fossil fuels; 

23 (iii) the promotion of education and 

24 training activities to improve the capacity 

25 of the local utilities of the affiliated island, 

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1 and the government of the affiliated island, 

2 as appropriate, to plan for, maintain, and 

3 operate the energy infrastructure of the af4 filiated island through the use of local or re5 gional institutions, as appropriate; 

6 (iv) the coordination of the activities 

7 described in clause (iii) to leverage the ex8 pertise and resources of international enti9 ties, the Department of Energy, the Depart10 ment of the Interior, and the regional utili11 ties of the affiliated island; 

12 (v) the identification, and development, 

13 as appropriate, of research-based and pri14 vate-public, partnership approaches to im15 plement the Action Plan; and 

16 (vi) any other component that the Sec17 retary determines to be necessary to reduce 

18 successfully the use by each affiliated island 

19 of fossil fuels. 

20 (2) REPORTS TO SECRETARY.—Not later than 1 

21 year after the date on which the Secretary establishes 

22 the team and biennially thereafter, the team shall sub23 mit to the Secretary a report that contains a descrip24 tion of the progress of each affiliated island in— 

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1 (A) implementing the Action Plan of the af2 filiated island developed under paragraph 

3 (1)(A); and 

4 (B) reducing the reliance of the affiliated is5 land on fossil fuels. 

6 (d) USE OF REGIONAL UTILITY ORGANIZATIONS.—To 

7 provide expertise to affiliated islands to assist the affiliated 

8 islands in meeting the purposes of this section, the Secretary 

9 shall consider— 

10 (1) including regional utility organizations in 

11 the establishment of the team; and 

12 (2) providing assistance through regional utility 

13 organizations. 

14 (e) ANNUAL REPORTS TO CONGRESS.—Not later than 

15 30 days after the date on which the Secretary receives a 

16 report submitted by the team under subsection (c)(2), the 

17 Secretary shall submit to the appropriate committees of 

18 Congress a report that contains a summary of the report 

19 of the team. 

20 (f) AUTHORIZATION OF APPROPRIATIONS.—There are 

21 authorized to be appropriated such sums as are necessary 

22 to carry out this section. 

23 SEC. 274. PRODUCT CARBON DISCLOSURE PROGRAM. 

24 (a) EPA STUDY.—The Administrator shall conduct a 

25 study to determine the feasibility of establishing a national 

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1 program for measuring, reporting, publicly disclosing, and 

2 labeling products or materials sold in the United States for 

3 their carbon content, and shall, not later than 18 months 

4 after the date of enactment of this Act, transmit a report 

5 to Congress which shall include the following: 

6 (1) A determination of whether a national prod7 uct carbon disclosure program and labeling program 

8 would be effective in achieving the intended goals of 

9 achieving greenhouse gas reductions and an examina10 tion of existing programs globally and their strengths 

11 and weaknesses. 

12 (2) Criteria for identifying and prioritizing sec13 tors and products and processes that should be covered 

14 in such program or programs. 

15 (3) An identification of products, processes, or 

16 sectors whose inclusion could have a substantial car17 bon impact (prioritizing industrial products such as 

18 iron and steel, aluminum, cement, chemicals, and 

19 paper products, and also including food, beverage, hy20 giene, cleaning, household cleaners, construction, met21 als, clothing, semiconductor, and consumer elec22 tronics). 

23 (4) Suggested methodology and protocols for 

24 measuring the carbon content of the products across 

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1 the entire carbon lifecycle of such products for use in 

2 a carbon disclosure program and labeling program. 

3 (5) A review of existing greenhouse gas product 

4 accounting standards, methodologies, and practices 

5 including the Greenhouse Gas Protocol, ISO 14040/ 

6 44, ISO 14067, and Publically Available Specifica7 tion 2050, and including a review of the strengths 

8 and weaknesses of each. 

9 (6) A survey of secondary databases including 

10 the Manufacturing Energy Consumption Survey and 

11 evaluate the quality of data for use in a product car12 bon disclosure program and product carbon labeling 

13 program and an identification of gaps in the data 

14 relative to the potential purposes of a national prod15 uct carbon disclosure program and product carbon la16 beling program and development of recommendations 

17 for addressing these data gaps. 

18 (7) An assessment of the utility of comparing 

19 products and the appropriateness of product carbon 

20 standards. 

21 (8) An evaluation of the information needed on 

22 a label for clear and accurate communication, includ23 ing what pieces of quantitative and qualitative infor24 mation needs to be disclosed. 

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1 (9) An evaluation of the appropriate boundaries 

2 of the carbon lifecycle analysis for different sectors 

3 and products. 

4 (10) An analysis of whether default values should 

5 be developed for products whose producer does not 

6 participate in the program or does not have data to 

7 support a disclosure or label and determine best ways 

8 to develop such default values. 

9 (11) A recommendation of certification and 

10 verification options necessary to assure the quality of 

11 the information and avoid greenwashing or the use of 

12 insubstantial or meaningless environmental claims to 

13 promote a product. 

14 (12) An assessment of options for educating con15 sumers about product carbon content and the product 

16 carbon disclosure program and product carbon label17 ing program. 

18 (13) An analysis of the costs and timelines asso19 ciated with establishing a national product carbon 

20 disclosure program and product carbon labeling pro21 gram, including options for a phased approach. Costs 

22 should include those for businesses associated with the 

23 measurement of carbon footprints and those associated 

24 with creating a product carbon label and managing 

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1 and operating a product carbon labeling program, 

2 and options for minimizing these costs. 

3 (14) An evaluation of incentives (such as finan4 cial incentives, brand reputation, and brand loyalty) 

5 to determine whether reductions in emissions can be 

6 accelerated through encouraging more efficient manu7 facturing or by encouraging preferences for lower8 emissions products to substitute for higher-emissions 

9 products whose level of performance is no better. 

10 (b) DEVELOPMENT OF NATIONAL CARBON DISCLO11 SURE PROGRAM.—Upon conclusion of the study, and not 

12 more than 36 months after the date of enactment of this 

13 Act, the Administrator shall establish a national product 

14 carbon disclosure program, participation in which shall be 

15 voluntary, and which may involve a product carbon label 

16 with broad applicability to the wholesale and consumer 

17 markets to enable and encourage knowledge about carbon 

18 content by producers and consumers and to inform efforts 

19 to reduce energy consumption (carbon dioxide equivalent 

20 emissions) nationwide. In developing such a program, the 

21 Administrator shall— 

22 (1) consider the results of the study conducted 

23 under subsection (a); 

24 (2) consider existing and planned programs and 

25 proposals and measurement standards (including the 

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1 Publicly Available Specification 2050, standards to be 

2 developed by the World Resource Institute/World 

3 Business Council for Sustainable Development, the 

4 International Standards Organization, and the bill 

5 AB19 pending in the California legislature); 

6 (3) consider the compatibility of a national 

7 product carbon disclosure program with existing pro8 grams; 

9 (4) utilize incentives and other means to spur 

10 the adoption of product carbon disclosure and product 

11 carbon labeling; 

12 (5) develop protocols and parameters for a prod13 uct carbon disclosure program, including a method14 ology and formula for assessing, verifying, and poten15 tially labeling a product’s greenhouse gas content, and 

16 for data quality requirements to allow for product 

17 comparison; 

18 (6) create a means to— 

19 (A) document best practices; 

20 (B) ensure clarity and consistency; 

21 (C) work with suppliers, manufacturers, 

22 and retailers to encourage participation; 

23 (D) ensure that protocols are consistent and 

24 comparable across like products; and 

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1 (E) evaluate the effectiveness of the pro2 gram; 

3 (7) make publicly available information on 

4 product carbon content to ensure transparency; 

5 (8) provide for public outreach, including a con6 sumer education program to increase awareness; 

7 (9) develop training and education programs to 

8 help businesses learn how to measure and commu9 nicate their carbon footprint and easy tools and tem10 plates for businesses to use to reduce cost and time to 

11 measure their products’ carbon lifecycle; 

12 (10) consult with the Secretary of Energy, the 

13 Secretary of Commerce, the Federal Trade Commis14 sion, and other Federal agencies, as necessary; 

15 (11) gather input from stakeholders through con16 sultations, public workshops or hearings with rep17 resentatives of consumer product manufacturers, con18 sumer groups, and environmental groups; 

19 (12) utilize systems for verification and product 

20 certification that will ensure that claims manufactur21 ers make about their products are valid; 

22 (13) create a process for reviewing the accuracy 

23 of product carbon label information and protecting 

24 the product carbon label in the case of a change in 

25 the product’s energy source, supply chain, ingredients, 

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1 or other factors, and specify the frequency to which 

2 data should be updated; and 

3 (14) develop a standardized, easily understand4 able carbon label, if appropriate, and create a process 

5 for responding to inaccuracies and misuses of such a 

6 label. 

7 (c) REPORT TO CONGRESS.—Not later than 5 years 

8 after the program is established pursuant to subsection (b), 

9 the Administrator shall report to Congress on the effective10 ness and impact of the program, the level of voluntary par11 ticipation, and any recommendations for additional meas12 ures. 

13 (d) DEFINITIONS.—As used in this section— 

14 (1) the term ‘‘carbon content’’ means the amount 

15 of greenhouse gas emissions and their warming im16 pact on the atmosphere expressed in carbon dioxide 

17 equivalent associated with a product’s value chain; 

18 (2) the term ‘‘carbon footprint’’ means the level 

19 of greenhouse gas emissions produced by a particular 

20 activity, service, or entity; and 

21 (3) the term ‘‘carbon lifecycle’’ means the green22 house gas emissions that are released as part of the 

23 processes of creating, producing, processing or manu24 facturing, modifying, transporting, distributing, stormstockstill on PROD1PC66 with BILLS

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1 ing, using, recycling, or disposing of goods and serv2 ices. 

3 (e) AUTHORIZATION OF APPROPRIATIONS.—There is 

4 authorized to be appropriated to the Administrator 

5 $5,000,000 for the study required by subsection (a) and 

6 $25,000,000 for each of fiscal years 2010 through 2025 for 

7 the program required under subsection (b). 

8 TITLE III—REDUCING GLOBAL 

9 WARMING POLLUTION 

10 SEC. 301. SHORT TITLE. 

11 This title, and sections 112, 116, 221, 222, 223, and 

12 401 of this Act, may be cited as the ‘‘Safe Climate Act’’. 

13 Subtitle A—Reducing Global 

14 Warming Pollution 

15 SEC. 311. REDUCING GLOBAL WARMING POLLUTION. 

16 The Clean Air Act (42 U.S.C. and following) is amend17 ed by adding after title VI the following new title: 

18 ‘‘TITLE VII—GLOBAL WARMING 

19 POLLUTION REDUCTION PRO20 GRAM 

21 ‘‘PART A—GLOBAL WARMING POLLUTION 

22 REDUCTION GOALS AND TARGETS 

23 ‘‘SEC. 701. FINDINGS AND PURPOSE. 

24 ‘‘(a) FINDINGS.—The Congress finds as follows: 

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1 ‘‘(1) Global warming poses a significant threat 

2 to the national security, economy, public health and 

3 welfare, and environment of the United States, as well 

4 as of other nations. 

5 ‘‘(2) Reviews of scientific studies, including by 

6 the Intergovernmental Panel on Climate Change and 

7 the National Academy of Sciences, demonstrate that 

8 global warming is the result of the combined anthro9 pogenic greenhouse gas emissions from numerous 

10 sources of all types and sizes. Each increment of emis11 sion, when combined with other emissions, causes or 

12 contributes materially to the acceleration and extent 

13 of global warming and its adverse effects for the life14 time of such gas in the atmosphere. Accordingly, con15 trolling emissions in small as well as large amounts 

16 is essential to prevent, slow the pace of, reduce the 

17 threats from, and mitigate global warming and its 

18 adverse effects. 

19 ‘‘(3) Because they induce global warming, green20 house gas emissions cause or contribute to injuries to 

21 persons in the United States, including— 

22 ‘‘(A) adverse health effects such as disease 

23 and loss of life; 

24 ‘‘(B) displacement of human populations; 

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1 ‘‘(C) damage to property and other interests 

2 related to ocean levels, acidification, and ice 

3 changes; 

4 ‘‘(D) severe weather and seasonal changes; 

5 ‘‘(E) disruption, costs, and losses to busi6 ness, trade, employment, farms, subsistence, aes7 thetic enjoyment of the environment, recreation, 

8 culture, and tourism; 

9 ‘‘(F) damage to plants, forests, lands, and 

10 waters; 

11 ‘‘(G) harm to wildlife and habitat; 

12 ‘‘(H) scarcity of water and the decreased 

13 abundance of other natural resources; 

14 ‘‘(I) worsening of tropospheric air pollution; 

15 ‘‘(J) substantial threats of similar damage; 

16 and 

17 ‘‘(K) other harm. 

18 ‘‘(4) That many of these effects and risks of fu19 ture effects of global warming are widely shared does 

20 not minimize the adverse effects individual persons 

21 have suffered, will suffer, and are at risk of suffering 

22 because of global warming. 

23 ‘‘(5) That some of the adverse and potentially 

24 catastrophic effects of global warming are at risk of 

25 occurring and not a certainty does not negate the 

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1 harm persons suffer from actions that increase the 

2 likelihood, extent, and severity of such future impacts. 

3 ‘‘(6) Nations of the world look to the United 

4 States for leadership in addressing the threat of and 

5 harm from global warming. Full implementation of 

6 the Safe Climate Act is critical to engage other na7 tions in an international effort to mitigate the threat 

8 of and harm from global warming. 

9 ‘‘(7) Global warming and its adverse effects are 

10 occurring and are likely to continue and increase in 

11 magnitude, and to do so at a greater and more harm12 ful rate, unless the Safe Climate Act is fully imple13 mented and enforced in an expeditious manner. 

14 ‘‘(b) PURPOSE.—It is the general purpose of the Safe 

15 Climate Act to help prevent, reduce the pace of, mitigate, 

16 and remedy global warming and its adverse effects. To ful17 fill such purpose, it is necessary to— 

18 ‘‘(1) require the timely fulfillment of all govern19 mental acts and duties, both substantive and proce20 dural, and the prompt compliance of covered entities 

21 with the requirements of the Safe Climate Act; 

22 ‘‘(2) establish and maintain an effective, trans23 parent, and fair market for emission allowances and 

24 preserve the integrity of the cap on emissions and of 

25 offset credits; 

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1 ‘‘(3) advance the production and deployment of 

2 clean energy and energy efficiency technologies; and 

3 ‘‘(4) ensure effective enforcement of the Safe Cli4 mate Act by citizens, States, Indian tribes, and all 

5 levels of government because each violation of the Safe 

6 Climate Act is likely to result in an additional incre7 ment of greenhouse gas emission and will slow the 

8 pace of implementation of the Safe Climate Act and 

9 delay the achievement of the goals set forth in section 

10 702, and cause or contribute to global warming and 

11 its adverse effects. 

12 ‘‘SEC. 702. ECONOMY-WIDE REDUCTION GOALS. 

13 ‘‘The goals of the Safe Climate Act are to reduce stead14 ily the quantity of United States greenhouse gas emissions 

15 such that— 

16 ‘‘(1) in 2012, the quantity of United States 

17 greenhouse gas emissions does not exceed 97 percent 

18 of the quantity of United States greenhouse gas emis19 sions in 2005; 

20 ‘‘(2) in 2020, the quantity of United States 

21 greenhouse gas emissions does not exceed 80 percent 

22 of the quantity of United States greenhouse gas emis23 sions in 2005; 

24 ‘‘(3) in 2030, the quantity of United States 

25 greenhouse gas emissions does not exceed 58 percent 

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1 of the quantity of United States greenhouse gas emis2 sions in 2005; and 

3 ‘‘(4) in 2050, the quantity of United States 

4 greenhouse gas emissions does not exceed 17 percent 

5 of the quantity of United States greenhouse gas emis6 sions in 2005. 

7 ‘‘SEC. 703. REDUCTION TARGETS FOR SPECIFIED SOURCES. 

8 ‘‘(a) IN GENERAL.—The regulations issued under sec9 tion 721 shall cap and reduce annually the greenhouse gas 

10 emissions of capped sources each calendar year beginning 

11 in 2012 such that— 

12 ‘‘(1) in 2012, the quantity of greenhouse gas 

13 emissions from capped sources does not exceed 97 per14 cent of the quantity of greenhouse gas emissions from 

15 such sources in 2005; 

16 ‘‘(2) in 2020, the quantity of greenhouse gas 

17 emissions from capped sources does not exceed 83 per18 cent of the quantity of greenhouse gas emissions from 

19 such sources in 2005; 

20 ‘‘(3) in 2030, the quantity of greenhouse gas 

21 emissions from capped sources does not exceed 58 per22 cent of the quantity of greenhouse gas emissions from 

23 such sources in 2005; and 

24 ‘‘(4) in 2050, the quantity of greenhouse gas 

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1 cent of the quantity of greenhouse gas emissions from 

2 such sources in 2005. 

3 ‘‘(b) DEFINITION.—For purposes of this section, the 

4 term ‘greenhouse gas emissions from such sources in 2005’ 

5 means emissions to which section 722 would have applied 

6 if the requirements of this title for the specified year had 

7 been in effect for 2005. 

8 ‘‘SEC. 704. SUPPLEMENTAL POLLUTION REDUCTIONS. 

9 ‘‘For the purposes of decreasing the likelihood of cata10 strophic climate change, preserving tropical forests, build11 ing capacity to generate offset credits, and facilitating 

12 international action on global warming, the Administrator 

13 shall set aside the percentage specified in section 781 of the 

14 quantity of emission allowances established under section 

15 721(a) for each year, to be used to achieve a reduction of 

16 greenhouse gas emissions from deforestation in developing 

17 countries in accordance with part E. In 2020, activities 

18 supported under part E shall provide greenhouse gas reduc19 tions in an amount equal to an additional 10 percentage 

20 points of reductions from United States greenhouse gas 

21 emissions in 2005. The Administrator shall distribute these 

22 allowances with respect to activities in countries that enter 

23 into and implement agreements or arrangements relating 

24 to reduced deforestation as described in section 754(a)(2). 

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1 ‘‘SEC. 705. REVIEW AND PROGRAM RECOMMENDATIONS. 

2 ‘‘(a) IN GENERAL.—The Administrator shall, in con3 sultation with appropriate Federal agencies, submit to Con4 gress a report not later than July 1, 2013, and every 4 

5 years thereafter, that includes— 

6 ‘‘(1) an analysis of key findings based on the lat7 est scientific information and data relevant to global 

8 climate change; 

9 ‘‘(2) an analysis of capabilities to monitor and 

10 verify greenhouse gas reductions on a worldwide 

11 basis, including for the United States, as required 

12 under the Safe Climate Act; and 

13 ‘‘(3) an analysis of the status of worldwide 

14 greenhouse gas reduction efforts, including implemen15 tation of the Safe Climate Act and other policies, both 

16 domestic and international, for reducing greenhouse 

17 gas emissions, preventing dangerous atmospheric con18 centrations of greenhouse gases, preventing significant 

19 irreversible consequences of climate change, and re20 ducing vulnerability to the impacts of climate change. 

21 ‘‘(b) EXCEPTION.—Paragraph (3) of subsection (a) 

22 shall not apply to the first report submitted under such sub23 section. 

24 ‘‘(c) LATEST SCIENTIFIC INFORMATION.—The analysis 

25 required under subsection (a)(1) shall— 

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1 ‘‘(1) address existing scientific information and 

2 reports, considering, to the greatest extent possible, the 

3 most recent assessment report of the Intergovern4 mental Panel on Climate Change, reports by the 

5 United States Global Change Research Program, the 

6 Natural Resources Climate Change Adaptation Panel 

7 established under section 475 of the American Clean 

8 Energy and Security Act of 2009, and Federal agen9 cies, and the European Union’s global temperature 

10 data assessment; and 

11 ‘‘(2) review trends and projections for— 

12 ‘‘(A) global and country-specific annual 

13 emissions of greenhouse gases, and cumulative 

14 greenhouse gas emissions produced between 1850 

15 and the present, including— 

16 ‘‘(i) global cumulative emissions of an17 thropogenic greenhouse gases; 

18 ‘‘(ii) global annual emissions of an19 thropogenic greenhouse gases; and 

20 ‘‘(iii) by country, annual total, annual 

21 per capita, and cumulative anthropogenic 

22 emissions of greenhouse gases for the top 50 

23 emitting nations; 

24 ‘‘(B) significant changes, both globally and 

25 by region, in annual net non-anthropogenic 

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1 greenhouse gas emissions from natural sources, 

2 including permafrost, forests, or oceans; 

3 ‘‘(C) global atmospheric concentrations of 

4 greenhouse gases, expressed in annual concentra5 tion units as well as carbon dioxide equivalents 

6 based on 100-year global warming potentials; 

7 ‘‘(D) major climate forcing factors, such as 

8 aerosols; 

9 ‘‘(E) global average temperature, expressed 

10 as seasonal and annual averages in land, ocean, 

11 and land-plus-ocean averages; and 

12 ‘‘(F) sea level rise; 

13 ‘‘(3) assess the current and potential impacts of 

14 global climate change on— 

15 ‘‘(A) human populations, including impacts 

16 on public health, economic livelihoods, subsist17 ence, human infrastructure, and displacement or 

18 permanent relocation due to flooding, severe 

19 weather, extended drought, erosion, or other eco20 system changes; 

21 ‘‘(B) freshwater systems, including water 

22 resources for human consumption and agri23 culture and natural and managed ecosystems, 

24 flood and drought risks, and relative humidity; 

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1 ‘‘(C) the carbon cycle, including impacts re2 lated to the thawing of permafrost, the frequency 

3 and intensity of wildfire, and terrestrial and 

4 ocean carbon sinks; 

5 ‘‘(D) ecosystems and animal and plant pop6 ulations, including impacts on species abun7 dance, phenology, and distribution; 

8 ‘‘(E) oceans and ocean ecosystems, includ9 ing effects on sea level, ocean acidity, ocean tem10 peratures, coral reefs, ocean circulation, fisheries, 

11 and other indicators of ocean ecosystem health; 

12 ‘‘(F) the cryosphere, including effects on ice 

13 sheet mass balance, mountain glacier mass bal14 ance, and sea-ice extent and volume; 

15 ‘‘(G) changes in the intensity, frequency, or 

16 distribution of severe weather events, including 

17 precipitation, tropical cyclones, tornadoes, and 

18 severe heat waves; 

19 ‘‘(H) agriculture and forest systems; and 

20 ‘‘(I) any other indicators the Administrator 

21 deems appropriate; 

22 ‘‘(4) summarize any significant socio-economic 

23 impacts of climate change in the United States, in24 cluding the territories of the United States, drawing 

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1 on work by Federal agencies and the academic lit2 erature, including impacts on— 

3 ‘‘(A) public health; 

4 ‘‘(B) economic livelihoods and subsistence; 

5 ‘‘(C) displacement or permanent relocation 

6 due to flooding, severe weather, extended drought, 

7 or other ecosystem changes; 

8 ‘‘(D) human infrastructure, including coast9 al infrastructure vulnerability to extreme events 

10 and sea level rise, river floodplain infrastructure, 

11 and sewer and water management systems; 

12 ‘‘(E) agriculture and forests, including ef13 fects on potential growing season, distribution, 

14 and yield; 

15 ‘‘(F) water resources for human consump16 tion, agriculture and natural and managed eco17 systems, flood and drought risks, and relative hu18 midity; 

19 ‘‘(G) energy supply and use; and 

20 ‘‘(H) transportation; 

21 ‘‘(5) in assessing risks and impacts, use a risk 

22 management framework, including both qualitative 

23 and quantitative measures, to assess the observed and 

24 projected impacts of current and future climate 

25 change, accounting for— 

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1 ‘‘(A) both monetized and non-monetized 

2 losses; 

3 ‘‘(B) potential nonlinear, abrupt, or essen4 tially irreversible changes in the climate system; 

5 ‘‘(C) potential nonlinear increases in the 

6 cost of impacts; 

7 ‘‘(D) potential low-probability, high impact 

8 events; and 

9 ‘‘(E) whether impacts are transitory or es10 sentially permanent; and 

11 ‘‘(6) based on the findings of the Administrator 

12 under this section, as well as assessments produced by 

13 the Intergovernmental Panel on Climate Change, the 

14 United States Global Change Research program, and 

15 other relevant scientific entities— 

16 ‘‘(A) describe increased risks to natural sys17 tems and society that would result from an in18 crease in global average temperature 3.6 degrees 

19 Fahrenheit (2 degrees Celsius) above the pre-in20 dustrial average or an increase in atmospheric 

21 greenhouse gas concentrations above 450 parts 

22 per million carbon dioxide equivalent; and 

23 ‘‘(B) identify and assess— 

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1 ‘‘(i) significant residual risks not 

2 avoided by the thresholds described in sub3 paragraph (A); 

4 ‘‘(ii) alternative thresholds or targets 

5 that may more effectively limit the risks 

6 identified pursuant to clause (i); and 

7 ‘‘(iii) thresholds above those described 

8 in subparagraph (A) which significantly in9 crease the risk of certain impacts or render 

10 them essentially permanent. 

11 ‘‘(d) STATUS OF MONITORING AND VERIFICATION CA12 PABILITIES TO EVALUATE GREENHOUSE GAS REDUCTION

13 EFFORTS.—The analysis required under subsection (a)(2) 

14 shall evaluate the capabilities of the monitoring, reporting, 

15 and verification systems used to quantify progress in 

16 achieving reductions in greenhouse gas emissions both glob17 ally and in the United States (as described in section 702), 

18 including— 

19 ‘‘(1) quantification of emissions and emission re20 ductions by entities participating in the cap and 

21 trade program under this title; 

22 ‘‘(2) quantification of emissions and emission re23 ductions by entities participating in the offset pro24 gram under this title; 

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1 ‘‘(3) quantification of emission and emissions re2 ductions by entities regulated by performance stand3 ards; 

4 ‘‘(4) quantification of aggregate net emissions 

5 and emissions reductions by the United States; and 

6 ‘‘(5) quantification of global changes in net emis7 sions and in sources and sinks of greenhouse gases. 

8 ‘‘(e) STATUS OF GREENHOUSE GAS REDUCTION EF9 FORTS.—The analysis required under subsection (a)(3) 

10 shall address— 

11 ‘‘(1) whether the programs under Safe Climate 

12 Act and other Federal statutes are resulting in suffi13 cient United States greenhouse gas emissions reduc14 tions to meet the emissions reduction goals described 

15 in section 702, taking into account the use of offsets; 

16 and 

17 ‘‘(2) whether United States actions, taking into 

18 account international actions, commitments, and 

19 trends, and considering the range of plausible emis20 sions scenarios, are sufficient to avoid— 

21 ‘‘(A) atmospheric greenhouse gas concentra22 tions above 450 parts per million carbon dioxide 

23 equivalent; 

24 ‘‘(B) global average surface temperature 3.6 

25 degrees Fahrenheit (2 degrees Celsius) above the 

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1 pre-industrial average, or such other temperature 

2 thresholds as the Administrator deems appro3 priate; and 

4 ‘‘(C) other temperature or greenhouse gas 

5 thresholds identified pursuant to subsection 

6 (c)(6)(B). 

7 ‘‘(f) RECOMMENDATIONS.— 

8 ‘‘(1) LATEST SCIENTIFIC INFORMATION.—Based 

9 on the analysis described in subsection (a)(1), each re10 port under subsection (a) shall identify actions that 

11 could be taken to— 

12 ‘‘(A) improve the characterization of 

13 changes in the earth-climate system and impacts 

14 of global climate change; 

15 ‘‘(B) better inform decision making and ac16 tions related to global climate change; 

17 ‘‘(C) mitigate risks to natural and social 

18 systems; and 

19 ‘‘(D) design policies to better account for 

20 climate risks. 

21 ‘‘(2) MONITORING, REPORTING AND

22 VERIFICATION.—Based on the analysis described in 

23 subsection (a)(2), each report under subsection (a) 

24 shall identify key gaps in measurement, reporting, 

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1 tions to improve the accuracy and reliability of those 

2 capabilities. 

3 ‘‘(3) STATUS OF GREENHOUSE GAS REDUCTION

4 EFFORTS.—Based on the analysis described in sub5 section (a)(3), taking into account international ac6 tions, commitments, and trends, and considering the 

7 range of plausible emissions scenarios, each report 

8 under subsection (a) shall identify— 

9 ‘‘(A) the quantity of additional reductions 

10 required to meet the emissions reduction goals in 

11 section 702; 

12 ‘‘(B) the quantity of additional reductions 

13 in global greenhouse gas emissions needed to 

14 avoid the concentration and temperature thresh15 olds identified in subsection (e); and 

16 ‘‘(C) possible strategies and approaches for 

17 achieving additional reductions. 

18 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 

19 are authorized to be appropriated to carry out this section 

20 such sums as may be necessary. 

21 ‘‘SEC. 706. NATIONAL ACADEMY REVIEW. 

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

23 date of enactment of this title, the Administrator shall offer 

24 to enter into a contract with the National Academy of 

25 Sciences (in this section referred to as the ‘Academy’) under 

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1 which the Academy shall, not later than July 1, 2014, and 

2 every 4 years thereafter, submit to Congress and the Admin3 istrator a report that includes— 

4 ‘‘(1) a review of the most recent report and rec5 ommendations issued under section 705; and 

6 ‘‘(2) an analysis of technologies to achieve reduc7 tions in greenhouse gas emissions. 

8 ‘‘(b) FAILURE TO ISSUE A REPORT.—In the event that 

9 the Administrator has not issued all or part of the most 

10 recent report required under section 705, the Academy shall 

11 conduct its own review and analysis of the required infor12 mation. 

13 ‘‘(c) TECHNOLOGICAL INFORMATION.—The analysis 

14 required under subsection (a)(2) shall— 

15 ‘‘(1) review existing technological information 

16 and reports, including the most recent reports by the 

17 Department of Energy, the United States Global 

18 Change Research Program, the Intergovernmental 

19 Panel on Climate Change, and the International En20 ergy Agency and any other relevant information on 

21 technologies or practices that reduce or limit green22 house gas emissions; 

23 ‘‘(2) include the participation of technical ex24 perts from relevant private industry sectors; 

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1 ‘‘(3) review the current and future projected de2 ployment of technologies and practices in the United 

3 States that reduce or limit greenhouse gas emissions, 

4 including— 

5 ‘‘(A) technologies for capture and sequestra6 tion of greenhouse gases; 

7 ‘‘(B) technologies to improve energy effi8 ciency; 

9 ‘‘(C) low- or zero-greenhouse gas emitting 

10 energy technologies; 

11 ‘‘(D) low- or zero-greenhouse gas emitting 

12 fuels; 

13 ‘‘(E) biological sequestration practices and 

14 technologies; and 

15 ‘‘(F) any other technologies the Academy 

16 deems relevant; and 

17 ‘‘(4) review and compare the emissions reduction 

18 potential, commercial viability, market penetration, 

19 investment trends, and deployment of the technologies 

20 described in paragraph (3), including— 

21 ‘‘(A) the need for additional research and 

22 development, including publicly funded research 

23 and development; 

24 ‘‘(B) the extent of commercial deployment, 

25 including, where appropriate, a comparison to 

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1 the cost and level of deployment of conventional 

2 fossil fuel-fired energy technologies and devices; 

3 and 

4 ‘‘(C) an evaluation of any substantial tech5 nological, legal, or market-based barriers to com6 mercial deployment. 

7 ‘‘(d) RECOMMENDATIONS.— 

8 ‘‘(1) LATEST SCIENTIFIC INFORMATION.—Based 

9 on the review described in subsection (a)(1), the Acad10 emy shall identify actions that could be taken to— 

11 ‘‘(A) improve the characterization of 

12 changes in the earth-climate system and impacts 

13 of global climate change; 

14 ‘‘(B) better inform decision making and ac15 tions related to global climate change; 

16 ‘‘(C) mitigate risks to natural and social 

17 systems; 

18 ‘‘(D) design policies to better account for 

19 climate risks; and 

20 ‘‘(E) improve the accuracy and reliability 

21 of capabilities to monitor, report, and verify 

22 greenhouse gas emissions reduction efforts. 

23 ‘‘(2) TECHNOLOGICAL INFORMATION.—Based on 

24 the analysis described in subsection (a)(2), the Acad25 emy shall identify— 

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1 ‘‘(A) additional emissions reductions that 

2 may be possible as a result of technologies de3 scribed in the analysis; 

4 ‘‘(B) barriers to the deployment of such 

5 technologies; and 

6 ‘‘(C) actions that could be taken to speed de7 ployment of such technologies. 

8 ‘‘(3) STATUS OF GREENHOUSE GAS REDUCTION

9 EFFORTS.—Based on the review described in sub10 section (a)(1), the Academy shall identify— 

11 ‘‘(A) the quantity of additional reductions 

12 required to meet the emissions reduction goals 

13 described in section 702; and 

14 ‘‘(B) the quantity of additional reductions 

15 in global greenhouse gas emissions needed to 

16 avoid the concentration and temperature thresh17 olds described in section 705(c)(6)(A) or identi18 fied pursuant to section 705(c)(6)(B). 

19 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There are 

20 authorized to be appropriated to carry out this section such 

21 sums as may be necessary. 

22 ‘‘SEC. 707. PRESIDENTIAL RESPONSE AND RECOMMENDA23 TIONS. 

24 ‘‘Not later than July 1, 2015, and every 4 years there25 after— 

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1 ‘‘(1) the President shall direct relevant Federal 

2 agencies to use existing statutory authority to take 

3 appropriate actions identified in the reports sub4 mitted under sections 705 and 706 and to address 

5 any shortfalls identified in such reports; and 

6 ‘‘(2) in the event that the National Academy of 

7 Sciences has concluded, in the most recent report sub8 mitted under section 706, that the United States will 

9 not achieve the necessary domestic greenhouse gas 

10 emissions reductions, or that global actions will not 

11 maintain safe global average surface temperature and 

12 atmospheric greenhouse gas concentration thresholds, 

13 the President shall submit to Congress a plan identi14 fying domestic and international actions that will 

15 achieve necessary additional greenhouse gas reduc16 tions, including any recommendations for legislative 

17 action. 

18 ‘‘PART B—DESIGNATION AND REGISTRATION OF 

19 GREENHOUSE GASES 

20 ‘‘SEC. 711. DESIGNATION OF GREENHOUSE GASES. 

21 ‘‘(a) GREENHOUSE GASES.—For purposes of this title, 

22 the following are greenhouse gases: 

23 ‘‘(1) Carbon dioxide. 

24 ‘‘(2) Methane. 

25 ‘‘(3) Nitrous oxide. 

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1 ‘‘(4) Sulfur hexafluoride. 

2 ‘‘(5) Hydrofluorocarbons from a chemical manu3 facturing process at an industrial stationary source. 

4 ‘‘(6) Any perfluorocarbon. 

5 ‘‘(7) Nitrogen trifluoride. 

6 ‘‘(8) Any other anthropogenic gas designated as 

7 a greenhouse gas by the Administrator under this sec8 tion. 

9 ‘‘(b) DETERMINATION ON ADMINISTRATOR’S INITIA10 TIVE.—The Administrator shall, by rule— 

11 ‘‘(1) determine whether 1 metric ton of another 

12 anthropogenic gas makes the same or greater con13 tribution to global warming over 100 years as 1 met14 ric ton of carbon dioxide; 

15 ‘‘(2) determine the carbon dioxide equivalent 

16 value for each gas with respect to which the Adminis17 trator makes an affirmative determination under 

18 paragraph (1); 

19 ‘‘(3) for each gas with respect to which the Ad20 ministrator makes an affirmative determination 

21 under paragraph (1) and that is used as a substitute 

22 for a class I or class II substance under title VI, de23 termine the extent to which to regulate that gas under 

24 section 619 and specify appropriate compliance obli25 gations under section 619; 

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1 ‘‘(4) designate as a greenhouse gas for purposes 

2 of this title each gas for which the Administrator 

3 makes an affirmative determination under paragraph 

4 (1), to the extent that it is not regulated under section 

5 619; and 

6 ‘‘(5) specify the appropriate compliance obliga7 tions under this title for each gas designated as a 

8 greenhouse gas under paragraph (4). 

9 ‘‘(c) PETITIONS TO DESIGNATE A GREENHOUSE

10 GAS.— 

11 ‘‘(1) IN GENERAL.—Any person may petition the 

12 Administrator to designate as a greenhouse gas any 

13 anthropogenic gas 1 metric ton of which makes the 

14 same or greater contribution to global warming over 

15 100 years as 1 metric ton of carbon dioxide. 

16 ‘‘(2) CONTENTS OF PETITION.—The petitioner 

17 shall provide sufficient data, as specified by rule by 

18 the Administrator, to demonstrate that the gas is like19 ly to be a greenhouse gas and is likely to be produced, 

20 imported, used, or emitted in the United States. To 

21 the extent practicable, the petitioner shall also iden22 tify producers, importers, distributors, users, and 

23 emitters of the gas in the United States. 

24 ‘‘(3) REVIEW AND ACTION BY THE ADMINIS25 TRATOR.—Not later than 90 days after receipt of a 

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1 petition under paragraph (2), the Administrator shall 

2 determine whether the petition is complete and notify 

3 the petitioner and the public of the decision. 

4 ‘‘(4) ADDITIONAL INFORMATION.—The Adminis5 trator may require producers, importers, distributors, 

6 users, or emitters of the gas to provide information on 

7 the contribution of the gas to global warming over 

8 100 years compared to carbon dioxide. 

9 ‘‘(5) TREATMENT OF PETITION.—For any sub10 stance used as a substitute for a class I or class II 

11 substance under title VI, the Administrator may elect 

12 to treat a petition under this subsection as a petition 

13 to list the substance as a class II, group II substance 

14 under section 619, and may require the petition to be 

15 amended to address listing criteria promulgated 

16 under that section. 

17 ‘‘(6) DETERMINATION.—Not later than 2 years 

18 after receipt of a complete petition, the Administrator 

19 shall, after notice and an opportunity for comment— 

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 equal 

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1 to or greater than that made by 1 metric 

2 ton of carbon dioxide; and 

3 ‘‘(ii) an explanation of the decision; or 

4 ‘‘(B) determine that 1 metric ton of the gas 

5 makes a contribution to global warming over 100 

6 years that is equal to or greater than that made 

7 by 1 metric ton of carbon dioxide, and take the 

8 actions described in subsection (b) with respect 

9 to such gas. 

10 ‘‘(7) GROUNDS FOR DENIAL.—The Administrator 

11 may not deny a petition under this subsection solely 

12 on the basis of inadequate Environmental Protection 

13 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 written 

2 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 writ12 ing 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 generated 

21 as a byproduct during the production or use of 

22 another fluorinated gas, unless— 

23 ‘‘(i) the gas is designated as a green24 house gas under this section or is an ozonemstockstill on PROD1PC66 with BILLS

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1 depleting substance listed as a class I or 

2 class II substance under title VI; 

3 ‘‘(ii) the Administrator has determined 

4 that 1 metric ton of such gas does not make 

5 a contribution to global warming that is 

6 equal to or greater than that made by 1 

7 metric ton of carbon dioxide; or 

8 ‘‘(iii) the person manufacturing or im9 porting the gas for distribution into inter10 state commerce, or emitting the gas, has 

11 submitted to the Administrator, at least 90 

12 days before the start of such manufacture, 

13 introduction into commerce, or emission, a 

14 notice of such person’s manufacture, intro15 duction into commerce, or emission of such 

16 gas, and the Administrator has not deter17 mined that notice or a substantially similar 

18 notice is incomplete. 

19 ‘‘(B) ALTERNATIVE COMPLIANCE.—For a 

20 gas that is a substitute for a class I or class II 

21 substance under title VI and either has been list22 ed as acceptable for use under section 612 or is 

23 currently subject to evaluation under section 612, 

24 the Administrator may accept the notice and in25 formation provided pursuant to that section as 

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1 fulfilling the obligation under clause (iii) of sub2 paragraph (A). 

3 ‘‘(2) REVIEW AND ACTION BY THE ADMINIS4 TRATOR.— 

5 ‘‘(A) COMPLETENESS.—Not later than 90 

6 days after receipt of notice under paragraph 

7 (1)(A)(iii) or (B), the Administrator shall deter8 mine whether the notice is complete. 

9 ‘‘(B) DETERMINATION.— If the Adminis10 trator determines that the notice is complete, the 

11 Administrator shall, after notice and an oppor12 tunity for comment, not later than 12 months 

13 after receipt of the notice— 

14 ‘‘(i) issue and publish in the Federal 

15 Register a determination that 1 metric ton 

16 of the gas does not make a contribution to 

17 global warming over 100 years that is equal 

18 to or greater than that made by 1 metric 

19 ton of carbon dioxide and an explanation of 

20 the decision; or 

21 ‘‘(ii) determine that 1 metric ton of the 

22 gas makes a contribution to global warming 

23 over 100 years that is equal to or greater 

24 than that made by 1 metric ton of carbon 

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1 dioxide, and take the actions described in 

2 subsection (b) with respect to such gas. 

3 ‘‘(f) REGULATIONS.—Not later than one year after the 

4 date of enactment of this title, the Administrator shall pro5 mulgate regulations to carry out this section. Such regula6 tions shall include— 

7 ‘‘(1) requirements for the contents of a petition 

8 submitted under subsection (c); 

9 ‘‘(2) requirements for the contents of a notice re10 quired under subsection (e); and 

11 ‘‘(3) methods and standards for evaluating the 

12 carbon dioxide equivalent value of a gas. 

13 ‘‘(g) GASES REGULATED UNDER TITLE VI.—The Ad14 ministrator shall not designate a gas as a greenhouse gas 

15 under this section to the extent that the gas is regulated 

16 under title VI. 

17 ‘‘(h) SAVINGS CLAUSE.—Nothing in this section shall 

18 be interpreted to relieve any person from complying with 

19 the requirements of section 612. 

20 ‘‘SEC. 712. CARBON DIOXIDE EQUIVALENT VALUE OF 

21 GREENHOUSE GASES. 

22 ‘‘(a) MEASURE OF QUANTITY OF GREENHOUSE

23 GASES.—Any provision of this title or title VIII that refers 

24 to a quantity or percentage of a quantity of greenhouse 

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1 gases shall mean the quantity or percentage of the green2 house gases expressed in carbon dioxide equivalents. 

3 ‘‘(b) INITIAL VALUE.—Except as provided by the Ad4 ministrator under this section or section 711— 

5 ‘‘(1) the carbon dioxide equivalent value of 

6 greenhouse gases for purposes of this Act shall be as 

7 follows: 

‘‘CARBON DIOXIDE EQUIVALENT OF 1 TON OF LISTED 

GREENHOUSE GASES 

Greenhouse gas (1 metric ton) Carbon dioxide equivalent 

(metric tons) 

Carbon dioxide 1 

Methane 25 

Nitrous oxide 298 

HFC-23 14,800 

HFC-125 3,500 

HFC-134a 1,430 

HFC-143a 4,470 

HFC-152a 124 

HFC-227ea 3,220 

HFC-236fa 9,810 

HFC-4310mee 1,640 

CF4 7,390 

C2F6 12,200 

C4F10 8,860 

C6F14 9,300 

SF6 22,800 

NF3 17,200 

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1 ; and 

2 ‘‘(2) the carbon dioxide equivalent value for pur3 poses of this Act for any greenhouse gas not listed in 

4 the table under paragraph (1) shall be the 100-year 

5 Global Warming Potentials provided in the Intergov6 ernmental Panel on Climate Change Fourth Assess7 ment 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 on 

15 a determination of the number of metric tons of 

16 carbon dioxide that makes the same contribution 

17 to global warming over 100 years as 1 metric 

18 ton of each greenhouse gas; and 

19 ‘‘(B) publish in the Federal Register the re20 sults of that review and any revisions. 

21 ‘‘(2) A revised determination published in the 

22 Federal Register under paragraph (1)(B) shall take 

23 effect for greenhouse gas emissions starting on Janu24 ary 1 of the first calendar year starting at least 9 

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1 months after the date on which the revised determina2 tion was published. 

3 ‘‘(3) The Administrator may decrease the fre4 quency of review and revision under paragraph (1) if 

5 the Administrator determines that such decrease is 

6 appropriate in order to synchronize such review and 

7 revision with any similar review process carried out 

8 pursuant to the United Nations Framework Conven9 tion on Climate Change, done at New York on May 

10 9, 1992, or to an agreement negotiated under that 

11 convention, except that in no event shall the Adminis12 trator carry out such review and revision any less fre13 quently than every 10 years. 

14 ‘‘(d) METHODOLOGY.—In setting carbon dioxide equiv15 alent values, for purposes of this section or section 711, the 

16 Administrator shall take into account publications by the 

17 Intergovernmental Panel on Climate Change or a successor 

18 organization under the auspices of the United Nations En19 vironmental Programme and the World Meteorological Or20 ganization. 

21 ‘‘SEC. 713. GREENHOUSE GAS REGISTRY. 

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

23 ‘‘(1) CLIMATE REGISTRY.—The term ‘Climate 

24 Registry’ means the greenhouse gas emissions registry 

25 jointly established and managed by more than 40 

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1 States and Indian tribes in 2007 to collect high-qual2 ity greenhouse gas emission data from facilities, cor3 porations, and other organizations to support various 

4 greenhouse gas emission reporting and reduction poli5 cies for the member States and Indian tribes. 

6 ‘‘(2) REPORTING ENTITY.—The term ‘reporting 

7 entity’ means— 

8 ‘‘(A) a covered entity; 

9 ‘‘(B) an entity that— 

10 ‘‘(i) would be a covered entity if it had 

11 emitted, produced, imported, manufactured, 

12 or delivered in 2008 or any subsequent year 

13 more than the applicable threshold level in 

14 the definition of covered entity in para15 graph (13) of section 700; and 

16 ‘‘(ii) has emitted, produced, imported, 

17 manufactured, or delivered in 2008 or any 

18 subsequent year more than the applicable 

19 threshold level in the definition of covered 

20 entity in paragraph (13) of section 700, 

21 provided that the figure of 25,000 tons of 

22 carbon dioxide equivalent is read instead as 

23 10,000 tons of carbon dioxide equivalent 

24 and the figure of 460,000,000 cubic feet is 

25 read instead as 184,000,000 cubic feet; 

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1 ‘‘(C) any other entity that emits a green2 house gas, or produces, imports, manufactures, 

3 or delivers material whose use results or may re4 sult in greenhouse gas emissions if the Adminis5 trator determines that reporting under this sec6 tion by such entity will help achieve the purposes 

7 of this title or title VIII; 

8 ‘‘(D) any vehicle fleet with emissions of 

9 more than 25,000 tons of carbon dioxide equiva10 lent on an annual basis, if the Administrator de11 termines that the inclusion of such fleet will help 

12 achieve the purposes of this title or title VIII; or 

13 ‘‘(E) any entity that delivers electricity to 

14 an energy-intensive facility in an industrial sec15 tor that meets the energy or greenhouse gas in16 tensity criteria in section 764(b)(2)(A)(i). 

17 ‘‘(b) REGULATIONS.— 

18 ‘‘(1) IN GENERAL.—Not later than 6 months 

19 after the date of enactment of this title, the Adminis20 trator shall issue regulations establishing a Federal 

21 greenhouse gas registry. Such regulations shall— 

22 ‘‘(A) require reporting entities to submit to 

23 the Administrator data on— 

24 ‘‘(i) greenhouse gas emissions in the 

25 United States; 

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1 ‘‘(ii) the production and manufacture 

2 in the United States, importation into the 

3 United States, and, at the discretion of the 

4 Administrator, exportation from the United 

5 States, of fuels and industrial gases the uses 

6 of which result or may result in greenhouse 

7 gas emissions; 

8 ‘‘(iii) deliveries in the United States of 

9 natural gas, and any other gas meeting the 

10 specifications for commingling with natural 

11 gas for purposes of delivery, the combustion 

12 of which result or may result in greenhouse 

13 gas emissions; and 

14 ‘‘(iv) the capture and sequestration of 

15 greenhouse gases; 

16 ‘‘(B) require covered entities and, where ap17 propriate, other reporting entities to submit to 

18 the Administrator data sufficient to ensure com19 pliance with or implementation of the require20 ments of this title; 

21 ‘‘(C) require reporting of electricity deliv22 ered to industrial sources in energy-intensive in23 dustries; 

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1 ‘‘(D) ensure the completeness, consistency, 

2 transparency, accuracy, precision, and reli3 ability of such data; 

4 ‘‘(E) take into account the best practices 

5 from the most recent Federal, State, tribal, and 

6 international protocols for the measurement, ac7 counting, reporting, and verification of green8 house gas emissions, including protocols from the 

9 Climate Registry and other mandatory State or 

10 multistate authorized programs; 

11 ‘‘(F) take into account the latest scientific 

12 research; 

13 ‘‘(G) require that, for covered entities with 

14 respect to greenhouse gases to which section 722 

15 applies, and, to the extent determined to be ap16 propriate by the Administrator, for covered enti17 ties with respect to other greenhouse gases and 

18 for other reporting entities, submitted data are 

19 based on— 

20 ‘‘(i) continuous monitoring systems for 

21 fuel flow or emissions, such as continuous 

22 emission monitoring systems; 

23 ‘‘(ii) alternative systems that are dem24 onstrated as providing data with the same 

25 precision, reliability, accessibility, and 

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1 timeliness, or, to the extent the Adminis2 trator determines is appropriate for report3 ing small amounts of emissions, the same 

4 precision, reliability, and accessibility and 

5 similar timeliness, as data provided by con6 tinuous monitoring systems for fuel flow or 

7 emissions; or 

8 ‘‘(iii) alternative methodologies that 

9 are demonstrated to provide data with pre10 cision, reliability, accessibility, and timeli11 ness, or, to the extent the Administrator de12 termines is appropriate for reporting small 

13 amounts of emissions, precision, reliability, 

14 and accessibility, as similar as is tech15 nically feasible to that of data generally 

16 provided by continuous monitoring systems 

17 for fuel flow or emissions, if the Adminis18 trator determines that, with respect to a re19 porting entity, there is no continuous moni20 toring system or alternative system de21 scribed in clause (i) or (ii) that is tech22 nically feasible; 

23 ‘‘(H) require that the Administrator, in de24 termining the extent to which the requirement to 

25 use systems or methodologies in accordance with 

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1 subparagraph (G) is appropriate for reporting 

2 entities other than covered entities or for green3 house gases to which section 722 does not apply, 

4 consider the cost of using such systems and meth5 odologies, and of using other systems and meth6 odologies that are available and suitable, for 

7 quantifying the emissions involved in light of the 

8 purposes of this title, including the goal of col9 lecting consistent entity-wide data; 

10 ‘‘(I) include methods for minimizing double 

11 reporting and avoiding irreconcilable double re12 porting of greenhouse gas emissions; 

13 ‘‘(J) establish measurement protocols for 

14 carbon capture and sequestration systems, taking 

15 into consideration the regulations promulgated 

16 under section 813; 

17 ‘‘(K) require that reporting entities provide 

18 the data required under this paragraph in re19 ports submitted electronically to the Adminis20 trator, in such form and containing such infor21 mation as may be required by the Adminis22 trator; 

23 ‘‘(L) include requirements for keeping 

24 records supporting or related to, and protocols 

25 for auditing, submitted data; 

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1 ‘‘(M) establish consistent policies for calcu2 lating carbon content and greenhouse gas emis3 sions for each type of fossil fuel with respect to 

4 which reporting is required; 

5 ‘‘(N) subsequent to implementation of poli6 cies developed under subparagraph (M), provide 

7 for immediate dissemination, to States, Indian 

8 tribes, and on the Internet, of all data reported 

9 under this section as soon as practicable after 

10 electronic audit by the Administrator and any 

11 resulting correction of data, except that data 

12 shall not be disseminated under this subpara13 graph if— 

14 ‘‘(i) its nondissemination is vital to 

15 the national security of the United States, 

16 as determined by the President; or 

17 ‘‘(ii) it is confidential business infor18 mation that cannot be derived from infor19 mation that is otherwise publicly available 

20 and that would cause significant calculable 

21 competitive harm if published, except 

22 that— 

23 ‘‘(I) data relating to greenhouse 

24 gas emissions, including any upstream 

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1 tities, shall not be considered to be con2 fidential business information; and 

3 ‘‘(II) data that is confidential 

4 business information shall be provided 

5 to a State or Indian tribe within 

6 whose jurisdiction the reporting entity 

7 is located, if the Administrator deter8 mines that such State or Indian tribe 

9 has in effect protections for confiden10 tial business information that are 

11 equivalent to protections applicable to 

12 the Federal Government; 

13 ‘‘(O) prescribe methods by which the Ad14 ministrator shall, in cases in which satisfactory 

15 data are not submitted to the Administrator for 

16 any period of time, estimate emission, produc17 tion, importation, manufacture, or delivery lev18 els— 

19 ‘‘(i) for covered entities with respect to 

20 greenhouse gas emissions, production, im21 portation, manufacture, or delivery regu22 lated under this title to ensure that emis23 sions, production, importation, manufac24 ture, or deliveries are not underreported, 

25 and to create a strong incentive for meeting 

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1 data monitoring and reporting require2 ments— 

3 ‘‘(I) with a conservative estimate 

4 of the highest emission, production, im5 portation, manufacture, or delivery 

6 levels that may have occurred during 

7 the period for which data are missing; 

8 or 

9 ‘‘(II) to the extent the Adminis10 trator considers appropriate, with an 

11 estimate of such levels assuming the 

12 unit is emitting, producing, importing, 

13 manufacturing, or delivering at a 

14 maximum potential level during the 

15 period, in order to ensure that such 

16 levels are not underreported and to cre17 ate a strong incentive for meeting data 

18 monitoring and reporting require19 ments; and 

20 ‘‘(ii) for covered entities with respect to 

21 greenhouse gas emissions to which section 

22 722 does not apply and for other reporting 

23 entities, with a reasonable estimate of the 

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1 curred during the period for which data are 

2 missing; 

3 ‘‘(P) require the designation of a designated 

4 representative for each reporting entity; 

5 ‘‘(Q) require an appropriate certification, 

6 by the designated representative for the reporting 

7 entity, of accurate and complete accounting of 

8 greenhouse gas emissions, as determined by the 

9 Administrator; and 

10 ‘‘(R) include requirements for other data 

11 necessary for accurate and complete accounting 

12 of greenhouse gas emissions, as determined by the 

13 Administrator, including data for quality assur14 ance of monitoring systems, monitors and other 

15 measurement devices, and other data needed to 

16 verify reported emissions, production, importa17 tion, manufacture, or delivery. 

18 ‘‘(2) TIMING.— 

19 ‘‘(A) CALENDAR YEARS 2007 THROUGH

20 2010.—For a base period of calendar years 2007 

21 through 2010, each reporting entity shall submit 

22 annual data required under this section to the 

23 Administrator not later than March 31, 2011. 

24 The Administrator may waive or modify report25 ing requirements for calendar years 2007 

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1 through 2010 for categories of reporting entities 

2 to the extent that the Administrator determines 

3 that the reporting entities did not keep data or 

4 records necessary to meet reporting requirements. 

5 The Administrator may, in addition to or in 

6 lieu of such requirements, collect information on 

7 energy consumption and production. 

8 ‘‘(B) SUBSEQUENT CALENDAR YEARS.—For 

9 calendar year 2011 and each subsequent cal10 endar year, each reporting entity shall submit 

11 quarterly data required under this section to the 

12 Administrator not later than 60 days after the 

13 end of the applicable quarter, except when the 

14 data is already being reported to the Adminis15 trator on an earlier timeframe for another pro16 gram. 

17 ‘‘(3) WAIVER OF REPORTING REQUIREMENTS.— 

18 The Administrator may waive reporting requirements 

19 under this section for specific entities to the extent 

20 that the Administrator determines that sufficient and 

21 equally or more reliable verified and timely data are 

22 available to the Administrator and the public on the 

23 Internet under other mandatory statutory require24 ments. 

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1 ‘‘(4) ALTERNATIVE THRESHOLD.—The Adminis2 trator may, by rule, establish applicability thresholds 

3 for reporting under this section using alternative 

4 metrics and levels, provided that such metrics and 

5 levels are easier to administer and cover the same size 

6 and type of sources as the threshold defined in this 

7 section. 

8 ‘‘(c) INTERRELATIONSHIP WITH OTHER SYSTEMS.— 

9 In developing the regulations issued under subsection (b), 

10 the Administrator shall take into account the work done by 

11 the Climate Registry and other mandatory State or 

12 multistate programs. Such regulations shall include an ex13 planation of any major differences in approach between the 

14 system established under the regulations and such registries 

15 and programs. 

16 ‘‘PART C—PROGRAM RULES 

17 ‘‘SEC. 721. EMISSION ALLOWANCES. 

18 ‘‘(a) IN GENERAL.—The Administrator shall establish 

19 a separate quantity of emission allowances for each cal20 endar year starting in 2012, in the amounts prescribed 

21 under subsection (e). 

22 ‘‘(b) IDENTIFICATION NUMBERS.—The Administrator 

23 shall assign to each emission allowance established under 

24 subsection (a) a unique identification number that includes 

25 the vintage year for that emission allowance. 

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1 ‘‘(c) LEGAL STATUS OF EMISSION ALLOWANCES.— 

2 ‘‘(1) IN GENERAL.—An allowance established by 

3 the Administrator under this title does not constitute 

4 a property right. 

5 ‘‘(2) TERMINATION OR LIMITATION.—Nothing in 

6 this Act or any other provision of law shall be con7 strued to limit or alter the authority of the United 

8 States, including the Administrator acting pursuant 

9 to statutory authority, to terminate or limit allow10 ances or offset credits. 

11 ‘‘(3) OTHER PROVISIONS UNAFFECTED.—Except 

12 as otherwise specified in this Act, nothing in this Act 

13 relating to allowances or offset credits established or 

14 issued under this title shall affect the application of 

15 any other provision of law to a covered entity, or the 

16 responsibility for a covered entity to comply with any 

17 such provision of law. 

18 ‘‘(d) SAVINGS PROVISION.—Nothing in this part shall 

19 be construed as requiring a change of any kind in any State 

20 law regulating electric utility rates and charges, or as af21 fecting any State law regarding such State regulation, or 

22 as limiting State regulation (including any prudency re23 view) under such a State law. Nothing in this part shall 

24 be construed as modifying the Federal Power Act or as af25 fecting the authority of the Federal Energy Regulatory 

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1 Commission under that Act. Nothing in this part shall be 

2 construed to interfere with or impair any program for com3 petitive bidding for power supply in a State in which such 

4 program is established. 

5 ‘‘(e) ALLOWANCES FOR EACH CALENDAR YEAR.— 

6 ‘‘(1) IN GENERAL.—Except as provided in para7 graph (2), the number of emission allowances estab8 lished by the Administrator under subsection (a) for 

9 each calendar year shall be as provided in the fol10 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 

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‘‘Calendar year Emission allowances (in millions) 

2027 3,990 

2028 3,837 

2029 3,685 

2030 3,533 

2031 3,408 

2032 3,283 

2033 3,158 

2034 3,033 

2035 2,908 

2036 2,784 

2037 2,659 

2038 2,534 

2039 2,409 

2040 2,284 

2041 2,159 

2042 2,034 

2043 1,910 

2044 1,785 

2045 1,660 

2046 1,535 

2047 1,410 

2048 1,285 

2049 1,160 

2050 and each year thereafter 1,035 

1 ‘‘(2) REVISION.— 

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1 ‘‘(A) IN GENERAL.—The Administrator 

2 may adjust, in accordance with subparagraph 

3 (B), the number of emission allowances estab4 lished pursuant to paragraph (1) if, after notice 

5 and an opportunity for public comment, the Ad6 ministrator determines that— 

7 ‘‘(i) United States greenhouse gas 

8 emissions in 2005 were other than 7,206 

9 million metric tons carbon dioxide equiva10 lent; 

11 ‘‘(ii) if the requirements of this title for 

12 2012 had been in effect in 2005, section 722 

13 would have required emission allowances to 

14 be held for other than 66.2 percent of 

15 United States greenhouse gas emissions in 

16 2005; 

17 ‘‘(iii) if the requirements of this title 

18 for 2014 had been in effect in 2005, section 

19 722 would have required emission allow20 ances to be held for other than 75.7 percent 

21 of United States greenhouse gas emissions 

22 in 2005; or 

23 ‘‘(iv) if the requirements of this title 

24 for 2016 had been in effect in 2005, section 

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1 ances to be held for other than 84.5 percent 

2 United States greenhouse gas emissions in 

3 2005. 

4 ‘‘(B) ADJUSTMENT FORMULA.— 

5 ‘‘(i) IN GENERAL.—If the Adminis6 trator adjusts under this paragraph the 

7 number of emission allowances established 

8 pursuant to paragraph (1), the number of 

9 emission allowances the Administrator es10 tablishes for any given calendar year shall 

11 equal the product of— 

12 ‘‘(I) United States greenhouse gas 

13 emissions in 2005, expressed in tons of 

14 carbon dioxide equivalent; 

15 ‘‘(II) the percent of United States 

16 greenhouse gas emissions in 2005, ex17 pressed in tons of carbon dioxide equiv18 alent, that would have been subject to 

19 section 722 if the requirements of this 

20 title for the given calendar year had 

21 been in effect in 2005; and 

22 ‘‘(III) the percentage set forth for 

23 that calendar year in section 703(a), 

24 or determined under clause (ii) of this 

25 subparagraph. 

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1 ‘‘(ii) TARGETS.—In applying the por2 tion of the formula in clause (i)(III) of this 

3 subparagraph, for calendar years for which 

4 a percentage is not listed in section 703(a), 

5 the Administrator shall use a uniform an6 nual decline in the amount of emissions be7 tween the years that are specified. 

8 ‘‘(iii) CARBON DIOXIDE EQUIVALENT

9 VALUE.—If the Administrator adjusts under 

10 this paragraph the number of emission al11 lowances established pursuant to paragraph 

12 (1), the Administrator shall use the carbon 

13 dioxide equivalent values established pursu14 ant to section 712. 

15 ‘‘(iv) LIMITATION ON ADJUSTMENT

16 TIMING.—Once a calendar year has started, 

17 the Administrator may not adjust the num18 ber of emission allowances to be established 

19 for that calendar year. 

20 ‘‘(C) LIMITATION ON ADJUSTMENT AUTHOR21 ITY.—The Administrator may adjust under this 

22 paragraph the number of emission allowances to 

23 be established pursuant to paragraph (1) only 

24 once. 

25 ‘‘(f) COMPENSATORY ALLOWANCE.— 

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1 ‘‘(1) IN GENERAL.—The regulations promulgated 

2 under subsection (h) shall provide for the establish3 ment and distribution of compensatory allowances 

4 for— 

5 ‘‘(A) the destruction, in 2012 or later, of 

6 fluorinated gases that are greenhouse gases if— 

7 ‘‘(i) allowances or offset credits were 

8 retired for their production or importation; 

9 and 

10 ‘‘(ii) such gases are not required to be 

11 destroyed under any other provision of law; 

12 ‘‘(B) the nonemissive use, in 2012 or later, 

13 of petroleum-based or coal-based liquid or gas14 eous fuel, petroleum coke, natural gas liquid, or 

15 natural gas as a feedstock, if allowances or offset 

16 credits were retired for the greenhouse gases that 

17 would have been emitted from their combustion; 

18 and 

19 ‘‘(C) the conversionary use, in 2012 or 

20 later, of fluorinated gases in a manufacturing 

21 process, including semiconductor research or 

22 manufacturing, if allowances or offset credits 

23 were retired for the production or importation of 

24 such gas. 

25 ‘‘(2) ESTABLISHMENT AND DISTRIBUTION.— 

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1 ‘‘(A) IN GENERAL.—Not later than 90 days 

2 after the end of each calendar year, the Adminis3 trator shall establish and distribute to the entity 

4 taking the actions described in subparagraph 

5 (A), (B), or (C) of paragraph (1) a quantity of 

6 compensatory allowances equivalent to the num7 ber of tons of carbon dioxide equivalent of avoid8 ed emissions achieved through such actions. In 

9 establishing the quantity of compensatory allow10 ances, the Administrator shall take into account 

11 the carbon dioxide equivalent value of any green12 house gas resulting from such action. 

13 ‘‘(B) SOURCE OF ALLOWANCES.—Compen14 satory allowances established under this sub15 section shall not be emission allowances estab16 lished under subsection (a). 

17 ‘‘(C) IDENTIFICATION NUMBERS.—The Ad18 ministrator shall assign to each compensatory 

19 allowance established under subparagraph (A) a 

20 unique identification number. 

21 ‘‘(3) DEFINITIONS.—For purposes of this sub22 section— 

23 ‘‘(A) the term ‘destruction’ means the con24 version of a greenhouse gas by thermal, chemical, 

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1 or other means to another gas or set of gases 

2 with little or no carbon dioxide equivalent value; 

3 ‘‘(B) the term ‘nonemissive use’ means the 

4 use of fossil fuel as a feedstock in an industrial 

5 or manufacturing process to the extent that 

6 greenhouse gases are not emitted from such proc7 ess, and to the extent that the products of such 

8 process are not intended for use as, or to be con9 tained in, a fuel; and 

10 ‘‘(C) the term ‘conversionary use’ means the 

11 conversion during research or manufacturing of 

12 a fluorinated gas into another greenhouse gas or 

13 set of gases with a lower carbon dioxide equiva14 lent value. 

15 ‘‘(4) FEEDSTOCK EMISSIONS STUDY.— 

16 ‘‘(A) The Administrator may conduct a 

17 study to determine the extent to which petro18 leum-based or coal-based liquid or gaseous fuel, 

19 petroleum coke, natural gas liquid, or natural 

20 gas are used as feedstocks in manufacturing 

21 processes to produce products and the greenhouse 

22 gas emissions resulting from such uses. 

23 ‘‘(B) If as a result of such a study, the Ad24 ministrator determines that the use of such prod25 ucts by noncovered sources results in substantial 

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1 emissions of greenhouse gases or their precursors 

2 and that such emissions have not been ade3 quately addressed under other requirements of 

4 this Act, the Administrator may, after notice 

5 and comment rulemaking, promulgate a regula6 tion reducing compensatory allowances commen7 surately if doing so will not result in leakage. 

8 ‘‘(g) FLUORINATED GASES ASSESSMENT.—No later 

9 than March 31, 2014, the Administrator shall conduct an 

10 assessment of the regulation of non-HFC fluorinated gases 

11 under this title to determine whether the most appropriate 

12 point of regulation is at the gas manufacturer or importer 

13 level, or at the source of emissions downstream. If the Ad14 ministrator determines, based on consideration of environ15 mental effectiveness, cost effectiveness, administrative feasi16 bility, extent of coverage of emissions, and competitiveness 

17 considerations, that emissions of non-HFC fluorinated gases 

18 can best be regulated by designating downstream emission 

19 sources as covered entities with compliance obligations 

20 under section 722, the Administrator shall, after notice and 

21 comment rulemaking, change the definition of covered enti22 ty with respect to fluorinated gases (other than HFCs) ac23 cordingly and establish such requirements as are necessary 

24 to ensure compliance for such entities with the requirements 

25 of this title. 

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1 ‘‘(h) REGULATIONS.—Not later than 24 months after 

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

3 promulgate regulations to carry out the provisions of this 

4 title. 

5 ‘‘SEC. 722. PROHIBITION OF EXCESS EMISSIONS. 

6 ‘‘(a) PROHIBITION.—Except as provided in subsection 

7 (c), effective January 1, 2012, each covered entity is prohib8 ited from emitting greenhouse gases, and having attrib9 utable greenhouse gas emissions, in combination, in excess 

10 of its allowable emissions level. A covered entity’s allowable 

11 emissions level for each calendar year is the number of emis12 sion allowances (or credits or other allowances as provided 

13 in subsection (d)) it holds as of 12:01 a.m. on April 1 (or 

14 a later date established by the Administrator under sub15 section (j)) of the following calendar year. 

16 ‘‘(b) METHODS OF DEMONSTRATING COMPLIANCE.— 

17 Except as otherwise provided in this section, the owner or 

18 operator of a covered entity shall not be considered to be 

19 in compliance with the prohibition in subsection (a) unless, 

20 as of 12:01 a.m. on April 1 (or a later date established by 

21 the Administrator under subsection (j)) of each calendar 

22 year starting in 2013, the owner or operator holds a quan23 tity of emission allowances (or credits or other allowances 

24 as provided in subsection (d)) at least as great as the quan25 tity calculated as follows: 

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1 ‘‘(1) ELECTRICITY SOURCES.—For a covered en2 tity described in section 700(13)(A), 1 emission allow3 ance for each ton of carbon dioxide equivalent of 

4 greenhouse gas that such covered entity emitted in the 

5 previous calendar year, excluding emissions resulting 

6 from the combustion of— 

7 ‘‘(A) petroleum-based or coal-based liquid 

8 fuel; 

9 ‘‘(B) natural gas liquid; 

10 ‘‘(C) renewable biomass or gas derived from 

11 renewable biomass; or 

12 ‘‘(D) petroleum coke or gas derived from pe13 troleum coke. 

14 ‘‘(2) FUEL PRODUCERS AND IMPORTERS.—For a 

15 covered entity described in section 700(13)(B), 1 

16 emission allowance for each ton of carbon dioxide 

17 equivalent of greenhouse gas that would be emitted 

18 from the combustion of any petroleum-based or coal19 based liquid fuel, petroleum coke, or natural gas liq20 uid, produced or imported by such covered entity dur21 ing the previous calendar year for sale or distribution 

22 in interstate commerce, assuming no capture and se23 questration of any greenhouse gas emissions. 

24 ‘‘(3) INDUSTRIAL GAS PRODUCERS AND IMPORT25 ERS.—For a covered entity described in section 

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1 700(13)(C), 1 emission allowance for each ton of car2 bon dioxide equivalent of fossil fuel-based carbon diox3 ide, nitrous oxide, or any other fluorinated gas that 

4 is a greenhouse gas (except for nitrogen trifluoride), 

5 or any combination thereof, produced or imported by 

6 such covered entity during the previous calendar year 

7 for sale or distribution in interstate commerce or re8 leased as fugitive emissions in the production of 

9 fluorinated gas. 

10 ‘‘(4) NITROGEN TRIFLUORIDE SOURCES.—For a 

11 covered entity described in section 700(13)(D), 1 

12 emission allowance for each ton of carbon dioxide 

13 equivalent of nitrogen trifluoride that such covered 

14 entity emitted in the previous calendar year. 

15 ‘‘(5) GEOLOGICAL SEQUESTRATION SITES.—For 

16 a covered entity described in section 700(13)(E), 1 

17 emission allowance for each ton of carbon dioxide 

18 equivalent of greenhouse gas that such covered entity 

19 emitted in the previous calendar year. 

20 ‘‘(6) INDUSTRIAL STATIONARY SOURCES.—For a 

21 covered entity described in section 700(13)(F), (G), or 

22 (H), 1 emission allowance for each ton of carbon di23 oxide equivalent of greenhouse gas that such covered 

24 entity emitted in the previous calendar year, exclud25 ing emissions resulting from— 

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1 ‘‘(A) the combustion of petroleum-based or 

2 coal-based liquid fuel; 

3 ‘‘(B) the combustion of natural gas liquid; 

4 ‘‘(C) the combustion of renewable biomass 

5 or gas derived from renewable biomass; 

6 ‘‘(D) the combustion of petroleum coke or 

7 gas derived from petroleum coke; or 

8 ‘‘(E) the use of any fluorinated gas that is 

9 a greenhouse gas purchased for use at that cov10 ered entity, except for nitrogen trifluoride. 

11 ‘‘(7) INDUSTRIAL FOSSIL FUEL-FIRED COMBUS12 TION DEVICES.—For a covered entity described in sec13 tion 700(13)(I), 1 emission allowance for each ton of 

14 carbon dioxide equivalent of greenhouse gas that the 

15 devices emitted in the previous calendar year, exclud16 ing emissions resulting from the combustion of— 

17 ‘‘(A) petroleum-based or coal-based liquid 

18 fuel; 

19 ‘‘(B) natural gas liquid; 

20 ‘‘(C) renewable biomass or gas derived from 

21 renewable biomass; or 

22 ‘‘(D) petroleum coke or gas derived from pe23 troleum coke. 

24 ‘‘(8) NATURAL GAS LOCAL DISTRIBUTION COMPA25 NIES.—For a covered entity described in section 

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1 700(13)(J), 1 emission allowance for each ton of car2 bon dioxide equivalent of greenhouse gas that would 

3 be emitted from the combustion of the natural gas, 

4 and any other gas meeting the specifications for com5 mingling with natural gas for purposes of delivery, 

6 that such entity delivered during the previous cal7 endar year to customers that are not covered entities, 

8 assuming no capture and sequestration of that green9 house gas. 

10 ‘‘(9) ALGAE-BASED FUELS.—Where carbon diox11 ide (or another greenhouse gas) is used as an input 

12 in the production of algae-based fuels, the Adminis13 trator shall ensure that allowances are required to be 

14 held either for the carbon dioxide used to grow the 

15 algae or for the carbon dioxide emitted from combus16 tion of the fuel produced from such algae, but not for 

17 both. 

18 ‘‘(10) FUGITIVE EMISSIONS.—The greenhouse gas 

19 emissions to which paragraphs (1), (4), (6), and (7) 

20 apply shall not include fugitive emissions of green21 house gas, except to the extent the Administrator de22 termines that data on the carbon dioxide equivalent 

23 value of greenhouse gas in the fugitive emissions can 

24 be provided with sufficient precision, reliability, ac25 cessibility, and timeliness to ensure the integrity of 

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1 emission allowances, the allowance tracking system, 

2 and the cap on emissions. 

3 ‘‘(11) EXPORT EXEMPTION.—This section shall 

4 not apply to any petroleum-based or coal-based liquid 

5 fuel, petroleum coke, natural gas liquid, fossil fuel6 based carbon dioxide, nitrous oxide, or fluorinated gas 

7 that is exported for sale or use. 

8 ‘‘(12) NATURAL GAS LIQUIDS.—Notwithstanding 

9 subsection (a), if the owner or operator of a covered 

10 entity described in section 700(13)(B) that produces 

11 natural gas liquids does not take ownership of the liq12 uids, and is not responsible for the distribution or use 

13 of the liquids in commerce, the owner of the liquids 

14 shall be responsible for compliance with this section, 

15 section 723, and other relevant sections of this title 

16 with respect to such liquids. In the regulations pro17 mulgated under section 721, the Administrator shall 

18 include such provisions with respect to such liquids as 

19 the Administrator determines are appropriate to de20 termine and ensure compliance, and to penalize non21 compliance. In such a case, the owner of the covered 

22 entity shall provide to the Administrator, in a man23 ner to be determined by the Administrator, informa24 tion regarding the quantity and ownership of liquids 

25 produced at the covered entity. 

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1 ‘‘(13) APPLICATION OF MULTIPLE PARA2 GRAPHS.—For a covered entity to which more than 1 

3 of paragraphs (1) through (8) apply, all applicable 

4 paragraphs shall apply, except that not more than 1 

5 emission allowance shall be required for the same 

6 emission. 

7 ‘‘(c) PHASE-IN OF PROHIBITION.— 

8 ‘‘(1) INDUSTRIAL STATIONARY SOURCES.—The 

9 prohibition under subsection (a) shall first apply to 

10 a covered entity described in section 700(13)(D), (F), 

11 (G), (H), or (I), with respect to emissions occurring 

12 during calendar year 2014. 

13 ‘‘(2) NATURAL GAS LOCAL DISTRIBUTION COMPA14 NIES.—The prohibition under subsection (a) shall 

15 first apply to a covered entity described in section 

16 700(13)(J) with respect to deliveries occurring during 

17 calendar year 2016. 

18 ‘‘(d) ADDITIONAL METHODS.—In addition to using the 

19 method of compliance described in subsection (b), a covered 

20 entity may do the following: 

21 ‘‘(1) OFFSET CREDITS.— 

22 ‘‘(A) IN GENERAL.—Covered entities collec23 tively may, in accordance with this paragraph, 

24 use offset credits to demonstrate compliance for 

25 up to a maximum of 2 billion tons of greenhouse 

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1 gas emissions annually. The ability to dem2 onstrate compliance with offset credits shall be 

3 divided pro rata among covered entities by al4 lowing each covered entity to satisfy a percentage 

5 of the number of allowances required to be held 

6 under subsection (b) to demonstrate compliance 

7 by holding 1 domestic offset credit or 1.25 inter8 national offset credits in lieu of an emission al9 lowance, except as provided in subparagraph 

10 (D). 

11 ‘‘(B) APPLICABLE PERCENTAGE.—The per12 centage referred to in subparagraph (A) for a 

13 given calendar year shall be determined by di14 viding 2 billion by the sum of 2 billion plus the 

15 number of emission allowances established under 

16 section 721(a) for the previous year, and multi17 plying that number by 100. Not more than one 

18 half of the applicable percentage under this 

19 paragraph may be used by holding domestic off20 set credits, and not more than one half of the ap21 plicable percentage under this paragraph may be 

22 used by holding international offset credits, ex23 cept as provided in subparagraph (C). 

24 ‘‘(C) MODIFIED PERCENTAGES.—If the Ad25 ministrator determines that domestic offset credmstockstill on PROD1PC66 with BILLS

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1 its available for use in demonstrating compli2 ance in any calendar year at domestic offset 

3 prices generally equal to or less than allowance 

4 prices, are likely to offset less than 0.9 billion 

5 tons of greenhouse gas emissions (measured in 

6 tons of carbon dioxide equivalents), the Adminis7 trator shall increase the percent of emissions that 

8 can be offset through the use of international off9 set credits (and decrease the percent of emissions 

10 that can be allowed through the use of domestic 

11 offset credits by the same amount) to reflect the 

12 amount that 1.0 billion exceeds the number of 

13 domestic offset credits the Administrator deter14 mines is available for that year, up to a max15 imum of 0.5 billion tons of greenhouse gas emis16 sions. 

17 ‘‘(D) INTERNATIONAL OFFSET CREDITS.— 

18 Notwithstanding subparagraph (A), to dem19 onstrate compliance prior to calendar year 2018, 

20 a covered entity may use 1 international offset 

21 credit in lieu of an emission allowance up to the 

22 amount permitted under this paragraph. 

23 ‘‘(E) PRESIDENT’S RECOMMENDATION.—The 

24 President may make a recommendation to Con25 gress as to whether the number 2 billion specified 

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1 in subparagraphs (A) and (B) should be in2 creased or decreased. 

3 ‘‘(2) INTERNATIONAL EMISSION ALLOWANCES.— 

4 To demonstrate compliance, a covered entity may 

5 hold an international emission allowance in lieu of 

6 an emission allowance, except as modified under sec7 tion 728(d). 

8 ‘‘(3) COMPENSATORY ALLOWANCES.—To dem9 onstrate compliance, a covered entity may hold a 

10 compensatory allowance obtained under section 721(f) 

11 in lieu of an emission allowance. 

12 ‘‘(e) RETIREMENT OF ALLOWANCES AND CREDITS.— 

13 As soon as practicable after a deadline established for cov14 ered entities to demonstrate compliance with this title, the 

15 Administrator shall retire the quantity of allowances or 

16 credits required to be held under this title. 

17 ‘‘(f) ALTERNATIVE METRICS.—For categories of cov18 ered entities described in subparagraph (B), (C), (D), (G), 

19 (H), or (I) of section 700(13), the Administrator may, by 

20 rule, establish an applicability threshold for inclusion 

21 under those subparagraphs using an alternative metric and 

22 level, provided that such metric and level are easier to ad23 minister and cover the same size and type of sources as 

24 the threshold defined in such subparagraphs. 

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1 ‘‘(g) THRESHOLD REVIEW.—For each category of cov2 ered entities described in subparagraph (B), (C), (D), (G), 

3 (H), or (I) of section 700(13), the Administrator shall, in 

4 2020 and once every 8 years thereafter, review the carbon 

5 dioxide equivalent emission thresholds that are used to de6 fine covered entities. After consideration of— 

7 ‘‘(1) emissions from covered entities in each such 

8 category, and from other entities of the same type that 

9 emit less than the threshold amount for the category 

10 (including emission sources that commence operation 

11 after the date of enactment of this title that are not 

12 covered entities); and 

13 ‘‘(2) whether greater greenhouse gas emission re14 ductions can be cost-effectively achieved by lowering 

15 the applicable threshold, 

16 the Administrator may by rule lower such threshold to not 

17 less than 10,000 tons of carbon dioxide equivalent emis18 sions. In determining the cost effectiveness of potential re19 ductions from lowering the threshold for covered entities, the 

20 Administrator shall consider alternative regulatory green21 house gas programs, including setting standards under 

22 other titles of this Act. 

23 ‘‘(h) DESIGNATED REPRESENTATIVES.—The regula24 tions promulgated under section 721(h) shall require that 

25 each covered entity, and each entity holding allowances or 

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1 credits or receiving allowances or credits from the Adminis2 trator under this title, select a designated representative. 

3 ‘‘(i) EDUCATION AND OUTREACH.— 

4 ‘‘(1) IN GENERAL.—The Administrator shall es5 tablish and carry out a program of education and 

6 outreach to assist covered entities, especially entities 

7 having little experience with environmental regu8 latory requirements similar or comparable to those 

9 under this title, in preparing to meet the compliance 

10 obligations of this title. Such program shall include 

11 education with respect to using markets to effectively 

12 achieve such compliance. 

13 ‘‘(2) FAILURE TO RECEIVE INFORMATION.—A 

14 failure to receive information or assistance under this 

15 subsection may not be used as a defense against an 

16 allegation of any violation of this title. 

17 ‘‘(j) ADJUSTMENT OF DEADLINE.—The Administrator 

18 may, by rule, establish a deadline for demonstrating com19 pliance, for a calendar year, later than the date provided 

20 in subsection (a), as necessary to ensure the availability 

21 of emissions data, but in no event shall the deadline be later 

22 than June 1. 

23 ‘‘(k) NOTICE REQUIREMENT FOR COVERED ENTITIES

24 RECEIVING NATURAL GAS FROM NATURAL GAS LOCAL

25 DISTRIBUTION COMPANIES.—The owner or operator of a 

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1 covered entity that takes delivery of natural gas from a nat2 ural gas local distribution company shall, not later than 

3 September 1 of each calendar year, notify such natural gas 

4 local distribution company in writing that such entity will 

5 qualify as a covered entity under this title for that calendar 

6 year. 

7 ‘‘(l) COMPLIANCE OBLIGATION.—For purposes of this 

8 title, the year of a compliance obligation is the year in 

9 which compliance is determined, not the year in which the 

10 greenhouse gas emissions occur or the covered entity has at11 tributable greenhouse gas emissions. 

12 ‘‘SEC. 723. PENALTY FOR NONCOMPLIANCE. 

13 ‘‘(a) ENFORCEMENT.—A violation of any prohibition 

14 of, requirement of, or regulation promulgated pursuant to 

15 this title shall be a violation of this Act. It shall be a viola16 tion of this Act for a covered entity to emit greenhouse gases, 

17 and have attributable greenhouse gas emissions, in com18 bination, in excess of its allowable emissions level as pro19 vided in section 722(a). Each ton of carbon dioxide equiva20 lent for which a covered entity fails to demonstrate compli21 ance under section 722(b) shall be a separate violation. 

22 ‘‘(b) EXCESS EMISSIONS PENALTY.— 

23 ‘‘(1) IN GENERAL.—The owner or operator of 

24 any covered entity that fails for any year to comply, 

25 on the deadline described in section 722(a) or (j), 

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1 shall be liable for payment to the Administrator of an 

2 excess emissions penalty in the amount described in 

3 paragraph (2). 

4 ‘‘(2) AMOUNT.—The amount of an excess emis5 sions penalty required to be paid under paragraph 

6 (1) shall be equal to the product obtained by multi7 plying— 

8 ‘‘(A) the tons of carbon dioxide equivalent of 

9 greenhouse gas emissions or attributable green10 house gas emissions for which the owner or oper11 ator of a covered entity failed to comply under 

12 section 722(b) on the deadline; by 

13 ‘‘(B) twice the fair market value of emission 

14 allowances established for emissions occurring in 

15 the calendar year for which the emission allow16 ances were due. 

17 ‘‘(3) TIMING.—An excess emissions penalty re18 quired under this subsection shall be immediately due 

19 and payable to the Administrator, without demand, 

20 in accordance with regulations promulgated by the 

21 Administrator, which shall be issued not later than 2 

22 years after the date of enactment of this title. 

23 ‘‘(4) NO EFFECT ON LIABILITY.—An excess emis24 sions penalty due and payable by the owners or oper25 ators of a covered entity under this subsection shall 

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1 not diminish the liability of the owners or operators 

2 for any fine, penalty, or assessment against the own3 ers or operators for the same violation under any 

4 other provision of this Act or any other law. 

5 ‘‘(c) EXCESS EMISSIONS ALLOWANCES.—The owner or 

6 operator of a covered entity that fails for any year to com7 ply on the deadline described in section 722(a) or (j) shall 

8 be liable to offset the covered entity’s excess combination of 

9 greenhouse gases emitted and attributable greenhouse gas 

10 emissions by an equal quantity of emission allowances dur11 ing the following calendar year, or such longer period as 

12 the Administrator may prescribe. During the year in which 

13 the covered entity failed to comply, or any year thereafter, 

14 the Administrator may deduct the emission allowances re15 quired under this subsection to offset the covered entity’s 

16 excess actual or attributable emissions. 

17 ‘‘SEC. 724. TRADING. 

18 ‘‘(a) PERMITTED TRANSACTIONS.—Except as other19 wise provided in this title, the lawful holder of an emission 

20 allowance, compensatory allowance, or offset credit may, 

21 without restriction, sell, exchange, transfer, hold for compli22 ance in accordance with section 722, or request that the Ad23 ministrator retire the emission allowance, compensatory al24 lowance, or offset credit. 

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1 ‘‘(b) NO RESTRICTION ON TRANSACTIONS.—The privi2 lege of purchasing, holding, selling, exchanging, transfer3 ring, and requesting retirement of emission allowances, 

4 compensatory allowances, or offset credits shall not be re5 stricted to the owners and operators of covered entities, ex6 cept as otherwise provided in this title. 

7 ‘‘(c) EFFECTIVENESS OF ALLOWANCE TRANSFERS.— 

8 No transfer of an allowance or offset credit shall be effective 

9 for purposes of this title until a certification of the transfer, 

10 signed by the designated representative of the transferor, is 

11 received and recorded by the Administrator in accordance 

12 with regulations promulgated under section 721(h). 

13 ‘‘(d) ALLOWANCE TRACKING SYSTEM.—The regula14 tions promulgated under section 721(h) shall include a sys15 tem for issuing, recording, holding, and tracking allowances 

16 and offset credits that shall specify all necessary procedures 

17 and requirements for an orderly and competitive func18 tioning of the allowance and offset credit markets. Such reg19 ulations shall provide for appropriate publication of the in20 formation in the system on the Internet. 

21 ‘‘SEC. 725. BANKING AND BORROWING. 

22 ‘‘(a) BANKING.—An emission allowance may be used 

23 to comply with section 722 or section 723 for emissions 

24 in— 

25 ‘‘(1) the vintage year for the allowance; or 

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1 ‘‘(2) any calendar year subsequent to the vintage 

2 year for the allowance. 

3 ‘‘(b) EXPIRATION.— 

4 ‘‘(1) REGULATIONS.—The Administrator may es5 tablish by regulation criteria and procedures for de6 termining whether, and for implementing a deter7 mination that, the expiration of an allowance or cred8 it established or issued by the Administrator under 

9 this title, or expiration of the ability to use an inter10 national emission allowance to comply with section 

11 722, is necessary to ensure the authenticity and integ12 rity of allowances or credits or the allowance tracking 

13 system. 

14 ‘‘(2) GENERAL RULE.—An allowance or credit 

15 established or issued by the Administrator under this 

16 title shall not expire unless— 

17 ‘‘(A) it is retired by the Administrator as 

18 required under this title; or 

19 ‘‘(B) it is determined to expire or to have 

20 expired by a specific date by the Administrator 

21 in accordance with regulations promulgated 

22 under paragraph (1). 

23 ‘‘(3) INTERNATIONAL EMISSION ALLOWANCES.— 

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1 ance to comply with section 722 shall not expire un2 less— 

3 ‘‘(A) the allowance is retired by the Admin4 istrator as required by this title; or 

5 ‘‘(B) the ability to use such allowance to 

6 meet such compliance obligation requirements is 

7 determined to expire or to have expired by a spe8 cific date by the Administrator in accordance 

9 with regulations promulgated under paragraph 

10 (1). 

11 ‘‘(c) BORROWING FUTURE VINTAGE YEAR ALLOW12 ANCES.— 

13 ‘‘(1) BORROWING WITHOUT INTEREST.—In addi14 tion to the uses described in subsection (a), an emis15 sion allowance may be used to comply with section 

16 722(a) or section 723 for emissions, production, im17 portation, manufacture, or deliveries in the calendar 

18 year immediately preceding the vintage year for the 

19 allowance. 

20 ‘‘(2) BORROWING WITH INTEREST.— 

21 ‘‘(A) IN GENERAL.—A covered entity may 

22 demonstrate compliance under subsection (b) in 

23 a specific calendar year for up to 15 percent of 

24 its emissions by holding emission allowances 

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1 with a vintage year 1 to 5 years later than that 

2 calendar year. 

3 ‘‘(B) LIMITATIONS.—An emission allowance 

4 borrowed pursuant to this paragraph shall be an 

5 emission allowance that is established by the Ad6 ministrator for a specific future calendar year 

7 under section 721(a) and that is held by the bor8 rower. 

9 ‘‘(C) PREPAYMENT OF INTEREST.—For each 

10 emission allowance that an owner or operator of 

11 a covered entity borrows pursuant to this para12 graph, such owner or operator shall, at the time 

13 it borrows the allowance, hold for retirement by 

14 the Administrator a quantity of emission allow15 ances that is equal to the product obtained by 

16 multiplying— 

17 ‘‘(i) 0.08; by 

18 ‘‘(ii) the number of years between the 

19 calendar year in which the allowance is 

20 being used to satisfy a compliance obliga21 tion and the vintage year of the allowance. 

22 ‘‘SEC. 726. STRATEGIC RESERVE. 

23 ‘‘(a) STRATEGIC RESERVE AUCTIONS.— 

24 ‘‘(1) IN GENERAL.—Once each quarter of each 

25 calendar year for which allowances are established 

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1 under section 721(a), the Administrator shall auction 

2 strategic reserve allowances. 

3 ‘‘(2) RESTRICTION TO COVERED ENTITIES.—In 

4 each auction conducted under paragraph (1), only 

5 covered entities that the Administrator expects will be 

6 required to comply with section 722 in the following 

7 calendar year shall be eligible to make purchases. 

8 ‘‘(b) POOL OF EMISSION ALLOWANCES FOR STRATEGIC

9 RESERVE AUCTIONS.— 

10 ‘‘(1) FILLING THE STRATEGIC RESERVE INI11 TIALLY.— 

12 ‘‘(A) IN GENERAL.—The Administrator 

13 shall, not later than 2 years after the date of en14 actment of this title, establish a strategic reserve 

15 account, and shall place in that account an 

16 amount of emission allowances established under 

17 section 721(a) for each calendar year from 2012 

18 through 2050 in the amounts specified in sub19 paragraph (B) of this paragraph. 

20 ‘‘(B) AMOUNT.—The amount referred to in 

21 subparagraph (A) shall be— 

22 ‘‘(i) for each of calendar years 2012 

23 through 2019, 1 percent of the quantity of 

24 emission allowances established for that 

25 year pursuant to section 721(e)(1); 

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1 ‘‘(ii) for each of calendar years 2020 

2 through 2029, 2 percent of the quantity of 

3 emission allowances established for that 

4 year pursuant to section 721(e)(1); and 

5 ‘‘(iii) for each of calendar years 2030 

6 through 2050, 3 percent of the quantity of 

7 emission allowances established for that 

8 year pursuant to section 721(e)(1). 

9 ‘‘(C) EFFECT ON OTHER PROVISIONS.—Any 

10 provision in this title (except for subparagraph 

11 (B) of this paragraph) that refers to a quantity 

12 or percentage of the emission allowances estab13 lished for a calendar year under section 721(a) 

14 shall be considered to refer to the amount of 

15 emission allowances as determined pursuant to 

16 section 721(e), less any emission allowances es17 tablished for that year that are placed in the 

18 strategic reserve account under this paragraph. 

19 ‘‘(2) SUPPLEMENTING THE STRATEGIC RE20 SERVE.—The Administrator shall also— 

21 ‘‘(A) at the end of each calendar year, 

22 transfer to the strategic reserve account each 

23 emission allowance that was offered for sale but 

24 not sold at any auction conducted under section 

25 791; and 

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1 ‘‘(B) transfer emission allowances estab2 lished under subsection (g) from auction pro3 ceeds, and deposit them into the strategic reserve, 

4 to the extent necessary to maintain the reserve at 

5 its original size. 

6 ‘‘(c) MINIMUM STRATEGIC RESERVE AUCTION

7 PRICE.— 

8 ‘‘(1) IN GENERAL.—At each strategic reserve auc9 tion, the Administrator shall offer emission allow10 ances for sale beginning at a minimum price per 

11 emission allowance, which shall be known as the 

12 ‘minimum strategic reserve auction price’. 

13 ‘‘(2) INITIAL MINIMUM STRATEGIC RESERVE AUC14 TION PRICES.—The minimum strategic reserve auc15 tion price shall be $28 (in constant 2009 dollars) for 

16 the strategic reserve auctions held in 2012. For the 

17 strategic reserve auctions held in 2013 and 2014, the 

18 minimum strategic reserve auction price shall be the 

19 strategic reserve auction price for the previous year 

20 increased by 5 percent plus the rate of inflation (as 

21 measured by the Consumer Price Index for All Urban 

22 Consumers). 

23 ‘‘(3) MINIMUM STRATEGIC RESERVE AUCTION

24 PRICE IN SUBSEQUENT YEARS.—For each strategic re25 serve auction held in 2015 and each year thereafter, 

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1 the minimum strategic reserve auction price shall be 

2 60 percent above a rolling 36-month average of the 

3 daily closing price for that year’s emission allowance 

4 vintage as reported on registered carbon trading fa5 cilities, calculated using constant dollars. 

6 ‘‘(d) QUANTITY OF EMISSION ALLOWANCES RELEASED

7 FROM THE STRATEGIC RESERVE.— 

8 ‘‘(1) INITIAL LIMITS.—For each of calendar 

9 years 2012 through 2016, the annual limit on the 

10 number of emission allowances from the strategic re11 serve account that may be auctioned is an amount 

12 equal to 5 percent of the emission allowances estab13 lished for that calendar year under section 721(a). 

14 This limit does not apply to international offset cred15 its sold on consignment pursuant to subsection (h). 

16 ‘‘(2) LIMITS IN SUBSEQUENT YEARS.—For cal17 endar year 2017 and each year thereafter, the annual 

18 limit on the number of emission allowances from the 

19 strategic reserve account that may be auctioned is an 

20 amount equal to 10 percent of the emission allowances 

21 established for that calendar year under section 

22 721(a). This limit does not apply to international off23 set credits sold on consignment pursuant to subsection 

24 (h). 

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1 ‘‘(3) ALLOCATION OF LIMITATION.—One-fourth of 

2 each year’s annual strategic reserve auction limit 

3 under this subsection shall be made available for auc4 tion in each quarter. Any allowances from the stra5 tegic reserve account that are made available for sale 

6 in a quarterly auction and not sold shall be rolled 

7 over and added to the quantity available for sale in 

8 the following quarter, except that allowances not sold 

9 at auction in the fourth quarter of a year shall not 

10 be rolled over to the following calendar year’s auc11 tions, but shall be returned to the strategic reserve ac12 count. 

13 ‘‘(e) PURCHASE LIMIT.— 

14 ‘‘(1) IN GENERAL.—Except as provided in para15 graph (2) or (3), the annual number of emission al16 lowances that a covered entity may purchase at the 

17 strategic reserve auctions in each calendar year shall 

18 not exceed 20 percent of the covered entity’s emissions 

19 during the most recent year for which allowances or 

20 credits were retired under section 722. 

21 ‘‘(2) 2012 LIMIT.—For calendar year 2012, the 

22 maximum aggregate number of emission allowances 

23 that a covered entity may purchase from that year’s 

24 strategic reserve auctions shall be 20 percent of the 

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1 ered entity reported to the registry established under 

2 section 713 for 2011 and that would be subject to sec3 tion 722(a) if occurring in later calendar years. 

4 ‘‘(3) NEW ENTRANTS.—The Administrator shall, 

5 by regulation, establish a separate purchase limit ap6 plicable to entities that expect to become a covered en7 tity in the year of the auction, permitting them to 

8 purchase emission allowances at the strategic reserve 

9 auctions in their first calendar year of operation in 

10 an amount of at least 20 percent of their expected 

11 combined emissions and attributable greenhouse gas 

12 emissions for that year. 

13 ‘‘(f) DELEGATION OR CONTRACT.—Pursuant to regula14 tions under this section, the Administrator may, by delega15 tion or contract, provide for the conduct of strategic reserve 

16 auctions under the Administrator’s supervision by other de17 partments or agencies of the Federal Government or by non18 governmental agencies, groups, or organizations. 

19 ‘‘(g) USE OF AUCTION PROCEEDS.— 

20 ‘‘(1) DEPOSIT IN STRATEGIC RESERVE FUND.— 

21 The proceeds from strategic reserve auctions shall be 

22 placed in the Strategic Reserve Fund established 

23 under section 793(1), and shall be available without 

24 further appropriation or fiscal year limitation for the 

25 purposes described in this subsection. 

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1 ‘‘(2) INTERNATIONAL OFFSET CREDITS FOR RE2 DUCED DEFORESTATION.—The Administrator shall 

3 use the proceeds from each strategic reserve auction to 

4 purchase international offset credits issued for re5 duced deforestation activities pursuant to section 

6 743(e). The Administrator shall retire those inter7 national offset credits and establish a number of emis8 sion allowances equal to 80 percent of the number of 

9 international offset credits so retired. Emission allow10 ances established under this paragraph shall be in ad11 dition to those established under section 721(a). 

12 ‘‘(3) EMISSION ALLOWANCES.—The Adminis13 trator shall deposit emission allowances established 

14 under paragraph (2) in the strategic reserve, except 

15 that, with respect to any such emission allowances in 

16 excess of the amount necessary to fill the strategic re17 serve to its original size, the Administrator shall— 

18 ‘‘(A) except as provided in subparagraph 

19 (B), assign a vintage year to the emission allow20 ance, which shall be no earlier than the year in 

21 which the allowance is established under para22 graph (2) and shall treat such allowances as ones 

23 that are not designated for distribution or auc24 tion for purposes of section 782(q) and (r); and 

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1 ‘‘(B) to the extent any such allowances can2 not be assigned a vintage year because of the 

3 limitation in paragraph (4), retire the allow4 ances. 

5 ‘‘(4) LIMITATION.—In no case may the Adminis6 trator assign under paragraph (3)(A) more emission 

7 allowances to a vintage year than the number of 

8 emission allowances from that vintage year that were 

9 placed in the strategic reserve account under sub10 section (b)(1). 

11 ‘‘(h) AVAILABILITY OF INTERNATIONAL OFFSET CRED12 ITS FOR AUCTION.— 

13 ‘‘(1) IN GENERAL.—The regulations promulgated 

14 under section 721(h) shall allow any entity holding 

15 international offset credits from reduced deforestation 

16 issued under section 743(e) to request that the Admin17 istrator include such offset credits in an upcoming 

18 strategic reserve auction. The regulations shall pro19 vide that— 

20 ‘‘(A) such international offset credits will be 

21 used to fill bid orders only after the supply of 

22 strategic reserve allowances available for sale at 

23 that auction has been depleted; 

24 ‘‘(B) international offset credits may be sold 

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1 section only if the Administrator determines that 

2 it is highly likely that covered entities will, to 

3 cover emissions occurring in the year the auction 

4 is held, use offset credits to demonstrate compli5 ance under section 722 for emissions equal to or 

6 greater than 80 percent of 2 billion tons of car7 bon dioxide equivalent; 

8 ‘‘(C) upon sale of such international offset 

9 credits, the Administrator shall retire those 

10 international offset credits, and establish and 

11 provide to the purchasers a number of emission 

12 allowances equal to 80 percent of the number of 

13 international offset credits so retired, which al14 lowances shall be in addition to those established 

15 under section 721(a); and 

16 ‘‘(D) for international offset credits sold 

17 pursuant to this subsection, the proceeds for the 

18 entity that offered the international offset credits 

19 for sale shall be the lesser of— 

20 ‘‘(i) the average daily closing price for 

21 international offset credits sold on registered 

22 exchanges (or if such price is unavailable, 

23 the average price as determined by the Ad24 ministrator) during the six months prior to 

25 the strategic reserve auction at which they 

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1 were auctioned, with the remaining funds 

2 collected upon the sale of the international 

3 offset credits deposited in the Treasury; and 

4 ‘‘(ii) the amount received for the inter5 national offset credits at the auction. 

6 ‘‘(2) PROCEEDS.—For international offset credits 

7 sold pursuant to this subsection, notwithstanding sec8 tion 3302 of title 31, United States Code, or any 

9 other provision of law, within 90 days of receipt, the 

10 United States shall transfer the proceeds from the 

11 auction, as defined in paragraph (1)(D), to the entity 

12 that offered the international offset credits for sale. No 

13 funds transferred from a purchaser to a seller of 

14 international offset credits under this paragraph shall 

15 be held by any officer or employee of the United 

16 States or treated for any purpose as public monies. 

17 ‘‘(3) PRICING.—When the Administrator acts 

18 under this subsection as the agent of an entity in pos19 session of international offset credits, the Adminis20 trator is not obligated to obtain the highest price pos21 sible for the international offset credits, and instead 

22 shall auction such international offset credits in the 

23 same manner and pursuant to the same rules (except 

24 as modified in paragraph (1)) as set forth for auc25 tioning strategic reserve allowances. Entities requestmstockstill on PROD1PC66 with BILLS

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1 ing that such international offset credits be offered for 

2 sale at a strategic reserve auction may not set a min3 imum reserve price for their international offset cred4 its that is different than the minimum strategic re5 serve auction price set pursuant to subsection (c). 

6 ‘‘(i) INITIAL REGULATIONS.—Not later than 24 

7 months after the date of enactment of this title, the Admin8 istrator shall promulgate regulations, in consultation with 

9 other appropriate agencies, governing the auction of allow10 ances under this section. Such regulations shall include the 

11 following requirements: 

12 ‘‘(1) FREQUENCY; FIRST AUCTION.—Auctions 

13 shall be held four times per year at regular intervals, 

14 with the first auction to be held no later than March 

15 31, 2012. 

16 ‘‘(2) AUCTION FORMAT.—Auctions shall follow a 

17 single-round, sealed-bid, uniform price format. 

18 ‘‘(3) PARTICIPATION; FINANCIAL ASSURANCE.— 

19 Auctions shall be open to any covered entity eligible 

20 to purchase emission allowances at the auction under 

21 subsection (a)(2), except that the Administrator may 

22 establish financial assurance requirements to ensure 

23 that auction participants can and will perform on 

24 their bids. 

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1 ‘‘(4) DISCLOSURE OF BENEFICIAL OWNERSHIP.— 

2 Each bidder in an auction shall be required to dis3 close the person or entity sponsoring or benefitting 

4 from the bidder’s participation in the auction if such 

5 person or entity is, in whole or in part, other than 

6 the bidder. 

7 ‘‘(5) PURCHASE LIMITS.—No person may, di8 rectly or in concert with another participant, pur9 chase more than 20 percent of the allowances offered 

10 for sale at any quarterly auction. 

11 ‘‘(6) PUBLICATION OF INFORMATION.—After the 

12 auction, the Administrator shall, in a timely fashion, 

13 publish the identities of winning bidders, the quantity 

14 of allowances obtained by each winning bidder, and 

15 the auction clearing price. 

16 ‘‘(7) OTHER REQUIREMENTS.—The Adminis17 trator may include in the regulations such other re18 quirements or provisions as the Administrator, in 

19 consultation with other agencies as appropriate, con20 siders appropriate to promote effective, efficient, 

21 transparent, and fair administration of auctions 

22 under this section. 

23 ‘‘(j) REVISION OF REGULATIONS.—The Administrator 

24 may, at any time, in consultation with other agencies as 

25 appropriate, revise the initial regulations promulgated 

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1 under subsection (i). Such revised regulations need not meet 

2 the requirements identified in subsection (i) if the Adminis3 trator determines that an alternative auction design would 

4 be more effective, taking into account factors including costs 

5 of administration, transparency, fairness, and risks of col6 lusion or manipulation. In determining whether and how 

7 to revise the initial regulations under this subsection, the 

8 Administrator shall not consider maximization of revenues 

9 to the Federal Government. 

10 ‘‘SEC. 727. PERMITS. 

11 ‘‘(a) PERMIT PROGRAM.—For stationary sources sub12 ject to title V of this Act, that are covered entities, the provi13 sions of this title shall be implemented by permits issued 

14 to such covered entities (and enforced) in accordance with 

15 the provisions of title V, as modified by this title. Any such 

16 permit issued by the Administrator, or by a State with an 

17 approved permit program, shall require the owner or oper18 ator of a covered entity to hold emission allowances or offset 

19 credits at least equal to the total annual amount of carbon 

20 dioxide equivalents for its combined emissions and attrib21 utable greenhouse gas emissions to which section 722 ap22 plies. No such permit shall be issued that is inconsistent 

23 with the requirements of this title, and title V as applicable. 

24 Nothing in this section regarding compliance plans or in 

25 title V shall be construed as affecting allowances or offset 

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1 credits. Submission of a statement by the owner or operator, 

2 or the designated representative of the owners and opera3 tors, of a covered entity that the owners and operators will 

4 hold emission allowances or offset credits for the entity’s 

5 combined emissions and attributable greenhouse gas emis6 sions to which section 722 applies shall be deemed to meet 

7 the proposed and approved planning requirements of title 

8 V. Recordation by the Administrator of transfers of emis9 sion allowances shall amend automatically all applicable 

10 proposed or approved permit applications, compliance 

11 plans, and permits. 

12 ‘‘(b) MULTIPLE OWNERS.—No permit shall be issued 

13 under this section and no allowances or offset credits shall 

14 be disbursed under this title to a covered entity or any other 

15 person until the designated representative of the owners or 

16 operators has filed a certificate of representation with re17 gard to matters under this title, including the holding and 

18 distribution of emission allowances and the proceeds of 

19 transactions involving emission allowances. Where there are 

20 multiple holders of a legal or equitable title to, or a lease21 hold interest in, such a covered entity or other entity or 

22 where a utility or industrial customer purchases power 

23 under a long-term power purchase contract from an inde24 pendent power production facility that is a covered entity, 

25 the certificate shall state— 

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1 ‘‘(1) that emission allowances and the proceeds of 

2 transactions involving emission allowances will be 

3 deemed to be held or distributed in proportion to each 

4 holder’s legal, equitable, leasehold, or contractual res5 ervation or entitlement; or 

6 ‘‘(2) if such multiple holders have expressly pro7 vided for a different distribution of emission allow8 ances by contract, that emission allowances and the 

9 proceeds of transactions involving emission allow10 ances will be deemed to be held or distributed in ac11 cordance with the contract. 

12 A passive lessor, or a person who has an equitable interest 

13 through such lessor, whose rental payments are not based, 

14 either directly or indirectly, upon the revenues or income 

15 from the covered entity or other entity shall not be deemed 

16 to be a holder of a legal, equitable, leasehold, or contractual 

17 interest for the purpose of holding or distributing emission 

18 allowances as provided in this subsection, during either the 

19 term of such leasehold or thereafter, unless expressly pro20 vided for in the leasehold agreement. Except as otherwise 

21 provided in this subsection, where all legal or equitable title 

22 to or interest in a covered entity, or other entity, is held 

23 by a single person, the certificate shall state that all emis24 sion allowances received by the entity are deemed to be held 

25 for that person. 

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1 ‘‘(c) PROHIBITION.—It shall be unlawful for any per2 son to operate any stationary source subject to the require3 ments of this section except in compliance with the terms 

4 and requirements of a permit issued by the Administrator 

5 or a State with an approved permit program in accordance 

6 with this section. For purposes of this subsection, compli7 ance, as provided in section 504(f), with a permit issued 

8 under title V which complies with this title for covered enti9 ties shall be deemed compliance with this subsection as well 

10 as section 502(a). 

11 ‘‘(d) RELIABILITY.—Nothing in this section or title V 

12 shall be construed as requiring termination of operations 

13 of a stationary source that is a covered entity for failure 

14 to have an approved permit, or compliance plan, that is 

15 consistent with the requirements in the second and fifth sen16 tences of subsection (a) concerning the holding of emission 

17 allowances, compensatory allowances, international emis18 sion allowances, or offset allowances, except that any such 

19 covered entity may be subject to the applicable enforcement 

20 provision of section 113. 

21 ‘‘(e) REGULATIONS.—The Administrator shall promul22 gate regulations to implement this section. To provide for 

23 permits required under this section, each State in which 

24 one or more stationary sources and that are covered entities 

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1 are located shall submit, in accordance with this section 

2 and title V, revised permit programs for approval. 

3 ‘‘SEC. 728. INTERNATIONAL EMISSION ALLOWANCES. 

4 ‘‘(a) QUALIFYING PROGRAMS.—The Administrator, in 

5 consultation with the Secretary of State, may by rule des6 ignate an international climate change program as a quali7 fying international program if— 

8 ‘‘(1) the program is run by a national or supra9 national foreign government, and imposes a manda10 tory absolute tonnage limit on greenhouse gas emis11 sions from 1 or more foreign countries, or from 1 or 

12 more economic sectors in such a country or countries; 

13 and 

14 ‘‘(2) the program is at least as stringent as the 

15 program established by this title, including provisions 

16 to ensure at least comparable monitoring, compliance, 

17 enforcement, quality of offsets, and restrictions on the 

18 use of offsets. 

19 ‘‘(b) DISQUALIFIED ALLOWANCES.—An international 

20 emission allowance may not be held under section 722(d)(2) 

21 if it is in the nature of an offset instrument or allowance 

22 awarded based on the achievement of greenhouse gas emis23 sion reductions or avoidance, or greenhouse gas sequestra24 tion, that are not subject to the mandatory absolute tonnage 

25 limits referred to in subsection (a)(1). 

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1 ‘‘(c) RETIREMENT.— 

2 ‘‘(1) ENTITY CERTIFICATION.—The owner or op3 erator of an entity that holds an international emis4 sion allowance under section 722(d)(2) shall certify to 

5 the Administrator that such international emission 

6 allowance has not previously been used to comply 

7 with any foreign, international, or domestic green8 house gas regulatory program. 

9 ‘‘(2) RETIREMENT.— 

10 ‘‘(A) FOREIGN AND INTERNATIONAL REGU11 LATORY ENTITIES.—The Administrator, in con12 sultation with the Secretary of State, shall seek, 

13 by whatever means appropriate, including agree14 ments and technical cooperation on allowance 

15 tracking, to ensure that any relevant foreign, 

16 international, and domestic regulatory entities— 

17 ‘‘(i) are notified of the use, for pur18 poses of compliance with this title, of any 

19 international emission allowance; and 

20 ‘‘(ii) provide for the disqualification of 

21 such international emission allowance for 

22 any subsequent use under the relevant for23 eign, international, or domestic greenhouse 

24 gas regulatory program, regardless of 

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1 whether such use is a sale, exchange, or sub2 mission to satisfy a compliance obligation. 

3 ‘‘(B) DISQUALIFICATION FROM FURTHER

4 USE.—The Administrator shall ensure that, once 

5 an international emission allowance has been 

6 disqualified or otherwise used for purposes of 

7 compliance with this title, such allowance shall 

8 be disqualified from any further use under this 

9 title. 

10 ‘‘(d) USE LIMITATIONS.—The Administrator may, by 

11 rule, modify the percentage applicable to international 

12 emission allowances under section 722(d)(2), consistent 

13 with the purposes of the Safe Climate Act. 

14 ‘‘PART D—OFFSETS 

15 ‘‘SEC. 731. OFFSETS INTEGRITY ADVISORY BOARD. 

16 ‘‘(a) ESTABLISHMENT.—Not later than 30 days after 

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

18 establish an independent Offsets Integrity Advisory Board. 

19 The Advisory Board shall make recommendations to the Ad20 ministrator for use in promulgating and revising regula21 tions under this part and part E, and for ensuring the over22 all environmental integrity of the programs established pur23 suant to those regulations. 

24 ‘‘(b) MEMBERSHIP.—The Advisory Board shall be 

25 comprised of at least nine members. Each member shall be 

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1 qualified by education, training, and experience to evaluate 

2 scientific and technical information on matters referred to 

3 the Board under this section. The Administrator shall ap4 point Advisory Board members, including a chair and vice5 chair of the Advisory Board. Terms shall be 3 years in 

6 length, except for initial terms, which may be up to 5 years 

7 in length to allow staggering. Members may be reappointed 

8 only once for an additional 3-year term, and such second 

9 term may follow directly after a first term. 

10 ‘‘(c) ACTIVITIES.—The Advisory Board established 

11 pursuant to subsection (a) shall— 

12 ‘‘(1) provide recommendations, not later than 90 

13 days after the Advisory Board’s establishment and pe14 riodically thereafter, to the Administrator regarding 

15 offset project types that should be considered for eligi16 bility under section 733, taking into consideration 

17 relevant scientific and other issues, including— 

18 ‘‘(A) the availability of a representative 

19 data set for use in developing the activity base20 line; 

21 ‘‘(B) the potential for accurate quantifica22 tion of greenhouse gas reduction, avoidance, or 

23 sequestration for an offset project type; 

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1 ‘‘(C) the potential level of scientific and 

2 measurement uncertainty associated with an off3 set project type; and 

4 ‘‘(D) any beneficial or adverse environ5 mental, public health, welfare, social, economic, 

6 or energy effects associated with an offset project 

7 type; 

8 ‘‘(2) make available to the Administrator its ad9 vice and comments on offset methodologies that should 

10 be considered under regulations promulgated pursu11 ant to section 734(a) and (b), including methodologies 

12 to address the issues of additionality, activity base13 lines, measurement, leakage, uncertainty, permanence, 

14 and environmental integrity; 

15 ‘‘(3) make available to the Administrator, and 

16 other relevant Federal agencies, its advice and com17 ments regarding scientific, technical, and methodo18 logical issues specific to the issuance of international 

19 offset credits under section 743; 

20 ‘‘(4) make available to the Administrator, and 

21 other relevant Federal agencies, its advice and com22 ments regarding scientific, technical, and methodo23 logical issues associated with the implementation of 

24 part E; 

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1 ‘‘(5) make available to the Administrator its ad2 vice and comments on areas in which further knowl3 edge is required to appraise the adequacy of existing, 

4 revised, or proposed methodologies for use under this 

5 part and part E, and describe the research efforts nec6 essary to provide the required information; and 

7 ‘‘(6) make available to the Administrator its ad8 vice and comments on other ways to improve or safe9 guard the environmental integrity of programs estab10 lished under this part and part E. 

11 ‘‘(d) SCIENTIFIC REVIEW OF OFFSET AND DEFOREST12 ATION REDUCTION PROGRAMS.—Not later than January 1, 

13 2017, and at five-year intervals thereafter, the Advisory 

14 Board shall submit to the Administrator and make avail15 able to the public an analysis of relevant scientific and tech16 nical information related to this part and part E. The Ad17 visory Board shall review approved and potential meth18 odologies, scientific studies, offset project monitoring, offset 

19 project verification reports, and audits related to this part 

20 and part E, and evaluate the net emissions effects of imple21 mented offset projects. The Advisory Board shall recommend 

22 changes to offset methodologies, protocols, or project types, 

23 or to the overall offset program under this part, to ensure 

24 that offset credits issued by the Administrator do not com25 promise the integrity of the annual emission reductions esmstockstill on PROD1PC66 with BILLS

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1 tablished under section 703, and to avoid or minimize ad2 verse effects to human health or the environment. 

3 ‘‘SEC. 732. ESTABLISHMENT OF OFFSETS PROGRAM. 

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

5 date of enactment of this title, the Administrator, in con6 sultation with appropriate Federal agencies and taking 

7 into consideration the recommendations of the Advisory 

8 Board, shall promulgate regulations establishing a program 

9 for the issuance of offset credits in accordance with the re10 quirements of this part. The Administrator shall periodi11 cally revise these regulations as necessary to meet the re12 quirements of this part. 

13 ‘‘(b) REQUIREMENTS.—The regulations described in 

14 subsection (a) shall— 

15 ‘‘(1) authorize the issuance of offset credits with 

16 respect to qualifying offset projects that result in re17 ductions or avoidance of greenhouse gas emissions, or 

18 sequestration of greenhouse gases; 

19 ‘‘(2) ensure that such offset credits represent 

20 verifiable and additional greenhouse gas emission re21 ductions or avoidance, or increases in sequestration; 

22 ‘‘(3) ensure that offset credits issued for seques23 tration offset projects are only issued for greenhouse 

24 gas reductions that are permanent; 

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1 ‘‘(4) provide for the implementation of the re2 quirements of this part; and 

3 ‘‘(5) include as reductions in greenhouse gases 

4 reductions achieved through the destruction of meth5 ane and its conversion to carbon dioxide. 

6 ‘‘(c) COORDINATION TO MINIMIZE NEGATIVE EF7 FECTS.—In promulgating and implementing regulations 

8 under this part, the Administrator shall act (including by 

9 rejecting projects, if necessary) to avoid or minimize, to the 

10 maximum extent practicable, adverse effects on human 

11 health or the environment resulting from the implementa12 tion of offset projects under this part. 

13 ‘‘(d) OFFSET REGISTRY.—The Administrator shall es14 tablish within the allowance tracking system established 

15 under section 724(d) an Offset Registry for qualifying offset 

16 projects and offset credits issued with respect thereto under 

17 this part. 

18 ‘‘(e) LEGAL STATUS OF OFFSET CREDIT.—An offset 

19 credit does not constitute a property right. 

20 ‘‘(f) FEES.—The Administrator shall assess fees pay21 able by offset project developers in an amount necessary to 

22 cover the administrative costs to the Environmental Protec23 tion Agency of carrying out the activities under this part. 

24 Amounts collected for such fees shall be available to the Admstockstill on PROD1PC66 with BILLS

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1 ministrator for carrying out the activities under this part 

2 to the extent provided in advance in appropriations Acts. 

3 ‘‘SEC. 733. ELIGIBLE PROJECT TYPES. 

4 ‘‘(a) LIST OF ELIGIBLE PROJECT TYPES.— 

5 ‘‘(1) IN GENERAL.—As part of the regulations 

6 promulgated under section 732(a), the Administrator 

7 shall establish, and may periodically revise, a list of 

8 types of projects eligible to generate offset credits, in9 cluding international offset credits, under this part. 

10 ‘‘(2) ADVISORY BOARD RECOMMENDATIONS.—In 

11 determining the eligibility of project types, the Ad12 ministrator shall take into consideration the rec13 ommendations of the Advisory Board. If a list estab14 lished under this section differs from the recommenda15 tions of the Advisory Board, the regulations promul16 gated under section 732(a) shall include a justifica17 tion for the discrepancy. 

18 ‘‘(3) INITIAL DETERMINATION.—The Adminis19 trator shall establish the initial eligibility list under 

20 paragraph (1) not later than one year after the date 

21 of enactment of this title. The Administrator shall 

22 add additional project types to the list not later than 

23 2 years after the date of enactment of this title. In de24 termining the initial list, the Administrator shall give 

25 priority to consideration of offset project types that 

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1 are recommended by the Advisory Board and for 

2 which there are well developed methodologies that the 

3 Administrator determines would meet the criteria of 

4 section 734, with such modifications as the Adminis5 trator deems appropriate. In issuing methodologies 

6 pursuant to section 734, the Administrator shall give 

7 priority to methodologies for offset types included on 

8 the initial eligibility list. 

9 ‘‘(b) MODIFICATION OF LIST.—The Administrator— 

10 ‘‘(1) may at any time, by rule, add a project 

11 type to the list established under subsection (a) if the 

12 Administrator, in consultation with appropriate Fed13 eral agencies and taking into consideration the rec14 ommendations of the Advisory Board, determines that 

15 the project type can generate additional reductions or 

16 avoidance of greenhouse gas emissions, or sequestra17 tion of greenhouse gases, subject to the requirements of 

18 this part; 

19 ‘‘(2) may at any time, by rule, determine that 

20 a project type on the list does not meet the require21 ments of this part, and remove a project type from 

22 the list established under subsection (a), in consulta23 tion with appropriate Federal agencies and taking 

24 into consideration any recommendations of the Advi25 sory Board; and 

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1 ‘‘(3) shall consider adding to or removing from 

2 the list established under subsection (a), at a min3 imum, project types proposed to the Administrator— 

4 ‘‘(A) by petition pursuant to subsection (c); 

5 or 

6 ‘‘(B) by the Advisory Board. 

7 ‘‘(c) PETITION PROCESS.—Any person may petition 

8 the Administrator to modify the list established under sub9 section (a) by adding or removing a project type pursuant 

10 to subsection (b). Any such petition shall include a showing 

11 by the petitioner that there is adequate data to establish 

12 that the project type does or does not meet the requirements 

13 of this part. Not later than 12 months after receipt of such 

14 a petition, the Administrator shall either grant or deny the 

15 petition and publish a written explanation of the reasons 

16 for the Administrator’s decision. The Administrator may 

17 not deny a petition under this subsection on the basis of 

18 inadequate Environmental Protection Agency resources or 

19 time for review. 

20 ‘‘SEC. 734. REQUIREMENTS FOR OFFSET PROJECTS. 

21 ‘‘(a) METHODOLOGIES.—As part of the regulations 

22 promulgated under section 732(a), the Administrator shall 

23 establish, for each type of offset project listed as eligible 

24 under section 733, the following: 

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1 ‘‘(1) ADDITIONALITY.—A standardized method2 ology for determining the additionality of greenhouse 

3 gas emission reductions or avoidance, or greenhouse 

4 gas sequestration, achieved by an offset project of that 

5 type. Such methodology shall ensure, at a minimum, 

6 that any greenhouse gas emission reduction or avoid7 ance, or any greenhouse gas sequestration, is consid8 ered additional only to the extent that it results from 

9 activities that— 

10 ‘‘(A) are not required by or undertaken to 

11 comply with any law, including any regulation 

12 or consent order; 

13 ‘‘(B) were not commenced prior to January 

14 1, 2009, except in the case of— 

15 ‘‘(i) offset project activities that com16 menced after January 1, 2001, and were 

17 registered as of the date of enactment of this 

18 title under an offset program with respect to 

19 which the Administrator has made an af20 firmative determination under section 

21 740(a)(2); or 

22 ‘‘(ii) activities that are readily revers23 ible, with respect to which the Adminis24 trator may set an alternative earlier date 

25 under this subparagraph that is not earlier 

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1 than January 1, 2001, where the Adminis2 trator determines that setting such an alter3 native date may produce an environmental 

4 benefit by removing an incentive to cease 

5 and then reinitiate activities that began 

6 prior to January 1, 2009; 

7 ‘‘(C) are not receiving support under part 

8 E of this title or title IV, subtitle D of the Amer9 ican Clean Energy and Security Act of 2009; 

10 and 

11 ‘‘(D) exceed the activity baseline established 

12 under paragraph (2). 

13 ‘‘(2) ACTIVITY BASELINES.—A standardized 

14 methodology for establishing activity baselines for off15 set projects of that type. The Administrator shall set 

16 activity baselines to reflect a conservative estimate of 

17 business-as-usual performance or practices for the rel18 evant type of activity such that the baseline provides 

19 an adequate margin of safety to ensure the environ20 mental integrity of offsets calculated in reference to 

21 such baseline. 

22 ‘‘(3) QUANTIFICATION METHODS.—A standard23 ized methodology for determining the extent to which 

24 greenhouse gas emission reductions or avoidance, or 

25 greenhouse gas sequestration, achieved by an offset 

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1 project of that type exceed a relevant activity baseline, 

2 including protocols for monitoring and accounting for 

3 uncertainty. 

4 ‘‘(4) LEAKAGE.—A standardized methodology for 

5 accounting for and mitigating potential leakage, if 

6 any, from an offset project of that type, taking uncer7 tainty into account. 

8 ‘‘(b) ACCOUNTING FOR REVERSALS.— 

9 ‘‘(1) IN GENERAL.—For each type of sequestra10 tion project listed under section 733, the Adminis11 trator shall establish requirements to account for and 

12 address reversals, including— 

13 ‘‘(A) a requirement to report any reversal 

14 with respect to an offset project for which offset 

15 credits have been issued under this part; 

16 ‘‘(B) provisions to require emission allow17 ances to be held in amounts to fully compensate 

18 for greenhouse gas emissions attributable to re19 versals, and to assign responsibility for holding 

20 such emission allowances; and 

21 ‘‘(C) any other provisions the Adminis22 trator determines necessary to account for and 

23 address reversals. 

24 ‘‘(2) MECHANISMS.—The Administrator shall 

25 prescribe mechanisms to ensure that any sequestramstockstill on PROD1PC66 with BILLS

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1 tion with respect to which an offset credit is issued 

2 under this part results in a permanent net increase 

3 in sequestration, and that full account is taken of any 

4 actual or potential reversal of such sequestration, with 

5 an adequate margin of safety. The Administrator 

6 shall prescribe at least one of the following mecha7 nisms to meet the requirements of this paragraph: 

8 ‘‘(A) An offsets reserve, pursuant to para9 graph (3). 

10 ‘‘(B) Insurance that provides for purchase 

11 and provision to the Administrator for retire12 ment of an amount of offset credits or emission 

13 allowances equal in number to the tons of carbon 

14 dioxide equivalents of greenhouse gas emissions 

15 released due to reversal. 

16 ‘‘(C) Another mechanism that the Adminis17 trator determines satisfies the requirements of 

18 this part. 

19 ‘‘(3) OFFSETS RESERVE.— 

20 ‘‘(A) IN GENERAL.—An offsets reserve re21 ferred to in paragraph (2)(A) is a program 

22 under which, before issuance of offset credits 

23 under this part, the Administrator shall subtract 

24 and reserve from the quantity to be issued a 

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1 quantity of offset credits based on the risk of re2 versal. The Administrator shall— 

3 ‘‘(i) hold these reserved offset credits in 

4 the offsets reserve; and 

5 ‘‘(ii) register the holding of the reserved 

6 offset credits in the Offset Registry estab7 lished under section 732(d). 

8 ‘‘(B) PROJECT REVERSAL.— 

9 ‘‘(i) IN GENERAL.—If a reversal has 

10 occurred with respect an offset project for 

11 which offset credits are reserved under this 

12 paragraph, the Administrator shall remove 

13 offset credits from the offsets reserve and 

14 cancel them to fully account for the tons of 

15 carbon dioxide equivalent that are no longer 

16 sequestered. 

17 ‘‘(ii) INTENTIONAL REVERSALS.—If the 

18 Administrator determines that a reversal 

19 was intentional, the offset project developer 

20 for the relevant offset project shall place into 

21 the offsets reserve a quantity of offset cred22 its, or combination of offset credits and 

23 emission allowances, equal in number to the 

24 number of reserve offset credits that were 

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1 canceled due to the reversal pursuant to 

2 clause (i). 

3 ‘‘(iii) UNINTENTIONAL REVERSALS.—If 

4 the Administrator determines that a rever5 sal was unintentional, the offset project de6 veloper for the relevant offset project shall 

7 place into the offsets reserve a quantity of 

8 offset credits, or combination of offset cred9 its and emission allowances, equal in num10 ber to half the number of offset credits that 

11 were reserved for that offset project, or half 

12 the number of reserve offset credits that were 

13 canceled due to the reversal pursuant to 

14 clause (i), whichever is less. 

15 ‘‘(C) USE OF RESERVED OFFSET CRED16 ITS.—Offset credits placed into the offsets reserve 

17 under this paragraph may not be used to comply 

18 with section 722. 

19 ‘‘(c) CREDITING PERIODS.— 

20 ‘‘(1) IN GENERAL.—For each offset project type, 

21 the Administrator shall specify a crediting period, 

22 and establish provisions for petitions for new cred23 iting periods, in accordance with this subsection. 

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1 ‘‘(2) DURATION.—The crediting period shall be 

2 no less than 5 and no greater than 10 years for any 

3 project type other than those involving sequestration. 

4 ‘‘(3) ELIGIBILITY.—An offset project shall be eli5 gible to generate offset credits under this part only 

6 during the project’s crediting period. During such 

7 crediting period, the project shall remain eligible to 

8 generate offset credits, subject to the methodologies 

9 and project type eligibility list that applied as of the 

10 date of project approval under section 735, except as 

11 provided in paragraph (4) of this subsection. 

12 ‘‘(4) PETITION FOR NEW CREDITING PERIOD.— 

13 An offset project developer may petition for a new 

14 crediting period to commence after termination of a 

15 crediting period, subject to the methodologies and 

16 project type eligibility list in effect at the time when 

17 such petition is submitted. A petition may not be sub18 mitted under this paragraph more than 18 months 

19 before the end of the pending crediting period. The 

20 Administrator may limit the number of new crediting 

21 periods available for projects of particular project 

22 types. 

23 ‘‘(d) ENVIRONMENTAL INTEGRITY.—In establishing the 

24 requirements under this section, the Administrator shall 

25 apply conservative assumptions or methods to maximize the 

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1 certainty that the environmental integrity of the cap estab2 lished under section 703 is not compromised. 

3 ‘‘(e) PRE-EXISTING METHODOLOGIES.—In promul4 gating requirements under this section, the Administrator 

5 shall give due consideration to methodologies for offset 

6 projects existing as of the date of enactment of this title. 

7 ‘‘(f) ADDED PROJECT TYPES.—The Administrator 

8 shall establish methodologies described in subsection (a), 

9 and, as applicable, requirements and mechanisms for rever10 sals as described in subsection (b), for any project type that 

11 is added to the list pursuant to section 733. 

12 ‘‘SEC. 735. APPROVAL OF OFFSET PROJECTS. 

13 ‘‘(a) APPROVAL PETITION.—An offset project developer 

14 shall submit an offset project approval petition providing 

15 such information as the Administrator requires to deter16 mine whether the offset project is eligible for issuance of off17 set credits under rules promulgated pursuant to this part. 

18 ‘‘(b) TIMING.—An approval petition shall be submitted 

19 to the Administrator under subsection (a) no later than the 

20 time at which an offset project’s first verification report is 

21 submitted under section 736. 

22 ‘‘(c) APPROVAL PETITION REQUIREMENTS.—As part 

23 of the regulations promulgated under section 732, the Ad24 ministrator shall include provisions for, and shall specify, 

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1 the required components of an offset project approval peti2 tion required under subsection (a), which shall include— 

3 ‘‘(1) designation of an offset project developer; 

4 and 

5 ‘‘(2) any other information that the Adminis6 trator considers to be necessary to achieve the pur7 poses of this part. 

8 ‘‘(d) APPROVAL AND NOTIFICATION.—Not later than 

9 90 days after receiving a complete approval petition under 

10 subsection (a), the Administrator shall approve or deny the 

11 petition in writing and, if the petition is denied, provide 

12 the reasons for denial. After an offset project is approved, 

13 the offset project developer shall not be required to resubmit 

14 an approval petition during the offset project’s crediting pe15 riod, except as provided in section 734(c)(4). 

16 ‘‘(e) APPEAL.—The Administrator shall establish pro17 cedures for appeal and review of determinations made 

18 under subsection (d). 

19 ‘‘(f) VOLUNTARY PREAPPROVAL REVIEW.—The Ad20 ministrator may establish a voluntary preapproval review 

21 procedure, to allow an offset project developer to request the 

22 Administrator to conduct a preliminary eligibility review 

23 for an offset project. Findings of such reviews shall not be 

24 binding upon the Administrator. The voluntary 

25 preapproval review procedure— 

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1 ‘‘(1) shall require the offset project developer to 

2 submit such basic project information as the Admin3 istrator requires to provide a meaningful review; and 

4 ‘‘(2) shall require a response from the Adminis5 trator not later than 6 weeks after receiving a request 

6 for review under this subsection. 

7 ‘‘SEC. 736. VERIFICATION OF OFFSET PROJECTS. 

8 ‘‘(a) IN GENERAL.—As part of the regulations promul9 gated under section 732(a), the Administrator shall estab10 lish requirements, including protocols, for verification of the 

11 quantity of greenhouse gas emission reductions or avoid12 ance, or sequestration of greenhouse gases, resulting from 

13 an offset project. The regulations shall require that an offset 

14 project developer shall submit a report, prepared by a third15 party verifier accredited under subsection (d), providing 

16 such information as the Administrator requires to deter17 mine the quantity of greenhouse gas emission reductions or 

18 avoidance, or sequestration of greenhouse gas, resulting 

19 from the offset project. 

20 ‘‘(b) SCHEDULE.—The Administrator shall prescribe a 

21 schedule for the submission of verification reports under 

22 subsection (a). 

23 ‘‘(c) VERIFICATION REPORT REQUIREMENTS.—The 

24 Administrator shall specify the required components of a 

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1 verification report required under subsection (a), which 

2 shall include— 

3 ‘‘(1) the name and contact information for a des4 ignated representative for the offset project developer; 

5 ‘‘(2) the quantity of greenhouse gas reduced, 

6 avoided, or sequestered; 

7 ‘‘(3) the methodologies applicable to the project 

8 pursuant to section 734; 

9 ‘‘(4) a certification that the project meets the ap10 plicable requirements; 

11 ‘‘(5) a certification establishing that the conflict 

12 of interest requirements in the regulations promul13 gated under subsection (d)(1) have been complied 

14 with; and 

15 ‘‘(6) any other information that the Adminis16 trator considers to be necessary to achieve the pur17 poses of this part. 

18 ‘‘(d) VERIFIER ACCREDITATION.— 

19 ‘‘(1) IN GENERAL.—As part of the regulations 

20 promulgated under section 732(a), the Administrator 

21 shall establish a process and requirements for periodic 

22 accreditation of third-party verifiers to ensure that 

23 such verifiers are professionally qualified and have no 

24 conflicts of interest. 

25 ‘‘(2) STANDARDS.— 

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1 ‘‘(A) AMERICAN NATIONAL STANDARDS IN2 STITUTE ACCREDITATION.—The Administrator 

3 may accredit, or accept for purposes of accredita4 tion under this subsection, verifiers accredited 

5 under the American National Standards Insti6 tute (ANSI) accreditation program in accord7 ance with ISO 14065. The Administrator shall 

8 accredit, or accept for accreditation, verifiers 

9 under this subparagraph only if the Adminis10 trator finds that the American National Stand11 ards Institute accreditation program provides 

12 sufficient assurance that the requirements of this 

13 part will be met. 

14 ‘‘(B) EPA ACCREDITATION.—As part of the 

15 regulations promulgated under section 732(a), 

16 the Administrator may establish accreditation 

17 standards for verifiers under this subsection, and 

18 may establish related training and testing pro19 grams and requirements. 

20 ‘‘(3) PUBLIC ACCESSIBILITY.—Each verifier 

21 meeting the requirements for accreditation in accord22 ance with this subsection shall be listed in a publicly 

23 accessible database, which shall be maintained and 

24 updated by the Administrator. 

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1 ‘‘SEC. 737. ISSUANCE OF OFFSET CREDITS. 

2 ‘‘(a) DETERMINATION AND NOTIFICATION.—Not later 

3 than 90 days after receiving a complete verification report 

4 under section 736, the Administrator shall— 

5 ‘‘(1) make the report publicly available; 

6 ‘‘(2) make a determination of the quantity of 

7 greenhouse gas emissions reduced or avoided, or 

8 greenhouse gases sequestered, resulting from an offset 

9 project approved under section 735; and 

10 ‘‘(3) notify the offset project developer in writing 

11 of such determination. 

12 ‘‘(b) ISSUANCE OF OFFSET CREDITS.—The Adminis13 trator shall issue one offset credit to an offset project devel14 oper for each ton of carbon dioxide equivalent that the Ad15 ministrator has determined has been reduced, avoided, or 

16 sequestered during the period covered by a verification re17 port submitted in accordance with section 736, only if— 

18 ‘‘(1) the Administrator has approved the offset 

19 project pursuant to section 735; and 

20 ‘‘(2) the relevant emissions reduction, avoidance, 

21 or sequestration has— 

22 ‘‘(A) already occurred, during the offset 

23 project’s crediting period; and 

24 ‘‘(B) occurred after January 1, 2009. 

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1 ‘‘(c) APPEAL.—The Administrator shall establish pro2 cedures for appeal and review of determinations made 

3 under subsection (a). 

4 ‘‘(d) TIMING.—Offset credits meeting the criteria estab5 lished in subsection (b) shall be issued not later than 2 

6 weeks following the verification determination made by the 

7 Administrator under subsection (a). 

8 ‘‘(e) REGISTRATION.—The Administrator shall assign 

9 a unique serial number to and register each offset credit 

10 to be issued in the Offset Registry established under section 

11 732(d). 

12 ‘‘SEC. 738. AUDITS. 

13 ‘‘(a) IN GENERAL.—The Administrator shall, on an 

14 ongoing basis, conduct random audits of offset projects, off15 set credits, and practices of third-party verifiers. In each 

16 year, the Administrator shall conduct audits, at minimum, 

17 for a representative sample of project types and geographic 

18 areas. 

19 ‘‘(b) DELEGATION.—The Administrator may delegate 

20 to a State or tribal government the responsibility for con21 ducting audits under this section if the Administrator finds 

22 that the program proposed by the State or tribal govern23 ment provides assurances equivalent to those provided by 

24 the auditing program of the Administrator, and that the 

25 integrity of the offset program under this part will be mainmstockstill on PROD1PC66 with BILLS

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1 tained. Nothing in this subsection shall prevent the Admin2 istrator from conducting any audit the Administrator con3 siders necessary and appropriate. 

4 ‘‘SEC. 739. PROGRAM REVIEW AND REVISION. 

5 ‘‘At least once every 5 years, the Administrator shall 

6 review and, based on new or updated information and tak7 ing into consideration the recommendations of the Advisory 

8 Board, update and revise— 

9 ‘‘(1) the list of eligible project types established 

10 under section 733; 

11 ‘‘(2) the methodologies established, including spe12 cific activity baselines, under section 734(a); 

13 ‘‘(3) the reversal requirements and mechanisms 

14 established or prescribed under section 734(b); 

15 ‘‘(4) measures to improve the accountability of 

16 the offsets program; and 

17 ‘‘(5) any other requirements established under 

18 this part to ensure the environmental integrity and 

19 effective operation of this part. 

20 ‘‘SEC. 740. EARLY OFFSET SUPPLY. 

21 ‘‘(a) PROJECTS REGISTERED UNDER OTHER GOVERN22 MENT-RECOGNIZED PROGRAMS.—Except as provided in 

23 subsection (b) or (c), the Administrator shall issue one offset 

24 credit for each ton of carbon dioxide equivalent emissions 

25 reduced, avoided, or sequestered— 

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1 ‘‘(1) under an offset project that was started 

2 after January 1, 2001; 

3 ‘‘(2) for which a credit was issued under any 

4 regulatory or voluntary greenhouse gas emission offset 

5 program that the Administrator determines— 

6 ‘‘(A) was established under State or tribal 

7 law or regulation prior to January 1, 2009, or 

8 has been approved by the Administrator pursu9 ant to subsection (e); 

10 ‘‘(B) has developed offset project type stand11 ards, methodologies, and protocols through a 

12 public consultation process or a peer review 

13 process; 

14 ‘‘(C) has made available to the public 

15 standards, methodologies, and protocols that re16 quire that credited emission reductions, avoid17 ance, or sequestration are permanent, additional, 

18 verifiable, and enforceable; 

19 ‘‘(D) requires that all emission reductions, 

20 avoidance, or sequestration be verified by a State 

21 regulatory agency or an accredited third-party 

22 independent verification body; 

23 ‘‘(E) requires that all credits issued are reg24 istered in a publicly accessible registry, with in25 dividual serial numbers assigned for each ton of 

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1 carbon dioxide equivalent emission reductions, 

2 avoidance, or sequestration; and 

3 ‘‘(F) ensures that no credits are issued for 

4 activities for which the entity administering the 

5 program, or a program administrator or rep6 resentative, has funded, solicited, or served as a 

7 fund administrator for the development of, the 

8 project or activity that caused the emission re9 duction, avoidance, or sequestration; and 

10 ‘‘(3) for which the credit described in paragraph 

11 (2) is transferred to the Administrator. 

12 ‘‘(b) INELIGIBLE CREDITS.—Subsection (a) shall not 

13 apply to offset credits that have expired or have been re14 tired, canceled, or used for compliance under a program 

15 established under State or tribal law or regulation. 

16 ‘‘(c) LIMITATION.—Notwithstanding subsection (a)(1), 

17 offset credits shall be issued under this section— 

18 ‘‘(1) only for reductions or avoidance of green19 house gas emissions, or sequestration of greenhouse 

20 gases, that occur after January 1, 2009; and 

21 ‘‘(2) only until the date that is 3 years after the 

22 date of enactment of this title, or the date that regula23 tions promulgated under section 732(a) take effect, 

24 whichever occurs sooner. 

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1 ‘‘(d) RETIREMENT OF CREDITS.—The Administrator 

2 shall seek to ensure that offset credits described in subsection 

3 (a)(2) are retired for purposes of use under a program de4 scribed in subsection (b). 

5 ‘‘(e) OTHER PROGRAMS.—(1) Offset programs that ei6 ther— 

7 ‘‘(A) were not established under State or tribal 

8 law; or 

9 ‘‘(B) were not established prior to January 1, 

10 2009, 

11 but that otherwise meet all of the criteria of sub12 section (a)(2) may apply to the Administrator to be 

13 approved under this subsection as an eligible program 

14 for early offset credits under this section. 

15 ‘‘(2) The Administrator shall approve any such pro16 gram that the Administrator determines has criteria and 

17 methodologies of at least equal stringency to the criteria and 

18 methodologies of the programs established under State or 

19 tribal law that the Administrator determines meet the cri20 teria of subsection (a)(2). The Administrator may approve 

21 types of offsets under any such program that are subject 

22 to criteria and methodologies of at least equal stringency 

23 to the criteria and methodologies for such types of offsets 

24 applied under the programs established under State or trib25 al law that the Administrator determines meet the criteria 

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1 of subsection (a)(2). The Administrator shall make a deter2 mination on any application received under this subsection 

3 by no later than 180 days from the date of receipt of the 

4 application. 

5 ‘‘SEC. 741. ENVIRONMENTAL CONSIDERATIONS. 

6 ‘‘If the Administrator lists forestry projects as eligible 

7 offset project types under section 733, the Administrator, 

8 in consultation with appropriate Federal agencies, shall 

9 promulgate regulations for the selection and use of species 

10 in forestry and other relevant land management-related off11 set projects— 

12 ‘‘(1) to ensure that native species are given pri13 mary consideration in such projects; 

14 ‘‘(2) to enhance biological diversity in such 

15 projects; 

16 ‘‘(3) to prohibit the use of federally designated or 

17 State-designated noxious weeds; 

18 ‘‘(4) to prohibit the use of a species listed by a 

19 regional or State invasive plant authority within the 

20 applicable region or State; and 

21 ‘‘(5) in accordance with widely accepted, envi22 ronmentally sustainable forestry practices. 

23 ‘‘SEC. 742. TRADING. 

24 ‘‘Section 724 shall apply to the trading of offset cred25 its. 

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1 ‘‘SEC. 743. INTERNATIONAL OFFSET CREDITS. 

2 ‘‘(a) IN GENERAL.—The Administrator, in consulta3 tion with the Secretary of State and the Administrator of 

4 the United States Agency for International Development, 

5 may issue, in accordance with this section, international 

6 offset credits based on activities that reduce or avoid green7 house gas emissions, or increase sequestration of greenhouse 

8 gases, in a developing country. Such credits may be issued 

9 for projects pursuant to the requirements of this part or 

10 as provided in subsection (c), (d), or (e). 

11 ‘‘(b) ISSUANCE.— 

12 ‘‘(1) REGULATIONS.—Not later than 2 years 

13 after the date of enactment of this title, the Adminis14 trator, in consultation with the Secretary of State, the 

15 Administrator of the United States Agency for Inter16 national Development, and any other appropriate 

17 Federal agency, and taking into consideration the rec18 ommendations of the Advisory Board, shall promul19 gate regulations for implementing this section. Except 

20 as otherwise provided in this section, the issuance of 

21 international offset credits under this section shall be 

22 subject to the requirements of this part. 

23 ‘‘(2) REQUIREMENTS FOR INTERNATIONAL OFF24 SET CREDITS.—The Administrator may issue inter25 national offset credits only if— 

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1 ‘‘(A) the United States is a party to a bilat2 eral or multilateral agreement or arrangement 

3 that includes the country in which the project or 

4 measure achieving the relevant greenhouse gas 

5 emission reduction or avoidance, or greenhouse 

6 gas sequestration, has occurred; 

7 ‘‘(B) such country is a developing country; 

8 and 

9 ‘‘(C) such agreement or arrangement— 

10 ‘‘(i) ensures that all of the require11 ments of this part apply to the issuance of 

12 international offset credits under this sec13 tion; and 

14 ‘‘(ii) provides for the appropriate dis15 tribution of international offset credits 

16 issued. 

17 ‘‘(c) SECTOR-BASED CREDITS.— 

18 ‘‘(1) IN GENERAL.—In order to minimize the po19 tential for leakage and to encourage countries to take 

20 nationally appropriate mitigation actions to reduce 

21 or avoid greenhouse gas emissions, or sequester green22 house gases, the Administrator, in consultation with 

23 the Secretary of State and the Administrator of the 

24 United States Agency for International Development, 

25 shall— 

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1 ‘‘(A) identify sectors of specific countries 

2 with respect to which the issuance of inter3 national offset credits on a sectoral basis is ap4 propriate; and 

5 ‘‘(B) issue international offset credits for 

6 such sectors only on a sectoral basis. 

7 ‘‘(2) IDENTIFICATION OF SECTORS.— 

8 ‘‘(A) GENERAL RULE.—For purposes of 

9 paragraph (1)(A), a sectoral basis shall be ap10 propriate for activities— 

11 ‘‘(i) in countries that have compara12 tively high greenhouse gas emissions, or 

13 comparatively greater levels of economic de14 velopment; and 

15 ‘‘(ii) that, if located in the United 

16 States, would be within a sector subject to 

17 the compliance obligation under section 722. 

18 ‘‘(B) FACTORS.—In determining the sectors 

19 and countries for which international offset cred20 its should be awarded only on a sectoral basis, 

21 the Administrator, in consultation with the Sec22 retary of State and the Administrator of the 

23 United States Agency for International Develop24 ment, shall consider the following factors: 

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1 ‘‘(i) The country’s gross domestic prod2 uct. 

3 ‘‘(ii) The country’s total greenhouse gas 

4 emissions. 

5 ‘‘(iii) Whether the comparable sector of 

6 the United States economy is covered by the 

7 compliance obligation under section 722. 

8 ‘‘(iv) The heterogeneity or homogeneity 

9 of sources within the relevant sector. 

10 ‘‘(v) Whether the relevant sector pro11 vides products or services that are sold in 

12 internationally competitive markets. 

13 ‘‘(vi) The risk of leakage if inter14 national offset credits were issued on a 

15 project-level basis, instead of on a sectoral 

16 basis, for activities within the relevant sec17 tor. 

18 ‘‘(vii) The capability of accurately 

19 measuring, monitoring, reporting, and 

20 verifying the performance of sources across 

21 the relevant sector. 

22 ‘‘(viii) Such other factors as the Ad23 ministrator, in consultation with the Sec24 retary of State and the Administrator of the 

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1 United States Agency for International De2 velopment, determines are appropriate to— 

3 ‘‘(I) ensure the integrity of the 

4 United States greenhouse gas emissions 

5 cap established under section 703; and 

6 ‘‘(II) encourage countries to take 

7 nationally appropriate mitigation ac8 tions to reduce or avoid greenhouse gas 

9 emissions, or sequester greenhouse 

10 gases. 

11 ‘‘(3) SECTORAL BASIS.— 

12 ‘‘(A) DEFINITION.—In this subsection, the 

13 term ‘sectoral basis’ means the issuance of inter14 national offset credits only for the quantity of 

15 sector-wide reductions or avoidance of greenhouse 

16 gas emissions, or sector-wide increases in seques17 tration of greenhouse gases, achieved across the 

18 relevant sector of the economy relative to a base19 line level of performance established in an agree20 ment or arrangement described in subsection 

21 (b)(2)(A) for the sector. 

22 ‘‘(B) BASELINE.—The baseline for a sector 

23 shall be established at levels of greenhouse gas 

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1 evant domestic or international policies or incen2 tives to reduce greenhouse gas emissions, among 

3 other factors, and additionality and performance 

4 shall be determined on the basis of such baseline. 

5 ‘‘(d) CREDITS ISSUED BY AN INTERNATIONAL BODY.— 

6 ‘‘(1) IN GENERAL.—The Administrator, in con7 sultation with the Secretary of State, may issue inter8 national offset credits in exchange for instruments in 

9 the nature of offset credits that are issued by an inter10 national body established pursuant to the United Na11 tions Framework Convention on Climate Change, to 

12 a protocol to such Convention, or to a treaty that suc13 ceeds such Convention. The Administrator may issue 

14 international offset credits under this subsection only 

15 if, in addition to the requirements of subsection (b), 

16 the Administrator has determined that the inter17 national body that issued the instruments has imple18 mented substantive and procedural requirements for 

19 the relevant project type that provide equal or greater 

20 assurance of the integrity of such instruments as is 

21 provided by the requirements of this part. 

22 ‘‘(2) RETIREMENT.—The Administrator, in con23 sultation with the Secretary of State, shall seek, by 

24 whatever means appropriate, including agreements, 

25 arrangements, or technical cooperation with the intermstockstill on PROD1PC66 with BILLS

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1 national issuing body described in paragraph (1), to 

2 ensure that such body— 

3 ‘‘(A) is notified of the Administrator’s 

4 issuance, under this subsection, of an inter5 national offset credit in exchange for an instru6 ment issued by such international body; and 

7 ‘‘(B) provides, to the extent feasible, for the 

8 disqualification of the instrument issued by such 

9 international body for subsequent use under any 

10 relevant foreign or international greenhouse gas 

11 regulatory program, regardless of whether such 

12 use is a sale, exchange, or submission to satisfy 

13 a compliance obligation. 

14 ‘‘(e) OFFSETS FROM REDUCED DEFORESTATION.— 

15 ‘‘(1) REQUIREMENTS.—The Administrator, in 

16 accordance with the regulations promulgated under 

17 subsection (b)(1) and an agreement or arrangement 

18 described in subsection (b)(2)(A), shall issue inter19 national offset credits for greenhouse gas emission re20 ductions achieved through activities to reduce deforest21 ation only if, in addition to the requirements of sub22 section (b)— 

23 ‘‘(A) the activity occurs in— 

24 ‘‘(i) a country listed by the Adminis25 trator pursuant to paragraph (2); 

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1 ‘‘(ii) a state or province listed by the 

2 Administrator pursuant to paragraph (5); 

3 or 

4 ‘‘(iii) a country listed by the Adminis5 trator pursuant to paragraph (6); 

6 ‘‘(B) except as provided in paragraph (5) or 

7 (6), the quantity of the international offset cred8 its is determined by comparing the national 

9 emissions from deforestation relative to a na10 tional deforestation baseline for that country es11 tablished, in accordance with an agreement or 

12 arrangement described in subsection (b)(2)(A), 

13 pursuant to paragraph (4); 

14 ‘‘(C) the reduction in emissions from defor15 estation has occurred before the issuance of the 

16 international offset credit and, taking into con17 sideration relevant international standards, has 

18 been demonstrated using ground-based inven19 tories, remote sensing technology, and other 

20 methodologies to ensure that all relevant carbon 

21 stocks are accounted; 

22 ‘‘(D) the Administrator has made appro23 priate adjustments, such as discounting for any 

24 additional uncertainty, to account for cir25 cumstances specific to the country, including its 

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1 technical capacity described in paragraph 

2 (2)(A); 

3 ‘‘(E) the activity is designed, carried out, 

4 and managed— 

5 ‘‘(i) in accordance with widely accept6 ed, environmentally sustainable forest man7 agement practices; 

8 ‘‘(ii) to promote or restore native forest 

9 species and ecosystems where practicable, 

10 and to avoid the introduction of invasive 

11 nonnative species; 

12 ‘‘(iii) in a manner that gives due re13 gard to the rights and interests of local com14 munities, indigenous peoples, forest-depend15 ent communities, and vulnerable social 

16 groups; 

17 ‘‘(iv) with consultations with, and full 

18 participation of, local communities, indige19 nous peoples, and forest-dependent commu20 nities, in affected areas, as partners and 

21 primary stakeholders, prior to and during 

22 the design, planning, implementation, and 

23 monitoring and evaluation of activities; and 

24 ‘‘(v) with equitable sharing of profits 

25 and benefits derived from offset credits with 

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1 local communities, indigenous peoples, and 

2 forest-dependent communities; and 

3 ‘‘(F) the reduction otherwise satisfies and is 

4 consistent with any relevant requirements estab5 lished by an agreement reached under the aus6 pices of the United Nations Framework Conven7 tion on Climate Change. 

8 ‘‘(2) ELIGIBLE COUNTRIES.—The Administrator, 

9 in consultation with the Secretary of State and the 

10 Administrator of the United States Agency for Inter11 national Development, and in accordance with an 

12 agreement or arrangement described in subsection 

13 (b)(2)(A), shall establish, and periodically review and 

14 update, a list of the developing countries that have the 

15 capacity to participate in deforestation reduction ac16 tivities at a national level, including— 

17 ‘‘(A) the technical capacity to monitor, 

18 measure, report, and verify forest carbon fluxes 

19 for all significant sources of greenhouse gas emis20 sions from deforestation with an acceptable level 

21 of uncertainty, as determined taking into ac22 count relevant internationally accepted meth23 odologies, such as those established by the Inter24 governmental Panel on Climate Change; 

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1 ‘‘(B) the institutional capacity to reduce 

2 emissions from deforestation, including strong 

3 forest governance and mechanisms to equitably 

4 distribute deforestation resources for local ac5 tions; and 

6 ‘‘(C) a land use or forest sector strategic 

7 plan that— 

8 ‘‘(i) assesses national and local drivers 

9 of deforestation and forest degradation and 

10 identifies reforms to national policies need11 ed to address them; 

12 ‘‘(ii) estimates the country’s emissions 

13 from deforestation and forest degradation; 

14 ‘‘(iii) identifies improvements in data 

15 collection, monitoring, and institutional ca16 pacity necessary to implement a national 

17 deforestation reduction program; and 

18 ‘‘(iv) establishes a timeline for imple19 menting the program and transitioning to 

20 low-emissions development. 

21 ‘‘(3) PROTECTION OF INTERESTS.—With respect 

22 to an agreement or arrangement described in sub23 section (b)(2)(A) with a country that addresses inter24 national offset credits under this subsection, the Ad25 ministrator, in consultation with the Secretary of 

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1 State and the Administrator of the United States 

2 Agency for International Development, shall seek to 

3 ensure the establishment and enforcement by such 

4 country of legal regimes, processes, standards, and 

5 safeguards that— 

6 ‘‘(A) give due regard to the rights and in7 terests of local communities, indigenous peoples, 

8 forest-dependent communities, and vulnerable so9 cial groups; 

10 ‘‘(B) promote consultations with, and full 

11 participation of, forest-dependent communities 

12 and indigenous peoples in affected areas, as 

13 partners and primary stakeholders, prior to and 

14 during the design, planning, implementation, 

15 and monitoring and evaluation of activities; and 

16 ‘‘(C) encourage equitable sharing of profits 

17 and benefits derived from international offset 

18 credits with local communities, indigenous peo19 ples, and forest-dependent communities. 

20 ‘‘(4) NATIONAL DEFORESTATION BASELINE.—A 

21 national deforestation baseline established under this 

22 subsection shall— 

23 ‘‘(A) be national in scope; 

24 ‘‘(B) be consistent with nationally appro25 priate mitigation commitments or actions with 

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1 respect to deforestation, taking into consideration 

2 the average annual historical deforestation rates 

3 of the country during a period of at least 5 

4 years, the applicable drivers of deforestation, and 

5 other factors to ensure additionality; 

6 ‘‘(C) establish a trajectory that would result 

7 in zero net deforestation by not later than 20 

8 years after the national deforestation baseline 

9 has been established; 

10 ‘‘(D) be adjusted over time to take account 

11 of changing national circumstances; 

12 ‘‘(E) be designed to account for all signifi13 cant sources of greenhouse gas emissions from de14 forestation in the country; and 

15 ‘‘(F) be consistent with the national defor16 estation baseline, if any, established for such 

17 country under section 754(d)(1). 

18 ‘‘(5) STATE-LEVEL OR PROVINCE-LEVEL ACTIVI19 TIES.— 

20 ‘‘(A) ELIGIBLE STATES OR PROVINCES.— 

21 The Administrator, in consultation with the Sec22 retary of State and the Administrator of the 

23 United States Agency for International Develop24 ment, shall establish, and periodically review 

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1 and update, a list of states or provinces in devel2 oping countries where— 

3 ‘‘(i) the developing country is not in4 cluded on the list of countries established 

5 pursuant to paragraph (6)(A); 

6 ‘‘(ii) the state or province by itself is 

7 a major emitter of greenhouse gases from 

8 tropical deforestation on a scale commensu9 rate to the emissions of other countries; and 

10 ‘‘(iii) the state or province meets the 

11 eligibility criteria in paragraphs (2) and 

12 (3) for the geographic area under its juris13 diction. 

14 ‘‘(B) ACTIVITIES.—The Administrator may 

15 issue international offset credits for greenhouse 

16 gas emission reductions achieved through activi17 ties to reduce deforestation at a state or provin18 cial level that meet the requirements of this sec19 tion. Such credits shall be determined by com20 paring the emissions from deforestation within 

21 that state or province relative to the state or 

22 province deforestation baseline for that state or 

23 province established, in accordance with an 

24 agreement or arrangement described in submstockstill on PROD1PC66 with BILLS

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1 section (b)(2)(A), pursuant to subparagraph (C) 

2 of this paragraph. 

3 ‘‘(C) STATE-LEVEL OR PROVINCE-LEVEL DE4 FORESTATION BASELINE.—A state-level or prov5 ince-level deforestation baseline shall— 

6 ‘‘(i) be consistent with any existing na7 tionally appropriate mitigation commit8 ments or actions for the country in which 

9 the activity is occurring, taking into consid10 eration the average annual historical defor11 estation rates of the state or province dur12 ing a period of at least 5 years, relevant 

13 drivers of deforestation, and other factors to 

14 ensure additionality; 

15 ‘‘(ii) establish a trajectory that would 

16 result in zero net deforestation by not later 

17 than 20 years after the state-level or prov18 ince-level deforestation baseline has been es19 tablished; and 

20 ‘‘(iii) be designed to account for all sig21 nificant sources of greenhouse gas emissions 

22 from deforestation in the state or province 

23 and adjusted to fully account for emissions 

24 leakage outside the state or province. 

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1 ‘‘(D) PHASE OUT.—Beginning 5 years after 

2 the first calendar year for which a covered entity 

3 must demonstrate compliance with section 

4 722(a), the Administrator shall issue no further 

5 international offset credits for eligible state-level 

6 or province-level activities to reduce deforestation 

7 pursuant to this paragraph. 

8 ‘‘(6) PROJECTS AND PROGRAMS TO REDUCE DE9 FORESTATION.— 

10 ‘‘(A) ELIGIBLE COUNTRIES.—The Adminis11 trator, in consultation with the Secretary of 

12 State and the Administrator of the United States 

13 Agency for International Development, shall es14 tablish, and periodically review and update, a 

15 list of developing countries that— 

16 ‘‘(i) the Administrator determines, 

17 based on recent, credible, and reliable emis18 sions data, account for less than 1 percent 

19 of global greenhouse gas emissions and less 

20 than 3 percent of global forest-sector and 

21 land use change greenhouse gas emissions; 

22 and 

23 ‘‘(ii) have, or in the determination of 

24 the Administrator are making a good faith 

25 effort to develop, a land use or forest sector 

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1 strategic plan that meets the criteria de2 scribed in paragraph (2)(C). 

3 ‘‘(B) ACTIVITIES.—The Administrator may 

4 issue international offset credits for greenhouse 

5 gas emission reductions achieved through project 

6 or program level activities to reduce deforestation 

7 in countries listed under subparagraph (A) that 

8 meet the requirements of this section. The quan9 tity of international offset credits shall be deter10 mined by comparing the project-level or pro11 gram-level emissions from deforestation to a de12 forestation baseline for such project or program 

13 established pursuant to subparagraph (C). 

14 ‘‘(C) PROJECT-LEVEL OR PROGRAM-LEVEL

15 BASELINE.—A project-level or program-level de16 forestation baseline shall— 

17 ‘‘(i) be consistent with any existing na18 tionally appropriate mitigation commit19 ments or actions for the country in which 

20 the project or program is occurring, taking 

21 into consideration the average annual his22 torical deforestation rates in the project or 

23 program boundary during a period of at 

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1 ation, and other factors to ensure 

2 additionality; 

3 ‘‘(ii) be designed to account for all sig4 nificant sources of greenhouse gas emissions 

5 from deforestation in the project or program 

6 boundary; and 

7 ‘‘(iii) be adjusted to fully account for 

8 emissions leakage outside the project or pro9 gram boundary. 

10 ‘‘(D) PHASE OUT.—(i) Beginning 5 years 

11 after the first calendar year for which a covered 

12 entity must demonstrate compliance with section 

13 722(a), the Administrator shall issue no further 

14 international offset credits for project-level or 

15 program-level activities as described in this 

16 paragraph, except as provided in clause (ii). 

17 ‘‘(ii) The Administrator may extend the 

18 phase out deadline for the issuance of inter19 national offset credits under this section by up to 

20 8 years with respect to eligible activities taking 

21 place in a least developed nation, which is a for22 eign country that the United Nations has identi23 fied as among the least developed of developing 

24 countries at the time that the Administrator de25 termines to provide an extension, provided that 

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1 the Administrator, in consultation with the Sec2 retary of State and the Administrator of the 

3 United States Agency for International Develop4 ment, determines the nation— 

5 ‘‘(I) lacks sufficient capacity to adopt 

6 and implement effective programs to achieve 

7 reductions in deforestation measured 

8 against national baselines; 

9 ‘‘(II) is receiving support under part E 

10 to develop such capacity; and 

11 ‘‘(III) has developed and is working to 

12 implement a credible national strategy or 

13 plan to reduce deforestation. 

14 ‘‘(7) DEFORESTATION.—In implementing this 

15 subsection, the Administrator, taking into consider16 ation the recommendations of the Advisory Board, 

17 may include forest degradation, or soil carbon losses 

18 associated with forested wetlands or peatlands, within 

19 the meaning of deforestation. 

20 ‘‘(f) MODIFICATION OF REQUIREMENTS.—In promul21 gating regulations under subsection (b)(1) with respect to 

22 the issuance of international offset credits under subsection 

23 (c), (d), or (e), the Administrator, in consultation with the 

24 Secretary of State and the Administrator of the United 

25 States Agency for International Development, may modify 

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1 or omit a requirement of this part (excluding the require2 ments of this section) if the Administrator determines that 

3 the application of that requirement to such subsection is 

4 not feasible. In modifying or omitting such a requirement 

5 on the basis of infeasibility, the Administrator, in consulta6 tion with the Secretary of State and the Administrator of 

7 the United States Agency for International Development, 

8 shall ensure, with an adequate margin of safety, the integ9 rity of international offset credits issued under this section 

10 and of the greenhouse gas emissions cap established pursu11 ant 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 agreements, 

15 arrangements, or technical cooperation, to ensure that ac16 tivities on the basis of which international offset credits are 

17 issued under this section are not used for compliance with 

18 an obligation to reduce or avoid greenhouse gas emissions, 

19 or increase greenhouse gas sequestration, under a foreign 

20 or international regulatory system. In addition, no inter21 national offset credits shall be issued for emission reductions 

22 from activities with respect to which emission allowances 

23 were allocated under section 781 for distribution under part 

24 E. 

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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 preserving 

11 existing forest carbon stocks, including forested wet12 lands and peatlands, that might, absent such activi13 ties, be lost through leakage. 

14 ‘‘(2) NATIONAL DEFORESTATION REDUCTION AC15 TIVITIES.—The term ‘national deforestation reduction 

16 activities’ means activities in developing countries 

17 that reduce a quantity of greenhouse gas emissions 

18 from deforestation that is calculated by measuring ac19 tual emissions against a national deforestation base20 line established pursuant to section 754(d)(1) and (2). 

21 ‘‘(3) SUBNATIONAL DEFORESTATION REDUCTION

22 ACTIVITIES.—The term ‘subnational deforestation re23 duction activities’ means activities in developing 

24 countries that reduce a quantity of greenhouse gas 

25 emissions from deforestation that are calculated by 

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1 measuring actual emissions using an appropriate 

2 baseline established by the Administrator that is less 

3 than national in scope. 

4 ‘‘(4) SUPPLEMENTAL EMISSIONS REDUCTIONS.— 

5 The term ‘supplemental emissions reductions’ means 

6 greenhouse gas emissions reductions achieved from re7 duced or avoided deforestation under this part. 

8 ‘‘(5) USAID.—The term ‘USAID’ means the 

9 United States Agency for International Development. 

10 ‘‘SEC. 752. FINDINGS. 

11 ‘‘Congress finds that— 

12 ‘‘(1) as part of a global effort to mitigate climate 

13 change, it is in the national interest of the United 

14 States to assist developing countries to reduce and ul15 timately halt emissions from deforestation; 

16 ‘‘(2) deforestation is one of the largest sources of 

17 greenhouse gas emissions in developing countries, 

18 amounting to roughly 20 percent of overall emissions 

19 globally; 

20 ‘‘(3) recent scientific analysis shows that it will 

21 be substantially more difficult to limit the increase in 

22 global temperatures to less than 2 degrees centigrade 

23 above preindustrial levels without reducing and ulti24 mately halting net emissions from deforestation; 

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1 ‘‘(4) reducing emissions from deforestation is 

2 highly cost-effective, compared to many other sources 

3 of emissions reductions; 

4 ‘‘(5) in addition to contributing significantly to 

5 worldwide efforts to address global warming, this as6 sistance will generate significant environmental and 

7 social cobenefits, including protection of biodiversity, 

8 ecosystem services, and forest-related livelihoods; and 

9 ‘‘(6) Under the Bali Action Plan, developed 

10 country parties to the United Nations Framework 

11 Convention on Climate Change, including the United 

12 States, committed to ‘enhanced action on the provi13 sion of financial resources and investment to support 

14 action on mitigation and adaptation and technology 

15 cooperation,’ including, inter alia, consideration of 

16 ‘improved access to adequate, predictable, and sus17 tainable financial resources and financial and tech18 nical support, and the provision of new and addi19 tional resources, including official and concessional 

20 funding for developing country parties’ . 

21 ‘‘SEC. 753. SUPPLEMENTAL EMISSIONS REDUCTIONS 

22 THROUGH REDUCED DEFORESTATION. 

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

24 date of enactment of this title, the Administrator, in con25 sultation with the Administrator of USAID and any other 

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1 appropriate agencies, shall promulgate regulations estab2 lishing a program to use emission allowances set aside for 

3 this purpose under section 781 to achieve the reduction of 

4 greenhouse gas emissions from deforestation in developing 

5 countries in accordance with the requirements of this part. 

6 ‘‘(b) OBJECTIVES.—The objectives of the program es7 tablished under this section shall be to— 

8 ‘‘(1) achieve supplemental emissions reductions 

9 of at least 720,000,000 tons of carbon dioxide equiva10 lent in 2020, a cumulative amount of at least 

11 6,000,000,000 tons of carbon dioxide equivalent by 

12 December 31, 2025, and additional supplemental 

13 emissions reductions in subsequent years; 

14 ‘‘(2) build capacity to reduce deforestation in de15 veloping countries experiencing deforestation, includ16 ing preparing developing countries to participate in 

17 international markets for international offset credits 

18 for reduced emissions from deforestation; and 

19 ‘‘(3) preserve existing forest carbon stocks in 

20 countries where such forest carbon may be vulnerable 

21 to international leakage, particularly in developing 

22 countries with largely intact native forests. 

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1 ‘‘SEC. 754. REQUIREMENTS FOR INTERNATIONAL DEFOR2 ESTATION REDUCTION PROGRAM. 

3 ‘‘(a) ELIGIBLE COUNTRIES.—The Administrator may 

4 support activities under this part only with respect to a 

5 developing country that— 

6 ‘‘(1) the Administrator, in consultation with the 

7 Administrator of USAID, determines is experiencing 

8 deforestation or forest degradation or has standing 

9 forest carbon stocks that may be at risk of deforest10 ation or degradation; and 

11 ‘‘(2) has entered into a bilateral or multilateral 

12 agreement or arrangement with the United States es13 tablishing the conditions of its participation in the 

14 program established under this part, which shall in15 clude an agreement to meet the standards established 

16 under subsection (d) for the activities to which those 

17 standards apply. 

18 ‘‘(b) ACTIVITIES.—(1) Subject to the requirements of 

19 this part, the Administrator, in consultation with the Ad20 ministrator of USAID, may support activities to achieve 

21 the objectives identified in section 753(b), including— 

22 ‘‘(A) national deforestation reduction activi23 ties; 

24 ‘‘(B) subnational deforestation reduction ac25 tivities, including pilot activities that reduce 

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1 greenhouse gas emissions but are subject to sig2 nificant uncertainty; 

3 ‘‘(C) activities to measure, monitor, and 

4 verify deforestation, avoided deforestation, and 

5 deforestation rates; 

6 ‘‘(D) leakage prevention activities; 

7 ‘‘(E) development of measurement, moni8 toring, and verification capacities to enable a 

9 country to quantify supplemental emissions re10 ductions and to generate for sale offset credits 

11 from reduced or avoided deforestation; 

12 ‘‘(F) development of governance structures 

13 to reduce deforestation and illegal logging; 

14 ‘‘(G) enforcement of requirements for re15 duced deforestation or forest conservation; 

16 ‘‘(H) efforts to combat illegal logging and 

17 increase enforcement cooperation; 

18 ‘‘(I) providing incentives for policy reforms 

19 to achieve the objectives identified in section 

20 753(b); and 

21 ‘‘(J) monitoring and evaluation of the re22 sults of the activities conducted under this sec23 tion. 

24 ‘‘(2) ACTIVITIES SELECTED BY USAID.— 

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1 ‘‘(A) The Administrator of USAID, in con2 sultation with the Administrator, may select for 

3 support and implementation pursuant to sub4 section (c) any of the activities described in 

5 paragraph (1), consistent with this part and the 

6 regulations promulgated under subsection (d), 

7 and subject to the requirement to achieve the ob8 jectives listed in section 753(b)(1). 

9 ‘‘(B) With respect to the activities listed in 

10 subparagraphs (D) through (J) of paragraph (1), 

11 the Administrator of USAID, in consultation 

12 with the Administrator, shall have primary but 

13 not exclusive responsibility for selecting the ac14 tivities to be supported and implemented. 

15 ‘‘(3) INTERAGENCY COORDINATION.—The Admin16 istrator and the Administrator of USAID shall joint17 ly develop and biennially update a strategic plan for 

18 meeting the objectives listed in section 753(b) and 

19 shall execute a memorandum of understanding delin20 eating the agencies’ respective roles in implementing 

21 this part. 

22 ‘‘(c) MECHANISMS.— 

23 ‘‘(1) IN GENERAL.—The Administrator may sup24 port activities to achieve the objectives identified in 

25 section 753(b) by— 

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1 ‘‘(A) developing and implementing pro2 grams and projects that achieve such objectives; 

3 and 

4 ‘‘(B) distributing emission allowances to a 

5 country that is eligible under subsection (a), to 

6 any private or public group (including inter7 national organizations), or to an international 

8 fund established by an international agreement 

9 to which the United States is a party, to carry 

10 out activities to achieve such objectives. 

11 ‘‘(2) USAID ACTIVITIES.—With respect to activi12 ties selected and implemented by the Administrator of 

13 USAID pursuant to (b)(2), the Administrator shall 

14 distribute emission allowances as provided in sub15 paragraph (1) based upon the direction of the Admin16 istrator of USAID, subject to the availability of al17 lowances for such activities. 

18 ‘‘(3) IMPLEMENTATION THROUGH INTER19 NATIONAL ORGANIZATIONS.—If support is distributed 

20 through an international organization, the agency re21 sponsible for selecting activities in accordance with 

22 subparagraph (b)(1) or (2), in consultation with the 

23 Secretary of State, shall ensure the establishment and 

24 implementation of adequate mechanisms to apply and 

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1 enforce the eligibility requirements and other require2 ments of this section. 

3 ‘‘(4) ROLE OF THE SECRETARY OF STATE.—The 

4 Administrator may not distribute emission allow5 ances to the government of another country or to an 

6 international organization or international fund un7 less the Secretary of State has concurred with such 

8 distribution. 

9 ‘‘(d) STANDARDS.—The Administrator, in consulta10 tion with the Administrator of USAID, shall promulgate 

11 standards to ensure that supplemental emissions reductions 

12 achieved through supported activities are additional, meas13 urable, verifiable, permanent, monitored, and account for 

14 leakage and uncertainty. In addition, such standards 

15 shall— 

16 ‘‘(1) require the establishment of a national de17 forestation baseline for each country with national de18 forestation reduction activities that is used to account 

19 for reductions achieved from such activities; 

20 ‘‘(2) provide that a national deforestation base21 line established under paragraph (1) shall— 

22 ‘‘(A) be national in scope; 

23 ‘‘(B) be consistent with nationally appro24 priate mitigation commitments or actions with 

25 respect to deforestation, taking into consideration 

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1 the average annual historical deforestation rates 

2 of the country during a period of at least 5 years 

3 and other factors to ensure additionality; 

4 ‘‘(C) establish a trajectory that would result 

5 in zero net deforestation by not later than 20 

6 years from the date the baseline is established; 

7 ‘‘(D) be adjusted over time to take account 

8 of changing national circumstances; 

9 ‘‘(E) be designed to account for all signifi10 cant sources of greenhouse gas emissions from de11 forestation in the country; and 

12 ‘‘(F) be consistent with the national defor13 estation baseline, if any, established for such 

14 country under section 743(e)(4); 

15 ‘‘(3) with respect to support provided pursuant 

16 to subsection (b)(1)(A) or (B), require supplemental 

17 emissions reductions to be achieved and verified prior 

18 to compensation through the distribution of emission 

19 allowances under this part; 

20 ‘‘(4) with respect to accounting for subnational 

21 deforestation reduction activities that lack the stand22 ardized or precise measurement and monitoring tech23 niques needed for a full accounting of changes in 

24 emissions or baselines, or are subject to other sources 

25 of uncertainty, apply a conservative discount factor 

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1 to reflect the uncertainty regarding the levels of reduc2 tions achieved; 

3 ‘‘(5) ensure that activities under this part shall 

4 be designed, carried out, and managed— 

5 ‘‘(A) in accordance with widely accepted, 

6 environmentally sustainable forestry practices; 

7 ‘‘(B) to promote native species and con8 servation or restoration of native forests, if prac9 ticable, and to avoid the introduction of invasive 

10 nonnative species; 

11 ‘‘(C) in a manner that gives due regard to 

12 the rights and interests of local communities, in13 digenous peoples, forest-dependent communities, 

14 and vulnerable social groups; 

15 ‘‘(D) with consultations with, and full par16 ticipation of, local communities, indigenous peo17 ples, and forest-dependent communities in af18 fected areas, as partners and primary stake19 holders, prior to and during the design, plan20 ning, implementation, and monitoring and eval21 uation of activities; and 

22 ‘‘(E) with equitable sharing of profits and 

23 benefits derived from the activities with local 

24 communities, indigenous peoples, and forest-de25 pendent communities; and 

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1 ‘‘(6) with respect to support for all activities 

2 under this part, seek to ensure the establishment and 

3 enforcement by the recipient country of legal regimes, 

4 standards, processes, and safeguards that— 

5 ‘‘(A) give due regard to the rights and in6 terests of local communities, indigenous peoples, 

7 forest-dependent communities, and vulnerable so8 cial groups; 

9 ‘‘(B) promote consultations with local com10 munities and indigenous peoples and forest-de11 pendent communities in affected areas, as part12 ners and primary stakeholders, prior to and dur13 ing the design, planning, implementation, moni14 toring, and evaluation of activities under this 

15 part; and 

16 ‘‘(C) encourage equitable sharing of profits 

17 and benefits from incentives for emissions reduc18 tions or leakage prevention with local commu19 nities, indigenous peoples, and forest-dependent 

20 communities. 

21 ‘‘(e) EXPANSION OF SCOPE.—The Administrator, in 

22 consultation with the Administrator of USAID, may decide, 

23 taking into account any advice from the Advisory Board, 

24 to expand, where appropriate, the scope of activities under 

25 this part to include— 

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1 ‘‘(1) reduced emissions from forest degradation; 

2 or 

3 ‘‘(2) reduced soil carbon-derived emissions asso4 ciated with deforestation and degradation of forested 

5 wetlands and peatlands. 

6 ‘‘(f) ACCOUNTING.—The Administrator shall establish 

7 a publicly accessible registry of the supplemental emissions 

8 reductions achieved through support provided under this 

9 part each year, after appropriately discounting for uncer10 tainty and other relevant factors as required by the stand11 ards established under subsection (d). 

12 ‘‘(g) TRANSITION TO NATIONAL REDUCTIONS.—Begin13 ning 5 years after the date that a country entered into the 

14 agreement or arrangement required under subsection (a)(2), 

15 the Administrator shall provide no further compensation 

16 through emission allowances to that country under this part 

17 for any subnational deforestation reduction activities, ex18 cept that the Administrator may extend this period by an 

19 additional 5 years if the Administrator, in consultation 

20 with the Administrator of USAID, determines that— 

21 ‘‘(1) the country is making substantial progress 

22 towards adopting and implementing a program to 

23 achieve reductions in deforestation measured against 

24 a national baseline; 

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1 ‘‘(2) the greenhouse gas emissions reductions 

2 achieved are not resulting in significant leakage; and 

3 ‘‘(3) the greenhouse gas emissions reductions 

4 achieved are being appropriately discounted to ac5 count for any leakage that is occurring. 

6 The limitation under this subsection shall not apply to sup7 port for activities to further the objectives listed in section 

8 753(b)(2) or (3). 

9 ‘‘(h) COORDINATION WITH U.S. FOREIGN ASSIST10 ANCE.—Subject to the direction of the President, the Admin11 istrator and the Administrator of USAID shall, to the ex12 tent practicable and consistent with the objectives of this 

13 program, seek to align activities under this section with 

14 broader development, poverty alleviation, or natural re15 source management objectives and initiatives in the recipi16 ent country. 

17 ‘‘(i) SUPPORT AS SUPPLEMENT.—The provision of 

18 support for activities under this part shall be used to sup19 plement, and not to supplant, any other Federal, State, or 

20 local support available to carry out such qualifying activi21 ties under this part. 

22 ‘‘SEC. 755. REPORTS AND REVIEWS. 

23 ‘‘(a) REPORTS.—Not later than January 1, 2014, and 

24 annually thereafter, the Administrator and the Adminis25 trator of USAID shall submit to the Committee on Energy 

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1 and Commerce and the Committee on Foreign Affairs of 

2 the House of Representatives, and the Committee on Envi3 ronment and Public Works and the Committee on Foreign 

4 Relations of the Senate, and make available to the public, 

5 a report on the support provided under this part during 

6 the prior fiscal year. The report shall include— 

7 ‘‘(1) a statement of the quantity of supplemental 

8 emissions reductions for which compensation in the 

9 form of emission allowances was provided under this 

10 part during the prior fiscal year, as registered by the 

11 Administrator under section 754(f); and 

12 ‘‘(2) a description of the national and sub13 national deforestation reduction activities, capacity14 building activities, and leakage prevention activities 

15 supported under this part, including a statement of 

16 the quantity of emission allowances distributed to 

17 each recipient for each activity during the prior fiscal 

18 year, and a description of what was accomplished 

19 through each of the activities. 

20 ‘‘(b) REVIEWS.—Not later than 4 years after the date 

21 of enactment of this title and every 5 years thereafter, the 

22 Administrator and the Administrator of USAID and taking 

23 into consideration any evaluation by or recommendations 

24 from the Advisory Board established under section 731, 

25 shall conduct a review of the activities undertaken pursuant 

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1 to this part and make any appropriate changes in the pro2 gram established under this part based on the findings of 

3 the review. The review shall include the effects of the activi4 ties on— 

5 ‘‘(1) total documented carbon stocks of each 

6 country that directly or indirectly received support 

7 under this part compared with such country’s na8 tional deforestation baseline established under section 

9 754(d)(1); 

10 ‘‘(2) the number of countries with the capacity 

11 to generate for sale instruments in the nature of offset 

12 credits from forest-related activities, and the amount 

13 of such activities; 

14 ‘‘(3) forest governance in each country that di15 rectly or indirectly received support under this part; 

16 ‘‘(4) indigenous peoples and forest-dependent 

17 communities residing in areas affected by such activi18 ties; 

19 ‘‘(5) biodiversity and ecosystem services within 

20 forested areas associated with the activities; 

21 ‘‘(6) international leakage; and 

22 ‘‘(7) any program or mechanism established 

23 under the United Nations Framework Convention on 

24 Climate Change related to greenhouse gas emissions 

25 from deforestation. 

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1 ‘‘SEC. 756. LEGAL EFFECT OF PART. 

2 ‘‘(1) IN GENERAL.—Nothing in this part super3 sedes, limits, or otherwise affects any restriction im4 posed by Federal law (including regulations) on any 

5 interaction between an entity located in the United 

6 States and an entity located in a foreign country. 

7 ‘‘(2) ROLE OF THE SECRETARY OF STATE.— 

8 Nothing in this part shall be construed as affecting 

9 the role of the Secretary of State or the responsibil10 ities of the Secretary under section 622 (c) of the For11 eign Assistance Act of 1961.’’. 

12 SEC. 312. DEFINITIONS. 

13 Title VII of the Clean Air Act, as added by section 

14 311 of this Act, is amended by inserting before part A the 

15 following new section: 

16 ‘‘SEC. 700. DEFINITIONS. 

17 ‘‘In this title: 

18 ‘‘(1) ADDITIONAL.—The term ‘additional’, when 

19 used with respect to reductions or avoidance of green20 house gas emissions, or to sequestration of greenhouse 

21 gases, means reductions, avoidance, or sequestration 

22 that result in a lower level of net greenhouse gas emis23 sions or atmospheric concentrations than would occur 

24 in the absence of an offset project. 

25 ‘‘(2) ADDITIONALITY.—The term ‘additionality’ 

26 means the extent to which reductions or avoidance of 

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1 greenhouse gas emissions, or sequestration of green2 house gases, are additional. 

3 ‘‘(3) ADVISORY BOARD.—The term ‘Advisory 

4 Board’ means the Offsets Integrity Advisory Board es5 tablished under section 731. 

6 ‘‘(4) AFFILIATED.—The term ‘affiliated’— 

7 ‘‘(A) when used in relation to an entity 

8 means owned or controlled by, or under common 

9 ownership or control with, another entity, as de10 termined by the Administrator; and 

11 ‘‘(B) when used in relation to a natural gas 

12 local distribution company, means owned or con13 trolled by, or under common ownership or con14 trol with, another natural gas local distribution 

15 company, as determined by the Administrator. 

16 ‘‘(5) ALLOWANCE.—The term ‘allowance’ means 

17 a limited authorization to emit, or have attributable 

18 greenhouse gas emissions in an amount of, 1 ton of 

19 carbon dioxide equivalent of a greenhouse gas in ac20 cordance with this title; it includes an emission al21 lowance, a compensatory allowance, or an inter22 national emission allowance. 

23 ‘‘(6) ATTRIBUTABLE GREENHOUSE GAS EMIS24 SIONS.—The term ‘attributable greenhouse gas emis25 sions’ means— 

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1 ‘‘(A) for a covered entity that is a fuel pro2 ducer or importer described in paragraph 

3 (13)(B), greenhouse gases that would be emitted 

4 from the combustion of any petroleum-based or 

5 coal-based liquid fuel, petroleum coke, or natural 

6 gas liquid, produced or imported by that covered 

7 entity for sale or distribution in interstate com8 merce, assuming no capture and sequestration of 

9 any greenhouse gas emissions; 

10 ‘‘(B) for a covered entity that is an indus11 trial gas producer or importer described in para12 graph (13)(C), the tons of carbon dioxide equiva13 lent of fossil fuel-based carbon dioxide, nitrous 

14 oxide, any fluorinated gas, other than nitrogen 

15 trifluoride, that is a greenhouse gas, or any com16 bination thereof— 

17 ‘‘(i) produced or imported by such cov18 ered entity during the previous calendar 

19 year for sale or distribution in interstate 

20 commerce; or 

21 ‘‘(ii) released as fugitive emissions in 

22 the production of fluorinated gas; and 

23 ‘‘(C) for a natural gas local distribution 

24 company described in paragraph (13)(J), green25 house gases that would be emitted from the commstockstill on PROD1PC66 with BILLS

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1 bustion of the natural gas, and any other gas 

2 meeting the specifications for commingling with 

3 natural gas for purposes of delivery, that such 

4 entity delivered during the previous calendar 

5 year to customers that are not covered entities, 

6 assuming no capture and sequestration of that 

7 greenhouse gas. 

8 ‘‘(7) BIOLOGICAL SEQUESTRATION; BIO9 LOGICALLY SEQUESTERED.—The terms ‘biological se10 questration’ and ‘biologically sequestered’ mean the 

11 removal of greenhouse gases from the atmosphere by 

12 terrestrial biological means, such as by growing 

13 plants, and the storage of those greenhouse gases in 

14 plants or soils. 

15 ‘‘(8) CAPPED EMISSIONS.—The term ‘capped 

16 emissions’ means greenhouse gas emissions to which 

17 section 722 applies, including emissions from the 

18 combustion of natural gas, petroleum-based or coal19 based liquid fuel, petroleum coke, or natural gas liq20 uid to which section 722(b)(2) or (8) applies. 

21 ‘‘(9) CAPPED SOURCE.—The term ‘capped source’ 

22 means a source that directly emits capped emissions. 

23 ‘‘(10) CARBON DIOXIDE EQUIVALENT.—The term 

24 ‘carbon dioxide equivalent’ means the unit of measmstockstill on PROD1PC66 with BILLS

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1 ure, expressed in metric tons, of greenhouse gases as 

2 provided under section 711 or 712. 

3 ‘‘(11) CARBON STOCK.—The term ‘carbon stock’ 

4 means the quantity of carbon contained in a biologi5 cal reservoir or system which has the capacity to ac6 cumulate or release carbon. 

7 ‘‘(12) COMPENSATORY ALLOWANCE.—The term 

8 ‘compensatory allowance’ means an allowance issued 

9 under section 721(f). 

10 ‘‘(13) COVERED ENTITY.—The term ‘covered enti11 ty’ means each of the following: 

12 ‘‘(A) Any electricity source. 

13 ‘‘(B) Any stationary source that produces, 

14 and any entity that (or any group of two or 

15 more affiliated entities that, in the aggregate) 

16 imports, for sale or distribution in interstate 

17 commerce in 2008 or any subsequent year, petro18 leum-based or coal-based liquid fuel, petroleum 

19 coke, or natural gas liquid, the combustion of 

20 which would emit more than 25,000 tons of car21 bon dioxide equivalent, as determined by the Ad22 ministrator. 

23 ‘‘(C) Any stationary source that produces, 

24 and any entity that (or any group of two or 

25 more affiliated entities that, in the aggregate) 

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1 imports, for sale or distribution in interstate 

2 commerce, in bulk, or in products designated by 

3 the Administrator, in 2008 or any subsequent 

4 year more than 25,000 tons of carbon dioxide 

5 equivalent of— 

6 ‘‘(i) fossil fuel-based carbon dioxide; 

7 ‘‘(ii) nitrous oxide; 

8 ‘‘(iii) perfluorocarbons; 

9 ‘‘(iv) sulfur hexafluoride; 

10 ‘‘(v) any other fluorinated gas, except 

11 for nitrogen trifluoride, that is a greenhouse 

12 gas, as designated by the Administrator 

13 under section 711(b) or (c); or 

14 ‘‘(vi) any combination of greenhouse 

15 gases described in clauses (i) through (vi). 

16 ‘‘(D) Any stationary source that has emit17 ted 25,000 or more tons of carbon dioxide equiv18 alent of nitrogen trifluoride in 2008 or any sub19 sequent year. 

20 ‘‘(E) Any geologic sequestration site. 

21 ‘‘(F) Any stationary source in the following 

22 industrial sectors: 

23 ‘‘(i) Adipic acid production. 

24 ‘‘(ii) Primary aluminum production. 

25 ‘‘(iii) Ammonia manufacturing. 

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1 ‘‘(iv) Cement production, excluding 

2 grinding-only operations. 

3 ‘‘(v) Hydrochlorofluorocarbon produc4 tion. 

5 ‘‘(vi) Lime manufacturing. 

6 ‘‘(vii) Nitric acid production. 

7 ‘‘(viii) Petroleum refining. 

8 ‘‘(ix) Phosphoric acid production. 

9 ‘‘(x) Silicon carbide production. 

10 ‘‘(xi) Soda ash production. 

11 ‘‘(xii) Titanium dioxide production. 

12 ‘‘(xiii) Coal-based liquid or gaseous 

13 fuel production. 

14 ‘‘(G) Any stationary source in the chemical 

15 or petrochemical sector that, in 2008 or any sub16 sequent year— 

17 ‘‘(i) produces acrylonitrile, carbon 

18 black, ethylene, ethylene dichloride, ethylene 

19 oxide, or methanol; or 

20 ‘‘(ii) produces a chemical or petro21 chemical product if producing that product 

22 results in annual combustion plus process 

23 emissions of 25,000 or more tons of carbon 

24 dioxide equivalent. 

25 ‘‘(H) Any stationary source that— 

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1 ‘‘(i) is in one of the following indus2 trial sectors: ethanol production; ferroalloy 

3 production; fluorinated gas production; food 

4 processing; glass production; hydrogen pro5 duction; iron and steel production; lead pro6 duction; pulp and paper manufacturing; 

7 and zinc production; and 

8 ‘‘(ii) has emitted 25,000 or more tons 

9 of carbon dioxide equivalent in 2008 or any 

10 subsequent year. 

11 ‘‘(I) Any fossil fuel-fired combustion device 

12 (such as a boiler) or grouping of such devices 

13 that— 

14 ‘‘(i) is all or part of an industrial 

15 source not specified in subparagraph (D), 

16 (F), (G), or (H); and 

17 ‘‘(ii) has emitted 25,000 or more tons 

18 of carbon dioxide equivalent in 2008 or any 

19 subsequent year. 

20 ‘‘(J) Any natural gas local distribution 

21 company that (or any group of 2 or more affili22 ated natural gas local distribution companies 

23 that, in the aggregate) in 2008 or any subsequent 

24 year, delivers 460,000,000 cubic feet or more of 

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1 natural gas to customers that are not covered en2 tities. 

3 ‘‘(14) CREDITING PERIOD.—The term ‘crediting 

4 period’ means the period with respect to which an off5 set project is eligible to earn offset credits under part 

6 D, as determined under section 734(c). 

7 ‘‘(15) DESIGNATED REPRESENTATIVE.—The term 

8 ‘designated representative’ means, with respect to a 

9 covered entity, a reporting entity, an offset project de10 veloper, or any other entity receiving or holding al11 lowances or offset credits under this title, an indi12 vidual authorized, through a certificate of representa13 tion submitted to the Administrator by the owners 

14 and operators or similar entity official, to represent 

15 the owners and operators or similar entity official in 

16 all matters pertaining to this title (including the 

17 holding, transfer, or disposition of allowances or offset 

18 credits), and to make all submissions to the Adminis19 trator under this title. 

20 ‘‘(16) DEVELOPING COUNTRY.—The term ‘devel21 oping country’ means a country eligible to receive of22 ficial development assistance according to the income 

23 guidelines of the Development Assistance Committee 

24 of the Organization for Economic Cooperation and 

25 Development. 

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1 ‘‘(17) DOMESTIC OFFSET CREDIT.—The term 

2 ‘domestic offset credit’ means an offset credit issued 

3 under part D, other than an international offset cred4 it. 

5 ‘‘(18) ELECTRICITY SOURCE.—The term ‘elec6 tricity source’ means a stationary source that in7 cludes one or more utility units. 

8 ‘‘(19) EMISSION.—The term ‘emission’ means the 

9 release of a greenhouse gas into the ambient air. Such 

10 term does not include gases that are captured and se11 questered, except to the extent that they are later re12 leased into the atmosphere, in which case compliance 

13 must be demonstrated pursuant to section 722(b)(5). 

14 ‘‘(20) EMISSION ALLOWANCE.—The term ‘emis15 sion allowance’ means an allowance established under 

16 section 721(a) or section 726(g)(2) or (h)(1)(C). 

17 ‘‘(21) FAIR MARKET VALUE.—The term ‘fair 

18 market value’ means the average daily closing price 

19 on registered exchanges or, if such a price is unavail20 able, the average price as determined by the Adminis21 trator, during a specified time period, of an emission 

22 allowance. 

23 ‘‘(22) FEDERAL LAND.—The term ‘Federal land’ 

24 means land that is owned by the United States, other 

25 than land held in trust for an Indian or Indian tribe. 

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1 ‘‘(23) FOSSIL FUEL.—The term ‘fossil fuel’ 

2 means natural gas, petroleum, or coal, or any form 

3 of solid, liquid, or gaseous fuel derived from such ma4 terial, including consumer products that are derived 

5 from such materials and are combusted. 

6 ‘‘(24) FOSSIL FUEL-FIRED.—The term ‘fossil 

7 fuel-fired’ means powered by combustion of fossil fuel, 

8 alone or in combination with any other fuel, regard9 less of the percentage of fossil fuel consumed. 

10 ‘‘(25) FUGITIVE EMISSIONS.—The term ‘fugitive 

11 emissions’ means emissions from leaks, valves, joints, 

12 or other small openings in pipes, ducts, or other 

13 equipment, or from vents. 

14 ‘‘(26) GEOLOGIC SEQUESTRATION; GEOLOGI15 CALLY SEQUESTERED.—The terms ‘geologic sequestra16 tion’ and ‘geologically sequestered’ mean the seques17 tration of greenhouse gases in subsurface geologic for18 mations for purposes of permanent storage. 

19 ‘‘(27) GEOLOGIC SEQUESTRATION SITE.—The 

20 term ‘geologic sequestration site’ means a site where 

21 carbon dioxide is geologically sequestered. 

22 ‘‘(28) GREENHOUSE GAS.—The term ‘greenhouse 

23 gas’ means any gas described in section 711(a) or des24 ignated under section 711(b), (c), or (e), except to the 

25 extent that it is regulated under title VI. 

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1 ‘‘(29) HIGH CONSERVATION PRIORITY LAND.— 

2 The term ‘high conservation priority land’ means 

3 land that is not Federal land and is— 

4 ‘‘(A) globally or State ranked as critically 

5 imperiled or imperiled under a State Natural 

6 Heritage Program; or 

7 ‘‘(B) old-growth or late-successional forest, 

8 as identified by the office of the State Forester or 

9 relevant State agency with regulatory jurisdic10 tion over forestry activities. 

11 ‘‘(30) HOLD.—The term ‘hold’ means, with re12 spect to an allowance or offset credit, to have in the 

13 appropriate account in the allowance tracking sys14 tem, or submit to the Administrator for recording in 

15 such account. 

16 ‘‘(31) INDUSTRIAL SOURCE.—The term ‘indus17 trial source’ means any stationary source that— 

18 ‘‘(A) is not an electricity source; and 

19 ‘‘(B) is in— 

20 ‘‘(i) the manufacturing sector (as de21 fined in North American Industrial Classi22 fication System codes 31, 32, and 33); or 

23 ‘‘(ii) the natural gas processing or nat24 ural gas pipeline transportation sector (as 

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1 defined in North American Industrial Clas2 sification System codes 211112 or 486210). 

3 ‘‘(32) INTERNATIONAL EMISSION ALLOWANCE.— 

4 The term ‘international emission allowance’ means a 

5 tradable authorization to emit 1 ton of carbon dioxide 

6 equivalent of greenhouse gas that is issued by a na7 tional or supranational foreign government pursuant 

8 to a qualifying international program designated by 

9 the Administrator pursuant to section 728(a). 

10 ‘‘(33) INTERNATIONAL OFFSET CREDIT.—The 

11 term ‘international offset credit’ means an offset cred12 it issued by the Administrator under section 743. 

13 ‘‘(34) LEAKAGE.—The term ‘leakage’ means a 

14 significant increase in greenhouse gas emissions, or 

15 significant decrease in sequestration, which is caused 

16 by an offset project and occurs outside the boundaries 

17 of the offset project. 

18 ‘‘(35) MINERAL SEQUESTRATION.—The term 

19 ‘mineral sequestration’ means sequestration of carbon 

20 dioxide from the atmosphere by capturing carbon di21 oxide into a permanent mineral, such as the aqueous 

22 precipitation of carbonate minerals that results in the 

23 storage of carbon dioxide in a mineral form. 

24 ‘‘(36) NATURAL GAS LIQUID.—The term ‘natural 

25 gas liquid’ means ethane, butane, isobutane, natural 

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1 gasoline, and propane which is ready for commercial 

2 sale or use. 

3 ‘‘(37) NATURAL GAS LOCAL DISTRIBUTION COM4 PANY.—The term ‘natural gas local distribution com5 pany’ has the meaning given the term ‘local distribu6 tion company’ in section 2(17) of the Natural Gas 

7 Policy Act of 1978 (15 U.S.C. 3301(17)). 

8 ‘‘(38) OFFSET CREDIT.—The term ‘offset credit’ 

9 means a credit issued under part D. 

10 ‘‘(39) OFFSET PROJECT.—The term ‘offset 

11 project’ means a project or activity that reduces or 

12 avoids greenhouse gas emissions, or sequesters green13 house gases, and for which offset credits are issued 

14 under part D. 

15 ‘‘(40) OFFSET PROJECT DEVELOPER.—The term 

16 ‘offset project developer’ means the individual or enti17 ty designated as the offset project developer in an off18 set project approval petition under section 735(c)(1). 

19 ‘‘(41) PETROLEUM.—The term ‘petroleum’ in20 cludes crude oil, tar sands, oil shale, and heavy oils. 

21 ‘‘(42) RENEWABLE BIOMASS.—The term ‘renew22 able biomass’ means any of the following: 

23 ‘‘(A) Plant material, including waste mate24 rial, harvested or collected from actively man25 aged agricultural land that was in cultivation, 

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1 cleared, or fallow and nonforested on January 1, 

2 2009. 

3 ‘‘(B) Plant material, including waste mate4 rial, harvested or collected from pastureland that 

5 was nonforested on January 1, 2009. 

6 ‘‘(C) Nonhazardous vegetative matter de7 rived from waste, including separated yard 

8 waste, landscape right-of-way trimmings, con9 struction and demolition debris or food waste 

10 (but not municipal solid waste, recyclable waste 

11 paper, painted, treated or pressurized wood, or 

12 wood contaminated with plastic or metals). 

13 ‘‘(D) Animal waste or animal byproducts, 

14 including products of animal waste digesters. 

15 ‘‘(E) Algae. 

16 ‘‘(F) Trees, brush, slash, residues, or any 

17 other vegetative matter removed from within 600 

18 feet of any building, campground, or route des19 ignated for evacuation by a public official with 

20 responsibility for emergency preparedness, or 

21 from within 300 feet of a paved road, electric 

22 transmission line, utility tower, or water supply 

23 line. 

24 ‘‘(G) Residues from or byproducts of milled 

25 logs. 

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1 ‘‘(H) Any of the following removed from for2 ested land that is not Federal and is not high 

3 conservation priority land: 

4 ‘‘(i) Trees, brush, slash, residues, inter5 planted energy crops, or any other vegeta6 tive matter removed from an actively man7 aged tree plantation established— 

8 ‘‘(I) prior to January 1, 2009; or 

9 ‘‘(II) on land that, as of January 

10 1, 2009, was cultivated or fallow and 

11 non-forested. 

12 ‘‘(ii) Trees, logging residue, thinnings, 

13 cull trees, pulpwood, and brush removed 

14 from naturally-regenerated forests or other 

15 non-plantation forests, including for the 

16 purposes of hazardous fuel reduction or pre17 ventative treatment for reducing or con18 taining insect or disease infestation. 

19 ‘‘(iii) Logging residue, thinnings, cull 

20 trees, pulpwood, brush and species that are 

21 non-native and noxious, from stands that 

22 were planted and managed after January 1, 

23 2009, to restore or maintain native forest 

24 types. 

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1 ‘‘(iv) Dead or severely damaged trees 

2 removed within 5 years of fire, blowdown, 

3 or other natural disaster, and badly infested 

4 trees. 

5 ‘‘(I) Materials, pre-commercial thinnings, 

6 or removed invasive species from National Forest 

7 System land and public lands (as defined in sec8 tion 103 of the Federal Land Policy and Man9 agement Act of 1976 (43 U.S.C. 1702)), includ10 ing those that are byproducts of preventive treat11 ments (such as trees, wood, brush, thinnings, 

12 chips, and slash), that are removed as part of a 

13 federally recognized timber sale, or that are re14 moved to reduce hazardous fuels, to reduce or 

15 contain disease or insect infestation, or to restore 

16 ecosystem health, and that are— 

17 ‘‘(i) not from components of the Na18 tional Wilderness Preservation System, Wil19 derness Study Areas, Inventoried Roadless 

20 Areas, old growth or mature forest stands, 

21 components of the National Landscape Con22 servation System, National Monuments, Na23 tional Conservation Areas, Designated 

24 Primitive Areas; or Wild and Scenic Rivers 

25 corridors; 

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1 ‘‘(ii) harvested in environmentally sus2 tainable quantities, as determined by the 

3 appropriate Federal land manager; and 

4 ‘‘(iii) are harvested in accordance with 

5 Federal and State law, and applicable land 

6 management plans. 

7 ‘‘(43) RETIRE.—The term ‘retire’, with respect to 

8 an allowance or offset credit established or issued 

9 under this title, means to disqualify such allowance 

10 or offset credit for any subsequent use under this title, 

11 regardless of whether the use is a sale, exchange, or 

12 submission of the allowance or offset credit to satisfy 

13 a compliance obligation. 

14 ‘‘(44) REVERSAL.—The term ‘reversal’ means an 

15 intentional or unintentional loss of sequestered green16 house gases to the atmosphere. 

17 ‘‘(45) SEQUESTERED AND SEQUESTRATION.—The 

18 terms ‘sequestered’ and ‘sequestration’ mean the sepa19 ration, isolation, or removal of greenhouse gases from 

20 the atmosphere, as determined by the Administrator. 

21 The terms include biological, geologic, and mineral se22 questration, but do not include ocean fertilization 

23 techniques. 

24 ‘‘(46) STATIONARY SOURCE.—The term ‘sta25 tionary source’ means any integrated operation commstockstill on PROD1PC66 with BILLS

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1 prising any plant, building, structure, or stationary 

2 equipment, including support buildings and equip3 ment, that is located within one or more contiguous 

4 or adjacent properties, is under common control of the 

5 same person or persons, and emits or may emit a 

6 greenhouse gas. 

7 ‘‘(47) STRATEGIC RESERVE ALLOWANCE.—The 

8 term ‘strategic reserve allowance’ means an emission 

9 allowance reserved for, transferred to, or deposited in 

10 the strategic reserve, or established, under section 726. 

11 ‘‘(48) UNCAPPED EMISSIONS.—The term ‘un12 capped emissions’ means emissions of greenhouse 

13 gases emitted after December 31, 2011, that are not 

14 capped emissions. 

15 ‘‘(49) UNITED STATES GREENHOUSE GAS EMIS16 SIONS.—The term ‘United States greenhouse gas emis17 sions’ means the total quantity of annual greenhouse 

18 gas emissions from the United States, as calculated by 

19 the Administrator and reported to the United Nations 

20 Framework Convention on Climate Change Secre21 tariat. 

22 ‘‘(50) UTILITY UNIT.—The term ‘utility unit’ 

23 means a combustion device that, on January 1, 2009, 

24 or any date thereafter, is fossil fuel-fired and serves 

25 a generator that produces electricity for sale, unless 

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1 such combustion device, during the 12-month period 

2 starting the later of January 1, 2009, or the com3 mencement of commercial operation and each cal4 endar year starting after such later date— 

5 ‘‘(A) is part of an integrated cycle system 

6 that cogenerates steam and electricity during 

7 normal operation and that supplies one-third or 

8 less of its potential electric output capacity and 

9 25 MW or less of electrical output for sale; or 

10 ‘‘(B) combusts materials of which more than 

11 95 percent is municipal solid waste on a heat 

12 input basis. 

13 ‘‘(51) VINTAGE YEAR.—The term ‘vintage year’ 

14 means the calendar year for which an emission allow15 ance is established under section 721(a) or which is 

16 assigned to an emission allowance under section 

17 726(g)(3)(A), except that the vintage year for a stra18 tegic reserve allowance shall be the year in which such 

19 allowance is purchased at auction.’’. 

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1 Subtitle B—Disposition of 

2 Allowances 

3 SEC. 321. DISPOSITION OF ALLOWANCES FOR GLOBAL 

4 WARMING POLLUTION REDUCTION PROGRAM. 

5 Title VII of the Clean Air Act, as added by section 

6 311 of this Act, is amended by adding at the end the fol7 lowing part: 

8 ‘‘PART H—DISPOSITION OF ALLOWANCES 

9 ‘‘SEC. 781. ALLOCATION OF ALLOWANCES FOR SUPPLE10 MENTAL REDUCTIONS. 

11 ‘‘(a) IN GENERAL.—The Administrator shall allocate 

12 for each vintage year the following percentage of the emis13 sion allowances established under section 721(a), for dis14 tribution in accordance with part E: 

15 ‘‘(1) For vintage years 2012 through 2025, 5 

16 percent. 

17 ‘‘(2) For vintage years 2026 through 2030, 3 

18 percent. 

19 ‘‘(3) For vintage years 2031 through 2050, 2 

20 percent. 

21 ‘‘(b) ADJUSTMENT.—The Administrator shall modify 

22 the percentages set forth in subsection (a) as necessary to 

23 ensure the achievement of the annual supplemental emission 

24 reduction objective for 2020, and the cumulative reduction 

25 objective through 2025, set forth in section 753(b)(1). 

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1 ‘‘(c) CARRYOVER.—If the Administrator has not dis2 tributed all of the allowances allocated pursuant to this sec3 tion for a given vintage year by the end of that year, the 

4 Administrator shall— 

5 ‘‘(1) auction the remaining emission allowances 

6 under section 791 not later than March 31 of the year 

7 following that vintage year; and 

8 ‘‘(2) increase the allocation for the vintage year 

9 after the vintage year for which emission allowances 

10 were undistributed by the amount of undistributed 

11 emission allowances. 

12 ‘‘SEC. 782. ALLOCATION OF EMISSION ALLOWANCES. 

13 ‘‘(a) ELECTRICITY CONSUMERS.—The Administrator 

14 shall allocate emission allowances for the benefit of elec15 tricity consumers, to be distributed in accordance with sec16 tion 783 in the following amounts: 

17 ‘‘(1) For vintage years 2012 and 2013, 43.75 

18 percent of the emission allowances established for each 

19 year under section 721(a). 

20 ‘‘(2) For vintage years 2014 and 2015, 38.89 

21 percent of the emission allowances established for each 

22 year under section 721(a). 

23 ‘‘(3) For vintage years 2016 through 2025, 35.00 

24 percent of the emission allowances established for each 

25 year under section 721(a). 

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1 ‘‘(4) For vintage year 2026, 28 percent of the 

2 emission allowances established for each year under 

3 section 721(a). 

4 ‘‘(5) For vintage year 2027, 21 percent of the 

5 emission allowances established for each year under 

6 section 721(a). 

7 ‘‘(6) For vintage year 2028, 14 percent of the 

8 emission allowances established for each year under 

9 section 721(a). 

10 ‘‘(7) For vintage year 2029, 7 percent of the 

11 emission allowances established for each year under 

12 section 721(a). 

13 ‘‘(b) NATURAL GAS CONSUMERS.—The Administrator 

14 shall allocate emission allowances for the benefit of natural 

15 gas consumers to be distributed in accordance with section 

16 784 in the following amounts: 

17 ‘‘(1) For vintage years 2016 through 2025, 9 

18 percent of the emission allowances established for each 

19 year under section 721(a). 

20 ‘‘(2) For vintage year 2026, 7.2 percent of the 

21 emission allowances established for each year under 

22 section 721(a). 

23 ‘‘(3) For vintage year 2027, 5.4 percent of the 

24 emission allowances established for each year under 

25 section 721(a). 

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1 ‘‘(4) For vintage year 2028, 3.6 percent of the 

2 emission allowances established for each year under 

3 section 721(a). 

4 ‘‘(5) For vintage year 2029, 1.8 percent of the 

5 emission allowances established for each year under 

6 section 721(a). 

7 ‘‘(c) HOME HEATING OIL AND PROPANE CON8 SUMERS.—The Administrator shall allocate emission allow9 ances for the benefit of home heating oil and propane con10 sumers to be distributed in accordance with section 785 in 

11 the following amounts: 

12 ‘‘(1) For vintage years 2012 and 2013, 1.875 

13 percent of the emission allowances established for each 

14 year under section 721(a). 

15 ‘‘(2) For vintage years 2014 and 2015, 1.67 per16 cent of the emission allowances established for each 

17 year under section 721(a). 

18 ‘‘(3) For vintage years 2016 through 2025, 1.5 

19 percent of the emission allowances established for each 

20 year under section 721(a). 

21 ‘‘(4) For vintage year 2026, 1.2 percent of the 

22 emission allowances established for each year under 

23 section 721(a). 

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1 ‘‘(5) For vintage year 2027, 0.9 percent of the 

2 emission allowances established for each year under 

3 section 721(a). 

4 ‘‘(6) For vintage year 2028, 0.6 percent of the 

5 emission allowances established for each year under 

6 section 721(a). 

7 ‘‘(7) For vintage year 2029, 0.3 percent of the 

8 emission allowances established for each year under 

9 section 721(a). 

10 ‘‘(d) LOW INCOME CONSUMERS.—For each vintage 

11 year starting in 2012, the Administrator shall auction pur12 suant to section 791 15 percent of the emission allowances 

13 established for each year under section 721(a), with the pro14 ceeds used for the benefit of low income consumers to fund 

15 the program set forth in subtitle C of title IV of American 

16 Clean Energy and Security Act of 2009. 

17 ‘‘(e) TRADE-VULNERABLE INDUSTRIES.—The Admin18 istrator shall allocate emission allowances to energy-inten19 sive, trade-exposed entities, to be distributed in accordance 

20 with section 765, in the following amounts: 

21 ‘‘(1) For vintage years 2012 and 2013, up to 2.0 

22 percent of the emission allowances established for each 

23 year under section 721(a). 

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1 ‘‘(2) For vintage year 2014, up to 15 percent of 

2 the emission allowances established for that year 

3 under section 721(a). 

4 ‘‘(3) For vintage year 2015, up to the product of 

5 the amount specified in paragraph (2), multiplied by 

6 the quantity of emission allowances established for 

7 2015 under section 721(a) divided by the quantity of 

8 emission allowances established for 2014 under section 

9 721(a). 

10 ‘‘(4) For vintage year 2016, up to the product of 

11 the amount specified in paragraph (3), multiplied by 

12 the quantity of emission allowances established for 

13 2015 under section 721(a) divided by the quantity of 

14 emission allowances established for 2014 under section 

15 721(a). 

16 ‘‘(5) For vintage years 2017 through 2025, up to 

17 the product of the amount specified in paragraph (4), 

18 multiplied by the quantity of emission allowances es19 tablished for that year under section 721(a) divided 

20 by the quantity of emission allowances established for 

21 2016 under section 721(a). 

22 ‘‘(6) For vintage years 2026 through 2050, up to 

23 the product of the amount specified in paragraph 

24 (4)— 

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1 ‘‘(A) multiplied by the quantity of emission 

2 allowances established for the applicable year 

3 during 2026 through 2050 under section 721(a) 

4 divided by the quantity of emission allowances 

5 established for 2016 under section 721(a); and 

6 ‘‘(B) multiplied by a factor, not exceeding 

7 100 percent, that shall equal 90 percent for 2026 

8 and decline 10 percent for each year thereafter 

9 until reaching zero, 

10 except that, if the President sets one or more factors 

11 for a year under section 767(c)(3)(A), the highest fac12 tor set (not exceeding 100 percent) shall be used for 

13 that year instead of the factor specified in subpara14 graph (B). 

15 ‘‘(f) DEPLOYMENT OF CARBON CAPTURE AND SEQUES16 TRATION TECHNOLOGY.— 

17 ‘‘(1) ANNUAL ALLOCATION.—The Administrator 

18 shall allocate emission allowances for the deployment 

19 of carbon capture and sequestration technology to be 

20 distributed in accordance with section 786 in the fol21 lowing amounts: 

22 ‘‘(A) For vintage years 2014 through 2017, 

23 1.75 percent of the emission allowances estab24 lished for each year under section 721(a). 

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1 ‘‘(B) For vintage years 2018 and 2019, 4.75 

2 percent of the emission allowances established for 

3 each year under section 721(a). 

4 ‘‘(C) For vintage years 2020 through 2050, 

5 5 percent of the emission allowances established 

6 for each year under section 721(a). 

7 ‘‘(2) CARRYOVER.—If the Administrator has not 

8 distributed all of the allowances allocated pursuant to 

9 this subsection for a given vintage year by the end of 

10 that year, the Administrator shall— 

11 ‘‘(A) auction those emission allowances 

12 under section 791 not later than March 31 of the 

13 year following that vintage year; and 

14 ‘‘(B) increase the allocation under this sub15 section for the vintage year after the vintage year 

16 for which emission allowances were undisbursed 

17 by the amount of undisbursed emission allow18 ances, but only to the extent that allowances for 

19 that later year are to be auctioned. 

20 ‘‘(g) INVESTMENT IN ENERGY EFFICIENCY AND RE21 NEWABLE ENERGY.—The Administrator shall allocate 

22 emission allowances to invest in energy efficiency and re23 newable energy as follows: 

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1 ‘‘(1) To be distributed in accordance with section 

2 132 of the American Clean Energy and Security Act 

3 of 2009 in the following amounts: 

4 ‘‘(A) For vintage years 2012 through 2015, 

5 9.5 percent of the emission allowances established 

6 for each year under section 721(a). 

7 ‘‘(B) For vintage years 2016 through 2017, 

8 6.5 percent of the emission allowances established 

9 for each year under section 721(a). 

10 ‘‘(C) For vintage years 2018 through 2021, 

11 5.5 percent of the emission allowances established 

12 for each year under section 721(a). 

13 ‘‘(D) For vintage years 2022 through 2025, 

14 1.0 percent of the emission allowances established 

15 for each year under section 721(a). 

16 ‘‘(E) For vintage years 2026 through 2050, 

17 4.5 percent of the emission allowances established 

18 for each year under section 721(a). 

19 ‘‘(F) At the same time the vintage year 

20 2022 through 2025 allowances are distributed, 

21 3.55 percent of emission allowances established 

22 under section 721(a) for the vintage year four 

23 years greater shall also be distributed (which 

24 shall be in addition to the emission allowances 

25 in subparagraph (E)). 

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1 ‘‘(2) To be distributed in accordance with section 

2 201 of the American Clean Energy and Security Act 

3 of 2009, for each vintage year from 2012 through 

4 2050, 0.5 percent of emission allowances established 

5 under section 721(a). 

6 ‘‘(h) CLEAN ENERGY INNOVATION CENTERS.—For 

7 each vintage year from 2012 through 2050, the Adminis8 trator shall allocate for Clean Energy Innovation Centers, 

9 1.5 percent of emission allowances established under section 

10 721(a), to be distributed in accordance with section 171 of 

11 the American Clean Energy and Security Act of 2009. 

12 ‘‘(i) INVESTMENT IN CLEAN VEHICLE TECHNOLOGY.— 

13 The Administrator shall allocate emission allowances to in14 vest in the development and deployment of clean vehicles, 

15 to be distributed in accordance with section 124 of the 

16 American Clean Energy and Security Act of 2009 in the 

17 following amounts: 

18 ‘‘(1) For vintage years 2012 through 2017, 3 

19 percent of the emission allowances established for each 

20 year under section 721(a). 

21 ‘‘(2) For vintage years 2018 through 2025, 1 

22 percent of the emission allowances established for each 

23 year under section 721(a). 

24 ‘‘(j) DOMESTIC FUEL PRODUCTION.—For vintage 

25 years 2014 through 2026, the Administrator shall allocate 

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1 2.0 percent of the emission allowances established under sec2 tion 721(a) to domestic refiners, to be distributed in accord3 ance with section 787. 

4 ‘‘(k) INVESTMENT IN WORKERS.—The Administrator 

5 shall auction pursuant to section 791 emission allowances 

6 for workers in the following amounts and shall report to 

7 the Secretary of Labor the amount of proceeds from the sale 

8 of these allowances: 

9 ‘‘(1) For vintage years 2012 through 2021, 0.5 

10 percent of the emission allowances established for each 

11 year under section 721(a). 

12 ‘‘(2) For vintage years 2022 through 2050, 1.0 

13 percent of the emission allowances established for each 

14 year under section 721(a). 

15 ‘‘(l) DOMESTIC ADAPTATION.—The Administrator 

16 shall allocate emission allowances for domestic adaptation 

17 as follows: 

18 ‘‘(1) To be distributed in accordance with section 

19 453 of the American Clean Energy and Security Act 

20 of 2009 in the following amounts: 

21 ‘‘(A) For vintage years 2012 through 2021, 

22 0.9 percent of the emission allowances established 

23 for each year under section 721(a). 

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1 ‘‘(B) For vintage years 2022 through 2026, 

2 1.9 percent of the emission allowances established 

3 for each year under section 721(a). 

4 ‘‘(C) For vintage years 2027 through 2050, 

5 3.9 percent of the emission allowances established 

6 for each year under section 721(a). 

7 ‘‘(2) For vintage year 2012 and thereafter, the 

8 Administrator shall auction, pursuant to section 791, 

9 0.1 percent of the emission allowances established for 

10 each year under section 721(a), and shall deposit the 

11 proceeds in the Climate Change Health Protection 

12 and Promotion Fund established by section 467 of the 

13 American Clean Energy and Security Act of 2009. 

14 ‘‘(m) WILDLIFE AND NATURAL RESOURCE ADAPTA15 TION.—The Administrator shall allocate emission allow16 ances for wildlife and natural resource adaptation as fol17 lows: 

18 ‘‘(1) To be distributed to State agencies in ac19 cordance with section 480(c)(1) of the American 

20 Clean Energy and Security Act of 2009 in the fol21 lowing amounts: 

22 ‘‘(A) For vintage years 2012 through 2021, 

23 0.385 percent of the emission allowances estab24 lished for each year under section 721(a). 

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1 ‘‘(B) For vintage years 2022 through 2026, 

2 0.77 percent of the emission allowances estab3 lished for each year under section 721(a). 

4 ‘‘(C) For vintage years 2027 through 2050, 

5 1.54 percent of the emission allowances estab6 lished for each year under section 721(a). 

7 ‘‘(2) To be auctioned pursuant to section 791, 

8 with the proceeds to be deposited in the Natural Re9 sources Climate Change Adaptation Fund established 

10 pursuant to section 480(a), in the following amounts: 

11 ‘‘(A) For vintage years 2012 through 2021, 

12 0.615 percent of the emission allowances estab13 lished for each year under section 721(a). 

14 ‘‘(B) For vintage years 2022 through 2026, 

15 1.23 percent of the emission allowances estab16 lished for each year under section 721(a). 

17 ‘‘(C) For vintage years 2027 through 2050, 

18 2.46 percent of the emission allowances estab19 lished for each year under section 721(a). 

20 ‘‘(n) INTERNATIONAL ADAPTATION.—The Adminis21 trator shall allocate emission allowances for international 

22 adaptation to be distributed in accordance with part 2 of 

23 subtitle E of title IV of the American Clean Energy and 

24 Security Act of 2009 in the following amounts: 

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1 ‘‘(1) For vintage years 2012 through 2021, 1.0 

2 percent of the emission allowances established for each 

3 year under section 721(a). 

4 ‘‘(2) For vintage years 2022 through 2026, 2.0 

5 percent of the emission allowances established for each 

6 year under section 721(a). 

7 ‘‘(3) For vintage years 2027 through 2050, 4.0 

8 percent of the emission allowances established for each 

9 year under section 721(a). 

10 ‘‘(o) INTERNATIONAL CLEAN TECHNOLOGY DEPLOY11 MENT.—The Administrator shall allocate emission allow12 ances for international clean technology deployment for dis13 tribution in accordance with subtitle D of title IV of the 

14 American Clean Energy and Security Act of 2009 in the 

15 following amounts: 

16 ‘‘(1) For vintage years 2012 through 2021, 1.0 

17 percent of the emission allowances established for each 

18 year under section 721(a). 

19 ‘‘(2) For vintage years 2022 through 2026, 2.0 

20 percent of the emission allowances established for each 

21 year under section 721(a). 

22 ‘‘(3) For vintage years 2027 through 2050, 4.0 

23 percent of the emission allowances established for each 

24 year under section 721(a). 

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1 ‘‘(p) RELEASE OF FUTURE ALLOWANCES.—The Ad2 ministrator shall make future year allowances available by 

3 auctioning allowances, pursuant to section 791, in the fol4 lowing amounts: 

5 ‘‘(1) In each of calendar years 2014 through 

6 2019, a string of 0.70 billion allowances with vintage 

7 years 12 to 17 years after the year of the auction, 

8 with an equal number of allowances from each vin9 tage year in the string. 

10 ‘‘(2) In each of calendar years 2020 through 

11 2025, a string of 0.50 billion allowances with vintage 

12 years 12 to 17 years after the year of the auction, 

13 with an equal number of allowances from each vin14 tage year in the string. 

15 ‘‘(3) In each of calendar years 2026 through 

16 2030, a string of 0.3 billion allowances with vintage 

17 years 12 to 17 years after the year of the auction, 

18 with an equal number of allowances from each vin19 tage year in the string. 

20 ‘‘(q) DEFICIT REDUCTION.— 

21 ‘‘(1) For each of vintage years 2012 through 

22 2025, any allowances not designated for distribution 

23 or auction pursuant to section 781, subsections (a) 

24 through (o) of this section, or section 790 shall be aucmstockstill on PROD1PC66 with BILLS

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1 tioned by the Administrator pursuant to section 791 

2 and the proceeds shall be deposited into the Treasury. 

3 ‘‘(2) Unless otherwise specified, any allowances 

4 allocated pursuant to subsections (a) through (o) and 

5 not distributed by March 31 of the calendar year fol6 lowing the allowance’s vintage year, shall be auc7 tioned by the Administrator and the proceeds shall be 

8 deposited into the Treasury. 

9 ‘‘(3) For auctions conducted through calendar 

10 year 2020 pursuant to subsection (p), the auction 

11 proceeds shall be deposited into the Treasury. 

12 ‘‘(r) CLIMATE CHANGE CONSUMER REFUND.— 

13 ‘‘(1) For each of vintage years 2026 through 

14 2050, the Administrator shall auction the following 

15 allowances established under section 721(a) and de16 posit the proceeds into the Climate Change Consumer 

17 Refund Account: 

18 ‘‘(A) Any allowances not designated for dis19 tribution or auction pursuant to section 781, 

20 subsections (a) through (p) of this section, or sec21 tion 790. 

22 ‘‘(B) Unless otherwise specified, any allow23 ances allocated pursuant to subsections (a) 

24 through (o) and not distributed by March 31 of 

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1 the calendar year following the allowance’s vin2 tage year. 

3 ‘‘(2) For auctions conducted pursuant to sub4 section (p) in calendar years 2021 and thereafter, the 

5 Administrator shall place the proceeds from the sales 

6 of the these allowances into the Climate Change Con7 sumer Refund Account. Funds deposited into the Cli8 mate Change Consumer Refund Account shall be used 

9 as specified in section 789 and shall be available for 

10 expenditure, without further appropriation or fiscal 

11 year limitation. 

12 ‘‘SEC. 783. ELECTRICITY CONSUMERS. 

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

14 ‘‘(1) ELECTRICITY LOCAL DISTRIBUTION COM15 PANY.—The term ‘electricity local distribution com16 pany’ means an electric utility— 

17 ‘‘(A) that has a legal, regulatory, or con18 tractual obligation to deliver electricity directly 

19 to retail consumers in the United States, regard20 less of whether that entity or another entity sells 

21 the electricity as a commodity to those retail 

22 consumers; and 

23 ‘‘(B) the retail rates of which, except in the 

24 case of a registered electric cooperative, are regu25 lated by a State regulatory authority, regulatory 

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1 commission, municipality, public utility, or by 

2 an Indian tribe pursuant to tribal law. 

3 ‘‘(2) LONG-TERM CONTRACT GENERATOR.—The 

4 term ‘long-term contract generator’ means a quali5 fying small power production facility or a qualifying 

6 cogeneration facility (within the meaning of section 

7 3(17)(C) or 3(18)(B) of the Federal Power Act), or a 

8 new independent power production facility (within 

9 the meaning of section 416(a)(2) of this Act, except 

10 that subparagraph (C) of such definition shall not 

11 apply for purposes of this paragraph), that is— 

12 ‘‘(A) a covered entity; 

13 ‘‘(B) as of the commencement of operation, 

14 a facility consisting of one or more utility units 

15 with total installed net output capacity (in 

16 MWe) of no more than 130 percent of the facili17 ty’s total planned net output capacity (in MWe); 

18 ‘‘(C) as of the date of enactment of this title, 

19 a facility with a power sales agreement executed 

20 before January 1, 2007, that governs the facili21 ty’s electricity sales and provides for sales at a 

22 price (whether a fixed price or a price formula) 

23 for electricity that does not allow for recovery of 

24 the costs of compliance with the limitation on 

25 greenhouse gas emissions under this title; and 

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1 ‘‘(D) not a merchant coal generator. 

2 ‘‘(3) MERCHANT COAL GENERATOR.—The term 

3 ‘merchant coal generator’ means an electric genera4 tion facility that— 

5 ‘‘(A) is a covered entity; 

6 ‘‘(B) derives at least 85 percent of its heat 

7 input from coal, petroleum coke, or any com8 bination of these 2 fuels; 

9 ‘‘(C) is not owned by a Federal, State, or 

10 regional agency or power authority; and 

11 ‘‘(D) generates electricity for sale to others, 

12 provided that such sales are not subject to— 

13 ‘‘(i) retail rate regulation by a State 

14 public utility commission; or 

15 ‘‘(ii) self-regulation of rates by a local 

16 government, State agency, or electric coop17 erative. 

18 ‘‘(4) STATE REGULATORY AUTHORITY.—The term 

19 ‘State regulatory authority’ has the meaning given 

20 that term in section 3(17) of the Public Utility Regu21 latory Policies Act of 1978 (16 U.S.C. 2602(17)). 

22 ‘‘(b) ELECTRICITY LOCAL DISTRIBUTION COMPA23 NIES.— 

24 ‘‘(1) ALLOCATION.—Not later than June 30 of 

25 2011 and each calendar year thereafter through 2028, 

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1 the Administrator shall distribute to electricity local 

2 distribution companies for the benefit of retail rate3 payers the quantity of emission allowances allocated 

4 for the electricity sector for the following vintage year 

5 pursuant to section 782(a), provided that the Admin6 istrator shall first subtract from such quantity and 

7 distribute or reserve for distribution the quantity of 

8 emission allowances for the relevant vintage year that 

9 are required for distribution under subsections (c) 

10 and (d) of this section. 

11 ‘‘(2) DISTRIBUTION OF ALLOWANCES BASED ON

12 EMISSIONS.— 

13 ‘‘(A) IN GENERAL.—For each vintage year, 

14 50 percent of the emission allowances available 

15 for distribution under paragraph (1) shall be 

16 distributed by the Administrator among indi17 vidual electricity local distribution companies 

18 ratably based on the annual average carbon di19 oxide emissions attributable to generation of elec20 tricity delivered at retail by each such company 

21 during the base period determined under sub22 paragraph (B). 

23 ‘‘(B) BASE PERIOD.— 

24 ‘‘(i) VINTAGE YEARS 2012 AND 2013.— 

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1 tricity local distribution company’s base pe2 riod shall be— 

3 ‘‘(I) calendar years 2006 through 

4 2008; or 

5 ‘‘(II) any 3 consecutive calendar 

6 years between 1999 and 2008, inclu7 sive, that such company selects, pro8 vided that the company timely informs 

9 the Administrator of such selection. 

10 ‘‘(ii) VINTAGE YEARS 2014 AND THERE11 AFTER.—For vintage years 2014 and there12 after, the base period shall be— 

13 ‘‘(I) the base period selected under 

14 clause (i); or 

15 ‘‘(II) any 3 consecutive calendar 

16 years between 2009 through 2012, in17 clusive, or, for local distribution com18 panies with new units that are not 

19 fully operational before 2012, solely 

20 calendar year 2012, provided that such 

21 company selects a period from among 

22 these options and timely informs the 

23 Administrator of such selection. 

24 ‘‘(C) DETERMINATION OF EMISSIONS.—As 

25 part of the regulations promulgated pursuant to 

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1 subsection (e), the Administrator, after consulta2 tion with the Energy Information Administra3 tion, shall determine the average amount of car4 bon dioxide emissions attributable to generation 

5 of electricity delivered at retail by each elec6 tricity local distribution company for each of the 

7 years 1999 through 2009 or the most recent cal8 endar year for which appropriate data are avail9 able, taking into account entities’ electricity gen10 eration, electricity purchases, and electricity 

11 sales. Not later than March 31, 2013, the Admin12 istrator, after consultation with the Energy In13 formation Administration, shall update such de14 termination to include emissions for any addi15 tional calendar years through 2012. Such deter16 minations shall be as precise as practicable, tak17 ing into account the nature of data currently 

18 available and the nature of markets and regula19 tion in effect in various regions of the country. 

20 The following requirements shall apply to such 

21 determinations: 

22 ‘‘(i) The Administrator shall determine 

23 the amount of fossil fuel-based electricity de24 livered at retail by each electricity local dis25 tribution company, and shall use appromstockstill on PROD1PC66 with BILLS

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1 priate emission factors to calculate carbon 

2 dioxide emissions associated with the gen3 eration of such electricity. 

4 ‘‘(ii) Where it is not practical to deter5 mine the precise fuel mix for the electricity 

6 delivered at retail by an individual elec7 tricity local distribution company, the Ad8 ministrator may use the best available data, 

9 including average data on a regional basis 

10 with reference to Regional Transmission 

11 Organizations or regional entities (as that 

12 term is defined in section 215(a)(7) of the 

13 Federal Power Act (16 U.S.C. 824o(a)(7)), 

14 to estimate fuel mix and emissions. Dif15 ferent methodologies may be applied in dif16 ferent regions if appropriate to obtain the 

17 most accurate estimate. 

18 ‘‘(3) DISTRIBUTION OF ALLOWANCES BASED ON

19 DELIVERIES.— 

20 ‘‘(A) INITIAL ALLOCATION FORMULA.—Ex21 cept as provided in subparagraph (B), for each 

22 vintage year, the Administrator shall distribute 

23 50 percent of the emission allowances allocated 

24 under paragraph (1) of this subsection among 

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1 nies ratably based on each electricity local dis2 tribution company’s annual average retail elec3 tricity deliveries for 2006 through 2008, unless 

4 the owner or operator of the company selects 3 

5 other consecutive years between 1999 and 2008, 

6 inclusive, and timely notifies the Administrator 

7 of its selection. 

8 ‘‘(B) UPDATING.—Prior to distributing 

9 2015 vintage emission allowances under this sub10 paragraph and at 3-year intervals thereafter, the 

11 Administrator shall update the distribution for12 mula under this subparagraph to reflect changes 

13 in each electricity local distribution company’s 

14 service territory since the most recent formula 

15 was established. For each successive 3-year pe16 riod, the Administrator shall distribute allow17 ances ratably among individual electricity local 

18 distribution companies based on the product of— 

19 ‘‘(i) each electricity local distribution 

20 company’s average annual deliveries per 

21 customer during calendar years 2006 

22 through 2008, or during the 3 alternative 

23 consecutive years selected by such company 

24 under subparagraph (A); and 

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1 ‘‘(ii) the number of customers of such 

2 electricity local distribution company in the 

3 most recent year in which the formula is 

4 updated under this clause. 

5 ‘‘(4) USE OF ALLOWANCES.— 

6 ‘‘(A) RATEPAYER BENEFIT.—Emission al7 lowances distributed to an electricity local dis8 tribution company under this subsection shall be 

9 used exclusively for the benefit of retail rate10 payers of such electricity local distribution com11 pany and may not be used to support electricity 

12 sales or deliveries to entities or persons other 

13 than such ratepayers. 

14 ‘‘(B) RATEPAYER CLASSES.—In using emis15 sion allowances distributed under this section for 

16 the benefit of ratepayers, an electricity local dis17 tribution company shall ensure that ratepayer 

18 benefits are distributed— 

19 ‘‘(i) among ratepayer classes ratably 

20 based on electricity deliveries to each class; 

21 and 

22 ‘‘(ii) equitably among individual rate23 payers within each ratepayer class, includ24 ing entities that receive emission allowances 

25 pursuant to part F. 

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1 ‘‘(C) LIMITATION.—An electricity local dis2 tribution company shall not use the value of 

3 emission allowances distributed under this sub4 section to provide to any ratepayer a rebate that 

5 is based solely on the quantity of electricity de6 livered to such ratepayer. To the extent an elec7 tricity local distribution company uses the value 

8 of emission allowances distributed under this 

9 subsection to provide rebates, it shall, to the 

10 maximum extent practicable, provide such re11 bates with regard to the fixed portion of rate12 payers’ bills or as a fixed credit or rebate on 

13 electricity bills. 

14 ‘‘(D) GUIDELINES.—As part of the regula15 tions promulgated under subsection (e), the Ad16 ministrator shall prescribe specific guidelines for 

17 the implementation of the requirements of this 

18 paragraph. 

19 ‘‘(5) REGULATORY PROCEEDINGS.— 

20 ‘‘(A) REQUIREMENT.—No electricity local 

21 distribution company shall be eligible to receive 

22 emission allowances under this subsection unless 

23 the State regulatory authority with authority 

24 over such company, or the entity with authority 

25 to regulate retail electricity rates of an electricity 

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1 local distribution company not regulated by a 

2 State regulatory authority, has— 

3 ‘‘(i) promulgated a regulation or com4 pleted a rate proceeding (or the equivalent, 

5 in the case of a ratemaking entity other 

6 than a State regulatory authority) that pro7 vides for the full implementation of the re8 quirements of paragraph (4) of this sub9 section; and 

10 ‘‘(ii) made available to the Adminis11 trator and the public a report describing, in 

12 adequate detail, the manner in which the 

13 requirements of paragraph (4) will be im14 plemented. 

15 ‘‘(B) UPDATING.—The Administrator shall 

16 require, as a condition of continued receipt of 

17 emission allowances under this subsection by an 

18 electricity local distribution company, that a 

19 new regulation be promulgated or rate pro20 ceeding be completed, and a new report be made 

21 available to the Administrator and the public, 

22 pursuant to subparagraph (A), not less fre23 quently than every 5 years. 

24 ‘‘(6) PLANS AND REPORTING.— 

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1 ‘‘(A) REGULATIONS.—As part of the regula2 tions promulgated under subsection (e), the Ad3 ministrator shall prescribe requirements gov4 erning plans and reports to be submitted in ac5 cordance with this paragraph. 

6 ‘‘(B) PLANS.—Not later than April 30 of 

7 2011 and every 5 years thereafter through 2026, 

8 each electricity local distribution company shall 

9 submit to the Administrator a plan, approved by 

10 the State regulatory authority or other entity 

11 charged with regulating the retail rates of such 

12 company, describing such company’s plans for 

13 the disposition of the value of emission allow14 ances to be received pursuant to this subsection, 

15 in accordance with the requirements of this sub16 section. 

17 ‘‘(C) REPORTS.—Not later than June 30 of 

18 2013 and each calendar year thereafter through 

19 2031, each electricity local distribution company 

20 shall submit a report to the Administrator, and 

21 to the relevant State regulatory authority or 

22 other entity charged with regulating the retail 

23 electricity rates of such company, describing the 

24 disposition of the value of any emission allow25 ances received by such company in the prior calmstockstill on PROD1PC66 with BILLS

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1 endar year pursuant to this subsection, includ2 ing— 

3 ‘‘(i) a description of sales, transfer, ex4 change, or use by the company for compli5 ance with obligations under this title, of 

6 any such emission allowances; 

7 ‘‘(ii) the monetary value received by 

8 the company, whether in money or in some 

9 other form, from the sale, transfer, or ex10 change of emission allowances received by 

11 the company under this subsection; 

12 ‘‘(iii) the manner in which the com13 pany’s disposition of emission allowances 

14 received under this subsection complies with 

15 the requirements of this subsection, includ16 ing each of the requirements of paragraph 

17 (4); and 

18 ‘‘(iv) such other information as the Ad19 ministrator may require pursuant to sub20 paragraph (A). 

21 ‘‘(D) PUBLICATION.—The Administrator 

22 shall make available to the public all plans and 

23 reports submitted under this subsection, includ24 ing by publishing such plans and reports on the 

25 Internet. 

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1 ‘‘(7) AUDITS.—Each year, the Administrator 

2 shall audit a representative sample of electricity local 

3 distribution companies to ensure that emission allow4 ances distributed under this subsection have been used 

5 exclusively for the benefit of retail ratepayers and 

6 that such companies are complying with the require7 ments of this subsection. In selecting companies for 

8 audit, the Administrator shall take into account any 

9 credible evidence of noncompliance with such require10 ments. The Administrator shall make available to the 

11 public a report describing the results of each such 

12 audit, including by publishing such report on the 

13 Internet. 

14 ‘‘(8) ENFORCEMENT.—A violation of any re15 quirement of this subsection shall be a violation of 

16 this Act. Each emission allowance the value of which 

17 is used in violation of the requirements of this sub18 section shall be a separate violation. 

19 ‘‘(c) MERCHANT COAL GENERATORS.— 

20 ‘‘(1) QUALIFYING EMISSIONS.—The qualifying 

21 emissions for a merchant coal generator for a given 

22 calendar year shall be the product of the number of 

23 megawatt hours of electricity generated by such gener24 ator in such calendar year and the average carbon di25 oxide emissions per megawatt hour generated by such 

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1 generator during calendar years 2006 through 2008, 

2 provided that the number of megawatt hours in a 

3 given calendar year for purposes of such calculation 

4 shall be reduced in proportion to the portion of such 

5 generator’s carbon dioxide emissions that are either— 

6 ‘‘(A) captured and sequestered in such cal7 endar year; or 

8 ‘‘(B) attributable to the combustion or gas9 ification of renewable biomass, such that the gen10 erator is not required to hold emission allow11 ances for such emissions. 

12 ‘‘(2) PHASE-DOWN SCHEDULE.—The Adminis13 trator shall identify an annual phase-down factor, 

14 applicable to distributions to merchant coal genera15 tors for each of vintage years 2012 through 2029, that 

16 corresponds to the overall decline in the amount of 

17 emission allowances to be allocated to the electricity 

18 sector in such years pursuant to section 782(a). Such 

19 factor shall— 

20 ‘‘(A) for vintage year 2012, be equal to 1.0; 

21 ‘‘(B) for each of vintage years 2013 through 

22 2029, correspond to the quotient of— 

23 ‘‘(i) the quantity of emission allow24 ances allocated to the electricity sector 

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1 under section 782(a) for such vintage year; 

2 divided by 

3 ‘‘(ii) the quantity of emission allow4 ances allocated to the electricity sector 

5 under section 782(a) for vintage year 2012. 

6 ‘‘(3) DISTRIBUTION OF EMISSION ALLOW7 ANCES.—Not later than March 1 of 2013 and each 

8 calendar year through 2030, the Administrator shall 

9 distribute emission allowances of the preceding vin10 tage year to the owner or operator of each merchant 

11 coal generator equal to the product of— 

12 ‘‘(A) 0.5; 

13 ‘‘(B) the qualifying emissions for such mer14 chant coal generator for the preceding year, as 

15 determined under paragraph (1); and 

16 ‘‘(C) the phase-down factor for the preceding 

17 calendar year, as identified under paragraph 

18 (2). 

19 ‘‘(4) ADJUSTMENT.— 

20 ‘‘(A) STUDY.—Not later than July 1, 2014, 

21 the Administrator, in consultation with the Fed22 eral Energy Regulatory Commission, shall com23 plete a study to determine whether the allocation 

24 formula under paragraph (3) is resulting in, or 

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1 chant coal generators or substantially disparate 

2 treatment of merchant coal generators operating 

3 in different markets or regions. 

4 ‘‘(B) REGULATION.—If the Administrator, 

5 in consultation with the Federal Energy Regu6 latory Commission, makes an affirmative find7 ing of windfall profits or disparate treatment 

8 under subparagraph (A), the Administrator 

9 shall, not later than 18 months after the comple10 tion of the study described in subparagraph (A), 

11 promulgate regulations providing for the adjust12 ment of the allocation formula under paragraph 

13 (3) to mitigate, to the extent practicable, such 

14 windfall profits, if any, and such disparate 

15 treatment, if any. 

16 ‘‘(5) LIMITATION ON ALLOWANCES.—Notwith17 standing paragraph (3) or (4), for any vintage year 

18 the Administrator shall distribute under this sub19 section no more than 10 percent of the total quantity 

20 of emission allowances available for such vintage year 

21 for distribution to the electricity sector under section 

22 782(a). If the quantity of emission allowances that 

23 would otherwise be distributed pursuant to paragraph 

24 (3) or (4) for any vintage year would exceed such 

25 limit, the Administrator shall distribute 10 percent of 

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1 the total emission allowances available for distribu2 tion under section 782(a) for such vintage year rat3 ably among merchant coal generators based on the 

4 applicable formula under paragraph (3) or (4). 

5 ‘‘(d) GENERATORS WITH LONG-TERM POWER PUR6 CHASE AGREEMENTS.— 

7 ‘‘(1) RESERVED ALLOWANCES.—Notwithstanding 

8 subsections (b) and (c) of this section, the Adminis9 trator shall withhold from distribution to electricity 

10 local distribution companies a number of emission al11 lowances equal to 105 percent of the emission allow12 ances the Administrator anticipates will be distrib13 uted to long-term contract generators under this sub14 section. If not required to distribute all of these re15 served allowances under this subsection, the Adminis16 trator shall distribute any remaining emission allow17 ances to the electricity local distribution companies in 

18 accordance with subsection (b). 

19 ‘‘(2) DISTRIBUTION.—Not later than March 1 of 

20 2013 and each calendar year through 2030, the Ad21 ministrator shall distribute to the owner or operator 

22 of each long-term contract generator the number of 

23 emission allowances of the preceding vintage year 

24 that are equal to the number of tons of carbon dioxide 

25 emitted as a result of a qualifying long-term power 

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1 purchase agreement referred to in subsection 

2 (a)(2)(C). 

3 ‘‘(3) DURATION.—A long-term contract generator 

4 shall cease to be eligible to receive allocations under 

5 this subsection upon the earliest of the following dates: 

6 ‘‘(A) The date when the facility no longer 

7 qualifies as a qualifying small power production 

8 facility or a qualifying cogeneration facility 

9 (within the meaning of section 3(17)(C) or 

10 3(18)(B) of the Federal Power Act), or a new 

11 independent power production facility (within 

12 the meaning of section 416(a)(2) of this Act, ex13 cept that subparagraph (C) of such definition 

14 shall not apply for purposes of this clause). 

15 ‘‘(B) The date when the facility no longer 

16 meets the total installed net output capacity cri17 terion required to be met as of the commence18 ment of operation in subsection (a)(2)(B). 

19 ‘‘(C) The date when the power purchase 

20 agreement referred to in subsection (a)(2)(C)— 

21 ‘‘(i) expires; 

22 ‘‘(ii) is terminated; or 

23 ‘‘(iii) is amended in any way that 

24 changes the location of the facility, the price 

25 (whether a fixed price or price formula) for 

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1 electricity sold under such agreement, the 

2 quantity of electricity sold under the agree3 ment, or the expiration or termination date 

4 of the agreement. 

5 ‘‘(4) ELIGIBILITY.—To be eligible to receive al6 lowance distributions under this subsection, the owner 

7 or operator of a long-term contract generator shall 

8 submit each of the following in writing to the Admin9 istrator within 180 days after the date of enactment 

10 of this title, and not later than September 30 of each 

11 vintage year for which such generator wishes to re12 ceive emission allowances: 

13 ‘‘(A) A certificate of representation de14 scribed in section 700(15). 

15 ‘‘(B) An identification of each owner and 

16 each operator of the facility. 

17 ‘‘(C) An identification of the units at the 

18 facility and the location of the facility. 

19 ‘‘(D) A written certification by the des20 ignated representative that the facility meets all 

21 the requirements of the definition of a long-term 

22 contract generator. 

23 ‘‘(E) The expiration date of the power pur24 chase agreement referred to in subsection 

25 (a)(2)(C). 

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1 ‘‘(F) A copy of the power purchase agree2 ment referred to in subsection (a)(2)(C). 

3 ‘‘(5) NOTIFICATION.—Not later than 30 days 

4 after a facility loses, in accordance with paragraph 

5 (3), its eligibility for emission allowances distributed 

6 pursuant to this subsection, the designated representa7 tive of such facility shall notify the Administrator in 

8 writing when, and on what basis, the facility lost its 

9 eligibility to receive emission allowances. 

10 ‘‘(e) REGULATIONS.—Not later than 2 years after the 

11 date of enactment of this title, the Administrator, in con12 sultation with the Federal Energy Regulatory Commission, 

13 shall promulgate regulations to implement the requirements 

14 of this section. 

15 ‘‘SEC. 784. NATURAL GAS CONSUMERS. 

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

17 ‘‘(1) NATURAL GAS LOCAL DISTRIBUTION COM18 PANY.—The term ‘natural gas local distribution com19 pany’ means a natural gas local distribution com20 pany that is a covered entity. 

21 ‘‘(2) COST-EFFECTIVE.—The term ‘cost-effective’, 

22 with respect to an energy efficiency program, means 

23 that the program meets the Total Resource Cost Test, 

24 which requires that the net present value of economic 

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1 ed supply and delivery costs and deferred or avoided 

2 investments, is greater than the net present value of 

3 the economic costs over the life of the program, in4 cluding program costs and incremental costs borne by 

5 the energy consumer. 

6 ‘‘(b) ALLOCATION.—Not later than June 30 of 2015 

7 and each calendar year thereafter through 2028, the Admin8 istrator shall distribute to natural gas local distribution 

9 companies for the benefit of retail ratepayers the quantity 

10 of emission allowances allocated for the following vintage 

11 year pursuant to section 782(b). Such allowances shall be 

12 distributed among local natural gas distribution companies 

13 based on the following formula: 

14 ‘‘(1) INITIAL FORMULA.—Except as provided in 

15 paragraph (2), for each vintage year, the Adminis16 trator shall distribute emission allowances among 

17 natural gas local distribution companies ratably 

18 based on each such company’s annual average retail 

19 natural gas deliveries for 2006 through 2008, unless 

20 the owner or operator of the company selects 3 other 

21 consecutive years between 1999 and 2008, inclusive, 

22 and timely notifies the Administrator of its selection. 

23 ‘‘(2) UPDATING.—Prior to distributing 2019 vin24 tage emission allowances and at 3-year intervals 

25 thereafter, the Administrator shall update the dismstockstill on PROD1PC66 with BILLS

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1 tribution formula under this subsection to reflect 

2 changes in each natural gas local distribution com3 pany’s service territory since the most recent formula 

4 was established. For each successive 3-year period, the 

5 Administrator shall distribute allowances ratably 

6 among natural gas local distribution companies based 

7 on the product of— 

8 ‘‘(A) each natural gas local distribution 

9 company’s average annual natural gas deliveries 

10 per customer during calendar years 2006 

11 through 2008, or during the 3 alternative con12 secutive years selected by such company under 

13 paragraph (1); and 

14 ‘‘(B) the number of customers of such nat15 ural gas local distribution company in the most 

16 recent year in which the formula is updated 

17 under this paragraph. 

18 ‘‘(c) USE OF ALLOWANCES.— 

19 ‘‘(1) RATEPAYER BENEFIT.—Emission allow20 ances distributed to a natural gas local distribution 

21 company under this section shall be used exclusively 

22 for the benefit of retail ratepayers of such natural gas 

23 local distribution company and may not be used to 

24 support natural gas sales or deliveries to entities or 

25 persons other than 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 dis5 tributed— 

6 ‘‘(A) among ratepayer classes ratably based 

7 on natural gas deliveries to each class; and 

8 ‘‘(B) equitably among individual ratepayers 

9 within each ratepayer class. 

10 ‘‘(3) LIMITATION.—A natural gas local distribu11 tion company shall not use the value of emission al12 lowances distributed under this section to provide to 

13 any ratepayer a rebate that is based solely on the 

14 quantity of natural gas delivered to such ratepayer. 

15 To the extent a natural gas local distribution com16 pany uses the value of emission allowances distributed 

17 under this section to provide rebates, it shall, to the 

18 maximum extent practicable, provide such rebates 

19 with regard to the fixed portion of ratepayers’ bills or 

20 as a fixed creditor rebate on natural gas bills. 

21 ‘‘(4) ENERGY EFFICIENCY PROGRAMS.—The 

22 value of no less than one third of the emission allow23 ances distributed to natural gas local distribution 

24 companies pursuant to this section in any calendar 

25 year shall be used for cost-effective energy efficiency 

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1 programs for natural gas consumers. Such programs 

2 must be authorized and overseen by the State regu3 latory authority, or by the entity with regulatory au4 thority over retail natural gas rates in the case of a 

5 natural gas local distribution company that is not 

6 regulated by a State regulatory authority. 

7 ‘‘(5) GUIDELINES.—As part of the regulations 

8 promulgated under subsection (h), the Administrator 

9 shall prescribe specific guidelines for the implementa10 tion of the requirements of this subsection. 

11 ‘‘(d) REGULATORY PROCEEDINGS.— 

12 ‘‘(1) REQUIREMENT.—No natural gas local dis13 tribution company shall be eligible to receive emission 

14 allowances under this section unless the State regu15 latory authority with authority over such company, 

16 or the entity with authority to regulate retail rates of 

17 a natural gas local distribution company not regu18 lated by a State regulatory authority, has— 

19 ‘‘(A) promulgated a regulation or completed 

20 a rate proceeding (or the equivalent, in the case 

21 of a ratemaking entity other than a State regu22 latory authority) that provides for the full imple23 mentation of the requirements of subsection (c); 

24 and 

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1 ‘‘(B) made available to the Administrator 

2 and the public a report describing, in adequate 

3 detail, the manner in which the requirements of 

4 subsection (c) will be implemented. 

5 ‘‘(2) UPDATING.—The Administrator shall re6 quire, as a condition of continued receipt of emission 

7 allowances under this section, that a new regulation 

8 be promulgated or rate proceeding be completed, and 

9 a new report be made available to the Administrator 

10 and the public, pursuant to paragraph (1), not less 

11 frequently than every 5 years. 

12 ‘‘(e) PLANS AND REPORTING.— 

13 ‘‘(1) REGULATIONS.—As part of the regulations 

14 promulgated under subsection (h), the Administrator 

15 shall prescribe requirements governing plans and re16 ports to be submitted in accordance with this sub17 section. 

18 ‘‘(2) PLANS.—Not later than April 30 of 2015 

19 and every 5 years thereafter through 2025, each nat20 ural gas local distribution company shall submit to 

21 the Administrator a plan, approved by the State reg22 ulatory authority or other entity charged with regu23 lating the retail rates of such company, describing 

24 such company’s plans for the disposition of the value 

25 of emission allowances to be received pursuant to this 

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1 section, in accordance with the requirements of this 

2 section. 

3 ‘‘(3) REPORTS.—Not later than June 30 of 2017 

4 and each calendar year thereafter through 2031, each 

5 natural gas local distribution company shall submit 

6 a report to the Administrator, approved by the rel7 evant State regulatory authority or other entity 

8 charged with regulating the retail natural gas rates 

9 of such company, describing the disposition of the 

10 value of any emission allowances received by such 

11 company in the prior calendar year pursuant to this 

12 subsection, including— 

13 ‘‘(A) a description of sales, transfer, ex14 change, or use by the company for compliance 

15 with obligations under this title, of any such 

16 emission allowances; 

17 ‘‘(B) the monetary value received by the 

18 company, whether in money or in some other 

19 form, from the sale, transfer, or exchange of 

20 emission allowances received by the company 

21 under this section; 

22 ‘‘(C) the manner in which the company’s 

23 disposition of emission allowances received under 

24 this subsection complies with the requirements of 

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1 this section, including each of the requirements 

2 of subsection (c); 

3 ‘‘(D) the cost-effectiveness of, and energy 

4 savings achieved by, energy efficiency programs 

5 supported through such emission allowances; and 

6 ‘‘(E) such other information as the Admin7 istrator may require pursuant to paragraph (1). 

8 ‘‘(4) PUBLICATION.—The Administrator shall 

9 make available to the public all plans and reports 

10 submitted by natural gas local distribution companies 

11 under this subsection, including by publishing such 

12 plans and reports on the Internet. 

13 ‘‘(f) AUDITS.—Each year, the Administrator shall 

14 audit a representative sample of natural gas local distribu15 tion companies to ensure that emission allowances distrib16 uted under this section have been used exclusively for the 

17 benefit of retail ratepayers and that such companies are 

18 complying with the requirements of this section. In selecting 

19 companies for audit, the Administrator shall take into ac20 count any credible evidence of noncompliance with such re21 quirements. The Administrator shall make available to the 

22 public a report describing the results of each such audit, 

23 including by publishing such report on the Internet. 

24 ‘‘(g) ENFORCEMENT.—A violation of any requirement 

25 of this section shall be a violation of this Act. Each emission 

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1 allowance the value of which is used in violation of the re2 quirements of this section shall be a separate violation. 

3 ‘‘(h) REGULATIONS.—Not later than January 1, 2014, 

4 the Administrator, in consultation with the Federal Energy 

5 Regulatory Commission, shall promulgate regulations to 

6 implement the requirements of this section. 

7 ‘‘SEC. 785. HOME HEATING OIL AND PROPANE CONSUMERS. 

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

9 ‘‘(1) CARBON CONTENT.—The term ‘carbon con10 tent’ means the amount of carbon dioxide that would 

11 be emitted as a result of the combustion of a fuel. 

12 ‘‘(2) COST-EFFECTIVE.—The term ‘cost-effective’ 

13 has the meaning given that term in section 784(a)(2). 

14 ‘‘(b) ALLOCATION.—Not later than September 30 of 

15 each of calendar years 2012 through 2029, the Adminis16 trator shall distribute among the States, in accordance with 

17 this section, the quantity of emission allowances allocated 

18 pursuant to section 782(c). 

19 ‘‘(c) DISTRIBUTION AMONG STATES.—The Adminis20 trator shall distribute emission allowances among the States 

21 under this section each year ratably based on the ratio of— 

22 ‘‘(1) the carbon content of home heating oil and 

23 propane sold to consumers within each State in the 

24 preceding year for residential or commercial uses; to 

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1 ‘‘(2) the carbon content of home heating oil and 

2 propane sold to consumers within the United States 

3 in the preceding year for residential or commercial 

4 uses. 

5 ‘‘(d) USE OF ALLOWANCES.— 

6 ‘‘(1) IN GENERAL.—States shall use emission al7 lowances distributed under this section exclusively for 

8 the benefit of consumers of home heating oil or pro9 pane for residential or commercial purposes. Such 

10 proceeds shall be used exclusively for— 

11 ‘‘(A) cost-effective energy efficiency pro12 grams for consumers that use home heating oil or 

13 propane for residential or commercial purposes; 

14 or 

15 ‘‘(B) rebates or other direct financial assist16 ance programs for consumers of home heating oil 

17 or propane used for residential or commercial 

18 purposes. 

19 ‘‘(2) ADMINISTRATION AND DELIVERY MECHA20 NISMS.—In administering programs supported by 

21 this section, States shall— 

22 ‘‘(A) use no less than 50 percent of the value 

23 of emission allowances received under this sec24 tion for cost-effective energy efficiency programs 

25 to reduce consumers’ overall fuel costs; 

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1 ‘‘(B) to the extent practicable, deliver con2 sumer support under this section through exist3 ing energy efficiency and consumer energy as4 sistance programs or delivery mechanisms, in5 cluding, where appropriate, programs or mecha6 nisms administered by parties other than the 

7 State; and 

8 ‘‘(C) seek to coordinate the administration 

9 and delivery of energy efficiency and consumer 

10 energy assistance programs supported under this 

11 section, with one another and with existing pro12 grams for various fuel types, so as to deliver 

13 comprehensive, fuel-blind, coordinated programs 

14 to consumers. 

15 ‘‘(e) REPORTING.—Each State receiving emission al16 lowances under this section shall submit to the Adminis17 trator, within 12 months of each receipt of such allowances, 

18 a report, in accordance with such requirements as the Ad19 ministrator may prescribe, that— 

20 ‘‘(1) describes the State’s use of emission allow21 ances distributed under this section, including a de22 scription of the energy efficiency and consumer assist23 ance programs supported with such allowances; 

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1 ‘‘(2) demonstrates the cost-effectiveness of, and 

2 the energy savings achieved by, energy efficiency pro3 grams supported under this section; and 

4 ‘‘(3) includes a report prepared by an inde5 pendent third party, in accordance with such regula6 tions as the Administrator may promulgate, evalu7 ating the performance of the energy efficiency and 

8 consumer assistance programs supported under this 

9 section. 

10 ‘‘(f) ENFORCEMENT.—If the Administrator determines 

11 that a State is not in compliance with this section, the Ad12 ministrator may withhold a portion of the emission allow13 ances, the quantity of which is equal to up to twice the 

14 quantity of the allowances that the State failed to use in 

15 accordance with the requirements of this section, that such 

16 State would otherwise be eligible to receive under this sec17 tion in later years. Allowances withheld pursuant to this 

18 subsection shall be distributed among the remaining States 

19 ratably in accordance with the formula in subsection (c). 

20 ‘‘SEC. 787. ALLOCATIONS TO REFINERIES. 

21 ‘‘(a) PURPOSE.—To provide emission allowance re22 bates to petroleum refiners in the United States in a man23 ner that promotes energy efficiency and a reduction in 

24 greenhouse gas emissions at such facilities. 

25 ‘‘(b) DEFINITIONS.—In this section: 

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1 ‘‘(1) EMISSIONS.—The term ‘emissions’ means 

2 the greenhouse gas emissions in the calendar year pre3 ceding the calendar year in which emission allow4 ances are being distributed. The term includes direct 

5 emissions from fuel combustion, process emissions, 

6 and indirect emissions from the generation of elec7 tricity used to produce the output of the petroleum re8 finery or sector. 

9 ‘‘(2) INTENSITY.—The term ‘intensity’ means 

10 tons of carbon dioxide equivalent emissions per unit 

11 of output in a given year. 

12 ‘‘(3) INTENSITY FACTOR.—The term ‘intensity 

13 factor’ means the intensity of the petroleum refining 

14 sector divided by the intensity for an individual pe15 troleum refinery. 

16 ‘‘(4) OUTPUT.—The term ‘output’ means the av17 erage annual number of gallons of refined fuel pro18 duced in the three calendar years preceding the cal19 endar year in which emission allowances are being 

20 distributed. 

21 ‘‘(5) PETROLEUM REFINERY.—The term ‘petro22 leum refinery’ means a facility classified under 

23 324110 of the North American Industrial Classifica24 tion System of 2002. 

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1 ‘‘(6) PRODUCTION FACTOR.—The term ‘produc2 tion factor’ means the output of an individual petro3 leum refinery divided by the output of the petroleum 

4 refining sector. 

5 ‘‘(c) IN GENERAL.—For each vintage year between 

6 2014 and 2026, the Administrator shall distribute allow7 ances pursuant to this section to owners and operators of 

8 petroleum refineries in the United States. 

9 ‘‘(d) DISTRIBUTION SCHEDULE.—The Administrator 

10 shall distribute emission allowances of each vintage year 

11 no later than October 31 of the preceding calendar year. 

12 ‘‘(e) CALCULATION OF EMISSION ALLOWANCE RE13 BATES.— 

14 ‘‘(1) For each petroleum refinery, the Adminis15 trator shall calculate an individual allocation factor 

16 for each vintage year, based upon the product of the 

17 intensity factor for such refinery multiplied by the 

18 production factor for such refinery. 

19 ‘‘(2) The Administrator shall also calculate a 

20 total allocation factor for each vintage year, based 

21 upon the sum of all of the individual allocation fac22 tors. 

23 ‘‘(3) The Administrator shall calculate the num24 ber of emission allowances to be provided to each pe25 troleum refinery in each vintage year by dividing the 

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1 individual allocation factor for such refinery by the 

2 total allocation factor, then multiplying the result by 

3 the number of emission allowances allocated to the 

4 program under this section for that vintage year. 

5 ‘‘(f) DATA SOURCES.— 

6 ‘‘(1) The Administrator shall use data from the 

7 greenhouse gas registry, established under section 713, 

8 where it is available. 

9 ‘‘(2) The Administrator shall determine, by rule, 

10 the methodology by which to calculate indirect emis11 sions for a refinery. The Administrator shall also de12 termine, by rule, the methodology by which to take 

13 into account the value of allowances provided at no 

14 cost to local distribution companies that is passed 

15 through to a refinery. Each person selling electricity 

16 to the owner or operator of a petroleum refinery shall 

17 provide the owner or operator and the Administrator, 

18 on an annual basis, such data as the Administrator 

19 determines is necessary to implement this section. 

20 ‘‘SEC. 788. ƒSECTION RESERVED≈. 

21 ‘‘SEC. 789. CLIMATE CHANGE CONSUMER REFUNDS. 

22 ‘‘(a) REFUND.—In each year after deposits are made 

23 to the Climate Change Consumer Refund Account, the Sec24 retary of the Treasury shall provide tax refunds on a per 

25 capita basis to each household in the United States that 

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1 shall collectively equal the amount deposited into the Cli2 mate Change Consumer Refund Account. 

3 ‘‘(b) LIMITATIONS.—The Secretary of the Treasury 

4 shall establish procedures to ensure that individuals who 

5 are not— 

6 ‘‘(1) citizens or nationals of the United States; or 

7 ‘‘(2) immigrants lawfully residing in the United 

8 States, 

9 are excluded for the purpose of calculating and distributing 

10 refunds under this section. 

11 ‘‘SEC. 790. EXCHANGE FOR STATE-ISSUED ALLOWANCES. 

12 ‘‘(a) IN GENERAL.—Not later than one year after the 

13 date of enactment of this title, the Administrator shall issue 

14 regulations allowing any person in the United States to ex15 change greenhouse gas emission allowances issued before De16 cember 31, 2011, by the State of California or for the Re17 gional Greenhouse Gas Initiative, or the Western Climate 

18 Initiative (in this section referred to as ‘State allowances’) 

19 for emission allowances established by the Administrator 

20 under section 721(a). 

21 ‘‘(b) REGULATIONS.—Regulations issued under sub22 section (a) shall— 

23 ‘‘(1) provide that a person exchanging State al24 lowances under this section receive emission allow25 ances established under section 721(a) in the amount 

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1 that is sufficient to compensate for the cost of obtain2 ing and holding such State allowances; 

3 ‘‘(2) establish a deadline by which persons must 

4 exchange the State allowances; and 

5 ‘‘(3) provide that the Federal emission allow6 ances disbursed pursuant to this section shall be de7 ducted from the allowances to be auctioned pursuant 

8 to section 782(b). 

9 ‘‘(c) COST OF OBTAINING STATE ALLOWANCE.—For 

10 purposes of this section, the cost of obtaining a State allow11 ance shall be the average auction price, for emission allow12 ances issued in the year in which the State allowance was 

13 issued, under the program under which the State allowance 

14 was issued. 

15 ‘‘SEC. 791. AUCTION PROCEDURES. 

16 ‘‘(a) IN GENERAL.—To the extent that auctions of 

17 emission allowances by the Administrator are authorized 

18 by this part, such auctions shall be carried out pursuant 

19 to this section and the regulations established hereunder. 

20 ‘‘(b) INITIAL REGULATIONS.—Not later than 12 

21 months after the date of enactment of this title, the Admin22 istrator, in consultation with other agencies, as appro23 priate, shall promulgate regulations governing the auction 

24 of allowances under this section. Such regulations shall in25 clude the following requirements: 

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1 ‘‘(1) FREQUENCY; FIRST AUCTION.—Auctions 

2 shall be held four times per year at regular intervals, 

3 with the first auction to be held no later than March 

4 31, 2011. 

5 ‘‘(2) AUCTION SCHEDULE; CURRENT AND FU6 TURE VINTAGES.—The Administrator shall, at each 

7 quarterly auction under this section, offer for sale 

8 both a portion of the allowances with the same vin9 tage year as the year in which the auction is being 

10 conducted and a portion of the allowances with vin11 tage years from future years. The preceding sentence 

12 shall not apply to auctions held before 2012, during 

13 which period, by necessity, the Administrator shall 

14 auction only allowances with a vintage year that is 

15 later than the year in which the auction is held. Be16 ginning with the first auction and at each quarterly 

17 auction held thereafter, the Administrator may offer 

18 for sale allowances with vintage years of up to four 

19 years after the year in which the auction is being con20 ducted, except as provided in section 782(p). 

21 ‘‘(3) AUCTION FORMAT.—Auctions shall follow a 

22 single-round, sealed-bid, uniform price format. 

23 ‘‘(4) PARTICIPATION; FINANCIAL ASSURANCE.— 

24 Auctions shall be open to any person, except that the 

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1 quirements to ensure that auction participants can 

2 and will perform on their bids. 

3 ‘‘(5) DISCLOSURE OF BENEFICIAL OWNERSHIP.— 

4 Each bidder in the auction shall be required to dis5 close the person or entity sponsoring or benefitting 

6 from the bidder’s participation in the auction if such 

7 person or entity is, in whole or in part, other than 

8 the bidder. 

9 ‘‘(6) PURCHASE LIMITS.—No person may, di10 rectly or in concert with another participant, pur11 chase more than 5 percent of the allowances offered 

12 for sale at any quarterly auction. 

13 ‘‘(7) PUBLICATION OF INFORMATION.—After the 

14 auction, the Administrator shall, in a timely fashion, 

15 publish the identities of winning bidders, the quantity 

16 of allowances obtained by each winning bidder, and 

17 the auction clearing price. 

18 ‘‘(8) OTHER REQUIREMENTS.—The Adminis19 trator may include in the regulations such other re20 quirements or provisions as the Administrator, in 

21 consultation with other agencies, as appropriate, con22 siders appropriate to promote effective, efficient, 

23 transparent, and fair administration of auctions 

24 under this section. 

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1 ‘‘(c) REVISION OF REGULATIONS.—The Administrator 

2 may, in consultation with other agencies, as appropriate, 

3 at any time, revise the initial regulations promulgated 

4 under subsection (b). Such revised regulations need not meet 

5 the requirements identified in subsection (b) if the Adminis6 trator determines that an alternative auction design would 

7 be more effective, taking into account factors including costs 

8 of administration, transparency, fairness, and risks of col9 lusion or manipulation. In determining whether and how 

10 to revise the initial regulations under this subsection, the 

11 Administrator shall not consider maximization of revenues 

12 to the Federal Government. 

13 ‘‘(d) RESERVE AUCTION PRICE.—The minimum re14 serve auction price shall be $10 (in constant 2009 dollars) 

15 for auctions occurring in 2012. The minimum reserve price 

16 for auctions occurring in years after 2012 shall be the min17 imum reserve auction price for the previous year increased 

18 by 5 percent plus the rate of inflation (as measured by the 

19 Consumer Price Index for all urban consumers). 

20 ‘‘(e) DELEGATION OR CONTRACT.—Pursuant to regula21 tions under this section, the Administrator may by delega22 tion or contract provide for the conduct of auctions under 

23 the Administrator’s supervision by other departments or 

24 agencies of the Federal Government or by nongovernmental 

25 agencies, groups, or organizations. 

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1 ‘‘SEC. 792. AUCTIONING ALLOWANCES FOR OTHER ENTI2 TIES. 

3 ‘‘(a) CONSIGNMENT.—Any entity holding emission al4 lowances or compensatory allowances may request that the 

5 Administrator auction, pursuant to section 791, the allow6 ances on consignment. 

7 ‘‘(b) PRICING.—When the Administrator acts under 

8 this section as the agent of an entity in possession of emis9 sion allowances, the Administrator is not obligated to ob10 tain the highest price possible for the emission allowances, 

11 and instead shall auction consignment allowances in the 

12 same manner and pursuant to the same rules as auctions 

13 of other allowances under section 791. The Administrator 

14 may permit the entity offering the allowance for sale to con15 dition the sale of its allowances pursuant to this section 

16 on a minimum reserve price that is different than the re17 serve auction price set pursuant to section 791(d). 

18 ‘‘(c) PROCEEDS.—For emission allowances and com19 pensatory allowances auctioned pursuant to this section, 

20 notwithstanding section 3302 of title 31, United States 

21 Code, or any other provision of law, within 90 days of re22 ceipt, the United States shall transfer the proceeds from the 

23 auction to the entity which held the allowances auctioned. 

24 No funds transferred from a purchaser to a seller of emis25 sion allowances or compensatory allowances under this submstockstill on PROD1PC66 with BILLS

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1 section shall be held by any officer or employee of the United 

2 States or treated for any purpose as public monies. 

3 ‘‘(d) REGULATIONS.—The Administrator shall issue 

4 regulations within 24 months after the date of enactment 

5 of this title to implement this section. 

6 ‘‘SEC. 793. ESTABLISHMENT OF FUNDS. 

7 ‘‘There is established in the Treasury of the United 

8 States the following funds: 

9 ‘‘(1) The Strategic Reserve Fund. 

10 ‘‘(2) The Climate Change Consumer Refund 

11 Fund. 

12 ‘‘SEC. 794. OVERSIGHT OF ALLOCATIONS. 

13 ‘‘(a) IN GENERAL.—Not later than January 1, 2014, 

14 and every 2 years thereafter, the Comptroller General of the 

15 United States shall carry out a review of programs admin16 istered by the Federal Government that distribute emission 

17 allowances or funds from any Federal auction of allow18 ances. 

19 ‘‘(b) CONTENTS.—Each such report shall include a 

20 comprehensive evaluation of the administration and effec21 tiveness of each program, including— 

22 ‘‘(1) the efficiency, transparency, and soundness 

23 of the administration of each program; 

24 ‘‘(2) the performance of activities receiving as25 sistance under each program; 

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1 ‘‘(3) the cost-effectiveness of each program in 

2 achieving the stated purposes of the program; and 

3 ‘‘(4) recommendations, if any, for regulatory or 

4 administrative changes to each program to improve 

5 its effectiveness. 

6 ‘‘(c) FOCUS.—In evaluating program performance, 

7 each review under this section review shall address the effec8 tiveness of such programs in— 

9 ‘‘(1) creating and preserving jobs; 

10 ‘‘(2) ensuring a manageable transition for work11 ing families and workers; 

12 ‘‘(3) reducing the emissions, or enhancing seques13 tration, of greenhouse gases; 

14 ‘‘(4) developing clean technologies; and 

15 ‘‘(5) building resilience to the impacts of climate 

16 change.’’. 

17 Subtitle C—Additional Greenhouse 

18 Gas Standards 

19 SEC. 331. GREENHOUSE GAS STANDARDS. 

20 The Clean Air Act (42 U.S.C. 7401 and following), 

21 as amended by subtitles A and B of this title, is further 

22 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 in 

5 title VII, except for the term ‘stationary source’, shall have 

6 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 this 

12 title, the Administrator shall publish under section 

13 111(b)(1)(A) an inventory of categories of stationary 

14 sources that consist of those categories that contain 

15 sources that individually had uncapped greenhouse 

16 gas emissions greater than 10,000 tons of carbon diox17 ide equivalent and that, in the aggregate, were re18 sponsible for emitting at least 20 percent annually of 

19 the uncapped greenhouse gas emissions. 

20 ‘‘(B) The Administrator shall include in the in21 ventory under this paragraph each source category 

22 that is responsible for at least 10 percent of the un23 capped methane emissions in 2005. Notwithstanding 

24 any other provision, the inventory required by this 

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1 tion. The list under this paragraph shall include in2 dustrial sources, the emissions from which, when 

3 added to the capped emissions from industrial 

4 sources, constitute at least 95 percent of the green5 house gas emissions of the industrial sector. 

6 ‘‘(C) For purposes of this subsection, emissions 

7 shall be calculated using tons of carbon dioxide 

8 equivalents. In promulgating the inventory required 

9 by this paragraph and the schedule required under by 

10 paragraph (2)(C), the Administrator shall use the 

11 most current emissions data available at the time of 

12 promulgation, except as provided in subparagraph 

13 (B). 

14 ‘‘(D) Notwithstanding any other provisions, the 

15 Administrator may list under 111(b) any source cat16 egory identified in the inventory required by this sub17 section without making a finding that the source cat18 egory causes or contributes significantly to, air pollu19 tion with may be reasonably anticipated to endanger 

20 public health or welfare. 

21 ‘‘(2) STANDARDS AND SCHEDULE.—(A) For each 

22 category identified as provided in paragraph (1), the 

23 Administrator shall promulgate standards of perform24 ance under section 111 for the uncapped emissions of 

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1 egory and shall promulgate corresponding regulations 

2 under section 111(d). 

3 ‘‘(B) The Administrator shall promulgate stand4 ards as required by this subsection for stationary 

5 sources in categories identified as provided in para6 graph (1) as expeditiously as practicable, assuring 

7 that— 

8 ‘‘(i) standards for identified source cat9 egories that, combined, emitted 80 percent or 

10 more of the greenhouse gas emissions of the iden11 tified source categories shall be promulgated not 

12 later than 3 years after the date of enactment of 

13 this title and shall include standards for natural 

14 gas extraction; and 

15 ‘‘(ii) for all other identified source cat16 egories— 

17 ‘‘(I) standards for not less than an ad18 ditional 25 percent of the identified cat19 egories shall be promulgated not later than 

20 5 years after the date of enactment of this 

21 title; 

22 ‘‘(II) standards for not less than an 

23 additional 25 percent of the identified cat24 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 of 

6 this title. 

7 ‘‘(C) Not later than 24 months after the date of 

8 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 of 

11 standards for each category of sources identified pur12 suant to paragraph (1). The date for each category 

13 shall be consistent with the requirements of subpara14 graph (B). The determination of priorities for the 

15 promulgation of standards pursuant to this para16 graph is not a rulemaking and shall not be subject to 

17 judicial review, except that failure to promulgate any 

18 standard pursuant to the schedule established by this 

19 paragraph shall be subject to review under section 

20 304(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 

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1 be reviewed under section 307 when the Adminis2 trator issues performance standards for such category. 

3 ‘‘(b) CAPPED SOURCES.—No standard of performance 

4 shall be established under section 111 for capped greenhouse 

5 gas emissions from a capped source unless the Adminis6 trator determines that such standards are appropriate be7 cause of effects that do not include climate change effects. 

8 In promulgating a standard of performance under section 

9 111 for the emission from capped sources of any air pollut10 ant that is not a greenhouse gas, the Administrator shall 

11 treat the emission of any greenhouse gas by those entities 

12 as a nonair quality public health and environmental im13 pact within the meaning of section 111(a)(1). 

14 ‘‘(c) PERFORMANCE STANDARDS.—For purposes of set15 ting a performance standard for source categories identified 

16 pursuant to subsection (a)— 

17 ‘‘(1) The Administrator shall take into account 

18 the goal of reducing total United States greenhouse 

19 gas emissions as set forth in section 702. 

20 ‘‘(2) The Administrator may promulgate a de21 sign, equipment, work practice, or operational stand22 ard, or any combination thereof, under section 111 in 

23 lieu of a standard of performance under that section 

24 without regard to any determination of feasibility 

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1 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 sec5 tion, the Administrator shall take into account projec6 tions of allowance prices, such that the marginal cost 

7 of compliance (expressed as dollars per ton of carbon 

8 dioxide equivalent reduced) imposed by the standard 

9 would not, in the judgement of the Administrator, be 

10 expected to exceed the Administrator’s projected allow11 ance prices over the time period spanning from the 

12 date of initial compliance to the date that the next re13 visions of the standard would come into effect pursu14 ant to the schedule under section 111(b)(1)(B). 

15 ‘‘(d) DEFINITIONS.—In this section, the terms ‘un16 capped greenhouse gas emissions’ and ‘uncapped methane 

17 emissions’ mean those greenhouse gas or methane emissions, 

18 respectively, to which section 722 would not have applied 

19 if the requirements of this title had been in effect for the 

20 same year as the emissions data upon which the list is 

21 based. 

22 ‘‘(e) STUDY OF THE EFFECTS OF PERFORMANCE

23 STANDARDS.— 

24 ‘‘(1) STUDY.—The Administrator shall conduct a 

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1 quired under this section, which shall evaluate the ef2 fect of such standards on the— 

3 ‘‘(A) costs of achieving compliance with the 

4 economy-wide reduction goals specified in section 

5 702 and the reduction targets specified in section 

6 703; 

7 ‘‘(B) available supply of offset credits; and 

8 ‘‘(C) ability to achieve the economy-wide re9 duction goals specified in section 702 and any 

10 other benefits of such standards. 

11 ‘‘(2) REPORT.—The Administrator shall submit 

12 to the House Energy and Commerce Committee a re13 port that describes the results of the study not later 

14 than 18 months after the publication of the standards 

15 required under subsection (a)(2)(B)(i). 

16 ‘‘PART C—EXEMPTIONS FROM OTHER PROGRAMS 

17 ‘‘SEC. 831. CRITERIA POLLUTANTS. 

18 ‘‘As of the date of the enactment of the Safe Climate 

19 Act, no greenhouse gas may be added to the list under sec20 tion 108(a) on the basis of its effect on global climate 

21 change. 

22 ‘‘SEC. 832. INTERNATIONAL AIR POLLUTION. 

23 ‘‘Section 115 shall not apply to an air pollutant with 

24 respect to that pollutant’s contribution to global warming. 

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1 ‘‘SEC. 833. HAZARDOUS AIR POLLUTANTS. 

2 ‘‘No greenhouse gas may be added to the list of haz3 ardous air pollutants under section 112 unless such green4 house gas meets the listing criteria of section 112(b) inde5 pendent of its effects on global climate change. 

6 ‘‘SEC. 834. NEW SOURCE REVIEW. 

7 ‘‘The provisions of part C of title I shall not apply 

8 to a major emitting facility that is initially permitted or 

9 modified after January 1, 2009, on the basis of its emis10 sions of any greenhouse gas. 

11 ‘‘SEC. 835. TITLE V PERMITS. 

12 ‘‘Notwithstanding any provision of title III or V, no 

13 stationary source shall be required to apply for, or operate 

14 pursuant to, a permit under title V, solely because the 

15 source emits any greenhouse gases that are regulated solely 

16 because of their effect on global climate change.’’. 

17 SEC. 332. HFC REGULATION. 

18 (a) IN GENERAL.—Title VI of the Clean Air Act (42 

19 U.S.C. 7671 et seq.) (relating to stratospheric ozone protec20 tion) is amended by adding at the end the following: 

21 ‘‘SEC. 619. HYDROFLUOROCARBONS (HFCS). 

22 ‘‘(a) TREATMENT AS CLASS II, GROUP II SUB23 STANCES.—Except as otherwise provided in this section, 

24 hydrofluorocarbons shall be treated as class II substances 

25 for purposes of applying the provisions of this title. The 

26 Administrator shall establish two groups of class II submstockstill on PROD1PC66 with BILLS

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1 stances. Class II, group I substances shall include all 

2 hydrochlorofluorocarbons (HCFCs) listed pursuant to sec3 tion 602(b). Class II, group II substances shall include each 

4 of the following: 

5 ‘‘(1) Hydrofluorocarbon-23 (HFC-23). 

6 ‘‘(2) Hydrofluorocarbon-32 (HFC-32). 

7 ‘‘(3) Hydrofluorocarbon-41 (HFC-41). 

8 ‘‘(4) Hydrofluorocarbon-125 (HFC-125). 

9 ‘‘(5) Hydrofluorocarbon-134 (HFC-134). 

10 ‘‘(6) Hydrofluorocarbon-134a (HFC-134a). 

11 ‘‘(7) Hydrofluorocarbon-143 (HFC-143). 

12 ‘‘(8) Hydrofluorocarbon-143a (HFC-143a). 

13 ‘‘(9) Hydrofluorocarbon-152 (HFC-152). 

14 ‘‘(10) Hydrofluorocarbon-152a (HFC-152a). 

15 ‘‘(11) Hydrofluorocarbon-227ea (HFC-227ea). 

16 ‘‘(12) Hydrofluorocarbon-236cb (HFC-236cb). 

17 ‘‘(13) Hydrofluorocarbon-236ea (HFC-236ea). 

18 ‘‘(14) Hydrofluorocarbon-236fa (HFC-236fa). 

19 ‘‘(15) Hydrofluorocarbon-245ca (HFC-245ca). 

20 ‘‘(16) Hydrofluorocarbon-245fa (HFC-245fa). 

21 ‘‘(17) Hydrofluorocarbon-365mfc (HFC-365mfc). 

22 ‘‘(18) Hydrofluorocarbon-43-10mee (HFC-43- 

23 10mee). 

24 ‘‘(19) Hydrofluoroolefin-1234yf (HFO-1234yf). 

25 ‘‘(20) Hydrofluoroolefin-1234ze (HFO-1234ze). 

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1 Not later than 6 months after the date of enactment of this 

2 title, the Administrator shall publish an initial list of class 

3 II, group II substances, which shall include the substances 

4 listed in this subsection. The Administrator may add to the 

5 list of class II, group II substances any other substance used 

6 as a substitute for a class I or II substance if the Adminis7 trator determines that 1 metric ton of the substance makes 

8 the same or greater contribution to global warming over 

9 100 years as 1 metric ton of carbon dioxide. Within 24 

10 months after the date of enactment of this section, the Ad11 ministrator shall amend the regulations under this title (in12 cluding the regulations referred to in sections 603, 608, 609, 

13 610, 611, 612, and 613) to apply to class II, group II sub14 stances. 

15 ‘‘(b) CONSUMPTION AND PRODUCTION OF CLASS II, 

16 GROUP II SUBSTANCES.— 

17 ‘‘(1) IN GENERAL.— 

18 ‘‘(A) CONSUMPTION PHASE DOWN.—In the 

19 case of class II, group II substances, in lieu of 

20 applying section 605 and the regulations there21 under, the Administrator shall promulgate regu22 lations phasing down the consumption of class 

23 II, group II substances in the United States, and 

24 the importation of products containing any class 

25 II, group II substance, in accordance with this 

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1 subsection within 18 months after the date of en2 actment of this section. Effective January 1, 

3 2012, it shall be unlawful for any person to 

4 produce any class II, group II substance, import 

5 any class II, group II substance, or import any 

6 product containing any class II, group II sub7 stance without holding one consumption allow8 ance or one destruction offset credit for each car9 bon dioxide equivalent ton of the class II, group 

10 II substance. Any person who exports a class II, 

11 group II substance for which a consumption al12 lowance was retired may receive a refund of that 

13 allowance from the Administrator following the 

14 export. 

15 ‘‘(B) PRODUCTION.—If the United States 

16 becomes a party or otherwise adheres to a multi17 lateral agreement, including any amendment to 

18 the Montreal Protocol on Substances That De19 plete the Ozone Layer, that restricts the produc20 tion of class II, group II substances, the Admin21 istrator shall promulgate regulations establishing 

22 a baseline for the production of class II, group 

23 II substances in the United States and phasing 

24 down the production of class II, group II sub25 stances in the United States, in accordance with 

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1 such multilateral agreement and subject to the 

2 same exceptions and other provisions as are ap3 plicable to the phase down of consumption of 

4 class II, group II substances under this section 

5 (except that the Administrator shall not require 

6 a person who obtains production allowances 

7 from the Administrator to make payment for 

8 such allowances if the person is making payment 

9 for a corresponding quantity of consumption al10 lowances of the same vintage year). Upon the ef11 fective date of such regulations, it shall be un12 lawful for any person to produce any class II, 

13 group II substance without holding one con14 sumption allowance and one production allow15 ance, or one destruction offset credit, for each 

16 carbon dioxide equivalent ton of the class II, 

17 group II substance. 

18 ‘‘(C) INTEGRITY OF CAP.—To maintain the 

19 integrity of the class II, group II cap, the Ad20 ministrator may, through rulemaking, limit the 

21 percentage of each person’s compliance obligation 

22 that may be met through the use of destruction 

23 offset credits or banked allowances. 

24 ‘‘(D) COUNTING OF VIOLATIONS.—Each 

25 emission allowance or destruction offset credit 

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1 not held as required by this section shall be a 

2 separate violation of this section. 

3 ‘‘(2) SCHEDULE.—Pursuant to the regulations 

4 promulgated pursuant to paragraph (1), the number 

5 of class II, group II consumption allowances estab6 lished by the Administrator for each calendar year be7 ginning in 2012 shall be the following percentage of 

8 the baseline, as established by the Administrator pur9 suant to paragraph (3): 

‘‘Calendar Year Percent of Baseline 

2012 90 

2013 87.5 

2014 85 

2015 82.5 

2016 80 

2017 77.5 

2018 75 

2019 71 

2020 67 

2021 63 

2022 59 

2023 54 

2024 50 

2025 46 

2026 42 

2027 38 

2028 34 

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‘‘Calendar Year Percent of Baseline 

2029 30 

2030 25 

2031 21 

2032 17 

after 2032 15 

1 ‘‘(3) BASELINE.—(A) Within 12 months after the 

2 date of enactment of this section, the Administrator 

3 shall promulgate regulations to establish the baseline 

4 for purposes of paragraph (2). The baseline shall be 

5 the sum, expressed in tons of carbon dioxide equiva6 lents, of— 

7 ‘‘(i) the annual average consumption of all 

8 class II substances in calendar years 2004, 2005, 

9 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 

15 than 370 million metric tons of carbon dioxide 

16 equivalents, then the Administrator shall establish the 

17 baseline at 370 million metric tons of carbon dioxide 

18 equivalents. 

19 ‘‘(C) Notwithstanding subparagraph (A), if the 

20 Administrator determines that the baseline is lower 

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1 than 280 million metric tons of carbon dioxide 

2 equivalents, then the Administrator shall establish the 

3 baseline at 280 million metric tons of carbon dioxide 

4 equivalents. 

5 ‘‘(4) DISTRIBUTION OF ALLOWANCES.— 

6 ‘‘(A) IN GENERAL.—Pursuant to the regula7 tions promulgated under paragraph (1), for each 

8 calendar year beginning in 2012, the Adminis9 trator shall sell consumption allowances in ac10 cordance with this paragraph. 

11 ‘‘(B) ESTABLISHMENT OF POOLS.—The Ad12 ministrator shall establish two allowance pools. 

13 Eighty percent of the consumption allowances 

14 available for a calendar year shall be placed in 

15 the producer-importer pool, and 20 percent of the 

16 consumption allowances available for a calendar 

17 year shall be placed in the secondary pool. 

18 ‘‘(C) PRODUCER-IMPORTER POOL.— 

19 ‘‘(i) AUCTION.—(I) For each calendar 

20 year, the Administrator shall offer for sale 

21 at auction the following percentage of the 

22 consumption allowances in the producer-im23 porter pool: 

‘‘Calendar Year Percent Available for Auction 

2012 10 

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‘‘Calendar Year Percent Available for Auction 

2013 20 

2014 30 

2015 40 

2016 50 

2017 60 

2018 70 

2019 80 

2020 and thereafter 90 

1 ‘‘(II) Any person who produced or im2 ported any class II substance during cal3 endar year 2004, 2005, or 2006 may par4 ticipate in the auction. No other persons 

5 may participate in the auction unless per6 mitted to do so pursuant to subclause (III). 

7 ‘‘(III) Not later than three years after 

8 the date of the initial auction and from 

9 time to time thereafter, the Administrator 

10 shall determine through rulemaking whether 

11 any persons who did not produce or import 

12 a class II substance during calendar year 

13 2004, 2005, or 2006 will be permitted to 

14 participate in future auctions. The Admin15 istrator shall base this determination on the 

16 duration, consistency, and scale of such per17 son’s purchases of consumption allowances 

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1 in the secondary pool under subparagraph 

2 (D), as well as economic or technical hard3 ship and other factors deemed relevant by 

4 the Administrator. 

5 ‘‘(IV) The Administrator shall set a 

6 minimum bid per consumption allowance of 

7 the following: 

8 ‘‘(aa) For vintage year 2012, 

9 $1.00. 

10 ‘‘(bb) For vintage year 2013, 

11 $1.20. 

12 ‘‘(cc) For vintage year 2014, 

13 $1.40. 

14 ‘‘(dd) For vintage year 2015, 

15 $1.60. 

16 ‘‘(ee) For vintage year 2016, 

17 $1.80. 

18 ‘‘(ff) For vintage year 2017, 

19 $2.00. 

20 ‘‘(gg) For vintage year 2018 and 

21 thereafter, $2.00 adjusted for inflation 

22 after vintage year 2017 based upon the 

23 producer price index as published by 

24 the Department of Commerce. 

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1 ‘‘(ii) NON-AUCTION SALE.—(I) For 

2 each calendar year, as soon as practicable 

3 after auction, the Administrator shall offer 

4 for sale the remaining consumption allow5 ances in the producer-importer pool at the 

6 following prices: 

7 ‘‘(aa) A fee of $1.00 per vintage 

8 year 2012 allowance. 

9 ‘‘(bb) A fee of $1.20 per vintage 

10 year 2013 allowance. 

11 ‘‘(cc) A fee of $1.40 per vintage 

12 year 2014 allowance. 

13 ‘‘(dd) For each vintage year 2015 

14 allowance, a fee equal to the average of 

15 $1.10 and the auction clearing price 

16 for vintage year 2014 allowances. 

17 ‘‘(ee) For each vintage year 2016 

18 allowance, a fee equal to the average of 

19 $1.30 and the auction clearing price 

20 for vintage year 2015 allowances. 

21 ‘‘(ff) For each vintage year 2017 

22 allowance, a fee equal to the average of 

23 $1.40 and the auction clearing price 

24 for vintage year 2016 allowances. 

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1 ‘‘(gg) For each allowance of vin2 tage year 2018 and subsequent vintage 

3 years, a fee equal to the auction clear4 ing price for that vintage year. 

5 ‘‘(II) The Administrator shall offer to 

6 sell the remaining consumption allowances 

7 in the producer-importer pool to producers 

8 of class II, group II substances and import9 ers of class II, group II substances in pro10 portion to their relative allocation share. 

11 ‘‘(III) Such allocation share for such 

12 sale shall be determined by the Adminis13 trator using such producer’s or importer’s 

14 annual average data on class II substances 

15 from calendar years 2004, 2005, and 2006, 

16 on a carbon dioxide equivalent basis, and— 

17 ‘‘(aa) shall be based on a pro18 ducer’s production, plus importation, 

19 plus acquisitions and purchases from 

20 persons who produced class II sub21 stances in the United States during 

22 calendar years 2004, 2005, or 2006, 

23 less exportation, less transfers and sales 

24 to persons who produced class II sub25 stances in the United States during 

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1 calendar years 2004, 2005, or 2006; 

2 and 

3 ‘‘(bb) for an importer of class II 

4 substances that did not produce in the 

5 United States any class II substance 

6 during calendar years 2004, 2005, and 

7 2006, shall be based on the importer’s 

8 importation less exportation. 

9 For purposes of item (aa), the Adminis10 trator shall account for 100 percent of class 

11 II, group II substances and 60 percent of 

12 class II, group I substances. For purposes of 

13 item (bb), the Administrator shall account 

14 for 100 percent of class II, group II sub15 stances and 100 percent of class II, group 

16 I substances. 

17 ‘‘(IV) Any consumption allowances 

18 made available for nonauction sale to a spe19 cific producer or importer of class II, group 

20 II substances but not purchased by the spe21 cific producer or importer shall be made 

22 available for sale to any producer or im23 porter of class II substances during cal24 endar years 2004, 2005, or 2006. If demand 

25 for such consumption allowances exceeds 

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1 supply of such consumption allowances, the 

2 Administrator shall develop and utilize cri3 teria for the sale of such consumption allow4 ances that may include pro rata shares, his5 toric production and importation, economic 

6 or technical hardship, or other factors 

7 deemed relevant by the Administrator. If 

8 the supply of such consumption allowances 

9 exceeds demand, the Administrator may 

10 offer such consumption allowances for sale 

11 in the secondary pool as set forth in sub12 paragraph (D). 

13 ‘‘(D) SECONDARY POOL.—(i) For each cal14 endar year, as soon as practicable after the auc15 tion required in subparagraph (C), the Adminis16 trator shall offer for sale the consumption allow17 ances in the secondary pool at the prices listed 

18 in subparagraph (C)(ii). 

19 ‘‘(ii) The Administrator shall accept appli20 cations for purchase of secondary pool consump21 tion allowances from— 

22 ‘‘(I) importers of products containing 

23 class II, group II substances; 

24 ‘‘(II) persons who purchased any class 

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1 ducer or importer of class II, group II sub2 stances for use in a product containing a 

3 class II, group II substance, a manufac4 turing process, or a reclamation process; 

5 ‘‘(III) persons who did not produce or 

6 import a class II substance during calendar 

7 year 2004, 2005, or 2006, but who the Ad8 ministrator determines have subsequently 

9 taken significant steps to produce or import 

10 a substantial quantity of any class II, 

11 group II substance; and 

12 ‘‘(IV) persons who produced or im13 ported any class II substance during cal14 endar year 2004, 2005, or 2006. 

15 ‘‘(iii) If the supply of consumption allow16 ances in the secondary pool equals or exceeds the 

17 demand for consumption allowances in the sec18 ondary pool as presented in the applications for 

19 purchase, the Administrator shall sell the con20 sumption allowances in the secondary pool to the 

21 applicants in the amounts requested in the ap22 plications for purchase. Any consumption allow23 ances in the secondary pool not purchased in a 

24 calendar year may be rolled over and added to 

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1 the quantity available in the secondary pool in 

2 the following year. 

3 ‘‘(iv) If the demand for consumption allow4 ances in the secondary pool as presented in the 

5 applications for purchase exceeds the supply of 

6 consumption allowances in the secondary pool, 

7 the Administrator shall sell the consumption al8 lowances as follows: 

9 ‘‘(I) The Administrator shall first sell 

10 the consumption allowances in the sec11 ondary pool to any importers of products 

12 containing class II, group II substances in 

13 the amounts requested in their applications 

14 for purchase. If the demand for such con15 sumption allowances exceeds supply of such 

16 consumption allowances, the Administrator 

17 shall develop and utilize criteria for the sale 

18 of such consumption allowances among im19 porters of products containing class II, 

20 group II substances that may include pro 

21 rata shares, historic importation, economic 

22 or technical hardship, or other factors 

23 deemed relevant by the Administrator. 

24 ‘‘(II) The Administrator shall next sell 

25 any remaining consumption allowances to 

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1 persons identified in subclauses (II) and 

2 (III) of clause (ii) in the amounts requested 

3 in their applications for purchase. If the de4 mand for such consumption allowances ex5 ceeds remaining supply of such consump6 tion allowances, the Administrator shall de7 velop and utilize criteria for the sale of such 

8 consumption allowances among subclauses 

9 (II) and (III) applicants that may include 

10 pro rata shares, historic use, economic or 

11 technical hardship, or other factors deemed 

12 relevant by the Administrator. 

13 ‘‘(III) The Administrator shall then 

14 sell any remaining consumption allowances 

15 to persons who produced or imported any 

16 class II substance during calendar year 

17 2004, 2005, or 2006 in the amounts re18 quested in their applications for purchase. 

19 If demand for such consumption allowances 

20 exceeds remaining supply of such consump21 tion allowances, the Administrator shall de22 velop and utilize criteria for the sale of such 

23 consumption allowances that may include 

24 pro rata shares, historic production and im25 portation, economic or technical hardship, 

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1 or other factors deemed relevant by the Ad2 ministrator. 

3 ‘‘(IV) Each person who purchases con4 sumption allowances in a non-auction sale 

5 under this subparagraph shall be required 

6 to disclose the person or entity sponsoring 

7 or benefitting from the purchases if such 

8 person or entity is, in whole or in part, 

9 other than the purchaser or the purchaser’s 

10 employer. 

11 ‘‘(E) DISCRETION TO WITHHOLD ALLOW12 ANCES.—Nothing in this paragraph prevents the 

13 Administrator from exercising discretion to 

14 withhold and retire consumption allowances that 

15 would otherwise be available for auction or non16 auction sale. Not later than 18 months after the 

17 date of enactment of this section, the Adminis18 trator shall promulgate regulations establishing 

19 criteria for withholding and retiring consump20 tion allowances. 

21 ‘‘(5) BANKING.—A consumption allowance or de22 struction offset credit may be used to meet the compli23 ance obligation requirements of paragraph (1) in— 

24 ‘‘(A) the vintage year for the allowance or 

25 destruction offset credit; or 

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1 ‘‘(B) any calendar year subsequent to the 

2 vintage year for the allowance or destruction off3 set credit. 

4 ‘‘(6) AUCTIONS.— 

5 ‘‘(A) INITIAL REGULATIONS.—Not later 

6 than 18 months after the date of enactment of 

7 this section, the Administrator shall promulgate 

8 regulations governing the auction of allowances 

9 under this section. Such regulations shall include 

10 the following requirements: 

11 ‘‘(i) FREQUENCY; FIRST AUCTION.— 

12 Auctions shall be held one time per year at 

13 regular intervals, with the first auction to 

14 be held no later than October 31, 2011. 

15 ‘‘(ii) AUCTION FORMAT.—Auctions 

16 shall follow a single-round, sealed-bid, uni17 form price format. 

18 ‘‘(iii) FINANCIAL ASSURANCE.—The 

19 Administrator may establish financial as20 surance requirements to ensure that auction 

21 participants can and will perform on their 

22 bids. 

23 ‘‘(iv) DISCLOSURE OF BENEFICIAL

24 OWNERSHIP.—Each bidder in the auction 

25 shall be required to disclose the person or 

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1 entity sponsoring or benefitting from the 

2 bidder’s participation in the auction if such 

3 person or entity is, in whole or in part, 

4 other than the bidder or the bidder’s em5 ployer. 

6 ‘‘(v) PUBLICATION OF INFORMATION.— 

7 After the auction, the Administrator shall, 

8 in a timely fashion, publish the number of 

9 bidders, number of winning bidders, the 

10 quantity of allowances sold, and the auction 

11 clearing price. 

12 ‘‘(vi) BIDDING LIMITS IN 2012.—In the 

13 vintage year 2012 auction, no auction par14 ticipant may, directly or in concert with 

15 another participant, bid for or purchase 

16 more allowances offered for sale at the auc17 tion than the greater of— 

18 ‘‘(I) the number of allowances 

19 which, when added to the number of 

20 allowances available for purchase by 

21 the participant in the producer-im22 porter pool non-auction sale, would 

23 equal the participant’s annual average 

24 consumption of class II, group II submstockstill on PROD1PC66 with BILLS

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1 stances in calendar years 2004, 2005, 

2 and 2006; or 

3 ‘‘(II) the number of allowances 

4 equal to the product of— 

5 ‘‘(aa) 1.20 multiplied by the 

6 participant’s allocation share of 

7 the producer-importer pool non8 auction sale as determined under 

9 paragraph (4)(C)(ii); and 

10 ‘‘(bb) the number of vintage 

11 year 2012 allowances offered at 

12 auction. 

13 ‘‘(vii) BIDDING LIMITS IN 2013.—In the 

14 vintage year 2013 auction, no auction par15 ticipant may, directly or in concert with 

16 another participant, bid for or purchase 

17 more allowances offered for sale at the auc18 tion than the product of— 

19 ‘‘(I) 1.15 multiplied by the ratio 

20 of the total number of vintage year 

21 2012 allowances purchased by the par22 ticipant from the auction and from the 

23 producer-importer pool non-auction 

24 sale to the total number of vintage year 

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1 2012 allowances in the producer-im2 porter pool; and 

3 ‘‘(II) the number of vintage year 

4 2013 allowances offered at auction. 

5 ‘‘(viii) BIDDING LIMITS IN SUBSE6 QUENT YEARS.—In the auctions for vintage 

7 year 2014 and subsequent vintage years, no 

8 auction participant may, directly or in 

9 concert with another participant, bid for or 

10 purchase more allowances offered for sale at 

11 the auction than the product of— 

12 ‘‘(I) 1.15 multiplied by the ratio 

13 of the highest number of allowances 

14 held by the participant in any of the 

15 three prior vintage years to meet its 

16 compliance obligation under para17 graph (1) to the total number of allow18 ances in the producer-importer pool for 

19 such vintage year; and 

20 ‘‘(II) the number of allowances of21 fered at auction for that vintage year. 

22 ‘‘(ix) OTHER REQUIREMENTS.—The 

23 Administrator may include in the regula24 tions such other requirements or provisions 

25 as the Administrator considers necessary to 

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1 promote effective, efficient, transparent, and 

2 fair administration of auctions under this 

3 section. 

4 ‘‘(B) REVISION OF REGULATIONS.—The Ad5 ministrator may, at any time, revise the initial 

6 regulations promulgated under subparagraph 

7 (A) based on the Administrator’s experience in 

8 administering allowance auctions. Such revised 

9 regulations need not meet the requirements iden10 tified in subparagraph (A) if the Administrator 

11 determines that an alternative auction design 

12 would be more effective, taking into account fac13 tors including costs of administration, trans14 parency, fairness, and risks of collusion or ma15 nipulation. In determining whether and how to 

16 revise the initial regulations under this para17 graph, the Administrator shall not consider 

18 maximization of revenues to the Federal Govern19 ment. 

20 ‘‘(C) DELEGATION OR CONTRACT.—Pursu21 ant to regulations under this section, the Admin22 istrator may, by delegation or contract, provide 

23 for the conduct of auctions under the Adminis24 trator’s supervision by other departments or 

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1 agencies of the Federal Government or by non2 governmental agencies, groups, or organizations. 

3 ‘‘(7) PAYMENTS FOR ALLOWANCES.— 

4 ‘‘(A) INITIAL REGULATIONS.—Not later 

5 than 18 months after the date of enactment of 

6 this section, the Administrator shall promulgate 

7 regulations governing the payment for allow8 ances purchased in auction and non-auction 

9 sales under this section. Such regulations shall 

10 include the requirement that, in the event that 

11 full payment for purchased allowances is not 

12 made on the date of purchase, equal payments 

13 shall be made one time per calendar quarter 

14 with all payments for allowances of a vintage 

15 year made by the end of that vintage year. 

16 ‘‘(B) REVISION OF REGULATIONS.— The 

17 Administrator may, at any time, revise the ini18 tial regulations promulgated under subpara19 graph (A) based on the Administrator’s experi20 ence in administering collection of payments. 

21 Such revised regulations need not meet the re22 quirements identified in subparagraph (A) if the 

23 Administrator determines that an alternative 

24 payment structure or frequency would be more 

25 effective, taking into account factors including 

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1 cost of administration, transparency, and fair2 ness. In determining whether and how to revise 

3 the initial regulations under this paragraph, the 

4 Administrator shall not consider maximization 

5 of revenues to the Federal Government. 

6 ‘‘(C) PENALTIES FOR NON-PAYMENT.—Fail7 ure to pay for purchased allowances in accord8 ance with the regulations promulgated pursuant 

9 to this paragraph shall be a violation of the re10 quirements of subsection (b). Section 113(c)(3) 

11 shall apply in the case of any person who know12 ingly fails to pay for purchased allowances in 

13 accordance with the regulations promulgated 

14 pursuant to this paragraph. 

15 ‘‘(8) IMPORTED PRODUCTS.—If the United States 

16 becomes a party or otherwise adheres to a multilateral 

17 agreement, including any amendment to the Montreal 

18 Protocol on Substances That Deplete the Ozone Layer, 

19 which restricts the production and consumption of 

20 class II, group II substances— 

21 ‘‘(A) as of the date on which such agreement 

22 or amendment enters into force, it shall no 

23 longer be unlawful for any person to import 

24 from a party to such agreement or amendment 

25 any product containing any class II, group II 

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1 substance whose production and consumption are 

2 regulated by such agreement or amendment with3 out holding one consumption allowance or one 

4 destruction offset credit for each carbon dioxide 

5 equivalent ton of the class II, group II substance; 

6 ‘‘(B) the Administrator shall promulgate 

7 regulations within 12 months of the date the 

8 United States becomes a party or otherwise ad9 heres to such agreement or amendment, or the 

10 date on which such agreement or amendment en11 ters into force, whichever is later, to establish a 

12 new baseline for purposes of paragraph (2), 

13 which new baseline shall be the original baseline 

14 less the carbon dioxide equivalent of the annual 

15 average quantity of any class II substances regu16 lated by such agreement or amendment con17 tained in products imported from parties to such 

18 agreement or amendment in calendar years 

19 2004, 2005, and 2006; 

20 ‘‘(C) as of the date on which such agreement 

21 or amendment enters into force, no person im22 porting any product containing any class II, 

23 group II substance may, directly or in concert 

24 with another person, purchase any consumption 

25 allowances for sale by the Administrator for the 

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1 importation of products from a party to such 

2 agreement or amendment that contain any class 

3 II, group II substance restricted by such agree4 ment or amendment; and 

5 ‘‘(D) the Administrator may adjust the two 

6 allowance pools established in paragraph (4) 

7 such that up to 90 percent of the consumption 

8 allowances available for a calendar year are 

9 placed in the producer-importer pool with the re10 maining consumption allowances placed in the 

11 secondary pool. 

12 ‘‘(9) OFFSETS.— 

13 ‘‘(A) CHLOROFLUOROCARBON DESTRUC14 TION.—Within 18 months after the date of enact15 ment of this section, the Administrator shall pro16 mulgate regulations to provide for the issuance of 

17 offset credits for the destruction, in the calendar 

18 year 2012 or later, of chlorofluorocarbons in the 

19 United States. The Administrator shall establish 

20 and distribute to the destroying entity a quan21 tity of destruction offset credits equal to 0.8 

22 times the number of tons of carbon dioxide 

23 equivalents of reduction achieved through the de24 struction. No destruction offset credits shall be 

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1 established for the destruction of a class II, group 

2 II substance. 

3 ‘‘(B) DEFINITION.—For purposes of this 

4 paragraph, the term ‘destruction’ means the con5 version of a substance by thermal, chemical, or 

6 other means to another substance with little or 

7 no carbon dioxide equivalent value and no ozone 

8 depletion potential. 

9 ‘‘(C) REGULATIONS.—The regulations pro10 mulgated under this paragraph shall include 

11 standards and protocols for project eligibility, 

12 certification of destroyers, monitoring, tracking, 

13 destruction efficiency, quantification of project 

14 and baseline emissions and carbon dioxide equiv15 alent value, and verification. The Administrator 

16 shall ensure that destruction offset credits rep17 resent real and verifiable destruction of 

18 chlorofluorocarbons or other class I or class II, 

19 group I, substances authorized under subpara20 graph (D). 

21 ‘‘(D) OTHER SUBSTANCES.—The Adminis22 trator may promulgate regulations to add to the 

23 list of class I and class II, group I, substances 

24 that may be destroyed for destruction offset cred25 its, taking into account a candidate substance’s 

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1 carbon dioxide equivalent value, ozone depletion 

2 potential, prevalence in banks in the United 

3 States, and emission rates, as well as the need 

4 for additional cost containment under the class 

5 II, group II cap and the integrity of the class II, 

6 group II cap. The Administrator shall not add 

7 a class I or class II, group I substance to the list 

8 if the consumption of the substance has not been 

9 completely phased-out internationally (except for 

10 essential use exemptions or other similar exemp11 tions) pursuant to the Montreal Protocol. 

12 ‘‘(E) EXTENSION OF OFFSETS.—(i) At any 

13 time after the Administrator promulgates regula14 tions pursuant to subparagraph (A), the Admin15 istrator may add the types of destruction projects 

16 authorized to receive destruction offset credits 

17 under this paragraph to the list of types of 

18 projects eligible for offset credits under section 

19 733. Nothing in this paragraph shall affect the 

20 issuance of offset credits under section 740. 

21 ‘‘(ii) The Administrator shall not make the 

22 addition under clause (i) unless the Adminis23 trator finds that insufficient destruction is occur24 ring or is projected to occur under this paramstockstill on PROD1PC66 with BILLS

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1 graph and that the addition would increase de2 struction. 

3 ‘‘(iii) In no event shall more than one de4 struction offset credit be issued under title VII 

5 and this section for the destruction of the same 

6 quantity of a substance. 

7 ‘‘(10) LEGAL STATUS OF ALLOWANCES AND

8 CREDITS.—None of the following constitutes a prop9 erty right: 

10 ‘‘(A) A production or consumption allow11 ance. 

12 ‘‘(B) A destruction offset credit. 

13 ‘‘(c) DEADLINES FOR COMPLIANCE.—Notwithstanding 

14 the deadlines specified for class II substances in sections 

15 608, 609, 610, 612, and 613 that occur prior to January 

16 1, 2009, the deadline for promulgating regulations under 

17 those sections for class II, group II substances shall be Janu18 ary 1, 2012. 

19 ‘‘(d) EXCEPTIONS FOR ESSENTIAL USES.—Notwith20 standing any phase down of production and consumption 

21 required by this section, to the extent consistent with any 

22 applicable multilateral agreement to which the United 

23 States is a party or otherwise adheres, the Administrator 

24 may provide the following exceptions for essential uses: 

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1 ‘‘(1) MEDICAL DEVICES.—The Administrator, 

2 after notice and opportunity for public comment, and 

3 in consultation with the Commissioner of the Food 

4 and Drug Administration, may provide an exception 

5 for the production and consumption of class II, group 

6 II substances solely for use in medical devices. 

7 ‘‘(2) AVIATION SAFETY.—The Administrator, 

8 after notice and opportunity for public comment, may 

9 authorize the production and consumption of limited 

10 quantities of class II, group II substances solely for 

11 the purposes of aviation safety if the Administrator 

12 of the Federal Aviation Administration, in consulta13 tion with the Administrator, determines that no safe 

14 and effective substitute has been developed and that 

15 such authorization is necessary for aviation safety 

16 purposes. 

17 ‘‘(e) DEVELOPING COUNTRIES.—Notwithstanding any 

18 phase down of production required by this section, the Ad19 ministrator, after notice and opportunity for public com20 ment, may authorize the production of limited quantities 

21 of class II, group II substances in excess of the amounts 

22 otherwise allowable under this section solely for export to, 

23 and use in, developing countries. Any production author24 ized under this subsection shall be solely for purposes of sat25 isfying the basic domestic needs of such countries as promstockstill on PROD1PC66 with BILLS

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1 vided in applicable international agreements, if any, to 

2 which the United States is a party or otherwise adheres. 

3 ‘‘(f) NATIONAL SECURITY; FIRE SUPPRESSION, ETC.— 

4 The provisions of subsection (f) and paragraphs (1) and 

5 (2) of subsection (g) of section 604 shall apply to any con6 sumption and production phase down of class II, group II 

7 substances in the same manner and to the same extent, con8 sistent with any applicable international agreement to 

9 which the United States is a party or otherwise adheres, 

10 as such provisions apply to the substances specified in such 

11 subsection. 

12 ‘‘(g) ACCELERATED SCHEDULE.—In lieu of section 

13 606, the provisions of paragraphs (1), (2), and (3) of this 

14 subsection shall apply in the case of class II, group II sub15 stances. 

16 ‘‘(1) IN GENERAL.—The Administrator shall pro17 mulgate initial regulations not later than 18 months 

18 after the date of enactment of this section, and revised 

19 regulations any time thereafter, which establish a 

20 schedule for phasing down the consumption (and, if 

21 the condition in subsection (b)(1)(B) is met, the pro22 duction) of class II, group II substances that is more 

23 stringent than the schedule set forth in this section if, 

24 based on the availability of substitutes, the Adminis25 trator determines that such more stringent schedule is 

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1 practicable, taking into account technological 

2 achievability, safety, and other factors the Adminis3 trator deems relevant, or if the Montreal Protocol, or 

4 any applicable international agreement to which the 

5 United States is a party or otherwise adheres, is 

6 modified or established to include a schedule or other 

7 requirements to control or reduce production, con8 sumption, or use of any class II, group II substance 

9 more rapidly than the applicable schedule under this 

10 section. 

11 ‘‘(2) PETITION.—Any person may submit a peti12 tion to promulgate regulations under this subsection 

13 in the same manner and subject to the same proce14 dures as are provided in section 606(b). 

15 ‘‘(3) INCONSISTENCY.—If the Administrator de16 termines that the provisions of this section regarding 

17 banking, allowance rollover, or destruction offset cred18 its create a significant potential for inconsistency 

19 with the requirements of any applicable international 

20 agreement to which the United States is a party or 

21 otherwise adheres, the Administrator may promulgate 

22 regulations restricting the availability of banking, al23 lowance rollover, or destruction offset credits to the ex24 tent necessary to avoid such inconsistency. 

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1 ‘‘(h) EXCHANGE.—Section 607 shall not apply in the 

2 case of class II, group II substances. Production and con3 sumption allowances for class II, group II substances may 

4 be freely exchanged or sold but may not be converted into 

5 allowances for class II, group I substances. 

6 ‘‘(i) LABELING.—(1) In applying section 611 to prod7 ucts containing or manufactured with class II, group II 

8 substances, in lieu of the words ‘destroying ozone in the 

9 upper atmosphere’ on labels required under section 611 

10 there shall be substituted the words ‘contributing to global 

11 warming’. 

12 ‘‘(2) The Administrator may, through rulemaking, ex13 empt from the requirements of section 611 products con14 taining or manufactured with class II, group II substances 

15 determined to have little or no carbon dioxide equivalent 

16 value compared to other substances used in similar prod17 ucts. 

18 ‘‘(j) NONESSENTIAL PRODUCTS.—For the purposes of 

19 section 610, class II, group II substances shall be regulated 

20 under section 610(b), except that in applying section 610(b) 

21 the word ‘hydrofluorocarbon’ shall be substituted for the 

22 word ‘chlorofluorocarbon’ and the term ‘class II, group II’ 

23 shall be substituted for the term ‘class I’. Class II, group 

24 II substances shall not be subject to the provisions of section 

25 610(d). 

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1 ‘‘(k) INTERNATIONAL TRANSFERS.—In the case of class 

2 II, group II substances, in lieu of sections 616(a) and 

3 616(b), this subsection shall apply. To the extent consistent 

4 with any applicable international agreement to which the 

5 United States is a party or otherwise adheres, including 

6 any amendment to the Montreal Protocol, the United States 

7 may engage in transfers with other parties to such agree8 ment or amendment under the following conditions: 

9 ‘‘(1) The United States may transfer production 

10 allowances to another party to such agreement or 

11 amendment if, at the time of the transfer, the Admin12 istrator establishes revised production limits for the 

13 United States accounting for the transfer in accord14 ance with regulations promulgated pursuant to this 

15 subsection. 

16 ‘‘(2) The United States may acquire production 

17 allowances from another party to such agreement or 

18 amendment if, at the time of the transfer, the Admin19 istrator finds that the other party has revised its do20 mestic production limits in the same manner as pro21 vided with respect to transfers by the United States 

22 in the regulations promulgated pursuant to this sub23 section. 

24 ‘‘(l) RELATIONSHIP TO OTHER LAWS.— 

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1 ‘‘(1) STATE LAWS.—For purposes of section 116, 

2 the requirements of this section for class II, group II 

3 substances shall be treated as requirements for the 

4 control and abatement of air pollution. 

5 ‘‘(2) MULTILATERAL AGREEMENTS.—Section 614 

6 shall apply to the provisions of this section con7 cerning class II, group II substances, except that for 

8 the words ‘Montreal Protocol’ there shall be sub9 stituted the words ‘Montreal Protocol, or any applica10 ble multilateral agreement to which the United States 

11 is a party or otherwise adheres that restricts the pro12 duction or consumption of class II, group II sub13 stances,’ and for the words ‘Article 4 of the Montreal 

14 Protocol’ there shall be substituted ‘any provision of 

15 such multilateral agreement regarding trade with 

16 non-parties’. 

17 ‘‘(3) FEDERAL FACILITIES.—For purposes of sec18 tion 118, the requirements of this section for class II, 

19 group II substances and corresponding State, inter20 state, and local requirements, administrative author21 ity, and process and sanctions shall be treated as re22 quirements for the control and abatement of air pollu23 tion within the meaning of section 118. 

24 ‘‘(m) CARBON DIOXIDE EQUIVALENT VALUE.—(1) In 

25 lieu of section 602(e), the provisions of this subsection shall 

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1 apply in the case of class II, group II substances. Simulta2 neously with establishing the list of class II, group II sub3 stances, and simultaneously with any addition to that list, 

4 the Administrator shall publish the carbon dioxide equiva5 lent value of each listed class II, group II substance, based 

6 on a determination of the number of metric tons of carbon 

7 dioxide that makes the same contribution to global warming 

8 over 100 years as 1 metric ton of each class II, group II 

9 substance. 

10 ‘‘(2) Not later than February 1, 2017, and not less 

11 than every 5 years thereafter, the Administrator shall— 

12 ‘‘(A) review, and if appropriate, revise the car13 bon dioxide equivalent values established for class II, 

14 group II substances based on a determination of the 

15 number of metric tons of carbon dioxide that makes 

16 the same contributions to global warming over 100 

17 years as 1 metric ton of each class II, group II sub18 stance; and 

19 ‘‘(B) publish in the Federal Register the results 

20 of that review and any revisions. 

21 ‘‘(3) A revised determination published in the Federal 

22 Register under paragraph (2)(B) shall take effect for pro23 duction of class II, group II substances, consumption of 

24 class II, group II substances, and importation of products 

25 containing class II, group II substances starting on Janumstockstill on PROD1PC66 with BILLS

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1 ary 1 of the first calendar year starting at least 9 months 

2 after the date on which the revised determination was pub3 lished. 

4 ‘‘(4) The Administrator may decrease the frequency of 

5 review and revision under paragraph (2) if the Adminis6 trator determines that such decrease is appropriate in order 

7 to synchronize such review and revisions with any similar 

8 review process carried out pursuant to the United Nations 

9 Framework Convention on Climate Change, an agreement 

10 negotiated under that convention, The Vienna Convention 

11 for the Protection of the Ozone Layer, or an agreement nego12 tiated under that convention, except that in no event shall 

13 the Administrator carry out such review and revision any 

14 less frequently than every 10 years. 

15 ‘‘(n) REPORTING REQUIREMENTS.—In lieu of sub16 sections (b) and (c) of section 603, paragraphs (1) and (2) 

17 of this subsection shall apply in the case of class II, group 

18 II substances: 

19 ‘‘(1) IN GENERAL.—On a quarterly basis, or 

20 such other basis (not less than annually) as deter21 mined by the Administrator, each person who pro22 duced, imported, or exported a class II, group II sub23 stance, or who imported a product containing a class 

24 II, group II substance, shall file a report with the Ad25 ministrator setting forth the carbon dioxide equivamstockstill on PROD1PC66 with BILLS

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1 lent amount of the substance that such person pro2 duced, imported, or exported, as well as the amount 

3 that was contained in products imported by that per4 son, during the preceding reporting period. Each such 

5 report shall be signed and attested by a responsible of6 ficer. If all other reporting is complete, no such report 

7 shall be required from a person after April 1 of the 

8 calendar year after such person permanently ceases 

9 production, importation, and exportation of the sub10 stance, as well as importation of products containing 

11 the substance, and so notifies the Administrator in 

12 writing. If the United States becomes a party or oth13 erwise adheres to a multilateral agreement, including 

14 any amendment to the Montreal Protocol on Sub15 stances That Deplete the Ozone Layer, that restricts 

16 the production and consumption of class II, group II 

17 substances, then, if all other reporting is complete, no 

18 such report shall be required from a person with re19 spect to importation from parties to such agreement 

20 or amendment of products containing any class II, 

21 group II substance restricted by such agreement or 

22 amendment, after April 1 of the calendar year fol23 lowing the year during which such agreement or 

24 amendment enters into force. 

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1 ‘‘(2) BASELINE REPORTS FOR CLASS II, GROUP II

2 SUBSTANCES.— 

3 ‘‘(A) IN GENERAL.—Unless such informa4 tion has been previously reported to the Admin5 istrator, on the date on which the first report 

6 under paragraph (1) of this subsection is re7 quired to be filed, each person who produced, im8 ported, or exported a class II, group II sub9 stance, or who imported a product containing a 

10 class II substance, (other than a substance added 

11 to the list of class II, group II substances after 

12 the publication of the initial list of such sub13 stances under this section), shall file a report 

14 with the Administrator setting forth the amount 

15 of such substance that such person produced, im16 ported, exported, or that was contained in prod17 ucts imported by that person, during each of cal18 endar years 2004, 2005, and 2006. 

19 ‘‘(B) PRODUCERS.—In reporting under sub20 paragraph (A), each person who produced in the 

21 United States a class II substance during cal22 endar years 2004, 2005, or 2006 shall— 

23 ‘‘(i) report all acquisitions or pur24 chases of class II substances during each of 

25 calendar years 2004, 2005, and 2006 from 

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1 all other persons who produced in the 

2 United States a class II substance during 

3 calendar years 2004, 2005, or 2006, and 

4 supply evidence of such acquisitions and 

5 purchases as deemed necessary by the Ad6 ministrator; and 

7 ‘‘(ii) report all transfers or sales of 

8 class II substances during each of calendar 

9 years 2004, 2005, and 2006 to all other per10 sons who produced in the United States a 

11 class II substance during calendar years 

12 2004, 2005, or 2006, and supply evidence of 

13 such transfers and sales as deemed nec14 essary by the Administrator. 

15 ‘‘(C) ADDED SUBSTANCES.—In the case of a 

16 substance added to the list of class II, group II 

17 substances after publication of the initial list of 

18 such substances under this section, each person 

19 who produced, imported, exported, or imported 

20 products containing such substance in calendar 

21 year 2004, 2005, or 2006 shall file a report with 

22 the Administrator within 180 days after the date 

23 on which such substance is added to the list, set24 ting forth the amount of the substance that such 

25 person produced, imported, and exported, as well 

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1 as the amount that was contained in products 

2 imported by that person, in calendar years 2004, 

3 2005, and 2006. 

4 ‘‘(o) STRATOSPHERIC OZONE AND CLIMATE PROTEC5 TION FUND.— 

6 ‘‘(1) IN GENERAL.—There is established in the 

7 Treasury of the United States a Stratospheric Ozone 

8 and Climate Protection Fund. 

9 ‘‘(2) DEPOSITS.—The Administrator shall de10 posit all proceeds from the auction and non-auction 

11 sale of allowances under this section into the Strato12 spheric Ozone and Climate Protection Fund. 

13 ‘‘(3) USE.—Amounts deposited into the Strato14 spheric Ozone and Climate Protection Fund shall be 

15 available, subject to appropriations, exclusively for 

16 the following purposes: 

17 ‘‘(A) RECOVERY, RECYCLING, AND RECLAMA18 TION.—The Administrator may utilize funds to 

19 establish a program to incentivize the recovery, 

20 recycling, and reclamation of any Class II sub21 stances in order to reduce emissions of such sub22 stances. 

23 ‘‘(B) MULTILATERAL FUND.—If the United 

24 States becomes a party or otherwise adheres to a 

25 multilateral agreement, including any amendmstockstill on PROD1PC66 with BILLS

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1 ment to the Montreal Protocol on Substances 

2 That Deplete the Ozone Layer, which restricts 

3 the production and consumption of class II, 

4 group II substances, the Administrator may uti5 lize funds to meet any related contribution obli6 gation of the United States to the Multilateral 

7 Fund for the Implementation of the Montreal 

8 Protocol or similar multilateral fund established 

9 under such multilateral agreement. 

10 ‘‘(C) BEST-IN-CLASS APPLIANCES DEPLOY11 MENT PROGRAM.—The Secretary of Energy is 

12 authorized to utilize funds to carry out the pur13 poses of section 214 of the American Clean En14 ergy and Security Act of 2009. 

15 ‘‘(D) LOW GLOBAL WARMING PRODUCT

16 TRANSITION ASSISTANCE PROGRAM.— 

17 ‘‘(i) IN GENERAL.—The Administrator, 

18 in consultation with the Secretary of En19 ergy, may utilize funds in fiscal years 2012 

20 through 2022 to establish a program to pro21 vide financial assistance to manufacturers 

22 of products containing class II, group II 

23 substances to facilitate the transition to 

24 products that contain or utilize alternative 

25 substances with no or low carbon dioxide 

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1 equivalent value and no ozone depletion po2 tential. 

3 ‘‘(ii) DEFINITION.—In this subpara4 graph, the term ‘products’ means refrig5 erators, freezers, dehumidifiers, air condi6 tioners, foam insulation, technical aerosols, 

7 fire protection systems, and semiconductors. 

8 ‘‘(iii) FINANCIAL ASSISTANCE.—The 

9 Administrator may provide financial assist10 ance to manufacturers pursuant to clause 

11 (i) for— 

12 ‘‘(I) the design and configuration 

13 of new products that use alternative 

14 substances with no or low carbon diox15 ide equivalent value and no ozone de16 pletion potential; and 

17 ‘‘(II) the redesign and retooling of 

18 facilities for the manufacture of prod19 ucts in the United States that use al20 ternative substances with no or low 

21 carbon dioxide equivalent value and no 

22 ozone depletion potential. 

23 ‘‘(iv) REPORTS.—For any fiscal year 

24 during which the Administrator provides fi25 nancial assistance pursuant to this submstockstill on PROD1PC66 with BILLS

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1 paragraph, the Administrator shall submit 

2 a report to the Congress within 3 months of 

3 the end of such fiscal year detailing the 

4 amounts, recipients, specific purposes, and 

5 results of the financial assistance pro6 vided.’’. 

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

8 title VI of the Clean Air Act (42 U.S.C. 7671 et seq.) is 

9 amended by adding the following new item at the end there10 of: 

‘‘Sec. 619. Hydrofluorocarbons (HFCs).’’. 

11 (c) FIRE SUPPRESSION AGENTS.—Section 605(a) of 

12 the Clean Air Act (42 U.S.C. 7671(a)) is amended— 

13 (1) by striking ‘‘or’’ at the end of paragraph (2); 

14 (2) by striking the period at the end of para15 graph (3) and inserting ‘‘; or’’; and 

16 (3) by adding the following new paragraph after 

17 paragraph (3): 

18 ‘‘(4) is listed as acceptable for use as a fire sup19 pression agent for nonresidential applications in ac20 cordance with section 612(c).’’. 

21 (d) MOTOR VEHICLE AIR CONDITIONERS.— 

22 (1) Section 609(e) of the Clean Air Act (42 

23 U.S.C. 7671h(e)) is amended by inserting ‘‘, group I’’ 

24 after each reference to ‘‘class II’’ in the text and head25 ing. 

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1 (2) Section 609 of the Clean Air Act (42 U.S.C. 

2 7671h) is amended by adding the following new sub3 section after subsection (e): 

4 ‘‘(f) CLASS II, GROUP II SUBSTANCES.— 

5 ‘‘(1) REPAIR.—The Administrator may promul6 gate regulations establishing requirements for repair 

7 of motor vehicle air conditioners prior to adding a 

8 class II, group II substance. 

9 ‘‘(2) SMALL CONTAINERS.—(A) The Adminis10 trator may promulgate regulations establishing serv11 icing practices and procedures for recovery of class II, 

12 group II substances from containers which contain 

13 less than 20 pounds of such class II, group II sub14 stances. 

15 ‘‘(B) Not later than 18 months after enactment 

16 of this subsection, the Administrator shall either pro17 mulgate regulations requiring that containers which 

18 contain less than 20 pounds of a class II, group II 

19 substance be equipped with a device or technology 

20 that limits refrigerant emissions and leaks from the 

21 container and limits refrigerant emissions and leaks 

22 during the transfer of refrigerant from the container 

23 to the motor vehicle air conditioner or issue a deter24 mination that such requirements are not necessary or 

25 appropriate. 

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1 ‘‘(C) Not later than 18 months after enactment 

2 of this subsection, the Administrator shall promulgate 

3 regulations establishing requirements for consumer 

4 education materials on best practices associated with 

5 the use of containers which contain less than 20 

6 pounds of a class II, group II substance and prohib7 iting the sale or distribution, or offer for sale or dis8 tribution, of any class II, group II substance in any 

9 container which contains less than 20 pounds of such 

10 class II, group II substance, unless consumer edu11 cation materials consistent with such requirements 

12 are displayed and available at point-of-sale locations, 

13 provided to the consumer, or included in or on the 

14 packaging of the container which contain less than 20 

15 pounds of a class II, group II substance. 

16 ‘‘(D) The Administrator may, through rule17 making, extend the requirements established under 

18 this paragraph to containers which contain 30 

19 pounds or less of a class II, group II substance if the 

20 Administrator determines that such action would 

21 produce significant environmental benefits. 

22 ‘‘(3) RESTRICTION OF SALES.—Effective Janu23 ary 1, 2014, no person may sell or distribute or offer 

24 to sell or distribute or otherwise introduce into inter25 state commerce any motor vehicle air conditioner remstockstill on PROD1PC66 with BILLS

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1 frigerant in any size container unless the substance 

2 has been found acceptable for use in a motor vehicle 

3 air conditioner under section 612.’’. 

4 (e) SAFE ALTERNATIVES POLICY.—Section 612(e) of 

5 the Clean Air Act (42 U.S.C. 7671k(e)) is amended by in6 serting ‘‘or class II’’ after each reference to ‘‘class I’’. 

7 SEC. 333. BLACK CARBON. 

8 (a) DEFINITION.—As used in this section, the term 

9 ‘‘black carbon’’ means primary light absorbing aerosols, as 

10 defined by the Administrator, based on the best available 

11 science. 

12 (b) BLACK CARBON ABATEMENT REPORT.—Not later 

13 than one year after the date of enactment of this section, 

14 the Administrator shall, in consultation with other appro15 priate Federal agencies, submit to Congress a report regard16 ing black carbon emissions. The report shall include the fol17 lowing: 

18 (1) A summary of the current information and 

19 research that identifies— 

20 (A) an inventory of the major sources of 

21 black carbon emissions in the United States and 

22 throughout the world, including— 

23 (i) an estimate of the quantity of cur24 rent and projected future emissions; and 

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1 (ii) the net climate forcing of the emis2 sions from such sources, including consider3 ation of co-emissions of other pollutants; 

4 (B) effective and cost-effective control tech5 nologies, operations, and strategies for additional 

6 domestic and international black carbon emis7 sions reductions, such as diesel retrofit tech8 nologies on existing on-road, non-road, and sta9 tionary engines and programs to address resi10 dential cookstoves, and forest and agriculture11 based burning; 

12 (C) potential metrics and approaches for 

13 quantifying the climatic effects of black carbon 

14 emissions, including its radiative forcing and 

15 warming effects, that may be used to compare 

16 the climate benefits of different mitigation strate17 gies, including an assessment of the uncertainty 

18 in such metrics and approaches; and 

19 (D) the public health and environmental 

20 benefits associated with additional controls for 

21 black carbon emissions. 

22 (2) Recommendations regarding— 

23 (A) development of additional emissions 

24 monitoring techniques and capabilities, modmstockstill on PROD1PC66 with BILLS

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1 eling, and other black carbon-related areas of 

2 study; 

3 (B) areas of focus for additional study of 

4 technologies, operations, and strategies with the 

5 greatest potential to reduce emissions of black 

6 carbon and associated public health, economic, 

7 and environmental impacts associated with these 

8 emissions; and 

9 (C) actions, in addition to those identified 

10 by the Administrator under section 851 of the 

11 Clean Air Act (as added by subsection (c)), the 

12 Federal Government may take to encourage or 

13 require reductions in black carbon emissions. 

14 (c) BLACK CARBON MITIGATION.—Title VIII of the 

15 Clean Air Act, as added by section 331 of this Act, and 

16 amended by section 222 of this Act, is further amended by 

17 adding after part D the following new part: 

18 ‘‘PART E—BLACK CARBON 

19 ‘‘SEC. 851. BLACK CARBON. 

20 ‘‘(a) DOMESTIC BLACK CARBON MITIGATION.—Not 

21 later than 18 months after the date of enactment of this 

22 section, the Administrator, taking into consideration the 

23 public health and environmental impacts of black carbon 

24 emissions, including the effects on global and regional 

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1 faces, shall propose regulations under the existing authori2 ties of this Act to reduce emissions of black carbon or pro3 pose a finding that existing regulations promulgated pursu4 ant to this Act adequately regulate black carbon emissions. 

5 Not later than two years after the date of enactment of this 

6 section, the Administrator shall promulgate final regula7 tions under the existing authorities of this Act or finalize 

8 the proposed finding. 

9 ‘‘(b) INTERNATIONAL BLACK CARBON MITIGATION.— 

10 ‘‘(1) REPORT.—Not later than one year after the 

11 date of enactment of this section, the Administrator, 

12 in coordination with the Secretary of State and other 

13 appropriate Federal agencies, shall transmit a report 

14 to Congress on the amount, type, and direction of all 

15 present United States financial, technical, and related 

16 assistance to foreign countries to reduce, mitigate, 

17 and otherwise abate black carbon emissions. 

18 ‘‘(2) OTHER OPPORTUNITIES.—The report re19 quired under paragraph (1) shall also identify oppor20 tunities and recommendations, including action 

21 under existing authorities, to achieve significant black 

22 carbon emission reductions in foreign countries 

23 through technical assistance or other approaches to— 

24 ‘‘(A) promote sustainable solutions to bring 

25 clean, efficient, safe, and affordable stoves, fuels, 

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1 or both stoves and fuels to residents of developing 

2 countries that are reliant on solid fuels such as 

3 wood, dung, charcoal, coal, or crop residues for 

4 home cooking and heating, so as to help reduce 

5 the public health, environmental, and economic 

6 impacts of black carbon emissions from these 

7 sources by— 

8 ‘‘(i) identifying key regions for large9 scale demonstration efforts, and key part10 ners in each such region; and 

11 ‘‘(ii) developing for each such region a 

12 large-scale implementation strategy with a 

13 goal of collectively reaching 20,000,000 

14 homes over 5 years with interventions that 

15 will— 

16 ‘‘(I) increase stove efficiency by 

17 over 50 percent (or such other goal as 

18 determined by the Administrator); 

19 ‘‘(II) reduce emissions of black 

20 carbon by over 60 percent (or such 

21 other goal as determined by the Ad22 ministrator); and 

23 ‘‘(III) reduce the incidence of se24 vere pneumonia in children under 5 

25 years old by over 30 percent (or such 

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1 other goal as determined by the Ad2 ministrator); 

3 ‘‘(B) make technological improvements to 

4 diesel engines and provide greater access to fuels 

5 that emit less or no black carbon; 

6 ‘‘(C) reduce unnecessary agricultural or 

7 other biomass burning where feasible alternatives 

8 exist; 

9 ‘‘(D) reduce unnecessary fossil fuel burning 

10 that produces black carbon where feasible alter11 natives exist; 

12 ‘‘(E) reduce other sources of black carbon 

13 emissions; and 

14 ‘‘(F) improve capacity to achieve greater 

15 compliance with existing laws to address black 

16 carbon emissions.’’. 

17 (d) AUTHORIZATION OF APPROPRIATIONS.—There are 

18 authorized to be appropriated such sums as are necessary 

19 to carry out this section. 

20 SEC. 334. STATES. 

21 Section 116 of the Clean Air Act (42 U.S.C. 7416) is 

22 amended by adding the following at the end thereof: ‘‘For 

23 the purposes of this section, the phrases ‘standard or limita24 tion respecting emissions of air pollutants’ and ‘require25 ments respecting control or abatement of air pollution’ shall 

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1 include any provision to: cap greenhouse gas emissions, re2 quire surrender to the State or a political subdivision there3 of of emission allowances or offset credits established or 

4 issued under this Act, and require the use of such allowances 

5 or credits as a means of demonstrating compliance with 

6 requirements established by a State or political subdivision 

7 thereof.’’. 

8 SEC. 335. STATE PROGRAMS. 

9 Title VIII of the Clean Air Act, as added by section 

10 331 of this Act and amended by several sections of this Act, 

11 is further amended by adding after part E (as added by 

12 section 333(c) of this Act) the following new part: 

13 ‘‘PART F—MISCELLANEOUS 

14 ‘‘SEC. 861. STATE PROGRAMS. 

15 ‘‘Notwithstanding section 116, no State or political 

16 subdivision thereof shall implement or enforce a cap and 

17 trade program that covers any capped emissions emitted 

18 during the years 2012 through 2017. For purposes of this 

19 section, the term ‘cap and trade program’ means a system 

20 of greenhouse gas regulation under which a State or polit21 ical subdivision issues a limited number of tradable instru22 ments in the nature of emission allowances and requires 

23 that sources within its jurisdiction surrender such tradeable 

24 instruments for each unit of greenhouse gases emitted dur25 ing a compliance period. For purposes of this section, a 

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1 ‘cap-and-trade program’ does not include a target or limit 

2 on greenhouse gas emissions adopted by a State or political 

3 subdivision that is implemented other than through the 

4 issuance and surrender of a limited number of tradable in5 struments in the nature of emission allowances, nor does 

6 it include any other standard, limit, regulation, or program 

7 to reduce greenhouse gas emissions that is not implemented 

8 through the issuance and surrender of a limited number of 

9 tradeable instruments in the nature of emission allowances. 

10 For purposes of this section, the term ‘cap and trade pro11 gram’ does not include, among other things, fleet-wide 

12 motor vehicle emission requirements that allow greater 

13 emissions with increased vehicle production, or require14 ments that fuels, or other products, meet an average pollu15 tion emission rate or lifecycle greenhouse gas standard. 

16 ‘‘SEC. 862. GRANTS FOR SUPPORT OF AIR POLLUTION CON17 TROL PROGRAMS. 

18 ‘‘The Administrator is authorized to make grants to 

19 air pollution control agencies pursuant to section 105 for 

20 purposes of assisting in the implementation of programs to 

21 address global warming established under the Safe Climate 

22 Act.’’. 

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1 SEC. 336. ENFORCEMENT. 

2 (a) REMAND.—Section 307(b) of the Clean Air Act (42 

3 U.S.C. 7607(b)) is amended by adding the following new 

4 paragraph at the end thereof: 

5 ‘‘(3) If the court determines that any action of 

6 the Administrator is arbitrary, capricious, or other7 wise unlawful, the court may remand such action, 

8 without vacatur, if vacatur would impair or delay 

9 protection of the environment or public health or oth10 erwise undermine the timely achievement of the pur11 poses of this Act.’’. 

12 (b) PETITION FOR RECONSIDERATION.—Section 

13 307(d)(7)(B) of the Clean Air Act (42 U.S.C. 

14 7607(d)(7)(B)) is amended as follows: 

15 (1) By inserting after the second sentence ‘‘If a 

16 petition for reconsideration is filed, the Administrator 

17 shall take final action on such petition, including 

18 promulgation of final action either revising or deter19 mining not to revise the action for which reconsider20 ation is sought, within 150 days after the petition is 

21 received by the Administrator or the petition shall be 

22 deemed denied for the purpose of judicial review.’’. 

23 (2) By amending the third sentence to read as 

24 follows: ‘‘Such person may seek judicial review of such 

25 denial, or of any other final action, by the Adminis26 trator, in response to a petition for reconsideration, 

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1 in the United States court of appeals for the appro2 priate circuit (as provided in subsection (b)).’’. 

3 SEC. 337. CONFORMING AMENDMENTS. 

4 (a) FEDERAL ENFORCEMENT.—Section 113 of the 

5 Clean Air Act (42 U.S.C. 7413) is amended as follows: 

6 (1) In subsection (a)(3), by striking ‘‘or title 

7 VI,’’ and inserting ‘‘title VI, title VII, or title VIII’’. 

8 (2) In subsection (b), by striking ‘‘or a major 

9 stationary source’’ and inserting ‘‘a major stationary 

10 source, or a covered EGU under title VIII’’ in the 

11 material preceding paragraph (1). 

12 (3) In paragraph (2) of subsection (b), by strik13 ing ‘‘or title VI’’ and inserting ‘‘title VI, title VII, or 

14 title VIII’’. 

15 (4) In subsection (c)— 

16 (A) in the first sentence of paragraph (1), 

17 by striking ‘‘or title VI (relating to stratospheric 

18 ozone control),’’ and inserting ‘‘title VI, title VII, 

19 or title VIII,’’; and 

20 (B) in the first sentence of paragraph (3), 

21 by striking ‘‘or VI’’ and inserting ‘‘VI, VII, or 

22 VIII’’. 

23 (5) In subsection (d)(1)(B), by striking ‘‘or VI’’ 

24 and inserting ‘‘VI, VII, or VIII’’. 

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1 (6) In subsection (f), in the first sentence, by 

2 striking ‘‘or VI’’ and inserting ‘‘VI, VII, or VIII’’. 

3 (b) RETENTION OF STATE AUTHORITY.—Section 116 

4 of the Clean Air Act (42 U.S.C. 7416) is amended as fol5 lows: 

6 (1) By striking ‘‘and 233’’ and inserting ‘‘233’’. 

7 (2) By striking ‘‘of moving sources)’’ and insert8 ing ‘‘of moving sources), and 861 (preempting certain 

9 State greenhouse gas programs for a limited time)’’. 

10 (c) INSPECTIONS, MONITORING, AND ENTRY.—Section 

11 114(a) of the Clean Air Act (42 U.S.C. 7414(a)) is amended 

12 by striking ‘‘section 112,’’ and all that follows through 

13 ‘‘(ii)’’ and inserting the following: ‘‘section 112, or any reg14 ulation of greenhouse gas emissions under title VII or VIII, 

15 (ii)’’. 

16 (d) ENFORCEMENT.—Subsection (f) of section 304 of 

17 the Clean Air Act (42 U.S.C. 7604(f)) is amended as fol18 lows: 

19 (1) By striking ‘‘; or’’ at the end of paragraph 

20 (3) thereof and inserting a comma. 

21 (2) By striking the period at the end of para22 graph (4) thereof and inserting ‘‘, or’’. 

23 (3) By adding the following after paragraph (4) 

24 thereof: 

25 ‘‘(5) any requirement of title VII or VIII.’’. 

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1 (e) ADMINISTRATIVE PROCEEDINGS AND JUDICIAL RE2 VIEW.—Section 307 of the Clean Air Act (42 U.S.C. 7607) 

3 is amended as follows: 

4 (1) In subsection (a), by striking ‘‘, or section 

5 306’’ and inserting ‘‘section 306, or title VII or VIII’’. 

6 (2) In subsection (b)(1)— 

7 (A) by striking ‘‘,,’’ and inserting ‘‘,’’ in 

8 each place such punctuation appears; and 

9 (B) by striking ‘‘section 120,’’ in the first 

10 sentence and inserting ‘‘section 120, any final 

11 action under title VII or VIII,’’. 

12 (3) In subsection (d)(1) by amending subpara13 graph (S) to read as follows: 

14 ‘‘(S) the promulgation or revision of any 

15 regulation under title VII or VIII,’’. 

16 SEC. 338. DAVIS-BACON COMPLIANCE. 

17 (a) IN GENERAL.—Notwithstanding any other provi18 sion of law and in a manner consistent with other provi19 sions in this Act, to receive emission allowances or funding 

20 under this Act the recipient shall provide reasonable assur21 ances that all laborers and mechanics employed by contrac22 tors and subcontractors on projects funded directly by or 

23 assisted in whole or in part by and through the Federal 

24 Government pursuant to this Act, or by any entity estab25 lished in accordance with this Act, including the Carbon 

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1 Storage Research Corporation, will be paid wages at rates 

2 not less than those prevailing on projects of a character 

3 similar in the locality as determined by the Secretary of 

4 Labor in accordance with subchapter IV of chapter 31 of 

5 title 40, United States Code (commonly known as the 

6 ‘‘Davis-Bacon Act’’). With respect to the labor standards 

7 specified in this section, the Secretary of Labor shall have 

8 the authority and functions set forth in Reorganization 

9 Plan Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) 

10 and section 3145 of title 40, United States Code. 

11 (b) EXEMPTION.—Neither subsection (a) nor the re12 quirements of subchapter IV of chapter 31 of title 40, United 

13 States Code, shall apply to retrofitting of any residential 

14 building (as defined in section 202(a)(5)), or to retrofitting 

15 of a nonresidential building (as defined in section 

16 202(a)(1)) if the net interior space of such nonresidential 

17 building is less than 6,500 square feet, or if such nonresi18 dential building is designed for residential use for less than 

19 4 families. 

20 Subtitle D—Carbon Market 

21 Assurance 

22 SEC. 341. CARBON MARKET ASSURANCE. 

23 The Federal Power Act (16 U.S.C. 791a and following) 

24 is amended by adding at the end the following: 

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1 ‘‘PART IV—CARBON MARKET ASSURANCE 

2 ‘‘SEC. 401. OVERSIGHT AND ASSURANCE OF CARBON MAR3 KETS. 

4 ‘‘(a) DEFINITIONS.—In this section: 

5 ‘‘(1) CONTRACT OF SALE.—The term ‘contract of 

6 sale’ includes sales, agreements of sale, and agree7 ments to sell. 

8 ‘‘(2) COVERED ENTITY.—The term ‘covered enti9 ty’ shall have the meaning given in section 700 of the 

10 Clean Air Act. 

11 ‘‘(3) FUTURE DELIVERY.—The term ‘future de12 livery’ does not include any sale of any cash com13 modity for deferred shipment or delivery. 

14 ‘‘(4) OFFSET CREATION CONTRACT.—The term 

15 ‘offset creation contract’ mean a written agreement 

16 for the origination and development of an offset 

17 project, and the related issuance of offset credits, pur18 suant to title VII of the Clean Air Act. 

19 ‘‘(5) REGULATED ALLOWANCE.—The term ‘regu20 lated allowance’ means any emission allowance, com21 pensatory allowance, offset credit, or Federal renew22 able electricity credit established or issued under the 

23 American Clean Energy and Security Act of 2009. 

24 ‘‘(6) REGULATED ALLOWANCE DERIVATIVE.—The 

25 term ‘regulated allowance derivative’ means an in26 strument that is, or includes, an instrument— 

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1 ‘‘(A) which— 

2 ‘‘(i) is of the character of, or is com3 monly known to the trade as, a ‘put option’, 

4 ‘call option’, ‘privilege’, ‘indemnity’, ‘ad5 vance guaranty’, ‘decline guaranty’, or 

6 ‘swap agreement’; or 

7 ‘‘(ii) is a contract of sale for future de8 livery other than an offset creation contract; 

9 and 

10 ‘‘(B) the value of which, in whole or in 

11 part, is expressly linked to the price of a regu12 lated allowance or another regulated allowance 

13 derivative. 

14 ‘‘(7) REGULATED INSTRUMENT.—The term ‘regu15 lated instrument’ means a regulated allowance or a 

16 regulated allowance derivative. 

17 ‘‘(b) REGULATED ALLOWANCE MARKET.— 

18 ‘‘(1) AUTHORITY.—The Commission shall pro19 mulgate regulations for the establishment, operation, 

20 and oversight of markets for regulated allowances not 

21 later than 18 months after the date of the enactment 

22 of this section, and from time to time thereafter as 

23 may be appropriate. 

24 ‘‘(2) REGULATIONS.—The regulations promul25 gated pursuant to paragraph (1) shall— 

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1 ‘‘(A) provide for effective and comprehensive 

2 market oversight; 

3 ‘‘(B) prohibit fraud, market manipulation 

4 (including an entity’s fraudulent or manipula5 tive conduct with respect to regulated allowance 

6 derivatives that benefits the entity in regulated 

7 allowance markets), and excess speculation, and 

8 provide measures to limit unreasonable fluctua9 tion in the prices of regulated allowances; 

10 ‘‘(C) facilitate compliance with title VII of 

11 the Clean Air Act by covered entities; 

12 ‘‘(D) ensure market transparency and rec13 ordkeeping deemed necessary and appropriate by 

14 the Commission to provide for efficient price dis15 covery; prevention of fraud, market manipula16 tion, and excess speculation; and compliance 

17 with title VII of the Clean Air Act and section 

18 610 of the Public Utility Regulatory Policies Act 

19 of 1978; 

20 ‘‘(E) as necessary, ensure that position lim21 itations for individual market participants are 

22 established with respect to each class of regulated 

23 allowances; 

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1 ‘‘(F) as necessary, ensure that margin re2 quirements are established for each class of regu3 lated allowances; 

4 ‘‘(G) provide for the formation and oper5 ation of a fair, orderly and liquid national mar6 ket system that allows for the best execution in 

7 the trading of regulated allowances; 

8 ‘‘(H) limit or eliminate counterparty risks, 

9 market power concentration risks, and other 

10 risks associated with over-the-counter trading; 

11 and 

12 ‘‘(I) establish standards for qualification as, 

13 and operation of, trading facilities for regulated 

14 allowances; 

15 ‘‘(J) establish standards for qualification 

16 as, and operation of, clearing organizations for 

17 trading facilities for regulated allowances; and 

18 ‘‘(K) include such other requirements as 

19 necessary to preserve market integrity and facili20 tate compliance with title VII of the Clean Air 

21 Act and section 610 of the Public Utility Regu22 latory Policies Act of 1978 and the regulations 

23 promulgated under such title and such section. 

24 ‘‘(3) ENFORCEMENT.— 

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1 ‘‘(A) IN GENERAL.—If the Commission de2 termines, after notice and an opportunity for a 

3 hearing on the record, that any entity has vio4 lated any rule or order issued by the Commission 

5 under this subsection, the Commission may issue 

6 an order— 

7 ‘‘(i) prohibiting the entity from trad8 ing on a trading facility for regulated al9 lowances registered with the Commission, 

10 and requiring all such facilities to refuse the 

11 entity all privileges for such period as may 

12 be specified in the order; 

13 ‘‘(ii) if the entity is registered with the 

14 Commission in any capacity, suspending 

15 for a period of not more than 6 months, or 

16 revoking, the registration of the entity; 

17 ‘‘(iii) assessing the entity a civil pen18 alty of not more than $1,000,000 per day 

19 per violation for as long as the violation 

20 continues (and in determining the amount 

21 of a civil penalty, the Commission shall 

22 take into account the nature and seriousness 

23 of the violation and the efforts to remedy the 

24 violation); and 

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1 ‘‘(iv) requiring disgorgement of unjust 

2 profits, restitution to entities harmed by the 

3 violation as determined by the Commission, 

4 or both. 

5 ‘‘(B) AUTHORITY TO SUSPEND OR REVOKE

6 REGISTRATION.—The Commission may suspend 

7 for a period of not more than 6 months, or re8 voke, the registration of a trading facility for 

9 regulated allowances or of a clearing organiza10 tion registered by the Commission if, after notice 

11 and opportunity for a hearing on the record, the 

12 Commission finds that— 

13 ‘‘(i) the entity violated any rule or 

14 order issued by the Commission under this 

15 subsection; or 

16 ‘‘(ii) a director, officer, employee, or 

17 agent of the entity has violated any rule or 

18 order issued by the Commission under this 

19 subsection. 

20 ‘‘(C) CEASE AND DESIST PROCEEDINGS.— 

21 ‘‘(i) IN GENERAL.—If the Commission 

22 determines that any entity may be vio23 lating, may have violated, or may be about 

24 to violate any provision of this part, or any 

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1 tion, condition, or order made or imposed 

2 by, the Commission under this Act, and if 

3 the Commission finds that the alleged viola4 tion or threatened violation, or the continu5 ation of the violation, is likely to result in 

6 significant harm to covered entities or mar7 ket participants, or significant harm to the 

8 public interest, the Commission may issue a 

9 temporary order requiring the entity— 

10 ‘‘(I) to cease and desist from the 

11 violation or threatened violation; 

12 ‘‘(II) to take such action as is nec13 essary to prevent the violation or 

14 threatened violation; and 

15 ‘‘(III) to prevent, as the Commis16 sion determines to be appropriate— 

17 ‘‘(aa) significant harm to 

18 covered entities or market partici19 pants; 

20 ‘‘(bb) significant harm to the 

21 public interest; and 

22 ‘‘(cc) frustration of the abil23 ity of the Commission to conduct 

24 the proceedings or to redress the 

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1 violation at the conclusion of the 

2 proceedings. 

3 ‘‘(ii) TIMING OF ENTRY.—An order 

4 issued under clause (i) shall be entered only 

5 after notice and opportunity for a hearing, 

6 unless the Commission determines that no7 tice and hearing before entry would be im8 practicable or contrary to the public inter9 est. 

10 ‘‘(iii) EFFECTIVE DATE.—A temporary 

11 order issued under clause (i) shall— 

12 ‘‘(I) become effective upon service 

13 upon the entity; and 

14 ‘‘(II) unless set aside, limited, or 

15 suspended by the Commission or a 

16 court of competent jurisdiction, remain 

17 effective and enforceable pending the 

18 completion of the proceedings. 

19 ‘‘(D) PROCEEDINGS REGARDING DISSIPA20 TION OR CONVERSION OF ASSETS.— 

21 ‘‘(i) IN GENERAL.—In a proceeding in22 volving an alleged violation of a regulation 

23 or order promulgated or issued by the Com24 mission, if the Commission determines that 

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1 cumstances are likely to result in signifi2 cant dissipation or conversion of assets, the 

3 Commission may issue a temporary order 

4 requiring the respondent to take such action 

5 as is necessary to prevent the dissipation or 

6 conversion of assets. 

7 ‘‘(ii) TIMING OF ENTRY.—An order 

8 issued under clause (i) shall be entered only 

9 after notice and opportunity for a hearing, 

10 unless the Commission determines that no11 tice and hearing before entry would be im12 practicable or contrary to the public inter13 est. 

14 ‘‘(iii) EFFECTIVE DATE.—A temporary 

15 order issued under clause (i) shall— 

16 ‘‘(I) become effective upon service 

17 upon the respondent; and 

18 ‘‘(II) unless set aside, limited, or 

19 suspended by the Commission or a 

20 court of competent jurisdiction, remain 

21 effective and enforceable pending the 

22 completion of the proceedings. 

23 ‘‘(E) REVIEW OF TEMPORARY ORDERS.— 

24 ‘‘(i) APPLICATION FOR REVIEW.—At 

25 any time after a respondent has been served 

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1 with a temporary cease-and-desist order 

2 pursuant to subparagraph (C) or order re3 garding the dissipation or conversion of as4 sets pursuant to subparagraph (D), the re5 spondent may apply to the Commission to 

6 have the order set aside, limited, or sus7 pended. 

8 ‘‘(ii) NO PRIOR HEARING.—If a re9 spondent has been served with a temporary 

10 order entered without a prior hearing of the 

11 Commission— 

12 ‘‘(I) the respondent may, not later 

13 than 10 days after the date on which 

14 the order was served, request a hearing 

15 on the application; and 

16 ‘‘(II) the Commission shall hold a 

17 hearing and render a decision on the 

18 application at the earliest practicable 

19 time. 

20 ‘‘(iii) JUDICIAL REVIEW.— 

21 ‘‘(I) IN GENERAL.—An entity 

22 shall not be required to submit a re23 quest for rehearing of a temporary 

24 order before seeking judicial review in 

25 accordance with this subparagraph. 

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1 ‘‘(II) TIMING OF REVIEW.—Not 

2 later than 10 days after the date on 

3 which a respondent is served with a 

4 temporary cease-and-desist order en5 tered with a prior hearing of the Com6 mission, or 10 days after the date on 

7 which the Commission renders a deci8 sion on an application and hearing 

9 under clause (i) with respect to any 

10 temporary order entered without such 

11 a prior hearing— 

12 ‘‘(aa) the respondent may ob13 tain a review of the order in a 

14 United States circuit court having 

15 jurisdiction over the circuit in 

16 which the respondent resides or 

17 has a principal place of business, 

18 or in the United States Court of 

19 Appeals for the District of Colum20 bia Circuit, for an order setting 

21 aside, limiting, or suspending the 

22 effectiveness or enforcement of the 

23 order; and 

24 ‘‘(bb) the court shall have ju25 risdiction to enter such an order. 

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1 ‘‘(III) NO PRIOR HEARING.—A re2 spondent served with a temporary 

3 order entered without a prior hearing 

4 of the Commission may not apply to 

5 the applicable court described in sub6 clause (II) except after a hearing and 

7 decision by the Commission on the ap8 plication of the respondent under 

9 clauses (i) and (ii). 

10 ‘‘(iv) PROCEDURES.—Section 222 and 

11 Part III shall apply to— 

12 ‘‘(I) an application for review of 

13 an order under clause (i); and 

14 ‘‘(II) an order subject to review 

15 under clause (iii). 

16 ‘‘(v) NO AUTOMATIC STAY OF TEM17 PORARY ORDER.—The commencement of 

18 proceedings under clause (iii) shall not, un19 less specifically ordered by the court, oper20 ate as a stay of the order of the Commis21 sion. 

22 ‘‘(F) ACTIONS TO COLLECT CIVIL PEN23 ALTIES.—If any person fails to pay a civil pen24 alty assessed under this subsection after an order 

25 assessing the penalty has become final and 

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1 unappealable, the Commission shall bring an ac2 tion to recover the amount of the penalty in any 

3 appropriate United States district court. In any 

4 such action, the validity or appropriateness of 

5 the final assessment order or judgment shall not 

6 be subject to review. 

7 ‘‘(4) TRANSACTION FEES.— 

8 ‘‘(A) IN GENERAL.—The Commission shall, 

9 in accordance with this paragraph, establish and 

10 collect transaction fees designed to recover the 

11 costs to the Federal Government of the super12 vision and regulation of regulated allowance 

13 markets and market participants, including re14 lated costs for enforcement activities, policy and 

15 rulemaking activities, administration, legal serv16 ices, and international regulatory activities. 

17 ‘‘(B) INITIAL FEE RATE.—Each trading fa18 cility on or through which regulated allowances 

19 are transacted shall pay to the Commission a fee 

20 at a rate of not more than $15 per $1,000,000 

21 of the aggregate dollar amount of sales of regu22 lated allowances transacted through the facility. 

23 ‘‘(C) ANNUAL ADJUSTMENT OF FEE RATE.— 

24 The Commission shall, on an annual basis— 

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1 ‘‘(i) assess the rate at which fees are to 

2 be collected as necessary to meet the cost re3 covery requirement in subparagraph (A); 

4 and 

5 ‘‘(ii) consistent with subparagraph 

6 (B), adjust the rate as necessary in order to 

7 meet the requirement. 

8 ‘‘(D) REPORT ON ADEQUACY OF FEES IN

9 RECOVERING COSTS.—The Commission, shall, on 

10 an annual basis, report to the Committee on En11 ergy and Commerce of the House of Representa12 tives and the Committee on Energy and Natural 

13 Resources of the Senate on the adequacy of the 

14 transaction fees in providing funding for the 

15 Commission to regulate the regulated allowance 

16 markets. 

17 ‘‘(5) JUDICIAL REVIEW.—Judicial review of ac18 tions taken by the Commission under this subsection 

19 shall be pursuant to part III. 

20 ‘‘(6) INFORMATION-SHARING.—Within 6 months 

21 after a Federal agency with jurisdiction over regu22 lated allowance derivatives is delegated authority pur23 suant to subsection (c)(1), the agency shall enter into 

24 a memorandum of understanding with the Commis25 sion relating to information sharing, which shall inmstockstill on PROD1PC66 with BILLS

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1 clude provisions ensuring that information requests to 

2 markets within the respective jurisdiction of the agen3 cy are properly coordinated to facilitate, among other 

4 things, effective information-sharing while mini5 mizing duplicative information requests, and provi6 sions regarding the treatment of proprietary informa7 tion. 

8 ‘‘(7) ADDITIONAL EMPLOYEES REPORT AND AP9 POINTMENT.—Within 18 months after the date of the 

10 enactment of this section, the Commission shall sub11 mit to the President, the Committee on Energy and 

12 Commerce of the House of Representatives, and the 

13 Committee on Energy and Natural Resources of the 

14 Senate, a report that contains recommendations as to 

15 how many additional employees would be necessary to 

16 provide robust oversight and enforcement of the regu17 lations promulgated under this subsection. As soon as 

18 practicable after the completion of the report, subject 

19 to appropriations, the Commission shall appoint the 

20 recommended number of additional employees for 

21 such purposes. 

22 ‘‘(c) DELEGATION OF AUTHORITY BY THE PRESI23 DENT.— 

24 ‘‘(1) DELEGATION.—The President, taking into 

25 consideration the recommendations of the interagency 

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1 working group established in subsection (d), shall del2 egate to members of the working group and the heads 

3 of other appropriate Federal agencies the authority to 

4 promulgate regulations for the establishment, oper5 ation, and oversight of all markets for regulated al6 lowance derivatives. 

7 ‘‘(2) REGULATIONS.—The regulations promul8 gated pursuant to paragraph (1) shall— 

9 ‘‘(A) provide for effective and comprehensive 

10 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 allowance derivatives; 

15 ‘‘(C) facilitate compliance with title VII of 

16 the Clean Air Act by covered entities; 

17 ‘‘(D) ensure market transparency and rec18 ordkeeping necessary to provide for efficient 

19 price discovery; prevention of fraud, market ma20 nipulation, and excess speculation; and compli21 ance with title VII of the Clean Air Act and sec22 tion 610 of the Public Utility Regulatory Poli23 cies Act of 1978; 

24 ‘‘(E) ensure that position limitations for in25 dividual market participants are established 

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1 with respect to each regulated allowance deriva2 tive and aggregate position limitations for indi3 vidual market participants are established with 

4 respect to all regulated allowance derivative 

5 markets; 

6 ‘‘(F) ensure that margin requirements are 

7 established for each regulated allowance deriva8 tive; 

9 ‘‘(G) provide for the formation and oper10 ation of a market system that allows for best exe11 cution in the trading of regulated allowance de12 rivatives; 

13 ‘‘(H) to the extent the regulations deviate 

14 from the rule set forth in paragraph (4)(B), 

15 limit or eliminate counterparty risks, market 

16 power concentration risks, and other risks associ17 ated with over-the-counter trading, and promul18 gate reporting and market transparency rules for 

19 large traders; 

20 ‘‘(I) ensure that market participants do not 

21 evade position limits or otherwise undermine the 

22 integrity and effectiveness of the regulations pro23 mulgated under subparagraph (C) through par24 ticipation in markets not subject to the position 

25 limits and regulations; 

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1 ‘‘(J) establish standards, as necessary, for 

2 qualification as, and operation of, trading facili3 ties for regulated allowance derivatives; 

4 ‘‘(K) establish standards, as necessary, for 

5 qualification as, and operation of, clearing orga6 nizations for trading facilities for regulated al7 lowance derivatives; 

8 ‘‘(L) provide boards of trade designated as 

9 contract markets under the Commodity Ex10 change Act, and market participants, with an 

11 adequate transition period for compliance with 

12 any new regulatory requirements established 

13 under this paragraph; 

14 ‘‘(M) determine whether and to what extent 

15 offset creation contracts, to the extent incor16 porating regulated allowance derivatives, should 

17 be governed by the same regulations that apply 

18 to other regulated allowance derivatives; and 

19 ‘‘(N) include such other requirements as 

20 necessary to preserve market integrity and facili21 tate compliance with title VII of the Clean Air 

22 Act and section 610 of the Public Utility Regu23 latory Policies Act of 1978 and the regulations 

24 promulgated under such title and such section. 

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1 ‘‘(3) DEADLINE.—The agencies authorized to 

2 promulgate regulations for the establishment, oper3 ation, and oversight of markets for regulated allow4 ance derivatives pursuant to paragraph (1) shall pro5 mulgate such regulations not later than 18 months 

6 after the date of the enactment of this section, and 

7 from time to time thereafter as may be appropriate. 

8 ‘‘(4) DEFAULT RULES.— 

9 ‘‘(A) An individual market participant, di10 rectly or in concert with another participant, 

11 shall not control more than 10 percent of the 

12 open interest in any regulated allowance deriva13 tive. 

14 ‘‘(B) All contracts for the purchase or sale 

15 of any regulated allowance derivative shall be ex16 ecuted on or through a board of trade designated 

17 as a contract market under the Commodity Ex18 change Act. 

19 ‘‘(C) To the extent that regulations promul20 gated under this subsection provide different 

21 rules with respect to the matters described in 

22 subparagraph (A) or (B), the regulations shall 

23 supersede subparagraph (A) or (B), as the case 

24 may be. 

25 ‘‘(d) WORKING GROUP.— 

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1 ‘‘(1) ESTABLISHMENT.—Not later than 30 days 

2 after the date of the enactment of this section, the 

3 President shall establish an interagency working 

4 group on carbon market oversight, which shall include 

5 the Administrator of the Environmental Protection 

6 Agency and representatives of other relevant agencies, 

7 to make recommendations to the President regarding 

8 proposed regulations for the establishment, operation, 

9 and oversight of markets for regulated allowance de10 rivatives. 

11 ‘‘(2) REPORT.—Not later than 180 days after the 

12 date of the enactment of this section, and biennially 

13 thereafter, the interagency working group shall submit 

14 a written report to the President and Congress that 

15 includes its recommendations to the President regard16 ing proposed regulations for the establishment, oper17 ation, and oversight of markets for regulated allow18 ance derivatives and any recommendations to Con19 gress for statutory changes needed to ensure the estab20 lishment, operation, and oversight of transparent, 

21 fair, stable, and efficient markets for regulated allow22 ance derivatives. 

23 ‘‘(e) ENFORCEMENT OF REGULATIONS.—Each Federal 

24 agency that promulgates under subsection (c) a regulation 

25 of conduct with respect to a regulated allowance derivative 

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1 shall have the same authority to enforce compliance with 

2 the regulation as the Commodity Futures Trading Commis3 sion has to enforce compliance with any regulation of simi4 lar conduct with respect to a contract, agreement, or trans5 action over which the Commodity Futures Trading Com6 mission has jurisdiction, except that any enforcement by 

7 the Federal Energy Regulatory Commission shall be pursu8 ant to section 222 and Part III. 

9 ‘‘(f) PROHIBITION ON PRICE OR MARKET MANIPULA10 TION, FRAUD, AND FALSE OR MISLEADING STATEMENTS OR

11 REPORTS.—(1) It shall be a felony punishable by a fine 

12 of not more than $25,000,000 (or $5,000,000 in the case 

13 of a person who is an individual) or imprisonment for not 

14 more than 20 years, or both, together with the costs of pros15 ecution for any person, directly or indirectly— 

16 ‘‘(A) in connection with a transaction involving 

17 a regulated instrument, to knowingly— 

18 ‘‘(i) use any manipulative or deceptive de19 vice or contrivance in violation of regulations 

20 promulgated pursuant to this section; 

21 ‘‘(ii) corner or attempt to corner the regu22 lated instrument; or 

23 ‘‘(iii) cheat or defraud, or attempt to cheat 

24 or defraud, any other person; 

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1 ‘‘(B) to knowingly deliver or cause to be deliv2 ered a false, misleading, or inaccurate report con3 cerning information or conditions that affect or tend 

4 to affect the price of a regulated instrument; 

5 ‘‘(C) to knowingly make, or cause to be made, in 

6 an application, report, or document required to be 

7 filed under any regulation promulgated pursuant to 

8 this section, a statement which is false or misleading 

9 with respect to a material fact, or to omit any mate10 rial fact required to be stated therein or necessary to 

11 make the statements therein not misleading; or 

12 ‘‘(D) to knowingly falsify, conceal, or cover up 

13 by any trick, scheme, or artifice a material fact, make 

14 any false, fictitious, or fraudulent statements or rep15 resentations, or make or use any false writing or doc16 ument that contains a false, fictitious, or fraudulent 

17 statement or entry, to an entity on or through which 

18 transactions in regulated instruments occur, or are 

19 settled or cleared, acting in furtherance of its official 

20 duties under this section or regulations promulgated 

21 under this section. 

22 ‘‘(2) If a person is found guilty of a felony established 

23 in paragraph (1), the person may be prohibited from hold24 ing or trading regulated instruments for a period of not 

25 more than 5 years pursuant to the regulations promulgated 

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1 under this section, except that, if the person is a covered 

2 entity, the person shall be allowed to hold sufficient regu3 lated allowances to meet its compliance obligations. 

4 ‘‘(g) RELATION TO STATE LAW.—Nothing in this sec5 tion shall preclude, diminish or qualify any authority of 

6 a State or political subdivision thereof to adopt or enforce 

7 any unfair competition, antitrust, consumer protection, se8 curities, commodities or any other law or regulation, except 

9 that no such State law or regulation may relieve any person 

10 of any requirement otherwise applicable under this section. 

11 ‘‘(h) MARKET REPORTS.— 

12 ‘‘(1) COLLECTION AND ANALYSIS OF INFORMA13 TION.—The Commission, in conjunction with the Fed14 eral agency with jurisdiction over regulated allowance 

15 derivatives pursuant to subsection (c)(1), shall, on a 

16 continuous basis, collect and analyze the following in17 formation on the functioning of the markets for regu18 lated instruments established under this part: 

19 ‘‘(A) The status of, and trends in, the mar20 kets, including prices, trading volumes, trans21 action types, and trading channels and mecha22 nisms. 

23 ‘‘(B) Spikes, collapses, and volatility in 

24 prices of regulated instruments, and the causes 

25 therefor. 

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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) Evidence of fraud or manipulation in 

6 any such market, the effects on any such market 

7 of any such fraud or manipulation (or threat of 

8 fraud or manipulation) that the Commission, in 

9 conjunction with the Federal agency, has identi10 fied, and the effectiveness of corrective measures 

11 undertaken by the Commission, in conjunction 

12 with the Federal agency, to address the fraud, 

13 manipulation, or threat. 

14 ‘‘(E) The economic effects of the markets, in15 cluding to macro- and micro-economic effects of 

16 unexpected significant increases and decreases in 

17 the price of regulated instruments. 

18 ‘‘(F) Any changes in the roles, activities, or 

19 strategies of various market participants. 

20 ‘‘(G) Regional, industrial, and consumer re21 sponses to the markets, and energy investment 

22 responses to the markets. 

23 ‘‘(H) Any other issue related to the markets 

24 that the Commission, in conjunction with the en25 tities, deems appropriate. 

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1 ‘‘(2) ANNUAL REPORTS TO THE CONGRESS.— 

2 Not later than 1 month after the end of each calendar 

3 year, the Commission, in conjunction with the Fed4 eral agency, shall submit to the President, the Com5 mittee on Energy and Commerce of the House of Rep6 resentatives, and the Committee on Energy and Nat7 ural Resources of the Senate, and make available to 

8 the public, a report on the matters described in para9 graph (1) with respect to the year, including rec10 ommendations for any administrative or statutory 

11 measures the Commission, in conjunction with the 

12 Federal agency, considers necessary to address any 

13 threats to the transparency, fairness, or integrity of 

14 the markets in regulated instruments. 

15 ‘‘SEC. 402. APPLICABILITY OF PART III PROVISIONS. 

16 ‘‘(a) SECTIONS 301, 304, AND 306.—Sections 301, 304, 

17 and 306 shall not apply to this part. 

18 ‘‘(b) SECTIONS 307, 309, AND 314.—Sections 307, 309, 

19 and 314 shall only apply to section 401(c) to the extent 

20 that the Commission is delegated authority to promulgate 

21 regulations for the establishment, operation, and oversight 

22 of markets for regulated allowance derivatives (as defined 

23 in section 401). If the Commission is not delegated author24 ity to promulgate regulations for the establishment, oper25 ation, and oversight of markets for regulated allowance demstockstill on PROD1PC66 with BILLS

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1 rivatives, sections 307, 309, and 314 shall not apply to sec2 tion 401(f) in the case of regulated allowance derivatives. 

3 ‘‘(c) SECTION 315.—In applying section 315(a) to this 

4 part, the words ‘‘person or entity’’ shall be substituted for 

5 the words ‘‘licensee or public utility’’. In applying section 

6 315(b) to this part, the words ‘‘an entity’’ shall be sub7 stituted for the words ‘‘a licensee or public utility’’ and the 

8 words ‘‘such entity’’ shall be substituted for the words ‘‘such 

9 licensee or public utility.’’ 

10 ‘‘(d) SECTION 316.—Section 316(a) shall not apply to 

11 section 401(f).’’. 

12 Subtitle E—Additional Market 

13 Assurance 

14 SEC. 351. REGULATION OF CERTAIN TRANSACTIONS IN DE15 RIVATIVES INVOLVING ENERGY COMMOD16 ITIES. 

17 (a) ENERGY COMMODITY DEFINED.—Section 1a of the 

18 Commodity Exchange Act (7 U.S.C. 1a) is amended— 

19 (1) in paragraph (14), by inserting ‘‘, an energy 

20 commodity,’’ after ‘‘excluded commodity’’; 

21 (2) by redesignating paragraphs (13) through 

22 (21) and paragraphs (22) through (34) as paragraphs 

23 (14) through (22) and paragraphs (24) through (36), 

24 respectively; 

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1 (3) by inserting after paragraph (12) the fol2 lowing: 

3 ‘‘(13) ENERGY COMMODITY.—The term ‘energy 

4 commodity’ means— 

5 ‘‘(A) coal; 

6 ‘‘(B) crude oil, gasoline, diesel fuel, jet fuel, 

7 heating oil, and propane; 

8 ‘‘(C) electricity (excluding financial trans9 mission rights which are subject to regulation 

10 and oversight by the Federal Energy Regulatory 

11 Commission); 

12 ‘‘(D) natural gas; and 

13 ‘‘(E) any other substance (other than an ex14 cluded commodity, a metal, or an agricultural 

15 commodity) that is used as a source of energy, 

16 as the Commission, in its discretion, deems ap17 propriate.’’; and 

18 (4) by inserting after paragraph (22) (as so re19 designated by paragraph (2) of this subsection) the 

20 following: 

21 ‘‘(23) INCLUDED ENERGY TRANSACTION.—The 

22 term ‘included energy transaction’ means a contract, 

23 agreement, or transaction in an energy commodity 

24 for future delivery that provides for a delivery point 

25 of the energy commodity in the United States or a 

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1 territory or possession of the United States, or that is 

2 offered or transacted on or through a computer ter3 minal located in the United States.’’. 

4 (b) EXTENSION OF REGULATORY AUTHORITY TO

5 SWAPS INVOLVING ENERGY TRANSACTIONS.—Section 2(g) 

6 of such Act (7 U.S.C. 2(g)) is amended by inserting ‘‘or 

7 an energy commodity’’ after ‘‘agricultural commodity’’. 

8 (c) ELIMINATION OF EXEMPTION FOR OVER-THE9 COUNTER SWAPS INVOLVING ENERGY COMMODITIES.—Sec10 tion 2(h)(1) of such Act (7 U.S.C. 2(h)(1)) is amended by 

11 inserting ‘‘(other than an energy commodity)’’ after ‘‘ex12 empt commodity’’. 

13 (d) EXTENSION OF REGULATORY AUTHORITY TO IN14 CLUDED ENERGY TRANSACTIONS ON FOREIGN BOARDS OF

15 TRADE.—Section 4 of such Act (7 U.S.C. 6) is amended— 

16 (1) in subsection (a), by inserting ‘‘, and which 

17 is not an included energy transaction’’ after ‘‘terri18 tories or possessions’’ the 2nd place it appears; and 

19 (2) in subsection (b), by adding at the end the 

20 following: ‘‘The preceding sentence shall not apply 

21 with respect to included energy transactions.’’. 

22 (e) LIMITATION OF GENERAL EXEMPTIVE AUTHORITY

23 OF THE CFTC WITH RESPECT TO INCLUDED ENERGY

24 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 fol3 lowing: 

4 ‘‘(6) The Commission may not exempt any included 

5 energy transaction from the requirements of subsection (a), 

6 unless the Commission provides 60 days advance notice to 

7 the Congress and the Position Limit Energy Advisory 

8 Group and solicits public comment about the exemption re9 quest 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 the 

17 Commodity Exchange Act) to be conducted without 

18 regard to the requirements of section 4(a) of such Act 

19 shall be null and void. 

20 (f) REQUIREMENT TO ESTABLISH UNIFORM SPECULA21 TIVE 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 aggregate 

4 number of positions which may be held by any 

5 person for each month across all markets subject 

6 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 convene 

14 a Position Limit Energy Advisory Group consisting of rep15 resentatives 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 deriva23 tives transaction execution facility upon which a con24 tract in the energy commodity for future delivery is 

25 traded, and each electronic trading facility that has 

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1 a significant price discovery contract in the energy 

2 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 the 

7 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 and 

10 positions from position limits imposed under this Act on 

11 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 amend6 ed— 

7 (i) in the heading by striking ‘‘LIMITA8 TIONS 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 ‘‘LIMITA16 TIONS OR’’; and 

17 (ii) by striking ‘‘position limits or’’. 

18 (g) ELIMINATION OF THE SWAPS LOOPHOLE.—Section 

19 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 hedgmstockstill on PROD1PC66 with BILLS

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1 ing transaction or position as a transaction or position 

2 that— 

3 ‘‘(A)(i) represents a substitute for transactions 

4 made or to be made or positions taken or to be taken 

5 at a later time in a physical marketing channel; 

6 ‘‘(ii) is economically appropriate to the reduc7 tion of risks in the conduct and management of a 

8 commercial enterprise; and 

9 ‘‘(iii) arises from the potential change in the 

10 value of— 

11 ‘‘(I) assets that a person owns, produces, 

12 manufactures, processes, or merchandises or an13 ticipates owning, producing, manufacturing, 

14 processing, or merchandising; 

15 ‘‘(II) liabilities that a person owns or an16 ticipates incurring; or 

17 ‘‘(III) services that a person provides, pur18 chases, or anticipates providing or purchasing; 

19 or 

20 ‘‘(B) reduces risks attendant to a position result21 ing from a transaction that— 

22 ‘‘(i) was executed pursuant to subsection 

23 (d), (g), (h)(1), or (h)(2) of section 2, or an ex24 emption issued by the Commission by rule, regu25 lation or order; and 

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1 ‘‘(ii) was executed opposite a counterparty 

2 for which the transaction would qualify as a 

3 bona fide hedging transaction pursuant to para4 graph (2)(A) of this subsection.’’. 

5 (h) DETAILED REPORTING AND DISAGGREGATION OF

6 MARKET DATA.—Section 4 of such Act (7 U.S.C. 6) is 

7 amended by adding at the end the following: 

8 ‘‘(e) DETAILED REPORTING AND DISAGGREGATION OF

9 MARKET DATA.— 

10 ‘‘(1) INDEX TRADERS AND SWAP DEALERS RE11 PORTING.—The Commission shall issue a proposed 

12 rule defining and classifying index traders and swap 

13 dealers (as those terms are defined by the Commis14 sion) for purposes of data reporting requirements and 

15 setting routine detailed reporting requirements for 

16 any positions of such entities in contracts traded on 

17 designated contract markets, over-the-counter markets, 

18 derivatives transaction execution facilities, foreign 

19 boards of trade subject to section 4(f), and electronic 

20 trading facilities with respect to significant price dis21 covery contracts not later than 120 days after the 

22 date of the enactment of this subsection, and issue a 

23 final rule within 180 days after such date of enact24 ment. 

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1 ‘‘(2) DISAGGREGATION OF INDEX FUNDS AND

2 OTHER DATA IN MARKETS.—Subject to section 8 and 

3 beginning within 60 days of the issuance of the final 

4 rule required by paragraph (1), the Commission shall 

5 disaggregate and make public weekly— 

6 ‘‘(A) the number of positions and total no7 tional value of index funds and other passive, 

8 long-only and short-only positions (as defined by 

9 the Commission) in all markets to the extent 

10 such information is available; and 

11 ‘‘(B) data on speculative positions relative 

12 to bona fide physical hedgers in those markets to 

13 the extent such information is available. 

14 ‘‘(3) DISCLOSURE OF IDENTITY OF HOLDERS OF

15 POSITIONS IN INDEXES IN EXCESS OF POSITION LIM16 ITS.—The Commission shall include in its weekly 

17 Commitment of Trader reports the identity of each 

18 person who holds a position in an index in excess of 

19 a limit imposed under section 4i.’’. 

20 (i) AUTHORITY TO SET LIMITS TO PREVENT EXCES21 SIVE SPECULATION IN INDEXES.— 

22 (1) IN GENERAL.—Section 4a of such Act (7 

23 U.S.C. 6a) is amended by adding at the end the fol24 lowing: 

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1 ‘‘(f) The provisions of this section shall apply to the 

2 amounts of trading which may be done or positions which 

3 may be held by any person under contracts of sale of an 

4 index for future delivery on or subject to the rules of any 

5 contract market, derivatives transaction execution facility, 

6 or over-the-counter market, or on an electronic trading fa7 cility with respect to a significant price discovery contract, 

8 in the same manner in which this section applies to con9 tracts of sale of a commodity for future delivery.’’. 

10 (2) REGULATIONS.—The Commodity Futures 

11 Trading Commission shall issue regulations under 

12 section 4a(f) of the Commodity Exchange Act within 

13 180 days after the date of the enactment of this Act. 

14 SEC. 352. NO EFFECT ON AUTHORITY OF THE FEDERAL EN15 ERGY REGULATORY COMMISSION. 

16 Section 2 of the Commodity Exchange Act (7 U.S.C. 

17 2) is amended by adding at the end the following:. 

18 ‘‘(j) This Act shall not be interpreted to affect the juris19 diction of the Federal Energy Regulatory Commission with 

20 respect to the authority of the Federal Energy Regulatory 

21 Commission under the Federal Power Act (16 U.S.C. 791a 

22 et seq.), the Natural Gas Act (15 U.S.C. 717 et seq.), or 

23 other law to obtain information, carry out enforcement ac24 tions, or otherwise carry out the responsibilities of the Fed25 eral Energy Regulatory Commission.’’. 

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1 SEC. 353. INSPECTOR GENERAL OF THE COMMODITY FU2 TURES TRADING COMMISSION. 

3 (a) ELEVATION OF OFFICE.— 

4 (1) INCLUSION OF CFTC IN DEFINITION OF ES5 TABLISHMENT.— 

6 (A) Section 12(1) of the Inspector General 

7 Act of 1978 (5 U.S.C. App.) is amended by strik8 ing ‘‘or the Federal Cochairpersons of the Com9 missions established under section 15301 of title 

10 40, United States Code;’’ and inserting ‘‘the Fed11 eral Cochairpersons of the Commissions estab12 lished under section 15301 of title 40, United 

13 States Code; or the Chairman of the Commodity 

14 Futures Trading Commission;’’. 

15 (B) Section 12(2) of the Inspector General 

16 Act of 1978 (5 U.S.C. App.) is amended by strik17 ing ‘‘or the Commissions established under sec18 tion 15301 of title 40, United States Code,’’ and 

19 inserting ‘‘the Commissions established under 

20 section 15301 of title 40, United States Code, or 

21 the Commodity Futures Trading Commission,’’. 

22 (2) EXCLUSION OF CFTC FROM DEFINITION OF

23 DESIGNATED FEDERAL ENTITY.—Section 8G(a)(2) of 

24 the Inspector General Act of 1978 (5 U.S.C. App.) is 

25 amended by striking ‘‘the Commodity Futures Trad26 ing Commission,’’. 

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1 (b) EFFECTIVE DATE; TRANSITION RULE.— 

2 (1) EFFECTIVE DATE.—The amendments made 

3 by this section shall take effect 30 days after the date 

4 of the enactment of this Act. 

5 (2) TRANSITION RULE.—An individual serving 

6 as Inspector General of the Commodity Futures Trad7 ing Commission on the effective date of this section 

8 pursuant to an appointment made under section 8G 

9 of the Inspector General Act of 1978 (5 U.S.C. 

10 App.)— 

11 (A) may continue so serving until the Presi12 dent makes an appointment under section 3(a) 

13 of such Act consistent with the amendments 

14 made by this section; and 

15 (B) shall, while serving under subparagraph 

16 (A), remain subject to the provisions of section 

17 8G of such Act which apply with respect to the 

18 Commodity Futures Trading Commission. 

19 SEC. 354. SETTLEMENT AND CLEARING THROUGH REG20 ISTERED DERIVATIVES CLEARING ORGANIZA21 TIONS. 

22 (a) IN GENERAL.— 

23 (1) APPLICATION TO EXCLUDED DERIVATIVE

24 TRANSACTIONS.— 

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1 (A) Section 2(d)(1) of the Commodity Ex2 change Act (7 U.S.C. 2(d)(1)) is amended— 

3 (i) by striking ‘‘and’’ at the end of sub4 paragraph (A); 

5 (ii) by striking the period at the end of 

6 subparagraph (B) and inserting ‘‘; and’’; 

7 and 

8 (iii) by adding at the end the fol9 lowing: 

10 ‘‘(C) except as provided in section 4(f), the 

11 agreement, contract, or transaction is settled and 

12 cleared through a derivatives clearing organiza13 tion registered with the Commission.’’. 

14 (B) Section 2(d)(2) of such Act (7 U.S.C. 

15 2(d)(2)) is amended— 

16 (i) by striking ‘‘and’’ at the end of sub17 paragraph (B); 

18 (ii) by striking the period at the end of 

19 subparagraph (C) and inserting ‘‘; and’’; 

20 and 

21 (iii) by adding at the end the fol22 lowing: 

23 ‘‘(D) except as provided in section 4(f), the 

24 agreement, contract, or transaction is settled and 

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1 cleared through a derivatives clearing organiza2 tion registered with the Commission.’’. 

3 (2) APPLICATION TO CERTAIN SWAP TRANS4 ACTIONS.—Section 2(g) of such Act (7 U.S.C. 2(g)) is 

5 amended— 

6 (A) by striking ‘‘and’’ at the end of para7 graph (2); 

8 (B) by striking the period at the end of 

9 paragraph (3) and inserting ‘‘; and’’; and 

10 (C) by adding at the end the following: 

11 ‘‘(4) except as provided in section 4(f), settled 

12 and cleared through a derivatives clearing organiza13 tion registered with the Commission.’’. 

14 (3) APPLICATION TO CERTAIN TRANSACTIONS IN

15 EXEMPT COMMODITIES.— 

16 (A) Section 2(h)(1) of such Act ( 7 U.S.C. 

17 2(h)(1)) is amended— 

18 (i) by striking ‘‘and’’ at the end of sub19 paragraph (A); 

20 (ii) by striking the period at the end of 

21 subparagraph (B) and inserting ‘‘; and’’; 

22 and 

23 (iii) by adding at the end the fol24 lowing: 

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1 ‘‘(C) except as provided in section 4(f), is 

2 settled and cleared through a derivatives clearing 

3 organization registered with the Commission.’’. 

4 (B) Section 2(h)(3) of such Act (7 U.S.C. 

5 2(h)(3)) is amended— 

6 (i) by striking ‘‘and’’ at the end of sub7 paragraph (A); 

8 (ii) by striking the period at the end of 

9 subparagraph (B) and inserting ‘‘; and’’; 

10 and 

11 (iii) by adding at the end the fol12 lowing: 

13 ‘‘(C) except as provided in section 4(f), set14 tled and cleared through a derivatives clearing 

15 organization registered with the Commission.’’. 

16 (4) GENERAL EXEMPTIVE AUTHORITY.—Section 

17 4(c)(1) of such Act (7 U.S.C. 6(c)(1)) is amended by 

18 inserting ‘‘the agreement, contract, or transaction, ex19 cept as provided in section 4(h), will be settled and 

20 cleared through a derivatives clearing organization 

21 registered with the Commission and’’ before ‘‘the 

22 Commission determines’’. 

23 (5) CONFORMING AMENDMENT RELATING TO SIG24 NIFICANT PRICE DISCOVERY CONTRACTS.—Section 

25 2(h)(7)(D) of such Act (7 U.S.C. 2(h)(7)(D)) is 

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1 amended by striking the designation and heading for 

2 the subparagraph and all that follows through ‘‘As 

3 part of’’ and inserting the following: 

4 ‘‘(D) REVIEW OF IMPLEMENTATION.—As 

5 part of’’. 

6 (b) ALTERNATIVES TO CLEARING THROUGH DES7 IGNATED CLEARING ORGANIZATIONS.—Section 4 of such 

8 Act (7 U.S.C. 6), as amended by section 351(h) of this Act, 

9 is amended by adding at the end the following: 

10 ‘‘(f) ALTERNATIVES TO CLEARING THROUGH DES11 IGNATED CLEARING ORGANIZATIONS.— 

12 ‘‘(1) SETTLEMENT AND CLEARING THROUGH

13 CERTAIN OTHER REGULATED ENTITIES.—An agree14 ment, contract, or transaction, or class thereof, relat15 ing to an excluded commodity, that would otherwise 

16 be required to be settled and cleared by section 

17 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or 

18 2(h)(3)(C) of this Act, or subsection (c)(1) of this sec19 tion may be settled and cleared through an entity list20 ed in subsections (a) or (b) of section 409 of the Fed21 eral Deposit Insurance Corporation Improvement Act 

22 of 1991. 

23 ‘‘(2) WAIVER OF CLEARING REQUIREMENT.— 

24 ‘‘(A) The Commission, in its discretion, 

25 may exempt an agreement, contract, or transmstockstill on PROD1PC66 with BILLS

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1 action, or class thereof, that would otherwise be 

2 required by section 2(d)(1)(C), 2(d)(2)(D), 

3 2(g)(4), 2(h)(1)(C), or 2(h)(3)(C) of this Act, or 

4 subsection (c)(1) of this section to be settled and 

5 cleared through a derivatives clearing organiza6 tion registered with the Commission from such 

7 requirement. 

8 ‘‘(B) In granting exemptions pursuant to 

9 subparagraph (A), the Commission shall consult 

10 with the Securities and Exchange Commission 

11 and the Board of Governors of the Federal Re12 serve System regarding exemptions that relate to 

13 excluded commodities or entities for which the 

14 Securities Exchange Commission or the Board of 

15 Governors of the Federal Reserve System serve as 

16 the primary regulator. 

17 ‘‘(C) Before granting an exemption pursu18 ant to subparagraph (A), the Commission shall 

19 find that the agreement, contract, or transaction, 

20 or class thereof— 

21 ‘‘(i) is highly customized as to its ma22 terial terms and conditions; 

23 ‘‘(ii) is transacted infrequently; 

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1 ‘‘(iii) does not serve a significant 

2 price-discovery function in the marketplace; 

3 and 

4 ‘‘(iv) is being entered into by parties 

5 who can demonstrate the financial integrity 

6 of the agreement, contract, or transaction 

7 and their own financial integrity, as such 

8 terms and standards are determined by the 

9 Commission. The standards may include, 

10 with respect to any federally regulated fi11 nancial entity for which net capital require12 ments are imposed, a net capital require13 ment associated with any agreement, con14 tract, or transaction subject to an exemp15 tion from the clearing requirement that is 

16 higher than the net capital requirement that 

17 would be associated with such a transaction 

18 were it cleared 

19 ‘‘(D) Any agreement, contract, or trans20 action, or class thereof, which is exempted pursu21 ant to subparagraph (A) shall be reported to the 

22 Commission in a manner designated by the 

23 Commission, or to such other entity the Commis24 sion deems appropriate. 

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1 ‘‘(E) The Commission, the Securities and 

2 Exchange Commission and the Board of Gov3 ernors of the Federal Reserve System shall enter 

4 into a memorandum of understanding by which 

5 the information reported to the Commission pur6 suant to subparagraph (D) with regard to ex7 cluded commodities or entities for which the Se8 curities Exchange Commission or the Board of 

9 Governors of the Federal Reserve System serve as 

10 the primary regulator may be provided to the 

11 other agencies. 

12 ‘‘(g) SPOT AND FORWARD EXCLUSION.—The settle13 ment and clearing requirements of section 2(d)(1)(C), 

14 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 2(h)(3)(C), or 4(c)(1) shall 

15 not apply to an agreement, contract, or transaction of any 

16 cash commodity for immediate or deferred shipment or de17 livery, as defined by the Commission.’’. 

18 (c) ADDITIONAL REQUIREMENTS APPLICABLE TO AP19 PLICANTS FOR REGISTRATION AS A DERIVATIVE CLEARING

20 ORGANIZATION.—Section 5b(c)(2) of such Act (7 U.S.C. 7a21 1(c)(2)) is amended by adding at the end the following: 

22 ‘‘(O) DISCLOSURE OF GENERAL INFORMA23 TION.—The applicant shall disclose publicly and 

24 to the Commission information concerning— 

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1 ‘‘(i) the terms and conditions of con2 tracts, agreements, and transactions cleared 

3 and settled by the applicant; 

4 ‘‘(ii) the conventions, mechanisms, and 

5 practices applicable to the contracts, agree6 ments, and transactions; 

7 ‘‘(iii) the margin-setting methodology 

8 and the size and composition of the finan9 cial resource package of the applicant; and 

10 ‘‘(iv) other information relevant to 

11 participation in the settlement and clearing 

12 activities of the applicant. 

13 ‘‘(P) DAILY PUBLICATION OF TRADING IN14 FORMATION.—The applicant shall make public 

15 daily information on settlement prices, volume, 

16 and open interest for contracts settled or cleared 

17 pursuant to the requirements of section 

18 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 

19 2(h)(3)(C) or 4(c)(1) of this Act by the applicant 

20 if the Commission determines that the contracts 

21 perform a significant price discovery function 

22 for transactions in the cash market for the com23 modity underlying the contracts. 

24 ‘‘(Q) FITNESS STANDARDS.—The applicant 

25 shall establish and enforce appropriate fitness 

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1 standards for directors, members of any discipli2 nary committee, and members of the applicant, 

3 and any other persons with direct access to the 

4 settlement or clearing activities of the applicant, 

5 including any parties affiliated with any of the 

6 persons described in this subparagraph.’’. 

7 (d) AMENDMENTS.— 

8 (1) Section 409 of the Federal Deposit Insurance 

9 Corporation Improvement Act of 1991 (12 U.S.C. 

10 4422) is amended by adding at the end the following: 

11 ‘‘(c) CLEARING REQUIREMENT.—A multilateral clear12 ing organization described in subsections (a) or (b) of this 

13 section shall comply with requirements similar to the re14 quirements of sections 5b and 5c of the Commodity Ex15 change Act.’’. 

16 (2) Section 407 of the Legal Certainty for Bank 

17 Products Act of 2000 (7 U.S.C. 27e) is amended by 

18 inserting ‘‘and the settlement and clearing require19 ments of sections 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 

20 2(h)(1)(C), 2(h)(3)(C), and 4(c)(1) of such Act’’ after 

21 ‘‘the clearing of covered swap agreements’’. 

22 (e) EFFECTIVE DATE.—The amendments made by this 

23 section shall take effect 150 days after the date of the enact24 ment of this Act. 

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1 (f) TRANSITION RULE.—Any agreement, contract, or 

2 transaction entered into before the date of the enactment 

3 of this Act or within 150 days after such date of enactment, 

4 in reliance on subsection (d), (g), (h)(1), or (h)(3) of section 

5 2 of the Commodity Exchange Act or any other exemption 

6 issued by the Commission Futures Trading Commission by 

7 rule, regulation, or order shall, within 90 days after such 

8 date of enactment, unless settled and cleared through an en9 tity registered with the Commission as a derivatives clear10 ing organization or another clearing entity pursuant to sec11 tion 4(f) of such Act, be reported to the Commission in a 

12 manner designated by the Commission, or to such other en13 tity as the Commission deems appropriate. 

14 SEC. 355. LIMITATION ON ELIGIBILITY TO PURCHASE A 

15 CREDIT DEFAULT SWAP. 

16 (a) IN GENERAL.—Section 4c of the Commodity Ex17 change Act (7 U.S.C. 6c) is amended by adding at the end 

18 the following: 

19 ‘‘(h) LIMITATION ON ELIGIBILITY TO PURCHASE A

20 CREDIT DEFAULT SWAP.—It shall be unlawful for any per21 son to enter into a credit default swap unless the person— 

22 ‘‘(1) owns a credit instrument which is insured 

23 by the credit default swap; 

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1 ‘‘(2) would experience financial loss if an event 

2 that is the subject of the credit default swap occurs 

3 with respect to the credit instrument; and 

4 ‘‘(3) meets such minimum capital adequacy 

5 standards as may be established by the Commission, 

6 in consultation with the Board of Governors of the 

7 Federal Reserve System, or such more stringent min8 imum capital adequacy standards as may be estab9 lished by or under the law of any State in which the 

10 swap is originated or entered into, or in which pos11 session of the contract involved takes place.’’. 

12 (b) ELIMINATION OF PREEMPTION OF STATE

13 BUCKETING LAWS REGARDING NAKED CREDIT DEFAULT

14 SWAPS.—Section 12(e)(2)(B) of such Act (7 U.S.C. 

15 16(e)(2)(B)) is amended by inserting ‘‘(other than a credit 

16 default swap in which the purchaser of the swap would not 

17 experience financial loss if an event that is the subject of 

18 the swap occurred)’’ before ‘‘that is excluded’’. 

19 (c) DEFINITION OF CREDIT DEFAULT SWAP.—Section 

20 1a of such Act (7 U.S.C. 1a), as amended by section 351(a) 

21 of this Act, is amended by adding at the end the following: 

22 ‘‘(37) CREDIT DEFAULT SWAP.—The term ‘credit 

23 default swap’ means a contract which insures a party 

24 to the contract against the risk that an entity may 

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1 ified in the contract, such as a default or credit down2 grade. A credit default swap that is traded on or 

3 cleared by a registered entity shall be excluded from 

4 the definition of a security as defined in this Act and 

5 in section 2(a)(1) of the Securities Act of 1933 or sec6 tion 3(a)(10) of the Securities Exchange Act of 1934, 

7 except it shall be deemed a security solely for purpose 

8 of enforcing prohibitions against insider trading in 

9 sections 10 and 16 of the Securities Exchange Act of 

10 1934.’’. 

11 (d) EFFECTIVE DATE.—The amendments made by this 

12 section shall be effective for credit default swaps (as defined 

13 in section 1a(37) of the Commodity Exchange Act) entered 

14 into after 60 days after the date of the enactment of this 

15 section. 

16 SEC. 356. TRANSACTION FEES. 

17 (a) IN GENERAL.—Section 12 of the Commodity Ex18 change Act (7 U.S.C. 16) is amended by redesignating sub19 sections (e), (f), and (g) as subsections (f), (g), and (h), re20 spectively, and inserting after subsection (d) the following: 

21 ‘‘(e) CLEARING FEES.— 

22 ‘‘(1) IN GENERAL.—The Commission shall, in 

23 accordance with this subsection, charge and collect 

24 from each registered clearing organization, and each 

25 such organization shall pay to the Commission, transmstockstill on PROD1PC66 with BILLS

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1 action fees at a rate calculated to recover the costs to 

2 the Federal Government of the supervision and regu3 lation of futures markets, except those directly related 

4 to enforcement. 

5 ‘‘(2) FEES ASSESSED PER SIDE OF CLEARED

6 CONTRACTS.— 

7 ‘‘(A) IN GENERAL.—The Commission shall 

8 determine the fee rate referred to in paragraph 

9 (1), and shall apply the fee rate per side of any 

10 transaction cleared. 

11 ‘‘(B) AUTHORITY TO DELEGATE.— The 

12 Commission may determine the procedures by 

13 which the fee rate is to be applied on the trans14 actions subject to the fee, or delegate the author15 ity to make the determination to any appro16 priate derivatives clearing organization. 

17 ‘‘(3) EXEMPTIONS.—The Commission may not 

18 impose a fee under paragraph (1) on— 

19 ‘‘(A) a class of contracts or transactions if 

20 the Commission finds that it is in the public in21 terest to exempt the class from the fee; or 

22 ‘‘(B) a contract or transaction cleared by a 

23 registered derivatives clearing organization that 

24 is— 

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1 ‘‘(i) subject to fees under section 31 of 

2 the Securities Exchange Act of 1934; or 

3 ‘‘(ii) a security as defined in the Secu4 rities Act of 1933 or the Securities Ex5 change Act of 1934. 

6 ‘‘(4) DATES FOR PAYMENT OF FEES.—The fees 

7 imposed under paragraph (1) shall be paid on or be8 fore— 

9 ‘‘(A) March 15 of each year, with respect to 

10 transactions occurring on or after the preceding 

11 September 1 and on or before the preceding De12 cember 31; and 

13 ‘‘(B) September 15 of each year, with re14 spect to transactions occurring on or after the 

15 preceding January 1 and on or before the pre16 ceding August 31. 

17 ‘‘(5) ANNUAL ADJUSTMENT OF FEE RATES.— 

18 ‘‘(A) IN GENERAL.—Not later than April 30 

19 of each fiscal year , the Commission shall, by 

20 order, adjust each fee rate determined under 

21 paragraph (2) for the fiscal year to a uniform 

22 adjusted rate that, when applied to the estimated 

23 aggregate number of cleared sides of transactions 

24 for the fiscal year, is reasonably likely to produce 

25 aggregate fee receipts under this subsection for 

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1 the fiscal year equal to the target offsetting re2 ceipt amount for the fiscal year. 

3 ‘‘(B) DEFINITIONS.—In subparagraph (A): 

4 ‘‘(i) ESTIMATED AGGREGATE NUMBER

5 OF CLEARED SIDES OF TRANSACTIONS.— 

6 The term ‘estimated aggregate number of 

7 cleared sides of transactions’ means, with 

8 respect to a fiscal year, the aggregate num9 ber of cleared sides of transactions to be 

10 cleared by registered derivatives clearing or11 ganizations during the fiscal year, as esti12 mated by the Commission, after consulta13 tion with the Office of Management and 

14 Budget, using the methodology required for 

15 making projections pursuant to section 257 

16 of the Balanced Budget and Emergency Def17 icit Control Act of 1985. 

18 ‘‘(ii) TARGET OFFSETTING RECEIPT

19 AMOUNT.—The term ‘target offsetting re20 ceipt amount’ means, with respect to a fis21 cal year, the total level of Commission budg22 et authority for all non-enforcement activi23 ties of the Commission, as contained in the 

24 regular appropriations Acts for the fiscal 

25 year. 

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1 ‘‘(C) NO JUDICIAL REVIEW.—An adjusted 

2 fee rate prescribed under subparagraph (A) shall 

3 not be subject to judicial review. 

4 ‘‘(6) PUBLICATION.—Not later than April 30 of 

5 each fiscal year, the Commission shall cause to be 

6 published in the Federal Register notices of the fee 

7 rates applicable under this subsection for the suc8 ceeding fiscal year, and any estimate or projection on 

9 which the fee rates are based. 

10 ‘‘(7) INAPPLICABILITY OF CERTAIN PROCEDURAL

11 RULES.—Section 553 of title 5, United States Code, 

12 shall not apply with respect to any exercise of author13 ity under this subsection. 

14 ‘‘(8) ESTABLISHMENT OF FUTURES AND OPTIONS

15 TRANSACTION FEE ACCOUNT; DEPOSIT OF FEES.— 

16 There is established in the Treasury of the United 

17 States an account which shall be known as the ‘Fu18 tures and Options Transaction Fee Account’. All fees 

19 collected under this subsection for a fiscal year shall 

20 be deposited in the account. Amounts in the account 

21 are authorized to be appropriated to fund the expend22 itures of the Commission.’’. 

23 (b) EFFECTIVE DATE.—The amendments made by sub24 section (a) shall apply to fiscal years beginning 30 or more 

25 days after the date of the enactment of this Act. 

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1 (c) TRANSITION RULE.—If this section becomes law 

2 after March 31 and before September 1 of a fiscal year, 

3 then paragraphs (5)(A) and (6) of section 12(e) of the Com4 modity Exchange Act shall be applied, in the case of the 

5 1st fiscal year beginning after the date of the enactment 

6 of this Act, by substituting ‘‘August 31’’ for ‘‘April 30’’. 

7 SEC. 357. NO EFFECT ON AUTHORITY OF THE FEDERAL 

8 TRADE COMMISSION. 

9 Nothing in this subtitle shall be interpreted to affect 

10 or diminish the jurisdiction or authority of the Federal 

11 Trade Commission with respect to its authorities under the 

12 Federal Trade Commission Act (15 U.S.C. 41 et seq.) or 

13 the Energy Independence and Security Act of 2007 (Public 

14 Law 110–140) to obtain information, to carry out enforce15 ment activities or otherwise carry out the responsibilities 

16 of the Federal Trade Commission. 

17 SEC. 358. REGULATION OF CARBON DERIVATIVES MARKETS. 

18 (a) DEFAULT RULE.—Section 2 of the Commodity Ex19 change Act (7 U.S.C. 2), as amended by section 352 of this 

20 Act, is amended by adding at the end the following: 

21 ‘‘(k) The Commission shall have jurisdiction over the 

22 establishment, operations, and oversight of markets for reg23 ulated allowance derivatives (as defined in section 401 of 

24 the Federal Power Act (16 U.S.C. 791a and following)), and 

25 shall provide for the establishment, operation, and oversight 

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1 of the markets in accordance with the same regulations that 

2 apply under this Act to included energy transactions.’’. 

3 (b) PRESIDENTIAL DETERMINATIONS.—To the extent 

4 that the President delegates the authority to promulgate reg5 ulations for the establishment, operation, and oversight of 

6 all markets for regulated allowance derivatives to a Federal 

7 agency other than the Commodity Futures Trading Com8 mission pursuant to section 401 of the Federal Power Act, 

9 such determination shall supersede subsection (a). To the 

10 extent that the President determines that regulations pro11 mulgated pursuant to section 401(c)(2) of the Federal 

12 Power Act would provide for more stringent and effective 

13 market oversight, such regulations shall supersede sub14 section (a). Nothing in this section shall be construed to 

15 affect the operation of the default rules established in section 

16 401(c)(4) of the Federal Power Act. 

17 SEC. 359. CEASE-AND-DESIST AUTHORITY. 

18 (a) NATURAL GAS ACT.—Section 20 of the Natural 

19 Gas Act (15 U.S.C. 717s) is amended by adding the fol20 lowing at the end: 

21 ‘‘(e) CEASE-AND-DESIST PROCEEDINGS; TEMPORARY

22 ORDERS; AUTHORITY OF THE COMMISSION.— 

23 ‘‘(1) IN GENERAL.—If the Commission finds, 

24 after notice and opportunity for hearing, that any en25 tity may be violating, may have violated, or may be 

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1 about to violate any provision of this Act, or any 

2 rule, regulation, restriction, condition, or order made 

3 or imposed by the Commission under the authority of 

4 this Act, the Commission may publish its findings 

5 and issue an order requiring such entity, and any 

6 other entity that is, was, or would be a cause of the 

7 violation, due to an act or omission the entity knew 

8 or should have known would contribute to such viola9 tion, to cease and desist from committing or causing 

10 such violation and any future violation of the same 

11 provision, rule, or regulation. Such order may, in ad12 dition to requiring an entity to cease and desist from 

13 committing or causing a violation, require such enti14 ty to comply, to provide an accounting and 

15 disgorgement, or to take steps to effect compliance, 

16 with such provision, rule, or regulation, upon such 

17 terms and conditions and within such time as the 

18 Commission may specify in such order. Any such 

19 order may, as the Commission deems appropriate, re20 quire future compliance or steps to effect future com21 pliance, either permanently or for such period of time 

22 as the Commission may specify. 

23 ‘‘(2) TIMING OF ENTRY.—An order issued under 

24 this subsection shall be entered only after notice and 

25 opportunity for a hearing, unless the Commission demstockstill on PROD1PC66 with BILLS

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1 termines that notice and hearing prior to entry would 

2 be impracticable or contrary to the public interest. 

3 ‘‘(f) HEARING.—The notice instituting proceedings 

4 pursuant to subsection (e) shall fix a hearing date not ear5 lier than 30 days nor later than 60 days after service of 

6 the notice unless an earlier or a later date is set by the 

7 Commission with the consent of any respondent so served. 

8 ‘‘(g) TEMPORARY ORDER.—Whenever the Commission 

9 determines that-— 

10 ‘‘(1) a respondent may take actions to dissipate 

11 or convert assets prior to the completion of the pro12 ceedings referred to in subsection (e), and such assets 

13 would be necessary to comply with or otherwise sat14 isfy a final enforcement order of the Commission pur15 suant to alleged violations or threatened violations 

16 specified in the notice instituting proceedings; or 

17 ‘‘(2) a respondent is engaged in actual or threat18 ened violations of this Act or a Commission rule, reg19 ulation, restriction or order referred to in subsection 

20 (e), 

21 the Commission may issue a temporary order requiring the 

22 respondent to take such action to prevent dissipation or 

23 conversion of assets, significant harm to energy consumers, 

24 or substantial harm to the public interest, frustration of the 

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1 tion of the Commission’s ability to redress said violation 

2 at the conclusion of the proceedings, as the Commission 

3 deems appropriate pending completion of such proceedings. 

4 ‘‘(h) REVIEW OF TEMPORARY ORDERS.— 

5 ‘‘(1) COMMISSION REVIEW.—At any time after 

6 the respondent has been served with a temporary 

7 cease-and-desist order pursuant to subsection (g), the 

8 respondent may apply to the Commission to have the 

9 order set aside, limited, or suspended. If the respond10 ent has been served with a temporary cease-and-desist 

11 order entered without a prior Commission hearing, 

12 the respondent may, within 10 days after the date on 

13 which the order was served, request a hearing on such 

14 application and the Commission shall hold a hearing 

15 and render a decision on such application at the ear16 liest possible time. 

17 ‘‘(2) JUDICIAL REVIEW.—Within— 

18 ‘‘(A) 10 days after the date the respondent 

19 was served with a temporary cease-and-desist 

20 order entered with a prior Commission hearing; 

21 or 

22 ‘‘(B) 10 days after the Commission renders 

23 a decision on an application and hearing under 

24 paragraph (1), 

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1 with respect to any temporary cease-and-desist order 

2 entered without a prior Commission hearing, the re3 spondent may apply to the United States district 

4 court for the district in which the respondent resides 

5 or has its principal place of business, or for the Dis6 trict of Columbia, for an order setting aside, limiting, 

7 or suspending the effectiveness or enforcement of the 

8 order, and the court shall have jurisdiction to enter 

9 such an order. A respondent served with a temporary 

10 cease-and-desist order entered without a prior Com11 mission hearing may not apply to the court except 

12 after hearing and decision by the Commission on the 

13 respondent’s application under paragraph (1) of this 

14 subsection. 

15 ‘‘(3) NO AUTOMATIC STAY OF TEMPORARY

16 ORDER.—The commencement of proceedings under 

17 paragraph (2) of this subsection shall not, unless spe18 cifically ordered by the court, operate as a stay of the 

19 Commission’s order. 

20 ‘‘(4) EXCLUSIVE REVIEW.—Sections 19(d) and 

21 24 shall not apply to a temporary order entered pur22 suant to this section. 

23 ‘‘(i) IMPLEMENTATION.—The Commission is author24 ized to adopt rules, regulations, and orders as it deems ap25 propriate to implement this section.’’. 

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1 (c) NATURAL GAS POLICY ACT OF 1978.—Section 504 

2 of the Natural Gas Policy Act of 1978 (15 U.S.C. 3414) 

3 is amended by adding the following at the end: 

4 ‘‘(d) CEASE-AND-DESIST PROCEEDINGS; TEMPORARY

5 ORDERS; AUTHORITY OF THE COMMISSION.— 

6 ‘‘(1) IN GENERAL.—If the Commission finds, 

7 after notice and opportunity for hearing, that any en8 tity may be violating, may have violated, or may be 

9 about to violate any provision of this Act, or any 

10 rule, regulation, restriction, condition, or order made 

11 or imposed by the Commission under the authority of 

12 this Act, the Commission may publish its findings 

13 and issue an order requiring such entity, and any 

14 other entity that is, was, or would be a cause of the 

15 violation, due to an act or omission the entity knew 

16 or should have known would contribute to such viola17 tion, to cease and desist from committing or causing 

18 such violation and any future violation of the same 

19 provision, rule, or regulation. Such order may, in ad20 dition to requiring an entity to cease and desist from 

21 committing or causing a violation, require such enti22 ty to comply, to provide an accounting and 

23 disgorgement, or to take steps to effect compliance, 

24 with such provision, rule, or regulation, upon such 

25 terms and conditions and within such time as the 

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1 Commission may specify in such order. Any such 

2 order may, as the Commission deems appropriate, re3 quire future compliance or steps to effect future com4 pliance, either permanently or for such period of time 

5 as the Commission may specify. 

6 ‘‘(2) TIMING OF ENTRY.—An order issued under 

7 this subsection shall be entered only after notice and 

8 opportunity for a hearing, unless the Commission de9 termines that notice and hearing prior to entry would 

10 be impracticable or contrary to the public interest. 

11 ‘‘(3) HEARING.—The notice instituting pro12 ceedings pursuant to paragraph (1) shall fix a hear13 ing date not earlier than 30 days nor later than 60 

14 days after service of the notice unless an earlier or a 

15 later date is set by the Commission with the consent 

16 of any respondent so served. 

17 ‘‘(4) TEMPORARY ORDER.—Whenever the Com18 mission determines that— 

19 ‘‘(A) a respondent may take actions to dis20 sipate or convert assets prior to the completion 

21 of the proceedings referred to in paragraph (1) 

22 and such assets would be necessary to comply 

23 with or otherwise satisfy a final enforcement 

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1 lations or threatened violations specified in the 

2 notice instituting proceedings; or 

3 ‘‘(B) a respondent is engaged in actual or 

4 threatened violations of this Act or a Commis5 sion rule, regulation, restriction or order referred 

6 to in paragraph (1), 

7 the Commission may issue a temporary order requir8 ing the respondent to take such action to prevent dis9 sipation or conversion of assets, significant harm to 

10 energy consumers, or substantial harm to the public 

11 interest, frustration of the Commission’s ability to 

12 conduct the proceedings, or frustration of the Commis13 sion’s ability to redress said violation at the conclu14 sion of the proceedings, as the Commission deems ap15 propriate pending completion of such proceedings. 

16 ‘‘(5) REVIEW OF TEMPORARY ORDERS.— 

17 ‘‘(A) COMMISSION REVIEW.—At any time 

18 after the respondent has been served with a tem19 porary cease-and-desist order pursuant to para20 graph (4), the respondent may apply to the Com21 mission to have the order set aside, limited, or 

22 suspended. If the respondent has been served with 

23 a temporary cease-and-desist order entered with24 out a prior Commission hearing, the respondent 

25 may, within 10 days after the date on which the 

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1 order was served, request a hearing on such ap2 plication and the Commission shall hold a hear3 ing and render a decision on such application at 

4 the earliest possible time. 

5 ‘‘(B) JUDICIAL REVIEW.—Within— 

6 ‘‘(i) 10 days after the date the respond7 ent was served with a temporary cease-and8 desist order entered with a prior Commis9 sion hearing; or 

10 ‘‘(ii) 10 days after the Commission 

11 renders a decision on an application and 

12 hearing under subparagraph (A), with re13 spect to any temporary cease-and-desist 

14 order entered without a prior Commission 

15 hearing, the respondent may apply to the 

16 United States district court for the district 

17 in which the respondent resides or has its 

18 principal place of business, or for the Dis19 trict of Columbia, for an order setting aside, 

20 limiting, or suspending the effectiveness or 

21 enforcement of the order, and the court shall 

22 have jurisdiction to enter such an order. A 

23 respondent served with a temporary cease24 and-desist order entered without a prior 

25 Commission hearing may not apply to the 

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1 court except after hearing and decision by 

2 the Commission on the respondent’s appli3 cation under paragraph (1) of this sub4 section. 

5 ‘‘(C) NO AUTOMATIC STAY OF TEMPORARY

6 ORDER.—The commencement of proceedings 

7 under subparagraph (B) of this paragraph shall 

8 not, unless specifically ordered by the court, op9 erate as a stay of the Commission’s order. 

10 ‘‘(6) IMPLEMENTATION.—The Commission is au11 thorized to adopt rules, regulations, and orders as it 

12 deems appropriate to implement this subsection.’’. 

13 TITLE IV—TRANSITIONING TO A 

14 CLEAN ENERGY ECONOMY 

15 Subtitle A—Ensuring Real 

16 Reductions in Industrial Emissions 

17 SEC. 401. ENSURING REAL REDUCTIONS IN INDUSTRIAL 

18 EMISSIONS. 

19 Title VII of the Clean Air Act is amended by inserting 

20 after part E the following new part: 

21 ‘‘PART F—ENSURING REAL REDUCTIONS IN 

22 INDUSTRIAL EMISSIONS 

23 ‘‘SEC. 761. PURPOSES. 

24 ‘‘(a) PURPOSE OF PART.—The purposes of this part 

25 are— 

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1 ‘‘(1) to promote a strong global effort to signifi2 cantly reduce greenhouse gas emissions, and, through 

3 this global effort, stabilize greenhouse gas concentra4 tions in the atmosphere at a level that will prevent 

5 dangerous anthropogenic interference with the climate 

6 system; and 

7 ‘‘(2) to prevent an increase in greenhouse gas 

8 emissions in countries other than the United States as 

9 a result of direct and indirect compliance costs in10 curred under this title. 

11 ‘‘(b) PURPOSES OF SUBPART 1.—The purposes of sub12 part 1 are additionally— 

13 ‘‘(1) to rebate the owners and operators of enti14 ties in domestic eligible industrial sectors for their 

15 greenhouse gas emission costs incurred under this 

16 title, but not for costs associated with other related or 

17 unrelated market dynamics; 

18 ‘‘(2) to design such rebates in a way that will 

19 prevent carbon leakage while also rewarding innova20 tion and facility-level investments in energy efficiency 

21 performance improvements; and 

22 ‘‘(3) to eliminate or reduce distribution of emis23 sion allowances under this part when such distribu24 tion is no longer necessary to prevent carbon leakage 

25 from eligible industrial sectors. 

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1 ‘‘SEC. 762. INTERNATIONAL NEGOTIATIONS. 

2 ‘‘(a) FINDING.—Congress finds that the purposes of 

3 this part, as set forth in section 761, can be most effectively 

4 addressed and achieved through agreements negotiated be5 tween the United States and foreign countries. 

6 ‘‘(b) STATEMENT OF POLICY.—It is the policy of the 

7 United States to work proactively under the United Nations 

8 Framework Convention on Climate Change, and in other 

9 appropriate forums, to establish binding agreements, in10 cluding sectoral agreements, committing all major green11 house gas-emitting nations to contribute equitably to the re12 duction of global greenhouse gas emissions. 

13 ‘‘(c) NOTIFICATION OF FOREIGN COUNTRIES.—Not 

14 later than January 1, 2020, the President shall notify for15 eign countries that an International Reserve Allowance 

16 Program, as described in subpart 2, may apply to primary 

17 products produced in a foreign country by a sector for 

18 which the President has made a determination described in 

19 section 767(c). 

20 ‘‘SEC. 763. DEFINITIONS. 

21 ‘‘In this part: 

22 ‘‘(1) CARBON LEAKAGE.—The term ‘carbon leak23 age’ means any substantial increase (as determined 

24 by the Administrator) in greenhouse gas emissions by 

25 industrial entities located in other countries if such 

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1 tion increase in the United States resulting from the 

2 implementation of this title. 

3 ‘‘(2) ELIGIBLE INDUSTRIAL SECTOR.—The term 

4 ‘eligible industrial sector’ means an industrial sector 

5 determined by the Administrator under section 764(b) 

6 to be eligible to receive emission allowance rebates 

7 under subpart 1. 

8 ‘‘(3) INDUSTRIAL SECTOR.—The term ‘industrial 

9 sector’ means any sector that is in the manufacturing 

10 sector (as defined in NAICS codes 31, 32, and 33). 

11 ‘‘(4) NAICS.—The term ‘NAICS’ means the 

12 North American Industrial Classification System of 

13 2002. 

14 ‘‘(5) OUTPUT.—The term ‘output’ means the 

15 total tonnage or other standard unit of production (as 

16 determined by the Administrator) produced by an en17 tity in an industrial sector. The output of the cement 

18 sector is hydraulic cement, and not clinker. 

19 ‘‘(6) PRIMARY PRODUCT.—The term ‘primary 

20 product’ means a product manufactured by an eligi21 ble industrial sector that is— 

22 ‘‘(A) iron, steel, steel mill products (includ23 ing pipe and tube), aluminum, cement, glass (in24 cluding flat, container, and specialty glass and 

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1 fiberglass), pulp, paper, chemicals, or industrial 

2 ceramics; or 

3 ‘‘(B) any other manufactured product that 

4 is sold in bulk for purposes of further manufac5 ture or inclusion in a finished product. 

6 ‘‘Subpart 1—Emission Allowance Rebate Program 

7 ‘‘SEC. 764. ELIGIBLE INDUSTRIAL SECTORS. 

8 ‘‘(a) LIST.— 

9 ‘‘(1) INITIAL LIST.—Not later than June 30, 

10 2011, the Administrator shall publish in the Federal 

11 Register a list of eligible industrial sectors pursuant 

12 to subsection (b). Such list shall include the amount 

13 of the emission allowance rebate per unit of produc14 tion that shall be provided to entities in each eligible 

15 industrial sector in the following two calendar years 

16 pursuant to section 765. 

17 ‘‘(2) SUBSEQUENT LISTS.—Not later than Feb18 ruary 1, 2013, and every four years thereafter, the 

19 Administrator shall publish in the Federal Register 

20 an updated version of the list published under para21 graph (1). 

22 ‘‘(b) ELIGIBLE INDUSTRIAL SECTORS.— 

23 ‘‘(1) IN GENERAL.—Not later than June 30, 

24 2011, the Administrator shall promulgate a rule des25 ignating, based on the criteria under paragraph (2), 

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1 the industrial sectors eligible for emission allowance 

2 rebates under this subpart. 

3 ‘‘(2) PRESUMPTIVELY ELIGIBLE INDUSTRIAL

4 SECTORS.— 

5 ‘‘(A) ELIGIBILITY CRITERIA.—An owner or 

6 operator of an entity shall be eligible to receive 

7 emission allowance rebates under this subpart if 

8 such entity is in an industrial sector that is in9 cluded in a six-digit classification of the NAICS 

10 that meets the criteria in both clauses (i) and 

11 (ii), or the criteria in clause (iii). 

12 ‘‘(i) ENERGY OR GREENHOUSE GAS IN13 TENSITY.—As determined by the Adminis14 trator, the industrial sector had— 

15 ‘‘(I) an energy intensity of at 

16 least 5 percent, calculated by dividing 

17 the cost of purchased electricity and 

18 fuel costs of the sector by the value of 

19 the shipments of the sector, based on 

20 data described in subparagraph (E); or 

21 ‘‘(II) a greenhouse gas intensity of 

22 at least 5 percent, calculated by divid23 ing— 

24 ‘‘(aa) the number 20 multi25 plied by the number of tons of 

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1 carbon dioxide equivalent green2 house gas emissions (including di3 rect emissions from fuel combus4 tion, process emissions, and indi5 rect emissions from the generation 

6 of electricity used to produce the 

7 output of the sector) of the sector 

8 based on data described in sub9 paragraph (E); by 

10 ‘‘(bb) the value of the ship11 ments of the sector, based on data 

12 described in subparagraph (E). 

13 ‘‘(ii) TRADE INTENSITY.—As deter14 mined by the Administrator, the industrial 

15 sector had a trade intensity of at least 15 

16 percent, calculated by dividing the value of 

17 the total imports and exports of such sector 

18 by the value of the shipments plus the value 

19 of imports of such sector, based on data de20 scribed in subparagraph (E). 

21 ‘‘(iii) VERY HIGH ENERGY OR GREEN22 HOUSE GAS INTENSITY.—As determined by 

23 the Administrator, the industrial sector had 

24 an energy or greenhouse gas intensity, as 

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1 calculated under clause (i)(I) or (II), of at 

2 least 20 percent. 

3 ‘‘(B) IRON AND STEEL SECTOR.—For pur4 poses of this subpart, in carrying out this section 

5 and section 765, the Administrator shall consider 

6 as in different industrial sectors— 

7 ‘‘(i) entities using integrated iron and 

8 steelmaking technologies (including coke 

9 ovens, blast furnaces, and other iron-making 

10 technologies); and 

11 ‘‘(ii) entities using electric arc furnace 

12 technologies. 

13 ‘‘(C) METAL AND PHOSPHATE PRODUCTION

14 CLASSIFIED UNDER MORE THAN ONE NAICS

15 CODE.—For purposes of this subpart, in car16 rying out this section and section 765, the Ad17 ministrator shall— 

18 ‘‘(i) aggregate data for the 

19 beneficiation or other processing of iron and 

20 copper ores and phosphate with subsequent 

21 steps in the process of metal and phosphate 

22 manufacturing regardless of the NAICS 

23 code under which such activity is classified; 

24 and 

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1 ‘‘(ii) aggregate data for the manufac2 turing of steel with the manufacturing of 

3 steel pipe and tube made from purchased 

4 steel in a nonintegrated process. 

5 ‘‘(D) EXCLUSION.—The petroleum refining 

6 sector shall not be an eligible industrial sector. 

7 ‘‘(E) DATA SOURCES.— 

8 ‘‘(i) ELECTRICITY AND FUEL COSTS, 

9 VALUE OF SHIPMENTS.—The Administrator 

10 shall determine electricity and fuel costs 

11 and the value of shipments under this sub12 section from data from the United States 

13 Census of Mineral Industries and the 

14 United States Census Annual Survey of 

15 Manufacturers. The Administrator shall 

16 take the average of data from as many of 

17 the years of 2004, 2005, and 2006 for which 

18 such data are available. If such data are 

19 unavailable, the Administrator shall make a 

20 determination based upon 2002 or 2006 

21 data from the most detailed industrial clas22 sification level of Energy Information Agen23 cy’s Manufacturing Energy Consumption 

24 Survey (using 2006 data if it is available) 

25 and the 2002 or 2007 Economic Census of 

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1 the United States (using 2007 data if it is 

2 available). If data from the Manufacturing 

3 Energy Consumption Survey are unavail4 able for any sector at the six-digit classi5 fication level in the NAICS, then the Ad6 ministrator may extrapolate the informa7 tion necessary to determine the eligibility of 

8 a sector under this paragraph from avail9 able Manufacturing Energy Consumption 

10 Survey data pertaining to a broader indus11 trial category classified in the NAICS. Fuel 

12 cost data shall not include the cost of fuel 

13 used as feedstock by an industrial sector. 

14 ‘‘(ii) IMPORTS AND EXPORTS.—The 

15 Administrator shall base the value of im16 ports and exports under this subsection on 

17 United States International Trade Commis18 sion data. The Administrator shall take the 

19 average of data from as many of the years 

20 of 2004, 2005, and 2006 for which such 

21 data are available. 

22 ‘‘(iii) PERCENTAGES.—The Adminis23 trator shall round the energy intensity, 

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1 sity percentages under subparagraph (A) to 

2 the nearest whole number. 

3 ‘‘(iv) GREENHOUSE GAS EMISSION

4 CALCULATIONS.—When calculating the tons 

5 of carbon dioxide equivalent greenhouse gas 

6 emissions for each sector under subpara7 graph (A)(i)(II)(aa), the Administrator— 

8 ‘‘(I) shall use the best available 

9 data from as many of the years 2004, 

10 2005, and 2006 for which such data is 

11 available; and 

12 ‘‘(II) may, to the extent necessary 

13 with respect to a sector, use economic 

14 and engineering models and the best 

15 available information on technology 

16 performance levels for such sector. 

17 ‘‘(3) ADMINISTRATIVE DETERMINATION OF ADDI18 TIONAL ELIGIBLE INDUSTRIAL SECTORS.— 

19 ‘‘(A) INDIVIDUAL SHOWING PETITION.— 

20 ‘‘(i) PETITION.—The owner or operator 

21 of an entity in an industrial sector may pe22 tition the Administrator to designate as eli23 gible industrial sectors under this subpart 

24 an entity or a group of entities that— 

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1 ‘‘(I) represent a subsector of a six2 digit section of the NAICS code; and 

3 ‘‘(II) meet the eligibility criteria 

4 in both clauses (i) and (ii) of para5 graph (2)(A), or the eligibility criteria 

6 in clause (iii) of paragraph (2)(A). 

7 ‘‘(ii) DATA.—In making a determina8 tion under this subparagraph, the Adminis9 trator shall consider data submitted by the 

10 petitioner that is specific to the entity, data 

11 solicited by the Administrator from other 

12 entities in the subsector, if such other enti13 ties exist, and data specified in paragraph 

14 (2)(E). 

15 ‘‘(iii) BASIS OF SUBSECTOR DETER16 MINATION.—The Administrator shall deter17 mine an entity or group of entities to be a 

18 subsector of a six-digit section of the NAICS 

19 code based only upon the products manufac20 tured and not the industrial process by 

21 which the products are manufactured, ex22 cept that the Administrator may determine 

23 an entity or group of entities that manufac24 ture a product from a virgin material to be 

25 a separate subsector from another entity or 

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1 group of entities that manufacture the same 

2 product from recycled material. 

3 ‘‘(iv) FINAL ACTION.—The Adminis4 trator shall take final action on such peti5 tion no later than 6 months after the peti6 tion is received by the Administrator. 

7 ‘‘(B) UPDATED TRADE INTENSITY DATA.— 

8 The Administrator shall designate as eligible to 

9 receive emission allowance rebates under this 

10 subpart an industrial sector that— 

11 ‘‘(i) met the energy or greenhouse gas 

12 intensity criteria in paragraph (2)(A)(i) as 

13 of the date of promulgation of the rule 

14 under paragraph (1); and 

15 ‘‘(ii) meets the trade intensity criteria 

16 in paragraph (2)(A)(ii), using data from 

17 any year after 2006. 

18 ‘‘(C) USE OF MOST RECENT DATA.—In de19 termining whether to designate a sector or sub20 sector as an eligible industrial sector under this 

21 paragraph, the Administrator shall use the most 

22 recent data available from the sources described 

23 in paragraph (2)(E), rather than the data from 

24 the years specified in paragraph (2)(E), to deter25 mine the trade intensity of such sector or submstockstill on PROD1PC66 with BILLS

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1 sector, but only for determining such trade inten2 sity. 

3 ‘‘SEC. 765. DISTRIBUTION OF EMISSION ALLOWANCE RE4 BATES. 

5 ‘‘(a) DISTRIBUTION SCHEDULE.— 

6 ‘‘(1) IN GENERAL.—For each vintage year, the 

7 Administrator shall distribute allowances pursuant to 

8 this section no later than October 31 of the preceding 

9 calendar year. The Administrator shall make such 

10 annual distributions to the owners and operators of 

11 each entity in an eligible industrial sector in the 

12 amount of emission allowances calculated under sub13 section (b), except that— 

14 ‘‘(A) for vintage years 2012 and 2013, the 

15 distribution for a covered entity shall be the enti16 ty’s indirect carbon factor as calculated under 

17 subsection (b)(3); and 

18 ‘‘(B) for vintage year 2026 and thereafter, 

19 the distribution shall be the amount calculated 

20 under subsection (b) multiplied by, except as 

21 modified by the President pursuant to section 

22 767(c)(3)(A) for a sector— 

23 ‘‘(i) 90 percent for vintage year 2026; 

24 ‘‘(ii) 80 percent for vintage year 2027; 

25 ‘‘(iii) 70 percent for vintage year 2028; 

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1 ‘‘(iv) 60 percent for vintage year 2029; 

2 ‘‘(v) 50 percent for vintage year 2030; 

3 ‘‘(vi) 40 percent for vintage year 2031; 

4 ‘‘(vii) 30 percent for vintage year 

5 2032; 

6 ‘‘(viii) 20 percent for vintage year 

7 2033; 

8 ‘‘(ix) 10 percent for vintage year 2034; 

9 and 

10 ‘‘(x) 0 percent for vintage year 2035 

11 and thereafter. 

12 ‘‘(2) RESUMPTION OF REDUCTION.—If the Presi13 dent has modified the percentage stated in paragraph 

14 (1)(B) under section 767(c)(3)(A), and the President 

15 subsequently makes a determination under section 

16 767(b) for an eligible industrial sector that more than 

17 70 percent of global output for that sector is produced 

18 or manufactured in countries that have met at least 

19 one of the criteria in that subsection, then the reduc20 tion schedule set forth in paragraph (1)(B) of this 

21 subsection shall begin in the next vintage year, with 

22 the percentage reduction based on the amount of the 

23 distribution of emission allowances under this section 

24 in the previous year. 

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1 ‘‘(3) NEWLY ELIGIBLE SECTORS.—In addition to 

2 receiving a distribution of emission allowances under 

3 this section in the first distribution occurring after an 

4 industrial sector is designated as eligible under sec5 tion 764(b)(3), the owner or operator of an entity in 

6 that eligible industrial sector may receive a prorated 

7 share of any emission allowances made available for 

8 distribution under this section that were not distrib9 uted for the year in which the petition for eligibility 

10 was granted under section 764(b)(3)(A). 

11 ‘‘(b) CALCULATION OF DIRECT AND INDIRECT CARBON

12 FACTORS.— 

13 ‘‘(1) IN GENERAL.— 

14 ‘‘(A) COVERED ENTITIES.—Except as pro15 vided in subsection (a), for covered entities that 

16 are in eligible industrial sectors, the amount of 

17 emission allowance rebates shall be based on the 

18 sum of the covered entity’s direct and indirect 

19 carbon factors. 

20 ‘‘(B) OTHER ELIGIBLE ENTITIES.—For en21 tities that are in eligible industrial sectors but 

22 are not covered entities, the amount of emission 

23 allowance rebates shall be based on the entity’s 

24 indirect carbon factor. 

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1 ‘‘(C) NEW ENTITIES.—Not later than 2 

2 years after the date of enactment of this title, the 

3 Administrator shall issue regulations governing 

4 the distribution of emission allowance rebates for 

5 the first and second years of operation of a new 

6 entity in an eligible industrial sector. These reg7 ulations shall provide for— 

8 ‘‘(i) the distribution of emission allow9 ance rebates to such entities based on com10 parable entities in the same sector; and 

11 ‘‘(ii) an adjustment in the third and 

12 fourth years of operation to reconcile the 

13 total amount of emission allowance rebates 

14 received during the first and second years of 

15 operation to the amount the entity would 

16 have received during the first and second 

17 years of operation had the appropriate data 

18 been available. 

19 ‘‘(2) DIRECT CARBON FACTOR.—The direct car20 bon factor for a covered entity for a vintage year is 

21 the product of— 

22 ‘‘(A) the average output of the covered enti23 ty for the two years preceding the year of the 

24 distribution; and 

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1 ‘‘(B) the most recent calculation of the aver2 age direct greenhouse gas emissions (expressed in 

3 tons of carbon dioxide equivalent) per unit of 

4 output for all covered entities in the sector, as 

5 determined by the Administrator under para6 graph (4). 

7 ‘‘(3) INDIRECT CARBON FACTOR.— 

8 ‘‘(A) IN GENERAL.—The indirect carbon 

9 factor for an entity for a vintage year is the 

10 product obtained by multiplying the average out11 put of the entity for the two years preceding the 

12 years of the distribution by both the electricity 

13 emissions intensity factor determined pursuant 

14 to subparagraph (B) and the electricity effi15 ciency factor determined pursuant to subpara16 graph (C) for the year concerned. 

17 ‘‘(B) ELECTRICITY EMISSIONS INTENSITY

18 FACTOR.—Each person selling electricity to the 

19 owner or operator of an entity in any sector des20 ignated as an eligible industrial sector under sec21 tion 764(b) shall provide the owner or operator 

22 of the entity and the Administrator, on an an23 nual basis, the electricity emissions intensity fac24 tor for the entity. The electricity emissions inten25 sity factor for the entity, expressed in tons of 

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1 carbon dioxide equivalents per kilowatt hour, is 

2 determined by dividing— 

3 ‘‘(i) the annual sum of the hourly 

4 product of— 

5 ‘‘(I) the electricity purchased by 

6 the entity from that person in each 

7 hour (expressed in kilowatt hours), 

8 multiplied by 

9 ‘‘(II) the marginal or weighted 

10 average tons of carbon dioxide equiva11 lent per kilowatt hour that the person 

12 selling the electricity charges to the en13 tity, taking into account the entity’s 

14 retail rate arrangements, by 

15 ‘‘(ii) the total kilowatt hours of elec16 tricity purchased by the entity from that 

17 person during that year. 

18 ‘‘(C) ELECTRICITY EFFICIENCY FACTOR.— 

19 The electricity efficiency factor is the average 

20 amount of electricity (in kilowatt hours) used 

21 per unit of output for all entities in the relevant 

22 sector, as determined by the Administrator based 

23 on the best available data, including data pro24 vided under paragraph (6). 

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1 ‘‘(D) INDIRECT CARBON FACTOR REDUC2 TION.—If an electricity provider received a free 

3 allocation of emission allowances pursuant to 

4 section 782(a), the Administrator shall adjust the 

5 indirect carbon factor to avoid rebates to the eli6 gible entity for costs that the Administrator de7 termines were not incurred by the industrial en8 tity because the allowances were freely allocated 

9 to the eligible entity’s electricity provider and 

10 used for the benefit of industrial consumers. 

11 ‘‘(4) GREENHOUSE GAS INTENSITY CALCULA12 TIONS.—The Administrator shall calculate the aver13 age direct greenhouse gas emissions (expressed in tons 

14 of carbon dioxide equivalent) per unit of output for 

15 all covered entities in each eligible industrial sector 

16 every four years using an average of the two most re17 cent years of the best available data. 

18 ‘‘(5) ENSURING EFFICIENCY IMPROVEMENTS.— 

19 When making greenhouse gas calculations, the Admin20 istrator shall— 

21 ‘‘(A) limit the average direct greenhouse gas 

22 emissions per unit of output, calculated under 

23 paragraph (4), for any eligible industrial sector 

24 to an amount that is not greater than it was in 

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1 any previous calculation under this subsection; 

2 and 

3 ‘‘(B) limit the electricity emissions intensity 

4 factor, calculated under paragraph (3)(B) and 

5 resulting from a change in electricity supply, for 

6 any entity to an amount that is not greater than 

7 it was during any previous year. 

8 ‘‘(6) DATA SOURCES.—For the purposes of this 

9 subsection— 

10 ‘‘(A) the Administrator shall use data from 

11 the greenhouse gas registry, established under 

12 section 713, where it is available; and 

13 ‘‘(B) each owner or operator of an entity in 

14 an eligible industrial sector and each depart15 ment, agency, and instrumentality of the United 

16 States shall provide the Administrator with such 

17 information as the Administrator finds necessary 

18 to determine the direct carbon factor and the in19 direct carbon factor for each entity subject to this 

20 section. 

21 ‘‘(c) TOTAL MAXIMUM DISTRIBUTION.—Notwith22 standing subsections (a) and (b), the Administrator shall 

23 not distribute more allowances for any vintage year pursu24 ant to this section than are allocated for use under this part 

25 pursuant to section 782 for that vintage year. For any vinmstockstill on PROD1PC66 with BILLS

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1 tage year for which the total emission allowance rebates cal2 culated pursuant to this section exceed the number of allow3 ances allocated pursuant to section 782, the Administrator 

4 shall reduce each entity’s distribution on a pro rata basis 

5 so that the total distribution under this section equals the 

6 number of allowances allocated under section 782. 

7 ‘‘Subpart 2—International Reserve Allowance 

8 Program 

9 ‘‘SEC. 766. INTERNATIONAL RESERVE ALLOWANCE PRO10 GRAM. 

11 ‘‘(a) ESTABLISHMENT.— 

12 ‘‘(1) IN GENERAL.—If the President takes an ac13 tion described in section 767(c)(3)(B) with respect to 

14 a sector then, not later than 24 months after that de15 termination, the Administrator shall issue regula16 tions— 

17 ‘‘(A) determining an appropriate price for 

18 and offering for sale to United States importers 

19 international reserve allowances; 

20 ‘‘(B) requiring the submission of appro21 priate amounts of such allowances in conjunc22 tion with the importation into the United States 

23 of a primary product produced or manufactured 

24 by that sector; 

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1 ‘‘(C) exempting from the requirements of 

2 subparagraph (B) primary products produced 

3 in— 

4 ‘‘(i) foreign countries that the United 

5 Nations has identified as among the least 

6 developed of developing countries; or 

7 ‘‘(ii) foreign countries that the Presi8 dent has determined to be responsible for 

9 less than 0.5 percent of total global green10 house gas emissions; and 

11 ‘‘(D) prohibiting the introduction into 

12 interstate commerce of a primary product with13 out submitting the required number of inter14 national reserve allowances in accordance with 

15 such regulations, unless the product was pro16 duced by a covered entity under this title, or by 

17 an entity that is or could be regulated under this 

18 title. 

19 ‘‘(2) PURPOSE OF PROGRAM.—The Adminis20 trator shall establish the program under paragraph 

21 (1) in a manner that addresses, consistent with inter22 national agreements to which the United States is a 

23 party, the competitive imbalance in the costs of pro24 ducing or manufacturing primary products in indus25 trial sectors resulting from the difference between— 

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1 ‘‘(A) the direct and indirect costs of com2 plying with this title; and 

3 ‘‘(B) the direct and indirect costs, if any, of 

4 complying in other countries with greenhouse gas 

5 regulatory programs, requirements, export tar6 iffs, or other measures adopted or imposed to re7 duce greenhouse gas emissions. 

8 ‘‘(3) EMISSION ALLOWANCE REBATES.—The Ad9 ministrator shall take into account the value of emis10 sion allowance rebates distributed under subpart 1 

11 when making calculations under paragraph (2). 

12 ‘‘(4) LIMITATION.—The International Reserve 

13 Allowance Program may not begin before January 1, 

14 2025. 

15 ‘‘(b) COVERED ENTITIES.—International reserve al16 lowances may not be held by covered entities to comply with 

17 section 722. 

18 ‘‘Subpart 3—Presidential Determination 

19 ‘‘SEC. 767. PRESIDENTIAL REPORTS AND DETERMINATIONS. 

20 ‘‘(a) REPORT.—Not later than January 1, 2018, the 

21 President shall submit a report to Congress on the effective22 ness of the distribution of emission allowance rebates under 

23 subpart 1 in mitigating carbon leakage in industrial sec24 tors. Such report shall also include— 

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1 ‘‘(1) recommendations on how to better achieve 

2 the purposes of this part, including an assessment of 

3 the feasibility and usefulness of an International Re4 serve Allowance Program; and 

5 ‘‘(2) an assessment of the amount and duration 

6 of assistance, including distribution of free allow7 ances, being provided to eligible industrial sectors in 

8 other developed countries to mitigate costs of compli9 ance with domestic greenhouse gas reduction pro10 grams in such countries. 

11 ‘‘(b) PRESIDENTIAL DETERMINATION.—Not later than 

12 June 30, 2022, and every four years thereafter, the Presi13 dent, in consultation with the Administrator and other ap14 propriate agencies, shall determine, for each eligible indus15 trial sector, whether more than 70 percent of global output 

16 for that sector is produced or manufactured in countries 

17 that have met at least one of the following criteria: 

18 ‘‘(1) The country is a party to an international 

19 agreement to which the United States is a party that 

20 includes a nationally enforceable greenhouse gas emis21 sions reduction commitment for that country that is 

22 at least as stringent as that of the United States. 

23 ‘‘(2) The country is a party to a multilateral or 

24 bilateral emission reduction agreement for that sector 

25 to which the United States is a party. 

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1 ‘‘(3) The country has an annual energy or green2 house gas intensity, as described in section 

3 764(b)(2)(A)(i), for the sector that is equal to or less 

4 than the energy or greenhouse gas intensity for such 

5 sector in the United States in the most recent cal6 endar year for which data are available. 

7 ‘‘(4) The country has implemented policies, in8 cluding sectoral caps, export tariffs, production fees, 

9 electricity generation regulations, or greenhouse gas 

10 emissions fees, that individually or collectively impose 

11 an incremental increase on the cost of production as12 sociated with greenhouse gas emissions from the sector 

13 that is at least 60 percent of the cost of complying 

14 with this title in the United States for such sector, 

15 averaged over a two-year period. 

16 ‘‘(c) EFFECT OF PRESIDENTIAL DETERMINATION.—If 

17 the President makes a determination under subsection (b) 

18 with respect to an eligible industrial sector that 70 percent 

19 or less of the global output for the sector is produced or 

20 manufactured in countries that have met one or more of 

21 the criteria in subsection (b), then the President shall, not 

22 later than June 30, 2022, and every four years thereafter— 

23 ‘‘(1) assess the extent to which the emission al24 lowance rebates provided pursuant to subpart 1 have 

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1 mitigated or addressed, or could mitigate or address, 

2 carbon leakage in that sector; 

3 ‘‘(2) assess the extent to which an International 

4 Reserve Allowance Program has mitigated or ad5 dressed, or could mitigate or address, carbon leakage 

6 in that sector and the feasibility of establishing such 

7 a program; and 

8 ‘‘(3) with respect to that sector— 

9 ‘‘(A) modify the percentage by which direct 

10 and indirect carbon factors will be multiplied 

11 under section 765(a)(1)(B); 

12 ‘‘(B) implement an International Reserve 

13 Allowance Program under section 766 for the 

14 products of the sector; or 

15 ‘‘(C) take the actions in both subparagraph 

16 (A) and (B). 

17 ‘‘(d) REPORT TO CONGRESS.—Not later than June 30, 

18 2022, and every four years thereafter, the President shall 

19 transmit to the Congress a report providing notice of any 

20 determination made under subsection (b), explaining the 

21 reasons for such determination, and identifying the actions 

22 taken by the President under subsection (c). 

23 ‘‘(e) LIMITATION.—The President may only implement 

24 an International Reserve Allowance Program for sectors 

25 producing primary products. 

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1 ‘‘(f) IRON AND STEEL SECTOR.—For the purposes of 

2 this subpart, the Administrator shall consider to be in the 

3 same industrial sector— 

4 ‘‘(1) entities using integrated iron and 

5 steelmaking technologies (including coke ovens, blast 

6 furnaces, and other iron-making technologies); and 

7 ‘‘(2) entities using electric arc furnace tech8 nologies.’’. 

9 Subtitle B—Green Jobs and Worker 

10 Transition 

11 PART 1—GREEN JOBS 

12 SEC. 421. CLEAN ENERGY CURRICULUM DEVELOPMENT 

13 GRANTS. 

14 (a) AUTHORIZATION.—The Secretary of Education is 

15 authorized to award grants, on a competitive basis, to eligi16 ble partnerships to develop programs of study (containing 

17 the information described in section 122(c)(1)(A) of the 

18 Carl D. Perkins Career and Technical Education Act of 

19 2006 (20 U.S.C. 2342), that are focused on emerging careers 

20 and jobs in renewable energy, energy efficiency, and climate 

21 change mitigation. The Secretary of Education shall consult 

22 with the Secretary of Labor and the Secretary of Energy 

23 prior to the issuance of a solicitation for grant applications. 

24 (b) ELIGIBLE PARTNERSHIPS.—For purposes of this 

25 section, an eligible partnership shall include— 

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1 (1) at least 1 local educational agency eligible 

2 for funding under section 131 of the Carl D. Perkins 

3 Career and Technical Education Act of 2006 (20 

4 U.S.C. 2351) or an area career and technical edu5 cation school or education service agency described in 

6 such section; 

7 (2) at least 1 postsecondary institution eligible 

8 for funding under section 132 of such Act (20 U.S.C. 

9 2352); and 

10 (3) representatives of the community including 

11 business, labor organizations, and industry that have 

12 experience in clean energy. 

13 (c) APPLICATION.—An eligible partnership seeking a 

14 grant under this section shall submit an application to the 

15 Secretary at such time and in such manner as the Secretary 

16 may require. Applications shall include— 

17 (1) a description of the eligible partners and 

18 partnership, the roles and responsibilities of each 

19 partner, and a demonstration of each partner’s ca20 pacity to support the program; 

21 (2) a description of the career area or areas 

22 within the field of clean energy to be developed, the 

23 reason for the choice, and evidence of the labor market 

24 need to prepare students in that area; 

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1 (3) a description of the new or existing program 

2 of study and both secondary and postsecondary com3 ponents; 

4 (4) a description of the students to be served by 

5 the new program of study; 

6 (5) a description of how the program of study 

7 funded by the grant will be replicable and dissemi8 nated to schools outside of the partnership, including 

9 urban and rural areas; 

10 (6) a description of applied learning that will be 

11 incorporated into the program of study and how it 

12 will incorporate or reinforce academic learning; 

13 (7) a description of how the program of study 

14 will be delivered; 

15 (8) a description of how the program will pro16 vide accessibility to students, especially economically 

17 disadvantaged, low performing, and urban and rural 

18 students; 

19 (9) a description of how the program will ad20 dress placement of students in nontraditional fields as 

21 described in section 3(20) of the Carl D. Perkins Ca22 reer and Technical Education Act of 2006 (20 U.S.C. 

23 2302(20)); and 

24 (10) a description of how the applicant proposes 

25 to consult or has consulted with a labor organization, 

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1 labor management partnership, apprenticeship pro2 gram, or joint apprenticeship and training program 

3 that provides education and training in the field of 

4 study for which the applicant proposes to develop a 

5 curriculum. 

6 (d) PRIORITY.—The Secretary shall give priority to 

7 applications that— 

8 (1) use online learning or other innovative 

9 means to deliver the program of study to students, 

10 educators, and instructors outside of the partnership; 

11 and 

12 (2) focus on low performing students and special 

13 populations as defined in section 3(29) of the Carl D. 

14 Perkins Career and Technical Education Act of 2006 

15 (20 U.S.C. 2302(29)). 

16 (e) PEER REVIEW.—The Secretary shall convene a 

17 peer review process to review applications for grants under 

18 this section and to make recommendations regarding the se19 lection of grantees. Members of the peer review committee 

20 shall include— 

21 (1) educators who have experience implementing 

22 curricula with comparable purposes; and 

23 (2) business and industry experts in clean en24 ergy-related fields. 

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1 (f) USES OF FUNDS.—Grants awarded under this sec2 tion shall be used for the development, implementation, and 

3 dissemination of programs of study (as described in section 

4 122(c)(1)(A) of the Carl D. Perkins Career and Technical 

5 Education Act (20 U.S.C. 342(c)(1)(A))) in career areas 

6 related to clean energy, renewable energy, energy efficiency, 

7 and climate change mitigation. 

8 SEC. 422. INCREASED FUNDING FOR ENERGY WORKER 

9 TRAINING PROGRAM. 

10 Section 171(e)(8) of the Workforce Investment Act of 

11 1998 (29 U.S.C. 2916(e)(8)) is amended by striking 

12 ‘‘$125,000,000’’ and inserting ‘‘$150,000,000’’. 

13 PART 2—CLIMATE CHANGE WORKER 

14 ADJUSTMENT ASSISTANCE 

15 SEC. 425. PETITIONS, ELIGIBILITY REQUIREMENTS, AND DE16 TERMINATIONS. 

17 (a) PETITIONS.— 

18 (1) FILING.—A petition for certification of eligi19 bility to apply for adjustment assistance for a group 

20 of workers under this part may be filed by any of the 

21 following: 

22 (A) The group of workers. 

23 (B) The certified or recognized union or 

24 other duly authorized representative of such 

25 workers. 

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1 (C) Employers of such workers, one-stop op2 erators or one-stop partners (as defined in sec3 tion 101 of the Workforce Investment Act of 1998 

4 (29 U.S.C. 2801)), including State employment 

5 security agencies, or the State dislocated worker 

6 unit established under title I of such Act, on be7 half of such workers. 

8 The petition shall be filed simultaneously with the 

9 Secretary of Labor and with the Governor of the State 

10 in which such workers’ employment site is located. 

11 (2) ACTION BY GOVERNORS.—Upon receipt of a 

12 petition filed under paragraph (1), the Governor 

13 shall— 

14 (A) ensure that rapid response activities 

15 and appropriate core and intensive services (as 

16 described in section 134 of the Workforce Invest17 ment Act of 1998 (29 U.S.C. 2864)) authorized 

18 under other Federal laws are made available to 

19 the workers covered by the petition to the extent 

20 authorized under such laws; and 

21 (B) assist the Secretary in the review of the 

22 petition by verifying such information and pro23 viding such other assistance as the Secretary 

24 may request. 

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1 (3) ACTION BY THE SECRETARY.—Upon receipt 

2 of the petition, the Secretary shall promptly publish 

3 notice in the Federal Register and on the website of 

4 the Department of Labor that the Secretary has re5 ceived the petition and initiated an investigation. 

6 (4) HEARINGS.—If the petitioner, or any other 

7 person found by the Secretary to have a substantial 

8 interest in the proceedings, submits not later than 10 

9 days after the date of the Secretary’s publication 

10 under paragraph (3) a request for a hearing, the Sec11 retary shall provide for a public hearing and afford 

12 such interested persons an opportunity to be present, 

13 to produce evidence, and to be heard. 

14 (b) ELIGIBILITY.— 

15 (1) IN GENERAL.—A group of workers shall be 

16 certified by the Secretary as eligible to apply for ad17 justment assistance under this part pursuant to a pe18 tition filed under subsection (a) if— 

19 (A) the group of workers is employed in— 

20 (i) energy producing and transforming 

21 industries; 

22 (ii) industries dependent upon energy 

23 industries; 

24 (iii) energy-intensive manufacturing 

25 industries; 

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1 (iv) consumer goods manufacturing; or 

2 (v) other industries whose employment 

3 the Secretary determines has been adversely 

4 affected by any requirement of title VII of 

5 the Clean Air Act; 

6 (B) the Secretary determines that a signifi7 cant number or proportion of the workers in 

8 such workers’ employment site have become to9 tally or partially separated, or are threatened to 

10 become totally or partially separated from em11 ployment; and 

12 (C) the sales, production, or delivery of 

13 goods or services have decreased as a result of 

14 any requirement of title VII of the Clean Air 

15 Act, including— 

16 (i) the shift from reliance upon fossil 

17 fuels to other sources of energy, including 

18 renewable energy, that results in the closing 

19 of a facility or layoff of employees at a fa20 cility that mines, produces, processes, or 

21 utilizes fossil fuels to generate electricity; 

22 (ii) a substantial increase in the cost of 

23 energy required for a manufacturing facil24 ity to produce items whose prices are com25 petitive in the marketplace, to the extent the 

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1 cost is not offset by allowance allocation to 

2 the facility pursuant to title VII of the 

3 Clean Air Act; or 

4 (iii) other documented occurrences that 

5 the Secretary determines are indicators of 

6 an adverse impact on an industry described 

7 in subparagraph (A) as a result of any re8 quirement of title VII of the Clean Air Act. 

9 (2) WORKERS IN PUBLIC AGENCIES.—A group of 

10 workers in a public agency shall be certified by the 

11 Secretary as eligible to apply for climate change ad12 justment assistance pursuant to a petition filed if the 

13 Secretary determines that a significant number or 

14 proportion of the workers in the public agency have 

15 become totally or partially separated from employ16 ment, or are threatened to become totally or partially 

17 separated as a result of any requirement of title VII 

18 of the Clean Air Act. 

19 (3) ADVERSELY AFFECTED SERVICE WORKERS.— 

20 A group of workers shall be certified as eligible to 

21 apply for climate change adjustment assistance pur22 suant to a petition filed if the Secretary determines 

23 that— 

24 (A) a significant number or proportion of 

25 the service workers at an employment site where 

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1 a group of workers has been certified by the Sec2 retary as eligible to apply for adjustment assist3 ance under this part pursuant to paragraph (1) 

4 have become totally or partially separated from 

5 employment, or are threatened to become totally 

6 or partially separated; and 

7 (B) a loss of business in the firm providing 

8 service workers to an employment site is directly 

9 attributable to one or more of the documented oc10 currences listed in paragraph (1)(C). 

11 (c) AUTHORITY TO INVESTIGATE AND COLLECT INFOR12 MATION.— 

13 (1) IN GENERAL.—The Secretary shall, in deter14 mining whether to certify a group of workers under 

15 subsection (d), obtain information the Secretary de16 termines to be necessary to make the certification, 

17 through questionnaires and in such other manner as 

18 the Secretary determines appropriate from— 

19 (A) the workers’ employer; 

20 (B) officials of certified or recognized 

21 unions or other duly authorized representatives 

22 of the group of workers; or 

23 (C) one-stop operators or one-stop partners 

24 (as defined in section 101 of the Workforce In25 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 con14 siders to be confidential business information unless 

15 the employer submitting the confidential business in16 formation had notice, at the time of submission, that 

17 the information would be released by the Secretary, or 

18 the employer subsequently consents to the release of 

19 the information. Nothing in this paragraph shall be 

20 construed to prohibit the Secretary from providing 

21 such confidential business information to a court in 

22 camera or to another party under a protective order 

23 issued by a court. 

24 (d) DETERMINATION BY THE SECRETARY OF 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 (a), 

3 but in any event not later than 40 days after that 

4 date, the Secretary, in consultation with the Secretary 

5 of Energy and the Administrator, as necessary, shall 

6 determine whether the petitioning group meets the re7 quirements of subsection (b) and shall issue a certifi8 cation of eligibility to apply for assistance under this 

9 part covering workers in any group which meets such 

10 requirements. Each certification shall specify the date 

11 on which the total or partial separation began or 

12 threatened to begin. Upon reaching a determination 

13 on a petition, the Secretary shall promptly publish a 

14 summary of the determination in the Federal Register 

15 and on the website of the Department of Labor, to16 gether with the Secretary’s reasons for making such 

17 determination. 

18 (2) ONE YEAR LIMITATION.—A certification 

19 under this section shall not apply to any worker 

20 whose last total or partial separation from the em21 ployment site before the worker’s application under 

22 section 426(a) occurred more than 1 year before the 

23 date of the petition on which such certification was 

24 granted. 

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1 (3) REVOCATION OF CERTIFICATION.—Whenever 

2 the Secretary determines, with respect to any certifi3 cation of eligibility of the workers of an employment 

4 site, that total or partial separations from such site 

5 are no longer a result of the factors specified in sub6 section (b)(1), the Secretary shall terminate such cer7 tification and promptly have notice of such termi8 nation published in the Federal Register and on the 

9 website of the Department of Labor, together with the 

10 Secretary’s reasons for making such determination. 

11 Such termination shall apply only with respect to 

12 total or partial separations occurring after the termi13 nation date specified by the Secretary. 

14 (e) INDUSTRY NOTIFICATION OF ASSISTANCE.—Upon 

15 receiving a notification of a determination under subsection 

16 (d) with respect to a domestic industry the Secretary of 

17 Labor shall notify the representatives of the domestic indus18 try affected by the determination, employers publicly iden19 tified by name during the course of the proceeding relating 

20 to the determination, and any certified or recognized union 

21 or, to the extent practicable, other duly authorized rep22 resentative of workers employed by such representatives of 

23 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, PROVIDERS

12 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 under 

16 this part and about the petition and application pro17 cedures, and the appropriate filing dates, for such al18 lowances, training and services. The Secretary shall 

19 provide whatever assistance is necessary to enable 

20 groups of workers to prepare petitions or applications 

21 for program benefits. The Secretary shall make every 

22 effort to insure that cooperating State agencies fully 

23 comply with the agreements entered into under sec24 tion 426(a) and shall periodically review such com25 pliance. The Secretary shall inform the State Board 

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1 for Vocational Education or equivalent agency, the 

2 one-stop operators or one-stop partners (as defined in 

3 section 101 of the Workforce Investment Act of 1998 

4 (29 U.S.C. 2801), and other public or private agen5 cies, institutions, and employers, as appropriate, of 

6 each certification issued under subsection (d) and of 

7 projections, if available, of the needs for training 

8 under as a result of such certification. 

9 (2) NOTICE BY MAIL.—The Secretary shall pro10 vide written notice through the mail of the benefits 

11 available under this part to each worker whom the 

12 Secretary has reason to believe is covered by a certifi13 cation made under subsection (d)— 

14 (A) at the time such certification is made, 

15 if the worker was partially or totally separated 

16 from the adversely affected employment before 

17 such certification, or— 

18 (B) at the time of the total or partial sepa19 ration of the worker from the adversely affected 

20 employment, if subparagraph (A) does not 

21 apply. 

22 (3) NEWSPAPERS; WEBSITE.—The Secretary 

23 shall publish notice of the benefits available under 

24 this part to workers covered by each certification 

25 made under subsection (d) in newspapers of general 

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1 circulation in the areas in which such workers reside 

2 and shall make such information available on the 

3 website of the Department of Labor. 

4 SEC. 426. PROGRAM BENEFITS. 

5 (a) CLIMATE CHANGE ADJUSTMENT ALLOWANCE.— 

6 (1) ELIGIBILITY.—Payment of a climate change 

7 adjustment allowance shall be made to an adversely 

8 affected worker covered by a certification under sec9 tion 425(b) who files an application for such allow10 ance for any week of unemployment which begins on 

11 or after the date of such certification, if the following 

12 conditions are met: 

13 (A) Such worker’s total or partial separa14 tion before the worker’s application under this 

15 part occurred— 

16 (i) on or after the date, as specified in 

17 the certification under which the worker is 

18 covered, on which total or partial separa19 tion began or threatened to begin in the ad20 versely affected employment; 

21 (ii) before the expiration of the 2-year 

22 period beginning on the date on which the 

23 determination under section 425(d) was 

24 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 period 

5 ending with the week in which such total or par6 tial separation occurred, at least 26 weeks of 

7 full-time employment or 1,040 hours of part time 

8 employment in adversely affected employment, 

9 or, if data with respect to weeks of employment 

10 are not available, equivalent amounts of employ11 ment computed under regulations prescribed by 

12 the Secretary. For the purposes of this para13 graph, any week in which such worker— 

14 (i) is on employer-authorized leave for 

15 purposes of vacation, sickness, injury, ma16 ternity, or inactive duty or active duty 

17 military service for training; 

18 (ii) does not work because of a dis19 ability that is compensable under a work20 men’s compensation law or plan of a State 

21 or the United States; 

22 (iii) had his employment interrupted 

23 in order to serve as a full-time representa24 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 adversely 

10 affected worker under this part for the week in which 

11 such failure, cessation, or revocation occurred, or any 

12 succeeding week, until the adversely affected worker 

13 begins or resumes participation in a training pro14 gram approved by the Secretary under section (b)(2). 

15 (4) WAIVERS OF TRAINING REQUIREMENTS.—The 

16 Secretary may issue a written statement to an ad17 versely affected worker waiving the requirement to be 

18 enrolled in training described in subsection (b)(2) if 

19 the Secretary determines that it is not feasible or ap20 propriate for the worker, because of 1 or more of the 

21 following reasons: 

22 (A) RECALL.—The worker has been notified 

23 that the worker will be recalled by the employer 

24 from which the separation occurred. 

25 (B) MARKETABLE SKILLS.— 

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1 (i) IN GENERAL.—The worker possesses 

2 marketable skills for suitable employment 

3 (as determined pursuant to an assessment 

4 of the worker, which may include the 

5 profiling system under section 303(j) of the 

6 Social Security Act (42 U.S.C. 503(j)), car7 ried out in accordance with guidelines 

8 issued by the Secretary) and there is a rea9 sonable expectation of employment at equiv10 alent wages in the foreseeable future. 

11 (ii) MARKETABLE SKILLS DEFINED.— 

12 For purposes of clause (i), the term ‘‘mar13 ketable skills’’ may include the possession of 

14 a postgraduate degree from an institution of 

15 higher education (as defined in section 102 

16 of the Higher Education Act of 1965 (20 

17 U.S.C. 1002)) or an equivalent institution, 

18 or the possession of an equivalent post19 graduate certification in a specialized field. 

20 (C) RETIREMENT.—The worker is within 2 

21 years of meeting all requirements for entitlement 

22 to either— 

23 (i) old-age insurance benefits under 

24 title II of the Social Security Act (42 

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1 U.S.C. 401 et seq.) (except for application 

2 therefor); or 

3 (ii) a private pension sponsored by an 

4 employer or labor organization. 

5 (D) HEALTH.—The worker is unable to 

6 participate in training due to the health of the 

7 worker, except that a waiver under this subpara8 graph shall not be construed to exempt a worker 

9 from requirements relating to the availability for 

10 work, active search for work, or refusal to accept 

11 work under Federal or State unemployment com12 pensation laws. 

13 (E) ENROLLMENT UNAVAILABLE.—The first 

14 available enrollment date for the training of the 

15 worker is within 60 days after the date of the de16 termination made under this paragraph, or, if 

17 later, there are extenuating circumstances for the 

18 delay in enrollment, as determined pursuant to 

19 guidelines issued by the Secretary. 

20 (F) TRAINING NOT AVAILABLE.—Training 

21 described in subsection (b)(2) is not reasonably 

22 available to the worker from either governmental 

23 agencies or private sources (which may include 

24 area career and technical education schools, as 

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1 reer and Technical Education Act of 2006 (20 

2 U.S.C. 2302), and employers), no training that 

3 is suitable for the worker is available at a rea4 sonable cost, or no training funds are available. 

5 (5) WEEKLY AMOUNTS.—The climate change ad6 justment allowance payable to an adversely affected 

7 worker for a week of unemployment shall be an 

8 amount equal to 70 percent of the average weekly 

9 wage of such worker, but in no case shall such 

10 amount exceed the average weekly wage for all work11 ers in the State where the adversely affected worker 

12 resides. 

13 (6) MAXIMUM DURATION OF BENEFITS.—An eli14 gible worker may receive a climate change adjustment 

15 allowance under this subsection for a period of not 

16 longer than 156 weeks. 

17 (b) EMPLOYMENT SERVICES AND TRAINING.— 

18 (1) INFORMATION AND EMPLOYMENT SERV19 ICES.—The Secretary shall make available, directly or 

20 through agreements with the States under section 

21 427(a) to adversely affected workers covered by a cer22 tification under section 425(a) the following informa23 tion and employment services: 

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1 (A) Comprehensive and specialized assess2 ment of skill levels and service needs, including 

3 through— 

4 (i) diagnostic testing and use of other 

5 assessment tools; and 

6 (ii) in-depth interviewing and evalua7 tion to identify employment barriers and 

8 appropriate employment goals. 

9 (B) Development of an individual employ10 ment plan to identify employment goals and ob11 jectives, and appropriate training to achieve 

12 those goals and objectives. 

13 (C) Information on training available in 

14 local and regional areas, information on indi15 vidual counseling to determine which training is 

16 suitable training, and information on how to 

17 apply for such training. 

18 (D) Information on training programs and 

19 other services provided by a State pursuant to 

20 title I of the Workforce Investment Act of 1998 

21 and available in local and regional areas, infor22 mation on individual counseling to determine 

23 which training is suitable training, and infor24 mation on how to apply for such training. 

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1 (E) Information on how to apply for finan2 cial aid, including referring workers to edu3 cational opportunity centers described in section 

4 402F of the Higher Education Act of 1965 (20 

5 U.S.C. 1070a–16), where applicable, and noti6 fying workers that the workers may request fi7 nancial aid administrators at institutions of 

8 higher education (as defined in section 102 of 

9 such Act (20 U.S.C. 1002)) to use the adminis10 trators’ discretion under section 479A of such 

11 Act (20 U.S.C. 1087tt) to use current year in12 come data, rather than preceding year income 

13 data, for determining the amount of need of the 

14 workers for Federal financial assistance under 

15 title IV of such Act (20 U.S.C. 1070 et seq.). 

16 (F) Short-term prevocational services, in17 cluding development of learning skills, commu18 nications skills, interviewing skills, punctuality, 

19 personal maintenance skills, and professional 

20 conduct to prepare individuals for employment 

21 or training. 

22 (G) Individual career counseling, including 

23 job search and placement counseling, during the 

24 period in which the individual is receiving a cli25 mate change adjustment allowance or training 

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1 under this part, and after receiving such train2 ing for purposes of job placement. 

3 (H) Provision of employment statistics in4 formation, including the provision of accurate 

5 information relating to local, regional, and na6 tional labor market areas, including— 

7 (i) job vacancy listings in such labor 

8 market areas; 

9 (ii) information on jobs skills nec10 essary to obtain jobs identified in job va11 cancy listings described in subparagraph 

12 (A); 

13 (iii) information relating to local occu14 pations that are in demand and earnings 

15 potential of such occupations; and 

16 (iv) skills requirements for local occu17 pations described in subparagraph (C). 

18 (I) Information relating to the availability 

19 of supportive services, including services relating 

20 to child care, transportation, dependent care, 

21 housing assistance, and need-related payments 

22 that are necessary to enable an individual to 

23 participate in training. 

24 (2) TRAINING.— 

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1 (A) APPROVAL OF AND PAYMENT FOR

2 TRAINING.—If the Secretary determines, with re3 spect to an adversely affected worker that— 

4 (i) there is no suitable employment 

5 (which may include technical and profes6 sional employment) available for an ad7 versely affected worker; 

8 (ii) the worker would benefit from ap9 propriate training; 

10 (iii) there is a reasonable expectation 

11 of employment following completion of such 

12 training; 

13 (iv) training approved by the Sec14 retary is reasonably available to the worker 

15 from either governmental agencies or pri16 vate sources (including area career and 

17 technical education schools, as defined in 

18 section 3 of the Carl D. Perkins Career and 

19 Technical Education Act of 2006, and em20 ployers); 

21 (v) the worker is qualified to undertake 

22 and complete such training; and 

23 (vi) such training is suitable for the 

24 worker and available at a reasonable cost, 

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1 the Secretary shall approve such training for the 

2 worker. Upon such approval, the worker shall be 

3 entitled to have payment of the costs of such 

4 training (subject to the limitations imposed by 

5 this section) paid on the worker’s behalf by the 

6 Secretary directly or through a voucher system. 

7 (B) DISTRIBUTION.—The Secretary shall es8 tablish procedures for the distribution of the 

9 funds to States to carry out the training pro10 grams approved under this paragraph, and shall 

11 make an initial distribution of the funds made 

12 available as soon as practicable after the begin13 ning of each fiscal year. 

14 (C) ADDITIONAL RULES REGARDING AP15 PROVAL OF AND PAYMENT FOR TRAINING.— 

16 (i) For purposes of applying subpara17 graph (A)(iii), a reasonable expectation of 

18 employment does not require that employ19 ment opportunities for a worker be avail20 able, or offered, immediately upon the com21 pletion of training approved under such 

22 subparagraph. 

23 (ii) If the costs of training an ad24 versely affected worker are paid by the Sec25 retary under subparagraph (A), no other 

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1 payment for such costs may be made under 

2 any other provision of Federal law. No pay3 ment may be made under subparagraph (A) 

4 of the costs of training an adversely affected 

5 worker or an adversely affected incumbent 

6 worker if such costs— 

7 (I) have already been paid under 

8 any other provision of Federal law; or 

9 (II) are reimbursable under any 

10 other provision of Federal law and a 

11 portion of such costs have already been 

12 paid under such other provision of 

13 Federal law. 

14 The provisions of this clause shall not apply 

15 to, or take into account, any funds provided 

16 under any other provision of Federal law 

17 which are used for any purpose other than 

18 the direct payment of the costs incurred in 

19 training a particular adversely affected 

20 worker, even if such use has the effect of in21 directly paying or reducing any portion of 

22 the costs involved in training the adversely 

23 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 approved 

7 by the Secretary under subsection (c); 

8 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 Workforce 

13 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 certifi19 cation that the worker had previously 

20 begun at an accredited institution of 

21 higher education; and 

22 (ix) any other training program ap23 proved by the Secretary. 

24 (3) SUPPLEMENTAL ASSISTANCE.—The Secretary may, 

25 as appropriate, authorize supplemental assistance that is 

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1 necessary to defray reasonable transportation and subsist2 ence expenses for separate maintenance in a case in which 

3 training for a worker is provided in a facility that is not 

4 within commuting distance of the regular place of residence 

5 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-the-job 

11 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 or 

19 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-the-job 

2 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 worker 

11 under this subsection, that the skill requirements 

12 of the job for which the worker is being trained, 

13 the academic and occupational skill level of the 

14 worker, and the work experience of the worker 

15 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 on-the19 job training to become proficient in the job for 

20 which the worker is being trained, but may not 

21 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 conditions 

6 that are equivalent to the wages, benefits, and 

7 working conditions provided to regular employ8 ees who have worked a similar period of time 

9 and are doing the same type of work as workers 

10 receiving on-the-job training from the employer. 

11 (d) ADMINISTRATIVE AND EMPLOYMENT SERVICES

12 FUNDING.— 

13 (1) ADMINISTRATIVE FUNDING.—In addition to 

14 any funds made available to a State to carry out this 

15 section for a fiscal year, the State shall receive for the 

16 fiscal year a payment in an amount that is equal to 

17 15 percent of the amount of such funds and shall— 

(A) use not more than 2 18 ⁄3 of such payment 

19 for the administration of the climate change ad20 justment assistance for workers program under 

21 this part, including for— 

22 (i) processing waivers of training re23 quirements under subsection (a)(4); and 

24 (ii) collecting, validating, and report25 ing data required under this part; and 

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(B) use not less than 1 1 ⁄3 of such payment for 

2 information and employment services under sub3 section (b)(1). 

4 (2) EMPLOYMENT SERVICES FUNDING.— 

5 (A) IN GENERAL.—In addition to any funds 

6 made available to a State to carry out subsection 

7 (b)(2) and the payment under paragraph (1) for 

8 a fiscal year, the Secretary shall provide to the 

9 State for the fiscal year a reasonable payment 

10 for the purpose of providing employment and 

11 services under subsection (b)(1). 

12 (B) VOLUNTARY RETURN OF FUNDS.—A 

13 State that receives a payment under subpara14 graph (A) may decline or otherwise return such 

15 payment to the Secretary. 

16 (e) JOB SEARCH ALLOWANCES.—The Secretary of 

17 Labor may provide adversely affected workers a one-time 

18 job search allowance in accordance with regulations pre19 scribed by the Secretary. Any job search allowance provided 

20 shall be available only under the following circumstances 

21 and conditions: 

22 (1) The worker is no longer eligible for the cli23 mate change adjustment allowance under subsection 

24 (a) and has completed the training program required 

25 by subsection (a)(1)(E). 

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1 (2) The Secretary determines that the worker 

2 cannot reasonably be expected to secure suitable em3 ployment in the commuting area in which the worker 

4 resides. 

5 (3) An allowance granted shall provide reim6 bursement to the worker of all necessary job search ex7 penses as prescribed by the Secretary in regulations. 

8 Such reimbursement under this subsection may not 

9 exceed $1,500 for any worker. 

10 (f) RELOCATION ALLOWANCE AUTHORIZED.— 

11 (1) IN GENERAL.—Any adversely affected worker 

12 covered by a certification issued under section 425 

13 may file an application for a relocation allowance 

14 with the Secretary, and the Secretary may grant the 

15 relocation allowance, subject to the terms and condi16 tions of this subsection. 

17 (2) CONDITIONS FOR GRANTING ALLOWANCE.—A 

18 relocation allowance may be granted if all of the fol19 lowing terms and conditions are met: 

20 (A) ASSIST AN ADVERSELY AFFECTED

21 WORKER.—The relocation allowance will assist 

22 an adversely affected worker in relocating within 

23 the United States. 

24 (B) LOCAL EMPLOYMENT NOT AVAILABLE.— 

25 The Secretary determines that the worker cannot 

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1 reasonably be expected to secure suitable employ2 ment in the commuting area in which the worker 

3 resides. 

4 (C) TOTAL SEPARATION.—The worker is to5 tally separated from employment at the time re6 location commences. 

7 (D) SUITABLE EMPLOYMENT OBTAINED.— 

8 The worker— 

9 (i) has obtained suitable employment 

10 affording a reasonable expectation of long11 term duration in the area in which the 

12 worker wishes to relocate; or 

13 (ii) has obtained a bona fide offer of 

14 such employment. 

15 (E) APPLICATION.—The worker filed an ap16 plication with the Secretary at such time and in 

17 such manner as the Secretary shall specify by 

18 regulation. 

19 (3) AMOUNT OF ALLOWANCE.—The relocation al20 lowance granted to a worker under paragraph (1) in21 cludes— 

22 (A) all reasonable and necessary expenses 

23 (including, subsistence and transportation ex24 penses at levels not exceeding amounts prescribed 

25 by the Secretary in regulations) incurred in 

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1 transporting the worker, the worker’s family, 

2 and household effects; and 

3 (B) a lump sum equivalent to 3 times the 

4 worker’s average weekly wage, up to a maximum 

5 payment of $1,500. 

6 (4) LIMITATIONS.—A relocation allowance may 

7 not be granted to a worker unless— 

8 (A) the relocation occurs within 182 days 

9 after the filing of the application for relocation 

10 assistance; or 

11 (B) the relocation occurs within 182 days 

12 after the conclusion of training, if the worker en13 tered a training program approved by the Sec14 retary under subsection (b)(2). 

15 (g) HEALTH INSURANCE CONTINUATION.—Not later 

16 than 1 year after the date of enactment of this part, the 

17 Secretary of Labor shall prescribe regulations to provide, 

18 for the period in which an adversely affected worker is par19 ticipating in a training program described in subsection 

20 (b)(2), 80 percent of the monthly premium of any health 

21 insurance coverage that an adversely affected worker was 

22 receiving from such worker’s employer prior to the separa23 tion from employment described in section 425(b), to be 

24 paid to any health care insurance plan designated by the 

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1 adversely affected worker receiving an allowance under this 

2 section. 

3 SEC. 427. GENERAL PROVISIONS. 

4 (a) AGREEMENTS WITH STATES.— 

5 (1) IN GENERAL.—The Secretary is authorized 

6 on behalf of the United States to enter into an agree7 ment with any State, or with any State agency (re8 ferred to in this section as ‘‘cooperating States’’ and 

9 ‘‘cooperating States agencies’’ respectively). Under 

10 such an agreement, the cooperating State agency— 

11 (A) as agent of the United States, shall re12 ceive applications for, and shall provide, pay13 ments on the basis provided in this part; 

14 (B) in accordance with paragraph (6), shall 

15 make available to adversely affected workers cov16 ered by a certification under section 425(d) the 

17 employment services described in section 

18 426(b)(1); 

19 (C) shall make any certifications required 

20 under section 425(d); 

21 (D) shall otherwise cooperate with the Sec22 retary and with other State and Federal agencies 

23 in providing payments and services under this 

24 part. 

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1 Each agreement under this section shall provide the 

2 terms and conditions upon which the agreement may 

3 be amended, suspended, or terminated. 

4 (2) FORM AND MANNER OF DATA.—Each agree5 ment under this section shall— 

6 (A) provide the Secretary with the authority 

7 to collect any data the Secretary determines nec8 essary to meet the requirements of this part; and 

9 (B) specify the form and manner in which 

10 any such data requested by the Secretary shall be 

11 reported. 

12 (3) RELATIONSHIP TO UNEMPLOYMENT INSUR13 ANCE.—Each agreement under this section shall pro14 vide that an adversely affected worker receiving a cli15 mate change adjustment allowance under this part 

16 shall not be eligible for unemployment insurance oth17 erwise payable to such worker under the laws of the 

18 State. 

19 (4) REVIEW.—A determination by a cooperating 

20 State agency with respect to entitlement to program 

21 benefits under an agreement is subject to review in 

22 the same manner and to the same extent as deter23 minations under the applicable State law and only in 

24 that manner and to that extent. 

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1 (5) COORDINATION.—Any agreement entered into 

2 under this section shall provide for the coordination 

3 of the administration of the provisions for employ4 ment services, training, and supplemental assistance 

5 under section 426 and under title I of the Workforce 

6 Investment Act of 1998 upon such terms and condi7 tions as are established by the Secretary in consulta8 tion with the States and set forth in such agreement. 

9 Any agency of the State jointly administering such 

10 provisions under such agreement shall be considered 

11 to be a cooperating State agency for purposes of this 

12 part. 

13 (6) RESPONSIBILITIES OF COOPERATING AGEN14 CIES.—Each cooperating State agency shall, in car15 rying out paragraph (1)(B)— 

16 (A) advise each worker who applies for un17 employment insurance of the benefits under this 

18 part and the procedures and deadlines for apply19 ing for such benefits; 

20 (B) facilitate the early filing of petitions 

21 under section 425(a) for any workers that the 

22 agency considers are likely to be eligible for bene23 fits under this part; 

24 (C) advise each adversely affected worker to 

25 apply for training under section 426(b) before, 

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1 or at the same time, the worker applies for cli2 mate change adjustment allowances under sec3 tion 426(a); 

4 (D) perform outreach to, intake of, and ori5 entation for adversely affected workers and ad6 versely affected incumbent workers covered by a 

7 certification under section 426(a) with respect to 

8 assistance and benefits available under this part; 

9 (E) make employment services described in 

10 section 426(b)(1) available to adversely affected 

11 workers and adversely affected incumbent work12 ers covered by a certification under section 

13 425(d) and, if funds provided to carry out this 

14 part are insufficient to make such services avail15 able, make arrangements to make such services 

16 available through other Federal programs; and 

17 (F) provide the benefits and reemployment 

18 services under this part in a manner that is nec19 essary for the proper and efficient administra20 tion of this part, including the use of state agen21 cy personnel employed in accordance with a 

22 merit system of personnel administration stand23 ards, including— 

24 (i) making determinations of eligibility 

25 for, and payment of, climate change readmstockstill on PROD1PC66 with BILLS

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1 justment allowances and health care benefit 

2 replacement amounts; 

3 (ii) developing recommendations re4 garding payments as a bridge to retirement 

5 and lump sum payments to pension plans 

6 in accordance with this subsection; and 

7 (iii) the provision of reemployment 

8 services to eligible workers, including refer9 ral to training services. 

10 (7) In order to promote the coordination of work11 force investment activities in each State with activi12 ties carried out under this part, any agreement en13 tered into under this section shall provide that the 

14 State shall submit to the Secretary, in such form as 

15 the Secretary may require, the description and infor16 mation described in paragraphs (8) and (14) of sec17 tion 112(b) of the Workforce Investment Act of 1998 

18 (29 U.S.C. 2822(b)) and a description of the State’s 

19 rapid response activities under section 221(a)(2)(A). 

20 (8) CONTROL MEASURES.— 

21 (A) IN GENERAL.—The Secretary shall re22 quire each cooperating State and cooperating 

23 State agency to implement effective control meas24 ures and to effectively oversee the operation and 

25 administration of the climate change adjustment 

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1 assistance program under this part, including by 

2 means of monitoring the operation of control 

3 measures to improve the accuracy and timeliness 

4 of the data being collected and reported. 

5 (B) DEFINITION.—For purposes of subpara6 graph (A), the term ‘‘control measures’’ means 

7 measures that— 

8 (i) are internal to a system used by a 

9 State to collect data; and 

10 (ii) are designed to ensure the accuracy 

11 and verifiability of such data. 

12 (9) DATA REPORTING.— 

13 (A) IN GENERAL.—Any agreement entered 

14 into under this section shall require the cooper15 ating State or cooperating State agency to report 

16 to the Secretary on a quarterly basis comprehen17 sive performance accountability data, to consist 

18 of— 

19 (i) the core indicators of performance 

20 described in subparagraph (B)(i); 

21 (ii) the additional indicators of per22 formance described in subparagraph (B)(ii), 

23 if any; and 

24 (iii) a description of efforts made to 

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1 mate change adjustment assistance pro2 gram. 

3 (B) CORE INDICATORS DESCRIBED.— 

4 (i) IN GENERAL.—The core indicators 

5 of performance described in this subpara6 graph are— 

7 (I) the percentage of workers re8 ceiving benefits under this part who 

9 are employed during the second cal10 endar quarter following the calendar 

11 quarter in which the workers cease re12 ceiving such benefits; 

13 (II) the percentage of such workers 

14 who are employed in each of the third 

15 and fourth calendar quarters following 

16 the calendar quarter in which the 

17 workers cease receiving such benefits; 

18 and 

19 (III) the earnings of such workers 

20 in each of the third and fourth cal21 endar quarters following the calendar 

22 quarter in which the workers cease re23 ceiving such benefits. 

24 (ii) ADDITIONAL INDICATORS.—The 

25 Secretary and a cooperating State or comstockstill on PROD1PC66 with BILLS

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1 operating State agency may agree upon ad2 ditional indicators of performance for the 

3 climate change adjustment assistance pro4 gram under this part, as appropriate. 

5 (C) STANDARDS WITH RESPECT TO RELI6 ABILITY OF DATA.—In preparing the quarterly 

7 report required by subparagraph (A), each co8 operating State or cooperating State agency 

9 shall establish procedures that are consistent 

10 with guidelines to be issued by the Secretary to 

11 ensure that the data reported are valid and reli12 able. 

13 (10) VERIFICATION OF ELIGIBILITY FOR PRO14 GRAM BENEFITS.— 

15 (A) IN GENERAL.—An agreement under this 

16 section shall provide that the State shall periodi17 cally redetermine that a worker receiving benefits 

18 under this part who is not a citizen or national 

19 of the United States remains in a satisfactory 

20 immigration status. Once satisfactory immigra21 tion status has been initially verified through the 

22 immigration status verification system described 

23 in section 1137(d) of the Social Security Act (42 

24 U.S.C. 1320b-7(d)) for purposes of establishing a 

25 worker’s eligibility for unemployment compensamstockstill on PROD1PC66 with BILLS

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1 tion, the State shall reverify the worker’s immi2 gration status if the documentation provided 

3 during initial verification will expire during the 

4 period in which that worker is potentially eligi5 ble to receive benefits under this part. The State 

6 shall conduct such redetermination in a timely 

7 manner, utilizing the immigration status 

8 verification system described in section 1137(d) 

9 of the Social Security Act (42 U.S.C. 1320b10 7(d)). 

11 (B) PROCEDURES.—The Secretary shall es12 tablish procedures to ensure the uniform applica13 tion by the States of the requirements of this 

14 paragraph. 

15 (b) ADMINISTRATION ABSENT STATE AGREEMENT.— 

16 (1) In any State where there is no agreement in 

17 force between a State or its agency under subsection 

18 (a), the Secretary shall promulgate regulations for the 

19 performance of all necessary functions under section 

20 426, including provision for a fair hearing for any 

21 worker whose application for payments is denied. 

22 (2) A final determination under paragraph (1) 

23 with respect to entitlement to program benefits under 

24 section 426 is subject to review by the courts in the 

25 same manner and to the same extent as is provided 

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1 by section 205(g) of the Social Security Act (42 

2 U.S.C. 405(g)). 

3 (c) PROHIBITION ON CONTRACTING WITH PRIVATE

4 ENTITIES.—Neither the Secretary nor a State may contract 

5 with any private for-profit or nonprofit entity for the ad6 ministration of the climate change adjustment assistance 

7 program under this part. 

8 (d) PAYMENT TO THE STATES.— 

9 (1) IN GENERAL.—The Secretary shall from time 

10 to time certify to the Secretary of the Treasury for 

11 payment to each cooperating State the sums necessary 

12 to enable such State as agent of the United States to 

13 make payments provided for by this part. 

14 (2) RESTRICTION.—All money paid a State 

15 under this subsection shall be used solely for the pur16 poses for which it is paid; and money so paid which 

17 is not used for such purposes shall be returned, at the 

18 time specified in the agreement under this section, to 

19 the Secretary of the Treasury. 

20 (3) BONDS.—Any agreement under this section 

21 may require any officer or employee of the State cer22 tifying payments or disbursing funds under the agree23 ment or otherwise participating in the performance of 

24 the agreement, to give a surety bond to the United 

25 States in such amount as the Secretary may deem 

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1 necessary, and may provide for the payment of the 

2 cost of such bond from funds for carrying out the pur3 poses of this part. 

4 (e) LABOR STANDARDS.— 

5 (1) PROHIBITION ON DISPLACEMENT.—An indi6 vidual in an apprenticeship program or on-the-job 

7 training program under this part shall not displace 

8 (including a partial displacement, such as a reduc9 tion in the hours of non-overtime work, wages, or em10 ployment benefits) any employed employee. 

11 (2) PROHIBITION ON IMPAIRMENT OF CON12 TRACTS.—An apprenticeship program or on-the-job 

13 raining program under this Act shall not impair an 

14 existing contract for services or collective bargaining 

15 agreement, and no such activity that would be incon16 sistent with the terms of a collective bargaining agree17 ment shall be undertaken without the written concur18 rence of the labor organization and employer con19 cerned. 

20 (3) ADDITIONAL STANDARDS.—The Secretary, or 

21 a State acting under an agreement described in sub22 section (a) may pay the costs of on-the-job training, 

23 notwithstanding any other provision of this section, 

24 only if— 

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1 (A) in the case of training which would be 

2 inconsistent with the terms of a collective bar3 gaining agreement, the written concurrence of 

4 the labor organization concerned has been ob5 tained; 

6 (B) the job for which such adversely affected 

7 worker is being trained is not being created in 

8 a promotional line that will infringe in any way 

9 upon the promotional opportunities of currently 

10 employed individuals; 

11 (C) such training is not for the same occu12 pation from which the worker was separated and 

13 with respect to which such worker’s group was 

14 certified pursuant to section 425(d); 

15 (D) the employer is provided reimbursement 

16 of not more than 50 percent of the wage rate of 

17 the participant, for the cost of providing the 

18 training and additional supervision related to 

19 the training; and 

20 (E) the employer has not received payment 

21 under with respect to any other on-the-job train22 ing provided by such employer which failed to 

23 meet the requirements of subparagraphs (A) 

24 through (D). 

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1 (f) DEFINITIONS.—As used in this part the following 

2 definitions apply: 

3 (1) The term ‘‘adversely affected employment’’ 

4 means employment at an employment site, if workers 

5 at such site are eligible to apply for adjustment as6 sistance under this part. 

7 (2) The term ‘‘adversely affected worker’’ means 

8 an individual who has been totally or partially sepa9 rated from employment and is eligible to apply for 

10 adjustment assistance under this part. 

(3) The term ‘‘average weekly wage’’ means 1 11 ⁄13

12 of the total wages paid to an individual in the quar13 ter in which the individual’s total wages were highest 

14 among the first 4 of the last 5 completed calendar 

15 quarters immediately before the quarter in which oc16 curs the week with respect to which the computation 

17 is made. Such week shall be the week in which total 

18 separation occurred, or, in cases where partial sepa19 ration is claimed, an appropriate week, as defined in 

20 regulations prescribed by the Secretary. 

21 (4) The term ‘‘average weekly hours’’ means the 

22 average hours worked by the individual (excluding 

23 overtime) in the employment from which he has been 

24 or claims to have been separated in the 52 weeks (ex25 cluding weeks during which the individual was sick 

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1 or on vacation) preceding the week specified in the 

2 last sentence of paragraph (4). 

3 (5) The term ‘‘benefit period’’ means, with re4 spect to an individual— 

5 (A) the benefit year and any ensuing pe6 riod, as determined under applicable State law, 

7 during which the individual is eligible for reg8 ular compensation, additional compensation, or 

9 extended compensation; or 

10 (B) the equivalent to such a benefit year or 

11 ensuing period provided for under the applicable 

12 Federal unemployment insurance law. 

13 (6) The term ‘‘consumer goods manufacturing’’ 

14 means the electrical equipment, appliance, and com15 ponent manufacturing industry and transportation 

16 equipment manufacturing. 

17 (7) The term ‘‘employment site’’ means a single 

18 facility or site of employment. 

19 (8) The term ‘‘energy-intensive manufacturing 

20 industries’’ means all industrial sectors, entities, or 

21 groups of entities that meet the energy or greenhouse 

22 gas intensity criteria in section 765(b)(2)(A)(i) of the 

23 Clean Air Act based on the most recent data avail24 able. 

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1 (9) The term ‘‘energy producing and trans2 forming industries’’ means the coal mining industry, 

3 oil and gas extraction, electricity power generation, 

4 transmission and distribution, and natural gas dis5 tribution. 

6 (10) The term ‘‘industries dependent on energy 

7 industries’’ means rail transportation and pipeline 

8 transportation. 

9 (11) The term ‘‘on-the-job training’’ means 

10 training provided by an employer to an individual 

11 who is employed by the employer. 

12 (12) The terms ‘‘partial separation’’ and ‘‘par13 tially separated’’ refer, with respect to an individual 

14 who has not been totally separated, that such indi15 vidual has had— 

16 (A) his or her hours of work reduced to 80 

17 percent or less of his average weekly hours in ad18 versely affected employment; and 

19 (B) his or her wages reduced to 80 percent 

20 or less of his average weekly wage in such ad21 versely affected employment. 

22 (13) The term ‘‘public agency’’ means a depart23 ment or agency of a State or political subdivision of 

24 a State or of the Federal government. 

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1 (14) The term ‘‘Secretary’’ means the Secretary 

2 of Labor. 

3 (15) The term ‘‘service workers’’ means workers 

4 supplying support or auxiliary services to an employ5 ment site. 

6 (16) The term ‘‘State’’ includes the District of 

7 Columbia and the Commonwealth of Puerto Rico: and 

8 the term ‘‘United States’’ when used in the geo9 graphical sense includes such Commonwealth. 

10 (17) The term ‘‘State agency’’ means the agency 

11 of the State which administers the State law. 

12 (18) The term ‘‘State law’’ means the unemploy13 ment insurance law of the State approved by the Sec14 retary of Labor under section 3304 of the Internal 

15 Revenue Code of 1954. 

16 (19) The terms ‘‘total separation’’ and ‘‘totally 

17 separated’’ refer to the layoff or severance of an indi18 vidual from employment with an employer in which 

19 adversely affected employment exists. 

20 (20) The term ‘‘unemployment insurance’’ means 

21 the unemployment compensation payable to an indi22 vidual under any State law or Federal unemployment 

23 compensation law, including chapter 85 of title 5, 

24 United States Code, and the Railroad Unemployment 

25 Insurance Act. The terms ‘‘regular compensation’’, 

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1 ‘‘additional compensation’’, and ‘‘extended compensa2 tion’’ have the same respective meanings that are 

3 given them in section 205(2), (3), and (4) of the Fed4 eral-State Extended Unemployment Compensation 

5 Act of 1970 (26 U.S.C. 3304 note.) 

6 (21) The term ‘‘week’’ means a week as defined 

7 in the applicable State law. 

8 (22) The term ‘‘week of unemployment’’ means a 

9 week of total, part-total, or partial unemployment as 

10 determined under the applicable State law or Federal 

11 unemployment insurance law. 

12 (g) SPECIAL RULE WITH RESPECT TO MILITARY

13 SERVICE.— 

14 (1) IN GENERAL.—Notwithstanding any other 

15 provision of this part, the Secretary may waive any 

16 requirement of this part that the Secretary determines 

17 is necessary to ensure that an adversely affected work18 er who is a member of a reserve component of the 

19 Armed Forces and serves a period of duty described 

20 in paragraph (2) is eligible to receive a climate 

21 change adjustment allowance, training, and other 

22 benefits under this part in the same manner and to 

23 the same extent as if the worker had not served the 

24 period of duty. 

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1 (2) PERIOD OF DUTY DESCRIBED.—An adversely 

2 affected worker serves a period of duty described in 

3 this paragraph if, before completing training under 

4 this part, the worker— 

5 (A) serves on active duty for a period of 

6 more than 30 days under a call or order to ac7 tive duty of more than 30 days; or 

8 (B) in the case of a member of the Army 

9 National Guard of the United States or Air Na10 tional Guard of the United States, performs full11 time National Guard duty under section 502(f) 

12 of title 32, United States Code, for 30 consecutive 

13 days or more when authorized by the President 

14 or the Secretary of Defense for the purpose of re15 sponding to a national emergency declared by 

16 the President and supported by Federal funds. 

17 (h) FRAUD AND RECOVERY OF OVERPAYMENTS.— 

18 (1) RECOVERY OF PAYMENTS TO WHICH AN INDI19 VIDUAL WAS NOT ENTITLED.—If the Secretary or a 

20 court of competent jurisdiction determines that any 

21 person has received any payment under this part to 

22 which the individual was not entitled, such indi23 vidual shall be liable to repay such amount to the 

24 Secretary, as the case may be, except that the Secmstockstill on PROD1PC66 with BILLS

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1 retary shall waive such repayment if such agency or 

2 the Secretary determines that— 

3 (A) the payment was made without fault on 

4 the part of such individual; and 

5 (B) requiring such repayment would cause 

6 a financial hardship for the individual (or the 

7 individual’s household, if applicable) when tak8 ing into consideration the income and resources 

9 reasonably available to the individual (or house10 hold) and other ordinary living expenses of the 

11 individual (or household). 

12 (2) MEANS OF RECOVERY.—Unless an overpay13 ment is otherwise recovered, or waived under para14 graph (1), the Secretary shall recover the overpay15 ment by deductions from any sums payable to such 

16 person under this part, under any Federal unemploy17 ment compensation law or other Federal law admin18 istered by the Secretary which provides for the pay19 ment of assistance or an allowance with respect to 

20 unemployment. Any amount recovered under this sec21 tion shall be returned to the Treasury of the United 

22 States. 

23 (3) PENALTIES FOR FRAUD.—Any person who— 

24 (A) makes a false statement of a material 

25 fact knowing it to be false, or knowingly fails to 

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1 disclose a material fact, for the purpose of ob2 taining or increasing for that person or for any 

3 other person any payment authorized to be fur4 nished under this part; or 

5 (B) makes a false statement of a material 

6 fact knowing it to be false, or knowingly fails to 

7 disclose a material fact, when providing infor8 mation to the Secretary during an investigation 

9 of a petition under section 425(c), 

10 shall be imprisoned for not more than one year, or fined 

11 under title 18, United States Code, or both, and be ineligible 

12 for any further payments under this part. 

13 (i) REGULATIONS.—The Secretary shall prescribe such 

14 regulations as may be necessary to carry out the provisions 

15 of this part. 

16 (j) STUDY ON OLDER WORKERS.—The Secretary shall 

17 conduct a study examine the circumstances of older ad18 versely affected workers and the ability of such workers to 

19 access their retirement benefits. The Secretary shall trans20 mit a report to Congress not later than 2 years after the 

21 date of enactment of this part on the findings of the study 

22 and the Secretary’s recommendations on how to ensure that 

23 adversely affected workers within 2 years of retirement are 

24 able to access their retirement benefits. 

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1 ƒ(k) SPENDING LIMIT.—For each fiscal year, the total 

2 amount of funds disbursed for the purposes described in sec3 tion 426 shall not exceed the amount deposited in that fiscal 

4 year into the Climate Change Worker Assistance Fund es5 tablished under section ƒ782(j)≈ of the Clean Air Act. The 

6 annual spending limit for any succeeding year shall be in7 creased by the difference, if any, between the amount of the 

8 prior year’s disbursements and the spending limitation for 

9 that year. The Secretary shall promulgate rules to ensure 

10 that this spending limit is not exceeded. Such rules shall 

11 provide that workers who receive any of the benefits de12 scribed in section 426 receive full benefits, and shall include 

13 the establishment of a waiting list for workers in the event 

14 that the requests for assistance exceed the spending limit.≈ 

15 Subtitle C—Consumer Assistance 

16 SEC. 431. ENERGY TAX CREDIT. 

17 Subpart C of part IV of subchapter A of chapter 1 

18 of the Internal Revenue Code of 1986 is amended by insert19 ing after section 36A the following new section: 

20 ‘‘SEC. 36B. ENERGY TAX CREDIT. 

21 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eligi22 ble individual, there shall be allowed as a credit against 

23 the tax imposed by this subtitle for the taxable year an 

24 amount equal to— 

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1 ‘‘(1) for an eligible individual with applicable 

2 income of less than $6,000, the phase in rate times the 

3 applicable income; 

4 ‘‘(2) for an eligible individual with applicable 

5 income that is greater than or equal to $6,000 and is 

6 less than or equal to the phase down amount, the 

7 maximum energy tax credit; and 

8 ‘‘(3) for an individual with applicable income 

9 that exceeds the phase down amount, an amount 

10 equal to— 

11 ‘‘(A) the maximum energy tax credit minus; 

12 or 

13 ‘‘(B) the difference between the individual’s 

14 applicable income and the phase down amount 

15 multiplied by .2. 

16 ‘‘(b) COORDINATION WITH ENERGY REFUND RE17 CEIVED THROUGH STATE HUMAN SERVICE AGENCIES.— 

18 The amount described in subsection (a) shall be reduced by 

1 19 ⁄12 for each month in which the individual or his or her 

20 spouse received a refund under section 432 of the American 

21 Clean Energy and Security Act of 2009. 

22 ‘‘(1) The Secretary of the Treasury shall promul23 gate regulations that instruct States on how to inform 

24 adult individuals who receive a refund under section 

25 432 of the American Clean Energy and Security Act 

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1 of 2009 of the number of months he or she received 

2 a refund and how such information shall be provided 

3 to the Internal Revenue Service. 

4 ‘‘(2) The Secretary of the Treasury shall estab5 lish a telephone and online system that allows an in6 dividual to inquire about the number of months she 

7 or he received such a refund. 

8 ‘‘(3) In the case of an individual that does not 

9 report the number of months a refund was provided 

10 under section 432 of the American Clean Energy and 

11 Security Act of 2009 or recorded an incorrect number 

12 of months, the Secretary of the Treasury shall adjust 

13 the energy tax credit based on the information re14 ceived from States, provided that the Secretary of the 

15 Treasury has made a determination that the informa16 tion meets a sufficient standard for accuracy. 

17 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur18 poses of this section: 

19 ‘‘(1) ELIGIBLE INDIVIDUAL.— 

20 ‘‘(A) IN GENERAL.—The term ‘eligible indi21 vidual’ means any individual other than— 

22 ‘‘(i) any nonresident alien individual; 

23 ‘‘(ii) any individual with respect to 

24 whom a deduction under section 151 is al25 lowable to another taxpayer for a taxable 

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1 year beginning in the calendar year in 

2 which the individual’s taxable year begins; 

3 and 

4 ‘‘(iii) an estate or trust. 

5 ‘‘(B) IDENTIFICATION NUMBER REQUIRE6 MENT.—Such term shall not include any indi7 vidual who— 

8 ‘‘(i) in the case of a return that is not 

9 a joint return, does not include the social 

10 security number of the individual; and 

11 ‘‘(ii) in the case of joint return, does 

12 not include the social security number of at 

13 least one of the taxpayers on such return. 

14 For purposes of the preceding sentence, the social 

15 security number shall not include a TIN issued 

16 by the Internal Revenue Service. 

17 ‘‘(2) APPLICABLE INCOME.—Applicable income 

18 means the larger of— 

19 ‘‘(A) earned income as defined in section 

20 32(c)(2), except that such term shall not include 

21 net earnings from self-employment which are not 

22 taken into account in computing taxable income; 

23 and 

24 ‘‘(B) adjusted gross income. 

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1 ‘‘(3) PHASE IN RATE.—The Secretary of the 

2 Treasury shall compute the phase in rates each year 

3 for the energy credit for joint returns and for returns 

4 that are not filed jointly with respect to each relevant 

5 number of qualifying individuals such that the phase 

6 in rate equals the maximum energy tax credit divided 

7 by $6,000. 

8 ‘‘(4) MAXIMUM ENERGY TAX CREDIT.— 

9 ‘‘(A) IN GENERAL.— 

10 ‘‘(i) The maximum energy tax credit 

11 shall vary based on the number of individ12 uals in the tax filing unit. 

13 ‘‘(ii) The maximum energy tax credit 

14 for a filing unit of a particular size shall 

15 be equal to the average annual reduction in 

16 purchasing power for low-income households 

17 of that household size, as calculated by the 

18 Environmental Protection Agency, that re19 sults from the regulation of greenhouse gas 

20 emissions under title VII of the Clean Air 

21 Act. 

22 ‘‘(iii) The Environmental Protection 

23 Agency, in consultation with other appro24 priate Federal agencies, shall calculate the 

25 maximum energy tax credit by August 31 of 

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1 each year for the following calendar year 

2 using the most recent, reliable data avail3 able. 

4 ‘‘(B) ENERGY TAX CREDIT CALCULATION.— 

5 ‘‘(i) DISTRIBUTION.—For each cal6 endar year, the Environmental Protection 

7 Agency shall determine pursuant to sub8 paragraph (B)(iii) the aggregate reduction 

9 in purchasing power among all United 

10 States households that results from the regu11 lation of greenhouse gas emissions under 

12 title VII of the Clean Air Act and distribute 

13 that aggregate reduction in purchasing 

14 power among all United States households 

15 based on— 

16 ‘‘(I) households’ share of total con17 sumption by all households; 

18 ‘‘(II) the carbon intensity and 

19 covered-emissions intensity of house20 holds’ consumption; and 

21 ‘‘(III) the share of households’ car22 bon and covered-emissions consump23 tion that is not financed by Federal 

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1 justment that offsets increased carbon 

2 costs. 

3 ‘‘(ii) MAXIMUM ENERGY TAX CRED4 IT.—The maximum energy tax credit shall 

5 be equal to the arithmetic mean value of the 

6 amount allocated under clause (i) to house7 holds of a specified household size in the 

8 lowest income quintile. Tax filing units that 

9 include 5 or more individuals shall be eligi10 ble for the arithmetic mean value of the 

11 amount allocated under clause (i) to house12 holds that includes 5 or more individuals. 

13 ‘‘(iii) AGGREGATE REDUCTION IN PUR14 CHASING POWER.—For purposes of this sec15 tion, the aggregate reduction in purchasing 

16 power shall be based on the projected total 

17 market value of the emissions allowances 

18 used to demonstrate compliance with title 

19 VII of the Clean Air Act in that year, ad20 justed to reflect costs that were not incurred 

21 by households as a result of allowances free22 ly allocated pursuant to section 782 of the 

23 Clean Air Act, as estimated by the Environ24 mental Protection Agency, and calculated 

25 in a way generally recognized as suitable by 

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1 experts in evaluating such purchasing 

2 power impacts. 

3 ‘‘(iv) INCOME QUINTILES.—Income 

4 quintiles shall be determined by ranking 

5 households according to income adjusted for 

6 household size, and shall be constructed so 

7 that each quintile contains an equal number 

8 of people. 

9 ‘‘(5) PHASE DOWN AMOUNT.— 

10 ‘‘(A) In the case of an eligible individual 

11 who has no qualifying individuals, the phase 

12 down amount shall be— 

13 ‘‘(i) $20,000 in the case of an indi14 vidual who does not file a joint return; and 

15 ‘‘(ii) $25,000 in the case of a joint re16 turn. 

17 ‘‘(B) In the case of an eligible individual 

18 who files a joint return and has at least one 

19 qualifying individual— 

20 ‘‘(i) If the eligible individual has one 

21 qualifying individual, the lowest income 

22 level that exceeds the phaseout amount as 

23 defined in section 32(b)(2) at which a mar24 ried couple with one qualifying child is inmstockstill on PROD1PC66 with BILLS

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1 eligible for the earned income credit for the 

2 taxable year. 

3 ‘‘(ii) If the eligible individual has two 

4 qualifying individuals, the lowest income 

5 level that exceeds the phaseout amount as 

6 defined in section 32(b)(2) at which a mar7 ried couple with two qualifying children is 

8 ineligible for the earned income credit for 

9 the taxable year. 

10 ‘‘(iii) If the eligible individual claims 

11 three or more qualifying individuals, the 

12 lowest income level that exceeds the phaseout 

13 amount as defined in section 32(b)(2) at 

14 which a married couple with three or more 

15 qualifying children is ineligible for the 

16 earned income credit for the taxable year. 

17 ‘‘(C) In the case of an eligible individual 

18 who does not file a joint return and has at least 

19 one individual qualifying individual— 

20 ‘‘(i) If the eligible individual has one 

21 qualifying individual, the lowest income 

22 level that exceeds the phaseout amount as 

23 defined in section 32(b)(2) at which a single 

24 individual with one qualifying child is inmstockstill on PROD1PC66 with BILLS

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1 eligible for the earned income credit for the 

2 taxable year. 

3 ‘‘(ii) If the eligible individual has two 

4 qualifying individuals, the lowest income 

5 level that exceeds the phaseout amount as 

6 defined in section 32(b)(2) at which a single 

7 individual with two qualifying children is 

8 ineligible for the earned income credit for 

9 the taxable year. 

10 ‘‘(iii) If the eligible individual has 

11 three or more qualifying individuals, the 

12 lowest income level that exceeds the phaseout 

13 amount as defined in section 32(b)(2) at 

14 which a single individual with three or 

15 more qualifying children is ineligible for the 

16 earned income credit for the taxable year. 

17 ‘‘(6) QUALIFYING INDIVIDUAL.—A qualifying in18 dividual is an individual whom the eligible indi19 vidual claims as a dependent under section 151, or as 

20 a qualifying child for the earned income credit under 

21 section 32(c)(3) or the child tax credit under section 

22 24, or both. The term qualifying individual does not 

23 include— 

24 ‘‘(A) someone claimed as a dependent under 

25 section 151 if that dependent is claimed as a 

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1 qualifying child for the earned income tax credit 

2 or the child tax credit on a tax form by someone 

3 other than the eligible individual; and 

4 ‘‘(B) the eligible individual and, if a joint 

5 return, his or her spouse. 

6 ‘‘(7) NUMBER OF PEOPLE IN THE TAX FILING

7 UNIT.—The number of people in the tax filing unit 

8 shall equal the sum of the number of qualifying indi9 viduals plus— 

10 ‘‘(A) in the case of a joint return, 2; and 

11 ‘‘(B) in the case of a return that is not filed 

12 jointly, 1. 

13 ‘‘(d) TREATMENT OF POSSESSIONS.— 

14 ‘‘(1) PAYMENTS TO POSSESSIONS.— 

15 ‘‘(A) MIRROR CODE POSSESSION.—The Sec16 retary of the Treasury shall pay to each posses17 sion of the United States with a mirror code tax 

18 system amounts equal to the loss to that posses19 sion by reason of the amendments made by this 

20 section. Such amounts shall be determined by the 

21 Secretary of the Treasury based on information 

22 provided by the Government of the respective 

23 possession. 

24 ‘‘(B) OTHER POSSESSIONS.—The Secretary 

25 of the Treasury shall pay to each possession of 

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1 the United States which does not have a mirror 

2 code tax system amounts estimated by the Sec3 retary of the Treasury as being equal to the ag4 gregate benefits that would have been provided to 

5 residents of such possession by reason of the 

6 amendments made by this section if a mirror 

7 code tax system had been in effect in such posses8 sion. The preceding sentence shall not apply for 

9 a given taxable year with respect to any posses10 sion of the United States unless such possession 

11 has a plan, which has been approved by the Sec12 retary of the Treasury, under which such posses13 sion will promptly distribute such payments to 

14 residents of such possession. 

15 ‘‘(2) COORDINATION WITH CREDIT ALLOWED

16 AGAINST UNITED STATES INCOME TAXES.—No credit 

17 shall be allowed against United States income taxes 

18 for any taxable year under this section to any per19 son— 

20 ‘‘(A) to whom a credit is allowed against 

21 taxes imposed by the possession by reason of the 

22 amendments made by this section for such tax23 able year; or 

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1 ‘‘(B) who is eligible for a payment under a 

2 plan described in paragraph (1)(B) with respect 

3 to such taxable year. 

4 ‘‘(e) AMOUNT OF CREDIT TO BE DETERMINED UNDER

5 TABLES.—The amount of the credit allowed by this section 

6 shall be determined under tables prescribed by the Sec7 retary. 

8 ‘‘(f) INFLATION ADJUSTMENTS.— In the case of any 

9 taxable year beginning after 2009, dollar amounts in sub10 section (c)(4)(A) shall be increased by an amount equal to 

11 such dollar amount, multiplied by the cost-of-living adjust12 ment determined under section 1(f)(3) of the Internal Rev13 enue Code of 1986. 

14 ‘‘(g) TREATMENT IN OTHER PROGRAMS.—The energy 

15 tax credit provided under this section shall not be consid16 ered income or resources for any purpose under any Fed17 eral, State, or local laws, including, but not limited to, laws 

18 relating to an income tax or public assistance program (in19 cluding, but not limited to, health care, cash aid, child care, 

20 nutrition programs, and housing assistance), and no par21 ticipating State or political subdivision thereof shall de22 crease any assistance otherwise provided an individual or 

23 individuals because of the receipt of an energy tax credit 

24 under this Act.’’. 

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

2 CONSUMERS. 

3 (a) ENERGY REFUND PROGRAM.— 

4 (1) The Administrator of the Environmental 

5 Protection Agency, or the agency designated by the 

6 Administrator shall formulate and administer the 

7 ‘‘Energy Refund Program’’. 

8 (2) At the request of the State agency, eligible 

9 low-income households within the State shall receive 

10 a monthly cash energy refund equal to the estimated 

11 loss in purchasing power resulting from this Act. 

12 (b) ELIGIBILITY.— 

13 (1) ELIGIBLE HOUSEHOLDS.—Participation in 

14 the Energy Refund Program shall be limited to a 

15 household that— 

16 (A) the State agency determines to be par17 ticipating in (i) the Supplemental Nutrition As18 sistance Program authorized by the Food and 

19 Nutrition Act of 2008 (7 U.S.C. 2011 et seq.); 

20 (ii) the Food Distribution Program on Indian 

21 Reservations authorized by section 4(b) of such 

22 Act (7 U.S.C. 2013(b)); or (iii) the program for 

23 nutrition assistance in Puerto Rico or American 

24 Samoa under section 19 of the such Act (7 

25 U.S.C. 2028); 

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1 (B) has gross income that does not exceed 

2 150 percent of the poverty line; or 

3 (C) consists of a single individual or a mar4 ried couple and (i) receives the subsidy described 

5 in section 1860D–14 of the Social Security Act 

6 (42 U.S.C. 1395w–114); or (ii)(I) participates in 

7 the program under section XVIII of the Social 

8 Security Act; and (II) meets the income require9 ments described in section 1860D–14(a)(1) or 

10 (a)(2) of such Act (42 U.S.C. 1395w–114(a)(1) 

11 or (a)(2)). 

12 (2) STREAMLINED ELIGIBILITY FOR CERTAIN

13 BENEFICIARIES.—The Administrator, in consultation 

14 with the Secretary of Health and Human Services, 

15 the Commissioner of Social Security, the Railroad 

16 Retirement Board, the Secretary of Veterans Affairs, 

17 and the State agencies shall develop procedures to en18 sure that low-income beneficiaries of the benefit pro19 grams they administer receive the energy refund for 

20 which they are eligible. 

21 (3) LIMITATION.—Notwithstanding any provi22 sion of law, the Administrator shall establish proce23 dures to ensure that individuals that qualify for the 

24 refund under paragraph (1)(B) and that do not par25 ticipate in the Supplemental Nutrition Assistance 

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1 Program are United States citizens, United States 

2 nationals, or individuals lawfully residing in the 

3 United States. 

4 (4) NATIONAL STANDARDS.—The Administrator 

5 shall establish uniform national standards of eligi6 bility in accordance with the provisions of this sec7 tion. No State agency shall impose any other stand8 ard or requirement as a condition of eligibility or re9 fund receipt under the program. Assistance in the En10 ergy Refund Program shall be furnished promptly to 

11 all eligible households who make application for such 

12 participation. 

13 (c) MONTHLY ENERGY REFUND AMOUNT.— 

14 (1) MONTHLY ENERGY REFUND.—The monthly 

15 refund under this subsection for households of 1, 2, 3, 

16 4, and 5 or more members shall be equal to the max17 imum energy tax credit amount calculated under sec18 tion 36B(c)(4) of the Internal Revenue Code of 1986 

19 for each household size, divided by 12 and rounded to 

20 the nearest whole dollar amount. 

21 (2) MONTHLY ELIGIBILITY.—A household shall 

22 not be eligible for the refund under this section for 

23 months that the household has not established eligi24 bility under subsection (b). 

25 (d) DELIVERY MECHANISM.— 

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1 (1) Subject to standards and an implementation 

2 schedule set by the Administrator, the energy refund 

3 shall be provided in monthly installments via— 

4 (A) direct deposit into the eligible house5 hold’s designated bank account; 

6 (B) the State’s electronic benefit transfer 

7 system; or 

8 (C) another Federal or State mechanism, if 

9 such a mechanism is approved by the Adminis10 trator. 

11 (2) Such standards shall include— 

12 (A)(i) defining the required level of recipi13 ent protection regarding privacy; 

14 (ii) guidance on how recipients are offered 

15 choices, when relevant, about the delivery mecha16 nism; 

17 (iii) guidance on ease of use and access to 

18 the refund, including the prohibition of fees 

19 charged to recipients for withdrawals or other 

20 services; and 

21 (iv) cost-effective protections against im22 proper accessing of the energy refund; 

23 (B) operating standards that provide for 

24 interoperability between States and law enforce25 ment monitoring; and 

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1 (C) other standards, as determined by the 

2 Administrator or the Administrator’s designee. 

3 (e) INFORMATION ABOUT REFUND PROVIDED TO

4 HOUSEHOLDS AND INTERNAL REVENUE SERVICE.— 

5 (1) By January 31 of each year, for each adult 

6 that was a member of a household that received an 

7 energy refund under this section in the State during 

8 the prior calendar year, each State shall issue a form 

9 that conforms to standards established by the Sec10 retary of the Treasury under section 36B(b) of the In11 ternal Revenue Code of 1986, containing— 

12 (A) the name, address, and social security 

13 number of the adult household member; and 

14 (B) the number of months the individual 

15 was a member of a household that received an 

16 energy refund under this section. 

17 (2) States shall provide this information to the 

18 Internal Revenue Service in accordance to standards 

19 and regulations set forth by the Secretary of the 

20 Treasury. 

21 (f) ADMINISTRATION.— 

22 (1) IN GENERAL.—The State agency of each par23 ticipating State shall assume responsibility for the 

24 certification of applicant households and for the 

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1 issuance of refunds and the control and accountability 

2 thereof. 

3 (2) PROCEDURES.—Under standards established 

4 by the Administrator, the State agency shall establish 

5 procedures governing the administration of the En6 ergy Refund Program that the State agency deter7 mines best serve households in the State, including 

8 households with special needs, such as households with 

9 elderly or disabled members, households in rural 

10 areas, homeless individuals, and households residing 

11 on reservations as defined in the Indian Child Wel12 fare Act of 1978 and the Indian Financing Act of 

13 1974. In carrying out this paragraph, a State agen14 cy— 

15 (A) shall provide timely, accurate, and fair 

16 service to applicants for, and participants in, 

17 the Energy Refund Program; 

18 (B) shall permit an applicant household to 

19 apply to participate in the program at the time 

20 that the household first contacts the State agency, 

21 and shall consider an application that contains 

22 the name, address, and signature of the appli23 cant to be sufficient to constitute an application 

24 for participation; 

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1 (C) shall screen any applicant household for 

2 the Supplemental Nutrition Assistance Program, 

3 the State’s medical assistance program under 

4 section XIX of the Social Security Act, State 

5 Childrens Health Insurance Program under sec6 tion XXI of the Social Security Act, and a State 

7 program that provides basic assistance under a 

8 State program funded under title IV of the So9 cial Security Act or with qualified State expend10 itures as defined in section 409(a)(7) of the So11 cial Security Act for eligibility for the Energy 

12 Refund Program and, if eligible, shall enroll 

13 such applicant household in the Energy Refund 

14 Program; 

15 (D) shall complete certification of and pro16 vide a refund to any eligible household not later 

17 than thirty days following its filing of an appli18 cation; 

19 (E) shall use appropriate bilingual per20 sonnel and materials in the administration of 

21 the program in those portions of the State in 

22 which a substantial number of members of low23 income households speak a language other than 

24 English; and 

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1 (F) shall utilize State agency personnel who 

2 are employed in accordance with the current 

3 standards for a Merit System of Personnel Ad4 ministration or any standards later prescribed 

5 by the Office of Personnel Management pursuant 

6 to section 208 of the Intergovernmental Personnel 

7 Act of 1970 (42 U.S.C. 4728) modifying or su8 perseding such standards relating to the estab9 lishment and maintenance of personnel stand10 ards on a merit basis to make all tentative and 

11 final determinations of eligibility and ineligi12 bility. 

13 (3) REGULATIONS.— 

14 (A) Except as provided in subparagraph 

15 (B) the Administrator shall issue such regula16 tions consistent with this section as the Adminis17 trator deems necessary or appropriate for the ef18 fective and efficient administration of the En19 ergy Refund Program and shall promulgate all 

20 such regulations in accordance with the proce21 dures set forth in section 553 of title 5, United 

22 States Code. 

23 (B) Without regard to section 553 of title 5 

24 of such Code, the Administrator may, during the 

25 period beginning with the effective date of this 

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1 section and ending two years after such date, by 

2 rule promulgate as final any procedures that are 

3 substantially the same as the procedures gov4 erning the Supplemental Nutrition Assistance 

5 Program at 7 C.F.R. 273.2, 273.12.273.15. 

6 (g) TREATMENT.—The value of the refund provided 

7 under this Act shall not be considered income or resources 

8 for any purpose under any Federal, State, or local laws, 

9 including, but not limited to, laws relating to an income 

10 tax, or public assistance programs (including, but not lim11 ited to, health care, cash aid, child care, nutrition pro12 grams, and housing assistance) and no participating State 

13 or political subdivision thereof shall decrease any assistance 

14 otherwise provided an individual or individuals because of 

15 the receipt of a refund under this Act. 

16 (h) PROGRAM INTEGRITY.—For purposes of ensuring 

17 program integrity and complying with the requirements of 

18 the Improper Payment Information Act of 2002, the Ad19 ministrator shall— 

20 (1) to the maximum extent possible rely on and 

21 coordinate with the quality control sample and review 

22 procedures of section 16(c)(2), (3), (4), and (5) of the 

23 Supplemental Nutrition Assistance Program; and 

24 (2) develop procedures to monitor the compliance 

25 with and accuracy of State agencies in providing 

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1 forms to household members and the Internal Revenue 

2 Service under subsection (f). 

3 (i) DEFINITIONS.— 

4 (1) ADMINISTRATOR.—The term ‘‘Adminis5 trator’’ means the Administrator of the Environ6 mental Protection Agency or the head of another 

7 agency designated by the Administrator. 

8 (2) ELECTRONIC BENEFIT TRANSFER SYSTEM.— 

9 The term ‘‘electronic benefit transfer system’’ means a 

10 system by which household benefits or refunds defined 

11 under subsection (d) are issued from and stored in a 

12 central databank via electronic benefit transfer cards. 

13 (3) GROSS INCOME.—The term ‘‘gross income’’ 

14 means the gross income of a household that is deter15 mined in accordance with standards and procedures 

16 established under section 5 of the Food and Nutrition 

17 Act of 2008 (7 U.S.C. 2014) and its implementing 

18 regulations. 

19 (4) HOUSEHOLD.—The term ‘‘household’’ 

20 means— 

21 (A)(i) except as provided in subparagraph 

22 (C), an individual or a group of individuals who 

23 are a household under section 3(n) of the Food 

24 and Nutrition Act of 2008 (7 U.S.C. 2012(n)); 

25 and 

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1 (ii) a single individual or married couple 

2 that receive benefits under section 1860D–14 of 

3 the Social Security Act (42 U.S.C. 1395w–114). 

4 (B) The Administrator shall establish rules 

5 for providing the energy refund in an equitable 

6 and administratively simple manner to house7 holds where the group of individuals who live to8 gether includes a combination of members de9 scribed in clauses (i) and (ii) of subparagraph 

10 (A), or includes additional members not de11 scribed in clause (i) or clause (ii) of subpara12 graph (A). 

13 (C) The Administrator shall establish rules 

14 regarding the eligibility and delivery of the en15 ergy refund to groups of individuals described in 

16 section 3(n)(4) or (5) of the Food and Nutrition 

17 Act of 2008 (7 U.S.C. 2012(n)). 

18 (5) POVERTY LINE.—The term ‘‘poverty line’’ 

19 has the meaning given the term in section 673(2) of 

20 the Community Services Block Grant Act (42 U.S.C. 

21 9902(2)), including any revision required by that sec22 tion. 

23 (6) STATE.—The term ‘‘State’’ means the 50 

24 States, the District of Columbia, the Commonwealth 

25 of Puerto Rico, American Samoa, the United States 

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1 Virgin Islands, Guam, and the Commonwealth of the 

2 Northern Mariana Islands. 

3 (7) STATE AGENCY.—The term ‘‘State agency’’ 

4 means an agency of State government, including the 

5 local offices thereof, that has responsibility for admin6 istration of the 1 or more federally aided public as7 sistance programs within the State, and in those 

8 States where such assistance programs are operated 

9 on a decentralized basis, the term shall include the 

10 counterpart local agencies administering such pro11 grams. 

12 (8) OTHER TERMS.—Other terms not defined in 

13 this Act shall have the same meaning applied in the 

14 Supplemental Nutrition Assistance Program unless 

15 the Administrator finds for good cause that applica16 tion of a particular definition would be detrimental 

17 to the purposes of the Energy Refund Program. 

18 Subtitle D—Exporting Clean 

19 Technology 

20 SEC. 441. FINDINGS AND PURPOSES. 

21 (a) FINDINGS.—Congress finds the following: 

22 (1) Protecting Americans from the impacts of 

23 climate change requires global reductions in green24 house gas emissions. 

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1 (2) Although developing countries are histori2 cally least responsible for the cumulative greenhouse 

3 gas emissions that are causing climate change and 

4 continue to have very low per capita greenhouse gas 

5 emissions, their overall greenhouse gas emissions are 

6 increasing as they seek to grow their economies and 

7 reduce energy poverty for their populations. 

8 (3) Many developing countries lack the financial 

9 and technical resources to adopt clean energy tech10 nologies and absent assistance their greenhouse gas 

11 emissions will continue to increase. 

12 (4) Investments in clean energy technology co13 operation can substantially reduce global greenhouse 

14 gas emissions while providing developing countries 

15 with incentives to adopt policies that will address 

16 competitiveness concerns related to regulation of 

17 United States greenhouse gas emissions. 

18 (5) Investments in clean technology in devel19 oping countries will increase demand for clean energy 

20 products, open up new markets for United States 

21 companies, spur innovation, and lower costs. 

22 (6) Under Article 4 of the United Nations 

23 Framework Convention on Climate Change, developed 

24 country parties, including the United States, com25 mitted to ‘‘take all practicable steps to promote, famstockstill on PROD1PC66 with BILLS

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1 cilitate, and finance, as appropriate, the transfer of, 

2 or access to, environmentally sound technologies and 

3 know-how to other parties, particularly developing 

4 country parties, to enable them to implement the pro5 visions of the Convention’’. 

6 (7) Under the Bali Action Plan, developed coun7 try parties to the United Nations Framework Conven8 tion on Climate Change, including the United States, 

9 committed to ‘‘enhanced action on the provision of fi10 nancial resources and investment to support action 

11 on mitigation and adaptation and technology co12 operation,’’ including, inter alia, consideration of 

13 ‘‘improved access to adequate, predictable, and sus14 tainable financial resources and financial and tech15 nical support, and the provision of new and addi16 tional resources, including official and concessional 

17 funding for developing country parties’’. 

18 (b) PURPOSES.—The purposes of this subtitle are— 

19 (1) to provide United States assistance and le20 verage private resources to encourage widespread im21 plementation, in developing countries, of activities 

22 that reduce, sequester, or avoid greenhouse gas emis23 sions; and 

24 (2) to provide such assistance in a manner 

25 that— 

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1 (A) encourages such countries to adopt poli2 cies and measures, including sector-based and 

3 cross-sector policies and measures, that substan4 tially reduce, sequester, or avoid greenhouse gas 

5 emissions; and 

6 (B) promotes the successful negotiation of a 

7 global agreement to reduce greenhouse gas emis8 sions under the United Nations Framework Con9 vention on Climate Change. 

10 SEC. 442. DEFINITIONS. 

11 In this subtitle: 

12 (1) ALLOWANCE.—The term ‘‘allowance’’ means 

13 an emission allowance established under section 721 

14 of the Clean Air Act. 

15 (2) APPROPRIATE CONGRESSIONAL COMMIT16 TEES.—The term ‘‘appropriate congressional commit17 tees’’ means— 

18 (A) the Committees on Energy and Com19 merce, Foreign Affairs, and Financial Services 

20 of the House of Representatives; and 

21 (B) the Committees on Environment and 

22 Public Works, Energy and Natural Resources, 

23 and Foreign Relations of the Senate. 

24 (3) CONVENTION.—The term ‘‘Convention’’ 

25 means the United Nations Framework Convention on 

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1 Climate Change, done at New York on May 9, 1992, 

2 and entered into force on March 21, 1994. 

3 (4) DEVELOPING COUNTRY.—The term ‘‘devel4 oping country’’ means a country eligible to receive of5 ficial development assistance according to the income 

6 guidelines of the Development Assistance Committee 

7 of the Organization for Economic Cooperation and 

8 Development. 

9 (5) ELIGIBLE COUNTRY.—The term ‘‘eligible 

10 country’’ means a developing country that is deter11 mined by the interagency group under section 444 to 

12 be eligible to receive assistance from the International 

13 Clean Technology Account. 

14 (6) INTERAGENCY GROUP.—The term ‘‘inter15 agency group’’ means the group established by the 

16 President under section 443 to administer distribu17 tions from the International Clean Technology Ac18 count. 

19 (7) INTERNATIONAL CLEAN TECHNOLOGY AC20 COUNT.—The term ‘‘International Clean Technology 

21 Account’’ means the account to which the Adminis22 trator allocates allowances under section 782(o) of the 

23 Clean Air Act. 

24 (8) LEAST DEVELOPED COUNTRY.—The term 

25 ‘‘least developed country’’ means a foreign country the 

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1 United Nations has identified as among the least de2 veloped of developing countries. 

3 (9) QUALIFYING ACTIVITY.—The term ‘‘quali4 fying activity’’ means an activity that meets the cri5 teria in section 445. 

6 (10) QUALIFYING ENTITY.—The term ‘‘qualifying 

7 entity’’ means a national, regional, or local govern8 ment in, or a nongovernmental organization or pri9 vate entity located or operating in, an eligible coun10 try. 

11 SEC. 443. GOVERNANCE. 

12 (a) OVERSIGHT.—The Secretary of State, or such other 

13 Federal agency head as the President may designate, in 

14 consultation with the interagency group established under 

15 subsection (b), shall oversee distributions of allowances from 

16 the International Clean Technology Account. 

17 (b) INTERAGENCY GROUP.—The President shall estab18 lish an interagency group to administer the International 

19 Clean Technology Account. The Members of the interagency 

20 group shall include— 

21 (1) the Secretary of State; 

22 (2) the Administrator of the Environmental Pro23 tection Agency; 

24 (3) the Secretary of Energy; 

25 (4) the Secretary of the Treasury; 

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1 (5) the Administrator of the United States Agen2 cy for International Development; and 

3 (6) any other head of a Federal agency or execu4 tive branch appointee that the President may des5 ignate. 

6 (c) CHAIRPERSON.—The Secretary of State shall serve 

7 as the chairperson of the interagency group. 

8 (d) SUPPLEMENT NOT SUPPLANT.—Allowances dis9 tributed from the International Clean Technology Account 

10 shall be used to supplement, and not to supplant, any other 

11 Federal, State, or local resources available to carry out ac12 tivities that are qualifying activities under this subtitle. 

13 SEC. 444. DETERMINATION OF ELIGIBLE COUNTRIES. 

14 (a) IN GENERAL.—The interagency group shall deter15 mine a country to be an eligible country for the purposes 

16 of this subtitle if a country meets the following criteria: 

17 (1) The country is a developing country that— 

18 (A) has entered into an international agree19 ment to which the United States is a party, 

20 under which such country agrees to take actions 

21 to produce measurable, reportable, and verifiable 

22 greenhouse gas emissions mitigation; or 

23 (B) is determined by the interagency group 

24 to have in force national policies and measures 

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1 portable, and verifiable greenhouse gas emissions 

2 mitigation. 

3 (2) The country has developed a nationally ap4 propriate mitigation strategy that seeks to achieve 

5 substantial reductions, sequestration, or avoidance of 

6 greenhouse gas emissions, relative to business-as-usual 

7 levels. 

8 (3) Subject to subsection (b)(1), such other cri9 teria as the President determines will serve the pur10 poses of this subtitle or other United States national 

11 security, foreign policy, environmental, or economic 

12 objectives. 

13 (b) EXCEPTIONS.— 

14 (1) Subsection (a)(3) applies only to bilateral as15 sistance under section 446(c). 

16 (2) The eligibility criteria in this section do not 

17 apply in the case of least developed countries receiv18 ing assistance under section 445(7) for the purpose of 

19 building capacity to meet such eligibility criteria. 

20 SEC. 445. QUALIFYING ACTIVITIES. 

21 Assistance under this subtitle may be provided only 

22 to qualifying entities for clean technology activities (includ23 ing building relevant technical and institutional capacity) 

24 that contribute to substantial, measurable, reportable, and 

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1 verifiable reductions, sequestration, or avoidance of green2 house gas emissions including— 

3 (1) deployment of technologies to capture and se4 quester carbon dioxide emissions from electric gener5 ating units or large industrial sources (except that as6 sistance under this subtitle for such deployment shall 

7 be limited to the cost of retrofitting existing facilities 

8 with such technologies or the incremental cost of pur9 chasing and installing such technologies at new facili10 ties); 

11 (2) deployment of renewable electricity genera12 tion from wind, solar, sustainably-produced biomass, 

13 geothermal, marine, or hydrokinetic sources; 

14 (3) substantial increases in the efficiency of elec15 tricity transmission, distribution, and consumption; 

16 (4) deployment of low- or zero emissions tech17 nologies that are facing financial or other barriers to 

18 their widespread deployment which could be addressed 

19 through support under this subtitle in order to reduce, 

20 sequester, or avoid emission; 

21 (5) reduction in transportation sector emissions 

22 through increased transportation system and vehicle 

23 efficiency or use of transportation fuels that have 

24 lifecycle greenhouse gas emissions that are substanmstockstill on PROD1PC66 with BILLS

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1 tially lower than those attributable to fossil fuel-based 

2 alternatives; 

3 (6) reduction in black carbon emissions; or 

4 (7) capacity building activities, including— 

5 (A) developing and implementing meth6 odologies and programs for measuring and quan7 tifying greenhouse gas emissions and verifying 

8 emissions mitigation; 

9 (B) assessing, developing, and implementing 

10 technology and policy options for greenhouse gas 

11 emissions mitigation and avoidance of future 

12 emissions, including sector and cross-sector miti13 gation strategies; and 

14 (C) providing other forms of technical as15 sistance to facilitate the qualification for, and re16 ceipt of, assistance under this Act. 

17 SEC. 446. ASSISTANCE. 

18 (a) IN GENERAL.—The Secretary of State, or such 

19 other Federal agency head as the President may designate, 

20 is authorized to provide assistance, through the distribution 

21 of allowances, from the International Clean Technology Ac22 count for qualifying activities that take place in eligible 

23 countries. 

24 (b) DISTRIBUTION OF ALLOWANCES.— 

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1 (1) IN GENERAL.—The Secretary of State, or 

2 such other Federal agency head as the President may 

3 designate, after consultation with the interagency 

4 group, shall distribute allowances from the Inter5 national Clean Technology Account— 

6 (A) in the form of bilateral assistance in ac7 cordance with paragraph (4); 

8 (B) to multilateral funds or institutions 

9 pursuant to the Convention or an agreement ne10 gotiated under the Convention; or 

11 (C) through some combination of the mecha12 nisms identified in subparagraphs (A) and (B). 

13 (2) GLOBAL ENVIRONMENT FACILITY.—For any 

14 allowances provided to the Global Environment Facil15 ity pursuant to paragraph (1)(B), the President shall 

16 designate the Secretary of the Treasury to distribute 

17 those allowances to the Global Environment Facility. 

18 (3) DISTRIBUTION THROUGH INTERNATIONAL

19 FUND OR INSTITUTION.—If allowances are distributed 

20 to a multilateral fund or institution, as authorized in 

21 paragraph (1), the Secretary of State, or such other 

22 Federal agency head as the President may designate, 

23 shall seek to ensure the establishment and implemen24 tation of adequate mechanisms to— 

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1 (A) apply and enforce the criteria for deter2 mination of eligible countries and qualifying ac3 tivities under sections 444 and 445, respectively; 

4 and 

5 (B) require public reporting describing the 

6 process and methodology for selecting the ulti7 mate recipients of assistance and a description of 

8 each activity that received assistance, including 

9 the amount of obligations and expenditures for 

10 assistance. 

11 (4) BILATERAL ASSISTANCE.— 

12 (A) IN GENERAL.—Bilateral assistance 

13 under paragraph (1) shall be carried out by the 

14 Administrator of the United States Agency for 

15 International Development, in consultation with 

16 the interagency group. 

17 (B) LIMITATIONS.—Not more than 15 per18 cent of allowances made available to carry out 

19 bilateral assistance under this subtitle in any 

20 year shall be distributed to support activities in 

21 any single country. 

22 (C) SELECTION CRITERIA.—Not later than 

23 2 years after the date of enactment of this sub24 title, the Administrator of the United States 

25 Agency for International Development, after conmstockstill on PROD1PC66 with BILLS

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1 sultation with the interagency group, shall de2 velop and publish a set of criteria to be used in 

3 evaluating activities within eligible countries for 

4 bilateral assistance under this subtitle. 

5 (D) CRITERIA REQUIREMENTS.—The cri6 teria under subparagraph (C) shall require 

7 that— 

8 (i) the activity is a qualifying activity; 

9 (ii) the activity will be conducted as 

10 part of an eligible country’s nationally ap11 propriate mitigation strategy or as part of 

12 an eligible country’s actions towards pro13 viding a nationally appropriate mitigation 

14 strategy to reduce, sequester, or avoid emis15 sions being implemented by the eligible 

16 country; 

17 (iii) the activity will not have adverse 

18 effects on human health, safety, or welfare, 

19 the environment, or natural resources; 

20 (iv) any technologies deployed through 

21 bilateral assistance under this subtitle will 

22 be properly implemented and maintained; 

23 (v) the activity will not cause any net 

24 loss of United States jobs or displacement of 

25 United States production; 

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1 (vi) costs of the activity will be shared 

2 by the host country government, private sec3 tor parties, or a multinational development 

4 bank, except that this clause does not apply 

5 to least developed countries; and 

6 (vii) the activity meets such other re7 quirements as the interagency group deter8 mines appropriate to further the purposes of 

9 this subtitle. 

10 (E) CRITERIA PREFERENCES.—The criteria 

11 under subparagraph (C) shall give preference to 

12 activities that— 

13 (i) promise to achieve large-scale green14 house gas reductions, sequestration, or 

15 avoidance at a national, sectoral or cross16 sectoral level; 

17 (ii) have the potential to catalyze a 

18 shift within the host country towards wide19 spread deployment of low- or zero-carbon 

20 energy technologies; 

21 (iii) build technical and institutional 

22 capacity and other activities that are un23 likely to be attractive to private sector fund24 ing; or 

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1 (iv) maximize opportunities to leverage 

2 other sources of assistance and catalyze pri3 vate-sector investment. 

4 (c) MONITORING, EVALUATION, AND ENFORCEMENT.— 

5 The Secretary of State, or such other Federal agency head 

6 as the President may designate, in consultation with the 

7 interagency group, shall establish and implement a system 

8 to monitor and evaluate the performance of activities receiv9 ing assistance under this subtitle. The Secretary of State, 

10 or such other Federal agency head as the President may 

11 designate, shall have the authority to suspend or terminate 

12 assistance in whole or in part for an activity if it is deter13 mined that the activity is not operating in compliance with 

14 the approved proposal. 

15 (d) COORDINATION WITH U.S. FOREIGN ASSIST16 ANCE.—Subject to the direction of the President, the Sec17 retary of State shall, to the extent practicable, seek to align 

18 activities under this section with broader development, pov19 erty alleviation, or natural resource management objectives 

20 and initiatives in the recipient country. 

21 (e) ANNUAL REPORTS.—Not later than March 1, 2012, 

22 and annually thereafter, the President shall submit to the 

23 appropriate congressional committees a report on the assist24 ance provided under this subtitle during the prior fiscal 

25 year. Such report shall include— 

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1 (1) a description of the amount and value of al2 lowances distributed during the prior fiscal year; 

3 (2) a description of each activity that received 

4 assistance during the prior fiscal year, and a descrip5 tion of the anticipated and actual outcomes; 

6 (3) an assessment of any adverse effects to 

7 human health, safety, or welfare, the environment, or 

8 natural resources as a result of activities supported 

9 under this subtitle; 

10 (4) an assessment of the success of the assistance 

11 provided under this subtitle to improving the tech12 nical and institutional capacity to implement sub13 stantial emissions reductions; and 

14 (5) an estimate of the greenhouse gas emissions 

15 reductions, sequestration, or avoidance achieved by 

16 assistance provided under this subtitle during the 

17 prior fiscal year. 

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1 Subtitle E—Adapting to Climate 

2 Change 

3 PART 1—DOMESTIC ADAPTATION 

4 Subpart A—National Climate Change Adaptation 

5 Program 

6 SEC. 451. NATIONAL CLIMATE CHANGE ADAPTATION PRO7 GRAM. 

8 The President shall establish within the United States 

9 Global Change Research Program a National Climate 

10 Change Adaptation Program for the purpose of increasing 

11 the overall effectiveness of Federal climate change adapta12 tion efforts. 

13 SEC. 452. CLIMATE SERVICES. 

14 The Secretary of Commerce, acting through the Ad15 ministrator of the National Oceanic and Atmospheric Ad16 ministration (NOAA), shall establish within NOAA a Na17 tional Climate Service to develop climate information, data, 

18 forecasts, and warnings at national and regional scales, 

19 and to distribute information related to climate impacts to 

20 State, local, and tribal governments and the public to facili21 tate the development and implementation of strategies to 

22 reduce society’s vulnerability to climate variability and 

23 change. 

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1 SEC. 453. STATE PROGRAMS TO BUILD RESILIENCE TO CLI2 MATE CHANGE IMPACTS. 

3 (a) DISTRIBUTION OF ALLOWANCES.— 

4 (1) IN GENERAL.—Not later than September 30, 

5 2012, and annually thereafter through 2050, the Ad6 ministrator shall distribute allowances allocated for 

7 purposes of this subpart pursuant to section 782 of 

8 the Clean Air Act ratably among the State govern9 ments based on the product of— 

10 (A) each State’s population; and 

11 (B) each State’s allocation factor as deter12 mined under paragraph (2). 

13 (2) STATE ALLOCATION FACTORS.— 

14 (A) IN GENERAL.—Except as provided in 

15 subparagraph (B), the allocation factor for a 

16 State shall be the quotient of— 

17 (i) the per capita income of all indi18 viduals in the United States, divided by 

19 (ii) the per capita income of all indi20 viduals in such State. 

21 (B) LIMITATION.—If the allocation factor 

22 for a State as calculated under subparagraph 

23 (A) would exceed 1.2, then the allocation factor 

24 for such State shall be 1.2. If the allocation fac25 tor for a State as calculated under subparagraph 

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1 (A) would be less than 0.8, then the allocation 

2 factor for such State shall be 0.8. 

3 (C) PER CAPITA INCOME.—For purposes of 

4 this paragraph, per capita income shall be— 

5 (i) determined at 2-year intervals; and 

6 (ii) subject to subparagraph (D), equal 

7 to the average of the annual per capita in8 comes for the most recent period of 3 con9 secutive years for which satisfactory data 

10 are available from the Department of Com11 merce at the time such determination is 

12 made. 

13 (D) REVENUE DIRECTLY RESULTING FROM

14 A PRESIDENTIALLY DECLARED MAJOR DIS15 ASTER.—For purposes of this paragraph, per 

16 capita income from one or more of the following 

17 sources shall be reduced or excluded if the Sec18 retary of Commerce (in consultation with the 

19 Administrator and the secretaries or administra20 tors of the departments or agencies involved) de21 termines that the income accrues to persons as 

22 the result of a Major Disaster (as declared by the 

23 President of the United States) and if the Sec24 retary finds that the inclusion of one or more of 

25 these income sources, in whole or in part, results 

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1 in a transitory, rather than a sustainable, in2 crease in a State’s per capita income level rel3 ative to the national average: 

4 (i) Property and casualty insurance 

5 (including homeowners and renters insur6 ance). 

7 (ii) The National Flood Insurance Pro8 gram of the Federal Emergency Manage9 ment Agency . 

10 (iii) The Individual and Family 

11 Grants Program of the Federal Emergency 

12 Management Agency. 

13 (iv) The Disaster Housing Program of 

14 the Federal Emergency Management Agen15 cy. 

16 (v) The Community Development Block 

17 Grant Program of the Department of Hous18 ing and Urban Development. 

19 (vi) The Disaster Unemployment As20 sistance Program of the Department of 

21 Labor. 

22 (vii) Any other source determined ap23 propriate by the Administrator. 

24 (b) SALE OF ALLOWANCES.—Each State receiving 

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1 ances within 1 year of receipt, either directly or through 

2 consignment to the Administrator for auction. States shall 

3 deposit the proceeds of such sales within the State Energy 

4 and Environment Development (SEED) Fund established 

5 pursuant to section 131 of this Act . Emission allowances 

6 distributed under this section that are not sold within 1 

7 year of receipt by a State shall be returned to the Adminis8 trator, who shall distribute such allowances to the remain9 ing States ratably in accordance with the formula in sub10 section (a). 

11 (c) USE OF PROCEEDS.—States shall, in accordance 

12 with a State climate adaptation plan approved pursuant 

13 to subsection (e), use the proceeds of sales of emission allow14 ances distributed under this section exclusively for the im15 plementation of projects, programs, or measures to build re16 silience to the impacts of climate change, including— 

17 (1) extreme weather events such as flooding and 

18 tropical cyclones; 

19 (2) more frequent heavy precipitation events; 

20 (3) water scarcity and adverse impacts on water 

21 quality; 

22 (4) stronger and longer heat waves; 

23 (5) more frequent and severe droughts; 

24 (6) rises in sea level; 

25 (7) ecosystem disruption; 

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1 (8) increased air pollution; and 

2 (9) effects on public health. 

3 (d) PRIORITY IN PROJECTS TO REDUCE FLOOD

4 EVENTS.—When implementing any project, program, or 

5 measure funded under this section and designed to reduce 

6 flood events, a State should consider prioritizing projects 

7 that seek to— 

8 (1) mitigate the destructive impacts of climate9 related increases in the duration, frequency, or mag10 nitude of rainfall or runoff, including snowmelt run11 off, as well as hurricanes; 

12 (2) improve flood protection for densely popu13 lated urban areas; and 

14 (3) mitigate the destructive impact of ocean-re15 lated climate change effects, including effects on bays, 

16 estuaries, populated barrier islands and other ocean17 related features, through a variety of means and 

18 measures, including the construction of jetties, levies, 

19 and other coastal structures in densely populated 

20 coastal areas impacted by climate change. 

21 (e) STATE CLIMATE ADAPTATION PLANS.— 

22 (1) IN GENERAL.—Not later than 2 years after 

23 the date of enactment of this Act, the Administrator, 

24 or such other Federal agency head or heads as the 

25 President may designate, shall promulgate regulations 

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1 establishing requirements for submission and ap2 proval of State climate adaptation plans under this 

3 section. Receipt of emission allowances pursuant to 

4 this section shall be contingent on approval of a State 

5 climate adaptation plan meeting the requirements of 

6 such guidelines. 

7 (2) REQUIREMENTS.—Regulations promulgated 

8 under this subsection shall require, at minimum, 

9 that— 

10 (A) State climate adaptation plans assess 

11 and prioritize the State’s vulnerability to a 

12 broad range of impacts of climate change, based 

13 on the best available science; 

14 (B) State climate adaptation plans include 

15 an assessment of potential for carbon reduction 

16 through changes to land management policies 

17 (including enhancement, or protection, of forest 

18 carbon sinks); 

19 (C) State climate adaptation plans identify 

20 and prioritize specific cost-effective projects, pro21 grams, and measures to build resilience to pre22 dicted impacts of climate change; 

23 (D) State climate adaptation plans ensure 

24 that the State fully considers and undertakes, to 

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1 the maximum extent practicable, initiatives 

2 that— 

3 (i) protect or enhance natural eco4 system functions, including protection, 

5 maintenance, or restoration of natural in6 frastructure such as wetlands, reefs, and 

7 barrier islands to buffer communities from 

8 floodwaters or storms, watershed protection 

9 to maintain water quality and groundwater 

10 recharge, or floodplain restoration to im11 prove natural flood control capacity; or 

12 (ii) use non-structural approaches in13 cluding practices that utilize, enhance, or 

14 mimic the natural hydrologic cycle processes 

15 of infiltration, evapotranspiration, and 

16 reuse; 

17 (E) in order to be eligible to receive emis18 sion allowances under this section, a State shall 

19 submit a revised State climate adaptation plan 

20 for approval not less frequently than every 5 

21 years; and 

22 (F) State climate adaptation plans be con23 sistent with Federal conservation and environ24 mental laws and, to the maximum extent prac25 ticable, avoid environmental degradation. 

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1 (3) COORDINATION WITH PRIOR PLANNING EF2 FORTS.—In promulgating regulations under this sub3 section, the Administrator, or such other Federal 

4 agency head or heads as the President may designate, 

5 shall— 

6 (A) draw upon lessons learned and best 

7 practices from preexisting State climate adapta8 tion planning efforts; 

9 (B) seek to avoid duplication of such efforts; 

10 and 

11 (C) ensure that the plans developed under 

12 this section reflect and are fully consistent with 

13 State natural resources adaptation plans devel14 oped under section 479. 

15 (f) REPORTING.—Each State receiving emission allow16 ances under this section shall submit to the Administrator, 

17 or such other Federal agency head or heads as the President 

18 may designate, within 12 months after each receipt of such 

19 allowances and once every 2 years thereafter until the pro20 ceeds from the sale of emission allowances received under 

21 this section are fully expended, a report that— 

22 (1) provides a full accounting for the State’s use 

23 of proceeds of sales of emission allowances distributed 

24 under this section, including a description of the 

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1 projects, programs, or measures funded through such 

2 proceeds; 

3 (2) includes a report prepared by an inde4 pendent third party, in accordance with such regula5 tions as are promulgated by the Administrator or 

6 such other Federal agency head or heads as the Presi7 dent may designate, evaluating the performance of the 

8 projects, programs, or measures funded under this sec9 tion; and 

10 (3) identifies any use by the State of proceeds of 

11 sales of emission allowances distributed under this 

12 section for the reduction of flood and storm damage 

13 and the effects of climate change on water and flood 

14 protection infrastructure. 

15 (g) ENFORCEMENT.—If the Administrator, or such 

16 other Federal agency head or heads as the President may 

17 designate, determines that a State is not in compliance with 

18 this section, the Administrator may withhold a portion of 

19 the allowances, the value of which is equal to up to twice 

20 the value of the allowances that the State failed to use in 

21 accordance with the requirements of this section, that such 

22 State would otherwise be eligible to receive under this sec23 tion in 1 or more later years. Allowances withheld pursuant 

24 to this subsection shall be distributed among the remaining 

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1 States ratably in accordance with the formula in subsection 

2 (a). 

3 (h) SUPPLEMENT, NOT SUPPLANT.—It is the intent of 

4 the Congress that emission allowances distributed to carry 

5 out this subpart should be used to supplement, and not re6 place, existing sources of funding used to build resilience 

7 to the impacts of climate change identified in subsection 

8 (c). 

9 Subpart B—Public Health and Climate Change 

10 SEC. 461. SENSE OF CONGRESS ON PUBLIC HEALTH AND 

11 CLIMATE CHANGE. 

12 It is the sense of the Congress that the Federal Govern13 ment, in cooperation with international, State, tribal, and 

14 local governments, concerned public and private organiza15 tions, and citizens, should use all practicable means and 

16 measures— 

17 (1) to assist the efforts of public health and 

18 health care professionals, first responders, States, 

19 tribes, municipalities, and local communities to in20 corporate measures to prepare health systems to re21 spond to the impacts of climate change; 

22 (2) to ensure— 

23 (A) that the Nation’s health professionals 

24 have sufficient information to prepare for and 

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1 respond to the adverse health impacts of climate 

2 change; 

3 (B) the utility and value of scientific re4 search in advancing understanding of— 

5 (i) the health impacts of climate 

6 change; and 

7 (ii) strategies to prepare for and re8 spond to the health impacts of climate 

9 change; 

10 (C) the identification of communities vul11 nerable to the health effects of climate change 

12 and the development of strategic response plans 

13 to be carried out by health professionals for those 

14 communities; 

15 (D) the improvement of health status and 

16 health equity through efforts to prepare for and 

17 respond to climate change; and 

18 (E) the inclusion of health policy in the de19 velopment of climate change responses; 

20 (3) to encourage further research, interdiscipli21 nary partnership, and collaboration among stake22 holders in order to— 

23 (A) understand and monitor the health im24 pacts of climate change; and 

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1 (B) improve public health knowledge and 

2 response strategies to climate change; 

3 (4) to enhance preparedness activities, and pub4 lic health infrastructure, relating to climate change 

5 and health; 

6 (5) to encourage each and every American to 

7 learn about the impacts of climate change on health; 

8 and 

9 (6) to assist the efforts of developing nations to 

10 incorporate measures to prepare health systems to re11 spond to the impacts of climate change. 

12 SEC. 462. RELATIONSHIP TO OTHER LAWS. 

13 Nothing in this subpart in any manner limits the au14 thority provided to or responsibility conferred on any Fed15 eral department or agency by any provision of any law (in16 cluding regulations) or authorizes any violation of any pro17 vision of any law (including regulations), including any 

18 health, energy, environmental, transportation, or any other 

19 law or regulation. 

20 SEC. 463. NATIONAL STRATEGIC ACTION PLAN. 

21 (a) REQUIREMENT.— 

22 (1) IN GENERAL.—The Secretary of Health and 

23 Human Services, within 2 years after the date of the 

24 enactment of this Act, on the basis of the best avail25 able science, and in consultation pursuant to paramstockstill on PROD1PC66 with BILLS

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1 graph (2), shall publish a strategic action plan to as2 sist health professionals in preparing for and re3 sponding to the impacts of climate change on public 

4 health in the United States and other nations, par5 ticularly developing nations. 

6 (2) CONSULTATION.—In developing or making 

7 any revision to the national strategic action plan, the 

8 Secretary shall— 

9 (A) consult with the Director of the Centers 

10 for Disease Control and Prevention, the Admin11 istrator of the Environmental Protection Agency, 

12 the Director of the National Institutes of Health, 

13 the Secretary of Energy, other appropriate Fed14 eral agencies, Indian tribes, State and local gov15 ernments, public health organizations, scientists, 

16 and other interested stakeholders; and 

17 (B) provide opportunity for public input. 

18 (b) CONTENTS.— 

19 (1) IN GENERAL.—The Secretary, acting through 

20 the Director of the Centers for Disease Control and 

21 Prevention and other appropriate Federal agencies, 

22 shall assist health professionals in preparing for and 

23 responding effectively and efficiently to the health ef24 fects of climate change through measures including— 

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1 (A) developing, improving, integrating, and 

2 maintaining domestic and international disease 

3 surveillance systems and monitoring capacity to 

4 respond to health-related effects of climate 

5 change, including on topics addressing— 

6 (i) water, food, and vector borne infec7 tious diseases and climate change; 

8 (ii) pulmonary effects, including re9 sponses to aeroallergens; 

10 (iii) cardiovascular effects, including 

11 impacts of temperature extremes; 

12 (iv) air pollution health effects, includ13 ing heightened sensitivity to air pollution; 

14 (v) hazardous algal blooms; 

15 (vi) mental and behavioral health im16 pacts of climate change; 

17 (vii) the health of refugees, displaced 

18 persons, and vulnerable communities; 

19 (viii) the implications for communities 

20 vulnerable to health effects of climate 

21 change, as well as strategies for responding 

22 to climate change within these communities; 

23 and 

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1 (ix) local and community-based health 

2 interventions for climate-related health im3 pacts; 

4 (B) creating tools for predicting and moni5 toring the public health effects of climate change 

6 on the international, national, regional, State, 

7 and local levels, and providing technical support 

8 to assist in their implementation; 

9 (C) developing public health communica10 tions strategies and interventions for extreme 

11 weather events and disaster response situations; 

12 (D) identifying and prioritizing commu13 nities and populations vulnerable to the health 

14 effects of climate change, and determining ac15 tions and communication strategies that should 

16 be taken to inform and protect these communities 

17 and populations from the health effects of climate 

18 change; 

19 (E) developing health communication, pub20 lic education, and outreach programs aimed at 

21 public health and health care professionals, as 

22 well as the general public, to promote prepared23 ness and response strategies relating to climate 

24 change and public health, including the identimstockstill on PROD1PC66 with BILLS

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1 fication of greenhouse gas reduction behaviors 

2 that are health-promoting; and 

3 (F) developing academic and regional cen4 ters of excellence devoted to— 

5 (i) researching relationships between 

6 climate change and health; 

7 (ii) expanding and training the public 

8 health workforce to strengthen the capacity 

9 of such workforce to respond to and prepare 

10 for the health effects of climate change; 

11 (iii) creating and supporting academic 

12 fellowships focusing on the health effects of 

13 climate change; and 

14 (iv) training senior health ministry of15 ficials from developing nations to strengthen 

16 the capacity of such nations to— 

17 (I) prepare for and respond to the 

18 health effects of climate change; and 

19 (II) build an international net20 work of public health professionals 

21 with the necessary climate change 

22 knowledge base; 

23 (G) using techniques, including health im24 pact assessments, to assess various climate 

25 change public health preparedness and response 

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1 strategies on international, national, State, re2 gional, tribal, and local levels, and make rec3 ommendations as to those strategies that best 

4 protect the public health; 

5 (H)(i) assisting in the development, imple6 mentation, and support of State, regional, tribal, 

7 and local preparedness, communication, and re8 sponse plans (including with respect to the 

9 health departments of such entities) to anticipate 

10 and reduce the health threats of climate change; 

11 and 

12 (ii) pursuing collaborative efforts to develop, 

13 integrate, and implement such plans; 

14 (I) creating a program to advance research 

15 as it relates to the effects of climate change on 

16 public health across Federal agencies, including 

17 research to— 

18 (i) identify and assess climate change 

19 health effects preparedness and response 

20 strategies; 

21 (ii) prioritize critical public health in22 frastructure projects related to potential cli23 mate change impacts that affect public 

24 health; and 

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1 (iii) coordinate preparedness for cli2 mate change health impacts, including the 

3 development of modeling and forecasting 

4 tools; 

5 (J) providing technical assistance for the 

6 development, implementation, and support of 

7 preparedness and response plans to anticipate 

8 and reduce the health threats of climate change 

9 in developing nations; and 

10 (K) carrying out other activities determined 

11 appropriate by the Secretary to plan for and re12 spond to the impacts of climate change on public 

13 health. 

14 (c) REVISION.—The Secretary shall revise the national 

15 strategic action plan not later than July 1, 2014, and every 

16 4 years thereafter, to reflect new information collected pur17 suant to implementation of the national strategic action 

18 plan and otherwise, including information on— 

19 (1) the status of critical environmental health 

20 parameters and related human health impacts; 

21 (2) the impacts of climate change on public 

22 health; and 

23 (3) advances in the development of strategies for 

24 preparing for and responding to the impacts of cli25 mate change on public health. 

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1 (d) IMPLEMENTATION.— 

2 (1) IMPLEMENTATION THROUGH HHS.—The Sec3 retary shall exercise the Secretary’s authority under 

4 this subpart and other provisions of Federal law to 

5 achieve the goals and measures of the national stra6 tegic action plan. 

7 (2) OTHER PUBLIC HEALTH PROGRAMS AND INI8 TIATIVES.—The Secretary and Federal officials of 

9 other relevant Federal agencies shall administer pub10 lic health programs and initiatives authorized by pro11 visions of law other than this subpart, subject to the 

12 requirements of such statutes, in a manner designed 

13 to achieve the goals of the national strategic action 

14 plan. 

15 (3) CDC.—In furtherance of the national stra16 tegic action plan, the Secretary, acting through the 

17 Director of the Centers for Disease Control and Pre18 vention and the head of any other appropriate Fed19 eral agency, shall— 

20 (A) conduct scientific research to assist 

21 health professionals in preparing for and re22 sponding to the impacts of climate change on 

23 public health; and 

24 (B) provide funding for— 

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1 (i) research on the health effects of cli2 mate change; and 

3 (ii) preparedness planning on the 

4 international, national, State, regional, and 

5 local levels to respond to or reduce the bur6 den of health effects of climate change; and 

7 (C) carry out other activities determined 

8 appropriate by the Director or the head of such 

9 agency to prepare for and respond to the impacts 

10 of climate change on public health. 

11 SEC. 464. ADVISORY BOARD. 

12 (a) ESTABLISHMENT.—The Secretary shall establish a 

13 permanent science advisory board comprised of not less 

14 than 10 and not more than 20 members. 

15 (b) APPOINTMENT OF MEMBERS.—The Secretary shall 

16 appoint the members of the science advisory board from 

17 among individuals— 

18 (1) who have expertise in public health and 

19 human services, climate change, and other relevant 

20 disciplines; and 

(2) at least 1 21 ⁄2 of whom are recommended by the 

22 President of the National Academy of Sciences. 

23 (c) FUNCTIONS.—The science advisory board shall— 

24 (1) provide scientific and technical advice and 

25 recommendations to the Secretary on the domestic 

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1 and international impacts of climate change on pub2 lic health, populations and regions particularly vul3 nerable to the effects of climate change, and strategies 

4 and mechanisms to prepare for and respond to the 

5 impacts of climate change on public health; and 

6 (2) advise the Secretary regarding the best 

7 science available for purposes of issuing the national 

8 strategic action plan. 

9 SEC. 465. REPORTS. 

10 (a) NEEDS ASSESSMENT.— 

11 (1) IN GENERAL.—The Secretary shall seek to 

12 enter into, by not later than 6 months after the date 

13 of the enactment of this Act, an agreement with the 

14 National Research Council and the Institute of Medi15 cine to complete a report that— 

16 (A) assesses the needs for health profes17 sionals to prepare for and respond to climate 

18 change impacts on public health; and 

19 (B) recommends programs to meet those 

20 needs. 

21 (2) SUBMISSION.—The agreement under para22 graph (1) shall require the completed report to be sub23 mitted to the Congress and the Secretary and made 

24 publicly available not later than 1 year after the date 

25 of the agreement. 

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1 (b) CLIMATE CHANGE HEALTH PROTECTION AND PRO2 MOTION REPORTS.— 

3 (1) IN GENERAL.—The Secretary, in consultation 

4 with the advisory board established under section 464, 

5 shall ensure the issuance of reports to aid health pro6 fessionals in preparing for and responding to the ad7 verse health effects of climate change that— 

8 (A) review scientific developments on health 

9 impacts of climate change; and 

10 (B) recommend changes to the national 

11 strategic action plan. 

12 (2) SUBMISSION.—The Secretary shall submit 

13 the reports required by paragraph (1) to the Congress 

14 and make such reports publicly available not later 

15 than July 1, 2013, and every 4 years thereafter. 

16 SEC. 466. DEFINITIONS. 

17 In this subpart: 

18 (1) HEALTH IMPACT ASSESSMENT.—The term 

19 ‘‘health impact assessment’’ means a combination of 

20 procedures, methods, and tools by which a policy, pro21 gram, or project may be judged as to its potential ef22 fects on the health of a population, and the distribu23 tion of those effects within the population. 

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1 (2) NATIONAL STRATEGIC ACTION PLAN.—The 

2 term ‘‘national strategic action plan’’ means the plan 

3 issued and revised under section 463. 

4 (3) SECRETARY.—Unless otherwise specified, the 

5 term ‘‘Secretary’’ means the Secretary of Health and 

6 Human Services. 

7 SEC. 467. CLIMATE CHANGE HEALTH PROTECTION AND 

8 PROMOTION FUND. 

9 (a) ESTABLISHMENT OF FUND.—There is hereby estab10 lished in the Treasury a separate account that shall be 

11 known as the Climate Change Health Protection and Pro12 motion Fund. 

13 (b) AVAILABILITY OF AMOUNTS.—All amounts depos14 ited into the Climate Change Health Protection and Pro15 motion Fund shall be available to the Secretary to carry 

16 out this subpart subject to further appropriation. 

17 (c) DISTRIBUTION OF FUNDS BY HHS.—In carrying 

18 out this subpart, the Secretary may make funds deposited 

19 in the Climate Change Health Protection and Promotion 

20 Fund available to— 

21 (1) other departments, agencies, and offices of the 

22 Federal Government; 

23 (2) foreign, State, tribal, and local governments; 

24 and 

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1 (3) such other entities as the Secretary deter2 mines appropriate. 

3 (d) SUPPLEMENT, NOT REPLACE.—It is the intent of 

4 Congress that funds made available to carry out this sub5 part should be used to supplement, and not replace, existing 

6 sources of funding for public health. 

7 Subpart C—Natural Resource Adaptation 

8 SEC. 471. PURPOSES. 

9 The purposes of this subpart are to— 

10 (1) establish an integrated Federal program to 

11 protect, restore, and conserve the Nation’s natural re12 sources in response to the threats of climate change 

13 and ocean acidification; and 

14 (2) provide financial support and incentives for 

15 programs, strategies, and activities that protect, re16 store, and conserve the Nation’s natural resources in 

17 response to the threats of climate change and ocean 

18 acidification. 

19 SEC. 472. NATURAL RESOURCES CLIMATE CHANGE ADAPTA20 TION POLICY. 

21 It is the policy of the Federal Government, in coopera22 tion with State and local governments, Indian tribes, and 

23 other interested stakeholders to use all practicable means 

24 and measures to protect, restore, and conserve natural re25 sources to enable them to become more resilient, adapt to, 

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1 and withstand the impacts of climate change and ocean 

2 acidification. 

3 SEC. 473. DEFINITIONS. 

4 In this subpart: 

5 (1) COASTAL STATE.—The term ‘‘coastal State’’ 

6 has the meaning given the term in section 304 of the 

7 Coastal Zone Management Act of 1972 (16 U.S.C. 

8 1453). 

9 (2) CORRIDORS.—The term ‘‘corridors’’ means 

10 areas that provide connectivity, over different time 

11 scales (including seasonal or longer), of habitat or po12 tential habitat and that facilitate the ability of terres13 trial, marine, estuarine, and freshwater fish, wildlife, 

14 or plants to move within a landscape as needed for 

15 migration, gene flow, or dispersal, or in response to 

16 the impacts of climate change and ocean acidification 

17 or other impacts. 

18 (3) ECOLOGICAL PROCESSES.—The term ‘‘eco19 logical processes’’ means biological, chemical, or phys20 ical interaction between the biotic and abiotic compo21 nents of an ecosystem and includes— 

22 (A) nutrient cycling; 

23 (B) pollination; 

24 (C) predator-prey relationships; 

25 (D) soil formation; 

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1 (E) gene flow; 

2 (F) disease epizootiology; 

3 (G) larval dispersal and settlement; 

4 (H) hydrological cycling; 

5 (I) decomposition; and 

6 (J) disturbance regimes such as fire and 

7 flooding. 

8 (4) HABITAT.—The term ‘‘habitat’’ means the 

9 physical, chemical, and biological properties that are 

10 used by fish, wildlife, or plants for growth, reproduc11 tion, survival, food, water, and cover, on a tract of 

12 land, in a body of water, or in an area or region. 

13 (5) INDIAN TRIBE.—The term ‘‘Indian tribe’’ has 

14 the meaning given the term in section 4 of the Indian 

15 Self-Determination and Education Assistance Act (25 

16 U.S.C. 450b). 

17 (6) NATURAL RESOURCES.—The term ‘‘natural 

18 resources’’ means the terrestrial, freshwater, estuarine, 

19 and marine fish, wildlife, plants, land, water, habi20 tats, and ecosystems of the United States. 

21 (7) NATURAL RESOURCES ADAPTATION.—The 

22 term ‘‘natural resources adaptation’’ means the pro23 tection, restoration, and conservation of natural re24 sources to enable them to become more resilient, adapt 

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1 to, and withstand the impacts of climate change and 

2 ocean acidification. 

3 (8) RESILIENCE.—Each of the terms ‘‘resilience’’ 

4 and ‘‘resilient’’ means the ability to resist or recover 

5 from disturbance and preserve diversity, productivity, 

6 and sustainability. 

7 (9) STATE.—The term ‘‘State’’ means— 

8 (A) a State of the United States; 

9 (B) the District of Columbia; and 

10 (C) the Commonwealth of Puerto Rico, 

11 Guam, the United States Virgin Islands, the 

12 Northern Mariana Islands, and American 

13 Samoa. 

14 SEC. 474. COUNCIL ON ENVIRONMENTAL QUALITY. 

15 The Chair of the Council on Environmental Quality 

16 shall— 

17 (1) advise the President on implementation and 

18 development of— 

19 (A) a Natural Resources Climate Change 

20 Adaptation Strategy required under section 476; 

21 and 

22 (B) Federal natural resource agency adap23 tation plans required under section 478; 

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1 (2) serve as the Chair of the Natural Resources 

2 Climate Change Adaptation Panel established under 

3 section 475; and 

4 (3) coordinate Federal agency strategies, plans, 

5 programs, and activities related to protecting, restor6 ing, and maintaining natural resources to become 

7 more resilient, adapt to, and withstand the impacts 

8 of climate change and ocean acidification. 

9 SEC. 475. NATURAL RESOURCES CLIMATE CHANGE ADAPTA10 TION PANEL. 

11 (a) ESTABLISHMENT.—Not later than 90 days after 

12 the date of the enactment of this subpart, the President shall 

13 establish a Natural Resources Climate Change Adaptation 

14 Panel, consisting of— 

15 (1) the head, or their designee, of each of— 

16 (A) the National Oceanic and Atmospheric 

17 Administration; 

18 (B) the Forest Service; 

19 (C) the National Park Service; 

20 (D) the United States Fish and Wildlife 

21 Service; 

22 (E) the Bureau of Land Management; 

23 (F) the United States Geological Survey; 

24 (G) the Bureau of Reclamation; 

25 (H) the Bureau of Indian Affairs; 

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1 (I) the Environmental Protection Agency; 

2 and 

3 (J) the Army Corps of Engineers; 

4 (2) the Chair of the Council on Environmental 

5 Quality; and 

6 (3) the heads of such other Federal agencies or 

7 departments with jurisdiction over natural resources 

8 of the United States, as determined by the President. 

9 (b) FUNCTIONS.—The Panel shall serve as a forum for 

10 interagency consultation on and the coordination of the de11 velopment and implementation of a national Natural Re12 sources Climate Change Adaptation Strategy required 

13 under section 476. 

14 (c) CHAIR.—The Chair of the Council on Environ15 mental Quality shall serve as the Chair of the Panel. 

16 SEC. 476. NATURAL RESOURCES CLIMATE CHANGE ADAPTA17 TION STRATEGY. 

18 (a) IN GENERAL.—Not later than one year after the 

19 date of the enactment of this subpart, the President, through 

20 the Natural Resources Climate Change Adaptation Panel 

21 established under section 475, shall develop a Natural Re22 sources Climate Change Adaptation Strategy to protect, re23 store, and conserve natural resources to enable them to be24 come more resilient, adapt to, and withstand the impacts 

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1 of climate change and ocean acidification and to identify 

2 opportunities to mitigate those impacts. 

3 (b) DEVELOPMENT AND REVISION.—In developing and 

4 revising the Strategy, the Panel shall— 

5 (1) base the strategy on the best available science; 

6 (2) develop the strategy in close cooperation with 

7 States and Indian tribes; 

8 (3) coordinate with other Federal agencies as ap9 propriate; 

10 (4) consult with local governments, conservation 

11 organizations, scientists, and other interested stake12 holders; 

13 (5) provide public notice and opportunity for 

14 comment; and 

15 (6) review and revise the Strategy every 5 years 

16 to incorporate new information regarding the impacts 

17 of climate change and ocean acidification on natural 

18 resources and advances in the development of strate19 gies for becoming more resilient and adapting to those 

20 impacts. 

21 (c) CONTENTS.—The National Resources Adaptation 

22 Strategy shall include— 

23 (1) an assessment of the vulnerability of natural 

24 resources to climate change and ocean acidification, 

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1 including the short-term, medium-term, long-term, cu2 mulative, and synergistic impacts; 

3 (2) a description of current research, observation, 

4 and monitoring activities at the Federal, State, trib5 al, and local level related to the impacts of climate 

6 change and ocean acidification on natural resources, 

7 as well as identification of research and data needs 

8 and priorities; 

9 (3) identification of natural resources that are 

10 likely to have the greatest need for protection, restora11 tion, and conservation because of the adverse effects of 

12 climate change and ocean acidification; 

13 (4) specific protocols for integrating climate 

14 change and ocean acidification adaptation strategies 

15 and activities into the conservation and management 

16 of natural resources by Federal departments and 

17 agencies to ensure consistency across agency jurisdic18 tions and resources; 

19 (5) specific actions that Federal departments 

20 and agencies shall take to protect, conserve, and re21 store natural resources to become more resilient, 

22 adapt to, and withstand the impacts of climate 

23 change and ocean acidification, including a timeline 

24 to implement those actions; 

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1 (6) specific mechanisms for ensuring commu2 nication and coordination among Federal depart3 ments and agencies, and between Federal departments 

4 and agencies and State natural resource agencies, 

5 United States territories, Indian tribes, private land6 owners, conservation organizations, and other nations 

7 that share jurisdiction over natural resources with the 

8 United States; 

9 (7) specific actions to develop and implement 

10 consistent natural resources inventory and moni11 toring protocols through interagency coordination and 

12 collaboration; and 

13 (8) a process for guiding the development of de14 tailed agency- and department-specific adaptation 

15 plans required under section 478 to address the im16 pacts of climate change and ocean acidification on the 

17 natural resources in the jurisdiction of each agency. 

18 (d) IMPLEMENTATION.—Consistent with its authorities 

19 under other laws and with Federal trust responsibilities 

20 with respect to Indian lands, each Federal department or 

21 agency with representation on the National Resources Cli22 mate Change Adaptation Panel shall consider the impacts 

23 of climate change and ocean acidification and integrate the 

24 elements of the strategy into agency plans, environmental 

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1 reviews, programs, and activities related to the conserva2 tion, restoration, and management of natural resources. 

3 SEC. 477. NATURAL RESOURCES ADAPTATION SCIENCE AND 

4 INFORMATION. 

5 (a) COORDINATION.—Not later than 90 days after the 

6 date of the enactment of this subpart, the Secretary of Com7 merce, acting through the Administrator of the National 

8 Oceanic and Atmospheric Administration, and the Sec9 retary of the Interior, acting through the Director of the 

10 United States Geological Survey, shall establish a coordi11 nated process for developing and providing science and in12 formation needed to assess and address the impacts of cli13 mate change and ocean acidification on natural resources. 

14 The process shall be led by the National Climate Change 

15 and Wildlife Science Center established within the United 

16 States Geological Survey under subsection (d) and the Na17 tional Climate Service of the National Oceanic and Atmos18 pheric Administration. 

19 (b) FUNCTIONS.—The Secretaries shall ensure that 

20 such process avoids duplication and that the National Oce21 anic and Atmospheric Administration and the United 

22 States Geological Survey shall— 

23 (1) provide technical assistance to Federal de24 partments and agencies, State and local governments, 

25 Indian tribes, and interested private landowners in 

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1 their efforts to assess and address the impacts of cli2 mate change and ocean acidification on natural re3 sources; 

4 (2) conduct and sponsor research and provide 

5 Federal departments and agencies, State and local 

6 governments, Indian tribes, and interested private 

7 landowners with research products, decision and mon8 itoring tools and information, to develop strategies for 

9 assisting natural resources to become more resilient, 

10 adapt to, and withstand the impacts of climate 

11 change and ocean acidification; and 

12 (3) assist Federal departments and agencies in 

13 the development of the adaptation plans required 

14 under section 478. 

15 (c) SURVEY.—Not later than one year after the date 

16 of enactment of this subpart and every 5 years thereafter, 

17 the Secretary of Commerce and the Secretary of the Interior 

18 shall undertake a climate change and ocean acidification 

19 impact survey that— 

20 (1) identifies natural resources considered likely 

21 to be adversely affected by climate change and ocean 

22 acidification; 

23 (2) includes baseline monitoring and ongoing 

24 trend analysis; 

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1 (3) uses a stakeholder process to identify and 

2 prioritize needed monitoring and research that is of 

3 greatest relevance to the ongoing needs of natural re4 source managers to address the impacts of climate 

5 change and ocean acidification; and 

6 (4) identifies decision tools necessary to develop 

7 strategies for assisting natural resources to become 

8 more resilient and adapt to and withstand the im9 pacts of climate change and ocean acidification. 

10 (d) NATIONAL CLIMATE CHANGE AND WILDLIFE

11 SCIENCE CENTER.— 

12 (1) ESTABLISHMENT.—The Secretary of the Inte13 rior shall establish the National Climate Change and 

14 Wildlife Science Center within the United States Geo15 logical Survey. 

16 (2) FUNCTIONS.—The Center shall, in collabora17 tion with Federal and State natural resources agen18 cies and departments, Indian tribes, universities, and 

19 other partner organizations— 

20 (A) assess and synthesize current physical 

21 and biological knowledge and prioritize scientific 

22 gaps in such knowledge in order to forecast the 

23 ecological impacts of climate change on fish and 

24 wildlife at the ecosystem, habitat, community, 

25 population, and species levels; 

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1 (B) develop and improve tools to identify, 

2 evaluate, and, where appropriate, link scientific 

3 approaches and models for forecasting the im4 pacts of climate change and adaptation on fish, 

5 wildlife, plants, and their habitats, including 

6 monitoring, predictive models, vulnerability 

7 analyses, risk assessments, and decision support 

8 systems to help managers make informed deci9 sions; 

10 (C) develop and evaluate tools to adaptively 

11 manage and monitor the effects of climate change 

12 on fish and wildlife at national, regional, and 

13 local scales; and 

14 (D) develop capacities for sharing standard15 ized data and the synthesis of such data. 

16 (e) SCIENCE ADVISORY BOARD.— 

17 (1) ESTABLISHMENT.—Not later than 180 days 

18 after the date of enactment of this subpart, the Sec19 retary of Commerce and the Secretary of the Interior 

20 shall establish and appoint the members of a Science 

21 Advisory Board, to be comprised of not fewer than 10 

22 and not more than 20 members— 

23 (A) who have expertise in fish, wildlife, 

24 plant, aquatic, and coastal and marine biology, 

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1 ecology, climate change, ocean acidification, and 

2 other relevant scientific disciplines; 

3 (B) who represent a balanced membership 

4 among Federal, State, Indian tribes, and local 

5 representatives, universities, and conservation 

6 organizations; and 

(C) at least 1 7 ⁄2 of whom are recommended 

8 by the President of the National Academy of 

9 Sciences. 

10 (2) DUTIES.—The Science Advisory Board 

11 shall— 

12 (A) advise the Secretaries on the state-of13 the-science regarding the impacts of climate 

14 change and ocean acidification on natural re15 sources and scientific strategies and mechanisms 

16 for protecting, restoring, and conserving natural 

17 resources to enable them to become more resilient, 

18 adapt to, and withstand the impacts of climate 

19 change and ocean acidification; and 

20 (B) identify and recommend priorities for 

21 ongoing research needs on such issues. 

22 (3) COLLABORATION.—The Science Advisory 

23 Board shall collaborate with other climate change and 

24 ecosystem research entities in other Federal agencies 

25 and departments. 

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1 (4) AVAILABILITY TO THE PUBLIC.—The advice 

2 and recommendations of the Science Advisory Board 

3 shall be made available to the public. 

4 SEC. 478. FEDERAL NATURAL RESOURCE AGENCY ADAPTA5 TION PLANS. 

6 (a) DEVELOPMENT.—Not later than 1 year after the 

7 date of the development of a Natural Resources Climate 

8 Change Adaptation Strategy under section 476, each de9 partment or agency that has a representative on the Nat10 ural Resources Climate Change Adaptation Panel estab11 lished under section 475 shall— 

12 (1) complete an adaptation plan for that depart13 ment or agency, respectively, implementing the Nat14 ural Resources Climate Change Adaptation Strategy 

15 under section 476 and consistent with the Natural 

16 Resources Climate Change Adaptation Policy under 

17 section 472, detailing the department’s or agency’s 

18 current and projected efforts to address the potential 

19 impacts of climate change and ocean acidification on 

20 natural resources within the department’s or agency’s 

21 jurisdiction and necessary additional actions, includ22 ing a timeline for implementation of those actions; 

23 (2) provide opportunities for review and com24 ment on that adaptation plan by the public, includmstockstill on PROD1PC66 with BILLS

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1 ing in the case of a plan by the Bureau of Indian Af2 fairs, review by Indian tribes; and 

3 (3) submit such plan to the President for ap4 proval. 

5 (b) REVIEW BY PRESIDENT AND SUBMISSION TO CON6 GRESS.— 

7 (1) REVIEW BY PRESIDENT.—The President 

8 shall— 

9 (A) approve an adaptation plan submitted 

10 under subsection (a)(3) if the plan meets the re11 quirements of subsection (c) and is consistent 

12 with the strategy developed under section 476; 

13 (B) decide whether to approve the plan 

14 within 60 days after submission; and 

15 (C) if the President disapproves a plan, di16 rect the department or agency to submit a re17 vised plan to the President under subsection 

18 (a)(3) within 60 days after such disapproval. 

19 (2) SUBMISSION TO CONGRESS.—Not later than 

20 30 days after the date of approval of such adaptation 

21 plan by the President, the department or agency shall 

22 submit the approved plan to the Committee on Nat23 ural Resources of the House of Representatives, the 

24 Committee on Energy and Natural Resources of the 

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1 atives and the Senate with principal jurisdiction over 

2 the department or agency. 

3 (c) REQUIREMENTS.—Each adaptation plan shall— 

4 (1) establish programs for assessing the current 

5 and future impacts of climate change and ocean 

6 acidification on natural resources within the depart7 ment’s or agency’s, respectively, jurisdiction, includ8 ing cumulative and synergistic effects, and for identi9 fying and monitoring those natural resources that are 

10 likely to be adversely affected and that have need for 

11 conservation; 

12 (2) identify and prioritize the department’s or 

13 agency’s strategies and specific conservation actions 

14 to address the current and future impacts of climate 

15 change and ocean acidification on natural resources 

16 within the scope of the department’s or agency’s juris17 diction and to develop and implement strategies to 

18 protect, restore, and conserve such resources to become 

19 more resilient, adapt to, and better withstand those 

20 impacts, including— 

21 (A) the protection, restoration, and con22 servation of terrestrial, marine, estuarine, and 

23 freshwater habitats and ecosystems; 

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1 (B) the establishment of terrestrial, marine, 

2 estuarine, and freshwater habitat linkages and 

3 corridors; 

4 (C) the restoration and conservation of eco5 logical processes; 

6 (D) the protection of a broad diversity of 

7 native species of fish, wildlife, and plant popu8 lations across their range; and 

9 (E) the protection of fish, wildlife, and 

10 plant health, recognizing that climate can alter 

11 the distribution and ecology of parasites, patho12 gens, and vectors; 

13 (3) describe how the department or agency will 

14 integrate such strategies and conservation activities 

15 into plans, programs, activities, and actions of the de16 partment or agency, related to the conservation and 

17 management of natural resources and establish new 

18 plans, programs, activities, and actions as necessary; 

19 (4) establish methods for assessing the effective20 ness of strategies and conservation actions taken to 

21 protect, restore, and conserve natural resources to en22 able them to become more resilient, adapt to, and 

23 withstand the impacts of climate change and ocean 

24 acidification, and for updating those strategies and 

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1 actions to respond to new information and changing 

2 conditions; 

3 (5) include a description of current and proposed 

4 mechanisms to enhance cooperation and coordination 

5 of natural resources adaptation efforts with other 

6 Federal agencies, State and local governments, Indian 

7 tribes, and nongovernmental stakeholders; 

8 (6) include specific written guidance to resource 

9 managers to— 

10 (A) explain how managers are expected to 

11 address the effects of climate change and ocean 

12 acidification; 

13 (B) identify how managers are to obtain 

14 any site-specific information that may be nec15 essary; and 

16 (C) reflect best practices shared among rel17 evant agencies, while also recognizing the unique 

18 missions, objectives, and responsibilities of each 

19 agency; and 

20 (7) identify and assess data and information 

21 gaps necessary to develop natural resources adapta22 tion plans and strategies. 

23 (d) IMPLEMENTATION.— 

24 (1) IN GENERAL.—Upon approval by the Presi25 dent, each department or agency that serves on the 

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1 Natural Resources Climate Change Adaptation Panel 

2 shall implement its adaptation plan through existing 

3 and new plans, policies, programs, activities, and ac4 tions to the extent not inconsistent with existing au5 thority. 

6 (2) CONSIDERATION OF IMPACTS.— 

7 (A) IN GENERAL.—To the maximum extent 

8 practicable and consistent with applicable law, 

9 every natural resource management decision 

10 made by the department or agency shall consider 

11 the impacts of climate change and ocean acidifi12 cation on those natural resources. 

13 (B) GUIDANCE.—The Council on Environ14 mental Quality shall issue guidance for Federal 

15 departments and agencies for considering those 

16 impacts. 

17 (e) REVISION AND REVIEW.—Not less than every 5 

18 years, each adaptation plan under this section shall be re19 viewed and revised to incorporate the best available science 

20 and other information regarding the impacts of climate 

21 change and ocean acidification on natural resources. 

22 SEC. 479. STATE NATURAL RESOURCES ADAPTATION 

23 PLANS. 

24 (a) REQUIREMENT.—In order to be eligible for funds 

25 under section 480, not later than 1 year after the developmstockstill on PROD1PC66 with BILLS

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1 ment of a Natural Resources Climate Change Adaptation 

2 Strategy required under section 476 each State shall pre3 pare a State natural resources adaptation plan detailing 

4 the State’s current and projected efforts to address the po5 tential impacts of climate change and ocean acidification 

6 on natural resources and coastal areas within the State’s 

7 jurisdiction. 

8 (b) REVIEW OR APPROVAL.— 

9 (1) IN GENERAL.—Each State adaptation plan 

10 shall be reviewed and approved or disapproved by the 

11 Secretary of the Interior and, as applicable, the Sec12 retary of Commerce. Such approval shall be granted 

13 if the plan meets the requirements of subsection (c) 

14 and is consistent with the Natural Resources Climate 

15 Change Adaptation Strategy required under section 

16 476. 

17 (2) APPROVAL OR DISAPPROVAL.—Within 180 

18 days after transmittal of such a plan, or a revision 

19 to such a plan, the Secretary of the Interior and, as 

20 applicable, the Secretary of Commerce shall approve 

21 or disapprove the plan by written notice. 

22 (3) RESUBMITTAL.—Within 90 days after trans23 mittal of a resubmitted adaptation plan as a result 

24 of disapproval under paragraph (3), the Secretary of 

25 the Interior and, as applicable, the Secretary of Commstockstill on PROD1PC66 with BILLS

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1 merce, shall approve or disapprove the plan by writ2 ten notice. 

3 (c) CONTENTS.—A State natural resources adaptation 

4 plan shall— 

5 (1) include a strategy for addressing the impacts 

6 of climate change and ocean acidification on terres7 trial, marine, estuarine, and freshwater fish, wildlife, 

8 plants, habitats, ecosystems, wildlife health, and eco9 logical processes, that— 

10 (A) describes the impacts of climate change 

11 and ocean acidification on the diversity and 

12 health of the fish, wildlife and plant populations, 

13 habitats, ecosystems, and associated ecological 

14 processes; 

15 (B) establishes programs for monitoring the 

16 impacts of climate change and ocean acidifica17 tion on fish, wildlife, and plant populations, 

18 habitats, ecosystems, and associated ecological 

19 processes; 

20 (C) describes and prioritizes proposed con21 servation actions to assist fish, wildlife, plant 

22 populations, habitats, ecosystems, and associated 

23 ecological processes in becoming more resilient, 

24 adapting to, and better withstanding those im25 pacts; 

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1 (D) includes strategies, specific conservation 

2 actions, and a time frame for implementing con3 servation actions for fish, wildlife, and plant 

4 populations, habitats, ecosystems, and associated 

5 ecological processes; 

6 (E) establishes methods for assessing the ef7 fectiveness of strategies and conservation actions 

8 taken to assist fish, wildlife, and plant popu9 lations, habitats, ecosystems, and associated eco10 logical processes in becoming more resilient, 

11 adapt to, and better withstand the impacts of cli12 mate changes and ocean acidification and for 

13 updating those strategies and actions to respond 

14 appropriately to new information or changing 

15 conditions; 

16 (F) is incorporated into a revision of the 

17 State wildlife action plan (also known as the 

18 State comprehensive wildlife strategy)— 

19 (i) that has been submitted to the 

20 United States Fish and Wildlife Service; 

21 and 

22 (ii) that has been approved by the 

23 Service or on which a decision on approval 

24 is pending; and 

25 (G) is developed— 

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1 (i) with the participation of the State 

2 fish and wildlife agency, the State coastal 

3 agency, the State agency responsible for ad4 ministration of Land and Water Conserva5 tion Fund grants, the State Forest Legacy 

6 program coordinator, and other State agen7 cies considered appropriate by the Governor 

8 of such State; and 

9 (ii) in coordination with the Secretary 

10 of the Interior, and where applicable, the 

11 Secretary of Commerce and other States 

12 that share jurisdiction over natural re13 sources with the State; and 

14 (2) include, in the case of a coastal State, a 

15 strategy for addressing the impacts of climate change 

16 and ocean acidification on the coastal zone that— 

17 (A) identifies natural resources that are 

18 likely to be impacted by climate change and 

19 ocean acidification and describes those impacts; 

20 (B) identifies and prioritizes continuing re21 search and data collection needed to address 

22 those impacts including— 

23 (i) acquisition of high resolution coast24 al elevation and nearshore bathymetry 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 processes; 

8 (iv) habitat loss, including projected 

9 losses of coastal wetlands and potentials for 

10 inland migration of natural shoreline habi11 tats; 

12 (v) ocean and coastal species and eco13 system migrations, and changes in species 

14 population dynamics; 

15 (vi) changes in storm frequency, inten16 sity, or rainfall patterns; 

17 (vii) saltwater intrusion into coastal 

18 rivers and aquifers; 

19 (viii) changes in chemical or physical 

20 characteristics of marine and estuarine sys21 tems; 

22 (ix) increased harmful algal blooms; 

23 and 

24 (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 re4 silient, 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 of 

11 habitat buffer zones, migration corridors, 

12 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 and 

17 ocean acidification on the ocean and coastal zone 

18 and to assess and adjust, when necessary, such 

19 adaptive management strategies; 

20 (E) establishes performance measures for as21 sessing the effectiveness of adaptation strategies 

22 intended to improve resilience and the ability of 

23 natural resources in the coastal zone to adapt to 

24 and withstand the impacts of climate change 

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1 egies intended to minimize those impacts on the 

2 coastal zone and to update those strategies to re3 spond to new information or changing condi4 tions; 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 Sec8 retary of Commerce and other appropriate Fed9 eral 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 information 

15 contained in, and coordinate with and integrate the goals 

16 and measures identified in, as appropriate, other natural 

17 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 under 

3 the Magnuson-Stevens Fishery Conservation and 

4 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 en7 dangered species under section 4(f) of the Endangered 

8 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 im12 periled 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 comprehen17 sively implement adaptation activities to remediate 

18 the effects of climate change and ocean acidification 

19 on terrestrial, marine, and freshwater fish, wildlife, 

20 plants, and other natural resources. 

21 (f) UPDATING.—Each State plan shall be updated not 

22 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 that 

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1 are consistent with a State natural resources adapta2 tion plan that has been approved by the Secretaries 

3 of Interior and Commerce. 

4 (2) FUNDING PRIOR TO THE APPROVAL OF A

5 STATE PLAN.—Until the earlier of the date that is 3 

6 years after the date of the enactment of this subpart 

7 or the date on which a State receives approval for the 

8 State strategy, a State shall be eligible to receive 

9 funding under section 480 for adaptation activities 

10 that are— 

11 (A) consistent with the comprehensive wild12 life strategy of the State and, where appropriate, 

13 other natural resources conservation strategies; 

14 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 any 

19 coastal State subject to the condition that 

20 coordination with the Secretary of Com21 merce shall be required only for those por22 tions of the strategy relating to activities af23 fecting the coastal zone. 

24 (3) PENDING APPROVAL.—During the period for 

25 which approval by the applicable Secretary of a State 

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1 plan is pending, the State may continue receiving 

2 funds under section 480 pursuant to the workplan de3 scribed in paragraph (2)(B). 

4 SEC. 480. NATURAL RESOURCES CLIMATE CHANGE ADAPTA5 TION 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 wild13 life agencies in accordance with the apportionment 

14 formula established under the second subsection (c) of 

15 section 4 of the Pittman-Robertson Wildlife Restora16 tion Act (16 U.S.C. 669c), as added by section 902(e) 

17 of H.R. 5548 as introduced in the 106th Congress and 

18 enacted into law by section 1(a)(2) of Public Law 

19 106–553 (114 Stat. 2762A–119); and 

20 (2) 15.6 percent shall be available to State coast21 al agencies pursuant to the formula established by the 

22 Secretary of Commerce under section 306(c) of the 

23 Coastal Management Act of 1972 (16 U.S.C. 1455(c)). 

24 (b) ESTABLISHMENT OF FUND.— 

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1 (1) ESTABLISHMENT.—There is hereby estab2 lished in the Treasury a separate account that shall 

3 be known as the Natural Resources Climate Change 

4 Adaptation Fund. 

5 (2) AUTHORIZATION OF APPROPRIATIONS.— 

6 There are authorized to be appropriated for section 

7 480(c) such sums as are deposited in the Natural Re8 sources Climate Change Fund, and the amounts ap9 propriated for section 480(c) shall be no less than the 

10 total estimated annual deposits in the Natural Re11 sources Climate Change Adaptation Fund. Such ap12 propriations shall be offset by the amounts deposited 

13 in such fund pursuant to section 782(m). 

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 Sec19 retary of the Interior for natural resources adap20 tation activities carried out under cooperative 

21 grant programs, including— 

22 (i) the cooperative endangered species 

23 conservation fund authorized under section 

24 6 of the Endangered Species Act of 1973 (16 

25 U.S.C. 1535); 

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1 (ii) programs under the North Amer2 ican Wetlands Conservation Act (16 U.S.C. 

3 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 United 

9 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 Sec23 retary of the Interior to provide financial assist24 ance to Indian tribes to carry out natural re25 sources adaptation activities through the Tribal 

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1 Wildlife Grants Program of the United States 

2 Fish and Wildlife Service. 

3 (2) LAND AND WATER CONSERVATION FUND.— 

4 (A) DEPOSITS.— 

5 (i) IN GENERAL.—Of the amounts 

6 made available for each fiscal year to carry 

7 out this subpart, 19.5 percent shall be de8 posited into the Land and Water Conserva9 tion Fund established under section 2 of the 

10 Land and Water Conservation Fund Act of 

11 1965 (16 U.S.C. 460l–5). 

12 (ii) USE OF DEPOSITS.— (I) Deposits 

13 into the Land and Water Conservation 

14 Fund under this paragraph shall be supple15 mental to authorizations provided under 

16 section 3 of the Land and Water Conserva17 tion Fund Act of 1965 (16 U.S.C. 460l–6), 

18 which shall remain available for non19 adaptation needs. 

20 (II) There are authorized to be appro21 priated for activities in this subpart such 

22 sums as are deposited in the Land and 

23 Water Conservation Fund pursuant to sec24 tion 480(c)(3)(A)(ii), and the amounts ap25 propriated for this paragraph shall be no 

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1 less than the total estimated annual deposits 

2 in the Land and Water Conservation Fund. 

3 Such appropriations shall be offset by the 

4 amounts deposited in such Fund pursuant 

5 to section 782(m). 

6 (B) ALLOCATIONS.—Of the amounts depos7 ited 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 Con15 servation 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 Con8 servation 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 For17 estry Assistance Act of 1978 (16 U.S.C. 

18 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 Con24 servation 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 that 

15 are harmful to fish and wildlife and people; 

16 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 of 

24 Agriculture for use in funding natural resources ad25 aptation activities carried out on national forests and 

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1 national grasslands under the jurisdiction of the For2 est Service. 

3 (4) DEPARTMENT OF COMMERCE.—Of the 

4 amounts made available for each fiscal year to carry 

5 out this subpart, 11.5 percent shall be allocated to the 

6 Secretary of Commerce for use in funding natural re7 sources adaptation activities to protect, maintain, 

8 and restore coastal, estuarine, and marine resources, 

9 habitats, and ecosystems, including such activities 

10 carried out under— 

11 (A) the coastal and estuarine land conserva12 tion program; 

13 (B) the community-based restoration pro14 gram; 

15 (C) the Coastal Zone Management Act of 

16 1972 (16 U.S.C. 1451 et seq.), that are specifi17 cally designed to strengthen the ability of coastal, 

18 estuarine, and marine resources, habitats, and 

19 ecosystems to adapt to and withstand the im20 pacts of climate change and ocean acidification; 

21 (D) the Open Rivers Initiative; 

22 (E) the Magnuson-Stevens Fishery Con23 servation and Management Act (16 U.S.C. 1801 

24 et seq.); 

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1 (F) the Marine Mammal Protection Act of 

2 1972 (16 U.S.C. 1361 et seq.); 

3 (G) the Endangered Species Act of 1973 (16 

4 U.S.C. 1531 et seq.); 

5 (H) the Marine Protection, Research, and 

6 Sanctuaries Act of 1972 (33 U.S.C. 1401 et seq.); 

7 (I) the Coral Reef Conservation Act of 2000 

8 (16 U.S.C. 6401 et seq.); and 

9 (J) the Estuary Restoration Act of 2000 (33 

10 U.S.C. 2901 et seq.). 

11 (5) ENVIRONMENTAL PROTECTION AGENCY.—Of 

12 the amounts made available each fiscal year to carry 

13 out this section, 12.2 percent shall be allocated to the 

14 Administrator for use in natural resources adaptation 

15 activities restoring and protecting— 

16 (A) large-scale freshwater aquatic eco17 systems, such as the Everglades, the Great Lakes, 

18 Flathead Lake, the Missouri River, the Mis19 sissippi River, the Colorado River, the Sac20 ramento-San Joaquin Rivers, the Ohio River, 

21 the Columbia-Snake River System, the Apalachi22 cola, Chattahoochee, and Flint River System, the 

23 Connecticut River, and the Yellowstone River; 

24 (B) large-scale estuarine ecosystems, such as 

25 Chesapeake Bay, Long Island Sound, Puget 

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1 Sound, the Mississippi River Delta, the San 

2 Francisco Bay Delta, Narragansett Bay, and Al3 bemarle-Pamlico Sound; and 

4 (C) freshwater and estuarine ecosystems, 

5 watersheds, and basins identified as priorities by 

6 the Administrator, working in cooperation with 

7 other Federal agencies, States, Indian tribes, 

8 local governments, scientists, and other conserva9 tion partners. 

10 (6) CORPS OF ENGINEERS.—Of the amounts 

11 made available each fiscal year to carry out this sec12 tion, 8.1 percent shall be available to the Secretary of 

13 the Army for use by the Corps of Engineers to carry 

14 out natural resources adaptation activities restor15 ing— 

16 (A) large-scale freshwater aquatic eco17 systems, such as the ecosystems described in 

18 paragraph (5)(A); 

19 (B) large-scale estuarine ecosystems, such as 

20 the ecosystems described in paragraph (5)(B); 

21 (C) freshwater and estuarine ecosystems, 

22 watersheds, and basins identified as priorities by 

23 the Corps of Engineers, working in cooperation 

24 with other Federal agencies, States, Indian 

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1 tribes, local governments, scientists, and other 

2 conservation partners; and 

3 (D) habitats and ecosystems through the im4 plementation of estuary habitat restoration 

5 projects authorized by the Estuary Restoration 

6 Act of 2000 (33 U.S.C. 2901 et seq.), project 

7 modifications for improvement of the environ8 ment, aquatic restoration and protection projects 

9 authorized by section 206 of the Water Resources 

10 Development Act of 1996 (33 U.S.C. 2330), and 

11 other appropriate programs and activities. 

12 (d) USE OF FUNDS BY FEDERAL DEPARTMENTS AND

13 AGENCIES.—Funds allocated to Federal departments and 

14 agencies under this section shall only be used for natural 

15 resources adaptation activities that are consistent with an 

16 adaptation plan developed and approved by the President 

17 under section 478. 

18 (e) STATE COST SHARING.—Notwithstanding any 

19 other provision of law, a State that receives a grant with 

20 amounts allocated under this section shall use funds from 

21 non-Federal sources to pay 10 percent of the costs of each 

22 activity carried out using amounts provided under the 

23 grant. 

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1 SEC. 481. NATIONAL WILDLIFE HABITAT AND CORRIDORS 

2 INFORMATION PROGRAM. 

3 (a) ESTABLISHMENT.—Within 6 months of the date of 

4 enactment of this subpart, the Secretary of the Interior, in 

5 cooperation with the States and Indian tribes, shall estab6 lish a National Fish and Wildlife Habitat and Corridors 

7 Information Program in accordance with the requirements 

8 of this section. 

9 (b) PURPOSE.—The purpose of this program is to— 

10 (1) support States and Indian tribes in the de11 velopment of a geographic information system data12 base of fish and wildlife habitat and corridors that 

13 would inform planning and development decisions 

14 within each State, enable each State to model climate 

15 impacts and adaptation, and provide geographically 

16 specific enhancements of State wildlife action plans; 

17 (2) ensure the collaborative development, with 

18 the States and Indian tribes, of a comprehensive, na19 tional geographic information system database of 

20 maps, models, data, surveys, informational products, 

21 and other geospatial information regarding fish and 

22 wildlife habitat and corridors, that— 

23 (A) is based on consistent protocols for sam24 pling and mapping across landscapes that take 

25 into account regional differences; and 

26 (B) that utilizes— 

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1 (i) existing and planned State- and 

2 tribal-based geographic information system 

3 databases; and 

4 (ii) existing databases, analytical tools, 

5 metadata activities, and other information 

6 products available through the National Bi7 ological Information Infrastructure main8 tained by the Secretary and nongovern9 mental organizations; and 

10 (3) facilitate the use of such databases by Fed11 eral, State, local, and tribal decisionmakers to incor12 porate qualitative information on fish and wildlife 

13 habitat and corridors at the earliest possible stage 

14 to— 

15 (A) prioritize and target natural resources 

16 adaptation strategies and activities; 

17 (B) avoid, minimize, and mitigate the im18 pacts on fish and wildlife habitat and corridors 

19 in siting energy development, water, trans20 mission, transportation, and other land use 

21 projects; 

22 (C) assess the impacts of existing develop23 ment on habitats and corridors; and 

24 (D) develop management strategies to en25 hance the ability of fish, wildlife, and plant spemstockstill on PROD1PC66 with BILLS

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1 cies to migrate or respond to shifting habitats 

2 within existing habitats and corridors. 

3 (c) HABITAT AND CORRIDORS INFORMATION SYS4 TEM.— 

5 (1) IN GENERAL.—The Secretary, in cooperation 

6 with the States and Indian tribes, shall develop a 

7 Habitat and Corridors Information System. 

8 (2) CONTENTS.—The System shall— 

9 (A) include maps, data, and descriptions of 

10 fish and wildlife habitat and corridors, that— 

11 (i) have been developed by Federal 

12 agencies, State wildlife agencies and nat13 ural heritage programs, Indian tribes, local 

14 governments, nongovernmental organiza15 tions, and industry; 

16 (ii) meet accepted Geospatial Inter17 operability Framework data and metadata 

18 protocols and standards; 

19 (B) include maps and descriptions of pro20 jected shifts in habitats and corridors of fish and 

21 wildlife species in response to climate change; 

22 (C) assure data quality and make the data, 

23 models, and analyses included in the System 

24 available at scales useful to decisionmakers— 

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1 (i) to prioritize and target natural re2 sources adaptation strategies and activities; 

3 (ii) to assess the impacts of proposed 

4 energy development, water, transmission, 

5 transportation, and other land use projects 

6 and avoid, minimize, and mitigate those 

7 impacts on habitats and corridors; 

8 (iii) to assess the impacts of existing 

9 development on habitats and corridors; and 

10 (iv) to develop management strategies 

11 to enhance the ability of fish, wildlife, and 

12 plant species to migrate or respond to shift13 ing habitats within existing habitats and 

14 corridors; 

15 (D) establish a process for updating maps 

16 and other information as landscapes, habitats, 

17 corridors, and wildlife populations change or as 

18 other information becomes available; 

19 (E) encourage the development of collabo20 rative plans by Federal and State agencies and 

21 Indian tribes to monitor and evaluate the effi22 cacy of the System to meet the needs of decision23 makers; 

24 (F) identify gaps in habitat and corridor 

25 information, mapping, and research that should 

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1 be addressed to fully understand and assess cur2 rent data and metadata, and to prioritize re3 search and future data collection activities for 

4 use in updating the System and provide support 

5 for those activities; 

6 (G) include mechanisms to support collabo7 rative research, mapping, and planning of habi8 tats and corridors by Federal and State agencies, 

9 Indian tribes, and other interested stakeholders; 

10 (H) incorporate biological and geospatial 

11 data on species and corridors found in energy 

12 development and transmission plans, including 

13 renewable energy initiatives, transportation, and 

14 other land use plans; 

15 (I) be based on the best scientific informa16 tion available; and 

17 (J) identify, prioritize, and describe key 

18 parcels of non-Federal land located within the 

19 boundaries of units of the National Park System, 

20 National Wildlife Refuge System, National For21 est System, or National Grassland System that 

22 are critical to maintenance of wildlife habitat 

23 and migration corridors. 

24 (d) FINANCIAL AND OTHER SUPPORT.—The Secretary 

25 may provide support to the States and Indian tribes, inmstockstill on PROD1PC66 with BILLS

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1 cluding financial and technical assistance, for activities 

2 that support the development and implementation of the 

3 System. 

4 (e) COORDINATION.—The Secretary, in cooperation 

5 with the States and Indian tribes, shall make recommenda6 tions on how the information developed in the System may 

7 be incorporated into existing relevant State and Federal 

8 plans affecting fish and wildlife, including land manage9 ment plans, the State Comprehensive Wildlife Conservation 

10 Strategies, and appropriate tribal conservation plans, to 

11 ensure that they— 

12 (1) prevent unnecessary habitat fragmentation 

13 and disruption of corridors; 

14 (2) promote the landscape connectivity necessary 

15 to allow wildlife to move as necessary to meet biologi16 cal needs, adjust to shifts in habitat, and adapt to cli17 mate change; and 

18 (3) minimize the impacts of energy, development, 

19 water, transportation, and transmission projects and 

20 other activities expected to impact habitat and cor21 ridors. 

22 (f) DEFINITIONS.—In this section: 

23 (1) GEOSPATIAL INTEROPERABILITY FRAME24 WORK.—The term ‘‘Geospatial Interoperability 

25 Framework’’ means the strategy utilized by the Namstockstill on PROD1PC66 with BILLS

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1 tional Biological Information Infrastructure that is 

2 based upon accepted standards, specifications, and 

3 protocols adopted through the International Stand4 ards Organization, the Open Geospatial Consortium, 

5 and the Federal Geographic Data Committee, to man6 age, archive, integrate, analyze, and make accessible 

7 geospatial and biological data and metadata. 

8 (2) SECRETARY.—The term ‘‘Secretary’’ means 

9 the Secretary of the Interior. 

10 SEC. 482. ADDITIONAL PROVISIONS REGARDING INDIAN 

11 TRIBES. 

12 (a) FEDERAL TRUST RESPONSIBILITY.—Nothing in 

13 this subpart is intended to amend, alter, or give priority 

14 over the Federal trust responsibility to Indian tribes. 

15 (b) EXEMPTION FROM FOIA.—If a Federal depart16 ment or agency receives any information related to sacred 

17 sites or cultural activities identified by an Indian tribe as 

18 confidential, such information shall be exempt from disclo19 sure under section 552 of title 5, United States Code, popu20 larly known as the Freedom of Information Act (5 U.S.C. 

21 552). 

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, cul13 tural, and environmental consequences of global cli14 mate change are likely to have disproportionate ad15 verse impacts on developing countries, which have less 

16 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 change 

22 than more affluent countries. 

23 (4) To a much greater degree than developed 

24 countries, developing countries rely on the natural 

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1 mate change for sustenance, livelihoods, and economic 

2 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, and 

12 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 recog15 nize, plan for, and mitigate the international stra16 tegic, social, political, cultural, environmental, health, 

17 and economic effects of climate change and to assist 

18 developing countries to increase their resilience to 

19 those effects. 

20 (8) Under Article 4 of the United Nations 

21 Framework Convention on Climate Change, developed 

22 country parties, including the United States, com23 mitted to ‘‘assist the developing country parties that 

24 are particularly vulnerable to the adverse effects of 

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1 climate change in meeting costs of adaptation to those 

2 adverse effects’’. 

3 (9) Under the Bali Action Plan, developed coun4 try parties to the United Nations Framework Conven5 tion on Climate Change, including the United States, 

6 committed to ‘‘enhanced action on the provision of fi7 nancial resources and investment to support action 

8 on mitigation and adaptation and technology co9 operation,’’ 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 support 

20 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 seasons, 

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1 biodiversity, economic livelihoods, health and diseases, 

2 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 ad7 vanced by minimizing, averting, or increasing resil8 ience to climate change impacts. 

9 SEC. 492. DEFINITIONS. 

10 In this part: 

11 (1) ALLOWANCE.—The term ‘‘allowance’’ means 

12 an emission allowance established under section 721 

13 of the Clean Air Act. 

14 (2) APPROPRIATE CONGRESSIONAL COMMIT15 TEES.—The term ‘‘appropriate congressional commit16 tees’’ 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 of25 ficial development assistance according to the income 

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1 guidelines of the Development Assistance Committee 

2 of the Organization for Economic Cooperation and 

3 Development. 

4 (4) MOST VULNERABLE DEVELOPING COUN5 TRIES.—The term ‘‘most vulnerable developing coun6 tries’’ means, as determined by the Administrator of 

7 USAID, developing countries that are at risk of sub8 stantial adverse impacts of climate change and have 

9 limited capacity to respond to such impacts, consid10 ering the approaches included in any international 

11 treaties and agreements. 

12 (5) MOST VULNERABLE COMMUNITIES AND POPU13 LATIONS.—The term ‘‘most vulnerable communities 

14 and populations’’ means communities and popu15 lations that are at risk of substantial adverse impacts 

16 of climate change and have limited capacity to re17 spond to such impacts, including impoverished com18 munities, children, women, and indigenous peoples. 

19 (6) PROGRAM.—The term ‘‘Program’’ means the 

20 International Climate Change Adaptation Program 

21 established under section 493. 

22 (7) USAID.—The term ‘‘USAID’’ means the 

23 United States Agency for International Development. 

24 (8) UNITED NATIONS FRAMEWORK CONVENTION

25 ON CLIMATE CHANGE.—The term ‘‘United Nations 

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1 Framework Convention on Climate Change’’ or ‘‘Con2 vention’’ means the United Nations Framework Con3 vention on Climate Change done at New York on May 

4 9, 1992, and entered into force on March 21, 1994. 

5 SEC. 493. INTERNATIONAL CLIMATE CHANGE ADAPTATION 

6 PROGRAM. 

7 (a) ESTABLISHMENT.—The Secretary of State, in con8 sultation with the Administrator of USAID, the Secretary 

9 of the Treasury, and the Administrator of the Environ10 mental Protection Agency, shall establish an International 

11 Climate Change Adaptation Program in accordance with 

12 the requirements of this part. 

13 (b) ALLOWANCE ACCOUNT.—Allowances allocated pur14 suant to section 782(n) of the Clean Air Act shall be avail15 able for distribution to carry out the Program established 

16 under subsection (a). 

17 (c) SUPPLEMENT NOT SUPPLANT.—Assistance pro18 vided under this part shall be used to supplement, and not 

19 to supplant, any other Federal, State, or local resources 

20 available to carry out activities of the type carried out 

21 under the Program. 

22 SEC. 494. DISTRIBUTION OF ALLOWANCES. 

23 (a) IN GENERAL.—The Secretary of State, or such 

24 other Federal agency head as the President may designate, 

25 after consultation with the Secretary of the Treasury, the 

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1 Administrator of USAID, and the Administrator of the En2 vironmental Protection Agency, shall direct the distribution 

3 of allowances to carry out the Program— 

4 (1) in the form of bilateral assistance pursuant 

5 to the requirements under section 495; 

6 (2) to multilateral funds or international insti7 tutions pursuant to the Convention or an agreement 

8 negotiated under the Convention; or 

9 (3) through a combination of the mechanisms 

10 identified under paragraphs (1) and (2). 

11 (b) LIMITATION.— 

12 (1) CONDITIONAL DISTRIBUTION TO MULTILAT13 ERAL FUNDS OR INTERNATIONAL INSTITUTIONS.—In 

14 any fiscal year, the Secretary of State, or such other 

15 Federal agency head as the President may designate, 

16 in consultation with the Administrator of USAID, the 

17 Secretary of the Treasury, and the Administrator of 

18 the Environmental Protection Agency, shall distribute 

19 at least 40 percent and up to 60 percent of the allow20 ances available to carry out the Program to one or 

21 more multilateral funds or international institutions 

22 that meet the requirements of paragraph (2), if any 

23 such fund or institution exists, and shall annually 

24 certify in a report to the appropriate congressional 

25 committees that any multilateral fund or intermstockstill on PROD1PC66 with BILLS

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1 national institution receiving allowances under this 

2 section meets the requirements of paragraph (2) or 

3 that no multilateral fund or international institution 

4 that meets the requirements of paragraph (2) exists, 

5 as the case may be. The Secretary of State shall no6 tify the appropriate congressional committees not less 

7 than 15 days prior to any transfer of allowances to 

8 a multilateral fund or international institution pur9 suant to this section. 

10 (2) MULTILATERAL FUND OR INTERNATIONAL IN11 STITUTION ELIGIBILITY.—A multilateral fund or 

12 international institution is eligible to receive allow13 ances available to carry out the Program— 

14 (A) if— 

15 (i) such fund or institution is estab16 lished pursuant to— 

17 (I) the Convention; or 

18 (II) an agreement negotiated 

19 under the Convention; or 

20 (ii) the allowances are directed to one 

21 or more multilateral development banks or 

22 international development institutions, pur23 suant to an agreement negotiated under 

24 such Convention; and 

25 (B) if such fund or institution— 

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1 (i) specifies the terms and conditions 

2 under which the United States is to provide 

3 allowances to the fund or institution, and 

4 under which the fund or institution is to 

5 provide assistance to recipient countries; 

6 (ii) ensures that assistance from the 

7 United States to the fund or institution and 

8 the principal and income of the fund or in9 stitution are disbursed only for purposes 

10 that are consistent with those described in 

11 section 491(b)(1); 

12 (iii) requires a regular meeting of a 

13 governing body of the fund or institution 

14 that includes representation from countries 

15 among the most vulnerable developing coun16 tries and provides public access; 

17 (iv) requires that local communities 

18 and indigenous peoples in areas where any 

19 activities or programs are planned are en20 gaged through adequate disclosure of infor21 mation, public participation, and consulta22 tion; and 

23 (v) prepares and makes public an an24 nual report that— 

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1 (I) describes the process and meth2 odology for selecting the recipients of 

3 assistance from the fund or institution, 

4 including assessments of vulnerability; 

5 (II) describes specific programs 

6 and activities supported by the fund or 

7 institution and the extent to which the 

8 assistance is addressing the adaptation 

9 needs of the most vulnerable developing 

10 countries, and the most vulnerable 

11 communities and populations therein; 

12 (III) describes the performance 

13 goals for assistance authorized under 

14 the fund or institution and expresses 

15 such goals in an objective and quan16 tifiable form, to the extent practicable; 

17 (IV) describes the performance in18 dicators to be used in measuring or as19 sessing the achievement of the perform20 ance goals described in subclause (III); 

21 (V) provides a basis for rec22 ommendations for adjustments to as23 sistance authorized under this part to 

24 enhance the impact of such assistance; 

25 and 

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1 (VI) describes the participation of 

2 other nations and international orga3 nizations in supporting and governing 

4 the fund or institution. 

5 (c) OVERSIGHT.— 

6 (1) DISTRIBUTION TO MULTILATERAL FUNDS OR

7 INTERNATIONAL INSTITUTIONS.—The Secretary of 

8 State, or such other Federal agency head as the Presi9 dent may designate, in consultation with the Admin10 istrator of USAID, shall oversee the distribution of al11 lowances available to carry out the Program to a 

12 multilateral fund or international institution under 

13 subsection (b). 

14 (2) BILATERAL ASSISTANCE.—The Adminis15 trator of USAID, in consultation with the Secretary 

16 of State, shall oversee the distribution of allowances 

17 available to carry out the Program for bilateral as18 sistance under section 495. 

19 SEC. 495. BILATERAL ASSISTANCE. 

20 (a) ACTIVITIES AND FOREIGN AID.— 

21 (1) IN GENERAL.—In order to achieve the pur22 poses of this part, the Administrator of USAID may 

23 carry out programs and activities and distribute al24 lowances to any private or public group (including 

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1 tions), association, or other entity engaged in peaceful 

2 activities to— 

3 (A) provide assistance to the most vulner4 able developing countries for— 

5 (i) the development of national or re6 gional climate change adaptation plans, in7 cluding a systematic assessment of socio8 economic vulnerabilities in order to identify 

9 the most vulnerable communities and popu10 lations; 

11 (ii) associated national policies; and 

12 (iii) planning, financing, and execu13 tion of adaptation programs and activities; 

14 (B) support investments, capacity-building 

15 activities, and other assistance, to reduce vulner16 ability and promote community-level resilience 

17 related to climate change and its impacts in the 

18 most vulnerable developing countries, including 

19 impacts on water availability, agricultural pro20 ductivity, flood risk, coastal resources, timing of 

21 seasons, biodiversity, economic livelihoods, 

22 health, human migration, or other social, eco23 nomic, political, cultural, or environmental mat24 ters; 

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1 (C) support climate change adaptation re2 search in or for the most vulnerable developing 

3 countries; 

4 (D) reduce vulnerability and provide in5 creased resilience to climate change for local 

6 communities and livelihoods in the most vulner7 able developing countries by encouraging— 

8 (i) the protection and rehabilitation of 

9 natural systems; 

10 (ii) the enhancement and diversifica11 tion of agricultural, fishery, and other live12 lihoods; and 

13 (iii) the reduction of disaster risks; 

14 (E) support the deployment of technologies 

15 to help the most vulnerable developing countries 

16 respond to the destabilizing impacts of climate 

17 change and encourage the identification and 

18 adoption of appropriate renewable and efficient 

19 energy technologies that are beneficial in increas20 ing community-level resilience to the impacts of 

21 global climate change in those countries; and 

22 (F) encourage the engagement of local com23 munities through disclosure of information, con24 sultation, and the communities’ informed par25 ticipation relating to the development of plans, 

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1 programs, and activities to increase community2 level resilience to climate change impacts. 

3 (2) LIMITATIONS.—Not more than 10 percent of 

4 the allowances made available to carry out bilateral 

5 assistance under this part in any year shall be dis6 tributed to support activities in any single country. 

7 (3) PRIORITIZING ASSISTANCE.—In providing 

8 assistance under this section, the Administrator of 

9 USAID shall give priority to countries, including the 

10 most vulnerable communities and populations therein, 

11 that are most vulnerable to the adverse impacts of cli12 mate change, determined by the likelihood and sever13 ity of such impacts and the country’s capacity to 

14 adapt to such impacts. 

15 (b) COMMUNITY ENGAGEMENT.— 

16 (1) IN GENERAL.—The Administrator of USAID 

17 shall ensure that local communities, including the 

18 most vulnerable communities and populations therein, 

19 in areas where any programs or activities are carried 

20 out pursuant to this section are engaged in, through 

21 disclosure of information, public participation, and 

22 consultation, the design, implementation, monitoring, 

23 and evaluation of such programs and activities. 

24 (2) CONSULTATION AND DISCLOSURE.—For each 

25 country receiving assistance under this section, the 

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1 Administrator of USAID shall establish a process for 

2 consultation with, and disclosure of information to, 

3 local, national, and international stakeholders regard4 ing any programs and activities carried out pursuant 

5 to this section. 

6 (c) COORDINATION.— 

7 (1) ALIGNMENT OF ACTIVITIES.—Subject to the 

8 direction of the President and the Secretary of State, 

9 the Administrator of USAID shall, to the extent prac10 ticable, seek to align activities under this section with 

11 broader development, poverty alleviation, or natural 

12 resource management objectives and initiatives in the 

13 recipient country. 

14 (2) COORDINATION OF ACTIVITIES.—The Admin15 istrator of USAID shall ensure that there is coordina16 tion among the activities under this section, subtitle 

17 D of this title, and part E of title VII of the Clean 

18 Air Act, in order to maximize the effectiveness of 

19 United States assistance to developing countries. 

20 (d) REPORTING.— 

21 (1) INITIAL REPORT.—Not later than 180 days 

22 after the date of enactment of this part, the Adminis23 trator of USAID, in consultation with the Secretary 

24 of State, shall submit to the President and the appromstockstill on PROD1PC66 with BILLS

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1 priate congressional committees an initial report 

2 that— 

3 (A) based on the most recent information 

4 available from reliable public sources or knowl5 edge obtained by USAID on a reliable basis, as 

6 determined by the Administrator of USAID, 

7 identifies the developing countries, including the 

8 most vulnerable communities and populations 

9 therein, that are most vulnerable to climate 

10 change impacts and in which assistance may 

11 have the greatest and most sustainable benefit in 

12 reducing vulnerability to climate change; and 

13 (B) describes the process and methodology 

14 for selecting the recipients of assistance under 

15 subsection (a)(1). 

16 (2) ANNUAL REPORTS.—Not later than 18 

17 months after the date on which the initial report is 

18 submitted pursuant to paragraph (1), and annually 

19 thereafter, the Administrator of USAID, in consulta20 tion with the Secretary of State, shall submit to the 

21 President and the appropriate congressional commit22 tees a report that— 

23 (A) describes the extent to which global cli24 mate change, through its potential negative im25 pacts on sensitive populations and natural remstockstill on PROD1PC66 with BILLS

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1 sources in the most vulnerable developing coun2 tries, may threaten, cause, or exacerbate polit3 ical, economic, environmental, cultural, or social 

4 instability or international conflict in those re5 gions; 

6 (B) describes the ramifications of any po7 tentially destabilizing impacts climate change 

8 may have on the national security, foreign pol9 icy, and economic interests of the United States, 

10 including— 

11 (i) the creation of environmental mi12 grants and internally displaced peoples; 

13 (ii) international or internal armed 

14 conflicts over water, food, land, or other re15 sources; 

16 (iii) loss of agricultural and other live17 lihoods, cultural stability, and other causes 

18 of increased poverty and economic desta19 bilization; 

20 (iv) decline in availability of resources 

21 needed for survival, including water; 

22 (v) increased impact of natural disas23 ters (including droughts, flooding, and other 

24 severe weather events); 

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1 (vi) increased prevalence or virulence 

2 of climate-related diseases; and 

3 (vii) intensified urban migration; 

4 (C) describes how allowances available 

5 under this section were distributed during the 

6 previous fiscal year to enhance the national secu7 rity, foreign policy, and economic interests of the 

8 United States and assist in avoiding the eco9 nomically, politically, environmentally, cul10 turally, and socially destabilizing impacts of cli11 mate change in most vulnerable developing coun12 tries; 

13 (D) identifies and recommends the devel14 oping countries, including the most vulnerable 

15 communities and populations therein, that are 

16 most vulnerable to climate change impacts and 

17 in which assistance may have the greatest and 

18 most sustainable benefit in reducing vulner19 ability to climate change, including in the form 

20 of deploying technologies, investments, capacity21 building activities, and other types of assistance 

22 for adaptation to climate change impacts and 

23 approaches to reduce greenhouse gases in ways 

24 that may also provide community-level resilience 

25 to climate change impacts; and 

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1 (E) describes cooperation undertaken with 

2 other nations and international organizations to 

3 carry out this part. 

4 (e) MONITORING AND EVALUATION.— 

5 (1) IN GENERAL.—The Administrator of USAID 

6 shall establish and implement a system to monitor 

7 and evaluate the effectiveness and efficiency of assist8 ance provided under this section in order to maximize 

9 the long-term sustainable development impact of such 

10 assistance, including the extent to which such assist11 ance is meeting the purposes of this part and address12 ing the adaptation needs of developing countries. 

13 (2) REQUIREMENTS.—In carrying out para14 graph (1), the Administrator of USAID shall— 

15 (A) in consultation with national govern16 ments in recipient countries, establish perform17 ance goals for assistance authorized under this 

18 section and express such goals in an objective 

19 and quantifiable form, to the extent practicable; 

20 (B) establish performance indicators to be 

21 used in measuring or assessing the achievement 

22 of the performance goals described in subpara23 graph (A), including an evaluation of— 

24 (i) the extent to which assistance under 

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1 mation to, consultation with, and informed 

2 participation by local communities; 

3 (ii) the extent to which local commu4 nities participated in the design, implemen5 tation, and evaluation of programs and ac6 tivities implemented pursuant to this sec7 tion; and 

8 (iii) the impacts of such participation 

9 on the goals and objectives of the programs 

10 and activities implemented under this sec11 tion; 

12 (C) provide a basis for recommendations for 

13 adjustments to assistance authorized under this 

14 section to enhance the impact of such assistance; 

15 and 

16 (D) include, in the annual report to the ap17 propriate congressional committees and other rel18 evant agencies required under subsection (d)(2), 

19 findings resulting from the monitoring and eval20 uation of programs and activities under this sec21 tion. 

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Union Calendar No. 90 

111TH CONGRESS 

1ST SESSION H. R. 2454 

[Report No. 111–137, Part I] 

A BILL 

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

JUNE 19, 2009 

The Committees on Financial Services, Science and 

printed House on the State of the Union and ordered to be charged; committed to the Committee of the Whole ural Resources, Agriculture, and Ways and Means disTechnology, Transportation and Infrastructure, Natmstockstill on PROD1PC66 with BILLS