I 

111TH CONGRESS 

1ST SESSION H. R. 2454 

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

warming pollution and transition to a clean energy economy. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 15, 2009 

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

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

Services, Education and Labor, Science and Technology, Transportation 

and Infrastructure, Natural Resources, Agriculture, and Ways and 

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

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

A BILL 

To create clean energy jobs, achieve energy independence, 

reduce global warming pollution and transition to a clean 

energy economy. 

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: 


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Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

TITLE I—CLEAN ENERGY 

Subtitle A—Combined Efficiency and Renewable Electricity Standard 

Sec. 101. Combined efficiency and renewable electricity standard. 

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

Subtitle B—Carbon Capture and Sequestration 

Sec. 111. National strategy. 

Sec. 112. Regulations for geologic sequestration sites. 

‘‘Sec. 813. Geologic sequestration sites. 

Sec. 113. Studies and reports. 

Sec. 114. Carbon capture and sequestration demonstration and early deployment program. 

Sec. 115. Commercial deployment of carbon capture and sequestration technologies. 

Sec. 116. Performance standards for coal-fueled power plants. 

‘‘Sec. 812. Performance standards for new coal-fired power plants. 

Subtitle C—Clean Transportation 

Sec. 121. Electric vehicle infrastructure. 

Sec. 122. Large-scale vehicle electrification program. 

Sec. 123. Plug-in electric drive vehicle manufacturing. 

Sec. 124. Investment in clean vehicles. 

Subtitle D—State Energy and Environment Development Accounts 

Sec. 131. Establishment of SEED Accounts. 

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

Subtitle E—Smart Grid Advancement 

Sec. 141. Definitions. 

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

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

labels. 

Sec. 144. Smart Grid peak demand reduction goals. 

Sec. 145. Reauthorization of energy efficiency public information program to 

include Smart Grid information. 

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

Subtitle F—Transmission Planning 

Sec. 151. Transmission planning. 

‘‘Sec. 216A. Transmission planning. 

Subtitle G—Technical Corrections to Energy Laws 

Sec. 161. Technical corrections to Energy Independence and Security Act of 

2007. 

Sec. 162. Technical corrections to Energy Policy Act of 2005. 

Subtitle H—Clean Energy Innovation Centers 


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Sec. 171. Clean energy innovation centers. 

Subtitle I—Marine Spatial Planning 

Sec. 181. Study of ocean renewable energy and transmission planning and 

siting. 

TITLE II—ENERGY EFFICIENCY 

Subtitle A—Building Energy Efficiency Programs 

Sec. 201. Greater energy efficiency in building codes. 

‘‘Sec. 304. Greater energy efficiency in building codes. 

Sec. 202. Building retrofit program. 

Sec. 203. Energy efficient manufactured homes. 

Sec. 204. Building energy performance labeling program. 

Subtitle B—Lighting and Appliance Energy Efficiency Programs 

Sec. 211. Lighting efficiency standards. 

Sec. 212. Other appliance efficiency standards. 

Sec. 213. Appliance efficiency determinations and procedures. 

‘‘Sec. 334. Jurisdiction and venue. 

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

Sec. 215. Purpose of Energy Star. 

Subtitle C—Transportation Efficiency 

Sec. 221. Emissions standards. 

‘‘PART B—MOBILE SOURCES

‘‘Sec. 821. Greenhouse gas emission standards for mobile sources. 

Sec. 222. Greenhouse gas emissions reductions through transportation efficiency. 

‘‘PART D—PLANNING REQUIREMENTS

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

Sec. 223. SmartWay transportation efficiency program. 

‘‘Sec. 822. SmartWay transportation efficiency program. 

Sec. 224. State vehicle fleets. 

Subtitle D—Industrial Energy Efficiency Programs 

Sec. 241. Industrial plant energy efficiency standards. 

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

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

Subtitle E—Improvements in Energy Savings Performance Contracting 

Sec. 251. Energy savings performance contracts. 

Subtitle F—Public Institutions 

Sec. 261. Public institutions. 

Sec. 262. Community energy efficiency flexibility. 

Sec. 263. Small community joint participation. 

Sec. 264. Low income community energy efficiency program. 


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TITLE III—REDUCING GLOBAL WARMING POLLUTION 

Sec. 301. Short title. 

Subtitle A—Reducing Global Warming Pollution 

Sec. 311. Reducing global warming pollution. 

‘‘TITLE VII—GLOBAL WARMING POLLUTION REDUCTION 

PROGRAM 

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

‘‘Sec. 701. Findings and purpose. 

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

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

‘‘Sec. 704. Supplemental pollution reductions. 

‘‘Sec. 705. Review and program recommendations. 

‘‘Sec. 706. National academy review. 

‘‘Sec. 707. Presidential response and recommendations. 

‘‘PART B—DESIGNATION AND REGISTRATION OF GREENHOUSE GASES

‘‘Sec. 711. Designation of greenhouse gases. 

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

‘‘Sec. 713. Greenhouse gas registry. 

‘‘PART C—PROGRAM RULES

‘‘Sec. 721. Emission allowances. 

‘‘Sec. 722. Prohibition of excess emissions. 

‘‘Sec. 723. Penalty for noncompliance. 

‘‘Sec. 724. Trading. 

‘‘Sec. 725. Banking and borrowing. 

‘‘Sec. 726. Strategic reserve. 

‘‘Sec. 727. Permits. 

‘‘Sec. 728. International emission allowances. 

‘‘PART D—OFFSETS

‘‘Sec. 731. Offsets Integrity Advisory Board. 

‘‘Sec. 732. Establishment of offsets program. 

‘‘Sec. 733. Eligible project types. 

‘‘Sec. 734. Requirements for offset projects. 

‘‘Sec. 735. Approval of offset projects. 

‘‘Sec. 736. Verification of offset projects. 

‘‘Sec. 737. Issuance of offset credits. 

‘‘Sec. 738. Audits. 

‘‘Sec. 739. Program review and revision. 

‘‘Sec. 740. Early offset supply. 

‘‘Sec. 741. Environmental considerations. 

‘‘Sec. 742. Trading. 

‘‘Sec. 743. International offset credits. 

‘‘PART E—SUPPLEMENTAL EMISSIONS REDUCTIONS FROM REDUCED

DEFORESTATION

‘‘Sec. 751. Definitions. 


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‘‘Sec. 752. Findings. 

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

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

‘‘Sec. 755. Reports and reviews. 

‘‘Sec. 756. Legal effect of part. 

Sec. 312. Definitions. 

‘‘Sec. 700. Definitions. 

Subtitle B—Disposition of Allowances 

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

‘‘PART H—DISPOSITION OF ALLOWANCES

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

‘‘Sec. 782. Allocation of emission allowances. 

‘‘Sec. 783. Electricity consumers. 

‘‘Sec. 784. Natural gas consumers. 

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

‘‘Sec. 786–788. øSECTIONS RESERVED¿. 

‘‘Sec. 789. Climate change rebates. 

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

‘‘Sec. 791. Auction procedures. 

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

‘‘Sec. 793. Establishment of funds. 

Subtitle C—Additional Greenhouse Gas Standards 

Sec. 331. Greenhouse gas standards. 

‘‘TITLE VIII—ADDITIONAL GREENHOUSE GAS STANDARDS 

‘‘Sec. 801. Definitions. 

‘‘PART A—STATIONARY SOURCE STANDARDS

‘‘Sec. 811. Standards of performance. 

‘‘PART C—EXEMPTIONS FROM OTHER PROGRAMS

‘‘Sec. 831. Criteria pollutants. 

‘‘Sec. 832. Hazardous air pollutants. 

‘‘Sec. 833. New source review. 

‘‘Sec. 834. Title V permits. 

‘‘Sec. 835. Existing proceedings. 

Sec. 332. HFC Regulation. 

‘‘Sec. 619. Hydrofluorocarbons (HFCs). 

Sec. 333. Black carbon. 

‘‘PART E—BLACK CARBON

‘‘Sec. 851. Black carbon. 

Sec. 334. States. 

Sec. 335. State programs. 

‘‘PART F—MISCELLANEOUS


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‘‘Sec. 861. State programs. 

Sec. 336. Enforcement. 

Sec. 337. Conforming amendments. 

Subtitle D—Carbon Market Assurance 

Sec. 341. Carbon market assurance. 

‘‘PART IV—CARBON MARKET ASSURANCE

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

Subtitle E—Additional Market Assurance 

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

commodities. 

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

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

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

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

Sec. 356. Transaction fees. 

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

Sec. 358. Regulation of carbon derivatives markets. 

TITLE IV—TRANSITIONING TO A CLEAN ENERGY ECONOMY 

Subtitle A—Industrial Sector 

Sec. 401. Ensuring real reductions in industrial emissions. 

‘‘PART F—ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS

‘‘Sec. 761. Purposes. 

‘‘Sec. 762. International negotiations. 

‘‘Sec. 763. Definitions. 

‘‘SUBPART 1—EMISSION ALLOWANCE REBATE PROGRAM

‘‘Sec. 764. Eligible industrial sectors. 

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

‘‘SUBPART 2—INTERNATIONAL RESERVE ALLOWANCE PROGRAM

‘‘Sec. 766. International reserve allowance program. 

‘‘SUBPART 3—PRESIDENTIAL DETERMINATION

‘‘Sec. 767. Presidential reports and determinations. 

Sec. 402. Allocations to petroleum refineries. 

‘‘PART G—PETROLEUM REFINERIES

‘‘Sec. 771. Allocations to petroleum refineries. 

Subtitle B—Green Jobs and Worker Transition 

PART 1—GREEN JOBS

Sec. 421. Clean energy curriculum development grants. 


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

PART 2—CLIMATE CHANGE WORKER ADJUSTMENT ASSISTANCE

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

Sec. 426. Program benefits. 

Sec. 427. General provisions. 

Subtitle C—Consumer Assistance 

Sec. 431. Energy tax credit. 

‘‘Sec. 36B. Energy tax credit. 

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

Subtitle D—Exporting Clean Technology 

Sec. 441. Findings and purposes. 

Sec. 442. Definitions. 

Sec. 443. Governance. 

Sec. 444. Determination of eligible countries. 

Sec. 445. Qualifying activities. 

Sec. 446. Assistance. 

Subtitle E—Adapting to Climate Change 

PART 1—DOMESTIC ADAPTATION

SUBPART A—NATIONAL CLIMATE CHANGE ADAPTATION PROGRAM

Sec. 451. National climate change adaptation program. 

Sec. 452. Climate services. 

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

SUBPART B—PUBLIC HEALTH AND CLIMATE CHANGE

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

Sec. 462. Relationship to other laws. 

Sec. 463. National strategic action plan. 

Sec. 464. Advisory board. 

Sec. 465. Reports. 

Sec. 466. Definitions. 

Sec. 467. Climate change health protection and promotion fund. 

SUBPART C—NATURAL RESOURCE ADAPTATION

Sec. 471. Purposes. 

Sec. 472. Natural resources climate change adaptation policy. 

Sec. 473. Definitions. 

Sec. 474. Council on Environmental Quality. 

Sec. 475. Natural Resources Climate Change Adaptation Panel. 

Sec. 476. Natural Resources Climate Change Adaptation Strategy. 

Sec. 477. Natural resources adaptation science and information. 

Sec. 478. Federal natural resource agency adaptation plans. 

Sec. 479. State natural resources adaptation plans. 

Sec. 480. Natural Resources Climate Change Adaptation Fund. 

Sec. 481. National Wildlife Habitat and Corridors Information Program. 

Sec. 482. Additional provisions regarding Indian tribes. 


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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 mean7 ing given that term in section 700 of the Clean Air 

8 Act, as added by section 312 of this Act. 

9 TITLE I—CLEAN ENERGY 

10 Subtitle A—Combined Efficiency 

11 and Renewable Electricity 

12 Standard 

13 SEC. 101. COMBINED EFFICIENCY AND RENEWABLE ELEC14 TRICITY STANDARD. 

15 (a) IN GENERAL.—Title VI of the Public Utility Reg16 ulatory Policies Act of 1978 (16 U.S.C. 2601 and fol17 lowing) is amended by adding at the end the following: 

18 ‘‘SEC. 610. COMBINED EFFICIENCY AND RENEWABLE ELEC19 TRICITY STANDARD. 

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

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

22 means— 


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

2 heat and power system that commences oper3 ation after the date of enactment of this sec4 tion; and 

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

6 from, at any time after the date of the enact7 ment of this section, upgrading, replacing, ex8 panding, or increasing the utilization of a com9 bined heat and power system that commenced 

10 operation on or before the date of enactment of 

11 this section. 

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

13 system savings’ means the electric output, and the 

14 electricity saved due to the mechanical output, of a 

15 combined heat and power system, adjusted to reflect 

16 any increase in fuel consumption by that system as 

17 compared to the fuel that would have been required 

18 to produce an equivalent useful thermal energy out19 put in a separate thermal-only system. 

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

21 The term ‘combined heat and power system’ means 

22 a system that uses the same energy source both for 

23 the generation of electrical or mechanical power and 

24 the production of steam or another form of useful 

25 thermal energy, provided that— 


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1 ‘‘(A) the system meets such requirements 

2 relating to efficiency and other operating char3 acteristics as the Commission may promulgate 

4 by regulation; and 

5 ‘‘(B) the net sales of electricity by the fa6 cility to customers not consuming the thermal 

7 output from that facility will not exceed 50 per8 cent of total annual electric generation by the 

9 facility. 

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

11 ‘customer facility savings’ means a reduction in end12 use electricity consumption (including recycled en13 ergy savings) at a facility of an end-use consumer of 

14 electricity served by a retail electric supplier, as 

15 compared to— 

16 ‘‘(A) in the case of a new facility, con17 sumption at a reference facility of average effi18 ciency; 

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

20 consumption at such facility during a base pe21 riod, except as provided in subparagraphs (C) 

22 and (D); 

23 ‘‘(C) in the case of new equipment that re24 places existing equipment with remaining useful 

25 life, the projected consumption of the existing 


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1 equipment for the remaining useful life of such 

2 equipment, and thereafter, consumption of new 

3 equipment of average efficiency of the same 

4 equipment type; and 

5 ‘‘(D) in the case of new equipment that re6 places existing equipment at the end of the use7 ful life of the existing equipment, consumption 

8 by new equipment of average efficiency of the 

9 same equipment type. 

10 ‘‘(5) DISTRIBUTED RENEWABLE GENERATION

11 FACILITY.—The term ‘distributed renewable genera12 tion facility’ means a facility that— 

13 ‘‘(A) generates renewable electricity; 

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

15 consumers at or near the facility site; and 

16 ‘‘(C) is no larger than 2 megawatts in ca17 pacity. 

18 ‘‘(6) ELECTRICITY SAVINGS.—The term ‘elec19 tricity savings’ means reductions in electricity con20 sumption, relative to business-as-usual projections, 

21 achieved through measures implemented after the 

22 date of enactment of this section, limited to— 

23 ‘‘(A) customer facility savings of elec24 tricity, adjusted to reflect any associated in25 crease in fuel consumption at the facility; 


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1 ‘‘(B) reductions in distribution system 

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

6 ‘‘(C) CHP savings; and 

7 ‘‘(D) fuel cell savings. 

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

9 means land owned by the United States, other than 

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

11 ‘‘(8) FEDERAL RENEWABLE ELECTRICITY

12 CREDIT.—The term ‘Federal renewable electricity 

13 credit’ means a credit, representing one megawatt 

14 hour of renewable electricity, issued pursuant to sub15 section (e). 

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

17 device that directly converts the chemical energy of 

18 a fuel and an oxidant into electricity by electro19 chemical processes occurring at separate electrodes 

20 in the device. 

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

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

23 that is installed after the date of enactment of this 

24 section, or by upgrading a fuel cell that commenced 

25 operation on or before the date of enactment of this 


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1 section, as a result of the greater efficiency with 

2 which the fuel cell transforms fuel into electricity as 

3 compared with sources of electricity delivered 

4 through the grid, provided that— 

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

6 relating to efficiency and other operating char7 acteristics as the Commission may promulgate 

8 by regulation; and 

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

10 fuel cell to third parties that do not receive 

11 thermal service from the fuel cell do not exceed 

12 50 percent of the total annual electricity gen13 eration by the fuel cell. 

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

15 The term ‘high conservation priority land’ means 

16 land that is not Federal land and is— 

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

18 imperiled or imperiled under a State Natural 

19 Heritage Program; or 

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

21 as defined by the office of the relevant State 

22 Forester or relevant State agency with regu23 latory jurisdiction over forestry activities. 


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1 ‘‘(12) OTHER QUALIFYING ENERGY RE2 SOURCE.—The term ‘other qualifying energy re3 source’ means any of the following: 

4 ‘‘(A) Landfill gas. 

5 ‘‘(B) Wastewater treatment gas. 

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

7 electricity at or near the mine mouth. 

8 ‘‘(D) Qualified waste-to-energy. 

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

10 ‘qualified hydropower’ means— 

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

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

14 facility that was placed in service before that 

15 date and does not include additional energy 

16 generated as a result of operational changes not 

17 directly associated with efficiency improvements 

18 or capacity additions; or 

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

21 1992, provided that the Commission certifies 

22 that— 

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


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1 navigation, or water supply purposes and 

2 was not producing hydroelectric power 

3 prior to the addition of such capacity; 

4 ‘‘(ii) the hydroelectric project installed 

5 on the dam is licensed (or is exempt from 

6 licensing) by the Commission and is in 

7 compliance with the terms and conditions 

8 of the license or exemption, and with other 

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

11 applicable fish passage requirements; and 

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

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

16 the absence of the hydroelectric project is 

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

19 in water surface elevation for the purpose 

20 of improving the environmental quality of 

21 the affected waterway. 

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

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

24 the combustion of municipal solid waste or construc25 tion, demolition, or disaster debris, or from the gasVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 ification or pyrolization of such waste or debris and 

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

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

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

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

10 lifecycle greenhouse gas emissions attributable 

11 to the generation of electricity from such waste 

12 or debris are lower than those attributable to 

13 the likely alternative method of disposing of 

14 such waste or debris; and 

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

16 generating electricity from such energy provides 

17 to the Commission, on an annual basis— 

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

19 in compliance with all applicable State and 

20 Federal environmental permits; 

21 ‘‘(ii) in the case of a facility that com22 menced operation before the date of the 

23 enactment of this section, a certification 

24 that the facility meets emissions standards 

25 promulgated under sections 112 or 129 of 


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

2 7429) that apply as of the date of the en3 actment of this section to new facilities 

4 within the relevant source category; and 

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

6 pyrolization, or gasification of municipal 

7 solid waste, a certification that each local 

8 government unit from which such waste 

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

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

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

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

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

20 wasted. 

21 ‘‘(16) RENEWABLE BIOMASS.—The term ‘re22 newable 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 the date 

2 of enactment of this section; 

3 ‘‘(B) Plant material, including waste mate4 rial, harvested or collected from pastureland 

5 that was nonforested on such date of enact6 ment; 

7 ‘‘(C) Nonhazardous vegetative matter de8 rived from waste, including separated yard 

9 waste, landscape right-of-way trimmings, con10 struction and demolition debris or food waste 

11 (but not municipal solid waste, recyclable waste 

12 paper, painted, treated or pressurized wood, or 

13 wood contaminated with plastic or metals); 

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

15 including products of animal waste digesters; 

16 ‘‘(E) Algae; 

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

18 other vegetative matter removed from within 

19 600 feet of any building, campground, or route 

20 designated for evacuation by a public official 

21 with responsibility for emergency preparedness, 

22 or from within 300 feet of a paved road, electric 

23 transmission line, utility tower, or water supply 

24 line; 


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1 ‘‘(G) Residues from or byproducts of 

2 milled logs; 

3 ‘‘(H) Any of the following removed from 

4 forested land that is not Federal and is not 

5 high conservation priority land: 

6 ‘‘(i) Trees, brush, slash, residues, 

7 interplanted energy crops, or any other 

8 vegetative matter removed from an actively 

9 managed tree plantation established— 

10 ‘‘(I) prior to the date of enact11 ment of this section; or 

12 ‘‘(II) on land that, as of the date 

13 of enactment of this section, was cul14 tivated or fallow and non-forested. 

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

16 cull trees, pulpwood, and brush removed 

17 from naturally regenerated forests or other 

18 non-plantation forests, including for the 

19 purposes of hazardous fuel reduction or 

20 preventative treatment for reducing or con21 taining insect or disease infestation. 

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

23 trees, pulpwood, brush and species that are 

24 non-native and noxious, from stands that 

25 were planted and managed after the date 


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1 of enactment of this section to restore or 

2 maintain native forest types. 

3 ‘‘(iv) Dead or severely damaged trees 

4 removed within 5 years of fire, blowdown, 

5 or other natural disaster, and badly in6 fested trees; 

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

8 or removed invasive species from National For9 est System land and public lands (as defined in 

10 section 103 of the Federal Land Policy and 

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

12 including those that are byproducts of preven13 tive treatments (such as trees, wood, brush, 

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

15 as part of a federally recognized timber sale, or 

16 that are removed to reduce hazardous fuels, to 

17 reduce or contain disease or insect infestation, 

18 or to restore ecosystem health, and that are— 

19 ‘‘(i) not from components of the Na20 tional Wilderness Preservation System, 

21 Wilderness Study Areas, Inventoried 

22 Roadless Areas, old growth or mature for23 est stands, components of the National 

24 Landscape Conservation System, National 

25 Monuments, National Conservation Areas, 


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1 Designated Primitive Areas, or Wild and 

2 Scenic Rivers corridors; 

3 ‘‘(ii) harvested in environmentally sus4 tainable quantities, as determined by the 

5 appropriate Federal land manager; and 

6 ‘‘(iii) harvested in accordance with 

7 Federal and State law and applicable land 

8 management plans. 

9 ‘‘(17) RENEWABLE ELECTRICITY.—The term 

10 ‘renewable electricity’ means electricity generated 

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

12 energy resource or other qualifying energy resources. 

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

14 term ‘renewable energy resource’ means each of the 

15 following: 

16 ‘‘(A) Wind energy. 

17 ‘‘(B) Solar energy. 

18 ‘‘(C) Geothermal energy. 

19 ‘‘(D) Renewable biomass. 

20 ‘‘(E) Biogas derived exclusively from re21 newable biomass. 

22 ‘‘(F) Biofuels derived exclusively from re23 newable biomass. 

24 ‘‘(G) Qualified hydropower. 


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1 ‘‘(H) Marine and hydrokinetic renewable 

2 energy, as that term is defined in section 632 

3 of the Energy Independence and Security Act 

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

5 ‘‘(19) RETAIL ELECTRIC SUPPLIER.— 

6 ‘‘(A) IN GENERAL.—The term ‘retail elec7 tric supplier’ means, for any given year, an 

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

9 megawatt hours of electric energy to electric 

10 consumers for purposes other than resale dur11 ing the preceding calendar year. 

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

13 purposes of determining whether an electric 

14 utility qualifies as a retail electric supplier 

15 under subparagraph (A)— 

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

17 electric utility to electric consumers, other 

18 than sales to the affiliate’s lessees or ten19 ants, for purposes other than resale shall 

20 be considered to be sales of such electric 

21 utility; and 

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

23 affiliate, lessee, or tenant of such electric 

24 utility shall not be treated as sales to elec25 tric consumers. 


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

2 paragraph, the term ‘affiliate’ when used in re3 lation to a person, means another person that 

4 directly or indirectly owns or controls, is owned 

5 or controlled by, or is under common ownership 

6 or control with, such person, as determined 

7 under regulations promulgated by the Commis8 sion. 

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

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

11 amount’ means the total amount of electric energy 

12 sold by the retail electric supplier, expressed in 

13 megawatt hours, to electric customers for purposes 

14 other than resale during the relevant calendar year, 

15 excluding— 

16 ‘‘(A) electricity generated by a hydro17 electric facility that is not qualified hydropower; 

18 ‘‘(B) electricity generated by a nuclear 

19 generating unit placed in service after the date 

20 of enactment of this section; and 

21 ‘‘(C) the proportion of electricity generated 

22 by a fossil-fueled generating unit that is equal 

23 to the proportion of greenhouse gases produced 

24 by such unit that are captured and geologically 

25 sequestered. 


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

2 ‘retire’ and ‘retirement’ with respect to a Federal re3 newable electricity credit, means to disqualify such 

4 credit for any subsequent use under this section, re5 gardless of whether the use is a sale, transfer, ex6 change, or submission in satisfaction of a compliance 

7 obligation. 

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

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

10 retailer, building owner, energy service company, fi11 nancial institution or other commercial, industrial or 

12 nonprofit entity that is capable of providing elec13 tricity savings in accordance with the requirements 

14 of this section. 

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

16 The term ‘total annual electricity savings’ means 

17 electricity savings during a specified calendar year 

18 from measures that were placed into service since 

19 date of the enactment of this section, taking into ac20 count verified measure lifetimes or verified annual 

21 savings attrition rates, as determined in accordance 

22 with such regulations as the Commission may pro23 mulgate and measured in megawatt hours. 

24 ‘‘(b) ANNUAL COMPLIANCE OBLIGATION.— 


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

2 2012 through 2039, not later than March 31 of the 

3 following calendar year, each retail electric supplier 

4 shall submit to the Commission an amount of Fed5 eral renewable electricity credits and demonstrated 

6 total annual electricity savings that, in the aggre7 gate, is equal to such retail electric supplier’s annual 

8 combined target as set forth in subsection (d), ex9 cept as otherwise provided in subsection (g). 

10 ‘‘(2) DEMONSTRATION OF SAVINGS.—For pur11 poses of this subsection, submission of demonstrated 

12 total annual electricity savings means submission of 

13 a report that demonstrates, in accordance with the 

14 requirements of subsection (f), the total annual elec15 tricity savings achieved by the retail electricity sup16 plier within the relevant compliance year. 

17 ‘‘(3) RENEWABLE ELECTRICITY CREDITS POR18 TION.—Except as provided in paragraph (4), each 

19 retail electric supplier must submit Federal renew20 able electricity credits equal to at least three quar21 ters of the retail electric supplier’s annual combined 

22 target. 

23 ‘‘(4) STATE PETITION.— 

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

25 from the Governor of any State (including, for 


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1 purposes of this paragraph, the Mayor of the 

2 District of Columbia), the Commission shall in3 crease, to not more than two fifths, the propor4 tion of the annual combined targets of retail 

5 electric suppliers located within such State that 

6 may be met through submission of dem7 onstrated total annual electricity savings, pro8 vided that such increase shall be effective only 

9 with regard to the portion of a retail electric 

10 supplier’s annual combined target that is attrib11 utable to electricity sales within such State. 

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

13 under this paragraph shall include an expla14 nation of the Governor’s rationale for deter15 mining, after consultation with the relevant 

16 State regulatory authority and other retail elec17 tricity ratemaking authorities within the State, 

18 to make such request. The request shall specify 

19 the maximum proportion of annual combined 

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

21 met through demonstrated total annual elec22 tricity savings, and the period for which such 

23 proportion shall be effective. 

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

25 State may, after consultation with the relevant 


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

3 submit a written request for revocation or revi4 sion of a previous request submitted under this 

5 paragraph. The Commission shall grant such 

6 request, provided that— 

7 ‘‘(i) any revocation or revision shall 

8 not apply to the combined annual target 

9 for any year that is any earlier than 2 cal10 endar years after the calendar year in 

11 which such request is submitted, so as to 

12 provide retail electric suppliers with ade13 quate notice of such change; and 

14 ‘‘(ii) any revision shall meet the re15 quirements of subparagraph (A). 

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

17 1 year after the date of enactment of this section, the 

18 Commission shall promulgate regulations to implement 

19 and enforce the requirements of this section. In promul20 gating such regulations, the Commission shall, to the ex21 tent practicable— 

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

23 practices, of existing State renewable electricity and 

24 energy efficiency programs; 


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

2 regional tracking systems that issue and track non3 Federal renewable electricity credits; and 

4 ‘‘(3) cooperate with the States to facilitate co5 ordination between State and Federal renewable 

6 electricity and energy efficiency programs and to 

7 minimize administrative burdens and costs to retail 

8 electric suppliers. 

9 ‘‘(d) ANNUAL COMPLIANCE REQUIREMENT.— 

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

11 of calendar years 2012 through 2039, a retail elec12 tric supplier’s annual combined target shall be the 

13 product of— 

14 ‘‘(A) the required annual percentage for 

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

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

17 amount for such year. 

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

19 each of calendar years 2012 through 2039, the re20 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 


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‘‘Calendar year Required annual 

percentage 

2020 ............................................................................... 20.0 

2021 through 2039 ........................................................ 20.0 

1 ‘‘(e) FEDERAL RENEWABLE ELECTRICITY CRED2 ITS.— 

3 ‘‘(1) IN GENERAL.—The regulations promul4 gated under this section shall include provisions gov5 erning the issuance, tracking, and verification of 

6 Federal renewable electricity credits. Except as pro7 vided in paragraphs (2), (3), and (4) of this sub8 section, the Commission shall issue to each gener9 ator of renewable electricity, 1 Federal renewable 

10 electricity credit for each megawatt hour of renew11 able electricity generated by such generator after 

12 December 31, 2011. The Commission shall assign a 

13 unique serial number to each Federal renewable 

14 electricity credit. 

15 ‘‘(2) GENERATION FROM CERTAIN STATE RE16 NEWABLE ELECTRICITY PROGRAMS.—Where renew17 able electricity is generated with the support of pay18 ments from a retail electric supplier pursuant to a 

19 State renewable electricity program (whether 

20 through State alternative compliance payments or 

21 through payments to a State renewable electricity 

22 procurement fund or entity), the Commission shall 

23 issue Federal renewable electricity credits to such reVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 tail electric supplier for the proportion of the rel2 evant renewable electricity generation that is attrib3 utable to the retail electric supplier’s payments, as 

4 determined pursuant to regulations issued by the 

5 Commission. For any remaining portion of the rel6 evant renewable electricity generation, the Commis7 sion shall issue Federal renewable electricity credits 

8 to the generator, as provided in paragraph (1), ex9 cept that in no event shall more than 1 Federal re10 newable electricity credit be issued for the same 

11 megawatt hour of electricity. In determining how 

12 Federal renewable electricity credits will be appor13 tioned among retail electric suppliers and generators 

14 in such circumstances, the Commission shall con15 sider information and guidance furnished by the rel16 evant State or States. 

17 ‘‘(3) CERTAIN POWER SALES CONTRACTS.— 

18 When a generator has sold renewable electricity to 

19 a retail electric supplier under a contract for power 

20 from a facility placed in service before the date of 

21 enactment of this section, and the contract does not 

22 provide for the determination of ownership of the 

23 Federal renewable electricity credits associated with 

24 such generation, the Commission shall issue such 


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1 Federal renewable electricity credits to the retail 

2 electric supplier for the duration of the contract. 

3 ‘‘(4) CREDIT MULTIPLIER FOR DISTRIBUTED

4 RENEWABLE GENERATION.— 

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

6 subparagraph (B), the Commission shall issue 3 

7 Federal renewable electricity credits for each 

8 megawatt hour of renewable electricity gen9 erated by a distributed renewable generation fa10 cility. 

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

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

13 2014, and not less frequently than every 4 

14 years thereafter, the Commission shall review 

15 the effect of this paragraph and shall, as nec16 essary, reduce the number of Federal renewable 

17 electricity credits per megawatt hour issued 

18 under this paragraph for any given energy 

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

20 that such number is no higher than the Com21 mission determines is necessary to make dis22 tributed renewable generation facilities using 

23 such source or technology cost competitive with 

24 other sources of renewable electricity genera25 tion. 


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1 ‘‘(C) FACILITIES PLACED IN SERVICE

2 AFTER ENACTMENT.—For any distributed re3 newable generation facility placed in service 

4 after the date of enactment of this section, sub5 paragraph (B) shall not apply for the first 10 

6 years after the date on which the facility is 

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

8 year period, the Commission shall issue to the 

9 facility the same number of Federal renewable 

10 electricity credits per megawatt hour as are 

11 issued to that facility in the year in which such 

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

13 period, the Commission shall issue Federal re14 newable energy credits to the facility in accord15 ance with the current multiplier as determined 

16 pursuant to subparagraph (B). 

17 ‘‘(5) CREDITS BASED ON QUALIFIED HYDRO18 POWER.—For purposes of this subsection, the num19 ber of Federal renewable electricity credits issued for 

20 qualified hydropower shall be calculated— 

21 ‘‘(A) based solely on the increase in aver22 age annual generation directly resulting from 

23 the efficiency improvements or capacity addi24 tions described in subsection (a)(13)(A); and 


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1 ‘‘(B) using the same water flow informa2 tion used to determine a historic average an3 nual generation baseline for the hydroelectric 

4 facility, as certified by the Commission. 

5 ‘‘(6) GENERATION FROM MIXED RENEWABLE

6 AND NONRENEWABLE RESOURCES.—If electricity is 

7 generated using both a renewable energy resource or 

8 other qualifying energy resource and an energy 

9 source that is not a renewable energy resource or 

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

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

12 fuel), the Commission shall issue Federal renewable 

13 electricity credits based son the proportion of the 

14 electricity that is attributable to the renewable en15 ergy resource or other qualifying energy resource. 

16 ‘‘(7) PROHIBITION AGAINST DOUBLE-COUNT17 ING.—Except as provided in paragraph (4) of this 

18 subsection, the Commission shall ensure that no 

19 more than 1 Federal renewable electricity credit will 

20 be issued for any megawatt hour of renewable elec21 tricity and that no Federal renewable electricity 

22 credit will be used more than once for compliance 

23 with this section. 

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

25 renewable electricity credit may sell, exchange, 


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•HR 2454 IH

1 transfer, submit for compliance in accordance with 

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

3 by the Commission. 

4 ‘‘(9) BANKING.—A Federal renewable elec5 tricity credit may be submitted in satisfaction of the 

6 compliance obligation set forth in subsection (b) for 

7 the compliance year in which the credit was issued 

8 or for any subsequent compliance year. 

9 ‘‘(10) RETIREMENT.—The Commission shall re10 tire a Federal renewable electricity credit imme11 diately upon submission by the lawful holder of such 

12 credit, whether in satisfaction of a compliance obli13 gation under subsection (b) or on some other basis. 

14 ‘‘(f) ELECTRICITY SAVINGS.— 

15 ‘‘(1) STANDARDS FOR MEASUREMENT OF SAV16 INGS.—As part of the regulations promulgated 

17 under this section, the Commission shall prescribe 

18 standards and protocols for defining and measuring 

19 electricity savings and total annual electricity sav20 ings that can be counted towards the compliance ob21 ligation set forth in subsection (b). Such protocols 

22 and standards shall, at minimum— 

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

24 and energy conservation measures that can be 

25 counted; 


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1 ‘‘(B) require that energy consumption esti2 mates for customer facilities or portions of fa3 cilities in the applicable base and current years 

4 be adjusted, as appropriate, to account for 

5 changes in weather, level of production, and 

6 building area; 

7 ‘‘(C) account for the useful life of meas8 ures; 

9 ‘‘(D) include deemed savings values for 

10 specific, commonly used measures; 

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

12 be estimated based on extrapolation from a rep13 resentative sample of participating customers; 

14 ‘‘(F) include procedures for counting CHP 

15 savings, recycled energy savings, and fuel cell 

16 savings; 

17 ‘‘(G) avoid double-counting of savings used 

18 for compliance with this section, including sav19 ings that are transferred pursuant to paragraph 

20 (3); 

21 ‘‘(H) ensure that, except as provided in 

22 subparagraph (J), the retail electric supplier 

23 claiming the savings played a significant role in 

24 achieving the savings (including through the acVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 tivities of a designated agent of the supplier or 

2 through the purchase of transferred savings); 

3 ‘‘(I) include savings from programs admin4 istered by a retail electric supplier (or a retail 

5 electricity distributor that is not a retail electric 

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

7 other sources; and 

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

13 achieved through such programs shall be dis14 tributed equitably among retail electric sup15 pliers in accord with the direction of the rel16 evant State regulatory authority. 

17 ‘‘(2) STANDARDS FOR THIRD-PARTY

18 VERIFICATION OF SAVINGS.—The regulations pro19 mulgated under this section shall establish proce20 dures and standards requiring third-party 

21 verification of all reported electricity savings, includ22 ing requirements for accreditation of third-party 

23 verifiers to ensure that such verifiers are profes24 sionally qualified and have no conflicts of interest. 

25 ‘‘(3) TRANSFERS OF SAVINGS.— 


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1 ‘‘(A) BILATERAL CONTRACTS FOR SAVINGS

2 TRANSFERS.—Subject to the limitations of this 

3 paragraph, a retail electric supplier may use 

4 electricity savings transferred, pursuant to a bi5 lateral contract, from another retail electric 

6 supplier, an owner of an electric distribution fa7 cility that is not a retail electric supplier, a 

8 State, or a third-party efficiency provider to 

9 meet the applicable compliance obligation under 

10 subsection (b). 

11 ‘‘(B) REQUIREMENTS.—Electricity savings 

12 transferred and used for compliance pursuant 

13 to this paragraph shall be— 

14 ‘‘(i) measured and verified in accord15 ance with the procedures specified under 

16 this subsection; 

17 ‘‘(ii) reported in accordance with 

18 paragraph (4) of this subsection; and 

19 ‘‘(iii) achieved within the same State 

20 as is served by the retail electric supplier. 

21 ‘‘(C) REGULATORY APPROVAL.—Nothing 

22 in this paragraph shall limit or affect the au23 thority of a State regulatory authority to re24 quire a retail electric supplier that is regulated 

25 by such authority to obtain such authority’s auVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 thorization or approval of a contract for trans2 fer of savings under this paragraph. 

3 ‘‘(4) REPORTING SAVINGS.— 

4 ‘‘(A) REQUIREMENTS.—The regulations 

5 promulgated under this section shall establish 

6 requirements governing the submission of re7 ports to demonstrate, in accord with the proto8 cols and standards for measurement and third9 party verification established under this sub10 section, the total annual electricity savings 

11 achieved by a retail electric supplier within the 

12 relevant year. 

13 ‘‘(B) REVIEW AND APPROVAL.—The Com14 mission shall review each report submitted to 

15 the Commission by a retail electric supplier and 

16 shall exclude any electricity savings that have 

17 not been adequately demonstrated in accord18 ance with the requirements of this subsection. 

19 ‘‘(5) STATE ADMINISTRATION.— 

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

21 receipt of an application from the Governor of 

22 a State (including, for purposes of this sub23 section, the Mayor of the District of Columbia), 

24 the Commission may delegate to the State the 

25 authority to review and verify reported elecVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 tricity savings for purposes of determining dem2 onstrated total annual electricity savings that 

3 may be counted towards a retail electric sup4 plier’s compliance obligation under subsection 

5 (b). The Commission shall make a substantive 

6 determination approving or disapproving a 

7 State application under this subparagraph, 

8 after notice and comment, within 180 days of 

9 receipt of a complete application. 

10 ‘‘(B) ALTERNATIVE MEASUREMENT AND

11 VERIFICATION PROCEDURES AND STAND12 ARDS.—As part of an application submitted 

13 under subparagraph (A), a State may request 

14 to use alternative measurement and verification 

15 procedures and standards to those specified in 

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

17 demonstrates that such alternative procedures 

18 and standards provide a level of accuracy of 

19 measurement and verification at least equiva20 lent to the Federal procedures and standards 

21 promulgated under paragraphs (1) and (2) of 

22 this subsection. 

23 ‘‘(C) REVIEW OF STATE IMPLEMENTA24 TION.—The Commission shall periodically re25 view State implementation of delegated authorVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 ity under this paragraph to ensure conformance 

2 with the requirements of this section. The Com3 mission may, at any time, revoke the delegation 

4 of authority under this section upon a finding 

5 that the State is not implementing its delegated 

6 responsibilities in conformity with this para7 graph. As a condition of maintaining its dele8 gated authority under this paragraph, the Com9 mission may require a State to submit a revised 

10 application under subparagraph (A) if the Com11 mission has— 

12 ‘‘(i) promulgated new or substantially 

13 revised measurement and verification pro14 cedures and standards under this sub15 section; or 

16 ‘‘(ii) otherwise substantially revised 

17 the program established under this section. 

18 ‘‘(g) ALTERNATIVE COMPLIANCE PAYMENTS.— 

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

20 may satisfy the requirements of subsection (b) in 

21 whole or in part by submitting in accord with this 

22 subsection, in lieu of each Federal renewable elec23 tricity credit or megawatt hour of demonstrated 

24 total annual electricity savings that would otherwise 

25 be due, a payment equal to $25, adjusted for inflaVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 tion on January 1 of each year following calendar 

2 year 2009, in accord with such regulations as the 

3 Commission may promulgate. 

4 ‘‘(2) PAYMENT TO STATE FUNDS.—Payments 

5 made under this subsection shall be made directly to 

6 the State in which the retail electric supplier is lo7 cated, provided that such payments are deposited di8 rectly into a fund within the State’s treasury for use 

9 pursuant to paragraph (3). 

10 ‘‘(3) STATE USE OF FUNDS.—States receiving 

11 payments under this subsection shall use such funds 

12 exclusively for the purposes of— 

13 ‘‘(A) deploying technologies that generate 

14 electricity from renewable energy resources; or 

15 ‘‘(B) cost-effective energy efficiency meas16 ures and programs. 

17 ‘‘(4) REPORTING.—Any State that receives a 

18 payment under this subsection shall, within 12 

19 months of receipt of such payment, provide a report 

20 to the Commission giving a full accounting of the 

21 use of such payments, including a detailed descrip22 tion of the activities funded thereby. 

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

24 may require any retail electric supplier, renewable elec25 tricity generator, or such other entities as the Commission 


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•HR 2454 IH

1 deems appropriate, to provide any information the Com2 mission determines appropriate to carry out this section. 

3 Failure to submit such information or submission of false 

4 or misleading information under this subsection shall be 

5 a violation of this section. 

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

7 ‘‘(1) FAILURE TO SUBMIT CREDITS OR DEM8 ONSTRATE SAVINGS.—If any person fails to comply 

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

10 person shall be liable to pay to the Commission a 

11 civil penalty equal to the product of— 

12 ‘‘(A) double the alternative compliance 

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

14 and 

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

19 in violation of the requirements of subsections 

20 (b) and (g). 

21 ‘‘(2) ENFORCEMENT.—The Secretary shall as22 sess a civil penalty under paragraph (1) in accord23 ance with the procedures described in section 31(d) 

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


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1 ‘‘(3) VIOLATION OF REQUIREMENT OF REGULA2 TIONS OR ORDERS.—Any person who violates, or 

3 fails or refuses to comply with, any requirement of 

4 a regulation promulgated or order issued under this 

5 section shall be subject to a civil penalty under sec6 tion 316A(b) of the Federal Power Act. Such pen7 alty shall be assessed by the Commission in the 

8 same manner as in the case of a violation referred 

9 to in section 316A(b) of such Act. 

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

11 final action taken by the Commission under this section, 

12 other than the assessment of a civil penalty under sub13 section (i), may use the procedures for review described 

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

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

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

17 all other final actions of the Commission under this section 

18 other than the assessment of a civil penalty under sub19 section (i). 

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

21 shall— 

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

23 State or political subdivision of a State to— 

24 ‘‘(A) adopt or enforce any law or regula25 tion respecting renewable electricity or energy 


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•HR 2454 IH

1 efficiency, including any law or regulation es2 tablishing requirements more stringent than 

3 those established by this section, provided that 

4 no such law or regulation may relieve any per5 son of any requirement otherwise applicable 

6 under this section; or 

7 ‘‘(B) regulate the acquisition and disposi8 tion of Federal renewable electricity credits by 

9 retail electric suppliers within the jurisdiction of 

10 such State or political subdivision, including the 

11 authority to require such retail electric supplier 

12 to acquire and submit to the Secretary for re13 tirement Federal renewable electricity credits in 

14 excess of those submitted under this section; or 

15 ‘‘(2) affect the application of, or the responsi16 bility for compliance with, any other provision of law 

17 or regulation, including environmental and licensing 

18 requirements. 

19 ‘‘(l) SUNSET.—This section expires on December 31, 

20 2040.’’. 

21 (b) CONFORMING AMENDMENT.—The table of con22 tents set forth in section 1(b) of the Public Utility Regu23 latory Policies Act of 1978 (16 U.S.C. 2601 and following) 

24 is amended by inserting after the item relating to section 

25 609 the following: 

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


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•HR 2454 IH

1 Subtitle B—Carbon Capture and 

2 Sequestration 

3 SEC. 111. NATIONAL STRATEGY. 

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

5 date of enactment of this Act, the Administrator of the 

6 Environmental Protection Agency, in consultation with 

7 the Secretary of Energy and the heads of such other rel8 evant Federal agencies as the President may designate, 

9 shall submit to Congress a report setting forth a unified 

10 and comprehensive strategy to address the key legal, regu11 latory and other barriers to the commercial-scale deploy12 ment of carbon capture and sequestration. 

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

14 shall— 

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

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

18 if any, that require Federal legislation, and those 

19 that would be best addressed at the State or re20 gional level; 

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

23 programs and delegation of authority for permitting; 

24 and 


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•HR 2454 IH

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

3 evaluate and address such barriers. 

4 SEC. 112. REGULATIONS FOR GEOLOGIC SEQUESTRATION 

5 SITES. 

6 (a) COORDINATED CERTIFICATION AND PERMITTING

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

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

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

10 ‘‘SEC. 813. GEOLOGIC SEQUESTRATION SITES. 

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

12 shall establish a coordinated approach to certifying and 

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

15 such approach, the Administrator shall— 

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

17 with, the requirements of section 1421 of the Safe 

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

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

20 Security Act of 2009, including the rulemaking for 

21 geologic sequestration wells described at 73 Fed. 

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

23 ‘‘(2) to the extent practicable, reduce the bur24 den on certified entities and implementing authori25 ties. 


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

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

3 promulgate regulations to protect human health and the 

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

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

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

11 ‘‘(2) requirements for— 

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

14 into, and escape from, geologic sequestration 

15 sites, taking into account any requirements or 

16 protocols developed under section 713; 

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

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

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

22 ‘‘(D) other elements or safeguards nec23 essary to achieve the purpose set forth in sub24 section (b). 


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1 ‘‘(d) REPORT.—Not later than 2 years after the pro2 mulgation of regulations under subsection (b), and at 3- 

3 year intervals thereafter, the Administrator shall deliver 

4 to the Committee on Energy and Commerce of the House 

5 of Representatives and the Committee on Environment 

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

9 include— 

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

11 atmosphere, if any, and performance of active and 

12 closed geologic sequestration sites, including those 

13 where enhanced hydrocarbon recovery operations 

14 occur; 

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

19 ‘‘(3) recommendations on how such programs 

20 and regulations should be improved or made more 

21 effective; and 

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

23 (b) SAFE DRINKING WATER ACT STANDARDS.—Sec24 tion 1421 of the Safe Drinking Water Act (42 U.S.C. 


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1 300h) is amended by inserting after subsection (d) the fol2 lowing: 

3 ‘‘(e) CARBON DIOXIDE GEOLOGIC SEQUESTRATION

4 WELLS.— 

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

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

9 wells. 

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

14 emergency and remedial response, well plugging, site 

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

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

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

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

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

22 method satisfactory to the Administrator.’’. 

23 SEC. 113. STUDIES AND REPORTS. 

24 (a) STUDY OF LEGAL FRAMEWORK FOR GEOLOGIC

25 SEQUESTRATION SITES.— 


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1 (1) ESTABLISHMENT OF TASK FORCE.—As 

2 soon as practicable, but not later than 6 months 

3 after the date of enactment of this Act, the Adminis4 trator of the Environmental Protection Agency shall 

5 establish a task force to be composed of an equal 

6 number of subject matter experts, nongovernmental 

7 organizations with expertise in environmental policy, 

8 academic experts with expertise in environmental 

9 law, State officials with environmental expertise, 

10 representatives of State Attorneys General, and 

11 members of the private sector, to conduct a study 

12 of— 

13 (A) existing Federal environmental stat14 utes, State environmental statutes, and State 

15 common law that apply to geologic sequestra16 tion sites for carbon dioxide, including the abil17 ity of such laws to serve as risk management 

18 tools; 

19 (B) the existing statutory framework, in20 cluding Federal and State laws, that apply to 

21 harm and damage to the environment or public 

22 health at closed sites where carbon dioxide in23 jection has been used for enhanced hydrocarbon 

24 recovery; 


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1 (C) the statutory framework, environ2 mental health and safety considerations, imple3 mentation issues, and financial implications of 

4 potential models for Federal, State, or private 

5 sector assumption of liabilities and financial re6 sponsibilities with respect to closed geologic se7 questration sites; 

8 (D) private sector mechanisms, including 

9 insurance and bonding, that may be available to 

10 manage environmental, health and safety risk 

11 from closed geologic sequestration sites; and 

12 (E) the subsurface mineral rights, water 

13 rights, or property rights issues associated with 

14 geologic sequestration of carbon dioxide. 

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

16 the date of enactment of this Act, the task force es17 tablished under paragraph (1) shall submit to Con18 gress a report describing the results of the study 

19 conducted under that paragraph including any con20 sensus recommendations of the task force. 

21 (b) ENVIRONMENTAL STATUTES.— 

22 (1) STUDY.—The Administrator of the Envi23 ronmental Protection Agency shall conduct a study 

24 examining how, and under what circumstances, the 

25 environmental statutes for which the Environmental 


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1 Protection Agency has responsibility would apply to 

2 carbon dioxide injection and geologic sequestration 

3 activities. 

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

5 date of enactment of this Act, the Administrator 

6 shall submit to Congress a report describing the re7 sults of the study conducted under paragraph (1). 

8 SEC. 114. CARBON CAPTURE AND SEQUESTRATION DEM9 ONSTRATION AND EARLY DEPLOYMENT PRO10 GRAM. 

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

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

13 the Secretary of Energy. 

14 (2) DISTRIBUTION UTILITY.—The term ‘‘dis15 tribution utility’’ means an entity that distributes 

16 electricity directly to retail consumers under a legal, 

17 regulatory, or contractual obligation to do so. 

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

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

20 of the Federal Power Act (16 U.S.C. 796(22)). 

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

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

23 that is produced from the combustion of fossil fuels. 


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

2 means coal, petroleum, natural gas or any derivative 

3 of coal, petroleum, or natural gas. 

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

5 means the Carbon Storage Research Corporation es6 tablished in accordance with this section. 

7 (7) QUALIFIED INDUSTRY ORGANIZATION.—The 

8 term ‘‘qualified industry organization’’ means the 

9 Edison Electric Institute, the American Public 

10 Power Association, the National Rural Electric Co11 operative Association, a successor organization of 

12 such organizations, or a group of owners or opera13 tors of distribution utilities delivering fossil fuel14 based electricity who collectively represent at least 

15 20 percent of the volume of fossil fuel-based elec16 tricity delivered by distribution utilities to consumers 

17 in the United States. 

18 (8) RETAIL CONSUMER.—The term ‘‘retail con19 sumer’’ means an end-user of electricity. 

20 (b) CARBON STORAGE RESEARCH CORPORATION.— 

21 (1) ESTABLISHMENT.— 

22 (A) REFERENDUM.—Qualified industry or23 ganizations may conduct, at their own expense, 

24 a referendum among the owners or operators of 

25 distribution utilities delivering fossil fuel-based 


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1 electricity for the creation of a Carbon Storage 

2 Research Corporation. Such referendum shall 

3 be conducted by an independent auditing firm 

4 agreed to by the qualified industry organiza5 tions. Voting rights in such referendum shall be 

6 based on the quantity of fossil fuel-based elec7 tricity delivered to consumers in the previous 

8 calendar year or other representative period as 

9 determined by the Secretary pursuant to sub10 section (f). Upon approval of those persons rep11 resenting two-thirds of the total quantity of fos12 sil fuel-based electricity delivered to retail con13 sumers, the Corporation shall be established un14 less opposed by the State regulatory authorities 

15 pursuant to subparagraph (B). All distribution 

16 utilities voting in the referendum shall certify to 

17 the independent auditing firm the quantity of 

18 fossil fuel-based electricity represented by their 

19 vote. 

20 (B) STATE REGULATORY AUTHORITIES.— 

21 Upon its own motion or the petition of a quali22 fied industry organization, each State regu23 latory authority shall consider its support or op24 position to the creation of the Corporation 

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1 thorities may notify the independent auditing 

2 firm referred to in subparagraph (A) of their 

3 views on the creation of the Corporation within 

4 180 days after the date of enactment of this 

5 Act. If 40 percent or more of the State regu6 latory authorities submit to the independent au7 diting firm written notices of opposition, the 

8 Corporation shall not be established notwith9 standing the approval of the qualified industry 

10 organizations as provided in subparagraph (A). 

11 (2) TERMINATION.—The Corporation shall be 

12 authorized to collect assessments and conduct oper13 ations pursuant to this section for a 10-year period 

14 from the date 6 months after the date of enactment 

15 of this Act. After such 10-year period, the Corpora16 tion is no longer authorized to collect assessments 

17 and shall be dissolved on the date 15 years after 

18 such date of enactment, unless the period is ex19 tended by an Act of Congress. 

20 (3) GOVERNANCE.—The Corporation shall oper21 ate as a division or affiliate of the Electric Power 

22 Research Institute (referred to in this section as 

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

24 than 15 voting members responsible for its oper25 ations, including compliance with this section. EPRI, 


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1 in consultation with the Edison Electric Institute, 

2 the American Public Power Association and the Na3 tional Rural Electric Cooperative Association shall 

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

5 and (iii) of subparagraph (A) from among can6 didates recommended by those organizations. At 

7 least a majority of the Board members appointed by 

8 EPRI shall be representatives of distribution utilities 

9 subject to assessments under subsection (d). 

10 (A) MEMBERS.—The Board shall include 

11 at least one representative of each of the fol12 lowing: 

13 (i) Investor-owned utilities. 

14 (ii) Utilities owned by a State agency 

15 or a municipality. 

16 (iii) Rural electric cooperatives. 

17 (iv) Fossil fuel producers. 

18 (v) Non-profit environmental organi19 zations. 

20 (vi) Independent generators or whole21 sale power providers. 

22 (vii) Consumer groups. 

23 (B) NONVOTING MEMBERS.—The Board 

24 shall also include as additional non-voting Mem25 bers the Secretary of Energy or his designee 


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1 and 2 representatives of State regulatory au2 thorities as defined in section 3(17) of the Pub3 lic Utility Regulatory Policies Act of 1978 (16 

4 U.S.C. 2602(17)), each designated by the Na5 tional Association of State Regulatory Utility 

6 Commissioners from States that are not within 

7 the same transmission interconnection. 

8 (4) COMPENSATION.—Corporation Board mem9 bers shall receive no compensation for their services, 

10 nor shall Corporation Board members be reimbursed 

11 for expenses relating to their service. 

12 (5) TERMS.—Corporation Board members shall 

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

14 2 full consecutive terms. Members filling unexpired 

15 terms may serve not more than a total of 8 consecu16 tive years. Former members of the Corporation 

17 Board may be reappointed to the Corporation Board 

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

19 years. Initial appointments to the Corporation Board 

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

21 to provide for the selection of 3 members each year. 

22 (6) STATUS OF CORPORATION.—The Corpora23 tion shall not be considered to be an agency, depart24 ment, or instrumentality of the United States, and 

25 no officer or director or employee of the Corporation 


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1 shall be considered to be an officer or employee of 

2 the United States Government, for purposes of title 

3 5 or title 31 of the United States Code, or for any 

4 other purpose, and no funds of the Corporation shall 

5 be treated as public money for purposes of chapter 

6 33 of title 31, United States Code, or for any other 

7 purpose. 

8 (c) FUNCTIONS AND ADMINISTRATION OF THE COR9 PORATION.— 

10 (1) IN GENERAL.—The Corporation shall estab11 lish and administer a program to accelerate the com12 mercial availability of carbon dioxide capture and 

13 storage technologies and methods, including tech14 nologies which capture and store, or capture and 

15 convert, carbon dioxide. Under such program com16 petitively awarded grants, contracts, and financial 

17 assistance shall be provided and entered into with el18 igible entities. Except as provided in paragraph (8), 

19 the Corporation shall use all funds derived from as20 sessments under subsection (d) to issue grants and 

21 contracts to eligible entities. 

22 (2) PURPOSE.—The purposes of the grants, 

23 contracts, and assistance under this subsection shall 

24 be to support commercial-scale demonstrations of 

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1 ble of advancing the technologies to commercial 

2 readiness. Such projects should encompass a range 

3 of different coal and other fossil fuel varieties, be 

4 geographically diverse, involve diverse storage media, 

5 and employ capture or storage, or capture and con6 version, technologies potentially suitable either for 

7 new or for retrofit applications. The Corporation 

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

9 5 commercial-scale demonstration projects inte10 grating carbon capture and sequestration or conver11 sion technologies. 

12 (3) ELIGIBLE ENTITIES.—Entities eligible for 

13 grants, contracts or assistance under this subsection 

14 may include distribution utilities, electric utilities 

15 and other private entities, academic institutions, na16 tional laboratories, Federal research agencies, State 

17 research agencies, non-profit organizations, or con18 sortiums of 2 or more entities. Pilot-scale and simi19 lar small-scale projects are not eligible for support 

20 by the Corporation. Owners or developers of projects 

21 supported by the Corporation shall, where appro22 priate, share in the costs of such projects. 

23 (4) GRANTS FOR EARLY MOVERS.—Fifty per24 cent of the funds raised under this section shall be 

25 provided in the form of grants to electric utilities 


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

2 section, committed resources to deploy a large scale 

3 electricity generation unit with integrated carbon 

4 capture and sequestration or conversion applied to a 

5 substantial portion of the unit’s carbon dioxide emis6 sions. Grant funds shall be provided to defray costs 

7 incurred by such electricity utilities for at least 5 

8 such electricity generation units. 

9 (5) ADMINISTRATION.—The members of the 

10 Board of Directors of the Corporation shall elect a 

11 Chairman and other officers as necessary, may es12 tablish committees and subcommittees of the Cor13 poration, and shall adopt rules and bylaws for the 

14 conduct of business and the implementation of this 

15 section. The Board shall appoint an Executive Di16 rector and professional support staff who may be 

17 employees of the Electric Power Research Institute 

18 (EPRI). After consultation with the Technical Advi19 sory Committee established under subsection (j), the 

20 Secretary, and the Director of the National Energy 

21 Technology Laboratory to obtain advice and rec22 ommendations on plans, programs, and project selec23 tion criteria, the Board shall establish priorities for 

24 grants, contracts, and assistance; publish requests 

25 for proposals for grants, contracts and assistance; 


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1 award grants, contracts and assistance competi2 tively, on the basis of merit, after the establishment 

3 of procedures that provide for scientific peer review 

4 by the Technical Advisory Committee. The Board 

5 shall give preference to applications that reflect the 

6 best overall value and prospect for achieving the 

7 purposes of the section, such as those which dem8 onstrate an integrated approach for capture and 

9 storage or capture and conversion technologies. The 

10 Board members shall not participate in making 

11 grants or awards to entities with whom they are af12 filiated. 

13 (6) USES OF GRANTS, CONTRACTS, AND ASSIST14 ANCE.—A grant, contract, or other assistance pro15 vided under this subsection may be used to purchase 

16 carbon dioxide when needed to conduct tests of car17 bon dioxide storage sites, in the case of established 

18 projects that are storing carbon dioxide emissions, or 

19 for other purposes consistent with the purposes of 

20 this section. The Corporation shall make publicly 

21 available at no cost information learned as a result 

22 of projects which it supports financially. 

23 (7) INTELLECTUAL PROPERTY.—The Board 

24 shall establish policies regarding the ownership of in25 tellectual property developed as a result of CorporaVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 tion grants and other forms of technology support. 

2 Such policies shall encourage individual ingenuity 

3 and invention. 

4 (8) ADMINISTRATIVE EXPENSES.—Up to 5 per5 cent of the funds collected in any fiscal year under 

6 subsection (d) may be used for the administrative 

7 expenses of operating the Corporation (not including 

8 costs incurred in the determination and collection of 

9 the assessments pursuant to subsection (d)). 

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

11 each year, the Corporation, after consulting with the 

12 Technical Advisory Committee and the Secretary 

13 and the Director of the Department’s National En14 ergy Technology Laboratory and other interested 

15 parties to obtain advice and recommendations, shall 

16 publish for public review and comment its proposed 

17 plans, programs, project selection criteria, and 

18 projects to be funded by the Corporation for the 

19 next calendar year. The Corporation shall also pub20 lish for public review and comment a budget plan for 

21 the next calendar year, including the probable costs 

22 of all programs, projects, and contracts and a rec23 ommended rate of assessment sufficient to cover 

24 such costs. The Secretary may recommend program 

25 and activities the Secretary considers appropriate. 


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1 The Corporation shall include in the first publication 

2 it issues under this paragraph a strategic plan or 

3 roadmap for the achievement of the purposes of the 

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

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

6 keep minutes, books, and records that clearly reflect 

7 all of the acts and transactions of the Corporation 

8 and make public such information. The books of the 

9 Corporation shall be audited by a certified public ac10 countant at least once each fiscal year and at such 

11 other times as the Corporation may designate. Cop12 ies of each audit shall be provided to the Congress, 

13 all Corporation board members, all qualified indus14 try organizations, each State regulatory authority 

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

16 If the audit determines that the Corporation’s prac17 tices fail to meet generally accepted accounting prin18 ciples the assessment collection authority of the Cor19 poration under subsection (d) shall be suspended 

20 until a certified public accountant renders a subse21 quent opinion that the failure has been corrected. 

22 The Corporation shall make its books and records 

23 available for review by the Secretary or the Comp24 troller General of the United States. 


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1 (11) PUBLIC ACCESS.—The Corporation 

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

3 shall occur after at least 30 days advance public no4 tice. Meetings of the Board of Directors may be 

5 closed to the public where the agenda of such meet6 ings includes only confidential matters pertaining to 

7 project selection, the award of grants or contracts, 

8 personnel matter, or the receipt of legal advice. The 

9 minutes of all meetings of the Corporation shall be 

10 made available to and readily accessible by the pub11 lic. 

12 (12) ANNUAL REPORT.—Each year the Cor13 poration shall prepare and make publicly available a 

14 report which includes an identification and descrip15 tion of all programs and projects undertaken by the 

16 Corporation during the previous year. The report 

17 shall also detail the allocation or planned allocation 

18 of Corporation resources for each such program and 

19 project. The Corporation shall provide its annual re20 port to the Congress, the Secretary, each State regu21 latory authority, and upon request to the public. The 

22 Secretary shall, not less than 60 days after receiving 

23 such report, provide to the President and Congress 

24 a report assessing the progress of the Corporation in 

25 meeting the objectives of this section. 


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1 (d) ASSESSMENTS.— 

2 (1) AMOUNT.—(A) In all calendar years fol3 lowing its establishment, the Corporation shall col4 lect an assessment on distribution utilities for all 

5 fossil fuel-based electricity delivered directly to retail 

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

7 assessments shall reflect the relative carbon dioxide 

8 emission rates of different fossil fuel-based elec9 tricity, and initially shall be not less than the fol10 lowing amounts for coal, natural gas, and oil: 

Fuel type Rate of assessment 

per kilowatt hour 

Coal ................................................................... $0.00043 

Natural Gas ...................................................... $0.00022 

Oil ..................................................................... $0.00032. 

11 (B) The Corporation is authorized to adjust the 

12 assessments on fossil fuel-based electricity to reflect 

13 changes in the expected quantities of such electricity 

14 from different fuel types, such that the assessments 

15 generate not less than $1.0 billion and not more 

16 than $1.1 billion annually. The Corporation is au17 thorized to supplement assessments through addi18 tional financial commitments. 

19 (2) INVESTMENT OF FUNDS.—Pending dis20 bursement pursuant to a program, plan, or project, 

21 the Corporation may invest funds collected through 

22 assessments under this subsection, and any other 


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1 funds received by the Corporation, only in obliga2 tions of the United States or any agency thereof, in 

3 general obligations of any State or any political sub4 division thereof, in any interest-bearing account or 

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

6 the Federal Reserve System, or in obligations fully 

7 guaranteed as to principal and interest by the 

8 United States. 

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

10 Corporation does not disburse, dedicate or assign 75 

11 percent or more of the available proceeds of the as12 sessed fees in any calendar year 7 or more years fol13 lowing its establishment, due to an absence of quali14 fied projects or similar circumstances, it shall reim15 burse the remaining undedicated or unassigned bal16 ance of such fees, less administrative and other ex17 penses authorized by this section, to the distribution 

18 utilities upon which such fees were assessed, in pro19 portion to their collected assessments. 

20 (e) ERCOT.— 

21 (1) ASSESSMENT, COLLECTION, AND REMIT22 TANCE.—(A) Notwithstanding any other provision of 

23 this section, within ERCOT, the assessment pro24 vided for in subsection (d) shall be— 


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1 (i) levied directly on qualified scheduling 

2 entities, or their successor entities; 

3 (ii) charged consistent with other charges 

4 imposed on qualified scheduling entities as a fee 

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

6 (iii) collected and remitted by ERCOT to 

7 the Corporation in the amounts and in the 

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

9 (B) The assessment amounts referred to in sub10 paragraph (A) shall be— 

11 (i) determined by the amount and types of 

12 fossil fuel-based electricity delivered directly to 

13 all retail customers in the prior calendar year 

14 beginning with the year ending immediately 

15 prior to the period described in subsection 

16 (b)(1); and 

17 (ii) take into account the number of renew18 able energy credits retired by the load-serving 

19 entities represented by a qualified scheduling 

20 entity within the prior calendar year. 

21 (2) ADMINISTRATION EXPENSES.—Up to 1 per22 cent of the funds collected in any fiscal year by 

23 ERCOT under the provisions of this subsection may 

24 be used for the administrative expenses incurred in 


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1 the determination, collection and remittance of the 

2 assessments to the Corporation. 

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

4 annual audit pertaining to the administration of the 

5 provisions of this subsection to the Corporation. 

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

7 subsection: 

8 (A) The term ‘‘ERCOT’’ means the Elec9 tric Reliability Council of Texas. 

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

11 the meaning adopted by ERCOT Protocols and 

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

13 (C) The term ‘‘qualified scheduling enti14 ties’’ has the meaning adopted by ERCOT Pro15 tocols and in effect on the date of enactment of 

16 this Act. 

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

18 has the meaning as promulgated and adopted 

19 by the Public Utility Commission of Texas pur20 suant to section 39.904(b) of the Public Utility 

21 Regulatory Act of 1999, and in effect on the 

22 date of enactment of this Act. 

23 (f) DETERMINATION OF FOSSIL FUEL-BASED ELEC24 TRICITY DELIVERIES.— 

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


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1 (A) The assessments under subsection (d) 

2 are to be collected based on the amount of fossil 

3 fuel-based electricity delivered by each distribu4 tion utility. 

5 (B) Since many distribution utilities pur6 chase all or part of their retail consumer’s elec7 tricity needs from other entities, it may not be 

8 practical to determine the precise fuel mix for 

9 the power sold by each individual distribution 

10 utility. 

11 (C) It may be necessary to use average 

12 data, often on a regional basis with reference to 

13 Regional Transmission Organization (‘‘RTO’’) 

14 or NERC regions, to make the determinations 

15 necessary for making assessments. 

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

17 acting in close consultation with the Energy Infor18 mation Administration, shall issue for notice and 

19 comment a proposed rule to determine the level of 

20 fossil fuel electricity delivered to retail customers by 

21 each distribution utility in the United States during 

22 the most recent calendar year or other period deter23 mined to be most appropriate. Such proposed rule 

24 shall balance the need to be efficient, reasonably pre25 cise, and timely, taking into account the nature and 


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1 cost of data currently available and the nature of 

2 markets and regulation in effect in various regions 

3 of the country. Different methodologies may be ap4 plied in different regions if appropriate to obtain the 

5 best balance of such factors. 

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

7 date of enactment of this Act, and after opportunity 

8 for comment, the Secretary shall issue a final rule 

9 under this subsection for determining the level and 

10 type of fossil fuel-based electricity delivered to retail 

11 customers by each distribution utility in the United 

12 States during the appropriate period. In issuing 

13 such rule, the Secretary may consider opportunities 

14 and costs to develop new data sources in the future 

15 and issue recommendations for the Energy Informa16 tion Administration or other entities to collect such 

17 data. After notice and opportunity for comment the 

18 Secretary may, by rule, subsequently update and 

19 modify the methodology for making such determina20 tions. 

21 (4) ANNUAL DETERMINATIONS.—Pursuant to 

22 the final rule issued under paragraph (3), the Sec23 retary shall make annual determinations of the 

24 amounts and types for each such utility and publish 

25 such determinations in the Federal Register. Such 


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1 determinations shall be used to conduct the ref2 erendum under subsection (b) and by the Corpora3 tion in applying any assessment under this sub4 section. 

5 (5) REHEARING AND JUDICIAL REVIEW.—The 

6 owner or operator of any distribution utility that be7 lieves that the Secretary has misapplied the method8 ology in the final rule in determining the amount 

9 and types of fossil fuel electricity delivered by such 

10 distribution utility may seek rehearing of such deter11 mination within 30 days of publication of the deter12 mination in the Federal Register. The Secretary 

13 shall decide such rehearing petitions within 30 days. 

14 The Secretary’s determinations following rehearing 

15 shall be final and subject to judicial review in the 

16 United States Court of Appeals for the District of 

17 Columbia. 

18 (g) COMPLIANCE WITH CORPORATION ASSESS19 MENTS.—The Corporation may bring an action in the ap20 propriate court of the United States to compel compliance 

21 with an assessment levied by the Corporation under this 

22 section. A successful action for compliance under this sub23 section may also require payment by the defendant of the 

24 costs incurred by the Corporation in bringing such action. 


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

2 following establishment of the Corporation, the Comp3 troller General of the United States shall prepare an anal4 ysis, and report to Congress, assessing the Corporation’s 

5 activities, including project selection and methods of dis6 bursement of assessed fees, impacts on the prospects for 

7 commercialization of carbon capture and storage tech8 nologies, adequacy of funding, and administration of 

9 funds. The report shall also make such recommendations 

10 as may be appropriate in each of these areas. The Cor11 poration shall reimburse the Government Accountability 

12 Office for the costs associated with performing this mid13 course review. 

14 (i) RECOVERY OF COSTS.— 

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

16 transmission, delivery, or sales of electric energy are 

17 subject to any form of rate regulation shall not be 

18 denied the opportunity to recover the full amount of 

19 the prudently incurred costs associated with com20 plying with this section, consistent with applicable 

21 State or Federal law. 

22 (2) RATEPAYER REBATES.—Regulatory authori23 ties that approve cost recovery pursuant to para24 graph (1) may order rebates to ratepayers to the ex25 tent that distribution utilities are reimbursed 


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1 undedicated or unassigned balances pursuant to sub2 section (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 

9 members appointed by the Board from among aca10 demic institutions, national laboratories, independent 

11 research institutions, and other qualified institu12 tions. No member of the Committee shall be affili13 ated with EPRI or with any organization having 

14 members serving on the Board. At least one member 

15 of the Committee shall be appointed from among of16 ficers or employees of the Department of Energy 

17 recommended to the Board by the Secretary of En18 ergy. 

19 (3) CHAIRPERSON AND VICE CHAIRPERSON.— 

20 The Board shall designate one member of the Tech21 nical Advisory Committee to serve as Chairperson of 

22 the Committee and one to serve as Vice Chairperson 

23 of the Committee. 

24 (4) COMPENSATION.—The Board shall provide 

25 compensation to members of the Technical Advisory 


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1 Committee for travel and other incidental expenses 

2 and such other compensation as the Board deter3 mines to be necessary. 

4 (5) PURPOSE.—The Technical Advisory Com5 mittee shall provide independent assessments and 

6 technical evaluations, as well as make non-binding 

7 recommendations to the Board, concerning Corpora8 tion activities, including but not limited to the fol9 lowing: 

10 (A) Reviewing and evaluating the Corpora11 tion’s plans and budgets described in subsection 

12 (c)(8), as well as any other appropriate areas, 

13 which could include approaches to prioritizing 

14 technologies, appropriateness of engineering 

15 techniques, monitoring and verification tech16 nologies for storage, geological site selection, 

17 and cost control measures. 

18 (B) Making annual non-binding rec19 ommendations to the Board concerning any of 

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

21 well as what types of investments, scientific re22 search, or engineering practices would best fur23 ther to the goals of the Corporation. 

24 (6) PUBLIC AVAILABILITY.—All reports, evalua25 tions, and other materials of the Technical Advisory 


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1 Committee shall be made available to the public by 

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

3 Board. 

4 (k) LOBBYING RESTRICTIONS.—No funds collected 

5 by the Corporation shall be used in any manner for influ6 encing legislation or elections, except that the Corporation 

7 may recommend to the Secretary and the Congress 

8 changes in this section or other statutes that would fur9 ther the purposes of this section. 

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

11 shall ensure that entities receiving grants, contracts, or 

12 other financial support from the Corporation for the 

13 project activities authorized by this section are in compli14 ance with the Davis-Bacon Act (40 U.S.C. 276a—276a– 

15 5). 

16 SEC. 115. COMMERCIAL DEPLOYMENT OF CARBON CAP17 TURE AND SEQUESTRATION TECHNOLOGIES. 

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

19 date of enactment of this title, the Administrator shall 

20 promulgate regulations providing for the distribution of 

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

22 pursuant to the requirements of this section, to support 

23 the commercial deployment of carbon capture and seques24 tration technologies in both electric power generation and 

25 industrial operations. 


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

2 emission allowances under this section, the owner of a 

3 project must— 

4 (1) implement carbon capture and sequestration 

5 technology— 

6 (A) at an electric generating unit that— 

7 (i) has a nameplate capacity of 200 

8 megawatts or more; 

9 (ii) derives at least 50 percent of its 

10 annual fuel input from coal, petroleum 

11 coke, or any combination of these 2 fuels; 

12 and 

13 (iii) upon implementation of capture 

14 and sequestration technology, will capture 

15 and permanently sequester at least 50 per16 cent of the carbon dioxide, measured on an 

17 annual basis, that would be emitted by the 

18 unit absent capture and sequestration 

19 technology; or 

20 (B) at an industrial source that— 

21 (i) injects for sequestration not less 

22 than 50,000 tons per year of carbon diox23 ide; 

24 (ii) upon implementation, will capture 

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1 cent of the carbon dioxide produced by the 

2 source, measured on an annual basis, that 

3 would be emitted in the absence of capture 

4 and sequestration technology; and 

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

7 feedstock; 

8 (2) permanently sequester carbon dioxide at a 

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

11 pursuant to such requirements as the Administrator 

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

15 (3) meet all other applicable State and Federal 

16 permitting requirements; and 

17 (4) be located in the United States. 

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

20 (1) APPLICATION.—This subsection shall apply 

21 only to projects at the first 6 gigawatts of electric 

22 generating units, measured in cumulative generating 

23 capacity of such units. 

24 (2) DISTRIBUTION.—The Administrator shall 

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1 tion 782(a)(f) to each eligible project at an electric 

2 generating unit in a quantity equal to the quotient 

3 obtained by dividing— 

4 (A) the product obtained by multiplying— 

5 (i) the number of metric tons of car6 bon dioxide emissions avoided through cap7 ture and sequestration of emissions by the 

8 project, as determined pursuant to such 

9 methodology as the Administrator shall 

10 prescribe by regulation; and 

11 (ii) a bonus allowance value, pursuant 

12 to paragraph (3); by 

13 (B) the average fair market value of an 

14 emission allowance during the preceding year. 

15 (3) BONUS ALLOWANCE VALUES.— 

16 (A) For a generating unit achieving the 

17 capture and sequestration of 85 percent or 

18 more of the carbon dioxide that otherwise would 

19 be emitted by such unit, the bonus allowance 

20 value shall be $90. 

21 (B) The Administrator shall by regulation 

22 establish a bonus allowance value for each rate 

23 of lower capture and sequestration achieved by 

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

25 ton for a 50 percent rate and varying directly 


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1 with increasing rates of capture and sequestra2 tion up to $90 per ton for an 85 percent rate. 

3 (C) For a generating unit that achieves the 

4 capture and sequestration of at least 50 percent 

5 of the carbon dioxide that otherwise would be 

6 emitted by such unit by not later than January 

7 1, 2017, the otherwise applicable bonus allow8 ance value under this paragraph shall be in9 creased by $10, provided that the owner of such 

10 unit notifies the Administrator of its intent to 

11 achieve such rate of capture and sequestration 

12 by not later than January 1, 2012. 

13 (D) For a carbon capture and sequestra14 tion project sequestering in a geological forma15 tion for purposes of enhanced hydrocarbon re16 covery, the Administrator shall, by regulation, 

17 reduce the applicable bonus allowance value 

18 under this paragraph to reflect the lower net 

19 cost of the project when compared to sequestra20 tion into geological formations solely for pur21 poses of sequestration. 

22 (E) All monetary values in this section 

23 shall be adjusted for inflation. 

24 (d) PHASE II DISTRIBUTION TO ELECTRIC GENER25 ATING UNITS.— 


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1 (1) APPLICATION.—This subsection shall apply 

2 only to the distribution of emission allowances to 

3 carbon capture and sequestration projects at electric 

4 generating units after the capacity threshold identi5 fied in subsection (c)(1) is reached. 

6 (2) REGULATIONS.—Not later than 2 years 

7 prior to the date on which the capacity threshold 

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

9 reached, the Administrator shall promulgate regula10 tions to govern the distribution of emission allow11 ances to eligible projects under this subsection. 

12 (3) REVERSE AUCTIONS.— 

13 (A) IN GENERAL.—Except as provided in 

14 paragraph (4), the regulations promulgated 

15 under paragraph (2) shall provide for the dis16 tribution of emission allowances to eligible 

17 projects under this subsection through reverse 

18 auctions, which shall be held no less frequently 

19 than once each calendar year. The Adminis20 trator may establish a separate auction for each 

21 of no more than 5 different project categories, 

22 defined on the basis of coal type, capture tech23 nology, geological formation type, new unit 

24 versus retrofit application, such other factors as 

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1 bination thereof. The Administrator may estab2 lish appropriate minimum rates of capture and 

3 sequestration in implementing this paragraph. 

4 (B) AUCTION PROCESS.—At each reverse 

5 auction— 

6 (i) the Administrator shall solicit bids 

7 from eligible entities; 

8 (ii) eligible entities participating in 

9 the auction shall submit a bid including 

10 the desired level of carbon dioxide seques11 tration incentive per ton and the estimated 

12 quantity of carbon dioxide that the project 

13 will permanently sequester over 10 years; 

14 and 

15 (iii) the Administrator shall select 

16 bids, within each auction, for the seques17 tration amount submitted, beginning with 

18 the eligible entity submitting the bid for 

19 the lowest level of sequestration incentive 

20 on a per ton basis and meeting such other 

21 requirements as the Administrator may 

22 specify, until the amount of funds available 

23 for the reverse auction is committed. 

24 (C) FORM OF DISTRIBUTION.—The Ad25 ministrator shall provide deployment incentives 


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1 to eligible entities selected through a reverse 

2 auction under this paragraph pursuant to a for3 mula equivalent to that described in subsection 

4 (c)(2), except that the incentive level that is bid 

5 by the entity shall be substituted for the bonus 

6 allowance value. 

7 (4) ALTERNATIVE DISTRIBUTION METHOD.— 

8 (A) IN GENERAL.—If the Administrator 

9 determines that reverse auctions would not pro10 vide for efficient and cost-effective commercial 

11 deployment of carbon capture and sequestration 

12 technologies, the Administrator may instead, 

13 through regulations promulgated under para14 graph (2) or (5), prescribe a schedule for the 

15 award of bonus allowances to eligible projects 

16 under this subsection, in accord with the re17 quirements of this paragraph. 

18 (B) MULTIPLE TRANCHES.—The Adminis19 trator shall divide emission allowances available 

20 for distribution to eligible projects into a series 

21 of tranches, each supporting the deployment of 

22 a specified quantity of cumulative electric gen23 erating capacity utilizing carbon capture and 

24 sequestration technology, each of which shall 

25 not be greater than 6 gigawatts. 


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1 (C) METHOD OF DISTRIBUTION.—The Ad2 ministrator shall distribute emission allowances 

3 within each tranche, on a first-come, first4 served basis— 

5 (i) based on the date of full-scale op6 eration of capture and sequestration tech7 nology; and 

8 (ii) pursuant to a formula, similar to 

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

10 that the Administrator shall prescribe 

11 bonus allowance values different than those 

12 set forth in subsection (c)(2)), establishing 

13 the number of allowances to be distributed 

14 per ton of carbon dioxide permanently se15 questered by the project. 

16 (D) REQUIREMENTS.—For each tranche 

17 established pursuant to subparagraph (A), the 

18 Administrator shall establish a schedule for dis19 tributing emission allowances that— 

20 (i) is based on a sliding scale that 

21 provides higher bonus allowance values for 

22 projects achieving higher rates of capture 

23 and sequestration; 

24 (ii) for each capture and sequestration 

25 rate, establishes a bonus allowance value 


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1 that is lower than that established for such 

2 rate in the previous tranche (or, in the 

3 case of the first tranche, than that estab4 lished for such rate under subsection 

5 (c)(1)); and 

6 (iii) may establish different bonus al7 lowance levels for no more than 5 different 

8 project categories, defined by coal type, 

9 capture technology, geological formation 

10 type, new unit versus retrofit application, 

11 such other factors as the Administrator 

12 may prescribe, or any combination thereof. 

13 (E) CRITERIA FOR ESTABLISHING BONUS

14 ALLOWANCE VALUES.—In setting bonus allow15 ance values under this paragraph, the Adminis16 trator shall seek to cover no more than the rea17 sonable incremental capital and operating costs 

18 of a project that are attributable to implemen19 tation of carbon capture, transportation, and 

20 sequestration technologies, taking into ac21 count— 

22 (i) the reduced cost of compliance 

23 with section 722 of this Act; 

24 (ii) the reduced cost associated with 

25 sequestering in a geological formation for 


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1 purposes of enhanced hydrocarbon recovery 

2 when compared to sequestration into geo3 logical formations solely for purposes of se4 questration; 

5 (iii) the relevant factors defining the 

6 project category; and 

7 (iv) such other factors as the Admin8 istrator determines are appropriate. 

9 (5) REVISION OF REGULATIONS.—The Adminis10 trator shall review, and as appropriate revise, the 

11 applicable regulations under this subsection no less 

12 frequently than every 8 years. 

13 (e) LIMITS FOR CERTAIN ELECTRIC GENERATING

14 UNITS.— 

15 (1) DEFINITIONS.—For purposes of this sub16 section, the terms ‘‘covered EGU’’ and ‘‘initially per17 mitted’’ shall have the meaning given those terms in 

18 section 812 of this Act. 

19 (2) COVERED EGUS INITIALLY PERMITTED

20 FROM 2009 THROUGH 2015.—For a covered EGU 

21 that is initially permitted on or after January 1, 

22 2009, and before January 1, 2015, the Adminis23 trator shall reduce the quantity of emission allow24 ances that such covered EGU would otherwise be eliVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00085 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 gible to receive under this section by the product 

2 of— 

3 (A) 20 percent; and 

4 (B) the number of years between— 

5 (i) the earlier of January 1, 2020, or 

6 the date that is 5 years after the com7 mencement of operation of such covered 

8 EGU; and 

9 (ii) the first year that such covered 

10 EGU achieves (and thereafter maintains) 

11 the capture and permanent sequestration 

12 of at least 50 percent of the carbon diox13 ide, measured on an annual basis, that 

14 such covered EGU would emit in the ab15 sence of carbon capture and sequestration 

16 technology. 

17 (3) COVERED EGUS INITIALLY PERMITTED

18 FROM 2015 THROUGH 2020.—A covered EGU that is 

19 initially permitted on or after January 1, 2015, and 

20 before January 1, 2020, shall be ineligible to receive 

21 emission allowances pursuant to this section if such 

22 unit, upon commencement of operations or there23 after, does not achieve and maintain the capture and 

24 permanent sequestration of at least 50 percent of 

25 the carbon dioxide, measured on an annual basis, 


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1 that such covered EGU would emit in the absence 

2 of capture and sequestration technology. 

3 (f) INDUSTRIAL SOURCES.— 

4 (1) ALLOWANCES.—The Administrator may 

5 distribute not more than 15 percent of the allow6 ances allocated under section 782(a)(f) for any vin7 tage year to eligible industrial sources to support the 

8 commercial-scale deployment of carbon capture and 

9 sequestration technologies at such sources. 

10 (2) DISTRIBUTION.—The Administrator shall, 

11 by regulation, prescribe requirements for the dis12 tribution of emission allowances to industrial sources 

13 under this subsection, based on a bonus allowance 

14 formula that awards allowances to qualifying 

15 projects on the basis of tons of carbon dioxide cap16 tured and permanently sequestered. The Adminis17 trator may provide for the distribution of emission 

18 allowances pursuant to— 

19 (A) a reverse auction method, similar to 

20 that described under subsection (d)(3), includ21 ing the use of separate auctions for different 

22 project categories; or 

23 (B) an incentive schedule, similar to that 

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

25 ensure that incentives are set so as to satisfy 


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1 the requirement described in subsection 

2 (d)(4)(E). 

3 (3) REVISION OF REGULATIONS.—The Adminis4 trator shall review, and as appropriate revise, the 

5 applicable regulations under this subsection no less 

6 frequently than every 8 years. 

7 (g) LIMITATIONS.—A qualifying project may receive 

8 annual emission allowances under this section only for the 

9 first 10 years of operation. No greater than 72 gigawatts 

10 of total cumulative generating capacity (including indus11 trial applications, measured by such equivalent metric as 

12 the Administrator may designate) may receive emission al13 lowances under this section. Upon reaching the limit de14 scribed in the preceding sentence, the Administrator shall 

15 auction, pursuant to section 791, any emission allowances 

16 that are allocated for carbon capture and sequestration de17 ployment under section 782(a)(f) and are not yet obligated 

18 under this section. 

19 (h) EXHAUSTION OF ACCOUNT AND ANNUAL ROLL20 OVER OF SURPLUS ALLOWANCES.— 

21 (1) In distributing bonus allowances under this 

22 subsection, the Administrator shall ensure that 

23 qualifying projects receiving allowances receive dis24 tributions for 10 years. 


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1 (2) If the Administrator determines that the al2 lowances allocated under section 782(a)(f) with a 

3 vintage year that matches the year of distribution 

4 will be exhausted once the estimated full 10-year dis5 tributions will be provided to current eligible partici6 pants, the Administrator shall provide to new eligible 

7 projects allowances from vintage years after the year 

8 of the distribution. 

9 (i) DAVIS-BACON COMPLIANCE.—All laborers and 

10 mechanics employed on projects funded directly by or as11 sisted in whole or in part by this section through the use 

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

13 than those prevailing on projects of a character similar 

14 in the locality as determined by the Secretary of Labor 

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

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

17 to the labor standards specified in this section, the Sec18 retary of Labor shall have the authority and functions set 

19 forth in Reorganization Plan Numbered 14 of 1950 (64 

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

21 United States Code. 


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1 SEC. 116. PERFORMANCE STANDARDS FOR COAL-FUELED 

2 POWER PLANTS. 

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

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

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

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

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

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

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

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

14 any combination of these fuels. 

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

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

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

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

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

25 or challenges shall not affect the date on which a 


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1 covered EGU is considered to be initially permitted 

2 under this paragraph. 

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

5 an emission limit that is a 65 percent reduction in emis6 sions of the carbon dioxide produced by the unit, as 

7 measured on an annual basis, or meet such more stringent 

8 standard as the Administrator may establish pursuant to 

9 subsection (c). In determining compliance with this sub10 section, the Administrator shall assume an energy penalty 

11 of the carbon dioxide capture system of no greater than 

12 15 percent. 

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

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

15 the applicable compliance date established under this 

16 paragraph, shall achieve an emission limit that is a 50 

17 percent reduction in emissions of the carbon dioxide pro18 duced by the unit, as measured on an annual basis. In 

19 determining compliance with this subsection, the Adminis20 trator shall assume an energy penalty of the carbon diox21 ide capture system of no greater than 15 percent. Compli22 ance with the requirement set forth in this paragraph shall 

23 be required by the earliest of the following: 

24 ‘‘(A) Four years after the date the Adminis25 trator issues a determination that there are in comVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00091 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 mercial operation in the United States electric gen2 erating units equipped with carbon capture and se3 questration technology that, in the aggregate— 

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

5 nameplate generating capacity of which— 

6 ‘‘(I) at least 3 gigawatts must be elec7 tric generating units; and 

8 ‘‘(II) up to 1 gigawatt may be indus9 trial applications, for which capture and 

10 sequestration of 3 million tons of carbon 

11 dioxide per year on an aggregate 

12 annualized basis shall be considered equiv13 alent to 1 gigawatt; 

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

15 units, each with a nameplate generating capac16 ity of 250 megawatts or greater, that inject car17 bon dioxide into geologic formations other than 

18 oil and gas fields; and 

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

20 aggregate at least 12 million tons of carbon di21 oxide per year, calculated on an aggregate 

22 annualized basis. 

23 ‘‘(B) January 1, 2025. 

24 ‘‘(3) If the deadline for compliance with paragraph 

25 (2) is January 1, 2025, the Administrator may extend the 


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

2 months if the Administrator makes a determination, based 

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

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

5 standard by the deadline. The owner or operator must 

6 submit a request for such an extension by no later than 

7 January 1, 2022, and the Administrator shall provide for 

8 public notice and comment on the extension request. 

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

10 later than 2025 and at 5-year intervals thereafter, the Ad11 ministrator shall review the standards for new covered 

12 EGUs under this section and shall, by rule, reduce the 

13 maximum carbon dioxide emission rate for new covered 

14 EGUs to a rate which reflects the degree of emission limi15 tation achievable through the application of the best sys16 tem of emission reduction which (taking into account the 

17 cost of achieving such reduction and any nonair quality 

18 health and environmental impact and energy require19 ments) the Administrator determines has been adequately 

20 demonstrated.’’. 

21 Subtitle C—Clean Transportation 

22 SEC. 121. ELECTRIC VEHICLE INFRASTRUCTURE. 

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

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

25 2621(d)) is amended by adding at the end the following: 


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1 ‘‘(20) PLUG-IN ELECTRIC DRIVE VEHICLE IN2 FRASTRUCTURE.— 

3 ‘‘(A) UTILITY PLAN FOR INFRASTRUC4 TURE.—Each electric utility shall develop a 

5 plan to support the use of plug-in electric drive 

6 vehicles, including heavy-duty hybrid electric ve7 hicles. The plan may provide for deployment of 

8 electrical charging stations in public or private 

9 locations, including street parking, parking ga10 rages, parking lots, homes, gas stations, and 

11 highway rest stops. Any such plan may also in12 clude— 

13 ‘‘(i) battery exchange, fast charging 

14 infrastructure and other services; 

15 ‘‘(ii) triggers for infrastructure de16 ployment based upon market penetration 

17 of plug-in electric drive vehicles; and 

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

19 determines necessary to support plug-in 

20 electric drive vehicles. 

21 Each plan under this paragraph shall provide 

22 for the deployment of the charging infrastruc23 ture or other infrastructure necessary to ade24 quately support the use of plug-in electric drive 

25 vehicles. 


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1 ‘‘(B) SUPPORT REQUIREMENTS.—Each 

2 State regulatory authority (in the case of each 

3 electric utility for which it has ratemaking au4 thority) and each utility (in the case of a non5 regulated utility) shall— 

6 ‘‘(i) require that charging infrastruc7 ture deployed is interoperable with prod8 ucts of all auto manufacturers to the ex9 tent possible; and 

10 ‘‘(ii) consider adopting minimum re11 quirements for deployment of electrical 

12 charging infrastructure and other appro13 priate requirements necessary to support 

14 the use of plug-in electric drive vehicles. 

15 ‘‘(C) COST RECOVERY.—Each State regu16 latory authority (in the case of each electric 

17 utility for which it has ratemaking authority) 

18 and each utility (in the case of a nonregulated 

19 utility) shall consider whether, and to what ex20 tent, to allow cost recovery for plans and imple21 mentation of plans. 

22 ‘‘(D) SMART GRID INTEGRATION.—The 

23 State regulatory authority (in the case of each 

24 electric utility for which it has ratemaking au25 thority) and each utility (in the case of a nonVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00095 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 regulated utility) shall, in accordance with regu2 lations issued by the Federal Energy Regu3 latory Commission pursuant to section 1305(d) 

4 of the Energy Independence and Security Act 

5 of 2007— 

6 ‘‘(i) establish any appropriate proto7 cols and standards for integrating plug-in 

8 electric drive vehicles into an electrical dis9 tribution system, including Smart Grid 

10 systems and devices as described in title 

11 XIII of the Energy Independence and Se12 curity Act of 2007; 

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

14 the ability for each plug-in electric drive 

15 vehicle to be identified individually and to 

16 be associated with its owner’s electric util17 ity account, regardless of the location that 

18 the vehicle is plugged in, for purposes of 

19 appropriate billing for any electricity re20 quired to charge the vehicle’s batteries as 

21 well as any crediting for electricity pro22 vided to the electric utility from the vehi23 cle’s batteries; and 

24 ‘‘(iii) review the determination made 

25 in response to section 1252 of the Energy 


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1 Policy Act of 2005 in light of this section, 

2 including whether time-of-use pricing 

3 should be employed to enable the use of 

4 plug-in electric drive vehicles to contribute 

5 to meeting peak-load and ancillary service 

6 power needs.’’. 

7 (b) COMPLIANCE.— 

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

9 Public Utility Regulatory Policies Act of 1978 (16 

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

11 at the end thereof: 

12 ‘‘(7)(A) Not later than 3 years after the date 

13 of enactment of this paragraph, each State regu14 latory authority (with respect to each electric utility 

15 for which it has ratemaking authority) and each 

16 nonregulated utility shall commence the consider17 ation referred to in section 111, or set a hearing 

18 date for consideration, with respect to the standard 

19 established by paragraph (20) of section 111(d). 

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

21 enactment of the this paragraph, each State regu22 latory authority (with respect to each electric utility 

23 for which it has ratemaking authority), and each 

24 nonregulated electric utility, shall complete the con25 sideration, and shall make the determination, reVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00097 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 ferred to in section 111 with respect to the standard 

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

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

4 the Public Utility Regulatory Policies Act of 1978 

5 (16 U.S.C. 2622(c)) is amended by adding the fol6 lowing at the end: ‘‘In the case of the standards es7 tablished by paragraph (20) of section 111(d), the 

8 reference contained in this subsection to the date of 

9 enactment of this Act shall be deemed to be a ref10 erence to the date of enactment of such paragraph.’’. 

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

12 the Public Utility Regulatory Policies Act of 1978 

13 (16 U.S.C. 2622(d)) is amended by striking ‘‘(19)’’ 

14 and inserting ‘‘(20)’’ before ‘‘of section 111(d)’’. 

15 SEC. 122. LARGE-SCALE VEHICLE ELECTRIFICATION PRO16 GRAM. 

17 (a) DEPLOYMENT PROGRAM.—The Secretary of En18 ergy shall establish a program to deploy and integrate 

19 plug-in electric drive vehicles into the electricity grid in 

20 multiple regions. In carrying out the program, the Sec21 retary may provide financial assistance described under 

22 subsection (d), consistent with the goals under subsection 

23 (b). The Secretary shall select regions based upon applica24 tions for assistance received pursuant to subsection (c). 


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1 (b) GOALS.—The goals of the program established 

2 pursuant to subsection (a) shall be— 

3 (1) to demonstrate the viability of a vehicle4 based transportation system that is not overly de5 pendent on petroleum as a fuel and contributes to 

6 lower carbon emissions than a system based on con7 ventional vehicles; 

8 (2) to facilitate the integration of advanced ve9 hicle technologies into electricity distribution areas 

10 to improve system performance and reliability; 

11 (3) to demonstrate the potential benefits of co12 ordinated investments in vehicle electrification on 

13 personal mobility and a regional grid; 

14 (4) to demonstrate protocols and standards that 

15 facilitate vehicle integration into the grid; and 

16 (5) to investigate differences in each region and 

17 regulatory environment regarding best practices in 

18 implementing vehicle electrification. 

19 (c) APPLICATIONS.—Any State, Indian tribe, or local 

20 government (or group of State, Indian tribe, or local gov21 ernments) may apply to the Secretary of Energy for finan22 cial assistance in furthering the regional deployment and 

23 integration into the electricity grid of plug-in electric drive 

24 vehicles. Such applications may be jointly sponsored by 

25 electric utilities, automobile manufacturers, technology 


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1 providers, car sharing companies or organizations, or 

2 other persons or entities. 

3 (d) USE OF FUNDS.—Pursuant to applications re4 ceived under subsection (c), the Secretary may make fi5 nancial assistance available to any applicant or joint spon6 sor of the application to be used for any of the following: 

7 (1) Assisting persons located in the regional de8 ployment area, including fleet owners, in the pur9 chase of new plug-in electric drive vehicles by offset10 ting in whole or in part the incremental cost of such 

11 vehicles above the cost of comparable conventionally 

12 fueled vehicles. 

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

14 vehicles by funding projects for the deployment of 

15 any of the following: 

16 (A) Electrical charging infrastructure for 

17 plug-in electric drive vehicles, including battery 

18 exchange, fast charging infrastructure, and 

19 other services, in public or private locations, in20 cluding street parking, parking garages, park21 ing lots, homes, gas stations, and highway rest 

22 stops. 

23 (B) Smart Grid equipment and infrastruc24 ture, as described in title XIII of the Energy 

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1 cilitate the charging and integration of plug-in 

2 electric drive vehicles. 

3 (3) Such other projects as the Secretary deter4 mines appropriate to support the large-scale deploy5 ment of plug-in electric drive vehicles in regional de6 ployment areas. 

7 (e) PROGRAM REQUIREMENTS.—The Secretary, in 

8 consultation with the Administrator and the Secretary of 

9 Transportation, shall determine design elements and re10 quirements of the program established pursuant to sub11 section (a), including— 

12 (1) the type of financial mechanism with which 

13 to provide financial assistance; 

14 (2) criteria for evaluating applications sub15 mitted under subsection (c), including the antici16 pated ability to promote deployment and market 

17 penetration of vehicles that are less dependent on 

18 petroleum as fuel source; and 

19 (3) reporting requirements for entities that re20 ceive financial assistance under this section, includ21 ing a comprehensive set of performance data charac22 terizing the results of the deployment program. 

23 (f) INFORMATION CLEARINGHOUSE.—The Secretary 

24 shall, as part of the program established pursuant to sub25 section (a), collect and make available to the public inforVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00101 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 mation regarding the cost, performance, and other tech2 nical data regarding the deployment and integration of 

3 plug-in electric drive vehicles. 

4 (g) AUTHORIZATION.—There are authorized to be ap5 propriated to carry out this section such sums as may be 

6 necessary. 

7 SEC. 123. PLUG-IN ELECTRIC DRIVE VEHICLE MANUFAC8 TURING. 

9 (a) VEHICLE MANUFACTURING ASSISTANCE PRO10 GRAM.—The Secretary of Energy shall establish a pro11 gram to provide financial assistance to automobile manu12 facturers to facilitate the manufacture of plug-in electric 

13 drive vehicles, as defined in section 131(a)(5) of the En14 ergy Independence and Security Act of 2007, that are de15 veloped and produced in the United States. 

16 (b) FINANCIAL ASSISTANCE.—The Secretary of En17 ergy may provide financial assistance to an automobile 

18 manufacturer under the program established pursuant to 

19 subsection (a) for— 

20 (1) the reconstruction or retooling of facilities 

21 for the manufacture of plug-in electric drive vehicles 

22 that are developed and produced in the United 

23 States; and 

24 (2) if appropriate, the purchase of domestically 

25 produced vehicle batteries to be used in the manuVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00102 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 facture of vehicles manufactured pursuant to para2 graph (1). 

3 (c) REQUIREMENTS.—The Secretary may provide fi4 nancial assistance under subsection (b) to an automobile 

5 manufacturer if— 

6 (1) in the case of a reconstruction or retooling 

7 described under subsection (b)(1), without financial 

8 assistance the automobile manufacturer is not able 

9 to reasonably finance the reconstruction or retooling 

10 of a facility; or 

11 (2) in the case of battery purchases described 

12 under subsection (b)(2), without financial assistance, 

13 the automobile manufacturer is not able to reason14 ably finance the purchase of such batteries. 

15 (d) COORDINATION WITH REGIONAL DEPLOY16 MENT.—The Secretary may provide financial assistance 

17 under subsection (b) in conjunction with the award of fi18 nancial assistance under the large scale vehicle electrifica19 tion program established pursuant to section 122 of this 

20 Act. 

21 (e) PROGRAM REQUIREMENTS.—The Secretary shall 

22 determine design elements and requirements of the pro23 gram established pursuant to subsection (a), including— 

24 (1) the type of financial mechanism with which 

25 to provide financial assistance; 


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1 (2) criteria, in addition to the criteria described 

2 under subsection (f), for evaluating applications for 

3 financial assistance; and 

4 (3) reporting requirements for automobile man5 ufacturers that receive financial assistance under 

6 this section. 

7 (f) 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 (g) REPORTS.—The Secretary shall annually submit 

14 to Congress a report on the program established pursuant 

15 to this section. 

16 (h) AUTHORIZATION OF APPROPRIATIONS.—There 

17 are authorized to be appropriated such sums as are nec18 essary 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 


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1 2007, except that for purposes of this section, the 

2 average base year as described section 136(a)(1)(C) 

3 shall be the following: 

4 (A) in each of the years 2012 through 

5 2016, the average base year shall be model year 

6 2009; and 

7 (B) in 2017, the Administrator shall, not8 withstanding section 136(a)(1)(C), determine 

9 an appropriate baseline based on technological 

10 and economic feasibility. 

11 (2) PLUG-IN ELECTRIC DRIVE VEHICLE.—The 

12 term ‘‘plug-in electric drive vehicle’’ shall have the 

13 definition of such term in section 131 of the Energy 

14 Independence and Security Act of 2007. 

15 (b) DISTRIBUTION OF ALLOWANCES.—The Adminis16 trator shall, in accordance with this section, distribute al17 lowances allocated pursuant to section 782(i) of the Clean 

18 Air Act not later than October 31 of 2012 and each cal19 endar year thereafter through 2025. 

20 (c) PLUG-IN ELECTRIC DRIVE VEHICLE MANUFAC21 TURING AND DEPLOYMENT.— 

22 (1) IN GENERAL.—The Administrator shall, at 

23 the direction of the Secretary of Energy, provide al24 lowances allocated pursuant to section ø782(i)¿ to 


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1 applicants, joint sponsors and automobile manufac2 turers pursuant to sections 122 and 123 of this Act. 

3 (2) ANNUAL AMOUNT.—In each of the years 

4 2012 through 2017, one-quarter of the portion of 

5 the 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 

11 available to carry out section 123. 

12 (3) PREFERENCE.—In directing the provision 

13 of allowances under this subsection, the Secretary 

14 shall give preference to applications under section 

15 122(c) that are jointly sponsored by one or more 

16 automobile manufacturers. 

17 (4) MULTI-YEAR COMMITMENTS.—The Admin18 istrator shall commit to providing allowances to an 

19 applicant, joint sponsor or automobile manufacturer 

20 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 allowances will be available for a 

6 multi-year commitment; 

7 (D) the Secretary of Energy determines 

8 that a multi-year commitment for such applica9 tion will advance the goals of section 122 or 

10 123; and 

11 (E) the Secretary of Energy directs the 

12 Administrator to make a multi-year commit13 ment. 

14 (5) INSUFFICIENT APPLICATIONS.—If, in any 

15 year, allowances available under paragraph (2) can16 not be provided because of insufficient numbers of 

17 submitted applications that meet the criteria for 

18 support established by the Secretary of Energy 

19 under sections 122 or 123 of this Act, the remaining 

20 allowances shall be distributed according to sub21 section (d). 

22 (d) ADVANCED TECHNOLOGY VEHICLES.— 

23 (1) IN GENERAL.—The Administrator shall, at 

24 the direction of the Secretary of Energy, provide any 

25 allowances allocated pursuant to section 782(i) of 


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1 the Clean Air Act that are not provided under sub2 section (c) to automobile manufacturers and compo3 nent suppliers to pay not more than 30 percent of 

4 the cost of— 

5 (A) reequipping, expanding, or establishing 

6 a manufacturing facility in the United States to 

7 produce— 

8 (i) qualifying advanced technology ve9 hicles; or 

10 (ii) qualifying components; and 

11 (B) engineering integration performed in 

12 the United States of qualifying vehicles and 

13 qualifying components. 

14 (2) PREFERENCE.—In directing the provision 

15 of allowances under this subsection during the years 

16 2012 through 2017, the Secretary shall give pref17 erence to applications for projects that save the 

18 maximum number of gallons per vehicle. 

19 Subtitle D—State Energy and Envi20 ronment Development Accounts 

21 SEC. 131. ESTABLISHMENT OF SEED ACCOUNTS. 

22 (a) DEFINITIONS.—In this section: 

23 (1) SEED ACCOUNT.—The term ‘‘SEED Ac24 count’’ means a State Energy and Environment DeVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00108 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 velopment Account established pursuant to this sec2 tion. 

3 (2) STATE ENERGY OFFICE.—The term ‘‘State 

4 Energy Office’’ means a State entity eligible for 

5 grants under part D of title III of the Energy Policy 

6 and Conservation Act (42 U.S.C. 6321 et seq.). 

7 (b) ESTABLISHMENT OF PROGRAM.—The Adminis8 trator shall establish a program under which a State, 

9 through its State Energy Office or other State agency des10 ignated by the State, may create a State Energy and Envi11 ronment Development Account. 

12 (c) PURPOSE.—The purpose of each SEED Account 

13 is to serve as a common State-level repository for man14 aging and accounting for emission allowances provided to 

15 States designated for renewable energy and energy effi16 ciency purposes. 

17 (d) REGULATIONS.—Not later than one year after the 

18 date of enactment of this Act, the Administrator shall pro19 mulgate regulations to carry out this section, including 

20 regulations— 

21 (1) to ensure that each State operates its 

22 SEED Account and any subaccounts thereof effi23 ciently and in accordance with this Act and applica24 ble State and Federal laws; 

25 (2) to prevent waste, fraud, and abuse; 


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1 (3) to indicate the emission allowances that 

2 may be deposited in a State’s SEED Account pend3 ing distribution or use; 

4 (4) to indicate the programs and objectives au5 thorized by Federal law for which emission allow6 ances in a SEED Account may be distributed or 

7 used; 

8 (5) to identify the forms of financial assistance 

9 and incentives that States may provide through dis10 tribution or use of SEED Accounts; and 

11 (6) to prescribe the form and content of reports 

12 that the States are required to submit under this 

13 section on the use of SEED Accounts. 

14 (e) OPERATION.— 

15 (1) DEPOSITS.— 

16 (A) IN GENERAL.—Except as required pur17 suant to subparagraph (B), a State shall de18 posit into its SEED Account all allowances re19 ceived from the Administrator for renewable en20 ergy and energy efficiency purposes, pursuant 

21 to this Act. 

22 (B) A State may create a financial account 

23 associated with its SEED Account to deposit, 

24 retain, and manage any proceeds of any sale of 

25 any allowance provided pursuant to this Act 


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1 pending expenditure or disbursement of those 

2 proceeds for purposes permitted under this sec3 tion. The funds in such an account shall not be 

4 commingled with other funds not derived from 

5 the sale of allowances provided to the State; 

6 however, loans made by the State from such 

7 funds pursuant to paragraph (2)(C)(i) may be 

8 repaid into such a financial account, including 

9 any interest charged. 

10 (2) WITHDRAWALS.— 

11 (A) IN GENERAL.—All allowances distrib12 uted or withdrawn from SEED Accounts, in13 cluding the proceeds of any sale or such allow14 ances, shall support renewable energy and en15 ergy efficiency programs authorized or approved 

16 by the Federal Government. 

17 (B) DEDICATED ALLOWANCES.—Allow18 ances deposited in a SEED Account that are 

19 required by law to be used for specific purposes 

20 for a specified period shall be used according to 

21 those requirements during that period. 

22 (C) UNDEDICATED ALLOWANCES.—To the 

23 extent that allowances deposited in a SEED 

24 Account are not required by law to be used for 

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1 scribed in subparagraph (B), such allowances or 

2 the proceeds of their sale may be used for any 

3 of the following purposes: 

4 (i) LOANS.—Loans of allowances, or 

5 the proceeds from the sale of allowances, 

6 may be provided, interest on commercial 

7 loans may be subsidized at an interest rate 

8 as low as zero, and other credit support 

9 may be provided to support programs au10 thorized to use SEED Account allowance 

11 value or any other renewable energy or en12 ergy efficiency purpose authorized or ap13 proved by the Federal Government. 

14 (ii) GRANTS.—Grants of allowances or 

15 the proceeds of their sale may be provided 

16 to support programs authorized to use 

17 SEED Account allowance value or any 

18 other renewable energy or energy efficiency 

19 purpose authorized or approved by the 

20 Federal Government. 

21 (iii) OTHER FORMS OF SUPPORT.—Al22 lowances or the proceeds of the sale of al23 lowances may be provided for other forms 

24 of support for programs authorized to use 

25 SEED Account allowance value or any 


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1 other renewable energy or energy efficiency 

2 purpose authorized or approved by the 

3 Federal Government. 

4 (iv) ADMINISTRATIVE COSTS.—Except 

5 to the extent provided in Federal law au6 thorizing or allocating allowances deposited 

7 in a SEED Account, not more than 5 per8 cent of the allowance value in a SEED Ac9 count in any year may be used to cover ad10 ministrative expenses of the SEED Ac11 count. 

12 (D) SUBACCOUNTS.—A State may create 

13 and maintain subaccounts for local governments 

14 that request such subaccounts to hold allow15 ances distributed to local governments for re16 newable energy or energy efficiency programs 

17 authorized or approved by the Federal Govern18 ment. 

19 (E) INTENDED USE PLANS.— 

20 (i) IN GENERAL.—After providing for 

21 public review and comment, each State ad22 ministering a SEED Account shall annu23 ally prepare a plan that identifies the in24 tended uses of the allowances or proceeds 


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1 from the sale of allowances in its SEED 

2 Account. 

3 (ii) CONTENTS.—An intended use 

4 plan shall include— 

5 (I) a list of the projects or pro6 grams for which withdrawals from the 

7 SEED Account are intended in the 

8 next fiscal year that begins after the 

9 date of the plan, including a descrip10 tion of each project; 

11 (II) the relationship of each of 

12 the projects or programs to an identi13 fied Federal purpose authorized by 

14 this Act, or any other Federal statute; 

15 (III) the expected terms of use of 

16 allowance value to provide assistance; 

17 (IV) the criteria and methods es18 tablished for the distribution of allow19 ances or allowance value; 

20 (V) a description of the equiva21 lent financial value and status of the 

22 SEED Account; and 

23 (VI) a statement of the mid-term 

24 and long-term goals of the State for 

25 use of its SEED Account. 


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1 (3) ACCOUNTABILITY AND TRANSPARENCY.— 

2 (A) CONTROLS AND PROCEDURES.—Any 

3 State that has established a SEED Account 

4 shall establish fiscal controls and recordkeeping 

5 and accounting procedures for the SEED Ac6 count sufficient to ensure proper accounting 

7 during appropriate accounting periods for de8 posits into the SEED Account, withdrawals 

9 from the SEED Account, and SEED Account 

10 balances, including any subaccounts or related 

11 financial accounts. Such controls and proce12 dures shall conform to generally accepted gov13 ernment accounting principles. Any State that 

14 has established a SEED Account shall retain 

15 records for a period of at least 5 years. 

16 (B) AUDITS.—Any State that has estab17 lished a SEED Account shall have an annual 

18 audit conducted of the SEED Account by an 

19 independent public accountant in accordance 

20 with generally accepted auditing standards, and 

21 shall transmit the results of that audit to the 

22 Administrator. 

23 (C) STATE REPORT.—Each State admin24 istering a SEED Account shall make publicly 

25 available and submit to the Secretary a report 


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1 every 2 years on its activities related to its 

2 SEED Account. 

3 (D) PUBLIC INFORMATION.—Any— 

4 (i) controls and procedures established 

5 under subparagraph (A); and 

6 (ii) information obtained through au7 dits conducted under subparagraph (B), 

8 except to the extent that it would be pro9 tected from disclosure, if it were informa10 tion held by the Federal Government, 

11 under section 552(b) of title 5, United 

12 States Code, 

13 shall be made publicly available. 

14 (E) OTHER PROTECTIONS.—The Adminis15 trator shall require such additional procedures 

16 and protections as are necessary to ensure that 

17 any State that has established a SEED Ac18 count will operate the SEED Account in an ac19 countable and transparent manner. 

20 (f) REQUIREMENTS FOR ELIGIBILITY.—A State’s eli21 gibility to receive allowances in its SEED Account shall 

22 depend on that State’s compliance with the requirements 

23 of this Act (and the amendments made by this Act). 

24 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

25 are authorized to be appropriated to the Administrator 


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1 such sums as may be necessary for SEED Account oper2 ations. 

3 SEC. 132. SUPPORT OF STATE RENEWABLE ENERGY AND 

4 ENERGY EFFICIENCY PROGRAMS. 

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

6 (1) COST-EFFECTIVE.—The term ‘‘cost-effec7 tive’’, with respect to an energy efficiency program, 

8 means that the program meets the Total Resource 

9 Cost Test, which requires that the net present value 

10 of economic benefits over the life of the program or 

11 measure, including avoided supply and delivery costs 

12 and deferred or avoided investments, is greater than 

13 the net present value of the economic costs over the 

14 life of the program, including program costs and in15 cremental costs borne by the energy consumer. 

16 (2) RENEWABLE ENERGY RESOURCE.—The 

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

18 meaning given that term in section 610 of the Public 

19 Utility Regulatory Policies Act of 1978 (as added by 

20 section 101 of this Act). 

21 (3) STATE.—The term ‘‘State’’ shall have the 

22 meaning given that term in section 302(d) of the 

23 Clean Air Act (42 U.S.C. 7602(d)). 

24 (b) DISTRIBUTION AMONG STATES.—The Adminis25 trator shall, in accordance with this section, distribute 


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1 emission allowances allocated pursuant to section 

2 782(g)(1) not later than September 30, 2012, and each 

3 calendar year thereafter through 2050. The Administrator 

4 shall distribute the emission allowances to States for re5 newable energy and energy efficiency programs to be de6 posited in and administered through the State Energy and 

7 Environment Development (SEED) Accounts established 

8 pursuant to section 131 of the American Clean Energy 

9 and Security Act of 2009. The Administrator shall dis10 tribute allowances among the States under this section 

11 each year in accordance with the following formula: 

12 (1) One third of the allowances shall be divided 

13 equally among the States. 

14 (2) One third of the allowances shall be distrib15 uted ratably among the States based on the popu16 lation of each State, as contained in the most recent 

17 reliable census data available from the Bureau of the 

18 Census, Department of Commerce, for all States at 

19 the time the Administrator calculates the formula 

20 for distribution. 

21 (3) One third of the allowances for shall be dis22 tributed ratably among the States on the basis of 

23 the energy consumption of each State as contained 

24 in the most recent State Energy Data Report avail25 able from the Energy Information Administration 


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1 (or such alternative reliable source as the Adminis2 trator may designate). 

3 (c) USES.—The allowances distributed to each State 

4 pursuant to this section shall be used exclusively for the 

5 purposes listed in this subsection, as set forth below: 

6 (1) Not less than 12.5 percent shall be distrib7 uted by the State to units of local government within 

8 such State to be used exclusively to support the en9 ergy efficiency and renewable energy purposes listed 

10 in paragraphs (2) and (3). 

11 (2) Not less than 20 percent shall be used ex12 clusively for the following energy efficiency pur13 poses— 

14 (A) implementation and enforcement of 

15 building codes adopted in compliance with sec16 tion 201 of the American Clean Energy and Se17 curity Act of 2009; 

18 (B) implementation of the Retrofit for En19 ergy and Environmental Performance (REEP) 

20 program established pursuant to section 202 of 

21 the American Clean Energy and Security Act of 

22 2009; 

23 (C) implementation of the energy efficient 

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1 suant to section 203 of the American Clean En2 ergy and Security Act of 2009; 

3 (D) implementation of the building energy 

4 performance labeling program established pur5 suant to section 204 of the American Clean En6 ergy and Security Act of 2009; 

7 (E) enabling the development of a Smart 

8 Grid (as described in section 1301 of the En9 ergy Independence and Security Act of 2007 

10 (42 U.S.C. 17381)), including integration of re11 newable energy resources and distributed gen12 eration, demand response, demand side man13 agement, and systems analysis; 

14 (F) transportation planning pursuant to 

15 section 841; and 

16 (G) other cost-effective energy efficiency 

17 programs for end-use consumers of electricity, 

18 natural gas, home heating oil, or propane, in19 cluding, where appropriate, programs or mecha20 nisms administered by local governments and 

21 entities other than the State. 

22 (3) Not less than 20 percent shall be used ex23 clusively for capital grants, tax credits, production 

24 incentives, loans, loan guarantees, forgivable loans, 

25 and interest rate buy-downs for— 


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1 (A) re-equipping, expanding, or estab2 lishing a manufacturing facility that receives 

3 certification from the Secretary of Energy pur4 suant to section 1302 of the American Recovery 

5 and Reinvestment Act of 2009 for the produc6 tion of— 

7 (i) property designed to be used to 

8 produce energy from renewable energy 

9 sources; and 

10 (ii) electricity storage systems; and 

11 (B) deployment of technologies to generate 

12 electricity from renewable energy sources. 

13 (4) The remaining 47.5 percent shall be used 

14 exclusively for any of the purposes described in sub15 paragraphs (A) through (F) of paragraph (2) and in 

16 paragraph (3). 

17 (d) REPORTING.—Each State receiving emission al18 lowances under this section shall include in its biennial 

19 reports required under section 131 of the American Clean 

20 Energy and Security Act of 2009, in accordance with such 

21 requirements as the Administrator may prescribe— 

22 (1) a list of entities receiving allowances or al23 lowance value under this section; 

24 (2) the amount and nature of allowances or al25 lowance value received by each recipient; 


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1 (3) the specific purposes for which such allow2 ances or allowance value was conveyed; 

3 (4) the amount of energy savings, emission re4 ductions, renewable energy deployment, or new or 

5 retooled manufacturing capacity resulting from such 

6 allowances or allowance value; and 

7 (5) an assessment of the cost-effectiveness of 

8 any energy efficiency program supported under sub9 section (c)(2)(G). 

10 (e) ENFORCEMENT.—If the Administrator deter11 mines that a State is not in compliance with this section, 

12 the Administrator may withhold a portion of the allow13 ances, the value of which is equal to up to twice the value 

14 of the allowances that the State failed to use in accordance 

15 with the requirements of this section, that such State 

16 would otherwise be eligible to receive under this section 

17 in later years. Allowances withheld pursuant to this sub18 section shall be distributed among the remaining States 

19 in accordance with the requirements of subsection (b). 

20 Subtitle E—Smart Grid 

21 Advancement 

22 SEC. 141. DEFINITIONS. 

23 For purposes of this subtitle: 

24 (1) The term ‘‘Administrator’’ means the Ad25 ministrator of the Environmental Protection Agency. 


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1 (2) The term ‘‘applicable baseline’’ means the 

2 average of the highest three annual peak demands a 

3 load-serving entity has experienced during the 5 

4 years immediately prior to the date of enactment of 

5 this Act. 

6 (3) The term‘‘Commission’’ means Federal En7 ergy Regulatory Commission. 

8 (4) The term ‘‘load-serving entity’’ means an 

9 entity that provides electricity directly to retail con10 sumers with the responsibility to assure power qual11 ity and reliability, including such entities that are 

12 investor-owned, publicly owned, owned by rural elec13 tric cooperatives, or other entities. 

14 (5) The term ‘‘peak demand’’ means the high15 est point of electricity demand, net of any distrib16 uted electricity generation or storage from sources 

17 on the load-serving entity’s customers’ premises, 

18 during any hour on the system of a load serving en19 tity during a calendar year, expressed in Megawatts 

20 (MW), or more than one such high point as a func21 tion of seasonal demand changes. 

22 (6) The term ‘‘peak demand reduction’’ means 

23 the reduction in annual peak demand as compared 

24 to a previous baseline year or period, expressed in 

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1 ishing the end-use requirements for electricity or by 

2 use of locally stored or generated electricity to meet 

3 those requirements from distributed resources on the 

4 load-serving entity’s customers’ premises and with5 out use of high-voltage transmission. 

6 (7) The term ‘‘peak demand reduction plan’’ 

7 means a plan developed by or for a load-serving enti8 ty that it will implement to meet its peak demand 

9 reduction goals. 

10 (8) The term ‘‘peak period’’ means the time pe11 riod on the system of a load-serving entity relative 

12 to peak demand that may warrant special measures 

13 or electricity resources to maintain system reliability 

14 while meeting peak demand. 

15 (9) The term ‘‘Secretary’’ means the Secretary 

16 of Energy. 

17 (10) The term ‘‘Smart Grid’’ has the meaning 

18 provided by section 1301 of the Energy Independ19 ence and Security Act of 2007 (15 U.S.C. 17381). 

20 SEC. 142. ASSESSMENT OF SMART GRID COST EFFECTIVE21 NESS IN PRODUCTS. 

22 (a) ASSESSMENT.—Within one year after the date of 

23 enactment of this Act, the Secretary and the Adminis24 trator shall each assess the potential for cost-effective in25 tegration of Smart Grid technologies and capabilities in 


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1 all products that are reviewed by the Department of En2 ergy and the Environmental Protection Agency, respec3 tively, for potential designation as Energy Star products. 

4 (b) ANALYSIS.—(1) Within 2 years after the date of 

5 enactment of this Act, the Secretary and the Adminis6 trator shall each prepare an analysis of the potential en7 ergy savings, greenhouse gas emission reductions, and 

8 electricity cost savings that could accrue for each of the 

9 products identified by the assessment in subsection (a) in 

10 the following optimal circumstances: 

11 (A) The products possessed Smart Grid capa12 bility and interoperability that is tested and proven 

13 reliable. 

14 (B) The products were utilized in an electricity 

15 utility service area which had Smart Grid capability 

16 and offered customers rate or program incentives to 

17 use the products. 

18 (C) The utility’s rates reflected national average 

19 costs, including average peak and valley seasonal 

20 and daily electricity costs. 

21 (D) Consumers using such products took full 

22 advantage of such capability. 

23 (E) The utility avoided incremental investments 

24 and rate increases related to such savings. 


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1 (2) The analysis under paragraph (1) shall be consid2 ered the ‘‘best case’’ Smart Grid analysis. On the basis 

3 of such an analysis for each product, the Secretary and 

4 the Administrator shall determine whether the installation 

5 of Smart Grid capability for such a product would be cost 

6 effective. For purposes of this paragraph, the term ‘‘cost 

7 effective’’ means that the cumulative savings from using 

8 the product under the best case Smart Grid circumstances 

9 for a period of one-half of the product’s expected useful 

10 life will be greater than the incremental cost of the Smart 

11 Grid features included in the product. 

12 (3) To the extent that including Smart Grid capa13 bility in any products analyzed under paragraph (2) is 

14 found to be cost effective in the best case, the Secretary 

15 and the Administrator shall, not later than 3 years after 

16 the date of enactment of this Act take each of the fol17 lowing actions: 

18 (A) Inform the manufacturer of such product of 

19 such finding of cost effectiveness. 

20 (B) Assess the potential contributions the devel21 opment and use of products with Smart Grid tech22 nologies bring to reducing peak demand and pro23 moting grid stability. 

24 (C) Assess the potential national energy savings 

25 and electricity cost savings that could be realized if 


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1 Smart Grid potential were installed in the relevant 

2 products reviewed by the Energy Star program. 

3 (D) Assess and identify options for providing 

4 consumers information on products with Smart Grid 

5 capabilities, including the necessary conditions for 

6 cost-effective savings. 

7 (E) Submit a report to Congress summarizing 

8 the results of the assessment for each class of prod9 ucts, and presenting the potential energy and green10 house gas savings that could result if Smart Grid 

11 capability were installed and utilized on such prod12 ucts 

13 SEC. 143. INCLUSIONS OF SMART GRID CAPABILITY ON AP14 PLIANCE ENERGY GUIDE LABELS. 

15 Section 324(a)(2) of the Energy Policy and Conserva16 tion Act (42 U.S.C. 6294(a)(2)) is amended by adding the 

17 following at the end: 

18 ‘‘(J)(i) Not later than 3 years after the 

19 date of enactment of this subparagraph, the 

20 Federal Trade Commission shall initiate a rule21 making to consider making a special note in a 

22 prominent manner on any ENERGY GUIDE 

23 label for any product actually including Smart 

24 Grid capability that— 


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1 ‘‘(I) Smart Grid capability is a fea2 ture of that product; 

3 ‘‘(II) the use and value of that feature 

4 depended on the Smart Grid capability of 

5 the utility system in which the product was 

6 installed and the active utilization of that 

7 feature by the customer; and 

8 ‘‘(III) on a utility system with Smart 

9 Grid capability, the use of the product’s 

10 Smart Grid capability could reduce the 

11 customer’s cost of the product’s annual op12 eration by an estimated dollar amount 

13 range representing the result of incre14 mental energy and electricity cost savings 

15 that would result from the customer taking 

16 full advantage of such Smart Grid capa17 bility. 

18 ‘‘(ii) Not later than 3 years after the date 

19 of enactment of this subparagraph, the Com20 mission shall complete the rulemaking initiated 

21 under clause (i).’’. 

22 SEC. 144. SMART GRID PEAK DEMAND REDUCTION GOALS. 

23 (a) GOALS.—Not later than one year after the date 

24 of enactment of this Act, load-serving entities, or, at their 

25 option, States with respect to load-serving entities that 


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1 they regulate, shall determine and publish peak demand 

2 reduction goals for any load-serving entities that have an 

3 applicable baseline in excess of 250 megawatts. 

4 (b) BASELINES.—(1) The Commission, in consulta5 tion with the Secretary and the Administrator, shall de6 velop and publish, after an opportunity for public com7 ment, a methodology to provide for adjustments or nor8 malization to a load-serving entity’s applicable baseline 

9 over time to reflect changes in the number of customers 

10 served, weather conditions, general economic conditions, 

11 and any other appropriate factors external to peak de12 mand management, as determined by the Commission. 

13 (2) The Commission shall support load-serving enti14 ties (including any load-serving entities with an applicable 

15 baseline of less than 250 megawatts that volunteer to par16 ticipate in achieving the purposes of this section) in deter17 mining their applicable baselines, and in developing their 

18 peak demand reduction goals. 

19 (3) The Secretary, in consultation with the Commis20 sion, the Administrator, and the National Electric Reli21 ability Corporation, shall develop a system and rules for 

22 measurement and verification of demand reductions. 

23 (c) PEAK DEMAND REDUCTION GOALS.—(1) Peak 

24 demand reduction goals may be established for an indi25 vidual load-serving entity, or, at the determination of a 


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1 State or regional entity, by that State or regional entity 

2 for a larger region that shares a common system peak de3 mand and for which peak demand reduction measures 

4 would offer regional benefit. 

5 (2) A State or regional entity establishing peak de6 mand reduction goals shall cooperate, as necessary and 

7 appropriate, with the Commission, the Secretary, State 

8 regulatory commissions, State energy offices, the National 

9 Electric Reliability Corporation, and other relevant au10 thorities. 

11 (3) In determining the applicable peak demand reduc12 tion goals, States and other jurisdictional entities may uti13 lize the results of the 2009 National Demand Response 

14 Potential Assessment, as authorized by section 571 of the 

15 National Energy Conservation Policy Act (42 U.S.C. 

16 8279). 

17 (4) The applicable peak demand reduction goals shall 

18 provide that— 

19 (A) load-serving entities will reduce or mitigate 

20 peak demand by a minimum percentage amount 

21 from the applicable baseline to a lower peak demand 

22 during calendar year 2012; 

23 (B) load-serving entities will reduce or mitigate 

24 peak demand by a minimum percentage greater 


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1 amount from the applicable baseline to a lower peak 

2 demand during calendar year 2015; and 

3 (C) the minimum percentage reductions estab4 lished as peak demand reduction goals shall be the 

5 maximum reductions that are realistically achievable 

6 with an aggressive effort to deploy Smart Grid and 

7 peak demand reduction technologies and methods, 

8 including but not limited to those listed in sub9 section (d). 

10 (d) PLAN.—Each load-serving entity shall prepare a 

11 peak demand reduction plan that demonstrates its ability 

12 to meet each applicable goal by any or a combination of 

13 the following options: 

14 (1) Direct reduction in megawatts of peak de15 mand through energy efficiency measures with reli16 able and continued application during peak demand 

17 periods. 

18 (2) Demonstration that an amount of 

19 megawatts equal to a stated portion of the applicable 

20 goal is contractually committed to be available for 

21 peak reduction through one or more of the following: 

22 (A) Megawatts enrolled in demand re23 sponse programs. 

24 (B) Megawatts subject to the ability of a 

25 load-serving entity to call on demand response 


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1 programs, smart appliances, smart electricity 

2 storage devices, distributed generation resources 

3 on the entity’s customers’ premises, or other 

4 measures directly capable of actively, 

5 controllably, reliably, and dynamically reducing 

6 peak demand (‘‘dynamic peak management con7 trol’’). 

8 (C) Megawatts available from distributed 

9 dynamic electricity storage under agreement 

10 with the owner of that storage. 

11 (D) Megawatts committed from 

12 dispatchable distributed generation dem13 onstrated to be reliable under peak period con14 ditions and in compliance with air quality regu15 lations. 

16 (E) Megawatts available from smart appli17 ances and equipment with Smart Grid capa18 bility available for direct control by the utility 

19 through agreement with the customer owning 

20 the appliances or equipment. 

21 (F) Megawatts from a demonstrated and 

22 assured minimum of distributed solar electric 

23 generation capacity in instances where peak pe24 riod and peak demand conditions are directly 


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1 related to solar radiation and accompanying 

2 heat. 

3 (3) If any of the methods listed in subpara4 graph (C), (D), or (E) of paragraph (2) are relied 

5 upon to meet its peak demand reduction goals, the 

6 load-serving entity must demonstrate this capability 

7 by operating a test during the applicable calendar 

8 year. 

9 (4) Nothing in this section shall require the 

10 publication in peak demand reduction goals or in 

11 any peak demand reduction plan of any information 

12 that is confidential for competitive or other reasons 

13 or that identifies individual customers. 

14 (e) EXISTING AUTHORITY AND REQUIREMENTS.— 

15 Nothing in this section diminishes or supersedes any au16 thority of a State or political subdivision of a State to 

17 adopt or enforce any law or regulation respecting peak de18 mand management, demand response, distributed storage, 

19 use of distributed generation, or the regulation of load20 serving entities. The Commission, in consultation with 

21 States having such peak management, demand response 

22 and distributed storage programs, shall to the maximum 

23 extent practicable, facilitate coordination between the Fed24 eral program and such State programs. 


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1 (f) RELIEF.—The Commission may, for good cause, 

2 grant relief to load-serving entities from the requirements 

3 of this section. 

4 (g) OTHER LAWS.—Except as provided in sub5 sections (e) and (f), no law or regulation shall relieve any 

6 person of any requirement otherwise applicable under this 

7 section. 

8 (h) COMPLIANCE.—(1) The Commission shall within 

9 one year after the date of enactment of this Act establish 

10 a public website where the Commission will provide infor11 mation and data demonstrating compliance by States, re12 gional entities, and load-serving entities with this section, 

13 including the success of load-serving entities in meeting 

14 applicable peak demand reduction goals. 

15 (2) The Commission shall, by April 1 of each year 

16 beginning in 2012, provide a report to Congress on com17 pliance with this section and success in meeting applicable 

18 peak demand reduction goals and, as appropriate, shall 

19 make recommendations as to how to increase peak de20 mand reduction efforts. 

21 (3) The Commission shall note in each such report 

22 any State, political subdivision of a State, or load-serving 

23 entity that has failed to comply with this section, or is 

24 not a part of any region or group of load-serving entities 

25 serving a region that has complied with this section. 


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1 (4) The Commission shall have and exercise the au2 thority to take reasonable steps to modify the process of 

3 establishing peak demand reduction goals and to accept 

4 adjustments to them as appropriate when sought by load5 serving entities. 

6 (i) ASSISTANCE TO STATES AND FUNDING.— 

7 (1) ASSISTANCE TO STATES.—Any costs in8 curred by States for activities undertaken pursuant 

9 to this section shall be supported by the use of emis10 sion allowances allocated to the States’ SEED Ac11 counts pursuant to section ølll¿ of this Act. To 

12 the extent that a State provides allowances to local 

13 governments within the State to implement this pro14 gram, that shall be deemed a distribution of such al15 lowances to units of local government pursuant to 

16 subsection (c)(1) of that section. 

17 (2) FUNDING.—There are authorized to be ap18 propriated such sums as may be necessary to the 

19 Commission, the Secretary, and the Administrator to 

20 carry out the provisions of this section. 

21 SEC. 145. REAUTHORIZATION OF ENERGY EFFICIENCY PUB22 LIC INFORMATION PROGRAM TO INCLUDE 

23 SMART GRID INFORMATION. 

24 (a) IN GENERAL.—Section 134 of the Energy Policy 

25 Act of 2005 (42 U.S.C. 15832) is amended as follows: 


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1 (1) By amending the section heading to read as 

2 follows: ‘‘ENERGY EFFICIENCY AND SMART GRID

3 PUBLIC INFORMATION INITIATIVE’’. 

4 (2) In paragraph (1) of subsection (a) by strik5 ing ‘‘reduce energy consumption during the 4-year 

6 period beginning on the date of enactment of this 

7 Act’’ and inserting ‘‘increase energy efficiency and 

8 to adopt Smart Grid technology and practices’’. 

9 (3) In paragraph (2) of subsection (a) by strik10 ing ‘‘benefits to consumers of reducing’’ and insert11 ing ‘‘economic and environmental benefits to con12 sumers and the United States of optimizing’’. 

13 (4) In subsection (a) by inserting at the begin14 ning of paragraph (3) ‘‘the effect of energy effi15 ciency and Smart Grid capability in reducing energy 

16 and electricity prices throughout the economy, to17 gether with’’. 

18 (5) In subsection (a)(4) by redesignating sub19 paragraph (D) as (E), by striking ‘‘and’’ at the end 

20 of subparagraph (C), and by inserting after subpara21 graph (C) the following: 

22 ‘‘(D) purchasing and utilizing equipment 

23 that includes Smart Grid features and capa24 bility; and’’. 


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1 (6) In subsection (c), by striking ‘‘Not later 

2 than July 1, 2009,’’ and inserting, ‘‘For each year 

3 when appropriations pursuant to the authorization 

4 in this section exceed $10,000,000,’’. 

5 (7) In subsection (d) by striking ‘‘2010’’ and 

6 inserting ‘‘2020’’. 

7 (8) In subsection (e) by striking ‘‘2010’’ and in8 serting ‘‘2020’’. 

9 (b) TABLE OF CONTENTS.—The item relating to sec10 tion 134 in the table of contents for the Energy Policy 

11 Act of 2005 (42 U.S.C. 15801 and following) is amended 

12 to read as follows: 

‘‘Sec. 134. Energy efficiency and Smart Grid public information initiative.’’. 

13 SEC. 146. INCLUSION OF SMART-GRID FEATURES IN APPLI14 ANCE REBATE PROGRAM. 

15 (a) AMENDMENTS.—Section 124 of the Energy Pol16 icy Act of 2005 (42 U.S.C. 15821) is amended as follows: 

17 (1) By amending the section heading to read as 

18 follows: ‘‘ENERGY EFFICIENT AND SMART AP19 PLIANCE REBATE PROGRAM.’’. 

20 (2) By redesignating paragraphs (4) and (5) of 

21 subsection (a) as paragraphs (5) and (6), respec22 tively, and inserting after paragraph (3) the fol23 lowing: 

24 ‘‘(4) SMART APPLIANCE.—The term ‘smart ap25 pliance’ means a product that the Administrator of 


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1 the Environmental Protection Agency or the Sec2 retary of Energy has determined qualifies for such 

3 a designation in the Energy Star program pursuant 

4 to section 142 of the American Clean Energy and 

5 Security Act of 2009, or that the Secretary or the 

6 Administrator has separately determined includes 

7 the relevant Smart Grid capabilities listed in section 

8 1301 of the Energy Independence and Security Act 

9 of 2007 (15 U.S.C. 17381).’’. 

10 (3) In subsection (b)(1) by inserting ‘‘and 

11 smart’’ after ‘‘efficient’’ and by inserting after 

12 ‘‘products’’ the first place it appears ‘‘, including 

13 products designated as being smart appliances,’’. 

14 (4) In subsection (b)(3), by inserting ‘‘the ad15 ministration of’’ after ‘‘carry out’’. 

16 (5) In subsection (d), by inserting ‘‘the admin17 istration of’’ after ‘‘carrying out’’ and by inserting 

18 ‘‘, and up to 100 percent of the value of the rebates 

19 provided pursuant to this section’’ before the period 

20 at the end. 

21 (6) In subsection (e)(3), by inserting ‘‘, with 

22 separate consideration as applicable if the product is 

23 also a smart appliance,’’ after ‘‘Energy Star prod24 uct’’ the first place it appears and by inserting ‘‘or 

25 smart appliance’’ before the period at the end. 


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1 (7) In subsection (f), by striking 

2 ‘‘$50,000,000’’ through the period at the end and 

3 inserting ‘‘$100,000,000 for each fiscal year from 

4 2010 through 2015.’’. 

5 (b) TABLE OF CONTENTS.—The item relating to sec6 tion 124 in the table of contents for the Energy Policy 

7 Act of 2005 (42 U.S.C. 15801 and following) is amended 

8 to read as follows: 

‘‘Sec. 124. Energy efficient and smart appliance rebate program.’’. 

9 Subtitle F—Transmission Planning 

10 SEC. 151. TRANSMISSION PLANNING. 

11 Part II of the Federal Power Act (16 U.S.C. 824 et 

12 seq.) is amended by adding after section 216 the following 

13 new section: 

14 ‘‘SEC. 216A. TRANSMISSION PLANNING. 

15 ‘‘(a) FEDERAL POLICY.— 

16 ‘‘(1) OBJECTIVES.—It is the policy of the 

17 United States that regional electric grid planning 

18 should facilitate the deployment of renewable and 

19 other zero-carbon energy sources for generating elec20 tricity to reduce greenhouse gas emissions while en21 suring reliability, reducing congestion, ensuring 

22 cyber-security, and providing for cost-effective elec23 tricity services throughout the United States. 

24 ‘‘(2) OPTIONS.—In addition to the policy under 

25 paragraph (1), it is the policy of the United States 


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1 that regional electric grid planning to meet these ob2 jectives should take into account all significant de3 mand-side and supply-side options, including energy 

4 efficiency, distributed generation, renewable energy 

5 and zero-carbon electricity generation technologies, 

6 smart-grid technologies and practices, demand re7 sponse, electricity storage, voltage regulation tech8 nologies, high capacity conductor and super9 conductor technologies, underground transmission 

10 technologies, and new conventional electric trans11 mission capacity and corridors. 

12 ‘‘(b) PLANNING.— 

13 ‘‘(1) PLANNING PRINCIPLES.—Not later than 1 

14 year after the date of enactment of this section, the 

15 Commission shall adopt, after notice and oppor16 tunity for comment, national electricity grid plan17 ning principles derived from the Federal policy es18 tablished under subsection (a) to be applied in ongo19 ing and future transmission planning that may im20 plicate interstate transmission of electricity. 

21 ‘‘(2) REGIONAL PLANNING ENTITIES.—Not 

22 later than 3 months after the date of adoption by 

23 the Commission of national electricity grid planning 

24 principles pursuant to paragraph (1), entities that 

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1 suant to State or Federal law or regulation, includ2 ing States, entities designated by States, public util3 ity transmission providers, operators and owners, re4 gional organizations, and electric utilities, and that 

5 are willing to incorporate the national electricity grid 

6 planning principles adopted by the Commission in 

7 their electric grid planning, shall identify themselves 

8 and the regions for which they propose to develop 

9 plans to the Commission. 

10 ‘‘(3) COORDINATION OF REGIONAL PLANNING

11 ENTITIES.—The Commission shall encourage re12 gional planning entities described under paragraph 

13 (2) to cooperate and coordinate across regions and 

14 to harmonize regional electric grid planning with 

15 planning in adjacent or overlapping jurisdictions to 

16 the maximum extent feasible. The Commission shall 

17 work with States, public utilities transmission pro18 viders, load-serving entities, transmission operators, 

19 and other organizations to resolve any conflict or 

20 competition among proposed planning entities in 

21 order to build consensus and promote the Federal 

22 policy established under subsection (a). The Com23 mission shall seek to ensure that planning that is 

24 consistent with the national electricity grid planning 

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1 ducted in all regions of the United States and the 

2 territories. 

3 ‘‘(4) RELATION TO EXISTING PLANNING POL4 ICY.—In implementing the Federal policy established 

5 under subsection (a), the Commission shall— 

6 ‘‘(A) incorporate any ongoing planning ef7 forts undertaken pursuant to section 217; and 

8 ‘‘(B) consult with and invite the participa9 tion of the Secretary of Energy in relationship 

10 to the Secretary’s duties pursuant to section 

11 216. 

12 ‘‘(5) ASSISTANCE.— 

13 ‘‘(A) IN GENERAL.—The Commission shall 

14 provide support to and participate in the re15 gional grid planning processes conducted by re16 gional planning entities. The Commission may 

17 provide planning resources and assistance as re18 quired or as requested by regional planning en19 tities, including system data, cost information, 

20 system analysis, technical expertise, modeling 

21 support, dispute resolution services, and other 

22 assistance to regional planning entities, as ap23 propriate. 


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1 ‘‘(B) AUTHORIZATION.—There are author2 ized to be appropriated such sums as may be 

3 necessary to carry out this paragraph. 

4 ‘‘(6) CONFLICT RESOLUTION.—In the event 

5 that regional grid plans conflict, the Commission 

6 shall assist the regional planning entities in resolving 

7 such conflicts in order to achieve the objectives of 

8 the Federal policy established under subsection (a). 

9 ‘‘(7) SUBMISSION OF PLANS.—The Commission 

10 shall require regional planning entities to submit ini11 tial regional electric grid plans to the Commission 

12 not later than 18 months after the date the Commis13 sion promulgates national electricity grid planning 

14 principles pursuant to paragraph (1). Regional elec15 tric grid plans should, in general, be developed from 

16 sub-regional requirements and plans, including plan17 ning input reflecting individual utility service areas. 

18 Regional plans may then in turn be combined into 

19 larger regional plans, up to interconnection-wide and 

20 national plans, as appropriate and necessary as de21 termined by the Commission. The Commission shall 

22 review such plans for consistency with the national 

23 grid planning principles and may return a plan to 

24 one or more planning entities for further consider25 ation, along with the Commission’s own recVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00143 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 ommendations for resolution of any conflict or for 

2 improvement. To the extent practicable, all plans 

3 submitted to the Commission shall be public docu4 ments and available on the Commission’s website. 

5 ‘‘(8) MULTI-REGIONAL MEETINGS.—As regional 

6 grid plans are submitted to the Commission, the 

7 Commission may convene multi-regional meetings to 

8 discuss regional grid plan consistency and integra9 tion, including requirements for multi-regional 

10 projects, and to resolve any conflicts that emerge 

11 from such multi-regional projects. The Commission 

12 shall provide its recommendations for eliminating 

13 any inter-regional conflicts. 

14 ‘‘(9) REPORT TO CONGRESS.—Not later than 3 

15 years after the date of enactment of this section, the 

16 Commission shall provide a report to Congress con17 taining the results of the regional grid planning 

18 process, including summaries of the adopted regional 

19 plans. The Commission shall provide an electronic 

20 version of its report on its website with links to all 

21 regional and sub-regional plans taken into account. 

22 The Commission shall note and provide its rec23 ommended resolution for any conflicts not resolved 

24 during the planning process. The Commission shall 

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1 propriate Federal role or support required to ad2 dress the needs of the electric grid, including rec3 ommendations for addressing any needs that are be4 yond the reach of existing State and Federal author5 ity.’’. 

6 Subtitle G—Technical Corrections 

7 to Energy Laws 

8 SEC. 161. TECHNICAL CORRECTIONS TO ENERGY INDE9 PENDENCE AND SECURITY ACT OF 2007. 

10 (a) TITLE III—ENERGY SAVINGS THROUGH IM11 PROVED STANDARDS FOR APPLIANCE AND LIGHTING.— 

12 (1) Section 325(u) of the Energy Policy and Conservation 

13 Act (42 U.S.C. 6295(u)) (as amended by section 301(c) 

14 of the Energy Independence and Security Act of 2007 

15 (121 Stat. 1550)) is amended— 

16 (A) by redesignating paragraph (7) as 

17 paragraph (4); and 

18 (B) in paragraph (4) (as so redesignated), 

19 by striking ‘‘supplies is’’ and inserting ‘‘supply 

20 is’’. 

21 (2) Section 302 of the Energy Independence and Se22 curity Act of 2007 (121 Stat. 1551)) is amended— 

23 (A) in subsection (a), by striking ‘‘end of the 

24 paragraph’’ and inserting ‘‘end of subparagraph 

25 (A)’’; and 


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1 (B) in subsection (b), by striking ‘‘6313(a)’’ 

2 and inserting ‘‘6314(a)’’. 

3 (3) Section 343(a)(1) of the Energy Policy and Con4 servation Act (42 U.S.C. 6313(a)(1)) (as amended by sec5 tion 302(b) of the Energy Independence and Security Act 

6 of 2007 (121 Stat. 1551)) is amended— 

7 (A) by striking ‘‘TEST PROCEDURES’’ and all 

8 that follows through ‘‘At least once’’ and inserting 

9 ‘‘TEST PROCEDURES.—At least once’’; and 

10 (B) by redesignating clauses (i) and (ii) as sub11 paragraphs (A) and (B), respectively. 

12 (4) Section 342(a)(6) of the Energy Policy and Con13 servation Act (42 U.S.C. 6313(a)(6)) (as amended by sec14 tion 305(b)(2) of the Energy Independence and Security 

15 Act of 2007 (121 Stat. 1554)) is amended— 

16 (A) in subparagraph (B)— 

17 (i) by striking ‘‘If the Secretary’’ and in18 serting the following: 

19 ‘‘(i) IN GENERAL.—If the Secretary’’; 

20 (ii) by striking ‘‘clause (ii)(II)’’ and insert21 ing ‘‘subparagraph (A)(ii)(II)’’; 

22 (iii) by striking ‘‘clause (i)’’ and inserting 

23 ‘‘subparagraph (A)(i)’’; and 

24 (iv) by adding at the end the following: 


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1 ‘‘(ii) FACTORS.—In determining 

2 whether a standard is economically justi3 fied for the purposes of subparagraph 

4 (A)(ii)(II), the Secretary shall, after receiv5 ing views and comments furnished with re6 spect to the proposed standard, determine 

7 whether the benefits of the standard ex8 ceed the burden of the proposed standard 

9 by, to the maximum extent practicable, 

10 considering— 

11 ‘‘(I) the economic impact of the 

12 standard on the manufacturers and 

13 on the consumers of the products sub14 ject to the standard; 

15 ‘‘(II) the savings in operating 

16 costs throughout the estimated aver17 age life of the product in the type (or 

18 class) compared to any increase in the 

19 price of, or in the initial charges for, 

20 or maintenance expenses of, the prod21 ucts that are likely to result from the 

22 imposition of the standard; 

23 ‘‘(III) the total projected quan24 tity of energy savings likely to result 


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1 directly from the imposition of the 

2 standard; 

3 ‘‘(IV) any lessening of the utility 

4 or the performance of the products 

5 likely to result from the imposition of 

6 the standard; 

7 ‘‘(V) the impact of any lessening 

8 of competition, as determined in writ9 ing by the Attorney General, that is 

10 likely to result from the imposition of 

11 the standard; 

12 ‘‘(VI) the need for national en13 ergy conservation; and 

14 ‘‘(VII) other factors the Sec15 retary considers relevant. 

16 ‘‘(iii) ADMINISTRATION.— 

17 ‘‘(I) ENERGY USE AND EFFI18 CIENCY.—The Secretary may not pre19 scribe any amended standard under 

20 this paragraph that increases the 

21 maximum allowable energy use, or de22 creases the minimum required energy 

23 efficiency, of a covered product. 

24 ‘‘(II) UNAVAILABILITY.— 


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1 ‘‘(aa) IN GENERAL.—The 

2 Secretary may not prescribe an 

3 amended standard under this 

4 subparagraph if the Secretary 

5 finds (and publishes the finding) 

6 that interested persons have es7 tablished by a preponderance of 

8 the evidence that a standard is 

9 likely to result in the unavail10 ability in the United States in 

11 any product type (or class) of 

12 performance characteristics (in13 cluding reliability, features, sizes, 

14 capacities, and volumes) that are 

15 substantially the same as those 

16 generally available in the United 

17 States at the time of the finding 

18 of the Secretary. 

19 ‘‘(bb) OTHER TYPES OR

20 CLASSES.—The failure of some 

21 types (or classes) to meet the cri22 terion established under this sub23 clause shall not affect the deter24 mination of the Secretary on 

25 whether to prescribe a standard 


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1 for the other types or classes.’’; 

2 and 

3 (B) in subparagraph (C)(iv), by striking ‘‘An 

4 amendment prescribed under this subsection’’ and 

5 inserting ‘‘Notwithstanding subparagraph (D), an 

6 amendment prescribed under this subparagraph’’. 

7 (5) Section 306(c) of the Energy Independence and 

8 Security Act of 2007 (121 Stat. 1559) is amended— 

9 (A) by striking ‘‘Section’’ and all that follows 

10 through ‘‘is amended’’ and inserting ‘‘Section 

11 342(a)(6)(C) of the Energy Policy and Conservation 

12 Act (42 U.S.C. 6313(a)(6)(C)) (as amended by sec13 tion 305(b)(2)) is amended’’; and 

14 (B) by redesignating clause (iii) of section 

15 342(a)(6)(B) of the Energy Policy and Conservation 

16 Act (as added by section 306(c) of the Energy Inde17 pendence and Security Act of 2007) as clause (vi) of 

18 section 342(a)(6)(C) of the Energy Policy and Con19 servation Act (as amended by section 305(b)(2) of 

20 the Energy Independence and Security Act of 2007). 

21 (6) Section 340 of the Energy Policy and Conserva22 tion Act (42 U.S.C. 6311) (as amended by sections 

23 312(a)(2) and 314(a) of the Energy Independence and Se24 curity Act of 2007 (121 Stat. 1564, 1569)) is amended 

25 by redesignating paragraphs (22) and (23) (as added by 


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1 section 314(a) of that Act) as paragraphs (23) and (24), 

2 respectively. 

3 (7) Section 345 of the Energy Policy and Conserva4 tion Act (42 U.S.C. 6316) (as amended by section 312(e) 

5 of the Energy Independence and Security Act of 2007 

6 (121 Stat. 1567)) is amended— 

7 (A) by striking ‘‘subparagraphs (B) through 

8 (G)’’ each place it appears and inserting ‘‘subpara9 graphs (B), (C), (D), (I), (J), and (K)’’; 

10 (B) by striking ‘‘part A’’ each place it appears 

11 and inserting ‘‘part B’’; and 

12 (C) in subsection (h)(3), by striking ‘‘section 

13 342(f)(3)’’ and inserting ‘‘section 342(f)(4)’’. 

14 (8) Section 340(13) of the Energy Policy and Con15 servation Act (42 U.S.C. 6311(13)) (as amended by sec16 tion 313(a) of the Energy Independence and Security Act 

17 of 2007 (121 Stat. 1568)) is amended— 

18 (A) by striking subparagraphs (A) and (B) and 

19 inserting the following: 

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

21 motor’ means any motor that is— 

22 ‘‘(i) a general purpose T-frame, sin23 gle-speed, foot-mounting, polyphase squir24 rel-cage induction motor of the National 

25 Electrical Manufacturers Association, DeVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00151 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 sign A and B, continuous rated, operating 

2 on 230/460 volts and constant 60 Hertz 

3 line power as defined in NEMA Standards 

4 Publication MG1–1987; or 

5 ‘‘(ii) a motor incorporating the design 

6 elements described in clause (i), but is con7 figured to incorporate one or more of the 

8 following variations— 

9 ‘‘(I) U-frame motor; 

10 ‘‘(II) NEMA Design C motor; 

11 ‘‘(III) close-coupled pump motor; 

12 ‘‘(IV) footless motor; 

13 ‘‘(V) vertical solid shaft normal 

14 thrust motor (as tested in a horizontal 

15 configuration); 

16 ‘‘(VI) 8-pole motor; or 

17 ‘‘(VII) poly-phase motor with a 

18 voltage rating of not more than 600 

19 volts (other than 230 volts or 460 

20 volts, or both, or can be operated on 

21 230 volts or 460 volts, or both).’’; and 

22 (B) by redesignating subparagraphs (C) 

23 through (I) as subparagraphs (B) through (H), re24 spectively. 


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1 (9)(A) Section 342(b) of the Energy Policy and Con2 servation Act (42 U.S.C. 6313(b)) is amended— 

3 (i) in paragraph (1), by striking ‘‘paragraph 

4 (2)’’ and inserting ‘‘paragraph (3)’’; 

5 (ii) by redesignating paragraphs (2) and (3) as 

6 paragraphs (3) and (4); 

7 (iii) by inserting after paragraph (1) the fol8 lowing: 

9 ‘‘(2) STANDARDS EFFECTIVE BEGINNING DE10 CEMBER 19, 2010.— 

11 ‘‘(A) IN GENERAL.—Except for definite 

12 purpose motors, special purpose motors, and 

13 those motors exempted by the Secretary under 

14 paragraph (3) and except as provided for in 

15 subparagraphs (B), (C), and (D), each electric 

16 motor manufactured with power ratings from 1 

17 to 200 horsepower (alone or as a component of 

18 another piece of equipment) on or after Decem19 ber 19, 2010, shall have a nominal full load ef20 ficiency of not less than the nominal full load 

21 efficiency described in NEMA MG–1 (2006) 

22 Table 12–12. 

23 ‘‘(B) FIRE PUMP ELECTRIC MOTORS.—Ex24 cept for those motors exempted by the Sec25 retary under paragraph (3), each fire pump 


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1 electric motor manufactured with power ratings 

2 from 1 to 200 horsepower (alone or as a compo3 nent of another piece of equipment) on or after 

4 December 19, 2010, shall have a nominal full 

5 load efficiency that is not less than the nominal 

6 full load efficiency described in NEMA MG–1 

7 (2006) Table 12–11. 

8 ‘‘(C) NEMA DESIGN B ELECTRIC MO9 TORS.—Except for those motors exempted by 

10 the Secretary under paragraph (3), each 

11 NEMA Design B electric motor with power rat12 ings of more than 200 horsepower, but not 

13 greater than 500 horsepower, manufactured 

14 (alone or as a component of another piece of 

15 equipment) on or after December 19, 2010, 

16 shall have a nominal full load efficiency of not 

17 less than the nominal full load efficiency de18 scribed in NEMA MG–1 (2006) Table 12–11. 

19 ‘‘(D) MOTORS INCORPORATING CERTAIN

20 DESIGN ELEMENTS.—Except for those motors 

21 exempted by the Secretary under paragraph 

22 (3), each electric motor described in section 

23 340(13)(A)(ii) manufactured with power rat24 ings from 1 to 200 horsepower (alone or as a 

25 component of another piece of equipment) on or 


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1 after December 19, 2010, shall have a nominal 

2 full load efficiency of not less than the nominal 

3 full load efficiency described in NEMA MG–1 

4 (2006) Table 12–11.’’; and 

5 (iv) in paragraph (3) (as redesignated by clause 

6 (ii)), by striking ‘‘paragraph (1)’’ each place it ap7 pears in subparagraphs (A) and (D) and inserting 

8 ‘‘paragraphs (1) and (2)’’. 

9 (B) Section 313 of the Energy Independence and Se10 curity Act of 2007 (121 Stat. 1568) is repealed. 

11 (C) The amendments made by— 

12 (i) subparagraph (A) take effect on December 

13 19, 2010; and 

14 (ii) subparagraph (B) take effect on December 

15 19, 2007. 

16 (10) Section 321(30)(D)(i)(III) of the Energy Policy 

17 and Conservation Act (42 U.S.C. 6291(30)(D)(i)(III)) (as 

18 amended by section 321(a)(1)(A) of the Energy Independ19 ence and Security Act of 2007 (121 Stat. 1574)) is 

20 amended by inserting before the semicolon the following: 

21 ‘‘or, in the case of a modified spectrum lamp, not less than 

22 232 lumens and not more than 1,950 lumens’’. 

23 (11) Section 321(30)(T) of the Energy Policy and 

24 Conservation Act (42 U.S.C. 6291(30)(T) (as amended by 


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1 section 321(a)(1)(B) of the Energy Independence and Se2 curity Act of 2007 (121 Stat. 1574)) is amended— 

3 (A) in clause (i)— 

4 (i) by striking the comma after ‘‘household 

5 appliance’’ and inserting ‘‘and’’; and 

6 (ii) by striking ‘‘and is sold at retail,’’; and 

7 (B) in clause (ii), by inserting ‘‘when sold at re8 tail,’’ before ‘‘is designated’’. 

9 (12) Section 325 of the Energy Policy and Conserva10 tion Act (42 U.S.C. 6295) (as amended by sections 

11 321(a)(3)(A) and 322(b) of the Energy Independence and 

12 Security Act of 2007 (121 Stat. 1577, 1588)) is amended 

13 by striking subsection (i) and inserting the following: 

14 ‘‘(i) GENERAL SERVICE FLUORESCENT LAMPS, GEN15 ERAL SERVICE INCANDESCENT LAMPS, INTERMEDIATE

16 BASE INCANDESCENT LAMPS, CANDELABRA BASE INCAN17 DESCENT LAMPS, AND INCANDESCENT REFLECTOR

18 LAMPS.— 

19 ‘‘(1) ENERGY EFFICIENCY STANDARDS.— 

20 ‘‘(A) IN GENERAL.—Each of the following 

21 general service fluorescent lamps, general serv22 ice incandescent lamps, intermediate base in23 candescent lamps, candelabra base incandescent 

24 lamps, and incandescent reflector lamps manu25 factured after the effective date specified in the 


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1 tables listed in this subparagraph shall meet or 

2 exceed the following lamp efficacy, new max3 imum wattage, and CRI standards: 

‘‘FLUORESCENT LAMPS 

Lamp Type 

Nominal 

Lamp 

Wattage 

Minimum 

CRI 

Minimum Average 

Lamp Efficacy 

(LPW) 

Effective 

Date (Period of 

Months) 

4-foot medium bi-pin ................. >35 W 69 75.0 36 

.................................................... ≤35 W 45 75.0 36 

2-foot U-shaped ......................... >35 W 69 68.0 36 

.................................................... ≤35 W 45 64.0 36 

8-foot slimline ............................ 65 W 69 80.0 18 

.................................................... ≤65 W 45 80.0 18 

8-foot high output ...................... >100 W 69 80.0 18 

.................................................... ≤100 W 45 80.0 18 

‘‘INCANDESCENT REFLECTOR LAMPS 

Nominal Lamp Wattage 

Minimum Average 

Lamp Efficacy 

(LPW) 

Effective 

Date (Period of 

Months) 

40–50 ...................................................................................... 10.5 36 

51–66 ...................................................................................... 11.0 36 

67–85 ...................................................................................... 12.5 36 

86–115 .................................................................................... 14.0 36 

116–155 .................................................................................... 14.5 36 

156–205 .................................................................................... 15.0 36 

‘‘GENERAL SERVICE INCANDESCENT LAMPS 

Rated Lumen Ranges Maximum Rated 

Wattage 

Minimum 

Rated Lifetime 

Effective 

Date 

1490–2600 72 1,000 hrs 1/1/2012 

1050–1489 53 1,000 hrs 1/1/2013 

750–1049 43 1,000 hrs 1/1/2014 

310–749 29 1,000 hrs 1/1/2014 

‘‘MODIFIED SPECTRUM GENERAL SERVICE INCANDESCENT LAMPS 

Rated Lumen Ranges Maximum Rated 

Wattage 

Minimum 

Rated Lifetime 

Effective 

Date 

1118–1950 72 1,000 hrs 1/1/2012 

788–1117 53 1,000 hrs 1/1/2013 

563–787 43 1,000 hrs 1/1/2014 

232–562 29 1,000 hrs 1/1/2014 

4 ‘‘(B) APPLICATION.— 


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1 ‘‘(i) APPLICATION CRITERIA.—This 

2 subparagraph applies to each lamp that— 

3 ‘‘(I) is intended for a general 

4 service or general illumination applica5 tion (whether incandescent or not); 

6 ‘‘(II) has a medium screw base 

7 or any other screw base not defined in 

8 ANSI C81.61–2006; 

9 ‘‘(III) is capable of being oper10 ated at a voltage at least partially 

11 within the range of 110 to 130 volts; 

12 and 

13 ‘‘(IV) is manufactured or im14 ported after December 31, 2011. 

15 ‘‘(ii) REQUIREMENT.—For purposes 

16 of this paragraph, each lamp described in 

17 clause (i) shall have a color rendering 

18 index that is greater than or equal to— 

19 ‘‘(I) 80 for nonmodified spectrum 

20 lamps; or 

21 ‘‘(II) 75 for modified spectrum 

22 lamps. 

23 ‘‘(C) CANDELABRA INCANDESCENT LAMPS

24 AND INTERMEDIATE BASE INCANDESCENT

25 LAMPS.— 


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1 ‘‘(i) CANDELABRA BASE INCANDES2 CENT LAMPS.—Effective beginning Janu3 ary 1, 2012, a candelabra base incandes4 cent lamp shall not exceed 60 rated watts. 

5 ‘‘(ii) INTERMEDIATE BASE INCANDES6 CENT LAMPS.—Effective beginning Janu7 ary 1, 2012, an intermediate base incan8 descent lamp shall not exceed 40 rated 

9 watts. 

10 ‘‘(D) EXEMPTIONS.— 

11 ‘‘(i) STATUTORY EXEMPTIONS.—The 

12 standards specified in subparagraph (A) 

13 shall not apply to the following types of in14 candescent reflector lamps: 

15 ‘‘(I) Lamps rated at 50 watts or 

16 less that are ER30, BR30, BR40, or 

17 ER40 lamps. 

18 ‘‘(II) Lamps rated at 65 watts 

19 that are BR30, BR40, or ER40 

20 lamps. 

21 ‘‘(III) R20 incandescent reflector 

22 lamps rated 45 watts or less. 

23 ‘‘(ii) ADMINISTRATIVE EXEMP24 TIONS.— 


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1 ‘‘(I) PETITION.—Any person may 

2 petition the Secretary for an exemp3 tion for a type of general service lamp 

4 from the requirements of this sub5 section. 

6 ‘‘(II) CRITERIA.—The Secretary 

7 may grant an exemption under sub8 clause (I) only to the extent that the 

9 Secretary finds, after a hearing and 

10 opportunity for public comment, that 

11 it is not technically feasible to serve a 

12 specialized lighting application (such 

13 as a military, medical, public safety, 

14 or certified historic lighting applica15 tion) using a lamp that meets the re16 quirements of this subsection. 

17 ‘‘(III) ADDITIONAL CRITERION.— 

18 To grant an exemption for a product 

19 under this clause, the Secretary shall 

20 include, as an additional criterion, 

21 that the exempted product is unlikely 

22 to be used in a general service lighting 

23 application. 

24 ‘‘(E) EXTENSION OF COVERAGE.— 


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1 ‘‘(i) PETITION.—Any person may peti2 tion the Secretary to establish standards 

3 for lamp shapes or bases that are excluded 

4 from the definition of general service 

5 lamps. 

6 ‘‘(ii) INCREASED SALES OF EXEMPT7 ED LAMPS.—The petition shall include evi8 dence that the availability or sales of ex9 empted incandescent lamps have increased 

10 significantly since the date on which the 

11 standards on general service incandescent 

12 lamps were established. 

13 ‘‘(iii) CRITERIA.—The Secretary shall 

14 grant a petition under clause (i) if the Sec15 retary finds that— 

16 ‘‘(I) the petition presents evi17 dence that demonstrates that commer18 cial availability or sales of exempted 

19 incandescent lamp types have in20 creased significantly since the stand21 ards on general service lamps were es22 tablished and likely are being widely 

23 used in general lighting applications; 

24 and 


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1 ‘‘(II) significant energy savings 

2 could be achieved by covering exempt3 ed products, as determined by the 

4 Secretary based in part on sales data 

5 provided to the Secretary from manu6 facturers and importers. 

7 ‘‘(iv) NO PRESUMPTION.—The grant 

8 of a petition under this subparagraph shall 

9 create no presumption with respect to the 

10 determination of the Secretary with respect 

11 to any criteria under a rulemaking con12 ducted under this section. 

13 ‘‘(v) EXPEDITED PROCEEDING.—If 

14 the Secretary grants a petition for a lamp 

15 shape or base under this subparagraph, 

16 the Secretary shall— 

17 ‘‘(I) conduct a rulemaking to de18 termine standards for the exempted 

19 lamp shape or base; and 

20 ‘‘(II) complete the rulemaking 

21 not later than 18 months after the 

22 date on which notice is provided 

23 granting the petition. 

24 ‘‘(F) EFFECTIVE DATES.— 


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1 ‘‘(i) IN GENERAL.—In this paragraph, 

2 except as otherwise provided in a table 

3 contained in subparagraph (A) or in clause 

4 (ii), the term ‘effective date’ means the last 

5 day of the month specified in the table 

6 that follows October 24, 1992. 

7 ‘‘(ii) SPECIAL EFFECTIVE DATES.— 

8 ‘‘(I) ER, BR, AND BPAR

9 LAMPS.—The standards specified in 

10 subparagraph (A) shall apply with re11 spect to ER incandescent reflector 

12 lamps, BR incandescent reflector 

13 lamps, BPAR incandescent reflector 

14 lamps, and similar bulb shapes on and 

15 after January 1, 2008, or the date 

16 that is 180 days after the date of en17 actment of the Energy Independence 

18 and Security Act of 2007. 

19 ‘‘(II) LAMPS BETWEEN 2.25–2.75

20 INCHES IN DIAMETER.—The stand21 ards specified in subparagraph (A) 

22 shall apply with respect to incandes23 cent reflector lamps with a diameter 

24 of more than 2.25 inches, but not 

25 more than 2.75 inches, on and after 


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1 the later of January 1, 2008, or the 

2 date that is 180 days after the date of 

3 enactment of the Energy Independ4 ence and Security Act of 2007. 

5 ‘‘(2) COMPLIANCE WITH EXISTING LAW.—Not6 withstanding section 332(a)(5) and section 332(b), 

7 it shall not be unlawful for a manufacturer to sell 

8 a lamp that is in compliance with the law at the 

9 time the lamp was manufactured. 

10 ‘‘(3) RULEMAKING BEFORE OCTOBER 24, 

11 1995.— 

12 ‘‘(A) IN GENERAL.—Not later than 36 

13 months after October 24, 1992, the Secretary 

14 shall initiate a rulemaking procedure and shall 

15 publish a final rule not later than the end of 

16 the 54-month period beginning on October 24, 

17 1992, to determine whether the standards es18 tablished under paragraph (1) should be 

19 amended. 

20 ‘‘(B) ADMINISTRATION.—The rule shall 

21 contain the amendment, if any, and provide 

22 that the amendment shall apply to products 

23 manufactured on or after the 36-month period 

24 beginning on the date on which the final rule is 

25 published. 


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1 ‘‘(4) RULEMAKING BEFORE OCTOBER 24, 

2 2000.— 

3 ‘‘(A) IN GENERAL.—Not later than 8 years 

4 after October 24, 1992, the Secretary shall ini5 tiate a rulemaking procedure and shall publish 

6 a final rule not later than 9 years and 6 months 

7 after October 24, 1992, to determine whether 

8 the standards in effect for fluorescent lamps 

9 and incandescent lamps should be amended. 

10 ‘‘(B) ADMINISTRATION.—The rule shall 

11 contain the amendment, if any, and provide 

12 that the amendment shall apply to products 

13 manufactured on or after the 36-month period 

14 beginning on the date on which the final rule is 

15 published. 

16 ‘‘(5) RULEMAKING FOR ADDITIONAL GENERAL

17 SERVICE FLUORESCENT LAMPS.— 

18 ‘‘(A) IN GENERAL.—Not later than the 

19 end of the 24-month period beginning on the 

20 date labeling requirements under section 

21 324(a)(2)(C) become effective, the Secretary 

22 shall— 

23 ‘‘(i) initiate a rulemaking procedure to 

24 determine whether the standards in effect 

25 for fluorescent lamps and incandescent 


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1 lamps should be amended so that the 

2 standards would be applicable to additional 

3 general service fluorescent lamps; and 

4 ‘‘(ii) publish, not later than 18 

5 months after initiating the rulemaking, a 

6 final rule including the amended stand7 ards, if any. 

8 ‘‘(B) ADMINISTRATION.—The rule shall 

9 provide that the amendment shall apply to 

10 products manufactured after a date which is 36 

11 months after the date on which the rule is pub12 lished. 

13 ‘‘(6) STANDARDS FOR GENERAL SERVICE

14 LAMPS.— 

15 ‘‘(A) RULEMAKING BEFORE JANUARY 1, 

16 2014.— 

17 ‘‘(i) IN GENERAL.—Not later than 

18 January 1, 2014, the Secretary shall ini19 tiate a rulemaking procedure to determine 

20 whether— 

21 ‘‘(I) standards in effect for gen22 eral service lamps should be amended; 

23 and 

24 ‘‘(II) the exclusions for certain 

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1 tained or discontinued based, in part, 

2 on excluded lamp sales collected by 

3 the Secretary from manufacturers. 

4 ‘‘(ii) SCOPE.—The rulemaking— 

5 ‘‘(I) shall not be limited to incan6 descent lamp technologies; and 

7 ‘‘(II) shall include consideration 

8 of a minimum standard of 45 lumens 

9 per watt for general service lamps. 

10 ‘‘(iii) AMENDED STANDARDS.—If the 

11 Secretary determines that the standards in 

12 effect for general service lamps should be 

13 amended, the Secretary shall publish a 

14 final rule not later than January 1, 2017, 

15 with an effective date that is not earlier 

16 than 3 years after the date on which the 

17 final rule is published. 

18 ‘‘(iv) PHASED-IN EFFECTIVE

19 DATES.—The Secretary shall consider 

20 phased-in effective dates under this sub21 paragraph after considering— 

22 ‘‘(I) the impact of any amend23 ment on manufacturers, retiring and 

24 repurposing existing equipment, 


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1 stranded investments, labor contracts, 

2 workers, and raw materials; and 

3 ‘‘(II) the time needed to work 

4 with retailers and lighting designers 

5 to revise sales and marketing strate6 gies. 

7 ‘‘(v) BACKSTOP REQUIREMENT.—If 

8 the Secretary fails to complete a rule9 making in accordance with clauses (i) 

10 through (iv) or if the final rule does not 

11 produce savings that are greater than or 

12 equal to the savings from a minimum effi13 cacy standard of 45 lumens per watt, effec14 tive beginning January 1, 2020, the Sec15 retary shall prohibit the manufacture of 

16 any general service lamp that does not 

17 meet a minimum efficacy standard of 45 

18 lumens per watt. 

19 ‘‘(vi) STATE PREEMPTION.—Neither 

20 section 327(c) nor any other provision of 

21 law shall preclude California or Nevada 

22 from adopting, effective beginning on or 

23 after January 1, 2018— 


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1 ‘‘(I) a final rule adopted by the 

2 Secretary in accordance with clauses 

3 (i) through (iv); 

4 ‘‘(II) if a final rule described in 

5 subclause (I) has not been adopted, 

6 the backstop requirement under 

7 clause (v); or 

8 ‘‘(III) in the case of California, if 

9 a final rule described in subclause (I) 

10 has not been adopted, any California 

11 regulations relating to these covered 

12 products adopted pursuant to State 

13 statute in effect as of the date of en14 actment of the Energy Independence 

15 and Security Act of 2007. 

16 ‘‘(B) RULEMAKING BEFORE JANUARY 1, 

17 2020.— 

18 ‘‘(i) IN GENERAL.—Not later than 

19 January 1, 2020, the Secretary shall ini20 tiate a rulemaking procedure to determine 

21 whether— 

22 ‘‘(I) standards in effect for gen23 eral service lamps should be amended; 

24 and 


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1 ‘‘(II) the exclusions for certain 

2 incandescent lamps should be main3 tained or discontinued based, in part, 

4 on excluded lamp sales data collected 

5 by the Secretary from manufacturers. 

6 ‘‘(ii) SCOPE.—The rulemaking shall 

7 not be limited to incandescent lamp tech8 nologies. 

9 ‘‘(iii) AMENDED STANDARDS.—If the 

10 Secretary determines that the standards in 

11 effect for general service lamps should be 

12 amended, the Secretary shall publish a 

13 final rule not later than January 1, 2022, 

14 with an effective date that is not earlier 

15 than 3 years after the date on which the 

16 final rule is published. 

17 ‘‘(iv) PHASED-IN EFFECTIVE

18 DATES.—The Secretary shall consider 

19 phased-in effective dates under this sub20 paragraph after considering— 

21 ‘‘(I) the impact of any amend22 ment on manufacturers, retiring and 

23 repurposing existing equipment, 

24 stranded investments, labor contracts, 

25 workers, and raw materials; and 


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1 ‘‘(II) the time needed to work 

2 with retailers and lighting designers 

3 to revise sales and marketing strate4 gies. 

5 ‘‘(7) FEDERAL ACTIONS.— 

6 ‘‘(A) COMMENTS OF SECRETARY.— 

7 ‘‘(i) IN GENERAL.—With respect to 

8 any lamp to which standards are applicable 

9 under this subsection or any lamp specified 

10 in section 346, the Secretary shall inform 

11 any Federal entity proposing actions that 

12 would adversely impact the energy con13 sumption or energy efficiency of the lamp 

14 of the energy conservation consequences of 

15 the action. 

16 ‘‘(ii) CONSIDERATION.—The Federal 

17 entity shall carefully consider the com18 ments of the Secretary. 

19 ‘‘(B) AMENDMENT OF STANDARDS.—Not20 withstanding section 325(n)(1), the Secretary 

21 shall not be prohibited from amending any 

22 standard, by rule, to permit increased energy 

23 use or to decrease the minimum required en24 ergy efficiency of any lamp to which standards 

25 are applicable under this subsection if the acVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00171 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 tion is warranted as a result of other Federal 

2 action (including restrictions on materials or 

3 processes) that would have the effect of either 

4 increasing the energy use or decreasing the en5 ergy efficiency of the product. 

6 ‘‘(8) COMPLIANCE.— 

7 ‘‘(A) IN GENERAL.—Not later than the 

8 date on which standards established pursuant 

9 to this subsection become effective, or, with re10 spect to high-intensity discharge lamps covered 

11 under section 346, the effective date of stand12 ards established pursuant to that section, each 

13 manufacturer of a product to which the stand14 ards are applicable shall file with the Secretary 

15 a laboratory report certifying compliance with 

16 the applicable standard for each lamp type. 

17 ‘‘(B) CONTENTS.—The report shall include 

18 the lumen output and wattage consumption for 

19 each lamp type as an average of measurements 

20 taken over the preceding 12-month period. 

21 ‘‘(C) OTHER LAMP TYPES.—With respect 

22 to lamp types that are not manufactured during 

23 the 12-month period preceding the date on 

24 which the standards become effective, the re25 port shall— 


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1 ‘‘(i) be filed with the Secretary not 

2 later than the date that is 12 months after 

3 the date on which manufacturing is com4 menced; and 

5 ‘‘(ii) include the lumen output and 

6 wattage consumption for each such lamp 

7 type as an average of measurements taken 

8 during the 12-month period.’’. 

9 (13) Section 325(l)(4)(A) of the Energy Policy and 

10 Conservation Act (42 U.S.C. 6295(l)(4)(A)) (as amended 

11 by section 321(a)(3)(B) of the Energy Independence and 

12 Security Act of 2007 (121 Stat. 1581)) is amended by 

13 striking ‘‘only’’. 

14 (14) Section 327(b)(1)(B) of the Energy Policy and 

15 Conservation Act (42 U.S.C. 6297(b)(1)(B)) (as amended 

16 by section 321(d)(3) of the Energy Independence and Se17 curity Act of 2007 (121 Stat. 1585)) is amended— 

18 (A) in clause (i), by inserting ‘‘and’’ after the 

19 semicolon at the end; 

20 (B) in clause (ii), by striking ‘‘; and’’ and in21 serting a period; and 

22 (C) by striking clause (iii). 

23 (15) Section 321(e) of the Energy Independence and 

24 Security Act of 2007 (121 Stat. 1586) is amended— 


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1 (A) in the matter preceding paragraph (1), by 

2 striking ‘‘is amended’’ and inserting ‘‘(as amended 

3 by section 306(b)) is amended’’; and 

4 (B) by striking paragraphs (1) and (2) and in5 serting the following: 

6 ‘‘(1) in paragraph (5), by striking ‘or’ after the 

7 semicolon at the end; 

8 ‘‘(2) in paragraph (6), by striking the period at 

9 the end and inserting ‘; or’; and’’. 

10 (16) Section 332(a) of the Energy Policy and Con11 servation Act (42 U.S.C. 6302(a)) (as amended by section 

12 321(e) of the Energy Independence and Security Act of 

13 2007 (121 Stat. 1586)) is amended by redesignating the 

14 second paragraph (6) as paragraph (7). 

15 (17) Section 321(30)(C)(ii) of the Energy Policy and 

16 Conservation Act (42 U.S.C. 6291(30)(C)(ii)) (as amend17 ed by section 322(a)(1)(B) of the Energy Independence 

18 and Security Act of 2007 (121 Stat. 1587)) is amended 

19 by inserting a period after ‘‘40 watts or higher’’. 

20 (18) Section 322(b) of the Energy Independence and 

21 Security Act of 2007 (121 Stat. 1588)) is amended by 

22 striking ‘‘6995(i)’’ and inserting ‘‘6295(i)’’. 

23 (19) Section 327(c) of the Energy Policy and Con24 servation Act (42 U.S.C. 6297(c)) (as amended by secVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00174 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 tions 324(f) of the Energy Independence and Security Act 

2 of 2007 (121 Stat. 1594)) is amended— 

3 (A) in paragraph (6), by striking ‘‘or’’ after the 

4 semicolon at the end; 

5 (B) in paragraph (8)(B), by striking ‘‘and’’ 

6 after the semicolon at the end; 

7 (C) in paragraph (9)— 

8 (i) by striking ‘‘except that—’’ and all that 

9 follows through ‘‘if the Secretary fails to issue’’ 

10 and inserting ‘‘except that if the Secretary fails 

11 to issue’’; 

12 (ii) by redesignating clauses (i) and (ii) as 

13 subparagraphs (A) and (B), respectively; and 

14 (iii) by striking the period at the end and 

15 inserting a semicolon; and 

16 (D) by adding at the end the following: 

17 ‘‘(10) is a regulation for general service lamps 

18 that conforms with Federal standards and effective 

19 dates; 

20 ‘‘(11) is an energy efficiency standard for gen21 eral service lamps enacted into law by the State of 

22 Nevada prior to December 19, 2007, if the State has 

23 not adopted the Federal standards and effective 

24 dates pursuant to subsection (b)(1)(B)(ii); or’’. 


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1 (20) Section 325(b) of the Energy Independence and 

2 Security Act of 2007 (121 Stat. 1596)) is amended by 

3 striking ‘‘6924(c)’’ and inserting ‘‘6294(c)’’. 

4 (b) TITLE IV—ENERGY SAVINGS IN BUILDINGS AND

5 INDUSTRY.—(1) Section 401 of the Energy Independence 

6 and Security Act of 2007 (42 U.S.C. 17061) is amend7 ed— 

8 (A) in paragraph (2), by striking ‘‘484’’ and in9 serting ‘‘494’’; and 

10 (B) in paragraph (13), by striking ‘‘Agency’’ 

11 and inserting ‘‘Administration’’. 

12 (2) Section 422 of the Energy Conservation and Pro13 duction Act (42 U.S.C. 6872) (as amended by section 

14 411(a) of the Energy Independence and Security Act of 

15 2007 (121 Stat. 1600)) is amended by striking 1 of the 

16 2 periods at the end of paragraph (5). 

17 (3) Section 543 of the National Energy Conservation 

18 Policy Act (42 U.S.C. 8253) (as amended by sections 432 

19 and 434(a) of the Energy Independence and Security Act 

20 of 2007 (121 Stat. 1607, 1614)) is amended by redesig21 nating subsection (f) (as added by section 434(a) of that 

22 Act) as subsection (g). 

23 (4) Section 305(a)(3)(D)(i) of the Energy Conserva24 tion and Production Act (42 U.S.C. 6834(a)(3)(D)(i)) (as 


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1 amended by section 433(a) of the Energy Independence 

2 and Security Act of 2007 (121 Stat. 1612)) is amended— 

3 (A) in subclause (I)— 

4 (i) by striking ‘‘in fiscal year 2003 (as 

5 measured by Commercial Buildings Energy 

6 Consumption Survey or Residential Energy 

7 Consumption Survey data from the Energy In8 formation Agency’’ and inserting ‘‘as measured 

9 by the calendar year 2003 Commercial Build10 ings Energy Consumption Survey or the cal11 endar year 2005 Residential Energy Consump12 tion Survey data from the Energy Information 

13 Administration’’; and 

14 (ii) in the table at the end, by striking 

15 ‘‘Fiscal Year’’ and inserting ‘‘Calendar Year’’; 

16 and 

17 (B) in subclause (II)— 

18 (i) by striking ‘‘(II) Upon petition’’ and in19 serting the following: 

20 ‘‘(II) DOWNWARD ADJUSTMENT

21 OF NUMERIC REQUIREMENT.— 

22 ‘‘(aa) IN GENERAL.—On pe23 tition’’; and 

24 (ii) by striking the last sentence and in25 serting the following: 


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1 ‘‘(bb) EXCEPTIONS TO RE2 QUIREMENT FOR CONCURRENCE

3 OF SECRETARY.— 

4 ‘‘(AA) IN GENERAL.— 

5 The requirement to petition 

6 and obtain the concurrence 

7 of the Secretary under this 

8 subclause shall not apply to 

9 any Federal building with 

10 respect to which the Admin11 istrator of General Services 

12 is required to transmit a 

13 prospectus to Congress 

14 under section 3307 of title 

15 40, United States Code, or 

16 to any other Federal build17 ing designed, constructed, or 

18 renovated by the Adminis19 trator if the Administrator 

20 certifies, in writing, that 

21 meeting the applicable nu22 meric requirement under 

23 subclause (I) with respect to 

24 the Federal building would 

25 be technically impracticable 


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1 in light of the specific func2 tional needs for the building. 

3 ‘‘(BB) ADJUSTMENT.— 

4 In the case of a building de5 scribed in subitem (AA), the 

6 Administrator may adjust 

7 the applicable numeric re8 quirement of subclause (I) 

9 downward with respect to 

10 the building.’’. 

11 (5) Section 436(c)(3) of the Energy Independence 

12 and Security Act of 2007 (42 U.S.C. 17092(c)(3)) is 

13 amended by striking ‘‘474’’ and inserting ‘‘494’’. 

14 (6) Section 440 of the Energy Independence and Se15 curity Act of 2007 (42 U.S.C. 17096) is amended by strik16 ing ‘‘and 482’’. 

17 (7) Section 373(c) of the Energy Policy and Con18 servation Act (42 U.S.C. 6343(c)) (as amended by section 

19 451(a) of the Energy Independence and Security Act of 

20 2007 (121 Stat. 1628)) is amended by striking ‘‘Adminis21 trator’’ and inserting ‘‘Secretary’’. 

22 (c) TITLE V—ENERGY SAVINGS IN GOVERNMENT

23 AND PUBLIC INSTITUTIONS.—Section 541(3)(A)(i)(II) of 

24 the Energy Independence and Security Act of 2007 (42 


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1 U.S.C. 17151(3)(A)(i)(II)) is amended by striking ‘‘and’’ 

2 after the semicolon at the end and inserting ‘‘or’’. 

3 (d) EFFECTIVE DATE.—This section and the amend4 ments made by this section take effect as if included in 

5 the Energy Independence and Security Act of 2007 (Pub6 lic Law 110–140; 121 Stat. 1492). 

7 SEC. 162. TECHNICAL CORRECTIONS TO ENERGY POLICY 

8 ACT OF 2005. 

9 (a) TITLE I—ENERGY EFFICIENCY.—Section 

10 325(g)(8)(C)(ii) of the Energy Policy and Conservation 

11 Act (42 U.S.C. 6295(g)(8)(C)(ii)) (as added by section 

12 135(c)(2)(B) of the Energy Policy Act of 2005) is amend13 ed by striking ‘‘20°F’’ and inserting ‘‘¥20°F’’. 

14 (b) EFFECTIVE DATE.—This section and the amend15 ments made by this section take effect as if included in 

16 the Energy Policy Act of 2005 (Public Law 109–58; 119 

17 Stat. 594). 

18 Subtitle H—Clean Energy 

19 Innovation Centers 

20 SEC. 171. CLEAN ENERGY INNOVATION CENTERS. 

21 (a) PURPOSE.—The Secretary shall carry out a pro22 gram to establish Clean Energy Innovation Centers to en23 hance the Nation’s economic, environmental, and energy 

24 security by promoting commercial deployment of clean, in25 digenous energy alternatives to oil and other fossil fuels, 


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1 reducing greenhouse gas emissions, and ensuring that the 

2 United States maintains a technological lead in developing 

3 and deploying state-of-the-art energy technologies. To 

4 achieve these purposes the program shall— 

5 (1) leverage the expertise and resources of the 

6 university and private research communities, indus7 try, venture capital, national laboratories, and other 

8 participants in energy innovation to support cross9 disciplinary research and development in areas not 

10 being served by the private sector in order to develop 

11 and transfer innovative clean energy technologies 

12 into the marketplace; 

13 (2) expand the knowledge base and human cap14 ital necessary to transition to a low-carbon economy; 

15 and 

16 (3) promote regional economic development by 

17 cultivating clusters of clean energy technology firms, 

18 private research organizations, suppliers, and other 

19 complementary groups and businesses. 

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

21 (1) ALLOWANCE.—The term ‘‘allowance’’ 

22 means an emission allowance under section 721 of 

23 the Clean Air Act. 


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1 (2) CENTER.—The term ‘‘Center’’ means a 

2 Clean Energy Innovation Center established in ac3 cordance with this section. 

4 (3) CLEAN ENERGY TECHNOLOGY.—The term 

5 ‘‘clean energy technology’’ means a technology 

6 that— 

7 (A) produces energy from solar, wind, geo8 thermal, biomass, tidal, wave, ocean, and other 

9 renewable energy resources (as such term is de10 fined in section 610 of the Public Utility Regu11 latory Policies Act of 1978); 

12 (B) more efficiently transmits, distributes, 

13 or stores energy; 

14 (C) enhances energy efficiency for build15 ings and industry, including combined heat and 

16 power; 

17 (D) enables the development of a Smart 

18 Grid (as described in section 1301 of the En19 ergy Independence and Security Act of 2007 

20 (42 U.S.C. 17381)), including integration of re21 newable energy resources and distributed gen22 eration, demand response, demand side man23 agement, and systems analysis; 


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1 (E) produces an advanced or sustainable 

2 material with energy or energy efficiency appli3 cations; 

4 (F) enhances water security through im5 proved water management, conservation, dis6 tribution, and end use applications; or 

7 (G) improves energy efficiency for trans8 portation, including electric vehicles. 

9 (4) CLUSTER.—The term ‘‘cluster’’ means a 

10 concentration of firms directly involved in the re11 search, development, finance, and commercialization 

12 of clean energy technologies whose geographic prox13 imity facilitates utilization and sharing of skilled 

14 human resources, infrastructure, research facilities, 

15 educational and training institutions, venture cap16 ital, and input suppliers. 

17 (5) PROJECT.—The term ‘‘project’’ means an 

18 activity with respect to which a Center provides sup19 port under subsection (e). 

20 (6) QUALIFYING ENTITY.—The term ‘‘quali21 fying entity’’ means each of the following: 

22 (A) A research university. 

23 (B) A State institution with a focus on the 

24 advancement of clean energy technologies. 


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1 (C) A nongovernmental organization with 

2 research or commercialization expertise in clean 

3 energy technology development. 

4 (7) SECRETARY.—The term ‘‘Secretary’’ means 

5 the Secretary of Energy. 

6 (8) TECHNOLOGY FOCUS.—The term ‘‘tech7 nology focus’’ means the unique technology area in 

8 which a Center will specialize, and may include solar 

9 electricity, fuels from solar energy, batteries and en10 ergy storage, electricity grid systems and devices, en11 ergy efficient building systems and design, advanced 

12 materials, modeling and simulation, and other clean 

13 energy technology areas designated by the Secretary. 

14 (9) TRANSLATIONAL RESEARCH.—The term 

15 ‘‘translational research’’ means clean energy tech16 nology research to coordinate basic or applied re17 search with technical and commercial applications to 

18 enable promising discoveries or inventions to attract 

19 investment sufficient for market penetration and dif20 fusion. 

21 (c) ROLE OF THE SECRETARY.—The Secretary 

22 shall— 

23 (1) have ultimate responsibility for, and over24 sight of, all aspects of the program under this sec25 tion; 


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1 (2) provide for the distribution of allowances to 

2 consortia for the establishment of 8 Centers pursu3 ant to this section, with each Center designated a 

4 unique technology focus area; 

5 (3) coordinate the innovation activities of Cen6 ters with those occurring through other Department 

7 of Energy entities, including the National Labora8 tories, the Advanced Research Projects Agency—En9 ergy, and Energy Frontier Research Centers, and 

10 within industry, and to avoid duplication of research, 

11 by annually— 

12 (A) issuing guidance regarding national 

13 energy research and development priorities and 

14 strategic objectives; and 

15 (B) convening a conference of staff of the 

16 Department of Energy and representatives from 

17 such other entities to share research results, 

18 program plans, and opportunities for collabora19 tion. 

20 (d) CONSORTIUM.—A consortium shall be eligible to 

21 receive allowances to support the establishment of a Cen22 ter under this section if— 

23 (1) it is composed of— 


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1 (A) 2 research universities with a com2 bined annual research budget of $500,000,000; 

3 and 

4 (B) no fewer than 1 additional qualifying 

5 entity; 

6 (2) its members have established a binding 

7 agreement that documents— 

8 (A) the structure of the partnership agree9 ment; 

10 (B) the governance and management 

11 structure to enable cost-effective implementa12 tion of the program; 

13 (C) an intellectual property management 

14 policy; 

15 (D) conflicts of interest policy consistent 

16 with subsection (e)(4); 

17 (E) an accounting structure that meets the 

18 requirements of the Department and can be au19 dited under subsection (f)(3); and 

20 (F) has an Advisory Board consistent with 

21 subsection (e)(3); 

22 (3) it receives financial contributions from 

23 States, consortium participants, or other non-Fed24 eral sources, to be used pursuant to subsection 

25 (e)(2); 


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1 (4) it is part of an existing cluster or dem2 onstrates high potential to develop a new cluster; 

3 and 

4 (5) it operates as a nonprofit organization. 

5 (e) CLEAN ENERGY INNOVATION CENTERS.— 

6 (1) ROLE.—Centers shall provide support to ac7 tivities leading to commercial deployment of clean 

8 energy technologies pursuant to the purposes of this 

9 section through issuance of awards to projects man10 aged by qualifying entities and other entities meet11 ing the Center’s project criteria, including national 

12 laboratories. Each Center shall— 

13 (A) develop and publish for public review 

14 and comment proposed plans, programs, and 

15 project selection criteria; 

16 (B) submit an annual report to the Sec17 retary summarizing the Center’s activities, or18 ganizational expenditures, and Board members, 

19 which shall include a certification of compliance 

20 with conflict of interest policies and a descrip21 tion of each project in the research portfolio; 

22 (C) establish policies— 

23 (i) regarding intellectual property de24 veloped as a result of Center awards and 

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1 courage individual ingenuity and invention 

2 while speeding knowledge transfer and fa3 cilitating the establishment of rapid com4 mercialization pathways; 

5 (ii) to prevent resources provided to 

6 the Center from being used to displace pri7 vate sector investment likely to otherwise 

8 occur, including investment from private 

9 sector entities which are members of the 

10 consortium; 

11 (iii) to facilitate the participation of 

12 private investment firms or other private 

13 entities that invest in clean energy tech14 nologies to perform due diligence on award 

15 proposals, to participate in the award re16 view process, and to provide guidance to 

17 projects supported by the Center; and 

18 (iv) to facilitate the participation of 

19 entrepreneurs with a demonstrated history 

20 of commercializing clean energy tech21 nologies; 

22 (D) oversee project solicitations, review 

23 proposed projects, and select projects for 

24 awards; and 

25 (E) monitor project implementation. 


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1 (2) USE AND DISTRIBUTION OF AWARDS BY

2 CENTERS.—A Center shall allocate awards and other 

3 support for— 

4 (A) clean energy technology projects con5 ducting translational research and related ac6 tivities, at least 40 percent of which shall be 

7 utilized for projects related to the Center’s tech8 nology focus; and 

9 (B) administrative expenses, which may 

10 constitute no more than 10 percent of the 

11 award. 

12 (3) ADVISORY BOARDS.— 

13 (A) IN GENERAL.—Each Center shall es14 tablish an Advisory Board whose members shall 

15 have extensive and relevant scientific, technical, 

16 industry, financial, or research management ex17 pertise. The Advisory Board shall review the 

18 Center’s proposed plans, programs, project se19 lection criteria, and projects and shall ensure 

20 that projects selected for awards meet the con21 flict of interest policies of the Center. Advisory 

22 Board members other than those representing 

23 consortium members shall serve for no more 

24 than three years and must comply with conflict 

25 of interest provisions. 


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1 (B) MEMBERS.—Each Advisory Board 

2 shall consist of— 

3 (i) 5 members selected by the consor4 tium’s research universities; 

5 (ii) 2 members selected by the consor6 tium’s other qualifying entities; and 

7 (iii) 2 members selected at large by 

8 other Board members to represent the en9 trepreneur and venture capital commu10 nities. 

11 Individuals appointed under clause (iii) shall 

12 not be State or Federal employees or affiliated 

13 with the consortium’s qualified entities. 

14 (C) NONVOTING MEMBERS.—The Board 

15 shall also include 1 nonvoting member ap16 pointed by the Secretary. 

17 (D) COMPENSATION.—Members of an Ad18 visory Board may receive reimbursement for 

19 travel expenses and a reasonable stipend. 

20 (4) CONFLICT OF INTEREST.— 

21 (A) PROCEDURES.—Centers shall establish 

22 procedures to ensure that employees or con23 sortia designees for Center activities who are in 

24 decisionmaking capacities shall— 


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1 (i) disclose any financial interests in, 

2 or financial relationships with, applicants 

3 for or recipients of awards under para4 graph (1), including those of his or her 

5 spouse or minor child, unless such relation6 ships or interests would be considered to 

7 be remote or inconsequential; and 

8 (ii) recuse himself or herself from any 

9 funding decision for projects in which he 

10 or she has a personal financial interest. 

11 (B) DISQUALIFICATION AND REVOCA12 TION.—The Secretary may disqualify an appli13 cation or revoke allowances distributed to the 

14 Center or awards provided under paragraph 

15 (1), if cognizant officials of the Center fail to 

16 comply with procedures required under sub17 paragraph (A). 

18 (f) DISTRIBUTION OF ALLOWANCES TO CLEAN EN19 ERGY INNOVATION CENTERS.— 

20 (1) SELECTION AND SCHEDULE.—Allowances to 

21 support the establishment of a Center shall be dis22 tributed through a competitive process. Not later 

23 than 120 days after the date of enactment of this 

24 Act, the Secretary shall solicit proposals from eligi25 ble consortia to establish Centers, which shall be 


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1 submitted not later than 180 days after the date of 

2 enactment of this Act. The Secretary shall select the 

3 program consortia not later than 270 days after the 

4 date of enactment of this Act pursuant to subsection 

5 (d). The Secretary shall award 3 grants for the es6 tablishment of 3 Centers of Excellence to be located 

7 on the campus of 1890 Land Grant Institution (as 

8 defined in section 2 of the Agricultural Research, 

9 Extension, and Education Reform Act of 1998 (7 

10 U.S.C. 7061)). 

11 (2) TERM AND USE OF ALLOWANCES.—Allow12 ances distributed to Centers shall be used to provide 

13 awards pursuant to subsection (e)(1). The amount 

14 of allowances distributed to support the establish15 ment of a Center under this section shall not be less 

16 than 10 and not more than 30 percent of the allow17 ances allocated under section 782(h) of the Clean 

18 Air Act, each year for a 6 year period. Centers shall 

19 be eligible to compete for additional allowance dis20 tribution after the expiration of the initial period. 

21 Centers shall establish award periods for individual 

22 awards. The transfer of allowances to a Center shall 

23 occur at the start of each calendar year. 

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1 ances distributed to the Center, and awards under 

2 subsection (e) have been utilized in a manner con3 sistent with this section. The auditor shall transmit 

4 a report of the results of the audit to the Secretary 

5 and to the Government Accountability Office. The 

6 Secretary shall include such report in the annual re7 port to Congress, along with a plan to remedy any 

8 deficiencies cited in the report. The Government Ac9 countability Office may review such audits as appro10 priate and shall have full access to the books, 

11 records, and personnel of the Center to ensure that 

12 allowances distributed to the Center, and awards 

13 made under subsection (e), have been utilized in a 

14 manner consistent with this section. 

15 Subtitle I—Marine Spatial 

16 Planning 

17 SEC. 181. STUDY OF OCEAN RENEWABLE ENERGY AND 

18 TRANSMISSION PLANNING AND SITING. 

19 (a) DEFINITIONS.—In this section: 

20 (1) MARINE SPATIAL PLAN.—The term ‘‘marine 

21 spatial plan’’ means the analysis and allocation of 

22 ocean space for various uses to achieve ecological, 

23 economic, and social objectives, based on the prin24 ciple of ecosystem-based management. 


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1 (2) MARINE SPATIAL PLANNING.—The term 

2 ‘‘marine spatial planning’’ means the process of de3 veloping a marine spatial plan. 

4 (3) ECOSYSTEM-BASED MANAGEMENT.—The 

5 term ‘‘ecosystem-based management’’ means a man6 agement approach that ensures the future ecological 

7 and economic sustainability of natural resources 

8 by— 

9 (A) accounting for all ecosystem inter10 actions and direct, indirect, and cumulative im11 pacts of human activities on the ecosystem; 

12 (B) emphasizing protection of ecosystem 

13 structure, functions, patterns, and processes; 

14 and 

15 (C) maintaining ecosystems in a healthy 

16 and resilient condition. 

17 (4) OFFSHORE RENEWABLE ENERGY.—The 

18 term ‘‘offshore renewable energy’’ means energy 

19 generated from offshore wind or offshore 

20 hydrokinetic (wave, tidal, ocean current, and tidal21 current) energy technologies. 

22 (5) OFFSHORE RENEWABLE ENERGY FACIL23 ITY.—The term ‘‘offhsore renewable energy facility’’ 

24 means a facility that generates offshore renewable 


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1 energy or any offshore transmission line associated 

2 with such facility. 

3 (b) STUDY.— 

4 (1) IN GENERAL.—As soon as practicable after 

5 the date of enactment of this section, the Federal 

6 Energy Regulatory Commission, the Secretary of the 

7 Interior, and the National Oceanic and Atmospheric 

8 Administration, in consultation with the Council on 

9 Environmental Quality and, as appropriate, coastal 

10 States, regional organizations of coastal States, and 

11 relevant nongovernmental organizations, shall jointly 

12 conduct a study of the potential for marine spatial 

13 planning to facilitate the development of offshore re14 newable energy facilities in a manner that protects 

15 and maintains coastal and marine ecosystem health. 

16 (2) REQUIREMENTS.—The study under para17 graph (1) shall include— 

18 (A) identification of the steps involved in 

19 regional marine spatial planning for the siting 

20 of offshore renewable energy facilities; 

21 (B) a recommended approach for the de22 velopment of regional marine spatial plans for 

23 the siting of offshore renewable energy facilities 

24 that provides for— 


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1 (i) the participation of relevant Fed2 eral agencies and State governments; 

3 (ii) coordination, to the maximum ex4 tent practicable, with any marine spatial 

5 planning undertaken by States; 

6 (iii) public input; and 

7 (iv) the periodic revision of such plans 

8 as necessary to account for significant new 

9 information and ensure achievement of 

10 plan objectives; 

11 (C) identification of required elements of 

12 such regional marine spatial plans, including 

13 rules that Federal agencies shall apply to appli14 cations for any authorizations required under 

15 existing Federal law to construct or operate off16 shore renewable energy facilities within areas 

17 covered by such plans; 

18 (D) an assessment of the adequacy of ex19 isting data, including baseline environmental 

20 data, to support such marine spatial planning 

21 and identification of gaps in such data and the 

22 studies needed to fill such gaps; 

23 (E) an assessment of the resources re24 quired to carry out such marine spatial plan25 ning; 


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1 (F) recommended mechanisms for the for2 mal adoption and implementation of regional 

3 marine spatial plans for the development of off4 shore renewable energy facilities by relevant 

5 Federal agencies; 

6 (G) identification of any additional author7 ity relevant Federal agencies would need to 

8 adopt and implement regional marine spatial 

9 plans for the development of offshore renewable 

10 energy facilities; and 

11 (H) such other recommendations as appro12 priate. 

13 (3) REPORT.—Not later than 6 months after 

14 the date of enactment of this section, the Federal 

15 Energy Regulatory Commission, the Secretary of the 

16 Interior, and the National Oceanic and Atmospheric 

17 Administration shall jointly publish the findings and 

18 recommendations of the study conducted pursuant 

19 to this subsection and shall accept public comment 

20 for at least 30 days after such publication. Following 

21 consideration of any public comments, and not later 

22 than 8 months after the date of enactment of this 

23 section, the Federal Energy Regulatory Commission, 

24 the Secretary of the Interior, and the National Oce25 anic and Atmospheric Administration shall jointly 


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1 submit to Congress and the Council on Environ2 mental Quality the findings and recommendations of 

3 the study conducted pursuant to this subsection. 

4 (c) ASSESSMENT OF REPORT.— 

5 (1) IN GENERAL.—Not later than 4 months 

6 after the date of submission of the report required 

7 under subsection (b)(3), the Council on Environ8 mental Quality shall assess the recommendations of 

9 such report, issue a written determination as to 

10 whether the recommended approach to marine spa11 tial planning should be implemented, and transmit 

12 such written determination to the relevant Federal 

13 agencies and Congress. 

14 (2) COORDINATION FOR RECOMMENDED AP15 PROACH.—If the Council on Environmental Quality 

16 determines that the recommended approach to ma17 rine spatial planning should be implemented, the rel18 evant Federal agencies shall implement such ap19 proach no later than 18 months after the written de20 termination required by paragraph (1), and the 

21 Council on Environmental Quality shall coordinate 

22 such implementation. At the time of the written de23 termination required by paragraph (1), the Council 

24 on Environmental Quality shall notify Congress if 


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1 the relevant Federal agencies lack authority to carry 

2 out any aspect of the recommended approach. 

3 (3) ALTERNATIVE APPROACH.—If the Council 

4 on Environmental Quality determines that the rec5 ommended approach to marine spatial planning 

6 should not be implemented, the Council on Environ7 mental Quality shall formulate an alternative ap8 proach and submit such alternative approach to the 

9 relevant Federal agencies and Congress at the time 

10 of the written determination required by paragraph 

11 (1). 

12 (d) RELATIONSHIP TO EXISTING LAW.—Nothing in 

13 this section shall affect or be construed to affect any law, 

14 regulation, or memoranda of understanding governing the 

15 development of offshore renewable energy facilities in ef16 fect prior to the implementation of the recommended or 

17 alternative approach pursuant to subsection (c). 

18 (e) AUTHORIZATION.—There are authorized to be ap19 propriated such sums as may be necessary to carry out 

20 this section. 


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1 TITLE II—ENERGY EFFICIENCY 

2 Subtitle A—Building Energy 

3 Efficiency Programs 

4 SEC. 201. GREATER ENERGY EFFICIENCY IN BUILDING 

5 CODES. 

6 Section 304 of the Energy Conservation and Produc7 tion Act (42 U.S.C. 6833) is amended to read as follows: 

8 ‘‘SEC. 304. GREATER ENERGY EFFICIENCY IN BUILDING 

9 CODES. 

10 ‘‘(a) ENERGY EFFICIENCY TARGETS.— 

11 ‘‘(1) IN GENERAL.—Except as provided in para12 graph (2) or (3), the national building code energy 

13 efficiency target for the national average percentage 

14 improvement of a building’s energy performance 

15 when built to a code meeting the target shall be— 

16 ‘‘(A) effective on the date of enactment of 

17 the American Clean Energy and Security Act of 

18 2009, 30 percent reduction in energy use rel19 ative to a comparable building constructed in 

20 compliance with the baseline code; 

21 ‘‘(B) effective January 1, 2014, for resi22 dential buildings, and January 1, 2015, for 

23 commercial buildings, 50 percent reduction in 

24 energy use relative to the baseline code; and 


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1 ‘‘(C) effective January 1, 2017, for resi2 dential buildings, and January 1, 2018, for 

3 commercial buildings, and every 3 years there4 after, respectively, through January 1, 2029, 

5 and January 1, 2030, 5 percent additional re6 duction in energy use relative to the baseline 

7 code. 

8 ‘‘(2) CONSENSUS-BASED CODES.—If on any ef9 fective date specified in paragraph (1)(A), (B), or 

10 (C) a successor code to the baseline codes provides 

11 for greater reduction in energy use than is required 

12 under paragraph (1), the overall percentage reduc13 tion in energy use provided by that successor code 

14 shall be the national building code energy efficiency 

15 target. 

16 ‘‘(3) TARGETS ESTABLISHED BY SECRETARY.— 

17 The Secretary may by rule establish a national 

18 building code energy efficiency target for residential 

19 or commercial buildings achieving greater reductions 

20 in energy use than the targets prescribed in para21 graph (1) or (2) if the Secretary determines that 

22 such greater reductions in energy use can be 

23 achieved with a code that is life cycle cost-justified 

24 and technically feasible. The Secretary may by rule 

25 establish a national building code energy efficiency 


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1 target for residential or commercial buildings achiev2 ing a reduction in energy use that is greater than 

3 zero but less than the targets prescribed in para4 graph (1) or (2) if the Secretary determines that 

5 such lesser target is the maximum reduction in en6 ergy use that can be achieved through a code that 

7 is life cycle cost-justified and technically feasible. 

8 ‘‘(4) ADDITIONAL REDUCTIONS IN ENERGY

9 USE.—Effective on January 1, 2033, and once every 

10 3 years thereafter, the Secretary shall determine, 

11 after notice and opportunity for comment, whether 

12 further energy efficiency building code improvements 

13 for residential or commercial buildings, respectively, 

14 are life cycle cost-justified and technically feasible, 

15 and shall establish updated national building code 

16 energy efficiency targets that meet such criteria. 

17 ‘‘(5) ZERO-NET-ENERGY BUILDINGS.—In set18 ting targets under this subsection, the Secretary 

19 shall consider ways to support the deployment of 

20 distributed renewable energy technology, and shall 

21 seek to achieve the goal of zero-net-energy commer22 cial buildings established in section 422 of the En23 ergy Independence and Security Act of 2007 (42 

24 U.S.C. 17082). 


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1 ‘‘(6) BASELINE CODE.—For purposes of this 

2 section, the term ‘baseline code’ means— 

3 ‘‘(A) for residential buildings, the 2006 

4 International Energy Conservation Code 

5 (IECC) published by the International Code 

6 Council; and 

7 ‘‘(B) for commercial buildings, the code 

8 published in ASHRAE Standard 90.1–2004. 

9 ‘‘(7) CONSULTATION.—In establishing the tar10 gets required by this section, the Secretary shall 

11 consult with the Director of the National Institute of 

12 Standards and Technology. 

13 ‘‘(b) NATIONAL ENERGY EFFICIENCY BUILDING

14 CODES.— 

15 ‘‘(1) REQUIREMENT.— 

16 ‘‘(A) IN GENERAL.—There shall be estab17 lished national energy efficiency building codes 

18 under this subsection, for residential and com19 mercial buildings, sufficient to meet each of the 

20 national building code energy efficiency targets 

21 established under subsection (a), not later than 

22 the date that is one year after the deadline for 

23 establishment of each such target. 

24 ‘‘(B) EXISTING CODE.—If the Secretary 

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1 line for establishing a target that one or more 

2 energy efficiency building codes published by a 

3 recognized consensus-based code development 

4 organization meet or exceed the established tar5 get, the Secretary shall select the code that 

6 meets the target with the highest efficiency in 

7 the most cost-effective manner, and such code 

8 shall be the national energy efficiency building 

9 code. 

10 ‘‘(C) REQUIREMENT TO ESTABLISH

11 CODE.—If the Secretary does not make a find12 ing under subparagraph (B), the national en13 ergy efficiency building code shall be established 

14 by rule by the Secretary under paragraph (2). 

15 ‘‘(2) ESTABLISHMENT BY SECRETARY.— 

16 ‘‘(A) PROCEDURE.—In order to establish a 

17 national energy efficiency building code as re18 quired under paragraph (1)(C), the Secretary 

19 shall— 

20 ‘‘(i) not later than six months prior to 

21 the effective date for each target, review 

22 existing and proposed codes published or 

23 under review by recognized consensus24 based code development organizations; 


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1 ‘‘(ii) determine the percentage of en2 ergy efficiency improvements that are or 

3 would be achieved in such published or 

4 proposed code versions relative to the tar5 get; 

6 ‘‘(iii) propose improvements to such 

7 published or proposed code versions suffi8 cient to meet or exceed the target; and 

9 ‘‘(iv) unless a finding is made under 

10 paragraph (1)(B) with respect to a code 

11 published by a recognized consensus-based 

12 code development organization, adopt a 

13 code that meets or exceeds the relevant na14 tional building code energy efficiency tar15 get by not later than one year after the ef16 fective date of such target. 

17 ‘‘(B) CALCULATIONS.—Each code estab18 lished by the Secretary under this paragraph 

19 shall be set at the maximum level the Secretary 

20 determines is life cycle cost-justified and tech21 nically feasible, in accordance with the fol22 lowing: 

23 ‘‘(i) SAVINGS CALCULATIONS.—Cal24 culations of energy savings shall take into 

25 account the typical lifetimes of different 


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1 products, measures, and system configura2 tions. 

3 ‘‘(ii) COST-EFFECTIVENESS CALCULA4 TIONS.—Calculations of life cycle cost-ef5 fectiveness shall be based on life cycle cost 

6 methods and procedures under section 544 

7 of the National Energy Conservation Pol8 icy Act (42 U.S.C. 8254), but shall incor9 porate to the extent feasible externalities 

10 such as impacts on climate change and on 

11 peak energy demand that are not already 

12 incorporated in assumed energy costs. 

13 ‘‘(C) CONSIDERATIONS.—In developing a 

14 national energy efficiency building code under 

15 this paragraph, the Secretary shall consider— 

16 ‘‘(i) for residential codes— 

17 ‘‘(I) residential building stand18 ards published or proposed by 

19 ASHRAE; 

20 ‘‘(II) residential building codes 

21 published or proposed in the Inter22 national Energy Conservation Code 

23 (IECC); 

24 ‘‘(III) data from the Residential 

25 Energy Services Network (RESNET) 


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1 on compliance measures utilized by 

2 consumers to qualify for the residen3 tial energy efficiency tax credits estab4 lished under the Energy Policy Act of 

5 2005; 

6 ‘‘(IV) data and information from 

7 the Department of Energy’s Building 

8 America Program; 

9 ‘‘(V) data and information from 

10 the Energy Star New Homes pro11 gram; 

12 ‘‘(VI) data and information from 

13 the New Building Institute and simi14 lar organizations; and 

15 ‘‘(VII) standards for practices 

16 and materials to achieve cool roofs in 

17 residential buildings, taking into con18 sideration reduced air conditioning en19 ergy use as a function of cool roofs, 

20 the potential reduction in global 

21 warming from increased solar reflec22 tance from buildings, and cool roofs 

23 criteria in State and local building 

24 codes and in national and local vol25 untary programs; and 


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1 ‘‘(ii) for commercial codes— 

2 ‘‘(I) commercial building stand3 ards proposed by ASHRAE; 

4 ‘‘(II) commercial building codes 

5 proposed in the International Energy 

6 Conservation Code (IECC); 

7 ‘‘(III) the Core Performance Cri8 teria published by the New Buildings 

9 Institute; 

10 ‘‘(IV) data and information de11 veloped by the Director of the Com12 mercial High-Performance Green 

13 Building Office of the Department of 

14 Energy and any public-private part15 nerships established under that Office; 

16 ‘‘(V) data and information from 

17 the Energy Star for Buildings pro18 gram; 

19 ‘‘(VI) data and information from 

20 the New Building Institute, 

21 RESNET, and similar organizations; 

22 and 

23 ‘‘(VII) standards for practices 

24 and materials to achieve cool roofs in 

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1 sideration reduced air conditioning en2 ergy use as a function of cool roofs, 

3 the potential reduction in global 

4 warming from increased solar reflec5 tance from buildings, and cool roofs 

6 criteria in State and local building 

7 codes and in national and local vol8 untary programs. 

9 ‘‘(D) CONSULTATION.—In establishing any 

10 national energy efficiency building code re11 quired by this section, the Secretary shall con12 sult with the Director of the National Institute 

13 of Standards and Technology. 

14 ‘‘(3) CONSENSUS STANDARD ASSISTANCE.—(A) 

15 To support the development of consensus standards 

16 that may provide the basis for national energy effi17 ciency building codes, minimize duplication of effort, 

18 encourage progress through consensus, and facilitate 

19 the development of greater building efficiency, the 

20 Secretary shall provide assistance to recognized con21 sensus-based code development organizations to de22 velop, and where the relevant code has been adopted 

23 as the national code, disseminate consensus based 

24 energy efficiency building codes as provided in this 

25 paragraph. 


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1 ‘‘(B) Upon a finding by the Secretary that a 

2 code developed by such an organization meets a tar3 get established under subsection (a), the Secretary 

4 shall— 

5 ‘‘(i) send notice of the Secretary’s finding 

6 to all duly authorized or appointed State and 

7 local code agencies; and 

8 ‘‘(ii) provide sufficient support to such an 

9 organization to make the code available on the 

10 Internet, or to accomplish distribution of such 

11 code to all such State and local code agencies 

12 at no cost to the State and local code agencies. 

13 ‘‘(C) The Secretary may contract with such an 

14 organization and with other organizations with ex15 pertise on codes to provide training for State and 

16 local code officials and building inspectors in the im17 plementation and enforcement of such code. 

18 ‘‘(D) The Secretary may provide grants and 

19 other support to such an organization to— 

20 ‘‘(i) develop appropriate refinements to 

21 such code; and 

22 ‘‘(ii) support analysis of options for im23 provements in the code to meet the next sched24 uled target. 


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1 ‘‘(4) CODE DEVELOPED BY SECRETARY.—If the 

2 Secretary establishes a national energy efficiency 

3 building code under paragraph (2), the Secretary 

4 shall— 

5 ‘‘(A) to the extent that such code is based 

6 on a prior code developed by a recognized con7 sensus-based code development organization, 

8 negotiate and provide appropriate compensation 

9 to such organization for the use of the code ma10 terials that remain in the code established by 

11 the Secretary; and 

12 ‘‘(B) disseminate the national energy effi13 ciency building codes to State and local code of14 ficials, and support training and provide guid15 ance and technical assistance to such officials 

16 as appropriate. 

17 ‘‘(c) STATE ADOPTION OF ENERGY EFFICIENCY

18 BUILDING CODES.— 

19 ‘‘(1) REQUIREMENT.—Not later than 1 year 

20 after a national energy efficiency building code for 

21 residential or commercial buildings is established or 

22 revised under subsection (b), each State— 

23 ‘‘(A) shall— 

24 ‘‘(i) review and update the provisions 

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1 ciency to meet or exceed the target met in 

2 the new national code, to achieve equiva3 lent or greater energy savings; 

4 ‘‘(ii) document, where local govern5 ments establish building codes, that local 

6 governments representing not less than 80 

7 percent of the State’s urban population 

8 have adopted the new national code, or 

9 have adopted local codes that meet or ex10 ceed the target met in the new national 

11 code to achieve equivalent or greater en12 ergy savings; or 

13 ‘‘(iii) adopt the new national code; 

14 and 

15 ‘‘(B) shall provide a certification to the 

16 Secretary demonstrating that energy efficiency 

17 building code provisions that apply throughout 

18 the State meet or exceed the target met by the 

19 new national code, to achieve equivalent or 

20 greater energy savings. 

21 ‘‘(2) CONFIRMATION.— 

22 ‘‘(A) REQUIREMENT.—Not later than 90 

23 days after a State certification is provided 

24 under paragraph (1)(B), the Secretary shall de25 termine whether the State’s energy efficiency 


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1 building code provisions meet the requirements 

2 of this subsection. 

3 ‘‘(B) ACCEPTANCE BY SECRETARY.—If the 

4 Secretary determines under subparagraph (A) 

5 that the State’s energy efficiency building code 

6 or codes meet the requirements of this sub7 section, the Secretary shall accept the certifi8 cation. 

9 ‘‘(C) DEFICIENCY NOTICE.—If the Sec10 retary determines under subparagraph (A) that 

11 the State’s building code or codes do not meet 

12 the requirements of this subsection, the Sec13 retary shall identify the deficiency in meeting 

14 the national building code energy efficiency tar15 get, and, to the extent possible, indicate areas 

16 where further improvement in the State’s code 

17 provisions would allow the deficiency to be 

18 eliminated. 

19 ‘‘(D) REVISION OF CODE AND RECERTIFI20 CATION.—A State may revise its code or codes 

21 and submit a recertification under paragraph 

22 (1)(B) to the Secretary at any time. 

23 ‘‘(3) COMPLIANT CODE.—For the purposes of 

24 meeting the target described in subsection (a)(1)(A) 

25 for residential buildings, a State that adopts the 


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1 code represented in California’s Title 24–2009 by 

2 the date two years after the date of enactment of the 

3 American Clean Energy and Security Act of 2009 

4 shall be considered to have met the requirements of 

5 this subsection for the applicable period. 

6 ‘‘(d) APPLICATION OF NATIONAL CODE TO STATE

7 AND LOCAL JURISDICTIONS.— 

8 ‘‘(1) IN GENERAL.—Upon the expiration of 1 

9 year after a national energy efficiency building code 

10 is established under subsection (b), in any jurisdic11 tion where the State has not had a certification re12 lating to that code accepted by the Secretary under 

13 subsection (c)(2)(B), and the local government has 

14 not had a certification relating to that code accepted 

15 by the Secretary under subsection (e)(6)(B), the na16 tional code shall become the applicable energy effi17 ciency building code for such jurisdiction. 

18 ‘‘(2) STATE LEGISLATIVE ADOPTION.—In a 

19 State in which the relevant building energy code is 

20 adopted legislatively, the deadline in paragraph (1) 

21 shall not be earlier than 1 year after the first day 

22 that the legislature meets following establishment of 

23 a national energy efficiency building code. 

24 ‘‘(3) VIOLATIONS.—It shall be a violation of 

25 this section for an owner or builder of a building to 


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1 knowingly occupy, permit occupancy of, or convey 

2 the building if the building is subject to the require3 ments of— 

4 ‘‘(A) a State energy efficiency building 

5 code with respect to which a certification has 

6 been accepted by the Secretary under sub7 section (c)(2)(B); 

8 ‘‘(B) a local energy efficiency building code 

9 with respect to which a certification has been 

10 accepted by the Secretary under subsection 

11 (e)(6)(B); or 

12 ‘‘(C) a national energy efficiency building 

13 code adopted under subsection (c)(1)(A)(i) or 

14 made applicable under paragraph (1) of this 

15 subsection, 

16 if the building was constructed out of compliance 

17 with such code. 

18 ‘‘(e) STATE ENFORCEMENT OF ENERGY EFFICIENCY

19 BUILDING CODES.— 

20 ‘‘(1) IN GENERAL.—Each State, or where appli21 cable under State law each local government, shall 

22 implement and enforce applicable State or local 

23 codes with respect to which a certification was ac24 cepted by the Secretary under subsection (c)(2)(B) 

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1 tional energy efficiency building codes, as provided 

2 in this subsection. 

3 ‘‘(2) STATE CERTIFICATION.—Not later than 2 

4 years after the date of a certification under sub5 section (c)(1) or the establishment of a national en6 ergy efficiency building code under subsection (b), 

7 each State shall certify that it has— 

8 ‘‘(A) achieved compliance with— 

9 ‘‘(i) State codes, or, as provided under 

10 State law, local codes, with respect to 

11 which a certification was accepted by the 

12 Secretary under subsection (c)(2)(B); or 

13 ‘‘(ii) the national energy efficiency 

14 building code, as applicable; or 

15 ‘‘(B) for any certification submitted within 

16 7 years after the date of enactment of the 

17 American Clean Energy and Security Act of 

18 2009, made significant progress toward achiev19 ing such compliance. 

20 ‘‘(3) ACHIEVING COMPLIANCE.—A State shall 

21 be considered to achieve compliance with a code de22 scribed in paragraph (2)(A) if at least 90 percent of 

23 new and substantially renovated building space in 

24 that State in the preceding year upon inspection 

25 meets the requirements of the code. A certification 


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1 under paragraph (2) shall include documentation of 

2 the rate of compliance based on— 

3 ‘‘(A) independent inspections of a random 

4 sample of the new and substantially renovated 

5 buildings covered by the code in the preceding 

6 year; or 

7 ‘‘(B) an alternative method that yields an 

8 accurate measure of compliance as determined 

9 by the Secretary. 

10 ‘‘(4) SIGNIFICANT PROGRESS.—A State shall be 

11 considered to have made significant progress toward 

12 achieving compliance with a code described in para13 graph (2)(A) if— 

14 ‘‘(A) the State has developed a plan, in15 cluding for hiring enforcement staff, providing 

16 training, providing manuals and checklists, and 

17 instituting enforcement programs, designed to 

18 achieve full compliance within 5 years after the 

19 date of the adoption of the code; 

20 ‘‘(B) the State is taking significant, timely, 

21 and measurable action to implement that plan; 

22 ‘‘(C) the State has not reduced its expendi23 tures for code enforcement; and 

24 ‘‘(D) at least 50 percent of new and sub25 stantially renovated building space in the State 


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1 in the preceding year upon inspection meets the 

2 requirements of the code. 

3 ‘‘(5) SECRETARY’S DETERMINATION.—Not later 

4 than 90 days after a State certification under para5 graph (2), the Secretary shall determine whether the 

6 State has demonstrated that it has complied with 

7 the requirements of this subsection, including accu8 rate measurement of compliance, or that it has made 

9 significant progress toward compliance. If such de10 termination is positive, the Secretary shall accept 

11 the certification. If the determination is negative, 

12 the Secretary shall identify the areas of deficiency. 

13 ‘‘(6) OUT OF COMPLIANCE.— 

14 ‘‘(A) IN GENERAL.—Any State for which 

15 the Secretary has not accepted a certification 

16 under paragraph (5) by a deadline established 

17 under this subsection is out of compliance with 

18 this section. 

19 ‘‘(B) LOCAL COMPLIANCE.—In any State 

20 that is out of compliance with this section as 

21 provided in subparagraph (A), a local govern22 ment may be in compliance with this section by 

23 meeting all certification requirements applicable 

24 to the State. 


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1 ‘‘(C) NONCOMPLIANCE.—Any State that is 

2 not in compliance with this section, as provided 

3 in subparagraph (A), shall, until the State re4 gains such compliance, be ineligible to receive— 

5 ‘‘(i) emission allowances pursuant to 

6 subsection (h)(1); 

7 ‘‘(ii) Federal funding in excess of that 

8 State’s share (calculated according to the 

9 allocation formula in section 363 of the 

10 Energy Policy and Conservation Act (42 

11 U.S.C. 6323)) of $125,000,000 each year; 

12 and 

13 ‘‘(iii) for— 

14 ‘‘(I) the first year for which the 

15 State is out of compliance, 25 percent 

16 of any additional funding or other 

17 items of monetary value otherwise 

18 provided under the American Clean 

19 Energy and Security Act of 2009; 

20 ‘‘(II) the second year for which 

21 the State is out of compliance, 50 per22 cent of any additional funding or 

23 other items of monetary value other24 wise provided under the American 


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1 Clean Energy and Security Act of 

2 2009; 

3 ‘‘(III) the third year for which 

4 the State is out of compliance, 75 per5 cent of any additional funding or 

6 other items of monetary value other7 wise provided under the American 

8 Clean Energy and Security Act of 

9 2009; and 

10 ‘‘(IV) the fourth and subsequent 

11 years for which the State is out of 

12 compliance, 100 percent of any addi13 tional funding or other items of mone14 tary value otherwise provided under 

15 the American Clean Energy and Secu16 rity Act of 2009. 

17 ‘‘(f) FEDERAL ENFORCEMENT.—Where a State fails 

18 and local governments in that State also fail to enforce 

19 the applicable State or national energy efficiency building 

20 codes, the Secretary shall enforce such codes, as follows: 

21 ‘‘(1) The Secretary shall establish, by rule, 

22 within 2 years after the date of enactment of the 

23 American Clean Energy and Security Act of 2009, 

24 an energy efficiency building code enforcement capa25 bility. 


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1 ‘‘(2) Such enforcement capability shall be de2 signed to achieve 90 percent compliance with such 

3 code in any State within 1 year after the date of the 

4 Secretary’s determination that such State is out of 

5 compliance with this section. 

6 ‘‘(3) The Secretary may set and collect reason7 able inspection fees to cover the costs of inspections 

8 required for such enforcement. Revenue from fees 

9 collected shall be available to the Secretary to carry 

10 out the requirements of this section upon appropria11 tion. 

12 ‘‘(g) ENFORCEMENT PROCEDURES.—(1) The Sec13 retary shall assess a civil penalty for violations of this sec14 tion, pursuant to subsection (d)(3), in accordance with the 

15 procedures described in section 333(d) of the Energy Pol16 icy and Conservation Act (42 U.S.C. 6303). The United 

17 States district courts shall also have jurisdiction to re18 strain any violation of this section or rules adopted there19 under, in accordance with the procedures described in sec20 tion 334 of the Energy Policy and Conservation Act (42 

21 U.S.C. 6304). 

22 ‘‘(2) Each day of unlawful occupancy shall be consid23 ered a separate violation. 

24 ‘‘(3) In the event a building constructed out of com25 pliance with the applicable code has been conveyed by a 


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1 knowing builder or knowing seller to an unknowing pur2 chaser, the builder or seller shall be the violator. 

3 ‘‘(h) FEDERAL SUPPORT.— 

4 ‘‘(1) ALLOWANCE ALLOCATION FOR STATE

5 COMPLIANCE.—Not later than June 1, 2011, and on 

6 that date in each year thereafter, the Administrator 

7 shall provide emission allowances to the SEED Ac8 count for each State that the Secretary identifies as 

9 a State from which he has accepted the State’s cer10 tification under subsection (e)(5) for compliance 

11 with the then current national energy efficiency 

12 building codes. Such allowances shall be distributed 

13 from an amount of 0.5 percent of the allowances 

14 made available for each year pursuant to the Amer15 ican Clean Energy and Security Act of 2009 to each 

16 State in accordance with a formula established by 

17 the Secretary as follows: 

18 ‘‘(A) One-fifth in an equal amount to each 

19 of the 50 States and United States territories. 

20 ‘‘(B) Two-fifths as a function of the rel21 ative energy use in all buildings in each State 

22 in the most recent year for which data is avail23 able. 

24 ‘‘(C) Two-fifths based on the number of 

25 building construction starts recorded in each 


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1 State, the number of new building permits ap2 plied for in each State, or other relevant avail3 able data indicating building activity in each 

4 State, in the judgment of the Secretary, for the 

5 year prior to the year of the allocation. 

6 ‘‘(2) ALLOWANCE ALLOCATION TO LOCAL GOV7 ERNMENTS.—In the instance that the Secretary cer8 tifies that one or more local governments are in com9 pliance with this section pursuant to subsection 

10 (e)(6)(B), the Administrator shall provide to each 

11 such local government the portion of the emission al12 lowances that would have been provided to that 

13 State as a function of the population of that locality 

14 as a proportion of the population of that State as a 

15 whole. 

16 ‘‘(3) UNALLOCATED ALLOWANCES.—To the ex17 tent that allowances are not provided to State or 

18 local governments for lack of certification in any 

19 year, those allowances shall be added to the amount 

20 provided to those States and local governments that 

21 are certified as eligible in that year. 

22 ‘‘(4) USE OF ALLOWANCES.—Each State or 

23 each local government shall use such emission allow24 ances as it receives pursuant to this section exclu25 sively for the purposes of this section, including covVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00223 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 ering a reasonable portion of the costs of the devel2 opment, adoption, implementation, and enforcement 

3 of a State or local energy efficiency building code 

4 with respect to which a certification is accepted by 

5 the Secretary under subsection (c)(2)(B) or sub6 section (e)(6)(B), or the national energy efficiency 

7 building code. 

8 ‘‘(i) ANNUAL REPORTS BY SECRETARY.—The Sec9 retary shall annually submit to Congress, and publish in 

10 the Federal Register, a report on— 

11 ‘‘(1) the status of national building energy effi12 ciency codes; 

13 ‘‘(2) the status of energy efficiency building 

14 code adoption and compliance in the States; 

15 ‘‘(3) the implementation of this section; and 

16 ‘‘(4) impacts of past action under this section, 

17 and potential impacts of further action, on lifetime 

18 energy use by buildings, including resulting energy 

19 and cost savings.’’. 

20 SEC. 202. BUILDING RETROFIT PROGRAM. 

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

22 (1) NONRESIDENTIAL BUILDING.—The term 

23 ‘‘nonresidential building’’ means a building with a 

24 primary use or purpose other than residential hous25 ing, including commercial offices, schools, academic 


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1 and other public and private institutions, nonprofit 

2 organizations, hospitals, hotels, and houses of wor3 ship. Such buildings shall include mixed-use prop4 erties used for both residential and nonresidential 

5 purposes in which more than half of building floor 

6 space is nonresidential. 

7 (2) PERFORMANCE-BASED BUILDING RETROFIT

8 PROGRAM.—The term ‘‘performance-based building 

9 retrofit program’’ means a program that determines 

10 building energy efficiency success based on actual 

11 measured savings after a retrofit is complete, as evi12 denced by energy invoices or evaluation protocols. 

13 (3) PRESCRIPTIVE BUILDING RETROFIT PRO14 GRAM.—The term ‘‘prescriptive building retrofit pro15 gram’’ means a program that projects building ret16 rofit energy efficiency success based on the known 

17 effectiveness of measures prescribed to be included 

18 in a retrofit. 

19 (4) RECOMMISSIONING; 

20 RETROCOMMISSIONING.—The terms ‘‘recommis21 sioning’’ and ‘‘retrocommissioning’’ have the mean22 ing given those terms in section 543(f)(1) of the Na23 tional Energy Conservation Policy Act (42 U.S.C. 

24 8253(f)(1)). 


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1 (5) RESIDENTIAL BUILDING.—The term ‘‘resi2 dential building’’ means a building whose primary 

3 use is residential. Such buildings shall include sin4 gle-family homes (both attached and detached), 

5 owner-occupied units in larger buildings with their 

6 own dedicated space-conditioning systems, and build7 ings used for both residential and nonresidential 

8 purposes in which more than half of building floor 

9 space is residential. 

10 (6) STATE ENERGY PROGRAM.—The term 

11 ‘‘State Energy Program’’ means the program under 

12 part D of title III of the Energy Policy and Con13 servation Act (42 U.S.C. 6321 et seq.). 

14 (b) ESTABLISHMENT.—The Administrator shall de15 velop and implement, in consultation with the Secretary 

16 of Energy, standards for a national energy and environ17 mental building retrofit policy for single-family and multi18 family residences. The Administrator shall develop and 

19 implement, in consultation with the Secretary of Energy 

20 and the Director of Commercial High-Performance Green 

21 Buildings, standards for a national energy and environ22 mental building retrofit policy for nonresidential buildings. 

23 The programs to implement the residential and nonresi24 dential policies based on the standards developed under 

25 this section shall together be known as the Retrofit for 


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1 Energy and Environmental Performance (REEP) pro2 gram. 

3 (c) PURPOSE.—The purpose of the REEP program 

4 is to facilitate the retrofitting of existing buildings across 

5 the United States to achieve maximum cost-effective en6 ergy efficiency improvements and significant improve7 ments in water use and other environmental attributes. 

8 (d) FEDERAL ADMINISTRATION.— 

9 (1) EXISTING PROGRAMS.—In creating and op10 erating the REEP program— 

11 (A) the Administrator shall make appro12 priate use of existing programs, including the 

13 Energy Star program and in particular the En14 vironmental Protection Agency Energy Star for 

15 Buildings program; and 

16 (B) the Secretary of Energy shall make 

17 appropriate use of existing programs, including 

18 delegating authority to the Director of Commer19 cial High-Performance Green Buildings ap20 pointed under section 421 of the Energy Inde21 pendence and Security Act of 2007 (42 U.S.C. 

22 17081), who shall designate and provide fund23 ing to support a high-performance green build24 ing partnership consortium pursuant to subVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00227 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 section (f) of such section to support efforts 

2 under this section. 

3 (2) CONSULTATION AND COORDINATION.—The 

4 Administrator and the Secretary of Energy shall 

5 consult with and coordinate with the Secretary of 

6 Housing and Urban Development in carrying out the 

7 REEP program. 

8 (3) ALLOCATION OF ALLOWANCES.—The Ad9 ministrator shall support the REEP program by 

10 providing emission allowances to each State’s SEED 

11 Account for the purposes of the program, and pro12 viding, as appropriate, emission allowances to a local 

13 government entity that carries out the purposes of 

14 this section in the absence of a State program. The 

15 Administrator shall support administration of the 

16 program through such existing State and local agen17 cies or entities, including those regulated by the 

18 State, that the State designates to carry out the 

19 purposes of this section. The Administrator shall en20 sure accountability for allowances dispensed, and 

21 shall confirm measurement and verification of en22 ergy, water, and environmental savings achieved. 

23 (4) ASSISTANCE.—The Administrator and the 

24 Secretary of Energy shall provide consultation and 

25 assistance to State and local agencies for the estabVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00228 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 lishment of revolving loan funds, loan guarantees, or 

2 other forms of financial assistance under this sec3 tion. 

4 (e) STATE AND LOCAL ADMINISTRATION.— 

5 (1) DELEGATION.—The designated State agen6 cy, agencies, or entities described in subsection 

7 (d)(3) may delegate performance of appropriate ele8 ments of the REEP program, upon their request 

9 and subject to State law, to counties, municipalities, 

10 appropriate public agencies, and other divisions of 

11 local government, as well as to entities regulated by 

12 the State. In making any such delegation, a State 

13 shall give priority to entities that administer existing 

14 comprehensive retrofit programs, including those 

15 under the supervision of State utility regulators. The 

16 State shall ensure accountability for the use of al17 lowances provided under this section, and to the ex18 tent such allowances are sold by the State, for the 

19 proceeds. States shall maintain responsibility for 

20 meeting the standards and requirements of the 

21 REEP program. In any State that elects not to ad22 minister the REEP program, a unit of local govern23 ment may propose to do so within its jurisdiction, 

24 and if the Administrator finds that such local gov25 ernment is capable of administering the program, 


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1 the Administrator may provide allowances to that 

2 local government, prorated according to the popu3 lation of the local jurisdiction relative to the popu4 lation of the State, for purposes of the REEP pro5 gram. 

6 (2) EMPLOYMENT.—States and local govern7 ment entities may administer a REEP program in 

8 a manner that authorizes public or regulated inves9 tor-owned utilities, building auditors and inspectors, 

10 contractors, nonprofit organizations, for-profit com11 panies, and other entities to perform audits and ret12 rofit services under this section. A State may pro13 vide incentives for retrofits without direct participa14 tion by the State or its agents, so long as the result15 ing savings are measured and verified. A State or 

16 local administrator of a REEP program shall seek 

17 to ensure that sufficient qualified entities are avail18 able to support retrofit activities so that building 

19 owners have a competitive choice among qualified 

20 auditors, raters, contractors, and providers of serv21 ices related to retrofits. Nothing in this section is in22 tended to preclude or preempt the right of a building 

23 owner to choose the specific providers of retrofit 

24 services to engage for a retrofit project in that own25 er’s building. 


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1 (3) EQUAL INCENTIVES FOR EQUAL IMPROVE2 MENT.—In general, the States should strive to offer 

3 the same levels of incentives for retrofits that meet 

4 the same efficiency improvement goals, regardless of 

5 whether the State, its agency or entity, or the build6 ing owner has conducted the retrofit achieving the 

7 improvement, provided the improvement is measured 

8 and verified. 

9 (f) ELEMENTS OF REEP PROGRAM.—The Adminis10 trator, in consultation with the Secretary of Energy, shall 

11 establish goals, guidelines, practices, and standards for ac12 complishing the purpose stated in subsection (c), and shall 

13 annually review and, as appropriate, revise such goals, 

14 guidelines, practices, and standards. The program under 

15 this section shall include the following: 

16 (1) Residential Energy Services Network 

17 (RESNET) or Building Performance Institute 

18 (BPI) analyst certification of residential building en19 ergy and environment auditors, inspectors, and rat20 ers, or an equivalent certification system as deter21 mined by the Administrator. 

22 (2) BPI certification or licensing by States of 

23 residential building energy and environmental ret24 rofit contractors, or an equivalent certification or li25 censing system as determined by the Administrator. 


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1 (3) Provision of BPI, RESNET, or other ap2 propriate information on equipment and procedures, 

3 as determined by the Administrator, that contractors 

4 can use to test the energy and environmental effi5 ciency of buildings effectively (such as infrared pho6 tography and pressurized testing, and tests for water 

7 use and indoor air quality). 

8 (4) Provision of clear and effective materials to 

9 describe the testing and retrofit processes for typical 

10 buildings. 

11 (5) Guidelines for offering and managing pre12 scriptive building retrofit programs and perform13 ance-based building retrofit programs for residential 

14 and nonresidential buildings. 

15 (6) Guidelines for applying recommissioning 

16 and retrocommissioning principles to improve a 

17 building’s operations and maintenance procedures. 

18 (7) A requirement that building retrofits con19 ducted pursuant to a REEP program utilize, espe20 cially in all air-conditioned buildings, roofing mate21 rials with high solar energy reflectance, unless inap22 propriate due to green roof management, solar en23 ergy production, or for other reasons identified by 

24 the Administrator, in order to reduce energy con25 sumption within the building, increase the albedo of 


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1 the building’s roof, and decrease the heat island ef2 fect in the area of the building. 

3 (8) Determination of energy savings in a per4 formance-based building retrofit program through— 

5 (A) for residential buildings, comparison of 

6 before and after retrofit scores on the Home 

7 Energy Rating System (HERS) Index, where 

8 the final score is produced by an objective third 

9 party; 

10 (B) for nonresidential buildings, Environ11 mental Protection Agency Portfolio Manager 

12 benchmarks; or 

13 (C) for either residential or nonresidential 

14 buildings, use of an Administrator-approved 

15 simulation program by a contractor with the 

16 appropriate certification, subject to appropriate 

17 software standards and verification of at least 

18 15 percent of all work done, or such other per19 centage as the Administrator may determine. 

20 (9) Guidelines for utilizing the Energy Star 

21 Portfolio Manager, the Home Energy Rating System 

22 (HERS) rating system, Home Performance with En23 ergy Star program approvals, and any other tools 

24 associated with the retrofit program. 


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1 (10) Requirements and guidelines for post-ret2 rofit inspection and confirmation of work and energy 

3 savings. 

4 (11) Detailed descriptions of funding options 

5 for the benefit of State and local governments, along 

6 with model forms, accounting aids, agreements, and 

7 guides to best practices. 

8 (12) Guidance on opportunities for— 

9 (A) rating or certifying retrofitted build10 ings as Energy Star buildings, or as green 

11 buildings under a recognized green building rat12 ing system; 

13 (B) assigning Home Energy Rating Sys14 tem (HERS) or similar ratings; and 

15 (C) completing any applicable building per16 formance labels. 

17 (13) Sample materials for publicizing the pro18 gram to building owners, including public service an19 nouncements and advertisements. 

20 (14) Processes for tracking the numbers and lo21 cations of buildings retrofitted under the REEP pro22 gram, with information on projected and actual sav23 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, 

8 respectively, except as necessary to match local con9 ditions, 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 gov15 ernment accounting principles) sufficient to ensure 

16 proper accounting during appropriate accounting pe17 riods for payments received and disbursements, and 

18 for 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 ap22 propriate 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 build4 ings, 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 

17 through utility rates, calibrated to create net positive 

18 cash flow to the building owner, and transferable 

19 from one building owner to the next with the build20 ing’s utility services; 

21 (5) providing funds to local government pro22 grams to provide REEP services and financial as23 sistance; and 


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1 (6) other means proposed by State and local 

2 agencies, subject to the approval of the Adminis3 trator. 

4 (i) SUPPORT FOR PROGRAM.— 

5 (1) USE OF ALLOWANCES.—The REEP pro6 gram shall be supported by the use of emission al7 lowances allocated to the States’ SEED Accounts 

8 pursuant to section 132 of this Act. To the extent 

9 that a State provides allowances to local govern10 ments within the State to implement elements of the 

11 REEP Program, that shall be deemed a distribution 

12 of such allowances to units of local government pur13 suant to subsection (c)(1) of that section. 

14 (2) INITIAL AWARD LIMITS.—Except as pro15 vided in paragraph (3), State and local REEP pro16 grams may make per-building direct expenditures 

17 for retrofit improvements, or their equivalent in indi18 rect or other forms of financial support, from funds 

19 derived from the sale of allowances received directly 

20 from the Administrator in amounts not to exceed the 

21 following: 

22 (A) RESIDENTIAL BUILDING PROGRAM.— 

23 (i) AWARDS.—For residential build24 ings— 


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1 (I) support for a free or low-cost 

2 detailed building energy audit that 

3 prescribes, as part of a energy-reduc4 ing measures sufficient to achieve at 

5 least a 20 percent reduction in energy 

6 use, by providing an incentive equal to 

7 the documented cost of such audit, 

8 but not more than $200, in addition 

9 to any earned by achieving a 20 per10 cent or greater efficiency improve11 ment; 

12 (II) a total of $1,000 for a com13 bination of measures, prescribed in an 

14 audit conducted under subclause (I), 

15 designed to reduce energy consump16 tion by more than 10 percent, and 

17 $2,000 for a combination of measures 

18 prescribed in such an audit, designed 

19 to reduce energy consumption by more 

20 than 20 percent; 

21 (III) $3,000 for demonstrated 

22 savings of 20 percent, pursuant to a 

23 performance-based building retrofit 

24 program; and 


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1 (IV) $1,000 for each additional 5 

2 percentage points of energy savings 

3 achieved beyond savings for which 

4 funding is provided under subclause 

5 (II) or (III). 

6 Funding shall not be provided under 

7 clauses (II) and (III) for the same energy 

8 savings. 

9 (ii) MAXIMUM PERCENTAGE.—Awards 

10 under clause (i) shall not exceed 50 per11 cent of retrofit costs for each building. For 

12 buildings with multiple residential units, 

13 awards under clause (i) shall not be great14 er than 50 percent of the total cost of ret15 rofitting the building, prorated among indi16 vidual residential units on the basis of rel17 ative costs of the retrofit. 

18 (iii) ADDITIONAL AWARDS.—Addi19 tional awards may be provided for pur20 poses of increasing energy efficiency, for 

21 buildings achieving at least 20 percent en22 ergy savings using funding provided under 

23 clause (i), in the form of grants of not 

24 more than $600 for measures projected or 

25 measured (using an appropriate method 


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1 approved by the Administrator) to achieve 

2 at least 35 percent potable water savings 

3 through equipment or systems with an es4 timated service life of not less than seven 

5 years, and not more than an additional 

6 $20 may be provided for each additional 

7 one percent of such savings, up to a max8 imum total grant of $1,200. 

9 (B) NONRESIDENTIAL BUILDING PRO10 GRAM.— 

11 (i) AWARDS.—For nonresidential 

12 buildings— 

13 (I) support for a free or low-cost 

14 detailed building energy audit that 

15 prescribes, as part of a energy-reduc16 ing measures sufficient to achieve at 

17 least a 20 percent reduction in energy 

18 use, by providing an incentive equal to 

19 the documented cost of such audit, 

20 but not more than $500, in addition 

21 to any award earned by achieving a 

22 20 percent or greater efficiency im23 provement; 

24 (II) $0.15 per square foot of ret25 rofit area for demonstrated energy use 


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1 reductions from 20 percent to 30 per2 cent; 

3 (III) $0.75 per square foot for 

4 demonstrated energy use reductions 

5 from 30 percent to 40 percent; 

6 (IV) $1.60 per square foot for 

7 demonstrated energy use reductions 

8 from 40 percent to 50 percent; and 

9 (V) $2.50 per square foot for 

10 demonstrated energy use reductions 

11 exceeding 50 percent. 

12 (ii) MAXIMUM PERCENTAGE.— 

13 Amounts provided under subclauses (II) 

14 through (V) of clause (i) combined shall 

15 not exceed 50 percent of the total retrofit 

16 cost of a building. In nonresidential build17 ings with multiple units, such awards shall 

18 be prorated among individual units on the 

19 basis of relative costs of the retrofit. 

20 (iii) ADDITIONAL AWARDS.—Addi21 tional awards may be provided, for build22 ings achieving at least 20 percent energy 

23 savings using funding provided under 

24 clause (i), as follows: 


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1 (I) WATER.—For purposes of in2 creasing energy efficiency, grants may 

3 be made for whole building potable 

4 water use reduction (using an appro5 priate method approved by the Sec6 retary of Energy) for up to 50 percent 

7 of the total retrofit cost, including 

8 amounts up to— 

9 (aa) $24.00 per thousand 

10 gallons per year of potable water 

11 savings of 40 percent or more; 

12 (bb) $27.00 per thousand 

13 gallons per year of potable water 

14 savings of 50 percent or more; 

15 and 

16 (cc) $30.00 per thousand 

17 gallons per year of potable water 

18 savings of 60 percent or more. 

19 (II) ENVIRONMENTAL IMPROVE20 MENTS.—Additional awards of up to 

21 $1,000 may be granted for the inclu22 sion of other environmental attributes 

23 that the Secretary, in consultation 

24 with the Administrator, identifies as 

25 contributing to energy efficiency. Such 


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1 attributes may include, but are not 

2 limited to waste diversion and the use 

3 of environmentally preferable mate4 rials (including salvaged, renewable, 

5 or recycled materials, and materials 

6 with no or low-VOC content). The Ad7 ministrator may recommend that 

8 States develop such standards as are 

9 necessary to account for local or re10 gional conditions that may affect the 

11 feasibility or availability of identified 

12 resources and attributes. 

13 (iv) INDOOR AIR QUALITY MINIMUM.— 

14 Nonresidential buildings receiving incen15 tives under this section must satisfy at a 

16 minimum the most recent version of 

17 ASHRAE Standard 62.1 for ventilation, or 

18 the equivalent as determined by the Ad19 ministrator. A State may issue a waiver 

20 from this requirement to a building project 

21 on a showing that such compliance is in22 feasible due to the physical constraints of 

23 the building’s existing ventilation system, 

24 or such other limitations as may be speci25 fied by the Administrator. 


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1 (C) HISTORIC BUILDINGS.—Notwith2 standing subparagraphs (A) and (B), a building 

3 in or eligible for the National Register of His4 toric Places shall be eligible for awards under 

5 this paragraph in amounts up to 120 percent of 

6 the amounts set forth in subparagraphs (A) and 

7 (B). 

8 (D) SUPPLEMENTAL SUPPORT.—State and 

9 local governments may supplement the per10 building expenditures under this paragraph 

11 with funding from other sources. 

12 (3) ADJUSTMENT.—The Administrator may ad13 just the specific dollar limits funded by the sale of 

14 allowances pursuant to paragraph (2) in years sub15 sequent to the second year after the date of enact16 ment of this Act, and every 2 years thereafter, as 

17 the Administrator determines necessary to achieve 

18 optimum cost-effectiveness and to maximize incen19 tives to achieve energy efficiency within the total 

20 building award amounts provided in that paragraph, 

21 and shall publish and hold constant such revised lim22 its for at least 2 years. 

23 (j) REPORT TO CONGRESS.—The Administrator shall 

24 conduct an annual assessment of the achievements of the 

25 REEP program in each State, shall prepare an annual reVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00244 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 port of such achievements and any recommendations for 

2 program modifications, and shall provide such report to 

3 Congress at the end of each fiscal year during which fund4 ing or other resources were made available to the States 

5 for the REEP Program. 

6 (k) OTHER SOURCES OF FEDERAL SUPPORT.— 

7 (1) ADDITIONAL STATE ENERGY PROGRAM

8 FUNDS.—Any Federal funding provided to a State 

9 Energy Program that is not required to be expended 

10 for a different federally designated purpose may be 

11 used to support a REEP program. 

12 (2) PROGRAM ADMINISTRATION.—State Energy 

13 Offices or designated State agencies may expend up 

14 to 10 percent of available funding provided under 

15 this section for program administration. 

16 (3) AUTHORIZATION OF APPROPRIATIONS.— 

17 There are authorized to be appropriated for the pur18 poses of this section, for each of fiscal years 2010, 

19 2011, 2012, and 2013— 

20 (A) $50,000,000 to the Administrator for 

21 program administration costs; and 

22 (B) $20,000,000 to the Secretary of En23 ergy for program administration costs. 

24 SEC. 203. ENERGY EFFICIENT MANUFACTURED HOMES. 

25 (a) DEFINITIONS.—In this section: 


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1 (1) MANUFACTURED HOME.—The term ‘‘manu2 factured home’’ has the meaning given such term in 

3 section 603 of the National Manufactured Housing 

4 Construction and Safety Standards Act of 1974 (42 

5 U.S.C. 5402). 

6 (2) ENERGY STAR QUALIFIED MANUFACTURED

7 HOME.—The term ‘‘Energy Star qualified manufac8 tured home’’ means a manufactured home that has 

9 been designed, produced, and installed in accordance 

10 with Energy Star’s guidelines by an Energy Star 

11 certified plant. 

12 (b) PURPOSE.—The purpose of this section is to as13 sist low-income households residing in manufactured 

14 homes constructed prior to 1976 to save energy and en15 ergy expenditures by providing support toward the pur16 chase of new Energy Star qualified manufactured homes. 

17 (c) STATE IMPLEMENTATION OF PROGRAM.— 

18 (1) MANUFACTURED HOME REPLACEMENT PRO19 GRAM.—Any State may provide to the owner of a 

20 manufactured home constructed prior to 1976 a re21 bate to use toward the purchase of a new Energy 

22 Star qualified manufactured home pursuant to this 

23 section. 

24 (2) USE OF ALLOWANCES.—The program es25 tablished in this section shall be supported by the 


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1 use of emission allowances allocated to the States’ 

2 SEED Accounts pursuant to section 782 of this Act. 

3 To the extent that a State provides allowances to 

4 local governments within the State to implement this 

5 program, that shall be deemed a distribution of such 

6 allowances to units of local government pursuant to 

7 subsection (c)(1) of that section. 

8 (3) REBATES.— 

9 (A) PRIMARY RESIDENCE REQUIRE10 MENT.—A rebate described under paragraph 

11 (1) may only be made to an owner of a manu12 factured home constructed prior to 1976 that is 

13 used on a year-round basis as a primary resi14 dence. 

15 (B) DISMANTLING AND REPLACEMENT.—A 

16 rebate described under paragraph (1) may be 

17 made only if the manufactured home con18 structed prior to 1976 will be— 

19 (i) rendered unusable for human habi20 tation (including appropriate recycling); 

21 and 

22 (ii) replaced, in the same general loca23 tion, as determined by the applicable State 

24 agency, with an Energy Star qualified 

25 manufactured home. 


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1 (C) SINGLE REBATE.—A rebate described 

2 under paragraph (1) may not be provided to 

3 any owner of a manufactured home constructed 

4 prior to 1976 that was or is a member of a 

5 household for which any other member of the 

6 household was provided a rebate pursuant to 

7 this section. 

8 (D) ELIGIBLE HOUSEHOLDS.—To be eligi9 ble to receive a rebate described under para10 graph (1), an owner of a manufactured home 

11 constructed prior to 1976 shall demonstrate to 

12 the applicable State agency that the total in13 come of all members the owner’s household does 

14 not exceed 200 percent of the Federal poverty 

15 level for income in the applicable area. 

16 (E) ADVANCE AVAILABILITY.—A rebate 

17 may be provided under this section in a manner 

18 to facilitate the purchase of a new Energy Star 

19 qualified manufactured home. 

20 (4) REBATE LIMITATION.—Rebates provided by 

21 States under this section shall not exceed $7,500 per 

22 manufactured home from any value derived from the 

23 use of emission allowances provided to the State 

24 pursuant to section 132. 


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1 (5) USE OF STATE FUNDS.—A State providing 

2 rebates under this section may supplement the 

3 amount of such rebates under paragraph (4) by any 

4 additional amount is from State funds and other 

5 sources, including private donations or grants from 

6 charitable organizations. 

7 (6) COORDINATION WITH SIMILAR PRO8 GRAMS.— 

9 (A) STATE PROGRAMS.—A State con10 ducting an existing program that has the pur11 pose of replacing manufactured homes con12 structed prior to 1976 with Energy Star quali13 fied manufactured homes, may use allowance 

14 value provided under section 782 to support 

15 such a program, provided such funding does not 

16 exceed the rebate limitation amount under 

17 paragraph (4). 

18 (B) FEDERAL PROGRAMS.—The Secretary 

19 of Energy shall coordinate with and seek to 

20 achieve the purpose of this section through 

21 similar Federal programs including— 

22 (i) the Weatherization Assistance Pro23 gram under part A of title IV of the En24 ergy Conservation and Production Act (42 

25 U.S.C. 6861 et seq.); and 


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1 (ii) the program under part D of title 

2 III of the Energy Policy and Conservation 

3 Act (42 U.S.C. 6321 et seq.). 

4 (C) COORDINATION WITH OTHER STATE

5 AGENCIES.—A State agency using allowance 

6 value to administer the program under this sec7 tion may coordinate its efforts, and share funds 

8 for administration, with other State agencies in9 volved in low-income housing programs. 

10 (7) ADMINISTRATIVE EXPENSES.—A State 

11 using allowance value under this section may expend 

12 not more than 10 percent of such value for adminis13 trative expenses related to this program. 

14 SEC. 204. BUILDING ENERGY PERFORMANCE LABELING 

15 PROGRAM. 

16 (a) ESTABLISHMENT.— 

17 (1) PURPOSE.—The Administrator shall estab18 lish a building energy performance labeling program 

19 with broad applicability to the residential and com20 mercial markets to enable and encourage knowledge 

21 about building energy performance by owners and 

22 occupants and to inform efforts to reduce energy 

23 consumption nationwide. 

24 (2) COMPONENTS.—In developing such pro25 gram, the Administrator shall— 


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1 (A) consider existing programs, such as 

2 Environmental Protection Agency’s Energy 

3 Star program, the Home Energy Rating System 

4 (HERS) Index, and programs at the Depart5 ment of Energy; 

6 (B) support the development of model per7 formance labels for residential and commercial 

8 buildings; and 

9 (C) utilize incentives and other means to 

10 spur use of energy performance labeling of pub11 lic and private sector buildings nationwide. 

12 (b) DATA ASSESSMENT FOR BUILDING ENERGY PER13 FORMANCE.— 

14 (1) INITIAL REPORT.—Not later than 90 days 

15 after the date of enactment of this Act, the Adminis16 trator shall provide to Congress, as well as to the 

17 Secretary of Energy and the Office of Management 

18 and Budget, a report identifying— 

19 (A) all principal building types for which 

20 statistically significant energy performance data 

21 exists to serve as the basis of measurement pro22 tocols and labeling requirements for achieved 

23 building energy performance; and 


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1 (B) those building types for which addi2 tional data are required to enable the develop3 ment of such protocols and requirements. 

4 (2) ADDITIONAL REPORTS.—Additional updated 

5 reports shall be provided under this subsection as 

6 often as The Administrator considers practicable, 

7 but not less than every 2 years. 

8 (c) BUILDING DATA ACQUISITION.— 

9 (1) RESOURCE REQUIREMENTS.—For all prin10 cipal building types identified under subsection (b), 

11 the Secretary of Energy, not later than 90 days 

12 after a report by the Administrator under subsection 

13 (b), shall provide to Congress, the Administrator, 

14 and the Office of Management and Budget a state15 ment of additional resources needed, if any, to fully 

16 develop the relevant data, as well as the anticipated 

17 timeline for data development. 

18 (2) CONSULTATION.—The Secretary of Energy 

19 shall consult with the Administrator concerning the 

20 Administrator’s ability to use data series for these 

21 additional building types to support the achieved 

22 performance component in the labeling program. 

23 (3) IMPROVEMENTS TO BUILDING ENERGY CON24 SUMPTION DATABASES.— 


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1 (A) COMMERCIAL DATABASE.—The Sec2 retary of Energy shall support improvements to 

3 the Commercial Buildings Energy Consumption 

4 Survey (CBECS) as authorized by section 

5 205(k) of the Department of Energy Organiza6 tion Act (42 U.S.C. 7135(k))— 

7 (i) to enable complete and robust data 

8 for the actual energy performance of prin9 cipal building types currently covered by 

10 survey; 

11 (ii) to cover additional building types 

12 as identified by the Administrator under 

13 subsection (e)(1)(B), to enable the develop14 ment of achieved performance measure15 ment protocols are developed for at least 

16 90 percent of all major commercial build17 ing types within 5 years after the date of 

18 enactment of this Act; and 

19 (iii) to include third-party audits of 

20 random data samplings to ensure the qual21 ity and accuracy of survey information. 

22 (B) RESIDENTIAL DATABASES.—The Ad23 ministrator, in consultation with the Energy In24 formation Administration and the Secretary of 

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1 idential Energy Consumption Survey (RECS) 

2 as authorized by section 205(k) of the Depart3 ment of Energy Organization Act (42 U.S.C. 

4 7135(k)), or such other residential energy per5 formance databases as the Administrator con6 siders appropriate, to aid the development of 

7 achieved performance measurement protocols 

8 for residential building energy use for at least 

9 90 percent of the residential market within 5 

10 years after the date of enactment of this Act. 

11 (C) CONSULTATION.—The Secretary of 

12 Energy and the Administrator shall consult 

13 with public, private, and nonprofit sector rep14 resentatives from the building industry and real 

15 estate industry to assist in the evaluation and 

16 improvement of building energy performance 

17 databases and labeling programs. 

18 (d) IDENTIFICATION OF MEASUREMENT PROTOCOLS

19 FOR ACHIEVED PERFORMANCE.— 

20 (1) PROPOSED PROTOCOLS AND REQUIRE21 MENTS.—At the earliest practicable date, but not 

22 later than 1 year after identifying a building type 

23 under subsection (b)(1)(A), the Administrator shall 

24 propose a measurement protocol for that building 

25 type and a requirement detailing how to use that 


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1 protocol in completing applicable commercial or resi2 dential performance labels created pursuant to this 

3 section. 

4 (2) FINAL RULE.—After providing for notice 

5 and comment, the Administrator shall publish a 

6 final rule containing a measurement protocol and 

7 the corresponding requirements for applying that 

8 protocol. Such a rule— 

9 (A) shall define the minimum period for 

10 measurement of energy use by buildings of that 

11 type and other details for determining achieved 

12 performance, to include leased buildings or 

13 parts thereof; 

14 (B) shall identify necessary data collection 

15 and record retention requirements; and 

16 (C) may specify transition rules and ex17 emptions for classes of buildings within the 

18 building type. 

19 (e) PROCEDURES FOR EVALUATING DESIGNED PER20 FORMANCE.—The Administrator shall develop protocols 

21 for evaluating the designed performance of individual 

22 building types. The Administrator may conduct such feasi23 bility studies and demonstration projects as are necessary 

24 to evaluate the sufficiency of proposed protocols for de25 signed performance. 


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1 (f) CREATION OF BUILDING ENERGY PERFORMANCE

2 LABELING PROGRAM.— 

3 (1) MODEL LABEL.—Not later than 1 year 

4 after the date of enactment of this Act, the Adminis5 trator shall propose a model building energy label 

6 that provides a format— 

7 (A) to display achieved performance and 

8 designed performance data; 

9 (B) that may be tailored for residential 

10 and commercial buildings, and for single-occu11 pancy and multitenanted buildings; and 

12 (C) to display other appropriate elements 

13 identified during the development of measure14 ment protocols under subsections (d) and (e). 

15 (2) INCLUSIONS.—Nothing in this section shall 

16 require the inclusion on such a label of designed per17 formance data where impracticable or not cost effec18 tive, or to preclude the display of both achieved per19 formance and designed performance data for a par20 ticular building where both such measures are avail21 able, practicable, and cost effective. 

22 (3) EXISTING PROGRAMS.—In developing the 

23 model label, the Administrator shall consider exist24 ing programs, including— 


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1 (A) the Environmental Protection Agency’s 

2 Energy Star Portfolio Manager program and 

3 the California HERS II Program Custom Ap4 proach for the achieved performance component 

5 of the label; 

6 (B) the Home Energy Rating System 

7 (HERS) Index system for the designed per8 formance component of the label; and 

9 (C) other Federal and State programs, in10 cluding the Department of Energy’s related 

11 programs on building technologies and those of 

12 the Federal Energy Management Program. 

13 (4) FINAL RULE.—After providing for notice 

14 and comment, the Administrator shall publish a 

15 final rule containing the label applicable to covered 

16 building types. 

17 (g) DEMONSTRATION PROJECTS FOR LABELING

18 PROGRAM.— 

19 (1) IN GENERAL.—The Administrator shall con20 duct building energy performance labeling dem21 onstration projects for different building types— 

22 (A) to ensure the sufficiency of the current 

23 Commercial Buildings Energy Consumption 

24 Survey and other data to serve as the basis for 

25 new measurement protocols for the achieved 


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1 performance component of the building energy 

2 performance labeling program; 

3 (B) to inform the development of measure4 ment protocols for building types not currently 

5 covered by the Commercial Buildings Energy 

6 Consumption Survey; and 

7 (C) to identify any additional information 

8 that needs to be developed to ensure effective 

9 use of the model label. 

10 (2) PARTICIPATION.—Such demonstration 

11 projects shall include participation of— 

12 (A) buildings from diverse geographical 

13 and climate regions; 

14 (B) buildings in both urban and rural 

15 areas; 

16 (C) single-family residential buildings; 

17 (D) multihousing residential buildings with 

18 more than 50 units, including at least one 

19 project that provides affordable housing to indi20 viduals of diverse incomes; 

21 (E) single-occupant commercial buildings 

22 larger than 30,000 square feet; 

23 (F) multitenanted commercial buildings 

24 larger than 50,000 square feet; and 


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1 (G) buildings from both the public and pri2 vate sectors. 

3 (3) PRIORITY.—Priority in the selection of dem4 onstration projects shall be given to projects that fa5 cilitate large-scale implementation of the labeling 

6 program for samples of buildings across neighbor7 hoods, geographic regions, cities, or States. 

8 (4) FINDINGS.—The Administrator shall report 

9 any findings from demonstration projects under this 

10 subsection, including an identification of any areas 

11 of needed data improvement, to the Department of 

12 Energy’s Energy Information Administration and 

13 Building Technologies Program. 

14 (5) COORDINATION.—The Administrator and 

15 the Secretary of Energy shall coordinate demonstra16 tion projects undertaken pursuant to this subsection 

17 with those undertaken as part of the Zero-Net-En18 ergy Commercial Buildings Initiative adopted under 

19 section 422 of the Energy Independence and Secu20 rity Act of 2007 (42 U.S.C. 17082). 

21 (h) IMPLEMENTATION OF LABELING PROGRAM.— 

22 (1) IN GENERAL.—The Administrator, in con23 sultation with the Secretary of Energy, shall work 

24 with all State Energy Offices established pursuant 

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1 servation Act (42 U.S.C. 6321 et seq.) or other 

2 State authorities as necessary for the purpose of im3 plementing the labeling program established under 

4 this section for commercial and residential buildings. 

5 (2) OUTREACH TO LOCAL AUTHORITIES.—The 

6 Administrator shall, acting in consultation and co7 ordination with the respective States, encourage use 

8 of the labeling program by counties and other local9 ities to broaden access to information about building 

10 energy use, for example, through disclosure of build11 ing label contents in tax, title, and other records 

12 those localities maintain. For this purpose, the Ad13 ministrator shall develop an electronic version of the 

14 label and information that can be readily trans15 mitted and read in widely available computer pro16 grams but is protected from unauthorized manipula17 tion. 

18 (3) MEANS OF IMPLEMENTATION.—In adopting 

19 the model labeling program established under this 

20 section, a State shall seek to ensure that labeled in21 formation be made accessible to the public in a man22 ner so that owners, lenders, tenants, occupants, or 

23 other relevant parties can utilize it. Such accessi24 bility may be accomplished through— 


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1 (A) preparation, and public disclosure of 

2 the label through filing with tax and title 

3 records at the time of— 

4 (i) a building audit conducted with 

5 support from Federal or State funds; 

6 (ii) a building energy-efficiency ret7 rofit conducted in response to such an 

8 audit; 

9 (iii) a final inspection of major ren10 ovations or additions made to a building in 

11 accordance with a building permit issued 

12 by a local government entity; 

13 (iv) a sale that is recorded for title 

14 and tax purposes consistent with sub15 section (h)(8) of this section; 

16 (v) a new lien recorded on the prop17 erty for more than a set percentage of the 

18 assessed value of the property, if that lien 

19 reflects public financial assistance for en20 ergy-related improvements to that building; 

21 or 

22 (vi) a change in ownership or oper23 ation of the building for purposes of utility 

24 billing; or 

25 (B) other appropriate means. 


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1 (4) STATE IMPLEMENTATION OF PROGRAM.— 

2 (A) ELIGIBILITY.—A State may become el3 igible to utilize allowance value to implement 

4 this program by— 

5 (i) adopting by statute or regulation a 

6 requirement that buildings be assessed and 

7 labeled, consistent with the labeling re8 quirements of the program established 

9 under this section; or 

10 (ii) adopting a plan to implement a 

11 model labeling program consistent with 

12 this section within one year of enactment 

13 of this Act, including the establishment of 

14 that program within 3 years after the date 

15 of enactment of this Act, and dem16 onstrating continuous progress under that 

17 plan. 

18 (B) USE OF ALLOWANCES.—The program 

19 established in this section shall be supported by 

20 the use of emission allowances allocated to the 

21 States’ SEED Accounts pursuant to section 

22 132 of this Act. To the extent that a State pro23 vides allowances to local governments within the 

24 State to implement this program, that shall be 

25 deemed a distribution of such allowances to 


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1 units of local government pursuant to sub2 section (c)(1) of that section. 

3 (5) GUIDANCE.—The Administrator may create 

4 or identify model programs and resources to provide 

5 guidance to offer to States and localities for creating 

6 labeling programs consistent with the model pro7 gram established under this section. 

8 (6) PROGRESS REPORT.—The Administrator, in 

9 consultation with the Secretary of Energy, shall pro10 vide a progress report to Congress not later than 3 

11 years after the date of enactment of this Act that— 

12 (A) evaluates the effectiveness of efforts to 

13 advance use of the model labeling program by 

14 States and localities; 

15 (B) recommends any legislative changes 

16 necessary to broaden the use of the model label17 ing program; and 

18 (C) identifies any changes to broaden the 

19 use of the model labeling program that the Ad20 ministrator has made or intends to make that 

21 do not require additional legislative authority. 

22 (7) STATE INFORMATION.—The Administrator 

23 may require States to report to the Administrator 

24 information that the Administrator requires to pro25 vide the report required under paragraph (6). 


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1 (8) PREVENTION OF DISRUPTION OF SALES

2 TRANSACTIONS.—No State shall implement a new 

3 labeling program pursuant to this section in a man4 ner that requires the labeling of a building to occur 

5 after a contract has been executed for the sale of 

6 that building and before the sales transaction is 

7 completed. 

8 (i) IMPLEMENTATION OF LABELING PROGRAM IN

9 FEDERAL BUILDINGS.— 

10 (1) USE OF LABELING PROGRAM.—The Sec11 retary of Energy and the Administrator shall use the 

12 labeling program established under this section to 

13 evaluate energy performance in the facilities of the 

14 Department of Energy and the Environmental Pro15 tection Agency, respectively, to the extent prac16 ticable, and shall encourage and support implemen17 tation efforts in other Federal agencies. 

18 (2) ANNUAL PROGRESS REPORT.—The Sec19 retary of Energy and Administrator shall provide an 

20 annual progress report to Congress and the Office of 

21 Management and Budget detailing efforts to imple22 ment this subsection, as well as any best practices 

23 or needed resources identified as a result of such ef24 forts. 


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1 (j) PUBLIC OUTREACH.—The Secretary of Energy 

2 and the Administrator, in consultation with nonprofit and 

3 industry stakeholders with specialized expertise, and in 

4 conjunction with other energy efficiency public awareness 

5 efforts, shall establish a business and consumer education 

6 program to increase awareness about the importance of 

7 building energy efficiency and to facilitate widespread use 

8 of the labeling program established under this section. 

9 (k) DEFINITIONS.—In this section: 

10 (1) BUILDING TYPE.—The term ‘‘building 

11 type’’ means a grouping of buildings as identified by 

12 their principal building activities, or as grouped by 

13 their use, including office buildings, laboratories, li14 braries, data centers, retail establishments, hotels, 

15 warehouses, and educational buildings. 

16 (2) MEASUREMENT PROTOCOL.—The term 

17 ‘‘measurement protocol’’ means the methodology, 

18 prescribed by the Administrator, for defining a 

19 benchmark for building energy performance for a 

20 specific building type and for measuring that per21 formance against the benchmark. 

22 (3) ACHIEVED PERFORMANCE.—The term 

23 ‘‘achieved performance’’ means the actual energy 

24 consumption of a building as compared to a baseline 

25 building of the same type and size, determined by 


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1 actual consumption data normalized for appropriate 

2 variables. 

3 (4) DESIGNED PERFORMANCE.—The term ‘‘de4 signed performance’’ means the energy consumption 

5 performance a building would achieve if operated 

6 consistent with its design intent for building energy 

7 use, utilizing a standardized set of operational condi8 tions informed by data collected or confirmed during 

9 an energy audit. 

10 (l) AUTHORIZATION OF APPROPRIATIONS.—There 

11 are authorized to be appropriated— 

12 (1) to the Administrator $50,000,000 for imple13 mentation of this section for each fiscal year from 

14 2010 through 2020; and 

15 (2) to the Secretary of Energy $20,000,000 for 

16 implementation of this section for fiscal year 2010 

17 and $10,000,000 for fiscal years 2011 through 

18 2020. 

19 Subtitle B—Lighting and Appliance 

20 Energy Efficiency Programs 

21 SEC. 211. LIGHTING EFFICIENCY STANDARDS. 

22 (a) OUTDOOR LIGHTING.— 

23 (1) DEFINITIONS.— 

24 (A) Section 340(1) of the Energy Policy 

25 and Conservation Act (42 U.S.C. 6311(1)) is 


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1 amended by striking subparagraph (L) and in2 serting the following: 

3 ‘‘(L) Outdoor luminaires. 

4 ‘‘(M) Outdoor high light output lamps. 

5 ‘‘(N) Any other type of industrial equip6 ment which the Secretary classifies as covered 

7 equipment under section 341(b).’’. 

8 (B) Section 340 of the Energy Policy and 

9 Conservation Act (42 U.S.C. 6311) is amended 

10 as adding at the end the following: 

11 ‘‘(25) The term ‘luminaire’ means a complete 

12 lighting unit consisting of one or more light sources 

13 and ballast(s), together with parts designed to dis14 tribute the light, to position and protect such lamps, 

15 and to connect such light sources to the power sup16 ply. 

17 ‘‘(26) The term ‘outdoor luminaire’ means a lu18 minaire that is listed as suitable for wet locations 

19 pursuant to Underwriters Laboratories Inc. stand20 ard UL 1598 and is labeled as ‘Suitable for Wet Lo21 cations’ consistent with section 410.4(A) of the Na22 tional Electrical Code 2005, or is designed for road23 way illumination and meets the requirements of Ad24 dendum A for IESNA TM–15–07: Backlight, 

25 Uplight, and Glare (BUG) Ratings, except for— 


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1 ‘‘(A) luminaires designed for outdoor video 

2 display images that cannot be used in general 

3 lighting applications; 

4 ‘‘(B) portable luminaires designed for use 

5 at construction sites; 

6 ‘‘(C) luminaires designed for continuous 

7 immersion in swimming pools and other water 

8 features; 

9 ‘‘(D) seasonal luminaires incorporating 

10 solely individual lamps rated at 10 watts or 

11 less; 

12 ‘‘(E) luminaires designed to be used in 

13 emergency conditions that incorporate a means 

14 of charging a battery and a device to switch the 

15 power supply to emergency lighting loads auto16 matically upon failure of the normal power sup17 ply; 

18 ‘‘(F) components used for repair of in19 stalled luminaries and that meet the require20 ments of section 342(h); 

21 ‘‘(G) a luminaire utilizing an electrode-less 

22 fluorescent lamp as the light source; 

23 ‘‘(H) decorative gas lighting systems; 

24 ‘‘(I) luminaires designed explicitly for 

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1 formance, stage, film production, and video pro2 duction; 

3 ‘‘(J) luminaires designed as theme ele4 ments in theme/amusement parks and that can5 not be used in most general lighting applica6 tions; 

7 ‘‘(K) luminaires designed explicitly for ve8 hicular roadway tunnels designed to comply 

9 with ANSI/IESNA RP–22–05; 

10 ‘‘(L) luminaires designed explicitly for haz11 ardous locations meeting UL Standard 844; 

12 ‘‘(M) searchlights; 

13 ‘‘(N) luminaires that are designed to be re14 cessed into a building, and that cannot be used 

15 in most general lighting applications; 

16 ‘‘(O) a luminaire rated only for residential 

17 applications utilizing a light source or sources 

18 regulated under the amendments made by sec19 tion 321 of the Energy Independence and Secu20 rity Act of 2007 and with a light output no 

21 greater than 2,600 lumens; 

22 ‘‘(P) a residential pole-mounted luminaire 

23 that is not rated for commercial use utilizing a 

24 light source or sources meeting the efficiency 

25 requirements of section 231 of the Energy 


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1 Independence and Security Act of 2007 and 

2 mounted on a post or pole not taller than 10.5 

3 feet above ground and with a light output not 

4 greater than 2.600 lumens; 

5 ‘‘(Q) a residential fixture with E12 (Can6 delabra) bases that is rated for not more than 

7 300 watts total; or 

8 ‘‘(R) a residential fixture with medium 

9 screw bases that is rated for not more than 145 

10 watts. 

11 ‘‘(27) The term ‘outdoor high light outputlamp’ 

12 means a lamp that— 

13 ‘‘(A) has a rated lumen output not less 

14 than 2601 lumens; 

15 ‘‘(B) is capable of being operated at a volt16 age not less than 110 volts and not greater 

17 than 300 volts, or driven at a constant current 

18 of 6.6 amperes; 

19 ‘‘(C) is not a Parabolic Aluminized Reflec20 tor lamp; and 

21 ‘‘(D) is not a J-type double-ended (T–3) 

22 halogen quartz lamp, utilizing R–7S bases, that 

23 is manufactured before January 1, 2015. 

24 ‘‘(28) The term ‘outdoor lighting control’ means 

25 a device incorporated in a luminaire that receives a 


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1 signal, from either a sensor (such as an occupancy 

2 sensor, motion sensor, or daylight sensor) or an 

3 input signal (including analog or digital signals com4 municated through wired or wireless technology), 

5 and can adjust the light level according to the sig6 nal.’’. 

7 (2) STANDARDS.—Section 342 of the Energy 

8 Policy and Conservation Act (42 U.S.C. 6313) is 

9 amended by adding at the end the following: 

10 ‘‘(g) OUTDOOR LUMINAIRES.— 

11 ‘‘(1) Each outdoor luminaire manufactured on 

12 or after January 1, 2011, shall— 

13 ‘‘(A) have an initial luminaire efficacy of 

14 at least 50 lumens per watt; and 

15 ‘‘(B) be designed to use a light source with 

16 a lumen maintenance, calculated as mean rated 

17 lumens divided by initial lumens, of at least 0.6. 

18 ‘‘(2) Each outdoor luminaire manufactured on 

19 or after January 1, 2013, shall— 

20 ‘‘(A) have an initial luminaire efficacy of 

21 at least 70 lumens per watt; and 

22 ‘‘(B) be designed to use a light source with 

23 a lumen maintenance, calculated as mean rated 

24 lumens divided by initial lumens, of at least 0.6. 


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1 ‘‘(3) Each outdoor luminaire manufactured on 

2 or after January 1, 2015, shall— 

3 ‘‘(A) have an initial luminaire efficacy of 

4 at least 80 lumens per watt; and 

5 ‘‘(B) be designed to use a light source with 

6 a lumen maintenance, calculated as mean rated 

7 lumens divided by initial lumens, of at least 

8 0.65. 

9 ‘‘(4) In addition to the requirements of para10 graphs (1) through (3), each outdoor luminaire man11 ufactured on or after January 1, 2011, shall have 

12 the capability of producing at least two different 

13 light levels, including 100 percent and 60 percent of 

14 full lamp output as tested with the maximum rated 

15 lamp per UL1598 or the manufacturer’s maximum 

16 specified for the luminaire under test. 

17 ‘‘(5)(A) Not later than January 1, 2017, the 

18 Secretary shall issue a final rule amending the appli19 cable standards established in paragraphs (3) and 

20 (4) if technologically feasible and economically justi21 fied. Such a final rule shall be effective no later than 

22 January 1, 2020. 

23 ‘‘(B) A final rule issued under subparagraph 

24 (A) shall establish efficiency standards at the max25 imum level that is technically feasible and economiVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00272 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 cally justified, as provided in subsections (o) and (p) 

2 of section 325. The Secretary may also, in such rule3 making, amend or discontinue the product exclusions 

4 listed in section 340(26)(A) through (P), or amend 

5 the lumen maintenance requirements in paragraph 

6 (3) if the Secretary determines that such amend7 ments are consistent with the purposes of this Act. 

8 ‘‘(C) If the Secretary issues a final rule under 

9 subparagraph (A) establishing amended standards, 

10 the final rule shall provide that the amended stand11 ards apply to products manufactured on or after 

12 January 1, 2020, or one year after the date on 

13 which the final amended standard is published, 

14 whichever is later. 

15 ‘‘(h) OUTDOOR HIGH LIGHT OUTPUT LAMPS.—Each 

16 outdoor high light output lamp manufactured on or after 

17 January 1, 2012, shall have a lighting efficiency of at least 

18 45 lumens per watt.’’. 

19 (3) TEST PROCEDURES.—Section 343(a) of the 

20 Energy Policy and Conservation Act (42 U.S.C. 

21 6314(a)) is amended by adding at the end the fol22 lowing: 

23 ‘‘(10) OUTDOOR LIGHTING.— 

24 ‘‘(A) With respect to outdoor luminaires 

25 and outdoor high light output lamps, the test 


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1 procedures shall be based upon the test proce2 dures specified in illuminating engineering soci3 ety procedures LM–79 as of March 1, 2009, 

4 and LM–31, and/or other appropriate con5 sensus test procedures developed by the Illu6 minating Engineering Society or other appro7 priate consensus standards bodies. 

8 ‘‘(B) If illuminating engineering society 

9 procedure LM–79 is amended, the Secretary 

10 shall amend the test procedures established in 

11 subparagraph (A) as necessary to be consistent 

12 with the amended LM–79 test procedure, unless 

13 the Secretary determines, by rule, published in 

14 the Federal Register and supported by clear 

15 and convincing evidence, that to do so would 

16 not meet the requirements for test procedures 

17 under paragraph (2). 

18 ‘‘(C) The Secretary may revise the test 

19 procedures for outdoor luminaires or outdoor 

20 high light output lamps by rule consistent with 

21 paragraph (2), and may incorporate as appro22 priate consensus test procedures developed by 

23 the Illuminating Engineering Society or other 

24 appropriate consensus standards bodies.’’. 


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1 (4) PREEMPTION.—Section 345 of the Energy 

2 Policy and Conservation Act (42 U.S.C. 6316) is 

3 amended by adding at the end the following: 

4 ‘‘(i)(1) Except as provided in paragraph (2), section 

5 327 shall apply to outdoor luminaires to the same extent 

6 and in the same manner as the section applies under part 

7 B. 

8 ‘‘(2) Any State standard that is adopted on or before 

9 January 1, 2015, pursuant to a statutory requirement to 

10 adopt efficiency standards for reducing outdoor lighting 

11 energy use enacted prior to January 31, 2008, shall not 

12 be preempted.’’. 

13 (5) ENERGY EFFICIENCY STANDARDS FOR CER14 TAIN LUMINAIRES.—Not later than 1 year after the 

15 date of enactment of this Act, the Secretary of En16 ergy shall, in consultation with the National Elec17 trical Manufacturers Association, collect data for 

18 United States sales of luminaires described in sec19 tion 340(26)(H) and (M) of the Energy Policy and 

20 Conservation Act, to determine the historical growth 

21 rate. If the Secretary finds that the growth in mar22 ket share of such luminaires exceeds twice the year 

23 to year rate of the average of the previous three 

24 years, then the Secretary shall within 12 months ini25 tiate a rulemaking to determine if such exclusion 


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1 should be eliminated, if substitute products exist 

2 that perform more efficiently and fulfill the perform3 ance functions of these luminaires. 

4 (b) PORTABLE LIGHTING.— 

5 (1) PORTABLE LIGHT FIXTURES.— 

6 (A) DEFINITIONS.—Section 321 of the En7 ergy Policy and Conservation Act (42 U.S.C. 

8 6291) is amended by adding at the end the fol9 lowing: 

10 ‘‘(67) ART WORK LIGHT FIXTURE.—The term 

11 ‘art work light fixture’ means a light fixture de12 signed only to be mounted directly to an art work 

13 and for the purpose of illuminating that art work. 

14 ‘‘(68) LED LIGHT ENGINE.—The term ‘LED 

15 light engine’ or ‘LED light engine with integral heat 

16 sink’ means a subsystem of an LED light fixture 

17 that— 

18 ‘‘(A) includes 1 or more LED components, 

19 including— 

20 ‘‘(i) an LED driver power source with 

21 electrical and mechanical interfaces; and 

22 ‘‘(ii) an integral heat sink to provide 

23 thermal dissipation; and 


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1 ‘‘(B) may be designed to accept additional 

2 components that provide aesthetic, optical, and 

3 environmental control. 

4 ‘‘(69) LED LIGHT FIXTURE.—The term ‘LED 

5 light fixture’ means a complete lighting unit con6 sisting of— 

7 ‘‘(A) an LED light source with 1 or more 

8 LED lamps or LED light engines; and 

9 ‘‘(B) parts— 

10 ‘‘(i) to distribute the light; 

11 ‘‘(ii) to position and protect the light 

12 source; and 

13 ‘‘(iii) to connect the light source to 

14 electrical power. 

15 ‘‘(70) LIGHT FIXTURE.—The term ‘light fix16 ture’ means a product designed to provide light that 

17 includes— 

18 ‘‘(A) at least 1 lamp socket; and 

19 ‘‘(B) parts— 

20 ‘‘(i) to distribute the light; 

21 ‘‘(ii) position and protect 1 or more 

22 lamps; and 

23 ‘‘(iii) to connect 1 or more lamps to a 

24 power supply. 

25 ‘‘(71) PORTABLE LIGHT FIXTURE.— 


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1 ‘‘(A) IN GENERAL.—The term ‘portable 

2 light fixture’ means a light fixture that has a 

3 flexible cord and an attachment plug for con4 nection to a nominal 120-volt circuit that— 

5 ‘‘(i) allows the user to relocate the 

6 product without any rewiring; and 

7 ‘‘(ii) typically can be controlled with a 

8 switch located on the product or the power 

9 cord of the product. 

10 ‘‘(B) EXCLUSIONS.—The term ‘portable 

11 light fixture’ does not include— 

12 ‘‘(i) direct plug-in night lights, sun or 

13 heat lamps, medical or dental lights, port14 able electric hand lamps, signs or commer15 cial advertising displays, photographic 

16 lamps, germicidal lamps, or light fixtures 

17 for marine use or for use in hazardous lo18 cations (as those terms are defined in 

19 ANSI/NFPA 70 of the National Electrical 

20 Code); or 

21 ‘‘(ii) decorative lighting strings, deco22 rative lighting outfits, or electric candles or 

23 candelabra without lamp shades that are 

24 covered by Underwriter Laboratories (UL) 


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1 standard 588, ‘Seasonal and Holiday Dec2 orative Products’.’’. 

3 (B) COVERAGE.— 

4 (i) IN GENERAL.—Section 322(a) of 

5 the Energy Policy and Conservation Act 

6 (42 U.S.C. 6292(a)) is amended— 

7 (I) by redesignating paragraph 

8 (20) as paragraph (24); and 

9 (II) by inserting after paragraph 

10 (19) the following: 

11 ‘‘(20) Portable light fixtures.’’. 

12 (ii) CONFORMING AMENDMENTS.— 

13 Section 325(l) of the Energy Policy and 

14 Conservation Act (42 U.S.C. 6295(l)) is 

15 amended by striking ‘‘paragraph (19)’’ 

16 each place it appears in paragraphs (1) 

17 and (2) and inserting ‘‘paragraph (21)’’. 

18 (C) TEST PROCEDURES.—Section 323(b) 

19 of the Energy Policy and Conservation Act (42 

20 U.S.C. 6293(b)) is amended by adding at the 

21 end the following: 

22 ‘‘(19) LED FIXTURES AND LED LIGHT EN23 GINES.—Test procedures for LED fixtures and LED 

24 light engines shall be based on Illuminating Engi25 neering Society of North America (IESNA) test proVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00279 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 cedure LM–79, Approved Method for Electrical and 

2 Photometric Testing of Solid-State Lighting Devices, 

3 and IESNA-approved test procedure for testing 

4 LED light engines.’’. 

5 (D) STANDARDS.—Section 325 of the En6 ergy Policy and Conservation Act (42 U.S.C. 

7 6295) is amended— 

8 (i) by redesignating subsection (ii) as 

9 subsection (nn); 

10 (ii) in subsection (nn)(2), as redesig11 nated in clause (i) of this subparagraph, by 

12 striking ‘‘(hh)’’ each place it appears and 

13 inserting ‘‘(mm)’’; and 

14 (iii) by inserting after subsection (hh) 

15 the following: 

16 ‘‘(ii) PORTABLE LIGHT FIXTURES.— 

17 ‘‘(1) IN GENERAL.—Subject to paragraphs (2) 

18 and (3), portable light fixtures manufactured on or 

19 after January 1, 2012, shall meet 1 or more of the 

20 following requirements: 

21 ‘‘(A) Be a fluorescent light fixture that 

22 meets the requirements of the Energy Star Pro23 gram for Residential Light Fixtures, Version 

24 4.2. 


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1 ‘‘(B) Be equipped with only 1 or more 

2 GU–24 line-voltage sockets, not be rated for 

3 use with incandescent lamps of any type (as de4 fined in ANSI standards), and meet the re5 quirements of version 4.2 of the Energy Star 

6 program for residential light fixtures. 

7 ‘‘(C) Be an LED light fixture or a light 

8 fixture with an LED light engine and comply 

9 with the following minimum requirements: 

10 ‘‘(i) Minimum light output: 200 

11 lumens (initial). 

12 ‘‘(ii) Minimum LED light engine effi13 cacy: 40 lumens/watt installed in fixtures 

14 that meet the minimum light fixture effi15 cacy of 29 lumens/watt or, alternatively, a 

16 minimum LED light engine efficacy of 60 

17 lumens/watt for fixtures that do not meet 

18 the minimum light fixture efficacy of 29 

19 lumens/watt. 

20 ‘‘(iii) All portable fixtures shall have a 

21 minimum LED light fixture efficacy of 29 

22 lumens/watt and a minimum LED light 

23 engine efficacy of 60 lumens/watt by Janu24 ary 1, 2016. 


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1 ‘‘(iv) Color Correlated Temperature 

2 (CCT): 2700K through 4000K. 

3 ‘‘(v) Minimum Color Rendering Index 

4 (CRI): 75. 

5 ‘‘(vi) Power factor equal to or greater 

6 than 0.70. 

7 ‘‘(vii) Portable luminaries that have 

8 internal power supplies shall have zero 

9 standby power when the luminaire is 

10 turned off. 

11 ‘‘(viii) LED light sources shall deliver 

12 at least 70 percent of initial lumens for at 

13 least 25,000 hours. 

14 ‘‘(D)(i) Be equipped with an ANSI-des15 ignated E12, E17, or E26 screw-based socket 

16 and be prepackaged and sold together with 1 

17 screw-based compact fluorescent lamp or screw18 based LED lamp for each screw-based socket 

19 on the portable light fixture. 

20 ‘‘(ii) The compact fluorescent or LED 

21 lamps prepackaged with the light fixture shall 

22 be fully compatible with any light fixture con23 trols incorporated into the light fixture (for ex24 ample, light fixtures with dimmers shall be 

25 packed with dimmable lamps). 


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1 ‘‘(iii) Compact fluorescent lamps pre2 packaged with light fixtures shall meet the re3 quirements of the Energy Star Program for 

4 CFLs Version 4.0. 

5 ‘‘(iv) Screw-based LED lamps shall comply 

6 with the minimum requirements described in 

7 subparagraph (C). 

8 ‘‘(E) Be equipped with 1 or more single9 ended, non-screw based halogen lamp sockets 

10 (line or low voltage), a dimmer control or high11 low control, and be rated for a maximum of 100 

12 watts. 

13 ‘‘(2) REVIEW.— 

14 ‘‘(A) REVIEW.—The Secretary shall review 

15 the criteria and standards established under 

16 paragraph (1) to determine if revised standards 

17 are technologically feasible and economically 

18 justified. 

19 ‘‘(B) COMPONENTS.—The review shall in20 clude consideration of— 

21 ‘‘(i) whether a separate compliance 

22 procedure is still needed for halogen fix23 tures described in subparagraph (E) and, 

24 if necessary, what an appropriate standard 

25 for halogen fixtures shall be; 


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1 ‘‘(ii) whether the specific technical cri2 teria described in subparagraphs (A), (C), 

3 and (D)(iii) should be modified; and 

4 ‘‘(iii) which fixtures should be exempt5 ed from the light fixture efficacy standard 

6 as of January 1, 2016, because the fix7 tures are primarily decorative in nature (as 

8 defined by the Secretary) and, even if ex9 empted, are likely to be sold in limited 

10 quantities. 

11 ‘‘(C) TIMING.— 

12 ‘‘(i) DETERMINATION.—Not later 

13 than January 1, 2014, the Secretary shall 

14 publish amended standards, or a deter15 mination that no amended standards are 

16 justified, under this subsection. 

17 ‘‘(ii) STANDARDS.—Any standards 

18 under this paragraph shall take effect on 

19 January 1, 2016. 

20 ‘‘(3) ART WORK LIGHT FIXTURES.—Art work 

21 light fixtures manufactured on or after January 1, 

22 2012, shall— 

23 ‘‘(A) comply with paragraph (1); or 

24 ‘‘(B)(i) contain only ANSI-designated E12 

25 screw-based line-voltage sockets; 


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1 ‘‘(ii) have not more than 3 sockets; 

2 ‘‘(iii) be controlled with an integral high/ 

3 low switch; 

4 ‘‘(iv) be rated for not more than 25 watts 

5 if fitted with 1 socket; and 

6 ‘‘(v) be rated for not more than 15 watts 

7 per socket if fitted with 2 or 3 sockets. 

8 ‘‘(4) EXCEPTION FROM PREEMPTION.—Not9 withstanding section 327, Federal preemption shall 

10 not apply to a regulation concerning portable light 

11 fixtures adopted by the California Energy Commis12 sion on or before January 1, 2014.’’. 

13 (2) GU–24 BASE LAMPS.— 

14 (A) DEFINITIONS.—Section 321 of the En15 ergy Policy and Conservation Act (42 U.S.C. 

16 6291) (as amended by paragraph (1)(A)) is 

17 amended by adding at the end the following: 

18 ‘‘(72) GU–24.—The term ‘GU–24’ means the 

19 designation of a lamp socket, based on a coding sys20 tem by the International Electrotechnical Commis21 sion, under which— 

22 ‘‘(A) ‘G’ indicates a holder and socket type 

23 with 2 or more projecting contacts, such as pins 

24 or posts; 


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1 ‘‘(B) ‘U’ distinguishes between lamp and 

2 holder designs of similar type that are not 

3 interchangeable due to electrical or mechanical 

4 requirements; and 

5 ‘‘(C) 24 indicates the distance in millime6 ters between the electrical contact posts. 

7 ‘‘(73) GU–24 ADAPTOR.— 

8 ‘‘(A) IN GENERAL.—The term ‘GU–24 

9 Adaptor’ means a 1-piece device, pig-tail, wiring 

10 harness, or other such socket or base attach11 ment that— 

12 ‘‘(i) connects to a GU–24 socket on 1 

13 end and provides a different type of socket 

14 or connection on the other end; and 

15 ‘‘(ii) does not alter the voltage. 

16 ‘‘(B) EXCLUSION.—The term ‘GU–24 

17 Adaptor’ does not include a fluorescent ballast 

18 with a GU–24 base. 

19 ‘‘(74) GU–24 BASE LAMP.—‘GU–24 base lamp’ 

20 means a light bulb designed to fit in a GU–24 sock21 et.’’. 

22 (B) STANDARDS.—Section 325 of the En23 ergy Policy and Conservation Act (42 U.S.C. 

24 6295) (as amended by paragraph (1)(D)) is 


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1 amended by inserting after subsection (ii) the 

2 following: 

3 ‘‘(jj) GU–24 BASE LAMPS.— 

4 ‘‘(1) IN GENERAL.—A GU–24 base lamp shall 

5 not be an incandescent lamp as defined by ANSI. 

6 ‘‘(2) GU–24 ADAPTORS.—GU–24 adaptors shall 

7 not adapt a GU–24 socket to any other line voltage 

8 socket.’’. 

9 (3) STANDARDS FOR CERTAIN INCANDESCENT

10 REFLECTOR LAMPS.—Section 325(i) of the Energy 

11 Policy and Conservation Act (42 U.S.C. 6293(i)), as 

12 amended by section 171(a)(12) of this Act, is 

13 amended by adding at the end the following: 

14 ‘‘(9) CERTAIN INCANDESCENT REFLECTOR

15 LAMPS.—(A) No later than 12 months after enact16 ment of this paragraph, the Secretary shall publish 

17 a final rule establishing standards for incandescent 

18 reflector lamp types described in paragraph (1)(C). 

19 Such standards shall be effective on July 1, 2013. 

20 ‘‘(B) Any rulemaking for incandescent reflector 

21 lamps completed after enactment of this section 

22 shall consider standards for all incandescent reflec23 tor lamps, inclusive of those specified in paragraph 

24 (1)(C). 


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1 ‘‘(10) REFLECTOR LAMPS.—No later than Jan2 uary 1, 2015, the Secretary shall publish a final rule 

3 establishing and amending standards for reflector 

4 lamps, including incandescent reflector lamps. Such 

5 standards shall be effective no sooner than three 

6 years after publication of the final rule. Such rule7 making shall consider incandescent and non8 incandescent technologies. Such rulemaking shall 

9 consider a new metric other than lumens-per-watt 

10 based on the photometric distribution of light from 

11 such lamps.’’. 

12 SEC. 212. OTHER APPLIANCE EFFICIENCY STANDARDS. 

13 (a) STANDARDS FOR WATER DISPENSERS, HOT

14 FOOD HOLDING CABINETS, AND PORTABLE ELECTRIC

15 SPAS.— 

16 (1) DEFINITIONS.—Section 321 of the Energy 

17 Policy and Conservation Act (42 U.S.C. 6291), as 

18 amended by section 211 of this Act, is further 

19 amended by adding at the end the following: 

20 ‘‘(75) The term ‘water dispenser’ means a fac21 tory-made assembly that mechanically cools and 

22 heats potable water and that dispenses the cooled or 

23 heated water by integral or remote means. 

24 ‘‘(76) The term ‘bottle-type water dispenser’ 

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1 pensing both hot and cold water that uses a remov2 able bottle or container as the source of potable 

3 water. 

4 ‘‘(77) The term ‘commercial hot food holding 

5 cabinet’ means a heated, fully enclosed compartment 

6 with one or more solid or glass doors that is de7 signed to maintain the temperature of hot food that 

8 has been cooked in a separate appliance. Such term 

9 does not include heated glass merchandizing cabi10 nets, drawer warmers, commercial hot food holding 

11 cabinets with interior volumes of less than 8 cubic 

12 feet, or cook-and-hold appliances. 

13 ‘‘(78) The term ‘portable electric spa’ means a 

14 factory-built electric spa or hot tub, supplied with 

15 equipment for heating and circulating water.’’. 

16 (2) COVERAGE.—Section 322(a) of the Energy 

17 Policy and Conservation Act (42 U.S.C. 6292(a)), as 

18 amended by section 211(b)(1)(B) of this Act, is fur19 ther amended by inserting after paragraph (20) the 

20 following new paragraphs: 

21 ‘‘(21) Bottle type water dispensers. 

22 ‘‘(22) Commercial hot food holding cabinets. 

23 ‘‘(23) Portable electric spas.’’. 

24 (3) TEST PROCEDURES.—Section 323(b) of the 

25 Energy Policy and Conservation Act (42 U.S.C. 


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1 6293(b)), as amended by section 211(b)(1)(C) of 

2 this Act, is further amended by adding at the end 

3 the following: 

4 ‘‘(20) BOTTLE TYPE WATER DISPENSERS.— 

5 Test procedures for bottle type water dispensers 

6 shall be based on ‘Energy Star Program Require7 ments for Bottled Water Coolers version 1.1’ pub8 lished by the Environmental Protection Agency. 

9 Units with an integral, automatic timer shall not be 

10 tested using section 4D, ‘Timer Usage,’ of the test 

11 criteria. 

12 ‘‘(21) COMMERCIAL HOT FOOD HOLDING CABI13 NETS.—Test procedures for commercial hot food 

14 holding cabinets shall be based on the test proce15 dures described in ANSI/ASTM F2140–01 (Test for 

16 idle energy rate-dry test). Interior volume shall be 

17 based on the method shown in the Environmental 

18 Protection Agency’s ‘Energy Star Program Require19 ments for Commercial Hot Food Holding Cabinets’ 

20 as in effect on August 15, 2003. 

21 ‘‘(22) PORTABLE ELECTRIC SPAS.—Test proce22 dures for portable electric spas shall be based on the 

23 test method for portable electric spas contained in 

24 section 1604, title 20, California Code of Regula25 tions as amended on December 3, 2008. When the 


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1 American National Standards Institute publishes a 

2 test procedure for portable electric spas, the Sec3 retary shall revise the Department of Energy’s pro4 cedure.’’. 

5 (4) STANDARDS.—Section 325 of the Energy 

6 Policy and Conservation Act (42 U.S.C. 6295), as 

7 amended by section 211 of this Act, is further 

8 amended by adding after subsection (jj) the fol9 lowing: 

10 ‘‘(kk) BOTTLE TYPE WATER DISPENSERS.—Effec11 tive January 1, 2012, bottle-type water dispensers de12 signed for dispensing both hot and cold water shall not 

13 have standby energy consumption greater than 1.2 kilo14 watt-hours per day. 

15 ‘‘(ll) COMMERCIAL HOT FOOD HOLDING CABI16 NETS.—Effective January 1, 2012, commercial hot food 

17 holding cabinets with interior volumes of 8 cubic feet or 

18 greater shall have a maximum idle energy rate of 40 watts 

19 per cubic foot of interior volume. 

20 ‘‘(mm) PORTABLE ELECTRIC SPAS.—Effective Janu21 ary 1, 2012, portable electric spas shall not have a normalized standby power greater than 5(V2 22 ⁄3) Watts where V 

23 = the fill volume in gallons. 

24 The Secretary of Energy shall consider revisions to the 

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1 ance with subsection (o) and publish a final rule no later 

2 than January 1, 2013, establishing such revised stand3 ards, or make a finding that no revisions are technically 

4 feasible and economically justified. Any such revised 

5 standards shall take effect January 1, 2016.’’. 

6 (b) COMMERCIAL FURNACE EFFICIENCY STAND7 ARDS.—Section 342(a) of the Energy Policy and Con8 servation Act (42 U.S.C. 6312(a)) is amended by inserting 

9 after paragraph (10) the following new paragraph: 

10 ‘‘(11) WARM AIR FURNACES.—Each warm air 

11 furnace with an input rating of 225,000 Btu per 

12 hour or more and manufactured after January 1, 

13 2011, shall meet the following standard levels: 

14 ‘‘(A) GAS-FIRED UNITS.— 

15 ‘‘(i) Minimum thermal efficiency of 80 

16 percent. 

17 ‘‘(ii) Include an interrupted or inter18 mittent ignition device. 

19 ‘‘(iii) Have jacket losses not exceeding 

20 0.75 percent of the input rating. 

21 ‘‘(iv) Have either power venting or a 

22 flue damper. 

23 ‘‘(B) OIL-FIRED UNITS.— 

24 ‘‘(i) Minimum thermal efficiency of 81 

25 percent. 


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1 ‘‘(ii) Have jacket losses not exceeding 

2 0.75 percent of the input rating. 

3 ‘‘(iii) Have either power venting or a 

4 flue damper.’’. 

5 SEC. 213. APPLIANCE EFFICIENCY DETERMINATIONS AND 

6 PROCEDURES. 

7 (a) DEFINITION OF ENERGY CONSERVATION STAND8 ARD.—Section 321(6) of the Energy Policy and Conserva9 tion Act (42 U.S.C. 6291(6)) is amended to read as fol10 lows: 

11 ‘‘(6) ENERGY CONSERVATION STANDARD.— 

12 ‘‘(A) IN GENERAL.—The term ‘energy con13 servation standard’ means 1 or more perform14 ance standards that— 

15 ‘‘(i) for covered products (excluding 

16 clothes washers, dishwashers, showerheads, 

17 faucets, water closets, and urinals), pre18 scribe a minimum level of energy efficiency 

19 or a maximum quantity of energy use, de20 termined in accordance with test proce21 dures prescribed under section 323; 

22 ‘‘(ii) for showerheads, faucets, water 

23 closets, and urinals, prescribe a minimum 

24 level of water efficiency or a maximum 

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1 cordance with test procedures prescribed 

2 under section 323; and 

3 ‘‘(iii) for clothes washers and dish4 washers— 

5 ‘‘(I) prescribe a minimum level of 

6 energy efficiency or a maximum quan7 tity of energy use, determined in ac8 cordance with test procedures pre9 scribed under section 323; and 

10 ‘‘(II) may include a minimum 

11 level of water efficiency or a maximum 

12 quantity of water use, determined in 

13 accordance with those test procedures. 

14 ‘‘(B) INCLUSIONS.—The term ‘energy con15 servation standard’ includes— 

16 ‘‘(i) 1 or more design requirements, if 

17 the requirements were established— 

18 ‘‘(I) on or before the date of en19 actment of this subclause; 

20 ‘‘(II) as part of a direct final rule 

21 under section 325(p)(4); or 

22 ‘‘(III) as part of a final rule pub23 lished on or after January 1, 2012, 

24 and 


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1 ‘‘(ii) any other requirements that the 

2 Secretary may prescribe under section 

3 325(r). 

4 ‘‘(C) EXCLUSION.—The term ‘energy con5 servation standard’ does not include a perform6 ance standard for a component of a finished 

7 covered product, unless regulation of the com8 ponent is specifically authorized or established 

9 pursuant to this title.’’. 

10 (b) ADOPTING CONSENSUS TEST PROCEDURES AND

11 TEST PROCEDURES IN USE ELSEWHERE.—Section 

12 323(b) of the Energy Policy and Conservation Act (42 

13 U.S.C. 6293(b)), as amended by sections 211 and 212 of 

14 this Act, is further amended by adding the following new 

15 paragraph after paragraph (22): 

16 ‘‘(23) CONSENSUS AND ALTERNATE TEST PRO17 CEDURES.— 

18 ‘‘(A) RECEIPT OF JOINT RECOMMENDA19 TION OR ALTERNATE TESTING PROCEDURE.— 

20 On receipt of— 

21 ‘‘(i) a statement that is submitted 

22 jointly by interested persons that are fairly 

23 representative of relevant points of view 

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1 ciency advocates), as determined by the 

2 Secretary, and contains recommendations 

3 with respect to the testing procedure for a 

4 covered product; or 

5 ‘‘(ii) a submission of a testing proce6 dure currently in use for a covered product 

7 by a State, nation, or group of nations— 

8 ‘‘(I) if the Secretary determines 

9 that the recommended testing proce10 dure contained in the statement or 

11 submission is in accordance with sub12 section (b)(3), the Secretary may 

13 issue a final rule that establishes an 

14 energy or water conservation testing 

15 procedure that is published simulta16 neously with a notice of proposed rule17 making that proposes a new or 

18 amended energy or water conservation 

19 testing procedure that is identical to 

20 the testing procedure established in 

21 the final rule to establish the rec22 ommended testing procedure (referred 

23 to in this paragraph as a ‘direct final 

24 rule’); or 


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1 ‘‘(II) if the Secretary determines 

2 that a direct final rule cannot be 

3 issued based on the statement or sub4 mission, the Secretary shall publish a 

5 notice of the determination, together 

6 with an explanation of the reasons for 

7 the determination. 

8 ‘‘(B) PUBLIC COMMENT.—The Secretary 

9 shall solicit public comment for a period of at 

10 least 110 days with respect to each direct final 

11 rule issued by the Secretary under subpara12 graph (A)(ii)(I). 

13 ‘‘(C) WITHDRAWAL OF DIRECT FINAL

14 RULES.— 

15 ‘‘(i) IN GENERAL.—Not later than 

16 120 days after the date on which a direct 

17 final rule issued under subparagraph 

18 (A)(ii)(I) is published in the Federal Reg19 ister, the Secretary shall withdraw the di20 rect final rule if— 

21 ‘‘(I) the Secretary receives 1 or 

22 more adverse public comments relat23 ing to the direct final rule under sub24 paragraph (B)or any alternative joint 

25 recommendation; and 


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1 ‘‘(II) based on the rulemaking 

2 record relating to the direct final rule, 

3 the Secretary determines that such 

4 adverse public comments or alter5 native joint recommendation may pro6 vide a reasonable basis for with7 drawing the direct final rule under 

8 paragraph (3) or any other applicable 

9 law. 

10 ‘‘(ii) ACTION ON WITHDRAWAL.—On 

11 withdrawal of a direct final rule under 

12 clause (i), the Secretary shall— 

13 ‘‘(I) proceed with the notice of 

14 proposed rulemaking published simul15 taneously with the direct final rule as 

16 described in subparagraph (A)(ii)(I); 

17 and 

18 ‘‘(II) publish in the Federal Reg19 ister the reasons why the direct final 

20 rule was withdrawn. 

21 ‘‘(iii) TREATMENT OF WITHDRAWN DI22 RECT FINAL RULES.—A direct final rule 

23 that is withdrawn under clause (i) shall 

24 not be considered to be a final rule for 

25 purposes of subsection (b). 


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1 ‘‘(D) EFFECT OF PARAGRAPH.—Nothing 

2 in this paragraph authorizes the Secretary to 

3 issue a direct final rule based solely on receipt 

4 of more than 1 statement containing rec5 ommended test procedures relating to the direct 

6 final rule.’’. 

7 (c) UPDATING TELEVISION TEST METHODS.—Sec8 tion 323(b) of the Energy Policy and Conservation Act 

9 (42 U.S.C. 6293(b)), as amended by sections 211 and 212 

10 of this Act, and subsection (b) of this section, is further 

11 amended by adding at the end the following new para12 graph: 

13 ‘‘(24) TELEVISIONS.—(A) On the date of enact14 ment of this section, Appendix H to Subpart B of 

15 Part 430 of the United States Code of Federal Reg16 ulations, ‘Uniform Test Method for Measuring the 

17 Energy Consumption of Television Sets’, is repealed. 

18 ‘‘(B) No later than 12 months after enactment 

19 of this paragraph the Secretary shall publish in the 

20 Federal Register a final rule prescribing a new test 

21 method for televisions.’’. 

22 (d) CRITERIA FOR PRESCRIBING NEW OR AMENDED

23 STANDARDS.—(1) Section 325(o)(2)(B)(i) of the Energy 

24 Policy and Conservation Act (42 U.S.C. 6295(o)(2)(B)(i)) 

25 is amended as follows: 


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1 (A) By striking ‘‘and’’ at the end of subclause 

2 (VI). 

3 (B) By and inserting the following new sub4 clauses after subclause (VI): 

5 ‘‘(VII) the estimated value of the carbon dioxide 

6 or other emission reductions that will be achieved by 

7 virtue of the higher energy efficiency of the covered 

8 products resulting from the imposition of the stand9 ard; 

10 ‘‘(VIII) the estimated impact of standards for a 

11 particular product on average consumer energy 

12 prices; 

13 ‘‘(IX) the increased energy efficiency that may 

14 be attributable to the installation of Smart Grid 

15 technologies or capabilities in the covered products, 

16 if applicable in the determination of the Secretary; 

17 ‘‘(X) the availability in the United States or in 

18 other nations of examples or prototypes of covered 

19 products that achieve significantly higher efficiency 

20 standards for energy or for water; and’’. 

21 (C) By redesignating subclause (VII) as sub22 clause (XI). 

23 (2) Section 325(o)(2)(B)(iii) of such Act is amended 

24 as follows: 

25 (A) By striking ‘‘three’’ and inserting ‘‘5’’. 


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1 (B) By inserting after the first sentence the fol2 lowing ‘‘For products with an average expected use3 ful life of less than 5 years, such rebuttable pre4 sumption shall be determined utilizing 75 percent of 

5 the product’s average expected useful life as a multi6 plier instead of 5.’’. 

7 (C) By striking the last sentence and inserting 

8 the following: ‘‘Such a presumption may be rebutted 

9 only if the Secretary finds, based on clear, con10 vincing, and reliable evidence, that— 

11 ‘‘(I) such standard level would cause serious 

12 and unavoidable hardship to the average consumer 

13 of the product, or to manufacturers supplying a sig14 nificant portion of the market for the product, that 

15 substantially outweighs the standard level’s benefits; 

16 ‘‘(II) the standard and implementing regula17 tions cannot be designed to avoid or mitigate the 

18 hardship identified under subparagraph (I), through 

19 the adoption of regional standards consistent with 

20 paragraph (6) of this subsection, or other reasonable 

21 means consistent with this chapter; 

22 ‘‘(III) the same or substantially similar hard23 ship would not occur under a standard adopted in 

24 the absence of the presumption, but that otherwise 

25 meets the requirements of this section; and 


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1 ‘‘(IV) the hardship cannot be avoided or miti2 gated pursuant the procedures specified in section 

3 504 of the Department of Energy Organization Act 

4 (42 U.S.C. 7194). 

5 A determination by the Secretary that the criteria trig6 gering such presumption are not met, or that the criterion 

7 for rebutting the presumption are met shall not be taken 

8 into consideration in the Secretary’s determination of 

9 whether a standard is economically justified.’’. 

10 (e) OBTAINING APPLIANCE INFORMATION FROM

11 MANUFACTURERS.—Section 326(d) of the Energy Policy 

12 and Conservation Act (42 U.S.C. 6295(d)) is amended to 

13 read as follows: 

14 ‘‘(d) INFORMATION REQUIREMENTS.—(1) For pur15 poses of carrying out this part, the Secretary shall publish 

16 proposed regulations not later than one year after the date 

17 of enactment of the American Clean Energy and Security 

18 Act of 2009, and after receiving public comment, final reg19 ulations not later than 18 months from such date of enact20 ment under this part or other provision of law adminis21 tered by the Secretary, which shall require each manufac22 turer of a covered product to submit information or re23 ports to the Secretary on an annual basis in a form adopt24 ed by the Secretary. Such reports shall include informa25 tion or data with respect to— 


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1 ‘‘(A) the manufacturers’ compliance with all re2 quirements applicable pursuant to this part; 

3 ‘‘(B) the economic impact of any proposed en4 ergy conservation standard; 

5 ‘‘(C) the manufacturers’ annual shipments of 

6 each class or category of covered products, orga7 nized, to the maximum extent practicable, by— 

8 ‘‘(i) energy efficiency, energy use, and, if 

9 applicable, water use; 

10 ‘‘(ii) the presence or absence of such effi11 ciency related or energy consuming operational 

12 characteristics or components as the Secretary 

13 determines are relevant for the purposes of car14 rying out this part; and 

15 ‘‘(iii) the State or regional location of sale, 

16 for covered products for which the Secretary 

17 may adopt regional standards; and 

18 ‘‘(D) such other categories of information as 

19 the Secretary deems relevant to carry out this part, 

20 including such other information as may be nec21 essary to establish and revise test procedures, label22 ing rules, and energy conservation standards and to 

23 insure compliance with the requirements of this 

24 part. 


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1 ‘‘(2) In adopting regulations under this subsection, 

2 the Secretary shall consider existing public sources of in3 formation, including nationally recognized certification 

4 programs of trade associations. 

5 ‘‘(3) The Secretary shall exercise authority under this 

6 section in a manner designed to minimize unnecessary 

7 burdens on manufacturers of covered products. 

8 ‘‘(4) To the extent that they do not conflict with the 

9 duties of the Secretary in carrying out this part, the provi10 sions of section 11(d) of the Energy Supply and Environ11 mental Coordination Act of 1974 (15 U.S.C. 796(d)) shall 

12 apply with respect to information obtained under this sub13 section to the same extent and in the same manner as 

14 they apply with respect to other energy information ob15 tained under such section.’’. 

16 (f) STATE WAIVER.—Section 327(c) of the Energy 

17 Policy and Conservation Act (42 U.S.C. 6297(c)), as 

18 amended by section 171(a)(19) of this Act, is further 

19 amended by adding at the end the following: 

20 ‘‘(12) is a regulation concerning standards for 

21 hot food holding cabinets, drinking water dispensers 

22 and portable electric spas adopted by the California 

23 Energy Commission on or before January 1, 2013.’’. 


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1 (g) WAIVER OF FEDERAL PREEMPTION.—Paragraph 

2 (1) of section 327(d) of the Energy Policy and Conserva3 tion Act (42 U.S.C. 6297(d)) is amended as follows: 

4 (1) In subparagraph (A) by striking ‘‘State reg5 ulation’’ each place it appears and inserting ‘‘State 

6 statute or regulation’’. 

7 (2) In subparagraph (B) by adding at the end 

8 the following new sentence: ‘‘In making such a find9 ing, the Secretary may not reject a petition for fail10 ure of the petitioning State or river basin commis11 sion to produce confidential information maintained 

12 by any manufacturer or distributor, or group or as13 sociation of manufacturers or distributors, and 

14 which the petitioning party does not have the legal 

15 right to obtain.’’. 

16 (3) In clause (ii) of subparagraph (C) by strik17 ing ‘‘costs’’ each place it appears and inserting ‘‘es18 timated costs’’. 

19 (4) In subparagraph (C) by striking ‘‘within the 

20 context of the State’s energy plan and forecast, 

21 and,’’. 

22 (h) INCLUSION OF CARBON OUTPUT ON APPLIANCE

23 ‘‘ENERGYGUIDE’’ LABELS.—(1) Section 324(a)(2) of the 

24 Energy Policy and Conservation Act (42 U.S.C. 


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1 6294(a)(2)) is amended by adding the following at the 

2 end: 

3 ‘‘(I)(i) Not later than 90 days after the 

4 date of enactment of this subparagraph, the 

5 Commission shall initiate a rulemaking to im6 plement the additional labeling requirements 

7 specified in subsection (c)(1)(C) of this section 

8 with an effective date for the revised labeling 

9 requirement not later than 12 months from 

10 issuance of the final rule. 

11 ‘‘(ii) Not later than 24 months after the 

12 date of enactment of this subparagraph, the 

13 Commission shall complete the rulemaking initi14 ated under clause (i). 

15 ‘‘(iii) Not later than 90 days after issuance 

16 of the final rule as provided in this subpara17 graph, the Secretary shall issue calculation 

18 methods required to effectuate the labeling re19 quirements specified in subsection (c)(1)(C) of 

20 this section.’’. 

21 (2) Section 324(c)(1) of the Energy Policy and 

22 Conservation Act (42 U.S.C. 6294(c)(1)) is amend23 ed— 

24 (A) by striking ‘‘and’’ at the end of sub25 paragraph (A); 


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1 (B) by striking the period at the end of 

2 subparagraph (B); and 

3 (C) by adding at the end the following new 

4 subparagraphs: 

5 ‘‘(C) for products or groups of products 

6 providing a comparable function (including the 

7 group of products comprising the heating func8 tion of heat pumps and furnaces) among cov9 ered products listed in paragraphs (3), (4), (5), 

10 (8), (9), (10), and (11) of section 322(a) of this 

11 part, and others designated by the Secretary, 

12 the estimated total annual atmospheric carbon 

13 dioxide emissions (or their equivalent in other 

14 greenhouse gases) associated with, or caused 

15 by, the product, calculated utilizing— 

16 ‘‘(i) national average energy use for 

17 the product including energy consumed at 

18 the point of end use based on test proce19 dures developed under section 323 of this 

20 part; 

21 ‘‘(ii) national average energy con22 sumed or lost in the production, genera23 tion, transportation, storage, and distribu24 tion of energy to the point of end use; and 


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1 ‘‘(iii) any direct emissions of green2 house gases from the product during nor3 mal use; 

4 ‘‘(D) in determining the national average 

5 energy consumption and total annual atmos6 pheric carbon dioxide emissions, the Secretary 

7 shall utilize Federal Government sources, in8 cluding the Energy Information Administration 

9 Annual Energy Review, the Environmental Pro10 tection Agency eGRID data base, Environ11 mental Protection Agency AP–42 Emission 

12 Factors as amended, and other sources deter13 mined to be appropriate by the Secretary; and 

14 ‘‘(E) information presenting, for each 

15 product (or group of products providing the 

16 comparable function) identified in section 

17 (c)(1)(C) of this section, the estimated annual 

18 carbon dioxide emissions calculated within the 

19 range of emissions calculated for all models of 

20 the product or group according to its function, 

21 including those models consuming fuels and 

22 those models not consuming fuels.’’. 

23 (i) PERMITTING STATES TO SEEK INJUNCTIVE EN24 FORCEMENT.—Section 334 of the Energy Policy and ConVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00308 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 servation Act (42 U.S.C. 6304(a)) is amended to read as 

2 follows: 

3 ‘‘SEC. 334. JURISDICTION AND VENUE. 

4 ‘‘(a) JURISDICTION.—The United States district 

5 courts shall have jurisdiction to restrain— 

6 ‘‘(1) any violation of section 332; and 

7 ‘‘(2) any person from distributing in commerce 

8 any covered product which does not comply with an 

9 applicable rule under section 324 or 325. 

10 ‘‘(b) AUTHORITY.—Any action referred to in sub11 section (a) shall be brought by the Commission or by the 

12 attorney general of a State in the name of the State, ex13 cept that— 

14 ‘‘(1) any such action to restrain any violation of 

15 section 332(a)(3) which relates to requirements pre16 scribed by the Secretary or any violation of section 

17 332(a)(4) which relates to request of the Secretary 

18 under section 326(b)(2) shall be brought by the Sec19 retary; and 

20 ‘‘(2) any violation of section 332(a)(5) or 

21 332(a)(7) shall be brought by the Secretary or by 

22 the attorney general of a State in the name of the 

23 State. 

24 ‘‘(c) VENUE AND SERVICE OF PROCESS.—Any such 

25 action may be brought in the United States district court 


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1 for a district wherein any act, omission, or transaction 

2 constituting the violation occurred, or in such court of the 

3 district wherein the defendant is found or transacts busi4 ness. In any action under this section, process may be 

5 served on a defendant in any other district in which the 

6 defendant resides or may be found.’’. 

7 (j) TREATMENT OF APPLIANCES WITHIN BUILDING

8 CODES.—(1) Section 327(f)(3) of the Energy Policy and 

9 Conservation Act (42 U.S.C. 6297(f)(3)) is amended by 

10 striking subparagraphs (B) through (E) and inserting the 

11 following: 

12 ‘‘(B) The code meets at least one of the 

13 following requirements: 

14 ‘‘(i) The code does not require that 

15 the covered product have an energy effi16 ciency exceeding— 

17 ‘‘(I) the applicable energy con18 servation standard established in or 

19 prescribed under section 325; 

20 ‘‘(II) the level required by a reg21 ulation of that State for which the 

22 Secretary has issued a rule granting a 

23 waiver under subsection (d) of this 

24 section; or 


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1 ‘‘(III) the required level estab2 lished in the International Energy 

3 Conservation Code or in a standard of 

4 the American Society of Heating, Re5 frigerating and Air-Conditioning En6 gineers, or by the Secretary pursuant 

7 to section 304 of the Energy Con8 servation and Production Act. 

9 ‘‘(ii) If the code uses one or more 

10 baseline building designs against which all 

11 submitted building designs are to be evalu12 ated and such baseline building designs 

13 contain a covered product subject to an en14 ergy conservation standard established in 

15 or prescribed under section 325, the base16 line building designs are based on an effi17 ciency level for such covered product which 

18 meets but does not exceed one of the levels 

19 specified in clause (i). 

20 ‘‘(iii) If the code sets forth one or 

21 more optional combinations of items which 

22 meet the energy consumption or conserva23 tion objective, in at least one combination 

24 that the State has found to be reasonably 

25 achievable using commercially available 


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1 technologies the efficiency of the covered 

2 product meets but does not exceed one of 

3 the levels specified in clause (i). 

4 ‘‘(C) The credit to the energy consumption 

5 or conservation objective allowed by the code for 

6 installing covered products having energy effi7 ciencies exceeding one of the levels specified in 

8 subparagraph (B)(i) is on a one-for-one equiva9 lent energy use or equivalent energy cost basis, 

10 taking into account the typical lifetime of the 

11 product. 

12 ‘‘(D) The energy consumption or conserva13 tion objective is specified in terms of an esti14 mated total consumption of energy (which may 

15 be calculated from energy loss- or gain-based 

16 codes) utilizing an equivalent amount of energy 

17 (which may be specified in units of energy or its 

18 equivalent cost) and equivalent lifetimes. 

19 ‘‘(E) The estimated energy use of any cov20 ered product permitted or required in the code, 

21 or used in calculating the objective, is deter22 mined using the applicable test procedures pre23 scribed under section 323, except that the State 

24 may permit the estimated energy use calcula25 tion to be adjusted to reflect the conditions of 


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1 the areas where the code is being applied if 

2 such adjustment is based on the use of the ap3 plicable test procedures prescribed under sec4 tion 323 or other technically accurate docu5 mented procedure.’’. 

6 (2) Section 327(f)(4)(B) of the Energy Policy 

7 and Conservation Act (42 U.S.C. 6297(f)(4)(B)) is 

8 amended to read as follows: 

9 ‘‘(B) If a building code requires the instal10 lation of covered products with efficiencies ex11 ceeding the levels and requirements specified in 

12 paragraph (3)(B), such requirement of the 

13 building code shall not be applicable unless the 

14 Secretary has granted a waiver for such re15 quirement under subsection (d) of this sec16 tion.’’. 

17 SEC. 214. BEST-IN-CLASS APPLIANCES DEPLOYMENT PRO18 GRAM. 

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

20 date of enactment of this Act, the Secretary of Energy, 

21 in consultation with the Administrator, shall establish a 

22 program to be known as the ‘‘Best-in-Class Appliances 

23 Deployment Program’’ to— 

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1 class high-efficiency household appliance models, 

2 high-efficiency installed building equipment, and 

3 high-efficiency consumer electronics, with the goal of 

4 reducing life-cycle costs for consumers, encouraging 

5 innovation, and maximizing energy savings and pub6 lic benefit; 

7 (2) provide bounties under subsection (d) to re8 tailers for the replacement, retirement, and recycling 

9 of old, inefficient, and environmentally harmful 

10 products; and 

11 (3) provide premium awards under subsection 

12 (e) to manufacturers for developing and producing 

13 new Superefficient Best-in-Class Products. 

14 (b) DESIGNATION OF BEST-IN-CLASS PRODUCT

15 MODELS.— 

16 (1) IN GENERAL.—The Secretary of Energy 

17 shall designate product models of appliances, equip18 ment, or electronics as Best-in-Class Product mod19 els. The Secretary shall publicly announce the Best20 in-Class Product models designated under this sub21 section. The Secretary shall define product classes 

22 broadly and, except as provided in paragraph (2), 

23 shall designate as Best-in-Class Product models no 

24 more than the most efficient 10 percent of the com25 mercially available product models in a class that 


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1 demonstrate, as a group, a distinctly greater energy 

2 efficiency than the average energy efficiency of that 

3 class of appliances, equipment, or electronics. In des4 ignating models, the Secretary shall— 

5 (A) identify commercially available models 

6 in the relevant class of products; 

7 (B) identify the subgroup of those models 

8 that share the distinctly higher energy-effi9 ciency characteristics that warrant designation 

10 as best-in-class; and 

11 (C) add other models in that class to the 

12 list of Best-in-Class Product models as they 

13 demonstrate their ability to meet the higher-ef14 ficiency characteristics on which the designation 

15 was made. 

16 (2) PERCENTAGE EXCEPTION.—If there are 

17 fewer than 10 product models in a class of products, 

18 the Secretary may designate one or more of such 

19 models as Best-in-Class Products. 

20 (3) REVIEW OF BEST-IN-CLASS STANDARDS.— 

21 The Secretary shall review annually the product-spe22 cific criteria for designating, and the product models 

23 that qualify as, Best-in-Class Products and, after 

24 notice and a 30-day comment period, make upwards 

25 adjustments in the efficiency criteria as necessary to 


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1 maintain an appropriate ratio of such product mod2 els to the total number of product models in the 

3 product class. 

4 (c) BONUSES FOR SALES OF BEST-IN-CLASS PROD5 UCTS.— 

6 (1) IN GENERAL.—The Secretary of Energy 

7 shall make bonus payments to retailers or, as pro8 vided in paragraph (5)(B), distributors for the sale 

9 of Best-in-Class Products. 

10 (2) BONUS PROGRAM.—The Secretary shall— 

11 (A) publicly announce the availability and 

12 amount of the bonus to be paid for each sale 

13 of a Best-in-Class Product of a model des14 ignated under subsection (b); and 

15 (B) make bonus payments in at least that 

16 amount for each Best-in-Class Product of that 

17 model sold during the 3-year period beginning 

18 on the date the model is designated under sub19 section (b). 

20 (3) UPGRADE OF BEST-IN-CLASS PRODUCT ELI21 GIBILITY.—In conducting a review under subsection 

22 (b)(3), the Secretary shall— 

23 (A) consider designating as a Best-in-Class 

24 Product model a Superefficient Best-in-Class 


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1 Product model that has been designated pursu2 ant to subsection (e); 

3 (B) announce any change in the bonus 

4 payment as necessary to increase the market 

5 share of Best-in-Class Product models; 

6 (C) list models that will be eligible for bo7 nuses in the new amount; and 

8 (D) continue paying bonus payments at 

9 the original level, for the sale of any models 

10 that previously qualified as Best-in-Class Prod11 ucts but do not qualify at the new level, for the 

12 remainder of the 3-year period announced with 

13 the original designation. 

14 (4) SIZE OF INDIVIDUAL BONUS PAYMENTS.— 

15 (A) The size of each bonus payment under this sub16 section shall be the product of— 

17 (i) an amount determined by the Sec18 retary; and 

19 (ii) the difference in energy consump20 tion between the Best-in-Class Product 

21 and the average product in the product 

22 class. 

23 (B) The Secretary shall determine the amount 

24 under subparagraph (A)(i) for each product type, in 

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1 gram administrators as well as the Administrator, 

2 based on estimates of the amount of bonus payment 

3 that would provide significant incentive to increase 

4 the market share of Best-in-Class Products. 

5 (5) ELIGIBLE BONUS RECIPIENT.—(A) The 

6 Secretary shall ensure that not more than 1 bonus 

7 payment is provided under this subsection for each 

8 Best-in-Class Product. 

9 (B) The Secretary may make distributors eligi10 ble to receive bonus payments under this subsection 

11 for sales that are not to the final end-user, to the 

12 extent that the Secretary determines that for a par13 ticular product category distributors are well situ14 ated to increase sales of Best-in-Class Products. 

15 (d) BOUNTIES FOR REPLACEMENT, RETIREMENT, 

16 AND RECYCLING OF EXISTING LOW-EFFICIENCY PROD17 UCTS.— 

18 (1) IN GENERAL.—The Secretary of Energy 

19 shall make bounty payments to retailers for the re20 placement, retirement, and recycling of older oper21 ating low-efficiency products that might otherwise 

22 continue in operation. 

23 (2) BOUNTIES.—Bounties shall be payable upon 

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1 uct was accompanied by the replacement, retirement, 

2 and recycling of— 

3 (A) an inefficient but still-functioning 

4 product; or 

5 (B) a nonfunctioning product containing a 

6 refrigerant, 

7 by the consumer to whom the Best-in-Class Product 

8 was sold. 

9 (3) AMOUNT.— 

10 (A) FUNCTIONING PRODUCTS.—The boun11 ty payment payable under this subsection for a 

12 product described in paragraph (2)(A) shall be 

13 based on the difference between the estimated 

14 energy use of the product replaced and the en15 ergy use of an average new product in the prod16 uct class, over the estimated remaining lifetime 

17 of the product that was replaced. 

18 (B) NONFUNCTIONING PRODUCTS CON19 TAINING REFRIGERANTS.—The bounty payment 

20 payable under this subsection for a product de21 scribed in paragraph (2)(B) shall be in the 

22 amount that the Secretary of Energy, in con23 sultation with the Administrator, determines is 

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1 ucts, up to the amount of bounty for a com2 parable product described in paragraph (2)(A). 

3 (4) RETIREMENT.—The Secretary shall ensure 

4 that no product for which a bounty is paid under 

5 this subsection is returned to active service, but that 

6 it is instead destroyed, and recycled to the extent 

7 feasible. 

8 (5) RECYCLING APPLIANCES CONTAINING RE9 FRIGERANTS.—The Secretary shall ensure that 

10 standards for environmentally responsible methods 

11 of recycling established by the Administrator pursu12 ant to section 608 of the Clean Air Act are employed 

13 before a bounty payment is made under this sub14 section for a product containing a refrigerant. Noth15 ing in this section shall be interpreted to alter the 

16 requirements of section 608 of the Clean Air Act or 

17 to relieve any person from complying with those re18 quirements. 

19 (e) PREMIUM AWARDS FOR DEVELOPMENT AND

20 PRODUCTION OF SUPEREFFICIENT BEST-IN-CLASS PROD21 UCTS.— 

22 (1) IN GENERAL.—(A) The Secretary of Energy 

23 shall provide premium awards to manufacturers for 

24 the development and production of Superefficient 

25 Best-in-Class Products. The Secretary shall set and 


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1 periodically revise standards for eligibility of prod2 ucts for designation as a Superefficient Best-in3 Class Product. 

4 (B) The Secretary may establish a standard for 

5 a Superefficient Best-in-Class Product even if no 

6 product meeting that standard exists, if the Sec7 retary has reasonable grounds to conclude that a 

8 mass-producible product could be made to meet that 

9 standard. 

10 (C) The Secretary may also establish a Super11 efficient Best-in-Class Product standard that is met 

12 by one or more existing Best-in-Class Product mod13 els, if those product models have distinct energy effi14 ciency attributes and performance characteristics 

15 that make them significantly better than other prod16 uct models qualifying as best-in-class. The Secretary 

17 may not designate as Superefficient Best-in-Class 

18 Products under this subparagraph models that rep19 resent more than 10 percent of the currently quali20 fying Best-in-Class Product models. 

21 (2) PREMIUM AWARDS.—(A) The premium 

22 award payment provided to a manufacturer under 

23 this subsection shall be in addition to any bonus 

24 payments made under subsection (c). 


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1 (B) The amount of the premium award paid 

2 per unit of Superefficient Best-in-Class Products 

3 sold to retailers or distributors shall be the product 

4 of— 

5 (i) an amount determined by the Sec6 retary; and 

7 (ii) the difference in energy consumption 

8 between the Superefficient Best-in-Class Prod9 uct and the average product in the product 

10 class. 

11 (C) The Secretary shall determine the amount 

12 under subparagraph (B)(i) for each product type, in 

13 consultation with State and utility efficiency pro14 gram administrators as well as the Administrator, 

15 based on consideration of the present value to the 

16 Nation of the energy (and water or other resources 

17 or inputs) saved over the useful life of the product. 

18 The Secretary may also take into consideration the 

19 methods used to increase sales of qualifying prod20 ucts in determining such amount. 

21 (D) The Secretary may adjust the value de22 scribed in subparagraph (C) upward or downward as 

23 appropriate, including based on the effect of the pre24 mium awards on the sales of products in different 


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1 classes that may be affected by the program under 

2 this subsection. 

3 (E) Premium award payments shall be applied 

4 to sales of any Superefficient Best-in-Class Product 

5 for the first 3 years after designation as a Supereffi6 cient Best-in-Class Product. 

7 (3) COORDINATION OF INCENTIVES.—No prod8 uct for which Federal tax credit is received under 

9 section 45M of the Internal Revenue Code of 1986 

10 shall be eligible to receive premium award payments 

11 pursuant to this subsection. 

12 (f) REPORTING.—The Secretary of Energy shall re13 quire, as a condition of receiving a bonus, bounty, or pre14 mium award under this section, that a report containing 

15 the following documentation be provided: 

16 (1) For retailers and distributors, the number 

17 of units sold within each product type, and model18 specific wholesale purchase prices and retail sale 

19 prices, on a monthly basis. 

20 (2) For manufacturers, model-specific energy 

21 consumption data. 

22 (3) For manufacturers, on an immediate basis, 

23 information concerning any product design or func24 tion changes that affect the energy consumption of 

25 the unit. 


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1 (4) The methods used to increase the sales of 

2 qualifying products. 

3 (g) MONITORING AND VERIFICATION PROTOCOLS.— 

4 The Secretary of Energy shall establish monitoring and 

5 verification protocols for energy consumption tests for 

6 each product model and for sales of energy-efficient mod7 els. 

8 (h) DISCLOSURE.—The Secretary of Energy may re9 quire that retailers and distributors disclose publicly and 

10 to consumers their participation in the program under this 

11 section. 

12 (i) COST-EFFECTIVENESS REQUIREMENT.— 

13 (1) REQUIREMENT.—The Secretary of Energy 

14 shall make cost-effectiveness a top priority in design15 ing the program under, and administering, this sec16 tion, except that the cost-effectiveness of providing 

17 premium awards to manufacturers under subsection 

18 (e), in aggregate, may be lower by this measure than 

19 that of the bonuses and bounties to retailers and 

20 distributors under subsections (c) and (d). 

21 (2) DEFINITIONS.—In this subsection: 

22 (A) COST-EFFECTIVENESS.—The term 

23 ‘‘cost-effectiveness’’ means a measure of aggre24 gate savings in the cost of energy over the life25 time of a product in relation to the cost to the 


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1 Secretary of the bonuses, bounties, and pre2 mium awards provided under this section for a 

3 product. 

4 (B) SAVINGS.—The term ‘‘savings’’ means 

5 the cumulative megawatt-hours of electricity or 

6 million British thermal units of other fuels 

7 saved by a product during the projected useful 

8 life of the product, in comparison to projected 

9 energy consumption of the average product in 

10 the same class, taking into consideration the 

11 impact of any documented measures to replace, 

12 retire, and recycle low-efficiency products at the 

13 time of purchase of highly efficient substitutes. 

14 (j) DEFINITIONS.—In this section— 

15 (1) the term ‘‘distributor’’ mean an individual, 

16 organization, or company that sells products in mul17 tiple lots and not directly to end-users; 

18 (2) the term ‘‘retailer’’ means an individual, or19 ganization, or company that sells products directly 

20 to end-users; and 

21 (3) the term ‘‘Superefficient Best-in-Class 

22 Product’’ means a product that— 

23 (A) can be mass produced; and 

24 (B) achieves the highest level of efficiency 

25 that the Secretary of Energy finds can, given 


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1 the current state of technology, be produced 

2 and sold commercially to mass-market con3 sumers. 

4 (k) AUTHORIZATION OF APPROPRIATIONS.—There 

5 are authorized to be appropriated $300,000,000 for each 

6 of the fiscal years 2010 through 2014 to the Secretary 

7 of Energy for purposes of this section, of which not more 

8 than 10 percent for any fiscal year may be expended on 

9 program administration. 

10 SEC. 215. PURPOSE OF ENERGY STAR. 

11 Section 324A of the Energy Policy and Conservation 

12 Act (42 U.S.C. 6294a) is amended— 

13 (1) by redesignating subsections (b) through (d) 

14 as subsections (c) through (e), respectively; and 

15 (2) by inserting after subsection (a) the fol16 lowing new subsection: 

17 ‘‘(b) PURPOSE.—The purpose of the Energy Star 

18 program for products is to assist consumers in selecting 

19 products for purchase that have demonstrated high energy 

20 efficiency and that are cost-effective from the consumer’s 

21 perspective, ensuring that any incremental cost attrib22 utable to the energy-efficient features of such products will 

23 be more than recovered in the value of energy savings the 

24 products will make possible within several years of pur25 chase, typically within 3 years but no more than 5 years.’’. 


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1 Subtitle C—Transportation 

2 Efficiency 

3 SEC. 221. EMISSIONS STANDARDS. 

4 (a) MOTOR VEHICLE STANDARDS.—The President 

5 shall use statutory authorities in effect on the day before 

6 the date of enactment of this section to set motor vehicle 

7 standards that— 

8 (1) are achievable by the automobile manufac9 turing companies; 

10 (2) to the extent practicable, harmonize stand11 ards that may be set by the National Highway Traf12 fic Safety Administration pursuant to the authority 

13 in chapter 329 of title 49, United States Code, 

14 standards that may be set by the Administrator of 

15 the Environmental Protection Agency pursuant to 

16 the authority in the Clean Air Act, and standards 

17 that have or may be set by the State of California; 

18 (3) achieve at least as much emissions reduc19 tions as would be achieved by implementation of the 

20 California law AB 1493 if enforced in the State of 

21 California and the other States that have adopted 

22 the standard; and 

23 (4) do not preempt California’s legal authority 

24 to adopt and enforce its own mobile source emissions 

25 standards. 


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1 (b) GREENHOUSE GAS EMISSION STANDARDS FOR

2 MOBILE SOURCES.—Title VIII of the Clean Air Act, as 

3 added by section 331 of this Act, is amended by inserting 

4 after part A the following new part: 

5 ‘‘PART B—MOBILE SOURCES 

6 ‘‘SEC. 821. GREENHOUSE GAS EMISSION STANDARDS FOR 

7 MOBILE SOURCES. 

8 ‘‘(a) MOTOR VEHICLES AND ENGINES.— 

9 ‘‘(1) Pursuant to section 202(a)(1), by Decem10 ber 31, 2010, the Administrator shall promulgate 

11 standards applicable to emissions of greenhouse 

12 gases from new heavy-duty vehicles and engines, ex13 cluding such vehicles covered by the Tier II stand14 ards (as established by the Administrator as of the 

15 date of enactment of this section). The Adminis16 trator may revise these standards from time to time. 

17 ‘‘(2) Regulations issued under section 202(a)(1) 

18 applicable to emissions of greenhouse gases from 

19 new heavy-duty vehicles and engines, excluding such 

20 vehicles covered by the Tier II standards (as estab21 lished by the Administrator as of the date of enact22 ment of this section), shall contain standards that 

23 achieve the greatest degree of emissions reduction 

24 achievable based on the application of technology 

25 which the Administrator determines will be available 


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1 at the time such standards take effect, taking into 

2 consideration cost, energy, and safety factors associ3 ated with the application of such technology. Any 

4 such regulations shall take effect after such period 

5 as the Administrator finds necessary to permit the 

6 development and application of the requisite tech7 nology. 

8 ‘‘(b) NONROAD VEHICLES AND ENGINES.— 

9 ‘‘(1) Pursuant to section 213(a)(4), the Admin10 istrator shall promulgate standards applicable to 

11 emissions of greenhouse gases from new marine ves12 sels and locomotives, and from new engines used in 

13 marine vessels and locomotives, by December 31, 

14 2012. The Administrator shall also promulgate 

15 standards applicable to emissions of greenhouse 

16 gases for such other classes and categories of 

17 nonroad vehicles and engines as the Administrator 

18 determines appropriate and in the timeframe the 

19 Administrator determines appropriate. The Adminis20 trator shall base such determination, among other 

21 factors, on the relative contribution of greenhouse 

22 gas emissions, and the costs for achieving reduc23 tions, from such classes or categories of new 

24 nonroad engines and vehicles. The Administrator 

25 may revise these standards from time to time. 


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1 ‘‘(2) Standards under section 213(a)(4) applica2 ble to emissions of greenhouse gases from new ma3 rine vessels and locomotives, and from new engines 

4 used in marine vessels and locomotives, shall achieve 

5 the greatest degree of emissions reduction achievable 

6 based on the application of technology which the Ad7 ministrator determines will be available at the time 

8 such standards take effect, taking into consideration 

9 cost, energy, and safety factors associated with the 

10 application of such technology. Any such regulations 

11 shall take effect after such period as the Adminis12 trator finds necessary to permit the development and 

13 application of the requisite technology. 

14 ‘‘(3) For purposes of this section and standards 

15 under section 213(a)(4) applicable to emissions of 

16 greenhouse gases, the term ‘nonroad engines and ve17 hicles’ shall include non-internal combustion engines 

18 and the vehicles these engines power (such as elec19 tric engines and electric vehicles), for those non-in20 ternal combustion engines and vehicles which would 

21 be in the same category and have the same uses as 

22 nonroad engines and vehicles that are powered by in23 ternal 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 shall also promulgate standards appli7 cable to emissions of greenhouse gases from other 

8 classes and categories of aircraft and aircraft en9 gines for such classes and categories as the Adminis10 trator determines appropriate and in the timeframe 

11 the Administrator determines appropriate. The Ad12 ministrator may revise these standards from time to 

13 time. 

14 ‘‘(2) Standards under section 231(a) applicable 

15 to emissions of greenhouse gases from new aircraft 

16 and new engines used in aircraft, and any later revi17 sions or additional standards, shall achieve the 

18 greatest degree of emissions reduction achievable 

19 based on the application of technology which the Ad20 ministrator determines will be available at the time 

21 such standards take effect, taking into consideration 

22 cost, energy, and safety factors associated with the 

23 application of such technology. Any such standards 

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1 trator finds necessary to permit the development and 

2 application 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 231(a), the Administrator 

7 may establish provisions for averaging, banking, and trad8 ing of greenhouse gas emissions credits within or across 

9 classes or categories of motor vehicles and motor vehicle 

10 engines, nonroad vehicles and engines (including marine 

11 vessels), and aircraft and aircraft engines, to the extent 

12 the Administrator determines appropriate and considering 

13 the factors appropriate in setting standards under those 

14 sections. Such provisions may include reasonable and ap15 propriate provisions concerning generation, banking, trad16 ing, 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 transpor20 tation sector, including transportation fuels, for the years 

21 2030 and 2050, based on the standards adopted under 

22 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 

13 emissions reductions; and 

14 ‘‘(2) as part of each transportation plan or 

15 transportation improvement program developed 

16 under title 23 or title 49, United States Code, en17 sure that a plan to achieve such goals, or an up18 dated version of such a plan, is submitted to the Ad19 ministrator and to the Secretary of Transportation 

20 (in this section referred to as the ‘Secretary’) by 

21 each metropolitan planning organization in the State 

22 for an area with a population exceeding 200,000. 

23 ‘‘(b) MODELS AND METHODOLOGIES.— 

24 ‘‘(1) IN GENERAL.—The Administrator shall 

25 promulgate regulations to establish standards for 

26 use in developing goals, plans, and strategies under 


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1 this section and for monitoring progress toward such 

2 goals. Such standards shall include— 

3 ‘‘(A) data collection techniques for assess4 ing State and regional transportation-related 

5 greenhouse gas emissions; 

6 ‘‘(B) methodologies for determining trans7 portation-related greenhouse gas emissions 

8 baselines; 

9 ‘‘(C) models and methodologies for sce10 nario analysis; and 

11 ‘‘(D) models and methodologies for esti12 mating transportation-related greenhouse gas 

13 emissions reductions from the strategies consid14 ered under this section. 

15 Such regulations may approve or improve existing 

16 models and methodologies. 

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

18 ‘‘(A) publish proposed regulations under 

19 paragraph (1) not later than 1 year after the 

20 date of enactment of this section; and 

21 ‘‘(B) promulgate final regulations under 

22 paragraph (1) not later than 2 years after such 

23 date of enactment. 

24 ‘‘(3) ASSESSMENT.—At least every 6 years 

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1 graph (1), the Administrator, in coordination with 

2 the Secretary, shall assess current and projected 

3 progress in reducing transportation-related green4 house gas emissions. The assessment shall examine 

5 the contributions to emissions reductions attrib6 utable to improvements in vehicle efficiency, green7 house gas performance of transportation fuels, and 

8 increased efficiency in utilizing transportation sys9 tems. 

10 ‘‘(c) GREENHOUSE GAS REDUCTION GOALS.— 

11 ‘‘(1) CONSULTATION.—Each State shall develop 

12 the goals referred to in subsection (a)(1)— 

13 ‘‘(A) in concurrence with State agencies re14 sponsible for air quality and transportation; 

15 ‘‘(B) in consultation with each metropoli16 tan planning organization for an area in the 

17 State with a population exceeding 200,000 and 

18 applicable local air quality and transportation 

19 agencies; and 

20 ‘‘(C) with public involvement, including 

21 public comment periods and meetings. 

22 ‘‘(2) PERIOD.—The goals referred to in sub23 section (a)(1) shall be for 4-, 10-, and 20-year peri24 ods. 


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1 ‘‘(3) TARGETS; DESIGNATED YEAR.—The goals 

2 referred to in subsection (a)(1) shall establish tar3 gets to reduce transportation-related greenhouse gas 

4 emissions in the covered area. The targets shall be 

5 designed to ensure that the levels of such emissions 

6 stabilize and decrease after a designated year. The 

7 State shall consider designating 2010 as such des8 ignated year. 

9 ‘‘(4) COVERED AREA.—The goals referred to in 

10 subsection (a)(1)— 

11 ‘‘(A) shall be established on a statewide 

12 basis; 

13 ‘‘(B) shall be established for each metro14 politan planning organization in the State for 

15 an area with a population exceeding 200,000; 

16 and 

17 ‘‘(C) may be established on a voluntary 

18 basis, in accordance with the provisions of this 

19 section, for any metropolitan planning organiza20 tion not described in subparagraph (B). 

21 ‘‘(5) REVISED GOALS.—Every 4 years, each 

22 State shall update and revise, as appropriate, the 

23 goals referred to in subsection (a)(1). 

24 ‘‘(d) PLANNING.—A plan submitted under subsection 

25 (a)(2) shall— 


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1 ‘‘(1) be based upon the models and methodolo2 gies established by the Administrator under sub3 section (b); 

4 ‘‘(2) use transportation and land use scenario 

5 analysis to address transportation-related green6 house gas emissions and economic development im7 pacts; and 

8 ‘‘(3) be developed— 

9 ‘‘(A) with public involvement, including 

10 public comment periods and meetings which 

11 provide opportunities for comment from a vari12 ety of stakeholders based on age, race, income, 

13 and disability; 

14 ‘‘(B) with regional coordination, including 

15 with respect to— 

16 ‘‘(i) metropolitan planning organiza17 tions; 

18 ‘‘(ii) the localities comprising the met19 ropolitan planning organization; 

20 ‘‘(iii) the State in which the metro21 politan planning organization is located; 

22 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 

7 State or metropolitan planning organization, as applicable, 

8 shall consider transportation and land use planning strate9 gies to reduce transportation-related greenhouse gas emis10 sions, including the following: 

11 ‘‘(1) Efforts to increase or improve public 

12 transportation, including— 

13 ‘‘(A) new public transportation systems, 

14 including new commuter rail systems; 

15 ‘‘(B) expansion of existing public transpor16 tation systems; 

17 ‘‘(C) employer-based subsidies; 

18 ‘‘(D) cleaner locomotive technologies; and 

19 ‘‘(E) quality of service improvements, in20 cluding improved frequency of service. 

21 ‘‘(2) Updates to zoning and other land use reg22 ulations and plans to support development that— 

23 ‘‘(A) coordinates transportation and land 

24 use planning; 


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1 ‘‘(B) focuses future growth close to exist2 ing and planned job centers and public facili3 ties; 

4 ‘‘(C) uses existing infrastructure; 

5 ‘‘(D) promotes walking, bicycling, and pub6 lic transportation use; and 

7 ‘‘(E) mixes land uses such as housing, re8 tail, and schools. 

9 ‘‘(3) Implementation of a policy (referred to as 

10 a ‘complete streets policy’) that— 

11 ‘‘(A) ensures adequate accommodation of 

12 all users of transportation systems, including 

13 pedestrians, bicyclists, public transportation 

14 users, motorists, children, the elderly, and indi15 viduals with disabilities; and 

16 ‘‘(B) adequately addresses the safety and 

17 convenience of all users of the transportation 

18 system. 

19 ‘‘(4) Construction of bicycle and pedestrian in20 frastructure facilities, including facilities that im21 prove the connections with networks that provide ac22 cess to human services, employment, schools, and re23 tail. 

24 ‘‘(5) Projects to promote telecommuting, flexi25 ble work schedules, or satellite work centers. 


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1 ‘‘(6) Pricing measures, including tolling, con2 gestion pricing, and pay-as-you-drive insurance. 

3 ‘‘(7) Intermodal freight system strategies, in4 cluding enhanced rail services, short sea shipping, 

5 and other strategies. 

6 ‘‘(8) Parking policies. 

7 ‘‘(9) Intercity rail service, including high speed 

8 rail. 

9 ‘‘(10) Travel demand management projects. 

10 ‘‘(11) Restriction of the use of certain roads, or 

11 lanes, by vehicles other than passenger buses and 

12 high-occupancy vehicles. 

13 ‘‘(12) Reduction of vehicle idling, including 

14 idling associated with freight management, construc15 tion, transportation, and commuter operations. 

16 ‘‘(13) Policies to encourage the use of retrofit 

17 technologies and early replacement of vehicles, en18 gines and equipment to reduce transportation-re19 lated greenhouse gas emissions from existing mobile 

20 sources. 

21 ‘‘(14) Other projects that the Administrator 

22 finds reduce transportation-related greenhouse gas 

23 emissions. 


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1 ‘‘(f) PUBLIC AVAILABILITY.—The Administrator 

2 shall publish, including by posting on the Environmental 

3 Protection 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 

21 that a State has failed to submit goals under subsection 

22 (a)(1), has failed to ensure the submission of a plan under 

23 subsection (a)(2), or has failed to submit a revised plan 

24 under subsection (g), for any area in the State (irrespec25 tive of whether the area is a nonattainment area), the AdVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00341 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 ministrator shall impose a prohibition in accordance with 

2 section 179(b)(1) applicable to the area within 2 years of 

3 such a finding. The Administrator may not impose a pro4 hibition under the preceding sentence, and no action may 

5 be brought by the Administrator or any other entity alleg6 ing a violation of this section, based on the content or ade7 quacy of a goal or plan submitted under subsection (a)(1) 

8 or (a)(2) or failure to achieve the goal submitted under 

9 subsection (a)(1). 

10 ‘‘(i) COMPETITIVE GRANTS.— 

11 ‘‘(1) GRANTS.—The Administrator, in consulta12 tion with the Secretary, may— 

13 ‘‘(A) award grants to support activities re14 lated to improving data collection, modeling, 

15 and monitoring systems to assess transpor16 tation-related greenhouse gas emissions and the 

17 effects of plans, policies, and strategies ref18 erenced in this section; 

19 ‘‘(B) award grants to States and metro20 politan planning organizations for the develop21 ment of goals and plans to be submitted under 

22 sections (a)(1) or (a)(2); and 

23 ‘‘(C) award grants, on a competitive basis, 

24 to implement plans certified under subsection 

25 (g) or elements thereof, provided that each 


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1 project thus funded includes a measurement 

2 and evaluation component that meets the regu3 lations promulgated under subsection (b). 

4 ‘‘(2) PRIORITY.—In making grants under para5 graph (1)(C), the Administrator shall give priority to 

6 applicants based upon— 

7 ‘‘(A) the amount of total greenhouse gas 

8 emissions to be reduced as a result of imple9 mentation of a certified plan, within the covered 

10 area, as determined by methods established 

11 under subsection (b); 

12 ‘‘(B) the amount of per capita greenhouse 

13 gas emissions to be reduced as a result of im14 plementation of a certified plan, within the cov15 ered area, as determined by methods estab16 lished under subsection (b); 

17 ‘‘(C) the cost effectiveness, in terms of dol18 lars per tons of greenhouse gas reductions, to 

19 be achieved as a result of the implementation of 

20 a certified plan; 

21 ‘‘(D) the potential for both short- and 

22 long-term reductions; and 

23 ‘‘(E) such other factors as the Adminis24 trator determines appropriate. 


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1 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.— 

2 To carry out this subsection, there are authorized to 

3 be 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 

13 services, including access to employment, education, 

14 and health care (especially for elderly and economi15 cally disadvantaged communities), and could affect 

16 rates 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 sec24 tion 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 bene16 fits of technologies, products, fuels, and operational strate17 gies 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 moVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00345 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 bile source sector, including those for passenger 

2 transport and goods movement. 

3 ‘‘(2) Development of qualifying thresholds for 

4 certifying, verifying, or designating energy-efficient, 

5 low-greenhouse gas SmartWay technologies and 

6 strategies for each mode of passenger transportation 

7 and goods movement. 

8 ‘‘(3) Development of partnership and recogni9 tion programs to promote best practices and drive 

10 demand for energy-efficient, low-greenhouse gas 

11 transportation 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 

16 as assistance from loan programs and other Federal 

17 and 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 

25 gas performance of participating freight carriers, inVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00346 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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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 

8 more 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 prod14 ucts and to evaluate the relative impacts from 

15 transporting their goods by different modes and 

16 corporate 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 

25 of 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 

3 under subsection (c)(2) of this section, and other means 

4 of goods transport as necessary, at least every 5 years. 

5 ‘‘(e) ESTABLISHMENT OF FINANCING PROGRAM.— 

6 The Administrator shall establish a SmartWay Financing 

7 Program to competitively award funding to eligible entities 

8 identified by the Administrator in accordance with the 

9 program requirements in subsection (g). 

10 ‘‘(f) PURPOSE.—Under the SmartWay Financing 

11 Program, eligible entities shall— 

12 ‘‘(1) use funds awarded by the Administrator to 

13 provide flexible loan and lease terms that increase 

14 approval rates or lower the costs of loans and leases 

15 in accordance with guidance developed by the Ad16 ministrator; 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 require24 ments, including— 


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1 ‘‘(1) the type of financial mechanism with 

2 which to award funding, in the form of grants or 

3 contracts; 

4 ‘‘(2) the designation of eligible entities to re5 ceive funding, including State, tribal, and local gov6 ernments, regional organizations comprised of gov7 ernmental units, nonprofit organizations, or for-prof8 it companies; 

9 ‘‘(3) criteria for evaluating applications from el10 igible entities, including anticipated— 

11 ‘‘(A) cost-effectiveness of loan or lease pro12 gram on a metric-ton-of-greenhouse gas-saved13 per-dollar basis; 

14 ‘‘(B) ability to promote the loan or lease 

15 program and associated technologies and strate16 gies to the target audience; and 

17 ‘‘(4) reporting requirements for entities that re18 ceive awards, including— 

19 ‘‘(A) actual cost-effectiveness and green20 house gas savings from the loan or lease pro21 gram based on a methodology designated by the 

22 Administrator; 

23 ‘‘(B) the total number of applications and 

24 number of approved applications; and 


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1 ‘‘(C) terms granted to loan and lease re2 cipients compared to prevailing market prac3 tices. 

4 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—Such 

5 sums as necessary are authorized to be appropriated to 

6 the Administrator to carry out this section.’’. 

7 SEC. 224. STATE VEHICLE FLEETS. 

8 Section 507(o) of the Energy Policy Act of 1992 (42 

9 U.S.C. 13257) is amended by adding the following new 

10 paragraph at the end thereof: 

11 ‘‘(3) The Secretary shall revise the rules under this 

12 subsection with respect to the types of alternative fueled 

13 vehicles required for compliance with this subsection to en14 sure those rules are consistent with any guidance issued 

15 pursuant to section 303 of this Act.’’. 

16 Subtitle D—Industrial Energy 

17 Efficiency Programs 

18 SEC. 241. INDUSTRIAL PLANT ENERGY EFFICIENCY STAND19 ARDS. 

20 The Secretary of Energy shall continue to support 

21 the development of the American National Standards In22 stitute (ANSI) voluntary industrial plant energy efficiency 

23 certification program, pending International Standards 

24 Organization (ISO) consensus standard 50001, and other 

25 related ANSI/ISO standards. In addition, the Department 


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1 shall undertake complementary activities through the De2 partment of Energy’s Industry Technologies Program that 

3 support the voluntary implementation of such standards 

4 by manufacturing firms. There are authorized to be appro5 priated to the Secretary such sums as are necessary to 

6 carry out these activities. The Secretary shall report to 

7 Congress on the status of standards development and 

8 plans for further standards development pursuant to this 

9 Section by not later than 18 months after the date of en10 actment of this Act, and shall prepare a second such re11 port 18 months thereafter. 

12 SEC. 242. ELECTRIC AND THERMAL WASTE ENERGY RECOV13 ERY AWARD PROGRAM. 

14 (a) ELECTRIC AND THERMAL WASTE ENERGY RE15 COVERY AWARDS.—The Secretary of Energy shall estab16 lish a program to make monetary awards to the owners 

17 and operators of new and existing electric energy genera18 tion facilities or thermal energy production facilities using 

19 fossil or nuclear fuel, to encourage them to use innovative 

20 means of recovering any thermal energy that is a poten21 tially useful byproduct of electric power generation or 

22 other processes to— 

23 (1) generate additional electric energy; or 

24 (2) make sales of thermal energy not used for 

25 electric generation, in the form of steam, hot water, 


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1 chilled water, or desiccant regeneration, or for other 

2 commercially valid purposes. 

3 (b) AMOUNT OF AWARDS.— 

4 (1) ELIGIBILITY.—Awards shall be made under 

5 subsection (a) only for the use of innovative means 

6 that achieve net energy efficiency at the facility con7 cerned significantly greater than the current stand8 ard technology in use at similar facilities. 

9 (2) AMOUNT.—The amount of an award made 

10 under subsection (a) shall equal an amount up to 

11 the value of 25 percent of the energy projected to be 

12 recovered or generated during the first 5 years of 

13 operation of the facility using the innovative energy 

14 recovery method, or such lesser amount that the 

15 Secretary determines to be the minimum amount 

16 that can cost-effectively stimulate such innovation. 

17 (3) LIMITATION.—No person may receive an 

18 award under this section if a grant under the waste 

19 energy incentive grant program under section 373 of 

20 the Energy Policy and Conservation Act (42 U.S.C. 

21 6343) is made for the same energy savings resulting 

22 from the same innovative method. 

23 (c) REGULATORY STATUS.—The Secretary of Energy 

24 shall— 


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1 (1) assist State regulatory commissions to iden2 tify and make changes in State regulatory programs 

3 for electric utilities to provide appropriate regulatory 

4 status for thermal energy byproduct businesses of 

5 regulated electric utilities to encourage those utilities 

6 to enter businesses making the sales referred to in 

7 subsection (a)(2); and 

8 (2) encourage self-regulated utilities to enter 

9 businesses making the sales referred to in subsection 

10 (a)(2). 

11 (d) ELIGIBILITY FOR SEED LOANS.—Owners and op12 erators of electric energy generation and thermal energy 

13 production facilities shall be eligible for SEED Fund loans 

14 under subtitle D of title I to provide initial capital for en15 tering into businesses involving sales referred to in sub16 section (a)(2). 

17 (e) AUTHORIZATION OF APPROPRIATIONS.—There 

18 are authorized to be appropriated to the Secretary of En19 ergy such sums as are necessary for the purposes of this 

20 section. 

21 SEC. 243. CLARIFYING ELECTION OF WASTE HEAT RECOV22 ERY FINANCIAL INCENTIVES. 

23 Section 373(e) of the Energy Policy and Conservation 

24 Act (42 U.S.C. 6343(e)) is amended— 


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1 (1) by striking ‘‘that qualifies for’’ and insert2 ing ‘‘who elects to claim’’; and 

3 (2) by inserting ‘‘from that project’’ after ‘‘for 

4 waste heat recovery’’. 

5 Subtitle E—Improvements in En6 ergy Savings Performance Con7 tracting 

8 SEC. 251. ENERGY SAVINGS PERFORMANCE CONTRACTS. 

9 (a) COMPETITION REQUIREMENTS FOR TASK OR DE10 LIVERY ORDERS UNDER ENERGY SAVINGS PERFORM11 ANCE CONTRACTS.— 

12 (1) COMPETITION REQUIREMENTS.—Subsection 

13 (a) of section 801 of the National Energy Conserva14 tion Policy Act (42 U.S.C. 8287(a)) is amended by 

15 adding at the end the following paragraph: 

16 ‘‘(3)(A) The head of a Federal agency may 

17 issue a task or delivery order under an energy sav18 ings performance contract by— 

19 ‘‘(i) notifying all contractors that have re20 ceived an award under such contract that the 

21 agency proposes to discuss energy savings per22 formance services for some or all of its facili23 ties, soliciting an expression of interest in per24 forming site surveys or investigations and feasi25 bility designs and studies and the submission of 


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1 qualifications from such contractors, and in2 cluding in such notice summary information 

3 concerning energy use for any facilities that the 

4 agency has specific interest in including in such 

5 contract; 

6 ‘‘(ii) reviewing all expressions of interest 

7 and qualifications submitted pursuant to the 

8 notice under clause (i); 

9 ‘‘(iii) selecting two or more contractors 

10 (from among those reviewed under clause (ii)) 

11 to conduct discussions concerning the contrac12 tors’ respective qualifications to implement po13 tential energy conservation measures, including 

14 requesting references demonstrating experience 

15 on similar efforts and the resulting energy sav16 ings of such similar efforts; 

17 ‘‘(iv) selecting and authorizing— 

18 ‘‘(I) more than one contractor (from 

19 among those selected under clause (iii)) to 

20 conduct site surveys, investigations, feasi21 bility designs and studies or similar assess22 ments for the energy savings performance 

23 contract services (or for discrete portions 

24 of such services), for the purpose of allow25 ing each such contractor to submit a firm, 


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1 fixed-price proposal to implement specific 

2 energy conservation measures; or 

3 ‘‘(II) one contractor (from among 

4 those selected under clause (iii)) to conduct 

5 a site survey, investigation, a feasibility de6 sign and study or similar for the purpose 

7 of allowing the contractor to submit a 

8 firm, fixed-price proposal to implement 

9 specific energy conservation measures; 

10 ‘‘(v) negotiating a task or delivery order 

11 for energy savings performance contracting 

12 services with the contractor or contractors se13 lected under clause (iv) based on the energy 

14 conservation measures identified.; and 

15 ‘‘(vi) issuing a task or delivery order for 

16 energy savings performance contracting services 

17 to such contractor or contractors. 

18 ‘‘(B) The issuance of a task or delivery order 

19 for energy savings performance contracting services 

20 pursuant to subparagraph (A) is deemed to satisfy 

21 the task and delivery order competition requirements 

22 in section 2304c(d) of title 10, United States Code, 

23 and section 303J(d) of the Federal Property and 

24 Administrative Services Act of 1949 (41 U.S.C. 

25 253j(d)). 


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1 ‘‘(C) The Secretary may issue guidance as nec2 essary to agencies issuing task or delivery orders 

3 pursuant to subparagraph (A).’’. 

4 (2) EFFECTIVE DATE.—The amendment made 

5 by paragraph (1) is inapplicable to task or delivery 

6 orders issued before the date of enactment of this 

7 section. 

8 (b) INCLUSION OF THERMAL RENEWABLE EN9 ERGY.—Section 203 of the Energy Policy Act of 2005 (42 

10 U.S.C. 15852) is amended— 

11 (1) in subsection (a), by striking ‘‘electric’’; and 

12 (2) in subsection (b)(2), by inserting ‘‘or ther13 mal’’ after ‘‘means electric’’. 

14 (c) CREDIT FOR RENEWABLE ENERGY PRODUCED

15 AND USED ON SITE.—Subsection (c) of section 203 of the 

16 Energy Policy Act of 2005 (42 U.S.C. 15852) is amended 

17 to read as follows: 

18 ‘‘(c) CALCULATION.—Renewable energy produced at 

19 a Federal facility, on Federal lands, or on Indian lands 

20 (as defined in title XXVI of the Energy Policy Act of 1992 

21 (25 U.S.C. 3501 et seq.)), shall be calculated separately 

22 from renewable energy consumed at a Federal facility, and 

23 each may be used to comply with the consumption require24 ment under subsection (a).’’. 


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1 (d) FINANCING FLEXIBILITY.—Section 801(a)(2)(F) 

2 of the National Energy Conservation Policy Act (42 

3 U.S.C. 8287(a)(2)(F)), as so redesignated by subsection 

4 (b)(1) of this section, is amended by striking ‘‘In’’ and 

5 inserting ‘‘Notwithstanding any other provision of law, 

6 in’’. 

7 Subtitle F—Public Institutions 

8 SEC. 261. PUBLIC INSTITUTIONS. 

9 Section 399A of the Energy Policy and Conservation 

10 Act (42 U.S.C. 6371h–1) is amended— 

11 (1) in subsection (a)(5), by striking ‘‘or a des12 ignee’’ and inserting ‘‘a not-for-profit hospital or 

13 not-for-profit inpatient health care facility, or a des14 ignated agent’’; 

15 (2) in subsection (c)(1), by striking subpara16 graph (C); 

17 (3) in subsection (f)(3)(A), by striking 

18 ‘‘$1,000,000’’ and inserting ‘‘$2,500,000’’; and 

19 (4) in subsection (i)(1), by striking 

20 ‘‘$250,000,000 for each of fiscal years 2009 through 

21 2013’’ and inserting ‘‘such sums as may be nec22 essary for each of fiscal 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 

3 Security Act of 2007 (42 U.S.C. 17155(b)(3)) is amend4 ed— 

5 (1) by striking ‘‘Indian tribe may use’’ and all 

6 that follows through ‘‘for administrative expenses’’ 

7 and inserting ‘‘Indian tribe may use for administra8 tive expenses’’; 

9 (2) by striking subparagraphs (B) and (C); 

10 (3) by redesignating the remaining clauses (i) 

11 and (ii) as subparagraphs (A) and (B), respectively 

12 and adjusting the margin of those subparagraphs ac13 cordingly; and 

14 (4) by striking the semicolon at the end and in15 serting a period. 

16 SEC. 263. SMALL COMMUNITY JOINT PARTICIPATION. 

17 (a) Section 541(3)(A) of the Energy Independence 

18 and Security Act of 2007 is amended in clause (i) by 

19 changing the word ‘‘and’’ to ‘‘or’’ at the end of subclause 

20 (II), in subclause (ii)(II) by striking the period at the end 

21 of and inserting a semicolon and the word ‘‘or’’, and by 

22 inserting the following new clause (iii): 

23 ‘‘(iii) a group of adjacent, contiguous, 

24 or geographically proximate units of local 

25 government that reach agreement to act 

26 jointly for purposes of this section and that 


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1 represent a combined population of not 

2 less than 35,000.’’. 

3 (b) Section 541(3)(B) of the Energy Independence 

4 and Security Act of 2007 is amended in subclause (ii)(II) 

5 by striking the period at the end of and inserting a semi6 colon and the word ‘‘or’’, and by inserting the following 

7 new clause (iii): 

8 ‘‘(iii) a group of adjacent, contiguous, 

9 or geographically proximate units of local 

10 government that reach agreement to act 

11 jointly for purposes of this section and that 

12 represent a combined population of not 

13 less than 50,000.’’. 

14 SEC. 264. LOW INCOME COMMUNITY ENERGY EFFICIENCY 

15 PROGRAM. 

16 (a) IN GENERAL.—The Secretary of Energy is au17 thorized to make grants to private, non-profit, mission18 driven community development organizations including 

19 community development corporations and community de20 velopment financial institutions to provide financing to 

21 businesses and projects that improve energy efficiency; 

22 identify and develop alternative, renewable, and distrib23 uted energy supplies; provide technical assistance and pro24 mote job and business opportunities for low-income resiVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00360 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 dents; and increase energy conservation in low income 

2 rural and urban communities. 

3 (b) GRANTS.—The purpose of such grants is to in4 crease the flow of capital and benefits to low income com5 munities, minority-owned and woman-owned businesses 

6 and entrepreneurs and other projects and activities located 

7 in low income communities in order to reduce environ8 mental degradation, foster energy conservation and effi9 ciency and create job and business opportunities for local 

10 residents. The Secretary may make grants on a competi11 tive basis for— 

12 (1) investments that develop alternative, renew13 able, and distributed energy supplies; 

14 (2) capitalizing loan funds that lend to energy 

15 efficiency projects and energy conservation pro16 grams; 

17 (3) technical assistance to plan, develop and 

18 manage an energy efficiency financing program; and 

19 (4) technical and financial assistance to assist 

20 small-scale businesses and private entities develop 

21 new renewable and distributed sources of power or 

22 combined heat and power generation. 

23 (c) AUTHORIZATION OF APPROPRIATIONS.—For the 

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1 priated $50,000,000 for each of the fiscal years 2010 

2 through 2015. 

3 TITLE III—REDUCING GLOBAL 

4 WARMING POLLUTION 

5 SEC. 301. SHORT TITLE. 

6 This title, and sections 112, 116, 121, 221, 222, and 

7 223 of this Act, may be cited as the ‘‘Safe Climate Act’’. 

8 Subtitle A—Reducing Global 

9 Warming Pollution 

10 SEC. 311. REDUCING GLOBAL WARMING POLLUTION. 

11 The Clean Air Act (42 U.S.C. and following) is 

12 amended by adding after title VI the following new title: 

13 ‘‘TITLE VII—GLOBAL WARMING 

14 POLLUTION REDUCTION PRO15 GRAM 

16 ‘‘PART A—GLOBAL WARMING POLLUTION 

17 REDUCTION GOALS AND TARGETS 

18 ‘‘SEC. 701. FINDINGS AND PURPOSE. 

19 ‘‘(a) FINDINGS.—The Congress finds as follows: 

20 ‘‘(1) Global warming poses a significant threat 

21 to the national security, economy, public health and 

22 welfare, and environment of the United States, as 

23 well as of other nations. 

24 ‘‘(2) Reviews of scientific studies, including by 

25 the Intergovernmental Panel on Climate Change and 


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1 the National Academy of Sciences, demonstrate that 

2 global warming is the result of the combined anthro3 pogenic greenhouse gas emissions from numerous 

4 sources of all types and sizes. Each increment of 

5 emission, when combined with other emissions, 

6 causes or contributes materially to the acceleration 

7 and extent of global warming and its adverse effects 

8 for the lifetime of such gas in the atmosphere. Ac9 cordingly, controlling emissions in small as well as 

10 large amounts is essential to prevent, slow the pace 

11 of, reduce the threats from, and mitigate global 

12 warming and its adverse effects. 

13 ‘‘(3) Because they induce global warming, 

14 greenhouse gas emissions cause or contribute to in15 juries to persons in the United States, including— 

16 ‘‘(A) adverse health effects such as disease 

17 and loss of life; 

18 ‘‘(B) displacement of human populations; 

19 ‘‘(C) damage to property and other inter20 ests related to ocean levels, acidification, and 

21 ice changes; 

22 ‘‘(D) severe weather and seasonal changes; 

23 ‘‘(E) disruption, costs, and losses to busi24 ness, trade, employment, farms, subsistence, 


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1 aesthetic enjoyment of the environment, recre2 ation, culture, and tourism; 

3 ‘‘(F) damage to plants, forests, lands, and 

4 waters; 

5 ‘‘(G) harm to wildlife and habitat; 

6 ‘‘(H) scarcity of water and the decreased 

7 abundance of other natural resources; 

8 ‘‘(I) worsening of tropospheric air pollu9 tion; 

10 ‘‘(J) substantial threats of similar damage; 

11 and 

12 ‘‘(K) other harm. 

13 ‘‘(4) That many of these effects and risks of fu14 ture effects of global warming are widely shared 

15 does not minimize the adverse effects individual per16 sons have suffered, will suffer, and are at risk of 

17 suffering because of global warming. 

18 ‘‘(5) That some of the adverse and potentially 

19 catastrophic effects of global warming are at risk of 

20 occurring and not a certainty does not negate the 

21 harm persons suffer from actions that increase the 

22 likelihood, extent, and severity of such future im23 pacts. 

24 ‘‘(6) Nations of the world look to the United 

25 States for leadership in addressing the threat of and 


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1 harm from global warming. Full implementation of 

2 the Safe Climate Act is critical to engage other na3 tions in an international effort to mitigate the threat 

4 of and harm from global warming. 

5 ‘‘(7) Global warming and its adverse effects are 

6 occurring and are likely to continue and increase in 

7 magnitude, and to do so at a greater and more 

8 harmful rate, unless the Safe Climate Act is fully 

9 implemented and enforced in an expeditious manner. 

10 ‘‘(b) PURPOSE.—It is the general purpose of the Safe 

11 Climate Act to help prevent, reduce the pace of, mitigate, 

12 and remedy global warming and its adverse effects. To ful13 fill such purpose, it is necessary to— 

14 ‘‘(1) require the timely fulfillment of all govern15 mental acts and duties, both substantive and proce16 dural, and the prompt compliance of covered entities 

17 with the requirements of the Safe Climate Act; 

18 ‘‘(2) establish and maintain an effective, trans19 parent, and fair market for emission allowances and 

20 preserve the integrity of the cap on emissions and of 

21 offset credits; 

22 ‘‘(3) advance the production and deployment of 

23 clean energy and energy efficiency technologies; and 

24 ‘‘(4) ensure effective enforcement of the Safe 

25 Climate Act by citizens, States, Indian tribes, and 


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1 all levels of government because each violation of the 

2 Safe Climate Act is likely to result in an additional 

3 increment of greenhouse gas emission and will slow 

4 the pace of implementation of the Safe Climate Act 

5 and delay the achievement of the goals set forth in 

6 section 702, and cause or contribute to global warm7 ing and its adverse effects. 

8 ‘‘SEC. 702. ECONOMY-WIDE REDUCTION GOALS. 

9 ‘‘The goals of the Safe Climate Act are to reduce 

10 steadily the quantity of United States greenhouse gas 

11 emissions such that— 

12 ‘‘(1) in 2012, the quantity of United States 

13 greenhouse gas emissions does not exceed 97 percent 

14 of the quantity of United States greenhouse gas 

15 emissions in 2005; 

16 ‘‘(2) in 2020, the quantity of United States 

17 greenhouse gas emissions does not exceed 80 percent 

18 of the quantity of United States greenhouse gas 

19 emissions in 2005; 

20 ‘‘(3) in 2030, the quantity of United States 

21 greenhouse gas emissions does not exceed 58 percent 

22 of the quantity of United States greenhouse gas 

23 emissions in 2005; and 

24 ‘‘(4) in 2050, the quantity of United States 

25 greenhouse gas emissions does not exceed 17 percent 


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1 of the quantity of United States greenhouse gas 

2 emissions in 2005. 

3 ‘‘SEC. 703. REDUCTION TARGETS FOR SPECIFIED SOURCES. 

4 ‘‘(a) IN GENERAL.—The regulations issued under 

5 section 721 shall cap and reduce annually the greenhouse 

6 gas emissions of capped sources each calendar year begin7 ning in 2012 such that— 

8 ‘‘(1) in 2012, the quantity of greenhouse gas 

9 emissions from capped sources does not exceed 97 

10 percent of the quantity of greenhouse gas emissions 

11 from such sources in 2005; 

12 ‘‘(2) in 2020, the quantity of greenhouse gas 

13 emissions from capped sources does not exceed 83 

14 percent of the quantity of greenhouse gas emissions 

15 from such sources in 2005; 

16 ‘‘(3) in 2030, the quantity of greenhouse gas 

17 emissions from capped sources does not exceed 58 

18 percent of the quantity of greenhouse gas emissions 

19 from such sources in 2005; and 

20 ‘‘(4) in 2050, the quantity of greenhouse gas 

21 emissions from capped sources does not exceed 17 

22 percent of the quantity of greenhouse gas emissions 

23 from such sources in 2005. 

24 ‘‘(b) DEFINITION.—For purposes of this section, the 

25 term ‘greenhouse gas emissions from such sources in 


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1 2005’ means emissions to which section 722 would have 

2 applied if the requirements of this title for the specified 

3 year had been in effect for 2005. 

4 ‘‘SEC. 704. SUPPLEMENTAL POLLUTION REDUCTIONS. 

5 ‘‘For the purposes of decreasing the likelihood of cat6 astrophic climate change, preserving tropical forests, 

7 building capacity to generate offset credits, and facili8 tating international action on global warming, the Admin9 istrator shall set aside the percentage specified in section 

10 781 of the quantity of emission allowances established 

11 under section 721(a) for each year, to be used to achieve 

12 a reduction of greenhouse gas emissions from deforest13 ation in developing countries in accordance with part E. 

14 In 2020, activities supported under part E shall provide 

15 greenhouse gas reductions in an amount equal to an addi16 tional 10 percentage points of reductions from United 

17 States greenhouse gas emissions in 2005. The Adminis18 trator shall transfer these allowances with respect to ac19 tivities in countries that enter into and implement agree20 ments or arrangements relating to reduced deforestation 

21 as described in section 754(a)(2). 

22 ‘‘SEC. 705. REVIEW AND PROGRAM RECOMMENDATIONS. 

23 ‘‘(a) IN GENERAL.—The Administrator shall, in con24 sultation with appropriate Federal agencies, submit to 


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1 Congress a report not later than July 1, 2013, and every 

2 4 years thereafter, that includes— 

3 ‘‘(1) an analysis of key findings based on the 

4 latest scientific information and data relevant to 

5 global climate change; 

6 ‘‘(2) an analysis of capabilities to monitor and 

7 verify greenhouse gas reductions on a worldwide 

8 basis, including for the United States, as required 

9 under the Safe Climate Act; and 

10 ‘‘(3) an analysis of the status of worldwide 

11 greenhouse gas reduction efforts, including imple12 mentation of the Safe Climate Act and other poli13 cies, both domestic and international, for reducing 

14 greenhouse gas emissions, preventing dangerous at15 mospheric concentrations of greenhouse gases, pre16 venting significant irreversible consequences of cli17 mate change, and reducing vulnerability to the im18 pacts of climate change. 

19 ‘‘(b) EXCEPTION.—Paragraph (3) of subsection (a) 

20 shall not apply to the first report submitted under such 

21 subsection. 

22 ‘‘(c) LATEST SCIENTIFIC INFORMATION.—The anal23 ysis required under subsection (a)(1) shall— 

24 ‘‘(1) address existing scientific information and 

25 reports, considering, to the greatest extent possible, 


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1 the most recent assessment report of the Intergov2 ernmental Panel on Climate Change, reports by the 

3 United States Global Change Research Program and 

4 Federal agencies, and the European Union’s global 

5 temperature data assessment; and 

6 ‘‘(2) review trends and projections for— 

7 ‘‘(A) global and country-specific annual 

8 emissions of greenhouse gases, and cumulative 

9 emissions produced between 1850 and the 

10 present, including— 

11 ‘‘(i) global cumulative emissions of an12 thropogenic greenhouse gases; 

13 ‘‘(ii) global annual emissions of an14 thropogenic greenhouse gases; and 

15 ‘‘(iii) by country, annual total, annual 

16 per capita, and cumulative anthropogenic 

17 emissions of greenhouse gases for the top 

18 50 emitting nations; 

19 ‘‘(B) significant changes, both globally and 

20 by region, in annual net non-anthropogenic 

21 greenhouse gas from natural sources, including 

22 permafrost, forests, or oceans; 

23 ‘‘(C) global atmospheric concentrations of 

24 greenhouse gases, expressed in annual con25 centration units as well as carbon dioxide 


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1 equivalents based on 100-year global warming 

2 potentials; 

3 ‘‘(D) major climate forcing factors, such as 

4 aerosols; 

5 ‘‘(E) global average temperature, expressed 

6 as seasonal and annual averages in land, ocean, 

7 and land-plus-ocean averages; and 

8 ‘‘(F) sea level rise; 

9 ‘‘(3) assess the current and potential impacts of 

10 global climate change on— 

11 ‘‘(A) human populations, including impacts 

12 on public health, economic livelihoods, subsist13 ence, human infrastructure, and displacement 

14 or permanent relocation due to flooding, severe 

15 weather, extended drought, erosion, or other 

16 ecosystem changes; 

17 ‘‘(B) freshwater systems, including water 

18 resources for human consumption and agri19 culture and natural and managed ecosystems, 

20 flood and drought risks, and relative humidity; 

21 ‘‘(C) the carbon cycle, including impacts 

22 related to the thawing of permafrost, the fre23 quency and intensity of wildfire, and terrestrial 

24 and ocean carbon sinks; 


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1 ‘‘(D) ecosystems and animal and plant 

2 populations, including impacts on species abun3 dance, phenology, and distribution; 

4 ‘‘(E) oceans and ocean ecosystems, includ5 ing effects on sea level, ocean acidity, ocean 

6 temperatures, coral reefs, ocean circulation, 

7 fisheries, and other indicators of ocean eco8 system health; 

9 ‘‘(F) the cryosphere, including effects on 

10 ice sheet mass balance, mountain glacier mass 

11 balance, and sea-ice extent and volume; 

12 ‘‘(G) changes in the intensity, frequency, 

13 or distribution of severe weather events, includ14 ing precipitation, tropical cyclones, tornadoes 

15 and severe heat waves; 

16 ‘‘(H) agriculture and forest systems, in17 cluding effects on growing season, distribution, 

18 and yield; and 

19 ‘‘(I) any other indicators the Administrator 

20 deems appropriate; 

21 ‘‘(4) summarize any significant socio-economic 

22 impacts of climate change in the United States, in23 cluding the territories of the United States, drawing 

24 on work by Federal agencies and the academic lit25 erature, including impacts on— 


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1 ‘‘(A) public health; 

2 ‘‘(B) human infrastructure, including 

3 coastal infrastructure vulnerability to extreme 

4 events and sea level rise, river floodplain infra5 structure, and sewer and water management 

6 systems; 

7 ‘‘(C) agriculture and forests, including ef8 fects on potential growing season, distribution, 

9 and yield; 

10 ‘‘(D) water resources for human consump11 tion, agriculture and natural and managed eco12 systems, flood and drought risks and relative 

13 humidity; 

14 ‘‘(E) energy supply and use; and 

15 ‘‘(F) transportation; 

16 ‘‘(5) in assessing risks and impacts, use a risk 

17 management framework, including both qualitative 

18 and quantitative measures, to assess the observed 

19 and projected impacts of current and future climate 

20 change, accounting for— 

21 ‘‘(A) both monetized and non-monetized 

22 losses; 

23 ‘‘(B) potential nonlinear, abrupt, or essen24 tially irreversible changes in the climate system; 


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1 ‘‘(C) potential nonlinear increases in the 

2 cost of impacts; 

3 ‘‘(D) potential low-probability, high impact 

4 events; and 

5 ‘‘(E) whether impacts are transitory or es6 sentially permanent; 

7 ‘‘(6) based on the findings of the Administrator 

8 under this section, as well as assessments produced 

9 by the Intergovernmental Panel on Climate Change, 

10 the United States Global Change Research program, 

11 and other relevant scientific entities— 

12 ‘‘(A) describe increased risks to natural 

13 systems and society that would result from an 

14 increase in global average temperature 3.6 de15 grees Fahrenheit (2 degrees Celsius) above the 

16 pre-industrial average or an increase in atmos17 pheric greenhouse gas concentrations above 450 

18 parts per million carbon dioxide equivalent; and 

19 ‘‘(B) identify and assess— 

20 ‘‘(i) significant residual risks not 

21 avoided by the thresholds described in sub22 paragraph (A); 

23 ‘‘(ii) alternative thresholds or targets 

24 that may more effectively limit the risks 

25 identified pursuant to clause (i); and 


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1 ‘‘(iii) thresholds in addition to those 

2 described in subparagraph (A) which sig3 nificantly increase the risk of certain im4 pacts or render them essentially perma5 nent. 

6 ‘‘(d) STATUS OF MONITORING AND VERIFICATION

7 CAPABILITIES TO EVALUATE GREENHOUSE GAS REDUC8 TION EFFORTS.—The analysis required under subsection 

9 (a)(2) shall evaluate the capabilities of the monitoring, re10 porting, and verification systems used to quantify progress 

11 in achieving reductions in greenhouse gas emissions by the 

12 United States as described in section 702, including— 

13 ‘‘(1) quantification of emissions and emission 

14 reductions by entities participating in the cap and 

15 trade program under this title; 

16 ‘‘(2) quantification of emissions and emission 

17 reductions by entities participating in the offset pro18 gram under this title; 

19 ‘‘(3) quantification of emission and emissions 

20 reductions by entities regulated by performance 

21 standards; 

22 ‘‘(4) quantification of aggregate net emissions 

23 and emissions reductions by the United States; and 


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1 ‘‘(5) quantification of global changes in net 

2 emissions and in sources and sinks of greenhouse 

3 gases. 

4 ‘‘(e) STATUS OF GREENHOUSE GAS REDUCTION EF5 FORTS.—The analysis required under subsection (a)(3) 

6 shall address— 

7 ‘‘(1) whether the programs under Safe Climate 

8 Act and other Federal statutes are resulting in suffi9 cient United States greenhouse gas emissions reduc10 tions to meet the emissions reduction targets de11 scribed in section 702, taking into account the use 

12 of offsets; and 

13 ‘‘(2) whether United States actions, taking into 

14 account international actions, commitments, and 

15 trends, and considering the range of plausible emis16 sions scenarios, are sufficient to avoid— 

17 ‘‘(A) atmospheric greenhouse gas con18 centrations above 450 parts per million carbon 

19 dioxide equivalent; 

20 ‘‘(B) global average surface temperature 

21 3.6 degrees Fahrenheit (2 degrees Celsius) 

22 above the pre-industrial average, or such other 

23 temperature thresholds as the Administrator 

24 deems appropriate; and 


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1 ‘‘(C) other temperature or greenhouse gas 

2 thresholds identified pursuant to subsection 

3 (c)(6)(B). 

4 ‘‘(f) RECOMMENDATIONS.— 

5 ‘‘(1) LATEST SCIENTIFIC INFORMATION.— 

6 Based on the analysis described in subsection (a)(1), 

7 each report under subsection (a) shall identify ac8 tions that could be taken to— 

9 ‘‘(A) improve the characterization of 

10 changes in the earth-climate system and im11 pacts of global climate change; 

12 ‘‘(B) better inform decision making and 

13 actions related to global climate change; 

14 ‘‘(C) mitigate risks to natural and social 

15 systems; and 

16 ‘‘(D) design policies to better account for 

17 climate risks. 

18 ‘‘(2) MONITORING, REPORTING AND

19 VERIFICATION.—Based on the analysis described in 

20 subsection (a)(2), each report under subsection (a) 

21 shall identify key gaps in measurement, reporting, 

22 and verification capabilities and make recommenda23 tions to improve the accuracy and reliability of those 

24 capabilities. 


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1 ‘‘(3) STATUS OF GREENHOUSE GAS REDUCTION

2 EFFORTS.—Based on the analysis described in sub3 section (a)(3), taking into account international ac4 tions, commitments, and trends, and considering the 

5 range of plausible emissions scenarios, each report 

6 under subsection (a) shall identify— 

7 ‘‘(A) the quantity of additional reductions 

8 required to meet the emissions reduction tar9 gets in section 702; 

10 ‘‘(B) the quantity of additional reductions 

11 in global greenhouse gas emissions needed to 

12 avoid the identified concentration and tempera13 ture thresholds described in subsection (e); and 

14 ‘‘(C) possible strategies and approaches for 

15 achieving additional reductions. 

16 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 

17 are authorized to be appropriated to carry out this section 

18 such sums as may be necessary. 

19 ‘‘SEC. 706. NATIONAL ACADEMY REVIEW. 

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

21 date of enactment of this title, the Administrator shall 

22 offer to enter into a contract with the National Academy 

23 of Sciences (in this section referred to as the ‘Academy’) 

24 under which the Academy shall, not later than July 1, 


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1 2014, and every 4 years thereafter, submit to Congress 

2 and the Administrator a report that includes— 

3 ‘‘(1) a review of the most recent report and rec4 ommendations issued under section 705; and 

5 ‘‘(2) an analysis of technologies to achieve re6 ductions in greenhouse gas emissions. 

7 ‘‘(b) FAILURE TO ISSUE A REPORT.—In the event 

8 that the Administrator has not issued all or part of the 

9 most recent report required under section 705, the Acad10 emy shall conduct its own review and analysis of the re11 quired information. 

12 ‘‘(c) TECHNOLOGICAL INFORMATION.—The analysis 

13 required under subsection (a)(2) shall— 

14 ‘‘(1) review existing technological information 

15 and reports, including the most recent reports by the 

16 Department of Energy, the United States Global 

17 Change Research Program, the Intergovernmental 

18 Panel on Climate Change, and the International En19 ergy Agency and any other relevant information on 

20 technologies or practices that reduce or limit green21 house gas emissions; 

22 ‘‘(2) include the participation of technical ex23 perts from relevant private industry sectors; 

24 ‘‘(3) review the current and future projected de25 ployment of technologies and practices in the United 


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1 States that reduce or limit greenhouse gas emis2 sions, including— 

3 ‘‘(A) technologies for capture and seques4 tration of greenhouse gases; 

5 ‘‘(B) technologies to improve energy effi6 ciency; 

7 ‘‘(C) low- or zero-greenhouse gas emitting 

8 energy technologies; 

9 ‘‘(D) low- or zero-greenhouse gas emitting 

10 fuels; 

11 ‘‘(E) biological sequestration practices and 

12 technologies; and 

13 ‘‘(F) any other technologies the Academy 

14 deems relevant; and 

15 ‘‘(4) review and compare the emissions reduc16 tion potential, commercial viability, market penetra17 tion, investment trends, and deployment of the tech18 nologies described in paragraph (3), including— 

19 ‘‘(A) the need for additional research and 

20 development, including publicly funded research 

21 and development; 

22 ‘‘(B) the extent of commercial deployment, 

23 including, where appropriate, a comparison to 

24 the cost and level of deployment of conventional 


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1 fossil fuel-fired energy technologies and devices; 

2 and 

3 ‘‘(C) an evaluation of any substantial tech4 nological, legal, or market-based barriers to 

5 commercial deployment. 

6 ‘‘(d) RECOMMENDATIONS.— 

7 ‘‘(1) LATEST SCIENTIFIC INFORMATION.— 

8 Based on the review described in subsection (a)(1), 

9 the Academy shall identify actions that could be 

10 taken to— 

11 ‘‘(A) improve the characterization of 

12 changes in the earth-climate system and im13 pacts of global climate change; 

14 ‘‘(B) better inform decision making and 

15 actions 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 

24 on the analysis described in subsection (a)(2), the 

25 Academy 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 

7 deployment 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 tar13 gets 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 

17 thresholds described in section 705(c)(6)(A) or 

18 identified pursuant to section 705(c)(6)(B). 

19 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 

20 are authorized to be appropriated to carry out this section 

21 such sums as may be necessary. 

22 ‘‘SEC. 707. PRESIDENTIAL RESPONSE AND RECOMMENDA23 TIONS. 

24 ‘‘Not later than July 1, 2017, and every 4 years 

25 thereafter— 


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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 report sub4 mitted under section 705 by the National Academy 

5 of Sciences in the previous year and to address any 

6 shortfalls identified in such report; and 

7 ‘‘(2) in the event that the National Academy of 

8 Sciences has concluded, in the most recent report 

9 submitted under section 705, that the United States 

10 will not achieve the necessary domestic greenhouse 

11 gas emissions reductions, or that global actions will 

12 not maintain safe global average surface tempera13 ture and atmospheric greenhouse gas concentration 

14 thresholds, the President shall submit to Congress a 

15 plan identifying domestic and international actions 

16 that will achieve necessary additional greenhouse gas 

17 reductions, including any recommendations for legis18 lative action. 

19 ‘‘PART B—DESIGNATION AND REGISTRATION OF 

20 GREENHOUSE GASES 

21 ‘‘SEC. 711. DESIGNATION OF GREENHOUSE GASES. 

22 ‘‘(a) GREENHOUSE GASES.—For purposes of this 

23 title, the following are greenhouse gases: 

24 ‘‘(1) Carbon dioxide. 

25 ‘‘(2) Methane. 


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1 ‘‘(3) Nitrous oxide. 

2 ‘‘(4) Sulfur hexafluoride. 

3 ‘‘(5) Hydrofluorocarbons from a chemical man4 ufacturing process at an industrial stationary 

5 source. 

6 ‘‘(6) Any perfluorocarbon. 

7 ‘‘(7) Nitrogen trifluoride. 

8 ‘‘(8) Any other anthropogenic gas designated as 

9 a greenhouse gas by the Administrator under this 

10 section. 

11 ‘‘(b) DETERMINATION ON ADMINISTRATOR’S INITIA12 TIVE.—The Administrator shall, by rule— 

13 ‘‘(1) determine whether 1 metric ton of another 

14 anthropogenic gas makes the same or greater con15 tribution to global warming over 100 years as 1 met16 ric ton of carbon dioxide; 

17 ‘‘(2) determine the carbon dioxide equivalent 

18 value for each gas with respect to which the Admin19 istrator makes an affirmative determination under 

20 paragraph (1); 

21 ‘‘(3) for each gas with respect to which the Ad22 ministrator makes an affirmative determination 

23 under paragraph (1) and that is used as a substitute 

24 for a class I or class II substance under title VI, de25 termine the extent to which to regulate that gas 


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1 under section 619 and specify appropriate compli2 ance obligations under section 619; 

3 ‘‘(4) designate as a greenhouse gas for purposes 

4 of this title each gas for which the Administrator 

5 makes an affirmative determination under para6 graph (1), to the extent that it is not regulated 

7 under section 619; and 

8 ‘‘(5) specify the appropriate compliance obliga9 tions under this title for each gas designated as a 

10 greenhouse gas under paragraph (4). 

11 ‘‘(c) PETITIONS TO DESIGNATE A GREENHOUSE

12 GAS.— 

13 ‘‘(1) IN GENERAL.—Any person may petition 

14 the Administrator to designate as a greenhouse gas 

15 any anthropogenic gas 1 metric ton of which makes 

16 the same or greater contribution to global warming 

17 over 100 years as 1 metric ton of carbon dioxide. 

18 ‘‘(2) CONTENTS OF PETITION.—The petitioner 

19 shall provide sufficient data, as specified by rule by 

20 the Administrator, to demonstrate that the gas is 

21 likely to be a greenhouse gas and is likely to be pro22 duced, imported, used, or emitted in the United 

23 States. To the extent practicable, the petitioner shall 

24 also identify producers, importers, distributors, 

25 users, and emitters of the gas in the United States. 


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1 ‘‘(3) REVIEW AND ACTION BY THE ADMINIS2 TRATOR.—Not later than 90 days after receipt of a 

3 petition under paragraph (2), the Administrator 

4 shall determine whether the petition is complete and 

5 notify the petitioner and the public of the decision. 

6 ‘‘(4) ADDITIONAL INFORMATION.—The Admin7 istrator may require producers, importers, distribu8 tors, users, or emitters of the gas to provide infor9 mation on the contribution of the gas to global 

10 warming over 100 years compared to carbon dioxide. 

11 ‘‘(5) TREATMENT OF PETITION.—For any sub12 stance used as a substitute for a class I or class II 

13 substance under title VI, the Administrator may 

14 elect to treat a petition under this subsection as a 

15 petition to list the substance as a class II, group II 

16 substance under section 619, and may require the 

17 petition to be amended to address listing criteria 

18 promulgated under that section. 

19 ‘‘(6) DETERMINATION.—Not later than 2 years 

20 after receipt of a complete petition, the Adminis21 trator shall, after notice and an opportunity for com22 ment— 

23 ‘‘(A) issue and publish in the Federal Reg24 ister— 


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1 ‘‘(i) a determination that 1 metric ton 

2 of the gas does not make a contribution to 

3 global warming over 100 years that is 

4 equal to or greater than that made by 1 

5 metric ton of carbon dioxide; and 

6 ‘‘(ii) an explanation of the decision; or 

7 ‘‘(B) determine that 1 metric ton of the 

8 gas makes a contribution to global warming 

9 over 100 years that is equal to or greater than 

10 that made by 1 metric ton of carbon dioxide, 

11 and take the actions described in subsection (b) 

12 with respect to such gas. 

13 ‘‘(7) GROUNDS FOR DENIAL.—The Adminis14 trator may not deny a petition under this subsection 

15 solely on the basis of inadequate Environmental Pro16 tection Agency resources or time for review. 

17 ‘‘(d) MANUFACTURING AND EMISSION NOTICES.— 

18 ‘‘(1) NOTICE REQUIREMENT.— 

19 ‘‘(A) IN GENERAL.—Effective 24 months 

20 after the date of enactment of this title, no per21 son may manufacture or introduce into inter22 state commerce a fluorinated gas, or emit a sig23 nificant quantity, as determined by the Admin24 istrator, of any fluorinated gas that is genVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00387 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 erated as a byproduct during the production or 

2 use of another fluorinated gas, unless— 

3 ‘‘(i) the gas is designated as a green4 house gas under this section or is an 

5 ozone-depleting substance listed as a class 

6 I or class II substance under title VI; 

7 ‘‘(ii) the Administrator has deter8 mined that 1 metric ton of such gas does 

9 not make a contribution to global warming 

10 that is equal to or greater than that made 

11 by 1 metric ton of carbon dioxide; or 

12 ‘‘(iii) the person manufacturing or im13 porting the gas for distribution into inter14 state commerce, or emitting the gas, has 

15 submitted to the Administrator, at least 90 

16 days before the start of such manufacture, 

17 importation, or emission, a notice of such 

18 person’s manufacture, importation, or 

19 emission of such gas, and the Adminis20 trator has not determined that notice or a 

21 substantially similar notice is incomplete. 

22 ‘‘(B) ALTERNATIVE COMPLIANCE.—For a 

23 gas that is a substitute for a class I or class II 

24 substance under title VI and either has been 

25 listed as acceptable for use under section 612 


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1 or is currently subject to evaluation under sec2 tion 612, the Administrator may accept the no3 tice and information provided pursuant to that 

4 section as fulfilling the obligation under clause 

5 (iii) of subparagraph (A). 

6 ‘‘(2) REVIEW AND ACTION BY THE ADMINIS7 TRATOR.— 

8 ‘‘(A) COMPLETENESS.—Not later than 90 

9 days after receipt of notice under paragraph 

10 (1)(A)(iii) or (B), the Administrator shall deter11 mine whether the notice is complete. 

12 ‘‘(B) DETERMINATION.—If the Adminis13 trator determines that the notice is complete, 

14 the Administrator shall, after notice and an op15 portunity for comment, not later than 12 

16 months after receipt of the notice— 

17 ‘‘(i) issue and publish in the Federal 

18 Register a determination that 1 metric ton 

19 of the gas does not make a contribution to 

20 global warming over 100 years that is 

21 equal to or greater than that made by 1 

22 metric ton of carbon dioxide and an expla23 nation of the decision; or 

24 ‘‘(ii) determine that 1 metric ton of 

25 the gas makes a contribution to global 


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1 warming over 100 years that is equal to or 

2 greater than that made by 1 metric ton of 

3 carbon dioxide, and take the actions de4 scribed in subsection (b) with respect to 

5 such gas. 

6 ‘‘(e) REGULATIONS.—Not later than one year after 

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

8 promulgate regulations to carry out this section. Such reg9 ulations shall include— 

10 ‘‘(1) requirements for the contents of a petition 

11 submitted under subsection (c); 

12 ‘‘(2) requirements for the contents of a notice 

13 required under subsection (d); and 

14 ‘‘(3) methods and standards for evaluating the 

15 carbon dioxide equivalent value of a gas. 

16 ‘‘(f) GASES REGULATED UNDER TITLE VI.—The 

17 Administrator shall not designate a gas as a greenhouse 

18 gas under this section to the extent that the gas is regu19 lated under title VI. 

20 ‘‘(g) SAVINGS CLAUSE.—Nothing in this section shall 

21 be interpreted to relieve any person from complying with 

22 the requirements of section 612. 


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1 ‘‘SEC. 712. CARBON DIOXIDE EQUIVALENT VALUE OF 

2 GREENHOUSE GASES. 

3 ‘‘(a) MEASURE OF QUANTITY OF GREENHOUSE

4 GASES.—Any provision of this title or title VIII that refers 

5 to a quantity or percentage of a quantity of greenhouse 

6 gases shall mean the quantity or percentage of the green7 house gases expressed in carbon dioxide equivalents. 

8 ‘‘(b) INITIAL VALUE.—Except as provided by the Ad9 ministrator under this section or section 711, the carbon 

10 dioxide equivalent value of greenhouse gases for purposes 

11 of this Act shall be as follows: 

‘‘CARBON DIOXIDE EQUIVALENT OF 1 TON OF LISTED 

GREENHOUSE GASES 

Greenhouse gas (1 metric ton) Carbon dioxide equivalent 

(metric tons) 

Carbon dioxide 1 

Methane 25 

Nitrous oxide 298 

HFC-23 14,800 

HFC-125 3,500 

HFC-134a 1,430 

HFC-143a 4,470 

HFC-152a 124 

HFC-227ea 3,220 

HFC-236fa 9,810 

HFC-4310mee 1,640 

CF4 7,390 

C2F6 12,200 


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‘‘CARBON DIOXIDE EQUIVALENT OF 1 TON OF LISTED 

GREENHOUSE GASES—Continued 

Greenhouse gas (1 metric ton) Carbon dioxide equivalent 

(metric tons) 

C4F10 8,860 

C6F14 9,300 

SF6 22,800 

NF3 17,200 

1 ‘‘(c) PERIODIC REVIEW.— 

2 ‘‘(1) Not later than February 1, 2017, and (ex3 cept as provided in paragraph (3)) not less than 

4 every 5 years thereafter, the Administrator shall— 

5 ‘‘(A) review and, if appropriate, revise the 

6 carbon dioxide equivalent values established 

7 under this section or section 711(b)(2), based 

8 on a determination of the number of metric 

9 tons of carbon dioxide that makes the same 

10 contribution to global warming over 100 years 

11 as 1 metric ton of each greenhouse gas; and 

12 ‘‘(B) publish in the Federal Register the 

13 results of that review and any revisions. 

14 ‘‘(2) A revised determination published in the 

15 Federal Register under paragraph (1)(B) shall take 

16 effect for greenhouse gas emissions starting on Jan17 uary 1 of the first calendar year starting at least 9 

18 months after the date on which the revised deter19 mination was published. 


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1 ‘‘(3) The Administrator may decrease the fre2 quency of review and revision under paragraph (1) 

3 if the Administrator determines that such decrease 

4 is appropriate in order to synchronize such review 

5 and revision with any similar review process carried 

6 out pursuant to the United Nations Framework 

7 Convention on Climate Change, done at New York 

8 on May 9, 1992, or to an agreement negotiated 

9 under that convention, except that in no event shall 

10 the Administrator carry out such review and revision 

11 any less frequently than every 10 years. 

12 ‘‘(d) METHODOLOGY.—In setting carbon dioxide 

13 equivalent values, for purposes of this section or section 

14 711, the Administrator shall take into account publica15 tions by the Intergovernmental Panel on Climate Change 

16 or a successor organization under the auspices of the 

17 United Nations Environmental Programme and the World 

18 Meteorological Organization. 

19 ‘‘SEC. 713. GREENHOUSE GAS REGISTRY. 

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

21 ‘‘(1) CLIMATE REGISTRY.—The term ‘Climate 

22 Registry’ means the greenhouse gas emissions reg23 istry jointly established and managed by more than 

24 40 States and Indian tribes in 2007 to collect high25 quality greenhouse gas emission data from facilities, 


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1 corporations, and other organizations to support var2 ious greenhouse gas emission reporting and reduc3 tion policies for the member States and Indian 

4 tribes. 

5 ‘‘(2) REPORTING ENTITY.—The term ‘reporting 

6 entity’ means— 

7 ‘‘(A) a covered entity; 

8 ‘‘(B) an entity that— 

9 ‘‘(i) would be a covered entity if it had 

10 emitted, produced, imported, manufac11 tured, or delivered in 2008 or any subse12 quent year more than the applicable 

13 threshold level in the definition of covered 

14 entity in paragraph (14) of section 700; 

15 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 (14) of section 700, 

21 provided that the figure of 25,000 tons of 

22 carbon dioxide equivalent is read instead 

23 as 10,000 tons of carbon dioxide equivalent 

24 and the figure of 460,000,000 cubic feet is 

25 read instead as 276,000,000 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 

4 result in greenhouse gas emissions if the Ad5 ministrator determines that reporting under 

6 this section by such entity will help achieve the 

7 purposes of this title or title VIII; 

8 ‘‘(D) any vehicle fleet with emissions of 

9 more than 25,000 tons of carbon dioxide equiv10 alent on an annual basis, if the Administrator 

11 determines that the inclusion of such fleet will 

12 help achieve the purposes of this title or title 

13 VIII; or 

14 ‘‘(E) any entity that delivers electricity to 

15 an energy-intensive facility in an industrial sec16 tor that meets the energy or greenhouse gas in17 tensity criteria in section 764(b)(2)(A)(i). 

18 ‘‘(b) REGULATIONS.— 

19 ‘‘(1) IN GENERAL.—Not later than 6 months 

20 after the date of enactment of this title, the Admin21 istrator shall issue regulations establishing a Federal 

22 greenhouse gas registry. Such regulations shall— 

23 ‘‘(A) require reporting entities to submit to 

24 the Administrator data on— 


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1 ‘‘(i) greenhouse gas emissions in the 

2 United States; 

3 ‘‘(ii) the production and manufacture 

4 in the United States, importation into the 

5 United States, and, at the discretion of the 

6 Administrator, exportation from the 

7 United States, of fuels and industrial gases 

8 the uses of which result or may result in 

9 greenhouse gas emissions; 

10 ‘‘(iii) deliveries in the United States of 

11 natural gas, and any other gas meeting the 

12 specifications for commingling with natural 

13 gas for purposes of delivery, the combus14 tion of which result or may result in green15 house gas emissions; and 

16 ‘‘(iv) the capture and sequestration of 

17 greenhouse gases; 

18 ‘‘(B) require covered entities and, where 

19 appropriate, other reporting entities to submit 

20 to the Administrator data sufficient to ensure 

21 compliance with or implementation of the re22 quirements of this title; 

23 ‘‘(C) require reporting of electricity deliv24 ered to industrial sources in energy-intensive in25 dustries; 


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1 ‘‘(D) ensure the completeness, consistency, 

2 transparency, accuracy, precision, and reliability 

3 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 

9 the Climate Registry and other mandatory 

10 State or 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 

15 722 applies, and, to the extent determined to be 

16 appropriate by the Administrator, for covered 

17 entities with respect to other greenhouse gases 

18 and for other reporting entities, submitted data 

19 are based on— 

20 ‘‘(i) continuous monitoring systems 

21 for fuel flow or emissions, such as contin22 uous 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 

12 determines is appropriate for reporting 

13 small amounts of emissions, precision, reli14 ability, and accessibility, as similar as is 

15 technically feasible to that of data gen16 erally provided by continuous monitoring 

17 systems for fuel flow or emissions, if the 

18 Administrator determines that, with re19 spect to a reporting entity, there is no con20 tinuous monitoring system or alternative 

21 system described in clause (i) or (ii) that 

22 is technically feasible; 

23 ‘‘(H) require that the Administrator, in de24 termining the extent to which the requirement 

25 to use systems or methodologies in accordance 


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1 with subparagraph (G) is appropriate for re2 porting entities other than covered entities or 

3 for greenhouse gases to which section 722 does 

4 not apply, consider the cost of using such sys5 tems and methodologies, and of using other sys6 tems and methodologies that are available and 

7 suitable, for quantifying the emissions involved 

8 in light of the purposes of this title, including 

9 the goal of collecting consistent entity-wide 

10 data; 

11 ‘‘(I) include methods for minimizing double 

12 reporting and avoiding irreconcilable double re13 porting of greenhouse gas emissions; 

14 ‘‘(J) establish measurement protocols for 

15 carbon capture and sequestration systems, in16 cluding those where enhanced hydrocarbon re17 covery operations occur, taking into consider18 ation the regulations promulgated under section 

19 813; 

20 ‘‘(K) require that reporting entities provide 

21 the data required under this paragraph in re22 ports submitted electronically to the Adminis23 trator, in such form and containing such infor24 mation as may be required by the Adminis25 trator; 


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1 ‘‘(L) include requirements for keeping 

2 records supporting or related to, and protocols 

3 for auditing, submitted data; 

4 ‘‘(M) establish consistent policies for calcu5 lating carbon content and greenhouse gas emis6 sions for each type of fossil fuel with respect to 

7 which reporting is required; 

8 ‘‘(N) subsequent to implementation of poli9 cies developed under subparagraph (M), provide 

10 for immediate dissemination, to States, Indian 

11 tribes, and on the Internet, of all data reported 

12 under this section as soon as practicable after 

13 electronic audit by the Administrator and any 

14 resulting correction of data, except that data 

15 shall not be disseminated under this subpara16 graph if— 

17 ‘‘(i) its nondissemination is vital to 

18 the national security of the United States, 

19 as determined by the President; or 

20 ‘‘(ii) it is confidential business infor21 mation that cannot be derived from infor22 mation that is otherwise publicly available 

23 and that would cause significant calculable 

24 competitive harm if published, except 

25 that— 


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1 ‘‘(I) data relating to greenhouse 

2 gas emissions, including any upstream 

3 or verification data from reporting en4 tities, shall not be considered to be 

5 confidential business information; and 

6 ‘‘(II) data that is confidential 

7 business information shall be provided 

8 to a State or Indian tribe within 

9 whose jurisdiction the reporting entity 

10 is located, if the Administrator deter11 mines that such State or Indian tribe 

12 has in effect protections for confiden13 tial business information that are 

14 equivalent to protections applicable to 

15 the Federal Government; 

16 ‘‘(O) prescribe methods by which the Ad17 ministrator shall, in cases in which satisfactory 

18 data are not submitted to the Administrator for 

19 any period of time, estimate emission, produc20 tion, importation, manufacture, or delivery lev21 els— 

22 ‘‘(i) for covered entities with respect 

23 to greenhouse gas emissions, production, 

24 importation, manufacture, or delivery regu25 lated under this title to ensure that emisVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00401 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 sions, production, importation, manufac2 ture, or deliveries are not underreported, 

3 and to create a strong incentive for meet4 ing data monitoring and reporting require5 ments— 

6 ‘‘(I) with a conservative estimate 

7 of the highest emission, production, 

8 importation, manufacture, or delivery 

9 levels that may have occurred during 

10 the period for which data are missing; 

11 or 

12 ‘‘(II) to the extent the Adminis13 trator considers appropriate, with an 

14 estimate of such levels assuming the 

15 unit is emitting, producing, importing, 

16 manufacturing, or delivering at a 

17 maximum potential level during the 

18 period, in order to ensure that such 

19 levels are not underreported and to 

20 create a strong incentive for meeting 

21 data monitoring and reporting re22 quirements; and 

23 ‘‘(ii) for covered entities with respect 

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1 porting entities, with a reasonable estimate 

2 of the emission, production, importation, 

3 manufacture, or delivery levels that may 

4 have occurred during the period for which 

5 data are missing; 

6 ‘‘(P) require the designation of a des7 ignated representative for each reporting entity; 

8 ‘‘(Q) require an appropriate certification, 

9 by the designated representative for the report10 ing entity, of accurate and complete accounting 

11 of greenhouse gas emissions, as determined by 

12 the Administrator; and 

13 ‘‘(R) include requirements for other data 

14 necessary for accurate and complete accounting 

15 of greenhouse gas emissions, as determined by 

16 the Administrator, including data for quality 

17 assurance of monitoring systems, monitors and 

18 other measurement devices, and other data 

19 needed to verify reported emissions, production, 

20 importation, manufacture, or delivery. 

21 ‘‘(2) TIMING.— 

22 ‘‘(A) CALENDAR YEARS 2007 THROUGH

23 2010.—For a base period of calendar years 

24 2007 through 2010, each reporting entity shall 

25 submit annual data required under this section 


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1 to the Administrator not later than March 31, 

2 2011. The Administrator may waive or modify 

3 reporting requirements for calendar years 2007 

4 through 2010 for categories of reporting enti5 ties to the extent that the Administrator deter6 mines that the reporting entities did not keep 

7 data or records necessary to meet reporting re8 quirements. The Administrator may, in addition 

9 to or in lieu of such requirements, collect infor10 mation on energy consumption and production. 

11 ‘‘(B) SUBSEQUENT CALENDAR YEARS.— 

12 For calendar year 2011 and each subsequent 

13 calendar year, each reporting entity shall sub14 mit quarterly data required under this section 

15 to the Administrator not later than 60 days 

16 after the end of the applicable quarter, except 

17 when the data is already being reported to the 

18 Administrator on an earlier timeframe for an19 other program. 

20 ‘‘(3) WAIVER OF REPORTING REQUIREMENTS.— 

21 The Administrator may waive reporting require22 ments under this section for specific entities to the 

23 extent that the Administrator determines that suffi24 cient and equally or more reliable verified and timely 

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1 lic on the Internet under other mandatory statutory 

2 requirements. 

3 ‘‘(4) ALTERNATIVE THRESHOLD.—The Admin4 istrator may, by rule, establish applicability thresh5 olds for reporting under this section using alter6 native metrics and levels, provided that such metrics 

7 and levels are easier to administer and cover the 

8 same size and type of sources as the threshold de9 fined in this section. 

10 ‘‘(c) INTERRELATIONSHIP WITH OTHER SYSTEMS.— 

11 In developing the regulations issued under subsection (b), 

12 the Administrator shall take into account the work done 

13 by the Climate Registry and other mandatory State or 

14 multistate programs. Such regulations shall include an ex15 planation of any major differences in approach between 

16 the system established under the regulations and such reg17 istries and programs. 

18 ‘‘PART C—PROGRAM RULES 

19 ‘‘SEC. 721. EMISSION ALLOWANCES. 

20 ‘‘(a) IN GENERAL.—The Administrator shall estab21 lish a separate quantity of emission allowances for each 

22 calendar year starting in 2012, in the amounts prescribed 

23 under subsection (e). 

24 ‘‘(b) IDENTIFICATION NUMBERS.—The Adminis25 trator shall assign to each emission allowance established 


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1 under subsection (a) a unique identification number that 

2 includes the vintage year for that emission allowance. 

3 ‘‘(c) LEGAL STATUS OF EMISSION ALLOWANCES.— 

4 ‘‘(1) IN GENERAL.—An allowance established 

5 by the Administrator under this title does not con6 stitute a property right. 

7 ‘‘(2) TERMINATION OR LIMITATION.—Nothing 

8 in this Act or any other provision of law shall be 

9 construed to limit or alter the authority of the 

10 United States, including the Administrator acting 

11 pursuant to statutory authority, to terminate or 

12 limit allowances or offset credits. 

13 ‘‘(3) OTHER PROVISIONS UNAFFECTED.—Ex14 cept as otherwise specified in this Act, nothing in 

15 this Act relating to allowances or offset credits es16 tablished or issued under this title shall affect the 

17 application of any other provision of law to a covered 

18 entity, or the responsibility for a covered entity to 

19 comply with any such provision of law. 

20 ‘‘(d) SAVINGS PROVISION.—Nothing in this title shall 

21 be construed as requiring a change of any kind in any 

22 State law regulating electric utility rates and charges, or 

23 as affecting any State law regarding such State regula24 tion, or as limiting State regulation (including any 

25 prudency review) under such a State law. Nothing in this 


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1 title shall be construed as modifying the Federal Power 

2 Act or as affecting the authority of the Federal Energy 

3 Regulatory Commission under that Act. Nothing in this 

4 title shall be construed to interfere with or impair any pro5 gram for competitive bidding for power supply in a State 

6 in which such program is established. 

7 ‘‘(e) ALLOWANCES FOR EACH CALENDAR YEAR.— 

8 ‘‘(1) IN GENERAL.—Except as provided in para9 graph (2), the number of emission allowances estab10 lished by the Administrator under subsection (a) for 

11 each calendar year shall be as provided in the fol12 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 


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‘‘Calendar year Emission allowances (in millions) 

2025 4,294 

2026 4,142 

2027 3,990 

2028 3,837 

2029 3,685 

2030 3,533 

2031 3,408 

2032 3,283 

2033 3,158 

2034 3,033 

2035 2,908 

2036 2,784 

2037 2,659 

2038 2,534 

2039 2,409 

2040 2,284 

2041 2,159 

2042 2,034 

2043 1,910 

2044 1,785 

2045 1,660 

2046 1,535 

2047 1,410 

2048 1,285 

2049 1,160 

2050 and each year thereafter 1,035 

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 

12 for 2012 had been in effect in 2005, sec13 tion 722 would have required emission al14 lowances to be held for other than 66.2 

15 percent of United States greenhouse gas 

16 emissions in 2005; 

17 ‘‘(iii) if the requirements of this title 

18 for 2014 had been in effect in 2005, sec19 tion 722 would have required emission al20 lowances to be held for other than 75.7 

21 percent of United States greenhouse gas 

22 emissions in 2005; or 

23 ‘‘(iv) if the requirements of this title 

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1 lowances to be held for other than 84.5 

2 percent United States greenhouse gas 

3 emissions in 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 

13 gas emissions in 2005, expressed in 

14 tons of carbon dioxide equivalent; 

15 ‘‘(II) the percent of United 

16 States greenhouse gas emissions in 

17 2005, expressed in tons of carbon di18 oxide equivalent, that would have been 

19 subject to section 722 if the require20 ments of this title for the given cal21 endar year had been in effect in 2005; 

22 and 

23 ‘‘(III) the percentage set forth 

24 for that calendar year in section 


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1 703(a), or determined under clause 

2 (ii) of this subparagraph. 

3 ‘‘(ii) TARGETS.—In applying the for4 mula under clause (i)(III) of this subpara5 graph, for calendar years for which a per6 centage is not listed in section 703(a), the 

7 Administrator shall use a uniform annual 

8 decline in the amount of emissions between 

9 the years that are specified. 

10 ‘‘(iii) LIMITATION ON ADJUSTMENT

11 TIMING.—Once a calendar year has start12 ed, the Administrator may not adjust the 

13 number of emission allowances to be estab14 lished for that calendar year. 

15 ‘‘(C) LIMITATION ON ADJUSTMENT AU16 THORITY.—The Administrator may adjust 

17 under this paragraph the number of emission 

18 allowances to be established pursuant to para19 graph (1) only once. 

20 ‘‘(f) COMPENSATORY ALLOWANCE.— 

21 ‘‘(1) IN GENERAL.—The regulations promul22 gated under subsection (g) shall provide for the es23 tablishment and distribution of compensatory allow24 ances for— 


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1 ‘‘(A) the destruction, in 2012 or later, of 

2 fluorinated gases that are greenhouse gases if— 

3 ‘‘(i) allowances or offset credits were 

4 retired for their production or importation; 

5 and 

6 ‘‘(ii) such gases are not required to be 

7 destroyed under any other provision of law; 

8 ‘‘(B) the nonemissive use, in 2012 or later, 

9 of petroleum-based or coal-based liquid or gas10 eous fuel, petroleum coke, natural gas liquid, or 

11 natural gas as a feedstock, if allowances or off12 set credits were retired for the greenhouse 

13 gases that would have been emitted from their 

14 combustion; and 

15 ‘‘(C) the conversionary use, in 2012 or 

16 later, of fluorinated gases in a manufacturing 

17 process, including semiconductor research or 

18 manufacturing, if allowances or offset credits 

19 were retired for the production or importation 

20 of such gas. 

21 ‘‘(2) ESTABLISHMENT AND DISTRIBUTION.— 

22 ‘‘(A) IN GENERAL.—Not later than 90 

23 days after the end of each calendar year, the 

24 Administrator shall establish and distribute to 

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1 paragraph (A), (B), or (C) of paragraph (1) a 

2 quantity of compensatory allowances equivalent 

3 to the number of tons of carbon dioxide equiva4 lent of avoided emissions achieved through such 

5 actions. In establishing the quantity of compen6 satory allowances, the Administrator shall take 

7 into account the carbon dioxide equivalent value 

8 of any greenhouse gas resulting from such ac9 tion. 

10 ‘‘(B) SOURCE OF ALLOWANCES.—Compen11 satory allowances established under this sub12 section shall not be emission allowances estab13 lished under subsection (a). 

14 ‘‘(C) IDENTIFICATION NUMBERS.—The 

15 Administrator shall assign to each compen16 satory allowance established under subpara17 graph (A) a unique identification number. 

18 ‘‘(3) DEFINITIONS.—For purposes of this sub19 section— 

20 ‘‘(A) the term ‘destruction’ means the con21 version of a greenhouse gas by thermal, chem22 ical, or other means to another gas or set of 

23 gases with little or no carbon dioxide equivalent 

24 value; 


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1 ‘‘(B) the term ‘nonemissive use’ means the 

2 use of fossil fuel as a feedstock in an industrial 

3 or manufacturing process to the extent that 

4 greenhouse gases are not emitted from such 

5 process, and to the extent that the products of 

6 such process are not intended for use as a fuel 

7 or are otherwise intended to be contained in a 

8 fuel; and 

9 ‘‘(C) the term ‘conversionary use’ means 

10 the conversion during research or manufac11 turing of a fluorinated gas into another green12 house gas or set of gases with a lower carbon 

13 dioxide equivalent value. 

14 ‘‘(g) REGULATIONS.—Not later than 24 months after 

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

16 promulgate regulations to carry out the provisions of this 

17 title. 

18 ‘‘(h) FEEDSTOCK EMISSIONS STUDY.— 

19 ‘‘(1) The Administrator may conduct a study to 

20 determine the extent to which petroleum-based or 

21 coal-based liquid or gaseous fuel, petroleum coke, 

22 natural gas liquid, or natural gas are used as feed23 stocks in manufacturing processes to produce prod24 ucts and the greenhouse gas emissions resulting 

25 from such uses. 


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1 ‘‘(2) If as a result of such a study, the Admin2 istrator determines that the use of such products by 

3 noncoverd sources results in substantial emissions of 

4 greenhouse gases or their precursors and that such 

5 emissions have not been adequately addressed under 

6 other requirements of this Act, the Administrator 

7 may, after notice and comment rulemaking, promul8 gate a regulation reducing compensatory allowances 

9 commensurately if doing so will not result in leak10 age. 

11 ‘‘SEC. 722. PROHIBITION OF EXCESS EMISSIONS. 

12 ‘‘(a) PROHIBITION.—Except as provided in sub13 section (c), effective January 1, 2012, each covered entity 

14 is prohibited from emitting greenhouse gases, and having 

15 attributable greenhouse gas emissions, in combination, in 

16 excess of its allowable emissions level. A covered entity’s 

17 allowable emissions level for each calendar year is the 

18 number of emission allowances (or credits or other allow19 ances as provided in subsection (d)) it holds as of 12:01 

20 a.m. on April 1 (or a later date established by the Admin21 istrator under subsection (j)) of the following calendar 

22 year. 

23 ‘‘(b) METHODS OF DEMONSTRATING COMPLIANCE.— 

24 Except as otherwise provided in this section, the owner 

25 or operator of a covered entity shall not be considered to 


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1 be in compliance with the prohibition in subsection (a) un2 less, as of 12:01 a.m. on April 1 (or a later date estab3 lished by the Administrator under subsection (j)) of each 

4 calendar year starting in 2013, the owner or operator 

5 holds a quantity of emission allowances (or credits or other 

6 allowances as provided in subsection (d)) at least as great 

7 as the quantity calculated as follows: 

8 ‘‘(1) ELECTRICITY SOURCES.—For a covered 

9 entity described in section 700(14)(A), 1 emission 

10 allowance for each ton of carbon dioxide equivalent 

11 of greenhouse gas that such covered entity emitted 

12 in the previous calendar year, excluding emissions 

13 resulting from the combustion of— 

14 ‘‘(A) petroleum-based or coal-based liquid 

15 fuel; 

16 ‘‘(B) natural gas liquid; 

17 ‘‘(C) renewable biomass; 

18 ‘‘(D) petroleum coke; or 

19 ‘‘(E) any fluorinated gas that is a green20 house gas purchased for use at that covered en21 tity, except for nitrogen trifluoride. 

22 ‘‘(2) FUEL PRODUCERS AND IMPORTERS.—For 

23 a covered entity described in section 700(14)(B), 1 

24 emission allowance for each ton of carbon dioxide 

25 equivalent of greenhouse gas that would be emitted 


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1 from the combustion of any petroleum-based or coal2 based liquid fuel, petroleum coke, or natural gas liq3 uid, produced or imported by such covered entity 

4 during the previous calendar year for sale or dis5 tribution in interstate commerce, assuming no cap6 ture and sequestration of any greenhouse gas emis7 sions. 

8 ‘‘(3) INDUSTRIAL GAS PRODUCERS AND IM9 PORTERS.—For a covered entity described in section 

10 700(14)(C), 1 emission allowance for each ton of 

11 carbon dioxide equivalent of fossil fuel-based carbon 

12 dioxide, nitrous oxide, or any other fluorinated gas 

13 that is a greenhouse gas (except for nitrogen 

14 trifluoride), or any combination thereof, produced or 

15 imported by such covered entity during the previous 

16 calendar year for sale or distribution in interstate 

17 commerce or released as fugitive emissions in the 

18 production of fluorinated gas. 

19 ‘‘(4) GEOLOGICAL SEQUESTRATION SITES.—For 

20 a covered entity described in section 700(14)(D), 1 

21 emission allowance for each ton of carbon dioxide 

22 equivalent of greenhouse gas that such covered enti23 ty emitted in the previous calendar year. 

24 ‘‘(5) INDUSTRIAL STATIONARY SOURCES.—For 

25 a covered entity described in section 700(14)(E), 


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1 (F), or (G), 1 emission allowance for each ton of 

2 carbon dioxide equivalent of greenhouse gas that 

3 such covered entity emitted in the previous calendar 

4 year, excluding emissions resulting from the combus5 tion of— 

6 ‘‘(A) petroleum-based or coal-based liquid 

7 fuel; 

8 ‘‘(B) natural gas liquid; 

9 ‘‘(C) renewable biomass; 

10 ‘‘(D) petroleum coke; or 

11 ‘‘(E) any fluorinated gas that is a green12 house gas purchased for use at that covered en13 tity, except for nitrogen trifluoride. 

14 ‘‘(6) INDUSTRIAL FOSSIL FUEL-FIRED COMBUS15 TION DEVICES.—For a covered entity described in 

16 section 700(14)(H), 1 emission allowance for each 

17 ton of carbon dioxide equivalent of greenhouse gas 

18 that the devices emitted in the previous calendar 

19 year, excluding emissions resulting from the combus20 tion of— 

21 ‘‘(A) petroleum-based or coal-based liquid 

22 fuel; 

23 ‘‘(B) natural gas liquid; 

24 ‘‘(C) renewable biomass; or 

25 ‘‘(D) petroleum coke. 


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1 ‘‘(7) NATURAL GAS LOCAL DISTRIBUTION COM2 PANIES.—For a covered entity described in section 

3 700(14)(I), 1 emission allowance for each ton of car4 bon dioxide equivalent of greenhouse gas that will be 

5 emitted from the combustion of the natural gas, and 

6 any other gas meeting the specifications for commin7 gling with natural gas for purposes of deliver, that 

8 such entity delivered during the previous calendar 

9 year to customers that are not covered entities, as10 suming no capture and sequestration of that green11 house gas. 

12 ‘‘(8) NITROGEN TRIFLUORIDE SOURCES.—For 

13 a covered entity described in section 700(14)(J), 1 

14 emission allowance for each ton of carbon dioxide 

15 equivalent of nitrogen trifluoride that such covered 

16 entity emitted in the previous calendar year. 

17 ‘‘(9) ALGAE-BASED FUELS.—Where carbon di18 oxide (or another greenhouse gas) is used as an 

19 input in the production of fuels, the Administrator 

20 shall ensure that allowances are not required to be 

21 held both for the carbon dioxide used to grow algae 

22 and for the carbon dioxide emitted from combustion 

23 of the fuel produced from such algae. 

24 ‘‘(10) FUGITIVE EMISSIONS.—The greenhouse 

25 gas emissions to which paragraphs (1), (5), (6), and 


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1 (8) apply shall not include fugitive emissions of 

2 greenhouse gas, except to the extent the Adminis3 trator determines that data on the carbon dioxide 

4 equivalent value of greenhouse gas in the fugitive 

5 emissions can be provided with sufficient precision, 

6 reliability, accessibility, and timeliness to ensure the 

7 integrity of emission allowances, the allowance track8 ing system, and the cap on emissions. 

9 ‘‘(11) EXPORT EXEMPTION.—This section shall 

10 not apply to any petroleum-based or coal-based liq11 uid fuel, petroleum coke, natural gas liquid, or 

12 fluorinated gas that is exported for any calendar 

13 year. 

14 ‘‘(12) NATURAL GAS LIQUIDS.—Notwith15 standing subsection (a), in the case where the owner 

16 or operator of a covered entity described in section 

17 700(14)(B) that produces natural gas liquids does 

18 not take ownership of the liquids, nor is responsible 

19 for the distribution or use of the liquids in com20 merce, the owner of the liquids shall be responsible 

21 for compliance under this section. In such a case, 

22 the owner of the covered entity shall provide the Ad23 ministrator, in a manner to be determined by the 

24 Administrator, information regarding the quantity 


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1 and ownership of liquids produced at the covered en2 tity. 

3 ‘‘(13) APPLICATION OF MULTIPLE PARA4 GRAPHS.—For a covered entity to which more than 

5 1 of paragraphs (1) through (8) apply, all applicable 

6 paragraphs shall apply, except that not more than 1 

7 emission allowance shall be required for the same 

8 emission. 

9 ‘‘(c) PHASE-IN OF PROHIBITION.— 

10 ‘‘(1) INDUSTRIAL STATIONARY SOURCES.—The 

11 prohibition under subsection (a) shall first apply to 

12 a covered entity described in section 700(14)(E), 

13 (F), (G), or (H) with respect to emissions occurring 

14 during calendar year 2014. 

15 ‘‘(2) NATURAL GAS LOCAL DISTRIBUTION COM16 PANIES.—The prohibition under subsection (a) shall 

17 first apply to a covered entity described in section 

18 700(14)(I) with respect to deliveries occurring dur19 ing calendar year 2016. 

20 ‘‘(d) ADDITIONAL METHODS.—In addition to using 

21 the method of compliance described in subsection (b), a 

22 covered entity may do the following: 

23 ‘‘(1) OFFSET CREDITS.— 

24 ‘‘(A) IN GENERAL.—Covered entities col25 lectively may, in accordance with this paraVerDate Nov 24 2008 02:36 May 16, 2009 Jkt 079200 PO 00000 Frm 00421 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 graph, use offset credits to demonstrate compli2 ance for up to a maximum of 2 billion tons of 

3 greenhouse gas emissions annually. The ability 

4 to demonstrate compliance with offset credits 

5 shall be divided pro rata among covered entities 

6 by allowing each covered entity to satisfy a per7 centage of the number of allowances required to 

8 be held under subsection (b) to demonstrate 

9 compliance by holding 1 domestic offset credit 

10 or 1.25 international offset credits in lieu of an 

11 emission allowance, except as provided in sub12 paragraph (D). 

13 ‘‘(B) APPLICABLE PERCENTAGE.—The 

14 percentage referred to in subparagraph (A) for 

15 a given calendar year shall be determined by di16 viding 2 billion by the sum of 2 billion plus the 

17 number of emission allowances established 

18 under section 721(a) for the previous year, and 

19 multiplying that number by 100. Not more than 

20 one half of the applicable percentage under this 

21 paragraph may be used for a year by holding 

22 domestic offset credits, and not more than one 

23 half of the applicable percentage under this 

24 paragraph may be used for a year by holding 


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1 international offset credits, except as provided 

2 in subparagraph (C). 

3 ‘‘(C) MODIFIED PERCENTAGES.—If the 

4 Administrator determines that domestic offset 

5 credits available for use in any calendar year at 

6 domestic offset prices generally equal to or less 

7 than allowance prices, are likely to offset less 

8 than 0.9 billion tons of greenhouse gas emis9 sions measured in tons of carbon dioxide 

10 equivalents, the Administrator shall increase 

11 the percent of emissions that can be offset 

12 through the use of international offset credits 

13 (and decrease the percent of emissions that can 

14 be allowed through the use of domestic offset 

15 credits by the same amount) to reflect the 

16 amount that 1.0 billion exceeds the number of 

17 domestic offset credits the Administrator deter18 mines is available for that year, up to a max19 imum of 0.5 billion emissions. 

20 ‘‘(D) INTERNATIONAL OFFSET CREDITS.— 

21 Notwithstanding subparagraph (A), to dem22 onstrate compliance prior to calendar year 

23 2018, a covered entity may use 1 international 

24 offset credit in lieu of an emission allowance up 

25 to the amount permitted under this paragraph. 


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1 ‘‘(E) PRESIDENT’S RECOMMENDATION.— 

2 The President may make a recommendation to 

3 Congress as to whether the number 2 billion 

4 specified in subparagraphs (A) and (B) should 

5 be increased or decreased. 

6 ‘‘(2) INTERNATIONAL EMISSION ALLOW7 ANCES.—To demonstrate compliance, a covered enti8 ty may hold an international emission allowance in 

9 lieu of an emission allowance, except as modified 

10 under section 728(d). 

11 ‘‘(3) COMPENSATORY ALLOWANCES.—To dem12 onstrate compliance, a covered entity may hold a 

13 compensatory allowance obtained under section 

14 721(f) in lieu of an emission allowance. 

15 ‘‘(d) RETIREMENT OF ALLOWANCES AND CRED16 ITS.—As soon as practicable after a deadline established 

17 for covered entities to demonstrate compliance with this 

18 title, the Administrator shall retire the quantity of allow19 ances or credits required to be held under this title. 

20 ‘‘(e) ALTERNATIVE METRICS.—For categories of cov21 ered entities described in subparagraph (B), (C), (F), (G), 

22 or (H) of section 700(14), the Administrator may, by rule, 

23 establish an applicability threshold for inclusion under 

24 those subparagraphs using an alternative metric and level, 

25 provided that such metric and level are easier to adminVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00424 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 ister and cover the same size and type of sources as the 

2 threshold defined in such subparagraphs. 

3 ‘‘(f) THRESHOLD REVIEW.—For each category of 

4 covered entities described in subparagraph (B), (C), (F), 

5 (G), or (H) of section 700(14), the Administrator shall, 

6 in 2020 and once every 8 years thereafter, review the car7 bon dioxide equivalent emission thresholds that are used 

8 to define covered entities. After consideration of— 

9 ‘‘(1) emissions from covered entities in each 

10 such category, and from other entities of the same 

11 type that emit less than the threshold amount for 

12 the category (including emission sources that com13 mence operation after the date of enactment of this 

14 title that are not covered entities); and 

15 ‘‘(2) whether greater greenhouse gas emission 

16 reductions can be cost-effectively achieved by low17 ering the applicable threshold, 

18 the Administrator may by rule lower such threshold to not 

19 less than 10,000 tons of carbon dioxide equivalent emis20 sions. In determining the cost effectiveness of potential re21 ductions from lowering the threshold for covered entities, 

22 the Administrator shall consider alternative regulatory 

23 greenhouse gas programs, including setting standards 

24 under other titles of this Act. 


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1 ‘‘(g) DESIGNATED REPRESENTATIVES.—The regula2 tions promulgated under section 721(g) shall require that 

3 each covered entity, and each entity holding allowances or 

4 credits or receiving allowances or credits from the Admin5 istrator under this title, select a designated representative. 

6 ‘‘(h) EDUCATION AND OUTREACH.— 

7 ‘‘(1) IN GENERAL.—The Administrator shall es8 tablish and carry out a program of education and 

9 outreach to assist covered entities, especially entities 

10 having little experience with environmental regu11 latory requirements similar or comparable to those 

12 under this title, in preparing to meet the compliance 

13 obligations of this title. Such program shall include 

14 education with respect to using markets to effec15 tively achieve such compliance. 

16 ‘‘(2) FAILURE TO RECEIVE INFORMATION.—A 

17 failure to receive information or assistance under 

18 this subsection may not be used as a defense against 

19 an allegation of any violation of this title. 

20 ‘‘(i) ADJUSTMENT OF DEADLINE.—The Adminis21 trator may, by rule, establish a deadline for demonstrating 

22 compliance, for a calendar year, later than the date pro23 vided in subsection (a), as necessary to ensure the avail24 ability of emissions data, but in no event shall the deadline 

25 be later than June 1. 


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1 ‘‘(j) NOTICE REQUIREMENT FOR COVERED ENTITIES

2 RECEIVING NATURAL GAS FROM NATURAL GAS LOCAL

3 DISTRIBUTION COMPANIES.—The owner or operator of a 

4 covered entity that takes delivery of natural gas from a 

5 natural gas local distribution company shall, not later 

6 than September 1 of each calendar year, notify such nat7 ural gas local distribution company in writing that such 

8 entity will qualify as a covered entity under this title for 

9 that calendar year. 

10 ‘‘(k) COMPLIANCE OBLIGATION.—For purposes of 

11 this title, the year of a compliance obligation is the year 

12 in which compliance is determined, not the year in which 

13 the greenhouse gas emissions occur or the covered entity 

14 has attributable greenhouse gas emissions. 

15 ‘‘SEC. 723. PENALTY FOR NONCOMPLIANCE. 

16 ‘‘(a) ENFORCEMENT.—A violation of any prohibition 

17 of, requirement of, or regulation promulgated pursuant to 

18 this title shall be a violation of this Act. It shall be a viola19 tion of this Act for a covered entity to emit greenhouse 

20 gases, and have attributable greenhouse gas emissions, in 

21 combination, in excess of its allowable emissions level as 

22 provided in section 722(a). Each ton of carbon dioxide 

23 equivalent for which a covered entity fails to demonstrate 

24 compliance under section 722(b) shall be a separate viola25 tion. 


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1 ‘‘(b) EXCESS EMISSIONS PENALTY.— 

2 ‘‘(1) IN GENERAL.—The owner or operator of 

3 any covered entity that fails for any year to comply, 

4 on the deadline described in section 722(a) or (i), 

5 shall be liable for payment to the Administrator of 

6 an excess emissions penalty in the amount described 

7 in paragraph (2). 

8 ‘‘(2) AMOUNT.—The amount of an excess emis9 sions penalty required to be paid under paragraph 

10 (1) shall be equal to the product obtained by multi11 plying— 

12 ‘‘(A) the tons of carbon dioxide equivalent 

13 for which the owner or operator of a covered 

14 entity failed to comply under section 722(b) on 

15 the deadline; by 

16 ‘‘(B) twice the fair market value of emis17 sion allowances established for emissions occur18 ring in the calendar year for which the emission 

19 allowances were due. 

20 ‘‘(3) TIMING.—An excess emissions penalty re21 quired under this subsection shall be immediately 

22 due and payable to the Administrator, without de23 mand, in accordance with regulations promulgated 

24 by the Administrator, which shall be issued not later 


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1 than 2 years after the date of enactment of this 

2 title. 

3 ‘‘(4) NO EFFECT ON LIABILITY.—An excess 

4 emissions penalty due and payable by the owners or 

5 operators of a covered entity under this subsection 

6 shall not diminish the liability of the owners or oper7 ators for any fine, penalty, or assessment against 

8 the owners or operators for the same violation under 

9 any other provision of this Act or any other law. 

10 ‘‘(c) EXCESS EMISSIONS ALLOWANCES.—The owner 

11 or operator of a covered entity that fails for any year to 

12 comply on the deadline described in section 722(a) or (i) 

13 shall be liable to offset the covered entity’s excess com14 bination of greenhouse gases emitted and attributable 

15 greenhouse gas emissions by an equal quantity of emission 

16 allowances during the following calendar year, or such 

17 longer period as the Administrator may prescribe. During 

18 the year in which the covered entity failed to comply, or 

19 any year thereafter, the Administrator may deduct the 

20 emission allowances required under this subsection to off21 set the covered entity’s excess actual or attributable emis22 sions. 

23 ‘‘SEC. 724. TRADING. 

24 ‘‘(a) PERMITTED TRANSACTIONS.—Except as other25 wise provided in this title, the lawful holder of an emission 


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1 allowance, compensatory allowance, or offset credit may, 

2 without restriction, sell, exchange, transfer, hold for com3 pliance in accordance with section 722, or request that the 

4 Administrator retire the emission allowance or offset cred5 it. 

6 ‘‘(b) NO RESTRICTION ON TRANSACTIONS.—The 

7 privilege of purchasing, holding, selling, exchanging, 

8 transferring, and requesting retirement of emission allow9 ances, compensatory allowances, or offset credits shall not 

10 be restricted to the owners and operators of covered enti11 ties, except as otherwise provided in this title. 

12 ‘‘(c) EFFECTIVENESS OF ALLOWANCE TRANS13 FERS.—No transfer of an emission allowance, compen14 satory allowance, or offset credit shall be effective for pur15 poses of this title until a certification of the transfer, 

16 signed by the designated representative of the transferor, 

17 is received and recorded by the Administrator in accord18 ance with regulations promulgated under section 721(g). 

19 ‘‘(d) ALLOWANCE TRACKING SYSTEM.—The regula20 tions promulgated under section 721(g) shall include a 

21 system for issuing, recording, holding, and tracking allow22 ances and offset credits that shall specify all necessary 

23 procedures and requirements for an orderly and competi24 tive functioning of the allowance and offset credit market. 


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1 Such regulations shall provide for appropriate publication 

2 of the information in the system on the Internet. 

3 ‘‘SEC. 725. BANKING AND BORROWING. 

4 ‘‘(a) BANKING.—An emission allowance may be used 

5 to comply with section 722 or section 723 for emissions 

6 in— 

7 ‘‘(1) the vintage year for the allowance; or 

8 ‘‘(2) any calendar year subsequent to the vin9 tage year for the allowance. 

10 ‘‘(b) EXPIRATION.— 

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

12 establish by regulation criteria and procedures for 

13 determining whether, and for implementing a deter14 mination that, the expiration of an allowance or 

15 credit established or issued by the Administrator 

16 under this title, or expiration of the ability to use an 

17 international emission allowance to comply with sec18 tion 722, is necessary to ensure the authenticity and 

19 integrity of allowances or credits or the allowance 

20 tracking system. 

21 ‘‘(2) GENERAL RULE.—An allowance or credit 

22 established or issued by the Administrator under 

23 this title shall not expire unless— 

24 ‘‘(A) it is retired by the Administrator as 

25 required under this title; or 


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1 ‘‘(B) it is determined to expire or to have 

2 expired by a specific date by the Administrator 

3 in accordance with regulations promulgated 

4 under paragraph (1). 

5 ‘‘(3) INTERNATIONAL EMISSION ALLOW6 ANCES.—The ability to use an international emission 

7 allowance to comply with section 722 shall not ex8 pire unless— 

9 ‘‘(A) the allowance is retired by the Ad10 ministrator as required by this title; or 

11 ‘‘(B) the ability to use such allowance to 

12 meet such compliance obligation requirements is 

13 determined to expire or to have expired by a 

14 specific date by the Administrator in accord15 ance with regulations promulgated under para16 graph (1). 

17 ‘‘(c) BORROWING FUTURE VINTAGE YEAR ALLOW18 ANCES.— 

19 ‘‘(1) BORROWING WITHOUT INTEREST.—In ad20 dition to the uses described in subsection (a), an 

21 emission allowance may be used to comply with sec22 tion 722(a) or section 723 for emissions, production, 

23 importation, manufacture, or deliveries in the cal24 endar year immediately preceding the vintage year 

25 for the allowance. 


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1 ‘‘(2) BORROWING WITH INTEREST.— 

2 ‘‘(A) IN GENERAL.—A covered entity may 

3 satisfy up to 15 percent of its compliance obli4 gations under section 722(a) in a specific cal5 endar year by holding emission allowances with 

6 a vintage year 1 to 5 years later than that cal7 endar year. 

8 ‘‘(B) LIMITATIONS.—An emission allow9 ance borrowed pursuant to this paragraph shall 

10 be an emission allowance established by the Ad11 ministrator for a specific future calendar year 

12 under section 721(a) and that is held by the 

13 borrower. 

14 ‘‘(C) REPAYMENT WITH INTEREST.—For 

15 each emission allowance that an owner or oper16 ator of a covered entity borrows pursuant to 

17 this paragraph, such owner or operator shall, at 

18 the time it borrows the allowance, hold for re19 tirement by the Administrator a quantity of 

20 emission allowances that is equal to the product 

21 obtained by multiplying— 

22 ‘‘(i) 0.08; by 

23 ‘‘(ii) the number of years between the 

24 calendar year in which the allowance is 


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1 being used to satisfy a compliance obliga2 tion and the vintage year of the allowance. 

3 ‘‘SEC. 726. STRATEGIC RESERVE. 

4 ‘‘(a) STRATEGIC RESERVE AUCTIONS.— 

5 ‘‘(1) IN GENERAL.—Once each quarter of each 

6 calendar year for which allowances are established 

7 under section 721(a), the Administrator shall auc8 tion strategic reserve allowances. 

9 ‘‘(2) RESTRICTION TO COVERED ENTITIES.—In 

10 each auction conducted under paragraph (1), only 

11 covered entities that the Administrator expects will 

12 be required to comply with section 722(a) in the fol13 lowing calendar year shall be eligible to make pur14 chases. 

15 ‘‘(b) POOL OF EMISSION ALLOWANCES FOR STRA16 TEGIC RESERVE AUCTIONS.— 

17 ‘‘(1) FILLING THE STRATEGIC RESERVE INI18 TIALLY.— 

19 ‘‘(A) IN GENERAL.—The Administrator 

20 shall, not later than 2 years after the date of 

21 enactment of this title, establish a strategic re22 serve account, and shall place in that account 

23 an amount of emission allowances established 

24 under section 721(a) for each calendar year 


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1 from 2012 through 2050 in the amounts speci2 fied in subparagraph (B) of this paragraph. 

3 ‘‘(B) AMOUNT.—The amount referred to in 

4 subparagraph (A) shall be— 

5 ‘‘(i) for each of calendar years 2012 

6 through 2019, 1 percent of the quantity of 

7 emission allowances established for that 

8 year pursuant to section 721(e)(1); 

9 ‘‘(ii) for each of calendar years 2020 

10 through 2029, 2 percent of the quantity of 

11 emission allowances established for that 

12 year pursuant to section 721(e)(1); and 

13 ‘‘(iii) for each of calendar years 2030 

14 through 2050, 3 percent of the quantity of 

15 emission allowances established for that 

16 year pursuant to section 721(e)(1). 

17 ‘‘(C) EFFECT ON OTHER PROVISIONS.— 

18 Any provision in this title (except for subpara19 graph (B) of this paragraph) that refers to a 

20 quantity or percentage of the emission allow21 ances established for a calendar year under sec22 tion 721(a) shall be considered to refer to the 

23 amount of emission allowances as determined 

24 pursuant to section 721(e), less any emission 

25 allowances established for that year that are 


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1 placed in the strategic reserve account under 

2 this paragraph. 

3 ‘‘(2) SUPPLEMENTING THE STRATEGIC RE4 SERVE.—The Administrator shall also— 

5 ‘‘(A) at the end of each calendar year, 

6 transfer to the strategic reserve account each 

7 emission allowance that was offered for sale but 

8 not sold at any auction conducted under part 

9 H; and 

10 ‘‘(B) transfer emission allowances estab11 lished under subsection (g) from auction pro12 ceeds, and deposit them into the strategic re13 serve, to the extent necessary to maintain the 

14 reserve at its original size. 

15 ‘‘(c) MINIMUM STRATEGIC RESERVE AUCTION

16 PRICE.— 

17 ‘‘(1) IN GENERAL.—At each strategic reserve 

18 auction, the Administrator shall offer emission al19 lowances for sale beginning at a minimum price per 

20 emission allowance, which shall be known as the 

21 ‘minimum strategic reserve auction price’. 

22 ‘‘(2) INITIAL MINIMUM STRATEGIC RESERVE

23 AUCTION PRICES.—The minimum strategic reserve 

24 auction price shall be øinsert amount twice the 

25 EPA-modeled 2012 allowance price EPA provides to 


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1 the Committee¿ for the strategic reserve auctions 

2 held in 2012. For the strategic reserve auctions held 

3 in 2013 and 2014, the minimum strategic reserve 

4 auction price shall be the strategic reserve auction 

5 price for the previous year increased by 5 percent 

6 plus the rate of inflation (as measured by the Con7 sumer Price Index for All Urban Consumers). 

8 ‘‘(3) MINIMUM STRATEGIC RESERVE AUCTION

9 PRICE IN SUBSEQUENT YEARS.—For each strategic 

10 reserve auction held in 2015 and each year there11 after, the minimum strategic reserve auction price 

12 shall be 60 percent above a rolling 36-month average 

13 of the daily closing price for that year’s emission al14 lowance vintage as reported on registered carbon 

15 trading facilities, calculated using constant dollars. 

16 ‘‘(d) QUANTITY OF EMISSION ALLOWANCES RE17 LEASED FROM THE STRATEGIC RESERVE.— 

18 ‘‘(1) INITIAL LIMITS.—For each of calendar 

19 years 2012 through 2016, the annual limit on the 

20 number of emission allowances from the strategic re21 serve account that may be auctioned is an amount 

22 equal to 5 percent of the emission allowances estab23 lished for that calendar year under section 721(a). 

24 This limit does not apply to international offset 


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1 credits sold on consignment pursuant to subsection 

2 (h). 

3 ‘‘(2) LIMITS IN SUBSEQUENT YEARS.—For cal4 endar year 2017 and each year thereafter, the an5 nual limit on the number of emission allowances 

6 from the strategic reserve account that may be auc7 tioned is an amount equal to 10 percent of the emis8 sion allowances established for that calendar year 

9 under section 721(a). This limit does not apply to 

10 international offset credits sold on consignment pur11 suant to subsection (h). 

12 ‘‘(3) ALLOCATION OF LIMITATION.—One-fourth 

13 of each year’s annual strategic reserve auction limit 

14 under this subsection shall be made available for 

15 auction in each quarter. Any allowances from the 

16 strategic reserve account that are made available for 

17 sale in a quarterly auction and not sold shall be 

18 rolled over and added to the quantity available for 

19 sale in the following quarter, except that allowances 

20 not sold at auction in the fourth quarter of a year 

21 shall not be rolled over to the following calendar 

22 year’s auctions, but shall be returned to the stra23 tegic reserve account. 

24 ‘‘(e) PURCHASE LIMIT.— 


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1 ‘‘(1) IN GENERAL.—Except as provided in para2 graph (2) or (3), the annual number of emission al3 lowances that a covered entity may purchase at the 

4 strategic reserve auctions in each calendar year shall 

5 not exceed 20 percent of the covered entity’s emis6 sions during the most recent year for which allow7 ances or credits were retired under section 722(a). 

8 ‘‘(2) 2012 LIMIT.—For calendar year 2012, the 

9 maximum aggregate number of emission allowances 

10 that a covered entity may purchase from that year’s 

11 strategic reserve auctions shall be 20 percent of the 

12 covered entity’s greenhouse gas emissions that the 

13 covered entity reported to the registry established 

14 under section 713 for 2011 and that would be sub15 ject to section 722(a) if occurring in later calendar 

16 years. 

17 ‘‘(3) NEW ENTRANTS.—The Administrator 

18 shall, by regulation, establish a separate limitation 

19 applicable to entities that expect to become a cov20 ered entity in the year of the auction, permitting 

21 them to purchase emission allowances at the stra22 tegic reserve auctions in their first calendar year of 

23 operation in an amount of at least 20 percent of 

24 their expected combined emissions and attributable 

25 greenhouse gas emissions for that year. 


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1 ‘‘(f) DELEGATION OR CONTRACT.—Pursuant to regu2 lations under this section, the Administrator may, by dele3 gation or contract, provide for the conduct of strategic re4 serve auctions under the Administrator’s supervision by 

5 other departments or agencies of the Federal Government 

6 or by nongovernmental agencies, groups, or organizations. 

7 ‘‘(g) USE OF AUCTION PROCEEDS.— 

8 ‘‘(1) DEPOSIT IN STRATEGIC RESERVE FUND.— 

9 The proceeds from strategic reserve auctions shall be 

10 placed in the Strategic Reserve Fund established 

11 under section 782(c), and shall be available without 

12 further appropriation or fiscal year limitation for the 

13 purposes described in this subsection. 

14 ‘‘(2) INTERNATIONAL OFFSET CREDITS FOR RE15 DUCED DEFORESTATION.—The Administrator shall 

16 use the proceeds from each strategic reserve auction 

17 to purchase international offset credits issued for re18 duced deforestation activities pursuant to section 

19 743(e). The Administrator shall retire those inter20 national offset credits and establish a number of 

21 emission allowances equal to 80 percent of the num22 ber of international offset credits so retired. Emis23 sion allowances established under this paragraph 

24 shall be in addition to those established under sec25 tion 721(a). 


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1 ‘‘(3) EMISSION ALLOWANCES.—The Adminis2 trator shall deposit emission allowances established 

3 under paragraph (2) in the strategic reserve, except 

4 that, with respect to any such emission allowances in 

5 excess of the amount necessary to fill the strategic 

6 reserve to its original size, the Administrator shall— 

7 ‘‘(A) except as provided in subparagraph 

8 (B), assign a vintage year to the emission al9 lowance, which shall be no earlier than the year 

10 in which the allowance is established under 

11 paragraph (2), and make the emission allow12 ances available for auction under section 791; 

13 and 

14 ‘‘(B) to the extent any such allowances 

15 cannot be assigned a vintage year because of 

16 the limitation in paragraph (4), retire the allow17 ances. 

18 ‘‘(4) LIMITATION.—In no case may the Admin19 istrator assign under paragraph (3)(A) more emis20 sion allowances to a vintage year than the number 

21 of emission allowances from that vintage year that 

22 were placed in the strategic reserve account under 

23 subsection (b)(1). 

24 ‘‘(h) AVAILABILITY OF INTERNATIONAL OFFSET

25 CREDITS FOR AUCTION.— 


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1 ‘‘(1) IN GENERAL.—The regulations promul2 gated under section 721(g) shall allow any entity 

3 holding international offset credits from reduced de4 forestation issued under section 743(e) to request 

5 that the Administrator include such offset credits in 

6 an upcoming strategic reserve auction. The regula7 tions shall provide that— 

8 ‘‘(A) such international offset credits will 

9 be used to fill bid orders only after the supply 

10 of strategic reserve allowances available for sale 

11 at that auction has been depleted; 

12 ‘‘(B) international offset credits may be 

13 sold at a strategic reserve auction under this 

14 subsection only if the Administrator determines 

15 that it is highly likely that covered entities will, 

16 to cover emissions occurring in the year the 

17 auction is held, use under section 722 offset 

18 credits in an amount equal to or greater than 

19 80 percent of 2 billion tons of carbon dioxide 

20 equivalent; 

21 ‘‘(C) upon sale of such international offset 

22 credits, the Administrator shall retire those 

23 international offset credits, and establish and 

24 provide to the purchasers a number of emission 

25 allowances equal to 80 percent of the number of 


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1 international offset credits so retired, which al2 lowances shall be in addition to those estab3 lished under section 721(a); and 

4 ‘‘(D) for international offset credits sold 

5 pursuant to this subsection, the proceeds for 

6 the entity that offered the international offset 

7 credits for sale shall be the lesser of— 

8 ‘‘(i) the average daily closing price for 

9 international offset credits sold on reg10 istered exchanges (or if such price is un11 available, the average price as determined 

12 by the Administrator) during the six 

13 months prior to the strategic reserve auc14 tion at which they were auctioned, with the 

15 remaining funds collected upon the sale of 

16 the international offset credits deposited in 

17 the Treasury; and 

18 ‘‘(ii) the amount received for the 

19 international offset credits at the auction. 

20 ‘‘(2) PROCEEDS.—For international offset cred21 its auctioned pursuant to this subsection, notwith22 standing section 3302 of title 31, United States 

23 Code, or any other provision of law, within 90 days 

24 of receipt, the United States shall transfer the pro25 ceeds from the auction, as defined in paragraph 


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1 (1)(D), to the entity which possessed the inter2 national offset credits auctioned. No funds trans3 ferred from a purchaser to a seller of international 

4 offset credits under this paragraph shall be held by 

5 any officer or employee of the United States or 

6 treated for any purpose as public monies. 

7 ‘‘(3) PRICING.—When the Administrator acts 

8 under this subsection as the agent of an entity in 

9 possession of international offset credits, the Admin10 istrator is not obligated to obtain the highest price 

11 possible for the international offset credits, and in12 stead shall auction such international offset credits 

13 in the same manner and pursuant to the same rules 

14 (except as modified in paragraph (1)) as set forth 

15 for auctioning strategic reserve allowances. Entities 

16 requesting that such international offset credits be 

17 offered for sale at a strategic reserve auction may 

18 not set a minimum reserve price for their inter19 national offset credits. 

20 ‘‘(i) INITIAL REGULATIONS.—Not later than 24 

21 months after the date of enactment of this title, the Ad22 ministrator shall promulgate regulations, in consultation 

23 with other appropriate agencies, governing the auction of 

24 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, 2012. 

5 ‘‘(2) AUCTION FORMAT.—Auctions shall follow 

6 a single-round, sealed-bid, uniform price format. 

7 ‘‘(3) PARTICIPATION; FINANCIAL ASSURANCE.— 

8 Auctions shall be open to any covered entity eligible 

9 to purchase emission allowances under subsection 

10 (a)(2), except that the Administrator may establish 

11 financial assurance requirements to ensure that auc12 tion participants can and will perform on their bids. 

13 ‘‘(4) DISCLOSURE OF BENEFICIAL OWNER14 SHIP.—Each bidder in an auction shall be required 

15 to disclose the person or entity sponsoring or bene16 fitting from the bidder’s participation in the auction 

17 if such person or entity is, in whole or in part, other 

18 than the bidder. 

19 ‘‘(5) PURCHASE LIMITS.—No person may, di20 rectly or in concert with another participant, pur21 chase more than 20 percent of the allowances of22 fered for sale at any quarterly auction. 

23 ‘‘(6) PUBLICATION OF INFORMATION.—After 

24 the auction, the Administrator shall, in a timely 

25 fashion, publish the identities of winning bidders, 


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1 the quantity of allowances obtained by each winning 

2 bidder, and the auction clearing price. 

3 ‘‘(7) OTHER REQUIREMENTS.—The Adminis4 trator may include in the regulations such other re5 quirements or provisions as the Administrator, in 

6 consultation with other agencies as appropriate, con7 siders appropriate to promote effective, efficient, 

8 transparent, and fair administration of auctions 

9 under this section. 

10 ‘‘(j) REVISION OF REGULATIONS.—The Adminis11 trator may, at any time, in consultation with other agen12 cies as appropriate, revise the initial regulations promul13 gated under subsection (i). Such revised regulations need 

14 not meet the requirements identified in subsection (i) if 

15 the Administrator determines that an alternative auction 

16 design would be more effective, taking into account factors 

17 including costs of administration, transparency, fairness, 

18 and risks of collusion or manipulation. In determining 

19 whether and how to revise the initial regulations under 

20 this subsection, the Administrator shall not consider maxi21 mization of revenues to the Federal Government. 

22 ‘‘SEC. 727. PERMITS. 

23 ‘‘(a) PERMIT PROGRAM.—For stationary sources 

24 subject to title V of this Act, the provisions of this title 

25 shall be implemented by permits issued to covered entities 


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1 (and enforced) in accordance with the provisions of title 

2 V, as modified by this title. Any such permit issued by 

3 the Administrator, or by a State with an approved permit 

4 program, shall require a covered entity to hold a number 

5 of emission allowances at least equal to the total annual 

6 amount of carbon dioxide equivalents for its combined 

7 emissions and attributable greenhouse gas emissions to 

8 which section 722 applies. No such permit shall be issued 

9 that is inconsistent with the requirements of this title, and 

10 title V as applicable. Nothing in this section regarding 

11 compliance plans or in title V shall be construed as affect12 ing emission allowances. Submission of a statement by the 

13 owner or operator, or the designated representative of the 

14 owners and operators, of a covered entity that the owners 

15 and operators will hold emission allowances not less than 

16 the total amount of carbon dioxide equivalents for a year 

17 for its combined emissions and attributable greenhouse 

18 gas emissions to which section 722 applies shall be deemed 

19 to meet the proposed and approved planning requirements 

20 of title V. Recordation by the Administrator of transfers 

21 of emission allowances shall amend automatically all appli22 cable proposed or approved permit applications, compli23 ance plans, and permits. 

24 ‘‘(b) MULTIPLE OWNERS.—No permit shall be issued 

25 under this section and no allowances or offset credits shall 


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1 be disbursed under this title to a covered entity or any 

2 other person until the designated representative of the 

3 owners or operators has filed a certificate of representa4 tion with regard to matters under this title, including the 

5 holding and distribution of emission allowances and the 

6 proceeds of transactions involving emission allowances. 

7 Where there are multiple holders of a legal or equitable 

8 title to, or a leasehold interest in, such a covered entity 

9 or other entity or where a utility or industrial customer 

10 purchases power from an independent power producer, the 

11 certificate shall state— 

12 ‘‘(1) that emission allowances and the proceeds 

13 of transactions involving emission allowances will be 

14 deemed to be held or distributed in proportion to 

15 each holder’s legal, equitable, leasehold, or contrac16 tual reservation or entitlement; or 

17 ‘‘(2) if such multiple holders have expressly pro18 vided for a different distribution of emission allow19 ances by contract, that emission allowances and the 

20 proceeds of transactions involving emission allow21 ances will be deemed to be held or distributed in ac22 cordance with the contract. 

23 A passive lessor, or a person who has an equitable interest 

24 through such lessor, whose rental payments are not based, 

25 either directly or indirectly, upon the revenues or income 


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1 from the covered entity or other person shall not be 

2 deemed to be a holder of a legal, equitable, leasehold, or 

3 contractual interest for the purpose of holding or distrib4 uting emission allowances as provided in this subsection, 

5 during either the term of such leasehold or thereafter, un6 less expressly provided for in the leasehold agreement. Ex7 cept as otherwise provided in this subsection, where all 

8 legal or equitable title to or interest in a covered entity, 

9 or other entity, is held by a single person, the certificate 

10 shall state that all emission allowances received by the en11 tity are deemed to be held for that person. 

12 ‘‘(c) PROHIBITION.—It shall be unlawful for any per13 son to operate any covered entity øthat is a stationary 

14 source subject to title V¿ except in compliance with the 

15 terms and requirements of a permit issued by the Admin16 istrator or a State with an approved permit program. For 

17 purposes of this subsection, compliance, as provided in 

18 section 504(f), with a permit issued under title V which 

19 complies with this title for covered entities shall be deemed 

20 compliance with this subsection as well as section 502(a). 

21 ‘‘SEC. 728. INTERNATIONAL EMISSION ALLOWANCES. 

22 ‘‘(a) QUALIFYING PROGRAMS.—The Administrator, 

23 in consultation with the Secretary of State, may by rule 

24 designate an international climate change program as a 

25 qualifying international program if— 


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1 ‘‘(1) the program is run by a national or supra2 national foreign government, and imposes a manda3 tory absolute tonnage limit on greenhouse gas emis4 sions from 1 or more foreign countries, or from 1 or 

5 more economic sectors in such a country or coun6 tries; and 

7 ‘‘(2) the program is at least as stringent as the 

8 program established by this title, including provi9 sions to ensure at least comparable monitoring, com10 pliance, enforcement, quality of offsets, and restric11 tions on the use of offsets. 

12 ‘‘(b) DISQUALIFIED ALLOWANCES.—An international 

13 emission allowance may not be held under section 

14 722(d)(2) if it is in the nature of an offset instrument 

15 or allowance awarded based on the achievement of green16 house gas emission reductions or avoidance, or greenhouse 

17 gas sequestration, that are not subject to the mandatory 

18 absolute tonnage limits referred to in subsection (a)(1). 

19 ‘‘(c) RETIREMENT.— 

20 ‘‘(1) ENTITY CERTIFICATION.—The owner or 

21 operator of an entity that holds an international 

22 emission allowance under section 722(d)(2) shall 

23 certify to the Administrator that such international 

24 emission allowance has not previously been used to 


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1 comply with any foreign, international, or domestic 

2 greenhouse gas regulatory program. 

3 ‘‘(2) RETIREMENT.— 

4 ‘‘(A) FOREIGN AND INTERNATIONAL REG5 ULATORY ENTITIES.—The Administrator, in 

6 consultation with the Secretary of State, shall 

7 seek, by whatever means appropriate, including 

8 agreements and technical cooperation on allow9 ance tracking, to ensure that any relevant for10 eign, international, and domestic regulatory en11 tities— 

12 ‘‘(i) are notified of the use, for pur13 poses of compliance with this title, of any 

14 international emission allowance; and 

15 ‘‘(ii) provide for the disqualification of 

16 such international emission allowance for 

17 any subsequent use under the relevant for18 eign, international, or domestic greenhouse 

19 gas regulatory program, regardless of 

20 whether such use is a sale, exchange, or 

21 submission to satisfy a compliance obliga22 tion. 

23 ‘‘(B) DISQUALIFICATION FROM FURTHER

24 USE.—The Administrator shall ensure that, 

25 once an international emission allowance has 


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1 been disqualified or otherwise used for purposes 

2 of compliance with this title, such allowance 

3 shall be disqualified from any further use under 

4 this title. 

5 ‘‘(d) USE LIMITATIONS.—The Administrator may, by 

6 rule, modify the percentage applicable to international 

7 emission allowances under section 722(d)(2), consistent 

8 with the purposes of the Safe Climate Act. 

9 ‘‘PART D—OFFSETS 

10 ‘‘SEC. 731. OFFSETS INTEGRITY ADVISORY BOARD. 

11 ‘‘(a) ESTABLISHMENT.—Not later than 30 days after 

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

13 establish an independent Offsets Integrity Advisory 

14 Board. The Advisory Board shall make recommendations 

15 to the Administrator for use in promulgating and revising 

16 regulations under this part and part E, and for ensuring 

17 the overall environmental integrity of the programs estab18 lished pursuant to those regulations. 

19 ‘‘(b) MEMBERSHIP.—The Advisory Board shall be 

20 comprised of at least nine members. Each member shall 

21 be qualified by education, training, and experience to 

22 evaluate scientific and technical information on matters 

23 referred to the Board under this section. The Adminis24 trator shall appoint Advisory Board members, including 

25 a chair and vice-chair of the Advisory Board. Terms shall 


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1 be 3 years in length, except for initial terms, which may 

2 be up to 5 years in length to allow staggering. Members 

3 may be reappointed only once for an additional 3-year 

4 term, and such second term may follow directly after a 

5 first term. 

6 ‘‘(c) ACTIVITIES.—The Advisory Board established 

7 pursuant to subsection (a) shall— 

8 ‘‘(1) provide recommendations, not later than 

9 90 days after the Advisory Board’s establishment 

10 and periodically thereafter, to the Administrator re11 garding offset project types that should be consid12 ered for eligibility under section 733, taking into 

13 consideration relevant scientific and other issues, in14 cluding— 

15 ‘‘(A) the availability of a representative 

16 data set for use in developing the activity base17 line; 

18 ‘‘(B) the potential for accurate quantifica19 tion of greenhouse gas reduction, avoidance, or 

20 sequestration for an offset project type; 

21 ‘‘(C) the potential level of scientific and 

22 measurement uncertainty associated with an 

23 offset project type; and 

24 ‘‘(D) any beneficial or adverse environ25 mental, public health, welfare, social, economic, 


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1 or energy effects associated with an offset 

2 project type; 

3 ‘‘(2) make available to the Administrator its ad4 vice and comments on offset methodologies that 

5 should be considered under regulations promulgated 

6 pursuant to section 734(a) and (b), including meth7 odologies to address the issues of additionality, ac8 tivity baselines, measurement, leakage, uncertainty, 

9 permanence, and environmental integrity; 

10 ‘‘(3) make available the Administrator, and 

11 other relevant Federal agencies, its advice and com12 ments regarding scientific, technical, and methodo13 logical issues specific to the issuance of international 

14 offset credits under section 743; 

15 ‘‘(4) make available to the Administrator, and 

16 other relevant Federal agencies, its advice and com17 ments regarding scientific, technical, and methodo18 logical issues associated with the implementation of 

19 part E; 

20 ‘‘(5) make available to the Administrator its ad21 vice and comments on areas in which further knowl22 edge is required to appraise the adequacy of exist23 ing, revised, or proposed methodologies for use 

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1 search efforts necessary to provide the required in2 formation; and 

3 ‘‘(6) make available to the Administrator its ad4 vice and comments on other ways to improve or 

5 safeguard the environmental integrity of programs 

6 established under this part and part E. 

7 ‘‘(d) SCIENTIFIC REVIEW OF OFFSET AND DEFOR8 ESTATION REDUCTION PROGRAMS.—Not later than Janu9 ary 1, 2017, and at five-year intervals thereafter, the Ad10 visory Board shall submit to the Administrator and make 

11 available to the public an analysis of relevant scientific and 

12 technical information related to this part and part E. The 

13 Advisory Board shall review approved and potential meth14 odologies, scientific studies, offset project monitoring, off15 set project verification reports, and audits related to this 

16 part and part E, and evaluate the net emissions effects 

17 of implemented offset projects. The Advisory Board shall 

18 recommend changes to offset methodologies, protocols, or 

19 project types, or to the overall offset program under this 

20 part, to ensure that offset credits issued by the Adminis21 trator do not compromise the integrity of the annual emis22 sion reductions established under section 703, and to 

23 avoid or minimize adverse effects to human health or the 

24 environment. 


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1 ‘‘SEC. 732. ESTABLISHMENT OF OFFSETS PROGRAM. 

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

3 the date of enactment of this title, the Administrator, in 

4 consultation with appropriate Federal agencies and taking 

5 into consideration the recommendations of the Advisory 

6 Board, shall promulgate regulations establishing a pro7 gram for the issuance of offset credits in accordance with 

8 the requirements of this part. The Administrator shall pe9 riodically revise these regulations as necessary to meet the 

10 requirements of this part. 

11 ‘‘(b) REQUIREMENTS.—The regulations described in 

12 subsection (a) shall— 

13 ‘‘(1) authorize the issuance of offset credits 

14 with respect to qualifying offset projects that result 

15 in reductions or avoidance of greenhouse gas emis16 sions, or sequestration of greenhouse gases; 

17 ‘‘(2) ensure that such offset credits represent 

18 verifiable and additional greenhouse gas emission re19 ductions or avoidance, or increases in sequestration; 

20 ‘‘(3) ensure that offset credits issued for se21 questration offset projects are only issued for green22 house gas reductions that are permanent; 

23 ‘‘(4) provide for the implementation of the re24 quirements of this part; and 


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1 ‘‘(5) include as reductions in greenhouse gases 

2 reductions achieved through the destruction of meth3 ane and its conversion to carbon dioxide. 

4 ‘‘(c) COORDINATION TO MINIMIZE NEGATIVE EF5 FECTS.—In promulgating and implementing regulations 

6 under this part, the Administrator shall act (including by 

7 rejecting projects, if necessary) to avoid or minimize, to 

8 the maximum extent practicable, adverse effects on human 

9 health or the environment resulting from the implementa10 tion of offset projects under this part. 

11 ‘‘(d) OFFSET REGISTRY.—The Administrator shall 

12 establish within the allowance tracking system established 

13 under section 724(d) an Offset Registry for qualifying off14 set projects and offset credits issued with respect thereto 

15 under this part. 

16 ‘‘(e) LEGAL STATUS OF OFFSET CREDIT.—An offset 

17 credit does not constitute a property right. 

18 ‘‘(f) FEES.—The Administrator shall assess fees pay19 able by offset project developer in an amount necessary 

20 to cover the administrative costs to the Environmental 

21 Protection Agency of carrying out the activities under this 

22 part. Amounts collected for such fees shall be available 

23 to the Administrator for carrying out the activities under 

24 this part to the extent provided in advance in appropria25 tions Acts. 


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1 ‘‘SEC. 733. ELIGIBLE PROJECT TYPES. 

2 ‘‘(a) LIST OF ELIGIBLE PROJECT TYPES.— 

3 ‘‘(1) IN GENERAL.—As part of the regulations 

4 promulgated under section 732(a), the Adminis5 trator shall establish, and may periodically revise, a 

6 list of types of projects eligible to generate offset 

7 credits, including international offset credits, under 

8 this part. 

9 ‘‘(2) ADVISORY BOARD RECOMMENDATIONS.— 

10 In determining the eligibility of project types, the 

11 Administrator shall take into consideration the rec12 ommendations of the Advisory Board. If a list estab13 lished under this section differs from the rec14 ommendations of the Advisory Board, the regula15 tions promulgated under section 732(a) shall include 

16 a justification for the discrepancy. 

17 ‘‘(3) INITIAL DETERMINATION.—The Adminis18 trator shall establish the initial eligibility list under 

19 paragraph (1) not later than one year after the date 

20 of enactment of this title. The Administrator shall 

21 add additional project types to the list not later than 

22 2 years after the date of enactment of this title. In 

23 determining the initial list, the Administrator shall 

24 give priority to consideration of offset project types 

25 that are recommended by the Advisory Board and 

26 for which there are well developed methodologies 


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1 that the Administrator determines would meet the 

2 criteria of section 734, with such modifications as 

3 the Administrator deems appropriate. In issuing 

4 methodologies pursuant to section 734, the Adminis5 trator shall give priority to methodologies for offset 

6 types included on the initial eligibility list. 

7 ‘‘(b) MODIFICATION OF LIST.—The Administrator— 

8 ‘‘(1) may at any time, by rule, add a project 

9 type to the list established under subsection (a) if 

10 the Administrator, in consultation with appropriate 

11 Federal agencies and taking into consideration the 

12 recommendations of the Advisory Board, determines 

13 that the project type can generate additional reduc14 tions or avoidance of greenhouse gas emissions, or 

15 sequestration of greenhouse gases, subject to the re16 quirements of this part; 

17 ‘‘(2) may at any time, by rule, determine that 

18 a project type on the list does not generate addi19 tional reductions or avoidance of greenhouse gas 

20 emissions, or sequestration of greenhouse gases, sub21 ject to the requirements of this part, and remove a 

22 project type from the list established under sub23 section (a), in consultation with appropriate Federal 

24 agencies and taking into consideration the rec25 ommendations of the Advisory 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 Adminis4 trator— 

5 ‘‘(A) by petition pursuant to subsection 

6 (c); or 

7 ‘‘(B) by the Advisory Board. 

8 ‘‘(c) PETITION PROCESS.—Any person may petition 

9 the Administrator to modify the list established under sub10 section (a) by adding or removing a project type pursuant 

11 to subsection (b). Any such petition shall include a show12 ing by the petitioner that there is adequate data to estab13 lish that the project type does or does not meet the re14 quirements of this part. Not later than 12 months after 

15 receipt of such a petition, the Administrator shall either 

16 grant or deny the petition and publish a written expla17 nation of the reasons for the Administrator’s decision. The 

18 Administrator may not deny a petition under this sub19 section on the basis of inadequate Environmental Protec20 tion Agency resources or time for review. 

21 ‘‘SEC. 734. REQUIREMENTS FOR OFFSET PROJECTS. 

22 ‘‘(a) METHODOLOGIES.—As part of the regulations 

23 promulgated under section 732(a), the Administrator shall 

24 establish, for each type of offset project listed as eligible 

25 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 

5 that type. Such methodology shall ensure, at a min6 imum, that any greenhouse gas emission reduction 

7 or avoidance, or any greenhouse gas sequestration, is 

8 considered additional only to the extent that it re9 sults from 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 Janu14 ary 1, 2009, except for offset project activities 

15 that commenced after January 1, 2001, and 

16 were registered as of the date of enactment of 

17 this title under an offset program with respect 

18 to which the Administrator has made an affirm19 ative determination under section 740(a)(2); 

20 ‘‘(C) are not receiving support under part 

21 E of this title or title IV, subtitle D of the 

22 American Clean Energy and Security Act of 

23 2009; and 

24 ‘‘(D) exceed the activity baseline estab25 lished under paragraph (2). 


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1 ‘‘(2) ACTIVITY BASELINES.—A standardized 

2 methodology for establishing activity baselines for 

3 offset projects of that type. The Administrator shall 

4 set activity baselines to reflect a conservative esti5 mate of business-as-usual performance or practices 

6 for the relevant type of activity such that the base7 line provides an adequate margin of safety to ensure 

8 the environmental integrity of offsets calculated in 

9 reference to such baseline. 

10 ‘‘(3) QUANTIFICATION METHODS.—A standard11 ized methodology for determining the extent to 

12 which greenhouse gas emission reductions or avoid13 ance, or greenhouse gas sequestration, achieved by 

14 an offset project of that type exceed a relevant activ15 ity baseline, including protocols for monitoring and 

16 accounting for uncertainty. 

17 ‘‘(4) LEAKAGE.—A standardized methodology 

18 for accounting for and mitigating potential leakage, 

19 if any, from an offset project of that type, taking 

20 uncertainty into account. 

21 ‘‘(b) ACCOUNTING FOR REVERSALS.— 

22 ‘‘(1) IN GENERAL.—For each type of sequestra23 tion project listed under section 733, the Adminis24 trator shall establish requirements to account for 

25 and address reversals, including— 


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1 ‘‘(A) a requirement to report any reversal 

2 with respect to an offset project for which offset 

3 credits have been issued under this part; 

4 ‘‘(B) provisions to require emission allow5 ances to be held in amounts to fully compensate 

6 for greenhouse gas emissions attributable to re7 versals, and to assign responsibility for holding 

8 such emission allowances; and 

9 ‘‘(C) any other provisions the Adminis10 trator determines necessary to account for and 

11 address reversals. 

12 ‘‘(2) MECHANISMS.—The Administrator shall 

13 prescribe mechanisms to ensure that any sequestra14 tion with respect to which an offset credit is issued 

15 under this part results in a permanent net increase 

16 in sequestration, and that full account is taken of 

17 any actual or potential reversal of such sequestra18 tion, with an adequate margin of safety. The Admin19 istrator shall prescribe at least one of the following 

20 mechanisms to meet the requirements of this para21 graph: 

22 ‘‘(A) An offsets reserve, pursuant to para23 graph (3). 

24 ‘‘(B) Insurance that provides for purchase 

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1 ment of an amount of offset credits or emission 

2 allowances equal in number to the tons of car3 bon dioxide equivalents of greenhouse gas emis4 sions released due to reversal. 

5 ‘‘(C) Another mechanism that the Admin6 istrator determines satisfies the requirements of 

7 this part. 

8 ‘‘(3) OFFSETS RESERVE.— 

9 ‘‘(A) IN GENERAL.—An offsets reserve re10 ferred to in paragraph (2)(A) is a program 

11 under which, before issuance of offset credits 

12 under this part, the Administrator shall sub13 tract and reserve from the quantity to be issued 

14 a quantity of offset credits based on the risk of 

15 reversal. The Administrator shall— 

16 ‘‘(i) hold these reserved offset credits 

17 in the offsets reserve; and 

18 ‘‘(ii) register the holding of the re19 served offset credits in the Offset Registry 

20 established under section 732(d). 

21 ‘‘(B) PROJECT REVERSAL.— 

22 ‘‘(i) IN GENERAL.—If a reversal has 

23 occurred with respect an offset project for 

24 which offset credits are reserved under this 

25 paragraph, the Administrator shall remove 


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1 offset credits from the offsets reserve and 

2 cancel them to fully account for the tons of 

3 carbon dioxide equivalent that are no 

4 longer sequestered. 

5 ‘‘(ii) INTENTIONAL REVERSALS.—If 

6 the Administrator determines that a rever7 sal was intentional, the offset project devel8 oper for the relevant offset project shall 

9 place into the offsets reserve a quantity of 

10 offset credits, or combination of offset 

11 credits and emission allowances, equal in 

12 number to the number of reserve offset 

13 credits that were canceled due to the rever14 sal pursuant to clause (i). 

15 ‘‘(iii) UNINTENTIONAL REVERSALS.— 

16 If the Administrator determines that a re17 versal was unintentional, the offset project 

18 developer for the relevant offset project 

19 shall place into the offsets reserve a quan20 tity of offset credits, or combination of off21 set credits and emission allowances, equal 

22 in number to half the number of offset 

23 credits that were reserved for that offset 

24 project, or half the number of reserve off25 set credits that were canceled due to the 


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1 reversal pursuant to clause (i), whichever 

2 is less. 

3 ‘‘(C) USE OF RESERVED OFFSET CRED4 ITS.—Offset credits placed into the offsets re5 serve under this paragraph may not be used to 

6 comply with section 722. 

7 ‘‘(c) CREDITING PERIODS.— 

8 ‘‘(1) IN GENERAL.—For each offset project 

9 type, the Administrator shall specify a crediting pe10 riod, and establish provisions for petitions for new 

11 crediting periods, in accordance with this subsection. 

12 ‘‘(2) DURATION.—The crediting period shall be 

13 no less than 5 and no greater than 10 years for any 

14 project type other than those involving sequestra15 tion. 

16 ‘‘(3) ELIGIBILITY.—An offset project shall be 

17 eligible to generate offset credits under this part 

18 only during the project’s crediting period. During 

19 such crediting period, the project shall remain eligi20 ble to generate offset credits, subject to the meth21 odologies and project type eligibility list that applied 

22 as of the date of project approval under section 735, 

23 except as provided in paragraph (4) of this sub24 section. 


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1 ‘‘(4) PETITION FOR NEW CREDITING PERIOD.— 

2 An offset project developer may petition for a new 

3 crediting period to commence after termination of a 

4 crediting period, subject to the methodologies and 

5 project type eligibility list in effect at the time when 

6 such petition is submitted. A petition may not be 

7 submitted under this paragraph more than 18 

8 months before the end of the pending crediting pe9 riod. The Administrator may limit the number of 

10 new crediting periods available for projects of par11 ticular project types. 

12 ‘‘(d) ENVIRONMENTAL INTEGRITY.—In establishing 

13 the requirements under this section, the Administrator 

14 shall apply conservative assumptions or methods to maxi15 mize the certainty that the environmental integrity of the 

16 cap established under section 703 is not compromised. 

17 ‘‘(e) PRE-EXISTING METHODOLOGIES.—In promul18 gating requirements under this section, the Administrator 

19 shall give due consideration to methodologies for offset 

20 projects existing as of the date of enactment of this title. 

21 ‘‘(f) ADDED PROJECT TYPES.—The Administrator 

22 shall establish methodologies described in subsection (a), 

23 and, as applicable, requirements and mechanisms for re24 versals as described in subsection (b), for any project type 

25 that is added to the list pursuant to section 733. 


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1 ‘‘SEC. 735. APPROVAL OF OFFSET PROJECTS. 

2 ‘‘(a) APPROVAL PETITION.—An offset project devel3 oper shall submit an offset project approval petition pro4 viding such information as the Administrator requires to 

5 determine whether the offset project is eligible for issuance 

6 of offset credits under rules promulgated pursuant to this 

7 part. 

8 ‘‘(b) TIMING.—An approval petition shall be sub9 mitted to the Administrator under subsection (a) no later 

10 than the time at which an offset project’s first verification 

11 report is submitted under section 736. 

12 ‘‘(c) APPROVAL PETITION REQUIREMENTS.—As part 

13 of the regulations promulgated under section 732, the Ad14 ministrator shall include provisions for, and shall specify, 

15 the required components of an offset project approval peti16 tion required under subsection (a), which shall include— 

17 ‘‘(1) designation of an offset project developer; 

18 and 

19 ‘‘(2) any other information that the Adminis20 trator considers to be necessary to achieve the pur21 poses of this part. 

22 ‘‘(d) APPROVAL AND NOTIFICATION.—Not later than 

23 90 days after receiving a complete approval petition under 

24 subsection (a), the Administrator shall approve or deny 

25 the petition in writing and, if the petition is denied, pro26 vide the reasons for denial. After an offset project is apVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00468 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 proved, the offset project developer shall not be required 

2 to resubmit an approval petition during the offset project’s 

3 crediting period, except as provided in section 734(c)(4). 

4 ‘‘(e) APPEAL.—The Administrator shall establish 

5 procedures for appeal and review of determinations made 

6 under subsection (d). 

7 ‘‘(f) VOLUNTARY PREAPPROVAL REVIEW.—The Ad8 ministrator may establish a voluntary preapproval review 

9 procedure, to allow an offset project developer to request 

10 the Administrator to conduct a preliminary eligibility re11 view for an offset project. Findings of such reviews shall 

12 not be binding upon the Administrator. The voluntary 

13 preapproval review procedure— 

14 ‘‘(1) shall require the offset project developer to 

15 submit such basic project information as the Admin16 istrator requires to provide a meaningful review; and 

17 ‘‘(2) shall require a response from the Adminis18 trator not later than 6 weeks after receiving a re19 quest for review under this subsection. 

20 ‘‘SEC. 736. VERIFICATION OF OFFSET PROJECTS. 

21 ‘‘(a) IN GENERAL.—As part of the regulations pro22 mulgated under section 732(a), the Administrator shall es23 tablish requirements, including protocols, for verification 

24 of the quantity of greenhouse gas emission reductions or 

25 avoidance, or sequestration of greenhouse gases, resulting 


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1 from an offset project. The regulations shall require that 

2 an offset project developer shall submit a report, prepared 

3 by a third-party verifier accredited under subsection (d), 

4 providing such information as the Administrator requires 

5 to determine the quantity of greenhouse gas emission re6 ductions or avoidance, or sequestration of greenhouse gas, 

7 resulting from the offset project. 

8 ‘‘(b) SCHEDULE.—The Administrator shall prescribe 

9 a schedule for the submission of verification reports under 

10 subsection (a). 

11 ‘‘(c) VERIFICATION REPORT REQUIREMENTS.—The 

12 Administrator shall specify the required components of a 

13 verification report required under subsection (a), which 

14 shall include— 

15 ‘‘(1) the name and contact information for a 

16 designated representative for the offset project devel17 oper; 

18 ‘‘(2) the quantity of greenhouse gas reduced, 

19 avoided, or sequestered; 

20 ‘‘(3) the methodologies applicable to the project 

21 pursuant to section 734; 

22 ‘‘(4) a certification that the project meets the 

23 applicable requirements; 

24 ‘‘(5) a certification establishing that the conflict 

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1 gated under subsection (d)(1) have been complied 

2 with; and 

3 ‘‘(6) any other information that the Adminis4 trator considers to be necessary to achieve the pur5 poses of this part. 

6 ‘‘(d) VERIFIER ACCREDITATION.— 

7 ‘‘(1) IN GENERAL.—As part of the regulations 

8 promulgated under section 732(a), the Adminis9 trator shall establish a process and requirements for 

10 periodic accreditation of third-party verifiers to en11 sure that such verifiers are professionally qualified 

12 and have no conflicts of interest. 

13 ‘‘(2) STANDARDS.— 

14 ‘‘(A) AMERICAN NATIONAL STANDARDS IN15 STITUTE ACCREDITATION.—The Administrator 

16 may accredit, or accept for purposes of accredi17 tation under this subsection, verifiers accredited 

18 under the American National Standards Insti19 tute (ANSI) accreditation program in accord20 ance with ISO 14065. The Administrator shall 

21 accredit, or accept for accreditation, verifiers 

22 under this subparagraph only if the Adminis23 trator finds that the American National Stand24 ards Institute accreditation program provides 


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1 sufficient assurance that the requirements of 

2 this part will be met. 

3 ‘‘(B) EPA ACCREDITATION.—As part of 

4 the regulations promulgated under section 

5 732(a), the Administrator may establish accred6 itation standards for verifiers under this sub7 section, and may establish related training and 

8 testing programs and requirements. 

9 ‘‘(3) PUBLIC ACCESSIBILITY.—Each verifier 

10 meeting the requirements for accreditation in ac11 cordance with this subsection shall be listed in a 

12 publicly accessible database, which shall be main13 tained and updated by the Administrator. 

14 ‘‘SEC. 737. ISSUANCE OF OFFSET CREDITS. 

15 ‘‘(a) DETERMINATION AND NOTIFICATION.—Not 

16 later than 90 days after receiving a complete verification 

17 report under section 736, the Administrator shall— 

18 ‘‘(1) make the report publicly available; 

19 ‘‘(2) make a determination of the quantity of 

20 greenhouse gas emissions reduced or avoided, or 

21 greenhouse gases sequestered, resulting from an off22 set project approved under section 735; and 

23 ‘‘(3) notify the offset project developer in writ24 ing of such determination. 


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1 ‘‘(b) ISSUANCE OF OFFSET CREDITS.—The Adminis2 trator shall issue one offset credit to an offset project de3 veloper for each ton of carbon dioxide equivalent that the 

4 Administrator has determined has been reduced, avoided, 

5 or sequestered during the period covered by a verification 

6 report submitted in accordance with section 736, only if— 

7 ‘‘(1) the Administrator has approved the offset 

8 project pursuant to section 735; and 

9 ‘‘(2) the relevant emissions reduction, avoid10 ance, or sequestration has already occurred, during 

11 the offset project’s crediting period. 

12 ‘‘(c) APPEAL.—The Administrator shall establish 

13 procedures for appeal and review of determinations made 

14 under subsection (a). 

15 ‘‘(d) TIMING.—Offset credits meeting the criteria es16 tablished in subsection (b) shall be issued not later than 

17 2 weeks following the verification determination made by 

18 the Administrator under subsection (a). 

19 ‘‘(e) REGISTRATION.—The Administrator shall as20 sign a unique serial number to and register each offset 

21 credit to be issued in the Offset Registry established under 

22 section 732(d). 

23 ‘‘SEC. 738. AUDITS. 

24 ‘‘(a) IN GENERAL.—The Administrator shall, on an 

25 ongoing basis, conduct random audits of offset projects, 


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1 offset credits, and practices of third-party verifiers. In 

2 each year, the Administrator shall conduct audits, at min3 imum, for a representative sample of project types and 

4 geographic areas. 

5 ‘‘(b) DELEGATION.—The Administrator may delegate 

6 to a State or tribal government the responsibility for con7 ducting audits under this section if the Administrator 

8 finds that the program proposed by the State or tribal 

9 government provides assurances equivalent to those pro10 vided by the auditing program of the Administrator, and 

11 that the integrity of the offset program under this part 

12 will be maintained. Nothing in this subsection shall pre13 vent the Administrator from conducting any audit the Ad14 ministrator considers necessary and appropriate. 

15 ‘‘SEC. 739. PROGRAM REVIEW AND REVISION. 

16 ‘‘At least once every 5 years, the Administrator shall 

17 review and, based on new or updated information and tak18 ing into consideration the recommendations of the Advi19 sory Board, update and revise— 

20 ‘‘(1) the list of eligible project types established 

21 under section 733; 

22 ‘‘(2) the methodologies established, including 

23 specific activity baselines, under section 734(a); 

24 ‘‘(3) the reversal requirements and mechanisms 

25 established or prescribed under section 734(b); 


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1 ‘‘(4) measures to improve the accountability of 

2 the offsets program; and 

3 ‘‘(5) any other requirements established under 

4 this part to ensure the environmental integrity and 

5 effective operation of this part. 

6 ‘‘SEC. 740. EARLY OFFSET SUPPLY. 

7 ‘‘(a) PROJECTS REGISTERED UNDER OTHER GOV8 ERNMENT-RECOGNIZED PROGRAMS.—Except as provided 

9 in subsection (b) or (c), the Administrator shall issue one 

10 offset credit for each ton of carbon dioxide equivalent 

11 emissions reduced, avoided, or sequestered— 

12 ‘‘(1) under an offset project that was started 

13 after January 1, 2001; 

14 ‘‘(2) for which a credit was issued under any 

15 regulatory or voluntary greenhouse gas emission off16 set program that the Administrator determines— 

17 ‘‘(A) was established under State or tribal 

18 law or regulation prior to January 1, 2009; 

19 ‘‘(B) has developed offset project type 

20 standards, methodologies, and protocols 

21 through a public consultation process or a peer 

22 review process; 

23 ‘‘(C) has made available to the public 

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1 ance, or sequestration are permanent, addi2 tional, verifiable, and enforceable; 

3 ‘‘(D) requires that all emission reductions, 

4 avoidance, or sequestration be verified by a 

5 State regulatory agency or an accredited third6 party independent verification body; 

7 ‘‘(E) requires that all credits issued are 

8 registered in a publicly accessible registry, with 

9 individual serial numbers assigned for each ton 

10 of carbon dioxide equivalent emission reduc11 tions, avoidance, or sequestration; and 

12 ‘‘(F) ensures that no credits are issued for 

13 activities for which the entity administering the 

14 program, or a program administrator or rep15 resentative, has funded, solicited, or served as a 

16 fund administrator for the development of, the 

17 project or activity that caused the emission re18 duction, avoidance, or sequestration; and 

19 ‘‘(3) for which the credit described in para20 graph (2) is transferred to the Administrator. 

21 ‘‘(b) INELIGIBLE CREDITS.—Subsection (a) shall not 

22 apply to offset credits that have expired or have been re23 tired, canceled, or used for compliance under a program 

24 established under State or tribal law or regulation. 


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1 ‘‘(c) LIMITATION.—Notwithstanding subsection 

2 (a)(1), offset credits shall be issued under this section— 

3 ‘‘(1) only for reductions or avoidance of green4 house gas emissions, or sequestration of greenhouse 

5 gases, that occur after January 1, 2009; and 

6 ‘‘(2) only until the date that is 3 years after the 

7 date of enactment of this title, or the date that regu8 lations promulgated under section 732(a) take ef9 fect, whichever occurs sooner. 

10 ‘‘(d) RETIREMENT OF CREDITS.—The Administrator 

11 shall seek to ensure that offset credits described in sub12 section (a)(2) are retired for purposes of use under a pro13 gram described in subsection (b). 

14 ‘‘(e) OTHER PROGRAMS.—(1) Offset programs that 

15 otherwise meet all of the criteria of subsection (a)(2), but 

16 do not meet one of the following criteria: 

17 ‘‘(A) were not established under State or tribal 

18 law; or 

19 ‘‘(B) were not established prior to January 1, 

20 2001. 

21 ‘‘(2) The Administrator shall approve any such pro22 gram that the Administrator determines has criteria and 

23 methodologies of at least equal stringency to the criteria 

24 and methodologies of the programs established under 

25 State or tribal law that the Administrator determines meet 


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1 the criteria of subsection (a)(2). The Administrator may 

2 approve types of offsets under any such program that are 

3 subject to criteria and methodologies of at least equal 

4 stringency to the criteria and methodologies for such types 

5 of offsets applied under the programs established under 

6 State or tribal law that the Administrator determines meet 

7 the criteria of subsection (a)(2). 

8 ‘‘SEC. 741. ENVIRONMENTAL CONSIDERATIONS. 

9 ‘‘If the Administrator lists forestry projects as eligible 

10 offset project types under section 733, the Administrator, 

11 in consultation with appropriate Federal agencies, shall 

12 promulgate regulations for the selection and use of tree 

13 species in forestry offset projects— 

14 ‘‘(1) to ensure that native species are given pri15 mary consideration in such projects; 

16 ‘‘(2) to enhance biological diversity in such 

17 projects; 

18 ‘‘(3) to prohibit the use of federally designated 

19 or State-designated noxious weeds; 

20 ‘‘(4) to prohibit the use of a species listed by 

21 a regional or State invasive plant authority within 

22 the applicable region or State; and 

23 ‘‘(5) in accordance with widely accepted, envi24 ronmentally sustainable forestry practices. 


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1 ‘‘SEC. 742. TRADING. 

2 ‘‘Section 724 shall apply to the trading of offset cred3 its. 

4 ‘‘SEC. 743. INTERNATIONAL OFFSET CREDITS. 

5 ‘‘(a) IN GENERAL.—The Administrator, in consulta6 tion with the Secretary of State and the Administrator 

7 of the United States Agency for International Develop8 ment, may issue, in accordance with this section, inter9 national offset credits based on activities that reduce or 

10 avoid greenhouse gas emissions, or increase sequestration 

11 of greenhouse gases, in a developing country. Such credits 

12 may be issued for projects pursuant to the requirements 

13 of this part or as provided in subsection (c), (d), or (e). 

14 ‘‘(b) ISSUANCE.— 

15 ‘‘(1) REGULATIONS.—Not later than 2 years 

16 after the date of enactment of this title, the Admin17 istrator, in consultation with the Secretary of State, 

18 the Administrator of the United States Agency for 

19 International Development, and any other appro20 priate Federal agency, and taking into consideration 

21 the recommendations of the Advisory Board, shall 

22 promulgate regulations for implementing this sec23 tion. Except as otherwise provided in this section, 

24 the issuance of international offset credits under this 

25 section shall be subject to the requirements of this 

26 part. 


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1 ‘‘(2) REQUIREMENTS FOR INTERNATIONAL

2 OFFSET CREDITS.—The Administrator may issue 

3 international offset credits only if— 

4 ‘‘(A) the United States is a party to a bi5 lateral or multilateral agreement or arrange6 ment that includes the country in which the 

7 project or measure achieving the relevant green8 house gas emission reduction or avoidance, or 

9 greenhouse gas sequestration, has occurred; 

10 ‘‘(B) such country is a developing country; 

11 and 

12 ‘‘(C) such agreement or arrangement— 

13 ‘‘(i) ensures that all of the require14 ments of this part apply to the issuance of 

15 international offset credits under this sec16 tion; and 

17 ‘‘(ii) provides for the appropriate dis18 tribution of international offset credits 

19 issued. 

20 ‘‘(c) SECTOR-BASED CREDITS.— 

21 ‘‘(1) IN GENERAL.—In order to minimize the 

22 potential for leakage and to encourage countries to 

23 take nationally appropriate mitigation actions to re24 duce or avoid greenhouse gas emissions, or sequester 


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1 greenhouse gases, the Administrator, in consultation 

2 with the Secretary of State, shall— 

3 ‘‘(A) identify sectors of specific countries 

4 with respect to which the issuance of inter5 national offset credits on a sectoral basis is ap6 propriate; and 

7 ‘‘(B) issue international offset credits for 

8 such sectors only on a sectoral basis. 

9 ‘‘(2) IDENTIFICATION OF SECTORS.— 

10 ‘‘(A) GENERAL RULE.—For purposes of 

11 paragraph (1)(A), a sectoral basis shall be ap12 propriate for activities— 

13 ‘‘(i) in countries that have compara14 tively high greenhouse gas emissions, or 

15 comparatively greater levels of economic 

16 development; and 

17 ‘‘(ii) that, if located in the United 

18 States, would be within a sector subject to 

19 the compliance obligation under section 

20 722. 

21 ‘‘(B) FACTORS.—In determining the sec22 tors and countries for which international offset 

23 credits should be awarded only on a sectoral 

24 basis, the Administrator, in consultation with 


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1 the Secretary of State, shall consider the fol2 lowing factors: 

3 ‘‘(i) The country’s gross domestic 

4 product. 

5 ‘‘(ii) The country’s total greenhouse 

6 gas emissions. 

7 ‘‘(iii) Whether the comparable sector 

8 of the United States economy is covered by 

9 the compliance obligation under section 

10 722. 

11 ‘‘(iv) The heterogeneity or homo12 geneity of sources within the relevant sec13 tor. 

14 ‘‘(v) Whether the relevant sector pro15 vides products or services that are sold in 

16 internationally competitive markets. 

17 ‘‘(vi) The risk of leakage if inter18 national offset credits were issued on a 

19 project-level basis, instead of on a sectoral 

20 basis, for activities within the relevant sec21 tor. 

22 ‘‘(vii) The capability of accurately 

23 measuring, monitoring, reporting, and 

24 verifying the performance of sources across 

25 the relevant sector. 


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1 ‘‘(viii) Such other factors as the Ad2 ministrator, in consultation with the Sec3 retary of State, determines are appropriate 

4 to— 

5 ‘‘(I) ensure the integrity of the 

6 United States greenhouse gas emis7 sions cap established under section 

8 703; and 

9 ‘‘(II) encourage countries to take 

10 nationally appropriate mitigation ac11 tions to reduce or avoid greenhouse 

12 gas emissions, or sequester green13 house gases. 

14 ‘‘(3) SECTORAL BASIS.— 

15 ‘‘(A) DEFINITION.—In this subsection, the 

16 term ‘sectoral basis’ means the issuance inter17 national offset credits only for the quantity of 

18 sector-wide reductions or avoidance of green19 house gas emissions, or sector-wide increases in 

20 sequestration of greenhouse gases, achieved 

21 across the relevant sector of the economy rel22 ative to a baseline level of performance estab23 lished in an agreement or arrangement de24 scribed in subsection (b)(2)(A) for the sector. 


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1 ‘‘(B) BASELINE.—The baseline for a sec2 tor shall be established at levels of greenhouse 

3 gas emissions lower than would occur under a 

4 business-as-usual scenario taking into account 

5 relevant domestic or international policies or in6 centives to reduce greenhouse gas emissions, 

7 among other factors, and additionality and per8 formance shall be determined on the basis of 

9 such baseline. 

10 ‘‘(d) CREDITS ISSUED BY AN INTERNATIONAL

11 BODY.— 

12 ‘‘(1) IN GENERAL.—The Administrator, in con13 sultation with the Secretary of State, may issue 

14 international offset credits in exchange for instru15 ments in the nature of offset credits that are issued 

16 by an international body established pursuant to the 

17 United Nations Framework Convention on Climate 

18 Change, to a protocol to such Convention, or to a 

19 treaty that succeeds such Convention. The Adminis20 trator may issue international offset credits under 

21 this subsection only if, in addition to the require22 ments of subsection (b), the Administrator has de23 termined that the international body that issued the 

24 instruments has implemented substantive and proce25 dural requirements for the relevant project type that 


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1 provide equal or greater assurance of the integrity of 

2 such instruments as is provided by the requirements 

3 of this part. 

4 ‘‘(2) RETIREMENT.—The Administrator, in 

5 consultation with the Secretary of State, shall seek, 

6 by whatever means appropriate, including agree7 ments, arrangements, or technical cooperation with 

8 the international issuing body described in para9 graph (1), to ensure that such body— 

10 ‘‘(A) is notified of the Administrator’s 

11 issuance, under this subsection, of an inter12 national offset credit in exchange for an instru13 ment issued by such international body; and 

14 ‘‘(B) provides, to the extent feasible, for 

15 the disqualification of the instrument issued by 

16 such international body for subsequent use 

17 under any relevant foreign or international 

18 greenhouse gas regulatory program, regardless 

19 of whether such use is a sale, exchange, or sub20 mission to satisfy a compliance obligation. 

21 ‘‘(e) OFFSETS FROM REDUCED DEFORESTATION.— 

22 ‘‘(1) REQUIREMENTS.—The Administrator, in 

23 accordance with the regulations promulgated under 

24 subsection (b)(1) and an agreement or arrangement 

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1 national offset credits for greenhouse gas emission 

2 reductions achieved through activities to reduce de3 forestation only if, in addition to the requirements of 

4 subsection (b)— 

5 ‘‘(A) the activity occurs in— 

6 ‘‘(i) a country listed by the Adminis7 trator pursuant to paragraph (2); 

8 ‘‘(ii) a state or province listed by the 

9 Administrator pursuant to paragraph (5); 

10 or 

11 ‘‘(iii) a country listed by the Adminis12 trator pursuant to paragraph (6); 

13 ‘‘(B) except as provided in paragraph (5) 

14 or (6), the quantity of the international offset 

15 credits is determined by comparing the national 

16 emissions from deforestation relative to a na17 tional deforestation baseline for that country es18 tablished, in accordance with an agreement or 

19 arrangement described in subsection (b)(2)(A), 

20 pursuant to paragraph (4); 

21 ‘‘(C) the reduction in emissions from de22 forestation has occurred before the issuance of 

23 the international offset credit and, taking into 

24 consideration relevant international standards, 

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1 ventories, remote sensing technology, and other 

2 methodologies to ensure that all relevant carbon 

3 stocks are accounted; 

4 ‘‘(D) the Administrator has made appro5 priate adjustments, such as discounting for any 

6 additional uncertainty, to account for cir7 cumstances specific to the country, including its 

8 technical capacity described in paragraph 

9 (2)(A); 

10 ‘‘(E) the activity is designed, carried out, 

11 and managed— 

12 ‘‘(i) in accordance with widely accept13 ed, environmentally sustainable forest 

14 management practices; 

15 ‘‘(ii) to promote or restore native for16 est species and ecosystems where prac17 ticable, and to avoid the introduction of 

18 invasive nonnative species; 

19 ‘‘(iii) in a manner that gives due re20 gard to the rights and interests of forest21 dependent communities, indigenous peo22 ples, and vulnerable social groups; 

23 ‘‘(iv) with consultations with, and full 

24 participation of, forest-dependent commu25 nities and indigenous peoples in affected 


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1 areas, as partners and primary stake2 holders, prior to and during the design, 

3 planning, implementation, and monitoring 

4 and evaluation of activities; and 

5 ‘‘(v) with equitable sharing of profits 

6 and benefits derived from offset credits 

7 with forest-dependent communities and in8 digenous peoples; and 

9 ‘‘(F) the reduction otherwise satisfies and 

10 is consistent with any relevant requirements es11 tablished by an agreement reached under the 

12 auspices of the United Nations Framework 

13 Convention on Climate Change. 

14 ‘‘(2) ELIGIBLE COUNTRIES.—The Adminis15 trator, in consultation with the Secretary of State 

16 and the Administrator of the United States Agency 

17 for International Development, and in accordance 

18 with an agreement or arrangement described in sub19 section (b)(2)(A), shall establish, and periodically re20 view and update, a list of the developing countries 

21 that have the capacity to participate in deforestation 

22 reduction activities at a national level, including— 

23 ‘‘(A) the technical capacity to monitor, 

24 measure, report, and verify forest carbon fluxes 

25 for all significant sources of greenhouse gas 


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1 emissions from deforestation with an acceptable 

2 level of uncertainty, as determined taking into 

3 account relevant international standards, such 

4 as those established by the Intergovernmental 

5 Panel on Climate Change; 

6 ‘‘(B) the institutional capacity to reduce 

7 emissions from deforestation, including strong 

8 forest governance and mechanisms to equitably 

9 distribute deforestation resources for local ac10 tions; and 

11 ‘‘(C) a land use or forest sector strategic 

12 plan that— 

13 ‘‘(i) assesses national and local drivers 

14 of deforestation and forest degradation and 

15 identifies reforms to national policies need16 ed to address them; 

17 ‘‘(ii) estimates the country’s emissions 

18 from deforestation and forest degradation; 

19 ‘‘(iii) identifies improvements in data 

20 collection, monitoring, and institutional ca21 pacity necessary to implement a national 

22 deforestation reduction program; and 

23 ‘‘(iv) establishes a timeline for imple24 menting the program and transitioning to 

25 low-emissions development. 


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1 ‘‘(3) PROTECTION OF INTERESTS.—With re2 spect to an agreement or arrangement described in 

3 subsection (b)(2)(A) with a country that addresses 

4 international offset credits under this subsection, the 

5 Administrator, in consultation with the Secretary of 

6 State and the Administrator of the United States 

7 Agency for International Development, shall seek to 

8 ensure the establishment and enforcement by such 

9 country of legal regimes, standards, and safeguards 

10 that— 

11 ‘‘(A) give due regard to the rights and in12 terests of forest-dependent communities, indige13 nous peoples, and vulnerable social groups; 

14 ‘‘(B) promote consultations with, and full 

15 participation of, forest-dependent communities 

16 and indigenous peoples in affected areas, as 

17 partners and primary stakeholders, prior to and 

18 during the design, planning, implementation, 

19 and monitoring and evaluation of activities; and 

20 ‘‘(C) facilitate sharing of profits and bene21 fits derived from international offset credits 

22 with forest-dependent communities and indige23 nous peoples. 


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1 ‘‘(4) NATIONAL DEFORESTATION BASELINE.—A 

2 national deforestation baseline established under this 

3 subsection shall— 

4 ‘‘(A) be national in scope; 

5 ‘‘(B) be consistent with nationally appro6 priate mitigation commitments or actions with 

7 respect to deforestation, taking into consider8 ation the average annual historical deforestation 

9 rates of the country during a period of at least 

10 5 years, the applicable drivers of deforestation, 

11 and other factors to ensure additionality; 

12 ‘‘(C) establish a trajectory that would re13 sult in zero net deforestation by not later than 

14 20 years after the national deforestation base15 line has been established; 

16 ‘‘(D) be adjusted over time to take account 

17 of changing national circumstances; 

18 ‘‘(E) be designed to account for all signifi19 cant sources of greenhouse gas emissions from 

20 deforestation in the country; and 

21 ‘‘(F) be consistent with the national defor22 estation baseline, if any, established for such 

23 country under section 754(d)(1). 

24 ‘‘(5) STATE-LEVEL OR PROVINCE-LEVEL AC25 TIVITIES.— 


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1 ‘‘(A) ELIGIBLE STATES OR PROVINCES.— 

2 The Administrator, in consultation with the 

3 Secretary of State and the Administrator of the 

4 United States Agency for International Devel5 opment, shall establish, and periodically review 

6 and update, a list of states or provinces in de7 veloping countries where— 

8 ‘‘(i) the developing country is not in9 cluded on the list of countries established 

10 pursuant to paragraph (6)(A); 

11 ‘‘(ii) the state or province by itself is 

12 a major emitter of greenhouse gases from 

13 tropical deforestation on a scale commen14 surate to the emissions of other countries; 

15 and 

16 ‘‘(iii) the state or province meets the 

17 eligibility criteria in paragraphs (2) and 

18 (3) for the geographic area under its juris19 diction. 

20 ‘‘(B) ACTIVITIES.—The Administrator may 

21 issue international offset credits for greenhouse 

22 gas emission reductions achieved through activi23 ties to reduce deforestation at a state or provin24 cial level that meet the requirements of this sec25 tion. Such credits shall be determined by comVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00492 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 paring the emissions from deforestation within 

2 that state or province relative to the state or 

3 province deforestation baseline for that state or 

4 province established, in accordance with an 

5 agreement or arrangement described in sub6 section (b)(2)(A), pursuant to subparagraph 

7 (C) of this paragraph. 

8 ‘‘(C) STATE-LEVEL OR PROVINCE-LEVEL

9 DEFORESTATION BASELINE.—A state-level or 

10 province-level deforestation baseline shall— 

11 ‘‘(i) be consistent with any existing 

12 nationally appropriate mitigation commit13 ments or actions for the country in which 

14 the activity is occurring, taking into con15 sideration the average annual historical de16 forestation rates of the state or province 

17 during a period of at least 5 years, rel18 evant drivers of deforestation, and other 

19 factors to ensure additionality; 

20 ‘‘(ii) establish a trajectory that would 

21 result in zero net deforestation by not later 

22 than 20 years after the state-level or prov23 ince-level deforestation baseline has been 

24 established; and 


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1 ‘‘(iii) be designed to account for all 

2 significant sources of greenhouse gas emis3 sions from deforestation in the state or 

4 province and adjusted to fully account for 

5 emissions leakage outside the state or 

6 province. 

7 ‘‘(D) PHASE OUT.—Beginning in 2017, the 

8 Administrator shall issue no further inter9 national offset credits for eligible state-level or 

10 province-level activities to reduce deforestation 

11 pursuant to this paragraph. 

12 ‘‘(6) PROJECTS AND PROGRAMS TO REDUCE

13 DEFORESTATION.— 

14 ‘‘(A) ELIGIBLE COUNTRIES.—The Admin15 istrator, in consultation with the Secretary of 

16 State and the Administrator of the United 

17 States Agency for International Development, 

18 shall establish, and periodically review and up19 date, a list of developing countries that— 

20 ‘‘(i) the Administrator determines, 

21 based on recent, credible, and reliable 

22 emissions data, account for less than 1 

23 percent of global greenhouse gas emissions 

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1 sector and land use change greenhouse gas 

2 emissions; and 

3 ‘‘(ii) have, or in the determination of 

4 the Administrator are making a good faith 

5 effort to develop, a land use or forest sec6 tor strategic plan that meets the criteria 

7 described in paragraph (2)(C). 

8 ‘‘(B) ACTIVITIES.—The Administrator may 

9 issue international offset credits for greenhouse 

10 gas emission reductions achieved through 

11 project or program level activities to reduce de12 forestation in countries listed under subpara13 graph (A) that meet the requirements of this 

14 section. The quantity of international offset 

15 credits shall be determined by comparing the 

16 project-level or program-level emissions from 

17 deforestation to a deforestation baseline for 

18 such project or program established pursuant to 

19 subparagraph (C). 

20 ‘‘(C) PROJECT-LEVEL OR PROGRAM-LEVEL

21 BASELINE.— 

22 ‘‘(i) A project-level or program-level 

23 deforestation baseline shall— 

24 ‘‘(I) be consistent with any exist25 ing nationally appropriate mitigation 


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1 commitments or actions for the coun2 try in which the project or program is 

3 occurring, taking into consideration 

4 the average annual historical deforest5 ation rates in the project or program 

6 boundary during a period of at least 

7 5 years, applicable drivers of deforest8 ation, and other factors to ensure 

9 additionality; 

10 ‘‘(II) be designed to account for 

11 all significant sources of greenhouse 

12 gas emissions from deforestation in 

13 the project or program boundary; and 

14 ‘‘(III) be adjusted to fully ac15 count for emissions leakage outside 

16 the project or program boundary. 

17 ‘‘(D) PHASE OUT.—(i) Beginning in 2017, 

18 the Administrator shall issue no further inter19 national offset credits for project-level or pro20 gram-level activities as described in this para21 graph, except as provided in clause (ii). 

22 ‘‘(ii) The Administrator may extend the 

23 phase out deadline for the issuance of inter24 national offset credits under this section to no 

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1 ties taking place in a least developed nation, 

2 which is a foreign country that the United Na3 tions has identified as among the least devel4 oped of developing countries at the time that 

5 the Administrator determines to provide an ex6 tension, provided that the Administrator, in 

7 consultation with the Secretary of State and the 

8 Administrator of the United States Agency for 

9 International Development, determines the na10 tion— 

11 ‘‘(I) lacks sufficient capacity to adopt 

12 and implement effective programs to 

13 achieve reductions in deforestation meas14 ured against national baselines; 

15 ‘‘(II) is receiving support under part 

16 E to develop such capacity; and 

17 ‘‘(III) has developed and is working 

18 towards implementation of a credible na19 tional strategy or plan to reduce deforest20 ation. 

21 ‘‘(7) DEFORESTATION.—In implementing this 

22 subsection, the Administrator, taking into consider23 ation the recommendations of the Advisory Board, 

24 may include forest degradation, or soil carbon losses 


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1 associated with forested wetlands or peatlands, with2 in the meaning of deforestation. 

3 ‘‘(f) MODIFICATION OF REQUIREMENTS.—In promul4 gating regulations under subsection (b)(1) with respect to 

5 the issuance of international offset credits under sub6 section (c), (d), or (e), the Administrator may modify or 

7 omit a requirement of this part (excluding the require8 ments of this section) if the Administrator determines that 

9 the application of that requirement to this subsection is 

10 not feasible. In modifying or omitting such a requirement 

11 on the basis of infeasibility, the Administrator shall en12 sure, with an adequate margin of safety, the integrity of 

13 international offset credits issued under this section and 

14 of the greenhouse gas emissions cap established pursuant 

15 to section 703. 

16 ‘‘(g) AVOIDING DOUBLE COUNTING.—The Adminis17 trator, in consultation with the Secretary of State, shall 

18 seek, by whatever means appropriate, including agree19 ments, arrangements, or technical cooperation, to ensure 

20 that activities on the basis of which international offset 

21 credits are issued under this section are not used for com22 pliance with an obligation to reduce or avoid greenhouse 

23 gas emissions, or increase greenhouse gas sequestration, 

24 under a foreign or international regulatory system. In ad25 dition, no international offset credits shall be issued for 


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1 emission reductions from activities with respect to which 

2 emission allowances were allocated under section 781 for 

3 distribution under part E. 

4 ‘‘(h) LIMITATION.—The Administrator shall not issue 

5 international offset credits generated by products based 

6 on the destruction of hydrofluorocarbons. 

7 ‘‘PART E—SUPPLEMENTAL EMISSIONS 

8 REDUCTIONS FROM REDUCED DEFORESTATION 

9 ‘‘SEC. 751. DEFINITIONS. 

10 ‘‘In this part: 

11 ‘‘(1) LEAKAGE PREVENTION ACTIVITIES.—The 

12 term ‘leakage prevention activities’ means activities 

13 in developing countries that are directed at pre14 serving existing forest carbon stocks, including for15 ested wetlands and peatlands, that might, absent 

16 such activities, be lost through leakage. 

17 ‘‘(2) NATIONAL DEFORESTATION REDUCTION

18 ACTIVITIES.—The term ‘national deforestation re19 duction activities’ means activities in developing 

20 countries that reduce a quantity of greenhouse gas 

21 emissions from deforestation that is calculated by 

22 measuring actual emissions against a national defor23 estation baseline established pursuant to section 

24 754(d)(1) and (2). 


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1 ‘‘(3) SUBNATIONAL DEFORESTATION REDUC2 TION ACTIVITIES.—The term ‘subnational deforest3 ation reduction activities’ means activities in devel4 oping countries that reduce a quantity of greenhouse 

5 gas emissions from deforestation that are calculated 

6 by measuring actual emissions using an appropriate 

7 baseline established by the Administrator that is less 

8 than national in scope. 

9 ‘‘(4) SUPPLEMENTAL EMISSIONS REDUC10 TIONS.—The term ‘supplemental emissions reduc11 tions’ means greenhouse gas emissions reductions 

12 achieved from reduced or avoided deforestation 

13 under this part. 

14 ‘‘(5) USAID.—The term ‘USAID’ means the 

15 United States Agency for International Develop16 ment. 

17 ‘‘SEC. 752. FINDINGS. 

18 ‘‘Congress finds that— 

19 ‘‘(1) as part of a global effort to mitigate cli20 mate change, it is in the national interest of the 

21 United States to assist developing countries to re22 duce and ultimately halt emissions from deforest23 ation; 

24 ‘‘(2) deforestation is one of the largest sources 

25 of greenhouse gas emissions in developing countries, 


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1 amounting to roughly 20 percent of overall emissions 

2 globally; 

3 ‘‘(3) recent scientific analysis shows that it will 

4 be substantially more difficult to limit the increase 

5 in global temperatures to less than 2 degrees centi6 grade above preindustrial levels without reducing 

7 and ultimately halting net emissions from deforest8 ation; 

9 ‘‘(4) reducing emissions from deforestation is 

10 highly cost-effective, compared to many other 

11 sources of emissions reductions; 

12 ‘‘(5) in addition to contributing significantly to 

13 worldwide efforts to address global warming, this as14 sistance will generate significant environmental and 

15 social cobenefits, including protection of biodiversity, 

16 ecosystem services, and forest-related livelihoods; 

17 and 

18 ‘‘(6) Under the Bali Action Plan, developed 

19 country parties to the United Nations Framework 

20 Convention on Climate Change, including the United 

21 States, committed to ‘enhanced action on the provi22 sion of financial resources and investment to support 

23 action on mitigation and adaptation and technology 

24 cooperation,’ including, inter alia, consideration of 

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1 tainable financial resources and financial and tech2 nical support, and the provision of new and addi3 tional resources, including official and concessional 

4 funding for developing country parties. 

5 ‘‘SEC. 753. SUPPLEMENTAL EMISSIONS REDUCTIONS 

6 THROUGH REDUCED DEFORESTATION. 

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

8 the date of enactment of this title, the Administrator, in 

9 consultation with the Administrator of USAID and any 

10 other appropriate agencies, shall promulgate regulations 

11 establishing a program to use emission allowances set 

12 aside for this purpose under section 781 to achieve the 

13 reduction of greenhouse gas emissions from deforestation 

14 in developing countries in accordance with the require15 ments of this part. 

16 ‘‘(b) OBJECTIVES.—The objectives of the program es17 tablished under this section shall be to— 

18 ‘‘(1) achieve supplemental emissions reductions 

19 of at least 720,000,000 tons of carbon dioxide equiv20 alent in 2020, a cumulative amount of at least 

21 6,000,000,000 tons of carbon dioxide equivalent by 

22 December 31, 2025, and additional supplemental 

23 emissions reductions in subsequent years; 

24 ‘‘(2) build capacity to reduce deforestation in 

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1 cluding preparing developing countries to participate 

2 in international markets for international offset 

3 credits for reduced emissions from deforestation; and 

4 ‘‘(3) preserve existing forest carbon stocks in 

5 countries where such forest carbon may be vulner6 able to international leakage, particularly in devel7 oping countries with largely intact native forests. 

8 ‘‘SEC. 754. REQUIREMENTS FOR INTERNATIONAL DEFOR9 ESTATION REDUCTION PROGRAM. 

10 ‘‘(a) ELIGIBLE COUNTRIES.—The Administrator 

11 may support activities under this part only with respect 

12 to a developing country that— 

13 ‘‘(1) the Administrator, in consultation with the 

14 Administrator of USAID, determines is experiencing 

15 deforestation or forest degradation or has standing 

16 forest carbon stocks that may be at risk of deforest17 ation or degradation; and 

18 ‘‘(2) has entered into a bilateral or multilateral 

19 agreement or arrangement with the United States 

20 establishing the conditions of its participation in the 

21 program established under this part, which shall in22 clude an agreement to meet the standards estab23 lished under subsection (d) for the activities to 

24 which those standards apply. 


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1 ‘‘(b) ACTIVITIES.—(1) Subject to the requirements of 

2 this part, the Administrator, in consultation with the Ad3 ministrator of USAID, may support activities to achieve 

4 the objectives identified in section 753(b), including— 

5 ‘‘(A) national deforestation reduction ac6 tivities; 

7 ‘‘(B) subnational deforestation reduction 

8 activities, including pilot activities that reduce 

9 greenhouse gas emissions but are subject to sig10 nificant uncertainty; 

11 ‘‘(C) activities to measure, monitor, and 

12 verify deforestation, avoided deforestation, and 

13 deforestation rates; 

14 ‘‘(D) leakage prevention activities; 

15 ‘‘(E) development of measurement, moni16 toring, and verification capacities to enable a 

17 country to quantify supplemental emissions re18 ductions and to generate for sale offset credits 

19 from reduced or avoided deforestation; 

20 ‘‘(F) development of governance structures 

21 to reduce deforestation and illegal logging; 

22 ‘‘(G) enforcement of requirements for re23 duced deforestation or forest conservation; 

24 ‘‘(H) efforts to combat illegal logging and 

25 increase enforcement cooperation; 


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1 ‘‘(I) providing incentives for policy reforms 

2 to achieve the objectives identified in section 

3 753(b); and 

4 ‘‘(J) monitoring and evaluation of the re5 sults of the activities conducted under this sec6 tion. 

7 ‘‘(2) ACTIVITIES SELECTED BY USAID.— 

8 ‘‘(A) The Administrator of USAID, in con9 sultation with the Administrator, may select for 

10 support and implementation pursuant to sub11 section (c) any of the activities described in 

12 paragraph (1), consistent with this part and the 

13 regulations promulgated under subsection (d), 

14 and subject to the requirement to achieve the 

15 objectives listed in section 753(b)(1). 

16 ‘‘(B) With respect to the activities listed in 

17 subparagraphs (iv) through (x) of this section, 

18 the Administrator of USAID, in consultation 

19 with the Administrator, shall have primary but 

20 not exclusive responsibility for selecting the ac21 tivities to be supported and implemented. 

22 ‘‘(3) INTERAGENCY COORDINATION.—The Ad23 ministrator and the Administrator of USAID shall 

24 jointly develop and biennially update a strategic plan 

25 for meeting the objectives listed in section 753(b) 


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1 and shall execute a memorandum of understanding 

2 delineating the agencies’ respective roles in imple3 menting this part. 

4 ‘‘(c) MECHANISMS.— 

5 ‘‘(1) IN GENERAL.—The Administrator may 

6 support activities to achieve the objectives identified 

7 in section 753(b) by— 

8 ‘‘(A) developing and implementing pro9 grams and projects that achieve such objectives; 

10 and 

11 ‘‘(B) distributing emission allowances to a 

12 country that is eligible under subsection (a), to 

13 any private or public group (including inter14 national organizations), or to an international 

15 fund established by an international agreement 

16 to which the United States is a party, to carry 

17 out activities to achieve such objectives. 

18 ‘‘(2) USAID ACTIVITIES.—With respect to ac19 tivities selected and implemented by the Adminis20 trator of USAID pursuant to (b)(2), the Adminis21 trator shall distribute emission allowances as pro22 vided in subparagraph (1) based upon the direction 

23 of the Administrator of USAID, subject to the avail24 ability of allowances for such activities. 


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1 ‘‘(3) IMPLEMENTATION THROUGH INTER2 NATIONAL ORGANIZATIONS.—If support is distrib3 uted through an international organization, the 

4 agency responsible for selecting activities in accord5 ance with subparagraph (b)(1) or (2), in consulta6 tion with the Secretary of State, shall ensure the es7 tablishment and implementation of adequate mecha8 nisms to apply and enforce the eligibility require9 ments and other requirements of this section. 

10 ‘‘(4) ROLE OF THE SECRETARY OF STATE.— 

11 The Administrator may not distribute emission al12 lowances to the government of another country or to 

13 an international organization or international fund 

14 unless the Secretary of State has concurred with 

15 such distribution. 

16 ‘‘(d) STANDARDS.—The Administrator, in consulta17 tion with the Administrator of USAID, shall promulgate 

18 standards to ensure that supplemental emissions reduc19 tions achieved through supported activities are additional, 

20 measurable, verifiable, permanent, monitored, and account 

21 for leakage and uncertainty. In addition, such standards 

22 shall— 

23 ‘‘(1) require the establishment of a national de24 forestation baseline for each country with national 


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1 deforestation reduction activities that is used to ac2 count for reductions achieved from such activities; 

3 ‘‘(2) provide that a national deforestation base4 line established under paragraph (1) shall— 

5 ‘‘(A) be national in scope; 

6 ‘‘(B) be consistent with nationally appro7 priate mitigation commitments or actions with 

8 respect to deforestation, taking into consider9 ation the average annual historical deforestation 

10 rates of the country during a period of at least 

11 5 years and other factors to ensure 

12 additionality; 

13 ‘‘(C) establish a trajectory that would re14 sult in zero net deforestation by not later than 

15 20 years from the date the baseline is estab16 lished; 

17 ‘‘(D) be adjusted over time to take account 

18 of changing national circumstances; 

19 ‘‘(E) be designed to account for all signifi20 cant sources of greenhouse gas emissions from 

21 deforestation in the country; and 

22 ‘‘(F) be consistent with the national defor23 estation baseline, if any, established for such 

24 country under section 743(e)(4); 


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1 ‘‘(3) with respect to support provided pursuant 

2 to subsection (b)(1) or (2), require supplemental 

3 emissions reductions to be achieved and verified 

4 prior to compensation through the distribution of 

5 emission allowances under this part; 

6 ‘‘(4) with respect to accounting for subnational 

7 deforestation reduction activities that lack the stand8 ardized or precise measurement and monitoring 

9 techniques needed for a full accounting of changes 

10 in emissions or baselines, or are subject to other 

11 sources of uncertainty, apply a conservative discount 

12 factor to reflect the uncertainty regarding the levels 

13 of reductions achieved; 

14 ‘‘(5) ensure that activities under this part shall 

15 be designed, carried out, and managed— 

16 ‘‘(A) in accordance with widely accepted, 

17 environmentally sustainable forestry practices; 

18 and 

19 ‘‘(B) to promote native species and con20 servation or restoration of native forests, if 

21 practicable, and to avoid the introduction of 

22 invasive nonnative species; and 

23 ‘‘(6) with respect to support for all activities 

24 under this part, seek to ensure the establishment 


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1 and enforcement by the recipient country of legal re2 gimes, standards, and safeguards that— 

3 ‘‘(A) give due regard to the rights and in4 terests of local communities, indigenous and 

5 forest-dependent peoples, and vulnerable social 

6 groups; 

7 ‘‘(B) promote consultations with local com8 munities and indigenous and forest-dependent 

9 peoples in affected areas, as partners and pri10 mary stakeholders, prior to and during the de11 sign, planning, implementation, monitoring, and 

12 evaluation of activities under this part; and 

13 ‘‘(C) encourage sharing of profits from in14 centives for emissions reductions or leakage 

15 prevention with local communities and indige16 nous and forest-dependent peoples. 

17 ‘‘(e) EXPANSION OF SCOPE.—The Administrator, in 

18 consultation with the Administrator of USAID, may de19 cide, taking into account any advice from the Advisory 

20 Board, to expand, where appropriate, the scope of activi21 ties under this part to include— 

22 ‘‘(1) reduced emissions from forest degradation; 

23 or 


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1 ‘‘(2) reduced soil carbon-derived emissions asso2 ciated with deforestation and degradation of forested 

3 wetlands and peatlands. 

4 ‘‘(f) ACCOUNTING.—The Administrator shall estab5 lish a publicly accessible registry of the supplemental emis6 sions reductions achieved through support provided under 

7 this part each year, after appropriately discounting for un8 certainty and other relevant factors as required by the 

9 standards established under subsection (d). 

10 ‘‘(g) TRANSITION TO NATIONAL REDUCTIONS.—Be11 ginning 5 years after the date that a country entered into 

12 the agreement or arrangement required under subsection 

13 (a)(2), the Administrator shall provide no further com14 pensation through emission allowances to that country 

15 under this part for any subnational deforestation reduc16 tion activities, except that the Administrator may extend 

17 this period by an additional 5 years if the Administrator, 

18 in consultation with the Administrator of USAID, deter19 mines that— 

20 ‘‘(1) the country is making substantial progress 

21 towards adopting and implementing a program to 

22 achieve reductions in deforestation measured against 

23 a national baseline; 

24 ‘‘(2) the greenhouse gas emissions reductions 

25 achieved are not resulting in significant leakage; and 


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1 ‘‘(3) the greenhouse gas emissions reductions 

2 achieved are being appropriately discounted to ac3 count for any leakage that is occurring. 

4 The limitation under this subsection shall not apply to 

5 support for activities to further the objectives listed in sec6 tion 753(b)(2) or (3). 

7 ‘‘(h) COORDINATION WITH U.S. FOREIGN ASSIST8 ANCE.—Subject to the Direction of the President, the Ad9 ministrator and the Administrator of USAID shall, to the 

10 extent practicable and consistent with the objectives of 

11 this program, seek to align activities under this section 

12 with broader development, poverty alleviation, or natural 

13 resource management objectives and initiatives in the re14 cipient country. 

15 ‘‘(i) SUPPORT AS SUPPLEMENT.—The provision of 

16 support for activities under this part shall be used to sup17 plement, and not to supplant, any other Federal, State, 

18 or local support available to carry out such qualifying ac19 tivities under this part. 

20 ‘‘SEC. 755. REPORTS AND REVIEWS. 

21 ‘‘(a) REPORTS.—Not later than January 1, 2014, 

22 and annually thereafter, the Administrator and the Ad23 ministrator of USAID shall submit to the Committee on 

24 Energy and Commerce and the Committee on Foreign Af25 fairs of the House of Representatives, and the Committee 


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1 on Environment and Public Works and the Committee on 

2 Foreign Relations of the Senate, and make available to 

3 the public, a report on the support provided under this 

4 part during the prior fiscal year. The report shall in5 clude— 

6 ‘‘(1) a statement of the quantity of supple7 mental emissions reductions for which compensation 

8 was provided under this part during the prior fiscal 

9 year, as registered by the Administrator under sec10 tion 754(f); and 

11 ‘‘(2) a description of the national and sub12 national deforestation reduction activities, capacity13 building activities, and leakage prevention activities 

14 supported under this part, including a statement of 

15 the quantity of emission allowances distributed to 

16 each recipient for each activity during the prior fis17 cal year, and a description of what was accomplished 

18 through each of the activities. 

19 ‘‘(b) REVIEWS.—Not later than 4 years after the date 

20 of enactment of this title and every 5 years thereafter, 

21 the Administrator and the Administrator of USAID and 

22 taking into consideration any evaluation by or rec23 ommendations from the Advisory Board established under 

24 section 731, shall conduct a review of the activities under25 taken pursuant to this part and make any appropriate 


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1 changes in the program established under this part based 

2 on the findings of the review. The review shall include the 

3 effects of the activities on— 

4 ‘‘(1) total documented carbon stocks of each 

5 country that directly or indirectly received support 

6 under this part compared with such country’s na7 tional deforestation baseline established under sec8 tion 754(d)(1); 

9 ‘‘(2) the number of countries with the capacity 

10 to generate for sale instruments in the nature of off11 set credits from forest-related activities, and the 

12 amount of such activities; 

13 ‘‘(3) forest governance in each country that di14 rectly or indirectly received support under this part; 

15 ‘‘(4) indigenous and forest-dependent peoples 

16 residing in areas affected by such activities; 

17 ‘‘(5) biodiversity and ecosystem services within 

18 forested areas associated with the activities; 

19 ‘‘(6) international leakage; and 

20 ‘‘(7) any program or mechanism established 

21 under the United Nations Framework Convention on 

22 Climate Change related to greenhouse gas emissions 

23 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 

11 Foreign 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 

15 the following new section: 

16 ‘‘SEC. 700. DEFINITIONS. 

17 ‘‘In this title: 

18 ‘‘(1) ADDITIONAL.—The term ‘additional’, 

19 when used with respect to reductions or avoidance of 

20 greenhouse gas emissions, or to sequestration of 

21 greenhouse gases, means reductions, avoidance, or 

22 sequestration that result in a lower level of net 

23 greenhouse gas emissions or atmospheric concentra24 tions than would occur in the absence of an offset 

25 project. 


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1 ‘‘(2) ADDITIONALITY.—The term ‘additionality’ 

2 means the extent to which reductions or avoidance 

3 of greenhouse gas emissions, or sequestration of 

4 greenhouse gases, are additional. 

5 ‘‘(3) ADVISORY BOARD.—The term ‘Advisory 

6 Board’ means the Offsets Integrity Advisory Board 

7 established under section 731. 

8 ‘‘(4) AFFILIATED.—The term ‘affiliated’— 

9 ‘‘(A) when used in relation to an entity 

10 means owned or controlled by, or under com11 mon ownership or control with, another entity, 

12 as determined by the Administrator; and 

13 ‘‘(B) when used in relation to a natural 

14 gas local distribution company, means owned or 

15 controlled by, or under common ownership or 

16 control with, another natural gas local distribu17 tion company, as determined by the Adminis18 trator. 

19 ‘‘(5) ALLOWANCE.—The term ‘allowance’ 

20 means a limited authorization to emit, or have at21 tributable greenhouse gas emissions in an amount 

22 of, 1 ton of carbon dioxide equivalent of a green23 house gas in accordance with this title, including an 

24 emission allowance, a compensatory allowance, or an 

25 international emission allowance. 


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1 ‘‘(6) ATTRIBUTABLE GREENHOUSE GAS EMIS2 SIONS.—The term ‘attributable greenhouse gas emis3 sions’ means— 

4 ‘‘(A) for a covered entity that is a fuel pro5 ducer or importer described in section 

6 700(14)(B), greenhouse gases that would be 

7 emitted from the combustion of any petroleum8 based or coal-based liquid fuel, petroleum coke, 

9 or natural gas liquid, produced or imported by 

10 that covered entity for sale or distribution in 

11 interstate commerce, assuming no capture and 

12 sequestration of any greenhouse gas emissions; 

13 ‘‘(B) for a covered entity that is an indus14 trial gas producer or importer described in sec15 tion 700(14)(C), the tons of carbon dioxide 

16 equivalent of carbon dioxide, nitrous oxide, any 

17 fluorinated gas, other than nitrogen trifluoride, 

18 that is a greenhouse gas, or any combination 

19 thereof— 

20 ‘‘(i) produced or imported by such 

21 covered entity during the previous calendar 

22 year for sale or distribution in interstate 

23 commerce; or 

24 ‘‘(ii) released as fugitive emissions in 

25 the production of fluorinated gas; and 


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1 ‘‘(C) for a natural gas local distribution 

2 company described in section 700(14)(I), green3 house gases that would be emitted from the 

4 combustion of the natural gas, and any other 

5 gas meeting the specifications for commingling 

6 with natural gas for purposes of delivery, that 

7 such entity delivered during the previous cal8 endar year to customers that are not covered 

9 entities, assuming no capture and sequestration 

10 of that greenhouse gas. 

11 ‘‘(7) BIOLOGICAL SEQUESTRATION; BIO12 LOGICALLY SEQUESTERED.—The terms ‘biological 

13 sequestration’ and ‘biologically sequestered’ mean 

14 the removal of greenhouse gases from the atmos15 phere by terrestrial biological means, such as by 

16 growing plants, and the storage of those greenhouse 

17 gases in plants or soils. 

18 ‘‘(8) CAPPED EMISSIONS.—The term ‘capped 

19 emissions’ means greenhouse gas emissions to which 

20 section 722 applies, including emissions from the 

21 combustion of natural gas, petroleum-based or coal22 based liquid fuel, petroleum coke, or natural gas liq23 uid to which section 722(a)(2) or (7) applies. 


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1 ‘‘(9) CAPPED SOURCE.—The term ‘capped 

2 source’ means a source that directly emits capped 

3 emissions. 

4 ‘‘(10) CARBON DIOXIDE EQUIVALENT.—The 

5 term ‘carbon dioxide equivalent’ means the unit of 

6 measure, expressed in metric tons, of greenhouse 

7 gases as provided under section 711 or 712. 

8 ‘‘(11) CARBON STOCK.—The term ‘carbon 

9 stock’ means the quantity of carbon contained in a 

10 biological reservoir or system which has the capacity 

11 to accumulate or release carbon. 

12 ‘‘(12) COMPENSATORY ALLOWANCE.—The term 

13 ‘compensatory allowance’ means an allowance issued 

14 under section 721(f). 

15 ‘‘(13) COVERED ENTITY.—The term ‘covered 

16 entity’ means each of the following: 

17 ‘‘(A) Any electricity source. 

18 ‘‘(B) Any stationary source that produces, 

19 and any entity that (or any group of two or 

20 more affiliated entities that, in the aggregate) 

21 imports, for sale or distribution in interstate 

22 commerce in 2008 or any subsequent year, pe23 troleum-based or coal-based liquid fuel, petro24 leum coke, or natural gas liquid, the combus25 tion of which would emit more than 25,000 


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1 tons of carbon dioxide equivalent, as determined 

2 by the Administrator. 

3 ‘‘(C) Any stationary source that produces, 

4 and any entity that (or any group of two or 

5 more affiliated entities that, in the aggregate) 

6 imports, for sale or distribution in interstate 

7 commerce in bulk or products designated by the 

8 Administrator for sale or distribution in inter9 state commerce in 2008 or any subsequent year 

10 more than 25,000 tons of carbon dioxide equiv11 alent of— 

12 ‘‘(i) fossil fuel-based carbon dioxide; 

13 ‘‘(ii) nitrous oxide; 

14 ‘‘(iii) perfluorocarbons; 

15 ‘‘(iv) sulfur hexafluoride; 

16 ‘‘(v) any other fluorinated gas, except 

17 for nitrogen trifluoride, that is a green18 house gas, as designated by the Adminis19 trator under section 711(b) or (c); or 

20 ‘‘(vi) any combination of greenhouse 

21 gases described in clauses (i) through (vi). 

22 ‘‘(D) Any geologic sequestration site. 

23 ‘‘(E) Any stationary source in the fol24 lowing industrial sectors: 

25 ‘‘(i) Adipic acid production. 


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1 ‘‘(ii) Primary aluminum production. 

2 ‘‘(iii) Ammonia manufacturing. 

3 ‘‘(iv) Cement production, excluding 

4 grinding-only operations. 

5 ‘‘(v) Hydrochlorofluorocarbon produc6 tion. 

7 ‘‘(vi) Lime manufacturing. 

8 ‘‘(vii) Nitric acid production. 

9 ‘‘(viii) Petroleum refining. 

10 ‘‘(ix) Phosphoric acid production. 

11 ‘‘(x) Silicon carbide production. 

12 ‘‘(xi) Soda ash production. 

13 ‘‘(xii) Titanium dioxide production. 

14 ‘‘(xiii) Coal-based liquid or gaseous 

15 fuel production. 

16 ‘‘(F) Any stationary source in the chemical 

17 or petrochemical sector that, in 2008 or any 

18 subsequent year— 

19 ‘‘(i) produces acrylonitrile, carbon 

20 black, ethylene, ethylene dichloride, ethyl21 ene oxide, or methanol; or 

22 ‘‘(ii) produces a chemical or petro23 chemical product if producing that product 

24 results in annual combustion plus process 


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1 emissions of 25,000 or more tons of carbon 

2 dioxide equivalent. 

3 ‘‘(G) Any stationary source that— 

4 ‘‘(i) is in one of the following indus5 trial sectors: ethanol production; ferroalloy 

6 production; fluorinated gas production; 

7 food processing; glass production; hydrogen 

8 production; iron and steel production; lead 

9 production; pulp and paper manufacturing; 

10 and zinc production; and 

11 ‘‘(ii) has emitted 25,000 or more tons 

12 of carbon dioxide equivalent in 2008 or 

13 any subsequent year. 

14 ‘‘(H) Any fossil fuel-fired combustion de15 vice (such as a boiler) or grouping of such de16 vices that— 

17 ‘‘(i) is all or part of an industrial 

18 source not specified in subparagraph (E), 

19 (F), or (G); and 

20 ‘‘(ii) has emitted 25,000 or more tons 

21 of carbon dioxide equivalent in 2008 or 

22 any subsequent year. 

23 ‘‘(I) Any natural gas local distribution 

24 company that (or any group of 2 or more affili25 ated natural gas local distribution companies 


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1 that, in the aggregate) in 2008 or any subse2 quent year, delivers 460,000,000 cubic feet or 

3 more of natural gas to customers that are not 

4 covered entities. 

5 ‘‘(J) Any stationary source that has emit6 ted 25,000 or more tons of carbon dioxide 

7 equivalent emission of nitrogen trifluoride in 

8 2008 or any subsequent year. 

9 ‘‘(14) CREDITING PERIOD.—The term ‘crediting 

10 period’ means the period with respect to which an 

11 offset project is eligible to earn offset credits under 

12 part D, as determined under section 734(c). 

13 ‘‘(15) DESIGNATED REPRESENTATIVE.—The 

14 term ‘designated representative’ means, with respect 

15 to a covered entity, a reporting entity, an offset 

16 project developer, or any other entity receiving or 

17 holding allowances or offset credits under this title, 

18 an individual authorized, through a certificate of 

19 representation submitted to the Administrator by 

20 the owners and operators, to represent the owners 

21 and operators in all matters pertaining to this title 

22 (including the holding, transfer, or disposition of al23 lowances or offset credits), and to make all submis24 sions to the Administrator under this title. 


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1 ‘‘(16) DEVELOPING COUNTRY.—The term ‘de2 veloping country’ means a country eligible to receive 

3 official development assistance according to the in4 come guidelines of the Development Assistance Com5 mittee of the Organization for Economic Coopera6 tion and Development. 

7 ‘‘(17) DOMESTIC OFFSET CREDIT.—The term 

8 ‘domestic offset credit’ means an offset credit issued 

9 under part D, other than an international offset 

10 credit. 

11 ‘‘(18) ELECTRICITY SOURCE.—The term ‘elec12 tricity source’ means a stationary source that in13 cludes one or more utility units. 

14 ‘‘(19) EMISSION.—The term ‘emission’ means 

15 the release of a greenhouse gas into the ambient air. 

16 Such term does not include gases that are captured 

17 and sequestered, except to the extent that they are 

18 later released into the atmosphere, in which case 

19 they shall be subject to section 722(a)(4). 

20 ‘‘(20) EMISSION ALLOWANCE.—The term ‘emis21 sion allowance’ means an allowance established 

22 under section 721(a) or section 726(g)(2) or 

23 (h)(1)(C). 

24 ‘‘(21) FAIR MARKET VALUE.—The term ‘fair 

25 market value’ means the average daily closing price 


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1 on registered exchanges or, if such a price is un2 available, the average price as determined by the Ad3 ministrator, during a specified time period, of an 

4 emission allowance. 

5 ‘‘(22) FEDERAL LAND.—The term ‘Federal 

6 land’ means land that is owned by the United 

7 States, other than land held in trust for an Indian 

8 or Indian tribe. 

9 ‘‘(23) FOSSIL FUEL.—The term ‘fossil fuel’ 

10 means natural gas, petroleum, coal, or any form of 

11 solid, liquid, or gaseous fuel derived from such mate12 rial, including consumer products that are derived 

13 from such materials and are combusted. 

14 ‘‘(24) FOSSIL FUEL-FIRED.—The term ‘fossil 

15 fuel-fired’ means powered by combustion of fossil 

16 fuel, alone or in combination with any other fuel, re17 gardless of the percentage of fossil fuel consumed. 

18 ‘‘(25) FUGITIVE EMISSIONS.—The term ‘fugi19 tive emissions’ means emissions from leaks, valves, 

20 joints, or other small openings in pipes, ducts, or 

21 other equipment, or from vents. 

22 ‘‘(26) GEOLOGIC SEQUESTRATION; GEOLOGI23 CALLY SEQUESTERED.—The terms ‘geologic seques24 tration’ and ‘geologically sequestered’ mean the seVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00525 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 questration of greenhouse gases in subsurface geo2 logic formations for purposes of permanent storage. 

3 ‘‘(27) GEOLOGIC SEQUESTRATION SITE.—The 

4 term ‘geologic sequestration site’ means a site where 

5 carbon dioxide is geologically sequestered. 

6 ‘‘(28) GREENHOUSE GAS.—The term ‘green7 house gas’ means any gas described in section 

8 711(a) or designated under section 711(b), (c), or 

9 (d), except to the extent that it is regulated under 

10 title VI. 

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

12 The term ‘high conservation priority land’ means 

13 land that is not Federal land and is— 

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

15 imperiled or imperiled under a State Natural 

16 Heritage Program; or 

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

18 as identified by the office of the State Forester 

19 or relevant State agency with regulatory juris20 diction over forestry activities. 

21 ‘‘(30) HOLD.—The term ‘hold’ means, with re22 spect to an allowance or offset credit, to have in the 

23 appropriate account in the allowance tracking sys24 tem, or submit to the Administrator for recording in 

25 such account. 


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1 ‘‘(31) INDUSTRIAL SOURCE.—The term ‘indus2 trial source’ means any stationary source that— 

3 ‘‘(A) is not an electricity source; and 

4 ‘‘(B) is in— 

5 ‘‘(i) the manufacturing sector (as de6 fined in North American Industrial Classi7 fication System codes 31, 32, and 33); or 

8 ‘‘(ii) the natural gas processing or 

9 natural gas pipeline transportation sector 

10 (as defined in North American Industrial 

11 Classification System codes 211112 or 

12 486210). 

13 ‘‘(32) INTERNATIONAL EMISSION ALLOW14 ANCE.—The term ‘international emission allowance’ 

15 means a tradable authorization to emit 1 ton of car16 bon dioxide equivalent of greenhouse gas that is 

17 issued by a national or supranational foreign govern18 ment pursuant to a qualifying international program 

19 designated by the Administrator pursuant to section 

20 728(a). 

21 ‘‘(33) INTERNATIONAL FOREST CARBON ACTIVI22 TIES.—The term ‘international forest carbon activi23 ties’ means national or subnational activities in 

24 countries other than the United States that are di25 rected at— 


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1 ‘‘(A) reducing greenhouse gas emissions 

2 from deforestation or forest degradation; or 

3 ‘‘(B) increasing sequestration of carbon 

4 through— 

5 ‘‘(i) afforestation or reforestation of 

6 acreage not forested as of January 1, 

7 2009; 

8 ‘‘(ii) restoration of degraded land or 

9 forest; or 

10 ‘‘(iii) improved forest management. 

11 ‘‘(34) INTERNATIONAL OFFSET CREDIT.—The 

12 term ‘international offset credit’ means an offset 

13 credit issued by the Administrator under section 

14 743. 

15 ‘‘(35) LEAKAGE.—The term ‘leakage’ means a 

16 significant increase in greenhouse gas emissions, or 

17 significant decrease in sequestration, which is caused 

18 by an offset project and occurs outside the bound19 aries of the offset project. 

20 ‘‘(36) MINERAL SEQUESTRATION.—The term 

21 ‘mineral sequestration’ means sequestration of car22 bon dioxide from the atmosphere by capturing car23 bon dioxide into a permanent mineral, such as the 

24 aqueous precipitation of carbonate minerals that reVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00528 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 sults in the storage of carbon dioxide in a mineral 

2 form. 

3 ‘‘(37) NATURAL GAS LIQUID.—The term ‘nat4 ural gas liquid’ means ethane, butane, isobutene nat5 ural gasoline, and propane which is ready for com6 mercial sale or use. 

7 ‘‘(38) NATURAL GAS LOCAL DISTRIBUTION

8 COMPANY.—The term ‘natural gas local distribution 

9 company’ has the meaning given the term ‘local dis10 tribution company’ in section 2(17) of the Natural 

11 Gas Policy Act of 1978 (15 U.S.C. 3301(17)). 

12 ‘‘(39) OFFSET CREDIT.—The term ‘offset cred13 it’ means a credit issued under part D. 

14 ‘‘(40) OFFSET PROJECT.—The term ‘offset 

15 project’ means a project or activity that reduces or 

16 avoids greenhouse gas emissions, or sequesters 

17 greenhouse gases, and for which offset credits are 

18 issued under part D. 

19 ‘‘(41) OFFSET PROJECT DEVELOPER.—The 

20 term ‘offset project developer’ means the individual 

21 or entity designated as the offset project developer 

22 in an offset project approval petition under section 

23 735(c)(1). 

24 ‘‘(42) PETROLEUM.—The term ‘petroleum’ in25 cludes crude oil, tar sands, oil shale, and heavy oils. 


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1 ‘‘(43) RENEWABLE BIOMASS.—The term ‘re2 newable biomass’ means any of the following: 

3 ‘‘(A) Plant material, including waste mate4 rial, harvested or collected from actively man5 aged agricultural land that was in cultivation, 

6 cleared, or fallow and nonforested on the date 

7 of enactment; 

8 ‘‘(B) Plant material, including waste mate9 rial, harvested or collected from pastureland 

10 that was nonforested on the date of enactment; 

11 ‘‘(C) Nonhazardous vegetative matter de12 rived from waste, including separated yard 

13 waste, landscape right-of-way trimmings, con14 struction and demolition debris or food waste 

15 (but not municipal solid waste, recyclable waste 

16 paper, painted, treated or pressurized wood, or 

17 wood contaminated with plastic or metals); 

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

19 including products of animal waste digesters; 

20 ‘‘(E) Algae; 

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

22 other vegetative matter removed from within 

23 600 feet of any building, campground, or route 

24 designated for evacuation by a public official 

25 with responsibility for emergency preparedness, 


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1 or from within 300 feet of a paved road, electric 

2 transmission line; utility tower, or water supply 

3 line; 

4 ‘‘(G) Residues from or byproducts of 

5 milled logs; 

6 ‘‘(H) Any of the following removed from 

7 forested land that is not Federal and is not 

8 high conservation priority land: 

9 ‘‘(i) Trees, brush, slash, residues, 

10 interplanted energy crops, or any other 

11 vegetative matter removed from an actively 

12 managed tree plantation established— 

13 ‘‘(I) prior to the date of enact14 ment of this section; or 

15 ‘‘(II) on land that, as of the date 

16 of enactment of this section, was cul17 tivated or fallow and non-forested. 

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

19 cull trees, pulpwood, and brush removed 

20 from naturally regenerated forests or other 

21 non-plantation forests, including for the 

22 purposes of hazardous fuel reduction or 

23 preventative treatment for reducing or con24 taining insect or disease infestation. 


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

2 trees, pulpwood, brush and species that are 

3 non-native and noxious, from stands that 

4 were planted and managed after the enact5 ment of this sentence to restore or main6 tain native forest types. 

7 ‘‘(iv) Dead or severely damaged trees 

8 removed within 5 years of fire, blowdown, 

9 or other natural disaster, and badly in10 fested trees. 

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

12 or removed invasive species from National For13 est System land and public lands (as defined in 

14 section 103 of the Federal Land Policy and 

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

16 including those that are byproducts of preven17 tive treatments (such as trees, wood, brush, 

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

19 as part of a federally recognized timber sale, or 

20 that are removed to reduce hazardous fuels, to 

21 reduce or contain disease or insect infestation, 

22 or to restore ecosystem health, and that are— 

23 ‘‘(i) not from are not from compo24 nents of the National Wilderness Preserva25 tion System, Wilderness Study Areas, 


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1 Inventoried Roadless Areas, old growth or 

2 mature forest stands, components of the 

3 National Landscape Conservation System, 

4 National Monuments, National Conserva5 tion Areas, Designated Primitive Areas; or 

6 Wild and Scenic Rivers corridors; 

7 ‘‘(ii) harvested in environmentally sus8 tainable quantities, as determined by the 

9 appropriate Federal land manager; and 

10 ‘‘(iii) are harvested in accordance with 

11 Federal and State law, and applicable land 

12 management plans. 

13 ‘‘(44) RETIRE.—The term ‘retire’, with respect 

14 to an allowance or offset credit established or issued 

15 under this title, means to disqualify such allowance 

16 or offset credit for any subsequent use under this 

17 title, regardless of whether the use is a sale, ex18 change, or submission of the allowance or offset 

19 credit to satisfy a compliance obligation. 

20 ‘‘(45) REVERSAL.—The term ‘reversal’ means 

21 an intentional or unintentional loss of sequestered 

22 greenhouse gases to the atmosphere. 

23 ‘‘(46) SEQUESTERED AND SEQUESTRATION.— 

24 The terms ‘sequestered’ and ‘sequestration’ mean 

25 the separation, isolation, or removal of greenhouse 


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1 gases from the atmosphere, as determined by the 

2 Administrator. The terms include biological, geo3 logic, and mineral sequestration, but do not include 

4 ocean fertilization techniques. 

5 ‘‘(47) STATIONARY SOURCE.—The term ‘sta6 tionary source’ means any integrated operation com7 prising any plant, building, structure, or stationary 

8 equipment, including support buildings and equip9 ment, that is located within one or more contiguous 

10 or adjacent properties, is under common control of 

11 the same person or persons, and emits or may emit 

12 a greenhouse gas. 

13 ‘‘(48) STRATEGIC RESERVE ALLOWANCE.—The 

14 term ‘strategic reserve allowance’ means an emission 

15 allowance reserved for, transferred to, or deposited 

16 in the strategic reserve, or established, under section 

17 726. 

18 ‘‘(49) TON OF CARBON DIOXIDE EQUIVA19 LENT.—The term ‘ton of carbon dioxide equivalent’ 

20 has the meaning specified in section 712(b) or deter21 mined by the Administrator under section 711 or 

22 712. 

23 ‘‘(50) UNCAPPED EMISSIONS.—The term ‘un24 capped emissions’ means emissions of greenhouse 


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1 gases emitted after December 31, 2011, that are not 

2 capped emissions. 

3 ‘‘(51) UNITED STATES GREENHOUSE GAS EMIS4 SIONS.—The term ‘United States greenhouse gas 

5 emissions’ means the total quantity of annual green6 house gas emissions from the United States, as cal7 culated by the Administrator and reported to the 

8 United Nations Framework Convention on Climate 

9 Change Secretariat. 

10 ‘‘(52) UTILITY UNIT.—The term ‘utility unit’ 

11 means a combustion device that, on January 1, 

12 2009, or any date thereafter, is fossil fuel-fired and 

13 serves a generator that produces electricity for sale, 

14 unless such combustion device, during the 12-month 

15 period starting the later of January 1, 2009, or the 

16 commencement of commercial operation and each 

17 calendar year starting after such later date— 

18 ‘‘(A) is part of an integrated cycle system 

19 that cogenerates steam and electricity during 

20 normal operation and that supplies one-third or 

21 less of its potential electric output capacity and 

22 25 MW or less of electrical output for sale; or 

23 ‘‘(B) combusts materials of which more 

24 than 95 percent is municipal solid waste on a 

25 heat input basis. 


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1 ‘‘(53) VINTAGE YEAR.—The term ‘vintage year’ 

2 means the calendar year for which an emission al3 lowance is established under section 721(a) or which 

4 is assigned to an emission allowance under section 

5 726(g)(3)(A), except that the vintage year for a 

6 strategic reserve allowance shall be the year in which 

7 such allowance is purchased at auction.’’. 

8 Subtitle B—Disposition of 

9 Allowances 

10 SEC. 321. DISPOSITION OF ALLOWANCES FOR GLOBAL 

11 WARMING POLLUTION REDUCTION PRO12 GRAM. 

13 Title VII of the Clean Air Act, as added by section 

14 311 of this Act, is amended by adding at the end the fol15 lowing part: 

16 ‘‘PART H—DISPOSITION OF ALLOWANCES 

17 ‘‘SEC. 781. ALLOCATION OF ALLOWANCES FOR SUPPLE18 MENTAL REDUCTIONS. 

19 ‘‘(a) IN GENERAL.—The Administrator shall allocate 

20 for each vintage year the following percentage of the emis21 sion allowances established under section 721(a), for dis22 tribution in accordance with part E: 

23 ‘‘(1) For vintage years 2012 through 2025, 5 

24 percent. 


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1 ‘‘(2) For vintage years 2026 through 2030, 3 

2 percent. 

3 ‘‘(3) For vintage years 2031 through 2050, 2 

4 percent. 

5 ‘‘(b) ADJUSTMENT.—The Administrator shall modify 

6 the percentages set forth in subsection (a) as necessary 

7 to ensure the achievement of the annual supplemental 

8 emission reduction objective for 2020, and the cumulative 

9 reduction objective through 2025, set forth in section 

10 753(b)(1). 

11 ‘‘(c) CARRYOVER.—If the Administrator has not dis12 tributed all of the allowances allocated pursuant to this 

13 section for a given vintage year by the end of that year, 

14 the Administrator shall— 

15 ‘‘(1) auction the remaining emission allowances 

16 under section 791 not later than March 31 of the 

17 year following that vintage year; and 

18 ‘‘(2) increase the allocation for the vintage year 

19 after the vintage year for which emission allowances 

20 were undistributed by the amount of undistributed 

21 emission allowances. 

22 ‘‘SEC. 782. ALLOCATION OF EMISSION ALLOWANCES. 

23 ‘‘(a) ELECTRICITY CONSUMERS.—The Administrator 

24 shall allocate emission allowances for the benefit of elecVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00537 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 tricity consumers, to be distributed in accordance with sec2 tion 783 in the following amounts: 

3 ‘‘(1) For vintage years 2012 and 2013, 43.75 

4 percent of the emission allowances established for 

5 each year under section 721(a). 

6 ‘‘(2) For vintage years 2014 and 2015, 38.89 

7 percent of the emission allowances established for 

8 each year under section 721(a). 

9 ‘‘(3) For vintage years 2016 through 2025, 

10 35.00 percent of the emission allowances established 

11 for each year under section 721(a). 

12 ‘‘(4) For vintage year 2026, 28 percent of the 

13 emission allowances established for each year under 

14 section 721(a). 

15 ‘‘(5) For vintage year 2027, 21 percent of the 

16 emission allowances established for each year under 

17 section 721(a). 

18 ‘‘(6) For vintage year 2028, 14 percent of the 

19 emission allowances established for each year under 

20 section 721(a). 

21 ‘‘(7) For vintage year 2029, 7 percent of the 

22 emission allowances established for each year under 

23 section 721(a). 

24 ‘‘(b) NATURAL GAS CONSUMERS.—The Adminis25 trator shall allocate emission allowances for the benefit of 


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1 natural gas consumers to be distributed in accordance 

2 with section 784 in the following amounts: 

3 ‘‘(1) For vintage years 2016 through 2025, 9 

4 percent of the emission allowances established for 

5 each year under section 721(a). 

6 ‘‘(2) For vintage year 2026, 7.2 percent of the 

7 emission allowances established for each year under 

8 section 721(a). 

9 ‘‘(3) For vintage year 2027, 5.4 percent of the 

10 emission allowances established for each year under 

11 section 721(a). 

12 ‘‘(4) For vintage year 2028, 3.6 percent of the 

13 emission allowances established for each year under 

14 section 721(a). 

15 ‘‘(5) For vintage year 2029, 1.8 percent of the 

16 emission allowances established for each year under 

17 section 721(a). 

18 ‘‘(c) HOME HEATING OIL AND PROPANE CON19 SUMERS.—The Administrator shall allocate emission al20 lowances for the benefit of home heating oil and propane 

21 consumers to be distributed in accordance with section 

22 785 in the following amounts: 

23 ‘‘(1) For vintage years 2012 and 2013, 1.875 

24 percent of the emission allowances established for 

25 each year under section 721(a). 


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1 ‘‘(2) For vintage years 2014 and 2015, 1.67 

2 percent of the emission allowances established for 

3 each year under section 721(a). 

4 ‘‘(3) For vintage years 2016 through 2025, 1.5 

5 percent of the emission allowances established for 

6 each year under section 721(a). 

7 ‘‘(4) For vintage year 2026, 1.2 percent of the 

8 emission allowances established for each year under 

9 section 721(a). 

10 ‘‘(5) For vintage year 2027, 0.9 percent of the 

11 emission allowances established for each year under 

12 section 721(a). 

13 ‘‘(6) For vintage year 2028, 0.6 percent of the 

14 emission allowances established for each year under 

15 section 721(a). 

16 ‘‘(7) For vintage year 2029, 0.3 percent of the 

17 emission allowances established for each year under 

18 section 721(a). 

19 ‘‘(d) LOW INCOME CONSUMERS.—For each vintage 

20 year starting in 2012, the Administrator shall auction 15 

21 percent of the emission allowances established for each 

22 year under section 721(a), pursuant to section 791, with 

23 the proceeds used for the benefit of low income consumers 

24 to fund the program set forth in subtitle C of title IV of 

25 American Clean Energy and Security Act of 2009. 


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1 ‘‘(e) TRADE-VULNERABLE INDUSTRIES.—The Ad2 ministrator shall allocate emission allowances to energy3 intensive, trade-exposed entities, to be distributed in ac4 cordance with part F, in the following amounts: 

5 ‘‘(1) For vintage years 2012 and 2013, up to 

6 2.0 percent of the emission allowances established 

7 for each year under section 721(a). 

8 ‘‘(2) For vintage years 2014, up to 15 percent 

9 of the emission allowances established for that year 

10 under section 721(a). 

11 ‘‘(3) For vintage years 2015 through 2025, the 

12 maximum number of allowances that shall be dis13 tributed shall decline by the same amount that the 

14 annual reduction target set forth in section 702 de15 clines (which is 1.75 percentage points annually for 

16 2015 through 2020, and 2.5 percentage points an17 nually from 2021 through 2025). 

18 ‘‘(4) For vintage years 2026 through 2050, the 

19 maximum number of allowances that shall be dis20 tributed shall decline by the same amount that the 

21 annual reduction target set forth in section 702 de22 clines (which is 2.5 percentage points annually for 

23 2026 through 2030, and 1.55 percentage points an24 nually from 2031 through 2050) and shall be multi25 plied by a factor, which shall be 90 percent in 2026 


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1 and decline 10 percentage points a year until it 

2 reaches zero, unless the President sets a different 

3 factor under section 767(c)(3)(A), that shall not ex4 ceed 100 percent. 

5 ‘‘(f) DEPLOYMENT OF CARBON CAPTURE AND SE6 QUESTRATION TECHNOLOGY.— 

7 ‘‘(1) ANNUAL ALLOCATION.—The Adminis8 trator shall allocate emission allowances for the de9 ployment of carbon capture and sequestration tech10 nology to be distributed in accordance with section 

11 786 in the following amounts: 

12 ‘‘(A) For vintage years 2014 through 

13 2017, 2 percent of the emission allowances es14 tablished for each year under section 721(a). 

15 ‘‘(B) For vintage years 2018 through 

16 2050, 5 percent of the emission allowances es17 tablished for each year under section 721(a). 

18 ‘‘(2) CARRYOVER.—If the Administrator has 

19 not distributed all of the allowances allocated pursu20 ant to this section for a given vintage year by the 

21 end of that year, the Administrator shall— 

22 ‘‘(A) auction those emission allowances 

23 under section 791 not later than March 31 of 

24 the year following that vintage year; and 


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1 ‘‘(B) increase the allocation under this 

2 subsection for the vintage year after the vintage 

3 year for which emission allowances were 

4 undisbursed by the amount of undisbursed 

5 emission allowances. 

6 ‘‘(g) INVESTMENT IN ENERGY EFFICIENCY AND RE7 NEWABLE ENERGY.—The Administrator shall allocate 

8 emission allowances to invest in energy efficiency and re9 newable energy as follows: 

10 ‘‘(1) To be distributed in accordance with sec11 tion 132 of the American Clean Energy and Security 

12 Act of 2009 in the following amounts: 

13 ‘‘(A) For vintage years 2012 through 

14 2015, 9.5 percent of the emission allowances es15 tablished for each year under section 721(a). 

16 ‘‘(B) For vintage years 2016 through 

17 2017, 7.0 percent of the emission allowances es18 tablished for each year under section 721(a). 

19 ‘‘(C) For vintage years 2018 through 

20 2021, 6.0 percent of the emission allowances es21 tablished for each year under section 721(a). 

22 ‘‘(D) For vintage years 2022 through 

23 2025, 1.5 percent of the emission allowances es24 tablished for each year under section 721(a). 


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1 ‘‘(E) For vintage years 2026 through 

2 2050, 4.5 percent of the emission allowances es3 tablished for each year under section 721(a). 

4 ‘‘(F) At the same time the vintage year 

5 2022 through 2025 allowances are distributed, 

6 3.55 percent of emission allowances established 

7 under section 721(a) for the vintage year four 

8 years greater shall also be distributed (which 

9 shall be in addition to the emission allowances 

10 in subparagraph (E)). 

11 ‘‘(2) To be distributed in accordance with sec12 tion 201 of the American Clean Energy and Security 

13 Act of 2009 in the amount of 0.5 percent of emis14 sion allowances established under section 721(a) for 

15 each vintage year from 2012 through 2050. 

16 ‘‘(h) CLEAN ENERGY INNOVATION CENTERS.—The 

17 Administrator shall allocate 1 percent of emission allow18 ances for each vintage year from 2012 through 2050 to 

19 be distributed to Clean Energy Innovation Centers in ac20 cordance with section 181 of the American Clean Energy 

21 and Security Act of 2009. 

22 ‘‘(i) INVESTMENT IN CLEAN VEHICLE TECH23 NOLOGY.—The Administrator shall allocate emission al24 lowances to invest in the development and deployment of 

25 clean vehicles, to be distributed in accordance with section 


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1 124 of the American Clean Energy and Security Act of 

2 2009 in the following amounts: 

3 ‘‘(1) For vintage years 2012 through 2017, 3 

4 percent of the emission allowances established for 

5 each year under section 721(a). 

6 ‘‘(2) For vintage years 2018 through 2025, 1 

7 percent of the emission allowances established for 

8 each year under section 721(a). 

9 ‘‘(j) DOMESTIC FUEL PRODUCTION.—For vintage 

10 years 2014 through 2026, the Administrator shall allocate 

11 2.0 percent of the emission allowances established under 

12 section 721(a) to domestic refiners, to be distributed in 

13 accordance with part F. 

14 ‘‘(k) INVESTMENT IN WORKERS.—The Administrator 

15 shall auction pursuant to section 791 emission allowances 

16 for workers in the following amounts and shall report to 

17 the Secretary of Labor the amount of proceeds from the 

18 sale of these allowances: 

19 ‘‘(1) For vintage years 2012 through 2021, 0.5 

20 percent of the emission allowances established for 

21 each year under section 721(a). 

22 ‘‘(2) For vintage years 2022 through 2050, 1.0 

23 percent of the emission allowances established for 

24 each year under section 721(a). 


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1 ‘‘(l) DOMESTIC ADAPTATION.—The Administrator 

2 shall allocate emission allowances for domestic adaptation 

3 as follows: 

4 ‘‘(1) To be distributed in accordance with sec5 tion 453 of the American Clean Energy and Security 

6 Act in the following amounts: 

7 ‘‘(A) For vintage years 2012 through 

8 2021, 0.9 percent of the emission allowances es9 tablished for each year under section 721(a). 

10 ‘‘(B) For vintage years 2022 through 

11 2026, 1.9 percent of the emission allowances es12 tablished for each year under section 721(a). 

13 ‘‘(C) For vintage years 2027 through 

14 2050, 3.9 percent of the emission allowances es15 tablished for each year under section 721(a). 

16 ‘‘(2) For vintage year 2012 and thereafter, the 

17 Administrator shall auction 0.1 percent of the emis18 sion allowances established for each year under sec19 tion 721(a), pursuant to section 791, and shall de20 posit the proceeds in the Climate Change Health 

21 Protection and Promotion Fund established by sec22 tion 467 of the American Clean Energy and Security 

23 Act. 

24 ‘‘(m) WILDLIFE AND NATURAL RESOURCE ADAPTA25 TION.—The Administrator shall auction pursuant to secVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00546 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 tion 791 emission allowances for domestic wildlife and nat2 ural resource adaptation in the amounts listed in para3 graphs (1) through (3) and shall deposit the proceeds from 

4 the sale of these allowances in the Natural Resources Cli5 mate Change Adaptation Account established pursuant to 

6 section 480(a) of the American Clean Energy and Security 

7 Act. Funds so deposited shall be available for expenditure, 

8 without further appropriation or fiscal year limitation. 

9 ‘‘(1) For vintage years 2012 through 2021, 1.0 

10 percent of the emission allowances established for 

11 each year under section 721(a). 

12 ‘‘(2) For vintage years 2022 through 2026, 2.0 

13 percent of the emission allowances established for 

14 each year under section 721(a). 

15 ‘‘(3) For vintage years 2027 through 2050, 4.0 

16 percent of the emission allowances established for 

17 each year under section 721(a). 

18 ‘‘(n) INTERNATIONAL ADAPTATION.—The Adminis19 trator shall allocate emission allowances for international 

20 adaptation to be distributed in accordance with part 2 of 

21 subtitle E of title IV of the American Clean Energy and 

22 Security Act in the following amounts: 

23 ‘‘(1) For vintage years 2012 through 2021, 1.0 

24 percent of the emission allowances established for 

25 each year under section 721(a). 


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1 ‘‘(2) For vintage years 2022 through 2026, 2.0 

2 percent of the emission allowances established for 

3 each year under section 721(a). 

4 ‘‘(3) For vintage years 2027 through 2050, 4.0 

5 percent of the emission allowances established for 

6 each year under section 721(a). 

7 ‘‘(o) INTERNATIONAL CLEAN TECHNOLOGY DEPLOY8 MENT.—The Administrator shall allocate emission allow9 ances for international clean technology deployment for 

10 distribution in accordance with subtitle D of title IV of 

11 the American Clean Energy and Security Act in the fol12 lowing amounts: 

13 ‘‘(1) For vintage years 2012 through 2021, 1.0 

14 percent of the emission allowances established for 

15 each year under section 721(a). 

16 ‘‘(2) For vintage years 2022 through 2026, 2.0 

17 percent of the emission allowances established for 

18 each year under section 721(a). 

19 ‘‘(3) For vintage years 2027 through 2050, 4.0 

20 percent of the emission allowances established for 

21 each year under section 721(a). 

22 ‘‘(p) RELEASE OF FUTURE ALLOWANCES.—The Ad23 ministrator shall make future year allowances available by 

24 auctioning allowances, pursuant to section 791, in the fol25 lowing amounts: 


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1 ‘‘(1) In each of calendar years 2015 through 

2 2020, a string of 0.7 billion allowances with vintage 

3 years 11 to 16 years after the year of the auction, 

4 with an equal number of allowances from each vin5 tage year in the string. 

6 ‘‘(2) In each of calendar years 2021 through 

7 2025, a string of 0.5 billion allowances with vintage 

8 years 11 to 16 years after the year of the auction, 

9 with an equal number of allowances from each vin10 tage year in the string. 

11 ‘‘(3) In each of calendar years 2026 through 

12 2030, a string of 0.3 billion allowances with vintage 

13 years 11 to 16 years after the year of the auction, 

14 with an equal number of allowances from each vin15 tage year in the string. 

16 ‘‘(q) DEFICIT REDUCTION.— 

17 ‘‘(1) For each of vintage years 2012 through 

18 2025, any allowances not designated for distribution 

19 or auction pursuant to section 781, subsections (a) 

20 through (o) of this section, or section 790 shall be 

21 auctioned by the Administrator pursuant to section 

22 791 and the proceeds shall be deposited into the 

23 Treasury. 

24 ‘‘(2) Unless otherwise specified, any allowances 

25 allocated pursuant to subsections (a) through (o) 


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1 and not distributed by March 31 of the calendar 

2 year following the allowance’s vintage year, shall be 

3 auctioned by the Administrator and the proceeds 

4 shall be deposited into the Treasury. 

5 ‘‘(3) For auctions conducted through vintage 

6 year 2025 pursuant to subsection (p), the auction 

7 proceeds shall be deposited into the Treasury. 

8 ‘‘(r) CLIMATE CHANGE CONSUMER DIVIDEND.—For 

9 each of vintage years 2026 through 2050, the Adminis10 trator shall auction pursuant to section 791 any allowance 

11 established under section 721(a) for that year and not des12 ignated for distribution or auction pursuant to subsections 

13 (a) through (p), and place the proceeds from the sale of 

14 these allowances in the Climate Change Dividend Fund. 

15 For auctions conducted in 2026 and thereafter pursuant 

16 to subsection (p), the auction proceeds shall be deposited 

17 into the Climate Change Dividend Fund. Funds so depos18 ited shall be available for expenditure, without further ap19 propriation or fiscal year limitation. 

20 ‘‘SEC. 783. ELECTRICITY CONSUMERS. 

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

22 ‘‘(1) ELECTRICITY LOCAL DISTRIBUTION COM23 PANY.—The term ‘electricity local distribution com24 pany’ means an electric utility— 


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1 ‘‘(A) that has a legal, regulatory, or con2 tractual obligation to deliver electricity directly 

3 to retail consumers in the United States, re4 gardless of whether that entity or another enti5 ty sells the electricity as a commodity to those 

6 retail consumers; and 

7 ‘‘(B) the retail rates of which, except in 

8 the case of a registered electric cooperative, are 

9 regulated by a State regulatory authority, regu10 latory commission, municipality, public utility, 

11 or by an Indian tribe pursuant to tribal law. 

12 ‘‘(2) LONG-TERM CONTRACT GENERATOR.—The 

13 term ‘long-term contract generator’ means a quali14 fying small power production facility or a qualifying 

15 cogeneration facility (within the meaning of section 

16 3(17)(C) or 3(18)(B) of the Federal Power Act), or 

17 a new independent power production facility (within 

18 the meaning of section 416(a)(2) of this Act, except 

19 that subparagraph (C) of such definition shall not 

20 apply for purposes of this paragraph), that is— 

21 ‘‘(A) a covered entity; 

22 ‘‘(B) as of the commencement of operation, 

23 a facility consisting of one or more utility units 

24 with total installed net output capacity (in 

25 MWe) of no more than 130 percent of the faVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00551 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 cility’s total planned net output capacity (in 

2 MWe); 

3 ‘‘(C) as of the date of enactment of this 

4 title, a facility with a power sales agreement ex5 ecuted before January 1, 2007, that governs 

6 the facility’s electricity sales and provides for 

7 sales at a price (whether a fixed price or a price 

8 formula) for electricity that does not allow for 

9 recovery of the costs of compliance with the lim10 itation on greenhouse gas emissions under this 

11 title; and 

12 ‘‘(B) not a merchant coal generator (within 

13 the meaning of paragraph (3)). 

14 ‘‘(3) MERCHANT COAL GENERATOR.—The term 

15 ‘merchant coal generator’ means an electric genera16 tion facility that— 

17 ‘‘(A) is a covered entity; 

18 ‘‘(B) derives at least 85 percent of its heat 

19 input from coal, petroleum coke, or any com20 bination of these 2 fuels; 

21 ‘‘(C) is not owned by a Federal, State, or 

22 regional agency or power authority; and 

23 ‘‘(D) generates electricity for sale to oth24 ers, provided that such sales are not subject 

25 to— 


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1 ‘‘(i) retail rate regulation by a State 

2 public utility commission; or 

3 ‘‘(ii) self-regulation of rates by a local 

4 government, State agency, or electric coop5 erative. 

6 ‘‘(4) STATE REGULATORY AUTHORITY.—The 

7 term ‘State regulatory authority’ has the meaning 

8 given that term in section 3(17) of the Public Utility 

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

10 2602(17)). 

11 ‘‘(b) ELECTRICITY LOCAL DISTRIBUTION COMPA12 NIES.— 

13 ‘‘(1) ALLOCATION.—Not later than June 30 of 

14 2011 and each calendar year thereafter through 

15 2028, the Administrator shall distribute to electricity 

16 local distribution companies the quantity of emission 

17 allowances allocated for the electricity sector for the 

18 following vintage year pursuant to section 782(a), 

19 provided that the Administrator shall first subtract 

20 from such quantity and distribute or reserve for dis21 tribution the quantity of emission allowances for the 

22 relevant vintage year that are required for distribu23 tion under subsections (c) and (d) of this section. 

24 ‘‘(2) DISTRIBUTION OF ALLOWANCES.— 


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1 ‘‘(A) DISTRIBUTION BASED ON EMIS2 SIONS.— 

3 ‘‘(i) IN GENERAL.—For each vintage 

4 year, 50 percent of the emission allowances 

5 available for distribution under paragraph 

6 (1) shall be distributed by the Adminis7 trator among individual electricity local 

8 distribution companies ratably based on 

9 the annual average carbon dioxide emis10 sions attributable to generation of elec11 tricity sold at retail by each such company 

12 during— 

13 ‘‘(I) calendar years 2006 through 

14 2008; or 

15 ‘‘(II) any 3 consecutive calendar 

16 years between 1999 and 2008, inclu17 sive, that such company selects, pro18 vided that the company timely informs 

19 the Administrator of such selection. 

20 ‘‘(ii) DETERMINATION OF EMIS21 SIONS.—As part of the regulations promul22 gated pursuant to subsection (e), the Ad23 ministrator, after consultation with the 

24 Energy Information Administration, shall 

25 determine the average amount of carbon 


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1 dioxide emissions attributable to genera2 tion of electricity sold at retail by each 

3 electricity local distribution company for 

4 each of the years 1999 through 2008. 

5 Such determinations shall be as precise as 

6 practicable, taking into account the nature 

7 of data currently available and the nature 

8 of markets and regulation in effect in var9 ious regions of the country. The following 

10 requirements shall apply to such deter11 minations: 

12 ‘‘(I) The Administrator shall de13 termine the amount of fossil fuel14 based electricity delivered at retail by 

15 each electricity local distribution com16 pany, and shall use appropriate emis17 sion factors to calculate carbon diox18 ide emissions associated with the gen19 eration of such electricity. 

20 ‘‘(II) Where it is not practical to 

21 determine the precise fuel mix for the 

22 electricity delivered at retail by an in23 dividual electricity local distribution 

24 company, the Administrator may use 

25 the best available data, including averVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00555 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 age data on a regional basis with ref2 erence to Regional Transmission Or3 ganizations or regional entities (as 

4 that term is defined in section 

5 215(a)(7) of the Federal Power Act 

6 (16 U.S.C. 824o(a)(7)), to estimate 

7 fuel mix and emissions. Different 

8 methodologies may be applied in dif9 ferent regions if appropriate to obtain 

10 the most accurate estimate. 

11 ‘‘(B) DISTRIBUTION BASED ON DELIV12 ERIES.— 

13 ‘‘(i) INITIAL ALLOCATION FOR14 MULA.—Except as provided in clause (ii), 

15 for each vintage year, the Administrator 

16 shall distribute 50 percent of the emission 

17 allowances allocated under paragraph (1) 

18 of this subsection among individual elec19 tricity local distribution companies ratably 

20 based on each electricity local distribution 

21 company’s annual average retail electricity 

22 deliveries for 2006 through 2008, unless 

23 the owner or operator of the company se24 lects 3 other consecutive years between 


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1 1999 and 2008, inclusive, and timely noti2 fies the Administrator of its selection. 

3 ‘‘(ii) UPDATING.—Prior to distrib4 uting 2015 vintage emission allowances 

5 under this subparagraph and at 3-year in6 tervals thereafter, the Administrator shall 

7 update the distribution formula under this 

8 subparagraph to reflect changes in each 

9 electricity local distribution company’s 

10 service territory since the most recent for11 mula was established. For each successive 

12 3-year period, the Administrator shall dis13 tribute allowances ratably among indi14 vidual electricity local distribution compa15 nies based on the product of— 

16 ‘‘(I) each electricity local dis17 tribution company’s average annual 

18 deliveries per customer during cal19 endar years 2006 through 2008, or 

20 during the 3 alternative consecutive 

21 years selected by such company under 

22 clause (i); and 

23 ‘‘(II) the number of customers of 

24 such electricity local distribution com25 pany in the most recent year in which 


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1 the formula is updated under this 

2 clause. 

3 ‘‘(3) USE OF ALLOWANCES.— 

4 ‘‘(A) RATEPAYER BENEFIT.—Emission al5 lowances distributed to an electricity local dis6 tribution company under this subsection shall 

7 be used exclusively for the benefit of retail rate8 payers of such electricity local distribution com9 pany. Emission allowances received by an elec10 tricity local distribution company under this 

11 subsection may not be used to support elec12 tricity sales to entities or persons other than 

13 the retail ratepayers of such electricity local dis14 tribution company. 

15 ‘‘(B) RATEPAYER CLASSES.—In using 

16 emission allowances distributed under this sec17 tion for the benefit of ratepayers, an electricity 

18 local distribution company shall ensure that 

19 ratepayer benefits are distributed— 

20 ‘‘(i) among ratepayer classes ratably 

21 based on electricity deliveries to each class; 

22 and 

23 ‘‘(ii) equitably among individual rate24 payers within each ratepayer class, includVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00558 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 ing entities that receive emission allow2 ances pursuant to part F. 

3 ‘‘(C) LIMITATION.—No electricity local dis4 tribution company may use emission allowances 

5 to provide to any ratepayer a rebate that is 

6 based solely on the quantity of electricity deliv7 ered to such ratepayer. To the extent an elec8 tricity local distribution company uses the value 

9 of emission allowances distributed under this 

10 subsection to provide rebates, it shall, to the 

11 maximum extent practicable, provide such re12 bates with regard to the fixed portion of rate13 payers’ bills. 

14 ‘‘(D) GUIDELINES.—As part of the regula15 tions promulgated under subsection (e), the Ad16 ministrator shall prescribe specific guidelines 

17 for the implementation of the requirements of 

18 this paragraph. 

19 ‘‘(4) REGULATORY PROCEEDINGS.— 

20 ‘‘(A) REQUIREMENT.—No electricity local 

21 distribution company shall be eligible to receive 

22 emission allowances under this subsection un23 less the State regulatory authority with author24 ity over such company, or the entity with au25 thority to regulate retail electricity rates of an 


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1 electricity local distribution company not regu2 lated by a 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 

7 provides for the full implementation of the 

8 requirements of paragraph (3) of this sub9 section; and 

10 ‘‘(ii) made available to the Adminis11 trator and the public a report describing, 

12 in adequate detail, the manner in which 

13 the requirements of paragraph (3) will be 

14 implemented. 

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 

21 made available to the Administrator and the 

22 public, pursuant to subparagraph (A), not less 

23 frequently than every 5 years. 

24 ‘‘(5) PLANS AND REPORTING.— 


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1 ‘‘(A) REGULATIONS.—As part of the regu2 lations promulgated under subsection (e), the 

3 Administrator shall prescribe requirements gov4 erning plans and reports to be submitted by 

5 electricity local distribution companies in ac6 cordance with this paragraph. 

7 ‘‘(B) PLANS.—Not later than April 30 of 

8 2011 and every 5 years thereafter through 

9 2026, each electricity local distribution com10 pany shall submit to the Administrator a plan, 

11 approved by the State regulatory authority or 

12 other entity charged with regulating the retail 

13 rates of such company, describing such com14 pany’s plans for the disposition of the value of 

15 emission allowances to be received pursuant to 

16 this subsection, in accord with the requirements 

17 of this subsection. 

18 ‘‘(C) REPORTS.—Not later than June 30 

19 of 2013 and each calendar year thereafter 

20 through 2031, each electricity local distribution 

21 company that received emission allowances 

22 under this subsection in the preceding calendar 

23 year shall submit a report to the Administrator, 

24 and to the relevant State regulatory authority 

25 or the entity with authority to regulate retail 


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•HR 2454 IH

1 electricity rates in the case of an electricity 

2 local distribution company not regulated by a 

3 State regulatory authority, describing the dis4 position of the value of any emission allowances 

5 received by the company in the prior calendar 

6 year pursuant to this subsection, including— 

7 ‘‘(i) a description of sales, transfer, 

8 exchange, or use by the company for com9 pliance with obligations under this title, of 

10 any such emission allowances; 

11 ‘‘(ii) the monetary value received by 

12 the company, whether in money or in some 

13 other form, from the sale, transfer, or ex14 change of emission allowances received by 

15 the company under this section; 

16 ‘‘(iii) the manner in which the com17 pany’s disposition of emission allowances 

18 received under this subsection complies 

19 with the requirements of this subsection, 

20 including each of the requirements of para21 graph (3); and 

22 ‘‘(iv) such other information as the 

23 Administrator may require pursuant to 

24 subparagraph (A). 


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1 ‘‘(D) PUBLICATION.—The Administrator 

2 shall make available to the public all plans and 

3 reports submitted by electricity local distribu4 tion companies under this section, including by 

5 publishing such plans and reports on the Inter6 net. 

7 ‘‘(6) AUDITS.—Each year, the Administrator 

8 shall conduct an audit of a representative sample of 

9 electricity local distribution companies receiving 

10 emission allowances under this subsection to ensure 

11 compliance with the requirements of this subsection. 

12 In selecting electricity local distribution companies 

13 for audit, the Administrator shall take into account 

14 any credible evidence of noncompliance with the re15 quirements of this subsection. The Administrator 

16 shall make available to the public a report describing 

17 the results of each such audit, including by pub18 lishing such report on the Internet. 

19 ‘‘(7) ENFORCEMENT.—A violation of any re20 quirement of this subsection shall be a violation of 

21 this Act. Each emission allowance the value of which 

22 is used in violation of the requirements of this sub23 section shall be a separate violation. 

24 ‘‘(c) MERCHANT COAL GENERATORS.— 


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1 ‘‘(1) QUALIFYING EMISSIONS.—The qualifying 

2 emissions for a merchant coal generator for a given 

3 calendar year shall be the product of the number of 

4 megawatt hours of electricity generated by such gen5 erator in such calendar year and the average carbon 

6 dioxide emissions per megawatt hour generated by 

7 such generator during calendar years 2006 through 

8 2008, provided that the number of megawatt hours 

9 in a given calendar year for purposes of such cal10 culation shall be reduced in proportion to the portion 

11 of such generator’s carbon dioxide emissions that 

12 were captured and sequestered in such calendar year 

13 and for which such generator received or will receive 

14 bonus emission allowances under section 785. 

15 ‘‘(2) PHASE-DOWN SCHEDULE.—The Adminis16 trator shall identify an annual phase-down factor, 

17 applicable to distributions to merchant coal genera18 tors for each of calendar years 2012 through 2029, 

19 that corresponds to the overall decline in the amount 

20 of emission allowances to be allocated to the elec21 tricity sector in such years pursuant to section 

22 782(a). Such factor shall— 

23 ‘‘(A) for calendar year 2012, be equal to 

24 1.0; 


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1 ‘‘(B) for each of calendar years 2013 

2 through 2029, correspond to the quotient of— 

3 ‘‘(i) the quantity of emission allow4 ances to be allocated to the electricity sec5 tor under section 782(a) for such calendar 

6 year; divided by 

7 ‘‘(ii) the quantity of emission allow8 ances to be allocated to the electricity sec9 tor under section 782(a) for calendar year 

10 2012. 

11 ‘‘(3) DISTRIBUTION OF EMISSION ALLOW12 ANCES.—Not later than March 1 of 2013 and each 

13 calendar year through 2030, the Administrator shall 

14 distribute emission allowances of the preceding vin15 tage year to each merchant coal generator equal to 

16 the product of— 

17 ‘‘(A) 0.5; 

18 ‘‘(B) the qualifying emissions for such 

19 merchant coal generator for the preceding year, 

20 as determined under paragraph (1); and 

21 ‘‘(C) the phase-down factor for the pre22 ceding calendar year, as identified under para23 graph (2). 

24 ‘‘(4) ADJUSTMENT.— 


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1 ‘‘(A) STUDY.—Not later than July 1, 

2 2014, the Administrator, in consultation with 

3 the Federal Energy Regulatory Commission, 

4 shall complete a study to determine whether the 

5 allocation formula under paragraph (3) is re6 sulting in, or is likely to result in, windfall prof7 its to merchant coal generators or substantially 

8 disparate treatment of merchant coal genera9 tors operating in different markets or regions. 

10 ‘‘(B) REGULATION.—If the Administrator, 

11 in consultation with the Federal Energy Regu12 latory Commission, makes an affirmative find13 ing of windfall profits or disparate treatment 

14 under subparagraph (A), the Administrator 

15 shall, not later than 18 months after the com16 pletion of the study described in subparagraph 

17 (A), promulgate regulations providing for the 

18 adjustment of the allocation formula under 

19 paragraph (3) to mitigate, to the extent prac20 ticable, such windfall profits, if any, and such 

21 disparate treatment, if any. 

22 ‘‘(5) LIMITATION ON ALLOWANCES.—Notwith23 standing paragraph (3) or (4), for any vintage year 

24 the Administrator shall distribute under this sub25 section no more than 10 percent of the total quanVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00566 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 tity of emission allowances available for such vintage 

2 year for distribution to the electricity sector under 

3 section 782(a). If the quantity of emission allow4 ances that would otherwise be distributed pursuant 

5 to paragraph (3) or (4) for any vintage year would 

6 exceed such limit, the Administrator shall distribute 

7 10 percent of the total emission allowances available 

8 for distribution under section 782(a) for such vin9 tage year ratably among merchant coal generators 

10 based on the formula in paragraph (3) or (4). 

11 ‘‘(d) GENERATORS WITH LONG-TERM POWER PUR12 CHASE AGREEMENTS.— 

13 ‘‘(1) RESERVED ALLOWANCES.—Notwith14 standing subsections (b) and (c) of this section, the 

15 Administrator shall withhold from distribution to 

16 electricity local distribution companies a number of 

17 emission allowances equal to 105 percent of the 

18 emission allowances the Administrator anticipates 

19 will be distributed to long-term contract generators 

20 under this subsection. If not required to distribute 

21 all of these reserved allowances under this sub22 section, the Administrator shall distribute any re23 maining emission allowances to the electricity local 

24 distribution companies in accordance with subsection 

25 (b). 


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1 ‘‘(2) DISTRIBUTION.—Not later than March 1 

2 of 2013 and each calendar year through 2030, the 

3 Administrator shall distribute to the owner or oper4 ator of each long-term contract generator the num5 ber of emission allowances of the preceding vintage 

6 year that are equal to the number of tons of carbon 

7 dioxide emitted as a result of a qualifying long-term 

8 power purchase agreement referred to in subsection 

9 (a)(2)(C). 

10 ‘‘(3) DURATION.—A long-term contract gener11 ator shall cease to be eligible to receive allocations 

12 under this subsection upon the earliest of the fol13 lowing dates: 

14 ‘‘(A) The date when the facility no longer 

15 qualifies as a qualifying small power production 

16 facility or a qualifying cogeneration facility 

17 (within the meaning of section 3(17)(C) or 

18 3(18)(B) of the Federal Power Act), or a new 

19 independent power production facility (within 

20 the meaning of section 416(a)(2) of this Act, 

21 except that subparagraph (C) of such definition 

22 shall not apply for purposes of this clause). 

23 ‘‘(B) The date when the facility no longer 

24 meets the total installed net output capacity criVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00568 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 terion required to be met as of the commence2 ment of operation in subsection (a)(2)(B). 

3 ‘‘(C) The date when the power purchase 

4 agreement referred to in subsection (a)(2)(C)— 

5 ‘‘(i) expires; 

6 ‘‘(ii) is terminated; or 

7 ‘‘(iii) is amended in any way that 

8 changes the location of the facility, the 

9 price (whether a fixed price or price for10 mula) for electricity sold under such agree11 ment, the quantity of electricity sold under 

12 the agreement, or the expiration or termi13 nation date of the agreement. 

14 ‘‘(4) ELIGIBILITY.—To be eligible to receive al15 lowance distributions under this subsection, a long16 term contract generator shall submit each of the fol17 lowing in writing to the Administrator within 180 

18 days after the date of enactment of this title, and 

19 not later than September 30 of each vintage year for 

20 which such generator wishes to receive emission al21 lowances: 

22 ‘‘(A) A certificate of representation de23 scribed in section 700(16). 

24 ‘‘(B) An identification of each owner and 

25 each operator of the facility. 


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1 ‘‘(C) An identification of the units at the 

2 facility and the location of the facility. 

3 ‘‘(D) A written certification by the des4 ignated representative that the facility meets all 

5 the requirements of the definition of a long6 term contract generator. 

7 ‘‘(E) The expiration date of the power pur8 chase agreement referred to in subsection 

9 (a)(2)(C). 

10 ‘‘(F) A copy of the power purchase agree11 ment referred to in subsection (a)(2)(C). 

12 ‘‘(5) NOTIFICATION.—Not later than 30 days 

13 after a facility loses, in accordance with paragraph 

14 (3), its eligibility for emission allowances distributed 

15 pursuant to this subsection, the designated rep16 resentative of such facility shall notify the Adminis17 trator in writing when, and on what basis, the facil18 ity lost its eligibility to receive emission allowances. 

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

20 date of enactment of this title, the Administrator, in con21 sultation with the Federal Energy Regulatory Commis22 sion, shall promulgate regulations to implement the re23 quirements of this section. 

24 ‘‘SEC. 784. NATURAL GAS CONSUMERS. 

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


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1 ‘‘(1) NATURAL GAS LOCAL DISTRIBUTION COM2 PANY.—The term ‘natural gas local distribution 

3 company’ means a natural gas local distribution 

4 company that is a covered entity. 

5 ‘‘(2) COST-EFFECTIVE.—The term ‘cost-effec6 tive’, with respect to an energy efficiency program, 

7 means that the program meets the Total Resource 

8 Cost Test, which requires that the net present value 

9 of economic benefits over the life of the program, in10 cluding avoided supply and delivery costs and de11 ferred or avoided investments, is greater than the 

12 net present value of the economic costs over the life 

13 of the program, including program costs and incre14 mental costs borne by the energy consumer. 

15 ‘‘(b) ALLOCATION.—Not later than June 30 of 2015 

16 and each calendar year thereafter through 2028, the Ad17 ministrator shall distribute to natural gas local distribu18 tion companies the quantity of emission allowances allo19 cated for the following vintage year pursuant to section 

20 782(b). Such allowances shall be distributed among local 

21 natural gas distribution companies based on the following 

22 formula: 

23 ‘‘(1) INITIAL FORMULA.—Except as provided in 

24 paragraph (2), for each vintage year, the Adminis25 trator shall distribute emission allowances among 


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1 natural gas local distribution companies ratably 

2 based on each such company’s annual average retail 

3 natural gas deliveries for 2006 through 2008, unless 

4 the owner or operator of the company selects 3 other 

5 consecutive years between 1999 and 2008, inclusive, 

6 and timely notifies the Administrator of its selection. 

7 ‘‘(2) UPDATING.—Prior to distributing 2019 

8 vintage emission allowances and at 3-year intervals 

9 thereafter, the Administrator shall update the dis10 tribution formula under this subsection to reflect 

11 changes in each natural gas local distribution com12 pany’s service territory since the most recent for13 mula was established. For each successive 3-year pe14 riod, the Administrator shall distribute allowances 

15 ratably among natural gas local distribution compa16 nies based on the product of— 

17 ‘‘(A) each natural gas local distribution 

18 company’s average annual natural gas deliveries 

19 per customer during calendar years 2006 

20 through 2008, or during the 3 alternative con21 secutive years selected by such company under 

22 paragraph (1); and 

23 ‘‘(B) the number of customers of such nat24 ural gas local distribution company in the most 


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1 recent year in which the formula is updated 

2 under this paragraph. 

3 ‘‘(c) USE OF ALLOWANCES.— 

4 ‘‘(1) RATEPAYER BENEFIT.—Emission allow5 ances distributed to a natural gas local distribution 

6 company under this section shall be used exclusively 

7 for the benefit of retail ratepayers of such natural 

8 gas local distribution company. Emission allowances 

9 received by a natural gas local distribution company 

10 under this section may not be used to support nat11 ural gas sales to entities or persons other than the 

12 retail ratepayers of such natural gas local distribu13 tion company. 

14 ‘‘(2) RATEPAYER CLASSES.—In using emission 

15 allowances distributed under this section for the ben16 efit of ratepayers, a natural gas local distribution 

17 company shall ensure that ratepayer benefits are 

18 distributed— 

19 ‘‘(A) among ratepayer classes ratably 

20 based on natural gas deliveries to each class; 

21 and 

22 ‘‘(B) equitably among individual ratepayers 

23 within each ratepayer class. 

24 ‘‘(3) LIMITATION.—No natural gas local dis25 tribution company may use emission allowances to 


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1 provide to any ratepayer a rebate that is based solely 

2 on the quantity of natural gas delivered to such 

3 ratepayer. To the extent a natural gas local distribu4 tion company uses the value of emission allowances 

5 distributed under this subsection to provide rebates, 

6 it shall, to the maximum extent practicable, provide 

7 such rebates with regard to the fixed portion of rate8 payers’ bills. 

9 ‘‘(4) ENERGY EFFICIENCY PROGRAMS.—The 

10 value of no less than one third of the emission allow11 ances distributed to natural gas local distribution 

12 companies pursuant to this section in any calendar 

13 year shall be used for cost-effective energy efficiency 

14 programs for natural gas consumers. Such programs 

15 must be authorized and overseen by the State regu16 latory authority, or by the entity with regulatory au17 thority over retail natural gas rates in the case of 

18 a natural gas local distribution company that is not 

19 regulated by a State regulatory authority. 

20 ‘‘(5) GUIDELINES.—As part of the regulations 

21 promulgated under subsection (h), the Administrator 

22 shall prescribe specific guidelines for the implemen23 tation of the requirements of this subsection. 

24 ‘‘(d) REGULATORY PROCEEDINGS.— 


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1 ‘‘(1) REQUIREMENT.—No natural gas local dis2 tribution company shall be eligible to receive emis3 sion allowances under this section unless the State 

4 regulatory authority with authority over such com5 pany, or the entity with authority to regulate retail 

6 rates of a natural gas local distribution company not 

7 regulated by a State regulatory authority, has— 

8 ‘‘(A) promulgated a regulation or com9 pleted a rate proceeding (or the equivalent, in 

10 the case of a ratemaking entity other than a 

11 State regulatory authority) that provides for 

12 the full implementation of the requirements of 

13 subsection (c); and 

14 ‘‘(B) made available to the Administrator 

15 and the public a report describing, in adequate 

16 detail, the manner in which the requirements of 

17 subsection (c) will be implemented. 

18 ‘‘(2) UPDATING.—The Administrator shall re19 quire, as a condition of continued receipt of emission 

20 allowances under this section by a natural gas local 

21 distribution company, that a new regulation be pro22 mulgated or rate proceeding be completed, and a 

23 new report be made available to the Administrator 

24 and the public, pursuant to paragraph (1), not less 

25 frequently than every 5 years. 


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1 ‘‘(e) PLANS AND REPORTING.— 

2 ‘‘(1) REGULATIONS.—As part of the regulations 

3 promulgated under subsection (h), the Administrator 

4 shall prescribe requirements governing plans and re5 ports to be submitted by natural gas local distribu6 tion companies in accordance with this subsection. 

7 ‘‘(2) PLANS.—Not later than April 30 of 2015 

8 and every 5 years thereafter through 2025, each 

9 natural gas local distribution company shall submit 

10 to the Administrator a plan, approved by the State 

11 regulatory authority or other entity charged with 

12 regulating the retail rates of such company, describ13 ing such company’s plans for the disposition of the 

14 value of emission allowances to be received pursuant 

15 to this section, in accord with the requirements of 

16 this section. 

17 ‘‘(3) REPORTS.—Not later than June 30 of 

18 2017 and each calendar year thereafter through 

19 2031, each natural gas local distribution company 

20 that received emission allowances under this section 

21 in the preceding calendar year shall submit a report 

22 to the Administrator, approved by the relevant State 

23 regulatory authority or the entity with authority to 

24 regulate retail natural gas rates in the case of a nat25 ural gas local distribution company not regulated by 


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1 a State regulatory authority, describing the disposi2 tion of the value of any emission allowances received 

3 by the company in the prior calendar year pursuant 

4 to this subsection, including— 

5 ‘‘(A) a description of sales, transfer, ex6 change, or use by the company for compliance 

7 with obligations under this title, of any such 

8 emission allowances; 

9 ‘‘(B) the monetary value received by the 

10 company, whether in money or in some other 

11 form, from the sale, transfer, or exchange of 

12 emission allowances received by the company 

13 under this section; 

14 ‘‘(C) the manner in which the company’s 

15 disposition of emission allowances received 

16 under this subsection complies with the require17 ments of this section, including each of the re18 quirements of subsection (c); 

19 ‘‘(D) the cost-effectiveness of, and energy 

20 savings achieved by, energy efficiency programs 

21 supported through such emission allowances; 

22 and 

23 ‘‘(E) such other information as the Admin24 istrator may require pursuant to paragraph (1). 


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1 ‘‘(4) PUBLICATION.—The Administrator shall 

2 make available to the public all plans and reports 

3 submitted by natural gas local distribution compa4 nies under this subsection, including by publishing 

5 such plans and reports on the Internet. 

6 ‘‘(f) AUDITS.—Each year, the Administrator shall 

7 conduct an audit of a representative sample of natural gas 

8 local distribution companies receiving emission allowances 

9 under this section to ensure compliance with the require10 ments of this section. In selecting natural gas local dis11 tribution companies for audit, the Administrator shall 

12 take into account any credible evidence of noncompliance 

13 with the requirements of this section. The Administrator 

14 shall make available to the public a report describing the 

15 results of each such audit, including by publishing such 

16 report on the Internet. 

17 ‘‘(g) ENFORCEMENT.—A violation of any require18 ment of this section shall be a violation of this Act. Each 

19 emission allowance the value of which is used in violation 

20 of the requirements of this section shall be a separate vio21 lation. 

22 ‘‘(h) REGULATIONS.—Not later than January 1, 

23 2014, the Administrator, in consultation with the Federal 

24 Energy Regulatory Commission, shall promulgate regula25 tions to implement the requirements of this section. 


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1 ‘‘SEC. 785. HOME HEATING OIL AND PROPANE CONSUMERS. 

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

3 ‘‘(1) CARBON CONTENT.—The term ‘carbon 

4 content’ means the amount of carbon dioxide that 

5 will be emitted as a result of the combustion of a 

6 fuel. 

7 ‘‘(2) COST-EFFECTIVE.—The term ‘cost-effec8 tive’, with respect to an energy efficiency program, 

9 means that the program meets the Total Resource 

10 Cost Test, which requires that the net present value 

11 of economic benefits over the life of the program, in12 cluding avoided supply and delivery costs and de13 ferred or avoided investments, is greater than the 

14 net present value of the economic costs over the life 

15 of the program, including program costs and incre16 mental costs borne by the energy consumer. 

17 ‘‘(b) ALLOCATION.—Not later than September 30 of 

18 each of calendar years 2012 through 2030, the Adminis19 trator shall distribute among the States, in accordance 

20 with this section, the quantity of emission allowances allo21 cated pursuant to section 782(c). 

22 ‘‘(c) DISTRIBUTION AMONG STATES.—The Adminis23 trator shall distribute allowances among the States under 

24 this section each year ratably based on the ratio of— 


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1 ‘‘(1) the carbon content of home heating oil and 

2 propane sold to consumers within each State in the 

3 preceding year for residential or commercial uses; to 

4 ‘‘(2) the carbon content of home heating oil and 

5 propane sold to consumers within the United States 

6 in the preceding year for residential or commercial 

7 uses. 

8 ‘‘(d) USE OF ALLOWANCES.— 

9 ‘‘(1) IN GENERAL.—States shall use emission 

10 allowances distributed under this section exclusively 

11 for the benefit of consumers of home heating oil or 

12 propane for residential or commercial purposes. 

13 Such proceeds shall be used exclusively for— 

14 ‘‘(A) cost-effective energy efficiency pro15 grams for consumers that use home heating oil 

16 or propane for residential or commercial pur17 poses; or 

18 ‘‘(B) rebates or other direct financial as19 sistance programs for consumers of home heat20 ing oil or propane used for residential or com21 mercial purposes. 

22 ‘‘(2) ADMINISTRATION AND DELIVERY MECHA23 NISMS.—In administering programs supported by 

24 this section, States shall— 


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1 ‘‘(A) use no less than 50 percent of the 

2 value of emission allowances received under this 

3 section for cost-effective efficiency programs to 

4 reduce consumers’ overall fuel costs; 

5 ‘‘(B) to the extent practicable, deliver con6 sumer support under this section through exist7 ing energy efficiency and consumer energy as8 sistance programs or delivery mechanisms, in9 cluding, where appropriate, programs or mecha10 nisms administered by parties other than the 

11 State; and 

12 ‘‘(C) seek to coordinate the administration 

13 and delivery of energy efficiency and consumer 

14 energy assistance programs funded under this 

15 section, with one another and with existing pro16 grams for various fuel types, so as to deliver 

17 comprehensive, fuel-blind, coordinated programs 

18 to consumers. 

19 ‘‘(e) REPORTING.—Each State receiving emission al20 lowances under this section shall submit to the Adminis21 trator, within 12 months of each receipt of such allow22 ances, a report, in accordance with such requirements as 

23 the Administrator may prescribe, that— 

24 ‘‘(1) describes the State’s use of emission allow25 ances distributed under this section, including a deVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00581 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 scription of the energy efficiency and consumer as2 sistance programs supported with such allowances; 

3 ‘‘(2) demonstrates the cost-effectiveness of, and 

4 the energy savings achieved by, energy efficiency 

5 programs supported under this section; and 

6 ‘‘(3) includes a report prepared by an inde7 pendent third party, in accordance with such regula8 tions as the Administrator may promulgate, evalu9 ating the performance of the energy efficiency and 

10 consumer assistance programs supported under this 

11 section. 

12 ‘‘(f) ENFORCEMENT.—If the Administrator deter13 mines that a State is not in compliance with this section, 

14 the Administrator may withhold a portion of the allow15 ances, the value of which is equal to up to twice the value 

16 of the allowances that the State failed to use in accordance 

17 with the requirements of this section, that such State 

18 would otherwise be eligible to receive under this section 

19 in later years. Allowances withheld pursuant to this sub20 section shall be distributed among the remaining States 

21 ratably in accordance with the formula in subsection (c). 

22 ‘‘SEC. 786–788. øSECTIONS RESERVED¿. 

23 ‘‘SEC. 789. CLIMATE CHANGE REBATES. 

24 ‘‘(a) REBATE.—Not later than October 31 of each 

25 calendar year, the President, or such Federal agency or 


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1 department as the President may designate, shall dis2 tribute the funds in the Consumer Climate Change Rebate 

3 Fund on a per capita basis to each household in the 

4 United States. 

5 ‘‘(b) LIMITATIONS.—The President, or such Federal 

6 agency or department as the President may designate, 

7 shall establish procedures to ensure that individuals who 

8 are not— 

9 ‘‘(1) citizens or nationals of the United States; 

10 or 

11 ‘‘(2) immigrants lawfully residing in the United 

12 States, 

13 are excluded for the purpose of calculating and distrib14 uting rebates under this section. 

15 ‘‘SEC. 790. EXCHANGE FOR STATE-ISSUED ALLOWANCES. 

16 ‘‘(a) IN GENERAL.—Not later than one year after the 

17 date of enactment of this title, the Administrator shall 

18 issue regulations allowing any person in the United States 

19 to exchange greenhouse gas emission allowances issued be20 fore December 31, 2011, by the State of California or for 

21 the Regional Greenhouse Gas Initiative, or the Western 

22 Climate Initiative (in this section referred to as ‘State al23 lowances’) for emission allowances established by the Ad24 ministrator under section 721(a). 


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1 ‘‘(b) REGULATIONS.—Regulations issued under sub2 section (a) shall— 

3 ‘‘(1) provide that a person exchanging State al4 lowances under this section receive emission allow5 ances established under section 721(a) in the 

6 amount that is sufficient to compensate for the cost 

7 of obtaining and holding such State allowances; 

8 ‘‘(2) establish a deadline by which persons must 

9 exchange the State allowances; and 

10 ‘‘(3) provide that the Federal emission allow11 ances disbursed pursuant to this section shall be de12 ducted from the allowances to be auctioned pursuant 

13 to section 782(b). 

14 ‘‘(c) COST OF OBTAINING STATE ALLOWANCE.—For 

15 purposes of this section, the cost of obtaining a State al16 lowance shall be the average auction price, for emission 

17 allowances issued in the year in which the State allowance 

18 was issued, under the program under which the State al19 lowance was issued. 

20 ‘‘SEC. 791. AUCTION PROCEDURES. 

21 ‘‘(a) IN GENERAL.—To the extent that auctions of 

22 emission allowances by the Administrator are authorized 

23 by this part, such auctions shall be carried out pursuant 

24 to this section and the regulations established hereunder. 


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1 ‘‘(b) INITIAL REGULATIONS.—Not later than 12 

2 months after the date of enactment of this title, the Ad3 ministrator, in consultation with other agencies, as appro4 priate, shall promulgate regulations governing the auction 

5 of allowances under this section. Such regulations shall in6 clude the following requirements: 

7 ‘‘(1) FREQUENCY; FIRST AUCTION.—Auctions 

8 shall be held four times per year at regular intervals, 

9 with the first auction to be held no later than March 

10 31, 2011. 

11 ‘‘(2) AUCTION SCHEDULE; CURRENT AND FU12 TURE VINTAGES.—The Administrator shall, at each 

13 quarterly auction under this section, offer for sale 

14 both a portion of the allowances with the same vin15 tage year as the year in which the auction is being 

16 conducted and a portion of the allowances with vin17 tage years from future years. The preceding sen18 tence shall not apply to auctions held before 2012, 

19 during which period, by necessity, the Administrator 

20 shall auction only allowances with a vintage year 

21 that is later than the year in which the auction is 

22 held. Beginning with the first auction and at each 

23 quarterly auction held thereafter, the Administrator 

24 may offer for sale allowances with vintage years of 


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1 up to four years after the year in which the auction 

2 is being conducted. 

3 ‘‘(3) AUCTION FORMAT.—Auctions shall follow 

4 a single-round, sealed-bid, uniform price format. 

5 ‘‘(4) PARTICIPATION; FINANCIAL ASSURANCE.— 

6 Auctions shall be open to any person, except that 

7 the Administrator may establish financial assurance 

8 requirements to ensure that auction participants can 

9 and will perform on their bids. 

10 ‘‘(5) DISCLOSURE OF BENEFICIAL OWNER11 SHIP.—Each bidder in the auction shall be required 

12 to disclose the person or entity sponsoring or bene13 fitting from the bidder’s participation in the auction 

14 if such person or entity is, in whole or in part, other 

15 than the bidder. 

16 ‘‘(6) PURCHASE LIMITS.—No person may, di17 rectly or in concert with another participant, pur18 chase more than 5 percent of the allowances offered 

19 for sale at any quarterly auction. 

20 ‘‘(7) PUBLICATION OF INFORMATION.—After 

21 the auction, the Administrator shall, in a timely 

22 fashion, publish the identities of winning bidders, 

23 the quantity of allowances obtained by each winning 

24 bidder, and the auction clearing price. 


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1 ‘‘(8) OTHER REQUIREMENTS.—The Adminis2 trator may include in the regulations such other re3 quirements or provisions as the Administrator, in 

4 consultation with other agencies, as appropriate, 

5 considers appropriate to promote effective, efficient, 

6 transparent, and fair administration of auctions 

7 under this section. 

8 ‘‘(c) REVISION OF REGULATIONS.—The Adminis9 trator may, in consultation with other agencies, as appro10 priate, at any time, revise the initial regulations promul11 gated under subsection (b). Such revised regulations need 

12 not meet the requirements identified in subsection (b) if 

13 the Administrator determines that an alternative auction 

14 design would be more effective, taking into account factors 

15 including costs of administration, transparency, fairness, 

16 and risks of collusion or manipulation. In determining 

17 whether and how to revise the initial regulations under 

18 this subsection, the Administrator shall not consider maxi19 mization of revenues to the Federal Government. 

20 ‘‘(d) RESERVE AUCTION PRICE.—The minimum re21 serve auction price shall be $10 for auctions occurring in 

22 2012. The minimum reserve price for auctions occurring 

23 in years after 2012 shall be the minimum reserve auction 

24 price for the previous year increased by 5 percent plus 


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1 the rate of inflation (as measured by the Consumer Price 

2 Index for all urban consumers). 

3 ‘‘(e) DELEGATION OR CONTRACT.—Pursuant to reg4 ulations under this section, the Administrator may by del5 egation or contract provide for the conduct of auctions 

6 under the Administrator’s supervision by other depart7 ments or agencies of the Federal Government or by non8 governmental agencies, groups, or organizations. 

9 ‘‘SEC. 792. AUCTIONING ALLOWANCES FOR OTHER ENTI10 TIES. 

11 ‘‘(a) CONSIGNMENT.—Any entity holding emission al12 lowances or compensatory allowances may request that the 

13 Administrator auction, pursuant to section 791, the allow14 ances on consignment. 

15 ‘‘(b) PRICING.—When the Administrator acts under 

16 this section as the agent of an entity in possession of emis17 sion allowances, the Administrator is not obligated to ob18 tain the highest price possible for the emission allowances, 

19 and instead shall auction consignment allowances in the 

20 same manner and pursuant to the same rules as auctions 

21 of other allowances under section 791. The Administrator 

22 may permit emission allowance owners to condition the 

23 sale of their allowances pursuant to this section on a min24 imum reserve price. 


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1 ‘‘(c) PROCEEDS.—For emission allowances and com2 pensatory allowances auctioned pursuant to this section, 

3 notwithstanding section 3302 of title 31, United States 

4 Code, or any other provision of law, within 90 days of re5 ceipt, the United States shall transfer the proceeds from 

6 the auction to the entity which held the allowances auc7 tioned. No funds transferred from a purchaser to a seller 

8 of emission allowances or compensatory allowances under 

9 this subsection shall be held by any officer or employee 

10 of the United States or treated for any purpose as public 

11 monies. 

12 ‘‘(d) REGULATIONS.—The Administrator shall issue 

13 regulations within 24 months after the date of enactment 

14 of this title to implement this section. 

15 ‘‘SEC. 793. ESTABLISHMENT OF FUNDS. 

16 ‘‘There is established in the Treasury of the United 

17 States the following funds: 

18 ‘‘(1) The Strategic Reserve Fund. 

19 ‘‘(2) The Climate Change Rebate Fund.’’. 

20 Subtitle C—Additional Greenhouse 

21 Gas Standards 

22 SEC. 331. GREENHOUSE GAS STANDARDS. 

23 The Clean Air Act (42 U.S.C. 7401 and following), 

24 as amended by subtitles A and B of this title, is further 

25 amended by adding the following new title after title VII: 


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1 ‘‘TITLE VIII—ADDITIONAL 

2 GREENHOUSE GAS STANDARDS 

3 ‘‘SEC. 801. DEFINITIONS. 

4 ‘‘For purposes of this title, terms that are defined 

5 in title VII, except for the term ‘stationary source’, shall 

6 have the meaning given those terms in title VII. 

7 ‘‘PART A—STATIONARY SOURCE STANDARDS 

8 ‘‘SEC. 811. STANDARDS OF PERFORMANCE. 

9 ‘‘(a) UNCAPPED STATIONARY SOURCES.— 

10 ‘‘(1) INVENTORY OF SOURCE CATEGORIES.—(A) 

11 Within 12 months after the date of enactment of 

12 this title, the Administrator shall publish under sec13 tion 111(b)(1)(A) an inventory of categories of sta14 tionary sources that consist of those categories that 

15 contain sources that individually had uncapped 

16 greenhouse gas emissions greater than 10,000 tons 

17 of carbon dioxide equivalent and that, in the aggre18 gate, were responsible for emitting at least 20 per19 cent annually of the uncapped greenhouse gas emis20 sions. 

21 ‘‘(B) The Administrator shall include in the in22 ventory under this paragraph each source category 

23 that is responsible for at least 10 percent of the un24 capped methane emissions. Notwithstanding any 

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1 tion shall not include sources of enteric fermenta2 tion. The list under this paragraph shall include in3 dustrial sources, the emissions from which, when 

4 added to the capped emissions from industrial 

5 sources, constitute at least 95 percent of the green6 house gas emissions of the industrial sector. 

7 ‘‘(C) For purposes of this subsection, emissions 

8 shall be calculated using tons of carbon dioxide 

9 equivalents. In promulgating the inventory required 

10 by this paragraph and the schedule required under 

11 by paragraph (2)(C), the Administrator shall use the 

12 most current emissions data available at the time of 

13 promulgation. 

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 

17 subsection without making a finding that the source 

18 category causes or contributes significantly to, air 

19 pollution with may be reasonably anticipated to en20 danger public health or welfare. 

21 ‘‘(2) STANDARDS AND SCHEDULE.—(A) For 

22 each category identified as provided in paragraph 

23 (1), the Administrator shall promulgate standards of 

24 performance under section 111 for the uncapped 

25 emissions of greenhouse gases from stationary 


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1 sources in that category and shall promulgate cor2 responding regulations under section 111(d). 

3 ‘‘(B) The Administrator shall promulgate 

4 standards as required by this subsection for sta5 tionary sources in categories identified as provided 

6 in paragraph (1) as expeditiously as practicable, as7 suring that— 

8 ‘‘(i) standards for identified source cat9 egories that, combined, emitted 80 percent or 

10 more of the greenhouse gas emissions of the 

11 identified source categories shall be promul12 gated not later than 3 years after the date of 

13 enactment of this title and shall include stand14 ards for natural gas extraction; and 

15 ‘‘(ii) for all other identified source cat16 egories— 

17 ‘‘(I) standards for not less than an 

18 additional 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 

6 of this title. 

7 ‘‘(C) Not later than 24 months after the date 

8 of enactment of this title and after notice and oppor9 tunity for comment, the Administrator shall publish 

10 a schedule establishing a date for the promulgation 

11 of standards for each category of sources identified 

12 pursuant to paragraph (1). The date for each cat13 egory shall be consistent with the requirements of 

14 subparagraph (B). The determination of priorities 

15 for the promulgation of standards pursuant to this 

16 paragraph is not a rulemaking and shall not be sub17 ject to judicial review, except that failure to promul18 gate any standard pursuant to the schedule estab19 lished by this paragraph shall be subject to review 

20 under section 304(a)(2). 

21 ‘‘(D) Notwithstanding section 307, no action of 

22 the Administrator listing a source category under 

23 paragraph (1) shall be a final agency action subject 

24 to judicial review, except that any such action may 

25 be reviewed under section 307 when the AdminisVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00593 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 trator issues performance standards for such cat2 egory. 

3 ‘‘(b) CAPPED SOURCES.—No standard of perform4 ance shall be established under section 111 for capped 

5 greenhouse gas emissions from a capped source unless the 

6 Administrator determines that such standards are appro7 priate because of impacts, not including climate change 

8 effects. In promulgating a standard of performance under 

9 section 111 for the emission from capped sources of any 

10 air pollutant that is not a greenhouse gas, the Adminis11 trator shall treat the emission of any greenhouse gas by 

12 those entities as a nonair quality public health and envi13 ronmental impact within the meaning of section 

14 111(a)(1). 

15 ‘‘(c) PERFORMANCE STANDARDS.—For purposes of 

16 setting a performance standard for source categories iden17 tified pursuant to subsection (a)— 

18 ‘‘(1) The Administrator shall take into account 

19 the goal of reducing total United States greenhouse 

20 gas emissions as set forth in section 702. 

21 ‘‘(2) The Administrator may promulgate a de22 sign, equipment, work practice, or operational stand23 ard, or any combination thereof, under section 111 

24 in lieu of a standard of performance under that sec25 tion without regard to any determination of feasiVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00594 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 bility that would otherwise be required under section 

2 111(h). 

3 ‘‘(3) Notwithstanding any other provision, in 

4 setting the level of each standard required by this 

5 section, the Administrator shall take into account 

6 projections of allowance prices, such that the mar7 ginal cost of compliance (expressed as dollars per 

8 ton of carbon dioxide equivalent reduced) imposed by 

9 the standard would not, in the judgement of the Ad10 ministrator, be expected to exceed the Administra11 tor’s projected allowance prices over the time period 

12 spanning from the date of initial compliance to the 

13 date that the next revisions of the standard would 

14 come into effect pursuant to the schedule under sec15 tion 111(b)(1)(B). 

16 ‘‘(d) DEFINITIONS.—In this section, the terms ‘un17 capped greenhouse gas emissions’ and ‘uncapped methane 

18 emissions’ mean those greenhouse gas or methane emis19 sions, respectively, to which section 722 would not have 

20 applied if the requirements of this title had been in effect 

21 for the same year as the emissions data upon which the 

22 list is based. 

23 ‘‘(e) STUDY OF THE EFFECTS OF PERFORMANCE

24 STANDARDS.— 


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1 ‘‘(1) STUDY.—The Administrator shall conduct 

2 a study of the impacts of performance standards re3 quired under this section, which shall evaluate the 

4 effect of such standards on the— 

5 ‘‘(A) costs of achieving compliance with the 

6 economy-wide reduction goals specified in sec7 tion 702 and the reduction targets specified in 

8 section 703; 

9 ‘‘(B) available supply of offset credits; and 

10 ‘‘(C) ability to achieve the economy-wide 

11 reduction goals specified in section 702 and any 

12 other benefits of such standards. 

13 ‘‘(2) REPORT.—The Administrator shall submit 

14 to the House Energy and Commerce Committee a 

15 report that describes the results of the study not 

16 later than 18 months after the publication of the 

17 standards required under subsection (a)(2)(B)(i). 

18 ‘‘PART C—EXEMPTIONS FROM OTHER PROGRAMS 

19 ‘‘SEC. 831. CRITERIA POLLUTANTS. 

20 ‘‘No greenhouse gas may be listed under section 

21 108(a) on the basis of its effect on climate change. 

22 ‘‘SEC. 832. HAZARDOUS AIR POLLUTANTS. 

23 ‘‘No greenhouse gas may be added to the list of haz24 ardous air pollutants under section 112 unless such greenVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00596 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 house gas meets the listing criteria of section 112(b) inde2 pendent of its effects on climate change. 

3 ‘‘SEC. 833. NEW SOURCE REVIEW. 

4 ‘‘The provisions of part C of title I shall not apply 

5 to a greenhouse gas solely on the basis of its effect on 

6 climate change or regulation under title VII or this title. 

7 ‘‘SEC. 834. TITLE V PERMITS. 

8 ‘‘Notwithstanding any provision of title III or V, in 

9 determining whether a stationary source is required to 

10 apply for, or operate pursuant to, a permit under title V, 

11 the Administrator shall not consider the source’s green12 house gas emissions. 

13 ‘‘SEC. 835. EXISTING PROCEEDINGS. 

14 ‘‘Nothing in the American Clean Energy and Security 

15 Act of 2009, or the adoption thereof, shall affect the re16 quirements to be applied in administrative proceedings or 

17 litigation initiated under the Clean Air Act prior to the 

18 date of enactment of the American Clean Energy and Se19 curity Act of 2009. The preceding sentence does not apply 

20 to any covered EGU that is subject to the requirements 

21 of section 812(b).’’. 

22 SEC. 332. HFC REGULATION. 

23 (a) IN GENERAL.—Title VI of the Clean Air Act (42 

24 U.S.C. 7671 et seq.) (relating to stratospheric ozone pro25 tection) is amended by adding at the end the following: 


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1 ‘‘SEC. 619. HYDROFLUOROCARBONS (HFCS). 

2 ‘‘(a) TREATMENT AS CLASS II, GROUP II SUB3 STANCES.—Except as otherwise provided in this section, 

4 hydrofluorocarbons shall be treated as class II substances 

5 for purposes of applying the provisions of this title. The 

6 Administrator shall establish two groups of class II sub7 stances. Class II, group I substances shall include all 

8 hydrochlorofluorocarbons (HCFCs) listed pursuant to sec9 tion 602(b). Class II, group II substances shall include 

10 each of the following: 

11 ‘‘(1) Hydrofluorocarbon-23 (HFC-23). 

12 ‘‘(2) Hydrofluorocarbon-32 (HFC-32). 

13 ‘‘(3) Hydrofluorocarbon-41 (HFC-41). 

14 ‘‘(4) Hydrofluorocarbon-125 (HFC-125). 

15 ‘‘(5) Hydrofluorocarbon-134 (HFC-134). 

16 ‘‘(6) Hydrofluorocarbon-134a (HFC-134a). 

17 ‘‘(7) Hydrofluorocarbon-143 (HFC-143). 

18 ‘‘(8) Hydrofluorocarbon-143a (HFC-143a). 

19 ‘‘(9) Hydrofluorocarbon-152 (HFC-152). 

20 ‘‘(10) Hydrofluorocarbon-152a (HFC-152a). 

21 ‘‘(11) Hydrofluorocarbon-227ea (HFC-227ea). 

22 ‘‘(12) Hydrofluorocarbon-236cb (HFC-236cb). 

23 ‘‘(13) Hydrofluorocarbon-236ea (HFC-236ea). 

24 ‘‘(14) Hydrofluorocarbon-236fa (HFC-236fa). 

25 ‘‘(15) Hydrofluorocarbon-245ca (HFC-245ca). 

26 ‘‘(16) Hydrofluorocarbon-245fa (HFC-245fa). 


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1 ‘‘(17) Hydrofluorocarbon-365mfc (HFC2 365mfc). 

3 ‘‘(18) Hydrofluorocarbon-43-10mee (HFC-43- 

4 10mee). 

5 ‘‘(19) Hydrofluoroolefin-1234yf (HFO-1234yf). 

6 ‘‘(20) Hydrofluoroolefin-1234ze (HFO-1234ze). 

7 Not later than 6 months after the date of enactment of 

8 this title, the Administrator shall publish an initial list of 

9 class II, group II substances, which shall include the sub10 stances listed in this subsection. The Administrator may 

11 add to the list of class II, group II substances any other 

12 substance used as a substitute for a class I or II substance 

13 if the Administrator determines that 1 metric ton of the 

14 gas makes the same or greater contribution to global 

15 warming over 100 years as 1 metric ton of carbon dioxide. 

16 Within 24 months after the date of enactment of this sec17 tion, the Administrator shall amend the regulations under 

18 this title (including the regulations referred to in sections 

19 603, 608, 609, 610, 611, 612, and 613) to apply to class 

20 II, group II substances. 

21 ‘‘(b) CONSUMPTION AND PRODUCTION OF CLASS II, 

22 GROUP II SUBSTANCES.— 

23 ‘‘(1) IN GENERAL.— 

24 ‘‘(A) CONSUMPTION PHASE DOWN.—In the 

25 case of class II, group II substances, in lieu of 


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1 applying section 605 and the regulations there2 under, the Administrator shall promulgate reg3 ulations phasing down the consumption of class 

4 II, group II substances in the United States, 

5 and the importation of products containing any 

6 class II, group II substance, in accordance with 

7 this subsection within 18 months after the date 

8 of enactment of this section. Effective January 

9 1, 2012, it shall be unlawful for any person to 

10 produce any class II, group II substance, im11 port any class II, group II substance, or import 

12 any product containing any class II, group II 

13 substance without holding one consumption al14 lowance or one destruction offset credit for each 

15 carbon dioxide equivalent ton of the class II, 

16 group II substance. Any person who exports a 

17 class II, group II substance for which a con18 sumption allowance was retired may receive a 

19 refund of that allowance from the Adminis20 trator following the export. 

21 ‘‘(B) PRODUCTION.—If the United States 

22 becomes a party or otherwise adheres to a mul23 tilateral agreement, including any amendment 

24 to the Montreal Protocol on Substances That 

25 Deplete the Ozone Layer, that restricts the proVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00600 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 duction of class II, group II substances, the Ad2 ministrator shall promulgate regulations estab3 lishing a baseline for the production of class II, 

4 group II substances in the United States and 

5 phasing down the production of class II, group 

6 II substances in the United States, in accord7 ance with such multilateral agreement and sub8 ject to the same exceptions and other provisions 

9 as are applicable to the phase down of con10 sumption of class II, group II substances under 

11 this section (except that the Administrator shall 

12 not require a person who obtains production al13 lowances from the Administrator to make pay14 ment for such allowances if the person is mak15 ing payment for a corresponding quantity of 

16 consumption allowances of the same vintage 

17 year). Upon the effective date of such regula18 tions, it shall be unlawful for any person to 

19 produce any class II, group II substance with20 out holding one consumption allowance and one 

21 production allowance, or one destruction offset 

22 credit, for each carbon dioxide equivalent ton of 

23 the class II, group II substance. 

24 ‘‘(C) INTEGRITY OF CAP.—To maintain 

25 the integrity of the class II, group II cap, the 


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1 Administrator may, through rulemaking, limit 

2 the percentage of each person’s compliance obli3 gation that may be met through the use of de4 struction offset credits or banked allowances. 

5 ‘‘(D) COUNTING OF VIOLATIONS.—Each 

6 emission allowance not held as required by this 

7 section shall be a separate violation of this sec8 tion. 

9 ‘‘(2) SCHEDULE.—Pursuant to the regulations 

10 promulgated pursuant to paragraph (1), the number 

11 of class II, group II consumption allowances estab12 lished by the Administrator for each calendar year 

13 beginning in 2012 shall be the following percentage 

14 of the baseline, as established by the Administrator 

15 pursuant to paragraph (3): 

‘‘Calendar Year Percent of Baseline 

2012 90 

2013 87.5 

2014 85 

2015 82.5 

2016 80 

2017 77.5 

2018 75 

2019 71 

2020 67 

2021 63 


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‘‘Calendar Year Percent of Baseline 

2022 59 

2023 54 

2024 50 

2025 46 

2026 42 

2027 38 

2028 34 

2029 30 

2030 25 

2031 21 

2032 17 

after 2032 15 

1 ‘‘(3) BASELINE.—(A) Within 12 months after 

2 the date of enactment of this section, the Adminis3 trator shall promulgate regulations to establish the 

4 baseline for purposes of paragraph (2). The baseline 

5 shall be the sum, expressed in tons of carbon dioxide 

6 equivalents, of— 

7 ‘‘(i) the annual average consumption of all 

8 class II substances in calendar years 2004, 

9 2005, and 2006; plus 

10 ‘‘(ii) the annual average quantity of all 

11 class II substances contained in imported prod12 ucts in calendar years 2004, 2005, and 2006. 


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1 ‘‘(B) Notwithstanding subparagraph (A), if the 

2 Administrator determines that the baseline is higher 

3 than 370 million metric tons of carbon dioxide 

4 equivalents, then the Administrator shall establish 

5 the baseline at 370 million metric tons of carbon di6 oxide equivalents. 

7 ‘‘(C) Notwithstanding subparagraph (A), if the 

8 Administrator determines that the baseline is lower 

9 than 280 million metric tons of carbon dioxide 

10 equivalents, then the Administrator shall establish 

11 the baseline at 280 million metric tons of carbon di12 oxide equivalents. 

13 ‘‘(4) DISTRIBUTION OF ALLOWANCES.— 

14 ‘‘(A) IN GENERAL.—Pursuant to the regu15 lations promulgated under paragraph (1), for 

16 each calendar year beginning in 2012, the Ad17 ministrator shall sell consumption allowances in 

18 accordance with this paragraph. 

19 ‘‘(B) ESTABLISHMENT OF POOLS.—The 

20 Administrator shall establish two allowance 

21 pools. Eighty percent of the consumption allow22 ances available for a calendar year shall be 

23 placed in the producer-importer pool, and 20 

24 percent of the consumption allowances available 


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1 for a calendar year shall be placed in the sec2 ondary pool. 

3 ‘‘(C) PRODUCER-IMPORTER POOL.— 

4 ‘‘(i) AUCTION.—(I) For each calendar 

5 year, the Administrator shall offer for sale 

6 at auction the following percentage of the 

7 consumption allowances in the producer8 importer pool: 

‘‘Calendar Year Percent Available for Auction 

2012 10 

2013 20 

2014 30 

2015 40 

2016 50 

2017 60 

2018 70 

2019 80 

2020 and thereafter 90 

9 ‘‘(II) Any person who produced or im10 ported any class II substance during cal11 endar year 2004, 2005, or 2006 may par12 ticipate in the auction. No other persons 

13 may participate in the auction unless per14 mitted to do so pursuant to subclause 

15 (III). 


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1 ‘‘(III) Not later than three years after 

2 the date of the initial auction and from 

3 time to time thereafter, the Administrator 

4 shall determine through rulemaking wheth5 er any persons who did not produce or im6 port a class II substance during calendar 

7 year 2004, 2005, or 2006 will be permitted 

8 to participate in future auctions. The Ad9 ministrator shall base this determination 

10 on the duration, consistency, and scale of 

11 such person’s purchases of consumption al12 lowances in the secondary pool under sub13 paragraph (D), as well as economic or 

14 technical hardship and other factors 

15 deemed relevant by the Administrator. 

16 ‘‘(IV) The Administrator shall set a 

17 minimum bid per consumption allowance of 

18 the following: 

19 ‘‘(aa) For vintage year 2012, 

20 $1.00. 

21 ‘‘(bb) For vintage year 2013, 

22 $1.20. 

23 ‘‘(cc) For vintage year 2014, 

24 $1.40. 


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1 ‘‘(dd) For vintage year 2015, 

2 $1.60. 

3 ‘‘(ee) For vintage year 2016, 

4 $1.80. 

5 ‘‘(ff) For vintage year 2017, 

6 $2.00. 

7 ‘‘(gg) For vintage year 2018 and 

8 thereafter, $2.00 adjusted for infla9 tion after vintage year 2017 based 

10 upon the producer price index as pub11 lished by the Department of Com12 merce. 

13 ‘‘(ii) NON-AUCTION SALE.—(I) For 

14 each calendar year, as soon as practicable 

15 after auction, the Administrator shall offer 

16 for sale the remaining consumption allow17 ances in the producer-importer pool at the 

18 following prices: 

19 ‘‘(aa) A fee of $1.00 per vintage 

20 year 2012 allowance. 

21 ‘‘(bb) A fee of $1.20 per vintage 

22 year 2013 allowance. 

23 ‘‘(cc) A fee of $1.40 per vintage 

24 year 2014 allowance. 


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1 ‘‘(dd) For each vintage year 

2 2015 allowance, a fee equal to the av3 erage of $1.10 and the auction clear4 ing price for vintage year 2014 allow5 ances. 

6 ‘‘(ee) For each vintage year 2016 

7 allowance, a fee equal to the average 

8 of $1.30 and the auction clearing 

9 price for vintage year 2015 allow10 ances. 

11 ‘‘(ff) For each vintage year 2017 

12 allowance, a fee equal to the average 

13 of $1.40 and the auction clearing 

14 price for vintage year 2016 allow15 ances. 

16 ‘‘(gg) For each allowance of vin17 tage year 2018 and subsequent vin18 tage years, a fee equal to the auction 

19 clearing price for that vintage year. 

20 ‘‘(II) The Administrator shall offer to 

21 sell the remaining consumption allowances 

22 in the producer-importer pool to producers 

23 of class II, group II substances and im24 porters of class II, group II substances in 


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1 proportion to their relative allocation 

2 share. 

3 ‘‘(III) Such allocation share for such 

4 sale shall be determined by the Adminis5 trator using such producer’s or importer’s 

6 annual average data on class II substances 

7 from calendar years 2004, 2005, and 

8 2006, on a carbon dioxide equivalent basis, 

9 and— 

10 ‘‘(aa) shall be based on a pro11 ducer’s production, plus importation, 

12 plus acquisitions and purchases from 

13 persons who produced class II sub14 stances in the United States during 

15 calendar years 2004, 2005, or 2006, 

16 less exportation, less transfers and 

17 sales to persons who produced class II 

18 substances in the United States dur19 ing calendar years 2004, 2005, or 

20 2006; and 

21 ‘‘(bb) for an importer of class II 

22 substances that did not produce in the 

23 United States any class II substance 

24 during calendar years 2004, 2005, 


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1 and 2006, shall be based on the im2 porter’s importation less exportation. 

3 For purposes of item (aa), the Adminis4 trator shall account for 100 percent of 

5 class II, group II substances and 60 per6 cent of class II, group I substances. For 

7 purposes of item (bb), the Administrator 

8 shall account for 100 percent of class II, 

9 group II substances and 100 percent of 

10 class II, group I substances. 

11 ‘‘(IV) Any consumption allowances 

12 made available for nonauction sale to a 

13 specific producer or importer of class II, 

14 group II substances but not purchased by 

15 the specific producer or importer shall be 

16 made available for sale to any producer or 

17 importer of class II substances during cal18 endar years 2004, 2005, and 2006. If de19 mand for such consumption allowances ex20 ceeds supply of such consumption allow21 ances, the Administrator shall develop and 

22 utilize criteria for the sale of such con23 sumption allowances that may include pro 

24 rata shares, historic production and impor25 tation, economic or technical hardship, or 


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1 other factors deemed relevant by the Ad2 ministrator. If the supply of such con3 sumption allowances exceeds demand, the 

4 Administrator may offer such consumption 

5 allowances for sale in the secondary pool as 

6 set forth in subparagraph (D). 

7 ‘‘(D) SECONDARY POOL.—(i) For each cal8 endar year, as soon as practicable after the auc9 tion required in subparagraph (C), the Adminis10 trator shall offer for sale the consumption al11 lowances in the secondary pool at the prices 

12 listed in subparagraph (C)(ii). 

13 ‘‘(ii) The Administrator shall accept appli14 cations for purchase of secondary pool con15 sumption allowances from— 

16 ‘‘(I) importers of products containing 

17 class II, group II substances; 

18 ‘‘(II) persons who purchased any class 

19 II, group II substance directly from a pro20 ducer or importer of class II, group II sub21 stances for use in a product containing a 

22 class II, group II substance, a manufac23 turing process, or a reclamation process; 

24 ‘‘(III) persons who did not produce or 

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1 endar year 2004, 2005, or 2006, but who 

2 the Administrator determines have subse3 quently taken significant steps to produce 

4 or import a substantial quantity of any 

5 class II, group II substance; and 

6 ‘‘(IV) persons who produced or im7 ported any class II substance during cal8 endar year 2004, 2005, or 2006. 

9 ‘‘(iii) If the supply of consumption allow10 ances in the secondary pool equals or exceeds 

11 the demand for consumption allowances in the 

12 secondary pool as presented in the applications 

13 for purchase, the Administrator shall sell the 

14 consumption allowances in the secondary pool 

15 to the applicants in the amounts requested in 

16 the applications for purchase. Any consumption 

17 allowances in the secondary pool not purchased 

18 in a calendar year may be rolled over and added 

19 to the quantity available in the secondary pool 

20 in the following year. 

21 ‘‘(iv) If the demand for consumption allow22 ances in the secondary pool as presented in the 

23 applications for purchase exceeds the supply of 

24 consumption allowances in the secondary pool, 


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1 the Administrator shall sell the consumption al2 lowances as follows: 

3 ‘‘(I) The Administrator shall first sell 

4 the consumption allowances in the sec5 ondary pool to any importers of products 

6 containing class II, group II substances in 

7 the amounts requested in their applications 

8 for purchase. If the demand for such con9 sumption allowances exceeds supply of 

10 such consumption allowances, the Adminis11 trator shall develop and utilize criteria for 

12 the sale of such consumption allowances 

13 among importers of products containing 

14 class II, group II substances that may in15 clude pro rata shares, historic importation, 

16 economic or technical hardship, or other 

17 factors deemed relevant by the Adminis18 trator. 

19 ‘‘(II) The Administrator shall next 

20 sell any remaining consumption allowances 

21 to persons identified in subclauses (II) and 

22 (III) of clause (ii) in the amounts re23 quested in their applications for purchase. 

24 If the demand for such consumption allow25 ances exceeds remaining supply of such 


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1 consumption allowances, the Administrator 

2 shall develop and utilize criteria for the 

3 sale of such consumption allowances 

4 among subclauses (II) and (III) applicants 

5 that may include pro rata shares, historic 

6 use, economic or technical hardship, or 

7 other factors deemed relevant by the Ad8 ministrator. 

9 ‘‘(III) The Administrator shall then 

10 sell any remaining consumption allowances 

11 to persons who produced or imported any 

12 class II substance during calendar year 

13 2004, 2005, or 2006 in the amounts re14 quested in their applications for purchase. 

15 If demand for such consumption allow16 ances exceeds remaining supply of such 

17 consumption allowances, the Administrator 

18 shall develop and utilize criteria for the 

19 sale of such consumption allowances that 

20 may include pro rata shares, historic pro21 duction and importation, economic or tech22 nical hardship, or other factors deemed rel23 evant by the Administrator. 

24 ‘‘(IV) Each person who purchases 

25 consumption allowances in a non-auction 


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1 sale under this subparagraph shall be re2 quired to disclose the person or entity 

3 sponsoring or benefitting from the pur4 chases if such person or entity is, in whole 

5 or in part, other than the purchaser or the 

6 purchaser’s employer. 

7 ‘‘(E) DISCRETION TO WITHHOLD ALLOW8 ANCES.—Nothing in this paragraph prevents 

9 the Administrator from exercising discretion to 

10 withhold and retire consumption allowances 

11 that would otherwise be available for auction or 

12 nonauction sale. Not later than 18 months after 

13 the date of enactment of this section, the Ad14 ministrator shall promulgate regulations estab15 lishing criteria for withholding and retiring con16 sumption allowances. 

17 ‘‘(5) BANKING.—A consumption allowance or 

18 destruction offset credit may be used to meet the 

19 compliance obligation requirements of paragraph (1) 

20 in— 

21 ‘‘(A) the vintage year for the allowance or 

22 destruction offset credit; or 

23 ‘‘(B) any calendar year subsequent to the 

24 vintage year for the allowance or destruction 

25 offset credit. 


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1 ‘‘(6) AUCTIONS.— 

2 ‘‘(A) INITIAL REGULATIONS.—Not later 

3 than 18 months after the date of enactment of 

4 this section, the Administrator shall promulgate 

5 regulations governing the auction of allowances 

6 under this section. Such regulations shall in7 clude the following requirements: 

8 ‘‘(i) FREQUENCY; FIRST AUCTION.— 

9 Auctions shall be held one time per year at 

10 regular intervals, with the first auction to 

11 be held no later than October 31, 2011. 

12 ‘‘(ii) AUCTION FORMAT.—Auctions 

13 shall follow a single-round, sealed-bid, uni14 form price format. 

15 ‘‘(iii) FINANCIAL ASSURANCE.—The 

16 Administrator may establish financial as17 surance requirements to ensure that auc18 tion participants can and will perform on 

19 their bids. 

20 ‘‘(iv) DISCLOSURE OF BENEFICIAL

21 OWNERSHIP.—Each bidder in the auction 

22 shall be required to disclose the person or 

23 entity sponsoring or benefitting from the 

24 bidder’s participation in the auction if such 

25 person or entity is, in whole or in part, 


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1 other than the bidder or the bidder’s em2 ployer. 

3 ‘‘(v) PUBLICATION OF INFORMA4 TION.—After the auction, the Adminis5 trator shall, in a timely fashion, publish 

6 the number of bidders, number of winning 

7 bidders, the quantity of allowances sold, 

8 and the auction clearing price. 

9 ‘‘(vi) BIDDING LIMITS IN 2012.—In 

10 the vintage year 2012 auction, no auction 

11 participant may, directly or in concert with 

12 another participant, bid for or purchase 

13 more allowances offered for sale at the 

14 auction than the greater of— 

15 ‘‘(I) the number of allowances 

16 which, when added to the number of 

17 allowances available for purchase by 

18 the participant in the producer-im19 porter pool non-auction sale, would 

20 equal the participant’s annual average 

21 consumption of class II, group II sub22 stances in calendar years 2004, 2005, 

23 and 2006; or 

24 ‘‘(II) the number of allowances 

25 equal to the product of— 


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1 ‘‘(aa) 1.20 multiplied by the 

2 participant’s allocation share of 

3 the producer-importer pool non4 auction sale as determined under 

5 paragraph (4)(C)(ii); and 

6 ‘‘(bb) the number of vintage 

7 year 2012 allowances offered at 

8 auction. 

9 ‘‘(vii) BIDDING LIMITS IN 2013.—In 

10 the vintage year 2013 auction, no auction 

11 participant may, directly or in concert with 

12 another participant, bid for or purchase 

13 more allowances offered for sale at the 

14 auction than the product of— 

15 ‘‘(I) 1.15 multiplied by the ratio 

16 of the total number of vintage year 

17 2012 allowances purchased by the 

18 participant from the auction and from 

19 the producer-importer pool non-auc20 tion sale to the total number of vin21 tage year 2012 allowances in the pro22 ducer-importer pool; and 

23 ‘‘(II) the number of vintage year 

24 2013 allowances offered at auction. 


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1 ‘‘(viii) BIDDING LIMITS IN SUBSE2 QUENT YEARS.—In the auctions for vin3 tage year 2014 and subsequent vintage 

4 years, no auction participant may, directly 

5 or in concert with another participant, bid 

6 for or purchase more allowances offered 

7 for sale at the auction than the product 

8 of— 

9 ‘‘(I) 1.15 multiplied by the ratio 

10 of the highest number of allowances 

11 held by the participant in any of the 

12 three prior vintage years to meet its 

13 compliance obligation under para14 graph (1) to the total number of al15 lowances in the producer-importer 

16 pool for such vintage year; and 

17 ‘‘(II) the number of allowances 

18 offered at auction for that vintage 

19 year. 

20 ‘‘(ix) OTHER REQUIREMENTS.—The 

21 Administrator may include in the regula22 tions such other requirements or provisions 

23 as the Administrator considers necessary 

24 to promote effective, efficient, transparent, 


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1 and fair administration of auctions under 

2 this section. 

3 ‘‘(B) REVISION OF REGULATIONS.—The 

4 Administrator may, at any time, revise the ini5 tial regulations promulgated under subpara6 graph (A) based on the Administrator’s experi7 ence in administering allowance auctions. Such 

8 revised regulations need not meet the require9 ments identified in subparagraph (A) if the Ad10 ministrator determines that an alternative auc11 tion design would be more effective, taking into 

12 account factors including costs of administra13 tion, transparency, fairness, and risks of collu14 sion or manipulation. In determining whether 

15 and how to revise the initial regulations under 

16 this paragraph, the Administrator shall not con17 sider maximization of revenues to the Federal 

18 Government. 

19 ‘‘(C) DELEGATION OR CONTRACT.—Pursu20 ant to regulations under this section, the Ad21 ministrator may, by delegation or contract, pro22 vide for the conduct of auctions under the Ad23 ministrator’s supervision by other departments 

24 or agencies of the Federal Government or by 


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1 nongovernmental agencies, groups, or organiza2 tions. 

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 

23 the Administrator determines that an alter24 native payment structure or frequency would be 

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1 cluding cost of administration, transparency, 

2 and fairness. In determining whether and how 

3 to revise the initial regulations under this para4 graph, the Administrator shall not consider 

5 maximization of revenues to the Federal Gov6 ernment. 

7 ‘‘(C) PENALTIES FOR NON-PAYMENT.— 

8 Failure to pay for purchased allowances in ac9 cordance with the regulations promulgated pur10 suant to this paragraph shall be a violation of 

11 the requirements of subsection (b). Section 

12 113(c)(3) shall apply in the case of any person 

13 who knowingly fails to pay for purchased allow14 ances in accordance with the regulations pro15 mulgated pursuant to this paragraph. 

16 ‘‘(8) IMPORTED PRODUCTS.—If the United 

17 States becomes a party or otherwise adheres to a 

18 multilateral agreement, including any amendment to 

19 the Montreal Protocol on Substances That Deplete 

20 the Ozone Layer, which restricts the production and 

21 consumption of class II, group II substances— 

22 ‘‘(A) as of the date on which such agree23 ment or amendment enters into force, it shall 

24 no longer be unlawful for any person to import 

25 from a party to such agreement or amendment 


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1 any product containing any class II, group II 

2 substance whose production and consumption 

3 are regulated by such agreement or amendment 

4 without holding one consumption allowance or 

5 one destruction offset credit for each carbon di6 oxide equivalent ton of the class II, group II 

7 substance; 

8 ‘‘(B) the Administrator shall promulgate 

9 regulations within 12 months of the date the 

10 United States becomes a party or otherwise ad11 heres to such agreement or amendment, or the 

12 date on which such agreement or amendment 

13 enters into force, whichever is later, to establish 

14 a new baseline for purposes of paragraph (2), 

15 which new baseline shall be the original baseline 

16 less the carbon dioxide equivalent of the annual 

17 average quantity of any class II substances reg18 ulated by such agreement or amendment con19 tained in products imported from parties to 

20 such agreement or amendment in calendar 

21 years 2004, 2005, and 2006; 

22 ‘‘(C) as of the date on which such agree23 ment or amendment enters into force, no per24 son importing any product containing any class 

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1 cert with another person, purchase any con2 sumption allowances for sale by the Adminis3 trator for the importation of products from a 

4 party to such agreement or amendment that 

5 contain any class II, group II substance re6 stricted by such agreement or amendment; and 

7 ‘‘(D) the Administrator may adjust the 

8 two allowance pools established in paragraph 

9 (4) such that up to 90 percent of the consump10 tion allowances available for a calendar year are 

11 placed in the producer-importer pool with the 

12 remaining consumption allowances placed in the 

13 secondary pool. 

14 ‘‘(9) OFFSETS.— 

15 ‘‘(A) CHLOROFLUOROCARBON DESTRUC16 TION.—Within 18 months after the date of en17 actment of this section, the Administrator shall 

18 promulgate regulations to provide for the 

19 issuance of offset credits for the destruction, in 

20 the calendar year 2012 or later, of 

21 chlorofluorocarbons in the United States. The 

22 Administrator shall establish and distribute to 

23 the destroying entity a quantity of destruction 

24 offset credits equal to 0.8 times the number of 

25 tons of carbon dioxide equivalents of reduction 


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1 achieved through the destruction. No destruc2 tion offset credits shall be established for the 

3 destruction of a class II, group II substance. 

4 ‘‘(B) DEFINITION.—For purposes of this 

5 paragraph, the term ‘destruction’ means the 

6 conversion of a substance by thermal, chemical, 

7 or other means to another substance with little 

8 or no carbon dioxide equivalent value and no 

9 ozone depletion potential. 

10 ‘‘(C) REGULATIONS.—The regulations pro11 mulgated under this paragraph shall include 

12 standards and protocols for project eligibility, 

13 certification of destroyers, monitoring, tracking, 

14 destruction efficiency, quantification of project 

15 and baseline emissions and carbon dioxide 

16 equivalent value, and verification. The Adminis17 trator shall ensure that destruction offset cred18 its represent real and verifiable destruction of 

19 chlorofluorocarbons or other class I or class II, 

20 group I, substances authorized under subpara21 graph (D). 

22 ‘‘(D) OTHER SUBSTANCES.—The Adminis23 trator may promulgate regulations to add to the 

24 list of class I and class II, group I, substances 

25 that may be destroyed for destruction offset 


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1 credits, taking into account a candidate sub2 stance’s carbon dioxide equivalent value, ozone 

3 depletion potential, prevalence in banks in the 

4 United States, and emission rates, as well as 

5 the need for additional cost containment under 

6 the class II, group II cap and the integrity of 

7 the class II, group II cap. The Administrator 

8 shall not add a class I or class II, group I sub9 stance to the list if the consumption of the sub10 stance has not been completely phased-out 

11 internationally (except for essential use exemp12 tions or other similar exemptions) pursuant to 

13 the Montreal Protocol. 

14 ‘‘(E) EXTENSION OF OFFSETS.—(i) At any 

15 time after the Administrator promulgates regu16 lations pursuant to subparagraph (A), the Ad17 ministrator may add the types of destruction 

18 projects authorized to receive destruction offset 

19 credits under this paragraph to the list of types 

20 of projects eligible for offset credits under sec21 tion 733. Nothing in this paragraph shall affect 

22 the issuance of offset credits under section 740. 

23 ‘‘(ii) The Administrator shall not make the 

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1 curring or is projected to occur under this para2 graph and that the addition would increase de3 struction. 

4 ‘‘(iii) In no event shall more than one de5 struction offset credit be issued under title VII 

6 and this section for the destruction of the same 

7 quantity of a substance. 

8 ‘‘(10) LEGAL STATUS OF ALLOWANCES AND

9 CREDITS.—None of the following constitutes a prop10 erty right: 

11 ‘‘(A) A production or consumption allow12 ance. 

13 ‘‘(B) A destruction offset credit. 

14 ‘‘(c) DEADLINES FOR COMPLIANCE.—Notwith15 standing the deadlines specified for class II substances in 

16 sections 608, 609, 610, 612, and 613 that occur prior to 

17 January 1, 2009, the deadline for promulgating regula18 tions under those sections for class II, group II substances 

19 shall be January 1, 2012. 

20 ‘‘(d) EXCEPTIONS FOR ESSENTIAL USES.—Notwith21 standing any phase down of production and consumption 

22 required by this section, to the extent consistent with any 

23 applicable multilateral agreement to which the United 

24 States is a party or otherwise adheres, the Administrator 

25 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, 

3 and in consultation with the Commissioner of the 

4 Food and Drug Administration, may provide an ex5 ception for the production and consumption of class 

6 II, group II substances solely for use in medical de7 vices. 

8 ‘‘(2) AVIATION SAFETY.—The Administrator, 

9 after notice and opportunity for public comment, 

10 may authorize the production and consumption of 

11 limited quantities of class II, group II substances 

12 solely for the purposes of aviation safety if the Ad13 ministrator of the Federal Aviation Administration, 

14 in consultation with the Administrator, determines 

15 that no safe and effective substitute has been devel16 oped and that such authorization is necessary for 

17 aviation safety purposes. 

18 ‘‘(e) DEVELOPING COUNTRIES.—Notwithstanding 

19 any phase down of production required by this section, the 

20 Administrator, after notice and opportunity for public 

21 comment, may authorize the production of limited quan22 tities of class II, group II substances in excess of the 

23 amounts otherwise allowable under this section solely for 

24 export to, and use in, developing countries. Any produc25 tion authorized under this subsection shall be solely for 


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1 purposes of satisfying the basic domestic needs of such 

2 countries as provided in applicable international agree3 ments, if any, to which the United States is a party or 

4 otherwise adheres. 

5 ‘‘(f) NATIONAL SECURITY; FIRE SUPPRESSION, 

6 ETC.—The provisions of subsection (f) and paragraphs (1) 

7 and (2) of subsection (g) of section 604 shall apply to any 

8 consumption and production phase down of class II, group 

9 II substances in the same manner and to the same extent, 

10 consistent with any applicable international agreement to 

11 which the United States is a party or otherwise adheres, 

12 as such provisions apply to the substances specified in 

13 such subsection. 

14 ‘‘(g) ACCELERATED SCHEDULE.—In lieu of section 

15 606, the provisions of paragraphs (1), (2), and (3) of this 

16 subsection shall apply in the case of class II, group II sub17 stances. 

18 ‘‘(1) IN GENERAL.—The Administrator shall 

19 promulgate initial regulations not later than 18 

20 months after the date of enactment of this section, 

21 and revised regulations any time thereafter, which 

22 establish a schedule for phasing down the consump23 tion (and, if the condition in subsection (b)(1)(B) is 

24 met, the production) of class II, group II substances 

25 that is more stringent than the schedule set forth in 


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1 this section if, based on the availability of sub2 stitutes, the Administrator determines that such 

3 more stringent schedule is practicable, taking into 

4 account technological achievability, safety, and other 

5 factors the Administrator deems relevant, or if the 

6 Montreal Protocol, or any applicable international 

7 agreement to which the United States is a party or 

8 otherwise adheres, is modified or established to in9 clude a schedule or other requirements to control or 

10 reduce production, consumption, or use of any class 

11 II, group II substance more rapidly than the appli12 cable schedule under this section. 

13 ‘‘(2) PETITION.—Any person may submit a pe14 tition to promulgate regulations under this sub15 section in the same manner and subject to the same 

16 procedures as are provided in section 606(b). 

17 ‘‘(3) INCONSISTENCY.—If the Administrator de18 termines that the provisions of this section regarding 

19 banking, allowance rollover, or destruction offset 

20 credits create a significant potential for inconsist21 ency with the requirements of any applicable inter22 national agreement to which the United States is a 

23 party or otherwise adheres, the Administrator may 

24 promulgate regulations restricting the availability of 

25 banking, allowance rollover, or destruction offset 


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1 credits to the extent necessary to avoid such incon2 sistency. 

3 ‘‘(h) EXCHANGE.—Section 607 shall not apply in the 

4 case of class II, group II substances. Production and con5 sumption allowances for class II, group II substances may 

6 be freely exchanged or sold but may not be converted into 

7 allowances for class II, group I substances. 

8 ‘‘(i) LABELING.—(1) In applying section 611 to prod9 ucts containing or manufactured with class II, group II 

10 substances, in lieu of the words ‘destroying ozone in the 

11 upper atmosphere’ on labels required under section 611 

12 there shall be substituted the words ‘contributing to global 

13 warming’. 

14 ‘‘(2) The Administrator may, through rulemaking, 

15 exempt from the requirements of section 611 products 

16 containing or manufactured with class II, group II sub17 stances determined to have little or no carbon dioxide 

18 equivalent value compared to other substances used in 

19 similar products. 

20 ‘‘(j) NONESSENTIAL PRODUCTS.—For the purposes 

21 of section 610, class II, group II substances shall be regu22 lated under section 610(b), except that in applying section 

23 610(b) the word ‘hydrofluorocarbon’ shall be substituted 

24 for the word ‘chlorofluorocarbon’ and the term ‘class II, 

25 group II’ shall be substituted for the term ‘class I’. Class 


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1 II, group II substances shall not be subject to the provi2 sions of section 610(d). 

3 ‘‘(k) INTERNATIONAL TRANSFERS.—In the case of 

4 class II, group II substances, in lieu of sections 616(a) 

5 and 616(b), this subsection shall apply. To the extent con6 sistent with any applicable international agreement to 

7 which the United States is a party or otherwise adheres, 

8 including any amendment to the Montreal Protocol, the 

9 United States may engage in transfers with other parties 

10 to such agreement or amendment under the following con11 ditions: 

12 ‘‘(1) The United States may transfer produc13 tion allowances to another party to such agreement 

14 or amendment if, at the time of the transfer, the 

15 Administrator establishes revised production limits 

16 for the United States accounting for the transfer in 

17 accordance with regulations promulgated pursuant 

18 to this subsection. 

19 ‘‘(2) The United States may acquire production 

20 allowances from another party to such agreement or 

21 amendment if, at the time of the transfer, the Ad22 ministrator finds that the other party has revised its 

23 domestic production limits in the same manner as 

24 provided with respect to transfers by the United 


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•HR 2454 IH

1 States in the regulations promulgated pursuant to 

2 this subsection. 

3 ‘‘(l) RELATIONSHIP TO OTHER LAWS.— 

4 ‘‘(1) STATE LAWS.—For purposes of section 

5 116, the requirements of this section for class II, 

6 group II substances shall be treated as requirements 

7 for the control and abatement of air pollution. 

8 ‘‘(2) INTERNATIONAL AGREEMENTS.—Section 

9 614 shall apply to the provisions of this section con10 cerning class II, group II substances, except that for 

11 the words ‘Montreal Protocol’ there shall be sub12 stituted the words ‘Montreal Protocol, or any appli13 cable international agreement to which the United 

14 States is a party or otherwise adheres that restricts 

15 the production or consumption of class II, group II 

16 substances,’ and for the words ‘Article 4 of the Mon17 treal Protocol’ there shall be substituted ‘any provi18 sion of such international agreement regarding trade 

19 with non-parties’. 

20 ‘‘(3) FEDERAL FACILITIES.—For purposes of 

21 section 118, the requirements of this section for 

22 class II, group II substances and corresponding 

23 State, interstate, and local requirements, administra24 tive authority, and process and sanctions shall be 

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1 ment of air pollution within the meaning of section 

2 118. 

3 ‘‘(m) CARBON DIOXIDE EQUIVALENT VALUE.—(1) 

4 In lieu of section 602(e), the provisions of this subsection 

5 shall apply in the case of class II, group II substances. 

6 Simultaneously with establishing the list of class II, group 

7 II substances, and simultaneously with any addition to 

8 that list, the Administrator shall publish the carbon diox9 ide equivalent value of each listed class II, group II sub10 stance, based on a determination of the number of metric 

11 tons of carbon dioxide that makes the same contribution 

12 to global warming over 100 years as 1 metric ton of each 

13 class II, group II substance. 

14 ‘‘(2) Not later than February 1, 2017, and not less 

15 than every 5 years thereafter, the Administrator shall— 

16 ‘‘(A) review, and if appropriate, revise the car17 bon dioxide equivalent values established for class II, 

18 group II substances based on a determination of the 

19 number of metric tons of carbon dioxide that makes 

20 the same contributions to global warming over 100 

21 years as 1 metric ton of each class II, group II sub22 stance; and 

23 ‘‘(B) publish in the Federal Register the results 

24 of that review and any revisions. 


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1 ‘‘(3) A revised determination published in the Federal 

2 Register under paragraph (2)(B) shall take effect for pro3 duction of class II, group II substances, consumption of 

4 class II, group II substances, and importation of products 

5 containing class II, group II substances starting on Janu6 ary 1 of the first calendar year starting at least 9 months 

7 after the date on which the revised determination was pub8 lished. 

9 ‘‘(4) The Administrator may decrease the frequency 

10 of review and revision under paragraph (2) if the Adminis11 trator determines that such decrease is appropriate in 

12 order to synchronize such review and revisions with any 

13 similar review process carried out pursuant to the United 

14 Nations Framework Convention on Climate Change, an 

15 agreement negotiated under that convention, The Vienna 

16 Convention for the Protection of the Ozone Layer, or an 

17 agreement negotiated under that convention, except that 

18 in no event shall the Administrator carry out such review 

19 and revision any less frequently than every 10 years. 

20 ‘‘(n) REPORTING REQUIREMENTS.—In lieu of sub21 sections (b) and (c) of section 603, paragraphs (1) and 

22 (2) of this subsection shall apply in the case of class II, 

23 group II substances: 

24 ‘‘(1) IN GENERAL.—On a quarterly basis, or 

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1 mined by the Administrator, each person who pro2 duced, imported, or exported a class II, group II 

3 substance, or who imported a product containing a 

4 class II, group II substance, shall file a report with 

5 the Administrator setting forth the carbon dioxide 

6 equivalent amount of the substance that such person 

7 produced, imported, or exported, as well as the 

8 amount that was contained in products imported by 

9 that person, during the preceding reporting period. 

10 Each such report shall be signed and attested by a 

11 responsible officer. If all other reporting is complete, 

12 no such report shall be required from a person after 

13 April 1 of the calendar year after such person per14 manently ceases production, importation, and expor15 tation of the substance, as well as importation of 

16 products containing the substance, and so notifies 

17 the Administrator in writing. If the United States 

18 becomes a party or otherwise adheres to a multilat19 eral agreement, including any amendment to the 

20 Montreal Protocol on Substances That Deplete the 

21 Ozone Layer, that restricts the production and con22 sumption of class II, group II substances, then, if all 

23 other reporting is complete, no such report shall be 

24 required from a person with respect to importation 

25 from parties to such agreement or amendment of 


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1 products containing any class II, group II substance 

2 restricted by such agreement or amendment, after 

3 April 1 of the calendar year following the year dur4 ing which such agreement or amendment enters into 

5 force. 

6 ‘‘(2) BASELINE REPORTS FOR CLASS II, GROUP

7 II SUBSTANCES.— 

8 ‘‘(A) IN GENERAL.—Unless such informa9 tion has been previously reported to the Admin10 istrator, on the date on which the first report 

11 under paragraph (1) of this subsection is re12 quired to be filed, each person who produced, 

13 imported, or exported a class II, group II sub14 stance, or who imported a product containing a 

15 class II substance, (other than a substance 

16 added to the list of class II, group II substances 

17 after the publication of the initial list of such 

18 substances under this section), shall file a re19 port with the Administrator setting forth the 

20 amount of such substance that such person pro21 duced, imported, exported, or that was con22 tained in products imported by that person, 

23 during each of calendar years 2004, 2005, and 

24 2006. 


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1 ‘‘(B) PRODUCERS.—In reporting under 

2 subparagraph (A), each person who produced in 

3 the United States a class II substance during 

4 calendar years 2004, 2005, or 2006 shall— 

5 ‘‘(i) report all acquisitions or pur6 chases of class II substances during each 

7 of calendar years 2004, 2005, and 2006 

8 from all other persons who produced in the 

9 United States a class II substance during 

10 calendar years 2004, 2005, or 2006, and 

11 supply evidence of such acquisitions and 

12 purchases as deemed necessary by the Ad13 ministrator; and 

14 ‘‘(ii) report all transfers or sales of 

15 class II substances during each of calendar 

16 years 2004, 2005, and 2006 to all other 

17 persons who produced in the United States 

18 a class II substance during calendar years 

19 2004, 2005, or 2006, and supply evidence 

20 of such transfers and sales as deemed nec21 essary by the Administrator. 

22 ‘‘(C) ADDED SUBSTANCES.—In the case of 

23 a substance added to the list of class II, group 

24 II substances after publication of the initial list 

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1 son who produced, imported, exported, or im2 ported products containing such substance in 

3 calendar year 2004, 2005, or 2006 shall file a 

4 report with the Administrator within 180 days 

5 after the date on which such substance is added 

6 to the list, setting forth the amount of the sub7 stance that such person produced, imported, 

8 and exported, as well as the amount that was 

9 contained in products imported by that person, 

10 in calendar years 2004, 2005, and 2006. 

11 ‘‘(o) STRATOSPHERIC OZONE AND CLIMATE PROTEC12 TION FUND.— 

13 ‘‘(1) IN GENERAL.—There is established in the 

14 Treasury of the United States a Stratospheric Ozone 

15 and Climate Protection Fund. 

16 ‘‘(2) DEPOSITS.—The Administrator shall de17 posit all proceeds from the auction and non-auction 

18 sale of allowances under this section into the Strato19 spheric Ozone and Climate Protection Fund. 

20 ‘‘(3) USE.—Amounts deposited into the Strato21 spheric Ozone and Climate Protection Fund shall be 

22 available, subject to appropriations, exclusively for 

23 the following purposes: 

24 ‘‘(A) RECOVERY, RECYCLING, AND REC25 LAMATION.—The Administrator may utilize 


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1 funds to establish a program to incentivize the 

2 recovery, recycling, and reclamation of any 

3 Class II substances in order to reduce emissions 

4 of such substances. 

5 ‘‘(B) MULTILATERAL FUND.—If the 

6 United States becomes a party or otherwise ad7 heres to a multilateral agreement, including any 

8 amendment to the Montreal Protocol on Sub9 stances That Deplete the Ozone Layer, which 

10 restricts the production and consumption of 

11 class II, group II substances, the Administrator 

12 may utilize funds to meet any related contribu13 tion obligation of the United States to the Mul14 tilateral Fund for the Implementation of the 

15 Montreal Protocol or similar multilateral fund 

16 established under such multilateral agreement. 

17 ‘‘(C) BEST-IN-CLASS APPLIANCES DEPLOY18 MENT PROGRAM.—The Secretary of Energy is 

19 authorized to utilize funds to carry out the pur20 poses of section 214 of the American Clean En21 ergy and Security Act of 2009. 

22 ‘‘(D) LOW GLOBAL WARMING PRODUCT

23 TRANSITION ASSISTANCE PROGRAM.— 

24 ‘‘(i) IN GENERAL.—The Adminis25 trator, in consultation with the Secretary 


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1 of Energy, may utilize funds in fiscal years 

2 2012 through 2022 to establish a program 

3 to provide financial assistance to manufac4 turers of products containing class II, 

5 group II substances to facilitate the transi6 tion to products that contain or utilize al7 ternative substances with no or low carbon 

8 dioxide equivalent value and no ozone de9 pletion potential. 

10 ‘‘(ii) DEFINITION.—In this subpara11 graph, the term ‘products’ means refrig12 erators, freezers, dehumidifiers, air condi13 tioners, foam insulation, technical aerosols, 

14 fire protection systems, and semiconduc15 tors. 

16 ‘‘(iii) FINANCIAL ASSISTANCE.—The 

17 Administrator may provide financial assist18 ance to manufacturers pursuant to clause 

19 (i) for— 

20 ‘‘(I) the design and configuration 

21 of new consumer products that use al22 ternative substances with no or low 

23 carbon dioxide equivalent value and 

24 no ozone depletion potential; and 


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1 ‘‘(II) the redesign and retooling 

2 of facilities for the manufacture of 

3 consumer products in the United 

4 States that use alternative substances 

5 with no or low carbon dioxide equiva6 lent value and no ozone depletion po7 tential. 

8 ‘‘(iv) REPORTS.—For any fiscal year 

9 during which the Administrator provides 

10 financial assistance pursuant to this sub11 paragraph, the Administrator shall submit 

12 a report to the Congress within 3 months 

13 of the end of such fiscal year detailing the 

14 amounts, recipients, specific purposes, and 

15 results of the financial assistance pro16 vided.’’ 

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

18 title VI of the Clean Air Act (42 U.S.C. 7671 et seq.) 

19 is amended by adding the following new item at the end 

20 thereof: 

‘‘Sec. 619. Hydrofluorocarbons (HFCs).’’. 

21 (c) FIRE SUPPRESSION AGENTS.—Section 605(a) of 

22 the Clean Air Act (42 U.S.C. 7671(a)) is amended— 

23 (1) by striking ‘‘or’’ at the end of paragraph 

24 (2); 


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1 (2) by striking the period at the end of para2 graph (3) and inserting ‘‘; or’’; and 

3 (3) by adding the following new paragraph after 

4 paragraph (3): 

5 ‘‘(4) is listed as acceptable for use as a fire sup6 pression agent for nonresidential applications in ac7 cordance with section 612(c).’’. 

8 (d) MOTOR VEHICLE AIR CONDITIONERS.— 

9 (1) Section 609(e) of the Clean Air Act (42 

10 U.S.C. 7671h(e)) is amended by inserting ‘‘, group 

11 I’’ after each reference to ‘‘class II’’. 

12 (2) Section 609 of the Clean Air Act (42 U.S.C. 

13 7671h) is amended by adding the following new sub14 section after subsection (e): 

15 ‘‘(f) CLASS II, GROUP II SUBSTANCES.— 

16 ‘‘(1) REPAIR.—The Administrator may promul17 gate regulations establishing requirements for repair 

18 of motor vehicle air conditioners prior to adding a 

19 class II, group II substance. 

20 ‘‘(2) SMALL CONTAINERS.—(A) The Adminis21 trator may promulgate regulations establishing serv22 icing practices and procedures for recovery of class 

23 II, group II substances from containers which con24 tain less than 20 pounds of such class II, group II 

25 substances. 


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1 ‘‘(B) Not later than 18 months after enactment 

2 of this subsection, the Administrator shall either 

3 promulgate regulations requiring that containers 

4 which contain less than 20 pounds of a class II, 

5 group II substance be equipped with a device or 

6 technology that limits refrigerant emissions and 

7 leaks from the container and limits refrigerant emis8 sions and leaks during the transfer of refrigerant 

9 from the container to the motor vehicle air condi10 tioner or issue a determination that such require11 ments are not necessary or appropriate. 

12 ‘‘(C) Not later than 18 months after enactment 

13 of this subsection, the Administrator shall promul14 gate regulations establishing requirements for con15 sumer education materials on best practices associ16 ated with the use of containers which contain less 

17 than 20 pounds of a class II, group II substance and 

18 prohibiting the sale or distribution, or offer for sale 

19 or distribution, of any class II, group II substance 

20 in any container which contains less than 20 pounds 

21 of such class II, group II substance, unless con22 sumer education materials consistent with such re23 quirements are displayed and available at point-of24 sale locations, provided to the consumer, or included 

25 in or on the packaging of the container which conVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00644 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 tain less than 20 pounds of a class II, group II sub2 stance. 

3 ‘‘(D) The Administrator may, through rule4 making, extend the requirements established under 

5 this paragraph to containers which contain 30 

6 pounds or less of a class II, group II substance if 

7 the Administrator determines that such action would 

8 produce significant environmental benefits. 

9 ‘‘(3) RESTRICTION OF SALES.—Effective Janu10 ary 1, 2014, no person may sell or distribute or offer 

11 to sell or distribute or otherwise introduce into inter12 state commerce any motor vehicle air conditioner re13 frigerant in any size container unless the substance 

14 has been found acceptable for use in a motor vehicle 

15 air conditioner under section 612.’’. 

16 (e) SAFE ALTERNATIVES POLICY.—Section 612(e) of 

17 the Clean Air Act (42 U.S.C. 7671k(e)) is amended by 

18 inserting ‘‘or class II’’ after each reference to ‘‘class I’’. 

19 SEC. 333. BLACK CARBON. 

20 (a) DEFINITION.—As used in this section, the term 

21 ‘‘black carbon’’ means the light absorbing component of 

22 carbonaceous aerosols. 

23 (b) BLACK CARBON ABATEMENT REPORT.—Not 

24 later than one year after the date of enactment of this 

25 section, the Administrator shall, in consultation with other 


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1 appropriate Federal agencies, submit to Congress a report 

2 regarding black carbon emissions. The report shall include 

3 the following: 

4 (1) A summary of the current research that 

5 identifies— 

6 (A) an inventory of the major sources of 

7 black carbon emissions in the United States 

8 and throughout the world, including— 

9 (i) an estimate of the quantity of cur10 rent and projected future emissions; and 

11 (ii) the net climate forcing of the 

12 emissions from such sources, including 

13 consideration of co-emissions of other pol14 lutants; 

15 (B) effective and cost-effective control 

16 technologies, operations, and strategies for ad17 ditional domestic and international black carbon 

18 emissions reductions, such as diesel retrofit 

19 technologies on existing on-road and off-road 

20 engines and programs to address residential 

21 cookstoves, forest burning, and other agri22 culture-based burning; 

23 (C) potential metrics quantifying the cli24 matic effects of black carbon emissions, includ25 ing its radiative forcing and warming effects, 


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1 that may be used to compare the climate bene2 fits of different mitigation strategies, including 

3 an assessment of the uncertainty in such 

4 metrics; and 

5 (D) the public health and environmental 

6 benefits associated with additional controls for 

7 black carbon emissions. 

8 (2) Recommendations regarding— 

9 (A) development of additional emissions 

10 monitoring techniques and capabilities, mod11 eling, and other black carbon-related areas of 

12 study; 

13 (B) areas of focus for additional study of 

14 technologies, operations, and strategies with the 

15 greatest potential to reduce emissions of black 

16 carbon; and 

17 (C) actions, in addition to those identified 

18 by the Administrator under section 851 of the 

19 Clean Air Act (as amended by subsection (c)), 

20 the Federal Government may take to encourage 

21 or require reductions in black carbon emissions. 

22 (c) BLACK CARBON MITIGATION.—Title VIII of the 

23 Clean Air Act, as added by section 331 of this Act, and 

24 amended by section 222 of this Act, is further amended 

25 by adding after part D the following new part: 


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1 ‘‘PART E—BLACK CARBON 

2 ‘‘SEC. 851. BLACK CARBON. 

3 ‘‘(a) DOMESTIC BLACK CARBON MITIGATION.—Not 

4 later than one year after the date of enactment of this 

5 section, the Administrator, taking into consideration the 

6 public health and environmental impacts of black carbon 

7 emissions, including the effects on global warming, the 

8 Arctic, and other snow and ice-covered surfaces, shall pro9 pose regulations under the existing authorities of this Act 

10 to reduce emissions of black carbon or propose a finding 

11 that existing regulations promulgated pursuant to this Act 

12 adequately regulate black carbon emissions. Not later than 

13 two years after the date of enactment of this section, the 

14 Administrator shall promulgate final regulations under the 

15 existing authorities of this Act or finalize the proposed 

16 finding. 

17 ‘‘(b) INTERNATIONAL BLACK CARBON MITIGA18 TION.— 

19 ‘‘(1) REPORT.—Not later than one year after 

20 the date of enactment of this section, the Adminis21 trator, in coordination with the Secretary of State 

22 and other appropriate Federal agencies, shall trans23 mit a report to Congress on the amount, type, and 

24 direction of all present United States financial, tech25 nical, and related assistance to foreign countries to 


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1 reduce, mitigate, and otherwise abate black carbon 

2 emissions. 

3 ‘‘(2) OTHER OPPORTUNITIES.—The report re4 quired under paragraph (1) shall also identify oppor5 tunities and recommendations, including action 

6 under existing authorities, to achieve significant 

7 black carbon emission reductions in foreign countries 

8 through technical assistance or other approaches 

9 to— 

10 ‘‘(A) promote sustainable solutions to 

11 bring clean, efficient, safe, and affordable 

12 stoves, fuels, or both stoves and fuels to resi13 dents of developing countries that are reliant on 

14 solid fuels such as wood, dung, charcoal, coal, 

15 or crop residues for home cooking and heating, 

16 so as to help reduce the public health, environ17 mental, and economic impacts of black carbon 

18 emissions from these sources by— 

19 ‘‘(i) identifying key regions for large20 scale demonstration efforts, and key part21 ners in each such region; and 

22 ‘‘(ii) developing for each such region a 

23 large-scale implementation strategy with a 

24 goal of collectively reaching 20,000,000 


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1 homes over 5 years with interventions that 

2 will— 

3 ‘‘(I) increase stove efficiency by 

4 over 50 percent (or such other goal as 

5 determined by the Administrator); 

6 ‘‘(II) reduce emissions of black 

7 carbon by over 60 percent (or such 

8 other goal as determined by the Ad9 ministrator); and 

10 ‘‘(III) reduce the incidence of se11 vere pneumonia in children under 5 

12 years old by over 30 percent (or such 

13 other goal as determined by the Ad14 ministrator); 

15 ‘‘(B) make technological improvements to 

16 diesel engines and provide greater access to 

17 fuels that emit less or no black carbon; 

18 ‘‘(C) reduce unnecessary agricultural or 

19 other biomass burning where feasible alter20 natives exist; 

21 ‘‘(D) reduce unnecessary fossil fuel burn22 ing that produces black carbon where feasible 

23 alternatives exist; 

24 ‘‘(E) reduce other sources of black carbon 

25 emissions; and 


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1 ‘‘(F) improve capacity to achieve greater 

2 compliance with existing laws to address black 

3 carbon emissions.’’. 

4 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

5 are authorized to be appropriated such sums as are nec6 essary to carry out this section. 

7 SEC. 334. STATES. 

8 Section 116 of the Clean Air Act (42 U.S.C. 7416) 

9 is amended by adding the following at the end thereof: 

10 ‘‘For the purposes of this section, the phrases ‘standard 

11 or limitation respecting emissions of air pollutants’ and 

12 ‘requirements respecting control or abatement of air pollu13 tion’ shall include any provision to: cap greenhouse gas 

14 emissions, require surrender to the State or a political 

15 subdivision thereof of emission allowances or offset credits 

16 established or issued under this Act, and require the use 

17 of such allowances or credits as a means of demonstrating 

18 compliance with requirements established by a State or 

19 political subdivision thereof.’’. 

20 SEC. 335. STATE PROGRAMS. 

21 Title VIII of the Clean Air Act, as added by section 

22 331 of this Act and amended by several sections of this 

23 Act, is further amended by adding after part E (as added 

24 by section 333 of this Act) the following new part: 


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1 ‘‘PART F—MISCELLANEOUS 

2 ‘‘SEC. 861. STATE PROGRAMS. 

3 ‘‘Notwithstanding section 116, no State or political 

4 subdivision thereof shall implement or enforce a cap and 

5 trade program that covers any capped emissions emitted 

6 during the years 2012 through 2017. For purposes of this 

7 section, the term ‘cap and trade program’ means a system 

8 of greenhouse gas regulation under which a State or polit9 ical subdivision issues a limited number of tradable instru10 ments in the nature of emission allowances and requires 

11 that sources within its jurisdiction surrender such 

12 tradeable instruments for each unit of greenhouse gases 

13 emitted during a compliance period. For purposes of this 

14 section, a ‘cap-and-trade program’ does not include a tar15 get or limit on greenhouse gas emissions adopted by a 

16 State or political subdivision that is implemented other 

17 than through the issuance and surrender of a limited num18 ber of tradable instruments in the nature of emission al19 lowances, nor does it include any other standard, limit, 

20 regulation, or program to reduce greenhouse gas emissions 

21 that is not implemented through the issuance and sur22 render of a limited number of tradeable instruments in 

23 the nature of emission allowances. For purposes of this 

24 section, the term ‘cap and trade program’ does not in25 clude, among other things, fleet-wide motor vehicle emis26 sion requirements that allow greater emissions with inVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00652 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 creased vehicle production, or requirements that fuels, or 

2 other products, meet an average pollution emission rate 

3 or lifecycle greenhouse gas standard.’’. 

4 SEC. 336. ENFORCEMENT. 

5 (a) REMAND.—Section 307(b) of the Clean Air Act 

6 (42 U.S.C. 7607(b)) is amended by adding the following 

7 new paragraph at the end thereof: 

8 ‘‘(3) If the court determines that any action of 

9 the Administrator is arbitrary, capricious, or other10 wise unlawful, the court may remand such action, 

11 without vacatur, if vacatur would impair or delay 

12 protection of the environment or public health or 

13 otherwise undermine the timely achievement of the 

14 purposes of this Act.’’. 

15 (b) PETITION FOR RECONSIDERATION.—Section 

16 307(d)(7)(B) of the Clean Air Act (42 U.S.C. 

17 7607(d)(7)(B)) is amended as follows: 

18 (1) By inserting after the second sentence ‘‘If 

19 a petition for reconsideration is filed, the Adminis20 trator shall take final action on such petition, in21 cluding promulgation of final action either revising 

22 or determining not to revise the action for which re23 consideration is sought, within 150 days after the 

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1 tion shall be deemed denied for the purpose of judi2 cial review.’’. 

3 (2) By amending the third sentence to read as 

4 follows: ‘‘Such person may seek judicial review of 

5 such denial, or of any other final action, by the Ad6 ministrator, in response to a petition for reconsider7 ation, in the United States court of appeals for the 

8 appropriate circuit (as provided in subsection (b)).’’. 

9 SEC. 337. CONFORMING AMENDMENTS. 

10 (a) FEDERAL ENFORCEMENT.—Section 113 of the 

11 Clean Air Act (42 U.S.C. 7413) is amended as follows: 

12 (1) In subsection (a)(3), by striking ‘‘or title 

13 VI,’’ and inserting ‘‘title VI, title VII, or title VIII’’. 

14 (2) In subsection (b), by striking ‘‘or a major 

15 stationary source’’ and inserting ‘‘a major stationary 

16 source, or a covered EGU under title VIII,’’ in the 

17 material preceding paragraph (1). 

18 (3) In paragraph (2), by striking ‘‘or title VI’’ 

19 and inserting ‘‘title VI, title VII, or title VIII’’. 

20 (4) In subsection (c)— 

21 (A) in the first sentence of paragraph (1), 

22 by striking ‘‘or title VI (relating to strato23 spheric ozone control),’’ and inserting ‘‘title VI 

24 (relating to stratospheric ozone control), or title 


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1 VII or VIII (relating to reduction of greenhouse 

2 gas emissions),’’; and 

3 (B) in the first sentence of paragraph (3), 

4 by striking ‘‘or VI’’ and inserting ‘‘VI, VII, 

5 VIII’’. 

6 (5) In subsection (d)(1)(B), by striking ‘‘or VI’’ 

7 and inserting ‘‘VI, VII, or VIII’’. 

8 (6) In subsection (f), in the first sentence, by 

9 striking ‘‘or VI’’ and inserting ‘‘VI, VII, or VIII’’. 

10 (b) RETENTION OF STATE AUTHORITY.—Section 

11 116 of the Clean Air Act (42 U.S.C. 7416) is amended 

12 as follows: 

13 (1) By striking ‘‘and 233’’ and inserting ‘‘233’’. 

14 (2) By striking ‘‘of moving sources)’’ and in15 serting ‘‘of moving sources), and 861 (preempting 

16 certain State greenhouse gas programs for a limited 

17 time)’’. 

18 (c) INSPECTIONS, MONITORING, AND ENTRY.—Sec19 tion 114(a) of the Clean Air Act (42 U.S.C. 7414(a)) is 

20 amended by striking ‘‘section 112,’’ and all that follows 

21 through ‘‘(ii)’’ and inserting the following: ‘‘section 112, 

22 or any regulation of greenhouse gas emissions under title 

23 VII or VIII, (ii)’’. 


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1 (d) ENFORCEMENT.—Subsection (f) of section 304 of 

2 the Clean Air Act (42 U.S.C. 7604(f)) is amended as fol3 lows: 

4 (1) By striking ‘‘; or’’ at the end of paragraph 

5 (3) thereof and inserting a comma. 

6 (2) By striking the period at the end of para7 graph (4) thereof and inserting ‘‘, or’’. 

8 (3) By adding the following after paragraph (4) 

9 thereof: 

10 ‘‘(5) any requirement of title VII or VIII.’’. 

11 (e) ADMINISTRATIVE PROCEEDINGS AND JUDICIAL

12 REVIEW.—Section 307 of the Clean Air Act (42 U.S.C. 

13 7607) is amended as follows: 

14 (1) In subsection (a), by striking ‘‘, or section 

15 306’’ and inserting ‘‘section 306, or title VII or 

16 VIII’’. 

17 (2) In subsection (b)(1)— 

18 (A) by striking ‘‘,,’’ and inserting ‘‘,’’ in 

19 each place such punctuation appears; and 

20 (B) by striking ‘‘section 120,’’ in the first 

21 sentence and inserting ‘‘section 120, any final 

22 action under title VII or VIII,’’. 

23 (3) In subsection (d)(1) by amending subpara24 graph (S) to read as follows: 


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1 ‘‘(S) the promulgation or revision of any 

2 regulation under title VII or VIII,’’. 

3 Subtitle D—Carbon Market 

4 Assurance 

5 SEC. 341. CARBON MARKET ASSURANCE. 

6 The Federal Power Act (16 U.S.C. 791a and fol7 lowing) is amended by adding at the end the following: 

8 ‘‘PART IV—CARBON MARKET ASSURANCE 

9 ‘‘SEC. 401. OVERSIGHT AND ASSURANCE OF CARBON MAR10 KETS. 

11 ‘‘(a) DEFINITIONS.—In this section: 

12 ‘‘(1) CONTRACT OF SALE.—The term ‘contract 

13 of sale’ includes sales, agreements of sale, and 

14 agreements to sell. 

15 ‘‘(2) COVERED ENTITY.—The term ‘covered en16 tity’ shall have the meaning given in section 700 of 

17 the Clean Air Act. 

18 ‘‘(3) FUTURE DELIVERY.—The term ‘future de19 livery’ does not include any sale of any cash com20 modity for deferred shipment or delivery. 

21 ‘‘(4) OFFSET CREATION CONTRACT.—The term 

22 ‘offset creation contract’ mean a written agreement 

23 for the origination and development of an offset 

24 project, and the related issuance of offset credits, 

25 pursuant to title VII of the Clean Air Act. 


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1 ‘‘(5) REGULATED ALLOWANCE.—The term ‘reg2 ulated allowance’ means any emission allowance, 

3 compensatory allowance, offset credit, or renewable 

4 energy credit established or issued under the Amer5 ican Clean Energy and Security Act of 2009. 

6 ‘‘(6) REGULATED ALLOWANCE DERIVATIVE.— 

7 The term ‘regulated allowance derivative’ means an 

8 instrument that is, or includes, an instrument— 

9 ‘‘(A) which— 

10 ‘‘(i) is of the character of, or is com11 monly known to the trade as, a ‘put op12 tion’, ‘call option’, ‘privilege’, ‘indemnity’, 

13 ‘advance guaranty’, ‘decline guaranty’, or 

14 ‘swap agreement’; or 

15 ‘‘(ii) is a contract of sale for future 

16 delivery other than an offset creation con17 tract; and 

18 ‘‘(B) the value of which, in whole or in 

19 part, is expressly linked to the price of a regu20 lated allowance or another regulated allowance 

21 derivative. 

22 ‘‘(7) REGULATED INSTRUMENT.—The term 

23 ‘regulated instrument’ means a regulated allowance 

24 or a regulated allowance derivative. 

25 ‘‘(b) REGULATED ALLOWANCE MARKET.— 


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1 ‘‘(1) AUTHORITY.—The Commission shall pro2 mulgate regulations for the establishment, operation, 

3 and oversight of markets for regulated allowances 

4 not later than 18 months after the date of the enact5 ment of this section, and from time to time there6 after as may be appropriate. 

7 ‘‘(2) REGULATIONS.—The regulations promul8 gated pursuant to paragraph (1) shall— 

9 ‘‘(A) provide for effective and comprehen10 sive market oversight; 

11 ‘‘(B) prohibit fraud, market manipulation 

12 (including an entity’s fraudulent or manipula13 tive conduct with respect to regulated allowance 

14 derivatives that benefits the entity in regulated 

15 allowance markets), and excess speculation, and 

16 provide measures to limit unreasonable fluctua17 tion in the prices of regulated allowances; 

18 ‘‘(C) facilitate compliance with title VII of 

19 the Clean Air Act by covered entities; 

20 ‘‘(D) ensure market transparency and rec21 ordkeeping deemed necessary and appropriate 

22 by the Commission to provide for efficient price 

23 discovery; prevention of fraud, market manipu24 lation, and excess speculation; and compliance 

25 with title VII of the Clean Air Act and section 


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1 610 of the Public Utility Regulatory Policies 

2 Act; 

3 ‘‘(E) as necessary, ensure that position 

4 limitations for individual market participants 

5 are established with respect to each class of 

6 regulated allowances; 

7 ‘‘(F) as necessary, ensure that margin re8 quirements are established for each class of reg9 ulated allowances; 

10 ‘‘(G) provide for the formation and oper11 ation of a fair, orderly and liquid national mar12 ket system that allows for the best execution in 

13 the trading of regulated allowances; 

14 ‘‘(H) limit or eliminate counterparty risks, 

15 market power concentration risks, and other 

16 risks associated with over-the-counter trading; 

17 ‘‘(I) establish standards for qualification 

18 as, and operation of, trading facilities for regu19 lated allowances; 

20 ‘‘(J) establish standards for qualification 

21 as, and operation of, clearing organizations for 

22 trading facilities for regulated allowances; and 

23 ‘‘(K) include such other requirements as 

24 necessary to preserve market integrity and fa25 cilitate compliance with title VII of the Clean 


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1 Air Act and section 610 of the Public Utility 

2 Regulatory Policies Act and the regulations pro3 mulgated under such title and such section. 

4 ‘‘(3) ENFORCEMENT.— 

5 ‘‘(A) IN GENERAL.—If the Commission de6 termines, after notice and an opportunity for a 

7 hearing on the record, that any entity has vio8 lated any rule or order issued by the Commis9 sion under this subsection, the Commission may 

10 issue an order— 

11 ‘‘(i) prohibiting the entity from trad12 ing on a trading facility for regulated al13 lowances registered with the Commission, 

14 and requiring all such facilities to refuse 

15 the entity all privileges for such period as 

16 may be specified in the order; 

17 ‘‘(ii) if the entity is registered with 

18 the Commission in any capacity, sus19 pending for a period of not more than 6 

20 months, or revoking, the registration of the 

21 entity; 

22 ‘‘(iii) assessing the entity a civil pen23 alty of not more than $1,000,000 per day 

24 per violation for as long as the violation 

25 continues (and in determining the amount 


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1 of a civil penalty, the Commission shall 

2 take into account the nature and serious3 ness of the violation and the efforts to 

4 remedy the violation); and 

5 ‘‘(iv) requiring disgorgement of unjust 

6 profits, restitution to entities harmed by 

7 the violation as determined by the Com8 mission, or both. 

9 ‘‘(B) AUTHORITY TO SUSPEND OR REVOKE

10 REGISTRATION.—The Commission may suspend 

11 for a period of not more than 6 months, or re12 voke, the registration of a trading facility for 

13 regulated allowances or of a clearing organiza14 tion registered by the Commission if, after no15 tice and opportunity for a hearing on the 

16 record, the Commission finds that— 

17 ‘‘(i) the entity violated any rule or 

18 order issued by the Commission under this 

19 subsection; or 

20 ‘‘(ii) a director, officer, employee, or 

21 agent of the entity has violated any rule or 

22 order issued by the Commission under this 

23 subsection. 

24 ‘‘(C) CEASE AND DESIST PROCEEDINGS.— 


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1 ‘‘(i) IN GENERAL.—If the Commission 

2 determines that any entity may be vio3 lating, may have violated, or may be about 

4 to violate any provision of this part, or any 

5 regulation promulgated by, or any restric6 tion, condition, or order made or imposed 

7 by, the Commission under this part, and if 

8 the Commission finds that the alleged vio9 lation or threatened violation, or the con10 tinuation of the violation, is likely to result 

11 in significant harm to covered entities or 

12 market participants, or significant harm to 

13 the public interest, the Commission may 

14 issue a temporary order requiring the enti15 ty— 

16 ‘‘(I) to cease and desist from the 

17 violation or threatened violation; 

18 ‘‘(II) to take such action as is 

19 necessary to prevent the violation or 

20 threatened violation; and 

21 ‘‘(III) to prevent, as the Commis22 sion determines to be appropriate— 

23 ‘‘(aa) significant harm to 

24 covered entities or market par25 ticipants; 


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1 ‘‘(bb) significant harm to 

2 the public interest; and 

3 ‘‘(cc) frustration of the abil4 ity of the Commission to conduct 

5 the proceedings or to redress the 

6 violation at the conclusion of the 

7 proceedings. 

8 ‘‘(ii) TIMING OF ENTRY.—An order 

9 issued under clause (i) shall be entered 

10 only after notice and opportunity for a 

11 hearing, unless the Commission determines 

12 that notice and hearing before entry would 

13 be impracticable or contrary to the public 

14 interest. 

15 ‘‘(iii) EFFECTIVE DATE.—A tem16 porary order issued under clause (i) 

17 shall— 

18 ‘‘(I) become effective upon serv19 ice upon the entity; and 

20 ‘‘(II) unless set aside, limited, or 

21 suspended by the Commission or a 

22 court of competent jurisdiction, re23 main effective and enforceable pend24 ing the completion of the proceedings. 


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1 ‘‘(D) PROCEEDINGS REGARDING DISSIPA2 TION OR CONVERSION OF ASSETS.— 

3 ‘‘(i) IN GENERAL.—In a proceeding 

4 involving an alleged violation of a regula5 tion or order promulgated or issued by the 

6 Commission, if the Commission determines 

7 that the alleged violation or related cir8 cumstances are likely to result in signifi9 cant dissipation or conversion of assets, 

10 the Commission may issue a temporary 

11 order requiring the respondent to take 

12 such action as is necessary to prevent the 

13 dissipation or conversion of assets. 

14 ‘‘(ii) TIMING OF ENTRY.—An order 

15 issued under clause (i) shall be entered 

16 only after notice and opportunity for a 

17 hearing, unless the Commission determines 

18 that notice and hearing before entry would 

19 be impracticable or contrary to the public 

20 interest. 

21 ‘‘(iii) EFFECTIVE DATE.—A tem22 porary order issued under clause (i) 

23 shall— 

24 ‘‘(I) become effective upon serv25 ice upon the respondent; and 


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1 ‘‘(II) unless set aside, limited, or 

2 suspended by the Commission or a 

3 court of competent jurisdiction, re4 main effective and enforceable pend5 ing the completion of the proceedings. 

6 ‘‘(E) REVIEW OF TEMPORARY ORDERS.— 

7 ‘‘(i) APPLICATION FOR REVIEW.—At 

8 any time after a respondent has been 

9 served with a temporary cease-and-desist 

10 order pursuant to subparagraph (C) or 

11 order regarding the dissipation or conver12 sion of assets pursuant to subparagraph 

13 (D), the respondent may apply to the Com14 mission to have the order set aside, lim15 ited, or suspended. 

16 ‘‘(ii) NO PRIOR HEARING.—If a re17 spondent has been served with a temporary 

18 order entered without a prior hearing of 

19 the Commission— 

20 ‘‘(I) the respondent may, not 

21 later than 10 days after the date on 

22 which the order was served, request a 

23 hearing on the application; and 

24 ‘‘(II) the Commission shall hold a 

25 hearing and render a decision on the 


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1 application at the earliest practicable 

2 time. 

3 ‘‘(iii) JUDICIAL REVIEW.— 

4 ‘‘(I) IN GENERAL.—An entity 

5 shall not be required to submit a re6 quest for rehearing of a temporary 

7 order before seeking judicial review in 

8 accordance with this subparagraph. 

9 ‘‘(II) TIMING OF REVIEW.—Not 

10 later than 10 days after the date on 

11 which a respondent is served with a 

12 temporary cease-and-desist order en13 tered with a prior hearing of the Com14 mission, or 10 days after the date on 

15 which the Commission renders a deci16 sion on an application and hearing 

17 under clause (i) with respect to any 

18 temporary order entered without such 

19 a prior hearing— 

20 ‘‘(aa) the respondent may 

21 obtain a review of the order in a 

22 United States circuit court hav23 ing jurisdiction over the circuit in 

24 which the respondent resides or 

25 has a principal place of business, 


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1 or in the United States Court of 

2 Appeals for the District of Co3 lumbia Circuit, for an order set4 ting aside, limiting, or sus5 pending the effectiveness or en6 forcement of the order; and 

7 ‘‘(bb) the court shall have 

8 jurisdiction to enter such an 

9 order. 

10 ‘‘(III) NO PRIOR HEARING.—A 

11 respondent served with a temporary 

12 order entered without a prior hearing 

13 of the Commission may not apply to 

14 the applicable court described in sub15 clause (II) except after a hearing and 

16 decision by the Commission on the ap17 plication of the respondent under 

18 clauses (i) and (ii). 

19 ‘‘(iv) PROCEDURES.—Section 222 and 

20 Part III shall apply to— 

21 ‘‘(I) an application for review of 

22 an order under clause (i); and 

23 ‘‘(II) an order subject to review 

24 under clause (iii). 


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1 ‘‘(v) NO AUTOMATIC STAY OF TEM2 PORARY ORDER.—The commencement of 

3 proceedings under clause (iii) shall not, un4 less specifically ordered by the court, oper5 ate as a stay of the order of the Commis6 sion. 

7 ‘‘(F) ACTIONS TO COLLECT CIVIL PEN8 ALTIES.—If any person fails to pay a civil pen9 alty assessed under this subsection after an 

10 order assessing the penalty has become final 

11 and unappealable, the Commission shall bring 

12 an action to recover the amount of the penalty 

13 in any appropriate United States district court. 

14 In any such action, the validity or appropriate15 ness of the final assessment order or judgment 

16 shall not be subject to review. 

17 ‘‘(4) TRANSACTION FEES.— 

18 ‘‘(A) IN GENERAL.—The Commission 

19 shall, in accordance with this paragraph, estab20 lish and collect transaction fees designed to re21 cover the costs to the Federal Government of 

22 the supervision and regulation of regulated al23 lowance markets and market participants, in24 cluding related costs for enforcement activities, 

25 policy and rulemaking activities, administration, 


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1 legal services, and international regulatory ac2 tivities. 

3 ‘‘(B) INITIAL FEE RATE.—Each trading 

4 facility on or through which regulated allow5 ances are transacted shall pay to the Commis6 sion a fee at a rate of not more than $15 per 

7 $1,000,000 of the aggregate dollar amount of 

8 sales of regulated allowances transacted 

9 through the facility. 

10 ‘‘(C) ANNUAL ADJUSTMENT OF FEE

11 RATE.—The Commission shall, on an annual 

12 basis— 

13 ‘‘(i) assess the rate at which fees are 

14 to be collected as necessary to meet the 

15 cost recovery requirement in subparagraph 

16 (A); and 

17 ‘‘(ii) consistent with subparagraph 

18 (B), adjust the rate as necessary in order 

19 to meet the requirement. 

20 ‘‘(D) REPORT ON ADEQUACY OF FEES IN

21 RECOVERING COSTS.—The Commission, shall, 

22 on an annual basis, report to the Committee on 

23 Energy and Commerce of the House of Rep24 resentatives and the Committee on Energy and 

25 Natural Resources of the Senate on the adeVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00670 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 quacy of the transaction fees in providing fund2 ing for the Commission to regulate the regu3 lated allowance markets. 

4 ‘‘(5) JUDICIAL REVIEW.—Judicial review of ac5 tions taken by the Commission under this subsection 

6 shall be pursuant to part III. 

7 ‘‘(6) INFORMATION-SHARING.—Within 6 

8 months after a Federal agency with jurisdiction over 

9 regulated allowance derivatives is delegated author10 ity pursuant to subsection (c)(1), the agency shall 

11 enter into a memorandum of understanding with the 

12 Commission relating to information sharing, which 

13 shall include provisions ensuring that information re14 quests to markets within the respective jurisdiction 

15 of the agency are properly coordinated to facilitate, 

16 among other things, effective information-sharing 

17 while minimizing duplicative information requests, 

18 and provisions regarding the treatment of propri19 etary information. 

20 ‘‘(7) ADDITIONAL EMPLOYEES REPORT AND AP21 POINTMENT.—Within 18 months after the date of 

22 the enactment of this section, the Commission shall 

23 submit to the President, the Committee on Energy 

24 and Commerce of the House of Representatives, and 

25 the Committee on Energy and Natural Resources of 


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1 the Senate, a report that contains recommendations 

2 as to how many additional employees would be nec3 essary to provide robust oversight and enforcement 

4 of the regulations promulgated under this sub5 section. As soon as practicable after the completion 

6 of the report, subject to appropriations, the Commis7 sion shall appoint the recommended number of addi8 tional employees for such purposes. 

9 ‘‘(c) DELEGATION OF AUTHORITY BY THE PRESI10 DENT.— 

11 ‘‘(1) DELEGATION.—The President, taking into 

12 consideration the recommendations of the inter13 agency working group established in subsection (d), 

14 shall delegate to members of the working group and 

15 the heads of other appropriate Federal agencies the 

16 authority to promulgate regulations for the estab17 lishment, operation, and oversight of all markets for 

18 regulated allowance derivatives. 

19 ‘‘(2) REGULATIONS.—The regulations promul20 gated pursuant to paragraph (1) shall— 

21 ‘‘(A) provide for effective and comprehen22 sive market oversight; 

23 ‘‘(B) prohibit fraud, market manipulation, 

24 and excess speculation, and provide measures to 


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1 limit unreasonable fluctuation in the prices of 

2 regulated allowance derivatives; 

3 ‘‘(C) facilitate compliance with title VII of 

4 the Clean Air Act by covered entities; 

5 ‘‘(D) ensure market transparency and rec6 ordkeeping necessary to provide for efficient 

7 price discovery; prevention of fraud, market ma8 nipulation, and excess speculation; and compli9 ance with title VII of the Clean Air Act and 

10 section 610 of the Public Utility Regulatory 

11 Policies Act; 

12 ‘‘(E) ensure that position limitations for 

13 individual market participants are established 

14 with respect to each regulated allowance deriva15 tive and aggregate position limitations for indi16 vidual market participants are established with 

17 respect to all regulated allowance derivative 

18 markets; 

19 ‘‘(F) ensure that margin requirements are 

20 established for each regulated allowance deriva21 tive; 

22 ‘‘(G) provide for the formation and oper23 ation of a market system that allows for best 

24 execution in the trading of regulated allowance 

25 derivatives; 


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1 ‘‘(H) to the extent the regulations deviate 

2 from the rule set forth in paragraph (4)(B), 

3 limit or eliminate counterparty risks, market 

4 power concentration risks, and other risks asso5 ciated with over-the-counter trading, and pro6 mulgate reporting and market transparency 

7 rules for large traders; 

8 ‘‘(I) ensure that market participants do 

9 not evade position limits or otherwise under10 mine the integrity and effectiveness of the regu11 lations promulgated under subparagraph (C) 

12 through participation in markets not subject to 

13 the position limits and regulations; 

14 ‘‘(J) establish standards, as necessary, for 

15 qualification as, and operation of, trading facili16 ties for regulated allowance derivatives; 

17 ‘‘(K) establish standards, as necessary, for 

18 qualification as, and operation of, clearing orga19 nizations for trading facilities for regulated al20 lowance derivatives; 

21 ‘‘(L) provide boards of trade designated as 

22 contract markets under the Commodity Ex23 change Act, and market participants, with an 

24 adequate transition period for compliance with 


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1 any new regulatory requirements established 

2 under this paragraph; 

3 ‘‘(M) determine whether and to what ex4 tent offset creation contracts, to the extent in5 corporating regulated allowance derivatives, 

6 should be governed by the same regulations 

7 that apply to other regulated allowance deriva8 tives; and 

9 ‘‘(N) include such other requirements as 

10 necessary to preserve market integrity and fa11 cilitate compliance with title VII of the Clean 

12 Air Act and section 610 of the Public Utility 

13 Regulatory Policies Act and the regulations pro14 mulgated under such title and such section. 

15 ‘‘(3) DEADLINE.—The agencies authorized to 

16 promulgate regulations for the establishment, oper17 ation, and oversight of markets for regulated allow18 ance derivatives pursuant to paragraph (1) shall 

19 promulgate such regulations not later than 18 

20 months after the date of enactment of this section, 

21 and from time to time thereafter as may be appro22 priate. 

23 ‘‘(4) DEFAULT RULES.— 

24 ‘‘(A) An individual market participant, di25 rectly or in concert with another participant, 


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1 shall not control more than 10 percent of the 

2 open interest in any regulated allowance deriva3 tive. 

4 ‘‘(B) All contracts for the purchase or sale 

5 of any regulated allowance derivative shall be 

6 executed on or through a board of trade des7 ignated as a contract market under the Com8 modity Exchange Act. 

9 ‘‘(C) To the extent that regulations pro10 mulgated under this subsection provide dif11 ferent rules with respect to the matters de12 scribed in subparagraph (A) or (B), the regula13 tions shall supersede subparagraph (A) or (B), 

14 as the case may be. 

15 ‘‘(d) WORKING GROUP.— 

16 ‘‘(1) ESTABLISHMENT.—Not later than 30 days 

17 after the date of the enactment of this section, the 

18 President shall establish an interagency working 

19 group on carbon market oversight, which shall in20 clude the Administrator of the Environmental Pro21 tection Agency and representatives of other relevant 

22 agencies, to make recommendations to the President 

23 regarding proposed regulations for the establish24 ment, operation, and oversight of markets for regu25 lated allowance derivatives. 


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1 ‘‘(2) REPORT.—Not later than 180 days after 

2 the date of the enactment of this section, and bienni3 ally thereafter, the interagency working group shall 

4 submit a written report to the President and Con5 gress that includes its recommendations to the 

6 President regarding proposed regulations for the es7 tablishment, operation, and oversight of markets for 

8 regulated allowance derivatives and any rec9 ommendations to Congress for statutory changes 

10 needed to ensure the establishment, operation, and 

11 oversight of transparent, fair, stable, and efficient 

12 markets for regulated allowance derivatives. 

13 ‘‘(e) ENFORCEMENT OF REGULATIONS.—Each Fed14 eral agency that promulgates under subsection (c) a regu15 lation of conduct with respect to a regulated allowance de16 rivative shall have the same authority to enforce compli17 ance with the regulation as the Commodity Futures Trad18 ing Commission has to enforce compliance with any regu19 lation of similar conduct with respect to a contract, agree20 ment, or transaction over which the Commodity Futures 

21 Trading Commission has jurisdiction, except that any en22 forcement by the Federal Energy Regulatory Commission 

23 shall be pursuant to section 222 and Part III. 

24 ‘‘(f) PROHIBITION ON PRICE OR MARKET MANIPULA25 TION, FRAUD, AND FALSE OR MISLEADING STATEMENTS


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1 OR REPORTS.—(1) It shall be a felony punishable by a 

2 fine of not more than $25,000,000 (or $5,000,000 in the 

3 case of a person who is an individual) or imprisonment 

4 for not more than 20 years, or both, together with the 

5 costs of prosecution for any person, directly or indirectly— 

6 ‘‘(A) in connection with a transaction involving 

7 a regulated instrument, to knowingly— 

8 ‘‘(i) use any manipulative or deceptive de9 vice or contrivance in violation of regulations 

10 promulgated pursuant to this section; 

11 ‘‘(ii) corner or attempt to corner the regu12 lated instrument; or 

13 ‘‘(iii) cheat or defraud, or attempt to cheat 

14 or defraud, any other person; 

15 ‘‘(B) to knowingly deliver or cause to be deliv16 ered a false, misleading, or inaccurate report con17 cerning information or conditions that affect or tend 

18 to affect the price of a regulated instrument; 

19 ‘‘(C) to knowingly make, or cause to be made, 

20 in an application, report, or document required to be 

21 filed under any regulation promulgated pursuant to 

22 this section, a statement which is false or misleading 

23 with respect to a material fact, or to omit any mate24 rial fact required to be stated therein or necessary 

25 to make the statements therein not misleading; or 


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1 ‘‘(D) to knowingly falsify, conceal, or cover up 

2 by any trick, scheme, or artifice a material fact, 

3 make any false, fictitious, or fraudulent statements 

4 or representations, or make or use any false writing 

5 or document that contains a false, fictitious, or 

6 fraudulent statement or entry, to an entity on or 

7 through which transactions in regulated instruments 

8 occur, or are settled or cleared, acting in furtherance 

9 of its official duties under this section or regulations 

10 promulgated under this section. 

11 ‘‘(2) If a person is found guilty of a felony established 

12 in paragraph (1), the person may be prohibited from hold13 ing or trading regulated instruments for a period of not 

14 more than 5 years pursuant to the regulations promul15 gated under this section, except that, if the person is a 

16 covered entity, the person shall be allowed to hold suffi17 cient regulated allowances to meet its compliance obliga18 tions. 

19 ‘‘(g) RELATION TO STATE LAW.—Nothing in this 

20 section shall preclude, diminish or qualify any authority 

21 of a State or political subdivision thereof to adopt or en22 force any unfair competition, antitrust, consumer protec23 tion, securities, commodities or any other law or regula24 tion, except that no such State law or regulation may reVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00679 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 lieve any person of any requirement otherwise applicable 

2 under this section. 

3 ‘‘(h) MARKET REPORTS.— 

4 ‘‘(1) COLLECTION AND ANALYSIS OF INFORMA5 TION.—The Commission, in conjunction with the 

6 Federal agency with jurisdiction over regulated al7 lowance derivatives pursuant to subsection (c)(1), 

8 shall, on a continuous basis, collect and analyze the 

9 following information on the functioning of the mar10 kets for regulated instruments established under this 

11 part: 

12 ‘‘(A) The status of, and trends in, the 

13 markets, including prices, trading volumes, 

14 transaction types, and trading channels and 

15 mechanisms. 

16 ‘‘(B) Spikes, collapses, and volatility in 

17 prices of regulated instruments, and the causes 

18 therefor. 

19 ‘‘(C) The relationship between the market 

20 for regulated allowances and allowance deriva21 tives, and the spot and futures markets for en22 ergy commodities, including electricity. 

23 ‘‘(D) Evidence of fraud or manipulation in 

24 any such market, the effects on any such mar25 ket of any such fraud or manipulation (or 


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1 threat of fraud or manipulation) that the Com2 mission, in conjunction with the Federal agen3 cy, has identified, and the effectiveness of cor4 rective measures undertaken by the Commis5 sion, in conjunction with the Federal agency, to 

6 address the fraud, manipulation, or threat. 

7 ‘‘(E) The economic effects of the markets, 

8 including to macro- and micro-economic effects 

9 of unexpected significant increases and de10 creases in the price of regulated instruments. 

11 ‘‘(F) Any changes in the roles, activities, 

12 or strategies of various market participants. 

13 ‘‘(G) Regional, industrial, and consumer 

14 responses to the markets, and energy invest15 ment responses to the markets. 

16 ‘‘(H) Any other issue related to the mar17 kets that the Commission, in conjunction with 

18 the entities, deems appropriate. 

19 ‘‘(2) ANNUAL REPORTS TO THE CONGRESS.— 

20 Not later than 1 month after the end of each cal21 endar year, the Commission, in conjunction with the 

22 Federal agency, shall submit to the President, the 

23 Committee on Energy and Commerce of the House 

24 of Representatives, and the Committee on Energy 

25 and Natural Resources of the Senate, and make 


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1 available to the public, a report on the matters de2 scribed in paragraph (1) with respect to the year, in3 cluding recommendations for any administrative or 

4 statutory measures the Commission, in conjunction 

5 with the Federal agency, considers necessary to ad6 dress any threats to the transparency, fairness, or 

7 integrity of the markets in regulated instruments.’’. 

8 Subtitle E—Additional Market 

9 Assurance 

10 SEC. 351. REGULATION OF CERTAIN TRANSACTIONS IN DE11 RIVATIVES INVOLVING ENERGY COMMOD12 ITIES. 

13 (a) ENERGY COMMODITY DEFINED.—Section 1a of 

14 the Commodity Exchange Act (7 U.S.C. 1a) is amended— 

15 (1) in paragraph (14), by inserting ‘‘, an energy 

16 commodity,’’ after ‘‘excluded commodity’’; 

17 (2) by redesignating paragraphs (13) through 

18 (21) and paragraphs (22) through (34) as para19 graphs (14) through (22) and paragraphs (24) 

20 through (36), respectively; 

21 (3) by inserting after paragraph (12) the fol22 lowing: 

23 ‘‘(13) ENERGY COMMODITY.—The term ‘energy 

24 commodity’ means— 

25 ‘‘(A) coal; 


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1 ‘‘(B) crude oil, gasoline, diesel fuel, jet 

2 fuel, heating oil, and propane; 

3 ‘‘(C) electricity (excluding financial trans4 mission rights which are subject to regulation 

5 and oversight by the Federal Energy Regu6 latory Commission); 

7 ‘‘(D) natural gas; and 

8 ‘‘(E) any other substance (other than an 

9 excluded commodity, a metal, or an agricultural 

10 commodity) that is used as a source of energy, 

11 as the Commission, in its discretion, deems ap12 propriate.’’; and 

13 (4) by inserting after paragraph (22) (as so re14 designated by paragraph (2) of this subsection) the 

15 following: 

16 ‘‘(23) INCLUDED ENERGY TRANSACTION.—The 

17 term ‘included energy transaction’ means a contract, 

18 agreement, or transaction in an energy commodity 

19 for future delivery that provides for a delivery point 

20 of the energy commodity in the United States or a 

21 territory or possession of the United States, or that 

22 is offered or transacted on or through a computer 

23 terminal located in the United States.’’. 

24 (b) EXTENSION OF REGULATORY AUTHORITY TO

25 SWAPS INVOLVING ENERGY TRANSACTIONS.—Section 


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1 2(g) of such Act (7 U.S.C. 2(g)) is amended by inserting 

2 ‘‘or an energy commodity’’ after ‘‘agricultural com3 modity’’. 

4 (c) ELIMINATION OF EXEMPTION FOR OVER-THE5 COUNTER SWAPS INVOLVING ENERGY COMMODITIES.— 

6 Section 2(h)(1) of such Act (7 U.S.C. 2(h)(1)) is amended 

7 by inserting ‘‘(other than an energy commodity)’’ after 

8 ‘‘exempt commodity’’. 

9 (d) EXTENSION OF REGULATORY AUTHORITY TO IN10 CLUDED ENERGY TRANSACTIONS ON FOREIGN BOARDS

11 OF TRADE.—Section 4 of such Act (7 U.S.C. 6) is amend12 ed— 

13 (1) in subsection (a), by inserting ‘‘, and which 

14 is not an included energy transaction’’ after ‘‘terri15 tories or possessions’’ the 2nd place it appears; and 

16 (2) in subsection (b), by adding at the end the 

17 following: ‘‘The preceding sentence shall not apply 

18 with respect to included energy transactions.’’. 

19 (e) LIMITATION OF GENERAL EXEMPTIVE AUTHOR20 ITY OF THE CFTC WITH RESPECT TO INCLUDED EN21 ERGY TRANSACTIONS.— 

22 (1) IN GENERAL.—Section 4(c) of such Act (7 

23 U.S.C. 6(c)) is amended by adding at the end the 

24 following: 


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1 ‘‘(6) The Commission may not exempt any in2 cluded energy transaction from the requirements of 

3 subsection (a), unless the Commission provides 60 

4 days advance notice to the Congress and the Posi5 tion Limit Energy Advisory Group and solicits pub6 lic comment about the exemption request and any 

7 proposed Commission action.’’. 

8 (2) NULLIFICATION OF NO-ACTION LETTER EX9 EMPTIONS TO CERTAIN REQUIREMENTS APPLICABLE

10 TO INCLUDED ENERGY TRANSACTIONS.—Beginning 

11 180 days after the date of the enactment of this Act, 

12 any exemption provided by the Commodity Futures 

13 Trading Commission that has allowed included en14 ergy transactions (as defined in section 1a(13) of 

15 the Commodity Exchange Act) to be conducted with16 out regard to the requirements of section 4(a) of 

17 such Act shall be null and void. 

18 (f) REQUIREMENT TO ESTABLISH UNIFORM SPECU19 LATIVE POSITION LIMITS FOR ENERGY TRANSACTIONS.— 

20 (1) IN GENERAL.—Section 4a(a) of such Act (7 

21 U.S.C. 6a(a)) is amended— 

22 (A) by inserting ‘‘(1)’’ after ‘‘(a)’’; 

23 (B) by inserting after the 2nd sentence the 

24 following: ‘‘With respect to energy transactions, 

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1 gate number of positions which may be held by 

2 any person for each month across all markets 

3 subject to the jurisdiction of the Commission.’’; 

4 (C) in the 4th sentence by inserting ‘‘, con5 sistent with the 3rd sentence,’’ after ‘‘Commis6 sion’’; and 

7 (D) by adding after and below the end the 

8 following: 

9 ‘‘(2)(A) Not later than 60 days after the date of the 

10 enactment of this paragraph, the Commission shall con11 vene a Position Limit Energy Advisory Group consisting 

12 of representatives from— 

13 ‘‘(i) 7 predominantly commercial short hedgers 

14 of the actual energy commodity for future delivery; 

15 ‘‘(ii) 7 predominantly commercial long hedgers 

16 of the actual energy commodity for future delivery; 

17 ‘‘(iii) 4 non-commercial participants in markets 

18 for energy commodities for future delivery; and 

19 ‘‘(iv) each designated contract market or de20 rivatives transaction execution facility upon which a 

21 contract in the energy commodity for future delivery 

22 is traded, and each electronic trading facility that 

23 has a significant price discovery contract in the en24 ergy commodity. 


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1 ‘‘(B) Not later than 60 days after the date on which 

2 the advisory group is convened under subparagraph (A), 

3 and annually thereafter, the advisory group shall submit 

4 to the Commission advisory recommendations regarding 

5 the position limits to be established in paragraph (1). 

6 ‘‘(C) The Commission shall have exclusive authority 

7 to grant exemptions for bona fide hedging transactions 

8 and positions from position limits imposed under this Act 

9 on energy transactions.’’. 

10 (2) CONFORMING AMENDMENTS.— 

11 (A) SIGNIFICANT PRICE DISCOVERY CON12 TRACTS.—Section 2(h)(7) of such Act (7 U.S.C. 

13 2(h)(7)) is amended— 

14 (i) in subparagraph (A)— 

15 (I) by inserting ‘‘of this para16 graph and section 4a(a)’’ after ‘‘(B) 

17 through (D)’’; and 

18 (II) by inserting ‘‘of this para19 graph’’ before the period; and 

20 (ii) in subparagraph (C)(ii)(IV)— 

21 (I) in the heading, by striking 

22 ‘‘LIMITATIONS OR’’; and 

23 (II) by striking ‘‘position limita24 tions or’’. 


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1 (B) CONTRACTS TRADED ON OR THROUGH

2 DESIGNATED CONTRACT MARKETS.—Section 

3 5(d)(5) of such Act (7 U.S.C. 7(d)(5)) is 

4 amended— 

5 (i) in the heading by striking ‘‘LIMI6 TATIONS OR’’; and 

7 (ii) by striking ‘‘position limitations 

8 or’’. 

9 (C) CONTRACTS TRADED ON OR THROUGH

10 DERIVATIVES TRANSACTION EXECUTION FACILI11 TIES.—Section 5a(d)(4) of such Act (7 U.S.C. 

12 7a(d)(4)) is amended— 

13 (i) in the heading by striking ‘‘LIMI14 TATIONS OR’’; and 

15 (ii) by striking ‘‘position limits or’’. 

16 (g) ELIMINATION OF THE SWAPS LOOPHOLE.—Sec17 tion 4a(c) of such Act (7 U.S.C. 6a(c)) is amended— 

18 (1) by inserting ‘‘(1)’’ after ‘‘(c)’’; and 

19 (2) by adding after and below the end the fol20 lowing: 

21 ‘‘(2) For the purposes of contracts of sale for future 

22 delivery and options on such contracts or commodities, the 

23 Commission shall define what constitutes a bona fide 

24 hedging transaction or position as a transaction or posi25 tion that— 


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1 ‘‘(A)(i) represents a substitute for transactions 

2 made or to be made or positions taken or to be 

3 taken at a later time in a physical marketing chan4 nel; 

5 ‘‘(ii) is economically appropriate to the reduc6 tion of risks in the conduct and management of a 

7 commercial enterprise; and 

8 ‘‘(iii) arises from the potential change in the 

9 value of— 

10 ‘‘(I) assets that a person owns, produces, 

11 manufactures, processes, or merchandises or 

12 anticipates owning, producing, manufacturing, 

13 processing, or merchandising; 

14 ‘‘(II) liabilities that a person owns or an15 ticipates incurring; or 

16 ‘‘(III) services that a person provides, pur17 chases, or anticipates providing or purchasing; 

18 or 

19 ‘‘(B) reduces risks attendant to a position re20 sulting from a transaction that— 

21 ‘‘(i) was executed pursuant to subsection 

22 (d), (g), (h)(1), or (h)(2) of section 2, or an ex23 emption issued by the Commission by rule, reg24 ulation 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

9 OF 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 

15 and setting routine detailed reporting requirements 

16 for any positions of such entities in contracts traded 

17 on designated contract markets, over-the-counter 

18 markets, derivatives transaction execution facilities, 

19 foreign boards of trade subject to section 4(f), and 

20 electronic trading facilities with respect to signifi21 cant price discovery contracts not later than 120 

22 days after the date of the enactment of this sub23 section, and issue a final rule within 180 days after 

24 such date of enactment. 


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1 ‘‘(2) DISAGGREGATION OF INDEX FUNDS AND

2 OTHER DATA IN MARKETS.—Subject to section 8 

3 and beginning within 60 days of the issuance of the 

4 final rule required by paragraph (1), the Commis5 sion shall 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 

9 by 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 

13 to the extent such information is available. 

14 ‘‘(3) DISCLOSURE OF IDENTITY OF HOLDERS

15 OF POSITIONS IN INDEXES IN EXCESS OF POSITION

16 LIMITS.—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) NO EFFECT ON FERC AUTHORITY.—This Act 

19 shall not be interpreted to affect the jurisdiction of the 

20 Federal Energy Regulatory Commission with respect to 

21 the authority of the Federal Energy Regulatory Commis22 sion under the Federal Power Act (16 U.S.C. 791a et 

23 seq.), the Natural Gas Act (15 U.S.C. 717 et seq.), or 

24 other law to obtain information, carry out enforcement acVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00692 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 tions, or otherwise carry out the responsibilities of the 

2 Federal Energy Regulatory Commission.’’. 

3 SEC. 353. INSPECTOR GENERAL OF THE COMMODITY FU4 TURES TRADING COMMISSION. 

5 (a) ELEVATION OF OFFICE.— 

6 (1) INCLUSION OF CFTC IN DEFINITION OF ES7 TABLISHMENT.— 

8 (A) Section 11(1) of the Inspector General 

9 Act of 1978 (5 U.S.C. App.) is amended by 

10 striking ‘‘or the Federal Cochairpersons of the 

11 Commissions established under section 15301 

12 of title 40, United States Code;’’ and inserting 

13 ‘‘the Federal Cochairpersons of the Commis14 sions established under section 15301 of title 

15 40, United States Code; or the Chairman of the 

16 Commodity Futures Trading Commission;’’. 

17 (B) Section 11(2) of the Inspector General 

18 Act of 1978 (5 U.S.C. App.) is amended by 

19 striking ‘‘or the Commissions established under 

20 section 15301 of title 40, United States Code,’’ 

21 and inserting ‘‘the Commissions established 

22 under section 15301 of title 40, United States 

23 Code, or the Commodity Futures Trading Com24 mission,’’. 


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1 (2) EXCLUSION OF CFTC FROM DEFINITION OF

2 DESIGNATED FEDERAL ENTITY.—Section 8G(a)(2) 

3 of the Inspector General Act of 1978 (5 U.S.C. 

4 App.) is amended by striking ‘‘the Commodity Fu5 tures Trading Commission,’’. 

6 (b) EFFECTIVE DATE; TRANSITION RULE.— 

7 (1) EFFECTIVE DATE.—The amendments made 

8 by this section shall take effect 30 days after the 

9 date of the enactment of this Act. 

10 (2) TRANSITION RULE.—An individual serving 

11 as Inspector General of the Commodity Futures 

12 Trading Commission on the effective date of this 

13 section pursuant to an appointment made under sec14 tion 8G of the Inspector General Act of 1978 (5 

15 U.S.C. App.)— 

16 (A) may continue so serving until the 

17 President makes an appointment under section 

18 3(a) of such Act consistent with the amend19 ments made by this section; and 

20 (B) shall, while serving under subpara21 graph (A), remain subject to the provisions of 

22 section 8G of such Act which apply with respect 

23 to the Commodity Futures Trading Commis24 sion. 


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1 SEC. 354. SETTLEMENT AND CLEARING THROUGH REG2 ISTERED DERIVATIVES CLEARING ORGANIZA3 TIONS. 

4 (a) IN GENERAL.— 

5 (1) APPLICATION TO EXCLUDED DERIVATIVE

6 TRANSACTIONS.— 

7 (A) Section 2(d)(1) of the Commodity Ex8 change Act (7 U.S.C. 2(d)(1)) is amended— 

9 (i) by striking ‘‘and’’ at the end of 

10 subparagraph (A); 

11 (ii) by striking the period at the end 

12 of subparagraph (B) and inserting ‘‘and’’; 

13 and 

14 (iii) by adding at the end the fol15 lowing: 

16 ‘‘(C) except as provided in section 4(f), the 

17 agreement, contract, or transaction is settled 

18 and cleared through a derivatives clearing orga19 nization registered with the Commission.’’. 

20 (B) Section 2(d)(2) of such Act (7 U.S.C. 

21 2(d)(2)) is amended— 

22 (i) by striking ‘‘and’’ at the end of 

23 subparagraph (B); 

24 (ii) by striking the period at the end 

25 of subparagraph (C) and inserting ‘‘; and’’; 

26 and 


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1 (iii) by adding at the end the fol2 lowing: 

3 ‘‘(D) except as provided in section 4(f), the 

4 agreement, contract, or transaction is settled 

5 and cleared through a derivatives clearing orga6 nization registered with the Commission.’’. 

7 (2) APPLICATION TO CERTAIN SWAP TRANS8 ACTIONS.—Section 2(g) of such Act (7 U.S.C. 2(g)) 

9 is amended— 

10 (A) by striking ‘‘and’’ at the end of para11 graph (2); 

12 (B) by striking the period at the end of 

13 paragraph (3) and inserting ‘‘; and’’; and 

14 (C) by adding at the end the following: 

15 ‘‘(4) except as provided in section 4(f), settled 

16 and cleared through a derivatives clearing organiza17 tion registered with the Commission.’’. 

18 (3) APPLICATION TO CERTAIN TRANSACTIONS

19 IN EXEMPT COMMODITIES.— 

20 (A) Section 2(h)(1) of such Act ( 7 U.S.C. 

21 2(h)(1)) is amended— 

22 (i) by striking ‘‘and’’ at the end of 

23 subparagraph (A); 


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1 (ii) by striking the period at the end 

2 of subparagraph (B) and inserting ‘‘; 

3 and’’; and 

4 (iii) by adding at the end the fol5 lowing: 

6 ‘‘(C) except as provided in section 4(f), is 

7 settled and cleared through a derivatives clear8 ing organization registered with the Commis9 sion.’’. 

10 (B) Section 2(h)(3) of such Act (7 U.S.C. 

11 2(h)(3)) is amended— 

12 (i) by striking ‘‘and’’ at the end of 

13 subparagraph (A); 

14 (ii) by striking the period at the end 

15 of subparagraph (B) and inserting ‘‘; 

16 and’’; and 

17 (iii) by adding at the end the fol18 lowing: 

19 ‘‘(C) except as provided in section 4(f), set20 tled and cleared through a derivatives clearing 

21 organization registered with the Commission.’’. 

22 (4) GENERAL EXEMPTIVE AUTHORITY.—Sec23 tion 4(c)(1) of such Act (7 U.S.C. 6(c)(1)) is 

24 amended by inserting ‘‘the agreement, contract, or 

25 transaction, except as provided in section 4(h), will 


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1 be settled and cleared through a derivatives clearing 

2 organization registered with the Commission and’’ 

3 before ‘‘the Commission determines’’. 

4 (5) CONFORMING AMENDMENT RELATING TO

5 SIGNIFICANT PRICE DISCOVERY CONTRACTS.—Sec6 tion 2(h)(7)(D) of such Act (7 U.S.C. 2(h)(7)(D)) is 

7 amended by striking the heading for the subpara8 graph and all that follows through ‘‘As part of’’ and 

9 inserting the following: 

10 ‘‘(D) REVIEW OF IMPLEMENTATION.—As 

11 part of’’. 

12 (b) ALTERNATIVES TO CLEARING THROUGH DES13 IGNATED CLEARING ORGANIZATIONS.—Section 4 of such 

14 Act (7 U.S.C. 6), as amended by section 351(h) of this 

15 Act, is amended by adding at the end the following: 

16 ‘‘(f) ALTERNATIVES TO CLEARING THROUGH DES17 IGNATED CLEARING ORGANIZATIONS.— 

18 ‘‘(1) SETTLEMENT AND CLEARING THROUGH

19 CERTAIN OTHER REGULATED ENTITIES.—An agree20 ment, contract, or transaction, or class thereof, re21 lating to an excluded commodity, that would other22 wise be required to be settled and cleared by section 

23 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or 

24 2(h)(3)(C) of this Act, or subsection (c)(1) of this 

25 section may be settled and cleared through an entity 


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1 listed in subsections (a) or (b) of section 409 of the 

2 Federal Deposit Insurance Corporation Improvement 

3 Act of 1991. 

4 ‘‘(2) WAIVER OF CLEARING REQUIREMENT.— 

5 ‘‘(A) The Commission, in its discretion, 

6 may exempt an agreement, contract, or trans7 action, or class thereof, that would otherwise be 

8 required by section 2(d)(1)(C), 2(d)(2)(D), 

9 2(g)(4), 2(h)(1)(C), or 2(h)(3)(C) of this Act, 

10 or subsection (c)(1) of this section to be settled 

11 and cleared through a derivatives clearing orga12 nization registered with the Commission from 

13 such requirement. 

14 ‘‘(B) In granting exemptions pursuant to 

15 subparagraph (A), the Commission shall consult 

16 with the Securities and Exchange Commission 

17 and the Board of Governors of the Federal Re18 serve System regarding exemptions that relate 

19 to excluded commodities or entities for which 

20 the Securities Exchange Commission or the 

21 Board of Governors of the Federal Reserve Sys22 tem serve as the primary regulator. 

23 ‘‘(C) Before granting an exemption pursu24 ant to subparagraph (A), the Commission shall 


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1 find that the agreement, contract, or trans2 action, or class thereof— 

3 ‘‘(i) is highly customized as to its ma4 terial terms and conditions; 

5 ‘‘(ii) is transacted infrequently; 

6 ‘‘(iii) does not serve a significant 

7 price-discovery function in the market8 place; and 

9 ‘‘(iv) is being entered into by parties 

10 who can demonstrate the financial integ11 rity of the agreement, contract, or trans12 action and their own financial integrity, as 

13 such terms and standards are determined 

14 by the Commission. The standards may in15 clude, with respect to any federally regu16 lated financial entity for which net capital 

17 requirements are imposed, a net capital re18 quirement associated with any agreement, 

19 contract, or transaction subject to an ex20 emption from the clearing requirement 

21 that is higher than the net capital require22 ment that would be associated with such a 

23 transaction were it cleared 

24 ‘‘(D) Any agreement, contract, or trans25 action, or class thereof, which is exempted purVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00700 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 suant to subparagraph (A) shall be reported to 

2 the Commission in a manner designated by the 

3 Commission, or to such other entity the Com4 mission deems appropriate. 

5 ‘‘(E) The Commission, the Securities and 

6 Exchange Commission and the Board of Gov7 ernors of the Federal Reserve System shall 

8 enter into a memorandum of understanding by 

9 which the information reported to the Commis10 sion pursuant to subparagraph (D) with regard 

11 to excluded commodities or entities for which 

12 the Securities Exchange Commission or the 

13 Board of Governors of the Federal Reserve Sys14 tem serve as the primary regulator may be pro15 vided to the other agencies. 

16 ‘‘(g) SPOT AND FORWARD EXCLUSION.—The settle17 ment and clearing requirements of section 2(d)(1)(C), 

18 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 2(h)(3)(C), or 4(c)(1) 

19 shall not apply to an agreement, contract, or transaction 

20 of any cash commodity for immediate or deferred ship21 ment or delivery, as defined by the Commission.’’. 

22 (c) ADDITIONAL REQUIREMENTS APPLICABLE TO

23 APPLICANTS FOR REGISTRATION AS A DERIVATIVE

24 CLEARING ORGANIZATION.—Section 5b(c)(2) of such Act 


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1 (7 U.S.C. 7a-1(c)(2)) is amended by adding at the end 

2 the following: 

3 ‘‘(O) DISCLOSURE OF GENERAL INFORMA4 TION.—The applicant shall disclose publicly and 

5 to the Commission information concerning— 

6 ‘‘(i) the terms and conditions of con7 tracts, agreements, and transactions 

8 cleared and settled by the applicant; 

9 ‘‘(ii) the conventions, mechanisms, 

10 and practices applicable to the contracts, 

11 agreements, and transactions; 

12 ‘‘(iii) the margin-setting methodology 

13 and the size and composition of the finan14 cial resource package of the applicant; and 

15 ‘‘(iv) other information relevant to 

16 participation in the settlement and clearing 

17 activities of the applicant. 

18 ‘‘(P) DAILY PUBLICATION OF TRADING IN19 FORMATION.—The applicant shall make public 

20 daily information on settlement prices, volume, 

21 and open interest for contracts settled or 

22 cleared pursuant to the requirements of 

23 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 

24 2(h)(3)(C) or 4(c)(1) of this Act by the appli25 cant if the Commission determines that the 


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1 contracts perform a significant price discovery 

2 function for transactions in the cash market for 

3 the commodity underlying the contracts. 

4 ‘‘(Q) FITNESS STANDARDS.—The applicant 

5 shall establish and enforce appropriate fitness 

6 standards for directors, members of any dis7 ciplinary committee, and members of the appli8 cant, and any other persons with direct access 

9 to the settlement or clearing activities of the 

10 applicant, including any parties affiliated with 

11 any of the persons described in this subpara12 graph.’’. 

13 (d) AMENDMENTS.— 

14 (1) Section 409 of the Federal Deposit Insur15 ance Corporation Improvement Act of 1991 (12 

16 U.S.C. 4422) is amended by adding at the end the 

17 following: 

18 ‘‘(c) CLEARING REQUIREMENT.—A multilateral 

19 clearing organization described in subsections (a) or (b) 

20 of this section shall comply with requirements similar to 

21 the requirements of sections 5b and 5c or the Commodity 

22 Exchange Act.’’. 

23 (2) Section 407 of the Legal Certainty for 

24 Bank Products Act of 2000 (7 U.S.C. 27e) is 

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1 ing requirements of sections 2(d)(1)(C), 2(d)(2)(D), 

2 2(g)(4), 2(h)(1)(C), 2(h)(3)(C), and 4(c)(1) of such 

3 Act’’ after ‘‘the clearing of covered swap agree4 ments’’. 

5 (e) EFFECTIVE DATE.—The amendments made by 

6 this section shall take effect 150 days after the date of 

7 the enactment of this Act. 

8 (f) TRANSITION RULE.—Any agreement, contract, or 

9 transaction entered into before the date of the enactment 

10 of this Act or within 150 days after such date of enact11 ment, in reliance on subsection (d), (g), (h)(1), or (h)(3) 

12 of section 2 of the Commodity Exchange Act or any other 

13 exemption issued by the Commission Futures Trading 

14 Commission by rule, regulation, or order shall, within 90 

15 days after such date of enactment, unless settled and 

16 cleared through an entity registered with the Commission 

17 as a derivatives clearing organization or another clearing 

18 entity pursuant to section 4(f) of such Act, be reported 

19 to the Commission in a manner designated by the Com20 mission, or to such other entity as the Commission deems 

21 appropriate. 


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1 SEC. 355. LIMITATION ON ELIGIBILITY TO PURCHASE A 

2 CREDIT DEFAULT SWAP. 

3 (a) IN GENERAL.—Section 4c of the Commodity Ex4 change Act (7 U.S.C. 6c) is amended by adding at the 

5 end the following: 

6 ‘‘(h) LIMITATION ON ELIGIBILITY TO PURCHASE A

7 CREDIT DEFAULT SWAP.—It shall be unlawful for any 

8 person to enter into a credit default swap unless the per9 son— 

10 ‘‘(1) owns a credit instrument which is insured 

11 by the credit default swap; 

12 ‘‘(2) would experience financial loss if an event 

13 that is the subject of the credit default swap occurs 

14 with respect to the credit instrument; and 

15 ‘‘(3) meets such minimum capital adequacy 

16 standards as may be established by the Commission, 

17 in consultation with the Board of Governors of the 

18 Federal Reserve System, or such more stringent 

19 minimum capital adequacy standards as may be es20 tablished by or under the law of any State in which 

21 the swap is originated or entered into, or in which 

22 possession of the contract involved takes place.’’. 

23 (b) ELIMINATION OF PREEMPTION OF STATE

24 BUCKETING LAWS REGARDING NAKED CREDIT DEFAULT

25 SWAPS.—Section 12(e)(2)(B) of such Act (7 U.S.C. 

26 16(e)(2)(B)) is amended by inserting ‘‘(other than a credit 


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1 default swap in which the purchaser of the swap would 

2 not experience financial loss if an event that is the subject 

3 of the swap occurred)’’ before ‘‘that is excluded’’. 

4 (c) DEFINITION OF CREDIT DEFAULT SWAP.—Sec5 tion 1a of such Act (7 U.S.C. 1a), as amended by section 

6 351(a) of this Act, is amended by adding at the end the 

7 following: 

8 ‘‘(37) CREDIT DEFAULT SWAP.—the term ‘cred9 it default swap’ means a contract which insures a 

10 party to the contract against the risk that an entity 

11 may experience a loss of value as a result of an 

12 event specified in the contract, such as a default or 

13 credit downgrade. A credit default swap that is trad14 ed on or cleared by a registered entity shall be ex15 cluded from the definition of a security as defined in 

16 this Act and in section 2(a)(1) of the Securities Act 

17 of 1933 or section 3(a)(10) of the Securities Ex18 change Act of 1934, except it shall be deemed a se19 curity solely for purpose of enforcing prohibitions 

20 against insider trading in sections 10 and 16 of the 

21 Securities Exchange Act of 1934.’’. 

22 (d) EFFECTIVE DATE.—The amendments made by 

23 this section shall be effective for credit default swaps (as 

24 defined in section 1a(37) of the Commodity Exchange Act) 


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1 entered into after 60 days after the date of the enactment 

2 of this section. 

3 SEC. 356. TRANSACTION FEES. 

4 (a) IN GENERAL.—Section 12 of the Commodity Ex5 change Act (7 U.S.C. 16) is amended by redesignating 

6 subsections (e), (f), and (g) as subsections (f), (g), and 

7 (h), respectively, and inserting after subsection (d) the fol8 lowing: 

9 ‘‘(e) CLEARING FEES.— 

10 ‘‘(1) IN GENERAL.—The Commission shall, in 

11 accordance with this subsection, charge and collect 

12 from each registered clearing organization, and each 

13 such organization shall pay to the Commission, 

14 transaction fees at a rate calculated to recover the 

15 costs to the Federal Government of the supervision 

16 and regulation of futures markets, except those di17 rectly related to enforcement. 

18 ‘‘(2) FEES ASSESSED PER SIDE OF CLEARED

19 CONTRACTS.— 

20 ‘‘(A) IN GENERAL.—The Commission shall 

21 determine the fee rate referred to in paragraph 

22 (1), and shall apply the fee rate per side of any 

23 transaction cleared. 

24 ‘‘(B) AUTHORITY TO DELEGATE.—The 

25 Commission may determine the procedures by 


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1 which the fee rate is to be applied on the trans2 actions subject to the fee, or delegate the au3 thority to make the determination to any appro4 priate derivatives clearing organization. 

5 ‘‘(3) EXEMPTIONS.—The Commision may not 

6 impose a fee under paragraph (1) on— 

7 ‘‘(A) a class of contracts or transactions if 

8 the Commission finds that it is in the public in9 terest to exempt the class from the fee; or 

10 ‘‘(B) a contract or transaction cleared by 

11 a registered derivatives clearing organization 

12 that is— 

13 ‘‘(i) subject to fees under section 31 

14 of the Securities Exchange Act of 1934; or 

15 ‘‘(ii) a security as defined in the Secu16 rities Act of 1933 or the Securities Ex17 change Act of 1934. 

18 ‘‘(4) DATES FOR PAYMENT OF FEES.—The fees 

19 imposed under paragraph (1) shall be paid on or be20 fore— 

21 ‘‘(A) March 15 of each year, with respect 

22 to transactions occurring on or after the pre23 ceding September 1 and on or before the pre24 ceding December 31; and 


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1 ‘‘(B) September 15 of each year, with re2 spect to transactions occurring on or after the 

3 preceding January 1 and on or before the pre4 ceding August 31. 

5 ‘‘(5) ANNUAL ADJUSTMENT OF FEE RATES.— 

6 ‘‘(A) IN GENERAL.—Not later than April 

7 30 of each fiscal year, the Commission shall, by 

8 order, adjust each fee rate determined under 

9 paragraph (2) for the fiscal year to a uniform 

10 adjusted rate that, when applied to the esti11 mated aggregate number of cleared sides of 

12 transactions for the fiscal year, is reasonably 

13 likely to produce aggregate fee receipts under 

14 this subsection for the fiscal year equal to the 

15 target offsetting receipt amount for the fiscal 

16 year. 

17 ‘‘(B) DEFINITIONS.—In subparagraph (A): 

18 ‘‘(i) ESTIMATED AGGREGATE NUMBER

19 OF CLEARED SIDES OF TRANSACTIONS.— 

20 The term ‘estimated aggregate number of 

21 cleared sides of transactions’ means, with 

22 respect to a fiscal year, the aggregate 

23 number of cleared sides of transactions to 

24 be cleared by registered derivatives clear25 ing organizations during the fiscal year, as 


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1 estimated by the Commission, after con2 sultation with the Office of Management 

3 and Budget, using the methodology re4 quired for making projections pursuant to 

5 section 257 of the Balanced Budget and 

6 Emergency Deficit Control Act of 1985. 

7 ‘‘(ii) TARGET OFFSETTING RECEIPT

8 AMOUNT.—The term ‘target offsetting re9 ceipt amount’ means, with respect to a fis10 cal year, the total level of Commission 

11 budget authority for all non-enforcement 

12 activities of the Commission, as contained 

13 in the regular appropriations Acts for the 

14 fiscal year. 

15 ‘‘(C) NO JUDICIAL REVIEW.—An adjusted 

16 fee rate prescribed under subparagraph (A) 

17 shall not be subject to judicial review. 

18 ‘‘(6) PUBLICATION.—Not later than April 30 of 

19 each fiscal year, the Commission shall cause to be 

20 published in the Federal Register notices of the fee 

21 rates applicable under this subsection for the suc22 ceeding fiscal year, and any estimate or projection 

23 on which the fee rates are based. 

24 ‘‘(7) INAPPLICABILITY OF CERTAIN PROCE25 DURAL RULES.—Section 553 of title 5, United 


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1 States Code, shall not apply with respect to any ex2 ercise of authority under this subsection. 

3 ‘‘(8) ESTABLISHMENT OF FUTURES AND OP4 TIONS TRANSACTION FEE ACCOUNT; DEPOSIT OF

5 FEES.—There is established in the Treasury of the 

6 United States an account which shall be known as 

7 the ‘Futures and Options Transaction Fee Account’. 

8 All fees collected under this subsection for a fiscal 

9 year shall be deposited in the account. Amounts in 

10 the account are authorized to be appropriated to 

11 fund the expenditures of the Commission.’’. 

12 (b) EFFECTIVE DATE.—The amendments made by 

13 subsection (a) shall apply to fiscal years beginning 30 or 

14 more days after the date of the enactment of this Act. 

15 (c) TRANSITION RULE.—If this section becomes law 

16 after March 31 and before September 1 of a fiscal year, 

17 then paragraphs (5)(A) and (6) of section 12(e) of the 

18 Commodity Exchange Act shall be applied, in the case of 

19 the 1st fiscal year beginning after the date of the enact20 ment of this Act, by substituting ‘‘August 31’’ for ‘‘April 

21 30’’. 

22 SEC. 357. NO EFFECT ON AUTHORITY OF THE FEDERAL 

23 TRADE COMMISSION. 

24 Nothing in this subtitle shall be interpreted to affect 

25 or diminish the jurisdiction or authority of the Federal 


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1 Trade Commission with respect to its authorities under 

2 the Federal Trade Commission Act (15 U.S.C. 41 et seq.) 

3 or the Energy Independence and Security Act of 2007 

4 (Public Law 110–140) to obtain information, to carry out 

5 enforcement activities or otherwise carry out the respon6 sibilities of the Federal Trade Commission. 

7 SEC. 358. REGULATION OF CARBON DERIVATIVES MAR8 KETS. 

9 (a) DEFAULT RULE.—Section 2 of the Commodity 

10 Exchange Act (7 U.S.C. 2), as amended by section 352 

11 of this Act, is amended by adding at the end the following: 

12 ‘‘(k) The Commission shall have jurisdiction over the 

13 establishment, operations, and oversight of markets for 

14 regulated allowance derivatives (as defined in section 401 

15 of the Federal Power Act (16 U.S.C. 791a and following), 

16 and shall provide for the establishment, operation, and 

17 oversight of the markets in accordance with the same reg18 ulations that apply under this Act to included energy 

19 transactions.’’. 

20 (b) PRESIDENTIAL DETERMINATIONS.—To the ex21 tent that the President delegates the authority to promul22 gate regulations for the establishment, operation, and 

23 oversight of all markets for regulated allowance derivatives 

24 to a Federal agency other than the Commodity Futures 

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1 eral Power Act, such determination shall supersede sub2 section (a). To the extent that the President determines 

3 that regulations promulgated pursuant to section 

4 401(c)(2) of the Federal Power Act would provide for 

5 more stringent and effective market oversight, such regu6 lations shall supersede subsection (a). Nothing in this sec7 tion shall be construed to affect the operation of the de8 fault rules established in section 401(c)(4) of the Federal 

9 Power Act. 

10 TITLE IV—TRANSITIONING TO A 

11 CLEAN ENERGY ECONOMY 

12 Subtitle A—Industrial Sector 

13 SEC. 401. ENSURING REAL REDUCTIONS IN INDUSTRIAL 

14 EMISSIONS. 

15 Title VII of the Clean Air Act is amended by insert16 ing after part E the following new part: 

17 ‘‘PART F—ENSURING REAL REDUCTIONS IN 

18 INDUSTRIAL EMISSIONS 

19 ‘‘SEC. 761. PURPOSES. 

20 ‘‘(a) PURPOSE OF PART.—The purposes of this part 

21 are— 

22 ‘‘(1) to promote a strong global effort to signifi23 cantly reduce greenhouse gas emissions, and, 

24 through this global effort, stabilize greenhouse gas 

25 concentrations in the atmosphere at a level that will 


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1 prevent dangerous anthropogenic interference with 

2 the climate system; and 

3 ‘‘(2) to prevent an increase in greenhouse gas 

4 emissions in countries other than the United States 

5 as a result of direct and indirect compliance costs in6 curred under this title. 

7 ‘‘(b) PURPOSES OF SUBPART 1.—The purposes of 

8 subpart 1 are additionally— 

9 ‘‘(1) to rebate the owners and operators of enti10 ties in eligible domestic industrial sectors for their 

11 greenhouse gas emission costs incurred under this 

12 title, but not for costs associated with other related 

13 or unrelated market dynamics; 

14 ‘‘(2) to design such rebates in a way that will 

15 prevent carbon leakage while also rewarding innova16 tion and facility-level investments in energy effi17 ciency performance improvements; and 

18 ‘‘(3) to eliminate or reduce distribution of emis19 sion allowances under this part when such distribu20 tion is no longer necessary to prevent carbon leakage 

21 from eligible industrial sectors. 

22 ‘‘SEC. 762. INTERNATIONAL NEGOTIATIONS. 

23 ‘‘(a) FINDING.—Congress finds that the purposes of 

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1 tively addressed and achieved through agreements nego2 tiated between the United States and foreign countries. 

3 ‘‘(b) STATEMENT OF POLICY.—It is the policy of the 

4 United States to work proactively under the United Na5 tions Framework Convention on Climate Change, and in 

6 other appropriate forums, to establish binding agreements, 

7 including sectoral agreements, committing all major 

8 greenhouse gas-emitting nations to contribute equitably to 

9 the reduction of global greenhouse gas emissions. 

10 ‘‘(c) NOTIFICATION OF FOREIGN COUNTRIES.—Not 

11 later than January 1, 2020, the President shall notify for12 eign countries that an International Reserve Allowance 

13 Program, as described in subpart 2, may apply to primary 

14 products produced in a foreign country by a sector for 

15 which the President has made a determination described 

16 in section 767(c). 

17 ‘‘SEC. 763. DEFINITIONS. 

18 ‘‘In this part: 

19 ‘‘(1) CARBON LEAKAGE.—The term ‘carbon 

20 leakage’ means any substantial increase (as deter21 mined by the Administrator) in greenhouse gas 

22 emissions by industrial entities located in other 

23 countries if such increase is caused by an incre24 mental cost of production increase in the United 


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1 States resulting from the implementation of this 

2 title. 

3 ‘‘(2) ELIGIBLE INDUSTRIAL SECTOR.—The 

4 term ‘eligible industrial sector’ means an industrial 

5 sector determined by the Administrator under sec6 tion 764(b) to be eligible to receive emission allow7 ance rebates under subpart 1. 

8 ‘‘(3) INDUSTRIAL SECTOR.—The term ‘indus9 trial sector’ means any sector that is in the manu10 facturing sector (as defined in NAICS codes 31, 32, 

11 and 33). 

12 ‘‘(4) NAICS.—The term ‘NAICS’ means the 

13 North American Industrial Classification System of 

14 2002. 

15 ‘‘(5) OUTPUT.—The term ‘output’ means the 

16 total tonnage or other standard unit of production 

17 (as determined by the Administrator) produced by 

18 an entity in an industrial sector. The output of the 

19 cement sector is hydraulic cement, and not clinker. 

20 ‘‘(6) PRIMARY PRODUCT.—The term ‘primary 

21 product’ means a product manufactured by an eligi22 ble industrial sector that is— 

23 ‘‘(A) iron, steel, steel mill products (includ24 ing pipe and tube), aluminum, cement, glass 

25 (including flat, container, and specialty glass 


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1 and fiberglass), pulp, paper, chemicals, or in2 dustrial 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

13 INTENSITY.—As determined by the Admin14 istrator, 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); 

21 or 

22 ‘‘(II) a greenhouse gas intensity 

23 of at least 5 percent, calculated by di24 viding— 


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1 ‘‘(aa) the number 20 multi2 plied by the number of tons of 

3 carbon dioxide equivalent green4 house gas emissions (including 

5 direct emissions from fuel com6 bustion, process emissions, and 

7 indirect emissions from the gen8 eration of electricity used to 

9 produce the output of the sector) 

10 of the sector; by 

11 ‘‘(bb) the value of the ship12 ments of the sector, based on 

13 data described in subparagraph 

14 (E). 

15 ‘‘(ii) TRADE INTENSITY.—As deter16 mined by the Administrator, the industrial 

17 sector had a trade intensity of at least 15 

18 percent, calculated by dividing the value of 

19 the total imports and exports of such sec20 tor by the value of the shipments plus the 

21 value of imports of such sector, based on 

22 data described in subparagraph (E). 

23 ‘‘(iii) VERY HIGH ENERGY OR GREEN24 HOUSE GAS INTENSITY.—As determined by 

25 the Administrator, the industrial sector 


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1 had an energy or greenhouse gas intensity, 

2 as calculated under clause (i)(I) or (II), of 

3 at least 20 percent. 

4 ‘‘(B) IRON AND STEEL SECTOR.—The Ad5 ministrator shall consider as in different indus6 trial sectors— 

7 ‘‘(i) entities using integrated iron and 

8 steelmaking technologies (including coke 

9 ovens, blast furnaces, and other iron-mak10 ing technologies); and 

11 ‘‘(ii) entities using electric arc furnace 

12 technologies. 

13 ‘‘(C) METAL PRODUCTION CLASSIFIED

14 UNDER MORE THAN ONE NAICS CODE.—In de15 termining eligibility under this subsection, the 

16 Administrator shall— 

17 ‘‘(i) aggregate data for the 

18 beneficiation or other processing of iron 

19 and copper ores with subsequent steps in 

20 the process of metal manufacturing regard21 less of the NAICS code under which such 

22 activity is classified; and 

23 ‘‘(ii) aggregate data for the manufac24 turing of steel with the manufacturing of 


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1 steel pipe and tube made from purchased 

2 steel in a nonintegrated process. 

3 ‘‘(D) EXCLUSION.—The petroleum refining 

4 sector shall not be an eligible industrial sector. 

5 ‘‘(E) DATA SOURCES.— 

6 ‘‘(i) ELECTRICITY AND FUEL COSTS, 

7 VALUE OF SHIPMENTS.—The Adminis8 trator shall determine electricity and fuel 

9 costs and the value of shipments under 

10 this subsection from data from the United 

11 States Census of Mineral Industries and 

12 the United States Census Annual Survey 

13 of Manufacturers. The Administrator shall 

14 take the average of data from as many of 

15 the years of 2004, 2005, and 2006 for 

16 which such data are available. If such data 

17 are unavailable, the Administrator shall 

18 make a determination based upon 2002 or 

19 2006 data from the most detailed indus20 trial classification level of Energy Informa21 tion Agency’s Manufacturing Energy Con22 sumption Survey (using 2006 data if it is 

23 available) and the 2002 or 2007 Economic 

24 Census of the United States (using 2007 

25 data if it is available). If data from the 


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1 Manufacturing Energy Consumption Sur2 vey are unavailable for any sector at the 

3 six-digit classification level in the NAICS, 

4 then the Administrator may extrapolate 

5 the information necessary to determine the 

6 eligibility of a sector under this paragraph 

7 from available Manufacturing Energy Con8 sumption Survey data pertaining to a 

9 broader industrial category classified in the 

10 NAICS. Fuel cost data shall not include 

11 the cost of fuel used as feedstock by an in12 dustrial sector. 

13 ‘‘(ii) IMPORTS AND EXPORTS.—The 

14 Administrator shall base the value of im15 ports and exports under this subsection on 

16 United States International Trade Com17 mission data. The Administrator shall take 

18 the average of data from as many of the 

19 years of 2004, 2005, and 2006 for which 

20 such data are available. 

21 ‘‘(iii) PERCENTAGES.—The Adminis22 trator shall round the energy intensity, 

23 greenhouse gas intensity, and trade inten24 sity percentages under subparagraph (A) 

25 to the nearest whole number. 


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1 ‘‘(iv) GREENHOUSE GAS EMISSION

2 CALCULATIONS.—When calculating the 

3 tons of carbon dioxide equivalent green4 house gas emissions for each sector under 

5 subparagraph (A)(i)(II)(aa), the Adminis6 trator may, to the extent necessary with 

7 respect to a sector, use economic and engi8 neering models and the best available in9 formation on technology performance levels 

10 for such sector. 

11 ‘‘(3) ADMINISTRATIVE DETERMINATION OF AD12 DITIONAL ELIGIBLE INDUSTRIAL SECTORS.— 

13 ‘‘(A) INDIVIDUAL SHOWING PETITION.— 

14 ‘‘(i) PETITION.—The owner or oper15 ator of an entity in an industrial sector 

16 may petition the Administrator to des17 ignate as eligible industrial sectors under 

18 this subpart an entity or a group of enti19 ties that— 

20 ‘‘(I) represent a subsector of a 

21 six-digit section of the NAICS code; 

22 and 

23 ‘‘(II) meet the eligibility criteria 

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1 graph (2)(A), or the eligibility criteria 

2 in clause (iii) of paragraph (2)(A). 

3 ‘‘(ii) DATA.—In making a determina4 tion under this subparagraph, the Admin5 istrator shall consider data submitted by 

6 the petitioner that is specific to the entity, 

7 data solicited by the Administrator from 

8 other entities in the subsector, if such 

9 other entities exist, and data specified in 

10 paragraph (2)(E). 

11 ‘‘(iii) BASIS OF SUBSECTOR DETER12 MINATION.—The Administrator shall de13 termine an entity or group of entities to be 

14 a subsector of a six-digit section of the 

15 NAICS code based only upon the products 

16 manufactured and not the industrial proc17 ess by which the products are manufac18 tured, except that the Administrator may 

19 determine an entity or group of entities 

20 that manufacture a product from a virgin 

21 material to be a separate subsector from 

22 another entity or group of entities that 

23 manufacture the same product from recy24 cled material. 


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1 ‘‘(iv) FINAL ACTION.—The Adminis2 trator shall take final action on such peti3 tion no later than 6 months after the peti4 tion is received by the Administrator. 

5 ‘‘(B) UPDATED TRADE INTENSITY DATA.— 

6 The Administrator shall designate as eligible to 

7 receive emission allowance rebates under this 

8 subpart an industrial sector that— 

9 ‘‘(i) met the energy or greenhouse gas 

10 intensity criteria in paragraph (2)(A)(i) as 

11 of the date of promulgation of the rule 

12 under paragraph (1); and 

13 ‘‘(ii) meets the trade intensity criteria 

14 in paragraph (2)(A)(ii), using data from 

15 any year after 2006. 

16 ‘‘(C) USE OF MOST RECENT DATA.—In de17 termining whether to designate a sector or sub18 sector as an eligible industrial sector under this 

19 paragraph, the Administrator shall use the 

20 most recent data available from the sources de21 scribed in paragraph (2)(E), rather than the 

22 data from the years specified in paragraph 

23 (2)(E), to determine the trade intensity of such 

24 sector or subsector, but only for determining 

25 such trade intensity. 


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1 ‘‘SEC. 765. DISTRIBUTION OF EMISSION ALLOWANCE RE2 BATES. 

3 ‘‘(a) DISTRIBUTION SCHEDULE.— 

4 ‘‘(1) IN GENERAL.—For each vintage year, the 

5 Administrator shall distribute allowances pursuant 

6 to this section no later than October 31 of the pre7 ceding calendar year. The Administrator shall make 

8 such annual distributions to the owners and opera9 tors of each entity in an eligible industrial sector in 

10 the amount of emission allowances calculated under 

11 subsection (b), except that— 

12 ‘‘(A) for vintage years 2012 and 2013, the 

13 distribution for a covered entity shall be the en14 tity’s indirect carbon factor as calculated under 

15 subsection (b)(3); and 

16 ‘‘(B) for vintage year 2026 and thereafter, 

17 the distribution shall be the amount calculated 

18 under subsection (b) multiplied by, except as 

19 modified by the President pursuant to section 

20 767(c)(3)(A) for a sector— 

21 ‘‘(i) 90 percent for vintage year 2026; 

22 ‘‘(ii) 80 percent for vintage year 

23 2027; 

24 ‘‘(iii) 70 percent for vintage year 

25 2028; 


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1 ‘‘(iv) 60 percent for vintage year 

2 2029; 

3 ‘‘(v) 50 percent for vintage year 2030; 

4 ‘‘(vi) 40 percent for vintage year 

5 2031; 

6 ‘‘(vii) 30 percent for vintage year 

7 2032; 

8 ‘‘(viii) 20 percent for vintage year 

9 2033; 

10 ‘‘(ix) 10 percent for vintage year 

11 2034; and 

12 ‘‘(x) 0 percent for vintage year 2035 

13 and thereafter. 

14 ‘‘(2) RESUMPTION OF REDUCTION.—If the 

15 President has modified the percentage stated in 

16 paragraph (1)(B) under section 767(c)(3)(A), and 

17 the President subsequently makes a determination 

18 under section 767(b) for an eligible industrial sector 

19 that more than 70 percent of global output for that 

20 sector is produced or manufactured in countries that 

21 have met at least one of the criteria in that sub22 section, then the reduction schedule set forth in 

23 paragraph (1)(B) of this subsection shall begin in 

24 the next vintage year, with the percentage reduction 


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1 based on the amount of the distribution of emission 

2 allowances under this section in the previous year. 

3 ‘‘(3) NEWLY ELIGIBLE SECTORS.—In addition 

4 to receiving a distribution of emission allowances 

5 under this section in the first distribution occurring 

6 after an industrial sector is designated as eligible 

7 under section 764(b)(3), the owner or operator of an 

8 entity in that eligible industrial sector may receive a 

9 prorated share of any emission allowances made 

10 available for distribution under this section that 

11 were not distributed for the year in which the peti12 tion for eligibility was granted under section 

13 764(b)(3). 

14 ‘‘(b) CALCULATION OF DIRECT AND INDIRECT CAR15 BON FACTORS.— 

16 ‘‘(1) IN GENERAL.— 

17 ‘‘(A) COVERED ENTITIES.—Except as pro18 vided in subsection (a), for covered entities, the 

19 amount of emission allowance rebates shall be 

20 based on the sum of the covered entity’s direct 

21 and indirect carbon factors. 

22 ‘‘(B) OTHER ELIGIBLE ENTITIES.—For 

23 entities that are in eligible industrial sectors 

24 but are not covered entities, the amount of 


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1 emission allowance rebates shall be based on 

2 the entity’s indirect carbon factor. 

3 ‘‘(C) NEW ENTITIES.—Not later than 2 

4 years after the date of enactment of this title, 

5 the Administrator shall issue regulations gov6 erning the distribution of emission allowance re7 bates for the first and second years of operation 

8 of a new entity in an eligible industrial sector. 

9 These regulations shall provide for— 

10 ‘‘(i) the distribution of emission allow11 ance rebates to such entities based on com12 parable entities in the same sector; and 

13 ‘‘(ii) an adjustment in the third and 

14 fourth years of operation to reconcile the 

15 total amount of emission allowance rebates 

16 received during the first and second years 

17 of operation to the amount the entity 

18 would have received during the first and 

19 second years of operation had the appro20 priate data been available. 

21 ‘‘(2) DIRECT CARBON FACTOR.—The direct car22 bon factor for a covered entity for a vintage year is 

23 the product of— 


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1 ‘‘(A) the average output of the covered en2 tity for the two years preceding the year of the 

3 distribution; and 

4 ‘‘(B) the most recent calculation of the av5 erage direct greenhouse gas emissions (ex6 pressed in tons of carbon dioxide equivalent) 

7 per unit of output for all covered entities in the 

8 sector, as determined by the Administrator 

9 under paragraph (4). 

10 ‘‘(3) INDIRECT CARBON FACTOR.— 

11 ‘‘(A) IN GENERAL.—The indirect carbon 

12 factor for an entity for a calendar year is the 

13 product obtained by multiplying the average 

14 output of the entity for the two years preceding 

15 the years of the distribution by both the elec16 tricity emissions intensity factor determined 

17 pursuant to subparagraph (B) and the elec18 tricity efficiency factor determined pursuant to 

19 subparagraph (C) for the year concerned. 

20 ‘‘(B) ELECTRICITY EMISSIONS INTENSITY

21 FACTOR.—Each person selling electricity to the 

22 owner or operator of an entity in any sector 

23 designated as an eligible industrial sector under 

24 section 764(b) shall provide the owner or oper25 ator of the entity and the Administrator, on an 


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1 annual basis, the electricity emissions intensity 

2 factor for the entity. The electricity emissions 

3 intensity factor for the entity, expressed in tons 

4 of carbon dioxide equivalents per kilowatt hour, 

5 is determined by dividing— 

6 ‘‘(i) the annual sum of the hourly 

7 product of— 

8 ‘‘(I) the electricity purchased by 

9 the entity from that person in each 

10 hour (expressed in kilowatt hours), 

11 multiplied by 

12 ‘‘(II) the cost the person selling 

13 the electricity passes to the entity per 

14 ton of carbon dioxide equivalent emit15 ted by the electricity provider per kilo16 watt hour, taking into account the en17 tity’s retail rate arrangements, by 

18 ‘‘(ii) the total kilowatt hours of elec19 tricity purchased by the entity from that 

20 person during that year. 

21 ‘‘(C) ELECTRICITY EFFICIENCY FACTOR.— 

22 The electricity efficiency factor is the average 

23 amount of electricity (in kilowatt hours) used 

24 per unit of output for all entities in the relevant 

25 sector, as determined by the Administrator 


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1 based on the best available data, including data 

2 provided under paragraph (6). 

3 ‘‘(D) INDIRECT CARBON FACTOR REDUC4 TION.—If an electricity provider received a free 

5 allocation of emission allowances pursuant to 

6 section ø782¿, the Administrator shall adjust 

7 the indirect carbon factor to avoid rebates to 

8 the eligible entity for costs that the Adminis9 trator determines were not incurred by the in10 dustrial entity because the allowances were free11 ly allocated to the eligible entity’s electricity 

12 provider and used for the benefit of industrial 

13 consumers. 

14 ‘‘(4) GREENHOUSE GAS INTENSITY CALCULA15 TIONS.—The Administrator shall calculate the aver16 age direct greenhouse gas emissions (expressed in 

17 tons of carbon dioxide equivalent) per unit of output 

18 for all covered entities in each eligible industrial sec19 tor every four years using an average of the two 

20 most recent years of the best available data. 

21 ‘‘(5) ENSURING EFFICIENCY IMPROVEMENTS.— 

22 When making greenhouse gas calculations, the Ad23 ministrator shall— 

24 ‘‘(A) limit the average direct greenhouse 

25 gas emissions per unit of output, calculated 


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1 under paragraph (4), for any eligible industrial 

2 sector to an amount that is not greater than it 

3 was in any previous calculation under this sub4 section; and 

5 ‘‘(B) limit the electric emissions intensity 

6 factor, calculated under paragraph (3)(B) and 

7 resulting from a change in electricity supply, 

8 for any entity to an amount that is not greater 

9 than it was during any previous year. 

10 ‘‘(6) DATA SOURCES.—For the purposes of this 

11 subsection— 

12 ‘‘(A) the Administrator shall use data from 

13 the greenhouse gas registry, established under 

14 section 713, where it is available; and 

15 ‘‘(B) each owner or operator of an entity 

16 in an eligible industrial sector and each depart17 ment, agency, and instrumentality of the 

18 United States shall provide the Administrator 

19 with such information as the Administrator 

20 finds necessary to determine the direct carbon 

21 factor and the indirect carbon factor for each 

22 entity subject to this section. 

23 ‘‘(c) TOTAL MAXIMUM DISTRIBUTION.—Notwith24 standing subsections (a) and (b), the Administrator shall 

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1 ant to this section than are allocated for use under this 

2 part pursuant to section ø782¿ for that vintage year. For 

3 any vintage year for which the total emission allowance 

4 rebates calculated pursuant to this section exceed the 

5 number of allowances allocated pursuant to section ø782¿, 

6 the Administrator shall reduce each entity’s distribution 

7 on a pro rata basis so that the total distribution under 

8 this section equals the number of allowances allocated 

9 under section ø782¿. 

10 ‘‘Subpart 2—International Reserve Allowance 

11 Program 

12 ‘‘SEC. 766. INTERNATIONAL RESERVE ALLOWANCE PRO13 GRAM. 

14 ‘‘(a) ESTABLISHMENT.— 

15 ‘‘(1) IN GENERAL.—If the President takes an 

16 action described in section 767(c)(3)(B) with respect 

17 to a sector then, not later than 24 months after that 

18 determination, the Administrator shall issue regula19 tions— 

20 ‘‘(A) determining an appropriate price for 

21 and offering for sale to United States importers 

22 international reserve allowances; 

23 ‘‘(B) requiring the submission of appro24 priate amounts of such allowances in conjunc25 tion with the importation into the United States 


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1 of a primary product produced or manufactured 

2 by that sector; 

3 ‘‘(C) exempting from the requirements of 

4 subparagraph (B) primary products produced 

5 in— 

6 ‘‘(i) foreign countries that the United 

7 Nations has identified as among the least 

8 developed of developing countries; or 

9 ‘‘(ii) foreign countries that the Presi10 dent has determined to be responsible for 

11 less than 0.5 percent of total global green12 house gas emissions; and 

13 ‘‘(D) prohibiting the introduction into 

14 interstate commerce of a primary product with15 out submitting the required number of inter16 national reserve allowances in accordance with 

17 such regulations, unless the product was pro18 duced by a covered entity under this title, or by 

19 an entity that is or could be regulated under 

20 this title. 

21 ‘‘(2) PURPOSE OF PROGRAM.—The Adminis22 trator shall establish the program under paragraph 

23 (1) in a manner that addresses, consistent with 

24 international agreements to which the United States 

25 is a party, the competitive imbalance in the costs of 


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1 producing or manufacturing primary products in in2 dustrial sectors resulting from the difference be3 tween— 

4 ‘‘(A) the direct and indirect costs of com5 plying with this title; and 

6 ‘‘(B) the direct and indirect costs, if any, 

7 of complying in other countries with greenhouse 

8 gas regulatory programs, requirements, export 

9 tariffs, or other measures adopted or imposed 

10 to reduce greenhouse gas emissions. 

11 ‘‘(3) EMISSION ALLOWANCE REBATES.—The 

12 Administrator shall take into account the value of 

13 emission allowance rebates distributed under subpart 

14 1 when making calculations under paragraph (2). 

15 ‘‘(4) LIMITATION.—The International Reserve 

16 Allowance Program may not begin before January 1, 

17 2025. 

18 ‘‘(b) COVERED ENTITIES.—International reserve al19 lowances may not be held by covered entities to comply 

20 with section 722. 

21 ‘‘Subpart 3—Presidential Determination 

22 ‘‘SEC. 767. PRESIDENTIAL REPORTS AND DETERMINA23 TIONS. 

24 ‘‘(a) REPORT.—Not later than January 1, 2018, the 

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1 tiveness of the distribution of emission allowance rebates 

2 under subpart 1 in mitigating carbon leakage in industrial 

3 sectors. Such report shall also include— 

4 ‘‘(1) recommendations on how to better achieve 

5 the purposes of this part, including an assessment of 

6 the feasibility and usefulness of an International Re7 serve Allowance Program; and 

8 ‘‘(2) an assessment of the amount and duration 

9 of assistance, including distribution of free allow10 ances, being provided to eligible industrial sectors in 

11 other developed countries to mitigate costs of com12 pliance with domestic greenhouse gas reduction pro13 grams in such countries. 

14 ‘‘(b) PRESIDENTIAL DETERMINATION.—Not later 

15 than June 30, 2022, and every four years thereafter, the 

16 President, in consultation with the Administrator and 

17 other appropriate agencies, shall determine, for each eligi18 ble industrial sector, whether more than 70 percent of 

19 global output for that sector is produced or manufactured 

20 in countries that have met at least one of the following 

21 criteria: 

22 ‘‘(1) The country is a party to an international 

23 agreement to which the United States is a party 

24 that includes a nationally enforceable greenhouse gas 

25 emissions reduction commitment for that country 


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1 that is at least as stringent as that of the United 

2 States. 

3 ‘‘(2) The country is a party to a multilateral or 

4 bilateral emission reduction agreement for that sec5 tor to which the United States is a party. 

6 ‘‘(3) The country has an annual energy or 

7 greenhouse gas intensity, as described in section 

8 764(b)(2)(A)(i), for the sector that is equal to or 

9 less than the energy or greenhouse gas intensity for 

10 such sector in the United States in the most recent 

11 calendar year for which data are available. 

12 ‘‘(4) The country has implemented policies, in13 cluding sectoral caps, export tariffs, production fees, 

14 electricity generation regulations, or greenhouse gas 

15 emissions fees, that individually or collectively im16 pose an incremental increase on the cost of produc17 tion associated with greenhouse gas emissions from 

18 the sector that is at least 60 percent of the cost of 

19 complying with this title in the United States for 

20 such sector, averaged over a two-year period. 

21 ‘‘(c) EFFECT OF PRESIDENTIAL DETERMINATION.— 

22 If the President makes a determination under subsection 

23 (b) with respect to an eligible industrial sector that 70 

24 percent or less of the global output for the sector is pro25 duced or manufactured in countries that have met one or 


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1 more of the criteria in subsection (b), then the President 

2 shall, not later than June 30, 2022, and every four years 

3 thereafter— 

4 ‘‘(1) assess the extent to which the emission al5 lowance rebates provided pursuant to subpart 1 have 

6 mitigated or addressed, or could mitigate or address, 

7 carbon leakage in that sector; 

8 ‘‘(2) assess the extent to which an International 

9 Reserve Allowance Program has mitigated or ad10 dressed, or could mitigate or address, carbon leakage 

11 in that sector and the feasibility of establishing such 

12 a program; and 

13 ‘‘(3) with respect to that sector— 

14 ‘‘(A) modify the percentage by which direct 

15 and indirect carbon factors will be multiplied 

16 under section 765(a)(1)(B); 

17 ‘‘(B) implement an International Reserve 

18 Allowance Program under section 766 for the 

19 products of the sector; or 

20 ‘‘(C) take the actions in both subparagraph 

21 (A) and (B). 

22 ‘‘(d) REPORT TO CONGRESS.—Not later than June 

23 30, 2022, and every four years thereafter, the President 

24 shall transmit to the Congress a report providing notice 

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1 ing the reasons for such determination, and identifying the 

2 actions taken by the President under subsection (c). 

3 ‘‘(e) LIMITATION.—The President may only imple4 ment an International Reserve Allowance Program for sec5 tors producing primary products.’’. 

6 SEC. 402. ALLOCATIONS TO PETROLEUM REFINERIES. 

7 Title VII of the Clean Air Act is amended by insert8 ing after part F the following new part: 

9 ‘‘PART G—PETROLEUM REFINERIES 

10 ‘‘SEC. 771. ALLOCATIONS TO PETROLEUM REFINERIES. 

11 ‘‘(a) OUTPUT.—In this section, the term ‘output’ 

12 means the total tonnage or other standard unit of produc13 tion (as determined by the Administrator) produced by a 

14 petroleum refinery. 

15 ‘‘(b) IN GENERAL.—For each vintage year between 

16 2014 and 2026, the Administrator shall distribute allow17 ances pursuant to this section to owners and operators of 

18 petroleum refineries in the United States. 

19 ‘‘(c) DISTRIBUTION SCHEDULE.—The Administrator 

20 shall distribute emission allowances of each vintage year 

21 no later than October 31 of the preceding calendar year. 

22 ‘‘(d) CALCULATION OF EMISSION ALLOWANCE RE23 BATES.— 

24 ‘‘(1) IN GENERAL.—The amount of emission al25 lowance rebates distributed to each refinery shall be 


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1 based on the sum of the refinery’s direct and indi2 rect carbon factors. 

3 ‘‘(2) NEW REFINERIES.—Not later than 2 years 

4 after the date of enactment of this section, the Ad5 ministrator shall issue regulations governing the dis6 tribution of emission allowance rebates for the first 

7 and second years of operation of a new petroleum 

8 refinery. These regulations shall provide for— 

9 ‘‘(A) the distribution of emission allowance 

10 rebates to such petroleum refineries based on 

11 comparable petroleum refineries; and 

12 ‘‘(B) an adjustment in the third and 

13 fourth years of operation to reconcile the total 

14 amount of emission allowance rebates received 

15 during the first and second years of operation 

16 to the amount the petroleum refinery would 

17 have received during the first and second years 

18 of operation had the appropriate data been 

19 available. 

20 ‘‘(3) DIRECT CARBON FACTOR.—The direct car21 bon factor for a petroleum refinery for a vintage 

22 year is the product of— 

23 ‘‘(A) the average output of the petroleum 

24 refinery for the two years preceding the year of 

25 the distribution; and 


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1 ‘‘(B) the most recent calculation of the av2 erage direct greenhouse gas emissions (ex3 pressed in tons of carbon dioxide equivalent) 

4 per unit of output for all petroleum refineries, 

5 as determined by the Administrator under para6 graph (5). 

7 ‘‘(4) INDIRECT CARBON FACTOR.— 

8 ‘‘(A) IN GENERAL.—The indirect carbon 

9 factor for a petroleum refinery for a vintage 

10 year is the product obtained by multiplying the 

11 average output of the petroleum refinery for the 

12 two years preceding the years of the distribu13 tion by both the electricity emissions intensity 

14 factor determined pursuant to subparagraph 

15 (B) and the electricity efficiency factor deter16 mined pursuant to subparagraph (C) for the 

17 year concerned. 

18 ‘‘(B) ELECTRICITY EMISSIONS INTENSITY

19 FACTOR.—Each person selling electricity to the 

20 owner or operator of a petroleum refinery shall 

21 provide the owner or operator of the petroleum 

22 refinery and the Administrator, on an annual 

23 basis, the electricity emissions intensity factor 

24 for the petroleum refinery. The electricity emis25 sions intensity factor for the petroleum refinery, 


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1 expressed in tons of carbon dioxide equivalents 

2 per kilowatt hour, is determined by dividing— 

3 ‘‘(i) the annual sum of the hourly 

4 product of— 

5 ‘‘(I) the electricity purchased by 

6 the petroleum refinery from that per7 son in each hour (expressed in kilo8 watt hours), multiplied by 

9 ‘‘(II) the cost the person selling 

10 the electricity passes to the petroleum 

11 refinery per ton of carbon dioxide 

12 equivalent emitted by the electricity 

13 provider per kilowatt hour, taking into 

14 account the petroleum refinery’s retail 

15 rate arrangements, by 

16 ‘‘(ii) the total kilowatt hours of elec17 tricity purchased by the petroleum refinery 

18 from that person during that year. 

19 ‘‘(C) ELECTRICITY EFFICIENCY FACTOR.— 

20 The electricity efficiency factor is the average 

21 amount of electricity (in kilowatt hours) used 

22 per unit of output for all petroleum refineries, 

23 as determined by the Administrator based on 

24 the best available data, including data provided 

25 under paragraph (7). 


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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, the Administrator shall adjust the 

5 indirect carbon factor to avoid rebates to the 

6 petroleum refinery for costs that the Adminis7 trator determines were not incurred by the pe8 troleum refinery because the allowances were 

9 freely allocated to the petroleum refinery’s elec10 tricity provider and used for the benefit of pe11 troleum refineries. 

12 ‘‘(5) GREENHOUSE GAS INTENSITY CALCULA13 TIONS.—The Administrator shall calculate the aver14 age direct greenhouse gas emissions (expressed in 

15 tons of carbon dioxide equivalent) per unit of output 

16 for all petroleum refineries not less than once every 

17 five years using an average of the two most recent 

18 years of the best available data. 

19 ‘‘(6) ENSURING EFFICIENCY IMPROVEMENTS.— 

20 When making greenhouse gas calculations, the Ad21 ministrator shall— 

22 ‘‘(A) limit the average direct greenhouse 

23 gas emissions per unit of output, calculated 

24 under paragraph (5), to an amount that is not 


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1 greater than it was in any previous calculation 

2 under this subsection; and 

3 ‘‘(B) limit the electricity emissions inten4 sity factor, calculated under paragraph (4)(B) 

5 and resulting from a change in electricity sup6 ply, for any petroleum refinery to an amount 

7 that is not greater than it was during any pre8 vious year. 

9 ‘‘(7) DATA SOURCES.—For the purposes of this 

10 subsection— 

11 ‘‘(A) the Administrator shall use data from 

12 the greenhouse gas registry, established under 

13 section 713, where it is available; and 

14 ‘‘(B) each owner or operator of a petro15 leum refinery and each department, agency, and 

16 instrumentality of the United States shall pro17 vide the Administrator with such information as 

18 the Administrator finds necessary to determine 

19 the direct carbon factor and the indirect carbon 

20 factor for each petroleum refinery subject to 

21 this section. 

22 ‘‘(e) TOTAL MAXIMUM DISTRIBUTION.—The Admin23 istrator shall not distribute more allowances for any vin24 tage year pursuant to this section than are allocated for 

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1 tage year. For any vintage year for which the total emis2 sion allowance rebates calculated pursuant to this section 

3 exceed the number of allowances allocated pursuant to sec4 tion 782, the Administrator shall reduce each petroleum 

5 refinery’s distribution on a pro rata basis so that the total 

6 distribution under this section equals the number of allow7 ances allocated under section 782.’’. 

8 Subtitle B—Green Jobs and 

9 Worker Transition 

10 PART 1—GREEN JOBS 

11 SEC. 421. CLEAN ENERGY CURRICULUM DEVELOPMENT 

12 GRANTS. 

13 (a) AUTHORIZATION.—The Secretary of Education is 

14 authorized to award grants, on a competitive basis, to eli15 gible partnerships to develop programs of study (con16 taining the information described in section 122(c)(1)(A) 

17 of the Carl D. Perkins Career and Technical Education 

18 Act of 2006 (20 U.S.C. 2342), that are focused on emerg19 ing careers and jobs in renewable energy, energy effi20 ciency, and climate change mitigation. The Secretary of 

21 Education shall consult with the Secretary of Labor and 

22 the Secretary of Energy prior to the issuance of a solicita23 tion 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. Per3 kins Career and Technical Education Act of 2006 

4 (20 U.S.C. 2351) or an area career and technical 

5 education school or education service agency de6 scribed in such section; 

7 (2) at least 1 postsecondary institution eligible 

8 for funding under section 132 of such Act (20 

9 U.S.C. 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 Sec16 retary 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 mar24 ket 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 

21 as described in section 3(20) of the Carl D. Perkins 

22 Career and Technical Education Act of 2006 (20 

23 U.S.C. 2302(20)); and 

24 (10) a description of how the applicant proposes 

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1 tion, labor management partnership, apprenticeship 

2 program, or joint apprenticeship and training pro3 gram that provides education and training in the 

4 field of study for which the applicant proposes to de5 velop a 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 partner11 ship; and 

12 (2) focus on low performing students and spe13 cial populations as defined in section 3(29) of the 

14 Carl D. Perkins Career and Technical Education 

15 Act of 2006 (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 

19 selection of grantees. Members of the peer review com20 mittee shall include— 

21 (1) educators who have experience imple22 menting 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 

2 section shall be used for the development, implementation, 

3 and dissemination of programs of study (as described in 

4 section 122(c)(1)(A) of the Carl D. Perkins Career and 

5 Technical Education Act (20 U.S.C. 342(c)(1)(A))) in ca6 reer areas related to clean energy, renewable energy, en7 ergy efficiency, 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 

11 of 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 

16 DETERMINATIONS. 

17 (a) PETITIONS.— 

18 (1) FILING.—A petition for certification of eli19 gibility to apply for adjustment assistance for a 

20 group of workers under this part may be filed by 

21 any of the 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 

2 operators or one-stop partners (as defined in 

3 section 101 of the Workforce Investment Act of 

4 1998 (29 U.S.C. 2801)), including State em5 ployment security agencies, or the State dis6 located worker unit established under title I of 

7 such Act, on behalf of such workers. 

8 The petition shall be filed simultaneously with the 

9 Secretary of Labor and with the Governor of the 

10 State in which such workers’ employment site is lo11 cated. 

12 (2) ACTION BY GOVERNORS.—Upon receipt of a 

13 petition filed under paragraph (1), the Governor 

14 shall— 

15 (A) ensure that rapid response activities 

16 and appropriate core and intensive services (as 

17 described in section 134 of the Workforce In18 vestment Act of 1998 (29 U.S.C. 2864)) au19 thorized under other Federal laws are made 

20 available to the workers covered by the petition 

21 to the extent authorized under such laws; and 

22 (B) assist the Secretary in the review of 

23 the petition by verifying such information and 

24 providing such other assistance as the Secretary 

25 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 

9 10 days after the date of the Secretary’s publication 

10 under paragraph (3) a request for a hearing, the 

11 Secretary shall provide for a public hearing and af12 ford such interested persons an opportunity to be 

13 present, 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 

18 petition 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; 

2 or 

3 (v) other industries whose employment 

4 the Secretary determines has been ad5 versely affected by any requirement of title 

6 VII of the Clean Air Act; 

7 (B) the Secretary determines that a sig8 nificant number or proportion of the workers in 

9 such workers’ employment site have become to10 tally or partially separated, or are threatened to 

11 become totally or partially separated from em12 ployment; and 

13 (C) the sales, production, or delivery of 

14 goods or services have decreased as a result of 

15 any requirement of title VII of the Clean Air 

16 Act, including— 

17 (i) the shift from reliance upon fossil 

18 fuels to other sources of energy, including 

19 renewable energy, that results in the clos20 ing of a facility or layoff of employees at 

21 a facility that mines, produces, processes, 

22 or utilizes fossil fuels to generate elec23 tricity; 

24 (ii) a substantial increase in the cost 

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1 cility to produce items whose prices are 

2 competitive in the marketplace, to the ex3 tent the cost is not offset by allowance al4 location to the facility pursuant to title VII 

5 of the Clean Air Act; or 

6 (iii) other documented occurrences 

7 that the Secretary determines are indica8 tors of an adverse impact on an industry 

9 described in subparagraph (A) as a result 

10 of any requirement of title VII of the 

11 Clean Air Act. 

12 (2) WORKERS IN PUBLIC AGENCIES.—A group 

13 of workers in a public agency shall be certified by 

14 the Secretary as eligible to apply for climate change 

15 adjustment assistance pursuant to a petition filed if 

16 the Secretary determines that a significant number 

17 or proportion of the workers in the public agency 

18 have become totally or partially separated from em19 ployment, or are threatened to become totally or 

20 partially separated as a result of any requirement of 

21 title VII of the Clean Air Act. 

22 (3) ADVERSELY AFFECTED SERVICE WORK23 ERS.—A group of workers shall be certified as eligi24 ble to apply for climate change adjustment assistVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00754 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 ance pursuant to a petition filed if the Secretary de2 termines that— 

3 (A) a significant number or proportion of 

4 the service workers at an employment site 

5 where a group of workers has been certified by 

6 the Secretary as eligible to apply for adjustment 

7 assistance under this part pursuant to para8 graph (1) have become totally or partially sepa9 rated from employment, or are threatened to 

10 become totally or partially separated; and 

11 (B) a loss of business in the firm providing 

12 service workers to an employment site is di13 rectly attributable to one or more of the docu14 mented occurrences listed in paragraph (1)(C). 

15 (c) AUTHORITY TO INVESTIGATE AND COLLECT IN16 FORMATION.— 

17 (1) IN GENERAL.—The Secretary shall, in de18 termining whether to certify a group of workers 

19 under subsection (d), obtain information the Sec20 retary determines to be necessary to make the cer21 tification, through questionnaires and in such other 

22 manner as the Secretary determines appropriate 

23 from— 

24 (A) the workers’ employer; 


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1 (B) officials of certified or recognized 

2 unions or other duly authorized representatives 

3 of the group of workers; or 

4 (C) one-stop operators or one-stop partners 

5 (as defined in section 101 of the Workforce In6 vestment Act of 1998 (29 U.S.C. 2801)); or 

7 (2) VERIFICATION OF INFORMATION.—The Sec8 retary shall require an employer, union, or one-stop 

9 operator or partner to certify all information ob10 tained under paragraph (1) from the employer, 

11 union, or one-stop operator or partner (as the case 

12 may be) on which the Secretary relies in making a 

13 determination under subsection (d), unless the Sec14 retary has a reasonable basis for determining that 

15 such information is accurate and complete without 

16 being certified. 

17 (3) PROTECTION OF CONFIDENTIAL INFORMA18 TION.—The Secretary may not release information 

19 obtained under paragraph (1) that the Secretary 

20 considers to be confidential business information un21 less the employer submitting the confidential busi22 ness information had notice, at the time of submis23 sion, that the information would be released by the 

24 Secretary, or the employer subsequently consents to 

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1 graph shall be construed to prohibit the Secretary 

2 from providing such confidential business informa3 tion to a court in camera or to another party under 

4 a protective order issued by a court. 

5 (d) DETERMINATION BY THE SECRETARY OF

6 LABOR.— 

7 (1) IN GENERAL.—As soon as possible after the 

8 date on which a petition is filed under subsection 

9 (a), but in any event not later than 40 days after 

10 that date, the Secretary, in consultation with the 

11 Secretary of Energy and the Administrator of the 

12 Environmental Protection Agency, as necessary, 

13 shall determine whether the petitioning group meets 

14 the requirements of subsection (b) and shall issue a 

15 certification of eligibility to apply for assistance 

16 under this part covering workers in any group which 

17 meets such requirements. Each certification shall 

18 specify the date on which the total or partial separa19 tion began or threatened to begin. Upon reaching a 

20 determination on a petition, the Secretary shall 

21 promptly publish a summary of the determination in 

22 the Federal Register and on the website of the De23 partment of Labor, together with the Secretary’s 

24 reasons for making such determination. 


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1 (2) ONE YEAR LIMITATION.—A certification 

2 under this section shall not apply to any worker 

3 whose last total or partial separation from the em4 ployment site before the worker’s application under 

5 section 426(a) occurred more than 1 year before the 

6 date of the petition on which such certification was 

7 granted. 

8 (3) REVOCATION OF CERTIFICATION.—When9 ever the Secretary determines, with respect to any 

10 certification of eligibility of the workers of an em11 ployment site, that total or partial separations from 

12 such site are no longer a result of the factors speci13 fied in subsection (b)(1), the Secretary shall termi14 nate such certification and promptly have notice of 

15 such termination published in the Federal Register 

16 and on the website of the Department of Labor, to17 gether with the Secretary’s reasons for making such 

18 determination. Such termination shall apply only 

19 with respect to total or partial separations occurring 

20 after the termination date specified by the Secretary. 

21 (e) INDUSTRY NOTIFICATION OF ASSISTANCE.— 

22 Upon receiving a notification of a determination under 

23 subsection (d) with respect to a domestic industry the Sec24 retary of Labor shall notify the representatives of the do25 mestic industry affected by the determination, employers 


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1 publicly identified by name during the course of the pro2 ceeding relating to the determination, and any certified 

3 or recognized union or, to the extent practicable, other 

4 duly authorized representative of workers employed by 

5 such representatives of the domestic industry, of— 

6 (1) the adjustment allowances, training, and 

7 other benefits available under this part; 

8 (2) the manner in which to file a petition and 

9 apply for such benefits; and 

10 (3) the availability of assistance in filing such 

11 petitions; 

12 (4) notify the Governor of each State in which 

13 one or more employers in such industry are located 

14 of the Secretary’s determination and the identity of 

15 the employers; and 

16 (5) upon request, provide any assistance that is 

17 necessary to file a petition under subsection (a). 

18 (f) BENEFIT INFORMATION TO WORKERS, PRO19 VIDERS OF TRAINING.— 

20 (1) IN GENERAL.—The Secretary shall provide 

21 full information to workers about the adjustment al22 lowances, training, and other benefits available 

23 under this part and about the petition and applica24 tion procedures, and the appropriate filing dates, for 

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1 retary shall provide whatever assistance is necessary 

2 to enable groups of workers to prepare petitions or 

3 applications for program benefits. The Secretary 

4 shall make every effort to insure that cooperating 

5 State agencies fully comply with the agreements en6 tered into under section 426(a) and shall periodically 

7 review such compliance. The Secretary shall inform 

8 the State Board for Vocational Education or equiva9 lent agency, the one-stop operators or one-stop part10 ners (as defined in section 101 of the Workforce In11 vestment Act of 1998 (29 U.S.C. 2801), and other 

12 public or private agencies, institutions, and employ13 ers, as appropriate, of each certification issued 

14 under subsection (d) and of projections, if available, 

15 of the needs for training under as a result of such 

16 certification. 

17 (2) NOTICE BY MAIL.—The Secretary shall pro18 vide written notice through the mail of the benefits 

19 available under this part to each worker whom the 

20 Secretary has reason to believe is covered by a cer21 tification made under subsection (d)— 

22 (A) at the time such certification is made, 

23 if the worker was partially or totally separated 

24 from the adversely affected employment before 

25 such certification, or— 


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1 (B) at the time of the total or partial sepa2 ration of the worker from the adversely affected 

3 employment, if subparagraph (A) does not 

4 apply. 

5 (3) NEWSPAPERS; WEBSITE.—The Secretary 

6 shall publish notice of the benefits available under 

7 this part to workers covered by each certification 

8 made under subsection (d) in newspapers of general 

9 circulation in the areas in which such workers reside 

10 and shall make such information available on the 

11 website of the Department of Labor. 

12 SEC. 426. PROGRAM BENEFITS. 

13 (a) CLIMATE CHANGE ADJUSTMENT ALLOWANCE.— 

14 (1) ELIGIBILITY.—Payment of a climate change 

15 adjustment allowance shall be made to an adversely 

16 affected worker covered by a certification under sec17 tion 425(b) who files an application for such allow18 ance for any week of unemployment which begins on 

19 or after the date of such certification, if the fol20 lowing conditions are met: 

21 (A) Such worker’s total or partial separa22 tion before the worker’s application under this 

23 part occurred— 

24 (i) on or after the date, as specified in 

25 the certification under which the worker is 


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1 covered, on which total or partial separa2 tion began or threatened to begin in the 

3 adversely affected employment; 

4 (ii) before the expiration of the 2-year 

5 period beginning on the date on which the 

6 determination under section 425(d) was 

7 made; and 

8 (iii) before the termination date, if 

9 any, determined pursuant to section 

10 425(d)(3). 

11 (B) Such worker had, in the 52-week pe12 riod ending with the week in which such total 

13 or partial separation occurred, at least 26 

14 weeks of full-time employment or 1,040 hours 

15 of part time employment in adversely affected 

16 employment, or, if data with respect to weeks of 

17 employment are not available, equivalent 

18 amounts of employment computed under regu19 lations prescribed by the Secretary. For the 

20 purposes of this paragraph, any week in which 

21 such worker— 

22 (i) is on employer-authorized leave for 

23 purposes of vacation, sickness, injury, ma24 ternity, or inactive duty or active duty 

25 military service for training; 


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1 (ii) does not work because of a dis2 ability that is compensable under a work3 men’s compensation law or plan of a State 

4 or the United States; 

5 (iii) had his employment interrupted 

6 in order to serve as a full-time representa7 tive of a labor organization in such firm; or 

8 (iv) is on call-up for purposes of active 

9 duty in a reserve status in the Armed 

10 Forces of the United States, provided such 

11 active duty is ‘‘Federal service’’ as defined 

12 in section 8521(a)(1) of title 5, United 

13 States Code, 

14 shall be treated as a week of employment. 

15 (C) Such worker is enrolled in a training 

16 program approved by the Secretary under sub17 section (b)(2). 

18 (2) INELIGIBILITY FOR CERTAIN OTHER BENE19 FITS.—An adversely affected worker receiving a pay20 ment under this section shall be ineligible to receive 

21 any other form of unemployment insurance for the 

22 period in which such worker is receiving a climate 

23 change adjustment allowance under this section. 

24 (3) REVOCATION.—If— 

25 (A) the Secretary determines that— 


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1 (i) the adversely affected worker— 

2 (I) has failed to begin participa3 tion in the training program the en4 rollment in which meets the require5 ment of paragraph (1)(C); or 

6 (II) has ceased to participate in 

7 such training program before com8 pleting such training program; and 

9 (ii) there is no justifiable cause for 

10 such failure or cessation; or 

11 (B) the certification made with respect to 

12 such worker under section 425(d) is revoked 

13 under paragraph (3) of such section, 

14 no adjustment allowance may be paid to the ad15 versely affected worker under this part for the week 

16 in which such failure, cessation, or revocation oc17 curred, or any succeeding week, until the adversely 

18 affected worker begins or resumes participation in a 

19 training program approved by the Secretary under 

20 section (b)(2). 

21 (4) WAIVERS OF TRAINING REQUIREMENTS.— 

22 The Secretary may issue a written statement to an 

23 adversely affected worker waiving the requirement to 

24 be enrolled in training described in subsection (b)(2) 

25 if the Secretary determines that it is not feasible or 


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1 appropriate for the worker, because of 1 or more of 

2 the following reasons: 

3 (A) RECALL.—The worker has been noti4 fied that the worker will be recalled by the em5 ployer from which the separation occurred. 

6 (B) MARKETABLE SKILLS.— 

7 (i) IN GENERAL.—The worker pos8 sesses marketable skills for suitable em9 ployment (as determined pursuant to an 

10 assessment of the worker, which may in11 clude the profiling system under section 

12 303(j) of the Social Security Act (42 

13 U.S.C. 503(j)), carried out in accordance 

14 with guidelines issued by the Secretary) 

15 and there is a reasonable expectation of 

16 employment at equivalent wages in the 

17 foreseeable future. 

18 (ii) MARKETABLE SKILLS DEFINED.— 

19 For purposes of clause (i), the term ‘‘mar20 ketable skills’’ may include the possession 

21 of a postgraduate degree from an institu22 tion of higher education (as defined in sec23 tion 102 of the Higher Education Act of 

24 1965 (20 U.S.C. 1002)) or an equivalent 

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1 lent postgraduate certification in a special2 ized field. 

3 (C) RETIREMENT.—The worker is within 2 

4 years of meeting all requirements for entitle5 ment to either— 

6 (i) old-age insurance benefits under 

7 title II of the Social Security Act (42 

8 U.S.C. 401 et seq.) (except for application 

9 therefor); or 

10 (ii) a private pension sponsored by an 

11 employer or labor organization. 

12 (D) HEALTH.—The worker is unable to 

13 participate in training due to the health of the 

14 worker, except that a waiver under this sub15 paragraph shall not be construed to exempt a 

16 worker from requirements relating to the avail17 ability for work, active search for work, or re18 fusal to accept work under Federal or State un19 employment compensation laws. 

20 (E) ENROLLMENT UNAVAILABLE.—The 

21 first available enrollment date for the training 

22 of the worker is within 60 days after the date 

23 of the determination made under this para24 graph, or, if later, there are extenuating cir25 cumstances for the delay in enrollment, as deVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00766 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 termined pursuant to guidelines issued by the 

2 Secretary. 

3 (F) TRAINING NOT AVAILABLE.—Training 

4 described in subsection (b)(2) is not reasonably 

5 available to the worker from either govern6 mental agencies or private sources (which may 

7 include area career and technical education 

8 schools, as defined in section 3 of the Carl D. 

9 Perkins Career and Technical Education Act of 

10 2006 (20 U.S.C. 2302), and employers), no 

11 training that is suitable for the worker is avail12 able at a reasonable cost, or no training funds 

13 are available. 

14 (5) WEEKLY AMOUNTS.—The climate change 

15 adjustment allowance payable to an adversely af16 fected worker for a week of unemployment shall be 

17 an amount equal to 70 percent of the average weekly 

18 wage of such worker, but in no case shall such 

19 amount exceed the average weekly wage for all work20 ers in the State where the adversely affected worker 

21 resides. 

22 (6) MAXIMUM DURATION OF BENEFITS.—An el23 igible worker may receive a climate change adjust24 ment allowance under this subsection for a period of 

25 not longer than 156 weeks. 


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1 (b) EMPLOYMENT SERVICES AND TRAINING.— 

2 (1) INFORMATION AND EMPLOYMENT SERV3 ICES.—The Secretary shall make available, directly 

4 or through agreements with the States under section 

5 427(a) to adversely affected workers covered by a 

6 certification under section 425(a) the following in7 formation and employment services: 

8 (A) Comprehensive and specialized assess9 ment of skill levels and service needs, including 

10 through— 

11 (i) diagnostic testing and use of other 

12 assessment tools; and 

13 (ii) in-depth interviewing and evalua14 tion to identify employment barriers and 

15 appropriate employment goals. 

16 (B) Development of an individual employ17 ment plan to identify employment goals and ob18 jectives, and appropriate training to achieve 

19 those goals and objectives. 

20 (C) Information on training available in 

21 local and regional areas, information on indi22 vidual counseling to determine which training is 

23 suitable training, and information on how to 

24 apply for such training. 


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1 (D) Information on training programs and 

2 other services provided by a State pursuant to 

3 title I of the Workforce Investment Act of 1998 

4 and available in local and regional areas, infor5 mation on individual counseling to determine 

6 which training is suitable training, and informa7 tion on how to apply for such training. 

8 (E) Information on how to apply for finan9 cial aid, including referring workers to edu10 cational opportunity centers described in section 

11 402F of the Higher Education Act of 1965 (20 

12 U.S.C. 1070a–16), where applicable, and noti13 fying workers that the workers may request fi14 nancial aid administrators at institutions of 

15 higher education (as defined in section 102 of 

16 such Act (20 U.S.C. 1002)) to use the adminis17 trators’ discretion under section 479A of such 

18 Act (20 U.S.C. 1087tt) to use current year in19 come data, rather than preceding year income 

20 data, for determining the amount of need of the 

21 workers for Federal financial assistance under 

22 title IV of such Act (20 U.S.C. 1070 et seq.). 

23 (F) Short-term prevocational services, in24 cluding development of learning skills, commu25 nications skills, interviewing skills, punctuality, 


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1 personal maintenance skills, and professional 

2 conduct to prepare individuals for employment 

3 or training. 

4 (G) Individual career counseling, including 

5 job search and placement counseling, during the 

6 period in which the individual is receiving a cli7 mate change adjustment allowance or training 

8 under this part, and after receiving such train9 ing for purposes of job placement. 

10 (H) Provision of employment statistics in11 formation, including the provision of accurate 

12 information relating to local, regional, and na13 tional labor market areas, including— 

14 (i) job vacancy listings in such labor 

15 market areas; 

16 (ii) information on jobs skills nec17 essary to obtain jobs identified in job va18 cancy listings described in subparagraph 

19 (A); 

20 (iii) information relating to local occu21 pations that are in demand and earnings 

22 potential of such occupations; and 

23 (iv) skills requirements for local occu24 pations described in subparagraph (C). 


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1 (I) Information relating to the availability 

2 of supportive services, including services relat3 ing to child care, transportation, dependent 

4 care, housing assistance, and need-related pay5 ments that are necessary to enable an indi6 vidual to participate in training. 

7 (2) TRAINING.— 

8 (A) APPROVAL OF AND PAYMENT FOR

9 TRAINING.—If the Secretary determines, with 

10 respect to an adversely affected worker that— 

11 (i) there is no suitable employment 

12 (which may include technical and profes13 sional employment) available for an ad14 versely affected worker; 

15 (ii) the worker would benefit from ap16 propriate training; 

17 (iii) there is a reasonable expectation 

18 of employment following completion of 

19 such training; 

20 (iv) training approved by the Sec21 retary is reasonably available to the worker 

22 from either governmental agencies or pri23 vate sources (including area career and 

24 technical education schools, as defined in 

25 section 3 of the Carl D. Perkins Career 


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1 and Technical Education Act of 2006, and 

2 employers); 

3 (v) the worker is qualified to under4 take and complete such training; and 

5 (vi) such training is suitable for the 

6 worker and available at a reasonable cost, 

7 the Secretary shall approve such training for 

8 the worker. Upon such approval, the worker 

9 shall be entitled to have payment of the costs 

10 of such training (subject to the limitations im11 posed by this section) paid on the worker’s be12 half by the Secretary directly or through a 

13 voucher system. 

14 (B) DISTRIBUTION.—The Secretary shall 

15 establish procedures for the distribution of the 

16 funds to States to carry out the training pro17 grams approved under this paragraph, and shall 

18 make an initial distribution of the funds made 

19 available as soon as practicable after the begin20 ning of each fiscal year. 

21 (C) ADDITIONAL RULES REGARDING AP22 PROVAL OF AND PAYMENT FOR TRAINING.— 

23 (i) For purposes of applying subpara24 graph (A)(iii), a reasonable expectation of 

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1 ment opportunities for a worker be avail2 able, or offered, immediately upon the 

3 completion of training approved under 

4 such subparagraph. 

5 (ii) If the costs of training an ad6 versely affected worker are paid by the 

7 Secretary under subparagraph (A), no 

8 other payment for such costs may be made 

9 under any other provision of Federal law. 

10 No payment may be made under subpara11 graph (A) of the costs of training an ad12 versely affected worker or an adversely af13 fected incumbent worker if such costs— 

14 (I) have already been paid under 

15 any other provision of Federal law; or 

16 (II) are reimbursable under any 

17 other provision of Federal law and a 

18 portion of such costs have already 

19 been paid under such other provision 

20 of Federal law. 

21 The provisions of this clause shall not 

22 apply to, or take into account, any funds 

23 provided under any other provision of Fed24 eral law which are used for any purpose 

25 other than the direct payment of the costs 


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1 incurred in training a particular adversely 

2 affected worker, even if such use has the 

3 effect of indirectly paying or reducing any 

4 portion of the costs involved in training the 

5 adversely affected worker. 

6 (D) TRAINING PROGRAMS.—The training 

7 programs that may be approved under subpara8 graph (A) include— 

9 (i) employer-based training, includ10 ing— 

11 (I) on-the-job training if ap12 proved by the Secretary under sub13 section (c); and 

14 (II) joint labor-management ap15 prenticeship programs; 

16 (ii) any training program provided by 

17 a State pursuant to title I of the Work18 force Investment Act of 1998; 

19 (iii) any training program approved 

20 by a private industry council established 

21 under section 102 of such Act; 

22 (iv) any programs in career and tech23 nical education described in section 3(5) of 

24 the Carl D. Perkins Career and Technical 

25 Education Act of 2006; 


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1 (v) any program of remedial edu2 cation; 

3 (vi) any program of prerequisite edu4 cation or coursework required to enroll in 

5 training that may be approved under this 

6 paragraph; 

7 (vii) any training program for which 

8 all, or any portion, of the costs of training 

9 the worker are paid— 

10 (I) under any Federal or State 

11 program other than this part; or 

12 (II) from any source other than 

13 this part; 

14 (ix) any training program or 

15 coursework at an accredited institution of 

16 higher education (described in section 102 

17 of the Higher Education Act of 1965 (20 

18 U.S.C. 1002)), including a training pro19 gram or coursework for the purpose of— 

20 (I) obtaining a degree or certifi21 cation; or 

22 (II) completing a degree or cer23 tification that the worker had pre24 viously begun at an accredited institu25 tion of higher education; and 


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1 (viii) any other training program ap2 proved by the Secretary. 

3 (3) SUPPLEMENTAL ASSISTANCE.—The Secretary 

4 may, as appropriate, authorize supplemental assistance 

5 that is necessary to defray reasonable transportation and 

6 subsistence expenses for separate maintenance in a case 

7 in which training for a worker is provided in a facility that 

8 is not within commuting distance of the regular place of 

9 residence of the worker. 

10 (c) ON-THE-JOB TRAINING REQUIREMENTS.— 

11 (1) IN GENERAL.—The Secretary may approve 

12 on-the-job training for any adversely affected worker 

13 if— 

14 (A) the Secretary determines that on-the15 job training— 

16 (i) can reasonably be expected to lead 

17 to suitable employment with the employer 

18 offering the on-the-job training; 

19 (ii) is compatible with the skills of the 

20 worker; 

21 (iii) includes a curriculum through 

22 which the worker will gain the knowledge 

23 or skills to become proficient in the job for 

24 which the worker is being trained; and 


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1 (iv) can be measured by benchmarks 

2 that indicate that the worker is gaining 

3 such knowledge or skills; and 

4 (B) the State determines that the on-the5 job training program meets the requirements of 

6 clauses (iii) and (iv) of subparagraph (A). 

7 (2) MONTHLY PAYMENTS.—The Secretary shall 

8 pay the costs of on-the-job training approved under 

9 paragraph (1) in monthly installments. 

10 (3) CONTRACTS FOR ON-THE-JOB TRAINING.— 

11 (A) IN GENERAL.—The Secretary shall en12 sure, in entering into a contract with an em13 ployer to provide on-the-job training to a work14 er under this subsection, that the skill require15 ments of the job for which the worker is being 

16 trained, the academic and occupational skill 

17 level of the worker, and the work experience of 

18 the worker are taken into consideration. 

19 (B) TERM OF CONTRACT.—Training under 

20 any such contract shall be limited to the period 

21 of time required for the worker receiving on22 the-job training to become proficient in the job 

23 for which the worker is being trained, but may 

24 not exceed 156 weeks in any case. 


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1 (4) EXCLUSION OF CERTAIN EMPLOYERS.—The 

2 Secretary shall not enter into a contract for on-the3 job training with an employer that exhibits a pattern 

4 of failing to provide workers receiving on-the-job 

5 training from the employer with— 

6 (A) continued, long-term employment as 

7 regular employees; and 

8 (B) wages, benefits, and working condi9 tions that are equivalent to the wages, benefits, 

10 and working conditions provided to regular em11 ployees who have worked a similar period of 

12 time and are doing the same type of work as 

13 workers receiving on-the-job training from the 

14 employer. 

15 (d) ADMINISTRATIVE AND EMPLOYMENT SERVICES

16 FUNDING.— 

17 (1) ADMINISTRATIVE FUNDING.—In addition to 

18 any funds made available to a State to carry out this 

19 section ll for a fiscal year, the State shall receive 

20 for the fiscal year a payment in an amount that is 

21 equal to 15 percent of the amount of such funds and 

22 shall— 

(A) use not more than 2 23 ⁄3 of such payment 

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1 justment assistance for workers program under 

2 this part, including for— 

3 (i) processing waivers of training re4 quirements under subsection (a)(4); and 

5 (ii) collecting, validating, and report6 ing data required under this part; and 

(B) use not less than 1 7 ⁄3 of such payment 

8 for information and employment services under 

9 subsection (b)(1). 

10 (2) EMPLOYMENT SERVICES FUNDING.— 

11 (A) IN GENERAL.—In addition to any 

12 funds made available to a State to carry out 

13 subsection (b)(2) and the payment under para14 graph (1) for a fiscal year, the Secretary shall 

15 provide to the State for the fiscal year a reason16 able payment for the purpose of providing em17 ployment and services under subsection (b)(1). 

18 (B) VOLUNTARY RETURN OF FUNDS.—A 

19 State that receives a payment under subpara20 graph (A) may decline or otherwise return such 

21 payment to the Secretary. 

22 (e) JOB SEARCH ALLOWANCES.—The Secretary of 

23 Labor may provide adversely affected workers a one-time 

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1 vided shall be available only under the following cir2 cumstances and conditions: 

3 (1) The worker is no longer eligible for the cli4 mate change adjustment allowance under subsection 

5 (a) and has completed the training program required 

6 by subsection (a)(1)(E). 

7 (2) The Secretary determines that the worker 

8 cannot reasonably be expected to secure suitable em9 ployment in the commuting area in which the worker 

10 resides. 

11 (3) An allowance granted shall provide reim12 bursement to the worker of all necessary job search 

13 expenses as prescribed by the Secretary in regula14 tions. Such reimbursement under this subsection 

15 may not exceed $1,500 for any worker. 

16 (f) RELOCATION ALLOWANCE AUTHORIZED.— 

17 (1) IN GENERAL.—Any adversely affected work18 er covered by a certification issued under section 

19 425 may file an application for a relocation allow20 ance with the Secretary, and the Secretary may 

21 grant the relocation allowance, subject to the terms 

22 and conditions of this subsection. 

23 (2) CONDITIONS FOR GRANTING ALLOWANCE.— 

24 A relocation allowance may be granted if all of the 

25 following terms and conditions are met: 


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1 (A) ASSIST AN ADVERSELY AFFECTED

2 WORKER.—The relocation allowance will assist 

3 an adversely affected worker in relocating with4 in the United States. 

5 (B) LOCAL EMPLOYMENT NOT AVAIL6 ABLE.—The Secretary determines that the 

7 worker cannot reasonably be expected to secure 

8 suitable employment in the commuting area in 

9 which the worker resides. 

10 (C) TOTAL SEPARATION.—The worker is 

11 totally separated from employment at the time 

12 relocation commences. 

13 (D) SUITABLE EMPLOYMENT OBTAINED.— 

14 The worker— 

15 (i) has obtained suitable employment 

16 affording a reasonable expectation of long17 term duration in the area in which the 

18 worker wishes to relocate; or 

19 (ii) has obtained a bona fide offer of 

20 such employment. 

21 (E) APPLICATION.—The worker filed an 

22 application with the Secretary at such time and 

23 in such manner as the Secretary shall specify 

24 by regulation. 


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1 (3) AMOUNT OF ALLOWANCE.—The relocation 

2 allowance granted to a worker under paragraph (1) 

3 includes— 

4 (A) all reasonable and necessary expenses 

5 (including, subsistence and transportation ex6 penses at levels not exceeding amounts pre7 scribed by the Secretary in regulations) in8 curred in transporting the worker, the worker’s 

9 family, and household effects; and 

10 (B) a lump sum equivalent to 3 times the 

11 worker’s average weekly wage, up to a max12 imum payment of $1,500. 

13 (4) LIMITATIONS.—A relocation allowance may 

14 not be granted to a worker unless— 

15 (A) the relocation occurs within 182 days 

16 after the filing of the application for relocation 

17 assistance; or 

18 (B) the relocation occurs within 182 days 

19 after the conclusion of training, if the worker 

20 entered a training program approved by the 

21 Secretary under subsection (b)(2). 

22 (g) HEALTH INSURANCE CONTINUATION.—Not later 

23 than 1 year after the date of enactment of this part, the 

24 Secretary of Labor shall prescribe regulations to provide, 

25 for the period in which an adversely affected worker is 


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1 participating in a training program described in sub2 section (b)(2), 80 percent of the monthly premium of any 

3 health insurance coverage that an adversely affected work4 er was receiving from such worker’s employer prior to the 

5 separation from employment described in section 425(b), 

6 to be paid to any health care insurance plan designated 

7 by the adversely affected worker receiving an allowance 

8 under this section. 

9 SEC. 427. GENERAL PROVISIONS. 

10 (a) AGREEMENTS WITH STATES.— 

11 (1) IN GENERAL.—The Secretary is authorized 

12 on behalf of the United States to enter into an 

13 agreement with any State, or with any State agency 

14 (referred to in this section as ‘‘cooperating States’’ 

15 and ‘‘cooperating States agencies’’ respectively). 

16 Under such an agreement, the cooperating State 

17 agency— 

18 (A) as agent of the United States, shall re19 ceive applications for, and shall provide, pay20 ments on the basis provided in this part; 

21 (B) in accordance with paragraph (6), 

22 shall make available to adversely affected work23 ers covered by a certification under section 

24 425(d) the employment services described in 

25 section 426(b)(1); 


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1 (C) shall make any certifications required 

2 under section 425(d); and 

3 (D) shall otherwise cooperate with the Sec4 retary and with other State and Federal agen5 cies in providing payments and services under 

6 this part. 

7 Each agreement under this section shall provide the 

8 terms and conditions upon which the agreement may 

9 be amended, suspended, or terminated. 

10 (2) FORM AND MANNER OF DATA.—Each 

11 agreement under this section shall— 

12 (A) provide the Secretary with the author13 ity to collect any data the Secretary determines 

14 necessary to meet the requirements of this part; 

15 and 

16 (B) specify the form and manner in which 

17 any such data requested by the Secretary shall 

18 be reported. 

19 (3) RELATIONSHIP TO UNEMPLOYMENT INSUR20 ANCE.—Each agreement under this section shall 

21 provide that an adversely affected worker receiving 

22 a climate change adjustment allowance under this 

23 part shall not be eligible for unemployment insur24 ance otherwise payable to such worker under the 

25 laws of the State. 


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1 (4) REVIEW.—A determination by a cooper2 ating State agency with respect to entitlement to 

3 program benefits under an agreement is subject to 

4 review in the same manner and to the same extent 

5 as determinations under the applicable State law 

6 and only in that manner and to that extent. 

7 (5) COORDINATION.—Any agreement entered 

8 into under this section shall provide for the coordi9 nation of the administration of the provisions for 

10 employment services, training, and supplemental as11 sistance under section 426 and under title I of the 

12 Workforce Investment Act of 1998 upon such terms 

13 and conditions as are established by the Secretary in 

14 consultation with the States and set forth in such 

15 agreement. Any agency of the State jointly admin16 istering such provisions under such agreement shall 

17 be considered to be a cooperating State agency for 

18 purposes of this part. 

19 (6) RESPONSIBILITIES OF COOPERATING AGEN20 CIES.—Each cooperating State agency shall, in car21 rying out paragraph (1)(B)— 

22 (A) advise each worker who applies for un23 employment insurance of the benefits under this 

24 part and the procedures and deadlines for ap25 plying for such benefits; 


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1 (B) facilitate the early filing of petitions 

2 under section 425(a) for any workers that the 

3 agency considers are likely to be eligible for 

4 benefits under this part; 

5 (C) advise each adversely affected worker 

6 to apply for training under section 426(b) be7 fore, or at the same time, the worker applies for 

8 climate change adjustment allowances under 

9 section 426(a); 

10 (D) perform outreach to, intake of, and 

11 orientation for adversely affected workers and 

12 adversely affected incumbent workers covered 

13 by a certification under section 426(a) with re14 spect to assistance and benefits available under 

15 this part; 

16 (E) make employment services described in 

17 section 426(b)(1) available to adversely affected 

18 workers and adversely affected incumbent work19 ers covered by a certification under section 

20 425(d) and, if funds provided to carry out this 

21 part are insufficient to make such services 

22 available, make arrangements to make such 

23 services available through other Federal pro24 grams; and 


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1 (F) provide the benefits and reemployment 

2 services under this part in a manner that is 

3 necessary for the proper and efficient adminis4 tration of this part, including the use of state 

5 agency personnel employed in accordance with a 

6 merit system of personnel administration stand7 ards, including— 

8 (i) making determinations of eligibility 

9 for, and payment of, climate change read10 justment allowances and health care ben11 efit replacement amounts; 

12 (ii) developing recommendations re13 garding payments as a bridge to retire14 ment and lump sum payments to pension 

15 plans in accordance with this subsection; 

16 and 

17 (iii) the provision of reemployment 

18 services to eligible workers, including refer19 ral to training services. 

20 (7) In order to promote the coordination of 

21 workforce investment activities in each State with 

22 activities carried out under this part, any agreement 

23 entered into under this section shall provide that the 

24 State shall submit to the Secretary, in such form as 

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1 mation described in paragraphs (8) and (14) of sec2 tion 112(b) of the Workforce Investment Act of 

3 1998 (29 U.S.C. 2822(b)) and a description of the 

4 State’s rapid response activities under section 

5 221(a)(2)(A). 

6 (8) CONTROL MEASURES.— 

7 (A) IN GENERAL.—The Secretary shall re8 quire each cooperating State and cooperating 

9 State agency to implement effective control 

10 measures and to effectively oversee the oper11 ation and administration of the climate change 

12 adjustment assistance program under this part, 

13 including by means of monitoring the operation 

14 of control measures to improve the accuracy 

15 and timeliness of the data being collected and 

16 reported. 

17 (B) DEFINITION.—For purposes of sub18 paragraph (A), the term ‘‘control measures’’ 

19 means measures that— 

20 (i) are internal to a system used by a 

21 State to collect data; and 

22 (ii) are designed to ensure the accu23 racy and verifiability of such data. 

24 (9) DATA REPORTING.— 


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1 (A) IN GENERAL.—Any agreement entered 

2 into under this section shall require the cooper3 ating State or cooperating State agency to re4 port to the Secretary on a quarterly basis com5 prehensive performance accountability data, to 

6 consist of— 

7 (i) the core indicators of performance 

8 described in subparagraph (B)(i); 

9 (ii) the additional indicators of per10 formance described in subparagraph 

11 (B)(ii), if any; and 

12 (iii) a description of efforts made to 

13 improve outcomes for workers under the 

14 climate change adjustment assistance pro15 gram. 

16 (B) CORE INDICATORS DESCRIBED.— 

17 (i) IN GENERAL.—The core indicators 

18 of performance described in this subpara19 graph are— 

20 (I) the percentage of workers re21 ceiving benefits under this part who 

22 are employed during the second cal23 endar quarter following the calendar 

24 quarter in which the workers cease re25 ceiving such benefits; 


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1 (II) the percentage of such work2 ers who are employed in each of the 

3 third and fourth calendar quarters fol4 lowing the calendar quarter in which 

5 the workers cease receiving such bene6 fits; and 

7 (III) the earnings of such work8 ers in each of the third and fourth 

9 calendar quarters following the cal10 endar quarter in which the workers 

11 cease receiving such benefits. 

12 (ii) ADDITIONAL INDICATORS.—The 

13 Secretary and a cooperating State or co14 operating State agency may agree upon 

15 additional indicators of performance for 

16 the climate change adjustment assistance 

17 program under this part, as appropriate. 

18 (C) STANDARDS WITH RESPECT TO RELI19 ABILITY OF DATA.—In preparing the quarterly 

20 report required by subparagraph (A), each co21 operating State or cooperating State agency 

22 shall establish procedures that are consistent 

23 with guidelines to be issued by the Secretary to 

24 ensure that the data reported are valid and reli25 able. 


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1 (10) VERIFICATION OF ELIGIBILITY FOR PRO2 GRAM BENEFITS.— 

3 (A) IN GENERAL.—An agreement under 

4 this section shall provide that the State shall 

5 periodically redetermine that a worker receiving 

6 benefits under this part who is not a citizen or 

7 national of the United States remains in a sat8 isfactory immigration status. Once satisfactory 

9 immigration status has been initially verified 

10 through the immigration status verification sys11 tem described in section 1137(d) of the Social 

12 Security Act (42 U.S.C. 1320b–7(d)) for pur13 poses of establishing a worker’s eligibility for 

14 unemployment compensation, the State shall 

15 reverify the worker’s immigration status if the 

16 documentation provided during initial 

17 verification will expire during the period in 

18 which that worker is potentially eligible to re19 ceive benefits under this part. The State shall 

20 conduct such redetermination in a timely man21 ner, utilizing the immigration status verification 

22 system described in section 1137(d) of the So23 cial Security Act (42 U.S.C. 1320b–7(d)). 

24 (B) PROCEDURES.—The Secretary shall 

25 establish procedures to ensure the uniform apVerDate Nov 24 2008 01:57 May 16, 2009 Jkt 079200 PO 00000 Frm 00791 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 plication by the States of the requirements of 

2 this paragraph. 

3 (b) ADMINISTRATION ABSENT STATE AGREE4 MENT.— 

5 (1) In any State where there is no agreement 

6 in force between a State or its agency under sub7 section (a), the Secretary shall promulgate regula8 tions for the performance of all necessary functions 

9 under section 426, including provision for a fair 

10 hearing for any worker whose application for pay11 ments is denied. 

12 (2) A final determination under paragraph (1) 

13 with respect to entitlement to program benefits 

14 under section 426 is subject to review by the courts 

15 in the same manner and to the same extent as is 

16 provided by section 205(g) of the Social Security Act 

17 (42 U.S.C. 405(g)). 

18 (c) PROHIBITION ON CONTRACTING WITH PRIVATE

19 ENTITIES.—Neither the Secretary nor a State may con20 tract with any private for-profit or nonprofit entity for the 

21 administration of the climate change adjustment assist22 ance program under this part. 

23 (d) PAYMENT TO THE STATES.— 

24 (1) IN GENERAL.—The Secretary shall from 

25 time to time certify to the Secretary of the Treasury 


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1 for payment to each cooperating State the sums nec2 essary to enable such State as agent of the United 

3 States to make payments provided for by this part. 

4 (2) RESTRICTION.—All money paid a State 

5 under this subsection shall be used solely for the 

6 purposes for which it is paid; and money so paid 

7 which is not used for such purposes shall be re8 turned, at the time specified in the agreement under 

9 this section, to the Secretary of the Treasury. 

10 (3) BONDS.—Any agreement under this section 

11 may require any officer or employee of the State cer12 tifying payments or disbursing funds under the 

13 agreement or otherwise participating in the perform14 ance of the agreement, to give a surety bond to the 

15 United States in such amount as the Secretary may 

16 deem necessary, and may provide for the payment of 

17 the cost of such bond from funds for carrying out 

18 the purposes of this part. 

19 (e) LABOR STANDARDS.— 

20 (1) PROHIBITION ON DISPLACEMENT.—An indi21 vidual in an apprenticeship program or on-the-job 

22 training program under this part shall not displace 

23 (including a partial displacement, such as a reduc24 tion in the hours of non-overtime work, wages, or 

25 employment benefits) any employed employee. 


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1 (2) PROHIBITION ON IMPAIRMENT OF CON2 TRACTS.—An apprenticeship program or on-the-job 

3 raining program under this Act shall not impair an 

4 existing contract for services or collective bargaining 

5 agreement, and no such activity that would be incon6 sistent with the terms of a collective bargaining 

7 agreement shall be undertaken without the written 

8 concurrence of the labor organization and employer 

9 concerned. 

10 (3) ADDITIONAL STANDARDS.—The Secretary, 

11 or a State acting under an agreement described in 

12 subsection (a) may pay the costs of on-the-job train13 ing, notwithstanding any other provision of this sec14 tion, only if— 

15 (A) in the case of training which would be 

16 inconsistent with the terms of a collective bar17 gaining agreement, the written concurrence of 

18 the labor organization concerned has been ob19 tained; 

20 (B) the job for which such adversely af21 fected worker is being trained is not being cre22 ated in a promotional line that will infringe in 

23 any way upon the promotional opportunities of 

24 currently employed individuals; 


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1 (C) such training is not for the same occu2 pation from which the worker was separated 

3 and with respect to which such worker’s group 

4 was certified pursuant to section 425(d); 

5 (D) the employer is provided reimburse6 ment of not more than 50 percent of the wage 

7 rate of the participant, for the cost of providing 

8 the training and additional supervision related 

9 to the training; and 

10 (E) the employer has not received payment 

11 under with respect to any other on-the-job 

12 training provided by such employer which failed 

13 to meet the requirements of subparagraphs (A) 

14 through (D). 

15 (f) DEFINITIONS.—As used in this part the following 

16 definitions apply: 

17 (1) The term ‘‘adversely affected employment’’ 

18 means employment at an employment site, if work19 ers at such site are eligible to apply for adjustment 

20 assistance under this part. 

21 (2) The term ‘‘adversely affected worker’’ 

22 means an individual who has been totally or partially 

23 separated from employment and is eligible to apply 

24 for adjustment assistance under this part. 


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(3) The term ‘‘average weekly wage’’ means 1 1 ⁄13

2 of the total wages paid to an individual in the quar3 ter in which the individual’s total wages were highest 

4 among the first 4 of the last 5 completed calendar 

5 quarters immediately before the quarter in which oc6 curs the week with respect to which the computation 

7 is made. Such week shall be the week in which total 

8 separation occurred, or, in cases where partial sepa9 ration is claimed, an appropriate week, as defined in 

10 regulations prescribed by the Secretary. 

11 (4) The term ‘‘average weekly hours’’ means 

12 the average hours worked by the individual (exclud13 ing overtime) in the employment from which he has 

14 been or claims to have been separated in the 52 

15 weeks (excluding weeks during which the individual 

16 was sick or on vacation) preceding the week speci17 fied in the last sentence of paragraph (4). 

18 (5) The term ‘‘benefit period’’ means, with re19 spect to an individual— 

20 (A) the benefit year and any ensuing pe21 riod, as determined under applicable State law, 

22 during which the individual is eligible for reg23 ular compensation, additional compensation, or 

24 extended compensation; or 


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1 (B) the equivalent to such a benefit year 

2 or ensuing period provided for under the appli3 cable Federal unemployment insurance law. 

4 (6) The term ‘‘consumer goods manufacturing’’ 

5 means the electrical equipment, appliance, and com6 ponent manufacturing industry and transportation 

7 equipment manufacturing. 

8 (7) The term ‘‘employment site’’ means a single 

9 facility or site of employment. 

10 (8) The term ‘‘energy-intensive manufacturing 

11 industries’’ means all industrial sectors, entities, or 

12 groups of entities that meet the energy or green13 house gas intensity criteria in section 

14 765(b)(2)(A)(i) of the Clean Air Act based on the 

15 most recent data available. 

16 (9) The term ‘‘energy producing and trans17 forming industries’’ means the coal mining industry, 

18 oil and gas extraction, electricity power generation, 

19 transmission and distribution, and natural gas dis20 tribution. 

21 (10) The term ‘‘industries dependent on energy 

22 industries’’ means rail transportation and pipeline 

23 transportation. 


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1 (11) The term ‘‘on-the-job training’’ means 

2 training provided by an employer to an individual 

3 who is employed by the employer. 

4 (12) The terms ‘‘partial separation’’ and ‘‘par5 tially separated’’ refer, with respect to an individual 

6 who has not been totally separated, that such indi7 vidual has had— 

8 (A) his or her hours of work reduced to 80 

9 percent or less of his average weekly hours in 

10 adversely affected employment; and 

11 (B) his or her wages reduced to 80 percent 

12 or less of his average weekly wage in such ad13 versely affected employment. 

14 (13) The term ‘‘public agency’’ means a depart15 ment or agency of a State or political subdivision of 

16 a State or of the Federal government. 

17 (14) The term ‘‘Secretary’’ means the Secretary 

18 of Labor. 

19 (15) The term ‘‘service workers’’ means work20 ers supplying support or auxiliary services to an em21 ployment site. 

22 (16) The term ‘‘State’’ includes the District of 

23 Columbia and the Commonwealth of Puerto Rico: 

24 and the term ‘‘United States’’ when used in the geo25 graphical sense includes such Commonwealth. 


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1 (17) The term ‘‘State agency’’ means the agen2 cy of the State which administers the State law. 

3 (18) The term ‘‘State law’’ means the unem4 ployment insurance law of the State approved by the 

5 Secretary of Labor under section 3304 of the Inter6 nal Revenue Code of 1954. 

7 (19) The terms ‘‘total separation’’ and ‘‘totally 

8 separated’’ refer to the layoff or severance of an in9 dividual from employment with an employer in which 

10 adversely affected employment exists. 

11 (20) The term ‘‘unemployment insurance’’ 

12 means the unemployment compensation payable to 

13 an individual under any State law or Federal unem14 ployment compensation law, including chapter 85 of 

15 title 5, United States Code, and the Railroad Unem16 ployment Insurance Act. The terms ‘‘regular com17 pensation’’, ‘‘additional compensation’’, and ‘‘ex18 tended compensation’’ have the same respective 

19 meanings that are given them in section 205(2), (3), 

20 and (4) of the Federal-State Extended Unemploy21 ment Compensation Act of 1970 (26 U.S.C. 3304 

22 note). 

23 (21) The term ‘‘week’’ means a week as defined 

24 in the applicable State law. 


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1 (22) The term ‘‘week of unemployment’’ means 

2 a week of total, part-total, or partial unemployment 

3 as determined under the applicable State law or 

4 Federal unemployment insurance law. 

5 (g) SPECIAL RULE WITH RESPECT TO MILITARY

6 SERVICE.— 

7 (1) IN GENERAL.—Notwithstanding any other 

8 provision of this part, the Secretary may waive any 

9 requirement of this part that the Secretary deter10 mines is necessary to ensure that an adversely af11 fected worker who is a member of a reserve compo12 nent of the Armed Forces and serves a period of 

13 duty described in paragraph (2) is eligible to receive 

14 a climate change adjustment allowance, training, 

15 and other benefits under this part in the same man16 ner and to the same extent as if the worker had not 

17 served the period of duty. 

18 (2) PERIOD OF DUTY DESCRIBED.—An ad19 versely affected worker serves a period of duty de20 scribed in this paragraph if, before completing train21 ing under this part, the worker— 

22 (A) serves on active duty for a period of 

23 more than 30 days under a call or order to ac24 tive duty of more than 30 days; or 


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1 (B) in the case of a member of the Army 

2 National Guard of the United States or Air Na3 tional Guard of the United States, performs 

4 full-time National Guard duty under section 

5 502(f) of title 32, United States Code, for 30 

6 consecutive days or more when authorized by 

7 the President or the Secretary of Defense for 

8 the purpose of responding to a national emer9 gency declared by the President and supported 

10 by Federal funds. 

11 (h) FRAUD AND RECOVERY OF OVERPAYMENTS.— 

12 (1) RECOVERY OF PAYMENTS TO WHICH AN IN13 DIVIDUAL WAS NOT ENTITLED.—If the Secretary or 

14 a court of competent jurisdiction determines that 

15 any person has received any payment under this 

16 part to which the individual was not entitled, such 

17 individual shall be liable to repay such amount to 

18 the Secretary, as the case may be, except that the 

19 Secretary shall waive such repayment if such agency 

20 or the Secretary determines that— 

21 (A) the payment was made without fault 

22 on the part of such individual; and 

23 (B) requiring such repayment would cause 

24 a financial hardship for the individual (or the 

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1 ing into consideration the income and resources 

2 reasonably available to the individual (or house3 hold) and other ordinary living expenses of the 

4 individual (or household). 

5 (2) MEANS OF RECOVERY.—Unless an overpay6 ment is otherwise recovered, or waived under para7 graph (1), the Secretary shall recover the overpay8 ment by deductions from any sums payable to such 

9 person under this part, under any Federal unem10 ployment compensation law or other Federal law ad11 ministered by the Secretary which provides for the 

12 payment of assistance or an allowance with respect 

13 to unemployment. Any amount recovered under this 

14 section shall be returned to the Treasury of the 

15 United States. 

16 (3) PENALTIES FOR FRAUD.—Any person 

17 who— 

18 (A) makes a false statement of a material 

19 fact knowing it to be false, or knowingly fails 

20 to disclose a material fact, for the purpose of 

21 obtaining or increasing for that person or for 

22 any other person any payment authorized to be 

23 furnished under this part, or 

24 (B) makes a false statement of a material 

25 fact knowing it to be false, or knowingly fails 


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1 to disclose a material fact, when providing in2 formation to the Secretary during an investiga3 tion of a petition under section 425(c), 

4 shall be imprisoned for not more than one year, or fined 

5 under title 18, United States Code, or both, and be ineli6 gible for any further payments under this part. 

7 (i) REGULATIONS.—The Secretary shall prescribe 

8 such regulations as may be necessary to carry out the pro9 visions of this part. 

10 (j) STUDY ON OLDER WORKERS.—The Secretary 

11 shall conduct a study examine the circumstances of older 

12 adversely affected workers and the ability of such workers 

13 to access their retirement benefits. The Secretary shall 

14 transmit a report to Congress not later than 2 years after 

15 the date of enactment of this part on the findings of the 

16 study and the Secretary’s recommendations on how to en17 sure that adversely affected workers within 2 years of re18 tirement are able to access their retirement benefits. 

19 ø(k) SPENDING LIMIT.—For each fiscal year, the 

20 total amount of funds disbursed for the purposes described 

21 in section 426 shall not exceed the amount deposited in 

22 that fiscal year into the Climate Change Worker Assist23 ance Fund established under section ø782(j)¿ of the Clean 

24 Air Act. The annual spending limit for any succeeding 

25 year shall be increased by the difference, if any, between 


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1 the amount of the prior year’s disbursements and the 

2 spending limitation for that year. The Secretary shall pro3 mulgate rules to ensure that this spending limit is not ex4 ceeded. Such rules shall provide that workers who receive 

5 any of the benefits described in section 426 receive full 

6 benefits, and shall include the establishment of a waiting 

7 list for workers in the event that the requests for assist8 ance exceed the spending limit.¿ 

9 Subtitle C—Consumer Assistance 

10 SEC. 431. ENERGY TAX CREDIT. 

11 Subpart C of part IV of subchapter A of chapter 1 

12 of the Internal Revenue Code of 1986 is amended by in13 serting after section 36A the following new section: 

14 ‘‘SEC. 36B. ENERGY TAX CREDIT. 

15 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli16 gible individual, there shall be allowed as a credit against 

17 the tax imposed by this subtitle for the taxable year an 

18 amount equal to— 

19 ‘‘(1) for an eligible individual with applicable 

20 income of less than $6,000, the phase in rate times 

21 the applicable income; 

22 ‘‘(2) for an eligible individual with applicable 

23 income that is greater than or equal to $6,000 and 

24 is less than or equal to the phase down amount, the 

25 maximum energy tax credit; 


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1 ‘‘(3) for an individual with applicable income 

2 that exceeds the phase down amount, an amount 

3 equal to— 

4 ‘‘(A) the maximum energy tax credit 

5 minus; or 

6 ‘‘(B) the difference between the individ7 ual’s applicable income and the phase down 

8 amount multiplied by .2. 

9 ‘‘(b) COORDINATION WITH ENERGY REFUND RE10 CEIVED THROUGH STATE HUMAN SERVICE AGENCIES.— 

11 The amount described in subsection (a) shall be reduced 

by 1 12 ⁄12 for each month in which the individual or his or 

13 her spouse received a refund under section 432 of the Safe 

14 Climate Act. 

15 ‘‘(1) The Secretary of the Treasury shall pro16 mulgate regulations that instruct States on how to 

17 inform adult individuals who receive a refund under 

18 section 432 of the Safe Climate Act of the number 

19 of months he or she received a refund and how such 

20 information shall be provided to the Internal Rev21 enue Service. 

22 ‘‘(2) The Secretary of the Treasury shall estab23 lish a telephone and online system that allows an in24 dividual to inquire about the number of months she 

25 or he received such a refund. 


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1 ‘‘(3) In the case of an individual that does not 

2 report the number of months a refund was provided 

3 under section 432 of the Safe Climate Act or re4 corded an incorrect number of months, the Secretary 

5 of the Treasury shall adjust the energy tax credit 

6 based on the information received from States, pro7 vided that the Secretary of the Treasury has made 

8 a determination that the information meets a suffi9 cient standard for accuracy. 

10 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur11 poses of this section— 

12 ‘‘(1) ELIGIBLE INDIVIDUAL.— 

13 ‘‘(A) IN GENERAL.—The term ‘eligible in14 dividual’ means any individual other than— 

15 ‘‘(i) any nonresident alien individual; 

16 ‘‘(ii) any individual with respect to 

17 whom a deduction under section 151 is al18 lowable to another taxpayer for a taxable 

19 year beginning in the calendar year in 

20 which the individual’s taxable year begins; 

21 and 

22 ‘‘(iii) an estate or trust. 

23 ‘‘(B) IDENTIFICATION NUMBER REQUIRE24 MENT.—Such term shall not include any indi25 vidual who— 


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1 ‘‘(i) in the case of a return that is not 

2 a joint return, does not include the social 

3 security number of the individual; and 

4 ‘‘(ii) in the case of joint return, does 

5 not include the social security number of 

6 at least one of the taxpayers on such re7 turn. 

8 For purposes of the preceding sentence, the so9 cial security number shall not include a TIN 

10 issued by the Internal Revenue Service. 

11 ‘‘(2) APPLICABLE INCOME.—Applicable income 

12 means the larger of— 

13 ‘‘(A) earned income as defined in section 

14 32(c)(2), except that such term shall not in15 clude net earnings from self-employment which 

16 are not taken into account in computing taxable 

17 income; and 

18 ‘‘(B) adjusted gross income. 

19 ‘‘(3) PHASE IN RATE.—The Secretary of the 

20 Treasury shall compute the phase in rates each year 

21 for the energy credit for joint returns and for re22 turns that are not filed jointly with respect to each 

23 relevant number of qualifying individuals such that 

24 the phase in rate equals the maximum energy tax 

25 credit divided by $6,000. 


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1 ‘‘(4) MAXIMUM ENERGY TAX CREDIT.— 

2 ‘‘(A) IN GENERAL.— 

3 ‘‘(i) The maximum energy tax credit 

4 shall vary based on the number of individ5 uals in the tax filing unit. 

6 ‘‘(ii) The maximum energy tax credit 

7 for a filing unit of a particular size shall 

8 be equal to the average annual reduction in 

9 purchasing power for low-income house10 holds of that household size, as calculated 

11 by the Environmental Protection Agency, 

12 that results from the regulation of green13 house gas emissions under title VII of the 

14 Clean Air Act. 

15 ‘‘(iii) The Environmental Protection 

16 Agency, in consultation with other appro17 priate federal agencies, shall calculate the 

18 maximum energy tax credit by August 31 

19 of each year for the following calendar year 

20 using the most recent, reliable data avail21 able. 

22 ‘‘(B) ENERGY TAX CREDIT CALCULA23 TION.— 

24 ‘‘(i) DISTRIBUTION.—For each cal25 endar year, the Environmental Protection 


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1 Agency shall determine pursuant to sub2 paragraph (B)(iii) the aggregate reduction 

3 in purchasing power among all United 

4 States households that results from the 

5 regulation of greenhouse gas emissions 

6 under title VII of the Clean Air Act and 

7 distribute that aggregate reduction in pur8 chasing power among all United States 

9 households based on— 

10 ‘‘(I) households’ share of total 

11 consumption by all households; 

12 ‘‘(II) the carbon intensity and 

13 covered-emissions intensity of house14 holds’ consumption; and 

15 ‘‘(III) the share of households’ 

16 carbon and covered-emissions con17 sumption that is not financed by Fed18 eral benefits subject to a cost of living 

19 adjustment that offsets increased car20 bon costs. 

21 ‘‘(ii) MAXIMUM ENERGY TAX CRED22 IT.—The maximum energy tax credit shall 

23 be equal to the arithmetic mean value of 

24 the amount allocated under clause (i) to 

25 households of a specified household size in 


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1 the lowest income quintile. Tax filing units 

2 that include 5 or more individuals shall be 

3 eligible for the arithmetic mean value of 

4 the amount allocated under clause (i) to 

5 households that includes 5 or more individ6 uals. 

7 ‘‘(iii) AGGREGATE REDUCTION IN

8 PURCHASING POWER.—For purposes of 

9 this section, the aggregate reduction in 

10 purchasing power shall be based on the 

11 projected total market value of the emis12 sions allowances used to demonstrate com13 pliance with title VII of the Clean Air Act 

14 in that year, adjusted to reflect costs that 

15 were not incurred by households as a re16 sult of allowances freely allocated pursuant 

17 to section ø782¿ of the Clean Air Act, as 

18 estimated by the Environmental Protection 

19 Agency, and calculated in a way generally 

20 recognized as suitable by experts in evalu21 ating such purchasing power impacts. 

22 ‘‘(iv) INCOME QUINTILES.—Income 

23 quintiles shall be determined by ranking 

24 households according to income adjusted 

25 for household size, and shall be constructed 


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1 so that each quintile contains an equal 

2 number of people. 

3 ‘‘(5) PHASE DOWN AMOUNT.— 

4 ‘‘(A) In the case of an eligible individual 

5 who has no qualifying individuals, the phase 

6 down amount shall be— 

7 ‘‘(i) $20,000 in the case of an indi8 vidual who does not file a joint return; and 

9 ‘‘(ii) $25,000 in the case of a joint re10 turn. 

11 ‘‘(B) In the case of an eligible individual 

12 who files a joint return and has at least one 

13 qualifying individual— 

14 ‘‘(i) If the eligible individual has one 

15 qualifying individual, the lowest income 

16 level that exceeds the phaseout amount as 

17 defined in section 32(b)(2) at which a mar18 ried couple with one qualifying child is in19 eligible for the earned income credit for the 

20 taxable year. 

21 ‘‘(ii) If the eligible individual has two 

22 qualifying individuals, the lowest income 

23 level that exceeds the phaseout amount as 

24 defined in section 32(b)(2) at which a mar25 ried couple with two qualifying children is 


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1 ineligible for the earned income credit for 

2 the taxable year. 

3 ‘‘(iii) If the eligible individual claims 

4 three or more qualifying individuals, the 

5 lowest income level that exceeds the phase6 out amount as defined in section 32(b)(2) 

7 at which a married couple with three or 

8 more qualifying children is ineligible for 

9 the earned income credit for the taxable 

10 year. 

11 ‘‘(C) In the case of an eligible individual 

12 who does not file a joint return and has at least 

13 one individual qualifying individual— 

14 ‘‘(i) If the eligible individual has one 

15 qualifying individual, the lowest income 

16 level that exceeds the phaseout amount as 

17 defined in section 32(b)(2) at which a sin18 gle individual with one qualifying child is 

19 ineligible for the earned income credit for 

20 the taxable year. 

21 ‘‘(ii) If the eligible individual has two 

22 qualifying individuals, the lowest income 

23 level that exceeds the phaseout amount as 

24 defined in section 32(b)(2) at which a sin25 gle individual with two qualifying children 


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1 is ineligible for the earned income credit 

2 for the taxable year. 

3 ‘‘(iii) If the eligible individual has 

4 three or more qualifying individuals, the 

5 lowest income level that exceeds the phase6 out amount as defined in section 32(b)(2) 

7 at which a single individual with three or 

8 more qualifying children is ineligible for 

9 the earned income credit for the taxable 

10 year. 

11 ‘‘(6) QUALIFYING INDIVIDUAL.—A qualifying 

12 individual is an individual whom the eligible indi13 vidual claims as a dependent under section 151, or 

14 as a qualifying child for the earned income credit 

15 under section 32(c)(3) or the child tax credit under 

16 section 24, or both. The term qualifying individual 

17 does not include— 

18 ‘‘(A) someone claimed as a dependent 

19 under section 151 if that dependent is claimed 

20 as a qualifying child for the earned income tax 

21 credit or the child tax credit on a tax form by 

22 someone other than the eligible individual; and 

23 ‘‘(B) the eligible individual and, if a joint 

24 return, his or her spouse. 


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1 ‘‘(7) NUMBER OF PEOPLE IN THE TAX FILING

2 UNIT.—The number of people in the tax filing unit 

3 shall equal the sum of the number of qualifying indi4 viduals plus— 

5 ‘‘(A) in the case of a joint return, 2; and 

6 ‘‘(B) in the case of a return that is not 

7 filed jointly, 1. 

8 ‘‘(d) TREATMENT OF POSSESSIONS.— 

9 ‘‘(1) PAYMENTS TO POSSESSIONS.— 

10 ‘‘(A) MIRROR CODE POSSESSION.—The 

11 Secretary of the Treasury shall pay to each pos12 session of the United States with a mirror code 

13 tax system amounts equal to the loss to that 

14 possession by reason of the amendments made 

15 by this section. Such amounts shall be deter16 mined by the Secretary of the Treasury based 

17 on information provided by the Government of 

18 the respective possession. 

19 ‘‘(B) OTHER POSSESSIONS.—The Sec20 retary of the Treasury shall pay to each posses21 sion of the United States which does not have 

22 a mirror code tax system amounts estimated by 

23 the Secretary of the Treasury as being equal to 

24 the aggregate benefits that would have been 

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1 son of the amendments made by this section if 

2 a mirror code tax system had been in effect in 

3 such possession. The preceding sentence shall 

4 not apply for a given taxable year with respect 

5 to any possession of the United States unless 

6 such possession has a plan, which has been ap7 proved by the Secretary of the Treasury, under 

8 which such possession will promptly distribute 

9 such payments to residents of such possession. 

10 ‘‘(2) COORDINATION WITH CREDIT ALLOWED

11 AGAINST UNITED STATES INCOME TAXES.—No cred12 it shall be allowed against United States income 

13 taxes for any taxable year under this section to any 

14 person— 

15 ‘‘(A) to whom a credit is allowed against 

16 taxes imposed by the possession by reason of 

17 the amendments made by this section for such 

18 taxable year; or 

19 ‘‘(B) who is eligible for a payment under 

20 a plan described in paragraph (1)(B) with re21 spect to such taxable year. 

22 ‘‘(e) AMOUNT OF CREDIT TO BE DETERMINED

23 UNDER TABLES.—The amount of the credit allowed by 

24 this section shall be determined under tables prescribed 

25 by the Secretary. 


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1 ‘‘(f) INFLATION ADJUSTMENTS.—In the case of any 

2 taxable year beginning after 2009, dollar amounts in sub3 section (c)(4)(A) shall be increased by an amount equal 

4 to such dollar amount, multiplied by the cost-of-living ad5 justment determined under section 1(f)(3) of the Internal 

6 Revenue Code of 1986. 

7 ‘‘(g) TREATMENT IN OTHER PROGRAMS.—The en8 ergy tax credit provided under this section shall not be 

9 considered income or resources for any purpose under any 

10 Federal, State, or local laws, including, but not limited 

11 to, laws relating to an income tax or public assistance pro12 gram (including, but not limited to, health care, cash aid, 

13 child care, nutrition programs, and housing assistance), 

14 and no participating State or political subdivision thereof 

15 shall decrease any assistance otherwise provided an indi16 vidual or individuals because of the receipt of an energy 

17 tax credit under this Act.’’. 

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

19 CONSUMERS. 

20 (a) ENERGY REFUND PROGRAM.— 

21 (1) The Administrator of the Environmental 

22 Protection Agency, or the agency designated by the 

23 Administrator shall formulate and administer the 

24 ‘‘Energy Refund Program’’. 


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1 (2) At the request of the State agency, eligible 

2 low-income households within the State shall receive 

3 a monthly cash energy refund equal to the estimated 

4 loss in purchasing power resulting from this Act. 

5 (b) ELIGIBILITY.— 

6 (1) ELIGIBLE HOUSEHOLDS.—Participation in 

7 the Energy Refund Program shall be limited to a 

8 household that— 

9 (A) the State agency determines to be par10 ticipating in (i) the Supplemental Nutrition As11 sistance Program authorized by the Food and 

12 Nutrition Act of 2008 (7 U.S.C. 2011 et seq.); 

13 (ii) the Food Distribution Program on Indian 

14 Reservations authorized by section 4(b) of such 

15 Act (7 U.S.C. 2013(b)); or (iii) the program for 

16 nutrition assistance in Puerto Rico or American 

17 Samoa under section 19 of the such Act (7 

18 U.S.C. 2028); 

19 (B) has gross income that does not exceed 

20 150 percent of the poverty line; or 

21 (C) consists of a single individual or a 

22 married couple and (i) receives the subsidy de23 scribed in section 1860D–14 of the Social Secu24 rity Act (42 U.S.C. 1395w–114); or (ii)(I) par25 ticipates in the program under section XVIII of 


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1 the Social Security Act; and (II) meets the in2 come requirements described in section 1860D– 

3 14(a)(1) or (a)(2) of such Act (42 U.S.C. 

4 1395w–114(a)(1) or (a)(2)). 

5 (2) STREAMLINED ELIGIBILITY FOR CERTAIN

6 BENEFICIARIES.—The Administrator, in consulta7 tion with the Secretary of Health and Human Serv8 ices, the Commissioner of Social Security, the Rail9 road Retirement Board, the Secretary of Veterans 

10 Affairs, and the State agencies shall develop proce11 dures to ensure that low-income beneficiaries of the 

12 benefit programs they administer receive the energy 

13 refund for which they are eligible. 

14 (3) LIMITATION.—Notwithstanding any provi15 sion of law, the Administrator shall establish proce16 dures to ensure that individuals that qualify for the 

17 refund under paragraph (1)(B) and that do not par18 ticipate in the Supplemental Nutrition Assistance 

19 Program are United States citizens, United States 

20 nationals, or individuals lawfully residing in the 

21 United States. 

22 (4) NATIONAL STANDARDS.—The Adminis23 trator shall establish uniform national standards of 

24 eligibility in accordance with the provisions of this 

25 section. No State agency shall impose any other 


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1 standard or requirement as a condition of eligibility 

2 or refund receipt under the program. Assistance in 

3 the Energy Refund Program shall be furnished 

4 promptly to all eligible households who make appli5 cation for such participation. 

6 (c) MONTHLY ENERGY REFUND AMOUNT.— 

7 (1) MONTHLY ENERGY REFUND.—The monthly 

8 refund under this subsection for households of 1, 2, 

9 3, 4, and 5 or more members shall be equal to the 

10 maximum energy tax credit amount calculated under 

11 section 36B(c)(4) of the Internal Revenue Code of 

12 1986 for each household size, divided by 12 and 

13 rounded to the nearest whole dollar amount. 

14 (2) MONTHLY ELIGIBILITY.—A household shall 

15 not be eligible for the refund under this section for 

16 months that the household has not established eligi17 bility under subsection (b). 

18 (d) DELIVERY MECHANISM.— 

19 (1) Subject to standards and an implementation 

20 schedule set by the Administrator, the energy refund 

21 shall be provided in monthly installments via— 

22 (A) direct deposit into the eligible house23 hold’s designated bank account; 

24 (B) the State’s electronic benefit transfer 

25 system; or 


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1 (C) another Federal or State mechanism, 

2 if such a mechanism is approved by the Admin3 istrator. 

4 (2) Such standards shall include— 

5 (A)(i) defining the required level of recipi6 ent protection regarding privacy; 

7 (ii) guidance on how recipients are offered 

8 choices, when relevant, about the delivery mech9 anism; 

10 (iii) guidance on ease of use and access to 

11 the refund, including the prohibition of fees 

12 charged to recipients for withdrawals or other 

13 services; and 

14 (iv) cost-effective protections against im15 proper accessing of the energy refund; 

16 (B) operating standards that provide for 

17 interoperability between States and law enforce18 ment monitoring; and 

19 (C) other standards, as determined by the 

20 Administrator or the Administrator’s designee. 

21 (e) INFORMATION ABOUT REFUND PROVIDED TO

22 HOUSEHOLDS AND INTERNAL REVENUE SERVICE.— 

23 (1) By January 31 of each year, for each adult 

24 that was a member of a household that received an 

25 energy refund under this section in the State during 


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1 the prior calendar year, each State shall issue a 

2 form that conforms to standards established by the 

3 Secretary of the Treasury under section 36B(b) of 

4 the Internal Revenue Code of 1986, containing— 

5 (A) the name, address, and social security 

6 number of the adult household member; and 

7 (B) the number of months the individual 

8 was a member of a household that received an 

9 energy refund under this section. 

10 (2) States shall provide this information to the 

11 Internal Revenue Service in accordance to standards 

12 and regulations set forth by the Secretary of the 

13 Treasury. 

14 (f) ADMINISTRATION.— 

15 (1) IN GENERAL.—The State agency of each 

16 participating State shall assume responsibility for 

17 the certification of applicant households and for the 

18 issuance of refunds and the control and account19 ability thereof. 

20 (2) PROCEDURES.—Under standards estab21 lished by the Administrator, the State agency shall 

22 establish procedures governing the administration of 

23 the Energy Refund Program that the State agency 

24 determines best serve households in the State, in25 cluding households with special needs, such as 


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1 households with elderly or disabled members, house2 holds in rural areas, homeless individuals, and 

3 households residing on reservations as defined in the 

4 Indian Child Welfare Act of 1978 and the Indian Fi5 nancing Act of 1974. In carrying out this para6 graph, a State agency— 

7 (A) shall provide timely, accurate, and fair 

8 service to applicants for, and participants in, 

9 the Energy Refund Program; 

10 (B) shall permit an applicant household to 

11 apply to participate in the program at the time 

12 that the household first contacts the State 

13 agency, and shall consider an application that 

14 contains the name, address, and signature of 

15 the applicant to be sufficient to constitute an 

16 application for participation; 

17 (C) shall screen any applicant household 

18 for the Supplemental Nutrition Assistance Pro19 gram, the State’s medical assistance program 

20 under section XIX of the Social Security Act, 

21 State Childrens Health Insurance Program 

22 under section XXI of the Social Security Act, 

23 and a State program that provides basic assist24 ance under a State program funded under title 

25 IV of the Social Security Act or with qualified 


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1 State expenditures as defined in section 

2 409(a)(7) of the Social Security Act for eligi3 bility for the Energy Refund Program and, if 

4 eligible, shall enroll such applicant household in 

5 the Energy Refund Program; 

6 (D) shall complete certification of and pro7 vide a refund to any eligible household not later 

8 than thirty days following its filing of an appli9 cation; 

10 (E) shall use appropriate bilingual per11 sonnel and materials in the administration of 

12 the program in those portions of the State in 

13 which a substantial number of members of low14 income households speak a language other than 

15 English; and 

16 (F) shall utilize State agency personnel 

17 who are employed in accordance with the cur18 rent standards for a Merit System of Personnel 

19 Administration or any standards later pre20 scribed by the Office of Personnel Management 

21 pursuant to section 208 of the Intergovern22 mental Personnel Act of 1970 (42 U.S.C. 4728) 

23 modifying or superseding such standards relat24 ing to the establishment and maintenance of 

25 personnel standards on a merit basis to make 


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1 all tentative and final determinations of eligi2 bility and ineligibility. 

3 (3) REGULATIONS.— 

4 (A) Except as provided in subparagraph 

5 (B) the Administrator shall issue such regula6 tions consistent with this section as the Admin7 istrator deems necessary or appropriate for the 

8 effective and efficient administration of the En9 ergy Refund Program and shall promulgate all 

10 such regulations in accordance with the proce11 dures set forth in section 553 of title 5, United 

12 States Code. 

13 (B) Without regard to section 553 of title 

14 5 of such Code, the Administrator may, during 

15 the period beginning with the effective date of 

16 this section and ending two years after such 

17 date, by rule promulgate as final any proce18 dures that are substantially the same as the 

19 procedures governing the Supplemental Nutri20 tion Assistance Program at 7 CFR 273.2, 

21 273.12.273.15. 

22 (g) TREATMENT.—The value of the refund provided 

23 under this Act shall not be considered income or resources 

24 for any purpose under any Federal, State, or local laws, 

25 including, but not limited to, laws relating to an income 


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1 tax, or public assistance programs (including, but not lim2 ited to, health care, cash aid, child care, nutrition pro3 grams, and housing assistance) and no participating State 

4 or political subdivision thereof shall decrease any assist5 ance otherwise provided an individual or individuals be6 cause of the receipt of a refund under this Act. 

7 (h) PROGRAM INTEGRITY.—For purposes of ensuring 

8 program integrity and complying with the requirements of 

9 the Improper Payment Information Act of 2002, the Ad10 ministrator shall— 

11 (1) to the maximum extent possible rely on and 

12 coordinate with the quality control sample and re13 view procedures of section 16(c)(2), (3), (4), and (5) 

14 of the Supplemental Nutrition Assistance Program; 

15 and 

16 (2) develop procedures to monitor the compli17 ance with and accuracy of State agencies in pro18 viding forms to household members and the Internal 

19 Revenue Service under subsection (f). 

20 (i) DEFINITIONS.— 

21 (1) ADMINISTRATOR.—The term ‘‘Adminis22 trator’’ means the Administrator of the Environ23 mental Protection Agency or the head of another 

24 agency designated by the Administrator. 


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1 (2) ELECTRONIC BENEFIT TRANSFER SYS2 TEM.—The term ‘‘electronic benefit transfer system’’ 

3 means a system by which household benefits or re4 funds defined under subsection (d) are issued from 

5 and stored in a central databank via electronic ben6 efit transfer cards. 

7 (3) GROSS INCOME.—The term ‘‘gross income’’ 

8 means the gross income of a household that is deter9 mined in accordance with standards and procedures 

10 established under section 5 of the Food and Nutri11 tion Act of 2008 (7 U.S.C. 2014) and its imple12 menting regulations. 

13 (4) HOUSEHOLD.—The term ‘‘household’’ 

14 means— 

15 (A)(i) except as provided in subparagraph 

16 (C), an individual or a group of individuals who 

17 are a household under section 3(n) of the Food 

18 and Nutrition Act of 2008 (7 U.S.C. 2012(n)); 

19 and 

20 (ii) a single individual or married couple 

21 that receive benefits under section 1860D–14 of 

22 the Social Security Act (42 U.S.C. 1395w– 

23 114). 

24 (B) The Administrator shall establish rules 

25 for providing the energy refund in an equitable 


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1 and administratively simple manner to house2 holds where the group of individuals who live 

3 together includes a combination of members de4 scribed in clauses (i) and (ii) of subparagraph 

5 (A), or includes additional members not de6 scribed in clause (i) or clause (ii) of subpara7 graph (A). 

8 (C) The Administrator shall establish rules 

9 regarding the eligibility and delivery of the en10 ergy refund to groups of individuals described 

11 in section 3(n)(4) or (5) of the Food and Nutri12 tion Act of 2008 (7 U.S.C. 2012(n)). 

13 (5) POVERTY LINE.—The term ‘‘poverty line’’ 

14 has the meaning given the term in section 673(2) of 

15 the Community Services Block Grant Act (42 U.S.C. 

16 9902(2)), including any revision required by that 

17 section. 

18 (6) STATE.—The term ‘‘State’’ means the 50 

19 States, the District of Columbia, the Commonwealth 

20 of Puerto Rico, American Samoa, the United States 

21 Virgin Islands, Guam, and the Commonwealth of the 

22 Northern Mariana Islands. 

23 (7) STATE AGENCY.—The term ‘‘State agency’’ 

24 means an agency of State government, including the 

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1 ministration of the 1 or more federally aided public 

2 assistance programs within the State, and in those 

3 States where such assistance programs are operated 

4 on a decentralized basis, the term shall include the 

5 counterpart local agencies administering such pro6 grams. 

7 (8) OTHER TERMS.—Other terms not defined in 

8 this Act shall have the same meaning applied in the 

9 Supplemental Nutrition Assistance Program unless 

10 the Administrator finds for good cause that applica11 tion of a particular definition would be detrimental 

12 to the purposes of the Energy Refund Program. 

13 (j) AUTHORIZATION OF APPROPRIATIONS.—Such 

14 sums as are necessary are hereby appropriated for the En15 ergy Refund Program under this section. 

16 Subtitle D—Exporting Clean 

17 Technology 

18 SEC. 441. FINDINGS AND PURPOSES. 

19 (a) FINDINGS.—Congress finds the following: 

20 (1) Protecting Americans from the impacts of 

21 climate change requires global reductions in green22 house gas emissions. 

23 (2) Although developing countries are histori24 cally least responsible for the cumulative greenhouse 

25 gas emissions that are causing climate change and 


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1 continue to have very low per capita greenhouse gas 

2 emissions, their overall greenhouse gas emissions are 

3 increasing as they seek to grow their economies and 

4 reduce energy poverty for their populations. 

5 (3) Many developing countries lack the financial 

6 and technical resources to adopt clean energy tech7 nologies and absent assistance their greenhouse gas 

8 emissions will continue to increase. 

9 (4) Investments in clean energy technology co10 operation can substantially reduce global greenhouse 

11 gas emissions while providing developing countries 

12 with incentives to adopt policies that will address 

13 competitiveness concerns related to regulation of 

14 United States greenhouse gas emissions. 

15 (5) Investments in clean technology in devel16 oping countries will increase demand for clean en17 ergy products, open up new markets for United 

18 States companies, spur innovation, and lower costs. 

19 (6) Under Article 4 of the United Nations 

20 Framework Convention on Climate Change, devel21 oped country parties, including the United States, 

22 committed to ‘‘take all practicable steps to promote, 

23 facilitate, and finance, as appropriate, the transfer 

24 of, or access to, environmentally sound technologies 

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1 oping country parties, to enable them to implement 

2 the provisions of the Convention’’. 

3 (7) Under the Bali Action Plan, developed 

4 country parties to the United Nations Framework 

5 Convention on Climate Change, including the United 

6 States, committed to ‘‘enhanced action on the provi7 sion of financial resources and investment to support 

8 action on mitigation and adaptation and technology 

9 cooperation,’’ including, inter alia, consideration of 

10 ‘‘improved access to adequate, predictable, and sus11 tainable financial resources and financial and tech12 nical support, and the provision of new and addi13 tional resources, including official and concessional 

14 funding for developing country parties’’. 

15 (b) PURPOSES.—The purposes of this subtitle are— 

16 (1) to provide United States assistance and le17 verage private resources to encourage widespread 

18 implementation, in developing countries, of activities 

19 that reduce, sequester, or avoid greenhouse gas 

20 emissions; and 

21 (2) to provide such assistance in a manner 

22 that— 

23 (A) encourages such countries to adopt 

24 policies and measures, including sector-based 

25 and cross-sector policies and measures, that 


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1 substantially reduce, sequester, or avoid green2 house gas emissions; and 

3 (B) promotes the successful negotiation of 

4 a global agreement to reduce greenhouse gas 

5 emissions under the United Nations Framework 

6 Convention on Climate Change. 

7 SEC. 442. DEFINITIONS. 

8 In this subtitle: 

9 (1) ALLOWANCE.—The term ‘‘allowance’’ 

10 means an emission allowance established under sec11 tion 721 of the Clean Air Act. 

12 (2) APPROPRIATE CONGRESSIONAL COMMIT13 TEES.—The term ‘‘appropriate congressional com14 mittees’’ means— 

15 (A) the Committees on Energy and Com16 merce, Foreign Affairs, and Financial Services 

17 of the House of Representatives; and 

18 (B) the Committees on Environment and 

19 Public Works, Energy and Natural Resources, 

20 and Foreign Relations of the Senate. 

21 (3) CONVENTION.—The term ‘‘Convention’’ 

22 means the United Nations Framework Convention 

23 on Climate Change, done at New York on May 9, 

24 1992, and entered into force on March 21, 1994. 


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1 (4) DEVELOPING COUNTRY.—The term ‘‘devel2 oping country’’ means a country eligible to receive 

3 official development assistance according to the in4 come guidelines of the Development Assistance Com5 mittee of the Organization for Economic Coopera6 tion and Development. 

7 (5) ELIGIBLE COUNTRY.—The term ‘‘eligible 

8 country’’ means a developing country that is deter9 mined by the interagency group under section 444 

10 to be eligible to receive assistance from the Inter11 national Clean Technology Account. 

12 (6) INTERAGENCY GROUP.—The term ‘‘inter13 agency group’’ means the group established by the 

14 President under section 443 to administer distribu15 tions from the International Clean Technology Ac16 count. 

17 (7) INTERNATIONAL CLEAN TECHNOLOGY AC18 COUNT.—The term ‘‘International Clean Technology 

19 Account’’ means the account to which the Adminis20 trator allocates allowances under section 782(o) of 

21 the Clean Air Act. 

22 (8) LEAST DEVELOPED COUNTRY.—The term 

23 ‘‘least developed country’’ means a foreign country 

24 the United Nations has identified as among the least 

25 developed of developing countries. 


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1 (9) QUALIFYING ACTIVITY.—The term ‘‘quali2 fying activity’’ means an activity that meets the cri3 teria in section 445. 

4 (10) QUALIFYING ENTITY.—The term ‘‘quali5 fying entity’’ means a national, regional, or local 

6 government in, or a nongovernmental organization 

7 or private entity located or operating in, an eligible 

8 country. 

9 SEC. 443. GOVERNANCE. 

10 (a) OVERSIGHT.—The Secretary of State, or such 

11 other Federal agency head as the President may des12 ignate, in consultation with the interagency group estab13 lished under subsection (b), shall oversee distributions of 

14 allowances from the International Clean Technology Ac15 count. 

16 (b) INTERAGENCY GROUP.—The President shall es17 tablish an interagency group to administer the Inter18 national Clean Technology Account. The Members of the 

19 interagency group shall include— 

20 (1) the Secretary of State; 

21 (2) the Administrator of the Environmental 

22 Protection Agency; 

23 (3) the Secretary of Energy; 

24 (4) the Secretary of the Treasury; 


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1 (5) the Administrator of the United States 

2 Agency for International Development; and 

3 (6) any other head of a Federal agency or exec4 utive branch appointee that the President may des5 ignate. 

6 (c) CHAIRPERSON.—The Secretary of State shall 

7 serve 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 

11 other Federal, State, or local resources available to carry 

12 out activities that are qualifying activities under this sub13 title. 

14 SEC. 444. DETERMINATION OF ELIGIBLE COUNTRIES. 

15 (a) IN GENERAL.—The interagency group shall de16 termine a country to be an eligible country for the pur17 poses of this subtitle if a country meets the following cri18 teria: 

19 (1) The country is a developing country that— 

20 (A) has entered into an international 

21 agreement to which the United States is a 

22 party, under which such country agrees to take 

23 actions to produce measurable, reportable, and 

24 verifiable greenhouse gas emissions mitigation; 

25 or 


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1 (B) is determined by the interagency group 

2 to have in force national policies and measures 

3 that are capable of producing measurable, re4 portable, and verifiable greenhouse gas emis5 sions mitigation. 

6 (2) The country has developed a nationally ap7 propriate mitigation strategy that seeks to achieve 

8 substantial reductions, sequestration, or avoidance of 

9 greenhouse gas emissions, relative to business-as10 usual levels. 

11 (3) Subject to subsection (b)(1), such other cri12 teria as the President determines will serve the pur13 poses of this subtitle or other United States national 

14 security, foreign policy, environmental, or economic 

15 objectives. 

16 (b) EXCEPTIONS.— 

17 (1) Subsection (a)(3) applies only to bilateral 

18 assistance under section 446(c). 

19 (2) The eligibility criteria in this section do not 

20 apply in the case of least developed countries receiv21 ing assistance under section 445(7) for the purpose 

22 of building capacity to meet such eligibility criteria. 

23 SEC. 445. QUALIFYING ACTIVITIES. 

24 Assistance under this subtitle may be provided only 

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1 cluding building relevant technical and institutional capac2 ity) that contribute to substantial, measurable, reportable, 

3 and verifiable reductions, sequestration, or avoidance of 

4 greenhouse gas emissions including— 

5 (1) deployment of technologies to capture and 

6 sequester carbon dioxide emissions from electric gen7 erating units or large industrial sources (except that 

8 assistance under this subtitle for such deployment 

9 shall be limited to the cost of retrofitting existing fa10 cilities with such technologies or the incremental 

11 cost of purchasing and installing such technologies 

12 at new facilities); 

13 (2) deployment of renewable electricity genera14 tion from wind, solar, sustainably produced biomass, 

15 geothermal, marine, or hydrokinetic sources; 

16 (3) substantial increases in the efficiency of 

17 electricity transmission, distribution, and consump18 tion; 

19 (4) deployment of low- or zero emissions tech20 nologies that are facing financial or other barriers to 

21 their widespread deployment which could be ad22 dressed through support under this subtitle in order 

23 to reduce, sequester, or avoid emission; 

24 (5) reduction in transportation sector emissions 

25 through increased transportation system and vehicle 


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1 efficiency or use of transportation fuels that have 

2 lifecycle greenhouse gas emissions that are substan3 tially lower than those attributable to fossil fuel4 based alternatives; 

5 (6) reduction in black carbon emissions; or 

6 (7) capacity building activities, including— 

7 (A) developing and implementing meth8 odologies and programs for measuring and 

9 quantifying greenhouse gas emissions and 

10 verifying emissions mitigation; 

11 (B) assessing, developing, and imple12 menting technology and policy options for 

13 greenhouse gas emissions mitigation and avoid14 ance of future emissions, including sector and 

15 cross-sector mitigation strategies; and 

16 (C) providing other forms of technical as17 sistance to facilitate the qualification for, and 

18 receipt of, assistance under this Act. 

19 SEC. 446. ASSISTANCE. 

20 (a) IN GENERAL.—The Secretary of State, or such 

21 other Federal agency head as the President may des22 ignate, is authorized to provide assistance, through the 

23 distribution of allowances, from the International Clean 

24 Technology Account for qualifying activities that take 

25 place in eligible countries. 


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1 (b) DISTRIBUTION OF ALLOWANCES.— 

2 (1) IN GENERAL.—The Secretary of State, or 

3 such other Federal agency head as the President 

4 may designate, after consultation with the inter5 agency group, shall distribute allowances from the 

6 International Clean Technology Account— 

7 (A) in the form of bilateral assistance in 

8 accordance with paragraph (4); 

9 (B) to multilateral funds or institutions 

10 pursuant to the Convention or an agreement 

11 negotiated under the Convention; or 

12 (C) through some combination of the 

13 mechanisms identified in subparagraphs (A) 

14 and (B). 

15 (2) GLOBAL ENVIRONMENT FACILITY.—For any 

16 allowances provided to the Global Environment Fa17 cility pursuant to paragraph (1)(B), the President 

18 shall designate the Secretary of the Treasury to dis19 tribute those allowances to the Global Environment 

20 Facility. 

21 (3) DISTRIBUTION THROUGH INTERNATIONAL

22 FUND OR INSTITUTION.—If allowances are distrib23 uted to a multilateral fund or institution, as author24 ized in paragraph (1), the Secretary of State, or 

25 such other Federal agency head as the President 


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1 may designate, shall seek to ensure the establish2 ment and implementation of adequate mechanisms 

3 to— 

4 (A) apply and enforce the criteria for de5 termination of eligible countries and qualifying 

6 activities under sections 444 and 445, respec7 tively; and 

8 (B) require public reporting describing the 

9 process and methodology for selecting the ulti10 mate recipients of assistance and a description 

11 of each activity that received assistance, includ12 ing the amount of obligations and expenditures 

13 for assistance. 

14 (4) BILATERAL ASSISTANCE.— 

15 (A) IN GENERAL.—Bilateral assistance 

16 under paragraph (1) shall be carried out by the 

17 Administrator of the United States Agency for 

18 International Development, in consultation with 

19 the interagency group. 

20 (B) LIMITATIONS.—Not more than 15 per21 cent of allowances made available to carry out 

22 bilateral assistance under this subtitle in any 

23 year shall be distributed to support activities in 

24 any single country. 


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1 (C) SELECTION CRITERIA.—Not later than 

2 2 years after the date of enactment of this sub3 title, the Administrator of the United States 

4 Agency for International Development, after 

5 consultation with the interagency group, shall 

6 develop and publish a set of criteria to be used 

7 in evaluating activities within eligible countries 

8 for bilateral assistance under this subtitle. 

9 (D) CRITERIA REQUIREMENTS.—The cri10 teria under subparagraph (C) shall require 

11 that— 

12 (i) the activity is a qualifying activity; 

13 (ii) the activity will be conducted as 

14 part of an eligible country’s nationally ap15 propriate mitigation strategy or as part of 

16 an eligible country’s actions towards pro17 viding a nationally appropriate mitigation 

18 strategy to reduce, sequester, or avoid 

19 emissions being implemented by the eligi20 ble country; 

21 (iii) the activity will not have adverse 

22 effects on human health, safety, or welfare, 

23 the environment, or natural resources; 


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1 (iv) any technologies deployed through 

2 bilateral assistance under this subtitle will 

3 be properly implemented and maintained; 

4 (v) the activity will not cause any net 

5 loss of United States jobs or displacement 

6 of United States production; 

7 (vi) costs of the activity will be shared 

8 by the host country government, private 

9 sector parties, or a multinational develop10 ment bank, except that this clause does not 

11 apply to least developed countries; and 

12 (vii) the activity meets such other re13 quirements as the interagency group deter14 mines appropriate to further the purposes 

15 of this subtitle. 

16 (E) CRITERIA PREFERENCES.—The cri17 teria under subparagraph (C) shall give pref18 erence to activities that— 

19 (i) promise to achieve large-scale 

20 greenhouse gas reductions, sequestration, 

21 or avoidance at a national, sectoral or 

22 cross-sectoral level; 

23 (ii) have the potential to catalyze a 

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1 spread deployment of low- or zero-carbon 

2 energy technologies; 

3 (iii) build technical and institutional 

4 capacity and other activities that are un5 likely to be attractive to private sector 

6 funding; or 

7 (iv) maximize opportunities to lever8 age other sources of assistance and cata9 lyze private-sector investment. 

10 (c) MONITORING, EVALUATION, AND ENFORCE11 MENT.—The Secretary of State, or such other Federal 

12 agency head as the President may designate, in consulta13 tion with the interagency group, shall establish and imple14 ment a system to monitor and evaluate the performance 

15 of activities receiving assistance under this subtitle. The 

16 Secretary of State, or such other Federal agency head as 

17 the President may designate, shall have the authority to 

18 suspend or terminate assistance in whole or in part for 

19 an activity if it is determined that the activity is not oper20 ating in compliance with the approved proposal. 

21 (d) COORDINATION WITH U.S. FOREIGN ASSIST22 ANCE.—Subject to the direction of the President, the Sec23 retary of State shall, to the extent practicable, seek to 

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1 ment, poverty alleviation, or natural resource management 

2 objectives and initiatives in the recipient country. 

3 (e) ANNUAL REPORTS.—Not later than March 1, 

4 2012, and annually thereafter, the President shall submit 

5 to the appropriate congressional committees a report on 

6 the assistance provided under this subtitle during the prior 

7 fiscal year. Such report shall include— 

8 (1) a description of the amount and value of al9 lowances distributed during the prior fiscal year; 

10 (2) a description of each activity that received 

11 assistance during the prior fiscal year, and a de12 scription of the anticipated and actual outcomes; 

13 (3) an assessment of any adverse effects to 

14 human health, safety, or welfare, the environment, 

15 or natural resources as a result of activities sup16 ported under this subtitle; 

17 (4) an assessment of the success of the assist18 ance provided under this subtitle to improving the 

19 technical and institutional capacity to implement 

20 substantial emissions reductions; and 

21 (5) an estimate of the greenhouse gas emissions 

22 reductions, sequestration, or avoidance achieved by 

23 assistance provided under this subtitle during the 

24 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 

9 States Global Change Research Program a National Cli10 mate Change Adaptation Program for the purpose of in11 creasing the overall effectiveness of Federal climate 

12 change adaptation 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, 

18 data, forecasts, and warnings at national and regional 

19 scales, and to distribute information related to climate im20 pacts to State, local, and tribal governments and the pub21 lic to facilitate the development and implementation of 

22 strategies to reduce society’s vulnerability to climate varia23 bility and 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 

5 30, 2012, and annually thereafter through 2050, the 

6 Administrator shall distribute allowances allocated 

7 for purposes of this subpart pursuant to section 

8 ø782¿ of the Clean Air Act ratably among the State 

9 governments 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 subparaVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00845 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 graph (A) would be less than 0.8, then the allo2 cation factor for such State shall be 0.8. 

3 (C) PER CAPITA INCOME.—For purposes 

4 of this paragraph, per capita income shall be— 

5 (i) determined at 2-year intervals; and 

6 (ii) equal to the average of the annual 

7 per capita incomes for the most recent pe8 riod of 3 consecutive years for which satis9 factory data are available from the Depart10 ment of Commerce at the time such deter11 mination is made. 

12 (b) SALE OF ALLOWANCES.—Each State receiving 

13 emission allowances under this section shall sell such al14 lowances within 1 year of receipt, either directly or 

15 through consignment to the Administrator for auction. 

16 States shall deposit the proceeds of such sales within the 

17 State Energy and Environment Development (SEED) 

18 Fund established pursuant to section 131 of the American 

19 Clean Energy and Security Act of 2009. Emission allow20 ances distributed under this section that are not sold with21 in 1 year of receipt by a State shall be returned to the 

22 Administrator, who shall distribute such allowances to the 

23 remaining States ratably in accordance with the formula 

24 in subsection (a). 


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1 (c) USE OF PROCEEDS.—States shall, in accordance 

2 with a State climate adaptation plan approved pursuant 

3 to subsection (d), use the proceeds of sales of emission 

4 allowances distributed under this section exclusively for 

5 the implementation of projects, programs, or measures to 

6 build resilience to the impacts of climate change, includ7 ing— 

8 (1) extreme weather events such as flooding 

9 and tropical cyclones; 

10 (2) more frequent heavy precipitation events; 

11 (3) water scarcity and adverse impacts on water 

12 quality; 

13 (4) stronger and longer heat waves; 

14 (5) more frequent and severe droughts; 

15 (6) rises in sea level; 

16 (7) ecosystem disruption; 

17 (8) increased air pollution; and 

18 (9) effects on public health. 

19 (d) STATE CLIMATE ADAPTATION PLANS.— 

20 (1) IN GENERAL.—Not later than 2 years after 

21 the date of enactment of this Act, the Administrator, 

22 or such other Federal agency head or heads as the 

23 President may designate, shall promulgate regula24 tions establishing requirements for submission and 

25 approval of State climate adaptation plans under 


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1 this section. Receipt of emission allowances pursuant 

2 to this section shall be contingent on approval of a 

3 State climate adaptation plan meeting the require4 ments of such guidelines. 

5 (2) REQUIREMENTS.—Regulations promulgated 

6 under this subsection shall require, at minimum, 

7 that— 

8 (A) State climate adaptation plans assess 

9 and prioritize the State’s vulnerability to a 

10 broad range of impacts of climate change, based 

11 on the best available science; 

12 (B) State climate adaptation plans identify 

13 and prioritize specific cost-effective projects, 

14 programs, and measures to build resilience to 

15 predicted impacts of climate change; and 

16 (C) in order to be eligible to receive emis17 sion allowances under this section, a State shall 

18 submit a revised State climate adaptation plan 

19 for approval not less frequently than every 5 

20 years. 

21 (3) COORDINATION WITH PRIOR PLANNING EF22 FORTS.—In promulgating regulations under this 

23 subsection, the Administrator, or such other Federal 

24 agency head or heads as the President may des25 ignate, shall draw upon lessons learned and best 


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1 practices from preexisting State climate adaptation 

2 planning efforts and shall seek to avoid duplication 

3 of such efforts. 

4 (e) REPORTING.—Each State receiving emission al5 lowances under this section shall submit to the Adminis6 trator, or such other Federal agency head or heads as the 

7 President may designate, within 12 months after each re8 ceipt of such allowances and once every 2 years thereafter 

9 until the proceeds from the sale of emission allowances 

10 received under this section are fully expended, a report 

11 that— 

12 (1) provides a full accounting for the State’s 

13 use of proceeds of sales of emission allowances dis14 tributed under this section, including a description 

15 of the projects, programs, or measures funded 

16 through such proceeds; and 

17 (2) includes a report prepared by an inde18 pendent third party, in accordance with such regula19 tions as are promulgated by the Administrator or 

20 such other Federal agency head or heads as the 

21 President may designate, evaluating the performance 

22 of the projects, programs, or measures funded under 

23 this section. 

24 (f) ENFORCEMENT.—If the Administrator, or such 

25 other Federal agency head or heads as the President may 


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1 designate, determines that a State is not in compliance 

2 with this section, the Administrator may withhold a por3 tion of the allowances, the value of which is equal to up 

4 to twice the value of the allowances that the State failed 

5 to use in accordance with the requirements of this section, 

6 that such State would otherwise be eligible to receive 

7 under this section in 1 or more later years. Allowances 

8 withheld pursuant to this subsection shall be distributed 

9 among the remaining States ratably in accordance with 

10 the formula in subsection (a). 

11 Subpart B—Public Health and Climate Change 

12 SEC. 461. SENSE OF CONGRESS ON PUBLIC HEALTH AND 

13 CLIMATE CHANGE. 

14 It is the sense of the Congress that the Federal Gov15 ernment, in cooperation with international, State, tribal, 

16 and local governments, concerned public and private orga17 nizations, and citizens, should use all practicable means 

18 and measures— 

19 (1) to assist the efforts of public health and 

20 health care professionals, first responders, States, 

21 tribes, municipalities, and local communities to in22 corporate measures to prepare health systems to re23 spond to the impacts of climate change; 

24 (2) to ensure— 


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1 (A) that the Nation’s health professionals 

2 have sufficient information to prepare for and 

3 respond to the adverse health impacts of cli4 mate change; 

5 (B) the utility and value of scientific re6 search in advancing understanding of— 

7 (i) the health impacts of climate 

8 change; and 

9 (ii) strategies to prepare for and re10 spond to the health impacts of climate 

11 change; 

12 (C) the identification of communities vul13 nerable to the health effects of climate change 

14 and the development of strategic response plans 

15 to be carried out by health professionals for 

16 those communities; 

17 (D) the improvement of health status and 

18 health equity through efforts to prepare for and 

19 respond to climate change; and 

20 (E) the inclusion of health policy in the de21 velopment of climate change responses; 

22 (3) to encourage further research, interdiscipli23 nary partnership, and collaboration among stake24 holders in order to— 


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1 (A) understand and monitor the health im2 pacts of climate change; and 

3 (B) improve public health knowledge and 

4 response strategies to climate change; 

5 (4) to enhance preparedness activities, and pub6 lic health infrastructure, relating to climate change 

7 and health; 

8 (5) to encourage each and every American to 

9 learn about the impacts of climate change on health; 

10 and 

11 (6) to assist the efforts of developing nations to 

12 incorporate measures to prepare health systems to 

13 respond to the impacts of climate change. 

14 SEC. 462. RELATIONSHIP TO OTHER LAWS. 

15 Nothing in this subpart in any manner limits the au16 thority provided to or responsibility conferred on any Fed17 eral department or agency by any provision of any law 

18 (including regulations) or authorizes any violation of any 

19 provision of any law (including regulations), including any 

20 health, energy, environmental, transportation, or any 

21 other law or regulation. 

22 SEC. 463. NATIONAL STRATEGIC ACTION PLAN. 

23 (a) REQUIREMENT.— 

24 (1) IN GENERAL.—The Secretary of Health and 

25 Human Services, within 2 years after the date of the 


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1 enactment of this Act, on the basis of the best avail2 able science, and in consultation pursuant to para3 graph (2), shall publish a strategic action plan to as4 sist health professionals in preparing for and re5 sponding to the impacts of climate change on public 

6 health in the United States and other nations, par7 ticularly developing nations. 

8 (2) CONSULTATION.—In developing or making 

9 any revision to the national strategic action plan, the 

10 Secretary shall— 

11 (A) consult with the Director of the Cen12 ters for Disease Control and Prevention, the 

13 Administrator of the Environmental Protection 

14 Agency, the Director of the National Institutes 

15 of Health, the Secretary of Energy, other ap16 propriate Federal agencies, Indian tribes, State 

17 and local governments, public health organiza18 tions, scientists, and other interested stake19 holders; and 

20 (B) provide opportunity for public input. 

21 (b) CONTENTS.— 

22 (1) IN GENERAL.—The Secretary, acting 

23 through the Director of the Centers for Disease 

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1 paring for and responding effectively and efficiently 

2 to the health effects of climate change through 

3 measures including— 

4 (A) developing, improving, integrating, and 

5 maintaining domestic and international disease 

6 surveillance systems and monitoring capacity to 

7 respond to health-related effects of climate 

8 change, including on topics addressing— 

9 (i) water, food, and vector borne infec10 tious diseases and climate change; 

11 (ii) pulmonary effects, including re12 sponses to aeroallergens; 

13 (iii) cardiovascular effects, including 

14 impacts of temperature extremes; 

15 (iv) air pollution health effects, includ16 ing heightened sensitivity to air pollution; 

17 (v) hazardous algal blooms; 

18 (vi) mental and behavioral health im19 pacts of climate change; 

20 (vii) the health of refugees, displaced 

21 persons, and vulnerable communities; 

22 (viii) the implications for communities 

23 vulnerable to health effects of climate 

24 change, as well as strategies for responding 


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1 to climate change within these commu2 nities; and 

3 (ix) local and community-based health 

4 interventions for climate-related health im5 pacts; 

6 (B) creating tools for predicting and moni7 toring the public health effects of climate 

8 change on the international, national, regional, 

9 State, and local levels, and providing technical 

10 support to assist in their implementation; 

11 (C) developing public health communica12 tions strategies and interventions for extreme 

13 weather events and disaster response situations; 

14 (D) identifying and prioritizing commu15 nities and populations vulnerable to the health 

16 effects of climate change, and determining ac17 tions and communication strategies that should 

18 be taken to inform and protect these commu19 nities and populations from the health effects of 

20 climate change; 

21 (E) developing health communication, pub22 lic education, and outreach programs aimed at 

23 public health and health care professionals, as 

24 well as the general public, to promote prepared25 ness and response strategies relating to climate 


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1 change and public health, including the identi2 fication of greenhouse gas reduction behaviors 

3 that are health-promoting; 

4 (F) developing academic and regional cen5 ters of excellence devoted to— 

6 (i) researching relationships between 

7 climate change and health; 

8 (ii) expanding and training the public 

9 health workforce to strengthen the capacity 

10 of such workforce to respond to and pre11 pare for the health effects of climate 

12 change; 

13 (iii) creating and supporting academic 

14 fellowships focusing on the health effects 

15 of climate change; and 

16 (iv) training senior health ministry of17 ficials from developing nations to strength18 en the capacity of such nations to— 

19 (I) prepare for and respond to 

20 the health effects of climate change; 

21 and 

22 (II) build an international net23 work of public health professionals 

24 with the necessary climate change 

25 knowledge base; 


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1 (G) using techniques, including health im2 pact assessments, to assess various climate 

3 change public health preparedness and response 

4 strategies on international, national, State, re5 gional, tribal, and local levels, and make rec6 ommendations as to those strategies that best 

7 protect the public health; 

8 (H)(i) assisting in the development, imple9 mentation, and support of State, regional, trib10 al, and local preparedness, communication, and 

11 response plans (including with respect to the 

12 health departments of such entities) to antici13 pate and reduce the health threats of climate 

14 change; and 

15 (ii) pursuing collaborative efforts to de16 velop, integrate, and implement such plans; 

17 (I) creating a program to advance research 

18 as it relates to the effects of climate change on 

19 public health across Federal agencies, including 

20 research to— 

21 (i) identify and assess climate change 

22 health effects preparedness and response 

23 strategies; 

24 (ii) prioritize critical public health in25 frastructure projects related to potential 


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1 climate change impacts that affect public 

2 health; and 

3 (iii) coordinate preparedness for cli4 mate change health impacts, including the 

5 development of modeling and forecasting 

6 tools; 

7 (J) providing technical assistance for the 

8 development, implementation, and support of 

9 preparedness and response plans to anticipate 

10 and reduce the health threats of climate change 

11 in developing nations; and 

12 (K) carrying out other activities deter13 mined appropriate by the Secretary to plan for 

14 and respond to the impacts of climate change 

15 on public health. 

16 (c) REVISION.—The Secretary shall revise the na17 tional strategic action plan not later than July 1, 2014, 

18 and every 4 years thereafter, to reflect new information 

19 collected pursuant to implementation of the national stra20 tegic action plan and otherwise, including information 

21 on— 

22 (1) the status of critical environmental health 

23 parameters and related human health impacts; 

24 (2) the impacts of climate change on public 

25 health; and 


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1 (3) advances in the development of strategies 

2 for preparing for and responding to the impacts of 

3 climate change on public health. 

4 (d) IMPLEMENTATION.— 

5 (1) IMPLEMENTATION THROUGH HHS.—The 

6 Secretary shall exercise the Secretary’s authority 

7 under this subpart and other provisions of Federal 

8 law to achieve the goals and measures of the na9 tional strategic action plan. 

10 (2) OTHER PUBLIC HEALTH PROGRAMS AND

11 INITIATIVES.—The Secretary and Federal officials of 

12 other relevant Federal agencies shall administer 

13 public health programs and initiatives authorized by 

14 provisions of law other than this subpart, subject to 

15 the requirements of such statutes, in a manner de16 signed to achieve the goals of the national strategic 

17 action plan. 

18 (3) CDC.—In furtherance of the national stra19 tegic action plan, the Secretary, acting through the 

20 Director of the Centers for Disease Control and Pre21 vention and the head of any other appropriate Fed22 eral agency, shall— 

23 (A) conduct scientific research to assist 

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1 sponding to the impacts of climate change on 

2 public health; 

3 (B) provide funding for— 

4 (i) research on the health effects of 

5 climate change; and 

6 (ii) preparedness planning on the 

7 international, national, State, regional, and 

8 local levels to respond to or reduce the bur9 den of health effects of climate change; 

10 and 

11 (C) carry out other activities determined 

12 appropriate by the Director or the head of such 

13 agency to prepare for and respond to the im14 pacts of climate change on public health. 

15 SEC. 464. ADVISORY BOARD. 

16 (a) ESTABLISHMENT.—The Secretary shall establish 

17 a permanent science advisory board comprised of not less 

18 than 10 and not more than 20 members. 

19 (b) APPOINTMENT OF MEMBERS.—The Secretary 

20 shall appoint the members of the science advisory board 

21 from among individuals— 

22 (1) who have expertise in public health and 

23 human services, climate change, and other relevant 

24 disciplines; and 


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(2) at least 1 1 ⁄2 of whom are recommended by 

2 the President of the National Academy of Sciences. 

3 (c) FUNCTIONS.—The science advisory board shall— 

4 (1) provide scientific and technical advice and 

5 recommendations to the Secretary on the domestic 

6 and international impacts of climate change on pub7 lic health, populations and regions particularly vul8 nerable to the effects of climate change, and strate9 gies and mechanisms to prepare for and respond to 

10 the impacts of climate change on public health; and 

11 (2) advise the Secretary regarding the best 

12 science available for purposes of issuing the national 

13 strategic action plan. 

14 SEC. 465. REPORTS. 

15 (a) NEEDS ASSESSMENT.— 

16 (1) IN GENERAL.—The Secretary shall seek to 

17 enter into, by not later than 6 months after the date 

18 of the enactment of this Act, an agreement with the 

19 National Research Council and the Institute of Med20 icine to complete a report that— 

21 (A) assesses the needs for health profes22 sionals to prepare for and respond to climate 

23 change impacts on public health; and 

24 (B) recommends programs to meet those 

25 needs. 


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1 (2) SUBMISSION.—The agreement under para2 graph (1) shall require the completed report to be 

3 submitted to the Congress and the Secretary and 

4 made publicly available not later than 1 year after 

5 the date of the agreement. 

6 (b) CLIMATE CHANGE HEALTH PROTECTION AND

7 PROMOTION REPORTS.— 

8 (1) IN GENERAL.—The Secretary, in consulta9 tion with the advisory board established under sec10 tion 464, shall ensure the issuance of reports to aid 

11 health professionals in preparing for and responding 

12 to the adverse health effects of climate change 

13 that— 

14 (A) review scientific developments on 

15 health impacts of climate change; and 

16 (B) recommend changes to the national 

17 strategic action plan. 

18 (2) SUBMISSION.—The Secretary shall submit 

19 the reports required by paragraph (1) to the Con20 gress and make such reports publicly available not 

21 later than July 1, 2013, and every 4 years there22 after. 

23 SEC. 466. DEFINITIONS. 

24 In this subpart: 


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1 (1) HEALTH IMPACT ASSESSMENT.—The term 

2 ‘‘health impact assessment’’ means a combination of 

3 procedures, methods, and tools by which a policy, 

4 program, or project may be judged as to its potential 

5 effects on the health of a population, and the dis6 tribution of those effects within the population. 

7 (2) NATIONAL STRATEGIC ACTION PLAN.—The 

8 term ‘‘national strategic action plan’’ means the 

9 plan issued and revised under section 463. 

10 (3) SECRETARY.—Unless otherwise specified, 

11 the term ‘‘Secretary’’ means the Secretary of Health 

12 and Human Services. 

13 SEC. 467. CLIMATE CHANGE HEALTH PROTECTION AND 

14 PROMOTION FUND. 

15 (a) ESTABLISHMENT OF FUND.—There is hereby es16 tablished in the Treasury a separate account that shall 

17 be known as the Climate Change Health Protection and 

18 Promotion Fund. 

19 (b) AVAILABILITY OF AMOUNTS.—All amounts de20 posited into the Climate Change Health Protection and 

21 Promotion Fund shall be available to the Secretary to 

22 carry out this subpart subject to further appropriation. 

23 (c) DISTRIBUTION OF FUNDS BY HHS.—In carrying 

24 out this subpart, the Secretary may make funds deposited 


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1 in the Climate Change Health Protection and Promotion 

2 Fund available to— 

3 (1) other departments, agencies, and offices of 

4 the Federal Government; 

5 (2) foreign, State, tribal, and local govern6 ments; and 

7 (3) such other entities as the Secretary deter8 mines appropriate. 

9 (d) SUPPLEMENT, NOT REPLACE.—It is the intent 

10 of Congress that funds made available to carry out this 

11 subpart should be used to supplement, and not replace, 

12 existing sources of funding for public health. 

13 Subpart C—Natural Resource Adaptation 

14 SEC. 471. PURPOSES. 

15 The purposes of this subpart are to— 

16 (1) establish an integrated Federal program to 

17 protect, restore, and conserve the Nation’s natural 

18 resources in response to the threats of climate 

19 change and ocean acidification; and 

20 (2) provide financial support and incentives for 

21 programs, strategies, and activities that protect, re22 store, and conserve the Nation’s natural resources in 

23 response to the threats of climate change and ocean 

24 acidification. 


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1 SEC. 472. NATURAL RESOURCES CLIMATE CHANGE ADAP2 TATION POLICY. 

3 It is the policy of the Federal Government, in co4 operation with State and local governments, Indian tribes, 

5 and other interested stakeholders to use all practicable 

6 means and measures to protect, restore, and conserve nat7 ural resources to enable them to become more resilient, 

8 adapt to, and withstand the impacts of climate change and 

9 ocean acidification. 

10 SEC. 473. DEFINITIONS. 

11 In this subpart: 

12 (1) COASTAL STATE.—The term ‘‘coastal 

13 State’’ has the meaning given the term in section 

14 304 of the Coastal Zone Management Act of 1972 

15 (16 U.S.C. 1453). 

16 (2) CORRIDORS.—The term ‘‘corridors’’ means 

17 areas that provide connectivity, over different time 

18 scales (including seasonal or longer), of habitat or 

19 potential habitat and that facilitate the ability of ter20 restrial, marine, estuarine, and freshwater fish, wild21 life, or plants to move within a landscape as needed 

22 for migration, gene flow, or dispersal, or in response 

23 to the impacts of climate change and ocean acidifica24 tion or other impacts. 

25 (3) ECOLOGICAL PROCESSES.—The term ‘‘eco26 logical processes’’ means biological, chemical, or 


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1 physical interaction between the biotic and abiotic 

2 components of an ecosystem and includes— 

3 (A) nutrient cycling; 

4 (B) pollination; 

5 (C) predator-prey relationships; 

6 (D) soil formation; 

7 (E) gene flow; 

8 (F) disease epizootiology; 

9 (G) larval dispersal and settlement; 

10 (H) hydrological cycling; 

11 (I) decomposition; and 

12 (J) disturbance regimes such as fire and 

13 flooding. 

14 (4) HABITAT.—The term ‘‘habitat’’ means the 

15 physical, chemical, and biological properties that are 

16 used by fish, wildlife, or plants for growth, reproduc17 tion, survival, food, water, and cover, on a tract of 

18 land, in a body of water, or in an area or region. 

19 (5) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 

20 has the meaning given the term in section 4 of the 

21 Indian Self-Determination and Education Assistance 

22 Act (25 U.S.C. 450b). 

23 (6) NATURAL RESOURCES.—The term ‘‘natural 

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1 rine, and marine fish, wildlife, plants, land, water, 

2 habitats, and ecosystems of the United States. 

3 (7) NATURAL RESOURCES ADAPTATION.—The 

4 term ‘‘natural resources adaptation’’ means the pro5 tection, restoration, and conservation of natural re6 sources to enable them to become more resilient, 

7 adapt to, and withstand the impacts of climate 

8 change and ocean acidification. 

9 (8) RESILIENCE.—Each of the terms ‘‘resil10 ience’’ and ‘‘resilient’’ means the ability to resist or 

11 recover from disturbance and preserve diversity, pro12 ductivity, and sustainability. 

13 (9) STATE.—The term ‘‘State’’ means— 

14 (A) a State of the United States; 

15 (B) the District of Columbia; and 

16 (C) the Commonwealth of Puerto Rico, 

17 Guam, the United States Virgin Islands, the 

18 Northern Mariana Islands, and American 

19 Samoa. 

20 SEC. 474. COUNCIL ON ENVIRONMENTAL QUALITY. 

21 The Chair of the Council on Environmental Quality 

22 shall— 

23 (1) advise the President on implementation and 

24 development of— 


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1 (A) a Natural Resources Climate Change 

2 Adaptation Strategy required under section 

3 476; and 

4 (B) Federal natural resource agency adap5 tation plans required under section 478; 

6 (2) serve as the Chair of the Natural Resources 

7 Climate Change Adaptation Panel established under 

8 section 475; and 

9 (3) coordinate Federal agency strategies, plans, 

10 programs, and activities related to protecting, restor11 ing, and maintaining natural resources to become 

12 more resilient, adapt to, and withstand the impacts 

13 of climate change and ocean acidification. 

14 SEC. 475. NATURAL RESOURCES CLIMATE CHANGE ADAP15 TATION PANEL. 

16 (a) ESTABLISHMENT.—Not later than 90 days after 

17 the date of the enactment of this subpart, the President 

18 shall establish a Natural Resources Climate Change Adap19 tation Panel, consisting of— 

20 (1) the head, or their designee, of each of— 

21 (A) the National Oceanic and Atmospheric 

22 Administration; 

23 (B) the Forest Service; 

24 (C) the National Park Service; 


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1 (D) the United States Fish and Wildlife 

2 Service; 

3 (E) the Bureau of Land Management; 

4 (F) the United States Geological Survey; 

5 (G) the Bureau of Reclamation; 

6 (H) the Bureau of Indian Affairs; 

7 (I) the Environmental Protection Agency; 

8 and 

9 (J) the Army Corps of Engineers; 

10 (2) the Chair of the Council on Environmental 

11 Quality; and 

12 (3) the heads of such other Federal agencies or 

13 departments with jurisdiction over natural resources 

14 of the United States, as determined by the Presi15 dent. 

16 (b) FUNCTIONS.—The Panel shall serve as a forum 

17 for interagency consultation on and the coordination of the 

18 development and implementation of a national Natural 

19 Resources Climate Change Adaptation Strategy required 

20 under section 476. 

21 (c) CHAIR.—The Chair of the Council on Environ22 mental Quality shall serve as the Chair of the Panel. 


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1 SEC. 476. NATURAL RESOURCES CLIMATE CHANGE ADAP2 TATION STRATEGY. 

3 (a) IN GENERAL.—Not later than one year after the 

4 date of the enactment of this subpart, the President, 

5 through the Natural Resources Climate Change Adapta6 tion Panel established under section 475, shall develop a 

7 Natural Resources Climate Change Adaptation Strategy 

8 to protect, restore, and conserve natural resources to en9 able them to become more resilient, adapt to, and with10 stand the impacts of climate change and ocean acidifica11 tion and to identify opportunities to mitigate those im12 pacts. 

13 (b) DEVELOPMENT AND REVISION.—In developing 

14 and revising the Strategy, the Panel shall— 

15 (1) base the strategy on the best available 

16 science; 

17 (2) develop the strategy in close cooperation 

18 with States and Indian tribes; 

19 (3) coordinate with other Federal agencies as 

20 appropriate; 

21 (4) consult with local governments, conservation 

22 organizations, scientists, and other interested stake23 holders; 

24 (5) provide public notice and opportunity for 

25 comment; and 


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1 (6) review and revise the Strategy every 5 years 

2 to incorporate new information regarding the im3 pacts of climate change and ocean acidification on 

4 natural resources and advances in the development 

5 of strategies for becoming more resilient and adapt6 ing to those impacts. 

7 (c) CONTENTS.—The National Resources Adaptation 

8 Strategy shall include— 

9 (1) an assessment of the vulnerability of nat10 ural resources to climate change and ocean acidifica11 tion, including the short-term, medium-term, long12 term, cumulative, and synergistic impacts; 

13 (2) a description of current research, observa14 tion, and monitoring activities at the Federal, State, 

15 tribal, and local level related to the impacts of cli16 mate change and ocean acidification on natural re17 sources, as well as identification of research and 

18 data needs and priorities; 

19 (3) identification of natural resources that are 

20 likely to have the greatest need for protection, res21 toration, and conservation because of the adverse ef22 fects of climate change and ocean acidification; 

23 (4) specific protocols for integrating climate 

24 change and ocean acidification adaptation strategies 

25 and activities into the conservation and management 


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1 of natural resources by Federal departments and 

2 agencies to ensure consistency across agency juris3 dictions and resources; 

4 (5) specific actions that Federal departments 

5 and agencies shall take to protect, conserve, and re6 store natural resources to become more resilient, 

7 adapt to, and withstand the impacts of climate 

8 change and ocean acidification, including a timeline 

9 to implement those actions; 

10 (6) specific mechanisms for ensuring commu11 nication and coordination among Federal depart12 ments and agencies, and between Federal depart13 ments and agencies and State natural resource agen14 cies, United States territories, Indian tribes, private 

15 landowners, conservation organizations, and other 

16 nations that share jurisdiction over natural resources 

17 with the United States; 

18 (7) specific actions to develop and implement 

19 consistent natural resources inventory and moni20 toring protocols through interagency coordination 

21 and collaboration; and 

22 (8) a process for guiding the development of de23 tailed agency- and department-specific adaptation 

24 plans required under section 478 to address the im25 pacts of climate change and ocean acidification on 


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1 the natural resources in the jurisdiction of each 

2 agency. 

3 (d) IMPLEMENTATION.—Consistent with its authori4 ties under other laws and with Federal trust responsibil5 ities with respect to Indian lands, each Federal depart6 ment or agency with representation on the National Re7 sources Climate Change Adaptation Panel shall consider 

8 the impacts of climate change and ocean acidification and 

9 integrate the elements of the strategy into agency plans, 

10 environmental reviews, programs, and activities related to 

11 the conservation, restoration, and management of natural 

12 resources. 

13 SEC. 477. NATURAL RESOURCES ADAPTATION SCIENCE 

14 AND INFORMATION. 

15 (a) COORDINATION.—Not later than 90 days after 

16 the date of the enactment of this subpart, the Secretary 

17 of Commerce, acting through the Administrator of the Na18 tional Oceanic and Atmospheric Administration, and the 

19 Secretary of the Interior, acting through the Director of 

20 the United States Geological Survey, shall establish a co21 ordinated process for developing and providing science and 

22 information needed to assess and address the impacts of 

23 climate change and ocean acidification on natural re24 sources. The process shall be led by the National Climate 

25 Change and Wildlife Science Center established within the 


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1 United States Geological Survey under subsection (d) and 

2 the National Climate Service of the National Oceanic and 

3 Atmospheric Administration. 

4 (b) FUNCTIONS.—The Secretaries shall ensure that 

5 such process avoids duplication and that the National Oce6 anic and Atmospheric Administration and the United 

7 States Geological Survey shall— 

8 (1) provide technical assistance to Federal de9 partments and agencies, State and local govern10 ments, Indian tribes, and interested private land11 owners in their efforts to assess and address the im12 pacts of climate change and ocean acidification on 

13 natural resources; 

14 (2) conduct and sponsor research and provide 

15 Federal departments and agencies, State and local 

16 governments, Indian tribes, and interested private 

17 landowners with research products, decision and 

18 monitoring tools and information, to develop strate19 gies for assisting natural resources to become more 

20 resilient, adapt to, and withstand the impacts of cli21 mate change and ocean acidification; and 

22 (3) assist Federal departments and agencies in 

23 the development of the adaptation plans required 

24 under section 478. 


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1 (c) SURVEY.—Not later than one year after the date 

2 of enactment of this subpart and every 5 years thereafter, 

3 the Secretary of Commerce and the Secretary of the Inte4 rior shall undertake a climate change and ocean acidifica5 tion impact survey that— 

6 (1) identifies natural resources considered likely 

7 to be adversely affected by climate change and ocean 

8 acidification; 

9 (2) includes baseline monitoring and ongoing 

10 trend analysis; 

11 (3) uses a stakeholder process to identify and 

12 prioritize needed monitoring and research that is of 

13 greatest relevance to the ongoing needs of natural 

14 resource managers to address the impacts of climate 

15 change and ocean acidification; and 

16 (4) identifies decision tools necessary to develop 

17 strategies for assisting natural resources to become 

18 more resilient and adapt to and withstand the im19 pacts of climate change and ocean acidification. 

20 (d) NATIONAL CLIMATE CHANGE AND WILDLIFE

21 SCIENCE CENTER.— 

22 (1) ESTABLISHMENT.—The Secretary of the In23 terior shall establish the National Climate Change 

24 and Wildlife Science Center within the United States 

25 Geological Survey. 


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1 (2) FUNCTIONS.—The Center shall, in collabo2 ration with Federal and State natural resources 

3 agencies and departments, Indian tribes, univer4 sities, and other partner organizations— 

5 (A) assess and synthesize current physical 

6 and biological knowledge and prioritize sci7 entific gaps in such knowledge in order to fore8 cast the ecological impacts of climate change on 

9 fish and wildlife at the ecosystem, habitat, com10 munity, population, and species levels; 

11 (B) develop and improve tools to identify, 

12 evaluate, and, where appropriate, link scientific 

13 approaches and models for forecasting the im14 pacts of climate change and adaptation on fish, 

15 wildlife, plants, and their habitats, including 

16 monitoring, predictive models, vulnerability 

17 analyses, risk assessments, and decision support 

18 systems to help managers make informed deci19 sions; 

20 (C) develop and evaluate tools to adapt21 ively manage and monitor the effects of climate 

22 change on fish and wildlife at national, regional, 

23 and local scales; and 

24 (D) develop capacities for sharing stand25 ardized data and the synthesis of such data. 


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1 (e) SCIENCE ADVISORY BOARD.— 

2 (1) ESTABLISHMENT.—Not later than 180 days 

3 after the date of enactment of this subpart, the Sec4 retary of Commerce and the Secretary of the Inte5 rior shall establish and appoint the members of a 

6 Science Advisory Board, to be comprised of not 

7 fewer than 10 and not more than 20 members— 

8 (A) who have expertise in fish, wildlife, 

9 plant, aquatic, and coastal and marine biology, 

10 ecology, climate change, ocean acidification, and 

11 other relevant scientific disciplines; 

12 (B) who represent a balanced membership 

13 among Federal, State, Indian tribes, and local 

14 representatives, universities, and conservation 

15 organizations; and 

(C) at least 1 16 ⁄2 of whom are recommended 

17 by the President of the National Academy of 

18 Sciences. 

19 (2) DUTIES.—The Science Advisory Board 

20 shall— 

21 (A) advise the Secretaries on the state-of22 the-science regarding the impacts of climate 

23 change and ocean acidification on natural re24 sources and scientific strategies and mecha25 nisms for protecting, restoring, and conserving 


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1 natural resources to enable them to become 

2 more resilient, adapt to, and withstand the im3 pacts of climate change and ocean acidification; 

4 and 

5 (B) identify and recommend priorities for 

6 ongoing research needs on such issues. 

7 (3) COLLABORATION.—The Science Advisory 

8 Board shall collaborate with other climate change 

9 and ecosystem research entities in other Federal 

10 agencies and departments. 

11 (4) AVAILABILITY TO THE PUBLIC.—The advice 

12 and recommendations of the Science Advisory Board 

13 shall be made available to the public. 

14 SEC. 478. FEDERAL NATURAL RESOURCE AGENCY ADAPTA15 TION PLANS. 

16 (a) DEVELOPMENT.—Not later than 1 year after the 

17 date of the development of a Natural Resources Climate 

18 Change Adaptation Strategy under section 476, each de19 partment or agency that has a representative on the Nat20 ural Resources Climate Change Adaptation Panel estab21 lished under section 475 shall— 

22 (1) complete an adaptation plan for that de23 partment or agency, respectively, implementing the 

24 Natural Resources Climate Change Adaptation 

25 Strategy under section 476 and consistent with the 


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1 Natural Resources Climate Change Adaptation Pol2 icy under section 472, detailing the department’s or 

3 agency’s current and projected efforts to address the 

4 potential impacts of climate change and ocean acidi5 fication on natural resources within the depart6 ment’s or agency’s jurisdiction and necessary addi7 tional actions, including a timeline for implementa8 tion of those actions; 

9 (2) provide opportunities for review and com10 ment on that adaptation plan by the public, includ11 ing in the case of a plan by the Bureau of Indian 

12 Affairs, review by Indian tribes; and 

13 (3) submit such plan to the President for ap14 proval. 

15 (b) REVIEW BY PRESIDENT AND SUBMISSION TO

16 CONGRESS.— 

17 (1) REVIEW BY PRESIDENT.—The President 

18 shall— 

19 (A) approve an adaptation plan submitted 

20 under subsection (a)(3) if the plan meets the 

21 requirements of subsection (c) and is consistent 

22 with the strategy developed under section 476; 

23 (B) decide whether to approve the plan 

24 within 60 days after submission; and 


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1 (C) if the President disapproves a plan, di2 rect the department or agency to submit a re3 vised plan to the President under subsection 

4 (a)(3) within 60 days after such disapproval. 

5 (2) SUBMISSION TO CONGRESS.—Not later than 

6 30 days after the date of approval of such adapta7 tion plan by the President, the department or agen8 cy shall submit the approved plan to the Committee 

9 on Natural Resources of the House of Representa10 tives, the Committee on Energy and Natural Re11 sources of the Senate, and the committees of the 

12 House of Representatives and the Senate with prin13 cipal jurisdiction over the department or agency. 

14 (c) REQUIREMENTS.—Each adaptation plan shall— 

15 (1) establish programs for assessing the current 

16 and future impacts of climate change and ocean 

17 acidification on natural resources within the depart18 ment’s or agency’s, respectively, jurisdiction, includ19 ing cumulative and synergistic effects, and for iden20 tifying and monitoring those natural resources that 

21 are likely to be adversely affected and that have 

22 need for conservation; 

23 (2) identify and prioritize the department’s or 

24 agency’s strategies and specific conservation actions 

25 to address the current and future impacts of climate 


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1 change and ocean acidification on natural resources 

2 within the scope of the department’s or agency’s ju3 risdiction and to develop and implement strategies to 

4 protect, restore, and conserve such resources to be5 come more resilient, adapt to, and better withstand 

6 those impacts, including— 

7 (A) the protection, restoration, and con8 servation of terrestrial, marine, estuarine, and 

9 freshwater habitats and ecosystems; 

10 (B) the establishment of terrestrial, ma11 rine, estuarine, and freshwater habitat linkages 

12 and corridors; 

13 (C) the restoration and conservation of ec14 ological processes; 

15 (D) the protection of a broad diversity of 

16 native species of fish, wildlife, and plant popu17 lations across their range; and 

18 (E) the protection of fish, wildlife, and 

19 plant health, recognizing that climate can alter 

20 the distribution and ecology of parasites, patho21 gens, and vectors; 

22 (3) describe how the department or agency will 

23 integrate such strategies and conservation activities 

24 into plans, programs, activities, and actions of the 

25 department or agency, related to the conservation 


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1 and management of natural resources and establish 

2 new plans, programs, activities, and actions as nec3 essary; 

4 (4) establish methods for assessing the effec5 tiveness of strategies and conservation actions taken 

6 to protect, restore, and conserve natural resources to 

7 enable them to become more resilient, adapt to, and 

8 withstand the impacts of climate change and ocean 

9 acidification, and for updating those strategies and 

10 actions to respond to new information and changing 

11 conditions; 

12 (5) include a description of current and pro13 posed mechanisms to enhance cooperation and co14 ordination of natural resources adaptation efforts 

15 with other Federal agencies, State and local govern16 ments, Indian tribes, and nongovernmental stake17 holders; 

18 (6) include specific written guidance to resource 

19 managers to— 

20 (A) explain how managers are expected to 

21 address the effects of climate change and ocean 

22 acidification; 

23 (B) identify how managers are to obtain 

24 any site-specific information that may be nec25 essary; and 


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1 (C) reflect best practices shared among rel2 evant agencies, while also recognizing the 

3 unique missions, objectives, and responsibilities 

4 of each agency; and 

5 (7) identify and assess data and information 

6 gaps necessary to develop natural resources adapta7 tion plans and strategies. 

8 (d) IMPLEMENTATION.— 

9 (1) IN GENERAL.—Upon approval by the Presi10 dent, each department or agency that serves on the 

11 Natural Resources Climate Change Adaptation 

12 Panel shall implement its adaptation plan through 

13 existing and new plans, policies, programs, activities, 

14 and actions to the extent not inconsistent with exist15 ing authority. 

16 (2) CONSIDERATION OF IMPACTS.— 

17 (A) IN GENERAL.—To the maximum ex18 tent practicable and consistent with applicable 

19 law, every natural resource management deci20 sion made by the department or agency shall 

21 consider the impacts of climate change and 

22 ocean acidification on those natural resources. 

23 (B) GUIDANCE.—The Council on Environ24 mental Quality shall issue guidance for Federal 


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1 departments and agencies for considering those 

2 impacts. 

3 (e) REVISION AND REVIEW.—Not less than every 5 

4 years, each adaptation plan under this section shall be re5 viewed and revised to incorporate the best available science 

6 and other information regarding the impacts of climate 

7 change and ocean acidification on natural resources. 

8 SEC. 479. STATE NATURAL RESOURCES ADAPTATION 

9 PLANS. 

10 (a) REQUIREMENT.—In order to be eligible for funds 

11 under section 480, not later than 1 year after the develop12 ment of a Natural Resources Climate Change Adaptation 

13 Strategy required under section 476 each State shall pre14 pare a State natural resources adaptation plan detailing 

15 the State’s current and projected efforts to address the 

16 potential impacts of climate change and ocean acidifica17 tion on natural resources and coastal areas within the 

18 State’s jurisdiction. 

19 (b) REVIEW OR APPROVAL.— 

20 (1) IN GENERAL.—Each State adaptation plan 

21 shall be reviewed and approved or disapproved by 

22 the Secretary of the Interior and, as applicable, the 

23 Secretary of Commerce. Such approval shall be 

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1 sources Climate Change Adaptation Strategy re2 quired under section 476. 

3 (2) APPROVAL OR DISAPPROVAL.—Within 180 

4 days after transmittal of such a plan, or a revision 

5 to such a plan, the Secretary of the Interior and, as 

6 applicable, the Secretary of Commerce shall approve 

7 or disapprove the plan by written notice. 

8 (3) RESUBMITTAL.—Within 90 days after 

9 transmittal of a resubmitted adaptation plan as a re10 sult of disapproval under paragraph (3), the Sec11 retary of the Interior and, as applicable, the Sec12 retary of Commerce, shall approve or disapprove the 

13 plan by written notice. 

14 (c) CONTENTS.—A State natural resources adapta15 tion plan shall— 

16 (1) include a strategy for addressing the im17 pacts of climate change and ocean acidification on 

18 terrestrial, marine, estuarine, and freshwater fish, 

19 wildlife, plants, habitats, ecosystems, wildlife health, 

20 and ecological processes, that— 

21 (A) describes the impacts of climate 

22 change and ocean acidification on the diversity 

23 and health of the fish, wildlife and plant popu24 lations, habitats, ecosystems, and associated ec25 ological processes; 


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1 (B) establishes programs for monitoring 

2 the impacts of climate change and ocean acidifi3 cation on fish, wildlife, and plant populations, 

4 habitats, ecosystems, and associated ecological 

5 processes; 

6 (C) describes and prioritizes proposed con7 servation actions to assist fish, wildlife, plant 

8 populations, habitats, ecosystems, and associ9 ated ecological processes in becoming more re10 silient, adapting to, and better withstanding 

11 those impacts; 

12 (D) includes strategies, specific conserva13 tion actions, and a time frame for implementing 

14 conservation actions for fish, wildlife, and plant 

15 populations, habitats, ecosystems, and associ16 ated ecological processes; 

17 (E) establishes methods for assessing the 

18 effectiveness of strategies and conservation ac19 tions taken to assist fish, wildlife, and plant 

20 populations, habitats, ecosystems, and associ21 ated ecological processes in becoming more re22 silient, adapt to, and better withstand the im23 pacts of climate changes and ocean acidification 

24 and for updating those strategies and actions to 


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1 respond appropriately to new information or 

2 changing conditions; 

3 (F) is incorporated into a revision of the 

4 State wildlife action plan (also known as the 

5 State comprehensive wildlife strategy)— 

6 (i) that has been submitted to the 

7 United States Fish and Wildlife Service; 

8 and 

9 (ii) that has been approved by the 

10 Service or on which a decision on approval 

11 is pending; and 

12 (G) is developed— 

13 (i) with the participation of the State 

14 fish and wildlife agency, the State coastal 

15 agency, the State agency responsible for 

16 administration of Land and Water Con17 servation Fund grants, the State Forest 

18 Legacy program coordinator, and other 

19 State agencies considered appropriate by 

20 the Governor of such State; and 

21 (ii) in coordination with the Secretary 

22 of the Interior, and where applicable, the 

23 Secretary of Commerce and other States 

24 that share jurisdiction over natural re25 sources with the State; and 


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1 (2) include, in the case of a coastal State, a 

2 strategy for addressing the impacts of climate 

3 change and ocean acidification on the coastal zone 

4 that— 

5 (A) identifies natural resources that are 

6 likely to be impacted by climate change and 

7 ocean acidification and describes those impacts; 

8 (B) identifies and prioritizes continuing re9 search and data collection needed to address 

10 those impacts including— 

11 (i) acquisition of high resolution 

12 coastal elevation and nearshore bathymetry 

13 data; 

14 (ii) historic shoreline position maps, 

15 erosion rates, and inventories of shoreline 

16 features and structures; 

17 (iii) measures and models of relative 

18 rates of sea level rise or lake level changes, 

19 including effects on flooding, storm surge, 

20 inundation, and coastal geological proc21 esses; 

22 (iv) habitat loss, including projected 

23 losses of coastal wetlands and potentials 

24 for inland migration of natural shoreline 

25 habitats; 


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1 (v) ocean and coastal species and eco2 system migrations, and changes in species 

3 population dynamics; 

4 (vi) changes in storm frequency, in5 tensity, or rainfall patterns; 

6 (vii) saltwater intrusion into coastal 

7 rivers and aquifers; 

8 (viii) changes in chemical or physical 

9 characteristics of marine and estuarine 

10 systems; 

11 (ix) increased harmful algal blooms; 

12 and 

13 (x) spread of invasive species; 

14 (C) identifies and prioritizes adaptation 

15 strategies to protect, restore, and conserve nat16 ural resources to enable them to become more 

17 resilient, adapt to, and withstand the impacts of 

18 climate change and ocean acidification, includ19 ing— 

20 (i) protection, maintenance, and res21 toration of ecologically important coastal 

22 lands, coastal and ocean ecosystems, and 

23 species biodiversity and the establishment 

24 of habitat buffer zones, migration cor25 ridors, and climate refugia; and 


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1 (ii) improved planning, siting policies, 

2 and hazard mitigation strategies; 

3 (D) establishes programs for the long-term 

4 monitoring of the impacts of climate change 

5 and ocean acidification on the ocean and coastal 

6 zone and to assess and adjust, when necessary, 

7 such adaptive management strategies; 

8 (E) establishes performance measures for 

9 assessing the effectiveness of adaptation strate10 gies intended to improve resilience and the abil11 ity of natural resources in the coastal zone to 

12 adapt to and withstand the impacts of climate 

13 change and ocean acidification and of adapta14 tion strategies intended to minimize those im15 pacts on the coastal zone and to update those 

16 strategies to respond to new information or 

17 changing conditions; and 

18 (F) is developed with the participation of 

19 the State coastal agency and other appropriate 

20 State agencies and in coordination with the 

21 Secretary of Commerce and other appropriate 

22 Federal agencies. 

23 (d) PUBLIC INPUT.—States shall provide for solicita24 tion and consideration of public and independent scientific 

25 input in the development of their plans. 


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1 (e) COORDINATION WITH OTHER PLANS.—The State 

2 plan shall take into consideration research and informa3 tion contained in, and coordinate with and integrate the 

4 goals and measures identified in, as appropriate, other 

5 natural resources conservation strategies, including— 

6 (1) the national fish habitat action plan; 

7 (2) plans under the North American Wetlands 

8 Conservation Act (16 U.S.C. 4401 et seq.); 

9 (3) the Federal, State, and local partnership 

10 known as ‘‘Partners in Flight’’; 

11 (4) federally approved coastal zone management 

12 plans under the Coastal Zone Management Act of 

13 1972 (16 U.S.C. 1451 et seq.); 

14 (5) federally approved regional fishery manage15 ment plants and habitat conservation activities 

16 under the Magnuson-Stevens Fishery Conservation 

17 and Management Act (16 U.S.C. 1801 et seq.); 

18 (6) the national coral reef action plan; 

19 (7) recovery plans for threatened species and 

20 endangered species under section 4(f) of the Endan21 gered Species Act of 1973 (16 U.S.C. 1533(f)); 

22 (8) habitat conservation plans under section 10 

23 of that Act (16 U.S.C. 1539); 

24 (9) other Federal, State, and tribal plans for 

25 imperiled species; 


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1 (10) State or tribal hazard mitigation plans; 

2 (11) State or tribal water management plans; 

3 and 

4 (12) other State-based strategies that com5 prehensively implement adaptation activities to re6 mediate the effects of climate change and ocean 

7 acidification on terrestrial, marine, and freshwater 

8 fish, wildlife, plants, and other natural resources. 

9 (f) UPDATING.—Each State plan shall be updated 

10 not less than every 5 years. 

11 (g) FUNDING.— 

12 (1) IN GENERAL.—Funds allocated to States 

13 under section 480 shall be used only for activities 

14 that are consistent with a State natural resources 

15 adaptation plan that has been approved by the Sec16 retaries of Interior and Commerce. 

17 (2) FUNDING PRIOR TO THE APPROVAL OF A

18 STATE PLAN.—Until the earlier of the date that is 

19 3 years after the date of the enactment of this sub20 part or the date on which a State receives approval 

21 for the State strategy, a State shall be eligible to re22 ceive funding under section 480 for adaptation ac23 tivities that are— 

24 (A) consistent with the comprehensive 

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1 priate, other natural resources conservation 

2 strategies; and 

3 (B) in accordance with a workplan devel4 oped in coordination with— 

5 (i) the Secretary of the Interior; and 

6 (ii) the Secretary of Commerce, for 

7 any coastal State subject to the condition 

8 that coordination with the Secretary of 

9 Commerce shall be required only for those 

10 portions of the strategy relating to activi11 ties affecting the coastal zone. 

12 (3) PENDING APPROVAL.—During the period 

13 for which approval by the applicable Secretary of a 

14 State plan is pending, the State may continue receiv15 ing funds under section 480 pursuant to the 

16 workplan described in paragraph (2)(B). 

17 SEC. 480. NATURAL RESOURCES CLIMATE CHANGE ADAP18 TATION FUND. 

19 (a) ESTABLISHMENT OF FUND.—There is hereby es20 tablished in the Treasury a separate account that shall 

21 be known as the Natural Resources Climate Change Adap22 tation Account. 

23 (b) AVAILABILITY OF AMOUNTS.—All amounts de24 posited into the Natural Resources Climate Change AdapVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00893 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 tation Fund shall be available without further appropria2 tion or fiscal year limitation. 

3 (c) ALLOCATIONS.— 

4 (1) STATES.—38.5 percent of the amounts 

5 made available for each fiscal year to carry out this 

6 subpart shall be provided to States to carry out nat7 ural resources adaptation activities in accordance 

8 with State natural resources adaptation plans ap9 proved under section 479. Specifically— 

10 (A) 32.5 percent shall be available to State 

11 wildlife agencies in accordance with the appor12 tionment formula established under the second 

13 subsection (c) of section 4 of the Pittman-Rob14 ertson Wildlife Restoration Act (16 U.S.C. 

15 669c), as added by section 902(e) of H.R. 5548 

16 as introduced in the 106th Congress and en17 acted into law by section 1(a)(2) of Public Law 

18 106–553 (114 Stat. 2762A–119); and 

19 (B) 6 percent shall be available to State 

20 coastal agencies pursuant to the formula estab21 lished by the Secretary of Commerce under sec22 tion 306(c) of the Coastal Management Act of 

23 1972 (16 U.S.C. 1455(c)). 


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1 (2) DEPARTMENT OF THE INTERIOR.—Of the 

2 amounts made available for each fiscal year to carry 

3 out this subpart— 

4 (A) 17 percent shall be allocated to the 

5 Secretary of the Interior for use in funding— 

6 (i) natural resources adaptation activi7 ties carried out— 

8 (I) under endangered species, mi9 gratory species, and other fish and 

10 wildlife programs administered by the 

11 National Park Service, the United 

12 States Fish and Wildlife Service, the 

13 Bureau of Indian Affairs, and the Bu14 reau of Land Management; 

15 (II) on wildlife refuges, National 

16 Park Service land, and other public 

17 land under the jurisdiction of the 

18 United States Fish and Wildlife Serv19 ice, the Bureau of Land Management, 

20 the Bureau of Indian Affairs, or the 

21 National Park Service; or 

22 (III) within Federal water man23 aged by the Bureau of Reclamation 

24 and the National Park Service; and 


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1 (ii) for the implementation of the Na2 tional Fish and Wildlife Habitat and Cor3 ridors Identification Program pursuant to 

4 section 481; 

5 (B) 5 percent shall be allocated to the Sec6 retary of the Interior for natural resources ad7 aptation activities carried out under cooperative 

8 grant programs, including— 

9 (i) the cooperative endangered species 

10 conservation fund authorized under section 

11 6 of the Endangered Species Act of 1973 

12 (16 U.S.C. 1535); 

13 (ii) programs under the North Amer14 ican Wetlands Conservation Act (16 

15 U.S.C. 4401 et seq.); 

16 (iii) the Neotropical Migratory Bird 

17 Conservation Fund established by section 

18 478(a) of the Neotropical Migratory Bird 

19 Conservation Act (16 U.S.C. 6108(a)); 

20 (iv) the Coastal Program of the 

21 United States Fish and Wildlife Service; 

22 (v) the National Fish Habitat Action 

23 Plan; 

24 (vi) the Partners for Fish and Wildlife 

25 Program; 


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1 (vii) the Landowner Incentive Pro2 gram; 

3 (viii) the Wildlife Without Borders 

4 Program of the United States Fish and 

5 Wildlife Service; and 

6 (ix) the Migratory Species Program 

7 and Park Flight Migratory Bird Program 

8 of the National Park Service; and 

9 (C) 3 percent shall be allocated to the Sec10 retary of the Interior to provide financial assist11 ance to Indian tribes to carry out natural re12 sources adaptation activities through the Tribal 

13 Wildlife Grants Program of the United States 

14 Fish and Wildlife Service. 

15 (3) LAND AND WATER CONSERVATION FUND.— 

16 (A) DEPOSITS.— 

17 (i) IN GENERAL.—Of the amounts 

18 made available for each fiscal year to carry 

19 out this subpart, 12 percent shall be de20 posited into the Land and Water Conserva21 tion Fund established under section 2 of 

22 the Land and Water Conservation Fund 

23 Act of 1965 (16 U.S.C. 460l–5). 


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1 (ii) USE OF DEPOSITS.—Deposits into 

2 the Land and Water Conservation Fund 

3 under this paragraph shall— 

4 (I) be supplemental to authoriza5 tions provided under section 3 of the 

6 Land and Water Conservation Fund 

7 Act of 1965 (16 U.S.C. 460l–6), 

8 which shall remain available for non9 adaptation needs; and 

10 (II) be available for expenditure 

11 to carry out this subpart without fur12 ther appropriation or fiscal year limi13 tation. 

14 (B) ALLOCATIONS.—Of the amounts de15 posited under this paragraph into the Land and 

16 Water Conservation Fund— 

(i) 1 17 ⁄6 shall be allocated to the Sec18 retary of the Interior and made available 

19 on a competitive basis to carry out natural 

20 resources adaptation activities through the 

21 acquisition of land and interests in land 

22 under section 6 of the Land and Water 

23 Conservation Fund Act of 1965 (16 U.S.C. 

24 460l–8)— 


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1 (I) to States in accordance with 

2 their natural resources adaptation 

3 plans, and to Indian tribes; 

4 (II) notwithstanding section 5 of 

5 that Act (16 U.S.C. 460l–7); and 

6 (III) in addition to any funds 

7 provided pursuant to annual appro8 priations Acts, the Energy Policy Act 

9 of 2005 (42 U.S.C. 15801 et seq.), or 

10 any other authorization for non11 adaptation needs; 

(ii) 1 12 ⁄3 shall be allocated to the Sec13 retary of the Interior to carry out natural 

14 resources adaptation activities through the 

15 acquisition of lands and interests in land 

16 under section 7 of the Land and Water 

17 Conservation Fund Act of 1965 (16 U.S.C. 

18 460l–9); 

(iii) 1 19 ⁄6 shall be allocated to the Sec20 retary of Agriculture and made available to 

21 the States and Indian tribes to carry out 

22 natural resources adaptation activities 

23 through the acquisition of land and inter24 ests in land under section 7 of the Forest 

25 Legacy Program under the Cooperative 


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1 Forestry Assistance Act of 1978 (16 

2 U.S.C. 2103c); and 

(iv) 1 3 ⁄3 shall be allocated to the Sec4 retary of Agriculture to carry out natural 

5 resources adaptation activities through the 

6 acquisition of land and interests in land 

7 under section 7 of the Land and Water 

8 Conservation Fund Act of 1965 (16 U.S.C. 

9 460l–9). 

10 (C) EXPENDITURE OF FUNDS.—In allo11 cating funds under subparagraph (B), the Sec12 retary of the Interior and the Secretary of Agri13 culture shall take into consideration factors in14 cluding— 

15 (i) the availability of non-Federal con16 tributions from State, local, or private 

17 sources; 

18 (ii) opportunities to protect fish and 

19 wildlife corridors or otherwise to link or 

20 consolidate fragmented habitats; 

21 (iii) opportunities to reduce the risk of 

22 catastrophic wildfires, drought, extreme 

23 flooding, or other climate-related events 

24 that are harmful to fish and wildlife and 

25 people; and 


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1 (iv) the potential for conservation of 

2 species or habitat types at serious risk due 

3 to climate change, ocean acidification, and 

4 other stressors. 

5 (4) FOREST SERVICE.—Of the amounts made 

6 available for each fiscal year to carry out this sub7 part, 5 percent shall be allocated to the Secretary of 

8 Agriculture for use in funding natural resources ad9 aptation activities carried out on national forests 

10 and national grasslands under the jurisdiction of the 

11 Forest Service. 

12 (5) DEPARTMENT OF COMMERCE.—Of the 

13 amounts made available for each fiscal year to carry 

14 out this subpart, 7 percent shall be allocated to the 

15 Secretary of Commerce for use in funding natural 

16 resources adaptation activities to protect, maintain, 

17 and restore coastal, estuarine, and marine resources, 

18 habitats, and ecosystems, including such activities 

19 carried out under— 

20 (A) the coastal and estuarine land con21 servation program; 

22 (B) the community-based restoration pro23 gram; 

24 (C) the Coastal Zone Management Act of 

25 1972 (16 U.S.C. 1451 et seq.), that are specifiVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00901 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 cally designed to strengthen the ability of coast2 al, estuarine, and marine resources, habitats, 

3 and ecosystems to adapt to and withstand the 

4 impacts of climate change and ocean acidifica5 tion; 

6 (D) the Open Rivers Initiative; 

7 (E) the Magnuson-Stevens Fishery Con8 servation and Management Act (16 U.S.C. 

9 1801 et seq.); 

10 (F) the Marine Mammal Protection Act of 

11 1972 (16 U.S.C. 1361 et seq.); 

12 (G) the Endangered Species Act of 1973 

13 (16 U.S.C. 1531 et seq.); 

14 (H) the Marine Protection, Research, and 

15 Sanctuaries Act of 1972 (33 U.S.C. 1401 et 

16 seq.); 

17 (I) the Coral Reef Conservation Act of 

18 2000 (16 U.S.C. 6401 et seq.); and 

19 (J) the Estuary Restoration Act of 2000 

20 (33 U.S.C. 2901 et seq.). 

21 (6) ENVIRONMENTAL PROTECTION AGENCY.— 

22 Of the amounts made available each fiscal year to 

23 carry out this section, 7.5 percent shall be allocated 

24 to the Administrator for use in natural resources ad25 aptation activities restoring and protecting— 


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1 (A) large-scale freshwater aquatic eco2 systems, such as the Everglades, the Great 

3 Lakes, Flathead Lake, the Missouri River, the 

4 Mississippi River, the Colorado River, the Sac5 ramento-San Joaquin Rivers, the Ohio River, 

6 the Columbia-Snake River System, the Apa7 lachicola, Chattahoochee, and Flint River Sys8 tem, the Connecticut River, and the Yellowstone 

9 River; 

10 (B) large-scale estuarine ecosystems, such 

11 as Chesapeake Bay, Long Island Sound, Puget 

12 Sound, the Mississippi River Delta, the San 

13 Francisco Bay Delta, Narragansett Bay, and 

14 Albemarle-Pamlico Sound; and 

15 (C) freshwater and estuarine ecosystems, 

16 watersheds, and basins identified as priorities 

17 by the Administrator, working in cooperation 

18 with other Federal agencies, States, Indian 

19 tribes, local governments, scientists, and other 

20 conservation partners. 

21 (7) CORPS OF ENGINEERS.—Of the amounts 

22 made available each fiscal year to carry out this sec23 tion, 5 percent shall be available to the Secretary of 

24 the Army for use by the Corps of Engineers to carry 


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1 out natural resources adaptation activities restor2 ing— 

3 (A) large-scale freshwater aquatic eco4 systems, such as the ecosystems described in 

5 paragraph (6)(A); 

6 (B) large-scale estuarine ecosystems, such 

7 as the ecosystems described in paragraph 

8 (6)(B); 

9 (C) freshwater and estuarine ecosystems, 

10 watersheds, and basins identified as priorities 

11 by the Corps of Engineers, working in coopera12 tion with other Federal agencies, States, Indian 

13 tribes, local governments, scientists, and other 

14 conservation partners; and 

15 (D) habitats and ecosystems through the 

16 implementation of estuary habitat restoration 

17 projects authorized by the Estuary Restoration 

18 Act of 2000 (33 U.S.C. 2901 et seq.), project 

19 modifications for improvement of the environ20 ment, aquatic restoration and protection 

21 projects authorized by section 206 of the Water 

22 Resources Development Act of 1996 (33 U.S.C. 

23 2330), and other appropriate programs and ac24 tivities. 


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1 (d) USE OF FUNDS BY FEDERAL DEPARTMENTS AND

2 AGENCIES.—Funds allocated to Federal departments and 

3 agencies under this section shall only be used for natural 

4 resources adaptation activities that are consistent with an 

5 adaptation plan developed and approved by the President 

6 under section 478. 

7 (e) STATE COST SHARING.—Notwithstanding any 

8 other provision of law, a State that receives a grant with 

9 amounts allocated under this section shall use funds from 

10 non-Federal sources to pay 10 percent of the costs of each 

11 activity carried out using amounts provided under the 

12 grant. 

13 SEC. 481. NATIONAL WILDLIFE HABITAT AND CORRIDORS 

14 INFORMATION PROGRAM. 

15 (a) ESTABLISHMENT.—Within 6 months of the date 

16 of enactment of this subpart, the Secretary of the Interior, 

17 in cooperation with the States and Indian tribes, shall es18 tablish a National Fish and Wildlife Habitat and Cor19 ridors Information Program in accordance with the re20 quirements of this section. 

21 (b) PURPOSE.—The purpose of this program is to— 

22 (1) support States and Indian tribes in the de23 velopment of a geographic information system data24 base of fish and wildlife habitat and corridors that 

25 would inform planning and development decisions 


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1 within each State, enable each State to model cli2 mate impacts and adaptation, and provide geo3 graphically specific enhancements of State wildlife 

4 action plans; 

5 (2) ensure the collaborative development, with 

6 the States and Indian tribes, of a comprehensive, 

7 national geographic information system database of 

8 maps, models, data, surveys, informational products, 

9 and other geospatial information regarding fish and 

10 wildlife habitat and corridors, that— 

11 (A) is based on consistent protocols for 

12 sampling and mapping across landscapes that 

13 take into account regional differences; and 

14 (B) that utilizes— 

15 (i) existing and planned State- and 

16 tribal-based geographic information system 

17 databases; and 

18 (ii) existing databases, analytical 

19 tools, metadata activities, and other infor20 mation products available through the Na21 tional Biological Information Infrastruc22 ture maintained by the Secretary and non23 governmental organizations; and 

24 (3) facilitate the use of such databases by Fed25 eral, State, local, and tribal decisionmakers to incorVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00906 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 porate qualitative information on fish and wildlife 

2 habitat and corridors at the earliest possible stage 

3 to— 

4 (A) prioritize and target natural resources 

5 adaptation strategies and activities; 

6 (B) avoid, minimize, and mitigate the im7 pacts on fish and wildlife habitat and corridors 

8 in siting energy development, water, trans9 mission, transportation, and other land use 

10 projects; 

11 (C) assess the impacts of existing develop12 ment on habitats and corridors; and 

13 (D) develop management strategies to en14 hance the ability of fish, wildlife, and plant spe15 cies to migrate or respond to shifting habitats 

16 within existing habitats and corridors. 

17 (c) HABITAT AND CORRIDORS INFORMATION SYS18 TEM.— 

19 (1) IN GENERAL.—The Secretary, in coopera20 tion with the States and Indian tribes, shall develop 

21 a Habitat and Corridors Information System. 

22 (2) CONTENTS.—The System shall— 

23 (A) include maps, data, and descriptions of 

24 fish and wildlife habitat and corridors, that— 


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1 (i) have been developed by Federal 

2 agencies, State wildlife agencies and nat3 ural heritage programs, Indian tribes, local 

4 governments, nongovernmental organiza5 tions, and industry; and 

6 (ii) meet accepted Geospatial Inter7 operability Framework data and metadata 

8 protocols and standards; 

9 (B) include maps and descriptions of pro10 jected shifts in habitats and corridors of fish 

11 and wildlife species in response to climate 

12 change; 

13 (C) assure data quality and make the data, 

14 models, and analyses included in the System 

15 available at scales useful to decisionmakers— 

16 (i) to prioritize and target natural re17 sources adaptation strategies and activi18 ties; 

19 (ii) to assess the impacts of proposed 

20 energy development, water, transmission, 

21 transportation, and other land use projects 

22 and avoid, minimize, and mitigate those 

23 impacts on habitats and corridors; 

24 (iii) to assess the impacts of existing 

25 development on habitats and corridors; and 


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1 (iv) to develop management strategies 

2 to enhance the ability of fish, wildlife, and 

3 plant species to migrate or respond to 

4 shifting habitats within existing habitats 

5 and corridors; 

6 (D) establish a process for updating maps 

7 and other information as landscapes, habitats, 

8 corridors, and wildlife populations change or as 

9 other information becomes available; 

10 (E) encourage the development of collabo11 rative plans by Federal and State agencies and 

12 Indian tribes to monitor and evaluate the effi13 cacy of the System to meet the needs of deci14 sionmakers; 

15 (F) identify gaps in habitat and corridor 

16 information, mapping, and research that should 

17 be addressed to fully understand and assess 

18 current data and metadata, and to prioritize re19 search and future data collection activities for 

20 use in updating the System and provide support 

21 for those activities; 

22 (G) include mechanisms to support collabo23 rative research, mapping, and planning of habi24 tats and corridors by Federal and State agenVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00909 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 cies, Indian tribes, and other interested stake2 holders; 

3 (H) incorporate biological and geospatial 

4 data on species and corridors found in energy 

5 development and transmission plans, including 

6 renewable energy initiatives, transportation, and 

7 other land use plans; 

8 (I) be based on the best scientific informa9 tion available; and 

10 (J) identify, prioritize, and describe key 

11 parcels of non-Federal land located within the 

12 boundaries of units of the National Park Sys13 tem, National Wildlife Refuge System, National 

14 Forest System, or National Grassland System 

15 that are critical to maintenance of wildlife habi16 tat and migration corridors. 

17 (d) FINANCIAL AND OTHER SUPPORT.—The Sec18 retary may provide support to the States and Indian 

19 tribes, including financial and technical assistance, for ac20 tivities that support the development and implementation 

21 of the System. 

22 (e) COORDINATION.—The Secretary, in cooperation 

23 with the States and Indian tribes, shall make rec24 ommendations on how the information developed in the 

25 System may be incorporated into existing relevant State 


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1 and Federal plans affecting fish and wildlife, including 

2 land management plans, the State Comprehensive Wildlife 

3 Conservation Strategies, and appropriate tribal conserva4 tion plans, to ensure that they— 

5 (1) prevent unnecessary habitat fragmentation 

6 and disruption of corridors; 

7 (2) promote the landscape connectivity nec8 essary to allow wildlife to move as necessary to meet 

9 biological needs, adjust to shifts in habitat, and 

10 adapt to climate change; and 

11 (3) minimize the impacts of energy, develop12 ment, water, transportation, and transmission 

13 projects and other activities expected to impact habi14 tat and corridors. 

15 (f) DEFINITIONS.—In this section: 

16 (1) GEOSPATIAL INTEROPERABILITY FRAME17 WORK.—The term ‘‘Geospatial Interoperability 

18 Framework’’ means the strategy utilized by the Na19 tional Biological Information Infrastructure that is 

20 based upon accepted standards, specifications, and 

21 protocols adopted through the International Stand22 ards Organization, the Open Geospatial Consortium, 

23 and the Federal Geographic Data Committee, to 

24 manage, archive, integrate, analyze, and make acces25 sible geospatial and biological data and metadata. 


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

2 the Secretary of the Interior. 

3 SEC. 482. ADDITIONAL PROVISIONS REGARDING INDIAN 

4 TRIBES. 

5 (a) FEDERAL TRUST RESPONSIBILITY.—Nothing in 

6 this subpart is intended to amend, alter, or give priority 

7 over the Federal trust responsibility to Indian tribes. 

8 (b) EXEMPTION FROM FOIA.—If a Federal depart9 ment or agency receives any information related to sacred 

10 sites or cultural activities identified by an Indian tribe as 

11 confidential, such information shall be exempt from disclo12 sure under section 552 of title 5, United States Code, pop13 ularly known as the Freedom of Information Act (5 U.S.C. 

14 552). 

15 (c) APPLICATION OF OTHER LAW.—The Secretary of 

16 the Interior may apply the provisions of Public Law 93– 

17 638 where appropriate in the implementation of this sub18 part. 

19 PART 2—INTERNATIONAL CLIMATE CHANGE 

20 ADAPTATION PROGRAM 

21 SEC. 491. FINDINGS AND PURPOSES. 

22 (a) FINDINGS.—Congress finds the following: 

23 (1) Global climate change is a potentially sig24 nificant national and global security threat multi25 plier and is likely to exacerbate competition and conVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00912 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 flict over agricultural, vegetative, marine, and water 

2 resources and to result in increased displacement of 

3 people, poverty, and hunger within developing coun4 tries. 

5 (2) The strategic, social, political, economic, 

6 cultural, and environmental consequences of global 

7 climate change are likely to have disproportionate 

8 adverse impacts on developing countries, which have 

9 less economic capacity to respond to such impacts. 

10 (3) The countries most vulnerable to climate 

11 change, due both to greater exposure to harmful im12 pacts and to lower capacity to adapt, are developing 

13 countries with very low industrial greenhouse gas 

14 emissions that have contributed less to climate 

15 change than more affluent countries. 

16 (4) To a much greater degree than developed 

17 countries, developing countries rely on the natural 

18 and environmental systems likely to be affected by 

19 climate change for sustenance, livelihoods, and eco20 nomic growth and stability. 

21 (5) Within developing countries there may be 

22 varying climate change adaptation and resilience 

23 needs among different communities and populations, 

24 including impoverished communities, children, 

25 women, and indigenous peoples. 


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1 (6) The consequences of global climate change, 

2 including increases in poverty and destabilization of 

3 economies and societies, are likely to pose long-term 

4 challenges to the national security, foreign policy, 

5 and economic interests of the United States. 

6 (7) It is in the national security, foreign policy, 

7 and economic interests of the United States to rec8 ognize, plan for, and mitigate the international stra9 tegic, social, political, cultural, environmental, 

10 health, and economic effects of climate change and 

11 to assist developing countries to increase their resil12 ience to those effects. 

13 (8) Under Article 4 of the United Nations 

14 Framework Convention on Climate Change, devel15 oped country parties, including the United States, 

16 committed to ‘‘assist the developing country parties 

17 that are particularly vulnerable to the adverse effects 

18 of climate change in meeting costs of adaptation to 

19 those adverse effects’’. 

20 (9) Under the Bali Action Plan, developed 

21 country parties to the United Nations Framework 

22 Convention on Climate Change, including the United 

23 States, committed to ‘‘enhanced action on the provi24 sion of financial resources and investment to support 

25 action on mitigation and adaptation and technology 


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1 cooperation,’’ including, inter alia, consideration of 

2 ‘‘improved access to adequate, predictable, and sus3 tainable financial resources and financial and tech4 nical support, and the provision of new and addi5 tional resources, including official and concessional 

6 funding for developing country parties’’. 

7 (b) PURPOSES.—The purposes of this part are— 

8 (1) to provide new and additional assistance 

9 from the United States to the most vulnerable devel10 oping countries, including the most vulnerable com11 munities and populations therein, in order to sup12 port the development and implementation of climate 

13 change adaptation programs and activities that re14 duce the vulnerability and increase the resilience of 

15 communities to climate change impacts, including 

16 impacts on water availability, agricultural produc17 tivity, flood risk, coastal resources, timing of sea18 sons, biodiversity, economic livelihoods, health and 

19 diseases, and human migration; and 

20 (2) to provide such assistance in a manner that 

21 protects and promotes the national security, foreign 

22 policy, environmental, and economic interests of the 

23 United States to the extent such interests may be 

24 advanced by minimizing, averting, or increasing re25 silience to climate change impacts. 


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1 SEC. 492. DEFINITIONS. 

2 In this part: 

3 (1) ALLOWANCE.—The term ‘‘allowance’’ 

4 means an emission allowance established under sec5 tion 721 of the Clean Air Act. 

6 (2) APPROPRIATE CONGRESSIONAL COMMIT7 TEES.—The term ‘‘appropriate congressional com8 mittees’’ means— 

9 (A) the Committees on Energy and Com10 merce, Financial Services, and Foreign Affairs 

11 of the House of Representatives; and 

12 (B) the Committees on Environment and 

13 Public Works and Foreign Relations of the Sen14 ate. 

15 (3) DEVELOPING COUNTRY.—The term ‘‘devel16 oping country’’ means a country eligible to receive 

17 official development assistance according to the in18 come guidelines of the Development Assistance Com19 mittee of the Organization for Economic Coopera20 tion and Development. 

21 (4) MOST VULNERABLE DEVELOPING COUN22 TRIES.—The term ‘‘most vulnerable developing 

23 countries’’ means, as determined by the Adminis24 trator of USAID, developing countries that are at 

25 risk of substantial adverse impacts of climate change 

26 and have limited capacity to respond to such imVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00916 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 pacts, considering the approaches included in any 

2 international treaties and agreements. 

3 (5) MOST VULNERABLE COMMUNITIES AND

4 POPULATIONS.—The term ‘‘most vulnerable commu5 nities and populations’’ means communities and pop6 ulations that are at risk of substantial adverse im7 pacts of climate change and have limited capacity to 

8 respond to such impacts, including impoverished 

9 communities, children, women, and indigenous peo10 ples. 

11 (6) PROGRAM.—The term ‘‘Program’’ means 

12 the International Climate Change Adaptation Pro13 gram established under section 493. 

14 (7) USAID.—The term ‘‘USAID’’ means the 

15 United States Agency for International Develop16 ment. 

17 (8) UNITED NATIONS FRAMEWORK CONVEN18 TION ON CLIMATE CHANGE.—The term ‘‘United Na19 tions Framework Convention on Climate Change’’ or 

20 ‘‘Convention’’ means the United Nations Framework 

21 Convention on Climate Change done at New York on 

22 May 9, 1992, and entered into force on March 21, 

23 1994. 


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1 SEC. 493. INTERNATIONAL CLIMATE CHANGE ADAPTATION 

2 PROGRAM. 

3 (a) ESTABLISHMENT.—The Secretary of State, in 

4 consultation with the Administrator of USAID, the Sec5 retary of the Treasury, and the Administrator of the Envi6 ronmental Protection Agency, shall establish an Inter7 national Climate Change Adaptation Program in accord8 ance with the requirements of this part. 

9 (b) ALLOWANCE ACCOUNT.—Allowances allocated 

10 pursuant to section 782(n) of the Clean Air Act shall be 

11 available for distribution to carry out the Program estab12 lished under subsection (a). 

13 (c) SUPPLEMENT NOT SUPPLANT.—Assistance pro14 vided under this part shall be used to supplement, and 

15 not to supplant, any other Federal, State, or local re16 sources available to carry out activities of the type carried 

17 out under the Program. 

18 SEC. 494. DISTRIBUTION OF ALLOWANCES. 

19 (a) IN GENERAL.—The Secretary of State, or such 

20 other Federal agency head as the President may des21 ignate, after consultation with the Secretary of the Treas22 ury, the Administrator of USAID, and the Administrator 

23 of the Environmental Protection Agency, shall direct the 

24 distribution of allowances to carry out the Program— 

25 (1) in the form of bilateral assistance pursuant 

26 to the requirements under section 495; 


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1 (2) to multilateral funds or international insti2 tutions pursuant to the Convention or an agreement 

3 negotiated under the Convention; or 

4 (3) through a combination of the mechanisms 

5 identified under paragraphs (1) and (2). 

6 (b) LIMITATION.— 

7 (1) CONDITIONAL DISTRIBUTION TO MULTILAT8 ERAL FUNDS OR INTERNATIONAL INSTITUTIONS.— 

9 In any fiscal year, the Secretary of State, or such 

10 other Federal agency head as the President may 

11 designate, in consultation with the Administrator of 

12 USAID, the Secretary of the Treasury, and the Ad13 ministrator of the Environmental Protection Agency, 

14 shall distribute at least 40 percent and up to 60 per15 cent of the allowances available to carry out the Pro16 gram to one or more multilateral funds or inter17 national institutions that meet the requirements of 

18 paragraph (2), if any such fund or institution exists, 

19 and shall annually certify in a report to the appro20 priate congressional committees that any multilat21 eral fund or international institution receiving allow22 ances under this section meets the requirements of 

23 paragraph (2) or that no multilateral fund or inter24 national institution that meets the requirements of 

25 paragraph (2) exists, as the case may be. The SecVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00919 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 retary of State shall notify the appropriate congres2 sional committees not less than 15 days prior to any 

3 transfer of allowances to a multilateral fund or 

4 international institution pursuant to this section. 

5 (2) MULTILATERAL FUND OR INTERNATIONAL

6 INSTITUTION ELIGIBILITY.—A multilateral fund or 

7 international institution is eligible to receive allow8 ances available to carry out the Program— 

9 (A) if— 

10 (i) such fund or institution is estab11 lished pursuant to— 

12 (I) the Convention; or 

13 (II) an agreement negotiated 

14 under the Convention; or 

15 (ii) the allowances are directed to one 

16 or more multilateral development banks or 

17 international development institutions, pur18 suant to an agreement negotiated under 

19 such Convention; and 

20 (B) if such fund or institution— 

21 (i) specifies the terms and conditions 

22 under which the United States is to pro23 vide allowances to the fund or institution, 

24 and under which the fund or institution is 

25 to provide assistance to recipient countries; 


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1 (ii) ensures that assistance from the 

2 United States to the fund or institution 

3 and the principal and income of the fund 

4 or institution are disbursed only for pur5 poses that are consistent with those de6 scribed in section 491(b)(1); 

7 (iii) requires a regular meeting of a 

8 governing body of the fund or institution 

9 that includes representation from countries 

10 among the most vulnerable developing 

11 countries and provides public access; 

12 (iv) requires that local communities 

13 and indigenous peoples in areas where any 

14 activities or programs are planned are en15 gaged through adequate disclosure of in16 formation, public participation, and con17 sultation; and 

18 (v) prepares and makes public an an19 nual report that— 

20 (I) describes the process and 

21 methodology for selecting the recipi22 ents of assistance from the fund or in23 stitution, including assessments of 

24 vulnerability; 


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1 (II) describes specific programs 

2 and activities supported by the fund 

3 or institution and the extent to which 

4 the assistance is addressing the adap5 tation needs of the most vulnerable 

6 developing countries, and the most 

7 vulnerable communities and popu8 lations therein; 

9 (III) describes the performance 

10 goals for assistance authorized under 

11 the fund or institution and expresses 

12 such goals in an objective and quan13 tifiable form, to the extent practicable; 

14 (IV) describes the performance 

15 indicators to be used in measuring or 

16 assessing the achievement of the per17 formance goals described in subclause 

18 (III); 

19 (V) provides a basis for rec20 ommendations for adjustments to as21 sistance authorized under this part to 

22 enhance the impact of such assist23 ance; and 

24 (VI) describes the participation 

25 of other nations and international orVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00922 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 ganizations in supporting and gov2 erning the fund or institution. 

3 (c) OVERSIGHT.— 

4 (1) DISTRIBUTION TO MULTILATERAL FUNDS

5 OR INTERNATIONAL INSTITUTIONS.—The Secretary 

6 of State, or such other Federal agency head as the 

7 President may designate, in consultation with the 

8 Administrator of USAID, shall oversee the distribu9 tion of allowances available to carry out the Pro10 gram to a multilateral fund or international institu11 tion under subsection (b). 

12 (2) BILATERAL ASSISTANCE.—The Adminis13 trator of USAID, in consultation with the Secretary 

14 of State, shall oversee the distribution of allowances 

15 available to carry out the Program for bilateral as16 sistance under section 495. 

17 SEC. 495. BILATERAL ASSISTANCE. 

18 (a) ACTIVITIES AND FOREIGN AID.— 

19 (1) IN GENERAL.—In order to achieve the pur20 poses of this part, the Administrator of USAID may 

21 carry out programs and activities and distribute al22 lowances to any private or public group (including 

23 international organizations and faith-based organiza24 tions), association, or other entity engaged in peace25 ful activities to— 


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1 (A) provide assistance to the most vulner2 able developing countries for— 

3 (i) the development of national or re4 gional climate change adaptation plans, in5 cluding a systematic assessment of socio6 economic vulnerabilities in order to identify 

7 the most vulnerable communities and pop8 ulations; 

9 (ii) associated national policies; and 

10 (iii) planning, financing, and execu11 tion of adaptation programs and activities; 

12 (B) support investments, capacity-building 

13 activities, and other assistance, to reduce vul14 nerability and promote community-level resil15 ience related to climate change and its impacts 

16 in the most vulnerable developing countries, in17 cluding impacts on water availability, agricul18 tural productivity, flood risk, coastal resources, 

19 timing of seasons, biodiversity, economic liveli20 hoods, health, human migration, or other social, 

21 economic, political, cultural, or environmental 

22 matters; 

23 (C) support climate change adaptation re24 search in or for the most vulnerable developing 

25 countries; 


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1 (D) reduce vulnerability and provide in2 creased resilience to climate change for local 

3 communities and livelihoods in the most vulner4 able developing countries by encouraging— 

5 (i) the protection and rehabilitation of 

6 natural systems; 

7 (ii) the enhancement and diversifica8 tion of agricultural, fishery, and other live9 lihoods; and 

10 (iii) the reduction of disaster risks; 

11 (E) support the deployment of technologies 

12 to help the most vulnerable developing countries 

13 respond to the destabilizing impacts of climate 

14 change and encourage the identification and 

15 adoption of appropriate renewable and efficient 

16 energy technologies that are beneficial in in17 creasing community-level resilience to the im18 pacts of global climate change in those coun19 tries; and 

20 (F) encourage the engagement of local 

21 communities through disclosure of information, 

22 consultation, and the communities’ informed 

23 participation relating to the development of 

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1 munity-level resilience to climate change im2 pacts. 

3 (2) LIMITATIONS.—Not more than 10 percent 

4 of the allowances made available to carry out bilat5 eral assistance under this part in any year shall be 

6 distributed to support activities in any single coun7 try. 

8 (3) PRIORITIZING ASSISTANCE.—In providing 

9 assistance under this section, the Administrator of 

10 USAID shall give priority to countries, including the 

11 most vulnerable communities and populations there12 in, that are most vulnerable to the adverse impacts 

13 of climate change, determined by the likelihood and 

14 severity of such impacts and the country’s capacity 

15 to adapt to such impacts. 

16 (b) COMMUNITY ENGAGEMENT.— 

17 (1) IN GENERAL.—The Administrator of 

18 USAID shall ensure that local communities, includ19 ing the most vulnerable communities and popu20 lations therein, in areas where any programs or ac21 tivities are carried out pursuant to this section are 

22 engaged in, through disclosure of information, public 

23 participation, and consultation, the design, imple24 mentation, monitoring, and evaluation of such pro25 grams and activities. 


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1 (2) CONSULTATION AND DISCLOSURE.—For 

2 each country receiving assistance under this section, 

3 the Administrator of USAID shall establish a proc4 ess for consultation with, and disclosure of informa5 tion to, local, national, and international stake6 holders regarding any programs and activities car7 ried out pursuant to this section. 

8 (c) COORDINATION.— 

9 (1) ALIGNMENT OF ACTIVITIES.—Subject to the 

10 direction of the President and the Secretary of 

11 State, the Administrator of USAID shall, to the ex12 tent practicable, seek to align activities under this 

13 section with broader development, poverty allevi14 ation, or natural resource management objectives 

15 and initiatives in the recipient country. 

16 (2) COORDINATION OF ACTIVITIES.—The Ad17 ministrator of USAID shall ensure that there is co18 ordination among the activities under this section, 

19 subtitle D of this title, and part E of title VII of the 

20 Clean Air Act, in order to maximize the effectiveness 

21 of United States assistance to developing countries. 

22 (d) REPORTING.— 

23 (1) INITIAL REPORT.—Not later than 180 days 

24 after the date of enactment of this part, the Admin25 istrator of USAID, in consultation with the SecVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00927 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 retary of State, shall submit to the President and 

2 the appropriate congressional committees an initial 

3 report that— 

4 (A) based on the most recent information 

5 available from reliable public sources or knowl6 edge obtained by USAID on a reliable basis, as 

7 determined by the Administrator of USAID, 

8 identifies the developing countries, including the 

9 most vulnerable communities and populations 

10 therein, that are most vulnerable to climate 

11 change impacts and in which assistance may 

12 have the greatest and most sustainable benefit 

13 in reducing vulnerability to climate change; and 

14 (B) describes the process and methodology 

15 for selecting the recipients of assistance under 

16 subsection (a)(1). 

17 (2) ANNUAL REPORTS.—Not later than 18 

18 months after the date on which the initial report is 

19 submitted pursuant to paragraph (1), and annually 

20 thereafter, the Administrator of USAID, in consulta21 tion with the Secretary of State, shall submit to the 

22 President and the appropriate congressional commit23 tees a report that— 

24 (A) describes the extent to which global cli25 mate change, through its potential negative imVerDate Nov 24 2008 00:55 May 16, 2009 Jkt 079200 PO 00000 Frm 00928 Fmt 6652 Sfmt 6201 E:\BILLS\H2454.IH H2454

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1 pacts on sensitive populations and natural re2 sources in the most vulnerable developing coun3 tries, may threaten, cause, or exacerbate polit4 ical, economic, environmental, cultural, or social 

5 instability or international conflict in those re6 gions; 

7 (B) describes the ramifications of any po8 tentially destabilizing impacts climate change 

9 may have on the national security, foreign pol10 icy, and economic interests of the United 

11 States, including— 

12 (i) the creation of environmental mi13 grants and internally displaced peoples; 

14 (ii) international or internal armed 

15 conflicts over water, food, land, or other 

16 resources; 

17 (iii) loss of agricultural and other live18 lihoods, cultural stability, and other causes 

19 of increased poverty and economic desta20 bilization; 

21 (iv) decline in availability of resources 

22 needed for survival, including water; 

23 (v) increased impact of natural disas24 ters (including droughts, flooding, and 

25 other 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 se7 curity, foreign policy, and economic interests of 

8 the United States and assist in avoiding the 

9 economically, politically, environmentally, cul10 turally, and socially destabilizing impacts of cli11 mate change in most vulnerable developing 

12 countries; 

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 

6 USAID shall establish and implement a system to 

7 monitor and evaluate the effectiveness and efficiency 

8 of assistance provided under this section in order to 

9 maximize the long-term sustainable development im10 pact of such assistance, including the extent to 

11 which such assistance is meeting the purposes of 

12 this part and addressing the adaptation needs of de13 veloping countries. 

14 (2) REQUIREMENTS.—In carrying out para15 graph (1), the Administrator of USAID shall— 

16 (A) in consultation with national govern17 ments in recipient countries, establish perform18 ance goals for assistance authorized under this 

19 section and express such goals in an objective 

20 and quantifiable form, to the extent practicable; 

21 (B) establish performance indicators to be 

22 used in measuring or assessing the achievement 

23 of the performance goals described in subpara24 graph (A), including an evaluation of— 


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1 (i) the extent to which assistance 

2 under this section provided for disclosure 

3 of information to, consultation with, and 

4 informed participation by local commu5 nities; 

6 (ii) the extent to which local commu7 nities participated in the design, implemen8 tation, and evaluation of programs and ac9 tivities implemented pursuant to this sec10 tion; and 

11 (iii) the impacts of such participation 

12 on the goals and objectives of the pro13 grams and activities implemented under 

14 this section; 

15 (C) provide a basis for recommendations 

16 for adjustments to assistance authorized under 

17 this section to enhance the impact of such as18 sistance; and 

19 (D) include, in the annual report to the 

20 appropriate congressional committees and other 

21 relevant agencies required under subsection 

22 (d)(2), findings resulting from the monitoring 

23 and evaluation of programs and activities under 

24 this section. 

Æ 


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