II 

111TH CONGRESS 

1ST SESSION S. 1733 

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

warming pollution, and transition to a clean energy economy. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 30, 2009 

Mr. KERRY (for himself and Mrs. BOXER) introduced the following bill; which 

was read twice and referred to the Committee on Environment and Public 

Works 

A BILL 

To create clean energy jobs, promote 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 ‘‘Clean Energy Jobs and American Power Act’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings. 

Sec. 3. Economy-wide emission reduction goals. 

Sec. 4. Definitions. 


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DIVISION A—AUTHORIZATIONS FOR POLLUTION REDUCTION, 

TRANSITION, AND ADAPTATION 

Sec. 101. Structure of Act. 

TITLE I—GREENHOUSE GAS REDUCTION PROGRAMS 

Subtitle A—Clean Transportation 

Sec. 111. Emission standards. 

‘‘PART B—MOBILE SOURCES

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

Sec. 112. Greenhouse gas emission reductions through transportation efficiency. 

‘‘PART C—TRANSPORTATION EMISSIONS

‘‘Sec. 831. Greenhouse gas emission reductions through transportation efficiency. 

Sec. 113. Transportation greenhouse gas emission reduction program grants. 

‘‘Sec. 832. Transportation greenhouse gas emission reduction program 

grants. 

Sec. 114. SmartWay transportation efficiency program. 

‘‘Sec. 822. SmartWay transportation efficiency program. 

Subtitle B—Carbon Capture and Sequestration 

Sec. 121. National strategy. 

Sec. 122. Regulations for geological sequestration sites. 

‘‘Sec. 813. Geological storage sites. 

Sec. 123. Studies and reports. 

Sec. 124. Performance standards for coal-fueled power plants. 

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

Sec. 125. Carbon capture and sequestration demonstration and early deployment program. 

Subtitle C—Nuclear and Advanced Technologies 

Sec. 131. Findings and policy. 

Sec. 132. Nuclear worker training. 

Sec. 133. Nuclear safety and waste management programs. 

Subtitle D—Water Efficiency 

Sec. 141. WaterSense. 

Sec. 142. Federal procurement of water-efficient products. 

Sec. 143. State residential water efficiency and conservation incentives program. 

Subtitle E—Miscellaneous 

Sec. 151. Office of Consumer Advocacy. 

Sec. 152. Clean technology business competition grant program. 

Sec. 153. Product carbon disclosure program. 

Sec. 154. State recycling programs. 

Sec. 155. Supplemental agriculture and forestry greenhouse gas reduction and 

renewable energy program. 

Sec. 156. Economic Development Climate Change Fund. 


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‘‘Sec. 219. Economic Development Climate Change Fund. 

Sec. 157. Study of risk-based programs addressing vulnerable areas. 

Subtitle F—Energy Efficiency and Renewable Energy 

Sec. 161. Renewable energy. 

Sec. 162. Advanced biofuels. 

Sec. 163. Energy efficiency in building codes. 

Sec. 164. Retrofit for energy and environmental performance. 

Subtitle G—Emission Reductions From Public Transportation Vehicles 

Sec. 171. Short title. 

Sec. 172. State fuel economy regulation for taxicabs. 

Sec. 173. State regulation of motor vehicle emissions for taxicabs. 

Subtitle H—Clean Energy and Natural Gas 

Sec. 181. Clean Energy and Accelerated Emission Reduction Program. 

Sec. 182. Advanced natural gas technologies. 

TITLE II—RESEARCH 

Subtitle A—Energy Research 

Sec. 201. Advanced energy research. 

Subtitle B—Drinking Water Adaptation, Technology, Education, and 

Research 

Sec. 211. Effects of climate change on drinking water utilities. 

TITLE III—TRANSITION AND ADAPTATION 

Subtitle A—Green Jobs and Worker Transition 

PART 1—GREEN JOBS

Sec. 301. Clean energy curriculum development grants. 

Sec. 302. Development of Information and Resources clearinghouse for vocational education and job training in renewable energy sectors. 

Sec. 303. Green construction careers demonstration project. 

PART 2—CLIMATE CHANGE WORKER ADJUSTMENT ASSISTANCE

Sec. 311. Petitions, eligibility requirements, and determinations. 

Sec. 312. Program benefits. 

Sec. 313. General provisions. 

Subtitle B—International Climate Change Programs 

Sec. 321. Strategic Interagency Board on International Climate Investment. 

Sec. 322. Emission reductions from reduced deforestation. 

‘‘PART E—SUPPLEMENTAL EMISSION REDUCTIONS

‘‘Sec. 751. Definitions. 

‘‘Sec. 752. Purposes. 

‘‘Sec. 753. Emission reductions from reduced deforestation. 

Sec. 323. International Clean Energy Deployment Program. 


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Sec. 324. International climate change adaptation and global security program. 

Sec. 325. Evaluation and reports. 

Sec. 326. Report on climate actions of major economies. 

Subtitle C—Adapting to Climate Change 

PART 1—DOMESTIC ADAPTATION

SUBPART A—NATIONAL CLIMATE CHANGE ADAPTATION PROGRAM

Sec. 341. National Climate Change Adaptation Program. 

Sec. 342. Climate services. 

SUBPART B—PUBLIC HEALTH AND CLIMATE CHANGE

Sec. 351. Sense of Congress on public health and climate change. 

Sec. 352. Relationship to other laws. 

Sec. 353. National strategic action plan. 

Sec. 354. Advisory board. 

Sec. 355. Reports. 

Sec. 356. Definitions. 

SUBPART C—CLIMATE CHANGE SAFEGUARDS FOR NATURAL RESOURCES

CONSERVATION

Sec. 361. Purposes. 

Sec. 362. Natural resources climate change adaptation policy. 

Sec. 363. Definitions. 

Sec. 364. Council on Environmental Quality. 

Sec. 365. Natural Resources Climate Change Adaptation Panel. 

Sec. 366. Natural Resources Climate Change Adaptation Strategy. 

Sec. 367. Natural resources adaptation science and information. 

Sec. 368. Federal natural resource agency adaptation plans. 

Sec. 369. State natural resources adaptation plans. 

Sec. 370. Natural Resources Climate Change Adaptation Account. 

Sec. 371. National Fish and Wildlife Habitat and Corridors Information Program. 

Sec. 372. Additional provisions regarding Indian tribes. 

SUBPART D—ADDITIONAL CLIMATE CHANGE ADAPTATION PROGRAMS

Sec. 381. Water system mitigation and adaption partnerships. 

Sec. 382. Flood control, protection, prevention, and response. 

Sec. 383. Wildfire. 

Sec. 384. Coastal and Great Lakes State adaptation program. 

DIVISION B—POLLUTION REDUCTION AND INVESTMENT 

TITLE I—REDUCING GLOBAL WARMING POLLUTION 

Subtitle A—Reducing Global Warming Pollution 

Sec. 101. Reducing global warming pollution. 

‘‘TITLE VII—GLOBAL WARMING POLLUTION REDUCTION AND 

INVESTMENT PROGRAM 

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


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‘‘Sec. 701. Findings. 

‘‘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. 

‘‘Sec. 714. Perfluorocarbon regulation. 

‘‘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. Market Stability 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. Office of Offsets Integrity. 

‘‘Sec. 744. International offset credits. 

Sec. 102. Definitions. 

‘‘Sec. 700. Definitions. 

Sec. 103. Offset reporting requirements. 

Subtitle B—Disposition of Allowances 

Sec. 111. Disposition of allowances for global warming pollution reduction program. 

‘‘PART H—DISPOSITION OF ALLOWANCES

‘‘Sec. 771. Allocation of emission allowances. 

‘‘Sec. 772. Electricity consumers. 

‘‘Sec. 773. Natural gas consumers. 

‘‘Sec. 774. Home heating oil and propane consumers. 


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‘‘Sec. 775. Domestic fuel production. 

‘‘Sec. 776. Consumer protection. 

‘‘Sec. 777. Exchange for State-issued allowances. 

‘‘Sec. 778. Auction procedures. 

‘‘Sec. 779. Auctioning allowances for other entities. 

‘‘Sec. 780. Commercial deployment of carbon capture and sequestration 

technologies. 

‘‘Sec. 781. Oversight of allocations. 

‘‘Sec. 782. Early action recognition. 

‘‘Sec. 783. Establishment of Deficit Reduction Fund. 

Subtitle C—Additional Greenhouse Gas Standards 

Sec. 121. Greenhouse gas standards. 

‘‘TITLE VIII—ADDITIONAL GREENHOUSE GAS STANDARDS 

‘‘Sec. 801. Definitions. 

‘‘PART A—STATIONARY SOURCE STANDARDS

‘‘Sec. 811. Standards of performance. 

Sec. 122. HFC regulation. 

‘‘Sec. 619. Hydrofluorocarbons (HFCs). 

Sec. 123. Black carbon. 

‘‘PART E—BLACK CARBON

‘‘Sec. 851. Black carbon. 

Sec. 124. States. 

Sec. 125. State programs. 

‘‘PART F—MISCELLANEOUS

‘‘Sec. 861. State programs. 

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

Sec. 126. Enforcement. 

Sec. 127. Conforming amendments. 

Sec. 128. Davis-Bacon compliance. 

Subtitle D—Carbon Market Assurance 

Sec. 131. Carbon market assurance. 

Subtitle E—Ensuring Real Reductions in Industrial Emissions 

Sec. 141. Ensuring real reductions in industrial emissions. 

‘‘PART F—ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS

‘‘Sec. 761. Purposes. 

‘‘Sec. 762. Definitions. 

‘‘Sec. 763. Eligible industrial sectors. 

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

‘‘Sec. 765. International trade. 

TITLE II—PROGRAM ALLOCATIONS 

Sec. 201. Investment in clean vehicle technology. 


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Sec. 202. State and local investment in energy efficiency and renewable energy. 

Sec. 203. Energy efficiency in building codes. 

Sec. 204. Building retrofit program. 

Sec. 205. Energy Innovation Hubs. 

Sec. 206. ARPA–E research. 

Sec. 207. International clean energy deployment program. 

Sec. 208. International climate change adaptation and global security. 

Sec. 209. Energy efficiency and renewable energy worker training. 

Sec. 210. Worker transition. 

Sec. 211. State programs for greenhouse gas reduction and climate adaptation. 

Sec. 212. Climate Change Health Protection and Promotion Fund. 

Sec. 213. Climate change safeguards for natural resources conservation. 

Sec. 214. Nuclear worker training. 

Sec. 215. Supplemental agriculture, renewable energy, and forestry. 

1 SEC. 2. FINDINGS. 

2 Congress finds that— 

3 (1) the United States can take back control of 

4 the energy future of the United States, strengthen 

5 economic competitiveness, safeguard the health of 

6 families and the environment, and ensure the na7 tional security, of the United States by increasing 

8 energy independence; 

9 (2) creating a clean energy future requires a 

10 comprehensive approach that includes support for 

11 the improvement of all energy sources, including 

12 coal, natural gas, nuclear power, and renewable gen13 eration; 

14 (3) efficiency in the energy sector also rep15 resents a critical avenue to reduce energy consump16 tion and carbon pollution, and those benefits can be 

17 captured while generating additional savings for con18 sumers; 


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1 (4) substantially increasing the investment in 

2 the clean energy future of the United States will 

3 provide economic opportunities to millions of people 

4 in the United States and drive future economic 

5 growth in this country; 

6 (5) the United States is responsible for many of 

7 the initial scientific advances in clean energy tech8 nology, but, as of September 2009, the United 

9 States has only 5 of the top 30 leading companies 

10 in solar, wind, and advanced battery technology; 

11 (6) investment in the clean energy sector will 

12 allow companies in the United States to retake a 

13 leadership position, and the jobs created by those in14 vestments will significantly accelerate growth in do15 mestic manufacturing; 

16 (7) those opportunities also will result in sub17 stantial employment gains in construction, a sector 

18 in which the median hourly wage is 17 percent high19 er than the national median; 

20 (8) those jobs are distributed throughout the 

21 United States, and the highest clean energy economy 

22 employment growth rates in the last 10 years were 

23 in the States of Idaho, Nebraska, South Dakota, Or24 egon, and New Mexico; 


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1 (9) focusing on clean energy will dramatically 

2 reduce pollution and significantly improve the health 

3 of families in and the environment of the United 

4 States; 

5 (10) moving to a low-carbon economy must pro6 tect the most vulnerable populations in the United 

7 States, including low-income families that are par8 ticularly affected by volatility in energy prices; 

9 (11) if unchecked, the impact of climate change 

10 will include widespread effects on health and welfare, 

11 including— 

12 (A) increased outbreaks from waterborne 

13 diseases; 

14 (B) more droughts; 

15 (C) diminished agricultural production; 

16 (D) severe storms and floods; 

17 (E) heat waves; 

18 (F) wildfires; and 

19 (G) a substantial rise in sea levels, due in 

20 part to— 

21 (i) melting mountain glaciers; 

22 (ii) shrinking sea ice; and 

23 (iii) thawing permafrost; 


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1 (12) the most recent science indicates that the 

2 changes described in paragraph (11)(G) are occur3 ring faster and with greater intensity than expected; 

4 (13) military officials, including retired admi5 rals and generals, concur with the intelligence com6 munity that climate change acts as a threat multi7 plier for instability and presents significant national 

8 security challenges for the United States; 

9 (14) massive portions of the infrastructure of 

10 the United States, including critical military infra11 structure, are at risk from the effects of climate 

12 change; 

13 (15) impacts are already being felt in local com14 munities within the United States as well as by at15 risk populations abroad; 

16 (16) the Declaration of the Leaders from the 

17 Major Economies Forum on Energy and Climate, 

18 representing 17 of the largest economies in the 

19 world, recognizes the need to limit the increase in 

20 global average temperatures to within 2 degrees 

21 Centigrade, as a necessary step to prevent the cata22 strophic consequences of climate change; and 

23 (17) the United States should lead the global 

24 community in combating the threat of global climate 

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1 ment to address global warming under the United 

2 Nations Framework Convention on Climate Change, 

3 done at New York on May 9, 1992 (or a successor 

4 agreement). 

5 SEC. 3. ECONOMY-WIDE EMISSION REDUCTION GOALS. 

6 The goals of this Act and the amendments made by 

7 this Act are to reduce steadily the quantity of United 

8 States greenhouse gas emissions such that— 

9 (1) in 2012, the quantity of United States 

10 greenhouse gas emissions does not exceed 97 percent 

11 of the quantity of United States greenhouse gas 

12 emissions in 2005; 

13 (2) in 2020, the quantity of United States 

14 greenhouse gas emissions does not exceed 80 percent 

15 of the quantity of United States greenhouse gas 

16 emissions in 2005; 

17 (3) in 2030, the quantity of United States 

18 greenhouse gas emissions does not exceed 58 percent 

19 of the quantity of United States greenhouse gas 

20 emissions in 2005; and 

21 (4) in 2050, the quantity of United States 

22 greenhouse gas emissions does not exceed 17 percent 

23 of the quantity of United States greenhouse gas 

24 emissions in 2005. 


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1 SEC. 4. DEFINITIONS. 

2 In this Act: 

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

6 (2) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 

7 has the meaning given the term in section 302 of the 

8 Clean Air Act (42 U.S.C. 7602). 

9 (3) STATE.—The term ‘‘State’’ has the mean10 ing given that term in section 302 of the Clean Air 

11 Act (42 U.S.C. 7602). 

12 DIVISION A—AUTHORIZATIONS 

13 FOR POLLUTION REDUCTION, 

14 TRANSITION, AND ADAPTA15 TION 

16 SEC. 101. STRUCTURE OF ACT. 

17 (a) AUTHORIZED AND ALLOCATED PROGRAMS.—The 

18 following programs authorized under this division are eli19 gible to receive an allocation under title VII of the Clean 

20 Air Act: 

21 (1) The program for greenhouse gas emission 

22 reductions through transportation efficiency under 

23 part C of title VIII the Clean Air Act (as added by 

24 sections 112 and 113 of this division). 


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1 (2) The program for nuclear worker training 

2 under section 132 of this division and 214 of divi3 sion B. 

4 (3) State recycling programs under section 154 

5 of this division and section 211 of division B. 

6 (4) The supplemental agriculture and forestry 

7 greenhouse gas reduction and renewable energy pro8 gram under section 155 of this division and section 

9 215 of division B. 

10 (5) The program for energy efficiency in build11 ing codes under section 163 of this division and sec12 tion 203 of division B. 

13 (6) The program for retrofit for energy and en14 vironmental performance under section 164 of this 

15 division and section 204 of division B. 

16 (7) The program for worker transition under 

17 part 2 of subtitle A of title III of this division and 

18 section 210 of division B. 

19 (8) The program for public health and climate 

20 change under subpart B of part 1 of subtitle C of 

21 title III of this division and section 212 of division 

22 B. 

23 (9) The program for climate change safeguards 

24 for natural resources conservation under subpart C 


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1 of part 1 of subtitle C of title III of this division and 

2 section 213 of division B. 

3 (10) The program for emission reductions from 

4 reduced deforestation under section 753 of the Clean 

5 Air Act (as added by section 322 of this division) 

6 and section 771(d) of the Clean Air Act (as added 

7 by section 111 of division B). 

8 (11) The International Clean Energy Deploy9 ment Program under section 323 of this division and 

10 section 207 of division B. 

11 (12) The international climate change adapta12 tion and global security program under 324 of this 

13 division and section 208 of division B. 

14 (13) The program for water system mitigation 

15 and adaptation partnerships under section 381 of 

16 this division and section 211 of division B. 

17 (14) The program for flood control, protection, 

18 prevention, and response under section 382 of this 

19 division and section 211 of division B. 

20 (15) The program for wildfire under section 

21 383 of this division and section 211 of division B. 

22 (16) The Coastal and Great Lakes State Adap23 tation Program under section 384 of this division 

24 and section 211 of division B. 


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1 (b) ALLOCATED PROGRAMS.—The following alloca2 tions are provided under title VII of the Clean Air Act: 

3 (1) The Market Stability Reserve Fund under 

4 section 726 of the Clean Air Act (as added by sec5 tion 101 of division B). 

6 (2) The program to ensure real reductions in 

7 industrial emissions under part F of title VII of the 

8 Clean Air Act (as added by section 141 of division 

9 B). 

10 (3) The program for electricity consumers pur11 suant to section 772 of the Clean Air Act (as added 

12 by section 111 of division B). 

13 (4) The program for natural gas consumers 

14 pursuant to section 773 of the Clean Air Act (as 

15 added by section 111 of division B). 

16 (5) The program for home heating oil and pro17 pane consumers pursuant to section 774 of the 

18 Clean Air Act (as added by section 111 of division 

19 B). 

20 (6) The program for domestic fuel production, 

21 including petroleum refiners and small business re22 finers, under section 775 of the Clean Air Act (as 

23 added by section 111 of division B). 

24 (7) The program for climate change consumer 

25 refunds and low- and moderate-income consumers 


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1 pursuant to section 776 of the Clean Air Act (as 

2 added by section 111 of division B), including— 

3 (A) consumer rebates under section 776(a) 

4 of the Clean Air Act (as so added); and 

5 (B) energy refunds under section 776(b) of 

6 the Clean Air Act (as so added). 

7 (8) The program for commercial deployment of 

8 carbon capture and storage technology under section 

9 780 of the Clean Air Act (as added by section 111 

10 of division B). 

11 (9) The program for early action recognition 

12 pursuant to section 782 of the Clean Air Act (as 

13 added by section 111 of division B). 

14 (10) The program for investment in clean vehi15 cle technology under section 201 of division B. 

16 (11) The program for State and local invest17 ment in energy efficiency and renewable energy 

18 under section 202 of division B. 

19 (12) The program for Energy Innovation Hubs 

20 pursuant to section 205 of division B. 

21 (13) The program for ARPA–E research pursu22 ant to section 206 of division B. 

23 (14) The program for energy efficiency and re24 newable energy worker training under section 209 of 

25 division B. 


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1 (15) The State programs for greenhouse gas re2 duction and climate adaptation pursuant to section 

3 211 of division B. 

4 (c) NONALLOCATED PROGRAMS.—The following pro5 grams are authorized under this division: 

6 (1) The SmartWay Transportation Efficiency 

7 Program under section 822 of the Clean Air Act (as 

8 added by section 114 of this division). 

9 (2) The carbon capture and sequestration dem10 onstration and early deployment program under sec11 tion 125 of this division. 

12 (3) The nuclear safety and waste management 

13 programs under section 133 of this division. 

14 (4) Water efficiency programs under subtitle D 

15 of title I of this division. 

16 (5) The Office of Consumer Advocacy under 

17 section 151 of this division. 

18 (6) The clean technology business competition 

19 grant program under section 152 of this division. 

20 (7) The product carbon disclosure program 

21 under section 153 of this division. 

22 (8) The Economic Development Climate 

23 Change Fund under section 219 of the Public Works 

24 and Economic Development Act of 1965 (as added 

25 by section 156 of this division). 


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1 (9) The program for renewable energy under 

2 section 161 of this division. 

3 (10) The program for advanced biofuels under 

4 section 162 of this division. 

5 (11) The program for emission reductions from 

6 public transportation vehicles under subtitle G of 

7 title I of this division. 

8 (12) The Clean Energy and Accelerated Emis9 sion Reduction Program under section 181 of this 

10 division. 

11 (13) The program for advanced natural gas 

12 technologies under section 182 of this division. 

13 (14) The program for advanced energy research 

14 under subtitle A of title II of this division. 

15 (15) The program for drinking water adapta16 tion, technology, education, and research under sub17 title B of title II of this division. 

18 (16) The program for clean energy curriculum 

19 development grants under section 301 of this divi20 sion. 

21 (17) The program for Development of Informa22 tion and Resources clearinghouse for vocational edu23 cation and job training in renewable energy sectors 

24 under section 302 of this division. 


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1 (18) The green construction careers demonstra2 tion project under section 303 of this division. 

3 TITLE I—GREENHOUSE GAS 

4 REDUCTION PROGRAMS 

5 Subtitle A—Clean Transportation 

6 SEC. 111. EMISSION STANDARDS. 

7 Title VIII of the Clean Air Act (as added by section 

8 121 of division B) is amended by adding at the end the 

9 following: 

10 ‘‘PART B—MOBILE SOURCES 

11 ‘‘SEC. 821. GREENHOUSE GAS EMISSION STANDARDS FOR 

12 MOBILE SOURCES. 

13 ‘‘(a) NEW MOTOR VEHICLES AND NEW MOTOR VE14 HICLE ENGINES.—(1) Pursuant to section 202(a)(1), by 

15 December 31, 2010, the Administrator shall promulgate 

16 standards applicable to emissions of greenhouse gases 

17 from new heavy-duty motor vehicles or new heavy-duty 

18 motor vehicle engines, excluding such motor vehicles cov19 ered by the Tier II standards (as established by the Ad20 ministrator as of the date of the enactment of this sec21 tion). The Administrator may revise these standards from 

22 time to time. 

23 ‘‘(2) Regulations issued under section 202(a)(1) ap24 plicable to emissions of greenhouse gases from new heavy25 duty motor vehicles or new heavy-duty motor vehicle enVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 gines, excluding such motor vehicles covered by the Tier 

2 II standards (as established by the Administrator as of 

3 the date of the enactment of this section), shall contain 

4 standards that reflect the greatest degree of emissions re5 duction achievable through the application of technology 

6 which the Administrator determines will be available for 

7 the model year to which such standards apply, giving ap8 propriate consideration to cost, energy, and safety factors 

9 associated with the application of such technology. Any 

10 such regulations shall take effect after such period as the 

11 Administrator finds necessary to permit the development 

12 and application of the requisite technology, and, at a min13 imum, shall apply for a period no less than 3 model years 

14 beginning no earlier than the model year commencing 4 

15 years after such regulations are promulgated. 

16 ‘‘(3) Regulations issued under section 202(a)(1) ap17 plicable to emissions of greenhouse gases from new heavy18 duty motor vehicles or new heavy-duty motor vehicle en19 gines, excluding such motor vehicles covered by the Tier 

20 II standards (as established by the Administrator as of 

21 the date of the enactment of this section), shall supersede 

22 and satisfy any and all of the rulemaking and compliance 

23 requirements of section 32902(k) of title 49, United 

24 States Code. 


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1 ‘‘(4) Other than as specifically set forth in paragraph 

2 (3) of this subsection, nothing in this section shall affect 

3 or otherwise increase or diminish the authority of the Sec4 retary of Transportation to adopt regulations to improve 

5 the overall fuel efficiency of the commercial goods move6 ment system. 

7 ‘‘(b) NONROAD VEHICLES AND ENGINES.—(1) Pur8 suant to section 213(a)(4) and (5), the Administrator 

9 shall identify those classes or categories of new nonroad 

10 vehicles or engines, or combinations of such classes or cat11 egories, that, in the judgment of the Administrator, both 

12 contribute significantly to the total emissions of green13 house gases from nonroad engines and vehicles, and pro14 vide the greatest potential for significant and cost-effective 

15 reductions in emissions of greenhouse gases. The Adminis16 trator shall promulgate standards applicable to emissions 

17 of greenhouse gases from these new nonroad engines or 

18 vehicles by December 31, 2012. The Administrator shall 

19 also promulgate standards applicable to emissions of 

20 greenhouse gases for such other classes and categories of 

21 new nonroad vehicles and engines as the Administrator de22 termines appropriate and in the timeframe the Adminis23 trator determines appropriate. The Administrator shall 

24 base such determination, among other factors, on the rel25 ative contribution of greenhouse gas emissions, and the 


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1 costs for achieving reductions, from such classes or cat2 egories of new nonroad engines and vehicles. The Adminis3 trator may revise these standards from time to time. 

4 ‘‘(2) Standards under section 213(a)(4) and (5) ap5 plicable to emissions of greenhouse gases from those class6 es or categories of new nonroad engines or vehicles identi7 fied in the first sentence of paragraph (1) of this sub8 section, shall achieve the greatest degree of emissions re9 duction achievable based on the application of technology 

10 which the Administrator determines will be available at 

11 the time such standards take effect, taking into consider12 ation cost, energy, and safety factors associated with the 

13 application of such technology. Any such regulations shall 

14 take effect at the earliest possible date after such period 

15 as the Administrator finds necessary to permit the devel16 opment and application of the requisite technology, giving 

17 appropriate consideration to the cost of compliance within 

18 such period, the applicable compliance dates for other 

19 standards, and other appropriate factors, including the pe20 riod of time appropriate for the transfer of applicable tech21 nology from other applications, including motor vehicles, 

22 and the period of time in which previously promulgated 

23 regulations have been in effect. 

24 ‘‘(3) For purposes of this section and standards 

25 under section 213(a)(4) or (5) applicable to emissions of 


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1 greenhouse gases, the term ‘nonroad engines and vehicles’ 

2 shall include non-internal combustion engines and the ve3 hicles these engines power (such as electric engines and 

4 electric vehicles), for those non-internal combustion en5 gines and vehicles which would be in the same category 

6 and have the same uses as nonroad engines and vehicles 

7 that are powered by internal combustion engines. 

8 ‘‘(c) AVERAGING, BANKING, AND TRADING OF EMIS9 SIONS CREDITS.—In establishing standards applicable to 

10 emissions of greenhouse gases pursuant to this section and 

11 sections 202(a), 213(a)(4) and (5), and 231(a), the Ad12 ministrator may establish provisions for averaging, bank13 ing, and trading of greenhouse gas emissions credits with14 in or across classes or categories of motor vehicles and 

15 motor vehicle engines, nonroad vehicles and engines (in16 cluding marine vessels), and aircraft and aircraft engines, 

17 to the extent the Administrator determines appropriate 

18 and considering the factors appropriate in setting stand19 ards under those sections. Such provisions may include 

20 reasonable and appropriate provisions concerning genera21 tion, banking, trading, duration, and use of credits. 

22 ‘‘(d) REPORTS.—The Administrator shall, from time 

23 to time, submit a report to Congress that projects the 

24 amount of greenhouse gas emissions from the transpor25 tation sector, including transportation fuels, for the years 


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1 2030 and 2050, based on the standards adopted under 

2 this section. 

3 ‘‘(e) GREENHOUSE GASES.—Notwithstanding the 

4 provisions of section 711, hydrofluorocarbons shall be con5 sidered a greenhouse gas for purposes of this section.’’. 

6 SEC. 112. GREENHOUSE GAS EMISSION REDUCTIONS 

7 THROUGH TRANSPORTATION EFFICIENCY. 

8 (a) ENVIRONMENTAL PROTECTION AGENCY.—Title 

9 VIII of the Clean Air Act (as amended by section 111 

10 of this division) is amended by adding at the end the fol11 lowing: 

12 ‘‘PART C—TRANSPORTATION EMISSIONS 

13 ‘‘SEC. 831. GREENHOUSE GAS EMISSION REDUCTIONS 

14 THROUGH TRANSPORTATION EFFICIENCY. 

15 ‘‘(a) IN GENERAL.—The Administrator, in consulta16 tion with the Secretary of Transportation (referred to in 

17 this part as the ‘Secretary’), shall promulgate, and update 

18 from time to time, regulations to establish— 

19 ‘‘(1) national transportation-related greenhouse 

20 gas emission reduction goals that are commensurate 

21 with the emission reduction goals established under 

22 the Clean Energy Jobs and American Power Act 

23 and amendments made by that Act; 

24 ‘‘(2) standardized emission models and related 

25 methods, to be used by States, metropolitan planVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 ning organizations, and air quality agencies to ad2 dress emission reduction goals, including— 

3 ‘‘(A) the development of surface transpor4 tation-related greenhouse gas emission reduc5 tion targets pursuant to sections 134 and 135 

6 of title 23, and sections 5303 and 5304 of title 

7 49, United States Code; 

8 ‘‘(B) the assessment of projected surface 

9 transportation-related greenhouse gas emissions 

10 from transportation strategies; 

11 ‘‘(C) the assessment of projected surface 

12 transportation-related greenhouse gas emissions 

13 from State and regional transportation plans; 

14 ‘‘(D) the establishment of surface trans15 portation-related greenhouse gas emission base16 lines at a national, State, and regional level; 

17 and 

18 ‘‘(E) the measurement and assessment of 

19 actual surface transportation-related emissions 

20 to assess progress toward achievement of emis21 sion targets at the State and regional level; 

22 ‘‘(3) methods for collection of data on transpor23 tation-related greenhouse gas emissions; and 

24 ‘‘(4) publication and distribution of successful 

25 strategies employed by States, metropolitan planning 


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1 organizations, and other entities to reduce transpor2 tation-related greenhouse gas emissions. 

3 ‘‘(b) ROLE OF DEPARTMENT OF TRANSPOR4 TATION.—The Secretary, in consultation with the Admin5 istrator, shall promulgate, and update from time to time, 

6 regulations— 

7 ‘‘(1) to improve the ability of transportation 

8 planning models and tools, including travel demand 

9 models, to address greenhouse gas emissions; 

10 ‘‘(2) to assess projected surface transportation11 related travel activity and transportation strategies 

12 from State and regional transportation plans; and 

13 ‘‘(3) to update transportation planning require14 ments and approval of transportation plans as nec15 essary to carry out this section. 

16 ‘‘(c) CONSULTATION AND MODELS.—In promul17 gating the regulations, the Administrator and the Sec18 retary— 

19 ‘‘(1) shall consult with States, metropolitan 

20 planning organizations, and air quality agencies; 

21 ‘‘(2) may use existing models and methodolo22 gies if the models and methodologies are widely con23 sidered to reflect the best practicable modeling or 

24 methodological approach for assessing actual and 

25 projected transportation-related greenhouse gas 


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1 emissions from transportation plans and projects; 

2 and 

3 ‘‘(3) shall consider previously developed plans 

4 that were based on models and methodologies for re5 ducing greenhouse gas emissions in applying those 

6 regulations to the first approvals after promulgation. 

7 ‘‘(d) TIMING.—The Administrator and the Secretary 

8 shall— 

9 ‘‘(1) publish proposed regulations under sub10 sections (a) and (b) not later than 1 year after the 

11 date of enactment of this section; and 

12 ‘‘(2) promulgate final regulations under sub13 sections (a) and (b) not later than 18 months after 

14 the date of enactment of this section. 

15 ‘‘(e) ASSESSMENT.— 

16 ‘‘(1) IN GENERAL.—At least every 6 years after 

17 promulgating final regulations under subsections (a) 

18 and (b), the Administrator and the Secretary shall 

19 jointly assess current and projected progress in re20 ducing national transportation-related greenhouse 

21 gas emissions. 

22 ‘‘(2) REQUIREMENTS.—The assessment shall 

23 examine the contributions to emission reductions at24 tributable to— 

25 ‘‘(A) improvements in vehicle efficiency; 


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1 ‘‘(B) greenhouse gas performance of trans2 portation fuels; 

3 ‘‘(C) reductions in vehicle miles traveled; 

4 ‘‘(D) changes in consumer demand and use 

5 of transportation management systems; and 

6 ‘‘(E) any other greenhouse gas-related 

7 transportation policies enacted by Congress. 

8 ‘‘(3) RESULTS OF ASSESSMENT.—The Sec9 retary and the Administrator shall consider— 

10 ‘‘(A) the results of the assessment con11 ducted under this subsection; and 

12 ‘‘(B) based on those results, whether tech13 nical or other updates to regulations required 

14 under this section and sections 134 and 135 of 

15 title 23, and sections 5303 and 5304 of title 49, 

16 United States Code, are necessary.’’. 

17 (b) METROPOLITAN PLANNING ORGANIZATIONS.— 

18 (1) TITLE 23.—Section 134 of title 23, United 

19 States Code, is amended— 

20 (A) in subsection (a)(1)— 

21 (i) by striking ‘‘minimizing’’ and in22 serting ‘‘reducing’’; and 

23 (ii) by inserting ‘‘, reliance on oil, im24 pacts on the environment, transportationVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 related greenhouse gas emissions,’’ after 

2 ‘‘consumption’’; 

3 (B) in subsection (h)(1)(E)— 

4 (i) by inserting ‘‘sustainability, and 

5 livability, reduce surface transportation-re6 lated greenhouse gas emissions and reli7 ance on oil, adapt to the effects of climate 

8 change,’’ after ‘‘energy conservation,’’; 

9 (ii) by inserting ‘‘and public health’’ 

10 after ‘‘quality of life’’; and 

11 (iii) by inserting ‘‘, including housing 

12 and land use patterns’’ after ‘‘development 

13 patterns’’; 

14 (C) in subsection (i)— 

15 (i) in paragraph (4)(A)— 

16 (I) by striking ‘‘consult, as ap17 propriate,’’ and inserting ‘‘cooperate’’; 

18 (II) by inserting ‘‘transportation, 

19 public transportation, air quality, and 

20 housing, and shall consult, as appro21 priate, with State and local agencies 

22 responsible for’’ after ‘‘responsible 

23 for’’ and 

24 (III) by inserting ‘‘public 

25 health,’’ after ‘‘conservation,’’; and 


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1 (ii) in paragraph (5)(C)(iii), by insert2 ing ‘‘and through the website of the metro3 politan planning organization, including 

4 emission reduction targets and strategies 

5 developed under subsection (k)(6), includ6 ing an analysis of the anticipated effects of 

7 the targets and strategies,’’ after ‘‘World 

8 Wide Web’’; and 

9 (D) in subsection (k), by adding at the end 

10 the following: 

11 ‘‘(6) TRANSPORTATION GREENHOUSE GAS RE12 DUCTION EFFORTS.— 

13 ‘‘(A) IN GENERAL.—Within a metropolitan 

14 planning area serving a transportation manage15 ment area, the transportation planning process 

16 under this section shall address transportation17 related greenhouse gas emissions by including 

18 emission reduction targets and strategies to 

19 meet those targets. 

20 ‘‘(B) ELIGIBLE ORGANIZATIONS.— 

21 ‘‘(i) MPOS WITHIN TMAS.—All provi22 sions and requirements of this section, in23 cluding the requirements of the transpor24 tation greenhouse gas reduction efforts, 

25 shall apply to metropolitan planning orgaVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 nizations that also serve as transportation 

2 management areas. 

3 ‘‘(ii) OTHER MPOS.—A metropolitan 

4 planning organization that does not serve 

5 as a transportation management area— 

6 ‘‘(I) may develop transportation 

7 greenhouse gas emission reduction 

8 targets and strategies to meet those 

9 targets; and 

10 ‘‘(II) if those targets and strate11 gies are developed, shall be subject to 

12 all applicable provisions and require13 ments of this section and the Clean 

14 Energy Jobs and American Power 

15 Act, including requirements of the 

16 transportation greenhouse gas reduc17 tion efforts. 

18 ‘‘(C) ESTABLISHMENT OF TARGETS AND

19 CRITERIA.— 

20 ‘‘(i) IN GENERAL.—Not later than 2 

21 years after the promulgation of the final 

22 regulations required under section 831 of 

23 the Clean Air Act, each metropolitan plan24 ning organization that also serves as a 

25 transportation management area shall deVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 velop surface transportation-related green2 house gas emission reduction targets, as 

3 well as strategies to meet those targets, in 

4 consultation with State air agencies as 

5 part of the metropolitan transportation 

6 planning process under this section. 

7 ‘‘(ii) MULTIPLE DESIGNATIONS.—If 

8 more than 1 metropolitan planning organi9 zation has been designated within a metro10 politan area, each metropolitan planning 

11 organization shall coordinate with other 

12 metropolitan planning organizations in the 

13 same metropolitan area to develop the tar14 gets and strategies described in clause (i). 

15 ‘‘(iii) MINIMUM REQUIREMENTS.— 

16 Each metropolitan transportation plan de17 veloped by a metropolitan planning organi18 zation under clause (i) shall, within the 

19 plan, demonstrate progress in stabilizing 

20 and reducing transportation-related green21 house gas emissions so as to contribute to 

22 the achievement of State targets pursuant 

23 to section 135(f)(9). 

24 ‘‘(iv) REQUIREMENTS FOR TARGETS

25 AND STRATEGIES.—The targets and stratVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 egies developed under this subparagraph 

2 shall, at a minimum— 

3 ‘‘(I) be based on the emission 

4 and travel demand models and related 

5 methodologies established in the final 

6 regulations required under section 

7 831 of the Clean Air Act; 

8 ‘‘(II) inventory all sources of sur9 face transportation-related greenhouse 

10 gas emissions; 

11 ‘‘(III) apply to those modes of 

12 surface transportation that are ad13 dressed in the planning process under 

14 this section; 

15 ‘‘(IV) be integrated and con16 sistent with regional transportation 

17 plans and transportation improvement 

18 programs; and 

19 ‘‘(V) be selected through scenario 

20 analysis, and include, pursuant to the 

21 requirements of the transportation 

22 planning process under this section, 

23 transportation investment and man24 agement strategies that reduce green25 house gas emissions from the transVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 portation sector over the life of the 

2 plan, such as— 

3 ‘‘(aa) efforts to increase 

4 public transportation ridership, 

5 including through service im6 provements, capacity expansions, 

7 and access enhancement; 

8 ‘‘(bb) efforts to increase 

9 walking, bicycling, and other 

10 forms of nonmotorized transpor11 tation; 

12 ‘‘(cc) implementation of zon13 ing and other land use regula14 tions and plans to support infill, 

15 transit-oriented development, re16 development, or mixed use devel17 opment; 

18 ‘‘(dd) travel demand man19 agement programs (including 

20 carpool, vanpool, or car-share 

21 projects), transportation pricing 

22 measures, parking policies, and 

23 programs to promote telecom24 muting, flexible work schedules, 

25 and satellite work centers; 


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1 ‘‘(ee) surface transportation 

2 system operation improvements, 

3 including intelligent transpor4 tation systems or other oper5 ational improvements to reduce 

6 long-term greenhouse gas emis7 sions through reduced congestion 

8 and improved system manage9 ment; 

10 ‘‘(ff) intercity passenger rail 

11 improvements; 

12 ‘‘(gg) intercity bus improve13 ments; 

14 ‘‘(hh) freight rail improve15 ments; 

16 ‘‘(ii) use of materials or 

17 equipment associated with the 

18 construction or maintenance of 

19 transportation projects that re20 duce greenhouse gas emissions; 

21 ‘‘(jj) public facilities for sup22 plying electricity to electric or 

23 plug-in hybrid-electric vehicles; or 

24 ‘‘(kk) any other effort that 

25 demonstrates progress in reducVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 ing transportation-related green2 house gas emissions in each met3 ropolitan planning organization 

4 under this subsection. 

5 ‘‘(D) REVIEW AND APPROVAL.—Not later 

6 than 180 days after the date of submission of 

7 a plan under this section— 

8 ‘‘(i) the Secretary and the Adminis9 trator shall review the plan; and 

10 ‘‘(ii) the Secretary shall approve a 

11 plan developed by a metropolitan planning 

12 organization pursuant to subparagraph (C) 

13 if— 

14 ‘‘(I) the Secretary finds that a 

15 metropolitan planning organization 

16 has developed, submitted, and pub17 lished the plan of the metropolitan 

18 planning organization pursuant to this 

19 section; 

20 ‘‘(II) the Secretary, in consulta21 tion with the Administrator, deter22 mines that the plan is likely to achieve 

23 the targets established by the metro24 politan planning organization under 

25 this subsection; and 


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1 ‘‘(III) the development of the 

2 plan complies with the minimum re3 quirements established under clauses 

4 (iii) and (iv) of subparagraph (C). 

5 ‘‘(E) CERTIFICATION.—Failure to comply 

6 with the requirements under subparagraph (C) 

7 shall not impact certification standards under 

8 paragraph (5). 

9 ‘‘(7) DEFINITION OF METROPOLITAN PLANNING

10 ORGANIZATION.—In this subsection, the term ‘met11 ropolitan planning organization’ means a metropoli12 tan planning organization described in clause (i) or 

13 (ii) of paragraph (6)(B). 

14 ‘‘(8) SCENARIO ANALYSIS.—The term ‘scenario 

15 analysis’ means the use of a planning tool that— 

16 ‘‘(A) develops a range of scenarios rep17 resenting various combinations of transpor18 tation and land use strategies, and estimates of 

19 how each of those scenarios would perform in 

20 meeting the greenhouse gas emission reduction 

21 targets based on analysis of various forces 

22 (such as health, transportation, economic or en23 vironmental factors, and land use) that affect 

24 growth; 

25 ‘‘(B) may include features such as— 


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1 ‘‘(i) the involvement of the general 

2 public, key stakeholders, and elected offi3 cials on a broad scale; 

4 ‘‘(ii) the creation of an opportunity 

5 for those participants to educate each 

6 other as to growth trends and trade-offs, 

7 as a means to incorporate values and feed8 back into future plans; and 

9 ‘‘(iii) the use of continuing efforts and 

10 ongoing processes; and 

11 ‘‘(C) may include key elements such as— 

12 ‘‘(i) identification of the driving forces 

13 behind planning decisions and outcomes; 

14 ‘‘(ii) determination of patterns of 

15 interaction; 

16 ‘‘(iii) creation of scenarios for discus17 sion purposes; 

18 ‘‘(iv) analysis of implications; 

19 ‘‘(v) evaluation of scenarios; and 

20 ‘‘(vi) use of monitoring indicators.’’. 

21 (2) TITLE 49.—Section 5303 of title 49, United 

22 States Code, is amended— 

23 (A) in subsection (a)(1)— 

24 (i) by striking ‘‘minimizing’’ and in25 serting ‘‘reducing’’; and 


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1 (ii) by inserting ‘‘, reliance on oil, im2 pacts on the environment, transportation3 related greenhouse gas emissions,’’ after 

4 ‘‘consumption’’; 

5 (B) in subsection (h)(1)(E)— 

6 (i) by inserting ‘‘sustainability, and 

7 livability, reduce surface transportation-re8 lated greenhouse gas emissions and reli9 ance on oil, adapt to the effects of climate 

10 change,’’ after ‘‘energy conservation,’’; 

11 (ii) by inserting ‘‘and public health’’ 

12 after ‘‘quality of life’’; and 

13 (iii) by inserting ‘‘, including housing 

14 and land use patterns’’ after ‘‘development 

15 patterns’’; 

16 (C) in subsection (i)— 

17 (i) in paragraph (4)(A)— 

18 (I) by striking ‘‘consult, as ap19 propriate,’’ and inserting ‘‘cooperate’’; 

20 (II) by inserting ‘‘transportation, 

21 public transportation, air quality, and 

22 housing, and shall consult, as appro23 priate, with State and local agencies 

24 responsible for’’ after ‘‘responsible 

25 for’’; and 


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1 (III) by inserting ‘‘public 

2 health,’’ after ‘‘conservation,’’; and 

3 (ii) in paragraph (5)(C)(iii), by insert4 ing ‘‘and through the website of the metro5 politan planning organization, including 

6 emission reduction targets and strategies 

7 developed under subsection (k)(6), includ8 ing an analysis of the anticipated effects of 

9 the targets and strategies,’’ after ‘‘World 

10 Wide Web’’; and 

11 (D) in subsection (k), by adding at the end 

12 the following: 

13 ‘‘(6) TRANSPORTATION GREENHOUSE GAS RE14 DUCTION EFFORTS.— 

15 ‘‘(A) IN GENERAL.—Within a metropolitan 

16 planning area serving a transportation manage17 ment area, the transportation planning process 

18 under this section shall address transportation19 related greenhouse gas emissions by including 

20 emission reduction targets and strategies to 

21 meet those targets. 

22 ‘‘(B) ELIGIBLE ORGANIZATIONS.— 

23 ‘‘(i) IN GENERAL.—The requirements 

24 of the transportation greenhouse gas re25 duction efforts shall apply only to metroVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 politan planning organizations within a 

2 transportation management area. 

3 ‘‘(ii) DEVELOPMENT OF PLAN.—A 

4 metropolitan planning organization that 

5 does not serve as a transportation manage6 ment area— 

7 ‘‘(I) may develop transportation 

8 greenhouse gas emission reduction 

9 targets and strategies to meet those 

10 targets; and 

11 ‘‘(II) if those targets and strate12 gies are developed, shall be subject to 

13 all provisions and requirements of this 

14 section, including requirements of the 

15 transportation greenhouse gas reduc16 tion efforts. 

17 ‘‘(C) ESTABLISHMENT OF TARGETS AND

18 CRITERIA.— 

19 ‘‘(i) IN GENERAL.—Not later than 2 

20 years after the promulgation of the final 

21 regulations required under section 831 of 

22 the Clean Air Act, each metropolitan plan23 ning organization shall develop surface 

24 transportation-related greenhouse gas 

25 emission reduction targets, as well as 


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1 strategies to meet those targets, in con2 sultation with State air agencies as part of 

3 the metropolitan transportation planning 

4 process under this section. 

5 ‘‘(ii) MULTIPLE DESIGNATIONS.—If 

6 more than 1 metropolitan planning organi7 zation has been designated within a metro8 politan area, each metropolitan planning 

9 organization shall coordinate with other 

10 metropolitan planning organizations in the 

11 same metropolitan area to develop the tar12 gets and strategies described in clause (i). 

13 ‘‘(iii) MINIMUM REQUIREMENTS.— 

14 Each metropolitan transportation plan de15 veloped by a metropolitan planning organi16 zation under clause (i) shall, within the 

17 plan, demonstrate progress in stabilizing 

18 and reducing transportation-related green19 house gas emissions so as to contribute to 

20 the achievement of State targets pursuant 

21 to section 135(f)(9) of title 23. 

22 ‘‘(iv) REQUIREMENTS FOR TARGETS

23 AND STRATEGIES.—The targets and strat24 egies developed under this subparagraph 

25 shall, at a minimum— 


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1 ‘‘(I) be based on the emission 

2 models and related methodologies es3 tablished in the final regulations re4 quired under section 831 of the Clean 

5 Air Act; 

6 ‘‘(II) inventory all sources of sur7 face transportation-related greenhouse 

8 gas emissions; 

9 ‘‘(III) apply to those modes of 

10 surface transportation that are ad11 dressed in the planning process under 

12 this section; 

13 ‘‘(IV) be integrated and con14 sistent with regional transportation 

15 plans and transportation improvement 

16 programs; and 

17 ‘‘(V) be selected through scenario 

18 analysis (as defined in section 134(k) 

19 of title 23), and include, pursuant to 

20 the requirements of the transportation 

21 planning process under this section, 

22 transportation investment and man23 agement strategies that reduce green24 house gas emissions from the transVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 portation sector over the life of the 

2 plan, such as— 

3 ‘‘(aa) efforts to increase 

4 public transportation ridership, 

5 including through service im6 provements, capacity expansions, 

7 and access enhancement; 

8 ‘‘(bb) efforts to increase 

9 walking, bicycling, and other 

10 forms of nonmotorized transpor11 tation; 

12 ‘‘(cc) implementation of zon13 ing and other land use regula14 tions and plans to support infill, 

15 transit-oriented development, re16 development, or mixed use devel17 opment; 

18 ‘‘(dd) travel demand man19 agement programs (including 

20 carpool, vanpool, or car-share 

21 projects), transportation pricing 

22 measures, parking policies, and 

23 programs to promote telecom24 muting, flexible work schedules, 

25 and satellite work centers; 


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1 ‘‘(ee) surface transportation 

2 system operation improvements, 

3 including intelligent transpor4 tation systems or other oper5 ational improvements to reduce 

6 long-term greenhouse gas emis7 sions through reduced congestion 

8 and improved system manage9 ment; 

10 ‘‘(ff) intercity passenger rail 

11 improvements; 

12 ‘‘(gg) intercity bus improve13 ments; 

14 ‘‘(hh) freight rail improve15 ments; 

16 ‘‘(ii) use of materials or 

17 equipment associated with the 

18 construction or maintenance of 

19 transportation projects that re20 duce greenhouse gas emissions; 

21 ‘‘(jj) public facilities for sup22 plying electricity to electric or 

23 plug-in hybrid-electric vehicles; or 

24 ‘‘(kk) any other effort that 

25 demonstrates progress in reducVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00045 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 ing transportation-related green2 house gas emissions in each met3 ropolitan planning organization 

4 under this subsection. 

5 ‘‘(D) REVIEW AND APPROVAL.—Not later 

6 than 180 days after the date of submission of 

7 a plan under this section— 

8 ‘‘(i) the Secretary and the Adminis9 trator shall review the plan; and 

10 ‘‘(ii) the Secretary shall approve a 

11 plan developed by a metropolitan planning 

12 organization pursuant to subparagraph (C) 

13 if— 

14 ‘‘(I) the Secretary finds that a 

15 metropolitan planning organization 

16 has developed, submitted, and pub17 lished the plan of the metropolitan 

18 planning organization pursuant to this 

19 section; 

20 ‘‘(II) the Secretary, in consulta21 tion with the Administrator, deter22 mines that the plan is likely to achieve 

23 the targets established by the metro24 politan planning organization under 

25 this subsection; and 


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1 ‘‘(III) the development of the 

2 plan complies with the minimum re3 quirements established under clauses 

4 (iii) and (iv) of subparagraph (C). 

5 ‘‘(E) CERTIFICATION.—Failure to comply 

6 with the requirements under subparagraph (C) 

7 shall not impact certification standards under 

8 paragraph (5). 

9 ‘‘(7) DEFINITION OF METROPOLITAN PLANNING

10 ORGANIZATION.—In this subsection, the term ‘met11 ropolitan planning organization’ means a metropoli12 tan planning organization described in clause (i) or 

13 (ii) of paragraph (6)(B).’’. 

14 (c) STATES.— 

15 (1) TITLE 23.—Section 135 of title 23, United 

16 States Code, is amended— 

17 (A) in subsection (d)(1)(E)— 

18 (i) by inserting ‘‘sustainability, and 

19 livability, reduce surface transportation-re20 lated greenhouse gas emissions and reli21 ance on oil, adapt to the effects of climate 

22 change,’’ after ‘‘energy conservation,’’; 

23 (ii) by inserting ‘‘and public health’’ 

24 after ‘‘quality of life’’; and 


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1 (iii) by inserting ‘‘, including housing 

2 and land use patterns’’ after ‘‘development 

3 patterns’’; and 

4 (B) in subsection (f)— 

5 (i) in paragraph (2)(D)(i)— 

6 (I) by striking ‘‘, as appropriate, 

7 in consultation’’ and inserting ‘‘in co8 operation’’; 

9 (II) by inserting ‘‘State and local 

10 agencies responsible for transpor11 tation, public transportation, air qual12 ity, and housing and in consultation 

13 with’’ before ‘‘State, tribal’’; and 

14 (III) by inserting ‘‘public 

15 health,’’ after ‘‘conservation,’’; 

16 (ii) in paragraph (3)(B)(iii), by insert17 ing ‘‘and through the website of the State, 

18 including emission reduction targets and 

19 strategies developed under paragraph (9) 

20 and an analysis of the anticipated effects 

21 of the targets and strategies’’ after ‘‘World 

22 Wide Web’’; and 

23 (iii) by adding at the end the fol24 lowing: 


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1 ‘‘(9) TRANSPORTATION GREENHOUSE GAS RE2 DUCTION EFFORTS.— 

3 ‘‘(A) IN GENERAL.—Within a State, the 

4 transportation planning process under this sec5 tion, shall address transportation-related green6 house gas emissions by including emission re7 duction targets and strategies to meet those 

8 targets. 

9 ‘‘(B) ESTABLISHMENT OF TARGETS AND

10 CRITERIA.— 

11 ‘‘(i) IN GENERAL.—Not later than 2 

12 years after the promulgation of the final 

13 regulations required under section 831 of 

14 the Clean Air Act, each State shall develop 

15 surface transportation-related greenhouse 

16 gas emission reduction targets, as well as 

17 strategies to meet those targets, in con18 sultation with State air agencies as part of 

19 the transportation planning process under 

20 this section. 

21 ‘‘(ii) MINIMUM REQUIREMENTS.— 

22 Each transportation plan developed by a 

23 State under clause (i) shall, within the 

24 plan, demonstrate progress in stabilizing 

25 and reducing transportation-related greenVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00049 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 house gas emissions in the State so as to 

2 contribute to the achievement of national 

3 targets pursuant to section 831(a)(1) of 

4 the Clean Air Act. 

5 ‘‘(iii) REQUIREMENTS FOR TARGETS

6 AND STRATEGIES.—The targets and strat7 egies developed under this subparagraph 

8 shall, at a minimum— 

9 ‘‘(I) be based on the emission 

10 models and related methodologies es11 tablished in the final regulations re12 quired under section 831 of the Clean 

13 Air Act; 

14 ‘‘(II) inventory all sources of sur15 face transportation-related greenhouse 

16 gas emissions; 

17 ‘‘(III) apply to those modes of 

18 surface transportation that are ad19 dressed in the planning process under 

20 this section; 

21 ‘‘(IV) be integrated and con22 sistent with statewide transportation 

23 plans and statewide transportation 

24 improvement programs; and 


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1 ‘‘(V) be selected through scenario 

2 analysis (as defined in section 

3 134(k)), and include, pursuant to the 

4 requirements of the transportation 

5 planning process under this section, 

6 transportation investment and man7 agement strategies that reduce green8 house gas emissions from the trans9 portation sector over the life of the 

10 plan, such as— 

11 ‘‘(aa) efforts to increase 

12 public transportation ridership, 

13 including through service im14 provements, capacity expansions, 

15 and access enhancement; 

16 ‘‘(bb) efforts to increase 

17 walking, bicycling, and other 

18 forms of nonmotorized transpor19 tation; 

20 ‘‘(cc) implementation of zon21 ing and other land use regula22 tions and plans to support infill, 

23 transit-oriented development, re24 development, or mixed use devel25 opment; 


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1 ‘‘(dd) travel demand man2 agement programs (including 

3 carpool, vanpool, or car-share 

4 projects), transportation pricing 

5 measures, parking policies, and 

6 programs to promote telecom7 muting, flexible work schedules, 

8 and satellite work centers; 

9 ‘‘(ee) surface transportation 

10 system operation improvements, 

11 including intelligent transpor12 tation systems or other oper13 ational improvements to reduce 

14 congestion and improve system 

15 management; 

16 ‘‘(ff) intercity passenger rail 

17 improvements; 

18 ‘‘(gg) intercity bus improve19 ments; 

20 ‘‘(hh) freight rail improve21 ments; 

22 ‘‘(ii) use of materials or 

23 equipment associated with the 

24 construction or maintenance of 


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1 transportation projects that re2 duce greenhouse gas emissions; 

3 ‘‘(jj) public facilities for sup4 plying electricity to electric or 

5 plug-in hybrid-electric vehicles; or 

6 ‘‘(kk) any other effort that 

7 demonstrates progress in reduc8 ing transportation-related green9 house gas emissions. 

10 ‘‘(C) COORDINATION AND CONSULTATION

11 WITH PUBLIC AGENCIES.—Transportation 

12 greenhouse gas targets and plans pursuant to 

13 this section shall be developed— 

14 ‘‘(i) in coordination with— 

15 ‘‘(I) all metropolitan planning or16 ganizations covered by this section 

17 within the State; and 

18 ‘‘(II) transportation and air qual19 ity agencies within the State; and 

20 ‘‘(ii) in consultation with representa21 tives of State and local housing, economic 

22 development, and land use agencies. 

23 ‘‘(D) ENFORCEMENT.—Not later than 180 

24 days after the date of submission of a plan 

25 under this section— 


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1 ‘‘(i) the Secretary and the Adminis2 trator shall review the plan; and 

3 ‘‘(ii) the Secretary shall approve a 

4 plan developed by a State pursuant to sub5 paragraph (B) if— 

6 ‘‘(I) the Secretary finds that a 

7 State has developed, submitted, and 

8 published the plan pursuant to this 

9 section; 

10 ‘‘(II) the Secretary, in consulta11 tion with the Administrator, deter12 mines that the plan is likely to achieve 

13 the targets established by the State 

14 under this subsection; and 

15 ‘‘(III) the development of the 

16 plan complies with the minimum re17 quirements established under clauses 

18 (ii) and (iii) of subparagraph (B). 

19 ‘‘(E) PLANNING FINDING.—Failure to 

20 comply with the requirements under subpara21 graph (B) shall not impact the planning finding 

22 under subsection (g)(7).’’. 

23 (2) TITLE 49.—Section 5304 of title 49, United 

24 States Code is amended— 

25 (A) in subsection (d)(1)(E)— 


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1 (i) by inserting ‘‘sustainability, and 

2 livability, reduce surface transportation-re3 lated greenhouse gas emissions and reli4 ance on oil, adapt to the effects of climate 

5 change,’’ after ‘‘energy conservation,’’; 

6 (ii) by inserting ‘‘and public health’’ 

7 after ‘‘quality of life’’; and 

8 (iii) by inserting ‘‘, including housing 

9 and land use patterns’’ after ‘‘development 

10 patterns’’; and 

11 (B) in subsection (f)— 

12 (i) in paragraph (2)(D)(i)— 

13 (I) by striking ‘‘, as appropriate, 

14 in consultation’’ and inserting ‘‘in co15 operation’’; 

16 (II) by inserting ‘‘State and local 

17 agencies responsible for transpor18 tation, public transportation, air qual19 ity, and housing and in consultation 

20 with’’ before ‘‘State, tribal’’; and 

21 (III) by inserting ‘‘public 

22 health,’’ after ‘‘conservation,’’; 

23 (ii) in paragraph (3)(B)(iii), by insert24 ing ‘‘and through the website of the State, 

25 including emission reduction targets and 


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1 strategies developed under paragraph (9) 

2 and an analysis of the anticipated effects 

3 of the targets and strategies’’ after ‘‘World 

4 Wide Web’’; and 

5 (iii) by adding at the end the fol6 lowing: 

7 ‘‘(9) TRANSPORTATION GREENHOUSE GAS RE8 DUCTION EFFORTS.— 

9 ‘‘(A) IN GENERAL.—Within a State, the 

10 transportation planning process under this sec11 tion, shall address transportation-related green12 house gas emissions by including emission re13 duction targets and strategies to meet those 

14 targets. 

15 ‘‘(B) ESTABLISHMENT OF TARGETS AND

16 CRITERIA.— 

17 ‘‘(i) IN GENERAL.—Not later than 2 

18 years after the promulgation of the final 

19 regulations required under section 831 of 

20 the Clean Air Act, each State shall develop 

21 surface transportation-related greenhouse 

22 gas emission reduction targets, as well as 

23 strategies to meet those targets, in con24 sultation with State air agencies as part of 


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1 the transportation planning process under 

2 this section. 

3 ‘‘(ii) MINIMUM REQUIREMENTS.— 

4 Each transportation plan developed by a 

5 State under clause (i) shall, within the 

6 plan, demonstrate progress in stabilizing 

7 and reducing transportation-related green8 house gas emissions in the State so as to 

9 contribute to the achievement of national 

10 targets pursuant to section 831(a)(1) of 

11 the Clean Air Act. 

12 ‘‘(iii) REQUIREMENTS FOR TARGETS

13 AND STRATEGIES.—The targets and strat14 egies developed under this subparagraph 

15 shall, at a minimum— 

16 ‘‘(I) be based on the emission 

17 models and related methodologies es18 tablished in the final regulations re19 quired under section 831 of the Clean 

20 Air Act; 

21 ‘‘(II) inventory all sources of sur22 face transportation-related greenhouse 

23 gas emissions; 

24 ‘‘(III) apply to those modes of 

25 surface transportation that are adVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 dressed in the planning process under 

2 this section; 

3 ‘‘(IV) be integrated and con4 sistent with statewide transportation 

5 plans and statewide transportation 

6 improvement programs; and 

7 ‘‘(V) be selected through scenario 

8 analysis (as defined in section 134(k) 

9 of title 23), and include, pursuant to 

10 the requirements of the transportation 

11 planning process under this section, 

12 transportation investment and man13 agement strategies that reduce green14 house gas emissions from the trans15 portation sector over the life of the 

16 plan, such as— 

17 ‘‘(aa) efforts to increase 

18 public transportation ridership, 

19 including through service im20 provements, capacity expansions, 

21 and access enhancement; 

22 ‘‘(bb) efforts to increase 

23 walking, bicycling, and other 

24 forms of nonmotorized transpor25 tation; 


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1 ‘‘(cc) implementation of zon2 ing and other land use regula3 tions and plans to support infill, 

4 transit-oriented development, re5 development, or mixed use devel6 opment; 

7 ‘‘(dd) travel demand man8 agement programs (including 

9 carpool, vanpool, or car-share 

10 projects), transportation pricing 

11 measures, parking policies, and 

12 programs to promote telecom13 muting, flexible work schedules, 

14 and satellite work centers; 

15 ‘‘(ee) surface transportation 

16 system operation improvements, 

17 including intelligent transpor18 tation systems or other oper19 ational improvements to reduce 

20 congestion and improve system 

21 management; 

22 ‘‘(ff) intercity passenger rail 

23 improvements; 

24 ‘‘(gg) intercity bus improve25 ments; 


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1 ‘‘(hh) freight rail improve2 ments; 

3 ‘‘(ii) use of materials or 

4 equipment associated with the 

5 construction or maintenance of 

6 transportation projects that re7 duce greenhouse gas emissions; 

8 ‘‘(jj) public facilities for sup9 plying electricity to electric or 

10 plug-in hybrid-electric vehicles; or 

11 ‘‘(kk) any other effort that 

12 demonstrates progress in reduc13 ing transportation-related green14 house gas emissions. 

15 ‘‘(C) COORDINATION AND CONSULTATION

16 WITH PUBLIC AGENCIES.—Transportation 

17 greenhouse gas targets and plans pursuant to 

18 this section shall be developed— 

19 ‘‘(i) in coordination with— 

20 ‘‘(I) all metropolitan planning or21 ganizations covered by this section 

22 within the State; and 

23 ‘‘(II) transportation and air qual24 ity agencies within the State; and 


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1 ‘‘(ii) in consultation with representa2 tives of State and local housing, economic 

3 development, and land use agencies. 

4 ‘‘(D) ENFORCEMENT.—Not later than 180 

5 days after the date of submission of a plan 

6 under this section— 

7 ‘‘(i) the Secretary and the Adminis8 trator shall review the plan; and 

9 ‘‘(ii) the Secretary shall approve a 

10 plan developed by a State pursuant to sub11 paragraph (B) if— 

12 ‘‘(I) the Secretary finds that a 

13 State has developed, submitted, and 

14 published the plan pursuant to this 

15 section; 

16 ‘‘(II) the Secretary, in consulta17 tion with the Administrator, deter18 mines that the plan is likely to achieve 

19 the targets established by the State 

20 under this subsection; and 

21 ‘‘(III) the development of the 

22 plan complies with the minimum re23 quirements established under clauses 

24 (ii) and (iii) of subparagraph (B). 


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1 ‘‘(E) PLANNING FINDING.—Failure to 

2 comply with the requirements under subpara3 graph (B) shall not impact the planning finding 

4 under subsection (g)(7).’’. 

5 (d) APPLICABILITY.—Section 304 of the Clean Air 

6 Act (42 U.S.C. 7604) shall not apply to the planning pro7 visions of this section or any amendment made by this 

8 section. 

9 (e) LAND USE AUTHORITY.—Nothing in this section 

10 or an amendment made by this section— 

11 (1) infringes on the existing authority of local 

12 governments to plan or control land use; or 

13 (2) provides or transfers authority over land 

14 use to any other entity. 

15 SEC. 113. TRANSPORTATION GREENHOUSE GAS EMISSION 

16 REDUCTION PROGRAM GRANTS. 

17 Part C of title VIII of the Clean Air Act (as amended 

18 by section 112) is amended by adding at the end the fol19 lowing: 

20 ‘‘SEC. 832. TRANSPORTATION GREENHOUSE GAS EMISSION 

21 REDUCTION PROGRAM GRANTS. 

22 ‘‘(a) IN GENERAL.—The Secretary of Transportation 

23 (referred to in this section as the ‘Secretary’) shall provide 

24 grants to States and metropolitan planning organizations 


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1 to carry out the purposes of this section for each fiscal 

2 year— 

3 ‘‘(1) to support the developing and updating of 

4 transportation greenhouse gas reduction targets and 

5 strategies; and 

6 ‘‘(2) to provide financial assistance to imple7 ment plans approved pursuant to— 

8 ‘‘(A) sections 134(k)(6) and 135(f)(9) of 

9 title 23, United States Code; and 

10 ‘‘(B) sections 5303(k)(6) and 5304(f)(9) of 

11 title 49, United States Code. 

12 ‘‘(b) PLANNING GRANTS.— 

13 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

14 the Secretary shall allocate not more than 5 percent 

15 of the funds available to carry out this section for 

16 a fiscal year for metropolitan planning organizations 

17 to develop and update transportation plans, includ18 ing targets and strategies for greehouse gas emission 

19 reduction under— 

20 ‘‘(A) sections 134(k)(6) and 135(f)(9) of 

21 title 23, United States Code; and 

22 ‘‘(B) sections 5303(k)(6) and 5304(f)(9) of 

23 title 49, United States Code. 

24 ‘‘(2) ELIGIBLE ORGANIZATIONS.—The Sec25 retary shall distribute the funds available in (1) to 


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1 metropolitan planning organizations (as defined in 

2 section 134(k)(7) of title 23, United States Code) in 

3 the proportion that— 

4 ‘‘(A) the population within such a metro5 politan planning organization; bears to 

6 ‘‘(B) the total population of all such met7 ropolitan planning organizations. 

8 ‘‘(c) PERFORMANCE GRANTS.— 

9 ‘‘(1) IN GENERAL.—After allocating funds pur10 suant to subsection (b)(1), the Secretary shall use 

11 the remainder of amounts made available to carry 

12 out this section to provide grants to States and met13 ropolitan planning organizations. 

14 ‘‘(2) CRITERIA.—In providing grants under this 

15 subsection, the Secretary, in consultation with the 

16 Administrator, shall develop criteria for providing 

17 the grants, taking into consideration, with respect to 

18 areas to be covered by the grants— 

19 ‘‘(A) the quantity of total greenhouse gas 

20 emissions to be reduced as a result of imple21 mentation of a plan, within a covered area, as 

22 determined by methods established under sec23 tion 831(a); 

24 ‘‘(B) the quantity of total greenhouse gas 

25 emissions to be reduced per capita as a result 


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1 of implementation of a plan, within the covered 

2 area, as determined by methods established 

3 under section 831(a); 

4 ‘‘(C) the cost-effectiveness of reducing 

5 greenhouse gas emissions during the life of the 

6 plan; 

7 ‘‘(D) progress toward achieving emission 

8 reductions target established under— 

9 ‘‘(i) sections 134(k)(6) and 135(f)(9) 

10 of title 23, United States Code; and 

11 ‘‘(ii) sections 5303(k)(6) and 

12 5304(f)(9) of title 49, United States Code; 

13 ‘‘(E) reductions in greenhouse gas emis14 sions previously achieved by States and metro15 politan planning organizations during the 5- 

16 year period beginning on the date of enactment 

17 of this Act; 

18 ‘‘(F) plans that increase transportation op19 tions and mobility, particularly for low-income 

20 individuals, minorities, the elderly, households 

21 without motor vehicles, cost-burdened house22 holds, and the disabled; and 

23 ‘‘(G) other factors, including innovative ap24 proaches, minimization of costs, and consider25 ation of economic development, revenue generaVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00065 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 tion, consumer fuel cost-savings, and other eco2 nomic, environmental and health benefits, as 

3 the Secretary determines to be appropriate. 

4 ‘‘(d) REQUIREMENT FOR REDUCED EMISSIONS.—A 

5 performance grant under subsection (c) may be used only 

6 to fund strategies that demonstrate a reduction in green7 house gas emissions that is sustainable over the life of the 

8 applicable transportation plan. 

9 ‘‘(e) COST-SHARING.—The Federal share of the costs 

10 of a project receiving Federal financial assistance under 

11 this section shall be 80 percent. 

12 ‘‘(f) COMPLIANCE WITH APPLICABLE LAWS.— 

13 ‘‘(1) IN GENERAL.—Subject to paragraph (2), a 

14 project receiving funds under this section shall com15 ply with all applicable Federal laws (including regu16 lations), including— 

17 ‘‘(A) subchapter IV of chapter 31 of title 

18 40, United States Code; and 

19 ‘‘(B) applicable requirements of titles 23 

20 and 49, United States Code. 

21 ‘‘(2) ELIGIBILITY.—Project eligibility shall be 

22 determined in accordance with this section. 

23 ‘‘(3) DETERMINATION OF APPLICABLE MODAL

24 REQUIREMENTS.—The Secretary shall— 


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1 ‘‘(A) have the discretion to designate the 

2 specific modal requirements that shall apply to 

3 a project; and 

4 ‘‘(B) be guided by the predominant modal 

5 characteristics of the project in the event that 

6 a project has cross-modal application. 

7 ‘‘(g) ADDITIONAL REQUIREMENTS.— 

8 ‘‘(1) IN GENERAL.—As a condition on the re9 ceipt of financial assistance under this section, the 

10 interests of public transportation employees affected 

11 by the assistance shall be protected under arrange12 ments that the Secretary of Labor determines— 

13 ‘‘(A) to be fair and equitable; and 

14 ‘‘(B) to provide benefits equal to the bene15 fits established under section 5333(b) of title 

16 49, United States Code. 

17 ‘‘(2) WAGES AND BENEFITS.—Laborers and 

18 mechanics employed on projects funded with 

19 amounts made available under this section shall be 

20 paid wages and benefits not less than those deter21 mined by the Secretary of Labor under subchapter 

22 IV of chapter 31 of title 40, United States Code, to 

23 be prevailing in the same locality. 

24 ‘‘(h) MISCELLANEOUS.— 


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1 ‘‘(1) ROAD-USE AND CONGESTION PRICING

2 MEASURES.—All projects funded by amounts made 

3 available under this section shall be eligible to re4 ceive amounts collected through road-use and con5 gestion pricing measures. 

6 ‘‘(2) LIMITATIONS.—The Administrator may 

7 not approve any transportation plan for a project 

8 that would be inconsistent with existing design, pro9 curement, and construction guidelines established by 

10 the Department of Transportation. 

11 ‘‘(3) SUBGRANTEES.—With the approval of the 

12 Secretary, recipients of funding under this section 

13 may enter into agreements providing for the transfer 

14 of funds to noneligible public entities (such as local 

15 governments, air quality agencies, zoning commis16 sions, special districts and transit agencies) that 

17 have statutory responsibility or authority for actions 

18 necessary to implement the strategies pursuant to— 

19 ‘‘(A) sections 134(k)(6) and 135(f)(9) of 

20 title 23, United States Code; and 

21 ‘‘(B) sections 5303(k)(6) and 5304(f)(9) of 

22 title 49, United States Code.’’. 


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1 SEC. 114. SMARTWAY TRANSPORTATION EFFICIENCY PRO2 GRAM. 

3 Part B of title VIII of the Clean Air Act (as amended 

4 by section 111) is amended by adding at the end the fol5 lowing: 

6 ‘‘SEC. 822. SMARTWAY TRANSPORTATION EFFICIENCY PRO7 GRAM. 

8 ‘‘(a) IN GENERAL.—There is established within the 

9 Environmental Protection Agency a SmartWay Transpor10 tation Efficiency Program to quantify, demonstrate, and 

11 promote the benefits of technologies, products, fuels, and 

12 operational strategies that reduce petroleum consumption, 

13 air pollution, and greenhouse gas emissions from the mo14 bile source sector. 

15 ‘‘(b) GENERAL DUTIES.—Under the program estab16 lished under this section, the Administrator shall carry out 

17 each of the following: 

18 ‘‘(1) Development of measurement protocols to 

19 evaluate the energy consumption and greenhouse gas 

20 impacts from technologies and strategies in the mo21 bile source sector, including those for passenger 

22 transport and goods movement. 

23 ‘‘(2) Development of qualifying thresholds for 

24 certifying, verifying, or designating energy-efficient, 

25 low-greenhouse gas SmartWay technologies and 


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1 strategies for each mode of passenger transportation 

2 and goods movement. 

3 ‘‘(3) Development of partnership and recogni4 tion programs to promote best practices and drive 

5 demand for energy-efficient, low-greenhouse gas 

6 transportation performance. 

7 ‘‘(4) Promotion of the availability of, and en8 couragement of the adoption of, SmartWay certified 

9 or verified technologies and strategies, and publica10 tion of the availability of financial incentives, such 

11 as assistance from loan programs and other Federal 

12 and State incentives. 

13 ‘‘(c) SMARTWAY TRANSPORT FREIGHT PARTNER14 SHIP.—The Administrator shall establish a SmartWay 

15 Transport Partnership program with shippers and carriers 

16 of goods to promote energy-efficient, low-greenhouse gas 

17 transportation. In carrying out such partnership, the Ad18 ministrator shall undertake each of the following: 

19 ‘‘(1) Verification of the energy and greenhouse 

20 gas performance of participating freight carriers, in21 cluding those operating rail, trucking, marine, and 

22 other goods movement operations. 

23 ‘‘(2) Publication of a comprehensive energy and 

24 greenhouse gas performance index of freight modes 

25 (including rail, trucking, marine, and other modes of 


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1 transporting goods) and individual freight companies 

2 so that shippers can choose to deliver their goods 

3 more efficiently. 

4 ‘‘(3) Development of tools for— 

5 ‘‘(A) carriers to calculate their energy and 

6 greenhouse gas performance; and 

7 ‘‘(B) shippers to calculate the energy and 

8 greenhouse gas impacts of moving their prod9 ucts and to evaluate the relative impacts from 

10 transporting their goods by different modes and 

11 corporate carriers. 

12 ‘‘(4) Provision of recognition opportunities for 

13 participating shipper and carrier companies dem14 onstrating advanced practices and achieving superior 

15 levels of greenhouse gas performance. 

16 ‘‘(d) IMPROVING FREIGHT GREENHOUSE GAS PER17 FORMANCE DATABASES.—The Administrator shall, in co18 ordination with the Secretary of Commerce and other ap19 propriate agencies, define and collect data on the physical 

20 and operational characteristics of the Nation’s truck popu21 lation, with special emphasis on data related to energy ef22 ficiency and greenhouse gas performance to inform the 

23 performance index published under subsection (c)(2) of 

24 this section, and other means of goods transport as necVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00071 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 essary, at least every 5 years as part of the economic cen2 sus required under title 13, United States Code. 

3 ‘‘(e) ESTABLISHMENT OF FINANCING PROGRAM.— 

4 The Administrator shall establish a SmartWay Financing 

5 Program to competitively award funding to eligible entities 

6 identified by the Administrator in accordance with the 

7 program requirements in subsection (g). 

8 ‘‘(f) PURPOSES.—Under the SmartWay Financing 

9 Program, eligible entities shall— 

10 ‘‘(1) use funds awarded by the Administrator to 

11 provide flexible loan and/or lease terms that increase 

12 approval rates or lower the costs of loans and/or 

13 leases in accordance with guidance developed by the 

14 Administrator; 

15 ‘‘(2) make such loans and/or leases available to 

16 public and private entities for the purpose of adopt17 ing low-greenhouse gas technologies or strategies for 

18 the mobile source sector that are designated by the 

19 Administrator; and 

20 ‘‘(3) use funds provided by the Administrator 

21 for electrification of freight transportation systems 

22 in major national goods movement corridors, giving 

23 priority to electrification of transportation systems 

24 in areas that are gateways for high volumes of inter25 national and national freight transport and require 


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1 substantial criteria pollutant emission reductions in 

2 order to attain national ambient air quality stand3 ards. 

4 ‘‘(g) PROGRAM REQUIREMENTS.—The Administrator 

5 shall determine program design elements and require6 ments, including— 

7 ‘‘(1) the type of financial mechanism with 

8 which to award funding, in the form of grants and/ 

9 or contracts; 

10 ‘‘(2) the designation of eligible entities to re11 ceive funding, such as State, tribal, and local gov12 ernments, regional organizations comprised of gov13 ernmental units, nonprofit organizations, or for-prof14 it companies; 

15 ‘‘(3) criteria for evaluating applications from el16 igible entities, including anticipated— 

17 ‘‘(A) cost-effectiveness of loan or lease pro18 gram on a metric-ton-of-greenhouse gas-saved19 per-dollar basis; and 

20 ‘‘(B) ability to promote the loan or lease 

21 program and associated technologies and strate22 gies to the target audience; and 

23 ‘‘(4) reporting requirements for entities that re24 ceive awards, including— 


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1 ‘‘(A) actual cost-effectiveness and green2 house gas savings from the loan or lease pro3 gram based on a methodology designated by the 

4 Administrator; 

5 ‘‘(B) the total number of applications and 

6 number of approved applications; and 

7 ‘‘(C) terms granted to loan and lease re8 cipients compared to prevailing market prac9 tices and/or rates. 

10 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—Such 

11 sums as necessary are authorized to be appropriated to 

12 the Administrator to carry out this section.’’. 

13 Subtitle B—Carbon Capture and 

14 Sequestration 

15 SEC. 121. NATIONAL STRATEGY. 

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

17 date of enactment of this Act, the Administrator, in con18 sultation with the Secretary of Energy, the Secretary of 

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

20 agencies as the President may designate, shall submit to 

21 Congress a report establishing a unified and comprehen22 sive strategy to address the key legal, regulatory, and 

23 other barriers to the commercial-scale deployment of car24 bon capture and storage. 


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

2 shall— 

3 (1) identify the regulatory, legal, and other 

4 gaps and barriers that— 

5 (A) could be addressed by a Federal agen6 cy using existing statutory authority; 

7 (B) require Federal legislation, if any; or 

8 (C) would be best addressed at the State, 

9 tribal, or regional level; 

10 (2) identify regulatory implementation chal11 lenges, including challenges relating to approval of 

12 State and tribal programs and delegation of author13 ity for permitting; and 

14 (3) recommend rulemakings, Federal legisla15 tion, or other actions that should be taken to further 

16 evaluate and address those barriers. 

17 (c) FINDING.—Congress finds that it is in the public 

18 interest to achieve widespread, commercial-scale deploy19 ment of carbon capture and storage in the United States 

20 and throughout Asia before January 1, 2030. 

21 SEC. 122. REGULATIONS FOR GEOLOGICAL SEQUESTRA22 TION SITES. 

23 (a) COORDINATED CERTIFICATION AND PERMITTING

24 PROCESS.—Part A of title VIII of the Clean Air Act (as 


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1 amended by section 124 of this division) is amended by 

2 adding at the end the following: 

3 ‘‘SEC. 813. GEOLOGICAL STORAGE SITES. 

4 ‘‘(a) COORDINATED PROCESS.— 

5 ‘‘(1) IN GENERAL.—The Administrator shall es6 tablish a coordinated approach to certifying and per7 mitting geological storage, taking into consideration 

8 all relevant statutory authorities. 

9 ‘‘(2) REQUIREMENTS.—In establishing such ap10 proach, the Administrator shall— 

11 ‘‘(A) take into account, and reduce redun12 dancy with, the requirements of section 1421 of 

13 the Safe Drinking Water Act (42 U.S.C. 300h), 

14 including the rulemaking for geological storage 

15 wells described in the proposed rule entitled 

16 ‘Federal Requirements Under the Underground 

17 Injection Control (UIC) Program for Carbon 

18 Dioxide (CO2) Geologic Sequestration (GS) 

19 Wells’ (73 Fed. Reg. 43492 (July 25, 2008)); 

20 and 

21 ‘‘(B) to the maximum extent practicable, 

22 reduce the burden on certified entities and im23 plementing authorities. 

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

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


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1 promulgate regulations to protect human health and the 

2 environment by minimizing the risk of escape to the at3 mosphere of carbon dioxide injected for purposes of geo4 logical storage. 

5 ‘‘(c) REQUIREMENTS.—The regulations under sub6 section (b) shall include— 

7 ‘‘(1) a process to obtain certification for geo8 logical storage under this section; and 

9 ‘‘(2) requirements for— 

10 ‘‘(A) monitoring, recordkeeping, and re11 porting for emissions associated with injection 

12 into, and escape from, geological storage sites, 

13 taking into account any requirements or proto14 cols developed under section 713; 

15 ‘‘(B) public participation in the certifi16 cation process that maximizes transparency; 

17 ‘‘(C) the sharing of data among States, In18 dian tribes, and the Environmental Protection 

19 Agency; and 

20 ‘‘(D) other elements or safeguards nec21 essary to achieve the purpose described in sub22 section (b). 

23 ‘‘(d) REPORT.— 

24 ‘‘(1) IN GENERAL.—Not later than 2 years 

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1 ant to subsection (b), and not less frequently than 

2 once every 3 years thereafter, the Administrator 

3 shall submit to the Committee on Energy and Com4 merce of the House of Representatives and the Com5 mittee on Environment and Public Works of the 

6 Senate a report describing geological storage in the 

7 United States, and, to the extent relevant, other 

8 countries in North America. 

9 ‘‘(2) INCLUSIONS.—Each report under para10 graph (1) shall include— 

11 ‘‘(A) data regarding injection, emissions to 

12 the atmosphere, if any, and performance of ac13 tive and closed geological storage sites, includ14 ing those at which enhanced hydrocarbon recov15 ery operations occur; 

16 ‘‘(B) an evaluation of the performance of 

17 relevant Federal environmental regulations and 

18 programs in ensuring environmentally protec19 tive geological storage practices; 

20 ‘‘(C) recommendations on how those pro21 grams and regulations should be improved or 

22 made more effective; and 

23 ‘‘(D) other relevant information.’’. 


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1 (b) SAFE DRINKING WATER ACT STANDARDS.—Sec2 tion 1421 of the Safe Drinking Water Act (42 U.S.C. 

3 300h) is amended by adding at the end the following: 

4 ‘‘(e) CARBON DIOXIDE GEOLOGICAL STORAGE

5 WELLS.— 

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

7 the date of enactment of this subsection, the Admin8 istrator shall promulgate regulations under sub9 section (a) for carbon dioxide geological storage 

10 wells. 

11 ‘‘(2) FINANCIAL RESPONSIBILITY.— 

12 ‘‘(A) IN GENERAL.—The regulations under 

13 paragraph (1) shall include requirements for 

14 maintaining evidence of financial responsibility, 

15 including financial responsibility for emergency 

16 and remedial response, well plugging, site clo17 sure, and post-injection site care. 

18 ‘‘(B) REGULATIONS.—Financial responsi19 bility may be established for carbon dioxide geo20 logical wells in accordance with regulations pro21 mulgated by the Administrator by any 1, or any 

22 combination, of the following: 

23 ‘‘(i) Insurance. 

24 ‘‘(ii) Guarantee. 

25 ‘‘(iii) Trust. 


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1 ‘‘(iv) Standby trust. 

2 ‘‘(v) Surety bond. 

3 ‘‘(vi) Letter of credit. 

4 ‘‘(vii) Qualification as a self-insurer. 

5 ‘‘(viii) Any other method satisfactory 

6 to the Administrator.’’. 

7 SEC. 123. STUDIES AND REPORTS. 

8 (a) STUDY OF LEGAL FRAMEWORK FOR GEOLOGICAL

9 STORAGE SITES.— 

10 (1) ESTABLISHMENT OF TASK FORCE.— 

11 (A) IN GENERAL.—As soon as practicable, 

12 but not later than 180 days after the date of 

13 enactment of this Act, the Administrator shall 

14 establish a task force, to be composed of an 

15 equal number of— 

16 (i) subject matter experts; 

17 (ii) nongovernmental organizations 

18 with expertise regarding environmental pol19 icy; 

20 (iii) academic experts with expertise in 

21 environmental law; 

22 (iv) State and tribal officials with en23 vironmental expertise; 

24 (v) representatives of State and tribal 

25 attorneys general; 


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1 (vi) representatives of the Environ2 mental Protection Agency, the Department 

3 of the Interior, the Department of Energy, 

4 the Department of Transportation, and 

5 other relevant Federal agencies; and 

6 (vii) members of the private sector. 

7 (B) STUDY.—The task force established 

8 under subparagraph (A) shall conduct a study 

9 of— 

10 (i) existing Federal environmental 

11 statutes, State environmental statutes, and 

12 State common law that apply to geological 

13 storage sites for carbon dioxide, including 

14 the ability of those laws to serve as risk 

15 management tools; 

16 (ii) the existing statutory framework, 

17 including Federal and State laws, that 

18 apply to harm and damage to the environ19 ment or public health at closed sites at 

20 which carbon dioxide injection has been 

21 used for enhanced hydrocarbon recovery; 

22 (iii) the statutory framework, environ23 mental health and safety considerations, 

24 implementation issues, and financial impli25 cations of potential models for Federal, 


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1 State, or private sector assumption of li2 abilities and financial responsibilities with 

3 respect to closed geological storage sites; 

4 (iv) private sector mechanisms, includ5 ing insurance and bonding, that may be 

6 available to manage environmental, health, 

7 and safety risks from closed geological 

8 storage sites; and 

9 (v) the subsurface mineral rights, 

10 water rights, and property rights issues as11 sociated with geological storage of carbon 

12 dioxide, including issues specific to Federal 

13 land. 

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

15 the date of enactment of this Act, the task force es16 tablished under paragraph (1)(A) shall submit to 

17 Congress a report describing the results of the study 

18 conducted under that paragraph, including any con19 sensus recommendations of the task force. 

20 (b) ENVIRONMENTAL STATUTES.— 

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

22 study of the means by which, and under what cir23 cumstances, the environmental statutes for which 

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1 bility would apply to carbon dioxide injection and ge2 ological storage activities. 

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

4 date of enactment of this Act, the Administrator 

5 shall submit to Congress a report describing the re6 sults of the study conducted under paragraph (1). 

7 SEC. 124. PERFORMANCE STANDARDS FOR COAL-FUELED 

8 POWER PLANTS. 

9 (a) IN GENERAL.—Part A of title VIII of the Clean 

10 Air Act (as added by section 121 of division B) is amended 

11 by adding at the end the following: 

12 ‘‘SEC. 812. PERFORMANCE STANDARDS FOR NEW COAL13 FIRED POWER PLANTS. 

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

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

16 means a utility unit that is required to have a per17 mit under section 503(a) and is authorized under 

18 State or Federal law to derive at least 30 percent of 

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

20 any combination of these fuels. 

21 ‘‘(2) INITIALLY PERMITTED.—The term ‘ini22 tially permitted’ means that the owner or operator 

23 has received a preconstruction approval or permit 

24 under this Act, for the covered EGU as a new (not 

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1 peal of such approval or permit has not been ex2 hausted. A subsequent modification of any such ap3 proval or permits, ongoing administrative or court 

4 review, appeals, or challenges, or the existence or 

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

6 or challenges shall not affect the date on which a 

7 covered EGU is considered to be initially permitted 

8 under this paragraph. 

9 ‘‘(b) STANDARDS.—(1) A covered EGU that is ini10 tially permitted on or after January 1, 2020, shall achieve 

11 an emission limit that is a 65 percent reduction in emis12 sions of the carbon dioxide produced by the unit, as 

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

14 standard as the Administrator may establish pursuant to 

15 subsection (c). 

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

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

18 the applicable compliance date established under this 

19 paragraph, achieve an emission limit that is a 50 percent 

20 reduction in emissions of the carbon dioxide produced by 

21 the unit, as measured on an annual basis. Compliance 

22 with the requirement set forth in this paragraph shall be 

23 required by the earliest of the following: 

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1 port that there are in commercial operation in the 

2 United States electric generating units or other sta3 tionary sources equipped with carbon capture and 

4 sequestration technology that, in the aggregate— 

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

6 nameplate generating capacity of which— 

7 ‘‘(I) at least 3 gigawatts must be elec8 tric generating units; and 

9 ‘‘(II) up to 1 gigawatt may be indus10 trial applications, for which capture and 

11 sequestration of 3,000,000 tons of carbon 

12 dioxide per year on an aggregate 

13 annualized basis shall be considered equiv14 alent to 1 gigawatt; 

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

16 units, each with a nameplate generating capac17 ity of 250 megawatts or greater, that capture, 

18 inject, and sequester carbon dioxide into geo19 logic formations other than oil and gas fields; 

20 and 

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

22 aggregate at least 12,000,000 tons of carbon 

23 dioxide per year, calculated on an aggregate 

24 annualized basis. 

25 ‘‘(B) January 1, 2025. 


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

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

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

4 months if the Administrator makes a determination, based 

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

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

7 standard by the deadline. The owner or operator must 

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

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

10 public notice and comment on the extension request. 

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

12 later than 2025 and at 5-year intervals thereafter, the Ad13 ministrator shall review the standards for new covered 

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

15 maximum carbon dioxide emission rate for new covered 

16 EGUs to a rate which reflects the degree of emission limi17 tation achievable through the application of the best sys18 tem of emission reduction which (taking into account the 

19 cost of achieving such reduction and any nonair quality 

20 health and environmental impact and energy require21 ments) the Administrator determines has been adequately 

22 demonstrated. 

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

24 date of enactment of this title and semiannually there25 after, the Administrator shall publish a report on the 


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1 nameplate capacity of units (determined pursuant to sub2 section (b)(2)(A)) in commercial operation in the United 

3 States equipped with carbon capture and sequestration 

4 technology, including the information described in sub5 section (b)(2)(A) (including the cumulative generating ca6 pacity to which carbon capture and sequestration retrofit 

7 projects meeting the criteria described in section 

8 775(b)(1)(A)(ii) and (b)(1)(A)(iv)(II) has been applied 

9 and the quantities of carbon dioxide captured and seques10 tered by such projects). 

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

12 date of enactment of this title, the Administrator shall 

13 promulgate regulations to carry out the requirements of 

14 this section.’’. 

15 SEC. 125. CARBON CAPTURE AND SEQUESTRATION DEM16 ONSTRATION AND EARLY DEPLOYMENT PRO17 GRAM. 

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

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

20 the Secretary of Energy. 

21 (2) DISTRIBUTION UTILITY.—The term ‘‘dis22 tribution utility’’ means an entity that distributes 

23 electricity directly to retail consumers under a legal, 

24 regulatory, or contractual obligation to do so. 


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

2 utility’’ has the meaning provided by section 3 of the 

3 Federal Power Act (16 U.S.C. 796). 

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

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

6 that is produced from the combustion of fossil fuels. 

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

8 means coal, petroleum, natural gas or any derivative 

9 of coal, petroleum, or natural gas. 

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

11 means the Carbon Storage Research Corporation es12 tablished in accordance with this section. 

13 (7) QUALIFIED INDUSTRY ORGANIZATION.—The 

14 term ‘‘qualified industry organization’’ means the 

15 Edison Electric Institute, the American Public 

16 Power Association, the National Rural Electric Co17 operative Association, a successor organization of 

18 such organizations, or a group of owners or opera19 tors of distribution utilities delivering fossil fuel20 based electricity who collectively represent at least 

21 20 percent of the volume of fossil fuel-based elec22 tricity delivered by distribution utilities to consumers 

23 in the United States. 

24 (8) RETAIL CONSUMER.—The term ‘‘retail con25 sumer’’ means an end-user of electricity. 


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1 (b) CARBON STORAGE RESEARCH CORPORATION.— 

2 (1) ESTABLISHMENT.— 

3 (A) REFERENDUM.—Qualified industry or4 ganizations may conduct, at their own expense, 

5 a referendum among the owners or operators of 

6 distribution utilities delivering fossil fuel-based 

7 electricity for the creation of a Carbon Storage 

8 Research Corporation. Such referendum shall 

9 be conducted by an independent auditing firm 

10 agreed to by the qualified industry organiza11 tions. Voting rights in such referendum shall be 

12 based on the quantity of fossil fuel-based elec13 tricity delivered to consumers in the previous 

14 calendar year or other representative period as 

15 determined by the Secretary pursuant to sub16 section (f). Upon approval of those persons rep17 resenting two-thirds of the total quantity of fos18 sil fuel-based electricity delivered to retail con19 sumers, the Corporation shall be established un20 less opposed by the State regulatory authorities 

21 pursuant to subparagraph (B). All distribution 

22 utilities voting in the referendum shall certify to 

23 the independent auditing firm the quantity of 

24 fossil fuel-based electricity represented by their 

25 vote. 


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1 (B) STATE REGULATORY AUTHORITIES.— 

2 Upon its own motion or the petition of a quali3 fied industry organization, each State regu4 latory authority shall consider its support or op5 position to the creation of the Corporation 

6 under subparagraph (A). State regulatory au7 thorities may notify the independent auditing 

8 firm referred to in subparagraph (A) of their 

9 views on the creation of the Corporation within 

10 180 days after the date of enactment of this 

11 Act. If 40 percent or more of the State regu12 latory authorities submit to the independent au13 diting firm written notices of opposition, the 

14 Corporation shall not be established notwith15 standing the approval of the qualified industry 

16 organizations as provided in subparagraph (A). 

17 (2) TERMINATION.—The Corporation shall be 

18 authorized to collect assessments and conduct oper19 ations pursuant to this section for a 10-year period 

20 from the date 6 months after the date of enactment 

21 of this Act. After such 10-year period, the Corpora22 tion is no longer authorized to collect assessments 

23 and shall be dissolved on the date 15 years after 

24 such date of enactment, unless the period is ex25 tended by an Act of Congress. 


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1 (3) GOVERNANCE.—The Corporation shall oper2 ate as a division or affiliate of the Electric Power 

3 Research Institute (referred to in this section as 

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

5 than 15 voting members responsible for its oper6 ations, including compliance with this section. EPRI, 

7 in consultation with the Edison Electric Institute, 

8 the American Public Power Association and the Na9 tional Rural Electric Cooperative Association shall 

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

11 and (iii) of subparagraph (A) from among can12 didates recommended by those organizations. At 

13 least a majority of the Board members appointed by 

14 EPRI shall be representatives of distribution utilities 

15 subject to assessments under subsection (d). 

16 (A) MEMBERS.—The Board shall include 

17 at least 1 representative of each of the fol18 lowing: 

19 (i) Investor-owned utilities. 

20 (ii) Utilities owned by a State agency, 

21 a municipality, and an Indian tribe. 

22 (iii) Rural electric cooperatives. 

23 (iv) Fossil fuel producers. 

24 (v) Nonprofit environmental organiza25 tions. 


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1 (vi) Independent generators or whole2 sale power providers. 

3 (vii) Consumer groups. 

4 (viii) The National Energy Tech5 nology laboratory of the Department of 

6 Energy. 

7 (ix) The Environmental Protection 

8 Agency. 

9 (B) NONVOTING MEMBERS.—The Board 

10 shall also include as additional nonvoting Mem11 bers the Secretary of Energy or his designee 

12 and 2 representatives of State regulatory au13 thorities as defined in section 3 of the Public 

14 Utility Regulatory Policies Act of 1978 (16 

15 U.S.C. 2602), each designated by the National 

16 Association of State Regulatory Utility Com17 missioners from States that are not within the 

18 same transmission interconnection. 

19 (4) COMPENSATION.—Corporation Board mem20 bers shall receive no compensation for their services, 

21 nor shall Corporation Board members be reimbursed 

22 for expenses relating to their service. 

23 (5) TERMS.—Corporation Board members shall 

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

25 2 full consecutive terms. Members filling unexpired 


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1 terms may serve not more than a total of 8 consecu2 tive years. Former members of the Corporation 

3 Board may be reappointed to the Corporation Board 

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

5 years. Initial appointments to the Corporation Board 

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

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

8 (6) STATUS OF CORPORATION.—The Corpora9 tion shall not be considered to be an agency, depart10 ment, or instrumentality of the United States, and 

11 no officer or director or employee of the Corporation 

12 shall be considered to be an officer or employee of 

13 the United States Government, for purposes of title 

14 5 or title 31 of the United States Code, or for any 

15 other purpose, and no funds of the Corporation shall 

16 be treated as public money for purposes of chapter 

17 33 of title 31, United States Code, or for any other 

18 purpose. 

19 (c) FUNCTIONS AND ADMINISTRATION OF THE COR20 PORATION.— 

21 (1) IN GENERAL.—The Corporation shall estab22 lish and administer a program to accelerate the com23 mercial availability of carbon dioxide capture and 

24 storage technologies and methods, including tech25 nologies which capture and store, or capture and 


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1 convert, carbon dioxide. Under such program com2 petitively awarded grants, contracts, and financial 

3 assistance shall be provided and entered into with el4 igible entities. Except as provided in paragraph (8), 

5 the Corporation shall use all funds derived from as6 sessments under subsection (d) to issue grants and 

7 contracts to eligible entities. 

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

9 contracts, and assistance under this subsection shall 

10 be to support commercial-scale demonstrations of 

11 carbon capture or storage technology projects capa12 ble of advancing the technologies to commercial 

13 readiness. Such projects should encompass a range 

14 of different coal and other fossil fuel varieties, be 

15 geographically diverse, involve diverse storage media, 

16 and employ capture or storage, or capture and con17 version, technologies potentially suitable either for 

18 new or for retrofit applications. The Corporation 

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

20 5 commercial-scale demonstration projects inte21 grating carbon capture and sequestration or conver22 sion technologies. 

23 (3) ELIGIBLE ENTITIES.—Entities eligible for 

24 grants, contracts or assistance under this subsection 

25 may include distribution utilities, electric utilities 


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1 and other private entities, academic institutions, na2 tional laboratories, Federal research agencies, State 

3 and tribal research agencies, nonprofit organizations, 

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

5 similar small-scale projects are not eligible for sup6 port by the Corporation. Owners or developers of 

7 projects supported by the Corporation shall, where 

8 appropriate, share in the costs of such projects. 

9 Projects supported by the Corporation shall meet the 

10 eligibility criteria of section 780(b) of the Clean Air 

11 Act. 

12 (4) GRANTS FOR EARLY MOVERS.—Fifty per13 cent of the funds raised under this section shall be 

14 provided in the form of grants to electric utilities 

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

16 section, committed resources to deploy a large scale 

17 electricity generation unit with integrated carbon 

18 capture and sequestration or conversion applied to a 

19 substantial portion of the unit’s carbon dioxide emis20 sions. Grant funds shall be provided to defray costs 

21 incurred by such electricity utilities for at least 5 

22 such electricity generation units. 

23 (5) ADMINISTRATION.—The members of the 

24 Board of Directors of the Corporation shall elect a 

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1 tablish committees and subcommittees of the Cor2 poration, and shall adopt rules and bylaws for the 

3 conduct of business and the implementation of this 

4 section. The Board shall appoint an Executive Di5 rector and professional support staff who may be 

6 employees of the Electric Power Research Institute 

7 (EPRI). After consultation with the Technical Advi8 sory Committee established under subsection (j), the 

9 Secretary, and the Director of the National Energy 

10 Technology Laboratory to obtain advice and rec11 ommendations on plans, programs, and project selec12 tion criteria, the Board shall establish priorities for 

13 grants, contracts, and assistance; publish requests 

14 for proposals for grants, contracts, and assistance; 

15 and award grants, contracts, and assistance competi16 tively, on the basis of merit, after the establishment 

17 of procedures that provide for scientific peer review 

18 by the Technical Advisory Committee. The Board 

19 shall give preference to applications that reflect the 

20 best overall value and prospect for achieving the 

21 purposes of the section, such as those which dem22 onstrate an integrated approach for capture and 

23 storage or capture and conversion technologies. The 

24 Board members shall not participate in making 


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1 grants or awards to entities with whom they are af2 filiated. 

3 (6) USES OF GRANTS, CONTRACTS, AND ASSIST4 ANCE.—A grant, contract, or other assistance pro5 vided under this subsection may be used to purchase 

6 carbon dioxide when needed to conduct tests of car7 bon dioxide storage sites, in the case of established 

8 projects that are storing carbon dioxide emissions, or 

9 for other purposes consistent with the purposes of 

10 this section. The Corporation shall make publicly 

11 available at no cost information learned as a result 

12 of projects which it supports financially. 

13 (7) INTELLECTUAL PROPERTY.—The Board 

14 shall establish policies regarding the ownership of in15 tellectual property developed as a result of Corpora16 tion grants and other forms of technology support. 

17 Such policies shall encourage individual ingenuity 

18 and invention. 

19 (8) ADMINISTRATIVE EXPENSES.—Up to 5 per20 cent of the funds collected in any fiscal year under 

21 subsection (d) may be used for the administrative 

22 expenses of operating the Corporation (not including 

23 costs incurred in the determination and collection of 

24 the assessments pursuant to subsection (d)). 


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

2 each year, the Corporation, after consulting with the 

3 Technical Advisory Committee and the Secretary 

4 and the Director of the Department’s National En5 ergy Technology Laboratory and other interested 

6 parties to obtain advice and recommendations, shall 

7 publish for public review and comment its proposed 

8 plans, programs, project selection criteria, and 

9 projects to be funded by the Corporation for the 

10 next calendar year. The Corporation shall also pub11 lish for public review and comment a budget plan for 

12 the next calendar year, including the probable costs 

13 of all programs, projects, and contracts and a rec14 ommended rate of assessment sufficient to cover 

15 such costs. The Secretary may recommend programs 

16 and activities the Secretary considers appropriate. 

17 The Corporation shall include in the first publication 

18 it issues under this paragraph a strategic plan or 

19 roadmap for the achievement of the purposes of the 

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

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

22 keep minutes, books, and records that clearly reflect 

23 all of the acts and transactions of the Corporation 

24 and make public such information. The books of the 

25 Corporation shall be audited by a certified public acVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00098 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 countant at least once each fiscal year and at such 

2 other times as the Corporation may designate. Cop3 ies of each audit shall be provided to the Congress, 

4 all Corporation board members, all qualified indus5 try organizations, each State regulatory authority 

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

7 If the audit determines that the Corporation’s prac8 tices fail to meet generally accepted accounting prin9 ciples the assessment collection authority of the Cor10 poration under subsection (d) shall be suspended 

11 until a certified public accountant renders a subse12 quent opinion that the failure has been corrected. 

13 The Corporation shall make its books and records 

14 available for review by the Secretary or the Comp15 troller General of the United States. 

16 (11) PUBLIC ACCESS.—The Corporation 

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

18 shall occur after at least 30 days advance public no19 tice. Meetings of the Board of Directors may be 

20 closed to the public where the agenda of such meet21 ings includes only confidential matters pertaining to 

22 project selection, the award of grants or contracts, 

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

24 minutes of all meetings of the Corporation shall be 


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1 made available to and readily accessible by the pub2 lic. 

3 (12) ANNUAL REPORT.—Each year the Cor4 poration shall prepare and make publicly available a 

5 report which includes an identification and descrip6 tion of all programs and projects undertaken by the 

7 Corporation during the previous year. The report 

8 shall also detail the allocation or planned allocation 

9 of Corporation resources for each such program and 

10 project. The Corporation shall provide its annual re11 port to the Congress, the Secretary, each State regu12 latory authority, and upon request to the public. The 

13 Secretary shall, not less than 60 days after receiving 

14 such report, provide to the President and Congress 

15 a report assessing the progress of the Corporation in 

16 meeting the objectives of this section. 

17 (d) ASSESSMENTS.— 

18 (1) AMOUNT.—(A) In all calendar years fol19 lowing its establishment, the Corporation shall col20 lect an assessment on distribution utilities for all 

21 fossil fuel-based electricity delivered directly to retail 

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

23 assessments shall reflect the relative carbon dioxide 

24 emission rates of different fossil fuel-based elecVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00100 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 tricity, and initially shall be not less than the fol2 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. 

3 (B) The Corporation is authorized to adjust the 

4 assessments on fossil fuel-based electricity to reflect 

5 changes in the expected quantities of such electricity 

6 from different fuel types, such that the assessments 

7 generate not less than $1.0 billion and not more 

8 than $1.1 billion annually. The Corporation is au9 thorized to supplement assessments through addi10 tional financial commitments. 

11 (2) INVESTMENT OF FUNDS.—Pending dis12 bursement pursuant to a program, plan, or project, 

13 the Corporation may invest funds collected through 

14 assessments under this subsection, and any other 

15 funds received by the Corporation, only in obliga16 tions of the United States or any agency thereof, in 

17 general obligations of any State or any political sub18 division thereof, in any interest-bearing account or 

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

20 the Federal Reserve System, or in obligations fully 

21 guaranteed as to principal and interest by the 

22 United States. 


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

2 Corporation does not disburse, dedicate or assign 75 

3 percent or more of the available proceeds of the as4 sessed fees in any calendar year 7 or more years fol5 lowing its establishment, due to an absence of quali6 fied projects or similar circumstances, it shall reim7 burse the remaining undedicated or unassigned bal8 ance of such fees, less administrative and other ex9 penses authorized by this section, to the distribution 

10 utilities upon which such fees were assessed, in pro11 portion to their collected assessments. 

12 (e) ERCOT.— 

13 (1) ASSESSMENT, COLLECTION, AND REMIT14 TANCE.—(A) Notwithstanding any other provision of 

15 this section, within ERCOT, the assessment pro16 vided for in subsection (d) shall be— 

17 (i) levied directly on qualified scheduling 

18 entities, or their successor entities; 

19 (ii) charged consistent with other charges 

20 imposed on qualified scheduling entities as a fee 

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

22 (iii) collected and remitted by ERCOT to 

23 the Corporation in the amounts and in the 

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


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1 (B) The assessment amounts referred to in sub2 paragraph (A) shall be— 

3 (i) determined by the amount and types of 

4 fossil fuel-based electricity delivered directly to 

5 all retail customers in the prior calendar year 

6 beginning with the year ending immediately 

7 prior to the period described in subsection 

8 (b)(2); and 

9 (ii) take into account the number of renew10 able energy credits retired by the load-serving 

11 entities represented by a qualified scheduling 

12 entity within the prior calendar year. 

13 (2) ADMINISTRATION EXPENSES.—Up to 1 per14 cent of the funds collected in any fiscal year by 

15 ERCOT under the provisions of this subsection may 

16 be used for the administrative expenses incurred in 

17 the determination, collection and remittance of the 

18 assessments to the Corporation. 

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

20 annual audit pertaining to the administration of the 

21 provisions of this subsection to the Corporation. 

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

23 subsection: 

24 (A) The term ‘‘ERCOT’’ means the Elec25 tric Reliability Council of Texas. 


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

2 the meaning adopted by ERCOT Protocols and 

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

4 (C) The term ‘‘qualified scheduling enti5 ties’’ has the meaning adopted by ERCOT Pro6 tocols and in effect on the date of enactment of 

7 this Act. 

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

9 has the meaning as promulgated and adopted 

10 by the Public Utility Commission of Texas pur11 suant to section 39.904(b) of the Public Utility 

12 Regulatory Act of 1999, and in effect on the 

13 date of enactment of this Act. 

14 (f) DETERMINATION OF FOSSIL FUEL-BASED ELEC15 TRICITY DELIVERIES.— 

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

17 (A) The assessments under subsection (d) 

18 are to be collected based on the amount of fossil 

19 fuel-based electricity delivered by each distribu20 tion utility. 

21 (B) Since many distribution utilities pur22 chase all or part of their retail consumer’s elec23 tricity needs from other entities, it may not be 

24 practical to determine the precise fuel mix for 


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1 the power sold by each individual distribution 

2 utility. 

3 (C) It may be necessary to use average 

4 data, often on a regional basis with reference to 

5 Regional Transmission Organization (‘‘RTO’’) 

6 or NERC regions, to make the determinations 

7 necessary for making assessments. 

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

9 acting in close consultation with the Energy Infor10 mation Administration, shall issue for notice and 

11 comment a proposed rule to determine the level of 

12 fossil fuel electricity delivered to retail customers by 

13 each distribution utility in the United States during 

14 the most recent calendar year or other period deter15 mined to be most appropriate. Such proposed rule 

16 shall balance the need to be efficient, reasonably pre17 cise, and timely, taking into account the nature and 

18 cost of data currently available and the nature of 

19 markets and regulation in effect in various regions 

20 of the country. Different methodologies may be ap21 plied in different regions if appropriate to obtain the 

22 best balance of such factors. 

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

24 date of enactment of this Act, and after opportunity 

25 for comment, the Secretary shall issue a final rule 


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1 under this subsection for determining the level and 

2 type of fossil fuel-based electricity delivered to retail 

3 customers by each distribution utility in the United 

4 States during the appropriate period. In issuing 

5 such rule, the Secretary may consider opportunities 

6 and costs to develop new data sources in the future 

7 and issue recommendations for the Energy Informa8 tion Administration or other entities to collect such 

9 data. After notice and opportunity for comment the 

10 Secretary may, by rule, subsequently update and 

11 modify the methodology for making such determina12 tions. 

13 (4) ANNUAL DETERMINATIONS.—Pursuant to 

14 the final rule issued under paragraph (3), the Sec15 retary shall make annual determinations of the 

16 amounts and types for each such utility and publish 

17 such determinations in the Federal Register. Such 

18 determinations shall be used to conduct the ref19 erendum under subsection (b) and by the Corpora20 tion in applying any assessment under this sub21 section. 

22 (5) REHEARING AND JUDICIAL REVIEW.—The 

23 owner or operator of any distribution utility that be24 lieves that the Secretary has misapplied the method25 ology in the final rule in determining the amount 


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1 and types of fossil fuel electricity delivered by such 

2 distribution utility may seek rehearing of such deter3 mination within 30 days of publication of the deter4 mination in the Federal Register. The Secretary 

5 shall decide such rehearing petitions within 30 days. 

6 The Secretary’s determinations following rehearing 

7 shall be final and subject to judicial review in the 

8 United States Court of Appeals for the District of 

9 Columbia. 

10 (g) COMPLIANCE WITH CORPORATION ASSESS11 MENTS.—The Corporation may bring an action in the ap12 propriate court of the United States to compel compliance 

13 with an assessment levied by the Corporation under this 

14 section. A successful action for compliance under this sub15 section may also require payment by the defendant of the 

16 costs incurred by the Corporation in bringing such action. 

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

18 following establishment of the Corporation, the Comp19 troller General of the United States shall prepare an anal20 ysis, and report to Congress, assessing the Corporation’s 

21 activities, including project selection and methods of dis22 bursement of assessed fees, impacts on the prospects for 

23 commercialization of carbon capture and storage tech24 nologies, adequacy of funding, and administration of 

25 funds. The report shall also make such recommendations 


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1 as may be appropriate in each of these areas. The Cor2 poration shall reimburse the Government Accountability 

3 Office for the costs associated with performing this mid4 course review. 

5 (i) RECOVERY OF COSTS.— 

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

7 transmission, delivery, or sales of electric energy are 

8 subject to any form of rate regulation shall not be 

9 denied the opportunity to recover the full amount of 

10 the prudently incurred costs associated with com11 plying with this section, consistent with applicable 

12 State or Federal law. 

13 (2) RATEPAYER REBATES.—Regulatory authori14 ties that approve cost recovery pursuant to para15 graph (1) may order rebates to ratepayers to the ex16 tent that distribution utilities are reimbursed 

17 undedicated or unassigned balances pursuant to sub18 section (d)(3). 

19 (j) TECHNICAL ADVISORY COMMITTEE.— 

20 (1) ESTABLISHMENT.—There is established an 

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

22 Advisory Committee’’. 

23 (2) MEMBERSHIP.—The Technical Advisory 

24 Committee shall be comprised of not less than 7 

25 members appointed by the Board from among acaVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00108 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 demic institutions, national laboratories, independent 

2 research institutions, and other qualified institu3 tions. No member of the Committee shall be affili4 ated with EPRI or with any organization having 

5 members serving on the Board. At least one member 

6 of the Committee shall be appointed from among of7 ficers or employees of the Department of Energy 

8 recommended to the Board by the Secretary of En9 ergy. 

10 (3) CHAIRPERSON AND VICE CHAIRPERSON.— 

11 The Board shall designate one member of the Tech12 nical Advisory Committee to serve as Chairperson of 

13 the Committee and one to serve as Vice Chairperson 

14 of the Committee. 

15 (4) COMPENSATION.—The Board shall provide 

16 compensation to members of the Technical Advisory 

17 Committee for travel and other incidental expenses 

18 and such other compensation as the Board deter19 mines to be necessary. 

20 (5) PURPOSE.—The Technical Advisory Com21 mittee shall provide independent assessments and 

22 technical evaluations, as well as make non-binding 

23 recommendations to the Board, concerning Corpora24 tion activities, including but not limited to the fol25 lowing: 


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1 (A) Reviewing and evaluating the Corpora2 tion’s plans and budgets described in subsection 

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

4 which could include approaches to prioritizing 

5 technologies, appropriateness of engineering 

6 techniques, monitoring and verification tech7 nologies for storage, geological site selection, 

8 and cost control measures. 

9 (B) Making annual non-binding rec10 ommendations to the Board concerning any of 

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

12 well as what types of investments, scientific re13 search, or engineering practices would best fur14 ther the goals of the Corporation. 

15 (6) PUBLIC AVAILABILITY.—All reports, evalua16 tions, and other materials of the Technical Advisory 

17 Committee shall be made available to the public by 

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

19 Board. 

20 (k) LOBBYING RESTRICTIONS.—No funds collected 

21 by the Corporation shall be used in any manner for influ22 encing legislation or elections, except that the Corporation 

23 may recommend to the Secretary and the Congress 

24 changes in this section or other statutes that would fur25 ther the purposes of this section. 


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

2 shall ensure that entities receiving grants, contracts, or 

3 other financial support from the Corporation for the 

4 project activities authorized by this section are in compli5 ance with subchapter IV of chapter 31 of title 40, United 

6 States Code (commonly known as the ‘‘Davis-Bacon 

7 Act’’). 

8 Subtitle C—Nuclear and Advanced 

9 Technologies 

10 SEC. 131. FINDINGS AND POLICY. 

11 (a) FINDINGS.—Congress finds that— 

12 (1) in 2008, 104 nuclear power plants produced 

13 19.6 percent of the electricity generated in the 

14 United States, slightly less than the electricity gen15 erated by natural gas; 

16 (2) nuclear energy is the largest provider of 

17 clean, low-carbon, electricity, almost 8 times larger 

18 than all renewable power production combined, ex19 cluding hydroelectric power; 

20 (3) nuclear energy supplies consistent, base-load 

21 electricity, independent of environmental conditions; 

22 (4) by displacing fossil fuels that would other23 wise be used for electricity production, nuclear power 

24 plants virtually eliminate emissions of greenhouse 


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1 gases and criteria pollutants associated with acid 

2 rain, smog, or ozone; 

3 (5) nuclear power generation continues to re4 quire robust efforts to address issues of safety, 

5 waste, and proliferation; 

6 (6) even if every nuclear plant is granted a 20- 

7 year extension, all currently operating nuclear plants 

8 will be retired by 2055; 

9 (7) long lead times for nuclear power plant con10 struction indicate that action to stimulate the nu11 clear power industry should not be delayed; 

12 (8) the high upfront capital costs of nuclear 

13 plant construction remain a substantial obstacle, de14 spite theoretical potential for significant cost reduc15 tion; 

16 (9) translating theoretical cost reduction poten17 tial into actual reduced construction costs remains a 

18 significant industry challenge that can be overcome 

19 only through demonstrated performance; 

20 (10) as of January 2009, 17 companies and 

21 consortia have submitted applications to the Nuclear 

22 Regulatory Commission for 26 new reactors in the 

23 United States; 

24 (11) those proposed reactors will use the latest 

25 in nuclear technology for efficiency and safety, more 


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1 advanced than the technology of the 1960s and 

2 1970s found in the reactors currently operating in 

3 the United States; 

4 (12) increased resources for the Nuclear Regu5 latory Commission and reform of the licensing proc6 ess have improved the safety and timeliness of the 

7 regulatory environment; 

8 (13) the United States has not built a new re9 actor since the 1970s and, as a result, will need to 

10 revitalize and retool the institutions and infrastruc11 ture necessary to construct, maintain, and support 

12 new reactors, including improvements in manufac13 turing of nuclear components and training for the 

14 next generation nuclear workforce; and 

15 (14) those new reactors will launch a new era 

16 for the nuclear industry, and translate into tens of 

17 thousands of jobs. 

18 (b) STATEMENT OF POLICY.—It is the policy of the 

19 United States, given the importance of transitioning to a 

20 clean energy, low-carbon economy, to facilitate the contin21 ued development and growth of a safe and clean nuclear 

22 energy industry, through— 

23 (1) reductions in financial and technical bar24 riers to construction and operation; and 


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1 (2) incentives for the development of a well2 trained workforce and the growth of safe domestic 

3 nuclear and nuclear-related industries. 

4 SEC. 132. NUCLEAR WORKER TRAINING. 

5 (a) DEFINITION OF APPLICABLE PERIOD.—In this 

6 section, the term ‘‘applicable period’’ means— 

7 (1) the 5-year period beginning on January 1, 

8 2012; and 

9 (2) each 5-year period beginning on each Janu10 ary 1 thereafter. 

11 (b) USE OF FUNDS.—Of amounts made available to 

12 carry out this section for the calendar years in each appli13 cable period— 

14 (1) the Secretary of Energy shall use such 

15 amounts for each applicable period as the Secretary 

16 of Energy determines to be necessary to increase the 

17 number and amounts of nuclear science talent ex18 pansion grants and nuclear science competitiveness 

19 grants provided under section 5004 of the America 

20 COMPETES Act (42 U.S.C. 16532); and 

21 (2) the Secretary of Labor, in consultation with 

22 nuclear energy entities and organized labor, shall 

23 use such amounts for each applicable period as the 

24 Secretary of Labor determines to be necessary to 

25 carry out programs expanding workforce training to 


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1 meet the high demand for workers skilled in nuclear 

2 power plant construction and operation, including 

3 programs for— 

4 (A) electrical craft certification; 

5 (B) preapprenticeship career technical edu6 cation for industrialized skilled crafts that are 

7 useful in the construction of nuclear power 

8 plants; 

9 (C) community college and skill center 

10 training for nuclear power plant technicians; 

11 (D) training of construction management 

12 personnel for nuclear power plant construction 

13 projects; and 

14 (E) regional grants for integrated nuclear 

15 energy workforce development programs. 

16 SEC. 133. NUCLEAR SAFETY AND WASTE MANAGEMENT 

17 PROGRAMS. 

18 (a) NUCLEAR FACILITY LONG-TERM OPERATIONS

19 RESEARCH AND DEVELOPMENT PROGRAM.— 

20 (1) ESTABLISHMENT.—As soon as practicable 

21 after the date of enactment of this Act, the Sec22 retary of Energy (referred to in this section as the 

23 ‘‘Secretary’’) shall establish a research and develop24 ment program— 


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1 (A) to address the reliability, availability, 

2 productivity, component aging, safety, and secu3 rity of nuclear power plants; 

4 (B) to improve the performance of nuclear 

5 power plants; 

6 (C) to sustain the health and safety of em7 ployees of nuclear power plants; 

8 (D) to assess the feasibility of nuclear 

9 power plants to continue to provide clean and 

10 economic electricity safely, substantially beyond 

11 the first license extension period of the nuclear 

12 power plants, which will— 

13 (i) significantly contribute to the en14 ergy security of the United States; and 

15 (ii) help protect the environment of 

16 the United States; and 

17 (E) to support significant carbon reduc18 tions, lower overall costs that are required to 

19 reduce carbon emissions, and increase energy 

20 security. 

21 (2) CONDUCT OF PROGRAM.— 

22 (A) IN GENERAL.—In carrying out the 

23 program established under paragraph (1), the 

24 Secretary shall— 


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1 (i) build a fundamental scientific basis 

2 to understand, predict, and measure 

3 changes in materials, systems, structures, 

4 equipment, and components as the mate5 rials, systems, structures, equipment, and 

6 components age through continued oper7 ations in long-term service environments; 

8 (ii) develop new safety analysis tools 

9 and methods to enhance the performance 

10 and safety of nuclear power plants; 

11 (iii) develop advanced online moni12 toring, control, and diagnostics tech13 nologies to prevent equipment failures and 

14 improve the safety of nuclear power plants; 

15 (iv) establish a technical basis for ad16 vanced fuel designs (including silicon car17 bide fuel cladding) to increase the safety 

18 margins of nuclear power plants; and 

19 (v) examine issues, including— 

20 (I) issues relating to material 

21 degradation, plant aging, and tech22 nology upgrades; and 

23 (II) any other issue that would 

24 impact decisions to extend the lifespan 

25 of nuclear power plants. 


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1 (B) TECHNICAL SUPPORT.—In carrying 

2 out the program established under paragraph 

3 (1), the Secretary shall provide to the Chairman 

4 of the Nuclear Regulatory Commission informa5 tion collected under the program— 

6 (i) to help ensure informed decisions 

7 regarding the extension of the life of nu8 clear power plants beyond a 60-year life9 span; and 

10 (ii) for the licensing and long-term 

11 management, and safe and economical op12 eration, of nuclear power plants. 

13 (b) SPENT NUCLEAR WASTE DISPOSAL RESEARCH

14 AND DEVELOPMENT PROGRAM.— 

15 (1) ESTABLISHMENT.—As soon as practicable 

16 after the date of enactment of this Act, the Sec17 retary shall establish a research and development 

18 program to improve the understanding of nuclear 

19 spent fuel management and the entire nuclear fuel 

20 cycle life. 

21 (2) CONDUCT OF PROGRAM.—In carrying out 

22 the program established under paragraph (1), the 

23 Secretary shall carry out science-based research and 

24 development activities to pursue dramatic improve25 ments in a range of nuclear spent fuel management 


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1 options, including short-term and long-term storage 

2 and disposal, and proliferation-resistant nuclear 

3 spent fuel recycling. 

4 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

5 are authorized to be appropriated such sums as are nec6 essary to carry out this section. 

7 Subtitle D—Water Efficiency 

8 SEC. 141. WATERSENSE. 

9 (a) IN GENERAL.—There is established within the 

10 Environmental Protection Agency a WaterSense program 

11 to identify and promote water-efficient products, build12 ings, landscapes, facilities, processes, and services, so as— 

13 (1) to reduce water use; 

14 (2) to reduce the strain on water, wastewater, 

15 and stormwater infrastructure; 

16 (3) to conserve energy used to pump, heat, 

17 transport, and treat water; and 

18 (4) to preserve water resources for future gen19 erations, through voluntary labeling of, or other 

20 forms of communications about, products, buildings, 

21 landscapes, facilities, processes, and services that 

22 meet the highest water efficiency and performance 

23 criteria. 

24 (b) DUTIES.—The Administrator shall— 

25 (1) establish— 


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1 (A) a WaterSense label to be used for cer2 tain items; and 

3 (B) the procedure by which an item may 

4 be certified to display the WaterSense label; 

5 (2) promote WaterSense-labeled products, 

6 buildings, landscapes, facilities, processes, and serv7 ices in the market place as the preferred tech8 nologies and services for— 

9 (A) reducing water use; and 

10 (B) ensuring product and service perform11 ance; 

12 (3) work to enhance public awareness of the 

13 WaterSense label through public outreach, edu14 cation, and other means; 

15 (4) preserve the integrity of the WaterSense 

16 label by— 

17 (A) establishing and maintaining perform18 ance criteria so that products, buildings, land19 scapes, facilities, processes, and services labeled 

20 with the WaterSense label perform as well or 

21 better than less water-efficient counterparts; 

22 (B) overseeing WaterSense certifications 

23 made by third parties; 

24 (C) conducting reviews of the use of the 

25 WaterSense label in the marketplace and taking 


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1 corrective action in any case in which misuse of 

2 the label is identified; and 

3 (D) carrying out such other measures as 

4 the Administrator determines to be appropriate; 

5 (5) regularly review and, if appropriate, update 

6 WaterSense criteria for categories of products, build7 ings, landscapes, facilities, processes, and services, 

8 at least once every 4 years; 

9 (6) to the maximum extent practicable, regu10 larly estimate and make available to the public the 

11 production and relative market shares of, and the 

12 savings of water, energy, and capital costs of water, 

13 wastewater, and stormwater infrastructure attrib14 utable to the use of WaterSense-labeled products, 

15 buildings, landscapes, facilities, processes, and serv16 ices, at least annually; 

17 (7) solicit comments from interested parties and 

18 the public prior to establishing or revising a 

19 WaterSense category, specification, installation cri20 terion, or other criterion (or prior to effective dates 

21 for any such category, specification, installation cri22 terion, or other criterion); 

23 (8) provide reasonable notice to interested par24 ties and the public of any changes (including effec25 tive dates), on the adoption of a new or revised catVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00121 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 egory, specification, installation criterion, or other 

2 criterion, along with— 

3 (A) an explanation of the changes; and 

4 (B) as appropriate, responses to comments 

5 submitted by interested parties and the public; 

6 (9) provide appropriate lead time (as deter7 mined by the Administrator) prior to the applicable 

8 effective date for a new or significant revision to a 

9 category, specification, installation criterion, or other 

10 criterion, taking into account the timing require11 ments of the manufacturing, marketing, training, 

12 and distribution process for the specific product, 

13 building and landscape, or service category ad14 dressed; 

15 (10) identify and, if appropriate, implement 

16 other voluntary approaches in commercial, institu17 tional, residential, industrial, and municipal sectors 

18 to encourage recycling and reuse technologies to im19 prove water efficiency or lower water use; and 

20 (11) where appropriate, apply the WaterSense 

21 label to water-using products that are labeled by the 

22 Energy Star program implemented by the Adminis23 trator and the Secretary of Energy. 


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1 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated to carry out this sec3 tion— 

4 (1) $7,500,000 for fiscal year 2010; 

5 (2) $10,000,000 for fiscal year 2011; 

6 (3) $20,000,000 for fiscal year 2012; 

7 (4) $50,000,000 for fiscal year 2013; and 

8 (5) for each subsequent fiscal year, the applica9 ble amount during the preceding fiscal year, as ad10 justed to reflect changes for the 12-month period 

11 ending the preceding November 30 in the Consumer 

12 Price Index for All Urban Consumers published by 

13 the Bureau of Labor Statistics of the Department of 

14 Labor. 

15 SEC. 142. FEDERAL PROCUREMENT OF WATER-EFFICIENT 

16 PRODUCTS. 

17 (a) DEFINITIONS.—In this section: 

18 (1) AGENCY.—The term ‘‘Agency’’ has the 

19 meaning given the term in section 7902(a) of title 

20 5, United States Code. 

21 (2) FEMP-DESIGNATED PRODUCT.—The term 

22 ‘‘FEMP-designated product’’ means a product that 

23 is designated under the Federal Energy Manage24 ment Program of the Department of Energy as 


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1 being among the highest 25 percent of equivalent 

2 products for efficiency. 

3 (3) PRODUCT, BUILDING, LANDSCAPE, FACIL4 ITY, PROCESS, AND SERVICE.—The terms ‘‘product’’, 

5 ‘‘building’’, ‘‘landscape’’, ‘‘facility’’, ‘‘process’’, and 

6 ‘‘service’’ do not include— 

7 (A) any water-using product, building, 

8 landscape, facility, process, or service designed 

9 or procured for combat or combat-related mis10 sions; or 

11 (B) any product, building, landscape, facil12 ity, process, or service already covered by the 

13 Federal procurement regulations established 

14 under section 553 of the National Energy Con15 servation Policy Act (42 U.S.C. 8259b). 

16 (4) WATERSENSE PRODUCT, BUILDING, LAND17 SCAPE, FACILITY, PROCESS, OR SERVICE.—The term 

18 ‘‘WaterSense product, building, landscape, facility, 

19 process, or service’’ means a product, building, land20 scape, facility, process, or service that is labeled for 

21 water efficiency under the WaterSense program. 

22 (5) WATERSENSE PROGRAM.—The term 

23 ‘‘WaterSense program’’ means the program estab24 lished by section 141. 


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1 (b) PROCUREMENT OF WATER-EFFICIENT PROD2 UCTS.— 

3 (1) REQUIREMENT.— 

4 (A) IN GENERAL.—To meet the require5 ments of an agency for a water-using product, 

6 building, landscape, facility, process, or service, 

7 the head of an Agency shall, except as provided 

8 in paragraph (2), procure— 

9 (i) a WaterSense product, building, 

10 landscape, facility, process, or service; or 

11 (ii) a FEMP-designated product. 

12 (B) SENSE OF CONGRESS REGARDING IN13 STALLATION PREFERENCES.—It is the sense of 

14 Congress that a WaterSense irrigation system 

15 should, to the maximum extent practicable, be 

16 installed and audited by a WaterSense-certified 

17 irrigation professional to ensure optimal per18 formance. 

19 (2) EXCEPTIONS.—The head of an Agency shall 

20 not be required to procure a WaterSense product, 

21 building, landscape, facility, process, or service or 

22 FEMP-designated product under paragraph (1) if 

23 the head of the Agency finds in writing that— 

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1 ignated product is not cost-effective over the life 

2 of the product, building, landscape, facility, 

3 process, or service, taking energy, water, and 

4 wastewater service cost savings into account; or 

5 (B) no WaterSense product, building, land6 scape, facility, process, or service or FEMP-des7 ignated product is reasonably available that 

8 meets the functional requirements of the Agen9 cy. 

10 (3) PROCUREMENT PLANNING.— 

11 (A) IN GENERAL.—The head of an Agency 

12 shall incorporate criteria used for evaluating 

13 WaterSense products, buildings, landscapes, fa14 cilities, processes, and services and FEMP-des15 ignated products into— 

16 (i) the specifications for all procure17 ments involving water-using products, 

18 buildings, landscapes, facilities, processes, 

19 and systems, including guide specifications, 

20 project specifications, and construction, 

21 renovation, and services contracts that in22 clude provision of water-using products, 

23 buildings, landscapes, facilities, processes, 

24 and systems; and 


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1 (ii) the factors for the evaluation of 

2 offers received for the procurement. 

3 (B) LISTING OF WATER-EFFICIENT PROD4 UCTS IN FEDERAL CATALOGS.—WaterSense 

5 products, buildings, landscapes, facilities, proc6 esses, and systems and FEMP-designated prod7 ucts shall be clearly identified and prominently 

8 displayed in any inventory or listing of products 

9 by the General Services Administration or the 

10 Defense Logistics Agency. 

11 (C) ADDITIONAL MEASURES.—The head of 

12 an Agency shall consider, to the maximum ex13 tent practicable, additional measures for reduc14 ing Agency water use, including water reuse 

15 technologies, leak detection and repair, and use 

16 of waterless products that perform similar func17 tions to existing water-using products. 

18 (c) RETROFIT PROGRAMS.—The head of each Agen19 cy, working in coordination with the Administrator and 

20 the heads of such other Agencies as the President may 

21 designate, shall develop standards and implementation 

22 procedures for a building water efficiency retrofit pro23 gram, which shall include the following elements: 

24 (1) EVALUATION OF PRODUCTS AND SYS25 TEMS.—Not later than 270 days after the date of 


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1 enactment of this Act, each Agency shall evaluate 

2 water-consuming products and systems in buildings 

3 operated by such Agency and identify opportunities 

4 for retrofit and replacement of such products and 

5 systems with high-efficiency equipment, such as 

6 zero-water-consumption equipment, high-efficiency 

7 toilets, high-efficiency shower heads, and high-effi8 ciency faucets, and other products that are certified 

9 as Watersense products or FEMP-designated prod10 ucts. 

11 (2) RETROFIT PLAN.—Not later than 360 days 

12 after the date of enactment of this Act, each Agency 

13 shall, in coordination with other appropriate Agen14 cies and officials, prepare a water efficiency retrofit 

15 plan that shall, to the maximum extent practicable, 

16 maximize retrofitting of water-consuming products 

17 and systems and replacement with high-efficiency 

18 equipment described in paragraph (1). 

19 (d) GUIDELINES.—Not later than 180 days after the 

20 date of enactment of this Act, the Administrator, working 

21 in coordination with the Secretary of Energy and the 

22 heads of such other Agencies as the President may des23 ignate, shall issue guidelines to carry out this section. 


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1 SEC. 143. STATE RESIDENTIAL WATER EFFICIENCY AND 

2 CONSERVATION INCENTIVES PROGRAM. 

3 (a) DEFINITIONS.—In this section: 

4 (1) ELIGIBLE ENTITY.—The term ‘‘eligible enti5 ty’’ means a State government, local or county gov6 ernment, tribal government, wastewater or sewerage 

7 utility, municipal water authority, energy utility, 

8 water utility, or nonprofit organization that meets 

9 the requirements of subsection (b). 

10 (2) INCENTIVE PROGRAM.—The term ‘‘incentive 

11 program’’ means a program for administering finan12 cial incentives for consumer purchase and installa13 tion of water-efficient products, buildings (including 

14 New Water-Efficient Homes), landscapes, processes, 

15 or services described in subsection (b)(1). 

16 (3) RESIDENTIAL WATER-EFFICIENT PRODUCT, 

17 BUILDING, LANDSCAPE, PROCESS, OR SERVICE.— 

18 (A) IN GENERAL.—The term ‘‘residential 

19 water-efficient product, building, landscape, 

20 process, or service’’ means a product, building, 

21 landscape, process, or service for a residence or 

22 its landscape that is rated for water efficiency 

23 and performance— 

24 (i) by the WaterSense program; or 

25 (ii) if a WaterSense specification does 

26 not exist, by the Energy Star program or 


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1 an incentive program approved by the Ad2 ministrator. 

3 (B) INCLUSIONS.—The term ‘‘residential 

4 water-efficient product, building, landscape, 

5 process, or service’’ includes— 

6 (i) faucets; 

7 (ii) irrigation technologies and serv8 ices; 

9 (iii) point-of-use water treatment de10 vices; 

11 (iv) reuse and recycling technologies; 

12 (v) toilets; 

13 (vi) clothes washers; 

14 (vii) dishwashers; 

15 (viii) showerheads; 

16 (ix) xeriscaping and other landscape 

17 conversions that replace irrigated turf; and 

18 (x) New Water Efficient Homes cer19 tified by the WaterSense program. 

20 (4) WATERSENSE PROGRAM.—The term 

21 ‘‘WaterSense program’’ means the program estab22 lished by section 141. 

23 (b) ELIGIBLE ENTITIES.—An entity shall be eligible 

24 to receive an allocation under subsection (c) if the entity— 


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1 (1) establishes (or has established) an incentive 

2 program to provide financial incentives to residential 

3 consumers for the purchase of residential water-effi4 cient products, buildings, landscapes, processes, or 

5 services; 

6 (2) submits an application for the allocation at 

7 such time, in such form, and containing such infor8 mation as the Administrator may require; and 

9 (3) provides assurances satisfactory to the Ad10 ministrator that the entity will use the allocation to 

11 supplement, but not supplant, funds made available 

12 to carry out the incentive program. 

13 (c) AMOUNT OF ALLOCATIONS.—For each fiscal year, 

14 the Administrator shall determine the amount to allocate 

15 to each eligible entity to carry out subsection (d), taking 

16 into consideration— 

17 (1) the population served by the eligible entity 

18 during the most recent calendar year for which data 

19 are available; 

20 (2) the targeted population of the incentive pro21 gram of the eligible entity, such as general house22 holds, low-income households, or first-time home23 owners, and the probable effectiveness of the incen24 tive program for that population; 


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1 (3) for existing programs, the effectiveness of 

2 the program in encouraging the adoption of water3 efficient products, buildings, landscapes, facilities, 

4 processes, and services; 

5 (4) any allocation to the eligible entity for a 

6 preceding fiscal year that remains unused; and 

7 (5) the per capita water demand of the popu8 lation served by the eligible entity during the most 

9 recent calendar year for which data are available 

10 and the accessibility of water supplies to such entity. 

11 (d) USE OF ALLOCATED FUNDS.—Funds allocated to 

12 an eligible entity under subsection (c) may be used to pay 

13 up to 50 percent of the cost of establishing and carrying 

14 out an incentive program. 

15 (e) FIXTURE RECYCLING.—Eligible entities are en16 couraged to promote or implement fixture recycling pro17 grams to manage the disposal of older fixtures replaced 

18 due to the incentive program under this section. 

19 (f) ISSUANCE OF INCENTIVES.— 

20 (1) IN GENERAL.—Financial incentives may be 

21 provided to residential consumers that meet the re22 quirements of the applicable incentive program. 

23 (2) MANNER OF ISSUANCE.—An eligible entity 

24 may— 


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1 (A) issue all financial incentives directly to 

2 residential consumers; or 

3 (B) with approval of the Administrator, 

4 delegate all or part of financial incentive admin5 istration to other organizations, including local 

6 governments, municipal water authorities, water 

7 utilities, and non-profit organizations. 

8 (3) AMOUNT.—The amount of a financial in9 centive shall be determined by the eligible entity, 

10 taking into consideration— 

11 (A) the amount of any Federal or State in12 centive available for the purchase of the resi13 dential water-efficient product or service; 

14 (B) the amount necessary to change con15 sumer behavior to purchase water-efficient 

16 products and services; and 

17 (C) the consumer expenditures for onsite 

18 preparation, assembly, and original installation 

19 of the product. 

20 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

21 are authorized to be appropriated to the Administrator to 

22 carry out this section— 

23 (1) $100,000,000 for fiscal year 2010; 

24 (2) $150,000,000 for fiscal year 2011; 

25 (3) $200,000,000 for fiscal year 2012; 


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1 (4) $150,000,000 for fiscal year 2013; 

2 (5) $100,000,000 for fiscal year 2014; and 

3 (6) for each subsequent fiscal year, the applica4 ble amount during the preceding fiscal year, as ad5 justed to reflect changes for the 12-month period 

6 ending the preceding November 30 in the Consumer 

7 Price Index for All Urban Consumers published by 

8 the Bureau of Labor Statistics of the Department of 

9 Labor. 

10 Subtitle E—Miscellaneous 

11 SEC. 151. OFFICE OF CONSUMER ADVOCACY. 

12 (a) OFFICE.— 

13 (1) ESTABLISHMENT.—There is established an 

14 Office of Consumer Advocacy to serve as an advo15 cate for the public interest. 

16 (2) DIRECTOR.—The Office shall be headed by 

17 a Director to be appointed by the President, who is 

18 admitted to the Federal Bar, with experience in pub19 lic utility proceedings, and by and with the advice 

20 and consent of the Senate. 

21 (3) DUTIES.—The Office may— 

22 (A) represent, and appeal on behalf of, en23 ergy customers on matters concerning rates or 

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1 panies under the jurisdiction of the Commis2 sion— 

3 (i) at hearings of the Commission; 

4 (ii) in judicial proceedings in the 

5 courts of the United States; and 

6 (iii) at hearings or proceedings of 

7 other Federal regulatory agencies and com8 missions; 

9 (B) monitor and review energy customer 

10 complaints and grievances on matters con11 cerning rates or service of public utilities and 

12 natural gas companies under the jurisdiction of 

13 the Commission; 

14 (C) investigate independently, or within the 

15 context of formal proceedings, the services pro16 vided by, the rates charged by, and the valu17 ation of the properties of, public utilities and 

18 natural gas companies under the jurisdiction of 

19 the Commission; 

20 (D) develop means, such as public dissemi21 nation of information, consultative services, and 

22 technical assistance, to ensure, to the maximum 

23 extent practicable, that the interests of energy 

24 consumers are adequately represented in the 


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1 course of any hearing or proceeding described 

2 in subparagraph (A); 

3 (E) collect data concerning rates or service 

4 of public utilities and natural gas companies 

5 under the jurisdiction of the Commission; and 

6 (F) prepare and issue reports and rec7 ommendations. 

8 (4) COMPENSATION AND POWERS.—The Direc9 tor may— 

10 (A) employ and fix the compensation of 

11 such staff personnel as is deemed necessary; 

12 and 

13 (B) procure temporary and intermittent 

14 services as needed. 

15 (5) ACCESS TO INFORMATION.—Each depart16 ment, agency, and instrumentality of the Federal 

17 Government is authorized and directed to furnish to 

18 the Director such reports and other information as 

19 he deems necessary to carry out his functions under 

20 this section. 

21 (b) CONSUMER ADVOCACY ADVISORY COMMITTEE.— 

22 (1) ESTABLISHMENT.—The Director shall es23 tablish an advisory committee to be known as Con24 sumer Advocacy Advisory Committee (in this section 

25 referred to as the ‘‘Advisory Committee’’) to review 


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1 rates, services, and disputes and to make rec2 ommendations to the Director. 

3 (2) COMPOSITION.—The Director shall appoint 

4 5 members to the Advisory Committee including— 

5 (A) 2 individuals representing State Utility 

6 Consumer Advocates; and 

7 (B) 1 individual, from a nongovernmental 

8 organization, representing consumers. 

9 (3) MEETINGS.—The Advisory Committee shall 

10 meet at such frequency as may be required to carry 

11 out its duties. 

12 (4) REPORTS.—The Director shall provide for 

13 publication of recommendations of the Advisory 

14 Committee on the public website established for the 

15 Office. 

16 (5) DURATION.—Notwithstanding any other 

17 provision of law, the Advisory Committee shall con18 tinue in operation during the period in which the Of19 fice exists. 

20 (6) APPLICATION OF FACA.—Except as other21 wise specifically provided, the Advisory Committee 

22 shall be subject to the Federal Advisory Committee 

23 Act. 

24 (c) DEFINITIONS.—In this section: 


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1 (1) COMMISSION.—The term ‘‘Commission’’ 

2 means the Federal Energy Regulatory Commission. 

3 (2) ENERGY CUSTOMER.—The term ‘‘energy 

4 customer’’ means a residential customer or a small 

5 commercial customer that receives products or serv6 ices from a public utility or natural gas company 

7 under the jurisdiction of the Commission. 

8 (3) NATURAL GAS COMPANY.—The term ‘‘nat9 ural gas company’’ has the meaning given the term 

10 in section 2 of the Natural Gas Act (15 U.S.C. 

11 717a). 

12 (4) OFFICE.—The term ‘‘Office’’ means the Of13 fice of Consumer Advocacy established by subsection 

14 (a)(1). 

15 (5) PUBLIC UTILITY.—The term ‘‘public util16 ity’’ has the meaning given the term in section 

17 201(e) of the Federal Power Act (16 U.S.C. 824(e)). 

18 (6) SMALL COMMERCIAL CUSTOMER.—The term 

19 ‘‘small commercial customer’’ means a commercial 

20 customer that has a peak demand of not more than 

21 1,000 kilowatts per hour. 

22 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

23 are authorized such sums as necessary to carry out this 

24 section. 


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1 (e) SAVINGS CLAUSE.—Nothing in this section af2 fects the rights or obligations of State Utility Consumer 

3 Advocates. 

4 SEC. 152. CLEAN TECHNOLOGY BUSINESS COMPETITION 

5 GRANT PROGRAM. 

6 (a) IN GENERAL.—The Administrator may provide 

7 grants to organizations to conduct business competitions 

8 that provide incentives, training, and mentorship to entre9 preneurs and early stage start-up companies throughout 

10 the United States to meet high-priority economic, environ11 mental, and energy goals in areas including air quality, 

12 energy efficiency and renewable energy, transportation, 

13 water quality and conservation, green buildings, and waste 

14 management. 

15 (b) PURPOSES.— 

16 (1) IN GENERAL.—The competitions described 

17 in subsection (a) shall have the purposes of— 

18 (A) accelerating the development and de19 ployment of clean technology businesses and 

20 green jobs; 

21 (B) stimulating green economic develop22 ment; 

23 (C) providing business training and men24 toring to early stage clean technology compa25 nies; and 


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1 (D) strengthening the competitiveness of 

2 United States clean technology industry in 

3 world trade markets. 

4 (2) PRIORITY.—Priority shall be given to busi5 ness competitions that— 

6 (A) are led by the private sector; 

7 (B) encourage regional and interregional 

8 cooperation; and 

9 (C) can demonstrate market-driven prac10 tices and the creation of cost-effective green 

11 jobs through an annual publication of competi12 tion activities and directory of companies. 

13 (c) ELIGIBILITY.— 

14 (1) IN GENERAL.—To be eligible for a grant 

15 under this section, an organization shall be any 

16 sponsored entity of an organization described in sub17 paragraph (A) that is operated as a nonprofit entity. 

18 (2) PRIORITY.—In making grants under this 

19 section, the Administrator shall give priority to orga20 nizations that can demonstrate broad funding sup21 port from private and other non-Federal funding 

22 sources to leverage Federal investment. 

23 (d) AUTHORIZATION OF APPROPRIATIONS.—There is 

24 authorized to be appropriated to carry out this section 

25 $20,000,000. 


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1 SEC. 153. PRODUCT CARBON DISCLOSURE PROGRAM. 

2 (a) EPA STUDY.—The Administrator shall conduct 

3 a study to determine the feasibility of establishing a na4 tional program for measuring, reporting, publicly dis5 closing, and labeling products or materials sold in the 

6 United States for their carbon content, and shall, not later 

7 than 18 months after the date of enactment of this Act, 

8 transmit a report to Congress which shall include the fol9 lowing: 

10 (1) A determination of whether a national prod11 uct carbon disclosure program and labeling program 

12 would be effective in achieving the intended goals of 

13 achieving greenhouse gas reductions and an exam14 ination of existing programs globally and their 

15 strengths and weaknesses. 

16 (2) Criteria for identifying and prioritizing sec17 tors and products and processes that should be cov18 ered in such program or programs. 

19 (3) An identification of products, processes, or 

20 sectors whose inclusion could have a substantial car21 bon impact (prioritizing industrial products such as 

22 iron and steel, aluminum, cement, chemicals, and 

23 paper products, and also including food, beverage, 

24 hygiene, cleaning, household cleaners, construction, 

25 metals, clothing, semiconductor, and consumer elec26 tronics). 


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1 (4) Suggested methodology and protocols for 

2 measuring the carbon content of the products across 

3 the entire carbon lifecycle of such products for use 

4 in a carbon disclosure program and labeling pro5 gram. 

6 (5) A review of existing greenhouse gas product 

7 accounting standards, methodologies, and practices 

8 including the Greenhouse Gas Protocol, ISO 14040/ 

9 44, ISO 14067, and Publically Available Specifica10 tion 2050, and including a review of the strengths 

11 and weaknesses of each. 

12 (6) A survey of secondary databases including 

13 the Manufacturing Energy Consumption Survey, an 

14 evaluation of the quality of data for use in a product 

15 carbon disclosure program and product carbon label16 ing program, an identification of gaps in the data 

17 relative to the potential purposes of a national prod18 uct carbon disclosure program and product carbon 

19 labeling program, and development of recommenda20 tions for addressing these data gaps. 

21 (7) An assessment of the utility of comparing 

22 products and the appropriateness of product carbon 

23 standards. 

24 (8) An evaluation of the information needed on 

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1 cluding what pieces of quantitative and qualitative 

2 information need to be disclosed. 

3 (9) An evaluation of the appropriate boundaries 

4 of the carbon lifecycle analysis for different sectors 

5 and products. 

6 (10) An analysis of whether default values 

7 should be developed for products whose producer 

8 does not participate in the program or does not have 

9 data to support a disclosure or label and a deter10 mination of the best ways to develop such default 

11 values. 

12 (11) A recommendation of certification and 

13 verification options necessary to assure the quality 

14 of the information and avoid greenwashing or the 

15 use of insubstantial or meaningless environmental 

16 claims to promote a product. 

17 (12) An assessment of options for educating 

18 consumers about product carbon content and the 

19 product carbon disclosure program and product car20 bon labeling program. 

21 (13) An analysis of the costs and timelines as22 sociated with establishing a national product carbon 

23 disclosure program and product carbon labeling pro24 gram, including options for a phased approach. 

25 Costs should include those for businesses associated 


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1 with the measurement of carbon footprints and 

2 those associated with creating a product carbon label 

3 and managing and operating a product carbon label4 ing program, and options for minimizing these costs. 

5 (14) An evaluation of incentives (such as finan6 cial incentives, brand reputation, and brand loyalty) 

7 to determine whether reductions in emissions can be 

8 accelerated through encouraging more efficient man9 ufacturing or by encouraging preferences for lower10 emissions products to substitute for higher-emissions 

11 products whose level of performance is no better. 

12 (b) DEVELOPMENT OF NATIONAL CARBON DISCLO13 SURE PROGRAM.—Upon conclusion of the study, and not 

14 later than 3 years after the date of enactment of this Act, 

15 the Administrator shall establish a national product car16 bon disclosure program, participation in which shall be 

17 voluntary, and which may involve a product carbon label 

18 with broad applicability to the wholesale and consumer 

19 markets to enable and encourage knowledge about carbon 

20 content by producers and consumers and to inform efforts 

21 to reduce energy consumption (carbon dioxide equivalent 

22 emissions) nationwide. In developing such a program, the 

23 Administrator shall— 

24 (1) consider the results of the study conducted 

25 under subsection (a); 


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1 (2) consider existing and planned programs and 

2 proposals and measurement standards (including the 

3 Publicly Available Specification 2050, standards to 

4 be developed by the World Resource Institute/World 

5 Business Council for Sustainable Development, the 

6 International Standards Organization, and the bill 

7 AB19 pending in the California legislature as of the 

8 date of enactment of this Act); 

9 (3) consider the compatibility of a national 

10 product carbon disclosure program with existing pro11 grams; 

12 (4) utilize incentives and other means to spur 

13 the adoption of product carbon disclosure and prod14 uct carbon labeling; 

15 (5) develop protocols and parameters for a 

16 product carbon disclosure program, including a 

17 methodology and formula for assessing, verifying, 

18 and potentially labeling a product’s greenhouse gas 

19 content, and for data quality requirements to allow 

20 for product comparison; 

21 (6) create a means to— 

22 (A) document best practices; 

23 (B) ensure clarity and consistency; 

24 (C) work with suppliers, manufacturers, 

25 and retailers to encourage participation; 


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1 (D) ensure that protocols are consistent 

2 and comparable across like products; and 

3 (E) evaluate the effectiveness of the pro4 gram; 

5 (7) make publicly available information on 

6 product carbon content to ensure transparency; 

7 (8) provide for public outreach, including a con8 sumer education program to increase awareness; 

9 (9) develop training and education programs to 

10 help businesses learn how to measure and commu11 nicate their carbon footprint and easy tools and tem12 plates for businesses to use to reduce cost and time 

13 to measure their products’ carbon lifecycle; 

14 (10) consult with the Secretary of Energy, the 

15 Secretary of Commerce, the Federal Trade Commis16 sion, and other Federal agencies, as necessary; 

17 (11) gather input from stakeholders through 

18 consultations, public workshops, or hearings with 

19 representatives of consumer product manufacturers, 

20 consumer groups, and environmental groups; 

21 (12) utilize systems for verification and product 

22 certification that will ensure that claims manufactur23 ers make about their products are valid; 

24 (13) create a process for reviewing the accuracy 

25 of product carbon label information and protecting 


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1 the product carbon label in the case of a change in 

2 the product’s energy source, supply chain, ingredi3 ents, or other factors, and specify the frequency to 

4 which data should be updated; and 

5 (14) develop a standardized, easily understand6 able carbon label, if appropriate, and create a proc7 ess for responding to inaccuracies and misuses of 

8 such a label. 

9 (c) REPORT TO CONGRESS.—Not later than 5 years 

10 after the program is established pursuant to subsection 

11 (b), the Administrator shall report to Congress on the ef12 fectiveness and impact of the program, the level of vol13 untary participation, and any recommendations for addi14 tional measures. 

15 (d) DEFINITIONS.—In this section: 

16 (1) The term ‘‘carbon content’’ means the 

17 quantity of greenhouse gas emissions and the warm18 ing impact of those emissions on the atmosphere ex19 pressed in carbon dioxide equivalent associated with 

20 a product’s value chain. 

21 (2) The term ‘‘carbon footprint’’ means the 

22 level of greenhouse gas emissions produced by a par23 ticular activity, service, or entity. 

24 (3) The term ‘‘carbon lifecycle’’ means the 

25 greenhouse gas emissions that are released as part 


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1 of the processes of creating, producing, processing, 

2 manufacturing, modifying, transporting, distrib3 uting, storing, using, recycling, or disposing of goods 

4 and services. 

5 (e) AUTHORIZATION OF APPROPRIATIONS.—There is 

6 authorized to be appropriated to the Administrator— 

7 (1) to carry out the study required by sub8 section (a), $5,000,000; and 

9 (2) to carry out the program required under 

10 subsection (b), $25,000,000 for each of fiscal years 

11 2010 through 2025. 

12 SEC. 154. STATE RECYCLING PROGRAMS. 

13 (a) ESTABLISHMENT.—The Administrator shall es14 tablish a State Recycling Program governing the use of 

15 funds by States in accordance with this Act. 

16 (b) USE OF FUNDING.— 

17 (1) IN GENERAL.—States receiving funding to 

18 carry out this section shall use the proceeds to carry 

19 out recycling programs in accordance with this sec20 tion. 

21 (2) COUNTY AND MUNICIPAL PROGRAMS.—Not 

less than 1 22 ⁄4 of the funding made available to a State 

23 to carry out this section shall be distributed by the 

24 State to county and municipal recycling programs as 

25 described in subsection (c)(1), to be used exclusively 


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1 to support recycling purposes and associated source 

2 reduction purposes, including to provide incentives— 

3 (A) for recycling-related technology that— 

4 (i) reduces or avoids greenhouse gas 

5 emissions; 

6 (ii) increases collection rates; and 

7 (iii) improves the quality of recyclable 

8 material that is separated from solid 

9 waste; 

10 (B) for energy-efficiency projects for trans11 portation fleets and recycling equipment used to 

12 collect and sort recyclable material separated 

13 from solid waste; 

14 (C) for recycling program-related expenses, 

15 including— 

16 (i) education and job training; 

17 (ii) development and implementation 

18 of variable rate (commonly referred to as 

19 ‘‘pay-as-you-throw’’) recycling programs 

20 and anaerobic digestion programs; 

21 (iii) promotion of public space recy22 cling programs; 

23 (iv) approaches for assuring compli24 ance with recycling requirements; and 


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1 (v) development or implementation of 

2 best practices for municipal solid waste re3 duction programs; and 

4 (D) to ensure that recyclable material is 

5 not sent for disposal or incineration during fluc6 tuating markets. 

(3) RECYCLING FACILITIES.—Not less than 1 7 ⁄4

8 of the funding made available to a State to carry out 

9 this section shall be distributed by the State to eligi10 ble recycling facilities as described in subsection 

11 (c)(2) to be used exclusively to support the recycling 

12 purposes and associated source reduction purposes 

13 of the facilities, including to provide— 

14 (A) incentives for the demonstration or de15 ployment of recycling-related technology and 

16 equipment that reduce or avoid greenhouse gas 

17 emissions; 

18 (B) incentives to facilities that increase the 

19 quantity and quality of recyclable material that 

20 is recycled versus sent for disposal or inciner21 ation; 

22 (C) funding for research, management, 

23 and removal of impediments to recycling, in24 cluding— 

25 (i) radioactive material; and 


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1 (ii) devices or materials that contain 

2 polychlorinated biphenyls, mercury, or 

3 chlorofluorocarbons; 

4 (D) funding for research on, and develop5 ment and deployment of, new technologies to 

6 more efficiently and effectively recycle items 

7 such as automobile shredder residue, cathode 

8 ray tubes, plastics, and tires; and 

9 (E) incentives to recycle materials identi10 fied by the Administrator that are not being re11 cycled at a recycling facility. 

12 (4) MANUFACTURING FACILITIES.—Not less 

than 1 13 ⁄4 of the funding made available to a State to 

14 carry out this section shall be distributed by the 

15 State to eligible manufacturing facilities as described 

16 in subsection (c)(3) to be used exclusively to support 

17 recycling purposes, including to provide incentives 

18 for the demonstration or deployment of— 

19 (A) manufacturing-related technology and 

20 equipment that would increase the use of recy21 clable material and avoid or reduce greenhouse 

22 gas emissions; 

23 (B) radiation detection equipment and the 

24 costs associated with recovery of detected radi25 ated recyclable material; 


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1 (C) technologies that will detect and sepa2 rate contaminants, including mercury-, lead-, 

3 and cadmium-containing devices; 

4 (D) strategies and technologies to remove 

5 impediments to recovering recyclable material; 

6 and 

7 (E) strategies and technologies to improve 

8 the energy efficiency of technology and equip9 ment used to manufacture recyclable material. 

10 (c) ELIGIBILITY REQUIREMENTS.— 

11 (1) COUNTY AND MUNICIPALITY PROGRAMS.— 

12 Funds provided under subsection (b)(2) shall be pro13 vided on a competitive basis to county and municipal 

14 recycling programs that— 

15 (A) have within the solid waste manage16 ment plans of the programs a recycling man17 agement plan that includes an education out18 reach program for the individuals and entities 

19 served by the program constituency that high20 lights the lifecycle benefits of recycling; and 

21 (B) collect at least 5 recyclable materials, 

22 such as— 

23 (i) ferrous and nonferrous metal; 

24 (ii) aluminum; 

25 (iii) plastic; 


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1 (iv) tires and rubber; 

2 (v) household electronic equipment; 

3 (vi) glass; 

4 (vii) scrap food; 

5 (viii) recoverable fiber or paper; and 

6 (ix) textiles; 

7 (C) demonstrate, not later than 3 years 

8 after the date of receipt of funds under this 

9 subtitle, reasonable progress toward achieving— 

10 (i) a collection rate goal of at least 30 

11 percent of the total recyclable materials 

12 available from the solid waste stream in 

13 the requesting State, county, or municipal 

14 program; or 

15 (ii) a 10-percent increase of collected 

16 recyclable materials compared to the total 

17 solid waste stream in the requesting State, 

18 county, or municipal program; and 

19 (D)(i) own, operate, or contract to oper20 ate— 

21 (I) a curbside recyclables collection 

22 program; 

23 (II) a redemption center or drop-off 

24 facility for recyclables; and 

25 (III) a materials recovery facility; and 


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1 (ii) have in place a quality, environmental, 

2 health, and safety management system (such as 

3 that of the International Standards Organiza4 tion or an equivalent) that includes goals to re5 duce the operational carbon baselines of the 

6 programs. 

7 (2) RECYCLING FACILITY.—Funds provided 

8 under subsection (b)(3) shall be provided on a com9 petitive basis to a recycling facility that— 

10 (A) processes recyclable material into com11 mercial specification-grade commodities for use 

12 as raw material feed stock at recovery facilities, 

13 including for use as— 

14 (i) a replacement or substitute for a 

15 virgin raw material; or 

16 (ii) a replacement or substitute for a 

17 product made, in whole or in part, from a 

18 virgin raw material; 

19 (B) has a verifiable carbon baseline; and 

20 (C) has an environmental, health and safe21 ty, and quality management system (such as 

22 that of the International Standards Organiza23 tion or an equivalent) that includes goals to re24 duce the operational carbon baseline of the re25 cycling facility per unit of material processed. 


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1 (3) MANUFACTURING FACILITY.—Funds pro2 vided under subsection (b)(4) shall be provided on a 

3 competitive basis to a manufacturing facility that— 

4 (A) can report on a verifiable carbon base5 line that is consistent with applicable reporting 

6 requirements; and 

7 (B) has an environmental, health and safe8 ty, and quality management system (such as 

9 that of the International Standards Organiza10 tion or an equivalent) that includes goals to re11 duce the operational carbon baseline of the 

12 manufacturing facility per unit of material 

13 processed. 

14 (d) REPORTING.—Each State that distributes funds 

15 under this section shall submit to the Administrator, in 

16 accordance with such requirements as the Administrator 

17 may prescribe, a report that includes— 

18 (1) a list of entities receiving funding under 

19 this section, including entities receiving such funding 

20 from units of local government pursuant to sub21 section (b)(2); 

22 (2) the amount of funding received by each 

23 such recipient; 

24 (3) the specific purposes for which the funding 

25 was conveyed to each such recipient; and 


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1 (4) documentation of the quantity of net recy2 clable material that was collected and processed and 

3 greenhouse gas emissions that were reduced or 

4 avoided accordingly, through use of the funding, 

5 based on a lifecycle calculation developed by the Ad6 ministrator. 

7 (e) METHODOLOGY AND DECISIONMAKING.—The Ad8 ministrator, as appropriate— 

9 (1) shall develop and periodically update 

10 lifecycle methods to quantify the relationship be11 tween waste management decisions, including recy12 cling and waste reduction, greenhouse gas reduc13 tions, and energy use reductions, for purposes that 

14 include— 

15 (A) helping to support decisions under 

16 Federal, State, and municipal recycling and 

17 waste management programs, including— 

18 (i) estimating greenhouse gas and en19 ergy benefits of increasing collection or 

20 adding new materials to recycling pro21 grams; 

22 (ii) comparing the benefits of recy23 cling and waste reduction to other green24 house gas and energy use reduction strate25 gies; 


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1 (iii) optimizing waste management 

2 strategies to maximize greenhouse gas re3 ductions and energy use reductions; and 

4 (iv) public education; and 

5 (B) designing products to optimize waste 

6 reduction and recycling opportunities and use of 

7 recycled materials in the manufacturing proc8 ess; 

9 (2) may collect data to support the development 

10 of the methods described in paragraph (1); and 

11 (3) to improve national consistency, shall, in 

12 consultation with appropriate State and local rep13 resentatives and municipal recycling programs, iden14 tify best practices to promote improvement in, and 

15 support State efforts in improving, municipal recy16 cling and resource recovery programs. 

17 SEC. 155. SUPPLEMENTAL AGRICULTURE AND FORESTRY 

18 GREENHOUSE GAS REDUCTION AND RENEW19 ABLE ENERGY PROGRAM. 

20 (a) AGRICULTURAL GREENHOUSE GAS REDUC21 TIONS.— 

22 (1) ESTABLISHMENT.— 

23 (A) IN GENERAL.—The Secretary of Agri24 culture (referred to in this section as the ‘‘Sec25 retary’’), in coordination with the Secretary of 


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1 the Interior, shall establish a Greenhouse Gas 

2 Reduction Incentives Program (referred to in 

3 this section as the ‘‘program’’) to provide finan4 cial assistance to owners and operators of agri5 cultural land (including land on which specialty 

6 crops are produced and private or public land 

7 used for grazing) and forest land for projects 

8 and activities that measurably increase carbon 

9 sequestration or reduce greenhouse gas emis10 sions. 

11 (B) SHARED AUTHORITY.—The Secretary 

12 shall delegate to the Secretary of the Interior 

13 the authority to carry out projects on land 

14 under the jurisdiction of or operated by the De15 partment of the Interior. 

16 (2) PRIORITY.—In carrying out the program, 

17 the Secretary shall give priority to projects or activi18 ties that— 

19 (A) reduce greenhouse gas emissions or in20 crease sequestration of greenhouse gases, and 

21 achieve significant other environmental benefits, 

22 such as the improvements of water or air qual23 ity or natural resources; and 

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1 erations where there are limited recognized op2 portunities to achieve such emission reductions 

3 or sequestration. 

4 (3) ELIGIBLE PROJECTS AND ACTIVITIES.—Eli5 gible projects and payments shall include those 

6 that— 

7 (A) reflect the comparable amount that the 

8 owners or operators would receive in the offset 

9 market if not for compliance with environ10 mental laws that preclude the owners and oper11 ators from being eligible for receiving an offset 

12 credit under a Federal law enacted for the pur13 pose of regulating greenhouse gas emissions; 

14 (B) provide greenhouse gas emission bene15 fits, but do not receive an offset credit or qual16 ify for an early action allowance under a Fed17 eral law enacted for the purpose of regulating 

18 greenhouse gas emissions, including projects 

19 and activities that provide an opportunity to 

20 demonstrate and test new or uncertain methods 

21 to reduce or sequester emissions; 

22 (C) reward early adopters, including pro23 ducers that practice no-till agriculture, and en24 sure that individuals and entities that took ac25 tion prior to the implementation of a Federal 


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1 law enacted for the purpose of regulating green2 house gas emissions are not placed at a com3 petitive disadvantage, including giving special 

4 consideration to owners or operators located in 

5 jurisdictions with more stringent environmental 

6 laws (including regulations), compliance with 

7 which precludes the owners or operators from 

8 participating such an offset market; 

9 (D) provide incentives for supplemental 

10 greenhouse gas emission reductions on private 

11 forest land of the United States; 

12 (E) prevent any conversion of land, includ13 ing native grassland, native prairie, rangeland, 

14 cropland, or forested land, that would increase 

15 greenhouse gas emissions or a loss of carbon se16 questration; or 

17 (F) support action on Federal, State, or 

18 tribal land. 

19 (4) REQUIREMENTS.—Financial incentives and 

20 support provided by the Secretary for a project or 

21 activity under this section shall, to the maximum ex22 tent practicable— 

23 (A) be directly proportional to the quantity 

24 and duration of greenhouse gas emissions re25 duced or carbon sequestered (except with reVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00160 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 spect to projects and activities that provide ad2 aptation benefits); and 

3 (B) complement and leverage existing con4 servation, forestry, and energy program expend5 itures to provide measurable emission reduction 

6 and sequestration benefits that otherwise may 

7 not take place or continue to exist. 

8 (5) ELIGIBILITY.—An owner or operator shall 

9 not be prohibited from participating in the program 

10 established under this section due to participation of 

11 the owner or operator in other Federal or State con12 servation or agricultural assistance programs. 

13 (6) FORMS OF ASSISTANCE.—The Secretary 

14 may use any of the following to provide assistance 

15 under this section: 

16 (A) Conservation easements. 

17 (B) Carbon sequestration and mitigation 

18 contracts between the owner or operator and 

19 the Secretary for the performance of projects or 

20 activities that reduce greenhouse gas emissions 

21 or sequester carbon. 

22 (C) Financial incentives through timber 

23 harvest contracts. 

24 (D) Financial incentives through grazing 

25 contracts. 


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1 (E) Grants. 

2 (F) Such other forms of assistance as the 

3 Secretary determines to be appropriate. 

4 (7) REVERSALS.—The Secretary shall specify 

5 methods to address intentional or unintentional re6 versal of carbon sequestration or greenhouse gas 

7 emission reductions that occur during the term of a 

8 contract or easement under this section. 

9 (8) ACCOUNTING SYSTEMS.—In carrying out 

10 this section, the Secretary shall develop and imple11 ment— 

12 (A) a national accounting system for car13 bon stocks, sequestration, and greenhouse gas 

14 emissions that may be used to assess progress 

15 in implementing this section at a national level; 

16 and 

17 (B) credible reporting and accounting sys18 tems to ensure that incentives provided under 

19 this section are achieving stated objectives. 

20 (9) PROGRAM MEASUREMENT, MONITORING, 

21 AND VERIFICATION.—The Secretary, in consultation 

22 with the Administrator— 

23 (A) shall establish and implement protocols 

24 that provide reasonable monitoring and 

25 verification of compliance with terms associated 


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1 with assistance provided under this section, in2 cluding field sampling of actual performance, to 

3 develop annual estimates of emission reductions 

4 achieved under the program; 

5 (B) shall report annually the total number 

6 of tons of carbon dioxide sequestered or the 

7 total number of tons of emissions avoided 

8 through incentives provided under this section; 

9 and 

10 (C) not later than 2 years after the date 

11 of enactment of this Act, and at least every 18 

12 months thereafter, submit to Congress and 

13 make available to the public on the website of 

14 the Department of Agriculture a report that in15 cludes— 

16 (i) an estimate of annual and cumu17 lative reductions generated through the 

18 program under this section, determined 

19 using standardized measures (including 

20 economic efficiency); and 

21 (ii) a summary of any changes to the 

22 program, in accordance with this section, 

23 that will be made as a result of program 

24 measurement, monitoring, and verification 

25 conducted under this section. 


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1 (b) RESEARCH PROGRAM.—The Secretary shall es2 tablish by rule a program to conduct research to develop 

3 additional projects and activities for crops to find addi4 tional techniques and methods to reduce greenhouse gas 

5 emissions or sequester greenhouse gases that may or may 

6 not meet criteria for a Federal law enacted for the purpose 

7 of regulating greenhouse gas emissions. 

8 SEC. 156. ECONOMIC DEVELOPMENT CLIMATE CHANGE 

9 FUND. 

10 (a) IN GENERAL.—Title II of the Public Works and 

11 Economic Development Act of 1965 (42 U.S.C. 3141 et 

12 seq.) is amended by adding at the end the following: 

13 ‘‘SEC. 219. ECONOMIC DEVELOPMENT CLIMATE CHANGE 

14 FUND. 

15 ‘‘(a) IN GENERAL.—On the application of an eligible 

16 recipient, the Secretary may provide technical assistance, 

17 make grants, enter into contracts, or otherwise provide 

18 amounts for projects— 

19 ‘‘(1) to promote energy efficiency to enhance 

20 economic competitiveness; 

21 ‘‘(2) to increase the use of renewable energy re22 sources to support sustainable economic development 

23 and job growth; 


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1 ‘‘(3) to support the development of conventional 

2 energy resources to produce alternative transpor3 tation fuels, electricity and heat; 

4 ‘‘(4) to develop energy efficient or environ5 mentally sustainable infrastructure; 

6 ‘‘(5) to promote environmentally sustainable 

7 economic development practices and models; 

8 ‘‘(6) to support development of energy effi9 ciency and alternative energy development plans, 

10 studies or analysis, including enhancement of new 

11 and existing Comprehensive Economic Development 

12 Strategies funded under this Act; and 

13 ‘‘(7) to supplement other Federal grants, loans, 

14 or loan guarantees for purposes described in para15 graphs (1) through (6). 

16 ‘‘(b) FEDERAL SHARE.—The Federal share of the 

17 cost of any project carried out under this section shall not 

18 exceed 80 percent, except that the Federal share of a Fed19 eral grant, loan, or loan guarantee provided under sub20 section (a)(7) may be 100 percent. 

21 ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There 

22 is authorized to be appropriated to carry out this section 

23 $50,000,000 for each of fiscal years 2009 through 2013, 

24 to remain available until expended.’’. 


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1 (b) CONFORMING AMENDMENT.—The table of con2 tents contained in section 1(b) of the Public Works and 

3 Economic Development Act of 1965 (42 U.S.C. 3141 et 

4 seq.) is amended by inserting after the item relating to 

5 section 218 the following: 

‘‘Sec. 219. Economic Development Climate Change Fund.’’. 

6 SEC. 157. STUDY OF RISK-BASED PROGRAMS ADDRESSING 

7 VULNERABLE AREAS. 

8 (a) IN GENERAL.—The Administrator, or the heads 

9 of such other Federal agencies as the President may des10 ignate, shall conduct a study and, not later than 2 years 

11 after the date of enactment of this Act, submit to Con12 gress a report regarding risk-based policies and programs 

13 addressing vulnerable areas. 

14 (b) REQUIREMENTS.—The report shall 

15 (1) review and assess Federal predisaster miti16 gation, emergency response, and flood insurance 

17 policies and programs that affect areas vulnerable to 

18 the impacts of climate change; 

19 (2) describe strategies for better addressing 

20 such vulnerabilities and provide implementation rec21 ommendations; 

22 (3) assess whether the policies and programs 

23 described in paragraph (1) support the State re24 sponse and adaptation goals and objectives identified 

25 under this Act; 


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1 (4) identify, and make recommendations to re2 solve, inconsistencies in Federal policies and pro3 grams in effect as of the date of enactment of this 

4 Act that address areas vulnerable to climate change; 

5 and 

6 (5) identify annual cost savings to the Federal 

7 Government associated with the implementation of 

8 the strategies and recommendations contained in the 

9 report. 

10 Subtitle F—Energy Efficiency and 

11 Renewable Energy 

12 SEC. 161. RENEWABLE ENERGY. 

13 (a) DEFINITIONS.—In this section: 

14 (1) RENEWABLE ENERGY.—The term ‘‘renew15 able energy’’ means electric energy generated from 

16 solar, wind, biomass, landfill gas, ocean (including 

17 tidal, wave, current, and thermal), geothermal, mu18 nicipal solid waste, or new hydroelectric generation 

19 capacity achieved from increased efficiency or addi20 tions of new capacity at an existing hydroelectric 

21 project. 

22 (2) RENEWABLE PORTFOLIO STANDARD.—The 

23 term ‘‘ ‘renewable portfolio standard’ ’’ means a 

24 State statute that requires electricity providers to 


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1 obtain a minimum percentage of their power from 

2 renewable energy resources by a certain date. 

3 (b) GRANTS.—The Administrator, in consultation 

4 with the Secretaries of Energy, Interior, and Agriculture, 

5 may provide grants for projects to increase the quantity 

6 of energy a State uses from renewable sources under State 

7 renewable portfolio standard laws. 

8 (c) ELIGIBILITY.—The Administrator shall review for 

9 approval projects applications that are— 

10 (1) submitted by State and local governments, 

11 Indian tribes, public utilities, regional energy co12 operatives, or individual energy producers from 

13 states with a binding Renewable Portfolio Standard; 

14 or 

15 (2) submitted by State and local governments, 

16 Indian tribes, public utilities, or regional energy co17 operatives from States with nonbinding goals for 

18 adoption of renewable energy requirements. 

19 (d) PRIORITY.—The Administrator shall give priority 

20 to project applications that are— 

21 (1) submitted by States with a binding renew22 able portfolio standard; 

23 (2) cost-effective in achieving greater renewable 

24 energy production in each State. 

25 (e) CERTIFICATION.— 


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1 (1) IN GENERAL.—The Administrator shall no2 tify in writing the Governor of each eligible State as 

3 described in section (c) at the time at which the Ad4 ministrator begins review of a project application re5 ceived from an eligible entity within the State. 

6 (2) CERTIFICATION.—The Governor shall cer7 tify in writing within 30 days of receipt of the Ad8 ministrator’s notification described in subsection (1) 

9 that the project application— 

10 (A) will assist the State in reaching renew11 able portfolio standard targets under applicable 

12 state laws; and 

13 (B) has secured non-Federal funding 

14 sources that, in conjunction with the requested 

15 grant amount, will be sufficient to complete the 

16 renewable energy project. 

17 (f) RULEMAKING.— 

18 (1) IN GENERAL.—Not later than 90 days after 

19 the date of enactment of this Act, the Administrator 

20 shall initiate rulemaking procedures necessary to im21 plement this section. 

22 (2) FINAL RULES; ACCEPTANCE OF APPLICA23 TIONS.—Not later than 90 days after the close of 

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1 making described in paragraph (1), the Adminis2 trator shall— 

3 (A) promulgate final regulations to carry 

4 out this section; and 

5 (B) begin accepting project applications for 

6 review. 

7 (g) REPORTING.—Not later than 180 days after the 

8 date of enactment of this Act, and every 180 days there9 after, the Administrator shall submit to the Committee on 

10 Energy and Commerce of the House of Representatives 

11 and the Committee on Environment and Public Works of 

12 the Senate a report specifying, with respect to the pro13 gram under this section— 

14 (1) the project applications received; 

15 (2) the project applications approved; 

16 (3) the amount of funding allocated per project; 

17 and 

18 (4) the cumulative benefits of the grant pro19 gram. 

20 (h) GRANT AMOUNT.—A grant provided under this 

21 section may be in an amount that does not exceed 50 per22 cent of the total cost of the renewable energy project to 

23 be funded by the grant. 


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1 (i) AUTHORIZATION.—There are authorized to be ap2 propriated such sums as are necessary to carry out this 

3 section. 

4 SEC. 162. ADVANCED BIOFUELS. 

5 (a) DEFINITIONS.—In this section: 

6 (1) ADVANCED BIOFUEL.—The term ‘‘advanced 

7 biofuel’’ shall have such meaning as is given the 

8 term by the Administrator in regulations promul9 gated under subsection (c). 

10 (2) ELIGIBLE ENTITY.—The term ‘‘eligible enti11 ty’’ means an individual, corporate entity, unit of 

12 State or local government, Indian tribe, farm cooper13 ative, institution of higher learning, rural electric co14 operative, or public utility. 

15 (b) GRANTS.—The Administrator, in consultation 

16 with the Secretary of Agriculture and the Secretary of En17 ergy, may provide grants to support research and develop18 ment of advanced biofuels. 

19 (c) REGULATIONS.— 

20 (1) IN GENERAL.—Not later than 18 months 

21 after the date of enactment of this Act, the Adminis22 trator shall promulgate regulations to carry out this 

23 section (including a definition of the term ‘‘advanced 

24 biofuel’’ for the purpose of providing assistance 

25 under this section). 


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1 (2) REQUIREMENTS.—The regulations promul2 gated under paragraph (1) shall— 

3 (A) provide that the Administrator shall 

4 make grants available to eligible entities to sup5 port— 

6 (i) research regarding the production 

7 of advanced biofuels; 

8 (ii) the development of new advanced 

9 biofuel production and capacity-building 

10 technologies; 

11 (iii) the development and construction 

12 of commercial-scale advanced biofuel pro13 duction facilities; and 

14 (iv) the expanded production of ad15 vanced biofuels; 

16 (B) provide that, to receive a grant under 

17 this section, an eligible entity shall submit to 

18 the Administrator— 

19 (i) a project proposal with detailed 

20 project information, as determined by the 

21 Administrator; and 

22 (ii) such records as the Administrator 

23 may require as evidence of the production 

24 of advanced biofuels or the importance and 


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1 necessity of advanced biofuels research and 

2 new technologies; and 

3 (C) include appropriate cost-sharing re4 quirements developed by the Administrator for 

5 grant awards for authorized uses of funds 

6 under this section. 

7 (3) PRIORITY.—The Administrator shall give 

8 priority to eligible entities based on— 

9 (A) technical and economic feasibility of a 

10 project proposal; 

11 (B) cost-effectiveness of a project proposal; 

12 (C) the use of innovative technologies in a 

13 project proposal; 

14 (D) the availability of non-Federal re15 sources, including private resources, to fund the 

16 project proposal; and 

17 (E) whether the project proposed can be 

18 replicated. 

19 SEC. 163. ENERGY EFFICIENCY IN BUILDING CODES. 

20 (a) ENERGY EFFICIENCY TARGETS.— 

21 (1) RULEMAKING TO ESTABLISH TARGETS.— 

22 The Administrator, or such other agency head or 

23 heads as may be designated by the President, in 

24 consultation with the Director of the National Insti25 tute of Standards and Technology, shall promulgate 


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1 regulations establishing building code energy effi2 ciency targets for the national average percentage 

3 improvement of buildings’ energy performance. Such 

4 regulations shall establish a national building code 

5 energy efficiency target for residential buildings and 

6 commercial buildings when built to a code meeting 

7 the target, beginning not later than January 1, 2014 

8 and applicable each calendar year through December 

9 31, 2030. 

10 (b) NATIONAL ENERGY EFFICIENCY BUILDING

11 CODES.— 

12 (1) RULEMAKING TO ESTABLISH NATIONAL

13 CODES.—The Administrator, or such other agency 

14 head or heads as may be designated by the Presi15 dent, shall promulgate regulations establishing na16 tional energy efficiency building codes for residential 

17 and commercial buildings. Such regulations shall be 

18 sufficient to meet the national building code energy 

19 efficiency targets established under subsection (a) in 

20 the most cost-effective manner, and may include pro21 visions for State adoption of the national building 

22 code standards and certification of State programs 

23 (c) ANNUAL REPORTS.—The Administrator, or such 

24 other agency head or heads as may be designated by the 


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1 President, shall annually submit to Congress, and publish 

2 in the Federal Register, a report on— 

3 (1) the status of national energy efficiency 

4 building codes; 

5 (2) the status of energy efficiency building code 

6 adoption and compliance in the States; 

7 (3) the implementation of and compliance with 

8 regulations promulgated under this section; 

9 (4) the status of Federal and State enforcement 

10 of building codes; and 

11 (5) impacts of action under this section, and 

12 potential impacts of further action, on lifetime en13 ergy use by buildings, including resulting energy and 

14 cost savings. 

15 SEC. 164. RETROFIT FOR ENERGY AND ENVIRONMENTAL 

16 PERFORMANCE. 

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

18 (1) ASSISTED HOUSING.—The term ‘‘assisted 

19 housing’’ means those properties receiving project20 based assistance pursuant to section 202 of the 

21 Housing Act of 1959 (12 U.S.C. 1701q), section 

22 811 of the Cranston-Gonzalez National Affordable 

23 Housing Act (42 U.S.C. 8013), section 8 of the 

24 United States Housing Act of 1937 (42 U.S.C. 

25 1437f), or similar programs. 


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1 (2) NONRESIDENTIAL BUILDING.—The term 

2 ‘‘nonresidential building’’ means a building with a 

3 primary use or purpose other than residential hous4 ing, including any building used for commercial of5 fices, schools, academic and other public and private 

6 institutions, nonprofit organizations including faith7 based organizations, hospitals, hotels, and other non8 residential purposes. Such buildings shall include 

9 mixed-use properties used for both residential and 

10 nonresidential purposes in which more than half of 

11 building floor space is nonresidential. 

12 (3) PERFORMANCE-BASED BUILDING RETROFIT

13 PROGRAM.—The term ‘‘performance-based building 

14 retrofit program’’ means a program that determines 

15 building energy efficiency success based on actual 

16 measured savings after a retrofit is complete, as evi17 denced by energy invoices or evaluation protocols. 

18 (4) PRESCRIPTIVE BUILDING RETROFIT PRO19 GRAM.—The term ‘‘prescriptive building retrofit pro20 gram’’ means a program that projects building ret21 rofit energy efficiency success based on the known 

22 effectiveness of measures prescribed to be included 

23 in a retrofit. 

24 (5) PUBLIC HOUSING.—The term ‘‘public hous25 ing’’ means properties receiving assistance under 


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1 section 9 of the United States Housing Act of 1937 

2 (42 U.S.C. 1437g). 

3 (6) RECOMMISSIONING; 

4 RETROCOMMISSIONING.—The terms ‘‘recommission5 ing’’ and ‘‘retrocommissioning’’ have the meaning 

6 given those terms in section 543(f)(1) of the Na7 tional Energy Conservation Policy Act (42 U.S.C. 

8 8253(f)(1)). 

9 (7) RESIDENTIAL BUILDING.—The term ‘‘resi10 dential building’’ means a building whose primary 

11 use is residential. Such buildings shall include sin12 gle-family homes (both attached and detached), 

13 owner-occupied units in larger buildings with their 

14 own dedicated space-conditioning systems, apart15 ment buildings, multi-unit condominium buildings, 

16 public housing, assisted housing, and buildings used 

17 for both residential and nonresidential purposes in 

18 which more than half of building floor space is resi19 dential. 

20 (8) STATE ENERGY PROGRAM.—The term 

21 ‘‘State Energy Program’’ means the program under 

22 part D of title III of the Energy Policy and Con23 servation Act (42 U.S.C. 6321 et seq.). 

24 (b) ESTABLISHMENT.—The Administrator shall de25 velop and implement, in consultation with the Secretary 


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1 of Energy, standards for a national energy and environ2 mental building retrofit policy for single-family and multi3 family residences. The Administrator shall develop and 

4 implement, in consultation with the Secretary of Energy 

5 and the Director of Commercial High-Performance Green 

6 Buildings, standards for a national energy and environ7 mental building retrofit policy for nonresidential buildings. 

8 The programs to implement the residential and nonresi9 dential policies based on the standards developed under 

10 this section shall together be known as the Retrofit for 

11 Energy and Environmental Performance (REEP) pro12 gram. 

13 (c) PURPOSE.—The purpose of the REEP program 

14 is to facilitate the retrofitting of existing buildings across 

15 the United States to achieve maximum cost-effective en16 ergy efficiency improvements and significant improve17 ments in water use and other environmental attributes. 

18 (d) FEDERAL ADMINISTRATION.— 

19 (1) EXISTING PROGRAMS.—In creating and op20 erating the REEP program— 

21 (A) the Administrator shall make appro22 priate use of existing programs, including the 

23 Energy Star program and in particular the En24 vironmental Protection Agency Energy Star for 

25 Buildings program; and 


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1 (B) the Administrator shall consult with 

2 the Secretary of Energy regarding appropriate 

3 use of existing programs, including delegating 

4 authority to the Director of Commercial High5 Performance Green Buildings appointed under 

6 section 421 of the Energy Independence and 

7 Security Act of 2007 (42 U.S.C. 17081). 

8 (2) CONSULTATION AND COORDINATION.—The 

9 Administrator shall consult with and coordinate with 

10 the and the Secretary of Energy and the Secretary 

11 of Housing and Urban Development in carrying out 

12 the REEP program with regard to retrofitting of 

13 public housing and assisted housing. As a result of 

14 such consultation, the Administrator shall establish 

15 standards to ensure that retrofits of public housing 

16 and assisted housing funded pursuant to this section 

17 are cost-effective, including opportunities to address 

18 the potential co-performance of repair and replace19 ment needs that may be supported with other forms 

20 of Federal assistance. Owners of public housing or 

21 assisted housing receiving funding through the 

22 REEP program shall agree to continue to provide 

23 affordable housing consistent with the provisions of 

24 the authorizing legislation governing each program 

25 for an additional period commensurate with the 


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1 funding received, as determined in accordance with 

2 guidelines established by the Secretary of Housing 

3 and Urban Development. 

4 (3) ASSISTANCE.—The Administrator shall pro5 vide consultation and assistance to State and local 

6 agencies for the establishment of revolving loan 

7 funds, loan guarantees, or other forms of financial 

8 assistance under this section. 

9 (e) STATE AND LOCAL ADMINISTRATION.— 

10 (1) DESIGNATION AND DELEGATION.—A State 

11 may designate one or more agencies or entities, in12 cluding those regulated by the State, to carry out 

13 the purposes of this section, but shall designate one 

14 entity or individual as the principal point of contact 

15 for the Administrator regarding the REEP Pro16 gram. The designated State agency, agencies, or en17 tities may delegate performance of appropriate ele18 ments of the REEP program, upon their request 

19 and subject to State law, to counties, municipalities, 

20 appropriate public agencies, and other divisions of 

21 local government, as well as to entities regulated by 

22 the State. In making any such designation or delega23 tion, a State shall give priority to entities that ad24 minister existing comprehensive retrofit programs, 

25 including those under the supervision of State utility 


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1 regulators. States shall maintain responsibility for 

2 meeting the standards and requirements of the 

3 REEP program. In any State that elects not to ad4 minister the REEP program, a unit of local govern5 ment may propose to do so within its jurisdiction, 

6 and if the Administrator finds that such local gov7 ernment is capable of administering the program, 

8 the Administrator may provide assistance to that 

9 local government, prorated according to the popu10 lation of the local jurisdiction relative to the popu11 lation of the State, for purposes of the REEP pro12 gram. 

13 (2) EMPLOYMENT.—States and local govern14 ment entities may administer a REEP program in 

15 a manner that authorizes public or regulated inves16 tor-owned utilities, building auditors and inspectors, 

17 contractors, nonprofit organizations, for-profit com18 panies, and other entities to perform audits and ret19 rofit services under this section. A State may pro20 vide incentives for retrofits without direct participa21 tion by the State or its agents, so long as the result22 ing savings are measured and verified. A State or 

23 local administrator of a REEP program shall seek 

24 to ensure that sufficient qualified entities are avail25 able to support retrofit activities so that building 


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1 owners have a competitive choice among qualified 

2 auditors, raters, contractors, and providers of serv3 ices related to retrofits. Nothing in this section is in4 tended to deny the right of a building owner to 

5 choose the specific providers of retrofit services to 

6 engage for a retrofit project in that owner’s building. 

7 (3) EQUAL INCENTIVES FOR EQUAL IMPROVE8 MENT.—In general, the States should strive to offer 

9 the same levels of incentives for retrofits that meet 

10 the same efficiency improvement goals, regardless of 

11 whether the State, its agency or entity, or the build12 ing owner has conducted the retrofit achieving the 

13 improvement, provided the improvement is measured 

14 and verified. 

15 (f) ELEMENTS OF REEP PROGRAM.—The Adminis16 trator, in consultation with the Secretary of Energy, shall 

17 establish goals, guidelines, practices, and standards for ac18 complishing the purpose stated in subsection (c), and shall 

19 annually review and, as appropriate, revise such goals, 

20 guidelines, practices, and standards. The program under 

21 this section shall include the following: 

22 (1) Residential Energy Services Network 

23 (RESNET) or Building Performance Institute 

24 (BPI) analyst certification of residential building en25 ergy and environment auditors, inspectors, and ratVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00182 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 ers, or an equivalent certification system as deter2 mined by the Administrator. 

3 (2) BPI certification or licensing by States of 

4 residential building energy and environmental ret5 rofit contractors, or an equivalent certification or li6 censing system as determined by the Administrator. 

7 (3) Provision of BPI, RESNET, or other ap8 propriate information on equipment and procedures, 

9 as determined by the Administrator, that contractors 

10 can use to test the energy and environmental effi11 ciency of buildings effectively (such as infrared pho12 tography and pressurized testing, and tests for water 

13 use and indoor air quality). 

14 (4) Provision of clear and effective materials to 

15 describe the testing and retrofit processes for typical 

16 buildings. 

17 (5) Guidelines for offering and managing pre18 scriptive building retrofit programs and perform19 ance-based building retrofit programs for residential 

20 and nonresidential buildings. 

21 (6) Guidelines for applying recommissioning 

22 and retrocommissioning principles to improve a 

23 building’s operations and maintenance procedures. 

24 (7) A requirement that building retrofits con25 ducted pursuant to a REEP program utilize, espeVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00183 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 cially in all air-conditioned buildings, roofing mate2 rials with high solar energy reflectance, unless inap3 propriate due to green roof management, solar en4 ergy production, or for other reasons identified by 

5 the Administrator, in order to reduce energy con6 sumption within the building, increase the albedo of 

7 the building’s roof, and decrease the heat island ef8 fect in the area of the building, without reduction of 

9 otherwise applicable ceiling insulation standards. 

10 (8) Determination of energy savings in a per11 formance-based building retrofit program through— 

12 (A) for residential buildings, comparison of 

13 before and after retrofit scores on the Home 

14 Energy Rating System (HERS) Index, where 

15 the final score is produced by an objective third 

16 party; 

17 (B) for nonresidential buildings, Environ18 mental Protection Agency Portfolio Manager 

19 benchmarks; or 

20 (C) for either residential or nonresidential 

21 buildings, use of an Administrator-approved 

22 simulation program by a contractor with the 

23 appropriate certification, subject to appropriate 

24 software standards and verification of at least 


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1 15 percent of all work done, or such other per2 centage as the Administrator may determine. 

3 (9) Guidelines for utilizing the Energy Star 

4 Portfolio Manager, the Home Energy Rating System 

5 (HERS) rating system, Home Performance with En6 ergy Star program approvals, and any other tools 

7 associated with the retrofit program. 

8 (10) Requirements and guidelines for post-ret9 rofit inspection and confirmation of work and energy 

10 savings. 

11 (11) Detailed descriptions of funding options 

12 for the benefit of State and local governments, along 

13 with model forms, accounting aids, agreements, and 

14 guides to best practices. 

15 (12) Guidance on opportunities for— 

16 (A) rating or certifying retrofitted build17 ings as Energy Star buildings, or as green 

18 buildings under a recognized green building rat19 ing system; 

20 (B) assigning Home Energy Rating Sys21 tem (HERS) or similar ratings; and 

22 (C) completing any applicable building per23 formance labels. 


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1 (13) Sample materials for publicizing the pro2 gram to building owners, including public service an3 nouncements and advertisements. 

4 (14) Processes for tracking the numbers and lo5 cations of buildings retrofitted under the REEP pro6 gram, with information on projected and actual sav7 ings of energy and its value over time. 

8 (g) REQUIREMENTS.—As a condition of receiving as9 sistance for the REEP program pursuant to this Act, a 

10 State or qualifying local government shall— 

11 (1) adopt the standards for training, certifi12 cation of contractors, certification of buildings, and 

13 post-retrofit inspection as developed by the Adminis14 trator for residential and nonresidential buildings, 

15 respectively, except as necessary to match local con16 ditions, needs, efficiency opportunities, or other local 

17 factors, or to accord with State laws or regulations, 

18 and then only after the Administrator approves such 

19 a variance; 

20 (2) establish fiscal controls and accounting pro21 cedures (which conform to generally accepted gov22 ernment accounting principles) sufficient to ensure 

23 proper accounting during appropriate accounting pe24 riods for payments received and disbursements, and 

25 for fund balances; 


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1 (3) agree to make 10 percent of assistance re2 ceived to carry out this section available on a pref3 erential basis for retrofit projects proposed for pub4 lic housing and assisted housing, provided that— 

5 (A) none of such funds shall be used for 

6 demolition of such housing; 

7 (B) such retrofits not shall not be used to 

8 justify any increase in rents charged to resi9 dents of such housing; and 

10 (C) owners of such housing shall agree to 

11 continue to provide affordable housing con12 sistent with the provisions of the authorizing 

13 legislation governing each program for an addi14 tional period commensurate with the funding 

15 received; and 

16 (4) the Administrator shall conduct or require 

17 each State to have such independent financial audits 

18 of REEP-related funding as the Administrator con19 siders necessary or appropriate to carry out the pur20 poses of this section. 

21 (h) OPTIONS TO SUPPORT REEP PROGRAM.—The 

22 assistance provided under this section shall support the 

23 implementation through State REEP programs of alter24 nate means of creating incentives for, or reducing financial 


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1 barriers to, improved energy and environmental perform2 ance in buildings, consistent with this section, including— 

3 (1) implementing prescriptive building retrofit 

4 programs and performance-based building retrofit 

5 programs; 

6 (2) providing credit enhancement, interest rate 

7 subsidies, loan guarantees, or other credit support; 

8 (3) providing initial capital for public revolving 

9 fund financing of retrofits; 

10 (4) providing funds to support utility-operated 

11 retrofit programs with repayments over time 

12 through utility rates, calibrated to create net positive 

13 cash flow to the building owner, and transferable 

14 from one building owner to the next with the build15 ing’s utility services; 

16 (5) providing funds to local government pro17 grams to provide REEP services and financial as18 sistance; and 

19 (6) other means proposed by State and local 

20 agencies, subject to the approval of the Adminis21 trator. 

22 (i) SUPPORT FOR PROGRAM.— 

23 (1) INITIAL AWARD LIMITS.—Except as pro24 vided in paragraph (2), State and local REEP pro25 grams may make per-building direct expenditures 


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1 for retrofit improvements, or their equivalent in indi2 rect or other forms of financial support, from funds 

3 made available to carry out this section, in amounts 

4 not to exceed the following amounts per unit: 

5 (A) RESIDENTIAL BUILDING PROGRAM.— 

6 (i) AWARDS.—For residential build7 ings— 

8 (I) support for a free or low-cost 

9 detailed building energy audit that 

10 prescribes measures sufficient to 

11 achieve at least a 20 percent reduc12 tion in energy use, by providing an in13 centive equal to the documented cost 

14 of such audit, but not more than 

15 $200, in addition to any earned by 

16 achieving a 20 percent or greater effi17 ciency improvement; 

18 (II) a total of $1,000 for a com19 bination of measures, prescribed in an 

20 audit conducted under subclause (I), 

21 designed to reduce energy consump22 tion by more than 10 percent, and 

23 $2,000 for a combination of measures 

24 prescribed in such an audit, designed 


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1 to reduce energy consumption by more 

2 than 20 percent; 

3 (III) $3,000 for demonstrated 

4 savings of 20 percent, pursuant to a 

5 performance-based building retrofit 

6 program; and 

7 (IV) $1,000 for each additional 5 

8 percentage points of energy savings 

9 achieved beyond savings for which 

10 funding is provided under subclause 

11 (II) or (III). 

12 Funding shall not be provided under 

13 clauses (II) and (III) for the same energy 

14 savings. 

15 (ii) MAXIMUM PERCENTAGE.—Awards 

16 under clause (i) shall not exceed 50 per17 cent of retrofit costs for each building. For 

18 buildings with multiple residential units, 

19 awards under clause (i) shall not be great20 er than 50 percent of the total cost of ret21 rofitting the building, prorated among indi22 vidual residential units on the basis of rel23 ative costs of the retrofit. In the case of 

24 public housing and assisted housing, the 

25 50 percent contribution matching the conVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00190 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 tribution from REEP program funds may 

2 come from any other source, including 

3 other Federal funds. 

4 (iii) ADDITIONAL AWARDS.—Addi5 tional awards may be provided for pur6 poses of increasing energy efficiency, for 

7 buildings achieving at least 20 percent en8 ergy savings using funding provided under 

9 clause (i), in the form of grants of not 

10 more than $600 for measures projected or 

11 measured (using an appropriate method 

12 approved by the Administrator) to achieve 

13 at least 35 percent potable water savings 

14 through equipment or systems with an es15 timated service life of not less than 7 

16 years, and not more than an additional 

17 $20 may be provided for each additional 

18 one percent of such savings, up to a max19 imum total grant of $1,200. 

20 (B) NONRESIDENTIAL BUILDING PRO21 GRAM.— 

22 (i) AWARDS.—For nonresidential 

23 buildings— 

24 (I) support for a free or low-cost 

25 detailed building energy audit that 


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1 prescribes, as part of a energy-reduc2 ing measures sufficient to achieve at 

3 least a 20 percent reduction in energy 

4 use, by providing an incentive equal to 

5 the documented cost of such audit, 

6 but not more than $500, in addition 

7 to any award earned by achieving a 

8 20 percent or greater efficiency im9 provement; 

10 (II) $0.15 per square foot of ret11 rofit area for demonstrated energy use 

12 reductions from 20 percent to 30 per13 cent; 

14 (III) $0.75 per square foot for 

15 demonstrated energy use reductions 

16 from 30 percent to 40 percent; 

17 (IV) $1.60 per square foot for 

18 demonstrated energy use reductions 

19 from 40 percent to 50 percent; and 

20 (V) $2.50 per square foot for 

21 demonstrated energy use reductions 

22 exceeding 50 percent. 

23 (ii) MAXIMUM PERCENTAGE.— 

24 Amounts provided under subclauses (II) 

25 through (V) of clause (i) combined shall 


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1 not exceed 50 percent of the total retrofit 

2 cost of a building. In nonresidential build3 ings with multiple units, such awards shall 

4 be prorated among individual units on the 

5 basis of relative costs of the retrofit. 

6 (iii) ADDITIONAL AWARDS.—Addi7 tional awards may be provided, for build8 ings achieving at least 20 percent energy 

9 savings using funding provided under 

10 clause (i), as follows: 

11 (I) WATER.—For purposes of in12 creasing energy efficiency, grants may 

13 be made for whole building potable 

14 water use reduction (using an appro15 priate method approved by the Ad16 ministrator) for up to 50 percent of 

17 the total retrofit cost, including 

18 amounts up to— 

19 (aa) $24.00 per thousand 

20 gallons per year of potable water 

21 savings of 40 percent or more; 

22 (bb) $27.00 per thousand 

23 gallons per year of potable water 

24 savings of 50 percent or more; 

25 and 


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1 (cc) $30.00 per thousand 

2 gallons per year of potable water 

3 savings of 60 percent or more. 

4 (II) ENVIRONMENTAL IMPROVE5 MENTS.—Additional awards of up to 

6 $1,000 may be granted for the inclu7 sion of other environmental attributes 

8 that the Administrator, in consulta9 tion with the Secretary, identifies as 

10 contributing to energy efficiency. Such 

11 attributes may include, but are not 

12 limited to waste diversion and the use 

13 of environmentally preferable mate14 rials (including salvaged, renewable, 

15 or recycled materials, and materials 

16 with no or low-VOC content). The Ad17 ministrator may recommend that 

18 States develop such standards as are 

19 necessary to account for local or re20 gional conditions that may affect the 

21 feasibility or availability of identified 

22 resources and attributes. 

23 (iv) INDOOR AIR QUALITY MINIMUM.— 

24 Nonresidential buildings receiving incen25 tives under this section must satisfy at a 


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1 minimum the most recent version of 

2 ASHRAE Standard 62.1 for ventilation, or 

3 the equivalent as determined by the Ad4 ministrator. A State may issue a waiver 

5 from this requirement to a building project 

6 on a showing that such compliance is in7 feasible due to the physical constraints of 

8 the building’s existing ventilation system, 

9 or such other limitations as may be speci10 fied by the Administrator. 

11 (C) DISASTER DAMAGED BUILDINGS.—Any 

12 source of funds, including Federal funds pro13 vided through the Robert T. Stafford Disaster 

14 Relief and Emergency Assistance Act, shall 

15 qualify as the building owner’s 50 percent con16 tribution, in order to match the contribution of 

17 REEP funds, so long as the REEP funds are 

18 only used to improve the energy efficiency of 

19 the buildings being reconstructed. In addition, 

20 the appropriate Federal agencies providing as21 sistance to building owners through the Robert 

22 T. Stafford Disaster Relief and Emergency As23 sistance Act shall make information available, 

24 following a disaster, to building owners rebuild25 ing disaster damaged buildings with assistance 


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1 from the Act, that REEP funds may be used 

2 for energy efficiency improvements. 

3 (D) HISTORIC BUILDINGS.—Notwith4 standing subparagraphs (A) and (B), a building 

5 in or eligible for the National Register of His6 toric Places shall be eligible for awards under 

7 this paragraph in amounts up to 120 percent of 

8 the amounts set forth in subparagraphs (A) and 

9 (B). 

10 (E) SUPPLEMENTAL SUPPORT.—State and 

11 local governments may supplement the per12 building expenditures under this paragraph 

13 with funding from other sources. 

14 (2) ADJUSTMENT.—The Administrator may ad15 just the specific dollar amounts provided under para16 graph (1) in years subsequent to the second year 

17 after the date of enactment of this Act, and every 

18 2 years thereafter, as the Administrator determines 

19 necessary to achieve optimum cost-effectiveness and 

20 to maximize incentives to achieve energy efficiency 

21 within the total building award amounts provided in 

22 that paragraph, and shall publish and hold constant 

23 such revised limits for at least 2 years. 

24 (j) REPORT TO CONGRESS.—The Administrator shall 

25 conduct an annual assessment of the achievements of the 


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1 REEP program in each State, shall prepare an annual re2 port of such achievements and any recommendations for 

3 program modifications, and shall provide such report to 

4 Congress at the end of each fiscal year during which fund5 ing or other resources were made available to the States 

6 for the REEP Program. 

7 Subtitle G—Emission Reductions 

8 From Public Transportation Ve9 hicles 

10 SEC. 171. SHORT TITLE. 

11 This subtitle may be cited as the ‘‘Green Taxis Act 

12 of 2009’’. 

13 SEC. 172. STATE FUEL ECONOMY REGULATION FOR TAXI14 CABS. 

15 Section 32919 of title 49, United States Code, is 

16 amended by adding at the end the following new sub17 section: 

18 ‘‘(d) TAXICABS.—Notwithstanding subsection (a), a 

19 State or political subdivision of a State may prescribe re20 quirements for fuel economy for taxicabs and other auto21 mobiles if such requirements are at least as stringent as 

22 applicable Federal requirements and if such taxicabs and 

23 other automobiles— 


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1 ‘‘(1) are automobiles that are capable of trans2 porting not more than 10 individuals, including the 

3 driver; 

4 ‘‘(2) are commercially available or are designed 

5 and manufactured pursuant to a contract with such 

6 State or political subdivision of such State; 

7 ‘‘(3) are operated for hire pursuant to an oper8 ating or regulatory license, permit, or other author9 ization issued by such State or political subdivision 

10 of such State; 

11 ‘‘(4) provide local transportation for a fare de12 termined on the basis of the time or distance trav13 eled or a combination of time and distance traveled; 

14 and 

15 ‘‘(5) do not exclusively provide transportation to 

16 and from airports.’’. 

17 SEC. 173. STATE REGULATION OF MOTOR VEHICLE EMIS18 SIONS FOR TAXICABS. 

19 Section 209 of the Clean Air Act (42 U.S.C. 7543) 

20 is amended by adding at the end the following new sub21 section: 

22 ‘‘(f) TAXICABS.—(1) Notwithstanding subsection (a), 

23 a State or political subdivision thereof may adopt and en24 force standards for the control of emissions from new 

25 motor vehicles that are taxicabs and other vehicles if such 


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1 standards will be, in the aggregate, at least as protective 

2 of public health and welfare as applicable Federal stand3 ards and if such taxicabs and other vehicles— 

4 ‘‘(A) are passenger motor vehicles that are 

5 capable of transporting not more than 10 indi6 viduals, including the driver; 

7 ‘‘(B) are commercially available or are de8 signed and manufactured pursuant to a con9 tract with such State or political subdivision 

10 thereof; 

11 ‘‘(C) are operated for hire pursuant to an 

12 operating or regulatory license, permit, or other 

13 authorization issued by such State or political 

14 subdivision thereof; 

15 ‘‘(D) provide local transportation for a fare 

16 determined on the basis of the time or distance 

17 traveled or a combination of time and distance 

18 traveled; and 

19 ‘‘(E) do not exclusively provide transpor20 tation to and from airports. 

21 ‘‘(2) If each standard of a State or political subdivi22 sion thereof is at least as stringent as the comparable ap23 plicable Federal standard, such standard of such State or 

24 political subdivision thereof shall be deemed at least as 


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1 protective of health and welfare as such Federal standards 

2 for purposes of this subsection.’’. 

3 Subtitle H—Clean Energy and 

4 Natural Gas 

5 SEC. 181. CLEAN ENERGY AND ACCELERATED EMISSION 

6 REDUCTION PROGRAM. 

7 (a) ESTABLISHMENT.— 

8 (1) IN GENERAL.—The Administrator shall es9 tablish a program to promote dispatchable power 

10 generation projects that can accelerate the reduction 

11 of power sector carbon dioxide and other greenhouse 

12 gas emissions. 

13 (2) USE OF FUNDS.—Funds provided under 

14 this section shall be used by the Administrator to 

15 make incentive payments to owners or operators of 

16 eligible projects. 

17 (b) REGULATIONS.—Not later than 90 days after the 

18 date of enactment of this Act, the Administrator shall pro19 mulgate regulations providing for incentives, pursuant to 

20 the requirements of this section. 

21 (c) GOAL.—Not later than 3 years after the date of 

22 enactment of this Act, the Administrator shall provide in23 centives for eligible projects that generate 300,000 

24 gigawatt-hours of electricity per year. 


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1 (d) CRITERIA FOR ELIGIBLE PROJECTS.—To be eli2 gible for funding under this section a project must— 

3 (1) reduce emissions below the 2007 average 

4 greenhouse gas emissions per megawatt-hour of the 

5 United States electric power sector by the quantity 

6 specified in subsection (f); and 

7 (2) not receive an investment or production 

8 credit in— 

9 (A) the year in which the project is placed 

10 in service; or 

11 (B) calendar year 2009, notwithstanding 

12 the year in which the project was placed in 

13 service. 

14 (e) PRIORITY.—The Administrator shall give priority 

15 to eligible projects from the following categories: 

16 (1) Power generation projects designed to inte17 grate intermittent renewable power into the bulk18 power system. 

19 (2) Energy storage projects used to support re20 newable energy. 

21 (3) Power generation projects with carbon cap22 ture and sequestration that are not eligible for other 

23 assistance under this Act. 


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1 (4) Projects that achieve the greatest reduction 

2 in greenhouse gas emissions per dollar of incentive 

3 payment. 

4 (f) EMISSION REDUCTION CRITERIA.—For the pur5 poses of subsection (d), the applicable emission reduction 

6 quantity shall be determined in accordance with the fol7 lowing table: 

Calendar years 

Percentage below 2007 average greenhouse gas emissions per MWh of 

United States electric power sector 

2010 through 2020 .................................................. 25 percent 

2021 through 2025 .................................................. 40 percent 

2026 through 2030 .................................................. 65 percent 

8 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

9 are authorized to be appropriated to the Administrator 

10 such sums as are necessary to carry out this section for 

11 each of fiscal years 2010 through 2030. 

12 SEC. 182. ADVANCED NATURAL GAS TECHNOLOGIES. 

13 (a) DEFINITIONS.—In this section: 

14 (1) CORPORATION.— 

15 (A) IN GENERAL.—The term ‘‘corpora16 tion’’ means any corporation, joint-stock com17 pany, partnership, limited liability company, as18 sociation, business trust, or other organized 

19 group of persons, regardless of incorporation. 

20 (B) EXCLUSION.—The term ‘‘corporation’’ 

21 does not include a municipality. 

22 (2) ELIGIBLE ENTITY.— 


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1 (A) IN GENERAL.—The term ‘‘eligible enti2 ty’’ means an entity that is eligible to receive a 

3 grant under subsection (b). 

4 (B) INCLUSIONS.—The term ‘‘eligible enti5 ty’’ includes a corporation, an eligible research 

6 entity, an industry entity, a municipality, a mu7 nicipal natural gas distribution system, and a 

8 natural gas distribution company. 

9 (3) ELIGIBLE RESEARCH ENTITY.— 

10 (A) IN GENERAL.—The term ‘‘eligible re11 search entity’’ means an entity that is experi12 enced in planning, conducting, and imple13 menting natural gas research, development, 

14 demonstration, and deployment projects. 

15 (B) INCLUSIONS.—The term ‘‘eligible re16 search entity’’ includes a research institution 

17 and an institution of higher education. 

18 (4) INDUSTRY ENTITY.— 

19 (A) IN GENERAL.—The term ‘‘industry en20 tity’’ means the persons and municipalities col21 lectively engaged in the delivery of natural gas 

22 for consumption in the United States (such as 

23 natural gas distribution companies and munic24 ipal natural gas distribution systems). 


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1 (B) EXCLUSION.—The term ‘‘industry en2 tity’’ does not include any natural gas cus3 tomer. 

4 (5) MUNICIPALITY.—The term ‘‘municipality’’ 

5 means a city, county, or other political subdivision or 

6 agency of a State. 

7 (6) MUNICIPAL NATURAL GAS DISTRIBUTION

8 SYSTEM.—The term ‘‘municipal natural gas distribu9 tion system’’ means a municipality engaged in the 

10 business of delivering natural gas for consumption to 

11 residential, commercial, industrial, and other natural 

12 gas customers. 

13 (7) NATURAL GAS.— 

14 (A) IN GENERAL.—The term ‘‘natural 

15 gas’’ means a mixture of hydrocarbon and non16 hydrocarbon gases, primarily methane, that 

17 have been produced from geological formations 

18 or by any other means. 

19 (B) INCLUSION.—The term ‘‘natural gas’’ 

20 includes renewable biogas. 

21 (8) NATURAL GAS DISTRIBUTION COMPANY.— 

22 The term ‘‘natural gas distribution company’’ means 

23 a person engaged in the business of distributing nat24 ural gas for consumption to residential, commercial, 

25 industrial, or other natural gas customers. 


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1 (b) GRANT PROGRAMS.— 

2 (1) NATURAL GAS ELECTRICITY GENERATION

3 GRANTS.—The Administrator, in consultation with 

4 Secretary of Energy, may provide to eligible entities 

5 research and development grants to support the de6 ployment of low greenhouse-gas-emitting end-use 

7 technologies, including carbon capture and seques8 tration technologies, for natural gas electricity gen9 eration. 

10 (2) NATURAL GAS RESIDENTIAL AND COMMER11 CIAL TECHNOLOGY GRANTS.—The Administrator 

12 shall establish a program to provide to eligible enti13 ties grants to advance the commercial demonstration 

14 or early development of low greenhouse-gas-emitting 

15 end-use technologies fueled by natural gas, including 

16 carbon capture and storage, for residential and com17 mercial purposes, through research, development, 

18 demonstration, and deployment of those tech19 nologies. 

20 (c) REPORTING.—Not later than 180 days after the 

21 date of enactment of this Act, and every 180 days there22 after, the Secretary of Energy shall submit to the Com23 mittee on Energy and Commerce of the House of Rep24 resentatives and the Senate Committees on Energy and 

25 Natural Resources and Environment and Public Works of 


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1 the Senate a report that describes the status and results 

2 of activities carried out under subsection (b). 

3 (d) AUTHORIZATION.—There are authorized to be ap4 propriated such sums as are necessary to carry out this 

5 section. 

6 TITLE II—RESEARCH 

7 Subtitle A—Energy Research 

8 SEC. 201. ADVANCED ENERGY RESEARCH. 

9 (a) IN GENERAL.—The Administrator shall establish 

10 a program to provide grants for advanced energy research. 

11 (b) DISTRIBUTION.—The Administrator shall dis12 tribute grants on a competitive basis to institutions of 

13 higher education, companies, research foundations, trade 

14 and industry research collaborations, or consortia of such 

15 entities, or other appropriate research and development 

16 entities. 

17 (c) SELECTION OF PROPOSALS.—In selecting pro18 posals for funding under this section, the Administrator 

19 shall prioritize applications that— 

20 (1) enhance the economic and energy security 

21 of the United States through the development of en22 ergy technologies that result in— 

23 (A) reductions of imports of energy from 

24 foreign sources; 


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1 (B) reductions of energy-related emissions, 

2 including greenhouse gases; and 

3 (C) improvements in the energy efficiency 

4 of all economic sectors; and 

5 (2) ensure that the United States maintains a 

6 technological lead in developing and deploying ad7 vanced energy technologies. 

8 (d) RESPONSIBILITIES.—The Administrator shall be 

9 responsible for assessing the success of programs and ter10 minating programs carried out under this section that are 

11 not achieving the goals of the programs. 

12 (e) ASSISTANCE.—Assistance provided under this 

13 section shall be used to supplement, and not to supplant, 

14 any other Federal resources available to carry out activi15 ties described in this section. 

16 (f) AUTHORIZATION.—There are authorized to be ap17 propriated such sums as are necessary to carry out this 

18 section. 

19 Subtitle B—Drinking Water Adap20 tation, Technology, Education, 

21 and Research 

22 SEC. 211. EFFECTS OF CLIMATE CHANGE ON DRINKING 

23 WATER UTILITIES. 

24 (a) FINDINGS.—Congress finds that— 


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1 (1) the consensus among climate scientists is 

2 overwhelming that climate change is occurring more 

3 rapidly than can be attributed to natural causes, and 

4 that significant impacts to the water supply are al5 ready occurring; 

6 (2) among the first and most critical of those 

7 impacts will be change to patterns of precipitation 

8 around the world, which will affect water availability 

9 for the most basic drinking water and domestic 

10 water needs of populations in many areas of the 

11 United States; 

12 (3) drinking water utilities throughout the 

13 United States, as well as those in Europe, Australia, 

14 and Asia, are concerned that extended changes in 

15 precipitation will lead to extended droughts; 

16 (4) supplying water is highly energy-intensive 

17 and will become more so as climate change forces 

18 more utilities to turn to alternative supplies; 

19 (5) energy production consumes a significant 

20 percentage of the fresh water resources of the 

21 United States; 

22 (6) since 2003, the drinking water industry of 

23 the United States has sponsored, through a non24 profit water research foundation, various studies to 


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1 assess the impacts of climate change on drinking 

2 water supplies; 

3 (7) those studies demonstrate the need for a 

4 comprehensive program of research into the full 

5 range of impacts on drinking water utilities, includ6 ing impacts on water supplies, facilities, and cus7 tomers; 

8 (8) that nonprofit water research foundation is 

9 also coordinating internationally with other drinking 

10 water utilities on shared research projects and has 

11 hosted international workshops with counterpart Eu12 ropean and Asian water research organizations to 

13 develop a unified research agenda for applied re14 search on adaptive strategies to address climate 

15 change impacts; 

16 (9) research data in existence as of the date of 

17 enactment of this Act— 

18 (A) summarize the best available scientific 

19 evidence on climate change; 

20 (B) identify the implications of climate 

21 change for the water cycle and the availability 

22 and quality of water resources; and 

23 (C) provide general guidance on planning 

24 and adaptation strategies for water utilities; 

25 and 


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1 (10) given uncertainties about specific climate 

2 changes in particular areas, drinking water utilities 

3 need to prepare for a wider range of likely possibili4 ties in managing and delivery of water. 

5 (b) IN GENERAL.—The Administrator, in cooperation 

6 with the Secretary of Commerce, the Secretary of Energy, 

7 and the Secretary of the Interior, shall establish and pro8 vide funding for a program of directed and applied re9 search, to be conducted through a nonprofit drinking 

10 water research foundation and sponsored by water utili11 ties, to assist the utilities in adapting to the effects of cli12 mate change. 

13 (c) RESEARCH AREAS.—The research conducted in 

14 accordance with subsection (b) shall include research 

15 into— 

16 (1) water quality impacts and solutions, includ17 ing research— 

18 (A) to address probable impacts on raw 

19 water quality resulting from— 

20 (i) erosion and turbidity from extreme 

21 precipitation events; 

22 (ii) watershed vegetation changes; and 

23 (iii) increasing ranges of pathogens, 

24 algae, and nuisance organisms resulting 

25 from warmer temperatures; and 


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1 (B) on mitigating increasing damage to 

2 watersheds and water quality by evaluating ex3 treme events, such as wildfires and hurricanes, 

4 to learn and develop management approaches to 

5 mitigate— 

6 (i) permanent watershed damage; 

7 (ii) quality and yield impacts on 

8 source waters; and 

9 (iii) increased costs of water treat10 ment; 

11 (2) impacts on groundwater supplies from car12 bon sequestration, including research to evaluate po13 tential water quality consequences of carbon seques14 tration in various regional aquifers, soil conditions, 

15 and mineral deposits; 

16 (3) water quantity impacts and solutions, in17 cluding research— 

18 (A) to evaluate climate change impacts on 

19 water resources throughout hydrological basins 

20 of the United States; 

21 (B) to improve the accuracy and resolution 

22 of climate change models at a regional level; 

23 (C) to identify and explore options for in24 creasing conjunctive use of aboveground and 

25 underground storage of water; and 


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1 (D) to optimize operation of existing and 

2 new reservoirs in diminished and erratic periods 

3 of precipitation and runoff; 

4 (4) infrastructure impacts and solutions for 

5 water treatment and wastewater treatment facilities 

6 and underground pipelines, including research— 

7 (A) to evaluate and mitigate the impacts of 

8 sea level rise on— 

9 (i) near-shore facilities; 

10 (ii) soil drying and subsidence; 

11 (iii) reduced flows in water and waste12 water pipelines; and 

13 (iv) extreme flows in wastewater sys14 tems; and 

15 (B) on ways of increasing the resilience of 

16 existing infrastructure, planning cost-effective 

17 responses to adapt to climate change, and de18 veloping new design standards for future infra19 structure that include the use of energy con20 servation measures and renewable energy in 

21 new construction to the maximum extent prac22 ticable; 

23 (5) desalination, water reuse, and alternative 

24 supply technologies, including research— 


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1 (A) to improve and optimize existing mem2 brane technologies, and to identify and develop 

3 breakthrough technologies, to enable the use of 

4 seawater, brackish groundwater, treated waste5 water, and other impaired sources; 

6 (B) into new sources of water through 

7 more cost-effective water treatment practices in 

8 recycling and desalination; and 

9 (C) to improve technologies for use in— 

10 (i) managing and minimizing the vol11 ume of desalination and reuse concentrate 

12 streams; and 

13 (ii) minimizing the environmental im14 pacts of seawater intake at desalination fa15 cilities; 

16 (6) energy efficiency and greenhouse gas mini17 mization, including research— 

18 (A) on optimizing the energy efficiency of 

19 water supply and wastewater operations and 

20 improving water efficiency in energy production 

21 and management; and 

22 (B) to identify and develop renewable, car23 bon-neutral energy options for the water supply 

24 and wastewater industry; 


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1 (7) regional and hydrological basin cooperative 

2 water management solutions, including research 

3 into— 

4 (A) institutional mechanisms for greater 

5 regional cooperation and use of water ex6 changes, banking, and transfers; and 

7 (B) the economic benefits of sharing risks 

8 of shortage across wider areas; 

9 (8) utility management, decision support sys10 tems, and water management models, including re11 search— 

12 (A) into improved decision support systems 

13 and modeling tools for use by water utility 

14 managers to assist with increased water supply 

15 uncertainty and adaptation strategies posed by 

16 climate change; 

17 (B) to provide financial tools, including 

18 new rate structures, to manage financial re19 sources and investments, because increased con20 servation practices may diminish revenue and 

21 increase investments in infrastructure; and 

22 (C) to develop improved systems and mod23 els for use in evaluating— 


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1 (i) successful alternative methods for 

2 conservation and demand management; 

3 and 

4 (ii) climate change impacts on 

5 groundwater resources; 

6 (9) reducing greenhouse gas emissions and im7 proving energy demand management, including re8 search to improve energy efficiency in water collec9 tion, production, transmission, treatment, distribu10 tion, and disposal to provide more sustainability and 

11 means to assist drinking water utilities in reducing 

12 the production of greenhouse gas emissions in the 

13 collection, production, transmission, treatment, dis14 tribution, and disposal of drinking water; 

15 (10) water conservation and demand manage16 ment, including research— 

17 (A) to develop strategic approaches to 

18 water demand management that offer the low19 est-cost, noninfrastructural options to serve 

20 growing populations or manage declining sup21 plies, primarily through— 

22 (i) efficiencies in water use and re23 allocation of the saved water; 

24 (ii) demand management tools; 

25 (iii) economic incentives; and 


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1 (iv) water-saving technologies; and 

2 (B) into efficiencies in water management 

3 through integrated water resource management 

4 that incorporates— 

5 (i) supply-side and demand-side proc6 esses; 

7 (ii) continuous adaptive management; 

8 and 

9 (iii) the inclusion of stakeholders in 

10 decisionmaking processes; and 

11 (11) communications, education, and public ac12 ceptance, including research— 

13 (A) into improved strategies and ap14 proaches for communicating with customers, de15 cisionmakers, and other stakeholders about the 

16 implications of climate change on water supply 

17 and water management; 

18 (B) to develop effective communication ap19 proaches— 

20 (i) to gain public acceptance of alter21 native water supplies and new policies and 

22 practices, including conservation and de23 mand management; and 

24 (ii) to gain public recognition and ac25 ceptance of increased costs; and 


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1 (C) to create and maintain a clearinghouse 

2 of climate change information for water utili3 ties, academic researchers, stakeholders, gov4 ernment agencies, and research organizations. 

5 (d) AUTHORIZATION OF APPROPRIATIONS.—There is 

6 authorized to be appropriated to carry out this section 

7 $25,000,000 for each of fiscal years 2010 through 2020. 

8 TITLE III—TRANSITION AND 

9 ADAPTATION 

10 Subtitle A—Green Jobs and Worker 

11 Transition 

12 PART 1—GREEN JOBS 

13 SEC. 301. CLEAN ENERGY CURRICULUM DEVELOPMENT 

14 GRANTS. 

15 (a) AUTHORIZATION.—The Secretary of Education is 

16 authorized to award grants, on a competitive basis, to eli17 gible partnerships to develop programs of study (con18 taining the information described in section 122(c)(1)(A) 

19 of the Carl D. Perkins Career and Technical Education 

20 Act of 2006 (20 U.S.C. 2342)), that are focused on emerg21 ing careers and jobs in the fields of clean energy, renew22 able energy, energy efficiency, climate change mitigation, 

23 and climate change adaptation. The Secretary of Edu24 cation shall consult with the Secretary of Labor and the 


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1 Secretary of Energy prior to the issuance of a solicitation 

2 for grant applications. 

3 (b) ELIGIBLE PARTNERSHIPS.—For purposes of this 

4 section, an eligible partnership shall include— 

5 (1) at least 1 local educational agency eligible 

6 for funding under section 131 of the Carl D. Per7 kins Career and Technical Education Act of 2006 

8 (20 U.S.C. 2351) or an area career and technical 

9 education school or education service agency de10 scribed in such section; 

11 (2) at least 1 postsecondary institution eligible 

12 for funding under section 132 of such Act (20 

13 U.S.C. 2352); and 

14 (3) representatives of the community including 

15 business, labor organizations, and industry that have 

16 experience in fields as described in subsection (a). 

17 (c) APPLICATION.—An eligible partnership seeking a 

18 grant under this section shall submit an application to the 

19 Secretary at such time and in such manner as the Sec20 retary may require. Applications shall include— 

21 (1) a description of the eligible partners and 

22 partnership, the roles and responsibilities of each 

23 partner, and a demonstration of each partner’s ca24 pacity to support the program; 


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1 (2) a description of the career area or areas 

2 within the fields as described in subsection (a) to be 

3 developed, the reason for the choice, and evidence of 

4 the labor market need to prepare students in that 

5 area; 

6 (3) a description of the new or existing program 

7 of study and both secondary and postsecondary com8 ponents; 

9 (4) a description of the students to be served by 

10 the new program of study; 

11 (5) a description of how the program of study 

12 funded by the grant will be replicable and dissemi13 nated to schools outside of the partnership, including 

14 urban and rural areas; 

15 (6) a description of applied learning that will be 

16 incorporated into the program of study and how it 

17 will incorporate or reinforce academic learning; 

18 (7) a description of how the program of study 

19 will be delivered; 

20 (8) a description of how the program will pro21 vide accessibility to students, especially economically 

22 disadvantaged, low performing, and urban and rural 

23 students; 

24 (9) a description of how the program will ad25 dress placement of students in nontraditional fields 


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1 as described in section 3(20) of the Carl D. Perkins 

2 Career and Technical Education Act of 2006 (20 

3 U.S.C. 2302(20)); and 

4 (10) a description of how the applicant proposes 

5 to consult or has consulted with a labor organiza6 tion, labor management partnership, apprenticeship 

7 program, or joint apprenticeship and training pro8 gram that provides education and training in the 

9 field of study for which the applicant proposes to de10 velop a curriculum. 

11 (d) PRIORITY.—The Secretary shall give priority to 

12 applications that— 

13 (1) use online learning or other innovative 

14 means to deliver the program of study to students, 

15 educators, and instructors outside of the partner16 ship; and 

17 (2) focus on low performing students and spe18 cial populations as defined in section 3(29) of the 

19 Carl D. Perkins Career and Technical Education 

20 Act of 2006 (20 U.S.C. 2302(29)). 

21 (e) PEER REVIEW.—The Secretary shall convene a 

22 peer review process to review applications for grants under 

23 this section and to make recommendations regarding the 

24 selection of grantees. Members of the peer review com25 mittee shall include— 


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1 (1) educators who have experience imple2 menting curricula with comparable purposes; and 

3 (2) business and industry experts in fields as 

4 described in subsection (a). 

5 (f) USES OF FUNDS.—Grants awarded under this 

6 section shall be used for the development, implementation, 

7 and dissemination of programs of study (as described in 

8 section 122(c)(1)(A) of the Carl D. Perkins Career and 

9 Technical Education Act (20 U.S.C. 2342(c)(1)(A))) in 

10 career areas related to clean energy, renewable energy, en11 ergy efficiency, climate change mitigation, and climate 

12 change adaptation. 

13 SEC. 302. DEVELOPMENT OF INFORMATION AND RE14 SOURCES CLEARINGHOUSE FOR VOCA15 TIONAL EDUCATION AND JOB TRAINING IN 

16 RENEWABLE ENERGY SECTORS. 

17 (a) DEVELOPMENT OF CLEARINGHOUSE.—Not later 

18 than 18 months after the date of enactment of this Act, 

19 the Secretary of Labor, in collaboration with the Secretary 

20 of Energy and the Secretary of Education, shall develop 

21 an internet based information and resources clearinghouse 

22 to aid career and technical education and job training pro23 grams for the renewable energy sectors. In establishing 

24 the clearinghouse, the Secretary shall— 


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1 (1) collect and provide information that ad2 dresses the consequences of rapid changes in tech3 nology and regional disparities for renewable energy 

4 training programs and provides best practices for 

5 training and education in light of such changes and 

6 disparities; 

7 (2) place an emphasis on facilitating collabora8 tion between the renewable energy industry and job 

9 training programs and on identifying industry and 

10 technological trends and best practices, to better 

11 help job training programs maintain quality and rel12 evance; and 

13 (3) place an emphasis on assisting programs 

14 that cater to high-demand middle-skill, trades, man15 ufacturing, contracting, and consulting careers. 

16 (b) SOLICITATION AND CONSULTATION.—In devel17 oping the clearinghouse pursuant to subsection (a), the 

18 Secretary shall solicit information and expertise from busi19 nesses and organizations in the renewable energy sector 

20 and from institutions of higher education, career and tech21 nical schools, and community colleges that provide train22 ing in the renewable energy sectors. The Secretary shall 

23 solicit a comprehensive peer review of the clearinghouse 

24 by such entities not less than once every 2 years. Nothing 


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1 in this subsection should be interpreted to require the di2 vulgence of proprietary or competitive information. 

3 (c) CONTENTS OF CLEARINGHOUSE.— 

4 (1) SEPARATE SECTION FOR EACH RENEWABLE

5 ENERGY SECTOR.—The clearinghouse shall contain 

6 separate sections developed for each of the following 

7 renewable energy sectors: 

8 (A) Solar energy systems. 

9 (B) Wind energy systems. 

10 (C) Energy transmission systems. 

11 (D) Geothermal systems of energy and 

12 heating. 

13 (E) Energy efficiency technical training. 

14 (2) ADDITIONAL REQUIREMENTS.—In addition 

15 to the information required in subsection (a), each 

16 section of the clearinghouse shall include information 

17 on basic environmental science and processes needed 

18 to understand renewable energy systems, Federal 

19 government and industry resources, and points of 

20 contact to aid institutions in the development of 

21 placement programs for apprenticeships and post 

22 graduation opportunities, and information and tips 

23 about a green workplace, energy efficiency, and rel24 evant environmental topics and information on avail25 able industry recognized certifications in each area. 


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1 (d) DISSEMINATION.—The clearinghouse shall be 

2 made available via the Internet to the general public. No3 tice of the completed clearinghouse and any major revi4 sions thereto shall also be provided— 

5 (1) to each Member of Congress; and 

6 (2) on the websites of the Departments of Edu7 cation, Energy, and Labor. 

8 (e) REVISION.—The Secretary of Labor shall revise 

9 and update the clearinghouse on a regular basis to ensure 

10 its relevance. 

11 SEC. 303. GREEN CONSTRUCTION CAREERS DEMONSTRA12 TION PROJECT. 

13 (a) ESTABLISHMENT AND AUTHORITY.—The Sec14 retary of Labor, in consultation with the Secretary of En15 ergy, shall, not later than 180 days after the enactment 

16 of this Act, establish a Green Construction Careers dem17 onstration project by rules, regulations, and guidance in 

18 accordance with the provisions of this section. The purpose 

19 of the demonstration project shall be to promote middle 

20 class careers and quality employment practices in the 

21 green construction sector among targeted workers and to 

22 advance efficiency and performance on construction 

23 projects related to this Act. In order to advance these pur24 poses, the Secretary shall identify projects, including resi25 dential retrofitting projects, funded directly by or assisted 


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1 in whole or in part by or through the Federal Government 

2 pursuant to this Act or by any other entity established 

3 in accordance with this Act, to which all of the following 

4 shall apply. 

5 (b) REQUIREMENTS.—The Secretaries may establish 

6 such terms and conditions for the demonstration projects 

7 as the Secretaries determine are necessary to meet the 

8 purposes of subsection (a), including establishing min9 imum proportions of hours to be worked by targeted work10 ers on such projects. The Secretaries may require the con11 tractors and subcontractors performing construction serv12 ices on the project to comply with the terms and conditions 

13 as a condition of receiving funding or assistance from the 

14 Federal Government under this Act. 

15 (c) EVALUATION.—The Secretaries shall evaluate the 

16 demonstration projects against the purposes of this section 

17 at the end of 3 years from initiation of the demonstration 

18 project. If the Secretaries determine that the demonstra19 tion projects have been successful, the Secretaries may 

20 identify further projects to which of the provisions of this 

21 section shall apply. 

22 (d) GAO REPORT.—The Comptroller General shall 

23 prepare and submit a report to the Committee on Health, 

24 Education, Labor, and Pensions and the Committee on 

25 Energy and Natural Resources of the Senate and the 


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1 Committee on Education and Labor and the Committee 

2 on Energy and Commerce of the House of Representatives 

3 not later than 5 years after the date of enactment of this 

4 Act, which shall advise the committees of the results of 

5 the demonstration projects and make appropriate rec6 ommendations. 

7 (e) DEFINITION AND DESIGNATION OF TARGETED

8 WORKERS.—As used in this section, the term ‘‘targeted 

9 worker’’ means an individual who resides in the same 

10 labor market area (as defined in section 101(18) of the 

11 Workforce Investment Act of 1998 (29 U.S.C. 2801(18))) 

12 as the project and who— 

13 (1) is a member of a targeted group, within the 

14 meaning of section 51 of the Internal Revenue Code 

15 of 1986, other than an individual described in sub16 section (d)(1)(C) of such section; 

17 (2)(A) resides in a census tract in which not 

18 less than 20 percent of the households have incomes 

19 below the Federal poverty guidelines; or 

20 (B) is a member of a family that received a 

21 total family income that, during the 2-year period 

22 prior to employment on the project or admission to 

23 the pre-apprenticeship program, did not exceed 200 

24 percent of the Federal poverty guidelines (exclusive 

25 of unemployment compensation, child support payVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00226 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 ments, payments described in section 101(25)(A) of 

2 the Workforce Investment Act (29 U.S.C. 

3 2801(25)(A)), and old-age and survivors insurance 

4 benefits received under section 202 of the Social Se5 curity Act (42 U.S.C. 402); or 

6 (3) is a displaced homemaker, as such term is 

7 defined in section 3(10) of the Carl D. Perkins Ca8 reer and Technical Education Act of 2006 (20 

9 U.S.C. 2302(10)). 

10 (f) QUALIFIED PRE-APPRENTICESHIP PROGRAM.—A 

11 qualified pre-apprenticeship program is a pre-apprentice12 ship program that has demonstrated an ability to recruit, 

13 train, and prepare for admission to apprenticeship pro14 grams individuals who are targeted workers. 

15 (g) QUALIFIED APPRENTICESHIP AND OTHER

16 TRAINING PROGRAMS.— 

17 (1) PARTICIPATION BY EACH CONTRACTOR RE18 QUIRED.—Each contractor and subcontractor that 

19 seeks to provide construction services on projects 

20 identified by the Secretaries pursuant to subsection 

21 (a) shall submit adequate assurances with its bid or 

22 proposal that it participates in a qualified appren23 ticeship or other training program, with a written 

24 arrangement with a qualified pre-apprenticeship pro25 gram, for each craft or trade classification of worker 


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1 that it intends to employ to perform work on the 

2 project. 

3 (2) DEFINITION OF QUALIFIED APPRENTICE

4 SHIP OR OTHER TRAINING PROGRAM.— 

5 (A) IN GENERAL.—For purposes of this 

6 section, the term ‘‘qualified apprenticeship or 

7 other training program’’ means an apprentice8 ship or other training program that qualifies as 

9 an employee welfare benefit plan, as defined in 

10 section 3(1) of the Employee Retirement In11 come Security Act of 1974 (29 U.S.C. 

12 1002(1)). 

13 (B) CERTIFICATION OF OTHER PROGRAMS

14 IN CERTAIN LOCALITIES.—In the event that the 

15 Secretary of Labor certifies that a qualified ap16 prenticeship or other training program (as de17 fined in subparagraph (A)) for a craft or trade 

18 classification of workers that a prospective con19 tractor or subcontractor intends to employ, is 

20 not operated in the locality where the project 

21 will be performed, an apprenticeship or other 

22 training program that is not an employee wel23 fare benefit plan (as defined in such section) 

24 may be certified by the Secretary as a qualified 

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1 vided it is registered with the Office of Appren2 ticeship of the Department of Labor, or a State 

3 apprenticeship agency recognized by the Office 

4 of Apprenticeship for Federal purposes. 

5 (h) FACILITATING COMPLIANCE.—The Secretary 

6 may require Federal contracting agencies, recipients of 

7 Federal assistance, and any other entity established in ac8 cordance with this Act to require contractors to enter into 

9 an agreement in a manner comparable with the standards 

10 set forth in sections 3 and 4 of Executive Order 13502 

11 in order to achieve the purposes of this section, including 

12 any requirements established by subsection (b). 

13 (i) LIMITATION.—The requirements of this section 

14 shall not apply to any project funded under this Act in 

15 American Samoa, Guam, the Commonwealth of the North16 ern Mariana Islands, the Commonwealth of Puerto Rico, 

17 or the United States Virgin Islands, unless participation 

18 is requested by the governor of such territories within 1 

19 year of the promulgation of rules under this Act. 

20 PART 2—CLIMATE CHANGE WORKER 

21 ADJUSTMENT ASSISTANCE 

22 SEC. 311. PETITIONS, ELIGIBILITY REQUIREMENTS, AND 

23 DETERMINATIONS. 

24 (a) PETITIONS.— 


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1 (1) FILING.—A petition for certification of eli2 gibility to apply for adjustment assistance for a 

3 group of workers under this part may be filed by 

4 any of the following: 

5 (A) The group of workers. 

6 (B) The certified or recognized union or 

7 other duly authorized representative of such 

8 workers. 

9 (C) Employers of such workers, one-stop 

10 operators or one-stop partners (as defined in 

11 section 101 of the Workforce Investment Act of 

12 1998 (29 U.S.C. 2801)), including State em13 ployment security agencies, or the State dis14 located worker unit established under title I of 

15 such Act, on behalf of such workers. 

16 The petition shall be filed simultaneously with the 

17 Secretary of Labor and with the Governor of the 

18 State in which such workers’ employment site is lo19 cated. 

20 (2) ACTION BY GOVERNORS.—Upon receipt of a 

21 petition filed under paragraph (1), the Governor 

22 shall— 

23 (A) ensure that rapid response activities 

24 and appropriate core and intensive services (as 

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1 vestment Act of 1998 (29 U.S.C. 2864)) au2 thorized under other Federal laws are made 

3 available to the workers covered by the petition 

4 to the extent authorized under such laws; and 

5 (B) assist the Secretary in the review of 

6 the petition by verifying such information and 

7 providing such other assistance as the Secretary 

8 may request. 

9 (3) ACTION BY THE SECRETARY.—Upon receipt 

10 of the petition, the Secretary shall promptly publish 

11 notice in the Federal Register and on the website of 

12 the Department of Labor that the Secretary has re13 ceived the petition and initiated an investigation. 

14 (4) HEARINGS.—If the petitioner, or any other 

15 person found by the Secretary to have a substantial 

16 interest in the proceedings, submits not later than 

17 10 days after the date of the Secretary’s publication 

18 under paragraph (3) a request for a hearing, the 

19 Secretary shall provide for a public hearing and af20 ford such interested persons an opportunity to be 

21 present, to produce evidence, and to be heard. 

22 (b) ELIGIBILITY.— 

23 (1) IN GENERAL.—A group of workers shall be 

24 certified by the Secretary as eligible to apply for adVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00231 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 justment assistance under this part pursuant to a 

2 petition filed under subsection (a) if— 

3 (A) the group of workers is employed in— 

4 (i) energy producing and transforming 

5 industries; 

6 (ii) industries dependent upon energy 

7 industries; 

8 (iii) energy-intensive manufacturing 

9 industries; 

10 (iv) consumer goods manufacturing; 

11 or 

12 (v) other industries whose employment 

13 the Secretary determines has been ad14 versely affected by any requirement of title 

15 VII of the Clean Air Act; 

16 (B) the Secretary determines that a sig17 nificant number or proportion of the workers in 

18 such workers’ employment site have become to19 tally or partially separated, or are threatened to 

20 become totally or partially separated from em21 ployment; and 

22 (C) the sales, production, or delivery of 

23 goods or services have decreased as a result of 

24 any requirement of title VII of the Clean Air 

25 Act, including— 


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1 (i) the shift from reliance upon fossil 

2 fuels to other sources of energy, including 

3 renewable energy, that results in the clos4 ing of a facility or layoff of employees at 

5 a facility that mines, produces, processes, 

6 or utilizes fossil fuels to generate elec7 tricity; 

8 (ii) a substantial increase in the cost 

9 of energy required for a manufacturing fa10 cility to produce items whose prices are 

11 competitive in the marketplace, to the ex12 tent the cost is not offset by assistance 

13 provided to the facility pursuant to title 

14 VII of the Clean Air Act; or 

15 (iii) other documented occurrences 

16 that the Secretary determines are indica17 tors of an adverse impact on an industry 

18 described in subparagraph (A) as a result 

19 of any requirement of title VII of the 

20 Clean Air Act. 

21 (2) WORKERS IN PUBLIC AGENCIES.—A group 

22 of workers in a public agency shall be certified by 

23 the Secretary as eligible to apply for climate change 

24 adjustment assistance pursuant to a petition filed if 

25 the Secretary determines that a significant number 


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1 or proportion of the workers in the public agency 

2 have become totally or partially separated from em3 ployment, or are threatened to become totally or 

4 partially separated as a result of any requirement of 

5 title VII of the Clean Air Act. 

6 (3) ADVERSELY AFFECTED SERVICE WORK7 ERS.—A group of workers shall be certified as eligi8 ble to apply for climate change adjustment assist9 ance pursuant to a petition filed if the Secretary de10 termines that— 

11 (A) a significant number or proportion of 

12 the service workers at an employment site 

13 where a group of workers has been certified by 

14 the Secretary as eligible to apply for adjustment 

15 assistance under this part pursuant to para16 graph (1) have become totally or partially sepa17 rated from employment, or are threatened to 

18 become totally or partially separated; and 

19 (B) a loss of business in the firm providing 

20 service workers to an employment site is di21 rectly attributable to one or more of the docu22 mented occurrences listed in paragraph (1)(C). 

23 (c) AUTHORITY TO INVESTIGATE AND COLLECT IN24 FORMATION.— 


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1 (1) IN GENERAL.—The Secretary shall, in de2 termining whether to certify a group of workers 

3 under subsection (d), obtain information the Sec4 retary determines to be necessary to make the cer5 tification, through questionnaires and in such other 

6 manner as the Secretary determines appropriate 

7 from— 

8 (A) the workers’ employer; 

9 (B) officials of certified or recognized 

10 unions or other duly authorized representatives 

11 of the group of workers; or 

12 (C) one-stop operators or one-stop partners 

13 (as defined in section 101 of the Workforce In14 vestment Act of 1998 (29 U.S.C. 2801)). 

15 (2) VERIFICATION OF INFORMATION.—The Sec16 retary shall require an employer, union, or one-stop 

17 operator or partner to certify all information ob18 tained under paragraph (1) from the employer, 

19 union, or one-stop operator or partner (as the case 

20 may be) on which the Secretary relies in making a 

21 determination under subsection (d), unless the Sec22 retary has a reasonable basis for determining that 

23 such information is accurate and complete without 

24 being certified. 


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1 (3) PROTECTION OF CONFIDENTIAL INFORMA2 TION.—The Secretary may not release information 

3 obtained under paragraph (1) that the Secretary 

4 considers to be confidential business information un5 less the employer submitting the confidential busi6 ness information had notice, at the time of submis7 sion, that the information would be released by the 

8 Secretary, or the employer subsequently consents to 

9 the release of the information. Nothing in this para10 graph shall be construed to prohibit the Secretary 

11 from providing such confidential business informa12 tion to a court in camera or to another party under 

13 a protective order issued by a court. 

14 (d) DETERMINATION BY THE SECRETARY OF

15 LABOR.— 

16 (1) IN GENERAL.—As soon as possible after the 

17 date on which a petition is filed under subsection 

18 (a), but in any event not later than 40 days after 

19 that date, the Secretary, in consultation with the 

20 Secretary of Energy and the Administrator, as nec21 essary, shall determine whether the petitioning 

22 group meets the requirements of subsection (b) and 

23 shall issue a certification of eligibility to apply for 

24 assistance under this part covering workers in any 

25 group which meets such requirements. Each certifiVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00236 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 cation shall specify the date on which the total or 

2 partial separation began or threatened to begin. 

3 Upon reaching a determination on a petition, the 

4 Secretary shall promptly publish a summary of the 

5 determination in the Federal Register and on the 

6 website of the Department of Labor, together with 

7 the Secretary’s reasons for making such determina8 tion. 

9 (2) ONE-YEAR LIMITATION.—A certification 

10 under this section shall not apply to any worker 

11 whose last total or partial separation from the em12 ployment site before the worker’s application under 

13 section 312(a) occurred more than 1 year before the 

14 date of the petition on which such certification was 

15 granted. 

16 (3) REVOCATION OF CERTIFICATION.—When17 ever the Secretary determines, with respect to any 

18 certification of eligibility of the workers of an em19 ployment site, that total or partial separations from 

20 such site are no longer a result of the factors speci21 fied in subsection (b)(1), the Secretary shall termi22 nate such certification and promptly have notice of 

23 such termination published in the Federal Register 

24 and on the website of the Department of Labor, to25 gether with the Secretary’s reasons for making such 


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1 determination. Such termination shall apply only 

2 with respect to total or partial separations occurring 

3 after the termination date specified by the Secretary. 

4 (e) INDUSTRY NOTIFICATION OF ASSISTANCE.— 

5 Upon receiving a notification of a determination under 

6 subsection (d) with respect to a domestic industry the Sec7 retary of Labor shall notify the representatives of the do8 mestic industry affected by the determination, employers 

9 publicly identified by name during the course of the pro10 ceeding relating to the determination, and any certified 

11 or recognized union or, to the extent practicable, other 

12 duly authorized representative of workers employed by 

13 such representatives of the domestic industry, of— 

14 (1) the adjustment assistance, training, and 

15 other benefits available under this part; 

16 (2) the manner in which to file a petition and 

17 apply for such benefits; 

18 (3) the availability of assistance in filing such 

19 petitions; 

20 (4) notify the Governor of each State in which 

21 one or more employers in such industry are located 

22 of the Secretary’s determination and the identity of 

23 the employers; and 

24 (5) upon request, provide any assistance that is 

25 necessary to file a petition under subsection (a). 


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1 (f) BENEFIT INFORMATION TO WORKERS, PRO2 VIDERS OF TRAINING.— 

3 (1) IN GENERAL.—The Secretary shall provide 

4 full information to workers about the adjustment as5 sistance, training, and other benefits available under 

6 this part and about the petition and application pro7 cedures, and the appropriate filing dates, for such 

8 assistance, training and services. The Secretary shall 

9 provide whatever assistance is necessary to enable 

10 groups of workers to prepare petitions or applica11 tions for program benefits. The Secretary shall make 

12 every effort to insure that cooperating State agen13 cies fully comply with the agreements entered into 

14 under section 312(a) and shall periodically review 

15 such compliance. The Secretary shall inform the 

16 State Board for Vocational Education or equivalent 

17 agency, the one-stop operators or one-stop partners 

18 (as defined in section 101 of the Workforce Invest19 ment Act of 1998 (29 U.S.C. 2801)), and other pub20 lic or private agencies, institutions, and employers, 

21 as appropriate, of each certification issued under 

22 subsection (d) and of projections, if available, of the 

23 needs for training under as a result of such certifi24 cation. 


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1 (2) NOTICE BY MAIL.—The Secretary shall pro2 vide written notice through the mail of the benefits 

3 available under this part to each worker whom the 

4 Secretary has reason to believe is covered by a cer5 tification made under subsection (d)— 

6 (A) at the time such certification is made, 

7 if the worker was partially or totally separated 

8 from the adversely affected employment before 

9 such certification; or 

10 (B) at the time of the total or partial sepa11 ration of the worker from the adversely affected 

12 employment, if subparagraph (A) does not 

13 apply. 

14 (3) NEWSPAPERS; WEBSITE.—The Secretary 

15 shall publish notice of the benefits available under 

16 this part to workers covered by each certification 

17 made under subsection (d) in newspapers of general 

18 circulation in the areas in which such workers reside 

19 and shall make such information available on the 

20 website of the Department of Labor. 

21 SEC. 312. PROGRAM BENEFITS. 

22 (a) CLIMATE CHANGE ADJUSTMENT ASSISTANCE.— 

23 (1) ELIGIBILITY.—Payment of climate change 

24 adjustment assistance shall be made to an adversely 

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1 tion 311(b) who files an application for such assist2 ance for any week of unemployment which begins on 

3 or after the date of such certification, if the fol4 lowing conditions are met: 

5 (A) Such worker’s total or partial separa6 tion before the worker’s application under this 

7 part occurred— 

8 (i) on or after the date, as specified in 

9 the certification under which the worker is 

10 covered, on which total or partial separa11 tion began or threatened to begin in the 

12 adversely affected employment; 

13 (ii) before the expiration of the 2-year 

14 period beginning on the date on which the 

15 determination under section 311(d) was 

16 made; and 

17 (iii) before the termination date, if 

18 any, determined pursuant to section 

19 311(d)(3). 

20 (B) Such worker had, in the 52-week pe21 riod ending with the week in which such total 

22 or partial separation occurred, at least 26 

23 weeks of full-time employment or 1,040 hours 

24 of part time employment in adversely affected 

25 employment, or, if data with respect to weeks of 


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1 employment are not available, equivalent 

2 amounts of employment computed under regu3 lations prescribed by the Secretary. For the 

4 purposes of this paragraph, any week in which 

5 such worker— 

6 (i) is on employer-authorized leave for 

7 purposes of vacation, sickness, injury, ma8 ternity, or inactive duty or active duty 

9 military service for training; 

10 (ii) does not work because of a dis11 ability that is compensable under a work12 men’s compensation law or plan of a State 

13 or the United States; 

14 (iii) had his employment interrupted 

15 in order to serve as a full-time representa16 tive of a labor organization in such firm; or 

17 (iv) is on call-up for purposes of active 

18 duty in a reserve status in the Armed 

19 Forces of the United States, provided such 

20 active duty is ‘‘Federal service’’ as defined 

21 in section 8521(a)(1) of title 5, United 

22 States Code, 

23 shall be treated as a week of employment. 


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1 (C) Such worker is enrolled in a training 

2 program approved by the Secretary under sub3 section (b)(2). 

4 (2) INELIGIBILITY FOR CERTAIN OTHER BENE5 FITS.—An adversely affected worker receiving a pay6 ment under this section shall be ineligible to receive 

7 any other form of unemployment insurance for the 

8 period in which such worker is receiving climate 

9 change adjustment assistance under this section. 

10 (3) REVOCATION.—If— 

11 (A) the Secretary determines that— 

12 (i) the adversely affected worker— 

13 (I) has failed to begin participa14 tion in the training program the en15 rollment in which meets the require16 ment of paragraph (1)(C); or 

17 (II) has ceased to participate in 

18 such training program before com19 pleting such training program; and 

20 (ii) there is no justifiable cause for 

21 such failure or cessation; or 

22 (B) the certification made with respect to 

23 such worker under section 311(d) is revoked 

24 under paragraph (3) of such section, 


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1 no adjustment assistance may be paid to the ad2 versely affected worker under this part for the week 

3 in which such failure, cessation, or revocation oc4 curred, or any succeeding week, until the adversely 

5 affected worker begins or resumes participation in a 

6 training program approved by the Secretary under 

7 subsection (b)(2). 

8 (4) WAIVERS OF TRAINING REQUIREMENTS.— 

9 The Secretary may issue a written statement to an 

10 adversely affected worker waiving the requirement to 

11 be enrolled in training described in subsection (b)(2) 

12 if the Secretary determines that it is not feasible or 

13 appropriate for the worker, because of 1 or more of 

14 the following reasons: 

15 (A) RECALL.—The worker has been noti16 fied that the worker will be recalled by the em17 ployer from which the separation occurred. 

18 (B) MARKETABLE SKILLS.— 

19 (i) IN GENERAL.—The worker pos20 sesses marketable skills for suitable em21 ployment (as determined pursuant to an 

22 assessment of the worker, which may in23 clude the profiling system under section 

24 303(j) of the Social Security Act (42 

25 U.S.C. 503(j)), carried out in accordance 


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1 with guidelines issued by the Secretary) 

2 and there is a reasonable expectation of 

3 employment at equivalent wages in the 

4 foreseeable future. 

5 (ii) MARKETABLE SKILLS DEFINED.— 

6 For purposes of clause (i), the term ‘‘mar7 ketable skills’’ may include the possession 

8 of a postgraduate degree from an institu9 tion of higher education (as defined in sec10 tion 102 of the Higher Education Act of 

11 1965 (20 U.S.C. 1002)) or an equivalent 

12 institution, or the possession of an equiva13 lent postgraduate certification in a special14 ized field. 

15 (C) RETIREMENT.—The worker is within 2 

16 years of meeting all requirements for entitle17 ment to either— 

18 (i) old-age insurance benefits under 

19 title II of the Social Security Act (42 

20 U.S.C. 401 et seq.) (except for application 

21 therefor); or 

22 (ii) a private pension sponsored by an 

23 employer or labor organization. 

24 (D) HEALTH.—The worker is unable to 

25 participate in training due to the health of the 


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1 worker, except that a waiver under this sub2 paragraph shall not be construed to exempt a 

3 worker from requirements relating to the avail4 ability for work, active search for work, or re5 fusal to accept work under Federal or State un6 employment compensation laws. 

7 (E) ENROLLMENT UNAVAILABLE.—The 

8 first available enrollment date for the training 

9 of the worker is within 60 days after the date 

10 of the determination made under this para11 graph, or, if later, there are extenuating cir12 cumstances for the delay in enrollment, as de13 termined pursuant to guidelines issued by the 

14 Secretary. 

15 (F) TRAINING NOT AVAILABLE.—Training 

16 described in subsection (b)(2) is not reasonably 

17 available to the worker from either govern18 mental agencies or private sources (which may 

19 include area career and technical education 

20 schools, as defined in section 3 of the Carl D. 

21 Perkins Career and Technical Education Act of 

22 2006 (20 U.S.C. 2302), and employers), no 

23 training that is suitable for the worker is avail24 able at a reasonable cost, or no training funds 

25 are available. 


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1 (5) WEEKLY AMOUNTS.—The climate change 

2 adjustment assistance payable to an adversely af3 fected worker for a week of unemployment shall be 

4 an amount equal to 70 percent of the average weekly 

5 wage of such worker, but in no case shall such 

6 amount exceed the average weekly wage for all work7 ers in the State where the adversely affected worker 

8 resides. 

9 (6) MAXIMUM DURATION OF BENEFITS.—An el10 igible worker may receive a climate change adjust11 ment assistance under this subsection for a period of 

12 not longer than 156 weeks. 

13 (b) EMPLOYMENT SERVICES AND TRAINING.— 

14 (1) INFORMATION AND EMPLOYMENT SERV15 ICES.—The Secretary shall make available, directly 

16 or through agreements with the States under section 

17 313(a) to adversely affected workers covered by a 

18 certification under section 311(a) the following in19 formation and employment services: 

20 (A) Comprehensive and specialized assess21 ment of skill levels and service needs, including 

22 through— 

23 (i) diagnostic testing and use of other 

24 assessment tools; and 


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1 (ii) in-depth interviewing and evalua2 tion to identify employment barriers and 

3 appropriate employment goals. 

4 (B) Development of an individual employ5 ment plan to identify employment goals and ob6 jectives, and appropriate training to achieve 

7 those goals and objectives. 

8 (C) Information on training available in 

9 local and regional areas, information on indi10 vidual counseling to determine which training is 

11 suitable training, and information on how to 

12 apply for such training. 

13 (D) Information on training programs and 

14 other services provided by a State pursuant to 

15 title I of the Workforce Investment Act of 1998 

16 (29 U.S.C. 2801 et seq.) and available in local 

17 and regional areas, information on individual 

18 counseling to determine which training is suit19 able training, and information on how to apply 

20 for such training. 

21 (E) Information on how to apply for finan22 cial aid, including referring workers to edu23 cational opportunity centers described in section 

24 402F of the Higher Education Act of 1965 (20 

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1 fying workers that the workers may request fi2 nancial aid administrators at institutions of 

3 higher education (as defined in section 102 of 

4 such Act (20 U.S.C. 1002)) to use the adminis5 trators’ discretion under section 479A of such 

6 Act (20 U.S.C. 1087tt) to use current year in7 come data, rather than preceding year income 

8 data, for determining the amount of need of the 

9 workers for Federal financial assistance under 

10 title IV of such Act (20 U.S.C. 1070 et seq.). 

11 (F) Short-term prevocational services, in12 cluding development of learning skills, commu13 nications skills, interviewing skills, punctuality, 

14 personal maintenance skills, and professional 

15 conduct to prepare individuals for employment 

16 or training. 

17 (G) Individual career counseling, including 

18 job search and placement counseling, during the 

19 period in which the individual is receiving cli20 mate change adjustment assistance or training 

21 under this part, and after receiving such train22 ing for purposes of job placement. 

23 (H) Provision of employment statistics in24 formation, including the provision of accurate 


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1 information relating to local, regional, and na2 tional labor market areas, including— 

3 (i) job vacancy listings in such labor 

4 market areas; 

5 (ii) information on jobs skills nec6 essary to obtain jobs identified in job va7 cancy listings described in subparagraph 

8 (A); 

9 (iii) information relating to local occu10 pations that are in demand and earnings 

11 potential of such occupations; and 

12 (iv) skills requirements for local occu13 pations described in subparagraph (C). 

14 (I) Information relating to the availability 

15 of supportive services, including services relat16 ing to child care, transportation, dependent 

17 care, housing assistance, and need-related pay18 ments that are necessary to enable an indi19 vidual to participate in training. 

20 (2) TRAINING.— 

21 (A) APPROVAL OF AND PAYMENT FOR

22 TRAINING.—If the Secretary determines, with 

23 respect to an adversely affected worker that— 

24 (i) there is no suitable employment 

25 (which may include technical and profesVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00250 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 sional employment) available for an ad2 versely affected worker; 

3 (ii) the worker would benefit from ap4 propriate training; 

5 (iii) there is a reasonable expectation 

6 of employment following completion of 

7 such training; 

8 (iv) training approved by the Sec9 retary is reasonably available to the worker 

10 from either governmental agencies or pri11 vate sources (including area career and 

12 technical education schools, as defined in 

13 section 3 of the Carl D. Perkins Career 

14 and Technical Education Act of 2006 (20 

15 U.S.C. 2302), and employers); 

16 (v) the worker is qualified to under17 take and complete such training; and 

18 (vi) such training is suitable for the 

19 worker and available at a reasonable cost, 

20 the Secretary shall approve such training for 

21 the worker. Upon such approval, the worker 

22 shall be entitled to have payment of the costs 

23 of such training (subject to the limitations im24 posed by this section) paid on the worker’s beVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00251 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 half by the Secretary directly or through a 

2 voucher system. 

3 (B) DISTRIBUTION.—The Secretary shall 

4 establish procedures for the distribution of the 

5 funds to States to carry out the training pro6 grams approved under this paragraph, and shall 

7 make an initial distribution of the funds made 

8 available as soon as practicable after the begin9 ning of each fiscal year. 

10 (C) ADDITIONAL RULES REGARDING AP11 PROVAL OF AND PAYMENT FOR TRAINING.— 

12 (i) For purposes of applying subpara13 graph (A)(iii), a reasonable expectation of 

14 employment does not require that employ15 ment opportunities for a worker be avail16 able, or offered, immediately upon the 

17 completion of training approved under 

18 such subparagraph. 

19 (ii) If the costs of training an ad20 versely affected worker are paid by the 

21 Secretary under subparagraph (A), no 

22 other payment for such costs may be made 

23 under any other provision of Federal law. 

24 No payment may be made under subpara25 graph (A) of the costs of training an adVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00252 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 versely affected worker or an adversely af2 fected incumbent worker if such costs— 

3 (I) have already been paid under 

4 any other provision of Federal law; or 

5 (II) are reimbursable under any 

6 other provision of Federal law and a 

7 portion of such costs have already 

8 been paid under such other provision 

9 of Federal law. 

10 The provisions of this clause shall not 

11 apply to, or take into account, any funds 

12 provided under any other provision of Fed13 eral law which are used for any purpose 

14 other than the direct payment of the costs 

15 incurred in training a particular adversely 

16 affected worker, even if such use has the 

17 effect of indirectly paying or reducing any 

18 portion of the costs involved in training the 

19 adversely affected worker. 

20 (D) TRAINING PROGRAMS.—The training 

21 programs that may be approved under subpara22 graph (A) include— 

23 (i) employer-based training, includ24 ing— 


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1 (I) on-the-job training if ap2 proved by the Secretary under sub3 section (c); and 

4 (II) joint labor-management ap5 prenticeship programs; 

6 (ii) any training program provided by 

7 a State pursuant to title I of the Work8 force Investment Act of 1998 (29 U.S.C. 

9 2801 et seq.); 

10 (iii) any programs in career and tech11 nical education described in section 3(5) of 

12 the Carl D. Perkins Career and Technical 

13 Education Act of 2006 (20 U.S.C. 

14 2302(5)); 

15 (iv) any program of remedial edu16 cation; 

17 (v) any program of prerequisite edu18 cation or coursework required to enroll in 

19 training that may be approved under this 

20 paragraph; 

21 (vi) any training program for which 

22 all, or any portion, of the costs of training 

23 the worker are paid— 

24 (I) under any Federal or State 

25 program other than this part; or 


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•S 1733 IS

1 (II) from any source other than 

2 this part; 

3 (vii) any training program or 

4 coursework at an accredited institution of 

5 higher education (described in section 102 

6 of the Higher Education Act of 1965 (20 

7 U.S.C. 1002)), including a training pro8 gram or coursework for the purpose of— 

9 (I) obtaining a degree or certifi10 cation; or 

11 (II) completing a degree or cer12 tification that the worker had pre13 viously begun at an accredited institu14 tion of higher education; and 

15 (viii) any other training program ap16 proved by the Secretary. 

17 (3) SUPPLEMENTAL ASSISTANCE.—The Sec18 retary may, as appropriate, authorize supplemental 

19 assistance that is necessary to defray reasonable 

20 transportation and subsistence expenses for separate 

21 maintenance in a case in which training for a worker 

22 is provided in a facility that is not within commuting 

23 distance of the regular place of residence of the 

24 worker. 

25 (c) ON-THE-JOB TRAINING REQUIREMENTS.— 


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1 (1) IN GENERAL.—The Secretary may approve 

2 on-the-job training for any adversely affected worker 

3 if— 

4 (A) the Secretary determines that on-the5 job training— 

6 (i) can reasonably be expected to lead 

7 to suitable employment with the employer 

8 offering the on-the-job training; 

9 (ii) is compatible with the skills of the 

10 worker; 

11 (iii) includes a curriculum through 

12 which the worker will gain the knowledge 

13 or skills to become proficient in the job for 

14 which the worker is being trained; and 

15 (iv) can be measured by benchmarks 

16 that indicate that the worker is gaining 

17 such knowledge or skills; and 

18 (B) the State determines that the on-the19 job training program meets the requirements of 

20 clauses (iii) and (iv) of subparagraph (A). 

21 (2) MONTHLY PAYMENTS.—The Secretary shall 

22 pay the costs of on-the-job training approved under 

23 paragraph (1) in monthly installments. 

24 (3) CONTRACTS FOR ON-THE-JOB TRAINING.— 


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1 (A) IN GENERAL.—The Secretary shall en2 sure, in entering into a contract with an em3 ployer to provide on-the-job training to a work4 er under this subsection, that the skill require5 ments of the job for which the worker is being 

6 trained, the academic and occupational skill 

7 level of the worker, and the work experience of 

8 the worker are taken into consideration. 

9 (B) TERM OF CONTRACT.—Training under 

10 any such contract shall be limited to the period 

11 of time required for the worker receiving on12 the-job training to become proficient in the job 

13 for which the worker is being trained, but may 

14 not exceed 156 weeks in any case. 

15 (4) EXCLUSION OF CERTAIN EMPLOYERS.—The 

16 Secretary shall not enter into a contract for on-the17 job training with an employer that exhibits a pattern 

18 of failing to provide workers receiving on-the-job 

19 training from the employer with— 

20 (A) continued, long-term employment as 

21 regular employees; and 

22 (B) wages, benefits, and working condi23 tions that are equivalent to the wages, benefits, 

24 and working conditions provided to regular em25 ployees who have worked a similar period of 


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1 time and are doing the same type of work as 

2 workers receiving on-the-job training from the 

3 employer. 

4 (d) ADMINISTRATIVE AND EMPLOYMENT SERVICES

5 FUNDING.— 

6 (1) ADMINISTRATIVE FUNDING.—In addition to 

7 any funds made available to a State to carry out this 

8 section for a fiscal year, the State shall receive for 

9 the fiscal year a payment in an amount that is equal 

10 to 15 percent of the amount of such funds and 

11 shall— 

(A) use not more than 2 12 ⁄3 of such payment 

13 for the administration of the climate change ad14 justment assistance for workers program under 

15 this part, including for— 

16 (i) processing waivers of training re17 quirements under subsection (a)(4); and 

18 (ii) collecting, validating, and report19 ing data required under this part; and 

(B) use not less than 1 20 ⁄3 of such payment 

21 for information and employment services under 

22 subsection (b)(1). 

23 (2) EMPLOYMENT SERVICES FUNDING.— 

24 (A) IN GENERAL.—In addition to any 

25 funds made available to a State to carry out 


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1 subsection (b)(2) and the payment under para2 graph (1) for a fiscal year, the Secretary shall 

3 provide to the State for the fiscal year a reason4 able payment for the purpose of providing em5 ployment and services under subsection (b)(1). 

6 (B) VOLUNTARY RETURN OF FUNDS.—A 

7 State that receives a payment under subpara8 graph (A) may decline or otherwise return such 

9 payment to the Secretary. 

10 (e) JOB SEARCH ASSISTANCE.—The Secretary of 

11 Labor may provide adversely affected workers one-time 

12 job search assistance in accordance with regulations pre13 scribed by the Secretary. Any job search assistance pro14 vided shall be available only under the following cir15 cumstances and conditions: 

16 (1) The worker is no longer eligible for the cli17 mate change adjustment assistance under subsection 

18 (a) and has completed the training program required 

19 by subsection (b)(1)(E). 

20 (2) The Secretary determines that the worker 

21 cannot reasonably be expected to secure suitable em22 ployment in the commuting area in which the worker 

23 resides. 

24 (3) Assistance granted shall provide reimburse25 ment to the worker of all necessary job search exVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00259 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 penses as prescribed by the Secretary in regulations. 

2 Such reimbursement under this subsection may not 

3 exceed $1,500 for any worker. 

4 (f) RELOCATION ASSISTANCE AUTHORIZED.— 

5 (1) IN GENERAL.—Any adversely affected work6 er covered by a certification issued under section 

7 311 may file an application for relocation assistance 

8 with the Secretary, and the Secretary may grant the 

9 relocation assistance, subject to the terms and condi10 tions of this subsection. 

11 (2) CONDITIONS FOR GRANTING ASSISTANCE.— 

12 Relocation assistance may be granted if all of the 

13 following terms and conditions are met: 

14 (A) ASSIST AN ADVERSELY AFFECTED

15 WORKER.—The relocation assistance will assist 

16 an adversely affected worker in relocating with17 in the United States. 

18 (B) LOCAL EMPLOYMENT NOT AVAIL19 ABLE.—The Secretary determines that the 

20 worker cannot reasonably be expected to secure 

21 suitable employment in the commuting area in 

22 which the worker resides. 

23 (C) TOTAL SEPARATION.—The worker is 

24 totally separated from employment at the time 

25 relocation commences. 


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1 (D) SUITABLE EMPLOYMENT OBTAINED.— 

2 The worker— 

3 (i) has obtained suitable employment 

4 affording a reasonable expectation of long5 term duration in the area in which the 

6 worker wishes to relocate; or 

7 (ii) has obtained a bona fide offer of 

8 such employment. 

9 (E) APPLICATION.—The worker filed an 

10 application with the Secretary at such time and 

11 in such manner as the Secretary shall specify 

12 by regulation. 

13 (3) AMOUNT OF ASSISTANCE.—Relocation as14 sistance granted to a worker under paragraph (1) 

15 includes— 

16 (A) all reasonable and necessary expenses 

17 (including, subsistence and transportation ex18 penses at levels not exceeding amounts pre19 scribed by the Secretary in regulations) in20 curred in transporting the worker, the worker’s 

21 family, and household effects; and 

22 (B) a lump sum equivalent to 3 times the 

23 worker’s average weekly wage, up to a max24 imum payment of $1,500. 


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1 (4) LIMITATIONS.—Relocation assistance may 

2 not be granted to a worker unless— 

3 (A) the relocation occurs within 182 days 

4 after the filing of the application for relocation 

5 assistance; or 

6 (B) the relocation occurs within 182 days 

7 after the conclusion of training, if the worker 

8 entered a training program approved by the 

9 Secretary under subsection (b)(2). 

10 (g) HEALTH INSURANCE CONTINUATION.—Not later 

11 than 1 year after the date of enactment of this Act, the 

12 Secretary of Labor shall prescribe regulations to provide, 

13 for the period in which an adversely affected worker is 

14 participating in a training program described in sub15 section (b)(2), 80 percent of the monthly premium of any 

16 health insurance coverage that an adversely affected work17 er was receiving from such worker’s employer prior to the 

18 separation from employment described in section 311(b), 

19 to be paid to any health care insurance plan designated 

20 by the adversely affected worker receiving assistance 

21 under this section. 

22 SEC. 313. GENERAL PROVISIONS. 

23 (a) AGREEMENTS WITH STATES.— 

24 (1) IN GENERAL.—The Secretary is authorized 

25 on behalf of the United States to enter into an 


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1 agreement with any State, or with any State agency 

2 (referred to in this section as ‘‘cooperating States’’ 

3 and ‘‘cooperating State agencies’’ respectively). 

4 Under such an agreement, the cooperating State or 

5 cooperating State agency— 

6 (A) as agent of the United States, shall re7 ceive applications for, and shall provide, pay8 ments on the basis provided in this part; 

9 (B) in accordance with paragraph (6), 

10 shall make available to adversely affected work11 ers covered by a certification under section 

12 311(d) the employment services described in 

13 section 312(b)(1); 

14 (C) shall make any certifications required 

15 under section 311(d); and 

16 (D) shall otherwise cooperate with the Sec17 retary and with other State and Federal agen18 cies in providing payments and services under 

19 this part. 

20 Each agreement under this section shall provide the 

21 terms and conditions upon which the agreement may 

22 be amended, suspended, or terminated. 

23 (2) FORM AND MANNER OF DATA.—Each 

24 agreement under this section shall— 


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1 (A) provide the Secretary with the author2 ity to collect any data the Secretary determines 

3 necessary to meet the requirements of this part; 

4 and 

5 (B) specify the form and manner in which 

6 any such data requested by the Secretary shall 

7 be reported. 

8 (3) RELATIONSHIP TO UNEMPLOYMENT INSUR9 ANCE.—Each agreement under this section shall 

10 provide that an adversely affected worker receiving 

11 climate change adjustment assistance under this 

12 part shall not be eligible for unemployment insur13 ance otherwise payable to such worker under the 

14 laws of the State. 

15 (4) REVIEW.—A determination by a cooper16 ating State agency with respect to entitlement to 

17 program benefits under an agreement is subject to 

18 review in the same manner and to the same extent 

19 as determinations under the applicable State law 

20 and only in that manner and to that extent. 

21 (5) COORDINATION.—Any agreement entered 

22 into under this section shall provide for the coordi23 nation of the administration of the provisions for 

24 employment services, training, and supplemental as25 sistance under section 312 and under title I of the 


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1 Workforce Investment Act of 1998 (29 U.S.C. 2801 

2 et seq.) upon such terms and conditions as are es3 tablished by the Secretary in consultation with the 

4 States and set forth in such agreement. Any agency 

5 of the State jointly administering such provisions 

6 under such agreement shall be considered to be a co7 operating State agency for purposes of this part. 

8 (6) RESPONSIBILITIES OF COOPERATING AGEN9 CIES.—Each cooperating State agency shall, in car10 rying out paragraph (1)(B)— 

11 (A) advise each worker who applies for un12 employment insurance of the benefits under this 

13 part and the procedures and deadlines for ap14 plying for such benefits; 

15 (B) facilitate the early filing of petitions 

16 under section 311(a) for any workers that the 

17 agency considers are likely to be eligible for 

18 benefits under this part; 

19 (C) advise each adversely affected worker 

20 to apply for training under section 312(b) be21 fore, or at the same time, the worker applies for 

22 climate change adjustment assistance under 

23 section 312(a); 

24 (D) perform outreach to, intake of, and 

25 orientation for adversely affected workers and 


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1 adversely affected incumbent workers covered 

2 by a certification under section 312(a) with re3 spect to assistance and benefits available under 

4 this part; 

5 (E) make employment services described in 

6 section 312(b)(1) available to adversely affected 

7 workers and adversely affected incumbent work8 ers covered by a certification under section 

9 311(d) and, if funds provided to carry out this 

10 part are insufficient to make such services 

11 available, make arrangements to make such 

12 services available through other Federal pro13 grams; and 

14 (F) provide the benefits and reemployment 

15 services under this part in a manner that is 

16 necessary for the proper and efficient adminis17 tration of this part, including the use of state 

18 agency personnel employed in accordance with a 

19 merit system of personnel administration stand20 ards, including— 

21 (i) making determinations of eligibility 

22 for, and payment of, climate change read23 justment assistance and health care benefit 

24 replacement amounts; 


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1 (ii) developing recommendations re2 garding payments as a bridge to retire3 ment and lump sum payments to pension 

4 plans in accordance with this subsection; 

5 and 

6 (iii) the provision of reemployment 

7 services to eligible workers, including refer8 ral to training services. 

9 (7) SUBMISSION OF CERTAIN INFORMATION.— 

10 In order to promote the coordination of workforce 

11 investment activities in each State with activities 

12 carried out under this part, any agreement entered 

13 into under this section shall provide that the State 

14 shall submit to the Secretary, in such form as the 

15 Secretary may require, the description and informa16 tion described in paragraphs (8) and (14) of section 

17 112(b) of the Workforce Investment Act of 1998 (29 

18 U.S.C. 2822(b)) and a description of the State’s 

19 rapid response activities under section 134(a)(2)(A) 

20 of that Act (29 U.S.C. 2864(a)(2)(A)). 

21 (8) CONTROL MEASURES.— 

22 (A) IN GENERAL.—The Secretary shall re23 quire each cooperating State and cooperating 

24 State agency to implement effective control 

25 measures and to effectively oversee the operVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00267 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 ation and administration of the climate change 

2 adjustment assistance program under this part, 

3 including by means of monitoring the operation 

4 of control measures to improve the accuracy 

5 and timeliness of the data being collected and 

6 reported. 

7 (B) DEFINITION.—For purposes of sub8 paragraph (A), the term ‘‘control measures’’ 

9 means measures that— 

10 (i) are internal to a system used by a 

11 State to collect data; and 

12 (ii) are designed to ensure the accu13 racy and verifiability of such data. 

14 (9) DATA REPORTING.— 

15 (A) IN GENERAL.—Any agreement entered 

16 into under this section shall require the cooper17 ating State or cooperating State agency to re18 port to the Secretary on a quarterly basis com19 prehensive performance accountability data, to 

20 consist of— 

21 (i) the core indicators of performance 

22 described in subparagraph (B)(i); 

23 (ii) the additional indicators of per24 formance described in subparagraph 

25 (B)(ii), if any; and 


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1 (iii) a description of efforts made to 

2 improve outcomes for workers under the 

3 climate change adjustment assistance pro4 gram. 

5 (B) CORE INDICATORS DESCRIBED.— 

6 (i) IN GENERAL.—The core indicators 

7 of performance described in this subpara8 graph are— 

9 (I) the percentage of workers re10 ceiving benefits under this part who 

11 are employed during the second cal12 endar quarter following the calendar 

13 quarter in which the workers cease re14 ceiving such benefits; 

15 (II) the percentage of such work16 ers who are employed in each of the 

17 third and fourth calendar quarters fol18 lowing the calendar quarter in which 

19 the workers cease receiving such bene20 fits; and 

21 (III) the earnings of such work22 ers in each of the third and fourth 

23 calendar quarters following the cal24 endar quarter in which the workers 

25 cease receiving such benefits. 


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1 (ii) ADDITIONAL INDICATORS.—The 

2 Secretary and a cooperating State or co3 operating State agency may agree upon 

4 additional indicators of performance for 

5 the climate change adjustment assistance 

6 program under this part, as appropriate. 

7 (C) STANDARDS WITH RESPECT TO RELI8 ABILITY OF DATA.—In preparing the quarterly 

9 report required by subparagraph (A), each co10 operating State or cooperating State agency 

11 shall establish procedures that are consistent 

12 with guidelines to be issued by the Secretary to 

13 ensure that the data reported are valid and reli14 able. 

15 (10) VERIFICATION OF ELIGIBILITY FOR PRO16 GRAM BENEFITS.— 

17 (A) IN GENERAL.—An agreement under 

18 this section shall provide that the State shall 

19 periodically redetermine that a worker receiving 

20 benefits under this part who is not a citizen or 

21 national of the United States remains in a sat22 isfactory immigration status. Once satisfactory 

23 immigration status has been initially verified 

24 through the immigration status verification sys25 tem described in section 1137(d) of the Social 


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•S 1733 IS

1 Security Act (42 U.S.C. 1320b–7(d)) for pur2 poses of establishing a worker’s eligibility for 

3 unemployment compensation, the State shall 

4 reverify the worker’s immigration status if the 

5 documentation provided during initial 

6 verification will expire during the period in 

7 which that worker is potentially eligible to re8 ceive benefits under this part. The State shall 

9 conduct such redetermination in a timely man10 ner, utilizing the immigration status verification 

11 system described in section 1137(d) of the So12 cial Security Act (42 U.S.C. 1320b–7(d)). 

13 (B) PROCEDURES.—The Secretary shall 

14 establish procedures to ensure the uniform ap15 plication by the States of the requirements of 

16 this paragraph. 

17 (b) ADMINISTRATION ABSENT STATE AGREE18 MENT.— 

19 (1) In any State where there is no agreement 

20 in force between a State or its agency under sub21 section (a), the Secretary shall promulgate regula22 tions for the performance of all necessary functions 

23 under section 312, including provision for a fair 

24 hearing for any worker whose application for pay25 ments is denied. 


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1 (2) A final determination under paragraph (1) 

2 with respect to entitlement to program benefits 

3 under section 312 is subject to review by the courts 

4 in the same manner and to the same extent as is 

5 provided by section 205(g) of the Social Security Act 

6 (42 U.S.C. 405(g)). 

7 (c) PROHIBITION ON CONTRACTING WITH PRIVATE

8 ENTITIES.—Neither the Secretary nor a State may con9 tract with any private for-profit or nonprofit entity for the 

10 administration of the climate change adjustment assist11 ance program under this part. 

12 (d) PAYMENT TO THE STATES.— 

13 (1) IN GENERAL.—The Secretary shall from 

14 time to time certify to the Secretary of the Treasury 

15 for payment to each cooperating State the sums nec16 essary to enable such State as agent of the United 

17 States to make payments provided for by this part. 

18 (2) RESTRICTION.—All money paid a State 

19 under this subsection shall be used solely for the 

20 purposes for which it is paid; and money so paid 

21 which is not used for such purposes shall be re22 turned, at the time specified in the agreement under 

23 this section, to the Secretary of the Treasury. 

24 (3) BONDS.—Any agreement under this section 

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1 tifying payments or disbursing funds under the 

2 agreement or otherwise participating in the perform3 ance of the agreement, to give a surety bond to the 

4 United States in such amount as the Secretary may 

5 deem necessary, and may provide for the payment of 

6 the cost of such bond from funds for carrying out 

7 the purposes of this part. 

8 (e) LABOR STANDARDS.— 

9 (1) PROHIBITION ON DISPLACEMENT.—An indi10 vidual in an apprenticeship program or on-the-job 

11 training program under this part shall not displace 

12 (including a partial displacement, such as a reduc13 tion in the hours of non-overtime work, wages, or 

14 employment benefits) any employed employee. 

15 (2) PROHIBITION ON IMPAIRMENT OF CON16 TRACTS.—An apprenticeship program or on-the-job 

17 raining program under this Act shall not impair an 

18 existing contract for services or collective bargaining 

19 agreement, and no such activity that would be incon20 sistent with the terms of a collective bargaining 

21 agreement shall be undertaken without the written 

22 concurrence of the labor organization and employer 

23 concerned. 

24 (3) ADDITIONAL STANDARDS.—The Secretary, 

25 or a State acting under an agreement described in 


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1 subsection (a) may pay the costs of on-the-job train2 ing, notwithstanding any other provision of this sec3 tion, only if— 

4 (A) in the case of training which would be 

5 inconsistent with the terms of a collective bar6 gaining agreement, the written concurrence of 

7 the labor organization concerned has been ob8 tained; 

9 (B) the job for which such adversely af10 fected worker is being trained is not being cre11 ated in a promotional line that will infringe in 

12 any way upon the promotional opportunities of 

13 currently employed individuals; 

14 (C) such training is not for the same occu15 pation from which the worker was separated 

16 and with respect to which such worker’s group 

17 was certified pursuant to section 311(d); 

18 (D) the employer is provided reimburse19 ment of not more than 50 percent of the wage 

20 rate of the participant, for the cost of providing 

21 the training and additional supervision related 

22 to the training; and 

23 (E) the employer has not received payment 

24 under with respect to any other on-the-job 

25 training provided by such employer which failed 


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1 to meet the requirements of subparagraphs (A) 

2 through (D). 

3 (f) DEFINITIONS.—As used in this part the following 

4 definitions apply: 

5 (1) The term ‘‘adversely affected employment’’ 

6 means employment at an employment site, if work7 ers at such site are eligible to apply for adjustment 

8 assistance under this part. 

9 (2) The term ‘‘adversely affected worker’’ 

10 means an individual who has been totally or partially 

11 separated from employment and is eligible to apply 

12 for adjustment assistance under this part. 

(3) The term ‘‘average weekly wage’’ means 1 13 ⁄13

14 of the total wages paid to an individual in the quar15 ter in which the individual’s total wages were highest 

16 among the first 4 of the last 5 completed calendar 

17 quarters immediately before the quarter in which oc18 curs the week with respect to which the computation 

19 is made. Such week shall be the week in which total 

20 separation occurred, or, in cases where partial sepa21 ration is claimed, an appropriate week, as defined in 

22 regulations prescribed by the Secretary. 

23 (4) The term ‘‘average weekly hours’’ means 

24 the average hours worked by the individual (exclud25 ing overtime) in the employment from which he has 


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1 been or claims to have been separated in the 52 

2 weeks (excluding weeks during which the individual 

3 was sick or on vacation) preceding the week speci4 fied in the last sentence of paragraph (4). 

5 (5) The term ‘‘benefit period’’ means, with re6 spect to an individual— 

7 (A) the benefit year and any ensuing pe8 riod, as determined under applicable State law, 

9 during which the individual is eligible for reg10 ular compensation, additional compensation, or 

11 extended compensation; or 

12 (B) the equivalent to such a benefit year 

13 or ensuing period provided for under the appli14 cable Federal unemployment insurance law. 

15 (6) The term ‘‘consumer goods manufacturing’’ 

16 means the electrical equipment, appliance, and com17 ponent manufacturing industry and transportation 

18 equipment manufacturing. 

19 (7) The term ‘‘employment site’’ means a single 

20 facility or site of employment. 

21 (8) The term ‘‘energy-intensive manufacturing 

22 industries’’ means all industrial sectors, entities, or 

23 groups of entities that meet the energy or green24 house gas intensity criteria in section 763(b)(2)(A) 


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1 of the Clean Air Act based on the most recent data 

2 available. 

3 (9) The term ‘‘energy producing and trans4 forming industries’’ means the coal mining industry, 

5 oil and gas extraction, electricity power generation, 

6 transmission and distribution, and natural gas dis7 tribution. 

8 (10) The term ‘‘on-the-job training’’ means 

9 training provided by an employer to an individual 

10 who is employed by the employer. 

11 (11) The terms ‘‘partial separation’’ and ‘‘par12 tially separated’’ refer, with respect to an individual 

13 who has not been totally separated, that such indi14 vidual has had— 

15 (A) his or her hours of work reduced to 80 

16 percent or less of his average weekly hours in 

17 adversely affected employment; and 

18 (B) his or her wages reduced to 80 percent 

19 or less of his average weekly wage in such ad20 versely affected employment. 

21 (12) The term ‘‘public agency’’ means a depart22 ment or agency of a State or political subdivision of 

23 a State or of the Federal Government. 

24 (13) The term ‘‘Secretary’’ means the Secretary 

25 of Labor. 


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1 (14) The term ‘‘service workers’’ means work2 ers supplying support or auxiliary services to an em3 ployment site. 

4 (15) The term ‘‘State’’ includes the District of 

5 Columbia and the Commonwealth of Puerto Rico: 

6 and the term ‘‘United States’’ when used in the geo7 graphical sense includes such Commonwealth. 

8 (16) The term ‘‘State agency’’ means the agen9 cy of the State which administers the State law. 

10 (17) The term ‘‘State law’’ means the unem11 ployment insurance law of the State approved by the 

12 Secretary of Labor under section 3304 of the Inter13 nal Revenue Code of 1986. 

14 (18) The terms ‘‘total separation’’ and ‘‘totally 

15 separated’’ refer to the layoff or severance of an in16 dividual from employment with an employer in which 

17 adversely affected employment exists. 

18 (19) The term ‘‘unemployment insurance’’ 

19 means the unemployment compensation payable to 

20 an individual under any State law or Federal unem21 ployment compensation law, including chapter 85 of 

22 title 5, United States Code, and the Railroad Unem23 ployment Insurance Act (45 U.S.C. 351 et seq.). 

24 The terms ‘‘regular compensation’’, ‘‘additional com25 pensation’’, and ‘‘extended compensation’’ have the 


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1 same respective meanings that are given them in 

2 section 205(2), (3), and (4) of the Federal-State Ex3 tended Unemployment Compensation Act of 1970 

4 (26 U.S.C. 3304 note; Public Law 91–373). 

5 (20) The term ‘‘week’’ means a week as defined 

6 in the applicable State law. 

7 (21) The term ‘‘week of unemployment’’ means 

8 a week of total, part-total, or partial unemployment 

9 as determined under the applicable State law or 

10 Federal unemployment insurance law. 

11 (g) SPECIAL RULE WITH RESPECT TO MILITARY

12 SERVICE.— 

13 (1) IN GENERAL.—Notwithstanding any other 

14 provision of this part, the Secretary may waive any 

15 requirement of this part that the Secretary deter16 mines is necessary to ensure that an adversely af17 fected worker who is a member of a reserve compo18 nent of the Armed Forces and serves a period of 

19 duty described in paragraph (2) is eligible to receive 

20 climate change adjustment assistance, training, and 

21 other benefits under this part in the same manner 

22 and to the same extent as if the worker had not 

23 served the period of duty. 

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1 scribed in this paragraph if, before completing train2 ing under this part, the worker— 

3 (A) serves on active duty for a period of 

4 more than 30 days under a call or order to ac5 tive duty of more than 30 days; or 

6 (B) in the case of a member of the Army 

7 National Guard of the United States or Air Na8 tional Guard of the United States, performs 

9 full-time National Guard duty under section 

10 502(f) of title 32, United States Code, for 30 

11 consecutive days or more when authorized by 

12 the President or the Secretary of Defense for 

13 the purpose of responding to a national emer14 gency declared by the President and supported 

15 by Federal funds. 

16 (h) FRAUD AND RECOVERY OF OVERPAYMENTS.— 

17 (1) RECOVERY OF PAYMENTS TO WHICH AN IN18 DIVIDUAL WAS NOT ENTITLED.—If the Secretary or 

19 a court of competent jurisdiction determines that 

20 any person has received any payment under this 

21 part to which the individual was not entitled, such 

22 individual shall be liable to repay such amount to 

23 the Secretary, as the case may be, except that the 

24 Secretary shall waive such repayment if such agency 

25 or the Secretary determines that— 


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1 (A) the payment was made without fault 

2 on the part of such individual; and 

3 (B) requiring such repayment would cause 

4 a financial hardship for the individual (or the 

5 individual’s household, if applicable) when tak6 ing into consideration the income and resources 

7 reasonably available to the individual (or house8 hold) and other ordinary living expenses of the 

9 individual (or household). 

10 (2) MEANS OF RECOVERY.—Unless an overpay11 ment is otherwise recovered, or waived under para12 graph (1), the Secretary shall recover the overpay13 ment by deductions from any sums payable to such 

14 person under this part, under any Federal unem15 ployment compensation law or other Federal law ad16 ministered by the Secretary which provides for the 

17 payment of assistance with respect to unemploy18 ment. Any amount recovered under this section shall 

19 be returned to the Treasury of the United States. 

20 (3) PENALTIES FOR FRAUD.—Any person 

21 who— 

22 (A) makes a false statement of a material 

23 fact knowing it to be false, or knowingly fails 

24 to disclose a material fact, for the purpose of 

25 obtaining or increasing for that person or for 


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1 any other person any payment authorized to be 

2 furnished under this part; or 

3 (B) makes a false statement of a material 

4 fact knowing it to be false, or knowingly fails 

5 to disclose a material fact, when providing in6 formation to the Secretary during an investiga7 tion of a petition under section 311(c); 

8 shall be imprisoned for not more than one year, or fined 

9 under title 18, United States Code, or both, and be ineli10 gible for any further payments under this part. 

11 (i) REGULATIONS.—The Secretary shall prescribe 

12 such regulations as may be necessary to carry out the pro13 visions of this part. 

14 (j) STUDY ON OLDER WORKERS.—The Secretary 

15 shall conduct a study examine the circumstances of older 

16 adversely affected workers and the ability of such workers 

17 to access their retirement benefits. The Secretary shall 

18 transmit a report to Congress not later than 2 years after 

19 the date of enactment of this Act on the findings of the 

20 study and the Secretary’s recommendations on how to en21 sure that adversely affected workers within 2 years of re22 tirement are able to access their retirement benefits. 


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1 Subtitle B—International Climate 

2 Change Programs 

3 SEC. 321. STRATEGIC INTERAGENCY BOARD ON INTER4 NATIONAL CLIMATE INVESTMENT. 

5 (a) ESTABLISHMENT.— 

6 (1) IN GENERAL.—Not later than 90 days after 

7 the date of the enactment of this Act, the President 

8 shall establish the ‘‘Strategic Interagency Board on 

9 International Climate Investment’’ (referred to in 

10 this subtitle as the ‘‘Board’’). 

11 (2) COMPOSITION.—The Board shall be com12 posed of— 

13 (A) the Secretary of State; 

14 (B) the Administrator of United States 

15 Agency for International Development; 

16 (C) the Secretary of Energy; 

17 (D) the Secretary of the Treasury; 

18 (E) the Secretary of Commerce; 

19 (F) the Secretary of Agriculture; 

20 (G) the Administrator; and 

21 (H) such other relevant officials as the 

22 President may designate. 

23 (b) DUTIES.—The duties of the Board shall include 

24 assessing, monitoring, and evaluating the progress and 

25 contributions of relevant departments and agencies of the 


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1 Federal Government in supporting financing for inter2 national climate change activities. 

3 SEC. 322. EMISSION REDUCTIONS FROM REDUCED DEFOR4 ESTATION. 

5 Title VII of the Clean Air Act (as amended by section 

6 101 of division B) is amended by adding at the end the 

7 following: 

8 ‘‘PART E—SUPPLEMENTAL EMISSION 

9 REDUCTIONS 

10 ‘‘SEC. 751. DEFINITIONS. 

11 ‘‘In this part: 

12 ‘‘(1) ADMINISTRATOR.—The term ‘Adminis13 trator’ means the Administrator of the United 

14 States Agency for International Development. 

15 ‘‘(2) DEFORESTATION.—The term ‘deforest16 ation’ means a change in land use from a forest to 

17 any other land use. 

18 ‘‘(3) DEGRADATION.—The term ‘degradation’, 

19 with respect to a forest, is any reduction in the car20 bon stock of a forest due to the impact of human 

21 land-use activities. 

22 ‘‘(4) EMISSION REDUCTIONS.—The term ‘emis23 sion reductions’ means greenhouse gas emission re24 ductions achieved from reduced or avoided deforest25 ation under this title. 


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1 ‘‘(5) LEAKAGE PREVENTION ACTIVITIES.—The 

2 term ‘leakage prevention activities’ means activities 

3 in developing countries that are directed at pre4 serving existing forest carbon stocks, including for5 ested wetlands and peatlands, that might, absent 

6 such activities, be lost through leakage. 

7 ‘‘SEC. 752. PURPOSES. 

8 ‘‘The purposes of this part are to provide United 

9 States assistance to developing countries— 

10 ‘‘(1) to develop, implement and improve nation11 ally appropriate greenhouse gas mitigation policies 

12 and actions that reduce deforestation and forest deg13 radation or conserve or restore forest ecosystems, in 

14 a measurable, reportable, and verifiable manner; and 

15 ‘‘(2) in a manner that is consistent with and 

16 enhances the implementation of complementary 

17 United States policies that support the good govern18 ance of forests, biodiversity conservation, and envi19 ronmentally sustainable development, while taking 

20 local communities, most vulnerable populations and 

21 communities, particularly forest-dependent commu22 nities and indigenous peoples into consideration. 


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1 ‘‘SEC. 753. EMISSION REDUCTIONS FROM REDUCED DEFOR2 ESTATION. 

3 ‘‘(a) IN GENERAL.—Not later than 2 years after the 

4 date of the enactment of this part, the Administrator, in 

5 consultation with the Administrator of the Environmental 

6 Protection Agency, the Secretary of Agriculture, and the 

7 head of any other appropriate agency, shall establish a 

8 program to provide assistance to reduce greenhouse gas 

9 emissions from deforestation in developing countries, in 

10 accordance with this title. 

11 ‘‘(b) OBJECTIVES.—The objectives of the program es12 tablished under this section shall be— 

13 ‘‘(1) to reduce greenhouse gas emissions from 

14 deforestation in developing countries by at least 

15 720,000,000 tons of carbon dioxide equivalent in 

16 2020, and a cumulative quantity of at least 

17 6,000,000,000 tons of carbon dioxide equivalent by 

18 December 31, 2025, with additional reductions in 

19 subsequent years; 

20 ‘‘(2) to assist developing countries in preparing 

21 to participate in international markets for inter22 national offset credits for reduced emissions from 

23 deforestation; and 

24 ‘‘(3) to preserve existing forest carbon stocks in 

25 countries where such forest carbon may be vulner26 able to international leakage.’’. 


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1 SEC. 323. INTERNATIONAL CLEAN ENERGY DEPLOYMENT 

2 PROGRAM. 

3 (a) PURPOSES.—The purposes of this section are— 

4 (1) to assist developing countries in activities 

5 that reduce, sequester, or avoid greenhouse gas 

6 emissions; 

7 (2) to encourage those countries to shift toward 

8 low-carbon development, and promote a successful 

9 global agreement under the United Nations Frame10 work Convention on Climate Change, done at New 

11 York on May 9, 1992 (or a successor agreement) 

12 (referred to in this subtitle as the ‘‘Convention’’); 

13 and 

14 (3) to promote robust compliance with and en15 forcement of existing international legal require16 ments for the protection of intellectual property 

17 rights. 

18 (b) ESTABLISHMENT OF INTERNATIONAL CLEAN EN19 ERGY DEPLOYMENT PROGRAM.— 

20 (1) ESTABLISHMENT.—The Secretary of State, 

21 in consultation with an interagency group designated 

22 by the President, shall establish an International 

23 Clean Energy Deployment Program in accordance 

24 with this section. 

25 (2) DISTRIBUTION OF ASSISTANCE.—The Sec26 retary of State, or the head of such other Federal 


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1 agency as the President may designate, shall direct 

2 the distribution of funding to carry out the Clean 

3 Energy Technology Program— 

4 (A) in the form of bilateral assistance; 

5 (B) to multilateral funds or international 

6 institutions pursuant to the Convention or an 

7 agreement negotiated under the Convention; or 

8 (C) through a combination of the mecha9 nisms identified under subparagraphs (A) and 

10 (B). 

11 (c) DETERMINATION OF QUALIFYING ACTIVITIES.— 

12 Assistance under this subtitle may be provided only to 

13 qualifying entities for clean technology activities (includ14 ing building relevant technical and institutional capacity) 

15 that contribute to substantial, measurable, reportable, and 

16 verifiable reductions, sequestration, or avoidance of green17 house gas emissions. 

18 SEC. 324. INTERNATIONAL CLIMATE CHANGE ADAPTATION 

19 AND GLOBAL SECURITY PROGRAM. 

20 (a) PURPOSES.—The purposes of this section are— 

21 (1) to provide assistance to the most vulnerable 

22 developing countries, particularly to the most vulner23 able communities and populations in those countries; 

24 and 


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1 (2) to support the development and implemen2 tation of climate change adaptation programs in a 

3 way that protects and promotes interests of the 

4 United States, to the extent those interests may be 

5 advanced by minimizing, averting, or increasing re6 silience to climate change impacts. 

7 (b) INTERNATIONAL CLIMATE CHANGE ADAPTATION

8 AND GLOBAL SECURITY PROGRAM.— 

9 (1) ESTABLISHMENT.—The Secretary of State, 

10 in consultation with the Administrator of the United 

11 States Agency for International Development, the 

12 Secretary of the Treasury, and the Administrator, 

13 shall establish an International Climate Change Ad14 aptation and Global Security Program in accordance 

15 with this section. 

16 (2) DISTRIBUTION OF ASSISTANCE.—The Sec17 retary of State, or the head of such other Federal 

18 agency as the President may designate, after con19 sultation with the Secretary of the Treasury, the Ad20 ministrator of the United States Agency for Inter21 national Development, and the Administrator, shall 

22 direct the distribution of funding to carry out the 

23 International Climate Change Adaptation and Global 

24 Security Program— 

25 (A) in the form of bilateral assistance; 


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1 (B) to multilateral funds or international 

2 institutions pursuant to the Convention or an 

3 agreement negotiated under the Convention; or 

4 (C) through a combination of the mecha5 nisms identified under subparagraphs (A) and 

6 (B). 

7 SEC. 325. EVALUATION AND REPORTS. 

8 (a) MONITORING, EVALUATION, AND ENFORCE9 MENT.—The Board shall establish and implement a sys10 tem to monitor and evaluate the effectiveness and effi11 ciency of assistance provided under this subtitle by includ12 ing evaluation criteria, such as performance indicators. 

13 (b) REPORTS AND REVIEW.— 

14 (1) ANNUAL REPORT.—Not later than 1 year 

15 after the date of enactment of this Act, and annually 

16 thereafter, the Board shall submit to the appropriate 

17 committees of Congress a report that describes— 

18 (A) the steps Federal agencies have taken, 

19 and the progress made, toward accomplishing 

20 the objectives of this section; and 

21 (B) the ramifications of any potentially de22 stabilizing impacts climate change may have on 

23 the interests of the United States. 

24 (2) REVIEWS.—Not later than 3 years after the 

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1 after, the Board, in cooperation with the National 

2 Academy of Sciences and other appropriate research 

3 and development institutions, shall— 

4 (A) review the global needs and opportuni5 ties for climate change investment in developing 

6 countries; and 

7 (B) submit to Congress a report that de8 scribes the findings of the review. 

9 SEC. 326. REPORT ON CLIMATE ACTIONS OF MAJOR 

10 ECONOMIES. 

11 (a) IN GENERAL.—The Secretary of State, in co12 operation with the Board, shall prepare an interagency re13 port on climate change and energy policy of the 5 coun14 tries that, of the countries that are not members of the 

15 Organisation for Economic Co-Operation and Develop16 ment, emit the greatest annual quantity of greenhouse 

17 gases. 

18 (b) PURPOSES.—The purposes of the report shall 

19 be— 

20 (1) to provide to Congress and the public of the 

21 United States— 

22 (A) a better understanding of the actions 

23 the countries described in subsection (a) are 

24 taking to reduce greenhouse gas emissions; and 


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1 (B) an assessment of the climate change 

2 and energy policy commitments and actions of 

3 those countries; and 

4 (2) to identify the means by which the United 

5 States can assist those countries in achieving such 

6 a reduction. 

7 (c) SUBMISSION TO CONGRESS.—Not later than 15 

8 months after the date of enactment of this Act, the Sec9 retary of State shall submit to the appropriate committees 

10 of Congress the report prepared under this section. 

11 Subtitle C—Adapting to Climate 

12 Change 

13 PART 1—DOMESTIC ADAPTATION 

14 Subpart A—National Climate Change Adaptation 

15 Program 

16 SEC. 341. NATIONAL CLIMATE CHANGE ADAPTATION PRO17 GRAM. 

18 The President shall establish within the United 

19 States Global Change Research Program a National Cli20 mate Change Adaptation Program for the purpose of in21 creasing the overall effectiveness of Federal climate 

22 change adaptation efforts. 

23 SEC. 342. CLIMATE SERVICES. 

24 The Secretary of Commerce, acting through the Ad25 ministrator of the National Oceanic and Atmospheric AdVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00292 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 ministration (NOAA), shall establish within NOAA a Na2 tional Climate Service to develop climate information, 

3 data, forecasts, and warnings at national and regional 

4 scales, and to distribute information related to climate im5 pacts to State, local, and tribal governments and the pub6 lic to facilitate the development and implementation of 

7 strategies to reduce society’s vulnerability to climate varia8 bility and change. 

9 Subpart B—Public Health and Climate Change 

10 SEC. 351. SENSE OF CONGRESS ON PUBLIC HEALTH AND 

11 CLIMATE CHANGE. 

12 It is the sense of the Congress that the Federal Gov13 ernment, in cooperation with international, State, tribal, 

14 and local governments, Indian tribes, concerned public and 

15 private organizations, and citizens, should use all prac16 ticable means and measures— 

17 (1) to assist the efforts of public health and 

18 health care professionals, first responders, States, 

19 Indian tribes, municipalities, and local communities 

20 to incorporate measures to prepare health systems to 

21 respond to the impacts of climate change; 

22 (2) to ensure— 

23 (A) that the Nation’s health professionals 

24 have sufficient information to prepare for and 


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1 respond to the adverse health impacts of cli2 mate change; 

3 (B) the utility and value of scientific re4 search in advancing understanding of— 

5 (i) the health impacts of climate 

6 change; and 

7 (ii) strategies to prepare for and re8 spond to the health impacts of climate 

9 change; 

10 (C) the identification of communities vul11 nerable to the health effects of climate change 

12 and the development of strategic response plans 

13 to be carried out by health professionals for 

14 those communities; 

15 (D) the improvement of health status and 

16 health equity through efforts to prepare for and 

17 respond to climate change; and 

18 (E) the inclusion of health policy in the de19 velopment of climate change responses; 

20 (3) to encourage further research, interdiscipli21 nary partnership, and collaboration among stake22 holders in order to— 

23 (A) understand and monitor the health im24 pacts of climate change; and 


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1 (B) improve public health knowledge and 

2 response strategies to climate change; 

3 (4) to enhance preparedness activities, and pub4 lic health infrastructure, relating to climate change 

5 and health; 

6 (5) to encourage each and every American to 

7 learn about the impacts of climate change on health; 

8 and 

9 (6) to assist the efforts of developing nations to 

10 incorporate measures to prepare health systems to 

11 respond to the impacts of climate change. 

12 SEC. 352. RELATIONSHIP TO OTHER LAWS. 

13 Nothing in this subpart in any manner limits the au14 thority provided to or responsibility conferred on any Fed15 eral department or agency by any provision of any law 

16 (including regulations) or authorizes any violation of any 

17 provision of any law (including regulations), including any 

18 health, energy, environmental, transportation, or any 

19 other law or regulation. 

20 SEC. 353. NATIONAL STRATEGIC ACTION PLAN. 

21 (a) REQUIREMENT.— 

22 (1) IN GENERAL.—The Secretary of Health and 

23 Human Services, within 2 years after the date of the 

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1 graph (2), shall publish a strategic action plan to as2 sist health professionals in preparing for and re3 sponding to the impacts of climate change on public 

4 health in the United States and other nations, par5 ticularly developing nations. 

6 (2) CONSULTATION.—In developing or making 

7 any revision to the national strategic action plan, the 

8 Secretary shall— 

9 (A) consult with the Director of the Cen10 ters for Disease Control and Prevention, the 

11 Administrator of the Environmental Protection 

12 Agency, the Director of the National Institutes 

13 of Health, the Director of the Indian Health 

14 Service, the Secretary of Energy, other appro15 priate Federal agencies, Indian tribes, State 

16 and local governments, public health organiza17 tions, scientists, and other interested stake18 holders; and 

19 (B) provide opportunity for public input. 

20 (b) CONTENTS.— 

21 (1) IN GENERAL.—The Secretary shall assist 

22 health professionals in preparing for and responding 

23 effectively and efficiently to the health effects of cli24 mate change through measures including— 


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1 (A) developing, improving, integrating, and 

2 maintaining domestic and international disease 

3 surveillance systems and monitoring capacity to 

4 respond to health-related effects of climate 

5 change, including on topics addressing— 

6 (i) water, food, and vector borne infec7 tious diseases and climate change; 

8 (ii) pulmonary effects, including re9 sponses to aeroallergens; 

10 (iii) cardiovascular effects, including 

11 impacts of temperature extremes; 

12 (iv) air pollution health effects, includ13 ing heightened sensitivity to air pollution; 

14 (v) hazardous algal blooms; 

15 (vi) mental and behavioral health im16 pacts of climate change; 

17 (vii) the health of refugees, displaced 

18 persons, and vulnerable communities; 

19 (viii) the implications for communities 

20 vulnerable to health effects of climate 

21 change, as well as strategies for responding 

22 to climate change within these commu23 nities; and 


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1 (ix) local and community-based health 

2 interventions for climate-related health im3 pacts; 

4 (B) creating tools for predicting and moni5 toring the public health effects of climate 

6 change on the international, national, regional, 

7 State, tribal, and local levels, and providing 

8 technical support to assist in their implementa9 tion; 

10 (C) developing public health communica11 tions strategies and interventions for extreme 

12 weather events and disaster response situations; 

13 (D) identifying and prioritizing commu14 nities and populations vulnerable to the health 

15 effects of climate change, and determining ac16 tions and communication strategies that should 

17 be taken to inform and protect these commu18 nities and populations from the health effects of 

19 climate change; 

20 (E) developing health communication, pub21 lic education, and outreach programs aimed at 

22 public health and health care professionals, as 

23 well as the general public, to promote prepared24 ness and response strategies relating to climate 

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1 fication of greenhouse gas reduction behaviors 

2 that are health-promoting; and 

3 (F) developing academic and regional cen4 ters of excellence devoted to— 

5 (i) researching relationships between 

6 climate change and health; 

7 (ii) expanding and training the public 

8 health workforce to strengthen the capacity 

9 of such workforce to respond to and pre10 pare for the health effects of climate 

11 change; 

12 (iii) creating and supporting academic 

13 fellowships focusing on the health effects 

14 of climate change; and 

15 (iv) training senior health ministry of16 ficials from developing nations to strength17 en the capacity of such nations to— 

18 (I) prepare for and respond to 

19 the health effects of climate change; 

20 and 

21 (II) build an international net22 work of public health professionals 

23 with the necessary climate change 

24 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) SPECIFIC ACTIVITIES.—In furtherance of 

19 the national strategic action plan, the Secretary 

20 shall— 

21 (A) conduct scientific research to assist 

22 health professionals in preparing for and re23 sponding to the impacts of climate change on 

24 public health; and 

25 (B) provide funding for— 


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1 (i) research on the health effects of 

2 climate change; and 

3 (ii) preparedness planning on the 

4 international, national, State, tribal, re5 gional, and local levels to respond to or re6 duce the burden of health effects of climate 

7 change; and 

8 (C) carry out other activities determined 

9 appropriate by the Secretary to prepare for and 

10 respond to the impacts of climate change on 

11 public health. 

12 SEC. 354. ADVISORY BOARD. 

13 (a) ESTABLISHMENT.—The Secretary shall establish 

14 a permanent science advisory board comprised of not less 

15 than 10 and not more than 20 members. 

16 (b) APPOINTMENT OF MEMBERS.—The Secretary 

17 shall appoint the members of the science advisory board 

18 from among individuals— 

19 (1) who have expertise in public health and 

20 human services, climate change, and other relevant 

21 disciplines; and 

(2) at least 1 22 ⁄2 of whom are recommended by 

23 the President of the National Academy of Sciences. 

24 (c) FUNCTIONS.—The science advisory board shall— 


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1 (1) provide scientific and technical advice and 

2 recommendations to the Secretary on the domestic 

3 and international impacts of climate change on pub4 lic health, populations and regions particularly vul5 nerable to the effects of climate change, and strate6 gies and mechanisms to prepare for and respond to 

7 the impacts of climate change on public health; and 

8 (2) advise the Secretary regarding the best 

9 science available for purposes of issuing the national 

10 strategic action plan. 

11 SEC. 355. REPORTS. 

12 (a) NEEDS ASSESSMENT.— 

13 (1) IN GENERAL.—The Secretary shall seek to 

14 enter into, by not later than 6 months after the date 

15 of the enactment of this Act, an agreement with the 

16 National Research Council and the Institute of Med17 icine to complete a report that— 

18 (A) assesses the needs for health profes19 sionals to prepare for and respond to climate 

20 change impacts on public health; and 

21 (B) recommends programs to meet those 

22 needs. 

23 (2) SUBMISSION.—The agreement under para24 graph (1) shall require the completed report to be 

25 submitted to the Congress and the Secretary and 


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1 made publicly available not later than 1 year after 

2 the date of the agreement. 

3 (b) CLIMATE CHANGE HEALTH PROTECTION AND

4 PROMOTION REPORTS.— 

5 (1) IN GENERAL.—The Secretary, in consulta6 tion with the advisory board established under sec7 tion 354, shall ensure the issuance of reports to aid 

8 health professionals in preparing for and responding 

9 to the adverse health effects of climate change 

10 that— 

11 (A) review scientific developments on 

12 health impacts of climate change; and 

13 (B) recommend changes to the national 

14 strategic action plan. 

15 (2) SUBMISSION.—The Secretary shall submit 

16 the reports required by paragraph (1) to the Con17 gress and make such reports publicly available not 

18 later than July 1, 2013, and every 4 years there19 after. 

20 SEC. 356. DEFINITIONS. 

21 In this subpart: 

22 (1) HEALTH IMPACT ASSESSMENT.—The term 

23 ‘‘health impact assessment’’ means a combination of 

24 procedures, methods, and tools by which a policy, 

25 program, or project may be judged as to its potential 


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1 effects on the health of a population, and the dis2 tribution of those effects within the population. 

3 (2) NATIONAL STRATEGIC ACTION PLAN.—The 

4 term ‘‘national strategic action plan’’ means the 

5 plan issued and revised under section 353. 

6 (3) SECRETARY.—Unless otherwise specified, 

7 the term ‘‘Secretary’’ means the Secretary of Health 

8 and Human Services. 

9 Subpart C—Climate Change Safeguards for Natural 

10 Resources Conservation 

11 SEC. 361. PURPOSES. 

12 The purposes of this subpart are— 

13 (1) to establish an integrated Federal program 

14 that responds to ongoing and expected impacts of 

15 climate change, including, where applicable, ocean 

16 acidification, drought, flooding, and wildfire, by pro17 tecting, restoring, and conserving the natural re18 sources of the United States; and 

19 (2) to provide financial support and incentives 

20 for programs, strategies, and activities that respond 

21 to threats of climate change, including, where appli22 cable, ocean acidification, drought, flooding, and 

23 wildfire, by protecting, restoring, and conserving the 

24 natural resources of the United States. 


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1 SEC. 362. 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 to protect, restore, and conserve natural resources 

7 so that natural resources become more resilient, adapt to, 

8 and withstand the ongoing and expected impacts of cli9 mate change, including, where applicable, ocean acidifica10 tion, drought, flooding, and wildfire. 

11 SEC. 363. DEFINITIONS. 

12 In this subpart: 

13 (1) ACCOUNT.—The term ‘‘Account’’ means the 

14 Natural Resources Climate Change Adaption Ac15 count established by section 370(a). 

16 (2) ADMINISTRATORS.—The term ‘‘Administra17 tors’’ means— 

18 (A) the Administrator of the National Oce19 anic and Atmospheric Administration; and 

20 (B) the Director of the United States Geo21 logical Survey. 

22 (3) BOARD.—The term ‘‘Board’’ means the 

23 Science Advisory Board established by section 

24 367(f)(1). 


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1 (4) CENTER.—The term ‘‘Center’’ means the 

2 National Climate Change and Wildlife Science Cen3 ter described by section 367(e)(1). 

4 (5) COASTAL STATE.—The term ‘‘coastal 

5 State’’ has the meaning given the term ‘‘coastal 

6 state’’ in section 304 of the Coastal Zone Manage7 ment Act of 1972 (16 U.S.C. 1453). 

8 (6) CORRIDORS.—The term ‘‘corridors’’ means 

9 areas that— 

10 (A) provide connectivity, over different 

11 time scales, of habitats or potential habitats; 

12 and 

13 (B) facilitate terrestrial, marine, estuarine, 

14 and freshwater fish, wildlife, or plant movement 

15 necessary for migration, gene flow, or dispersal, 

16 or to respond to the ongoing and expected im17 pacts of climate change, including, where appli18 cable, ocean acidification, drought, flooding, 

19 and wildfire. 

20 (7) ECOLOGICAL PROCESSES.—The term ‘‘eco21 logical processes’’ means biological, chemical, or 

22 physical interaction between the biotic and abiotic 

23 components of an ecosystem, including— 

24 (A) nutrient cycling; 

25 (B) pollination; 


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1 (C) predator-prey relationships; 

2 (D) soil formation; 

3 (E) gene flow; 

4 (F) disease epizootiology; 

5 (G) larval dispersal and settlement; 

6 (H) hydrological cycling; 

7 (I) decomposition; and 

8 (J) disturbance regimes, such as fire and 

9 flooding. 

10 (8) HABITAT.—The term ‘‘habitat’’ means the 

11 physical, chemical, and biological properties that 

12 fish, wildlife, or plants use for growth, reproduction, 

13 survival, food, water, or cover (whether on land, in 

14 water, or in an area or region). 

15 (9) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 

16 has the meaning given the term in section 4 of the 

17 Indian Self-Determination and Education Assistance 

18 Act (25 U.S.C. 450b). 

19 (10) NATURAL RESOURCES.—The term ‘‘nat20 ural resources’’ means land, wildlife, fish, air, water, 

21 estuaries, plants, habitats, and ecosystems of the 

22 United States. 

23 (11) NATURAL RESOURCES ADAPTATION.—The 

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1 sources so that natural resources become more resil2 ient, adapt to, and withstand the ongoing and ex3 pected impacts of climate change, including, where 

4 applicable, ocean acidification, drought, flooding, 

5 and wildfire. 

6 (12) PANEL.—The term ‘‘Panel’’ means the 

7 Natural Resources Climate Change Adaptation 

8 Panel established under section 365(a). 

9 (13) RESILIENCE; RESILIENT.—The terms ‘‘re10 silience’’ and ‘‘resilient’’ mean— 

11 (A) the ability to resist or recover from 

12 disturbance; and 

13 (B) the ability to preserve diversity, pro14 ductivity, and sustainability. 

15 (14) STATE.—The term ‘‘State’’ means— 

16 (A) a State of the United States; 

17 (B) the District of Columbia; 

18 (C) American Samoa; 

19 (D) Guam; 

20 (E) the Commonwealth of the Northern 

21 Mariana Islands; 

22 (F) the Commonwealth of Puerto Rico; 

23 and 

24 (G) the United States Virgin Islands. 


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1 (15) STRATEGY.—The term ‘‘Strategy’’ means 

2 the Natural Resources Climate Change Adaptation 

3 Strategy developed under section 366(a). 

4 SEC. 364. COUNCIL ON ENVIRONMENTAL QUALITY. 

5 The Chair of the Council on Environmental Quality 

6 shall— 

7 (1) advise the President on implementing and 

8 developing— 

9 (A) the Strategy; and 

10 (B) the Federal natural resource agency 

11 adaptation plans required by section 368; 

12 (2) serve as the Chair of the Panel established 

13 under section 365; and 

14 (3) coordinate Federal agency strategies, plans, 

15 programs, and activities relating to protecting, re16 storing, and maintaining natural resources so that 

17 natural resources become more resilient, adapt to, 

18 and withstand the ongoing and expected impacts of 

19 climate change. 

20 SEC. 365. NATURAL RESOURCES CLIMATE CHANGE ADAP21 TATION PANEL. 

22 (a) ESTABLISHMENT.—Not later than 90 days after 

23 the date of enactment of this Act, the President shall es24 tablish a Natural Resources Climate Change Adaptation 

25 Panel. 


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1 (b) DUTIES.—The Panel shall serve as a forum for 

2 interagency consultation on, and the coordination of, the 

3 development and implementation of the Strategy. 

4 (c) MEMBERSHIP.—The Panel shall be composed 

5 of— 

6 (1) the Administrator of the National Oceanic 

7 and Atmospheric Administration (or a designee); 

8 (2) the Chief of the Forest Service (or a des9 ignee); 

10 (3) the Director of the National Park Service 

11 (or a designee); 

12 (4) the Director of the United States Fish and 

13 Wildlife Service (or a designee); 

14 (5) the Director of the Bureau of Land Man15 agement (or a designee); 

16 (6) the Director of the United States Geological 

17 Survey (or a designee); 

18 (7) the Commissioner of Reclamation (or a des19 ignee); 

20 (8) the Director of the Bureau of Indian Affairs 

21 (or a designee); 

22 (9) the Administrator of the Environmental 

23 Protection Agency (or a designee); 

24 (10) the Chief of Engineers (or a designee); 


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1 (11) the Chair of the Council on Environmental 

2 Quality (or a designee); 

3 (12) the Administrator of the Federal Emer4 gency Management Agency (or a designee); and 

5 (13) the heads of such other Federal agencies 

6 or departments with jurisdiction over natural re7 sources of the United States, as determined by the 

8 President. 

9 (d) CHAIRPERSON.—The Chair of the Council on En10 vironmental Quality shall serve as the Chairperson of the 

11 Panel. 

12 SEC. 366. NATURAL RESOURCES CLIMATE CHANGE ADAP13 TATION STRATEGY. 

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

15 date of enactment of this Act, the Panel shall develop a 

16 Natural Resources Climate Change Adaptation Strategy— 

17 (1) to protect, restore, and conserve natural re18 sources so that natural resources become more resil19 ient, adapt to, and withstand the ongoing and ex20 pected impacts of climate change; and 

21 (2) to identify opportunities to mitigate the on22 going and expected impacts of climate change. 

23 (b) DEVELOPMENT.—In developing and revising the 

24 Strategy, the Panel shall— 


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1 (1) base the strategy on the best available 

2 science; 

3 (2) develop the strategy in close cooperation 

4 with States and Indian tribes; 

5 (3) coordinate with other Federal agencies, as 

6 appropriate; 

7 (4) consult with local governments, conservation 

8 organizations, scientists, and other interested stake9 holders; and 

10 (5) provide public notice and opportunity for 

11 comment. 

12 (c) REVISION.—After the Panel adopts the initial 

13 Strategy, the Panel shall review and revise the Strategy 

14 every 5 years to incorporate— 

15 (1) new information regarding the ongoing and 

16 expected impacts of climate change on natural re17 sources; and 

18 (2) new advances in the development of strate19 gies that make natural resources more resilient or 

20 able to adapt to the ongoing and expected impacts 

21 of climate change. 

22 (d) CONTENTS.—The Strategy shall— 

23 (1) assess the vulnerability of natural resources 

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1 term, long-term, cumulative, and synergistic im2 pacts; 

3 (2) describe current research, observation, and 

4 monitoring activities at the Federal, State, tribal, 

5 and local level related to the ongoing and expected 

6 impacts of climate change on natural resources; 

7 (3) identify and prioritize research and data 

8 needs; 

9 (4) identify natural resources likely to have the 

10 greatest need for protection, restoration, and con11 servation due to the ongoing and expanding impacts 

12 of climate change; 

13 (5) include specific protocols for integrating 

14 natural resources adaptation strategies and activities 

15 into the conservation and management of natural re16 sources by Federal departments and agencies to en17 sure consistency across agency jurisdictions; 

18 (6) include specific actions that Federal depart19 ments and agencies shall take to protect, conserve, 

20 and restore natural resources to become more resil21 ient, adapt to, and withstand the ongoing and ex22 pected impacts of climate change, including a 

23 timeline to implement those actions; 

24 (7) include specific mechanisms for ensuring 

25 communication and coordination— 


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1 (A) among Federal departments and agen2 cies; and 

3 (B) between Federal departments and 

4 agencies and State natural resource agencies, 

5 United States territories, Indian tribes, private 

6 landowners, conservation organizations, and 

7 other countries that share jurisdiction over nat8 ural resources with the United States; 

9 (8) include specific actions to develop and im10 plement consistent natural resources inventory and 

11 monitoring protocols through interagency coordina12 tion and collaboration; and 

13 (9) include procedures for guiding the develop14 ment of detailed agency- and department-specific ad15 aptation plans required under section 368. 

16 (e) IMPLEMENTATION.—Consistent with other laws 

17 and Federal trust responsibilities concerning Indian land, 

18 each Federal department or agency represented on the 

19 Panel shall integrate the elements of the Strategy that re20 late to conservation, restoration, and management of nat21 ural resources into agency plans, environmental reviews, 

22 programs, and activities. 


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1 SEC. 367. NATURAL RESOURCES ADAPTATION SCIENCE 

2 AND INFORMATION. 

3 (a) COORDINATION.—Not later than 90 days after 

4 the date of enactment of this Act, the Administrators shall 

5 establish coordinated procedures for developing and pro6 viding science and information necessary to address the 

7 ongoing and expected impacts of climate change on nat8 ural resources. 

9 (b) OVERSIGHT.—The National Climate Change and 

10 Wildlife Science Center established under subsection (e) 

11 and the National Climate Service of the National Oceanic 

12 and Atmospheric Administration shall oversee develop13 ment of the procedures. 

14 (c) FUNCTIONS.—The Administrators shall— 

15 (1) ensure that the procedures required under 

16 subsection (a) avoid duplication; and 

17 (2) ensure that the National Oceanic and At18 mospheric Administration and the United States Ge19 ological Survey— 

20 (A) provide technical assistance to Federal 

21 departments and agencies, State and local gov22 ernments, Indian tribes, and interested private 

23 landowners that are pursuing the goals of ad24 dressing the ongoing and expected impacts of 

25 climate change on natural resources; 


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1 (B) conduct and sponsor research to de2 velop strategies that increase the ability of nat3 ural resources to become more resilient, adapt 

4 to, and withstand the ongoing and expected im5 pacts of climate change; 

6 (C) provide Federal departments and agen7 cies, State and local governments, Indian tribes, 

8 and interested private landowners with research 

9 products, decision and monitoring tools, and in10 formation to develop strategies that increase 

11 the ability of natural resources to become more 

12 resilient, adapt to, and withstand the ongoing 

13 and expected impacts of climate change; and 

14 (D) assist Federal departments and agen15 cies in the development of adaptation plans re16 quired by section 368. 

17 (d) SURVEY.—Not later than 1 year after the date 

18 of enactment of this Act, and every 5 years thereafter, 

19 the Secretary of Commerce and the Secretary of the Inte20 rior shall conduct a climate change impact survey that— 

21 (1) identifies natural resources considered likely 

22 to be adversely affected by climate change; 

23 (2) includes baseline monitoring and ongoing 

24 trend analysis; 


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1 (3) with input from stakeholders, identifies and 

2 prioritizes necessary monitoring and research that is 

3 most relevant to the needs of natural resource man4 agers to address the ongoing and expected impacts 

5 of climate change and to promote resilience; and 

6 (4) identifies the decision tools necessary to de7 velop strategies that increase the ability of natural 

8 resources to become more resilient, adapt to, and 

9 withstand the ongoing and expected impacts of cli10 mate change. 

11 (e) NATIONAL CLIMATE CHANGE AND WILDLIFE

12 SCIENCE CENTER.— 

13 (1) ESTABLISHMENT.—The Secretary of the In14 terior shall establish the National Climate Change 

15 and Wildlife Science Center within the United States 

16 Geological Survey. 

17 (2) FUNCTIONS.—In collaboration with Federal 

18 and State natural resources agencies and depart19 ments, Indian tribes, universities, and other partner 

20 organizations, the Center shall— 

21 (A) assess and synthesize current physical 

22 and biological knowledge; 

23 (B) prioritize scientific gaps in such knowl24 edge in order to forecast the ecological impacts 

25 of climate change, including, where applicable, 


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1 ocean acidification, drought, flooding, and wild2 fire on fish and wildlife at the ecosystem, habi3 tat, community, population, and species levels; 

4 (C) develop and improve tools to identify, 

5 evaluate, and link scientific approaches and 

6 models that forecast the impacts of climate 

7 change, including, where applicable, ocean acidi8 fication, drought, flooding, and wildfire on fish, 

9 wildlife, plants, and associated habitats, includ10 ing— 

11 (i) monitoring; 

12 (ii) predictive models; 

13 (iii) vulnerability analyses; 

14 (iv) risk assessments; and 

15 (v) decision support systems that help 

16 managers make informed decisions; 

17 (D) develop and evaluate tools to adapt18 ively manage and monitor the effects of climate 

19 change (including tools for the collection of 

20 data) on fish and wildlife on the national, re21 gional, and local level; and 

22 (E) develop capacities for sharing stand23 ardized data and the synthesis of the data de24 scribed in subparagraph (D). 

25 (f) SCIENCE ADVISORY BOARD.— 


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1 (1) ESTABLISHMENT.—Not later than 180 days 

2 after the date of enactment of this Act, the Sec3 retary of Commerce and the Secretary of the Inte4 rior shall establish and appoint the members of the 

5 Science Advisory Board. 

6 (2) MEMBERSHIP.—The Board shall be com7 prised of not fewer than 10 and not more than 20 

8 members— 

9 (A) who have expertise in fish, wildlife, 

10 plant, aquatic, and coastal and marine biology, 

11 ecology, climate change, including, where appli12 cable, ocean acidification, drought, flooding, 

13 and wildfire, and other relevant scientific dis14 ciplines; 

15 (B) who represent a balanced membership 

16 among Federal, State, tribal, and local rep17 resentatives, universities, and conservation or18 ganizations; and 

(C) at least 1 19 ⁄2 of whom are recommended 

20 by the President of the National Academy of 

21 Sciences. 

22 (3) DUTIES.—The Board shall— 

23 (A) advise the Secretary of Commerce and 

24 the Secretary of the Interior on the state of the 

25 science regarding— 


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1 (i) the ongoing and expected impacts 

2 of climate change, including, where appli3 cable, ocean acidification, drought, flood4 ing, and wildfire on natural resources; and 

5 (ii) scientific strategies and mecha6 nisms for protecting, restoring, and con7 serving natural resources so natural re8 sources become more resilient, adapt to, 

9 and withstand the ongoing and expected 

10 impacts of climate change, including, 

11 where applicable, ocean acidification, 

12 drought, flooding, and wildfire; and 

13 (B) identify and recommend priorities for 

14 ongoing research needs on the issues described 

15 in subparagraph (A). 

16 (4) COLLABORATION.—The Board shall collabo17 rate with climate change and ecosystem research en18 tities in other Federal agencies and departments. 

19 (5) AVAILABILITY TO PUBLIC.—The advice and 

20 recommendations of the Board shall be made avail21 able to the public. 


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1 SEC. 368. FEDERAL NATURAL RESOURCE AGENCY ADAPTA2 TION PLANS. 

3 (a) DEVELOPMENT.—Not later than 1 year after the 

4 date of development of the Strategy, each department or 

5 agency with representation on the Panel shall— 

6 (1) complete an adaptation plan for that de7 partment or agency that— 

8 (A) implements the Strategy and is con9 sistent with the natural resources climate 

10 change adaptation policy required by section 

11 362; 

12 (B) details the ongoing and expanding ac13 tions of the department or agency, and any 

14 changes in decisionmaking processes necessary 

15 to increase the ability of resources under the ju16 risdiction of the department or agency and, to 

17 the maximum extent practicable, resources 

18 under the jurisdiction of other departments and 

19 agencies that may be significantly affected by 

20 decisions of the department or agency, to be21 come more resilient, adapt to, and withstand 

22 the ongoing and expected impacts of climate 

23 change, including, where applicable, ocean acidi24 fication, drought, flooding, and wildfire; and 

25 (C) includes a timeline for implementation; 


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1 (2) provide opportunities for public review and 

2 comment on the adaptation plan, and in the case of 

3 a plan by the Bureau of Indian Affairs, review by 

4 Indian tribes; and 

5 (3) submit the plan to the President for ap6 proval. 

7 (b) REVIEW BY PRESIDENT AND SUBMISSION TO

8 CONGRESS.— 

9 (1) REVIEW BY PRESIDENT.—The President 

10 shall— 

11 (A) approve an adaptation plan submitted 

12 under subsection (a)(3) if the plan meets the 

13 requirements of subsection (c) and is consistent 

14 with the Strategy; and 

15 (B) decide whether to approve the plan 

16 within 60 days of submission. 

17 (2) DISAPPROVAL.—If the President dis18 approves an adaptation plan, the President shall di19 rect the department or agency to submit a revised 

20 plan within 60 days of that disapproval. 

21 (3) SUBMISSION TO CONGRESS.—Not later than 

22 30 days after the date of approval of an adaptation 

23 plan by the President, the department or agency 

24 shall submit the plan to— 


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1 (A) the Committee on Natural Resources 

2 of the House of Representatives; 

3 (B) the Committee on Energy and Natural 

4 Resources of the Senate; 

5 (C) the Committee on Environment and 

6 Public Works of the Senate; and 

7 (D) any other committees of the House of 

8 Representatives or the Senate with principal ju9 risdiction over the department or agency. 

10 (c) REQUIREMENTS.—Each adaptation plan shall— 

11 (1) establish programs for assessing the ongo12 ing and expected impacts of climate change, includ13 ing, where applicable, ocean acidification, drought, 

14 flooding, and wildfire on natural resources under the 

15 jurisdiction of the department or agency preparing 

16 the plan, including— 

17 (A) assessment of cumulative and syner18 gistic effects; and 

19 (B) programs that identify and monitor 

20 natural resources likely to be adversely affected 

21 and that have need for conservation; 

22 (2) identify and prioritize— 

23 (A) the strategies of the department or 

24 agency preparing the plan; 


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1 (B) the specific conservation actions that 

2 address the ongoing and expected impacts of 

3 climate change, including, where applicable, 

4 ocean acidification, drought, flooding, and wild5 fire on natural resources under jurisdiction of 

6 the department or agency preparing the plan; 

7 (C) strategies to protect, restore, and con8 serve such resources to become more resilient, 

9 adapt to, and better withstand those impacts, 

10 including— 

11 (i) protection, restoration, and con12 servation of terrestrial, marine, estuarine, 

13 and freshwater habitats and ecosystems; 

14 (ii) establishment of terrestrial, ma15 rine, estuarine, and freshwater habitat 

16 linkages and corridors; 

17 (iii) restoration and conservation of 

18 ecological processes; 

19 (iv) protection of a broad diversity of 

20 native species of fish, wildlife, and plant 

21 populations across the ranges of those spe22 cies; and 

23 (v) protection of fish, wildlife, and 

24 plant health, recognizing that climate can 


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1 alter the distribution and ecology of 

2 parasites, pathogens, and vectors; 

3 (3) describe how the department or agency 

4 will— 

5 (A) integrate the strategies and conserva6 tion activities into plans, programs, activities, 

7 and actions of the department or agency relat8 ing to the conservation and management of nat9 ural resources; and 

10 (B) establish new plans, programs, activi11 ties, and actions, if necessary; 

12 (4) establish methods— 

13 (A) to assess the effectiveness of strategies 

14 and conservation actions the department or 

15 agency takes to protect, restore, and conserve 

16 natural resources so natural resources become 

17 more resilient, adapt to, and withstand the on18 going and expected impacts of climate change; 

19 and 

20 (B) to update those strategies and actions 

21 to respond to new information and changing 

22 conditions; 

23 (5) describe current and proposed mechanisms 

24 to enhance cooperation and coordination of natural 

25 resources adaptation efforts with other Federal 


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1 agencies, State and local governments, Indian tribes, 

2 and nongovernmental stakeholders; 

3 (6) include written guidance to resource man4 agers that— 

5 (A) explains how managers are expected to 

6 address the ongoing and expected effects of cli7 mate change, including, where applicable, ocean 

8 acidification, drought, flooding, and wildfire; 

9 (B) identifies how managers shall obtain 

10 any necessary site-specific information; and 

11 (C) reflects best practices shared among 

12 relevant agencies, but recognizes the unique 

13 missions, objectives, and responsibilities of each 

14 agency; 

15 (7) identify and assess data and information 

16 gaps necessary to develop natural resources adapta17 tion plans and strategies; and 

18 (8) consider strategies that engage youth and 

19 young adults (including youth and young adults 

20 working in full-time or part-time youth service or 

21 conservation corps programs) to provide the youth 

22 and young adults with opportunities for meaningful 

23 conservation and community service and to encour24 age opportunities for employment in the private sec25 tor through partnerships with employers. 


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1 (d) IMPLEMENTATION.— 

2 (1) IN GENERAL.—Upon approval by the Presi3 dent, each department or agency with representation 

4 on the Panel shall, consistent with existing author5 ity, implement the adaptation plan of the depart6 ment or agency through existing and new plans, 

7 policies, programs, activities, and actions. 

8 (2) CONSIDERATION OF IMPACTS.— 

9 (A) IN GENERAL.—To the maximum ex10 tent practicable and consistent with existing au11 thority, natural resource management decisions 

12 made by the department or agency shall— 

13 (i) consider the ongoing and expected 

14 impacts of climate change, including, 

15 where applicable, ocean acidification, 

16 drought, flooding, nd wildfire on natural 

17 resources; and 

18 (ii) choose alternatives that will avoid 

19 and minimize those impacts and promote 

20 resilience. 

21 (B) GUIDANCE.—The Council on Environ22 mental Quality shall provide guidance for Fed23 eral departments and agencies considering those 

24 impacts and choosing alternatives that will 


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1 avoid and minimize those impacts and promote 

2 resilience. 

3 (e) REVISION AND REVIEW.—Not less than every 5 

4 years, each department or agency shall review and revise 

5 the adaptation plan of the department or agency to incor6 porate the best available science, and other information, 

7 regarding the ongoing and expected impacts of climate 

8 change on natural resources. 

9 SEC. 369. STATE NATURAL RESOURCES ADAPTATION 

10 PLANS. 

11 (a) REQUIREMENT.—In order to be eligible for funds 

12 under section 370, not later than 1 year after the develop13 ment of the Strategy, each State shall prepare a State nat14 ural resources adaptation plan detailing current and fu15 ture efforts of the State to address the ongoing and ex16 pected impacts of climate change on natural resources and 

17 coastal areas within the jurisdiction of the State. 

18 (b) REVIEW OR APPROVAL.— 

19 (1) IN GENERAL.—The Secretary of the Inte20 rior and, as applicable, the Secretary of Commerce 

21 shall review each State adaptation plan, and approve 

22 the plan if the plan— 

23 (A) meets the requirements of subsection 

24 (c); and 

25 (B) is consistent with the Strategy. 


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1 (2) APPROVAL OR DISAPPROVAL.—The Sec2 retary of the Interior and, as applicable, the Sec3 retary of Commerce shall approve or disapprove the 

4 plan by written notice not later than 180 days after 

5 the date of submission of the plan (or a revised 

6 plan). 

7 (3) RESUBMISSION.—Not later than 90 days 

8 after the date of resubmission of an adaptation plan 

9 that has been disapproved under paragraph (2), the 

10 Secretary of the Interior and, as applicable, the Sec11 retary of Commerce, shall approve or disapprove the 

12 plan by written notice. 

13 (c) CONTENTS.—A State natural resources adapta14 tion plan shall— 

15 (1) include strategies for addressing the ongo16 ing and expected impacts of climate change, includ17 ing, where applicable, ocean acidification, drought, 

18 flooding, and wildfire on terrestrial, marine, estua19 rine, and freshwater fish, wildlife, plants, habitats, 

20 ecosystems, wildlife health, and ecological processes 

21 that— 

22 (A) describe the ongoing and expected im23 pacts of climate change, including, where appli24 cable, ocean acidification, drought, flooding, 

25 and wildfire on the diversity and health of fish, 


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1 wildlife and plant populations, habitats, eco2 systems, and associated ecological processes; 

3 (B) establish programs for monitoring the 

4 ongoing and expected impacts of climate 

5 change, including, where applicable, ocean acidi6 fication, drought, flooding, and wildfire on fish, 

7 wildlife, and plant populations, habitats, eco8 systems, and associated ecological processes; 

9 (C) describe and prioritize proposed con10 servation actions that increase the ability of 

11 fish, wildlife, plant populations, habitats, eco12 systems, and associated ecological processes to 

13 become more resilient, adapt to, and better 

14 withstand those impacts; 

15 (D) consider strategies that engage youth 

16 and young adults (including youth and young 

17 adults working in full-time or part-time youth 

18 service or conservation corps programs) to pro19 vide the youth and young adults with opportu20 nities for meaningful conservation and commu21 nity service and to encourage opportunities for 

22 employment in the private sector through part23 nerships with employers; 


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1 (E) integrate protection and restoration of 

2 resource resilience into agency decision making 

3 and specific conservation actions; 

4 (F) include a time frame for implementing 

5 conservation actions for fish, wildlife, and plant 

6 populations, habitats, ecosystems, and associ7 ated ecological processes; 

8 (G) establish methods— 

9 (i) for assessing the effectiveness of 

10 strategies and conservation actions taken 

11 to increase the ability of fish, wildlife, and 

12 plant populations, habitats, ecosystems, 

13 and associated ecological processes to be14 come more resilient, adapt to, and better 

15 withstand the ongoing and expected im16 pacts of climate changes, including, where 

17 applicable, ocean acidification, drought, 

18 flooding, and wildfire; and 

19 (ii) for updating strategies and ac20 tions to respond appropriately to new in21 formation or changing conditions; 

22 (H) are incorporated into a revision of the 

23 State wildlife action plan (also known as the 

24 State comprehensive wildlife strategy) that has 

25 been— 


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1 (i) submitted to the United States 

2 Fish and Wildlife Service; and 

3 (ii) approved, or is pending approval, 

4 by the United States Fish and Wildlife 

5 Service; and 

6 (I) are developed— 

7 (i) with the participation of the State 

8 fish and wildlife agency, the State coastal 

9 agency, the State agency responsible for 

10 administration of Land and Water Con11 servation Fund grants, the State Forest 

12 Legacy program coordinator, and other 

13 State agencies considered appropriate by 

14 the Governor of the State; 

15 (ii) in coordination with the Secretary 

16 of the Interior, and where applicable, the 

17 Secretary of Commerce; and 

18 (iii) in coordination with other States 

19 that share jurisdiction over natural re20 sources with the State; and 

21 (2) in the case of a coastal State, include strat22 egies for addressing the ongoing and expected im23 pacts of climate change, including, where applicable, 

24 ocean acidification, drought, flooding, and wildfire 

25 on a coastal zone that— 


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1 (A) identify natural resources likely to be 

2 impacted by climate change, and describe the 

3 impacts; 

4 (B) identify and prioritize continuing re5 search and data collection needed to address 

6 the impacts, including— 

7 (i) acquisition of high-resolution 

8 coastal elevation and nearshore bathymetry 

9 data; 

10 (ii) historic shoreline position maps, 

11 erosion rates, and inventories of shoreline 

12 features and structures; 

13 (iii) measures and models of relative 

14 rates of sea level rise or lake level changes, 

15 including effects on flooding, storm surge, 

16 inundation, and coastal geological proc17 esses; 

18 (iv) measures and models of habitat 

19 loss, including projected losses of coastal 

20 wetlands and potentials for inland migra21 tion of natural shoreline habitats; 

22 (v) measures and models of ocean and 

23 coastal species and ecosystem migrations, 

24 and changes in species population dynam25 ics; 


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1 (vi) changes in storm frequency, in2 tensity, or rainfall patterns; 

3 (vii) measures and models of saltwater 

4 intrusion into coastal rivers and aquifers; 

5 (viii) changes in chemical or physical 

6 characteristics of marine and estuarine 

7 systems, including the presence, extent, 

8 and timing of hypoxic and anoxic condi9 tions; 

10 (ix) measures and models of increased 

11 harmful algal blooms; and 

12 (x) measures and models of the 

13 spread of invasive species; 

14 (C) identify and prioritize adaptation strat15 egies to protect, restore, and conserve natural 

16 resources to enable natural resources to become 

17 more resilient, adapt to, and withstand the on18 going and expected impacts of climate change, 

19 including, where applicable, ocean acidification, 

20 drought, flooding, and wildfire, including— 

21 (i) protection, maintenance, and res22 toration of ecologically important coastal 

23 lands, coastal and ocean ecosystems, and 

24 species biodiversity and the establishment 


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1 of habitat buffer zones, migration cor2 ridors, and climate refugia; and 

3 (ii) improved planning, siting policies, 

4 hazard mitigation strategies, and State 

5 property insurance programs; 

6 (D) establish programs— 

7 (i) for the long-term monitoring of the 

8 ongoing and expected impacts of climate 

9 change, including, where applicable, ocean 

10 acidification, drought, flooding, and wild11 fire on the ocean and coastal zone; and 

12 (ii) assess and adjust, when necessary, 

13 the adaptive management strategies; 

14 (E) establish performance measures that— 

15 (i) assess the effectiveness of adapta16 tion strategies intended to improve resil17 ience and the ability of natural resources 

18 to adapt to and withstand the ongoing and 

19 expected impacts of climate change, includ20 ing, where applicable, ocean acidification, 

21 drought, flooding, and wildfire; 

22 (ii) assess the effectiveness of adapta23 tion strategies intended to minimize those 

24 impacts on the coastal zone; and 


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1 (iii) update the strategies to respond 

2 to new information or changing conditions; 

3 and 

4 (F) are developed— 

5 (i) with the participation of the State 

6 coastal agency and other appropriate State 

7 agencies; and 

8 (ii) in coordination with the Secretary 

9 of Commerce and other appropriate Fed10 eral agencies. 

11 (d) PUBLIC INPUT.—In developing the adaptation 

12 plan, a State shall provide for solicitation and consider13 ation of public input and independent scientific input. 

14 (e) COORDINATION WITH OTHER PLANS.—The State 

15 adaptation plan shall review research and information 

16 and, where appropriate, integrate the goals and measures 

17 set forth in other natural resources conservation strate18 gies, including— 

19 (1) the National Fish Habitat Action Plan; 

20 (2) plans under the North American Wetlands 

21 Conservation Act (16 U.S.C. 4401 et seq.); 

22 (3) the Federal, State, and local partnership 

23 known as ‘‘Partners in Flight’’; 


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1 (4) federally approved coastal zone management 

2 plans under the Coastal Zone Management Act of 

3 1972 (16 U.S.C. 1451 et seq.); 

4 (5) federally approved regional fishery manage5 ment plants and habitat conservation activities 

6 under the Magnuson-Stevens Fishery Conservation 

7 and Management Act (16 U.S.C. 1801 et seq.); 

8 (6) the National Coral Reef Action Plan; 

9 (7) recovery plans for threatened species and 

10 endangered species under section 4(f) of the Endan11 gered Species Act of 1973 (16 U.S.C. 1533(f)); 

12 (8) habitat conservation plans under section 10 

13 of that Act (16 U.S.C. 1539); 

14 (9) other Federal, State, and tribal plans for 

15 imperiled species; 

16 (10) State or tribal hazard mitigation plans; 

17 (11) State or tribal water management plans; 

18 (12) State property insurance programs; and 

19 (13) other State-based strategies that com20 prehensively implement adaptation activities to re21 mediate the ongoing and expected effects of climate 

22 change, including, where applicable, ocean acidifica23 tion, drought, flooding, and wildfire, on terrestrial, 

24 marine, and freshwater fish, wildlife, plants, and 

25 other natural resources. 


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1 (f) UPDATING.—Each State plan shall be updated at 

2 least every 5 years. 

3 (g) FUNDING.— 

4 (1) IN GENERAL.—Funds allocated to States 

5 under section 370 shall be used only for activities 

6 consistent with a State natural resources adaptation 

7 plan approved by the Secretary of the Interior and, 

8 as appropriate, the Secretary of Commerce. 

9 (2) FUNDING PRIOR TO THE APPROVAL OF A

10 STATE PLAN.—Until the earlier of the date that is 

11 3 years after the date of enactment of this Act or 

12 the date on which a State adaptation plan is ap13 proved, a State shall be eligible to receive funding 

14 under section 370 for adaptation activities that 

15 are— 

16 (A) consistent with the comprehensive 

17 wildlife strategy of the State and, where appro18 priate, other natural resources conservation 

19 strategies; and 

20 (B) in accordance with a work plan devel21 oped in coordination with— 

22 (i) the Secretary of the Interior; and 

23 (ii) the Secretary of Commerce. 

24 (3) COASTAL STATE.—In developing a work 

25 plan under paragraph (2)(B), a coastal State shall 


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1 coordinate with the Secretary of Commerce only for 

2 those portions of the strategy relating to activities 

3 affecting the coastal zone. 

4 (4) PENDING APPROVAL.—During the period 

5 for which approval by the applicable Secretary is 

6 pending, the State may continue to receive funds 

7 under section 370 pursuant to the work plan de8 scribed in paragraph (2)(B). 

9 SEC. 370. NATURAL RESOURCES CLIMATE CHANGE ADAP10 TATION ACCOUNT. 

11 (a) DISTRIBUTION OF AMOUNTS.— 

12 (1) STATES.—Of the amounts made available 

13 for each fiscal year to carry out this subpart, 38.5 

14 percent shall be provided to States to carry out nat15 ural resources adaptation activities in accordance 

16 with adaptation plans approved under section 369, 

17 and shall be distributed as follows: 

18 (A) 32.5 percent shall be available to State 

19 wildlife agencies in accordance with the appor20 tionment formula established under the second 

21 subsection (c) (relating to the apportionment of 

22 the Wildlife Conservation and Restoration Ac23 count) of section 4 of the Pittman-Robertson 

24 Wildlife Restoration Act (16 U.S.C. 669c); and 


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1 (B) 6 percent shall be available to State 

2 coastal agencies pursuant to the formula estab3 lished by the Secretary of Commerce under sec4 tion 306(c) of the Coastal Management Act of 

5 1972 (16 U.S.C. 1455(c)). 

6 (2) NATURAL RESOURCE ADAPTATION.—Of the 

7 amounts made available for each fiscal year to carry 

8 out this subpart— 

9 (A) 17 percent shall be allocated to the 

10 Secretary of the Interior for use in funding— 

11 (i) natural resources adaptation activi12 ties carried out— 

13 (I) under endangered species, mi14 gratory species, and other fish and 

15 wildlife programs administered by the 

16 National Park Service, the United 

17 States Fish and Wildlife Service, the 

18 Bureau of Indian Affairs, and the Bu19 reau of Land Management; 

20 (II) on wildlife refuges, National 

21 Park Service land, and other public 

22 land under the jurisdiction of the 

23 United States Fish and Wildlife Serv24 ice, the Bureau of Land Management, 


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1 the Bureau of Indian Affairs, or the 

2 National Park Service; and 

3 (III) within Federal water man4 aged by the Bureau of Reclamation 

5 and the National Park Service; and 

6 (ii) the implementation of the Na7 tional Fish and Wildlife Habitat and Cor8 ridors Information Program required by 

9 section 371; 

10 (B) 5 percent shall be allocated to the Sec11 retary of the Interior for natural resources ad12 aptation activities carried out under cooperative 

13 grant programs, including— 

14 (i) the cooperative endangered species 

15 conservation fund authorized under section 

16 6 of the Endangered Species Act of 1973 

17 (16 U.S.C. 1535); 

18 (ii) programs under the North Amer19 ican Wetlands Conservation Act (16 

20 U.S.C. 4401 et seq.); 

21 (iii) the Neotropical Migratory Bird 

22 Conservation Fund established by section 

23 9(a) of the Neotropical Migratory Bird 

24 Conservation Act (16 U.S.C. 6108(a)); 


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1 (iv) the Coastal Program of the 

2 United States Fish and Wildlife Service; 

3 (v) the National Fish Habitat Action 

4 Plan; 

5 (vi) the Partners for Fish and Wildlife 

6 Program; 

7 (vii) the Landowner Incentive Pro8 gram; 

9 (viii) the Wildlife Without Borders 

10 Program of the United States Fish and 

11 Wildlife Service; and 

12 (ix) the Migratory Species Program 

13 and Park Flight Migratory Bird Program 

14 of the National Park Service; and 

15 (C) 3 percent shall be allocated to the Sec16 retary of the Interior to provide financial assist17 ance to Indian tribes to carry out natural re18 sources adaptation activities through the Tribal 

19 Wildlife Grants Program of the United States 

20 Fish and Wildlife Service. 

21 (3) LAND AND WATER CONSERVATION.— 

22 (A) DEPOSITS.— 

23 (i) IN GENERAL.—Of the amounts 

24 made available for each fiscal year to carry 

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1 posited in the Land and Water Conserva2 tion Fund established under section 2 of 

3 the Land and Water Conservation Fund 

4 Act of 1965 (16 U.S.C. 460l–5). 

5 (ii) USE OF DEPOSITS.—Deposits in 

6 the Land and Water Conservation Fund 

7 under this paragraph shall— 

8 (I) be supplemental to authoriza9 tions provided under section 3 of the 

10 Land and Water Conservation Fund 

11 Act of 1965 (16 U.S.C. 460l–6), 

12 which shall remain available for non13 adaptation needs; and 

14 (II) be available to carry out this 

15 subpart without further appropriation 

16 or fiscal year limitation. 

17 (B) DISTRIBUTION OF AMOUNTS.—Of the 

18 amounts deposited under this paragraph in the 

19 Land and Water Conservation Fund— 

20 (i) for the purposes of carrying out 

21 the natural resources adaptation activities 

22 through the acquisition of land and inter23 ests in land under section 6 of the Land 

24 and Water Conservation Fund Act of 1965 

(16 U.S.C. 460l–8), 1 25 ⁄6 shall be allocated 


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1 to the Secretary of the Interior and made 

2 available on a competitive basis— 

3 (I) to States, in accordance with 

4 the natural resources adaptation plans 

5 of States, and to Indian tribes; 

6 (II) notwithstanding section 5 of 

7 that Act (16 U.S.C. 460l–7); and 

8 (III) in addition to any funds 

9 provided pursuant to annual appro10 priations Acts, the Energy Policy Act 

11 of 2005 (42 U.S.C. 15801 et seq.), or 

12 any other authorization for non13 adaptation needs; 

(ii) 1 14 ⁄3 shall be allocated to the Sec15 retary of the Interior to carry out natural 

16 resources adaptation activities through the 

17 acquisition of lands and interests in land 

18 under section 7 of the Land and Water 

19 Conservation Fund Act of 1965 (16 U.S.C. 

20 460l–9); 

(iii) 1 21 ⁄6 shall be allocated to the Sec22 retary of Agriculture and made available to 

23 the States and Indian tribes to carry out 

24 natural resources adaptation activities 

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1 ests in land under section 7 of the Cooper2 ative Forestry Assistance Act of 1978 (16 

3 U.S.C. 2103c); and 

(iv) 1 4 ⁄3 shall be allocated to the Sec5 retary of Agriculture to carry out natural 

6 resources adaptation activities through the 

7 acquisition of land and interests in land 

8 under section 7 of the Land and Water 

9 Conservation Fund Act of 1965 (16 U.S.C. 

10 460l–9). 

11 (C) EXPENDITURE OF FUNDS.—In allo12 cating funds under subparagraph (B), the Sec13 retary of the Interior and the Secretary of Agri14 culture shall take into consideration factors in15 cluding— 

16 (i) the availability of non-Federal con17 tributions from State, local, or private 

18 sources; 

19 (ii) opportunities to protect fish and 

20 wildlife corridors or otherwise to link or 

21 consolidate fragmented habitats; 

22 (iii) opportunities to reduce the risk of 

23 catastrophic wildfires, drought, extreme 

24 flooding, or other climate-related events 


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1 that are harmful to fish and wildlife and 

2 people; and 

3 (iv) the potential for conservation of 

4 species or habitat types at serious risk due 

5 to climate change, including, where appli6 cable, ocean acidification, drought, flood7 ing, and wildfire, or other stressors. 

8 (4) NATIONAL FOREST AND GRASSLAND ADAP9 TATION.—Of the amounts made available for each 

10 fiscal year to carry out this subpart, 5 percent shall 

11 be allocated to the Forest Service, through the Sec12 retary of Agriculture— 

13 (A) to fund natural resources adaptation 

14 activities carried out in national forests and na15 tional grasslands under the jurisdiction of the 

16 Forest Service; and 

17 (B) to carry out natural resource adapta18 tion activities on State and private forest land 

19 carried out under the Cooperative Forestry As20 sistance Act of 1978 (16 U.S.C. 2101 et seq.). 

21 (5) COASTAL AND MARINE SYSTEM ADAPTA22 TION.—Of the amounts made available for each fis23 cal year to carry out this subpart, 7 percent shall be 

24 allocated to the Secretary of Commerce to fund nat25 ural resources adaptation activities that protect, 


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1 maintain, and restore coastal, estuarine, and marine 

2 resources, habitats, and ecosystems, including such 

3 activities carried out under— 

4 (A) the coastal and estuarine land con5 servation program administered by the National 

6 Oceanic and Atmospheric Administration; 

7 (B) the community-based restoration pro8 gram for fishery and coastal habitats estab9 lished under section 117 of the Magnuson-Ste10 vens Fishery Conservation and Management 

11 Reauthorization Act of 2006 (16 U.S.C. 

12 1891a); 

13 (C) the Coastal Zone Management Act of 

14 1972 (16 U.S.C. 1451 et seq.) that are specifi15 cally designed to strengthen the ability of coast16 al, estuarine, and marine resources, habitats, 

17 and ecosystems to adapt to and withstand the 

18 ongoing and expected impacts of climate 

19 change, including, where applicable, ocean acidi20 fication, drought, flooding, and wildfire; 

21 (D) the Open Rivers Initiative; 

22 (E) the Magnuson-Stevens Fishery Con23 servation and Management Act (16 U.S.C. 

24 1801 et seq.); 


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1 (F) the Marine Mammal Protection Act of 

2 1972 (16 U.S.C. 1361 et seq.); 

3 (G) the Endangered Species Act of 1973 

4 (16 U.S.C. 1531 et seq.); 

5 (H) the Marine Protection, Research, and 

6 Sanctuaries Act of 1972 (33 U.S.C. 1401 et 

7 seq.); 

8 (I) the Coral Reef Conservation Act of 

9 2000 (16 U.S.C. 6401 et seq.); and 

10 (J) the Estuary Restoration Act of 2000 

11 (33 U.S.C. 2901 et seq.). 

12 (6) ESTUARINE AND FRESHWATER ECOSYSTEM

13 ADAPTATION.—Of the amounts made available for 

14 each fiscal year to carry out this subpart, 7.5 per15 cent shall be allocated to the Administrator of the 

16 Environmental Protection Agency and 5 percent 

17 shall be available to the Secretary of the Army for 

18 use by the Corps of Engineers for use in natural re19 sources adaptation activities restoring and pro20 tecting— 

21 (A) large-scale freshwater aquatic eco22 systems, such as the Everglades, the Great 

23 Lakes, Flathead Lake, the Missouri River, the 

24 Mississippi River, the Colorado River, the Sac25 ramento-San Joaquin Rivers, the Ohio River, 


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1 the Columbia-Snake River System, the Apa2 lachicola, Chattahoochee, and Flint River Sys3 tem, the Connecticut River, and the Yellowstone 

4 River; 

5 (B) large-scale estuarine ecosystems, such 

6 as Chesapeake Bay, Long Island Sound, Puget 

7 Sound, the Mississippi River Delta, the San 

8 Francisco Bay Delta, Narragansett Bay, and 

9 Albemarle-Pamlico Sound; 

10 (C) freshwater and estuarine ecosystems, 

11 watersheds, and basins identified and 

12 prioritized by the Administrator of the Environ13 mental Protection Agency or the Corps of Engi14 neers, working in cooperation with other Fed15 eral agencies, States, tribal governments, local 

16 governments, scientists, and other conservation 

17 partners; and 

18 (D)(i) habitats and ecosystems through es19 tuary habitat restoration projects authorized by 

20 the Estuary Restoration Act of 2000 (33 

21 U.S.C. 2901 et seq.); 

22 (ii) project modifications for improvement 

23 of the environment; 

24 (iii) aquatic restoration and protection 

25 projects authorized by section 206 of the Water 


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1 Resources Development Act of 1996 (33 U.S.C. 

2 2330); and 

3 (iv) other appropriate programs and activi4 ties. 

5 (b) USE OF FUNDS BY FEDERAL DEPARTMENTS AND

6 AGENCIES.—Funds allocated to Federal departments and 

7 agencies under this section shall only be used for natural 

8 resources adaptation activities consistent with an adapta9 tion plan approved under section 368. 

10 (c) STATE COST-SHARING.—Notwithstanding any 

11 other provision of law, a State that receives a grant under 

12 this section shall use funds from non-Federal sources to 

13 pay 10 percent of the costs of each activity carried out 

14 under the grant. 

15 SEC. 371. NATIONAL FISH AND WILDLIFE HABITAT AND 

16 CORRIDORS INFORMATION PROGRAM. 

17 (a) DEFINITIONS.—In this section: 

18 (1) GEOSPATIAL INTEROPERABILITY FRAME19 WORK.—The term ‘‘Geospatial Interoperability 

20 Framework’’ means the strategy used by the Na21 tional Biological Information Infrastructure (based 

22 on accepted standards, specifications, and protocols 

23 adopted through the International Standards Orga24 nization, the Open Geospatial Consortium, and the 

25 Federal Geographic Data Committee) to manage, arVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00352 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 chive, integrate, analyze, and make geospatial and 

2 biological data and metadata accessible. 

3 (2) PROGRAM.—The term ‘‘Program’’ means 

4 the National Fish and Wildlife Habitat and Cor5 ridors Information Program established under sub6 section (b). 

7 (3) SECRETARY.—The term ‘‘Secretary’’ means 

8 the Secretary of the Interior. 

9 (4) SYSTEM.—The term ‘‘System’’ means the 

10 Habitat and Corridors Information System estab11 lished under subsection (d)(1). 

12 (b) ESTABLISHMENT.—Not later than 180 days after 

13 the date of enactment of this Act, the Secretary, in co14 operation with the States and Indian tribes, shall establish 

15 a National Fish and Wildlife Habitat and Corridors Infor16 mation Program. 

17 (c) PURPOSE.—The purposes of the Program are— 

18 (1) to support States and Indian tribes in devel19 oping geographical information system databases of 

20 fish and wildlife habitats and corridors that— 

21 (A) inform planning and development deci22 sions within each State; 

23 (B) enable each State to model climate im24 pacts and adaptation; and 


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1 (C) provide geographically specific en2 hancements of State wildlife action plans; 

3 (2) to ensure the collaborative development of a 

4 comprehensive national geographic information sys5 tem database of maps, models, data, surveys, infor6 mational products, and other geospatial information 

7 regarding fish and wildlife habitat and corridors 

8 that— 

9 (A) is based on consistent protocols for 

10 sampling and mapping across landscapes; 

11 (B) takes into account regional differences; 

12 and 

13 (C) uses— 

14 (i) existing and planned State- and 

15 tribal-based geographical information sys16 tem databases; and 

17 (ii) existing databases, analytical 

18 tools, metadata activities, and other infor19 mation products available through the Na20 tional Biological Information Infrastruc21 ture maintained by the Secretary and non22 governmental organizations; and 

23 (3) to facilitate the use of those databases by 

24 Federal, State, local, and tribal decisionmakers to 

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1 life habitats and corridors at the earliest practicable 

2 stage for use in— 

3 (A) prioritizing and targeting natural re4 sources adaptation strategies and activities; 

5 (B) avoiding, minimizing, and mitigating 

6 the impacts on fish and wildlife habitat and cor7 ridors when locating energy development, water, 

8 transmission, transportation, and other land 

9 use projects; 

10 (C) assessing the impacts of existing devel11 opment on habitats and corridors; and 

12 (D) developing management strategies that 

13 enhance the ability of fish, wildlife, and plant 

14 species to migrate or respond to shifting habi15 tats within existing habitats and corridors. 

16 (d) HABITAT AND CORRIDORS INFORMATION SYS17 TEM.— 

18 (1) IN GENERAL.—The Secretary, in coopera19 tion with States and Indian tribes, shall establish a 

20 Habitat and Corridors Information System. 

21 (2) CONTENTS.—The System shall— 

22 (A) include maps, data, and descriptions of 

23 fish and wildlife habitat and corridors that— 

24 (i) have been developed by Federal 

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1 ural heritage programs, Indian tribes, local 

2 governments, nongovernmental organiza3 tions, and industry; and 

4 (ii) meet accepted geospatial inter5 operability framework data and metadata 

6 protocols and standards; 

7 (B) include maps and descriptions of pro8 jected shifts in habitats and corridors of fish 

9 and wildlife species in response to climate 

10 change; 

11 (C) ensure data quality; 

12 (D) at scales useful to decisionmakers, 

13 make data, models, and analyses included in 

14 the System available— 

15 (i) to prioritize and target natural re16 sources adaptation strategies and activi17 ties; 

18 (ii) to assess the impacts of existing 

19 development on habitats and corridors; 

20 (iii) to assess the impacts of proposed 

21 energy development, water, transmission, 

22 transportation, and other land use projects 

23 and to avoid, minimize, or mitigate those 

24 impacts on habitats and corridors; and 


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1 (iv) to develop management strategies 

2 that enhance the ability of fish, wildlife, 

3 and plant species to migrate or respond to 

4 shifting habitats within existing habitats 

5 and corridors; 

6 (E) update maps and other information as 

7 landscapes, habitats, corridors, and wildlife pop8 ulations change, or as new information becomes 

9 available; 

10 (F) encourage development of collaborative 

11 plans by Federal and State agencies and Indian 

12 tribes that monitor and evaluate the ability of 

13 the System to meet the needs of decision14 makers; 

15 (G) identify gaps in habitat and corridor 

16 information, mapping, and research needed to 

17 fully assess current data and metadata; 

18 (H) prioritize research and future data col19 lection activities for use in updating the System 

20 and provide support for those activities; 

21 (I) include mechanisms to support collabo22 rative research, mapping, and planning of habi23 tats and corridors by Federal and State agen24 cies, Indian tribes, and other interested stake25 holders; 


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1 (J) incorporate biological and geospatial 

2 data on species and corridors found in energy 

3 development and transmission plans, including 

4 renewable energy initiatives, transportation, and 

5 other land use plans; 

6 (K) identify, prioritize, and describe key 

7 parcels of non-Federal land that— 

8 (i) are located within units of the Na9 tional Park System, National Wildlife Ref10 uge System, National Forest System, or 

11 National Grassland System; and 

12 (ii) are critical to maintenance of 

13 wildlife habitat and migration corridors; 

14 and 

15 (L) be based on the best scientific informa16 tion available. 

17 (e) 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 (f) COORDINATION.—In cooperation with States and 

23 Indian tribes, the Secretary shall recommend how the in24 formation in the System may be incorporated into relevant 


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1 State and Federal plans that affect fish and wildlife, in2 cluding— 

3 (1) land management plans; 

4 (2) the State Comprehensive Wildlife Conserva5 tion Strategies; and 

6 (3) appropriate tribal conservation plans. 

7 (g) PURPOSE OF INCORPORATION.—The Secretary 

8 shall make the recommendations required by subsection 

9 (f) to ensure that relevant State and Federal plans that 

10 affect fish and wildlife— 

11 (1) prevent unnecessary habitat fragmentation 

12 and disruption of corridors; 

13 (2) promote the landscape connectivity nec14 essary to allow wildlife to move as necessary to meet 

15 biological needs, adjust to shifts in habitat, and 

16 adapt to climate change; and 

17 (3) minimize the impacts of energy, develop18 ment, water, transportation, and transmission 

19 projects and other activities expected to impact habi20 tat and corridors. 

21 SEC. 372. ADDITIONAL PROVISIONS REGARDING INDIAN 

22 TRIBES. 

23 (a) FEDERAL TRUST RESPONSIBILITY.—Nothing in 

24 this subpart amends, alters, or gives priority over the Fed25 eral trust responsibility to any Indian tribe. 


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1 (b) EXEMPTION FROM FOIA.—If a Federal depart2 ment or agency receives any information relating to sacred 

3 sites or cultural activities identified by an Indian tribe as 

4 confidential, such information shall be exempt from disclo5 sure under section 552 of title 5, United States Code 

6 (commonly referred to as the Freedom of Information 

7 Act). 

8 (c) APPLICATION OF OTHER LAW.—The Secretary of 

9 the Interior may apply the provisions of the Indian Self10 Determination and Education Assistance Act (25 U.S.C. 

11 450 et seq.) in the implementation of this subpart. 

12 Subpart D—Additional Climate Change Adaptation 

13 Programs 

14 SEC. 381. WATER SYSTEM MITIGATION AND ADAPTION 

15 PARTNERSHIPS. 

16 (a) DEFINITIONS.—In this section: 

17 (1) OWNER OR OPERATOR.— 

18 (A) IN GENERAL.—The term ‘‘owner or 

19 operator’’ means a person (including a regional, 

20 local, municipal, or private entity) that owns or 

21 operates a water system. 

22 (B) INCLUSION.—The term ‘‘owner or op23 erator’’ includes— 


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1 (i) a non-Federal entity that has oper2 ational responsibilities for a federally or 

3 State owned water system; and 

4 (ii) an entity formed pursuant to any 

5 State’s joint exercise of powers statutes 

6 that includes one or more of the entities in 

7 paragraph (A). 

8 (2) WATER SYSTEM.—The term ‘‘water sys9 tem’’ means— 

10 (A) a community water system (as defined 

11 in section 1401 of the Safe Drinking Water Act 

12 (42 U.S.C. 300f)); 

13 (B) a treatment works (as defined in sec14 tion 212 of the Federal Water Pollution Control 

15 Act (33 U.S.C. 1292)), including a municipal 

16 separate storm sewer system; 

17 (C) a decentralized wastewater treatment 

18 system for domestic sewage; 

19 (D) a groundwater storage and replenish20 ment system; or 

21 (E) a system for transport and delivery of 

22 water for irrigation or conservation. 

23 (b) ESTABLISHMENT.—The Administrator shall es24 tablish a water system mitigation and adaptation partnerVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00361 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 ship program to provide funds to States for water system 

2 adaptation projects. 

3 (c) GRANTS.—Beginning in fiscal year 2010, each 

4 State receiving funds pursuant to this section shall make 

5 grants to owners or operators of water systems to address 

6 any ongoing or forecasted (based on the best available re7 search and data) climate-related impact on the water qual8 ity, water supply or reliability of a region of the United 

9 States, for the purposes of mitigating or adapting to the 

10 impacts of climate change. 

11 (d) ELIGIBLE USES.—The funds made available to 

12 each State pursuant to this section shall be used exclu13 sively to assist in the planning, design, construction, im14 plementation, or operation or maintenance of any program 

15 or project to respond or increase the resilience of a water 

16 system to climate change by— 

17 (1) conserving water or enhancing water use ef18 ficiency, including through the use of water metering 

19 and electronic sensing and control systems to meas20 ure the effectiveness of a water efficiency program; 

21 (2) modifying or relocating existing water sys22 tem infrastructure made or projected to be signifi23 cantly impaired by climate change impacts; 

24 (3) preserving or improving water quality, in25 cluding through measures to manage, reduce, treat, 


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1 or reuse municipal stormwater, wastewater, or 

2 drinking water; 

3 (4) investigating, designing, or constructing 

4 groundwater remediation, recycled water, or desali5 nation facilities or systems to serve existing commu6 nities; 

7 (5) enhancing water management by increasing 

8 watershed preservation and protection, such as 

9 through the use of natural or engineered green in10 frastructure in the management, conveyance, or 

11 treatment of water, wastewater, or stormwater; 

12 (6) enhancing energy efficiency or the use and 

13 generation of renewable energy in the management, 

14 conveyance, or treatment of water, wastewater, or 

15 stormwater; 

16 (7) supporting the adoption and use of ad17 vanced water treatment, water supply management 

18 (such as reservoir reoperation and water banking), 

19 or water demand management technologies, projects, 

20 or processes (such as water reuse and recycling, 

21 adaptive conservation pricing, and groundwater 

22 banking) that maintain or increase water supply or 

23 improve water quality; 

24 (8) modifying or replacing existing systems or 

25 constructing new systems for existing communities 


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1 or land currently in agricultural production to im2 prove water supply, reliability, storage, or convey3 ance in a manner that— 

4 (A) promotes conservation or improves the 

5 efficiency of utilization of available water sup6 plies; and 

7 (B) does not further exacerbate stresses on 

8 ecosystems or cause redirected impacts by de9 grading water quality or increasing net green10 house gas emissions; 

11 (9) supporting practices and projects, such as 

12 improved irrigation systems, water banking and 

13 other forms of water transactions, groundwater re14 charge, stormwater capture, groundwater conjunc15 tive use, and reuse or recycling of drainage water, 

16 to improve water quality or promote more efficient 

17 water use on land currently in agricultural produc18 tion; or 

19 (10) conducting and completing studies or as20 sessments to project how climate change may impact 

21 the future operations and sustainability of water sys22 tems. 

23 (e) APPLICATION.—To be eligible to receive a grant 

24 from the State under this section, the owner or operator 


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1 of a water system shall submit to the State an application 

2 that— 

3 (1) includes a proposal of the program, strat4 egy, or infrastructure improvement to be planned, 

5 designed, constructed, implemented, or maintained 

6 by the water system; 

7 (2) cites the best available research or data that 

8 demonstrate— 

9 (A) the risk to the water resources or in10 frastructure of the water system as a result of 

11 ongoing or forecasted changes to the 

12 hydrological system brought about by factors 

13 arising from climate change, including rising 

14 sea levels and changes in precipitation levels; 

15 and 

16 (B) how the proposed program, strategy, 

17 or infrastructure improvement would perform 

18 under the anticipated climate conditions; and 

19 (3) explains how the proposed program, strat20 egy, or infrastructure improvement is expected to 

21 enhance the resiliency of the water system, including 

22 source water protection for community water sys23 tems, to these risks or reduce the direct or indirect 

24 greenhouse gas emissions of the water system. 

25 (f) COMPETITIVE PROCESS.— 


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1 (1) IN GENERAL.—Each calendar year, each 

2 State shall conduct a competitive process to select 

3 and fund applications under this section. 

4 (2) PRIORITY REQUIREMENTS AND

5 WEIGHTING.—In carrying out the process, the 

6 States shall— 

7 (A) prioritize funding of applications that 

8 are submitted by the owners or operators of 

9 water systems that are, based on the best avail10 able research and data, at the greatest and 

11 most immediate risk of facing significant cli12 mate-related negative impacts on water quality 

13 or quantity; and 

14 (B) in selecting among the priority applica15 tions determined under subparagraph (A), en16 sure that, to the maximum extent practicable, 

17 the final list of applications funded for each 

18 year includes a substantial number meeting one 

19 or more of each of the following goals— 

20 (i) promote more efficient water use, 

21 water conservation, water reuse, or recy22 cling; 

23 (ii) use decentralized, low-impact de24 velopment technologies and nonstructural 

25 approaches, including practices that use, 


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1 enhance, or mimic the natural hydrological 

2 cycle or protect natural flows; 

3 (iii) reduce stormwater runoff by pro4 tecting or enhancing natural ecosystem 

5 functions; 

6 (iv) modify, upgrade, enhance, or re7 place existing water system infrastructure 

8 in response to ongoing or forecasted cli9 mate-related impacts; 

10 (v) promote the sustainability and re11 liability of water supplies used for agricul12 tural purposes; 

13 (vi) improve water quality or quantity 

14 for agricultural and municipal uses, includ15 ing through salinity reduction; and 

16 (vii) provide multiple benefits, includ17 ing to water supply enhancement or de18 mand reduction, water quality protection 

19 or improvement, increased flood protection, 

20 and ecosystem protection or improvement; 

21 and 

22 (C) provide for solicitation and consider23 ation of public input in the development of cri24 teria used in evaluating applications. 

25 (g) COST-SHARING.— 


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1 (1) FEDERAL SHARE.—The share of the cost of 

2 any program, strategy, or infrastructure improve3 ment that is the subject of a grant awarded by a 

4 State to the owner or operator of a water system 

5 under subsection (c) paid through funds distributed 

6 under this section shall not exceed 50 percent of the 

7 cost of the program, strategy, and infrastructure im8 provement. 

9 (2) CALCULATION OF NON-FEDERAL SHARE.— 

10 In calculating the non-Federal share of the cost of 

11 a program, strategy, or infrastructure improvement 

12 proposed by a water system through an application 

13 submitted by the water system under subsection (e), 

14 the State shall— 

15 (A) include the value of any in-kind serv16 ices that are integral to the completion of the 

17 program, strategy, or infrastructure improve18 ment, including reasonable administrative and 

19 overhead costs; and 

20 (B) not include any other amount that the 

21 water system receives from a Federal agency. 

22 (h) LABOR STANDARDS.— 

23 (1) IN GENERAL.—Other than with respect to 

24 employees of State and local agencies, or other pub25 lic entities, all laborers and mechanics employed on 


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1 infrastructure improvements funded directly by or 

2 assisted in whole or in part by this section shall be 

3 paid wages at rates not less than those prevailing for 

4 the same type of work on similar construction in the 

5 immediate locality, as determined by the Secretary 

6 of Labor in accordance with subchapter IV of chap7 ter 31 of part A of subtitle II of title 40, United 

8 States Code. 

9 (2) AUTHORITY AND FUNCTIONS.—With re10 spect to the labor standards in this subsection, the 

11 Secretary of Labor shall have the authority and 

12 functions set forth in Reorganization Plan Num13 bered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) 

14 and section 3145 of title 40, United States Code. 

15 SEC. 382. FLOOD CONTROL, PROTECTION, PREVENTION, 

16 AND RESPONSE. 

17 (a) ESTABLISHMENT.—The Administrator shall es18 tablish a Flood Control, Protection, Prevention and Re19 sponse Program to provide funds to States for flood con20 trol, protection, prevention and response projects. 

21 (b) ELIGIBLE USES.— 

22 (1) IN GENERAL.—States receiving funding 

23 pursuant to this section may use such funding on 

24 flood control, protection, prevention and response 

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1 pacts of climate change in accordance with this sec2 tion. 

3 (2) OBJECTIVES.—Such projects and activities 

4 shall seek to mitigate or adapt to the destructive im5 pacts of climate related increases in the duration, 

6 frequency, or magnitude of rainfall or runoff, includ7 ing snowmelt runoff, as well as hurricanes, including 

8 projects and programs that— 

9 (A) reduce flood damage, risk, and vulner10 ability; 

11 (B) identify, maintain and restore eco12 systems and natural barriers integral to flood 

13 control, protection, prevention and response; 

14 (C) update the available data, technologies, 

15 and scientific knowledge used in estimating, 

16 identifying and mitigating flood hazards; 

17 (D) highlight, update and remediate 

18 vulnerabilities in emergency response; 

19 (E) incorporate risk analysis and a risk-re20 duction approach to flood-related investments; 

21 (F) incorporate and identify changes in 

22 risk due to processes such as land loss, subsid23 ence, sea-level rise, reduced natural buffers, 

24 urban development and infrastructure aging; 

25 and 


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1 (G) identify and incorporate innovative ap2 proaches to land use management, water re3 source planning, and ecosystem restoration. 

4 (3) PRIORITY.—Priority in projects to reduce 

5 flood events shall be given to those projects that di6 rectly assist local governments and communities in 

7 flood control, protection, prevention and response ac8 tivities. 

9 SEC. 383. WILDFIRE. 

10 (a) FINDINGS.—Congress finds that— 

11 (1) since 1980, wildfires in the United States 

12 have burned almost twice as many acres per year on 

13 average than the average burned acreage during the 

14 period beginning on January 1, 1920, and ending on 

15 December 31, 1979; 

16 (2) the wildfire season in the western United 

17 States has increased by an average of 78 days dur18 ing the 30-year period preceding the date of enact19 ment of this Act; 

20 (3) researchers predict that the area subject to 

21 wildfire damage will increase during the 21st cen22 tury by up to 118 percent as a result of climate 

23 change; 


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1 (4) of the annual budget of the Forest Service, 

2 the Forest Service used for wildfire suppression ac3 tivities— 

4 (A) 13 percent in 1991; and 

5 (B) 45 percent in 2007; and 

6 (5) 1 percent of the largest escaped fires— 

7 (A) burn 95 percent of all burned acres; 

8 and 

9 (B) consume 85 percent of all wildfire 

10 fighting costs. 

11 (b) PURPOSE.—The purpose of this section is to au12 thorize a program to reduce the risk of wildfires in fire13 ready communities. 

14 (c) DEFINITIONS.—In this section: 

15 (1) FIRE-READY COMMUNITY.—The term ‘‘fire16 ready community’’ means a community that— 

17 (A) is located within a priority area identi18 fied pursuant to subsection (d); 

19 (B) has a cooperative fire agreement that 

20 articulates the roles and responsibilities for 

21 Federal, State and local government entities in 

22 local wildfire suppression and protection; 

23 (C) has local codes that require fire-resist24 ant home design and building materials; 


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1 (D) has a community wildfire protection 

2 plan (as defined in section 101 of the Healthy 

3 Forests Restoration Act of 2003 (16 U.S.C. 

4 6502)); and 

5 (E) is engaged in a successful collaborative 

6 process that includes multiple interested per7 sons representing diverse interests and is trans8 parent and nonexclusive, such as a resource ad9 visory committee established under section 205 

10 of the Secure Rural Schools and Community 

11 Self-Determination Act of 2000 (Public Law 

12 106–393; 16 U.S.C. 500 note). 

13 (2) SECRETARIES.—The term ‘‘Secretaries’’ 

14 means the Secretary of Agriculture and the Sec15 retary of the Interior. 

16 (d) FIRE RISK MAPPING.—As soon as is practicable 

17 after the date of the enactment of this Act, the Secretaries 

18 shall develop regional maps of communities most at risk 

19 of wildfire and in need of hazardous fuel treatment and 

20 maintenance. The maps shall identify priority areas for 

21 hazardous fuels reduction projects, including— 

22 (1) at-risk communities in fire-prone areas of 

23 the wildland-urban interface (as defined in section 

24 101 of the Healthy Forests Restoration Act of 2003 

25 (16 U.S.C. 6502)); 


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1 (2) watersheds and municipal drinking water 

2 sources; 

3 (3) emergency evacuation corridors; 

4 (4) electricity transmission corridors; 

5 (5) low-capacity or low-income communities; 

6 and 

7 (6) communities in fire-prone areas due to the 

8 impact of pest infestation on forest resources. 

9 (e) LOCAL WILDLAND FIREFIGHTING CAPABILITY

10 GRANTS.— 

11 (1) GRANTS AVAILABLE.—The Secretaries may 

12 provide cost-share grants to fire-ready communities 

13 to assist such communities in carrying out activities 

14 authorized by paragraph (2). 

15 (2) ELIGIBLE ACTIVITIES.—Grant funds may 

16 be used for the following: 

17 (A) Education programs to raise aware18 ness of homeowners and citizens about wildland 

19 fire protection practices, including FireWise or 

20 similar programs. 

21 (B) Training programs for local fire22 fighters on wildland firefighting techniques and 

23 approaches. 

24 (C) Equipment acquisition to facilitate 

25 wildland fire preparedness. 


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1 (D) Implementation of a community wild2 fire protection plan. 

3 (E) Forest restoration that accomplishes 

4 fuels reduction. 

5 (f) WILDLAND FIRE COST-SHARE AGREEMENTS.— 

6 In developing any wildland fire cost-share agreement with 

7 a State Forester or equivalent official, the Secretaries 

8 shall, to the maximum extent practicable, encourage the 

9 State and local communities involved to become fire-ready 

10 communities. 

11 SEC. 384. COASTAL AND GREAT LAKES STATE ADAPTATION 

12 PROGRAM. 

13 (a) FINDINGS.—According to the National Ocean Ec14 onomics Program, coastal and Great Lakes States account 

15 for 81.4 percent of the population of the United States 

16 and generate 83 percent of the economic output of the 

17 United States. 

18 (b) DEFINITIONS.—In this section: 

19 (1) COASTAL STATE.—The term ‘‘coastal 

20 State’’ has the meaning given the term ‘‘coastal 

21 state’’ in section 304 of the Coastal Zone Manage22 ment Act of 1972 (16 U.S.C. 1453). 

23 (2) COASTAL WATERSHED.—The term ‘‘coastal 

24 watershed’’ means a geographical area drained into 

25 or contributing water to an estuarine area, an ocean, 


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1 or a Great Lake, all or a portion of which is within 

2 the coastal zone (as defined in section 304 of the 

3 Coastal Zone Management Act of 1972 (16 U.S.C. 

4 1453)). 

5 (3) SHORELINE MILES.—The term ‘‘shoreline 

6 miles’’, with respect to a coastal State, means the 

7 mileage of tidal shoreline or Great Lake shoreline of 

8 the coastal State, based on the most recently avail9 able data from or accepted by the National Ocean 

10 Service of the National Oceanic and Atmospheric 

11 Administration. 

12 (c) DISTRIBUTION.— 

13 (1) IN GENERAL.—The Administrator shall dis14 tribute, in accordance with this section, funding for 

15 coastal State economic protection under subsection. 

16 (2) ALLOCATION.—The funding available for al17 location under subsection (b) for a calendar year 

18 shall be distributed among coastal States, as follows: 

19 (A) 25 percent based on the proportion 

20 that— 

21 (i) the number of shoreline miles of a 

22 coastal State; bears to 

23 (ii) the total number of shoreline 

24 miles of all coastal States. 


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1 (B) 25 percent based on the proportion 

2 that— 

3 (i) the population of a coastal State; 

4 bears to 

5 (ii) the total population of all coastal 

6 States. 

7 (C) 50 percent divided equally among all 

8 coastal States. 

9 (d) USE OF FUNDING.— 

10 (1) IN GENERAL.—During any calendar year, a 

11 coastal State receiving funding under this section 

12 may use the funding only for projects and activities 

13 to plan for and address the impacts of climate 

14 change in the coastal watershed, including— 

15 (A) to address the impacts of climate 

16 change with respect to— 

17 (i) accelerated sea level rise and lake 

18 level changes; 

19 (ii) shoreline erosion; 

20 (iii) increased storm frequency or in21 tensity; 

22 (iv) changes in rainfall or other pre23 cipitation; and 

24 (v) related flooding; 


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1 (B) to identify and develop plans to pro2 tect, or, as necessary or applicable, to relocate 

3 public facilities and infrastructure, coastal re4 sources of national significance, public energy 

5 facilities, or other public water uses located in 

6 the coastal watershed that are affected by cli7 mate change, including strategies that use nat8 ural resources, such as natural buffer zones, 

9 natural shorelines, and habitat protection or 

10 restoration; 

11 (C) to research and collect data using, or 

12 on matters such as— 

13 (i) historical shoreline position maps; 

14 (ii) historical shoreline erosion rates; 

15 (iii) inventories of shoreline features 

16 and conditions; 

17 (iv) acquisition of high-resolution to18 pography and bathymetry; 

19 (v) sea level rise inundation models; 

20 (vi) storm surge sea level rise linked 

21 inundation models; 

22 (vii) shoreline change modeling based 

23 on sea level rise projections; 

24 (viii) sea level rise vulnerability anal25 yses and socioeconomic studies; and 


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1 (ix) environmental and habitat 

2 changes associated with sea level rise; and 

3 (D) to respond to— 

4 (i) changes in chemical characteristics 

5 (including ocean acidification) and physical 

6 characteristics (including thermal strati7 fication) of marine systems; 

8 (ii) saltwater intrusion into ground9 water aquifers; 

10 (iii) increased harmful algae blooms; 

11 (iv) spread of invasive species; 

12 (v) coastal habitat loss; 

13 (vi) species migrations; and 

14 (vii) marine, estuarine, and freshwater 

15 ecosystem changes associated with climate 

16 change. 

17 (2) EXECUTION.—Priority to plan and carry 

18 out projects and activities under this subsection shall 

19 be given to State coastal agencies, as determined in 

20 accordance with State law. 

21 (3) COORDINATION.—In carrying out this sub22 section, a coastal State shall coordinate with other 

23 statewide climate change efforts in order to avoid 

24 duplication of such efforts. 


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1 (e) REPORT.—Not later than 1 year after the date 

2 on which a State receives funds under this section, and 

3 biennially thereafter until such time as the funding is fully 

4 expended, the State shall submit to the Administrator, or 

5 the heads of such other Federal agencies as the President 

6 may designate, a report that— 

7 (1) provides a full accounting for the State’s 

8 use of funding distributed under this section, includ9 ing a description of the projects and activities fund10 ed; and 

11 (2) may be independent or included within any 

12 report required for any State programs for green13 house gas reduction and climate adaptation. 

14 DIVISION B—POLLUTION 

15 REDUCTION AND INVESTMENT 

16 TITLE I—REDUCING GLOBAL 

17 WARMING POLLUTION 

18 Subtitle A—Reducing Global 

19 Warming Pollution 

20 SEC. 101. REDUCING GLOBAL WARMING POLLUTION. 

21 The Clean Air Act is amended by adding after title 

22 VI (42 U.S.C. 7671 et seq.) the following: 


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1 ‘‘TITLE VII—GLOBAL WARMING 

2 POLLUTION REDUCTION AND 

3 INVESTMENT PROGRAM 

4 ‘‘PART A—GLOBAL WARMING POLLUTION 

5 REDUCTION GOALS AND TARGETS 

6 ‘‘SEC. 701. FINDINGS. 

7 ‘‘Congress finds that— 

8 ‘‘(1) global warming poses a significant threat 

9 to the national security, economy, public health and 

10 welfare, and environment of the United States, as 

11 well as of other countries; 

12 ‘‘(2) reviews of scientific studies, including by 

13 the Intergovernmental Panel on Climate Change and 

14 the National Academy of Sciences, demonstrate that 

15 global warming is the result of the combined anthro16 pogenic greenhouse gas emissions from numerous 

17 sources of all types and sizes; 

18 ‘‘(3) each increment of emission, when com19 bined with other emissions, causes or contributes 

20 materially to the acceleration and extent of global 

21 warming and its adverse effects for the lifetime of 

22 such gas in the atmosphere; 

23 ‘‘(4) accordingly, controlling emissions in small 

24 as well as large quantities is essential to prevent, 


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1 slow the pace of, reduce the threats from, and miti2 gate global warming and its adverse effects; 

3 ‘‘(5) because they induce global warming, 

4 greenhouse gas emissions cause or contribute to in5 juries to persons in the United States, including— 

6 ‘‘(A) adverse health effects, such as disease 

7 and loss of life; 

8 ‘‘(B) displacement of human populations; 

9 ‘‘(C) damage to property and other inter10 ests relating to ocean levels, acidification, and 

11 ice changes; 

12 ‘‘(D) severe weather and seasonal changes; 

13 ‘‘(E) disruption, costs, and losses to busi14 ness, trade, employment, farms, subsistence, 

15 aesthetic enjoyment of the environment, recre16 ation, culture, and tourism; 

17 ‘‘(F) damage to plants, forests, lands, and 

18 waters; 

19 ‘‘(G) harm to wildlife and habitat; 

20 ‘‘(H) scarcity of water and the decreased 

21 abundance of other natural resources; 

22 ‘‘(I) worsening of tropospheric air pollu23 tion; 

24 ‘‘(J) substantial threats of similar damage; 

25 and 


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1 ‘‘(K) other harm; 

2 ‘‘(6) the fact that many of those effects and 

3 risks of future effects of global warming are widely 

4 shared does not minimize the adverse effects indi5 vidual persons have suffered, will suffer, and are at 

6 risk of suffering because of global warming; 

7 ‘‘(7) the fact that some of the adverse and po8 tentially catastrophic effects of global warming are 

9 at risk of occurring and not a certainty does not ne10 gate the harm persons suffer from actions that in11 crease the likelihood, extent, and severity of such fu12 ture impacts; 

13 ‘‘(8) countries of the world look to the United 

14 States for leadership in addressing the threat of and 

15 harm from global warming; 

16 ‘‘(9) full implementation of this title is critical 

17 to engage other countries in an international effort 

18 to mitigate the threat of and harm from global 

19 warming; and 

20 ‘‘(10) global warming and its adverse effects 

21 are occurring and are likely to continue and increase 

22 in magnitude, and to do so at a greater and more 

23 harmful rate, unless the this title is fully imple24 mented and enforced in an expeditious manner. 


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1 ‘‘SEC. 702. ECONOMY-WIDE REDUCTION GOALS. 

2 ‘‘The goals of this title, and the Clean Energy Jobs 

3 and American Power Act (and the amendments made by 

4 that Act), are to reduce steadily the quantity of United 

5 States greenhouse gas emissions such that— 

6 ‘‘(1) in 2012, the quantity of United States 

7 greenhouse gas emissions does not exceed 97 percent 

8 of the quantity of United States greenhouse gas 

9 emissions in 2005; 

10 ‘‘(2) in 2020, the quantity of United States 

11 greenhouse gas emissions does not exceed 80 percent 

12 of the quantity of United States greenhouse gas 

13 emissions in 2005; 

14 ‘‘(3) in 2030, the quantity of United States 

15 greenhouse gas emissions does not exceed 58 percent 

16 of the quantity of United States greenhouse gas 

17 emissions in 2005; and 

18 ‘‘(4) in 2050, the quantity of United States 

19 greenhouse gas emissions does not exceed 17 percent 

20 of the quantity of United States greenhouse gas 

21 emissions in 2005. 

22 ‘‘SEC. 703. REDUCTION TARGETS FOR SPECIFIED SOURCES. 

23 ‘‘(a) IN GENERAL.—The regulations issued under 

24 section 721 shall limit and reduce annually the greenhouse 

25 gas emissions of capped sources each calendar year begin26 ning in 2012 such that— 


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1 ‘‘(1) in 2012, the quantity of greenhouse gas 

2 emissions from capped sources does not exceed 97 

3 percent of the quantity of greenhouse gas emissions 

4 from such sources in 2005; 

5 ‘‘(2) in 2020, the quantity of greenhouse gas 

6 emissions from capped sources does not exceed 80 

7 percent of the quantity of greenhouse gas emissions 

8 from such sources in 2005; 

9 ‘‘(3) in 2030, the quantity of greenhouse gas 

10 emissions from capped sources does not exceed 58 

11 percent of the quantity of greenhouse gas emissions 

12 from such sources in 2005; and 

13 ‘‘(4) in 2050, the quantity of greenhouse gas 

14 emissions from capped sources does not exceed 17 

15 percent of the quantity of greenhouse gas emissions 

16 from such sources in 2005. 

17 ‘‘(b) DEFINITION OF GREENHOUSE GAS EMISSIONS

18 FROM SUCH SOURCES IN 2005.—For purposes of this sec19 tion, the term ‘greenhouse gas emissions from such 

20 sources in 2005’ means emissions to which section 722 

21 would have applied if the requirements of this title for the 

22 specified year had been in effect for 2005. 

23 ‘‘SEC. 704. SUPPLEMENTAL POLLUTION REDUCTIONS. 

24 ‘‘For the purposes of decreasing the likelihood of cat25 astrophic climate change, preserving tropical forests, 


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1 building capacity to generate offset credits, and facili2 tating international action on global warming, the Admin3 istrator shall set aside a percentage specified in section 

4 771(d) of the quantity of emission allowances established 

5 under section 721(a) for each year, to be used to achieve 

6 a reduction of greenhouse gas emissions from deforest7 ation in developing countries in accordance with part E. 

8 In 2020, activities supported under part E shall provide 

9 greenhouse gas reductions in an amount equal to an addi10 tional 10 percentage points of reductions from United 

11 States greenhouse gas emissions in 2005. The Adminis12 trator shall distribute these allowances with respect to ac13 tivities in countries that enter into and implement agree14 ments or arrangements relating to reduced deforestation 

15 as described in section 753(a)(2). 

16 ‘‘SEC. 705. REVIEW AND PROGRAM RECOMMENDATIONS. 

17 ‘‘(a) IN GENERAL.—The Administrator shall, in con18 sultation with appropriate Federal agencies, submit to 

19 Congress a report not later than July 1, 2013, and every 

20 4 years thereafter, that includes— 

21 ‘‘(1) an analysis of key findings based on up22 to-date scientific information and data relevant to 

23 global climate change; 

24 ‘‘(2) an analysis of capabilities to monitor and 

25 verify greenhouse gas reductions on a worldwide 


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1 basis, including for the United States, as required 

2 under the Clean Energy Jobs and American Power 

3 Act (and the amendments made by that Act); and 

4 ‘‘(3) an analysis of the status of worldwide 

5 greenhouse gas reduction efforts, including imple6 mentation of the Clean Energy Jobs and American 

7 Power Act and other policies, both domestic and 

8 international, for reducing greenhouse gas emissions, 

9 preventing dangerous atmospheric concentrations of 

10 greenhouse gases, preventing significant irreversible 

11 consequences of climate change, and reducing vul12 nerability to the impacts of climate change. 

13 ‘‘(b) EXCEPTION.—Subsection (a)(3) shall not apply 

14 to the first report submitted under subsection (a). 

15 ‘‘(c) LATEST SCIENTIFIC INFORMATION.—The anal16 ysis required under subsection (a)(1) shall— 

17 ‘‘(1) address existing scientific information and 

18 reports, considering, to the greatest extent possible, 

19 the most recent assessment report of the Intergov20 ernmental Panel on Climate Change, reports by the 

21 United States Global Change Research Program, the 

22 Natural Resources Climate Change Adaptation 

23 Panel established under section 365 of the Clean 

24 Energy Jobs and American Power Act, and Federal 


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1 agencies, and the European Union’s global tempera2 ture data assessment; 

3 ‘‘(2) review trends and projections for— 

4 ‘‘(A) global and country-specific annual 

5 emissions of greenhouse gases, and cumulative 

6 greenhouse gas emissions produced between 

7 1850 and the present, including— 

8 ‘‘(i) global cumulative emissions of an9 thropogenic greenhouse gases; 

10 ‘‘(ii) global annual emissions of an11 thropogenic greenhouse gases; and 

12 ‘‘(iii) by country, annual total, annual 

13 per capita, and cumulative anthropogenic 

14 emissions of greenhouse gases for the top 

15 50 emitting nations; 

16 ‘‘(B) significant changes, both globally and 

17 by region, in annual net non-anthropogenic 

18 greenhouse gas emissions from natural sources, 

19 including permafrost, forests, or oceans; 

20 ‘‘(C) global atmospheric concentrations of 

21 greenhouse gases, expressed in annual con22 centration units as well as carbon dioxide 

23 equivalents based on 100-year global warming 

24 potentials; 


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1 ‘‘(D) major climate forcing factors, such as 

2 aerosols; 

3 ‘‘(E) global average temperature, expressed 

4 as seasonal and annual averages in land, ocean, 

5 and land-plus-ocean averages; and 

6 ‘‘(F) sea level rise; 

7 ‘‘(3) assess the current and potential impacts of 

8 global climate change on— 

9 ‘‘(A) human populations, including impacts 

10 on public health, economic livelihoods, subsist11 ence, tribal culture, human infrastructure, and 

12 displacement or permanent relocation due to 

13 flooding, severe weather, extended drought, ero14 sion, or other ecosystem changes; 

15 ‘‘(B) freshwater systems, including water 

16 resources for human consumption and agri17 culture and natural and managed ecosystems, 

18 flood and drought risks, and relative humidity; 

19 ‘‘(C) the carbon cycle, including impacts 

20 related to the thawing of permafrost, the fre21 quency and intensity of wildfire, and terrestrial 

22 and ocean carbon sinks; 

23 ‘‘(D) ecosystems and animal and plant 

24 populations, including impacts on species abun25 dance, phenology, and distribution; 


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1 ‘‘(E) oceans and ocean ecosystems, includ2 ing effects on sea level, ocean acidity, ocean 

3 temperatures, coral reefs, ocean circulation, 

4 fisheries, and other indicators of ocean eco5 system health; 

6 ‘‘(F) the cryosphere, including effects on 

7 ice sheet mass balance, mountain glacier mass 

8 balance, and sea-ice extent and volume; 

9 ‘‘(G) changes in the intensity, frequency, 

10 or distribution of severe weather events, includ11 ing precipitation, tropical cyclones, tornadoes, 

12 and severe heat waves; 

13 ‘‘(H) agriculture and forest systems; and 

14 ‘‘(I) any other indicators the Administrator 

15 deems appropriate; 

16 ‘‘(4) summarize any significant socioeconomic 

17 impacts of climate change in the United States, in18 cluding the territories of the United States, drawing 

19 on work by Federal agencies and the academic lit20 erature, including impacts on— 

21 ‘‘(A) public health; 

22 ‘‘(B) economic livelihoods, subsistence, and 

23 tribal culture; 


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1 ‘‘(C) displacement or permanent relocation 

2 due to flooding, severe weather, extended 

3 drought, or other ecosystem changes; 

4 ‘‘(D) human infrastructure, including 

5 coastal infrastructure vulnerability to extreme 

6 events and sea level rise, river floodplain infra7 structure, and sewer and water management 

8 systems; 

9 ‘‘(E) agriculture and forests, including ef10 fects on potential growing season, distribution, 

11 and yield; 

12 ‘‘(F) water resources for human consump13 tion, agriculture and natural and managed eco14 systems, flood and drought risks, and relative 

15 humidity; 

16 ‘‘(G) energy supply and use; and 

17 ‘‘(H) transportation; 

18 ‘‘(5) in assessing risks and impacts, use a risk 

19 management framework, including both qualitative 

20 and quantitative measures, to assess the observed 

21 and projected impacts of current and future climate 

22 change, accounting for— 

23 ‘‘(A) both monetized and non-monetized 

24 losses; 


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1 ‘‘(B) potential nonlinear, abrupt, or essen2 tially irreversible changes in the climate system; 

3 ‘‘(C) potential nonlinear increases in the 

4 cost of impacts; 

5 ‘‘(D) potential low-probability, high impact 

6 events; and 

7 ‘‘(E) whether impacts are transitory or es8 sentially permanent; and 

9 ‘‘(6) based on the findings of the Administrator 

10 under this section, as well as assessments produced 

11 by the Intergovernmental Panel on Climate Change, 

12 the United States Global Change Research program, 

13 and other relevant scientific entities— 

14 ‘‘(A) describe increased risks to natural 

15 systems and society that would result from an 

16 increase in global average temperature 3.6 de17 grees Fahrenheit (2 degrees Celsius) above the 

18 pre-industrial average or an increase in atmos19 pheric greenhouse gas concentrations above 450 

20 parts per million carbon dioxide equivalent; and 

21 ‘‘(B) identify and assess— 

22 ‘‘(i) significant residual risks not 

23 avoided by the thresholds described in sub24 paragraph (A); 


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1 ‘‘(ii) alternative thresholds or targets 

2 that may more effectively limit the risks 

3 identified pursuant to clause (i); and 

4 ‘‘(iii) thresholds above those described 

5 in subparagraph (A) which significantly in6 crease the risk of certain impacts or render 

7 them essentially permanent. 

8 ‘‘(d) STATUS OF MONITORING AND VERIFICATION

9 CAPABILITIES TO EVALUATE GREENHOUSE GAS REDUC10 TION EFFORTS.—The analysis required under subsection 

11 (a)(2) shall evaluate the capabilities of the monitoring, re12 porting, and verification systems used to quantify progress 

13 in achieving reductions in greenhouse gas emissions both 

14 globally and in the United States (as described in section 

15 702), including— 

16 ‘‘(1) quantification of emissions and emission 

17 reductions by entities participating in the pollution 

18 reduction and investment program under this title; 

19 ‘‘(2) quantification of emissions and emission 

20 reductions by entities participating in the offset pro21 gram under this title; 

22 ‘‘(3) quantification of emission and emission re23 ductions by entities regulated by performance stand24 ards; 


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1 ‘‘(4) quantification of aggregate net emissions 

2 and emission reductions by the United States; and 

3 ‘‘(5) quantification of global changes in net 

4 emissions and in sources and sinks of greenhouse 

5 gases. 

6 ‘‘(e) STATUS OF GREENHOUSE GAS REDUCTION EF7 FORTS.—The analysis required under subsection (a)(3) 

8 shall address— 

9 ‘‘(1) whether the programs under the Clean En10 ergy Jobs and American Power Act (and the amend11 ments made by that Act) and other Federal statutes 

12 are resulting in sufficient United States greenhouse 

13 gas emission reductions to meet the emissions reduc14 tion goals described in section 702, taking into ac15 count the use of offsets; and 

16 ‘‘(2) whether United States actions, taking into 

17 account international actions, commitments, and 

18 trends, and considering the range of plausible emis19 sions scenarios, are sufficient to avoid— 

20 ‘‘(A) atmospheric greenhouse gas con21 centrations above 450 parts per million carbon 

22 dioxide equivalent; 

23 ‘‘(B) global average surface temperature 

24 3.6 degrees Fahrenheit (2 degrees Celsius) 

25 above the pre-industrial average, or such other 


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1 temperature thresholds as the Administrator 

2 deems appropriate; and 

3 ‘‘(C) other temperature or greenhouse gas 

4 thresholds identified pursuant to subsection 

5 (c)(6)(B). 

6 ‘‘(f) RECOMMENDATIONS.— 

7 ‘‘(1) LATEST SCIENTIFIC INFORMATION.— 

8 Based on the analysis described in subsection (a)(1), 

9 each report under subsection (a) shall identify ac10 tions that could be 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; and 

18 ‘‘(D) design policies to better account for 

19 climate risks. 

20 ‘‘(2) MONITORING, REPORTING AND

21 VERIFICATION.—Based on the analysis described in 

22 subsection (a)(2), each report under subsection (a) 

23 shall identify key gaps in measurement, reporting, 

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1 tions to improve the accuracy and reliability of those 

2 capabilities. 

3 ‘‘(3) STATUS OF GREENHOUSE GAS REDUCTION

4 EFFORTS.—Based on the analysis described in sub5 section (a)(3), taking into account international ac6 tions, commitments, and trends, and considering the 

7 range of plausible emissions scenarios, each report 

8 under subsection (a) shall identify— 

9 ‘‘(A) the quantity of additional reductions 

10 required to meet the emissions reduction goals 

11 in section 702; 

12 ‘‘(B) the quantity of additional reductions 

13 in global greenhouse gas emissions needed to 

14 avoid the concentration and temperature 

15 thresholds identified in subsection (e); and 

16 ‘‘(C) possible strategies and approaches for 

17 achieving additional reductions. 

18 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 

19 are authorized to be appropriated to carry out this section 

20 such sums as may be necessary. 

21 ‘‘SEC. 706. NATIONAL ACADEMY REVIEW. 

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

23 date of enactment of this title, the Administrator shall 

24 offer to enter into a contract with the National Academy 

25 of Sciences (in this section referred to as the ‘Academy’) 


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1 under which the Academy shall, not later than July 1, 

2 2014, and every 4 years thereafter, submit to Congress 

3 and the Administrator a report that includes— 

4 ‘‘(1) a review of the most recent report and rec5 ommendations issued under section 705; and 

6 ‘‘(2) an analysis of technologies to achieve re7 ductions in greenhouse gas emissions. 

8 ‘‘(b) FAILURE TO ISSUE A REPORT.—In the event 

9 that the Administrator has not issued all or part of the 

10 most recent report required under section 705, the Acad11 emy shall conduct its own review and analysis of the re12 quired information. 

13 ‘‘(c) TECHNOLOGICAL INFORMATION.—The analysis 

14 required under subsection (a)(2) shall— 

15 ‘‘(1) review existing technological information 

16 and reports, including the most recent reports by the 

17 Department of Energy, the United States Global 

18 Change Research Program, the Intergovernmental 

19 Panel on Climate Change, and the International En20 ergy Agency and any other relevant information on 

21 technologies or practices that reduce or limit green22 house gas emissions; 

23 ‘‘(2) include the participation of technical ex24 perts from relevant private industry sectors; 


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1 ‘‘(3) review the current and future projected de2 ployment of technologies and practices in the United 

3 States that reduce or limit greenhouse gas emis4 sions, including— 

5 ‘‘(A) technologies for capture and seques6 tration of greenhouse gases; 

7 ‘‘(B) technologies to improve energy effi8 ciency; 

9 ‘‘(C) low- or zero-greenhouse gas emitting 

10 energy technologies; 

11 ‘‘(D) low- or zero-greenhouse gas emitting 

12 fuels; 

13 ‘‘(E) biological sequestration practices and 

14 technologies; and 

15 ‘‘(F) any other technologies the Academy 

16 deems relevant; and 

17 ‘‘(4) review and compare the emissions reduc18 tion potential, commercial viability, market penetra19 tion, investment trends, and deployment of the tech20 nologies described in paragraph (3), including— 

21 ‘‘(A) the need for additional research and 

22 development, including publicly funded research 

23 and development; 

24 ‘‘(B) the extent of commercial deployment, 

25 including, where appropriate, a comparison to 


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1 the cost and level of deployment of conventional 

2 fossil fuel-fired energy technologies and devices; 

3 and 

4 ‘‘(C) an evaluation of any substantial tech5 nological, legal, or market-based barriers to 

6 commercial deployment. 

7 ‘‘(d) RECOMMENDATIONS.— 

8 ‘‘(1) LATEST SCIENTIFIC INFORMATION.— 

9 Based on the review described in subsection (a)(1), 

10 the Academy shall identify actions that could be 

11 taken to— 

12 ‘‘(A) improve the characterization of 

13 changes in the earth-climate system and im14 pacts of global climate change; 

15 ‘‘(B) better inform decision making and 

16 actions related to global climate change; 

17 ‘‘(C) mitigate risks to natural and social 

18 systems; 

19 ‘‘(D) design policies to better account for 

20 climate risks; and 

21 ‘‘(E) improve the accuracy and reliability 

22 of capabilities to monitor, report, and verify 

23 greenhouse gas emissions reduction efforts. 


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1 ‘‘(2) TECHNOLOGICAL INFORMATION.—Based 

2 on the analysis described in subsection (a)(2), the 

3 Academy shall identify— 

4 ‘‘(A) additional emission reductions that 

5 may be possible as a result of technologies de6 scribed in the analysis; 

7 ‘‘(B) barriers to the deployment of such 

8 technologies; and 

9 ‘‘(C) actions that could be taken to speed 

10 deployment of such technologies. 

11 ‘‘(3) STATUS OF GREENHOUSE GAS REDUCTION

12 EFFORTS.—Based on the review described in sub13 section (a)(1), the Academy shall identify— 

14 ‘‘(A) the quantity of additional reductions 

15 required to meet the emissions reduction goals 

16 described in section 702; and 

17 ‘‘(B) the quantity of additional reductions 

18 in global greenhouse gas emissions needed to 

19 avoid the concentration and temperature 

20 thresholds described in section 705(c)(6)(A) or 

21 identified pursuant to section 705(c)(6)(B). 

22 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 

23 are authorized to be appropriated to carry out this section 

24 such sums as may be necessary. 


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1 ‘‘SEC. 707. PRESIDENTIAL RESPONSE AND RECOMMENDA2 TIONS. 

3 ‘‘Not later than July 1, 2015, and every 4 years 

4 thereafter— 

5 ‘‘(1) the President shall direct relevant Federal 

6 agencies to use existing statutory authority to take 

7 appropriate actions identified in the reports sub8 mitted under sections 705 and 706 and to address 

9 any shortfalls identified in such reports; and 

10 ‘‘(2) in the event that the National Academy of 

11 Sciences has concluded, in the most recent report 

12 submitted under section 706, that the United States 

13 will not achieve the necessary domestic greenhouse 

14 gas emission reductions, or that global actions will 

15 not maintain safe global average surface tempera16 ture and atmospheric greenhouse gas concentration 

17 thresholds, the President shall submit to Congress a 

18 plan identifying domestic and international actions 

19 that will achieve necessary additional greenhouse gas 

20 reductions, including any recommendations for legis21 lative action. 

22 ‘‘PART B—DESIGNATION AND REGISTRATION OF 

23 GREENHOUSE GASES 

24 ‘‘SEC. 711. DESIGNATION OF GREENHOUSE GASES. 

25 ‘‘(a) GREENHOUSE GASES.—For purposes of this 

26 title, the following are greenhouse gases: 


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1 ‘‘(1) Carbon dioxide. 

2 ‘‘(2) Methane. 

3 ‘‘(3) Nitrous oxide. 

4 ‘‘(4) Sulfur hexafluoride. 

5 ‘‘(5) Hydrofluorocarbons from a chemical man6 ufacturing process at an industrial stationary 

7 source. 

8 ‘‘(6) Any perfluorocarbon, except as otherwise 

9 provided in section 714. 

10 ‘‘(7) Nitrogen trifluoride. 

11 ‘‘(8) Any other anthropogenic gas designated as 

12 a greenhouse gas by the Administrator under this 

13 section. 

14 ‘‘(b) DETERMINATION ON ADMINISTRATOR’S INITIA15 TIVE.—The Administrator shall, by rule— 

16 ‘‘(1) determine whether 1 metric ton of another 

17 anthropogenic gas makes the same or greater con18 tribution to global warming over 100 years as 1 met19 ric ton of carbon dioxide; 

20 ‘‘(2) determine the carbon dioxide equivalent 

21 value for each gas with respect to which the Admin22 istrator makes an affirmative determination under 

23 paragraph (1); 

24 ‘‘(3) for each gas with respect to which the Ad25 ministrator makes an affirmative determination 


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1 under paragraph (1) and that is used as a substitute 

2 for a class I or class II substance under title VI, de3 termine the extent to which to regulate that gas 

4 under section 619 and specify appropriate compli5 ance obligations under section 619; 

6 ‘‘(4) designate as a greenhouse gas for purposes 

7 of this title each gas for which the Administrator 

8 makes an affirmative determination under para9 graph (1), to the extent that it is not regulated 

10 under section 619; and 

11 ‘‘(5) specify the appropriate compliance obliga12 tions under this title for each gas designated as a 

13 greenhouse gas under paragraph (4). 

14 ‘‘(c) PETITIONS TO DESIGNATE A GREENHOUSE

15 GAS.— 

16 ‘‘(1) IN GENERAL.—Any person may petition 

17 the Administrator to designate as a greenhouse gas 

18 any anthropogenic gas 1 metric ton of which makes 

19 the same or greater contribution to global warming 

20 over 100 years as 1 metric ton of carbon dioxide. 

21 ‘‘(2) CONTENTS OF PETITION.—The petitioner 

22 shall provide sufficient data, as specified by rule by 

23 the Administrator, to demonstrate that the gas is 

24 likely to be a greenhouse gas and is likely to be pro25 duced, imported, used, or emitted in the United 


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1 States. To the extent practicable, the petitioner shall 

2 also identify producers, importers, distributors, 

3 users, and emitters of the gas in the United States. 

4 ‘‘(3) REVIEW AND ACTION BY THE ADMINIS5 TRATOR.—Not later than 90 days after receipt of a 

6 petition under paragraph (2), the Administrator 

7 shall determine whether the petition is complete and 

8 notify the petitioner and the public of the decision. 

9 ‘‘(4) ADDITIONAL INFORMATION.—The Admin10 istrator may require producers, importers, distribu11 tors, users, or emitters of the gas to provide infor12 mation on the contribution of the gas to global 

13 warming over 100 years compared to carbon dioxide. 

14 ‘‘(5) TREATMENT OF PETITION.—For any sub15 stance used as a substitute for a class I or class II 

16 substance under title VI, the Administrator may 

17 elect to treat a petition under this subsection as a 

18 petition to list the substance as a class II, group II 

19 substance under section 619, and may require the 

20 petition to be amended to address listing criteria 

21 promulgated under that section. 

22 ‘‘(6) DETERMINATION.—Not later than 2 years 

23 after receipt of a complete petition, the Adminis24 trator shall, after notice and an opportunity for com25 ment— 


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1 ‘‘(A) issue and publish in the Federal Reg2 ister— 

3 ‘‘(i) a determination that 1 metric ton 

4 of the gas does not make a contribution to 

5 global warming over 100 years that is 

6 equal to or greater than that made by 1 

7 metric ton of carbon dioxide; and 

8 ‘‘(ii) an explanation of the decision; or 

9 ‘‘(B) determine that 1 metric ton of the 

10 gas makes a contribution to global warming 

11 over 100 years that is equal to or greater than 

12 that made by 1 metric ton of carbon dioxide, 

13 and take the actions described in subsection (b) 

14 with respect to such gas. 

15 ‘‘(7) GROUNDS FOR DENIAL.—The Adminis16 trator may not deny a petition under this subsection 

17 solely on the basis of inadequate Environmental Pro18 tection Agency resources or time for review. 

19 ‘‘(d) SCIENCE ADVISORY BOARD CONSULTATION.— 

20 ‘‘(1) CONSULTATION.—The Administrator 

21 shall— 

22 ‘‘(A) give notice to the Science Advisory 

23 Board prior to making a determination under 

24 subsection (b)(1), (c)(6), or (e)(2)(B); 


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1 ‘‘(B) consider the written recommendations 

2 of the Science Advisory Board under paragraph 

3 (2) regarding the determination; and 

4 ‘‘(C) consult with the Science Advisory 

5 Board regarding such determination, including 

6 consultation subsequent to receipt of such writ7 ten recommendations. 

8 ‘‘(2) FORMULATION OF RECOMMENDATIONS.— 

9 Upon receipt of notice under paragraph (1)(A) re10 garding a pending determination under subsection 

11 (b)(1), (c)(6), or (e)(2)(B), the Science Advisory 

12 Board shall— 

13 ‘‘(A) formulate recommendations regarding 

14 such determination, subject to a peer review 

15 process; and 

16 ‘‘(B) submit such recommendations in 

17 writing to the Administrator. 

18 ‘‘(e) MANUFACTURING AND EMISSION NOTICES.— 

19 ‘‘(1) NOTICE REQUIREMENT.— 

20 ‘‘(A) IN GENERAL.—Except as otherwise 

21 provided in section 714, effective 24 months 

22 after the date of enactment of this title, no per23 son may manufacture or introduce into inter24 state commerce a fluorinated gas, or emit a sig25 nificant quantity, as determined by the AdminVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00406 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 istrator, of any fluorinated gas that is gen2 erated as a byproduct during the production or 

3 use of another fluorinated gas, unless— 

4 ‘‘(i) the gas is designated as a green5 house gas under this section or is an 

6 ozone-depleting substance listed as a class 

7 I or class II substance under title VI; 

8 ‘‘(ii) the Administrator has deter9 mined that 1 metric ton of such gas does 

10 not make a contribution to global warming 

11 that is equal to or greater than that made 

12 by 1 metric ton of carbon dioxide; or 

13 ‘‘(iii) the person manufacturing or im14 porting the gas for distribution into inter15 state commerce, or emitting the gas, has 

16 submitted to the Administrator, at least 90 

17 days before the start of such manufacture, 

18 introduction into commerce, or emission, a 

19 notice of such person’s manufacture, intro20 duction into commerce, or emission of such 

21 gas, and the Administrator has not deter22 mined that notice or a substantially similar 

23 notice is incomplete. 

24 ‘‘(B) ALTERNATIVE COMPLIANCE.—For a 

25 gas that is a substitute for a class I or class II 


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1 substance under title VI and either has been 

2 listed as acceptable for use under section 612 

3 or is currently subject to evaluation under sec4 tion 612, the Administrator may accept the no5 tice and information provided pursuant to that 

6 section as fulfilling the obligation under clause 

7 (iii) of subparagraph (A). 

8 ‘‘(2) REVIEW AND ACTION BY THE ADMINIS9 TRATOR.— 

10 ‘‘(A) COMPLETENESS.—Not later than 90 

11 days after receipt of notice under paragraph 

12 (1)(A)(iii) or (B), the Administrator shall deter13 mine whether the notice is complete. 

14 ‘‘(B) DETERMINATION.—If the Adminis15 trator determines that the notice is complete, 

16 the Administrator shall, after notice and an op17 portunity for comment, not later than 12 

18 months after receipt of the notice— 

19 ‘‘(i) issue and publish in the Federal 

20 Register a determination that 1 metric ton 

21 of the gas does not make a contribution to 

22 global warming over 100 years that is 

23 equal to or greater than that made by 1 

24 metric ton of carbon dioxide and an expla25 nation of the decision; or 


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1 ‘‘(ii) determine that 1 metric ton of 

2 the gas makes a contribution to global 

3 warming over 100 years that is equal to or 

4 greater than that made by 1 metric ton of 

5 carbon dioxide, and take the actions de6 scribed in subsection (b) with respect to 

7 such gas. 

8 ‘‘(f) REGULATIONS.—Not later than one year after 

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

10 promulgate regulations to carry out this section. Such reg11 ulations shall include— 

12 ‘‘(1) requirements for the contents of a petition 

13 submitted under subsection (c); 

14 ‘‘(2) requirements for the contents of a notice 

15 required under subsection (e); and 

16 ‘‘(3) methods and standards for evaluating the 

17 carbon dioxide equivalent value of a gas. 

18 ‘‘(g) GASES REGULATED UNDER TITLE VI.—The 

19 Administrator shall not designate a gas as a greenhouse 

20 gas under this section to the extent that the gas is regu21 lated under title VI. 

22 ‘‘(h) SAVINGS CLAUSE.—Nothing in this section shall 

23 be interpreted to relieve any person from complying with 

24 the requirements of section 612. 


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1 ‘‘SEC. 712. CARBON DIOXIDE EQUIVALENT VALUE OF 

2 GREENHOUSE GASES. 

3 ‘‘(a) MEASURE OF QUANTITY OF GREENHOUSE

4 GASES.—Any provision of this title or title VIII that refers 

5 to a quantity or percentage of a quantity of greenhouse 

6 gases shall mean the quantity or percentage of the green7 house gases expressed in carbon dioxide equivalents. 

8 ‘‘(b) INITIAL VALUE.—Except as provided by the Ad9 ministrator under this section or section 711— 

10 ‘‘(1) the carbon dioxide equivalent value of 

11 greenhouse gases for purposes of this Act shall be as 

12 follows: 

‘‘ CARBON DIOXIDE EQUIVALENT OF 1 TON OF LISTED 

GREENHOUSE GASES 

Greenhouse gas (1 metric ton) Carbon dioxide equivalent 

(metric tons) 

Carbon dioxide 1 

Methane 25 

Nitrous oxide 298 

HFC-23 14,800 

HFC-125 3,500 

HFC-134a 1,430 

HFC-143a 4,470 

HFC-152a 124 

HFC-227ea 3,220 

HFC-236fa 9,810 

HFC-4310mee 1,640 

CF4 7,390 


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‘‘ CARBON DIOXIDE EQUIVALENT OF 1 TON OF LISTED 

GREENHOUSE GASES—Continued 

Greenhouse gas (1 metric ton) Carbon dioxide equivalent 

(metric tons) 

C2F6 12,200 

C4F10 8,860 

C6F14 9,300 

SF6 22,800 

NF3 17,200 

1 ; and 

2 ‘‘(2) the carbon dioxide equivalent value for 

3 purposes of this Act for any greenhouse gas not list4 ed in the table under paragraph (1) shall be the 

5 100-year Global Warming Potentials provided in the 

6 Intergovernmental Panel on Climate Change Fourth 

7 Assessment Report. 

8 ‘‘(c) PERIODIC REVIEW.— 

9 ‘‘(1) Not later than February 1, 2017, and (ex10 cept as provided in paragraph (3)) not less than 

11 every 5 years thereafter, the Administrator shall— 

12 ‘‘(A) review and, if appropriate, revise the 

13 carbon dioxide equivalent values established 

14 under this section or section 711(b)(2), based 

15 on a determination of the number of metric 

16 tons of carbon dioxide that makes the same 

17 contribution to global warming over 100 years 

18 as 1 metric ton of each greenhouse gas; and 


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1 ‘‘(B) publish in the Federal Register the 

2 results of that review and any revisions. 

3 ‘‘(2) A revised determination published in the 

4 Federal Register under paragraph (1)(B) shall take 

5 effect for greenhouse gas emissions starting on Jan6 uary 1 of the first calendar year starting at least 9 

7 months after the date on which the revised deter8 mination was published. 

9 ‘‘(3) The Administrator may decrease the fre10 quency of review and revision under paragraph (1) 

11 if the Administrator determines that such decrease 

12 is appropriate in order to synchronize such review 

13 and revision with any similar review process carried 

14 out pursuant to the United Nations Framework 

15 Convention on Climate Change, done at New York 

16 on May 9, 1992, or to an agreement negotiated 

17 under that convention, except that in no event shall 

18 the Administrator carry out such review and revision 

19 any less frequently than every 10 years. 

20 ‘‘(d) METHODOLOGY.—In setting carbon dioxide 

21 equivalent values, for purposes of this section or section 

22 711, the Administrator shall take into account publica23 tions by the Intergovernmental Panel on Climate Change 

24 or a successor organization under the auspices of the 


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1 United Nations Environmental Programme and the World 

2 Meteorological Organization. 

3 ‘‘SEC. 713. GREENHOUSE GAS REGISTRY. 

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

5 ‘‘(1) CLIMATE REGISTRY.—The term ‘Climate 

6 Registry’ means the greenhouse gas emissions reg7 istry jointly established and managed by more than 

8 40 States and Indian tribes in 2007 to collect high9 quality greenhouse gas emission data from facilities, 

10 corporations, and other organizations to support var11 ious greenhouse gas emission reporting and reduc12 tion policies for the member States and Indian 

13 tribes. 

14 ‘‘(2) REPORTING ENTITY.—The term ‘reporting 

15 entity’ means— 

16 ‘‘(A) a covered entity; 

17 ‘‘(B) an entity that— 

18 ‘‘(i) would be a covered entity if it had 

19 emitted, produced, imported, manufac20 tured, or delivered in 2008 or any subse21 quent year more than the applicable 

22 threshold level in the definition of covered 

23 entity in paragraph (13) of section 700; 

24 and 


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1 ‘‘(ii) has emitted, produced, imported, 

2 manufactured, or delivered in 2008 or any 

3 subsequent year more than the applicable 

4 threshold level in the definition of covered 

5 entity in paragraph (13) of section 700, 

6 provided that the figure of 25,000 tons of 

7 carbon dioxide equivalent is read instead 

8 as 10,000 tons of carbon dioxide equivalent 

9 and the figure of 460,000,000 cubic feet is 

10 read instead as 184,000,000 cubic feet; 

11 ‘‘(C) any other entity that emits a green12 house gas, or produces, imports, manufactures, 

13 or delivers material whose use results or may 

14 result in greenhouse gas emissions if the Ad15 ministrator determines that reporting under 

16 this section by such entity will help achieve the 

17 purposes of this title or title VIII; 

18 ‘‘(D) any vehicle fleet with emissions of 

19 more than 25,000 tons of carbon dioxide equiv20 alent on an annual basis, if the Administrator 

21 determines that the inclusion of such fleet will 

22 help achieve the purposes of this title or title 

23 VIII; or 

24 ‘‘(E) any entity that delivers electricity to 

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1 tor that meets the energy or greenhouse gas in2 tensity criteria in section 764(b)(3)(B)(i). 

3 ‘‘(b) REGULATIONS.— 

4 ‘‘(1) IN GENERAL.—Not later than 6 months 

5 after the date of enactment of this title, the Admin6 istrator shall issue regulations establishing a Federal 

7 greenhouse gas registry. Such regulations shall— 

8 ‘‘(A) require reporting entities to submit to 

9 the Administrator data on— 

10 ‘‘(i) greenhouse gas emissions in the 

11 United States; 

12 ‘‘(ii) the production and manufacture 

13 in the United States, importation into the 

14 United States, and, at the discretion of the 

15 Administrator, exportation from the 

16 United States, of fuels and industrial gases 

17 the uses of which result or may result in 

18 greenhouse gas emissions; 

19 ‘‘(iii) deliveries in the United States of 

20 natural gas, and any other gas meeting the 

21 specifications for commingling with natural 

22 gas for purposes of delivery, the combus23 tion of which result or may result in green24 house gas emissions; and 


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1 ‘‘(iv) the capture and sequestration of 

2 greenhouse gases; 

3 ‘‘(B) require covered entities and, where 

4 appropriate, other reporting entities to submit 

5 to the Administrator data sufficient to ensure 

6 compliance with or implementation of the re7 quirements of this title; 

8 ‘‘(C) require reporting of electricity deliv9 ered to industrial sources in energy-intensive in10 dustries; 

11 ‘‘(D) ensure the completeness, consistency, 

12 transparency, accuracy, precision, and reliability 

13 of such data; 

14 ‘‘(E) take into account the best practices 

15 from the most recent Federal, State, tribal, and 

16 international protocols for the measurement, ac17 counting, reporting, and verification of green18 house gas emissions, including protocols from 

19 the Climate Registry and other mandatory 

20 State or multistate authorized programs; 

21 ‘‘(F) take into account the latest scientific 

22 research; 

23 ‘‘(G) require that, for covered entities with 

24 respect to greenhouse gases to which section 

25 722 applies, and, to the extent determined to be 


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1 appropriate by the Administrator, for covered 

2 entities with respect to other greenhouse gases 

3 and for other reporting entities, submitted data 

4 are based on— 

5 ‘‘(i) continuous monitoring systems 

6 for fuel flow or emissions, such as contin7 uous emission monitoring systems; 

8 ‘‘(ii) alternative systems that are dem9 onstrated as providing data with the same 

10 precision, reliability, accessibility, and 

11 timeliness, or, to the extent the Adminis12 trator determines is appropriate for report13 ing small amounts of emissions, the same 

14 precision, reliability, and accessibility and 

15 similar timeliness, as data provided by con16 tinuous monitoring systems for fuel flow or 

17 emissions; or 

18 ‘‘(iii) alternative methodologies that 

19 are demonstrated to provide data with pre20 cision, reliability, accessibility, and timeli21 ness, or, to the extent the Administrator 

22 determines is appropriate for reporting 

23 small amounts of emissions, precision, reli24 ability, and accessibility, as similar as is 

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1 erally provided by continuous monitoring 

2 systems for fuel flow or emissions, if the 

3 Administrator determines that, with re4 spect to a reporting entity, there is no con5 tinuous monitoring system or alternative 

6 system described in clause (i) or (ii) that 

7 is technically feasible; 

8 ‘‘(H) require that the Administrator, in de9 termining the extent to which the requirement 

10 to use systems or methodologies in accordance 

11 with subparagraph (G) is appropriate for re12 porting entities other than covered entities or 

13 for greenhouse gases to which section 722 does 

14 not apply, consider the cost of using such sys15 tems and methodologies, and of using other sys16 tems and methodologies that are available and 

17 suitable, for quantifying the emissions involved 

18 in light of the purposes of this title, including 

19 the goal of collecting consistent entity-wide 

20 data; 

21 ‘‘(I) include methods for minimizing double 

22 reporting and avoiding irreconcilable double re23 porting of greenhouse gas emissions; 

24 ‘‘(J) establish measurement protocols for 

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1 ing into consideration the regulations promul2 gated under section 813; 

3 ‘‘(K) require that reporting entities provide 

4 the data required under this paragraph in re5 ports submitted electronically to the Adminis6 trator, in such form and containing such infor7 mation as may be required by the Adminis8 trator; 

9 ‘‘(L) include requirements for keeping 

10 records supporting or related to, and protocols 

11 for auditing, submitted data; 

12 ‘‘(M) establish consistent policies for calcu13 lating carbon content and greenhouse gas emis14 sions for each type of fossil fuel with respect to 

15 which reporting is required; 

16 ‘‘(N) subsequent to implementation of poli17 cies developed under subparagraph (M), provide 

18 for immediate dissemination, to States, Indian 

19 tribes, and on the Internet, of all data reported 

20 under this section as soon as practicable after 

21 electronic audit by the Administrator and any 

22 resulting correction of data, except that data 

23 shall not be disseminated under this subpara24 graph if— 


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1 ‘‘(i) its nondissemination is vital to 

2 the national security of the United States, 

3 as determined by the President; or 

4 ‘‘(ii) it is confidential business infor5 mation that cannot be derived from infor6 mation that is otherwise publicly available 

7 and that would cause significant calculable 

8 competitive harm if published, except 

9 that— 

10 ‘‘(I) data relating to greenhouse 

11 gas emissions, including any upstream 

12 or verification data from reporting en13 tities, shall not be considered to be 

14 confidential business information; and 

15 ‘‘(II) data that is confidential 

16 business information shall be provided 

17 to a State or Indian tribe within 

18 whose jurisdiction the reporting entity 

19 is located, if the Administrator deter20 mines that such State or Indian tribe 

21 has in effect protections for confiden22 tial business information that are 

23 equivalent to protections applicable to 

24 the Federal Government; 


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1 ‘‘(O) prescribe methods by which the Ad2 ministrator shall, in cases in which satisfactory 

3 data are not submitted to the Administrator for 

4 any period of time, estimate emission, produc5 tion, importation, manufacture, or delivery lev6 els— 

7 ‘‘(i) for covered entities with respect 

8 to greenhouse gas emissions, production, 

9 importation, manufacture, or delivery regu10 lated under this title to ensure that emis11 sions, production, importation, manufac12 ture, or deliveries are not underreported, 

13 and to create a strong incentive for meet14 ing data monitoring and reporting require15 ments— 

16 ‘‘(I) with a conservative estimate 

17 of the highest emission, production, 

18 importation, manufacture, or delivery 

19 levels that may have occurred during 

20 the period for which data are missing; 

21 or 

22 ‘‘(II) to the extent the Adminis23 trator considers appropriate, with an 

24 estimate of such levels assuming the 

25 unit is emitting, producing, importing, 


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1 manufacturing, or delivering at a 

2 maximum potential level during the 

3 period, in order to ensure that such 

4 levels are not underreported and to 

5 create a strong incentive for meeting 

6 data monitoring and reporting re7 quirements; and 

8 ‘‘(ii) for covered entities with respect 

9 to greenhouse gas emissions to which sec10 tion 722 does not apply and for other re11 porting entities, with a reasonable estimate 

12 of the emission, production, importation, 

13 manufacture, or delivery levels that may 

14 have occurred during the period for which 

15 data are missing; 

16 ‘‘(P) require the designation of a des17 ignated representative for each reporting entity; 

18 ‘‘(Q) require an appropriate certification, 

19 by the designated representative for the report20 ing entity, of accurate and complete accounting 

21 of greenhouse gas emissions, as determined by 

22 the Administrator; and 

23 ‘‘(R) include requirements for other data 

24 necessary for accurate and complete accounting 

25 of greenhouse gas emissions, as determined by 


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1 the Administrator, including data for quality 

2 assurance of monitoring systems, monitors and 

3 other measurement devices, and other data 

4 needed to verify reported emissions, production, 

5 importation, manufacture, or delivery. 

6 ‘‘(2) TIMING.— 

7 ‘‘(A) CALENDAR YEARS 2007 THROUGH

8 2010.—For a base period of calendar years 

9 2007 through 2010, each reporting entity shall 

10 submit annual data required under this section 

11 to the Administrator not later than March 31, 

12 2011. The Administrator may waive or modify 

13 reporting requirements for calendar years 2007 

14 through 2010 for categories of reporting enti15 ties to the extent that the Administrator deter16 mines that the reporting entities did not keep 

17 data or records necessary to meet reporting re18 quirements. The Administrator may, in addition 

19 to or in lieu of such requirements, collect infor20 mation on energy consumption and production. 

21 ‘‘(B) SUBSEQUENT CALENDAR YEARS.— 

22 For calendar year 2011 and each subsequent 

23 calendar year, each reporting entity shall sub24 mit quarterly data required under this section 

25 to the Administrator not later than 60 days 


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1 after the end of the applicable quarter, except 

2 when the data is already being reported to the 

3 Administrator on an earlier timeframe for an4 other program. 

5 ‘‘(3) WAIVER OF REPORTING REQUIREMENTS.— 

6 The Administrator may waive reporting require7 ments under this section for specific entities to the 

8 extent that the Administrator determines that suffi9 cient and equally or more reliable verified and timely 

10 data are available to the Administrator and the pub11 lic on the Internet under other mandatory statutory 

12 requirements. 

13 ‘‘(4) ALTERNATIVE THRESHOLD.—The Admin14 istrator may, by rule, establish applicability thresh15 olds for reporting under this section using alter16 native metrics and levels, provided that such metrics 

17 and levels are easier to administer and cover the 

18 same size and type of sources as the threshold de19 fined in this section. 

20 ‘‘(c) INTERRELATIONSHIP WITH OTHER SYSTEMS.— 

21 In developing the regulations issued under subsection (b), 

22 the Administrator shall take into account the work done 

23 by the Climate Registry and other mandatory State or 

24 multistate programs. Such regulations shall include an ex25 planation of any major differences in approach between 


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1 the system established under the regulations and such reg2 istries and programs. 

3 ‘‘SEC. 714. PERFLUOROCARBON REGULATION. 

4 ‘‘(a) DEFINITIONS.—In this section: 

5 ‘‘(1) CONSUMPTION.—The term ‘consumption’ 

6 means, with respect to perfluorocarbon, the quantity 

7 of that substance produced in the United States, 

8 plus the quantity imported, minus the quantity ex9 ported. 

10 ‘‘(2) PRODUCE; PRODUCED; PRODUCTION.— 

11 ‘‘(A) IN GENERAL.—The terms ‘produce’, 

12 ‘produced’, and ‘production’ mean the manufac13 ture of perfluorocarbon, or the emission of 

14 perfluorocarbon from other industrial sources. 

15 ‘‘(B) EXCLUSIONS.—The terms ‘produce’, 

16 ‘produced’, and ‘production’ do not include— 

17 ‘‘(i) the manufacture of 

18 perfluorocarbon that is used and entirely 

19 consumed (except for trace quantities) in 

20 the manufacture of other chemicals or 

21 products; 

22 ‘‘(ii) the reuse or recycling of 

23 perfluorocarbon; or 


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1 ‘‘(iii) the emission of perfluorocarbon 

2 from use in production processes, such as 

3 electronics manufacturing. 

4 ‘‘(C) OFFSET CREDIT.—The term ‘offset 

5 credit’ means reduction of perfluorocarbon 

6 emissions by destruction or conversionary use of 

7 perfluorocarbons during production processes, 

8 such as electronics manufacturing. 

9 ‘‘(b) DETERMINATION BY ADMINISTRATOR.—As soon 

10 as practicable after the date of enactment of this section, 

11 the Administrator shall determine, based on such criteria 

12 as the Administrator determines to be appropriate, wheth13 er emissions from the production and consumption of 

14 perfluorocarbon should be regulated in accordance with— 

15 ‘‘(1) this section; or 

16 ‘‘(2) the other applicable provisions of this title. 

17 ‘‘(c) EFFECT OF DETERMINATION.—On a determina18 tion by the Administrator under subsection (a)(1) that 

19 perfluorocarbon emissions described in subsection (b) 

20 should be regulated in accordance with this section— 

21 ‘‘(1) emissions from the production of 

22 perfluorocarbon shall be subject to the best available 

23 control technology (as defined in section 169) for 

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1 cilities emitting 25,000 metric tons of carbon dioxide 

2 equivalent perfluorocarbon emissions or more; and 

3 ‘‘(2) the consumption of perfluorocarbon shall 

4 be phased down in accordance with this section. 

5 ‘‘(d) USE AND CONSUMPTION.— 

6 ‘‘(1) PHASE-DOWNS.— 

7 ‘‘(A) CONSUMPTION.— 

8 ‘‘(i) IN GENERAL.—With respect to 

9 perfluorocarbon, not later than 18 months 

10 after the date of enactment of this section, 

11 the Administrator shall promulgate regula12 tions phasing down, in accordance with 

13 this section— 

14 ‘‘(I) the consumption of 

15 perfluorocarbon in the United States; 

16 and 

17 ‘‘(II) the importation into the 

18 United States of products containing 

19 any perfluorocarbon. 

20 ‘‘(ii) PROHIBITION.—Effective begin21 ning on January 1, 2014, it shall be un22 lawful for any person to produce any per23 fluorocarbon, import any perfluorocarbon, 

24 or import any product containing 

25 perfluorocarbon, unless the person holds 1 


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1 consumption allowance or 1 offset credit 

2 for each carbon dioxide equivalent ton of 

3 the perfluorocarbon destroyed. 

4 ‘‘(iii) RETIRED ALLOWANCES.—Any 

5 person who exports a perfluorocarbon for 

6 which a use allowance was retired may re7 ceive a refund of that allowance from the 

8 Administrator after the date of export. 

9 ‘‘(B) INTEGRITY OF LIMITS.—To maintain 

10 the integrity of the perfluorocarbon limits under 

11 this paragraph, the Administrator may limit, by 

12 regulation, the percentage of the compliance ob13 ligation of any person that may be met through 

14 the consumption of offset credits or banked al15 lowances. 

16 ‘‘(C) COUNTING OF VIOLATIONS.—Each 

17 consumption allowance or offset credit not held 

18 as required by this subsection shall be a sepa19 rate violation of this section. 

20 ‘‘(2) SCHEDULE.—Pursuant to the regulations 

21 promulgated under paragraph (1)(A), the number of 

22 perfluorocarbon consumption allowances available for 

23 distribution for each calendar year beginning in cal24 endar year 2014 shall be established by the Adminis25 trator. 


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1 ‘‘(3) BASELINE.— 

2 ‘‘(A) IN GENERAL.—Not later than 1 year 

3 after the date of enactment of this section, the 

4 Administrator shall promulgate regulations to 

5 establish the baseline for purposes of paragraph 

6 (2). 

7 ‘‘(B) CALCULATION.—The baseline shall 

8 be— 

9 ‘‘(i) the sum, expressed in metric tons 

10 of carbon dioxide equivalents, of— 

11 ‘‘(I) the average of the annual 

12 consumption of all perfluorocarbon in 

13 each of calendar years 2004, 2005, 

14 and 2006; and 

15 ‘‘(II) the annual average quantity 

16 of all perfluorocarbon contained in im17 ported products during the period of 

18 calendar years 2004, 2005, and 2006; 

19 or 

20 ‘‘(ii) such alternative quantity of car21 bon dioxide equivalents that, as determined 

22 by the Administrator, more accurately re23 flects the average annual quantity of 

24 perfluorocarbon consumed in and imported 

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1 ucts), as based on information compiled by 

2 the Administrator. 

3 ‘‘(4) DISTRIBUTION OF ALLOWANCES.—The 

4 Administrator shall determine an allocation, and 

5 procedures for the distribution, transfer, and ex6 change of allowances for the consumption of 

7 perfluorocarbon under this section, including a de8 termination of whether allowances may be auctioned, 

9 sold, or allocated and distributed at no cost, trans10 ferred, or exchanged for domestic or international 

11 consumption, in accordance with such criteria as the 

12 Administrator considers to be appropriate. 

13 ‘‘(e) IMPLEMENTATION.—To the maximum extent 

14 practicable, the Administrator shall implement this section 

15 in accordance with the procedures described in section 

16 619. 

17 ‘‘(f) DEADLINES FOR COMPLIANCE.—The Adminis18 trator shall promulgate regulations for perfluorocarbon in 

19 accordance with this section by not later than October 31, 

20 2013. 

21 ‘‘PART C—PROGRAM RULES 

22 ‘‘SEC. 721. EMISSION ALLOWANCES. 

23 ‘‘(a) IN GENERAL.—The Administrator shall estab24 lish a separate quantity of emission allowances for each 


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1 calendar year starting in 2012, in the amounts prescribed 

2 under subsection (e). 

3 ‘‘(b) IDENTIFICATION NUMBERS.—The Adminis4 trator shall assign to each emission allowance established 

5 under subsection (a) a unique identification number that 

6 includes the vintage year for that emission allowance. 

7 ‘‘(c) LEGAL STATUS OF EMISSION ALLOWANCES.— 

8 ‘‘(1) IN GENERAL.—An allowance established 

9 by the Administrator under this title does not con10 stitute a property right. 

11 ‘‘(2) TERMINATION OR LIMITATION.—Nothing 

12 in this Act or any other provision of law shall be 

13 construed to limit or alter the authority of the 

14 United States, including the Administrator acting 

15 pursuant to statutory authority, to terminate or 

16 limit allowances, offset credits, or term offset cred17 its. 

18 ‘‘(3) OTHER PROVISIONS UNAFFECTED.—Ex19 cept as otherwise specified in this Act, nothing in 

20 this Act relating to allowances, offset credits, or 

21 term offset credits established or issued under this 

22 title shall affect the application of any other provi23 sion of law to a covered entity, or the responsibility 

24 for a covered entity to comply with any such provi25 sion of law. 


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1 ‘‘(d) SAVINGS PROVISION.—Nothing in this part shall 

2 be construed as requiring a change of any kind in any 

3 State law regulating electric utility rates and charges, or 

4 as affecting any State law regarding such State regula5 tion, or as limiting State regulation (including any 

6 prudency review) under such a State law. Nothing in this 

7 part shall be construed as modifying the Federal Power 

8 Act (16 U.S.C. 791a et seq.) or as affecting the authority 

9 of the Federal Energy Regulatory Commission under that 

10 Act. Nothing in this part shall be construed to interfere 

11 with or impair any program for competitive bidding for 

12 power supply in a State in which such program is estab13 lished. 

14 ‘‘(e) ALLOWANCES FOR EACH CALENDAR YEAR.— 

15 ‘‘(1) IN GENERAL.—Except as provided in para16 graph (2), the number of emission allowances estab17 lished by the Administrator under subsection (a) for 

18 each calendar year shall be as provided in the fol19 lowing table: 

‘‘Calendar Year Emissions Allowances (MtCO2e) 

2012 ....................................................................... 4,627 

2013 ....................................................................... 4,544 

2014 ....................................................................... 5,099 

2015 ....................................................................... 5,003 

2016 ....................................................................... 5,482 

2017 ....................................................................... 5,261 

2018 ....................................................................... 5,132 

2019 ....................................................................... 5,002 

2020 ....................................................................... 4,873 

2021 ....................................................................... 4,739 

2022 ....................................................................... 4,605 

2023 ....................................................................... 4,471 


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2024 ....................................................................... 4,337 

2025 ....................................................................... 4,203 

2026 ....................................................................... 4,069 

2027 ....................................................................... 3,935 

2028 ....................................................................... 3,801 

2029 ....................................................................... 3,667 

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 ....................................................................... 1,035 

1 ‘‘(2) REVISION.— 

2 ‘‘(A) IN GENERAL.—The Administrator 

3 may adjust, in accordance with subparagraph 

4 (B), the number of emission allowances estab5 lished pursuant to paragraph (1) if, after notice 

6 and an opportunity for public comment, the Ad7 ministrator determines that— 

8 ‘‘(i) United States greenhouse gas 

9 emissions in 2005 were other than 7,206 

10 million metric tons carbon dioxide equiva11 lent; 

12 ‘‘(ii) if the requirements of this title 

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1 tion 722 would have required emission al2 lowances to be held for other than 66.2 

3 percent of United States greenhouse gas 

4 emissions in 2005; 

5 ‘‘(iii) if the requirements of this title 

6 for 2014 had been in effect in 2005, sec7 tion 722 would have required emission al8 lowances to be held for other than 75.7 

9 percent of United States greenhouse gas 

10 emissions in 2005; or 

11 ‘‘(iv) if the requirements of this title 

12 for 2016 had been in effect in 2005, sec13 tion 722 would have required emission al14 lowances to be held for other than 84.5 

15 percent United States greenhouse gas 

16 emissions in 2005. 

17 ‘‘(B) ADJUSTMENT FORMULA.— 

18 ‘‘(i) IN GENERAL.—If the Adminis19 trator adjusts under this paragraph the 

20 number of emission allowances established 

21 pursuant to paragraph (1), the number of 

22 emission allowances the Administrator es23 tablishes for any given calendar year shall 

24 equal the product of— 


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1 ‘‘(I) United States greenhouse 

2 gas emissions in 2005, expressed in 

3 tons of carbon dioxide equivalent; 

4 ‘‘(II) the percent of United 

5 States greenhouse gas emissions in 

6 2005, expressed in tons of carbon di7 oxide equivalent, that would have been 

8 subject to section 722 if the require9 ments of this title for the given cal10 endar year had been in effect in 2005; 

11 and 

12 ‘‘(III) the percentage set forth 

13 for that calendar year in section 

14 703(a), or determined under clause 

15 (ii) of this subparagraph. 

16 ‘‘(ii) TARGETS.—In applying the por17 tion of the formula in clause (i)(III) of this 

18 subparagraph, for calendar years for which 

19 a percentage is not listed in section 703(a), 

20 the Administrator shall use a uniform an21 nual decline in the amount of emissions be22 tween the years that are specified. 

23 ‘‘(iii) CARBON DIOXIDE EQUIVALENT

24 VALUE.—If the Administrator adjusts 

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1 sion allowances established pursuant to 

2 paragraph (1), the Administrator shall use 

3 the carbon dioxide equivalent values estab4 lished pursuant to section 712. 

5 ‘‘(iv) LIMITATION ON ADJUSTMENT

6 TIMING.—Once a calendar year has start7 ed, the Administrator may not adjust the 

8 number of emission allowances to be estab9 lished for that calendar year. 

10 ‘‘(C) LIMITATION ON ADJUSTMENT AU11 THORITY.—The Administrator may adjust 

12 under this paragraph the number of emission 

13 allowances to be established pursuant to para14 graph (1) only once. 

15 ‘‘(f) COMPENSATORY ALLOWANCE.— 

16 ‘‘(1) IN GENERAL.—The regulations promul17 gated under subsection (h) shall provide for the es18 tablishment and distribution of compensatory allow19 ances for— 

20 ‘‘(A) the destruction, in 2012 or later, of 

21 fluorinated gases that are greenhouse gases if— 

22 ‘‘(i) allowances or offset credits were 

23 retired for their production or importation; 

24 and 


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1 ‘‘(ii) such gases are not required to be 

2 destroyed under any other provision of law; 

3 ‘‘(B) the nonemissive use, in 2012 or later, 

4 of petroleum-based or coal-based liquid or gas5 eous fuel, petroleum coke, natural gas liquid, or 

6 natural gas as a feedstock, if allowances or off7 set credits were retired for the greenhouse 

8 gases that would have been emitted from their 

9 combustion; and 

10 ‘‘(C) the conversionary use, in 2012 or 

11 later, of fluorinated gases in a manufacturing 

12 process, including semiconductor research or 

13 manufacturing, if allowances or offset credits 

14 were retired for the production or importation 

15 of such gas. 

16 ‘‘(2) ESTABLISHMENT AND DISTRIBUTION.— 

17 ‘‘(A) IN GENERAL.—Not later than 90 

18 days after the end of each calendar year, the 

19 Administrator shall establish and distribute to 

20 the entity taking the actions described in sub21 paragraph (A), (B), or (C) of paragraph (1) a 

22 quantity of compensatory allowances equivalent 

23 to the number of tons of carbon dioxide equiva24 lent of avoided emissions achieved through such 

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1 satory allowances, the Administrator shall take 

2 into account the carbon dioxide equivalent value 

3 of any greenhouse gas resulting from such ac4 tion. 

5 ‘‘(B) SOURCE OF ALLOWANCES.—Compen6 satory allowances established under this sub7 section shall not be emission allowances estab8 lished under subsection (a). 

9 ‘‘(C) IDENTIFICATION NUMBERS.—The 

10 Administrator shall assign to each compen11 satory allowance established under subpara12 graph (A) a unique identification number. 

13 ‘‘(3) DEFINITIONS.—For purposes of this sub14 section— 

15 ‘‘(A) the term ‘destruction’ means the con16 version of a greenhouse gas by thermal, chem17 ical, or other means to another gas or set of 

18 gases with little or no carbon dioxide equivalent 

19 value; 

20 ‘‘(B) the term ‘nonemissive use’ means the 

21 use of fossil fuel as a feedstock in an industrial 

22 or manufacturing process to the extent that 

23 greenhouse gases are not emitted from such 

24 process, and to the extent that the products of 


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1 such process are not intended for use as, or to 

2 be contained in, a fuel; and 

3 ‘‘(C) the term ‘conversionary use’ means 

4 the conversion during research or manufac5 turing of a fluorinated gas into another green6 house gas or set of gases with a lower carbon 

7 dioxide equivalent value. 

8 ‘‘(4) FEEDSTOCK EMISSIONS STUDY.— 

9 ‘‘(A) The Administrator may conduct a 

10 study to determine the extent to which petro11 leum-based or coal-based liquid or gaseous fuel, 

12 petroleum coke, natural gas liquid, or natural 

13 gas are used as feedstocks in manufacturing 

14 processes to produce products and the green15 house gas emissions resulting from such uses. 

16 ‘‘(B) If as a result of such a study, the Ad17 ministrator determines that the use of such 

18 products by noncovered sources results in sub19 stantial emissions of greenhouse gases or their 

20 precursors and that such emissions have not 

21 been adequately addressed under other require22 ments of this Act, the Administrator may, after 

23 notice and comment rulemaking, promulgate a 

24 regulation reducing compensatory allowances 


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1 commensurately if doing so will not result in 

2 leakage. 

3 ‘‘(g) FLUORINATED GASES ASSESSMENT.— 

4 ‘‘(1) IN GENERAL.—Not later than March 31, 

5 2014, the Administrator shall conduct an assess6 ment of the regulation of non-hydrofluorocarbon 

7 fluorinated gases under this title (excluding 

8 perfluorocarbon) to determine whether the most ap9 propriate point of regulation of those gases is at— 

10 ‘‘(A) the gas manufacturer or importer 

11 level; or 

12 ‘‘(B) the downstream source of the emis13 sions. 

14 ‘‘(2) MODIFICATION OF DEFINITION.—If the 

15 Administrator determines, based on consideration of 

16 environmental effectiveness, cost-effectiveness, ad17 ministrative feasibility, extent of coverage of emis18 sions, and competitiveness considerations, that emis19 sions of non-hydrofluorocarbon fluorinated gases (ex20 cluding perfluorocarbons) can best be regulated by 

21 designating downstream emission sources as covered 

22 entities with compliance obligations under section 

23 722, the Administrator shall— 

24 ‘‘(A) after providing notice and an oppor25 tunity for comment, modify the definition of the 


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1 term ‘covered entity’ with respect to fluorinated 

2 gases (other than hydrofluorocarbons and 

3 perfluorocarbons) accordingly; and 

4 ‘‘(B) establish such requirements as are 

5 necessary to ensure compliance by the covered 

6 entities with the requirements of this title. 

7 ‘‘(h) REGULATIONS.—Not later than 24 months after 

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

9 promulgate regulations to carry out the provisions of this 

10 title. 

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(13)(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 or gas derived 

18 from renewable biomass; or 

19 ‘‘(D) petroleum coke. 

20 ‘‘(2) FUEL PRODUCERS AND IMPORTERS.—For 

21 a covered entity described in section 700(13)(B), 1 

22 emission allowance for each ton of carbon dioxide 

23 equivalent of greenhouse gas that would be emitted 

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1 uid, produced or imported by such covered entity 

2 during the previous calendar year for sale or dis3 tribution in interstate commerce, assuming no cap4 ture and sequestration of any greenhouse gas emis5 sions. 

6 ‘‘(3) INDUSTRIAL GAS PRODUCERS AND IM7 PORTERS.—For a covered entity described in section 

8 700(13)(C), 1 emission allowance for each ton of 

9 carbon dioxide equivalent of fossil fuel-based carbon 

10 dioxide, nitrous oxide, or any other fluorinated gas 

11 that is a greenhouse gas (except for nitrogen 

12 trifluoride), or any combination thereof, produced or 

13 imported by such covered entity during the previous 

14 calendar year for sale or distribution in interstate 

15 commerce or released as fugitive emissions in the 

16 production of fluorinated gas. 

17 ‘‘(4) NITROGEN TRIFLUORIDE SOURCES.—For 

18 a covered entity described in section 700(13)(D), 1 

19 emission allowance for each ton of carbon dioxide 

20 equivalent of nitrogen trifluoride that such covered 

21 entity emitted in the previous calendar year. 

22 ‘‘(5) GEOLOGICAL SEQUESTRATION SITES.—For 

23 a covered entity described in section 700(13)(E), 1 

24 emission allowance for each ton of carbon dioxide 


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1 equivalent of greenhouse gas that such covered enti2 ty emitted in the previous calendar year. 

3 ‘‘(6) INDUSTRIAL STATIONARY SOURCES.—For 

4 a covered entity described in section 700(13)(F), 

5 (G), or (H), 1 emission allowance for each ton of 

6 carbon dioxide equivalent of greenhouse gas that 

7 such covered entity emitted in the previous calendar 

8 year, excluding emissions resulting from— 

9 ‘‘(A) the combustion of petroleum-based or 

10 coal-based liquid fuel; 

11 ‘‘(B) the combustion of natural gas liquid; 

12 ‘‘(C) the combustion of renewable biomass 

13 or gas derived from renewable biomass; 

14 ‘‘(D) the combustion of petroleum coke; or 

15 ‘‘(E) the use of any fluorinated gas that is 

16 a greenhouse gas purchased for use at that cov17 ered entity, except for nitrogen trifluoride. 

18 ‘‘(7) INDUSTRIAL FOSSIL FUEL-FIRED COMBUS19 TION DEVICES.—For a covered entity described in 

20 section 700(13)(I), 1 emission allowance for each 

21 ton of carbon dioxide equivalent of greenhouse gas 

22 that the devices emitted in the previous calendar 

23 year, excluding emissions resulting from the combus24 tion of— 


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1 ‘‘(A) petroleum-based or coal-based liquid 

2 fuel; 

3 ‘‘(B) natural gas liquid; 

4 ‘‘(C) renewable biomass or gas derived 

5 from renewable biomass; or 

6 ‘‘(D) petroleum coke. 

7 ‘‘(8) NATURAL GAS LOCAL DISTRIBUTION COM8 PANIES.—For a covered entity described in section 

9 700(13)(J), 1 emission allowance for each ton of 

10 carbon dioxide equivalent of greenhouse gas that 

11 would be emitted from the combustion of the natural 

12 gas, and any other gas meeting the specifications for 

13 commingling with natural gas for purposes of deliv14 ery, that such entity delivered during the previous 

15 calendar year to customers that are not covered enti16 ties, assuming no capture and sequestration of that 

17 greenhouse gas. 

18 ‘‘(9) R&D FACILITIES.— 

19 ‘‘(A) IN GENERAL.—For a qualified R&D 

20 facility that emitted 25,000 tons per year or 

21 more carbon dioxide equivalent in the previous 

22 calendar year, 1 emission allowance for each 

23 ton of carbon dioxide equivalent of greenhouse 

24 gas that such facility emitted in the previous 

25 calendar year. 


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1 ‘‘(B) TREATMENT.—A qualified R&D facil2 ity shall be treated as a separate covered entity 

3 solely for purposes of applying the requirements 

4 of this subsection. 

5 ‘‘(10) ALGAE-BASED FUELS.—Where carbon di6 oxide (or another greenhouse gas) is used as an 

7 input in the production of algae-based fuels, the Ad8 ministrator shall ensure that allowances are required 

9 to be held either for the carbon dioxide used to grow 

10 the algae or for the carbon dioxide emitted from 

11 combustion of the fuel produced from such algae, 

12 but not for both. 

13 ‘‘(11) FUGITIVE EMISSIONS.—The greenhouse 

14 gas emissions to which paragraphs (1), (4), (6), and 

15 (7) apply shall not include fugitive emissions of 

16 greenhouse gas, except to the extent the Adminis17 trator determines that data on the carbon dioxide 

18 equivalent value of greenhouse gas in the fugitive 

19 emissions can be provided with sufficient precision, 

20 reliability, accessibility, and timeliness to ensure the 

21 integrity of emission allowances, the allowance track22 ing system, and the limits on emissions. 

23 ‘‘(12) EXPORT EXEMPTION.—This section shall 

24 not apply to any petroleum-based or coal-based liq25 uid fuel, petroleum coke, natural gas liquid, fossil 


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1 fuel-based carbon dioxide, nitrous oxide, or 

2 fluorinated gas that is exported for sale or use. 

3 ‘‘(13) NATURAL GAS LIQUIDS.—Notwith4 standing subsection (a), if the owner or operator of 

5 a covered entity described in section 700(13)(B) 

6 that produces natural gas liquids does not take own7 ership of the liquids, and is not responsible for the 

8 distribution or use of the liquids in commerce, the 

9 owner of the liquids shall be responsible for compli10 ance with this section, section 723, and other rel11 evant sections of this title with respect to such liq12 uids. In the regulations promulgated under section 

13 721, the Administrator shall include such provisions 

14 with respect to such liquids as the Administrator de15 termines are appropriate to determine and ensure 

16 compliance, and to penalize noncompliance. In such 

17 a case, the owner of the covered entity shall provide 

18 to the Administrator, in a manner to be determined 

19 by the Administrator, information regarding the 

20 quantity and ownership of liquids produced at the 

21 covered entity. 

22 ‘‘(14) APPLICATION OF MULTIPLE PARA23 GRAPHS.—For a covered entity to which more than 

24 1 of paragraphs (1) through (8) apply, all applicable 

25 paragraphs shall apply, except that not more than 1 


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1 emission allowance shall be required for the same 

2 emission. 

3 ‘‘(c) PHASE-IN OF PROHIBITION.— 

4 ‘‘(1) INDUSTRIAL STATIONARY SOURCES.—The 

5 prohibition under subsection (a) shall first apply to 

6 a covered entity described in section 700(13)(D), 

7 (F), (G), (H), or (I), with respect to emissions oc8 curring during calendar year 2014. 

9 ‘‘(2) NATURAL GAS LOCAL DISTRIBUTION COM10 PANIES.—The prohibition under subsection (a) shall 

11 first apply to a covered entity described in section 

12 700(13)(J) with respect to deliveries occurring dur13 ing calendar year 2016. 

14 ‘‘(d) ADDITIONAL METHODS.—In addition to using 

15 the method of compliance described in subsection (b), a 

16 covered entity may do the following: 

17 ‘‘(1) OFFSET CREDITS.— 

18 ‘‘(A) CREDITS.— 

19 ‘‘(i) IN GENERAL.—Covered entities 

20 collectively may, in accordance with this 

21 paragraph, use offset credits to dem22 onstrate compliance for up to a maximum 

23 of 2,000,000,000 tons of greenhouse gas 

24 emissions annually. 


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1 ‘‘(ii) DEMONSTRATION OF COMPLI2 ANCE.—In any calendar year, a covered 

3 entity may demonstrate compliance by 

4 holding 1 domestic offset credit or 1.25 

5 international offset credits in lieu of an 

6 emission allowance, except as provided in 

7 subparagraph (D), up to a total number of 

8 offset credits described in subparagraph 

9 (B). 

10 ‘‘(B) APPLICABLE PERCENTAGE.— 

11 ‘‘(i) IN GENERAL.—The total number 

12 of offset credits referred to in subpara13 graph (A)(ii) for a covered entity for a 

14 given calendar year shall be determined 

15 by— 

16 ‘‘(I) dividing— 

17 ‘‘(aa) the tons of carbon di18 oxide equivalent of greenhouse 

19 gas emissions of the covered enti20 ty (except for the types of emis21 sions excluded under subpara22 graphs (A) through (D) of sub23 section (b)(1), subparagraphs (A) 

24 through (E) of subsection (b)(6), 

25 and subparagraphs (A) through 


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1 (D) of subsection (b)(7)) and at2 tributable greenhouse gas emis3 sions for the year before the pre4 ceding calendar year; by 

5 ‘‘(bb) the sum of the tons of 

6 carbon dioxide equivalent of 

7 greenhouse gas emissions of all 

8 covered entities (except for the 

9 types of emissions excluded under 

10 subparagraphs (A) through (D) 

11 of subsection (b)(1), subpara12 graphs (A) through (E) of sub13 section (b)(6), and subpara14 graphs (A) through (D) of sub15 section (b)(7)) and attributable 

16 greenhouse gas emissions for the 

17 year before the preceding cal18 endar year; and 

19 ‘‘(II) multiplying the quotient ob20 tained under subclause (I) by 

21 2,000,000,000. 

22 ‘‘(ii) APPLICABILITY.—Clause (i) shall 

23 apply to a covered entity (including a cov24 ered entity that commenced operation dur25 ing the preceding calendar year) even if 


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1 the covered entity had no greenhouse gas 

2 emissions or attributable greenhouse gas 

3 emissions described in that clause. 

4 ‘‘(iii) OFFSET CREDITS.—Not more 

than 3 5 ⁄4 of the applicable percentage under 

6 this paragraph may be used by holding domestic offset credits, and not more than 1 7 ⁄4

8 of the applicable percentage under this 

9 paragraph may be used by holding inter10 national offset credits, except as provided 

11 in subparagraph (C). 

12 ‘‘(C) MODIFIED PERCENTAGES.—If the 

13 Administrator determines that domestic offset 

14 credits available for use in demonstrating com15 pliance in any calendar year at domestic offset 

16 prices generally equal to or less than allowance 

17 prices, are likely to offset less than 900,000,000 

18 tons of greenhouse gas emissions (measured in 

19 tons of carbon dioxide equivalents), the Admin20 istrator shall increase the percent of emissions 

21 that can be offset through the use of inter22 national offset credits (and decrease the percent 

23 of emissions that can be allowed through the 

24 use of domestic offset credits by the same 

25 amount) to reflect the amount that 


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1 1,500,000,000 exceeds the number of domestic 

2 offset credits the Administrator determines is 

3 available for that year, up to a maximum of 

4 750,000,000 tons of greenhouse gas emissions. 

5 ‘‘(D) INTERNATIONAL OFFSET CREDITS.— 

6 Notwithstanding subparagraph (A), to dem7 onstrate compliance prior to calendar year 

8 2018, a covered entity may use 1 international 

9 offset credit in lieu of an emission allowance up 

10 to the amount permitted under this paragraph. 

11 ‘‘(E) PRESIDENT’S RECOMMENDATION.— 

12 The President may make a recommendation to 

13 Congress as to whether the number 

14 2,000,000,000 specified in subparagraphs (A) 

15 and (B) should be increased or decreased. 

16 ‘‘(2) TERM OFFSET CREDITS.— 

17 ‘‘(A) IN GENERAL.—Covered entities may, 

18 in accordance with this paragraph, use non-ex19 pired term offset credits instead of domestic 

20 offset credits for purposes of temporarily dem21 onstrating compliance with this section. 

22 ‘‘(B) AMOUNT.—The combined quantity of 

23 term offset credits and domestic offset credits 

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1 house gas emissions in any given year shall not 

2 exceed the quantity of domestic offset credits 

3 that a covered entity is entitled to use for that 

4 year to demonstrate compliance in accordance 

5 with paragraph (1). 

6 ‘‘(C) EXPIRATION.—A term offset credit 

7 shall expire in the year after its term ends. The 

8 term of a term offset credit shall be calculated 

9 by adding to the year of issuance the number 

10 of years equal to the length of the crediting pe11 riod for the practice or project for which the 

12 term offset credit was issued, but in no case 

13 shall be later than the date 5 years from the 

14 date of issuance. 

15 ‘‘(D) DEMONSTRATING COMPLIANCE UPON

16 EXPIRATION OF TERM OFFSET CREDIT.—With 

17 respect to the emissions for which a covered en18 tity is using term offset credits to demonstrate 

19 compliance temporarily with this section, the 

20 owner or operator of a covered entity shall not 

21 be considered to be in compliance with the pro22 hibition in subsection (a) unless, as of 12:01 

23 a.m. on April 1 (or a later date established by 

24 the Administrator under subsection (j)) of the 


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1 calendar year in which a term offset credit ex2 pires, the owner or operator holds— 

3 ‘‘(i) for purposes of finally dem4 onstrating compliance, an allowance or a 

5 domestic offset credit; or 

6 ‘‘(ii) for purposes of temporarily dem7 onstrating compliance, a non-expired term 

8 offset credit. 

9 ‘‘(E) INAPPLICABILITY OF PERCENTAGE

10 LIMITATIONS.—Domestic offset credits used for 

11 purposes of finally demonstrating compliance 

12 under this subparagraph shall not be subject to 

13 the percentage limitations in subparagraph (B). 

14 ‘‘(F) FINANCIAL ASSURANCE.—A covered 

15 entity may not use a term offset credit to dem16 onstrate compliance temporarily unless it simul17 taneously provides to the Administrator finan18 cial assurance that, at the end of the term off19 set credit‘s crediting term, the covered entity 

20 will have sufficient resources to obtain the 

21 quantity of allowances or credits necessary to 

22 demonstrate final compliance. The Adminis23 trator shall issue regulations establishing re24 quirements for such financial assurance, which 

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1 ciated with longer crediting terms. These regu2 lations shall take into account the total number 

3 of tons of carbon dioxide equivalent of green4 house gas emissions for which a covered entity 

5 is demonstrating compliance temporarily, and 

6 may set a limit on this amount. In the event 

7 that a covered entity that used term offset cred8 its to demonstrate compliance temporarily fails 

9 to meet the requirements of subparagraph (D) 

10 at the end of the term offset credits’ crediting 

11 term, if the financial assurance mechanism fails 

12 to provide to the Administrator the number of 

13 allowances or offset credits for which the cred14 iting term has expired, then the Administrator 

15 shall retire that number of allowances with the 

16 vintage year 2 years after the year in which the 

17 term offset credit expires in the same amount. 

18 Allowances so retired shall not be counted as 

19 emission allowances established for that cal20 endar year under section 721(a). 

21 ‘‘(3) INTERNATIONAL EMISSION ALLOW22 ANCES.—To demonstrate compliance, a covered enti23 ty may hold an international emission allowance in 

24 lieu of an emission allowance, except as modified 

25 under section 728(d). 


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1 ‘‘(4) COMPENSATORY ALLOWANCES.—To dem2 onstrate compliance, a covered entity may hold a 

3 compensatory allowance obtained under section 

4 721(f) in lieu of an emission allowance. 

5 ‘‘(e) RETIREMENT OF ALLOWANCES AND CREDITS.— 

6 As soon as practicable after a deadline established for cov7 ered entities to demonstrate compliance with this title, the 

8 Administrator shall retire the quantity of allowances or 

9 credits required to be held under this title. 

10 ‘‘(f) ALTERNATIVE METRICS.—For categories of cov11 ered entities described in subparagraph (B), (C), (D), (G), 

12 (H), or (I) of section 700(13), the Administrator may, by 

13 rule, establish an applicability threshold for inclusion 

14 under those subparagraphs using an alternative metric 

15 and level, provided that such metric and level are easier 

16 to administer and cover the same size and type of sources 

17 as the threshold defined in such subparagraphs. 

18 ‘‘(g) THRESHOLD REVIEW.—For each category of 

19 covered entities described in subparagraph (B), (C), (D), 

20 (G), (H), or (I) of section 700(13), the Administrator 

21 shall, in 2020 and once every 8 years thereafter, review 

22 the carbon dioxide equivalent emission thresholds that are 

23 used to define covered entities. After consideration of— 

24 ‘‘(1) emissions from covered entities in each 

25 such category, and from other entities of the same 


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1 type that emit less than the threshold amount for 

2 the category (including emission sources that com3 mence operation after the date of enactment of this 

4 title that are not covered entities); and 

5 ‘‘(2) whether greater greenhouse gas emission 

6 reductions can be cost-effectively achieved by low7 ering the applicable threshold, 

8 the Administrator may by rule lower such threshold to not 

9 less than 10,000 tons of carbon dioxide equivalent emis10 sions. In determining the cost effectiveness of potential re11 ductions from lowering the threshold for covered entities, 

12 the Administrator shall consider alternative regulatory 

13 greenhouse gas programs, including setting standards 

14 under other titles of this Act. 

15 ‘‘(h) DESIGNATED REPRESENTATIVES.—The regula16 tions promulgated under section 721(h) shall require that 

17 each covered entity, and each entity holding allowances or 

18 credits or receiving allowances or credits from the Admin19 istrator under this title, select a designated representative. 

20 ‘‘(i) EDUCATION AND OUTREACH.— 

21 ‘‘(1) IN GENERAL.—The Administrator shall es22 tablish and carry out a program of education and 

23 outreach to assist covered entities, especially entities 

24 having little experience with environmental regu25 latory requirements similar or comparable to those 


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1 under this title, in preparing to meet the compliance 

2 obligations of this title. Such program shall include 

3 education with respect to using markets to effec4 tively achieve such compliance. 

5 ‘‘(2) FAILURE TO RECEIVE INFORMATION.—A 

6 failure to receive information or assistance under 

7 this subsection may not be used as a defense against 

8 an allegation of any violation of this title. 

9 ‘‘(j) ADJUSTMENT OF DEADLINE.—The Adminis10 trator may, by rule, establish a deadline for demonstrating 

11 compliance, for a calendar year, later than the date pro12 vided in subsection (a), as necessary to ensure the avail13 ability of emissions data, but in no event shall the deadline 

14 be later than June 1. 

15 ‘‘(k) NOTICE REQUIREMENT FOR COVERED ENTI16 TIES RECEIVING NATURAL GAS FROM NATURAL GAS

17 LOCAL DISTRIBUTION COMPANIES.—The owner or oper18 ator of a covered entity that takes delivery of natural gas 

19 from a natural gas local distribution company shall, not 

20 later than September 1 of each calendar year, notify such 

21 natural gas local distribution company in writing that 

22 such entity will qualify as a covered entity under this title 

23 for that calendar year. 

24 ‘‘(l) COMPLIANCE OBLIGATION.—For purposes of 

25 this title, the year of a compliance obligation is the year 


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1 in which compliance is determined, not the year in which 

2 the greenhouse gas emissions occur or the covered entity 

3 has attributable greenhouse gas emissions. 

4 ‘‘SEC. 723. PENALTY FOR NONCOMPLIANCE. 

5 ‘‘(a) ENFORCEMENT.—A violation of any prohibition 

6 of, requirement of, or regulation promulgated pursuant to 

7 this title shall be a violation of this Act. It shall be a viola8 tion of this Act for a covered entity to emit greenhouse 

9 gases, and have attributable greenhouse gas emissions, in 

10 combination, in excess of its allowable emissions level as 

11 provided in section 722(a). Each ton of carbon dioxide 

12 equivalent for which a covered entity fails to demonstrate 

13 compliance under section 722(b) shall be a separate viola14 tion. In the event that a covered entity fails to dem15 onstrate compliance at the expiration of a term of offset 

16 credits crediting term as required by section 722(d)(2)(D), 

17 the year of the violation shall be the year in which the 

18 term offset credit expires. 

19 ‘‘(b) EXCESS EMISSIONS PENALTY.— 

20 ‘‘(1) IN GENERAL.—The owner or operator of 

21 any covered entity that fails for any year to comply, 

22 on the deadline described in section 722(a) or (j), 

23 shall be liable for payment to the Administrator of 

24 an excess emissions penalty in the amount described 

25 in paragraph (2). 


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1 ‘‘(2) AMOUNT.—The amount of an excess emis2 sions penalty required to be paid under paragraph 

3 (1) shall be equal to the product obtained by multi4 plying— 

5 ‘‘(A) the tons of carbon dioxide equivalent 

6 of greenhouse gas emissions or attributable 

7 greenhouse gas emissions for which the owner 

8 or operator of a covered entity failed to comply 

9 under section 722(b) on the deadline; by 

10 ‘‘(B) twice the fair market value of emis11 sion allowances established for emissions occur12 ring in the calendar year for which the emission 

13 allowances were due. 

14 ‘‘(3) TIMING.—An excess emissions penalty re15 quired under this subsection shall be immediately 

16 due and payable to the Administrator, without de17 mand, in accordance with regulations promulgated 

18 by the Administrator, which shall be issued not later 

19 than 2 years after the date of enactment of this 

20 title. 

21 ‘‘(4) NO EFFECT ON LIABILITY.—An excess 

22 emissions penalty due and payable by the owners or 

23 operators of a covered entity under this subsection 

24 shall not diminish the liability of the owners or oper25 ators for any fine, penalty, or assessment against 


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1 the owners or operators for the same violation under 

2 any other provision of this Act or any other law. 

3 ‘‘(c) EXCESS EMISSIONS ALLOWANCES.—The owner 

4 or operator of a covered entity that fails for any year to 

5 comply on the deadline described in section 722(a) or (j) 

6 shall be liable to offset the covered entity’s excess com7 bination of greenhouse gases emitted and attributable 

8 greenhouse gas emissions by an equal quantity of emission 

9 allowances during the following calendar year, or such 

10 longer period as the Administrator may prescribe. During 

11 the year in which the covered entity failed to comply, or 

12 any year thereafter, the Administrator may deduct the 

13 emission allowances required under this subsection to off14 set the covered entity’s excess actual or attributable emis15 sions. 

16 ‘‘SEC. 724. TRADING. 

17 ‘‘(a) PERMITTED TRANSACTIONS.—Except as other18 wise provided in this title, the lawful holder of an emission 

19 allowance, compensatory allowance, or offset credit may, 

20 without restriction, sell, exchange, transfer, hold for com21 pliance in accordance with section 722, or request that the 

22 Administrator retire the emission allowance, compensatory 

23 allowance, or offset credit. 

24 ‘‘(b) NO RESTRICTION ON TRANSACTIONS.—The 

25 privilege of purchasing, holding, selling, exchanging, 


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1 transferring, and requesting retirement of emission allow2 ances, compensatory allowances, or offset credits shall not 

3 be restricted to the owners and operators of covered enti4 ties, except as otherwise provided in this title. 

5 ‘‘(c) EFFECTIVENESS OF ALLOWANCE TRANS6 FERS.—No transfer of an allowance or offset credit shall 

7 be effective for purposes of this title until a certification 

8 of the transfer, signed by the designated representative of 

9 the transferor, is received and recorded by the Adminis10 trator in accordance with regulations promulgated under 

11 section 721(h). 

12 ‘‘(d) ALLOWANCE TRACKING SYSTEM.—The regula13 tions promulgated under section 721(h) shall include a 

14 system for issuing, recording, holding, and tracking allow15 ances, offset credits, and term offset credits that shall 

16 specify all necessary procedures and requirements for an 

17 orderly and competitive functioning of the allowance and 

18 offset credit markets. Such regulations shall provide for 

19 appropriate publication of the information in the system 

20 on the Internet. 

21 ‘‘SEC. 725. BANKING AND BORROWING. 

22 ‘‘(a) BANKING.—An emission allowance may be used 

23 to comply with section 722 or 723 for emissions in— 

24 ‘‘(1) the vintage year for the allowance; or 


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1 ‘‘(2) any calendar year subsequent to the vin2 tage year for the allowance. 

3 ‘‘(b) EXPIRATION.— 

4 ‘‘(1) REGULATIONS.—The Administrator may 

5 establish by regulation criteria and procedures for 

6 determining whether, and for implementing a deter7 mination that, the expiration of an allowance, credit, 

8 or term offset credit established or issued by the Ad9 ministrator under this title, or expiration of the abil10 ity to use an international emission allowance to 

11 comply with section 722, is necessary to ensure the 

12 authenticity and integrity of allowances, credits, or 

13 term offset credits or the allowance tracking system. 

14 ‘‘(2) GENERAL RULE.—An allowance, credit, or 

15 term offset credit established or issued by the Ad16 ministrator under this title shall not expire unless— 

17 ‘‘(A) it is retired by the Administrator as 

18 required under this title; or 

19 ‘‘(B) it is determined to expire or to have 

20 expired by a specific date by the Administrator 

21 in accordance with regulations promulgated 

22 under paragraph (1). 

23 ‘‘(3) INTERNATIONAL EMISSION ALLOW24 ANCES.—The ability to use an international emission 


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1 allowance to comply with section 722 shall not ex2 pire unless— 

3 ‘‘(A) the allowance is retired by the Ad4 ministrator as required by this title; or 

5 ‘‘(B) the ability to use such allowance to 

6 meet such compliance obligation requirements is 

7 determined to expire or to have expired by a 

8 specific date by the Administrator in accord9 ance with regulations promulgated under para10 graph (1). 

11 ‘‘(c) BORROWING FUTURE VINTAGE YEAR ALLOW12 ANCES.— 

13 ‘‘(1) BORROWING WITHOUT INTEREST.—In ad14 dition to the uses described in subsection (a), an 

15 emission allowance may be used to comply with sec16 tion 722(a) or 723 for emissions, production, impor17 tation, manufacture, or deliveries in the calendar 

18 year immediately preceding the vintage year for the 

19 allowance. 

20 ‘‘(2) BORROWING WITH INTEREST.— 

21 ‘‘(A) IN GENERAL.—A covered entity may 

22 demonstrate compliance under subsection (b) in 

23 a specific calendar year for up to 15 percent of 

24 its emissions by holding emission allowances 


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1 with a vintage year 1 to 5 years later than that 

2 calendar year. 

3 ‘‘(B) LIMITATIONS.—An emission allow4 ance borrowed pursuant to this paragraph shall 

5 be an emission allowance that is established by 

6 the Administrator for a specific future calendar 

7 year under section 721(a) and that is held by 

8 the borrower. 

9 ‘‘(C) PREPAYMENT OF INTEREST.—For 

10 each emission allowance that an owner or oper11 ator of a covered entity borrows pursuant to 

12 this paragraph, such owner or operator shall, at 

13 the time it borrows the allowance, hold for re14 tirement by the Administrator a quantity of 

15 emission allowances that is equal to the product 

16 obtained by multiplying— 

17 ‘‘(i) 0.08; by 

18 ‘‘(ii) the number of years between the 

19 calendar year in which the allowance is 

20 being used to satisfy a compliance obliga21 tion and the vintage year of the allowance. 

22 ‘‘SEC. 726. MARKET STABILITY RESERVE. 

23 ‘‘(a) MARKET STABILITY RESERVE AUCTIONS.— 

24 ‘‘(1) IN GENERAL.—Once each quarter of each 

25 calendar year for which allowances are established 


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1 under section 721(a), the Administrator shall auc2 tion market stability reserve allowances. 

3 ‘‘(2) RESTRICTION TO COVERED ENTITIES.—In 

4 each auction conducted under paragraph (1), only 

5 covered entities that the Administrator expects will 

6 be required to comply with section 722 in the fol7 lowing calendar year shall be eligible to make pur8 chases. 

9 ‘‘(b) POOL OF EMISSION ALLOWANCES FOR MARKET

10 STABILITY RESERVE AUCTIONS.— 

11 ‘‘(1) FILLING THE MARKET STABILITY RE12 SERVE INITIALLY.— 

13 ‘‘(A) IN GENERAL.—The Administrator 

14 shall, not later than 2 years after the date of 

15 enactment of this title, establish a market sta16 bility reserve account, and shall place in that 

17 account an amount of emission allowances es18 tablished under section 721(a). 

19 ‘‘(B) EFFECT ON OTHER PROVISIONS.— 

20 Any provision in this title (except for subpara21 graph (B) of this paragraph) that refers to a 

22 quantity or percentage of the emission allow23 ances established for a calendar year under sec24 tion 721(a) shall be considered to refer to the 

25 amount of emission allowances as determined 


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1 pursuant to section 721(e), less any emission 

2 allowances established for that year that are 

3 placed in the market stability reserve account 

4 under this paragraph. 

5 ‘‘(2) SUPPLEMENTING THE MARKET STABILITY

6 RESERVE.—The Administrator shall also— 

7 ‘‘(A) at the end of each calendar year, 

8 transfer to the market stability reserve account 

9 each emission allowance that was offered for 

10 sale but not sold at any auction conducted 

11 under section 778; and 

12 ‘‘(B) transfer emission allowances estab13 lished under subsection (g) from auction pro14 ceeds, and deposit them into the market sta15 bility reserve, to the extent necessary to main16 tain the reserve at its original size. 

17 ‘‘(c) MINIMUM MARKET STABILITY RESERVE AUC18 TION PRICE.— 

19 ‘‘(1) IN GENERAL.—At each market stability re20 serve auction, the Administrator shall offer emission 

21 allowances for sale beginning at a minimum price 

22 per emission allowance, which shall be known as the 

23 ‘minimum market stability reserve auction price’. 

24 ‘‘(2) INITIAL MINIMUM MARKET STABILITY RE25 SERVE AUCTION PRICES.—The minimum market 


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1 stability reserve auction price shall be $28 (in con2 stant 2005 dollars) for the market stability reserve 

3 auctions held in 2012. For the market stability re4 serve auctions held in 2013 through 2017, the min5 imum market stability reserve auction price shall be 

6 the market stability reserve auction price for the 

7 previous year increased by 5 percent plus the rate of 

8 inflation (as measured by the Consumer Price Index 

9 for All Urban Consumers). 

10 ‘‘(3) MINIMUM MARKET STABILITY RESERVE

11 AUCTION PRICE IN SUBSEQUENT YEARS.—For each 

12 market stability reserve auction held in 2018 and 

13 each year thereafter, the minimum market stability 

14 reserve auction price shall be the market stability re15 serve auction price for the previous year increased 

16 by 7 percent, plus the rate of inflation (as measured 

17 by the Consumer Price Index for All Urban Con18 sumers). 

19 ‘‘(d) QUANTITY OF EMISSION ALLOWANCES RE20 LEASED FROM THE MARKET STABILITY RESERVE.— 

21 ‘‘(1) INITIAL LIMITS.—Subject to paragraph 

22 (4), for each of calendar years 2012 through 2016, 

23 the annual limit on the number of emission allow24 ances from the market stability reserve account that 

25 may be auctioned is an amount equal to 15 percent 


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1 of the emission allowances established for that cal2 endar year under section 721(a). This limit does not 

3 apply to offset credits sold on consignment pursuant 

4 to subsection (h). 

5 ‘‘(2) LIMITS IN SUBSEQUENT YEARS.—Subject 

6 to paragraph (4), for calendar year 2017 and each 

7 year thereafter, the annual limit on the number of 

8 emission allowances from the market stability re9 serve account that may be auctioned is an amount 

10 equal to 25 percent of the emission allowances estab11 lished for that calendar year under section 721(a). 

12 This limit does not apply to offset credits sold on 

13 consignment pursuant to subsection (h). 

14 ‘‘(3) ALLOCATION OF LIMITATION.—One-fourth 

15 of each year’s annual market stability reserve auc16 tion limit under this subsection shall be made avail17 able for auction in each quarter. Any allowances 

18 from the market stability reserve account that are 

19 made available for sale in a quarterly auction and 

20 not sold shall be rolled over and added to the quan21 tity available for sale in the following quarter, except 

22 that allowances not sold at auction in the fourth 

23 quarter of a year shall not be rolled over to the fol24 lowing calendar year’s auctions, but shall be re25 turned to the market stability reserve account. 


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1 ‘‘(4) AUTHORITY TO ADJUST LIMITATION.—The 

2 Administrator may adjust the limits in paragraphs 

3 (1) or (2) if the Administrator determines an adjust4 ment is required to prevent disruptively high prices 

5 or to preserve the integrity of the market stability 

6 reserve. 

7 ‘‘(e) PURCHASE LIMIT.— 

8 ‘‘(1) IN GENERAL.—Except as provided in para9 graph (2) or (3), the annual number of emission al10 lowances that a covered entity may purchase at the 

11 market stability reserve auctions in each calendar 

12 year shall not exceed 20 percent of the covered enti13 ty’s emissions during the most recent year for which 

14 allowances or credits were retired under section 722. 

15 ‘‘(2) 2012 LIMIT.—For calendar year 2012, the 

16 maximum aggregate number of emission allowances 

17 that a covered entity may purchase from that year’s 

18 market stability reserve auctions shall be 20 percent 

19 of the covered entity’s greenhouse gas emissions that 

20 the covered entity reported to the registry estab21 lished under section 713 for 2011 and that would be 

22 subject to section 722(a) if occurring in later cal23 endar years. 

24 ‘‘(3) NEW ENTRANTS.—The Administrator 

25 shall, by regulation, establish a separate purchase 


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1 limit applicable to entities that expect to become a 

2 covered entity in the year of the auction, permitting 

3 them to purchase emission allowances at the market 

4 stability reserve auctions in their first calendar year 

5 of operation in an amount of at least 20 percent of 

6 their expected combined emissions and attributable 

7 greenhouse gas emissions for that year. 

8 ‘‘(f) DELEGATION OR CONTRACT.—Pursuant to regu9 lations under this section, the Administrator may, by dele10 gation or contract, provide for the conduct of market sta11 bility reserve auctions under the Administrator’s super12 vision by other departments or agencies of the Federal 

13 Government or by nongovernmental agencies, groups, or 

14 organizations. 

15 ‘‘(g) USE OF AUCTION PROCEEDS.— 

16 ‘‘(1) DEPOSIT IN MARKET STABILITY RESERVE

17 FUND.—The proceeds from market stability reserve 

18 auctions shall be placed in the Market Stability Re19 serve Fund established by subsection (j), and shall 

20 be available without further appropriation or fiscal 

21 year limitation for the purposes described in this 

22 subsection. 

23 ‘‘(2) OFFSET CREDITS.—The Administrator 

24 shall use the proceeds from each market stability re25 serve auction to purchase offset credits, including 


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1 domestic offset credits and international offset cred2 its issued for reduced deforestation activities pursu3 ant to section 753. The Administrator shall retire 

4 those offset credits and establish a number of emis5 sion allowances equal to the number of international 

6 offset credits so retired. Emission allowances estab7 lished under this paragraph shall be in addition to 

8 those established under section 721(a). 

9 ‘‘(3) EMISSION ALLOWANCES.—The Adminis10 trator shall deposit emission allowances established 

11 under paragraph (2) in the market stability reserve, 

12 except that, with respect to any such emission allow13 ances in excess of the amount necessary to fill the 

14 market stability reserve to its original size, the Ad15 ministrator shall— 

16 ‘‘(A) except as provided in subparagraph 

17 (B), assign a vintage year to the emission al18 lowance, which shall be no earlier than the year 

19 in which the allowance is established under 

20 paragraph (2) and shall treat such allowances 

21 as ones that are not designated for distribution 

22 or auction; and 

23 ‘‘(B) to the extent any such allowances 

24 cannot be assigned a vintage year because of 


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1 the limitation in paragraph (4), retire the allow2 ances. 

3 ‘‘(4) LIMITATION.—In no case may the Admin4 istrator assign under paragraph (3)(A) more emis5 sion allowances to a vintage year than the number 

6 of emission allowances from that vintage year that 

7 were placed in the market stability reserve account 

8 under subsection (b)(1). 

9 ‘‘(h) AVAILABILITY OF OFFSET CREDITS FOR AUC10 TION.— 

11 ‘‘(1) IN GENERAL.—The regulations promul12 gated under section 721(h) shall allow any entity 

13 holding offset credits to request that the Adminis14 trator include such offset credits in an upcoming 

15 market stability reserve auction. The regulations 

16 shall provide that— 

17 ‘‘(A) upon sale of such offset credits, the 

18 Administrator shall retire those offset credits, 

19 and establish and provide to the purchasers a 

20 number of emission allowances equal to the 

21 number of offset credits so retired, which allow22 ances shall be in addition to those established 

23 under section 721(a); and 

24 ‘‘(B) for offset credits sold pursuant to 

25 this subsection, the proceeds for the entity that 


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1 offered the offset credits for sale shall be the 

2 lesser of— 

3 ‘‘(i) the average daily closing price for 

4 offset credits sold on registered exchanges 

5 (or if such price is unavailable, the average 

6 price as determined by the Administrator) 

7 during the six months prior to the market 

8 stability reserve auction at which they were 

9 auctioned, with the remaining funds col10 lected upon the sale of the offset credits 

11 deposited in the Treasury; and 

12 ‘‘(ii) the amount received for the off13 set credits at the auction. 

14 ‘‘(2) PROCEEDS.—For offset credits sold pursu15 ant to this subsection, notwithstanding section 3302 

16 of title 31, United States Code, or any other provi17 sion of law, within 90 days of receipt, the United 

18 States shall transfer the proceeds from the auction, 

19 as defined in paragraph (1)(D), to the entity that 

20 offered the offset credits for sale. No funds trans21 ferred from a purchaser to a seller of offset credits 

22 under this paragraph shall be held by any officer or 

23 employee of the United States or treated for any 

24 purpose as public monies. 


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1 ‘‘(3) PRICING.—When the Administrator acts 

2 under this subsection as the agent of an entity in 

3 possession of offset credits, the Administrator is not 

4 obligated to obtain the highest price possible for the 

5 offset credits, and instead shall auction such offset 

6 credits in the same manner and pursuant to the 

7 same rules (except as modified in paragraph (1)) as 

8 set forth for auctioning market stability reserve al9 lowances. Entities requesting that such offset credits 

10 be offered for sale at a market stability reserve auc11 tion may not set a minimum reserve price for their 

12 offset credits that is different than the minimum 

13 market stability reserve auction price set pursuant 

14 to subsection (c). 

15 ‘‘(i) INITIAL REGULATIONS.—Not later than 24 

16 months after the date of enactment of this title, the Ad17 ministrator shall promulgate regulations, in consultation 

18 with other appropriate agencies, governing the auction of 

19 allowances under this section. Such regulations shall in20 clude the following requirements: 

21 ‘‘(1) FREQUENCY; FIRST AUCTION.—Auctions 

22 shall be held four times per year at regular intervals, 

23 with the first auction to be held no later than March 

24 31, 2012. 


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1 ‘‘(2) AUCTION FORMAT.—Auctions shall follow 

2 a single-round, sealed-bid, uniform price format. 

3 ‘‘(3) PARTICIPATION; FINANCIAL ASSURANCE.— 

4 Auctions shall be open to any covered entity eligible 

5 to purchase emission allowances at the auction 

6 under subsection (a)(2), except that the Adminis7 trator may establish financial assurance require8 ments to ensure that auction participants can and 

9 will perform on their bids. 

10 ‘‘(4) DISCLOSURE OF BENEFICIAL OWNER11 SHIP.—Each bidder in an 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 ‘‘(5) PURCHASE LIMITS.—No person may, di17 rectly or in concert with another participant, pur18 chase more than 20 percent of the allowances of19 fered for sale at any quarterly auction. 

20 ‘‘(6) 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 ‘‘(7) 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, con5 siders appropriate to promote effective, efficient, 

6 transparent, and fair administration of auctions 

7 under this section. 

8 ‘‘(j) MARKET STABILITY RESERVE FUND.—There 

9 are established in the Treasury of the United States a 

10 fund to be known as the ‘Market Stability Reserve Fund’. 

11 ‘‘(k) REVISION OF REGULATIONS.—The Adminis12 trator may, at any time, in consultation with other agen13 cies as appropriate, revise the initial regulations promul14 gated under subsection (i). Such revised regulations need 

15 not meet the requirements identified in subsection (i) if 

16 the Administrator determines that an alternative auction 

17 design would be more effective, taking into account factors 

18 including costs of administration, transparency, fairness, 

19 and risks of collusion or manipulation. In determining 

20 whether and how to revise the initial regulations under 

21 this subsection, the Administrator shall not consider maxi22 mization of revenues to the Federal Government. 

23 ‘‘SEC. 727. PERMITS. 

24 ‘‘(a) PERMIT PROGRAM.—For stationary sources 

25 subject to title V of this Act, that are covered entities, 


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1 the provisions of this title shall be implemented by permits 

2 issued to such covered entities (and enforced) in accord3 ance with the provisions of title V, as modified by this 

4 title. Any such permit issued by the Administrator, or by 

5 a State with an approved permit program, shall require 

6 the owner or operator of a covered entity to hold emission 

7 allowances or offset credits at least equal to the total an8 nual amount of carbon dioxide equivalents for its com9 bined emissions and attributable greenhouse gas emissions 

10 to which section 722 applies. No such permit shall be 

11 issued that is inconsistent with the requirements of this 

12 title, and title V as applicable. Nothing in this section re13 garding compliance plans or in title V shall be construed 

14 as affecting allowances or offset credits. Submission of a 

15 statement by the owner or operator, or the designated rep16 resentative of the owners and operators, of a covered enti17 ty that the owners and operators will hold emission allow18 ances or offset credits for the entity’s combined emissions 

19 and attributable greenhouse gas emissions to which sec20 tion 722 applies shall be deemed to meet the proposed and 

21 approved planning requirements of title V. Recordation by 

22 the Administrator of transfers of emission allowances shall 

23 amend automatically all applicable proposed or approved 

24 permit applications, compliance plans, and permits. 


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1 ‘‘(b) MULTIPLE OWNERS.—No permit shall be issued 

2 under this section and no allowances or offset credits shall 

3 be disbursed under this title to a covered entity or any 

4 other person until the designated representative of the 

5 owners or operators has filed a certificate of representa6 tion with regard to matters under this title, including the 

7 holding and distribution of emission allowances and the 

8 proceeds of transactions involving emission allowances. 

9 Where there are multiple holders of a legal or equitable 

10 title to, or a leasehold interest in, such a covered entity 

11 or other entity or where a utility or industrial customer 

12 purchases power under a long-term power purchase con13 tract from an independent power production facility that 

14 is a covered entity, the certificate shall state— 

15 ‘‘(1) that emission allowances and the proceeds 

16 of transactions involving emission allowances will be 

17 deemed to be held or distributed in proportion to 

18 each holder’s legal, equitable, leasehold, or contrac19 tual reservation or entitlement; or 

20 ‘‘(2) if such multiple holders have expressly pro21 vided for a different distribution of emission allow22 ances by contract, that emission allowances and the 

23 proceeds of transactions involving emission allow24 ances will be deemed to be held or distributed in ac25 cordance with the contract. 


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1 A passive lessor, or a person who has an equitable interest 

2 through such lessor, whose rental payments are not based, 

3 either directly or indirectly, upon the revenues or income 

4 from the covered entity or other entity shall not be deemed 

5 to be a holder of a legal, equitable, leasehold, or contrac6 tual interest for the purpose of holding or distributing 

7 emission allowances as provided in this subsection, during 

8 either the term of such leasehold or thereafter, unless ex9 pressly provided for in the leasehold agreement. Except 

10 as otherwise provided in this subsection, where all legal 

11 or equitable title to or interest in a covered entity, or other 

12 entity, is held by a single person, the certificate shall state 

13 that all emission allowances received by the entity are 

14 deemed to be held for that person. 

15 ‘‘(c) PROHIBITION.—It shall be unlawful for any per16 son to operate any stationary source subject to the re17 quirements of this section except in compliance with the 

18 terms and requirements of a permit issued by the Admin19 istrator or a State with an approved permit program in 

20 accordance with this section. For purposes of this sub21 section, compliance, as provided in section 504(f), with a 

22 permit issued under title V which complies with this title 

23 for covered entities shall be deemed compliance with this 

24 subsection as well as section 502(a). 


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1 ‘‘(d) RELIABILITY.—Nothing in this section or title 

2 V shall be construed as requiring termination of oper3 ations of a stationary source that is a covered entity for 

4 failure to have an approved permit, or compliance plan, 

5 that is consistent with the requirements in the second and 

6 fifth sentences of subsection (a) concerning the holding 

7 of emission allowances, compensatory allowances, inter8 national emission allowances, or offset allowances, except 

9 that any such covered entity may be subject to the applica10 ble enforcement provision of section 113. 

11 ‘‘(e) REGULATIONS.—The Administrator shall pro12 mulgate regulations to implement this section. To provide 

13 for permits required under this section, each State in 

14 which one or more stationary sources and that are covered 

15 entities are located shall submit, in accordance with this 

16 section and title V, revised permit programs for approval. 

17 ‘‘SEC. 728. INTERNATIONAL EMISSION ALLOWANCES. 

18 ‘‘(a) QUALIFYING PROGRAMS.—The Administrator, 

19 in consultation with the Secretary of State, may by rule 

20 designate an international climate change program as a 

21 qualifying international program if— 

22 ‘‘(1) the program is run by a national or supra23 national foreign government, and imposes a manda24 tory absolute tonnage limit on greenhouse gas emis25 sions from 1 or more foreign countries, or from 1 or 


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1 more economic sectors in such a country or coun2 tries; and 

3 ‘‘(2) the program is at least as stringent as the 

4 program established by this title, including provi5 sions to ensure at least comparable monitoring, com6 pliance, enforcement, quality of offsets, and restric7 tions on the use of offsets. 

8 ‘‘(b) DISQUALIFIED ALLOWANCES.—An international 

9 emission allowance may not be held under section 

10 722(d)(3) if it is in the nature of an offset instrument 

11 or allowance awarded based on the achievement of green12 house gas emission reductions or avoidance, or greenhouse 

13 gas sequestration, that are not subject to the mandatory 

14 absolute tonnage limits referred to in subsection (a)(1). 

15 ‘‘(c) RETIREMENT.— 

16 ‘‘(1) ENTITY CERTIFICATION.—The owner or 

17 operator of an entity that holds an international 

18 emission allowance under section 722(d)(3) shall 

19 certify to the Administrator that such international 

20 emission allowance has not previously been used to 

21 comply with any foreign, international, or domestic 

22 greenhouse gas regulatory program. 

23 ‘‘(2) RETIREMENT.— 

24 ‘‘(A) FOREIGN AND INTERNATIONAL REG25 ULATORY ENTITIES.—The Administrator, in 


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1 consultation with the Secretary of State, shall 

2 seek, by whatever means appropriate, including 

3 agreements and technical cooperation on allow4 ance tracking, to ensure that any relevant for5 eign, international, and domestic regulatory en6 tities— 

7 ‘‘(i) are notified of the use, for pur8 poses of compliance with this title, of any 

9 international emission allowance; and 

10 ‘‘(ii) provide for the disqualification of 

11 such international emission allowance for 

12 any subsequent use under the relevant for13 eign, international, or domestic greenhouse 

14 gas regulatory program, regardless of 

15 whether such use is a sale, exchange, or 

16 submission to satisfy a compliance obliga17 tion. 

18 ‘‘(B) DISQUALIFICATION FROM FURTHER

19 USE.—The Administrator shall ensure that, 

20 once an international emission allowance has 

21 been disqualified or otherwise used for purposes 

22 of compliance with this title, such allowance 

23 shall be disqualified from any further use under 

24 this title. 


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1 ‘‘(d) USE LIMITATIONS.—The Administrator may, by 

2 rule, modify the percentage applicable to international 

3 emission allowances under section 722(d)(3), consistent 

4 with the purposes of the Clean Energy Jobs and American 

5 Power Act. 

6 ‘‘PART D—OFFSETS 

7 ‘‘SEC. 731. OFFSETS INTEGRITY ADVISORY BOARD. 

8 ‘‘(a) ESTABLISHMENT.—Not later than 30 days after 

9 the date of enactment of this title, the President shall es10 tablish an independent Offsets Integrity Advisory Board. 

11 The Advisory Board shall make recommendations to the 

12 President for use in promulgating and revising regulations 

13 under this part, and for ensuring the overall environ14 mental integrity of the programs established pursuant to 

15 those regulations. 

16 ‘‘(b) MEMBERSHIP.—The Advisory Board shall be 

17 comprised of at least nine members. Each member shall 

18 be qualified by education, training, and experience to 

19 evaluate scientific and technical information on matters 

20 referred to the Board under this section. The President 

21 shall appoint Advisory Board members, including a chair 

22 and vice-chair of the Advisory Board. Terms shall be 3 

23 years in length, except for initial terms, which may be up 

24 to 5 years in length to allow staggering. Members may 

25 be reappointed only once for an additional 3-year term, 


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1 and such second term may follow directly after a first 

2 term. 

3 ‘‘(c) ACTIVITIES.—The Advisory Board established 

4 pursuant to subsection (a) shall— 

5 ‘‘(1) provide recommendations, not later than 

6 90 days after the Advisory Board’s establishment 

7 and periodically thereafter, to the President regard8 ing offset project types that should be considered for 

9 eligibility under section 733, taking into consider10 ation relevant scientific and other issues, including— 

11 ‘‘(A) the availability of a representative 

12 data set for use in developing the activity base13 line; 

14 ‘‘(B) the potential for accurate quantifica15 tion of greenhouse gas reduction, avoidance, or 

16 sequestration for an offset project type; 

17 ‘‘(C) the potential level of scientific and 

18 measurement uncertainty associated with an 

19 offset project type; 

20 ‘‘(D) any beneficial or adverse environ21 mental, public health, welfare, social, economic, 

22 or energy effects associated with an offset 

23 project type; 


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1 ‘‘(E) the extent to which, as of the date of 

2 submission of the report, the project or activity 

3 types within each category— 

4 ‘‘(i) are required by law (including a 

5 regulation); or 

6 ‘‘(ii) represent business-as-usual (ab7 sent funding from offset credits) practices 

8 for a relevant land area, industry sector, or 

9 forest, soil or facility type; 

10 ‘‘(2) make available to the President its advice 

11 and comments on offset methodologies that should 

12 be considered under regulations promulgated pursu13 ant to subsection (a) and (b) of section 734, includ14 ing methodologies to address the issues of 

15 additionality, activity baselines, measurement, leak16 age, uncertainty, permanence, and environmental in17 tegrity; 

18 ‘‘(3) make available to the President, and other 

19 relevant Federal agencies, its advice and comments 

20 regarding scientific, technical, and methodological 

21 issues specific to the issuance of international offset 

22 credits under section 744; 

23 ‘‘(4) make available to the President, and other 

24 relevant Federal agencies, its advice and comments 

25 regarding scientific, technical, and methodological 


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1 issues associated with the implementation of this 

2 part; 

3 ‘‘(5) make available to the President its advice 

4 and comments on areas in which further knowledge 

5 is required to appraise the adequacy of existing, re6 vised, or proposed methodologies for use under this 

7 part, and describe the research efforts necessary to 

8 provide the required information; and 

9 ‘‘(6) make available to the President its advice 

10 and comments on other ways to improve or safe11 guard the environmental integrity of programs es12 tablished under this part. 

13 ‘‘(d) SCIENTIFIC REVIEW OF OFFSET AND DEFOR14 ESTATION REDUCTION PROGRAMS.—Not later than Janu15 ary 1, 2017, and at five-year intervals thereafter, the Ad16 visory Board shall submit to the President and make avail17 able to the public an analysis of relevant scientific and 

18 technical information related to this part. The Advisory 

19 Board shall review approved and potential methodologies, 

20 scientific studies, offset project monitoring, offset project 

21 verification reports, and audits related to this part, and 

22 evaluate the net emissions effects of implemented offset 

23 projects. The Advisory Board shall recommend changes to 

24 offset methodologies, protocols, or project types, or to the 

25 overall offset program under this part, to ensure that offVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00487 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 set credits issued by the President do not compromise the 

2 integrity of the annual emission reductions established 

3 under section 703, and to avoid or minimize adverse ef4 fects to human health or the environment. 

5 ‘‘SEC. 732. ESTABLISHMENT OF OFFSETS PROGRAM. 

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

7 the date of enactment of this title, the President, in con8 sultation with appropriate Federal agencies and taking 

9 into consideration the recommendations of the Advisory 

10 Board, shall promulgate regulations establishing a pro11 gram for the issuance of offset credits in accordance with 

12 the requirements of this part. The President shall periodi13 cally revise these regulations as necessary to meet the re14 quirements of this part. 

15 ‘‘(b) REQUIREMENTS.—The regulations described in 

16 subsection (a) shall— 

17 ‘‘(1) authorize the issuance of offset credits 

18 with respect to qualifying offset projects that result 

19 in reductions or avoidance of greenhouse gas emis20 sions, or sequestration of greenhouse gases; 

21 ‘‘(2) ensure that such offset credits represent 

22 verifiable and additional greenhouse gas emission re23 ductions or avoidance, or increases in sequestration; 


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1 ‘‘(3) ensure that offset credits issued for se2 questration offset projects are only issued for green3 house gas reductions that are permanent; 

4 ‘‘(4) provide for the implementation of the re5 quirements of this part; 

6 ‘‘(5) include as reductions in greenhouse gases 

7 reductions achieved through the destruction of meth8 ane and its conversion to carbon dioxide, and reduc9 tions achieved through destruction of chlorofluoro10 carbons or other ozone depleting substances, if per11 mitted by the President under section 619(b)(9) and 

12 subject to the conditions specified in section 

13 619(b)(9), based on the carbon dioxide equivalent 

14 value of the substance destroyed; and 

15 ‘‘(6) establish a process to accept and respond 

16 to comments from third parties regarding programs 

17 established under this part in a timely manner. 

18 ‘‘(c) COORDINATION TO MINIMIZE NEGATIVE EF19 FECTS.—In promulgating and implementing regulations 

20 under this part, the President shall act (including by re21 jecting projects, if necessary) to avoid or minimize, to the 

22 maximum extent practicable, adverse effects on human 

23 health or the environment resulting from the implementa24 tion of offset projects under this part. 


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1 ‘‘(d) OFFSET REGISTRY.—The President shall estab2 lish within the allowance tracking system established 

3 under section 724(d) an Offset Registry for qualifying off4 set projects and offset credits issued with respect thereto 

5 under this part. 

6 ‘‘(e) LEGAL STATUS OF OFFSET CREDIT.—An offset 

7 credit does not constitute a property right. 

8 ‘‘(f) FEES.—The President shall assess fees payable 

9 by offset project developers in an amount necessary to 

10 cover the administrative costs and the enforcement costs 

11 to the Environmental Protection Agency and the Depart12 ment of Justice of carrying out the activities under this 

13 part. Amounts collected for such fees shall be available 

14 to the President and the Attorney General for carrying 

15 out the activities under this part to the extent provided 

16 in advance in appropriations Acts. 

17 ‘‘SEC. 733. ELIGIBLE PROJECT TYPES. 

18 ‘‘(a) LIST OF ELIGIBLE PROJECT TYPES.— 

19 ‘‘(1) IN GENERAL.—As part of the regulations 

20 promulgated under section 732(a), the President 

21 shall establish, and may periodically revise, a list of 

22 types of projects eligible to generate offset credits, 

23 including international offset credits, under this 

24 part. 


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1 ‘‘(2) ADVISORY BOARD RECOMMENDATIONS.— 

2 In determining the eligibility of project types, the 

3 President shall take into consideration the rec4 ommendations of the Advisory Board. If a list estab5 lished under this section differs from the rec6 ommendations of the Advisory Board, the regula7 tions promulgated under section 732(a) shall include 

8 a justification for the discrepancy. 

9 ‘‘(3) INITIAL DETERMINATION.—The President 

10 shall establish the initial eligibility list under para11 graph (1) not later than one year after the date of 

12 enactment of this title for which there are well devel13 oped methodologies that the President determines 

14 would meet the criteria of section 734. 

15 ‘‘(4) PROJECT TYPES TO BE CONSIDERED FOR

16 INITIAL LIST.—In determining the initial list, the 

17 President shall give priority to consideration of off18 set project types that are recommended by the Advi19 sory Board and for which there are well developed 

20 methodologies that the President determines would 

21 meet the criteria of section 734, and shall con22 sider— 

23 ‘‘(A) methane collection and combustion 

24 projects at active underground coal mines; 


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1 ‘‘(B) methane collection and combustion 

2 projects at landfills; 

3 ‘‘(C) capture of venting, flaring, and fugi4 tive emissions from oil and natural gas systems; 

5 ‘‘(D) nonlandfill methane collection, com6 bustion and avoidance projects involving organic 

7 waste streams that would have otherwise emit8 ted methane in the atmosphere, including ma9 nure management and biogas capture and com10 bustion; 

11 ‘‘(E) projects involving afforestation or re12 forestation of acreage not forested as of Janu13 ary 1, 2009; 

14 ‘‘(F) forest management resulting in an in15 crease in forest carbon stores, including har16 vested wood products; 

17 ‘‘(G) agricultural, grassland, and range18 land sequestration and management practices, 

19 including— 

20 ‘‘(i) altered tillage practices, including 

21 avoided abandonment of such practices; 

22 ‘‘(ii) winter cover cropping, contin23 uous cropping, and other means to in24 crease biomass returned to soil in lieu of 

25 planting followed by fallowing; 


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1 ‘‘(iii) reduction of nitrogen fertilizer 

2 use or increase in nitrogen use efficiency; 

3 ‘‘(iv) reduction in the frequency and 

4 duration of flooding of rice paddies; 

5 ‘‘(v) reduction in carbon emissions 

6 from organic soils; 

7 ‘‘(vi) reduction in greenhouse gas 

8 emissions from manure and effluent; 

9 ‘‘(vii) reduction in greenhouse gas 

10 emissions due to changes in animal man11 agement practices, including dietary modi12 fications; 

13 ‘‘(viii) planting and cultivation of per14 manent tree crops; 

15 ‘‘(ix) greenhouse gas emission reduc16 tions from improvements and upgrades to 

17 mobile or stationary equipment (including 

18 engines); 

19 ‘‘(x) practices to reduce and eliminate 

20 soil tillage; 

21 ‘‘(xi) reductions in greenhouse gas 

22 emissions through restoration of wetlands, 

23 forestland, and grassland; and 


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1 ‘‘(xii) sequestration of greenhouse 

2 gases through management of tree crops; 

3 and 

4 ‘‘(H) changes in carbon stocks attributed 

5 to land use change and forestry activities, in6 cluding— 

7 ‘‘(i) management of peatland or wet8 land; 

9 ‘‘(ii) conservation of grassland and 

10 forested land; 

11 ‘‘(iii) improved forest management, 

12 including accounting for carbon stored in 

13 wood products; 

14 ‘‘(iv) reduced deforestation or avoided 

15 forest conversion; 

16 ‘‘(v) urban tree-planting and mainte17 nance; 

18 ‘‘(vi) agroforestry; and 

19 ‘‘(vii) adaptation of plant traits or 

20 new technologies that increase sequestra21 tion by forests. 

22 ‘‘(5) METHODOLOGIES.—In issuing methodolo23 gies pursuant to section 734, the President shall 

24 give priority to methodologies for offset types in25 cluded on the initial eligibility list. 


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1 ‘‘(b) MODIFICATION OF LIST.—The President— 

2 ‘‘(1) shall add additional project types to the 

3 list not later than 2 years after the date of enact4 ment of this title; 

5 ‘‘(2) may at any time, by rule, add a project 

6 type to the list established under subsection (a) if 

7 the President, in consultation with appropriate Fed8 eral agencies and taking into consideration the rec9 ommendations of the Advisory Board, determines 

10 that the project type can generate additional reduc11 tions or avoidance of greenhouse gas emissions, or 

12 sequestration of greenhouse gases, subject to the re13 quirements of this part; 

14 ‘‘(3) may at any time, by rule, determine that 

15 a project type on the list does not meet the require16 ments of this part, and remove a project type from 

17 the list established under subsection (a), in consulta18 tion with appropriate Federal agencies and taking 

19 into consideration any recommendations of the Advi20 sory Board; and 

21 ‘‘(4) shall consider adding to or removing from 

22 the list established under subsection (a), at a min23 imum, project types proposed to the President— 

24 ‘‘(A) by petition pursuant to subsection 

25 (c); or 


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1 ‘‘(B) by the Advisory Board. 

2 ‘‘(c) PETITION PROCESS.—Any person may petition 

3 the President to modify the list established under sub4 section (a) by adding or removing a project type pursuant 

5 to subsection (b). Any such petition shall include a show6 ing by the petitioner that there is adequate data to estab7 lish that the project type does or does not meet the re8 quirements of this part. Not later than 12 months after 

9 receipt of such a petition, the President shall either grant 

10 or deny the petition and publish a written explanation of 

11 the reasons for the President’s decision. The President 

12 may not deny a petition under this subsection on the basis 

13 of inadequate Environmental Protection Agency resources 

14 or time for review. 

15 ‘‘SEC. 734. REQUIREMENTS FOR OFFSET PROJECTS. 

16 ‘‘(a) METHODOLOGIES.—As part of the regulations 

17 promulgated under section 732(a), the President shall es18 tablish, for each type of offset project listed as eligible 

19 under section 733, the following: 

20 ‘‘(1) ADDITIONALITY.—A standardized method21 ology for determining the additionality of greenhouse 

22 gas emission reductions or avoidance, or greenhouse 

23 gas sequestration, achieved by an offset project of 

24 that type. Such methodology shall ensure, at a min25 imum, that any greenhouse gas emission reduction 


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1 or avoidance, or any greenhouse gas sequestration, is 

2 considered additional only to the extent that it re3 sults from activities that— 

4 ‘‘(A) are not required by or undertaken to 

5 comply with any law, including any regulation 

6 or consent order; 

7 ‘‘(B) were not commenced prior to Janu8 ary 1, 2009, except in the case of— 

9 ‘‘(i) offset project activities that com10 menced after January 1, 2001, and were 

11 registered as of the date of enactment of 

12 this title under an offset program with re13 spect to which the President has made an 

14 affirmative determination under section 

15 740(a)(2); or 

16 ‘‘(ii) activities that are readily revers17 ible, with respect to which the President 

18 may set an alternative earlier date under 

19 this subparagraph that is not earlier than 

20 January 1, 2001, where the President de21 termines that setting such an alternative 

22 date may produce an environmental benefit 

23 by removing an incentive to cease and then 

24 reinitiate activities that began prior to 

25 January 1, 2009; 


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1 ‘‘(C) are not receiving support under sec2 tion 323 of division A, or section 207 of divi3 sion B, of the Clean Energy Jobs and American 

4 Power Act; and 

5 ‘‘(D) exceed the activity baseline estab6 lished under paragraph (2). 

7 ‘‘(2) ACTIVITY BASELINES.—A standardized 

8 methodology for establishing activity baselines for 

9 offset projects of that type. The President shall set 

10 activity baselines to reflect a conservative estimate of 

11 business-as-usual performance or practices for the 

12 relevant type of activity such that the baseline pro13 vides an adequate margin of safety to ensure the en14 vironmental integrity of offsets calculated in ref15 erence to such baseline. 

16 ‘‘(3) QUANTIFICATION METHODS.—A standard17 ized methodology for determining the extent to 

18 which greenhouse gas emission reductions or avoid19 ance, or greenhouse gas sequestration, achieved by 

20 an offset project of that type exceed a relevant activ21 ity baseline, including protocols for monitoring and 

22 accounting for uncertainty. 

23 ‘‘(4) LEAKAGE.—A standardized methodology 

24 for accounting for and mitigating potential leakage, 


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1 if any, from an offset project of that type, taking 

2 uncertainty into account. 

3 ‘‘(b) ACCOUNTING FOR REVERSALS.— 

4 ‘‘(1) IN GENERAL.—As part of the regulations 

5 promulgated under section 732(a), for each type of 

6 sequestration project listed under section 733, the 

7 President shall establish requirements to account for 

8 and address reversals, including— 

9 ‘‘(A) a requirement to report any reversal 

10 with respect to an offset project for which offset 

11 credits have been issued under this part; 

12 ‘‘(B) provisions to require emission allow13 ances to be held in amounts to fully compensate 

14 for greenhouse gas emissions attributable to re15 versals, and to assign responsibility for holding 

16 such emission allowances; 

17 ‘‘(C) provisions to discourage repeated in18 tentional reversals by offset project developers, 

19 including but not limited to the assessment of 

20 administrative fees, temporary suspension, or 

21 disqualification of an offset project developer 

22 from the program; and 

23 ‘‘(D) any other provisions the President 

24 determines necessary to account for and ad25 dress reversals. 


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1 ‘‘(2) MECHANISMS.—The President shall pre2 scribe mechanisms to ensure that any sequestration 

3 with respect to which an offset credit is issued under 

4 this part results in a permanent net increase in se5 questration, and that full account is taken of any ac6 tual or potential reversal of such sequestration, with 

7 an adequate margin of safety. The President shall 

8 prescribe at least one of the following mechanisms to 

9 meet the requirements of this paragraph: 

10 ‘‘(A) An offsets reserve, pursuant to para11 graph (3). 

12 ‘‘(B) Insurance that provides for purchase 

13 and provision to the President for retirement of 

14 an amount of offset credits or emission allow15 ances equal in number to the tons of carbon di16 oxide equivalents of greenhouse gas emissions 

17 released due to reversal. 

18 ‘‘(C) Another mechanism that the Presi19 dent determines satisfies the requirements of 

20 this part. 

21 ‘‘(3) OFFSETS RESERVE.— 

22 ‘‘(A) IN GENERAL.—An offsets reserve re23 ferred to in paragraph (2)(A) is a program 

24 under which, before issuance of offset credits 

25 under this part, the President shall subtract 


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1 and reserve from the quantity to be issued a 

2 quantity of offset credits based on the risk of 

3 reversal. The President shall— 

4 ‘‘(i) hold these reserved offset credits 

5 in the offsets reserve; and 

6 ‘‘(ii) register the holding of the re7 served offset credits in the Offset Registry 

8 established under section 732(d). 

9 ‘‘(B) PROJECT REVERSAL.— 

10 ‘‘(i) IN GENERAL.—If a reversal has 

11 occurred with respect an offset project for 

12 which offset credits are reserved under this 

13 paragraph, the President shall remove off14 set credits or emission allowances from the 

15 offsets reserve and cancel them to fully ac16 count for the tons of carbon dioxide equiv17 alent that are no longer sequestered. 

18 ‘‘(ii) INTENTIONAL REVERSALS.—If 

19 the President determines that a reversal 

20 was intentional, the offset project developer 

21 for the relevant offset project shall place 

22 into the offsets reserve a quantity of offset 

23 credits, or combination of offset credits 

24 and emission allowances, equal in number 

25 to the number of reserve offset credits that 


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1 were canceled due to the reversal pursuant 

2 to clause (i). 

3 ‘‘(iii) UNINTENTIONAL REVERSALS.— 

4 If the President determines that a reversal 

5 was unintentional, the offset project devel6 oper for the relevant offset project shall 

7 place into the offsets reserve a quantity of 

8 offset credits, or combination of offset 

9 credits and emission allowances, equal in 

10 number to half the number of offset credits 

11 that were reserved for that offset project, 

12 or half the number of reserve offset credits 

13 that were canceled due to the reversal pur14 suant to clause (i), whichever is less. 

15 ‘‘(iv) PETITION.—Any person may pe16 tition the President for a determination 

17 that an offsets reversal has occurred. Any 

18 such petition shall include a showing by 

19 the petitioner that there is adequate data 

20 or other evidence to support the petition. 

21 Not later than 90 days after the date of 

22 receipt of the petition, the President shall 

23 take final action determining either that 

24 the reversal has occurred or that the rever25 sal has not occurred. Such determination 


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1 shall be accompanied by a statement of the 

2 basis for the determination. 

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 ‘‘(4) TERM OFFSET CREDITS.— 

8 ‘‘(A) APPLICABILITY.—With respect to a 

9 practice listed under section 733 that seques10 ters greenhouse gases and has a crediting pe11 riod of not more than 5 years, the President 

12 may address reversals pursuant to this para13 graph in lieu of permanently accounting for re14 versals pursuant to paragraphs (1) and (2). 

15 ‘‘(B) ACCOUNTING FOR REVERSALS.—For 

16 such practices or projects implementing the 

17 practices described in subparagraph (A), the 

18 President shall require only reversals that occur 

19 during the crediting period to be accounted for 

20 and addressed pursuant to paragraphs (1) and 

21 (2). 

22 ‘‘(C) CREDITS ISSUED.—For practices or 

23 projects regulated pursuant to subparagraph 

24 (B), the Secretary shall issue under section 737 

25 a term offset credit, in lieu of an offset credit, 


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1 for each ton of carbon dioxide equivalent that 

2 has been sequestered. 

3 ‘‘(c) CREDITING PERIODS.— 

4 ‘‘(1) IN GENERAL.—As part of the regulations 

5 promulgated under section 732(a), for each offset 

6 project type, the President shall specify a crediting 

7 period, and establish provisions for petitions for new 

8 crediting periods, in accordance with this subsection. 

9 ‘‘(2) DURATION.— 

10 ‘‘(A) IN GENERAL.—The crediting period 

11 shall be not less than 5 and not greater than 

12 10 years for any project type other than those 

13 involving sequestration or term offsets. 

14 ‘‘(B) FORESTRY PROJECTS.—The crediting 

15 period for a forestry offset project shall not ex16 ceed 20 years. 

17 ‘‘(C) TERM OFFSET CREDITS.—The cred18 iting period for a term offset credit issued shall 

19 not exceed 5 years. 

20 ‘‘(3) ELIGIBILITY.—An offset project shall be 

21 eligible to generate offset credits under this part 

22 only during the project’s crediting period. During 

23 such crediting period, the project shall remain eligi24 ble to generate offset credits, subject to the meth25 odologies and project type eligibility list that applied 


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1 as of the date of project approval under section 735, 

2 except as provided in paragraph (4). 

3 ‘‘(4) PETITION FOR NEW CREDITING PERIOD.— 

4 An offset project developer may petition for a new 

5 crediting period to commence after termination of a 

6 crediting period, subject to the methodologies and 

7 project type eligibility list in effect at the time when 

8 such petition is submitted. A petition may not be 

9 submitted under this paragraph more than 18 

10 months before the end of the pending crediting pe11 riod. The President may grant such petition after 

12 public notice and opportunity for comment. The 

13 President may limit the number of new crediting pe14 riods available for projects of particular project 

15 types. 

16 ‘‘(d) ENVIRONMENTAL INTEGRITY.—In establishing 

17 the requirements under this section, the President shall 

18 apply conservative assumptions or methods to maximize 

19 the certainty that the environmental integrity of the green20 house gas limitations established under section 703 is not 

21 compromised. 

22 ‘‘(e) PRE-EXISTING METHODOLOGIES.—In promul23 gating requirements under this section, the President shall 

24 give due consideration to methodologies for offset projects 

25 existing as of the date of enactment of this title. 


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1 ‘‘(f) ADDED PROJECT TYPES.—The President shall 

2 establish methodologies described in subsection (a), and, 

3 as applicable, requirements and mechanisms for reversals 

4 as described in subsection (b), for any project type that 

5 is added to the list pursuant to section 733. 

6 ‘‘SEC. 735. APPROVAL OF OFFSET PROJECTS. 

7 ‘‘(a) APPROVAL PETITION.—An offset project devel8 oper shall submit an offset project approval petition signed 

9 by a responsible official (who shall certify the accuracy of 

10 the information submitted) and providing such informa11 tion as the President requires to determine whether the 

12 offset project is eligible for issuance of offset credits under 

13 rules promulgated pursuant to this part. 

14 ‘‘(b) TIMING.—An approval petition shall be sub15 mitted to the President under subsection (a) not later than 

16 the time at which an offset project’s first verification re17 port is submitted under section 736. 

18 ‘‘(c) APPROVAL PETITION REQUIREMENTS.—As part 

19 of the regulations promulgated under section 732, the 

20 President shall include provisions for, and shall specify, 

21 the required components of an offset project approval peti22 tion required under subsection (a), which shall include— 

23 ‘‘(1) designation of an offset project developer; 


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1 ‘‘(2) designation of a party who is authorized to 

2 provide access to the appropriate officials or an au3 thorized representative to the offset project; and 

4 ‘‘(3) any other information that the President 

5 considers to be necessary to achieve the purposes of 

6 this part. 

7 ‘‘(d) APPROVAL AND NOTIFICATION.—Not later than 

8 90 days after receiving a complete approval petition under 

9 subsection (a), the President shall make the approval peti10 tion publicly available on the internet, approve or deny the 

11 petition in writing, and, if the petition is denied, make 

12 the President’s decision publicly available on the internet. 

13 After an offset project is approved, the offset project de14 veloper shall not be required to resubmit an approval peti15 tion during the offset project’s crediting period, except as 

16 provided in section 734(c)(4). 

17 ‘‘(e) APPEAL.—The President shall establish proce18 dures for appeal and review of determinations made under 

19 subsection (d). 

20 ‘‘(f) VOLUNTARY PREAPPROVAL REVIEW.—The 

21 President may establish a voluntary preapproval review 

22 procedure, to allow an offset project developer to request 

23 the President to conduct a preliminary eligibility review 

24 for an offset project. Findings of such reviews shall not 


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1 be binding upon the President. The voluntary preapproval 

2 review procedure— 

3 ‘‘(1) shall require the offset project developer to 

4 submit such basic project information as the Presi5 dent requires to provide a meaningful review; and 

6 ‘‘(2) shall require a response from the President 

7 not later than 6 weeks after receiving a request for 

8 review under this subsection. 

9 ‘‘SEC. 736. VERIFICATION OF OFFSET PROJECTS. 

10 ‘‘(a) IN GENERAL.—As part of the regulations pro11 mulgated under section 732(a), the President shall estab12 lish requirements, including protocols, for verification of 

13 the quantity of greenhouse gas emission reductions or 

14 avoidance, or sequestration of greenhouse gases, resulting 

15 from an offset project. The regulations shall require that 

16 an offset project developer shall submit a report, prepared 

17 by a third-party verifier accredited under subsection (d), 

18 providing such information as the President requires to 

19 determine the quantity of greenhouse gas emission reduc20 tions or avoidance, or sequestration of greenhouse gas, re21 sulting from the offset project. 

22 ‘‘(b) SCHEDULE.—The President shall prescribe a 

23 schedule for the submission of verification reports under 

24 subsection (a). 


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1 ‘‘(c) VERIFICATION REPORT REQUIREMENTS.—The 

2 President shall specify the required components of a 

3 verification report required under subsection (a), which 

4 shall include— 

5 ‘‘(1) the name and contact information for a 

6 designated representative for the offset project devel7 oper; 

8 ‘‘(2) the quantity of greenhouse gas reduced, 

9 avoided, or sequestered; 

10 ‘‘(3) the methodologies applicable to the project 

11 pursuant to section 734; 

12 ‘‘(4) a certification that the project meets the 

13 applicable requirements; 

14 ‘‘(5) a certification establishing that the conflict 

15 of interest requirements in the regulations promul16 gated under subsection (d)(1) have been complied 

17 with; and 

18 ‘‘(6) any other information that the President 

19 considers to be necessary to achieve the purposes of 

20 this part. 

21 ‘‘(d) VERIFIER ACCREDITATION.— 

22 ‘‘(1) IN GENERAL.—As part of the regulations 

23 promulgated under section 732(a), the President 

24 shall establish a process and requirements for peri25 odic accreditation of third-party verifiers to ensure 


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1 that such verifiers are professionally qualified and 

2 have no conflicts of interest with offset project devel3 opers. 

4 ‘‘(2) STANDARDS.— 

5 ‘‘(A) AMERICAN NATIONAL STANDARDS IN6 STITUTE ACCREDITATION.—The President may 

7 accredit, or accept for purposes of accreditation 

8 under this subsection, verifiers accredited under 

9 the American National Standards Institute 

10 (ANSI) accreditation program in accordance 

11 with ISO 14065. The President shall accredit, 

12 or accept for accreditation, verifiers under this 

13 subparagraph only if the President finds that 

14 the American National Standards Institute ac15 creditation program provides sufficient assur16 ance that the requirements of this part will be 

17 met. 

18 ‘‘(B) EPA ACCREDITATION.—As part of 

19 the regulations promulgated under section 

20 732(a), the President may establish accredita21 tion standards for verifiers under this sub22 section, and may establish related training and 

23 testing programs and requirements. 

24 ‘‘(3) PUBLIC ACCESSIBILITY.—Each verifier 

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1 cordance with this subsection shall be listed in a 

2 publicly accessible database, which shall be main3 tained and updated by the President. 

4 ‘‘(4) REVOCATION.—The regulations concerning 

5 accreditation of third-party verifiers required under 

6 paragraph (1) shall establish a process for the Presi7 dent to revoke the accreditation of any third-party 

8 verifier that the President finds fails to maintain 

9 professional qualifications or to avoid a conflict of 

10 interest, or for other good cause. 

11 ‘‘SEC. 737. ISSUANCE OF OFFSET CREDITS. 

12 ‘‘(a) DETERMINATION AND NOTIFICATION.—Not 

13 later than 90 days after receiving a complete verification 

14 report under section 736, the President shall— 

15 ‘‘(1) make the report publicly available on the 

16 Internet; 

17 ‘‘(2) make a determination of the quantity of 

18 greenhouse gas emissions reduced or avoided, or 

19 greenhouse gases sequestered, resulting from an off20 set project approved under section 735; and 

21 ‘‘(3) notify the offset project developer in writ22 ing of such determination and make such determina23 tion publicly available on the Internet. 

24 ‘‘(b) ISSUANCE OF OFFSET CREDITS.—The Presi25 dent shall issue one offset credit to an offset project develVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00511 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 oper for each ton of carbon dioxide equivalent that the 

2 President has determined has been reduced, avoided, or 

3 sequestered during the period covered by a verification re4 port submitted in accordance with section 736, only if— 

5 ‘‘(1) the President has approved the offset 

6 project pursuant to section 735; and 

7 ‘‘(2) the relevant emissions reduction, avoid8 ance, or sequestration has— 

9 ‘‘(A) already occurred, during the offset 

10 project’s crediting period; and 

11 ‘‘(B) occurred after January 1, 2009. 

12 ‘‘(c) APPEAL.—The President shall establish proce13 dures for appeal and review of determinations made under 

14 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 President under subsection (a). 

19 ‘‘(e) REGISTRATION.—The President shall assign a 

20 unique serial number to and register each offset credit to 

21 be issued in the Offset Registry established under section 

22 732(d). 

23 ‘‘SEC. 738. AUDITS. 

24 ‘‘(a) IN GENERAL.—The President shall, on an ongo25 ing basis, conduct random audits of offset projects and 


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1 offset credits. The President shall conduct audits of the 

2 practices of third-party verifiers. In each year, the Presi3 dent shall conduct audits, at minimum, for a representa4 tive sample of project types and geographic areas. 

5 ‘‘(b) DELEGATION.—The President may delegate to 

6 a State or tribal government the responsibility for con7 ducting audits under this section if the President finds 

8 that the program proposed by the State or tribal govern9 ment provides assurances equivalent to those provided by 

10 the auditing program of the President, and that the integ11 rity of the offset program under this part will be main12 tained. Nothing in this subsection shall prevent the Presi13 dent from conducting any audit the President considers 

14 necessary and appropriate. 

15 ‘‘(c) AUDIT REQUIREMENTS.—As part of the regula16 tions promulgated under section 732(a), the appropriate 

17 officials shall establish requirements and protocols for an 

18 auditing program, whether undertaken by the appropriate 

19 officials or an authorized representative, concerning 

20 project developers, third-party verifiers, and various com21 ponents of the offsets program. Such regulations shall in22 clude— 

23 ‘‘(1) the components of the offset project, which 

24 shall be evaluated against the offset approval peti25 tion and the verification report; 


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1 ‘‘(2) the minimum experience or training of the 

2 auditors; 

3 ‘‘(3) the form in which reports shall be com4 pleted; 

5 ‘‘(4) requirements for delegating auditing func6 tions to States or tribal governments, including re7 quiring periodic reports from State or tribal govern8 ments on their auditing activities and findings; and 

9 ‘‘(5) any other information that the appropriate 

10 officials considers to be necessary to achieve the pur11 pose of the Act. 

12 ‘‘SEC. 739. PROGRAM REVIEW AND REVISION. 

13 ‘‘At least once every 5 years, the President shall re14 view and, based on new or updated information and taking 

15 into consideration the recommendations of the Advisory 

16 Board, update and revise— 

17 ‘‘(1) the list of eligible project types established 

18 under section 733; 

19 ‘‘(2) the methodologies established, including 

20 specific activity baselines, under section 734(a); 

21 ‘‘(3) the reversal requirements and mechanisms 

22 established or prescribed under section 734(b); 

23 ‘‘(4) measures to improve the accountability of 

24 the offsets program; and 


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1 ‘‘(5) any other requirements established under 

2 this part to ensure the environmental integrity and 

3 effective operation of this part. 

4 ‘‘SEC. 740. EARLY OFFSET SUPPLY. 

5 ‘‘(a) PROJECTS REGISTERED UNDER OTHER GOV6 ERNMENT-RECOGNIZED PROGRAMS.—Except as provided 

7 in subsection (b) or (c), after public notice and oppor8 tunity for comment, the President shall issue one offset 

9 credit for each ton of carbon dioxide equivalent emissions 

10 reduced, avoided, or sequestered— 

11 ‘‘(1) under an offset project that was started 

12 after January 1, 2001; 

13 ‘‘(2) for which a credit was issued under any 

14 regulatory or voluntary greenhouse gas emission off15 set program that the President determines— 

16 ‘‘(A) was established under State or tribal 

17 law or regulation prior to January 1, 2009, or 

18 has been approved by the President pursuant to 

19 subsection (e); 

20 ‘‘(B) has developed offset project type 

21 standards, methodologies, and protocols 

22 through a public consultation process or a peer 

23 review process; 

24 ‘‘(C) has made available to the public 

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1 quire that credited emission reductions, avoid2 ance, or sequestration are permanent, addi3 tional, verifiable, and enforceable; 

4 ‘‘(D) requires that all emission reductions, 

5 avoidance, or sequestration be verified by a 

6 State regulatory agency or an accredited third7 party independent verification body; 

8 ‘‘(E) requires that all credits issued are 

9 registered in a publicly accessible registry, with 

10 individual serial numbers assigned for each ton 

11 of carbon dioxide equivalent emission reduc12 tions, avoidance, or sequestration; and 

13 ‘‘(F) ensures that no credits are issued for 

14 activities for which the entity administering the 

15 program, or a program administrator or rep16 resentative, has funded, solicited, or served as a 

17 fund administrator for the development of, the 

18 project or activity that caused the emission re19 duction, avoidance, or sequestration; and 

20 ‘‘(3) for which the credit described in para21 graph (2) is transferred to the President. 

22 ‘‘(b) INELIGIBLE CREDITS.—Subsection (a) shall not 

23 apply to offset credits that have expired or have been re24 tired, canceled, or used for compliance under a program 

25 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 President 

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.— 

15 ‘‘(1) IN GENERAL.—Offset programs that ei16 ther— 

17 ‘‘(A) were not established under State or 

18 tribal law; or 

19 ‘‘(B) were not established prior to January 

20 1, 2009; 

21 but that otherwise meet all of the criteria of sub22 section (a)(2) may apply to the President to be ap23 proved under this subsection as an eligible program 

24 for early offset credits under this section. 


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1 ‘‘(2) APPROVAL.—The President shall approve 

2 any such program that the President determines has 

3 criteria and methodologies of at least equal strin4 gency to the criteria and methodologies of the pro5 grams established under State or tribal law that the 

6 President determines meet the criteria of subsection 

7 (a)(2). The President may approve types of offsets 

8 under any such program that are subject to criteria 

9 and methodologies of at least equal stringency to the 

10 criteria and methodologies for such types of offsets 

11 applied under the programs established under State 

12 or tribal law that the President determines meet the 

13 criteria of subsection (a)(2). The President shall 

14 make a determination on any application received 

15 under this subsection by not later than 180 days 

16 from the date of receipt of the application. 

17 ‘‘SEC. 741. ENVIRONMENTAL CONSIDERATIONS. 

18 ‘‘If the President lists forestry or other relevant land 

19 management-related offset projects as eligible offset 

20 project types under section 733, the President, in con21 sultation with appropriate Federal agencies, shall promul22 gate regulations to establish criteria for such offset 

23 projects— 

24 ‘‘(1) to ensure that native species are given pri25 mary consideration in such projects; 


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1 ‘‘(2) to enhance biological diversity in such 

2 projects; 

3 ‘‘(3) to prohibit the use of federally designated 

4 or State-designated noxious weeds; 

5 ‘‘(4) to prohibit the use of a species listed by 

6 a regional or State invasive plant authority within 

7 the applicable region or State; 

8 ‘‘(5) in the case of forestry offset projects, in 

9 accordance with widely accepted, environmentally 

10 sustainable forestry practices; 

11 ‘‘(6) to ensure that the offset project area was 

12 not converted from native ecosystems, such as a for13 est, grassland, scrubland or wetland, to generate off14 sets, unless such conversation took place at least 10 

15 years prior to the date of enactment of this title or 

16 before January 1, 2009, whichever date is earlier; 

17 and 

18 ‘‘(7) to the maximum extent practicable, ensure 

19 that the use of offset credits would be eligible to sat20 isfy emission reduction commitments made by the 

21 United States in multilateral agreements, such as 

22 the United Nations Framework Convention on Cli23 mate Change, done at New York on May 9, 1992 (or 

24 any successor agreement). 


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1 ‘‘SEC. 742. TRADING. 

2 ‘‘Section 724 shall apply to the trading of offset cred3 its. 

4 ‘‘SEC. 743. OFFICE OF OFFSETS INTEGRITY. 

5 ‘‘(a) ESTABLISHMENT.—There is established within 

6 the Office of the Assistant Attorney General of the Envi7 ronment and Natural Resources Division in the Depart8 ment of Justice a Carbon Offsets Integrity Unit, to be 

9 headed by a Special Counsel (hereinafter referred to as 

10 the ‘Special Counsel’). The Carbon Offsets Integrity Unit 

11 and the Special Counsel shall be responsible to and shall 

12 report directly to the Assistant Attorney General of the 

13 Environment and Natural Resources Division. 

14 ‘‘(b) APPOINTMENT.—The Special Counsel shall be 

15 appointed by the President, by and with the advice and 

16 consent of the Senate. 

17 ‘‘(c) RESPONSIBILITIES.—The Special Counsel 

18 shall— 

19 ‘‘(1) supervise and coordinate investigations 

20 and civil enforcement within the Department of Jus21 tice of the carbon offsets program under this part; 

22 ‘‘(2) ensure that Federal law relating to civil 

23 enforcement of the carbon offsets program is used to 

24 the fullest extent authorized; and 


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1 ‘‘(3) ensure that adequate resources are made 

2 available for the investigation and enforcement of 

3 civil violations of the carbon offsets program. 

4 ‘‘(d) COMPENSATION.—The Special Counsel shall be 

5 paid at the basic pay payable for level V of the Executive 

6 Schedule under section 5316 of title 5, United States 

7 Code. 

8 ‘‘(e) ASSIGNMENT OF PERSONNEL.—There shall be 

9 assigned to the Carbon Offsets Integrity Unit such per10 sonnel as the Attorney General determines to be necessary 

11 to provide an appropriate level of enforcement activity in 

12 the area of carbon offsets. 

13 ‘‘SEC. 744. INTERNATIONAL OFFSET CREDITS. 

14 ‘‘(a) IN GENERAL.—The Administrator, in consulta15 tion with the Secretary of State and the Administrator 

16 of the United States Agency for International Develop17 ment, may issue, in accordance with this section, inter18 national offset credits based on activities that reduce or 

19 avoid greenhouse gas emissions, or increase sequestration 

20 of greenhouse gases, in a developing country. Such credits 

21 may be issued for projects pursuant to the requirements 

22 of this part or as provided in subsection (c), (d), or (e). 

23 ‘‘(b) ISSUANCE.— 

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

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1 istrator, in consultation with the Secretary of State, 

2 the Administrator of the United States Agency for 

3 International Development, and any other appro4 priate Federal agency, and taking into consideration 

5 the recommendations of the Advisory Board, shall 

6 promulgate regulations for implementing this sec7 tion, taking into consideration specific factors rel8 evant to the determination of eligible international 

9 offset project types and the implementation of inter10 national methodologies for each offset type ap11 proved. Except as otherwise provided in this section, 

12 the issuance of international offset credits under this 

13 section shall be subject to the requirements of this 

14 part. 

15 ‘‘(2) REQUIREMENTS FOR INTERNATIONAL

16 OFFSET CREDITS.—The Administrator may issue 

17 international offset credits only if— 

18 ‘‘(A) the United States is a party to a bi19 lateral or multilateral agreement or arrange20 ment that includes the country in which the 

21 project or measure achieving the relevant green22 house gas emission reduction or avoidance, or 

23 greenhouse gas sequestration, has occurred; 

24 ‘‘(B) such country is a developing country; 

25 and 


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1 ‘‘(C) such agreement or arrangement— 

2 ‘‘(i) ensures that all of the require3 ments of this part apply to the issuance of 

4 international offset credits under this sec5 tion; 

6 ‘‘(ii) provides for the appropriate dis7 tribution of international offset credits 

8 issued; and 

9 ‘‘(iii) provides that the offset project 

10 developer be eligible to receive service of 

11 process in the United States for the pur12 pose of all civil and regulatory actions in 

13 Federal courts, if such service is made in 

14 accordance with the Federal rules for serv15 ice of process in the States in which the 

16 case or regulatory action is brought. 

17 ‘‘(3) SUPPLEMENTAL INTERNATIONAL OFFSET

18 CATEGORIES.— 

19 ‘‘(A) IN GENERAL.—In order to ensure a 

20 sufficient supply of international offsets and to 

21 reduce the cost of compliance with this title, the 

22 Administrator may establish categories of inter23 national offsets in addition to those described in 

24 subsections (c), (d), and (e), if— 


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1 ‘‘(i) for 2 consecutive years, the auc2 tion price for allowances reaches the mar3 ket stability reserve auction price under 

4 section 726(c); and 

5 ‘‘(ii) the Administrator determines 

6 that the total amount of international off7 sets held by covered entities for each of the 

8 2 years referred to in clause (i) does not 

9 exceed the limit on international offsets es10 tablished under section 722(d)(3). 

11 ‘‘(B) SUPPLEMENTAL CATEGORIES.— 

12 ‘‘(i) IN GENERAL.—Any supplemental 

13 categories of international offsets estab14 lished pursuant to subparagraph (A) 

15 shall— 

16 ‘‘(I) satisfy all applicable provi17 sions of this part, including subsection 

18 (b)(2) of this section and sections 733 

19 and 734; and 

20 ‘‘(II) meet the criteria described 

21 in clause (ii). 

22 ‘‘(ii) CRITERIA.—The criteria referred 

23 to in clause (i)(II) are that— 

24 ‘‘(I) the country in which the ac25 tivities in the offset category would 


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1 take place has developed and is imple2 menting a low carbon development 

3 plan that includes provisions for the 

4 activities described in the offset cat5 egory; 

6 ‘‘(II) the activities in the offset 

7 category are not activities included 

8 under subsection (c), (d) or (e); and 

9 ‘‘(III) the activities in the offset 

10 category satisfy specific criteria rel11 evant to methodologies and institu12 tional and technical capacities associ13 ated with developing country contexts 

14 to ensure adequate treatment of leak15 age, additionality, and permanence. 

16 ‘‘(c) SECTOR-BASED CREDITS.— 

17 ‘‘(1) IN GENERAL.—In order to minimize the 

18 potential for leakage and to encourage countries to 

19 take nationally appropriate mitigation actions to re20 duce or avoid greenhouse gas emissions, or sequester 

21 greenhouse gases, the Administrator, in consultation 

22 with the Secretary of State and the Administrator of 

23 the United States Agency for International Develop24 ment, shall— 


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1 ‘‘(A) identify sectors, or combinations of 

2 sectors, within specific countries with respect to 

3 which the issuance of international offset cred4 its on a sectoral basis is appropriate; and 

5 ‘‘(B) issue international offset credits for 

6 such sectors only on a sectoral basis. 

7 ‘‘(2) IDENTIFICATION OF SECTORS.— 

8 ‘‘(A) GENERAL RULE.—For purposes of 

9 paragraph (1)(A), a sectoral basis shall be ap10 propriate for activities— 

11 ‘‘(i) in countries that have compara12 tively high greenhouse gas emissions, or 

13 comparatively greater levels of economic 

14 development; and 

15 ‘‘(ii) that, if located in the United 

16 States, would be within a sector subject to 

17 the compliance obligation under section 

18 722. 

19 ‘‘(B) FACTORS.—In determining the sec20 tors and countries for which international offset 

21 credits should be awarded only on a sectoral 

22 basis, the Administrator, in consultation with 

23 the Secretary of State and the Administrator of 

24 the United States Agency for International De25 velopment, shall consider the following factors: 


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1 ‘‘(i) The country’s gross domestic 

2 product. 

3 ‘‘(ii) The country’s total greenhouse 

4 gas emissions. 

5 ‘‘(iii) Whether the comparable sector 

6 of the United States economy is covered by 

7 the compliance obligation under section 

8 722. 

9 ‘‘(iv) The heterogeneity or homo10 geneity of sources within the relevant sec11 tor. 

12 ‘‘(v) Whether the relevant sector pro13 vides products or services that are sold in 

14 internationally competitive markets. 

15 ‘‘(vi) The risk of leakage if inter16 national offset credits were issued on a 

17 project-level basis, instead of on a sectoral 

18 basis, for activities within the relevant sec19 tor. 

20 ‘‘(vii) The capability of accurately 

21 measuring, monitoring, reporting, and 

22 verifying the performance of sources across 

23 the relevant sector. 

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1 retary of State and the Administrator of 

2 the United States Agency for International 

3 Development, determines are appropriate 

4 to— 

5 ‘‘(I) ensure the integrity of the 

6 United States greenhouse gas emis7 sions limitations established under 

8 section 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 ‘‘(ix) The issuance of offsets for ac15 tivities that are— 

16 ‘‘(I) in addition to nationally ap17 propriate mitigation actions taken by 

18 developing countries pursuant to the 

19 low-carbon development plans of the 

20 countries; and 

21 ‘‘(II) on a sectoral basis. 

22 ‘‘(3) SECTORAL BASIS.— 

23 ‘‘(A) DEFINITION.—In this subsection, the 

24 term ‘sectoral basis’ means the issuance of 

25 international offset credits only for the quantity 


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1 of sector-wide reductions or avoidance of green2 house gas emissions, or sector-wide increases in 

3 sequestration of greenhouse gases, achieved 

4 across the relevant sector or sectors of the econ5 omy relative to a baseline level of emissions es6 tablished in an agreement or arrangement de7 scribed in subsection (b)(2)(A) for the sector. 

8 ‘‘(B) BASELINE.—The baseline for a sec9 tor shall— 

10 ‘‘(i) be established at levels of green11 house gas emissions lower than would 

12 occur under a business-as-usual scenario, 

13 taking into account relevant domestic or 

14 international policies or incentives to re15 duce greenhouse gas emissions; 

16 ‘‘(ii) be used to determine 

17 additionality and performance; 

18 ‘‘(iii) account for all significant 

19 sources of emissions from a sector; 

20 ‘‘(iv) be adjusted over time to reflect 

21 changing circumstances; 

22 ‘‘(v) be developed taking into consid23 eration such factors as— 

24 ‘‘(I) any established emissions 

25 performance level for the sector; 


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1 ‘‘(II) the current performance of 

2 the sector in the country; 

3 ‘‘(III) expected future trends of 

4 the sector in the country; and 

5 ‘‘(IV) historical data and other 

6 factors to ensure additionality; and 

7 ‘‘(vi) be designed to produce signifi8 cant deviations from business-as-usual 

9 emissions, consistent with nationally appro10 priate mitigation commitments or actions, 

11 in a way that equitably contributes to 

12 meeting thresholds identified in section 

13 705(e)(2). 

14 ‘‘(d) CREDITS ISSUED BY AN INTERNATIONAL

15 BODY.— 

16 ‘‘(1) IN GENERAL.—The Administrator, in con17 sultation with the Secretary of State, may issue 

18 international offset credits in exchange for instru19 ments in the nature of offset credits that are issued 

20 by an international body established pursuant to the 

21 United Nations Framework Convention on Climate 

22 Change, to a protocol to such Convention, or to a 

23 treaty that succeeds such Convention. The Adminis24 trator may issue international offset credits under 

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1 ments of subsection (b), the Administrator has de2 termined that the international body that issued the 

3 instruments has implemented substantive and proce4 dural requirements for the relevant project type that 

5 provide equal or greater assurance of the integrity of 

6 such instruments as is provided by the requirements 

7 of this part. Beginning on January 1, 2016, the Ad8 ministrator shall issue no offset credit pursuant to 

9 this subsection if the activity generating the green10 house gas emission reductions or avoidance, or 

11 greenhouse gas sequestration, occurs in a country 

12 and sector identified by the Administrator under 

13 subsection (c), unless the offset credit issued by the 

14 international body is consistent with section 744(c). 

15 ‘‘(2) RETIREMENT.—The Administrator, in 

16 consultation with the Secretary of State, shall seek, 

17 by whatever means appropriate, including agree18 ments, arrangements, or technical cooperation with 

19 the international issuing body described in para20 graph (1), to ensure that such body— 

21 ‘‘(A) is notified of the Administrator’s 

22 issuance, under this subsection, of an inter23 national offset credit in exchange for an instru24 ment issued by such international body; and 


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1 ‘‘(B) provides, to the extent feasible, for 

2 the disqualification of the instrument issued by 

3 such international body for subsequent use 

4 under any relevant foreign or international 

5 greenhouse gas regulatory program, regardless 

6 of whether such use is a sale, exchange, or sub7 mission to satisfy a compliance obligation. 

8 ‘‘(e) OFFSETS FROM REDUCED DEFORESTATION.— 

9 ‘‘(1) REQUIREMENTS.—The Administrator, in 

10 accordance with the regulations promulgated under 

11 subsection (b)(1) and an agreement or arrangement 

12 described in subsection (b)(2)(A), shall issue inter13 national offset credits for greenhouse gas emission 

14 reductions achieved through activities to reduce de15 forestation only if, in addition to the requirements of 

16 subsection (b)— 

17 ‘‘(A) the activity occurs in— 

18 ‘‘(i) a country listed by the Adminis19 trator pursuant to paragraph (2); 

20 ‘‘(ii) a State or province listed by the 

21 Administrator pursuant to paragraph (5); 

22 or 

23 ‘‘(iii) a country listed by the Adminis24 trator pursuant to paragraph (6); 


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1 ‘‘(B) except as provided in paragraph (5) 

2 or (6), the quantity of the international offset 

3 credits is determined by comparing the national 

4 emissions from deforestation relative to a na5 tional deforestation baseline for that country es6 tablished, in accordance with an agreement or 

7 arrangement described in subsection (b)(2)(A), 

8 pursuant to paragraph (4); 

9 ‘‘(C) the reduction in emissions from de10 forestation has occurred before the issuance of 

11 the international offset credit and, taking into 

12 consideration relevant international standards, 

13 has been demonstrated using ground-based in14 ventories, remote sensing technology, and other 

15 methodologies to ensure that all relevant carbon 

16 stocks are accounted; 

17 ‘‘(D) the Administrator has made appro18 priate adjustments, such as discounting for any 

19 additional uncertainty, to account for cir20 cumstances specific to the country, including its 

21 technical capacity described in paragraph 

22 (2)(A); 

23 ‘‘(E) the Administrator has determined 

24 that the country within which the activity oc25 curs has in place a publicly available strategic 


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1 plan that includes the criteria listed in para2 graph (2)(C); 

3 ‘‘(F) the activity is designed, carried out, 

4 and managed— 

5 ‘‘(i) in accordance with forest manage6 ment practices that— 

7 ‘‘(I) improve the livelihoods of 

8 forest communities; 

9 ‘‘(II) maintain the natural bio10 diversity, resilience, and carbon stor11 age capacity of forests; and 

12 ‘‘(III) do not adversely impact 

13 the permanence of forest carbon 

14 stocks or emission reductions; 

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 local 

21 communities, indigenous peoples, forest-de22 pendent communities, and vulnerable social 

23 groups; 

24 ‘‘(iv) with consultations with, and full 

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1 nous peoples, and forest-dependent com2 munities, in affected areas, as partners 

3 and primary stakeholders, prior to and 

4 during the design, planning, implementa5 tion, and monitoring and evaluation of ac6 tivities; 

7 ‘‘(v) with transparent and equitable 

8 sharing of profits and benefits derived 

9 from offset credits with local communities, 

10 indigenous peoples, and forest-dependent 

11 communities; 

12 ‘‘(vi) with full transparency, third13 party independent oversight, and public 

14 dissemination of related financial and con15 tractual arrangements, and 

16 ‘‘(vii) so that the social and environ17 mental impacts of these activities are mon18 itored and reported in sufficient detail to 

19 allow appropriate officials to determine 

20 compliance with the requirements of this 

21 section; 

22 ‘‘(G) the reduction otherwise satisfies and 

23 is consistent with any relevant requirements es24 tablished by an agreement reached under the 

25 auspices of the United Nations Framework 


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1 Convention on Climate Change, done at New 

2 York on May 9, 1992; and 

3 ‘‘(H) in the case that offsets are deter4 mined by comparing the national emissions 

5 from deforestation relative to a national, state6 level, or province-level deforestation baseline as 

7 provided in paragraph (4) or (5)— 

8 ‘‘(i) a list of activities to reduce defor9 estation is provided to the Administrator 

10 and made publicly available; 

11 ‘‘(ii) the social and environmental im12 pacts of these activities are monitored and 

13 reported in sufficient detail to allow the 

14 Administrator to determine compliance 

15 with the requirements of this section; and 

16 ‘‘(iii) the distribution of revenues for 

17 activities to reduce deforestation is trans18 parent, subject to independent third-party 

19 oversight, and publicly disseminated. 

20 ‘‘(2) ELIGIBLE COUNTRIES.—The Adminis21 trator, in consultation with the Secretary of State 

22 and the Administrator of the United States Agency 

23 for International Development, and in accordance 

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1 view and update, a list of the developing countries 

2 that have the capacity to participate in deforestation 

3 reduction activities at a national level, including— 

4 ‘‘(A) the technical capacity to monitor, 

5 measure, report, and verify forest carbon fluxes 

6 for all significant sources of greenhouse gas 

7 emissions from deforestation with an acceptable 

8 level of uncertainty, as determined taking into 

9 account relevant internationally accepted meth10 odologies, such as those established by the 

11 Intergovernmental Panel on Climate Change; 

12 ‘‘(B) the institutional capacity to reduce 

13 emissions from deforestation, including strong 

14 forest governance and mechanisms to ensure 

15 transparency and third-party independent over16 sight of offset activities and revenues, and the 

17 transparent and equitable distribution of offset 

18 revenues for local actions; and 

19 ‘‘(C) a land use or forest sector strategic 

20 plan that— 

21 ‘‘(i) assesses national and local drivers 

22 of deforestation and forest degradation and 

23 identifies reforms to national policies need24 ed to address them; 


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1 ‘‘(ii) estimates the country’s emissions 

2 from deforestation and forest degradation; 

3 ‘‘(iii) identifies improvements in and a 

4 timeline for data collection, monitoring, 

5 and institutional capacity necessary to im6 plement an effective national deforestation 

7 reduction program that meets the criteria 

8 set forth in this section (including a na9 tional deforestation baseline); 

10 ‘‘(iv) establishes a timeline for imple11 menting the program and transitioning 

12 forest-based economies to low-emissions de13 velopment pathways with respect to emis14 sions from forest and land use activities; 

15 ‘‘(v) includes a national policy for con16 sultations with, and full participation of, 

17 all stakeholders, especially indigenous and 

18 forest-dependent communities, in its de19 sign, planning, and implementation of ac20 tivities, whether at the national or local 

21 level, to reduce deforestation in the country 

22 (including a national process for address23 ing grievances if stakeholders have been 

24 caused social, environmental, or economic 

25 harm); 


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1 ‘‘(vi) provides for the distribution of 

2 revenues for activities to reduce deforest3 ation transparently and publicly, subject to 

4 independent third-party oversight; and 

5 ‘‘(vii) includes a national platform or 

6 a type of registry for information relating 

7 to deforestation and degradation policy and 

8 program implementation processes, includ9 ing a mechanism for the monitoring and 

10 reporting of the social and environmental 

11 impacts of those activities. 

12 ‘‘(3) PROTECTION OF INTERESTS.—With re13 spect to an agreement or arrangement described in 

14 subsection (b)(2)(A) with a country that addresses 

15 international offset credits under this subsection, the 

16 Administrator, in consultation with the Secretary of 

17 State and the Administrator of the United States 

18 Agency for International Development, shall under19 take due diligence to ensure the establishment and 

20 enforcement by such country of legal regimes, proc21 esses, standards, and safeguards that— 

22 ‘‘(A) give due regard to the rights and in23 terests of local communities, indigenous peoples, 

24 forest-dependent communities, and vulnerable 

25 social groups; 


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1 ‘‘(B) promote consultations with, and full 

2 participation of, forest-dependent communities 

3 and indigenous peoples in affected areas, as 

4 partners and primary stakeholders, prior to and 

5 during the design, planning, implementation, 

6 and monitoring and evaluation of activities; and 

7 ‘‘(C) encourage transparent and equitable 

8 sharing of profits and benefits derived from 

9 international offset credits with local commu10 nities, indigenous peoples, and forest-dependent 

11 communities. 

12 ‘‘(4) NATIONAL DEFORESTATION BASELINE.—A 

13 national deforestation baseline established under this 

14 subsection shall— 

15 ‘‘(A) be national in scope; 

16 ‘‘(B) be consistent with nationally appro17 priate mitigation commitments or actions with 

18 respect to deforestation, taking into consider19 ation the average annual historical deforestation 

20 rates of the country during a period of at least 

21 5 years, the applicable drivers of deforestation, 

22 and other factors to ensure that only reductions 

23 that are in addition to such commitments or ac24 tions will generate offsets; 


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1 ‘‘(C) establish a trajectory that would re2 sult in zero net deforestation by not later than 

3 20 years after the national deforestation base4 line has been established, including a spatially 

5 explicit land use plan that identifies intact and 

6 primary forest areas and managed forest areas 

7 that are to remain while the country is reaching 

8 the zero net deforestation trajectory; 

9 ‘‘(D) be adjusted over time to take account 

10 of changing national circumstances; 

11 ‘‘(E) be designed to account for all signifi12 cant sources of greenhouse gas emissions from 

13 deforestation in the country; and 

14 ‘‘(F) be consistent with the national defor15 estation baseline, if any, established for such 

16 country under section 753. 

17 ‘‘(5) STATE-LEVEL OR PROVINCE-LEVEL AC18 TIVITIES.— 

19 ‘‘(A) ELIGIBLE STATES OR PROVINCES.— 

20 The Administrator, in consultation with the 

21 Secretary of State and the Administrator of the 

22 United States Agency for International Devel23 opment, shall establish, and periodically review 

24 and update, a list of States or provinces in de25 veloping countries where— 


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1 ‘‘(i) the developing country is not in2 cluded on the list of countries established 

3 pursuant to paragraph (6)(A); 

4 ‘‘(ii) the State or province is under5 taking deforestation reduction activities; 

6 ‘‘(iii) the State or province has the ca7 pacity to engage in deforestation reduction 

8 activities at the State or province level, in9 cluding— 

10 ‘‘(I) the technical capacity to 

11 monitor and measure forest carbon 

12 fluxes for all significant sources of 

13 greenhouse gas emissions from defor14 estation with an acceptable amount of 

15 uncertainty, including a spatially ex16 plicit land use plan that identifies in17 tact and primary forest areas and 

18 managed forest areas that are to re19 main while the country is reaching the 

20 zero net deforestation trajectory; and 

21 ‘‘(II) the institutional capacity to 

22 reduce emissions from deforestation, 

23 including strong forest governance 

24 and mechanisms to deliver forest con25 servation resources for local actions; 


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1 ‘‘(iv) the State or province meets the 

2 eligibility criteria in paragraphs (2) and 

3 (3) for the geographic area under its juris4 diction; and 

5 ‘‘(v) the country— 

6 ‘‘(I) demonstrates that efforts 

7 are underway to transition to a na8 tional program within 5 years; or 

9 ‘‘(II) in the determination of the 

10 Administrator, is making a good-faith 

11 effort to develop a land use or forest 

12 sector strategic national plan or pro13 gram that meets the criteria described 

14 in paragraph (2)(C). 

15 ‘‘(B) ACTIVITIES.—The Administrator may 

16 issue international offset credits for greenhouse 

17 gas emission reductions achieved through activi18 ties to reduce deforestation at a State or pro19 vincial level that meet the requirements of this 

20 section. Such credits shall be determined by 

21 comparing the emissions from deforestation 

22 within that State or province relative to the 

23 State or province deforestation baseline for that 

24 State or province established, in accordance 

25 with an agreement or arrangement described in 


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1 subsection (b)(2)(A), pursuant to subparagraph 

2 (C) of this paragraph. 

3 ‘‘(C) STATE-LEVEL OR PROVINCE-LEVEL

4 DEFORESTATION BASELINE.—A State-level or 

5 province-level deforestation baseline shall— 

6 ‘‘(i) be consistent with any existing 

7 nationally appropriate mitigation commit8 ments or actions for the country in which 

9 the activity is occurring, so that only re10 ductions that are in addition to those com11 mitments or actions will generate offsets; 

12 ‘‘(ii) be developed taking into consid13 eration the average annual historical defor14 estation rates of the State or province dur15 ing a period of at least 5 years, relevant 

16 drivers of deforestation, and other factors 

17 to ensure additionality; 

18 ‘‘(iii) establish a trajectory that would 

19 result in zero net deforestation by not later 

20 than 20 years after the State-level or prov21 ince-level deforestation baseline has been 

22 established; and 

23 ‘‘(iv) be designed to account for all 

24 significant sources of greenhouse gas emis25 sions from deforestation in the State or 


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1 province and adjusted to fully account for 

2 emissions leakage outside the State or 

3 province through monitoring of major for4 ested areas in the host country and other 

5 areas of the host country susceptible to 

6 leakage. 

7 ‘‘(D) PHASE-OUT.—Beginning 5 years 

8 after the first calendar year for which a covered 

9 entity must demonstrate compliance with sec10 tion 722(a), the Administrator shall issue no 

11 further international offset credits for eligible 

12 State-level or province-level activities to reduce 

13 deforestation pursuant to this paragraph. 

14 ‘‘(6) PROJECTS AND PROGRAMS TO REDUCE

15 DEFORESTATION.— 

16 ‘‘(A) ELIGIBLE COUNTRIES.—The Admin17 istrator, in consultation with the Secretary of 

18 State and the Administrator of the United 

19 States Agency for International Development, 

20 shall establish, and periodically review and up21 date, a list of developing countries that— 

22 ‘‘(i) the Administrator determines, 

23 based on recent, credible, and reliable 

24 emissions data, account for less than 1 

25 percent of global greenhouse gas emissions 


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1 and less than 3 percent of global forest2 sector and land use change greenhouse gas 

3 emissions; 

4 ‘‘(ii) have, or in the determination of 

5 the Administrator are making a good faith 

6 effort to develop, a land use or forest sec7 tor strategic plan that meets the criteria 

8 described in paragraph (2)(C); and 

9 ‘‘(iii) has made, or in the determina10 tion of the Administrator, is making, a 

11 good-faith effort to develop, through the 

12 implementation of activities under this sec13 tion, a monitoring program for major for14 ested areas in a host country and other 

15 areas in a host country susceptible to leak16 age, including a spatially explicit land use 

17 plan that identifies intact and primary for18 est areas and managed forest areas that 

19 are to remain while country is reaching the 

20 zero net deforestation trajectory. 

21 ‘‘(B) ACTIVITIES.—The Administrator may 

22 issue international offset credits for greenhouse 

23 gas emission reductions achieved through 

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1 graph (A) that meet the requirements of this 

2 section. The quantity of international offset 

3 credits shall be determined by comparing the 

4 project-level or program-level emissions from 

5 deforestation to a deforestation baseline for 

6 such project or program established pursuant to 

7 subparagraph (C). 

8 ‘‘(C) PROJECT-LEVEL OR PROGRAM-LEVEL

9 BASELINE.—A project-level or program-level de10 forestation baseline shall— 

11 ‘‘(i) be consistent with any existing 

12 nationally appropriate mitigation commit13 ments or actions for the country in which 

14 the project or program is occurring, so 

15 that only reductions that are in addition to 

16 such commitments or actions will generate 

17 offsets; 

18 ‘‘(ii) be developed taking into consid19 eration the average annual historical defor20 estation rates in the project or program 

21 boundary during a period of at least 5 

22 years, applicable drivers of deforestation, 

23 and other factors to ensure additionality; 

24 ‘‘(iii) be designed to account for all 

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1 sions from deforestation in the project or 

2 program boundary; and 

3 ‘‘(iv) be adjusted to fully account for 

4 emissions leakage outside the project or 

5 program boundary, including— 

6 ‘‘(I) estimation through moni7 toring of major forested areas in a 

8 host country and other areas in a host 

9 country susceptible to leakage, pursu10 ant to section 744(e)(5); and 

11 ‘‘(II) a spatially explicit land use 

12 plan that identifies intact and primary 

13 forest areas and managed forest areas 

14 that are to remain while country is 

15 reaching the zero net deforestation 

16 trajectory. 

17 ‘‘(D) PHASE-OUT.— 

18 ‘‘(i) IN GENERAL.—Beginning on the 

19 date that is 8 years after the first calendar 

20 year for which a covered entity must dem21 onstrate compliance with section 722(a), 

22 the Administrator shall issue no further 

23 international offset credits for project-level 

24 or program-level activities as described in 


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1 this paragraph, except as provided in 

2 clause (ii). 

3 ‘‘(ii) EXTENSION.—The Administrator 

4 may extend the phase out deadline for the 

5 issuance of international offset credits 

6 under this section by up to 5 years with re7 spect to eligible activities taking place in a 

8 least developed country, which is a foreign 

9 country that the United Nations has iden10 tified as among the least developed of de11 veloping countries at the time that the Ad12 ministrator determines to provide an exten13 sion, provided that the Administrator, in 

14 consultation with the Secretary of State 

15 and the Administrator of the United States 

16 Agency for International Development, de17 termines the country— 

18 ‘‘(I) lacks sufficient capacity to 

19 adopt and implement effective pro20 grams to achieve reductions in defor21 estation measured against national 

22 baselines; 

23 ‘‘(II) is receiving support under 

24 part E to develop such capacity; and 


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1 ‘‘(III) has developed and is work2 ing to implement a credible national 

3 strategy or plan to reduce deforest4 ation. 

5 ‘‘(7) EXPANSION OF SCOPE.—In implementing 

6 this subsection, the Administrator, taking into con7 sideration the recommendations of the Advisory 

8 Board, may— 

9 ‘‘(A) expand credible activities to include 

10 forest degradation; and 

11 ‘‘(B) include soil carbon losses associated 

12 with forested wetlands or peatlands. 

13 ‘‘(f) MODIFICATION OF REQUIREMENTS.—In promul14 gating regulations under subsection (b)(1) with respect to 

15 the issuance of international offset credits under sub16 section (c), (d), or (e), the Administrator, in consultation 

17 with the Secretary of State and the Administrator of the 

18 United States Agency for International Development, may 

19 modify or omit a requirement of this part (excluding the 

20 requirements of this section) if the Administrator deter21 mines that the application of that requirement to such 

22 subsection is not feasible or would result in the creation 

23 of offset credits that would not be eligible to satisfy emis24 sions reduction commitments made by the United States 

25 pursuant to the United Nations Framework Convention 


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1 on Climate Change, done at New York on May 9, 1992 

2 (or any successor agreement). In modifying or omitting 

3 such a requirement on the basis of infeasibility, the Ad4 ministrator, in consultation with the Secretary of State 

5 and the Administrator of the United States Agency for 

6 International Development, shall ensure, with an adequate 

7 margin of safety, the integrity of international offset cred8 its issued under this section and of the greenhouse gas 

9 emissions limitations established pursuant to section 703. 

10 ‘‘(g) AVOIDING DOUBLE COUNTING.—The Adminis11 trator, in consultation with the Secretary of State, shall 

12 seek, by whatever means appropriate, including agree13 ments, arrangements, or technical cooperation, to ensure 

14 that activities on the basis of which international offset 

15 credits are issued under this section are not used for com16 pliance with an obligation to reduce or avoid greenhouse 

17 gas emissions, or increase greenhouse gas sequestration, 

18 under a foreign or international regulatory system. In ad19 dition, no international offset credits shall be issued for 

20 emission reductions from activities with respect to which 

21 emission allowances were allocated under section 771(d) 

22 for distribution under part E. 

23 ‘‘(h) LIMITATION.—The Administrator shall not issue 

24 international offset credits generated by projects based on 

25 the destruction of hydrofluorocarbons.’’. 


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1 SEC. 102. DEFINITIONS. 

2 Title VII of the Clean Air Act (as added by section 

3 101 of this division) is amended by inserting before part 

4 A the following: 

5 ‘‘SEC. 700. DEFINITIONS. 

6 ‘‘In this title: 

7 ‘‘(1) ADDITIONAL.—The term ‘additional’, 

8 when used with respect to reductions or avoidance of 

9 greenhouse gas emissions, or to sequestration of 

10 greenhouse gases, means reductions, avoidance, or 

11 sequestration that result in a lower level of net 

12 greenhouse gas emissions or atmospheric concentra13 tions than would occur in the absence of an offset 

14 credit. 

15 ‘‘(2) ADDITIONALITY.—The term ‘additionality’ 

16 means the extent to which reductions or avoidance 

17 of greenhouse gas emissions, or sequestration of 

18 greenhouse gases, are additional. 

19 ‘‘(3) ADVISORY BOARD.—The term ‘Advisory 

20 Board’ means the Offsets Integrity Advisory Board 

21 established under section 731. 

22 ‘‘(4) AFFILIATED.—The term ‘affiliated’— 

23 ‘‘(A) when used in relation to an entity, 

24 means owned or controlled by, or under com25 mon ownership or control with, another entity, 

26 as determined by the Administrator; and 


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1 ‘‘(B) when used in relation to a natural 

2 gas local distribution company, means owned or 

3 controlled by, or under common ownership or 

4 control with, another natural gas local distribu5 tion company, as determined by the Adminis6 trator. 

7 ‘‘(5) ALLOWANCE.—The term ‘allowance’ 

8 means a limited authorization to emit, or have at9 tributable greenhouse gas emissions in an amount 

10 of, 1 ton of carbon dioxide equivalent of a green11 house gas in accordance with this title; it includes an 

12 emission allowance, a compensatory allowance, or an 

13 international emission allowance. 

14 ‘‘(6) ATTRIBUTABLE GREENHOUSE GAS EMIS15 SIONS.—The term ‘attributable greenhouse gas emis16 sions’ means— 

17 ‘‘(A) for a covered entity that is a fuel pro18 ducer or importer described in paragraph 

19 (13)(B), greenhouse gases that would be emit20 ted from the combustion of any petroleum21 based or coal-based liquid fuel, petroleum coke, 

22 or natural gas liquid, produced or imported by 

23 that covered entity for sale or distribution in 

24 interstate commerce, assuming no capture and 

25 sequestration of any greenhouse gas emissions; 


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1 ‘‘(B) for a covered entity that is an indus2 trial gas producer or importer described in 

3 paragraph (13)(C), the tons of carbon dioxide 

4 equivalent of fossil fuel-based carbon dioxide, 

5 nitrous oxide, any fluorinated gas, other than 

6 nitrogen trifluoride, that is a greenhouse gas, or 

7 any combination thereof— 

8 ‘‘(i) produced or imported by such 

9 covered entity during the previous calendar 

10 year for sale or distribution in interstate 

11 commerce; or 

12 ‘‘(ii) released as fugitive emissions in 

13 the production of fluorinated gas; and 

14 ‘‘(C) for a natural gas local distribution 

15 company described in paragraph (13)(J), green16 house gases that would be emitted from the 

17 combustion of the natural gas, and any other 

18 gas meeting the specifications for commingling 

19 with natural gas for purposes of delivery, that 

20 such entity delivered during the previous cal21 endar year to customers that are not covered 

22 entities, assuming no capture and sequestration 

23 of that greenhouse gas. 

24 ‘‘(7) BIOLOGICAL SEQUESTRATION; BIO25 LOGICALLY SEQUESTERED.—The terms ‘biological 


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1 sequestration’ and ‘biologically sequestered’ mean 

2 the removal of greenhouse gases from the atmos3 phere by terrestrial biological means, such as by 

4 growing plants, and the storage of those greenhouse 

5 gases in plants or soils. 

6 ‘‘(8) CAPPED EMISSIONS.—The term ‘capped 

7 emissions’ means greenhouse gas emissions to which 

8 section 722 applies, including emissions from the 

9 combustion of natural gas, petroleum-based or coal10 based liquid fuel, petroleum coke, or natural gas liq11 uid to which section 722(b)(2) or (8) applies. 

12 ‘‘(9) CAPPED SOURCE.—The term ‘capped 

13 source’ means a source that directly emits capped 

14 emissions. 

15 ‘‘(10) CARBON DIOXIDE EQUIVALENT.—The 

16 term ‘carbon dioxide equivalent’ means the unit of 

17 measure, expressed in metric tons, of greenhouse 

18 gases as provided under section 711 or 712. 

19 ‘‘(11) CARBON STOCK.—The term ‘carbon 

20 stock’ means the quantity of carbon contained in a 

21 biological reservoir or system which has the capacity 

22 to accumulate or release carbon. 

23 ‘‘(12) COMPENSATORY ALLOWANCE.—The term 

24 ‘compensatory allowance’ means an allowance issued 

25 under section 721(f). 


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1 ‘‘(13) COVERED ENTITY.—The term ‘covered 

2 entity’ means each of the following: 

3 ‘‘(A) Any electricity source. 

4 ‘‘(B)(i) Any stationary source that pro5 duces petroleum-based or coal-based liquid fuel, 

6 petroleum coke, or natural gas liquid, the com7 bustion of which would emit 25,000 or more 

8 tons of carbon dioxide equivalent, as determined 

9 by the Administrator. 

10 ‘‘(ii) Any entity that (or any group of 2 or 

11 more affiliated entities that, in the aggregate) 

12 imports petroleum-based or coal-based liquid 

13 fuel, petroleum coke, or natural gas liquid, the 

14 combustion of which would emit 25,000 or more 

15 tons of carbon dioxide equivalent, as determined 

16 by the Administrator. 

17 ‘‘(C) Any stationary source that produces, 

18 and any entity that (or any group of two or 

19 more affiliated entities that, in the aggregate) 

20 imports, for sale or distribution in interstate 

21 commerce, in bulk, or in products designated by 

22 the Administrator, in 2008 or any subsequent 

23 year more than 25,000 tons of carbon dioxide 

24 equivalent of— 

25 ‘‘(i) fossil fuel-based carbon dioxide; 


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1 ‘‘(ii) nitrous oxide; 

2 ‘‘(iii) except as otherwise provided in 

3 section 714, perfluorocarbons; 

4 ‘‘(iv) sulfur hexafluoride; 

5 ‘‘(v) any other fluorinated gas, except 

6 for nitrogen trifluoride, that is a green7 house gas, as designated by the Adminis8 trator under section 711(b) or (c); or 

9 ‘‘(vi) any combination of greenhouse 

10 gases described in clauses (i) through (v). 

11 ‘‘(D) Any stationary source that has emit12 ted 25,000 or more tons of carbon dioxide 

13 equivalent of nitrogen trifluoride in 2008 or any 

14 subsequent year. 

15 ‘‘(E) Any geologic sequestration site. 

16 ‘‘(F) Any stationary source in the following 

17 industrial sectors: 

18 ‘‘(i) Adipic acid production. 

19 ‘‘(ii) Primary aluminum production. 

20 ‘‘(iii) Ammonia manufacturing. 

21 ‘‘(iv) Cement production, excluding 

22 grinding-only operations. 

23 ‘‘(v) Hydrochlorofluorocarbon produc24 tion. 

25 ‘‘(vi) Lime manufacturing. 


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1 ‘‘(vii) Nitric acid production. 

2 ‘‘(viii) Petroleum refining. 

3 ‘‘(ix) Phosphoric acid production. 

4 ‘‘(x) Silicon carbide production. 

5 ‘‘(xi) Soda ash production. 

6 ‘‘(xii) Titanium dioxide production. 

7 ‘‘(xiii) Coal-based liquid or gaseous 

8 fuel production. 

9 ‘‘(G) Any stationary source in the chemical 

10 or petrochemical sector that, in 2008 or any 

11 subsequent year— 

12 ‘‘(i) produces acrylonitrile, carbon 

13 black, ethylene, ethylene dichloride, ethyl14 ene oxide, or methanol; or 

15 ‘‘(ii) produces a chemical or petro16 chemical product if producing that product 

17 results in annual combustion plus process 

18 emissions of 25,000 or more tons of carbon 

19 dioxide equivalent. 

20 ‘‘(H) Any stationary source that— 

21 ‘‘(i) is in one of the following indus22 trial sectors: ethanol production; ferroalloy 

23 production; fluorinated gas production; 

24 food processing; glass production; hydrogen 

25 production; metal ore production or other 


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1 processing; iron and steel production; lead 

2 production; pulp and paper manufacturing; 

3 and zinc production; and 

4 ‘‘(ii) has emitted 25,000 or more tons 

5 of carbon dioxide equivalent in 2008 or 

6 any subsequent year. 

7 ‘‘(I) Any fossil fuel-fired combustion device 

8 (such as a boiler) or grouping of such devices 

9 that— 

10 ‘‘(i) is all or part of an industrial 

11 source not specified in subparagraph (D), 

12 (F), (G), or (H); and 

13 ‘‘(ii) has emitted 25,000 or more tons 

14 of carbon dioxide equivalent in 2008 or 

15 any subsequent year. 

16 ‘‘(J) Any natural gas local distribution 

17 company that (or any group of 2 or more affili18 ated natural gas local distribution companies 

19 that, in the aggregate) in 2008 or any subse20 quent year, delivers 460,000,000 cubic feet or 

21 more of natural gas to customers that are not 

22 covered entities. 

23 ‘‘(14) CREDITING PERIOD.—The term ‘crediting 

24 period’ means the period with respect to which an 


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1 offset project is eligible to earn offset credits under 

2 part D, as determined under section 734(c). 

3 ‘‘(15) DESIGNATED REPRESENTATIVE.—The 

4 term ‘designated representative’ means, with respect 

5 to a covered entity, a reporting entity, an offset 

6 project developer, or any other entity receiving or 

7 holding allowances or offset credits under this title, 

8 an individual authorized, through a certificate of 

9 representation submitted to the Administrator by 

10 the owners and operators or similar entity official, to 

11 represent the owners and operators or similar entity 

12 official in all matters pertaining to this title (includ13 ing the holding, transfer, or disposition of allowances 

14 or offset credits), and to make all submissions to the 

15 Administrator under this title. 

16 ‘‘(16) DEVELOPING COUNTRY.—The term ‘de17 veloping country’ means a country eligible to receive 

18 official development assistance according to the in19 come guidelines of the Development Assistance Com20 mittee of the Organization for Economic Coopera21 tion and Development. 

22 ‘‘(17) DOMESTIC OFFSET CREDIT.— 

23 ‘‘(A) IN GENERAL.—The term ‘domestic 

24 offset credit’ means an offset credit issued 


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1 under part D, other than an international offset 

2 credit. 

3 ‘‘(B) EXCLUSION.—The term ‘domestic 

4 offset credit’ does not include a term offset 

5 credit. 

6 ‘‘(18) ELECTRICITY SOURCE.—The term ‘elec7 tricity source’ means a stationary source that in8 cludes one or more utility units. 

9 ‘‘(19) EMISSION.—The term ‘emission’ means 

10 the release of a greenhouse gas into the ambient air. 

11 Such term does not include gases that are captured 

12 and sequestered, except to the extent that they are 

13 later released into the atmosphere, in which case 

14 compliance must be demonstrated pursuant to sec15 tion 722(b)(5). 

16 ‘‘(20) EMISSION ALLOWANCE.—The term ‘emis17 sion allowance’ means an allowance established 

18 under section 721(a) or 726(g)(2). 

19 ‘‘(21) FAIR MARKET VALUE.—The term ‘fair 

20 market value’ means the average daily closing price 

21 on registered exchanges or, if such a price is un22 available, the average price as determined by the Ad23 ministrator, during a specified time period, of an 

24 emission allowance. 


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1 ‘‘(22) FEDERAL LAND.—The term ‘Federal 

2 land’ means land that is owned by the United 

3 States, other than land held in trust for an Indian 

4 or Indian tribe. 

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

6 means natural gas, petroleum, or coal, or any form 

7 of solid, liquid, or gaseous fuel derived from such 

8 material, including consumer products that are de9 rived from such materials and are combusted. 

10 ‘‘(24) FOSSIL FUEL-FIRED.—The term ‘fossil 

11 fuel-fired’ means powered by combustion of fossil 

12 fuel, alone or in combination with any other fuel, re13 gardless of the percentage of fossil fuel consumed. 

14 ‘‘(25) FUGITIVE EMISSIONS.—The term ‘fugi15 tive emissions’ means emissions from leaks, valves, 

16 joints, or other small openings in pipes, ducts, or 

17 other equipment, or from vents. 

18 ‘‘(26) GEOLOGIC SEQUESTRATION; GEOLOGI19 CALLY SEQUESTERED.—The terms ‘geologic seques20 tration’ and ‘geologically sequestered’ mean the se21 questration of greenhouse gases in subsurface geo22 logic formations for purposes of permanent storage. 

23 ‘‘(27) GEOLOGIC SEQUESTRATION SITE.—The 

24 term ‘geologic sequestration site’ means a site where 

25 carbon dioxide is geologically sequestered. 


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1 ‘‘(28) GREENHOUSE GAS.—The term ‘green2 house gas’ means any gas described in section 

3 711(a) or designated under section 711(b), (c), or 

4 (e), except to the extent that it is regulated under 

5 title VI. 

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

7 The term ‘high conservation priority land’ means 

8 land that is not Federal land and is— 

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

10 imperiled or imperiled under a State Natural 

11 Heritage Program; or 

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

13 as identified by the office of the State Forester 

14 or relevant State agency with regulatory juris15 diction over forestry activities. 

16 ‘‘(30) HOLD.—The term ‘hold’ means, with re17 spect to an allowance, offset credit, or term offset 

18 credit, to have in the appropriate account in the al19 lowance tracking system, or submit to the Adminis20 trator for recording in such account. 

21 ‘‘(31) INDUSTRIAL SOURCE.—The term ‘indus22 trial source’ means any stationary source that— 

23 ‘‘(A) is not an electricity source; and 

24 ‘‘(B) is in— 


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1 ‘‘(i) the manufacturing sector (as de2 fined in North American Industrial Classi3 fication System codes 31, 32, and 33); or 

4 ‘‘(ii) the natural gas processing or 

5 natural gas pipeline transportation sector 

6 (as defined in North American Industrial 

7 Classification System codes 211112 or 

8 486210). 

9 ‘‘(32) INTERNATIONAL EMISSION ALLOW10 ANCE.—The term ‘international emission allowance’ 

11 means a tradable authorization to emit 1 ton of car12 bon dioxide equivalent of greenhouse gas that is 

13 issued by a national or supranational foreign govern14 ment pursuant to a qualifying international program 

15 designated by the Administrator pursuant to section 

16 728(a). 

17 ‘‘(33) INTERNATIONAL OFFSET CREDIT.—The 

18 term ‘international offset credit’ means an offset 

19 credit issued by the Administrator under section 

20 744. 

21 ‘‘(34) LEAKAGE.—The term ‘leakage’ means a 

22 significant increase in greenhouse gas emissions, or 

23 significant decrease in sequestration, which is caused 

24 by an offset project and occurs outside the bound25 aries of the offset project. 


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1 ‘‘(35) MARKET STABILITY RESERVE ALLOW2 ANCE.—The term ‘market stability reserve allow3 ance’ means an emission allowance reserved for, 

4 transferred to, or deposited in the market stability 

5 reserve, or established, under section 726. 

6 ‘‘(36) MINERAL SEQUESTRATION.—The term 

7 ‘mineral sequestration’ means sequestration of car8 bon dioxide from the atmosphere by capturing car9 bon dioxide into a permanent mineral, such as the 

10 aqueous precipitation of carbonate minerals that re11 sults in the storage of carbon dioxide in a mineral 

12 form. 

13 ‘‘(37) NATURAL GAS LIQUID.—The term ‘nat14 ural gas liquid’ means ethane, butane, isobutane, 

15 natural gasoline, and propane which is ready for 

16 commercial sale or use. 

17 ‘‘(38) NATURAL GAS LOCAL DISTRIBUTION

18 COMPANY.—The term ‘natural gas local distribution 

19 company’ has the meaning given the term ‘local dis20 tribution company’ in section 2(17) of the Natural 

21 Gas Policy Act of 1978 (15 U.S.C. 3301(17)). 

22 ‘‘(39) OFFSET CREDIT.— 

23 ‘‘(A) IN GENERAL.—The term ‘offset cred24 it’ means an offset credit issued under part D. 


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1 ‘‘(B) EXCLUSION.—The term ‘offset credit’ 

2 does not include a term offset credit. 

3 ‘‘(40) OFFSET PROJECT.—The term ‘offset 

4 project’ means a project or activity that reduces or 

5 avoids greenhouse gas emissions, or sequesters 

6 greenhouse gases, and for which offset credits are or 

7 may be issued under part D. 

8 ‘‘(41) OFFSET PROJECT DEVELOPER.—The 

9 term ‘offset project developer’ means the individual 

10 or entity designated as the offset project developer 

11 in an offset project approval petition under section 

12 735(c)(1). 

13 ‘‘(42) QUALIFIED R&D FACILITY.—The term 

14 ‘qualified R&D facility’ means a facility that con15 ducts research and development, that was in oper16 ation as of the date of enactment of this title, and 

17 that is part of a covered entity subject to paragraphs 

18 (1) through (8) of section 722(b). 

19 ‘‘(43) PETROLEUM.—The term ‘petroleum’ in20 cludes crude oil, tar sands, oil shale, and heavy oils. 

21 ‘‘(44) REPEATED INTENTIONAL REVERSALS.— 

22 The term ‘repeated intentional reversals’ means at 

23 least 3 intentional reversals, as determined by the 

24 Administrator or a court under section 

25 734(b)(3)(B)(ii). 


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1 ‘‘(45) RESEARCH AND DEVELOPMENT.—The 

2 term ‘research and development’ means activities— 

3 ‘‘(A) that are conducted in process units or 

4 at laboratory bench-scale settings; 

5 ‘‘(B) whose purpose is to conduct research 

6 and development for new processes, tech7 nologies, or products that contribute to lower 

8 greenhouse gas emissions; and 

9 ‘‘(C) that do not manufacture products for 

10 sale. 

11 ‘‘(46) RENEWABLE BIOMASS.—The term ‘re12 newable biomass’ means any of the following: 

13 ‘‘(A) Plant material, including waste mate14 rial, harvested or collected from actively man15 aged agricultural land that was in cultivation, 

16 cleared, or fallow and nonforested on January 

17 1, 2009. 

18 ‘‘(B) Plant material, including waste mate19 rial, harvested or collected from pastureland 

20 that was nonforested on January 1, 2009. 

21 ‘‘(C) Nonhazardous vegetative matter de22 rived from waste, including separated yard 

23 waste, landscape right-of-way trimmings, con24 struction and demolition debris, or food waste 

25 (but not municipal solid waste, recyclable waste 


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1 paper, painted, treated or pressurized wood, or 

2 wood contaminated with plastic or metals). 

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

4 including products of animal waste digesters. 

5 ‘‘(E) Algae. 

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

7 other vegetative matter removed from within 

8 600 feet of any building, campground, or route 

9 designated for evacuation by a public official 

10 with responsibility for emergency preparedness, 

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

12 transmission line, utility tower, or water supply 

13 line. 

14 ‘‘(G) Residues from or byproducts of 

15 milled logs. 

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

17 forested land that is not Federal and is not 

18 high conservation priority land: 

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

20 interplanted energy crops, or any other 

21 vegetative matter removed from an actively 

22 managed tree plantation established— 

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


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1 ‘‘(II) on land that, as of January 

2 1, 2009, was cultivated or fallow and 

3 non-forested. 

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

5 cull trees, pulpwood, and brush removed 

6 from naturally regenerated forests or other 

7 non-plantation forests, including for the 

8 purposes of hazardous fuel reduction or 

9 preventative treatment for reducing or con10 taining insect or disease infestation. 

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

12 trees, pulpwood, brush, and species that 

13 are non-native and noxious, from stands 

14 that were planted and managed after Jan15 uary 1, 2009, to restore or maintain native 

16 forest types. 

17 ‘‘(iv) Dead or severely damaged trees 

18 removed within 5 years of fire, blowdown, 

19 or other natural disaster, and badly in20 fested trees. 

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

22 or removed invasive species from National For23 est System land and public lands (as defined in 

24 section 103 of the Federal Land Policy and 

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


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1 including those that are byproducts of preven2 tive treatments (such as trees, wood, brush, 

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

4 as part of a federally recognized timber sale, or 

5 that are removed to reduce hazardous fuels, to 

6 reduce or contain disease or insect infestation, 

7 or to restore ecosystem health, and that are— 

8 ‘‘(i) not from components of the Na9 tional Wilderness Preservation System, 

10 Wilderness Study Areas, Inventoried 

11 Roadless Areas, old growth or mature for12 est stands, components of the National 

13 Landscape Conservation System, National 

14 Monuments, National Conservation Areas, 

15 Designated Primitive Areas; or Wild and 

16 Scenic Rivers corridors; 

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

19 appropriate Federal land manager; and 

20 ‘‘(iii) are harvested in accordance with 

21 Federal and State law, and applicable land 

22 management plans. 

23 ‘‘(47) RETIRE.—The term ‘retire’, with respect 

24 to an allowance, offset credit, or term offset credit 

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1 qualify such allowance or offset credit for any subse2 quent use under this title, regardless of whether the 

3 use is a sale, exchange, or submission of the allow4 ance, offset credit, or term offset credit to satisfy a 

5 compliance obligation. 

6 ‘‘(48) REVERSAL.—The term ‘reversal’ means 

7 an intentional or unintentional loss of sequestered 

8 greenhouse gases to the atmosphere. 

9 ‘‘(49) SEQUESTERED AND SEQUESTRATION.— 

10 The terms ‘sequestered’ and ‘sequestration’ mean 

11 the separation, isolation, or removal of greenhouse 

12 gases from the atmosphere, as determined by the 

13 Administrator. The terms include biological, geo14 logic, and mineral sequestration, but do not include 

15 ocean fertilization techniques. 

16 ‘‘(50) STATIONARY SOURCE.—The term ‘sta17 tionary source’ means any integrated operation com18 prising any plant, building, structure, or stationary 

19 equipment, including support buildings and equip20 ment, that is located within one or more contiguous 

21 or adjacent properties, is under common control of 

22 the same person or persons, and emits or may emit 

23 a greenhouse gas. 

24 ‘‘(51) TON.—The term ‘ton’ means a metric 

25 ton. 


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1 ‘‘(52) UNCAPPED EMISSIONS.—The term ‘un2 capped emissions’ means emissions of greenhouse 

3 gases emitted after December 31, 2011, that are not 

4 capped emissions. 

5 ‘‘(53) UNITED STATES GREENHOUSE GAS EMIS6 SIONS.—The term ‘United States greenhouse gas 

7 emissions’ means the total quantity of annual green8 house gas emissions from the United States, as cal9 culated by the Administrator and reported to the 

10 United Nations Framework Convention on Climate 

11 Change Secretariat. 

12 ‘‘(54) UTILITY UNIT.—The term ‘utility unit’ 

13 means a combustion device that, on January 1, 

14 2009, or any date thereafter, is fossil fuel-fired and 

15 serves a generator that produces electricity for sale, 

16 unless such combustion device, during the 12-month 

17 period starting the later of January 1, 2009, or the 

18 commencement of commercial operation and each 

19 calendar year starting after such later date— 

20 ‘‘(A) is part of an integrated cycle system 

21 that cogenerates steam and electricity during 

22 normal operation and that supplies one-third or 

23 less of its potential electric output capacity and 

24 25 MW or less of electrical output for sale; or 


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1 ‘‘(B) combusts materials of which more 

2 than 95 percent is municipal solid waste on a 

3 heat input basis. 

4 ‘‘(55) VINTAGE YEAR.—The term ‘vintage year’ 

5 means the calendar year for which an emission al6 lowance is established under section 721(a) or which 

7 is assigned to an emission allowance under section 

8 726(g)(3)(A), except that the vintage year for a 

9 market stability reserve allowance shall be the year 

10 in which such allowance is purchased at auction.’’. 

11 SEC. 103. OFFSET REPORTING REQUIREMENTS. 

12 Section 114 of Clean Air Act (42 U.S.C. 7414) is 

13 amended by adding at the end the following: 

14 ‘‘(e) RECORDKEEPING FOR CARBON OFFSETS PRO15 GRAM.—For the purpose of implementing the carbon off16 sets program set forth in subtitle D of title VII, the Ad17 ministrator shall require any person who is an offset 

18 project developer, and may require any person who is a 

19 third-party verifier, to establish and maintain records, for 

20 a period of not less than the crediting period under section 

21 734(c) plus 5 years, relating to— 

22 ‘‘(1) any offset project approval petition sub23 mitted to the appropriate officials under section 735; 

24 ‘‘(2) any reversals which occur with respect to 

25 an offset project; 


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1 ‘‘(3) any verification reports; and 

2 ‘‘(4) any other aspect of the offset project that 

3 the appropriate officials determines is appropriate.’’. 

4 Subtitle B—Disposition of 

5 Allowances 

6 SEC. 111. DISPOSITION OF ALLOWANCES FOR GLOBAL 

7 WARMING POLLUTION REDUCTION PRO8 GRAM. 

9 Title VII of the Clean Air Act (as amended by section 

10 141 of this division) is amended by adding at the end the 

11 following: 

12 ‘‘PART H—DISPOSITION OF ALLOWANCES 

13 ‘‘SEC. 771. ALLOCATION OF EMISSION ALLOWANCES. 

14 ‘‘(a) ALLOCATION.—The Administrator shall allocate 

15 emission allowances for the following purposes: 

16 ‘‘(1) The program for electricity consumers pur17 suant to section 772. 

18 ‘‘(2) The program for natural gas consumers 

19 pursuant to section 773. 

20 ‘‘(3) The program for home heating oil and pro21 pane consumers pursuant to section 774. 

22 ‘‘(4) The program for domestic fuel production, 

23 including petroleum refiners and small business re24 finers, under section 775. 


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1 ‘‘(5) The program to ensure real reductions in 

2 industrial emissions under part F. 

3 ‘‘(6) The program for commercial deployment 

4 of carbon capture and sequesration technologies 

5 under section 780. 

6 ‘‘(7) The program for early action recognition 

7 pursuant to section 782. 

8 ‘‘(8) The program for State and local invest9 ment in energy efficiency and renewable energy 

10 under section 202 of division B of the Clean Energy 

11 Jobs and American Power Act. 

12 ‘‘(9) The program for energy efficiency in build13 ing codes under section 163 of division A, and sec14 tion 203 of division B, of the Clean Energy Jobs 

15 and American Power Act. 

16 ‘‘(10) The program for retrofit for energy and 

17 environmental performance under section 164 of di18 vision A, and 204 of division B, of the Clean Energy 

19 Jobs and American Power Act. 

20 ‘‘(11) The program for Energy Innovation 

21 Hubs pursuant to section 205 of division B of the 

22 Clean Energy Jobs and American Power Act. 

23 ‘‘(12) The program for ARPA–E research pur24 suant to section 206 of division B of the Clean En25 ergy Jobs and American Power Act. 


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1 ‘‘(13) The International Clean Energy Deploy2 ment Program under section 323 of division A, and 

3 section 207 of division B, of the Clean Energy Jobs 

4 and American Power Act. 

5 ‘‘(14) The international climate change adapta6 tion and global security program under section 324 

7 of division A, and section 208 of division B, of the 

8 Clean Energy Jobs and American Power Act. 

9 ‘‘(b) AUCTIONS.—The Administrator shall auction, 

10 pursuant to section 778, emission allowances for the fol11 lowing purposes: 

12 ‘‘(1) The Market Stability Reserve Fund under 

13 section 726. 

14 ‘‘(2) The program for climate change consumer 

15 refunds and low- and moderate-income consumers 

16 pursuant to section 776, including— 

17 ‘‘(A) consumer rebates under section 

18 776(a); and 

19 ‘‘(B) energy refunds under section 776(b). 

20 ‘‘(3) The program for investment in clean vehi21 cle technology under section 201 of division B of the 

22 Clean Energy Jobs and American Power Act. 

23 ‘‘(4) The program for State and local invest24 ment in energy efficiency and renewable energy 


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1 under section 202 of division B of the Clean Energy 

2 Jobs and American Power Act. 

3 ‘‘(5) The program for energy efficiency and re4 newable energy worker training under section 209 of 

5 division B of the Clean Energy Jobs and American 

6 Power Act. 

7 ‘‘(6) The program for worker transition under 

8 part 2 of subtitle A of title III of division A, and 

9 section 210 of division B, of the Clean Energy Jobs 

10 and American Power Act. 

11 ‘‘(7) The State programs for greenhouse gas re12 duction and climate adaptation pursuant to section 

13 211 of division B of the Clean Energy Jobs and 

14 American Power Act. 

15 ‘‘(8) The program for public health and climate 

16 change under subpart B of part 1 of subtitle C of 

17 title III of division A, and section 212 of division B, 

18 of the Clean Energy Jobs and American Power Act. 

19 ‘‘(9) The program for climate change safe20 guards for natural resources conservation under sub21 part C of part 1 of subtitle C of title III of division 

22 A, and section 213 of division B, of the Clean En23 ergy Jobs and American Power Act. 


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1 ‘‘(10) Nuclear worker training under section 

2 132 of division A, and section 214 of division B, of 

3 the Clean Energy Jobs and American Power Act. 

4 ‘‘(11) The supplemental agriculture and for5 estry greenhouse gas reduction and renewable en6 ergy program under section 155 of division A, and 

7 section 215 of division B, of the Clean Energy Jobs 

8 and American Power Act. 

9 ‘‘(c) DEFICIT REDUCTION.— 

10 ‘‘(1) IN GENERAL.—The Administrator shall— 

11 ‘‘(A) auction, pursuant to section 778, 

12 emission allowances for deficit reduction in the 

13 amounts described in paragraph (2); and 

14 ‘‘(B) deposit those proceeds immediately 

15 on receipt in the Deficit Reduction Fund estab16 lished by section 783. 

17 ‘‘(2) AMOUNTS.—For vintage years 2012 

18 through 2050, 25.0 percent of emission allowances 

19 established for each year under section 721(a) shall 

20 be auctioned and the proceeds deposited pursuant to 

21 paragraph (1) to ensure that this title does not con22 tribute to the deficit for that particular calendar 

23 year. 

24 ‘‘(d) SUPPLEMENTAL REDUCTIONS.— 


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1 ‘‘(1) IN GENERAL.—The Administrator shall al2 locate allowances for each vintage year to achieve 

3 supplemental reductions pursuant to section 753. 

4 ‘‘(2) ADJUSTMENT.—The Administrator shall 

5 modify the allowances allocated under paragraph (1) 

6 as necessary to ensure the achievement of the an7 nual supplemental emissions reduction objective for 

8 2020 set forth in section 704. 

9 ‘‘SEC. 772. ELECTRICITY CONSUMERS. 

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

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

12 means— 

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

14 heat and power system that commences oper15 ation after the date of enactment of this sec16 tion; and 

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

18 from, at any time after the date of the enact19 ment of this section, upgrading, replacing, ex20 panding, or increasing the utilization of a com21 bined heat and power system that commenced 

22 operation on or before the date of enactment of 

23 this section. 

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

25 system savings’ means the increment of electric outVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00579 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 put of a combined heat and power system that is at2 tributable to the higher efficiency of the combined 

3 system (as compared to the efficiency of separate 

4 production of the electric and thermal outputs). 

5 ‘‘(3) COAL-FUELED UNIT.—The term ‘coal6 fueled unit’ means a utility unit that derives at least 

7 85 percent of its heat input from coal, petroleum 

8 coke, or any combination of those 2 fuels. 

9 ‘‘(4) COST-EFFECTIVE.—The term ‘cost-effec10 tive’, with respect to an energy efficiency program, 

11 means that the program meets the total resource 

12 cost test, which requires that the net present value 

13 of economic benefits over the life of the program, in14 cluding avoided supply and delivery costs and de15 ferred or avoided investments, is greater than the 

16 net present value of the economic costs over the life 

17 of the program, including program costs and incre18 mental costs borne by the energy consumer. 

19 ‘‘(5) ELECTRICITY LOCAL DISTRIBUTION COM20 PANY.—The term ‘electricity local distribution com21 pany’ means an electric utility— 

22 ‘‘(A) that has a legal, regulatory, or con23 tractual obligation to deliver electricity directly 

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1 ty sells the electricity as a commodity to those 

2 retail consumers; and 

3 ‘‘(B) the retail rates of which, except in 

4 the case of an electric cooperative, are regulated 

5 or set by— 

6 ‘‘(i) a State regulatory authority; 

7 ‘‘(ii) a State or political subdivision 

8 thereof (or an agency or instrumentality 

9 of, or corporation wholly owned by, either 

10 of the foregoing); or 

11 ‘‘(iii) an Indian tribe pursuant to trib12 al law. 

13 ‘‘(6) ELECTRICITY SAVINGS.—The term ‘elec14 tricity savings’ means reductions in electricity con15 sumption, relative to business-as-usual projections, 

16 achieved through measures implemented after the 

17 date of enactment of this section, limited to— 

18 ‘‘(A) customer facility savings of elec19 tricity, adjusted to reflect any associated in20 crease in fuel consumption at the facility; 

21 ‘‘(B) reductions in distribution system 

22 losses of electricity achieved by a retail elec23 tricity distributor, as compared to losses attrib24 utable to new or replacement distribution sys25 tem equipment of average efficiency; 


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1 ‘‘(C) CHP savings; and 

2 ‘‘(D) fuel cell savings. 

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

4 device that directly converts the chemical energy of 

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

7 in the device. 

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

9 savings’ means the electricity saved by a fuel cell 

10 that is installed after the date of enactment of this 

11 section, or by upgrading a fuel cell that commenced 

12 operation on or before the date of enactment of this 

13 section, as a result of the greater efficiency with 

14 which the fuel cell transforms fuel into electricity as 

15 compared with sources of electricity delivered 

16 through the grid, provided that— 

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

18 relating to efficiency and other operating char19 acteristics as the Federal Energy Regulatory 

20 Commission may promulgate by regulation; and 

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

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

25 generation by the fuel cell. 


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1 ‘‘(9) INDEPENDENT POWER PRODUCTION FA2 CILITY.—The term ‘independent power production 

3 facility’ means a facility— 

4 ‘‘(A) that is used for the generation of 

5 electric energy, at least 80 percent of which is 

6 sold at wholesale; and 

7 ‘‘(B) the sales of the output of which are 

8 not subject to retail rate regulation or setting 

9 of retail rates by— 

10 ‘‘(i) a State regulatory authority; 

11 ‘‘(ii) a State or political subdivision 

12 thereof (or an agency or instrumentality 

13 of, or corporation wholly owned by, either 

14 of the foregoing); 

15 ‘‘(iii) an electric cooperative; or 

16 ‘‘(iv) an Indian tribe pursuant to trib17 al law. 

18 ‘‘(10) LONG-TERM CONTRACT GENERATOR.— 

19 The term ‘long-term contract generator’ means a 

20 qualifying small power production facility, a quali21 fying cogeneration facility ), an independent power 

22 production facility, or a facility for the production of 

23 electric energy for sale to others that is owned and 

24 operated by an electric cooperative that is— 

25 ‘‘(A) a covered entity; and 


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1 ‘‘(B) as of the date of enactment of this 

2 title— 

3 ‘‘(i) a facility with 1 or more sales or 

4 tolling agreements executed before March 

5 1, 2007, that govern the facility’s elec6 tricity sales and provide for sales at a price 

7 (whether a fixed price or a price formula) 

8 for electricity that does not allow for recov9 ery of the costs of compliance with the lim10 itation on greenhouse gas emissions under 

11 this title, provided that such agreements 

12 are not between entities that are affiliates 

13 of one another; or 

14 ‘‘(ii) a facility consisting of 1 or more 

15 cogeneration units that makes useful ther16 mal energy available to an industrial or 

17 commercial process with 1 or more sales 

18 agreements executed before March 1, 

19 2007, that govern the facility’s useful ther20 mal energy sales and provide for sales at 

21 a price (whether a fixed price or price for22 mula) for useful thermal energy that does 

23 not allow for recovery of the costs of com24 pliance with the limitation on greenhouse 

25 gas emissions under this title, provided 


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1 that such agreements are not between enti2 ties that are affiliates of one another. 

3 ‘‘(11) MERCHANT COAL UNIT.—The term ‘mer4 chant coal unit’ means a coal-fueled unit that— 

5 ‘‘(A) is or is part of a covered entity; 

6 ‘‘(B) is not owned by a Federal, State, or 

7 regional agency or power authority; and 

8 ‘‘(C) generates electricity solely for sale to 

9 others, provided that all or a portion of such 

10 sales are made by a separate legal entity that— 

11 ‘‘(i) has a full or partial ownership or 

12 leasehold interest in the unit, as certified 

13 in accordance with such requirements as 

14 the Administrator shall prescribe; and 

15 ‘‘(ii) is not subject to retail rate regu16 lation or setting of retail rates by— 

17 ‘‘(I) a State regulatory authority; 

18 ‘‘(II) a State or political subdivi19 sion thereof (or an agency or instru20 mentality of, or corporation wholly 

21 owned by, either of the foregoing); 

22 ‘‘(III) an electric cooperative; or 

23 ‘‘(IV) an Indian tribe pursuant 

24 to tribal law. 


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1 ‘‘(12) MERCHANT COAL UNIT SALES.—The 

2 term ‘merchant coal unit sales’ means sales to oth3 ers of electricity generated by a merchant coal unit 

4 that are made by the owner or leaseholder described 

5 in paragraph (11)(C). 

6 ‘‘(13) NEW COAL-FUELED UNIT.—The term 

7 ‘new coal-fueled unit’ means a coal-fueled unit that 

8 commenced operation on or after January 1, 2009 

9 and before January 1, 2013. 

10 ‘‘(14) NEW MERCHANT COAL UNIT.—The term 

11 ‘new merchant coal unit’ means a merchant coal 

12 unit— 

13 ‘‘(A) that commenced operation on or after 

14 January 1, 2009 and before January 1, 2013; 

15 and 

16 ‘‘(B) the actual, on-site construction of 

17 which commenced prior to January 1, 2009. 

18 ‘‘(15) QUALIFIED HYDROPOWER.—The term 

19 ‘qualified hydropower’ means— 

20 ‘‘(A) energy produced from increased effi21 ciency achieved, or additions of capacity made, 

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

23 facility that was placed in service before that 

24 date and does not include additional energy 

25 generated as a result of operational changes not 


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1 directly associated with efficiency improvements 

2 or capacity additions; or 

3 ‘‘(B) energy produced from generating ca4 pacity added to a dam on or after January 1, 

5 1988, provided that the Federal Energy Regu6 latory Commission certifies that— 

7 ‘‘(i) the dam was placed in service be8 fore the date of the enactment of this sec9 tion and was operated for flood control, 

10 navigation, or water supply purposes and 

11 was not producing hydroelectric power 

12 prior to the addition of such capacity; 

13 ‘‘(ii) the hydroelectric project installed 

14 on the dam is licensed (or is exempt from 

15 licensing) by the Federal Energy Regu16 latory Commission and is in compliance 

17 with the terms and conditions of the li18 cense or exemption, and with other appli19 cable legal requirements for the protection 

20 of environmental quality, including applica21 ble fish passage requirements; and 

22 ‘‘(iii) the hydroelectric project in23 stalled on the dam is operated so that the 

24 water surface elevation at any given loca25 tion and time that would have occurred in 


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1 the absence of the hydroelectric project is 

2 maintained, subject to any license or ex3 emption requirements that require changes 

4 in water surface elevation for the purpose 

5 of improving the environmental quality of 

6 the affected waterway. 

7 ‘‘(16) QUALIFYING SMALL POWER PRODUCTION

8 FACILITY; QUALIFYING COGENERATION FACILITY.— 

9 The terms ‘qualifying small power production facil10 ity’ and ‘qualifying cogeneration facility’ have the 

11 meanings given those terms in section 3(17)(C) and 

12 3(18)(B) of the Federal Power Act (16 U.S.C. 

13 796(17)(C) and 796(18)(B)). 

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

15 term ‘renewable energy resource’ means each of the 

16 following: 

17 ‘‘(A) Wind energy. 

18 ‘‘(B) Solar energy. 

19 ‘‘(C) Geothermal energy. 

20 ‘‘(D) Renewable biomass. 

21 ‘‘(E) Biogas derived exclusively from re22 newable biomass. 

23 ‘‘(F) Biofuels derived exclusively from re24 newable biomass. 

25 ‘‘(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 ‘‘(18) SMALL LDC.—The term ‘small LDC’ 

6 means, for any given year, an electricity local dis7 tribution company that delivered less than 4,000,000 

8 megawatt hours of electric energy directly to retail 

9 consumers in the preceding year. 

10 ‘‘(19) STATE REGULATORY AUTHORITY.—The 

11 term ‘State regulatory authority’ has the meaning 

12 given that term in section 3(17) of the Public Utility 

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

14 2602(17)). 

15 ‘‘(20) USEFUL THERMAL ENERGY.—The term 

16 ‘useful thermal energy’ has the meaning given that 

17 term in section 371(7) of the Energy Policy and 

18 Conservation Act (42 U.S.C. 6341(7)). 

19 ‘‘(b) ELECTRICITY LOCAL DISTRIBUTION COMPA20 NIES.— 

21 ‘‘(1) DISTRIBUTION OF ALLOWANCES.—The 

22 Administrator shall distribute to electricity local dis23 tribution companies for the benefit of retail rate24 payers the quantity of emission allowances allocated 

25 for the following vintage year pursuant to section 


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1 771(a)(1). Notwithstanding the preceding sentence, 

2 the Administrator shall withhold from distribution 

3 under this subsection a quantity of emission allow4 ances equal to the lesser of 14.3 percent of the 

5 quantity of emission allowances allocated under sec6 tion 771(a)(1) for the relevant vintage year, or 105 

7 percent of the emission allowances for the relevant 

8 vintage year that the Administrator anticipates will 

9 be distributed to merchant coal units and to long10 term contract generators, respectively, under sub11 sections (c) and (d). If not required by subsections 

12 (c) and (d) to distribute all of these reserved allow13 ances, the Administrator shall distribute any remain14 ing emission allowances to electricity local distribu15 tion companies in accordance with this subsection. 

16 ‘‘(2) DISTRIBUTION BASED ON EMISSIONS.— 

17 ‘‘(A) IN GENERAL.—For each vintage year, 

18 50 percent of the emission allowances available 

19 for distribution under paragraph (1), after re20 serving allowances for distribution under sub21 sections (c) and (d), shall be distributed by the 

22 Administrator among individual electricity local 

23 distribution companies ratably based on the an24 nual average carbon dioxide emissions attrib25 utable to generation of electricity delivered at 


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1 retail by each such company during the base 

2 period determined under subparagraph (B). 

3 ‘‘(B) BASE PERIOD.— 

4 ‘‘(i) VINTAGE YEARS 2012 AND 2013.— 

5 For vintage years 2012 and 2013, an elec6 tricity local distribution company’s base 

7 period shall be— 

8 ‘‘(I) calendar years 2006 through 

9 2008; or 

10 ‘‘(II) any 3 consecutive calendar 

11 years between 1999 and 2008, inclu12 sive, that such company selects, pro13 vided that the company timely informs 

14 the Administrator of such selection. 

15 ‘‘(ii) VINTAGE YEARS 2014 AND

16 THEREAFTER.—For vintage years 2014 

17 and thereafter, the base period shall be— 

18 ‘‘(I) the base period selected 

19 under clause (i); or 

20 ‘‘(II) calendar year 2012, in the 

21 case of an electricity local distribution 

22 company that owns, co-owns, or pur23 chases through a power purchase 

24 agreement (whether directly or 

25 through a cooperative arrangement) a 


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1 substantial portion of the electricity 

2 generated by a new coal-fueled unit, 

3 provided that such company timely in4 forms the Administrator of its election 

5 to use 2012 as its base period. 

6 ‘‘(C) DETERMINATION OF EMISSIONS.— 

7 ‘‘(i) DETERMINATION FOR 1999– 

8 2008.—As part of the regulations promul9 gated pursuant to subsection (g), the Ad10 ministrator, after consultation with the 

11 Energy Information Administration, shall 

12 determine the average amount of carbon 

13 dioxide emissions attributable to genera14 tion of electricity delivered at retail by 

15 each electricity local distribution company 

16 for each of the years 1999 through 2008, 

17 taking into account entities’ electricity gen18 eration, electricity purchases, and elec19 tricity sales. In the case of any electricity 

20 local distribution company that owns, co21 owns, or purchases through a power pur22 chase agreement (whether directly or 

23 through a cooperative arrangement) a sub24 stantial portion of the electricity generated 

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1 eration after January 1, 2006, and before 

2 December 31, 2008, the Administrator 

3 shall adjust the emissions attributable to 

4 such company’s retail deliveries in calendar 

5 years 2006 through 2008 to reflect the 

6 emissions that would have occurred if the 

7 relevant unit were in operation during the 

8 entirety of such 3-year period. 

9 ‘‘(ii) ADJUSTMENTS FOR NEW COAL10 FUELED UNITS.— 

11 ‘‘(I) VINTAGE YEARS 2012 AND

12 2013.—For purposes of emission al13 lowance distributions for vintage years 

14 2012 and 2013, in the case of any 

15 electricity local distribution company 

16 that owns, co-owns, or purchases 

17 through a power purchase agreement 

18 (whether directly or through a cooper19 ative arrangement) a substantial por20 tion of the electricity generated by, a 

21 new coal-fueled unit, the Adminis22 trator shall adjust the emissions at23 tributable to such company’s retail de24 liveries in the applicable base period 

25 to reflect the emissions that would 


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1 have occurred if the new coal-fueled 

2 unit were in operation during such pe3 riod. 

4 ‘‘(II) VINTAGE YEAR 2014 AND

5 THEREAFTER.—Not later than nec6 essary for use in making emission al7 lowance distributions under this sub8 section for vintage year 2014, the Ad9 ministrator shall, for any electricity 

10 local distribution company that owns, 

11 co-owns, or purchases through a 

12 power purchase agreement (whether 

13 directly or through a cooperative ar14 rangement) a substantial portion of 

15 the electricity generated by a new 

16 coal-fueled unit and has selected cal17 endar year 2012 as its base period 

18 pursuant to subparagraph (B)(ii)(II), 

19 determine the amount of carbon diox20 ide emissions attributable to genera21 tion of electricity delivered at retail by 

22 such company in calendar year 2012. 

23 If the relevant new coal-fueled unit 

24 was not yet operational by January 1, 

25 2012, the Administrator shall adjust 


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1 such determination to reflect the 

2 emissions that would have occurred if 

3 such unit were in operation for all of 

4 calendar year 2012. 

5 ‘‘(iii) REQUIREMENTS.—Determina6 tions under this paragraph shall be as pre7 cise as practicable, taking into account the 

8 nature of data currently available and the 

9 nature of markets and regulation in effect 

10 in various regions of the country. The fol11 lowing requirements shall apply to such de12 terminations: 

13 ‘‘(I) The Administrator shall de14 termine the amount of fossil fuel15 based electricity delivered at retail by 

16 each electricity local distribution com17 pany, and shall use appropriate emis18 sion factors to calculate carbon diox19 ide emissions associated with the gen20 eration of such electricity. 

21 ‘‘(II) Where it is not practical to 

22 determine the precise fuel mix for the 

23 electricity delivered at retail by an in24 dividual electricity local distribution 

25 company, the Administrator may use 


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1 the best available data, including aver2 age data on a regional basis with ref3 erence to Regional Transmission Or4 ganizations or regional entities (as 

5 that term is defined in section 

6 215(a)(7) of the Federal Power Act 

7 (16 U.S.C. 824o(a)(7)), to estimate 

8 fuel mix and emissions. Different 

9 methodologies may be applied in dif10 ferent regions if appropriate to obtain 

11 the most accurate estimate. 

12 ‘‘(3) DISTRIBUTION BASED ON DELIVERIES.— 

13 ‘‘(A) INITIAL FORMULA.—Except as pro14 vided in subparagraph (B), for each vintage 

15 year, the Administrator shall distribute 50 per16 cent of the emission allowances available for 

17 distribution under paragraph (1), after reserv18 ing allowances for distribution under sub19 sections (c) and (d), among individual elec20 tricity local distribution companies ratably 

21 based on each electricity local distribution com22 pany’s annual average retail electricity deliv23 eries for calendar years 2006 through 2008, un24 less the owner or operator of the company se25 lects 3 other consecutive years between 1999 


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1 and 2008, inclusive, and timely notifies the Ad2 ministrator of its selection. 

3 ‘‘(B) UPDATING.—Prior to distributing 

4 2015 vintage year emission allowances under 

5 this paragraph and at 3-year intervals there6 after, the Administrator shall update the dis7 tribution formula under this paragraph to re8 flect changes in each electricity local distribu9 tion company’s service territory since the most 

10 recent formula was established. For each suc11 cessive 3-year period, the Administrator shall 

12 distribute allowances ratably among individual 

13 electricity local distribution companies based on 

14 the product of— 

15 ‘‘(i) each electricity local distribution 

16 company’s average annual deliveries per 

17 customer during calendar years 2006 

18 through 2008, or during the 3 alternative 

19 consecutive years selected by such company 

20 under subparagraph (A); and 

21 ‘‘(ii) the number of customers of such 

22 electricity local distribution company in the 

23 most recent year in which the formula is 

24 updated under this subparagraph. 


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1 ‘‘(4) PROHIBITION AGAINST EXCESS DISTRIBU2 TIONS.—The regulations promulgated under sub3 section (g) shall ensure that, notwithstanding para4 graphs (2) and (3), no electricity local distribution 

5 company shall receive a greater quantity of allow6 ances under this subsection than is necessary to off7 set any increased electricity costs to such company’s 

8 retail ratepayers, including increased costs attrib9 utable to purchased power costs, due to enactment 

10 of this title. Any emission allowances withheld from 

11 distribution to an electricity local distribution com12 pany pursuant to this paragraph shall be distributed 

13 among all remaining electricity local distribution 

14 companies ratably based on emissions pursuant to 

15 paragraph (2). 

16 ‘‘(5) USE OF ALLOWANCES.— 

17 ‘‘(A) RATEPAYER BENEFIT.—Emission al18 lowances distributed to an electricity local dis19 tribution company under this subsection shall 

20 be used exclusively for the benefit of retail rate21 payers of such electricity local distribution com22 pany and may not be used to support electricity 

23 sales or deliveries to entities or persons other 

24 than such ratepayers. 


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1 ‘‘(B) RATEPAYER CLASSES.—In using 

2 emission allowances distributed under this sub3 section for the benefit of ratepayers, an elec4 tricity local distribution company shall ensure 

5 that ratepayer benefits are distributed— 

6 ‘‘(i) among ratepayer classes ratably 

7 based on electricity deliveries to each class; 

8 and 

9 ‘‘(ii) equitably among individual rate10 payers within each ratepayer class, includ11 ing entities that receive emission allow12 ances pursuant to part F. 

13 ‘‘(C) LIMITATION.—In general, an elec14 tricity local distribution company shall not use 

15 the value of emission allowances distributed 

16 under this subsection to provide to any rate17 payer a rebate that is based solely on the quan18 tity of electricity delivered to such ratepayer. 

19 To the extent an electricity local distribution 

20 company uses the value of emission allowances 

21 distributed under this subsection to provide re22 bates, it shall, to the maximum extent prac23 ticable, provide such rebates with regard to the 

24 fixed portion of ratepayers’ bills or as a fixed 

25 credit or rebate on electricity bills. 


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1 ‘‘(D) RESIDENTIAL AND INDUSTRIAL

2 RATEPAYERS.—Notwithstanding subparagraph 

3 (C), if compliance with the requirements of this 

4 title results (or would otherwise result) in an 

5 increase in electricity costs for residential or in6 dustrial retail ratepayers of any given electricity 

7 local distribution company (including entities 

8 that receive emission allowances pursuant to 

9 part F), such electricity local distribution com10 pany— 

11 ‘‘(i) shall pass through to residential 

12 retail ratepayers as a class their ratable 

13 share (based on deliveries to each rate14 payer class) of the value of the emission al15 lowances that reduce electricity cost im16 pacts on such ratepayers; and 

17 ‘‘(ii) shall pass through to industrial 

18 ratepayers as a class their ratable share 

19 (based on deliveries to each ratepayer 

20 class) of the value of the emission allow21 ances that reduce electricity cost impacts 

22 on such ratepayers. The electricity local 

23 distribution company may do so based on 

24 the quantity of electricity delivered to indi25 vidual industrial retail ratepayers. 


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1 ‘‘(E) GUIDELINES.—As part of the regula2 tions promulgated under subsection (g), the Ad3 ministrator shall, after consultation with State 

4 regulatory authorities, prescribe guidelines for 

5 the implementation of the requirements of this 

6 paragraph. Such guidelines shall include— 

7 ‘‘(i) requirements to ensure that resi8 dential and industrial retail ratepayers (in9 cluding entities that receive emission allow10 ances under part F) receive their ratable 

11 share of the value of the allowances dis12 tributed to each electricity local distribu13 tion company pursuant to this subsection; 

14 and 

15 ‘‘(ii) requirements for measurement, 

16 verification, reporting, and approval of 

17 methods used to assure the use of allow18 ance values to benefit retail ratepayers. 

19 ‘‘(6) REGULATORY PROCEEDINGS.— 

20 ‘‘(A) REQUIREMENT.—No electricity local 

21 distribution company shall be eligible to receive 

22 emission allowances under this subsection or 

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1 late or set retail electricity rates of an elec2 tricity local distribution company not regulated 

3 by a State regulatory authority, has— 

4 ‘‘(i) after public notice and an oppor5 tunity for comment, promulgated a regula6 tion or completed a rate proceeding (or the 

7 equivalent, in the case of a ratemaking en8 tity other than a State regulatory author9 ity) that provides for the full implementa10 tion of the requirements of paragraph (5) 

11 of this subsection and the requirements of 

12 subsection (e); and 

13 ‘‘(ii) made available to the Adminis14 trator and the public a report describing, 

15 in adequate detail, the manner in which 

16 the requirements of paragraph (5) and the 

17 requirements of subsection (e) will be im18 plemented. 

19 ‘‘(B) UPDATING.—The Administrator shall 

20 require, as a condition of continued receipt of 

21 emission allowances under this subsection by an 

22 electricity local distribution company, that a 

23 new regulation be promulgated or rate pro24 ceeding be completed, after public notice and an 

25 opportunity for comment, and a new report be 


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1 made available to the Administrator and the 

2 public, pursuant to subparagraph (A), not less 

3 frequently than every 5 years. 

4 ‘‘(7) PLANS AND REPORTING.— 

5 ‘‘(A) REGULATIONS.—As part of the regu6 lations promulgated under subsection (g), the 

7 Administrator shall prescribe requirements gov8 erning plans and reports to be submitted in ac9 cordance with this paragraph. 

10 ‘‘(B) PLANS.—Not later than April 30 of 

11 2011 and every 5 years thereafter through 

12 2026, each electricity local distribution com13 pany shall submit to the Administrator a plan, 

14 approved by the State regulatory authority or 

15 other entity charged with regulating tor setting 

16 the retail rates of such company, describing 

17 such company’s plans for the disposition of the 

18 value of emission allowances to be received pur19 suant to this subsection and subsection (e), in 

20 accordance with the requirements of this sub21 section and subsection (e). Such plan shall in22 clude a description of the manner in which the 

23 company will provide to industrial retail rate24 payers (including entities that receive emission 


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1 allowances under part F) their ratable share of 

2 the value of such allowances. 

3 ‘‘(C) REPORTS.—Not later than June 30, 

4 2013, and each calendar year thereafter 

5 through 2031, each electricity local distribution 

6 company shall submit a report to the Adminis7 trator, and to the relevant State regulatory au8 thority or other entity charged with regulating 

9 or setting the retail electricity rates of such 

10 company, describing the disposition of the value 

11 of any emission allowances received by such 

12 company in the prior calendar year pursuant to 

13 this subsection and subsection (e), including— 

14 ‘‘(i) a description of sales, transfer, 

15 exchange, or use by the company for com16 pliance with obligations under this title, of 

17 any such emission allowances; 

18 ‘‘(ii) the monetary value received by 

19 the company, whether in money or in some 

20 other form, from the sale, transfer, or ex21 change of any such emission allowances; 

22 ‘‘(iii) the manner in which the com23 pany’s disposition of any such emission al24 lowances complies with the requirements of 

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1 cluding each of the requirements of para2 graph (5) of this subsection, including the 

3 requirement that industrial retail rate4 payers (including entities that receive 

5 emission allowances under part F) receive 

6 their ratable share of the value of such al7 lowances; and 

8 ‘‘(iv) such other information as the 

9 Administrator may require pursuant to 

10 subparagraph (A). 

11 ‘‘(D) PUBLICATION.—The Administrator 

12 shall make available to the public all plans and 

13 reports submitted under this subsection, includ14 ing by publishing such plans and reports on the 

15 Internet. 

16 ‘‘(8) ADMINISTRATOR AUDIT REPORTS.— 

17 ‘‘(A) IN GENERAL.—Each year, the Ad18 ministrator shall audit a representative sample 

19 of electricity local distribution companies to en20 sure that emission allowances distributed under 

21 this subsection have been used exclusively for 

22 the benefit of retail ratepayers and that such 

23 companies are complying with the requirements 

24 of this subsection and of subsection (e), includ25 ing the requirement that residential and indusVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00605 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 trial retail ratepayers (including entities that 

2 receive emission allowances under part F) re3 ceive their ratable share of the value of such al4 lowances. The Administrator shall assess the 

5 degree to which electric local distribution com6 panies have maintained a marginal electric 

7 price signal while protecting consumers on total 

8 cost using the value of emissions allowances. In 

9 selecting companies for audit, the Adminis10 trator shall take into account any credible evi11 dence of noncompliance with such requirements. 

12 The Administrator shall make available to the 

13 public a report describing the results of each 

14 such audit, including by publishing such report 

15 on the Internet. 

16 ‘‘(B) GAO AUDIT REPORT.—Not later 

17 than April 30, 2015, and every 3 years there18 after through 2026, the Comptroller General of 

19 the United States, incorporating results from 

20 the Administrators’ audit report and other rel21 evant information including distribution com22 pany reports, shall conduct an in-depth evalua23 tion and make available to the public a report 

24 on the investments made pursuant to paragraph 

25 (5). Said report shall be made available to the 


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1 State regulatory authority, or the entity with 

2 authority to regulate or set retail electricity 

3 rates in the case of an electricity distribution 

4 company that is not regulated by a State regu5 latory authority, and shall include a description 

6 of how the distribution companies in the audit 

7 meet or fail to meet the requirement of para8 graph (5), including for investments made in 

9 cost-effective end-use energy efficiency pro10 grams, the lifetime and annual energy saving 

11 benefits, and capacity benefits of said pro12 grams. 

13 ‘‘(C) ADMINISTRATOR COST CONTAINMENT

14 REPORT.—Not later than April 30, 2015 and 

15 every 3 years thereafter through 2026, the Ad16 ministrator shall transmit a report to Congress 

17 containing an evaluation of the disposition of 

18 the value of emission allowances received pursu19 ant to this subsection and subsection (e) and 

20 recommendations of ways to more effectively di21 rect the value of allowances to reduce costs for 

22 consumers, contain the overall costs of the 

23 greenhouse gas emissions reduction program, 

24 and meet the pollution reduction targets of the 

25 Act. The Administrator shall make available to 


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1 the public such report, including by publishing 

2 such report on the Internet. 

3 ‘‘(9) ENFORCEMENT.—A violation of any re4 quirement of this subsection or of subsection (e), ir5 respective of approval by a State regulatory author6 ity, shall be a violation of this Act. Each emission 

7 allowance the value of which is used in violation of 

8 the requirements of this subsection or of subsection 

9 (e) shall be a separate violation. 

10 ‘‘(c) MERCHANT COAL UNITS.— 

11 ‘‘(1) QUALIFYING EMISSIONS.—The qualifying 

12 emissions for a merchant coal unit for a given cal13 endar year shall be the product of the number of 

14 megawatt hours of merchant coal unit sales gen15 erated by such unit in such calendar year and the 

16 average carbon dioxide emissions per megawatt hour 

17 generated by such unit during the base period under 

18 paragraph (2), provided that the number of mega19 watt hours in a given calendar year for purposes of 

20 such calculation shall be reduced in proportion to 

21 the portion of such unit’s carbon dioxide emissions 

22 that are either— 

23 ‘‘(A) captured and sequestered in such cal24 endar year; or 


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1 ‘‘(B) attributable to the combustion or gas2 ification of biomass, to the extent that the 

3 owner or operator of the unit is not required to 

4 hold emission allowances for such emissions. 

5 ‘‘(2) BASE PERIOD.—For purposes of this sub6 section, the base period for a merchant coal unit 

7 shall be— 

8 ‘‘(A) calendar years 2006 through 2008; or 

9 ‘‘(B) in the case of a new merchant coal 

10 unit— 

11 ‘‘(i) the first full calendar year of op12 eration of such unit, if such unit com13 mences operation before January 1, 2012; 

14 ‘‘(ii) calendar year 2012, if such unit 

15 commences operation on or after January 

16 1, 2012, and before October 1, 2012; or 

17 ‘‘(iii) calendar year 2013, if such unit 

18 commences operation on or after October 

19 1, 2012, and before January 1, 2013. 

20 ‘‘(3) PHASE-DOWN SCHEDULE.—The Adminis21 trator shall identify an annual phase-down factor, 

22 applicable to distributions to merchant coal units for 

23 each of vintage years 2012 through 2029, that cor24 responds to the overall decline in the amount of 

25 emission allowances allocated to the electricity sector 


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1 in such years pursuant to section 771(a)(1). Such 

2 factor shall— 

3 ‘‘(A) for vintage year 2012, be equal to 

4 1.0; 

5 ‘‘(B) for each of vintage years 2013 

6 through 2029, correspond to the quotient of— 

7 ‘‘(i) the quantity of emission allow8 ances allocated under section 771(a)(1) for 

9 such vintage year; divided by 

10 ‘‘(ii) the quantity of emission allow11 ances allocated under section 771(a)(1) for 

12 vintage year 2012. 

13 ‘‘(4) DISTRIBUTION OF EMISSION ALLOW14 ANCES.—Not later than March 1 of 2013 and each 

15 calendar year through 2030, the Administrator shall 

16 distribute emission allowances of the preceding vin17 tage year to the owner or operator of each merchant 

18 coal unit described in subsection (a)(11)(C) in an 

19 amount equal to the product of— 

20 ‘‘(A) 0.5; 

21 ‘‘(B) the qualifying emissions for such 

22 merchant coal unit for the preceding year, as 

23 determined under paragraph (1); and 


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1 ‘‘(C) the phase-down factor for the pre2 ceding calendar year, as identified under para3 graph (3). 

4 ‘‘(5) ADJUSTMENT.— 

5 ‘‘(A) STUDY.—Not later than July 1, 

6 2014, the Administrator, in consultation with 

7 the Federal Energy Regulatory Commission, 

8 shall complete a study to determine whether the 

9 allocation formula under paragraph (3) is re10 sulting in, or is likely to result in, windfall prof11 its to merchant coal generators or substantially 

12 disparate treatment of merchant coal genera13 tors operating in different markets or regions. 

14 ‘‘(B) REGULATION.—If the Administrator, 

15 in consultation with the Federal Energy Regu16 latory Commission, makes an affirmative find17 ing of windfall profits or disparate treatment 

18 under subparagraph (A), the Administrator 

19 shall, not later than 18 months after the com20 pletion of the study described in subparagraph 

21 (A), promulgate regulations providing for the 

22 adjustment of the allocation formula under 

23 paragraph (3) to mitigate, to the extent prac24 ticable, such windfall profits, if any, and such 

25 disparate treatment, if any. 


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1 ‘‘(6) LIMITATION ON ALLOWANCES.—Notwith2 standing paragraph (4) or (5), for each vintage year 

3 the Administrator shall distribute under this sub4 section no more than 10 percent of the total quan5 tity of emission allowances available for such vintage 

6 year for distribution to the electricity sector under 

7 section 771(a)(1). If the quantity of emission allow8 ances that would otherwise be distributed pursuant 

9 to paragraph (4) or (5) for any vintage year would 

10 exceed such limit, the Administrator shall distribute 

11 10 percent of the total emission allowances available 

12 for distribution under section 771(a)(1) for such vin13 tage year ratably among merchant coal generators 

14 based on the applicable formula under paragraph (4) 

15 or (5). 

16 ‘‘(7) ELIGIBILITY.—The owner or operator of a 

17 merchant coal unit shall not be eligible to receive 

18 emission allowances under this subsection for any 

19 vintage year for which such owner or operator has 

20 elected to receive emission allowances for the same 

21 unit under subsection (d). 

22 ‘‘(d) LONG-TERM CONTRACT GENERATORS.— 

23 ‘‘(1) DISTRIBUTION.—Not later than March 1, 

24 2013, and each calendar year through 2030, the Ad25 ministrator shall distribute to the owner or operator 


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1 of each long-term contract generator a quantity of 

2 emission allowances of the preceding vintage year 

3 that is equal to the sum of— 

4 ‘‘(A) the number of tons of carbon dioxide 

5 emitted as a result of a qualifying electricity 

6 sales agreement referred to in subsection 

7 (a)(10)(B)(i); and 

8 ‘‘(B) the incremental number of tons of 

9 carbon dioxide emitted solely as a result of a 

10 qualifying thermal sales agreement referred to 

11 in subsection (a)(10)(B)(ii), provided that in no 

12 event shall the Administrator distribute more 

13 than 1 emission allowance for the same ton of 

14 emissions. 

15 ‘‘(2) LIMITATION ON ALLOWANCES.—Notwith16 standing paragraph (1), for each vintage year the 

17 Administrator shall distribute under this subsection 

18 no more than 4.3 percent of the total quantity of 

19 emission allowances available for such vintage year 

20 for distribution to the electricity sector under section 

21 771(a)(1). If the quantity of emission allowances 

22 that would otherwise be distributed pursuant to 

23 paragraph (1) for any vintage year would exceed 

24 such limit, the Administrator shall distribute 4.3 

25 percent of the total emission allowances available for 


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1 distribution under section 771(a)(1) for such vintage 

2 year ratably among long-term contract generators 

3 based on paragraph (1). 

4 ‘‘(3) ELIGIBILITY.— 

5 ‘‘(A) FACILITY ELIGIBILITY.—The owner 

6 or operator of a facility shall cease to be eligible 

7 to receive emission allowances under this sub8 section upon the earliest date on which the fa9 cility no longer meets each and every element of 

10 the definition of a long-term contract generator 

11 under subsection (a)(10). 

12 ‘‘(B) CONTRACT ELIGIBILITY.—The owner 

13 or operator of a facility shall cease to be eligible 

14 to receive emission allowances under this sub15 section based on an electricity or thermal sales 

16 agreement referred to in subsection (a)(10)(B) 

17 upon the earliest date that such agreement— 

18 ‘‘(i) expires; 

19 ‘‘(ii) is terminated; or 

20 ‘‘(iii) is amended in any way that 

21 changes the location of the facility, the 

22 price (whether a fixed price or price for23 mula) for electricity or thermal energy sold 

24 under such agreement, the quantity of 

25 electricity or thermal energy sold under the 


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1 agreement, or the expiration or termi2 nation date of the agreement. 

3 ‘‘(4) DEMONSTRATION OF ELIGIBILITY.—To be 

4 eligible to receive allowance distributions under this 

5 subsection, the owner or operator of a long-term 

6 contract generator shall submit each of the following 

7 in writing to the Administrator within 180 days 

8 after the date of enactment of this title, and not 

9 later than September 30 of each vintage year for 

10 which such generator wishes to receive emission al11 lowances: 

12 ‘‘(A) A certificate of representation de13 scribed in section 700(15). 

14 ‘‘(B) An identification of each owner and 

15 each operator of the facility. 

16 ‘‘(C) An identification of the units at the 

17 facility and the location of the facility. 

18 ‘‘(D) A written certification by the des19 ignated representative that the facility meets all 

20 the requirements of the definition of a long21 term contract generator. 

22 ‘‘(E) The expiration date of each quali23 fying electricity or thermal sales agreement re24 ferred to in subsection (a)(10)(B). 


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1 ‘‘(F) A copy of each qualifying electricity 

2 or thermal sales agreement referred to in sub3 section (a)(10)(B). 

4 ‘‘(5) NOTIFICATION.—Not later than 30 days 

5 after, in accordance with paragraph (3), a facility or 

6 an agreement ceases to meet the eligibility require7 ments for distribution of emission allowances pursu8 ant to this subsection, the designated representative 

9 of such facility shall notify the Administrator in 

10 writing when, and on what basis, such facility or 

11 agreement ceased to meet such requirements. 

12 ‘‘(e) SMALL LDCs.— 

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

14 in accordance with this subsection, distribute emis15 sion allowances allocated pursuant to section 

16 771(a)(1) for the following vintage year. Such allow17 ances shall be distributed ratably among small 

18 LDCs based on historic emissions in accordance with 

19 the same measure of such emissions applied to each 

20 such small LDC for the relevant vintage year under 

21 subsection (b)(2) of this section. 

22 ‘‘(2) USES.—A small LDC receiving allowances 

23 under this section shall use such allowances exclu24 sively for the following purposes: 


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1 ‘‘(A) Cost-effective programs to achieve 

2 electricity savings, provided that such savings 

3 shall not be transferred or used for compliance 

4 with any renewable electricity standard estab5 lished under the Public Utility Regulatory Poli6 cies Act of 1978 (16 U.S.C. 2601 et seq.). 

7 ‘‘(B) Deployment of technologies to gen8 erate electricity from renewable energy re9 sources, provided that any Federal renewable 

10 electricity credits issued based on generation 

11 supported under this section shall be submitted 

12 to the Federal Energy Regulatory Commission 

13 for voluntary retirement and shall not be used 

14 for compliance with the Public Utility Regu15 latory Policies Act of 1978 (16 U.S.C. 2601 et 

16 seq.). 

17 ‘‘(C) Assistance programs to reduce elec18 tricity costs for low-income residential rate19 payers of such small LDC, provided that such 

20 assistance is made available equitably to all res21 idential ratepayers below a certain income level, 

22 which shall not be higher than 200 percent of 

23 the poverty line (as that term is defined in sec24 tion 673(2) of the Community Services Block 

25 Grant Act (42 U.S.C. 9902(2)). 


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1 ‘‘(3) REQUIREMENTS.—As part of the regula2 tions promulgated under subsection (g), the Admin3 istrator shall prescribe— 

4 ‘‘(A) after consultation with the Federal 

5 Energy Regulatory Commission, requirements 

6 to ensure that programs and projects under 

7 paragraph (2)(A) and (B) are consistent with 

8 the standards established by, and effectively 

9 supplement electricity savings and generation of 

10 electricity from renewable energy resources 

11 achieved by, the Combined Efficiency and Re12 newable Electricity Standard established by 

13 law; 

14 ‘‘(B) eligibility criteria and guidelines for 

15 consumer assistance programs for low-income 

16 residential ratepayers under paragraph (2)(C); 

17 and 

18 ‘‘(C) such other requirements as the Ad19 ministrator determines appropriate to ensure 

20 compliance with the requirements of this sub21 section. 

22 ‘‘(4) REPORTING.—Reports submitted under 

23 subsection (b)(7) shall include, in accordance with 

24 such requirements as the Administrator may pre25 scribe— 


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1 ‘‘(A) a description of any facilities de2 ployed under paragraph (2)(A), the quantity of 

3 resulting electricity generation from renewable 

4 energy resources; 

5 ‘‘(B) an assessment demonstrating the 

6 cost-effectiveness of, and electricity savings 

7 achieved by, programs supported under para8 graph (2)(B); and 

9 ‘‘(C) a description of assistance provided to 

10 low-income retail ratepayers under paragraph 

11 (2)(C). 

12 ‘‘(f) CERTAIN COGENERATION FACILITIES.— 

13 ‘‘(1) ELIGIBLE COGENERATION FACILITIES.— 

14 For purposes of this subsection, an ‘eligible cogen15 eration facility’ is a facility that— 

16 ‘‘(A) is a qualifying co-generation facility 

17 (as that term is defined in section 3(18)(B) of 

18 the Federal Power Act (16 U.S.C. 796(18)(B)); 

19 ‘‘(B) derives 80 percent or more of its heat 

20 input from coal, petroleum coke, or any com21 bination of these 2 fuels; 

22 ‘‘(C) has a nameplate capacity of 100 

23 megawatts or greater; 

24 ‘‘(D) was in operation as of January 1, 

25 2009, and remains in operation as of the date 


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1 of any distribution of emission allowances under 

2 this subsection; 

3 ‘‘(E) in calendar years 2006 through 2008 

4 sold, and as of the date of any distribution of 

5 emission allowances under this section sells, 

6 steam or electricity directly and solely to mul7 tiple, separately owned industrial or commercial 

8 facilities co-located at the same site with the co9 generation facility; and 

10 ‘‘(F) is not eligible to receive allowances 

11 under any other subsection of this section or 

12 under part F of this title. 

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

14 distribute the emission allowances allocated pursuant 

15 to section 771(a)(1) to owners or operators of eligi16 ble cogeneration facilities ratably based on the car17 bon dioxide emissions of each such facility in cal18 endar years 2006 through 2008. The Adminis19 trator— 

20 ‘‘(A) shall not, in any year, distribute 

21 emission allowances under this subsection to the 

22 owner or operator of any eligible cogeneration 

23 facility in excess of the amount necessary to 

24 offset such facility’s cost of compliance with the 

25 requirements of this title in that year; and 


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1 ‘‘(B) may distribute such allowances over a 

2 period of years if annual distributions under 

3 this subsection would otherwise exceed the limi4 tation in subparagraph (A), provided that in no 

5 event shall distributions be made under this 

6 subsection after calendar year 2025. 

7 ‘‘(3) REQUIREMENTS.—The Administrator 

8 shall, by regulation, establish requirements to ensure 

9 that the value of any emission allowances distributed 

10 pursuant to this subsection are passed through, on 

11 an equitable basis, to the facilities to which the rel12 evant cogeneration facility provides electricity or 

13 steam deliveries, including any facility owned or op14 erated by the owner or operator of the cogeneration 

15 facility. 

16 ‘‘(g) REGULATIONS.—Not later than 2 years after 

17 the date of enactment of this title, the Administrator, in 

18 consultation with the Federal Energy Regulatory Commis19 sion, shall promulgate regulations to implement the re20 quirements of this section. 

21 ‘‘SEC. 773. NATURAL GAS CONSUMERS. 

22 ‘‘(a) DEFINITION.—For purposes of this section, the 

23 term ‘cost-effective’, with respect to an energy efficiency 

24 program, means that the program meets the Total Re25 source Cost Test, which requires that the net present 


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1 value of economic benefits over the life of the program, 

2 including avoided supply and delivery costs and deferred 

3 or avoided investments, is greater than the net present 

4 value of the economic costs over the life of the program, 

5 including program costs and incremental costs borne by 

6 the energy consumer. 

7 ‘‘(b) ALLOCATION.—Not later than June 30, 2015, 

8 and each calendar year thereafter through 2028, the Ad9 ministrator shall distribute to natural gas local distribu10 tion companies for the benefit of retail ratepayers the 

11 quantity of emission allowances allocated for the following 

12 vintage year pursuant to section 771(a)(2). Such allow13 ances shall be distributed among local natural gas dis14 tribution companies based on the following formula: 

15 ‘‘(1) INITIAL FORMULA.—Except as provided in 

16 paragraph (2), for each vintage year, the Adminis17 trator shall distribute emission allowances among 

18 natural gas local distribution companies on a pro 

19 rata basis based on each such company’s annual av20 erage retail natural gas deliveries for 2006 through 

21 2008, unless the owner or operator of the company 

22 selects 3 other consecutive years between 1999 and 

23 2008, inclusive, and timely notifies the Adminis24 trator of its selection. 


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1 ‘‘(2) UPDATING.—Prior to distributing 2019 

2 vintage emission allowances and at 3-year intervals 

3 thereafter, the Administrator shall update the dis4 tribution formula under this subsection to reflect 

5 changes in each natural gas local distribution com6 pany’s service territory since the most recent for7 mula was established. For each successive 3-year pe8 riod, the Administrator shall distribute allowances 

9 on a pro rata basis among natural gas local distribu10 tion companies based on the product of— 

11 ‘‘(A) each natural gas local distribution 

12 company’s average annual natural gas deliveries 

13 per customer during calendar years 2006 

14 through 2008, or during the 3 alternative con15 secutive years selected by such company under 

16 paragraph (1); and 

17 ‘‘(B) the number of customers of such nat18 ural gas local distribution company in the most 

19 recent year in which the formula is updated 

20 under this paragraph. 

21 ‘‘(c) USE OF ALLOWANCES.— 

22 ‘‘(1) RATEPAYER BENEFIT.—Emission allow23 ances distributed to a natural gas local distribution 

24 company under this section shall be used exclusively 

25 for the benefit of retail ratepayers of such natural 


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1 gas local distribution company and may not be used 

2 to support natural gas sales or deliveries to entities 

3 or persons other than such ratepayers. 

4 ‘‘(2) RATEPAYER CLASSES.—In using emission 

5 allowances distributed under this section for the ben6 efit of ratepayers, a natural gas local distribution 

7 company shall ensure that ratepayer benefits are 

8 distributed— 

9 ‘‘(A) among ratepayer classes on a pro 

10 rata basis based on natural gas deliveries to 

11 each class; and 

12 ‘‘(B) equitably among individual ratepayers 

13 within each ratepayer class. 

14 ‘‘(3) LIMITATION.—A natural gas local dis15 tribution company shall not use the value of emis16 sion allowances distributed under this section to pro17 vide to any ratepayer a rebate that is based solely 

18 on the quantity of natural gas delivered to such 

19 ratepayer. To the extent a natural gas local distribu20 tion company uses the value of emission allowances 

21 distributed under this section to provide rebates, it 

22 shall, to the maximum extent practicable, provide 

23 such rebates with regard to the fixed portion of rate24 payers’ bills or as a fixed creditor rebate on natural 

25 gas bills. 


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1 ‘‘(4) ENERGY EFFICIENCY PROGRAMS.—The 

2 value of no less than one-third of the emission allow3 ances distributed to natural gas local distribution 

4 companies pursuant to this section in any calendar 

5 year shall be used for cost-effective energy efficiency 

6 programs for natural gas consumers. Such programs 

7 must be authorized and overseen by the State regu8 latory authority, or by the entity with regulatory au9 thority over retail natural gas rates in the case of 

10 a natural gas local distribution company that is not 

11 regulated by a State regulatory authority. 

12 ‘‘(5) GUIDELINES.—As part of the regulations 

13 promulgated under subsection (h), the Administrator 

14 shall prescribe specific guidelines for the implemen15 tation of the requirements of this subsection. 

16 ‘‘(d) REGULATORY PROCEEDINGS.— 

17 ‘‘(1) REQUIREMENT.—No natural gas local dis18 tribution company shall be eligible to receive emis19 sion allowances under this section unless the State 

20 regulatory authority with authority over such com21 pany, or the entity with authority to regulate retail 

22 rates of a natural gas local distribution company not 

23 regulated by a State regulatory authority, has— 

24 ‘‘(A) promulgated a regulation or com25 pleted a rate proceeding (or the equivalent, in 


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1 the case of a ratemaking entity other than a 

2 State regulatory authority) that provides for 

3 the full implementation of the requirements of 

4 subsection (c); and 

5 ‘‘(B) made available to the Administrator 

6 and the public a report describing, in adequate 

7 detail, the manner in which the requirements of 

8 subsection (c) will be implemented. 

9 ‘‘(2) UPDATING.—The Administrator shall re10 quire, as a condition of continued receipt of emission 

11 allowances under this section, that a new regulation 

12 be promulgated or rate proceeding be completed, and 

13 a new report be made available to the Administrator 

14 and the public, pursuant to paragraph (1), not less 

15 frequently than every 5 years. 

16 ‘‘(e) PLANS AND REPORTING.— 

17 ‘‘(1) REGULATIONS.—As part of the regulations 

18 promulgated under subsection (h), the Administrator 

19 shall prescribe requirements governing plans and re20 ports to be submitted in accordance with this sub21 section. 

22 ‘‘(2) PLANS.—Not later than April 30, 2015, 

23 and every 5 years thereafter through 2025, each 

24 natural gas local distribution company shall submit 

25 to the Administrator a plan, approved by the State 


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1 regulatory authority or other entity charged with 

2 regulating the retail rates of such company, describ3 ing such company’s plans for the disposition of the 

4 value of emission allowances to be received pursuant 

5 to this section, in accordance with the requirements 

6 of this section. 

7 ‘‘(3) REPORTS.—Not later than June 30, 2017, 

8 and each calendar year thereafter through 2031, 

9 each natural gas local distribution company shall 

10 submit a report to the Administrator, approved by 

11 the relevant State regulatory authority or other enti12 ty charged with regulating the retail natural gas 

13 rates of such company, describing the disposition of 

14 the value of any emission allowances received by 

15 such company in the prior calendar year pursuant to 

16 this subsection, including— 

17 ‘‘(A) a description of sales, transfer, ex18 change, or use by the company for compliance 

19 with obligations under this title, of any such 

20 emission allowances; 

21 ‘‘(B) the monetary value received by the 

22 company, whether in money or in some other 

23 form, from the sale, transfer, or exchange of 

24 emission allowances received by the company 

25 under this section; 


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1 ‘‘(C) the manner in which the company’s 

2 disposition of emission allowances received 

3 under this subsection complies with the require4 ments of this section, including each of the re5 quirements of subsection (c); 

6 ‘‘(D) the cost-effectiveness of, and energy 

7 savings achieved by, energy efficiency programs 

8 supported through such emission allowances; 

9 and 

10 ‘‘(E) such other information as the Admin11 istrator may require pursuant to paragraph (1). 

12 ‘‘(4) PUBLICATION.—The Administrator shall 

13 make available to the public all plans and reports 

14 submitted by natural gas local distribution compa15 nies under this subsection, including by publishing 

16 such plans and reports on the Internet. 

17 ‘‘(f) AUDITING.— 

18 ‘‘(1) ADMINISTRATOR AUDIT REPORT.—Each 

19 year, the Administrator shall audit a significant rep20 resentative sample of natural gas local distribution 

21 companies to ensure that emission allowances dis22 tributed under this section have been used exclu23 sively for the benefit of retail ratepayers and that 

24 such companies are complying with the requirements 

25 of this section. In selecting companies for audit, the 


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1 Administrator shall take into account any credible 

2 evidence of noncompliance with such requirements. 

3 The Administrator shall make available to the public 

4 a report describing the results of each such audit, 

5 including by publishing such report on the Internet. 

6 ‘‘(2) GAO AUDIT REPORT.—Not later April 30, 

7 2015 and every 3 years thereafter through April 30, 

8 2026, the Comptroller General of the United States, 

9 incorporating results from the Administrators’ audit 

10 report and other relevant information including dis11 tribution company reports, shall conduct an in-depth 

12 evaluation and make available to the public a report 

13 on the investments made pursuant to subsection (c). 

14 Said report shall be made available to the State reg15 ulatory authority, or the entity with authority to 

16 regulate or set retail natural gas rates in the case 

17 of a natural gas distribution company that is not 

18 regulated by a State regulatory authority, and shall 

19 include a description how the distribution companies 

20 in the audit meet or fail to meet the requirement of 

21 subsection (c), including for investments made in 

22 cost-effective end-use energy efficiency programs, the 

23 lifetime and annual energy saving benefits, and ca24 pacity benefits of said programs. 


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1 ‘‘(3) ADMINISTRATOR COST CONTAINMENT RE2 PORT.—Not later April 30, 2015, and every 3 years 

3 thereafter through April 30, 2026, the Adminis4 trator shall transmit a report to Congress containing 

5 an evaluation of the disposition of the value of emis6 sion allowances received pursuant to this subsection 

7 and recommendations of ways to more effectively di8 rect the value of allowances to reduce costs for con9 sumers, contain the overall costs of the greenhouse 

10 gas emissions reduction program, and meet the pol11 lution reduction targets of the Act. The Adminis12 trator shall make available to the public such report, 

13 including by publishing such report on the Internet. 

14 ‘‘(g) ENFORCEMENT.—A violation of any require15 ment of this section, irrespective of approval by a State 

16 regulatory authority, shall be a violation of this Act. Each 

17 emission allowance the value of which is used in violation 

18 of the requirements of this section shall be a separate vio19 lation. 

20 ‘‘(h) REGULATIONS.—Not later than January 1, 

21 2014, the Administrator, in consultation with the Federal 

22 Energy Regulatory Commission, shall promulgate regula23 tions to implement the requirements of this section. 

24 ‘‘SEC. 774. HOME HEATING OIL AND PROPANE CONSUMERS. 

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


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1 ‘‘(1) CARBON CONTENT.—The term ‘carbon 

2 content’ means the amount of carbon dioxide that 

3 would be emitted as a result of the combustion of a 

4 fuel. 

5 ‘‘(2) COST-EFFECTIVE.—The term ‘cost-effec6 tive’ has the meaning given that term in section 

7 773(a). 

8 ‘‘(b) ALLOCATION.—The Administrator shall dis9 tribute among the States, in accordance with this section, 

10 the quantity of emission allowances allocated pursuant to 

11 section 771(a)(3). The Administrator shall distribute a 

12 percentage of such allowances determined by the Adminis13 trator, after consultation with the Secretary of the Inte14 rior, pursuant to subsection (f). 

15 ‘‘(c) DISTRIBUTION AMONG STATES.—The Adminis16 trator shall distribute emission allowances among the 

17 States under this section each year on a pro rata basis 

18 based on the ratio of— 

19 ‘‘(1) the carbon content of home heating oil and 

20 propane sold to consumers within each State in the 

21 preceding year for residential or commercial uses; to 

22 ‘‘(2) the carbon content of home heating oil and 

23 propane sold to consumers within the United States 

24 in the preceding year for residential or commercial 

25 uses. 


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1 ‘‘(d) USE OF ALLOWANCES.— 

2 ‘‘(1) IN GENERAL.—States shall use emission 

3 allowances distributed under this section exclusively 

4 for the benefit of consumers of home heating oil or 

5 propane for residential or commercial purposes. 

6 Such proceeds shall be used exclusively for— 

7 ‘‘(A) cost-effective energy efficiency pro8 grams for consumers that use home heating oil 

9 or propane for residential or commercial pur10 poses; or 

11 ‘‘(B) rebates or other direct financial as12 sistance programs for consumers of home heat13 ing oil or propane used for residential or com14 mercial purposes. 

15 ‘‘(2) ADMINISTRATION AND DELIVERY MECHA16 NISMS.—In administering programs supported by 

17 this section, States shall— 

18 ‘‘(A) use no less than 50 percent of the 

19 value of emission allowances received under this 

20 section for cost-effective energy efficiency pro21 grams to reduce consumers’ overall fuel costs; 

22 ‘‘(B) to the extent practicable, deliver con23 sumer support under this section through exist24 ing energy efficiency and consumer energy as25 sistance programs or delivery mechanisms, inVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00632 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 cluding, where appropriate, programs or mecha2 nisms administered by parties other than the 

3 State; and 

4 ‘‘(C) seek to coordinate the administration 

5 and delivery of energy efficiency and consumer 

6 energy assistance programs supported under 

7 this section, with one another and with existing 

8 programs for various fuel types, so as to deliver 

9 comprehensive, fuel-blind, coordinated programs 

10 to consumers. 

11 ‘‘(e) REPORTING.—Each State receiving emission al12 lowances under this section shall submit to the Adminis13 trator, within 12 months of each receipt of such allow14 ances, a report, in accordance with such requirements as 

15 the Administrator may prescribe, that— 

16 ‘‘(1) describes the State’s use of emission allow17 ances distributed under this section, including a de18 scription of the energy efficiency and consumer as19 sistance programs supported with such allowances; 

20 ‘‘(2) demonstrates the cost-effectiveness of, and 

21 the energy savings achieved by, energy efficiency 

22 programs supported under this section; and 

23 ‘‘(3) includes a report prepared by an inde24 pendent third party, in accordance with such regula25 tions as the Administrator may promulgate, evaluVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00633 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 ating the performance of the energy efficiency and 

2 consumer assistance programs supported under this 

3 section. 

4 ‘‘(f) ENFORCEMENT.—If the Administrator deter5 mines that a State is not in compliance with this section, 

6 the Administrator may withhold a portion of the emission 

7 allowances, the quantity of which is equal to up to twice 

8 the quantity of the allowances that the State failed to use 

9 in accordance with the requirements of this section, that 

10 such State would otherwise be eligible to receive under this 

11 section in later years. Allowances withheld pursuant to 

12 this subsection shall be distributed among the remaining 

13 States on a pro rata basis in accordance with the formula 

14 in subsection (c). 

15 ‘‘SEC. 775. DOMESTIC FUEL PRODUCTION. 

16 ‘‘(a) PURPOSE.—The purpose of this section is to 

17 provide emission allowance rebates to petroleum refineries 

18 in the United States in a manner that promotes energy 

19 efficiency and a reduction in greenhouse gas emissions at 

20 such facilities. 

21 ‘‘(b) DEFINITIONS.—In this section: 

22 ‘‘(1) EMISSIONS.—The term ‘emissions’ in23 cludes direct emissions from fuel combustion, proc24 ess emissions, and indirect emissions from the gen25 eration of electricity, steam, and hydrogen used to 


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1 produce the output of a petroleum refinery or the 

2 petroleum refinery sector. 

3 ‘‘(2) PETROLEUM REFINERY.—The term ‘petro4 leum refinery’ means a facility classified under code 

5 324110 of the North American Industrial Classifica6 tion System of 2002. 

7 ‘‘(3) SMALL BUSINESS REFINER.—The term 

8 ‘small business refiner’ means a refiner that meets 

9 the applicable Federal refinery capacity and em10 ployee limitations criteria described in section 

11 45H(c)(1) of the Internal Revenue Code of 1986 (as 

12 in effect on the date of enactment of this section and 

13 without regard to section 45H(d)). Eligibility of a 

14 small business refiner under this paragraph shall not 

15 be recalculated or disallowed on account of (i) its 

16 merger with another small business refiner or refin17 ers after December 31, 2002, or (ii) its acquisition 

18 of another small business refiner (or refinery of such 

19 refiner) after December 31, 2002. 

20 ‘‘(c) IN GENERAL.—The Administrator shall dis21 tribute allowances pursuant to this section to owners and 

22 operators of petroleum refineries, including small business 

23 refiners, in the United States. 

24 ‘‘(d) DISTRIBUTION SCHEDULE.—The Administrator 

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1 lations issued under subsection (e) for each vintage year 

2 no later than October 31 of the preceding calendar year. 

3 ‘‘(e) REGULATIONS.—Not later than 3 years after the 

4 date of enactment of this title, the Administrator, in con5 sultation with the Administrator of the Energy Informa6 tion Administration, shall promulgate regulations that es7 tablish a formula for distributing emission allowances con8 sistent with the purpose of this section. In establishing 

9 such formula, the Administrator shall consider the relative 

10 complexity of refinery processes and appropriate mecha11 nisms to take energy efficiency and greenhouse gas reduc12 tions into account. If a petroleum refinery’s electricity pro13 vider received a free allocation of emission allowances pur14 suant to section 771(a)(1), the Administrator shall take 

15 this free allocation into account when establishing such 

16 formula to avoid rebates to a petroleum refinery for costs 

17 that the Administrator determines were not incurred by 

18 the petroleum refinery because the allowances were freely 

19 allocated to the petroleum refinery’s electricity provider 

20 and used for the benefit of the petroleum refinery. This 

21 formula shall apply separately to the distribution of allow22 ances allocated pursuant to section 771(a)(4), including 

23 for petroleum refiners and small business refiners. 

24 ‘‘SEC. 776. CONSUMER PROTECTION. 

25 ‘‘(a) CONSUMER REBATES.— 


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1 ‘‘(1) ESTABLISHMENT OF FUND.—There is es2 tablished in the Treasury a separate account, to be 

3 known as the ‘Consumer Rebate Fund’). 

4 ‘‘(2) AVAILABILITY OF AMOUNTS.—All amounts 

5 deposited in the Consumer Rebate Fund shall be 

6 available without further appropriation or fiscal year 

7 limitation. 

8 ‘‘(3) DISTRIBUTION OF AMOUNTS.—Beginning 

9 in 2026, for each year after deposits are made in the 

10 Consumer Rebate Fund pursuant to section 

11 771(b)(2)(A), the President shall use the funds in 

12 accordance with Federal statutory authority to pro13 vide relief to consumers and others affected by the 

14 enactment of the Clean Energy Jobs and American 

15 Power Act (and amendments made by that Act). 

16 ‘‘(b) ENERGY REFUND PROGRAM.— 

17 ‘‘(1) ESTABLISHMENT OF FUND.—There is es18 tablished in the Treasury a separate account, to be 

19 known as the ‘Energy Refund Account’). 

20 ‘‘(2) AVAILABILITY OF AMOUNTS.—All amounts 

21 deposited in the Energy Refund Account shall be 

22 available without further appropriation or fiscal year 

23 limitation. 

24 ‘‘(3) DISTRIBUTION OF AMOUNTS.—For each 

25 year after deposits are made to the Energy Refund 


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1 Account pursuant to section 771(b)(2)(B), the 

2 President shall use the funds in accordance with 

3 Federal statutory authority to offset energy cost im4 pacts on low- and moderate-income households. 

5 ‘‘SEC. 777. EXCHANGE FOR STATE-ISSUED ALLOWANCES. 

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

7 date of enactment of this title, the Administrator shall 

8 issue regulations allowing any person in the United States 

9 to exchange greenhouse gas emission allowances issued be10 fore the later of December 31, 2011, or the date that is 

11 9 months after the first auction under section 778, by the 

12 State of California or for the Regional Greenhouse Gas 

13 Initiative, or the Western Climate Initiative (in this sec14 tion referred to as ‘State allowances’) for emission allow15 ances established by the Administrator under section 

16 721(a). 

17 ‘‘(b) REGULATIONS.—Regulations issued under sub18 section (a) shall— 

19 ‘‘(1) provide that a person exchanging State al20 lowances under this section receive emission allow21 ances established under section 721(a) in the 

22 amount that is sufficient to compensate for the cost 

23 of obtaining and holding such State allowances; 

24 ‘‘(2) establish a deadline by which persons must 

25 exchange the State allowances; 


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1 ‘‘(3) provide that the Federal emission allow2 ances disbursed pursuant to this section shall be de3 ducted from the allowances to be auctioned pursuant 

4 to section 771(b); and 

5 ‘‘(4) require that, once exchanged, the credit or 

6 other instrument be retired for purposes of use 

7 under the program by or for which it was originally 

8 issued. 

9 ‘‘(c) COST OF OBTAINING STATE ALLOWANCE.—For 

10 purposes of this section, the cost of obtaining a State al11 lowance shall be the average auction price, for emission 

12 allowances issued in the year in which the State allowance 

13 was issued, under the program under which the State al14 lowance was issued. 

15 ‘‘SEC. 778. AUCTION PROCEDURES. 

16 ‘‘(a) IN GENERAL.—To the extent that auctions of 

17 emission allowances by the Administrator are authorized 

18 by this part, such auctions shall be carried out pursuant 

19 to this section and the regulations established hereunder. 

20 ‘‘(b) INITIAL REGULATIONS.—Not later than 12 

21 months after the date of enactment of this title, the Ad22 ministrator, in consultation with other agencies, as appro23 priate, shall promulgate regulations governing the auction 

24 of allowances under this section. Such regulations shall in25 clude the following requirements: 


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1 ‘‘(1) FREQUENCY; FIRST AUCTION.—Auctions 

2 shall be held four times per year at regular intervals, 

3 with the first auction to be held no later than March 

4 31, 2011. 

5 ‘‘(2) AUCTION SCHEDULE; CURRENT AND FU6 TURE VINTAGES.—The Administrator shall, at each 

7 quarterly auction under this section, offer for sale 

8 both a portion of the allowances with the same vin9 tage year as the year in which the auction is being 

10 conducted and a portion of the allowances with vin11 tage years from future years. The preceding sen12 tence shall not apply to auctions held before 2012, 

13 during which period, by necessity, the Administrator 

14 shall auction only allowances with a vintage year 

15 that is later than the year in which the auction is 

16 held. Beginning with the first auction and at each 

17 quarterly auction held thereafter, the Administrator 

18 may offer for sale allowances with vintage years of 

19 up to 4 years after the year in which the auction is 

20 being conducted. 

21 ‘‘(3) AUCTION FORMAT.—Auctions shall follow 

22 a single-round, sealed-bid, uniform price format. 

23 ‘‘(4) PARTICIPATION; FINANCIAL ASSURANCE.— 

24 Auctions shall be open to any person, except that 

25 the Administrator may establish financial assurance 


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1 requirements to ensure that auction participants can 

2 and will perform on their bids. 

3 ‘‘(5) DISCLOSURE OF BENEFICIAL OWNER4 SHIP.—Each bidder in the auction shall be required 

5 to disclose the person or entity sponsoring or bene6 fitting from the bidder’s participation in the auction 

7 if such person or entity is, in whole or in part, other 

8 than the bidder. 

9 ‘‘(6) PURCHASE LIMITS.—No person may, di10 rectly or in concert with another participant, pur11 chase more than 5 percent of the allowances offered 

12 for sale at any quarterly auction. 

13 ‘‘(7) PUBLICATION OF INFORMATION.—After 

14 the auction, the Administrator shall, in a timely 

15 fashion, publish the identities of winning bidders, 

16 the quantity of allowances obtained by each winning 

17 bidder, and the auction clearing price. 

18 ‘‘(8) OTHER REQUIREMENTS.—The Adminis19 trator may include in the regulations such other re20 quirements or provisions as the Administrator, in 

21 consultation with other agencies, as appropriate, 

22 considers appropriate to promote effective, efficient, 

23 transparent, and fair administration of auctions 

24 under this section. 


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1 ‘‘(c) REVISION OF REGULATIONS.—The Adminis2 trator may, in consultation with other agencies, as appro3 priate, at any time, revise the initial regulations promul4 gated under subsection (b) by promulgating new regula5 tions. Such revised regulations need not meet the require6 ments identified in subsection (b) if the Administrator de7 termines that an alternative auction design would be more 

8 effective, taking into account factors including costs of ad9 ministration, transparency, fairness, and risks of collusion 

10 or manipulation. In determining whether and how to re11 vise the initial regulations under this subsection, the Ad12 ministrator shall not consider maximization of revenues to 

13 the Federal Government. 

14 ‘‘(d) RESERVE AUCTION PRICE.—The minimum re15 serve auction price shall be $10 (in constant 2005 dollars) 

16 for auctions occurring in 2012. The minimum reserve 

17 price for auctions occurring in years after 2012 shall be 

18 the minimum reserve auction price for the previous year 

19 increased by 5 percent plus the rate of inflation (as meas20 ured by the Consumer Price Index for all urban con21 sumers). 

22 ‘‘(e) DELEGATION OR CONTRACT.—Pursuant to reg23 ulations under this section, the Administrator may by del24 egation or contract provide for the conduct of auctions 

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1 ments or agencies of the Federal Government or by non2 governmental agencies, groups, or organizations. 

3 ‘‘(f) SMALL BUSINESS REFINER RESERVE.—The Ad4 ministrator shall, in accordance with this subsection, issue 

5 regulations setting aside a specified number of allowances, 

6 as determined by the Administrator, that small business 

7 refiners may purchase at the average auction price and 

8 may use to demonstrate compliance pursuant to section 

9 722. These regulations shall provide the following: 

10 ‘‘(1) ALLOWED PURCHASES.—From January 1 

11 of the calendar year that matches the vintage year 

12 for which allowances have been placed in the reserve, 

13 through January 14 of the following year, small 

14 business refiners (as defined in section 775(b)) may 

15 purchase allowances from this reserve at the price 

16 determined pursuant to paragraph (2). 

17 ‘‘(2) PRICE.—The price for allowances pur18 chased from this reserve shall be the average auction 

19 price for allowances of the same vintage year pur20 chased at auctions conducted pursuant to this sec21 tion during the 12 months preceding the purchase of 

22 the allowances. 

23 ‘‘(3) USE OF ALLOWANCES.—Allowances pur24 chased from this reserve shall only be used by the 

25 purchaser to demonstrate compliance pursuant to 


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1 section 722 for attributable greenhouse gas emis2 sions in the calendar year that matches the vintage 

3 year of the purchased allowance. Allowances pur4 chased from this reserve may not be banked, traded 

5 or borrowed. 

6 ‘‘(4) LIMITATIONS ON PURCHASE AMOUNT.— 

7 The Administrator, by regulation adopted after pub8 lic notice and an opportunity for comment, shall es9 tablish procedures to distribute the ability to pur10 chase allowances from the reserve fairly among all 

11 small business refiners interested in purchasing al12 lowances from this reserve so as to address the po13 tential that requests to purchase allowances exceed 

14 the number of allowances available in the reserve. 

15 This regulation may place limits on the number of 

16 allowances a small business refiner may purchase 

17 from the reserve. 

18 ‘‘(5) UNSOLD ALLOWANCES.—Vintage year al19 lowances not sold from the reserve on or before Jan20 uary 15 of the calendar year following the vintage 

21 year shall be sold at an auction conducted pursuant 

22 to this section no later than March 31 of the cal23 endar year following the vintage year. If significantly 

24 more allowances are being placed in the reserve than 

25 are being purchased from the reserve several years 


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1 in a row, the Administrator may adjust either the 

2 percent of allowances placed in the reserve or the 

3 date by which allowances may be purchased from the 

4 reserve. 

5 ‘‘SEC. 779. AUCTIONING ALLOWANCES FOR OTHER ENTI6 TIES. 

7 ‘‘(a) CONSIGNMENT.—Any entity holding emission al8 lowances or compensatory allowances may request that the 

9 Administrator auction, pursuant to section 778, the allow10 ances on consignment. 

11 ‘‘(b) PRICING.—When the Administrator acts under 

12 this section as the agent of an entity in possession of emis13 sion allowances, the Administrator is not obligated to ob14 tain the highest price possible for the emission allowances, 

15 and instead shall auction consignment allowances in the 

16 same manner and pursuant to the same rules as auctions 

17 of other allowances under section 778. The Administrator 

18 may permit the entity offering the allowance for sale to 

19 condition the sale of its allowances pursuant to this section 

20 on a minimum reserve price that is different than the re21 serve auction price set pursuant to section 778(d). 

22 ‘‘(c) PROCEEDS.—For emission allowances and com23 pensatory allowances auctioned pursuant to this section, 

24 notwithstanding section 3302 of title 31, United States 

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1 ceipt, the United States shall transfer the proceeds from 

2 the auction to the entity which held the allowances auc3 tioned. No funds transferred from a purchaser to a seller 

4 of emission allowances or compensatory allowances under 

5 this subsection shall be held by any officer or employee 

6 of the United States or treated for any purpose as public 

7 monies. 

8 ‘‘(d) REGULATIONS.—The Administrator shall issue 

9 regulations within 24 months after the date of enactment 

10 of this title to implement this section. 

11 ‘‘SEC. 780. COMMERCIAL DEPLOYMENT OF CARBON CAP12 TURE AND SEQUESTRATION TECHNOLOGIES. 

13 ‘‘(a) DEFINITIONS.—In this section: 

14 ‘‘(1) CARBON CAPTURE AND STORAGE.—The 

15 term ‘carbon capture and sequestration’ shall— 

16 ‘‘(A) have such term as Administrator 

17 shall determine by regulation; and 

18 ‘‘(B) include— 

19 ‘‘(i) geological sequestration; and 

20 ‘‘(ii) conversion of captured carbon di21 oxide to a stable form that will safely and 

22 permanently sequester the carbon dioxide. 

23 ‘‘(2) QUALIFYING ELECTRIC GENERATING

24 UNIT.—The term ‘qualifying electric generating unit’ 

25 means an electric utility unit that— 


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1 ‘‘(A) derives at least 50 percent of the an2 nual fuel input of the unit from— 

3 ‘‘(i) coal or waste coal; 

4 ‘‘(ii) petroleum coke; or 

5 ‘‘(iii) any combination of those 2 

6 fuels; and 

7 ‘‘(B)(i) has a nameplate capacity of 200 

8 megawatts or more; or 

9 ‘‘(ii) in the case of retrofit applications, the 

10 carbon capture and sequestration technology is 

11 applied to the flue gas or fuel gas stream from 

12 at least 200 megawatts of the total nameplate 

13 generating capacity of the unit. 

14 ‘‘(3) QUALIFYING INDUSTRIAL SOURCE.—The 

15 term ‘qualifying industrial source’ means a source 

16 that— 

17 ‘‘(A) is not a qualifying electric generating 

18 unit; 

19 ‘‘(B) absent carbon capture and sequestra20 tion, would emit greater than 50,000 tons per 

21 year of carbon dioxide; and 

22 ‘‘(C) does not produce a liquid transpor23 tation fuel from a solid fossil-based feedstock. 

24 ‘‘(4) TREATED GENERATING CAPACITY.— 


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1 ‘‘(A) IN GENERAL.—The term ‘treated 

2 generating capacity’ means the portion of the 

3 total generating capacity of an electric gener4 ating unit (or industrial source, measured by 

5 such method as the Administrator may des6 ignate to be equivalent to the calculation under 

7 subparagraph (B)) for which the flue gas or 

8 fuel gas is treated by the carbon capture and 

9 sequestration technology. 

10 ‘‘(B) CALCULATION.—In determining the 

11 treated portion of flue gas or fuel gas of an 

12 electric generating unit under subparagraph 

13 (A), the Administrator shall multiply the name14 plate capacity of the unit by the ratio that— 

15 ‘‘(i) the mass of flue gas or fuel gas 

16 that is treated by the carbon capture and 

17 sequestration technology; bears to 

18 ‘‘(ii) the total mass of the flue gas or 

19 fuel gas that is produced when the unit is 

20 operating at maximum capacity. 

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

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

23 promulgate regulations providing for the distribution of 

24 emission allowances allocated under section 771(a)(6), 

25 pursuant to the requirements of this section, to support 


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1 the commercial deployment of carbon capture and seques2 tration technologies in electric power generation and in3 dustrial operations. 

4 ‘‘(c) ELIGIBILITY CRITERIA AND METHOD OF DIS5 TRIBUTION.— 

6 ‘‘(1) ELIGIBILITY.—For an owner or operator 

7 of a project to be eligible to receive emission allow8 ances under this section, the project shall— 

9 ‘‘(A) implement carbon capture and se10 questration technology— 

11 ‘‘(i) at a qualifying electric generating 

12 unit that, upon implementation of the car13 bon capture and sequestration technology, 

14 will achieve an emission limitation that is 

15 at least a 50-percent reduction in emis16 sions of the carbon dioxide produced by— 

17 ‘‘(I) the unit, measured on an 

18 annual basis, as determined by the 

19 Administrator; or 

20 ‘‘(II) in the case of retrofit appli21 cations described in subsection 

22 (a)(2)(B)(ii), the treated portion of 

23 flue gas from the unit, measured on 

24 an annual basis, as determined by the 

25 Administrator; or 


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1 ‘‘(ii) at a qualifying industrial source 

2 that, upon implementation, will achieve an 

3 emission limitation that is at least a 50- 

4 percent reduction in emissions of the car5 bon dioxide produced by the emission 

6 point, measured on an annual basis, as de7 termined by the Administrator; 

8 ‘‘(B)(i) geologically sequester carbon diox9 ide at a site that meets all applicable permitting 

10 and certification requirements for geological se11 questration; or 

12 ‘‘(ii) pursuant to such requirements as the 

13 Administrator may prescribe by regulation, con14 vert captured carbon dioxide to a stable form 

15 that will safely and permanently sequester the 

16 carbon dioxide; 

17 ‘‘(C) meet all other applicable State, tribal, 

18 and Federal permitting requirements; and 

19 ‘‘(D) be located in the United States. 

20 ‘‘(2) METHOD OF DISTRIBUTION.— 

21 ‘‘(A) PERIOD.—The Administrator shall 

22 distribute emission allowances allocated under 

23 section 771(a)(6) to eligible projects for each of 

24 the first 10 calendar years for which each eligi25 ble project is in commercial operation. 


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1 ‘‘(B) BONUS ALLOWANCE FORMULA FOR

2 ELECTRIC GENERATING UNITS.— 

3 ‘‘(i) PHASE I DISTRIBUTION.—For 

4 each project that is certified under sub5 section (h), the quantity of emission allow6 ances that the Administrator shall dis7 tribute for a calendar year to the owner or 

8 operator of the eligible project shall be 

9 equal to the quotient obtained by divid10 ing— 

11 ‘‘(I) the product obtained by mul12 tiplying— 

13 ‘‘(aa) the number of metric 

14 tons of carbon dioxide emissions 

15 avoided through capture and se16 questration of emissions by the 

17 project for a particular year, as 

18 determined pursuant to such 

19 methodology as the Adminis20 trator shall prescribe by regula21 tion; and 

22 ‘‘(bb) a bonus allowance 

23 value that is assigned to the 

24 project under subsection (d)(2); 

25 by 


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1 ‘‘(II) the average fair market 

2 value of an emission allowance during 

3 the calendar year preceding the year 

4 during which the project captured and 

5 sequestered the carbon dioxide emis6 sions. 

7 ‘‘(ii) PHASE II DISTRIBUTION.—For 

8 each project that qualifies under subsection 

9 (e), the quantity of emission allowances 

10 that the Administrator shall distribute for 

11 a calendar year to the owner or operator of 

12 the eligible project shall be determined 

13 through— 

14 ‘‘(I) reverse auction, as pre15 scribed by regulation under subsection 

16 (e)(3); or 

17 ‘‘(II) if the Administrator decides 

18 not to distribute allowances through a 

19 reverse auction, an alternate distribu20 tion method established by regulation 

21 under subsection (e)(4). 

22 ‘‘(C) FORMULA FOR INDUSTRIAL

23 SOURCES.—For each project that qualifies 

24 under subsection (g), the quantity of emission 

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1 tribute for a calendar year to the owner or op2 erator of the eligible project shall be determined 

3 in accordance with subsection (g)(2). 

4 ‘‘(D) CONSISTENCY.—The Administrator 

5 shall develop a method of distribution for each 

6 category of eligible projects under this para7 graph in a manner that is consistent with the 

8 certification and distribution requirements 

9 under subsection (h). 

10 ‘‘(d) PHASE I DISTRIBUTION TO ELECTRIC GENER11 ATING UNITS.— 

12 ‘‘(1) APPLICABILITY.— 

13 ‘‘(A) IN GENERAL.—Subject to subpara14 graph (B), this subsection shall apply to 

15 projects that are undertaken at qualifying elec16 tric generating units that the Administrator de17 termines to be eligible to receive emission allow18 ances under this section. 

19 ‘‘(B) CAPACITY.—The total cumulative 

20 generating capacity of the projects described in 

21 subparagraph (A) shall be equal to approxi22 mately 20 gigawatts of the treated generating 

23 capacity. 

24 ‘‘(2) BONUS ALLOWANCE VALUES.— 

25 ‘‘(A) FIRST TRANCHE.— 


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1 ‘‘(i) IN GENERAL.—The first tranche 

2 shall include the first 10 gigawatts of 

3 treated generating capacity undertaken at 

4 qualifying electric generating units that re5 ceive emission allowances under this sec6 tion. 

7 ‘‘(ii) CERTAIN UNITS.—For an eligible 

8 project achieving capture and sequestration 

9 of 90 percent or more of the carbon diox10 ide that otherwise would be emitted by the 

11 unit, the bonus allowance value shall be 

12 $96 per ton of carbon dioxide emissions 

13 avoided through the use of capture and se14 questration. 

15 ‘‘(iii) BONUS ALLOWANCE VALUE.— 

16 The Administrator shall establish, by regu17 lation, a bonus allowance value for each 

18 rate of capture and sequestration achieved 

19 by an eligible project— 

20 ‘‘(I) beginning at a minimum of 

21 $50 per ton for a 50-percent rate; and 

22 ‘‘(II) varying in direct proportion 

23 with increasing rates of capture and 

24 sequestration up to $96 per ton for an 

25 90-percent rate. 


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1 ‘‘(B) SECOND TRANCHE.— 

2 ‘‘(i) IN GENERAL.—The second 

3 tranche shall include the second 10 

4 gigawatts of treated generating capacity 

5 undertaken at qualifying electric gener6 ating units that receive emission allow7 ances under this section. 

8 ‘‘(ii) CERTAIN UNITS.—For an eligible 

9 project achieving the capture and seques10 tration of 90 percent or more of the carbon 

11 dioxide that otherwise would be emitted by 

12 the eligible project, the bonus allowance 

13 value shall be $85 per ton of carbon diox14 ide emissions avoided through the use of 

15 capture and sequestration. 

16 ‘‘(iii) BONUS ALLOWANCE VALUE.— 

17 The Administrator shall establish, by regu18 lation, a bonus allowance value for each 

19 rate of capture and sequestration achieved 

20 by an eligible project— 

21 ‘‘(I) beginning at a minimum of 

22 $50 per ton for a 50-percent rate; and 

23 ‘‘(II) varying in direct proportion 

24 with increasing rates of capture and 


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1 sequestration up to $85 per ton for a 

2 90-percent rate. 

3 ‘‘(C) INCREASE IN BONUS ALLOWANCE

4 VALUE.—For an eligible project that com5 mences commercial operation by not later than 

6 January 1, 2017, and that meets the eligibility 

7 criteria under subsection (c), the otherwise-ap8 plicable bonus allowance value under this para9 graph shall be increased by $10, if the owner 

10 or operator of the eligible project submits to the 

11 Administrator by not later than January 1, 

12 2012, a notification of the intent to implement 

13 carbon capture and sequestration technology at 

14 a qualifying electric generating unit in accord15 ance with subsection (c). 

16 ‘‘(D) REDUCTION.— 

17 ‘‘(i) IN GENERAL.—For a carbon cap18 ture and sequestration project sequestering 

19 in a geological formation for purposes of 

20 enhanced hydrocarbon recovery, the Ad21 ministrator, by regulation, shall reduce the 

22 applicable bonus allowance value under 

23 this paragraph to reflect the lower net cost 

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1 tion into geological formations solely for 

2 purposes of sequestration. 

3 ‘‘(ii) ASSESSMENT OF NET COST.— 

4 For the purpose of this subparagraph, an 

5 assessment of net cost of a project shall 

6 account for the cost of the injection of car7 bon dioxide, or other method of enhanced 

8 hydrocarbon recovery, that would have oth9 erwise been undertaken in the absence of 

10 the carbon capture and sequestration 

11 project under consideration. 

12 ‘‘(E) ADJUSTMENTS.—The Administrator 

13 shall annually adjust for monetary inflation the 

14 bonus allowance values established under this 

15 paragraph. 

16 ‘‘(F) MEASUREMENT.—The Administrator 

17 shall measure the tranches and capture levels 

18 for assigning the bonus allowance values under 

19 this subsection based on the treated generating 

20 capacity of the qualifying electric generating 

21 units and qualifying industrial sources that re22 ceive emission allowances under this subsection. 

23 ‘‘(G) AVERAGE FAIR MARKET VALUE.— 

24 ‘‘(i) IN GENERAL.—The Administrator 

25 and the Secretary of Energy may jointly 


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1 determine that the average fair market 

2 value for emission allowances or the bonus 

3 allowances have been too low or too high to 

4 achieve efficient and cost-effective commer5 cial deployment of carbon capture and se6 questration technology in a given calendar 

7 year. 

8 ‘‘(ii) ACTION ON DETERMINATION.— 

9 On making a determination under clause 

10 (i), the Administrator may— 

11 ‘‘(I) promulgate regulations to 

12 adjust the bonus allowance value 

13 under this paragraph; or 

14 ‘‘(II) distribute an appropriate 

15 quantity of emission allowances allo16 cated under section 771(a)(6) from 

17 any future vintage year. 

18 ‘‘(e) PHASE II DISTRIBUTION TO ELECTRIC GENER19 ATING UNITS.— 

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

21 apply only to the distribution of emission allowances 

22 for carbon capture and sequestration projects under23 taken at qualifying electric generating units and 

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1 ating capacity threshold identified under subsection 

2 (d)(1) is reached. 

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

4 before the date on which the capacity threshold iden5 tified in subsection (d)(1) is projected to be reached, 

6 the Administrator shall promulgate regulations to 

7 govern the distribution of emission allowances to the 

8 owners or operators of eligible projects under this 

9 subsection. 

10 ‘‘(3) REVERSE AUCTIONS.— 

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

12 paragraph (4), the regulations promulgated 

13 pursuant to paragraph (2) shall provide for the 

14 distribution of emission allowances to the own15 ers or operators of eligible projects under this 

16 subsection through at least 2 reverse auctions, 

17 each of which shall be held not less frequently 

18 than once each calendar year. 

19 ‘‘(B) REQUIREMENTS.— 

20 ‘‘(i) PROJECTS AT INDUSTRIAL

21 SOURCES.—The Administrator shall annu22 ally establish a reverse auction for projects 

23 at industrial sources, which may not par24 ticipate in other auctions. 


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1 ‘‘(ii) OTHER AUCTIONS.—The Admin2 istrator may establish a separate auction 

3 for each of not more than 5 different 

4 project categories, as defined based on— 

5 ‘‘(I) coal type; 

6 ‘‘(II) capture technology; 

7 ‘‘(III) geological formation type; 

8 ‘‘(IV) new unit versus retrofit ap9 plication; 

10 ‘‘(V) such other factors as the 

11 Administrator may prescribe; or 

12 ‘‘(VI) any combination of the fac13 tors described in subclauses (I) 

14 through (V). 

15 ‘‘(iii) EFFICIENT DISTRIBUTION.— 

16 The Administrator shall establish proce17 dures for the auction of emission allow18 ances under this subparagraph to ensure 

19 that the establishment of separate auctions 

20 for different project categories will not un21 duly impede the efficient and expeditious 

22 distribution of emission allowances to eligi23 ble projects under this subsection. 

24 ‘‘(iv) MINIMUM RATES.—The Admin25 istrator may establish appropriate minVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00660 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 imum rates of capture and sequestration 

2 for the treated generating capacity of a 

3 project in implementing this subparagraph. 

4 ‘‘(C) AUCTION PROCESS.—At each reverse 

5 auction under this paragraph— 

6 ‘‘(i) the Administrator shall solicit 

7 bids from eligible projects; 

8 ‘‘(ii) owners or operators of eligible 

9 projects participating in the auction shall 

10 submit a bid, including the desired level of 

11 carbon dioxide sequestration incentive per 

12 ton and the estimated quantity of carbon 

13 dioxide that the project will permanently 

14 sequester during a 10-year period; and 

15 ‘‘(iii) the Administrator shall select 

16 bids within each auction for the sequestra17 tion quantity submitted, beginning with 

18 the eligible project for which the bid is 

19 submitted for the lowest level of sequestra20 tion incentive on a per-ton basis and meet21 ing such other requirements as the Admin22 istrator may specify, until the amounts 

23 available for the reverse auction are com24 mitted. 


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1 ‘‘(D) FORM OF DISTRIBUTION.—The Ad2 ministrator shall distribute emission allowances 

3 to the owners or operators of eligible projects 

4 selected through a reverse auction under this 

5 paragraph pursuant to a formula equivalent to 

6 the formula contained in subsection (c)(2)(B), 

7 except that the bonus allowance value that is 

8 bid by the applicable entity shall be substituted 

9 for the bonus allowance values described in sub10 section (c)(2). 

11 ‘‘(4) ALTERNATIVE DISTRIBUTION METHOD.— 

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

13 determines that a reverse auction will not result 

14 in efficient and cost-effective commercial de15 ployment of carbon capture and sequestration 

16 technologies, the Administrator, pursuant to 

17 regulations under paragraph (2) or (5), shall 

18 prescribe a schedule for the provision of bonus 

19 allowances to the owners or operators of eligible 

20 projects under this subsection, in accordance 

21 with the requirements of this paragraph. 

22 ‘‘(B) MULTIPLE TRANCHES.—The Admin23 istrator shall divide emission allowances avail24 able for distribution to the owners or operators 


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1 of eligible projects into a series of tranches, 

2 each of which— 

3 ‘‘(i) shall support the deployment of a 

4 specified quantity of cumulative electric 

5 generating capacity using carbon capture 

6 and sequestration technology; and 

7 ‘‘(ii) shall not be greater than 10 

8 gigawatts of treated generating capacity. 

9 ‘‘(C) METHOD OF DISTRIBUTION.—The 

10 Administrator shall distribute emission allow11 ances within each tranche, on a first-come, 

12 first-served basis— 

13 ‘‘(i) based on the date of full-scale op14 eration of capture and sequestration tech15 nology; and 

16 ‘‘(ii) pursuant to a formula that— 

17 ‘‘(I) is similar to the formula 

18 contained in subsection (c)(2)(C), ex19 cept that the Administrator may pre20 scribe bonus allowance values dif21 ferent than those described in sub22 section (c)(2) based on the criteria es23 tablished under subparagraph (E); 

24 and 


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1 ‘‘(II) establishes the number of 

2 emission allowances to be distributed 

3 per ton of carbon dioxide sequestered 

4 by the project. 

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

6 established pursuant to subparagraph (B), the 

7 Administrator shall establish a schedule for dis8 tributing emission allowances that— 

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

10 provides higher bonus allowance values for 

11 projects achieving higher rates of capture 

12 and sequestration for the treated genera13 tion capacity at the unit; 

14 ‘‘(ii) for each capture and sequestra15 tion rate, establishes a bonus allowance 

16 value that is lower than that established 

17 for the applicable rate for the previous 

18 tranche (or, in the case of the first 

19 tranche, than that established for the ap20 plicable rate under subsection (d)(2)); and 

21 ‘‘(iii) may establish different bonus al22 lowance levels for not more than 5 dif23 ferent project categories, as defined based 

24 on— 

25 ‘‘(I) coal type; 


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1 ‘‘(II) capture and transportation 

2 technology; 

3 ‘‘(III) geological formation type; 

4 ‘‘(IV) new unit versus retrofit ap5 plication; 

6 ‘‘(V) such other factors as the 

7 Administrator may prescribe; or 

8 ‘‘(VI) any combination of the fac9 tors described in subclauses (I) 

10 through (V). 

11 ‘‘(E) CRITERIA FOR ESTABLISHING BONUS

12 ALLOWANCE VALUES.—In establishing bonus al13 lowance values under this paragraph, the Ad14 ministrator shall seek to cover not more than 

15 the reasonable incremental capital and oper16 ating costs of a project that are attributable to 

17 implementation of carbon capture, transpor18 tation, and sequestration technologies, taking 

19 into account— 

20 ‘‘(i) the reduced cost of compliance 

21 with section 722; 

22 ‘‘(ii) the reduced cost associated with 

23 sequestering in a geological formation for 

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1 logical formations solely for purposes of se2 questration; 

3 ‘‘(iii) the relevant factors defining the 

4 project category; and 

5 ‘‘(iv) such other factors as the Admin6 istrator determines to be appropriate. 

7 ‘‘(5) REVISION OF REGULATIONS.—The Admin8 istrator shall review and, as appropriate, revise the 

9 applicable regulations under this subsection not less 

10 frequently than once every 8 years. 

11 ‘‘(f) LIMITS FOR CERTAIN ELECTRIC GENERATING

12 UNITS.— 

13 ‘‘(1) DEFINITIONS.—In this subsection, the 

14 terms ‘covered EGU’ and ‘initially permitted’ have 

15 the meanings given those terms in section 812. 

16 ‘‘(2) COVERED EGUS INITIALLY PERMITTED

17 FROM 2009 THROUGH 2014.—For a covered EGU 

18 that is initially permitted during the period begin19 ning on January 1, 2009, and ending on December 

20 31, 2014, the Administrator shall reduce the quan21 tity of emission allowances that the owner or oper22 ator of the covered EGU would otherwise be eligible 

23 to receive under this section as follows: 

24 ‘‘(A) In the case of a covered EGU com25 mencing operation on or before January 1, 


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1 2019, if the date in clause (ii)(I) is earlier than 

2 the date in clause (ii)(II), by the product ob3 tained by multiplying— 

4 ‘‘(i) 20 percent; and 

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

6 have elapsed between— 

7 ‘‘(I) the earlier of— 

8 ‘‘(aa) January 1, 2020; and 

9 ‘‘(bb) the date that is 5 

10 years after the commencement of 

11 operation of the covered EGU; 

12 and 

13 ‘‘(II) the first year that the cov14 ered EGU achieves (and thereafter 

15 maintains) an emission limitation that 

16 is at least a 50-percent reduction in 

17 emissions of carbon dioxide produced 

18 by the unit, measured on an annual 

19 basis, as determined in accordance 

20 with section 812(b)(2). 

21 ‘‘(B) In the case of a covered EGU com22 mencing operation after January 1, 2019, by 

23 the product obtained by multiplying— 

24 ‘‘(i) 20 percent; and 


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

2 have elapsed between— 

3 ‘‘(I) the commencement of oper4 ation of the covered EGU; and 

5 ‘‘(II) the first year that the cov6 ered EGU achieves (and thereafter 

7 maintains) an emission limitation that 

8 is at least a 50-percent reduction in 

9 emissions of carbon dioxide produced 

10 by the unit, measured on an annual 

11 basis, as determined in accordance 

12 with section 812(b)(2). 

13 ‘‘(3) COVERED EGUS INITIALLY PERMITTED

14 FROM 2015 THROUGH 2019.—The owner or operator 

15 of a covered EGU that is initially permitted during 

16 the period beginning on January 1, 2015, and end17 ing on December 31, 2019, shall be ineligible to re18 ceive emission allowances under this section if the 

19 covered EGU, on commencement of operations (and 

20 thereafter), does not achieve and maintain an emis21 sion limitation that is at least a 50-percent reduction 

22 in emissions of carbon dioxide produced by the cov23 ered EGU, measured on an annual basis, as deter24 mined in accordance with section 812(b)(2). 

25 ‘‘(g) INDUSTRIAL SOURCES.— 


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1 ‘‘(1) EMISSION ALLOWANCES.—The Adminis2 trator— 

3 ‘‘(A) may distribute not more than 15 per4 cent of the emission allowances allocated under 

5 section 771(a)(6) for any vintage year to the 

6 owners or operators of eligible industrial 

7 sources to support the commercial-scale deploy8 ment of carbon capture and sequestration tech9 nologies at those sources; and 

10 ‘‘(B) notwithstanding any other provision 

11 of law— 

12 ‘‘(i) may distribute to eligible indus13 trial sources not more than 15 percent of 

14 the emission allowances allocated under 

15 section 771(a)(6) for any vintage year in 

16 the second tranche of phase I; but 

17 ‘‘(ii) may not distribute those allow18 ances for any vintage year in the first 

19 tranche of phase I. 

20 ‘‘(2) DISTRIBUTION.— 

21 ‘‘(A) IN GENERAL.—The Administrator 

22 shall prescribe, by regulation, requirements for 

23 the distribution of emission allowances to the 

24 owners or operators of industrial sources under 

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1 mula that awards emission allowances to quali2 fying projects on the basis of tons of carbon di3 oxide captured and permanently sequestered. 

4 ‘‘(B) METHOD.—The Administrator may 

5 provide for the distribution of emission allow6 ances pursuant to— 

7 ‘‘(i) a reverse auction method similar 

8 to the method described in subsection 

9 (e)(3), including the use of separate auc10 tions for different project categories; or 

11 ‘‘(ii) an incentive schedule similar to 

12 the schedule described in subsection (e)(4), 

13 which shall ensure that incentives are es14 tablished so as to satisfy the requirement 

15 described in subsection (e)(4)(E). 

16 ‘‘(3) REVISION OF REGULATIONS.—The Admin17 istrator shall review and, as appropriate, revise the 

18 regulations under this subsection not less frequently 

19 than once every 8 years. 

20 ‘‘(h) CERTIFICATION AND DISTRIBUTION.— 

21 ‘‘(1) CERTIFICATION.— 

22 ‘‘(A) REQUEST.— 

23 ‘‘(i) PHASE I; ALTERNATIVE DIS24 TRIBUTION METHOD.—In the case of a 

25 qualifying project that is eligible to receive 


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1 allowances under phase I or under sub2 section (e)(4), the owner or operator of the 

3 planned project may request from the Ad4 ministrator a certification that the project 

5 is eligible to receive emission allowances 

6 under this section. 

7 ‘‘(ii) REVERSE AUCTIONS.—In the 

8 case of a qualifying project that wins a re9 verse auction under subsection (e) or (g), 

10 within a reasonably brief period following 

11 completion of the auction (as specified by 

12 the Administrator), the owner or operator 

13 of the qualifying project shall request from 

14 the Administrator a certification that the 

15 project is eligible to receive emission allow16 ances under this section. 

17 ‘‘(iii) ELIGIBLE PROJECTS.—Eligible 

18 projects in phase I and phase II may re19 ceive certification under this paragraph. 

20 ‘‘(iv) ISSUANCE.—The Administrator 

21 shall issue a certification described in this 

22 subparagraph if the owner or operator 

23 demonstrates a commitment to construct 

24 and operate a project that satisfies— 


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1 ‘‘(I) the eligibility criteria of sub2 section (c); and 

3 ‘‘(II) the requirements of this 

4 subsection. 

5 ‘‘(B) DOCUMENTATION.—The Adminis6 trator shall prescribe, by regulation, the docu7 mentation necessary for making a determina8 tion of project eligibility for the certification 

9 under subparagraph (A), including— 

10 ‘‘(i) technical information regarding 

11 the capture and sequestration technology, 

12 coal type, geological formation type (if ap13 plicable), and other relevant design fea14 tures of the project; 

15 ‘‘(ii) the annual reductions in carbon 

16 dioxide emissions that the capture and se17 questration technology is projected to 

18 achieve during each of the first 10 years of 

19 the project’s commercial operation; and 

20 ‘‘(iii) a demonstration that the owner 

21 or operator is committed to both con22 structing and operating the planned 

23 project on a timeline marked by reasonable 

24 capture and sequestration milestones, 


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1 through the completion of 1 of the actions 

2 specified in subparagraph (C)(iii). 

3 ‘‘(C) COMMITMENT.— 

4 ‘‘(i) IN GENERAL.—Subject to clause 

5 (ii), the completion of any 1 of the quali6 fying actions specified under clause (iii) 

7 shall constitute a commitment to construct 

8 and operate a planned carbon capture and 

9 sequestration project. 

10 ‘‘(ii) CONDITION.—In the case of a 

11 qualifying action specified in subclause (I) 

12 or (II) of clause (iii), the completion of 

13 such an action may be subject to a condi14 tion that the Administrator will issue a 

15 certification under this paragraph for the 

16 distribution of emission allowances to the 

17 project. 

18 ‘‘(iii) QUALIFYING ACTIONS.—Quali19 fying actions under this subparagraph 

20 shall include— 

21 ‘‘(I) the execution of— 

22 ‘‘(aa) a commitment by 

23 lenders or other appropriate enti24 ties to finance the project, which 

25 may be subject to customary 


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1 closing conditions that are associ2 ated with the execution of the 

3 commitment; and 

4 ‘‘(bb) a commitment by the 

5 owner or operator of the project 

6 to execute a surety bond in suffi7 cient amounts by not later than 2 

8 years after the date on which the 

9 Administrator issues the certifi10 cation for the project; or 

11 ‘‘(II) an authorization by a State 

12 regulatory authority to allow recovery, 

13 from the retail customers of such elec14 tric utility, of the costs of the project 

15 by a State-regulated electric utility 

16 that plans to construct the project. 

17 ‘‘(D) FAILURE TO REQUEST CERTIFI18 CATION.— 

19 ‘‘(i) IN GENERAL.—An owner or oper20 ator may elect not to request a certifi21 cation on the eligibility of a planned 

22 project under subparagraph (A) prior to 

23 the commercial operation of the project. 

24 ‘‘(ii) DETERMINATION BY ADMINIS25 TRATOR.—If an owner or operator elects 


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1 not to request a certification under clause 

2 (i), the Administrator shall make a deter3 mination regarding whether the project 

4 satisfies the eligibility requirements of sub5 section (c) at the time that the Adminis6 trator makes a determination regarding 

7 the annual distribution of emission allow8 ances under paragraph (3)(A). 

9 ‘‘(2) RESERVATION OF EMISSION ALLOW10 ANCES.— 

11 ‘‘(A) AMOUNT.— 

12 ‘‘(i) IN GENERAL.—For each project 

13 that receives a certification of eligibility 

14 under paragraph (1), the Administrator 

15 shall reserve on a first-come, first-served 

16 basis a portion of the emission allowances 

17 that are allocated for the deployment of 

18 carbon capture and sequestration tech19 nology under section 771(a)(6). 

20 ‘‘(ii) DETERMINATION.—The reserva21 tion of emission allowances for a particular 

22 eligible project under this paragraph shall 

23 be equal to the number of emission allow24 ances that the project is entitled to receive 

25 under the applicable distribution method 


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1 under this section upon commercial oper2 ation of the carbon capture and sequestra3 tion technology, as determined by the Ad4 ministrator based on— 

5 ‘‘(I) the applicable bonus allow6 ance value; 

7 ‘‘(II) the number of tons of car8 bon dioxide emissions projected to be 

9 captured and sequestered each cal10 endar year under paragraph 

11 (1)(B)(i)(II); and 

12 ‘‘(III) a discount rate to account 

13 for the monetary inflation that may 

14 be expected to occur during each of 

15 the relevant 10 calendar years, as de16 termined by the Administrator. 

17 ‘‘(B) TERMINATION OF RESERVATION.— 

18 ‘‘(i) IN GENERAL.—A reservation of 

19 emission allowances for a particular project 

20 under subparagraph (A) shall terminate if 

21 the owner or operator fails to achieve rea22 sonable milestones for commencing con23 struction or commercial operation of the 

24 project, as specified under paragraph 

25 (1)(B)(i)(III). 


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1 ‘‘(ii) REDUCED QUANTITY OF CARBON

2 DIOXIDE CAPTURED AND SEQUESTERED.— 

3 If the quantity of carbon dioxide captured 

4 and sequestered by a project on average 

5 over 3 consecutive vintage years is less 

6 than the quantity estimated for those vin7 tage years under subparagraph (A), the 

8 reservation of emission allowances for the 

9 project under subparagraph (A) shall be 

10 reduced in future years by the difference 

11 between— 

12 ‘‘(I) the quantity of carbon diox13 ide captured and sequestered on aver14 age over the applicable 3 consecutive 

15 years; and 

16 ‘‘(II) the quantity estimated 

17 under subparagraph (A) for the appli18 cable years. 

19 ‘‘(iii) AVAILABILITY.—The Adminis20 trator shall immediately make available to 

21 other eligible projects emission allowances 

22 for which the Administrator has termi23 nated an emission allowance reservation 

24 for a particular project under this subpara25 graph. 


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1 ‘‘(3) DISTRIBUTION PROCESS.— 

2 ‘‘(A) ANNUAL DISTRIBUTION.—The Ad3 ministrator shall distribute the emission allow4 ances to eligible projects on an annual basis. 

5 ‘‘(B) BASIS.—The annual distribution of 

6 emission allowances shall be based on the total 

7 tons of carbon dioxide that the project annually 

8 captures and sequesters during each of the first 

9 10 years of commercial operation, in accordance 

10 with subsection (c)(2). 

11 ‘‘(C) TOTAL DISTRIBUTION AMOUNT.—The 

12 total amount of emission allowances distributed 

13 to an eligible project for each of the first 10 

14 years of commercial operation may be greater 

15 than, or less than, the quantity of emissions al16 lowances that the Administrator has reserved 

17 for the eligible project under paragraph (2). 

18 ‘‘(D) REPORTS.— 

19 ‘‘(i) IN GENERAL.—Except as pro20 vided in subparagraph (B), the Adminis21 trator shall make each annual distribution 

22 of emission allowances by not later than 90 

23 days after the date on which the owner or 

24 operator of a project submits to the Ad25 ministrator a report regarding the carbon 


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1 dioxide emissions captured and sequestered 

2 for a particular year by the project. 

3 ‘‘(ii) REQUIREMENT.—A report under 

4 subclause (I) shall be verified in accord5 ance with regulations to be promulgated by 

6 the Administrator. 

7 ‘‘(i) LIMITATIONS.— 

8 ‘‘(1) IN GENERAL.—Emission allowances shall 

9 be distributed under this section only for tons of car10 bon dioxide emissions that have already been cap11 tured and sequestered. 

12 ‘‘(2) PERIOD.—A qualifying project may receive 

13 annual emission allowances under this section only 

14 for the first 10 years of operation. 

15 ‘‘(3) CAPACITY.— 

16 ‘‘(A) IN GENERAL.—Approximately 72 

17 gigawatts of total cumulative treated generating 

18 capacity may receive emission allowances under 

19 this section. 

20 ‘‘(B) ALLOWANCE SURPLUS.—On reaching 

21 the cumulative capacity described in subpara22 graph (A), any emission allowances that are al23 located for carbon capture and sequestration 

24 deployment under section 771(a)(6) and are not 

25 yet obligated under this section shall be treated 


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1 as emission allowances not designated for dis2 tribution for purposes of section 771(b)(2). 

3 ‘‘(j) EXHAUSTION OF ACCOUNT AND ANNUAL ROLL4 OVER OF SURPLUS EMISSION ALLOWANCES.— 

5 ‘‘(1) IN GENERAL.—In distributing emission al6 lowances under this section, the Administrator shall 

7 ensure that eligible projects receive distributions of 

8 emission allowances for the first 10 years of com9 mercial operation. 

10 ‘‘(2) DIFFERENT VINTAGE YEARS.— 

11 ‘‘(A) DETERMINATION.—If the Adminis12 trator determines that the emission allowances 

13 allocated under section 771(a)(6) with a vintage 

14 year that matches the year of distribution will 

15 be exhausted once the estimated full 10-year 

16 distributions will be provided to current eligible 

17 participants, the Administrator shall provide to 

18 new eligible projects emission allowances from 

19 vintage years after the year of the distribution. 

20 ‘‘(B) DIVERSITY FACTORS.—If the Admin21 istrator provides allowances to new eligible 

22 projects under subparagraph (A), the Adminis23 trator shall promulgate regulations to prioritize 

24 new eligible projects that are distinguished from 

25 prior recipients of allowances by 1 or more of 


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1 the following diversity factors (without regard 

2 to order): 

3 ‘‘(i) Location in a coal-producing re4 gion that provides a majority of coal to the 

5 project. 

6 ‘‘(ii) Coal type, including waste coal. 

7 ‘‘(iii) Capture and transportation 

8 technologies. 

9 ‘‘(iv) Geological formations. 

10 ‘‘(v) New units and retrofit applica11 tions. 

12 ‘‘(k) ALLOCATION OF ALLOWANCES FOR DEPLOY13 MENT OF CARBON CAPTURE AND SEQUESTRATION TECH14 NOLOGY.— 

15 ‘‘(1) ANNUAL ALLOCATION.—The Adminis16 trator shall allocate emission allowances for the de17 ployment of carbon capture and sequestration tech18 nology in accordance with this section in the fol19 lowing quantities: 

20 ‘‘(A) For each of vintage years 2014 

21 through 2017, 1.75 percent of the emission al22 lowances established for each year under section 

23 721(a). 


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1 ‘‘(B) For each of vintage years 2018 and 

2 2019, 4.75 percent of the emission allowances 

3 established for each year under section 721(a). 

4 ‘‘(C) For each of vintage years 2020 

5 through 2050, 5 percent of the emission allow6 ances established for each year under section 

7 721(a). 

8 ‘‘(2) CARRYOVER.—If the Administrator has 

9 not distributed all of the allowances allocated pursu10 ant to this subsection for a given vintage year by the 

11 end of that year, the Administrator shall— 

12 ‘‘(A) auction those emission allowances in 

13 accordance with section 778 by not later than 

14 March 31 of the year following that vintage 

15 year; and 

16 ‘‘(B) increase the allocation under this 

17 subsection for the vintage year after the vintage 

18 year for which emission allowances were 

19 undisbursed by the quantity of undisbursed 

20 emission allowances, but only to the extent that 

21 allowances for that later year are to be auc22 tioned. 

23 ‘‘(l) DAVIS-BACON COMPLIANCE.— 

24 ‘‘(1) IN GENERAL.—All laborers and mechanics 

25 employed on projects funded directly by or assisted 


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1 in whole or in part by this section through the use 

2 of emission allowances shall be paid wages at rates 

3 not less than those prevailing on projects of a char4 acter similar in the locality as determined by the 

5 Secretary of Labor in accordance with subchapter 

6 IV of chapter 31 of title 40, United States Code. 

7 ‘‘(2) AUTHORITY.—With respect to the labor 

8 standards specified in this subsection, the Secretary 

9 of Labor shall have the authority and functions set 

10 forth in Reorganization Plan Numbered 14 of 1950 

11 (64 Stat. 1267; 5 U.S.C. App.) and section 3145 of 

12 title 40, United States Code. 

13 ‘‘SEC. 781. OVERSIGHT OF ALLOCATIONS. 

14 ‘‘(a) IN GENERAL.—Not later than January 1, 2014, 

15 and every 2 years thereafter, the Comptroller General of 

16 the United States shall carry out a review of programs 

17 administered by the Federal Government that distribute 

18 emission allowances or funds from any Federal auction of 

19 allowances. 

20 ‘‘(b) CONTENTS.—Each such report shall include a 

21 comprehensive evaluation of the administration and effec22 tiveness of each program, including— 

23 ‘‘(1) the efficiency, transparency, and sound24 ness of the administration of each program; 


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1 ‘‘(2) the performance of activities receiving as2 sistance under each program; 

3 ‘‘(3) the cost-effectiveness of each program in 

4 achieving the stated purposes of the program; and 

5 ‘‘(4) recommendations, if any, for regulatory or 

6 administrative changes to each program to improve 

7 its effectiveness. 

8 ‘‘(c) FOCUS.—In evaluating program performance, 

9 each review under this section review shall address the ef10 fectiveness of such programs in— 

11 ‘‘(1) creating and preserving jobs; 

12 ‘‘(2) ensuring a manageable transition for 

13 working families and workers; 

14 ‘‘(3) reducing the emissions, or enhancing se15 questration, of greenhouse gases; 

16 ‘‘(4) developing clean technologies; and 

17 ‘‘(5) building resilience to the impacts of cli18 mate change. 

19 ‘‘SEC. 782. EARLY ACTION RECOGNITION. 

20 ‘‘(a) IN GENERAL.—Emission allowances allocated 

21 pursuant to section 771(a)(7) shall be distributed by the 

22 Administrator in accordance with this section. Not later 

23 than 1 year after the date of enactment of this title, the 

24 Administrator shall issue regulations allowing— 


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1 ‘‘(1) any person in the United States to ex2 change instruments in the nature of offset credits 

3 issued before January 1, 2009, by a State, local, or 

4 voluntary offset program with respect to which the 

5 Administrator has made an affirmative determina6 tion under section 740(a)(2), for emission allowances 

7 established by the Administrator under section 

8 721(a); and 

9 ‘‘(2) the Administrator to provide compensation 

10 in the form of emission allowances to entities, in11 cluding units of local government, that do not meet 

12 the criteria of paragraph (1) and meet the criteria 

13 of this paragraph for documented early reductions or 

14 avoidance of greenhouse gas emissions or greenhouse 

15 gases sequestered before January 1, 2009, from 

16 projects or process improvements begun before Jan17 uary 1, 2009, where— 

18 ‘‘(A) the entity publicly stated greenhouse 

19 gas reduction goals and publicly reported 

20 against those goals; 

21 ‘‘(B) the entity demonstrated entity-wide 

22 net greenhouse gas reductions; and 

23 ‘‘(C) the entity demonstrates the actual 

24 projects or process improvements undertaken to 

25 make reductions and documents the reductions 


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1 (such as through documentation of engineering 

2 projects). 

3 ‘‘(b) REGULATIONS.—Regulations issued under sub4 section (a) shall— 

5 ‘‘(1) provide that a person exchanging credits 

6 under subsection (a)(1) receive emission allowances 

7 established under section 721(a) in an amount for 

8 which the monetary value is equivalent to the aver9 age monetary value of the credits during the period 

10 from January 1, 2006, to January 1, 2009, as ad11 justed for inflation to reflect current dollar values at 

12 the time of the exchange; 

13 ‘‘(2) provide that a person receiving compensa14 tion for documented early action under subsection 

15 (a)(2) shall receive emission allowances established 

16 under section 721(a) in an amount that is approxi17 mately equivalent in value to the carbon dioxide 

18 equivalent per ton value received by entities in ex19 change for credits under paragraph (1) (as adjusted 

20 for inflation to reflect current dollar values at the 

21 time of the exchange), as determined by the Admin22 istrator; 

23 ‘‘(3) provide that only reductions or avoidance 

24 of greenhouse gas emissions, or sequestration of 

25 greenhouse gases, achieved by activities in the 


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1 United States between January 1, 2001, and Janu2 ary 1, 2009, may be compensated under this section, 

3 and only credits issued for such activities may be ex4 changed under this section; 

5 ‘‘(4) provide that only credits that have not 

6 been retired or otherwise used to meet a voluntary 

7 or mandatory commitment, and have not expired, 

8 may be exchanged under subsection (a)(1); 

9 ‘‘(5) require that, once exchanged, the credit be 

10 retired for purposes of use under the program by or 

11 for which it was originally issued; and 

12 ‘‘(6) establish a deadline by which persons must 

13 exchange the credits or request compensation for 

14 early action under this section. 

15 ‘‘(c) PARTICIPATION.—Participation in an exchange 

16 of credits for allowances or compensation for early action 

17 authorized by this section shall not preclude any person 

18 from participation in an offset credit program established 

19 under part D. 

20 ‘‘(d) DISTRIBUTION.—Of the emission allowances 

21 distributed under this section, a quantity equal to 0.75 

22 percent of vintage year 2012 emission allowances estab23 lished under section 721(a) shall be distributed pursuant 

24 to subsection (a)(1), and a quantity equal to 0.25 percent 

25 of vintage year 2012 emission allowances established 


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1 under section 721(a) shall be distributed pursuant to sub2 section (a)(2). 

3 ‘‘SEC. 783. ESTABLISHMENT OF DEFICIT REDUCTION FUND. 

4 ‘‘(a) DEFICIT REDUCTION FUND.—There is estab5 lished in the Treasury of the United States a fund, to be 

6 known as the ‘Deficit Reduction Fund’. 

7 ‘‘(b) DISBURSEMENTS.—No disbursement shall be 

8 made from the Deficit Reduction Fund except pursuant 

9 to an appropriation Act.’’. 

10 Subtitle C—Additional Greenhouse 

11 Gas Standards 

12 SEC. 121. GREENHOUSE GAS STANDARDS. 

13 The Clean Air Act (42 U.S.C. 7401 et seq.), as 

14 amended by subtitles A and B of this title, is further 

15 amended by adding the following new title after title VII: 

16 ‘‘TITLE VIII—ADDITIONAL 

17 GREENHOUSE GAS STANDARDS 

18 ‘‘SEC. 801. DEFINITIONS. 

19 ‘‘For purposes of this title, terms that are defined 

20 in title VII, except for the term ‘stationary source’, shall 

21 have the meanings given those terms in title VII. 

22 ‘‘PART A—STATIONARY SOURCE STANDARDS 

23 ‘‘SEC. 811. STANDARDS OF PERFORMANCE. 

24 ‘‘(a) DEFINITION OF UNCAPPED GREENHOUSE GAS

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1 house gas emissions’ means those greenhouse gas emis2 sions to which section 722 does not apply. 

3 ‘‘(b) STANDARDS.—Before January 1, 2020, the Ad4 ministrator shall not promulgate new source performance 

5 standards for greenhouse gases under section 111 that are 

6 applicable to any stationary source that— 

7 ‘‘(1) emits uncapped greenhouse gas emissions; 

8 and 

9 ‘‘(2) qualifies as an eligible offset project pursu10 ant to section 733 that is eligible to receive an offset 

11 credit pursuant to section 737.’’. 

12 SEC. 122. HFC REGULATION. 

13 (a) IN GENERAL.—Title VI of the Clean Air Act (42 

14 U.S.C. 7671 et seq.) (relating to stratospheric ozone pro15 tection) is amended by adding at the end the following: 

16 ‘‘SEC. 619. HYDROFLUOROCARBONS (HFCS). 

17 ‘‘(a) TREATMENT AS CLASS II, GROUP II SUB18 STANCES.—Except as otherwise provided in this section, 

19 hydrofluorocarbons shall be treated as class II substances 

20 for purposes of applying the provisions of this title. The 

21 Administrator shall establish two groups of class II sub22 stances. Class II, group I substances shall include all 

23 hydrochlorofluorocarbons (HCFCs) listed pursuant to sec24 tion 602(b). Class II, group II substances shall include 

25 each of the following: 


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1 ‘‘(1) Hydrofluorocarbon-23 (HFC–23). 

2 ‘‘(2) Hydrofluorocarbon-32 (HFC–32). 

3 ‘‘(3) Hydrofluorocarbon-41 (HFC–41). 

4 ‘‘(4) Hydrofluorocarbon-125 (HFC–125). 

5 ‘‘(5) Hydrofluorocarbon-134 (HFC–134). 

6 ‘‘(6) Hydrofluorocarbon-134a (HFC–134a). 

7 ‘‘(7) Hydrofluorocarbon-143 (HFC–143). 

8 ‘‘(8) Hydrofluorocarbon-143a (HFC–143a). 

9 ‘‘(9) Hydrofluorocarbon-152 (HFC–152). 

10 ‘‘(10) Hydrofluorocarbon-152a (HFC–152a). 

11 ‘‘(11) Hydrofluorocarbon-227ea (HFC–227ea). 

12 ‘‘(12) Hydrofluorocarbon-236cb (HFC–236cb). 

13 ‘‘(13) Hydrofluorocarbon-236ea (HFC–236ea). 

14 ‘‘(14) Hydrofluorocarbon-236fa (HFC–236fa). 

15 ‘‘(15) Hydrofluorocarbon-245ca (HFC–245ca). 

16 ‘‘(16) Hydrofluorocarbon-245fa (HFC–245fa). 

17 ‘‘(17) Hydrofluorocarbon-365mfc (HFC– 

18 365mfc). 

19 ‘‘(18) Hydrofluorocarbon-43-10mee (HFC–43– 

20 10mee). 

21 ‘‘(19) Hydrofluoroolefin-1234yf (HFO–1234yf). 

22 ‘‘(20) Hydrofluoroolefin-1234ze (HFO–1234ze). 

23 Not later than 6 months after the date of enactment of 

24 this title, the Administrator shall publish an initial list of 

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1 stances listed in this subsection. The Administrator may 

2 add to the list of class II, group II substances any other 

3 substance used as a substitute for a class I or II substance 

4 if the Administrator determines that 1 metric ton of the 

5 substance makes the same or greater contribution to glob6 al warming over 100 years as 1 metric ton of carbon diox7 ide. Within 24 months after the date of enactment of this 

8 section, the Administrator shall amend the regulations 

9 under this title (including the regulations referred to in 

10 sections 603, 608, 609, 610, 611, 612, and 613) to apply 

11 to class II, group II substances. 

12 ‘‘(b) CONSUMPTION AND PRODUCTION OF CLASS II, 

13 GROUP II SUBSTANCES.— 

14 ‘‘(1) IN GENERAL.— 

15 ‘‘(A) CONSUMPTION PHASE DOWN.—In the 

16 case of class II, group II substances, in lieu of 

17 applying section 605 and the regulations there18 under, the Administrator shall promulgate reg19 ulations phasing down the consumption of class 

20 II, group II substances in the United States, 

21 and the importation of products containing any 

22 class II, group II substance, in accordance with 

23 this subsection within 18 months after the date 

24 of enactment of this section. Effective January 

25 1, 2012, it shall be unlawful for any person to 


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1 produce any class II, group II substance, im2 port any class II, group II substance, or import 

3 any product containing any class II, group II 

4 substance without holding one consumption al5 lowance or one destruction offset credit for each 

6 carbon dioxide equivalent ton of the class II, 

7 group II substance. Any person who exports a 

8 class II, group II substance for which a con9 sumption allowance was retired may receive a 

10 refund of that allowance from the Adminis11 trator following the export. 

12 ‘‘(B) PRODUCTION.—If the United States 

13 becomes a party or otherwise adheres to a mul14 tilateral agreement, including any amendment 

15 to the Montreal Protocol on Substances That 

16 Deplete the Ozone Layer, that restricts the pro17 duction of class II, group II substances, the Ad18 ministrator shall promulgate regulations estab19 lishing a baseline for the production of class II, 

20 group II substances in the United States and 

21 phasing down the production of class II, group 

22 II substances in the United States, in accord23 ance with such multilateral agreement and sub24 ject to the same exceptions and other provisions 

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1 sumption of class II, group II substances under 

2 this section (except that the Administrator shall 

3 not require a person who obtains production al4 lowances from the Administrator to make pay5 ment for such allowances if the person is mak6 ing payment for a corresponding quantity of 

7 consumption allowances of the same vintage 

8 year). Upon the effective date of such regula9 tions, it shall be unlawful for any person to 

10 produce any class II, group II substance with11 out holding one consumption allowance and one 

12 production allowance, or one destruction offset 

13 credit, for each carbon dioxide equivalent ton of 

14 the class II, group II substance. 

15 ‘‘(C) INTEGRITY OF LIMITS.—To maintain 

16 the integrity of the class II, group II limits, the 

17 Administrator may, through rulemaking, limit 

18 the percentage of each person’s compliance obli19 gation that may be met through the use of de20 struction offset credits or banked allowances. 

21 ‘‘(D) COUNTING OF VIOLATIONS.—Each 

22 consumption allowance, production allowance, 

23 or destruction offset credit not held as required 

24 by this section shall be a separate violation of 

25 this section. 


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1 ‘‘(2) SCHEDULE.—Pursuant to the regulations 

2 promulgated pursuant to paragraph (1)(A), the 

3 number of class II, group II consumption allowances 

4 established by the Administrator for each calendar 

5 year beginning in 2012 shall be the following per6 centage of the baseline, as established by the Admin7 istrator pursuant to paragraph (3): 

‘‘Calendar Year Percent of Baseline 

2012 90 

2013 87.5 

2014 85 

2015 82.5 

2016 80 

2017 77.5 

2018 75 

2019 71 

2020 67 

2021 63 

2022 59 

2023 54 

2024 50 

2025 46 

2026 42 

2027 38 

2028 34 

2029 30 

2030 25 


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‘‘Calendar Year Percent of Baseline 

2031 21 

2032 17 

after 2032 15 

1 ‘‘(3) BASELINE.—(A) Within 12 months after 

2 the date of enactment of this section, the Adminis3 trator shall promulgate regulations to establish the 

4 baseline for purposes of paragraph (2). The baseline 

5 shall be the sum, expressed in metric tons of carbon 

6 dioxide equivalents, of— 

7 ‘‘(i) the annual average consumption of all 

8 class II substances in calendar years 2004, 

9 2005, and 2006; plus 

10 ‘‘(ii) the annual average quantity of all 

11 class II substances contained in imported prod12 ucts in calendar years 2004, 2005, and 2006. 

13 ‘‘(B) Notwithstanding subparagraph (A), if the 

14 Administrator determines that the baseline is higher 

15 than 370 million metric tons of carbon dioxide 

16 equivalents, then the Administrator shall establish 

17 the baseline at 370 million metric tons of carbon di18 oxide equivalents. 

19 ‘‘(C) Notwithstanding subparagraph (A), if the 

20 Administrator determines that the baseline is lower 

21 than 280 million metric tons of carbon dioxide 


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1 equivalents, then the Administrator shall establish 

2 the baseline at 280 million metric tons of carbon di3 oxide equivalents. 

4 ‘‘(4) DISTRIBUTION OF ALLOWANCES.— 

5 ‘‘(A) IN GENERAL.—Pursuant to the regu6 lations promulgated under paragraph (1)(A), 

7 for each calendar year beginning in 2012, the 

8 Administrator shall sell consumption allowances 

9 in accordance with this paragraph. 

10 ‘‘(B) ESTABLISHMENT OF POOLS.—The 

11 Administrator shall establish two allowance 

12 pools. Eighty percent of the consumption allow13 ances available for a calendar year shall be 

14 placed in the producer-importer pool, and 20 

15 percent of the consumption allowances available 

16 for a calendar year shall be placed in the sec17 ondary pool. 

18 ‘‘(C) PRODUCER-IMPORTER POOL.— 

19 ‘‘(i) AUCTION.—(I) For each calendar 

20 year, the Administrator shall offer for sale 

21 at auction the following percentage of the 

22 consumption allowances in the producer23 importer pool: 

‘‘Calendar Year Percent Available for Auction 

2012 10 


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‘‘Calendar Year Percent Available for Auction 

2013 20 

2014 30 

2015 40 

2016 50 

2017 60 

2018 70 

2019 80 

2020 and thereafter 90 

1 ‘‘(II) Any person who produced or im2 ported any class II substance during cal3 endar year 2004, 2005, or 2006 may par4 ticipate in the auction. No other persons 

5 may participate in the auction unless per6 mitted to do so pursuant to subclause 

7 (III). 

8 ‘‘(III) Not later than 3 years after the 

9 date of the initial auction and from time to 

10 time thereafter, the Administrator shall de11 termine through rulemaking whether any 

12 persons who did not produce or import a 

13 class II substance during calendar year 

14 2004, 2005, or 2006 will be permitted to 

15 participate in future auctions. The Admin16 istrator shall base this determination on 

17 the duration, consistency, and scale of such 


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1 person’s purchases of consumption allow2 ances in the secondary pool under subpara3 graph (D)(ii)(III), as well as economic or 

4 technical hardship and other factors 

5 deemed relevant by the Administrator. 

6 ‘‘(IV) The Administrator shall set a 

7 minimum bid per consumption allowance of 

8 the following: 

9 ‘‘(aa) For vintage year 2012, 

10 $1.00. 

11 ‘‘(bb) For vintage year 2013, 

12 $1.20. 

13 ‘‘(cc) For vintage year 2014, 

14 $1.40. 

15 ‘‘(dd) For vintage year 2015, 

16 $1.60. 

17 ‘‘(ee) For vintage year 2016, 

18 $1.80. 

19 ‘‘(ff) For vintage year 2017, 

20 $2.00. 

21 ‘‘(gg) For vintage year 2018 and 

22 thereafter, $2.00 adjusted for infla23 tion after vintage year 2017 based 

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1 lished by the Department of Com2 merce. 

3 ‘‘(ii) NON-AUCTION SALE.—(I) For 

4 each calendar year, as soon as practicable 

5 after auction, the Administrator shall offer 

6 for sale the remaining consumption allow7 ances in the producer-importer pool at the 

8 following prices: 

9 ‘‘(aa) A fee of $1.00 per vintage 

10 year 2012 allowance. 

11 ‘‘(bb) A fee of $1.20 per vintage 

12 year 2013 allowance. 

13 ‘‘(cc) A fee of $1.40 per vintage 

14 year 2014 allowance. 

15 ‘‘(dd) For each vintage year 

16 2015 allowance, a fee equal to the av17 erage of $1.10 and the auction clear18 ing price for vintage year 2014 allow19 ances. 

20 ‘‘(ee) For each vintage year 2016 

21 allowance, a fee equal to the average 

22 of $1.30 and the auction clearing 

23 price for vintage year 2015 allow24 ances. 


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1 ‘‘(ff) For each vintage year 2017 

2 allowance, a fee equal to the average 

3 of $1.40 and the auction clearing 

4 price for vintage year 2016 allow5 ances. 

6 ‘‘(gg) For each allowance of vin7 tage year 2018 and subsequent vin8 tage years, a fee equal to the auction 

9 clearing price for that vintage year. 

10 ‘‘(II) The Administrator shall offer to 

11 sell the remaining consumption allowances 

12 in the producer-importer pool to producers 

13 of class II, group II substances and im14 porters of class II, group II substances in 

15 proportion to their relative allocation 

16 share. 

17 ‘‘(III) Such allocation share for such 

18 sale shall be determined by the Adminis19 trator using such producer’s or importer’s 

20 annual average data on class II substances 

21 from calendar years 2004, 2005, and 

22 2006, on a carbon dioxide equivalent basis, 

23 and— 

24 ‘‘(aa) shall be based on a pro25 ducer’s production, plus importation, 


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1 plus acquisitions and purchases from 

2 persons who produced class II sub3 stances in the United States during 

4 calendar year 2004, 2005, or 2006, 

5 less exportation, less transfers and 

6 sales to persons who produced class II 

7 substances in the United States dur8 ing calendar year 2004, 2005, or 

9 2006; and 

10 ‘‘(bb) for an importer of class II 

11 substances that did not produce in the 

12 United States any class II substance 

13 during calendar years 2004, 2005, 

14 and 2006, shall be based on the im15 porter’s importation less exportation. 

16 For purposes of item (aa), the Adminis17 trator shall account for 100 percent of 

18 class II, group II substances and 60 per19 cent of class II, group I substances. For 

20 purposes of item (bb), the Administrator 

21 shall account for 100 percent of class II, 

22 group II substances and 100 percent of 

23 class II, group I substances. 

24 ‘‘(IV) Any consumption allowances 

25 made available for nonauction sale to a 


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1 specific producer or importer of class II, 

2 group II substances but not purchased by 

3 the specific producer or importer shall be 

4 made available for sale to any producer or 

5 importer of class II substances during cal6 endar year 2004, 2005, or 2006. If de7 mand for such consumption allowances ex8 ceeds supply of such consumption allow9 ances, the Administrator shall develop and 

10 utilize criteria for the sale of such con11 sumption allowances that may include pro 

12 rata shares, historic production and impor13 tation, economic or technical hardship, or 

14 other factors deemed relevant by the Ad15 ministrator. If the supply of such con16 sumption allowances exceeds demand, the 

17 Administrator may offer such consumption 

18 allowances for sale in the secondary pool as 

19 set forth in subparagraph (D). 

20 ‘‘(D) SECONDARY POOL.—(i) For each cal21 endar year, as soon as practicable after the auc22 tion required in subparagraph (C), the Adminis23 trator shall offer for sale the consumption al24 lowances in the secondary pool at the prices 

25 listed in subparagraph (C)(ii). 


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1 ‘‘(ii) The Administrator shall accept appli2 cations for purchase of secondary pool con3 sumption allowances from— 

4 ‘‘(I) importers of products containing 

5 class II, group II substances; 

6 ‘‘(II) persons who purchased any class 

7 II, group II substance directly from a pro8 ducer or importer of class II, group II sub9 stances for use in a product containing a 

10 class II, group II substance, a manufac11 turing process, or a reclamation process; 

12 ‘‘(III) persons who did not produce or 

13 import a class II substance during cal14 endar year 2004, 2005, or 2006, but who 

15 the Administrator determines have subse16 quently taken significant steps to produce 

17 or import a substantial quantity of any 

18 class II, group II substance; and 

19 ‘‘(IV) persons who produced or im20 ported any class II substance during cal21 endar year 2004, 2005, or 2006. 

22 ‘‘(iii) If the supply of consumption allow23 ances in the secondary pool equals or exceeds 

24 the demand for consumption allowances in the 

25 secondary pool as presented in the applications 


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1 for purchase, the Administrator shall sell the 

2 consumption allowances in the secondary pool 

3 to the applicants in the amounts requested in 

4 the applications for purchase. Any consumption 

5 allowances in the secondary pool not purchased 

6 in a calendar year may be rolled over and added 

7 to the quantity available in the secondary pool 

8 in the following year. 

9 ‘‘(iv) If the demand for consumption allow10 ances in the secondary pool as presented in the 

11 applications for purchase exceeds the supply of 

12 consumption allowances in the secondary pool, 

13 the Administrator shall sell the consumption al14 lowances as follows: 

15 ‘‘(I) The Administrator shall first sell 

16 the consumption allowances in the sec17 ondary pool to any importers of products 

18 containing class II, group II substances in 

19 the amounts requested in their applications 

20 for purchase. If the demand for such con21 sumption allowances exceeds supply of 

22 such consumption allowances, the Adminis23 trator shall develop and utilize criteria for 

24 the sale of such consumption allowances 

25 among importers of products containing 


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1 class II, group II substances that may in2 clude pro rata shares, historic importation, 

3 economic or technical hardship, or other 

4 factors deemed relevant by the Adminis5 trator. 

6 ‘‘(II) The Administrator shall next 

7 sell any remaining consumption allowances 

8 to persons identified in subclauses (II) and 

9 (III) of clause (ii) in the amounts re10 quested in their applications for purchase. 

11 If the demand for such consumption allow12 ances exceeds remaining supply of such 

13 consumption allowances, the Administrator 

14 shall develop and utilize criteria for the 

15 sale of such consumption allowances 

16 among subclauses (II) and (III) applicants 

17 that may include pro rata shares, historic 

18 use, economic or technical hardship, or 

19 other factors deemed relevant by the Ad20 ministrator. 

21 ‘‘(III) The Administrator shall then 

22 sell any remaining consumption allowances 

23 to persons who produced or imported any 

24 class II substance during calendar year 

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1 quested in their applications for purchase. 

2 If demand for such consumption allow3 ances exceeds remaining supply of such 

4 consumption allowances, the Administrator 

5 shall develop and utilize criteria for the 

6 sale of such consumption allowances that 

7 may include pro rata shares, historic pro8 duction and importation, economic or tech9 nical hardship, or other factors deemed rel10 evant by the Administrator. 

11 ‘‘(IV) Each person who purchases 

12 consumption allowances in a non-auction 

13 sale under this subparagraph shall be re14 quired to disclose the person or entity 

15 sponsoring or benefitting from the pur16 chases if such person or entity is, in whole 

17 or in part, other than the purchaser or the 

18 purchaser’s employer. 

19 ‘‘(E) DISCRETION TO WITHHOLD ALLOW20 ANCES.—Nothing in this paragraph prevents 

21 the Administrator from exercising discretion to 

22 withhold and retire consumption allowances 

23 that would otherwise be available for auction or 

24 nonauction sale. Not later than 18 months after 

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1 ministrator shall promulgate regulations estab2 lishing criteria for withholding and retiring con3 sumption allowances. 

4 ‘‘(5) BANKING.—A consumption allowance or 

5 destruction offset credit may be used to meet the 

6 compliance obligation requirements of paragraph (1) 

7 in— 

8 ‘‘(A) the vintage year for the allowance or 

9 destruction offset credit; or 

10 ‘‘(B) any calendar year subsequent to the 

11 vintage year for the allowance or destruction 

12 offset credit. 

13 ‘‘(6) AUCTIONS.— 

14 ‘‘(A) INITIAL REGULATIONS.—Not later 

15 than 18 months after the date of enactment of 

16 this section, the Administrator shall promulgate 

17 regulations governing the auction of allowances 

18 under this section. Such regulations shall in19 clude the following requirements: 

20 ‘‘(i) FREQUENCY; FIRST AUCTION.— 

21 Auctions shall be held one time per year at 

22 regular intervals, with the first auction to 

23 be held no later than October 31, 2011. 


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1 ‘‘(ii) AUCTION FORMAT.—Auctions 

2 shall follow a single-round, sealed-bid, uni3 form price format. 

4 ‘‘(iii) FINANCIAL ASSURANCE.—The 

5 Administrator may establish financial as6 surance requirements to ensure that auc7 tion participants can and will perform on 

8 their bids. 

9 ‘‘(iv) DISCLOSURE OF BENEFICIAL

10 OWNERSHIP.—Each bidder in the auction 

11 shall be required to disclose the person or 

12 entity sponsoring or benefitting from the 

13 bidder’s participation in the auction if such 

14 person or entity is, in whole or in part, 

15 other than the bidder. 

16 ‘‘(v) PUBLICATION OF INFORMA17 TION.—After the auction, the Adminis18 trator shall, in a timely fashion, publish 

19 the number of bidders, number of winning 

20 bidders, the quantity of allowances sold, 

21 and the auction clearing price. 

22 ‘‘(vi) BIDDING LIMITS IN 2012.—In 

23 the vintage year 2012 auction, no auction 

24 participant may, directly or in concert with 

25 another participant, bid for or purchase 


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1 more allowances offered for sale at the 

2 auction than the greater of— 

3 ‘‘(I) the number of allowances 

4 which, when added to the number of 

5 allowances available for purchase by 

6 the participant in the producer-im7 porter pool non-auction sale, would 

8 equal the participant’s annual average 

9 consumption of class II, group II sub10 stances in calendar years 2004, 2005, 

11 and 2006; or 

12 ‘‘(II) the number of allowances 

13 equal to the product of— 

14 ‘‘(aa) 1.20 multiplied by the 

15 participant’s allocation share of 

16 the producer-importer pool non17 auction sale as determined under 

18 paragraph (4)(C)(ii); and 

19 ‘‘(bb) the number of vintage 

20 year 2012 allowances offered at 

21 auction. 

22 ‘‘(vii) BIDDING LIMITS IN 2013.—In 

23 the vintage year 2013 auction, no auction 

24 participant may, directly or in concert with 

25 another participant, bid for or purchase 


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1 more allowances offered for sale at the 

2 auction than the product of— 

3 ‘‘(I) 1.15 multiplied by the ratio 

4 of the total number of vintage year 

5 2012 allowances purchased by the 

6 participant from the auction and from 

7 the producer-importer pool non-auc8 tion sale to the total number of vin9 tage year 2012 allowances in the pro10 ducer-importer pool; and 

11 ‘‘(II) the number of vintage year 

12 2013 allowances offered at auction. 

13 ‘‘(viii) BIDDING LIMITS IN SUBSE14 QUENT YEARS.—In the auctions for vin15 tage year 2014 and subsequent vintage 

16 years, no auction participant may, directly 

17 or in concert with another participant, bid 

18 for or purchase more allowances offered 

19 for sale at the auction than the product 

20 of— 

21 ‘‘(I) 1.15 multiplied by the ratio 

22 of the highest number of allowances 

23 required to be held by the participant 

24 in any of the three prior vintage years 

25 to meet its compliance obligation 


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1 under paragraph (1) to the total num2 ber of allowances in the producer-im3 porter pool for such vintage year; and 

4 ‘‘(II) the number of allowances 

5 offered at auction for that vintage 

6 year. 

7 ‘‘(ix) OTHER REQUIREMENTS.—The 

8 Administrator may include in the regula9 tions such other requirements or provisions 

10 as the Administrator considers necessary 

11 to promote effective, efficient, transparent, 

12 and fair administration of auctions under 

13 this section. 

14 ‘‘(B) REVISION OF REGULATIONS.—The 

15 Administrator may, at any time, revise the ini16 tial regulations promulgated under subpara17 graph (A) based on the Administrator’s experi18 ence in administering allowance auctions by 

19 promulgating new regulations. Such revised reg20 ulations need not meet the requirements identi21 fied in subparagraph (A) if the Administrator 

22 determines that an alternative auction design 

23 would be more effective, taking into account 

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1 nipulation. In determining whether and how to 

2 revise the initial regulations under this para3 graph, the Administrator shall not consider 

4 maximization of revenues to the Federal Gov5 ernment. 

6 ‘‘(C) DELEGATION OR CONTRACT.—Pursu7 ant to regulations under this section, the Ad8 ministrator may, by delegation or contract, pro9 vide for the conduct of auctions under the Ad10 ministrator’s supervision by other departments 

11 or agencies of the Federal Government or by 

12 nongovernmental agencies, groups, or organiza13 tions. 

14 ‘‘(7) PAYMENTS FOR ALLOWANCES.— 

15 ‘‘(A) INITIAL REGULATIONS.—Not later 

16 than 18 months after the date of enactment of 

17 this section, the Administrator shall promulgate 

18 regulations governing the payment for allow19 ances purchased in auction and non-auction 

20 sales under this section. Such regulations shall 

21 include the requirement that, in the event that 

22 full payment for purchased allowances is not 

23 made on the date of purchase, equal payments 

24 shall be made one time per calendar quarter 


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1 with all payments for allowances of a vintage 

2 year made by the end of that vintage year. 

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 collection of payments by 

8 promulgating new regulations. Such revised reg9 ulations need not meet the requirements identi10 fied in subparagraph (A) if the Administrator 

11 determines that an alternative payment struc12 ture or frequency would be more effective, tak13 ing into account factors including cost of ad14 ministration, transparency, and fairness. In de15 termining whether and how to revise the initial 

16 regulations under this paragraph, the Adminis17 trator shall not consider maximization of reve18 nues to the Federal Government. 

19 ‘‘(C) PENALTIES FOR NON-PAYMENT.— 

20 Failure to pay for purchased allowances in ac21 cordance with the regulations promulgated pur22 suant to this paragraph shall be a violation of 

23 the requirements of subsection (b). Section 

24 113(c)(3) shall apply in the case of any person 

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1 ances in accordance with the regulations pro2 mulgated pursuant to this paragraph. 

3 ‘‘(8) IMPORTED PRODUCTS.—If the United 

4 States becomes a party or otherwise adheres to a 

5 multilateral agreement, including any amendment to 

6 the Montreal Protocol on Substances That Deplete 

7 the Ozone Layer, which restricts the production or 

8 consumption of class II, group II substances— 

9 ‘‘(A) as of the date on which such agree10 ment or amendment enters into force, it shall 

11 no longer be unlawful for any person to import 

12 from a party to such agreement or amendment 

13 any product containing any class II, group II 

14 substance whose production or consumption is 

15 regulated by such agreement or amendment 

16 without holding one consumption allowance or 

17 one destruction offset credit for each carbon di18 oxide equivalent ton of the class II, group II 

19 substance; 

20 ‘‘(B) the Administrator shall promulgate 

21 regulations within 12 months of the date the 

22 United States becomes a party or otherwise ad23 heres to such agreement or amendment, or the 

24 date on which such agreement or amendment 

25 enters into force, whichever is later, to establish 


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1 a new baseline for purposes of paragraph (2), 

2 which new baseline shall be the original baseline 

3 less the carbon dioxide equivalent of the annual 

4 average quantity of any class II substances reg5 ulated by such agreement or amendment con6 tained in products imported from parties to 

7 such agreement or amendment in calendar 

8 years 2004, 2005, and 2006; 

9 ‘‘(C) as of the date on which such agree10 ment or amendment enters into force, no per11 son importing any product containing any class 

12 II, group II substance may, directly or in con13 cert with another person, purchase any con14 sumption allowances for sale by the Adminis15 trator for the importation of products from a 

16 party to such agreement or amendment that 

17 contain any class II, group II substance re18 stricted by such agreement or amendment; and 

19 ‘‘(D) the Administrator may adjust the 

20 two allowance pools established in paragraph 

21 (4) such that up to 90 percent of the consump22 tion allowances available for a calendar year are 

23 placed in the producer-importer pool with the 

24 remaining consumption allowances placed in the 

25 secondary pool. 


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1 ‘‘(9) OFFSETS.— 

2 ‘‘(A) CHLOROFLUOROCARBON DESTRUC3 TION.—Within 18 months after the date of en4 actment of this section, the Administrator shall 

5 promulgate regulations to provide for the 

6 issuance of offset credits for the destruction, in 

7 the calendar year 2012 or later, of 

8 chlorofluorocarbons in the United States. The 

9 Administrator shall establish and distribute to 

10 the destroying entity a quantity of destruction 

11 offset credits equal to 0.8 times the number of 

12 metric tons of carbon dioxide equivalents of re13 duction achieved through the destruction. No 

14 destruction offset credits shall be established 

15 for the destruction of a class II, group II sub16 stance. 

17 ‘‘(B) DEFINITION.—For purposes of this 

18 paragraph, the term ‘destruction’ means the 

19 conversion of a substance by thermal, chemical, 

20 or other means to another substance with little 

21 or no carbon dioxide equivalent value and no 

22 ozone depletion potential. 

23 ‘‘(C) REGULATIONS.—The regulations pro24 mulgated under this paragraph shall include 

25 standards and protocols for project eligibility, 


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1 certification of destroyers, monitoring, tracking, 

2 destruction efficiency, quantification of project 

3 and baseline emissions and carbon dioxide 

4 equivalent value, and verification. The Adminis5 trator shall ensure that destruction offset cred6 its represent real and verifiable destruction of 

7 chlorofluorocarbons or other class I or class II, 

8 group I, substances authorized under subpara9 graph (D). 

10 ‘‘(D) OTHER SUBSTANCES.—The Adminis11 trator may promulgate regulations to add to the 

12 list of class I and class II, group I, substances 

13 that may be destroyed for destruction offset 

14 credits, taking into account a candidate sub15 stance’s carbon dioxide equivalent value, ozone 

16 depletion potential, prevalence in banks in the 

17 United States, and emission rates, as well as 

18 the need for additional cost containment under 

19 the class II, group II limits and the integrity of 

20 the class II, group II limits. The Administrator 

21 shall not add a class I or class II, group I sub22 stance to the list if the consumption of the sub23 stance has not been completely phased-out 

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1 tions or other similar exemptions) pursuant to 

2 the Montreal Protocol. 

3 ‘‘(E) EXTENSION OF OFFSETS.—(i) At any 

4 time after the Administrator promulgates regu5 lations pursuant to subparagraph (A), the Ad6 ministrator may, pursuant to the requirements 

7 of part D of title VII and based on the carbon 

8 dioxide equivalent value of the substance de9 stroyed, add the types of destruction projects 

10 authorized to receive destruction offset credits 

11 under this paragraph to the list of types of 

12 projects eligible for offset credits under section 

13 733. If such projects are added to the list under 

14 section 733, the issuance of offset credits for 

15 such projects under part D of title VII shall be 

16 governed by the requirements of such part D, 

17 while the issuance of offset credits for such 

18 projects under this paragraph shall be governed 

19 by the requirements of this paragraph. Nothing 

20 in this paragraph shall affect the issuance of 

21 offset credits under section 740. 

22 ‘‘(ii) The Administrator shall not make the 

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1 graph and that the addition would increase de2 struction. 

3 ‘‘(iii) In no event shall more than one de4 struction offset credit be issued under title VII 

5 and this section for the destruction of the same 

6 quantity of a substance. 

7 ‘‘(10) LEGAL STATUS OF ALLOWANCES AND

8 CREDITS.—None of the following constitutes a prop9 erty right: 

10 ‘‘(A) A production or consumption allow11 ance. 

12 ‘‘(B) A destruction offset credit. 

13 ‘‘(c) DEADLINES FOR COMPLIANCE.—Notwith14 standing the deadlines specified for class II substances in 

15 sections 608, 609, 610, 612, and 613 that occur prior to 

16 January 1, 2009, the deadline for promulgating regula17 tions under those sections for class II, group II substances 

18 shall be January 1, 2012. 

19 ‘‘(d) EXCEPTIONS FOR ESSENTIAL USES.—Notwith20 standing any phase down of production and consumption 

21 required by this section, to the extent consistent with any 

22 applicable multilateral agreement to which the United 

23 States is a party or otherwise adheres, the Administrator 

24 shall consider providing exceptions for essential uses under 


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1 paragraph (1) and may provide exceptions for essential 

2 uses under paragraph (2), as follows: 

3 ‘‘(1) MEDICAL DEVICES.—If the Administrator 

4 makes the determination under this subsection that 

5 a medical device is eligible for an exception, after no6 tice and opportunity for public comment, and in con7 sultation with the Commissioner of Food and Drugs, 

8 the Administrator shall provide an exception for the 

9 production and consumption of class II, group II 

10 substances solely for use in medical devices, such as 

11 metered dose inhalers. 

12 ‘‘(2) AVIATION AND SPACE VEHICLE SAFETY.— 

13 The Administrator, after notice and opportunity for 

14 public comment, may authorize the production and 

15 consumption of limited quantities of class II, group 

16 II substances solely for the purposes of aviation or 

17 space vehicle safety if either the Administrator of 

18 the Federal Aviation Administration or the Adminis19 trator of the National Aeronautics and Space Ad20 ministration, in consultation with the Administrator, 

21 determines that no safe and effective substitute has 

22 been developed and that such authorization is nec23 essary for aviation or space flight safety purposes. 

24 ‘‘(e) DEVELOPING COUNTRIES.—Notwithstanding 

25 any phase down of production required by this section, the 


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1 Administrator, after notice and opportunity for public 

2 comment, may authorize the production of limited quan3 tities of class II, group II substances in excess of the 

4 amounts otherwise allowable under this section solely for 

5 export to, and use in, developing countries. Any produc6 tion authorized under this subsection shall be solely for 

7 purposes of satisfying the basic domestic needs of such 

8 countries as provided in applicable international agree9 ments, if any, to which the United States is a party or 

10 otherwise adheres. 

11 ‘‘(f) NATIONAL SECURITY; FIRE SUPPRESSION, 

12 ETC.—The provisions of subsection (f) and paragraphs (1) 

13 and (2) of subsection (g) of section 604 shall apply to any 

14 consumption and production phase down of class II, group 

15 II substances in the same manner and to the same extent, 

16 consistent with any applicable international agreement to 

17 which the United States is a party or otherwise adheres, 

18 as such provisions apply to the substances specified in 

19 such subsection. 

20 ‘‘(g) ACCELERATED SCHEDULE.—In lieu of section 

21 606, the provisions of paragraphs (1), (2), and (3) of this 

22 subsection shall apply in the case of class II, group II sub23 stances. 

24 ‘‘(1) IN GENERAL.—The Administrator shall 

25 promulgate initial regulations not later than 18 


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1 months after the date of enactment of this section, 

2 and revised regulations any time thereafter, which 

3 establish a schedule for phasing down the consump4 tion (and, if the condition in subsection (b)(1)(B) is 

5 met, the production) of class II, group II substances 

6 that is more stringent than the schedule set forth in 

7 this section if, based on the availability of sub8 stitutes, the Administrator determines that such 

9 more stringent schedule is practicable, taking into 

10 account technological achievability, safety, and other 

11 factors the Administrator deems relevant, or if the 

12 Montreal Protocol, or any applicable international 

13 agreement to which the United States is a party or 

14 otherwise adheres, is modified or established to in15 clude a schedule or other requirements to control or 

16 reduce production, consumption, or use of any class 

17 II, group II substance more rapidly than the appli18 cable schedule under this section. 

19 ‘‘(2) PETITION.—Any person may submit a pe20 tition to promulgate regulations under this sub21 section in the same manner and subject to the same 

22 procedures as are provided in section 606(b). 

23 ‘‘(3) INCONSISTENCY.—If the Administrator de24 termines that the provisions of this section regarding 

25 banking, allowance rollover, or destruction offset 


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1 credits create a significant potential for inconsist2 ency with the requirements of any applicable inter3 national agreement to which the United States is a 

4 party or otherwise adheres, the Administrator may 

5 promulgate regulations restricting the availability of 

6 banking, allowance rollover, or destruction offset 

7 credits to the extent necessary to avoid such incon8 sistency. 

9 ‘‘(h) EXCHANGE.—Section 607 shall not apply in the 

10 case of class II, group II substances. Production and con11 sumption allowances for class II, group II substances may 

12 be freely exchanged or sold but may not be converted into 

13 allowances for class II, group I substances. 

14 ‘‘(i) LABELING.—(1) In applying section 611 to prod15 ucts containing or manufactured with class II, group II 

16 substances, in lieu of the words ‘destroying ozone in the 

17 upper atmosphere’ on labels required under section 611 

18 there shall be substituted the words ‘contributing to global 

19 warming’. 

20 ‘‘(2) The Administrator may, through rulemaking, 

21 exempt from the requirements of section 611 products 

22 containing or manufactured with class II, group II sub23 stances determined to have little or no carbon dioxide 

24 equivalent value compared to other substances used in 

25 similar products. 


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1 ‘‘(j) NONESSENTIAL PRODUCTS.—For the purposes 

2 of section 610, class II, group II substances shall be regu3 lated under section 610(b), except that in applying section 

4 610(b) the word ‘hydrofluorocarbon’ shall be substituted 

5 for the word ‘chlorofluorocarbon’ and the term ‘class II, 

6 group II’ shall be substituted for the term ‘class I’. Class 

7 II, group II substances shall not be subject to the provi8 sions of section 610(d). 

9 ‘‘(k) INTERNATIONAL TRANSFERS.—In the case of 

10 class II, group II substances, in lieu of section 616, this 

11 subsection shall apply. To the extent consistent with any 

12 applicable international agreement to which the United 

13 States is a party or otherwise adheres, including any 

14 amendment to the Montreal Protocol, the United States 

15 may engage in transfers with other parties to such agree16 ment or amendment under the following conditions: 

17 ‘‘(1) The United States may transfer produc18 tion allowances to another party to such agreement 

19 or amendment if, at the time of the transfer, the 

20 Administrator establishes revised production limits 

21 for the United States accounting for the transfer in 

22 accordance with regulations promulgated pursuant 

23 to this subsection. 

24 ‘‘(2) The United States may acquire production 

25 allowances from another party to such agreement or 


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1 amendment if, at the time of the transfer, the Ad2 ministrator finds that the other party has revised its 

3 domestic production limits in the same manner as 

4 provided with respect to transfers by the United 

5 States in the regulations promulgated pursuant to 

6 this subsection. 

7 ‘‘(l) RELATIONSHIP TO OTHER LAWS.— 

8 ‘‘(1) STATE LAWS.—For purposes of section 

9 116, the requirements of this section for class II, 

10 group II substances shall be treated as requirements 

11 for the control and abatement of air pollution. 

12 ‘‘(2) MULTILATERAL AGREEMENTS.—Section 

13 614 shall apply to the provisions of this section con14 cerning class II, group II substances, except that for 

15 the words ‘Montreal Protocol’ there shall be sub16 stituted the words ‘Montreal Protocol, or any appli17 cable multilateral agreement to which the United 

18 States is a party or otherwise adheres that restricts 

19 the production or consumption of class II, group II 

20 substances,’ and for the words ‘Article 4 of the Mon21 treal Protocol’ there shall be substituted ‘any provi22 sion of such multilateral agreement regarding trade 

23 with non-parties’. 

24 ‘‘(3) FEDERAL FACILITIES.—For purposes of 

25 section 118, the requirements of this section for 


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1 class II, group II substances and corresponding 

2 State, interstate, and local requirements, administra3 tive authority, and process and sanctions shall be 

4 treated as requirements for the control and abate5 ment of air pollution within the meaning of section 

6 118. 

7 ‘‘(m) CARBON DIOXIDE EQUIVALENT VALUE.—(1) 

8 In lieu of section 602(e), the provisions of this subsection 

9 shall apply in the case of class II, group II substances. 

10 Simultaneously with establishing the list of class II, group 

11 II substances, and simultaneously with any addition to 

12 that list, the Administrator shall publish the carbon diox13 ide equivalent value of each listed class II, group II sub14 stance, based on a determination of the number of metric 

15 tons of carbon dioxide that makes the same contribution 

16 to global warming over 100 years as 1 metric ton of each 

17 class II, group II substance. 

18 ‘‘(2) Not later than February 1, 2017, and not less 

19 than every 5 years thereafter, the Administrator shall— 

20 ‘‘(A) review, and if appropriate, revise the car21 bon dioxide equivalent values established for class II, 

22 group II substances based on a determination of the 

23 number of metric tons of carbon dioxide that makes 

24 the same contributions to global warming over 100 


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1 years as 1 metric ton of each class II, group II sub2 stance; and 

3 ‘‘(B) publish in the Federal Register the results 

4 of that review and any revisions. 

5 ‘‘(3) A revised determination published in the Federal 

6 Register under paragraph (2)(B) shall take effect for pro7 duction of class II, group II substances, consumption of 

8 class II, group II substances, and importation of products 

9 containing class II, group II substances starting on Janu10 ary 1 of the first calendar year starting at least 9 months 

11 after the date on which the revised determination was pub12 lished. 

13 ‘‘(4) The Administrator may decrease the frequency 

14 of review and revision under paragraph (2) if the Adminis15 trator determines that such decrease is appropriate in 

16 order to synchronize such review and revisions with any 

17 similar review process carried out pursuant to the United 

18 Nations Framework Convention on Climate Change, an 

19 agreement negotiated under that convention, The Vienna 

20 Convention for the Protection of the Ozone Layer, or an 

21 agreement negotiated under that convention, except that 

22 in no event shall the Administrator carry out such review 

23 and revision any less frequently than every 10 years. 

24 ‘‘(n) REPORTING REQUIREMENTS.—In lieu of sub25 sections (b) and (c) of section 603, paragraphs (1) and 


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1 (2) of this subsection shall apply in the case of class II, 

2 group II substances: 

3 ‘‘(1) IN GENERAL.—On a quarterly basis, or 

4 such other basis (not less than annually) as deter5 mined by the Administrator, each person who pro6 duced, imported, or exported a class II, group II 

7 substance, or who imported a product containing a 

8 class II, group II substance, shall file a report with 

9 the Administrator setting forth the carbon dioxide 

10 equivalent amount of the substance that such person 

11 produced, imported, or exported, as well as the 

12 amount that was contained in products imported by 

13 that person, during the preceding reporting period. 

14 Each such report shall be signed and attested by a 

15 responsible officer. If all other reporting is complete, 

16 no such report shall be required from a person after 

17 April 1 of the calendar year after such person per18 manently ceases production, importation, and expor19 tation of the substance, as well as importation of 

20 products containing the substance, and so notifies 

21 the Administrator in writing. If the United States 

22 becomes a party or otherwise adheres to a multilat23 eral agreement, including any amendment to the 

24 Montreal Protocol on Substances That Deplete the 

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1 sumption of class II, group II substances, then, if all 

2 other reporting is complete, no such report shall be 

3 required from a person with respect to importation 

4 from parties to such agreement or amendment of 

5 products containing any class II, group II substance 

6 restricted by such agreement or amendment, after 

7 April 1 of the calendar year following the year dur8 ing which such agreement or amendment enters into 

9 force. 

10 ‘‘(2) BASELINE REPORTS FOR CLASS II, GROUP

11 II SUBSTANCES.— 

12 ‘‘(A) IN GENERAL.—Unless such informa13 tion has been previously reported to the Admin14 istrator, on the date on which the first report 

15 under paragraph (1) of this subsection is re16 quired to be filed, each person who produced, 

17 imported, or exported a class II, group II sub18 stance, or who imported a product containing a 

19 class II substance, (other than a substance 

20 added to the list of class II, group II substances 

21 after the publication of the initial list of such 

22 substances under this section), shall file a re23 port with the Administrator setting forth the 

24 amount of such substance that such person pro25 duced, imported, exported, or that was conVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00729 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 tained in products imported by that person, 

2 during each of calendar years 2004, 2005, and 

3 2006. 

4 ‘‘(B) PRODUCERS.—In reporting under 

5 subparagraph (A), each person who produced in 

6 the United States a class II substance during 

7 calendar year 2004, 2005, or 2006 shall— 

8 ‘‘(i) report all acquisitions or pur9 chases of class II substances during each 

10 of calendar years 2004, 2005, and 2006 

11 from all other persons who produced in the 

12 United States a class II substance during 

13 calendar year 2004, 2005, or 2006, and 

14 supply evidence of such acquisitions and 

15 purchases as deemed necessary by the Ad16 ministrator; and 

17 ‘‘(ii) report all transfers or sales of 

18 class II substances during each of calendar 

19 years 2004, 2005, and 2006 to all other 

20 persons who produced in the United States 

21 a class II substance during calendar year 

22 2004, 2005, or 2006, and supply evidence 

23 of such transfers and sales as deemed nec24 essary by the Administrator. 


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1 ‘‘(C) ADDED SUBSTANCES.—In the case of 

2 a substance added to the list of class II, group 

3 II substances after publication of the initial list 

4 of such substances under this section, each per5 son who produced, imported, exported, or im6 ported products containing such substance in 

7 calendar year 2004, 2005, or 2006 shall file a 

8 report with the Administrator within 180 days 

9 after the date on which such substance is added 

10 to the list, setting forth the amount of the sub11 stance that such person produced, imported, 

12 and exported, as well as the amount that was 

13 contained in products imported by that person, 

14 in calendar years 2004, 2005, and 2006. 

15 ‘‘(o) STRATOSPHERIC OZONE AND CLIMATE PROTEC16 TION FUND.— 

17 ‘‘(1) IN GENERAL.—There is established in the 

18 Treasury of the United States a Stratospheric Ozone 

19 and Climate Protection Fund. 

20 ‘‘(2) DEPOSITS.—The Administrator shall de21 posit all proceeds from the auction and non-auction 

22 sale of allowances under this section into the Strato23 spheric Ozone and Climate Protection Fund. 

24 ‘‘(3) USE.—Amounts deposited into the Strato25 spheric Ozone and Climate Protection Fund shall be 


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1 available, subject to appropriations, exclusively for 

2 the following purposes: 

3 ‘‘(A) RECOVERY, RECYCLING, AND REC4 LAMATION.—The Administrator may utilize 

5 funds to establish a program to incentivize the 

6 recovery, recycling, and reclamation of any 

7 Class II substances in order to reduce emissions 

8 of such substances. 

9 ‘‘(B) MULTILATERAL FUND.—If the 

10 United States becomes a party or otherwise ad11 heres to a multilateral agreement, including any 

12 amendment to the Montreal Protocol on Sub13 stances That Deplete the Ozone Layer, which 

14 restricts the production or consumption of class 

15 II, group II substances, the Administrator may 

16 utilize funds to meet any related contribution 

17 obligation of the United States to the Multilat18 eral Fund for the Implementation of the Mon19 treal Protocol or similar multilateral fund es20 tablished under such multilateral agreement. 

21 ‘‘(C) LOW GLOBAL WARMING PRODUCT

22 TRANSITION ASSISTANCE PROGRAM.— 

23 ‘‘(i) IN GENERAL.—The Adminis24 trator, in consultation with the Secretary 

25 of Energy, may utilize funds in fiscal years 


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1 2012 through 2022 to establish a program 

2 to provide financial assistance to manufac3 turers of products containing class II, 

4 group II substances to facilitate the transi5 tion to products that contain or utilize al6 ternative substances with no or low carbon 

7 dioxide equivalent value and no ozone de8 pletion potential. 

9 ‘‘(ii) DEFINITION.—In this subpara10 graph, the term ‘products’ means refrig11 erators, freezers, dehumidifiers, air condi12 tioners, foam insulation, technical aerosols, 

13 fire protection systems, and semiconduc14 tors. 

15 ‘‘(iii) FINANCIAL ASSISTANCE.—The 

16 Administrator may provide financial assist17 ance to manufacturers pursuant to clause 

18 (i) for— 

19 ‘‘(I) the design and configuration 

20 of new products that use alternative 

21 substances with no or low carbon di22 oxide equivalent value and no ozone 

23 depletion potential; and 

24 ‘‘(II) the redesign and retooling 

25 of facilities for the manufacture of 


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1 products in the United States that use 

2 alternative substances with no or low 

3 carbon dioxide equivalent value and 

4 no ozone depletion potential. 

5 ‘‘(iv) REPORTS.—For any fiscal year 

6 during which the Administrator provides 

7 financial assistance pursuant to this sub8 paragraph, the Administrator shall submit 

9 a report to the Congress within 3 months 

10 of the end of such fiscal year detailing the 

11 amounts, recipients, specific purposes, and 

12 results of the financial assistance pro13 vided.’’. 

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

15 title VI of the Clean Air Act (42 U.S.C. 7671 et seq.) 

16 is amended by adding the following new item at the end 

17 thereof: 

‘‘Sec. 619. Hydrofluorocarbons (HFCs).’’. 

18 (c) FIRE SUPPRESSION AGENTS.—Section 605(a) of 

19 the Clean Air Act (42 U.S.C. 7671(a)) is amended— 

20 (1) by striking ‘‘or’’ at the end of paragraph 

21 (2); 

22 (2) by striking the period at the end of para23 graph (3) and inserting ‘‘; or’’; and 

24 (3) by adding the following new paragraph after 

25 paragraph (3): 


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1 ‘‘(4) is listed as acceptable for use as a fire sup2 pression agent for nonresidential applications in ac3 cordance with section 612(c).’’. 

4 (d) MOTOR VEHICLE AIR CONDITIONERS.— 

5 (1) Section 609(e) of the Clean Air Act (42 

6 U.S.C. 7671h(e)) is amended by inserting ‘‘, group 

7 I’’ after each reference to ‘‘class II’’ in the text and 

8 heading. 

9 (2) Section 609 of the Clean Air Act (42 U.S.C. 

10 7671h) is amended by adding the following new sub11 section after subsection (e): 

12 ‘‘(f) CLASS II, GROUP II SUBSTANCES.— 

13 ‘‘(1) REPAIR.—The Administrator may promul14 gate regulations establishing requirements for repair 

15 of motor vehicle air conditioners prior to adding a 

16 class II, group II substance. 

17 ‘‘(2) SMALL CONTAINERS.—(A) The Adminis18 trator may promulgate regulations establishing serv19 icing practices and procedures for recovery of class 

20 II, group II substances from containers which con21 tain less than 20 pounds of such class II, group II 

22 substances. 

23 ‘‘(B) Not later than 18 months after enactment 

24 of this subsection, the Administrator shall either 

25 promulgate regulations requiring that containers 


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1 which contain less than 20 pounds of a class II, 

2 group II substance be equipped with a device or 

3 technology that limits refrigerant emissions and 

4 leaks from the container and limits refrigerant emis5 sions and leaks during the transfer of refrigerant 

6 from the container to the motor vehicle air condi7 tioner or issue a determination that such require8 ments are not necessary or appropriate. 

9 ‘‘(C) Not later than 18 months after enactment 

10 of this subsection, the Administrator shall promul11 gate regulations establishing requirements for con12 sumer education materials on best practices associ13 ated with the use of containers which contain less 

14 than 20 pounds of a class II, group II substance and 

15 prohibiting the sale or distribution, or offer for sale 

16 or distribution, of any class II, group II substance 

17 in any container which contains less than 20 pounds 

18 of such class II, group II substance, unless con19 sumer education materials consistent with such re20 quirements are displayed and available at point-of21 sale locations, provided to the consumer, or included 

22 in or on the packaging of the container which con23 tain less than 20 pounds of a class II, group II sub24 stance. 


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1 ‘‘(D) The Administrator may, through rule2 making, extend the requirements established under 

3 this paragraph to containers which contain 30 

4 pounds or less of a class II, group II substance if 

5 the Administrator determines that such action would 

6 produce significant environmental benefits. 

7 ‘‘(3) RESTRICTION OF SALES.—Effective Janu8 ary 1, 2014, no person may sell or distribute or offer 

9 to sell or distribute or otherwise introduce into inter10 state commerce any motor vehicle air conditioner re11 frigerant in any size container unless the substance 

12 has been found acceptable for use in a motor vehicle 

13 air conditioner under section 612.’’. 

14 (e) SAFE ALTERNATIVES POLICY.—Section 612(e) of 

15 the Clean Air Act (42 U.S.C. 7671k(e)) is amended by 

16 inserting ‘‘or class II’’ after each reference to ‘‘class I’’. 

17 SEC. 123. BLACK CARBON. 

18 (a) STUDY OF BLACK CARBON EMISSIONS.— 

19 (1) DEFINITION OF BLACK CARBON.—In this 

20 subsection, the term ‘‘black carbon’’ means any 

21 light-absorbing graphitic (or elemental) particle pro22 duced by incomplete combustion. 

23 (2) STUDY.—The Administrator, in consulta24 tion with the Secretary of Energy, the Secretary of 

25 State, and the heads of the National Oceanic and 


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1 Atmospheric Administration, the National Aero2 nautics and Space Administration, the United States 

3 Agency for International Development, the National 

4 Institutes of Health, the Centers for Disease Control 

5 and Prevention, National Institute of Standards and 

6 Technology, and other relevant Federal departments 

7 and agencies and representatives of appropriate in8 dustry and environmental groups, shall conduct a 4- 

9 phase study of black carbon emissions, the phases of 

10 which shall be the following: 

11 (A) PHASE I—UNIVERSAL DEFINITION.— 

12 The Administrator shall conduct phase I of the 

13 study under this subsection to carry out meas14 ures to establish for the scientific community 

15 standard definitions of the terms— 

16 (i) black carbon; and 

17 (ii) organic carbon. 

18 (B) PHASE II—SOURCES AND TECH19 NOLOGIES.—The Administrator shall conduct 

20 phase II of the study under this subsection to 

21 summarize the available scientific and technical 

22 information concerning— 

23 (i) the identification of the major 

24 sources of black carbon emissions in the 

25 United States and throughout the world; 


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1 (ii) an estimate of— 

2 (I) the quantity of current and 

3 projected future black carbon emis4 sions from those sources; and 

5 (II) the net climate effects of the 

6 emissions; 

7 (iii) the most recent scientific data 

8 relevant to the public health- and climate9 related impacts of black carbon emissions 

10 and associated emissions of organic car11 bon, nitrogen oxides, and sulfur oxides 

12 from the sources identified under clause 

13 (i); 

14 (iv) the most effective control strate15 gies for additional domestic and inter16 national reductions in black carbon emis17 sions, taking into consideration lifecycle 

18 analysis, cost-effectiveness, and the net cli19 mate impact of technologies, operations, 

20 and strategies, such as— 

21 (I) diesel particulate filters on ex22 isting diesel on- and off-road engines; 

23 and 

24 (II) particulate emission reduc25 tion measures for marine vessels; 


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1 (v) carbon dioxide equivalency factors, 

2 global/regional modeling, or other metrics 

3 to compare the global warming and other 

4 climate effects of black carbon emissions 

5 with carbon dioxide and other greenhouse 

6 gas emissions; and 

7 (vi) the health benefits associated with 

8 additional black carbon emission reduc9 tions. 

10 (C) PHASE III—INTERNATIONAL FUND11 ING.—The Administrator shall conduct phase 

12 III of the study under this subsection— 

13 (i) to summarize the amount, type, 

14 and direction of all actual and potential fi15 nancial, technical, and related assistance 

16 provided by the United States to foreign 

17 countries to reduce, mitigate, or otherwise 

18 abate— 

19 (I) black carbon emissions; and 

20 (II) any health, environmental, 

21 and economic impacts associated with 

22 those emissions; and 

23 (ii) to identify opportunities, including 

24 action under existing authority, to achieve 

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1 tions in foreign countries through the pro2 vision of technical assistance or other ap3 proaches. 

4 (D) PHASE IV—RESEARCH AND DEVELOP5 MENT OPPORTUNITIES.—The Administrator 

6 shall conduct phase IV of the study under this 

7 subsection for the purpose of providing to Con8 gress recommendations regarding— 

9 (i) areas of focus for additional re10 search for cost-effective technologies, oper11 ations, and strategies with the highest po12 tential to reduce black carbon emissions 

13 and protect public health in the United 

14 States and internationally; and 

15 (ii) actions that the Federal Govern16 ment could take to encourage or require 

17 additional black carbon emission reduc18 tions. 

19 (3) REPORTS.—The Administrator shall submit 

20 to Congress— 

21 (A) by not later than 180 days after the 

22 date of enactment of this Act, a report describ23 ing the results of phases I and II of the study 

24 under subparagraphs (A) and (B) of paragraph 

25 (2); 


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1 (B) by not later than 270 days after the 

2 date of enactment of this Act, a report describ3 ing the results of phase III of the study under 

4 paragraph (2)(C); and 

5 (C) by not later than 1 year after the date 

6 of enactment of this Act, a report describing 

7 the recommendations developed for phase IV of 

8 the study under paragraph (2)(D). 

9 (4) AUTHORIZATION OF APPROPRIATIONS.— 

10 There are authorized to be appropriated such sums 

11 as are necessary to carry out this subsection. 

12 (b) BLACK CARBON MITIGATION.—Title VIII of the 

13 Clean Air Act (as amended by section 113 of division A) 

14 is amended by adding at the end the following: 

15 ‘‘PART E—BLACK CARBON 

16 ‘‘SEC. 851. BLACK CARBON. 

17 ‘‘(a) DOMESTIC BLACK CARBON MITIGATION.— 

18 ‘‘(1) IN GENERAL.—Taking into consideration 

19 the public health and environmental impacts of black 

20 carbon emissions, including the effects on global and 

21 regional warming, the Arctic, and other snow and 

22 ice-covered surfaces, the Administrator shall— 

23 ‘‘(A) not later than 2 years after the date 

24 of enactment of this part, propose— 


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1 ‘‘(i) regulations applicable to emis2 sions of black carbon under the existing 

3 authorities of this Act; or 

4 ‘‘(ii) a finding that existing regula5 tions promulgated pursuant to this Act 

6 adequately regulate black carbon emis7 sions, which finding may be based on a 

8 finding that existing regulations, in the 

9 judgment of the Administrator— 

10 ‘‘(I) address those sources that 

11 both contribute significantly to the 

12 total emissions of black carbon and 

13 provide the greatest potential for sig14 nificant and cost-effective reductions 

15 in emissions of black carbon, under 

16 the existing authorities; and 

17 ‘‘(II) reflect the greatest degree 

18 of emission reduction achievable 

19 through application of technology that 

20 will be available for such sources, giv21 ing appropriate consideration to cost, 

22 energy, and safety factors associated 

23 with the application of such tech24 nology; and 


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1 ‘‘(B) not later than 3 years after the date 

2 of enactment of this part, promulgate final reg3 ulations under the existing authorities of this 

4 Act or finalize the proposed finding. 

5 ‘‘(2) APPLICABILITY OF REGULATIONS.—Regu6 lations promulgated under paragraph (1) shall not 

7 apply to specific types, classes, categories, or other 

8 suitable groupings of emission sources that the Ad9 ministrator finds are subject to adequate regulation. 

10 ‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There 

11 are authorized to be appropriated such sums as are nec12 essary to carry out this section.’’. 

13 SEC. 124. STATES. 

14 Section 116 of the Clean Air Act (42 U.S.C. 7416) 

15 is amended by adding the following at the end thereof: 

16 ‘‘For the purposes of this section, the phrases ‘standard 

17 or limitation respecting emissions of air pollutants’ and 

18 ‘requirements respecting control or abatement of air pollu19 tion’ shall include any provision to: limit greenhouse gas 

20 emissions, require surrender to the State or a political 

21 subdivision thereof of emission allowances or offset credits 

22 established or issued under this Act, and require the use 

23 of such allowances or credits as a means of demonstrating 

24 compliance with requirements established by a State or 

25 political subdivision thereof.’’. 


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1 SEC. 125. STATE PROGRAMS. 

2 Title VIII of the Clean Air Act (as amended by sec3 tion 123(b)) is amended by adding at the end the fol4 lowing: 

5 ‘‘PART F—MISCELLANEOUS 

6 ‘‘SEC. 861. STATE PROGRAMS. 

7 ‘‘(a) IN GENERAL.—Notwithstanding section 116, if 

8 a Federal auction is conducted, by the deadline of March 

9 31, 2011, as established in section 778, no State or polit10 ical subdivision thereof shall implement or enforce a com11 prehensive greenhouse gas emission limitation program 

12 that covers any capped emissions emitted during the years 

13 2012 through 2017. 

14 ‘‘(b) DEADLINE.—Notwithstanding section 116, in 

15 the event the March 31, 2011 auction is delayed, no State 

16 or political subdivision thereof shall enforce a comprehen17 sive greenhouse gas emission limitation program that cov18 ers any capped emissions emitted during the period that 

19 is at least 9 months from the first auction as set out in 

20 section 778, through 2017. 

21 ‘‘(c) DEFINITION OF COMPREHENSIVE GREENHOUSE

22 GAS EMISSION LIMITATION PROGRAM.—For purposes of 

23 this section, the term ‘comprehensive greenhouse gas 

24 emission limitation program’ means a system of green25 house gas regulation under which a State or political sub26 division issues a limited number of tradable instruments 


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1 in the nature of emission allowances and requires that 

2 sources within its jurisdiction surrender such tradeable in3 struments for each unit of greenhouse gases emitted dur4 ing a compliance period. For purposes of this section, a 

5 ‘comprehensive greenhouse gas emission limitation pro6 gram’ does not include a target or limit on greenhouse 

7 gas emissions adopted by a State or political subdivision 

8 that is implemented other than through the issuance and 

9 surrender of a limited number of tradable instruments in 

10 the nature of emission allowances, nor does it include any 

11 other standard, limit, regulation, or program to reduce 

12 greenhouse gas emissions that is not implemented through 

13 the issuance and surrender of a limited number of 

14 tradeable instruments in the nature of emission allow15 ances. For purposes of this section, the term ‘comprehen16 sive greenhouse gas emission limitation program’ does not 

17 include, among other things, fleet-wide motor vehicle emis18 sion requirements that allow greater emissions with in19 creased vehicle production, or requirements that fuels, or 

20 other products, meet an average pollution emission rate 

21 or lifecycle greenhouse gas standard. 

22 ‘‘SEC. 862. GRANTS FOR SUPPORT OF AIR POLLUTION CON23 TROL PROGRAMS. 

24 ‘‘The Administrator is authorized to make grants to 

25 air pollution control agencies pursuant to section 105 for 


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1 purposes of assisting in the implementation of programs 

2 to address global warming established under the Clean 

3 Energy Jobs and American Power Act.’’. 

4 SEC. 126. 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 ‘‘(4) If the court determines that any action of 

16 the Administrator is arbitrary, capricious, or other17 wise unlawful, and remands the matter to the Ad18 ministrator, the Administrator shall complete final 

19 action on remand within an expeditious time period 

20 not longer than the time originally allowed for the 

21 action or 1 year, whichever is less, unless the court 

22 on motion determines that a shorter or longer period 

23 is necessary, appropriate, and consistent with the 

24 purposes of this Act. The court of appeals shall have 


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1 jurisdiction to enforce a deadline for action on re2 mand under this paragraph.’’. 

3 (b) PETITION FOR RECONSIDERATION.—Section 

4 307(d)(7)(B) of the Clean Air Act (42 U.S.C. 

5 7607(d)(7)(B)) is amended as follows: 

6 (1) By inserting after the second sentence ‘‘If 

7 a petition for reconsideration is filed, the Adminis8 trator shall take final action on such petition, in9 cluding promulgation of final action either revising 

10 or determining not to revise the action for which re11 consideration is sought, within 150 days after the 

12 petition is received by the Administrator or the peti13 tion shall be deemed denied for the purpose of judi14 cial review.’’. 

15 (2) By amending the third sentence to read as 

16 follows: ‘‘Such person may seek judicial review of 

17 such denial, or of any other final action, by the Ad18 ministrator, in response to a petition for reconsider19 ation, in the United States court of appeals for the 

20 appropriate circuit (as provided in subsection (b)).’’. 

21 (c) PETITION FOR REVIEW.—Section 307(b)(1) of 

22 the Clean Air Act (42 U.S.C. 7607(b)(1)) is amended by 

23 inserting after the second sentence the following: ‘‘Any 

24 person may file a petition for review of action by the Ad25 ministrator as provided in this subsection.’’. 


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1 SEC. 127. CONFORMING AMENDMENTS. 

2 (a) FEDERAL ENFORCEMENT.—Section 113 of the 

3 Clean Air Act (42 U.S.C. 7413) is amended as follows: 

4 (1) In subsection (a)(3), by striking ‘‘or title 

5 VI,’’ and inserting ‘‘title VI, title VII, or title VIII’’. 

6 (2) In subsection (b), by striking ‘‘or a major 

7 stationary source’’ and inserting ‘‘a major stationary 

8 source, or a covered EGU under title VIII’’ in the 

9 material preceding paragraph (1). 

10 (3) In paragraph (2) of subsection (b), by strik11 ing ‘‘or title VI’’ and inserting ‘‘title VI, title VII, 

12 or title VIII’’. 

13 (4) In subsection (c)— 

14 (A) in the first sentence of paragraph (1), 

15 by striking ‘‘or title VI (relating to strato16 spheric ozone control),’’ and inserting ‘‘title VI, 

17 title VII, or title VIII,’’; and 

18 (B) in the first sentence of paragraph (3), 

19 by striking ‘‘or VI’’ and inserting ‘‘VI, VII, or 

20 VIII’’. 

21 (5) In subsection (d)(1)(B), by striking ‘‘or VI’’ 

22 and inserting ‘‘VI, VII, or VIII’’. 

23 (6) In subsection (f), in the first sentence, by 

24 striking ‘‘or VI’’ and inserting ‘‘VI, VII, or VIII’’. 


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1 (b) RETENTION OF STATE AUTHORITY.—Section 

2 116 of the Clean Air Act (42 U.S.C. 7416) is amended 

3 as follows: 

4 (1) By striking ‘‘and 233’’ and inserting ‘‘233’’. 

5 (2) By striking ‘‘of moving sources)’’ and in6 serting ‘‘of moving sources), and 861 (preempting 

7 certain State greenhouse gas programs for a limited 

8 time)’’. 

9 (c) INSPECTIONS, MONITORING, AND ENTRY.—Sec10 tion 114(a) of the Clean Air Act (42 U.S.C. 7414(a)) is 

11 amended by striking ‘‘section 112,’’ and all that follows 

12 through ‘‘(ii)’’ and inserting the following: ‘‘section 112, 

13 or any regulation of greenhouse gas emissions under title 

14 VII or VIII, (ii)’’. 

15 (d) ENFORCEMENT.—Subsection (f) of section 304 of 

16 the Clean Air Act (42 U.S.C. 7604(f)) is amended as fol17 lows: 

18 (1) By striking ‘‘; or’’ at the end of paragraph 

19 (3) thereof and inserting a comma. 

20 (2) By striking the period at the end of para21 graph (4) thereof and inserting ‘‘, or’’. 

22 (3) By adding the following after paragraph (4) 

23 thereof: 

24 ‘‘(5) any requirement of title VII or VIII.’’. 


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1 (e) ADMINISTRATIVE PROCEEDINGS AND JUDICIAL

2 REVIEW.—Section 307 of the Clean Air Act (42 U.S.C. 

3 7607) is amended as follows: 

4 (1) In subsection (a), by striking ‘‘, or section 

5 306’’ and inserting ‘‘section 306, or title VII or 

6 VIII’’. 

7 (2) In subsection (b)(1)— 

8 (A) by striking ‘‘,,’’ and inserting ‘‘,’’ in 

9 each place such punctuation appears; and 

10 (B) by striking ‘‘section 120,’’ in the first 

11 sentence and inserting ‘‘section 120, any final 

12 action under title VII or VIII,’’. 

13 (3) In subsection (d)(1) by amending subpara14 graph (S) to read as follows: 

15 ‘‘(S) the promulgation or revision of any 

16 regulation under title VII or VIII,’’. 

17 (f) TECHNICAL AMENDMENT.—Title IV of the Clean 

18 Air Act (relating to noise pollution) (42 U.S.C. 7641 et 

19 seq.)— 

20 (1) is amended by redesignating sections 401 

21 through 403 as sections 901 through 903, respec22 tively; and 

23 (2) is redesignated as title IX and moved to ap24 pear at the end of that Act. 


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1 SEC. 128. DAVIS-BACON COMPLIANCE. 

2 (a) IN GENERAL.—Notwithstanding any other provi3 sion of law and in a manner consistent with other provi4 sions in this Act, to receive emission allowances or funding 

5 under this Act, or the amendments made by this Act, the 

6 recipient shall provide reasonable assurances that all la7 borers and mechanics employed by contractors and sub8 contractors on projects funded directly by or assisted in 

9 whole or in part by and through the Federal Government 

10 pursuant to this Act, or the amendments made by this 

11 Act, or by any entity established in accordance with this 

12 Act, or the amendments made by this Act, including the 

13 Carbon Storage Research Corporation, will be paid wages 

14 at rates not less than those prevailing on projects of a 

15 character similar in the locality as determined by the Sec16 retary of Labor in accordance with subchapter IV of chap17 ter 31 of title 40, United States Code (commonly known 

18 as the ‘‘Davis-Bacon Act’’). With respect to the labor 

19 standards specified in this section, the Secretary of Labor 

20 shall have the authority and functions set forth in Reorga21 nization Plan Numbered 14 of 1950 (64 Stat. 1267; 5 

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

23 Code. 

24 (b) EXEMPTION.—Neither subsection (a) nor the re25 quirements of subchapter IV of chapter 31 of title 40, 


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1 United States Code, shall apply to retrofitting of the fol2 lowing: 

3 (1) Single family homes (both attached and de4 tached) under section 164 of division A. 

5 (2) Owner-occupied residential units in larger 

6 buildings that have their own dedicated space-condi7 tioning systems under section 164 of division A. 

8 (3) Residential buildings (as defined in section 

9 164(a) of division A) if designed for residential use 

10 by less than 4 families. 

11 (4) Nonresidential buildings (as defined in sec12 tion 164(a) of division A) if the net interior space 

13 of such nonresidential building is less than 6,500 

14 square feet. 

15 Subtitle D—Carbon Market 

16 Assurance 

17 SEC. 131. CARBON MARKET ASSURANCE. 

18 It is the sense of the Senate that there shall be a 

19 single, integrated carbon market oversight program— 

20 (1) to provide for effective and comprehensive 

21 market oversight and enforcement; 

22 (2) to lower systemic risk and protect con23 sumers; 

24 (3) to ensure market liquidity and allowance 

25 availability; 


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1 (4) to enhance the price discovery function of 

2 such markets, ensuring that the price for emission 

3 allowances and offset credits reflects the marginal 

4 cost of abatement; 

5 (5) to prevent excessive speculation that con6 tributes to price volatility, including the establish7 ment of robust aggregate position limits and margin 

8 requirements; 

9 (6) to ensure that market mechanisms and as10 sociated oversight support the environmental integ11 rity of the program established under title VII of the 

12 Clean Air Act (as added by section 101 of this divi13 sion); 

14 (7) to establish provisions for market trans15 parency that provide authority, resources, and infor16 mation needed to prevent fraud and manipulation in 

17 such markets; 

18 (8) to establish standards for trading as, and 

19 operation of, trading facilities; 

20 (9) to ensure a well-functioning, well-regulated 

21 market, including a futures market, designed to 

22 manage risk and facilitate investment in emission re23 ductions; 

24 (10) to establish clear, professional standards 

25 for dealers, traders, and other market participants; 


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1 (11) to provide for appropriate criminal and 

2 civil penalties; and 

3 (12) to prevent any excessive leverage by mar4 ket participants that creates risk to the economy. 

5 Subtitle E—Ensuring Real 

6 Reductions in Industrial Emissions 

7 SEC. 141. ENSURING REAL REDUCTIONS IN INDUSTRIAL 

8 EMISSIONS. 

9 Title VII of the Clean Air Act (as amended by section 

10 322 of division A) is amended by adding at the end the 

11 following: 

12 ‘‘PART F—ENSURING REAL REDUCTIONS IN 

13 INDUSTRIAL EMISSIONS 

14 ‘‘SEC. 761. PURPOSES. 

15 ‘‘The purposes of this part are— 

16 ‘‘(1) to promote a strong global effort to signifi17 cantly reduce greenhouse gas emissions, and, 

18 through this global effort, stabilize greenhouse gas 

19 concentrations in the atmosphere at a level that will 

20 prevent dangerous anthropogenic interference with 

21 the climate system; 

22 ‘‘(2) to prevent an increase in greenhouse gas 

23 emissions in countries other than the United States 

24 as a result of direct and indirect compliance costs in25 curred under this title; 


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1 ‘‘(3) to provide a rebate to the owners and op2 erators of entities in domestic eligible industrial sec3 tors for their greenhouse gas emission costs incurred 

4 under this title, but not for costs associated with 

5 other related or unrelated market dynamics; 

6 ‘‘(4) to design such rebates in a way that will 

7 prevent carbon leakage while also rewarding innova8 tion and facility-level investments in energy effi9 ciency performance improvements; and 

10 ‘‘(5) to eliminate or reduce distribution of emis11 sion allowances under this part when such distribu12 tion is no longer necessary to prevent carbon leakage 

13 from eligible industrial sectors. 

14 ‘‘SEC. 762. DEFINITIONS. 

15 ‘‘In this part: 

16 ‘‘(1) CARBON LEAKAGE.—The term ‘carbon 

17 leakage’ means any substantial increase (as deter18 mined by the Administrator) in greenhouse gas 

19 emissions by industrial entities located in other 

20 countries if such increase is caused by an incre21 mental cost of production increase in the United 

22 States resulting from the implementation of this 

23 title. 

24 ‘‘(2) ELIGIBLE INDUSTRIAL SECTOR.—The 

25 term ‘eligible industrial sector’ means an industrial 


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1 sector determined by the Administrator under sec2 tion 763(b) to be eligible to receive emission allow3 ance rebates under this part. 

4 ‘‘(3) INDUSTRIAL SECTOR.—The term ‘indus5 trial sector’ means any sector that is in the manu6 facturing sector (as defined in NAICS codes 31, 32, 

7 and 33) or that beneficiates or otherwise processes 

8 (including agglomeration) metal ores, including iron 

9 and copper ores, soda ash, or phosphate. The extrac10 tion of metal ores, soda ash, or phosphate shall not 

11 be considered to be an industrial sector. 

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 ‘‘SEC. 763. ELIGIBLE INDUSTRIAL SECTORS. 

21 ‘‘(a) LIST.— 

22 ‘‘(1) INITIAL LIST.—Not later than June 30, 

23 2011, the Administrator shall publish in the Federal 

24 Register a list of eligible industrial sectors pursuant 

25 to subsection (b). Such list shall include the amount 


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1 of the emission allowance rebate per unit of produc2 tion that shall be provided to entities in each eligible 

3 industrial sector in the following two calendar years 

4 pursuant to section 764. 

5 ‘‘(2) SUBSEQUENT LISTS.—Not later than Feb6 ruary 1, 2013, and every 4 years thereafter, the Ad7 ministrator shall publish in the Federal Register an 

8 updated version of the list published under para9 graph (1). 

10 ‘‘(b) ELIGIBLE INDUSTRIAL SECTORS.— 

11 ‘‘(1) IN GENERAL.—Not later than June 30, 

12 2011, the Administrator shall promulgate a rule des13 ignating, based on the criteria under paragraph (2), 

14 the industrial sectors eligible for emission allowance 

15 rebates under this part. 

16 ‘‘(2) PRESUMPTIVELY ELIGIBLE INDUSTRIAL

17 SECTORS.— 

18 ‘‘(A) ELIGIBILITY CRITERIA.— 

19 ‘‘(i) IN GENERAL.—An owner or oper20 ator of an entity shall be eligible to receive 

21 emission allowance rebates under this part 

22 if such entity is in an industrial sector that 

23 is included in a six-digit classification of 

24 the NAICS that meets the criteria in both 


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1 clauses (ii) and (iii), or the criteria in 

2 clause (iv). 

3 ‘‘(ii) ENERGY OR GREENHOUSE GAS

4 INTENSITY.—As determined by the Admin5 istrator, the industrial sector had— 

6 ‘‘(I) an energy intensity of at 

7 least 5 percent, calculated by dividing 

8 the cost of purchased electricity and 

9 fuel costs of the sector by the value of 

10 the shipments of the sector, based on 

11 data described in subparagraph (D); 

12 or 

13 ‘‘(II) a greenhouse gas intensity 

14 of at least 5 percent, calculated by di15 viding— 

16 ‘‘(aa) the number 20 multi17 plied by the number of tons of 

18 carbon dioxide equivalent green19 house gas emissions (including 

20 direct emissions from fuel com21 bustion, process emissions, and 

22 indirect emissions from the gen23 eration of electricity used to 

24 produce the output of the sector) 


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1 of the sector based on data de2 scribed in subparagraph (D); by 

3 ‘‘(bb) the value of the ship4 ments of the sector, based on 

5 data described in subparagraph 

6 (D). 

7 ‘‘(iii) TRADE INTENSITY.—As deter8 mined by the Administrator, the industrial 

9 sector had a trade intensity of at least 15 

10 percent, calculated by dividing the value of 

11 the total imports and exports of such sec12 tor by the value of the shipments plus the 

13 value of imports of such sector, based on 

14 data described in subparagraph (D). 

15 ‘‘(iv) VERY HIGH ENERGY OR GREEN16 HOUSE GAS INTENSITY.—As determined by 

17 the Administrator, the industrial sector 

18 had an energy or greenhouse gas intensity, 

19 as calculated under clause (ii)(I) or (II), of 

20 at least 20 percent. 

21 ‘‘(B) METAL AND PHOSPHATE PRODUC22 TION CLASSIFIED UNDER MORE THAN ONE

23 NAICS CODE.—For purposes of this section, the 

24 Administrator shall— 


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1 ‘‘(i) aggregate data for the 

2 beneficiation or other processing (including 

3 agglomeration) of metal ores, including 

4 iron and copper ores, soda ash, or phos5 phate with subsequent steps in the process 

6 of metal and phosphate manufacturing, re7 gardless of the NAICS code under which 

8 such activity is classified; and 

9 ‘‘(ii) aggregate data for the manufac10 turing of steel with the manufacturing of 

11 steel pipe and tube made from purchased 

12 steel in a nonintegrated process. 

13 ‘‘(C) EXCLUSION.—The petroleum refining 

14 sector shall not be an eligible industrial sector. 

15 ‘‘(D) DATA SOURCES.— 

16 ‘‘(i) ELECTRICITY AND FUEL COSTS, 

17 VALUE OF SHIPMENTS.—The Adminis18 trator shall determine electricity and fuel 

19 costs and the value of shipments under 

20 this subsection from data from the United 

21 States Census Annual Survey of Manufac22 turers. The Administrator shall take the 

23 average of data from as many of the years 

24 of 2004, 2005, and 2006 for which such 

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1 available, the Administrator shall make a 

2 determination based upon 2002 or 2006 

3 data from the most detailed industrial clas4 sification level of Energy Information 

5 Agency’s Manufacturing Energy Consump6 tion Survey (using 2006 data if it is avail7 able) and the 2002 or 2007 Economic Cen8 sus of the United States (using 2007 data 

9 if it is available). If data from the Manu10 facturing Energy Consumption Survey or 

11 Economic Census are unavailable for any 

12 sector at the six-digit classification level in 

13 the NAICS, then the Administrator may 

14 extrapolate the information necessary to 

15 determine the eligibility of a sector under 

16 this paragraph from available Manufac17 turing Energy Consumption Survey or 

18 Economic Census data pertaining to a 

19 broader industrial category classified in the 

20 NAICS. If data relating to the 

21 beneficiation or other processing (including 

22 agglomeration) of metal ores, including 

23 iron and copper ores, soda ash, or phos24 phate are not available from the specified 

25 data sources, the Administrator shall use 


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1 the best available Federal or State govern2 ment data and may use, to the extent nec3 essary, representative data submitted by 

4 entities that perform such beneficiation or 

5 other processing (including agglomeration), 

6 in making a determination. Fuel cost data 

7 shall not include the cost of fuel used as 

8 feedstock by an industrial sector. 

9 ‘‘(ii) IMPORTS AND EXPORTS.—The 

10 Administrator shall base the value of im11 ports and exports under this subsection on 

12 United States International Trade Com13 mission data. The Administrator shall take 

14 the average of data from as many of the 

15 years of 2004, 2005, and 2006 for which 

16 such data are available. If data from the 

17 United States International Trade Com18 mission are unavailable for any sector at 

19 the six-digit classification level in the 

20 NAICS, then the Administrator may ex21 trapolate the information necessary to de22 termine the eligibility of a sector under 

23 this paragraph from available United 

24 States International Trade Commission 


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1 data pertaining to a broader industrial cat2 egory classified in the NAICS. 

3 ‘‘(iii) PERCENTAGES.—The Adminis4 trator shall round the energy intensity, 

5 greenhouse gas intensity, and trade inten6 sity percentages under subparagraph (A) 

7 to the nearest whole number. 

8 ‘‘(iv) GREENHOUSE GAS EMISSION

9 CALCULATIONS.—When calculating the 

10 tons of carbon dioxide equivalent green11 house gas emissions for each sector under 

12 subparagraph (A)(ii)(II)(aa), the Adminis13 trator— 

14 ‘‘(I) shall use the best available 

15 data from as many of the years 2004, 

16 2005, and 2006 for which such data 

17 is available; and 

18 ‘‘(II) may, to the extent nec19 essary with respect to a sector, use 

20 economic and engineering models and 

21 the best available information on tech22 nology performance levels for such 

23 sector. 

24 ‘‘(3) ADMINISTRATIVE DETERMINATION OF AD25 DITIONAL ELIGIBLE INDUSTRIAL SECTORS.— 


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1 ‘‘(A) UPDATED TRADE INTENSITY DATA.— 

2 The Administrator shall designate as eligible to 

3 receive emission allowance rebates under this 

4 part an industrial sector that— 

5 ‘‘(i) met the energy or greenhouse gas 

6 intensity criteria in paragraph (2)(A)(ii) as 

7 of the date of promulgation of the rule 

8 under paragraph (1); and 

9 ‘‘(ii) meets the trade intensity criteria 

10 in paragraph (2)(A)(iii), using data from 

11 any year after 2006. 

12 ‘‘(B) INDIVIDUAL SHOWING PETITION.— 

13 ‘‘(i) PETITION.—In addition to des14 ignation under paragraph (2) or subpara15 graph (A) of this paragraph, the owner or 

16 operator of an entity in an industrial sec17 tor may petition the Administrator to des18 ignate as eligible industrial sectors under 

19 this part an entity or a group of entities 

20 that— 

21 ‘‘(I) represent a subsector of a 

22 six-digit section of the NAICS code; 

23 and 

24 ‘‘(II) meet the eligibility criteria 

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1 graph (2)(A), or the eligibility criteria 

2 in clause (iv) 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)(D). 

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 primarily 

21 virgin material to be a separate subsector 

22 from another entity or group of entities 

23 that manufacture the same product pri24 marily from recycled material. 


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1 ‘‘(iv) USE OF MOST RECENT DATA.— 

2 In determining whether to designate a sec3 tor or subsector as an eligible industrial 

4 sector under this subparagraph, the Ad5 ministrator shall use the most recent data 

6 available from the sources described in 

7 paragraph (2)(D), rather than the data 

8 from the years specified in paragraph 

9 (2)(D), to determine the trade intensity of 

10 such sector or subsector, but only for de11 termining such trade intensity. 

12 ‘‘(v) FINAL ACTION.—The Adminis13 trator shall take final action on such peti14 tion no later than 6 months after the peti15 tion is received by the Administrator. 

16 ‘‘SEC. 764. DISTRIBUTION OF EMISSION ALLOWANCE RE17 BATES. 

18 ‘‘(a) DISTRIBUTION SCHEDULE.— 

19 ‘‘(1) IN GENERAL.—For each vintage year, the 

20 Administrator shall distribute pursuant to this sec21 tion emission allowances made available under sec22 tion 771(a)(5), no later than October 31 of the pre23 ceding calendar year. The Administrator shall make 

24 such annual distributions to the owners and opera25 tors of each entity in an eligible industrial sector in 


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1 the amount of emission allowances calculated under 

2 subsection (b), except that— 

3 ‘‘(A) for vintage years 2012 and 2013, the 

4 distribution for a covered entity shall be pursu5 ant to the entity’s indirect carbon factor as cal6 culated under subsection (b)(3); 

7 ‘‘(B) for vintage year 2026 and thereafter, 

8 the distribution shall be pursuant to the 

9 amount calculated under subsection (b) multi10 plied by, for a sector— 

11 ‘‘(i) 90 percent for vintage year 2026; 

12 ‘‘(ii) 80 percent for vintage year 

13 2027; 

14 ‘‘(iii) 70 percent for vintage year 

15 2028; 

16 ‘‘(iv) 60 percent for vintage year 

17 2029; 

18 ‘‘(v) 50 percent for vintage year 2030; 

19 ‘‘(vi) 40 percent for vintage year 

20 2031; 

21 ‘‘(vii) 30 percent for vintage year 

22 2032; 

23 ‘‘(viii) 20 percent for vintage year 

24 2033; 


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1 ‘‘(ix) 10 percent for vintage year 

2 2034; and 

3 ‘‘(x) 0 percent for vintage year 2035 

4 and thereafter. 

5 ‘‘(2) NEWLY ELIGIBLE SECTORS.—In addition 

6 to receiving a distribution of emission allowances 

7 under this section in the first distribution occurring 

8 after an industrial sector is designated as eligible 

9 under section 763(b)(3), the owner or operator of an 

10 entity in that eligible industrial sector may receive a 

11 prorated share of any emission allowances made 

12 available for distribution under this section that 

13 were not distributed for the year in which the peti14 tion for eligibility was granted under section 

15 763(b)(3)(A). 

16 ‘‘(3) CESSATION OF QUALIFYING ACTIVITIES.— 

17 If, as determined by the Administrator, a facility is 

18 no longer in an eligible industrial sector designated 

19 under section 763— 

20 ‘‘(A) the Administrator shall not distribute 

21 emission allowances to the owner or operator of 

22 such facility under this section; and 

23 ‘‘(B) the owner or operator of such facility 

24 shall return to the Administrator all allowances 

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1 tage years and a pro-rated amount of allow2 ances distributed to the facility under this sec3 tion for the vintage year in which the facility 

4 ceases to be in an eligible industrial sector des5 ignated under section 763. 

6 ‘‘(b) CALCULATION OF DIRECT AND INDIRECT CAR7 BON FACTORS.— 

8 ‘‘(1) IN GENERAL.— 

9 ‘‘(A) COVERED ENTITIES.—Except as pro10 vided in subsection (a), for covered entities that 

11 are in eligible industrial sectors, the amount of 

12 emission allowance rebates shall be based on 

13 the sum of the covered entity’s direct and indi14 rect carbon factors. 

15 ‘‘(B) OTHER ELIGIBLE ENTITIES.—For 

16 entities that are in eligible industrial sectors 

17 but are not covered entities, the amount of 

18 emission allowance rebates shall be based on 

19 the entity’s indirect carbon factor. 

20 ‘‘(C) NEW ENTITIES.—Not later than 2 

21 years after the date of enactment of this title, 

22 the Administrator shall issue regulations gov23 erning the distribution of emission allowance re24 bates for the first and second years of operation 


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1 of a new entity in an eligible industrial sector. 

2 These regulations shall provide for— 

3 ‘‘(i) the distribution of emission allow4 ance rebates to such entities based on com5 parable entities in the same sector; and 

6 ‘‘(ii) an adjustment in the third and 

7 fourth years of operation to reconcile the 

8 total amount of emission allowance rebates 

9 received during the first and second years 

10 of operation to the amount the entity 

11 would have received during the first and 

12 second years of operation had the appro13 priate data been available. 

14 ‘‘(2) DIRECT CARBON FACTOR.—The direct car15 bon factor for a covered entity for a vintage year is 

16 the product of— 

17 ‘‘(A) the average annual output of the cov18 ered entity for the 2 years preceding the year 

19 of the distribution; and 

20 ‘‘(B) the most recent calculation of the av21 erage direct greenhouse gas emissions (ex22 pressed in tons of carbon dioxide equivalent) 

23 per unit of output for all covered entities in the 

24 sector, as determined by the Administrator 

25 under paragraph (4). 


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1 ‘‘(3) INDIRECT CARBON FACTOR.— 

2 ‘‘(A) IN GENERAL.—The indirect carbon 

3 factor for an entity for a vintage year is the 

4 product obtained by multiplying the average an5 nual output of the entity for the 2 years pre6 ceding the year of the distribution by both the 

7 electricity emissions intensity factor determined 

8 pursuant to subparagraph (B) and the elec9 tricity efficiency factor determined pursuant to 

10 subparagraph (C) for the year concerned. 

11 ‘‘(B) ELECTRICITY EMISSIONS INTENSITY

12 FACTOR.— 

13 ‘‘(i) IN GENERAL.—Each person sell14 ing electricity to the owner or operator of 

15 an entity in any sector designated as an el16 igible industrial sector under section 

17 763(b) shall provide the owner or operator 

18 of the entity and the Administrator, on an 

19 annual basis, the electricity emissions in20 tensity factor for the entity. The electricity 

21 emissions intensity factor for the entity, 

22 expressed in tons of carbon dioxide equiva23 lents per kilowatt hour, is determined by 

24 dividing— 


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1 ‘‘(I) the annual sum of the hour2 ly product of— 

3 ‘‘(aa) the electricity pur4 chased by the entity from that 

5 person in each hour (expressed in 

6 kilowatt hours); multiplied by 

7 ‘‘(bb) the marginal or 

8 weighted average tons of carbon 

9 dioxide equivalent per kilowatt 

10 hour that are reflected in the 

11 electricity charges to the entity, 

12 as determined by the entity’s re13 tail rate arrangements; by 

14 ‘‘(II) the total kilowatt hours of 

15 electricity purchased by the entity 

16 from that person during that year. 

17 ‘‘(ii) USE OF OTHER DATA TO DETER18 MINE FACTOR.—Where it is not possible to 

19 determine the precise electricity emissions 

20 intensity factor for an entity using the 

21 methodology in clause (i), the person sell22 ing electricity shall use the monthly aver23 age data reported by the Energy Informa24 tion Administration or collected and re25 ported by the Administrator for the utility 


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1 serving the entity to determine the elec2 tricity emissions intensity factor. 

3 ‘‘(C) ELECTRICITY EFFICIENCY FACTOR.— 

4 The electricity efficiency factor is the average 

5 amount of electricity (in kilowatt hours) used 

6 per unit of output for all entities in the relevant 

7 sector, as determined by the Administrator 

8 based on the best available data, including data 

9 provided under paragraph (6). 

10 ‘‘(D) INDIRECT CARBON FACTOR REDUC11 TION.—If an electricity provider received a free 

12 allocation of emission allowances pursuant to 

13 section 771(a)(1), the Administrator shall ad14 just the indirect carbon factor to avoid rebates 

15 to the eligible entity for costs that the Adminis16 trator determines were not incurred by the eli17 gible entity because the allowances were freely 

18 allocated to the eligible entity’s electricity pro19 vider and used for the benefit of industrial con20 sumers. 

21 ‘‘(4) GREENHOUSE GAS INTENSITY CALCULA22 TIONS.—The Administrator shall calculate the aver23 age direct greenhouse gas emissions (expressed in 

24 tons of carbon dioxide equivalent) per unit of output 

25 and the electricity efficiency factor for all covered 


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1 entities in each eligible industrial sector every 4 

2 years, using an average of the four most recent 

3 years of the best available data. For purposes of the 

4 lists required to be published no later than February 

5 1, 2013, the Administrator shall use the best avail6 able data for the maximum number of years, up to 

7 4 years, for which data are available. 

8 ‘‘(5) ENSURING EFFICIENCY IMPROVEMENTS.— 

9 When making greenhouse gas calculations, the Ad10 ministrator shall— 

11 ‘‘(A) limit the average direct greenhouse 

12 gas emissions per unit of output, calculated 

13 under paragraph (4), for any eligible industrial 

14 sector to an amount that is not greater than it 

15 was in any previous calculation under this sub16 section; 

17 ‘‘(B) limit the electricity emissions inten18 sity factor, calculated under paragraph (3)(B) 

19 and resulting from a change in electricity sup20 ply, for any entity to an amount that is not 

21 greater than it was during any previous year; 

22 and 

23 ‘‘(C) limit the electricity efficiency factor, 

24 calculated under paragraph (3)(C), for any eli25 gible industrial sector to an amount that is not 


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1 greater than it was in any previous calculation 

2 under this subsection. 

3 ‘‘(6) DATA SOURCES.—For the purposes of this 

4 subsection— 

5 ‘‘(A) the Administrator shall use data from 

6 the greenhouse gas registry established under 

7 section 713, where it is available; and 

8 ‘‘(B) each owner or operator of an entity 

9 in an eligible industrial sector and each depart10 ment, agency, and instrumentality of the 

11 United States shall provide the Administrator 

12 with such information as the Administrator 

13 finds necessary to determine the direct carbon 

14 factor and the indirect carbon factor for each 

15 entity subject to this section. 

16 ‘‘(c) TOTAL MAXIMUM DISTRIBUTION.—Notwith17 standing subsections (a) and (b), the Administrator shall 

18 not distribute more allowances for any vintage year pursu19 ant to this section than are allocated for use under this 

20 part pursuant to section 765 for that vintage year. For 

21 any vintage year for which the total emission allowance 

22 rebates calculated pursuant to this section exceed the 

23 number of allowances allocated pursuant to section 765, 

24 the Administrator shall reduce each entity’s distribution 

25 on a pro rata basis so that the total distribution under 


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1 this section equals the number of allowances allocated 

2 under section 765. 

3 ‘‘(d) IRON AND STEEL SECTOR.—For purposes of 

4 this section, the Administrator shall consider as in dif5 ferent industrial sectors— 

6 ‘‘(1) entities using integrated iron and 

7 steelmaking technologies (including coke ovens, blast 

8 furnaces, and other iron-making technologies); and 

9 ‘‘(2) entities using electric arc furnace tech10 nologies. 

11 ‘‘(e) METAL, SODA ASH, OR PHOSPHATE PRODUC12 TION CLASSIFIED UNDER MORE THAN ONE NAICS

13 CODE.—For purposes of this section, the Administrator 

14 shall not aggregate data for the beneficiation or other 

15 processing (including agglomeration) of metal ores, soda 

16 ash, or phosphate with subsequent steps in the process 

17 of metal, soda ash, or phosphate manufacturing. The Ad18 ministrator shall consider the beneficiation or other proc19 essing (including agglomeration) of metal ores, soda ash, 

20 or phosphate to be in separate industrial sectors from the 

21 metal, soda ash, or phosphate manufacturing sectors. In22 dustrial sectors that beneficiate or otherwise process (in23 cluding agglomeration) metal ores, soda ash, or phosphate 

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1 tion related to the activity of extracting metal ores, soda 

2 ash, or phosphate. 

3 ‘‘(f) COMBINED HEAT AND POWER.—For purposes 

4 of this section, and to achieve the purpose set forth in 

5 section 761(4),(the Administrator may consider entities to 

6 be in different industrial sectors or otherwise take into ac7 count the differences among entities in the same industrial 

8 sector, based upon the extent to which such entities use 

9 combined heat and power technologies. 

10 ‘‘SEC. 765. INTERNATIONAL TRADE. 

11 ‘‘It is the sense of the Senate that this Act will con12 tain a trade title that will include a border measure that 

13 is consistent with our international obligations and de14 signed to work in conjunction with provisions that allocate 

15 allowances to energy-intensive and trade-exposed indus16 tries.’’. 

17 TITLE II—PROGRAM 

18 ALLOCATIONS 

19 SEC. 201. INVESTMENT IN CLEAN VEHICLE TECHNOLOGY. 

20 (a) ESTABLISHMENT OF FUND.—There is estab21 lished in the Treasury a separate account, which shall be 

22 known as the ‘‘Clean Vehicle Technology Fund’’. 

23 (b) AUCTION PROCEEDS.—The Administrator shall 

24 deposit the proceeds of the auction conducted pursuant 


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1 to section 771(b)(3) of the Clean Air Act in the Clean 

2 Vehicle Technology Fund. 

3 (c) AVAILABILITY OF AMOUNTS.—Of the amounts 

4 deposited in the Clean Vehicle Technology Fund— 

5 (1) 80 percent shall be available to the Sec6 retary of Energy to support— 

7 (A) the development and demonstration of 

8 a national transportation low-emissions energy 

9 plan; and 

10 (B) the use of plug-in electric drive vehi11 cles, including medium- and heavy-duty motor 

12 vehicles (including transit vehicles) and other 

13 advanced technology vehicles (as defined in sec14 tions 131 and 136 of the Energy Independence 

15 and Security Act of 2007 (42 U.S.C. 17011, 

16 17013)) that are developed and produced in the 

17 United States; and 

18 (2) 20 percent of the amounts shall be available 

19 to the Administrator for use in providing grants au20 thorized under subtitle G of title VII of the Energy 

21 Policy Act of 2005 (42 U.S.C. 16131 et seq.). 

22 (d) PILOT PROGRAM.— 

23 (1) IN GENERAL.—Of the amounts deposited in 

24 accordance with (c)(1), the Secretary of Energy 

25 shall use not more than 5 percent to develop a naVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00779 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 tional transportation low-emissions energy plan that 

2 shall— 

3 (A) project the near- and long-term need 

4 for and location of electric drive vehicle refuel5 ing infrastructure at strategic locations across 

6 all major national highways, roads, and cor7 ridors; 

8 (B) identify infrastructure and standard9 ization needs for electricity providers, infra10 structure providers, vehicle manufacturers, and 

11 electricity purchasers; 

12 (C) establish an aspirational goal of 

13 achieving strategic deployment of electric vehi14 cle infrastructure by 2020; 

15 (D) be developed by the Secretary with the 

16 involvement of all relevant stakeholders; and 

17 (E) prioritize the development of— 

18 (i) standardized public charge access 

19 ports with wireless or smart card billing 

20 capability; and 

21 (ii) level I and level II charge port 

22 systems (that charge an electric vehicle 

23 over a period of 8 to 14 hours and 4 to 8 

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1 ergy requirements of the majority of plug2 in hybrid and battery electric vehicles; 

3 (F) examine the feasibility of level III 

4 charge port systems that can charge an electric 

5 vehicle over a period of 10 to 20 minutes; and 

6 (G) focus on infrastructure that provides 

7 consumers with the lowest cost while providing 

8 convenient charge system access. 

9 (2) ELECTRIC DRIVE DEMONSTRATION

10 PROJECTS.— 

11 (A) IN GENERAL.—The Secretary shall es12 tablish pilot projects to demonstrate electric 

13 drive vehicles and infrastructure. 

14 (B) REQUIREMENTS.—The Secretary 

15 shall— 

16 (i) establish the pilot projects de17 scribed in subparagraph (A) after publica18 tion of the plan developed under paragraph 

19 (1); 

20 (ii) use the plan to determine which 

21 regions of the United States are most 

22 ready to demonstrate electric vehicle infra23 structure; 


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1 (iii) carry out the pilot projects under 

2 this paragraph in different regions of the 

3 United States; and 

4 (iv) ensure that— 

5 (I) at least 1 pilot project is car6 ried out in a rural region of the 

7 United States; and 

8 (II) at least 1 pilot project is fo9 cused on freight issues. 

10 (3) FINANCIAL RESOURCES.—In carrying out 

11 the pilot projects under paragraph (2), the Secretary 

12 shall coordinate the use of appropriate financial in13 centives, grant programs, and other Federal finan14 cial resources to ensure that electric infrastructure 

15 delivery entities are able to participate in the pilot 

16 projects. 

17 (4) LEEP COORDINATOR.—The Secretary may 

18 designate 1 full-time position within the Department 

19 of Transportation, to be known as the ‘‘LEEP coor20 dinator’’, with responsibility to oversee— 

21 (A) the development of the plan under 

22 paragraph (1); and 

23 (B) the implementation of the pilot 

24 projects under paragraph (2). 


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1 SEC. 202. STATE AND LOCAL INVESTMENT IN ENERGY EFFI2 CIENCY AND RENEWABLE ENERGY. 

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

4 (1) ALLOWANCE.—The term ‘‘allowance’’ 

5 means an emission allowance established under sec6 tion 721 of the Clean Air Act. 

7 (2) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 

8 has the meaning given the term in section 4 of the 

9 Indian Self-Determination and Education Assistance 

10 Act (25 U.S.C. 450b). 

11 (3) VINTAGE YEAR.—The term ‘‘vintage year’’ 

12 has the meaning given the term in section 700 of the 

13 Clean Air Act. 

14 (b) DISTRIBUTION AMONG INDIAN TRIBES, STATES, 

15 LOCAL GOVERNMENTS, METROPOLITAN PLANNING ORGA16 NIZATIONS AND RENEWABLE ELECTRICITY GENERA17 TIONS.—The Administrator shall, in accordance with this 

18 section, distribute allowances allocated pursuant to section 

19 771(a)(8) of the Clean Air Act for the following vintage 

20 year. The Administrator, after consultation with the Sec21 retary of the Interior, shall distribute not less than 1 per22 cent of such allowances to Indian tribes. The Adminis23 trator, after consultation with the Secretary of Energy 

24 and the with the assistance of the Secretary of Transpor25 tation, shall distribute the remaining allowances among 

26 the States, local governments, metropolitan planning orgaVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00783 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 nizations, and renewable electricity generations under this 

2 section each year in accordance with the following for3 mula: 

4 (1) 62.5 percent of the allowances shall be pro5 vided to the States, of which— 

6 (A) 30 percent shall be divided equally 

7 among the States; 

8 (B) 30 percent shall be distributed on a 

9 pro rata basis among the States based on the 

10 population of each State, as contained in the 

11 most recent reliable census data available from 

12 the Bureau of the Census for all States at the 

13 time at which the Administrator calculates the 

14 formula for distribution; 

15 (C) 30 percent shall be distributed on a 

16 pro rata basis among the States on the basis of 

17 the energy consumption of each State, as con18 tained in the most recent State Energy Data 

19 Report available from the Energy Information 

20 Administration (or such alternative reliable 

21 source as the Administrator may designate); 

22 and 

23 (D) 10 percentage shall be provided to the 

24 States based on an energy-efficiency formula 


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1 developed by the Administrator, which formula 

2 shall be— 

3 (i) based on— 

4 (I) weather-adjusted criteria; and 

5 (II) performance-based metrics 

6 that measure each State’s success at 

7 decreasing energy consumption or in8 creasing energy efficiency— 

9 (aa) on a per capita basis in 

10 the residential sector; and 

11 (bb) on an energy consump12 tion per square-foot basis in the 

13 commercial sector; and 

14 (ii) updated every 3 years. 

15 (2) 25 percent of the allowances shall be pro16 vided to local governments for energy conservation 

17 and efficiency grants. 

18 (3) 10 percent of the allowances shall be re19 served by the Secretary of Transportation for grants 

20 to States and metropolitan planning organizations 

21 for greenhouse gas reduction programs in the trans22 portation sector. 

23 (4) 2.5 percent of the allowances shall be pro24 vided to renewable energy generating companies with 

25 a capacity of 20 megawatts or greater exclusively for 


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1 the generation of renewable energy. The Adminis2 trator, in consultation with the Secretary of Energy, 

3 shall award allocations to renewable energy genera4 tion companies based on the number of megawatt5 hours the company generates and the technology 

6 used. The Administrator shall promulgate such regu7 lations as are appropriate to carry out this para8 graph. 

9 (c) USES.—The allowances distributed to each State, 

10 local government, and metropolitan planning organization 

11 pursuant to this section shall be used exclusively in accord12 ance with the following requirements: 

13 (1) ALLOCATION TO STATES.—Allowances allo14 cated to the States under subsection (b)(1) shall be 

15 for the following purposes and be used in accordance 

16 with the following conditions: 

17 (A) PURPOSES.— 

18 (i) ENERGY EFFICIENCY PRO19 GRAMS.—Not less than 35 percent shall be 

20 used exclusively for— 

21 (I) implementation and enforce22 ment of building codes; 

23 (II) implementation of the en24 ergy-efficient manufactured homes 

25 program; 


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1 (III) implementation of building 

2 energy performance labeling; and 

3 (IV) low-income community en4 ergy efficiency programs. 

5 (ii) RENEWABLE ENERGY PRO6 GRAMS.—Renewable energy programs for 

7 capital grants, production incentives, loans, 

8 loan guarantees, forgivable loans, direct 

9 provision of allowances, and interest rate 

10 buy-downs for— 

11 (I) re-equipping, expanding, or 

12 establishing a manufacturing facility 

13 that receives certification from the 

14 Secretary of Energy pursuant to sec15 tion 48C of the Internal Revenue 

16 Code of 1986 for the production of— 

17 (aa) property designed to be 

18 used to produce energy from re19 newable energy sources; and 

20 (bb) electricity storage sys21 tems; 

22 (II) deployment of technologies to 

23 generate electricity from renewable 

24 energy sources; and 


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1 (III) deployment of facilities or 

2 equipment, such as solar panels, to 

3 generate electricity or thermal energy 

4 from renewable energy resources in 

5 and on buildings in an urban environ6 ment. 

7 (iii) IMPROVEMENT IN ELECTRICITY

8 TRANSMISSION.—Improvement in elec9 tricity transmission for 1 or more of the 

10 following purposes: 

11 (I) State implementation of elec12 tricity transmission planning and 

13 siting activities that facilitate renew14 able energy development, including fa15 cilitation of landowner negotiations 

16 for transmission of right-of-way leas17 ing or other contractual arrange18 ments. 

19 (II) Grants to nonprofit organi20 zations that facilitate negotiations for 

21 transmission right-of-way leasing or 

22 other contractual agreements between 

23 landowners and developers. 

24 (III) State or regional studies of 

25 renewable energy zones and resources 


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1 with insufficient transmission capac2 ity, including geographical identifica3 tion of potential renewable energy 

4 sites, environmental reviews, and land 

5 use or coastal zone constraints. 

6 (IV) Grants to support land7 owner associations’ and other non8 profit organizations’ participation in 

9 State and Federal siting processes, in10 cluding such associations’ studies of 

11 renewable energy feasibility and bene12 fits and associated data collection. 

13 (V) Grants to landowners or 

14 landowner associations or nonprofit 

15 organizations for mitigation of im16 pacts on property or ecosystems due 

17 to transmission projects that are part 

18 of an interconnection-wide plan fo19 cused on facilitating renewable energy 

20 development. 

21 (VI) Training for State regu22 latory authority staff and local 

23 workforces relating to renewable en24 ergy generation resources and storage, 


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1 smart grid, or new transmission tech2 nologies. 

3 (VII) Grants to transmission pro4 viders for transmission improvements 

5 (including smart grid investments) 

6 that benefit consumers. 

7 (VIII) Grants to transmission 

8 providers for security upgrades to the 

9 transmission system and authorized 

10 uses under title XIII of the Energy 

11 Independence and Security Act of 

12 2007 (42 U.S.C. 17381 et seq.). 

13 (IX) Grants to develop energy 

14 storage, reliability, or distributed re15 newable generation projects. 

16 (iv) END-USE CONSUMERS.—Cost-ef17 fective energy efficiency programs for end18 use consumers of electricity, natural gas, 

19 home heating oil, or propane, including, 

20 where appropriate, programs or mecha21 nisms administered by local governments 

22 and entities other than the State. 

23 (v) RETROFITS AND HOUSING INVEST24 MENTS.—Energy retrofits and green in25 vestments in subsidized housing based on 


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1 standards to ensure that investments are 

2 cost-effective, taking into account reduc3 tions in future use of energy and other 

4 utilities, and the extent to which such ret5 rofits and investments address repair and 

6 replacement needs that may otherwise need 

7 to be addressed with other forms of assist8 ance. As a condition of such funding, the 

9 recipient shall commit to an additional pe10 riod of affordability of not fewer than 15 

11 years, covering all units for which such 

12 grants and loans are used. 

13 (vi) THERMAL ENERGY EFFI14 CIENCY.—Not less than 2 percent shall be 

15 used for thermal energy efficiency projects 

16 that provide district thermal energy 

17 through a network of pipes from 1 or more 

18 central plants to at least 2 or more build19 ings, combined heat and power that pro20 duces electricity and thermal energy with a 

21 minimum 60 percent overall efficiency on a 

22 lower-heating value basis, or recoverable 

23 waste energy (including mechanical, ther24 mal, or electrical energy) that, if not for 

25 recovery, would be wasted and may be reVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00791 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 covered or generated through modification 

2 of an existing facility or addition of a new 

3 facility. Allocations may be used for plan4 ning, engineering, and feasibility studies as 

5 well as project construction and develop6 ment. Such projects shall— 

7 (I) reduce or avoid greenhouse 

8 gas emissions; and 

9 (II)(aa) produce thermal energy 

10 from renewable energy resources or 

11 natural cooling sources; 

12 (bb) capture and productively use 

13 thermal energy from an electric gen14 eration facility; 

15 (cc) integrate new electricity gen16 eration into an existing district energy 

17 system; 

18 (dd) capture and productively 

19 uses surplus thermal energy from an 

20 industrial or municipal process (such 

21 as wastewater treatment); or 

22 (ee) distribute and transfer to 

23 buildings the thermal energy from the 

24 energy sources described in items (aa) 

25 through (dd). 


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1 (vii) SMART GRID DEVELOPMENT.— 

2 Enabling the development of a Smart Grid 

3 (as described in section 1301 of the En4 ergy Independence and Security Act of 

5 2007 (42 U.S.C. 17381)) for State, local 

6 government, and other public buildings and 

7 facilities, including integration of renew8 able energy resources and distributed gen9 eration, demand response, demand-side 

10 management, and systems analysis. 

11 (B) CONDITIONS.— 

12 (i) IN GENERAL.—The States shall 

13 prioritize expansion of existing energy effi14 ciency programs approved and overseen by 

15 the State or the appropriate State regu16 latory authority. 

17 (ii) SUPPLEMENTATION.—The States 

18 shall demonstrate that such allowances 

19 have been used to supplement, and not to 

20 supplant, existing and otherwise available 

21 State, local, and ratepayer funding for 

22 such purpose. 

23 (2) ENERGY CONSERVATION AND EFFI24 CIENCY.—Allowances allocated to local governments 

25 under subsection (b)(2) shall be used exclusively for 


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1 energy conservation and efficiency purposes specified 

2 under section 543 of the Energy Independence and 

3 Security Act of 2007 (42 U.S.C. 17153). 

4 (3) STATE AND MPO GRANTS.—Allocation to 

5 the Secretary of Transportation for grants to States 

6 and metropolitan planning organizations under sub7 section (b)(3) shall be used exclusively for the 

8 Transportation Greenhouse Gas Reduction program 

9 in accordance with sections 831 and 832 of the 

10 Clean Air Act. 

11 (d) REPORTING.—Each Indian tribe, State, local gov12 ernment, metropolitan planning organization, and renew13 able electricity generating company directly receiving al14 lowances or allowance value under this section shall sub15 mit to the Administrator a report that contains a list of 

16 entities receiving allowances or allowance value under this 

17 section. 

18 (e) ENFORCEMENT.—If the Administrator deter19 mines that an Indian tribe, State, local government, met20 ropolitan planning organization, or renewable electricity 

21 generation company is not in compliance with this section, 

22 the Administrator may withhold up to twice the number 

23 of allowances or allowance value that the Indian tribe, 

24 State, local government, metropolitan planning organiza25 tion, or renewable electricity generation company failed to 


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1 use in accordance with the requirements of this section, 

2 that such Indian tribe, State, local government, metropoli3 tan planning organization, or renewable electricity genera4 tion companies would otherwise be eligible to receive under 

5 this section in later years. Allowances withheld pursuant 

6 to this subsection shall be distributed among the remain7 ing Indian tribes, States, local governments, metropolitan 

8 planning organizations, and renewable electricity genera9 tion companies in accordance with subsection (b). 

10 SEC. 203. ENERGY EFFICIENCY IN BUILDING CODES. 

11 The Administrator shall distribute emission allow12 ances allocated for the following vintage year pursuant to 

13 section 771(a)(9) of the Clean Air Act among the States 

14 in accordance with the formula described in section 202 

15 of this division exclusively for the purpose of section 163 

16 of division A. 

17 SEC. 204. BUILDING RETROFIT PROGRAM. 

18 The Administrator shall distribute emission allow19 ances allocated for the following vintage year pursuant to 

20 section 771(a)(10) of the Clean Air Act among the States 

21 in accordance with the formula described in section 202 

22 of this division exclusively for the purpose of section 164 

23 of division A. 


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1 SEC. 205. ENERGY INNOVATION HUBS. 

2 (a) PURPOSE.—The Secretary shall carry out a pro3 gram in accordance with this section to establish Energy 

4 Innovation Hubs to enhance the economic, environmental, 

5 and energy security of the United States by promoting 

6 commercial application of clean, indigenous energy alter7 natives to oil and other fossil fuels, reducing greenhouse 

8 gas emissions, and ensuring that the United States main9 tains a technological lead in the development and commer10 cial application of state-of-the-art energy technologies. 

11 (b) DISTRIBUTION OF ALLOWANCES TO ENERGY IN12 NOVATION HUBS.—The Secretary shall, in accordance 

13 with the requirements of this section, distribute to eligible 

14 consortia allowances allocated for the following vintage 

15 year under section 772(a)(11) of the Clean Air Act. 

16 SEC. 206. ARPA–E RESEARCH. 

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

18 (1) ALLOWANCE.—The term ‘‘allowance’’ 

19 means an emission allowance established under sec20 tion 721 of the Clean Air Act. 

21 (2) DIRECTOR.—The term ‘‘Director’’ means 

22 Director of the Advanced Research Projects Agency– 

23 Energy. 

24 (b) DISTRIBUTION OF ALLOWANCES.—The Director, 

25 in accordance with this section, shall distribute allowances 

26 allocated for the following vintage year under section 


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1 771(a)(12) of the Clean Air Act. Such allowances shall 

2 be distributed on a competitive basis to institutions of 

3 higher education, companies, research foundations, trade 

4 and industry research collaborations, or consortia of such 

5 entities, or other appropriate research and development 

6 entities to achieve the goals of the Advanced Research 

7 Projects Agency-Energy (as described in section 5012(c) 

8 of the America COMPETES Act (42 U.S.C. 16538(c))) 

9 through targeted acceleration of— 

10 (1) novel early-stage energy research with pos11 sible technology applications; 

12 (2) development of techniques, processes, and 

13 technologies, and related testing and evaluation; 

14 (3) development of manufacturing processes for 

15 technologies; and 

16 (4) demonstration and coordination with non17 governmental entities for commercial applications of 

18 technologies and research applications. 

19 (c) SUPPLEMENT NOT SUPPLANT.—Assistance pro20 vided under this section shall be used to supplement, and 

21 not to supplant, any other Federal resources available to 

22 carry out activities described in this section. 


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1 SEC. 207. INTERNATIONAL CLEAN ENERGY DEPLOYMENT 

2 PROGRAM. 

3 The Secretary of State shall distribute emission al4 lowances allocated for the following vintage year pursuant 

5 to section 771(a)(13) of the Clean Air Act exclusively for 

6 the purpose of section 323 of division A. 

7 SEC. 208. INTERNATIONAL CLIMATE CHANGE ADAPTATION 

8 AND GLOBAL SECURITY. 

9 The Secretary of State shall distribute emission al10 lowances allocated for the following vintage year pursuant 

11 to section 771(a)(14) of the Clean Air Act exclusively for 

12 the purpose of section 324 of division A. 

13 SEC. 209. ENERGY EFFICIENCY AND RENEWABLE ENERGY 

14 WORKER TRAINING. 

15 (a) ESTABLISHMENT OF FUND.—There is estab16 lished in the Treasury a separate account, to be known 

17 as the ‘‘Energy Efficiency and Renewable Energy Worker 

18 Training Fund’’. 

19 (b) AUCTION PROCEEDS.—The Administrator shall 

20 deposit the proceeds of the auction conducted pursuant 

21 to section 771(b)(5) of the Clean Air Act in the Energy 

22 Efficiency and Renewable Energy Worker Training Fund. 

23 (c) AVAILABILITY OF AMOUNTS.—The Secretary of 

24 Energy shall use the amounts deposited in the Energy Ef25 ficiency and Renewable Energy Worker Training Fund 

26 under subsection (b) to carry out section 171(e)(8) of the 


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1 Workforce Investment Act of 1998 (29 U.S.C. 2916(e)(8)) 

2 without further appropriation or fiscal year limitation. 

3 SEC. 210. WORKER TRANSITION. 

4 (a) ESTABLISHMENT OF FUND.—There is estab5 lished in the Treasury a separate account, to be known 

6 as the ‘‘Worker Transition Fund’’. 

7 (b) AUCTION PROCEEDS.—The Administrator shall 

8 deposit the proceeds of the auction conducted pursuant 

9 to section 771(b)(6) of the Clean Air Act in the Worker 

10 Transition Fund. 

11 (c) AVAILABILITY OF AMOUNTS.—The amounts de12 posited in the Worker Transition Fund shall be used to 

13 carry out part 2 of subtitle A of title III of division A. 

14 SEC. 211. STATE PROGRAMS FOR GREENHOUSE GAS RE15 DUCTION AND CLIMATE ADAPTATION. 

16 (a) DEFINITIONS.—In this section: 

17 (1) ALASKA NATIVE VILLAGE.—The term 

18 ‘‘Alaska Native village’’ means a federally recognized 

19 Indian tribe located in the State of Alaska and listed 

20 in the Bureau of Indian Affairs publication entitled 

21 ‘‘Indian Entities Recognized and Eligible to Receive 

22 Services from the United States Bureau of Indian 

23 Affairs’’ (74 Fed. Reg. 40218 (Aug. 11, 2009)). 


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1 (2) ALLOWANCE.—The term ‘‘allowance’’ 

2 means an emission allowance established under sec3 tion 721 of the Clean Air Act. 

4 (3) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 

5 has the meaning given the term in section 4 of the 

6 Indian Self-Determination and Education Assistance 

7 Act (25 U.S.C. 450b). 

8 (4) SCCR ACCOUNT.—The term ‘‘SCCR Ac9 count’’ means a State Climate Change Response Ac10 count established under subsection (d)(5). 

11 (5) VINTAGE YEAR.—The term ‘‘vintage year’’ 

12 has the meaning given that term in section 700 of 

13 the Clean Air Act. 

14 (b) REGULATIONS; COORDINATION.— 

15 (1) REGULATIONS.—Not later than 2 years 

16 after the date of enactment of this Act, the Adminis17 trator, or the heads of such Federal agencies as the 

18 President may designate, shall promulgate regula19 tions to implement this section. 

20 (2) COORDINATION.—If the President des21 ignates more than 1 Federal agency to implement 

22 this section, the President shall require such agen23 cies to establish a memorandum of understanding 

24 providing for coordination of rulemaking and other 


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1 implementing activities, in accordance with this sec2 tion. 

3 (c) STATE CLIMATE CHANGE RESPONSE AND TRANS4 PORTATION FUND.— 

5 (1) ESTABLISHMENT OF FUND.—There is es6 tablished in the Treasury a separate account, to be 

7 known as the ‘‘State Climate Change Response and 

8 Transportation Fund’’. 

9 (2) AUCTION PROCEEDS DEPOSITED TO

10 FUND.—The Administrator shall deposit the pro11 ceeds of the auction conducted pursuant to section 

12 771(b)(7) of the Clean Air Act in the State Climate 

13 Change Response and Transportation Fund. 

14 (3) AVAILABILITY OF AMOUNTS.—All amounts 

15 deposited in the State Climate Change Response and 

16 Transportation Fund shall be available, without fur17 ther appropriation or fiscal year limitation, to carry 

18 out this section. 

19 (d) DISTRIBUTION OF ALLOWANCE PROCEEDS.— 

20 (1) IN GENERAL.—The Administrator shall dis21 tribute, in accordance with this section, proceeds of 

22 the auction of allowances allocated for the following 

23 vintage year that have been deposited in the State 

24 Climate Change Response and Transportation Fund 

25 pursuant to subsection (c)(2). 


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1 (2) RESERVATION AND ALLOCATION.—The Ad2 ministrator shall— 

3 (A) reserve 10 percent of the proceeds of 

4 such allowances described in paragraph (1) for 

5 distribution among coastal and Great Lakes 

6 States in accordance with subsection (f); 

7 (B) after consultation with the Secretary 

8 of the Interior, reserve at least 1 percent of the 

9 proceeds of those allowances for distribution to 

10 Indian tribes in accordance with subsection (e); 

11 and 

12 (C) distribute the remaining proceeds of 

13 those allowances to fund State and local govern14 ment programs for greenhouse gas reduction 

15 and climate adaptation, with such remaining 

16 proceeds divided equally between— 

17 (i) funding of transportation grant 

18 programs under subsection (g); and 

19 (ii) funding of other programs admin20 istered by the States, with the proceeds to 

21 be deposited in and administered through 

22 the State Climate Change Response Ac23 counts established pursuant to paragraph 

24 (5). 


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1 (3) FORMULA FOR DISTRIBUTION.—The Ad2 ministrator shall distribute the proceeds to be allo3 cated pursuant to paragraph (2)(C)(ii) ratably 

4 among the States based on the product obtained by 

5 multiplying— 

6 (A) the population of a State; and 

7 (B) the allocation factor for the State de8 termined under paragraph (4). 

9 (4) STATE ALLOCATION FACTORS.— 

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

11 subparagraph (B), the allocation factor for a 

12 State shall be the quotient obtained by divid13 ing— 

14 (i) the per capita income of all indi15 viduals in the United States; by 

16 (ii) the per capita income of all indi17 viduals in the State. 

18 (B) LIMITATION.— 

19 (i) MAXIMUM.—If the allocation fac20 tor for a State as calculated under sub21 paragraph (A) would exceed 1.2, the allo22 cation factor for such State shall be 1.2. 

23 (ii) MINIMUM.—If the allocation fac24 tor for a State as calculated under sub25 paragraph (A) would be less than 0.8, the 


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1 allocation factor for such State shall be 

2 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) subject to subparagraph (D), 

7 equal to the average of the annual per cap8 ita incomes for the most recent period of 

9 3 consecutive years for which satisfactory 

10 data are available from the Department of 

11 Commerce at the time such determination 

12 is made. 

13 (D) REVENUE DIRECTLY RESULTING FROM

14 A PRESIDENTIALLY DECLARED MAJOR DIS15 ASTER.— 

16 (i) IN GENERAL.—For purposes of 

17 this paragraph, per capita income from 1 

18 or more of the sources described in clause 

19 (ii) shall be reduced or excluded if the Sec20 retary of Commerce— 

21 (I) (in consultation with the Ad22 ministrator and the heads of the de23 partments or agencies involved) deter24 mines that the income accrues to per25 sons as the result of a major disaster 


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1 designated by the President under the 

2 Robert T. Stafford Disaster Relief 

3 and Emergency Assistance Act (42 

4 U.S.C. 5121 et seq.); and 

5 (II) finds that the inclusion of 1 

6 or more of the income sources, in 

7 whole or in part, results in a transi8 tory, rather than a sustainable, in9 crease in a State’s per capita income 

10 level relative to the national average. 

11 (ii) SOURCES OF INCOME.—The 

12 sources of income referred to in clause (i) 

13 are the following: 

14 (I) Property and casualty insur15 ance (including homeowners and rent16 ers insurance). 

17 (II) The National Flood Insur18 ance Program of the Federal Emer19 gency Management Agency. 

20 (III) The Individual and Family 

21 Grants Program of the Federal Emer22 gency Management Agency. 

23 (IV) The Disaster Housing Pro24 gram of the Federal Emergency Man25 agement Agency. 


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1 (V) The Community Develop2 ment Block Grant Program of the De3 partment of Housing and Urban De4 velopment. 

5 (VI) The Disaster Unemployment 

6 Assistance Program of the Depart7 ment of Labor. 

8 (VII) Any other source deter9 mined appropriate by the Adminis10 trator. 

11 (5) STATE CLIMATE CHANGE RESPONSE AC12 COUNTS.—Each State shall establish a State Cli13 mate Change Response Account, to be administered 

14 pursuant to State law, to receive and distribute the 

15 amounts provided under paragraph (2)(C)(ii). State 

16 regulations and implementing procedures relating to 

17 such accounts shall require compliance with the pro18 visions of this section and all other applicable provi19 sions of Federal law. 

20 (e) DISTRIBUTION TO INDIAN TRIBES.— 

21 (1) IN GENERAL.—The Administrator, or the 

22 heads of such Federal agencies as the President may 

23 designate, shall promulgate regulations establishing 

24 a program to distribute allowance proceeds to Indian 

25 tribes, in accordance with the requirements of this 


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1 section, of which not less than 18 percent shall be 

2 allocated to Alaska Native Villages for each year. 

3 (2) USE OF PROCEEDS.—Allowance proceeds 

4 distributed to Indian tribes shall be used exclu5 sively— 

6 (A) in accordance with subsection (h); and 

7 (B) in compliance with any approved tribal 

8 climate change response plan. 

9 (f) DISTRIBUTION TO COASTAL AND GREAT LAKES

10 STATES.—The Administrator, or the heads of such other 

11 Federal agencies as the President may designate, shall dis12 tribute proceeds of emission allowances for coastal State 

13 economic protection each fiscal year, in accordance with 

14 section 384 of division A. 

15 (g) DISTRIBUTION OF TRANSPORTATION GRANTS.— 

16 (1) DISTRIBUTION OF TRANSPORTATION

17 GRANTS.— 

18 (A) IN GENERAL.—The Secretary of 

19 Transportation, in consultation with the Admin20 istrator, shall distribute the amounts allocated 

21 for transportation grants each fiscal year in ac22 cordance with subsection (d)(2)(C)(i) as grants 

23 to public transportation agencies (including des24 ignated recipients (as defined in section 

25 5307(a) and section 5340 of title 49, United 


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1 States Code)) and recipients and sub-recipients 

2 (as defined in section 5311(a) of title 49, 

3 United States Code). 

4 (B) FORMULA.—In providing grants under 

5 this subsection, the Secretary shall distribute— 

6 (i) 80 percent of the funds in accord7 ance with the formula and conditions gov8 erning grants under section 5307 of title 

9 49, United States Code; 

10 (ii) 10 percent of the funds in accord11 ance with the formula and conditions gov12 erning grants under section 5311 of title 

13 49, United States Code; and 

14 (iii) 10 percent of the funds in accord15 ance with the formula and conditions gov16 erning grants under section 5340 of title 

17 49, United States Code. 

18 (h) USES OF ALLOWANCE PROCEEDS DEPOSITED TO

19 SCCR ACCOUNTS.— 

20 (1) IN GENERAL.—States shall use allowance 

21 proceeds deposited to SCCR Accounts under sub22 section (d)(2)(C)(ii) exclusively for the development 

23 and implementation of projects, programs, or meas24 ures as described in this section to address climate 

25 change by reducing emissions of greenhouse gases or 


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1 by building resilience to the impacts of climate 

2 change, including impacts such as— 

3 (A) extreme weather events, such as flood4 ing and tropical cyclones; 

5 (B) more frequent heavy precipitation 

6 events; 

7 (C) water scarcity and adverse impacts on 

8 water quality; 

9 (D) stronger and longer heat waves; 

10 (E) more frequent and severe droughts; 

11 (F) rises in sea level; 

12 (G) ecosystem disruption; 

13 (H) increased wildfire risk; 

14 (I) increased air pollution; 

15 (J) effects on public health; 

16 (K) impaired transportation systems and 

17 infrastructure; and 

18 (L) reduced productivity of agricultural or 

19 ranching operations. 

20 (2) REQUIREMENTS.—The allowance proceeds 

21 received by each SCCR Account for each fiscal year 

22 shall be used by the State exclusively to fund the fol23 lowing categories of activities, in compliance with the 

24 provisions of approved State climate change re25 sponse plans: 


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1 (A) Grants to fund water system mitiga2 tion and adaptation partnerships in accordance 

3 with section 381 of division A. 

4 (B) Flood control, protection, prevention 

5 and response programs and projects in accord6 ance with section 382 of division A. 

7 (C) Programs or projects implemented by 

8 State agencies as owners or operators of water 

9 systems to address any ongoing or forecasted 

10 climate-related impact on water quality, water 

11 supply or reliability, for 1 or more of the pur12 poses listed in section 381(d) of division A. 

13 (D) Programs or projects to reduce green14 house gas emissions through recycling or for in15 creasing recycling rates in accordance with sec16 tion 154 of division A. 

17 (E) Programs and projects addressing ad18 verse impacts of climate change affecting agri19 culture or ranching activities. 

20 (F) Programs or projects addressing air 

21 pollution or air quality impacts caused or exac22 erbated by climate change. 

23 (G) Programs or projects to reduce green24 house gas emissions that result in a decrease in 

25 emissions of other air pollutants. 


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1 (3) DISTRIBUTION FOR LOCAL GOVERN2 MENTS.—Not less than 12.5 percent of the proceeds 

3 deposited to SCCR Accounts shall be distributed by 

4 each State to units of local government within such 

5 State, to be used exclusively to support the cat6 egories of climate change response efforts listed in 

7 paragraph (2). 

8 (4) VULNERABLE POPULATIONS.—In deploying 

9 allowance proceeds under this section, States and 

10 units of local government shall ensure that programs 

11 and projects are funded responding to impacts af12 fecting socially and economically vulnerable popu13 lations, including— 

14 (A) persons of low-income (as defined in 

15 title I of the Housing and Community Develop16 ment Act of 1974, (42 U.S.C. 5301 et seq.)); 

17 (B) members of socially disadvantaged 

18 groups (as defined in section 2501(e)(2) of the 

19 Food, Agriculture, Conservation, and Trade Act 

20 of 1990 (7 U.S.C. 2279(e)(2))); 

21 (C) individuals over 65 years of age and 

22 under 5 years of age; and 

23 (D) individuals with disabilities. 

24 (5) INTENT OF CONGRESS.—It is the intent of 

25 the Congress that allowances distributed to carry 


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1 out this section should be used to supplement, and 

2 not replace, existing sources of funding used to ad3 dress and build resilience to the impacts of climate 

4 change. 

5 (i) STATE AND TRIBAL CLIMATE CHANGE RESPONSE

6 PLANS.— 

7 (1) IN GENERAL.—The regulations promulgated 

8 pursuant to subsection (b) shall include require9 ments for submission and approval of State and 

10 tribal climate change response plans under this sec11 tion. Beginning with vintage year 2012, distribution 

12 of allowance proceeds to a State pursuant to this 

13 section shall be contingent on approval of a State 

14 climate change response plan for such State that 

15 meets the requirements of such regulations. 

16 (2) REQUIREMENTS.—Regulations promulgated 

17 under this section shall require, at minimum, that 

18 State climate change response plans— 

19 (A) assess and prioritize the vulnerability 

20 of a State to a broad range of impacts of cli21 mate change, based on the best available 

22 science; 

23 (B) identify and prioritize specific cost-ef24 fective projects, programs, and measures to 

25 mitigate and build resilience to current and preVerDate Nov 24 2008 04:14 Oct 02, 2009 Jkt 089200 PO 00000 Frm 00812 Fmt 6652 Sfmt 6201 E:\BILLS\S1733.IS S1733

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1 dicted impacts of climate change, including 

2 projects, programs, and measures within each 

3 of the categories of activities listed in sub4 section (h)(2); 

5 (C) include an assessment of potential for 

6 carbon reduction through changes to land man7 agement policies (including enhancement or 

8 protection of forest carbon sinks); 

9 (D) ensure that the State fully considers 

10 and undertakes, to the maximum extent prac11 ticable, initiatives that— 

12 (i) protect or enhance natural eco13 system functions, including protection, 

14 maintenance, or restoration of natural in15 frastructure such as wetlands, reefs, and 

16 barrier islands to buffer communities from 

17 floodwaters or storms, watershed protec18 tion to maintain water quality and ground19 water recharge, or floodplain restoration to 

20 improve natural flood control capacity; 

21 (ii) where appropriate, use non22 structural approaches, including practices 

23 that use, enhance, or mimic the natural 

24 hydrologic cycle processes of infiltration, 

25 evapotranspiration, and use; or 


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1 (iii) where appropriate, protect for2 ested land via scientifically based ecological 

3 restoration practices, including by reducing 

4 fuel loads, restoring forest diversity, and 

5 conducting research on pest mitigation; 

6 (E) give consideration to impacts affecting 

7 socially and economically vulnerable popu8 lations, including— 

9 (i) persons of low-income (as defined 

10 in title I of the Housing and Community 

11 Development Act of 1974 (42 U.S.C. sec. 

12 5301 et seq.)); 

13 (ii) members of socially disadvantaged 

14 groups (as defined in section 2501(e)(2) of 

15 the Food, Agriculture, Conservation, and 

16 Trade Act of 1990 (7 U.S.C. 2279(e)(2))); 

17 (iii) persons over 65 years of age and 

18 under 5 years of age; and 

19 (iv) persons with disabilities; 

20 (F) use pre-disaster mitigation, emergency 

21 response, and public insurance programs to 

22 mitigate the impacts of climate change; 

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1 imum extent practicable, avoid environmental 

2 degradation; and 

3 (H) be revised and resubmitted for ap4 proval not less frequently than every 5 years. 

5 (3) TRIBAL CLIMATE CHANGE RESPONSE

6 PLANS.—Requirements for tribal climate change re7 sponse plans should include the requirements listed 

8 in subparagraphs (A) through (H) of paragraph (2), 

9 as appropriate, but may vary from those of State cli10 mate change response plans to the extent necessary 

11 to account for the special circumstances of Indian 

12 tribes. 

13 (4) COORDINATION WITH PRIOR PLANNING EF14 FORTS.—In implementing this subsection, the Ad15 ministrator, or the heads of such Federal agencies 

16 as the President may designate, shall— 

17 (A) draw upon lessons learned and best 

18 practices from pre-existing State and tribal cli19 mate change response planning efforts; 

20 (B) seek to avoid duplication of such ef21 forts; and 

22 (C) ensure that the plans developed under 

23 this section are developed in coordination with 

24 State natural resources adaptation plans devel25 oped under section 369 of division A. 


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1 (j) REPORTING.—Not later than 1 year after each 

2 date of receipt of allowance proceeds under this section, 

3 and biennially thereafter until the value of any allowance 

4 proceeds received under this section has been fully ex5 pended, each State or Indian tribe receiving allowance pro6 ceeds under this section shall submit to the Administrator, 

7 or the heads of such Federal agencies as the President 

8 may designate, a report that— 

9 (1) provides a full accounting for the use by the 

10 State or Indian tribe of allowance proceeds distrib11 uted under this section, including a description of 

12 the projects, programs, or measures supported using 

13 such proceeds; 

14 (2) includes a report prepared by an inde15 pendent third party, in accordance with such regula16 tions as are promulgated by the Administrator or 

17 the heads of such other Federal agencies as the 

18 President may designate, evaluating the performance 

19 of the projects, programs, or measures supported 

20 under this section; and 

21 (3) identifies any use by the State or Indian 

22 tribe of allowance proceeds distributed under this 

23 section for the reduction of flood and storm damage 

24 and the effects of climate change on water and flood 

25 protection infrastructure. 


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1 (k) AUDITING.—The Administrator, or the heads of 

2 such Federal agencies as the President may designate, 

3 shall have authority to conduct such audits or other review 

4 of States implementation of and compliance with this sec5 tion as such Federal officials may in their discretion deter6 mine to be necessary or appropriate. 

7 (l) ENFORCEMENT.—If the Administrator, or the 

8 heads of such Federal agencies as the President may des9 ignate, determine that a State or Indian tribe is not in 

10 compliance with this section, the Administrator or such 

11 other agency head may withhold a quantity of the allow12 ance proceeds equal to up to twice the quantity of allow13 ance proceeds that the State or Indian tribe failed to use 

14 in accordance with the requirements of this section, that 

15 such State or Indian tribe would otherwise be eligible to 

16 receive under this section in 1 or more later years. Allow17 ance proceeds withheld pursuant to this subsection shall 

18 be distributed among the remaining States or Indian 

19 tribes ratably in accordance with— 

20 (1) the formula under subsection (d), in the 

21 case of allowances withheld from a State; or 

22 (2) in accordance with subsection (e), in the 

23 case of allowance proceeds withheld from an Indian 

24 tribe. 


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1 SEC. 212. CLIMATE CHANGE HEALTH PROTECTION AND 

2 PROMOTION FUND. 

3 (a) ESTABLISHMENT OF FUND.—There is estab4 lished in the Treasury a separate account, to be known 

5 as the ‘‘Climate Change Health Protection and Promotion 

6 Fund’’. 

7 (b) AUCTION PROCEEDS.—The Administrator shall 

8 deposit the proceeds of the auction pursuant to section 

9 771(b)(8) of the Clean Air Act in the Climate Change 

10 Health Protection and Promotion Fund. 

11 (c) AVAILABILITY OF AMOUNTS.—All amounts depos12 ited in the Climate Change Health Protection and Pro13 motion Fund shall be available to the Secretary of Health 

14 and Human Services to carry out subpart B of subtitle 

15 C of title III of division A, without further appropriation 

16 or fiscal year limitation. 

17 (d) DISTRIBUTION OF FUNDS BY HHS.—In carrying 

18 out subpart B of subtitle C of title III of division A, the 

19 Secretary of Health and Human Services may make funds 

20 deposited in the Climate Change Health Protection and 

21 Promotion Fund available to— 

22 (1) other departments, agencies, and offices of 

23 the Federal Government; 

24 (2) foreign, State, tribal, and local govern25 ments; and 


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1 (3) such other entities as the Secretary deter2 mines to be appropriate. 

3 (e) SUPPLEMENT, NOT REPLACE.—It is the intent 

4 of Congress that funds made available to carry out sub5 part B of subtitle C of title III of division A should be 

6 used to supplement, and not replace, existing sources of 

7 funding for public health. 

8 SEC. 213. CLIMATE CHANGE SAFEGUARDS FOR NATURAL 

9 RESOURCES CONSERVATION. 

10 (a) ESTABLISHMENT OF FUND.—There is estab11 lished in the Treasury a separate account, to be known 

12 as the ‘‘Natural Resources Climate Change Adaptation 

13 Account’’. 

14 (b) AUCTION PROCEEDS.—The Administrator shall 

15 deposit the proceeds of the auction conducted pursuant 

16 to section 771(b)(9) of the Clean Air Act in the Natural 

17 Resources Climate Change Adaptation Account. 

18 (c) AVAILABILITY OF AMOUNTS.—All amounts depos19 ited in the Natural Resources Climate Change Adaptation 

20 Account shall be available without further appropriation 

21 or fiscal year limitation solely for the purposes of section 

22 370 of division A. 


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1 SEC. 214. NUCLEAR WORKER TRAINING. 

2 (a) ESTABLISHMENT OF FUND.—There is estab3 lished in the Treasury a separate account, to be known 

4 as the ‘‘Nuclear Worker Training Fund’’. 

5 (b) AUCTION PROCEEDS.—The Administrator shall 

6 deposit the proceeds of the auction conducted pursuant 

7 to section 771(b)(10) of the Clean Air Act in the Nuclear 

8 Worker Training Fund. 

9 (c) AVAILABILITY OF AMOUNTS.—All amounts depos10 ited in the Nuclear Worker Training Fund shall be avail11 able without further appropriation or fiscal year limitation 

12 solely for the purpose of carrying out section 132 of divi13 sion A. 

14 SEC. 215. SUPPLEMENTAL AGRICULTURE, RENEWABLE EN15 ERGY, AND FORESTRY. 

16 (a) ESTABLISHMENT OF FUND.—There is estab17 lished in the Treasury a separate account, to be known 

18 as the ‘‘Supplemental Agriculture, Renewable Energy, and 

19 Forestry Fund’’. 

20 (b) AUCTION PROCEEDS.—The Administrator shall 

21 deposit the proceeds of the auction conducted pursuant 

22 to section 771(b)(11) of the Clean Air Act in the Supple23 mental Agriculture, Renewable Energy, and Forestry 

24 Fund. 

25 (c) AVAILABILITY OF AMOUNTS.—All amounts depos26 ited in the Supplemental Agriculture, Renewable Energy, 


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1 and Forestry Fund shall be available without further ap2 propriation or fiscal year limitation solely for the purpose 

3 of carrying out section 155 of division A. 

Æ 


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