II 

Calendar No. 742 

110TH CONGRESS 

2D SESSION S. 3036 

To direct the Administrator of the Environmental Protection Agency to establish a program to decrease emissions of greenhouse gases, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 20, 2008 

Mrs. BOXER introduced the following bill; which was read the first time 

MAY 21, 2008 

Read the second time and placed on the calendar 

A BILL 

To direct the Administrator of the Environmental Protection 

Agency to establish a program to decrease emissions 

of greenhouse gases, and for other purposes. 

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 ‘‘Lieberman-Warner Climate Security Act of 2008’’. 

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

7 this Act is as follows: 


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Sec. 3. Purposes. 

Sec. 4. Definitions. 

TITLE I—CAPPING GREENHOUSE GAS EMISSIONS 

Subtitle A—Tracking Emissions 

Sec. 1101. Purpose. 

Sec. 1102. Definitions. 

Sec. 1103. Reporting requirements. 

Sec. 1104. Data quality and verification. 

Sec. 1105. Federal greenhouse gas registry. 

Sec. 1106. Enforcement. 

Subtitle B—Reducing Emissions 

Sec. 1201. Emission allowance account. 

Sec. 1202. Compliance obligation. 

Sec. 1203. Penalty for noncompliance. 

Sec. 1204. Rulemaking. 

TITLE II—MANAGING AND CONTAINING COSTS EFFICIENTLY 

Subtitle A—Trading 

Sec. 2101. Sale, exchange, and retirement of emission allowances. 

Sec. 2102. No restriction on transactions. 

Sec. 2103. Allowance transfer system. 

Sec. 2104. Allowance tracking system. 

Subtitle B—Banking 

Sec. 2201. Indication of calendar year. 

Sec. 2202. Effect of time. 

Subtitle C—Borrowing 

Sec. 2301. Regulations. 

Sec. 2302. Term. 

Sec. 2303. Repayment with interest. 

Subtitle D—Offsets 

Sec. 2401. Outreach initiative on revenue enhancement for agricultural producers. 

Sec. 2402. Establishment of domestic offset program. 

Sec. 2403. Eligible offset project types. 

Sec. 2404. Project initiation and approval. 

Sec. 2405. Offset verification and issuance of allowances. 

Sec. 2406. Tracking of reversals for sequestration projects. 

Sec. 2407. Examinations. 

Sec. 2408. Timing and the provision of offset allowances. 

Sec. 2409. Offset registry. 

Sec. 2410. Environmental considerations. 

Sec. 2411. Program review. 

Sec. 2412. Retail carbon offsets. 

Subtitle E—International Emission Allowances 


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Sec. 2501. Use of international emission allowances. 

Sec. 2502. Regulations. 

Sec. 2503. Facility certification. 

Subtitle F—Carbon Market Efficiency Board 

Sec. 2601. Purposes. 

Sec. 2602. Establishment of Carbon Market Efficiency Board. 

Sec. 2603. Duties. 

Sec. 2604. Powers. 

Sec. 2605. Estimate of costs to economy of limiting greenhouse gas emissions. 

TITLE III—ALLOCATING AND DISTRIBUTING ALLOWANCES 

Subtitle A—Auctions 

Sec. 3101. Allocation for early auctions. 

Sec. 3102. Allocation for annual auctions. 

Subtitle B—Early Action 

Sec. 3201. Allocation. 

Sec. 3202. Distribution. 

Subtitle C—States 

Sec. 3301. Allocation for energy savings. 

Sec. 3302. Allocation for States with programs that exceed Federal emission reduction targets. 

Sec. 3303. General allocation. 

Sec. 3304. Allocation for mass transit. 

Subtitle D—Electricity Consumers 

Sec. 3401. Allocation. 

Sec. 3402. Distribution. 

Sec. 3403. Use. 

Sec. 3404. Reporting. 

Subtitle E—Natural Gas Consumers 

Sec. 3501. Allocation. 

Sec. 3502. Distribution. 

Sec. 3503. Use. 

Sec. 3504. Reporting. 

Subtitle F—Bonus Allowances for Carbon Capture and Geological 

Sequestration 

Sec. 3601. Allocation. 

Sec. 3602. Qualifying projects. 

Sec. 3603. Distribution. 

Sec. 3604. 10-Year limit. 

Sec. 3605. Exhaustion of bonus allowance account. 

Subtitle G—Domestic Agriculture and Forestry 

Sec. 3701. Allocation. 

Sec. 3702. Agricultural and forestry greenhouse gas management research. 


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Sec. 3703. Distribution. 

Subtitle H—International Forest Protection 

Sec. 3801. Findings. 

Sec. 3802. Definition of forest carbon activities. 

Sec. 3803. Allocation. 

Sec. 3804. Definition and eligibility requirements. 

Sec. 3805. International forest carbon activities. 

Sec. 3806. Reviews and discount. 

Subtitle I—Transition Assistance 

Sec. 3901. General allocation and distribution. 

Sec. 3902. Distributing emission allowances to owners and operators of fossil 

fuel-fired electric power generating facilities. 

Sec. 3903. Distributing additional emission allowances to rural electric cooperatives. 

Sec. 3904. Distributing emission allowances to owners and operators of energy 

intensive manufacturing facilities. 

Sec. 3905. Distributing emission allowances to owners and operators of facilities and other entities that produce or import petroleum-based 

fuel. 

Sec. 3906. Distributing emission allowances to hydrofluorocarbon producers 

and importers. 

Subtitle J—Reducing Methane Emissions From Landfills and Coal Mines 

Sec. 3907. Allocation. 

Sec. 3908. Distribution. 

TITLE IV—AUCTIONS AND USES OF AUCTION PROCEEDS 

Subtitle A—Funds 

Sec. 4101. Establishment. 

Sec. 4102. Amounts in Funds. 

Subtitle B—Climate Change Credit Corporation 

Sec. 4201. Establishment. 

Sec. 4202. Applicable laws. 

Sec. 4203. Board of directors. 

Sec. 4204. Review and audit by Comptroller General. 

Subtitle C—Auctions 

Sec. 4301. Early auctions. 

Sec. 4302. Annual auctions. 

Subtitle D—Energy Technology Deployment 

Sec. 4401. General allocations. 

Sec. 4402. Zero- or low-carbon energy technologies deployment. 

Sec. 4403. Advanced coal and sequestration technologies program. 

Sec. 4404. Fuel from cellulosic biomass. 

Sec. 4405. Advanced technology vehicles manufacturing incentive program. 

Sec. 4406. Sustainable energy program. 


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Subtitle E—Energy Consumers 

Sec. 4501. Proportions of funding availability. 

Sec. 4502. Rural energy assistance program. 

Subtitle F—Climate Change Worker Training Program 

Sec. 4601. Funding. 

Sec. 4602. Purposes. 

Sec. 4603. Establishment. 

Sec. 4604. Activities. 

Sec. 4605. Worker protections and nondiscrimination requirements. 

Sec. 4606. Workforce training and safety. 

Subtitle G—Adaptation Program for Natural Resources in United States and 

Territories 

Sec. 4701. Definitions. 

Sec. 4702. Adaptation fund. 

Subtitle H—International Climate Change Adaptation and National Security 

Program 

Sec. 4801. Findings. 

Sec. 4802. Purposes. 

Sec. 4803. Establishment. 

Sec. 4804. Funding. 

Subtitle I—Emergency Firefighting Programs 

Sec. 4901. Findings. 

Sec. 4902. Bureau of Land Management emergency firefighting program. 

Sec. 4903. Forest Service emergency firefighting program. 

TITLE V—ENERGY EFFICIENCY 

Subtitle A—Appliance Efficiency 

Sec. 5101. Residential boilers. 

Sec. 5102. Regional variations in heating or cooling standards. 

Subtitle B—Building Efficiency 

Sec. 5201. Updating State building energy efficiency codes. 

Sec. 5202. Conforming amendment. 

TITLE VI—GLOBAL EFFORT TO REDUCE GREENHOUSE GAS 

EMISSIONS 

Sec. 6001. Definitions. 

Sec. 6002. Purposes. 

Sec. 6003. International negotiations. 

Sec. 6004. Interagency review. 

Sec. 6005. Presidential determinations. 

Sec. 6006. International reserve allowance program. 

Sec. 6007. Adjustment of international reserve allowance requirements. 

TITLE VII—REVIEWS AND RECOMMENDATIONS 


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Sec. 7001. National Academy of Sciences Reviews. 

Sec. 7002. Environmental Protection Agency review. 

Sec. 7003. Environmental Protection Agency recommendations. 

Sec. 7004. Presidential recommendations. 

Sec. 7005. Adaptation assessments and plan. 

Sec. 7006. Study by Administrator of aviation sector greenhouse gas emissions. 

TITLE VIII—FRAMEWORK FOR GEOLOGICAL SEQUESTRATION OF 

CARBON DIOXIDE 

Sec. 8001. National drinking water regulations. 

Sec. 8002. Assessment of geological storage capacity for carbon dioxide. 

Sec. 8003. Study of the feasibility relating to construction of pipelines and geological carbon dioxide sequestration activities. 

Sec. 8004. Liabilities for closed geological storage sites. 

TITLE IX—MISCELLANEOUS 

Sec. 9001. Paramount interest waiver. 

Sec. 9002. Administrative procedure and judicial review. 

Sec. 9003. Retention of State authority. 

Sec. 9004. Tribal authority. 

Sec. 9005. Rocky Mountain Centers for Study of Coal Utilization. 

Sec. 9006. Sun grant center research on compliance with Clean Air Act. 

Sec. 9007. Authorization of appropriations. 

TITLE X—CONTROL OF HYDROFLUOROCARBON CONSUMPTION 

Sec. 10001. Applicability. 

Sec. 10002. Definitions. 

Sec. 10003. Cap on hydrofluorocarbon consumption and importation into 

United States. 

Sec. 10004. Hydrofluorocarbon consumption allowance account. 

Sec. 10005. Allocation of hydrofluorocarbon consumption allowances. 

Sec. 10006. Compliance obligation. 

Sec. 10007. Sale, exchange, and other uses of hydrofluorocarbon consumption 

allowances. 

Sec. 10008. Allowance transfer system. 

Sec. 10009. Banking and borrowing. 

Sec. 10010. Hydrofluorocarbon destruction allowances. 

TITLE XI—AMENDMENTS TO CLEAN AIR ACT 

Sec. 11001. National recycling and emission reduction program. 

Sec. 11002. Servicing of motor vehicle air conditioners. 

Sec. 11003. Carbon dioxide reduction. 

1 SEC. 2. FINDINGS. 

2 Congress finds that— 

3 (1) unchecked global warming poses a signifi4 cant threat to— 


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1 (A) the national security and economy of 

2 the United States; 

3 (B) public health and welfare in the 

4 United States; 

5 (C) the well-being of other countries; and 

6 (D) the global environment; 

7 (2) under the United Nations Framework Con8 vention on Climate Change, done at New York on 

9 May 9, 1992, the United States is committed to sta10 bilizing greenhouse gas concentrations in the atmos11 phere at a level that will prevent dangerous anthro12 pogenic interference with the climate system; 

13 (3) according to the Fourth Assessment Report 

14 of the Intergovernmental Panel on Climate Change, 

15 stabilizing greenhouse gas concentrations in the at16 mosphere at a level that will prevent dangerous in17 terference with the climate system will require a 

18 global effort to reduce anthropogenic greenhouse gas 

19 emissions worldwide by 50 to 85 percent below 2000 

20 levels by 2050; 

21 (4) prompt, decisive action is critical, since 

22 global warming pollutants can persist in the atmos23 phere for more than a century; 


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1 (5) the ingenuity of the people of the United 

2 States will allow the United States to become a lead3 er in curbing global warming; 

4 (6) it is possible and desirable to cap green5 house gas emissions, from sources that together ac6 count for the majority of those emissions in the 

7 United States, at or slightly below the current level 

8 in 2012, and to lower the cap each year between 

9 2012 and 2050, on the condition that the system in10 cludes— 

11 (A) cost containment measures; 

12 (B) periodic review of requirements; 

13 (C) an aggressive program for deploying 

14 advanced energy technology; 

15 (D) programs to assist low- and middle-in16 come energy consumers; and 

17 (E) programs to mitigate the impacts of 

18 any unavoidable global climate change; 

19 (7) Congress may need to update the emissions 

20 caps in order to account for continuing scientific 

21 data and steps taken, or not taken, by foreign coun22 tries; 

23 (8) accurate emission data and timely compli24 ance with the requirements of the greenhouse gas 

25 emission reduction and trading program established 


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1 under this Act are needed to ensure that reductions 

2 are achieved and to provide equity, efficiency, and 

3 openness in the market for allowances subject to the 

4 program; 

5 (9) additional policies external to a cap-and6 trade program may be required, including with re7 spect to— 

8 (A) the transportation sector, where reduc9 ing greenhouse gas emissions requires changes 

10 in vehicles, in fuels, and in consumer behavior; 

11 and 

12 (B) the built environment, where reducing 

13 direct and indirect greenhouse gas emissions re14 quires changes in buildings, appliances, light15 ing, heating, cooling, and consumer behavior; 

16 (10) significant and sustained domestic invest17 ments are required to support an aggressive pro18 gram for developing and deploying advanced tech19 nologies to reduce greenhouse gas emissions; 

20 (11) all, or virtually all, emissions of green21 house gases from the combustion of natural gas in 

22 the United States should be reduced through the in23 clusion in a cap-and-trade system of entities that sell 

24 natural gas in the United States; 


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1 (12) including natural gas in a cap-and-trade 

2 system in the United States should be carried out in 

3 a way that minimizes, to the extent feasible, the 

4 number of entities required to submit emission al5 lowances for the natural gas sold by the entities; 

6 (13) including natural gas in a cap-and-trade 

7 system in the United States promotes substantial re8 ductions in total United States greenhouse gas emis9 sions while also minimizing, to the extent feasible, 

10 the activities within the industrial sector that neces11 sitate the submission of emission allowances; 

12 (14) emissions of sulfur dioxide, nitrogen ox13 ides, and mercury to the atmosphere from coal-fired 

14 electric power generating facilities in the United 

15 States inflicts harm on the public health, economy, 

16 and natural resources of the United States; 

17 (15) fossil fuel-fired electric power generating 

18 facilities emit approximately 67 percent of the total 

19 sulfur dioxide emissions, 23 percent of the total ni20 trogen oxide emissions, 40 percent of the total car21 bon dioxide emissions, and 40 percent of the total 

22 mercury emissions in the United States; 

23 (16) while the reductions in emissions of sulfur 

24 dioxide, nitrogen oxides, and mercury that will occur 

25 in the presence of a declining cap on the greenhouse 


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1 gas emissions from coal-fired electric power gener2 ating facilities are larger than those that would 

3 occur in the absence of such a cap, new, stricter 

4 Federal limits on emissions of sulfur dioxide, nitro5 gen oxides, and mercury may still be needed to pro6 tect public health; and 

7 (17) many existing fossil fuel-fired electric 

8 power generating facilities were exempted by Con9 gress from emissions limitations applicable to new 

10 and modified units based on an expectation by Con11 gress that, over time, the units would be retired or 

12 updated with new pollution control equipment, but 

13 many of the exempted facilities nevertheless continue 

14 to operate and emit pollutants at relatively high 

15 rates and without new pollution control equipment. 

16 SEC. 3. PURPOSES. 

17 The purposes of this Act are— 

18 (1) to establish the core of a Federal program 

19 that will reduce United States greenhouse gas emis20 sions substantially enough between 2007 and 2050 

21 to avert the catastrophic impacts of global climate 

22 change; and 

23 (2) to accomplish that purpose while preserving 

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1 ating new jobs, and avoiding the imposition of hard2 ship on United States citizens. 

3 SEC. 4. DEFINITIONS. 

4 In this Act: 

5 (1) ADDITIONAL; ADDITIONALITY.—The terms 

6 ‘‘additional’’ and ‘‘additionality’’ mean the extent to 

7 which reductions in greenhouse gas emissions or in8 creases in sequestration are incremental to business9 as-usual, measured as the difference between— 

10 (A) baseline greenhouse gas fluxes of an 

11 offset project; and 

12 (B) greenhouse gas fluxes of the offset 

13 project. 

14 (2) ADMINISTRATOR.—The term ‘‘Adminis15 trator’’ means the Administrator of the Environ16 mental Protection Agency. 

17 (3) BASELINE.—The term ‘‘baseline’’ means 

18 the greenhouse gas flux or carbon stock that would 

19 have occurred in the absence of an offset project. 

20 (4) BIOLOGICAL SEQUESTRATION; BIO21 LOGICALLY SEQUESTERED.—The terms ‘‘biological 

22 sequestration’’ and ‘‘biologically sequestered’’ 

23 mean— 


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1 (A) the removal of greenhouse gases from 

2 the atmosphere by biological means, such as by 

3 growing plants; and 

4 (B) the storage of those greenhouse gases 

5 in the plants or related soils. 

6 (5) CARBON DIOXIDE EQUIVALENT.—The term 

7 ‘‘carbon dioxide equivalent’’ means, for each green8 house gas, the quantity of the greenhouse gas that 

9 the Administrator determines makes the same con10 tribution to global warming as 1 metric ton of car11 bon dioxide. 

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

13 means the Climate Change Credit Corporation es14 tablished by section 4201(a). 

15 (7) COVERED FACILITY.—The term ‘‘covered 

16 facility’’ means— 

17 (A) any facility that uses more than 5,000 

18 tons of coal in a calendar year; 

19 (B) any facility that is a natural gas proc20 essing plant or that produces natural gas in the 

21 State of Alaska, or any entity that imports nat22 ural gas (including liquefied natural gas); 

23 (C) any facility that in any year produces, 

24 or any entity that in any year imports, 

25 petroleum- or coal-based liquid or gaseous fuel, 


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1 the combustion of which will emit a group I 

2 greenhouse gas, assuming no capture and se3 questration of that gas; 

4 (D) any facility that in any year produces 

5 for sale or distribution, or any entity that in 

6 any year imports, more than 10,000 carbon di7 oxide equivalents of chemicals that are group I 

8 greenhouse gas, assuming no capture and de9 struction or sequestration of that gas; or 

10 (E) any facility that in any year emits as 

11 a byproduct of the production of 

12 hydrochlorofluorocarbons more than 10,000 

13 carbon dioxide equivalents of 

14 hydrofluorocarbons. 

15 (8) DESTRUCTION.—The term ‘‘destruction’’ 

16 means the conversion of a greenhouse gas by ther17 mal, chemical, or other means— 

18 (A) to another gas with a low- or zero19 global warming potential; and 

20 (B) for which credit given reflects the ex21 tent of reduction in global warming potential 

22 actually achieved. 

23 (9) EMISSION ALLOWANCE.—The term ‘‘emis24 sion allowance’’ means an authorization to emit 1 

25 carbon dioxide equivalent of greenhouse gas. 


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1 (10) EMISSION ALLOWANCE ACCOUNT.—The 

2 term ‘‘Emission Allowance Account’’ means the ag3 gregate of emission allowances that the Adminis4 trator establishes for a calendar year. 

5 (11) FACILITY.—The term ‘‘facility’’ means— 

6 (A) 1 or more buildings, structures, or in7 stallations located on 1 or more contiguous or 

8 adjacent properties of an entity in the United 

9 States; and 

10 (B) at the option of the Administrator, any 

11 activity or operation that— 

12 (i) emits 10,000 carbon dioxide 

13 equivalents in any year; and 

14 (ii) has a technical connection with 

15 the activities carried out at a facility, such 

16 as use of transportation fleets, pipelines, 

17 transmission lines, and distribution lines, 

18 but that is not conducted or located on the 

19 property of the facility. 

20 (12) FAIR MARKET VALUE.—The term ‘‘fair 

21 market value’’ means the average market price, in a 

22 particular calendar year, of an emission allowance. 

23 (13) GEOLOGICAL SEQUESTRATION; GEOLOGI24 CALLY SEQUESTERED.—The terms ‘‘geological se25 questration’’ and ‘‘geologically sequestered’’ mean 


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1 the permanent isolation of greenhouse gases, without 

2 reversal, in geological formations, in accordance with 

3 part C of the Safe Drinking Water Act (42 U.S.C. 

4 300h et seq.), as determined by the Administrator. 

5 (14) GROUP I GREENHOUSE GAS.—The term 

6 ‘‘group I greenhouse gas’’ means any of— 

7 (A) carbon dioxide; 

8 (B) methane; 

9 (C) nitrous oxide; 

10 (D) sulfur hexafluoride; or 

11 (E) a perfluorocarbon. 

12 (15) GROUP II GREENHOUSE GAS.—The term 

13 ‘‘group II greenhouse gas’’ means a 

14 hydrofluorocarbon. 

15 (16) LEAKAGE.—The term ‘‘leakage’’ means— 

16 (A) a significant unaccounted increase in 

17 greenhouse gas emissions by a facility or entity 

18 caused by an offset project that produces an ac19 counted reduction in greenhouse gas emissions, 

20 as determined by the Administrator; or 

21 (B) a significant unaccounted decrease in 

22 sequestration that is caused by an offset project 

23 that results in an accounted increase in seques24 tration, as determined by the Administrator. 


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1 (17) LOAD-SERVING ENTITY.—The term ‘‘load2 serving entity’’ means an entity, whether public or 

3 private— 

4 (A) that has a legal, regulatory, or con5 tractual obligation to deliver electricity to retail 

6 consumers; and 

7 (B) whose rates and costs are, except in 

8 the case of a registered electric cooperative, reg9 ulated by a State agency, regulatory commis10 sion, municipality, or public utility district. 

11 (18) NATURAL GAS PROCESSING PLANT.—The 

12 term ‘‘natural gas processing plant’’ means a facility 

13 in the United States that is designed to separate 

14 natural gas liquids from natural gas. 

15 (19) NEW ENTRANT.—The term ‘‘new entrant’’ 

16 means any facility that commences operation on or 

17 after January 1, 2008. 

18 (20) OFFSET ALLOWANCE.—The term ‘‘offset 

19 allowance’’ means a unit of reduction in the quantity 

20 of emissions or an increase in sequestration equal to 

21 1 carbon dioxide equivalent at an entity that is not 

22 a covered facility, where the reduction in emissions 

23 or increase in sequestration is eligible to be used as 

24 an additional means of compliance for the submis25 sion requirements established under section 1202. 


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1 (21) OFFSET PROJECT.—The term ‘‘offset 

2 project’’ means a domestic project, other than a 

3 project at a covered facility, that reduces greenhouse 

4 gas emissions or increases terrestrial sequestration 

5 of carbon dioxide. 

6 (22) PROJECT DEVELOPER.—The term ‘‘project 

7 developer’’ means an individual or entity imple8 menting an offset project. 

9 (23) QUANTITY OF REMAINDER EMISSION AL10 LOWANCES.—The term ‘‘quantity of remainder emis11 sion allowances’’ means the quantity of emission al12 lowances established for a calendar year, less the 

13 quantity of emission allowances obtained by multi14 plying— 

15 (A) the quantity of emission allowances es16 tablished for that year; by 

17 (B) the percentage that corresponds to 

18 that year in the table contained in section 

19 3101(c). 

20 (24) RETAIL RATE FOR DISTRIBUTION SERV21 ICE.— 

22 (A) IN GENERAL.—The term ‘‘retail rate 

23 for distribution service’’ means the rate that a 

24 load-serving entity charges for the use of the 

25 system of the load-serving entity. 


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1 (B) EXCLUSION.—The term ‘‘retail rate 

2 for distribution service’’ does not include any 

3 energy component of the rate. 

4 (25) RETIRE AN EMISSION ALLOWANCE.—The 

5 term ‘‘retire an emission allowance’’ means to dis6 qualify an emission allowance for any subsequent 

7 use, regardless of whether the use is a sale, ex8 change, or submission of the allowance in satisfying 

9 a compliance obligation. 

10 (26) REVERSAL.—The term ‘‘reversal’’ means 

11 an intentional or unintentional loss of sequestered 

12 carbon dioxide to the atmosphere in significant 

13 quantities, as determined by the Administrator, in 

14 order to accomplish the purposes of this Act in an 

15 effective and efficient manner. 

16 (27) RURAL ELECTRIC COOPERATIVE.—The 

17 term ‘‘rural electric cooperative’’ means a coopera18 tively-owned association that was in existence as of 

19 October 18, 2007, and is eligible to receive loans 

20 under section 4 of the Rural Electrification Act of 

21 1936 (7 U.S.C. 904). 

22 (28) SEQUESTERED AND SEQUESTRATION.— 

23 The terms ‘‘sequestered’’ and ‘‘sequestration’’ mean 

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1 moval of greenhouse gases from the atmosphere, as 

2 determined by the Administrator. 

3 (29) STATE REGULATORY AUTHORITY.—The 

4 term ‘‘State regulatory authority’’ means any State 

5 agency that has ratemaking authority with respect 

6 to the retail rate for distribution service. 

7 TITLE I—CAPPING GREENHOUSE 

8 GAS EMISSIONS 

9 Subtitle A—Tracking Emissions 

10 SEC. 1101. PURPOSE. 

11 The purpose of this subtitle is to establish a Federal 

12 greenhouse gas registry that— 

13 (1) is complete, consistent, transparent, and ac14 curate; 

15 (2) will collect reliable and accurate data that 

16 can be used by public and private entities to design 

17 efficient and effective energy security initiatives and 

18 greenhouse gas emission reduction strategies; and 

19 (3) will provide appropriate high-quality data to 

20 be used for implementing greenhouse gas reduction 

21 policies. 

22 SEC. 1102. DEFINITIONS. 

23 In this subtitle: 

24 (1) AFFECTED FACILITY.— 


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1 (A) IN GENERAL.—The term ‘‘affected fa2 cility’’ means— 

3 (i) a covered facility; 

4 (ii) another facility that emits a 

5 greenhouse gas, as determined by the Ad6 ministrator; and 

7 (iii) at the option of the Adminis8 trator, a vehicle fleet with emissions of 

9 more than 10,000 carbon dioxide equiva10 lents in any year, assuming no double11 counting of emissions. 

12 (B) EXCLUSIONS.—The term ‘‘affected fa13 cility’’ does not include any facility that— 

14 (i) is not a covered facility; 

15 (ii) is owned or operated by a small 

16 business (as described in part 121 of title 

17 13, Code of Federal Regulations (or a suc18 cessor regulation)); and 

19 (iii) emits fewer than 10,000 carbon 

20 dioxide equivalents in any year. 

21 (2) CARBON CONTENT.—The term ‘‘carbon con22 tent’’ means the quantity of carbon (in carbon diox23 ide equivalent) contained in a fuel. 

24 (3) CLIMATE REGISTRY.—The term ‘‘Climate 

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1 istry jointly established and managed by more than 

2 40 States and Indian tribes to collect high-quality 

3 greenhouse gas emission data from facilities, cor4 porations, and other organizations to support var5 ious greenhouse gas emission reporting and reduc6 tion policies for the member States and Indian 

7 tribes. 

8 (4) FEEDSTOCK FOSSIL FUEL.—The term 

9 ‘‘feedstock fossil fuel’’ means fossil fuel used as raw 

10 material in a manufacturing process. 

11 (5) GREENHOUSE GAS EMISSIONS.—The term 

12 ‘‘greenhouse gas emissions’’ means emissions of a 

13 greenhouse gas, including— 

14 (A) stationary combustion source emissions 

15 emitted as a result of combustion of fuels in 

16 stationary equipment, such as boilers, furnaces, 

17 burners, turbines, heaters, incinerators, engines, 

18 flares, and other similar sources; 

19 (B) process emissions consisting of emis20 sions from chemical or physical processes other 

21 than combustion; 

22 (C) fugitive emissions consisting of inten23 tional and unintentional emissions from equip24 ment leaks, such as joints, seals, packing, and 


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1 gaskets, or from piles, pits, cooling towers, and 

2 other similar sources; and 

3 (D) biogenic emissions resulting from bio4 logical processes, such as anaerobic decomposi5 tion, nitrification, and denitrification. 

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

7 has the meaning given the term in section 4 of the 

8 Indian Self-Determination and Education Assistance 

9 Act (25 U.S.C. 450b). 

10 (7) REGISTRY.—The term ‘‘Registry’’ means 

11 the Federal greenhouse gas registry established 

12 under section 1105(a). 

13 (8) SOURCE.—The term ‘‘source’’ means any 

14 building, structure, installation, unit, point, oper15 ation, vehicle, land area, or other item that emits or 

16 may emit a greenhouse gas. 

17 SEC. 1103. REPORTING REQUIREMENTS. 

18 (a) IN GENERAL.—Subject to this section, each af19 fected facility shall submit to the Administrator, for inclu20 sion in the Registry, periodic reports, including annual 

21 and quarterly data, that— 

22 (1) include the quantity and type of fossil fuels, 

23 including feedstock fossil fuels, that are extracted, 

24 produced, refined, imported, exported, or consumed 

25 at or by the facility; 


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1 (2) include the quantity of hydrofluorocarbons, 

2 perfluorocarbons, sulfur hexafluoride, nitrous oxide, 

3 carbon dioxide that has been captured and seques4 tered, and other greenhouse gases generated, pro5 duced, imported, exported, or consumed at or by the 

6 facility; 

7 (3) include the quantity of electricity generated, 

8 imported, exported, or consumed by or at the facil9 ity, and information on the quantity of greenhouse 

10 gases emitted when the imported, exported, or con11 sumed electricity was generated, as determined by 

12 the Administrator; 

13 (4) include the aggregate quantity of all green14 house gas emissions from sources at the facility, in15 cluding stationary combustion source emissions, 

16 process emissions, and fugitive emissions; 

17 (5) include greenhouse gas emissions expressed 

18 in metric tons of each greenhouse gas emitted and 

19 in the quantity of carbon dioxide equivalents of each 

20 greenhouse gas emitted; 

21 (6) include a list and description of sources of 

22 greenhouse gas emissions at the facility; 

23 (7) quantify greenhouse gas emissions in ac24 cordance with the measurement standards estab25 lished under section 1104; 


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1 (8) include other data necessary for accurate 

2 and complete accounting of greenhouse gas emis3 sions, as determined by the Administrator; 

4 (9) include an appropriate certification regard5 ing the accuracy and completeness of reported data, 

6 as determined by the Administrator; and 

7 (10) are submitted electronically to the Admin8 istrator, in such form and to such extent as may be 

9 required by the Administrator. 

10 (b) DE MINIMIS EXEMPTIONS.— 

11 (1) IN GENERAL.—The Administrator may de12 termine— 

13 (A) whether certain sources at a facility 

14 should be considered to be eligible for a de 

15 minimis exemption from a requirement for re16 porting under subsection (a); and 

17 (B) the level of greenhouse gases emitted 

18 from a source that would qualify for such an 

19 exemption. 

20 (2) FACTORS.—In making a determination 

21 under paragraph (1), the Administrator shall con22 sider the availability and suitability of simplified 

23 techniques and tools for quantifying emissions and 

24 the cost to measure those emissions relative to the 


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1 purposes of this title, including the goal of collecting 

2 complete and consistent facility-wide data. 

3 (c) VERIFICATION OF REPORT REQUIRED.—Before 

4 including the information from a report required under 

5 this section in the Registry, the Administrator shall verify 

6 the completeness and accuracy of the report using infor7 mation provided under this section, obtained under section 

8 9002(c), or obtained under other provisions of law. 

9 (d) TIMING.— 

10 (1) CALENDAR YEARS 2004 THROUGH 2007.— 

11 For a baseline period of calendar years 2004 

12 through 2007, each affected facility shall submit re13 quired annual data described in this section to the 

14 Administrator not later than March 31, 2009. 

15 (2) SUBSEQUENT CALENDAR YEARS.—For cal16 endar year 2008 and each subsequent calendar year, 

17 each affected facility shall submit quarterly data de18 scribed in this section to the Administrator not later 

19 than 60 days after the end of the applicable quarter. 

20 (e) NO EFFECT ON OTHER REQUIREMENTS.—Noth21 ing in this title affects any requirement in effect as of the 

22 date of enactment of this Act relating to the reporting 

23 of— 

24 (1) fossil fuel production, refining, importation, 

25 exportation, or consumption data; 


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1 (2) greenhouse gas emission data; or 

2 (3) other relevant data. 

3 SEC. 1104. DATA QUALITY AND VERIFICATION. 

4 (a) PROTOCOLS AND METHODS.— 

5 (1) IN GENERAL.—The Administrator shall es6 tablish by regulation, taking into account the work 

7 done by the Climate Registry, comprehensive proto8 cols and methods to ensure the accuracy, complete9 ness, consistency, and transparency of data on 

10 greenhouse gas emissions and fossil fuel production, 

11 refining, importation, exportation, and consumption 

12 submitted to the Registry that include— 

13 (A) accounting and reporting standards for 

14 fossil fuel production, refining, importation, ex15 portation, and consumption; 

16 (B) a requirement that, where technically 

17 feasible, submitted data are monitored using 

18 monitoring systems for fuel flow or emissions, 

19 such as continuous emission monitoring systems 

20 or equivalent systems of similar rigor, accuracy, 

21 quality, and timeliness; 

22 (C) a requirement that, if a facility has al23 ready been directed to monitor emissions of a 

24 greenhouse gas using a continuous emission 

25 monitoring system under existing law, that sysVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 tem be used in complying with this Act with re2 spect to the greenhouse gas; 

3 (D) for cases in which the Administrator 

4 determines that monitoring emissions with the 

5 precision, reliability, accessibility, and timeli6 ness similar to that provided by a continuous 

7 emission monitoring system are not techno8 logically feasible, standardized methods for cal9 culating greenhouse gas emissions in specific in10 dustries using other readily available and reli11 able information, such as fuel consumption, ma12 terials consumption, production, or other rel13 evant activity data, on the condition that those 

14 methods do not underreport emissions, as com15 pared with the continuous emission monitoring 

16 system; 

17 (E) information on the accuracy of meas18 urement and calculation methods; 

19 (F) methods to avoid double-counting of 

20 greenhouse gas emissions; 

21 (G) protocols to prevent an affected facility 

22 from avoiding the reporting requirements of 

23 this title (such as by reorganizing into multiple 

24 entities or outsourcing activities that result in 

25 greenhouse gas emissions); and 


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1 (H) protocols for verification of data sub2 mitted by affected facilities. 

3 (2) BEST PRACTICES.—The protocols and 

4 methods developed under paragraph (1) shall incor5 porate and conform to the best practices from the 

6 most recent Federal, State, and international proto7 cols for the measurement, accounting, reporting, and 

8 verification of greenhouse gas emissions to ensure 

9 the accuracy, completeness, and consistency of the 

10 data. 

11 (b) VERIFICATION; INFORMATION BY REPORTING

12 ENTITIES.—Each affected facility shall— 

13 (1) provide information sufficient for the Ad14 ministrator to verify, in accordance with the proto15 cols and methods developed under subsection (a), 

16 that the fossil fuel data and greenhouse gas emission 

17 data of the affected facility have been completely 

18 and accurately reported; and 

19 (2) ensure the submission or retention, for the 

20 5-year period beginning on the date of provision of 

21 the information, of— 

22 (A) data sources; 

23 (B) information on internal control activi24 ties; 


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1 (C) information on assumptions used in re2 porting emissions and fuels; 

3 (D) uncertainty analyses; and 

4 (E) other relevant data and information to 

5 facilitate the verification of reports submitted to 

6 the Registry. 

7 (c) WAIVER OF REPORTING REQUIREMENTS.—The 

8 Administrator may waive reporting requirements for spe9 cific facilities if the Administrator determines that suffi10 cient and equally or more reliable data are available under 

11 other provisions of law. 

12 (d) MISSING DATA.—If information, satisfactory to 

13 the Administrator, is not provided for an affected facility, 

14 the Administrator shall— 

15 (1) prescribe methods to estimate emissions for 

16 the facility for each period for which data are miss17 ing, reflecting the highest emission levels that may 

18 reasonably have occurred during the period for 

19 which data are missing; and 

20 (2) take appropriate enforcement action pursu21 ant to this section and section 9002(b). 

22 SEC. 1105. FEDERAL GREENHOUSE GAS REGISTRY. 

23 (a) ESTABLISHMENT.—The Administrator shall es24 tablish a Federal greenhouse gas registry. 


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1 (b) ADMINISTRATION.—In establishing the Registry, 

2 the Administrator shall— 

3 (1) design and operate the Registry; 

4 (2) establish an advisory body that is broadly 

5 representative of private enterprise, agriculture, en6 vironmental groups, and State, tribal, and local gov7 ernments to guide the development and management 

8 of the Registry; 

9 (3) provide coordination and technical assist10 ance for the development of proposed protocols and 

11 methods, taking into account the duties carried out 

12 by the Climate Registry, to be published by the Ad13 ministrator; 

14 (4)(A) develop an electronic format for report15 ing under guidelines established under section 

16 1104(a)(1); and 

17 (B) make the electronic format available to re18 porting entities; 

19 (5) verify and audit the data submitted by re20 porting entities; 

21 (6) establish consistent policies for calculating 

22 carbon content and greenhouse gas emissions for 

23 each type of fossil fuel reported under section 1103; 


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1 (7) calculate carbon content and greenhouse gas 

2 emissions associated with the combustion of fossil 

3 fuel data reported by reporting entities; 

4 (8) immediately publish on the Internet all in5 formation contained in the Registry, except in any 

6 case in which publishing the information would re7 sult in a disclosure of— 

8 (A) information vital to national security, 

9 as determined by the President; or 

10 (B) confidential business information that 

11 cannot be derived from information that is oth12 erwise publicly available and that would cause 

13 significant calculable competitive harm if pub14 lished (except that information relating to 

15 greenhouse gas emissions shall not be consid16 ered to be confidential business information). 

17 (c) THIRD-PARTY VERIFICATION.—The Adminis18 trator may use the services of third parties that have no 

19 conflicts of interest to verify reports required under sec20 tion 1103. 

21 (d) REGULATIONS.—The Administrator shall— 

22 (1) not later than 180 days after the date of 

23 enactment of this Act, propose regulations to carry 

24 out this section; and 


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1 (2) not later than July 1, 2008, promulgate 

2 final regulations to carry out this section. 

3 SEC. 1106. ENFORCEMENT. 

4 (a) CIVIL ACTIONS.—The Administrator may bring 

5 a civil action in United States district court against the 

6 owner or operator of an affected facility that fails to com7 ply with any requirement of this subtitle. 

8 (b) PENALTY.—Any person that has violated or is 

9 violating this subtitle shall be subject to a civil penalty 

10 of not more than $25,000 per day of each violation. 

11 Subtitle B—Reducing Emissions 

12 SEC. 1201. EMISSION ALLOWANCE ACCOUNT. 

13 (a) IN GENERAL.—The Administrator shall establish 

14 a separate quantity of emission allowances for each of cal15 endar years 2012 through 2050. 

16 (b) IDENTIFICATION NUMBERS.—The Administrator 

17 shall assign to each emission allowance established under 

18 subsection (a) a unique identification number that in19 cludes the calendar year for which that emission allowance 

20 was established. 

21 (c) LEGAL STATUS OF EMISSION ALLOWANCES.— 

22 (1) IN GENERAL.—An emission allowance shall 

23 not be a property right. 

24 (2) TERMINATION OR LIMITATION.—Nothing in 

25 this Act or any other provision of law limits the auVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 thority of the United States to terminate or limit an 

2 emission allowance. 

3 (3) OTHER PROVISIONS UNAFFECTED.—Noth4 ing in this Act relating to emission allowances shall 

5 affect the application of, or compliance with, any 

6 other provision of law to or by a covered facility. 

7 (d) ALLOWANCES FOR EACH CALENDAR YEAR.—The 

8 numbers of emission allowances established by the Admin9 istrator for each of calendar years 2012 through 2050 

10 shall be as follows: 

Calendar Year Number of Emission Allowances (in 

Millions) 

2012 5,775 

2013 5,669 

2014 5,562 

2015 5,456 

2016 5,349 

2017 5,243 

2018 5,137 

2019 5,030 

2020 4,924 

2021 4,817 

2022 4,711 

2023 4,605 

2024 4,498 

2025 4,392 

2026 4,286 


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Calendar Year Number of Emission Allowances (in 

Millions) 

2027 4,179 

2028 4,073 

2029 3,966 

2030 3,860 

2031 3,754 

2032 3,647 

2033 3,541 

2034 3,435 

2035 3,328 

2036 3,222 

2037 3,115 

2038 3,009 

2039 2,903 

2040 2,796 

2041 2,690 

2042 2,584 

2043 2,477 

2044 2,371 

2045 2,264 

2046 2,158 

2047 2,052 

2048 1,945 

2049 1,839 

2050 1,732 


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1 SEC. 1202. COMPLIANCE OBLIGATION. 

2 (a) IN GENERAL.—Not later than 90 days after the 

3 end of a calendar year, the owner or operator of a covered 

4 facility shall submit to the Administrator an emission al5 lowance, an offset allowance awarded pursuant to subtitle 

6 D of title II, or an international emission allowance ob7 tained in compliance with regulations promulgated under 

8 section 2502, for each carbon dioxide equivalent of— 

9 (1) group I greenhouse gas that was emitted by 

10 the use of coal by that covered facility during the 

11 preceding year; 

12 (2) group I greenhouse gas that will, assuming 

13 no capture and sequestration of that gas, be emitted 

14 from the use of any petroleum- or coal-based liquid 

15 or gaseous fuel that was produced or imported by 

16 that covered facility during the preceding year; 

17 (3) group I greenhouse gas that was produced 

18 for sale or distribution or imported by that facility 

19 during the preceding year; 

20 (4) group II greenhouse gas that was emitted 

21 as a byproduct of hydrochlorofluorocarbon produc22 tion; and 

23 (5) group I greenhouse gas that will, assuming 

24 no capture and destruction or sequestration of that 

25 gas, be emitted— 


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1 (A) from the use of natural gas that was, 

2 by that covered facility, processed, imported, or 

3 produced and not reinjected into the field; or 

4 (B) from the use of natural gas liquids 

5 that were processed or imported by that covered 

6 facility during the preceding year. 

7 (b) REQUIREMENTS.— 

8 (1) ASSUMPTIONS.—For the purpose of calcu9 lating the submission requirement under paragraphs 

10 (2) through (5) of subsection (a), the Administrator 

11 shall, subject to subsections (e) through (g), assume 

12 that no capture, sequestration, chemical retention, 

13 or other retention of a greenhouse gas has occurred 

14 or will occur. 

15 (2) FACTORS FOR CONSIDERATION.—For the 

16 purpose of calculating the submission requirement 

17 under paragraph (1) of subsection (a), the Adminis18 trator shall take into account any metric tons of car19 bon dioxide that the owner or operator has geologi20 cally sequestered during the preceding calendar year. 

21 (c) RETIREMENT OF ALLOWANCES.—Immediately 

22 upon receipt of an emission allowance under subsection 

23 (a), the Administrator shall retire the emission allowance. 

24 (d) DETERMINATION OF COMPLIANCE.—Not later 

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1 mine whether the owners and operators of all covered fa2 cilities are in full compliance with subsection (a) for the 

3 preceding year. 

4 (e) FEEDSTOCK CREDIT.—If the Administrator de5 termines that an entity has used a petroleum- or coal6 based product, natural gas, or a natural gas liquid as a 

7 feedstock during any of calendar years 2012 through 

8 2050, such that no group I greenhouse gas associated with 

9 that feedstock will be emitted, the Administrator shall es10 tablish and distribute to that entity a quantity of emission 

11 allowances equal to the quantity of emission allowances, 

12 offset allowances, or international emission allowances 

13 submitted under subsection (a) for that petroleum- or 

14 coal-based product, natural gas, or natural gas liquid. 

15 (f) SEQUESTRATION CREDIT.—If the Administrator 

16 determines that the owner or operator of a covered facility 

17 that is subject to the submission requirement under any 

18 of paragraphs (2) through (5) of subsection (a) has geo19 logically sequestered carbon dioxide during any of calendar 

20 years 2012 through 2050, the Administrator shall estab21 lish and distribute to that owner or operator a quantity 

22 of emission allowances equal to the number of metric tons 

23 of carbon dioxide that the owner or operator geologically 

24 sequestered during that calendar year. 


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1 (g) DESTRUCTION CREDIT.—If the Administrator de2 termines that an entity has destroyed greenhouse gas dur3 ing any of calendar years 2012 through 2050, the Admin4 istrator shall establish and distribute to that entity a 

5 quantity of emission allowances equal to the number of 

6 carbon dioxide equivalents of greenhouse gas that the 

7 owner or operator destroyed during that calendar year. 

8 SEC. 1203. PENALTY FOR NONCOMPLIANCE. 

9 (a) EXCESS EMISSIONS PENALTY.— 

10 (1) IN GENERAL.—The owner or operator of 

11 any covered facility that fails for any year to submit 

12 to the Administrator by the deadline described in 

13 section 1202(a) or 2303, 1 or more of the emission 

14 allowances due pursuant to either of those sections 

15 shall be liable for the payment to the Administrator 

16 of an excess emissions penalty. 

17 (2) AMOUNT.—The amount of an excess emis18 sions penalty required to be paid under paragraph 

19 (1) shall be, as determined by the Administrator, an 

20 amount equal to the product obtained by multi21 plying— 

22 (A) the number of excess emission allow23 ances that the owner or operator failed to sub24 mit; and 

25 (B) the greater of— 


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1 (i) $200; or 

2 (ii) a dollar figure representing 3 

3 times the mean market value of an emis4 sion allowance during the calendar year for 

5 which the emission allowances were due. 

6 (3) TIMING.—An excess emissions penalty re7 quired under this subsection shall be immediately 

8 due and payable to the Administrator, without de9 mand, in accordance with such regulations as shall 

10 be promulgated by the Administrator by the date 

11 that is 1 year after the date of enactment of this 

12 Act. 

13 (4) DEPOSIT.—The Administrator shall deposit 

14 each excess emissions penalty paid under this sub15 section in the Treasury of the United States. 

16 (5) NO EFFECT ON LIABILITY.—An excess 

17 emissions penalty due and payable by the owner or 

18 operator of a covered facility under this subsection 

19 shall not diminish the liability of the owner or oper20 ator for any fine, penalty, or assessment against the 

21 owner or operator for the same violation under any 

22 other provision of this Act or any other law. 

23 (b) EXCESS EMISSION ALLOWANCE.— 

24 (1) IN GENERAL.—The owner or operator of a 

25 covered facility that fails for any year to submit to 


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1 the Administrator by the deadline described in sec2 tion 1202(a) or 2303 1 or more of the emission al3 lowances due pursuant to either of those sections 

4 shall be liable to offset the excess emissions by an 

5 equal quantity, in tons, during— 

6 (A) the following calendar year; or 

7 (B) such longer period as the Adminis8 trator may prescribe. 

9 (2) PLAN.— 

10 (A) IN GENERAL.—Not later than 60 days 

11 after the end of the calendar year during which 

12 a covered facility emits excess emissions, the 

13 owner or operator of the covered facility shall 

14 submit to the Administrator, and to the State 

15 in which the covered facility is located, a pro16 posed plan to achieve the required offsets for 

17 the excess emissions. 

18 (B) CONDITION OF OPERATION.—Upon 

19 approval of a proposed plan described in sub20 paragraph (A) by the Administrator, the plan, 

21 as submitted, modified, or conditioned, shall be 

22 considered to be a condition of the operating 

23 permit for the covered facility, without further 

24 review or revision of the permit. 


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1 (C) DEDUCTION OF ALLOWANCES.—For 

2 each covered facility that, in any calendar year, 

3 emits excess emissions, the Administrator shall 

4 deduct, from emission allowances allocated to 

5 the covered facility for the calendar year, or for 

6 succeeding years during which offsets are re7 quired, emission allowances equal to the excess 

8 quantity, in tons, of the excess emissions. 

9 (c) PROHIBITION.—It shall be unlawful for the owner 

10 or operator of any facility liable for a penalty and offset 

11 under this section to fail— 

12 (1) to pay the penalty in accordance with this 

13 section; 

14 (2) to provide, and thereafter comply with, a 

15 proposed plan for compliance as required by sub16 section (b)(2); and 

17 (3) to offset excess emissions as required by 

18 subsection (b)(1). 

19 (d) NO EFFECT ON OTHER SECTION.—Nothing in 

20 this subtitle limits or otherwise affects the application of 

21 section 9002(b). 

22 SEC. 1204. RULEMAKING. 

23 Not later than 2 years after the date of enactment 

24 of this Act, the Administrator shall, by rule, expand the 

25 definition of the term ‘‘covered facility’’ to ensure the inVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00042 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 clusion of all greenhouse gas emissions from natural gas 

2 emitted, flared during production or processing, or sold 

3 for use in the United States. 

4 TITLE II—MANAGING AND CON5 TAINING COSTS EFFICIENTLY 

6 Subtitle A—Trading 

7 SEC. 2101. SALE, EXCHANGE, AND RETIREMENT OF EMIS8 SION ALLOWANCES. 

9 Except as otherwise provided in this Act, the lawful 

10 holder of an emission allowance may, without restriction, 

11 sell, exchange, transfer, submit for compliance in accord12 ance with section 1202, or retire the emission allowance. 

13 SEC. 2102. NO RESTRICTION ON TRANSACTIONS. 

14 The privilege of purchasing, holding, selling, exchang15 ing, and retiring emission allowances shall not be re16 stricted to the owners and operators of covered facilities. 

17 SEC. 2103. ALLOWANCE TRANSFER SYSTEM. 

18 (a) IN GENERAL.—Not later than 18 months after 

19 the date of enactment of this Act, the Administrator shall 

20 promulgate regulations to carry out the provisions of this 

21 Act relating to emission allowances, including regulations 

22 providing that the transfer of emission allowances shall 

23 not be effective until such date as a written certification 

24 of the transfer, signed by a responsible official of each 


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1 party to the transfer, is received and recorded by the Ad2 ministrator in accordance with those regulations. 

3 (b) TRANSFERS.— 

4 (1) IN GENERAL.—The regulations promulgated 

5 under subsection (a) shall permit the transfer of al6 lowances prior to the issuance of the allowances. 

7 (2) DEDUCTION AND ADDITION OF TRANS8 FERS.—A recorded pre-allocation transfer of allow9 ances shall be— 

10 (A) deducted by the Administrator from 

11 the number of allowances that would otherwise 

12 be distributed to the transferor; and 

13 (B) added to those allowances distributed 

14 to the transferee. 

15 SEC. 2104. ALLOWANCE TRACKING SYSTEM. 

16 The regulations promulgated under section 2103(a) 

17 shall include a system for issuing, recording, and tracking 

18 emission allowances that shall specify all necessary proce19 dures and requirements for an orderly and competitive 

20 functioning of the emission allowance system. 

21 Subtitle B—Banking 

22 SEC. 2201. INDICATION OF CALENDAR YEAR. 

23 An emission allowance submitted to the Adminis24 trator by the owner or operator of a covered facility in 

25 accordance with section 1202(a) shall not be required to 


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1 indicate in the identification number of the emission allow2 ance the calendar year for which the emission allowance 

3 is submitted. 

4 SEC. 2202. EFFECT OF TIME. 

5 The passage of time shall not, by itself, cause an 

6 emission allowance to be retired or otherwise diminish the 

7 compliance value of the emission allowance. 

8 Subtitle C—Borrowing 

9 SEC. 2301. REGULATIONS. 

10 (a) IN GENERAL.—Not later than 3 years after the 

11 date of enactment of this Act, the Administrator shall pro12 mulgate regulations under which, subject to subsection 

13 (b), the owner or operator of a covered facility may— 

14 (1) borrow emission allowances from the Ad15 ministrator; and 

16 (2) for a calendar year, submit borrowed emis17 sion allowances to the Administrator in satisfaction 

18 of up to 15 percent of the compliance obligation 

19 under section 1202(a). 

20 (b) LIMITATION.—An emission allowance borrowed 

21 under subsection (a) shall be an emission allowance estab22 lished by the Administrator for a specific future calendar 

23 year under subsection 1201(a). 


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1 SEC. 2302. TERM. 

2 The owner or operator of a covered facility shall not 

3 submit, and the Administrator shall not accept, a bor4 rowed emission allowance in partial satisfaction of the 

5 compliance obligation under section 1202(a) for any cal6 endar year that is more than 5 years earlier than the cal7 endar year included in the identification number of the 

8 borrowed emission allowance. 

9 SEC. 2303. REPAYMENT WITH INTEREST. 

10 For each borrowed emission allowance submitted in 

11 partial satisfaction of the compliance obligation under sub12 section 1202(a) for a particular calendar year (referred 

13 to in this section as the ‘‘use year’’), the number of emis14 sion allowances that the owner or operator is required to 

15 submit under section 1202(a) for the year from which the 

16 borrowed emission allowance was taken (referred to in this 

17 section as the ‘‘source year’’) shall be increased by an 

18 amount equal to the product obtained by multiplying— 

19 (1) 1.1; and 

20 (2) the number of years beginning after the use 

21 year and before the source year. 

22 Subtitle D—Offsets 

23 SEC. 2401. OUTREACH INITIATIVE ON REVENUE ENHANCE24 MENT FOR AGRICULTURAL PRODUCERS. 

25 (a) ESTABLISHMENT.—The Secretary of Agriculture, 

26 acting through the Chief of the Natural Resources ConVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00046 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 servation Service, the Chief of the Forest Service, the Ad2 ministrator of the Cooperative State Research, Education, 

3 and Extension Service, and land-grant colleges and univer4 sities, in consultation with the Administrator and the 

5 heads of other appropriate departments and agencies, 

6 shall establish an outreach initiative to provide informa7 tion to agricultural producers, agricultural organizations, 

8 foresters, and other landowners about opportunities under 

9 this subtitle to earn new revenue. 

10 (b) COMPONENTS.—The initiative under this sec11 tion— 

12 (1) shall be designed to ensure that, to the 

13 maximum extent practicable, agricultural organiza14 tions and individual agricultural producers, for15 esters, and other landowners receive detailed prac16 tical information about— 

17 (A) opportunities to earn new revenue 

18 under this subtitle; 

19 (B) measurement protocols, monitoring, 

20 verifying, inventorying, registering, insuring, 

21 and marketing offsets under this title; 

22 (C) emerging domestic and international 

23 markets for energy crops, allowances, and off24 sets; and 


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1 (D) local, regional, and national databases 

2 and aggregation networks to facilitate achieve3 ment, measurement, registration, and sales of 

4 offsets; 

5 (2) shall provide— 

6 (A) outreach materials, including the hand7 book published under subsection (c), to inter8 ested parties; 

9 (B) workshops; and 

10 (C) technical assistance; and 

11 (3) may include the creation and development 

12 of regional marketing centers or coordination with 

13 existing centers (including centers within the Nat14 ural Resources Conservation Service or the Coopera15 tive State Research, Education, and Extension Serv16 ice or at land-grant colleges and universities). 

17 (c) HANDBOOK.— 

18 (1) IN GENERAL.—Not later than 2 years after 

19 the date of enactment of this Act, the Secretary of 

20 Agriculture, in consultation with the Administrator 

21 and after an opportunity for public comment, shall 

22 publish a handbook for use by agricultural pro23 ducers, agricultural cooperatives, foresters, other 

24 landowners, offset buyers, and other stakeholders 


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1 that provides easy-to-use guidance on achieving, re2 porting, registering, and marketing offsets. 

3 (2) DISTRIBUTION.—The Secretary of Agri4 culture shall ensure, to the maximum extent prac5 ticable, that the handbook— 

6 (A) is made available through the Internet 

7 and in other electronic media; 

8 (B) includes, with respect to the electronic 

9 form of the handbook described in subpara10 graph (A), electronic forms and calculation 

11 tools to facilitate the petition process described 

12 in section 2404; and 

13 (C) is distributed widely through land14 grant colleges and universities and other appro15 priate institutions. 

16 SEC. 2402. ESTABLISHMENT OF DOMESTIC OFFSET PRO17 GRAM. 

18 (a) ALTERNATIVE MEANS OF COMPLIANCE.—Begin19 ning with calendar year 2012, the owner or operator of 

20 a covered entity may satisfy up to 15 percent of the total 

21 allowance submission requirement of the covered entity 

22 under section 1202(a) by submitting offset allowances 

23 generated in accordance with this subtitle. 

24 (b) REGULATIONS REQUIRED.— 


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1 (1) IN GENERAL.—Not later than 18 months 

2 after the date of enactment of this Act, the Adminis3 trator, in conjunction with the Secretary of Agri4 culture, shall promulgate regulations authorizing the 

5 issuance and certification of offset allowances. 

6 (2) CERTAIN SOURCES.— 

7 (A) IN GENERAL.—For offsets from 

8 sources of greenhouse gases not linked to agri9 cultural, forestry, or other land use-related 

10 projects, the regulations promulgated under this 

11 subsection shall require that the owner of the 

12 project establish the project baseline and reg13 ister emissions under the Federal Greenhouse 

14 Gas Registry established under section 1105. 

15 (B) REQUIREMENT.—The regulations de16 scribed in subparagraph (A) shall— 

17 (i) authorize the issuance and certifi18 cation of offset allowances for greenhouse 

19 gas emission reductions below the project 

20 baseline; and 

21 (ii) ensure that those offsets represent 

22 real, verifiable, additional, permanent, and 

23 enforceable reductions in greenhouse gas 

24 emissions or increases in sequestration. 


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1 (3) AGRICULTURAL, FORESTRY, AND OTHER

2 LAND USE-RELATED PROJECTS.—For offsets from 

3 certain agricultural, forestry, and other land use-re4 lated projects undertaken within the United States, 

5 the regulations promulgated under this subsection 

6 shall include provisions that— 

7 (A) ensure that those offsets represent 

8 real, verifiable, additional, permanent, and en9 forceable reductions in greenhouse gas emis10 sions or increases in biological sequestration; 

11 (B) specify the types of offset projects eli12 gible to generate offset allowances, in accord13 ance with section 2403; 

14 (C) establish procedures for project initi15 ation and approval, in accordance with section 

16 2404; 

17 (D) establish procedures to monitor, quan18 tify, and discount reductions in greenhouse gas 

19 emissions or increases in biological sequestra20 tion, in accordance with subsections (d) through 

21 (g) of section 2404; 

22 (E) establish procedures for third-party 

23 verification, registration, and issuance of offset 

24 allowances, in accordance with section 2405; 


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1 (F) ensure permanence of offsets by miti2 gating and compensating for reversals, in ac3 cordance with section 2406; and 

4 (G) assign a unique serial number to each 

5 offset allowance issued under this section. 

6 (c) OFFSET ALLOWANCES AWARDED.—The Adminis7 trator shall issue offset allowances for qualifying emission 

8 reductions and biological sequestrations from offset 

9 projects that satisfy the applicable requirements of this 

10 subtitle. 

11 (d) OWNERSHIP.—Initial ownership of an offset al12 lowance shall lie with a project developer, unless otherwise 

13 specified in a legally-binding contract or agreement. 

14 (e) TRANSFERABILITY.—An offset allowance gen15 erated pursuant to this subtitle may be sold, traded, or 

16 transferred, on the conditions that— 

17 (1) the offset allowance has not expired or been 

18 retired or canceled; and 

19 (2) liability and responsibility for mitigating 

20 and compensating for reversals of registered offset 

21 allowances is specified in accordance with section 

22 2406(b). 

23 SEC. 2403. ELIGIBLE OFFSET PROJECT TYPES. 

24 (a) IN GENERAL.—Offset allowances from agricul25 tural, forestry, and other land use-related projects shall 


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1 be limited to those allowances achieving an offset of 1 or 

2 more greenhouse gases by a method other than a reduc3 tion of combustion of greenhouse gas-emitting fuel. 

4 (b) CATEGORIES OF ELIGIBLE OFFSET PROJECTS.— 

5 Subject to the requirements promulgated pursuant to sec6 tion 2402(b), the types of operations eligible to generate 

7 offset allowances under this subtitle include— 

8 (1) agricultural and rangeland sequestration 

9 and management practices, including— 

10 (A) altered tillage practices; 

11 (B) winter cover cropping, continuous 

12 cropping, and other means to increase biomass 

13 returned to soil in lieu of planting followed by 

14 fallowing; 

15 (C) conversion of cropland to rangeland or 

16 grassland, on the condition that the land has 

17 been in nonforest use for at least 10 years be18 fore the date of initiation of the project; 

19 (D) reduction of nitrogen fertilizer use or 

20 increase in nitrogen use efficiency; 

21 (E) reduction in the frequency and dura22 tion of flooding of rice paddies; and 

23 (F) reduction in carbon emissions from or24 ganic soils; 


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1 (2) changes in carbon stocks attributed to land 

2 use change and forestry activities limited to— 

3 (A) afforestation or reforestation of acre4 age not forested as of October 18, 2007; and 

5 (B) forest management resulting in an in6 crease in forest stand volume; 

7 (3) manure management and disposal, includ8 ing— 

9 (A) waste aeration; and 

10 (B) methane capture and combustion; 

11 (4) subject to the requirements of this subtitle, 

12 any other terrestrial offset practices identified by the 

13 Administrator, including— 

14 (A) the capture or reduction of fugitive 

15 greenhouse gas emissions for which no covered 

16 facility is required under section 1202(a) to 

17 submit any emission allowances, offset allow18 ances, or international emission allowances; 

19 (B) methane capture and combustion at 

20 nonagricultural facilities; and 

21 (C) other actions that result in the avoid22 ance or reduction of greenhouse gas emissions 

23 in accordance with section 2402; and 

24 (5) combinations of any of the offset practices 

25 described in paragraphs (1) through (4). 


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1 SEC. 2404. PROJECT INITIATION AND APPROVAL. 

2 (a) PROJECT APPROVAL.—A project developer— 

3 (1) may submit a petition for offset project ap4 proval at any time following the effective date of 

5 regulations promulgated under section 2402(b); but 

6 (2) may not register or issue offset allowances 

7 until such approval is received and until after the 

8 emission reductions or sequestrations supporting the 

9 offset allowances have actually occurred. 

10 (b) PETITION PROCESS.—Prior to offset registration 

11 and issuance of offset allowances, a project developer shall 

12 submit a petition to the Administrator, consisting of— 

13 (1) a copy of the monitoring and quantification 

14 plan prepared for the offset project, as described 

15 under subsection (d); 

16 (2) a greenhouse gas initiation certification, as 

17 described under subsection (e); and 

18 (3) subject to the requirements of this subtitle, 

19 any other information identified by the Adminis20 trator in the regulations promulgated under section 

21 2402 as necessary to meet the objectives of this sub22 title. 

23 (c) APPROVAL AND NOTIFICATION.— 

24 (1) IN GENERAL.—Not later than 180 days 

25 after the date on which the Administrator receives a 


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1 complete petition under subsection (b), the Adminis2 trator shall— 

3 (A) determine whether the monitoring and 

4 quantification plan satisfies the applicable re5 quirements of this subtitle; 

6 (B) determine whether the greenhouse gas 

7 initiation certification indicates a significant de8 viation in accordance with subsection (e)(3); 

9 (C) notify the project developer of the de10 terminations under subparagraphs (A) and (B); 

11 and 

12 (D) issue offset allowances for approved 

13 projects. 

14 (2) APPEAL.—The Administrator shall establish 

15 mechanisms for appeal and review of determinations 

16 made under this subsection. 

17 (d) MONITORING AND QUANTIFICATION.— 

18 (1) IN GENERAL.—A project developer shall 

19 make use of the standardized tools and methods de20 scribed in this section to monitor, quantify, and dis21 count reductions in greenhouse gas emissions or in22 creases in sequestration. 

23 (2) MONITORING AND QUANTIFICATION

24 PLAN.—A monitoring and quantification plan shall 

25 be used to monitor, quantify, and discount reducVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00056 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 tions in greenhouse gas emissions or increases in se2 questration as described by this subsection. 

3 (3) PLAN COMPLETION AND RETENTION.—A 

4 monitoring and quantification plan shall be— 

5 (A) completed for all offset projects prior 

6 to offset project initiation; and 

7 (B) retained by the project developer for 

8 the duration of the offset project. 

9 (4) PLAN REQUIREMENTS.—Subject to section 

10 2402, the Administrator, in conjunction with the 

11 Secretary of Agriculture, shall specify the required 

12 components of a monitoring and quantification plan, 

13 including— 

14 (A) a description of the offset project, in15 cluding project type; 

16 (B) a determination of accounting periods; 

17 (C) an assignment of reporting responsi18 bility; 

19 (D) the contents and timing of public re20 ports, including summaries of the original data, 

21 as well as the results of any analyses; 

22 (E) a delineation of project boundaries, 

23 based on acceptable methods and formats; 

24 (F) a description of which of the moni25 toring and quantification tools developed under 


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1 subsection (f) are to be used to monitor and 

2 quantify changes in greenhouse gas fluxes or 

3 carbon stocks associated with a project; 

4 (G) a description of which of the standard5 ized methods developed under subsection (g) to 

6 be used to determine additionality, estimate the 

7 baseline carbon, and discount for leakage; 

8 (H) based on the standardized methods 

9 chosen in subparagraphs (F) and (G), a deter10 mination of uncertainty in accordance with sub11 section (h); 

12 (I) what site-specific data, if any, will be 

13 used in monitoring, quantification, and the de14 termination of discounts; 

15 (J) a description of procedures for use in 

16 managing and storing data, including quality17 control standards and methods, such as redun18 dancy in case records are lost; 

19 (K) subject to the requirements of this 

20 subtitle, any other information identified by the 

21 Administrator or the Secretary of Agriculture 

22 as being necessary to meet the objectives of this 

23 subtitle; and 

24 (L) a description of the risk of reversals 

25 for the project, including any way in which the 


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1 proposed project may alter the risk of reversal 

2 for the project or other projects in the area. 

3 (e) GREENHOUSE GAS INITIATION CERTIFI4 CATION.— 

5 (1) IN GENERAL.—In reviewing a petition sub6 mitted under subsection (b), the Administrator shall 

7 seek to exclude each activity that undermines the in8 tegrity of the offset program established under this 

9 subtitle, such as the conversion or clearing of land, 

10 or marked change in management regime, in antici11 pation of offset project initiation. 

12 (2) GREENHOUSE GAS INITIATION CERTIFI13 CATION REQUIREMENTS.—A greenhouse gas initi14 ation certification developed under this subsection 

15 shall include— 

16 (A) the estimated greenhouse gas flux or 

17 carbon stock for the offset project for each of 

18 the 4 complete calendar years preceding the ef19 fective date of the regulations promulgated 

20 under section 2402(b); and 

21 (B) the estimated greenhouse gas flux or 

22 carbon stock for the offset project, averaged 

23 across each of the 4 calendar years preceding 

24 the effective date of the regulations promul25 gated under section 2402(b). 


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1 (3) DETERMINATION OF SIGNIFICANT DEVI2 ATION.—Based on standards developed by the Ad3 ministrator, in conjunction with the Secretary of Ag4 riculture— 

5 (A) each greenhouse gas initiation certifi6 cation submitted pursuant to this section shall 

7 be reviewed; and 

8 (B) a determination shall be made as to 

9 whether, as a result of activities or behavior in10 consistent with the purposes of this title, a sig11 nificant deviation exists between the average 

12 annual greenhouse gas flux or carbon stock and 

13 the greenhouse gas flux or carbon stock for a 

14 given year. 

15 (4) ADJUSTMENT FOR PROJECTS WITH SIGNIFI16 CANT DEVIATION.—In the case of a significant devi17 ation, the Administrator shall adjust the number of 

18 allowances awarded in order to account for the devi19 ation. 

20 (f) DEVELOPMENT OF MONITORING AND QUAN21 TIFICATION TOOLS FOR OFFSET PROJECTS.— 

22 (1) IN GENERAL.—Subject to section 2402(b), 

23 the Administrator, in conjunction with the Secretary 

24 of Agriculture, shall develop standardized tools for 

25 use in the monitoring and quantification of changes 


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1 in greenhouse gas fluxes or carbon stocks for each 

2 offset project type listed under section 2403(b). 

3 (2) TOOL DEVELOPMENT.—The tools used to 

4 monitor and quantify changes in greenhouse gas 

5 fluxes or carbon stocks shall, for each project type, 

6 include applicable— 

7 (A) statistically-sound field and remote 

8 sensing sampling methods, procedures, tech9 niques, protocols, or programs; 

10 (B) models, factors, equations, or look-up 

11 tables; and 

12 (C) any other process or tool considered to 

13 be acceptable by the Administrator, in conjunc14 tion with the Secretary of Agriculture. 

15 (g) DEVELOPMENT OF ACCOUNTING AND DIS16 COUNTING METHODS.— 

17 (1) IN GENERAL.—The Administrator, in con18 sultation with the Secretary of Agriculture, shall— 

19 (A) develop standardized methods for use 

20 in accounting for additionality and uncertainty, 

21 estimating the baseline, and discounting for 

22 leakage for each offset project type listed under 

23 section 2403(b); and 

24 (B) require that leakage be subtracted 

25 from reductions in greenhouse gas emissions or 


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1 increases in sequestration attributable to a 

2 project. 

3 (2) ADDITIONALITY DETERMINATION AND

4 BASELINE ESTIMATION.—The standardized methods 

5 used to determine additionality and establish base6 lines shall, for each project type, at a minimum— 

7 (A) in the case of a sequestration project, 

8 determine the greenhouse gas flux and carbon 

9 stock on comparable land identified on the basis 

10 of— 

11 (i) similarity in current management 

12 practices; 

13 (ii) similarity of regional, State, or 

14 local policies or programs; and 

15 (iii) similarity in geographical and bio16 physical characteristics; 

17 (B) in the case of an emission reduction 

18 project, use as a basis emissions from com19 parable land or facilities; and 

20 (C) in the case of a sequestration project 

21 or emission reduction project, specify a selected 

22 time period. 

23 (3) LEAKAGE.—The standardized methods used 

24 to determine and discount for leakage shall, at a 

25 minimum, take into consideration— 


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1 (A) the scope of the offset system in terms 

2 of activities and geography covered; 

3 (B) the markets relevant to the offset 

4 project; 

5 (C) emission intensity per unit of produc6 tion, both inside and outside of the offset 

7 project; and 

8 (D) a time period sufficient in length to 

9 yield a stable leakage rate. 

10 (h) UNCERTAINTY FOR AGRICULTURAL AND FOR11 ESTRY PROJECTS.— 

12 (1) IN GENERAL.—The Administrator, in con13 junction with the Secretary of Agriculture, shall de14 velop standardized methods for use in determining 

15 and discounting for uncertainty for each offset 

16 project type listed under section 2403(b). 

17 (2) BASIS.—The standardized methods used to 

18 determine and discount for uncertainty shall be 

19 based on— 

20 (A) the robustness and rigor of the meth21 ods used by a project developer to monitor and 

22 quantify changes in greenhouse gas fluxes or 

23 carbon stocks; 


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1 (B) the robustness and rigor of methods 

2 used by a project developer to determine 

3 additionality and leakage; and 

4 (C) an exaggerated proportional discount 

5 that increases relative to uncertainty, as deter6 mined by the Administrator, in conjunction 

7 with the Secretary of Agriculture, to encourage 

8 better measurement and accounting. 

9 (i) ACQUISITION OF NEW DATA AND REVIEW OF

10 METHODS FOR AGRICULTURAL AND FORESTRY

11 PROJECTS.—The Administrator, in conjunction with the 

12 Secretary of Agriculture, shall— 

13 (1) establish a comprehensive field sampling 

14 program to improve the scientific bases on which the 

15 standardized tools and methods developed under this 

16 section are based; and 

17 (2) review and revise the standardized tools and 

18 methods developed under this section, based on— 

19 (A) validation of existing methods, proto20 cols, procedures, techniques, factors, equations, 

21 or models; 

22 (B) development of new methods, proto23 cols, procedures, techniques, factors, equations, 

24 or models; 


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1 (C) increased availability of field data or 

2 other datasets; and 

3 (D) any other information identified by the 

4 Administrator, in conjunction with the Sec5 retary of Agriculture, that is necessary to meet 

6 the objectives of this subtitle. 

7 (j) EXCLUSION.—No activity for which any emission 

8 allowances are received under subtitle G of title III shall 

9 generate offset allowances under this subtitle. 

10 SEC. 2405. OFFSET VERIFICATION AND ISSUANCE OF AL11 LOWANCES. 

12 (a) IN GENERAL.—Offset allowances may be claimed 

13 for net emission reductions or increases in sequestration 

14 annually, after accounting for any necessary discounts in 

15 accordance with section 2404, by submitting a verification 

16 report for an offset project to the Administrator. 

17 (b) OFFSET VERIFICATION.— 

18 (1) SCOPE OF VERIFICATION.—A verification 

19 report for an offset project shall— 

20 (A) be completed by a verifier accredited in 

21 accordance with paragraph (3); and 

22 (B) shall be developed taking into consider23 ation— 


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1 (i) the information and methodology 

2 contained within a monitoring and quan3 tification plan; 

4 (ii) data and subsequent analysis of 

5 the offset project, including— 

6 (I) quantification of net emission 

7 reductions or increases in sequestra8 tion; 

9 (II) determination of 

10 additionality; 

11 (III) calculation of leakage; 

12 (IV) assessment of permanence; 

13 (V) discounting for uncertainty; 

14 and 

15 (VI) the adjustment of net emis16 sion reductions or increases in seques17 tration by the discounts determined 

18 under clauses (II) through (V); and 

19 (iii) subject to the requirements of 

20 this subtitle, any other information identi21 fied by the Administrator as being nec22 essary to achieve the purposes of this sub23 title. 


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1 (2) VERIFICATION REPORT REQUIREMENTS.— 

2 The Administrator shall specify the required compo3 nents of a verification report, including— 

4 (A) the quantity of offsets generated; 

5 (B) the amount of discounts applied; 

6 (C) an assessment of methods (and the ap7 propriateness of those methods); 

8 (D) an assessment of quantitative errors or 

9 omissions (and the effect of the errors or omis10 sions on offsets); 

11 (E) any potential conflicts of interest be12 tween a verifier and project developer; and 

13 (F) any other provision that the Adminis14 trator considers to be necessary to achieve the 

15 purposes of this subtitle. 

16 (3) VERIFIER ACCREDITATION.— 

17 (A) IN GENERAL.—Not later than 18 

18 months after the date of enactment of this Act, 

19 the Administrator shall promulgate regulations 

20 establishing a process and requirements for ac21 creditation by a third-party verifier that has no 

22 conflicts of interest. 

23 (B) PUBLIC ACCESSIBILITY.—Each verifier 

24 meeting the requirements for accreditation in 

25 accordance with this paragraph shall be listed 


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1 in a publicly-accessible database, which shall be 

2 maintained and updated by the Administrator. 

3 (c) REGISTRATION AND AWARDING OF OFFSETS.— 

4 (1) IN GENERAL.—Not later than 90 days after 

5 the date on which the Administrator receives a 

6 verification report required under subsection (b), the 

7 Administrator shall— 

8 (A) determine whether the offsets satisfy 

9 the applicable requirements of this subtitle; and 

10 (B) notify the project developer of that de11 termination. 

12 (2) AFFIRMATIVE DETERMINATION.—In the 

13 case of an affirmative determination under para14 graph (1), the Administrator shall— 

15 (A) register the offset allowances in ac16 cordance with this subtitle; and 

17 (B) issue the offset allowances. 

18 (3) APPEAL AND REVIEW.—The Administrator 

19 shall establish mechanisms for the appeal and review 

20 of determinations made under this subsection. 

21 SEC. 2406. TRACKING OF REVERSALS FOR SEQUESTRATION 

22 PROJECTS. 

23 (a) REVERSAL CERTIFICATION.— 

24 (1) IN GENERAL.—Subject to section 2402, the 

25 Administrator shall promulgate regulations requiring 


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1 the submission of a reversal certification for each 

2 offset project on an annual basis following the reg3 istration of offset allowances. 

4 (2) REQUIREMENTS.—A reversal certification 

5 submitted in accordance with this subsection shall 

6 state— 

7 (A) whether any unmitigated reversal re8 lating to the offset project has occurred in the 

9 year preceding the year in which the certifi10 cation is submitted; and 

11 (B) the quantity of each unmitigated re12 versal. 

13 (b) EFFECT ON OFFSET ALLOWANCES.— 

14 (1) INVALIDITY.—The Administrator shall de15 clare invalid all offset allowances issued for any off16 set project that has undergone a complete reversal. 

17 (2) PARTIAL REVERSAL.—In the case of an off18 set project that has undergone a partial reversal, the 

19 Administrator shall render invalid offset allowances 

20 issued for the offset project in direct proportion to 

21 the degree of reversal. 

22 (c) ACCOUNTABILITY FOR REVERSALS.—Liability 

23 and responsibility for compensation of a reversal of a reg24 istered offset allowance under subsection (a) shall lie with 


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1 the owner of the offset allowance, as described in section 

2 2402. 

3 (d) COMPENSATION FOR REVERSALS.—The unmiti4 gated reversal of 1 or more registered offset allowances 

5 that were submitted for the purpose of compliance with 

6 section 1202(a) shall require the submission of— 

7 (1) an equal number of offset allowances; or 

8 (2) a combination of offset allowances and 

9 emission allowances equal to the unmitigated rever10 sal. 

11 (e) PROJECT TERMINATION.—A project developer 

12 may cease participation in the domestic offset program es13 tablished under this subtitle at any time, on the condition 

14 that any registered allowances awarded for increases in 

15 sequestration have been compensated for by the project 

16 developer through the submission of an equal number of 

17 any combination of offset allowances and emission allow18 ances. 

19 SEC. 2407. EXAMINATIONS. 

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

21 date of enactment of this Act, the Administrator, in con22 junction with the Secretary of Agriculture, shall promul23 gate regulations governing the examination and auditing 

24 of offset allowances. 


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1 (b) REQUIREMENTS.—The regulations promulgated 

2 under this section shall specifically consider— 

3 (1) principles for initiating and conducting ex4 aminations; 

5 (2) the type or scope of examinations, includ6 ing— 

7 (A) reporting and recordkeeping; and 

8 (B) site review or visitation; 

9 (3) the rights and privileges of an examined 

10 party; and 

11 (4) the establishment of an appeal process. 

12 SEC. 2408. TIMING AND THE PROVISION OF OFFSET ALLOW13 ANCES. 

14 (a) INITIATION OF OFFSET PROJECTS.—An offset 

15 project that commences operation on or after the effective 

16 date of regulations promulgated under section 2407(a) 

17 shall be eligible to generate offset allowances under this 

18 subtitle if the offset project meets the other applicable re19 quirements of this subtitle. 

20 (b) PRE-EXISTING PROJECTS.— 

21 (1) IN GENERAL.—The Administrator may 

22 allow for the transition into the Registry of offset 

23 projects and banked offset allowances that, as of the 

24 effective date of regulations promulgated under sec25 tion 2407(a), are registered under or meet the 


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1 standards of the Climate Registry, the California 

2 Action Registry, the GHG Registry, the Chicago Cli3 mate Exchange, the GHG CleanProjects Registry, or 

4 any other Federal, State, or private reporting pro5 grams or registries if the Administrator determines 

6 that such other offset projects and banked offset al7 lowances under those other programs or registries 

8 satisfy the applicable requirements of this subtitle. 

9 (2) EXCEPTION.—An offset allowance that is 

10 expired, retired, or canceled under any other offset 

11 program, registry, or market as of the effective date 

12 of regulations promulgated under section 2407(a) 

13 shall be ineligible for transition into the Registry. 

14 SEC. 2409. OFFSET REGISTRY. 

15 In addition to the requirements established by section 

16 2404, an offset allowance registered under this subtitle 

17 shall be accompanied in the Registry by— 

18 (1) a verification report submitted pursuant to 

19 section 2405(a); 

20 (2) a reversal certification submitted pursuant 

21 to section 2406(b); and 

22 (3) subject to the requirements of this subtitle, 

23 any other information identified by the Adminis24 trator as being necessary to achieve the purposes of 

25 this subtitle. 


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1 SEC. 2410. ENVIRONMENTAL CONSIDERATIONS. 

2 (a) COORDINATION TO MINIMIZE NEGATIVE EF3 FECTS.—In promulgating regulations under this subtitle, 

4 the Administrator, in conjunction with the Secretary of 

5 Agriculture, shall act (including by rejecting projects, if 

6 necessary) to avoid or minimize, to the maximum extent 

7 practicable, adverse effects on human health or the envi8 ronment resulting from the implementation of offset 

9 projects under this subtitle. 

10 (b) REPORT ON POSITIVE EFFECTS.—Not later than 

11 2 years after the date of enactment of this Act, the Admin12 istrator, in conjunction with the Secretary of Agriculture, 

13 shall submit to Congress a report detailing— 

14 (1) the incentives, programs, or policies capable 

15 of fostering improvements to human health or the 

16 environment in conjunction with the implementation 

17 of offset projects under this subtitle; and 

18 (2) the cost of those incentives, programs, or 

19 policies. 

20 (c) USE OF NATIVE PLANT SPECIES IN OFFSET

21 PROJECTS.—Not later than 18 months after the date of 

22 enactment of this Act, the Administrator, in conjunction 

23 with the Secretary of Agriculture, shall promulgate regula24 tions for the selection, use, and storage of native and non25 native plant materials— 


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1 (1) to ensure native plant materials are given 

2 primary consideration, in accordance with applicable 

3 Department of Agriculture guidance for use of na4 tive plant materials; 

5 (2) to prohibit the use of Federal- or State-des6 ignated noxious weeds; and 

7 (3) to prohibit the use of a species listed by a 

8 regional or State invasive plant council within the 

9 applicable region or State. 

10 SEC. 2411. PROGRAM REVIEW. 

11 Not later than 5 years after the date of enactment 

12 of this Act, and periodically thereafter, the Administrator, 

13 in conjunction with the Secretary of Agriculture, shall re14 view and revise, as necessary to achieve the purposes of 

15 this Act, the regulations promulgated under this subtitle. 

16 SEC. 2412. RETAIL CARBON OFFSETS. 

17 (a) DEFINITION OF RETAIL CARBON OFFSET.—In 

18 this section, the term ‘‘retail carbon offset’’ means any 

19 carbon credit or carbon offset that cannot be used in satis20 faction of any mandatory compliance obligation under a 

21 regulatory system for reducing greenhouse gas emissions. 

22 (b) QUALIFYING LEVELS AND REQUIREMENTS.—Not 

23 later than January 1, 2009, the Administrator shall estab24 lish new qualifying levels and requirements for Energy 


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1 Star certification for retail carbon offsets, effective begin2 ning January 1, 2010. 

3 Subtitle E—International Emission 

4 Allowances 

5 SEC. 2501. USE OF INTERNATIONAL EMISSION ALLOW6 ANCES. 

7 The owner or operator of a covered facility may sat8 isfy up to 15 percent of the allowance submission require9 ment of the covered facility under section 1202(a) by sub10 mitting emission allowances obtained on a foreign green11 house gas emissions trading market, on the condition that 

12 the Administrator has certified the market in accordance 

13 with the regulations promulgated pursuant to section 

14 2502(a). 

15 SEC. 2502. REGULATIONS. 

16 (a) IN GENERAL.—Not later than 2 years after the 

17 date of enactment of this Act, the Administrator shall pro18 mulgate regulations, taking into consideration protocols 

19 adopted in accordance with the United Nations Frame20 work Convention on Climate Change, done at New York 

21 on May 9, 1992— 

22 (1) approving the use under this subtitle of 

23 emission allowances from such foreign greenhouse 

24 gas emissions trading markets as the regulations 

25 may establish; and 


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1 (2) permitting the use of international emission 

2 allowances from the foreign country that issued the 

3 emission allowances. 

4 (b) REQUIREMENTS.—The regulations promulgated 

5 under subsection (a) shall require that, in order to be ap6 proved for use under this subtitle— 

7 (1) an emission allowance shall have been 

8 issued by a foreign country pursuant to a govern9 mental program that imposes mandatory absolute 

10 tonnage limits on greenhouse gas emissions from the 

11 foreign country, or 1 or more industry sectors in 

12 that country, pursuant to protocols described in sub13 section (a); and 

14 (2) the governmental program be of comparable 

15 stringency to the program established by this Act, 

16 including comparable monitoring, compliance, and 

17 enforcement. 

18 SEC. 2503. FACILITY CERTIFICATION. 

19 The owner or operator of a covered facility who sub20 mits an international emission allowance under this sub21 title shall certify that the allowance has not been retired 

22 from use in the registry of the applicable foreign country. 


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1 Subtitle F—Carbon Market 

2 Efficiency Board 

3 SEC. 2601. PURPOSES. 

4 The purposes of this subtitle are— 

5 (1) to ensure that the imposition of limits on 

6 greenhouse gas emissions will not significantly harm 

7 the economy of the United States; and 

8 (2) to establish a Carbon Market Efficiency 

9 Board to ensure the implementation and mainte10 nance of a stable, functioning, and efficient market 

11 in emission allowances. 

12 SEC. 2602. ESTABLISHMENT OF CARBON MARKET EFFI13 CIENCY BOARD. 

14 (a) ESTABLISHMENT.—There is established a board, 

15 to be known as the ‘‘Carbon Market Efficiency Board’’ 

16 (referred to in this subtitle as the ‘‘Board’’). 

17 (b) PURPOSES.—The purposes of the Board are— 

18 (1) to promote the achievement of the purposes 

19 of this Act; 

20 (2) to observe the national greenhouse gas 

21 emission market and evaluate periods during which 

22 the cost of emission allowances provided under Fed23 eral law might pose significant harm to the economy; 

24 and 


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1 (3) to submit to the President and Congress, 

2 and publish on the Internet, quarterly reports— 

3 (A) describing— 

4 (i) the status of the emission allow5 ance market established under this Act; 

6 (ii) the economic cost and benefits of 

7 the market, regional, industrial, and con8 sumer responses to the market; 

9 (iii) where practicable, energy invest10 ment responses to the market; 

11 (iv) any corrective measures that 

12 should be carried out to relieve excessive 

13 net costs of the market; 

14 (v) plans to compensate for those 

15 measures to ensure that the long-term 

16 emission-reduction goals of this Act are 

17 achieved; and 

18 (vi) any instances of actual or poten19 tial fraud on, or manipulation of, the mar20 ket that the Board has identified, and the 

21 effects of such fraud or manipulation; 

22 (B) that are timely and succinct to ensure 

23 regular monitoring of market trends; and 

24 (C) that are prepared independently by the 

25 Board. 


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1 (c) MEMBERSHIP.— 

2 (1) COMPOSITION.—The Board shall be com3 posed of— 

4 (A) 7 members who are citizens of the 

5 United States, to be appointed by the Presi6 dent, by and with the advice and consent of the 

7 Senate; and 

8 (B) an advisor who is a scientist with ex9 pertise in climate change and the effects of cli10 mate change on the environment, to be ap11 pointed by the President, by and with the ad12 vice and consent of the Senate. 

13 (2) REQUIREMENTS.—In appointing members 

14 of the Board under paragraph (1), the President 

15 shall— 

16 (A) ensure fair representation of the finan17 cial, agricultural, industrial, and commercial 

18 sectors, and the geographical regions, of the 

19 United States, and include a representative of 

20 consumer interests; 

21 (B) appoint not more than 1 member from 

22 each such geographical region; and 

23 (C) ensure that not more than 4 members 

24 of the Board serving at any time are affiliated 

25 with the same political party. 


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1 (3) COMPENSATION.— 

2 (A) IN GENERAL.—A member of the Board 

3 shall be compensated at a rate equal to the 

4 daily equivalent of the annual rate of basic pay 

5 prescribed for level II of the Executive Schedule 

6 under section 5313 of title 5, United States 

7 Code, for each day (including travel time) dur8 ing which the member is engaged in the per9 formance of the duties of the Board. 

10 (B) CHAIRPERSON.—The Chairperson of 

11 the Board shall be compensated at a rate equal 

12 to the daily equivalent of the annual rate of 

13 basic pay prescribed for level I of the Executive 

14 Schedule under section 5312 of title 5, United 

15 States Code, for each day (including travel 

16 time) during which the member is engaged in 

17 the performance of the duties of the Board. 

18 (4) PROHIBITIONS.— 

19 (A) CONFLICTS OF INTEREST.—An indi20 vidual employed by, or holding any official rela21 tionship (including any shareholder) with, any 

22 entity engaged in the generation, transmission, 

23 distribution, or sale of energy, an individual 

24 who has any pecuniary interest in the genera25 tion, transmission, distribution, or sale of enVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00080 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 ergy, or an individual who has a pecuniary in2 terest in the implementation of this Act, shall 

3 not be appointed to the Board under this sub4 section. 

5 (B) NO OTHER EMPLOYMENT.—A member 

6 of the Board shall not hold any other employ7 ment during the term of service of the member. 

8 (d) TERM; VACANCIES.— 

9 (1) TERM.— 

10 (A) IN GENERAL.—The term of a member 

11 of the Board shall be 14 years, except that the 

12 members first appointed to the Board shall be 

13 appointed for terms in a manner that ensures 

14 that— 

15 (i) the term of not more than 1 mem16 ber shall expire during any 2-year period; 

17 and 

18 (ii) no member serves a term of more 

19 than 14 years. 

20 (B) OATH OF OFFICE.—A member shall 

21 take the oath of office of the Board by not later 

22 than 15 days after the date on which the mem23 ber is appointed under subsection (c)(1). 

24 (C) REMOVAL.— 


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1 (i) IN GENERAL.—A member may be 

2 removed from the Board on determination 

3 of the President for cause. 

4 (ii) NOTIFICATION.—Not later than 

5 30 days before removing a member from 

6 the Board for cause under clause (i), the 

7 President shall provide to Congress an ad8 vance notification of the determination by 

9 the President to remove the member. 

10 (2) VACANCIES.— 

11 (A) IN GENERAL.—A vacancy on the 

12 Board— 

13 (i) shall not affect the powers of the 

14 Board; and 

15 (ii) shall be filled in the same manner 

16 as the original appointment was made. 

17 (B) SERVICE UNTIL NEW APPOINTMENT.— 

18 A member of the Board the term of whom has 

19 expired or otherwise been terminated shall con20 tinue to serve until the date on which a replace21 ment is appointed under subparagraph (A)(ii), 

22 if the President determines that service to be 

23 appropriate. 

24 (e) CHAIRPERSON AND VICE-CHAIRPERSON.—Of 

25 members of the Board, the President shall appoint— 


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1 (1) 1 member to serve as Chairperson of the 

2 Board for a term of 4 years; and 

3 (2) 1 member to serve as Vice-Chairperson of 

4 the Board for a term of 4 years. 

5 (f) MEETINGS.— 

6 (1) INITIAL MEETING.—The Board shall hold 

7 the initial meeting of the Board as soon as prac8 ticable after the date on which all members have 

9 been appointed to the Board under subsection 

10 (c)(1). 

11 (2) PRESIDING OFFICER.—A meeting of the 

12 Board shall be presided over by— 

13 (A) the Chairperson; 

14 (B) in any case in which the Chairperson 

15 is absent, the Vice-Chairperson; or 

16 (C) in any case in which the Chairperson 

17 and Vice-Chairperson are absent, a chairperson 

18 pro tempore, to be elected by the members of 

19 the Board. 

20 (3) QUORUM.—Four members of the Board 

21 shall constitute a quorum for a meeting of the 

22 Board. 

23 (4) OPEN MEETINGS.—The Board shall be sub24 ject to section 552b of title 5, United States Code 


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1 (commonly known as the ‘‘Government in the Sun2 shine Act’’). 

3 (g) RECORDS.—The Board shall be subject to section 

4 552 of title 5, United States Code (commonly known as 

5 the ‘‘Freedom of Information Act’’). 

6 (h) REVIEW BY GOVERNMENT ACCOUNTABILITY OF7 FICE.—Not later than January 1, 2013, and annually 

8 thereafter, the Comptroller General of the United States 

9 shall conduct a review of the efficacy of the Board in ful10 filling the purposes and duties of the Board under this 

11 subtitle. 

12 SEC. 2603. DUTIES. 

13 (a) INFORMATION GATHERING.— 

14 (1) AUTHORITY.—The Board shall collect and 

15 analyze relevant market information to promote a 

16 full understanding of the dynamics of the emission 

17 allowance market established under this Act. 

18 (2) INFORMATION.—The Board shall gather 

19 such information as the Board determines to be ap20 propriate regarding the status of the market, includ21 ing information relating to— 

22 (A) emission allowance allocation and 

23 availability; 

24 (B) the price of emission allowances; 


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1 (C) macro- and micro-economic effects of 

2 unexpected significant increases and decreases 

3 in emission allowance prices, or shifts in the 

4 emission allowance market, should those in5 creases, decreases, or shifts occur; 

6 (D) economic effect thresholds that could 

7 warrant implementation of cost relief measures 

8 described in section 2604(a) after the initial 2- 

9 year period described in subsection (d)(2); 

10 (E) in the event any cost relief measures 

11 described in section 2604(a) are taken, the ef12 fects of those measures on the market; 

13 (F) maximum levels of cost relief measures 

14 that are necessary to achieve avoidance of eco15 nomic harm and preserve achievement of the 

16 purposes of this Act; and 

17 (G) the success of the market in promoting 

18 achievement of the purposes of this Act. 

19 (b) TREATMENT AS PRIMARY ACTIVITY.— 

20 (1) IN GENERAL.—During the initial 2-year pe21 riod of operation of the Board, information gath22 ering under subsection (a) shall be the primary ac23 tivity of the Board. 

24 (2) SUBSEQUENT AUTHORITY.—After the 2- 

25 year period described in paragraph (1), the Board 


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1 shall assume authority to implement the cost-relief 

2 measures described in section 2604(a). 

3 (c) STUDY.— 

4 (1) IN GENERAL.—During the 2-year period be5 ginning on the date on which the emission allowance 

6 market established under this Act begins operation, 

7 the Board shall conduct a study of other markets for 

8 tradeable permits to emit covered greenhouse gases. 

9 (2) REPORT.—Not later than 180 days after 

10 the beginning of the period described in paragraph 

11 (1), the Board shall submit to Congress, and publish 

12 on the Internet, a report describing the status of the 

13 market, specifically with respect to volatility within 

14 the market and the average price of emission allow15 ances during that 180-day period. 

16 (d) EMPLOYMENT OF COST RELIEF MEASURES.— 

17 (1) IN GENERAL.—If the Board determines 

18 that the emission allowance market established 

19 under this Act poses a significant harm to the econ20 omy of the United States, the Board shall carry out 

21 such cost relief measures relating to that market as 

22 the Board determines to be appropriate under sec23 tion 2604(a). 

24 (2) INITIAL PERIOD.—During the 2-year period 

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1 ance market established under this Act begins oper2 ation, if the Board determines that the average daily 

3 closing price of emission allowances during a 180- 

4 day period exceeds the upper range of the estimate 

5 provided under section 2605, the Board shall— 

6 (A) increase the quantity of emission al7 lowances that covered facilities may borrow 

8 from the prescribed allocations of the covered 

9 facilities for future years; and 

10 (B) take subsequent action as described in 

11 section 2604(a)(2). 

12 (3) REQUIREMENTS.—Any action carried out 

13 pursuant to this subsection shall be subject to the 

14 requirements of section 2604(a)(3)(B). 

15 (e) REPORTS.—The Board shall submit to the Presi16 dent and Congress quarterly reports— 

17 (1) describing the status of the emission allow18 ance market established under this Act, the eco19 nomic effects of the market, regional, industrial, and 

20 consumer responses to the market, energy invest21 ment responses to the market, the effects on the 

22 market of any fraud on, or manipulation of, the 

23 market that the Board has identified, any corrective 

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1 sive costs of the market, and plans to compensate 

2 for those measures; and 

3 (2) that are prepared independently by the 

4 Board, and not in partnership with Federal agen5 cies. 

6 SEC. 2604. POWERS. 

7 (a) COST RELIEF MEASURES.— 

8 (1) IN GENERAL.—Beginning on the day after 

9 the date of expiration of the 2-year period described 

10 in section 2603(b), the Board may carry out 1 or 

11 more of the following cost relief measures to ensure 

12 functioning, stable, and efficient markets for emis13 sion allowances: 

14 (A) Increase the quantity of emission al15 lowances that covered facilities may borrow 

16 from the prescribed allocations of the covered 

17 facilities for future years. 

18 (B) Expand the period during which a cov19 ered facility may repay the Administrator for 

20 an emission allowance as described in subpara21 graph (A). 

22 (C) Lower the interest rate at which an 

23 emission allowance may be borrowed as de24 scribed in subparagraph (A). 


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1 (D) Increase the quantity of emission al2 lowances obtained on a foreign greenhouse gas 

3 emissions trading market that the owner or op4 erator of any covered facility may use to satisfy 

5 the allowance submission requirement of the 

6 covered facility under section 1202(a), on the 

7 condition that the Administrator has certified 

8 the market in accordance with the regulations 

9 promulgated pursuant to section 2502(a). 

10 (E) Increase the quantity of offset allow11 ances generated in accordance with subtitle D 

12 that the owner or operator of any covered facil13 ity may use to satisfy the total allowance sub14 mission requirement of the covered facility 

15 under section 1202(a). 

16 (F) Expand the total quantity of emission 

17 allowances made available to all covered facili18 ties at any given time by borrowing against the 

19 total allowable quantity of emission allowances 

20 to be provided for future years. 

21 (2) SUBSEQUENT ACTIONS.—On determination 

22 by the Board to carry out a cost relief measure pur23 suant to paragraph (1), the Board shall— 

24 (A) allow the cost relief measure to be 

25 used only during the applicable allocation year; 


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1 (B) exercise the cost relief measure incre2 mentally, and only as needed to avoid signifi3 cant economic harm during the applicable allo4 cation year; 

5 (C) specify the terms of the relief to be 

6 achieved using the cost relief measure, includ7 ing requirements for entity-level or national 

8 market-level compensation to be achieved by a 

9 specific date or within a specific time period; 

10 (D) in accordance with section 2603(e), 

11 submit to the President and Congress a report 

12 describing the actions carried out by the Board 

13 and recommendations for the terms under 

14 which the cost relief measure should be author15 ized by Congress and carried out by Federal en16 tities; and 

17 (E) evaluate, at the end of the applicable 

18 allocation year, actions that need to be carried 

19 out during subsequent years to compensate for 

20 any cost relief measure carried out during the 

21 applicable allocation year. 

22 (3) ACTION ON EXPANSION OF BORROWING.— 

23 (A) IN GENERAL.—If the Board carries 

24 out a cost relief measure pursuant to paragraph 

25 (1) that results in the expansion of borrowing 


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1 of emission allowances under this Act, and if 

2 the average daily closing price of emission al3 lowances for the 180-day period beginning on 

4 the date on which borrowing is so expanded ex5 ceeds the upper range of the estimate provided 

6 under section 2605, the Board shall increase 

7 the quantity of emission allowances available for 

8 the applicable allocation year in accordance 

9 with this paragraph. 

10 (B) REQUIREMENTS.—An increase in the 

11 quantity of emission allowances under subpara12 graph (A) shall— 

13 (i) apply to all covered facilities; 

14 (ii) be allocated in accordance with 

15 the applicable formulas and procedures es16 tablished under this Act; 

17 (iii) be equal to not more than 5 per18 cent of the total quantity of emission al19 lowances otherwise available for the appli20 cable allocation year under this Act; 

21 (iv) remain in effect only for the ap22 plicable allocation year; 

23 (v) specify the date by which the in24 crease shall be repaid by covered facilities 

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1 sion allowances available for subsequent al2 location years; and 

3 (vi) require the repayment under 

4 clause (v) to be made by not later than the 

5 date that is 15 years after the date on 

6 which the increase is provided. 

7 (b) ASSESSMENTS.—Not more frequently than semi8 annually, the Board may levy on owners and operators of 

9 covered facilities an assessment sufficient to pay the esti10 mated expenses of the Board and the salaries of members 

11 of and employees of the Board during the 180-day period 

12 beginning on the date on which the assessment is levied, 

13 taking into account any deficit carried forward from the 

14 preceding 180-day period. 

15 (c) LIMITATIONS.—Nothing in this section gives the 

16 Board the authority— 

17 (1) to consider or prescribe entity-level petitions 

18 for relief from the costs of an emission allowance al19 location or trading program established under Fed20 eral law; 

21 (2) to carry out any investigative or punitive 

22 process under the jurisdiction of any Federal or 

23 State court; 


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1 (3) to interfere with, modify, or adjust any 

2 emission allowance allocation scheme established 

3 under Federal law; or 

4 (4) to modify the total quantity of emission al5 lowances issued under this Act for the period of cal6 endar years 2012 through 2050. 

7 SEC. 2605. ESTIMATE OF COSTS TO ECONOMY OF LIMITING 

8 GREENHOUSE GAS EMISSIONS. 

9 Not later than July 1, 2014, the Administrator, using 

10 economic and scientific analyses, shall submit to Congress 

11 a report that describes— 

12 (1) the projected price range at which emission 

13 allowances are expected to trade during the 2-year 

14 period of the initial greenhouse gas emission market 

15 established under Federal law; and 

16 (2) the projected impact of that market on the 

17 economy of the United States. 

18 TITLE III—ALLOCATING AND 

19 DISTRIBUTING ALLOWANCES 

20 Subtitle A—Auctions 

21 SEC. 3101. ALLOCATION FOR DEPOSITS INTO DEFICIT RE22 DUCTION FUND. 

23 (a) ESTABLISHMENT.—There is established in the 

24 Treasury a fund to be known as the ‘‘Deficit Reduction 

25 Fund’’ (referred to in this section as the ‘‘Fund’’). 


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1 (b) APPROPRIATIONS.—No disbursements shall be 

2 made from the Fund except pursuant to an appropriation 

3 Act. 

4 (c) ALLOCATION.—Not later than April 1, 2011, and 

5 annually thereafter through calendar year 2049, the Ad6 ministrator shall allocate to the Corporation a percentage 

7 of the quantity of emission allowances established for the 

8 following calendar year, as follows: 

Year Percentage 

2012 ....................................................................... 6.10 

2013 ....................................................................... 6.33 

2014 ....................................................................... 6.56 

2015 ....................................................................... 6.79 

2016 ....................................................................... 7.02 

2017 ....................................................................... 7.25 

2018 ....................................................................... 7.71 

2019 ....................................................................... 7.94 

2020 ....................................................................... 8.40 

2021 ....................................................................... 9.09 

2022 ....................................................................... 9.43 

2023 ....................................................................... 9.89 

2024 ....................................................................... 10.52 

2025 ....................................................................... 11.16 

2026 ....................................................................... 11.85 

2027 ....................................................................... 12.77 

2028 ....................................................................... 13.46 

2029 ....................................................................... 14.15 

2030 ....................................................................... 14.43 

2031 ....................................................................... 15.99 

2032 ....................................................................... 15.99 

2033 ....................................................................... 15.99 

2034 ....................................................................... 15.99 

2035 ....................................................................... 15.99 

2036 ....................................................................... 15.99 

2037 ....................................................................... 15.99 

2038 ....................................................................... 15.99 

2039 ....................................................................... 15.99 

2040 ....................................................................... 15.99 

2041 ....................................................................... 15.99 

2042 ....................................................................... 15.99 

2043 ....................................................................... 15.99 

2044 ....................................................................... 15.99 

2045 ....................................................................... 15.99 

2046 ....................................................................... 15.99 


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Year Percentage 

2047 ....................................................................... 15.99 

2048 ....................................................................... 15.99 

2049 ....................................................................... 15.99 

2050 ....................................................................... 15.99 

1 (d) AUCTIONING.—Not later than 330 days before 

2 the beginning of a calendar year identified in the table 

3 contained in subsection (c), the Corporation shall auction 

4 all of the emission allowances allocated to the Corporation 

5 for the calendar year under subsection (c). 

6 (e) DEPOSITS.—The Corporation shall deposit all 

7 proceeds of auctions conducted pursuant to subsection (d), 

8 immediately upon receipt of those proceeds, in the Fund. 

9 SEC. 3102. ALLOCATION FOR EARLY AUCTIONS. 

10 Not later than 180 days after the date of enactment 

11 of this Act, the Administrator shall allocate 5 percent of 

12 the quantity of remainder emission allowances for cal13 endar year 2012, 3 percent of the quantity of remainder 

14 emission allowances for calendar year 2013, and 1 percent 

15 of the quantity of remainder emission allowances for cal16 endar 2014, to the Corporation for early auctioning in ac17 cordance with section 4301. 

18 SEC. 3103. ALLOCATION FOR ANNUAL AUCTIONS. 

19 Not later than April 1, 2011, and annually thereafter 

20 through calendar year 2049, the Administrator shall allo21 cate to the Corporation for annual auctioning a percentage 


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1 of the quantity of remainder emission allowances for the 

2 following calendar year, as follows: 

Calendar Year 

Percentage of Quantity of Remainder 

Emission Allowances Allocated to the 

Corporation 

2012 21.5 

2013 24.5 

2014 27.5 

2015 29.5 

2016 30.5 

2017 31.5 

2018 33.5 

2019 34.5 

2020 36.5 

2021 39.5 

2022 41 

2023 43 

2024 45.75 

2025 48.5 

2026 51.5 

2027 55.5 

2028 58.5 

2029 61.5 

2030 62.75 

2031 69.5 

2032 69.5 

2033 69.5 

2034 69.5 

2035 69.5 


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Calendar Year 

Percentage of Quantity of Remainder 

Emission Allowances Allocated to the 

Corporation 

2036 69.5 

2037 69.5 

2038 69.5 

2039 69.5 

2040 69.5 

2041 69.5 

2042 69.5 

2043 69.5 

2044 69.5 

2045 69.5 

2046 69.5 

2047 69.5 

2048 69.5 

2049 69.5 

2050 69.5 

1 Subtitle B—Early Action 

2 SEC. 3201. ALLOCATION. 

3 Not later than 2 years after the date of enactment 

4 of this Act, the Administrator shall allocate to owners or 

5 operators of covered facilities and other facilities that emit 

6 greenhouse gas, in recognition of actions of the owners 

7 and operators taken since January 1, 1994, that resulted 

8 in verified and credible reductions of greenhouse gas emis9 sions— 


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1 (1) 5 percent of the quantity of remainder 

2 emission allowances for calendar year 2012; 

3 (2) 4 percent of the quantity of remainder 

4 emission allowances for calendar year 2013; 

5 (3) 3 percent of the quantity of remainder 

6 emission allowances for calendar year 2014; 

7 (4) 2 percent of the quantity of remainder 

8 emission allowances for calendar year 2015; and 

9 (5) 1 percent of the quantity of remainder 

10 emission allowances for calendar year 2016. 

11 SEC. 3202. DISTRIBUTION. 

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

13 date of enactment of this Act, the Administrator shall es14 tablish, by regulation, procedures and standards for use 

15 in distributing, to owners and operators of covered facili16 ties and other facilities that emit greenhouse gas, emission 

17 allowances allocated under section 3201. 

18 (b) CONSIDERATION.—The procedures and standards 

19 established under subsection (a) shall provide for consider20 ation of verified and credible emission reductions reg21 istered before the date of enactment of this Act under— 

22 (1) the Climate Leaders Program, or any other 

23 voluntary greenhouse gas reduction program of the 

24 United States Environmental Protection Agency and 

25 United States Department of Energy; 


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1 (2) the Voluntary Reporting of Greenhouse 

2 Gases Program of the Energy Information Adminis3 tration; 

4 (3) State or regional greenhouse gas emission 

5 reduction programs that include systems for track6 ing and verifying the greenhouse gas emission reduc7 tions; and 

8 (4) voluntary entity programs that resulted in 

9 entity-wide reductions in greenhouse gas emissions. 

10 (c) DISTRIBUTION.—Not later than 4 years after the 

11 date of enactment of this Act, the Administrator shall dis12 tribute all emission allowances allocated under section 

13 3201. 

14 Subtitle C—States 

15 SEC. 3301. ALLOCATION FOR ENERGY SAVINGS. 

16 (a) ALLOCATION.—Not later than April 1, 2011, and 

17 annually thereafter through calendar year 2049, the Ad18 ministrator shall allocate 2 percent of the quantity of re19 mainder emission allowances for the following calendar 

20 year among States that have adopted regulations by not 

21 later than the date on which the allowance allocations are 

22 made, that subject regulated natural gas and electric utili23 ties that deliver gas or electricity in those States to regula24 tions that— 


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1 (1) automatically adjust the rates charged by 

2 natural gas and electric utilities to fully recover fixed 

3 costs of service without regard to whether their ac4 tual sales are higher or lower than the forecast of 

5 sales on which the tariffed rates were based; and 

6 (2) make cost-effective energy-efficiency expend7 itures by investor-owned natural gas or electric utili8 ties at least as rewarding to their shareholders as 

9 power or energy purchases, or expenditures on new 

10 energy supplies or infrastructure. 

11 (b) ALLOCATION FOR BUILDING EFFICIENCY.—Not 

12 later than January 1, 2012, and annually thereafter 

13 through January 1, 2050, the Administrator shall allocate 

14 1 percent of the quantity of remainder emission allowances 

15 among States that are in compliance with section 304(c) 

16 of the Energy Conservation and Production Act (as 

17 amended by section 5201). 

18 (c) DISTRIBUTION.—Not later than 2 years after the 

19 date of enactment of this Act, the Administrator shall es20 tablish procedures and standards for the distribution of 

21 emission allowances to States in accordance with sub22 sections (a) and (b). 

23 (d) USE.—Any State receiving emission allowances 

24 under this section for a calendar year shall retire or use, 

25 in 1 or more of the ways described in section 3303(c)(1), 


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1 not less than 90 percent of the emission allowances allo2 cated to the State (or proceeds of the sale of those allow3 ances) under this section for the calendar year. 

4 SEC. 3302. ALLOCATION FOR STATES WITH PROGRAMS 

5 THAT EXCEED FEDERAL EMISSION REDUC6 TION TARGETS. 

7 (a) ALLOCATION.—Not later than April 1, 2011, and 

8 annually thereafter through calendar year 2049, the Ad9 ministrator shall allocate 2 percent of the quantity of re10 mainder emission allowances for the following calendar 

11 year among States that have— 

12 (1) before the date of enactment of this Act, en13 acted statewide greenhouse gas emission reduction 

14 targets that are more stringent than the nationwide 

15 targets established under subtitle B of title I; and 

16 (2) by the time of an allocation under this sub17 section, imposed on covered facilities within the 

18 States aggregate greenhouse gas emission limitations 

19 more stringent than those imposed on covered facili20 ties under subtitle B of title I. 

21 (b) DISTRIBUTION.—Not later than 2 years after the 

22 date of enactment of this Act, the Administrator shall es23 tablish procedures and standards for use in distributing 

24 emission allowances among States in accordance with sub25 section (a). 


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1 (c) USE.—Any State receiving emission allowances 

2 under this section for a calendar year shall retire or use, 

3 in 1 or more of the ways described in section 3303(c)(1), 

4 not less than 90 percent of the emission allowances allo5 cated to the State (or proceeds of the sale of those allow6 ances) under this section for the calendar year. 

7 SEC. 3303. GENERAL ALLOCATION. 

8 (a) ALLOCATION.—Subject to subsection (d)(3), not 

9 later than April 1, 2011, and annually thereafter through 

10 calendar year 2049, the Administrator shall allocate 5 per11 cent of the quantity of remainder emission allowances for 

12 the following calendar year among States. 

13 (b) DISTRIBUTION.—The allowances available for al14 location to States under subsection (a) for a calendar year 

15 shall be distributed as follows: 

(1) For each calendar year, 1 16 ⁄3 of the quantity 

17 of allowances available for allocation to States under 

18 subsection (a) shall be distributed among individual 

19 States based on the proportion that— 

20 (A) the expenditures of a State for the 

21 low-income home energy assistance program es22 tablished under the Low-Income Home Energy 

23 Assistance Act of 1981 (42 U.S.C. 8621 et 

24 seq.) for the preceding calendar year; bears to 


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1 (B) the expenditures of all States for that 

2 program for the preceding calendar year. 

(2) For each calendar year, 1 3 ⁄3 of the quantity 

4 of allowances available for allocation to States under 

5 subsection (a) shall be distributed among the States 

6 based on the proportion that— 

7 (A) the population of a State, as deter8 mined by the most recent decennial census pre9 ceding the calendar year for which the alloca10 tion regulations are for the allocation year; 

11 bears to 

12 (B) the population of all States, as deter13 mined by that census. 

(3) For each calendar year, 1 14 ⁄3 of the quantity 

15 of allowances available for allocation to States under 

16 subsection (a) shall be distributed among the States 

17 based on the proportion that— 

18 (A) the quantity of carbon dioxide that 

19 would be emitted assuming that all of the coal 

20 that is mined, natural gas that is processed, 

21 and petroleum that is refined within the bound22 aries of a State during the preceding year is 

23 completely combusted and that none of the car24 bon dioxide emissions are captured, as deter25 mined by the Secretary of Energy; bears to 


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1 (B) the aggregate quantity of carbon diox2 ide that would be emitted assuming that all of 

3 the coal that is mined, natural gas that is proc4 essed, and petroleum that is refined in all 

5 States for the preceding year is completely com6 busted and that none of the carbon dioxide 

7 emissions are captured, as determined by the 

8 Secretary of Energy. 

9 (c) USE.— 

10 (1) IN GENERAL.—During any calendar year, a 

11 State shall retire or use in 1 or more of the fol12 lowing ways not less than 90 percent of the allow13 ances allocated to the State (or proceeds of sale of 

14 those emission allowances) under this section for 

15 that calendar year: 

16 (A) To mitigate impacts on low-income en17 ergy consumers. 

18 (B) To promote energy efficiency (includ19 ing support of electricity and natural gas de20 mand reduction, waste minimization, and recy21 cling programs). 

22 (C) To promote investment in nonemitting 

23 electricity generation technology, including 

24 planning for the siting of facilities employing 


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1 that technology in States (including territorial 

2 waters of States). 

3 (D) To improve public transportation and 

4 passenger rail service and otherwise promote re5 ductions in vehicle miles traveled. 

6 (E) To encourage advances in energy tech7 nology that reduce or sequester greenhouse gas 

8 emissions. 

9 (F) To address local or regional impacts of 

10 climate change, including by accommodating, 

11 protecting, or relocating affected communities 

12 and public infrastructure. 

13 (G) To collect, evaluate, disseminate, and 

14 use information necessary for affected coastal 

15 communities to adapt to climate change (such 

16 as information derived from inundation pre17 diction systems). 

18 (H) To mitigate obstacles to investment by 

19 new entrants in electricity generation markets 

20 and energy-intensive manufacturing sectors. 

21 (I) To address local or regional impacts of 

22 climate change policy, including providing as23 sistance to displaced workers. 


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1 (J) To mitigate impacts on energy-inten2 sive industries in internationally competitive 

3 markets. 

4 (K) To reduce hazardous fuels, and to pre5 vent and suppress wildland fire. 

6 (L) To fund rural, municipal, and agricul7 tural water projects that are consistent with the 

8 sustainable use of water resources. 

9 (M) To fund any other purpose the States 

10 determine to be necessary to mitigate any nega11 tive economic impacts as a result of— 

12 (i) global warming; or 

13 (ii) new regulatory requirements as a 

14 result of this Act. 

15 (2) DEADLINE.—A State shall distribute or sell 

16 allowances for use in accordance with paragraph (1) 

17 by not later than the beginning of each allowance al18 location year. 

19 (3) RETURN OF ALLOWANCES.—Not later than 

20 330 days before the end of each allowance allocation 

21 year, a State shall return to the Administrator any 

22 allowances not distributed by the deadline under 

23 paragraph (2). 

24 (4) USE FOR RECYCLING.—During any cal25 endar year, a State shall retire or use not less than 


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1 5 percent of the emission allowances allocated to the 

2 State (or proceeds of sale of those emission allow3 ances) under this section for increasing recycling 

4 rates through activities such as— 

5 (A) improving recycling infrastructure; 

6 (B) increasing public education on the ben7 efits of recycling, particularly with respect to 

8 greenhouse gases; 

9 (C) improving residential, commercial, and 

10 industrial collection of recyclables; 

11 (D) improving recycling system efficiency; 

12 (E) increasing recycling yields; and 

13 (F) improving the quality and usefulness 

14 of recycled materials. 

15 (d) PROGRAM FOR TRIBAL COMMUNITIES.— 

16 (1) ESTABLISHMENT.—Not later than 3 years 

17 after the date of enactment of this Act, the Adminis18 trator, in consultation with the Secretary of the In19 terior, shall by regulation establish a program for 

20 tribal communities— 

21 (A) that is designed to deliver assistance to 

22 tribal communities within the United States 

23 that face disruption or dislocation as a result of 

24 global climate change; and 


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1 (B) under which the Administrator shall 

2 distribute 0.5 percent of the quantity of remain3 der emission allowances for each calendar 

4 among tribal governments of the tribal commu5 nities described in subparagraph (A). 

6 (2) ALLOCATION.—Beginning in the first cal7 endar year that begins after promulgation of the 

8 regulations referred to in paragraph (1), and annu9 ally thereafter until calendar year 2050, the Admin10 istrator shall allocate 0.5 percent of the quantity of 

11 remainder emission allowances for each calendar 

12 year to the program established under paragraph 

13 (1). 

14 SEC. 3304. ALLOCATION FOR MASS TRANSIT. 

15 (a) ALLOCATION.—Not later than April 1, 2011, and 

16 annually thereafter through calendar year 2049, the Ad17 ministrator shall allocate 1 percent of the quantity of re18 mainder emission allowances for the following calendar 

19 year among States. 

20 (b) DISTRIBUTION.—The emission allowances avail21 able for allocation to States under subsection (a) for a cal22 endar year shall be distributed among the States based 

23 on the formula established in section 104(b)(1)(A) of title 

24 23, United States Code. 


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1 (c) USE.—During any calendar year, a State receiv2 ing emission allowances under this section shall— 

3 (1) use the emission allowances (or proceeds of 

4 sale of those emission allowances) only for— 

5 (A) the operating costs of State and mu6 nicipal mass transit systems; 

7 (B) efforts to increase mass transit service 

8 and ridership in the State, including by adding 

9 new mass transit systems; and 

10 (C) efforts to increase the efficiency of 

11 mass transit systems through the development, 

12 purchase, or deployment of innovative tech13 nologies that reduce emissions of greenhouse 

14 gases; and 

15 (2) shall ensure that use of the emission allow16 ances (or proceeds of sale of those emission allow17 ances) by the State for the purposes described in 

18 paragraph (1) is geographically distributed as fol19 lows: 

20 (A) At least 60 percent in urban areas. 

21 (B) At least 20 percent in areas that are 

22 not urban areas. 

23 (C) 20 percent as the State determines to 

24 be appropriate. 


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1 (d) RETURN OF UNUSED EMISSION ALLOWANCES.— 

2 Any State receiving emission allowances under this section 

3 shall return to the Administrator any such emission allow4 ance that the State has failed to use in accordance with 

5 subsection (c) by not later than 5 years after the date of 

6 receipt of the emission allowance from the Administrator. 

7 (e) USE OF RETURNED EMISSION ALLOWANCES.— 

8 The Administrator shall immediately transfer to the Cor9 poration for auctioning under section 4302 any emission 

10 allowances returned to the Administrator under subsection 

11 (d). 

12 Subtitle D—Electricity Consumers 

13 SEC. 3401. ALLOCATION. 

14 Not later than April 1, 2011, and annually thereafter 

15 through calendar year 2049, the Administrator shall allo16 cate among load-serving entities 9 percent of the quantity 

17 of remainder emission allowances for the following cal18 endar year. 

19 SEC. 3402. DISTRIBUTION. 

20 (a) IN GENERAL.—For each calendar year, the emis21 sion allowances allocated under section 3401 shall be dis22 tributed by the Administrator to each load-serving entity, 

23 including each rural electric cooperative that serves as a 

24 load-serving entity in a State that is not a participant in 


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1 the pilot program established under section 3903(a), based 

2 on the proportion that— 

3 (1) the quantity of electricity delivered by the 

4 load-serving entity during the 3 calendar years pre5 ceding the calendar year for which the emission al6 lowances are distributed, adjusted upward for elec7 tricity not delivered as a result of consumer energy8 efficiency programs implemented by the load-serving 

9 entity and verified by the regulatory agency of the 

10 load-serving entity; bears to 

11 (2) the total quantity of electricity delivered by 

12 all load-serving entities during those 3 calendar 

13 years. 

14 (b) BASIS.—The Administrator shall base the deter15 mination of the quantity of electricity delivered by a load16 serving entity for the purpose of subsection (a) on the 

17 most recent data available in annual reports filed with the 

18 Energy Information Administration of the Department of 

19 Energy. 

20 SEC. 3403. USE. 

21 (a) IN GENERAL.—Any load-serving entity that ac22 cepts emission allowances distributed under section 3402 

23 shall— 


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1 (1) sell each emission allowance distributed to 

2 the load-serving entity by not later than 1 year after 

3 receiving the emission allowance; and 

4 (2) pursue fair market value for each emission 

5 allowance sold in accordance with paragraph (1). 

6 (b) PROCEEDS.—All proceeds from the sale of emis7 sion allowances under subsection (a) shall be used solely— 

8 (1) to mitigate economic impacts on low- and 

9 middle-income energy consumers, including by re10 ducing transmission charges or issuing rebates; and 

11 (2) to promote energy efficiency on the part of 

12 energy consumers. 

13 (c) PROHIBITION ON REBATES.—No load-serving en14 tity may use any proceeds from the sale of emission allow15 ances under subsection (a) to provide to any consumer a 

16 rebate that is based on the quantity of electricity used by 

17 the consumer. 

18 SEC. 3404. REPORTING. 

19 (a) IN GENERAL.—Each load-serving entity that ac20 cepts emission allowances distributed under section 3402 

21 shall, for each calendar year for which the load-serving 

22 entity accepts emission allowances, submit to the Adminis23 trator a report describing— 

24 (1) the date of each sale of each emission allow25 ance during the preceding year; 


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1 (2) the amount of revenue generated from the 

2 sale of emission allowances during the preceding 

3 year; and 

4 (3) how, and to what extent, the load-serving 

5 entity used the proceeds of the sale of the emission 

6 allowances during the preceding year. 

7 (b) AVAILABILITY OF REPORTS.—The Administrator 

8 shall make available to the public all reports submitted 

9 by any load-serving entity under subsection (b), including 

10 by publishing those reports on the Internet. 

11 Subtitle E—Natural Gas 

12 Consumers 

13 SEC. 3501. ALLOCATION. 

14 Not later than April 1, 2011, and annually thereafter 

15 through calendar year 2049, the Administrator shall allo16 cate among natural gas local distribution companies 2 per17 cent of the quantity of remainder emission allowances for 

18 the following calendar year. 

19 SEC. 3502. DISTRIBUTION. 

20 For each calendar year, the emission allowances allo21 cated under section 3501 shall be distributed by the Ad22 ministrator to each natural gas local distribution company 

23 based on the proportion that— 

24 (1) the quantity of natural gas delivered by the 

25 natural gas local distribution company during the 3 


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1 calendar years preceding the calendar year for which 

2 the emission allowances are distributed, adjusted up3 ward for natural gas not delivered as a result of con4 sumer energy-efficiency programs implemented by 

5 the natural gas local distribution company and 

6 verified by the regulatory agency of the natural gas 

7 local distribution company; bears to 

8 (2) the total quantity of natural gas delivered 

9 by all natural gas local distribution companies dur10 ing those 3 calendar years. 

11 SEC. 3503. USE. 

12 (a) IN GENERAL.—Any natural gas local distribution 

13 company that accepts emission allowances distributed 

14 under section 3502 shall— 

15 (1) sell each emission allowance distributed to 

16 the natural gas local distribution company by not 

17 later than 1 year after receiving the emission allow18 ance; and 

19 (2) pursue fair market value for each emission 

20 allowance sold in accordance with paragraph (1). 

21 (b) PROCEEDS.—All proceeds from the sale of emis22 sion allowances under subsection (a) shall be used solely— 

23 (1) to mitigate economic impacts on low- and 

24 middle-income energy consumers; and 


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1 (2) to promote energy efficiency on the part of 

2 energy consumers. 

3 (c) PROHIBITION ON REBATES.—No natural gas 

4 local distribution company may use any proceeds from the 

5 sale of emission allowances under subsection (a) to provide 

6 to any consumer a rebate that is based on the quantity 

7 of natural gas used by the consumer. 

8 SEC. 3504. REPORTING. 

9 (a) IN GENERAL.—Each natural gas local distribu10 tion company that accepts emission allowances distributed 

11 under section 3502 shall, for each calendar year for which 

12 the natural gas local distribution company accepts emis13 sion allowances, submit to the Administrator a report de14 scribing— 

15 (1) the date of each sale of each emission allow16 ance during the preceding year; 

17 (2) the amount of revenue generated from the 

18 sale of emission allowances during the preceding 

19 year; and 

20 (3) how, and to what extent, the natural gas 

21 local distribution company used the proceeds of the 

22 sale of the emission allowances during the preceding 

23 year. 

24 (b) AVAILABILITY OF REPORTS.—The Administrator 

25 shall make available to the public all reports submitted 


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1 by any natural gas local distribution company under sub2 section (a), including by publishing those reports on the 

3 Internet. 

4 Subtitle F—Bonus Allowances for 

5 Carbon Capture and Geological 

6 Sequestration 

7 SEC. 3601. ALLOCATION. 

8 Not later than 3 years after the date of enactment 

9 of this Act, the Administrator shall— 

10 (1) establish a Bonus Allowance Account; and 

11 (2) allocate 4 percent of the quantity of remain12 der emission allowances for calendar years 2012 

13 through 2030 to the Bonus Allowance Account. 

14 SEC. 3602. QUALIFYING PROJECTS. 

15 (a) DEFINITIONS.—In this section: 

16 (1) COMMENCED.—The term ‘‘commenced’’, 

17 with respect to construction, means that an owner or 

18 operator has obtained the necessary permits to un19 dertake a continuous program of construction and 

20 has entered into a binding contractual obligation, 

21 with substantial financial penalties for cancellation, 

22 to undertake such a program. 

23 (2) CONSTRUCTION.—The term ‘‘construction’’ 

24 means the fabrication, erection, or installation of the 


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1 technology for the carbon capture and sequestration 

2 project. 

3 (b) ELIGIBILITY.—To be eligible to receive emission 

4 allowances under this subtitle, a carbon capture and se5 questration project shall— 

6 (1) comply with such criteria and procedures as 

7 the Administrator may establish, including a re8 quirement, as prescribed in subsection (c), for an 

9 annual emissions performance standard for carbon 

10 dioxide emissions from any unit for which allowances 

11 are allocated; 

12 (2) sequester, in a geological formation per13 mitted by the Administrator for that purpose in ac14 cordance with regulations promulgated under part C 

15 of the Safe Drinking Water Act (42 U.S.C. 300h et 

16 seq.), carbon dioxide captured from any unit for 

17 which allowances are allocated; and 

18 (3) have begun operation during the period be19 ginning on January 1, 2008, and ending on Decem20 ber 31, 2035. 

21 (c) EMISSION PERFORMANCE STANDARDS.—Subject 

22 to subsection (d), a carbon capture and sequestration 

23 project shall be eligible to receive emission allowances 

24 under this subtitle only if the project achieves 1 of the 

25 following emissions performance standards for limiting 


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1 carbon dioxide emissions from the unit on an annual aver2 age basis: 

3 (1) For an electric generation unit that is not 

4 a new entrant, an annual emissions rate of not more 

5 than 1,200 pounds of carbon dioxide per megawatt6 hour of net electricity generation, after subtracting 

7 the carbon dioxide that is captured and sequestered. 

8 (2) For a new entrant electric generation unit 

9 for which construction of the unit commenced prior 

10 to July 1, 2018, an annual emissions rate of not 

11 more than 800 pounds of carbon dioxide per mega12 watt-hour of net electricity generation, after sub13 tracting the carbon dioxide that is captured and se14 questered. 

15 (3) For a new entrant electric generation unit 

16 for which construction of the unit commenced on or 

17 after July 1, 2018, an annual emissions rate of not 

18 more than 350 pounds of carbon dioxide per mega19 watt-hour of net electricity generation, after sub20 tracting the carbon dioxide that is captured and se21 questered. 

22 (4) For any unit at a covered facility that is not 

23 an electric generation unit, an annual emissions rate 

24 that is achieved by the capture and sequestration of 


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1 a minimum of 85 percent of the total carbon dioxide 

2 emissions produced by the unit. 

3 (d) ADJUSTMENT OF PERFORMANCE STANDARDS.— 

4 (1) IN GENERAL.—The Corporation may adjust 

5 the emissions performance standard for a carbon 

6 capture and sequestration project under subsection 

7 (c) for an electric generation unit that uses subbitu8 minous coal, lignite, or petroleum coke in significant 

9 amounts. 

10 (2) REQUIREMENT.—In any case described in 

11 paragraph (1), the performance standard for the 

12 project shall prescribe an annual emissions rate that 

13 requires the project to achieve an equivalent reduc14 tion from uncontrolled carbon dioxide emissions lev15 els from the use of subbituminous coal, lignite, or 

16 petroleum coke, as compared to the emissions that 

17 the project would have achieved if that unit had 

18 combusted only bituminous coal during the par19 ticular year. 

20 SEC. 3603. DISTRIBUTION. 

21 (a) IN GENERAL.—Subject to section 3604, for each 

22 of calendar years 2012 through 2039, the Administrator 

23 shall distribute emission allowances from the Bonus Allow24 ance Account to each qualifying project under this subtitle 


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1 in a quantity equal to the product obtained by multi2 plying— 

3 (1) the bonus allowance adjustment factor, as 

4 determined under subsection (b); 

5 (2) the number of metric tons of carbon dioxide 

6 emissions avoided through capture and geologic se7 questration of emissions by the project; and 

8 (3) the bonus allowance rate for that calendar 

9 year, as provided in the following table: 

Year Bonus Allowance Rate 

2012 4.5 

2013 4.5 

2014 4.5 

2015 4.5 

2016 4.5 

2017 4.5 

2018 4.2 

2019 3.9 

2020 3.6 

2021 3.3 

2022 3.0 

2023 2.7 

2024 2.4 

2025 2.1 

2026 1.8 

2027 1.5 

2028 1.3 

2029 1.1 

2030 0.9 

2031 0.7 

2032 0.5 

2033 0.5 

2034 0.5 

2035 0.5 

2036 0.5 

2037 0.5 

2038 0.5 

2039 0.5 

10 (b) BONUS ALLOWANCE ADJUSTMENT RATIO.—The 

11 Administrator shall determine the bonus allowance adjustVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00120 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 ment factor by dividing a carbon dioxide emissions rate 

2 of 350 pounds per megawatt-hour by the annual carbon 

3 dioxide emissions rate, on a pounds per megawatt-hour 

4 basis, that a qualifying project at the electric generation 

5 unit achieved during a particular year, except that— 

6 (1) the factor shall be equal to 1 in the case of 

7 a project that qualifies under section 3602(c)(1) 

8 during the first 4 years that emissions allowances 

9 are distributed to the project; and 

10 (2) the factor shall not exceed 1 for any quali11 fying project. 

12 SEC. 3604. 10-YEAR LIMIT. 

13 A qualifying project may receive annual emission al14 lowances under this subsection only for— 

15 (1) the first 10 years of operation; or 

16 (2) if the unit covered by the qualifying project 

17 began operating before January 1, 2012, the period 

18 of calendar years 2012 through 2021. 

19 SEC. 3605. EXHAUSTION OF BONUS ALLOWANCE ACCOUNT. 

20 If, at the beginning of a calendar year, the Adminis21 trator determines that the number of emission allowances 

22 remaining in the Bonus Allowance Account will be insuffi23 cient to allow the distribution, in that calendar year, of 

24 the number of allowances that otherwise would be distribVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00121 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 uted under section 3603 for the calendar year, the Admin2 istrator shall, for the calendar year— 

3 (1) distribute the remaining bonus allowances 

4 only to qualifying projects that were already quali5 fying projects during the preceding calendar year; 

6 (2) distribute the remaining bonus allowances 

7 to those qualifying projects on a pro rata basis; and 

8 (3) discontinue the program established under 

9 this subtitle as of the date on which the Bonus Al10 lowance Account is projected to be fully used based 

11 on projects already in operation. 

12 Subtitle G—Domestic Agriculture 

13 and Forestry 

14 SEC. 3701. ALLOCATION. 

15 Not later than April 1, 2011, and annually thereafter 

16 through calendar year 2049, the Administrator shall allo17 cate to the Secretary of Agriculture 5 percent of the quan18 tity of remainder emission allowances for the following cal19 endar year for use in— 

20 (1) achieving real, verifiable, additional, perma21 nent, and enforceable reductions in greenhouse gas 

22 emissions from the agriculture and forestry sectors 

23 of the United States economy; and 


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1 (2) achieving real, verifiable, additional, perma2 nent, and enforceable increases in greenhouse gas 

3 sequestration from those sectors. 

4 SEC. 3702. AGRICULTURAL AND FORESTRY GREENHOUSE 

5 GAS MANAGEMENT RESEARCH. 

6 (a) REPORT.—Not later than 1 year after the date 

7 of enactment of this Act, the Secretary of Agriculture, in 

8 consultation with scientific and agricultural and forestry 

9 experts, shall prepare and submit to Congress a report 

10 that describes the status of research on agricultural and 

11 forestry greenhouse gas management, including a descrip12 tion of— 

13 (1) research on soil carbon sequestration and 

14 other agricultural and forestry greenhouse gas man15 agement that has been carried out; 

16 (2) any additional research that is necessary; 

17 (3) the proposed priority for additional re18 search; 

19 (4) the most appropriate approaches for con20 ducting the additional research; and 

21 (5) the extent to which and the manner in 

22 which carbon credits that are specific to agricultural 

23 and forestry operations, including harvested wood 

24 products and the reduction of hazardous fuels to reVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00123 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 duce the risk of uncharacteristically severe wildfires, 

2 should be valued and allotted. 

3 (b) STANDARDIZED SYSTEM OF SOIL CARBON MEAS4 UREMENT AND CERTIFICATION FOR THE AGRICULTURAL

5 AND FORESTRY SECTORS.— 

6 (1) IN GENERAL.—As soon as practicable after 

7 the date of enactment of this Act, the Secretary of 

8 Agriculture shall establish a standardized system of 

9 carbon measurement and certification for the agri10 cultural and forestry sectors. 

11 (2) ADMINISTRATION.—In establishing the sys12 tem, the Secretary of Agriculture shall— 

13 (A) create a standardized system of meas14 urements for agricultural and forestry green15 house gases; and 

16 (B) delineate the most appropriate system 

17 of certification of credit by public or private en18 tities. 

19 (c) RESEARCH.—After the date of submission of the 

20 report described in paragraph (1), the President and the 

21 Secretary of Agriculture (in collaboration with the member 

22 institutions of higher education of the Consortium for Ag23 ricultural Soil Mitigation of Greenhouse Gases, institu24 tions of higher education, and research entities) shall iniVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00124 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 tiate a program to conduct any additional research that 

2 is necessary. 

3 SEC. 3703. DISTRIBUTION. 

4 (a) IN GENERAL.—Taking into account the report 

5 prepared under section 3702(a), the Secretary of Agri6 culture shall establish, by regulation, a program under 

7 which agricultural and forestry allowances may be distrib8 uted to entities that carry out projects on agricultural and 

9 forest land that achieve real, verifiable, additional, perma10 nent, and enforceable greenhouse gas emission mitigation 

11 benefits. 

12 (b) NITROUS OXIDE AND METHANE.—The Secretary 

13 of Agriculture shall ensure that, during any 5-year period, 

14 the average annual percentage of the quantity of remain15 der emission allowances that is distributed to entities 

16 under the program established under subsection (a) spe17 cifically for achieving real, verifiable, additional, perma18 nent, and enforceable reductions in nitrous oxide emis19 sions through soil management or achieving real, 

20 verifiable, additional, permanent, and enforceable reduc21 tions in methane emissions through enteric fermentation 

22 and manure management shall be 0.5 percent. 

23 (c) REQUIREMENT.—The Secretary of Agriculture 

24 shall distribute emission allowances under this section in 


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1 a manner that maximizes the avoidance or reduction of 

2 greenhouse gas emissions. 

3 Subtitle H—International Forest 

4 Protection 

5 SEC. 3801. FINDINGS. 

6 Congress finds that— 

7 (1) land-use change and forest sector emissions 

8 account for approximately 20 percent of global 

9 greenhouse gas emissions; 

10 (2) land conversion and deforestation are 2 of 

11 the largest sources of greenhouse gas emissions in 

12 the developing world, amounting to roughly 40 per13 cent of the total greenhouse gas emissions of the de14 veloping world; 

15 (3) with sufficient data, deforestation rates and 

16 forest carbon stocks can be measured with an ac17 ceptable level of uncertainty; and 

18 (4) encouraging reduced deforestation and 

19 other forest carbon activities in other countries 

20 can— 

21 (A) provide critical leverage to encourage 

22 voluntary developing country participation in 

23 emission limitation regimes; 


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1 (B) facilitate greater overall reductions in 

2 greenhouse gas emissions than would otherwise 

3 be practicable; and 

4 (C) substantially benefit biodiversity, con5 servation, and indigenous and other forest-de6 pendent people in developing countries. 

7 SEC. 3802. DEFINITION OF FOREST CARBON ACTIVITIES. 

8 In this subtitle, the term ‘‘forest carbon activities’’ 

9 means— 

10 (1) activities directed at reducing greenhouse 

11 gas emissions from deforestation and forest degrada12 tion in countries other than the United States; and 

13 (2) activities directed at increasing sequestra14 tion of carbon through restoration of forests, and de15 graded land in countries other than the United 

16 States that has not been forested prior to restora17 tion, afforestation, and improved forest manage18 ment, that meet the eligibility requirements promul19 gated under section 3804(a). 

20 SEC. 3803. ALLOCATION. 

21 Not later than April 1, 2011, and annually thereafter 

22 through calendar year 2049, the Administrator shall allo23 cate and distribute 2.5 percent of the quantity of remain24 der emission allowances for the following calendar year for 


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1 use in carrying out forest carbon activities in countries 

2 other than the United States. 

3 SEC. 3804. DEFINITION AND ELIGIBILITY REQUIREMENTS. 

4 (a) ELIGIBILITY REQUIREMENTS FOR FOREST CAR5 BON ACTIVITIES.—Not later than 2 years after the date 

6 of enactment of this Act, the Administrator, in consulta7 tion with the Secretary of the Interior, the Secretary of 

8 State, and the Secretary of Agriculture, shall promulgate 

9 eligibility requirements for forest carbon activities directed 

10 at reducing emissions from deforestation and forest deg11 radation, and at sequestration of carbon through restora12 tion of forests and degraded land, afforestation, and im13 proved forest management in countries other than the 

14 United States, including requirements that those activities 

15 be— 

16 (1) carried out and managed in accordance with 

17 widely-accepted environmentally sustainable forestry 

18 practices; and 

19 (2) designed— 

20 (A) to promote native species and restora21 tion of native forests, where practicable; and 

22 (B) to avoid the introduction of invasive 

23 nonnative species. 

24 (b) QUALITY CRITERIA FOR FOREST CARBON ALLO25 CATIONS.—Not later than 2 years after the date of enactVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00128 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 ment of this Act, the Administrator, in consultation with 

2 the Secretary of the Interior, the Secretary of State, and 

3 the Secretary of Agriculture, shall promulgate regulations 

4 establishing the requirements for eligibility to receive al5 lowances under this section, including requirements that 

6 ensure that the emission reductions or sequestrations are 

7 real, permanent, additional, verifiable and enforceable, 

8 with reliable measuring and monitoring and appropriate 

9 accounting for leakage. 

10 SEC. 3805. INTERNATIONAL FOREST CARBON ACTIVITIES. 

11 (a) IN GENERAL.—The Administrator, in consulta12 tion with the Secretary of State, shall identify and periodi13 cally update a list of countries that have— 

14 (1) demonstrated capacity to participate in 

15 international forest carbon activities, including— 

16 (A) sufficient historical data on changes in 

17 national forest carbon stocks; 

18 (B) technical capacity to monitor and 

19 measure forest carbon fluxes with an acceptable 

20 level of uncertainty; and 

21 (C) institutional capacity to reduce emis22 sions from deforestation and degradation; 

23 (2) capped greenhouse gas emissions or other24 wise established a national emission reference sce25 nario based on historical data; and 


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1 (3) commenced an emission reduction program 

2 for the forest sector. 

3 (b) ADDITIONALITY.— 

4 (1) REDUCTION IN DEFORESTATION AND FOR5 EST DEGRADATION.—A verified reduction in green6 house gas emissions from deforestation and forest 

7 degradation under a cap or from a nationwide emis8 sions reference scenario described in subsection (a) 

9 shall be— 

10 (A) eligible for distribution of emission al11 lowances under this section; and 

12 (B) considered to satisfy the additionality 

13 criterion. 

14 (2) PERIODIC REVIEW OF NATIONAL LEVEL RE15 DUCTIONS IN DEFORESTATION AND DEGRADA16 TION.—The Administrator, in consultation with the 

17 Secretary of State, shall identify and periodically up18 date a list of countries described in subsection (a) 

19 that have— 

20 (A) achieved national-level reductions of 

21 deforestation and degradation below a historical 

22 reference scenario, taking into consideration the 

23 average annual deforestation and degradation 

24 rates of the country and of all countries during 

25 a period of at least 5 years; and 


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1 (B) demonstrated those reductions using 

2 remote sensing technology that meets inter3 national standards. 

4 (3) OTHER FOREST CARBON ACTIVITIES.—A 

5 forest carbon activity, other than a reduction in de6 forestation or forest degradation, shall be eligible for 

7 distribution of emission allowances under this sec8 tion, subject to the quality criteria for forest carbon 

9 activities identified in this Act or in regulations pro10 mulgated under this Act. 

11 (c) RECOGNITION OF FOREST CARBON ACTIVI12 TIES.—With respect to countries other than countries de13 scribed in subsection (a), the Administrator— 

14 (1) shall recognize forest carbon activities, sub15 ject to the quality criteria for forest carbon activities 

16 identified in this Act and regulations promulgated 

17 under this Act; and 

18 (2) is encouraged to identify other incentives, 

19 including economic and market-based incentives, to 

20 encourage developing countries with largely-intact 

21 native forests to protect those forests. 

22 SEC. 3806. REVIEWS AND DISCOUNT. 

23 (a) REVIEWS.—Not later than 3 years after the date 

24 of enactment of this Act, and 5 years thereafter, the AdVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00131 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 ministrator shall conduct a review of the program under 

2 this subtitle. 

3 (b) DISCOUNT.—If, after the date that is 10 years 

4 after the date of enactment of this Act, the Administrator 

5 determines that foreign countries that, in the aggregate, 

6 generate greenhouse gas emissions accounting for more 

7 than 0.5 percent of global greenhouse gas emissions have 

8 not capped those emissions, established emissions ref9 erence scenarios based on historical data, or otherwise re10 duced total forest emissions, the Administrator may apply 

11 a discount to distributions of emission allowances to those 

12 countries under this section. 

13 Subtitle I—Transition Assistance 

14 SEC. 3901. GENERAL ALLOCATION AND DISTRIBUTION. 

15 (a) GENERAL ALLOCATION.—Not later than April 1, 

16 2011, and annually thereafter through January 1, 2029, 

17 the Administrator shall allocate percentages of the quan18 tity of remainder emission allowances for the following cal19 endar year as follows: 

Calendar Year 

Fossil 

fuel-fired 

electric 

power 

generating facilities 

Rural 

electric 

cooperatives 

Owners 

and operators of 

energy intensive 

manufacturing facilities 

Facilities 

that 

produce 

or import 

petroleumbased fuel 

HFC producers 

and importers 

2012 19 1 10 2 2 

2013 19 1 10 2 2 


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Calendar Year 

Fossil 

fuel-fired 

electric 

power 

generating facilities 

Rural 

electric 

cooperatives 

Owners 

and operators of 

energy intensive 

manufacturing facilities 

Facilities 

that 

produce 

or import 

petroleumbased fuel 

HFC producers 

and importers 

2014 19 1 10 2 2 

2015 19 1 10 2 2 

2016 19 1 10 2 2 

2017 19 1 10 2 2 

2018 18 1 9 2 2 

2019 17 1 9 2 2 

2020 16 1 8 2 2 

2021 14 1 7 2 2 

2022 13 1 7 1.75 1.75 

2023 12 1 6 1.75 1.75 

2024 11 1 5 1.5 1.25 

2025 10 1 4 1 1 

2026 8 1 3 1 1 

2027 6 1 2 0.5 0.5 

2028 4 1 1 0.5 0.5 

2029 2 1 0.5 0.25 0.25 

2030 1 1 0.25 0.25 0.25 

1 (b) GENERAL DISTRIBUTION.—Not later than 1 year 

2 after the date of enactment of this Act, the Administrator 

3 shall establish a system for distributing to entities identi4 fied under subsection (a) the emission allowances allocated 

5 under that subsection. 


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1 (c) FACILITIES THAT SHUT DOWN.—The system es2 tablished pursuant to subsection (b) shall ensure, notwith3 standing any other provision of this subtitle, that— 

4 (1) emission allowances are not distributed to 

5 an owner or operator for any facility that has been 

6 permanently shut down at the time of the distribu7 tion; 

8 (2) the owner or operator of any facility that 

9 permanently shuts down in a calendar year shall 

10 promptly return to the Administrator any emission 

11 allowances that the Administrator has distributed 

12 for that facility for any subsequent calendar years; 

13 and 

14 (3) that, if a facility receives a distribution of 

15 emission allowances under this subtitle for a cal16 endar year and subsequently permanently shuts 

17 down during that calendar year, the owner or oper18 ator of the facility shall promptly return to the Ad19 ministrator a number of emission allowances equal 

20 to the number that the Administrator determines is 

21 the portion that the owner or operator will no longer 

22 need to submit for that facility under section 

23 1202(a). 


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1 SEC. 3902. DISTRIBUTING EMISSION ALLOWANCES TO OWN2 ERS AND OPERATORS OF FOSSIL FUEL-FIRED 

3 ELECTRIC POWER GENERATING FACILITIES. 

4 (a) NEW ENTRANTS.— 

5 (1) IN GENERAL.—As part of the system estab6 lished under section 3901(b), the Administrator 

7 shall, for each calendar year, set aside, from the 

8 quantity of emission allowances represented by the 

9 percentages described in the table contained in sec10 tion 3901(a) for owners and operators of fossil fuel11 fired electric power generating facilities, a quantity 

12 of emission allowances for distribution to owners and 

13 operators of new entrant fossil fuel-fired electric 

14 power generating facilities (including such new en15 trant facilities owned or operated by rural electric 

16 cooperatives in any State that is not a participant 

17 in the pilot program established under section 

18 3903(a)). 

19 (2) CALCULATION OF ALLOWANCES.—The 

20 quantity of emission allowances distributed by the 

21 Administrator for a calendar year to a new entrant 

22 fossil fuel-fired electric power generating facility 

23 under paragraph (1) shall be equal to the product 

24 obtained by multiplying— 

25 (A) the average greenhouse gas emission 

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1 ating facilities that commenced operations dur2 ing the 5 years preceding the date of enactment 

3 of this Act; and 

4 (B) the electricity generated by the facility 

5 during the calendar year, adjusted downward 

6 on a pro rata basis for each new facility in the 

7 event that insufficient allowances are available 

8 under section 3901(a) for a calendar year. 

9 (b) INCUMBENTS.— 

10 (1) IN GENERAL.—As part of the system estab11 lished under section 3901(b), the Administrator 

12 shall, for each calendar year, distribute to fossil fuel13 fired electric power generating facilities (including 

14 such facilities owned or operated by rural electric co15 operatives in any State that is not a participant in 

16 the pilot program established under section 3903(a)) 

17 that were operating during the calendar year pre18 ceding the year in which this Act was enacted the 

19 emission allowances represented by the percentages 

20 described in the table contained in section 3901(a) 

21 for owners and operators of fossil fuel-fired electric 

22 power generating facilities that remain after the dis23 tribution of emission allowances under subsection 

24 (a). 


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1 (2) CALCULATION OF ALLOWANCES.—The 

2 quantity of emission allowances distributed to a fos3 sil fuel-fired electric power generating facility under 

4 paragraph (1) shall be equal to the product obtained 

5 by multiplying— 

6 (A) the quantity of emission allowances 

7 available for distribution under paragraph (1); 

8 and 

9 (B) the quotient obtained by dividing— 

10 (i) the annual average quantity of car11 bon dioxide equivalents emitted by the fa12 cility during the 3 calendar years pre13 ceding the date of enactment of this Act; 

14 by 

15 (ii) the annual average of the aggre16 gate quantity of carbon dioxide equivalents 

17 emitted by all fossil fuel-fired electric 

18 power generating facilities during those 3 

19 calendar years. 

20 SEC. 3903. DISTRIBUTING ADDITIONAL EMISSION ALLOW21 ANCES TO RURAL ELECTRIC COOPERATIVES. 

22 (a) ESTABLISHMENT OF PILOT PROGRAM.— 

23 (1) IN GENERAL.—As part of the system estab24 lished under section 3901(b), the Administrator 

25 shall establish a pilot program for distributing to 


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1 rural electric cooperatives in the States described in 

2 paragraph (2), for each of calendar years 2012 

3 through 2029, 15 percent of the total number of 

4 emission allowances allocated for the calendar year 

5 to rural electric cooperatives under section 3901(a). 

6 (2) DESCRIPTION OF STATES.—The States re7 ferred to in subsection (a) are— 

8 (A) 1 State east of the Mississippi River in 

9 which 13 rural electric cooperatives sold to con10 sumers in that State electricity in a quantity of 

11 9,000,000 to 10,000,000 MWh, according to 

12 Energy Information Administration data for 

13 calendar year 2005; and 

14 (B) 1 State west of the Mississippi River 

15 in which 30 rural electric cooperatives sold to 

16 consumers in that State electricity in a quantity 

17 of 3,000,000 to 4,000,000 MWh, according to 

18 Energy Information Administration data for 

19 calendar year 2005. 

20 (b) DISTRIBUTION TO OTHER STATES.—As part of 

21 the system established under section 3901(b), the Admin22 istrator shall establish a system for distributing to rural 

23 electric cooperatives in all States other than the 2 States 

24 described in subsection (a)(2), for each of calendar years 

25 2012 through 2029, 85 percent of the total number of 


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1 emission allowances allocated for the calendar year to 

2 rural electric cooperatives under section 3901(a), in pro3 portion to the sales of each rural electric cooperative, as 

4 reported by the Energy Information Administration. 

5 (c) LIMITATION.—No rural electric cooperative that 

6 receives emission allowances under subsection (a) shall re7 ceive any emission allowance under subsection (b), section 

8 3902, or section 3402. 

9 (d) REPORT.—Not later than January 1, 2015, and 

10 every 3 years thereafter, the Administrator shall submit 

11 to Congress a report describing the success of the pilot 

12 program established under subsection (a), including a de13 scription of— 

14 (1) the benefits realized by ratepayers of the 

15 rural electric cooperatives that receive allowances 

16 under the pilot program; and 

17 (2) the use by those rural electric cooperatives 

18 of advanced, low greenhouse gas-emitting electric 

19 generation technologies, if any. 

20 SEC. 3904. DISTRIBUTING EMISSION ALLOWANCES TO OWN21 ERS AND OPERATORS OF ENERGY INTENSIVE 

22 MANUFACTURING FACILITIES. 

23 (a) DEFINITIONS.—In this section: 

24 (1) CURRENTLY OPERATING FACILITY.—The 

25 term ‘‘currently operating facility’’ means an eligible 


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1 manufacturing facility that had significant oper2 ations during the calendar year preceding the cal3 endar year for which emission allowances are being 

4 distributed under this section. 

5 (2) ELIGIBLE MANUFACTURING FACILITY.— 

6 (A) IN GENERAL.—The term ‘‘eligible 

7 manufacturing facility’’ means a manufacturing 

8 facility located in the United States that prin9 cipally manufactures iron, steel, aluminum, 

10 pulp, paper, cement, chemicals, or such other 

11 products as the Administrator may determine, 

12 by rule, are likely to be significantly disadvan13 taged in competitive international markets as a 

14 result of indirect costs of the program estab15 lished under this Act. 

16 (B) EXCLUSION.—The term ‘‘eligible man17 ufacturing facility’’ does not include a facility 

18 eligible to receive emission allowances under 

19 section 3902, 3903, or 3905. 

20 (3) INDIRECT CARBON DIOXIDE EMISSIONS.— 

21 The term ‘‘indirect carbon dioxide emissions’’ means 

22 the product obtained by multiplying (as determined 

23 by the Administrator)— 

24 (A) the quantity of electricity consumption 

25 at an eligible manufacturing facility; and 


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1 (B) the rate of carbon dioxide emission per 

2 kilowatt-hour output for the region in which the 

3 manufacturer is located. 

4 (4) NEW ENTRANT MANUFACTURING FACIL5 ITY.—The term ‘‘new entrant manufacturing facil6 ity’’, with respect to a calendar year, means an eligi7 ble manufacturing facility that began operation dur8 ing or after the calendar year for which emission al9 lowances are being distributed under this section. 

10 (b) TOTAL ALLOCATION FOR CURRENTLY OPER11 ATING FACILITIES.—As part of the system established 

12 under section 3901(b), the Administrator shall, for each 

13 calendar year, distribute 96 percent of the total quantity 

14 of emission allowances available for allocation to carbon15 intensive manufacturing under section 3901(a) to cur16 rently operating facilities. 

17 (c) TOTAL ALLOCATION FOR CURRENTLY OPER18 ATING FACILITIES IN EACH CATEGORY OF MANUFAC19 TURING FACILITIES.—The quantity of emission allow20 ances distributed by the Administrator for a calendar year 

21 to facilities in each category of currently operating facili22 ties shall be equal to the product obtained by multi23 plying— 

24 (1) the total quantity of emission allowances 

25 available for allocation under subsection (b); and 


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1 (2) the ratio that (during the calendar year pre2 ceding the calendar year for which emission allow3 ances are being distributed under this section)— 

4 (A) the sum of the direct and indirect car5 bon dioxide emissions by currently operating fa6 cilities in the category; bears to 

7 (B) the sum of the direct and indirect car8 bon dioxide emissions by all currently operating 

9 facilities. 

10 (d) INDIVIDUAL ALLOCATIONS TO CURRENTLY OP11 ERATING FACILITIES.—The quantity of emission allow12 ances distributed by the Administrator for a calendar year 

13 to a currently operating facility shall be a quantity equal 

14 to the product obtained by multiplying— 

15 (1) the total quantity of emission allowances 

16 available for allocation to currently-operating facili17 ties in the appropriate category, as determined 

18 under subsection (c); and 

19 (2) the ratio that (during the 3 calendar years 

20 preceding the year for which the allocation rule is 

21 promulgated for the allocation period)— 

22 (A) the average number of production em23 ployees employed at the facility; bears to 


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1 (B) the average number of production em2 ployees employed at all existing eligible manu3 facturing facilities in the appropriate category. 

4 (e) NEW ENTRANT MANUFACTURING FACILITIES.— 

5 (1) IN GENERAL.—As part of the system estab6 lished under section 3901(b), the Administrator 

7 shall, for each calendar year, distribute 4 percent of 

8 the total quantity of emission allowances available 

9 for allocation to carbon intensive manufacturing 

10 under section 3901(a) to new entrant manufacturing 

11 facilities. 

12 (2) INDIVIDUAL ALLOCATIONS.—The quantity 

13 of emission allowances distributed by the Adminis14 trator for a calendar year to a new entrant manufac15 turing facility shall be proportional to the product 

16 obtained by multiplying— 

17 (A) the average number of production em18 ployees employed at the new entrant manufac19 turing facility during the prior calendar year; 

20 and 

21 (B) the rate (in emission allowances per 

22 production employee) at which emission allow23 ances were allocated to currently operating fa24 cilities in the appropriate category for the cal25 endar year, as determined under subsection (d). 


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1 SEC. 3905. DISTRIBUTING EMISSION ALLOWANCES TO OWN2 ERS AND OPERATORS OF FACILITIES AND 

3 OTHER ENTITIES THAT PRODUCE OR IMPORT 

4 PETROLEUM-BASED FUEL. 

5 (a) IN GENERAL.—As part of the system established 

6 under section 3901(b), the Administrator shall, for each 

7 calendar year, distribute to facilities or entities that 

8 produce or import petroleum-based fuel the emission al9 lowances represented by the percentages described in the 

10 table contained in section 3901(a) for owners and opera11 tors of facilities or entities that produce or import petro12 leum-based fuel. 

13 (b) CALCULATION OF ALLOWANCES.—The quantity 

14 of emission allowances distributed to a facility or entity 

15 under subsection (a) shall be equal to the product obtained 

16 by multiplying— 

17 (1) the quantity of emission allowances avail18 able for distribution under subsection (a); and 

19 (2) the quotient obtained by dividing— 

20 (A) the annual average of the aggregate 

21 quantity of the petroleum-based products pro22 duced or imported by that facility or entity dur23 ing the 3 calendar years preceding the distribu24 tion of allowances; by 

25 (B) the annual average of the aggregate 

26 quantity of petroleum-based products produced 


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1 or imported by covered facilities and entities 

2 that produced or imported petroleum-based fuel 

3 during those preceding 3 calendar years. 

4 SEC. 3906. DISTRIBUTING EMISSION ALLOWANCES TO 

5 HYDROFLUOROCARBON PRODUCERS AND IM6 PORTERS. 

7 (a) IN GENERAL.—The emission allowances allocated 

8 to hydrofluorocarbon producers and hydrofluorocarbon im9 porters under section 3901(a) shall be distributed to the 

10 individual hydrofluorocarbon producers and 

11 hydrofluorocarbon importers in accordance with section 

12 10005. 

13 (b) EFFECT.—The distributions under subsection (a) 

14 shall not, in any way, limit or otherwise alter the prohibi15 tions set forth in subsection 10007(b). 

16 Subtitle J—Reducing Methane 

17 Emissions From Landfills and 

18 Coal Mines 

19 SEC. 3907. ALLOCATION. 

20 Not later than April 1, 2011, and annually thereafter 

21 through 2049, the Administrator shall allocate 1 percent 

22 of the quantity of remainder emission allowances for the 

23 following calendar year to a program for achieving real, 

24 verifiable, additional, permanent, and enforceable reducVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00145 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 tions in emissions of methane from landfills and coal 

2 mines. 

3 SEC. 3908. DISTRIBUTION. 

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

5 date of enactment of this Act, the Administrator shall es6 tablish a program that includes a system for distributing 

7 to individual entities the emission allowances allocated 

8 under section 3907. 

9 (b) REQUIREMENT.—The Administrator shall dis10 tribute emission allowances under subsection (a) in a man11 ner that maximizes the avoidance or reduction of green12 house gas emissions. 

13 TITLE IV—AUCTIONS AND USES 

14 OF AUCTION PROCEEDS 

15 Subtitle A—Funds 

16 SEC. 4101. ESTABLISHMENT. 

17 There are established in the Treasury of the United 

18 States the following funds: 

19 (1) The Energy Assistance Fund. 

20 (2) The Climate Change Worker Training 

21 Fund. 

22 (3) The Adaptation Fund. 

23 (4) The Climate Change and National Security 

24 Fund. 


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1 (5) The Bureau of Land Management Emer2 gency Firefighting Fund. 

3 (6) The Forest Service Emergency Firefighting 

4 Fund. 

5 (7) The Climate Security Act Management 

6 Fund. 

7 SEC. 4102. AMOUNTS IN FUNDS. 

8 Each Fund established by section 4101 shall consist 

9 of such amounts as are deposited into the respective Fund 

10 under subtitle C. 

11 Subtitle B—Climate Change Credit 

12 Corporation 

13 SEC. 4201. ESTABLISHMENT. 

14 (a) IN GENERAL.—There is established, as a non15 profit corporation without stock, a corporation to be 

16 known as the ‘‘Climate Change Credit Corporation’’. 

17 (b) TREATMENT.—The Corporation shall not be con18 sidered to be an agency or establishment of the Federal 

19 Government. 

20 SEC. 4202. APPLICABLE LAWS. 

21 The Corporation shall be subject to this title and, to 

22 the extent consistent with this title, the District of Colum23 bia Business Corporation Act (D.C. Code section 29–301 

24 et seq.). 


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1 SEC. 4203. BOARD OF DIRECTORS. 

2 (a) IN GENERAL.—The Corporation shall have a 

3 board of directors composed of 5 individuals who are citi4 zens of the United States, of whom 1 shall be elected an5 nually by the board to serve as Chairperson. 

6 (b) POLITICAL AFFILIATION.—Not more than 3 

7 members of the board serving at any time may be affili8 ated with the same political party. 

9 (c) APPOINTMENT AND TERM.—A member of the 

10 board shall be appointed by the President, by and with 

11 the advice and consent of the Senate, for a term of 5 

12 years. 

13 (d) QUORUM.—Three members of the board shall 

14 constitute a quorum for a meeting of the board of direc15 tors. 

16 (e) PROHIBITIONS.— 

17 (1) CONFLICTS OF INTEREST.—An individual 

18 employed by, or holding any official relationship (in19 cluding any shareholder) with, any entity engaged in 

20 the generation, transmission, distribution, or sale of 

21 energy, an individual who has any pecuniary interest 

22 in the generation, transmission, distribution, or sale 

23 of energy, or an individual who has a pecuniary in24 terest in the implementation of this Act, shall not be 

25 appointed to the Corporation under this subtitle. 


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1 (2) NO OTHER EMPLOYMENT.—A member of 

2 the Corporation shall not hold any other employment 

3 during the term of service of the member. 

4 (f) VACANCIES.— 

5 (1) IN GENERAL.—A vacancy on the Corpora6 tion— 

7 (A) shall not affect the powers of the Cor8 poration; and 

9 (B) shall be filled in the same manner as 

10 the original appointment was made. 

11 (2) SERVICE UNTIL NEW APPOINTMENT.—A 

12 member of the Corporation the term of whom has 

13 expired or otherwise been terminated shall continue 

14 to serve until the date on which a replacement is ap15 pointed if the President determines that service to 

16 be appropriate. 

17 (g) REMOVAL.— 

18 (1) IN GENERAL.—A member may be removed 

19 from the Corporation on determination of the Presi20 dent for cause. 

21 (2) NOTIFICATION.—Not later than 30 days be22 fore removing a member from the Corporation for 

23 cause under paragraph (1), the President shall pro24 vide to Congress an advance notification of the de25 termination by the President to remove the member. 


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1 SEC. 4204. REVIEW AND AUDIT BY COMPTROLLER GEN2 ERAL. 

3 Not later than January 1, 2013, and annually there4 after, the Comptroller General of the United States shall 

5 conduct a review and audit of each expenditure made pur6 suant to this title to determine the efficacy of the pro7 grams, expenditures, and projects funded under this title. 

8 Subtitle C—Auctions 

9 SEC. 4301. EARLY AUCTIONS. 

10 (a) INITIATION OF AUCTIONING.—Not later than 1 

11 year after the date of enactment of this Act, the Corpora12 tion shall begin auctioning the emission allowances allo13 cated to the Corporation under section 3102. 

14 (b) COMPLETION OF AUCTIONING.—Not later than 

15 December 31, 2010, the Corporation shall complete auc16 tioning of all allowances allocated to the Corporation 

17 under section 3102. 

18 (c) PROCEEDS FROM EARLY AUCTIONING.—The 

19 Corporation shall use to carry out programs established 

20 under subtitle D all proceeds of early auctioning conducted 

21 by the Corporation under this section. 

22 SEC. 4302. ANNUAL AUCTIONS. 

23 (a) IN GENERAL.—Not later than 330 days before 

24 the beginning of a calendar year identified in the table 

25 contained in section 3103, the Corporation shall auction 


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1 all of the allowances allocated to the Corporation for that 

2 year by the Administrator under section 3103. 

3 (b) PROCEEDS FROM ANNUAL AUCTIONING.— 

4 (1) BUREAU OF LAND MANAGEMENT EMER5 GENCY FIREFIGHTING FUND.—For each of calendar 

6 years 2012 through 2050, the Corporation shall de7 posit into the Bureau of Land Management Emer8 gency Firefighting Fund established by section 

9 4101(5) proceeds, from annual auctions that the 

10 Corporation conducts for the calendar year under 

11 this section, that are sufficient to ensure that the 

12 amount in the Fund equals $300,000,000. 

13 (2) FOREST SERVICE EMERGENCY FIRE14 FIGHTING FUND.—For each of calendar years 2012 

15 through 2050, the Corporation shall deposit into the 

16 Forest Service Emergency Firefighting Fund estab17 lished by section 4101(6) proceeds, from annual auc18 tions that the Corporation conducts for the calendar 

19 year under this section, that are sufficient to ensure 

20 that the amount in the Fund equals $800,000,000. 

21 (3) CLIMATE SECURITY ACT MANAGEMENT

22 FUND.— 

23 (A) IN GENERAL.—For each of calendar 

24 years 2012 through 2050, the Corporation shall 

25 deposit into the Climate Security Act ManageVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00151 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 ment Fund established by section 4101(7) such 

2 percentage of the proceeds of the annual auc3 tions conducted by the Corporation for the cal4 endar year under this section as the Adminis5 trator determines to be sufficient to efficiently 

6 and effectively administer this Act. 

7 (B) DISTRIBUTION.—The Administrator 

8 may distribute funds from the Climate Security 

9 Act Management Fund to the Secretary of Ag10 riculture, the Secretary of Labor, and the Car11 bon Market Efficiency Board, as the Adminis12 trator determines to be necessary to assist in 

13 carrying out this Act. 

14 (C) USE OF FUNDS.—The head of a Fed15 eral agency or department may use funds from 

16 the Climate Security Act Management Fund for 

17 the costs to the agency or department of car18 rying out this Act, including the costs of— 

19 (i) promulgation of regulations; 

20 (ii) development of policy guidance; 

21 (iii) development and operation of in22 formation systems; 

23 (iv) certification of monitoring equip24 ment; 


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1 (v) conducting facilities audits and in2 spections; 

3 (vi) monitoring and modeling; 

4 (vii) quality assurance and verification 

5 functions; 

6 (viii) enforcement; 

7 (ix) administration; 

8 (x) outreach; 

9 (xi) training; 

10 (xii) field audits; and 

11 (xiii) financial management. 

12 (D) TREATMENT.—Amounts in the Cli13 mate Security Act Management Fund— 

14 (i) shall be used only to advance the 

15 purposes described in section 3; 

16 (ii) are subject to the availability of 

17 appropriations; and 

18 (iii) shall remain available until ex19 pended. 

20 (4) USE OF REMAINING PROCEEDS.— 

21 (A) IN GENERAL.—For each of calendar 

22 years 2012 through 2050, the Corporation shall 

23 use the proceeds of the annual auctions con24 ducted by the Corporation for the calendar year 


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1 under this section in accordance with this para2 graph. 

3 (B) ENERGY TECHNOLOGY DEPLOY4 MENT.—For each of calendar years 2012 

5 through 2050, the Corporation shall use to 

6 carry out the programs established under sub7 title D 52 percent of the proceeds of the annual 

8 auctions conducted by the Corporation for the 

9 calendar year under this section. 

10 (C) ENERGY INDEPENDENCE ACCELERA11 TION FUND.—In any of calendar years 2012 

12 through 2050 during which there exists in the 

13 Treasury of the United States an energy trans14 formation acceleration fund administered by the 

15 Director of the Advanced Research Projects 

16 Agency within the Department of Energy, of 

17 the proceeds of the annual auctions conducted 

18 by the Corporation for the calendar year under 

19 this section, the Corporation shall deposit 2 

20 percent of the proceeds into that fund. 

21 (D) ENERGY CONSUMERS.—For each of 

22 calendar years 2012 through 2050, the Cor23 poration shall deposit into the Energy Assist24 ance Fund established by section 4101(1) 18 

25 percent of the proceeds of the annual auctions 


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1 conducted by the Corporation for the calendar 

2 year under this section. 

3 (E) CLIMATE CHANGE WORKER TRAINING

4 PROGRAM.—For each of calendar years 2012 

5 through 2050, the Corporation shall deposit 

6 into the Climate Change Worker Training Fund 

7 established by section 4101(2) 5 percent of the 

8 proceeds of the annual auctions conducted by 

9 the Corporation for the calendar year under 

10 this section. 

11 (F) ADAPTATION PROGRAM FOR NATURAL

12 RESOURCES IN UNITED STATES AND TERRI13 TORIES.—For each of calendar years 2012 

14 through 2050, the Corporation shall deposit 

15 into the Adaptation Fund established by section 

16 4101(3) 18 percent of the proceeds of the an17 nual auctions conducted by the Corporation for 

18 the calendar year under this section. 

19 (G) CLIMATE CHANGE AND NATIONAL SE20 CURITY PROGRAM.—For each of calendar years 

21 2012 through 2050, the Corporation shall de22 posit into the Climate Change and National Se23 curity Fund established by section 4101(4) 5 

24 percent of the proceeds of the annual auctions 


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1 conducted by the Corporation for the calendar 

2 year under this section. 

3 Subtitle D—Energy Technology 

4 Deployment 

5 SEC. 4401. GENERAL ALLOCATIONS. 

6 For each calendar year, the Corporation shall use the 

7 amounts described in sections 4301(c) and 4302(b)(4)(B) 

8 to carry out the programs established under this subtitle, 

9 as follows: 

10 (1) 32 percent of the funds shall be used to 

11 carry out the zero- or low-carbon energy technologies 

12 program under section 4402. 

13 (2) 25 percent shall be used to carry out the 

14 advanced coal and sequestration technologies pro15 gram under section 4403. 

16 (3) 6 percent shall be used to carry out the fuel 

17 from cellulosic biomass program under section 4404. 

18 (4) 12 percent shall be used to carry out the 

19 advanced technology vehicles manufacturing incen20 tive program under section 4405. 

21 (5) 25 percent shall be used to carry out the 

22 sustainable energy program under section 4406. 

23 SEC. 4402. ZERO- OR LOW-CARBON ENERGY TECHNOLOGIES 

24 DEPLOYMENT. 

25 (a) DEFINITIONS.—In this section: 


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1 (1) ENERGY SAVINGS.—The term ‘‘energy sav2 ings’’ means megawatt-hours of electricity or million 

3 British thermal units of natural gas saved by a 

4 product, in comparison to projected energy consump5 tion under an energy-efficiency standard applicable 

6 to the product. 

7 (2) ENGINEERING INTEGRATION COSTS.—The 

8 term ‘‘engineering integration costs’’ includes the 

9 costs of engineering tasks relating to— 

10 (A) redesigning manufacturing processes 

11 to begin producing qualifying components and 

12 zero- or low-carbon generation technologies; 

13 (B) designing new tooling and equipment 

14 for production facilities that produce qualifying 

15 components and zero- or low-carbon generation 

16 technologies; and 

17 (C) establishing or expanding manufac18 turing operations for qualifying components and 

19 zero- or low-carbon generation technologies. 

20 (3) HIGH-EFFICIENCY CONSUMER PRODUCT.— 

21 The term ‘‘high-efficiency consumer product’’ means 

22 a covered product to which an energy conservation 

23 standard applies under section 325 of the Energy 

24 Policy and Conservation Act (42 U.S.C. 6295), if 


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1 the energy efficiency of the product exceeds the en2 ergy efficiency required under the standard. 

3 (4) QUALIFYING COMPONENT.—The term 

4 ‘‘qualifying component’’ means a component that the 

5 Secretary of Energy determines to be specially de6 signed for zero- or low-carbon generation technology. 

7 (5) ZERO- OR LOW-CARBON GENERATION.—The 

8 term ‘‘zero- or low-carbon generation’’ means gen9 eration of electricity by an electric generation unit 

10 that— 

11 (A) emits no carbon dioxide into the at12 mosphere, or is fossil-fuel fired and emits into 

13 the atmosphere not more than 250 pounds of 

14 carbon dioxide per megawatt-hour (after adjust15 ment for any carbon dioxide from the unit that 

16 is geologically sequestered); and 

17 (B) was placed into commercial service 

18 after the date of enactment of this Act. 

19 (6) ZERO- OR LOW-CARBON GENERATION TECH20 NOLOGY.—The term ‘‘zero- or low-carbon generation 

21 technology’’ means a technology used to create zero22 or low-carbon generation. 

23 (b) FINANCIAL INCENTIVES PROGRAM.—During each 

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1 poration shall competitively award financial incentives 

2 under this subsection in the technology categories of— 

3 (1) the production of electricity from new zero4 or low-carbon generation; 

5 (2) the manufacture of high-efficiency consumer 

6 products; and 

7 (3) facility establishment or conversion by man8 ufacturers and component suppliers of zero- or low9 carbon technology. 

10 (c) REQUIREMENTS.— 

11 (1) IN GENERAL.—The Corporation shall make 

12 awards under this section to domestic producers of 

13 new zero- or low-carbon generation, domestic manu14 facturers of high-efficiency consumer products, and 

15 domestic facilities and operations of manufacturers 

16 and component suppliers of zero- or low-carbon gen17 eration technology— 

18 (A) in the case of producers of new zero19 or low-carbon generation, based on the bid of 

20 each producer in terms of dollars per megawatt21 hour of electricity generated; 

22 (B) in the case of manufacturers of quali23 fying high-efficiency consumer products, based 

24 on the bid of each manufacturer in terms of 


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1 dollars per megawatt-hour or million British 

2 thermal units saved; and 

3 (C) in the case of qualifying manufacturers 

4 of zero- or low-carbon generation technology, 

5 based on the criteria noted in subsection (e). 

6 (2) ACCEPTANCE OF BIDS.— 

7 (A) IN GENERAL.—In making awards 

8 under subparagraphs (A) and (B) of paragraph 

9 (1), the Corporation shall— 

10 (i) solicit bids for reverse auction from 

11 appropriate producers and manufacturers, 

12 as determined by the Corporation; and 

13 (ii) award financial incentives to the 

14 producers and manufacturers that submit 

15 the lowest bids that meet the requirements 

16 established by the Corporation. 

17 (B) FACTORS FOR CONVERSION.— 

18 (i) IN GENERAL.—For the purpose of 

19 assessing bids under subparagraph (A), the 

20 Corporation shall specify a factor for con21 verting megawatt-hours of electricity and 

22 million British thermal units of natural 

23 gas to common units. 

24 (ii) REQUIREMENT.—The conversion 

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1 house gas emission benefits of electricity 

2 and natural gas conservation. 

3 (d) FORMS OF AWARDS.— 

4 (1) ZERO- AND LOW-CARBON GENERATORS.— 

5 An award for zero- or low-carbon generation under 

6 this subsection shall be in the form of a contract to 

7 provide a production payment for each year during 

8 the first 10 years of commercial service of the gen9 eration unit in an amount equal to the product ob10 tained by multiplying— 

11 (A) the amount bid by the producer of the 

12 zero- or low-carbon generation; and 

13 (B) the megawatt-hours estimated to be 

14 generated by the zero- or low-carbon generation 

15 unit each year. 

16 (2) HIGH-EFFICIENCY CONSUMER PRODUCTS.— 

17 An award for a high-efficiency consumer product 

18 under this subsection shall be in the form of a lump 

19 sum payment in an amount equal to the product ob20 tained by multiplying— 

21 (A) the amount bid by the manufacturer of 

22 the high-efficiency consumer product; and 

23 (B) the energy savings during the pro24 jected useful life of the high-efficiency consumer 


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1 product, not to exceed 10 years, as determined 

2 by the Corporation. 

3 (3) MANUFACTURING OF ZERO- OR LOW-CAR4 BON GENERATION TECHNOLOGY.— 

5 (A) IN GENERAL.—An award for facility 

6 establishment or conversion costs for zero- or 

7 low-carbon generation technology shall be in an 

8 amount equal to not more than 30 percent of 

9 the cost of— 

10 (i) establishing, reequipping, or ex11 panding a manufacturing facility to 

12 produce— 

13 (I) qualifying zero- or low-carbon 

14 generation technology; or 

15 (II) qualifying components; 

16 (ii) engineering integration costs of 

17 zero- or low-carbon generation technology 

18 and qualifying components; and 

19 (iii) property, machine tools, and 

20 other equipment acquired or constructed 

21 primarily to enable the recipient to test 

22 equipment necessary for the construction 

23 or operation of a zero- or low-carbon gen24 eration facility. 


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1 (B) MINIMUM AMOUNT.—The Corporation 

shall use not less than 1 2 ⁄4 of the amounts made 

3 available to carry out this section to make 

4 awards to entities for the manufacturing of 

5 zero- or low-carbon generation technology. 

6 (e) SELECTION CRITERIA.—In making awards under 

7 this section to qualifying manufacturers of zero- or low8 carbon generation technology and qualifying components, 

9 the Corporation shall select manufacturers that— 

10 (1) document the greatest use of domestically 

11 sourced parts and components; 

12 (2) return to productive service existing idle 

13 manufacturing capacity; 

14 (3) are located in States with the greatest avail15 ability of unemployed manufacturing workers; 

16 (4) compensate workers at a minimum amount 

17 equal to at least 100 percent of the State average 

18 manufacturing wage, plus health insurance benefits; 

19 (5) demonstrate a high probability of commer20 cial success; and 

21 (6) achieve other criteria, as the Corporation 

22 determines to be appropriate. 

23 SEC. 4403. ADVANCED COAL AND SEQUESTRATION TECH24 NOLOGIES PROGRAM. 

25 (a) ADVANCED COAL TECHNOLOGIES.— 


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1 (1) DEFINITIONS.—In this section: 

2 (A) ADVANCED COAL GENERATION TECH3 NOLOGY.—Except as provided in paragraph (2), 

4 the term ‘‘advanced coal generation technology’’ 

5 means an advanced coal-fueled power plant 

6 technology that meets 1 of the following per7 formance standards for limiting carbon dioxide 

8 emissions from an electric generation unit on 

9 an annual average basis, as determined by the 

10 Corporation: 

11 (i) For an electric generation unit 

12 that is not a new entrant, an annual emis13 sions rate of not more than 1,200 pounds 

14 of carbon dioxide per megawatt-hour of net 

15 electricity generation, after subtracting the 

16 carbon dioxide that is captured and se17 questered. 

18 (ii) For any project for which con19 struction of the unit commenced before 

20 July 1, 2018, an annual emissions rate of 

21 not more than 800 pounds of carbon diox22 ide per megawatt-hour of net electricity 

23 generation, after subtracting the carbon di24 oxide that is captured and sequestered. 


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1 (iii) For any project for which con2 struction of the unit commenced on or 

3 after July 1, 2018, an annual emissions 

4 rate of not more than 350 pounds of car5 bon dioxide per megawatt-hour of net elec6 tricity generation, after subtracting the 

7 carbon dioxide that is captured and se8 questered. 

9 (B) COMMENCED.—The term ‘‘com10 menced’’, with respect to construction, means 

11 that an owner or operator has— 

12 (i) obtained the necessary permits to 

13 carry out a continuous program of con14 struction; and 

15 (ii) entered into a binding contractual 

16 obligation, with substantial financial pen17 alties for cancellation, to undertake such a 

18 program. 

19 (C) CONSTRUCTION.—The term ‘‘construc20 tion’’, with respect to a carbon capture and se21 questration project, means the fabrication, erec22 tion, or installation of technology for the 

23 project. 

24 (2) ADJUSTMENT OF PERFORMANCE STAND25 ARDS.— 


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1 (A) IN GENERAL.—The Corporation may 

2 adjust the emissions performance standards for 

3 a carbon capture and sequestration project 

4 under paragraph (1)(A) for an electric genera5 tion unit that uses subbituminous coal, lignite, 

6 or petroleum coke in significant amounts. 

7 (B) REQUIREMENT.—If the Corporation 

8 adjusts a standard under subparagraph (A), the 

9 adjusted performance standard for the applica10 ble project shall prescribe an annual emissions 

11 rate that requires the project to achieve an 

12 equivalent reduction from uncontrolled carbon 

13 dioxide emissions levels from the use of subbitu14 minous coal, lignite, or petroleum coke, as com15 pared to the emissions the project would have 

16 achieved if that unit had combusted only bitu17 minous coal during the particular calendar year. 

18 (3) DEMONSTRATION PROJECTS.— 

19 (A) IN GENERAL.—The Corporation shall 

use not less than 1 20 ⁄4 of the amounts made avail21 able to carry out this section for each fiscal 

22 year to support demonstration projects using 

23 advanced coal generation technology, including 

24 retrofit technology that could be deployed on 

25 existing coal generation facilities. 


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1 (B) CERTAIN PROJECTS.—Of the amounts 

2 described in subparagraph (A), the Corporation 

3 shall make available up to 25 percent for 

4 projects that meet the carbon dioxide emissions 

5 performance standard under clause (i) of para6 graph (1)(A). 

7 (4) DEPLOYMENT INCENTIVES.— 

8 (A) IN GENERAL.—The Corporation shall 

use not less than 1 9 ⁄4 of the amounts made avail10 able to carry out this section for each fiscal 

11 year to provide financial incentives to facilitate 

12 the deployment of not more than 20 gigawatts 

13 of advanced coal generation technologies. 

14 (B) ADMINISTRATION.—In providing in15 centives under this paragraph, the Corporation 

16 shall— 

17 (i) provide appropriate incentives for 

18 regulated investor-owned utilities, munic19 ipal utilities, electric cooperatives, and 

20 independent power producers, as deter21 mined by the Secretary of Energy; and 

22 (ii) ensure that a range of the domes23 tic coal types is employed in the facilities 

24 that receive incentives under this para25 graph. 


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1 (C) FUNDING REQUIREMENTS.— 

2 (i) SEQUESTRATION ACTIVITIES.—The 

3 Corporation shall provide incentives only to 

4 projects that meet 1 of the emission per5 formance standards for limiting carbon di6 oxide under clause (ii) or (iii) of paragraph 

7 (1)(A). 

8 (ii) PROJECTS USING CERTAIN

9 COALS.—In providing incentives under this 

10 paragraph, the Corporation shall set aside 

11 not less than 25 percent of any amounts 

12 made available to carry out this subsection 

13 for projects using coal with an energy con14 tent of not more than 10,000 British ther15 mal units per pound. 

16 (5) STORAGE AGREEMENT REQUIRED.—The 

17 Corporation shall require a binding storage agree18 ment for the carbon dioxide captured in a project 

19 under this subsection in a geological storage project 

20 permitted by the Administrator under regulations 

21 promulgated pursuant to section 1421(d) of the Safe 

22 Drinking Water Act (42 U.S.C. 300h(d)). 

23 (6) DISTRIBUTION OF FUNDS.— 

24 (A) REQUIREMENT.—The Corporation 

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1 ner that maximizes the avoidance or reduction 

2 of greenhouse gas emissions. 

3 (B) INCENTIVES.—A project that receives 

4 an award under this subsection may elect 1 of 

5 the following financial incentives: 

6 (i) A loan guarantee. 

7 (ii) A cost-sharing grant to cover the 

8 incremental cost of installing and oper9 ating carbon capture and storage equip10 ment (for which utilization costs may be 

11 covered for the first 10 years of operation). 

12 (iii) Production payments of not more 

13 than 1.5 cents per kilowatt-hour of electric 

14 output during the first 10 years of com15 mercial service of the project. 

16 (7) LIMITATION.—A project may not receive an 

17 award under this subsection if the project receives 

18 an award under section 4402. 

19 (b) SEQUESTRATION.— 

20 (1) IN GENERAL.—The Corporation shall use 

not less than 1 21 ⁄2 of the amounts made available to 

22 carry out this section for each fiscal year for large23 scale geological carbon storage demonstration 

24 projects that store carbon dioxide captured from 

25 electric generation units using coal gasification or 


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1 other advanced coal combustion processes, including 

2 units that receive assistance under subsection (a). 

3 (2) PROJECT CAPITAL AND OPERATING

4 COSTS.— 

5 (A) IN GENERAL.—The Corporation shall 

6 provide assistance under this subsection to re7 imburse the project owner for a percentage of 

8 the incremental project capital and operating 

9 costs of the project that are attributable to car10 bon capture and sequestration, as the Secretary 

11 determines to be appropriate. 

12 (B) CERTAIN PROJECTS.—Of the assist13 ance provided under subparagraph (A), the 

14 Corporation shall make available up to 25 per15 cent for projects that meet the carbon dioxide 

16 emissions performance standard under sub17 section (a)(1)(A)(i). 

18 SEC. 4404. FUEL FROM CELLULOSIC BIOMASS. 

19 (a) IN GENERAL.—The Corporation shall provide de20 ployment incentives under this section to encourage a vari21 ety of projects to domestically produce transportation fuels 

22 from cellulosic biomass, relying on different feedstocks in 

23 different regions of the United States. 


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1 (b) PROJECT ELIGIBILITY.—Incentives under this 

2 section shall be provided on a competitive basis to projects 

3 that domestically produce fuels that— 

4 (1) meet United States fuel and emission speci5 fications; 

6 (2) help diversify domestic transportation en7 ergy supplies; and 

8 (3) improve or maintain air, water, soil, and 

9 habitat quality, and protect scarce water supplies. 

10 (c) INCENTIVES.—Incentives under this section may 

11 consist of— 

12 (1) loan guarantees for the construction of pro13 duction facilities and supporting infrastructure; or 

14 (2) production payments through a reverse auc15 tion in accordance with subsection (d). 

16 (d) REVERSE AUCTION.— 

17 (1) IN GENERAL.—In providing incentives 

18 under this section, the Corporation shall— 

19 (A) prescribe rules under which producers 

20 of fuel from cellulosic biomass may bid for pro21 duction payments under subsection (c)(2); and 

22 (B) solicit bids from producers of different 

23 classes of transportation fuel, as the Corpora24 tion determines to be appropriate. 


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1 (2) REQUIREMENT.—The rules under section 

2 4402 shall require that incentives shall be provided 

3 to the producers that submit the lowest bid (in 

4 terms of cents per gallon gasoline equivalent) for 

5 each class of transportation fuel from which the Cor6 poration solicits a bid. 

7 SEC. 4405. ADVANCED TECHNOLOGY VEHICLES MANUFAC8 TURING INCENTIVE PROGRAM. 

9 (a) DEFINITIONS.—In this section: 

10 (1) ADVANCED TECHNOLOGY VEHICLE.—The 

11 term ‘‘advanced technology vehicle’’ means an elec12 tric vehicle, a fuel cell-powered vehicle, a hybrid or 

13 plug-in hybrid electric vehicle, or an advanced diesel 

14 light duty motor vehicle, that meets— 

15 (A) the Tier II Bin 5 emission standard 

16 established in rules prescribed by the Adminis17 trator under section 202(i) of the Clean Air Act 

18 (42 U.S.C. 7521(i)), or a lower-numbered Bin 

19 emission standard; 

20 (B) any new emission standard for fine 

21 particulate matter prescribed by the Adminis22 trator under that Act; and 

23 (C) standard of at least 125 percent of the 

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1 cles other than advanced diesel light-duty motor 

2 vehicles, for vehicles of a substantially similar 

3 nature and footprint. 

4 (2) COMBINED FUEL ECONOMY.—The term 

5 ‘‘combined fuel economy’’ means— 

6 (A) the combined city-highway miles per 

7 gallon values, as reported in accordance with 

8 section 32908 of title 49, United States Code; 

9 and 

10 (B) in the case of an electric drive vehicle 

11 with the ability to recharge from an off-board 

12 source, the reported mileage, as determined in 

13 a manner consistent with the Society of Auto14 motive Engineers recommended practice for 

15 that configuration, or a similar practice rec16 ommended by the Secretary of Energy, using a 

17 petroleum equivalence factor for the off-board 

18 electricity (as defined by the Secretary of En19 ergy). 

20 (3) ENGINEERING INTEGRATION COSTS.—The 

21 term ‘‘engineering integration costs’’ includes the 

22 cost of engineering tasks performed in the United 

23 States relating to— 


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1 (A) incorporating qualifying components 

2 into the design of advanced technology vehicles; 

3 and 

4 (B) designing new tooling and equipment 

5 for production facilities that produce in the 

6 United States qualifying components or ad7 vanced technology vehicles. 

8 (4) QUALIFYING COMPONENT.—The term 

9 ‘‘qualifying component’’ means a component that the 

10 Secretary of Energy determines to be— 

11 (A) specially designed for advanced tech12 nology vehicles; 

13 (B) installed for the purpose of meeting 

14 the performance requirements of advanced tech15 nology vehicles as specified in subparagraphs 

16 (A), (B), and (C) of paragraph (1); and 

17 (C) manufactured in the United States. 

18 (b) MANUFACTURER FACILITY CONVERSION

19 AWARDS.—The Corporation shall provide facility conver20 sion funding awards under this subsection to automobile 

21 manufacturers and component suppliers to pay up to 30 

22 percent of the cost of— 

23 (1) reequipping or expanding an existing manu24 facturing facility to produce— 


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1 (A) qualifying advanced technology vehi2 cles; or 

3 (B) qualifying components; and 

4 (2) engineering integration of qualifying vehi5 cles and qualifying components. 

6 (c) PERIOD OF AVAILABILITY.—An award under sub7 section (b) shall apply to— 

8 (1) facilities and equipment placed in service 

9 after the date of enactment of this Act and before 

10 January 1, 2030; and 

11 (2) engineering integration costs incurred after 

12 the date of enactment of this Act. 

13 (d) ADDITIONAL LIMITATIONS.— 

14 (1) MAXIMUM AMOUNT.—The maximum 

15 amount of all awards under this section shall not ex16 ceed $40,000,000,000. 

17 (2) CAFE REQUIREMENTS.—The Corporation 

18 shall not make an award under this section to an 

19 automobile manufacturer or component supplier 

20 that, directly or through a parent, subsidiary, or af21 filiated entity, is not in compliance with each cor22 porate average fuel economy standard under section 

23 32902 of title 49, United States Code, in effect on 

24 the date of the award. 

25 (e) ADDITIONAL REQUIREMENTS.— 


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1 (1) DEFINITION OF RECIPIENT.—In this sub2 section, the term ‘‘recipient’’ means the automobile 

3 manufacturer or component supplier (including any 

4 parent, subsidiary, and affiliated entities) that re5 ceives an award under this section. 

6 (2) CERTIFICATION.—To be eligible for an 

7 award under this section, an automobile manufac8 turer or component supplier (including any parent, 

9 subsidiary, and affiliated entities) shall certify to the 

10 Corporation that, for each of the 7 calendar years 

11 following the receipt of the award, the manufacturer 

12 or supplier will maintain in the United States a 

13 number of full-time or full-time-equivalent employ14 ees— 

15 (A) equal to 90 percent of the monthly av16 erage number of full-time or full-time-equivalent 

17 employees maintained by the manufacturer or 

18 supplier for the 12-month period ending on the 

19 date of receipt of the award; 

20 (B) sufficient to ensure that the proportion 

21 that the workforce of the manufacturer or sup22 plier in the United States bears to the global 

23 workforce of the manufacturer or supplier is 

24 equal to or greater than the average monthly 

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1 turer or supplier in the United States bears to 

2 the global workforce of the manufacturer or 

3 supplier for the 12-month period ending on the 

4 date of receipt of the award; or 

5 (C) sufficient to ensure that any percent6 age decrease in the hourly workforce of the 

7 manufacturer or supplier in the United States 

8 is not greater than the aggregate of the per9 centage decrease in the market share of the 

10 manufacturer or supplier in the United States 

11 and the increase in the productivity of the man12 ufacturer or supplier, calculated during the pe13 riod beginning on the date of receipt of the 

14 award and ending on the date of certification 

15 under this subparagraph. 

16 (3) RECERTIFICATION.—Not later than 1 year 

17 after the date of receipt of an award under this sec18 tion, and annually thereafter, a manufacturer or 

19 supplier shall— 

20 (A) recertify to the Corporation that, dur21 ing the preceding calendar year, the manufac22 turer or supplier has achieved compliance with 

23 the requirement described in paragraph (2); 

24 and 


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1 (B) provide to the Corporation sufficient 

2 data for verification of the recertification. 

3 (4) REPAYMENT.—A manufacturer or supplier 

4 that fails to make the recertification required by 

5 paragraph (3) shall pay to the Corporation an 

6 amount equal to the difference between— 

7 (A) the amount of the original award to 

8 the manufacturer or supplier; and 

9 (B) the product obtained by multiplying— 

(i) an amount equal to 1 10 ⁄7 of that 

11 original amount; and 

12 (ii) the number of years during which 

13 the manufacturer or supplier— 

14 (I) received an award under this 

15 section; and 

16 (II) made the certification re17 quired by paragraph (3). 

18 SEC. 4406. SUSTAINABLE ENERGY PROGRAM. 

19 (a) DEFINITION OF SUSTAINABLE ENERGY TECH20 NOLOGY.—In this section, the term ‘‘sustainable energy 

21 technology’’ means a technology to harness a renewable 

22 energy source (as defined in section 609(a) of the Public 

23 Utility Regulatory Policies Act of 1978 (7 U.S.C. 

24 918c(a)), including in distributed energy systems. 


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1 (b) DEMONSTRATION PROJECTS.—The Corporation 

2 shall use not less than 25 percent of the amounts made 

3 available to carry out this section for each fiscal year to 

4 support demonstration projects in the United States using 

5 sustainable energy technology, including in distributed en6 ergy systems. 

7 (c) DEPLOYMENT INCENTIVES.— 

8 (1) IN GENERAL.—The Corporation shall use 

9 not less than 25 percent of the amounts made avail10 able to carry out this section for each fiscal year to 

11 provide Federal financial incentives to facilitate the 

12 deployment in the United States of sustainable en13 ergy technology, including in distributed energy sys14 tems. 

15 (2) ADMINISTRATION.—In providing incentives 

16 under this subsection, the Corporation shall provide 

17 appropriate incentives for regulated investor-owned 

18 utilities, municipal utilities, electric cooperatives, 

19 independent power producers, and consumers, as de20 termined by the Secretary of Energy. 

21 (d) DISTRIBUTION OF FUNDS.—A project that re22 ceives an award under this subsection may elect 1 of the 

23 following Federal financial incentives: 

24 (1) A loan guarantee. 


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1 (2) A cost-sharing grant to cover the incre2 mental cost of installing and operating equipment 

3 (for which utilization costs may be covered for the 

4 first 10 years of operation). 

5 (3) Production payments of not more than 1.5 

6 cents per kilowatt-hour of electric output during the 

7 first 10 years of commercial service of the project. 

8 (e) LIMITATION.—A project may not receive an 

9 award under this subsection if the project receives an 

10 award under section 4402. 

11 Subtitle E—Energy Consumers 

12 SEC. 4501. PROPORTIONS OF FUNDING AVAILABILITY. 

13 All funds deposited into the Energy Assistance Fund 

14 established by section 4101(1) shall be made available, 

15 without further appropriation or fiscal year limitation, to 

16 the following programs in the following proportions: 

17 (1) 50 percent of the funds to the low-income 

18 home energy assistance program established under 

19 the Low Income Home Energy Assistance Act of 

20 1981 (42 U.S.C. 8621 et seq.). 

21 (2) 25 percent of the funds to the Weatheriza22 tion Assistance Program for Low-Income Persons 

23 established under part A of title IV of the Energy 

24 Conservation and Production Act (42 U.S.C. 6861 

25 et seq.). 


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1 (3) 25 percent of the funds to the rural energy 

2 assistance program described in section 4502. 

3 SEC. 4502. RURAL ENERGY ASSISTANCE PROGRAM. 

4 The Secretary of Energy shall carry out a program 

5 to use the funds made available under section 4501(3) to 

6 provide financial assistance to promote the availability of 

7 reasonably-priced distributed electricity in off-grid rural 

8 regions in which electricity prices exceed 150 percent of 

9 the national average, as determined by the Secretary of 

10 Energy. 

11 Subtitle F—Climate Change 

12 Worker Training Program 

13 SEC. 4601. FUNDING. 

14 All funds deposited into the Climate Change Worker 

15 Training Fund established by section 4101(2) shall be 

16 made available, without further appropriation or fiscal 

17 year limitation, to carry out the programs established 

18 under this subtitle. 

19 SEC. 4602. PURPOSES. 

20 The purposes of this subtitle are— 

21 (1) to create a sustainable, comprehensive pub22 lic program that provides quality training that is 

23 linked to jobs that are created through low-carbon 

24 energy, sustainable energy, and energy efficiency ini25 tiatives; 


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1 (2) to satisfy industry demand for a skilled 

2 workforce, support economic growth, boost the glob3 al competitiveness of the United States in expanding 

4 low-carbon energy, sustainable energy, and energy 

5 efficiency industries, and provide economic self-suffi6 ciency and family-sustaining jobs for United States 

7 workers, including low-wage workers, through qual8 ity training and placement in job opportunities in 

9 those industries; and 

10 (3) to provide funds for Federal and State in11 dustry-wide research, labor market information and 

12 labor exchange programs, and the development of 

13 Federal- and State-administered training programs. 

14 SEC. 4603. ESTABLISHMENT. 

15 Not later than 180 days after the date of enactment 

16 of this Act, the Secretary of Labor (referred to in this 

17 subtitle as the ‘‘Secretary’’), in consultation with the Ad18 ministrator and the Secretary of Energy, shall establish 

19 a climate change worker training program that achieves 

20 the purposes of this subtitle. 

21 SEC. 4604. ACTIVITIES. 

22 (a) NATIONAL RESEARCH PROGRAM.—Under the 

23 program established under section 4603, the Secretary, 

24 acting through the Bureau of Labor Statistics, shall pro25 vide assistance to support national research to develop 


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1 labor market data and to track future workforce trends 

2 resulting from energy-related initiatives carried out under 

3 this section, including— 

4 (1) linking research and development in low5 carbon energy, sustainable energy, and energy effi6 ciency technology with the development of standards 

7 and curricula for current and future jobs; 

8 (2) the tracking and documentation of academic 

9 and occupational competencies and future skill needs 

10 with respect to low-carbon energy, sustainable en11 ergy, and energy efficiency technology; 

12 (3) tracking and documentation of occupational 

13 information and workforce training data with re14 spect to low-carbon energy, sustainable energy, and 

15 energy efficiency technology; 

16 (4) assessing new employment and work prac17 tices, including career ladder and upgrade training 

18 and high-performance work systems; and 

19 (5) collaborating with State agencies, industry, 

20 organized labor, and community and nonprofit orga21 nizations to disseminate successful innovations for 

22 labor market services and worker training with re23 spect to low-carbon energy, sustainable energy, and 

24 energy efficiency technology. 


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1 (b) NATIONAL ENERGY TRAINING PARTNERSHIP

2 GRANTS.— 

3 (1) GRANTS.— 

4 (A) IN GENERAL.—Under the program es5 tablished under section 4603, the Secretary 

6 shall award national energy training partner7 ships grants on a competitive basis to eligible 

8 entities to enable the entities— 

9 (i) to carry out national training that 

10 leads to economic self-sufficiency; and 

11 (ii) to develop a low-carbon energy, 

12 sustainable energy, and energy efficiency 

13 industries workforce. 

14 (B) DIVERSITY.—Grants shall be awarded 

15 under this paragraph so as to ensure geo16 graphic diversity, with— 

17 (i) at least 2 grants awarded to enti18 ties located in each of the 4 Petroleum Ad19 ministration for Defense Districts with no 

20 subdistricts; and 

21 (ii) at least 1 grant awarded to an en22 tity located in each of the subdistricts of 

23 the Petroleum Administration for Defense 

24 District with subdistricts. 


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1 (2) ELIGIBILITY.—To be eligible to receive a 

2 grant under paragraph (1), an entity shall be a non3 profit partnership that— 

4 (A) includes the equal participation of in5 dustry, including public or private employers, 

6 and labor organizations, including joint labor7 management training programs, and may in8 clude community-based organizations, edu9 cational institutions, small businesses, coopera10 tives, State and local veterans agencies, and 

11 veterans service organizations; and 

12 (B) demonstrates— 

13 (i) experience in implementing and op14 erating worker skills training and edu15 cation programs; 

16 (ii) the ability to identify and involve 

17 in training programs carried out using the 

18 grant, target populations of workers that 

19 are or will be engaged in activities relating 

20 to low-carbon energy, sustainable energy, 

21 and energy efficiency industries; and 

22 (iii) the ability to help workers achieve 

23 economic self-sufficiency. 


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1 (3) ACTIVITIES.—Activities to be carried out 

2 using a grant provided under this subsection may in3 clude— 

4 (A) the provision of occupational skills 

5 training, including curriculum development, on6 the-job training, and classroom training; 

7 (B) the provision of safety and health 

8 training; 

9 (C) the provision of basic skills, literacy, 

10 general equivalency degree, English as a second 

11 language, and job readiness training; 

12 (D) individual referral and tuition assist13 ance for a community college training program; 

14 (E) the provision of customized training in 

15 conjunction with an existing registered appren16 ticeship program or labor-management partner17 ship; 

18 (F) the provision of career ladder and up19 grade training; and 

20 (G) the implementation of transitional jobs 

21 strategies. 

22 (c) STATE LABOR MARKET RESEARCH, INFORMA23 TION, AND LABOR EXCHANGE RESEARCH PROGRAM.— 

24 (1) IN GENERAL.—Under the program estab25 lished under section 4603, the Secretary shall award 


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1 competitive grants to States to enable the States to 

2 administer labor market and labor exchange infor3 mational programs that include the implementation 

4 of the activities described in paragraph (2). 

5 (2) ACTIVITIES.—A State shall use amounts 

6 awarded under this subsection to provide funding to 

7 the State agency that administers the Wagner8 Peyser Act (29 U.S.C. 49 et seq.) and State unem9 ployment compensation programs to carry out the 

10 following activities using State agency merit staff: 

11 (A) The identification of job openings in 

12 the low-carbon energy, sustainable energy, and 

13 energy efficiency sector. 

14 (B) The administration of skill and apti15 tude testing and assessment for workers. 

16 (C) The counseling, case management, and 

17 referral of qualified job seekers to openings and 

18 training programs, including low-carbon energy, 

19 sustainable energy, and energy efficiency train20 ing programs. 

21 (d) STATE ENERGY TRAINING PARTNERSHIP PRO22 GRAM.— 

23 (1) IN GENERAL.—Under the program estab24 lished under section 4603, the Secretary shall award 

25 competitive grants to States to enable the States to 


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1 administer low-carbon energy, sustainable energy, 

2 and energy efficiency workforce development pro3 grams that include the implementation of the activi4 ties described in paragraph (2). 

5 (2) ACTIVITIES.— 

6 (A) IN GENERAL.—A State shall use 

7 amounts awarded under the subsection to 

8 award competitive grants to eligible State en9 ergy sector partnerships to enable the partner10 ships to coordinate with existing apprenticeship 

11 and labor management training programs and 

12 implement training programs that lead to the 

13 economic self-sufficiency of trainees. 

14 (B) ELIGIBILITY.—To be eligible to receive 

15 a grant under this subsection, a State energy 

16 sector partnership shall— 

17 (i) consist of nonprofit organizations 

18 that include equal participation from in19 dustry, including public or private non20 profit employers, and labor organizations, 

21 including joint labor-management training 

22 programs, and may include representatives 

23 from local governments, worker investment 

24 agency one-stop career centers, community 

25 based organizations, community colleges, 


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1 other post-secondary institutions, small 

2 businesses, cooperatives, State and local 

3 veterans agencies, and veterans service or4 ganizations; 

5 (ii) demonstrate experience in imple6 menting and operating worker skills train7 ing and education programs; and 

8 (iii) demonstrate the ability to identify 

9 and involve in training programs, target 

10 populations of workers that are or will be 

11 engaged in activities relating to low-carbon 

12 energy, sustainable energy, and energy ef13 ficiency industries. 

14 (C) PRIORITY.—In awarding grants under 

15 this subsection, the Secretary shall give priority 

16 to States that demonstrate linkages of activities 

17 under the grant with— 

18 (i) meeting national energy policies 

19 associated with low-carbon energy, sustain20 able energy, and energy efficiency; and 

21 (ii) meeting State energy policies as22 sociated with low-carbon energy, sustain23 able energy, and energy efficiency. 

24 (D) COORDINATION.—An entity that re25 ceives a grant under this subsection shall— 


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1 (i) coordinate activities carried out 

2 under the grant with existing apprentice3 ship and labor management training pro4 grams; and 

5 (ii) implement training programs that 

6 lead to the economic self-sufficiency of 

7 trainees, including providing— 

8 (I) outreach and recruitment 

9 services, in coordination with the ap10 propriate State agency; 

11 (II) occupational skills training, 

12 including curriculum development, on13 the-job training, and classroom train14 ing; 

15 (III) safety and health training; 

16 (IV) basic skills, literacy, general 

17 equivalency degree, English as a sec18 ond language, and job readiness train19 ing; 

20 (V) individual referral and tuition 

21 assistance for a community college 

22 training program; 

23 (VI) customized training in con24 junction with an existing registered 


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1 apprenticeship program or labor-man2 agement partnership; 

3 (VII) career ladder and upgrade 

4 training; and 

5 (VIII) services under transitional 

6 jobs strategies. 

7 SEC. 4605. WORKER PROTECTIONS AND NONDISCRIMINA8 TION REQUIREMENTS. 

9 (a) APPLICABILITY OF WIA.—Sections 181 and 188 

10 of the Workforce Investment Act of 1998 (29 U.S.C. 

11 2931, 2938) shall apply to all programs carried out using 

12 assistance under this subtitle. 

13 (b) CONSULTATION WITH LABOR ORGANIZATIONS.— 

14 If a labor organization represents a substantial number 

15 of workers that are engaged in similar work or training 

16 in an area that is the same as the area that is proposed 

17 to be funded under this subtitle, the labor organization 

18 shall be provided an opportunity to be consulted and to 

19 submit comments in regard to such a proposal. 

20 SEC. 4606. WORKFORCE TRAINING AND SAFETY. 

21 (a) UNIVERSITY PROGRAMS.—In order to enhance 

22 the educational opportunities and safety of a future gen23 eration of scientists, engineers, health physicists, and en24 ergy workforce employees, 25 percent of the funds depos25 ited into the Climate Change Worker Training Fund shall 


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1 be used for the University Programs within the Depart2 ment of Energy, to help United States university and col3 leges stay at the forefront of science education and re4 search and assist universities in the operation of advanced 

5 energy research facilities and in the performance of other 

6 educational activities. 

7 (b) EMPLOYEE ORGANIZATIONS.—The Secretary 

8 shall provide technical assistance and funds for training 

9 directly to nonprofit employee organizations, voluntary 

10 emergency response organizations, and joint labor-man11 agement organizations that demonstrate experience in im12 plementing and operating worker health and safety train13 ing and education programs. 

14 (c) WORKFORCE TRAINING.— 

15 (1) IN GENERAL.—The Secretary of Labor, in 

16 cooperation with the Secretary of Energy, shall pro17 mulgate regulations— 

18 (A) to implement a program to provide 

19 workforce training to meet the high demand for 

20 workers skilled in zero- and low-emitting carbon 

21 energy technologies and provide for related 

22 safety issues; 

23 (B) to implement a fully validated elec24 trical craft certification program, career and 

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1 ondary education level, preapprenticeship career 

2 technical education for all zero- and low-emit3 ting carbon energy technologies related indus4 trial skilled crafts, community college and skill 

5 center training for zero- and low-emitting car6 bon energy technology technicians, development 

7 of construction management personnel for zero8 and low-emitting carbon energy technology con9 struction projects and regional grants for inte10 grated zero- and low-emitting carbon energy 

11 technology workforce development programs; 

12 and 

13 (C) to ensure the safety of workers in such 

14 careers. 

15 (2) CONSULTATION.—In carrying out this sub16 section, the Secretary of Labor shall consult with 

17 relevant Federal agencies, representatives of the 

18 zero- and low-emitting carbon energy technologies 

19 industries, and organized labor, concerning skills 

20 and such safety measures that are needed in those 

21 industries. 

22 (d) QUANTIFICATION.—For purposes of dispersing 

23 funds under this section, qualifying zero- and low-emitting 

24 carbon energy means any technology that has a rated ca25 pacity of at least 750 megawatts of power. 


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1 Subtitle G—Adaptation Program 

2 for Natural Resources in United 

3 States and Territories 

4 SEC. 4701. DEFINITIONS. 

5 In this subtitle: 

6 (1) ECOLOGICAL PROCESS.— 

7 (A) IN GENERAL.—The term ‘‘ecological 

8 process’’ means a biological, chemical, or phys9 ical interaction between the biotic and abiotic 

10 components of an ecosystem. 

11 (B) INCLUSIONS.—The term ‘‘ecological 

12 process’’ includes— 

13 (i) nutrient cycling; 

14 (ii) pollination; 

15 (iii) predator-prey relationships; 

16 (iv) soil formation; 

17 (v) gene flow; 

18 (vi) larval dispersal and settlement; 

19 (vii) hydrological cycling; 

20 (viii) decomposition; and 

21 (ix) disturbance regimes, such as fire 

22 and flooding. 

23 (2) FISH AND WILDLIFE.—The term ‘‘fish and 

24 wildlife’’ means— 


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1 (A) any species of wild fauna, including 

2 fish and other aquatic species; and 

3 (B) any fauna in a captive breeding pro4 gram the object of which is to reintroduce indi5 viduals of a depleted indigenous species into 

6 previously occupied range. 

7 (3) HABITAT.—The term ‘‘habitat’’ means the 

8 physical, chemical, and biological properties that are 

9 used by wildlife (including aquatic and terrestrial 

10 plant communities) for growth, reproduction, and 

11 survival, food, water, cover, and space, on a tract of 

12 land, in a body of water, or in an area or region. 

13 (4) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 

14 has the meaning given the term in section 4 of the 

15 Indian Self-Determination and Education Assistance 

16 Act (25 U.S.C. 450b). 

17 (5) PLANT.—The term ‘‘plant’’ means any spe18 cies of wild flora. 

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

20 the Secretary of the Interior. 

21 (7) STATE.—The term ‘‘State’’ means— 

22 (A) a State; 

23 (B) the District of Columbia; 

24 (C) the Commonwealth of Puerto Rico; 

25 and 


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1 (D) any other territory or possession of the 

2 United States. 

3 SEC. 4702. ADAPTATION FUND. 

4 (a) AVAILABILITY OF AMOUNTS.—All amounts de5 posited in the Adaptation Fund established by section 

6 4101(3) shall be made available, without further appro7 priation or fiscal year limitation, to carry out activities (in8 cluding research and education activities) that assist fish 

9 and wildlife, fish and wildlife habitat, plants, and associ10 ated ecological processes in becoming more resilient, 

11 adapting to, and surviving the impacts of climate change 

12 and ocean acidification (referred to in this section as ‘‘ad13 aptation activities’’) pursuant to this section. 

14 (b) DEPARTMENT OF THE INTERIOR.—Of the 

15 amounts made available annually to carry out this sub16 section— 

17 (1) 35 percent shall be allocated to the Sec18 retary, and subsequently made available to States 

19 through the Wildlife Conservation and Restoration 

20 Account established under section 3(a)(2) of the 

21 Pittman-Robertson Wildlife Restoration Act (16 

22 U.S.C. 669b(a)(2)), to carry out adaptation activi23 ties in accordance with comprehensive State adapta24 tion strategies, as described in subsection (j); 


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1 (2) 19 percent shall be allocated to the Sec2 retary for use in funding adaptation activities car3 ried out— 

4 (A) under endangered species, migratory 

5 bird, and other fish and wildlife programs ad6 ministered by the United States Fish and Wild7 life Service; 

8 (B) on wildlife refuges and other public 

9 land under the jurisdiction of the United States 

10 Fish and Wildlife Service, the Bureau of Land 

11 Management, or the National Park Service; or 

12 (C) within Federal water managed by the 

13 Bureau of Reclamation; 

14 (3) 5 percent shall be allocated to the Secretary 

15 for adaptation activities carried out under coopera16 tive grant programs, including— 

17 (A) the cooperative endangered species 

18 conservation fund authorized under section 6(i) 

19 of the Endangered Species Act of 1973 (16 

20 U.S.C. 1535(i)); 

21 (B) programs under the North American 

22 Wetlands Conservation Act (16 U.S.C. 4401 et 

23 seq.); 

24 (C) the multinational species conservation 

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1 NATIONAL SPECIES CONSERVATION FUND’’ of 

2 title I of the Department of the Interior and 

3 Related Agencies Appropriations Act, 1999 (16 

4 U.S.C. 4246); 

5 (D) the Neotropical Migratory Bird Con6 servation Fund established by section 9(a) of 

7 the Neotropical Migratory Bird Conservation 

8 Act (16 U.S.C. 6108(a)); 

9 (E) the Coastal Program of the United 

10 States Fish and Wildlife Service; 

11 (F) the National Fish Habitat Action 

12 Plan; 

13 (G) the Partners for Fish and Wildlife 

14 Program; 

15 (H) the Landowner Incentive Program; 

16 (I) the Wildlife Without Borders Program 

17 of the United States Fish and Wildlife Service; 

18 and 

19 (J) the Park Flight Migratory Bird Pro20 gram of the National Park Service; and 

21 (4) 1 percent shall be allocated to the Secretary 

22 and subsequently made available to Indian tribes to 

23 carry out adaptation activities through the tribal 

24 wildlife grants program of the United States Fish 

25 and Wildlife Service. 


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1 (c) LAND AND WATER CONSERVATION FUND.— 

2 (1) DEPOSITS.— 

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

4 paragraph (2), of the amounts made available 

5 for each fiscal year to carry out this subsection, 

6 10 percent shall be deposited into the Land and 

7 Water Conservation Fund established under 

8 section 2 of the Land and Water Conservation 

9 Fund Act of 1965 (16 U.S.C. 460l–5). 

10 (B) Deposits to the Land and Water Con11 servation Fund under this subsection shall— 

12 (i) be supplemental to authorizations 

13 provided under section 3 of the Land and 

14 Water Conservation Fund Act of 1965 (16 

15 U.S.C. 460l–6); and 

16 (ii) remain available for non-adapta17 tion needs. 

18 (2) EXCEPTION.—For any fiscal year in which 

19 a deposit into the Land and Water Conservation 

20 Fund under paragraph (1) would result in an 

21 amount greater than $900,000,000— 

22 (A) $900,000,000 shall be deposited into 

23 the Land and Water Conservation Fund; and 


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1 (B) the remaining funds shall be distrib2 uted on a pro rata basis as otherwise provided 

3 in this section. 

4 (3) ALLOCATIONS.—Of the amounts deposited 

5 under this subsection into the Land and Water Con6 servation Fund— 

(A) 1 7 ⁄6 shall be allocated to the Secretary 

8 and made available to carry out section 6 of the 

9 Land and Water Conservation Fund Act of 

10 1965 (16 U.S.C. 460l–8) to States, on a com11 petitive basis— 

12 (i) in accordance with comprehensive 

13 wildlife conservation strategies and Indian 

14 tribes, to carry out adaptation activities 

15 through the acquisition of land and inter16 ests in land; 

17 (ii) notwithstanding section 5 of that 

18 Act (16 U.S.C. 460l–7); and 

19 (iii) in addition to grants provided 

20 pursuant to— 

21 (I) annual appropriations Acts; 

22 (II) the Energy Policy Act of 

23 2005 (42 U.S.C. 15801 et seq.); or 

24 (III) any other authorization for 

25 nonadaptation needs; 


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(B) 1 1 ⁄3 shall be allocated to the Secretary 

2 to carry out adaptation activities through the 

3 acquisition of lands and interests in land under 

4 section 7 of the Land and Water Conservation 

5 Fund Act of 1965 (16 U.S.C. 460l–9); 

(C) 1 6 ⁄6 shall be allocated to the Secretary 

7 of Agriculture and made available to the States 

8 to carry out adaptation activities through the 

9 acquisition of land and interests in land under 

10 section 7 of the Forest Legacy Program under 

11 the Cooperative Forestry Assistance Act of 

12 1978 (16 U.S.C. 2103c); and 

(D) 1 13 ⁄3 shall be allocated to the Secretary 

14 of Agriculture to carry out adaptation activities 

15 through the acquisition of land and interests in 

16 land under section 7 of the Land and Water 

17 Conservation Fund Act of 1965 (16 U.S.C. 

18 460l–9). 

19 (4) EXPENDITURE OF FUNDS.—In allocating 

20 funds under subsection (c), the Secretary and the 

21 Secretary of Agriculture shall take into consideration 

22 factors including— 

23 (A) the availability of non-Federal con24 tributions from State, local, or private sources; 


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1 (B) opportunities to protect wildlife cor2 ridors or otherwise to link or consolidate frag3 mented habitats; 

4 (C) opportunities to reduce the risk of cat5 astrophic wildfires, extreme flooding, or other 

6 climate-related events that are harmful to fish 

7 and wildlife and people; 

8 (D) the potential for conservation of spe9 cies or habitat types at serious risk due to cli10 mate change, ocean acidification, and other 

11 stressors; and 

12 (E) the potential to provide enhanced ac13 cess to land and water for fishing, hunting, and 

14 other public recreational uses. 

15 (d) FOREST SERVICE.—Of the amounts made avail16 able annually to carry out this section, 5 percent shall be 

17 allocated to the Secretary of Agriculture for use in funding 

18 adaptation activities carried out on national forests and 

19 national grasslands under the jurisdiction of the Forest 

20 Service, or pursuant to the cooperative Wings Across the 

21 Americas Program. 

22 (e) ENVIRONMENTAL PROTECTION AGENCY.—Of the 

23 amounts made available annually to carry out this section, 

24 5 percent shall be allocated to the Administrator for use 

25 in adaptation activities restoring and protecting— 


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1 (1) large-scale freshwater aquatic ecosystems, 

2 such as the Everglades, the Great Lakes, Flathead 

3 Lake, the Missouri River, the Mississippi River, the 

4 Colorado River, the Sacramento-San Joaquin Rivers, 

5 the Ohio River, the Columbia-Snake River System, 

6 the Apalachicola, Chattahoochee and Flint River 

7 System, the Connecticut River, and the Yellowstone 

8 River; 

9 (2) large-scale estuarine ecosystems, such as 

10 Chesapeake Bay, Long Island Sound, Puget Sound, 

11 the Mississippi River Delta , San Francisco Bay 

12 Delta, Narragansett Bay, and Albemarle-Pamlico 

13 Sound; and 

14 (3) freshwater and estuarine ecosystems, water15 sheds, and basins identified as priorities by the Ad16 ministrator, working in cooperation with other Fed17 eral agencies, States, local governments, scientists, 

18 and other conservation partners. 

19 (f) CORPS OF ENGINEERS.—Of the amounts made 

20 available annually to carry out this section, 10 percent 

21 shall be allocated to the Secretary of the Army for use 

22 by the Corps of Engineers to carry out adaptation activi23 ties restoring— 


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1 (1) large-scale freshwater aquatic ecosystems, 

2 such as the ecosystems described in subsection 

3 (e)(1); 

4 (2) large-scale estuarine ecosystems, such as 

5 the ecosystems described in subsection (e)(2); 

6 (3) freshwater and estuarine ecosystems, water7 sheds, and basins identified as priorities by the 

8 Corps of Engineers, working in cooperation with 

9 other Federal agencies, States, local governments, 

10 scientists, and other conservation partners; and 

11 (4) habitats or ecosystems under programs such 

12 as the Estuary Restoration Act of 2000 (33 U.S.C. 

13 2901 et seq.), project modifications for improvement 

14 of the environment, and aquatic restoration under 

15 section 206 of the Water Resources Development 

16 Act of 1996 (33 U.S.C. 2330). 

17 (g) DEPARTMENT OF COMMERCE.—Of the amounts 

18 made available annually to carry out this section, 10 per19 cent shall be allocated to the Secretary of Commerce for 

20 use in funding adaptation activities to protect, maintain, 

21 and restore coastal, estuarine, and marine resources, habi22 tats, and ecosystems, including such activities carried out 

23 under— 

24 (1) the coastal and estuarine land conservation 

25 program; 


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1 (2) the community-based restoration program; 

2 (3) the Coastal Zone Management Act of 1972 

3 (16 U.S.C. 1451 et seq.), subject to the condition 

4 that State coastal agencies shall incorporate, and the 

5 Secretary of Commerce shall approve, coastal zone 

6 management plan elements that are— 

7 (A) consistent with the national adaptation 

8 strategy under subsection (i), as part of a 

9 coastal zone management program established 

10 under this Act; and 

11 (B) specifically designed to strengthen the 

12 ability of coastal, estuarine, and marine re13 sources, habitats, and ecosystems to adapt to 

14 and withstand the impacts of— 

15 (i) global warming; and 

16 (ii) where practicable, ocean acidifica17 tion; 

18 (4) the Open Rivers Initiative; 

19 (5) the Magnuson Fishery Conservation and 

20 Management Act (16 U.S.C. 1801 et seq.); 

21 (6) the Marine Mammal Protection Act of 1972 

22 (16 U.S.C. 1361 et seq.); 

23 (7) the Endangered Species Act of 1973 (16 

24 U.S.C. 1531 et seq.); 


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1 (8) the Marine Protection, Research, and Sanc2 tuaries Act of 1972 (33 U.S.C. 1401 et seq.); and 

3 (9) the Coral Reef Conservation Act of 2000 

4 (16 U.S.C. 6401 et seq.). 

5 (h) COST SHARING.—Notwithstanding any other pro6 vision of law, a State or Indian tribe that receives a grant 

7 under paragraph (1) or (4) of subsection (b) shall provide 

8 10 percent of the costs of each activity carried out using 

9 amounts under the grant. 

10 (i) NATIONAL ADAPTATION STRATEGY.— 

11 (1) IN GENERAL.—Effective beginning on the 

12 date on which the President establishes the national 

13 strategy under paragraph (3), funds made available 

14 under paragraphs (2), (3), and (4) of subsection (b) 

15 and subsections (c) through (g) shall be used only 

16 for adaptation activities that are consistent with the 

17 national strategy. 

18 (2) INITIAL PERIOD.—Until the date on which 

19 the President establishes the national strategy under 

20 paragraph (3), funds made available under para21 graphs (2), (3), and (4) of subsection (b) and sub22 sections (c) through (g) shall be used only for adap23 tation activities that are consistent with a workplan 

24 established by the President. 

25 (3) NATIONAL STRATEGY.— 


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1 (A) IN GENERAL.—Not later than 3 years 

2 after the date of enactment of this Act, the 

3 President shall develop and implement a na4 tional strategy for assisting fish and wildlife, 

5 fish and wildlife habitat, plants, and associated 

6 ecological processes in becoming more resilient 

7 and adapting to the impacts of climate change 

8 and ocean acidification. 

9 (B) ADMINISTRATION.—In establishing 

10 and revising the national strategy, the Presi11 dent shall— 

12 (i) base the national strategy on the 

13 best available science, as identified by the 

14 Science Advisory Board established under 

15 subparagraph (D); 

16 (ii) develop the national strategy in 

17 cooperation with State fish and wildlife 

18 agencies, State coastal agencies, United 

19 States territories, and Indian tribes; 

20 (iii) coordinate with the Secretary of 

21 the Interior, the Secretary of Commerce, 

22 the Secretary of Agriculture, the Secretary 

23 of Defense, the Administrator of the Envi24 ronmental Protection Agency, and other 

25 agencies as appropriate; 


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1 (iv) consult with local governments, 

2 conservation organizations, scientists, and 

3 other interested stakeholders; and 

4 (v) provide public notice and oppor5 tunity for comment. 

6 (C) CONTENTS.—The President shall in7 clude in the national strategy, at a minimum, 

8 prioritized goals and measures and a schedule 

9 for implementation— 

10 (i) to identify and monitor fish and 

11 wildlife, fish and wildlife habitat, plants, 

12 and associated ecological processes that are 

13 particularly likely to be adversely affected 

14 by climate change and ocean acidification 

15 and have the greatest need for conserva16 tion; 

17 (ii) to identify and monitor coastal, 

18 estuarine, marine, terrestrial, and fresh19 water habitats that are at the greatest risk 

20 of being damaged by climate change and 

21 ocean acidification; 

22 (iii) to assist species in adapting to 

23 the impacts of climate change and ocean 

24 acidification; 


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1 (iv) to protect, acquire, maintain, and 

2 restore fish and wildlife habitat to build re3 silience to climate change and ocean acidi4 fication; 

5 (v) to provide habitat linkages and 

6 corridors to facilitate fish, wildlife, and 

7 plant movement in response to climate 

8 change and ocean acidification; 

9 (vi) to restore and protect ecological 

10 processes that sustain fish, wildlife, and 

11 plant populations that are vulnerable to cli12 mate change and ocean acidification; 

13 (vii) to protect, maintain, and restore 

14 coastal, marine, and aquatic ecosystems so 

15 that the ecosystems are more resilient and 

16 better able to withstand the additional 

17 stresses associated with climate change, in18 cluding relative sea level rise and ocean 

19 acidification; 

20 (viii) to protect ocean and coastal spe21 cies from the impact of climate change and 

22 ocean acidification; 

23 (ix) to incorporate adaptation strate24 gies and activities to address relative sea 

25 level rise in coastal zone planning; 


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1 (x) to protect, maintain, and restore 

2 ocean and coastal habitats to build healthy 

3 and resilient ecosystems, including the pur4 chase of coastal and island land; and 

5 (xi) to incorporate consideration of cli6 mate change and ocean acidification, and 

7 to integrate adaptation strategies and ac8 tivities for fish and wildlife, fish and wild9 life habitat, plants, and associated ecologi10 cal processes, in the planning and manage11 ment of Federal land and water adminis12 tered by the Federal agencies that receive 

13 funding under this section. 

14 (D) SCIENCE ADVISORY BOARD.— 

15 (i) ESTABLISHMENT.—Not later than 

16 180 days after the date of enactment of 

17 this Act, the Secretary shall establish and 

18 appoint the members of a science advisory 

19 board, to be comprised of not fewer than 

20 10 and not more than 20 members, who 

21 shall— 

22 (I) be recommended by the Presi23 dent of the National Academy of 

24 Sciences; 


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1 (II) have expertise in fish, wild2 life, plant, aquatic, and coastal and 

3 marine biology, ecology, climate 

4 change, ocean acidification, and other 

5 relevant scientific disciplines; and 

6 (III) represent a balanced mem7 bership between Federal, State, and 

8 local representatives, universities, and 

9 conservation organizations. 

10 (ii) DUTIES.—The science advisory 

11 board shall— 

12 (I) advise the President and rel13 evant Federal agencies and depart14 ments on— 

15 (aa) the best available 

16 science regarding the impacts of 

17 climate change and ocean acidifi18 cation on fish and wildlife, habi19 tat, plants, and associated eco20 logical processes; and 

21 (bb) scientific strategies and 

22 mechanisms for adaptation; and 

23 (II) identify and recommend pri24 orities for ongoing research needs on 

25 those issues. 


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1 (iii) COLLABORATION.—The science 

2 advisory board shall collaborate with other 

3 climate change and ecosystem research en4 tities in other Federal agencies and depart5 ments. 

6 (iv) AVAILABILITY TO PUBLIC.—The 

7 advice and recommendations of the science 

8 advisory board shall be made available to 

9 the public. 

10 (v) NONAPPLICABILITY OF FACA.— 

11 The Federal Advisory Committee Act (5 

12 U.S.C. App.) shall not apply to the science 

13 advisory board. 

14 (E) COORDINATION WITH OTHER PLANS.— 

15 In developing the national strategy, the Presi16 dent shall, to the maximum extent prac17 ticable— 

18 (i) take into consideration research 

19 and information contained in— 

20 (I) State comprehensive wildlife 

21 conservation plans; 

22 (II) the North American water23 fowl management plan; 

24 (III) the national fish habitat ac25 tion plan; 


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1 (IV) coastal zone management 

2 plans; 

3 (V) the reports of the Pew 

4 Oceans Commission and the United 

5 States Commission on Ocean Policy; 

6 and 

7 (VI) other relevant plans; and 

8 (ii) coordinate and integrate the goals 

9 and measures identified in the national 

10 strategy with the goals and measures iden11 tified in those plans. 

12 (F) REVISIONS.—Not later than 5 years 

13 after the date on which the strategy is devel14 oped, and not less frequently than every 5 years 

15 thereafter, the President shall review and up16 date the national strategy using the procedures 

17 described in this paragraph. 

18 (j) STATE COMPREHENSIVE ADAPTATION STRATE19 GIES.— 

20 (1) IN GENERAL.—Except as provided in para21 graph (2), funds made available to States under this 

22 subtitle shall be used only for activities that are con23 sistent with a State strategy that has been approved 

24 by, as appropriate— 

25 (A) the Secretary of the Interior; or 


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1 (B) for any State with a coastal zone 

2 (within the meaning of the Coastal Zone Man3 agement Act (16 U.S.C. 1451 et seq.)), by the 

4 Secretary of Commerce, subject to the condition 

5 that approval by the Secretary of Commerce 

6 shall be required only for those portions of the 

7 strategy relating to activities affecting the 

8 coastal zone. 

9 (2) INITIAL PERIOD.— 

10 (A) IN GENERAL.—Until the earlier of the 

11 date that is 3 years after the date of enactment 

12 of this Act or the date on which a State re13 ceives approval for the State strategy, a State 

14 shall be eligible to receive funding under sub15 section (b)(1) for adaptation activities that 

16 are— 

17 (i) consistent with the comprehensive 

18 wildlife strategy of the State and, where 

19 appropriate, other fish, wildlife and con20 servation strategies; and 

21 (ii) in accordance with a workplan de22 veloped in coordination with, as appro23 priate— 

24 (I) the Secretary of the Interior; 

25 or 


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1 (II) for any State with a coastal 

2 zone (within the meaning of the 

3 Coastal Zone Management Act (16 

4 U.S.C. 1451 et seq.)), by the Sec5 retary of Commerce, subject to the 

6 condition that approval by the Sec7 retary of Commerce shall be required 

8 only for those portions of the strategy 

9 relating to activities affecting the 

10 coastal zone. 

11 (B) PENDING APPROVAL.—During the pe12 riod for which approval by the applicable Sec13 retary of a State strategy described in para14 graph (3) is pending, the State may continue 

15 receiving funds under subsection (b)(1) pursu16 ant to the workplan described subparagraph 

17 (A)(ii). 

18 (3) REQUIREMENTS.—A State strategy shall— 

19 (A) describe the impacts of climate change 

20 and ocean acidification on the diversity and 

21 health of the fish, wildlife and plant popu22 lations, habitats, and associated ecological proc23 esses; 


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1 (B) describe and prioritize proposed con2 servation actions to assist fish, wildlife, and 

3 plant populations in adapting to those impacts; 

4 (C) establish programs for monitoring the 

5 impacts of climate change on fish, wildlife, and 

6 plant populations, habitats, and associated eco7 logical processes; 

8 (D) include strategies, specific conservation 

9 actions, and a timeframe for implementing con10 servation actions for fish, wildlife, and plant 

11 populations, habitats, and associated ecological 

12 processes; 

13 (E) establish methods for assessing the ef14 fectiveness of conservation actions taken to as15 sist fish, wildlife, and plant populations, habi16 tats, and associated ecological processes in 

17 adapting to those impacts and for updating 

18 those actions to respond appropriately to new 

19 information or changing conditions; 

20 (F) be developed— 

21 (i) with the participation of the State 

22 fish and wildlife agency, the State agency 

23 responsible for administration of Land and 

24 Water Conservation Fund grants, the 


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1 State Forest Legacy program coordinator, 

2 and the State coastal agency; and 

3 (ii) in coordination with the Secretary 

4 of the Interior and, where applicable, the 

5 Secretary of Commerce; 

6 (G) provide for solicitation and consider7 ation of public and independent scientific input; 

8 (H) take into consideration research and 

9 information contained in, and coordinate with 

10 and integrate the goals and measures identified 

11 in, as appropriate, other fish, wildlife, and habi12 tat conservation strategies, including— 

13 (i) the national fish habitat action 

14 plan; 

15 (ii) plans under the North American 

16 Wetlands Conservation Act (16 U.S.C. 

17 4401 et seq.); 

18 (iii) the Federal, State, and local part19 nership known as ‘‘Partners in Flight’’; 

20 (iv) federally approved coastal zone 

21 management plans under the Coastal Zone 

22 Management Act of 1972 (16 U.S.C. 1451 

23 et seq.); 

24 (v) federally approved regional fishery 

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1 tion activities under the Magnuson Fishery 

2 Conservation and Management Act (16 

3 U.S.C. 1801 et seq.); 

4 (vi) the national coral reef action 

5 plan; 

6 (vii) recovery plans for threatened 

7 species and endangered species under sec8 tion 4(f) of the Endangered Species Act of 

9 1973 (16 U.S.C. 1533(f)); 

10 (viii) habitat conservation plans under 

11 section 10 of that Act (16 U.S.C. 1539); 

12 (ix) other Federal and State plans for 

13 imperiled species; 

14 (x) the United States shorebird con15 servation plan; 

16 (xi) the North American waterbird 

17 conservation plan; and 

18 (xii) other State-based strategies that 

19 comprehensively implement adaptation ac20 tivities to remediate the effects of climate 

21 change and ocean acidification on fish, 

22 wildlife, and habitats; and 

23 (I) be incorporated into a revision of the 

24 comprehensive wildlife conservation strategy of 

25 a State— 


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1 (i) that has been submitted to the 

2 United States Fish and Wildlife Service; 

3 and 

4 (ii)(I) that has been approved by the 

5 Service; or 

6 (II) on which a decision on approval is 

7 pending. 

8 (4) UPDATING.—Each State strategy described 

9 in paragraph (3) shall be updated at least every 5 

10 years. 

11 Subtitle H—International Climate 

12 Change Adaptation and Na13 tional Security Program 

14 SEC. 4801. FINDINGS. 

15 Congress finds that— 

16 (1) global climate change represents a poten17 tially significant threat multiplier for instability 

18 around the world as changing precipitation patterns 

19 may exacerbate competition and conflict over agri20 cultural, vegetative, and water resources and dis21 place people, thus increasing hunger and poverty 

22 and causing increased pressure on least developed 

23 countries; 

24 (2) the strategic, social, political, and economic 

25 consequences of global climate change could have 


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1 disproportionate impacts on least developed coun2 tries, which have fewer resources and thus, often 

3 fewer emissions; 

4 (3) the strategic, social, political, and economic 

5 consequences of global climate change are likely to 

6 have a greater adverse effect on less developed coun7 tries; 

8 (4) the consequences of global climate change 

9 could pose a danger to the security interest and eco10 nomic interest of the United States; and 

11 (5) it is in the national security interest of the 

12 United States to recognize, plan for, and mitigate 

13 the international strategic, social, political, and eco14 nomic effects of a changing climate. 

15 SEC. 4802. PURPOSES. 

16 The purposes of this subtitle are— 

17 (1) to protect the national security of the 

18 United States where such interest can be advanced 

19 by minimizing, averting, or increasing resilience to 

20 potentially destabilizing climate change impacts; 

21 (2) to support the development of national and 

22 regional climate change adaptation plans in least de23 veloped countries; 

24 (3) to support the deployment of technologies 

25 that would help least developed countries reduce 


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1 their greenhouse gas emissions and respond to de2 stabilizing impacts of climate change; 

3 (4) to provide assistance to least-developed 

4 countries and small island developing states with na5 tional or regional climate change adaptation plans in 

6 the planning, financing, and execution of adaptation 

7 projects; 

8 (5) to support investments and capital to re9 duce vulnerability related to climate change and its 

10 impacts, including but not limited to drought, fam11 ine, floods, sea level rise, shifts in agricultural zones 

12 or seasons, shifts in range that affect economic live13 lihoods, and refugees and internally displaced per14 sons; 

15 (6) to support climate change adaptation re16 search in or for least developed countries; and 

17 (7) to encourage the identification and adoption 

18 of appropriate low-carbon and efficient energy tech19 nologies in least-developed countries. 

20 SEC. 4803. ESTABLISHMENT. 

21 (a) ESTABLISHMENT OF PROGRAM.—The Secretary 

22 of State, working with the Administrator of the U.S. 

23 Agency for International Development (referred to in this 

24 subtitle as the ‘‘Agency’’) and the Administrator, shall esVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00221 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 tablish an International Climate Change Adaptation and 

2 National Security Program within the Agency. 

3 (b) RESPONSIBILITIES OF PROGRAM.—The Program 

4 shall— 

5 (1) submit annual reports to the President, the 

6 Committees on Environment and Public Works and 

7 Foreign Relations of the Senate, and the Commit8 tees on Energy and Commerce and Foreign Rela9 tions of the House of Representatives, and any other 

10 relevant committees on national security, the econ11 omy and foreign policy, that describe— 

12 (A) the extent to which other countries are 

13 committing to reducing greenhouse gas emis14 sions through mandatory programs; 

15 (B) the extent to which global climate 

16 change, through its potential negative impacts 

17 on sensitive populations and natural resources 

18 in least developed countries, may threaten, 

19 cause, or exacerbate political instability or 

20 international conflict in those regions; and 

21 (C) the ramifications of any potentially de22 stabilizing impacts climate change may have on 

23 the economic and national security of the 

24 United States, including— 

25 (i) the creation of refugees; and 


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1 (ii) international or internal armed 

2 conflicts over water, food, land, or other 

3 resources; 

4 (2) include in each annual report submitted 

5 under paragraph (1) a description of how funds 

6 made available under section 4804 were spent to en7 hance the national security of the United States and 

8 assist in avoiding the politically destabilizing impacts 

9 of climate change in volatile regions of the world, 

10 particularly least developed countries; and 

11 (3) identify and recommend the countries in 

12 which assistance can have the greatest and most 

13 sustainable benefit to reducing vulnerability to cli14 mate change, primarily in the form of deploying ad15 aptation and greenhouse gas reduction technologies. 

16 SEC. 4804. FUNDING. 

17 (a) CARRYING OUT RECOMMENDATIONS.—All funds 

18 deposited into the Climate Change and National Security 

19 Fund established by section 4101(4) shall be made avail20 able, without further appropriation or fiscal year limita21 tion, to carry out the program established under this sub22 title. 

23 (b) DISTRIBUTION OF FUNDS.—The Administrator 

24 of the Agency shall distribute to the International Climate 


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1 Change Adaptation and National Security Program the 

2 funds for the purposes described in section 4802. 

3 (c) OVERSIGHT.—The Administrator of the Agency 

4 shall oversee the expenditures by the Program. 

5 (d) LIMITATIONS.—Not more than 10 percent of 

6 amounts made available to carry out this subtitle shall be 

7 spent in any single country in any year. 

8 Subtitle I—Emergency Firefighting 

9 Programs 

10 SEC. 4901. FINDINGS. 

11 Congress finds that— 

12 (1) since 1980, wildfires in the United States 

13 have burned almost twice as many acres per year on 

14 average than the average burned acreage during the 

15 period beginning on January 1, 1920, and ending on 

16 December 31, 1979; 

17 (2) the wildfire season in the western United 

18 States has increased by an average of 78 days dur19 ing the 30-year period preceding the date of enact20 ment of this Act; 

21 (3) researchers predict that the area subject to 

22 wildfire damage will increase during the 21st cen23 tury by up to 118 percent as a result of climate 

24 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 SEC. 4902. BUREAU OF LAND MANAGEMENT EMERGENCY 

12 FIREFIGHTING PROGRAM. 

13 (a) USE OF FUNDS.—The amounts deposited into the 

14 Bureau of Land Management Emergency Firefighting 

15 Fund established by section 4101(5) shall be made avail16 able, without further appropriation or fiscal year limita17 tion, to pay for wildland fire suppression activities the 

18 costs of which are in excess of amounts annually appro19 priated to the Secretary of the Interior for normal, non20 emergency wildland fire suppression activities. 

21 (b) ACCOUNTING AND REPORTING.— 

22 (1) IN GENERAL.—Not later than 3 years after 

23 the date of enactment of this Act, the Secretary of 

24 the Interior shall establish an accounting and report25 ing system, in accordance and compatible with NaVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00225 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 tional Fire Plan reporting procedures, for the activi2 ties carried out under this section. 

3 (2) REQUIREMENT.—The system established 

4 under paragraph (1) shall require that the Secretary 

5 of the Interior shall submit to the Committee on 

6 Natural Resources of the House of Representatives 

7 and the Committee on Energy and Natural Re8 sources of the Senate— 

9 (A) a monthly report describing each ex10 penditure made from the Bureau of Land Man11 agement Emergency Firefighting Fund during 

12 the preceding month; and 

13 (B) a report at the end of each fiscal year 

14 describing the expenditures made from the Bu15 reau of Land Management Emergency Fire16 fighting Fund during the preceding fiscal year. 

17 SEC. 4903. FOREST SERVICE EMERGENCY FIREFIGHTING 

18 PROGRAM. 

19 (a) USE OF FUNDS.—The amounts deposited into the 

20 Forest Service Emergency Firefighting Fund established 

21 by section 4101(6) shall be made available, without fur22 ther appropriation or fiscal year limitation, to pay for 

23 wildland fire suppression activities the costs of which are 

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1 retary of Agriculture for normal, nonemergency wildland 

2 fire suppression activities. 

3 (b) ACCOUNTING AND REPORTING.— 

4 (1) IN GENERAL.—Not later than 3 years after 

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

6 Agriculture shall establish an accounting and report7 ing system, in accordance and compatible with Na8 tional Fire Plan reporting procedures, for the activi9 ties carried out under this section. 

10 (2) REQUIREMENT.—The system established 

11 under paragraph (1) shall require that the Secretary 

12 of Agriculture shall submit to the Committee on 

13 Natural Resources of the House of Representatives 

14 and the Committee on Energy and Natural Re15 sources of the Senate— 

16 (A) a monthly report describing each ex17 penditure made from the Forest Service Emer18 gency Firefighting Fund during the preceding 

19 month; and 

20 (B) a report at the end of each fiscal year 

21 describing the expenditures made from the For22 est Service Emergency Firefighting Fund dur23 ing the preceding fiscal year. 


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1 TITLE V—ENERGY EFFICIENCY 

2 Subtitle A—Appliance Efficiency 

3 SEC. 5101. RESIDENTIAL BOILERS. 

4 Section 325(f) of the Energy Policy and Conservation 

5 Act (42 U.S.C. 6925(f)) is amended— 

6 (1) in the subsection heading, by inserting 

7 ‘‘AND BOILERS’’ after ‘‘FURNACES’’; 

8 (2) in paragraph (1), by striking ‘‘except that’’ 

9 and all that follows through subparagraph (A) and 

10 inserting ‘‘except that’’; 

11 (3) in subparagraph (B)— 

12 (A) by striking ‘‘(B) the Secretary’’ and 

13 inserting ‘‘the Secretary’’; and 

14 (B) by redesignating clauses (i) through 

15 (iii) as subparagraphs (A) through (C), respec16 tively, and indenting appropriately; 

17 (4) by redesignating paragraph (3) as para18 graph (4); and 

19 (5) by inserting after paragraph (2) the fol20 lowing: 

21 ‘‘(3) BOILERS.— 

22 ‘‘(A) IN GENERAL.—Subject to subpara23 graphs (B) and (C), boilers manufactured on or 

24 after September 1, 2012, shall meet the fol25 lowing requirements: 


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‘‘Boiler Type Requirements 

Minimum 

Annual Fuel 

Utilization 

Efficiency 

Design 

Gas hot water ........................... 82 percent No constant burning pilot, 

automatic means for adjusting water temperature 

Gas steam ................................. 80 percent No constant burning pilot 

Oil hot water ............................ 84 percent Automatic means for adjusting 

temperature 

Oil steam .................................. 82 percent None 

Electric hot water ..................... None Automatic means for adjusting 

temperature 

Electric steam ........................... None None 

1 ‘‘(B) AUTOMATIC MEANS FOR ADJUSTING

2 WATER TEMPERATURE.— 

3 ‘‘(i) IN GENERAL.—The manufacturer 

4 shall equip each gas, oil, and electric hot 

5 water boiler (other than a boiler equipped 

6 with tankless domestic water heating coils) 

7 with an automatic means for adjusting the 

8 temperature of the water supplied by the 

9 boiler to ensure that an incremental 

10 change in inferred heat load produces a 

11 corresponding incremental change in the 

12 temperature of water supplied. 

13 ‘‘(ii) CERTAIN BOILERS.—For a boiler 

14 that fires at 1 input rate, the requirements 

15 of this subparagraph may be satisfied by 

16 providing an automatic means that allows 

17 the burner or heating element to fire only 

18 when the means has determined that the 


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1 inferred heat load cannot be met by the re2 sidual heat of the water in the system. 

3 ‘‘(iii) NO INFERRED HEAT LOAD.— 

4 When there is no inferred heat load with 

5 respect to a hot water boiler, the automatic 

6 means described in clauses (i) and (ii) 

7 shall limit the temperature of the water in 

8 the boiler to not more than 140 degrees 

9 Fahrenheit. 

10 ‘‘(iv) OPERATION.—A boiler described 

11 in clause (i) or (ii) shall be operable only 

12 when the automatic means described in 

13 clauses (i), (ii), and (iii) is installed. 

14 ‘‘(C) EXCEPTION.—A boiler that is manu15 factured to operate without any need for elec16 tricity, any electric connection, any electric 

17 gauges, electric pumps, electric wires, or electric 

18 devices of any sort, shall not be required to 

19 meet the requirements of this subsection.’’. 

20 SEC. 5102. REGIONAL VARIATIONS IN HEATING OR COOL21 ING STANDARDS. 

22 (a) IN GENERAL.—Section 327 of the Energy Policy 

23 and Conservation Act (42 U.S.C. 6297) is amended— 

24 (1) by redesignating subsections (e), (f), and 

25 (g) as subsections (f), (g), and (h), respectively; and 


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1 (2) by inserting after subsection (d) the fol2 lowing: 

3 ‘‘(e) REGIONAL STANDARDS FOR SPACE HEATING

4 AND AIR CONDITIONING PRODUCTS.— 

5 ‘‘(1) STANDARDS.— 

6 ‘‘(A) IN GENERAL.—The Secretary may es7 tablish regional standards for space heating and 

8 air conditioning products, other than window9 unit air-conditioners and portable space heaters. 

10 ‘‘(B) NATIONAL MINIMUM AND REGIONAL

11 STANDARDS.—For each space heating and air 

12 conditioning product, the Secretary may estab13 lish— 

14 ‘‘(i) a national minimum standard; 

15 and 

16 ‘‘(ii) 2 more stringent regional stand17 ards for regions determined to have signifi18 cantly differing climatic conditions. 

19 ‘‘(C) MAXIMUM SAVINGS.—Any standards 

20 established for a region under subparagraph 

21 (B)(ii) shall achieve the maximum level of en22 ergy savings that are technically feasible and 

23 economically justified within that region. 

24 ‘‘(D) ECONOMIC JUSTIFIABILITY STUDY.— 


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1 ‘‘(i) IN GENERAL.—As a preliminary 

2 step in determining the economic justifi3 ability of establishing a regional standard 

4 under subparagraph (B)(ii), the Secretary 

5 shall conduct a study involving stake6 holders, including— 

7 ‘‘(I) a representative from the 

8 National Institute of Standards and 

9 Technology; 

10 ‘‘(II) representatives of non11 governmental advocacy organizations; 

12 ‘‘(III) representatives of product 

13 manufacturers, distributors, and in14 stallers; 

15 ‘‘(IV) representatives of the gas 

16 and electric utility industries; and 

17 ‘‘(V) such other individuals as 

18 the Secretary may designate. 

19 ‘‘(ii) REQUIREMENTS.—The study 

20 under this subparagraph— 

21 ‘‘(I) shall determine the potential 

22 benefits and consequences of pre23 scribing regional standards for heat24 ing and cooling products; and 


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1 ‘‘(II) may, if favorable to the 

2 standards, constitute the evidence of 

3 economic justifiability required under 

4 this Act. 

5 ‘‘(E) REGIONAL BOUNDARIES.—Regional 

6 boundaries used in establishing regional stand7 ards under subparagraph (B)(ii) shall— 

8 ‘‘(i) conform to State borders; and 

9 ‘‘(ii) include only contiguous States 

10 (other than Alaska and Hawaii), except 

11 that on the request of a State, the Sec12 retary may divide the State to include a 

13 part of the State in each of 2 regions. 

14 ‘‘(2) NONCOMPLYING PRODUCTS.—If the Sec15 retary establishes standards for a region, it shall be 

16 unlawful under section 332 to offer for sale at retail, 

17 sell at retail, or install within the region products 

18 that do not comply with the applicable standards. 

19 ‘‘(3) DISTRIBUTION IN COMMERCE.— 

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

21 subparagraph (B), no product manufactured in 

22 a manner that complies with a regional stand23 ard established under paragraph (1) shall be 

24 distributed in commerce without a prominent 

25 label affixed to the product that includes— 


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1 ‘‘(i) at the top of the label, in print of 

2 not less than 14-point type, the following 

3 statement: ‘It is a violation of Federal law 

4 for this product to be installed in any 

5 State outside the region shaded on the 

6 map printed on this label.’; 

7 ‘‘(ii) below the notice described in 

8 clause (i), an image of a map of the United 

9 States with clearly defined State bound10 aries and names, and with all States in 

11 which the product meets or exceeds the 

12 standard established pursuant to para13 graph (1) shaded in a color or a manner 

14 as to be easily visible without obscuring the 

15 State boundaries and names; and 

16 ‘‘(iii) below the image of the map re17 quired under clause (ii), the following 

18 statement: ‘It is a violation of Federal law 

19 for this label to be removed, except by the 

20 owner and legal resident of any single-fam21 ily home in which this product is in22 stalled.’. 

23 ‘‘(B) ENERGY-EFFICIENCY RATING.—A 

24 product manufactured that meets or exceeds all 

25 regional standards established under this paraVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00234 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 graph shall bear a prominent label affixed to 

2 the product that includes at the top of the label, 

3 in print of not less than 14-point type, the fol4 lowing statement: ‘This product has achieved an 

5 energy-efficiency rating under Federal law al6 lowing its installation in any State.’. 

7 ‘‘(4) RECORDKEEPING.—A manufacturer of 

8 space heating or air conditioning equipment subject 

9 to regional standards established under this sub10 section shall— 

11 ‘‘(A) obtain and retain records on the in12 tended installation locations of the equipment 

13 sold; and 

14 ‘‘(B) make such records available to the 

15 Secretary on request.’’. 

16 (b) CONFORMING AMENDMENTS.—Section 327 of the 

17 Energy Policy and Conservation Act (42 U.S.C. 6297) is 

18 amended— 

19 (1) in subsection (b)— 

20 (A) in paragraph (2), by striking ‘‘sub21 section (e)’’ and inserting ‘‘subsection (f)’’; and 

22 (B) in paragraph (3)— 

23 (i) by striking ‘‘subsection (f)(1)’’ and 

24 inserting ‘‘subsection (g)(1)’’; and 


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1 (ii) by striking ‘‘subsection (f)(2)’’ 

2 and inserting ‘‘subsection (g)(2)’’; and 

3 (2) in subsection (c)(3), by striking ‘‘subsection 

4 (f)(3)’’ and inserting ‘‘subsection (g)(3)’’. 

5 Subtitle B—Building Efficiency 

6 SEC. 5201. UPDATING STATE BUILDING ENERGY EFFI7 CIENCY CODES. 

8 Section 304 of the Energy Conservation and Produc9 tion Act (42 U.S.C. 6833) is amended to read as follows: 

10 ‘‘SEC. 304. UPDATING STATE BUILDING ENERGY EFFI11 CIENCY CODES. 

12 ‘‘(a) UPDATES.— 

13 ‘‘(1) IN GENERAL.—The Secretary shall sup14 port updating the national model building energy 

15 codes and standards not later than 3 years after the 

16 date of enactment of the Lieberman-Warner Climate 

17 Security Act of 2008, and not less frequently every 

18 3 years thereafter, to achieve overall energy savings, 

19 as compared to the IECC (2006) for residential 

20 buildings and ASHRAE Standard 90.1 (2004) for 

21 commercial buildings, of at least— 

22 ‘‘(A) 30 percent, with respect to each edi23 tion of a model code or standard published dur24 ing the period beginning on January 1, 2010, 

25 and ending on December 31, 2019; 


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1 ‘‘(B) 50 percent, with respect to each edi2 tion of a model code or standard published on 

3 or after January 1, 2020; and 

4 ‘‘(C) targets for intermediate and subse5 quent years, to be established by the Secretary 

6 not less than 3 years before the beginning on 

7 each target year, in coordination with IECC 

8 and ASHRAE Standard 90.1 cycles, at the 

9 maximum level of energy efficiency that is tech10 nologically feasible and lifecycle cost-effective. 

11 ‘‘(2) REVISIONS TO IECC AND ASHRAE.— 

12 ‘‘(A) IN GENERAL.—If the IECC or 

13 ASHRAE Standard 90.1 regarding building en14 ergy use is revised, not later than 1 year after 

15 the date of the revision, the Secretary shall de16 termine whether the revision will— 

17 ‘‘(i) improve energy efficiency in 

18 buildings; and 

19 ‘‘(ii) meet the energy savings goals de20 scribed in paragraph (1). 

21 ‘‘(B) MODIFICATIONS.— 

22 ‘‘(i) IN GENERAL.—If the Secretary 

23 makes a determination under subpara24 graph (A)(ii) that a code or standard does 

25 not meet the energy savings goals estabVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00237 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 lished under paragraph (1) or if a national 

2 model code or standard is not updated for 

3 more than 3 years, not later than 1 year 

4 after the determination or the expiration of 

5 the 3-year period, the Secretary shall es6 tablish a modified code or standard that 

7 meets the energy savings goals. 

8 ‘‘(ii) REQUIREMENTS.— 

9 ‘‘(I) ENERGY SAVINGS.—A modi10 fication to a code or standard under 

11 clause (i) shall— 

12 ‘‘(aa) achieve the maximum 

13 level of energy savings that is 

14 technically feasible and lifecycle 

15 cost-effective; 

16 ‘‘(bb) be achieved through 

17 an amendment or supplement to 

18 the most recent revision of the 

19 IECC or ASHRAE Standard 

20 90.1 and taking into consider21 ation other appropriate model 

22 codes and standards; and 

23 ‘‘(cc) incorporate available 

24 appliances, technologies, and con25 struction practices. 


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1 ‘‘(II) TREATMENT AS BASE2 LINE.—A modification to a code or 

3 standard under clause (i) shall serve 

4 as the baseline for the next applicable 

5 determination of the Secretary under 

6 subparagraph (A)(i). 

7 ‘‘(C) PUBLIC PARTICIPATION.—The Sec8 retary shall— 

9 ‘‘(i) publish in the Federal Register a 

10 notice relating to each goal, determination, 

11 and modification under this paragraph; 

12 and 

13 ‘‘(ii) provide an opportunity for public 

14 comment regarding the goals, determina15 tions, and modifications. 

16 ‘‘(b) STATE CERTIFICATION OF BUILDING ENERGY

17 CODE UPDATES.— 

18 ‘‘(1) GENERAL CERTIFICATION.— 

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

20 after the date of enactment of the Lieberman21 Warner Climate Security Act of 2008, each 

22 State shall certify to the Secretary that the 

23 State has reviewed and updated the provisions 

24 of the residential and commercial building codes 

25 of the State regarding energy efficiency. 


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1 ‘‘(B) ENERGY SAVINGS.—A certification 

2 under subparagraph (A) shall include a dem3 onstration that the applicable provisions of the 

4 State code meet or exceed, as applicable— 

5 ‘‘(i)(I) the IECC (2006) for residen6 tial buildings; or 

7 ‘‘(II) the ASHRAE Standard 90.1 

8 (2004) for commercial buildings; or 

9 ‘‘(ii) the quantity of energy savings 

10 represented by the provisions referred to in 

11 clause (i). 

12 ‘‘(2) REVISION OF CODES AND STANDARDS.— 

13 ‘‘(A) IN GENERAL.—If the Secretary 

14 makes an affirmative determination under sub15 section (a)(2)(A)(i) or establishes a modified 

16 code or standard under subsection (a)(2)(B), 

17 not later than 2 years after the determination 

18 or proposal, each State shall certify that the 

19 State has reviewed and updated the provisions 

20 of the residential and commercial building codes 

21 of the State regarding energy efficiency. 

22 ‘‘(B) ENERGY SAVINGS.—A certification 

23 under subparagraph (A) shall include a dem24 onstration that the applicable provisions of the 

25 State code meet or exceed— 


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1 ‘‘(i) the modified code or standard; or 

2 ‘‘(ii) the quantity of energy savings 

3 represented by the modified code or stand4 ard. 

5 ‘‘(C) FAILURE TO DETERMINE.—If the 

6 Secretary fails to make a determination under 

7 subsection (a)(2)(A)(i) by the date specified in 

8 subsection (a)(2), or if the Secretary makes a 

9 negative determination, not later than 2 years 

10 after the specified date or the date of the deter11 mination, each State shall certify that the State 

12 has— 

13 ‘‘(i) reviewed the revised code or 

14 standard; and 

15 ‘‘(ii) updated the provisions of the res16 idential and commercial building codes of 

17 the State as necessary to meet or exceed, 

18 as applicable— 

19 ‘‘(I) any provisions of a national 

20 code or standard determined to im21 prove energy efficiency in buildings; or 

22 ‘‘(II) energy savings achieved by 

23 those provisions through other means. 

24 ‘‘(c) ACHIEVEMENT OF COMPLIANCE BY STATES.— 


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1 ‘‘(1) IN GENERAL.—Not later than 3 years 

2 after the date on which a State makes a certification 

3 under subsection (b), the State shall certify to the 

4 Secretary that the State has achieved compliance 

5 with the building energy code that is the subject of 

6 the certification. 

7 ‘‘(2) RATE OF COMPLIANCE.—The certification 

8 shall include documentation of the rate of compli9 ance based on independent inspections of a random 

10 sample of the new and renovated buildings covered 

11 by the State code during the preceding calendar 

12 year. 

13 ‘‘(3) COMPLIANCE.—A State shall be considered 

14 to achieve compliance for purposes of paragraph (1) 

15 if— 

16 ‘‘(A) at least 90 percent of new and ren17 ovated buildings covered by the State code dur18 ing the preceding calendar year substantially 

19 meet all the requirements of the code; or 

20 ‘‘(B) the estimated excess energy use of 

21 new and renovated buildings that did not meet 

22 the requirements of the State code during the 

23 preceding calendar year, as compared to a base24 line of comparable buildings that meet the re25 quirements of the code, is not more than 10 


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1 percent of the estimated energy use of all new 

2 and renovated buildings covered by the State 

3 code during the preceding calendar year. 

4 ‘‘(d) FAILURE TO CERTIFY.— 

5 ‘‘(1) EXTENSION OF DEADLINES.—The Sec6 retary shall extend a deadline for certification by a 

7 State under subsection (b) or (c) for not more than 

8 1 additional year, if the State demonstrates to the 

9 satisfaction of the Secretary that the State has 

10 made— 

11 ‘‘(A) a good faith effort to comply with the 

12 certification requirement; and 

13 ‘‘(B) significant progress with respect to 

14 the compliance. 

15 ‘‘(2) NONCOMPLIANCE BY STATE.— 

16 ‘‘(A) IN GENERAL.—A State that fails to 

17 submit a certification required under subsection 

18 (b) or (c), and to which an extension is not pro19 vided under paragraph (1), shall be considered 

20 to be out of compliance with this section. 

21 ‘‘(B) EFFECT ON LOCAL GOVERNMENTS.— 

22 A local government of a State that is out of 

23 compliance with this section may be considered 

24 to be in compliance with this section if the local 


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1 government meets each applicable certification 

2 requirement of this section. 

3 ‘‘(e) TECHNICAL ASSISTANCE.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall provide 

5 technical assistance (including building energy anal6 ysis and design tools, building demonstrations, and 

7 design assistance and training) to ensure that na8 tional model building energy codes and standards 

9 meet the goals described in subsection (a)(1). 

10 ‘‘(2) ASSISTANCE TO STATES.—The Secretary 

11 shall provide technical assistance to States— 

12 ‘‘(A) to implement this section, including 

13 procedures for States to demonstrate that the 

14 codes of the States achieve equivalent or great15 er energy savings than the national model codes 

16 and standards; 

17 ‘‘(B) to improve and implement State resi18 dential and commercial building energy effi19 ciency codes; and 

20 ‘‘(C) to otherwise promote the design and 

21 construction of energy-efficient buildings. 

22 ‘‘(f) INCENTIVE FUNDING.— 

23 ‘‘(1) IN GENERAL.—The Secretary shall provide 

24 incentive funding to States— 

25 ‘‘(A) to implement this section; and 


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1 ‘‘(B) to improve and implement State resi2 dential and commercial building energy effi3 ciency codes, including increasing and verifying 

4 compliance with the codes. 

5 ‘‘(2) AMOUNT.—In determining whether, and in 

6 what amount, to provide incentive funding under 

7 this subsection, the Secretary shall take into consid8 eration actions proposed by the State— 

9 ‘‘(A) to implement this section; 

10 ‘‘(B) to implement and improve residential 

11 and commercial building energy efficiency 

12 codes; and 

13 ‘‘(C) to promote building energy efficiency 

14 through use of the codes. 

15 ‘‘(3) ADDITIONAL FUNDING.—The Secretary 

16 shall provide additional funding under this sub17 section for implementation of a plan to demonstrate 

18 a rate of compliance with applicable residential and 

19 commercial building energy efficiency codes at a rate 

20 of not less than 90 percent, based on energy per21 formance— 

22 ‘‘(A) to a State that has adopted and is 

23 implementing, on a statewide basis— 

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1 quirements of the IECC (2006) (or a suc2 cessor code that is the subject of an af3 firmative determination by the Secretary 

4 under subsection (a)(2)(A)(i)); and 

5 ‘‘(ii) a commercial building energy ef6 ficiency code that meets or exceeds the re7 quirements of the ASHRAE Standard 90.1 

8 (2004) (or a successor standard that is the 

9 subject of an affirmative determination by 

10 the Secretary under subsection 

11 (a)(2)(A)(i)); or 

12 ‘‘(B) in the case of a State in which no 

13 statewide energy code exists for residential 

14 buildings or commercial buildings, or in which 

15 the State code fails to comply with subpara16 graph (A), to a local government that has 

17 adopted and is implementing residential and 

18 commercial building energy efficiency codes, as 

19 described in subparagraph (A). 

20 ‘‘(4) TRAINING.—Of the amounts made avail21 able to carry out this subsection, the Secretary may 

22 use not more than $500,000 for each State to train 

23 State and local officials to implement State or local 

24 energy codes in accordance with a plan described in 

25 paragraph (3).’’. 


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1 SEC. 5202. CONFORMING AMENDMENT. 

2 Section 303 of the Energy Conservation and Produc3 tion Act (42 U.S.C. 6832) is amended by adding at the 

4 end the following new paragraph: 

5 ‘‘(17) IECC.—The term ‘IECC’ means the 

6 International Energy Conservation Code.’’. 

7 TITLE VI—GLOBAL EFFORT TO 

8 REDUCE GREENHOUSE GAS 

9 EMISSIONS 

10 SEC. 6001. DEFINITIONS. 

11 In this title: 

12 (1) BASELINE EMISSION LEVEL.—The term 

13 ‘‘baseline emission level’’ means, as determined by 

14 the Administrator, the total average annual green15 house gas emissions attributed to a category of cov16 ered goods of a foreign country during the period be17 ginning on January 1, 2012, and ending on Decem18 ber 31, 2014, based on— 

19 (A) relevant data available for that period; 

20 and 

21 (B) to the extent necessary with respect to 

22 a specific category of covered goods, economic 

23 and engineering models and best available infor24 mation on technology performance levels for the 

25 manufacture of that category of covered goods. 


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1 (2) COMPARABLE ACTION.—The term ‘‘com2 parable action’’ means any greenhouse gas regu3 latory programs, requirements, and other measures 

4 adopted by a foreign country that, in combination, 

5 are comparable in effect to actions carried out by 

6 the United States to limit greenhouse gas emissions 

7 pursuant to this Act, as determined by the Presi8 dent, taking into consideration the level of economic 

9 development of the foreign country. 

10 (3) COMPLIANCE YEAR.—The term ‘‘compliance 

11 year’’ means each calendar year for which the re12 quirements of this title apply to a category of cov13 ered goods of a covered foreign country that is im14 ported into the United States. 

15 (4) COVERED FOREIGN COUNTRY.—The term 

16 ‘‘covered foreign country’’ means a foreign country 

17 that is included on the covered list prepared under 

18 section 6006(b)(3). 

19 (5) COVERED GOOD.—The term ‘‘covered good’’ 

20 means a good that (as identified by the Adminis21 trator by rule)— 

22 (A) is a primary product; 

23 (B) generates, in the course of the manu24 facture of the good, a substantial quantity of 


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1 direct greenhouse gas emissions and indirect 

2 greenhouse gas emissions; and 

3 (C) is closely related to a good the cost of 

4 production of which in the United States is af5 fected by a requirement of this Act. 

6 (6) FOREIGN COUNTRY.—The term ‘‘foreign 

7 country’’ means a member of, or observer govern8 ment to, the World Trade Organization (WTO), 

9 other than the United States. 

10 (7) INDIRECT GREENHOUSE GAS EMISSIONS.— 

11 The term ‘‘indirect greenhouse gas emissions’’ 

12 means any emissions of a greenhouse gas resulting 

13 from the generation of electricity that is consumed 

14 during the manufacture of a good. 

15 (8) INTERNATIONAL AGREEMENT.—The term 

16 ‘‘international agreement’’ means any international 

17 agreement to which the United States is a party, in18 cluding the Marrakesh agreement establishing the 

19 World Trade Organization, done at Marrakesh on 

20 April 15, 1994. 

21 (9) INTERNATIONAL RESERVE ALLOWANCE.— 

22 The term ‘‘international reserve allowance’’ means 

23 an allowance (denominated in units of metric tons of 

24 carbon dioxide equivalent) that is— 


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1 (A) purchased from a special reserve of al2 lowances pursuant to section 6006(a)(2); and 

3 (B) used for purposes of meeting the re4 quirements of section 6006. 

5 (10) PRIMARY PRODUCT.—The term ‘‘primary 

6 product’’ means— 

7 (A) iron, steel, aluminum, cement, bulk 

8 glass, or paper; or 

9 (B) any other manufactured product 

10 that— 

11 (i) is sold in bulk for purposes of fur12 ther manufacture; and 

13 (ii) generates, in the course of the 

14 manufacture of the product, direct green15 house gas emissions and indirect green16 house gas emissions that are comparable 

17 (on an emissions-per-dollar basis) to emis18 sions generated in the manufacture of 

19 products by covered facilities in the indus20 trial sector. 

21 SEC. 6002. PURPOSES. 

22 The purposes of this title are— 

23 (1) to promote a strong global effort to signifi24 cantly reduce greenhouse gas emissions; 


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1 (2) to ensure, to the maximum extent prac2 ticable, that greenhouse gas emissions occurring out3 side the United States do not undermine the objec4 tives of the United States in addressing global cli5 mate change; and 

6 (3) to encourage effective international action 

7 to achieve those objectives through— 

8 (A) agreements negotiated between the 

9 United States and foreign countries; and 

10 (B) measures carried out by the United 

11 States that comply with applicable international 

12 agreements. 

13 SEC. 6003. INTERNATIONAL NEGOTIATIONS. 

14 (a) FINDING.—Congress finds that the purposes de15 scribed in section 6002 can be most effectively addressed 

16 and achieved through agreements negotiated between the 

17 United States and foreign countries. 

18 (b) NEGOTIATING OBJECTIVE.— 

19 (1) STATEMENT OF POLICY.—It is the policy of 

20 the United States to work proactively under the 

21 United Nations Framework Convention on Climate 

22 Change and, in other appropriate forums, to estab23 lish binding agreements committing all major green24 house gas-emitting nations to contribute equitably to 

25 the reduction of global greenhouse gas emissions. 


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1 (2) INTENT OF CONGRESS REGARDING OBJEC2 TIVE.—To the extent that the agreements described 

3 in subsection (a) involve measures that will affect 

4 international trade in any good or service, it is the 

5 intent of Congress that the negotiating objective of 

6 the United States shall be to focus multilateral and 

7 bilateral international agreements on the reduction 

8 of greenhouse gas emissions to advance achievement 

9 of the purposes described in section 6002. 

10 SEC. 6004. INTERAGENCY REVIEW. 

11 (a) INTERAGENCY GROUP.— 

12 (1) ESTABLISHMENT.—The President shall es13 tablish an interagency group to carry out this sec14 tion. 

15 (2) CHAIRPERSON.—The chairperson of the 

16 interagency group established under paragraph (1) 

17 shall be the Secretary of State. 

18 (3) REQUIREMENT.—The Administrator shall 

19 be a member of the interagency group. 

20 (b) DETERMINATIONS.— 

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

22 the interagency group established under subsection 

23 (a)(1) shall determine whether, and the extent to 

24 which, each foreign country has taken comparable 


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1 action to limit the greenhouse gas emissions of the 

2 foreign country. 

3 (2) EXEMPTION.—The interagency group may 

4 exempt from a determination under paragraph (1) 

5 any foreign country on the excluded list under sec6 tion 6006(b)(2). 

7 (c) REPORT TO PRESIDENT.—Not later than Janu8 ary 1, 2018, and annually thereafter, the interagency 

9 group shall submit to the President a report describing 

10 the determinations of the interagency group under sub11 section (b). 

12 SEC. 6005. PRESIDENTIAL DETERMINATIONS. 

13 (a) IN GENERAL.—Not later than January 1, 2019, 

14 and annually thereafter, the President shall determine 

15 whether each foreign country that is subject to interagency 

16 review under section 6004(b) has taken comparable action 

17 to limit the greenhouse gas emissions of the foreign coun18 try, taking into consideration— 

19 (1) the baseline emission levels of the foreign 

20 country; and 

21 (2) applicable reports submitted under section 

22 6004(c). 

23 (b) REPORTS.—The President shall— 


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1 (1) submit to Congress an annual report de2 scribing the determinations of the President under 

3 subsection (a) for the most recent calendar year; and 

4 (2) publish the determinations in the Federal 

5 Register. 

6 SEC. 6006. INTERNATIONAL RESERVE ALLOWANCE PRO7 GRAM. 

8 (a) ESTABLISHMENT.— 

9 (1) IN GENERAL.—The Administrator shall es10 tablish a program under which the Administrator, 

11 during the 1-year period beginning on January 1, 

12 2019, and annually thereafter, shall offer for sale to 

13 United States importers international reserve allow14 ances in accordance with this subsection. 

15 (2) SOURCE.—International reserve allowances 

16 under paragraph (1) shall be issued from a special 

17 reserve of allowances that is separate from, and es18 tablished in addition to, the quantity of allowances 

19 established under section 1201. 

20 (3) PRICE.— 

21 (A) IN GENERAL.—Subject to subpara22 graph (B), the Administrator shall establish, by 

23 rule, a methodology for determining the price of 

24 international reserve allowances for each com25 pliance year at a level that does not exceed the 


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1 market price of allowances established under 

2 section 1201 for the compliance year. 

3 (B) MAXIMUM PRICE.—The price for an 

4 international reserve allowance under subpara5 graph (A) shall not exceed the clearing price for 

6 current compliance year allowances established 

7 at the most recent auction of allowances by the 

8 Corporation. 

9 (4) SERIAL NUMBER.—The Administrator shall 

10 assign a unique serial number to each international 

11 reserve allowance issued under this subsection. 

12 (5) TRADING SYSTEM.—The Administrator may 

13 establish, by rule, a system for the sale, exchange, 

14 purchase, transfer, and banking of international re15 serve allowances. 

16 (6) REGULATED ENTITIES.—International re17 serve allowances may not be submitted by regulated 

18 entities to comply with the allowance submission re19 quirements of section 1202. 

20 (7) PROCEEDS.—All proceeds from the sale of 

21 international reserve allowances under this sub22 section shall be allocated to a program that the Ad23 ministrator, in coordination with the Secretary of 

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1 pacts of global climate change on disadvantaged 

2 communities in other countries. 

3 (b) FOREIGN COUNTRY LISTS.— 

4 (1) IN GENERAL.—Not later than January 1, 

5 2020, and annually thereafter, the President shall 

6 develop and publish in the Federal Register 2 lists 

7 of foreign countries, in accordance with this sub8 section. 

9 (2) EXCLUDED LIST.— 

10 (A) IN GENERAL.—The President shall 

11 identify and publish in a list, to be known as 

12 the ‘‘excluded list’’— 

13 (i) each foreign country determined by 

14 the President under section 6005(a) to 

15 have taken action comparable to that taken 

16 by the United States to limit the green17 house gas emissions of the foreign country; 

18 and 

19 (ii) each foreign country the share of 

20 total global greenhouse gas emissions of 

21 which is below the de minimis percentage 

22 described in subparagraph (B). 

23 (B) DE MINIMIS PERCENTAGE.—The de 

24 minimis percentage referred to in subparagraph 

25 (A) is a percentage of total global greenhouse 


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1 gas emissions of not more than 0.5, as deter2 mined by the President, for the most recent cal3 endar year for which emissions and other rel4 evant data is available, taking into consider5 ation, as necessary, the annual average defor6 estation rate during a representative period for 

7 a foreign country that is a developing country. 

8 (3) COVERED LIST.— 

9 (A) IN GENERAL.—The President shall 

10 identify and publish in a list, to be known as 

11 the ‘‘covered list’’, each foreign country the cov12 ered goods of which are subject to the require13 ments of this section. 

14 (B) REQUIREMENT.—The covered list shall 

15 include each foreign country that is not in16 cluded on the excluded list under paragraph 

17 (2). 

18 (c) WRITTEN DECLARATIONS.— 

19 (1) IN GENERAL.—Effective beginning January 

20 1, 2020, a United States importer of any covered 

21 good shall, as a condition of importation or with22 drawal for consumption from a warehouse of the 

23 covered good, submit to the Administrator and the 

24 appropriate office of the U.S. Customs and Border 


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1 Protection a written declaration with respect to each 

2 such importation or withdrawal. 

3 (2) CONTENTS.—A written declaration under 

4 paragraph (1) shall contain a statement that— 

5 (A) the applicable covered good is accom6 panied by a sufficient number of international 

7 reserve allowances, as determined under sub8 section (d); or 

9 (B) the covered good is from a foreign 

10 country on the excluded list under subsection 

11 (b)(2). 

12 (3) INCLUSION.—A written declaration de13 scribed in paragraph (2)(A) shall include the unique 

14 serial number of each emission allowance associated 

15 with the importation of the applicable covered good. 

16 (4) FAILURE TO DECLARE.— 

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

18 subparagraph (B), an imported covered good 

19 that is not accompanied by a written declara20 tion under this subsection shall not be per21 mitted to enter the customs territory of the 

22 United States. 

23 (B) EXCEPTION FOR CERTAIN IMPORTS.— 

24 Subparagraph (A) shall not apply to a covered 


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1 good of a foreign country if the President deter2 mines that— 

3 (i) the foreign country has taken com4 parable action to limit the greenhouse gas 

5 emissions of the foreign country, in accord6 ance with section 6005; 

7 (ii) the United Nations has identified 

8 the foreign country as among the least-de9 veloped of developing countries; or 

10 (iii) the foreign country is on the ex11 cluded list under subsection (b)(2). 

12 (5) CORRECTED DECLARATION.— 

13 (A) IN GENERAL.—If, after making a dec14 laration required under this subsection, an im15 porter has reason to believe that the declaration 

16 contains information that is not correct, the im17 porter shall provide a corrected declaration by 

18 not later than 30 days after the date of dis19 covery of the error, in accordance with subpara20 graph (B). 

21 (B) METHOD.—A corrected declaration 

22 under subparagraph (A) shall be in the form of 

23 a letter or other written statement to the Ad24 ministrator and the office of the U.S. Customs 


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1 and Border Protection to which the original 

2 declaration was submitted. 

3 (d) QUANTITY OF ALLOWANCES REQUIRED.— 

4 (1) METHODOLOGY.— 

5 (A) IN GENERAL.—The Administrator 

6 shall establish, by rule, a method for calculating 

7 the required number of international reserve al8 lowances that a United States importer must 

9 submit, together with a written declaration 

10 under subsection (c), for each category of cov11 ered goods of each covered foreign country. 

12 (B) FORMULA.—The Administrator shall 

13 develop a general formula for calculating the 

14 international reserve allowance requirement 

15 that applies, on a per unit basis, to each cov16 ered good of a covered foreign country that is 

17 imported during each compliance year. 

18 (2) INITIAL COMPLIANCE YEAR.— 

19 (A) IN GENERAL.—Subject to subpara20 graph (B), the methodology under paragraph 

21 (1) shall establish an international reserve al22 lowance requirement (per unit imported into the 

23 United States) for the initial compliance year 

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1 ered foreign country that is equal to the 

2 quotient obtained by dividing— 

3 (i) the excess, if any, of the total 

4 emissions from the covered foreign country 

5 that are attributable to the category of 

6 covered goods produced during the most 

7 recent year for which data are available, 

8 over the baseline emission level of the cov9 ered foreign country for that category; and 

10 (ii) the total quantity of the covered 

11 good produced in the covered foreign coun12 try during the most recent calendar year. 

13 (B) ADJUSTMENTS.—The Administrator 

14 shall adjust the requirement under subpara15 graph (A)— 

16 (i) in accordance with the ratio that— 

17 (I) the quantity of allowances 

18 that were allocated at no cost to enti19 ties within the industry sector manu20 facturing the covered goods for the 

21 compliance year during which the cov22 ered goods were imported into the 

23 United States; bears to 

24 (II) the greenhouse gas emissions 

25 of that industry sector; and 


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1 (ii) to take into account the level of 

2 economic development of the covered for3 eign country in which the covered goods 

4 were produced. 

5 (3) SUBSEQUENT COMPLIANCE YEARS.—For 

6 each subsequent compliance year, the Administrator 

7 shall revise, as appropriate, the international reserve 

8 allowance requirement applicable to each category of 

9 imported covered goods of each covered foreign 

10 country to reflect changes in the factors described in 

11 paragraph (2)(B). 

12 (4) PUBLICATION.—Not later than 90 days be13 fore the beginning of each compliance year, the Ad14 ministrator shall publish in the Federal Register a 

15 schedule describing the required number of inter16 national reserve allowances for each category of im17 ported covered goods of each covered foreign coun18 try, as calculated under this subsection. 

19 (e) FOREIGN ALLOWANCES AND CREDITS.— 

20 (1) FOREIGN ALLOWANCES.— 

21 (A) IN GENERAL.—A United States im22 porter may submit, in lieu of an international 

23 reserve allowance issued under this section, a 

24 foreign allowance or similar compliance instru25 ment distributed by a foreign country pursuant 


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1 to a cap and trade program that represents a 

2 comparable action. 

3 (B) COMMENSURATE CAP AND TRADE PRO4 GRAM.—For purposes of subparagraph (A), a 

5 cap and trade program that represents a com6 parable action shall include any greenhouse gas 

7 regulatory program adopted by a covered for8 eign country to limit the greenhouse gas emis9 sions of the covered foreign country, if the 

10 President certifies that the program— 

11 (i)(I) places a quantitative limitation 

12 on the total quantity of greenhouse gas 

13 emissions of the covered foreign country 

14 (expressed in terms of tons emitted per 

15 calendar year); and 

16 (II) achieves that limitation through 

17 an allowance trading system; 

18 (ii) satisfies such criteria as the Presi19 dent may establish for requirements relat20 ing to the enforceability of the cap and 

21 trade program, including requirements for 

22 monitoring, reporting, verification proce23 dures, and allowance tracking; and 

24 (iii) is a comparable action. 

25 (2) FOREIGN CREDITS.— 


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1 (A) IN GENERAL.—A United States im2 porter may submit, in lieu of an international 

3 reserve allowance issued under this section, a 

4 foreign credit or a credit for an international 

5 offset project that the Administrator has au6 thorized for use under subtitle E of title II. 

7 (B) APPLICATION.—The limitation on the 

8 use of international reserve allowances by regu9 lated entities under subsection (a)(6) shall not 

10 apply to a United States importer for purposes 

11 of this paragraph. 

12 (f) RETIREMENT OF ALLOWANCES.—The Adminis13 trator shall retire each international reserve allowance, 

14 foreign allowance, and foreign credit submitted to achieve 

15 compliance with this section. 

16 (g) CONSISTENCY WITH INTERNATIONAL AGREE17 MENTS.—The Administrator, in consultation with the Sec18 retary of State, shall adjust the international reserve al19 lowance requirements established under this section (in20 cluding the quantity of international reserve allowances re21 quired for each category of covered goods of a covered for22 eign country) as the Administrator determines to be nec23 essary to ensure that the United States complies with all 

24 applicable international agreements. 


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1 (h) TERMINATION.—The international reserve allow2 ance requirements of this section shall not apply to a cov3 ered good of a covered foreign country in any case in 

4 which the President makes a determination described in 

5 subsection (b)(2) with respect to the covered goods of that 

6 covered foreign country. 

7 (i) FINAL REGULATIONS.—Not later than January 1, 

8 2019, the Administrator shall promulgate such regulations 

9 as the Administrator determines to be necessary to carry 

10 out this section. 

11 SEC. 6007. ADJUSTMENT OF INTERNATIONAL RESERVE AL12 LOWANCE REQUIREMENTS. 

13 (a) IN GENERAL.—Not later than January 1, 2023, 

14 and annually thereafter, the President shall prepare and 

15 submit to Congress a report that assesses the effectiveness 

16 of the applicable international reserve allowance require17 ments under section 6006 with respect to the covered 

18 goods of each covered foreign country. 

19 (b) INADEQUATE REQUIREMENTS.—If the President 

20 determines that an applicable international reserve allow21 ance requirement is not adequate to achieve the purposes 

22 of this title, the President, simultaneously with the sub23 mission of the report under subsection (a), shall— 

24 (1) adjust the requirement; or 


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1 (2) take such other action as the President de2 termines to be necessary to improve the effectiveness 

3 of the requirement, in accordance with all applicable 

4 international agreements. 

5 (c) EFFECTIVE DATE.—An adjustment under sub6 section (b)(1) shall take effect beginning on January 1 

7 of the compliance year immediately following the date on 

8 which the adjustment is made. 

9 TITLE VII—REVIEWS AND 

10 RECOMMENDATIONS 

11 SEC. 7001. NATIONAL ACADEMY OF SCIENCES REVIEWS. 

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

13 date of enactment of this Act, the Administrator shall 

14 offer to enter into a contract with the National Academy 

15 of Sciences under which the Academy shall, not later than 

16 January 1, 2012, and every 3 years thereafter, submit to 

17 Congress and the Administrator a report that includes an 

18 analysis of— 

19 (1) the latest scientific information and data 

20 relevant to global climate change; 

21 (2) the performance of this Act and other poli22 cies in reducing greenhouse gas emissions and miti23 gating the adverse impacts of global climate change; 

24 (3) the performance of this Act in ensuring that 

25 the Land and Water Conservation Fund established 


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1 under section 2 of the Land and Water Conservation 

2 Fund Act of 1965 (16 U.S.C. 460l–5) receives funds 

3 that are sufficient to carry out the purposes of that 

4 Fund; and 

5 (4) the performance of this Act in ensuring that 

6 the Bureau of Land Management and the Forest 

7 Service receive funds that are sufficient to enable 

8 those agencies to suppress wildland fire effectively 

9 and thereby minimize wildfire damage. 

10 (b) LATEST SCIENTIFIC INFORMATION.—The anal11 ysis required under subsection (a)(1) shall— 

12 (1) address existing reports, including the most 

13 recent assessment report of the Intergovernmental 

14 Panel on Climate Change; and 

15 (2) include a description of— 

16 (A) trends in and projections for total 

17 United States greenhouse gas emissions; 

18 (B) trends in and projections for total 

19 worldwide greenhouse gas emissions; 

20 (C) current and projected future atmos21 pheric concentrations of greenhouse gases; 

22 (D) current and projected future global av23 erage temperature, including an analysis of 

24 whether an increase of global average tempera25 ture in excess of 3.6 degrees Fahrenheit (2 deVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00267 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 grees Celsius) above the preindustrial average 

2 has occurred or is more likely than not to occur 

3 in the foreseeable future as a result of anthro4 pogenic climate change; 

5 (E) current and projected future adverse 

6 impacts of global climate change on human 

7 populations, wildlife, and natural resources; and 

8 (F) trends in and projections for the 

9 health of the oceans and ocean ecosystems, in10 cluding predicted changes in ocean acidity, tem11 peratures, the extent of coral reefs, and other 

12 indicators of ocean ecosystem health, resulting 

13 from anthropogenic carbon dioxide and climate 

14 change. 

15 (c) PERFORMANCE OF THIS ACT AND EXISTING

16 TECHNOLOGIES.—The analysis required under subsection 

17 (a)(2) shall include a description of— 

18 (1) the extent to which this Act, in concert with 

19 other policies, will prevent a dangerous increase in 

20 global average temperature; 

21 (2) the extent to which this Act, in concert with 

22 other policies, will prevent dangerous atmospheric 

23 concentrations of greenhouse gases; 


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1 (3) the current and future projected deployment 

2 of technologies and practices that reduce or limit 

3 greenhouse gas emissions, including— 

4 (A) technologies for capture and disposal 

5 of greenhouse gases; 

6 (B) efficiency improvement technologies; 

7 (C) zero-greenhouse gas emitting energy 

8 technologies, including solar, wind, geothermal, 

9 and nuclear technologies; and 

10 (D) above- and below-ground biological se11 questration technologies; 

12 (4) the extent to which this Act and other poli13 cies are accelerating the development and commer14 cial deployment of technologies and practices that 

15 reduce and limit greenhouse gas emissions; 

16 (5) the extent to which the allocations and dis17 tributions of emission allowances and auction pro18 ceeds under this Act are advancing the purposes of 

19 this Act, and whether any of those allocations and 

20 distributions should be modified, including by in21 creasing the percentage of annual Emission Allow22 ance Account being auctioned, to better carry out 

23 the purposes of this Act; 

24 (6) whether the motor vehicle fuel and motor 

25 vehicle and nonroad regulations within the scope of 


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1 Executive Order 13432 (72 Fed. Reg. 27717; relat2 ing to cooperation among agencies in protecting the 

3 environment with respect to greenhouse gas emis4 sions from motor vehicles, nonroad vehicles, and 

5 nonroad engines) have been finalized and imple6 mented by Federal agencies and departments; 

7 (7) whether any other transportation-related 

8 programs, including fuel economy standard reform, 

9 greenhouse gas vehicle emissions standards, renew10 able fuel volume mandates, low-carbon fuel stand11 ards, and activities to reduce vehicle miles traveled 

12 have been finalized and implemented by any Federal 

13 agencies or departments; 

14 (8) whether any regulation or program de15 scribed in paragraph (12) or (13) is expected to 

16 achieve, as compared to the baseline greenhouse gas 

17 emissions consistent with the reference case con18 tained in the report of the Energy Information Ad19 ministration entitled ‘‘Annual Energy Outlook 

20 2006’’, at a minimum— 

21 (A) at least a 6.2-percent reduction in cu22 mulative greenhouse gas emissions from the 

23 light-duty motor vehicle sector, including light24 duty vehicles and light-duty trucks, during the 


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1 period beginning on January 1, 2010, and end2 ing on December 31, 2020; or 

3 (B) a cumulative reduction of approxi4 mately 1,140,000 metric tons of carbon dioxide 

5 equivalent, measured on a full fuel cycle basis; 

6 (9) whether additional measures, including an 

7 increase in the earned income tax credit, a reduction 

8 in payroll taxes, or the implementation of electronic 

9 benefit transfers by State health and human services 

10 agencies to reach low-income individuals who are not 

11 required to file Federal income tax returns, are 

12 needed to help low- and moderate-income individuals 

13 respond to changes in the cost of energy-related 

14 goods and services; 

15 (10) the feasibility of expanding the definition 

16 of the term ‘‘covered facility’’ under this Act; 

17 (11) the feasibility of expanding the scope of 

18 the compliance obligation established under section 

19 1202(a); 

20 (12) the feasibility of reducing the number of 

21 emission allowances comprising the Emission Allow22 ance Account for 1 or more calendar years under 

23 this Act; 


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1 (13) the feasibility of establishing policies for 

2 reducing greenhouse gas emissions over and above 

3 those policies established by this Act; 

4 (14) the feasibility of accelerating the commer5 cial deployment of existing and emerging renewable 

6 energy technologies for electricity generation, from 

7 solar, wind, geothermal energy, ocean energy (in8 cluding tidal, wave, current, and thermal) or bio9 mass (as defined in section 203(b) of the Energy 

10 Policy Act of 2005 (42 U.S.C. 15852(b))), utilizing 

11 a bonus emission allowance program comparable to 

12 the program established under subtitle F of title III; 

13 and 

14 (15) the results of a report on products manu15 factured with recycled materials that— 

16 (A) describes the greenhouse gas emission 

17 reductions those products can achieve; 

18 (B) summarizes and assesses the results of 

19 research on manufactured products and scrap 

20 recycling activities; and 

21 (C) evaluates the lifecycle greenhouse gas 

22 emission reduction and other benefits and 

23 issues associated with— 

24 (i) recycling scrap metal (including 

25 end-of-life vehicles), recovered fiber (or 


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1 paper), scrap electronics, scrap glass, scrap 

2 plastics, scrap rubber, scrap tires, and 

3 scrap textiles with respect to reduction or 

4 avoidance of greenhouse gas to the envi5 ronment; 

6 (ii) using recyclable materials in man7 ufactured products; 

8 (iii) designing and manufacturing 

9 products that increase recyclable output; 

10 (iv) eliminating or reducing the use of 

11 substances and materials in products that 

12 decrease recyclable output; and 

13 (v) establishing a standardized system 

14 for lifecycle greenhouse gas emission re15 duction measurement and certification for 

16 the manufactured products and scrap recy17 cling sectors, including the potential op18 tions for the structure and operation of 

19 such a system. 

20 SEC. 7002. ENVIRONMENTAL PROTECTION AGENCY RE21 VIEW. 

22 Not later than January 1, 2012, the Administrator 

23 shall submit to Congress a report indicating— 


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1 (1) the latest scientific information and data 

2 relevant to the health effects of mercury emissions 

3 from coal-fired electric power generating facilities; 

4 (2) the state of the technology designed to re5 duce mercury emissions from coal combustion, in6 cluding the efficacy of the technology with respect to 

7 each coal type; and 

8 (3) the extent to which the implementation of 

9 this Act is assisting in bringing concentrations of 

10 particulate matter and ozone into line with National 

11 Ambient Air Quality Standards. 

12 SEC. 7003. ENVIRONMENTAL PROTECTION AGENCY REC13 OMMENDATIONS. 

14 (a) REVIEW.—Not later than January 1, 2013, and 

15 every 3 years thereafter, the Administrator shall submit 

16 to Congress recommendations for action in response to the 

17 most recent report submitted by the National Academy of 

18 Sciences under section 7001 and the report submitted by 

19 the Administrator under section 7002. 

20 (b) CATEGORIES OF ACTION.—The categories of ac21 tion eligible for inclusion in the recommendations sub22 mitted under subsection (a) include proposed legislation 

23 recommending— 

24 (1) expansion of the definition of the term ‘‘cov25 ered facility’’ under this Act; 


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1 (2) expansion of the scope of the compliance ob2 ligation established under section 1202; 

3 (3) adjustment of the number of emission allow4 ances comprising the Emission Allowance Account 

5 for 1 or more calendar years under this Act; 

6 (4) establishment of policies for reducing green7 house gas emissions over and above those policies es8 tablished under this Act; 

9 (5) establishment of policies for reducing na10 tionwide emissions into the atmosphere of sulfur di11 oxide, nitrogen oxides, and mercury in excess of the 

12 reductions resulting from the implementation of this 

13 Act; and 

14 (6) establishment of a program, similar to the 

15 program established under subtitle F of title III, for 

16 distributing bonus emission allowances in order to 

17 accelerate the commercial deployment of existing 

18 and emerging renewable energy technologies for elec19 tricity generation. 

20 (c) CONSISTENCY WITH REVIEWS.—The Adminis21 trator shall include with each submission of recommenda22 tions under subsection (a) an explanation of any inconsist23 encies between the recommendations and the reviews sub24 mitted by the National Academy of Sciences under section 


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1 7001 and the report submitted by the Administrator 

2 under section 7002. 

3 (d) SAVINGS CLAUSE.—Nothing in this title limits, 

4 procedurally affects, or otherwise restricts the authority 

5 of the Administrator, a State, or any person to use au6 thorities under this Act or any other law to adopt or en7 force any rule. 

8 SEC. 7004. PRESIDENTIAL RECOMMENDATIONS. 

9 (a) ESTABLISHMENT OF THE INTERAGENCY CLI10 MATE CHANGE TASK FORCE.—Not later than January 1, 

11 2019, the President shall establish an Interagency Climate 

12 Change Task Force. 

13 (b) COMPOSITION.—The members of the Interagency 

14 Climate Change Task Force shall be— 

15 (1) the Administrator; 

16 (2) the Secretary of Energy; 

17 (3) the Secretary of the Treasury; 

18 (4) the Secretary of Commerce; and 

19 (5) such other Cabinet Secretaries as the Presi20 dent may name to the membership of the Task 

21 Force. 

22 (c) CHAIRMAN.—The Administrator shall act as 

23 Chairman of the Interagency Climate Change Task Force. 

24 (d) REPORT TO PRESIDENT.— 


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1 (1) IN GENERAL.—Not later than April 1, 

2 2019, the Task Force shall make public and submit 

3 to the President a consensus report making rec4 ommendations, including specific legislation for the 

5 President to recommend to Congress. 

6 (2) BASIS.—The report shall be based on the 

7 third set of recommendations submitted by the Ad8 ministrator to Congress under section 7003. 

9 (3) INCLUSIONS.—The Task Force shall include 

10 with the consensus report an explanation of any in11 consistencies between the consensus report and the 

12 third set of recommendations submitted by the Ad13 ministrator to Congress under section 7003. 

14 (e) PRESIDENTIAL RECOMMENDATION TO CON15 GRESS.—Not later than July 1, 2020, the President shall 

16 submit to Congress the text of a proposed Act based on 

17 the consensus report submitted to the President under 

18 subsection (d). 

19 SEC. 7005. ADAPTATION ASSESSMENTS AND PLAN. 

20 (a) REGIONAL ESTIMATES.— 

21 (1) ESTIMATES.— 

22 (A) IN GENERAL.—The Administrator, in 

23 consultation with the officials described in para24 graph (2) and relevant State agencies, shall 

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1 ments in various regions of the United States, 

2 and a national cost assessment, to provide esti3 mates of the range of costs that should be an4 ticipated for adaptation to the impacts of cli5 mate change. 

6 (B) VARIOUS PROBABILITIES.—The Ad7 ministrator shall develop the estimates under 

8 subparagraph (A) for low, medium, and high 

9 probabilities of climate change and the potential 

10 impacts of climate change. 

11 (2) DESCRIPTION OF OFFICIALS.—The officials 

12 referred to in paragraph (1) are— 

13 (A) the Secretary of Agriculture; 

14 (B) the Secretary of Commerce; 

15 (C) the Secretary of Defense; 

16 (D) the Secretary of Energy; 

17 (E) the Secretary of Health and Human 

18 Services; 

19 (F) the Secretary of Homeland Security; 

20 (G) the Secretary of Housing and Urban 

21 Development; 

22 (H) the Secretary of the Interior; 

23 (I) the Secretary of Transportation; 

24 (J) the Director of United States Geologi25 cal Survey; and 


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1 (K) the heads of such other Federal agen2 cies and departments as the Administrator de3 termines to be necessary. 

4 (3) SUBMISSION TO CONGRESS.—Not later than 

5 1 year after the date of enactment of this Act, the 

6 Administrator shall submit to Congress a report de7 scribing the results of the assessments conducted 

8 under this subsection. 

9 (b) ADAPTATION PLAN.— 

10 (1) IN GENERAL.—Not later than 180 days 

11 after the date of enactment of this Act, the Adminis12 trator shall submit to Congress a climate change ad13 aptation plan for the United States, based on— 

14 (A) assessments performed by the United 

15 Nations Intergovernmental Panel on Climate 

16 Change in accordance with the Global Change 

17 Research Act of 1990 (15 U.S.C. 2921 et seq.); 

18 and 

19 (B) any other assessment prepared by a 

20 Federal, regional, State, or local government 

21 entity that is— 

22 (i) scientific; 

23 (ii) peer-reviewed; or 

24 (iii) subjected to public comment. 


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1 (2) INCLUSIONS.—The adaptation plan under 

2 paragraph (1) shall include— 

3 (A) a prioritized list of vulnerable systems 

4 and regions in the United States; 

5 (B) requirements for coordination between 

6 Federal, State, and local governments to ensure 

7 that key public infrastructure, safety, health, 

8 and land use planning and control issues are 

9 addressed; 

10 (C) requirements for coordination among 

11 the Federal Government, industry, and commu12 nities; 

13 (D) requirements for management of cli14 mate change, including the need for information 

15 derived from inundation prediction systems on 

16 the impacts to coastal communities; 

17 (E) an assessment of climate change 

18 science research needs, including probabilistic 

19 assessments as an aid to planning; 

20 (F) an assessment of climate change tech21 nology needs; and 

22 (G) regional and national cost assessments 

23 for the range of costs that should be anticipated 

24 for adapting to the impacts of climate change. 


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1 (c) IMPACTS OF CLIMATE CHANGE ON LOW-INCOME

2 POPULATIONS.— 

3 (1) IN GENERAL.—The Administrator shall con4 duct research on the impact of climate change on 

5 low-income populations in all countries, including— 

6 (A) an assessment of the adverse impact of 

7 climate change on— 

8 (i) low-income populations in the 

9 United States; and 

10 (ii) developing countries; 

11 (B)(i) an identification of appropriate cli12 mate change adaptation measures and pro13 grams for developing countries and low-income 

14 populations; 

15 (ii) an assessment of the impact of the 

16 measures and programs on low-income popu17 lations; and 

18 (C) an estimate of the costs of developing 

19 and implementing those climate change adapta20 tion and mitigation programs. 

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

22 date of enactment of this Act, the Administrator 

23 shall submit to Congress a report describing the re24 sults of the research conducted under paragraph (1). 


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1 SEC. 7006. STUDY BY ADMINISTRATOR OF AVIATION SEC2 TOR GREENHOUSE GAS EMISSIONS. 

3 (a) IN GENERAL.—The Administrator shall enter 

4 into an agreement with the National Academy of Sciences 

5 under which the Academy shall conduct a study on green6 house gas emissions associated with the aviation industry, 

7 including— 

8 (1) a determination of appropriate data nec9 essary to make determinations of emission inven10 tories, considering fuel use, airport operations, 

11 ground equipment, and all other sources of emis12 sions in the aviation industry; 

13 (2) an estimate of projected industry emissions 

14 for the following 5-year, 20-year, and 50-year peri15 ods; 

16 (3) based on existing literature, research and 

17 surveys to determine the existing best practices for 

18 emission reduction in the aviation sector; 

19 (4) recommendations on areas of focus for addi20 tional research for technologies and operations with 

21 the highest potential to reduce emissions; and 

22 (5) recommendations of actions that the Fed23 eral Government could take to encourage or require 

24 additional emissions reductions. 

25 (b) CONSULTATION.—In developing the parameters 

26 of the study under this section, the Administrator shall 


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1 conduct the study under this section in consultation 

2 with— 

3 (1) the Secretary of Transportation, acting 

4 through the Administrator of the Federal Aviation 

5 Administration; and 

6 (2) other appropriate Federal agencies and de7 partments. 

8 TITLE VIII—FRAMEWORK FOR 

9 GEOLOGICAL SEQUESTRA10 TION OF CARBON DIOXIDE 

11 SEC. 8001. NATIONAL DRINKING WATER REGULATIONS. 

12 (a) IN GENERAL.—Section 1421 of the Safe Drink13 ing Water Act (42 U.S.C. 300h) is amended— 

14 (1) in subsection (b)(1), by striking ‘‘subsection 

15 (d)(2)’’ and inserting ‘‘subsection (e)(2)’’; 

16 (2) by redesignating subsection (d) as sub17 section (e); and 

18 (3) by inserting after subsection (c) the fol19 lowing: 

20 ‘‘(d) CARBON DIOXIDE.— 

21 ‘‘(1) REGULATIONS.—Not later than 1 year 

22 after the date of enactment of the Lieberman-War23 ner Climate Security Act of 2008, the Administrator 

24 shall promulgate regulations for permitting commer25 cial-scale underground injection of carbon dioxide for 


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1 purposes of geological sequestration to address cli2 mate change, including provisions— 

3 ‘‘(A) for monitoring and controlling the 

4 long-term storage of carbon dioxide and avoid5 ing, to the maximum extent practicable, any re6 lease of carbon dioxide into the atmosphere, 

7 and for ensuring protection of underground 

8 sources of drinking water, human health, and 

9 the environment; and 

10 ‘‘(B) relating to long-term liability associ11 ated with commercial-scale geological sequestra12 tion. 

13 ‘‘(2) SUBSEQUENT REPORTS.—Not later than 5 

14 years after the date on which regulations are pro15 mulgated pursuant to paragraph (1), and not less 

16 frequently than once every 5 years thereafter, the 

17 Administrator shall submit to Congress a report that 

18 contains an evaluation of the effectiveness of the 

19 regulations, based on current knowledge and experi20 ence, with particular emphasis on any new informa21 tion on potential impacts of commercial-scale geo22 logical sequestration on drinking water, human 

23 health, and the environment. 

24 ‘‘(3) REVISION.—If the Administrator deter25 mines, based on a report under paragraph (2), that 


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1 regulations promulgated pursuant to paragraph (1) 

2 require revision, the Administrator shall promulgate 

3 revised regulations not later than 1 year after the 

4 date on which the applicable report is submitted to 

5 Congress under paragraph (2).’’. 

6 (b) CONFORMING AMENDMENT.—Section 1447(a)(4) 

7 of the Safe Drinking Water Act (42 U.S.C. 300j–6(a)(4)) 

8 is amended by striking ‘‘section 1421(d)(2)’’ and inserting 

9 ‘‘section 1421(e)(2)’’. 

10 SEC. 8002. ASSESSMENT OF GEOLOGICAL STORAGE CAPAC11 ITY FOR CARBON DIOXIDE. 

12 (a) DEFINITIONS.—In this section: 

13 (1) ASSESSMENT.—The term ‘‘assessment’’ 

14 means the national assessment of capacity for car15 bon dioxide completed under subsection (f). 

16 (2) CAPACITY.—The term ‘‘capacity’’ means the 

17 portion of a storage formation that can retain car18 bon dioxide in accordance with the requirements (in19 cluding physical, geological, and economic require20 ments) established under the methodology developed 

21 under subsection (b). 

22 (3) ENGINEERED HAZARD.—The term ‘‘engi23 neered hazard’’ includes the location and completion 

24 history of any well that could affect a storage forma25 tion or capacity. 


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1 (4) RISK.—The term ‘‘risk’’ includes any risk 

2 posed by a geomechanical, geochemical, 

3 hydrogeological, structural, or engineered hazard. 

4 (5) SECRETARY.—The term ‘‘Secretary’’ means 

5 the Secretary of the Interior, acting through the Di6 rector of the United States Geological Survey. 

7 (6) STORAGE FORMATION.—The term ‘‘storage 

8 formation’’ means a deep saline formation, 

9 unmineable coal seam, oil or gas reservoir, or other 

10 geological formation that is capable of accommo11 dating a volume of industrial carbon dioxide. 

12 (b) METHODOLOGY.—Not later than 1 year after the 

13 date of enactment of this Act, the Secretary shall develop 

14 a methodology for conducting an assessment under sub15 section (f), taking into consideration— 

16 (1) the geographical extent of all potential stor17 age formations in all States; 

18 (2) the capacity of the potential storage forma19 tions; 

20 (3) the injectivity of the potential storage for21 mations; 

22 (4) an estimate of potential volumes of oil and 

23 gas recoverable by injection and storage of industrial 

24 carbon dioxide in potential storage formations; 


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1 (5) the risk associated with the potential stor2 age formations; and 

3 (6) the work performed to develop the Carbon 

4 Sequestration Atlas of the United States and Can5 ada completed by the Department of Energy in April 

6 2006. 

7 (c) COORDINATION.— 

8 (1) FEDERAL COORDINATION.— 

9 (A) CONSULTATION.—The Secretary shall 

10 consult with the Secretary of Energy and the 

11 Administrator regarding data sharing and the 

12 format, development of methodology, and con13 tent of the assessment to ensure the maximum 

14 usefulness and success of the assessment. 

15 (B) COOPERATION.—The Secretary of En16 ergy and the Administrator shall cooperate with 

17 the Secretary to ensure, to the maximum extent 

18 practicable, the usefulness and success of the 

19 assessment. 

20 (2) STATE COORDINATION.—The Secretary 

21 shall consult with State geological surveys and other 

22 relevant entities to ensure, to the maximum extent 

23 practicable, the usefulness and success of the assess24 ment. 


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1 (d) EXTERNAL REVIEW AND PUBLICATION.—On 

2 completion of the methodology under subsection (b), the 

3 Secretary shall— 

4 (1) publish the methodology and solicit com5 ments from the public and the heads of affected 

6 Federal and State agencies; 

7 (2) establish a panel of individuals with exper8 tise in the matters described in paragraphs (1) 

9 through (5) of subsection (b) composed, as appro10 priate, of representatives of Federal agencies, insti11 tutions of higher education, nongovernmental organi12 zations, State organizations, industry, and inter13 national geosciences organizations to review the 

14 methodology and comments received under para15 graph (1); and 

16 (3) on completion of the review under para17 graph (2), publish in the Federal Register the re18 vised final methodology. 

19 (e) PERIODIC UPDATES.—The methodology devel20 oped under this section shall be updated periodically (in21 cluding not less frequently than once every 5 years) to in22 corporate new data as the data becomes available. 

23 (f) NATIONAL ASSESSMENT.— 

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

25 the date of publication of the methodology under 


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1 subsection (d)(3), the Secretary, in consultation with 

2 the Secretary of Energy and State geological sur3 veys, shall complete a national assessment of the ca4 pacity for carbon dioxide storage in accordance with 

5 the methodology. 

6 (2) GEOLOGICAL VERIFICATION.—As part of 

7 the assessment, the Secretary shall carry out a char8 acterization program to supplement the geological 

9 data relevant to determining storage capacity in car10 bon dioxide in geological storage formations, includ11 ing— 

12 (A) well log data; 

13 (B) core data; and 

14 (C) fluid sample data. 

15 (3) PARTNERSHIP WITH OTHER DRILLING PRO16 GRAMS.—As part of the drilling characterization 

17 under paragraph (2), the Secretary shall enter into 

18 partnerships, as appropriate, with other entities to 

19 collect and integrate data from other drilling pro20 grams relevant to the storage of carbon dioxide in 

21 geologic formations. 

22 (4) INCORPORATION INTO NATCARB.— 

23 (A) IN GENERAL.—On completion of the 

24 assessment, the Secretary shall incorporate the 


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1 results of the assessment using, to the max2 imum extent practicable— 

3 (i) the NatCarb database; or 

4 (ii) a new database developed by the 

5 Secretary, as the Secretary determines to 

6 be necessary. 

7 (B) RANKING.—The database shall include 

8 the data necessary to rank potential storage 

9 sites— 

10 (i) for capacity and risk; 

11 (ii) across the United States; 

12 (iii) within each State; 

13 (iv) by formation; and 

14 (v) within each basin. 

15 (5) REPORT.—Not later than 180 days after 

16 the date on which the assessment is completed, the 

17 Secretary shall submit to the Committee on Energy 

18 and Natural Resources of the Senate and the Com19 mittee on Science and Technology of the House of 

20 Representatives a report describing the results of the 

21 assessment. 

22 (6) PERIODIC UPDATES.—The assessment shall 

23 be updated periodically (including not less frequently 

24 than once every 5 years) as necessary to support 


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1 public and private sector decisionmaking, as deter2 mined by the Secretary. 

3 SEC. 8003. STUDY OF THE FEASIBILITY RELATING TO CON4 STRUCTION OF PIPELINES AND GEOLOGICAL 

5 CARBON DIOXIDE SEQUESTRATION ACTIVI6 TIES. 

7 (a) IN GENERAL.—The Secretary of Energy, in co8 ordination with the Administrator, the Federal Energy 

9 Regulatory Commission, the Secretary of Transportation, 

10 and the Secretary of the Interior, shall conduct a study 

11 to assess the feasibility of the construction of— 

12 (1) pipelines to be used for the transportation 

13 of carbon dioxide for the purpose of sequestration or 

14 enhanced oil recovery; and 

15 (2) geological carbon dioxide sequestration fa16 cilities. 

17 (b) SCOPE.—The study shall consider— 

18 (1) any barrier or potential barrier in existence 

19 as of the date of enactment of this Act, including 

20 any technical, siting, financing, or regulatory bar21 rier, relating to— 

22 (A) the construction of pipelines to be used 

23 for the transportation of carbon dioxide for the 

24 purpose of sequestration or enhanced oil recov25 ery; or 


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1 (B) the geological sequestration of carbon 

2 dioxide; 

3 (2) any market risk (including throughput risk) 

4 relating to— 

5 (A) the construction of pipelines to be used 

6 for the transportation of carbon dioxide for the 

7 purpose of sequestration or enhanced oil recov8 ery; or 

9 (B) the geological sequestration of carbon 

10 dioxide; 

11 (3) any regulatory, financing, or siting option 

12 that, as determined by the Secretary of Energy, 

13 would— 

14 (A) mitigate any market risk described in 

15 paragraph (2); or 

16 (B) help ensure the construction of pipe17 lines dedicated to the transportation of carbon 

18 dioxide for the purpose of sequestration or en19 hanced oil recovery; 

20 (4) the means by which to ensure the safe han21 dling and transportation of carbon dioxide; 

22 (5) any preventive measure to ensure the inte23 gration of pipelines to be used for the transportation 

24 of carbon dioxide for the purpose of sequestration or 

25 enhanced oil recovery; and 


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1 (6) any other appropriate use, as determined by 

2 the Secretary of Energy, in coordination with the 

3 Administrator, the Federal Energy Regulatory Com4 mission, the Secretary of Transportation, and the 

5 Secretary of the Interior. 

6 (c) REPORT.—Not later than 180 days after the date 

7 of enactment of this Act, the Secretary of Energy shall 

8 submit to the Congress a report describing the results of 

9 the study. 

10 SEC. 8004. LIABILITIES FOR CLOSED GEOLOGICAL STOR11 AGE SITES. 

12 (a) ESTABLISHMENT OF TASK FORCE.—As soon as 

13 practicable after the date of enactment of this Act, the 

14 Administrator shall establish a task force, to be composed 

15 of an equal number of stakeholders, the public, subject 

16 matter experts, and members of the private sector, to con17 duct a study of the legal framework, environmental and 

18 safety considerations, and cost implications of potential 

19 Federal assumption of liability with respect to closed geo20 logical storage sites. 

21 (b) REPORT.—Not later than 18 months after the 

22 date of enactment of this Act, the task force established 

23 under subsection (a) shall submit to Congress a report de24 scribing the results of the study conducted under sub25 section (a), including recommendations of the task force, 


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1 if any, with respect to the framework described in that 

2 subsection. 

3 TITLE IX—MISCELLANEOUS 

4 SEC. 9001. PARAMOUNT INTEREST WAIVER. 

5 (a) IN GENERAL.—If the President determines that 

6 a national security emergency exists and, in light of infor7 mation that was not available as of the date of enactment 

8 of this Act, it is in the paramount interest of the United 

9 States to modify any requirement under this Act to mini10 mize the effects of the emergency, the President may, 

11 after opportunity for public notice and comment, tempo12 rarily adjust, suspend, or waive any regulations promul13 gated pursuant to this Act to achieve that minimization. 

14 (b) CONSULTATION.—In making an emergency deter15 mination under subsection (a), the President shall, to the 

16 maximum extent practicable, consult with and take into 

17 account any advice received from— 

18 (1) the National Academy of Sciences; 

19 (2) the Secretary of Energy; and 

20 (3) the Administrator. 

21 (c) JUDICIAL REVIEW.—An emergency determination 

22 under subsection (a) shall be subject to judicial review in 

23 accordance with section 307 of the Clean Air Act (42 

24 U.S.C. 7607). 


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1 SEC. 9002. ADMINISTRATIVE PROCEDURE AND JUDICIAL 

2 REVIEW. 

3 (a) RULEMAKING PROCEDURES.—Any rule, require4 ment, regulation, method, standard, program, determina5 tion, or final action made or promulgated pursuant to any 

6 title of this Act, with the exception of sections 3102, 3103, 

7 3201, and 3901, shall be subject to the rulemaking proce8 dures described in sections 551 through 557 of title 5, 

9 United States Code. 

10 (b) ENFORCEMENT.—Each provision of this Act (in11 cluding provisions relating to mandatory duties of the Ad12 ministrator) shall be fully enforceable pursuant to sections 

13 113, 303, and 304 of the Clean Air Act (42 U.S.C. 7413, 

14 7603, 7604). 

15 (c) RECORDKEEPING, INSPECTIONS, MONITORING, 

16 ENTRY, AND SUBPOENAS.—The Administrator shall have 

17 the same powers and authority provided under sections 

18 114 and 307(a) of the Clean Air Act (42 U.S.C. 7414, 

19 7607(a)) in carrying out, administering, and enforcing 

20 this Act. 

21 (d) JUDICIAL REVIEW.—A petition for judicial review 

22 of any regulation promulgated, or final action carried out, 

23 by the Administrator pursuant to this Act may be filed 

24 only— 

25 (1) in the United States Court of Appeals for 

26 the District of Columbia; and 


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1 (2) in accordance with section 307(b) of the 

2 Clean Air Act (42 U.S.C. 7607(b)). 

3 SEC. 9003. RETENTION OF STATE AUTHORITY. 

4 (a) IN GENERAL.—Except as provided in subsection 

5 (b), in accordance with section 116 of the Clean Air Act 

6 (42 U.S.C. 7416) and section 510 of the Federal Water 

7 Pollution Control Act (33 U.S.C. 1370), nothing in this 

8 Act precludes or abrogates the right of any State to adopt 

9 or enforce— 

10 (1) any standard, cap, limitation, or prohibition 

11 relating to emissions of greenhouse gas; or 

12 (2) any requirement relating to control, abate13 ment, or avoidance of emissions of greenhouse gas. 

14 (b) EXCEPTION.—Notwithstanding subsection (a), no 

15 State may adopt a standard, cap, limitation, prohibition, 

16 or requirement that is less stringent than the applicable 

17 standard, cap, limitation, prohibition, or requirement 

18 under this Act. 

19 SEC. 9004. TRIBAL AUTHORITY. 

20 For purposes of this Act, the Administrator may 

21 treat any federally recognized Indian tribe as a State, in 

22 accordance with section 301(d) of the Clean Air Act (42 

23 U.S.C. 7601(d)). 


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1 SEC. 9005. ROCKY MOUNTAIN CENTERS FOR STUDY OF 

2 COAL UTILIZATION. 

3 (a) DESIGNATION.—The University of Wyoming and 

4 Montana State University shall be known and designated 

5 as the ‘‘Rocky Mountain Centers for the Study of Coal 

6 Utilization’’. 

7 (b) AUTHORIZATION OF APPROPRIATIONS.—There 

8 are authorized to be appropriated such sums as are nec9 essary to carry out this section. 

10 SEC. 9006. SUN GRANT CENTER RESEARCH ON COMPLI11 ANCE WITH CLEAN AIR ACT. 

12 (a) DESIGNATION.—Each sun grant center is des13 ignated as a research institution of the Environmental 

14 Protection Agency for the purpose of conducting studies 

15 regarding the effects of biofuels and biomass on national 

16 and regional compliance with the Clean Air Act (42 U.S.C. 

17 7401 et seq.). 

18 (b) FUNDING.—The Administrator shall provide to 

19 the sun grant centers such funds as the Administrator de20 termines to be necessary to carry out studies described 

21 in subsection (a). 

22 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

23 are authorized to be appropriated such sums as are nec24 essary to carry out this section. 


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1 SEC. 9007. AUTHORIZATION OF APPROPRIATIONS. 

2 There are authorized to be appropriated such sums 

3 as are necessary to carry out this Act. 

4 TITLE X—CONTROL OF 

5 HYDROFLUOROCARBON CON6 SUMPTION 

7 SEC. 10001. APPLICABILITY. 

8 For purposes of this Act, it shall be unlawful for any 

9 person to produce or import for consumption in the United 

10 States any hydrofluorocarbon, or product or equipment 

11 containing a hydrofluorocarbon, except exclusively in ac12 cordance with this title and the regulations promulgated 

13 by the Administrator pursuant to this title. 

14 SEC. 10002. DEFINITIONS. 

15 In this title: 

16 (1) BASELINE.—The term ‘‘baseline’’ means 

17 the global warming potential-weighted equivalent of 

18 300,000,000 metric tons of carbon dioxide. 

19 (2) ENTITY; PERSON.—The terms ‘‘entity’’ and 

20 ‘‘person’’ have the meaning given the term ‘‘person’’ 

21 in section 551 of title 5, United States Code. 

22 (3) GLOBAL WARMING POTENTIAL.— 

23 (A) IN GENERAL.—The term ‘‘global 

24 warming potential’’ means the potential con25 tribution to global warming of a 

26 hydrofluorocarbon, as compared to the potential 


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1 contribution to global warming of an equal 

2 weight of carbon dioxide. 

3 (B) CALCULATION.—For the purposes of 

4 calculating the global warming potential of a 

5 hydrofluorocarbon, the values for the 100-year 

6 time horizon in the fourth assessment report of 

7 the Intergovernmental Panel on Climate 

8 Change shall be used. 

9 (4) GLOBAL WARMING POTENTIAL-WEIGHT10 ED.—The term ‘‘global warming potential-weight11 ed’’, with respect to a hydrofluorocarbon, means the 

12 value equal to the product obtained, for purposes of 

13 determining the quantity of carbon dioxide with an 

14 equivalent global warming potential, by multi15 plying— 

16 (A) a certain quantity of the 

17 hydrofluorocarbon; and 

18 (B) the global warming potential of the 

19 hydrofluorocarbon. 

20 (5) HYDROCHLOROFLUOROCARBON.—The term 

21 ‘‘hydrochlorofluorocarbon’’ means any 

22 hydrochlorofluorocarbon identified in section 602(b) 

23 of the Clean Air Act (42 U.S.C. 7671a(b)). 

24 (6) HYDROFLUOROCARBON.—The term 

25 ‘‘hydrofluorocarbon’’ means a hydrofluoroalkane. 


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1 (7) HYDROFLUOROCARBON CONSUMPTION.— 

2 (A) IN GENERAL.—The term 

3 ‘‘hydrofluorocarbon consumption’’, with respect 

4 to a hydrofluorocarbon, means— 

5 (i) in the case of a hydrofluorocarbon 

6 producer, a value equal to the difference 

7 between— 

8 (I) a value equal to the sum of— 

9 (aa) the quantity of the 

10 hydrofluorocarbon produced in 

11 the United States; and 

12 (bb) the quantity of the 

13 hydrofluorocarbon imported from 

14 any source into the United States 

15 or acquired in the United States 

16 from another hydrofluorocarbon 

17 producer through sale or other 

18 transaction; and 

19 (II) the quantity of the 

20 hydrofluorocarbon exported or trans21 ferred to another hydrofluorocarbon 

22 producer or importer in the United 

23 States through sale or other trans24 action; and 


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1 (ii) in the case of a hydrofluorocarbon 

2 importer, a value equal to the difference 

3 between— 

4 (I) the quantity of the 

5 hydrofluorocarbon imported from any 

6 source into the United States; and 

7 (II) the quantity of the 

8 hydrofluorocarbon exported. 

9 (B) EXCLUSION.—The term 

10 ‘‘hydrofluorocarbon consumption’’ does not in11 clude a quantity of hydrofluorocarbon that is 

12 recycled. 

13 (8) HYDROFLUOROCARBON CONSUMPTION AL14 LOWANCE.—The term ‘‘hydrofluorocarbon consump15 tion allowance’’ means an authorization— 

16 (A) to produce or import a global warming 

17 potential-weighted quantity of 

18 hydrofluorocarbon equivalent to 1 metric ton of 

19 carbon dioxide; or 

20 (B) to import products or equipment con21 taining a quantity of hydrofluorocarbon equiva22 lent in global warming potential to 1 metric ton 

23 of carbon dioxide. 

24 (9) HYDROFLUOROCARBON DESTRUCTION.— 

25 The term ‘‘hydrofluorocarbon destruction’’ means a 


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1 process that results in the permanent transformation 

2 or decomposition of all or a significant portion of a 

3 hydrofluorocarbon to another gas, liquid, or solid 

4 with a lower or zero global warming potential. 

5 (10) HYDROFLUOROCARBON DESTRUCTION AL6 LOWANCE.—The term ‘‘hydrofluorocarbon destruc7 tion allowance’’ means an authorization to produce 

8 or import a global warming potential-weighted quan9 tity of hydrofluorocarbon equal to the global warm10 ing potential-weighted quantity of hydrofluorocarbon 

11 destroyed pursuant to section 10010. 

12 (11) HYDROFLUOROCARBON IMPORTER.—The 

13 term ‘‘hydrofluorocarbon importer’’ means an entity 

14 that imported hydrofluorocarbon or products or 

15 equipment containing hydrofluorocarbon into the 

16 United States during calendar year 2005. 

17 (12) HYDROFLUOROCARBON PRODUCER.—The 

18 term ‘‘hydrofluorocarbon producer’’ means an entity 

19 that produced hydrofluorocarbon in the United 

20 States for sale in the United States during calendar 

21 year 2005. 

22 (13) IMPORT.—The term ‘‘import’’ means the 

23 action of landing on or bringing or introducing a 

24 product into, or attempting to land on or bring or 

25 introduce a product into, any area subject to the juVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00302 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 risdiction of the United States, regardless of whether 

2 the action constitutes an importation within the 

3 meaning of the customs laws of the United States. 

4 (14) PRODUCE; PRODUCTION.— 

5 (A) IN GENERAL.—The terms ‘‘produce’’ 

6 and ‘‘production’’ mean the manufacture of a 

7 hydrofluorocarbon from any raw material, feed8 stock, or chemical. 

9 (B) EXCLUSIONS.—The terms ‘‘produce’’ 

10 and ‘‘production’’ do not include— 

11 (i) the manufacture of a 

12 hydrofluorocarbon that is used and entirely 

13 consumed (except for trace quantities) in 

14 the manufacture of other chemicals or 

15 products; or 

16 (ii) the reuse or recycling of a 

17 hydrofluorocarbon. 

18 (15) RECYCLE; REUSE.—The terms ‘‘reuse’’ 

19 and ‘‘recycle’’ mean— 

20 (A) the removal of a quantity of 

21 hydrofluorocarbon from a product or equip22 ment; 

23 (B) the reprocessing of the product or 

24 equipment to remove impurities; and 


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1 (C) the offering of the product or equip2 ment for sale in the United States. 

3 SEC. 10003. CAP ON HYDROFLUOROCARBON CONSUMPTION 

4 AND IMPORTATION INTO UNITED STATES. 

5 (a) ESTABLISHMENT.—The Administrator shall es6 tablish a cap on hydrofluorocarbon consumption in the 

7 United States for each calendar year during the period 

8 of calendar years 2010 through 2050, as directed in sec9 tion 10004 that shall not be exceeded except as provided 

10 in section 10009. 

11 (b) PROHIBITION.—Consumption of a 

12 hydrofluorocarbon or products or equipment containing 

13 any hydrofluorocarbon, except as provided in this title, 

14 shall be illegal. 

15 SEC. 10004. HYDROFLUOROCARBON CONSUMPTION ALLOW16 ANCE ACCOUNT. 

17 (a) ALLOWANCE ACCOUNT.— 

18 (1) ESTABLISHMENT.—Not later than April 1, 

19 2009, and annually thereafter through April 1, 

20 2050, the Administrator shall establish and allocate 

21 a separate quantity of hydrofluorocarbon consump22 tion allowances. 

23 (2) DENOMINATION.—Hydrofluorocarbon con24 sumption allowances shall be denominated in metric 

25 tons of carbon dioxide equivalent. 


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1 (b) IDENTIFICATION NUMBERS.—The Administrator 

2 shall assign to each hydrofluorocarbon consumption allow3 ance established under subsection (a) a unique identifica4 tion number that includes the calendar year for which the 

5 hydrofluorocarbon consumption allowance was assigned. 

6 (c) LEGAL STATUS OF HYDROFLUOROCARBON CON7 SUMPTION ALLOWANCES.— 

8 (1) IN GENERAL.—A consumption allowance al9 located under this title is a limited authorization to 

10 produce or import a hydrofluorocarbon and any 

11 product or equipment containing a 

12 hydrofluorocarbon, in accordance with this title. 

13 (2) ALLOWANCE NOT PROPERTY RIGHT.—A 

14 hydrofluorocarbon consumption allowance does not 

15 constitute a property right. 

16 (3) TERMINATION OR LIMITATION.—Nothing in 

17 this Act or any other provision of law limits the au18 thority of the United States to terminate or limit 

19 hydrofluorocarbon consumption allowances. 

20 (4) EFFECT OF ACT.—Nothing in this Act re21 lating to hydrofluorocarbon consumption allowances 

22 shall affect the application of, or any requirement of 

23 compliance with, any other provision of law by any 

24 person. 


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1 (d) LIFETIME OF HYDROFLUOROCARBON CONSUMP2 TION ALLOWANCES.—Hydrofluorocarbon consumption al3 lowances distributed by the Administrator and 

4 hydrofluorocarbon destruction allowances may be used for 

5 compliance for a period of not more than 5 years after 

6 the calendar year for which the allowances are allocated. 

7 (e) HYDROFLUOROCARBON CONSUMPTION ALLOW8 ANCES FOR EACH CALENDAR YEAR.—The number of 

9 hydrofluorocarbon consumption allowances established 

10 and allocated by the Administrator for each of calendar 

11 years 2010 through 2050 shall be as follows: 

Calendar year HFC consumption 

allowances (in 

million metric 

tons) 

2010 ....................................................................... 300 

2011 ....................................................................... 294 

2012 ....................................................................... 289 

2013 ....................................................................... 283 

2014 ....................................................................... 278 

2015 ....................................................................... 272 

2016 ....................................................................... 267 

2017 ....................................................................... 261 

2018 ....................................................................... 256 

2019 ....................................................................... 250 

2020 ....................................................................... 245 

2021 ....................................................................... 239 

2022 ....................................................................... 234 

2023 ....................................................................... 228 

2024 ....................................................................... 222 

2025 ....................................................................... 217 

2026 ....................................................................... 206 

2027 ....................................................................... 195 

2028 ....................................................................... 184 

2029 ....................................................................... 173 

2030 ....................................................................... 162 

2031 ....................................................................... 150 

2032 ....................................................................... 139 

2033 ....................................................................... 128 

2034 ....................................................................... 117 

2035 ....................................................................... 106 

2036 ....................................................................... 95 


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2037 ....................................................................... 90 

2038 ....................................................................... 90 

2039 ....................................................................... 90 

2040 ....................................................................... 90 

2041 ....................................................................... 90 

2042 ....................................................................... 90 

2043 ....................................................................... 90 

2044 ....................................................................... 90 

2045 ....................................................................... 90 

2046 ....................................................................... 90 

2047 ....................................................................... 90 

2048 ....................................................................... 90 

2049 ....................................................................... 90 

2050 ....................................................................... 90 

1 SEC. 10005. ALLOCATION OF HYDROFLUOROCARBON CON2 SUMPTION ALLOWANCES. 

3 (a) IN GENERAL.—Not later than 90 days before the 

4 beginning of each applicable calendar year, the Adminis5 trator shall allocate the portion of the hydrofluorocarbon 

6 consumption allowances in the hydrofluorocarbon con7 sumption allowance account that is available for allocation 

8 for that calendar year. 

9 (b) ELIGIBLE ENTITIES.— 

10 (1) IN GENERAL.—The Administrator shall al11 locate hydrofluorocarbon consumption allowances as 

12 described in paragraph (2) to entities that— 

13 (A) were hydrofluorocarbon producers or 

14 hydrofluorocarbon importers during the period 

15 beginning on January 1, 2004, and ending on 

16 December 31, 2006; and 

17 (B) are hydrofluorocarbon producers or 

18 hydrofluorocarbon importers on the date of en19 actment of this Act. 


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1 (2) DESCRIPTION OF ALLOCATION.— 

2 Hydrofluorocarbon consumption allowances shall be 

3 allocated to entities described in paragraph (1) as 

4 follows: 

5 (A) HYDROFLUOROCARBON PRODUCERS.— 

6 Each hydrofluorocarbon producer shall receive a 

7 quantity of hydrofluorocarbon allowances equal 

8 to the ratio that— 

9 (i) a value equal to the difference be10 tween— 

11 (I) the global warming potential12 weighted average of 100 percent of 

13 the hydrofluorocarbon and 60 percent 

14 of the hydrochlorofluorocarbon pro15 duced in the United States, imported 

16 into the United States, or acquired in 

17 the United States by the 

18 hydrofluorocarbon producer during 

19 the period beginning on January 1, 

20 2004, and ending on December 31, 

21 2006; and 

22 (II) the global warming potential23 weighted average of 100 percent of 

24 the hydrofluorocarbon and 60 percent 

25 of the hydrochlorofluorocarbon that 


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1 the producer exported or transferred 

2 to another producer of 

3 hydrofluorocarbons in the United 

4 States during the period described in 

5 subclause (I); bears to 

6 (ii) a value equal to the difference be7 tween— 

8 (I) the total global warming po9 tential-weighted average of 100 per10 cent of the hydrofluorocarbon and 60 

11 per cent of the 

12 hydrochlorofluorocarbon produced in 

13 or imported into the United States 

14 during the period described in clause 

15 (i)(I); and 

16 (II) the global warming potential17 weighted average of 100 percent of 

18 the hydrofluorocarbon and 60 per cent 

19 of the hydrochlorofluorocarbon ex20 ported from the United States during 

21 that period. 

22 (B) HYDROFLUOROCARBON IMPORTERS.— 

23 Each hydrofluorocarbon importer shall receive a 

24 quantity of hydrofluorocarbon allowances equal 

25 to the ratio that— 


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1 (i) the global warming potential2 weighted average of 100 percent of 

3 hydrofluorocarbon and 60 percent of 

4 hydrochlorofluorocarbon imported by the 

5 hydrofluorocarbon importer as a product 

6 or contained in equipment during the pe7 riod beginning on January 1, 2004, and 

8 ending on December 31, 2006; bears to 

9 (ii) a value equal to the difference be10 tween— 

11 (I) the total global warming po12 tential-weighted average of 100 per13 cent of the hydrofluorocarbon and 60 

14 per cent of the 

15 hydrochlorofluorocarbon produced in 

16 and imported into the United States 

17 during the period described in clause 

18 (i); and 

19 (II) the global warming potential20 weighted average of 100 percent of 

21 the hydrofluorocarbon and 60 per cent 

22 of the hydrochlorofluorocarbon ex23 ported from the United States during 

24 that period. 

25 (c) WITHHOLDING ALLOWANCES.— 


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1 (1) IN GENERAL.—For calendar year 2010 and 

2 each calendar year thereafter, the Administrator 

3 shall withhold a quantity of hydrofluorocarbon con4 sumption allowances that would otherwise be allo5 cated under subsection (b) for auction at least annu6 ally by the Corporation to the entities identified in 

7 subsection (b)(1). 

8 (2) AUCTIONS BY CORPORATION.—For each ap9 plicable calendar year, the Administrator shall with10 hold, and the Corporation shall auction to the enti11 ties identified in subsection (b)(1), the following 

12 quantities of the hydrofluorocarbon consumption al13 lowances established under section 10004: 

Calendar year Percent withheld 

for auction 

2010 ....................................................................... 5 

2011 ....................................................................... 10 

2012 ....................................................................... 10 

2013 ....................................................................... 10 

2014 ....................................................................... 15 

2015 ....................................................................... 20 

2016 ....................................................................... 25 

2017 ....................................................................... 30 

2018 ....................................................................... 35 

2019 ....................................................................... 40 

2020 ....................................................................... 45 

2021 ....................................................................... 50 

2022 ....................................................................... 55 

2023 ....................................................................... 60 

2024 ....................................................................... 65 

2025 ....................................................................... 70 

2026 ....................................................................... 75 

2027 ....................................................................... 80 

2028 ....................................................................... 85 

2029 ....................................................................... 90 

2030 ....................................................................... 95 

2031 ....................................................................... 100 

2032 ....................................................................... 100 

2033 ....................................................................... 100 

2034 ....................................................................... 100 


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2035 ....................................................................... 100 

2036 ....................................................................... 100 

2037 ....................................................................... 100 

2038 ....................................................................... 100 

2039 ....................................................................... 100 

2040 ....................................................................... 100 

2041 ....................................................................... 100 

2042 ....................................................................... 100 

2043 ....................................................................... 100 

2044 ....................................................................... 100 

2045 ....................................................................... 100 

2046 ....................................................................... 100 

2047 ....................................................................... 100 

2048 ....................................................................... 100 

2049 ....................................................................... 100 

2050 ....................................................................... 100 

1 (3) PROCEEDS.—The Corporation shall award 

2 the proceeds of the auction to support the following 

3 purposes: 

4 (A) A program to recover and destroy the 

5 maximum economically recoverable 

6 chlorofluorocarbons, halons, and other sub7 stances listed under title VI of the Clean Air 

8 Act (42 U.S.C. 7671 et seq.) that have signifi9 cant ozone depletion potential and global warm10 ing potential. 

11 (B) A program of incentives for consumer 

12 purchases of refrigeration and cooling equip13 ment that— 

14 (i) contains refrigerants with no or 

15 low global warming potential; and 

16 (ii) achieves energy efficiency that 

17 represents at least a 30 percent improveVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00312 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 ment, as compared to the more efficient 

2 of— 

3 (I) the applicable Federal energy 

4 efficiency standard; and 

5 (II) the applicable Energy Star 

6 rating. 

7 (C) A program to support the development 

8 and deployment of— 

9 (i) hydrofluorocarbons with low global 

10 warming potential; and 

11 (ii) energy efficient technologies, 

12 equipment, and products containing or 

13 using hydrofluorocarbons. 

14 (D) The programs receiving auction pro15 ceeds under title IV. 

16 SEC. 10006. COMPLIANCE OBLIGATION. 

17 (a) SUBMISSION OF ALLOWANCES.— 

18 (1) IN GENERAL.—Not later than 90 days after 

19 the end of each applicable calendar year, a 

20 hydrofluorocarbon producer or hydrofluorocarbon 

21 importer shall submit to the Administrator a quan22 tity of hydrofluorocarbon consumption allowances, or 

23 hydrofluorocarbon destruction allowances awarded 

24 pursuant to section 10010, equal to the total num25 ber of global warming potential-weighted tons of 


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1 hydrofluorocarbon consumed in the United States 

2 during the preceding calendar year by the 

3 hydrofluorocarbon producer or hydrofluorocarbon 

4 importer, as determined in accordance with para5 graphs (2) and (3). 

6 (2) HYDROFLUOROCARBON PRODUCERS.—For 

7 hydrofluorocarbon producers, the quantity of 

8 hydrofluorocarbon consumed shall be a value equal 

9 to the difference between— 

10 (A) the global warming potential-weighted 

11 tons of hydrofluorocarbon produced in the 

12 United States, imported as a product, or ac13 quired in the United States from another 

14 hydrofluorocarbon producer through sale or 

15 other transaction; and 

16 (B) the global warming potential-weighted 

17 tons of hydrofluorocarbon the producer ex18 ported or transferred to another 

19 hydrofluorocarbon producer in the United 

20 States through sale or other transaction. 

21 (3) HYDROFLUOROCARBON IMPORTERS.—For 

22 hydrofluorocarbon importers, hydrofluorocarbon con23 sumed shall be a value equal to the global warming 

24 potential-weighted tons of hydrofluorocarbon im25 ported by the hydrofluorocarbon importer or acVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00314 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 quired in the United States from a 

2 hydrofluorocarbon producer through sale or other 

3 transaction. 

4 (b) RETIREMENT.—Immediately on receipt of a 

5 hydrofluorocarbon consumption allowance or a 

6 hydrofluorocarbon destruction allowance under subsection 

7 (a), the Administrator shall retire the allowance. 

8 (c) DETERMINATION OF COMPLIANCE.—Not later 

9 than July 1 of each year, the Administrator shall— 

10 (1) determine whether each hydrofluorocarbon 

11 producer and hydrofluorocarbon importer achieved 

12 compliance with subsection (a) for the preceding 

13 year; and 

14 (2) so notify each hydrofluorocarbon producer 

15 and hydrofluorocarbon importer. 

16 (d) PENALTIES.—A hydrofluorocarbon producer or 

17 hydrofluorocarbon importer that is not in compliance with 

18 subsection (a), as determined under subsection (c), shall 

19 be liable for the payment of an excess consumption penalty 

20 as provided in section 1203, except that the deadlines de21 scribed in this title shall be substituted for the deadlines 

22 described in that section. 


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1 SEC. 10007. SALE, EXCHANGE, AND OTHER USES OF 

2 HYDROFLUOROCARBON CONSUMPTION AL3 LOWANCES. 

4 (a) PERMISSIBLE USES.— 

5 (1) IN GENERAL.—A hydrofluorocarbon pro6 ducer or hydrofluorocarbon importer may purchase, 

7 hold, sell, exchange, transfer, submit for compliance 

8 in accordance with section 10006, or retire 

9 hydrofluorocarbon consumption allowances or 

10 hydrofluorocarbon destruction allowances. 

11 (2) ACTION ON RETIREMENT.—If any 

12 hydrofluorocarbon producer or hydrofluorocarbon 

13 importer permanently retires a hydrofluorocarbon 

14 consumption allowance, the Administrator shall 

15 promptly redistribute the allowance to another 

16 hydrofluorocarbon producer or hydrofluorocarbon 

17 importer pursuant to section 10005(b). 

18 (b) PROHIBITIONS.— 

19 (1) IN GENERAL.—Hydrofluorocarbon con20 sumption allowances or hydrofluorocarbon destruc21 tion allowances shall not be traded or exchanged 

22 with allowances associated with any other emission 

23 allowance allocation or trading program under this 

24 Act. 

25 (2) CERTAIN USES.—Hydrofluorocarbon con26 sumption allowances shall not be used to achieve 


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1 compliance with any other obligation relating to 

2 emissions of greenhouse gases regulated under any 

3 other provision of this Act, and emission allowances 

4 established and allocated under any other provision 

5 of this Act shall not be used to achieve compliance 

6 with this title. 

7 (c) LIMITATION.—The privilege of purchasing, hold8 ing, selling, exchanging, transferring, and submitting for 

9 compliance in accordance with section 10006, and retiring 

10 hydrofluorocarbon consumption allowances or 

11 hydrofluorocarbon destruction allowances shall be re12 stricted to entities described in section 10005(b)(1). 

13 SEC. 10008. ALLOWANCE TRANSFER SYSTEM. 

14 (a) REGULATIONS.—Not later than 18 months after 

15 the date of enactment of this Act, the Administrator shall 

16 promulgate regulations to carry out the provisions of this 

17 title relating to hydrofluorocarbon consumption allowances 

18 and hydrofluorocarbon destruction allowances, including 

19 regulations providing that the transfer of those allowances 

20 shall not be effective until the date on which a written 

21 certification of the transfer, signed by a responsible official 

22 of each party to the transfer, is received and recorded by 

23 the Administrator in accordance with those regulations. 

24 (b) TRANSFERS.— 


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1 (1) IN GENERAL.—The regulations promulgated 

2 under subsection (a) shall permit the transfer of 

3 hydrofluorocarbon consumption allowances prior to 

4 the allocation of the allowances. 

5 (2) DEDUCTION AND ADDITION OF TRANS6 FERS.—A recorded preallocation transfer of 

7 hydrofluorocarbon consumption allowances shall 

8 be— 

9 (A) deducted by the Administrator from 

10 the number of hydrofluorocarbon consumption 

11 allowances that would otherwise be allocated to 

12 the transferor; and 

13 (B) added to those hydrofluorocarbon con14 sumption allowances allocated to the transferee. 

15 (c) ISSUANCE, RECORDING, AND TRACKING SYS16 TEM.—The regulations promulgated under subsection (a) 

17 shall include a system for issuing, recording, and tracking 

18 hydrofluorocarbon consumption and hydrofluorocarbon de19 struction allowances that shall specify all necessary proce20 dures and requirements for an orderly and competitive 

21 functioning of the hydrofluorocarbon consumption allow22 ance system. 

23 SEC. 10009. BANKING AND BORROWING. 

24 (a) BANKING.—A hydrofluorocarbon producer or 

25 hydrofluorocarbon importer that submits 


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1 hydrofluorocarbon consumption allowances or 

2 hydrofluorocarbon destruction allowances to the Adminis3 trator to achieve compliance with section 10006 shall indi4 cate in the identification number of the hydrofluorocarbon 

5 consumption allowance or hydrofluorocarbon destruction 

6 allowance the calendar year for which the allowance is sub7 mitted. 

8 (b) BORROWING OF HYDROFLUOROCARBON CON9 SUMPTION ALLOWANCES.—In accordance with the regula10 tions promulgated under section 10008(a), and subject to 

11 subsection (d), a hydrofluorocarbon producer or 

12 hydrofluorocarbon importer may— 

13 (1) borrow hydrofluorocarbon consumption al14 lowances from the Administrator; and 

15 (2) for a calendar year, submit borrowed 

16 hydrofluorocarbon consumption allowances to the 

17 Administrator to satisfy not more than 15 percent of 

18 the compliance obligation under section 10006. 

19 (c) LIMITATION ON BORROWING.—A 

20 hydrofluorocarbon consumption allowance borrowed under 

21 subsection (b) shall be a hydrofluorocarbon consumption 

22 allowance established by the Administrator for a specific 

23 subsequent calendar year under section 10004(g). 

24 (d) TERM.—A producer or importer shall not submit, 

25 and the Administrator shall not accept, a borrowed 


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1 hydrofluorocarbon consumption allowance in partial satis2 faction of the compliance obligation under section 10006 

3 for any calendar year that is more than 5 years before 

4 the calendar year included in the identification number of 

5 the borrowed hydrofluorocarbon consumption allowance. 

6 (e) REPAYMENT OF INTEREST.—For any borrowed 

7 hydrofluorocarbon consumption allowance submitted in 

8 partial satisfaction of the compliance obligation under sec9 tion 10006 for a particular calendar year (referred to in 

10 this subsection as the ‘‘use year’’), the number of 

11 hydrofluorocarbon consumption allowances or 

12 hydrofluorocarbon destruction allowances that the 

13 hydrofluorocarbon producer or hydrofluorocarbon im14 porter is required to submit under section 10006 for the 

15 year from which the borrowed hydrofluorocarbon con16 sumption allowance was taken (referred to in this sub17 section as the ‘‘source year’’) shall be increased by an 

18 amount equal to the product obtained by multiplying— 

19 (1) 1.1; and 

20 (2) the number of calendar years beginning 

21 after the use year but before the source year. 

22 SEC. 10010. HYDROFLUOROCARBON DESTRUCTION ALLOW23 ANCES. 

24 (a) DESTRUCTION OF HYDROFLUOROCARBON.— 


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1 (1) IN GENERAL.—The Administrator shall 

2 issue hydrofluorocarbon destruction allowances to 

3 any hydrofluorocarbon producer or 

4 hydrofluorocarbon importer that performs or ar5 ranges for recovery and destruction of 

6 hydrofluorocarbon from products or equipment. 

7 (2) ISSUANCE AND DENOMINATION.— 

8 Hydrofluorocarbon destruction allowances shall be 

9 issued on a global warming potential-weighted basis, 

10 denominated in terms of metric tons of carbon diox11 ide. 

12 (3) LIMITATIONS.— 

13 (A) BYPRODUCTS.—No hydrofluorocarbon 

14 destruction allowance shall be issued under this 

15 section for destruction of hydrofluorocarbon 

16 produced as a byproduct in a production proc17 ess. 

18 (B) CERTAIN PURPOSES.—No 

19 hydrofluorocarbon destruction allowance shall 

20 be issued under this section for destruction or 

21 recycling of hydrofluorocarbon produced for a 

22 purpose other than the ultimate sale and use of 

23 the product. 

24 (b) REGULATIONS.— 


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1 (1) REQUIREMENT.—The regulations promul2 gated under section 10008(a) shall authorize the 

3 issuance of hydrofluorocarbon destruction allow4 ances. 

5 (2) CRITERIA.—Those regulations shall estab6 lish appropriate criteria for determining— 

7 (A) the effectiveness of destruction; 

8 (B) the net quantity of global warming po9 tential-weighted hydrofluorocarbon that has 

10 been destroyed; and 

11 (C) procedures for verification, registra12 tion, and issuance of hydrofluorocarbon destruc13 tion allowances. 

14 (c) SATISFACTION OF REQUIREMENTS.—Beginning 

15 with calendar year 2012, a hydrofluorocarbon producer or 

16 hydrofluorocarbon importer may satisfy a portion of the 

17 hydrofluorocarbon consumption allowance submission re18 quirement under section 10006 by submitting 

19 hydrofluorocarbon destruction allowances generated in ac20 cordance with the regulations promulgated pursuant to 

21 section 10008(a). 

22 (d) OWNERSHIP.—Initial ownership of a 

23 hydrofluorocarbon destruction allowance shall be held by 

24 the hydrofluorocarbon producer or hydrofluorocarbon im25 porter that performs or arranges for recovery and destrucVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00322 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 tion or recycling of hydrofluorocarbon, including 

2 hydrofluorocarbon from products or equipment containing 

3 hydrofluorocarbon, unless otherwise specified in a legally 

4 binding contract or agreement to which the 

5 hydrofluorocarbon producer or hydrofluorocarbon im6 porter is a party. 

7 (e) TRANSFERABILITY.—A hydrofluorocarbon de8 struction allowance generated pursuant to the regulations 

9 promulgated pursuant to subsection (b)— 

10 (1) may be sold, traded, or transferred to any 

11 hydrofluorocarbon producer or hydrofluorocarbon 

12 importer referred to in section 10005(b); but 

13 (2) shall not be sold, traded, transferred, or 

14 used for compliance with any other emission allow15 ance requirement of this Act or any other law. 

16 TITLE XI—AMENDMENTS TO 

17 CLEAN AIR ACT 

18 SEC. 11001. NATIONAL RECYCLING AND EMISSION REDUC19 TION PROGRAM. 

20 Section 608 of the Clean Air Act (42 U.S.C. 7671g) 

21 is amended— 

22 (1) by redesignating subsections (a) through (c) 

23 as subsections (b) through (d), respectively; 

24 (2) by inserting before subsection (b) (as so re25 designated) the following: 


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1 ‘‘(a) DEFINITION OF HYDROFLUOROCARBON SUB2 STITUTE.—In this section, the term ‘hydrofluorocarbon 

3 substitute’ means a hydrofluorocarbon— 

4 ‘‘(1) with a global warming potential of more 

5 than 150; and 

6 ‘‘(2) that is used in or for types of equipment, 

7 appliances, or processes that previously relied on 

8 class I or class II substances.’’; 

9 (3) in subsection (b) (as so redesignated)— 

10 (A) in the matter following paragraph (3), 

11 by striking ‘‘Such regulations’’ and inserting 

12 the following: 

13 ‘‘(5) The regulations’’; 

14 (B) by redesignating paragraph (3) as 

15 paragraph (4); and 

16 (C) by inserting after paragraph (2) the 

17 following: 

18 ‘‘(3)(A) Not later than 1 year after the date of 

19 enactment of the Lieberman-Warner Climate Secu20 rity Act of 2008, the Administrator shall promulgate 

21 regulations establishing standards and requirements 

22 regarding the sale or distribution, or offer for sale 

23 and distribution in interstate commerce, use, and 

24 disposal of hydrofluorocarbon substitutes for class I 

25 and class II substances not covered by paragraph 


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1 (1), including the use, recycling, and disposal of 

2 those hydrofluorocarbon substitutes during the 

3 maintenance, service, repair, or disposal of appli4 ances and industrial process refrigeration equipment. 

5 ‘‘(B) The standards and requirements estab6 lished under subparagraph (A) shall take effect not 

7 later than 1 year after the date of promulgation of 

8 the regulations.’’; 

9 (4) in subsection (c) (as so redesignated)— 

10 (A) by redesignating paragraphs (1) 

11 through (3) as subparagraphs (A) through (C), 

12 respectively, and indenting the subparagraphs 

13 appropriately; 

14 (B) by striking the subsection designation 

15 and heading and all that follows through ‘‘fol16 lowing—’’ and inserting the following: 

17 ‘‘(c) SAFE DISPOSAL.—The regulations under sub18 section (b) shall— 

19 ‘‘(1) establish standards and requirements for 

20 the safe disposal of class I and II substances and 

21 hydrofluorocarbon substitutes for those substances; 

22 and 

23 ‘‘(2) include each of the following:’’; 

24 (C) in subparagraph (A) (as redesignated 

25 by subparagraph (A)), by inserting ‘‘(or 


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1 hydrofluorocarbon substitutes for those sub2 stances)’’ after ‘‘class I or class II substances’’; 

3 and 

4 (D) in paragraphs (2) and (3), by inserting 

5 ‘‘(or a hydrofluorocarbon substitutes for such a 

6 substance)’’ after ‘‘class I or class II sub7 stance’’ each place it appears. 

8 SEC. 11002. SERVICING OF MOTOR VEHICLE AIR CONDI9 TIONERS. 

10 Section 609 of the Clean Air Act (42 U.S.C. 7671h) 

11 is amended— 

12 (1) in subsection (b), by adding at the end the 

13 following: 

14 ‘‘(5) The term ‘hydrofluorocarbon substitute’ 

15 means a hydrofluorocarbon— 

16 ‘‘(A) with a global warming potential of 

17 more than 150; and 

18 ‘‘(B) that is used in or for types of equip19 ment, appliances, or processes that previously 

20 relied on class I or class II substances.’’; and 

21 (2) in subsection (e)— 

22 (A) by striking the subsection designation 

23 and heading and all that follows through ‘‘Ef24 fective’’ and inserting the following: 


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1 ‘‘(e) SMALL CONTAINERS OF CLASS I OR CLASS II 

2 SUBSTANCES AND HYDROFLUOROCARBON SUB3 STITUTES.— 

4 ‘‘(1) CLASS I OR CLASS II SUBSTANCES.—Effec5 tive beginning’’; and 

6 (B) by adding at the end the following: 

7 ‘‘(2) HYDROFLUOROCARBON SUBSTITUTES.— 

8 Effective beginning January 1, 2010, it shall be un9 lawful for any person to sell or distribute, or offer 

10 for sale or distribution, in interstate commerce to 

11 any person (other than a person performing service 

12 for consideration on motor vehicle air-conditioning 

13 systems in compliance with this section) any 

14 hydrofluorocarbon substitute that is— 

15 ‘‘(A) suitable for use in a motor vehicle 

16 air-conditioning system; and 

17 ‘‘(B) in a container that contains less than 

18 20 pounds of the hydrofluorocarbon sub19 stitute.’’. 

20 SEC. 11003. CARBON DIOXIDE REDUCTION. 

21 (a) FINDINGS.—Congress finds that— 

22 (1) oil used for transportation contributes sig23 nificantly to air pollution, including global warming 

24 pollution, water pollution, and other adverse impacts 

25 on the environment; 


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1 (2) to reduce emissions of global warming pol2 lutants, the United States should increasingly rely 

3 on advanced clean fuels for transportation; and 

4 (3) a comparison of life-cycle greenhouse gas 

5 emissions of conventional transportation fuels and 

6 low-carbon transportation fuels should be based on 

7 comparable fuels, such as a comparison of gasoline 

8 to gasoline and diesel fuel to diesel fuel. 

9 (b) DEFINITIONS.—Section 211(o)(1) of the Clean 

10 Air Act (42 U.S.C. 7545(o)(1)) is amended— 

11 (1) by redesignating subparagraphs (B), (C), 

12 and (D) as subparagraphs (J), (G), and (H), respec13 tively, and moving those subparagraphs so as to ap14 pear in alphabetical order; 

15 (2) by inserting after subparagraph (A) the fol16 lowing: 

17 ‘‘(B) CULTIVATED NOXIOUS PLANT.—The 

18 term ‘cultivated noxious plant’ means a plant 

19 that is included on— 

20 ‘‘(i) the Federal noxious weed list 

21 maintained by the Animal and Plant 

22 Health Inspection Service; or 

23 ‘‘(ii) any equivalent State list. 

24 ‘‘(C) FUEL EMISSION BASELINE.—The 

25 term ‘fuel emission baseline’ means the average 


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1 lifecycle greenhouse gas emissions per unit of 

2 energy of conventional transportation fuels in 

3 commerce in the United States in calendar year 

4 2008, as determined by the Administrator 

5 under paragraph (11). 

6 ‘‘(D) FUEL PROVIDER.— 

7 ‘‘(i) IN GENERAL.—The term ‘fuel 

8 provider’ means an obligated party (as de9 scribed in section 80.1106 of title 40, Code 

10 of Federal Regulations (or a successor reg11 ulation)). 

12 ‘‘(ii) INCLUSIONS.—The term ‘fuel 

13 provider’ includes, as the Administrator 

14 determines to be appropriate, an individual 

15 or entity that produces, blends, or imports 

16 gasoline or any other transportation fuel in 

17 commerce in, or into, the United States. 

18 ‘‘(E) GREENHOUSE GAS.—The term 

19 ‘greenhouse gas’ means any of— 

20 ‘‘(i) carbon dioxide; 

21 ‘‘(ii) methane; 

22 ‘‘(iii) nitrous oxide; 

23 ‘‘(iv) hydrofluorocarbons; 

24 ‘‘(v) perfluorocarbons; 

25 ‘‘(vi) sulfur hexafluoride; and 


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1 ‘‘(vii) any other emission or effect 

2 (such as particulate matter or a change in 

3 albedo) that the Administrator determines 

4 to be a significant factor in global warming 

5 as a result of the use of transportation 

6 fuel. 

7 ‘‘(F) LIFECYCLE GREENHOUSE GAS EMIS8 SIONS.— 

9 ‘‘(i) IN GENERAL.—The term ‘lifecycle 

10 greenhouse gas emissions’ means, with re11 spect to a transportation fuel, the aggre12 gate quantity of greenhouse gases emitted 

13 per British thermal unit of fuel, as deter14 mined by the Administrator, from produc15 tion through use of the fuel, as calculated 

16 to ensure that any nonrecurring emission 

17 is not amortized over a period of more 

18 than 20 years to ensure that required im19 provements in greenhouse gas emissions 

20 occur within that period. 

21 ‘‘(ii) INCLUSIONS.—The term 

22 ‘lifecycle greenhouse gas emissions’ in23 cludes emissions associated with— 


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1 ‘‘(I) feedstock production (includ2 ing direct and indirect land-use 

3 changes) or extraction; 

4 ‘‘(II) feedstock refining; 

5 ‘‘(III) distribution of a fuel; and 

6 ‘‘(IV) use of a fuel.’’; and 

7 (3) by inserting after subparagraph (H) (as re8 designated by paragraph (1)) the following: 

9 ‘‘(I) TRANSPORTATION FUEL.—The term 

10 ‘transportation fuel’ means fuel used to power 

11 motor vehicles, nonroad engines, or aircraft.’’. 

12 (c) ADVANCED CLEAN FUEL PROGRAM.—Section 

13 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) is amend14 ed by adding at the end the following: 

15 ‘‘(11) ADVANCED CLEAN FUEL PERFORMANCE

16 STANDARD.— 

17 ‘‘(A) STANDARD.— 

18 ‘‘(i) IN GENERAL.—Not later than 

19 January 1, 2010, the Administrator shall, 

20 by regulation— 

21 ‘‘(I) establish a methodology for 

22 use in determining the lifecycle green23 house gas emissions of all transpor24 tation fuels in commerce; 


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1 ‘‘(II) determine the fuel emission 

2 baseline; 

3 ‘‘(III) establish a transportation 

4 fuel certification and marketing proc5 ess to determine the lifecycle green6 house gas emissions of conventional 

7 transportation fuels and renewable 

8 fuels being sold or introduced into 

9 commerce in the United States that 

10 allows— 

11 ‘‘(aa) for a simple certifi12 cation using default values; and 

13 ‘‘(bb) fuel providers to opt 

14 in to the use of a standardized 

15 certification tool that would pro16 vide verifiable and auditable 

17 greenhouse gas ratings for fuels 

18 of the providers through the use 

19 of additional, certified data; 

20 ‘‘(IV) in accordance with clause 

21 (ii), establish a requirement applicable 

22 to each fuel provider to reduce the av23 erage lifecycle greenhouse gas emis24 sions per unit of energy of the aggre25 gate quantity of transportation fuel 


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1 produced, blended, or imported by the 

2 fuel provider to a level that is, to the 

3 maximum extent practicable— 

4 ‘‘(aa) by not later than cal5 endar year 2011, at least equal 

6 to or less than the fuel emission 

7 baseline; 

8 ‘‘(bb) by not later than cal9 endar year 2015, 5 percent less 

10 than the fuel emission baseline; 

11 and 

12 ‘‘(cc) by not later than cal13 endar year 2020, 10 percent less 

14 than the fuel emission baseline; 

15 and 

16 ‘‘(V) permit alternative reliable 

17 estimation methods to be used for the 

18 purpose of this clause during the first 

19 5 years that the requirement de20 scribed in subclause (IV) is in effect. 

21 ‘‘(ii) AIR QUALITY IMPACTS.—For the 

22 purpose of this subparagraph, in the case 

23 of any air quality-related adverse lifecycle 

24 impact resulting from emissions from 

25 motor vehicles using renewable fuel, the 


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1 Administrator shall ensure, by regulation 

2 promulgated under this title, that gasoline 

3 containing renewable fuel does not result 

4 in— 

5 ‘‘(I) average per-gallon motor ve6 hicle emissions (measured on a mass 

7 basis) of air pollutants in excess of 

8 those emissions attributable to gaso9 line sold or introduced into commerce 

10 in the United States in calendar year 

11 2007; or 

12 ‘‘(II) a violation of any motor ve13 hicle emission or fuel content limita14 tion under any other provision of this 

15 Act. 

16 ‘‘(iii) CALENDAR YEAR 2025 AND

17 THEREAFTER.—For calendar year 2025, 

18 and each fifth calendar year thereafter, the 

19 Administrator, in consultation with the 

20 Secretary of Agriculture and the Secretary 

21 of Energy, shall revise the applicable per22 formance standard to require that each 

23 fuel provider shall additionally reduce, to 

24 the maximum extent practicable, the aver25 age lifecycle greenhouse gas emissions per 


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1 unit of energy of the aggregate quantity of 

2 transportation fuel introduced by the fuel 

3 provider into commerce in the United 

4 States. 

5 ‘‘(iv) REVISION OF REGULATIONS.—In 

6 accordance with the purposes of the 

7 Lieberman-Warner Climate Security Act of 

8 2008, the Administrator may, as appro9 priate, revise the regulations promulgated 

10 under clause (i) as necessary to reflect or 

11 respond to changes in the transportation 

12 fuel market or other relevant cir13 cumstances. 

14 ‘‘(v) METHOD OF CALCULATION.—In 

15 calculating the lifecycle greenhouse gas 

16 emissions of hydrogen or electricity (when 

17 used as a transportation fuel) pursuant to 

18 clause (i)(I), the Administrator shall— 

19 ‘‘(I) include emissions resulting 

20 from the production of the hydrogen 

21 or electricity; and 

22 ‘‘(II) consider to be equivalent to 

23 the energy delivered by 1 gallon of 

24 ethanol the energy delivered by— 


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1 ‘‘(aa) 6.4 kilowatt-hours of 

2 electricity; 

3 ‘‘(bb) 132 standard cubic 

4 feet of hydrogen; or 

5 ‘‘(cc) 1.25 gallons of liquid 

6 hydrogen. 

7 ‘‘(vi) BEST AVAILABLE SCIENCE.—In 

8 carrying out this paragraph, the Adminis9 trator shall use the best available scientific 

10 and technical information to determine the 

11 lifecycle greenhouse gas emissions of trans12 portation fuels derived from— 

13 ‘‘(I) planted crops and crop res14 idue produced and harvested from ag15 ricultural land that— 

16 ‘‘(aa) has been cleared and, 

17 if the land was previously wet18 land, drained before the date of 

19 enactment of this paragraph, and 

20 that is actively managed or fallow 

21 and nonforested; and 

22 ‘‘(bb) is in compliance with 

23 a conservation plan that meets 

24 the standards, guidelines, and re25 strictions under subtitles B and 


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1 C of chapter 1 of subtitle D of 

2 title XII of the Food Security 

3 Act of 1985 (16 U.S.C. 3831 et 

4 seq.); 

5 ‘‘(II) planted trees and tree res6 idue from actively-managed tree plan7 tations on non-Federal land that has 

8 been cleared and, if the land was pre9 viously wetland, drained before the 

10 date of enactment of this paragraph; 

11 ‘‘(III) animal waste material, and 

12 animal byproducts; 

13 ‘‘(IV) slash and pre-commercial 

14 thinnings from non-Federal forestland 

15 other than— 

16 ‘‘(aa) old-growth forest or 

17 late successional forest; and 

18 ‘‘(bb) ecological communities 

19 with a global or State ranking of 

20 critically imperiled, imperiled, or 

21 rare pursuant to a State natural 

22 heritage program; 

23 ‘‘(V) biomass obtained from the 

24 immediate vicinity of buildings and 

25 other areas regularly occupied by indiVerDate Aug 31 2005 02:34 May 22, 2008 Jkt 069200 PO 00000 Frm 00337 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.PCS S3036

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1 viduals, or of public infrastructure, 

2 that is at risk from wildfire; 

3 ‘‘(VI) algae; 

4 ‘‘(VII) separated food waste or 

5 yard waste; 

6 ‘‘(VIII) electricity, including the 

7 entire lifecycle of the fuel; 

8 ‘‘(IX) 1 or more fossil fuels, in9 cluding the entire lifecycle of the 

10 fuels; and 

11 ‘‘(X) hydrogen, including the en12 tire lifecycle of the fuel. 

13 ‘‘(vii) EQUIVALENT EMISSIONS.—In 

14 carrying out this paragraph, the Adminis15 trator shall consider transportation fuel de16 rived from cultivated noxious plants, and 

17 transportation fuel derived from biomass 

18 sources other than those sources described 

19 in clause (vi), to have emissions equivalent 

20 to the greater of— 

21 ‘‘(I) the lifecycle greenhouse gas 

22 emissions; or 

23 ‘‘(II) the fuel emission baseline. 

24 ‘‘(B) ELECTION TO PARTICIPATE.—An 

25 electricity provider may elect to participate in 


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1 the program under this section if the electricity 

2 provider provides and separately tracks elec3 tricity for transportation through a meter 

4 that— 

5 ‘‘(i) measures the electricity used for 

6 transportation separately from electricity 

7 used for other purposes; and 

8 ‘‘(ii) allows for load management and 

9 time-of-use rates. 

10 ‘‘(C) CREDITS.— 

11 ‘‘(i) IN GENERAL.—The regulations 

12 promulgated to carry out this paragraph 

13 shall permit fuel providers to receive cred14 its for achieving, during a calendar year, 

15 greater reductions in lifecycle greenhouse 

16 gas emissions of the fuel provided, blended, 

17 or imported by the fuel provider than are 

18 required under subparagraph (A)(i)(IV). 

19 ‘‘(ii) METHOD OF CALCULATION.— 

20 The number of credits received by a fuel 

21 provider as described clause (i) for a cal22 endar year shall be calculated by multi23 plying— 

24 ‘‘(I) the aggregate quantity of 

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1 ported by the fuel provider in the cal2 endar year; and 

3 ‘‘(II) the difference between— 

4 ‘‘(aa) the lifecycle green5 house gas emissions of that 

6 quantity of fuel; and 

7 ‘‘(bb) the maximum lifecycle 

8 greenhouse gas emissions of that 

9 quantity of fuel permitted for the 

10 calendar year under subpara11 graph (A)(i)(IV). 

12 ‘‘(D) COMPLIANCE.— 

13 ‘‘(i) IN GENERAL.—Each fuel provider 

14 subject to this paragraph shall dem15 onstrate compliance with this paragraph, 

16 including, as necessary, through the use of 

17 credits banked or purchased. 

18 ‘‘(ii) NO LIMITATION ON TRADING OR

19 BANKING.—There shall be no limit on the 

20 ability of any fuel provider to trade or 

21 bank credits pursuant to this subpara22 graph. 

23 ‘‘(iii) USE OF BANKED CREDITS.—A 

24 fuel provider may use banked credits under 


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1 this subparagraph with no discount or 

2 other adjustment to the credits. 

3 ‘‘(iv) BORROWING.—A fuel provider 

4 may not borrow credits from future years 

5 for use under this subparagraph. 

6 ‘‘(v) TYPES OF CREDITS.—To encour7 age innovation in transportation fuels— 

8 ‘‘(I) only credits created in the 

9 production of transportation fuels 

10 may be used for the purpose of com11 pliance described in clause (i); and 

12 ‘‘(II) credits created by or in 

13 other sectors, such as manufacturing, 

14 may not be used for that purpose. 

15 ‘‘(E) NO EFFECT ON STATE AUTHORITY

16 OR MORE STRINGENT REQUIREMENTS.—Noth17 ing in this subsection— 

18 ‘‘(i) affects the authority of a State to 

19 establish, or to maintain in effect, any 

20 transportation fuel performance standard 

21 or other similar standard that is more 

22 stringent than a standard established 

23 under this paragraph; or 


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1 ‘‘(ii) supercedes or otherwise affects 

2 any more stringent requirement under any 

3 other provision of this Act.’’. 

4 (d) WATER QUALITY PROTECTION.—Section 

5 211(c)(1) of the Clean Air Act (42 U.S.C. 7545(c)(1)) is 

6 amended— 

7 (1) by striking ‘‘nonroad vehicle (A) if in the 

8 judgment of the Administrator’’ and inserting the 

9 following: ‘‘nonroad vehicle— 

10 ‘‘(A) if, in the judgment of the Adminis11 trator, any fuel or fuel additive or’’; 

12 (2) by striking ‘‘, or (B) if’’ and inserting the 

13 following: ‘‘; or 

14 ‘‘(B) if’’; and 

15 (3) in subparagraph (A), by striking ‘‘air pollu16 tion which’’ and inserting ‘‘air pollution or water 

17 pollution (including any degradation in the quality of 

18 groundwater) that’’. 


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Calendar No. 742 

110TH CONGRESS 

2D SESSION S. 3036 

A BILL 

To direct the Administrator of the Environmental 

other purposes. crease emissions of greenhouse gases, and for Protection Agency to establish a program to deMAY 21, 2008 

Read the second time and placed on the calendar 


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