`[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3036 Placed on Calendar Senate (PCS)]






                                                       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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Lieberman-Warner 
Climate Security Act of 2008''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
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

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.
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.
                      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

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.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) unchecked global warming poses a significant threat 
        to--
                    (A) the national security and economy of the United 
                States;
                    (B) public health and welfare in the United States;
                    (C) the well-being of other countries; and
                    (D) the global environment;
            (2) under the United Nations Framework Convention on 
        Climate Change, done at New York on May 9, 1992, the United 
        States is committed to stabilizing greenhouse gas 
        concentrations in the atmosphere at a level that will prevent 
        dangerous anthropogenic interference with the climate system;
            (3) according to the Fourth Assessment Report of the 
        Intergovernmental Panel on Climate Change, stabilizing 
        greenhouse gas concentrations in the atmosphere at a level that 
        will prevent dangerous interference with the climate system 
        will require a global effort to reduce anthropogenic greenhouse 
        gas emissions worldwide by 50 to 85 percent below 2000 levels 
        by 2050;
            (4) prompt, decisive action is critical, since global 
        warming pollutants can persist in the atmosphere for more than 
        a century;
            (5) the ingenuity of the people of the United States will 
        allow the United States to become a leader in curbing global 
        warming;
            (6) it is possible and desirable to cap greenhouse gas 
        emissions, from sources that together account for the majority 
        of those emissions in the United States, at or slightly below 
        the current level in 2012, and to lower the cap each year 
        between 2012 and 2050, on the condition that the system 
        includes--
                    (A) cost containment measures;
                    (B) periodic review of requirements;
                    (C) an aggressive program for deploying advanced 
                energy technology;
                    (D) programs to assist low- and middle-income 
                energy consumers; and
                    (E) programs to mitigate the impacts of any 
                unavoidable global climate change;
            (7) Congress may need to update the emissions caps in order 
        to account for continuing scientific data and steps taken, or 
        not taken, by foreign countries;
            (8) accurate emission data and timely compliance with the 
        requirements of the greenhouse gas emission reduction and 
        trading program established under this Act are needed to ensure 
        that reductions are achieved and to provide equity, efficiency, 
        and openness in the market for allowances subject to the 
        program;
            (9) additional policies external to a cap-and-trade program 
        may be required, including with respect to--
                    (A) the transportation sector, where reducing 
                greenhouse gas emissions requires changes in vehicles, 
                in fuels, and in consumer behavior; and
                    (B) the built environment, where reducing direct 
                and indirect greenhouse gas emissions requires changes 
                in buildings, appliances, lighting, heating, cooling, 
                and consumer behavior;
            (10) significant and sustained domestic investments are 
        required to support an aggressive program for developing and 
        deploying advanced technologies to reduce greenhouse gas 
        emissions;
            (11) all, or virtually all, emissions of greenhouse gases 
        from the combustion of natural gas in the United States should 
        be reduced through the inclusion in a cap-and-trade system of 
        entities that sell natural gas in the United States;
            (12) including natural gas in a cap-and-trade system in the 
        United States should be carried out in a way that minimizes, to 
        the extent feasible, the number of entities required to submit 
        emission allowances for the natural gas sold by the entities;
            (13) including natural gas in a cap-and-trade system in the 
        United States promotes substantial reductions in total United 
        States greenhouse gas emissions while also minimizing, to the 
        extent feasible, the activities within the industrial sector 
        that necessitate the submission of emission allowances;
            (14) emissions of sulfur dioxide, nitrogen oxides, and 
        mercury to the atmosphere from coal-fired electric power 
        generating facilities in the United States inflicts harm on the 
        public health, economy, and natural resources of the United 
        States;
            (15) fossil fuel-fired electric power generating facilities 
        emit approximately 67 percent of the total sulfur dioxide 
        emissions, 23 percent of the total nitrogen oxide emissions, 40 
        percent of the total carbon dioxide emissions, and 40 percent 
        of the total mercury emissions in the United States;
            (16) while the reductions in emissions of sulfur dioxide, 
        nitrogen oxides, and mercury that will occur in the presence of 
        a declining cap on the greenhouse gas emissions from coal-fired 
        electric power generating facilities are larger than those that 
        would occur in the absence of such a cap, new, stricter Federal 
        limits on emissions of sulfur dioxide, nitrogen oxides, and 
        mercury may still be needed to protect public health; and
            (17) many existing fossil fuel-fired electric power 
        generating facilities were exempted by Congress from emissions 
        limitations applicable to new and modified units based on an 
        expectation by Congress that, over time, the units would be 
        retired or updated with new pollution control equipment, but 
        many of the exempted facilities nevertheless continue to 
        operate and emit pollutants at relatively high rates and 
        without new pollution control equipment.

SEC. 3. PURPOSES.

    The purposes of this Act are--
            (1) to establish the core of a Federal program that will 
        reduce United States greenhouse gas emissions substantially 
        enough between 2007 and 2050 to avert the catastrophic impacts 
        of global climate change; and
            (2) to accomplish that purpose while preserving robust 
        growth in the United States economy, creating new jobs, and 
        avoiding the imposition of hardship on United States citizens.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Additional; additionality.--The terms ``additional'' 
        and ``additionality'' mean the extent to which reductions in 
        greenhouse gas emissions or increases in sequestration are 
        incremental to business-as-usual, measured as the difference 
        between--
                    (A) baseline greenhouse gas fluxes of an offset 
                project; and
                    (B) greenhouse gas fluxes of the offset project.
            (2) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (3) Baseline.--The term ``baseline'' means the greenhouse 
        gas flux or carbon stock that would have occurred in the 
        absence of an offset project.
            (4) Biological sequestration; biologically sequestered.--
        The terms ``biological sequestration'' and ``biologically 
        sequestered'' mean--
                    (A) the removal of greenhouse gases from the 
                atmosphere by biological means, such as by growing 
                plants; and
                    (B) the storage of those greenhouse gases in the 
                plants or related soils.
            (5) Carbon dioxide equivalent.--The term ``carbon dioxide 
        equivalent'' means, for each greenhouse gas, the quantity of 
        the greenhouse gas that the Administrator determines makes the 
        same contribution to global warming as 1 metric ton of carbon 
        dioxide.
            (6) Corporation.--The term ``Corporation'' means the 
        Climate Change Credit Corporation established by section 
        4201(a).
            (7) Covered facility.--The term ``covered facility'' 
        means--
                    (A) any facility that uses more than 5,000 tons of 
                coal in a calendar year;
                    (B) any facility that is a natural gas processing 
                plant or that produces natural gas in the State of 
                Alaska, or any entity that imports natural gas 
                (including liquefied natural gas);
                    (C) any facility that in any year produces, or any 
                entity that in any year imports, petroleum- or coal-
                based liquid or gaseous fuel, the combustion of which 
                will emit a group I greenhouse gas, assuming no capture 
                and sequestration of that gas;
                    (D) any facility that in any year produces for sale 
                or distribution, or any entity that in any year 
                imports, more than 10,000 carbon dioxide equivalents of 
                chemicals that are group I greenhouse gas, assuming no 
                capture and destruction or sequestration of that gas; 
                or
                    (E) any facility that in any year emits as a 
                byproduct of the production of hydrochlorofluorocarbons 
                more than 10,000 carbon dioxide equivalents of 
                hydrofluorocarbons.
            (8) Destruction.--The term ``destruction'' means the 
        conversion of a greenhouse gas by thermal, chemical, or other 
        means--
                    (A) to another gas with a low- or zero-global 
                warming potential; and
                    (B) for which credit given reflects the extent of 
                reduction in global warming potential actually 
                achieved.
            (9) Emission allowance.--The term ``emission allowance'' 
        means an authorization to emit 1 carbon dioxide equivalent of 
        greenhouse gas.
            (10) Emission allowance account.--The term ``Emission 
        Allowance Account'' means the aggregate of emission allowances 
        that the Administrator establishes for a calendar year.
            (11) Facility.--The term ``facility'' means--
                    (A) 1 or more buildings, structures, or 
                installations located on 1 or more contiguous or 
                adjacent properties of an entity in the United States; 
                and
                    (B) at the option of the Administrator, any 
                activity or operation that--
                            (i) emits 10,000 carbon dioxide equivalents 
                        in any year; and
                            (ii) has a technical connection with the 
                        activities carried out at a facility, such as 
                        use of transportation fleets, pipelines, 
                        transmission lines, and distribution lines, but 
                        that is not conducted or located on the 
                        property of the facility.
            (12) Fair market value.--The term ``fair market value'' 
        means the average market price, in a particular calendar year, 
        of an emission allowance.
            (13) Geological sequestration; geologically sequestered.--
        The terms ``geological sequestration'' and ``geologically 
        sequestered'' mean the permanent isolation of greenhouse gases, 
        without reversal, in geological formations, in accordance with 
        part C of the Safe Drinking Water Act (42 U.S.C. 300h et seq.), 
        as determined by the Administrator.
            (14) Group i greenhouse gas.--The term ``group I greenhouse 
        gas'' means any of--
                    (A) carbon dioxide;
                    (B) methane;
                    (C) nitrous oxide;
                    (D) sulfur hexafluoride; or
                    (E) a perfluorocarbon.
            (15) Group ii greenhouse gas.--The term ``group II 
        greenhouse gas'' means a hydrofluorocarbon.
            (16) Leakage.--The term ``leakage'' means--
                    (A) a significant unaccounted increase in 
                greenhouse gas emissions by a facility or entity caused 
                by an offset project that produces an accounted 
                reduction in greenhouse gas emissions, as determined by 
                the Administrator; or
                    (B) a significant unaccounted decrease in 
                sequestration that is caused by an offset project that 
                results in an accounted increase in sequestration, as 
                determined by the Administrator.
            (17) Load-serving entity.--The term ``load-serving entity'' 
        means an entity, whether public or private--
                    (A) that has a legal, regulatory, or contractual 
                obligation to deliver electricity to retail consumers; 
                and
                    (B) whose rates and costs are, except in the case 
                of a registered electric cooperative, regulated by a 
                State agency, regulatory commission, municipality, or 
                public utility district.
            (18) Natural gas processing plant.--The term ``natural gas 
        processing plant'' means a facility in the United States that 
        is designed to separate natural gas liquids from natural gas.
            (19) New entrant.--The term ``new entrant'' means any 
        facility that commences operation on or after January 1, 2008.
            (20) Offset allowance.--The term ``offset allowance'' means 
        a unit of reduction in the quantity of emissions or an increase 
        in sequestration equal to 1 carbon dioxide equivalent at an 
        entity that is not a covered facility, where the reduction in 
        emissions or increase in sequestration is eligible to be used 
        as an additional means of compliance for the submission 
        requirements established under section 1202.
            (21) Offset project.--The term ``offset project'' means a 
        domestic project, other than a project at a covered facility, 
        that reduces greenhouse gas emissions or increases terrestrial 
        sequestration of carbon dioxide.
            (22) Project developer.--The term ``project developer'' 
        means an individual or entity implementing an offset project.
            (23) Quantity of remainder emission allowances.--The term 
        ``quantity of remainder emission allowances'' means the 
        quantity of emission allowances established for a calendar 
        year, less the quantity of emission allowances obtained by 
        multiplying--
                    (A) the quantity of emission allowances established 
                for that year; by
                    (B) the percentage that corresponds to that year in 
                the table contained in section 3101(c).
            (24) Retail rate for distribution service.--
                    (A) In general.--The term ``retail rate for 
                distribution service'' means the rate that a load-
                serving entity charges for the use of the system of the 
                load-serving entity.
                    (B) Exclusion.--The term ``retail rate for 
                distribution service'' does not include any energy 
                component of the rate.
            (25) Retire an emission allowance.--The term ``retire an 
        emission allowance'' means to disqualify an emission allowance 
        for any subsequent use, regardless of whether the use is a 
        sale, exchange, or submission of the allowance in satisfying a 
        compliance obligation.
            (26) Reversal.--The term ``reversal'' means an intentional 
        or unintentional loss of sequestered carbon dioxide to the 
        atmosphere in significant quantities, as determined by the 
        Administrator, in order to accomplish the purposes of this Act 
        in an effective and efficient manner.
            (27) Rural electric cooperative.--The term ``rural electric 
        cooperative'' means a cooperatively-owned association that was 
        in existence as of October 18, 2007, and is eligible to receive 
        loans under section 4 of the Rural Electrification Act of 1936 
        (7 U.S.C. 904).
            (28) Sequestered and sequestration.--The terms 
        ``sequestered'' and ``sequestration'' mean the capture, 
        permanent separation, isolation, or removal of greenhouse gases 
        from the atmosphere, as determined by the Administrator.
            (29) State regulatory authority.--The term ``State 
        regulatory authority'' means any State agency that has 
        ratemaking authority with respect to the retail rate for 
        distribution service.

               TITLE I--CAPPING GREENHOUSE GAS EMISSIONS

                     Subtitle A--Tracking Emissions

SEC. 1101. PURPOSE.

    The purpose of this subtitle is to establish a Federal greenhouse 
gas registry that--
            (1) is complete, consistent, transparent, and accurate;
            (2) will collect reliable and accurate data that can be 
        used by public and private entities to design efficient and 
        effective energy security initiatives and greenhouse gas 
        emission reduction strategies; and
            (3) will provide appropriate high-quality data to be used 
        for implementing greenhouse gas reduction policies.

SEC. 1102. DEFINITIONS.

    In this subtitle:
            (1) Affected facility.--
                    (A) In general.--The term ``affected facility'' 
                means--
                            (i) a covered facility;
                            (ii) another facility that emits a 
                        greenhouse gas, as determined by the 
                        Administrator; and
                            (iii) at the option of the Administrator, a 
                        vehicle fleet with emissions of more than 
                        10,000 carbon dioxide equivalents in any year, 
                        assuming no double-counting of emissions.
                    (B) Exclusions.--The term ``affected facility'' 
                does not include any facility that--
                            (i) is not a covered facility;
                            (ii) is owned or operated by a small 
                        business (as described in part 121 of title 13, 
                        Code of Federal Regulations (or a successor 
                        regulation)); and
                            (iii) emits fewer than 10,000 carbon 
                        dioxide equivalents in any year.
            (2) Carbon content.--The term ``carbon content'' means the 
        quantity of carbon (in carbon dioxide equivalent) contained in 
        a fuel.
            (3) Climate registry.--The term ``Climate Registry'' means 
        the greenhouse gas emissions registry jointly established and 
        managed by more than 40 States and Indian tribes to collect 
        high-quality greenhouse gas emission data from facilities, 
        corporations, and other organizations to support various 
        greenhouse gas emission reporting and reduction policies for 
        the member States and Indian tribes.
            (4) Feedstock fossil fuel.--The term ``feedstock fossil 
        fuel'' means fossil fuel used as raw material in a 
        manufacturing process.
            (5) Greenhouse gas emissions.--The term ``greenhouse gas 
        emissions'' means emissions of a greenhouse gas, including--
                    (A) stationary combustion source emissions emitted 
                as a result of combustion of fuels in stationary 
                equipment, such as boilers, furnaces, burners, 
                turbines, heaters, incinerators, engines, flares, and 
                other similar sources;
                    (B) process emissions consisting of emissions from 
                chemical or physical processes other than combustion;
                    (C) fugitive emissions consisting of intentional 
                and unintentional emissions from equipment leaks, such 
                as joints, seals, packing, and gaskets, or from piles, 
                pits, cooling towers, and other similar sources; and
                    (D) biogenic emissions resulting from biological 
                processes, such as anaerobic decomposition, 
                nitrification, and denitrification.
            (6) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).
            (7) Registry.--The term ``Registry'' means the Federal 
        greenhouse gas registry established under section 1105(a).
            (8) Source.--The term ``source'' means any building, 
        structure, installation, unit, point, operation, vehicle, land 
        area, or other item that emits or may emit a greenhouse gas.

SEC. 1103. REPORTING REQUIREMENTS.

    (a) In General.--Subject to this section, each affected facility 
shall submit to the Administrator, for inclusion in the Registry, 
periodic reports, including annual and quarterly data, that--
            (1) include the quantity and type of fossil fuels, 
        including feedstock fossil fuels, that are extracted, produced, 
        refined, imported, exported, or consumed at or by the facility;
            (2) include the quantity of hydrofluorocarbons, 
        perfluorocarbons, sulfur hexafluoride, nitrous oxide, carbon 
        dioxide that has been captured and sequestered, and other 
        greenhouse gases generated, produced, imported, exported, or 
        consumed at or by the facility;
            (3) include the quantity of electricity generated, 
        imported, exported, or consumed by or at the facility, and 
        information on the quantity of greenhouse gases emitted when 
        the imported, exported, or consumed electricity was generated, 
        as determined by the Administrator;
            (4) include the aggregate quantity of all greenhouse gas 
        emissions from sources at the facility, including stationary 
        combustion source emissions, process emissions, and fugitive 
        emissions;
            (5) include greenhouse gas emissions expressed in metric 
        tons of each greenhouse gas emitted and in the quantity of 
        carbon dioxide equivalents of each greenhouse gas emitted;
            (6) include a list and description of sources of greenhouse 
        gas emissions at the facility;
            (7) quantify greenhouse gas emissions in accordance with 
        the measurement standards established under section 1104;
            (8) include other data necessary for accurate and complete 
        accounting of greenhouse gas emissions, as determined by the 
        Administrator;
            (9) include an appropriate certification regarding the 
        accuracy and completeness of reported data, as determined by 
        the Administrator; and
            (10) are submitted electronically to the Administrator, in 
        such form and to such extent as may be required by the 
        Administrator.
    (b) De Minimis Exemptions.--
            (1) In general.--The Administrator may determine--
                    (A) whether certain sources at a facility should be 
                considered to be eligible for a de minimis exemption 
                from a requirement for reporting under subsection (a); 
                and
                    (B) the level of greenhouse gases emitted from a 
                source that would qualify for such an exemption.
            (2) Factors.--In making a determination under paragraph 
        (1), the Administrator shall consider the availability and 
        suitability of simplified techniques and tools for quantifying 
        emissions and the cost to measure those emissions relative to 
        the purposes of this title, including the goal of collecting 
        complete and consistent facility-wide data.
    (c) Verification of Report Required.--Before including the 
information from a report required under this section in the Registry, 
the Administrator shall verify the completeness and accuracy of the 
report using information provided under this section, obtained under 
section 9002(c), or obtained under other provisions of law.
    (d) Timing.--
            (1) Calendar years 2004 through 2007.--For a baseline 
        period of calendar years 2004 through 2007, each affected 
        facility shall submit required annual data described in this 
        section to the Administrator not later than March 31, 2009.
            (2) Subsequent calendar years.--For calendar year 2008 and 
        each subsequent calendar year, each affected facility shall 
        submit quarterly data described in this section to the 
        Administrator not later than 60 days after the end of the 
        applicable quarter.
    (e) No Effect on Other Requirements.--Nothing in this title affects 
any requirement in effect as of the date of enactment of this Act 
relating to the reporting of--
            (1) fossil fuel production, refining, importation, 
        exportation, or consumption data;
            (2) greenhouse gas emission data; or
            (3) other relevant data.

SEC. 1104. DATA QUALITY AND VERIFICATION.

    (a) Protocols and Methods.--
            (1) In general.--The Administrator shall establish by 
        regulation, taking into account the work done by the Climate 
        Registry, comprehensive protocols and methods to ensure the 
        accuracy, completeness, consistency, and transparency of data 
        on greenhouse gas emissions and fossil fuel production, 
        refining, importation, exportation, and consumption submitted 
        to the Registry that include--
                    (A) accounting and reporting standards for fossil 
                fuel production, refining, importation, exportation, 
                and consumption;
                    (B) a requirement that, where technically feasible, 
                submitted data are monitored using monitoring systems 
                for fuel flow or emissions, such as continuous emission 
                monitoring systems or equivalent systems of similar 
                rigor, accuracy, quality, and timeliness;
                    (C) a requirement that, if a facility has already 
                been directed to monitor emissions of a greenhouse gas 
                using a continuous emission monitoring system under 
                existing law, that system be used in complying with 
                this Act with respect to the greenhouse gas;
                    (D) for cases in which the Administrator determines 
                that monitoring emissions with the precision, 
                reliability, accessibility, and timeliness similar to 
                that provided by a continuous emission monitoring 
                system are not technologically feasible, standardized 
                methods for calculating greenhouse gas emissions in 
                specific industries using other readily available and 
                reliable information, such as fuel consumption, 
                materials consumption, production, or other relevant 
                activity data, on the condition that those methods do 
                not underreport emissions, as compared with the 
                continuous emission monitoring system;
                    (E) information on the accuracy of measurement and 
                calculation methods;
                    (F) methods to avoid double-counting of greenhouse 
                gas emissions;
                    (G) protocols to prevent an affected facility from 
                avoiding the reporting requirements of this title (such 
                as by reorganizing into multiple entities or 
                outsourcing activities that result in greenhouse gas 
                emissions); and
                    (H) protocols for verification of data submitted by 
                affected facilities.
            (2) Best practices.--The protocols and methods developed 
        under paragraph (1) shall incorporate and conform to the best 
        practices from the most recent Federal, State, and 
        international protocols for the measurement, accounting, 
        reporting, and verification of greenhouse gas emissions to 
        ensure the accuracy, completeness, and consistency of the data.
    (b) Verification; Information by Reporting Entities.--Each affected 
facility shall--
            (1) provide information sufficient for the Administrator to 
        verify, in accordance with the protocols and methods developed 
        under subsection (a), that the fossil fuel data and greenhouse 
        gas emission data of the affected facility have been completely 
        and accurately reported; and
            (2) ensure the submission or retention, for the 5-year 
        period beginning on the date of provision of the information, 
        of--
                    (A) data sources;
                    (B) information on internal control activities;
                    (C) information on assumptions used in reporting 
                emissions and fuels;
                    (D) uncertainty analyses; and
                    (E) other relevant data and information to 
                facilitate the verification of reports submitted to the 
                Registry.
    (c) Waiver of Reporting Requirements.--The Administrator may waive 
reporting requirements for specific facilities if the Administrator 
determines that sufficient and equally or more reliable data are 
available under other provisions of law.
    (d) Missing Data.--If information, satisfactory to the 
Administrator, is not provided for an affected facility, the 
Administrator shall--
            (1) prescribe methods to estimate emissions for the 
        facility for each period for which data are missing, reflecting 
        the highest emission levels that may reasonably have occurred 
        during the period for which data are missing; and
            (2) take appropriate enforcement action pursuant to this 
        section and section 9002(b).

SEC. 1105. FEDERAL GREENHOUSE GAS REGISTRY.

    (a) Establishment.--The Administrator shall establish a Federal 
greenhouse gas registry.
    (b) Administration.--In establishing the Registry, the 
Administrator shall--
            (1) design and operate the Registry;
            (2) establish an advisory body that is broadly 
        representative of private enterprise, agriculture, 
        environmental groups, and State, tribal, and local governments 
        to guide the development and management of the Registry;
            (3) provide coordination and technical assistance for the 
        development of proposed protocols and methods, taking into 
        account the duties carried out by the Climate Registry, to be 
        published by the Administrator;
            (4)(A) develop an electronic format for reporting under 
        guidelines established under section 1104(a)(1); and
            (B) make the electronic format available to reporting 
        entities;
            (5) verify and audit the data submitted by reporting 
        entities;
            (6) establish consistent policies for calculating carbon 
        content and greenhouse gas emissions for each type of fossil 
        fuel reported under section 1103;
            (7) calculate carbon content and greenhouse gas emissions 
        associated with the combustion of fossil fuel data reported by 
        reporting entities;
            (8) immediately publish on the Internet all information 
        contained in the Registry, except in any case in which 
        publishing the information would result in a disclosure of--
                    (A) information vital to national security, as 
                determined by the President; or
                    (B) confidential business information that cannot 
                be derived from information that is otherwise publicly 
                available and that would cause significant calculable 
                competitive harm if published (except that information 
                relating to greenhouse gas emissions shall not be 
                considered to be confidential business information).
    (c) Third-Party Verification.--The Administrator may use the 
services of third parties that have no conflicts of interest to verify 
reports required under section 1103.
    (d) Regulations.--The Administrator shall--
            (1) not later than 180 days after the date of enactment of 
        this Act, propose regulations to carry out this section; and
            (2) not later than July 1, 2008, promulgate final 
        regulations to carry out this section.

SEC. 1106. ENFORCEMENT.

    (a) Civil Actions.--The Administrator may bring a civil action in 
United States district court against the owner or operator of an 
affected facility that fails to comply with any requirement of this 
subtitle.
    (b) Penalty.--Any person that has violated or is violating this 
subtitle shall be subject to a civil penalty of not more than $25,000 
per day of each violation.

                     Subtitle B--Reducing Emissions

SEC. 1201. EMISSION ALLOWANCE ACCOUNT.

    (a) In General.--The Administrator shall establish a separate 
quantity of emission allowances for each of calendar years 2012 through 
2050.
    (b) Identification Numbers.--The Administrator shall assign to each 
emission allowance established under subsection (a) a unique 
identification number that includes the calendar year for which that 
emission allowance was established.
    (c) Legal Status of Emission Allowances.--
            (1) In general.--An emission allowance shall not be a 
        property right.
            (2) Termination or limitation.--Nothing in this Act or any 
        other provision of law limits the authority of the United 
        States to terminate or limit an emission allowance.
            (3) Other provisions unaffected.--Nothing in this Act 
        relating to emission allowances shall affect the application 
        of, or compliance with, any other provision of law to or by a 
        covered facility.
    (d) Allowances for Each Calendar Year.--The numbers of emission 
allowances established by the Administrator for each of calendar years 
2012 through 2050 shall be as follows:


----------------------------------------------------------------------------------------------------------------
                                                                              Number of Emission Allowances (in
                               Calendar Year                                              Millions)
----------------------------------------------------------------------------------------------------------------
2012                                                                                                      5,775
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2013                                                                                                      5,669
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2014                                                                                                      5,562
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2015                                                                                                      5,456
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2016                                                                                                      5,349
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2017                                                                                                      5,243
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2018                                                                                                      5,137
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2019                                                                                                      5,030
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2020                                                                                                      4,924
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2021                                                                                                      4,817
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2022                                                                                                      4,711
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2023                                                                                                      4,605
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2024                                                                                                      4,498
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2025                                                                                                      4,392
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2026                                                                                                      4,286
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2027                                                                                                      4,179
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2028                                                                                                      4,073
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2029                                                                                                      3,966
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2030                                                                                                      3,860
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2031                                                                                                      3,754
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2032                                                                                                      3,647
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2033                                                                                                      3,541
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2034                                                                                                      3,435
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2035                                                                                                      3,328
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2036                                                                                                      3,222
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2037                                                                                                      3,115
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2038                                                                                                      3,009
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2039                                                                                                      2,903
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2040                                                                                                      2,796
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2041                                                                                                      2,690
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2042                                                                                                      2,584
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2043                                                                                                      2,477
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2044                                                                                                      2,371
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2045                                                                                                      2,264
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2046                                                                                                      2,158
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2047                                                                                                      2,052
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2048                                                                                                      1,945
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2049                                                                                                      1,839
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2050                                                                                                      1,732
----------------------------------------------------------------------------------------------------------------

SEC. 1202. COMPLIANCE OBLIGATION.

    (a) In General.--Not later than 90 days after the end of a calendar 
year, the owner or operator of a covered facility shall submit to the 
Administrator an emission allowance, an offset allowance awarded 
pursuant to subtitle D of title II, or an international emission 
allowance obtained in compliance with regulations promulgated under 
section 2502, for each carbon dioxide equivalent of--
            (1) group I greenhouse gas that was emitted by the use of 
        coal by that covered facility during the preceding year;
            (2) group I greenhouse gas that will, assuming no capture 
        and sequestration of that gas, be emitted from the use of any 
        petroleum- or coal-based liquid or gaseous fuel that was 
        produced or imported by that covered facility during the 
        preceding year;
            (3) group I greenhouse gas that was produced for sale or 
        distribution or imported by that facility during the preceding 
        year;
            (4) group II greenhouse gas that was emitted as a byproduct 
        of hydrochlorofluorocarbon production; and
            (5) group I greenhouse gas that will, assuming no capture 
        and destruction or sequestration of that gas, be emitted--
                    (A) from the use of natural gas that was, by that 
                covered facility, processed, imported, or produced and 
                not reinjected into the field; or
                    (B) from the use of natural gas liquids that were 
                processed or imported by that covered facility during 
                the preceding year.
    (b) Requirements.--
            (1) Assumptions.--For the purpose of calculating the 
        submission requirement under paragraphs (2) through (5) of 
        subsection (a), the Administrator shall, subject to subsections 
        (e) through (g), assume that no capture, sequestration, 
        chemical retention, or other retention of a greenhouse gas has 
        occurred or will occur.
            (2) Factors for consideration.--For the purpose of 
        calculating the submission requirement under paragraph (1) of 
        subsection (a), the Administrator shall take into account any 
        metric tons of carbon dioxide that the owner or operator has 
        geologically sequestered during the preceding calendar year.
    (c) Retirement of Allowances.--Immediately upon receipt of an 
emission allowance under subsection (a), the Administrator shall retire 
the emission allowance.
    (d) Determination of Compliance.--Not later than July 1 of each 
year, the Administrator shall determine whether the owners and 
operators of all covered facilities are in full compliance with 
subsection (a) for the preceding year.
    (e) Feedstock Credit.--If the Administrator determines that an 
entity has used a petroleum- or coal-based product, natural gas, or a 
natural gas liquid as a feedstock during any of calendar years 2012 
through 2050, such that no group I greenhouse gas associated with that 
feedstock will be emitted, the Administrator shall establish and 
distribute to that entity a quantity of emission allowances equal to 
the quantity of emission allowances, offset allowances, or 
international emission allowances submitted under subsection (a) for 
that petroleum- or coal-based product, natural gas, or natural gas 
liquid.
    (f) Sequestration Credit.--If the Administrator determines that the 
owner or operator of a covered facility that is subject to the 
submission requirement under any of paragraphs (2) through (5) of 
subsection (a) has geologically sequestered carbon dioxide during any 
of calendar years 2012 through 2050, the Administrator shall establish 
and distribute to that owner or operator a quantity of emission 
allowances equal to the number of metric tons of carbon dioxide that 
the owner or operator geologically sequestered during that calendar 
year.
    (g) Destruction Credit.--If the Administrator determines that an 
entity has destroyed greenhouse gas during any of calendar years 2012 
through 2050, the Administrator shall establish and distribute to that 
entity a quantity of emission allowances equal to the number of carbon 
dioxide equivalents of greenhouse gas that the owner or operator 
destroyed during that calendar year.

SEC. 1203. PENALTY FOR NONCOMPLIANCE.

    (a) Excess Emissions Penalty.--
            (1) In general.--The owner or operator of any covered 
        facility that fails for any year to submit to the Administrator 
        by the deadline described in section 1202(a) or 2303, 1 or more 
        of the emission allowances due pursuant to either of those 
        sections shall be liable for the payment to the Administrator 
        of an excess emissions penalty.
            (2) Amount.--The amount of an excess emissions penalty 
        required to be paid under paragraph (1) shall be, as determined 
        by the Administrator, an amount equal to the product obtained 
        by multiplying--
                    (A) the number of excess emission allowances that 
                the owner or operator failed to submit; and
                    (B) the greater of--
                            (i) $200; or
                            (ii) a dollar figure representing 3 times 
                        the mean market value of an emission allowance 
                        during the calendar year for which the emission 
                        allowances were due.
            (3) Timing.--An excess emissions penalty required under 
        this subsection shall be immediately due and payable to the 
        Administrator, without demand, in accordance with such 
        regulations as shall be promulgated by the Administrator by the 
        date that is 1 year after the date of enactment of this Act.
            (4) Deposit.--The Administrator shall deposit each excess 
        emissions penalty paid under this subsection in the Treasury of 
        the United States.
            (5) No effect on liability.--An excess emissions penalty 
        due and payable by the owner or operator of a covered facility 
        under this subsection shall not diminish the liability of the 
        owner or operator for any fine, penalty, or assessment against 
        the owner or operator for the same violation under any other 
        provision of this Act or any other law.
    (b) Excess Emission Allowance.--
            (1) In general.--The owner or operator of a covered 
        facility that fails for any year to submit to the Administrator 
        by the deadline described in section 1202(a) or 2303 1 or more 
        of the emission allowances due pursuant to either of those 
        sections shall be liable to offset the excess emissions by an 
        equal quantity, in tons, during--
                    (A) the following calendar year; or
                    (B) such longer period as the Administrator may 
                prescribe.
            (2) Plan.--
                    (A) In general.--Not later than 60 days after the 
                end of the calendar year during which a covered 
                facility emits excess emissions, the owner or operator 
                of the covered facility shall submit to the 
                Administrator, and to the State in which the covered 
                facility is located, a proposed plan to achieve the 
                required offsets for the excess emissions.
                    (B) Condition of operation.--Upon approval of a 
                proposed plan described in subparagraph (A) by the 
                Administrator, the plan, as submitted, modified, or 
                conditioned, shall be considered to be a condition of 
                the operating permit for the covered facility, without 
                further review or revision of the permit.
                    (C) Deduction of allowances.--For each covered 
                facility that, in any calendar year, emits excess 
                emissions, the Administrator shall deduct, from 
                emission allowances allocated to the covered facility 
                for the calendar year, or for succeeding years during 
                which offsets are required, emission allowances equal 
                to the excess quantity, in tons, of the excess 
                emissions.
    (c) Prohibition.--It shall be unlawful for the owner or operator of 
any facility liable for a penalty and offset under this section to 
fail--
            (1) to pay the penalty in accordance with this section;
            (2) to provide, and thereafter comply with, a proposed plan 
        for compliance as required by subsection (b)(2); and
            (3) to offset excess emissions as required by subsection 
        (b)(1).
    (d) No Effect on Other Section.--Nothing in this subtitle limits or 
otherwise affects the application of section 9002(b).

SEC. 1204. RULEMAKING.

    Not later than 2 years after the date of enactment of this Act, the 
Administrator shall, by rule, expand the definition of the term 
``covered facility'' to ensure the inclusion of all greenhouse gas 
emissions from natural gas emitted, flared during production or 
processing, or sold for use in the United States.

          TITLE II--MANAGING AND CONTAINING COSTS EFFICIENTLY

                          Subtitle A--Trading

SEC. 2101. SALE, EXCHANGE, AND RETIREMENT OF EMISSION ALLOWANCES.

    Except as otherwise provided in this Act, the lawful holder of an 
emission allowance may, without restriction, sell, exchange, transfer, 
submit for compliance in accordance with section 1202, or retire the 
emission allowance.

SEC. 2102. NO RESTRICTION ON TRANSACTIONS.

    The privilege of purchasing, holding, selling, exchanging, and 
retiring emission allowances shall not be restricted to the owners and 
operators of covered facilities.

SEC. 2103. ALLOWANCE TRANSFER SYSTEM.

    (a) In General.--Not later than 18 months after the date of 
enactment of this Act, the Administrator shall promulgate regulations 
to carry out the provisions of this Act relating to emission 
allowances, including regulations providing that the transfer of 
emission allowances shall not be effective until such date as a written 
certification of the transfer, signed by a responsible official of each 
party to the transfer, is received and recorded by the Administrator in 
accordance with those regulations.
    (b) Transfers.--
            (1) In general.--The regulations promulgated under 
        subsection (a) shall permit the transfer of allowances prior to 
        the issuance of the allowances.
            (2) Deduction and addition of transfers.--A recorded pre-
        allocation transfer of allowances shall be--
                    (A) deducted by the Administrator from the number 
                of allowances that would otherwise be distributed to 
                the transferor; and
                    (B) added to those allowances distributed to the 
                transferee.

SEC. 2104. ALLOWANCE TRACKING SYSTEM.

    The regulations promulgated under section 2103(a) shall include a 
system for issuing, recording, and tracking emission allowances that 
shall specify all necessary procedures and requirements for an orderly 
and competitive functioning of the emission allowance system.

                          Subtitle B--Banking

SEC. 2201. INDICATION OF CALENDAR YEAR.

    An emission allowance submitted to the Administrator by the owner 
or operator of a covered facility in accordance with section 1202(a) 
shall not be required to indicate in the identification number of the 
emission allowance the calendar year for which the emission allowance 
is submitted.

SEC. 2202. EFFECT OF TIME.

    The passage of time shall not, by itself, cause an emission 
allowance to be retired or otherwise diminish the compliance value of 
the emission allowance.

                         Subtitle C--Borrowing

SEC. 2301. REGULATIONS.

    (a) In General.--Not later than 3 years after the date of enactment 
of this Act, the Administrator shall promulgate regulations under 
which, subject to subsection (b), the owner or operator of a covered 
facility may--
            (1) borrow emission allowances from the Administrator; and
            (2) for a calendar year, submit borrowed emission 
        allowances to the Administrator in satisfaction of up to 15 
        percent of the compliance obligation under section 1202(a).
    (b) Limitation.--An emission allowance borrowed under subsection 
(a) shall be an emission allowance established by the Administrator for 
a specific future calendar year under subsection 1201(a).

SEC. 2302. TERM.

    The owner or operator of a covered facility shall not submit, and 
the Administrator shall not accept, a borrowed emission allowance in 
partial satisfaction of the compliance obligation under section 1202(a) 
for any calendar year that is more than 5 years earlier than the 
calendar year included in the identification number of the borrowed 
emission allowance.

SEC. 2303. REPAYMENT WITH INTEREST.

    For each borrowed emission allowance submitted in partial 
satisfaction of the compliance obligation under subsection 1202(a) for 
a particular calendar year (referred to in this section as the ``use 
year''), the number of emission allowances that the owner or operator 
is required to submit under section 1202(a) for the year from which the 
borrowed emission allowance was taken (referred to in this section as 
the ``source year'') shall be increased by an amount equal to the 
product obtained by multiplying--
            (1) 1.1; and
            (2) the number of years beginning after the use year and 
        before the source year.

                          Subtitle D--Offsets

SEC. 2401. OUTREACH INITIATIVE ON REVENUE ENHANCEMENT FOR AGRICULTURAL 
              PRODUCERS.

    (a) Establishment.--The Secretary of Agriculture, acting through 
the Chief of the Natural Resources Conservation Service, the Chief of 
the Forest Service, the Administrator of the Cooperative State 
Research, Education, and Extension Service, and land-grant colleges and 
universities, in consultation with the Administrator and the heads of 
other appropriate departments and agencies, shall establish an outreach 
initiative to provide information to agricultural producers, 
agricultural organizations, foresters, and other landowners about 
opportunities under this subtitle to earn new revenue.
    (b) Components.--The initiative under this section--
            (1) shall be designed to ensure that, to the maximum extent 
        practicable, agricultural organizations and individual 
        agricultural producers, foresters, and other landowners receive 
        detailed practical information about--
                    (A) opportunities to earn new revenue under this 
                subtitle;
                    (B) measurement protocols, monitoring, verifying, 
                inventorying, registering, insuring, and marketing 
                offsets under this title;
                    (C) emerging domestic and international markets for 
                energy crops, allowances, and offsets; and
                    (D) local, regional, and national databases and 
                aggregation networks to facilitate achievement, 
                measurement, registration, and sales of offsets;
            (2) shall provide--
                    (A) outreach materials, including the handbook 
                published under subsection (c), to interested parties;
                    (B) workshops; and
                    (C) technical assistance; and
            (3) may include the creation and development of regional 
        marketing centers or coordination with existing centers 
        (including centers within the Natural Resources Conservation 
        Service or the Cooperative State Research, Education, and 
        Extension Service or at land-grant colleges and universities).
    (c) Handbook.--
            (1) In general.--Not later than 2 years after the date of 
        enactment of this Act, the Secretary of Agriculture, in 
        consultation with the Administrator and after an opportunity 
        for public comment, shall publish a handbook for use by 
        agricultural producers, agricultural cooperatives, foresters, 
        other landowners, offset buyers, and other stakeholders that 
        provides easy-to-use guidance on achieving, reporting, 
        registering, and marketing offsets.
            (2) Distribution.--The Secretary of Agriculture shall 
        ensure, to the maximum extent practicable, that the handbook--
                    (A) is made available through the Internet and in 
                other electronic media;
                    (B) includes, with respect to the electronic form 
                of the handbook described in subparagraph (A), 
                electronic forms and calculation tools to facilitate 
                the petition process described in section 2404; and
                    (C) is distributed widely through land-grant 
                colleges and universities and other appropriate 
                institutions.

SEC. 2402. ESTABLISHMENT OF DOMESTIC OFFSET PROGRAM.

    (a) Alternative Means of Compliance.--Beginning with calendar year 
2012, the owner or operator of a covered entity may satisfy up to 15 
percent of the total allowance submission requirement of the covered 
entity under section 1202(a) by submitting offset allowances generated 
in accordance with this subtitle.
    (b) Regulations Required.--
            (1) In general.--Not later than 18 months after the date of 
        enactment of this Act, the Administrator, in conjunction with 
        the Secretary of Agriculture, shall promulgate regulations 
        authorizing the issuance and certification of offset 
        allowances.
            (2) Certain sources.--
                    (A) In general.--For offsets from sources of 
                greenhouse gases not linked to agricultural, forestry, 
                or other land use-related projects, the regulations 
                promulgated under this subsection shall require that 
                the owner of the project establish the project baseline 
                and register emissions under the Federal Greenhouse Gas 
                Registry established under section 1105.
                    (B) Requirement.--The regulations described in 
                subparagraph (A) shall--
                            (i) authorize the issuance and 
                        certification of offset allowances for 
                        greenhouse gas emission reductions below the 
                        project baseline; and
                            (ii) ensure that those offsets represent 
                        real, verifiable, additional, permanent, and 
                        enforceable reductions in greenhouse gas 
                        emissions or increases in sequestration.
            (3) Agricultural, forestry, and other land use-related 
        projects.--For offsets from certain agricultural, forestry, and 
        other land use-related projects undertaken within the United 
        States, the regulations promulgated under this subsection shall 
        include provisions that--
                    (A) ensure that those offsets represent real, 
                verifiable, additional, permanent, and enforceable 
                reductions in greenhouse gas emissions or increases in 
                biological sequestration;
                    (B) specify the types of offset projects eligible 
                to generate offset allowances, in accordance with 
                section 2403;
                    (C) establish procedures for project initiation and 
                approval, in accordance with section 2404;
                    (D) establish procedures to monitor, quantify, and 
                discount reductions in greenhouse gas emissions or 
                increases in biological sequestration, in accordance 
                with subsections (d) through (g) of section 2404;
                    (E) establish procedures for third-party 
                verification, registration, and issuance of offset 
                allowances, in accordance with section 2405;
                    (F) ensure permanence of offsets by mitigating and 
                compensating for reversals, in accordance with section 
                2406; and
                    (G) assign a unique serial number to each offset 
                allowance issued under this section.
    (c) Offset Allowances Awarded.--The Administrator shall issue 
offset allowances for qualifying emission reductions and biological 
sequestrations from offset projects that satisfy the applicable 
requirements of this subtitle.
    (d) Ownership.--Initial ownership of an offset allowance shall lie 
with a project developer, unless otherwise specified in a legally-
binding contract or agreement.
    (e) Transferability.--An offset allowance generated pursuant to 
this subtitle may be sold, traded, or transferred, on the conditions 
that--
            (1) the offset allowance has not expired or been retired or 
        canceled; and
            (2) liability and responsibility for mitigating and 
        compensating for reversals of registered offset allowances is 
        specified in accordance with section 2406(b).

SEC. 2403. ELIGIBLE OFFSET PROJECT TYPES.

    (a) In General.--Offset allowances from agricultural, forestry, and 
other land use-related projects shall be limited to those allowances 
achieving an offset of 1 or more greenhouse gases by a method other 
than a reduction of combustion of greenhouse gas-emitting fuel.
    (b) Categories of Eligible Offset Projects.--Subject to the 
requirements promulgated pursuant to section 2402(b), the types of 
operations eligible to generate offset allowances under this subtitle 
include--
            (1) agricultural and rangeland sequestration and management 
        practices, including--
                    (A) altered tillage practices;
                    (B) winter cover cropping, continuous cropping, and 
                other means to increase biomass returned to soil in 
                lieu of planting followed by fallowing;
                    (C) conversion of cropland to rangeland or 
                grassland, on the condition that the land has been in 
                nonforest use for at least 10 years before the date of 
                initiation of the project;
                    (D) reduction of nitrogen fertilizer use or 
                increase in nitrogen use efficiency;
                    (E) reduction in the frequency and duration of 
                flooding of rice paddies; and
                    (F) reduction in carbon emissions from organic 
                soils;
            (2) changes in carbon stocks attributed to land use change 
        and forestry activities limited to--
                    (A) afforestation or reforestation of acreage not 
                forested as of October 18, 2007; and
                    (B) forest management resulting in an increase in 
                forest stand volume;
            (3) manure management and disposal, including--
                    (A) waste aeration; and
                    (B) methane capture and combustion;
            (4) subject to the requirements of this subtitle, any other 
        terrestrial offset practices identified by the Administrator, 
        including--
                    (A) the capture or reduction of fugitive greenhouse 
                gas emissions for which no covered facility is required 
                under section 1202(a) to submit any emission 
                allowances, offset allowances, or international 
                emission allowances;
                    (B) methane capture and combustion at 
                nonagricultural facilities; and
                    (C) other actions that result in the avoidance or 
                reduction of greenhouse gas emissions in accordance 
                with section 2402; and
            (5) combinations of any of the offset practices described 
        in paragraphs (1) through (4).

SEC. 2404. PROJECT INITIATION AND APPROVAL.

    (a) Project Approval.--A project developer--
            (1) may submit a petition for offset project approval at 
        any time following the effective date of regulations 
        promulgated under section 2402(b); but
            (2) may not register or issue offset allowances until such 
        approval is received and until after the emission reductions or 
        sequestrations supporting the offset allowances have actually 
        occurred.
    (b) Petition Process.--Prior to offset registration and issuance of 
offset allowances, a project developer shall submit a petition to the 
Administrator, consisting of--
            (1) a copy of the monitoring and quantification plan 
        prepared for the offset project, as described under subsection 
        (d);
            (2) a greenhouse gas initiation certification, as described 
        under subsection (e); and
            (3) subject to the requirements of this subtitle, any other 
        information identified by the Administrator in the regulations 
        promulgated under section 2402 as necessary to meet the 
        objectives of this subtitle.
    (c) Approval and Notification.--
            (1) In general.--Not later than 180 days after the date on 
        which the Administrator receives a complete petition under 
        subsection (b), the Administrator shall--
                    (A) determine whether the monitoring and 
                quantification plan satisfies the applicable 
                requirements of this subtitle;
                    (B) determine whether the greenhouse gas initiation 
                certification indicates a significant deviation in 
                accordance with subsection (e)(3);
                    (C) notify the project developer of the 
                determinations under subparagraphs (A) and (B); and
                    (D) issue offset allowances for approved projects.
            (2) Appeal.--The Administrator shall establish mechanisms 
        for appeal and review of determinations made under this 
        subsection.
    (d) Monitoring and Quantification.--
            (1) In general.--A project developer shall make use of the 
        standardized tools and methods described in this section to 
        monitor, quantify, and discount reductions in greenhouse gas 
        emissions or increases in sequestration.
            (2) Monitoring and quantification plan.--A monitoring and 
        quantification plan shall be used to monitor, quantify, and 
        discount reductions in greenhouse gas emissions or increases in 
        sequestration as described by this subsection.
            (3) Plan completion and retention.--A monitoring and 
        quantification plan shall be--
                    (A) completed for all offset projects prior to 
                offset project initiation; and
                    (B) retained by the project developer for the 
                duration of the offset project.
            (4) Plan requirements.--Subject to section 2402, the 
        Administrator, in conjunction with the Secretary of 
        Agriculture, shall specify the required components of a 
        monitoring and quantification plan, including--
                    (A) a description of the offset project, including 
                project type;
                    (B) a determination of accounting periods;
                    (C) an assignment of reporting responsibility;
                    (D) the contents and timing of public reports, 
                including summaries of the original data, as well as 
                the results of any analyses;
                    (E) a delineation of project boundaries, based on 
                acceptable methods and formats;
                    (F) a description of which of the monitoring and 
                quantification tools developed under subsection (f) are 
                to be used to monitor and quantify changes in 
                greenhouse gas fluxes or carbon stocks associated with 
                a project;
                    (G) a description of which of the standardized 
                methods developed under subsection (g) to be used to 
                determine additionality, estimate the baseline carbon, 
                and discount for leakage;
                    (H) based on the standardized methods chosen in 
                subparagraphs (F) and (G), a determination of 
                uncertainty in accordance with subsection (h);
                    (I) what site-specific data, if any, will be used 
                in monitoring, quantification, and the determination of 
                discounts;
                    (J) a description of procedures for use in managing 
                and storing data, including quality-control standards 
                and methods, such as redundancy in case records are 
                lost;
                    (K) subject to the requirements of this subtitle, 
                any other information identified by the Administrator 
                or the Secretary of Agriculture as being necessary to 
                meet the objectives of this subtitle; and
                    (L) a description of the risk of reversals for the 
                project, including any way in which the proposed 
                project may alter the risk of reversal for the project 
                or other projects in the area.
    (e) Greenhouse Gas Initiation Certification.--
            (1) In general.--In reviewing a petition submitted under 
        subsection (b), the Administrator shall seek to exclude each 
        activity that undermines the integrity of the offset program 
        established under this subtitle, such as the conversion or 
        clearing of land, or marked change in management regime, in 
        anticipation of offset project initiation.
            (2) Greenhouse gas initiation certification requirements.--
        A greenhouse gas initiation certification developed under this 
        subsection shall include--
                    (A) the estimated greenhouse gas flux or carbon 
                stock for the offset project for each of the 4 complete 
                calendar years preceding the effective date of the 
                regulations promulgated under section 2402(b); and
                    (B) the estimated greenhouse gas flux or carbon 
                stock for the offset project, averaged across each of 
                the 4 calendar years preceding the effective date of 
                the regulations promulgated under section 2402(b).
            (3) Determination of significant deviation.--Based on 
        standards developed by the Administrator, in conjunction with 
        the Secretary of Agriculture--
                    (A) each greenhouse gas initiation certification 
                submitted pursuant to this section shall be reviewed; 
                and
                    (B) a determination shall be made as to whether, as 
                a result of activities or behavior inconsistent with 
                the purposes of this title, a significant deviation 
                exists between the average annual greenhouse gas flux 
                or carbon stock and the greenhouse gas flux or carbon 
                stock for a given year.
            (4) Adjustment for projects with significant deviation.--In 
        the case of a significant deviation, the Administrator shall 
        adjust the number of allowances awarded in order to account for 
        the deviation.
    (f) Development of Monitoring and Quantification Tools for Offset 
Projects.--
            (1) In general.--Subject to section 2402(b), the 
        Administrator, in conjunction with the Secretary of 
        Agriculture, shall develop standardized tools for use in the 
        monitoring and quantification of changes in greenhouse gas 
        fluxes or carbon stocks for each offset project type listed 
        under section 2403(b).
            (2) Tool development.--The tools used to monitor and 
        quantify changes in greenhouse gas fluxes or carbon stocks 
        shall, for each project type, include applicable--
                    (A) statistically-sound field and remote sensing 
                sampling methods, procedures, techniques, protocols, or 
                programs;
                    (B) models, factors, equations, or look-up tables; 
                and
                    (C) any other process or tool considered to be 
                acceptable by the Administrator, in conjunction with 
                the Secretary of Agriculture.
    (g) Development of Accounting and Discounting Methods.--
            (1) In general.--The Administrator, in consultation with 
        the Secretary of Agriculture, shall--
                    (A) develop standardized methods for use in 
                accounting for additionality and uncertainty, 
                estimating the baseline, and discounting for leakage 
                for each offset project type listed under section 
                2403(b); and
                    (B) require that leakage be subtracted from 
                reductions in greenhouse gas emissions or increases in 
                sequestration attributable to a project.
            (2) Additionality determination and baseline estimation.--
        The standardized methods used to determine additionality and 
        establish baselines shall, for each project type, at a 
        minimum--
                    (A) in the case of a sequestration project, 
                determine the greenhouse gas flux and carbon stock on 
                comparable land identified on the basis of--
                            (i) similarity in current management 
                        practices;
                            (ii) similarity of regional, State, or 
                        local policies or programs; and
                            (iii) similarity in geographical and 
                        biophysical characteristics;
                    (B) in the case of an emission reduction project, 
                use as a basis emissions from comparable land or 
                facilities; and
                    (C) in the case of a sequestration project or 
                emission reduction project, specify a selected time 
                period.
            (3) Leakage.--The standardized methods used to determine 
        and discount for leakage shall, at a minimum, take into 
        consideration--
                    (A) the scope of the offset system in terms of 
                activities and geography covered;
                    (B) the markets relevant to the offset project;
                    (C) emission intensity per unit of production, both 
                inside and outside of the offset project; and
                    (D) a time period sufficient in length to yield a 
                stable leakage rate.
    (h) Uncertainty for Agricultural and Forestry Projects.--
            (1) In general.--The Administrator, in conjunction with the 
        Secretary of Agriculture, shall develop standardized methods 
        for use in determining and discounting for uncertainty for each 
        offset project type listed under section 2403(b).
            (2) Basis.--The standardized methods used to determine and 
        discount for uncertainty shall be based on--
                    (A) the robustness and rigor of the methods used by 
                a project developer to monitor and quantify changes in 
                greenhouse gas fluxes or carbon stocks;
                    (B) the robustness and rigor of methods used by a 
                project developer to determine additionality and 
                leakage; and
                    (C) an exaggerated proportional discount that 
                increases relative to uncertainty, as determined by the 
                Administrator, in conjunction with the Secretary of 
                Agriculture, to encourage better measurement and 
                accounting.
    (i) Acquisition of New Data and Review of Methods for Agricultural 
and Forestry Projects.--The Administrator, in conjunction with the 
Secretary of Agriculture, shall--
            (1) establish a comprehensive field sampling program to 
        improve the scientific bases on which the standardized tools 
        and methods developed under this section are based; and
            (2) review and revise the standardized tools and methods 
        developed under this section, based on--
                    (A) validation of existing methods, protocols, 
                procedures, techniques, factors, equations, or models;
                    (B) development of new methods, protocols, 
                procedures, techniques, factors, equations, or models;
                    (C) increased availability of field data or other 
                datasets; and
                    (D) any other information identified by the 
                Administrator, in conjunction with the Secretary of 
                Agriculture, that is necessary to meet the objectives 
                of this subtitle.
    (j) Exclusion.--No activity for which any emission allowances are 
received under subtitle G of title III shall generate offset allowances 
under this subtitle.

SEC. 2405. OFFSET VERIFICATION AND ISSUANCE OF ALLOWANCES.

    (a) In General.--Offset allowances may be claimed for net emission 
reductions or increases in sequestration annually, after accounting for 
any necessary discounts in accordance with section 2404, by submitting 
a verification report for an offset project to the Administrator.
    (b) Offset Verification.--
            (1) Scope of verification.--A verification report for an 
        offset project shall--
                    (A) be completed by a verifier accredited in 
                accordance with paragraph (3); and
                    (B) shall be developed taking into consideration--
                            (i) the information and methodology 
                        contained within a monitoring and 
                        quantification plan;
                            (ii) data and subsequent analysis of the 
                        offset project, including--
                                    (I) quantification of net emission 
                                reductions or increases in 
                                sequestration;
                                    (II) determination of 
                                additionality;
                                    (III) calculation of leakage;
                                    (IV) assessment of permanence;
                                    (V) discounting for uncertainty; 
                                and
                                    (VI) the adjustment of net emission 
                                reductions or increases in 
                                sequestration by the discounts 
                                determined under clauses (II) through 
                                (V); and
                            (iii) subject to the requirements of this 
                        subtitle, any other information identified by 
                        the Administrator as being necessary to achieve 
                        the purposes of this subtitle.
            (2) Verification report requirements.--The Administrator 
        shall specify the required components of a verification report, 
        including--
                    (A) the quantity of offsets generated;
                    (B) the amount of discounts applied;
                    (C) an assessment of methods (and the 
                appropriateness of those methods);
                    (D) an assessment of quantitative errors or 
                omissions (and the effect of the errors or omissions on 
                offsets);
                    (E) any potential conflicts of interest between a 
                verifier and project developer; and
                    (F) any other provision that the Administrator 
                considers to be necessary to achieve the purposes of 
                this subtitle.
            (3) Verifier accreditation.--
                    (A) In general.--Not later than 18 months after the 
                date of enactment of this Act, the Administrator shall 
                promulgate regulations establishing a process and 
                requirements for accreditation by a third-party 
                verifier that has no conflicts of interest.
                    (B) Public accessibility.--Each verifier meeting 
                the requirements for accreditation in accordance with 
                this paragraph shall be listed in a publicly-accessible 
                database, which shall be maintained and updated by the 
                Administrator.
    (c) Registration and Awarding of Offsets.--
            (1) In general.--Not later than 90 days after the date on 
        which the Administrator receives a verification report required 
        under subsection (b), the Administrator shall--
                    (A) determine whether the offsets satisfy the 
                applicable requirements of this subtitle; and
                    (B) notify the project developer of that 
                determination.
            (2) Affirmative determination.--In the case of an 
        affirmative determination under paragraph (1), the 
        Administrator shall--
                    (A) register the offset allowances in accordance 
                with this subtitle; and
                    (B) issue the offset allowances.
            (3) Appeal and review.--The Administrator shall establish 
        mechanisms for the appeal and review of determinations made 
        under this subsection.

SEC. 2406. TRACKING OF REVERSALS FOR SEQUESTRATION PROJECTS.

    (a) Reversal Certification.--
            (1) In general.--Subject to section 2402, the Administrator 
        shall promulgate regulations requiring the submission of a 
        reversal certification for each offset project on an annual 
        basis following the registration of offset allowances.
            (2) Requirements.--A reversal certification submitted in 
        accordance with this subsection shall state--
                    (A) whether any unmitigated reversal relating to 
                the offset project has occurred in the year preceding 
                the year in which the certification is submitted; and
                    (B) the quantity of each unmitigated reversal.
    (b) Effect on Offset Allowances.--
            (1) Invalidity.--The Administrator shall declare invalid 
        all offset allowances issued for any offset project that has 
        undergone a complete reversal.
            (2) Partial reversal.--In the case of an offset project 
        that has undergone a partial reversal, the Administrator shall 
        render invalid offset allowances issued for the offset project 
        in direct proportion to the degree of reversal.
    (c) Accountability for Reversals.--Liability and responsibility for 
compensation of a reversal of a registered offset allowance under 
subsection (a) shall lie with the owner of the offset allowance, as 
described in section 2402.
    (d) Compensation for Reversals.--The unmitigated reversal of 1 or 
more registered offset allowances that were submitted for the purpose 
of compliance with section 1202(a) shall require the submission of--
            (1) an equal number of offset allowances; or
            (2) a combination of offset allowances and emission 
        allowances equal to the unmitigated reversal.
    (e) Project Termination.--A project developer may cease 
participation in the domestic offset program established under this 
subtitle at any time, on the condition that any registered allowances 
awarded for increases in sequestration have been compensated for by the 
project developer through the submission of an equal number of any 
combination of offset allowances and emission allowances.

SEC. 2407. EXAMINATIONS.

    (a) Regulations.--Not later than 2 years after the date of 
enactment of this Act, the Administrator, in conjunction with the 
Secretary of Agriculture, shall promulgate regulations governing the 
examination and auditing of offset allowances.
    (b) Requirements.--The regulations promulgated under this section 
shall specifically consider--
            (1) principles for initiating and conducting examinations;
            (2) the type or scope of examinations, including--
                    (A) reporting and recordkeeping; and
                    (B) site review or visitation;
            (3) the rights and privileges of an examined party; and
            (4) the establishment of an appeal process.

SEC. 2408. TIMING AND THE PROVISION OF OFFSET ALLOWANCES.

    (a) Initiation of Offset Projects.--An offset project that 
commences operation on or after the effective date of regulations 
promulgated under section 2407(a) shall be eligible to generate offset 
allowances under this subtitle if the offset project meets the other 
applicable requirements of this subtitle.
    (b) Pre-Existing Projects.--
            (1) In general.--The Administrator may allow for the 
        transition into the Registry of offset projects and banked 
        offset allowances that, as of the effective date of regulations 
        promulgated under section 2407(a), are registered under or meet 
        the standards of the Climate Registry, the California Action 
        Registry, the GHG Registry, the Chicago Climate Exchange, the 
        GHG CleanProjects Registry, or any other Federal, State, or 
        private reporting programs or registries if the Administrator 
        determines that such other offset projects and banked offset 
        allowances under those other programs or registries satisfy the 
        applicable requirements of this subtitle.
            (2) Exception.--An offset allowance that is expired, 
        retired, or canceled under any other offset program, registry, 
        or market as of the effective date of regulations promulgated 
        under section 2407(a) shall be ineligible for transition into 
        the Registry.

SEC. 2409. OFFSET REGISTRY.

    In addition to the requirements established by section 2404, an 
offset allowance registered under this subtitle shall be accompanied in 
the Registry by--
            (1) a verification report submitted pursuant to section 
        2405(a);
            (2) a reversal certification submitted pursuant to section 
        2406(b); and
            (3) subject to the requirements of this subtitle, any other 
        information identified by the Administrator as being necessary 
        to achieve the purposes of this subtitle.

SEC. 2410. ENVIRONMENTAL CONSIDERATIONS.

    (a) Coordination To Minimize Negative Effects.--In promulgating 
regulations under this subtitle, the Administrator, in conjunction with 
the Secretary of Agriculture, shall act (including by rejecting 
projects, if necessary) to avoid or minimize, to the maximum extent 
practicable, adverse effects on human health or the environment 
resulting from the implementation of offset projects under this 
subtitle.
    (b) Report on Positive Effects.--Not later than 2 years after the 
date of enactment of this Act, the Administrator, in conjunction with 
the Secretary of Agriculture, shall submit to Congress a report 
detailing--
            (1) the incentives, programs, or policies capable of 
        fostering improvements to human health or the environment in 
        conjunction with the implementation of offset projects under 
        this subtitle; and
            (2) the cost of those incentives, programs, or policies.
    (c) Use of Native Plant Species in Offset Projects.--Not later than 
18 months after the date of enactment of this Act, the Administrator, 
in conjunction with the Secretary of Agriculture, shall promulgate 
regulations for the selection, use, and storage of native and nonnative 
plant materials--
            (1) to ensure native plant materials are given primary 
        consideration, in accordance with applicable Department of 
        Agriculture guidance for use of native plant materials;
            (2) to prohibit the use of Federal- or State-designated 
        noxious weeds; and
            (3) to prohibit the use of a species listed by a regional 
        or State invasive plant council within the applicable region or 
        State.

SEC. 2411. PROGRAM REVIEW.

    Not later than 5 years after the date of enactment of this Act, and 
periodically thereafter, the Administrator, in conjunction with the 
Secretary of Agriculture, shall review and revise, as necessary to 
achieve the purposes of this Act, the regulations promulgated under 
this subtitle.

SEC. 2412. RETAIL CARBON OFFSETS.

    (a) Definition of Retail Carbon Offset.--In this section, the term 
``retail carbon offset'' means any carbon credit or carbon offset that 
cannot be used in satisfaction of any mandatory compliance obligation 
under a regulatory system for reducing greenhouse gas emissions.
    (b) Qualifying Levels and Requirements.--Not later than January 1, 
2009, the Administrator shall establish new qualifying levels and 
requirements for Energy Star certification for retail carbon offsets, 
effective beginning January 1, 2010.

             Subtitle E--International Emission Allowances

SEC. 2501. USE OF INTERNATIONAL EMISSION ALLOWANCES.

    The owner or operator of a covered facility may satisfy up to 15 
percent of the allowance submission requirement of the covered facility 
under section 1202(a) by submitting emission allowances obtained on a 
foreign greenhouse gas emissions trading market, on the condition that 
the Administrator has certified the market in accordance with the 
regulations promulgated pursuant to section 2502(a).

SEC. 2502. REGULATIONS.

    (a) In General.--Not later than 2 years after the date of enactment 
of this Act, the Administrator shall promulgate regulations, taking 
into consideration protocols adopted in accordance with the United 
Nations Framework Convention on Climate Change, done at New York on May 
9, 1992--
            (1) approving the use under this subtitle of emission 
        allowances from such foreign greenhouse gas emissions trading 
        markets as the regulations may establish; and
            (2) permitting the use of international emission allowances 
        from the foreign country that issued the emission allowances.
    (b) Requirements.--The regulations promulgated under subsection (a) 
shall require that, in order to be approved for use under this 
subtitle--
            (1) an emission allowance shall have been issued by a 
        foreign country pursuant to a governmental program that imposes 
        mandatory absolute tonnage limits on greenhouse gas emissions 
        from the foreign country, or 1 or more industry sectors in that 
        country, pursuant to protocols described in subsection (a); and
            (2) the governmental program be of comparable stringency to 
        the program established by this Act, including comparable 
        monitoring, compliance, and enforcement.

SEC. 2503. FACILITY CERTIFICATION.

    The owner or operator of a covered facility who submits an 
international emission allowance under this subtitle shall certify that 
the allowance has not been retired from use in the registry of the 
applicable foreign country.

               Subtitle F--Carbon Market Efficiency Board

SEC. 2601. PURPOSES.

    The purposes of this subtitle are--
            (1) to ensure that the imposition of limits on greenhouse 
        gas emissions will not significantly harm the economy of the 
        United States; and
            (2) to establish a Carbon Market Efficiency Board to ensure 
        the implementation and maintenance of a stable, functioning, 
        and efficient market in emission allowances.

SEC. 2602. ESTABLISHMENT OF CARBON MARKET EFFICIENCY BOARD.

    (a) Establishment.--There is established a board, to be known as 
the ``Carbon Market Efficiency Board'' (referred to in this subtitle as 
the ``Board'').
    (b) Purposes.--The purposes of the Board are--
            (1) to promote the achievement of the purposes of this Act;
            (2) to observe the national greenhouse gas emission market 
        and evaluate periods during which the cost of emission 
        allowances provided under Federal law might pose significant 
        harm to the economy; and
            (3) to submit to the President and Congress, and publish on 
        the Internet, quarterly reports--
                    (A) describing--
                            (i) the status of the emission allowance 
                        market established under this Act;
                            (ii) the economic cost and benefits of the 
                        market, regional, industrial, and consumer 
                        responses to the market;
                            (iii) where practicable, energy investment 
                        responses to the market;
                            (iv) any corrective measures that should be 
                        carried out to relieve excessive net costs of 
                        the market;
                            (v) plans to compensate for those measures 
                        to ensure that the long-term emission-reduction 
                        goals of this Act are achieved; and
                            (vi) any instances of actual or potential 
                        fraud on, or manipulation of, the market that 
                        the Board has identified, and the effects of 
                        such fraud or manipulation;
                    (B) that are timely and succinct to ensure regular 
                monitoring of market trends; and
                    (C) that are prepared independently by the Board.
    (c) Membership.--
            (1) Composition.--The Board shall be composed of--
                    (A) 7 members who are citizens of the United 
                States, to be appointed by the President, by and with 
                the advice and consent of the Senate; and
                    (B) an advisor who is a scientist with expertise in 
                climate change and the effects of climate change on the 
                environment, to be appointed by the President, by and 
                with the advice and consent of the Senate.
            (2) Requirements.--In appointing members of the Board under 
        paragraph (1), the President shall--
                    (A) ensure fair representation of the financial, 
                agricultural, industrial, and commercial sectors, and 
                the geographical regions, of the United States, and 
                include a representative of consumer interests;
                    (B) appoint not more than 1 member from each such 
                geographical region; and
                    (C) ensure that not more than 4 members of the 
                Board serving at any time are affiliated with the same 
                political party.
            (3) Compensation.--
                    (A) In general.--A member of the Board shall be 
                compensated at a rate equal to the daily equivalent of 
                the annual rate of basic pay prescribed for level II of 
                the Executive Schedule under section 5313 of title 5, 
                United States Code, for each day (including travel 
                time) during which the member is engaged in the 
                performance of the duties of the Board.
                    (B) Chairperson.--The Chairperson of the Board 
                shall be compensated at a rate equal to the daily 
                equivalent of the annual rate of basic pay prescribed 
                for level I of the Executive Schedule under section 
                5312 of title 5, United States Code, for each day 
                (including travel time) during which the member is 
                engaged in the performance of the duties of the Board.
            (4) Prohibitions.--
                    (A) Conflicts of interest.--An individual employed 
                by, or holding any official relationship (including any 
                shareholder) with, any entity engaged in the 
                generation, transmission, distribution, or sale of 
                energy, an individual who has any pecuniary interest in 
                the generation, transmission, distribution, or sale of 
                energy, or an individual who has a pecuniary interest 
                in the implementation of this Act, shall not be 
                appointed to the Board under this subsection.
                    (B) No other employment.--A member of the Board 
                shall not hold any other employment during the term of 
                service of the member.
    (d) Term; Vacancies.--
            (1) Term.--
                    (A) In general.--The term of a member of the Board 
                shall be 14 years, except that the members first 
                appointed to the Board shall be appointed for terms in 
                a manner that ensures that--
                            (i) the term of not more than 1 member 
                        shall expire during any 2-year period; and
                            (ii) no member serves a term of more than 
                        14 years.
                    (B) Oath of office.--A member shall take the oath 
                of office of the Board by not later than 15 days after 
                the date on which the member is appointed under 
                subsection (c)(1).
                    (C) Removal.--
                            (i) In general.--A member may be removed 
                        from the Board on determination of the 
                        President for cause.
                            (ii) Notification.--Not later than 30 days 
                        before removing a member from the Board for 
                        cause under clause (i), the President shall 
                        provide to Congress an advance notification of 
                        the determination by the President to remove 
                        the member.
            (2) Vacancies.--
                    (A) In general.--A vacancy on the Board--
                            (i) shall not affect the powers of the 
                        Board; and
                            (ii) shall be filled in the same manner as 
                        the original appointment was made.
                    (B) Service until new appointment.--A member of the 
                Board the term of whom has expired or otherwise been 
                terminated shall continue to serve until the date on 
                which a replacement is appointed under subparagraph 
                (A)(ii), if the President determines that service to be 
                appropriate.
    (e) Chairperson and Vice-Chairperson.--Of members of the Board, the 
President shall appoint--
            (1) 1 member to serve as Chairperson of the Board for a 
        term of 4 years; and
            (2) 1 member to serve as Vice-Chairperson of the Board for 
        a term of 4 years.
    (f) Meetings.--
            (1) Initial meeting.--The Board shall hold the initial 
        meeting of the Board as soon as practicable after the date on 
        which all members have been appointed to the Board under 
        subsection (c)(1).
            (2) Presiding officer.--A meeting of the Board shall be 
        presided over by--
                    (A) the Chairperson;
                    (B) in any case in which the Chairperson is absent, 
                the Vice-Chairperson; or
                    (C) in any case in which the Chairperson and Vice-
                Chairperson are absent, a chairperson pro tempore, to 
                be elected by the members of the Board.
            (3) Quorum.--Four members of the Board shall constitute a 
        quorum for a meeting of the Board.
            (4) Open meetings.--The Board shall be subject to section 
        552b of title 5, United States Code (commonly known as the 
        ``Government in the Sunshine Act'').
    (g) Records.--The Board shall be subject to section 552 of title 5, 
United States Code (commonly known as the ``Freedom of Information 
Act'').
    (h) Review by Government Accountability Office.--Not later than 
January 1, 2013, and annually thereafter, the Comptroller General of 
the United States shall conduct a review of the efficacy of the Board 
in fulfilling the purposes and duties of the Board under this subtitle.

SEC. 2603. DUTIES.

    (a) Information Gathering.--
            (1) Authority.--The Board shall collect and analyze 
        relevant market information to promote a full understanding of 
        the dynamics of the emission allowance market established under 
        this Act.
            (2) Information.--The Board shall gather such information 
        as the Board determines to be appropriate regarding the status 
        of the market, including information relating to--
                    (A) emission allowance allocation and availability;
                    (B) the price of emission allowances;
                    (C) macro- and micro-economic effects of unexpected 
                significant increases and decreases in emission 
                allowance prices, or shifts in the emission allowance 
                market, should those increases, decreases, or shifts 
                occur;
                    (D) economic effect thresholds that could warrant 
                implementation of cost relief measures described in 
                section 2604(a) after the initial 2-year period 
                described in subsection (d)(2);
                    (E) in the event any cost relief measures described 
                in section 2604(a) are taken, the effects of those 
                measures on the market;
                    (F) maximum levels of cost relief measures that are 
                necessary to achieve avoidance of economic harm and 
                preserve achievement of the purposes of this Act; and
                    (G) the success of the market in promoting 
                achievement of the purposes of this Act.
    (b) Treatment as Primary Activity.--
            (1) In general.--During the initial 2-year period of 
        operation of the Board, information gathering under subsection 
        (a) shall be the primary activity of the Board.
            (2) Subsequent authority.--After the 2-year period 
        described in paragraph (1), the Board shall assume authority to 
        implement the cost-relief measures described in section 
        2604(a).
    (c) Study.--
            (1) In general.--During the 2-year period beginning on the 
        date on which the emission allowance market established under 
        this Act begins operation, the Board shall conduct a study of 
        other markets for tradeable permits to emit covered greenhouse 
        gases.
            (2) Report.--Not later than 180 days after the beginning of 
        the period described in paragraph (1), the Board shall submit 
        to Congress, and publish on the Internet, a report describing 
        the status of the market, specifically with respect to 
        volatility within the market and the average price of emission 
        allowances during that 180-day period.
    (d) Employment of Cost Relief Measures.--
            (1) In general.--If the Board determines that the emission 
        allowance market established under this Act poses a significant 
        harm to the economy of the United States, the Board shall carry 
        out such cost relief measures relating to that market as the 
        Board determines to be appropriate under section 2604(a).
            (2) Initial period.--During the 2-year period beginning on 
        the date on which the emission allowance market established 
        under this Act begins operation, if the Board determines that 
        the average daily closing price of emission allowances during a 
        180-day period exceeds the upper range of the estimate provided 
        under section 2605, the Board shall--
                    (A) increase the quantity of emission allowances 
                that covered facilities may borrow from the prescribed 
                allocations of the covered facilities for future years; 
                and
                    (B) take subsequent action as described in section 
                2604(a)(2).
            (3) Requirements.--Any action carried out pursuant to this 
        subsection shall be subject to the requirements of section 
        2604(a)(3)(B).
    (e) Reports.--The Board shall submit to the President and Congress 
quarterly reports--
            (1) describing the status of the emission allowance market 
        established under this Act, the economic effects of the market, 
        regional, industrial, and consumer responses to the market, 
        energy investment responses to the market, the effects on the 
        market of any fraud on, or manipulation of, the market that the 
        Board has identified, any corrective measures that should be 
        carried out to relieve excessive costs of the market, and plans 
        to compensate for those measures; and
            (2) that are prepared independently by the Board, and not 
        in partnership with Federal agencies.

SEC. 2604. POWERS.

    (a) Cost Relief Measures.--
            (1) In general.--Beginning on the day after the date of 
        expiration of the 2-year period described in section 2603(b), 
        the Board may carry out 1 or more of the following cost relief 
        measures to ensure functioning, stable, and efficient markets 
        for emission allowances:
                    (A) Increase the quantity of emission allowances 
                that covered facilities may borrow from the prescribed 
                allocations of the covered facilities for future years.
                    (B) Expand the period during which a covered 
                facility may repay the Administrator for an emission 
                allowance as described in subparagraph (A).
                    (C) Lower the interest rate at which an emission 
                allowance may be borrowed as described in subparagraph 
                (A).
                    (D) Increase the quantity of emission allowances 
                obtained on a foreign greenhouse gas emissions trading 
                market that the owner or operator of any covered 
                facility may use to satisfy the allowance submission 
                requirement of the covered facility under section 
                1202(a), on the condition that the Administrator has 
                certified the market in accordance with the regulations 
                promulgated pursuant to section 2502(a).
                    (E) Increase the quantity of offset allowances 
                generated in accordance with subtitle D that the owner 
                or operator of any covered facility may use to satisfy 
                the total allowance submission requirement of the 
                covered facility under section 1202(a).
                    (F) Expand the total quantity of emission 
                allowances made available to all covered facilities at 
                any given time by borrowing against the total allowable 
                quantity of emission allowances to be provided for 
                future years.
            (2) Subsequent actions.--On determination by the Board to 
        carry out a cost relief measure pursuant to paragraph (1), the 
        Board shall--
                    (A) allow the cost relief measure to be used only 
                during the applicable allocation year;
                    (B) exercise the cost relief measure incrementally, 
                and only as needed to avoid significant economic harm 
                during the applicable allocation year;
                    (C) specify the terms of the relief to be achieved 
                using the cost relief measure, including requirements 
                for entity-level or national market-level compensation 
                to be achieved by a specific date or within a specific 
                time period;
                    (D) in accordance with section 2603(e), submit to 
                the President and Congress a report describing the 
                actions carried out by the Board and recommendations 
                for the terms under which the cost relief measure 
                should be authorized by Congress and carried out by 
                Federal entities; and
                    (E) evaluate, at the end of the applicable 
                allocation year, actions that need to be carried out 
                during subsequent years to compensate for any cost 
                relief measure carried out during the applicable 
                allocation year.
            (3) Action on expansion of borrowing.--
                    (A) In general.--If the Board carries out a cost 
                relief measure pursuant to paragraph (1) that results 
                in the expansion of borrowing of emission allowances 
                under this Act, and if the average daily closing price 
                of emission allowances for the 180-day period beginning 
                on the date on which borrowing is so expanded exceeds 
                the upper range of the estimate provided under section 
                2605, the Board shall increase the quantity of emission 
                allowances available for the applicable allocation year 
                in accordance with this paragraph.
                    (B) Requirements.--An increase in the quantity of 
                emission allowances under subparagraph (A) shall--
                            (i) apply to all covered facilities;
                            (ii) be allocated in accordance with the 
                        applicable formulas and procedures established 
                        under this Act;
                            (iii) be equal to not more than 5 percent 
                        of the total quantity of emission allowances 
                        otherwise available for the applicable 
                        allocation year under this Act;
                            (iv) remain in effect only for the 
                        applicable allocation year;
                            (v) specify the date by which the increase 
                        shall be repaid by covered facilities through a 
                        proportionate reduction of emission allowances 
                        available for subsequent allocation years; and
                            (vi) require the repayment under clause (v) 
                        to be made by not later than the date that is 
                        15 years after the date on which the increase 
                        is provided.
    (b) Assessments.--Not more frequently than semiannually, the Board 
may levy on owners and operators of covered facilities an assessment 
sufficient to pay the estimated expenses of the Board and the salaries 
of members of and employees of the Board during the 180-day period 
beginning on the date on which the assessment is levied, taking into 
account any deficit carried forward from the preceding 180-day period.
    (c) Limitations.--Nothing in this section gives the Board the 
authority--
            (1) to consider or prescribe entity-level petitions for 
        relief from the costs of an emission allowance allocation or 
        trading program established under Federal law;
            (2) to carry out any investigative or punitive process 
        under the jurisdiction of any Federal or State court;
            (3) to interfere with, modify, or adjust any emission 
        allowance allocation scheme established under Federal law; or
            (4) to modify the total quantity of emission allowances 
        issued under this Act for the period of calendar years 2012 
        through 2050.

SEC. 2605. ESTIMATE OF COSTS TO ECONOMY OF LIMITING GREENHOUSE GAS 
              EMISSIONS.

    Not later than July 1, 2014, the Administrator, using economic and 
scientific analyses, shall submit to Congress a report that describes--
            (1) the projected price range at which emission allowances 
        are expected to trade during the 2-year period of the initial 
        greenhouse gas emission market established under Federal law; 
        and
            (2) the projected impact of that market on the economy of 
        the United States.

           TITLE III--ALLOCATING AND DISTRIBUTING ALLOWANCES

                          Subtitle A--Auctions

SEC. 3101. ALLOCATION FOR DEPOSITS INTO DEFICIT REDUCTION FUND.

    (a) Establishment.--There is established in the Treasury a fund to 
be known as the ``Deficit Reduction Fund'' (referred to in this section 
as the ``Fund'').
    (b) Appropriations.--No disbursements shall be made from the Fund 
except pursuant to an appropriation Act.
    (c) Allocation.--Not later than April 1, 2011, and annually 
thereafter through calendar year 2049, the Administrator shall allocate 
to the Corporation a percentage of the quantity of emission allowances 
established for the 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
  2047.................................  15.99
  2048.................................  15.99
  2049.................................  15.99
  2050.................................  15.99
 

    (d) Auctioning.--Not later than 330 days before the beginning of a 
calendar year identified in the table contained in subsection (c), the 
Corporation shall auction all of the emission allowances allocated to 
the Corporation for the calendar year under subsection (c).
    (e) Deposits.--The Corporation shall deposit all proceeds of 
auctions conducted pursuant to subsection (d), immediately upon receipt 
of those proceeds, in the Fund.

SEC. 3102. ALLOCATION FOR EARLY AUCTIONS.

    Not later than 180 days after the date of enactment of this Act, 
the Administrator shall allocate 5 percent of the quantity of remainder 
emission allowances for calendar year 2012, 3 percent of the quantity 
of remainder emission allowances for calendar year 2013, and 1 percent 
of the quantity of remainder emission allowances for calendar 2014, to 
the Corporation for early auctioning in accordance with section 4301.

SEC. 3103. ALLOCATION FOR ANNUAL AUCTIONS.

    Not later than April 1, 2011, and annually thereafter through 
calendar year 2049, the Administrator shall allocate to the Corporation 
for annual auctioning a percentage of the quantity of remainder 
emission allowances for the following calendar year, as follows:


----------------------------------------------------------------------------------------------------------------
                                                                             Percentage of Quantity of Remainder
                               Calendar Year                                   Emission Allowances Allocated to
                                                                                       the Corporation
----------------------------------------------------------------------------------------------------------------
2012                                                                                                       21.5
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2013                                                                                                       24.5
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2014                                                                                                       27.5
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2015                                                                                                       29.5
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2016                                                                                                       30.5
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2017                                                                                                       31.5
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2018                                                                                                       33.5
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2019                                                                                                       34.5
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2020                                                                                                       36.5
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2021                                                                                                       39.5
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2022                                                                                                         41
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2023                                                                                                         43
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2024                                                                                                      45.75
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2025                                                                                                       48.5
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2026                                                                                                       51.5
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2027                                                                                                       55.5
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2028                                                                                                       58.5
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2029                                                                                                       61.5
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2030                                                                                                      62.75
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2031                                                                                                       69.5
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2032                                                                                                       69.5
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2033                                                                                                       69.5
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2034                                                                                                       69.5
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2035                                                                                                       69.5
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2036                                                                                                       69.5
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2037                                                                                                       69.5
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2038                                                                                                       69.5
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2039                                                                                                       69.5
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2040                                                                                                       69.5
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2041                                                                                                       69.5
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2042                                                                                                       69.5
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2043                                                                                                       69.5
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2044                                                                                                       69.5
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2045                                                                                                       69.5
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2046                                                                                                       69.5
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2047                                                                                                       69.5
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2048                                                                                                       69.5
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2049                                                                                                       69.5
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2050                                                                                                       69.5
----------------------------------------------------------------------------------------------------------------

                        Subtitle B--Early Action

SEC. 3201. ALLOCATION.

    Not later than 2 years after the date of enactment of this Act, the 
Administrator shall allocate to owners or operators of covered 
facilities and other facilities that emit greenhouse gas, in 
recognition of actions of the owners and operators taken since January 
1, 1994, that resulted in verified and credible reductions of 
greenhouse gas emissions--
            (1) 5 percent of the quantity of remainder emission 
        allowances for calendar year 2012;
            (2) 4 percent of the quantity of remainder emission 
        allowances for calendar year 2013;
            (3) 3 percent of the quantity of remainder emission 
        allowances for calendar year 2014;
            (4) 2 percent of the quantity of remainder emission 
        allowances for calendar year 2015; and
            (5) 1 percent of the quantity of remainder emission 
        allowances for calendar year 2016.

SEC. 3202. DISTRIBUTION.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Administrator shall establish, by regulation, 
procedures and standards for use in distributing, to owners and 
operators of covered facilities and other facilities that emit 
greenhouse gas, emission allowances allocated under section 3201.
    (b) Consideration.--The procedures and standards established under 
subsection (a) shall provide for consideration of verified and credible 
emission reductions registered before the date of enactment of this Act 
under--
            (1) the Climate Leaders Program, or any other voluntary 
        greenhouse gas reduction program of the United States 
        Environmental Protection Agency and United States Department of 
        Energy;
            (2) the Voluntary Reporting of Greenhouse Gases Program of 
        the Energy Information Administration;
            (3) State or regional greenhouse gas emission reduction 
        programs that include systems for tracking and verifying the 
        greenhouse gas emission reductions; and
            (4) voluntary entity programs that resulted in entity-wide 
        reductions in greenhouse gas emissions.
    (c) Distribution.--Not later than 4 years after the date of 
enactment of this Act, the Administrator shall distribute all emission 
allowances allocated under section 3201.

                           Subtitle C--States

SEC. 3301. ALLOCATION FOR ENERGY SAVINGS.

    (a) Allocation.--Not later than April 1, 2011, and annually 
thereafter through calendar year 2049, the Administrator shall allocate 
2 percent of the quantity of remainder emission allowances for the 
following calendar year among States that have adopted regulations by 
not later than the date on which the allowance allocations are made, 
that subject regulated natural gas and electric utilities that deliver 
gas or electricity in those States to regulations that--
            (1) automatically adjust the rates charged by natural gas 
        and electric utilities to fully recover fixed costs of service 
        without regard to whether their actual sales are higher or 
        lower than the forecast of sales on which the tariffed rates 
        were based; and
            (2) make cost-effective energy-efficiency expenditures by 
        investor-owned natural gas or electric utilities at least as 
        rewarding to their shareholders as power or energy purchases, 
        or expenditures on new energy supplies or infrastructure.
    (b) Allocation for Building Efficiency.--Not later than January 1, 
2012, and annually thereafter through January 1, 2050, the 
Administrator shall allocate 1 percent of the quantity of remainder 
emission allowances among States that are in compliance with section 
304(c) of the Energy Conservation and Production Act (as amended by 
section 5201).
    (c) Distribution.--Not later than 2 years after the date of 
enactment of this Act, the Administrator shall establish procedures and 
standards for the distribution of emission allowances to States in 
accordance with subsections (a) and (b).
    (d) Use.--Any State receiving emission allowances under this 
section for a calendar year shall retire or use, in 1 or more of the 
ways described in section 3303(c)(1), not less than 90 percent of the 
emission allowances allocated to the State (or proceeds of the sale of 
those allowances) under this section for the calendar year.

SEC. 3302. ALLOCATION FOR STATES WITH PROGRAMS THAT EXCEED FEDERAL 
              EMISSION REDUCTION TARGETS.

    (a) Allocation.--Not later than April 1, 2011, and annually 
thereafter through calendar year 2049, the Administrator shall allocate 
2 percent of the quantity of remainder emission allowances for the 
following calendar year among States that have--
            (1) before the date of enactment of this Act, enacted 
        statewide greenhouse gas emission reduction targets that are 
        more stringent than the nationwide targets established under 
        subtitle B of title I; and
            (2) by the time of an allocation under this subsection, 
        imposed on covered facilities within the States aggregate 
        greenhouse gas emission limitations more stringent than those 
        imposed on covered facilities under subtitle B of title I.
    (b) Distribution.--Not later than 2 years after the date of 
enactment of this Act, the Administrator shall establish procedures and 
standards for use in distributing emission allowances among States in 
accordance with subsection (a).
    (c) Use.--Any State receiving emission allowances under this 
section for a calendar year shall retire or use, in 1 or more of the 
ways described in section 3303(c)(1), not less than 90 percent of the 
emission allowances allocated to the State (or proceeds of the sale of 
those allowances) under this section for the calendar year.

SEC. 3303. GENERAL ALLOCATION.

    (a) Allocation.--Subject to subsection (d)(3), not later than April 
1, 2011, and annually thereafter through calendar year 2049, the 
Administrator shall allocate 5 percent of the quantity of remainder 
emission allowances for the following calendar year among States.
    (b) Distribution.--The allowances available for allocation to 
States under subsection (a) for a calendar year shall be distributed as 
follows:
            (1) For each calendar year, \1/3\ of the quantity of 
        allowances available for allocation to States under subsection 
        (a) shall be distributed among individual States based on the 
        proportion that--
                    (A) the expenditures of a State for the low-income 
                home energy assistance program established under the 
                Low-Income Home Energy Assistance Act of 1981 (42 
                U.S.C. 8621 et seq.) for the preceding calendar year; 
                bears to
                    (B) the expenditures of all States for that program 
                for the preceding calendar year.
            (2) For each calendar year, \1/3\ of the quantity of 
        allowances available for allocation to States under subsection 
        (a) shall be distributed among the States based on the 
        proportion that--
                    (A) the population of a State, as determined by the 
                most recent decennial census preceding the calendar 
                year for which the allocation regulations are for the 
                allocation year; bears to
                    (B) the population of all States, as determined by 
                that census.
            (3) For each calendar year, \1/3\ of the quantity of 
        allowances available for allocation to States under subsection 
        (a) shall be distributed among the States based on the 
        proportion that--
                    (A) the quantity of carbon dioxide that would be 
                emitted assuming that all of the coal that is mined, 
                natural gas that is processed, and petroleum that is 
                refined within the boundaries of a State during the 
                preceding year is completely combusted and that none of 
                the carbon dioxide emissions are captured, as 
                determined by the Secretary of Energy; bears to
                    (B) the aggregate quantity of carbon dioxide that 
                would be emitted assuming that all of the coal that is 
                mined, natural gas that is processed, and petroleum 
                that is refined in all States for the preceding year is 
                completely combusted and that none of the carbon 
                dioxide emissions are captured, as determined by the 
                Secretary of Energy.
    (c) Use.--
            (1) In general.--During any calendar year, a State shall 
        retire or use in 1 or more of the following ways not less than 
        90 percent of the allowances allocated to the State (or 
        proceeds of sale of those emission allowances) under this 
        section for that calendar year:
                    (A) To mitigate impacts on low-income energy 
                consumers.
                    (B) To promote energy efficiency (including support 
                of electricity and natural gas demand reduction, waste 
                minimization, and recycling programs).
                    (C) To promote investment in nonemitting 
                electricity generation technology, including planning 
                for the siting of facilities employing that technology 
                in States (including territorial waters of States).
                    (D) To improve public transportation and passenger 
                rail service and otherwise promote reductions in 
                vehicle miles traveled.
                    (E) To encourage advances in energy technology that 
                reduce or sequester greenhouse gas emissions.
                    (F) To address local or regional impacts of climate 
                change, including by accommodating, protecting, or 
                relocating affected communities and public 
                infrastructure.
                    (G) To collect, evaluate, disseminate, and use 
                information necessary for affected coastal communities 
                to adapt to climate change (such as information derived 
                from inundation prediction systems).
                    (H) To mitigate obstacles to investment by new 
                entrants in electricity generation markets and energy-
                intensive manufacturing sectors.
                    (I) To address local or regional impacts of climate 
                change policy, including providing assistance to 
                displaced workers.
                    (J) To mitigate impacts on energy-intensive 
                industries in internationally competitive markets.
                    (K) To reduce hazardous fuels, and to prevent and 
                suppress wildland fire.
                    (L) To fund rural, municipal, and agricultural 
                water projects that are consistent with the sustainable 
                use of water resources.
                    (M) To fund any other purpose the States determine 
                to be necessary to mitigate any negative economic 
                impacts as a result of--
                            (i) global warming; or
                            (ii) new regulatory requirements as a 
                        result of this Act.
            (2) Deadline.--A State shall distribute or sell allowances 
        for use in accordance with paragraph (1) by not later than the 
        beginning of each allowance allocation year.
            (3) Return of allowances.--Not later than 330 days before 
        the end of each allowance allocation year, a State shall return 
        to the Administrator any allowances not distributed by the 
        deadline under paragraph (2).
            (4) Use for recycling.--During any calendar year, a State 
        shall retire or use not less than 5 percent of the emission 
        allowances allocated to the State (or proceeds of sale of those 
        emission allowances) under this section for increasing 
        recycling rates through activities such as--
                    (A) improving recycling infrastructure;
                    (B) increasing public education on the benefits of 
                recycling, particularly with respect to greenhouse 
                gases;
                    (C) improving residential, commercial, and 
                industrial collection of recyclables;
                    (D) improving recycling system efficiency;
                    (E) increasing recycling yields; and
                    (F) improving the quality and usefulness of 
                recycled materials.
    (d) Program for Tribal Communities.--
            (1) Establishment.--Not later than 3 years after the date 
        of enactment of this Act, the Administrator, in consultation 
        with the Secretary of the Interior, shall by regulation 
        establish a program for tribal communities--
                    (A) that is designed to deliver assistance to 
                tribal communities within the United States that face 
                disruption or dislocation as a result of global climate 
                change; and
                    (B) under which the Administrator shall distribute 
                0.5 percent of the quantity of remainder emission 
                allowances for each calendar among tribal governments 
                of the tribal communities described in subparagraph 
                (A).
            (2) Allocation.--Beginning in the first calendar year that 
        begins after promulgation of the regulations referred to in 
        paragraph (1), and annually thereafter until calendar year 
        2050, the Administrator shall allocate 0.5 percent of the 
        quantity of remainder emission allowances for each calendar 
        year to the program established under paragraph (1).

SEC. 3304. ALLOCATION FOR MASS TRANSIT.

    (a) Allocation.--Not later than April 1, 2011, and annually 
thereafter through calendar year 2049, the Administrator shall allocate 
1 percent of the quantity of remainder emission allowances for the 
following calendar year among States.
    (b) Distribution.--The emission allowances available for allocation 
to States under subsection (a) for a calendar year shall be distributed 
among the States based on the formula established in section 
104(b)(1)(A) of title 23, United States Code.
    (c) Use.--During any calendar year, a State receiving emission 
allowances under this section shall--
            (1) use the emission allowances (or proceeds of sale of 
        those emission allowances) only for--
                    (A) the operating costs of State and municipal mass 
                transit systems;
                    (B) efforts to increase mass transit service and 
                ridership in the State, including by adding new mass 
                transit systems; and
                    (C) efforts to increase the efficiency of mass 
                transit systems through the development, purchase, or 
                deployment of innovative technologies that reduce 
                emissions of greenhouse gases; and
            (2) shall ensure that use of the emission allowances (or 
        proceeds of sale of those emission allowances) by the State for 
        the purposes described in paragraph (1) is geographically 
        distributed as follows:
                    (A) At least 60 percent in urban areas.
                    (B) At least 20 percent in areas that are not urban 
                areas.
                    (C) 20 percent as the State determines to be 
                appropriate.
    (d) Return of Unused Emission Allowances.--Any State receiving 
emission allowances under this section shall return to the 
Administrator any such emission allowance that the State has failed to 
use in accordance with subsection (c) by not later than 5 years after 
the date of receipt of the emission allowance from the Administrator.
    (e) Use of Returned Emission Allowances.--The Administrator shall 
immediately transfer to the Corporation for auctioning under section 
4302 any emission allowances returned to the Administrator under 
subsection (d).

                   Subtitle D--Electricity Consumers

SEC. 3401. ALLOCATION.

    Not later than April 1, 2011, and annually thereafter through 
calendar year 2049, the Administrator shall allocate among load-serving 
entities 9 percent of the quantity of remainder emission allowances for 
the following calendar year.

SEC. 3402. DISTRIBUTION.

    (a) In General.--For each calendar year, the emission allowances 
allocated under section 3401 shall be distributed by the Administrator 
to each load-serving entity, including each rural electric cooperative 
that serves as a load-serving entity in a State that is not a 
participant in the pilot program established under section 3903(a), 
based on the proportion that--
            (1) the quantity of electricity delivered by the load-
        serving entity during the 3 calendar years preceding the 
        calendar year for which the emission allowances are 
        distributed, adjusted upward for electricity not delivered as a 
        result of consumer energy-efficiency programs implemented by 
        the load-serving entity and verified by the regulatory agency 
        of the load-serving entity; bears to
            (2) the total quantity of electricity delivered by all 
        load-serving entities during those 3 calendar years.
    (b) Basis.--The Administrator shall base the determination of the 
quantity of electricity delivered by a load-serving entity for the 
purpose of subsection (a) on the most recent data available in annual 
reports filed with the Energy Information Administration of the 
Department of Energy.

SEC. 3403. USE.

    (a) In General.--Any load-serving entity that accepts emission 
allowances distributed under section 3402 shall--
            (1) sell each emission allowance distributed to the load-
        serving entity by not later than 1 year after receiving the 
        emission allowance; and
            (2) pursue fair market value for each emission allowance 
        sold in accordance with paragraph (1).
    (b) Proceeds.--All proceeds from the sale of emission allowances 
under subsection (a) shall be used solely--
            (1) to mitigate economic impacts on low- and middle-income 
        energy consumers, including by reducing transmission charges or 
        issuing rebates; and
            (2) to promote energy efficiency on the part of energy 
        consumers.
    (c) Prohibition on Rebates.--No load-serving entity may use any 
proceeds from the sale of emission allowances under subsection (a) to 
provide to any consumer a rebate that is based on the quantity of 
electricity used by the consumer.

SEC. 3404. REPORTING.

    (a) In General.--Each load-serving entity that accepts emission 
allowances distributed under section 3402 shall, for each calendar year 
for which the load-serving entity accepts emission allowances, submit 
to the Administrator a report describing--
            (1) the date of each sale of each emission allowance during 
        the preceding year;
            (2) the amount of revenue generated from the sale of 
        emission allowances during the preceding year; and
            (3) how, and to what extent, the load-serving entity used 
        the proceeds of the sale of the emission allowances during the 
        preceding year.
    (b) Availability of Reports.--The Administrator shall make 
available to the public all reports submitted by any load-serving 
entity under subsection (b), including by publishing those reports on 
the Internet.

                   Subtitle E--Natural Gas Consumers

SEC. 3501. ALLOCATION.

    Not later than April 1, 2011, and annually thereafter through 
calendar year 2049, the Administrator shall allocate among natural gas 
local distribution companies 2 percent of the quantity of remainder 
emission allowances for the following calendar year.

SEC. 3502. DISTRIBUTION.

    For each calendar year, the emission allowances allocated under 
section 3501 shall be distributed by the Administrator to each natural 
gas local distribution company based on the proportion that--
            (1) the quantity of natural gas delivered by the natural 
        gas local distribution company during the 3 calendar years 
        preceding the calendar year for which the emission allowances 
        are distributed, adjusted upward for natural gas not delivered 
        as a result of consumer energy-efficiency programs implemented 
        by the natural gas local distribution company and verified by 
        the regulatory agency of the natural gas local distribution 
        company; bears to
            (2) the total quantity of natural gas delivered by all 
        natural gas local distribution companies during those 3 
        calendar years.

SEC. 3503. USE.

    (a) In General.--Any natural gas local distribution company that 
accepts emission allowances distributed under section 3502 shall--
            (1) sell each emission allowance distributed to the natural 
        gas local distribution company by not later than 1 year after 
        receiving the emission allowance; and
            (2) pursue fair market value for each emission allowance 
        sold in accordance with paragraph (1).
    (b) Proceeds.--All proceeds from the sale of emission allowances 
under subsection (a) shall be used solely--
            (1) to mitigate economic impacts on low- and middle-income 
        energy consumers; and
            (2) to promote energy efficiency on the part of energy 
        consumers.
    (c) Prohibition on Rebates.--No natural gas local distribution 
company may use any proceeds from the sale of emission allowances under 
subsection (a) to provide to any consumer a rebate that is based on the 
quantity of natural gas used by the consumer.

SEC. 3504. REPORTING.

    (a) In General.--Each natural gas local distribution company that 
accepts emission allowances distributed under section 3502 shall, for 
each calendar year for which the natural gas local distribution company 
accepts emission allowances, submit to the Administrator a report 
describing--
            (1) the date of each sale of each emission allowance during 
        the preceding year;
            (2) the amount of revenue generated from the sale of 
        emission allowances during the preceding year; and
            (3) how, and to what extent, the natural gas local 
        distribution company used the proceeds of the sale of the 
        emission allowances during the preceding year.
    (b) Availability of Reports.--The Administrator shall make 
available to the public all reports submitted by any natural gas local 
distribution company under subsection (a), including by publishing 
those reports on the Internet.

    Subtitle F--Bonus Allowances for Carbon Capture and Geological 
                             Sequestration

SEC. 3601. ALLOCATION.

    Not later than 3 years after the date of enactment of this Act, the 
Administrator shall--
            (1) establish a Bonus Allowance Account; and
            (2) allocate 4 percent of the quantity of remainder 
        emission allowances for calendar years 2012 through 2030 to the 
        Bonus Allowance Account.

SEC. 3602. QUALIFYING PROJECTS.

    (a) Definitions.--In this section:
            (1) Commenced.--The term ``commenced'', with respect to 
        construction, means that an owner or operator has obtained the 
        necessary permits to undertake a continuous program of 
        construction and has entered into a binding contractual 
        obligation, with substantial financial penalties for 
        cancellation, to undertake such a program.
            (2) Construction.--The term ``construction'' means the 
        fabrication, erection, or installation of the technology for 
        the carbon capture and sequestration project.
    (b) Eligibility.--To be eligible to receive emission allowances 
under this subtitle, a carbon capture and sequestration project shall--
            (1) comply with such criteria and procedures as the 
        Administrator may establish, including a requirement, as 
        prescribed in subsection (c), for an annual emissions 
        performance standard for carbon dioxide emissions from any unit 
        for which allowances are allocated;
            (2) sequester, in a geological formation permitted by the 
        Administrator for that purpose in accordance with regulations 
        promulgated under part C of the Safe Drinking Water Act (42 
        U.S.C. 300h et seq.), carbon dioxide captured from any unit for 
        which allowances are allocated; and
            (3) have begun operation during the period beginning on 
        January 1, 2008, and ending on December 31, 2035.
    (c) Emission Performance Standards.--Subject to subsection (d), a 
carbon capture and sequestration project shall be eligible to receive 
emission allowances under this subtitle only if the project achieves 1 
of the following emissions performance standards for limiting carbon 
dioxide emissions from the unit on an annual average basis:
            (1) For an electric generation unit that is not a new 
        entrant, an annual emissions rate of not more than 1,200 pounds 
        of carbon dioxide per megawatt-hour of net electricity 
        generation, after subtracting the carbon dioxide that is 
        captured and sequestered.
            (2) For a new entrant electric generation unit for which 
        construction of the unit commenced prior to July 1, 2018, an 
        annual emissions rate of not more than 800 pounds of carbon 
        dioxide per megawatt-hour of net electricity generation, after 
        subtracting the carbon dioxide that is captured and 
        sequestered.
            (3) For a new entrant electric generation unit for which 
        construction of the unit commenced on or after July 1, 2018, an 
        annual emissions rate of not more than 350 pounds of carbon 
        dioxide per megawatt-hour of net electricity generation, after 
        subtracting the carbon dioxide that is captured and 
        sequestered.
            (4) For any unit at a covered facility that is not an 
        electric generation unit, an annual emissions rate that is 
        achieved by the capture and sequestration of a minimum of 85 
        percent of the total carbon dioxide emissions produced by the 
        unit.
    (d) Adjustment of Performance Standards.--
            (1) In general.--The Corporation may adjust the emissions 
        performance standard for a carbon capture and sequestration 
        project under subsection (c) for an electric generation unit 
        that uses subbituminous coal, lignite, or petroleum coke in 
        significant amounts.
            (2) Requirement.--In any case described in paragraph (1), 
        the performance standard for the project shall prescribe an 
        annual emissions rate that requires the project to achieve an 
        equivalent reduction from uncontrolled carbon dioxide emissions 
        levels from the use of subbituminous coal, lignite, or 
        petroleum coke, as compared to the emissions that the project 
        would have achieved if that unit had combusted only bituminous 
        coal during the particular year.

SEC. 3603. DISTRIBUTION.

    (a) In General.--Subject to section 3604, for each of calendar 
years 2012 through 2039, the Administrator shall distribute emission 
allowances from the Bonus Allowance Account to each qualifying project 
under this subtitle in a quantity equal to the product obtained by 
multiplying--
            (1) the bonus allowance adjustment factor, as determined 
        under subsection (b);
            (2) the number of metric tons of carbon dioxide emissions 
        avoided through capture and geologic sequestration of emissions 
        by the project; and
            (3) the bonus allowance rate for that calendar 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
 

    (b) Bonus Allowance Adjustment Ratio.--The Administrator shall 
determine the bonus allowance adjustment factor by dividing a carbon 
dioxide emissions rate of 350 pounds per megawatt-hour by the annual 
carbon dioxide emissions rate, on a pounds per megawatt-hour basis, 
that a qualifying project at the electric generation unit achieved 
during a particular year, except that--
            (1) the factor shall be equal to 1 in the case of a project 
        that qualifies under section 3602(c)(1) during the first 4 
        years that emissions allowances are distributed to the project; 
        and
            (2) the factor shall not exceed 1 for any qualifying 
        project.

SEC. 3604. 10-YEAR LIMIT.

    A qualifying project may receive annual emission allowances under 
this subsection only for--
            (1) the first 10 years of operation; or
            (2) if the unit covered by the qualifying project began 
        operating before January 1, 2012, the period of calendar years 
        2012 through 2021.

SEC. 3605. EXHAUSTION OF BONUS ALLOWANCE ACCOUNT.

    If, at the beginning of a calendar year, the Administrator 
determines that the number of emission allowances remaining in the 
Bonus Allowance Account will be insufficient to allow the distribution, 
in that calendar year, of the number of allowances that otherwise would 
be distributed under section 3603 for the calendar year, the 
Administrator shall, for the calendar year--
            (1) distribute the remaining bonus allowances only to 
        qualifying projects that were already qualifying projects 
        during the preceding calendar year;
            (2) distribute the remaining bonus allowances to those 
        qualifying projects on a pro rata basis; and
            (3) discontinue the program established under this subtitle 
        as of the date on which the Bonus Allowance Account is 
        projected to be fully used based on projects already in 
        operation.

             Subtitle G--Domestic Agriculture and Forestry

SEC. 3701. ALLOCATION.

    Not later than April 1, 2011, and annually thereafter through 
calendar year 2049, the Administrator shall allocate to the Secretary 
of Agriculture 5 percent of the quantity of remainder emission 
allowances for the following calendar year for use in--
            (1) achieving real, verifiable, additional, permanent, and 
        enforceable reductions in greenhouse gas emissions from the 
        agriculture and forestry sectors of the United States economy; 
        and
            (2) achieving real, verifiable, additional, permanent, and 
        enforceable increases in greenhouse gas sequestration from 
        those sectors.

SEC. 3702. AGRICULTURAL AND FORESTRY GREENHOUSE GAS MANAGEMENT 
              RESEARCH.

    (a) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary of Agriculture, in consultation with scientific 
and agricultural and forestry experts, shall prepare and submit to 
Congress a report that describes the status of research on agricultural 
and forestry greenhouse gas management, including a description of--
            (1) research on soil carbon sequestration and other 
        agricultural and forestry greenhouse gas management that has 
        been carried out;
            (2) any additional research that is necessary;
            (3) the proposed priority for additional research;
            (4) the most appropriate approaches for conducting the 
        additional research; and
            (5) the extent to which and the manner in which carbon 
        credits that are specific to agricultural and forestry 
        operations, including harvested wood products and the reduction 
        of hazardous fuels to reduce the risk of uncharacteristically 
        severe wildfires, should be valued and allotted.
    (b) Standardized System of Soil Carbon Measurement and 
Certification for the Agricultural and Forestry Sectors.--
            (1) In general.--As soon as practicable after the date of 
        enactment of this Act, the Secretary of Agriculture shall 
        establish a standardized system of carbon measurement and 
        certification for the agricultural and forestry sectors.
            (2) Administration.--In establishing the system, the 
        Secretary of Agriculture shall--
                    (A) create a standardized system of measurements 
                for agricultural and forestry greenhouse gases; and
                    (B) delineate the most appropriate system of 
                certification of credit by public or private entities.
    (c) Research.--After the date of submission of the report described 
in paragraph (1), the President and the Secretary of Agriculture (in 
collaboration with the member institutions of higher education of the 
Consortium for Agricultural Soil Mitigation of Greenhouse Gases, 
institutions of higher education, and research entities) shall initiate 
a program to conduct any additional research that is necessary.

SEC. 3703. DISTRIBUTION.

    (a) In General.--Taking into account the report prepared under 
section 3702(a), the Secretary of Agriculture shall establish, by 
regulation, a program under which agricultural and forestry allowances 
may be distributed to entities that carry out projects on agricultural 
and forest land that achieve real, verifiable, additional, permanent, 
and enforceable greenhouse gas emission mitigation benefits.
    (b) Nitrous Oxide and Methane.--The Secretary of Agriculture shall 
ensure that, during any 5-year period, the average annual percentage of 
the quantity of remainder emission allowances that is distributed to 
entities under the program established under subsection (a) 
specifically for achieving real, verifiable, additional, permanent, and 
enforceable reductions in nitrous oxide emissions through soil 
management or achieving real, verifiable, additional, permanent, and 
enforceable reductions in methane emissions through enteric 
fermentation and manure management shall be 0.5 percent.
    (c) Requirement.--The Secretary of Agriculture shall distribute 
emission allowances under this section in a manner that maximizes the 
avoidance or reduction of greenhouse gas emissions.

              Subtitle H--International Forest Protection

SEC. 3801. FINDINGS.

    Congress finds that--
            (1) land-use change and forest sector emissions account for 
        approximately 20 percent of global greenhouse gas emissions;
            (2) land conversion and deforestation are 2 of the largest 
        sources of greenhouse gas emissions in the developing world, 
        amounting to roughly 40 percent of the total greenhouse gas 
        emissions of the developing world;
            (3) with sufficient data, deforestation rates and forest 
        carbon stocks can be measured with an acceptable level of 
        uncertainty; and
            (4) encouraging reduced deforestation and other forest 
        carbon activities in other countries can--
                    (A) provide critical leverage to encourage 
                voluntary developing country participation in emission 
                limitation regimes;
                    (B) facilitate greater overall reductions in 
                greenhouse gas emissions than would otherwise be 
                practicable; and
                    (C) substantially benefit biodiversity, 
                conservation, and indigenous and other forest-dependent 
                people in developing countries.

SEC. 3802. DEFINITION OF FOREST CARBON ACTIVITIES.

    In this subtitle, the term ``forest carbon activities'' means--
            (1) activities directed at reducing greenhouse gas 
        emissions from deforestation and forest degradation in 
        countries other than the United States; and
            (2) activities directed at increasing sequestration of 
        carbon through restoration of forests, and degraded land in 
        countries other than the United States that has not been 
        forested prior to restoration, afforestation, and improved 
        forest management, that meet the eligibility requirements 
        promulgated under section 3804(a).

SEC. 3803. ALLOCATION.

    Not later than April 1, 2011, and annually thereafter through 
calendar year 2049, the Administrator shall allocate and distribute 2.5 
percent of the quantity of remainder emission allowances for the 
following calendar year for use in carrying out forest carbon 
activities in countries other than the United States.

SEC. 3804. DEFINITION AND ELIGIBILITY REQUIREMENTS.

    (a) Eligibility Requirements for Forest Carbon Activities.--Not 
later than 2 years after the date of enactment of this Act, the 
Administrator, in consultation with the Secretary of the Interior, the 
Secretary of State, and the Secretary of Agriculture, shall promulgate 
eligibility requirements for forest carbon activities directed at 
reducing emissions from deforestation and forest degradation, and at 
sequestration of carbon through restoration of forests and degraded 
land, afforestation, and improved forest management in countries other 
than the United States, including requirements that those activities 
be--
            (1) carried out and managed in accordance with widely-
        accepted environmentally sustainable forestry practices; and
            (2) designed--
                    (A) to promote native species and restoration of 
                native forests, where practicable; and
                    (B) to avoid the introduction of invasive nonnative 
                species.
    (b) Quality Criteria for Forest Carbon Allocations.--Not later than 
2 years after the date of enactment of this Act, the Administrator, in 
consultation with the Secretary of the Interior, the Secretary of 
State, and the Secretary of Agriculture, shall promulgate regulations 
establishing the requirements for eligibility to receive allowances 
under this section, including requirements that ensure that the 
emission reductions or sequestrations are real, permanent, additional, 
verifiable and enforceable, with reliable measuring and monitoring and 
appropriate accounting for leakage.

SEC. 3805. INTERNATIONAL FOREST CARBON ACTIVITIES.

    (a) In General.--The Administrator, in consultation with the 
Secretary of State, shall identify and periodically update a list of 
countries that have--
            (1) demonstrated capacity to participate in international 
        forest carbon activities, including--
                    (A) sufficient historical data on changes in 
                national forest carbon stocks;
                    (B) technical capacity to monitor and measure 
                forest carbon fluxes with an acceptable level of 
                uncertainty; and
                    (C) institutional capacity to reduce emissions from 
                deforestation and degradation;
            (2) capped greenhouse gas emissions or otherwise 
        established a national emission reference scenario based on 
        historical data; and
            (3) commenced an emission reduction program for the forest 
        sector.
    (b) Additionality.--
            (1) Reduction in deforestation and forest degradation.--A 
        verified reduction in greenhouse gas emissions from 
        deforestation and forest degradation under a cap or from a 
        nationwide emissions reference scenario described in subsection 
        (a) shall be--
                    (A) eligible for distribution of emission 
                allowances under this section; and
                    (B) considered to satisfy the additionality 
                criterion.
            (2) Periodic review of national level reductions in 
        deforestation and degradation.--The Administrator, in 
        consultation with the Secretary of State, shall identify and 
        periodically update a list of countries described in subsection 
        (a) that have--
                    (A) achieved national-level reductions of 
                deforestation and degradation below a historical 
                reference scenario, taking into consideration the 
                average annual deforestation and degradation rates of 
                the country and of all countries during a period of at 
                least 5 years; and
                    (B) demonstrated those reductions using remote 
                sensing technology that meets international standards.
            (3) Other forest carbon activities.--A forest carbon 
        activity, other than a reduction in deforestation or forest 
        degradation, shall be eligible for distribution of emission 
        allowances under this section, subject to the quality criteria 
        for forest carbon activities identified in this Act or in 
        regulations promulgated under this Act.
    (c) Recognition of Forest Carbon Activities.--With respect to 
countries other than countries described in subsection (a), the 
Administrator--
            (1) shall recognize forest carbon activities, subject to 
        the quality criteria for forest carbon activities identified in 
        this Act and regulations promulgated under this Act; and
            (2) is encouraged to identify other incentives, including 
        economic and market-based incentives, to encourage developing 
        countries with largely-intact native forests to protect those 
        forests.

SEC. 3806. REVIEWS AND DISCOUNT.

    (a) Reviews.--Not later than 3 years after the date of enactment of 
this Act, and 5 years thereafter, the Administrator shall conduct a 
review of the program under this subtitle.
    (b) Discount.--If, after the date that is 10 years after the date 
of enactment of this Act, the Administrator determines that foreign 
countries that, in the aggregate, generate greenhouse gas emissions 
accounting for more than 0.5 percent of global greenhouse gas emissions 
have not capped those emissions, established emissions reference 
scenarios based on historical data, or otherwise reduced total forest 
emissions, the Administrator may apply a discount to distributions of 
emission allowances to those countries under this section.

                   Subtitle I--Transition Assistance

SEC. 3901. GENERAL ALLOCATION AND DISTRIBUTION.

    (a) General Allocation.--Not later than April 1, 2011, and annually 
thereafter through January 1, 2029, the Administrator shall allocate 
percentages of the quantity of remainder emission allowances for the 
following calendar year as follows:


----------------------------------------------------------------------------------------------------------------
                                                    Fossil                    Owners and   Facilities
                                                  fuel-fired                 operators of     that        HFC
                                                   electric       Rural         energy     produce or  producers
                  Calendar Year                      power      electric      intensive      import       and
                                                  generating  cooperatives  manufacturing  petroleum-  importers
                                                  facilities                  facilities   based fuel
----------------------------------------------------------------------------------------------------------------
2012                                                      19            1            10             2          2
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2013                                                      19            1            10             2          2
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2014                                                      19            1            10             2          2
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2015                                                      19            1            10             2          2
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2016                                                      19            1            10             2          2
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2017                                                      19            1            10             2          2
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2018                                                      18            1             9             2          2
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2019                                                      17            1             9             2          2
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2020                                                      16            1             8             2          2
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2021                                                      14            1             7             2          2
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2022                                                      13            1             7          1.75       1.75
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2023                                                      12            1             6          1.75       1.75
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2024                                                      11            1             5           1.5       1.25
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2025                                                      10            1             4             1          1
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2026                                                       8            1             3             1          1
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2027                                                       6            1             2           0.5        0.5
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2028                                                       4            1             1           0.5        0.5
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2029                                                       2            1           0.5          0.25       0.25
vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv
2030                                                       1            1          0.25          0.25       0.25
----------------------------------------------------------------------------------------------------------------

    (b) General Distribution.--Not later than 1 year after the date of 
enactment of this Act, the Administrator shall establish a system for 
distributing to entities identified under subsection (a) the emission 
allowances allocated under that subsection.
    (c) Facilities That Shut Down.--The system established pursuant to 
subsection (b) shall ensure, notwithstanding any other provision of 
this subtitle, that--
            (1) emission allowances are not distributed to an owner or 
        operator for any facility that has been permanently shut down 
        at the time of the distribution;
            (2) the owner or operator of any facility that permanently 
        shuts down in a calendar year shall promptly return to the 
        Administrator any emission allowances that the Administrator 
        has distributed for that facility for any subsequent calendar 
        years; and
            (3) that, if a facility receives a distribution of emission 
        allowances under this subtitle for a calendar year and 
        subsequently permanently shuts down during that calendar year, 
        the owner or operator of the facility shall promptly return to 
        the Administrator a number of emission allowances equal to the 
        number that the Administrator determines is the portion that 
        the owner or operator will no longer need to submit for that 
        facility under section 1202(a).

SEC. 3902. DISTRIBUTING EMISSION ALLOWANCES TO OWNERS AND OPERATORS OF 
              FOSSIL FUEL-FIRED ELECTRIC POWER GENERATING FACILITIES.

    (a) New Entrants.--
            (1) In general.--As part of the system established under 
        section 3901(b), the Administrator shall, for each calendar 
        year, set aside, from the quantity of emission allowances 
        represented by the percentages described in the table contained 
        in section 3901(a) for owners and operators of fossil fuel-
        fired electric power generating facilities, a quantity of 
        emission allowances for distribution to owners and operators of 
        new entrant fossil fuel-fired electric power generating 
        facilities (including such new entrant facilities owned or 
        operated by rural electric cooperatives in any State that is 
        not a participant in the pilot program established under 
        section 3903(a)).
            (2) Calculation of allowances.--The quantity of emission 
        allowances distributed by the Administrator for a calendar year 
        to a new entrant fossil fuel-fired electric power generating 
        facility under paragraph (1) shall be equal to the product 
        obtained by multiplying--
                    (A) the average greenhouse gas emission rate of all 
                fossil fuel-fired electric power generating facilities 
                that commenced operations during the 5 years preceding 
                the date of enactment of this Act; and
                    (B) the electricity generated by the facility 
                during the calendar year, adjusted downward on a pro 
                rata basis for each new facility in the event that 
                insufficient allowances are available under section 
                3901(a) for a calendar year.
    (b) Incumbents.--
            (1) In general.--As part of the system established under 
        section 3901(b), the Administrator shall, for each calendar 
        year, distribute to fossil fuel-fired electric power generating 
        facilities (including such facilities owned or operated by 
        rural electric cooperatives in any State that is not a 
        participant in the pilot program established under section 
        3903(a)) that were operating during the calendar year preceding 
        the year in which this Act was enacted the emission allowances 
        represented by the percentages described in the table contained 
        in section 3901(a) for owners and operators of fossil fuel-
        fired electric power generating facilities that remain after 
        the distribution of emission allowances under subsection (a).
            (2) Calculation of allowances.--The quantity of emission 
        allowances distributed to a fossil fuel-fired electric power 
        generating facility under paragraph (1) shall be equal to the 
        product obtained by multiplying--
                    (A) the quantity of emission allowances available 
                for distribution under paragraph (1); and
                    (B) the quotient obtained by dividing--
                            (i) the annual average quantity of carbon 
                        dioxide equivalents emitted by the facility 
                        during the 3 calendar years preceding the date 
                        of enactment of this Act; by
                            (ii) the annual average of the aggregate 
                        quantity of carbon dioxide equivalents emitted 
                        by all fossil fuel-fired electric power 
                        generating facilities during those 3 calendar 
                        years.

SEC. 3903. DISTRIBUTING ADDITIONAL EMISSION ALLOWANCES TO RURAL 
              ELECTRIC COOPERATIVES.

    (a) Establishment of Pilot Program.--
            (1) In general.--As part of the system established under 
        section 3901(b), the Administrator shall establish a pilot 
        program for distributing to rural electric cooperatives in the 
        States described in paragraph (2), for each of calendar years 
        2012 through 2029, 15 percent of the total number of emission 
        allowances allocated for the calendar year to rural electric 
        cooperatives under section 3901(a).
            (2) Description of states.--The States referred to in 
        subsection (a) are--
                    (A) 1 State east of the Mississippi River in which 
                13 rural electric cooperatives sold to consumers in 
                that State electricity in a quantity of 9,000,000 to 
                10,000,000 MWh, according to Energy Information 
                Administration data for calendar year 2005; and
                    (B) 1 State west of the Mississippi River in which 
                30 rural electric cooperatives sold to consumers in 
                that State electricity in a quantity of 3,000,000 to 
                4,000,000 MWh, according to Energy Information 
                Administration data for calendar year 2005.
    (b) Distribution to Other States.--As part of the system 
established under section 3901(b), the Administrator shall establish a 
system for distributing to rural electric cooperatives in all States 
other than the 2 States described in subsection (a)(2), for each of 
calendar years 2012 through 2029, 85 percent of the total number of 
emission allowances allocated for the calendar year to rural electric 
cooperatives under section 3901(a), in proportion to the sales of each 
rural electric cooperative, as reported by the Energy Information 
Administration.
    (c) Limitation.--No rural electric cooperative that receives 
emission allowances under subsection (a) shall receive any emission 
allowance under subsection (b), section 3902, or section 3402.
    (d) Report.--Not later than January 1, 2015, and every 3 years 
thereafter, the Administrator shall submit to Congress a report 
describing the success of the pilot program established under 
subsection (a), including a description of--
            (1) the benefits realized by ratepayers of the rural 
        electric cooperatives that receive allowances under the pilot 
        program; and
            (2) the use by those rural electric cooperatives of 
        advanced, low greenhouse gas-emitting electric generation 
        technologies, if any.

SEC. 3904. DISTRIBUTING EMISSION ALLOWANCES TO OWNERS AND OPERATORS OF 
              ENERGY INTENSIVE MANUFACTURING FACILITIES.

    (a) Definitions.--In this section:
            (1) Currently operating facility.--The term ``currently 
        operating facility'' means an eligible manufacturing facility 
        that had significant operations during the calendar year 
        preceding the calendar year for which emission allowances are 
        being distributed under this section.
            (2) Eligible manufacturing facility.--
                    (A) In general.--The term ``eligible manufacturing 
                facility'' means a manufacturing facility located in 
                the United States that principally manufactures iron, 
                steel, aluminum, pulp, paper, cement, chemicals, or 
                such other products as the Administrator may determine, 
                by rule, are likely to be significantly disadvantaged 
                in competitive international markets as a result of 
                indirect costs of the program established under this 
                Act.
                    (B) Exclusion.--The term ``eligible manufacturing 
                facility'' does not include a facility eligible to 
                receive emission allowances under section 3902, 3903, 
                or 3905.
            (3) Indirect carbon dioxide emissions.--The term ``indirect 
        carbon dioxide emissions'' means the product obtained by 
        multiplying (as determined by the Administrator)--
                    (A) the quantity of electricity consumption at an 
                eligible manufacturing facility; and
                    (B) the rate of carbon dioxide emission per 
                kilowatt-hour output for the region in which the 
                manufacturer is located.
            (4) New entrant manufacturing facility.--The term ``new 
        entrant manufacturing facility'', with respect to a calendar 
        year, means an eligible manufacturing facility that began 
        operation during or after the calendar year for which emission 
        allowances are being distributed under this section.
    (b) Total Allocation for Currently Operating Facilities.--As part 
of the system established under section 3901(b), the Administrator 
shall, for each calendar year, distribute 96 percent of the total 
quantity of emission allowances available for allocation to carbon-
intensive manufacturing under section 3901(a) to currently operating 
facilities.
    (c) Total Allocation for Currently Operating Facilities in Each 
Category of Manufacturing Facilities.--The quantity of emission 
allowances distributed by the Administrator for a calendar year to 
facilities in each category of currently operating facilities shall be 
equal to the product obtained by multiplying--
            (1) the total quantity of emission allowances available for 
        allocation under subsection (b); and
            (2) the ratio that (during the calendar year preceding the 
        calendar year for which emission allowances are being 
        distributed under this section)--
                    (A) the sum of the direct and indirect carbon 
                dioxide emissions by currently operating facilities in 
                the category; bears to
                    (B) the sum of the direct and indirect carbon 
                dioxide emissions by all currently operating 
                facilities.
    (d) Individual Allocations to Currently Operating Facilities.--The 
quantity of emission allowances distributed by the Administrator for a 
calendar year to a currently operating facility shall be a quantity 
equal to the product obtained by multiplying--
            (1) the total quantity of emission allowances available for 
        allocation to currently-operating facilities in the appropriate 
        category, as determined under subsection (c); and
            (2) the ratio that (during the 3 calendar years preceding 
        the year for which the allocation rule is promulgated for the 
        allocation period)--
                    (A) the average number of production employees 
                employed at the facility; bears to
                    (B) the average number of production employees 
                employed at all existing eligible manufacturing 
                facilities in the appropriate category.
    (e) New Entrant Manufacturing Facilities.--
            (1) In general.--As part of the system established under 
        section 3901(b), the Administrator shall, for each calendar 
        year, distribute 4 percent of the total quantity of emission 
        allowances available for allocation to carbon intensive 
        manufacturing under section 3901(a) to new entrant 
        manufacturing facilities.
            (2) Individual allocations.--The quantity of emission 
        allowances distributed by the Administrator for a calendar year 
        to a new entrant manufacturing facility shall be proportional 
        to the product obtained by multiplying--
                    (A) the average number of production employees 
                employed at the new entrant manufacturing facility 
                during the prior calendar year; and
                    (B) the rate (in emission allowances per production 
                employee) at which emission allowances were allocated 
                to currently operating facilities in the appropriate 
                category for the calendar year, as determined under 
                subsection (d).

SEC. 3905. DISTRIBUTING EMISSION ALLOWANCES TO OWNERS AND OPERATORS OF 
              FACILITIES AND OTHER ENTITIES THAT PRODUCE OR IMPORT 
              PETROLEUM-BASED FUEL.

    (a) In General.--As part of the system established under section 
3901(b), the Administrator shall, for each calendar year, distribute to 
facilities or entities that produce or import petroleum-based fuel the 
emission allowances represented by the percentages described in the 
table contained in section 3901(a) for owners and operators of 
facilities or entities that produce or import petroleum-based fuel.
    (b) Calculation of Allowances.--The quantity of emission allowances 
distributed to a facility or entity under subsection (a) shall be equal 
to the product obtained by multiplying--
            (1) the quantity of emission allowances available for 
        distribution under subsection (a); and
            (2) the quotient obtained by dividing--
                    (A) the annual average of the aggregate quantity of 
                the petroleum-based products produced or imported by 
                that facility or entity during the 3 calendar years 
                preceding the distribution of allowances; by
                    (B) the annual average of the aggregate quantity of 
                petroleum-based products produced or imported by 
                covered facilities and entities that produced or 
                imported petroleum-based fuel during those preceding 3 
                calendar years.

SEC. 3906. DISTRIBUTING EMISSION ALLOWANCES TO HYDROFLUOROCARBON 
              PRODUCERS AND IMPORTERS.

    (a) In General.--The emission allowances allocated to 
hydrofluorocarbon producers and hydrofluorocarbon importers under 
section 3901(a) shall be distributed to the individual 
hydrofluorocarbon producers and hydrofluorocarbon importers in 
accordance with section 10005.
    (b) Effect.--The distributions under subsection (a) shall not, in 
any way, limit or otherwise alter the prohibitions set forth in 
subsection 10007(b).

  Subtitle J--Reducing Methane Emissions From Landfills and Coal Mines

SEC. 3907. ALLOCATION.

    Not later than April 1, 2011, and annually thereafter through 2049, 
the Administrator shall allocate 1 percent of the quantity of remainder 
emission allowances for the following calendar year to a program for 
achieving real, verifiable, additional, permanent, and enforceable 
reductions in emissions of methane from landfills and coal mines.

SEC. 3908. DISTRIBUTION.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Administrator shall establish a program that includes 
a system for distributing to individual entities the emission 
allowances allocated under section 3907.
    (b) Requirement.--The Administrator shall distribute emission 
allowances under subsection (a) in a manner that maximizes the 
avoidance or reduction of greenhouse gas emissions.

            TITLE IV--AUCTIONS AND USES OF AUCTION PROCEEDS

                           Subtitle A--Funds

SEC. 4101. ESTABLISHMENT.

    There are established in the Treasury of the United States the 
following funds:
            (1) The Energy Assistance Fund.
            (2) The Climate Change Worker Training Fund.
            (3) The Adaptation Fund.
            (4) The Climate Change and National Security Fund.
            (5) The Bureau of Land Management Emergency Firefighting 
        Fund.
            (6) The Forest Service Emergency Firefighting Fund.
            (7) The Climate Security Act Management Fund.

SEC. 4102. AMOUNTS IN FUNDS.

    Each Fund established by section 4101 shall consist of such amounts 
as are deposited into the respective Fund under subtitle C.

             Subtitle B--Climate Change Credit Corporation

SEC. 4201. ESTABLISHMENT.

    (a) In General.--There is established, as a nonprofit corporation 
without stock, a corporation to be known as the ``Climate Change Credit 
Corporation''.
    (b) Treatment.--The Corporation shall not be considered to be an 
agency or establishment of the Federal Government.

SEC. 4202. APPLICABLE LAWS.

    The Corporation shall be subject to this title and, to the extent 
consistent with this title, the District of Columbia Business 
Corporation Act (D.C. Code section 29-301 et seq.).

SEC. 4203. BOARD OF DIRECTORS.

    (a) In General.--The Corporation shall have a board of directors 
composed of 5 individuals who are citizens of the United States, of 
whom 1 shall be elected annually by the board to serve as Chairperson.
    (b) Political Affiliation.--Not more than 3 members of the board 
serving at any time may be affiliated with the same political party.
    (c) Appointment and Term.--A member of the board shall be appointed 
by the President, by and with the advice and consent of the Senate, for 
a term of 5 years.
    (d) Quorum.--Three members of the board shall constitute a quorum 
for a meeting of the board of directors.
    (e) Prohibitions.--
            (1) Conflicts of interest.--An individual employed by, or 
        holding any official relationship (including any shareholder) 
        with, any entity engaged in the generation, transmission, 
        distribution, or sale of energy, an individual who has any 
        pecuniary interest in the generation, transmission, 
        distribution, or sale of energy, or an individual who has a 
        pecuniary interest in the implementation of this Act, shall not 
        be appointed to the Corporation under this subtitle.
            (2) No other employment.--A member of the Corporation shall 
        not hold any other employment during the term of service of the 
        member.
    (f) Vacancies.--
            (1) In general.--A vacancy on the Corporation--
                    (A) shall not affect the powers of the Corporation; 
                and
                    (B) shall be filled in the same manner as the 
                original appointment was made.
            (2) Service until new appointment.--A member of the 
        Corporation the term of whom has expired or otherwise been 
        terminated shall continue to serve until the date on which a 
        replacement is appointed if the President determines that 
        service to be appropriate.
    (g) Removal.--
            (1) In general.--A member may be removed from the 
        Corporation on determination of the President for cause.
            (2) Notification.--Not later than 30 days before removing a 
        member from the Corporation for cause under paragraph (1), the 
        President shall provide to Congress an advance notification of 
        the determination by the President to remove the member.

SEC. 4204. REVIEW AND AUDIT BY COMPTROLLER GENERAL.

    Not later than January 1, 2013, and annually thereafter, the 
Comptroller General of the United States shall conduct a review and 
audit of each expenditure made pursuant to this title to determine the 
efficacy of the programs, expenditures, and projects funded under this 
title.

                          Subtitle C--Auctions

SEC. 4301. EARLY AUCTIONS.

    (a) Initiation of Auctioning.--Not later than 1 year after the date 
of enactment of this Act, the Corporation shall begin auctioning the 
emission allowances allocated to the Corporation under section 3102.
    (b) Completion of Auctioning.--Not later than December 31, 2010, 
the Corporation shall complete auctioning of all allowances allocated 
to the Corporation under section 3102.
    (c) Proceeds From Early Auctioning.--The Corporation shall use to 
carry out programs established under subtitle D all proceeds of early 
auctioning conducted by the Corporation under this section.

SEC. 4302. ANNUAL AUCTIONS.

    (a) In General.--Not later than 330 days before the beginning of a 
calendar year identified in the table contained in section 3103, the 
Corporation shall auction all of the allowances allocated to the 
Corporation for that year by the Administrator under section 3103.
    (b) Proceeds From Annual Auctioning.--
            (1) Bureau of land management emergency firefighting 
        fund.--For each of calendar years 2012 through 2050, the 
        Corporation shall deposit into the Bureau of Land Management 
        Emergency Firefighting Fund established by section 4101(5) 
        proceeds, from annual auctions that the Corporation conducts 
        for the calendar year under this section, that are sufficient 
        to ensure that the amount in the Fund equals $300,000,000.
            (2) Forest service emergency firefighting fund.--For each 
        of calendar years 2012 through 2050, the Corporation shall 
        deposit into the Forest Service Emergency Firefighting Fund 
        established by section 4101(6) proceeds, from annual auctions 
        that the Corporation conducts for the calendar year under this 
        section, that are sufficient to ensure that the amount in the 
        Fund equals $800,000,000.
            (3) Climate security act management fund.--
                    (A) In general.--For each of calendar years 2012 
                through 2050, the Corporation shall deposit into the 
                Climate Security Act Management Fund established by 
                section 4101(7) such percentage of the proceeds of the 
                annual auctions conducted by the Corporation for the 
                calendar year under this section as the Administrator 
                determines to be sufficient to efficiently and 
                effectively administer this Act.
                    (B) Distribution.--The Administrator may distribute 
                funds from the Climate Security Act Management Fund to 
                the Secretary of Agriculture, the Secretary of Labor, 
                and the Carbon Market Efficiency Board, as the 
                Administrator determines to be necessary to assist in 
                carrying out this Act.
                    (C) Use of funds.--The head of a Federal agency or 
                department may use funds from the Climate Security Act 
                Management Fund for the costs to the agency or 
                department of carrying out this Act, including the 
                costs of--
                            (i) promulgation of regulations;
                            (ii) development of policy guidance;
                            (iii) development and operation of 
                        information systems;
                            (iv) certification of monitoring equipment;
                            (v) conducting facilities audits and 
                        inspections;
                            (vi) monitoring and modeling;
                            (vii) quality assurance and verification 
                        functions;
                            (viii) enforcement;
                            (ix) administration;
                            (x) outreach;
                            (xi) training;
                            (xii) field audits; and
                            (xiii) financial management.
                    (D) Treatment.--Amounts in the Climate Security Act 
                Management Fund--
                            (i) shall be used only to advance the 
                        purposes described in section 3;
                            (ii) are subject to the availability of 
                        appropriations; and
                            (iii) shall remain available until 
                        expended.
            (4) Use of remaining proceeds.--
                    (A) In general.--For each of calendar years 2012 
                through 2050, the Corporation shall use the proceeds of 
                the annual auctions conducted by the Corporation for 
                the calendar year under this section in accordance with 
                this paragraph.
                    (B) Energy technology deployment.--For each of 
                calendar years 2012 through 2050, the Corporation shall 
                use to carry out the programs established under 
                subtitle D 52 percent of the proceeds of the annual 
                auctions conducted by the Corporation for the calendar 
                year under this section.
                    (C) Energy independence acceleration fund.--In any 
                of calendar years 2012 through 2050 during which there 
                exists in the Treasury of the United States an energy 
                transformation acceleration fund administered by the 
                Director of the Advanced Research Projects Agency 
                within the Department of Energy, of the proceeds of the 
                annual auctions conducted by the Corporation for the 
                calendar year under this section, the Corporation shall 
                deposit 2 percent of the proceeds into that fund.
                    (D) Energy consumers.--For each of calendar years 
                2012 through 2050, the Corporation shall deposit into 
                the Energy Assistance Fund established by section 
                4101(1) 18 percent of the proceeds of the annual 
                auctions conducted by the Corporation for the calendar 
                year under this section.
                    (E) Climate change worker training program.--For 
                each of calendar years 2012 through 2050, the 
                Corporation shall deposit into the Climate Change 
                Worker Training Fund established by section 4101(2) 5 
                percent of the proceeds of the annual auctions 
                conducted by the Corporation for the calendar year 
                under this section.
                    (F) Adaptation program for natural resources in 
                united states and territories.--For each of calendar 
                years 2012 through 2050, the Corporation shall deposit 
                into the Adaptation Fund established by section 4101(3) 
                18 percent of the proceeds of the annual auctions 
                conducted by the Corporation for the calendar year 
                under this section.
                    (G) Climate change and national security program.--
                For each of calendar years 2012 through 2050, the 
                Corporation shall deposit into the Climate Change and 
                National Security Fund established by section 4101(4) 5 
                percent of the proceeds of the annual auctions 
                conducted by the Corporation for the calendar year 
                under this section.

                Subtitle D--Energy Technology Deployment

SEC. 4401. GENERAL ALLOCATIONS.

    For each calendar year, the Corporation shall use the amounts 
described in sections 4301(c) and 4302(b)(4)(B) to carry out the 
programs established under this subtitle, as follows:
            (1) 32 percent of the funds shall be used to carry out the 
        zero- or low-carbon energy technologies program under section 
        4402.
            (2) 25 percent shall be used to carry out the advanced coal 
        and sequestration technologies program under section 4403.
            (3) 6 percent shall be used to carry out the fuel from 
        cellulosic biomass program under section 4404.
            (4) 12 percent shall be used to carry out the advanced 
        technology vehicles manufacturing incentive program under 
        section 4405.
            (5) 25 percent shall be used to carry out the sustainable 
        energy program under section 4406.

SEC. 4402. ZERO- OR LOW-CARBON ENERGY TECHNOLOGIES DEPLOYMENT.

    (a) Definitions.--In this section:
            (1) Energy savings.--The term ``energy savings'' means 
        megawatt-hours of electricity or million British thermal units 
        of natural gas saved by a product, in comparison to projected 
        energy consumption under an energy-efficiency standard 
        applicable to the product.
            (2) Engineering integration costs.--The term ``engineering 
        integration costs'' includes the costs of engineering tasks 
        relating to--
                    (A) redesigning manufacturing processes to begin 
                producing qualifying components and zero- or low-carbon 
                generation technologies;
                    (B) designing new tooling and equipment for 
                production facilities that produce qualifying 
                components and zero- or low-carbon generation 
                technologies; and
                    (C) establishing or expanding manufacturing 
                operations for qualifying components and zero- or low-
                carbon generation technologies.
            (3) High-efficiency consumer product.--The term ``high-
        efficiency consumer product'' means a covered product to which 
        an energy conservation standard applies under section 325 of 
        the Energy Policy and Conservation Act (42 U.S.C. 6295), if the 
        energy efficiency of the product exceeds the energy efficiency 
        required under the standard.
            (4) Qualifying component.--The term ``qualifying 
        component'' means a component that the Secretary of Energy 
        determines to be specially designed for zero- or low-carbon 
        generation technology.
            (5) Zero- or low-carbon generation.--The term ``zero- or 
        low-carbon generation'' means generation of electricity by an 
        electric generation unit that--
                    (A) emits no carbon dioxide into the atmosphere, or 
                is fossil-fuel fired and emits into the atmosphere not 
                more than 250 pounds of carbon dioxide per megawatt-
                hour (after adjustment for any carbon dioxide from the 
                unit that is geologically sequestered); and
                    (B) was placed into commercial service after the 
                date of enactment of this Act.
            (6) Zero- or low-carbon generation technology.--The term 
        ``zero- or low-carbon generation technology'' means a 
        technology used to create zero- or low-carbon generation.
    (b) Financial Incentives Program.--During each fiscal year 
beginning on or after October 1, 2008, the Corporation shall 
competitively award financial incentives under this subsection in the 
technology categories of--
            (1) the production of electricity from new zero- or low-
        carbon generation;
            (2) the manufacture of high-efficiency consumer products; 
        and
            (3) facility establishment or conversion by manufacturers 
        and component suppliers of zero- or low-carbon technology.
    (c) Requirements.--
            (1) In general.--The Corporation shall make awards under 
        this section to domestic producers of new zero- or low-carbon 
        generation, domestic manufacturers of high-efficiency consumer 
        products, and domestic facilities and operations of 
        manufacturers and component suppliers of zero- or low-carbon 
        generation technology--
                    (A) in the case of producers of new zero- or low-
                carbon generation, based on the bid of each producer in 
                terms of dollars per megawatt-hour of electricity 
                generated;
                    (B) in the case of manufacturers of qualifying 
                high-efficiency consumer products, based on the bid of 
                each manufacturer in terms of dollars per megawatt-hour 
                or million British thermal units saved; and
                    (C) in the case of qualifying manufacturers of 
                zero- or low-carbon generation technology, based on the 
                criteria noted in subsection (e).
            (2) Acceptance of bids.--
                    (A) In general.--In making awards under 
                subparagraphs (A) and (B) of paragraph (1), the 
                Corporation shall--
                            (i) solicit bids for reverse auction from 
                        appropriate producers and manufacturers, as 
                        determined by the Corporation; and
                            (ii) award financial incentives to the 
                        producers and manufacturers that submit the 
                        lowest bids that meet the requirements 
                        established by the Corporation.
                    (B) Factors for conversion.--
                            (i) In general.--For the purpose of 
                        assessing bids under subparagraph (A), the 
                        Corporation shall specify a factor for 
                        converting megawatt-hours of electricity and 
                        million British thermal units of natural gas to 
                        common units.
                            (ii) Requirement.--The conversion factor 
                        shall be based on the relative greenhouse gas 
                        emission benefits of electricity and natural 
                        gas conservation.
    (d) Forms of Awards.--
            (1) Zero- and low-carbon generators.--An award for zero- or 
        low-carbon generation under this subsection shall be in the 
        form of a contract to provide a production payment for each 
        year during the first 10 years of commercial service of the 
        generation unit in an amount equal to the product obtained by 
        multiplying--
                    (A) the amount bid by the producer of the zero- or 
                low-carbon generation; and
                    (B) the megawatt-hours estimated to be generated by 
                the zero- or low-carbon generation unit each year.
            (2) High-efficiency consumer products.--An award for a 
        high-efficiency consumer product under this subsection shall be 
        in the form of a lump sum payment in an amount equal to the 
        product obtained by multiplying--
                    (A) the amount bid by the manufacturer of the high-
                efficiency consumer product; and
                    (B) the energy savings during the projected useful 
                life of the high-efficiency consumer product, not to 
                exceed 10 years, as determined by the Corporation.
            (3) Manufacturing of zero- or low-carbon generation 
        technology.--
                    (A) In general.--An award for facility 
                establishment or conversion costs for zero- or low-
                carbon generation technology shall be in an amount 
                equal to not more than 30 percent of the cost of--
                            (i) establishing, reequipping, or expanding 
                        a manufacturing facility to produce--
                                    (I) qualifying zero- or low-carbon 
                                generation technology; or
                                    (II) qualifying components;
                            (ii) engineering integration costs of zero- 
                        or low-carbon generation technology and 
                        qualifying components; and
                            (iii) property, machine tools, and other 
                        equipment acquired or constructed primarily to 
                        enable the recipient to test equipment 
                        necessary for the construction or operation of 
                        a zero- or low-carbon generation facility.
                    (B) Minimum amount.--The Corporation shall use not 
                less than \1/4\ of the amounts made available to carry 
                out this section to make awards to entities for the 
                manufacturing of zero- or low-carbon generation 
                technology.
    (e) Selection Criteria.--In making awards under this section to 
qualifying manufacturers of zero- or low-carbon generation technology 
and qualifying components, the Corporation shall select manufacturers 
that--
            (1) document the greatest use of domestically sourced parts 
        and components;
            (2) return to productive service existing idle 
        manufacturing capacity;
            (3) are located in States with the greatest availability of 
        unemployed manufacturing workers;
            (4) compensate workers at a minimum amount equal to at 
        least 100 percent of the State average manufacturing wage, plus 
        health insurance benefits;
            (5) demonstrate a high probability of commercial success; 
        and
            (6) achieve other criteria, as the Corporation determines 
        to be appropriate.

SEC. 4403. ADVANCED COAL AND SEQUESTRATION TECHNOLOGIES PROGRAM.

    (a) Advanced Coal Technologies.--
            (1) Definitions.--In this section:
                    (A) Advanced coal generation technology.--Except as 
                provided in paragraph (2), the term ``advanced coal 
                generation technology'' means an advanced coal-fueled 
                power plant technology that meets 1 of the following 
                performance standards for limiting carbon dioxide 
                emissions from an electric generation unit on an annual 
                average basis, as determined by the Corporation:
                            (i) For an electric generation unit that is 
                        not a new entrant, an annual emissions rate of 
                        not more than 1,200 pounds of carbon dioxide 
                        per megawatt-hour of net electricity 
                        generation, after subtracting the carbon 
                        dioxide that is captured and sequestered.
                            (ii) For any project for which construction 
                        of the unit commenced before July 1, 2018, an 
                        annual emissions rate of not more than 800 
                        pounds of carbon dioxide per megawatt-hour of 
                        net electricity generation, after subtracting 
                        the carbon dioxide that is captured and 
                        sequestered.
                            (iii) For any project for which 
                        construction of the unit commenced on or after 
                        July 1, 2018, an annual emissions rate of not 
                        more than 350 pounds of carbon dioxide per 
                        megawatt-hour of net electricity generation, 
                        after subtracting the carbon dioxide that is 
                        captured and sequestered.
                    (B) Commenced.--The term ``commenced'', with 
                respect to construction, means that an owner or 
                operator has--
                            (i) obtained the necessary permits to carry 
                        out a continuous program of construction; and
                            (ii) entered into a binding contractual 
                        obligation, with substantial financial 
                        penalties for cancellation, to undertake such a 
                        program.
                    (C) Construction.--The term ``construction'', with 
                respect to a carbon capture and sequestration project, 
                means the fabrication, erection, or installation of 
                technology for the project.
            (2) Adjustment of performance standards.--
                    (A) In general.--The Corporation may adjust the 
                emissions performance standards for a carbon capture 
                and sequestration project under paragraph (1)(A) for an 
                electric generation unit that uses subbituminous coal, 
                lignite, or petroleum coke in significant amounts.
                    (B) Requirement.--If the Corporation adjusts a 
                standard under subparagraph (A), the adjusted 
                performance standard for the applicable project shall 
                prescribe an annual emissions rate that requires the 
                project to achieve an equivalent reduction from 
                uncontrolled carbon dioxide emissions levels from the 
                use of subbituminous coal, lignite, or petroleum coke, 
                as compared to the emissions the project would have 
                achieved if that unit had combusted only bituminous 
                coal during the particular calendar year.
            (3) Demonstration projects.--
                    (A) In general.--The Corporation shall use not less 
                than \1/4\ of the amounts made available to carry out 
                this section for each fiscal year to support 
                demonstration projects using advanced coal generation 
                technology, including retrofit technology that could be 
                deployed on existing coal generation facilities.
                    (B) Certain projects.--Of the amounts described in 
                subparagraph (A), the Corporation shall make available 
                up to 25 percent for projects that meet the carbon 
                dioxide emissions performance standard under clause (i) 
                of paragraph (1)(A).
            (4) Deployment incentives.--
                    (A) In general.--The Corporation shall use not less 
                than \1/4\ of the amounts made available to carry out 
                this section for each fiscal year to provide financial 
                incentives to facilitate the deployment of not more 
                than 20 gigawatts of advanced coal generation 
                technologies.
                    (B) Administration.--In providing incentives under 
                this paragraph, the Corporation shall--
                            (i) provide appropriate incentives for 
                        regulated investor-owned utilities, municipal 
                        utilities, electric cooperatives, and 
                        independent power producers, as determined by 
                        the Secretary of Energy; and
                            (ii) ensure that a range of the domestic 
                        coal types is employed in the facilities that 
                        receive incentives under this paragraph.
                    (C) Funding requirements.--
                            (i) Sequestration activities.--The 
                        Corporation shall provide incentives only to 
                        projects that meet 1 of the emission 
                        performance standards for limiting carbon 
                        dioxide under clause (ii) or (iii) of paragraph 
                        (1)(A).
                            (ii) Projects using certain coals.--In 
                        providing incentives under this paragraph, the 
                        Corporation shall set aside not less than 25 
                        percent of any amounts made available to carry 
                        out this subsection for projects using coal 
                        with an energy content of not more than 10,000 
                        British thermal units per pound.
            (5) Storage agreement required.--The Corporation shall 
        require a binding storage agreement for the carbon dioxide 
        captured in a project under this subsection in a geological 
        storage project permitted by the Administrator under 
        regulations promulgated pursuant to section 1421(d) of the Safe 
        Drinking Water Act (42 U.S.C. 300h(d)).
            (6) Distribution of funds.--
                    (A) Requirement.--The Corporation shall make awards 
                under this section in a manner that maximizes the 
                avoidance or reduction of greenhouse gas emissions.
                    (B) Incentives.--A project that receives an award 
                under this subsection may elect 1 of the following 
                financial incentives:
                            (i) A loan guarantee.
                            (ii) A cost-sharing grant to cover the 
                        incremental cost of installing and operating 
                        carbon capture and storage equipment (for which 
                        utilization costs may be covered for the first 
                        10 years of operation).
                            (iii) Production payments of not more than 
                        1.5 cents per kilowatt-hour of electric output 
                        during the first 10 years of commercial service 
                        of the project.
            (7) Limitation.--A project may not receive an award under 
        this subsection if the project receives an award under section 
        4402.
    (b) Sequestration.--
            (1) In general.--The Corporation shall use not less than 
        \1/2\ of the amounts made available to carry out this section 
        for each fiscal year for large-scale geological carbon storage 
        demonstration projects that store carbon dioxide captured from 
        electric generation units using coal gasification or other 
        advanced coal combustion processes, including units that 
        receive assistance under subsection (a).
            (2) Project capital and operating costs.--
                    (A) In general.--The Corporation shall provide 
                assistance under this subsection to reimburse the 
                project owner for a percentage of the incremental 
                project capital and operating costs of the project that 
                are attributable to carbon capture and sequestration, 
                as the Secretary determines to be appropriate.
                    (B) Certain projects.--Of the assistance provided 
                under subparagraph (A), the Corporation shall make 
                available up to 25 percent for projects that meet the 
                carbon dioxide emissions performance standard under 
                subsection (a)(1)(A)(i).

SEC. 4404. FUEL FROM CELLULOSIC BIOMASS.

    (a) In General.--The Corporation shall provide deployment 
incentives under this section to encourage a variety of projects to 
domestically produce transportation fuels from cellulosic biomass, 
relying on different feedstocks in different regions of the United 
States.
    (b) Project Eligibility.--Incentives under this section shall be 
provided on a competitive basis to projects that domestically produce 
fuels that--
            (1) meet United States fuel and emission specifications;
            (2) help diversify domestic transportation energy supplies; 
        and
            (3) improve or maintain air, water, soil, and habitat 
        quality, and protect scarce water supplies.
    (c) Incentives.--Incentives under this section may consist of--
            (1) loan guarantees for the construction of production 
        facilities and supporting infrastructure; or
            (2) production payments through a reverse auction in 
        accordance with subsection (d).
    (d) Reverse Auction.--
            (1) In general.--In providing incentives under this 
        section, the Corporation shall--
                    (A) prescribe rules under which producers of fuel 
                from cellulosic biomass may bid for production payments 
                under subsection (c)(2); and
                    (B) solicit bids from producers of different 
                classes of transportation fuel, as the Corporation 
                determines to be appropriate.
            (2) Requirement.--The rules under section 4402 shall 
        require that incentives shall be provided to the producers that 
        submit the lowest bid (in terms of cents per gallon gasoline 
        equivalent) for each class of transportation fuel from which 
        the Corporation solicits a bid.

SEC. 4405. ADVANCED TECHNOLOGY VEHICLES MANUFACTURING INCENTIVE 
              PROGRAM.

    (a) Definitions.--In this section:
            (1) Advanced technology vehicle.--The term ``advanced 
        technology vehicle'' means an electric vehicle, a fuel cell-
        powered vehicle, a hybrid or plug-in hybrid electric vehicle, 
        or an advanced diesel light duty motor vehicle, that meets--
                    (A) the Tier II Bin 5 emission standard established 
                in rules prescribed by the Administrator under section 
                202(i) of the Clean Air Act (42 U.S.C. 7521(i)), or a 
                lower-numbered Bin emission standard;
                    (B) any new emission standard for fine particulate 
                matter prescribed by the Administrator under that Act; 
                and
                    (C) standard of at least 125 percent of the average 
                base year combined fuel economy, calculated on an 
                energy-equivalent basis for vehicles other than 
                advanced diesel light-duty motor vehicles, for vehicles 
                of a substantially similar nature and footprint.
            (2) Combined fuel economy.--The term ``combined fuel 
        economy'' means--
                    (A) the combined city-highway miles per gallon 
                values, as reported in accordance with section 32908 of 
                title 49, United States Code; and
                    (B) in the case of an electric drive vehicle with 
                the ability to recharge from an off-board source, the 
                reported mileage, as determined in a manner consistent 
                with the Society of Automotive Engineers recommended 
                practice for that configuration, or a similar practice 
                recommended by the Secretary of Energy, using a 
                petroleum equivalence factor for the off-board 
                electricity (as defined by the Secretary of Energy).
            (3) Engineering integration costs.--The term ``engineering 
        integration costs'' includes the cost of engineering tasks 
        performed in the United States relating to--
                    (A) incorporating qualifying components into the 
                design of advanced technology vehicles; and
                    (B) designing new tooling and equipment for 
                production facilities that produce in the United States 
                qualifying components or advanced technology vehicles.
            (4) Qualifying component.--The term ``qualifying 
        component'' means a component that the Secretary of Energy 
        determines to be--
                    (A) specially designed for advanced technology 
                vehicles;
                    (B) installed for the purpose of meeting the 
                performance requirements of advanced technology 
                vehicles as specified in subparagraphs (A), (B), and 
                (C) of paragraph (1); and
                    (C) manufactured in the United States.
    (b) Manufacturer Facility Conversion Awards.--The Corporation shall 
provide facility conversion funding awards under this subsection to 
automobile manufacturers and component suppliers to pay up to 30 
percent of the cost of--
            (1) reequipping or expanding an existing manufacturing 
        facility to produce--
                    (A) qualifying advanced technology vehicles; or
                    (B) qualifying components; and
            (2) engineering integration of qualifying vehicles and 
        qualifying components.
    (c) Period of Availability.--An award under subsection (b) shall 
apply to--
            (1) facilities and equipment placed in service after the 
        date of enactment of this Act and before January 1, 2030; and
            (2) engineering integration costs incurred after the date 
        of enactment of this Act.
    (d) Additional Limitations.--
            (1) Maximum amount.--The maximum amount of all awards under 
        this section shall not exceed $40,000,000,000.
            (2) CAFE requirements.--The Corporation shall not make an 
        award under this section to an automobile manufacturer or 
        component supplier that, directly or through a parent, 
        subsidiary, or affiliated entity, is not in compliance with 
        each corporate average fuel economy standard under section 
        32902 of title 49, United States Code, in effect on the date of 
        the award.
    (e) Additional Requirements.--
            (1) Definition of recipient.--In this subsection, the term 
        ``recipient'' means the automobile manufacturer or component 
        supplier (including any parent, subsidiary, and affiliated 
        entities) that receives an award under this section.
            (2) Certification.--To be eligible for an award under this 
        section, an automobile manufacturer or component supplier 
        (including any parent, subsidiary, and affiliated entities) 
        shall certify to the Corporation that, for each of the 7 
        calendar years following the receipt of the award, the 
        manufacturer or supplier will maintain in the United States a 
        number of full-time or full-time-equivalent employees--
                    (A) equal to 90 percent of the monthly average 
                number of full-time or full-time-equivalent employees 
                maintained by the manufacturer or supplier for the 12-
                month period ending on the date of receipt of the 
                award;
                    (B) sufficient to ensure that the proportion that 
                the workforce of the manufacturer or supplier in the 
                United States bears to the global workforce of the 
                manufacturer or supplier is equal to or greater than 
                the average monthly proportion that the workforce of 
                the manufacturer or supplier in the United States bears 
                to the global workforce of the manufacturer or supplier 
                for the 12-month period ending on the date of receipt 
                of the award; or
                    (C) sufficient to ensure that any percentage 
                decrease in the hourly workforce of the manufacturer or 
                supplier in the United States is not greater than the 
                aggregate of the percentage decrease in the market 
                share of the manufacturer or supplier in the United 
                States and the increase in the productivity of the 
                manufacturer or supplier, calculated during the period 
                beginning on the date of receipt of the award and 
                ending on the date of certification under this 
                subparagraph.
            (3) Recertification.--Not later than 1 year after the date 
        of receipt of an award under this section, and annually 
        thereafter, a manufacturer or supplier shall--
                    (A) recertify to the Corporation that, during the 
                preceding calendar year, the manufacturer or supplier 
                has achieved compliance with the requirement described 
                in paragraph (2); and
                    (B) provide to the Corporation sufficient data for 
                verification of the recertification.
            (4) Repayment.--A manufacturer or supplier that fails to 
        make the recertification required by paragraph (3) shall pay to 
        the Corporation an amount equal to the difference between--
                    (A) the amount of the original award to the 
                manufacturer or supplier; and
                    (B) the product obtained by multiplying--
                            (i) an amount equal to \1/7\ of that 
                        original amount; and
                            (ii) the number of years during which the 
                        manufacturer or supplier--
                                    (I) received an award under this 
                                section; and
                                    (II) made the certification 
                                required by paragraph (3).

SEC. 4406. SUSTAINABLE ENERGY PROGRAM.

    (a) Definition of Sustainable Energy Technology.--In this section, 
the term ``sustainable energy technology'' means a technology to 
harness a renewable energy source (as defined in section 609(a) of the 
Public Utility Regulatory Policies Act of 1978 (7 U.S.C. 918c(a)), 
including in distributed energy systems.
    (b) Demonstration Projects.--The Corporation shall use not less 
than 25 percent of the amounts made available to carry out this section 
for each fiscal year to support demonstration projects in the United 
States using sustainable energy technology, including in distributed 
energy systems.
    (c) Deployment Incentives.--
            (1) In general.--The Corporation shall use not less than 25 
        percent of the amounts made available to carry out this section 
        for each fiscal year to provide Federal financial incentives to 
        facilitate the deployment in the United States of sustainable 
        energy technology, including in distributed energy systems.
            (2) Administration.--In providing incentives under this 
        subsection, the Corporation shall provide appropriate 
        incentives for regulated investor-owned utilities, municipal 
        utilities, electric cooperatives, independent power producers, 
        and consumers, as determined by the Secretary of Energy.
    (d) Distribution of Funds.--A project that receives an award under 
this subsection may elect 1 of the following Federal financial 
incentives:
            (1) A loan guarantee.
            (2) A cost-sharing grant to cover the incremental cost of 
        installing and operating equipment (for which utilization costs 
        may be covered for the first 10 years of operation).
            (3) Production payments of not more than 1.5 cents per 
        kilowatt-hour of electric output during the first 10 years of 
        commercial service of the project.
    (e) Limitation.--A project may not receive an award under this 
subsection if the project receives an award under section 4402.

                      Subtitle E--Energy Consumers

SEC. 4501. PROPORTIONS OF FUNDING AVAILABILITY.

    All funds deposited into the Energy Assistance Fund established by 
section 4101(1) shall be made available, without further appropriation 
or fiscal year limitation, to the following programs in the following 
proportions:
            (1) 50 percent of the funds to the low-income home energy 
        assistance program established under the Low Income Home Energy 
        Assistance Act of 1981 (42 U.S.C. 8621 et seq.).
            (2) 25 percent of the funds to the Weatherization 
        Assistance Program for Low-Income Persons established under 
        part A of title IV of the Energy Conservation and Production 
        Act (42 U.S.C. 6861 et seq.).
            (3) 25 percent of the funds to the rural energy assistance 
        program described in section 4502.

SEC. 4502. RURAL ENERGY ASSISTANCE PROGRAM.

    The Secretary of Energy shall carry out a program to use the funds 
made available under section 4501(3) to provide financial assistance to 
promote the availability of reasonably-priced distributed electricity 
in off-grid rural regions in which electricity prices exceed 150 
percent of the national average, as determined by the Secretary of 
Energy.

           Subtitle F--Climate Change Worker Training Program

SEC. 4601. FUNDING.

    All funds deposited into the Climate Change Worker Training Fund 
established by section 4101(2) shall be made available, without further 
appropriation or fiscal year limitation, to carry out the programs 
established under this subtitle.

SEC. 4602. PURPOSES.

    The purposes of this subtitle are--
            (1) to create a sustainable, comprehensive public program 
        that provides quality training that is linked to jobs that are 
        created through low-carbon energy, sustainable energy, and 
        energy efficiency initiatives;
            (2) to satisfy industry demand for a skilled workforce, 
        support economic growth, boost the global competitiveness of 
        the United States in expanding low-carbon energy, sustainable 
        energy, and energy efficiency industries, and provide economic 
        self-sufficiency and family-sustaining jobs for United States 
        workers, including low-wage workers, through quality training 
        and placement in job opportunities in those industries; and
            (3) to provide funds for Federal and State industry-wide 
        research, labor market information and labor exchange programs, 
        and the development of Federal- and State-administered training 
        programs.

SEC. 4603. ESTABLISHMENT.

    Not later than 180 days after the date of enactment of this Act, 
the Secretary of Labor (referred to in this subtitle as the 
``Secretary''), in consultation with the Administrator and the 
Secretary of Energy, shall establish a climate change worker training 
program that achieves the purposes of this subtitle.

SEC. 4604. ACTIVITIES.

    (a) National Research Program.--Under the program established under 
section 4603, the Secretary, acting through the Bureau of Labor 
Statistics, shall provide assistance to support national research to 
develop labor market data and to track future workforce trends 
resulting from energy-related initiatives carried out under this 
section, including--
            (1) linking research and development in low-carbon energy, 
        sustainable energy, and energy efficiency technology with the 
        development of standards and curricula for current and future 
        jobs;
            (2) the tracking and documentation of academic and 
        occupational competencies and future skill needs with respect 
        to low-carbon energy, sustainable energy, and energy efficiency 
        technology;
            (3) tracking and documentation of occupational information 
        and workforce training data with respect to low-carbon energy, 
        sustainable energy, and energy efficiency technology;
            (4) assessing new employment and work practices, including 
        career ladder and upgrade training and high-performance work 
        systems; and
            (5) collaborating with State agencies, industry, organized 
        labor, and community and nonprofit organizations to disseminate 
        successful innovations for labor market services and worker 
        training with respect to low-carbon energy, sustainable energy, 
        and energy efficiency technology.
    (b) National Energy Training Partnership Grants.--
            (1) Grants.--
                    (A) In general.--Under the program established 
                under section 4603, the Secretary shall award national 
                energy training partnerships grants on a competitive 
                basis to eligible entities to enable the entities--
                            (i) to carry out national training that 
                        leads to economic self-sufficiency; and
                            (ii) to develop a low-carbon energy, 
                        sustainable energy, and energy efficiency 
                        industries workforce.
                    (B) Diversity.--Grants shall be awarded under this 
                paragraph so as to ensure geographic diversity, with--
                            (i) at least 2 grants awarded to entities 
                        located in each of the 4 Petroleum 
                        Administration for Defense Districts with no 
                        subdistricts; and
                            (ii) at least 1 grant awarded to an entity 
                        located in each of the subdistricts of the 
                        Petroleum Administration for Defense District 
                        with subdistricts.
            (2) Eligibility.--To be eligible to receive a grant under 
        paragraph (1), an entity shall be a nonprofit partnership 
        that--
                    (A) includes the equal participation of industry, 
                including public or private employers, and labor 
                organizations, including joint labor-management 
                training programs, and may include community-based 
                organizations, educational institutions, small 
                businesses, cooperatives, State and local veterans 
                agencies, and veterans service organizations; and
                    (B) demonstrates--
                            (i) experience in implementing and 
                        operating worker skills training and education 
                        programs;
                            (ii) the ability to identify and involve in 
                        training programs carried out using the grant, 
                        target populations of workers that are or will 
                        be engaged in activities relating to low-carbon 
                        energy, sustainable energy, and energy 
                        efficiency industries; and
                            (iii) the ability to help workers achieve 
                        economic self-sufficiency.
            (3) Activities.--Activities to be carried out using a grant 
        provided under this subsection may include--
                    (A) the provision of occupational skills training, 
                including curriculum development, on-the-job training, 
                and classroom training;
                    (B) the provision of safety and health training;
                    (C) the provision of basic skills, literacy, 
                general equivalency degree, English as a second 
                language, and job readiness training;
                    (D) individual referral and tuition assistance for 
                a community college training program;
                    (E) the provision of customized training in 
                conjunction with an existing registered apprenticeship 
                program or labor-management partnership;
                    (F) the provision of career ladder and upgrade 
                training; and
                    (G) the implementation of transitional jobs 
                strategies.
    (c) State Labor Market Research, Information, and Labor Exchange 
Research Program.--
            (1) In general.--Under the program established under 
        section 4603, the Secretary shall award competitive grants to 
        States to enable the States to administer labor market and 
        labor exchange informational programs that include the 
        implementation of the activities described in paragraph (2).
            (2) Activities.--A State shall use amounts awarded under 
        this subsection to provide funding to the State agency that 
        administers the Wagner-Peyser Act (29 U.S.C. 49 et seq.) and 
        State unemployment compensation programs to carry out the 
        following activities using State agency merit staff:
                    (A) The identification of job openings in the low-
                carbon energy, sustainable energy, and energy 
                efficiency sector.
                    (B) The administration of skill and aptitude 
                testing and assessment for workers.
                    (C) The counseling, case management, and referral 
                of qualified job seekers to openings and training 
                programs, including low-carbon energy, sustainable 
                energy, and energy efficiency training programs.
    (d) State Energy Training Partnership Program.--
            (1) In general.--Under the program established under 
        section 4603, the Secretary shall award competitive grants to 
        States to enable the States to administer low-carbon energy, 
        sustainable energy, and energy efficiency workforce development 
        programs that include the implementation of the activities 
        described in paragraph (2).
            (2) Activities.--
                    (A) In general.--A State shall use amounts awarded 
                under the subsection to award competitive grants to 
                eligible State energy sector partnerships to enable the 
                partnerships to coordinate with existing apprenticeship 
                and labor management training programs and implement 
                training programs that lead to the economic self-
                sufficiency of trainees.
                    (B) Eligibility.--To be eligible to receive a grant 
                under this subsection, a State energy sector 
                partnership shall--
                            (i) consist of nonprofit organizations that 
                        include equal participation from industry, 
                        including public or private nonprofit 
                        employers, and labor organizations, including 
                        joint labor-management training programs, and 
                        may include representatives from local 
                        governments, worker investment agency one-stop 
                        career centers, community based organizations, 
                        community colleges, other post-secondary 
                        institutions, small businesses, cooperatives, 
                        State and local veterans agencies, and veterans 
                        service organizations;
                            (ii) demonstrate experience in implementing 
                        and operating worker skills training and 
                        education programs; and
                            (iii) demonstrate the ability to identify 
                        and involve in training programs, target 
                        populations of workers that are or will be 
                        engaged in activities relating to low-carbon 
                        energy, sustainable energy, and energy 
                        efficiency industries.
                    (C) Priority.--In awarding grants under this 
                subsection, the Secretary shall give priority to States 
                that demonstrate linkages of activities under the grant 
                with--
                            (i) meeting national energy policies 
                        associated with low-carbon energy, sustainable 
                        energy, and energy efficiency; and
                            (ii) meeting State energy policies 
                        associated with low-carbon energy, sustainable 
                        energy, and energy efficiency.
                    (D) Coordination.--An entity that receives a grant 
                under this subsection shall--
                            (i) coordinate activities carried out under 
                        the grant with existing apprenticeship and 
                        labor management training programs; and
                            (ii) implement training programs that lead 
                        to the economic self-sufficiency of trainees, 
                        including providing--
                                    (I) outreach and recruitment 
                                services, in coordination with the 
                                appropriate State agency;
                                    (II) occupational skills training, 
                                including curriculum development, on-
                                the-job training, and classroom 
                                training;
                                    (III) safety and health training;
                                    (IV) basic skills, literacy, 
                                general equivalency degree, English as 
                                a second language, and job readiness 
                                training;
                                    (V) individual referral and tuition 
                                assistance for a community college 
                                training program;
                                    (VI) customized training in 
                                conjunction with an existing registered 
                                apprenticeship program or labor-
                                management partnership;
                                    (VII) career ladder and upgrade 
                                training; and
                                    (VIII) services under transitional 
                                jobs strategies.

SEC. 4605. WORKER PROTECTIONS AND NONDISCRIMINATION REQUIREMENTS.

    (a) Applicability of WIA.--Sections 181 and 188 of the Workforce 
Investment Act of 1998 (29 U.S.C. 2931, 2938) shall apply to all 
programs carried out using assistance under this subtitle.
    (b) Consultation With Labor Organizations.--If a labor organization 
represents a substantial number of workers that are engaged in similar 
work or training in an area that is the same as the area that is 
proposed to be funded under this subtitle, the labor organization shall 
be provided an opportunity to be consulted and to submit comments in 
regard to such a proposal.

SEC. 4606. WORKFORCE TRAINING AND SAFETY.

    (a) University Programs.--In order to enhance the educational 
opportunities and safety of a future generation of scientists, 
engineers, health physicists, and energy workforce employees, 25 
percent of the funds deposited into the Climate Change Worker Training 
Fund shall be used for the University Programs within the Department of 
Energy, to help United States university and colleges stay at the 
forefront of science education and research and assist universities in 
the operation of advanced energy research facilities and in the 
performance of other educational activities.
    (b) Employee Organizations.--The Secretary shall provide technical 
assistance and funds for training directly to nonprofit employee 
organizations, voluntary emergency response organizations, and joint 
labor-management organizations that demonstrate experience in 
implementing and operating worker health and safety training and 
education programs.
    (c) Workforce Training.--
            (1) In general.--The Secretary of Labor, in cooperation 
        with the Secretary of Energy, shall promulgate regulations--
                    (A) to implement a program to provide workforce 
                training to meet the high demand for workers skilled in 
                zero- and low-emitting carbon energy technologies and 
                provide for related safety issues;
                    (B) to implement a fully validated electrical craft 
                certification program, career and technology awareness 
                at the primary and secondary education level, 
                preapprenticeship career technical education for all 
                zero- and low-emitting carbon energy technologies 
                related industrial skilled crafts, community college 
                and skill center training for zero- and low-emitting 
                carbon energy technology technicians, development of 
                construction management personnel for zero- and low-
                emitting carbon energy technology construction projects 
                and regional grants for integrated zero- and low-
                emitting carbon energy technology workforce development 
                programs; and
                    (C) to ensure the safety of workers in such 
                careers.
            (2) Consultation.--In carrying out this subsection, the 
        Secretary of Labor shall consult with relevant Federal 
        agencies, representatives of the zero- and low-emitting carbon 
        energy technologies industries, and organized labor, concerning 
        skills and such safety measures that are needed in those 
        industries.
    (d) Quantification.--For purposes of dispersing funds under this 
section, qualifying zero- and low-emitting carbon energy means any 
technology that has a rated capacity of at least 750 megawatts of 
power.

 Subtitle G--Adaptation Program for Natural Resources in United States 
                            and Territories

SEC. 4701. DEFINITIONS.

    In this subtitle:
            (1) Ecological process.--
                    (A) In general.--The term ``ecological process'' 
                means a biological, chemical, or physical interaction 
                between the biotic and abiotic components of an 
                ecosystem.
                    (B) Inclusions.--The term ``ecological process'' 
                includes--
                            (i) nutrient cycling;
                            (ii) pollination;
                            (iii) predator-prey relationships;
                            (iv) soil formation;
                            (v) gene flow;
                            (vi) larval dispersal and settlement;
                            (vii) hydrological cycling;
                            (viii) decomposition; and
                            (ix) disturbance regimes, such as fire and 
                        flooding.
            (2) Fish and wildlife.--The term ``fish and wildlife'' 
        means--
                    (A) any species of wild fauna, including fish and 
                other aquatic species; and
                    (B) any fauna in a captive breeding program the 
                object of which is to reintroduce individuals of a 
                depleted indigenous species into previously occupied 
                range.
            (3) Habitat.--The term ``habitat'' means the physical, 
        chemical, and biological properties that are used by wildlife 
        (including aquatic and terrestrial plant communities) for 
        growth, reproduction, and survival, food, water, cover, and 
        space, on a tract of land, in a body of water, or in an area or 
        region.
            (4) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).
            (5) Plant.--The term ``plant'' means any species of wild 
        flora.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.
            (7) State.--The term ``State'' means--
                    (A) a State;
                    (B) the District of Columbia;
                    (C) the Commonwealth of Puerto Rico; and
                    (D) any other territory or possession of the United 
                States.

SEC. 4702. ADAPTATION FUND.

    (a) Availability of Amounts.--All amounts deposited in the 
Adaptation Fund established by section 4101(3) shall be made available, 
without further appropriation or fiscal year limitation, to carry out 
activities (including research and education activities) that assist 
fish and wildlife, fish and wildlife habitat, plants, and associated 
ecological processes in becoming more resilient, adapting to, and 
surviving the impacts of climate change and ocean acidification 
(referred to in this section as ``adaptation activities'') pursuant to 
this section.
    (b) Department of the Interior.--Of the amounts made available 
annually to carry out this subsection--
            (1) 35 percent shall be allocated to the Secretary, and 
        subsequently made available to States through the Wildlife 
        Conservation and Restoration Account established under section 
        3(a)(2) of the Pittman-Robertson Wildlife Restoration Act (16 
        U.S.C. 669b(a)(2)), to carry out adaptation activities in 
        accordance with comprehensive State adaptation strategies, as 
        described in subsection (j);
            (2) 19 percent shall be allocated to the Secretary for use 
        in funding adaptation activities carried out--
                    (A) under endangered species, migratory bird, and 
                other fish and wildlife programs administered by the 
                United States Fish and Wildlife Service;
                    (B) on wildlife refuges and other public land under 
                the jurisdiction of the United States Fish and Wildlife 
                Service, the Bureau of Land Management, or the National 
                Park Service; or
                    (C) within Federal water managed by the Bureau of 
                Reclamation;
            (3) 5 percent shall be allocated to the Secretary for 
        adaptation activities carried out under cooperative grant 
        programs, including--
                    (A) the cooperative endangered species conservation 
                fund authorized under section 6(i) of the Endangered 
                Species Act of 1973 (16 U.S.C. 1535(i));
                    (B) programs under the North American Wetlands 
                Conservation Act (16 U.S.C. 4401 et seq.);
                    (C) the multinational species conservation fund 
                established under the heading ``multinational species 
                conservation fund'' of title I of the Department of the 
                Interior and Related Agencies Appropriations Act, 1999 
                (16 U.S.C. 4246);
                    (D) the Neotropical Migratory Bird Conservation 
                Fund established by section 9(a) of the Neotropical 
                Migratory Bird Conservation Act (16 U.S.C. 6108(a));
                    (E) the Coastal Program of the United States Fish 
                and Wildlife Service;
                    (F) the National Fish Habitat Action Plan;
                    (G) the Partners for Fish and Wildlife Program;
                    (H) the Landowner Incentive Program;
                    (I) the Wildlife Without Borders Program of the 
                United States Fish and Wildlife Service; and
                    (J) the Park Flight Migratory Bird Program of the 
                National Park Service; and
            (4) 1 percent shall be allocated to the Secretary and 
        subsequently made available to Indian tribes to carry out 
        adaptation activities through the tribal wildlife grants 
        program of the United States Fish and Wildlife Service.
    (c) Land and Water Conservation Fund.--
            (1) Deposits.--
                    (A) In general.--Except as provided in paragraph 
                (2), of the amounts made available for each fiscal year 
                to carry out this subsection, 10 percent shall be 
                deposited into the Land and Water Conservation Fund 
                established under section 2 of the Land and Water 
                Conservation Fund Act of 1965 (16 U.S.C. 460l-5).
                    (B) Deposits to the Land and Water Conservation 
                Fund under this subsection shall--
                            (i) be supplemental to authorizations 
                        provided under section 3 of the Land and Water 
                        Conservation Fund Act of 1965 (16 U.S.C. 460l-
                        6); and
                            (ii) remain available for non-adaptation 
                        needs.
            (2) Exception.--For any fiscal year in which a deposit into 
        the Land and Water Conservation Fund under paragraph (1) would 
        result in an amount greater than $900,000,000--
                    (A) $900,000,000 shall be deposited into the Land 
                and Water Conservation Fund; and
                    (B) the remaining funds shall be distributed on a 
                pro rata basis as otherwise provided in this section.
            (3) Allocations.--Of the amounts deposited under this 
        subsection into the Land and Water Conservation Fund--
                    (A) \1/6\ shall be allocated to the Secretary and 
                made available to carry out section 6 of the Land and 
                Water Conservation Fund Act of 1965 (16 U.S.C. 460l-8) 
                to States, on a competitive basis--
                            (i) in accordance with comprehensive 
                        wildlife conservation strategies and Indian 
                        tribes, to carry out adaptation activities 
                        through the acquisition of land and interests 
                        in land;
                            (ii) notwithstanding section 5 of that Act 
                        (16 U.S.C. 460l-7); and
                            (iii) in addition to grants provided 
                        pursuant to--
                                    (I) annual appropriations Acts;
                                    (II) the Energy Policy Act of 2005 
                                (42 U.S.C. 15801 et seq.); or
                                    (III) any other authorization for 
                                nonadaptation needs;
                    (B) \1/3\ shall be allocated to the Secretary to 
                carry out adaptation activities through the acquisition 
                of lands and interests in land under section 7 of the 
                Land and Water Conservation Fund Act of 1965 (16 U.S.C. 
                460l-9);
                    (C) \1/6\ shall be allocated to the Secretary of 
                Agriculture and made available to the States to carry 
                out adaptation activities through the acquisition of 
                land and interests in land under section 7 of the 
                Forest Legacy Program under the Cooperative Forestry 
                Assistance Act of 1978 (16 U.S.C. 2103c); and
                    (D) \1/3\ shall be allocated to the Secretary of 
                Agriculture to carry out adaptation activities through 
                the acquisition of land and interests in land under 
                section 7 of the Land and Water Conservation Fund Act 
                of 1965 (16 U.S.C. 460l-9).
            (4) Expenditure of funds.--In allocating funds under 
        subsection (c), the Secretary and the Secretary of Agriculture 
        shall take into consideration factors including--
                    (A) the availability of non-Federal contributions 
                from State, local, or private sources;
                    (B) opportunities to protect wildlife corridors or 
                otherwise to link or consolidate fragmented habitats;
                    (C) opportunities to reduce the risk of 
                catastrophic wildfires, extreme flooding, or other 
                climate-related events that are harmful to fish and 
                wildlife and people;
                    (D) the potential for conservation of species or 
                habitat types at serious risk due to climate change, 
                ocean acidification, and other stressors; and
                    (E) the potential to provide enhanced access to 
                land and water for fishing, hunting, and other public 
                recreational uses.
    (d) Forest Service.--Of the amounts made available annually to 
carry out this section, 5 percent shall be allocated to the Secretary 
of Agriculture for use in funding adaptation activities carried out on 
national forests and national grasslands under the jurisdiction of the 
Forest Service, or pursuant to the cooperative Wings Across the 
Americas Program.
    (e) Environmental Protection Agency.--Of the amounts made available 
annually to carry out this section, 5 percent shall be allocated to the 
Administrator for use in adaptation activities restoring and 
protecting--
            (1) large-scale freshwater aquatic ecosystems, such as the 
        Everglades, the Great Lakes, Flathead Lake, the Missouri River, 
        the Mississippi River, the Colorado River, the Sacramento-San 
        Joaquin Rivers, the Ohio River, the Columbia-Snake River 
        System, the Apalachicola, Chattahoochee and Flint River System, 
        the Connecticut River, and the Yellowstone River;
            (2) large-scale estuarine ecosystems, such as Chesapeake 
        Bay, Long Island Sound, Puget Sound, the Mississippi River 
        Delta , San Francisco Bay Delta, Narragansett Bay, and 
        Albemarle-Pamlico Sound; and
            (3) freshwater and estuarine ecosystems, watersheds, and 
        basins identified as priorities by the Administrator, working 
        in cooperation with other Federal agencies, States, local 
        governments, scientists, and other conservation partners.
    (f) Corps of Engineers.--Of the amounts made available annually to 
carry out this section, 10 percent shall be allocated to the Secretary 
of the Army for use by the Corps of Engineers to carry out adaptation 
activities restoring--
            (1) large-scale freshwater aquatic ecosystems, such as the 
        ecosystems described in subsection (e)(1);
            (2) large-scale estuarine ecosystems, such as the 
        ecosystems described in subsection (e)(2);
            (3) freshwater and estuarine ecosystems, watersheds, and 
        basins identified as priorities by the Corps of Engineers, 
        working in cooperation with other Federal agencies, States, 
        local governments, scientists, and other conservation partners; 
        and
            (4) habitats or ecosystems under programs such as the 
        Estuary Restoration Act of 2000 (33 U.S.C. 2901 et seq.), 
        project modifications for improvement of the environment, and 
        aquatic restoration under section 206 of the Water Resources 
        Development Act of 1996 (33 U.S.C. 2330).
    (g) Department of Commerce.--Of the amounts made available annually 
to carry out this section, 10 percent shall be allocated to the 
Secretary of Commerce for use in funding adaptation activities to 
protect, maintain, and restore coastal, estuarine, and marine 
resources, habitats, and ecosystems, including such activities carried 
out under--
            (1) the coastal and estuarine land conservation program;
            (2) the community-based restoration program;
            (3) the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 
        et seq.), subject to the condition that State coastal agencies 
        shall incorporate, and the Secretary of Commerce shall approve, 
        coastal zone management plan elements that are--
                    (A) consistent with the national adaptation 
                strategy under subsection (i), as part of a coastal 
                zone management program established under this Act; and
                    (B) specifically designed to strengthen the ability 
                of coastal, estuarine, and marine resources, habitats, 
                and ecosystems to adapt to and withstand the impacts 
                of--
                            (i) global warming; and
                            (ii) where practicable, ocean 
                        acidification;
            (4) the Open Rivers Initiative;
            (5) the Magnuson Fishery Conservation and Management Act 
        (16 U.S.C. 1801 et seq.);
            (6) the Marine Mammal Protection Act of 1972 (16 U.S.C. 
        1361 et seq.);
            (7) the Endangered Species Act of 1973 (16 U.S.C. 1531 et 
        seq.);
            (8) the Marine Protection, Research, and Sanctuaries Act of 
        1972 (33 U.S.C. 1401 et seq.); and
            (9) the Coral Reef Conservation Act of 2000 (16 U.S.C. 6401 
        et seq.).
    (h) Cost Sharing.--Notwithstanding any other provision of law, a 
State or Indian tribe that receives a grant under paragraph (1) or (4) 
of subsection (b) shall provide 10 percent of the costs of each 
activity carried out using amounts under the grant.
    (i) National Adaptation Strategy.--
            (1) In general.--Effective beginning on the date on which 
        the President establishes the national strategy under paragraph 
        (3), funds made available under paragraphs (2), (3), and (4) of 
        subsection (b) and subsections (c) through (g) shall be used 
        only for adaptation activities that are consistent with the 
        national strategy.
            (2) Initial period.--Until the date on which the President 
        establishes the national strategy under paragraph (3), funds 
        made available under paragraphs (2), (3), and (4) of subsection 
        (b) and subsections (c) through (g) shall be used only for 
        adaptation activities that are consistent with a workplan 
        established by the President.
            (3) National strategy.--
                    (A) In general.--Not later than 3 years after the 
                date of enactment of this Act, the President shall 
                develop and implement a national strategy for assisting 
                fish and wildlife, fish and wildlife habitat, plants, 
                and associated ecological processes in becoming more 
                resilient and adapting to the impacts of climate change 
                and ocean acidification.
                    (B) Administration.--In establishing and revising 
                the national strategy, the President shall--
                            (i) base the national strategy on the best 
                        available science, as identified by the Science 
                        Advisory Board established under subparagraph 
                        (D);
                            (ii) develop the national strategy in 
                        cooperation with State fish and wildlife 
                        agencies, State coastal agencies, United States 
                        territories, and Indian tribes;
                            (iii) coordinate with the Secretary of the 
                        Interior, the Secretary of Commerce, the 
                        Secretary of Agriculture, the Secretary of 
                        Defense, the Administrator of the Environmental 
                        Protection Agency, and other agencies as 
                        appropriate;
                            (iv) consult with local governments, 
                        conservation organizations, scientists, and 
                        other interested stakeholders; and
                            (v) provide public notice and opportunity 
                        for comment.
                    (C) Contents.--The President shall include in the 
                national strategy, at a minimum, prioritized goals and 
                measures and a schedule for implementation--
                            (i) to identify and monitor fish and 
                        wildlife, fish and wildlife habitat, plants, 
                        and associated ecological processes that are 
                        particularly likely to be adversely affected by 
                        climate change and ocean acidification and have 
                        the greatest need for conservation;
                            (ii) to identify and monitor coastal, 
                        estuarine, marine, terrestrial, and freshwater 
                        habitats that are at the greatest risk of being 
                        damaged by climate change and ocean 
                        acidification;
                            (iii) to assist species in adapting to the 
                        impacts of climate change and ocean 
                        acidification;
                            (iv) to protect, acquire, maintain, and 
                        restore fish and wildlife habitat to build 
                        resilience to climate change and ocean 
                        acidification;
                            (v) to provide habitat linkages and 
                        corridors to facilitate fish, wildlife, and 
                        plant movement in response to climate change 
                        and ocean acidification;
                            (vi) to restore and protect ecological 
                        processes that sustain fish, wildlife, and 
                        plant populations that are vulnerable to 
                        climate change and ocean acidification;
                            (vii) to protect, maintain, and restore 
                        coastal, marine, and aquatic ecosystems so that 
                        the ecosystems are more resilient and better 
                        able to withstand the additional stresses 
                        associated with climate change, including 
                        relative sea level rise and ocean 
                        acidification;
                            (viii) to protect ocean and coastal species 
                        from the impact of climate change and ocean 
                        acidification;
                            (ix) to incorporate adaptation strategies 
                        and activities to address relative sea level 
                        rise in coastal zone planning;
                            (x) to protect, maintain, and restore ocean 
                        and coastal habitats to build healthy and 
                        resilient ecosystems, including the purchase of 
                        coastal and island land; and
                            (xi) to incorporate consideration of 
                        climate change and ocean acidification, and to 
                        integrate adaptation strategies and activities 
                        for fish and wildlife, fish and wildlife 
                        habitat, plants, and associated ecological 
                        processes, in the planning and management of 
                        Federal land and water administered by the 
                        Federal agencies that receive funding under 
                        this section.
                    (D) Science advisory board.--
                            (i) Establishment.--Not later than 180 days 
                        after the date of enactment of this Act, the 
                        Secretary shall establish and appoint the 
                        members of a science advisory board, to be 
                        comprised of not fewer than 10 and not more 
                        than 20 members, who shall--
                                    (I) be recommended by the President 
                                of the National Academy of Sciences;
                                    (II) have expertise in fish, 
                                wildlife, plant, aquatic, and coastal 
                                and marine biology, ecology, climate 
                                change, ocean acidification, and other 
                                relevant scientific disciplines; and
                                    (III) represent a balanced 
                                membership between Federal, State, and 
                                local representatives, universities, 
                                and conservation organizations.
                            (ii) Duties.--The science advisory board 
                        shall--
                                    (I) advise the President and 
                                relevant Federal agencies and 
                                departments on--
                                            (aa) the best available 
                                        science regarding the impacts 
                                        of climate change and ocean 
                                        acidification on fish and 
                                        wildlife, habitat, plants, and 
                                        associated ecological 
                                        processes; and
                                            (bb) scientific strategies 
                                        and mechanisms for adaptation; 
                                        and
                                    (II) identify and recommend 
                                priorities for ongoing research needs 
                                on those issues.
                            (iii) Collaboration.--The science advisory 
                        board shall collaborate with other climate 
                        change and ecosystem research entities in other 
                        Federal agencies and departments.
                            (iv) Availability to public.--The advice 
                        and recommendations of the science advisory 
                        board shall be made available to the public.
                            (v) Nonapplicability of faca.--The Federal 
                        Advisory Committee Act (5 U.S.C. App.) shall 
                        not apply to the science advisory board.
                    (E) Coordination with other plans.--In developing 
                the national strategy, the President shall, to the 
                maximum extent practicable--
                            (i) take into consideration research and 
                        information contained in--
                                    (I) State comprehensive wildlife 
                                conservation plans;
                                    (II) the North American waterfowl 
                                management plan;
                                    (III) the national fish habitat 
                                action plan;
                                    (IV) coastal zone management plans;
                                    (V) the reports of the Pew Oceans 
                                Commission and the United States 
                                Commission on Ocean Policy; and
                                    (VI) other relevant plans; and
                            (ii) coordinate and integrate the goals and 
                        measures identified in the national strategy 
                        with the goals and measures identified in those 
                        plans.
                    (F) Revisions.--Not later than 5 years after the 
                date on which the strategy is developed, and not less 
                frequently than every 5 years thereafter, the President 
                shall review and update the national strategy using the 
                procedures described in this paragraph.
    (j) State Comprehensive Adaptation Strategies.--
            (1) In general.--Except as provided in paragraph (2), funds 
        made available to States under this subtitle shall be used only 
        for activities that are consistent with a State strategy that 
        has been approved by, as appropriate--
                    (A) the Secretary of the Interior; or
                    (B) for any State with a coastal zone (within the 
                meaning of the Coastal Zone Management Act (16 U.S.C. 
                1451 et seq.)), by the Secretary of Commerce, subject 
                to the condition that approval by the Secretary of 
                Commerce shall be required only for those portions of 
                the strategy relating to activities affecting the 
                coastal zone.
            (2) Initial period.--
                    (A) In general.--Until the earlier of the date that 
                is 3 years after the date of enactment of this Act or 
                the date on which a State receives approval for the 
                State strategy, a State shall be eligible to receive 
                funding under subsection (b)(1) for adaptation 
                activities that are--
                            (i) consistent with the comprehensive 
                        wildlife strategy of the State and, where 
                        appropriate, other fish, wildlife and 
                        conservation strategies; and
                            (ii) in accordance with a workplan 
                        developed in coordination with, as 
                        appropriate--
                                    (I) the Secretary of the Interior; 
                                or
                                    (II) for any State with a coastal 
                                zone (within the meaning of the Coastal 
                                Zone Management Act (16 U.S.C. 1451 et 
                                seq.)), by the Secretary of Commerce, 
                                subject to the condition that approval 
                                by the Secretary of Commerce shall be 
                                required only for those portions of the 
                                strategy relating to activities 
                                affecting the coastal zone.
                    (B) Pending approval.--During the period for which 
                approval by the applicable Secretary of a State 
                strategy described in paragraph (3) is pending, the 
                State may continue receiving funds under subsection 
                (b)(1) pursuant to the workplan described subparagraph 
                (A)(ii).
            (3) Requirements.--A State strategy shall--
                    (A) describe the impacts of climate change and 
                ocean acidification on the diversity and health of the 
                fish, wildlife and plant populations, habitats, and 
                associated ecological processes;
                    (B) describe and prioritize proposed conservation 
                actions to assist fish, wildlife, and plant populations 
                in adapting to those impacts;
                    (C) establish programs for monitoring the impacts 
                of climate change on fish, wildlife, and plant 
                populations, habitats, and associated ecological 
                processes;
                    (D) include strategies, specific conservation 
                actions, and a timeframe for implementing conservation 
                actions for fish, wildlife, and plant populations, 
                habitats, and associated ecological processes;
                    (E) establish methods for assessing the 
                effectiveness of conservation actions taken to assist 
                fish, wildlife, and plant populations, habitats, and 
                associated ecological processes in adapting to those 
                impacts and for updating those actions to respond 
                appropriately to new information or changing 
                conditions;
                    (F) be developed--
                            (i) with the participation of the State 
                        fish and wildlife agency, the State agency 
                        responsible for administration of Land and 
                        Water Conservation Fund grants, the State 
                        Forest Legacy program coordinator, and the 
                        State coastal agency; and
                            (ii) in coordination with the Secretary of 
                        the Interior and, where applicable, the 
                        Secretary of Commerce;
                    (G) provide for solicitation and consideration of 
                public and independent scientific input;
                    (H) take into consideration research and 
                information contained in, and coordinate with and 
                integrate the goals and measures identified in, as 
                appropriate, other fish, wildlife, and habitat 
                conservation strategies, including--
                            (i) the national fish habitat action plan;
                            (ii) plans under the North American 
                        Wetlands Conservation Act (16 U.S.C. 4401 et 
                        seq.);
                            (iii) the Federal, State, and local 
                        partnership known as ``Partners in Flight'';
                            (iv) federally approved coastal zone 
                        management plans under the Coastal Zone 
                        Management Act of 1972 (16 U.S.C. 1451 et 
                        seq.);
                            (v) federally approved regional fishery 
                        management plans and habitat conservation 
                        activities under the Magnuson Fishery 
                        Conservation and Management Act (16 U.S.C. 1801 
                        et seq.);
                            (vi) the national coral reef action plan;
                            (vii) recovery plans for threatened species 
                        and endangered species under section 4(f) of 
                        the Endangered Species Act of 1973 (16 U.S.C. 
                        1533(f));
                            (viii) habitat conservation plans under 
                        section 10 of that Act (16 U.S.C. 1539);
                            (ix) other Federal and State plans for 
                        imperiled species;
                            (x) the United States shorebird 
                        conservation plan;
                            (xi) the North American waterbird 
                        conservation plan; and
                            (xii) other State-based strategies that 
                        comprehensively implement adaptation activities 
                        to remediate the effects of climate change and 
                        ocean acidification on fish, wildlife, and 
                        habitats; and
                    (I) be incorporated into a revision of the 
                comprehensive wildlife conservation strategy of a 
                State--
                            (i) that has been submitted to the United 
                        States Fish and Wildlife Service; and
                            (ii)(I) that has been approved by the 
                        Service; or
                            (II) on which a decision on approval is 
                        pending.
            (4) Updating.--Each State strategy described in paragraph 
        (3) shall be updated at least every 5 years.

   Subtitle H--International Climate Change Adaptation and National 
                            Security Program

SEC. 4801. FINDINGS.

    Congress finds that--
            (1) global climate change represents a potentially 
        significant threat multiplier for instability around the world 
        as changing precipitation patterns may exacerbate competition 
        and conflict over agricultural, vegetative, and water resources 
        and displace people, thus increasing hunger and poverty and 
        causing increased pressure on least developed countries;
            (2) the strategic, social, political, and economic 
        consequences of global climate change could have 
        disproportionate impacts on least developed countries, which 
        have fewer resources and thus, often fewer emissions;
            (3) the strategic, social, political, and economic 
        consequences of global climate change are likely to have a 
        greater adverse effect on less developed countries;
            (4) the consequences of global climate change could pose a 
        danger to the security interest and economic interest of the 
        United States; and
            (5) it is in the national security interest of the United 
        States to recognize, plan for, and mitigate the international 
        strategic, social, political, and economic effects of a 
        changing climate.

SEC. 4802. PURPOSES.

    The purposes of this subtitle are--
            (1) to protect the national security of the United States 
        where such interest can be advanced by minimizing, averting, or 
        increasing resilience to potentially destabilizing climate 
        change impacts;
            (2) to support the development of national and regional 
        climate change adaptation plans in least developed countries;
            (3) to support the deployment of technologies that would 
        help least developed countries reduce their greenhouse gas 
        emissions and respond to destabilizing impacts of climate 
        change;
            (4) to provide assistance to least-developed countries and 
        small island developing states with national or regional 
        climate change adaptation plans in the planning, financing, and 
        execution of adaptation projects;
            (5) to support investments and capital to reduce 
        vulnerability related to climate change and its impacts, 
        including but not limited to drought, famine, floods, sea level 
        rise, shifts in agricultural zones or seasons, shifts in range 
        that affect economic livelihoods, and refugees and internally 
        displaced persons;
            (6) to support climate change adaptation research in or for 
        least developed countries; and
            (7) to encourage the identification and adoption of 
        appropriate low-carbon and efficient energy technologies in 
        least-developed countries.

SEC. 4803. ESTABLISHMENT.

    (a) Establishment of Program.--The Secretary of State, working with 
the Administrator of the U.S. Agency for International Development 
(referred to in this subtitle as the ``Agency'') and the Administrator, 
shall establish an International Climate Change Adaptation and National 
Security Program within the Agency.
    (b) Responsibilities of Program.--The Program shall--
            (1) submit annual reports to the President, the Committees 
        on Environment and Public Works and Foreign Relations of the 
        Senate, and the Committees on Energy and Commerce and Foreign 
        Relations of the House of Representatives, and any other 
        relevant committees on national security, the economy and 
        foreign policy, that describe--
                    (A) the extent to which other countries are 
                committing to reducing greenhouse gas emissions through 
                mandatory programs;
                    (B) the extent to which global climate change, 
                through its potential negative impacts on sensitive 
                populations and natural resources in least developed 
                countries, may threaten, cause, or exacerbate political 
                instability or international conflict in those regions; 
                and
                    (C) the ramifications of any potentially 
                destabilizing impacts climate change may have on the 
                economic and national security of the United States, 
                including--
                            (i) the creation of refugees; and
                            (ii) international or internal armed 
                        conflicts over water, food, land, or other 
                        resources;
            (2) include in each annual report submitted under paragraph 
        (1) a description of how funds made available under section 
        4804 were spent to enhance the national security of the United 
        States and assist in avoiding the politically destabilizing 
        impacts of climate change in volatile regions of the world, 
        particularly least developed countries; and
            (3) identify and recommend the countries in which 
        assistance can have the greatest and most sustainable benefit 
        to reducing vulnerability to climate change, primarily in the 
        form of deploying adaptation and greenhouse gas reduction 
        technologies.

SEC. 4804. FUNDING.

    (a) Carrying Out Recommendations.--All funds deposited into the 
Climate Change and National Security Fund established by section 
4101(4) shall be made available, without further appropriation or 
fiscal year limitation, to carry out the program established under this 
subtitle.
    (b) Distribution of Funds.--The Administrator of the Agency shall 
distribute to the International Climate Change Adaptation and National 
Security Program the funds for the purposes described in section 4802.
    (c) Oversight.--The Administrator of the Agency shall oversee the 
expenditures by the Program.
    (d) Limitations.--Not more than 10 percent of amounts made 
available to carry out this subtitle shall be spent in any single 
country in any year.

              Subtitle I--Emergency Firefighting Programs

SEC. 4901. FINDINGS.

    Congress finds that--
            (1) since 1980, wildfires in the United States have burned 
        almost twice as many acres per year on average than the average 
        burned acreage during the period beginning on January 1, 1920, 
        and ending on December 31, 1979;
            (2) the wildfire season in the western United States has 
        increased by an average of 78 days during the 30-year period 
        preceding the date of enactment of this Act;
            (3) researchers predict that the area subject to wildfire 
        damage will increase during the 21st century by up to 118 
        percent as a result of climate change;
            (4) of the annual budget of the Forest Service, the Forest 
        Service used for wildfire suppression activities--
                    (A) 13 percent in 1991; and
                    (B) 45 percent in 2007; and
            (5) 1 percent of the largest escaped fires--
                    (A) burn 95 percent of all burned acres; and
                    (B) consume 85 percent of all wildfire fighting 
                costs.

SEC. 4902. BUREAU OF LAND MANAGEMENT EMERGENCY FIREFIGHTING PROGRAM.

    (a) Use of Funds.--The amounts deposited into the Bureau of Land 
Management Emergency Firefighting Fund established by section 4101(5) 
shall be made available, without further appropriation or fiscal year 
limitation, to pay for wildland fire suppression activities the costs 
of which are in excess of amounts annually appropriated to the 
Secretary of the Interior for normal, nonemergency wildland fire 
suppression activities.
    (b) Accounting and Reporting.--
            (1) In general.--Not later than 3 years after the date of 
        enactment of this Act, the Secretary of the Interior shall 
        establish an accounting and reporting system, in accordance and 
        compatible with National Fire Plan reporting procedures, for 
        the activities carried out under this section.
            (2) Requirement.--The system established under paragraph 
        (1) shall require that the Secretary of the Interior shall 
        submit to the Committee on Natural Resources of the House of 
        Representatives and the Committee on Energy and Natural 
        Resources of the Senate--
                    (A) a monthly report describing each expenditure 
                made from the Bureau of Land Management Emergency 
                Firefighting Fund during the preceding month; and
                    (B) a report at the end of each fiscal year 
                describing the expenditures made from the Bureau of 
                Land Management Emergency Firefighting Fund during the 
                preceding fiscal year.

SEC. 4903. FOREST SERVICE EMERGENCY FIREFIGHTING PROGRAM.

    (a) Use of Funds.--The amounts deposited into the Forest Service 
Emergency Firefighting Fund established by section 4101(6) shall be 
made available, without further appropriation or fiscal year 
limitation, to pay for wildland fire suppression activities the costs 
of which are in excess of amounts annually appropriated to the 
Secretary of Agriculture for normal, nonemergency wildland fire 
suppression activities.
    (b) Accounting and Reporting.--
            (1) In general.--Not later than 3 years after the date of 
        enactment of this Act, the Secretary of Agriculture shall 
        establish an accounting and reporting system, in accordance and 
        compatible with National Fire Plan reporting procedures, for 
        the activities carried out under this section.
            (2) Requirement.--The system established under paragraph 
        (1) shall require that the Secretary of Agriculture shall 
        submit to the Committee on Natural Resources of the House of 
        Representatives and the Committee on Energy and Natural 
        Resources of the Senate--
                    (A) a monthly report describing each expenditure 
                made from the Forest Service Emergency Firefighting 
                Fund during the preceding month; and
                    (B) a report at the end of each fiscal year 
                describing the expenditures made from the Forest 
                Service Emergency Firefighting Fund during the 
                preceding fiscal year.

                       TITLE V--ENERGY EFFICIENCY

                    Subtitle A--Appliance Efficiency

SEC. 5101. RESIDENTIAL BOILERS.

    Section 325(f) of the Energy Policy and Conservation Act (42 U.S.C. 
6925(f)) is amended--
            (1) in the subsection heading, by inserting ``and Boilers'' 
        after ``Furnaces'';
            (2) in paragraph (1), by striking ``except that'' and all 
        that follows through subparagraph (A) and inserting ``except 
        that'';
            (3) in subparagraph (B)--
                    (A) by striking ``(B) the Secretary'' and inserting 
                ``the Secretary''; and
                    (B) by redesignating clauses (i) through (iii) as 
                subparagraphs (A) through (C), respectively, and 
                indenting appropriately;
            (4) by redesignating paragraph (3) as paragraph (4); and
            (5) by inserting after paragraph (2) the following:
            ``(3) Boilers.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), boilers manufactured on or after September 1, 
                2012, shall meet the following requirements:


------------------------------------------------------------------------
                                  Minimum
                                Annual Fuel
  ``Boiler Type Requirements    Utilization             Design
                                 Efficiency
------------------------------------------------------------------------
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
------------------------------------------------------------------------

                    ``(B) Automatic means for adjusting water 
                temperature.--
                            ``(i) In general.--The manufacturer shall 
                        equip each gas, oil, and electric hot water 
                        boiler (other than a boiler equipped with 
                        tankless domestic water heating coils) with an 
                        automatic means for adjusting the temperature 
                        of the water supplied by the boiler to ensure 
                        that an incremental change in inferred heat 
                        load produces a corresponding incremental 
                        change in the temperature of water supplied.
                            ``(ii) Certain boilers.--For a boiler that 
                        fires at 1 input rate, the requirements of this 
                        subparagraph may be satisfied by providing an 
                        automatic means that allows the burner or 
                        heating element to fire only when the means has 
                        determined that the inferred heat load cannot 
                        be met by the residual heat of the water in the 
                        system.
                            ``(iii) No inferred heat load.--When there 
                        is no inferred heat load with respect to a hot 
                        water boiler, the automatic means described in 
                        clauses (i) and (ii) shall limit the 
                        temperature of the water in the boiler to not 
                        more than 140 degrees Fahrenheit.
                            ``(iv) Operation.--A boiler described in 
                        clause (i) or (ii) shall be operable only when 
                        the automatic means described in clauses (i), 
                        (ii), and (iii) is installed.
                    ``(C) Exception.--A boiler that is manufactured to 
                operate without any need for electricity, any electric 
                connection, any electric gauges, electric pumps, 
                electric wires, or electric devices of any sort, shall 
                not be required to meet the requirements of this 
                subsection.''.

SEC. 5102. REGIONAL VARIATIONS IN HEATING OR COOLING STANDARDS.

    (a) In General.--Section 327 of the Energy Policy and Conservation 
Act (42 U.S.C. 6297) is amended--
            (1) by redesignating subsections (e), (f), and (g) as 
        subsections (f), (g), and (h), respectively; and
            (2) by inserting after subsection (d) the following:
    ``(e) Regional Standards for Space Heating and Air Conditioning 
Products.--
            ``(1) Standards.--
                    ``(A) In general.--The Secretary may establish 
                regional standards for space heating and air 
                conditioning products, other than window-unit air-
                conditioners and portable space heaters.
                    ``(B) National minimum and regional standards.--For 
                each space heating and air conditioning product, the 
                Secretary may establish--
                            ``(i) a national minimum standard; and
                            ``(ii) 2 more stringent regional standards 
                        for regions determined to have significantly 
                        differing climatic conditions.
                    ``(C) Maximum savings.--Any standards established 
                for a region under subparagraph (B)(ii) shall achieve 
                the maximum level of energy savings that are 
                technically feasible and economically justified within 
                that region.
                    ``(D) Economic justifiability study.--
                            ``(i) In general.--As a preliminary step in 
                        determining the economic justifiability of 
                        establishing a regional standard under 
                        subparagraph (B)(ii), the Secretary shall 
                        conduct a study involving stakeholders, 
                        including--
                                    ``(I) a representative from the 
                                National Institute of Standards and 
                                Technology;
                                    ``(II) representatives of 
                                nongovernmental advocacy organizations;
                                    ``(III) representatives of product 
                                manufacturers, distributors, and 
                                installers;
                                    ``(IV) representatives of the gas 
                                and electric utility industries; and
                                    ``(V) such other individuals as the 
                                Secretary may designate.
                            ``(ii) Requirements.--The study under this 
                        subparagraph--
                                    ``(I) shall determine the potential 
                                benefits and consequences of 
                                prescribing regional standards for 
                                heating and cooling products; and
                                    ``(II) may, if favorable to the 
                                standards, constitute the evidence of 
                                economic justifiability required under 
                                this Act.
                    ``(E) Regional boundaries.--Regional boundaries 
                used in establishing regional standards under 
                subparagraph (B)(ii) shall--
                            ``(i) conform to State borders; and
                            ``(ii) include only contiguous States 
                        (other than Alaska and Hawaii), except that on 
                        the request of a State, the Secretary may 
                        divide the State to include a part of the State 
                        in each of 2 regions.
            ``(2) Noncomplying products.--If the Secretary establishes 
        standards for a region, it shall be unlawful under section 332 
        to offer for sale at retail, sell at retail, or install within 
        the region products that do not comply with the applicable 
        standards.
            ``(3) Distribution in commerce.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), no product manufactured in a manner 
                that complies with a regional standard established 
                under paragraph (1) shall be distributed in commerce 
                without a prominent label affixed to the product that 
                includes--
                            ``(i) at the top of the label, in print of 
                        not less than 14-point type, the following 
                        statement: `It is a violation of Federal law 
                        for this product to be installed in any State 
                        outside the region shaded on the map printed on 
                        this label.';
                            ``(ii) below the notice described in clause 
                        (i), an image of a map of the United States 
                        with clearly defined State boundaries and 
                        names, and with all States in which the product 
                        meets or exceeds the standard established 
                        pursuant to paragraph (1) shaded in a color or 
                        a manner as to be easily visible without 
                        obscuring the State boundaries and names; and
                            ``(iii) below the image of the map required 
                        under clause (ii), the following statement: `It 
                        is a violation of Federal law for this label to 
                        be removed, except by the owner and legal 
                        resident of any single-family home in which 
                        this product is installed.'.
                    ``(B) Energy-efficiency rating.--A product 
                manufactured that meets or exceeds all regional 
                standards established under this paragraph shall bear a 
                prominent label affixed to the product that includes at 
                the top of the label, in print of not less than 14-
                point type, the following statement: `This product has 
                achieved an energy-efficiency rating under Federal law 
                allowing its installation in any State.'.
            ``(4) Recordkeeping.--A manufacturer of space heating or 
        air conditioning equipment subject to regional standards 
        established under this subsection shall--
                    ``(A) obtain and retain records on the intended 
                installation locations of the equipment sold; and
                    ``(B) make such records available to the Secretary 
                on request.''.
    (b) Conforming Amendments.--Section 327 of the Energy Policy and 
Conservation Act (42 U.S.C. 6297) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (2), by striking ``subsection 
                (e)'' and inserting ``subsection (f)''; and
                    (B) in paragraph (3)--
                            (i) by striking ``subsection (f)(1)'' and 
                        inserting ``subsection (g)(1)''; and
                            (ii) by striking ``subsection (f)(2)'' and 
                        inserting ``subsection (g)(2)''; and
            (2) in subsection (c)(3), by striking ``subsection (f)(3)'' 
        and inserting ``subsection (g)(3)''.

                    Subtitle B--Building Efficiency

SEC. 5201. UPDATING STATE BUILDING ENERGY EFFICIENCY CODES.

    Section 304 of the Energy Conservation and Production Act (42 
U.S.C. 6833) is amended to read as follows:

``SEC. 304. UPDATING STATE BUILDING ENERGY EFFICIENCY CODES.

    ``(a) Updates.--
            ``(1) In general.--The Secretary shall support updating the 
        national model building energy codes and standards not later 
        than 3 years after the date of enactment of the Lieberman-
        Warner Climate Security Act of 2008, and not less frequently 
        every 3 years thereafter, to achieve overall energy savings, as 
        compared to the IECC (2006) for residential buildings and 
        ASHRAE Standard 90.1 (2004) for commercial buildings, of at 
        least--
                    ``(A) 30 percent, with respect to each edition of a 
                model code or standard published during the period 
                beginning on January 1, 2010, and ending on December 
                31, 2019;
                    ``(B) 50 percent, with respect to each edition of a 
                model code or standard published on or after January 1, 
                2020; and
                    ``(C) targets for intermediate and subsequent 
                years, to be established by the Secretary not less than 
                3 years before the beginning on each target year, in 
                coordination with IECC and ASHRAE Standard 90.1 cycles, 
                at the maximum level of energy efficiency that is 
                technologically feasible and lifecycle cost-effective.
            ``(2) Revisions to iecc and ashrae.--
                    ``(A) In general.--If the IECC or ASHRAE Standard 
                90.1 regarding building energy use is revised, not 
                later than 1 year after the date of the revision, the 
                Secretary shall determine whether the revision will--
                            ``(i) improve energy efficiency in 
                        buildings; and
                            ``(ii) meet the energy savings goals 
                        described in paragraph (1).
                    ``(B) Modifications.--
                            ``(i) In general.--If the Secretary makes a 
                        determination under subparagraph (A)(ii) that a 
                        code or standard does not meet the energy 
                        savings goals established under paragraph (1) 
                        or if a national model code or standard is not 
                        updated for more than 3 years, not later than 1 
                        year after the determination or the expiration 
                        of the 3-year period, the Secretary shall 
                        establish a modified code or standard that 
                        meets the energy savings goals.
                            ``(ii) Requirements.--
                                    ``(I) Energy savings.--A 
                                modification to a code or standard 
                                under clause (i) shall--
                                            ``(aa) achieve the maximum 
                                        level of energy savings that is 
                                        technically feasible and 
                                        lifecycle cost-effective;
                                            ``(bb) be achieved through 
                                        an amendment or supplement to 
                                        the most recent revision of the 
                                        IECC or ASHRAE Standard 90.1 
                                        and taking into consideration 
                                        other appropriate model codes 
                                        and standards; and
                                            ``(cc) incorporate 
                                        available appliances, 
                                        technologies, and construction 
                                        practices.
                                    ``(II) Treatment as baseline.--A 
                                modification to a code or standard 
                                under clause (i) shall serve as the 
                                baseline for the next applicable 
                                determination of the Secretary under 
                                subparagraph (A)(i).
                    ``(C) Public participation.--The Secretary shall--
                            ``(i) publish in the Federal Register a 
                        notice relating to each goal, determination, 
                        and modification under this paragraph; and
                            ``(ii) provide an opportunity for public 
                        comment regarding the goals, determinations, 
                        and modifications.
    ``(b) State Certification of Building Energy Code Updates.--
            ``(1) General certification.--
                    ``(A) In general.--Not later than 2 years after the 
                date of enactment of the Lieberman-Warner Climate 
                Security Act of 2008, each State shall certify to the 
                Secretary that the State has reviewed and updated the 
                provisions of the residential and commercial building 
                codes of the State regarding energy efficiency.
                    ``(B) Energy savings.--A certification under 
                subparagraph (A) shall include a demonstration that the 
                applicable provisions of the State code meet or exceed, 
                as applicable--
                            ``(i)(I) the IECC (2006) for residential 
                        buildings; or
                            ``(II) the ASHRAE Standard 90.1 (2004) for 
                        commercial buildings; or
                            ``(ii) the quantity of energy savings 
                        represented by the provisions referred to in 
                        clause (i).
            ``(2) Revision of codes and standards.--
                    ``(A) In general.--If the Secretary makes an 
                affirmative determination under subsection (a)(2)(A)(i) 
                or establishes a modified code or standard under 
                subsection (a)(2)(B), not later than 2 years after the 
                determination or proposal, each State shall certify 
                that the State has reviewed and updated the provisions 
                of the residential and commercial building codes of the 
                State regarding energy efficiency.
                    ``(B) Energy savings.--A certification under 
                subparagraph (A) shall include a demonstration that the 
                applicable provisions of the State code meet or 
                exceed--
                            ``(i) the modified code or standard; or
                            ``(ii) the quantity of energy savings 
                        represented by the modified code or standard.
                    ``(C) Failure to determine.--If the Secretary fails 
                to make a determination under subsection (a)(2)(A)(i) 
                by the date specified in subsection (a)(2), or if the 
                Secretary makes a negative determination, not later 
                than 2 years after the specified date or the date of 
                the determination, each State shall certify that the 
                State has--
                            ``(i) reviewed the revised code or 
                        standard; and
                            ``(ii) updated the provisions of the 
                        residential and commercial building codes of 
                        the State as necessary to meet or exceed, as 
                        applicable--
                                    ``(I) any provisions of a national 
                                code or standard determined to improve 
                                energy efficiency in buildings; or
                                    ``(II) energy savings achieved by 
                                those provisions through other means.
    ``(c) Achievement of Compliance by States.--
            ``(1) In general.--Not later than 3 years after the date on 
        which a State makes a certification under subsection (b), the 
        State shall certify to the Secretary that the State has 
        achieved compliance with the building energy code that is the 
        subject of the certification.
            ``(2) Rate of compliance.--The certification shall include 
        documentation of the rate of compliance based on independent 
        inspections of a random sample of the new and renovated 
        buildings covered by the State code during the preceding 
        calendar year.
            ``(3) Compliance.--A State shall be considered to achieve 
        compliance for purposes of paragraph (1) if--
                    ``(A) at least 90 percent of new and renovated 
                buildings covered by the State code during the 
                preceding calendar year substantially meet all the 
                requirements of the code; or
                    ``(B) the estimated excess energy use of new and 
                renovated buildings that did not meet the requirements 
                of the State code during the preceding calendar year, 
                as compared to a baseline of comparable buildings that 
                meet the requirements of the code, is not more than 10 
                percent of the estimated energy use of all new and 
                renovated buildings covered by the State code during 
                the preceding calendar year.
    ``(d) Failure to Certify.--
            ``(1) Extension of deadlines.--The Secretary shall extend a 
        deadline for certification by a State under subsection (b) or 
        (c) for not more than 1 additional year, if the State 
        demonstrates to the satisfaction of the Secretary that the 
        State has made--
                    ``(A) a good faith effort to comply with the 
                certification requirement; and
                    ``(B) significant progress with respect to the 
                compliance.
            ``(2) Noncompliance by state.--
                    ``(A) In general.--A State that fails to submit a 
                certification required under subsection (b) or (c), and 
                to which an extension is not provided under paragraph 
                (1), shall be considered to be out of compliance with 
                this section.
                    ``(B) Effect on local governments.--A local 
                government of a State that is out of compliance with 
                this section may be considered to be in compliance with 
                this section if the local government meets each 
                applicable certification requirement of this section.
    ``(e) Technical Assistance.--
            ``(1) In general.--The Secretary shall provide technical 
        assistance (including building energy analysis and design 
        tools, building demonstrations, and design assistance and 
        training) to ensure that national model building energy codes 
        and standards meet the goals described in subsection (a)(1).
            ``(2) Assistance to states.--The Secretary shall provide 
        technical assistance to States--
                    ``(A) to implement this section, including 
                procedures for States to demonstrate that the codes of 
                the States achieve equivalent or greater energy savings 
                than the national model codes and standards;
                    ``(B) to improve and implement State residential 
                and commercial building energy efficiency codes; and
                    ``(C) to otherwise promote the design and 
                construction of energy-efficient buildings.
    ``(f) Incentive Funding.--
            ``(1) In general.--The Secretary shall provide incentive 
        funding to States--
                    ``(A) to implement this section; and
                    ``(B) to improve and implement State residential 
                and commercial building energy efficiency codes, 
                including increasing and verifying compliance with the 
                codes.
            ``(2) Amount.--In determining whether, and in what amount, 
        to provide incentive funding under this subsection, the 
        Secretary shall take into consideration actions proposed by the 
        State--
                    ``(A) to implement this section;
                    ``(B) to implement and improve residential and 
                commercial building energy efficiency codes; and
                    ``(C) to promote building energy efficiency through 
                use of the codes.
            ``(3) Additional funding.--The Secretary shall provide 
        additional funding under this subsection for implementation of 
        a plan to demonstrate a rate of compliance with applicable 
        residential and commercial building energy efficiency codes at 
        a rate of not less than 90 percent, based on energy 
        performance--
                    ``(A) to a State that has adopted and is 
                implementing, on a statewide basis--
                            ``(i) a residential building energy 
                        efficiency code that meets or exceeds the 
                        requirements of the IECC (2006) (or a successor 
                        code that is the subject of an affirmative 
                        determination by the Secretary under subsection 
                        (a)(2)(A)(i)); and
                            ``(ii) a commercial building energy 
                        efficiency code that meets or exceeds the 
                        requirements of the ASHRAE Standard 90.1 (2004) 
                        (or a successor standard that is the subject of 
                        an affirmative determination by the Secretary 
                        under subsection (a)(2)(A)(i)); or
                    ``(B) in the case of a State in which no statewide 
                energy code exists for residential buildings or 
                commercial buildings, or in which the State code fails 
                to comply with subparagraph (A), to a local government 
                that has adopted and is implementing residential and 
                commercial building energy efficiency codes, as 
                described in subparagraph (A).
            ``(4) Training.--Of the amounts made available to carry out 
        this subsection, the Secretary may use not more than $500,000 
        for each State to train State and local officials to implement 
        State or local energy codes in accordance with a plan described 
        in paragraph (3).''.

SEC. 5202. CONFORMING AMENDMENT.

    Section 303 of the Energy Conservation and Production Act (42 
U.S.C. 6832) is amended by adding at the end the following new 
paragraph:
            ``(17) IECC.--The term `IECC' means the International 
        Energy Conservation Code.''.

       TITLE VI--GLOBAL EFFORT TO REDUCE GREENHOUSE GAS EMISSIONS

SEC. 6001. DEFINITIONS.

    In this title:
            (1) Baseline emission level.--The term ``baseline emission 
        level'' means, as determined by the Administrator, the total 
        average annual greenhouse gas emissions attributed to a 
        category of covered goods of a foreign country during the 
        period beginning on January 1, 2012, and ending on December 31, 
        2014, based on--
                    (A) relevant data available for that period; and
                    (B) to the extent necessary with respect to a 
                specific category of covered goods, economic and 
                engineering models and best available information on 
                technology performance levels for the manufacture of 
                that category of covered goods.
            (2) Comparable action.--The term ``comparable action'' 
        means any greenhouse gas regulatory programs, requirements, and 
        other measures adopted by a foreign country that, in 
        combination, are comparable in effect to actions carried out by 
        the United States to limit greenhouse gas emissions pursuant to 
        this Act, as determined by the President, taking into 
        consideration the level of economic development of the foreign 
        country.
            (3) Compliance year.--The term ``compliance year'' means 
        each calendar year for which the requirements of this title 
        apply to a category of covered goods of a covered foreign 
        country that is imported into the United States.
            (4) Covered foreign country.--The term ``covered foreign 
        country'' means a foreign country that is included on the 
        covered list prepared under section 6006(b)(3).
            (5) Covered good.--The term ``covered good'' means a good 
        that (as identified by the Administrator by rule)--
                    (A) is a primary product;
                    (B) generates, in the course of the manufacture of 
                the good, a substantial quantity of direct greenhouse 
                gas emissions and indirect greenhouse gas emissions; 
                and
                    (C) is closely related to a good the cost of 
                production of which in the United States is affected by 
                a requirement of this Act.
            (6) Foreign country.--The term ``foreign country'' means a 
        member of, or observer government to, the World Trade 
        Organization (WTO), other than the United States.
            (7) Indirect greenhouse gas emissions.--The term ``indirect 
        greenhouse gas emissions'' means any emissions of a greenhouse 
        gas resulting from the generation of electricity that is 
        consumed during the manufacture of a good.
            (8) International agreement.--The term ``international 
        agreement'' means any international agreement to which the 
        United States is a party, including the Marrakesh agreement 
        establishing the World Trade Organization, done at Marrakesh on 
        April 15, 1994.
            (9) International reserve allowance.--The term 
        ``international reserve allowance'' means an allowance 
        (denominated in units of metric tons of carbon dioxide 
        equivalent) that is--
                    (A) purchased from a special reserve of allowances 
                pursuant to section 6006(a)(2); and
                    (B) used for purposes of meeting the requirements 
                of section 6006.
            (10) Primary product.--The term ``primary product'' means--
                    (A) iron, steel, aluminum, cement, bulk glass, or 
                paper; or
                    (B) any other manufactured product that--
                            (i) is sold in bulk for purposes of further 
                        manufacture; and
                            (ii) generates, in the course of the 
                        manufacture of the product, direct greenhouse 
                        gas emissions and indirect greenhouse gas 
                        emissions that are comparable (on an emissions-
                        per-dollar basis) to emissions generated in the 
                        manufacture of products by covered facilities 
                        in the industrial sector.

SEC. 6002. PURPOSES.

    The purposes of this title are--
            (1) to promote a strong global effort to significantly 
        reduce greenhouse gas emissions;
            (2) to ensure, to the maximum extent practicable, that 
        greenhouse gas emissions occurring outside the United States do 
        not undermine the objectives of the United States in addressing 
        global climate change; and
            (3) to encourage effective international action to achieve 
        those objectives through--
                    (A) agreements negotiated between the United States 
                and foreign countries; and
                    (B) measures carried out by the United States that 
                comply with applicable international agreements.

SEC. 6003. INTERNATIONAL NEGOTIATIONS.

    (a) Finding.--Congress finds that the purposes described in section 
6002 can be most effectively addressed and achieved through agreements 
negotiated between the United States and foreign countries.
    (b) Negotiating Objective.--
            (1) Statement of policy.--It is the policy of the United 
        States to work proactively under the United Nations Framework 
        Convention on Climate Change and, in other appropriate forums, 
        to establish binding agreements committing all major greenhouse 
        gas-emitting nations to contribute equitably to the reduction 
        of global greenhouse gas emissions.
            (2) Intent of congress regarding objective.--To the extent 
        that the agreements described in subsection (a) involve 
        measures that will affect international trade in any good or 
        service, it is the intent of Congress that the negotiating 
        objective of the United States shall be to focus multilateral 
        and bilateral international agreements on the reduction of 
        greenhouse gas emissions to advance achievement of the purposes 
        described in section 6002.

SEC. 6004. INTERAGENCY REVIEW.

    (a) Interagency Group.--
            (1) Establishment.--The President shall establish an 
        interagency group to carry out this section.
            (2) Chairperson.--The chairperson of the interagency group 
        established under paragraph (1) shall be the Secretary of 
        State.
            (3) Requirement.--The Administrator shall be a member of 
        the interagency group.
    (b) Determinations.--
            (1) In general.--Subject to paragraph (2), the interagency 
        group established under subsection (a)(1) shall determine 
        whether, and the extent to which, each foreign country has 
        taken comparable action to limit the greenhouse gas emissions 
        of the foreign country.
            (2) Exemption.--The interagency group may exempt from a 
        determination under paragraph (1) any foreign country on the 
        excluded list under section 6006(b)(2).
    (c) Report to President.--Not later than January 1, 2018, and 
annually thereafter, the interagency group shall submit to the 
President a report describing the determinations of the interagency 
group under subsection (b).

SEC. 6005. PRESIDENTIAL DETERMINATIONS.

    (a) In General.--Not later than January 1, 2019, and annually 
thereafter, the President shall determine whether each foreign country 
that is subject to interagency review under section 6004(b) has taken 
comparable action to limit the greenhouse gas emissions of the foreign 
country, taking into consideration--
            (1) the baseline emission levels of the foreign country; 
        and
            (2) applicable reports submitted under section 6004(c).
    (b) Reports.--The President shall--
            (1) submit to Congress an annual report describing the 
        determinations of the President under subsection (a) for the 
        most recent calendar year; and
            (2) publish the determinations in the Federal Register.

SEC. 6006. INTERNATIONAL RESERVE ALLOWANCE PROGRAM.

    (a) Establishment.--
            (1) In general.--The Administrator shall establish a 
        program under which the Administrator, during the 1-year period 
        beginning on January 1, 2019, and annually thereafter, shall 
        offer for sale to United States importers international reserve 
        allowances in accordance with this subsection.
            (2) Source.--International reserve allowances under 
        paragraph (1) shall be issued from a special reserve of 
        allowances that is separate from, and established in addition 
        to, the quantity of allowances established under section 1201.
            (3) Price.--
                    (A) In general.--Subject to subparagraph (B), the 
                Administrator shall establish, by rule, a methodology 
                for determining the price of international reserve 
                allowances for each compliance year at a level that 
                does not exceed the market price of allowances 
                established under section 1201 for the compliance year.
                    (B) Maximum price.--The price for an international 
                reserve allowance under subparagraph (A) shall not 
                exceed the clearing price for current compliance year 
                allowances established at the most recent auction of 
                allowances by the Corporation.
            (4) Serial number.--The Administrator shall assign a unique 
        serial number to each international reserve allowance issued 
        under this subsection.
            (5) Trading system.--The Administrator may establish, by 
        rule, a system for the sale, exchange, purchase, transfer, and 
        banking of international reserve allowances.
            (6) Regulated entities.--International reserve allowances 
        may not be submitted by regulated entities to comply with the 
        allowance submission requirements of section 1202.
            (7) Proceeds.--All proceeds from the sale of international 
        reserve allowances under this subsection shall be allocated to 
        a program that the Administrator, in coordination with the 
        Secretary of State, shall establish to mitigate the negative 
        impacts of global climate change on disadvantaged communities 
        in other countries.
    (b) Foreign Country Lists.--
            (1) In general.--Not later than January 1, 2020, and 
        annually thereafter, the President shall develop and publish in 
        the Federal Register 2 lists of foreign countries, in 
        accordance with this subsection.
            (2) Excluded list.--
                    (A) In general.--The President shall identify and 
                publish in a list, to be known as the ``excluded 
                list''--
                            (i) each foreign country determined by the 
                        President under section 6005(a) to have taken 
                        action comparable to that taken by the United 
                        States to limit the greenhouse gas emissions of 
                        the foreign country; and
                            (ii) each foreign country the share of 
                        total global greenhouse gas emissions of which 
                        is below the de minimis percentage described in 
                        subparagraph (B).
                    (B) De minimis percentage.--The de minimis 
                percentage referred to in subparagraph (A) is a 
                percentage of total global greenhouse gas emissions of 
                not more than 0.5, as determined by the President, for 
                the most recent calendar year for which emissions and 
                other relevant data is available, taking into 
                consideration, as necessary, the annual average 
                deforestation rate during a representative period for a 
                foreign country that is a developing country.
            (3) Covered list.--
                    (A) In general.--The President shall identify and 
                publish in a list, to be known as the ``covered list'', 
                each foreign country the covered goods of which are 
                subject to the requirements of this section.
                    (B) Requirement.--The covered list shall include 
                each foreign country that is not included on the 
                excluded list under paragraph (2).
    (c) Written Declarations.--
            (1) In general.--Effective beginning January 1, 2020, a 
        United States importer of any covered good shall, as a 
        condition of importation or withdrawal for consumption from a 
        warehouse of the covered good, submit to the Administrator and 
        the appropriate office of the U.S. Customs and Border 
        Protection a written declaration with respect to each such 
        importation or withdrawal.
            (2) Contents.--A written declaration under paragraph (1) 
        shall contain a statement that--
                    (A) the applicable covered good is accompanied by a 
                sufficient number of international reserve allowances, 
                as determined under subsection (d); or
                    (B) the covered good is from a foreign country on 
                the excluded list under subsection (b)(2).
            (3) Inclusion.--A written declaration described in 
        paragraph (2)(A) shall include the unique serial number of each 
        emission allowance associated with the importation of the 
        applicable covered good.
            (4) Failure to declare.--
                    (A) In general.--Except as provided in subparagraph 
                (B), an imported covered good that is not accompanied 
                by a written declaration under this subsection shall 
                not be permitted to enter the customs territory of the 
                United States.
                    (B) Exception for certain imports.--Subparagraph 
                (A) shall not apply to a covered good of a foreign 
                country if the President determines that--
                            (i) the foreign country has taken 
                        comparable action to limit the greenhouse gas 
                        emissions of the foreign country, in accordance 
                        with section 6005;
                            (ii) the United Nations has identified the 
                        foreign country as among the least-developed of 
                        developing countries; or
                            (iii) the foreign country is on the 
                        excluded list under subsection (b)(2).
            (5) Corrected declaration.--
                    (A) In general.--If, after making a declaration 
                required under this subsection, an importer has reason 
                to believe that the declaration contains information 
                that is not correct, the importer shall provide a 
                corrected declaration by not later than 30 days after 
                the date of discovery of the error, in accordance with 
                subparagraph (B).
                    (B) Method.--A corrected declaration under 
                subparagraph (A) shall be in the form of a letter or 
                other written statement to the Administrator and the 
                office of the U.S. Customs and Border Protection to 
                which the original declaration was submitted.
    (d) Quantity of Allowances Required.--
            (1) Methodology.--
                    (A) In general.--The Administrator shall establish, 
                by rule, a method for calculating the required number 
                of international reserve allowances that a United 
                States importer must submit, together with a written 
                declaration under subsection (c), for each category of 
                covered goods of each covered foreign country.
                    (B) Formula.--The Administrator shall develop a 
                general formula for calculating the international 
                reserve allowance requirement that applies, on a per 
                unit basis, to each covered good of a covered foreign 
                country that is imported during each compliance year.
            (2) Initial compliance year.--
                    (A) In general.--Subject to subparagraph (B), the 
                methodology under paragraph (1) shall establish an 
                international reserve allowance requirement (per unit 
                imported into the United States) for the initial 
                compliance year for each category of covered goods of 
                each covered foreign country that is equal to the 
                quotient obtained by dividing--
                            (i) the excess, if any, of the total 
                        emissions from the covered foreign country that 
                        are attributable to the category of covered 
                        goods produced during the most recent year for 
                        which data are available, over the baseline 
                        emission level of the covered foreign country 
                        for that category; and
                            (ii) the total quantity of the covered good 
                        produced in the covered foreign country during 
                        the most recent calendar year.
                    (B) Adjustments.--The Administrator shall adjust 
                the requirement under subparagraph (A)--
                            (i) in accordance with the ratio that--
                                    (I) the quantity of allowances that 
                                were allocated at no cost to entities 
                                within the industry sector 
                                manufacturing the covered goods for the 
                                compliance year during which the 
                                covered goods were imported into the 
                                United States; bears to
                                    (II) the greenhouse gas emissions 
                                of that industry sector; and
                            (ii) to take into account the level of 
                        economic development of the covered foreign 
                        country in which the covered goods were 
                        produced.
            (3) Subsequent compliance years.--For each subsequent 
        compliance year, the Administrator shall revise, as 
        appropriate, the international reserve allowance requirement 
        applicable to each category of imported covered goods of each 
        covered foreign country to reflect changes in the factors 
        described in paragraph (2)(B).
            (4) Publication.--Not later than 90 days before the 
        beginning of each compliance year, the Administrator shall 
        publish in the Federal Register a schedule describing the 
        required number of international reserve allowances for each 
        category of imported covered goods of each covered foreign 
        country, as calculated under this subsection.
    (e) Foreign Allowances and Credits.--
            (1) Foreign allowances.--
                    (A) In general.--A United States importer may 
                submit, in lieu of an international reserve allowance 
                issued under this section, a foreign allowance or 
                similar compliance instrument distributed by a foreign 
                country pursuant to a cap and trade program that 
                represents a comparable action.
                    (B) Commensurate cap and trade program.--For 
                purposes of subparagraph (A), a cap and trade program 
                that represents a comparable action shall include any 
                greenhouse gas regulatory program adopted by a covered 
                foreign country to limit the greenhouse gas emissions 
                of the covered foreign country, if the President 
                certifies that the program--
                            (i)(I) places a quantitative limitation on 
                        the total quantity of greenhouse gas emissions 
                        of the covered foreign country (expressed in 
                        terms of tons emitted per calendar year); and
                            (II) achieves that limitation through an 
                        allowance trading system;
                            (ii) satisfies such criteria as the 
                        President may establish for requirements 
                        relating to the enforceability of the cap and 
                        trade program, including requirements for 
                        monitoring, reporting, verification procedures, 
                        and allowance tracking; and
                            (iii) is a comparable action.
            (2) Foreign credits.--
                    (A) In general.--A United States importer may 
                submit, in lieu of an international reserve allowance 
                issued under this section, a foreign credit or a credit 
                for an international offset project that the 
                Administrator has authorized for use under subtitle E 
                of title II.
                    (B) Application.--The limitation on the use of 
                international reserve allowances by regulated entities 
                under subsection (a)(6) shall not apply to a United 
                States importer for purposes of this paragraph.
    (f) Retirement of Allowances.--The Administrator shall retire each 
international reserve allowance, foreign allowance, and foreign credit 
submitted to achieve compliance with this section.
    (g) Consistency With International Agreements.--The Administrator, 
in consultation with the Secretary of State, shall adjust the 
international reserve allowance requirements established under this 
section (including the quantity of international reserve allowances 
required for each category of covered goods of a covered foreign 
country) as the Administrator determines to be necessary to ensure that 
the United States complies with all applicable international 
agreements.
    (h) Termination.--The international reserve allowance requirements 
of this section shall not apply to a covered good of a covered foreign 
country in any case in which the President makes a determination 
described in subsection (b)(2) with respect to the covered goods of 
that covered foreign country.
    (i) Final Regulations.--Not later than January 1, 2019, the 
Administrator shall promulgate such regulations as the Administrator 
determines to be necessary to carry out this section.

SEC. 6007. ADJUSTMENT OF INTERNATIONAL RESERVE ALLOWANCE REQUIREMENTS.

    (a) In General.--Not later than January 1, 2023, and annually 
thereafter, the President shall prepare and submit to Congress a report 
that assesses the effectiveness of the applicable international reserve 
allowance requirements under section 6006 with respect to the covered 
goods of each covered foreign country.
    (b) Inadequate Requirements.--If the President determines that an 
applicable international reserve allowance requirement is not adequate 
to achieve the purposes of this title, the President, simultaneously 
with the submission of the report under subsection (a), shall--
            (1) adjust the requirement; or
            (2) take such other action as the President determines to 
        be necessary to improve the effectiveness of the requirement, 
        in accordance with all applicable international agreements.
    (c) Effective Date.--An adjustment under subsection (b)(1) shall 
take effect beginning on January 1 of the compliance year immediately 
following the date on which the adjustment is made.

                 TITLE VII--REVIEWS AND RECOMMENDATIONS

SEC. 7001. NATIONAL ACADEMY OF SCIENCES REVIEWS.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Administrator shall offer to enter into a contract 
with the National Academy of Sciences under which the Academy shall, 
not later than January 1, 2012, and every 3 years thereafter, submit to 
Congress and the Administrator a report that includes an analysis of--
            (1) the latest scientific information and data relevant to 
        global climate change;
            (2) the performance of this Act and other policies in 
        reducing greenhouse gas emissions and mitigating the adverse 
        impacts of global climate change;
            (3) the performance of this Act in ensuring that the Land 
        and Water Conservation Fund established under section 2 of the 
        Land and Water Conservation Fund Act of 1965 (16 U.S.C. 460l-5) 
        receives funds that are sufficient to carry out the purposes of 
        that Fund; and
            (4) the performance of this Act in ensuring that the Bureau 
        of Land Management and the Forest Service receive funds that 
        are sufficient to enable those agencies to suppress wildland 
        fire effectively and thereby minimize wildfire damage.
    (b) Latest Scientific Information.--The analysis required under 
subsection (a)(1) shall--
            (1) address existing reports, including the most recent 
        assessment report of the Intergovernmental Panel on Climate 
        Change; and
            (2) include a description of--
                    (A) trends in and projections for total United 
                States greenhouse gas emissions;
                    (B) trends in and projections for total worldwide 
                greenhouse gas emissions;
                    (C) current and projected future atmospheric 
                concentrations of greenhouse gases;
                    (D) current and projected future global average 
                temperature, including an analysis of whether an 
                increase of global average temperature in excess of 3.6 
                degrees Fahrenheit (2 degrees Celsius) above the 
                preindustrial average has occurred or is more likely 
                than not to occur in the foreseeable future as a result 
                of anthropogenic climate change;
                    (E) current and projected future adverse impacts of 
                global climate change on human populations, wildlife, 
                and natural resources; and
                    (F) trends in and projections for the health of the 
                oceans and ocean ecosystems, including predicted 
                changes in ocean acidity, temperatures, the extent of 
                coral reefs, and other indicators of ocean ecosystem 
                health, resulting from anthropogenic carbon dioxide and 
                climate change.
    (c) Performance of This Act and Existing Technologies.--The 
analysis required under subsection (a)(2) shall include a description 
of--
            (1) the extent to which this Act, in concert with other 
        policies, will prevent a dangerous increase in global average 
        temperature;
            (2) the extent to which this Act, in concert with other 
        policies, will prevent dangerous atmospheric concentrations of 
        greenhouse gases;
            (3) the current and future projected deployment of 
        technologies and practices that reduce or limit greenhouse gas 
        emissions, including--
                    (A) technologies for capture and disposal of 
                greenhouse gases;
                    (B) efficiency improvement technologies;
                    (C) zero-greenhouse gas emitting energy 
                technologies, including solar, wind, geothermal, and 
                nuclear technologies; and
                    (D) above- and below-ground biological 
                sequestration technologies;
            (4) the extent to which this Act and other policies are 
        accelerating the development and commercial deployment of 
        technologies and practices that reduce and limit greenhouse gas 
        emissions;
            (5) the extent to which the allocations and distributions 
        of emission allowances and auction proceeds under this Act are 
        advancing the purposes of this Act, and whether any of those 
        allocations and distributions should be modified, including by 
        increasing the percentage of annual Emission Allowance Account 
        being auctioned, to better carry out the purposes of this Act;
            (6) whether the motor vehicle fuel and motor vehicle and 
        nonroad regulations within the scope of Executive Order 13432 
        (72 Fed. Reg. 27717; relating to cooperation among agencies in 
        protecting the environment with respect to greenhouse gas 
        emissions from motor vehicles, nonroad vehicles, and nonroad 
        engines) have been finalized and implemented by Federal 
        agencies and departments;
            (7) whether any other transportation-related programs, 
        including fuel economy standard reform, greenhouse gas vehicle 
        emissions standards, renewable fuel volume mandates, low-carbon 
        fuel standards, and activities to reduce vehicle miles traveled 
        have been finalized and implemented by any Federal agencies or 
        departments;
            (8) whether any regulation or program described in 
        paragraph (12) or (13) is expected to achieve, as compared to 
        the baseline greenhouse gas emissions consistent with the 
        reference case contained in the report of the Energy 
        Information Administration entitled ``Annual Energy Outlook 
        2006'', at a minimum--
                    (A) at least a 6.2-percent reduction in cumulative 
                greenhouse gas emissions from the light-duty motor 
                vehicle sector, including light-duty vehicles and 
                light-duty trucks, during the period beginning on 
                January 1, 2010, and ending on December 31, 2020; or
                    (B) a cumulative reduction of approximately 
                1,140,000 metric tons of carbon dioxide equivalent, 
                measured on a full fuel cycle basis;
            (9) whether additional measures, including an increase in 
        the earned income tax credit, a reduction in payroll taxes, or 
        the implementation of electronic benefit transfers by State 
        health and human services agencies to reach low-income 
        individuals who are not required to file Federal income tax 
        returns, are needed to help low- and moderate-income 
        individuals respond to changes in the cost of energy-related 
        goods and services;
            (10) the feasibility of expanding the definition of the 
        term ``covered facility'' under this Act;
            (11) the feasibility of expanding the scope of the 
        compliance obligation established under section 1202(a);
            (12) the feasibility of reducing the number of emission 
        allowances comprising the Emission Allowance Account for 1 or 
        more calendar years under this Act;
            (13) the feasibility of establishing policies for reducing 
        greenhouse gas emissions over and above those policies 
        established by this Act;
            (14) the feasibility of accelerating the commercial 
        deployment of existing and emerging renewable energy 
        technologies for electricity generation, from solar, wind, 
        geothermal energy, ocean energy (including tidal, wave, 
        current, and thermal) or biomass (as defined in section 203(b) 
        of the Energy Policy Act of 2005 (42 U.S.C. 15852(b))), 
        utilizing a bonus emission allowance program comparable to the 
        program established under subtitle F of title III; and
            (15) the results of a report on products manufactured with 
        recycled materials that--
                    (A) describes the greenhouse gas emission 
                reductions those products can achieve;
                    (B) summarizes and assesses the results of research 
                on manufactured products and scrap recycling 
                activities; and
                    (C) evaluates the lifecycle greenhouse gas emission 
                reduction and other benefits and issues associated 
                with--
                            (i) recycling scrap metal (including end-
                        of-life vehicles), recovered fiber (or paper), 
                        scrap electronics, scrap glass, scrap plastics, 
                        scrap rubber, scrap tires, and scrap textiles 
                        with respect to reduction or avoidance of 
                        greenhouse gas to the environment;
                            (ii) using recyclable materials in 
                        manufactured products;
                            (iii) designing and manufacturing products 
                        that increase recyclable output;
                            (iv) eliminating or reducing the use of 
                        substances and materials in products that 
                        decrease recyclable output; and
                            (v) establishing a standardized system for 
                        lifecycle greenhouse gas emission reduction 
                        measurement and certification for the 
                        manufactured products and scrap recycling 
                        sectors, including the potential options for 
                        the structure and operation of such a system.

SEC. 7002. ENVIRONMENTAL PROTECTION AGENCY REVIEW.

    Not later than January 1, 2012, the Administrator shall submit to 
Congress a report indicating--
            (1) the latest scientific information and data relevant to 
        the health effects of mercury emissions from coal-fired 
        electric power generating facilities;
            (2) the state of the technology designed to reduce mercury 
        emissions from coal combustion, including the efficacy of the 
        technology with respect to each coal type; and
            (3) the extent to which the implementation of this Act is 
        assisting in bringing concentrations of particulate matter and 
        ozone into line with National Ambient Air Quality Standards.

SEC. 7003. ENVIRONMENTAL PROTECTION AGENCY RECOMMENDATIONS.

    (a) Review.--Not later than January 1, 2013, and every 3 years 
thereafter, the Administrator shall submit to Congress recommendations 
for action in response to the most recent report submitted by the 
National Academy of Sciences under section 7001 and the report 
submitted by the Administrator under section 7002.
    (b) Categories of Action.--The categories of action eligible for 
inclusion in the recommendations submitted under subsection (a) include 
proposed legislation recommending--
            (1) expansion of the definition of the term ``covered 
        facility'' under this Act;
            (2) expansion of the scope of the compliance obligation 
        established under section 1202;
            (3) adjustment of the number of emission allowances 
        comprising the Emission Allowance Account for 1 or more 
        calendar years under this Act;
            (4) establishment of policies for reducing greenhouse gas 
        emissions over and above those policies established under this 
        Act;
            (5) establishment of policies for reducing nationwide 
        emissions into the atmosphere of sulfur dioxide, nitrogen 
        oxides, and mercury in excess of the reductions resulting from 
        the implementation of this Act; and
            (6) establishment of a program, similar to the program 
        established under subtitle F of title III, for distributing 
        bonus emission allowances in order to accelerate the commercial 
        deployment of existing and emerging renewable energy 
        technologies for electricity generation.
    (c) Consistency With Reviews.--The Administrator shall include with 
each submission of recommendations under subsection (a) an explanation 
of any inconsistencies between the recommendations and the reviews 
submitted by the National Academy of Sciences under section 7001 and 
the report submitted by the Administrator under section 7002.
    (d) Savings Clause.--Nothing in this title limits, procedurally 
affects, or otherwise restricts the authority of the Administrator, a 
State, or any person to use authorities under this Act or any other law 
to adopt or enforce any rule.

SEC. 7004. PRESIDENTIAL RECOMMENDATIONS.

    (a) Establishment of the Interagency Climate Change Task Force.--
Not later than January 1, 2019, the President shall establish an 
Interagency Climate Change Task Force.
    (b) Composition.--The members of the Interagency Climate Change 
Task Force shall be--
            (1) the Administrator;
            (2) the Secretary of Energy;
            (3) the Secretary of the Treasury;
            (4) the Secretary of Commerce; and
            (5) such other Cabinet Secretaries as the President may 
        name to the membership of the Task Force.
    (c) Chairman.--The Administrator shall act as Chairman of the 
Interagency Climate Change Task Force.
    (d) Report to President.--
            (1) In general.--Not later than April 1, 2019, the Task 
        Force shall make public and submit to the President a consensus 
        report making recommendations, including specific legislation 
        for the President to recommend to Congress.
            (2) Basis.--The report shall be based on the third set of 
        recommendations submitted by the Administrator to Congress 
        under section 7003.
            (3) Inclusions.--The Task Force shall include with the 
        consensus report an explanation of any inconsistencies between 
        the consensus report and the third set of recommendations 
        submitted by the Administrator to Congress under section 7003.
    (e) Presidential Recommendation to Congress.--Not later than July 
1, 2020, the President shall submit to Congress the text of a proposed 
Act based on the consensus report submitted to the President under 
subsection (d).

SEC. 7005. ADAPTATION ASSESSMENTS AND PLAN.

    (a) Regional Estimates.--
            (1) Estimates.--
                    (A) In general.--The Administrator, in consultation 
                with the officials described in paragraph (2) and 
                relevant State agencies, shall conduct 6 regional 
                infrastructure cost assessments in various regions of 
                the United States, and a national cost assessment, to 
                provide estimates of the range of costs that should be 
                anticipated for adaptation to the impacts of climate 
                change.
                    (B) Various probabilities.--The Administrator shall 
                develop the estimates under subparagraph (A) for low, 
                medium, and high probabilities of climate change and 
                the potential impacts of climate change.
            (2) Description of officials.--The officials referred to in 
        paragraph (1) are--
                    (A) the Secretary of Agriculture;
                    (B) the Secretary of Commerce;
                    (C) the Secretary of Defense;
                    (D) the Secretary of Energy;
                    (E) the Secretary of Health and Human Services;
                    (F) the Secretary of Homeland Security;
                    (G) the Secretary of Housing and Urban Development;
                    (H) the Secretary of the Interior;
                    (I) the Secretary of Transportation;
                    (J) the Director of United States Geological 
                Survey; and
                    (K) the heads of such other Federal agencies and 
                departments as the Administrator determines to be 
                necessary.
            (3) Submission to congress.--Not later than 1 year after 
        the date of enactment of this Act, the Administrator shall 
        submit to Congress a report describing the results of the 
        assessments conducted under this subsection.
    (b) Adaptation Plan.--
            (1) In general.--Not later than 180 days after the date of 
        enactment of this Act, the Administrator shall submit to 
        Congress a climate change adaptation plan for the United 
        States, based on--
                    (A) assessments performed by the United Nations 
                Intergovernmental Panel on Climate Change in accordance 
                with the Global Change Research Act of 1990 (15 U.S.C. 
                2921 et seq.); and
                    (B) any other assessment prepared by a Federal, 
                regional, State, or local government entity that is--
                            (i) scientific;
                            (ii) peer-reviewed; or
                            (iii) subjected to public comment.
            (2) Inclusions.--The adaptation plan under paragraph (1) 
        shall include--
                    (A) a prioritized list of vulnerable systems and 
                regions in the United States;
                    (B) requirements for coordination between Federal, 
                State, and local governments to ensure that key public 
                infrastructure, safety, health, and land use planning 
                and control issues are addressed;
                    (C) requirements for coordination among the Federal 
                Government, industry, and communities;
                    (D) requirements for management of climate change, 
                including the need for information derived from 
                inundation prediction systems on the impacts to coastal 
                communities;
                    (E) an assessment of climate change science 
                research needs, including probabilistic assessments as 
                an aid to planning;
                    (F) an assessment of climate change technology 
                needs; and
                    (G) regional and national cost assessments for the 
                range of costs that should be anticipated for adapting 
                to the impacts of climate change.
    (c) Impacts of Climate Change on Low-Income Populations.--
            (1) In general.--The Administrator shall conduct research 
        on the impact of climate change on low-income populations in 
        all countries, including--
                    (A) an assessment of the adverse impact of climate 
                change on--
                            (i) low-income populations in the United 
                        States; and
                            (ii) developing countries;
                    (B)(i) an identification of appropriate climate 
                change adaptation measures and programs for developing 
                countries and low-income populations;
                    (ii) an assessment of the impact of the measures 
                and programs on low-income populations; and
                    (C) an estimate of the costs of developing and 
                implementing those climate change adaptation and 
                mitigation programs.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Administrator shall submit to 
        Congress a report describing the results of the research 
        conducted under paragraph (1).

SEC. 7006. STUDY BY ADMINISTRATOR OF AVIATION SECTOR GREENHOUSE GAS 
              EMISSIONS.

    (a) In General.--The Administrator shall enter into an agreement 
with the National Academy of Sciences under which the Academy shall 
conduct a study on greenhouse gas emissions associated with the 
aviation industry, including--
            (1) a determination of appropriate data necessary to make 
        determinations of emission inventories, considering fuel use, 
        airport operations, ground equipment, and all other sources of 
        emissions in the aviation industry;
            (2) an estimate of projected industry emissions for the 
        following 5-year, 20-year, and 50-year periods;
            (3) based on existing literature, research and surveys to 
        determine the existing best practices for emission reduction in 
        the aviation sector;
            (4) recommendations on areas of focus for additional 
        research for technologies and operations with the highest 
        potential to reduce emissions; and
            (5) recommendations of actions that the Federal Government 
        could take to encourage or require additional emissions 
        reductions.
    (b) Consultation.--In developing the parameters of the study under 
this section, the Administrator shall conduct the study under this 
section in consultation with--
            (1) the Secretary of Transportation, acting through the 
        Administrator of the Federal Aviation Administration; and
            (2) other appropriate Federal agencies and departments.

  TITLE VIII--FRAMEWORK FOR GEOLOGICAL SEQUESTRATION OF CARBON DIOXIDE

SEC. 8001. NATIONAL DRINKING WATER REGULATIONS.

    (a) In General.--Section 1421 of the Safe Drinking Water Act (42 
U.S.C. 300h) is amended--
            (1) in subsection (b)(1), by striking ``subsection (d)(2)'' 
        and inserting ``subsection (e)(2)'';
            (2) by redesignating subsection (d) as subsection (e); and
            (3) by inserting after subsection (c) the following:
    ``(d) Carbon Dioxide.--
            ``(1) Regulations.--Not later than 1 year after the date of 
        enactment of the Lieberman-Warner Climate Security Act of 2008, 
        the Administrator shall promulgate regulations for permitting 
        commercial-scale underground injection of carbon dioxide for 
        purposes of geological sequestration to address climate change, 
        including provisions--
                    ``(A) for monitoring and controlling the long-term 
                storage of carbon dioxide and avoiding, to the maximum 
                extent practicable, any release of carbon dioxide into 
                the atmosphere, and for ensuring protection of 
                underground sources of drinking water, human health, 
                and the environment; and
                    ``(B) relating to long-term liability associated 
                with commercial-scale geological sequestration.
            ``(2) Subsequent reports.--Not later than 5 years after the 
        date on which regulations are promulgated pursuant to paragraph 
        (1), and not less frequently than once every 5 years 
        thereafter, the Administrator shall submit to Congress a report 
        that contains an evaluation of the effectiveness of the 
        regulations, based on current knowledge and experience, with 
        particular emphasis on any new information on potential impacts 
        of commercial-scale geological sequestration on drinking water, 
        human health, and the environment.
            ``(3) Revision.--If the Administrator determines, based on 
        a report under paragraph (2), that regulations promulgated 
        pursuant to paragraph (1) require revision, the Administrator 
        shall promulgate revised regulations not later than 1 year 
        after the date on which the applicable report is submitted to 
        Congress under paragraph (2).''.
    (b) Conforming Amendment.--Section 1447(a)(4) of the Safe Drinking 
Water Act (42 U.S.C. 300j-6(a)(4)) is amended by striking ``section 
1421(d)(2)'' and inserting ``section 1421(e)(2)''.

SEC. 8002. ASSESSMENT OF GEOLOGICAL STORAGE CAPACITY FOR CARBON 
              DIOXIDE.

    (a) Definitions.--In this section:
            (1) Assessment.--The term ``assessment'' means the national 
        assessment of capacity for carbon dioxide completed under 
        subsection (f).
            (2) Capacity.--The term ``capacity'' means the portion of a 
        storage formation that can retain carbon dioxide in accordance 
        with the requirements (including physical, geological, and 
        economic requirements) established under the methodology 
        developed under subsection (b).
            (3) Engineered hazard.--The term ``engineered hazard'' 
        includes the location and completion history of any well that 
        could affect a storage formation or capacity.
            (4) Risk.--The term ``risk'' includes any risk posed by a 
        geomechanical, geochemical, hydrogeological, structural, or 
        engineered hazard.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior, acting through the Director of the United 
        States Geological Survey.
            (6) Storage formation.--The term ``storage formation'' 
        means a deep saline formation, unmineable coal seam, oil or gas 
        reservoir, or other geological formation that is capable of 
        accommodating a volume of industrial carbon dioxide.
    (b) Methodology.--Not later than 1 year after the date of enactment 
of this Act, the Secretary shall develop a methodology for conducting 
an assessment under subsection (f), taking into consideration--
            (1) the geographical extent of all potential storage 
        formations in all States;
            (2) the capacity of the potential storage formations;
            (3) the injectivity of the potential storage formations;
            (4) an estimate of potential volumes of oil and gas 
        recoverable by injection and storage of industrial carbon 
        dioxide in potential storage formations;
            (5) the risk associated with the potential storage 
        formations; and
            (6) the work performed to develop the Carbon Sequestration 
        Atlas of the United States and Canada completed by the 
        Department of Energy in April 2006.
    (c) Coordination.--
            (1) Federal coordination.--
                    (A) Consultation.--The Secretary shall consult with 
                the Secretary of Energy and the Administrator regarding 
                data sharing and the format, development of 
                methodology, and content of the assessment to ensure 
                the maximum usefulness and success of the assessment.
                    (B) Cooperation.--The Secretary of Energy and the 
                Administrator shall cooperate with the Secretary to 
                ensure, to the maximum extent practicable, the 
                usefulness and success of the assessment.
            (2) State coordination.--The Secretary shall consult with 
        State geological surveys and other relevant entities to ensure, 
        to the maximum extent practicable, the usefulness and success 
        of the assessment.
    (d) External Review and Publication.--On completion of the 
methodology under subsection (b), the Secretary shall--
            (1) publish the methodology and solicit comments from the 
        public and the heads of affected Federal and State agencies;
            (2) establish a panel of individuals with expertise in the 
        matters described in paragraphs (1) through (5) of subsection 
        (b) composed, as appropriate, of representatives of Federal 
        agencies, institutions of higher education, nongovernmental 
        organizations, State organizations, industry, and international 
        geosciences organizations to review the methodology and 
        comments received under paragraph (1); and
            (3) on completion of the review under paragraph (2), 
        publish in the Federal Register the revised final methodology.
    (e) Periodic Updates.--The methodology developed under this section 
shall be updated periodically (including not less frequently than once 
every 5 years) to incorporate new data as the data becomes available.
    (f) National Assessment.--
            (1) In general.--Not later than 2 years after the date of 
        publication of the methodology under subsection (d)(3), the 
        Secretary, in consultation with the Secretary of Energy and 
        State geological surveys, shall complete a national assessment 
        of the capacity for carbon dioxide storage in accordance with 
        the methodology.
            (2) Geological verification.--As part of the assessment, 
        the Secretary shall carry out a characterization program to 
        supplement the geological data relevant to determining storage 
        capacity in carbon dioxide in geological storage formations, 
        including--
                    (A) well log data;
                    (B) core data; and
                    (C) fluid sample data.
            (3) Partnership with other drilling programs.--As part of 
        the drilling characterization under paragraph (2), the 
        Secretary shall enter into partnerships, as appropriate, with 
        other entities to collect and integrate data from other 
        drilling programs relevant to the storage of carbon dioxide in 
        geologic formations.
            (4) Incorporation into natcarb.--
                    (A) In general.--On completion of the assessment, 
                the Secretary shall incorporate the results of the 
                assessment using, to the maximum extent practicable--
                            (i) the NatCarb database; or
                            (ii) a new database developed by the 
                        Secretary, as the Secretary determines to be 
                        necessary.
                    (B) Ranking.--The database shall include the data 
                necessary to rank potential storage sites--
                            (i) for capacity and risk;
                            (ii) across the United States;
                            (iii) within each State;
                            (iv) by formation; and
                            (v) within each basin.
            (5) Report.--Not later than 180 days after the date on 
        which the assessment is completed, the Secretary shall submit 
        to the Committee on Energy and Natural Resources of the Senate 
        and the Committee on Science and Technology of the House of 
        Representatives a report describing the results of the 
        assessment.
            (6) Periodic updates.--The assessment shall be updated 
        periodically (including not less frequently than once every 5 
        years) as necessary to support public and private sector 
        decisionmaking, as determined by the Secretary.

SEC. 8003. STUDY OF THE FEASIBILITY RELATING TO CONSTRUCTION OF 
              PIPELINES AND GEOLOGICAL CARBON DIOXIDE SEQUESTRATION 
              ACTIVITIES.

    (a) In General.--The Secretary of Energy, in coordination with the 
Administrator, the Federal Energy Regulatory Commission, the Secretary 
of Transportation, and the Secretary of the Interior, shall conduct a 
study to assess the feasibility of the construction of--
            (1) pipelines to be used for the transportation of carbon 
        dioxide for the purpose of sequestration or enhanced oil 
        recovery; and
            (2) geological carbon dioxide sequestration facilities.
    (b) Scope.--The study shall consider--
            (1) any barrier or potential barrier in existence as of the 
        date of enactment of this Act, including any technical, siting, 
        financing, or regulatory barrier, relating to--
                    (A) the construction of pipelines to be used for 
                the transportation of carbon dioxide for the purpose of 
                sequestration or enhanced oil recovery; or
                    (B) the geological sequestration of carbon dioxide;
            (2) any market risk (including throughput risk) relating 
        to--
                    (A) the construction of pipelines to be used for 
                the transportation of carbon dioxide for the purpose of 
                sequestration or enhanced oil recovery; or
                    (B) the geological sequestration of carbon dioxide;
            (3) any regulatory, financing, or siting option that, as 
        determined by the Secretary of Energy, would--
                    (A) mitigate any market risk described in paragraph 
                (2); or
                    (B) help ensure the construction of pipelines 
                dedicated to the transportation of carbon dioxide for 
                the purpose of sequestration or enhanced oil recovery;
            (4) the means by which to ensure the safe handling and 
        transportation of carbon dioxide;
            (5) any preventive measure to ensure the integration of 
        pipelines to be used for the transportation of carbon dioxide 
        for the purpose of sequestration or enhanced oil recovery; and
            (6) any other appropriate use, as determined by the 
        Secretary of Energy, in coordination with the Administrator, 
        the Federal Energy Regulatory Commission, the Secretary of 
        Transportation, and the Secretary of the Interior.
    (c) Report.--Not later than 180 days after the date of enactment of 
this Act, the Secretary of Energy shall submit to the Congress a report 
describing the results of the study.

SEC. 8004. LIABILITIES FOR CLOSED GEOLOGICAL STORAGE SITES.

    (a) Establishment of Task Force.--As soon as practicable after the 
date of enactment of this Act, the Administrator shall establish a task 
force, to be composed of an equal number of stakeholders, the public, 
subject matter experts, and members of the private sector, to conduct a 
study of the legal framework, environmental and safety considerations, 
and cost implications of potential Federal assumption of liability with 
respect to closed geological storage sites.
    (b) Report.--Not later than 18 months after the date of enactment 
of this Act, the task force established under subsection (a) shall 
submit to Congress a report describing the results of the study 
conducted under subsection (a), including recommendations of the task 
force, if any, with respect to the framework described in that 
subsection.

                        TITLE IX--MISCELLANEOUS

SEC. 9001. PARAMOUNT INTEREST WAIVER.

    (a) In General.--If the President determines that a national 
security emergency exists and, in light of information that was not 
available as of the date of enactment of this Act, it is in the 
paramount interest of the United States to modify any requirement under 
this Act to minimize the effects of the emergency, the President may, 
after opportunity for public notice and comment, temporarily adjust, 
suspend, or waive any regulations promulgated pursuant to this Act to 
achieve that minimization.
    (b) Consultation.--In making an emergency determination under 
subsection (a), the President shall, to the maximum extent practicable, 
consult with and take into account any advice received from--
            (1) the National Academy of Sciences;
            (2) the Secretary of Energy; and
            (3) the Administrator.
    (c) Judicial Review.--An emergency determination under subsection 
(a) shall be subject to judicial review in accordance with section 307 
of the Clean Air Act (42 U.S.C. 7607).

SEC. 9002. ADMINISTRATIVE PROCEDURE AND JUDICIAL REVIEW.

    (a) Rulemaking Procedures.--Any rule, requirement, regulation, 
method, standard, program, determination, or final action made or 
promulgated pursuant to any title of this Act, with the exception of 
sections 3102, 3103, 3201, and 3901, shall be subject to the rulemaking 
procedures described in sections 551 through 557 of title 5, United 
States Code.
    (b) Enforcement.--Each provision of this Act (including provisions 
relating to mandatory duties of the Administrator) shall be fully 
enforceable pursuant to sections 113, 303, and 304 of the Clean Air Act 
(42 U.S.C. 7413, 7603, 7604).
    (c) Recordkeeping, Inspections, Monitoring, Entry, and Subpoenas.--
The Administrator shall have the same powers and authority provided 
under sections 114 and 307(a) of the Clean Air Act (42 U.S.C. 7414, 
7607(a)) in carrying out, administering, and enforcing this Act.
    (d) Judicial Review.--A petition for judicial review of any 
regulation promulgated, or final action carried out, by the 
Administrator pursuant to this Act may be filed only--
            (1) in the United States Court of Appeals for the District 
        of Columbia; and
            (2) in accordance with section 307(b) of the Clean Air Act 
        (42 U.S.C. 7607(b)).

SEC. 9003. RETENTION OF STATE AUTHORITY.

    (a) In General.--Except as provided in subsection (b), in 
accordance with section 116 of the Clean Air Act (42 U.S.C. 7416) and 
section 510 of the Federal Water Pollution Control Act (33 U.S.C. 
1370), nothing in this Act precludes or abrogates the right of any 
State to adopt or enforce--
            (1) any standard, cap, limitation, or prohibition relating 
        to emissions of greenhouse gas; or
            (2) any requirement relating to control, abatement, or 
        avoidance of emissions of greenhouse gas.
    (b) Exception.--Notwithstanding subsection (a), no State may adopt 
a standard, cap, limitation, prohibition, or requirement that is less 
stringent than the applicable standard, cap, limitation, prohibition, 
or requirement under this Act.

SEC. 9004. TRIBAL AUTHORITY.

    For purposes of this Act, the Administrator may treat any federally 
recognized Indian tribe as a State, in accordance with section 301(d) 
of the Clean Air Act (42 U.S.C. 7601(d)).

SEC. 9005. ROCKY MOUNTAIN CENTERS FOR STUDY OF COAL UTILIZATION.

    (a) Designation.--The University of Wyoming and Montana State 
University shall be known and designated as the ``Rocky Mountain 
Centers for the Study of Coal Utilization''.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 9006. SUN GRANT CENTER RESEARCH ON COMPLIANCE WITH CLEAN AIR ACT.

    (a) Designation.--Each sun grant center is designated as a research 
institution of the Environmental Protection Agency for the purpose of 
conducting studies regarding the effects of biofuels and biomass on 
national and regional compliance with the Clean Air Act (42 U.S.C. 7401 
et seq.).
    (b) Funding.--The Administrator shall provide to the sun grant 
centers such funds as the Administrator determines to be necessary to 
carry out studies described in subsection (a).
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 9007. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as are necessary 
to carry out this Act.

           TITLE X--CONTROL OF HYDROFLUOROCARBON CONSUMPTION

SEC. 10001. APPLICABILITY.

    For purposes of this Act, it shall be unlawful for any person to 
produce or import for consumption in the United States any 
hydrofluorocarbon, or product or equipment containing a 
hydrofluorocarbon, except exclusively in accordance with this title and 
the regulations promulgated by the Administrator pursuant to this 
title.

SEC. 10002. DEFINITIONS.

    In this title:
            (1) Baseline.--The term ``baseline'' means the global 
        warming potential-weighted equivalent of 300,000,000 metric 
        tons of carbon dioxide.
            (2) Entity; person.--The terms ``entity'' and ``person'' 
        have the meaning given the term ``person'' in section 551 of 
        title 5, United States Code.
            (3) Global warming potential.--
                    (A) In general.--The term ``global warming 
                potential'' means the potential contribution to global 
                warming of a hydrofluorocarbon, as compared to the 
                potential contribution to global warming of an equal 
                weight of carbon dioxide.
                    (B) Calculation.--For the purposes of calculating 
                the global warming potential of a hydrofluorocarbon, 
                the values for the 100-year time horizon in the fourth 
                assessment report of the Intergovernmental Panel on 
                Climate Change shall be used.
            (4) Global warming potential-weighted.--The term ``global 
        warming potential-weighted'', with respect to a 
        hydrofluorocarbon, means the value equal to the product 
        obtained, for purposes of determining the quantity of carbon 
        dioxide with an equivalent global warming potential, by 
        multiplying--
                    (A) a certain quantity of the hydrofluorocarbon; 
                and
                    (B) the global warming potential of the 
                hydrofluorocarbon.
            (5) Hydrochlorofluorocarbon.--The term 
        ``hydrochlorofluorocarbon'' means any hydrochlorofluorocarbon 
        identified in section 602(b) of the Clean Air Act (42 U.S.C. 
        7671a(b)).
            (6) Hydrofluorocarbon.--The term ``hydrofluorocarbon'' 
        means a hydrofluoroalkane.
            (7) Hydrofluorocarbon consumption.--
                    (A) In general.--The term ``hydrofluorocarbon 
                consumption'', with respect to a hydrofluorocarbon, 
                means--
                            (i) in the case of a hydrofluorocarbon 
                        producer, a value equal to the difference 
                        between--
                                    (I) a value equal to the sum of--
                                            (aa) the quantity of the 
                                        hydrofluorocarbon produced in 
                                        the United States; and
                                            (bb) the quantity of the 
                                        hydrofluorocarbon imported from 
                                        any source into the United 
                                        States or acquired in the 
                                        United States from another 
                                        hydrofluorocarbon producer 
                                        through sale or other 
                                        transaction; and
                                    (II) the quantity of the 
                                hydrofluorocarbon exported or 
                                transferred to another 
                                hydrofluorocarbon producer or importer 
                                in the United States through sale or 
                                other transaction; and
                            (ii) in the case of a hydrofluorocarbon 
                        importer, a value equal to the difference 
                        between--
                                    (I) the quantity of the 
                                hydrofluorocarbon imported from any 
                                source into the United States; and
                                    (II) the quantity of the 
                                hydrofluorocarbon exported.
                    (B) Exclusion.--The term ``hydrofluorocarbon 
                consumption'' does not include a quantity of 
                hydrofluorocarbon that is recycled.
            (8) Hydrofluorocarbon consumption allowance.--The term 
        ``hydrofluorocarbon consumption allowance'' means an 
        authorization--
                    (A) to produce or import a global warming 
                potential-weighted quantity of hydrofluorocarbon 
                equivalent to 1 metric ton of carbon dioxide; or
                    (B) to import products or equipment containing a 
                quantity of hydrofluorocarbon equivalent in global 
                warming potential to 1 metric ton of carbon dioxide.
            (9) Hydrofluorocarbon destruction.--The term 
        ``hydrofluorocarbon destruction'' means a process that results 
        in the permanent transformation or decomposition of all or a 
        significant portion of a hydrofluorocarbon to another gas, 
        liquid, or solid with a lower or zero global warming potential.
            (10) Hydrofluorocarbon destruction allowance.--The term 
        ``hydrofluorocarbon destruction allowance'' means an 
        authorization to produce or import a global warming potential-
        weighted quantity of hydrofluorocarbon equal to the global 
        warming potential-weighted quantity of hydrofluorocarbon 
        destroyed pursuant to section 10010.
            (11) Hydrofluorocarbon importer.--The term 
        ``hydrofluorocarbon importer'' means an entity that imported 
        hydrofluorocarbon or products or equipment containing 
        hydrofluorocarbon into the United States during calendar year 
        2005.
            (12) Hydrofluorocarbon producer.--The term 
        ``hydrofluorocarbon producer'' means an entity that produced 
        hydrofluorocarbon in the United States for sale in the United 
        States during calendar year 2005.
            (13) Import.--The term ``import'' means the action of 
        landing on or bringing or introducing a product into, or 
        attempting to land on or bring or introduce a product into, any 
        area subject to the jurisdiction of the United States, 
        regardless of whether the action constitutes an importation 
        within the meaning of the customs laws of the United States.
            (14) Produce; production.--
                    (A) In general.--The terms ``produce'' and 
                ``production'' mean the manufacture of a 
                hydrofluorocarbon from any raw material, feedstock, or 
                chemical.
                    (B) Exclusions.--The terms ``produce'' and 
                ``production'' do not include--
                            (i) the manufacture of a hydrofluorocarbon 
                        that is used and entirely consumed (except for 
                        trace quantities) in the manufacture of other 
                        chemicals or products; or
                            (ii) the reuse or recycling of a 
                        hydrofluorocarbon.
            (15) Recycle; reuse.--The terms ``reuse'' and ``recycle'' 
        mean--
                    (A) the removal of a quantity of hydrofluorocarbon 
                from a product or equipment;
                    (B) the reprocessing of the product or equipment to 
                remove impurities; and
                    (C) the offering of the product or equipment for 
                sale in the United States.

SEC. 10003. CAP ON HYDROFLUOROCARBON CONSUMPTION AND IMPORTATION INTO 
              UNITED STATES.

    (a) Establishment.--The Administrator shall establish a cap on 
hydrofluorocarbon consumption in the United States for each calendar 
year during the period of calendar years 2010 through 2050, as directed 
in section 10004 that shall not be exceeded except as provided in 
section 10009.
    (b) Prohibition.--Consumption of a hydrofluorocarbon or products or 
equipment containing any hydrofluorocarbon, except as provided in this 
title, shall be illegal.

SEC. 10004. HYDROFLUOROCARBON CONSUMPTION ALLOWANCE ACCOUNT.

    (a) Allowance Account.--
            (1) Establishment.--Not later than April 1, 2009, and 
        annually thereafter through April 1, 2050, the Administrator 
        shall establish and allocate a separate quantity of 
        hydrofluorocarbon consumption allowances.
            (2) Denomination.--Hydrofluorocarbon consumption allowances 
        shall be denominated in metric tons of carbon dioxide 
        equivalent.
    (b) Identification Numbers.--The Administrator shall assign to each 
hydrofluorocarbon consumption allowance established under subsection 
(a) a unique identification number that includes the calendar year for 
which the hydrofluorocarbon consumption allowance was assigned.
    (c) Legal Status of Hydrofluorocarbon Consumption Allowances.--
            (1) In general.--A consumption allowance allocated under 
        this title is a limited authorization to produce or import a 
        hydrofluorocarbon and any product or equipment containing a 
        hydrofluorocarbon, in accordance with this title.
            (2) Allowance not property right.--A hydrofluorocarbon 
        consumption allowance does not constitute a property right.
            (3) Termination or limitation.--Nothing in this Act or any 
        other provision of law limits the authority of the United 
        States to terminate or limit hydrofluorocarbon consumption 
        allowances.
            (4) Effect of act.--Nothing in this Act relating to 
        hydrofluorocarbon consumption allowances shall affect the 
        application of, or any requirement of compliance with, any 
        other provision of law by any person.
    (d) Lifetime of Hydrofluorocarbon Consumption Allowances.--
Hydrofluorocarbon consumption allowances distributed by the 
Administrator and hydrofluorocarbon destruction allowances may be used 
for compliance for a period of not more than 5 years after the calendar 
year for which the allowances are allocated.
    (e) Hydrofluorocarbon Consumption Allowances for Each Calendar 
Year.--The number of hydrofluorocarbon consumption allowances 
established and allocated by the Administrator for each of calendar 
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
  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
 

SEC. 10005. ALLOCATION OF HYDROFLUOROCARBON CONSUMPTION ALLOWANCES.

    (a) In General.--Not later than 90 days before the beginning of 
each applicable calendar year, the Administrator shall allocate the 
portion of the hydrofluorocarbon consumption allowances in the 
hydrofluorocarbon consumption allowance account that is available for 
allocation for that calendar year.
    (b) Eligible Entities.--
            (1) In general.--The Administrator shall allocate 
        hydrofluorocarbon consumption allowances as described in 
        paragraph (2) to entities that--
                    (A) were hydrofluorocarbon producers or 
                hydrofluorocarbon importers during the period beginning 
                on January 1, 2004, and ending on December 31, 2006; 
                and
                    (B) are hydrofluorocarbon producers or 
                hydrofluorocarbon importers on the date of enactment of 
                this Act.
            (2) Description of allocation.--Hydrofluorocarbon 
        consumption allowances shall be allocated to entities described 
        in paragraph (1) as follows:
                    (A) Hydrofluorocarbon producers.--Each 
                hydrofluorocarbon producer shall receive a quantity of 
                hydrofluorocarbon allowances equal to the ratio that--
                            (i) a value equal to the difference 
                        between--
                                    (I) the global warming potential-
                                weighted average of 100 percent of the 
                                hydrofluorocarbon and 60 percent of the 
                                hydrochlorofluorocarbon produced in the 
                                United States, imported into the United 
                                States, or acquired in the United 
                                States by the hydrofluorocarbon 
                                producer during the period beginning on 
                                January 1, 2004, and ending on December 
                                31, 2006; and
                                    (II) the global warming potential-
                                weighted average of 100 percent of the 
                                hydrofluorocarbon and 60 percent of the 
                                hydrochlorofluorocarbon that the 
                                producer exported or transferred to 
                                another producer of hydrofluorocarbons 
                                in the United States during the period 
                                described in subclause (I); bears to
                            (ii) a value equal to the difference 
                        between--
                                    (I) the total global warming 
                                potential-weighted average of 100 
                                percent of the hydrofluorocarbon and 60 
                                per cent of the hydrochlorofluorocarbon 
                                produced in or imported into the United 
                                States during the period described in 
                                clause (i)(I); and
                                    (II) the global warming potential-
                                weighted average of 100 percent of the 
                                hydrofluorocarbon and 60 per cent of 
                                the hydrochlorofluorocarbon exported 
                                from the United States during that 
                                period.
                    (B) Hydrofluorocarbon importers.--Each 
                hydrofluorocarbon importer shall receive a quantity of 
                hydrofluorocarbon allowances equal to the ratio that--
                            (i) the global warming potential-weighted 
                        average of 100 percent of hydrofluorocarbon and 
                        60 percent of hydrochlorofluorocarbon imported 
                        by the hydrofluorocarbon importer as a product 
                        or contained in equipment during the period 
                        beginning on January 1, 2004, and ending on 
                        December 31, 2006; bears to
                            (ii) a value equal to the difference 
                        between--
                                    (I) the total global warming 
                                potential-weighted average of 100 
                                percent of the hydrofluorocarbon and 60 
                                per cent of the hydrochlorofluorocarbon 
                                produced in and imported into the 
                                United States during the period 
                                described in clause (i); and
                                    (II) the global warming potential-
                                weighted average of 100 percent of the 
                                hydrofluorocarbon and 60 per cent of 
                                the hydrochlorofluorocarbon exported 
                                from the United States during that 
                                period.
    (c) Withholding Allowances.--
            (1) In general.--For calendar year 2010 and each calendar 
        year thereafter, the Administrator shall withhold a quantity of 
        hydrofluorocarbon consumption allowances that would otherwise 
        be allocated under subsection (b) for auction at least annually 
        by the Corporation to the entities identified in subsection 
        (b)(1).
            (2) Auctions by corporation.--For each applicable calendar 
        year, the Administrator shall withhold, and the Corporation 
        shall auction to the entities identified in subsection (b)(1), 
        the following quantities of the hydrofluorocarbon consumption 
        allowances 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
  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
 

            (3) Proceeds.--The Corporation shall award the proceeds of 
        the auction to support the following purposes:
                    (A) A program to recover and destroy the maximum 
                economically recoverable chlorofluorocarbons, halons, 
                and other substances listed under title VI of the Clean 
                Air Act (42 U.S.C. 7671 et seq.) that have significant 
                ozone depletion potential and global warming potential.
                    (B) A program of incentives for consumer purchases 
                of refrigeration and cooling equipment that--
                            (i) contains refrigerants with no or low 
                        global warming potential; and
                            (ii) achieves energy efficiency that 
                        represents at least a 30 percent improvement, 
                        as compared to the more efficient of--
                                    (I) the applicable Federal energy 
                                efficiency standard; and
                                    (II) the applicable Energy Star 
                                rating.
                    (C) A program to support the development and 
                deployment of--
                            (i) hydrofluorocarbons with low global 
                        warming potential; and
                            (ii) energy efficient technologies, 
                        equipment, and products containing or using 
                        hydrofluorocarbons.
                    (D) The programs receiving auction proceeds under 
                title IV.

SEC. 10006. COMPLIANCE OBLIGATION.

    (a) Submission of Allowances.--
            (1) In general.--Not later than 90 days after the end of 
        each applicable calendar year, a hydrofluorocarbon producer or 
        hydrofluorocarbon importer shall submit to the Administrator a 
        quantity of hydrofluorocarbon consumption allowances, or 
        hydrofluorocarbon destruction allowances awarded pursuant to 
        section 10010, equal to the total number of global warming 
        potential-weighted tons of hydrofluorocarbon consumed in the 
        United States during the preceding calendar year by the 
        hydrofluorocarbon producer or hydrofluorocarbon importer, as 
        determined in accordance with paragraphs (2) and (3).
            (2) Hydrofluorocarbon producers.--For hydrofluorocarbon 
        producers, the quantity of hydrofluorocarbon consumed shall be 
        a value equal to the difference between--
                    (A) the global warming potential-weighted tons of 
                hydrofluorocarbon produced in the United States, 
                imported as a product, or acquired in the United States 
                from another hydrofluorocarbon producer through sale or 
                other transaction; and
                    (B) the global warming potential-weighted tons of 
                hydrofluorocarbon the producer exported or transferred 
                to another hydrofluorocarbon producer in the United 
                States through sale or other transaction.
            (3) Hydrofluorocarbon importers.--For hydrofluorocarbon 
        importers, hydrofluorocarbon consumed shall be a value equal to 
        the global warming potential-weighted tons of hydrofluorocarbon 
        imported by the hydrofluorocarbon importer or acquired in the 
        United States from a hydrofluorocarbon producer through sale or 
        other transaction.
    (b) Retirement.--Immediately on receipt of a hydrofluorocarbon 
consumption allowance or a hydrofluorocarbon destruction allowance 
under subsection (a), the Administrator shall retire the allowance.
    (c) Determination of Compliance.--Not later than July 1 of each 
year, the Administrator shall--
            (1) determine whether each hydrofluorocarbon producer and 
        hydrofluorocarbon importer achieved compliance with subsection 
        (a) for the preceding year; and
            (2) so notify each hydrofluorocarbon producer and 
        hydrofluorocarbon importer.
    (d) Penalties.--A hydrofluorocarbon producer or hydrofluorocarbon 
importer that is not in compliance with subsection (a), as determined 
under subsection (c), shall be liable for the payment of an excess 
consumption penalty as provided in section 1203, except that the 
deadlines described in this title shall be substituted for the 
deadlines described in that section.

SEC. 10007. SALE, EXCHANGE, AND OTHER USES OF HYDROFLUOROCARBON 
              CONSUMPTION ALLOWANCES.

    (a) Permissible Uses.--
            (1) In general.--A hydrofluorocarbon producer or 
        hydrofluorocarbon importer may purchase, hold, sell, exchange, 
        transfer, submit for compliance in accordance with section 
        10006, or retire hydrofluorocarbon consumption allowances or 
        hydrofluorocarbon destruction allowances.
            (2) Action on retirement.--If any hydrofluorocarbon 
        producer or hydrofluorocarbon importer permanently retires a 
        hydrofluorocarbon consumption allowance, the Administrator 
        shall promptly redistribute the allowance to another 
        hydrofluorocarbon producer or hydrofluorocarbon importer 
        pursuant to section 10005(b).
    (b) Prohibitions.--
            (1) In general.--Hydrofluorocarbon consumption allowances 
        or hydrofluorocarbon destruction allowances shall not be traded 
        or exchanged with allowances associated with any other emission 
        allowance allocation or trading program under this Act.
            (2) Certain uses.--Hydrofluorocarbon consumption allowances 
        shall not be used to achieve compliance with any other 
        obligation relating to emissions of greenhouse gases regulated 
        under any other provision of this Act, and emission allowances 
        established and allocated under any other provision of this Act 
        shall not be used to achieve compliance with this title.
    (c) Limitation.--The privilege of purchasing, holding, selling, 
exchanging, transferring, and submitting for compliance in accordance 
with section 10006, and retiring hydrofluorocarbon consumption 
allowances or hydrofluorocarbon destruction allowances shall be 
restricted to entities described in section 10005(b)(1).

SEC. 10008. ALLOWANCE TRANSFER SYSTEM.

    (a) Regulations.--Not later than 18 months after the date of 
enactment of this Act, the Administrator shall promulgate regulations 
to carry out the provisions of this title relating to hydrofluorocarbon 
consumption allowances and hydrofluorocarbon destruction allowances, 
including regulations providing that the transfer of those allowances 
shall not be effective until the date on which a written certification 
of the transfer, signed by a responsible official of each party to the 
transfer, is received and recorded by the Administrator in accordance 
with those regulations.
    (b) Transfers.--
            (1) In general.--The regulations promulgated under 
        subsection (a) shall permit the transfer of hydrofluorocarbon 
        consumption allowances prior to the allocation of the 
        allowances.
            (2) Deduction and addition of transfers.--A recorded 
        preallocation transfer of hydrofluorocarbon consumption 
        allowances shall be--
                    (A) deducted by the Administrator from the number 
                of hydrofluorocarbon consumption allowances that would 
                otherwise be allocated to the transferor; and
                    (B) added to those hydrofluorocarbon consumption 
                allowances allocated to the transferee.
    (c) Issuance, Recording, and Tracking System.--The regulations 
promulgated under subsection (a) shall include a system for issuing, 
recording, and tracking hydrofluorocarbon consumption and 
hydrofluorocarbon destruction allowances that shall specify all 
necessary procedures and requirements for an orderly and competitive 
functioning of the hydrofluorocarbon consumption allowance system.

SEC. 10009. BANKING AND BORROWING.

    (a) Banking.--A hydrofluorocarbon producer or hydrofluorocarbon 
importer that submits hydrofluorocarbon consumption allowances or 
hydrofluorocarbon destruction allowances to the Administrator to 
achieve compliance with section 10006 shall indicate in the 
identification number of the hydrofluorocarbon consumption allowance or 
hydrofluorocarbon destruction allowance the calendar year for which the 
allowance is submitted.
    (b) Borrowing of Hydrofluorocarbon Consumption Allowances.--In 
accordance with the regulations promulgated under section 10008(a), and 
subject to subsection (d), a hydrofluorocarbon producer or 
hydrofluorocarbon importer may--
            (1) borrow hydrofluorocarbon consumption allowances from 
        the Administrator; and
            (2) for a calendar year, submit borrowed hydrofluorocarbon 
        consumption allowances to the Administrator to satisfy not more 
        than 15 percent of the compliance obligation under section 
        10006.
    (c) Limitation on Borrowing.--A hydrofluorocarbon consumption 
allowance borrowed under subsection (b) shall be a hydrofluorocarbon 
consumption allowance established by the Administrator for a specific 
subsequent calendar year under section 10004(g).
    (d) Term.--A producer or importer shall not submit, and the 
Administrator shall not accept, a borrowed hydrofluorocarbon 
consumption allowance in partial satisfaction of the compliance 
obligation under section 10006 for any calendar year that is more than 
5 years before the calendar year included in the identification number 
of the borrowed hydrofluorocarbon consumption allowance.
    (e) Repayment of Interest.--For any borrowed hydrofluorocarbon 
consumption allowance submitted in partial satisfaction of the 
compliance obligation under section 10006 for a particular calendar 
year (referred to in this subsection as the ``use year''), the number 
of hydrofluorocarbon consumption allowances or hydrofluorocarbon 
destruction allowances that the hydrofluorocarbon producer or 
hydrofluorocarbon importer is required to submit under section 10006 
for the year from which the borrowed hydrofluorocarbon consumption 
allowance was taken (referred to in this subsection as the ``source 
year'') shall be increased by an amount equal to the product obtained 
by multiplying--
            (1) 1.1; and
            (2) the number of calendar years beginning after the use 
        year but before the source year.

SEC. 10010. HYDROFLUOROCARBON DESTRUCTION ALLOWANCES.

    (a) Destruction of Hydrofluorocarbon.--
            (1) In general.--The Administrator shall issue 
        hydrofluorocarbon destruction allowances to any 
        hydrofluorocarbon producer or hydrofluorocarbon importer that 
        performs or arranges for recovery and destruction of 
        hydrofluorocarbon from products or equipment.
            (2) Issuance and denomination.--Hydrofluorocarbon 
        destruction allowances shall be issued on a global warming 
        potential-weighted basis, denominated in terms of metric tons 
        of carbon dioxide.
            (3) Limitations.--
                    (A) Byproducts.--No hydrofluorocarbon destruction 
                allowance shall be issued under this section for 
                destruction of hydrofluorocarbon produced as a 
                byproduct in a production process.
                    (B) Certain purposes.--No hydrofluorocarbon 
                destruction allowance shall be issued under this 
                section for destruction or recycling of 
                hydrofluorocarbon produced for a purpose other than the 
                ultimate sale and use of the product.
    (b) Regulations.--
            (1) Requirement.--The regulations promulgated under section 
        10008(a) shall authorize the issuance of hydrofluorocarbon 
        destruction allowances.
            (2) Criteria.--Those regulations shall establish 
        appropriate criteria for determining--
                    (A) the effectiveness of destruction;
                    (B) the net quantity of global warming potential-
                weighted hydrofluorocarbon that has been destroyed; and
                    (C) procedures for verification, registration, and 
                issuance of hydrofluorocarbon destruction allowances.
    (c) Satisfaction of Requirements.--Beginning with calendar year 
2012, a hydrofluorocarbon producer or hydrofluorocarbon importer may 
satisfy a portion of the hydrofluorocarbon consumption allowance 
submission requirement under section 10006 by submitting 
hydrofluorocarbon destruction allowances generated in accordance with 
the regulations promulgated pursuant to section 10008(a).
    (d) Ownership.--Initial ownership of a hydrofluorocarbon 
destruction allowance shall be held by the hydrofluorocarbon producer 
or hydrofluorocarbon importer that performs or arranges for recovery 
and destruction or recycling of hydrofluorocarbon, including 
hydrofluorocarbon from products or equipment containing 
hydrofluorocarbon, unless otherwise specified in a legally binding 
contract or agreement to which the hydrofluorocarbon producer or 
hydrofluorocarbon importer is a party.
    (e) Transferability.--A hydrofluorocarbon destruction allowance 
generated pursuant to the regulations promulgated pursuant to 
subsection (b)--
            (1) may be sold, traded, or transferred to any 
        hydrofluorocarbon producer or hydrofluorocarbon importer 
        referred to in section 10005(b); but
            (2) shall not be sold, traded, transferred, or used for 
        compliance with any other emission allowance requirement of 
        this Act or any other law.

                 TITLE XI--AMENDMENTS TO CLEAN AIR ACT

SEC. 11001. NATIONAL RECYCLING AND EMISSION REDUCTION PROGRAM.

    Section 608 of the Clean Air Act (42 U.S.C. 7671g) is amended--
            (1) by redesignating subsections (a) through (c) as 
        subsections (b) through (d), respectively;
            (2) by inserting before subsection (b) (as so redesignated) 
        the following:
    ``(a) Definition of Hydrofluorocarbon Substitute.--In this section, 
the term `hydrofluorocarbon substitute' means a hydrofluorocarbon--
            ``(1) with a global warming potential of more than 150; and
            ``(2) that is used in or for types of equipment, 
        appliances, or processes that previously relied on class I or 
        class II substances.'';
            (3) in subsection (b) (as so redesignated)--
                    (A) in the matter following paragraph (3), by 
                striking ``Such regulations'' and inserting the 
                following:
            ``(5) The regulations'';
                    (B) by redesignating paragraph (3) as paragraph 
                (4); and
                    (C) by inserting after paragraph (2) the following:
            ``(3)(A) Not later than 1 year after the date of enactment 
        of the Lieberman-Warner Climate Security Act of 2008, the 
        Administrator shall promulgate regulations establishing 
        standards and requirements regarding the sale or distribution, 
        or offer for sale and distribution in interstate commerce, use, 
        and disposal of hydrofluorocarbon substitutes for class I and 
        class II substances not covered by paragraph (1), including the 
        use, recycling, and disposal of those hydrofluorocarbon 
        substitutes during the maintenance, service, repair, or 
        disposal of appliances and industrial process refrigeration 
        equipment.
            ``(B) The standards and requirements established under 
        subparagraph (A) shall take effect not later than 1 year after 
        the date of promulgation of the regulations.'';
            (4) in subsection (c) (as so redesignated)--
                    (A) by redesignating paragraphs (1) through (3) as 
                subparagraphs (A) through (C), respectively, and 
                indenting the subparagraphs appropriately;
                    (B) by striking the subsection designation and 
                heading and all that follows through ``following--'' 
                and inserting the following:
    ``(c) Safe Disposal.--The regulations under subsection (b) shall--
            ``(1) establish standards and requirements for the safe 
        disposal of class I and II substances and hydrofluorocarbon 
        substitutes for those substances; and
            ``(2) include each of the following:'';
                    (C) in subparagraph (A) (as redesignated by 
                subparagraph (A)), by inserting ``(or hydrofluorocarbon 
                substitutes for those substances)'' after ``class I or 
                class II substances''; and
                    (D) in paragraphs (2) and (3), by inserting ``(or a 
                hydrofluorocarbon substitutes for such a substance)'' 
                after ``class I or class II substance'' each place it 
                appears.

SEC. 11002. SERVICING OF MOTOR VEHICLE AIR CONDITIONERS.

    Section 609 of the Clean Air Act (42 U.S.C. 7671h) is amended--
            (1) in subsection (b), by adding at the end the following:
            ``(5) The term `hydrofluorocarbon substitute' means a 
        hydrofluorocarbon--
                    ``(A) with a global warming potential of more than 
                150; and
                    ``(B) that is used in or for types of equipment, 
                appliances, or processes that previously relied on 
                class I or class II substances.''; and
            (2) in subsection (e)--
                    (A) by striking the subsection designation and 
                heading and all that follows through ``Effective'' and 
                inserting the following:
    ``(e) Small Containers of Class I or Class II Substances and 
Hydrofluorocarbon Substitutes.--
            ``(1) Class i or class ii substances.--Effective 
        beginning''; and
                    (B) by adding at the end the following:
            ``(2) Hydrofluorocarbon substitutes.--Effective beginning 
        January 1, 2010, it shall be unlawful for any person to sell or 
        distribute, or offer for sale or distribution, in interstate 
        commerce to any person (other than a person performing service 
        for consideration on motor vehicle air-conditioning systems in 
        compliance with this section) any hydrofluorocarbon substitute 
        that is--
                    ``(A) suitable for use in a motor vehicle air-
                conditioning system; and
                    ``(B) in a container that contains less than 20 
                pounds of the hydrofluorocarbon substitute.''.

SEC. 11003. CARBON DIOXIDE REDUCTION.

    (a) Findings.--Congress finds that--
            (1) oil used for transportation contributes significantly 
        to air pollution, including global warming pollution, water 
        pollution, and other adverse impacts on the environment;
            (2) to reduce emissions of global warming pollutants, the 
        United States should increasingly rely on advanced clean fuels 
        for transportation; and
            (3) a comparison of life-cycle greenhouse gas emissions of 
        conventional transportation fuels and low-carbon transportation 
        fuels should be based on comparable fuels, such as a comparison 
        of gasoline to gasoline and diesel fuel to diesel fuel.
    (b) Definitions.--Section 211(o)(1) of the Clean Air Act (42 U.S.C. 
7545(o)(1)) is amended--
            (1) by redesignating subparagraphs (B), (C), and (D) as 
        subparagraphs (J), (G), and (H), respectively, and moving those 
        subparagraphs so as to appear in alphabetical order;
            (2) by inserting after subparagraph (A) the following:
                    ``(B) Cultivated noxious plant.--The term 
                `cultivated noxious plant' means a plant that is 
                included on--
                            ``(i) the Federal noxious weed list 
                        maintained by the Animal and Plant Health 
                        Inspection Service; or
                            ``(ii) any equivalent State list.
                    ``(C) Fuel emission baseline.--The term `fuel 
                emission baseline' means the average lifecycle 
                greenhouse gas emissions per unit of energy of 
                conventional transportation fuels in commerce in the 
                United States in calendar year 2008, as determined by 
                the Administrator under paragraph (11).
                    ``(D) Fuel provider.--
                            ``(i) In general.--The term `fuel provider' 
                        means an obligated party (as described in 
                        section 80.1106 of title 40, Code of Federal 
                        Regulations (or a successor regulation)).
                            ``(ii) Inclusions.--The term `fuel 
                        provider' includes, as the Administrator 
                        determines to be appropriate, an individual or 
                        entity that produces, blends, or imports 
                        gasoline or any other transportation fuel in 
                        commerce in, or into, the United States.
                    ``(E) Greenhouse gas.--The term `greenhouse gas' 
                means any of--
                            ``(i) carbon dioxide;
                            ``(ii) methane;
                            ``(iii) nitrous oxide;
                            ``(iv) hydrofluorocarbons;
                            ``(v) perfluorocarbons;
                            ``(vi) sulfur hexafluoride; and
                            ``(vii) any other emission or effect (such 
                        as particulate matter or a change in albedo) 
                        that the Administrator determines to be a 
                        significant factor in global warming as a 
                        result of the use of transportation fuel.
                    ``(F) Lifecycle greenhouse gas emissions.--
                            ``(i) In general.--The term `lifecycle 
                        greenhouse gas emissions' means, with respect 
                        to a transportation fuel, the aggregate 
                        quantity of greenhouse gases emitted per 
                        British thermal unit of fuel, as determined by 
                        the Administrator, from production through use 
                        of the fuel, as calculated to ensure that any 
                        nonrecurring emission is not amortized over a 
                        period of more than 20 years to ensure that 
                        required improvements in greenhouse gas 
                        emissions occur within that period.
                            ``(ii) Inclusions.--The term `lifecycle 
                        greenhouse gas emissions' includes emissions 
                        associated with--
                                    ``(I) feedstock production 
                                (including direct and indirect land-use 
                                changes) or extraction;
                                    ``(II) feedstock refining;
                                    ``(III) distribution of a fuel; and
                                    ``(IV) use of a fuel.''; and
            (3) by inserting after subparagraph (H) (as redesignated by 
        paragraph (1)) the following:
                    ``(I) Transportation fuel.--The term 
                `transportation fuel' means fuel used to power motor 
                vehicles, nonroad engines, or aircraft.''.
    (c)  Advanced Clean Fuel Program.--Section 211(o) of the Clean Air 
Act (42 U.S.C. 7545(o)) is amended by adding at the end the following:
            ``(11) Advanced clean fuel performance standard.--
                    ``(A) Standard.--
                            ``(i) In general.--Not later than January 
                        1, 2010, the Administrator shall, by 
                        regulation--
                                    ``(I) establish a methodology for 
                                use in determining the lifecycle 
                                greenhouse gas emissions of all 
                                transportation fuels in commerce;
                                    ``(II) determine the fuel emission 
                                baseline;
                                    ``(III) establish a transportation 
                                fuel certification and marketing 
                                process to determine the lifecycle 
                                greenhouse gas emissions of 
                                conventional transportation fuels and 
                                renewable fuels being sold or 
                                introduced into commerce in the United 
                                States that allows--
                                            ``(aa) for a simple 
                                        certification using default 
                                        values; and
                                            ``(bb) fuel providers to 
                                        opt in to the use of a 
                                        standardized certification tool 
                                        that would provide verifiable 
                                        and auditable greenhouse gas 
                                        ratings for fuels of the 
                                        providers through the use of 
                                        additional, certified data;
                                    ``(IV) in accordance with clause 
                                (ii), establish a requirement 
                                applicable to each fuel provider to 
                                reduce the average lifecycle greenhouse 
                                gas emissions per unit of energy of the 
                                aggregate quantity of transportation 
                                fuel produced, blended, or imported by 
                                the fuel provider to a level that is, 
                                to the maximum extent practicable--
                                            ``(aa) by not later than 
                                        calendar year 2011, at least 
                                        equal to or less than the fuel 
                                        emission baseline;
                                            ``(bb) by not later than 
                                        calendar year 2015, 5 percent 
                                        less than the fuel emission 
                                        baseline; and
                                            ``(cc) by not later than 
                                        calendar year 2020, 10 percent 
                                        less than the fuel emission 
                                        baseline; and
                                    ``(V) permit alternative reliable 
                                estimation methods to be used for the 
                                purpose of this clause during the first 
                                5 years that the requirement described 
                                in subclause (IV) is in effect.
                            ``(ii) Air quality impacts.--For the 
                        purpose of this subparagraph, in the case of 
                        any air quality-related adverse lifecycle 
                        impact resulting from emissions from motor 
                        vehicles using renewable fuel, the 
                        Administrator shall ensure, by regulation 
                        promulgated under this title, that gasoline 
                        containing renewable fuel does not result in--
                                    ``(I) average per-gallon motor 
                                vehicle emissions (measured on a mass 
                                basis) of air pollutants in excess of 
                                those emissions attributable to 
                                gasoline sold or introduced into 
                                commerce in the United States in 
                                calendar year 2007; or
                                    ``(II) a violation of any motor 
                                vehicle emission or fuel content 
                                limitation under any other provision of 
                                this Act.
                            ``(iii) Calendar year 2025 and 
                        thereafter.--For calendar year 2025, and each 
                        fifth calendar year thereafter, the 
                        Administrator, in consultation with the 
                        Secretary of Agriculture and the Secretary of 
                        Energy, shall revise the applicable performance 
                        standard to require that each fuel provider 
                        shall additionally reduce, to the maximum 
                        extent practicable, the average lifecycle 
                        greenhouse gas emissions per unit of energy of 
                        the aggregate quantity of transportation fuel 
                        introduced by the fuel provider into commerce 
                        in the United States.
                            ``(iv) Revision of regulations.--In 
                        accordance with the purposes of the Lieberman-
                        Warner Climate Security Act of 2008, the 
                        Administrator may, as appropriate, revise the 
                        regulations promulgated under clause (i) as 
                        necessary to reflect or respond to changes in 
                        the transportation fuel market or other 
                        relevant circumstances.
                            ``(v) Method of calculation.--In 
                        calculating the lifecycle greenhouse gas 
                        emissions of hydrogen or electricity (when used 
                        as a transportation fuel) pursuant to clause 
                        (i)(I), the Administrator shall--
                                    ``(I) include emissions resulting 
                                from the production of the hydrogen or 
                                electricity; and
                                    ``(II) consider to be equivalent to 
                                the energy delivered by 1 gallon of 
                                ethanol the energy delivered by--
                                            ``(aa) 6.4 kilowatt-hours 
                                        of electricity;
                                            ``(bb) 132 standard cubic 
                                        feet of hydrogen; or
                                            ``(cc) 1.25 gallons of 
                                        liquid hydrogen.
                            ``(vi) Best available science.--In carrying 
                        out this paragraph, the Administrator shall use 
                        the best available scientific and technical 
                        information to determine the lifecycle 
                        greenhouse gas emissions of transportation 
                        fuels derived from--
                                    ``(I) planted crops and crop 
                                residue produced and harvested from 
                                agricultural land that--
                                            ``(aa) has been cleared 
                                        and, if the land was previously 
                                        wetland, drained before the 
                                        date of enactment of this 
                                        paragraph, and that is actively 
                                        managed or fallow and 
                                        nonforested; and
                                            ``(bb) is in compliance 
                                        with a conservation plan that 
                                        meets the standards, 
                                        guidelines, and restrictions 
                                        under subtitles B and C of 
                                        chapter 1 of subtitle D of 
                                        title XII of the Food Security 
                                        Act of 1985 (16 U.S.C. 3831 et 
                                        seq.);
                                    ``(II) planted trees and tree 
                                residue from actively-managed tree 
                                plantations on non-Federal land that 
                                has been cleared and, if the land was 
                                previously wetland, drained before the 
                                date of enactment of this paragraph;
                                    ``(III) animal waste material, and 
                                animal byproducts;
                                    ``(IV) slash and pre-commercial 
                                thinnings from non-Federal forestland 
                                other than--
                                            ``(aa) old-growth forest or 
                                        late successional forest; and
                                            ``(bb) ecological 
                                        communities with a global or 
                                        State ranking of critically 
                                        imperiled, imperiled, or rare 
                                        pursuant to a State natural 
                                        heritage program;
                                    ``(V) biomass obtained from the 
                                immediate vicinity of buildings and 
                                other areas regularly occupied by 
                                individuals, or of public 
                                infrastructure, that is at risk from 
                                wildfire;
                                    ``(VI) algae;
                                    ``(VII) separated food waste or 
                                yard waste;
                                    ``(VIII) electricity, including the 
                                entire lifecycle of the fuel;
                                    ``(IX) 1 or more fossil fuels, 
                                including the entire lifecycle of the 
                                fuels; and
                                    ``(X) hydrogen, including the 
                                entire lifecycle of the fuel.
                            ``(vii) Equivalent emissions.--In carrying 
                        out this paragraph, the Administrator shall 
                        consider transportation fuel derived from 
                        cultivated noxious plants, and transportation 
                        fuel derived from biomass sources other than 
                        those sources described in clause (vi), to have 
                        emissions equivalent to the greater of--
                                    ``(I) the lifecycle greenhouse gas 
                                emissions; or
                                    ``(II) the fuel emission baseline.
                    ``(B) Election to participate.--An electricity 
                provider may elect to participate in the program under 
                this section if the electricity provider provides and 
                separately tracks electricity for transportation 
                through a meter that--
                            ``(i) measures the electricity used for 
                        transportation separately from electricity used 
                        for other purposes; and
                            ``(ii) allows for load management and time-
                        of-use rates.
                    ``(C) Credits.--
                            ``(i) In general.--The regulations 
                        promulgated to carry out this paragraph shall 
                        permit fuel providers to receive credits for 
                        achieving, during a calendar year, greater 
                        reductions in lifecycle greenhouse gas 
                        emissions of the fuel provided, blended, or 
                        imported by the fuel provider than are required 
                        under subparagraph (A)(i)(IV).
                            ``(ii) Method of calculation.--The number 
                        of credits received by a fuel provider as 
                        described clause (i) for a calendar year shall 
                        be calculated by multiplying--
                                    ``(I) the aggregate quantity of 
                                fuel produced, distributed, or imported 
                                by the fuel provider in the calendar 
                                year; and
                                    ``(II) the difference between--
                                            ``(aa) the lifecycle 
                                        greenhouse gas emissions of 
                                        that quantity of fuel; and
                                            ``(bb) the maximum 
                                        lifecycle greenhouse gas 
                                        emissions of that quantity of 
                                        fuel permitted for the calendar 
                                        year under subparagraph 
                                        (A)(i)(IV).
                    ``(D) Compliance.--
                            ``(i) In general.--Each fuel provider 
                        subject to this paragraph shall demonstrate 
                        compliance with this paragraph, including, as 
                        necessary, through the use of credits banked or 
                        purchased.
                            ``(ii) No limitation on trading or 
                        banking.--There shall be no limit on the 
                        ability of any fuel provider to trade or bank 
                        credits pursuant to this subparagraph.
                            ``(iii) Use of banked credits.--A fuel 
                        provider may use banked credits under this 
                        subparagraph with no discount or other 
                        adjustment to the credits.
                            ``(iv) Borrowing.--A fuel provider may not 
                        borrow credits from future years for use under 
                        this subparagraph.
                            ``(v) Types of credits.--To encourage 
                        innovation in transportation fuels--
                                    ``(I) only credits created in the 
                                production of transportation fuels may 
                                be used for the purpose of compliance 
                                described in clause (i); and
                                    ``(II) credits created by or in 
                                other sectors, such as manufacturing, 
                                may not be used for that purpose.
                    ``(E) No effect on state authority or more 
                stringent requirements.--Nothing in this subsection--
                            ``(i) affects the authority of a State to 
                        establish, or to maintain in effect, any 
                        transportation fuel performance standard or 
                        other similar standard that is more stringent 
                        than a standard established under this 
                        paragraph; or
                            ``(ii) supercedes or otherwise affects any 
                        more stringent requirement under any other 
                        provision of this Act.''.
    (d) Water Quality Protection.--Section 211(c)(1) of the Clean Air 
Act (42 U.S.C. 7545(c)(1)) is amended--
            (1) by striking ``nonroad vehicle (A) if in the judgment of 
        the Administrator'' and inserting the following: ``nonroad 
        vehicle--
                    ``(A) if, in the judgment of the Administrator, any 
                fuel or fuel additive or'';
            (2) by striking ``, or (B) if'' and inserting the 
        following: ``; or
                    ``(B) if''; and
            (3) in subparagraph (A), by striking ``air pollution 
        which'' and inserting ``air pollution or water pollution 
        (including any degradation in the quality of groundwater) 
        that''.
                                                       Calendar No. 742

110th CONGRESS

  2d Session

                                S. 3036

_______________________________________________________________________

                                 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.

_______________________________________________________________________

                              May 21, 2008

            Read the second time and placed on the calendar`