II 

109TH CONGRESS 

2D SESSION S. 4039 

To amend the Clean Air Act to establish an economy-wide global warming 

pollution emission cap-and-trade program to assist the economy in 

transitioning to new clean energy technologies, to protect employees and 

affected communities, to protect companies and consumers from significant increases in energy costs, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 29, 2006 

Mr. KERRY (for himself and Ms. SNOWE) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To amend the Clean Air Act to establish an economy-wide 

global warming pollution emission cap-and-trade program 

to assist the economy in transitioning to new clean energy technologies, to protect employees and affected communities, to protect companies and consumers from significant increases in energy costs, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Global Warming Reduction Act of 2006’’. 


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

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings. 

TITLE I—COMPREHENSIVE GLOBAL WARMING POLLUTION 

REDUCTIONS 

Sec. 101. Global warming pollution emission reductions. 

Sec. 102. Biofuels infrastructure. 

TITLE II—TAX INCENTIVES FOR ADVANCED TECHNOLOGY 

VEHICLES 

Subtitle A—Providing Consumers With Additional Advanced Technology 

Vehicle Purchase Incentives 

Sec. 201. Expansion and extension of alternative motor vehicle credit. 

Sec. 202. Plug-in hybrid motor vehicle tax credit. 

Subtitle B—Advanced Technology Motor Vehicles Manufacturing Credit 

Sec. 211. Advanced technology motor vehicles manufacturing credit. 

TITLE III—INTERNATIONAL AND CORPORATE OBLIGATIONS 

Sec. 301. International negotiations and trade restrictions. 

Sec. 302. Corporate environmental disclosure of climate change risks. 

TITLE IV—NATIONAL CLIMATE CHANGE VULNERABILITY AND 

RESILIENCE PROGRAM 

Sec. 401. Definitions. 

Sec. 402. National Climate Change Vulnerability and Resilience Program. 

3 SEC. 2. FINDINGS. 

4 Congress finds that— 

5 (1) the United States is a party to the United 

6 Nations Framework Convention on Climate Change, 

7 done at New York on May 9, 1992, which has the 

8 objective of stabilizing global warming pollution con9 centrations in the atmosphere at a level that would 

10 prevent dangerous anthropogenic interference with 

11 the climate system; 


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1 (2) to achieve this objective, the increase in 

2 global mean surface temperature should not exceed 

3 2 degrees Celsius (3.6 degrees Fahrenheit) above 

4 preindustrial temperatures; 

5 (3) the risks associated with a temperature in6 crease above 2 degrees Celsius (3.6 degrees Fahr7 enheit) are grave, including the disintegration of the 

8 Greenland ice sheet, which, if melted completely, 

9 would raise the global average sea level by approxi10 mately 23 feet, devastating many of the coastal 

11 areas and population centers of the world; 

12 (4) the Intergovernmental Panel on Climate 

13 Change projects that, under a range of expected 

14 emissions trends, temperatures will rise between 1.4 

15 degrees Celsius to 5.8 degrees Celsius (2.5 degrees 

16 Fahrenheit to 10.4 degrees Fahrenheit) by the end 

17 of the century; 

18 (5) serious global warming impacts have al19 ready been observed in the United States and world20 wide, including— 

21 (A) increases in heat waves and other ex22 treme weather events; 

23 (B) a rise in sea levels; 

24 (C) a retreat of glaciers and polar ice; 

25 (D) a decline in mountain snowpacks; 


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1 (E) increased drought and wildfires; 

2 (F) stronger hurricanes; 

3 (G) ocean acidification; 

4 (H) extensive coral bleaching; 

5 (I) migrations and shifts in the yearly cy6 cles of plants and animals; and 

7 (J) the spread of infectious diseases; 

8 (6) by 2050, scientists project that, under a 

9 mid-range estimate of global warming, approxi10 mately 25 percent of animal and plant species would 

11 be doomed to extinction; 

12 (7) decisive action is— 

13 (A) needed to minimize the many dangers 

14 posed by global warming; and 

15 (B) critical since global warming pollutants 

16 can persist in the atmosphere for more than a 

17 century; 

18 (8) reductions in emissions from current levels 

19 should begin within a decade of the date of enact20 ment of this Act to preserve the ability to stabilize 

21 atmospheric global warming pollution concentrations 

22 at levels likely to protect against a temperature rise 

23 above 2 degrees Celsius (3.6 degrees Fahrenheit); 

24 (9) while the United States has only 5 percent 

25 of the world population, the United States— 


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1 (A) emits at least 20 percent of the total 

2 global warming pollution emissions of the world; 

3 and 

4 (B) needs to be a leader in addressing 

5 global warming; and 

6 (10) existing energy efficiency and clean, renew7 able energy technologies would reduce global warm8 ing pollution, while— 

9 (A) saving consumers money; 

10 (B) reducing the dependence of the United 

11 States on oil; 

12 (C) enhancing national security; 

13 (D) cleaning the air; and 

14 (E) protecting pristine places from drilling 

15 and mining. 

16 TITLE I—COMPREHENSIVE 

17 GLOBAL WARMING POLLU18 TION REDUCTIONS 

19 SEC. 101. GLOBAL WARMING POLLUTION EMISSION REDUC20 TIONS. 

21 The Clean Air Act (42 U.S.C. 7401 et seq.) is amend22 ed by adding at the end the following: 


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1 ‘‘TITLE VII—COMPREHENSIVE 

2 GLOBAL WARMING POLLU3 TION REDUCTIONS 

‘‘Sec. 701. Definitions. 

‘‘Sec. 702. Global warming pollution emission reductions. 

‘‘Sec. 703. Market-based cap on emissions. 

‘‘Sec. 704. Global warming pollution emission standards for passenger vehicles. 

‘‘Sec. 705. Research and development. 

‘‘Sec. 706. Energy efficiency performance standard. 

‘‘Sec. 707. Renewable portfolio standard. 

‘‘Sec. 708. Standards to account for biological sequestration of carbon. 

‘‘Sec. 709. Global warming pollution reporting. 

‘‘Sec. 710. National Academy of Sciences report. 

‘‘Sec. 711. Additional authority to regulate emissions of global warming pollutants. 

4 ‘‘SEC. 701. DEFINITIONS. 

5 ‘‘In this title: 

6 ‘‘(1) ACADEMY.—The term ‘Academy’ means 

7 the National Academy of Sciences. 

8 ‘‘(2) ALLOWANCE.—The term ‘allowance’ 

9 means an authorization by the Administrator to 

10 emit— 

11 ‘‘(A) 1 metric ton of carbon dioxide; or 

12 ‘‘(B) in the case of a global warming pol13 lutant other than carbon dioxide, a carbon diox14 ide equivalent. 

15 ‘‘(3) CARBON DIOXIDE EQUIVALENT.—The 

16 term ‘carbon dioxide equivalent’ means, for each 

17 global warming pollutant, the quantity of the global 

18 warming pollutant that makes the same contribution 


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1 to global warming as 1 metric ton of carbon dioxide, 

2 as determined by the Administrator. 

3 ‘‘(4) COVERED ENTITY.—The term ‘covered en4 tity’ means any individual or entity subject to the 

5 cap on emissions of global warming pollutants im6 posed under section 703(a)(1), as determined by the 

7 Administrator. 

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

9 buildings, structures, or installations that are— 

10 ‘‘(A) located on 1 or more contiguous or 

11 adjacent properties under common control of 

12 the same persons; and 

13 ‘‘(B) located in the United States. 

14 ‘‘(6) FUND.—The term ‘Fund’ means the Cli15 mate Reinvestment Fund established by section 

16 703(g)(1). 

17 ‘‘(7) GLOBAL WARMING POLLUTANT.—The 

18 term ‘global warming pollutant’ means each of— 

19 ‘‘(A) carbon dioxide; 

20 ‘‘(B) methane; 

21 ‘‘(C) nitrous oxide; 

22 ‘‘(D) hydrofluorocarbons; 

23 ‘‘(E) perfluorocarbons; 

24 ‘‘(F) sulfur hexafluoride; and 


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1 ‘‘(G) any other anthropogenically-emitted 

2 gas that the Administrator, after notice and 

3 comment, determines to contribute to global 

4 warming. 

5 ‘‘(8) GLOBAL WARMING POLLUTION.—The term 

6 ‘global warming pollution’ means any combination of 

7 1 or more global warming pollutants emitted into 

8 the ambient air or atmosphere. 

9 ‘‘(9) PROGRAM.—The term ‘program’ means 

10 the cap-and-trade program established by the Ad11 ministrator under section 703(a). 

12 ‘‘SEC. 702. GLOBAL WARMING POLLUTION EMISSION RE13 DUCTIONS. 

14 ‘‘(a) GOALS.— 

15 ‘‘(1) EMISSION REDUCTION GOAL.—Congress 

16 declares that it shall be the goal of the United 

17 States, acting in concert with other countries that 

18 emit global warming pollutants, to achieve a reduc19 tion in global warming pollutant emissions— 

20 ‘‘(A) to facilitate the achievement of an av21 erage global atmospheric concentration of global 

22 warming pollution that does not exceed 450 

23 parts per million; and 

24 ‘‘(B) beginning not later than calendar 

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1 ing pollution emissions so as to achieve, by not 

2 later than calendar year 2050, a 65-percent re3 duction in global warming pollution emissions 

4 in the United States (as compared to those 

5 global warming pollution emissions for calendar 

6 year 2000). 

7 ‘‘(2) ADDITIONAL GOAL.—In addition to the 

8 emission reduction goal described in paragraph (1), 

9 Congress declares that, in implementing this title, it 

10 shall be the goal of the United States— 

11 ‘‘(A) to maximize public benefits and pro12 mote economic growth; 

13 ‘‘(B) to mitigate the effect of any energy 

14 cost increases to consumers, particularly low-in15 come consumers; 

16 ‘‘(C) to provide equitable transition assist17 ance to any employees and regions affected by 

18 a transition away from the use of high carbon19 emitting energy sources; 

20 ‘‘(D) to encourage research, development, 

21 and commercial deployment of innovative tech22 nologies for avoiding, reducing, or sequestering 

23 emissions of global warming pollutants; 


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1 ‘‘(E) to encourage reduced carbon emis2 sions from, and enhanced sequestration of, car3 bon in the forest and agricultural sectors; 

4 ‘‘(F) to recognize and reward early reduc5 tions of greenhouse gases; and 

6 ‘‘(G) to support activities, including pro7 viding support for State activities, to protect 

8 against and mitigate the impacts of climate 

9 change, including— 

10 ‘‘(i) the depletion of snowpack and 

11 water supplies; 

12 ‘‘(ii) droughts; 

13 ‘‘(iii) wildfires; 

14 ‘‘(iv) enhanced coastal erosion; 

15 ‘‘(v) increases in sea levels; 

16 ‘‘(vi) higher storm surges; 

17 ‘‘(vii) more intense precipitation 

18 events and hurricanes; 

19 ‘‘(viii) the spread of disease; 

20 ‘‘(ix) damage to fish and wildlife habi21 tat; 

22 ‘‘(x) negative commercial effects (such 

23 as damage to the maple syrup and fishing 

24 industries); and 


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1 ‘‘(xi) agricultural and forestry losses 

2 resulting from drought, disease, and insect 

3 infestations. 

4 ‘‘(b) REGULATIONS.— 

5 ‘‘(1) EMISSION REDUCTION TARGETS.—In order 

6 to achieve the goals described in subsection (a), not 

7 later than 2 years after the date of enactment of 

8 this title, the Administrator shall promulgate any 

9 regulations that are necessary to reduce the aggre10 gate net levels of global warming pollution emissions 

11 of the United States, as compared to the aggregate 

12 net level of global warming pollution emissions in the 

13 United States for calendar year 2000— 

14 ‘‘(A) by not less than 1.5 percent for each 

15 of calendar years 2010 through 2019; 

16 ‘‘(B) by not less than 2.5 percent for each 

17 of calendar years 2020 through 2029; and 

18 ‘‘(C) by not less than 3.5 percent for each 

19 of calendar years 2030 through 2050. 

20 ‘‘(2) ADDITIONAL REGULATIONS.—The regula21 tions promulgated under this subsection may in22 clude— 

23 ‘‘(A) requirements to reduce emissions of 

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1 gardless of whether the source or sector is de2 scribed in section 703(b)(1); 

3 ‘‘(B) emissions performance standards; 

4 ‘‘(C) efficiency performance standards; 

5 ‘‘(D) best management practices; 

6 ‘‘(E) technology-based requirements; and 

7 ‘‘(F) such other requirements as the Ad8 ministrator determines to be appropriate. 

9 ‘‘SEC. 703. MARKET-BASED CAP ON EMISSIONS. 

10 ‘‘(a) IN GENERAL.—In carrying out section 702, the 

11 Administrator shall establish a program that— 

12 ‘‘(1) imposes a cap on the emissions of global 

13 warming pollutants from sources and sectors de14 scribed in subsection (b)(1); and 

15 ‘‘(2) allows trading of allowances among cov16 ered entities. 

17 ‘‘(b) SCOPE.—The program established under sub18 section (a) shall— 

19 ‘‘(1) apply the cap required by subsection (a)(1) 

20 to the sources or sectors of the United States econ21 omy with— 

22 ‘‘(A) the greatest global warming pollutant 

23 emissions; 


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1 ‘‘(B) the most cost-effective opportunities 

2 to reduce global warming pollutant emissions; 

3 or 

4 ‘‘(C) other characteristics that the Admin5 istrator determines make the source or sector 

6 appropriate for inclusion in the program; and 

7 ‘‘(2) cover a sufficient proportion of total 

8 United States emissions of global warming pollut9 ants, such that, in combination with other measures 

10 adopted under this title, and under the Global 

11 Warming Reduction Act of 2006 and the amend12 ments made by that Act, the program will ensure, to 

13 the maximum extent practicable, that the aggregate 

14 United States emissions of global warming pollut15 ants will not exceed the emission reduction targets 

16 promulgated pursuant to section 702(b)(1). 

17 ‘‘(c) ALLOWANCES.— 

18 ‘‘(1) ISSUANCE.— 

19 ‘‘(A) IN GENERAL.—The regulations pro20 mulgated under section 702(b) shall provide for 

21 the Administrator to issue, for each calendar 

22 year, a quantity of allowances equal to the ag23 gregate emissions allowed under the cap im24 posed under subsection (a)(1) for the calendar 

25 year. 


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1 ‘‘(B) TREATMENT AS PROPERTY.—An al2 lowance issued under subparagraph (A) shall 

3 not constitute a property right. 

4 ‘‘(C) NO EFFECT ON AUTHORITY.—Noth5 ing in this title or any other provision of law 

6 limits or otherwise affects the authority of the 

7 United States to terminate or limit an allow8 ance issued under subparagraph (A). 

9 ‘‘(2) TRADING.—An allowance issued under this 

10 subsection may be held and traded by any person. 

11 ‘‘(3) FLEXIBILITY.—An allowance issued under 

12 this subsection may be— 

13 ‘‘(A) used for the calendar year in which 

14 the allowance was issued; or 

15 ‘‘(B) banked for use in a calendar year 

16 subsequent to the calendar year of issuance. 

17 ‘‘(d) DISTRIBUTION OF ALLOWANCES.— 

18 ‘‘(1) SUBMISSION OF PLAN BY PRESIDENT.— 

19 ‘‘(A) IN GENERAL.—Not later than 1 year 

20 after the date of enactment of this title, the 

21 President, in consultation with the Adminis22 trator and heads of other appropriate Federal 

23 agencies, shall develop and submit to Congress 

24 a plan— 


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1 ‘‘(i) to distribute the allowances issued 

2 under this section through— 

3 ‘‘(I) auctions; and 

4 ‘‘(II) at the discretion of the 

5 President and subject to subpara6 graph (B)(iii), allocations without 

7 charge to covered entities or entities 

8 that are not covered by the cap im9 posed under subsection (a)(1); 

10 ‘‘(ii) to deposit the proceeds of those 

11 auctions in the Fund; and 

12 ‘‘(iii) to ensure, to the maximum ex13 tent practicable, that those allowances are 

14 distributed, and those proceeds are used, 

15 in a manner consistent with achieving the 

16 goals described in section 702(a). 

17 ‘‘(B) CONTENTS.—The plan submitted 

18 under subparagraph (A) shall— 

19 ‘‘(i) identify each Federal department 

20 or agency responsible for implementing 

21 each action required; 

22 ‘‘(ii) require that allowances be dis23 tributed not later than January 1, 2010, 

24 for calendar year 2010; and 


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1 ‘‘(iii) in no case allow any distribution 

2 of allowances without charge, resulting in 

3 the creation of windfall profits for covered 

4 entities. 

5 ‘‘(2) PLAN IMPLEMENTATION.—If, after the 1- 

6 year period beginning on the date of submission of 

7 the plan under paragraph (1)(A), Congress has not 

8 enacted a law that implements the plan (or an alter9 native to the plan), the Administrator and the head 

10 of each Federal department or agency identified in 

11 paragraph (1)(B)(i) shall implement the actions 

12 identified in the plan. 

13 ‘‘(e) MONITORING.—The Administrator shall ensure, 

14 to the maximum extent practicable, that— 

15 ‘‘(1) the emissions of global warming pollutants 

16 and the use of allowances issued under this section 

17 are accurately tracked, reported, and verified; and 

18 ‘‘(2) the cap-and-trade system established pur19 suant to this section is robust and enforceable. 

20 ‘‘(f) ENFORCEMENT.— 

21 ‘‘(1) IN GENERAL.—In the case of excess emis22 sions of global warming pollutants under this section 

23 by an covered entity during any calendar year, the 

24 regulations promulgated under section 702(b) shall 

25 require the covered entity— 


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1 ‘‘(A) to submit allowances for the emis2 sions during the following calendar year; and 

3 ‘‘(B) to pay a civil penalty in an amount 

4 determined under paragraph (2). 

5 ‘‘(2) AMOUNT OF CIVIL PENALTY.— 

6 ‘‘(A) IN GENERAL.—The amount of a civil 

7 penalty for each quantity of excess emissions of 

8 global warming pollutants constituting 1 carbon 

9 dioxide equivalent shall be an amount equal to 

10 twice the market price for an allowance as of 

11 December 31 of the calendar year in which the 

12 excess emissions occurred. 

13 ‘‘(B) DETERMINATION OF MARKET

14 PRICE.—The Administrator shall, by regulation, 

15 establish a method of determining the market 

16 price of allowances for the purpose of subpara17 graph (A). 

18 ‘‘(3) NO DEMAND REQUIRED.—A civil penalty 

19 under this subsection shall be due and payable to 

20 the Administrator without demand. 

21 ‘‘(4) DEPOSIT AND USE OF AMOUNTS.—A civil 

22 penalty paid to the Administrator under this sub23 section shall be— 

24 ‘‘(A) deposited in the Fund; and 


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1 ‘‘(B) available for use by the President, in 

2 accordance with subsection (g), without further 

3 appropriation. 

4 ‘‘(g) CLIMATE REINVESTMENT FUND.— 

5 ‘‘(1) ESTABLISHMENT.—There is established in 

6 the Treasury of the United States a fund, to be 

7 known as the ‘Climate Reinvestment Fund’, con8 sisting of— 

9 ‘‘(A) amounts collected pursuant to auc10 tions of allowances issued under this section; 

11 ‘‘(B) amounts received as civil penalties 

12 and deposited in the Fund under subsection 

13 (f)(4)(A); and 

14 ‘‘(C) any interest earned on investment of 

15 amounts in the Fund under paragraph (3). 

16 ‘‘(2) EXPENDITURES FROM FUND.—On request 

17 by the President, the Secretary of the Treasury shall 

18 transfer from the Fund to the President such 

19 amounts as the President determines to be necessary 

20 to carry out projects and activities to achieve the 

21 goals described in section 702(a). 

22 ‘‘(3) INVESTMENT OF AMOUNTS.— 

23 ‘‘(A) IN GENERAL.—The Secretary of the 

24 Treasury shall invest such portion of the Fund 

25 as is not, in the judgment of the Secretary of 


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1 the Treasury, required to meet current with2 drawals. 

3 ‘‘(B) INTEREST-BEARING OBLIGATIONS.— 

4 Investments may be made only in interest-bear5 ing obligations of the United States. 

6 ‘‘(C) ACQUISITION OF OBLIGATIONS.—For 

7 the purpose of investments under subparagraph 

8 (A), obligations may be acquired— 

9 ‘‘(i) on original issue at the issue 

10 price; or 

11 ‘‘(ii) by purchase of outstanding obli12 gations at the market price. 

13 ‘‘(D) SALE OF OBLIGATIONS.—Any obliga14 tion acquired by the Fund may be sold by the 

15 Secretary of the Treasury at the market price. 

16 ‘‘(E) CREDITS TO FUND.—The interest on, 

17 and the proceeds from the sale or redemption 

18 of, any obligations held in the Fund shall be 

19 credited to, and form a part of, the Fund. 

20 ‘‘(4) FUNDING.—For each fiscal year, there are 

21 appropriated to the Fund, to remain available until 

22 expended, an amount equal to the sum of, with re23 spect to the preceding fiscal year— 


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1 ‘‘(A) amounts collected pursuant to auc2 tions of allowances issued under this section; 

3 and 

4 ‘‘(B) the amount of civil penalties depos5 ited in the Fund under subsection (f)(4)(A). 

6 ‘‘SEC. 704. GLOBAL WARMING POLLUTION EMISSION 

7 STANDARDS FOR PASSENGER VEHICLES. 

8 ‘‘(a) DEFINITION OF PASSENGER VEHICLE.—In this 

9 section, the term ‘passenger vehicle’ means— 

10 ‘‘(1) a passenger automobile (as that term is 

11 defined in section 32901 of title 49, United States 

12 Code); 

13 ‘‘(2) a light truck; and 

14 ‘‘(3) any other vehicle that the Administrator 

15 determines is a vehicle the primary use of which is 

16 noncommercial personal transportation. 

17 ‘‘(b) STANDARDS.— 

18 ‘‘(1) IN GENERAL.—In carrying out section 

19 702(b), the Administrator shall promulgate regula20 tions that establish standards for global warming 

21 pollution emissions from passenger vehicles. 

22 ‘‘(2) REQUIREMENTS.—The standards estab23 lished under paragraph (1) shall provide for the re24 duction of global warming pollution emissions from 

25 passenger vehicles, on an average-vehicle basis, at a 


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1 rate and in quantities that are equal to or greater 

2 than the rate and quantity reductions in those emis3 sions achieved under standards adopted by the Cali4 fornia Air Resources Board at the September 23–24, 

5 2004 hearing of that Board (California Code of Reg6 ulations, title 13, sec. 1961.1). 

7 ‘‘(3) REVISIONS.—Not later than January 1, 

8 2014, and every 5 years thereafter, the Adminis9 trator shall promulgate regulations revising the 

10 standards described in paragraph (1) to further re11 duce global warming pollution emissions from pas12 senger vehicles, taking into account— 

13 ‘‘(A) the reductions necessary to achieve 

14 the emission reduction targets promulgated 

15 pursuant to section 702(b)(1); and 

16 ‘‘(B) the technological feasibility of further 

17 reducing those emissions. 

18 ‘‘SEC. 705. RESEARCH AND DEVELOPMENT. 

19 ‘‘(a) IN GENERAL.—The Administrator shall carry 

20 out a program to perform and support research on global 

21 climate change standards and processes, with the goals of 

22 providing scientific and technical knowledge applicable to 

23 the reduction of global warming pollutants. 

24 ‘‘(b) RESEARCH PROGRAM.— 


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1 ‘‘(1) IN GENERAL.—The Administrator shall 

2 carry out, directly or through the use of contracts or 

3 grants, a global climate change standards and proc4 esses research program. 

5 ‘‘(2) RESEARCH.— 

6 ‘‘(A) CONTENTS AND PRIORITIES.—The 

7 specific contents and priorities of the research 

8 program shall be determined in consultation 

9 with appropriate Federal agencies, including— 

10 ‘‘(i) the National Oceanic and Atmos11 pheric Administration; 

12 ‘‘(ii) the National Aeronautics and 

13 Space Administration; and 

14 ‘‘(iii) the Department of Energy. 

15 ‘‘(B) TYPES OF RESEARCH.—The research 

16 program shall include the conduct of basic and 

17 applied research— 

18 ‘‘(i) to develop and provide the en19 hanced measurements, calibrations, data, 

20 models, and reference material standards 

21 necessary to enable the monitoring of glob22 al warming pollution; 

23 ‘‘(ii) to assist in establishing a base24 line reference point for future trading in 

25 global warming pollutants (including the 


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1 measurement of progress in emission re2 ductions); 

3 ‘‘(iii) for international exchange as 

4 scientific or technical information for the 

5 stated purpose of developing mutually-rec6 ognized measurements, standards, and pro7 cedures for reducing global warming pollu8 tion; and 

9 ‘‘(iv) to assist in developing improved 

10 industrial processes designed to reduce or 

11 eliminate global warming pollution. 

12 ‘‘(3) ABRUPT CLIMATE CHANGE RESEARCH.— 

13 ‘‘(A) DEFINITION OF ABRUPT CLIMATE

14 CHANGE.—In this paragraph, the term ‘abrupt 

15 climate change’ means a change in climate that 

16 occurs so rapidly or unexpectedly that humans 

17 or natural systems may have difficulty adapting 

18 to the change. 

19 ‘‘(B) RESEARCH.—The Administrator shall 

20 carry out a program of scientific research on 

21 potential abrupt climate change that is de22 signed— 

23 ‘‘(i) to develop a global array of ter24 restrial and oceanographic indicators of 

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1 scribe past instances of abrupt climate 

2 change; 

3 ‘‘(ii) to improve understanding of 

4 thresholds and nonlinearities in geophysical 

5 systems relating to the mechanisms of ab6 rupt climate change; 

7 ‘‘(iii) to incorporate those mechanisms 

8 into advanced geophysical models of cli9 mate change; and 

10 ‘‘(iv) to test the output of those mod11 els against an improved global array of 

12 records of past abrupt climate changes. 

13 ‘‘(c) SENSE OF THE SENATE.—It is the sense of the 

14 Senate that Federal funds for clean, low-carbon energy re15 search, development, and deployment should be increased 

16 by at least 100 percent for each year during the 10-year 

17 period beginning on the date of enactment of this title. 

18 ‘‘SEC. 706. ENERGY EFFICIENCY PERFORMANCE STAND19 ARD. 

20 ‘‘(a) DEFINITIONS.—In this section: 

21 ‘‘(1) ELECTRICITY SAVINGS.— 

22 ‘‘(A) IN GENERAL.—The term ‘electricity 

23 savings’ means reductions in end-use electricity 

24 consumption relative to consumption by the 

25 same customer or at the same new or existing 


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1 facility in a given year, as defined in regula2 tions promulgated by the Administrator under 

3 subsection (e). 

4 ‘‘(B) INCLUSIONS.—The term ‘savings’ in5 cludes savings achieved as a result of— 

6 ‘‘(i) installation of energy-saving tech7 nologies and devices; and 

8 ‘‘(ii) the use of combined heat and 

9 power systems, fuel cells, or any other 

10 technology identified by the Administrator 

11 that recaptures or generates energy solely 

12 for onsite customer use. 

13 ‘‘(C) EXCLUSION.—The term ‘savings’ 

14 does not include savings from measures that 

15 would likely be adopted in the absence of en16 ergy-efficiency programs, as determined by the 

17 Administrator. 

18 ‘‘(2) RETAIL ELECTRICITY SALES.—The term 

19 ‘retail electricity sales’ means the total quantity of 

20 electric energy sold by a retail electricity supplier to 

21 retail customers during the most recent calendar 

22 year for which that information is available. 

23 ‘‘(3) RETAIL ELECTRICITY SUPPLIER.—The 

24 term ‘retail electricity supplier’ means a distribution 


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1 or integrated utility, or an independent company or 

2 entity, that sells electric energy to consumers. 

3 ‘‘(b) ENERGY EFFICIENCY PERFORMANCE STAND4 ARD.—Each retail electricity supplier shall implement pro5 grams and measures to achieve improvements in energy 

6 efficiency and peak load reduction, as verified by the Ad7 ministrator. 

8 ‘‘(c) TARGETS.—For calendar year 2008 and each 

9 calendar year thereafter, the Administrator shall ensure, 

10 to the maximum extent practicable, that retail electric 

11 suppliers annually achieve electricity savings and reduce 

12 peak power demand and electricity use by retail customers 

13 by a percentage that is not less than the applicable target 

14 percentage specified in the following table: 

Calendar Year Reduction in peak demand 

Reduction in electricity 

use 

2008 ................................ .25 percent ..................... .25 percent 

2009 ................................ .75 percent ..................... .75 percent 

2010 ................................ 1.75 percent ................... 1.5 percent 

2011 ................................ 2.75 percent ................... 2.25 percent 

2012 ................................ 3.75 percent ................... 3.0 percent 

2013 ................................ 4.75 percent ................... 3.75 percent 

2014 ................................ 5.75 percent ................... 4.5 percent 

2015 ................................ 6.75 percent ................... 5.25 percent 

2016 ................................ 7.75 percent ................... 6.0 percent 

2017 ................................ 8.75 percent ................... 6.75 percent 

2018 ................................ 9.75 percent ................... 7.5 percent 

2019 ................................ 10.75 percent ................. 8.25 percent 

2020 and each calendar 

year thereafter.

11.75 percent ................. 9.0 percent 

15 ‘‘(d) BEGINNING DATE.—For the purpose of meeting 

16 the targets established under subsection (c), electricity 

17 savings shall be calculated based on the sum of— 


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1 ‘‘(1) savings realized as a result of actions 

2 taken by the retail electric supplier during the speci3 fied calendar year; and 

4 ‘‘(2) cumulative savings realized as a result of 

5 electricity savings achieved in all previous calendar 

6 years (beginning with calendar year 2006). 

7 ‘‘(e) IMPLEMENTING REGULATIONS.— 

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

9 the date of enactment of this title, the Administrator 

10 shall promulgate regulations to implement the tar11 gets established under subsection (c). 

12 ‘‘(2) REQUIREMENTS.—The regulations shall 

13 establish— 

14 ‘‘(A) a national credit system permitting 

15 credits to be awarded, bought, sold, or traded 

16 by and among retail electricity suppliers; 

17 ‘‘(B) a fee equivalent to not less than 4 

18 cents per kilowatt hour for retail energy sup19 pliers that do not meet the targets established 

20 under subsection (c); and 

21 ‘‘(C) standards for monitoring and 

22 verification of electricity use and demand sav23 ings reported by the retail electricity suppliers. 

24 ‘‘(3) CONSIDERATION OF TRANSMISSION AND

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1 tions under this subsection, the Administrator shall 

2 consider whether savings, in whole or part, achieved 

3 by retail electricity suppliers by improving the effi4 ciency of electric distribution and use should be eligi5 ble for credits established under this section. 

6 ‘‘(f) COMPLIANCE WITH STATE LAW.—Nothing in 

7 this section shall supersede or otherwise affect any State 

8 or local law requiring or otherwise relating to reductions 

9 in total annual electricity consumption, or peak power con10 sumption, by electric consumers to the extent that the 

11 State or local law requires more stringent reductions than 

12 those required under this section. 

13 ‘‘(g) VOLUNTARY PARTICIPATION.—The Adminis14 trator may— 

15 ‘‘(1) pursuant to the regulations promulgated 

16 under subsection (e)(1), issue a credit to any entity 

17 that is not a retail electric supplier if the entity im18 plements electricity savings; and 

19 ‘‘(2) in a case in which an entity described in 

20 paragraph (1) is a nonprofit or educational organi21 zation, provide to the entity 1 or more grants in lieu 

22 of a credit. 

23 ‘‘SEC. 707. RENEWABLE PORTFOLIO STANDARD. 

24 ‘‘(a) RENEWABLE ENERGY.— 


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1 ‘‘(1) IN GENERAL.—The Administrator, in con2 sultation with the Secretary of Energy, shall promul3 gate regulations defining the types and sources of 

4 renewable energy generation that may be carried out 

5 in accordance with this section. 

6 ‘‘(2) INCLUSIONS.—In promulgating regulations 

7 under paragraph (1), the Administrator shall include 

8 of all types of renewable energy (as defined in sec9 tion 203(b) of the Energy Policy Act of 2005 (42 

10 U.S.C. 15852(b))) other than energy generated 

11 from— 

12 ‘‘(A) municipal solid waste; 

13 ‘‘(B) wood contaminated with plastics or 

14 metals; or 

15 ‘‘(C) tires. 

16 ‘‘(b) RENEWABLE ENERGY REQUIREMENT.—Of the 

17 base quantity of electricity sold by each retail electric sup18 plier to electric consumers during a calendar year, the 

19 quantity generated by renewable energy sources shall be 

20 not less than the following percentages: 

Minimum annual 

‘‘Calendar year: percentage: 

2008 through 2009 .................................................................. 5

2010 through 2014 .................................................................. 10

2015 through 2019 .................................................................. 15

2020 and subsequent years ...................................................... 20.


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1 ‘‘(c) RENEWABLE ENERGY CREDIT PROGRAM.—Not 

2 later than 1 year after the date of enactment of this title, 

3 the Administrator shall establish— 

4 ‘‘(1) a program to issue, establish the value of, 

5 monitor the sale or exchange of, and track renewable 

6 energy credits; and 

7 ‘‘(2) penalties for any retail electric supplier 

8 that does not comply with this section. 

9 ‘‘(d) PROHIBITION ON DOUBLE COUNTING.—A re10 newable energy credit issued under subsection (c)— 

11 ‘‘(1) may be counted toward meeting the re12 quirements of subsection (b) only once; and 

13 ‘‘(2) shall vest with the owner of the system or 

14 facility that generates the renewable energy that is 

15 covered by the renewable energy credit, unless the 

16 owner explicitly transfers the renewable energy cred17 it. 

18 ‘‘(e) SALE UNDER PURPA CONTRACT.—If the Ad19 ministrator, after consultation with the Secretary of En20 ergy, determines that a renewable energy generator is sell21 ing electricity to comply with this section to a retail elec22 tric supplier under a contract subject to section 210 of 

23 the Public Utilities Regulatory Policies Act of 1978 (16 

24 U.S.C. 824a–3), the retail electric supplier shall be treated 


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1 as the generator of the electric energy for the purposes 

2 of this title for the duration of the contract. 

3 ‘‘(f) STATE PROGRAMS.—Nothing in this section pre4 cludes any State from requiring additional renewable en5 ergy generation under any State renewable energy pro6 gram. 

7 ‘‘(g) VOLUNTARY PARTICIPATION.—The Adminis8 trator may issue a renewable energy credit pursuant to 

9 subsection (c) to any entity that is not subject to this sec10 tion only if the entity applying for the renewable energy 

11 credit meets the terms and conditions of this section to 

12 the same extent as retail electric suppliers subject to this 

13 section. 

14 ‘‘SEC. 708. STANDARDS TO ACCOUNT FOR BIOLOGICAL SE15 QUESTRATION OF CARBON. 

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

17 date of enactment of title, the Secretary of Agriculture, 

18 with the concurrence of the Administrator, shall establish 

19 standards for accrediting certified reductions in the emis20 sion of carbon dioxide through above-ground and below21 ground biological sequestration activities. 

22 ‘‘(b) REQUIREMENTS.—The standards shall in23 clude— 

24 ‘‘(1) a national biological carbon storage base25 line or inventory; and 


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1 ‘‘(2) measurement, monitoring, and verification 

2 guidelines based on— 

3 ‘‘(A) measurement of increases in carbon 

4 storage in excess of the carbon storage that 

5 would have occurred in the absence of a new 

6 management practice designed to achieve bio7 logical sequestration of carbon; 

8 ‘‘(B) comprehensive carbon accounting 

9 that— 

10 ‘‘(i) reflects sustained net increases in 

11 carbon reservoirs; and 

12 ‘‘(ii) takes into account any carbon 

13 emissions resulting from disturbance of 

14 carbon reservoirs in existence as of the 

15 date of commencement of any new man16 agement practice designed to achieve bio17 logical sequestration of carbon; 

18 ‘‘(C) adjustments to account for— 

19 ‘‘(i) emissions of carbon that may re20 sult at other locations as a result of the 

21 impact of the new biological sequestration 

22 management practice on timber supplies; 

23 or 

24 ‘‘(ii) potential displacement of carbon 

25 emissions to other land owned by the entiVerDate Aug 31 2005 01:45 Oct 06, 2006 Jkt 059200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S4039.IS S4039

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1 ty that carries out the new biological se2 questration management practice; and 

3 ‘‘(D) adjustments to reflect the expected 

4 carbon storage over various time periods, taking 

5 into account the likely duration of the storage 

6 of carbon in a biological reservoir. 

7 ‘‘(c) UPDATING OF STANDARDS.—Not later than 3 

8 years after the date of establishment of the standards 

9 under subsection (a), and every 3 years thereafter, the 

10 Secretary of Agriculture shall update the standards to 

11 take into account the most recent scientific information. 

12 ‘‘SEC. 709. GLOBAL WARMING POLLUTION REPORTING. 

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

14 date of enactment of this title, and annually thereafter, 

15 any entity considered to be a major stationary source (as 

16 defined in section 169A(g)) shall submit to the Adminis17 trator a report describing the emissions of global warming 

18 pollutants from the entity for the preceding calendar year. 

19 ‘‘(b) VOLUNTARY REPORTING.—An entity that is not 

20 described in subsection (a) may voluntarily report the 

21 emissions of global warming pollutants from the entity to 

22 the Administrator. 

23 ‘‘(c) REQUIREMENTS FOR REPORTS.— 

24 ‘‘(1) EXPRESSION OF MEASUREMENTS.—Each 

25 global warming pollution report submitted under this 


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1 section shall express global warming pollution emis2 sions in— 

3 ‘‘(A) metric tons of each global warming 

4 pollutant; and 

5 ‘‘(B) metric tons of the carbon dioxide 

6 equivalent of each global warming pollutant. 

7 ‘‘(2) ELECTRONIC FORMAT.—The information 

8 contained in a report submitted under this section 

9 shall be reported electronically to the Administrator 

10 in such form and to such extent as may be required 

11 by the Administrator. 

12 ‘‘(3) DE MINIMIS EXEMPTION.—The Adminis13 trator may specify the level of global warming pollu14 tion emissions from a source within a facility that 

15 shall be considered to be a de minimis exemption 

16 from the requirement to comply with this section. 

17 ‘‘(d) PUBLIC AVAILABILITY OF INFORMATION.—Not 

18 later than March 1 of the year after which the Adminis19 trator receives a report under this subsection from an enti20 ty, and annually thereafter, the Administrator shall make 

21 the information reported under this section available to 

22 the public through the Internet. 

23 ‘‘(e) PROTOCOLS AND METHODS.—The Adminis24 trator shall, by regulation, establish protocols and methods 

25 to ensure completeness, consistency, transparency, and acVerDate Aug 31 2005 01:45 Oct 06, 2006 Jkt 059200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\S4039.IS S4039

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1 curacy of data on global warming pollution emissions sub2 mitted under this section. 

3 ‘‘(f) ENFORCEMENT.—Regulations promulgated 

4 under this section may be enforced pursuant to section 

5 113 with respect to any person that— 

6 ‘‘(1) fails to submit a report under this section; 

7 or 

8 ‘‘(2) otherwise fails to comply with those regu9 lations. 

10 ‘‘SEC. 710. NATIONAL ACADEMY OF SCIENCES REPORT. 

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

12 date of enactment of this title, and every 2 years there13 after, the Academy, acting in coordination with the Na14 tional Research Council, shall submit to the Administrator 

15 and Congress a report that assesses— 

16 ‘‘(1) the probability of avoiding dangerous an17 thropogenic interference with the climate system; 

18 and 

19 ‘‘(2) the progress made by the United States as 

20 of the date of the report to avoid that interference. 

21 ‘‘(b) CONTENTS.—A report submitted under sub22 section (a) shall— 

23 ‘‘(1) evaluate whether the emission reduction 

24 targets promulgated pursuant to section 702(b)(1) 

25 are, after taking into account the actions of the 


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1 international community, likely to be sufficient to 

2 avoid dangerous climate change; 

3 ‘‘(2) include an assessment of the occurrence, 

4 or probability of occurrence, of— 

5 ‘‘(A) a concentration of atmospheric global 

6 warming pollution of greater than 450 carbon 

7 dioxide equivalent parts per million; 

8 ‘‘(B) a global mean surface temperature 

9 increase of greater than 2 degrees Celsius (3.6 

10 degrees Fahrenheit) from preindustrial levels; 

11 ‘‘(C) a substantial slowing of the Atlantic 

12 thermohaline circulation; 

13 ‘‘(D) a sea level rise of more than 8 inches; 

14 ‘‘(E) an ice-free Arctic Ocean in the sum15 mer; 

16 ‘‘(F) a decrease in the area of permafrost 

17 to a level less than 50 percent of the area of 

18 permafrost in existence in 2000; 

19 ‘‘(G) a loss of more than 40 percent of the 

20 coverage of coral reefs in the world because of 

21 increased ocean temperature or acidity; and 

22 ‘‘(H) any other indicator of significant 

23 global warming, as determined by the Academy; 

24 ‘‘(3) if the Academy concludes that the emission 

25 reduction targets promulgated pursuant to section 


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1 702(b)(1) are not likely to be sufficient to avoid 

2 dangerous climate change, or that any event speci3 fied in paragraph (2) has occurred or is likely to 

4 occur— 

5 ‘‘(A) identify the necessary level of further 

6 reductions in atmospheric global warming pollu7 tion concentrations; and 

8 ‘‘(B) recommend additional actions by the 

9 United States and the international community 

10 to further reduce atmospheric concentrations of 

11 global warming pollution; and 

12 ‘‘(4) if the Academy concludes that an emission 

13 reduction target described in section 702(b)(1) can14 not be achieved due to technological infeasibility, in15 clude a notification of that determination. 

16 ‘‘SEC. 711. ADDITIONAL AUTHORITY TO REGULATE EMIS17 SIONS OF GLOBAL WARMING POLLUTANTS. 

18 ‘‘The authority of the Administrator under this title 

19 shall be in addition to the authority of the Administrator 

20 to regulate emissions of global warming pollutants pursu21 ant to any other provision of law in effect as of the date 

22 of enactment of this title.’’. 

23 SEC. 102. BIOFUELS INFRASTRUCTURE. 

24 (a) RENEWABLE FUEL PROGRAM.—Section 

25 211(o)(2) of the Clean Air Act (42 U.S.C. 7545(o)(2)) is 


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1 amended by striking subparagraph (B) and inserting the 

2 following: 

3 ‘‘(B) APPLICABLE VOLUME.— 

4 ‘‘(i) IN GENERAL.—For the purpose 

5 of subparagraph (A), the applicable volume 

6 for calendar year 2010 and each calendar 

7 year thereafter shall be determined, by 

8 rule, by the Administrator, in consultation 

9 with the Secretary of Agriculture and the 

10 Secretary of Energy, in a manner that en11 sures, to the maximum extent practicable, 

12 that— 

13 ‘‘(I) the requirements described 

14 in clause (ii) for specified calendar 

15 years are met; and 

16 ‘‘(II) the applicable volume for 

17 each calendar year not specified in 

18 clause (ii) is determined on an annual 

19 basis. 

20 ‘‘(ii) REQUIREMENTS.—The require21 ments referred to in clause (i) are— 

22 ‘‘(I) for calendar year 2010, at 

23 least 10,000,000,000 gallons of re24 newable fuel; 


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1 ‘‘(II) for calendar year 2020, at 

2 least 30,000,000,000 gallons of re3 newable fuel; and 

4 ‘‘(III) for calendar year 2030, at 

5 least 60,000,000,000 gallons of re6 newable fuel.’’. 

7 (b) INSTALLATION OF E–85 FUEL PUMPS BY MAJOR

8 OIL COMPANIES AT OWNED STATIONS AND BRANDED

9 STATIONS.—Section 211(o) of the Clean Air Act (42 

10 U.S.C. 7545(o)) is amended by adding at the end the fol11 lowing: 

12 ‘‘(11) INSTALLATION OF E–85 FUEL PUMPS BY

13 MAJOR OIL COMPANIES AT OWNED STATIONS AND

14 BRANDED STATIONS.— 

15 ‘‘(A) DEFINITIONS.—In this paragraph: 

16 ‘‘(i) E–85 FUEL.—The term ‘E–85 

17 fuel’ means a blend of gasoline approxi18 mately 85 percent of the content of which 

19 is derived from ethanol produced in the 

20 United States. 

21 ‘‘(ii) MAJOR OIL COMPANY.—The 

22 term ‘major oil company’ means any per23 son that, individually or together with any 

24 other person with respect to which the per25 son has an affiliate relationship or signifiVerDate Aug 31 2005 01:45 Oct 06, 2006 Jkt 059200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\S4039.IS S4039

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1 cant ownership interest, has not less than 

2 4,500 retail station outlets according to 

3 the latest publication of the Petroleum 

4 News Annual Factbook. 

5 ‘‘(iii) SECRETARY.—The term ‘Sec6 retary’ means the Secretary of Energy, 

7 acting in consultation with the Adminis8 trator and the Secretary of Agriculture. 

9 ‘‘(B) REGULATIONS.—The Secretary shall 

10 promulgate regulations to ensure, to the max11 imum extent practicable, that each major oil 

12 company that sells or introduces gasoline into 

13 commerce in the United States through wholly14 owned stations or branded stations installs or 

15 otherwise makes available 1 or more pumps 

16 that dispense E–85 fuel (including any other 

17 equipment necessary, such as including tanks, 

18 to ensure that the pumps function properly) at 

19 not less than the applicable percentage of the 

20 wholly-owned stations and the branded stations 

21 of the major oil company specified in subpara22 graph (C). 

23 ‘‘(C) APPLICABLE PERCENTAGE.—For the 

24 purpose of subparagraph (B), the applicable 

25 percentage of the wholly-owned stations and the 


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1 branded stations shall be determined in accord2 ance with the following table: 

Applicable percentage of 

wholly-owned stations and 

branded stations 

‘‘Calendar year: (percent): 

2007 ......................................................................................... 5

2008 ......................................................................................... 10

2009 ......................................................................................... 15

2010 ......................................................................................... 20

2011 ......................................................................................... 25

2012 ......................................................................................... 30

2013 ......................................................................................... 35

2014 ......................................................................................... 40

2015 ......................................................................................... 45

2016 and each calendar year thereafter .................................. 50. 

3 ‘‘(D) GEOGRAPHIC DISTRIBUTION.— 

4 ‘‘(i) IN GENERAL.—Subject to clause 

5 (ii), in promulgating regulations under 

6 subparagraph (B), the Secretary shall en7 sure that each major oil company described 

8 in subparagraph (B) installs or otherwise 

9 makes available 1 or more pumps that dis10 pense E–85 fuel at not less than a min11 imum percentage (specified in the regula12 tions) of the wholly-owned stations and the 

13 branded stations of the major oil company 

14 in each State. 

15 ‘‘(ii) REQUIREMENT.—In specifying 

16 the minimum percentage under clause (i), 

17 the Secretary shall ensure that each major 

18 oil company installs or otherwise makes 

19 available 1 or more pumps described in 


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1 that clause in each State in which the 

2 major oil company operates. 

3 ‘‘(E) FINANCIAL RESPONSIBILITY.—In 

4 promulgating regulations under subparagraph 

5 (B), the Secretary shall ensure that each major 

6 oil company described in that subparagraph as7 sumes full financial responsibility for the costs 

8 of installing or otherwise making available the 

9 pumps described in that subparagraph and any 

10 other equipment necessary (including tanks) to 

11 ensure that the pumps function properly. 

12 ‘‘(F) PRODUCTION CREDITS FOR EXCEED13 ING E–85 FUEL PUMPS INSTALLATION REQUIRE14 MENT.— 

15 ‘‘(i) EARNING AND PERIOD FOR AP16 PLYING CREDITS.—If the percentage of the 

17 wholly-owned stations and the branded sta18 tions of a major oil company at which the 

19 major oil company installs E–85 fuel 

20 pumps in a particular calendar year ex21 ceeds the percentage required under sub22 paragraph (C), the major oil company 

23 earns credits under this paragraph, which 

24 may be applied to any of the 3 consecutive 

25 calendar years immediately after the calVerDate Aug 31 2005 01:45 Oct 06, 2006 Jkt 059200 PO 00000 Frm 00042 Fmt 6652 Sfmt 6201 E:\BILLS\S4039.IS S4039

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1 endar year for which the credits are 

2 earned. 

3 ‘‘(ii) TRADING CREDITS.—Subject to 

4 clause (iii), a major oil company that has 

5 earned credits under clause (i) may sell 

6 credits to another major oil company to en7 able the purchaser to meet the requirement 

8 under subparagraph (C). 

9 ‘‘(iii) EXCEPTION.—A major oil com10 pany may not use credits purchased under 

11 clause (ii) to fulfill the geographic distribu12 tion requirement in subparagraph (D).’’. 

13 TITLE II—TAX INCENTIVES FOR 

14 ADVANCED TECHNOLOGY VE15 HICLES 

16 Subtitle A—Providing Consumers 

17 With Additional Advanced Tech18 nology Vehicle Purchase Incen19 tives 

20 SEC. 201. EXPANSION AND EXTENSION OF ALTERNATIVE 

21 MOTOR VEHICLE CREDIT. 

22 (a) INCREASES IN CREDIT.— 

23 (1) NEW QUALIFIED FUEL CELL MOTOR VEHI24 CLE.—Subsection (b) of section 30B of the Internal 


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1 Revenue Code of 1986 (relating to new qualified fuel 

2 cell motor vehicle credit) is amended— 

3 (A) in paragraph (1)— 

4 (i) by striking ‘‘$8,000 ($4,000’’ in 

5 subparagraph (A) and inserting ‘‘$16,000 

6 ($8,000’’; 

7 (ii) by striking ‘‘$10,000’’ in subpara8 graph (B) and inserting ‘‘$20,000’’; 

9 (iii) by striking ‘‘$20,000’’ in sub10 paragraph (C) and inserting ‘‘$40,000’’; 

11 and 

12 (iv) by striking ‘‘$40,000’’ in subpara13 graph (D) and inserting ‘‘$80,000’’; and 

14 (B) in paragraph (2)(A)— 

15 (i) by striking ‘‘$1,000’’ in clause (i) 

16 and inserting ‘‘$2,000’’; 

17 (ii) by striking ‘‘$1,500’’ in clause (ii) 

18 and inserting ‘‘$3,000’’; 

19 (iii) by striking ‘‘$2,000’’ in clause 

20 (iii) and inserting ‘‘$4,000’’; 

21 (iv) by striking ‘‘$2,500’’ in clause 

22 (iv) and inserting ‘‘$5,000’’; 

23 (v) by striking ‘‘$3,000’’ in clause (v) 

24 and inserting ‘‘$6,000’’; 


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1 (vi) by striking ‘‘$3,500’’ in clause 

2 (vi) and inserting ‘‘$7,000’’; and 

3 (vii) by striking ‘‘$4,000’’ in clause 

4 (vii) and inserting ‘‘$8,000’’. 

5 (2) NEW ADVANCED LEAN BURN TECHNOLOGY

6 MOTOR VEHICLE.— 

7 (A) FUEL ECONOMY.—The table in clause 

8 (i) of section 30B(c)(2)(A) of such Code (relat9 ing to fuel economy) is amended— 

10 (i) by striking ‘‘$400’’ and inserting 

11 ‘‘$800’’; 

12 (ii) by striking ‘‘$800’’ and inserting 

13 ‘‘$1,600’’; 

14 (iii) by striking ‘‘$1,200’’ and insert15 ing ‘‘$2,400’’; 

16 (iv) by striking ‘‘$1,600’’ and insert17 ing ‘‘$3,200’’; 

18 (v) by striking ‘‘$2,000’’ and inserting 

19 ‘‘$4,000’’; and 

20 (vi) by striking ‘‘$2,400’’ and insert21 ing ‘‘$4,800’’. 

22 (B) CONSERVATION.—The table in sub23 paragraph (B) of section 30B(c)(2) of such 

24 Code (relating to conservation credit) is amend25 ed— 


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1 (i) by striking ‘‘$250’’ and inserting 

2 ‘‘$500’’; 

3 (ii) by striking ‘‘$500’’ and inserting 

4 ‘‘$1,000’’; 

5 (iii) by striking ‘‘$750’’ and inserting 

6 ‘‘$1,500’’; and 

7 (iv) by striking ‘‘$1,000’’ and insert8 ing ‘‘$2,000’’. 

9 (b) EXPANSION OF NUMBER OF NEW QUALIFIED

10 HYBRID AND ADVANCED LEAN BURN TECHNOLOGY VE11 HICLES ELIGIBLE FOR CREDIT.—Paragraph (2) of section 

12 30B(f) of the Internal Revenue Code of 1986 (relating to 

13 phaseout) is amended— 

14 (1) by striking ‘‘the period’’ and inserting ‘‘any 

15 period’’, 

16 (2) by striking ‘‘United States after December 

17 31, 2005, is at least 60,000’’ and inserting ‘‘United 

18 States is— 

19 ‘‘(A) after December 31, 2005, at least 

20 60,000, and 

21 ‘‘(B) after December 31, 2008, and before 

22 January 1, 2013, 60,000.’’, and 

23 (3) by adding at the end the following new sen24 tence: ‘‘For purposes of the preceding sentence, the 

25 Secretary may extend the time period through 2014 


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1 if the Secretary determines that market conditions 

2 merit such action.’’. 

3 (c) EXTENSION.—Section 30B(j) of the Internal Rev4 enue Code of 1986 (relating to termination) is amended— 

5 (1) by striking ‘‘December 31, 2010’’ both 

6 places it appears and inserting ‘‘December 31, 

7 2014’’, and 

8 (2) by striking ‘‘December 31, 2009’’ in para9 graph (3) and inserting ‘‘December 31, 2014’’. 

10 (d) EFFECTIVE DATE.—The amendments made by 

11 this section shall take effect as if included in the amend12 ments made by section 1341(a) of the Energy Policy Act 

13 of 2005. 

14 SEC. 202. PLUG-IN HYBRID MOTOR VEHICLE TAX CREDIT. 

15 (a) IN GENERAL.—Section 30B of the Internal Rev16 enue Code of 1986 is amended by redesignating sub17 sections (i) and (j) as subsections (j) and (k), respectively, 

18 and by inserting after subsection (h) the following new 

19 subsection: 

20 ‘‘(i) NEW PLUG-IN HYBRID MOTOR VEHICLE CRED21 IT.— 

22 ‘‘(1) IN GENERAL.—For purposes of subsection 

23 (a), the new plug-in hybrid motor vehicle credit de24 termined under this subsection with respect to a new 

25 qualified plug-in hybrid motor vehicle or new qualiVerDate Aug 31 2005 01:45 Oct 06, 2006 Jkt 059200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 E:\BILLS\S4039.IS S4039

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1 fied flexible-fuel plug-in hybrid motor vehicle placed 

2 in service by the taxpayer during the taxable year 

3 is— 

4 ‘‘(A) $3,000, if such vehicle is a new quali5 fied plug-in hybrid motor vehicle with a gross 

6 vehicle weight rating of not more than 8,500 

7 pounds, and 

8 ‘‘(B) $3,150, if such vehicle is a new quali9 fied flexible-fuel plug-in hybrid motor vehicle 

10 with a gross vehicle weight rating of not more 

11 than 8,500 pounds. 

12 ‘‘(2) INCREASE FOR FUEL EFFICIENCY.— 

13 ‘‘(A) IN GENERAL.—The amount deter14 mined under paragraph (1)(A) with respect to 

15 a new qualified plug-in hybrid motor vehicle or 

16 new qualified flexible-fuel plug-in hybrid motor 

17 vehicle which is a passenger automobile or light 

18 truck shall be increased by— 

19 ‘‘(i) $1,000 if such vehicle achieves at 

20 least 250 percent but less than 250 per21 cent of the 2002 model year city fuel econ22 omy, 

23 ‘‘(ii) $1,500 if such vehicle achieves at 

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1 cent of the 2002 model year city fuel econ2 omy, 

3 ‘‘(iii) $2,000 if such vehicle achieves 

4 at least 275 percent but less than 300 per5 cent of the 2002 model year city fuel econ6 omy, 

7 ‘‘(iv) $2,500 if such vehicle achieves 

8 at least 300 percent but less than 325 per9 cent of the 2002 model year city fuel econ10 omy, and 

11 ‘‘(v) $3,000 if such vehicle achieves at 

12 least 325 percent of the 2002 model year 

13 city fuel economy, 

14 ‘‘(B) 2002 MODEL YEAR CITY FUEL ECON15 OMY.—For purposes of subparagraph (A), the 

16 2002 model year city fuel economy with respect 

17 to a vehicle shall be determined using the tables 

18 provided in subsection (b)(2)(B). 

19 ‘‘(3) NEW QUALIFIED PLUG-IN HYBRID MOTOR

20 VEHICLE.—For purposes of this subsection, the term 

21 ‘new qualified plug-in hybrid motor vehicle’ means a 

22 motor vehicle— 

23 ‘‘(A) which is propelled by an internal 

24 combustion engine or heat engine using — 

25 ‘‘(i) any combustible fuel, 


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1 ‘‘(ii) an on-board, rechargeable stor2 age device, and 

3 ‘‘(iii) a means of using an off-board 

4 source of electricity, 

5 ‘‘(B) which, in the case of a passenger 

6 automobile or light truck, has received on or 

7 after the date of the enactment of this section 

8 a certificate that such vehicle meets or exceeds 

9 the Bin 5 Tier II emission level established in 

10 regulations prescribed by the Administrator of 

11 the Environmental Protection Agency under 

12 section 202(i) of the Clean Air Act for that 

13 make and model year vehicle, 

14 ‘‘(C) the original use of which commences 

15 with the taxpayer, 

16 ‘‘(D) which is acquired for use or lease by 

17 the taxpayer and not for resale, and 

18 ‘‘(E) which is made by a manufacturer. 

19 ‘‘(4) NEW QUALIFIED FLEXIBLE-FUEL PLUG-IN

20 HYBRID MOTOR VEHICLE.—For purposes of this 

21 subsection, the term ‘new qualified flexible-fuel plug22 in hybrid motor vehicle’ means a motor vehicle— 

23 ‘‘(A) which is propelled by an internal 

24 combustion engine or heat engine using— 


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1 ‘‘(i) an on-board, rechargeable storage 

2 device, and 

3 ‘‘(ii) a means of using an off-board 

4 source of electricity, 

5 ‘‘(B) which is warrantied by its manufac6 turer to operate on any combination of gasoline 

7 and a fuel blend containing up to 85 percent 

8 ethanol and 15 percent gasoline by volume 

9 (E85), 

10 ‘‘(C) which, in the case of a passenger 

11 automobile or light truck, has received on or 

12 after the date of the enactment of this section 

13 a certificate that such vehicle meets or exceeds 

14 the Bin 5 Tier II emission level established in 

15 regulations prescribed by the Administrator of 

16 the Environmental Protection Agency under 

17 section 202(i) of the Clean Air Act for that 

18 make and model year vehicle, 

19 ‘‘(D) the original use of which commences 

20 with the taxpayer, 

21 ‘‘(E) which is acquired for use or lease by 

22 the taxpayer and not for resale, and 

23 ‘‘(F) which is made by a manufacturer.’’. 

24 (b) CONFORMING AMENDMENTS.— 


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1 (1) Section 30B(a) of the Internal Revenue 

2 Code of 1986 is amended by striking ‘‘and’’ at the 

3 end of paragraph (3), by striking the period at the 

4 end of paragraph (4) and inserting ‘‘, and’’, and by 

5 adding at the end the following new paragraph: 

6 ‘‘(5) the new plug-in hybrid motor vehicle credit 

7 determined under subsection (i).’’. 

8 (2) Section 30B(k)(2) of such Code, as redesig9 nated by subsection (a), is amended by striking ‘‘or’’ 

10 and inserting a comma and by inserting ‘‘, a new 

11 qualified plug-in hybrid motor vehicle (as described 

12 in subsection (i)(3)), or a new qualified flexible-fuel 

13 plug-in hybrid motor vehicle (as described in sub14 section (i)(4))’’ after ‘‘subsection (d)(2)(A))’’. 

15 (c) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to property placed in service after 

17 the date of the enactment of this Act, in taxable years 

18 ending after such date. 

19 Subtitle B—Advanced Technology 

20 Motor Vehicles Manufacturing 

21 Credit 

22 SEC. 211. ADVANCED TECHNOLOGY MOTOR VEHICLES MAN23 UFACTURING CREDIT. 

24 (a) IN GENERAL.—Subpart B of part IV of sub25 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 (relating to foreign tax credit, etc.) is amended by 

2 adding at the end the following new section: 

3 ‘‘SEC. 30D. ADVANCED TECHNOLOGY MOTOR VEHICLES 

4 MANUFACTURING CREDIT. 

5 ‘‘(a) CREDIT ALLOWED.—There shall be allowed as 

6 a credit against the tax imposed by this chapter for the 

7 taxable year an amount equal to 35 percent of the quali8 fied investment of an eligible taxpayer for such taxable 

9 year. 

10 ‘‘(b) QUALIFIED INVESTMENT.—For purposes of this 

11 section— 

12 ‘‘(1) IN GENERAL.—The term ‘qualified invest13 ment’ means, with respect to any taxable year, the 

14 sum of— 

15 ‘‘(A) the costs paid or incurred by the eli16 gible taxpayer during such taxable year— 

17 ‘‘(i) to re-equip, expand, or establish 

18 any manufacturing facility of the eligible 

19 taxpayer to produce advanced technology 

20 motor vehicles or to produce eligible com21 ponents, and 

22 ‘‘(ii) for qualified research (as defined 

23 in section 41(d)) related to advanced tech24 nology motor vehicles and eligible compo25 nents, and 


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1 ‘‘(B) qualified engineering integration 

2 costs. 

3 ‘‘(2) ATTRIBUTION RULES.—For purposes of 

4 paragraph (1)(A)(i), in the case of a manufacturing 

5 facility of the eligible taxpayer which produces both 

6 advanced technology motor vehicles and other motor 

7 vehicles, or eligible components and other compo8 nents, only the amount paid or incurred for the pro9 duction of advanced technology motor vehicles and 

10 eligible components shall be taken into account. 

11 ‘‘(c) ELIGIBLE TAXPAYER.—For purposes of this sec12 tion, the term ‘eligible taxpayer’ means any taxpayer if 

13 more than 50 percent of its gross receipts for the taxable 

14 year is derived from the manufacture of motor vehicles 

15 or any component parts of such vehicles. 

16 ‘‘(d) DEFINITIONS.—For purposes of this section— 

17 ‘‘(1) ADVANCED TECHNOLOGY MOTOR VEHI18 CLE.—The term ‘advanced technology motor vehicle’ 

19 means— 

20 ‘‘(A) any new qualified fuel cell motor vehi21 cle (as defined in section 30B(b)(3)), 

22 ‘‘(B) any new advanced lean burn tech23 nology motor vehicle (as defined in section 

24 30B(c)(3)), 


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1 ‘‘(C) any new qualified hybrid motor vehi2 cle (as defined in section 30B(d)(3)(A) and de3 termined without regard to any gross vehicle 

4 weight rating), 

5 ‘‘(D) any new qualified alternative motor 

6 fuel vehicle (as defined in section 30B(e)(4)), 

7 and 

8 ‘‘(E) any new qualified plug-in hybrid 

9 motor vehicle (as defined in section 30B(i)(3)) 

10 or any new qualified flexible-fuel plug-in hybrid 

11 motor vehicle (as defined in section 30B(i)(4)). 

12 ‘‘(2) ELIGIBLE COMPONENTS.—The term ‘eligi13 ble component’ means any component inherent to 

14 any advanced technology motor vehicle but not in15 herent to a motor vehicle which is not an advanced 

16 technology motor vehicle, including— 

17 ‘‘(A) with respect to any gasoline or diesel18 electric new qualified hybrid motor vehicle, 

19 any— 

20 ‘‘(i) electric motor or generator, 

21 ‘‘(ii) power split device, 

22 ‘‘(iii) power control unit, 

23 ‘‘(iv) power controls, 

24 ‘‘(v) integrated starter generator, or 

25 ‘‘(vi) battery, 


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1 ‘‘(B) with respect to any hydraulic new 

2 qualified hybrid motor vehicle, any— 

3 ‘‘(i) hydraulic accumulator vessel, 

4 ‘‘(ii) hydraulic pump, or 

5 ‘‘(iii) hydraulic pump-motor assembly, 

6 ‘‘(C) with respect to any new advanced 

7 lean burn technology motor vehicle, any— 

8 ‘‘(i) diesel engine, 

9 ‘‘(ii) turbocharger, 

10 ‘‘(iii) fuel injection system, or 

11 ‘‘(iv) after-treatment system, such as 

12 a particle filter or NOx absorber, and 

13 ‘‘(D) with respect to any advanced tech14 nology motor vehicle, any other component sub15 mitted for approval by the Secretary. 

16 ‘‘(3) QUALIFIED ENGINEERING INTEGRATION

17 COSTS.—For purposes of subsection (b)(1)(B), the 

18 term ‘qualified engineering integration costs’ means, 

19 with respect to any advanced technology motor vehi20 cle, costs incurred prior to the market introduction 

21 of such motor vehicle for engineering tasks related 

22 to— 

23 ‘‘(A) establishing functional, structural, 

24 and performance requirements for components 


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1 and subsystems to meet overall vehicle objec2 tives for a specific application, 

3 ‘‘(B) designing interfaces for components 

4 and subsystems with mating systems within a 

5 specific vehicle application, 

6 ‘‘(C) designing cost effective, efficient, and 

7 reliable manufacturing processes to produce 

8 components and subsystems for a specific vehi9 cle application, and 

10 ‘‘(D) validating functionality and perform11 ance of components and subsystems for a spe12 cific vehicle application. 

13 ‘‘(4) MOTOR VEHICLE.—The term ‘motor vehi14 cle’ has the meaning given such term by section 

15 30(c)(2). 

16 ‘‘(e) LIMITATION BASED ON AMOUNT OF TAX.— 

17 ‘‘(1) IN GENERAL.—The credit allowed under 

18 subsection (a) for any taxable year shall not exceed 

19 the sum of— 

20 ‘‘(A) the taxpayer’s regular tax liability (as 

21 defined in section 26(b)) for the taxable year, 

22 plus 

23 ‘‘(B) the tax imposed under section 55 for 

24 the taxable year. 


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1 ‘‘(2) CARRYOVER OF UNUSED CREDIT

2 AMOUNTS.— 

3 ‘‘(A) IN GENERAL.—If the credit allowable 

4 under subsection (a) for a taxable year exceeds 

5 the limitation under paragraph (1) for such tax6 able year, such excess shall be allowed— 

7 ‘‘(i) as a credit carryback to each of 

8 the 13 taxable years preceding such year, 

9 and 

10 ‘‘(ii) as a credit carryforward to each 

11 of the 20 taxable years following such year. 

12 ‘‘(B) AMOUNT CARRIED TO EACH YEAR.— 

13 For purposes of this paragraph, rules similar to 

14 the rules of section 39(a)(2) shall apply. 

15 ‘‘(f) SPECIAL RULES.— 

16 ‘‘(1) REDUCTION IN BASIS.—For purposes of 

17 this subtitle, if a credit is allowed under this section 

18 for any expenditure with respect to any property, the 

19 increase in the basis of such property which would 

20 (but for this paragraph) result from such expendi21 ture shall be reduced by the amount of the credit so 

22 allowed. 

23 ‘‘(2) INVESTMENTS AND PROPERTY OUTSIDE

24 THE UNITED STATES.—No credit shall be allowed 

25 under subsection (a) with respect to— 


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1 ‘‘(A) any manufacturing facility which is 

2 located outside the United States, and 

3 ‘‘(B) any engineering integration or re4 search and development conducted outside the 

5 United States. 

6 ‘‘(3) AGGREGATION OF EXPENDITURES; ALLO7 CATIONS.—For purposes of this section, rules simi8 lar to the rules of paragraphs (1) and (2) of section 

9 41(f) shall apply. 

10 ‘‘(4) RECAPTURE.—The Secretary shall, by reg11 ulation, provide for recapturing the benefit of any 

12 credit allowable under subsection (a) with respect to 

13 any manufacturing facility which ceases to produce 

14 advanced technology motor vehicles or eligible com15 ponents. 

16 ‘‘(5) PUBLIC STATEMENT.— 

17 ‘‘(A) IN GENERAL.—No credit shall be al18 lowed under subsection (a) for any taxable year 

19 unless the eligible taxpayer makes publicly 

20 available a statement describing the activities of 

21 the eligible taxpayer for which the credit is al22 lowed and the public benefits of such activities, 

23 including the estimated amount of any reduc24 tion in national oil consumption in future years 

25 as a result of such activities. 


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1 ‘‘(B) TIME FOR PUBLICATION.—The state2 ment required under subparagraph (A) shall be 

3 made available not later than 90 days after the 

4 end of the taxable year for which the credit 

5 under subsection (a) is allowed and shall be in 

6 such form as the Secretary shall prescribe. 

7 ‘‘(6) NO DOUBLE BENEFIT.— 

8 ‘‘(A) COORDINATION WITH OTHER DEDUC9 TIONS AND CREDITS.—Except as provided in 

10 subparagraph (B), the amount of any deduction 

11 or other credit allowable under this chapter for 

12 any cost taken into account in determining the 

13 amount of the credit under subsection (a) shall 

14 be reduced by the amount of such credit attrib15 utable to such cost. 

16 ‘‘(B) RESEARCH AND DEVELOPMENT

17 COSTS.— 

18 ‘‘(i) IN GENERAL.—Except as pro19 vided in clause (ii), any amount described 

20 in subsection (b)(1)(A)(ii) taken into ac21 count in determining the amount of the 

22 credit under subsection (a) for any taxable 

23 year shall not be taken into account for 

24 purposes of determining the credit under 

25 section 41 for such taxable year. 


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1 ‘‘(ii) COSTS TAKEN INTO ACCOUNT IN

2 DETERMINING BASE PERIOD RESEARCH

3 EXPENSES.—Any amounts described in 

4 subsection (b)(1)(A)(ii) taken into account 

5 in determining the amount of the credit 

6 under subsection (a) for any taxable year 

7 which are qualified research expenses 

8 (within the meaning of section 41(b)) shall 

9 be taken into account in determining base 

10 period research expenses for purposes of 

11 applying section 41 to subsequent taxable 

12 years. 

13 ‘‘(g) ELECTION NOT TO TAKE CREDIT.—No credit 

14 shall be allowed under subsection (a) for any property if 

15 the taxpayer elects not to have this section apply to such 

16 property. 

17 ‘‘(h) REGULATIONS.—The Secretary shall prescribe 

18 such regulations as necessary to carry out the provisions 

19 of this section.’’. 

20 (b) CONFORMING AMENDMENTS.— 

21 (1) Section 1016(a) of the Internal Revenue 

22 Code of 1986 is amended by striking ‘‘and’’ at the 

23 end of paragraph (36), by striking the period at the 

24 end of paragraph (37) and inserting ‘‘, and’’, and by 

25 adding at the end the following new paragraph: 


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1 ‘‘(38) to the extent provided in section 

2 30D(f)(1).’’. 

3 (2) Section 6501(m) of such Code is amended 

4 by inserting ‘‘30D(g),’’ after ‘‘30C(e)(5),’’. 

5 (3) The table of sections for subpart B of part 

6 IV of subchapter A of chapter 1 of such Code is 

7 amended by inserting after the item relating to sec8 tion 30C the following new item: 

‘‘Sec. 30D. Advanced technology motor vehicles manufacturing credit.’’. 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to amounts incurred in taxable 

11 years beginning after December 31, 1993. 

12 TITLE III—INTERNATIONAL AND 

13 CORPORATE OBLIGATIONS 

14 SEC. 301. INTERNATIONAL NEGOTIATIONS AND TRADE RE15 STRICTIONS. 

16 It is the sense of the Senate that the United States 

17 should act to reduce the health, environmental, economic, 

18 and national security risks posed by global climate change, 

19 and foster sustained economic growth through a new gen20 eration of technologies, by— 

21 (1) participating in negotiations under the 

22 United Nations Framework Convention on Climate 

23 Change, done at New York May 9, 1992, and lead24 ing efforts in other international forums, with the 


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1 objective of securing participation of the United 

2 States in agreements that— 

3 (A) advance and protect the economic and 

4 national security interests of the United States; 

5 (B) establish mitigation commitments by 

6 all countries that are major emitters of global 

7 warming pollution, in accordance with the prin8 ciple of ‘‘common but differentiated responsibil9 ities’’; 

10 (C) establish flexible international mecha11 nisms to minimize the cost of efforts by partici12 pating countries; and 

13 (D) achieve a significant long-term reduc14 tion in global warming pollution emissions; and 

15 (2) establishing a bipartisan Senate observation 

16 group, the members of which should be designated 

17 by the Chairman and Ranking Member of the Com18 mittee on Foreign Relations of the Senate, and 

19 which should include the Chairman and Ranking 

20 Member of the Committee on Environment and Pub21 lic Works of the Senate— 

22 (A) to monitor any international negotia23 tions on climate change; and 

24 (B) to ensure that the advice and consent 

25 function of the Senate is exercised in a manner 


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1 to facilitate timely consideration of any applica2 ble treaty submitted to the Senate. 

3 SEC. 302. CORPORATE ENVIRONMENTAL DISCLOSURE OF 

4 CLIMATE CHANGE RISKS. 

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

6 date of enactment of this Act, the Securities and Ex7 change Commission (referred to in this section as the 

8 ‘‘Commission’’) shall promulgate regulations in accord9 ance with section 13 of the Securities Exchange Act of 

10 1934 (15 U.S.C. 78m) directing each issuer of securities 

11 under that Act with a market capitalization of more than 

12 $1,000,000,000, regardless of whether the issuer is 

13 publicly- or privately-held, to inform securities investors 

14 of the risks relating to— 

15 (1) the financial exposure of the issuer because 

16 of the net global warming pollution emissions of the 

17 issuer; and 

18 (2) the potential economic impacts of global 

19 warming on the interests of the issuer. 

20 (b) UNIFORM FORMAT FOR DISCLOSURE.—In car21 rying out subsection (a), the Commission shall enter into 

22 an agreement with the Financial Accounting Standards 

23 Board, or another appropriate organization that estab24 lishes voluntary standards, to develop a uniform format 


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1 for disclosing to securities investors information on the 

2 risks described in subsection (a). 

3 (c) INTERIM INTERPRETIVE RELEASE.— 

4 (1) IN GENERAL.—As soon as practicable after 

5 the date of enactment of this Act, the Commission 

6 shall issue an interpretive release clarifying that 

7 under items 101 and 303 of Regulation S–K of the 

8 Commission under part 229 of title 17, Code of Fed9 eral Regulations (as in effect on the date of enact10 ment of this Act)— 

11 (A) the commitments of the United States 

12 to reduce emissions of global warming pollution 

13 under the United Nations Framework Conven14 tion on Climate Change, done at New York on 

15 May 9, 1992, are considered to be a material 

16 effect; and 

17 (B) global warming constitutes a known 

18 trend. 

19 (2) PERIOD OF EFFECTIVENESS.—The inter20 pretive release issued under paragraph (1) shall re21 main in effect until the effective date of the final 

22 regulations promulgated under subsection (a). 


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1 TITLE IV—NATIONAL CLIMATE 

2 CHANGE VULNERABILITY 

3 AND RESILIENCE PROGRAM 

4 SEC. 401. DEFINITIONS. 

5 In this title: 

6 (1) OFFICE.—The term ‘‘Office’’ means the Of7 fice of Climate Change Vulnerability and Resilience 

8 Research established under section 402(c). 

9 (2) PROGRAM.—The term ‘‘Program’’ means 

10 the National Climate Change Vulnerability and Re11 silience Program established under section 402(a). 

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

13 the Secretary of Commerce. 

14 SEC. 402. NATIONAL CLIMATE CHANGE VULNERABILITY 

15 AND RESILIENCE PROGRAM. 

16 (a) ESTABLISHMENT.—The Secretary shall establish 

17 a National Climate Change Vulnerability and Resilience 

18 Program to evaluate and make recommendations about 

19 local, regional, and national vulnerability and resilience to 

20 impacts relating to longer-term climatic changes and 

21 shorter-term climatic variations, including changes and 

22 variations resulting from human activities. 

23 (b) CONSULTATION.—In designing the Program, the 

24 Secretary shall consult with Federal agencies participating 

25 in the United States Global Change Research Program esVerDate Aug 31 2005 01:45 Oct 06, 2006 Jkt 059200 PO 00000 Frm 00066 Fmt 6652 Sfmt 6201 E:\BILLS\S4039.IS S4039

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1 tablished under section 103 of the Global Change Re2 search Act of 1990 (15 U.S.C. 2933) and any other appro3 priate Federal, State, or local agency. 

4 (c) OFFICE OF CLIMATE CHANGE VULNERABILITY

5 AND RESILIENCE RESEARCH.—The Secretary shall estab6 lish an Office of Climate Change Vulnerability and Resil7 ience Research within the Department of Commerce, 

8 which shall— 

9 (1) be responsible for managing the Program; 

10 and 

11 (2) in accordance with the design of the Pro12 gram, coordinate climatic change and climatic vari13 ation vulnerability and resilience research in the 

14 United States. 

15 (d) VULNERABILITY ASSESSMENTS.—The Program 

16 shall include— 

17 (1) evaluations, based on historical data, cur18 rent observational data, and, where appropriate, 

19 available predictions, of local, State, regional, and 

20 national vulnerability to phenomena associated with 

21 climatic change and climatic variation, including— 

22 (A) severe weather events, such as severe 

23 thunderstorms, tornadoes, and hurricanes; 


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1 (B) annual and interannual climate events, 

2 such as the El Nin ̃o Southern Oscillation and 

3 the North Atlantic Oscillation; 

4 (C) changes in sea level and shifts in the 

5 hydrological cycle; 

6 (D) natural hazards, including tsunamis, 

7 droughts, floods, and wildfires; and 

8 (E) alterations of ecological communities 

9 as a result of climatic change and climatic vari10 ation; and 

11 (2) the production of a vulnerability scorecard, 

12 in cooperation with State and local institutions in13 cluding university researchers and programs, that 

14 assesses the vulnerability and capacity of each State 

15 to respond to climatic change and climatic variation 

16 hazards. 

17 (e) PREPAREDNESS RECOMMENDATIONS.—Not later 

18 than 2 years after the date of enactment of this Act, the 

19 Office shall submit to Congress a report that— 

20 (1) includes the vulnerability scorecards pro21 duced under subsection (d)(2); and 

22 (2) identifies, and recommends implementation 

23 and funding strategies for, short-term and long-term 

24 actions that may be taken at the local, State, re25 gional, or national level— 


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1 (A) to minimize climatic change and cli2 matic variation threats to human life and prop3 erty; 

4 (B) to minimize negative economic impacts 

5 of climatic change and climatic variation; and 

6 (C) to improve resilience to climatic change 

7 and climatic variation hazards. 

8 (f) VULNERABILITY RESEARCH.—In addition to 

9 other responsibilities under this section, the Office shall— 

10 (1) apply the results of available vulnerability 

11 research to develop and improve criteria that meas12 ure resilience to climatic change and climatic vari13 ation hazards at the local, State, regional, and na14 tional levels; 

15 (2) coordinate the implementation of short-term 

16 and long-term research programs based on the rec17 ommendations made under subsection (e)(2); 

18 (3) measure progress in increasing the capacity 

19 of each State to respond to climatic change and cli20 matic variation hazards, using the vulnerability 

21 scorecards produced under subsection (d)(2) as a 

22 benchmark; and 

23 (4) not less than annually, review and, if appro24 priate due to the availability of additional informaVerDate Aug 31 2005 01:45 Oct 06, 2006 Jkt 059200 PO 00000 Frm 00069 Fmt 6652 Sfmt 6201 E:\BILLS\S4039.IS S4039

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1 tion, update the vulnerability scorecards and the rec2 ommendations made under subsection (e)(2). 

3 (g) INFORMATION AND TECHNOLOGY DISSEMINA4 TION.—The Secretary shall— 

5 (1) make widely available appropriate informa6 tion, technologies, and products to assist local, 

7 State, regional, and national efforts to reduce loss of 

8 life and property due to climatic change and climatic 

9 variation; and 

10 (2) coordinate the dissemination of the informa11 tion, technologies, and products through all appro12 priate channels. 

13 (h) AUTHORIZATION OF APPROPRIATIONS.—There is 

14 authorized to be appropriated to the Secretary to carry 

15 out this section $10,000,000. 

Æ 


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