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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 2729 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 2729

To reduce greenhouse gas emissions from uncapped domestic sources, and 
                          for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            November 4, 2009

 Ms. Stabenow (for herself, Mr. Baucus, Ms. Klobuchar, Mr. Brown, Mr. 
 Begich, Mr. Harkin, and Mrs. Shaheen) introduced the following bill; 
 which was read twice and referred to the Committee on Environment and 
                              Public Works

_______________________________________________________________________

                                 A BILL

 
To reduce greenhouse gas emissions from uncapped domestic sources, 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 ``Clean Energy 
Partnerships Act of 2009''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
    TITLE I--OFFSET CREDIT PROGRAM FOR DOMESTIC EMISSION REDUCTIONS

Sec. 101. Definitions.
Sec. 102. Advisory Committee.
Sec. 103. Establishment of program to credit emission reductions from 
                            uncapped domestic sources and sinks.
Sec. 104. Eligible projects.
Sec. 105. Requirements for offset projects.
Sec. 106. Approval.
Sec. 107. Verification of offset projects.
Sec. 108. Issuance of offset credits.
Sec. 109. Audits and reviews.
Sec. 110. Early offset supply.
Sec. 111. Program review and revision.
Sec. 112. Additional regulatory standards for emission reductions.
Sec. 113. Use of credits for compliance purposes.
                 TITLE II--CARBON CONSERVATION PROGRAM

Sec. 201. Definitions.
Sec. 202. Carbon conservation program.
Sec. 203. Carbon Conservation Fund.
                TITLE III--RURAL CLEAN ENERGY RESOURCES

Sec. 301. Findings.
Sec. 302. Biorefinery assistance.
Sec. 303. Repowering assistance.
Sec. 304. Rural Energy for America Program.
Sec. 305. Rural Clean Energy Resources Fund.
    TITLE IV--AGRICULTURE AND FORESTRY RESEARCH FOR GREENHOUSE GAS 
                               MITIGATION

Sec. 401. Findings.
Sec. 402. Research and demonstration program.

    TITLE I--OFFSET CREDIT PROGRAM FOR DOMESTIC EMISSION REDUCTIONS

SEC. 101. DEFINITIONS.

    In this title:
            (1) Academy.--The term ``Academy'' means the National 
        Academy of Sciences.
            (2) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (3) Advisory committee.--The term ``Advisory Committee'' 
        means the Greenhouse Gas Emission Reduction and Sequestration 
        Advisory Committee established under section 102(a)(1).
            (4) Appropriate official.--The term ``appropriate 
        official'' means--
                    (A) the Secretary, with respect to any domestic 
                agriculture or forestry offset project; and
                    (B) the Administrator, with respect to all other 
                offset projects.
            (5) Emission reduction.--The term ``emission reduction'' 
        means the reduction, avoidance, destruction, or sequestration 
        of greenhouse gas emissions.
            (6) Offset project.--The term ``offset project'' means a 
        project or activity that achieves emission reductions, and for 
        which offset credits are issued under this title.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.

SEC. 102. ADVISORY COMMITTEE.

    (a) Establishment.--
            (1) Advisory committee.--The Secretary and the 
        Administrator shall jointly establish an advisory committee, to 
        be known as the ``Greenhouse Gas Emission Reduction and 
        Sequestration Advisory Committee'', to provide scientific and 
        technical advice on the establishment and implementation of an 
        offset project program with respect to offset projects under 
        the jurisdiction of the Secretary and the Administrator.
            (2) Authority.--In addition to the authority of this 
        section, the Administrator and the Secretary shall use existing 
        authority under, as appropriate--
                    (A) the Clean Air Act (42 U.S.C. 7401 et seq.);
                    (B) the Federal Advisory Committee Act (5 U.S.C. 
                App.); and
                    (C) section 1245 of the Food Security Act of 1985 
                (16 U.S.C. 3845).
    (b) Membership.--
            (1) In general.--The Advisory Committee shall be composed 
        of not less than 9 and not more than 15 individuals with 
        relevant education, training, and experience, selected jointly 
        by the Secretary and the Administrator, who shall be--
                    (A) identified by the Academy;
                    (B) representative of land grant universities, 
                academia, business, nongovernmental organizations, and 
                Federal, State, and local government; or
                    (C) experts with background and experience in 
                agriculture or forestry.
            (2) Requirement.--Not more than \1/3\ of the members of the 
        Advisory Committee may be officers or employees (including 
        contractors) of any Federal agency.
            (3) Term.--A member--
                    (A) shall be appointed to the Advisory Committee 
                for a term of 3 years (except for initial terms for 
                which members may be appointed for a term of 4 or 5 
                years to allow staggering); and
                    (B) may be reappointed for 1 additional 3-year term 
                (which may directly follow a first term), at the 
                discretion of the Secretary and the Administrator.
            (4) Vacancies.--A vacancy on the Advisory Committee--
                    (A) shall not affect the powers of the Advisory 
                Committee; and
                    (B) shall be filled in the same manner as the 
                original appointment was made.
            (5) Initial meeting.--Not later than 30 days after the date 
        on which all members of the Advisory Committee have been 
        appointed, the Advisory Committee shall hold the initial 
        meeting of the Advisory Committee.
            (6) Meetings.--The Advisory Committee shall meet at the 
        call of the Chairperson, with the approval of the designated 
        Federal officer.
            (7) Quorum.--A majority of the members of the Advisory 
        Committee shall constitute a quorum, but a lesser number of 
        members may hold hearings.
            (8) Chairperson.--The Secretary and the Administrator shall 
        jointly select a Chairperson of the Advisory Committee from 
        among the members of the Advisory Committee.
    (c) Expertise.--On approval of the Secretary and the Administrator, 
the Advisory Committee may seek outside expertise, as necessary, and 
form subcommittees or workgroups for any purpose consistent with this 
section.
    (d) Duties.--
            (1) Reports on offset project categories.--
                    (A) In general.--Not later than 180 days after the 
                date on which all initial members of the Advisory 
                Committee have been appointed, the Advisory Committee 
                shall submit to the Secretary and the Administrator and 
                make available to the public a report containing 
                recommendations regarding the types of offset project 
                categories pursuant to section 104, and relevant 
                scientific data regarding practices for those 
                categories, that should be considered to be eligible to 
                generate offset credits under this title.
                    (B) Factors.--In developing the recommendations 
                described in subparagraph (A), the Advisory Committee 
                shall take into account--
                            (i) the extent to which, as of the date of 
                        submission of the report, the project or 
                        activity types within each category--
                                    (I) are required by law; or
                                    (II) represent business-as-usual 
                                practices for an industry sector or 
                                facility type;
                            (ii) the potential for accurate 
                        quantification of net emission reductions;
                            (iii) any corresponding environmental 
                        benefits or disadvantages; and
                            (iv) the potential supply of emission 
                        reductions available from the category.
                    (C) Categories for consideration.--In determining 
                which categories of activities to recommend under 
                subparagraph (A), the Advisory Committee shall 
                consider, at a minimum, with respect to each category 
                and the jurisdiction of the Secretary and 
                Administrator, as appropriate, project types that are 
                listed under section 104.
                    (D) Methodologies.--For each recommended offset 
                project category, the Advisory Committee may recommend 
                1 or more methodologies for use with any project type.
            (2) Reports on emission reduction integrity.--
                    (A) In general.--Not later than 180 days before the 
                date of promulgation of any regulations relating to 
                offsets required under a Federal law enacted for the 
                purpose of regulating greenhouse gas emissions, and 
                periodically thereafter, using the best available 
                science, the Advisory Committee shall jointly provide 
                to the Secretary and the Administrator, respectively, 
                and submit for publication a report containing priority 
                recommendations on how to ensure the emission reduction 
                integrity of the offset projects under this title, 
                including with regard to--
                            (i) quantifying credits for net emission 
                        reductions resulting from offset projects;
                            (ii) determining additionality, including--
                                    (I) the application of standards 
                                that are specific to each project type; 
                                and
                                    (II) the use of methodologies that 
                                account for business-as-usual practices 
                                for an industry or facility type;
                            (iii) accounting for economic and emission 
                        leakage associated with project activities, 
                        including the application of sector-specific 
                        leakage factors in order to reflect net changes 
                        in emissions and sequestration resulting from 
                        the project;
                            (iv) accounting for uncertainty and 
                        application of uncertainty factors;
                            (v) methods to measure, verify, and 
                        otherwise ensure project results with 
                        sufficient scientific integrity to meet the 
                        objectives of the program;
                            (vi) establishing appropriate insurance 
                        requirements, buffer reserves, or other options 
                        to address the risk of reversals by project 
                        type and conditions;
                            (vii) minimizing administrative costs and 
                        burdens on project representatives; and
                            (viii) meeting any other criteria the 
                        Advisory Committee recommends be applied to 
                        ensure that projects assist in meeting the 
                        overall objectives of a Federal law enacted for 
                        the purpose of regulating greenhouse gas 
                        emissions.
                    (B) Response.--Not later than 180 days after the 
                date of receipt of a report under subparagraph (A), the 
                Secretary and the Administrator shall jointly make 
                available to the public a response to the report.
    (e) Powers.--
            (1) Hearings.--The Advisory Committee may, with the consent 
        of the Secretary and the Administrator, hold such hearings, 
        meet and act at such times and places, take such testimony, and 
        receive such evidence as the Advisory Committee considers 
        advisable to carry out this section.
            (2) Information from federal agencies.--
                    (A) In general.--The Advisory Committee may secure 
                directly from a Federal agency such information as the 
                Advisory Committee considers necessary to carry out 
                this section.
                    (B) Provision of information.--On request of the 
                Chairperson of the Advisory Committee, the head of the 
                agency shall provide the information to the Advisory 
                Committee.
            (3) Postal services.--The Advisory Committee may use the 
        United States mails in the same manner and under the same 
        conditions as other agencies of the Federal Government.
    (f) Advisory Committee Personnel Matters.--
            (1) Compensation of members.--
                    (A) Non-federal employees.--A member of the 
                Advisory Committee who is not an officer or employee of 
                the Federal Government shall be compensated at a rate 
                equal to the daily equivalent of the annual rate of 
                basic pay prescribed for level IV of the Executive 
                Schedule under section 5315 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 Advisory Committee.
                    (B) Federal employees.--A member of the Advisory 
                Committee who is an officer or employee of the Federal 
                Government shall serve without compensation in addition 
                to the compensation received for the services of the 
                member as an officer or employee of the Federal 
                Government.
            (2) Travel expenses.--A member of the Advisory Committee 
        shall be allowed travel expenses, including per diem in lieu of 
        subsistence, at rates authorized for an employee of an agency 
        under subchapter I of chapter 57 of title 5, United States 
        Code, while away from the home or regular place of business of 
        the member in the performance of the duties of the Advisory 
        Committee.

SEC. 103. ESTABLISHMENT OF PROGRAM TO CREDIT EMISSION REDUCTIONS FROM 
              UNCAPPED DOMESTIC SOURCES AND SINKS.

    (a) Program.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Administrator and the Secretary 
        shall, in accordance with this title, establish a program to 
        govern the creation of credits from emission reductions from 
        uncapped domestic sources and sinks while ensuring that offset 
        credits represent additional greenhouse gas emission reductions 
        in accordance with section 105.
            (2) Emission reduction integrity; rulemaking.--In carrying 
        out the program under this section, the Administrator and the 
        Secretary shall, to the maximum extent practicable--
                    (A) protect the emission reduction integrity of the 
                program while minimizing burdens on offset project 
                representatives;
                    (B) prioritize rulemaking for activities that 
                present the fewest technical challenges and greatest 
                certainty of net atmospheric benefit, considering the 
                recommendations of--
                            (i) the Advisory Committee submitted under 
                        section 102;
                            (ii) the Department of the Interior;
                            (iii) the Secretary of Commerce, with 
                        respect to any coastal, ocean or marine offset 
                        project; and
                            (iv) other Federal agencies;
                    (C) ensure that consistent requirements and 
                procedures apply in the case of offset project types 
                that fall within the respective purviews of the 
                Administrator and the Secretary; and
                    (D) ensure that the program meets the requirements 
                of section 105.
    (b) Registry.--Not later than 1 year after the date of enactment of 
this Act, the Administrator, in consultation with the Secretary and the 
heads of other appropriate Federal agencies, shall establish a registry 
(or expand an established emission allowance registry) for use in 
recording approved credits issued under this section to reflect 
emission reductions from uncapped sources and sinks.
    (c) Department of Agriculture Role.--In addition to the duties 
described in subsection (a) and section 1245 of the Food Security Act 
of 1985 (16 U.S.C. 3845), the Secretary shall, with respect to relevant 
or appropriate projects relating to emission reductions from uncapped 
sources and sinks in agriculture and forestry--
            (1) gather inventory data on carbon stocks and fluxes to 
        inform rulemaking with respect to agricultural and forestry 
        sectors;
            (2) administer as the lead agency the duties prescribed 
        under sections 104, 105, 106, and 109 for agricultural and 
        forestry offset projects;
            (3) prepare the Forest Service, the Natural Resources 
        Conservation Service, the Farm Service Agency, and other 
        applicable entities to make available to landowners and project 
        representatives carbon sequestration data and other information 
        on agricultural and forest land that are necessary to assist 
        landowners and project representatives in estimating carbon 
        sequestration rates by land area or appropriate region, forest 
        type, soil type, and other appropriate factors;
            (4) make available technical assistance to landowners 
        undertaking activities in preparation for the sale of carbon 
        credits derived from activities on the land of the landowners, 
        including work and opportunities with aggregators and third-
        party verifiers pursuant to section 107;
            (5) take into consideration expanding existing training and 
        accreditation programs of the Natural Resources Conservation 
        Service for third-party technical service providers to provide 
        training and accreditation for third-party verifiers pursuant 
        to section 107;
            (6) conduct, as appropriate, outreach, education, and 
        training through the extension services of land-grant colleges 
        and universities; and
            (7) promulgate such regulations as are necessary to carry 
        out the functions of the Secretary under this title.

SEC. 104. ELIGIBLE PROJECTS.

    (a) List of Eligible Project Types.--Each appropriate official 
shall establish and maintain a list of types of offset projects 
eligible to generate offset credits under this title.
    (b) Initial List of Project Types.--
            (1) In general.--Each appropriate official shall establish 
        an initial list of eligible project types under subsection (a).
            (2) Emission reduction activities.--The appropriate 
        official shall include on the list required under this 
        subsection, at a minimum, activities that provide emission 
        reductions and meet the requirement of section 105, including--
                    (A) methane collection at mines, landfills, and 
                natural gas systems;
                    (B) fugitive emissions from the oil and gas sector 
                that reduce greenhouse gas emissions that would 
                otherwise have been flared or vented;
                    (C) nonlandfill projects that involve collection, 
                combustion, or avoidance of emissions from organic 
                waste streams that would have otherwise emitted methane 
                into the atmosphere, including manure management, 
                composting, or anaerobic digestion projects;
                    (D) projects involving afforestation or 
                reforestation of acreage not forested as of January 1, 
                2009;
                    (E) forest management resulting in an increase in 
                forest carbon stores, including harvested wood 
                products;
                    (F) projects that capture and geologically 
                sequester uncapped greenhouse gas emissions with or 
                without enhanced oil or methane recovery in active or 
                depleted oil, carbon dioxide, natural gas reservoirs or 
                other geological formations;
                    (G) recycling and waste minimization projects;
                    (H) projects to abate the production of nitrous 
                oxide at nitric acid production facilities and other 
                stationary sources;
                    (I) projects for biochar production and use;
                    (J) projects that destroy ozone-depleting 
                substances that have been phased out of production;
                    (K) projects in communities reliant on small, 
                isolated electricity grids involving conversion from 
                diesel to renewable sources of energy, including 
                electricity generation facilities with emissions below 
                required levels for compliance with any limitation on 
                district or home heating in those communities;
                    (L) projects relating to agricultural, grassland, 
                and rangeland sequestration and management practices, 
                including--
                            (i) altered tillage practices, including 
                        the avoided abandonment of conservation 
                        practices;
                            (ii) winter cover cropping, continuous 
                        cropping, and other means to increase biomass 
                        returned to soil in lieu of planting followed 
                        by fallowing;
                            (iii) the use of technology or practices to 
                        improve the management of nitrogen fertilizer 
                        use, including slow and controlled-release 
                        fertilizers (including absorbed, coated, 
                        occluded, or reacted fertilizers) and 
                        stabilized nitrogen fertilizers (including 
                        urease, nitrification inhibitors, and nitrogen 
                        stabilizers) that are recognized by State 
                        regulators of fertilizers;
                            (iv) reduction in methane emissions from 
                        rice cultivation;
                            (v) reduction in carbon emissions from 
                        organically managed soils and farming practices 
                        used on certified organic farms;
                            (vi) reduction in greenhouse gas emissions 
                        due to changes in animal management practices, 
                        including dietary modifications and pasture-
                        based livestock systems;
                            (vii) resource-conserving crop rotations of 
                        at least 3 years; and
                            (viii) practices that will increase the 
                        sequestration of carbon in soils on cropland, 
                        hayfields, native and planted grazing land, 
                        grassland, or rangeland;
                    (M) projects for changes in carbon stocks 
                attributed to land management change, including--
                            (i) improved management or restoration of 
                        cropland, grassland, rangeland (including 
                        grazing practices), and forest land;
                            (ii) avoided conversion that would 
                        otherwise release carbon stocks;
                            (iii) reduced deforestation;
                            (iv) management and restoration of peatland 
                        or wetland;
                            (v) urban tree-planting, landscaping, 
                        greenway construction, and maintenance;
                            (vi) sequestration of greenhouse gases 
                        through management of tree crops;
                            (vii) adaptation of plant traits or new 
                        technologies that increase sequestration by 
                        forests; and
                            (viii) projects to restore or prevent the 
                        conversion, loss, or degradation of vegetated 
                        marine coastal habitats;
                    (N) projects that reduce emission reductions from 
                manure and effluent, including--
                            (i) waste aeration;
                            (ii) biogas capture and combustion; and
                            (iii) improved management or application to 
                        agricultural land; and
                    (O) projects that reduce the intensity of 
                greenhouse gas per unit of agricultural production.
    (c) Modifications to the Lists of Eligible Types of Offset 
Project.--
            (1) Modifications.--
                    (A) In general.--At any time, after taking into 
                consideration any relevant recommendations of the 
                Advisory Committee, the appropriate official may by 
                regulation determine whether to add additional types of 
                projects, pursuant to subsection (a), to the list of 
                eligible projects of the appropriate official under 
                subsection (a).
                    (B) Criterion for addition.--The appropriate 
                official shall add a type of project to an eligible 
                list in accordance with subparagraph (A) only if the 
                type of project to be added is capable of generating 
                emission reductions that meet the requirements under 
                this title.
                    (C) Petition for addition.--
                            (i) In general.--Any person may petition 
                        the appropriate official at any time to add a 
                        type of project to a list described in 
                        subsection (a).
                            (ii) Response.--Not later than 180 days 
                        after the date of receipt of the petition, the 
                        appropriate official shall respond to the 
                        petition.
            (2) Removals from the list.--
                    (A) In general.--Not later than January 1, 2015, 
                and every 3 years thereafter, the appropriate official 
                shall determine whether to remove types of projects, 
                pursuant to subsection (b), from the eligible list of 
                the appropriate official.
                    (B) Requirements.--The appropriate official may 
                remove a type of project from the eligible list of the 
                appropriate official only--
                            (i) by regulation; and
                            (ii) if--
                                    (I) the type of project has become 
                                required by law (including a 
                                regulation);
                                    (II) the agency with responsibility 
                                for administering the project 
                                determines that the environmental harm 
                                resulting from the type of project 
                                exceeds the greenhouse gas emission 
                                abatement benefits of the project;
                                    (III) the project activity has 
                                become predominant, and would remain 
                                predominant even without the 
                                availability of offset credits; and
                                    (IV) the project type does not meet 
                                the requirements of this title.

SEC. 105. REQUIREMENTS FOR OFFSET PROJECTS.

    (a) Methodologies.--Not later than 1 year after the date of 
inclusion of a project type on an eligible list under section 104(a), 
the appropriate official shall by regulation establish for that project 
type 1 or more standardized methodologies (giving priority to projects 
with well-established methodologies) or performance standards that can 
be developed so that the project type can meet the requirements of this 
section--
            (1) for use in determining the additionality of greenhouse 
        gas emission reductions achieved by an offset project of that 
        type, that ensures, at a minimum, that any greenhouse gas 
        emission reduction is considered additional only to the extent 
        that the emission reduction results from activities that--
                    (A) are not required by or undertaken to comply 
                with any law (including any regulation or consent 
                order, but excluding any contract);
                    (B) were not commenced prior to January 1, 2009, 
                except for offset project activities described in 
                section 110 that commenced after January 1, 2001, and 
                were registered as of the date of enactment of this Act 
                under an offset program with respect to which the 
                Administrator and the Secretary have made an 
                affirmative determination under paragraph (2) or (3) of 
                section 110(a) or section 110(e); and
                    (C) exceed the activity baseline established under 
                subparagraph (B);
            (2) for use in establishing activity baselines for offset 
        projects of that type, which activity baselines shall be 
        established by the appropriate official to reflect a 
        conservative estimate of business-as-usual performance or 
        practices for the relevant type of activity such that the 
        baseline provides a science-based margin of safety to ensure 
        the emission integrity of offsets calculated in reference to 
        the baseline, including (in the case of an agricultural or 
        forestry offset project) the establishment by the Secretary of 
        a temporary baseline for offset projects of that type to 
        establish a date after which offset credits may be calculated 
        with respect to the baseline that may reflect a continuation of 
        practices in place prior to the adoption of the offset project;
            (3) for use in determining the extent to which greenhouse 
        gas emission reductions achieved by an offset project of that 
        type exceed a relevant activity baseline, including protocols 
        for use in monitoring and accounting for uncertainty; and
            (4) for use in accounting for and mitigating potential 
        leakage, if any, from an offset project of that type, taking 
        uncertainty into account.
    (b) Accounting for Reversals.--
            (1) Accounting.--
                    (A) In general.--For each type of sequestration 
                project listed under section 104, the appropriate 
                official shall prescribe such mechanisms to ensure that 
                any sequestration with respect to which an offset 
                credit is issued under this title results in a net 
                increase in sequestration, and that a full and 
                transparent account is taken of any actual or potential 
                reversal of the sequestration, with an adequate margin 
                of safety for the complete term of an offset project 
                agreement approved under section 106.
                    (B) Minimum mechanisms.--The appropriate official 
                shall prescribe at least 1 of the following mechanisms 
                to meet the requirements of this paragraph:
                            (i) An offsets reserve, pursuant to 
                        paragraph (2).
                            (ii) Insurance that provides for purchase 
                        and provision to the appropriate official for 
                        retirement of a quantity of offset credits or 
                        emission allowances equal in number to the tons 
                        of carbon dioxide equivalents of greenhouse gas 
                        emissions released due to reversal.
                            (iii) Another mechanism that the 
                        appropriate official determines satisfies the 
                        requirements of this title.
            (2) Offsets reserve.--
                    (A) In general.--An offsets reserve referred to in 
                paragraph (1)(B)(i) is a program under which, before 
                issuance of offset credits under this title, the 
                appropriate official shall--
                            (i) subtract and reserve from the quantity 
                        to be issued a quantity of offset credits based 
                        on the risk of reversal; and
                            (ii)(I) hold those reserved offset credits 
                        in the offsets reserve; and
                            (II) register the holding of the reserved 
                        offset credits in the registry established 
                        under section 103(b).
                    (B) Project reversal.--
                            (i) In general.--If a reversal has occurred 
                        with respect to an offset project for which 
                        offset credits are reserved under this 
                        paragraph, the appropriate official shall 
                        remove offset credits from the offsets reserve 
                        and cancel the credits to fully account for the 
                        tons of carbon dioxide equivalent that are no 
                        longer sequestered.
                            (ii) Intentional reversals.--If the 
                        appropriate official determines that a reversal 
                        was intentional, the offset project 
                        representative for the relevant offset project 
                        shall place into the offsets reserve a quantity 
                        of offset credits, or combination of offset 
                        credits and emission allowances, equal in 
                        number to 150 percent of the number of reserve 
                        offset credits that were canceled due to the 
                        reversal pursuant to clause (i).
                    (C) Use of reserved offset credits.--Offset credits 
                placed into the offsets reserve under this paragraph 
                may not be used to comply with other obligations under 
                a Federal law enacted for the purpose of regulating 
                greenhouse gas emissions.
            (3) Carbon agreements and land use flexibility.--
                    (A) Applicability.--
                            (i) In general.--With respect to an 
                        agricultural, forestry, or any other 
                        sequestration practice listed under section 104 
                        that sequesters greenhouse gases, the Secretary 
                        may develop mechanisms in addition to 
                        paragraphs (1) and (2) in order to ensure that 
                        less-than-perpetual sequestration agreements 
                        under this subsection meet the requirements of 
                        this section and maintain the integrity of the 
                        overall emission reduction targets of a Federal 
                        law enacted for the purpose of regulating 
                        greenhouse gas emissions.
                            (ii) Mechanisms.--The mechanisms shall 
                        include--
                                    (I) a specific duration of the 
                                intended sequestration activity;
                                    (II) clear liability for carbon 
                                accounting;
                                    (III) sequential activities;
                                    (IV) adequate monitoring and 
                                accounting systems to maintain the 
                                emission reduction targets;
                                    (V) carbon easements; or
                                    (VI) any other option that meets 
                                the requirements of this section, as 
                                determined by the Secretary.
                    (B) Responsibility for accounting.--To account for 
                the termination of any offset agreement approved under 
                section 106 or the termination of the sequestration 
                activity, the Secretary may allow the agreement to 
                assign liability to any part of the agreement for the 
                purposes of carbon accounting.
    (c) Crediting Periods.--
            (1) In general.--For each offset project type, the 
        appropriate official shall specify a crediting period, and 
        establish provisions for petitions for new crediting periods, 
        in accordance with this subsection.
            (2) Duration.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the crediting period shall be not less than 5 nor 
                greater than 10 years.
                    (B) Forestry projects.--The crediting period for a 
                forestry offset project shall not exceed 30 years.
            (3) Eligibility.--
                    (A) In general.--An offset project shall be 
                eligible to generate offset credits under this title 
                only during the crediting period of the offset project.
                    (B) Remaining eligibility.--Except as provided in 
                paragraph (4), during a crediting period described in 
                subparagraph (A), an offset project shall remain 
                eligible to generate offset credits, subject to the 
                methodologies and project type eligibility list that 
                applied as of the date of project approval under 
                section 106.
            (4) Petition for new crediting period.--
                    (A) In general.--An offset project representative 
                may petition for a new crediting period to commence 
                after termination of a crediting period, subject to the 
                methodologies and project type eligibility list in 
                effect at the time at which the petition is submitted.
                    (B) Timing of submission.--A petition may not be 
                submitted under this paragraph more than 1 year before 
                the end of the pending crediting period.
                    (C) Response.--The appropriate official shall make 
                a determination on the petition in accordance with 
                section 106.
    (d) Emission Reduction Integrity.--In establishing the requirements 
under this section, the appropriate official shall apply conservative 
assumptions or methods to maximize the probability that the emission 
reduction integrity of Federal benchmarks or mandates are not 
compromised.
    (e) Preexisting Methodologies.--In promulgating requirements under 
this section, the appropriate official shall give due consideration to 
methodologies for offset projects existing as of the date of enactment 
of this Act.
    (f) Additional Benefits.--Nothing in this section precludes an 
offset project from meeting the requirements of this section, or from 
approval under section 106, only because the relevant activity under 
section 104 receives an additional payment from another source for an 
ecological service other than emission reductions, including 
conservation program payments.
    (g) Data Collection.--The appropriate official shall collect such 
data as are necessary to assess a range of factors relative to the 
performance and effects of any offset project type.

SEC. 106. APPROVAL.

    (a) Project Petition.--
            (1) In general.--Not later than the date of submission of 
        the first verification report for an offset project under 
        section 107, the offset project representative shall submit to 
        the appropriate official a petition for approval of the offset 
        project.
            (2) Petition requirements.--As part of the regulations 
        promulgated under this title, the appropriate official shall 
        include provisions for, and shall specify, the required 
        components of an offset project approval petition submitted 
        under this subsection, including--
                    (A) designation of an offset project 
                representative; and
                    (B) any other information that the appropriate 
                official considers to be necessary--
                            (i) to determine whether the offset project 
                        meets the established criteria under this 
                        section; and
                            (ii) to meet the purposes and requirements 
                        of this title.
    (b) Approval and Notification.--
            (1) In general.--Not later than 30 days after receiving a 
        complete approval petition under subsection (a), the 
        appropriate official shall--
                    (A)(i) make determinations on whether to approve an 
                offset plan and on the quantity of greenhouse gas 
                emissions that have been reduced or avoided, or 
                greenhouse gases that have been sequestered, by the 
                offset practice in an approved and verified offset 
                project plan; and
                    (ii) notify the offset project developer in writing 
                of the determination; and
                    (B) based on the determination under subparagraph 
                (A)--
                            (i) approve or deny the petition in 
                        writing;
                            (ii) notify the offset project 
                        representative in writing of the determination; 
                        and
                            (iii) if the petition is denied, provide 
                        the reasons for denial.
            (2) Resubmission.--After an offset project is approved, the 
        offset project representative shall not be required to resubmit 
        an approval petition during the crediting period of the offset 
        project.
    (c) Appeal.--The appropriate official shall establish mechanisms 
for appeal and review of determinations made under this section.
    (d) Third-Party Review.--The appropriate official may provide for 
accreditation of independent third parties to provide recommendations 
to the appropriate official on approvals under this section.
    (e) Voluntary Preapproval Review.--
            (1) In general.--The appropriate official may establish a 
        voluntary preapproval review procedure to allow an offset 
        project representative to request the appropriate official to 
        conduct a preliminary eligibility review for an offset project.
            (2) Findings.--Any findings of a review described in 
        paragraph (1) shall not be binding upon the appropriate 
        official.
            (3) Requirements.--The voluntary preapproval review 
        procedure shall require--
                    (A) the offset project representative to submit 
                such basic project information as the appropriate 
                official requires to provide a meaningful review; and
                    (B) a response from the appropriate official not 
                later than 30 days after the date of receipt by the 
                appropriate official of a request for review under this 
                subsection.

SEC. 107. VERIFICATION OF OFFSET PROJECTS.

    (a) In General.--As part of the regulations promulgated under this 
title, the Secretary and the Administrator shall jointly establish 
requirements, including protocols, for verification of the quantity of 
greenhouse gas emission reductions that have resulted from an offset 
project.
    (b) Verification Reports.--
            (1) In general.--The regulations described in subsection 
        (a) shall require an offset project representative to submit a 
        report, prepared by a third-party verifier accredited under 
        subsection (d), providing such information as the appropriate 
        official requires to determine the quantity of greenhouse gas 
        emission reductions resulting from the offset project.
            (2) Schedules.--The appropriate officials shall jointly 
        prescribe schedules for the submission of verification reports 
        under paragraph (1).
            (3) Requirements.--The appropriate official shall specify 
        the required components of a verification report required under 
        subsection (a), including--
                    (A) the name and contact information for the offset 
                project representative for the offset project;
                    (B) the quantity of greenhouse gas emission 
                reductions;
                    (C) the methodologies applicable to the project 
                pursuant to section 105;
                    (D) a certification that the project meets the 
                applicable requirements;
                    (E) a certification establishing that the conflict 
                of interest requirements in the regulations promulgated 
                under this title have been complied with; and
                    (F) any other information that the appropriate 
                official considers to be necessary to achieve the 
                purposes of this title.
    (c) Appeals.--The appropriate official shall establish procedures 
for appeal and review of determinations made under this section.
    (d) Verifier Accreditation.--
            (1) In general.--As part of the regulations promulgated 
        under this title, the appropriate officials shall jointly 
        establish a process and requirements for periodic accreditation 
        of third-party verifiers to ensure that those verifiers are 
        professionally qualified and have no conflicts of interest.
            (2) Standards.--
                    (A) American national standards institute 
                accreditation.--
                            (i) In general.--The appropriate officials 
                        may jointly accredit, or accept for purposes of 
                        accreditation under this subsection, verifiers 
                        accredited under the American National 
                        Standards Institute accreditation program in 
                        accordance with standard 14065 of the 
                        International Organization of Standards.
                            (ii) Requirement.--The appropriate 
                        officials shall accredit, or accept for 
                        accreditation, verifiers under this 
                        subparagraph only if the appropriate official 
                        finds that the American National Standards 
                        Institute accreditation program provides 
                        sufficient assurance that the requirements of 
                        this title will be met.
                    (B) USDA and epa accreditation.--As part of the 
                regulations promulgated under this title, the 
                appropriate officials may jointly establish 
                accreditation standards for verifiers under this 
                subsection, including related training and testing 
                programs and requirements.
            (3) Public accessibility.--Each verifier meeting the 
        requirements for accreditation in accordance with this 
        subsection shall be listed in a publicly accessible database, 
        which shall be maintained and updated jointly by the 
        appropriate officials.
    (e) Additional Technology.--The Administrator and the Secretary may 
coordinate and use available resources of any Federal agency, State 
agency, or other appropriate source that coordinates or collects data 
from any appropriate technology (including data imaging, remote 
sensing, light detection and ranging, or other satellite technologies) 
to verify emission reductions generated under this title.

SEC. 108. ISSUANCE OF OFFSET CREDITS.

    (a) Issuance of Offset Credits.--The Administrator, in consultation 
with the Secretary with regards to domestic agricultural and forestry 
projects, shall issue 1 offset credit to an offset project 
representative for each ton of carbon dioxide equivalent in emission 
reductions from an offset project that the appropriate official has 
verified pursuant to section 107.
    (b) Timing.--Offset credits meeting the criteria described in 
subsection (a) shall be issued by the Administrator not later than 14 
days after the date on which the Administrator receives notice of the 
determination under section 106, including approval and verification 
information.
    (c) Registration.--In the case of domestic agricultural and 
forestry projects the Administrator, in consultation with the 
Secretary, shall assign a unique serial number to and register each 
offset project to be issued under this title pursuant to section 
103(b).

SEC. 109. AUDITS AND REVIEWS.

    (a) In General.--The appropriate officials shall, on an ongoing 
basis, conduct random audits and reviews of offset projects.
    (b) Minimum Audits and Reviews.--For each fiscal year, the 
appropriate officials shall conduct audits and reviews, at minimum, for 
a representative sample of project types, geographical areas, 
verification standards and certified verifiers, and specific 
administrative processes of that offset program.
    (c) Public Availability of Information.--The appropriate officials 
shall make the results of all audits, in the aggregate, and reviews 
conducted under this section available to the public.
    (d) Delegation.--
            (1) In general.--The appropriate official may delegate to a 
        State or tribal government the responsibility for conducting 
        audits under this section if the appropriate official finds 
        that--
                    (A) the program proposed by the State or tribal 
                government provides assurances equivalent to the 
                assurances provided by the auditing program of the 
                appropriate official; and
                    (B) the integrity of the offset program under this 
                title will be maintained.
            (2) Audits by appropriate official.--Nothing in this 
        subsection prevents an appropriate official from conducting any 
        audit the appropriate official considers appropriate.

SEC. 110. EARLY OFFSET SUPPLY.

    (a) Definition of Qualified Early Offset Program.--In this section, 
the term ``qualified early offset program'' means any regulatory or 
voluntary greenhouse gas emission offset program approved under 
subsection (b).
    (b) Program Approval.--
            (1) In general.--The administrator of a regulatory or 
        voluntary greenhouse gas emission offset program may apply to 
        the Administrator and the Secretary for approval as a qualified 
        early offset program under this subsection.
            (2) Determinations.--The Administrator, in conjunction with 
        the Secretary, shall--
                    (A) not later than 30 days after the date of 
                enactment of this Act, establish a process to receive 
                applications received under this subsection; and
                    (B) not later than 180 days after the date of 
                receipt of any application received under this 
                subsection, make a determination on the application.
            (3) Criteria for approval.--The Administrator, in 
        conjunction with the Secretary, shall approve as a qualified 
        early offset program under this subsection any regulatory or 
        voluntary greenhouse gas emission offset program that--
                    (A) was established before January 1, 2009;
                    (B) has developed or approved offset project-type 
                standards, methodologies, and protocols through a 
                public consultation process or a public peer review 
                process;
                    (C) has made available to the public the standards, 
                methodologies, and protocols of the program for 
                emission reduction projects;
                    (D) requires that all emission reductions be 
                verified by a State regulatory agency or an accredited 
                third-party independent verification entity;
                    (E) requires that all issued credits be registered 
                in a publicly accessible registry, with individual 
                serial numbers assigned for each ton of carbon dioxide 
                equivalent emission reductions; and
                    (F) ensures that no credits are issued for 
                activities for which the administrator of the program 
                has funded, solicited, or served as a fund 
                administrator for the development of the project or 
                activity that caused the emission reduction.
            (4) Revocation or disapproval.--The Administrator, in 
        conjunction with the Secretary, may--
                    (A) revoke the approval of a qualified early offset 
                program under this subsection if the program does not 
                meet the criteria described in paragraph (3); or
                    (B) determine that a regulatory or voluntary 
                greenhouse gas emission offset program shall not be 
                considered a qualified early offset program with 
                respect to a particular project type if, as determined 
                by the Administrator, in conjunction with the 
                Secretary, the standard, methodology, or protocol of 
                the program for that project type fails to ensure that 
                credits only will be provided for emission reductions 
                that are measurable, additional, verifiable, and 
                enforceable.
    (c) Offset Credits.--Subject to subsections (d), (e), and (f), the 
Administrator, in conjunction with the Secretary, shall issue 1 offset 
credit for each ton of carbon dioxide equivalent in emission reductions 
achieved--
            (1) under an offset project that commenced after January 1, 
        2001; and
            (2) for which a credit was issued under a qualified early 
        offset program.
    (d) Ineligible Credits.--Subsection (b) shall not apply to offset 
credits that have expired or have been retired, canceled, or used for 
compliance under a program established under State or tribal law 
(including a regulation).
    (e) Limitation.--Notwithstanding subsection (c)(1), offset credits 
shall be issued under this section only for a crediting period pursuant 
to section 105(c) that--
            (1) commences--
                    (A) not earlier than January 1, 2001; and
                    (B) not later than the date on which the 
                regulations for methodologies promulgated under this 
                title take effect; and
            (2) does not exceed the shorter of--
                    (A) 10 years; or
                    (B) the established crediting period for the 
                project (in accordance with the rules of the qualified 
                early offset program).
    (f) Preclusion of Double Payment.--Emission reductions shall not 
receive credits under this section if the emission reductions--
            (1) occurred prior to January 1, 2009; and
            (2) were awarded payments pursuant to the authority of the 
        Secretary under the carbon conservation program established 
        under title II.
    (g) Retirement of Credits.--The Administrator shall ensure, to the 
maximum extent practicable, that offset credits described in subsection 
(c) are retired for purposes of use under a program described in 
subsection (d).
    (h) International Reduced Deforestation Projects.--
            (1) In general.--Subject to paragraphs (2) and (3), the 
        Administrator shall issue under this subsection 1 offset credit 
        for each ton of carbon dioxide equivalent emissions reduced by 
        an offset project that--
                    (A) is an international reduced deforestation 
                project;
                    (B) started after January 1, 2001;
                    (C) not later than 2 years after the date of 
                enactment of this Act, is registered with a regulatory 
                or voluntary greenhouse gas emission offset program 
                that the Administrator determines--
                            (i) meets all of the requirements of 
                        subsection (b); and
                            (ii) was established under State law 
                        (including regulations) or designated by a 
                        State as an offset registry prior to January 1, 
                        2009; and
                    (D) is issued offset credits for the emission 
                reductions achieved by the project under an offset 
                program for which the Administrator has made an 
                affirmative determination under subparagraph (C).
            (2) Inconsistency with certain purposes.--Paragraph (1) 
        shall not apply if the Administrator makes a determination, not 
        later than 90 days after the date on which public notice is 
        provided of a project petition, that a project is inconsistent 
        with the policies established under any Federal law enacted for 
        the purpose of regulating greenhouse gas emissions to protect 
        the rights and interests of local communities and to protect 
        forest ecosystems.
            (3) Limitation.--Notwithstanding subsection (e), offset 
        credits shall be issued under this subsection only for 
        greenhouse gas emission reductions that occur under an eligible 
        international reduced deforestation project during the period 
        beginning on January 1, 2009, and ending on--
                    (A) in the case of a project located in a country 
                that accounts for less than 1 percent of the global 
                greenhouse gas emissions and less than 3 percent of 
                global forest-sector and land use change greenhouse gas 
                emissions, December 31 of the first full calendar year 
                following the effective date of regulations promulgated 
                to carry out this title; or
                    (B) in the case of a project located in a country 
                that does not meet the criteria described in 
                subparagraph (A), the date that is 2 years after the 
                date of enactment of this Act.

SEC. 111. PROGRAM REVIEW AND REVISION.

    At least once every 5 years, the Administrator, in consultation 
with the Secretary, shall review, based on new or updated information 
and taking into consideration the recommendations of the Advisory 
Committee--
            (1) the list of eligible project types established under 
        section 104;
            (2) the methodologies established, including specific 
        activity baselines, under section 105;
            (3) the reversal requirements and mechanisms established or 
        prescribed under section 105;
            (4) measures to improve the accountability of the offsets 
        program; and
            (5) any other requirements established under this title to 
        ensure the environmental integrity and effective operation of 
        this title.

SEC. 112. ADDITIONAL REGULATORY STANDARDS FOR EMISSION REDUCTIONS.

    (a) In General.--Nothing in this title authorizes the Administrator 
to promulgate any additional regulatory standards for emission 
reductions from any project or activity (including emission reductions 
from any non-fossil fuel agricultural source) carried out under this 
title.
    (b) Allowance or Credit Obligations.--No person shall be required 
to hold allowances or credits for emissions resulting from the use of 
gas as an energy source if the gas is derived from a domestic methane 
offset project approved under this title.
    (c) Relationship to Other Laws.--Notwithstanding any other 
provision of law, emissions that are limited under this title shall not 
be subject to any other limitation that is established under a Federal 
law enacted or applied for the purpose of regulating greenhouse gas 
emissions.

SEC. 113. USE OF CREDITS FOR COMPLIANCE PURPOSES.

    The Administrator shall promulgate regulations to require that, for 
each calendar year beginning with the first fiscal year in which the 
limitation on the emission of greenhouse gases under a Federal law 
enacted for the purpose of regulating greenhouse gas emissions takes 
effect, owners and operators of facilities that are subject to 
regulation under that law may satisfy the allowance submission 
requirements of the owners and operators under that law by submitting 
credits generated pursuant to this title.

                 TITLE II--CARBON CONSERVATION PROGRAM

SEC. 201. DEFINITIONS.

    In this title:
            (1) Fund.--The term ``Fund'' means the Carbon Conservation 
        Fund established under section 203.
            (2) Program.--The term ``program'' means the carbon 
        conservation program established under section 202.
            (3) Secretaries.--The term ``Secretaries'' means the 
        Secretary of Agriculture and Secretary of the Interior, as 
        appropriate.

SEC. 202. CARBON CONSERVATION PROGRAM.

    (a) In General.--The Secretary of Agriculture shall establish, and 
jointly administer with the Secretary of the Interior, a carbon 
conservation program for the purpose of promoting greenhouse gas 
emissions reduction or carbon sequestration.
    (b) Forestry Activities.--The Secretary of Agriculture shall 
designate the Chief of the Forest Service to carry out all forestry-
related components of the program.
    (c) Purposes.--
            (1) In general.--In carrying out the program, the 
        Secretaries shall provide incentives to landowners or grazing 
        contractor holders to carry out projects or activities that 
        reduce greenhouse gas emissions or sequester or permanently 
        store carbon.
            (2) Administration.--In administering the program, the 
        Secretaries shall ensure that projects or activities conducted 
        under this title--
                    (A) do not receive offset credits for the same 
                activity under title I;
                    (B) reward the continuation of practices by early 
                adopters of conservation practices (including no-till 
                agricultural practices) that provide carbon 
                sequestration benefits;
                    (C) support the development of new methodologies 
                for landowners to participate in offset projects under 
                title I;
                    (D) ensure that individuals and entities that took 
                action prior to the implementation of the offset 
                program under title I, and do not qualify for early 
                offset credits under section 110, are not placed at a 
                competitive disadvantage;
                    (E) improve management of privately owned 
                agricultural land, grassland, and forest land that 
                results in an increase in carbon sequestration;
                    (F) avoid conversion of land (including native 
                grassland, native prairie, rangeland, cropland, or 
                forest land) that would result in an increase of 
                greenhouse gas emissions or a loss of carbon 
                sequestration; and
                    (G) encourage improvements and management practices 
                that include sequestration benefits on Federal land and 
                private land.
    (d) Methods.--
            (1) In general.--In carrying out the program, the 
        Secretaries shall provide incentives for projects or activities 
        that reduce greenhouse gas emissions or sequester carbon 
        through--
                    (A) conservation easements;
                    (B) sequestration contracts;
                    (C) timber harvest or grazing contracts with the 
                Department of Agriculture or the Department of the 
                Interior, as appropriate; or
                    (D) any combination of the methods described in 
                this paragraph.
            (2) Ineligibility for offset credits.--Projects or 
        activities undertaken as part of the program shall not be 
        eligible for offset credits under title I for the duration of 
        the projects or activities.
    (e) Conservation Easements.--
            (1) In general.--The Secretary of Agriculture shall enroll 
        acreage into the program through the use of permanent 
        easements.
            (2) Requirements.--To be eligible for enrollment under this 
        title, conservation easements established under this subsection 
        shall--
                    (A) provide a measurable carbon sequestration 
                benefit; and
                    (B) meet the requirements of part VI of subchapter 
                B of chapter 1 of subtitle A of the Internal Revenue 
                Code of 1986 and section 170(h)(4) of that Code.
            (3) Priority.--In selecting projects for conservation 
        easements, the Secretary of Agriculture shall provide a 
        priority for conservation easements that sequester carbon and 
        protect forested land or working forest land, or protect native 
        prairie or native grassland, within the boundary of a working 
        farm or ranch.
    (f) Carbon Sequestration Contracts.--
            (1) In general.--The Secretary of Agriculture may offer 
        carbon sequestration contracts under the program for a period 
        of 10 years to farmers, ranchers, and forest owners who perform 
        projects or activities to reduce greenhouse gas emissions or 
        sequester carbon.
            (2) Withdrawal.--A nonforestry contract holder may withdraw 
        from a contract under this subsection without penalty after 5 
        years.
            (3) Compensation.--The amount of compensation provided 
        under a contract under this subsection shall be commensurate 
        with the emissions reductions obtained or avoided and the 
        duration of the reductions.
            (4) Priority.--In selecting projects under this subsection 
        during each of fiscal years 2012 through 2015, the Secretary of 
        Agriculture shall provide a priority for--
                    (A) contracts entered into with early adopters of 
                conservation practices (such as no-till agricultural 
                practices), improved forest management, or other 
                greenhouse gas emissions reduction projects; and
                    (B) contracts that sequester the most carbon on a 
                per acre basis.
            (5) Contract.--A contract under this subsection shall 
        specify--
                    (A) the eligible practices that will be undertaken;
                    (B) the acreage of eligible land on which the 
                practices will be undertaken;
                    (C) the agreed rate of compensation per acre; and
                    (D) a schedule to verify that the terms of the 
                contract have been fulfilled.
            (6) Future reductions.--If the term of a contract for a 
        sequestration project under this subsection has expired, future 
        reductions under the project may be eligible to receive carbon 
        offset credits if the project and associated reductions meet 
        all applicable offsets criteria under title I.
            (7) Reversals.--In developing regulations for carbon 
        sequestration contracts under this subsection, the Secretary of 
        Agriculture shall specify requirements to address intentional 
        or unintentional reversal of carbon sequestration during the 
        contract period.
    (g) Incentives in Timber Harvest Contracts.--
            (1) In general.--The Secretaries shall offer financial 
        incentives under the program through timber harvest contracts 
        entered into by the Forest Service or the Bureau of Land 
        Management (as appropriate) for projects or management 
        activities that sequester carbon or reduce greenhouse gas 
        emissions.
            (2) Compensation.--The amount of compensation provided 
        under this subsection shall be commensurate with--
                    (A) the emissions reductions obtained or avoided; 
                and
                    (B) the estimate of the cost of the project or 
                activities undertaken.
    (h) Incentives in Grazing Contracts.--
            (1) In general.--The Secretaries shall offer incentives to 
        leaseholders through grazing contracts entered into by the 
        Forest Service or the Bureau of Land Management (as 
        appropriate) for projects or activities that sequester carbon 
        or reduce greenhouse gas emissions.
            (2) Compensation.--The amount of compensation provided 
        under this subsection shall be commensurate with--
                    (A) the emissions reductions obtained or avoided; 
                and
                    (B) the estimate of the cost of the project or 
                activities undertaken.
    (i) Distribution of Amounts.--Of the amounts provided to carry out 
the program for a fiscal year, at least 30 percent of the amount shall 
be used for conservation easements described in subsection (e).
    (j) Program Measurement, Monitoring, and Reporting Requirements.--
            (1) In general.--The Secretaries shall submit to the 
        Administrator of the Environmental Protection Agency annual 
        reports that describe--
                    (A) the total number of tons of carbon dioxide 
                sequestered or the total number of tons of emissions 
                avoided under the program through conservation 
                easements, sequestration contracts, or other methods on 
                an annual and cumulative basis;
                    (B) any reversals of sequestration; and
                    (C) the total number of acres enrolled in the 
                program by method and a State-by-State summary of the 
                data.
            (2) Public availability.--The Administrator of the 
        Environmental Protection Agency shall make each report required 
        under this subsection available to the public through the 
        website of the Environmental Protection Agency.
    (k) Coordination.--
            (1) Secretary of agriculture.--The Secretary of Agriculture 
        shall coordinate activities under the program with the 
        activities of the Secretary of Agriculture in carrying out--
                    (A) the conservation reserve program established 
                under subchapter B of chapter 1 of subtitle D of title 
                XII of the Food Security Act of 1985 (16 U.S.C. 3831 et 
                seq.);
                    (B) the wetlands reserve program established under 
                subchapter C of chapter 1 of subtitle D of title XII of 
                that Act (16 U.S.C. 3837 et seq.);
                    (C) the farmland protection program established 
                under subchapter C of chapter 2 of subtitle D of title 
                XII of that Act (16 U.S.C. 3838h et seq.) (commonly 
                known as the ``Farm and Ranch Lands Protection 
                Program'');
                    (D) the grassland reserve program established under 
                subchapter D of chapter 2 of subtitle D of title XII of 
                that Act (16 U.S.C. 3838n et seq.);
                    (E) the State and private forestry programs of the 
                Forest Service;
                    (F) the healthy forests reserve program established 
                under section 501 of the Healthy Forests Restoration 
                Act of 2003 (16 U.S.C. 6571); and
                    (G) other applicable programs.
            (2) Secretary of the interior.--The Secretary of the 
        Interior shall coordinate activities under the program with the 
        activities of the Secretary of the Interior in carrying out--
                    (A) programs funded through the Land and Water 
                Conservation Fund Act of 1965 (16 U.S.C. 460l-4 et 
                seq.);
                    (B) any applicable climate adaptation programs; and
                    (C) other applicable programs.
    (l) Reviews.--
            (1) In general.--Not later than 5 years after the date of 
        enactment of this Act and every 5 years thereafter, the 
        Secretaries shall--
                    (A) conduct a review of the activities carried out 
                under this title; and
                    (B) make any appropriate changes in the program, in 
                a manner consistent with this section, based on the 
                findings of the review.
            (2) Review.--Each review shall include a review of--
                    (A) total emissions reductions and sequestration 
                achieved by activity type;
                    (B) the net effect on average farm income by 
                activity type;
                    (C) the potential for future emissions reductions 
                and sequestration by activity type; and
                    (D) recommended changes to the program based on the 
                review.

SEC. 203. CARBON CONSERVATION FUND.

    (a) Establishment.--There is established in the Treasury a separate 
account, to be known as the ``Carbon Conservation Fund'', to carry out 
this title.
    (b) Availability.--All amounts deposited into the Fund shall be 
available without further appropriation or fiscal year limitation.
    (c) Use.--The Secretary shall use amounts in the Fund to carry out 
this title.

                TITLE III--RURAL CLEAN ENERGY RESOURCES

SEC. 301. FINDINGS.

    Congress finds that--
            (1) lifecycle greenhouse gas emissions associated with the 
        production and use of biofuels, bioproducts, and bioenergy may 
        be significantly lower than the emissions associated with the 
        production and use of fossil fuels;
            (2) the United States has the potential to significantly 
        increase the production and use of biofuels and bioenergy;
            (3) expanding the production and use of biofuels and 
        bioenergy offers a significant opportunity for rural economic 
        development and enhancing national energy security; and
            (4) several programs authorized or funded under the Food, 
        Conservation, and Energy Act of 2008 (7 U.S.C. 8701 et seq.) 
        are designed to accelerate the development and deployment of 
        technologies for expeditiously expanding domestic biofuels and 
        bioenergy production.

SEC. 302. BIOREFINERY ASSISTANCE.

    Of the amounts in the Rural Clean Energy Resources Fund established 
under section 305, the Secretary shall use--
            (1) not less than 20 percent to provide grants under 
        section 9003 of the Farm Security and Rural Investment Act of 
        2002 (7 U.S.C. 8103); and
            (2) not less than 60 percent to provide loan guarantees 
        under that section.

SEC. 303. REPOWERING ASSISTANCE.

    Section 9004 of the Farm Security and Rural Investment Act of 2002 
(7 U.S.C. 8104) is amended--
            (1) by redesignating subsections (a) through (d) as 
        subsections (b) through (e), respectively;
            (2) by inserting after the section heading the following:
    ``(a) Definition of Eligible Entity.--In this section:
            ``(1) In general.--The term `eligible entity' means--
                    ``(A) a biorefinery; or
                    ``(B) a power plant or manufacturing facility 
                that--
                            ``(i) has a combined thermal and electrical 
                        energy conversion capacity of not greater than 
                        75 megawatts; and
                            ``(ii) is located in a rural area (as 
                        defined in section 343(a) of the Consolidated 
                        Farm and Rural Development Act (7 U.S.C. 
                        1991(a))).
            ``(2) Exclusion.--The term `eligible entity' does not 
        include an energy-intensive trade-exposed facility.'';
            (3) in subsection (b) (as redesignated by paragraph (1))--
                    (A) by striking ``In General'' and inserting 
                ``Program''; and
                    (B) by striking ``biorefineries'' each place it 
                appears and inserting ``eligible entities''; and
            (4) in subsections (c) and (d) (as so redesignated)--
                    (A) by striking ``a biorefinery'' each place it 
                appears and inserting ``an eligible entity''; and
                    (B) by striking ``biorefinery'' each place it 
                appears and inserting ``eligible entity''.

SEC. 304. RURAL ENERGY FOR AMERICA PROGRAM.

    (a) In General.--Of the amounts in the Rural Clean Energy Resources 
Fund established under section 305, the Secretary shall use such funds 
as are appropriate to carry out the Rural Energy for America Program 
under section 9007 of the Farm Security and Rural Investment Act of 
2002 (7 U.S.C. 8107).
    (b) Limitation on Grants.--Section 9007(c)(4)(A) of the Farm 
Security and Rural Investment Act of 2002 (7 U.S.C. 8107(c)(4)(A)) is 
amended by striking ``25 percent'' and inserting ``50 percent''.

SEC. 305. RURAL CLEAN ENERGY RESOURCES FUND.

    (a) Establishment.--There is established in the Treasury a separate 
account, to be known as the ``Rural Clean Energy Resources Fund'', to 
carry out this title and title IV.
    (b) Availability.--All amounts deposited into the Fund shall be 
available without further appropriation or fiscal year limitation.
    (c) Use.--The Secretary shall use amounts in the Fund to carry out 
this title and title IV.

    TITLE IV--AGRICULTURE AND FORESTRY RESEARCH FOR GREENHOUSE GAS 
                               MITIGATION

SEC. 401. FINDINGS.

    Congress finds that--
            (1) as of the date of enactment of this Act, the 
        agricultural and forestry sectors of the United States extract 
        the equivalent of about 12 percent of the annual greenhouse gas 
        emissions of the United States through carbon dioxide 
        absorption from the atmosphere;
            (2) that percentage can be significantly increased through 
        a number of activities that increase carbon sequestration in 
        soils or forests;
            (3) agriculture and forestry are experiencing the effects 
        of global warming, which are expected to increase; and
            (4) adaptation practices to mitigate the effects of global 
        warming are needed to sustain agricultural and forest 
        productivity and health.

SEC. 402. RESEARCH AND DEMONSTRATION PROGRAM.

    (a) In General.--The Secretary shall carry out research and 
demonstration activities regarding--
            (1) approaches to sequestering carbon through agricultural, 
        grazing, and forestry practices, including quantification of 
        sequestration effects;
            (2) approaches to reducing methane emissions associated 
        with agricultural production (including livestock and crop 
        production), including quantification of those reductions;
            (3) approaches to reducing nitrous oxide emissions 
        associated with agricultural production (including crop and 
        livestock production), including quantification of those 
        reductions;
            (4) approaches to adaptation of agriculture and forestry 
        practices to the effects of global warming in order to maintain 
        productivity and natural resources;
            (5) new approaches to soil carbon sequestration, such as 
        the production of biochar and the use of biochar as a soil 
        conditioner;
            (6) approaches to help specialty crop producers to reduce 
        net greenhouse gas emissions or sequester carbon; and
            (7) methods to reduce uncertainties in estimating 
        greenhouse gas emission reductions and carbon sequestration 
        through agricultural and forestry activities.
    (b) Fund.--Of the amounts in the Rural Clean Energy Resources Fund 
established under section 305, the Secretary shall use such funds as 
are appropriate to carry out this section.
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