II 

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. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Clean Energy Partnerships Act of 2009’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—OFFSET CREDIT PROGRAM FOR DOMESTIC EMISSION 

REDUCTIONS 


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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. 

1 TITLE I—OFFSET CREDIT PRO2 GRAM FOR DOMESTIC EMIS3 SION REDUCTIONS 

4 SEC. 101. DEFINITIONS. 

5 In this title: 

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

7 the National Academy of Sciences. 

8 (2) ADMINISTRATOR.—The term ‘‘Adminis9 trator’’ means the Administrator of the Environ10 mental Protection Agency. 


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1 (3) ADVISORY COMMITTEE.—The term ‘‘Advi2 sory Committee’’ means the Greenhouse Gas Emis3 sion Reduction and Sequestration Advisory Com4 mittee established under section 102(a)(1). 

5 (4) APPROPRIATE OFFICIAL.—The term ‘‘ap6 propriate official’’ means— 

7 (A) the Secretary, with respect to any do8 mestic agriculture or forestry offset project; and 

9 (B) the Administrator, with respect to all 

10 other offset projects. 

11 (5) EMISSION REDUCTION.—The term ‘‘emis12 sion reduction’’ means the reduction, avoidance, de13 struction, or sequestration of greenhouse gas emis14 sions. 

15 (6) OFFSET PROJECT.—The term ‘‘offset 

16 project’’ means a project or activity that achieves 

17 emission reductions, and for which offset credits are 

18 issued under this title. 

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

20 the Secretary of Agriculture. 

21 SEC. 102. ADVISORY COMMITTEE. 

22 (a) ESTABLISHMENT.— 

23 (1) ADVISORY COMMITTEE.—The Secretary and 

24 the Administrator shall jointly establish an advisory 

25 committee, to be known as the ‘‘Greenhouse Gas 


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1 Emission Reduction and Sequestration Advisory 

2 Committee’’, to provide scientific and technical ad3 vice on the establishment and implementation of an 

4 offset project program with respect to offset projects 

5 under the jurisdiction of the Secretary and the Ad6 ministrator. 

7 (2) AUTHORITY.—In addition to the authority 

8 of this section, the Administrator and the Secretary 

9 shall use existing authority under, as appropriate— 

10 (A) the Clean Air Act (42 U.S.C. 7401 et 

11 seq.); 

12 (B) the Federal Advisory Committee Act 

13 (5 U.S.C. App.); and 

14 (C) section 1245 of the Food Security Act 

15 of 1985 (16 U.S.C. 3845). 

16 (b) MEMBERSHIP.— 

17 (1) IN GENERAL.—The Advisory Committee 

18 shall be composed of not less than 9 and not more 

19 than 15 individuals with relevant education, train20 ing, and experience, selected jointly by the Secretary 

21 and the Administrator, who shall be— 

22 (A) identified by the Academy; 

23 (B) representative of land grant univer24 sities, academia, business, nongovernmental orVerDate Nov 24 2008 01:16 Nov 05, 2009 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2729.IS S2729

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1 ganizations, and Federal, State, and local gov2 ernment; or 

3 (C) experts with background and experi4 ence in agriculture or forestry. 

(2) REQUIREMENT.—Not more than 1 5 ⁄3 of the 

6 members of the Advisory Committee may be officers 

7 or employees (including contractors) of any Federal 

8 agency. 

9 (3) TERM.—A member— 

10 (A) shall be appointed to the Advisory 

11 Committee for a term of 3 years (except for ini12 tial terms for which members may be appointed 

13 for a term of 4 or 5 years to allow staggering); 

14 and 

15 (B) may be reappointed for 1 additional 3- 

16 year term (which may directly follow a first 

17 term), at the discretion of the Secretary and 

18 the Administrator. 

19 (4) VACANCIES.—A vacancy on the Advisory 

20 Committee— 

21 (A) shall not affect the powers of the Advi22 sory Committee; and 

23 (B) shall be filled in the same manner as 

24 the original appointment was made. 


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1 (5) INITIAL MEETING.—Not later than 30 days 

2 after the date on which all members of the Advisory 

3 Committee have been appointed, the Advisory Com4 mittee shall hold the initial meeting of the Advisory 

5 Committee. 

6 (6) MEETINGS.—The Advisory Committee shall 

7 meet at the call of the Chairperson, with the ap8 proval of the designated Federal officer. 

9 (7) QUORUM.—A majority of the members of 

10 the Advisory Committee shall constitute a quorum, 

11 but a lesser number of members may hold hearings. 

12 (8) CHAIRPERSON.—The Secretary and the Ad13 ministrator shall jointly select a Chairperson of the 

14 Advisory Committee from among the members of the 

15 Advisory Committee. 

16 (c) EXPERTISE.—On approval of the Secretary and 

17 the Administrator, the Advisory Committee may seek out18 side expertise, as necessary, and form subcommittees or 

19 workgroups for any purpose consistent with this section. 

20 (d) DUTIES.— 

21 (1) REPORTS ON OFFSET PROJECT CAT22 EGORIES.— 

23 (A) IN GENERAL.—Not later than 180 

24 days after the date on which all initial members 

25 of the Advisory Committee have been appointed, 


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1 the Advisory Committee shall submit to the 

2 Secretary and the Administrator and make 

3 available to the public a report containing rec4 ommendations regarding the types of offset 

5 project categories pursuant to section 104, and 

6 relevant scientific data regarding practices for 

7 those categories, that should be considered to 

8 be eligible to generate offset credits under this 

9 title. 

10 (B) FACTORS.—In developing the rec11 ommendations described in subparagraph (A), 

12 the Advisory Committee shall take into ac13 count— 

14 (i) the extent to which, as of the date 

15 of submission of the report, the project or 

16 activity types within each category— 

17 (I) are required by law; or 

18 (II) represent business-as-usual 

19 practices for an industry sector or fa20 cility type; 

21 (ii) the potential for accurate quan22 tification of net emission reductions; 

23 (iii) any corresponding environmental 

24 benefits or disadvantages; and 


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1 (iv) the potential supply of emission 

2 reductions available from the category. 

3 (C) CATEGORIES FOR CONSIDERATION.— 

4 In determining which categories of activities to 

5 recommend under subparagraph (A), the Advi6 sory Committee shall consider, at a minimum, 

7 with respect to each category and the jurisdic8 tion of the Secretary and Administrator, as ap9 propriate, project types that are listed under 

10 section 104. 

11 (D) METHODOLOGIES.—For each rec12 ommended offset project category, the Advisory 

13 Committee may recommend 1 or more meth14 odologies for use with any project type. 

15 (2) REPORTS ON EMISSION REDUCTION INTEG16 RITY.— 

17 (A) IN GENERAL.—Not later than 180 

18 days before the date of promulgation of any 

19 regulations relating to offsets required under a 

20 Federal law enacted for the purpose of regu21 lating greenhouse gas emissions, and periodi22 cally thereafter, using the best available science, 

23 the Advisory Committee shall jointly provide to 

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1 taining priority recommendations on how to en2 sure the emission reduction integrity of the off3 set projects under this title, including with re4 gard to— 

5 (i) quantifying credits for net emission 

6 reductions resulting from offset projects; 

7 (ii) determining additionality, includ8 ing— 

9 (I) the application of standards 

10 that are specific to each project type; 

11 and 

12 (II) the use of methodologies that 

13 account for business-as-usual prac14 tices for an industry or facility type; 

15 (iii) accounting for economic and 

16 emission leakage associated with project 

17 activities, including the application of sec18 tor-specific leakage factors in order to re19 flect net changes in emissions and seques20 tration resulting from the project; 

21 (iv) accounting for uncertainty and 

22 application of uncertainty factors; 

23 (v) methods to measure, verify, and 

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1 cient scientific integrity to meet the objec2 tives of the program; 

3 (vi) establishing appropriate insurance 

4 requirements, buffer reserves, or other op5 tions to address the risk of reversals by 

6 project type and conditions; 

7 (vii) minimizing administrative costs 

8 and burdens on project representatives; 

9 and 

10 (viii) meeting any other criteria the 

11 Advisory Committee recommends be ap12 plied to ensure that projects assist in meet13 ing the overall objectives of a Federal law 

14 enacted for the purpose of regulating 

15 greenhouse gas emissions. 

16 (B) RESPONSE.—Not later than 180 days 

17 after the date of receipt of a report under sub18 paragraph (A), the Secretary and the Adminis19 trator shall jointly make available to the public 

20 a response to the report. 

21 (e) POWERS.— 

22 (1) HEARINGS.—The Advisory Committee may, 

23 with the consent of the Secretary and the Adminis24 trator, hold such hearings, meet and act at such 

25 times and places, take such testimony, and receive 


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1 such evidence as the Advisory Committee considers 

2 advisable to carry out this section. 

3 (2) INFORMATION FROM FEDERAL AGENCIES.— 

4 (A) IN GENERAL.—The Advisory Com5 mittee may secure directly from a Federal agen6 cy such information as the Advisory Committee 

7 considers necessary to carry out this section. 

8 (B) PROVISION OF INFORMATION.—On re9 quest of the Chairperson of the Advisory Com10 mittee, the head of the agency shall provide the 

11 information to the Advisory Committee. 

12 (3) POSTAL SERVICES.—The Advisory Com13 mittee may use the United States mails in the same 

14 manner and under the same conditions as other 

15 agencies of the Federal Government. 

16 (f) ADVISORY COMMITTEE PERSONNEL MATTERS.— 

17 (1) COMPENSATION OF MEMBERS.— 

18 (A) NON-FEDERAL EMPLOYEES.—A mem19 ber of the Advisory Committee who is not an 

20 officer or employee of the Federal Government 

21 shall be compensated at a rate equal to the 

22 daily equivalent of the annual rate of basic pay 

23 prescribed for level IV of the Executive Sched24 ule under section 5315 of title 5, United States 

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1 ing which the member is engaged in the per2 formance of the duties of the Advisory Com3 mittee. 

4 (B) FEDERAL EMPLOYEES.—A member of 

5 the Advisory Committee who is an officer or 

6 employee of the Federal Government shall serve 

7 without compensation in addition to the com8 pensation received for the services of the mem9 ber as an officer or employee of the Federal 

10 Government. 

11 (2) TRAVEL EXPENSES.—A member of the Ad12 visory Committee shall be allowed travel expenses, 

13 including per diem in lieu of subsistence, at rates 

14 authorized for an employee of an agency under sub15 chapter I of chapter 57 of title 5, United States 

16 Code, while away from the home or regular place of 

17 business of the member in the performance of the 

18 duties of the Advisory Committee. 

19 SEC. 103. ESTABLISHMENT OF PROGRAM TO CREDIT EMIS20 SION REDUCTIONS FROM UNCAPPED DOMES21 TIC SOURCES AND SINKS. 

22 (a) PROGRAM.— 

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

24 the date of enactment of this Act, the Administrator 

25 and the Secretary shall, in accordance with this title, 


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1 establish a program to govern the creation of credits 

2 from emission reductions from uncapped domestic 

3 sources and sinks while ensuring that offset credits 

4 represent additional greenhouse gas emission reduc5 tions in accordance with section 105. 

6 (2) EMISSION REDUCTION INTEGRITY; RULE7 MAKING.—In carrying out the program under this 

8 section, the Administrator and the Secretary shall, 

9 to the maximum extent practicable— 

10 (A) protect the emission reduction integ11 rity of the program while minimizing burdens 

12 on offset project representatives; 

13 (B) prioritize rulemaking for activities that 

14 present the fewest technical challenges and 

15 greatest certainty of net atmospheric benefit, 

16 considering the recommendations of— 

17 (i) the Advisory Committee submitted 

18 under section 102; 

19 (ii) the Department of the Interior; 

20 (iii) the Secretary of Commerce, with 

21 respect to any coastal, ocean or marine off22 set project; and 

23 (iv) other Federal agencies; 

24 (C) ensure that consistent requirements 

25 and procedures apply in the case of offset 


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1 project types that fall within the respective pur2 views of the Administrator and the Secretary; 

3 and 

4 (D) ensure that the program meets the re5 quirements of section 105. 

6 (b) REGISTRY.—Not later than 1 year after the date 

7 of enactment of this Act, the Administrator, in consulta8 tion with the Secretary and the heads of other appropriate 

9 Federal agencies, shall establish a registry (or expand an 

10 established emission allowance registry) for use in record11 ing approved credits issued under this section to reflect 

12 emission reductions from uncapped sources and sinks. 

13 (c) DEPARTMENT OF AGRICULTURE ROLE.—In addi14 tion to the duties described in subsection (a) and section 

15 1245 of the Food Security Act of 1985 (16 U.S.C. 3845), 

16 the Secretary shall, with respect to relevant or appropriate 

17 projects relating to emission reductions from uncapped 

18 sources and sinks in agriculture and forestry— 

19 (1) gather inventory data on carbon stocks and 

20 fluxes to inform rulemaking with respect to agricul21 tural and forestry sectors; 

22 (2) administer as the lead agency the duties 

23 prescribed under sections 104, 105, 106, and 109 

24 for agricultural and forestry offset projects; 


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1 (3) prepare the Forest Service, the Natural Re2 sources Conservation Service, the Farm Service 

3 Agency, and other applicable entities to make avail4 able to landowners and project representatives car5 bon sequestration data and other information on ag6 ricultural and forest land that are necessary to as7 sist landowners and project representatives in esti8 mating carbon sequestration rates by land area or 

9 appropriate region, forest type, soil type, and other 

10 appropriate factors; 

11 (4) make available technical assistance to land12 owners undertaking activities in preparation for the 

13 sale of carbon credits derived from activities on the 

14 land of the landowners, including work and opportu15 nities with aggregators and third-party verifiers pur16 suant to section 107; 

17 (5) take into consideration expanding existing 

18 training and accreditation programs of the Natural 

19 Resources Conservation Service for third-party tech20 nical service providers to provide training and ac21 creditation for third-party verifiers pursuant to sec22 tion 107; 

23 (6) conduct, as appropriate, outreach, edu24 cation, and training through the extension services 

25 of land-grant colleges and universities; and 


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1 (7) promulgate such regulations as are nec2 essary to carry out the functions of the Secretary 

3 under this title. 

4 SEC. 104. ELIGIBLE PROJECTS. 

5 (a) LIST OF ELIGIBLE PROJECT TYPES.—Each ap6 propriate official shall establish and maintain a list of 

7 types of offset projects eligible to generate offset credits 

8 under this title. 

9 (b) INITIAL LIST OF PROJECT TYPES.— 

10 (1) IN GENERAL.—Each appropriate official 

11 shall establish an initial list of eligible project types 

12 under subsection (a). 

13 (2) EMISSION REDUCTION ACTIVITIES.—The 

14 appropriate official shall include on the list required 

15 under this subsection, at a minimum, activities that 

16 provide emission reductions and meet the require17 ment of section 105, including— 

18 (A) methane collection at mines, landfills, 

19 and natural gas systems; 

20 (B) fugitive emissions from the oil and gas 

21 sector that reduce greenhouse gas emissions 

22 that would otherwise have been flared or vent23 ed; 

24 (C) nonlandfill projects that involve collec25 tion, combustion, or avoidance of emissions 


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1 from organic waste streams that would have 

2 otherwise emitted methane into the atmosphere, 

3 including manure management, composting, or 

4 anaerobic digestion projects; 

5 (D) projects involving afforestation or re6 forestation of acreage not forested as of Janu7 ary 1, 2009; 

8 (E) forest management resulting in an in9 crease in forest carbon stores, including har10 vested wood products; 

11 (F) projects that capture and geologically 

12 sequester uncapped greenhouse gas emissions 

13 with or without enhanced oil or methane recov14 ery in active or depleted oil, carbon dioxide, 

15 natural gas reservoirs or other geological forma16 tions; 

17 (G) recycling and waste minimization 

18 projects; 

19 (H) projects to abate the production of ni20 trous oxide at nitric acid production facilities 

21 and other stationary sources; 

22 (I) projects for biochar production and use; 

23 (J) projects that destroy ozone-depleting 

24 substances that have been phased out of pro25 duction; 


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1 (K) projects in communities reliant on 

2 small, isolated electricity grids involving conver3 sion from diesel to renewable sources of energy, 

4 including electricity generation facilities with 

5 emissions below required levels for compliance 

6 with any limitation on district or home heating 

7 in those communities; 

8 (L) projects relating to agricultural, grass9 land, and rangeland sequestration and manage10 ment practices, including— 

11 (i) altered tillage practices, including 

12 the avoided abandonment of conservation 

13 practices; 

14 (ii) winter cover cropping, continuous 

15 cropping, and other means to increase bio16 mass returned to soil in lieu of planting 

17 followed by fallowing; 

18 (iii) the use of technology or practices 

19 to improve the management of nitrogen 

20 fertilizer use, including slow and con21 trolled-release fertilizers (including ab22 sorbed, coated, occluded, or reacted fer23 tilizers) and stabilized nitrogen fertilizers 

24 (including urease, nitrification inhibitors, 


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1 and nitrogen stabilizers) that are recog2 nized by State regulators of fertilizers; 

3 (iv) reduction in methane emissions 

4 from rice cultivation; 

5 (v) reduction in carbon emissions 

6 from organically managed soils and farm7 ing practices used on certified organic 

8 farms; 

9 (vi) reduction in greenhouse gas emis10 sions due to changes in animal manage11 ment practices, including dietary modifica12 tions and pasture-based livestock systems; 

13 (vii) resource-conserving crop rota14 tions of at least 3 years; and 

15 (viii) practices that will increase the 

16 sequestration of carbon in soils on crop17 land, hayfields, native and planted grazing 

18 land, grassland, or rangeland; 

19 (M) projects for changes in carbon stocks 

20 attributed to land management change, includ21 ing— 

22 (i) improved management or restora23 tion of cropland, grassland, rangeland (in24 cluding grazing practices), and forest land; 


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1 (ii) avoided conversion that would oth2 erwise release carbon stocks; 

3 (iii) reduced deforestation; 

4 (iv) management and restoration of 

5 peatland or wetland; 

6 (v) urban tree-planting, landscaping, 

7 greenway construction, and maintenance; 

8 (vi) sequestration of greenhouse gases 

9 through management of tree crops; 

10 (vii) adaptation of plant traits or new 

11 technologies that increase sequestration by 

12 forests; and 

13 (viii) projects to restore or prevent the 

14 conversion, loss, or degradation of vege15 tated marine coastal habitats; 

16 (N) projects that reduce emission reduc17 tions from manure and effluent, including— 

18 (i) waste aeration; 

19 (ii) biogas capture and combustion; 

20 and 

21 (iii) improved management or applica22 tion to agricultural land; and 

23 (O) projects that reduce the intensity of 

24 greenhouse gas per unit of agricultural produc25 tion. 


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1 (c) MODIFICATIONS TO THE LISTS OF ELIGIBLE

2 TYPES OF OFFSET PROJECT.— 

3 (1) MODIFICATIONS.— 

4 (A) IN GENERAL.—At any time, after tak5 ing into consideration any relevant rec6 ommendations of the Advisory Committee, the 

7 appropriate official may by regulation deter8 mine whether to add additional types of 

9 projects, pursuant to subsection (a), to the list 

10 of eligible projects of the appropriate official 

11 under subsection (a). 

12 (B) CRITERION FOR ADDITION.—The ap13 propriate official shall add a type of project to 

14 an eligible list in accordance with subparagraph 

15 (A) only if the type of project to be added is ca16 pable of generating emission reductions that 

17 meet the requirements under this title. 

18 (C) PETITION FOR ADDITION.— 

19 (i) IN GENERAL.—Any person may 

20 petition the appropriate official at any time 

21 to add a type of project to a list described 

22 in subsection (a). 

23 (ii) RESPONSE.—Not later than 180 

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1 tion, the appropriate official shall respond 

2 to the petition. 

3 (2) REMOVALS FROM THE LIST.— 

4 (A) IN GENERAL.—Not later than January 

5 1, 2015, and every 3 years thereafter, the ap6 propriate official shall determine whether to re7 move types of projects, pursuant to subsection 

8 (b), from the eligible list of the appropriate offi9 cial. 

10 (B) REQUIREMENTS.—The appropriate of11 ficial may remove a type of project from the eli12 gible list of the appropriate official only— 

13 (i) by regulation; and 

14 (ii) if— 

15 (I) the type of project has be16 come required by law (including a reg17 ulation); 

18 (II) the agency with responsi19 bility for administering the project de20 termines that the environmental harm 

21 resulting from the type of project ex22 ceeds the greenhouse gas emission 

23 abatement benefits of the project; 

24 (III) the project activity has be25 come predominant, and would remain 


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1 predominant even without the avail2 ability of offset credits; and 

3 (IV) the project type does not 

4 meet the requirements of this title. 

5 SEC. 105. REQUIREMENTS FOR OFFSET PROJECTS. 

6 (a) METHODOLOGIES.—Not later than 1 year after 

7 the date of inclusion of a project type on an eligible list 

8 under section 104(a), the appropriate official shall by reg9 ulation establish for that project type 1 or more standard10 ized methodologies (giving priority to projects with well11 established methodologies) or performance standards that 

12 can be developed so that the project type can meet the 

13 requirements of this section— 

14 (1) for use in determining the additionality of 

15 greenhouse gas emission reductions achieved by an 

16 offset project of that type, that ensures, at a min17 imum, that any greenhouse gas emission reduction is 

18 considered additional only to the extent that the 

19 emission reduction results from activities that— 

20 (A) are not required by or undertaken to 

21 comply with any law (including any regulation 

22 or consent order, but excluding any contract); 

23 (B) were not commenced prior to January 

24 1, 2009, except for offset project activities de25 scribed in section 110 that commenced after 


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1 January 1, 2001, and were registered as of the 

2 date of enactment of this Act under an offset 

3 program with respect to which the Adminis4 trator and the Secretary have made an affirma5 tive determination under paragraph (2) or (3) 

6 of section 110(a) or section 110(e); and 

7 (C) exceed the activity baseline established 

8 under subparagraph (B); 

9 (2) for use in establishing activity baselines for 

10 offset projects of that type, which activity baselines 

11 shall be established by the appropriate official to re12 flect a conservative estimate of business-as-usual 

13 performance or practices for the relevant type of ac14 tivity such that the baseline provides a science-based 

15 margin of safety to ensure the emission integrity of 

16 offsets calculated in reference to the baseline, includ17 ing (in the case of an agricultural or forestry offset 

18 project) the establishment by the Secretary of a tem19 porary baseline for offset projects of that type to es20 tablish a date after which offset credits may be cal21 culated with respect to the baseline that may reflect 

22 a continuation of practices in place prior to the 

23 adoption of the offset project; 

24 (3) for use in determining the extent to which 

25 greenhouse gas emission reductions achieved by an 


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1 offset project of that type exceed a relevant activity 

2 baseline, including protocols for use in monitoring 

3 and accounting for uncertainty; and 

4 (4) for use in accounting for and mitigating po5 tential leakage, if any, from an offset project of that 

6 type, taking uncertainty into account. 

7 (b) ACCOUNTING FOR REVERSALS.— 

8 (1) ACCOUNTING.— 

9 (A) IN GENERAL.—For each type of se10 questration project listed under section 104, the 

11 appropriate official shall prescribe such mecha12 nisms to ensure that any sequestration with re13 spect to which an offset credit is issued under 

14 this title results in a net increase in sequestra15 tion, and that a full and transparent account is 

16 taken of any actual or potential reversal of the 

17 sequestration, with an adequate margin of safe18 ty for the complete term of an offset project 

19 agreement approved under section 106. 

20 (B) MINIMUM MECHANISMS.—The appro21 priate official shall prescribe at least 1 of the 

22 following mechanisms to meet the requirements 

23 of this paragraph: 

24 (i) An offsets reserve, pursuant to 

25 paragraph (2). 


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1 (ii) Insurance that provides for pur2 chase and provision to the appropriate offi3 cial for retirement of a quantity of offset 

4 credits or emission allowances equal in 

5 number to the tons of carbon dioxide 

6 equivalents of greenhouse gas emissions re7 leased due to reversal. 

8 (iii) Another mechanism that the ap9 propriate official determines satisfies the 

10 requirements of this title. 

11 (2) OFFSETS RESERVE.— 

12 (A) IN GENERAL.—An offsets reserve re13 ferred to in paragraph (1)(B)(i) is a program 

14 under which, before issuance of offset credits 

15 under this title, the appropriate official shall— 

16 (i) subtract and reserve from the 

17 quantity to be issued a quantity of offset 

18 credits based on the risk of reversal; and 

19 (ii)(I) hold those reserved offset cred20 its in the offsets reserve; and 

21 (II) register the holding of the re22 served offset credits in the registry estab23 lished under section 103(b). 

24 (B) PROJECT REVERSAL.— 


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1 (i) IN GENERAL.—If a reversal has 

2 occurred with respect to an offset project 

3 for which offset credits are reserved under 

4 this paragraph, the appropriate official 

5 shall remove offset credits from the offsets 

6 reserve and cancel the credits to fully ac7 count for the tons of carbon dioxide equiv8 alent that are no longer sequestered. 

9 (ii) INTENTIONAL REVERSALS.—If the 

10 appropriate official determines that a re11 versal was intentional, the offset project 

12 representative for the relevant offset 

13 project shall place into the offsets reserve 

14 a quantity of offset credits, or combination 

15 of offset credits and emission allowances, 

16 equal in number to 150 percent of the 

17 number of reserve offset credits that were 

18 canceled due to the reversal pursuant to 

19 clause (i). 

20 (C) USE OF RESERVED OFFSET CRED21 ITS.—Offset credits placed into the offsets re22 serve under this paragraph may not be used to 

23 comply with other obligations under a Federal 

24 law enacted for the purpose of regulating green25 house gas emissions. 


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1 (3) CARBON AGREEMENTS AND LAND USE

2 FLEXIBILITY.— 

3 (A) APPLICABILITY.— 

4 (i) IN GENERAL.—With respect to an 

5 agricultural, forestry, or any other seques6 tration practice listed under section 104 

7 that sequesters greenhouse gases, the Sec8 retary may develop mechanisms in addition 

9 to paragraphs (1) and (2) in order to en10 sure that less-than-perpetual sequestration 

11 agreements under this subsection meet the 

12 requirements of this section and maintain 

13 the integrity of the overall emission reduc14 tion targets of a Federal law enacted for 

15 the purpose of regulating greenhouse gas 

16 emissions. 

17 (ii) MECHANISMS.—The mechanisms 

18 shall include— 

19 (I) a specific duration of the in20 tended sequestration activity; 

21 (II) clear liability for carbon ac22 counting; 

23 (III) sequential activities; 


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1 (IV) adequate monitoring and ac2 counting systems to maintain the 

3 emission reduction targets; 

4 (V) carbon easements; or 

5 (VI) any other option that meets 

6 the requirements of this section, as 

7 determined by the Secretary. 

8 (B) RESPONSIBILITY FOR ACCOUNTING.— 

9 To account for the termination of any offset 

10 agreement approved under section 106 or the 

11 termination of the sequestration activity, the 

12 Secretary may allow the agreement to assign li13 ability to any part of the agreement for the 

14 purposes of carbon accounting. 

15 (c) CREDITING PERIODS.— 

16 (1) IN GENERAL.—For each offset project type, 

17 the appropriate official shall specify a crediting pe18 riod, and establish provisions for petitions for new 

19 crediting periods, in accordance with this subsection. 

20 (2) DURATION.— 

21 (A) IN GENERAL.—Except as provided in 

22 subparagraph (B), the crediting period shall be 

23 not less than 5 nor greater than 10 years. 


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1 (B) FORESTRY PROJECTS.—The crediting 

2 period for a forestry offset project shall not ex3 ceed 30 years. 

4 (3) ELIGIBILITY.— 

5 (A) IN GENERAL.—An offset project shall 

6 be eligible to generate offset credits under this 

7 title only during the crediting period of the off8 set project. 

9 (B) REMAINING ELIGIBILITY.—Except as 

10 provided in paragraph (4), during a crediting 

11 period described in subparagraph (A), an offset 

12 project shall remain eligible to generate offset 

13 credits, subject to the methodologies and 

14 project type eligibility list that applied as of the 

15 date of project approval under section 106. 

16 (4) PETITION FOR NEW CREDITING PERIOD.— 

17 (A) IN GENERAL.—An offset project rep18 resentative may petition for a new crediting pe19 riod to commence after termination of a cred20 iting period, subject to the methodologies and 

21 project type eligibility list in effect at the time 

22 at which the petition is submitted. 

23 (B) TIMING OF SUBMISSION.—A petition 

24 may not be submitted under this paragraph 


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1 more than 1 year before the end of the pending 

2 crediting period. 

3 (C) RESPONSE.—The appropriate official 

4 shall make a determination on the petition in 

5 accordance with section 106. 

6 (d) EMISSION REDUCTION INTEGRITY.—In estab7 lishing the requirements under this section, the appro8 priate official shall apply conservative assumptions or 

9 methods to maximize the probability that the emission re10 duction integrity of Federal benchmarks or mandates are 

11 not compromised. 

12 (e) PREEXISTING METHODOLOGIES.—In promul13 gating requirements under this section, the appropriate of14 ficial shall give due consideration to methodologies for off15 set projects existing as of the date of enactment of this 

16 Act. 

17 (f) ADDITIONAL BENEFITS.—Nothing in this section 

18 precludes an offset project from meeting the requirements 

19 of this section, or from approval under section 106, only 

20 because the relevant activity under section 104 receives 

21 an additional payment from another source for an ecologi22 cal service other than emission reductions, including con23 servation program payments. 

24 (g) DATA COLLECTION.—The appropriate official 

25 shall collect such data as are necessary to assess a range 


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1 of factors relative to the performance and effects of any 

2 offset project type. 

3 SEC. 106. APPROVAL. 

4 (a) PROJECT PETITION.— 

5 (1) IN GENERAL.—Not later than the date of 

6 submission of the first verification report for an off7 set project under section 107, the offset project rep8 resentative shall submit to the appropriate official a 

9 petition for approval of the offset project. 

10 (2) PETITION REQUIREMENTS.—As part of the 

11 regulations promulgated under this title, the appro12 priate official shall include provisions for, and shall 

13 specify, the required components of an offset project 

14 approval petition submitted under this subsection, 

15 including— 

16 (A) designation of an offset project rep17 resentative; and 

18 (B) any other information that the appro19 priate official considers to be necessary— 

20 (i) to determine whether the offset 

21 project meets the established criteria under 

22 this section; and 

23 (ii) to meet the purposes and require24 ments of this title. 

25 (b) APPROVAL AND NOTIFICATION.— 


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1 (1) IN GENERAL.—Not later than 30 days after 

2 receiving a complete approval petition under sub3 section (a), the appropriate official shall— 

4 (A)(i) make determinations on whether to 

5 approve an offset plan and on the quantity of 

6 greenhouse gas emissions that have been re7 duced or avoided, or greenhouse gases that have 

8 been sequestered, by the offset practice in an 

9 approved and verified offset project plan; and 

10 (ii) notify the offset project developer in 

11 writing of the determination; and 

12 (B) based on the determination under sub13 paragraph (A)— 

14 (i) approve or deny the petition in 

15 writing; 

16 (ii) notify the offset project represent17 ative in writing of the determination; and 

18 (iii) if the petition is denied, provide 

19 the reasons for denial. 

20 (2) RESUBMISSION.—After an offset project is 

21 approved, the offset project representative shall not 

22 be required to resubmit an approval petition during 

23 the crediting period of the offset project. 


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1 (c) APPEAL.—The appropriate official shall establish 

2 mechanisms for appeal and review of determinations made 

3 under this section. 

4 (d) THIRD-PARTY REVIEW.—The appropriate official 

5 may provide for accreditation of independent third parties 

6 to provide recommendations to the appropriate official on 

7 approvals under this section. 

8 (e) VOLUNTARY PREAPPROVAL REVIEW.— 

9 (1) IN GENERAL.—The appropriate official may 

10 establish a voluntary preapproval review procedure 

11 to allow an offset project representative to request 

12 the appropriate official to conduct a preliminary eli13 gibility review for an offset project. 

14 (2) FINDINGS.—Any findings of a review de15 scribed in paragraph (1) shall not be binding upon 

16 the appropriate official. 

17 (3) REQUIREMENTS.—The voluntary 

18 preapproval review procedure shall require— 

19 (A) the offset project representative to 

20 submit such basic project information as the 

21 appropriate official requires to provide a mean22 ingful review; and 

23 (B) a response from the appropriate offi24 cial not later than 30 days after the date of reVerDate Nov 24 2008 01:16 Nov 05, 2009 Jkt 089200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\S2729.IS S2729

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1 ceipt by the appropriate official of a request for 

2 review under this subsection. 

3 SEC. 107. VERIFICATION OF OFFSET PROJECTS. 

4 (a) IN GENERAL.—As part of the regulations promul5 gated under this title, the Secretary and the Administrator 

6 shall jointly establish requirements, including protocols, 

7 for verification of the quantity of greenhouse gas emission 

8 reductions that have resulted from an offset project. 

9 (b) VERIFICATION REPORTS.— 

10 (1) IN GENERAL.—The regulations described in 

11 subsection (a) shall require an offset project rep12 resentative to submit a report, prepared by a third13 party verifier accredited under subsection (d), pro14 viding such information as the appropriate official 

15 requires to determine the quantity of greenhouse gas 

16 emission reductions resulting from the offset project. 

17 (2) SCHEDULES.—The appropriate officials 

18 shall jointly prescribe schedules for the submission 

19 of verification reports under paragraph (1). 

20 (3) REQUIREMENTS.—The appropriate official 

21 shall specify the required components of a 

22 verification report required under subsection (a), in23 cluding— 


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1 (A) the name and contact information for 

2 the offset project representative for the offset 

3 project; 

4 (B) the quantity of greenhouse gas emis5 sion reductions; 

6 (C) the methodologies applicable to the 

7 project pursuant to section 105; 

8 (D) a certification that the project meets 

9 the applicable requirements; 

10 (E) a certification establishing that the 

11 conflict of interest requirements in the regula12 tions promulgated under this title have been 

13 complied with; and 

14 (F) any other information that the appro15 priate official considers to be necessary to 

16 achieve the purposes of this title. 

17 (c) APPEALS.—The appropriate official shall estab18 lish procedures for appeal and review of determinations 

19 made under this section. 

20 (d) VERIFIER ACCREDITATION.— 

21 (1) IN GENERAL.—As part of the regulations 

22 promulgated under this title, the appropriate offi23 cials shall jointly establish a process and require24 ments for periodic accreditation of third-party 


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1 verifiers to ensure that those verifiers are profes2 sionally qualified and have no conflicts of interest. 

3 (2) STANDARDS.— 

4 (A) AMERICAN NATIONAL STANDARDS IN5 STITUTE ACCREDITATION.— 

6 (i) IN GENERAL.—The appropriate of7 ficials may jointly accredit, or accept for 

8 purposes of accreditation under this sub9 section, verifiers accredited under the 

10 American National Standards Institute ac11 creditation program in accordance with 

12 standard 14065 of the International Orga13 nization of Standards. 

14 (ii) REQUIREMENT.—The appropriate 

15 officials shall accredit, or accept for ac16 creditation, verifiers under this subpara17 graph only if the appropriate official finds 

18 that the American National Standards In19 stitute accreditation program provides suf20 ficient assurance that the requirements of 

21 this title will be met. 

22 (B) USDA AND EPA ACCREDITATION.—As 

23 part of the regulations promulgated under this 

24 title, the appropriate officials may jointly estab25 lish accreditation standards for verifiers under 


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1 this subsection, including related training and 

2 testing programs and requirements. 

3 (3) PUBLIC ACCESSIBILITY.—Each verifier 

4 meeting the requirements for accreditation in ac5 cordance with this subsection shall be listed in a 

6 publicly accessible database, which shall be main7 tained and updated jointly by the appropriate offi8 cials. 

9 (e) ADDITIONAL TECHNOLOGY.—The Administrator 

10 and the Secretary may coordinate and use available re11 sources of any Federal agency, State agency, or other ap12 propriate source that coordinates or collects data from any 

13 appropriate technology (including data imaging, remote 

14 sensing, light detection and ranging, or other satellite 

15 technologies) to verify emission reductions generated 

16 under this title. 

17 SEC. 108. ISSUANCE OF OFFSET CREDITS. 

18 (a) ISSUANCE OF OFFSET CREDITS.—The Adminis19 trator, in consultation with the Secretary with regards to 

20 domestic agricultural and forestry projects, shall issue 1 

21 offset credit to an offset project representative for each 

22 ton of carbon dioxide equivalent in emission reductions 

23 from an offset project that the appropriate official has 

24 verified pursuant to section 107. 


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1 (b) TIMING.—Offset credits meeting the criteria de2 scribed in subsection (a) shall be issued by the Adminis3 trator not later than 14 days after the date on which the 

4 Administrator receives notice of the determination under 

5 section 106, including approval and verification informa6 tion. 

7 (c) REGISTRATION.—In the case of domestic agricul8 tural and forestry projects the Administrator, in consulta9 tion with the Secretary, shall assign a unique serial num10 ber to and register each offset project to be issued under 

11 this title pursuant to section 103(b). 

12 SEC. 109. AUDITS AND REVIEWS. 

13 (a) IN GENERAL.—The appropriate officials shall, on 

14 an ongoing basis, conduct random audits and reviews of 

15 offset projects. 

16 (b) MINIMUM AUDITS AND REVIEWS.—For each fis17 cal year, the appropriate officials shall conduct audits and 

18 reviews, at minimum, for a representative sample of 

19 project types, geographical areas, verification standards 

20 and certified verifiers, and specific administrative proc21 esses of that offset program. 

22 (c) PUBLIC AVAILABILITY OF INFORMATION.—The 

23 appropriate officials shall make the results of all audits, 

24 in the aggregate, and reviews conducted under this section 

25 available to the public. 


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1 (d) DELEGATION.— 

2 (1) IN GENERAL.—The appropriate official may 

3 delegate to a State or tribal government the respon4 sibility for conducting audits under this section if 

5 the appropriate official finds that— 

6 (A) the program proposed by the State or 

7 tribal government provides assurances equiva8 lent to the assurances provided by the auditing 

9 program of the appropriate official; and 

10 (B) the integrity of the offset program 

11 under this title will be maintained. 

12 (2) AUDITS BY APPROPRIATE OFFICIAL.—Noth13 ing in this subsection prevents an appropriate offi14 cial from conducting any audit the appropriate offi15 cial considers appropriate. 

16 SEC. 110. EARLY OFFSET SUPPLY. 

17 (a) DEFINITION OF QUALIFIED EARLY OFFSET PRO18 GRAM.—In this section, the term ‘‘qualified early offset 

19 program’’ means any regulatory or voluntary greenhouse 

20 gas emission offset program approved under subsection 

21 (b). 

22 (b) PROGRAM APPROVAL.— 

23 (1) IN GENERAL.—The administrator of a regu24 latory or voluntary greenhouse gas emission offset 

25 program may apply to the Administrator and the 


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1 Secretary for approval as a qualified early offset 

2 program under this subsection. 

3 (2) DETERMINATIONS.—The Administrator, in 

4 conjunction with the Secretary, shall— 

5 (A) not later than 30 days after the date 

6 of enactment of this Act, establish a process to 

7 receive applications received under this sub8 section; and 

9 (B) not later than 180 days after the date 

10 of receipt of any application received under this 

11 subsection, make a determination on the appli12 cation. 

13 (3) CRITERIA FOR APPROVAL.—The Adminis14 trator, in conjunction with the Secretary, shall ap15 prove as a qualified early offset program under this 

16 subsection any regulatory or voluntary greenhouse 

17 gas emission offset program that— 

18 (A) was established before January 1, 

19 2009; 

20 (B) has developed or approved offset 

21 project-type standards, methodologies, and pro22 tocols through a public consultation process or 

23 a public peer review process; 


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1 (C) has made available to the public the 

2 standards, methodologies, and protocols of the 

3 program for emission reduction projects; 

4 (D) requires that all emission reductions 

5 be verified by a State regulatory agency or an 

6 accredited third-party independent verification 

7 entity; 

8 (E) requires that all issued credits be reg9 istered in a publicly accessible registry, with in10 dividual serial numbers assigned for each ton of 

11 carbon dioxide equivalent emission reductions; 

12 and 

13 (F) ensures that no credits are issued for 

14 activities for which the administrator of the 

15 program has funded, solicited, or served as a 

16 fund administrator for the development of the 

17 project or activity that caused the emission re18 duction. 

19 (4) REVOCATION OR DISAPPROVAL.—The Ad20 ministrator, in conjunction with the Secretary, 

21 may— 

22 (A) revoke the approval of a qualified early 

23 offset program under this subsection if the pro24 gram does not meet the criteria described in 

25 paragraph (3); or 


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1 (B) determine that a regulatory or vol2 untary greenhouse gas emission offset program 

3 shall not be considered a qualified early offset 

4 program with respect to a particular project 

5 type if, as determined by the Administrator, in 

6 conjunction with the Secretary, the standard, 

7 methodology, or protocol of the program for 

8 that project type fails to ensure that credits 

9 only will be provided for emission reductions 

10 that are measurable, additional, verifiable, and 

11 enforceable. 

12 (c) OFFSET CREDITS.—Subject to subsections (d), 

13 (e), and (f), the Administrator, in conjunction with the 

14 Secretary, shall issue 1 offset credit for each ton of carbon 

15 dioxide equivalent in emission reductions achieved— 

16 (1) under an offset project that commenced 

17 after January 1, 2001; and 

18 (2) for which a credit was issued under a quali19 fied early offset program. 

20 (d) INELIGIBLE CREDITS.—Subsection (b) shall not 

21 apply to offset credits that have expired or have been re22 tired, canceled, or used for compliance under a program 

23 established under State or tribal law (including a regula24 tion). 


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1 (e) LIMITATION.—Notwithstanding subsection (c)(1), 

2 offset credits shall be issued under this section only for 

3 a crediting period pursuant to section 105(c) that— 

4 (1) commences— 

5 (A) not earlier than January 1, 2001; and 

6 (B) not later than the date on which the 

7 regulations for methodologies promulgated 

8 under this title take effect; and 

9 (2) does not exceed the shorter of— 

10 (A) 10 years; or 

11 (B) the established crediting period for the 

12 project (in accordance with the rules of the 

13 qualified early offset program). 

14 (f) PRECLUSION OF DOUBLE PAYMENT.—Emission 

15 reductions shall not receive credits under this section if 

16 the emission reductions— 

17 (1) occurred prior to January 1, 2009; and 

18 (2) were awarded payments pursuant to the au19 thority of the Secretary under the carbon conserva20 tion program established under title II. 

21 (g) RETIREMENT OF CREDITS.—The Administrator 

22 shall ensure, to the maximum extent practicable, that off23 set credits described in subsection (c) are retired for pur24 poses of use under a program described in subsection (d). 


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1 (h) INTERNATIONAL REDUCED DEFORESTATION

2 PROJECTS.— 

3 (1) IN GENERAL.—Subject to paragraphs (2) 

4 and (3), the Administrator shall issue under this 

5 subsection 1 offset credit for each ton of carbon di6 oxide equivalent emissions reduced by an offset 

7 project that— 

8 (A) is an international reduced deforest9 ation project; 

10 (B) started after January 1, 2001; 

11 (C) not later than 2 years after the date 

12 of enactment of this Act, is registered with a 

13 regulatory or voluntary greenhouse gas emission 

14 offset program that the Administrator deter15 mines— 

16 (i) meets all of the requirements of 

17 subsection (b); and 

18 (ii) was established under State law 

19 (including regulations) or designated by a 

20 State as an offset registry prior to Janu21 ary 1, 2009; and 

22 (D) is issued offset credits for the emission 

23 reductions achieved by the project under an off24 set program for which the Administrator has 


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1 made an affirmative determination under sub2 paragraph (C). 

3 (2) INCONSISTENCY WITH CERTAIN PUR4 POSES.—Paragraph (1) shall not apply if the Ad5 ministrator makes a determination, not later than 

6 90 days after the date on which public notice is pro7 vided of a project petition, that a project is incon8 sistent with the policies established under any Fed9 eral law enacted for the purpose of regulating green10 house gas emissions to protect the rights and inter11 ests of local communities and to protect forest eco12 systems. 

13 (3) LIMITATION.—Notwithstanding subsection 

14 (e), offset credits shall be issued under this sub15 section only for greenhouse gas emission reductions 

16 that occur under an eligible international reduced 

17 deforestation project during the period beginning on 

18 January 1, 2009, and ending on— 

19 (A) in the case of a project located in a 

20 country that accounts for less than 1 percent of 

21 the global greenhouse gas emissions and less 

22 than 3 percent of global forest-sector and land 

23 use change greenhouse gas emissions, December 

24 31 of the first full calendar year following the 


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1 effective date of regulations promulgated to 

2 carry out this title; or 

3 (B) in the case of a project located in a 

4 country that does not meet the criteria de5 scribed in subparagraph (A), the date that is 2 

6 years after the date of enactment of this Act. 

7 SEC. 111. PROGRAM REVIEW AND REVISION. 

8 At least once every 5 years, the Administrator, in 

9 consultation with the Secretary, shall review, based on new 

10 or updated information and taking into consideration the 

11 recommendations of the Advisory Committee— 

12 (1) the list of eligible project types established 

13 under section 104; 

14 (2) the methodologies established, including 

15 specific activity baselines, under section 105; 

16 (3) the reversal requirements and mechanisms 

17 established or prescribed under section 105; 

18 (4) measures to improve the accountability of 

19 the offsets program; and 

20 (5) any other requirements established under 

21 this title to ensure the environmental integrity and 

22 effective operation of this title. 


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1 SEC. 112. ADDITIONAL REGULATORY STANDARDS FOR 

2 EMISSION REDUCTIONS. 

3 (a) IN GENERAL.—Nothing in this title authorizes 

4 the Administrator to promulgate any additional regulatory 

5 standards for emission reductions from any project or ac6 tivity (including emission reductions from any non-fossil 

7 fuel agricultural source) carried out under this title. 

8 (b) ALLOWANCE OR CREDIT OBLIGATIONS.—No per9 son shall be required to hold allowances or credits for 

10 emissions resulting from the use of gas as an energy 

11 source if the gas is derived from a domestic methane offset 

12 project approved under this title. 

13 (c) RELATIONSHIP TO OTHER LAWS.—Notwith14 standing any other provision of law, emissions that are 

15 limited under this title shall not be subject to any other 

16 limitation that is established under a Federal law enacted 

17 or applied for the purpose of regulating greenhouse gas 

18 emissions. 

19 SEC. 113. USE OF CREDITS FOR COMPLIANCE PURPOSES. 

20 The Administrator shall promulgate regulations to 

21 require that, for each calendar year beginning with the 

22 first fiscal year in which the limitation on the emission 

23 of greenhouse gases under a Federal law enacted for the 

24 purpose of regulating greenhouse gas emissions takes ef25 fect, owners and operators of facilities that are subject to 

26 regulation under that law may satisfy the allowance subVerDate Nov 24 2008 01:16 Nov 05, 2009 Jkt 089200 PO 00000 Frm 00048 Fmt 6652 Sfmt 6201 E:\BILLS\S2729.IS S2729

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1 mission requirements of the owners and operators under 

2 that law by submitting credits generated pursuant to this 

3 title. 

4 TITLE II—CARBON 

5 CONSERVATION PROGRAM 

6 SEC. 201. DEFINITIONS. 

7 In this title: 

8 (1) FUND.—The term ‘‘Fund’’ means the Car9 bon Conservation Fund established under section 

10 203. 

11 (2) PROGRAM.—The term ‘‘program’’ means 

12 the carbon conservation program established under 

13 section 202. 

14 (3) SECRETARIES.—The term ‘‘Secretaries’’ 

15 means the Secretary of Agriculture and Secretary of 

16 the Interior, as appropriate. 

17 SEC. 202. CARBON CONSERVATION PROGRAM. 

18 (a) IN GENERAL.—The Secretary of Agriculture shall 

19 establish, and jointly administer with the Secretary of the 

20 Interior, a carbon conservation program for the purpose 

21 of promoting greenhouse gas emissions reduction or car22 bon sequestration. 

23 (b) FORESTRY ACTIVITIES.—The Secretary of Agri24 culture shall designate the Chief of the Forest Service to 

25 carry out all forestry-related components of the program. 


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1 (c) PURPOSES.— 

2 (1) IN GENERAL.—In carrying out the program, 

3 the Secretaries shall provide incentives to land4 owners or grazing contractor holders to carry out 

5 projects or activities that reduce greenhouse gas 

6 emissions or sequester or permanently store carbon. 

7 (2) ADMINISTRATION.—In administering the 

8 program, the Secretaries shall ensure that projects 

9 or activities conducted under this title— 

10 (A) do not receive offset credits for the 

11 same activity under title I; 

12 (B) reward the continuation of practices by 

13 early adopters of conservation practices (includ14 ing no-till agricultural practices) that provide 

15 carbon sequestration benefits; 

16 (C) support the development of new meth17 odologies for landowners to participate in offset 

18 projects under title I; 

19 (D) ensure that individuals and entities 

20 that took action prior to the implementation of 

21 the offset program under title I, and do not 

22 qualify for early offset credits under section 

23 110, are not placed at a competitive disadvan24 tage; 


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1 (E) improve management of privately 

2 owned agricultural land, grassland, and forest 

3 land that results in an increase in carbon se4 questration; 

5 (F) avoid conversion of land (including na6 tive grassland, native prairie, rangeland, crop7 land, or forest land) that would result in an in8 crease of greenhouse gas emissions or a loss of 

9 carbon sequestration; and 

10 (G) encourage improvements and manage11 ment practices that include sequestration bene12 fits on Federal land and private land. 

13 (d) METHODS.— 

14 (1) IN GENERAL.—In carrying out the program, 

15 the Secretaries shall provide incentives for projects 

16 or activities that reduce greenhouse gas emissions or 

17 sequester carbon through— 

18 (A) conservation easements; 

19 (B) sequestration contracts; 

20 (C) timber harvest or grazing contracts 

21 with the Department of Agriculture or the De22 partment of the Interior, as appropriate; or 

23 (D) any combination of the methods de24 scribed in this paragraph. 


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1 (2) INELIGIBILITY FOR OFFSET CREDITS.— 

2 Projects or activities undertaken as part of the pro3 gram shall not be eligible for offset credits under 

4 title I for the duration of the projects or activities. 

5 (e) CONSERVATION EASEMENTS.— 

6 (1) IN GENERAL.—The Secretary of Agriculture 

7 shall enroll acreage into the program through the 

8 use of permanent easements. 

9 (2) REQUIREMENTS.—To be eligible for enroll10 ment under this title, conservation easements estab11 lished under this subsection shall— 

12 (A) provide a measurable carbon seques13 tration benefit; and 

14 (B) meet the requirements of part VI of 

15 subchapter B of chapter 1 of subtitle A of the 

16 Internal Revenue Code of 1986 and section 

17 170(h)(4) of that Code. 

18 (3) PRIORITY.—In selecting projects for con19 servation easements, the Secretary of Agriculture 

20 shall provide a priority for conservation easements 

21 that sequester carbon and protect forested land or 

22 working forest land, or protect native prairie or na23 tive grassland, within the boundary of a working 

24 farm or ranch. 

25 (f) CARBON SEQUESTRATION CONTRACTS.— 


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1 (1) IN GENERAL.—The Secretary of Agriculture 

2 may offer carbon sequestration contracts under the 

3 program for a period of 10 years to farmers, ranch4 ers, and forest owners who perform projects or ac5 tivities to reduce greenhouse gas emissions or se6 quester carbon. 

7 (2) WITHDRAWAL.—A nonforestry contract 

8 holder may withdraw from a contract under this 

9 subsection without penalty after 5 years. 

10 (3) COMPENSATION.—The amount of com11 pensation provided under a contract under this sub12 section shall be commensurate with the emissions re13 ductions obtained or avoided and the duration of the 

14 reductions. 

15 (4) PRIORITY.—In selecting projects under this 

16 subsection during each of fiscal years 2012 through 

17 2015, the Secretary of Agriculture shall provide a 

18 priority for— 

19 (A) contracts entered into with early 

20 adopters of conservation practices (such as no21 till agricultural practices), improved forest man22 agement, or other greenhouse gas emissions re23 duction projects; and 

24 (B) contracts that sequester the most car25 bon on a per acre basis. 


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1 (5) CONTRACT.—A contract under this sub2 section shall specify— 

3 (A) the eligible practices that will be un4 dertaken; 

5 (B) the acreage of eligible land on which 

6 the practices will be undertaken; 

7 (C) the agreed rate of compensation per 

8 acre; and 

9 (D) a schedule to verify that the terms of 

10 the contract have been fulfilled. 

11 (6) FUTURE REDUCTIONS.—If the term of a 

12 contract for a sequestration project under this sub13 section has expired, future reductions under the 

14 project may be eligible to receive carbon offset cred15 its if the project and associated reductions meet all 

16 applicable offsets criteria under title I. 

17 (7) REVERSALS.—In developing regulations for 

18 carbon sequestration contracts under this subsection, 

19 the Secretary of Agriculture shall specify require20 ments to address intentional or unintentional rever21 sal of carbon sequestration during the contract pe22 riod. 

23 (g) INCENTIVES IN TIMBER HARVEST CONTRACTS.— 

24 (1) IN GENERAL.—The Secretaries shall offer 

25 financial incentives under the program through timVerDate Nov 24 2008 01:16 Nov 05, 2009 Jkt 089200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 E:\BILLS\S2729.IS S2729

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1 ber harvest contracts entered into by the Forest 

2 Service or the Bureau of Land Management (as ap3 propriate) for projects or management activities that 

4 sequester carbon or reduce greenhouse gas emis5 sions. 

6 (2) COMPENSATION.—The amount of com7 pensation provided under this subsection shall be 

8 commensurate with— 

9 (A) the emissions reductions obtained or 

10 avoided; and 

11 (B) the estimate of the cost of the project 

12 or activities undertaken. 

13 (h) INCENTIVES IN GRAZING CONTRACTS.— 

14 (1) IN GENERAL.—The Secretaries shall offer 

15 incentives to leaseholders through grazing contracts 

16 entered into by the Forest Service or the Bureau of 

17 Land Management (as appropriate) for projects or 

18 activities that sequester carbon or reduce greenhouse 

19 gas emissions. 

20 (2) COMPENSATION.—The amount of com21 pensation provided under this subsection shall be 

22 commensurate with— 

23 (A) the emissions reductions obtained or 

24 avoided; and 


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1 (B) the estimate of the cost of the project 

2 or activities undertaken. 

3 (i) DISTRIBUTION OF AMOUNTS.—Of the amounts 

4 provided to carry out the program for a fiscal year, at 

5 least 30 percent of the amount shall be used for conserva6 tion easements described in subsection (e). 

7 (j) PROGRAM MEASUREMENT, MONITORING, AND

8 REPORTING REQUIREMENTS.— 

9 (1) IN GENERAL.—The Secretaries shall submit 

10 to the Administrator of the Environmental Protec11 tion Agency annual reports that describe— 

12 (A) the total number of tons of carbon di13 oxide sequestered or the total number of tons of 

14 emissions avoided under the program through 

15 conservation easements, sequestration contracts, 

16 or other methods on an annual and cumulative 

17 basis; 

18 (B) any reversals of sequestration; and 

19 (C) the total number of acres enrolled in 

20 the program by method and a State-by-State 

21 summary of the data. 

22 (2) PUBLIC AVAILABILITY.—The Administrator 

23 of the Environmental Protection Agency shall make 

24 each report required under this subsection available 


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1 to the public through the website of the Environ2 mental Protection Agency. 

3 (k) COORDINATION.— 

4 (1) SECRETARY OF AGRICULTURE.—The Sec5 retary of Agriculture shall coordinate activities 

6 under the program with the activities of the Sec7 retary of Agriculture in carrying out— 

8 (A) the conservation reserve program es9 tablished under subchapter B of chapter 1 of 

10 subtitle D of title XII of the Food Security Act 

11 of 1985 (16 U.S.C. 3831 et seq.); 

12 (B) the wetlands reserve program estab13 lished under subchapter C of chapter 1 of sub14 title D of title XII of that Act (16 U.S.C. 3837 

15 et seq.); 

16 (C) the farmland protection program es17 tablished under subchapter C of chapter 2 of 

18 subtitle D of title XII of that Act (16 U.S.C. 

19 3838h et seq.) (commonly known as the ‘‘Farm 

20 and Ranch Lands Protection Program’’); 

21 (D) the grassland reserve program estab22 lished under subchapter D of chapter 2 of sub23 title D of title XII of that Act (16 U.S.C. 

24 3838n et seq.); 


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1 (E) the State and private forestry pro2 grams of the Forest Service; 

3 (F) the healthy forests reserve program es4 tablished under section 501 of the Healthy For5 ests Restoration Act of 2003 (16 U.S.C. 6571); 

6 and 

7 (G) other applicable programs. 

8 (2) SECRETARY OF THE INTERIOR.—The Sec9 retary of the Interior shall coordinate activities 

10 under the program with the activities of the Sec11 retary of the Interior in carrying out— 

12 (A) programs funded through the Land 

13 and Water Conservation Fund Act of 1965 (16 

14 U.S.C. 460l–4 et seq.); 

15 (B) any applicable climate adaptation pro16 grams; and 

17 (C) other applicable programs. 

18 (l) REVIEWS.— 

19 (1) IN GENERAL.—Not later than 5 years after 

20 the date of enactment of this Act and every 5 years 

21 thereafter, the Secretaries shall— 

22 (A) conduct a review of the activities car23 ried out under this title; and 


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1 (B) make any appropriate changes in the 

2 program, in a manner consistent with this sec3 tion, based on the findings of the review. 

4 (2) REVIEW.—Each review shall include a re5 view of— 

6 (A) total emissions reductions and seques7 tration achieved by activity type; 

8 (B) the net effect on average farm income 

9 by activity type; 

10 (C) the potential for future emissions re11 ductions and sequestration by activity type; and 

12 (D) recommended changes to the program 

13 based on the review. 

14 SEC. 203. CARBON CONSERVATION FUND. 

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

16 Treasury a separate account, to be known as the ‘‘Carbon 

17 Conservation Fund’’, to carry out this title. 

18 (b) AVAILABILITY.—All amounts deposited into the 

19 Fund shall be available without further appropriation or 

20 fiscal year limitation. 

21 (c) USE.—The Secretary shall use amounts in the 

22 Fund to carry out this title. 


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1 TITLE III—RURAL CLEAN 

2 ENERGY RESOURCES 

3 SEC. 301. FINDINGS. 

4 Congress finds that— 

5 (1) lifecycle greenhouse gas emissions associ6 ated with the production and use of biofuels, bio7 products, and bioenergy may be significantly lower 

8 than the emissions associated with the production 

9 and use of fossil fuels; 

10 (2) the United States has the potential to sig11 nificantly increase the production and use of biofuels 

12 and bioenergy; 

13 (3) expanding the production and use of 

14 biofuels and bioenergy offers a significant oppor15 tunity for rural economic development and enhanc16 ing national energy security; and 

17 (4) several programs authorized or funded 

18 under the Food, Conservation, and Energy Act of 

19 2008 (7 U.S.C. 8701 et seq.) are designed to accel20 erate the development and deployment of tech21 nologies for expeditiously expanding domestic 

22 biofuels and bioenergy production. 


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1 SEC. 302. BIOREFINERY ASSISTANCE. 

2 Of the amounts in the Rural Clean Energy Resources 

3 Fund established under section 305, the Secretary shall 

4 use— 

5 (1) not less than 20 percent to provide grants 

6 under section 9003 of the Farm Security and Rural 

7 Investment Act of 2002 (7 U.S.C. 8103); and 

8 (2) not less than 60 percent to provide loan 

9 guarantees under that section. 

10 SEC. 303. REPOWERING ASSISTANCE. 

11 Section 9004 of the Farm Security and Rural Invest12 ment Act of 2002 (7 U.S.C. 8104) is amended— 

13 (1) by redesignating subsections (a) through (d) 

14 as subsections (b) through (e), respectively; 

15 (2) by inserting after the section heading the 

16 following: 

17 ‘‘(a) DEFINITION OF ELIGIBLE ENTITY.—In this sec18 tion: 

19 ‘‘(1) IN GENERAL.—The term ‘eligible entity’ 

20 means— 

21 ‘‘(A) a biorefinery; or 

22 ‘‘(B) a power plant or manufacturing facil23 ity that— 

24 ‘‘(i) has a combined thermal and elec25 trical energy conversion capacity of not 

26 greater than 75 megawatts; and 


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1 ‘‘(ii) is located in a rural area (as de2 fined in section 343(a) of the Consolidated 

3 Farm and Rural Development Act (7 

4 U.S.C. 1991(a))). 

5 ‘‘(2) EXCLUSION.—The term ‘eligible entity’ 

6 does not include an energy-intensive trade-exposed 

7 facility.’’; 

8 (3) in subsection (b) (as redesignated by para9 graph (1))— 

10 (A) by striking ‘‘IN GENERAL’’ and insert11 ing ‘‘PROGRAM’’; and 

12 (B) by striking ‘‘biorefineries’’ each place 

13 it appears and inserting ‘‘eligible entities’’; and 

14 (4) in subsections (c) and (d) (as so redesig15 nated)— 

16 (A) by striking ‘‘a biorefinery’’ each place 

17 it appears and inserting ‘‘an eligible entity’’; 

18 and 

19 (B) by striking ‘‘biorefinery’’ each place it 

20 appears and inserting ‘‘eligible entity’’. 

21 SEC. 304. RURAL ENERGY FOR AMERICA PROGRAM. 

22 (a) IN GENERAL.—Of the amounts in the Rural 

23 Clean Energy Resources Fund established under section 

24 305, the Secretary shall use such funds as are appropriate 

25 to carry out the Rural Energy for America Program under 


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1 section 9007 of the Farm Security and Rural Investment 

2 Act of 2002 (7 U.S.C. 8107). 

3 (b) LIMITATION ON GRANTS.—Section 9007(c)(4)(A) 

4 of the Farm Security and Rural Investment Act of 2002 

5 (7 U.S.C. 8107(c)(4)(A)) is amended by striking ‘‘25 per6 cent’’ and inserting ‘‘50 percent’’. 

7 SEC. 305. RURAL CLEAN ENERGY RESOURCES FUND. 

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

9 Treasury a separate account, to be known as the ‘‘Rural 

10 Clean Energy Resources Fund’’, to carry out this title and 

11 title IV. 

12 (b) AVAILABILITY.—All amounts deposited into the 

13 Fund shall be available without further appropriation or 

14 fiscal year limitation. 

15 (c) USE.—The Secretary shall use amounts in the 

16 Fund to carry out this title and title IV. 

17 TITLE IV—AGRICULTURE AND 

18 FORESTRY RESEARCH FOR 

19 GREENHOUSE GAS MITIGA20 TION 

21 SEC. 401. FINDINGS. 

22 Congress finds that— 

23 (1) as of the date of enactment of this Act, the 

24 agricultural and forestry sectors of the United 

25 States extract the equivalent of about 12 percent of 


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1 the annual greenhouse gas emissions of the United 

2 States through carbon dioxide absorption from the 

3 atmosphere; 

4 (2) that percentage can be significantly in5 creased through a number of activities that increase 

6 carbon sequestration in soils or forests; 

7 (3) agriculture and forestry are experiencing 

8 the effects of global warming, which are expected to 

9 increase; and 

10 (4) adaptation practices to mitigate the effects 

11 of global warming are needed to sustain agricultural 

12 and forest productivity and health. 

13 SEC. 402. RESEARCH AND DEMONSTRATION PROGRAM. 

14 (a) IN GENERAL.—The Secretary shall carry out re15 search and demonstration activities regarding— 

16 (1) approaches to sequestering carbon through 

17 agricultural, grazing, and forestry practices, includ18 ing quantification of sequestration effects; 

19 (2) approaches to reducing methane emissions 

20 associated with agricultural production (including 

21 livestock and crop production), including quantifica22 tion of those reductions; 

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1 ing crop and livestock production), including quan2 tification of those reductions; 

3 (4) approaches to adaptation of agriculture and 

4 forestry practices to the effects of global warming in 

5 order to maintain productivity and natural re6 sources; 

7 (5) new approaches to soil carbon sequestration, 

8 such as the production of biochar and the use of 

9 biochar as a soil conditioner; 

10 (6) approaches to help specialty crop producers 

11 to reduce net greenhouse gas emissions or sequester 

12 carbon; and 

13 (7) methods to reduce uncertainties in esti14 mating greenhouse gas emission reductions and car15 bon sequestration through agricultural and forestry 

16 activities. 

17 (b) FUND.—Of the amounts in the Rural Clean En18 ergy Resources Fund established under section 305, the 

19 Secretary shall use such funds as are appropriate to carry 

20 out this section. 

Æ 


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